Central Bank of India hikes short-term rates

Fund crunch in the banking system is beginning to show clearly. Banks are announcing a steep increase in short-term deposit rates to attract funds from depositors. Central Bank of India has just flagged off a sharp hike in very short-term rates (in different tenors of 7-90 days). In the shortest time bucket of 7-14 days, the bank has lifted interest rates by 270 per cent from 2.5 per cent to 9 per cent. In the next bucket of 15-45 days, rates are up 80 per cent. This has gone up from 5 per cent to 9 per cent. And in the 46-90 days bucket, rates...

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Finance ministry intensifies efforts to merge regional rural banks in states

Despite heavy resistance from unions, the finance ministry has intensified its efforts to merge regional rural banks (RRBs) within a state. The ministry has sought consent from state government of Tamil Nadu to merge two RRBs sponsored by Indian Overseas Bank and Indian Bank. Also, to expedite the matter, it has directed the sponsor-banks to pursue the case of obtaining the state government's approval. Consent of the state is necessary as it owns 15% stake in RRBs, while 35% is owned by the sponsor-banks and 50% by the Centre. Industry sources...

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Management changes expected at Deutsche Bank

Anshu Jain, the incoming co-chief executive of Deutsche Bank, is moving quickly to put in place his own management team in advance of his assuming joint control of the German banking giant on June 1. The longtime head of Deutsche’s profit engine — its corporate and investment banking business — intends to appoint two investment bankers to replace him, according to a person with direct knowledge of the decision. They are Colin Fan, from the emerging-markets division of the bank, who will oversee sales and trading, and Robert Rankin, a former UBS...

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Federal Bank set to open 13 branches in Kozhikode zone

Federal Bank will open 13 new branches in Kozhikode zone on Saturday. This will take the total number of the bank's branches in the zone to 177, apart from 202 ATMs. The zone covers Thrissur, Irinjalakkuda, Palakkad, Malappuram, Kozhikode and Kannur regions. Mr C.P. Mohandas, General Manager of the bank, said here on Friday that Kozhikode zone contributes nearly 12 per cent of the bank's total business with deposits of Rs 6,100 crore and advances of Rs 3,400 crore. The bank is targeting a total business of Rs 10,000 crore by March-end, he added. Financial...

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RBI floods Rs 48,000-cr into system with 75 bps CRR cut

The Reserve Bank of India on Friday cut the cash reserve ratio by a ‘surprisingly aggressive' 75 basis points. The move to cut the amount of cash that banks need to park with the RBI (or CRR) from 5.50 per cent to 4.75 per cent of deposits is aimed at easing the persistent liquidity crunch being faced by banks. The latest round of CRR cut comes just five days ahead of the mid-quarter review of the Monetary Policy. The RBI action, which came after market hours, will inject around Rs 48,000 crore of primary liquidity into the banking system. In its...

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Citi’s Pandit gets $15-m pay package for 2011

Citigroup’s India-born CEO, Mr Vikram Pandit, has received nearly $5 million (about Rs 75 crore) as his compensation for 2011, as he got his first cash bonus in about four years at the global banking giant. According to a regulatory filing by Citi, Mr Pandit’s pay package for 2011 included a salary of $1.67 million, a cash incentive of $5.33 million and stock options valued at $7.98 million, totalling to $14.98 million. This is the first time Mr Pandit has got a bonus at Citi and had also got only a token salary of one dollar for 2010. Soon after...

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Banks expand safe deposit lockers to keep gold

A huge demand for safe deposit lockers for gold, prompted by a spate of thefts in south Indian cities, is driving banks to increase storage in their branches. With gold consumption continuing unabated despite an escalation in price, pressure is on banks to arrange lockers. "Nobody wants small lockers. Everyone wants medium or large lockers. Earlier, only corporate houses sought large lockers," said Gopal Gusain, the Chennai circle head of PNB. He said the bank was expanding strong rooms to accommodate more cabinets. "We are doubling the space from...

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BoB, Union Bank await policy review cues to decide on rate cut

Public sector lenders Bank of Baroda (BoB) and Union Bank of India today said they would take a call on slashing interest rates in specific segments once the RBI has announced its mid-term policy review. "We will take a call after the RBI's policy review. At the moment, liquidity is tight and perhaps one will like to assess the overall situation before taking a decision [on slashing rates]," Chairman and Managing Director of Bank of Baroda MD Mallya said. He was speaking on the sidelines of the fourth Annual Credit Information Conference organised...

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Loans to fisherwomen: Vijaya Bank forms 300 joint liability groups

Vijaya Bank's Mangalore region has formed 300 joint liability groups for disbursing loans to fisherwomen. Till now, around 2,800 fisherwomen in two districts of coastal Karnataka have taken loans under this scheme. Mr Sudhakar Shetty M., Deputy General Manager, said that the bank has disbursed around Rs 14.9 crore to 2,804 members of 300 such groups in Dakshina Kannada and Udupi districts. Asked about the recovery from these groups, he said as of now it is good because of peer pressure from the group members. Each member of the group is given a...

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Karnataka Bank to open 20 financial inclusion branches

Karnataka Bank is likely to open 20 financial inclusion branches by March 2013. Of them, three branches will be opened by this month-end. Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, told Business Line that the bank opened its first financial inclusion branch at Kairangala village in Dakshina Kannada district on Wednesday. Mr Ananthakrishna, Chairman of the bank, inaugurated it at Kairangala village. The second such branch will be opened at Horanadu village in Chikmagalur district on March 12. Two more branches...

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ICICI Lombard market share highest among private players in April-Dec 2011

ICICI Lombard General Insurance Company had the highest market share in the gross premium underwritten by private non-life insurers in India between April-December 2011. According to segment-wise figures released by the Insurance Regulatory and Development Authority, ICICI Lombard had a market share of 9.07 per cent with a total gross premium underwritten across all segments at Rs 3,812 crore, compared with Rs 3,123 crore in the year-ago period. In terms of market share, the company saw a marginal decline of about 15 basis points. Bajaj Allianz...

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Sidbi lends Rs 100 crore to SKS Microfinance with strings attached

Small Industries Development Bank of India, which has sanctioned a Rs 100-crore term loan to SKS Microfinance, has put a condition that the troubled MFI will have to use the resource for on-lending to the poor outside Andhra Pradesh, and especially in states which are under-served in terms of microfinance penetration. SKS' collection efficiency dropped to 25% in Andhra Pradesh, while collection in the non-Andhra Pradesh portfolio remained at 95% on an average, it said in a report circulated among analysts. At present, Andhra Pradesh accounts for...

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Coming soon: Up to 2 years' sabbatical for women bank staff

Come April, and women employees of public sector banks (PSBs) may be able to get sabbatical of up to two years during their career. The Finance Ministry has asked PSBs to place this proposal before their respective boards for decision and its introduction with effect from April 1, official sources said. This follows the Government agreeing to the Khandelwal Committee's recommendation to introduce sabbatical for women employees of PSBs. The sabbatical benefit will be available only to employees who have put in a minimum of five years of service....

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Diners Club International cards will be accepted at more ATMs, point-of-sale terminals

National Payments Corporation of India (NPCI) has tied up with Discover Financial Services (DFS), a US-based direct banking and payments services company. Under this tie-up, Discover and Diners Club International cards will be accepted at NPCI ATMs and point-of-sale terminals for purchases in India. It also will allow RuPay (the national card payment network in India) cardholders to utilise the Discover, Diners Club International and PULSE networks for international purchases and cash access outside of India, said a press release issued by NPCI. The...

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OBC raises fixed deposit rates by 3.5%

State-owned Oriental Bank of Commerce today raised rates on high value fixed deposits by up to 3.5 per cent on select maturities amidst tight liquidity conditions. Deposit of Rs 15 lakh and Rs 1 crore for 31-45 days maturity period will earn 8.5 per cent interest as against 5 per cent earlier, the bank said in a statement. At the same time, interest rate on 46-90 days fixed deposits have been raised by 3.25 per cent to 9 per cent while those on 91-179 days term deposits have been increased from 8 per cent to 9 per cent. The new rates are effective...

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Federal Bank to open 100 branches

Kerala based Federal Bank on Tuesday announced that it would open 100 new branches and hire 2,000 people. All the 100 branches will be opened at one go on Saturday to take the total network size to 935, executive director of the bank, a Mr Abraham Chacko, told reporters here adding that majority of the branches will be opened outside Kerala. The bank plans to raise the number of branches upto 1,000 by mid—2012, he said, adding that it will also hire 2,000 professionals next fiscal in view of the expansion and to fill the vacancies created by retirement. Mr...

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Citibank launches new package for the emerging affluent

Citibank India on Monday launched a new proposition for the emerging affluent segment, which include salaried professionals and self-employed individuals with an annual income between Rs 3 lakh and Rs 15 lakh. Some of the facilities offered under the ‘Citibanking' proposition include zero charges for cash withdrawal at any ATM in India and overseas; no fees on services such as draft issuance, duplicate statement, funds transfer, stop payment and assistance for account opening for customers relocating overseas. To be eligible for the ‘Citibanking'...

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HDFC Bank launches gold loan scheme

HDFC Bank on Tuesday announced the launch of ‘Bharosa Gold Loan', a product tailored to provide viable finance to the millions of rural customers in India. Speaking on the occasion, Mr Biju Pillai, Senior Executive Vice-President and Business Head, said that the product would offer a loan amount up to 140 per cent of the gold value. The minimum loan amount will be Rs 10,000 for rural customers and Rs 25,000 in other areas. The rate of interest will be 11-14.5 per cent depending on the segment. The bank is looking at targeting women borrowers with...

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Kingfisher account turns substandard for Federal Bank

The Kingfisher Airlines account turned into a substandard asset for Federal Bank in mid-February, according to a top official of the old generation private sector bank. The Kerala-based bank has an exposure of around Rs 90 crore to the struggling airline. According to Mr Abraham Chacko, Executive Director, Federal Bank, the guarantee issued to the airline for procurement of aviation turbine fuel (ATF) has devolved. The Kingfisher account has become a non-performing loan with majority of the public sector banks such as State Bank of India, Punjab...

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ICICI Bank, LIC, Bank of Baroda to launch infra debt fund

The decks have been cleared for the launch of country's first infrastructure debt fund (IDF) under the company route. Private sector lender ICICI Bank and other financial biggies, including Bank of Baroda and Life Insurance Corporation, have decided to come together to set up an IDF as a non-banking finance company (NBFC). A memorandum of understanding will be signed for this purpose in the presence of the Finance Minister, Mr Pranab Mukherjee, here on Monday, official sources said. The Finance Ministry had on June 24 last year issued guidelines,...

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