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Saturday, March 3, 2012

Now, use Facebook for your financial transactions

Banks and stock broking firms are beginning to carry out business on Facebook, an important step as they try to build deeper customer relationships through social media platforms. With nearly 45 million users in India and growing rapidly, Facebook's popularity is making banks test the waters with a few basic services to discover how comfortable customers are carrying out transactions on the social networking site.

ICICI Bank, India's largest private bank, is one of the early movers. Its application lets customers check the balance in accounts; request statements and cheque books; or even upgrade debit cards right from their Facebook home page. "Social media is not a fringe channel and has become an important tool to interact with consumers," said Sujit Ganguly, a general manager at the bank.

"We will continue to focus our energies on social media to ensure that we can take full advantage of the interactivity of this medium," he added. Banks and financial services companies are only just putting to use the interactive potential of a platform such as Facebook. So far, their presence has been largely static, restricted to advertising and providing information about products and services. Users, too, are bound to have security and privacy concerns, but experts are of the view that security fears have been addressed.

"Those checks are in place," said Ashish Raina, principal research analyst at technology advisory Gartner. "The banking community is careful. Having said that, hackers are always building new ways to hack." HDFC Securities wants to integrate a stock-trading portal on Facebook with widgets that give real-time information feed. It has asked capital market regulator Sebi for permission to launch such a service. "We are taking the 'information leading to transaction' approach," said Jyoteesh Kumar, head of online business at HDFC Securities.

Broking agencies have to comply with strict guidelines when it comes to trying anything on digital media. Every advertisement published by a company must be approved by the exchanges, and the companies should keep a tab on their employees and brokers to monitor their communication online. Broking agencies also cannot put out any news not known to the media without seeking prior approval.

Axis Bank is promoting its platinum credit cards on Facebook by integrating a movie ticket-booking transaction engine. This was part of a larger effort to offer services that would help attract more attention to the official Axis Bank Facebook page that was launched around the same time. "Allowing transactions was a leap of faith we took while observing trends on the medium, and was strategically correct for Axis Bank," said Manisha Lath Gupta, chief marketing officer of the bank.

Some others are just now experimenting with social media and toying with the idea of doing something more than just being present on it. Financial services company Edelweiss, which does some branding with games, plans to introduce more such initiatives on Facebook. Risks notwithstanding, social media, including Facebook, will be an important platform for those looking to build better relationships with consumers. "The momentum will be fast and huge," Gartner's Raina said.



Source: EconomicTimes
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Citigroup taps Michael O'Neill to replace chairman Richard Parsons

Citigroup on Friday named Michael O'Neill as its chairman, succeeding Richard Parsons who is not seeking reelection after helping guide the major US bank through the global financial crisis.

O'Neill, who headed the Bank of Hawaii from 2000 to 2004, is a Citi board member.

Parsons, chairman since 2009, will remain in his post through the April 17 annual meeting of stockholders, Citigroup said in a statement.

His departure, after 16 years on the board, marks the end of a tumultuous era at Citigroup, which took a $45 billion taxpayer rescue to survive the US-centered global financial meltdown.

"He has been a terrific partner as we embarked on transforming Citi and returning to our core capabilities of providing banking services to our clients around the world," said Citigroup chief executive Vikram Pandit.

"It was under his stewardship of the board that Citi was able to return to a position of strength among its peers," he added.

In 2009 there was speculation that Parsons's successor O'Neill would be chosen to head Bank of America, which also received a $45 billion government bailout during the crisis.



Source: EconomicTimes
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Friday, March 2, 2012

IDBI Bank to raise Rs 5,294 crore from share sale

State-owned IDBI Bank said it would raise up to Rs 5,294 crore from various means, including share sale to government and LIC.

The board of the bank in its meeting today fixed issue price of Rs 112.99 per share for preferential issue of shares, IDBI Bank said in a statement.

The board has proposed to issue 18.85 crore equity shares of Rs 10 each at a price of Rs 112.99 per share aggregating to Rs 2,130.50 crore upon conversion of Tier I Bonds held by the government of India in the bank into equity, it said.

At the same time, it said, the bank would issue up to 22.12 crore shares at a price of Rs 112.99 per share aggregating to Rs 2,500 crore to the government.

Besides, the bank would issue up to 5.86 crore equity shares of Rs 10 each at a price of Rs 112.99 per share aggregating to Rs 662.79 crore to Life Insurance Corporation of India (LIC), it said.

Shares of IDBI Bank closed at Rs 112.35 a piece, up 2.65 per cent on the BSE.

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

The plans to take shareholders approval on March 28, it added.

Last year, the Mumbai-based bank got capital support of Rs 3,119.04 crore from the government.

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

Most of the public sector banks got capital support from the government last fiscal. These banks included Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank.



Source: EconomicTimes
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Corp Bank opens zonal office at Vadodara

Corporation Bank inaugurated its new zonal office at Vadodara and opened a senior citizens' lounge and special gold loan counter at Alkapuri branch in Vadodara on Friday.

A bank release said here the Vadodara zonal office controls the bank's operations with 33 branches and 20 ATMs.

It said the senior citizens' lounge is an air-conditioned sitting area for the convenience of elders. A special officer has been deputed to take care of the entire banking needs of them like cash payments, passbook updation and pension payments . A free annual basic medical check up will also be provided for the senior citizens.

The release said an exclusive gold loan counter has been set up at the Alkapuri branch to provide quick and fast clearance of gold loans to customers. The bank provides loans to the customers against gold ornaments. The loans will be given at Rs 2,000 per gram if repayable within 12 months and at Rs 1,900 per gram if repayable above 12 months.

Mr Vinod R. Rao, Collector and District Magistrate of Vadodara, inaugurated these facilities. Mr Ajai Kumar, Chairman and Managing Director of the bank, presided over the function.

Mr Y.S. Jain, General Manager, Mr Prabhakar Shenoy, Deputy General Manager and Zonal Head of Vadodara, were present on the ocassion, the release added.

vinayakaj@thehindu.co.in
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ICICI Bank to levy charge on mobile fund transfers

Leading private sector bank ICICI Bank will charge its customers Rs 5 per transaction from next month for transfer of funds over mobile phones, a service available for free as of now.

The fee for inter-bank transfer of funds would be levied from April 1, along with a slew of revisions in the bank’s various service charges.

Its peer HDFC Bank has already revised service charges with effect from January 1, when it also introduced charges for a few services. Banking industry experts said that a few other private sector banks could also soon revise these rates.

As per a circular issued by ICICI Bank, it will levy a service charge of Rs 5 per transaction on its IMPS (Interbank Money Payment Service) customers and would also limit such fund transfers at Rs 50,000 per transaction a day.

ICICI Bank is one of the top banks offering this service and has more than 30 lakh customers using the facility.

Regarding many other service charges, ICICI Bank has also decided moved to a monthly basis of levying fees and maintenance of minimum account balance, from quarterly now.

For regular savings accounts, ICICI Bank would require its customers to maintain a monthly average balance of Rs 10,000 in metro and urban locations, Rs 5,000 in semi-urban and Rs 2,000 in rural areas.

For non-maintenance of minimum balance, it would levy a charge of Rs 250 a month in metro/urban areas against Rs 750 per quarter currently, in case of the average balance being Rs 5,000-10,000 and Rs 350 a month for average balance falling below Rs 5,000.

For ECS debit returns, the bank has increased the charge from Rs 250 per return to Rs 350 with effect from April 1.

The bank would allow four free cash transactions at the base branch in a month, as against 12 in a quarter now, and would levy a charge of Rs 90 per transaction thereafter (from Rs 50 currently).

However, the bank has withdrawn its charges for all multi-city cheque payments, which is currently charged at Rs 3 per Rs 1,000 for transactions above Rs 50,000.
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LIC to pay claims in South via funds transfer system

The settling of LIC’s claims through the National Electronic Funds Transfer (NEFT) system across four States in South India will take off in April, a senior official said.

The move is aimed at reducing the use of cheques in settling claims to avoid delays due to their getting lost or damaged, said LIC Zonal Manager, Mr D. D. Singh.

“We are going live from April. Almost all the 13 divisions of LIC are ready to offer the service (from April onwards),” Mr Singh told PTI.

Earlier, LIC undertook this proposal as a pilot study in Kochi (in Kerala) and also, in some parts of Tamil Nadu.

Following its success, it has been decided to implement it across the south zone, he said.

LIC currently has about 39 crore customers across the four southern States, he added.

Stating that the proposal would ensure “fast” and “secured” process of depositing the claims of a customer, Mr Singh said leading banks from both private and public sector banks have tied up with LIC for this service.

“This is just to ensure accuracy. Today, everybody opts for a bank account and with this system, we will be able to reach the customer directly (for settling the claims),” a company spokesperson said.

On its future plans, Mr Singh said they have planned to issue about 51 lakh policies by the end of this month. Last fiscal, the company issued about 50 lakh polices across all its segments.

“Every year, we grow by 10-15 per cent. This year we are expecting the same,” he said.
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Thursday, March 1, 2012

New GM for Karnataka Bank

Dr Meera Laetitia B. Aranha, Deputy General Manager and Chief Compliance Officer of Karnataka Bank Ltd, has been promoted as General Manager with effect from March 1. A bank release said here on Thursday that Dr Aranha joined the bank in 1987 as Manager. As General Manager, she will be in-charge of Large and Corporate Finance Division at the Head Office, the release added.
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Stick to tried and proven ATMs

A large number of the fraudulent ATM withdrawals that take place occur while the card is still in your possession.

Somehow, somewhere, fraudsters get hold of the information contained in the magnetic strip at the back of your card together with your PIN.

Typically this happens, without your knowledge, at a tampered ATM.

Beating the system

In the course of one particular series of fraudulent transactions, a person, with his face covered, came in with multiple cards and made repeated withdrawals of Rs 20,000 in successive transactions.

In the absence of SMS alert facility, he succeeded in withdrawing Rs 40,000 or more every day, using most of the cards till almost the entire balance in the accounts was withdrawn or the accounts were blocked by the customer or bank.

Video footage revealed that he chose midnight or early morning hours for these operations which allowed him considerable time to be alone inside the ATMs.

On one occasion he carried out almost 40 transactions in a row using more than 25 cards.

All the complainants said they had not parted with their cards or PIN details and the cards were in their possession at the time the withdrawals took place.

Although banks typically take the stand that money cannot be withdrawn without the security of card and PIN details having first been compromised, in the case of this particular set of transactions, because of overwhelming circumstantial evidence, the Banking Ombudsman directed the banks to make good the losses.

Watch where you swipe

But this is not something you can count on. It takes a great deal of time, and there is no guarantee of a happy ending.

So be careful about where you insert your card, stick to tried and proven ATMs, keep up with SMS alerts or use other means to keep abreast of withdrawals on your account and, last but not least, change your PIN if you feel it might have been compromised.

ranade@thehindu.co.in
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IRDA nominates members for Health Insurance Forum

The Insurance Regulatory and Development Authority has nominated Mr M. Rama Prasad, Member (Non-Life), as the Chairman of the Health Insurance Forum.

The chairman and managing directors of Life Insurance Corporation of India, New India Assurance Company, Star Health and Allied Insurance Company, Chairman of General Insurance Public Sector Association, chief executive officers of ICICI Lombard General Insurance Company, Bajaj Allianz Life Insurance Company were also nominated as industry representatives.

From the third-party administrators, the heads of Raksha TPA and India Healthcare Services Pvt Ltd were nominated as per an order issued by the regulator.

The IRDA constituted the forum last month to act as a consultative body for all stakeholders.

The functions of the forum will be to advice and assist the regulator in evolving health insurance regulations and facilitate the creation and adoption of standard processes and definitions in health insurance.
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LIC launches single premium Jeevan Vriddhi policy

Life Insurance Corporation of India (LIC) today launched a new plan ‘Jeevan Vriddhi’, a single premium non-linked insurance plan. The plans offers risk cover of five times the premium chosen by the customer and guaranteed returns at maturity.

According to an official statement, the plan offers a combination of insurance and returns, and would be available for a limited period of up to a maximum of 120 days.

Among the multiple benefits offered to the customer are: Five times the single premium being offered as the risk cover, guaranteed maturity sum assured along with loyalty additions, if any, one-time payment and no upper limit on investment for eligible lives. The policy also offers liquidity – a policy loan will become available after one year.

In the event of the death of the life assured during the currency of the policy, the basic sum assured would be payable, which is five times the single premium, excluding extra premium, if any. On maturity, the guaranteed maturity sum assured (which will depend on the single premium payable and the age at entry of the life to be assured) along with loyalty addition if any, would be payable. Eligibility for loyalty addition would be considered during the last year of the policy.

The minimum age at entry for the plan is eight years (completed), while the maximum is 50 years (nearer birthday). The term under the policy is fixed at 10 years. The minimum sum assured is Rs 1.50 lakh, while there is no upper limit. The minimum premium under the policy is Rs 30,000 and would increase in multiples of Rs 1,000.
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Vijaya Bank cuts interest rate on loans to small units

With an additional thrust on the micro small and medium enterprises (MSME) loan portfolio, Vijaya Bank has reduced the interest rate on MSME loans by 0.25-0.75 percentage points with effect from March 1, 2012, said a press release from the bank.

Apart from this, wherever the borrowers' account is rated by external credit agencies, the bank extends further reduction in the interest rate ranging from 0.25 to 1 percentage points.

“MSME is a thrust area for us because it is an employment generator and also bridges the gap between the manufacturing sector and the lowest strata of society. We consider it an important link in the entire value chain,” Ms Shubhalakshmi Panse, Executive Director, Vijaya Bank, told Business Line. According to her, the MSME segment is currently growing at 25-28 per cent for the bank.

anju@thehindu.co.in
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Oriental Bank to continue financing viable airlines, says new chief

Oriental Bank of Commerce will not shy away from financing viable units in the airline industry just because a few of the players have landed themselves in financial troubles.

“We will not blackout the airline sector. We will continue to finance viable units. We have recently given finance to low cost carrier Indigo. If you can manage the business well, you will get our funding assistance”, Mr S. L. Bansal, who is OBC's new Chairman and Managing Director, said here today.

Standard asset

Mr Bansal, who assumed charge of his new assignment today, said that Kingfisher Airlines was still a standard asset for the bank and that it had a small exposure of Rs 55 crore (as pre-delivery payment finance for aircraft). Mr S. C. Sinha, Executive Director, said that Kingfisher Airlines was so far servicing the interest and that repayments would start only in 2013.

On Air India debt recast, Mr Bansal said that the bank would take a hit of Rs 170 crore in 20 quarterly instalments. OBC's exposure to Air India is about Rs 1,550 crore, said Mr V. Kannan, an Executive Director of OBC.

The banking industry is likely to cumulatively take a hit of Rs 2,000 crore on account of the recent Air India debt recast, say industry insiders.

As Air India had become a restructured advance for the bank, it is required to have a weightage of 2 per cent for provisioning purposes as against 0.4 per cent for a standard asset, Mr Bansal added.

Credit growth

Meanwhile, OBC is aiming at a credit growth of 19 per cent for current fiscal, higher than the expected industry average of 16-18 per cent, according to Mr Bansal.

The bank wants to grow its retail deposit at 20 per cent if credit was growing at, say, 18 per cent, he said while declining to provide a guidance for overall deposit growth.

On overseas branch expansion, Mr Bansal said that the bank would upgrade the Dubai representative office to a full-fledged branch.

krsrivats@thehindu.co.in
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SC stay on sealing of banks in Noida extended

The Supreme Court today extended till March 12 its stay on sealing of the banks operating from residential areas in NOIDA.

"There will be no sealing of the banks by the NOIDA authority till March 12," a bench comprising justices Swatanter Kumar and Ranjana Prakash Desai said, while extending its earlier order of January 23.

The bench, however, asked the chief managers of all the relevant banks, which are before it, to file their affidavits within a week giving details of the lease entered by the banks which are to be shifted to alternate site.

The banks which have been alloted new plots by the Noida authority have been asked to file their affidavit with the photo copies of the receipt issued to them by the authority.

The bench made it clear that failure to file the affidavits within the timeframe would lead to the sealing of premises by NOIDA authority.

The bench was hearing intervention applications filed by 19 banks aggrieved by the court's December 5, 2011, judgement.

The apex court had earlier ruled that banking, hospitals and other commercial activities cannot be carried out from plots in Noida developed for residential purpose and ordered 21 banks and nursing homes in Sector 19 to immediately close their operations.

"That banking or nursing homes or any other commercial activity is not permitted in Sector 19 and for that matter, in any sector, in the development area earmarked for residential use," the bench had said.

The apex court had asked the CEO to identify alternative sites near residential areas in two weeks and complete the allotment process in the next four weeks. It has also sought a status report from the CEO on the compliance of its December 2011 directive.


Source: EconomicTimes
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Kotak Mahindra Bank implements Infosys' Finacle CBS platform

Private sector Kotak Mahindra Bank today announced migration to new Core Banking Solution ( CBS) platform Finacle 10, the latest banking product of leading IT player Infosys Technologies.

The entire implementation, which replaced the bank's legacy core banking system with no disruption to business, was completed in 18 months, Kotak Mahindra Bank president K V S Manian said.

The implementation of Finacle core banking and e-banking solutions was rolled out simultaneously across all the 335 bank branches of the bank.

Finacle 10 was found to be the best fit, both functionally and technologically, Manian said, adding the bank has already seen a 44 per cent increase in the number of accounts added after implementation.

"Banking in this era is technology-driven. To enhance our customer experience, we needed an advanced core banking platform like Finacle, to help us meet the dynamic needs of our customers," he said.

"With this technology transformation program, we're happy that the bank has been able to derive significant benefits in terms of both growth and operational efficiencies," said Finacle Global Head, Haragopal M.


Source: EconomicTimes
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Vikram Pandit excelled in hedge fund business but not Citigroup

Vikram Pandit knows one way to make big money in hedge funds: sell them.

In July 2007, Pandit sold Old Lane Partners LP to Citigroup Inc for $800 million and pocketed $165 million for his stake. Then he took over the bank's in-house hedge-fund group, now called Citi Capital Advisors, or CCA. He became chief executive officer of the whole company just five months later.

After the financial crisis, Citigroup closed some funds -- it won't say how many -- and investors fled others. As of mid- February, it managed $18.6 billion. The last time Citi told shareholders how CCA performed was the first quarter of 2008, when the unit lost $509 million. Four of Citi's seven biggest hedge funds have underperformed their indexes since they started, according to investors. Five of the seven lost money in 2011.

Pandit persevered. Since 2008, he has opened or purchased at least six new funds. In the third quarter of 2011, he invested $800 million of the bank's own money -- not cash from investors or clients -- into CCA, even as traders from Goldman Sachs Group Inc. (GS) and other banks were jumping ship to start their own hedge funds in advance of the Volcker rule.

Volcker Rule

That law, championed by former Federal Reserve Chairman Paul Volcker and made part of the Dodd-Frank Act, says a deposit-taking bank's proprietary capital can't account for more than 3 percent of any hedge fund.

In at least four of Citi's funds, half or more of the assets have come from Citi's own balance sheet during the past two years, not from investors or clients of its private bank, according to interviews with people familiar with the funds and documents obtained by Bloomberg Markets. That has to change by the time the Volcker rule is fully implemented; it is scheduled to take effect in July and includes a two-year transition period.

So, in February, Pandit capitulated. John Havens, Citigroup's chief operating officer and the chairman of CCA, told Bloomberg News that the bank planned to sell a "significant" portion of CCA to managers of the group.

Best Talent

The organization will ultimately be independent of Citi, which will help hedge-fund and private-equity managers raise money from outside investors, says Havens, 55, who worked with Pandit when both were executives at Morgan Stanley (MS) and co- founded Old Lane with him.

"Clients like independent, alternative asset managers," Havens says in his office in downtown Manhattan. "You can attract the best talent in the owner-operator model."

Citi plans on keeping a stake in CCA, although the percentage will drop as assets from outside investors come in and the bank takes its own money out of the funds, Havens says.


Source: EconomicTimes
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Muthoot Finance's Rs 500-cr bond issue opens on Friday

Gold loan company Muthoot Finance today said its Rs 500-crore bond issue, the third this fiscal, will hit the markets on Friday.

"We have got Sebi permission for a Rs 250 crore NCD (non-convertible debenture) issue which has a green-shoe option," Muthoot Finance Managing Director George Alexander Muthoot said here.

The issue offers four different tenors - two years with a yield on 13 per cent, three years at 13.25 per cent, five years for HNIs and QIBs, with a coupon of 13.25 per cent and five and a half year tenor attracting 13.43 per cent.

In the past two issues, the largest gold loan firm in terms of loan portfolio had offered 13 per cent for two years and 13.25 per cent for the three-five year bonds.

On higher pricing, Chief Financial Officer Oommen K Mammen said going by the indications from RBI, the interest rate has reached its peak and "we want maximum participation from the retail investors and hence the higher coupon".

The issue, priced at Rs 1,000 per bond with a minimum of Rs 5,000 worth of bonds, opens on March 2 and closes on March 17. Muthoot said the funds will be used for operational expenses, apart from part-paying debt.

This is the third NCD issue from the company this fiscal. Earlier, it had raised Rs 693 crore last August and Rs 459 crore in December.

The company has so far raised Rs 10,000 crore worth working capital from as many as 30 banks and mutual funds.

Since the bank lending to gold financing firm has been tightened by the Reserve Bank recently, Muthoot said his cost of fund has gone up to some extent.

In the recent past, the cost of funds has gone by 2.5- 3 per cent to 12.5-13 per cent, while the firm's net interest margin remained at 10.81 per cent at the end of Q3, he said.


Source: Financial Express
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Moody's cuts Central Bank of India rating outlook to negative

Global rating agency Moody's today revised downward the ratings outlook for Central Bank of India to 'negative' from 'stable' on account of weak asset quality.

"The revised outlook considers that Central Bank of India's comparatively modest capital level and weak asset quality will be further pressured in the current difficult operating environment," Moody's said in a statement.

"We view the bank as being more vulnerable than its similarly-rated peers (D-), given its relatively riskier loan book, which includes a high proportion of loans to troubled industries, such as the power sector," it said.

The bank reported a Tier 1 capital ratio of 7.77 per cent as of December 31, 2011. The level was below the 8 per cent Tier 1 ratio that the government of India has committed to maintaining in public sector banks and lower than its peers; the system Tier 1 ratio average reaching 9.60 per cent, it said.

Importantly, it said, such a level for its Tier 1 capital ratio does not provide a sufficient cushion to absorb the potentially higher credit costs coming from its deteriorating asset quality or to support growth.

On the asset quality front, it said, the bank's non-performing assets (NPA), as of 31 December 2011, reached a 2-year high of 3.7 per cent of loans and Rs 4,920 crore on a absolute basis.

In addition, restructured assets accounted for 7.4 per cent of loans, significantly above our estimated 4.2 per cent for the system.



Source: Financial Express
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Karnataka Bank launches gift, travel cards

Karnataka Bank Ltd has launched two more products aimed at gift and travel segments. A bank release said here that it has launched ‘KBL Gift Card' and ‘KBL Travel Card'.

Ms Usha Thorat, former Deputy Governor of the RBI and Director for CAFRAL (Centre for Advanced Financial Research and Learning), launched these new products in Mangalore recently.

The release said that the ‘KBL Gift Card' is available in denominations starting from Rs 500 to Rs 25,000.

‘KBL Travel Card' is available in nine currencies. This card is accepted worldwide at over 1.6 million ATMs, 25 million merchant outlets and Web sites verified by VISA. On the refund of the balance amount in the card, the release said that balance amount can be exchanged at identified branches of the bank.

vinayakaj@thehindu.co.in
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M. G. Sanghvi is new CMD of Syndicate Bank

Mr Madhukant Girdharlal Sanghvi will be the Chairman and Managing Director of Syndicate Bank effective March 1, after the superannuation of Mr Basant Seth. Prior to this appointment, Mr Sanghvi was the Executive Director, Bank of Maharashtra.

He has over 31 years of experience in various fields of banking, including branch/regional/zonal resources management, credit, treasury, planning, risk management, finance and accounts.

He began his banking career in Bank of Baroda in 1980, and later joined Dena Bank. He became a General Manager in Dena Bank in 2003. Mr Sanghvi became the Executive Director of Bank of Maharashtra in October 2008.
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Union Bank may soon cut interest rates on retail loans

Union Bank of India will reduce interest rates on home and education loans next month if its net interest margins (NIM) remains strong, Mr M.V.Nair, Chairman and Managing Director of the bank said.

The bank would take a call on reducing interest rates on the retail side (such as home and education loans) after the NIM data for February is available, he told newspersons here.

Mr Nair's remarks come close on the heels of State Bank of India's move to reduce education loan rates by 1 percentage point. Union Bank's NIM in end December was 3.3 per cent. The bank had in December last year reduced its base rate by 0.1 percentage points to 10.65 percent.

On overseas expansion, he said that the bank was looking to open a subsidiary in the UK and was awaiting the regulatory nod of the UK authorities. The bank has already received the go ahead from the Reserve Bank of India.

Union Bank is also looking to open branches in Belgium and Sydney, besides offices in Dubai, Shanghai and Beijing.

krsrivats@thehindu.co.in
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Allahabad Bank to roll out 5,000 POS terminals

Allahabad Bank has tied up with Tata Communications Banking InfraSolutions Ltd for providing merchant acquiring services through Point of Sale (POS) terminals. POS terminals are swipe machines for registering payments through credit and debit cards.

Under this tie-up, the bank plans to roll out 2,000 POS terminals in the first phase and another 3,000 terminals in the second phase thereby taking the total number to 5,000 by the end of this fiscal, according to its Chairman and Managing Director, Mr J. P. Dua.

According to RBI data, there are over 6 lakh POS terminals in the country as on November 2011.
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Tuesday, February 28, 2012

Mixed response for nation-wide strike, banking, transport hit

A nation-wide 24-hour strike called by 11 major trade unions today evoked a mixed response disrupting public sector banking operations and transport services in some states but normal life remained largely unaffected.

The strike in protest against the government's "anti-labour policies" was by and large peaceful with no major incidents of violence being reported.

Air services remained normal while train services were disrupted in some divisions of Eastern Railways and South Eastern Railways due to picketing by protesters.

Life in major cities, including capital Delhi, Mumbai and Chennai, was normal though it was affected in states like Kerala, Odisha and Tripura.

The stir had a mixed response in West Bengal where the Trinamool Congress government went all out to neutralise the strike with Chief Minister Mamata Banerjee personally monitoring the situation. CPI(M) criticised the Trinamool supremo for adopting 'oppressive methods to foil the strike'.

Attendance at the West Bengal state secretariat, Writers' Buildings, was at an 'unusual' 65 per cent in the wake of the warning to state government employees by Mamata that absence from duty will be treated as break in service.

In West Bengal, shops, markets and business establishments were mostly closed in some areas, while state-run buses and trams plied with fewer passengers. 100 pro-strike supporters were arrested in different districts for obstructing rail and road traffic.

Most of the PSU bank branches in major cities were open, but the attendance remained thin as majority of clerical staff abstained from work.

Although the PSU bank unions claimed that operations were badly hit with employees going on strike, the managements maintained that only some clerical staff did not report on duty. Private sector banking services were normal.

Employees of RBI in the Capital held a protest outside theiroffice and shouted slogans against the policies of the government.

In Mumbai, commercial banks reported lower attendance and loading/unloading operations at both the ports took a hit.

Besides the Left-backed unions, the pro-Congress and pro-BJP labour outfits are also backing the strike.


Source: EconomicTimes
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Kotak Securities makes trading account opening easy and fast

Gone are the days when one had to struggle for weeks to open a trading account, with Kotak Securities launching a product that makes the entire process easy and fast.

India's leading brokerage firm today introduced 'My Box', a ready-to-trade box that allows customer to open a trading account instantly.

"Now opening a broking account is as easy as buying a book off the shelf of a retail store. 'My Box' allows customer to open a trading account instantly," Kotak Securities Executive Vice-President & Head of Broking B Gopkumar told reporters here.

The product is targeted at people looking for an ideal broking partner, want to explore services offered by Kotak Securities or those who have postponed their decision to open an account due to the heavy paperwork required, he said.

"Our new offering simplifies the process of opening a trading account. It helps in redefining our business model that explores new cost effective and value creating distribution channels. The model will be a game changer to leverage brand value, distribution and sales network," Gopkumar said.

The stock broking arm of the Kotak Mahindra Group has 1,410 outlets in nearly 450 cities. It processes over 3,00,000 secondary market trades everyday and has a customer base of more than 7,30,000.


Source: EconomicTimes
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Bank strike today; normal services may get affected

Operations in public sector banks may be hit on Tuesday as employee unions will observe a day-long strike opposing outsourcing of non-core activities to the private sector among other things.

The strike by bank employees is a part of the one-day all-India general strike, called by major central trade unions. Seven insurance unions, representing public sector life and general insurance sectors, have also extended support to the strike call.

However, large private sector lenders like ICICI Bank, HDFC Bank and Axis Bank and foreign banks are expected to function normally. Private sector insurance companies will also not participate in the strike.

"Seven out of nine bank unions have given a strike call demanding enactment of stringent and effective measures to recover bad loans and opposing unilateral imposition of Khandelwal Committee recommendations," All India Bank Employees Association (AIBEA) General Secretary C H Venkatachalam said.

The unions are also opposing banking sector reforms and outsourcing of jobs, he said. About 8,00,000 employees and officers affiliated with these unions will participate in the strike, he claimed.

There are about 87,000 branches of public sector banks across the country. The state-owned lenders control about 75 percent of banking business. Employees of the country's largest bank SBI will also participate in the strike

"All- India Bank Employees' Association (AIBEA), Bank Employees Federation of India (BEFI) and National Organisation of Bank Workers (NOBW) have given a notice calling for all India Bank Strike on February 28, 2012 on certain demands," the SBI statement said.

Corporation Bank, State Bank of Mysore, Bank of Maharashtra and others have also issued similar statements saying "if strike materialises normal functioning may get affected".

The Central Government-appointed Khandelwal panel had suggested a slew of measures, including outsourcing more non-core activities in a time-bound manner.

The panel had also recommended raising the standard of recruitment, including the methodology and content for tests, besides making the testing of computer skills mandatory for both officers and clerks.

The Khandelwal Committee on Human Resources (HR) had also suggested that the minimum qualification for clerks and sub-staff should be graduation and class 10, respectively.

(Agencies)
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SKS securitises loans worth Rs 354 cr

SKS Microfinance, the country’s only listed micro lender, today said it has securitised Rs 354 crore of receivables from 18 States, except Andhra Pradesh.

The securitisation was done by a major public sector bank, SKS said in a statement, without naming the lender.

SKS shares were up 1.64 per cent at Rs 130.40 on the BSE in late morning trade.

Under the pool securitisation, bundling micro loans made to borrowers like micro-entrepreneurs are sold to investors such as banks to raise funds.

The microfinance company has already drawn down the first tranche of Rs 78.7 crore comprising receivables from micro women borrowers from the weaker sections, as defined by the Reserve Bank of India, the statement said.

“This is the largest rated pool assignment transaction in the Indian microfinance history,” the company claimed.

The pool is well diversified with the average loan amount being Rs 10,717. The pool is rated as CARE A1+(SO) (Highest Safety) by CARE, it said.

Instruments with a CARE A1+ (SO) rating are considered to have a strong capacity for timely payment of short-term debt obligations and carry the lowest credit risk, SKS said.

Commenting on the transaction, Mr S. Dilli Raj, Chief Financial Officer, SKS Microfinance Ltd, said, rated pool assignment is an excellent instrument of confluence which achieves the amalgamation of the funding capabilities of the banking system and the credit delivery skills of microfinance companies.

“This sort of confluence may well be the real answer for financial inclusion. Our ability to consummate the largest rated pool assignment in the Indian microfinance history clearly demonstrates that funding concerns raised post the AP MFI Act are behind SKS Microfinance,” Mr Dilli Raj said.

Earlier this month, SKS completed another securitisation for Rs 243 crore.

The present transaction is SKS Microfinance Ltd’s eighth assignment or securitisation transaction post the AP MFI Act.

All the rated papers of SKS Microfinance have shown robust collection efficiency of more than 98 per cent.

Credit enhancement has not been utilised in any of these transactions, SKS claimed in the statement.
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Karnataka banks achieve 90% of priority sector credit target

Banks in Karnataka have achieved 90 per cent of their priority sector credit target for the fiscal up to December 2011, the chairman of the State-level bankers' committee said at the 120th SLBC – Karnataka meeting here on Monday.

Mr Basant Seth, also the chairman and managing director of Syndicate Bank, said in a press release that banks have disbursed Rs 41,412 crore under Priority Sector Credit up to December 2011 against the revised annual target of Rs 46,027 crore, thereby recording an achievement level of 90 per cent.

Under the agriculture sector through Rapid Action Plan and Special Campaign mode, banks have disbursed Rs 21,709 crore up to December 2011 against the revised annual target of Rs 31,380 crore. Out of this, the share of crop production loan was Rs 14,985 crore as against the prescribed target of Rs 20,388 crore. Under the secondary and tertiary sectors, disbursement was Rs 8,828 crore and Rs 10,875 crore respectively.

Mr Seth also said that banks should accelerate credit flow to the thrust areas such as self-help groups, housing, education, minority community, micro and small enterprises segments.

While reviewing the performance of banks in the State as on December 2011, he said that aggregate deposits stood at Rs 3,75,778 crore, while aggregate advances were Rs 2,79,662 crore. The credit-deposit ratio stood at 74.42 per cent. The advances to priority sector stood at Rs 1,12,750 crore, constituting 40.32 per cent of credit, surpassing the RBI stipulation of 40 per cent, he pointed out.

Similarly, the advance to agriculture sector was Rs 50,762 crore comprising 18.15 per cent of the total credit, which is above the stipulated level of 18 per cent. Advances to MSME sector stood at Rs 50,519 crore.

1st phase of financial inclusion ahead of deadline

The first phase of the financial inclusion programme for covering villages with population of over 2,000 in Karnataka has been completed ahead of the March 2012 deadline. The Chairman of the state-level bankers' committee (SLBC) announced at the 120th meeting of SLBC Karnataka here on Monday that all the 3,395 unbanked villages in the State have been covered.

Mr Basant Seth, Chairman of SLBC and Chairman and Managing Director of Syndicate Bank, said in a press release that 6,024 unbanked villages with population of 1,000-2,000 have been allocated to banks for opening banking outlets by a gram-panchayat-wise re-mapping of the villages. So far, 36 financial literacy and credit counselling centres have been opened in the State.

Mr Seth also informed bankers and Government officials that 24 unbanked villages with population of 5,000 and above have been identified and communicated to the concerned service area banks for opening brick-and-mortar branches.

anju@thehindu.co.in
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HSBC India profit up 20% on strong growth in commercial biz

HSBC's India operations reported a profit before tax of $813 million for the year ended 2011 — 20 per cent higher than the $679 million in the previous year. The growth in profit was on account of the improved performance of the retail banking segment where losses declined substantially and strong growth in commercial banking, said Mr Stuart Davis, Chief Executive Officer, India, HSBC.

Decline in losses

The losses in retail banking and wealth management declined to $14 million as on end-December 2011, from a loss of $83 million in 2010. Commercial banking grew to $122 million, from $71 million in the previous year. Global banking and markets increased to $539 million ($508 million).

There was a slowdown in credit demand, especially in the second half, which is reflected in the loan growth. That, along with the weakening of the rupee, led to a decline in loan growth, Mr Davis said.

The gross loans and advances declined to $6.01 billion ($6.70 billion).

Within that residential mortgages fell to $830 million ($920 million), property related loans increased to $809 million ($680 million), commercial and international trade fell to $3.91 billion (4.58 billion).

For 2012, credit growth is likely to follow a similar trend, at least in the first half, Mr Davis said. “Hopefully after elections we will see more policy decisions coming through, which will lead to improvement in growth,” he said.

In 2011, the cost of funds rose as a result of interest rate increases and de-regulation of savings bank rates, Mr Davis said.

At on December 2011, the number of HSBC employees in India were 32,000. 

priyan@thehindu.co.in
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Indian Bank to set up three more branches in Sri Lanka: Bhasin

Indian Bank has applied to the Reserve Bank of India to open three more branches in Sri Lanka. The bank plans to open a branch each in Batticaloa, Trincomalee and Hambantota, it's Chairman and Managing Director, Mr T. M. Bhasin, said.

The Central Bank of Sri Lanka has already given the green signal for these branches, he said after inaugurating a specialised SME branch here on Monday. This is the first SME branch opened by Indian Bank in the Capital.

Indian Bank had opened its second branch in Sri Lanka in Jaffna in January last year. The other branch is in Colombo.

Mr Bhasin said that the Jaffna branch has achieved break-even in eleven months of operations. Also, the branch has achieved 200 per cent credit-deposit ratio. The bank has started the self-help group movement in Jaffna also, he added.

He also said that the bank was awaiting regulatory nod for opening a full-fledged branch in Hong Kong and also a representative office in Jakarta.

SME business

Indian Bank has an SME (small and medium enterprise) business of Rs 8,000 crore, which is projected to grow to Rs 9,000 crore by end-March 2012. The bank may achieve a SME business of Rs 12,000 crore in 2012-13, Mr Bhasin said.

krsrivats@thehindu.co.in
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Sunday, February 26, 2012

Have you planned your income tax this year?

The financial year 2011-12 is coming to an end. It is time to finalise your income tax planning and savings. There are many sections under the Income Tax Act that enable you to reduce your income tax liability.

These are some sections you need to tap:

Section 80C

This section allows income tax exemptions and rebate to individuals. You can invest in certain specified instruments and reduce your taxable income by up to Rs 1 lakh under this section.

These are some of the major instruments that attract income tax benefits. You can invest Rs 1 lakh in one or more of these instruments to avail tax rebate under Section 80C:-

Provident funds (Employee Provident Fund and Public Provident Fund) Life insurance (term insurance and endowment plans) Pension plans Equity-linked savings schemes (ELSS) of mutual funds Specified government infrastructure bonds Repayment of housing loan (principal component) National Savings Certificate (NSC)

Section 80CCF:

This is an extension of Section 80C. The Income Tax Act allows you an additional rebate (in addition to the limit allowed under Section 80C) of up to Rs 20,000 when investing in notified infrastructure bonds. This section is a boost for infrastructure development in the country. There is an expectation that the investment limit in this section may be raised for the next year.

Home Loan Benefits:

A housing loan provides relief under the Income Tax Act. The repayment of the principal component of a housing loan attracts rebate under Section 80C of up to Rs 1 lakh. The interest payment on a housing loan attracts rebate of Rs 1.5 lakhs.

Medical Insurance:

The income tax benefit on purchase of medical insurance comes under Section 80D. You can claim a rebate in income tax on the premium paid to buy mediclaim policies. The maximum limit on the income tax rebate under this section is Rs 15,000. You can avail this deduction on medical insurance premiums paid for yourself, your spouse, parents and children.


Other Deductions (salaried individuals):

Medical allowance:

If an employer of a salaried individual offers a medical expense reimbursement allowance, an income tax deduction of up to Rs 15,000 per year against the relevant expenses is allowed.

LTA:

If an employer offers a leave travel allowance (LTA) as a part of the salary, one can avail an income tax deduction on the travel expenses. According to the norm, the LTA benefit can be availed twice in a block of four calendar years. Presently, the block applicable is from 2010 to 2013.

Review tax planning

These are some points you should keep in mind while reviewing your investment planning with respect to income tax optimisation :

Check limits:

First of all, exhaust the quotas of Section 80C and Section 80CCF. You can analyse the various options and invest to save tax under Section 80C.

Use allowances:

Salaried tax-payers should plan expenditure under medical allowance, child education allowance and conveyance allowance for maximum benefit.

Insure:

Investing in a medical insurance policy is another option to save tax, if your Section 80C limit is already exhausted. However, it is not advisable to take a medical insurance policy just for the sake of saving tax.


Source: EconomicTimes
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