Indian Overseas Bank mulls new core banking solution on Oracle platform

Government-owned Indian Overseas Bank (IOB) will soon migrate to a new core banking solution (CBS) built on Oracle platform from its own CBS, a senior bank official said Saturday.

"The Reserve Bank of India (RBI) wants reports from the banks in a common format. Most of the banks are on Oracle platform and hence those who are not on that will have to migrate," IOB general manager S. Radhakrishnan told reporters on the sidelines of the bank's press meet here.

The RBI has decided to have an automated data flow (ADF) of reports in prescribed formats straight from the bank's computer systems without any manual intervention.

Radhakrishnan said the central government has asked the banks not on the Oracle platform to migrate to it.

A common request for proposals (RFP) will be floated on behalf of the banks that are not on the Oracle platform soon and the document is being worked out by IDBI Infotech, he said.

"The value of the proposed deal would be a couple of hundred crore of rupees. IOB might have to go for a new CBS," Radhakrishnan remarked.

IOB had developed its CBS in-house on Sybase platform and it had plans of floating a separate subsidiary to vend the solution. With the new development IOB will have to dump its own CBS.

He said the CBS market is dominated by companies like Tata Consultancy Services, Infosys and others.

Similarly a common RFP is also being planned on behalf of public sector banks for acquiring cash dispensers.

Radhakrishnan said the government has divided the country into several clusters and each will have a group of banks on behalf of whom a common RFP for cash dispensers would be issued by a lead bank.

"Majority of the transactions in automatic teller machines (ATM) are cash withdrawals. The other features of an ATM are hardly being used. Hence cash dispensers are better option. The cost will be nearly half of that of an ATM," Radhakrishnan said.

Source: EconomicTimes

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Indian Overseas Bank targets 20 percent business growth in 2012-13

The government-owned Indian Overseas Bank (IOB) hopes to log 20 percent growth in its total business (deposits plus advances) this fiscal while hoping to rein its non performing assets (NPA) at the current level, a top bank official said Saturday.

"This year (2012-13) we are targeting a 20 percent growth in deposits and advances with a focus on profitability. We are targeting a total business of around Rs.385,000 crore to Rs.400,000 crore," chairman and managing director M.Narendra told reporters here while announcing the bank's annual results.

Last fiscal, the bank had logged a total business of Rs.321,707 crore (deposits Rs.178,434 crore and advances Rs.143,273 crore) up from Rs.259,020 crore (deposits Rs.145,229 crore and advances Rs.113,791 crore) posted during 2010-11.

"We will reign in our NPA levels at the current rate," said Narendra when queried about the bank's higher NPA last fiscal and the general economic slowdown.

The bank had logged a gross NPA of Rs.3,920.07 crore and a net NPA of Rs.1,907.44 crore up from Rs.3,089.59 crore and Rs.1,328.42 crore respectively posted during 2010-11.

For the period under review, IOB had earned a total income of Rs.19,578.13 crore and a net profit of Rs.1,050.13 crore as against Rs.13,326.56 crore and Rs.1,072.54 crore posted during 2010-11.

Source: EconomicTimes

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Indian Overseas Bank plans to raise $500 million through Medium Term Notes

Public sector Indian Overseas Bank, plans to raise funds of about $500 million through Medium Term Notes (MTN) this year, a bank official said.

The bank has reported a 21.76 per cent jump in its net profit for the fourth quarter ended March 31 at Rs 528.81 crore.

"In the current year, when the market looks conducive, we will be looking to raise $500 million..," IOB Chairman and Managing Director M Narendra told reporters here.

An MTN is a debt note that usually matures (paid back) in 5-10 years. They can be issued on a fixed or floating coupon basis.

The bank last year had raised similar funds for its overseas operations, Narendra said, adding, businesses in Singapore and Hong Kong have grown in particular.

About their financial results, Narendra said the total income in the January-March quarter rose to Rs 5,415.09 crore as against Rs 3,916.58 crore during the same period of previous fiscal.

The net profit for the year ended March 31 stood at Rs 1,050.13 crore. Total income stood at Rs 19,578.13 crore as against Rs 13,326.56 crore registered during the same period last financial year.

For the full year, the total business grew by 24 per cent to Rs 3,21,707 crore from Rs 2,59,020 crore, he added.

He further said that for this fiscal, the company has planned to achieve total business of Rs 3,85,000 crore to Rs 4,00,000 lakh crore.

"The board of directors have recommended a dividend of 45 per cent for the financial year ending March 31, 2012," Narendra said.

Observing that some sectors like agricultural, SMEs and rural areas offer potential for growth, he said they would tap these areas during this financial year.

The banks' gold loan exposure for fiscal 2011-12 stood at Rs 550 crore, Narendra said, adding, for this year they have set a target of reaching Rs 5,000 crore.

IOB currently has 2,369 branches and has about 1,443 ATM networks across the country. The bank would recruit about 3,500 people in the coming year, Narendra said.

Source: EconomicTimes

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Federal Bank officers to go on strike

The Federal Bank Officers' Association has directed its members to go in for an all India strike on May 7-8. Around 4,000 officers will strike work on these two days. Mr Anthony Johnson, president, and Mr P.V. Mathew, general secretary of the association, said cited the immediate transfer of branch managers who boycotted a bank programme held last Sunday and on May Day, following a call made by the FBOA, as the immediate trigger for the strike.

The FBOA has demanded that the punishment transfers be revoked officers transferred to branches in north India as part of recent disciplinary action, be re-instated.

The association asked the management to stop outsourcing of bank work and ensure justice to officers and staff in the matter of Employees Stock Options (ESOP).

sajeevkumar@thehindu.co.in

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UCO Bank to cut exposure to major corporate accounts

UCO Bank would aim to de-risk its balance sheet by reducing its exposure to big corporate accounts, particularly in the stressed sectors.

According to Mr N.R. Badrinarayanan, Executive Director, more than 60 per cent of the banks' total advances lie in the corporate sector at present, while retail accounts for a miniscule 8.5 per cent.

“We want to de-risk the balance sheet by reducing our exposure to big accounts,” Mr Badrinarayanan said.

Talking about stress in large accounts, he said the restructured assets grew to Rs 7,370 crore during the year, from Rs 6,345 crore last year. “There is stress in some sectors like aviation, steel, power and infrastructure. We want to go slow on these sectors.”

The bank would aim to increase the share of retail in its overall business. “We are planning to shed high cost bulk deposits and CDs, which account for almost 46 per cent of our total deposits at present,” he said.

The focus would be on increasing the share of current account and savings bank account deposits to 27-28 per cent (23 per cent at present) by the end of this fiscal, he added.

Backed by higher interest earnings, UCO Bank posted 12 per cent rise in net profit to Rs 253 crore for the quarter ended March 31, compared with Rs 226 crore in the same period last year.

Net interest income grew by 25 per cent to Rs 1,051 crore.

The bank has proposed a dividend of 30 per cent for 2011-12, which means Rs 3 a share of face value Rs 10. On a sequential basis, however, profits declined by 24 per cent from Rs 333 crore during third quarter ended December 31, 2011.

“The profits would have been more but for higher provisioning for non-performing assets of Rs 379 crore during the fourth quarter, as against Rs 94 crore during same period last year,” said Mr Arun Kaul, Chairman and Managing Director.

Slippages during the quarter came down to Rs 800 crore (Rs 1,100 crore).

Percentage of net non-performing assets to advances went up marginally to 1.90 per cent (1.84 per cent). Net interest margin was at 2.71 per cent (2.35 per cent).

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Punjab & Sind Bank Q4 earnings rise 13%

Public sector lender Punjab & Sind Bank on Saturday reported a 13 per cent increase in net profit at Rs 147.80 crore (Rs 130.27 crore) for the fourth quarter ended March 31.

However, for fiscal 2011-12, the net profit declined by 14 per cent to Rs 451.2 crore (Rs 526.17 crore in 2010-11). This decline has prompted the bank to maintain a dividend payout at Rs 2 a share for 2011-12 as well, bank officials said.

The net profit performance for 2011-12 was weighed down by sluggish growth in credit (six per cent) and additional depreciation in Government securities of Rs 51 crore, said Mr P.K. Anand, Executive Director.

Mr D.P. Singh, Chairman & Managing Director, said he expected the economy to grow faster this fiscal. Riding on increased economic activity, the bank has set a target of 21 per cent growth in overall business this year. While the aim in advances growth has been pegged at 23 per cent, it is looking at 20 per cent growth in deposits.

BLOW FROM KINGFISHER

The debt-laden Kingfisher Airlines has turned a non-performing asset for Punjab & Sind Bank. “The airlines' account has become sub-standard for the bank in the March quarter,” Mr Anand told Business Line.

The bank had an exposure of Rs 50 crore as part of a consortium lending to Kingfisher Airlines.

It has also taken a hit on account of the recent debt recast of state-owned Air India. The estimated impact is about Rs 64 crore spread over eight quarters, bank officials said.

krsrivats@thehindu.co.in

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United Bank Q4 net up 4.2% at Rs 149 cr

United Bank of India (UBI) on Saturday reported a net profit of Rs 149.29 crore for the quarter ended March 2012, up by 4.2 per cent over the corresponding period last year.

For the 2011—12 fiscal, the bank reported a profit of Rs 2,479.23 crore, up by 14.3 per cent over the previous year.

“The rate of growth in profit was slow as 2011—12 was a difficult year with higher slippage in NPA (Non—Performing Assets) and cost of funds,” UBI Chairman and Managing Director, Mr Bhaskar Sen, said.

The net slippage during the year under review was Rs 1,964 crore and loans worth Rs 3,106 crore were restructured.

The total loss by the bank on account of restructuring will be Rs 121 crore.

The Air India account restructuring alone will account for a loss of Rs 51 crore over next five years, bank officials said.

UBI also reported a lower net interest margin of 3 per cent, down from 3.13 per cent.

Mr Sen expects business growth during the current fiscal to be around 20 per cent.

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IOB reports 21.76% jump in Q4 net

Public sector, Indian Overseas Bank, on Saturday reported a 21.76 per cent jump in its net profit for the fourth quarter ending March 31, 2012 at Rs 528.81 crore, compared to the year ago period.

The total income of the city headquartered bank in the January—March quarter rose to Rs 5,415.09 crore as against Rs 3,916.58 crore during the same period of previous year, Mr M Narendra, CMD, IOB, said.

The net profit for the year ending March 31, 2012 stood at Rs 1,050.13 crore. The total income stood at Rs 19,578.13 crore as against Rs 13,326.56 crore registered during the same period of last year.

For the full year, the total business grew by 24 per cent to Rs 3, 21, 707 crore from Rs 2, 59, 020 crore registered last year, he told reporters here.

“The Board of Directors have recommended a dividend of 45 per cent for the financial year ending March 31, 2012,” Mr Narendra said.

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Syndicate Bank net rises to Rs 309 cr; to pay 38% dividend

Syndicate Bank has registered a six per cent rise in net profit at Rs 309.43 crore for the fourth quarter of 2011-12 fiscal compared with Rs 289.29 crore recorded during the corresponding period of the previous fiscal.

The board of directors has recommended a dividend of Rs 3.80 per share (38 per cent) for the year 2011-12, subject to approval of shareholders at the Annual General Meeting.

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Allahabad Bank net jumps 55% to Rs 400 cr

Allahabad Bank has registered a 55 per cent growth in net profit at Rs 400 crore for the fourth quarter ended March 31, 2012, compared with Rs 258 crore during the same period last year.

Net interest income grew 12 per cent to Rs 1,288 crore (Rs 1,151 crore).

Percentage of net non-performing assets to advances went up marginally to 0.98 per cent (0.79 per cent) and that of gross NPAs to advances went up to 1.83 per cent (1.74 per cent).

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Higher interest income boosts Bank of Baroda net 17%

Public sector lender Bank of Baroda posted a 17 per cent growth in net profit for the fourth quarter ended March 31, 2012 at Rs 1,518 crore (Rs 1,294 crore) on higher interest income and lower tax provisions. Net interest income (NII) during the quarter rose by a marginal 3 per cent to Rs 2,797 crore (Rs 2,714 crore) on higher provisions (excluding tax).

Provisions and contingencies increased by 43 per cent to Rs 844 crore while for the full year ended March 31, 2012 it rose to 92 per cent to Rs 2,555 crore.

However, tax provisions for the quarter were lower at – Rs 322 crore (minus Rs 322 crore) on receipt of refunds of about Rs 400 crore

The bank's net profit for the year rose 18 per cent to Rs 5,007 crore (Rs 4,242 crore). The NII was at Rs 10,317 crore. Other income — including fees, commissions, foreign exchange and treasury transactions — grew to Rs 898 crore (Rs 834 crore).

Net NPAs were at 0.54 per cent as on March 31, 2012.

“Net interest margins (NIMs) for the quarter fell to 3.44 per cent on migration from savings to term deposits,” Mr M.D. Mallya, Chairman and Managing Director, said. For the full year, the NIM was at 3.51 per cent.

The CASA (current and savings account) ratio dropped to 33 per cent on higher retail term deposits. The capital adequacy ratio as on March 31, 2012 was at 14.67 per cent as per Basel II norms with tier 1 capital at 10.83 per cent. Total restructured assets rose to Rs 8,500 crore, dominated by the aviation (Rs 2,400 crore) and power sectors and SMEs.

On the Basel III guidelines issued by the RBI, Mr Rajesh Mahajan, General Manager, Risk Management, said: “They are too stringent for the Indian banking system”.

The board also recommended a dividend of Rs 17 per share on a face value of Rs 10. The bank's share ended lower by 6 per cent at Rs 687.05 on the Bombay Stock Exchange.

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Corp Bank registers 1.71% rise in Q4 net, declares 205% dividend

Corporation Bank registered growth of 1.71 per cent in net profit during the fourth quarter of 2011-12.

The bank recorded a net profit of Rs 351.26 crore in Q4, against Rs 345.34 crore in the corresponding period the previous fiscal.

Speaking to Business Line from Mumbai, Mr Ajai Kumar, Chairman and Managing Director of Corporation Bank, said that credit demand was weak in the fourth quarter. “We could have shown growth, but that would have been at a higher cost. I have kept the advances growth that was comfortable for the industry,” he said.

The net profit of the bank stood at Rs 1,506.04 crore (Rs 1,413.27 crore) for 2011-12.

Stating that slippages have been contained in the last quarter, he said that, compared to the December figures, slippages have come down in the March quarter.

Slippages contained

“So we have been able to close it about 1.26 per cent of the gross and 0.87 per cent of net NPAs. Compared to the figure of 0.46 per cent last March, it is higher.

But in December, it was 0.97 per cent,” he said.

Compared with last year's recovery of about Rs 627.33 crore, the bank has done Rs 758.6 crore of cash recovery and upgradation.

To a query on the future outlook, he said the bank has strategic plans for expansion in potential centres in rural and semi-urban areas. In centres where the population is below one lakh, the bank need not wait for the RBI's approval to open branches.

During 2011-12, the total deposits of the bank stood at Rs1,36,142 crore (Rs 1,16,748 crore) and total advances at Rs 1,00,469 crore (Rs 86,850 crore).

DIVIDEND

The board of Corporation Bank has announced a dividend of 205 per cent to its shareholders. The bank informed the stock exchanges that the board of directors of the bank, at its meeting on May 4, has recommended a dividend of 205 per cent. The dividend will be Rs 20.50 per share of the face value of Rs 10 each.

On Friday, the scrip of Corporation Bank closed at Rs 385.30 on the BSE, down 3.70 per cent against the previous closing of Rs 400.10.

vinayakaj@thehindu.co.in

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Bank of India cuts home loan rates

Bank of India has reduced interest rates on home loans. The new rates will be 10.50 per cent for loans up to Rs 30 lakhs, 10.75 per cent for over Rs 30 lakh but less than Rs 75 lakh and 11.25 per cent for Rs 75 lakh and above.

The home loan rate is a floating rate linked to bank’s base rate. The Base Rate of BOI is 10.50 per cent with effect from May 1, 2012, a bank press release said.

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Ratnakar Bank implements Finacle

Ratnakar Bank announced that it has deployed the Finacle core banking solution.

The bank aims to grow its number of branches to 125 in the next three months and to about 300 over the next three years. Ratnakar Bank also seeks new business opportunities to launch several new products across various verticals. To fulfil this objective and gain a competitive edge, the bank intends to leverage best-in-class banking practices on a new-age technology platform.

It will also enable the bank to take a 360-degree view of customer relationships which, in turn, would improve customer experience and enhance loyalty. This alliance will also facilitate integration of all the banking channels, including online, mobile and branch offices.

Speaking on the selection, Mr Vishwavir Ahuja, Managing Director and CEO, Ratnakar Bank, said: “In the transformation of the bank to a vibrant new-age entity, technology will play a critical role. Since we have the least legacy, we believe that bringing in the latest technology will become one of our key differentiators.”

venkatesh.ganesh@thehindu.co.in

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No minimum balance required for SBI savings accounts

The State Bank of India has asked its branches to remove the minimum balance stipulation and refund charges that were collected for failure to maintain the same.

The circular issued on April 25 said the bank has decided to waive the requirement of maintenance of minimum balance for all types of savings bank accounts with immediate effect.

Accordingly, no minimum balance charges would be levied every quarter henceforth, the circular addressed to chief general managers of all SBI circles said.

Branches were advised to use approved publicity material to the effect and to have them displayed prominently on branch premises. In a preceding circular sent only the day before, the bank ordered refund of charges for non-maintenance of minimum balance ‘of personal segment' customers.

This was aimed at setting right an earlier order that sought to apply charges for non-maintenance of minimum balances on all eligible accounts for the quarter ended March 31, 2012.

REFUND ORDERED

The circular said that “the competent authority has since approved refund of minimum balance charges recovered, if any, in respect of non-maintenance of minimum balance for the quarter.” A senior official of SBI said, “We are doing this to help improve our customer base. It has been in the offing for some time.”

Banks, including SBI, fixed a higher minimum savings balance for customers in order to help compensate for services they provided. The waiver of minimum balance therefore represents a major departure from the bank's policy. The official did not elaborate on why the change was done.

vinson.kurian@thehindu.co.in

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Oriental Bank plans more branches in Karnataka, Kerala this fiscal

Oriental Bank of Commerce plans to increase its branch network in Karnataka and Kerala in this fiscal.

“We plan to open four branches in Karnataka and two in Kerala, as these states offer good business opportunities,” Mr Ch.S.S. Mallikarjuna Rao, Regional Head, Oriental Bank of Commerce, told Business Line.

The bank currently has 53 branches in these two states.

The bank plans to concentrate on the retail segment — both deposits and advances — this year, he said.

Karnataka has a larger share in terms of branch network with 37 branches, and the bank has 16 branches in Kerala.

About 60-70 per cent of the bank's business in Karnataka comes from Bangalore, “and that is the reason we have 19 branches in the city”, said Mr Rao.

The city offers a good potential for small and medium enterprises (SME) advances.

“We are planning to have SME segment as a thrust area,” he added.

anju@thehindu.co.in

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Ratnakar Bank ties up with Infosys for core banking product

Private sector lender Ratnakar Bank announced a partnership with IT firm Infosys. The bank plans to revamp its products and services by deploying Finacle, a core banking product from Infosys.

The deal will see Ratnakar Bank spend Rs 50 crore on this system over the next five years.

Mr Vishwavir Ahuja, Managing Director and CEO of the bank, said, “The bank has been in the transformation mode for the past 18 months and wants technology to be the core driver for banking. Finacle's in-built CRM (Customer relationship management) will help us connect to customers.”

The business growth of the bank has trebled in the past 18 months, while the employee strength doubled to 1,400, Mr. Ahuja added. The bank's branch network increased from 80 to 150 in the past two years and the bank aims to add about 50 more. “Till last year, we had no ATM presence and currently outsource about 60. We plan to add 150 by 2013,” Mr Ahuja said. The bank had also launched its debit cards recently.

beena.parmar@thehindu.co.in

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Banks must maintain 7% core capital: RBI

Indian banks have to maintain Tier I capital, or core capital, of at least 7% of their risk weighted assets on an ongoing basis, the Reserve Bank of India said in its final guidelines on Basel III capital regulations on Wednesday.

Under the existing capital adequacy guidelines based on the Basel II framework, banks are required to maintain Tier I capital of at least 6% of their risk weighted assets.

The total capital ratio, including Tier I and Tier II, must be at least 9%, unchanged from the current requirement, the RBI said in a statement, compared with the Basel III minimum requirement of 8%.

The guidelines are effective from January 1, 2013 in a phased manner and will be will be fully implemented on March 31, 2018.

For the fiscal year ending March 31, 2013, banks will have to disclose capital ratios computed under the existing guidelines, as well as those computed under the Basel III framework, the central bank said.

Source: Business Standard

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Federal Bank officers strike work for a day

The All-India Bank Officers' Confederation (AIBOC) extended its support to the cause of officers of Federal Bank who struck work on Wednesday.

The strike was against transfer of a group of branch managers and officers in the bank who didn't attend the ‘Federal Ambassadors' meets.

HOLIDAY MEETS

These meets are held on Sundays and holidays, according to Mr Abraham Shaji John, State Secretary, AIBOC. The transfers were ordered to upcountry places and relieving of these officers was effected within two hours of it.

Officer and employee organisations have been requesting the management not to insist on official work on Sundays and holidays.

The striking officers and activists of AIBOC held demonstrations in front of offices of Federal Bank in several important centres in the State.

They have warned of a serve agitation if the transfer orders were not cancelled and cordial industrial relation climate restored in the bank.

Mr Abraham Shaji John, Mr P. V. Mohanan and Mr K. D. Khera, advisor to AIBOC national committee, addressed the gatherings.

Mr P. V. Mathew, general secretary, Federal Bank Officers Association; Mr C. Rajkumar, general secretary, Associate Banks Officers Association-State Bank of Travancore; and Mr N. I. Thomas, also participated.

vinson@thehindu.co.in

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Karnataka Bank to add one million new clients

Karnataka Bank will add one million new clients during the current fiscal. Mr P. Jayarama Bhat, Managing Director of the bank, said this at the annual business conference of the regional heads of the bank in Mangalore on Wednesday.

He said the bank's priority will be on retail segment with focus on CASA (current account savings account) deposits by adding one million new clients. It will also focus on retail lending by concentrating on agriculture advances, MSME (micro, small, medium enterprises) advances, etc.

He advised the regional heads to closely monitor the credit portfolio in view of volatility in the market to maintain the health of advances and to avoid any slippage to NPA.

Mr Bhat said the bank has envisaged business growth of 25 per cent during 2012-13, and aims to reach a business turnover of Rs 65,000 crore.

Quoting Mr Bhat, a bank release said here that the bank has planned to open 50 new branches and 100 ATMs during the fiscal. The bank is also committed to implementing the financial inclusion plan by opening new branches in the allocated villages.

He observed that the global economy has not gained the required momentum yet. To give an impetus to investment activity, the RBI has changed the repo and MSF (marginal standing facility) rates. These measures have given the required liquidity to the system and this has resulted in lowering of lending rates, he said.

The uptick in GDP growth during 2012-13 is expected to be driven by robust growth in the services sector, he added.

vinayakaj@thehindu.co.in

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Corp Bank to sponsor children for golf training

Corporation Bank will sponsor golf training for three children from Mangalore.

Mr Ajai Kumar, Chairman and Managing Director of the bank, said this while speaking at the valedictory session of the summer golf coaching camp for children at Pilikula in Mangalore. He handed over golf kits to 54 children identified at the camp.

A bank release said here that three children — Master Chen, Miss Aishwarya and Master Yash — were identified as young talents. Mr Ajai Kumar said that Mangalore is an ideal place for germination of golfers as it is a place of entrepreneurs. Three weeks of golf training has inculcated a lot of confidence among children, he said.

He also gave away prizes to the winners of the tournament held during the camp.

Mr Ashwani Kumar and Mr Amar Lal Daultani, Executive Directors of the bank, who spoke on the occasion, gave away certificates of participation to children who attended the training.

Corporation Bank, in association with Pilikula Golf Club, had organised the summer golf coaching camp for children from April 9 to May 1. A new Web site of Pilikula Golf Club was launched on the occasion.

vinayakaj@thehindu.co.in

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StanChart's India biz subdued amid overall positive growth

There appears to be no let-up yet for Standard Chartered's India business, as the company said in an otherwise optimistic trading update on Wednesday that the market there remained subdued.

While Standard Chartered experienced double-digit income growth in Hong Kong, Malaysia, Indonesia, China, the Americas and in Europe in the first quarter of the year, its business in India remained impacted by “subdued domestic sentiment”. While there was no deterioration in the Indian market, income for the quarter was flat year on year, a spokesperson said.

Third largest

In February, Standard Chartered's Indian operations reported a pre-tax profit of $804 million for the full year 2011, a 33 per cent drop against the same period the year before, as income fell by 11 per cent and loan impairment rose by 42 per cent.

From being the largest contributor to Standard Chartered group profits India dropped to being the third largest. Despite the weakness, the group says its commitment to India remains unchanged.

“We see its long-term outlook as positive” said the spokesperson. “We will continue to invest in India”.

Overall, the group said it experienced “high single-digit income growth” in the first quarter, with growth occurring both in its wholesale banking and consumer banking divisions.

However, group performance was impacted by the strength of the dollar against Asian currencies. Shares of Standard Chartered were down 3.8 per cent in London on Wednesday afternoon

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Punjab & Sind Bank cuts lending rate by 0.25%

State-owned Punjab & Sind Bank (PSB) today slashed its lending rate by 0.25%, in line with other lenders.

The bank has revised its base rate by 0.25% to 10.50% from from 10.75% per annum, PSB said in a BSE filing.

Base rate is the benchmark rate below which a bank cannot lend. With the reduction in the base rate, all kinds of loans would be cheaper by at least 0.25%.

The new rate would be effective from May 1.

Last week, PSB had trimmed its fixed deposit rates across various maturities in line with the market trend.

Following the Reserve Bank's decision to cut key interest rate by 0.5% to 8% in its annual credit policy last month, several banks including ICICI Bank, IDBI Bank and Punjab National Bank have reduced both lending and deposit rates.

Source: Business Standard

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IRDA launches info Web site

The Insurance Regulatory and Development Authority has floated a Web site to educate general public and insurance policyholders on various aspects of insurance.

“The Web site is an attempt to reach out to all to give certain basic generic information on the subjects in order that consumers begin to think and seek answers to questions such as what they need to buy,’’ Mr J. Hari Narayan, Chairman, IRDA, said in a circular.

The portal — www.policyholder.gov.in — is live now and feedback and suggestions on the initiative can be sent to the regulator.

The creation of the Web site is part of a series of initiatives under the ‘Bima Bemisaal’ for creating awareness about insurance.

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All set for Nabard transition as Bill in final stages of passing

The National Bank for Agriculture and Rural Development (Amendment) Bill, 2012, has entered the final stages of being legislated. The token 1 per cent stake of capital that the Reserve Bank of India holds in Nabard is sought to be vested in the centre, completing the transition.

The Bill states that “the capital…which has been subscribed by the Reserve Bank… shall…stand transferred to, and vested in, the Central Government.The Reserve Bank shall be given…in cash, for transfer to, and vesting in the Central Government of the capital…. an amount equal to the face value…at Rs 20 crore.”

The central bank had sold its majority stake to the centre in 2010. The latter now owns 99 per cent in Nabard. The 2012 Bill will help bring about the complete transfer. Direct lending will replace the function of refinance, until now synonymous with Nabard, as the new theme song.

“Nabard…may provide by way of refinance, loans and advances…to state cooperative banks…. primary agricultural credit societies…,” the Bill says.

NEW BENEFICIARIES

It may provide loans and advances also....“to any financial institution or to any class of financial institutions…approved by the board…” There is also a notable expansion of the range of entrepreneurial activities the apex agricultural bank can support, including in the SME sector. Agro-industries, small and medium enterprises and handlooms are additions to the list of beneficiaries.

The posts of chairman and managing director are being merged into a single chairman and managing director.

Mr Jose T. Abraham, vice-president, All-India Nabard Employees Association, said all these will push Nabard to a faster path towards commercialisation.

DIRECT LENDING

Agriculture finance and rural development have traditionally been a central bank function, carried out through Nabard. The 2012 Nabard bill will sever the umbilical cord of the Reserve Bank with development finance at the ground level.

Direct lending has been strongly opposed by cooperatives all over the country, Mr Abraham told Business Line.

vinson@thehindu.co.in

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HSBC down-sizing office space in Coimbatore

Hongkong and Shanghai Banking Corporation (HSBC), which is in the centre of a staff down-sizing spree globally to cut costs, apparently is down-sizing its office space as well.

The bank, which has a branch in the posh Race Course area in Coimbatore, today surrendered about 50 per cent of its real estate space. It is not clear whether the bank has reduced its staff strength in Coimbatore.

According to Mr Rajesh B. Lund, Partner, Srivari Property Developers, Coimbatore, in whose building the HSBC branch is located, the bank today vacated 4,375 sq.ft. space out of 8,750 sq.ft. that it was occupying.

The bank has been his tenant ever since it opened the Coimbatore branch about a decade back.

He said the area under occupancy consisted of mezzanine floor and the first floor. Now, the bank has vacated 50 per cent of the space it had taken on lease.

He, however, was not aware of any down-sizing of staff strength in the Race Course branch.

It was reported recently that HSBC, which has a sizeable retail presence in India, is planning to lay-off over 300 employees.

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RBI plans committee on fixed interest rate products

The RBI Deputy Governor, Mr Anand Sinha, today said the central bank plans to set up a working group committee to introduce more long-term fixed interest rate loan products.

"A variety of fixed interest rate loan products are imperative considering that currently the banks offer fixed rates on deposits and mostly floating rates on home loans, which exposes borrowers to uncertain rate movements," said Mr Sinha.

He said this as he inaugurated an Assocham industry interactive session on banking sector held in Mumbai today.

"We have taken an initiative by setting up a Financial Sector Legislative Reforms Commission (FSLRC) which seeks to rewrite and streamline the financial sector laws, rules and regulations to bring them in harmony with India’s fast growing financial sector," added Mr Sinha.

Mr Sinha further said, we need to be proactive in credit monitoring and restructuring is significant to manage advanced portfolio.

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Vijaya Bank Q4 net trebles onlower operating expenses

Vijaya Bank's net profit grew three-fold during the fourth quarter of the last fiscal, on the back of controlled operating expenses.

The bank's net profit stood at Rs 180.99 crore compared with Rs 54.23 crore in the corresponding quarter the previous fiscal. Operating expenses were Rs 367.2 crore (Rs 511.26 crore). Consequently, the bank's operating profits more than doubled to Rs 263.48 crore (Rs 109.96 crore).

“Our operating costs have come down, and overall interest income has increased. The non-interest income has also increased compared with the year-ago period,” Mr H.S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, said while announcing the results.

The growth in net profits is despite a marginal growth of 3 per cent in net interest income during the quarter.

However, with some large accounts being restructured, Vijaya Bank saw a spike in non-performing assets during the period. Gross NPAs grew to 2.93 per cent (2.56 per cent), while net NPAs increased to 1.72 per cent (1.52 per cent).

Streamlining recovery

Mr Kamath pointed out that the bank added “only Rs 51 crore to the closing gross NPA numbers during the quarter compared with the third quarter”. In the quarter ended December 31, 2011, the bank's gross NPAs stood at Rs 1,667 crore.

“This indicates our recovery performance in Q4 has been good, and we will continue recovery on a war-footing this year too. We hope to streamline and strengthen our recovery mechanism,” he said.

For the fiscal ended March 31, 2012, the bank saw a 11 per cent increase in net profit to Rs 581 crore (Rs 523.82 crore), on the back of a 37 per cent growth in net interest income at Rs 7,988 crore.

anju@thehindu.co.in

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Bank of India net jumps 2-fold; to pay 70% dividend

Bank of India (BoI) has reported a near two-fold rise in net profit to Rs 952.73 crore for the fourth quarter ended March 31, 2012.

The bank had posted a net profit of Rs 493.64 crore in the year-ago period.

Total income rose to Rs 8,777.73 crore during January-March period of 2011-12 from Rs 7,130 crore during the corresponding period of the previous fiscal, BoI said in a filing to the BSE.

The bank has recommended a dividend of 70 per cent or Rs 7 per share for 2011-12.

For the financial year ended March 31, 2012, BoI posted a net profit of Rs 2,677.52 crore, up 7.58 per cent compared with Rs 2,488.7 crore in the previous fiscal.

Total income during the fiscal under review rose to Rs 31,801.84 crore from Rs 24,393.5 crore in 2010-11.

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Oriental Bank net dips 20.6% in Q4

Oriental Bank of Commerce has reported a 20.6 per cent decline in net profit for the fourth quarter ended March 31, 2012 at Rs 264.90 crore (Rs 333.66 crore).

The bank has recorded a 29.23 per cent increase in total income for the quarter under review at Rs 4,564.50 crore (Rs 3,532.13 crore).

For the year ended March 31, 2012, OBC recorded a 24 per cent decline in net profit at Rs 1,141.56 crore (Rs 1,502.87 crore), according to a filing with the Bombay Stock Exchange.

Total income during the period increased 30.71 per cent to Rs 17,055.13 crore (Rs 13,047.89 crore)

The results had an impact on the counter with the scrip shedding Rs 12.70 or 5.26 per cent to Rs 228.90 with a trading volume of 3.40 lakh shares on the BSE an hour before the close of trading.

The two-week average trading volume in the counter was around 24,000 shares.

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Syndicate Bank launches jewel loan mela

Syndicate Bank has launched a ‘Jewel Loan Maha Mela’ to extend loans on the pledge of gold ornaments.

“The loans will carry an interest rate of base rate plus 1.25 pc interest, which works out to 11.75 per cent as of now,’’ Mr T. R. Viswanatham Nair, General Manager, Syndicate Bank, Hyderabad Region, told newspersons here on Monday.

Syndicate Bank is targeting disbursal of Rs 100 crore of loans during the mela period from May 1, 2012, to September 30, 2012.

“We have also made products suitable for all categories of customers, besides increasing the finance to Rs 1,900 per gram,’’ Mr Nair said.

The Bangalore-based bank will also focus more on the housing loans segment. It has waived the provision for surety/guarantor and is offering loans at 10 per cent interest for loans below Rs 20 lakh. For loans up to Rs 25 lakh, the interest rate has been fixed at 10.50 per cent with effect from May 1, 2012, he added.

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Union Bank to open 300 branches this fiscal

Union Bank of India will open around 300 branches and recruit more people this fiscal.

Speaking to presspersons on the sidelines of a function to inaugurate the new regional office of the bank here on Monday, Mr D. Sarkar, Chairman and Managing Director, said that the bank has nearly 3,300 branches across the country.

“We are planning to open 300 branches this fiscal,” he said.

Recruitment

With the expansion plans on the way, recruitment will also follow. The bank may need to recruit around 4,000 people.

Stating that it is a rough estimation, he said the requirement includes officers, clerical staff and sub-staff.

Terming the recruitment as an ongoing process, Mr Sarkar said nearly 2,500 officers are in the process of joining the bank this fiscal.

Union Bank, which has around 3,850 ATMs in the country, will increase it to nearly 5,000 ATMs by the end of the current fiscal.

vinayakaj@thehindu.co.in

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Indian Bank, IOB cut lending rates by 0.25%

Indian Bank and Indian Overseas Bank (IOB) slashed lending rates by 0.25 per cent, in line with other lenders.

The separate announcements come a week after RBI reduced policy rate by 0.5 per cent.

The bank decided to reduce its base rate by 0.25 per cent from the existing 10.75 per cent to 10.50 per cent per annum, Indian Bank said in a filing on the BSE.

Similarly, IOB has also cut the base rate to 10.50 per cent from 10.75 per cent.

Base rate is the benchmark rate below which a bank cannot lend. With the reduction in the base rate all kinds of loans would be cheaper by at least 0.25 per cent.

The new rates of both the banks would be effective from May 1.

Another public sector lender Punjab and Sind Bank trimmed fixed deposit rates across various maturities in line with the market trend.

The new rates would be effective from April 28, 2012.

The peak fixed deposit rate of the bank has come down to 9.25 per cent from 9.75 per cent earlier.

Following the Reserve Bank's decision to cut key interest rate by 0.5 per cent to 8 per cent in its annual credit policy last week, several banks including ICICI Bank, IDBI Bank and Punjab National Bank have reduced both lending and deposit rates.

Earlier this week, State Bank of India (SBI) along with five more banks announced revision in their interest rates.

SBI trimmed interest rates on fixed deposits by up to 1 per cent across various maturities. There was upward revision of 0.25 per cent in case of fixed deposits of 180 days.

Source: Financial Express

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