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Saturday, January 21, 2012

UCO VASANTH BONANZA - Fixed Deposit Scheme

UCO Bank Launched a A limited duration Fixed Deposit Scheme providing benefits of high returns on a fixed deposit period of 100 days. The Scheme would be available from 4th January, 2012 for a limited period and would carry an interest of 9% per annum with special incentive for Senior Citizen/Staff/Ex-Staff, as usual. The minimum amount of deposit under the Scheme would be Rs. 10,000/- and in multiples OF Rs. 1,000/-.

The Scheme offers high returns for ONE HUNDRED DAYS term deposit period with a minimum deposit amount of Rs. 10,000/- and in multiples of Rs. 1,000/- shall be accepted under the Scheme. The rate of interest rate offered is 9.00% p.a.
The salient features of the UCO VASANTH BONANZA Scheme are as under:



Name of Scheme

“UCO VASANTH BONANZA” Fixed Deposit Scheme
Duration of Scheme

4th January 2012  for a limited period only

Period of Deposit

100 days

Amount of Deposit

Minimum Amount Rs.10, 000/- and in multiples of Rs. 1,000/-.

Rate of Interest

9.00% per annum

Premature Withdrawal

Withdrawals may be allowed prematurely, but in such a case the depositor would not be eligible to receive interest at the special rate.

In case of premature withdrawal, the interest would be payable at 1% below the applicable rate under the normal fixed deposits for the period for which the deposit has remained with the Bank as on the date of deposit or present rate, whichever is lower.

against the Deposits




Participating Branches

All UCO Bank Branches


Automatic Renewals

No Permitted under this Scheme

Tax Implications

Tax would be deductible at source as per the prevailing Income Tax rules.

Special benefits for Senior Citizen/ Staff / Ex-Staff/Senior Citizen & Ex-Staff

Deposits from these categories of depositors shall be allowed incentive as per the existing norms. Accordingly, the applicable rates for these categories  of depositors would be as under:

a)     Senior Citizen        : Additional 0.50% or @ 9.50%

b)     Staff                       : Additional 1.00% or @ 10.00%

c)    Ex-Staff                  : Additional 1.00% or @ 10.00%

d)    Ex-Staff Sr. Citizen : Additional 1.25% or @ 10.25%

The overall amount ceiling for Ex-Staff/Ex-Staff Senior Citizen for being eligible for higher rate under the scheme shall be equal to the terminal benefits plus Rs.10 lacs, as usual.

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Bank of Maharashtra restructures around Rs 1,100-cr debt of Rajasthan SEB

MUMBAI: Bank of Maharashtra (BoM) has restructured around Rs 1,100 crore loan, that has been extended to Rajasthan State Electricity Board (RSEB), in the third quarter ended December 31, a top official said on Friday.

"The loan extended to Rajasthan State Electricity Board, which is around Rs 1,100 crore, has been restructured in the third quarter to give more time to the board for making repayment," said the official, who wished not to be named.

The public sector lender had got a good deal as part of the restructuring process, he said.

"We have received a State Government guarantee along with higher rate of interest as part of debt recast deal," he said, adding there will be a moratorium of around six months to one year for RSEB with regard to loan repayment.

As per banking sources, a total loan amount of around Rs 6,000 crore, which has been given to RSEB, has been restructured by various banks.

While there are around six to seven lenders that have exposure to the state board, Central Bank of India is the lead institution among the consortium of lenders.

Recently, around Rs 7,000 crore of loan of Uttar Haryana State Electricity Board was restructured by a UCO Bank-led consortium.

Also, the second largest public sector lender, Punjab National Bank, which had recast Rs 2,500 crore of loans in the second quarter, had said out of this amount as much as Rs 1,800 crore was from the Tamil Nadu SEB.

Referring to debt repayment scenario by SEBs, the BoM official said the situation is set to improve in the near future as tariffs are likely to be revised soon.

Source: EconomicTimes
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Bank of Maharashtra net jumps 50% in Q3

Bank of Maharashtra reported a 50 per cent increase in net profit to Rs 135.54 crore in the October-December 2011 period on the back of a healthy growth in net interest income and non-interest income.

The public sector bank had reported a net profit of Rs 90 crore in the corresponding period last year.

In the reporting period, net interest income increased by 24 per cent to Rs 645 crore (Rs 522 crore in the October-December 2010 period) and non-interest income was up by 21 per cent to Rs 150 crore (Rs 123.50 crore).

The Chairman and Managing Director, Mr A. S. Bhattacharya, said incremental growth in advances was flat. The advances as on December-end 2011 stood at Rs 50,751 crore (Rs 50,905 crore as at September-end 2011).

The bank is seeing good pick up in advances to the agriculture, micro, small and medium enterprises and corporates, observed Mr Bhattacharya.

“We have a Rs 10,000-crore loan sanctions pipeline,” he said.

Deposits nudged up from Rs 69,376 crore as at September-end 2011 to Rs 69,926 crore as at December-end 2011.

Higher provisioning

According to Mr M. G. Sanghvi, Executive Director, the bank has made higher provisioning of Rs 290 crore in the current quarter, against Rs 218 crore in the corresponding year-ago period to improve the provisioning-coverage ratio to 87 per cent to 87 per cent from 60 per cent.

The bank is expecting a capital infusion of Rs 860 crore from the Government during this quarter. This infusion will push up the Government's stake in the bank from 79 per cent to about 80 per cent, said the bank's chief.

Shares of BoM closed 1.77 per cent up at Rs 45.90 per share on the BSE, against the previous close of Rs 45.10.
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LIC crosses one-million mark in health insurance coverage

The Life Insurance Corporation of India has crossed the one-million mark in cumulative lives covered under its health insurance segment.

“One of the major drivers of this growth has been Jeevan Arogya, a benefit health insurance product launched last year,” Ms Renu Jain, Head, Health Insurance Business, LIC, told Business Line here on Friday.

The total number of policies was over 5.44 lakh. The cumulative lives covered were 10,04,525, while the premium was Rs 395 crore. Jeevan Arogya policy alone had brought the first premium of Rs 63 crore within seven months of its launch, Ms Jain said.

LIC had already sold 1.84 lakh policies of Jeevan Arogya so far, she added.


To give a fillip to sales, effort is on to market health insurance to its own employees and agents in addition to others.

“We are training two faculty members for each branch to explain the advantage of our health plans. A branch in Ludhiana recently became the first to have all employees buying our health plans,” she said.

The recent campaign to re-process claims which were rejected for want of documents earlier also yielded good results in improving the brand image and customer welfare, she added.

LIC is also hoping to take advantage of the increasing customer preference for benefit plans.

The market trends in health insurance were ‘wonderful' Ms Jain said, adding that the compounded annual growth rate was at 42 per cent during the last few years.
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Muthoot Precious Metals launches new gold scheme

Muthoot Precious Metals Corporation (MPMC), one of the group companies of the Kerala-based Muthoot Group, launched a new scheme called ‘Muthoot Kanaka Vrishty Cumulative Scheme' here on Friday.

Under this plan, an individual, singly or jointly with any other person, must make a minimum monthly payment of Rs 1,000 and in multiples of Rs 500. This is a fixed advance payment plan for a tenure of 16, 23 and 28 months.

The customer can get the gold coin/bars after 12 months at today's price through 12 equal monthly instalments. A processing fee of two per cent will be charged along with the first advance.

A minimum of 10 gm gold coin/bar has to be purchased to become a member of the plan.

The advantage of the scheme is that the customer is saved from future price fluctuations and, with the minimal instalments, the customer can make sure that he/she makes a decent saving for tomorrow.

The scheme was launched by Malayalam cine actress Kavya Madhavan at a function held here.

Web site launched

The Ernakulam District Collector, Mr Sheik Pareeth, inaugurated Muthoot's online gold purchase by launching the Web site,, for purchase of gold coins online.

The online purchase also ensures free home delivery anywhere in India within three working days.

MPMC imports gold bullion from Switzerland and converts them into gold coins of smaller denominations to suit the investment requirements of people in denominations of 0.5-50 gm size.

The company also markets silver coins in 20, 50 and 100 gm sizes.
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Syndicate Bank Q3 net profit rises 32%

Syndicate Bank's net profit grew 32 per cent during the third quarter of this fiscal on the back of higher net interest income and operating profits.

The bank's net profit for the period stood at Rs 1,004 crore (Rs 759 crore), while net interest income was Rs 1,325 crore (Rs 1,150 crore).

The bank's operating profit grew 30 per cent to Rs 2,556 crore (Rs 2,078 crore).

Other income increased by 17 per cent to Rs 776 crore (Rs 660 crore), mainly due to an increase in fee-based income, said a press release from the bank.

Gross NPAs (non-performing assets) declined to 2.29 per cent (2.32 per cent), and net NPAs to 0.86 per cent (0.95 per cent). The bank's provision-coverage ratio stood at 78.5 per cent.
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Karnataka Bank net up 87% in Q3

Karnataka Bank Ltd has recorded a growth of 86.71 per cent in net profit due to the increase in the spread and strong credit growth.

Net profit was at Rs 72.05 crore for the third quarter of 2011-12 against Rs 38.59 crore in the same period of the previous fiscal.

Speaking to Business Line after the board meeting here on Saturday, Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer, said that the increase in the spread and the strong credit growth have contributed to the growth.

The spread increased to 4.53 per cent (3.87 per cent). There was an increase of 21 per cent in advances during the period, he said.

The net profit for first nine months of the fiscal stood at Rs 162.91crore (Rs 113.78 crore).

The deposits of the bank stood at Rs 29,785 crore (Rs 25,424 crore) and advances at Rs 19,689 crore (Rs 16,282 crore).

On Friday, the Karnataka Bank scrip closed at Rs 79.30 on the BSE against the previous close of Rs 76.70.
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IFCI keen on raising stake in Stock Holding Corp

IFCI is looking to strengthen its holding in Stock Holding Corporation of India Ltd (SHCIL), the country's largest custodian of shares and other securities.

It is open to acquiring more stake in SHCIL if the other shareholders are willing to offload, Mr Atul Rai, Chief Executive Officer and Managing Director of IFCI, said here on Friday.

SGCIL is a great business. We are looking forward to increase our stake,” he said when asked if he would prefer IFCI having a controlling stake of 51 per cent in SHCIL.

IFCI had recently bought out ICICI Bank's entire stake — 17 per cent — in SHCIL for about Rs 300 crore. That took IFCI's current holding to about 34 per cent.

Speculation is rife that IFCI may look to gobble up the 17 per cent holding that SUUTI — the restructured arm of the erstwhile Unit Trust of India — has in SHCIL.

If that were to happen, then IFCI can raise its stake to 51 per cent, it was pointed out. Mr Rai however declined to comment on whether IFCI was eyeing SUUTI's stake in the custodian.

Meanwhile, IFCI has reported a net profit of Rs 114.05 crore on a total income of Rs 673 crore for the quarter ended December 31, 2011. The company had recorded a net profit of Rs 152.92 crore on a total income of Rs 635.84 crore in the same quarter in the previous year.

Mr Rai attributed the lower bottom-line performance to increased cost of funds. He also said that the company was not looking to raise any capital for the next two years.

It is looking to conserve capital given the difficult market conditions for raising fresh equity resources. The current complexities in the capital structure is also coming in the way of attracting investors.
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Axis Bank Q3 net up 24% on robust interest, fee incomes

Axis Bank's net profit increased by 24 per cent to Rs 1,102 crore for the quarter ended December 31, 2011, from Rs 891 crore in the corresponding year-ago quarter, on the back of robust growth in both interest and fee income.

The bank's performance in the just-ended quarter was satisfactory, although it was a challenging quarter, said Mr Somnath Sengupta, ED and CFO, Axis Bank.

Growth in fee income was broad based and from all segments such as retail, corporate and treasury. Advances growth too was across all segments, although retail advances grew at a faster pace than corporate, small and medium enterprises and agriculture.

Retail advances grew by over 32 per cent, large and mid-corporate by 19 per cent and SME by 21 per cent.

“We have been focusing on retail loans — home and auto loans — for some time now because it was a small segment for us. The share of retail loans to total advances has increased to 22 per cent from 20 per cent last year. Also, generally there was lower demand in corporate and infrastructure loans, though that was not why we focused on retail segment,” Mr Sengupta said.

While rise in cost of funds by 155 basis points led to a slight decline in Net Interest Margins, the 32 per cent growth in low-cost CASA (current and savings accounts) helped to protect margins to some extent.

Going ahead there could be some contraction in NIM as cost of funds may go up on account of migration from demand deposits to term deposits.

In the December-ended quarter, the bank added Rs 535 crore to gross non-performing assets (NPAs). Gross NPAs increased to Rs 1,915 crore (Rs 1,483 crore). Accordingly, provisions have increased to Rs 422 crore (Rs 314 crore).

“NPAs are a challenge for all banks. We don't expect gross NPAs to increase more,” Mr Sengupta said.

About the huge growth in deposits, Mr Sengupta said the bank focused on CASA and placed lot of emphasis on retail term deposits.

Credit growth

In the fourth quarter, credit growth is likely to pick up as banks try to meet their priority sector requirements, he added.

Within non-interest income, trading profits were lower at Rs 118 crore (Rs 135 crore), due to diminishing trading opportunity in the high interest rate environment, Mr Sengupta said.

Shares of Axis Bank closed at Rs 1,008, up 5.9 per cent, on the BSE on Friday.
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Friday, January 20, 2012

UCO Bank to auction a part of stressed assets

Kolkata based UCO Bank has decided auction its bad loans in a bid to lower its non performing assets. It has called for bids from investors for a stressed portfolio of Rs 327 crore comprising 45 loan accounts.

These 45 accounts includes assets like J B Diamond, Ind Synergy and Asian Electronics, officials from banking industry told ET on condition of anonymity. A number of asset reconstruction companies are likely to bid, they added.

The bad loan market usually becomes active in the second half of a fiscal year as bank tries to meet annual targets by selling stressed assets. However not many banks have tapped the bad loan market so far this year.

UCO Bank's gross non performing assets stood at 3.64% or Rs 3542 crore of total loans for September ending 2011 against 2.39% or Rs 2058 crore a year ago.

Interestingly, UCO Bank had put on block a small portion of their bad loan in November 2011 but it has yet not declared results.

Source: EconomicTimes
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RBI, banks in talks for recast of power sector loans, says SBI

NEW DELHI: Country's largest lender State Bank of India has said that banks are in talks with the Reserve Bank of India on possible restructuring of loans to the power sector projects that are facing problems in implementation.

"We are working with the RBI on how this can be done without the banks being required to make any provisioning," said SBI's Chairman Pratip Chaudhuri.

He, however, clarified that the State Bank of India, which has over Rs 32,000 crore exposure in the power sector, has not yet received any "special request" from the power sector for restructuring of loans. "They are saying that they would be in position to service their debts," said Chaudhuri after having pre-Budget consultation with Finance Minister Pranab Mukherjee. "We are giving loans to all big companies...It's not right for us to equate all the companies," he added.

Chaudhuri said that the risk in power sector is micro not macro and in some cases they (power companies) have said that the implementation of projects have got delayed due to reasons beyond their control.

A recent study by rating agency CRISIL has pointed out that banks' overall exposure of around Rs 56,000-crore to the power sector could be under stress because of losses of distribution companies, who have seen their losses getting doubled to Rs 40,000 crore in 2010-11 from 2008-09.

The finance ministry had asked state-run banks to give company-wise exposure to loans in four stress sectors-aviation, telecom, commercial, real estate and power utilities- which have raised worries that it could spike the bad loans and could derail their lending plans.

The gross non-performing assets, or NPAs, of commercial banks have risen over 25,000 crore in the first six months of the current fiscal. State-run banks wrote off nearly Rs 17,300 crore in 2010-11 against Rs 11,000 in the year before.

As per the latest figures, as on November 30, state-run banks have request for restructuring of 344 loan accounts with an outstanding of Rs 1.65 lakh crore.

Public sector banks had exposure worth over Rs 2.97 lakh crore to the power sector at the end of second quarter of the current fiscal, with maximum credit doled out by SBI.

Source: EconomicTimes
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SKS Micro posts Rs 428-cr loss

SKS Microfinance Ltd has posted a net loss of Rs 428 crore in the third quarter ended December 31, 2011.

The Hyderabad-based company had earned Rs 34 crore net profit in the corresponding quarter of previous financial year.

The loss was due to Rs 358.66 crore provisions and write-offs made during the period under review, largely on account of Andhra Pradesh Microfinance crisis.

“In the absence of virtual certainty of future taxable profits supported by convincing evidence, the net deferred tax asset amounting to Rs 353 crore as at December 31, 2011, has not been recognised,” SKS said in its un-audited financial results communicated to the Bombay Stock Exchange on Thursday.

The total revenue decreased to Rs 83.82 crore (Rs 384 crore).

The company's disbursals and collections were hit in Andhra Pradesh, its main market, since the enactment of Andhra Pradesh Microfinance (Regulation of Moneylending) Act, 2010.

During the quarter, SKS founder, Mr Vikram Akula stepped down as Executive Chairman and Director of the company.

Mr P. H. Ravi Kumar, Independent Director, took over as the Non-Executive Interim Chairman of the company in November 2011.

SKS scrip rose 0.70 per cent to end at Rs 93.55 on the Bombay Stock Exchange on Thursday.
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Move to reposition Nabard as ‘commercial entity' irks staff

The All-India Nabard Employees' Association (AINEA) has described as retrograde the move to reposition the apex-level bank as a ‘commercial entity'.

The association has twice moved the management against the move, Mr Jose T. Abraham, Vice-President, AINEA, told Business Line here.


The repositioning, as proposed by the Boston Consulting Group (BCG), is aimed at stripping Nabard of its ‘development finance' role, the association said.

Mr Tapas Sen, Member of Parliament, has written to the Finance Minister requesting his intervention in the matter.

The repositioning/restructuring design must be subjected to the review and scrutiny of appropriate forum, including Parliament, which gave birth to Nabard through an Act, he said.

BCG has reportedly suggested turning Nabard into a commercial entity with more focus on direct lending to big private corporate entities.

This would obfuscate its role as the only development finance institution dedicated to the services of landless, small and marginal farmers of the country.

Any dilution of its objective would be prejudicial to the cause of the rural masses, especially during these ‘uncertain times' for both agriculture and rural India.

Mr Sen also flagged the resource crunch at Nabard after the Reserve Bank stopped contributing to its national rural credit (long-term operations) and national rural credit (stabilisation) funds from 1993.


These funds are critical in sustaining long-term investment credit to agriculture, which has lacked adequate long-term institutional credit and investment, Mr Sen said.

No less crucial is the need to restore the general line of credit, which meets the short-term credit needs of the farmers.
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Thursday, January 19, 2012

Bank borrowings test RBI's CRR resolve

MUMBAI: Bank borrowings from the Reserve Bank of India has doubled in two weeks, testing the Reserve Bank of India's resolve not to signal a shift in monetary stance of fighting inflation by easing the cash reserve requirement.

The maturity of forward contracts where the central bank had sold US dollars to prevent the rupee slide last month, and higher demand for funds from companies that no more want to borrow overseas due to higher rates, could push up interest in the domestic market in the short term, traders say.

"The selling by RBI for intervention was partly extended by receiving the forward sales," said Ashish Vaidya, executive director, trading, UBS AG. "So, the impact of that on systemic liquidity will be felt on the day the forward sale matures."

Banks borrowed 1.56 lakh crore from the central bank, double of what it was two weeks ago, setting off speculation that the RBI may have to take some measures to ease the pressure, which may be even cutting the cash reserve ratio from 6%.

They also borrowed 200 crore by paying penal rate that is 1 percentage point more than the 8.5% repo rate in the so called marginal standing facility. The borrowing under this window is done when a bank pledges securities by breaching the minimum 24% limit of mandated government bond holdings.

The rupee has already appreciated by almost 6.2% this year, partly due to the impact of the RBI measures to curb speculative trading.

The call, or overnight rates, touched a high of 9.55%, reflecting the tight cash position in the market. Loans demand could also be leading to tight liquidity, some say. "There is a shift in credit demand from foreign currency to rupee-denominated loans, since it will now be more expensive to take the dollar route," said Moses Harding of IndusInd Bank.

Source: EconomicTimes
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Banks step up gold loan biz

It seems all that glitters ultimately turns out to be gold. India’s top banks are now vying for market share in the gold loan business, which has so far remained the forte of non-banking financial companies (NBFCs) and a few banks in the South.

At a time when credit demand has been dwindling because of high interest rates, banks have stepped up lending against the yellow metal. Financing against gold being a secured form of lending, and higher margins are the key reasons why banks are expanding this portfolio.

Loans against gold are considered priority sector advances. This has also made the business attractive for banks, especially those in the public sector. According to Reserve Bank of India data, 18 of the 26 public sector banks (including five associate banks of State Bank of India) have missed their agricultural lending targets for 2010-11.


Asset quality: These loans are given against gold, which, unlike other securities, does not depreciate fast. Compared to other advances, credit quality of these loans is one of the best

Margin: These loans carry a higher interest margin compared to other secured advances like mortgage and car loans

Priority sector: Many banks have been struggling to meet priority sector targets. Since these loans come under priority sector advances, these offer an opportunity to meet targets

Demand: Strong demand for gold loans, both in urban and rural centres. In rural branches, it is one of the most popular loan products

Cross sale: Banks expect gold loans to provide an opportunity to cross-sale other products and services to customers who have borrowed against the yellow metal

HDFC Bank, the second-largest private sector lender in the country, has doubled its gold loan portfolio in the last 12 months. The bank had entered this business only three years ago. However, within this short period, the bank claims to have acquired significant market share among new-age private sector banks. “We are well placed in terms of market share among new-age private banks. We have doubled our portfolio this financial year and expect the growth to accelerate, as more branches start offering this product,” a senior HDFC Bank executive told Business Standard on the condition of anonymity.

The bank currently offers gold loans through 70 per cent of its branches in the country. It also offers these loans both in rural and urban markets.

Another private sector lender, Axis Bank, which recent forayed into this business, plans to ramp it up. “So far, we have been watching the market, assessing the risks and evaluating the business model. Most of these have been sorted out. We will start ramping up our business now, and would be more active in the gold loan market from the next financial year,” said Jairam Sridharan, head of consumer lending and payments, Axis Bank.

Bankers said margins in the gold loan business were relatively higher than those in other secured loan products. According to industry players, while NBFCs offer these loans at 18-24 per cent, most banks offer gold loans at 11-15 per cent to attract borrowers. Banks lend only 60-80 per cent of the value of the gold.

Most banks said credit risks are significantly lower for gold loans, compared to unsecured personal loans. According to the lenders, these loans are one of the best-performing assets in the credit portfolios of banks. “These loans are given against securities that do not depreciate very fast. Also, the securities are relatively liquid. It is a good deal if you get 11-12 per cent interest by offering loans against these securities,” said a senior official of a Mumbai-based private bank.

Even banks that have traditionally been active in the gold loan business are looking to ramp up operations. Thrissur-based South Indian Bank, which has about 20 per cent of its advances in gold loans, had earlier planned to set up a separate subsidiary for this business, a proposal which did not find favour with the banking regulator. The move was aimed to strengthen its gold loan business and offer this product through its NBFC arm in areas where it did not have a bank branch.

“In many of our rural branches, we found customers were coming to the bank only to borrow loans against gold jewellery. In some of our branches, the only business is to lend against gold. We are looking to expand this business in the coming quarters,” said the chief executive of a mid-sized private sector bank.

Source: Business Standard
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