RBI gives nod to ICICI bank to set up Infrastructure Debt Fund

ICICI Bank has received approval from the Reserve Bank of India (RBI) to set up an Infrastructure Debt Fund (IDF) - the first debt fund to get the government's go ahead.

Officials from the bank were not available for comments. Industry sources said that ICICI Bank will enter into an equity tie-up with an non-banking finance company ( NBFC) for the fund.

The new company will raise long-term money from investors to lend to infrastructure projects. Among others, IIFCL had announced plans to raise infrastructure debt as well as infrastructure equity funds.

In September, RBI allowed banks and mutual funds to set up IDF. In the 2010-11 budget, the finance minister had cleared the way for setting up of IDFs to increase find flow into infrastructure sector.

Source: EconomicTimes

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Citi exits HDFC with $722-million gain after tax

Citigroup Inc, the third largest lender by assets in the US, on Friday sold its entire 9.85 per cent stake in the country’s biggest housing finance company, Housing Development Finance Corporation (HDFC), for Rs 9,550 crore ($1.9 billion). The exit was meant to help the US bank shore up its balance sheet to meet the tighter Basel III requirements.

According to a release, Citi made a pre-tax gain of $1.1 billion (Rs 5,490 crore) and an after-tax gain of approximately $722 million (Rs 3,550 crore).

“The after-tax gain reflects Citi's tax liability to the US government,” said a Citi spokesperson.

The New York-based Citi sold a total of 145.3 million shares of HDFC at Rs 657.56 apiece through multiple block deals. “The sale of Citi’s remaining stake in HDFC is part of Citi’s ongoing capital planning efforts,” the bank said in a statement.

HDFC shares closed 3.62 per cent lower at Rs 675.9 on the National Stock Exchange (NSE) on Friday. The stock fell to as low as Rs 657.5 intra-day.

The transaction was at a six per cent discount to HDFC's closing price on Thursday, when Citi announced its exit plan. It had invited bids in the range of Rs 630-703.5 a share and received twice the demand than the shares of offer, according to brokers. Until yesterday, the HDFC stock had gained 7.6 per cent this year, underperforming the benchmark Sensex (which has added 17 per cent).

Citi, which was the largest foreign investor in HDFC, had first invested in 2005 but a significant portion was acquired when it bought Standard Life’s 9.3 per cent stake in HDFC for $673 million in 2006.

“We are pleased with the results of our investment in HDFC,” Citi India CEO Pramit Jhaveri said in a release. In June 2011, Citi had pared its stake in HDFC from 11.4 per cent to 9.85 per cent.

Besides Citi, private equity firm Carlyle had sold about 20 million shares in HDFC on February 1, raising about Rs 1,350 crore and nearly doubling the money from its 2007 investment in the lender.

In the past few weeks, global financial institutions, including Singapore’s sovereign fund Temasek Holdings, have sold stakes in Indian financial firms. Warburg Pincus had sold about 17.5 million shares in Kotak Mahindra Bank this month through open market deals to raise about $170 million.

Source: Business Standard

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HDFC RED to list new homes in Kochi

HDFC RED (Real Estate Destination), an online platform hub for the residential realty buyers, has announced its foray into listings for new homes in Kochi. The Kochi section on www.hdfcred.com lists approximately 320 property types across 100 unique projects and 30 developers.

HDFC RED is a specialised platform focussing only on the primary or developer properties in India. It is a platform for home buyers to do their initial research on properties available for sale, which is a huge task and saves a lot of time for a home buyer.

It allows home buyers to be better prepared and make informed decisions. Mr C.V.Ignatius, Additional Sr. General Manager and Regional Manager, Kerala, said HDFC RED aims to assist aspiring home buyers in identifying properties from the comfort of their homes.

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SBI to launch ‘Home Search Centre' in Kozhikode

The State Bank of India (SBI) is launching a ‘Home Search Centre' at its Specialised Personal Banking Branch here to help prospective buyers of housing properties in and around the city.

One-stop centre

This is the first such facility of the bank coming up in Kerala.

It is a one-stop centre that will bring together customers, prominent builders and the bank on a common platform.

The centre will provide information on builders who have housing projects within the city and the surrounding areas.

The online search for suitable property can be finalised with a click of the mouse.

The visitors to the centre will be exposed to a wide map of Kozhikode, on which the projects coming up at different places will be indicated by a pin-head.

The customer can move the pin-head to the property selected and enter into further steps for possessing it.

The visitors will be assisted by a team of staff in matters like working out the limit of their loan eligibility based on income and completing the subsequent formalities for speedy disposal of loan applications.

The public can visit the centre which will be inaugurated on February 24 free of cost.

It will be open on Sundays also.

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Canara Bank recruiting 2,000 POs

Canara Bank is recruiting probationary officers (in the junior management grade/Scale I) to fill up about 2,000 vacancies across the country. The bank had specified that candidates with 60 per cent marks in graduation and a total weighted standard score of 156 in the common written examination conducted by Institute of Banking Personnel Selection (IBPS) and fulfil other criteria were eligible to apply. The selection process will be done on the basis of the IBPS score, a group discussion and an interview. Fifty per cent weightage will be given for the IBPS score, 20 per cent for the group discussion and 30 per cent for the interview. —

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Credit cards: Sharp fall in delinquency level

With credit card users getting more mature, responsible and less impulsive on the one hand, and bankers too exercising enough caution while granting credit cards, delinquency levels have come down by over 50 per cent, said Mr Kadambi Narahari, CEO, SBI Cards.

According to him, delinquency levels used to be in the 8-9 per cent range during 2006-2008, this has now come down to 4 per cent. In fact, during the period of crisis (2008-09), it used to hover around 11-12 per cent, he said. For State Bank of India, “it's lower than the industry level.”

And, this is despite the credit card market growing at 12-15 per cent year-on-year.

However, he said, even the current delinquency level is marginally above the global average (of 2.5-3 per cent).

He attributes this healthy trend to “more disciplined and evolving” Indian consumers. The consumer knows what he wants and when to buy it. Almost 40-45 per cent of the credit-card users do not exercise the revolving option, he said, adding in a lighter vein, “though we would prefer them to”.

There are over 20 million credit cards issued so far, while the number of potential consumers out there is over 400 million, he added.

rravikumar@thehindu.co.in

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3-day SBI, CREDAI realty expo

State Bank of India, in association with real estate body CREDAI, inaugurated a three-day CREDAI SBI Realty Expo in Bangalore. The expo will bring under one roof 38 city-based developers showcasing about 25,000 properties.

Mr Ashwini Mehra, Chief General Manager, SBI – Bangalore Circle, which will offer on-the-spot in-principle approval for prospective buyers, also announced a 25-basispoint reduction in the home loan interest rate. Besides, there will be a 50 per cent concession on processing charges.

Mr Mehra said that Bangalore has a centralised loan processing centre for home loans, which will ensure faster sanction of loans. “Since it is online, we can monitor at each level and ensure that the turnaround time is the best,” he said. For approved projects, the turnaround time was an average seven days. The bank also plans to have two more loan processing centres in Bangalore by end-April — Hebbal and Koramangala, which will ensure faster processing of loan applications.

The bank is also looking at catering to high-value projects in a big way, and would have five branches in the city. “We are also trying to ensure that we maximise the number of projects that we approve,” said Mr Mehra.

anju@thehindu.co.in

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Nabard employees to join general strike on Feb 28

Employees of the National Bank for Agriculture and Rural Development (Nabard) have decided to join the general strike on February 28.

The central committee of the All-India Nabard Employees Association (AINBEA) that met in Mumbai opposed the bid to reposition Nabard ‘against farmer interests.'

This repositioning is sought to be done as per the recommendations of the Boston Consultancy Group, says Mr Jose T. Abraham, Vice-President, AINBEA.

The repositioning will force Nabard to take up direct lending, which will jack up interest rates of loans provided to farmers.

Recruitment process

AINBEA is also strongly opposed to the decision to scrap the recruitment process initiated for Group “B” staff, for which a recruitment test was conducted.

Candidates belonging to SC/ST/OBC categories were even given coaching for the same.

The union has also taken exception to centralise operations at the Mumbai head-office and outsourcing/contracting of regular jobs.

vinson@thehindu.co.in

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Confident of crossing Rs 9,000-cr lending to small units, says Vijaya Bank CMD

The public sector Vijaya Bank is confident of crossing Rs 9,000 crore in financing the MSME (micro, small and medium enterprises) sector during the current financial year.

In an informal chat with presspersons on the sidelines of an SME meet here on Friday — Mr H. S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, said that the bank financed the MSME sector to the extent of Rs 7,481 crore till end-December. It has set a target of Rs 9,106 crore in MSME financing in the current fiscal. Mr Kamath hoped that with 35 specialised SME branches the bank can achieve this target by March-end.

Added to this, the bank has come out with MSME credit-processing centres in Bangalore, Chennai, Hyderabad, Mumbai, Delhi, Ahmedabad and Pune. These are separate business entities with separate a administrative set-up. These MSME credit processing centres will help both the bank and the entrepreneurs in speedy disposal of the proposals, he said.

vinayakaj@thehindu.co.in

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Karur Vysya Bank launches co-branded card with SBI

Karur Vysya Bank on Friday launched a co-branded credit card with SBI Cards. Announcing this at a press conference, Mr K. Venkataraman, Managing Director and CEO of Karur Vysya Bank, said the alignment with SBI Cards is to avoid capital expenditure such as overheads on setting up a separate division and investing in people.

“Whereas, joining hands with SBI Cards will give us a ready and immediate access to the portfolio.”

Two variants

The KVB-SBI co-branded cards will be available in two variants — Gold and Platinum — and will have both magnetic strip and ‘a chip' which is said to provide a high level of security to cardholders. These cards will initially be issued for the bank's existing customers.

Besides common credit card services, the bank offers cash points for every Rs 100 spent on cards (which can later be converted into cash), Rs 3,000 worth apparel voucher on joining, complimentary access to airport lounges and fuel surcharge waiver across all petrol pumps.

Speaking on the issuing procedure, he said though the issuer will be SBI Cards, it will be upon KVB's recommendation. The bank, according to him, has over four million customers, and “more than 50 per cent of them will certainly meet the required profile”.

On the bank's performance, Mr Venkataraman said the total business was over Rs 52,000 crore with deposits in excess of Rs 30,000 crore and advances Rs 22,000 crore as on September 30, 2011.

The net profit of the bank up to Q3 of the current fiscal was at Rs 353 crore. The bank's NPA ratio is “one of the lowest in the country” at 0.29 per cent with the coverage ratio at 80.03 per cent.

rravikumar@thehindu.co.in

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Sydicate Bank appointed lead bank for Panchsheel Nagar in UP

The Reserve Bank has appointed public sector lender Syndicate Bank as lead bank for newly created district of Panchsheel Nagar in Uttar Pradesh.

"It has been decided to assign the lead bank responsibility of the new district Panchsheel Nagar to Syndicate Bank," the Reserve Bank (RBI) said in a statement.

Lead bank is the lender which is entrusted by RBI to act as the coordinator for a particular region, including state or district.

The district was created by the Uttar Pradesh government in September 2011.

The new district with its headquarter at Hapur was carved out from the existing Ghaziabad district and comprises three tehsils -- Hapur, Garh Mukteshwar and Dhaulana.

"There is no change in the lead bank responsibilities of other districts in the state," RBI added.

Source: EconomicTimes

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UCO Bank, Vijaya Bank to sell stake to LIC

Two state-owned lenders UCO Bank and Vijaya Bank today said they propose to raise capital of about Rs 412 crore by issuing fresh equities to LIC.

The board has approved the proposal for issue of 3.13 crore shares to Life Insurance Corporation of India (LIC) on preferential basis, UCO Bank said in a filing to the BSE.

At the prevailing market price, the bank would raise about Rs 265 crore by selling stake to the insurer.

Shares of UCO Bank closed at Rs 84.80 a piece, up 0.47 per cent on the BSE.

Meanwhile, Vijaya Bank said it proposes to allot shares worth Rs 147 crore to LIC on preferential basis.

Shares of Vijaya Bank, however, closed at Rs 61.55 a piece, down 1.76 per cent on the BSE.

The fund raising would be subject to the approval of the shareholders and regulatory authorities, they said.

Last fiscal, the bank got capital support of Rs 1,010 crore from the government.

In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.

Source: EconomicTimes

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Projects of DHFL's pvt equity fund to get CARE ratings

ArthVeda Fund Management, the PE arm of Dewan Housing Finance Limited (DHFL), has tied up with Credit Analysis & Research Ltd (CARE) to rate major investments by ArthVeda’s new real estate fund ArthVeda Star, the Rs 200-crore real estate fund with a greenshoe option of Rs 100 crore.

Bikram Sen, chief executive of Arthveda Fund Management, said, “Once we invest money in projects, neutral agencies like CARE will analyse these and give star ratings, based on the performance. The rating would help the fund rectify faults and give an additional level of comfort and safety to investors.”

ArthVeda Star Fund, which focuses on Tier-II and Tier-III middle income housing projects, has 34 investments in the pipeline.

Rajesh Mokashi, deputy managing director, CARE, said, “If the reports are provided, it would enable investors to directly access the development of the projects concerned, thus increasing transparency in the fund. Investors would have the benefits of direct knowledge and a trustworthy third-party assessment, rather than being totally dependent on the fund perspective.”

However, other fund managers are not optimistic about the rating systems. V Hari Krishna, director, Kotak Realty Fund, said, “Rating is not a relevant concept for typical private equity (PE) deals, as many are equity deals and hence, ratings are very subjective. Even for debt investments, the valuation reflects the repayment capacity.”

The real estate sector recorded subdued PE activity in 2010. However, 2011 saw a rush of new real estate-focused PE funds.

Source: Business Standard

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Anuranjita Kumar appointed Citi India HR head

Citi India has elevated Ms Anuranjita Kumar as country Human Resources Officer.

Ms Kumar replaces Mr Stephen Cronin, who has been elevated as Global HR leader.

“With over 17 years of experience at Citigroup, Kumar has a proven track record as a highly effective human resources leader. She brings a wealth of people management experience to the role. I am confident that she will prove to be an asset to our India operations,” Citi India Chief Executive, Mr Pramit Jhaveri, said.

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Mobile payment services gaining currency

Mobile payment services are slowly but surely gaining currency in the Indian market, going by the spate of announcements in the last few days by global payment companies, banks, telecom vendors and mobile financial solution providers. All of them are keen to grab a slice of the Indian mobile payments market, which is seen as the next bastion of growth.

Following the first phase of launch in Delhi NCR and Chennai in 2011, telecom operator Airtel on Thursday announced that its mobile wallet service — airtel money — will now be available in 300-plus key cities. Besides payment of utility bills and recharges, airtel money can be used to make purchases at over 7,000 merchant establishments across the country.

This comes a day after global payments company MasterCard announced the launch of its open-loop Worldwide Mobile Money Partnership programme, in partnership with Comviva, a mobile financial solution provider. The partnership aims to help financially under-served consumers globally access mainstream financial services as also make purchases, transfer funds and pay bills via their mobile phones, according to Mr Manoranjan Mohapatra, CEO, Comviva.

This partnership opens up opportunities for mobile operators and financial institutions in expanding their financial services offerings.

Mr Philip Yen, Group Head of Emerging Payments, Asia Pacific, Middle East and Africa region, MasterCard, said that efforts would be taken to tie-up with Indian telcos and banks under the programme. HDFC Bank and Movida had also launched a mobile payment service that allows customers to make payments through their mobile phones.

The trigger for these launches is the fact that there are more mobile phones in use in India than the number of bank accounts. Mr Sanjay Kapoor, CEO-India and South Asia, Bharti Airtel, said that national rollout of airtel money would accelerate mobile based commerce in India. While an estimated 240 million people across India hold bank accounts, more than 90 per cent of country's population uses cash to pay for its daily needs.

krsrivats@thehindu.co.in

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SBI plans to raise Rs 7,900 cr through preferential issue to Centre

State Bank of India is looking to raise around Rs 7,900 crore through preferential issue of shares to the Government of India, the bank said in an announcement on the BSE.

The bank has fixed the issue price at Rs 2,191.69 per share, for the preferential issue. This includes a face value of Rs 10 per share and a premium of Rs 2181.69 per share.

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Canara Bank bullish on lending to SHGs: CMD

Canara Bank is bullish on lending to women self-help groups and in contributing to the cause of women's empowerment and this is also a good business as the recovery rate is excellent, according to Mr S. Raman, the Chairman and Managing Director.

He told reporters here on Thursday that the bank has lent more than Rs 1,000 crore to SHGs of women in the country and that “Andhra Pradesh in particular is in the forefront. It is a sort of silent revolution and it is not confined to one part of the country.”

Later, Mr Raman participated in a convention of SHGs of women. Credit linkage was given to 1,600 self-help groups at the convention; the credit disbursed was Rs 30 crore. He said Canara Bank has formed 37,236 groups and financed them.

Mr Raman said the recovery rate was excellent in the range of 95-100 per cent. He dismissed the criticism that SHGs were only using the credit given to pay off the money they had taken from private money-lenders, and that it was not being used for any income-generating activity. “It may be true to some extent. Even if it were true, there is no need to discount the importance of the programme. After all, the women are making good use of cheap bank credit to pay off costly private loans. But in fact many SHGs are putting it to productive use,” he explained.

Total credit given

He said 16 per cent of the total credit given by the bank had been sanctioned to women and the percentage would go up in future.

Mr Raman said the bank was making a concerted effort to bring down the NPAs which are at 1.41 per cent (net), and in the current financial year Rs 2,400 crore was recovered. The total amount recovered would go up to Rs 3,000 crore by the end of the fiscal, he added.

In response to a question, he said the bank has not lent to Kingfisher Airlines and “in general we keep clear of such things. We have no exposure.”

He said the bank had 249 branches in AP and one more would be added soon. The bank intendes to add fifty more in the next few years.

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Centre nominates D. K. Mittal on RBI's central board

In a move that indicates that the Central Government may have more say in the functioning of the Reserve Bank of India, the former has nominated one more director on the central board of directors of the banking regulator.

Mr D. K. Mittal, Secretary, Department of Financial Services, Ministry of Finance, is the second government nominee on the RBI board.

This is the first time that the Government is having two nominees on the RBI's central board. Hitherto, the Secretary (Department of Economic Affairs), Ministry of Finance, was the only government nominee director on the RBI board.

Besides Mr Mittal, the other government nominee on the RBI board is Mr R. Gopalan, Secretary (Department of Economic Affairs), Ministry of Finance. Following this nomination, the RBI's central board now has 18 directors.

Mr Mittal's nomination follows the recent amendment to the RBI Act, 1934, allowing the Central Government to nominate two Government officials to the central board instead of one.

Central bank autonomy

The RBI Governor has been underscoring the importance of central bank autonomy at various public forums.

In a recent speech, the Governor emphasised that the fundamental responsibility of central banks for price stability should not be compromised. He pointed out that central banks should have a lead, but not exclusive, responsibility, for financial stability. “The boundaries of central bank responsibility for sovereign debt sustainability should be clearly defined. In the matter of ensuring financial stability, the government must normally leave the responsibility to the regulators, assuming an activist role only in times of crisis,” said Dr Subbarao at the RBI's second international research conference.

Fiscal consolidation

The government nomination of one more director comes even as the RBI, in its third quarter review of the monetary policy (on January 24), has warned that the fiscal deficit of the Government could potentially crowd out credit to the private sector.

Moreover, slippage in the fiscal deficit has been adding to inflationary pressures and it continues to be a risk for inflation.

“Considering the egregious implications of large fiscal deficits, which are well-known, there is an urgent need for decisive fiscal consolidation, which will shift the balance of aggregate demand from public to private, and from consumption to capital formation.

“This (consolidation) is critical to yielding the space required for lowering rates without the imminent risk of resurgent inflation.

“The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way,” the Governor explained.

kram@thehindu.co.in

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Citigroup set to exit HDFC

Citigroup is looking to sell its entire stake in housing finance major HDFC Ltd through a block deal on Friday. The bank currently holds 9.85 per cent in HDFC.

According to agency reports, Citi is looking to raise between $1.86 and $2.07 billion from the sale. It is offering shares at between Rs 630 and Rs 703.55. On Thursday, HDFC shares closed at Rs 700.35, down 0.18 per cent. Mr Deepak Parekh, Chairman, HDFC Ltd, said the stake sale is in preparation for Basel III norms. Under Basel III it is very expensive for banks to hold equity of other companies as they have to make higher provision for equity. Citi had bought HDFC stake in 2005, he added.

Citi's sale comes after private equity firm Carlyle sold a part of its stake in HDFC. Carlyle had 5.22 per cent stake in HDFC, which it pared to less than 4 per cent.

priyan@thehindu.co.in

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Allahabad Bank to recruit 1,600 probationary officers

Allahabad Bank is recruiting 1,600 probationary officers for vacancies across the country.

The bank has specified that candidates with graduation and a total weighted standard score of 125 in the common written examination conducted by the Institute of Banking Personnel Selection (IBPS) are eligible to apply. The bank has said that it will conduct a group discussion which will be in the nature of a qualifying exam for the interview.

The interview will be for 35 marks and the minimum required for qualifying the interview is 40 per cent or 14 marks. The minimum age requirement is 20 years while the maximum is 30 years.

Applications have been invited online and are open from February 18. The last date for registration of online applications is March 10.

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RBI to issue Rs 1,000 notes with inset letter ‘R’

The Reserve Bank of India will shortly issue banknotes of Rs 10 denomination with inset letter ‘R’ in the Mahatma Gandhi Series.

“The RBI will shortly issue Rs 1,000 denomination banknotes with inset letter ‘R’ in the Mahatma Gandhi series bearing the signature of D. Subbarao, Governor, RBI, and the year of printing on the reverse of the banknote,” the central bank said in a statement.

The design of these notes to be issued now would be similar in all respects to the banknotes in the Mahatma Gandhi Series 2005 issued earlier.

All the banknotes of Rs 1,000 denomination issued by RBI earlier will continue to be legal tender, it added.

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Bank of Baroda inks pact with CARE

Public sector lender Bank of Baroda has signed a memorandum of understanding with rating agency Credit Analysis and Research Ltd (CARE) for the rating of micro, small and medium enterprises (MSMEs) which are either prospective or existing customers of the bank.

“We believe that this MoU is an endorsement of our pursuit to retain and further gain the confidence of the financial services and MSME fraternity. We are committed to support all of Bank of Baroda’s efforts in the MSME sector and assist them through their journey of exponential growth,” CARE MSME head, Mr R. Suryanarayan, said in a statement today.

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IOB to raise Rs 2,000 cr via pref allotment

Indian Overseas Bank will raise close to Rs 1,980 crore by making preferential allotment to Government of India and Life Insurance Corporation of India.

IOB’s Committee of Directors for preferential issue of shares, on February 21, fixed Rs 97.82 (including premium of Rs 87.82) as the price for the allotment of equity shares on preferential basis to the GoI and LIC.

While GoI will be allotted up to 17,12,32,876 shares for its capital contribution of up to Rs 1,675 crore, LIC would be allotted up to 3,09,37,467 shares (5 per cent of pre-issue capital) for its capital contribution of up to Rs 302.63 crore.

IOB has said that the number of shares to be allotted to both Government of India and LIC and its various schemes will vary according to the capital contribution from GoI and LIC and its various schemes respectively within the amounts mentioned above.

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HDFC Bank not to cut its ATM rollout plans

HDFC Bank does not intend to cut on its automated teller machines (ATM) rollout plan in spite of the Reserve Bank giving an in-principle nod for white label ATMs, which will be operated by non-banking companies, a top official said today.

The bank will not cut its ATM rollout target as a result of the RBI’s draft guidelines allowing non-banking entities to set up ATMs, also called as white-label ATMs, said Mr Rahul Bhagat, HDFC Bank Head (Direct Banking Channels).

Asked about the cost of setting up an ATM, Bhagat said up to 50 per cent of transactions in its existing ATMs are done by non-HDFC Bank account holders, resulting in good fee income, which will take care of the installation cost.

Moreover, he pointed out that when a bank sets up an ATM, it is also about giving the customer a feel of the service that each bank wants to give out on its own.

Meanwhile, HDFC Bank today tied-up with Visa and Monitise—promoted Movida to facilitate mobile—based transactions for its debit and credit card—holders.

Under the service, mobile phone users using any handset and even without Internet connectivity will be able to pay for services like electricity bills and mobile recharges.

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Indian Bank, United Bank on recruitment drive

Indian Bank is recruiting management trainees in the junior management grade scale I/probationary officers to fill up about 452 vacancies across the country.

The bank has specified that candidates with a graduate degree in any discipline and a total weighted standard score of 141 in the common written examination conducted by the Institute of Banking Personnel Selection (IBPS) are eligible to apply. The selection will be based on both the marks secured in the IBPS exam as well as interview/group discussion.

The minimum age requirement is 21 years while the maximum is 30 years. Applications have been invited online and are open from February 17. The last date for registration of online applications is March 3, 2012.

United Bank of India is recruiting 450 probationary officers. The bank has prescribed a graduate degree with 55 per cent marks and a total weighted standard score of 138 in the IBPS exam as eligibility criteria to apply.

The bank says that only those candidates with a sufficiently high score will be called for group discussion/ interview. The total marks for group discussion and interview will be 100 and the pass mark for this will be 40. The minimum and maximum age requirement is 21 years and 30 years, respectively.

Applications are invited from February 24 till March 9.

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Citi faces multi billion-dollar write-down risk: Report

Financial services major Citigroup Inc may face a multi billion-dollar write-down as it begins to unwind its minority investment in the Morgan Stanley Smith Barney brokerage, says a media report.

“Citigroup Inc is facing a potential multi billion-dollar write-down as it begins unwinding its minority investment in the Morgan Stanley Smith Barney brokerage,” the Wall Street Journal reported.

Morgan Stanley has the right this spring to start buying Citigroup out of the joint venture, which was formed in 2009 and is expected to take full ownership in 2014, it added.

Morgan Stanley Smith Barney currently is valued at $20 billion on Citigroup’s books, which is $5 billion more than it is on Morgan Stanley’s, the report said citing Credit Suisse’s analyst Mr Howard Chen.

The difference in the valuation is mainly on account of different accounting standards. The value of Citigroup’s equity stake in the business is roughly $10 billion.

Citigroup may need to take a $2.5-billion write-down on a sale, which could translate into a $1.8-billion after-tax hit, the publication said citing Mr Chen.

“A sale that valued Citigroup’s stake at $7.5 billion, broadly in line with Morgan Stanley’s assessment according to a report from Mr Chen, could result in a $2.5-billion write-down that would translate into an after-tax earnings hit of $1.8 billion,” it said.

According to the report, Citigroup declined to comment on the issue.

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RBI panel for raising priority sector lending target for foreign banks to 40%

Given the inability of many banks to achieve the direct lending target in the agriculture segment, a Reserve Bank of India committee has recommended doing away with the ‘direct and indirect' lending distinction. Instead, it has suggested a composite target for agriculture and allied activities.

However, the committee, headed by Mr M.V. Nair, Chairman and Managing Director, Union Bank of India, kept the priority sector lending target at 40 per cent of adjusted net bank credit (ANBC) unchanged.

The committee has suggested revising the priority sector lending target for foreign banks to 40 per cent from 32 per cent at present. This will bring them on a par with all domestic banks. In revising the target for foreign banks, the principle of reciprocity under the World Trade Organisation regime has been adopted, Mr Nair said.

The RBI released the committee's report on Wednesday and has sought stakeholders' feedback by March 31.

According to the report, the target for lending to agriculture and allied activities will be 18 per cent of ANBC. Currently, this target is broken up into 13.5 per cent direct lending and 4.5 per cent indirect lending.

Agriculture and allied activities will cover the entire value chain from farm gate to food plate.

The distinction between direct and indirect lending was creating confusion with regard to classification and reporting, said Mr Nair. The aim is to ensure that formal credit reaches more sections of society, he said.

“…concepts of ‘Direct' and ‘Indirect' lending to agriculture may be integrated in order to have an all encompassing approach towards agriculture sector,'' the report said.

Within agriculture and allied activities, the committee has recommended a sub target of 9 per cent of ANBC for marginal and small farmers, to be achieved by 2015-16.

Within the micro and small enterprises (MSE) sector, a sub-target of 7 per cent of ANBC for micro enterprises is to be achieved by 2013-14.

Housing, education loans

The quantum of education loans to be counted as priority sector has been increased to Rs 15 lakh for studies in India, from Rs 10 lakh and to Rs 25 lakh for studies abroad, from Rs 20 lakh.

Currently, housing loans up to Rs 25 lakh, per property per family, are included under priority sector.

This has now been revised to consider one property per individual, instead of per family.

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UCO Bank to issue 3.13 cr equity shares to LIC on preferential basis

Kolkata-based UCO Bank on Tuesday proposed an issue of 3.13 crore equity shares to Life Insurance Corporation of India on preferential basis. The decision was taken by the board of directors at a meeting in Kolkata this afternoon.

“The issue of 3.13-crore equity shares to LIC on preferential basis will be done at a price as determined in accordance with Securities Exchange Board of India (ICDR) Regulations 2009. It will be subject to approval of the Union Government, Reserve Bank of India and the bank's shareholders,” the bank said in a notification to the BSE on Tuesday.

LIC holds 8.44 per cent of the total number of shares of UCO Bank. It held a total of 5.3 crore shares in the bank as on December 31, 2011, as per data available on the shareholding pattern of the bank from the BSE.

Meanwhile, Allahabad Bank also plans to consider issue of equity shares on preferential basis to LIC at its board meeting on Wednesday.

Life Insurance Corporation holds 8.65 per cent of the total number of stocks of Allahabad Bank as on December 31, 2011.

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Panel move will help meet priority sector lending target: United Bank ED

The recommendation to classify bank loans to non-banking financial companies (NBFCs) for on-lending to specified segments as priority-sector lending will help banks achieve their priority-sector targets, said Mr S.L. Bansal, Executive Director, United Bank of India, and Chairman and Managing Director-designate, Oriental Bank of Commerce.

“Till March 2011, bank lending to NBFCs was allowed to be classified as priority sector lending and there was no cap on such lending. However, in April 2011, Reserve Bank of India disallowed banks to take that route (of lending to NBFCs and classifying those as priority sector) in order to encourage direct lending. However, the present recommendation of the committee will help banks meet their priority sector lending targets,” Mr Bansal said.

The raise in the limit under priority sector for advances towards education and home loans will also help fuel growth in these sectors. “Education and housing are two priority areas for the country and raising the limits under these two sectors is a welcome suggestion,” he added.

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Fitch downgrades Dhanlaxmi Bank

Rating agency Fitch on Tuesday said it has downgraded the ratings of Dhanlaxmi Bank due to the risks to the operating performance of the Kerala-based private lender and the vulnerability of its capital ratios.

"Fitch Ratings has downgraded Dhanlaxmi Bank and its Rs 17-crore subordinated debt to long-term 'BBB-(ind)' from 'BBB(ind)' and simultaneously put them on Rating Watch Negative (RWN)," the agency said in a release here.

The downgrade comes at a time when the private lender posted a net loss of Rs 36.87 for the third quarter ended December 31.

The rating agency believes there could be potential further losses emerging from the structural weaknesses of an elevated cost base and revenue pressures due to rapid expansion. "Such losses could adversely impact the bank's capitalisation and financial flexibility."

Fitch said the bank has a challenging task of addressing some structural issues.

It noted that the bank's net interest margin is pressurised on the back of large reliance on high-cost wholesale deposits, while non-interest income has also been on a downward trajectory.

"The bank may have to shrink its loan book to conserve capital, which could further compress revenues," the agency said, adding that the asset quality has been stable so far.

"The agency, therefore, remains cautious in view of the moderating economic growth, a still relatively high interest rate environment and low seasoning of a large part of its (the bank) loan portfolio," the release added.

Source: EconomicTimes

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RBI wants banks to hold more liquid assets

The Reserve Bank of India said on Tuesday that banks need to maintain additional liquid assets as part of Basel III guidelines, over and above previously mandated levels.

Banks will need to adhere to these norms from the month or quarter ending June 2012, the RBI said in its draft guidelines on "Liquidity Risk Management and Basel III Framework on Liquidity Standards."

Indian banks currently need to meet RBI-set requirements of cash reserve ratio (CRR), and statutory liquidity ratio (SLR).

The CRR, or the share of deposits that banks must set aside in cash with the RBI, is 5.5 percent, and SLR, or the minimum amount of investments that banks need to make mostly in government securities, is 24 percent.

As part of the guidelines, banks are expected to maintain "high-quality" liquid assets, which includes cash and government bonds, which can be converted into cash to meet liquidity needs for a 30-day period under a stress situation.

To qualify as high-quality, the cash reserves and government bond holdings need to be in excess of the mandated levels of CRR as well as SLR, the RBI said.

"Banks are expected to meet this requirement continuously and hold a stock of unencumbered, high-quality liquid assets as a defence against the potential onset of severe liquidity stress," the RBI said.

These holdings will constitute the liquidity coverage ratio, which can help banks tide over potential short-term liquidity disruptions.

The RBI Governor Duvvuri Subbarao has earlier mentioned that existing liquidity ratios, like CRR and SLR, have been a cushion for banks following the Lehman Brothers' collapse in September 2008, and have held in good stead for the banking system as a whole.

Source: EconomicTimes

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Mobile banking seeks boost

With Interbank Mobile Payment Service (IMPS) in place, banks are now leveraging their existing corporate clientele to replace day-to-day cash dealings at the ground level with mobile transactions.

So far, 34 banks have registered with National Payments Corporation of India (NPCI) to enable mobile fund transfers between banks for their customers. While most of these banks have launched mobile banking services for their retail customers, some are busy laying the platform for institutional clients as well.

For instance, Citi launched 'Cash-To-Mobile Receivables Solution' and tied up with Coca-Cola India recently. So, instead of handing over the cash to the truck driver delivering goods, the retailer pays the beverage company through his mobile on receiving the order. Coca-Cola India receives credit and the driver gets a simultaneous alert. However, this is on a pilot basis.

Citi said other than in fast moving consumer goods, the mobile payments platform is also being used in the travel, e-commerce, retail and healthcare sectors.

According to experts, another foreign lender, Bank of America Merrill Lynch, is also setting up a mobile platform to facilitate faster collection and cash management for companies.

The biggest challenge in shifting business transactions to the mobile platform is that the client's dealers should also agree. "We are working with some of the companies to train their teams and help upgrade their existing customers to use IMPS," said Sudeep Yadav, MD & Head of Global Transaction Services at Citi.

Rajiv Sabharwal, executive director at ICICI Bank said there was a greater need for interoperability to make cheques and even cash redundant in the next three to five years. IMPS will be a convenient instrument for payments and collections even for businesses, he added. The private sector lender on Monday launched mobile banking services for its retail customers.

Public sector banks are also catching up. Union Bank of India aims to attract its clients from the cash management services to the mobile payment platform. Lalit Sinha, general manager-Alternate Delivery Channels & New Initiative Department at Union Bank of India said the platform will be ready before the end of this financial year.

"While mobile payments will help companies to centralise cash management, it will increase cash flows and generate fee income for banks," said Sinha.

To boost mobile banking in India, the Reserve Bank of India lifted the cap of Rs 50,000 on daily transactions in December. However, the banking regulator empowered banks to set limits based on their own risk perception and with approval of their respective boards.

According to data from NPCI, the volume of inter-bank mobile transactions increased to Rs 5 crore in January from Rs 4.2 crore a month ago. The number of transactions increased to 19,101 from 15,759 in the same period.

In all, banks have issued over 18 million Mobile Money Identifiers (seven digit codes given to customers).

Source: Business Standard

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PNB offer for nursing staff in Kerala

Punjab National Bank has introduced a special salary package for nursing staff of private hospitals in Kerala. It will be a zero-charge, zero-balance account which can be operated in any of the bank's branches.

Mr K. V. Rajesh, Deputy General Manager and Circle Head, said in a statement that there is a provision for giving one month's salary advance in the form of overdraft for the account holders. RTGS and NEFT transactions are provided free of cost. The bank will provide free STM/Debit card and internet account also. There is a provision for issuance of add-on debit cards in the same account for the use of family members of the account holders.

The bank will also give free SMS alert and mobile banking facilities. The bank also offers interest concessions on car and housing loans in comparison to the general customers.

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Bank of Maharashtra cuts base rate to 10.6%

State-owned Bank of Maharashtra (BoM) today slashed the base rate or minimum lending rate by 0.1 percentage point to 10.6 per cent.

The bank has reduced the base rate from 10.7 per cent to 10.6 per cent on a monthly compounding basis, with effect from February 21, BoM said in a filing to the BSE.

With the reduction, all kinds of loans linked to base rate would become cheaper by at least 0.1 percentage points.

The benchmark prime lending rate (BPLR) would continue to remain unchanged at 15 per cent on a monthly compounding basis, it said.

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