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Saturday, June 9, 2012

RBI to infuse Rs 12k cr next week

The Reserve Bank of India (RBI) today announced an auction under open market operations (OMOs) to purchase Rs 12,000 crore of government bonds on Tuesday. No OMOs were conducted this week.

RBI must have come up with the OMO keeping in mind the pressure on liquidity conditions ahead of advance tax payments on June 15,” said a bond dealer with a public sector bank. According to the issuance calendar, bond sale auctions are not scheduled next week.

The government today raised Rs 7,000 crore under the new 10-year benchmark bond at a coupon rate of 8.15 per cent. Issuances in the previous benchmark carrying a coupon rate of 8.79 per cent had reached Rs 83,000 crore and the market was already using the bond maturing in 2024 as the next best alternative.

RBI also auctioned Rs 3,000-crore worth of bonds maturing in 2018, another Rs 3,000-crore worth of bonds maturing in 2030 and Rs 2,000-crore worth of bonds maturing in 2036.

Meanwhile, the rupee snapped a three-day winning streak against the dollar due to consistent buying of the greenback by oil companies and foreign investors. The currency closed at 55.46 per dollar, one per cent lower than the previous day’s close. However, as compared to last Friday, the rupee appreciated 0.2 per cent, in its first weekly gain of the current financial year.

“Yesterday’s Fed (US Federal Reserve) comments helped the dollar gain against its peers and, consequently, contributed to the rupee depreciation for the day," said India Forex Advisors in a note. The safe-haven currency strengthened after Fed chairman Ben Bernanke, in a speech yesterday, gave no hint of a fresh stimulus. The dollar index, which measures its performance against a basket of six major currencies, was at 82.78 today from 82.05 a day before.

Fading hopes of a third round of quantitative easing led to investors shedding risky assets today. Foreign institutional investors sold Rs 1,577-crore worth of shares and concluded with a net investment of just about Rs 200 crore in the Indian equity markets today, according to data from the Bombay Stock Exchange.

Dealers said dollar supply from foreign banks helped the rupee touch an intra-day high of 55.14 against the dollar.

Source: Business Standard
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Delayed reforms: SEBI chief blasts govt

Anguished over delay in key reforms for "years and years", SEBI Chairman U K Sinha today said there is an urgency to revive investor sentiment and arrest the faltering economic growth.

"Some of the reforms, which have long been pending and one example being pension reforms... it has been years and years that some of these reforms...are yet to come through," Sinha said at the Skoch Summit here.

Listing out the steps that are needed urgently, he said, "We all know what happened to FDI in retail, the pension Bill, and the pension reforms are yet another example."

The pension reforms bill was deferred by the Cabinet yesterday in the wake of opposition from UPA ally, Trinamool Congress.

Calling for an urgent need to revive investor sentiment and economic growth, he said, "... that is something all of us have to counter very seriously, that how long can we go on deferring this... We cannot become complacent about policy making and implementation domestically."

The country can still tide over the growth deceleration if some of the urgent reform measures are taken and the issues plaguing the implementation resolved.

Sinha said, "If we start making some progress on these things (reforms), then in spite of the forecast about our economy coming down from the higher levels of 2007-08; if these policies change...start happening, we can again come to levels which are commendable in comparison to any part of the world. (But) those changes have to take place."

The SEBI chief said there is no reason why even private parties are not able to implement their projects on time. "I am bewildered that if an agreement has been signed between a raw material supplier and a utility, why it is not being honoured."

The GDP growth hit a nine-year low in FY 2012 at 6.5 per cent due to a number of reasons, which many cite as policy inaction.

Most of the foreign banks and financial services majors like Goldman Sachs, Morgan Stanley, Citi and HSBC have lowered growth prospects to a low of 5.8-6.3 per cent for the current fiscal.

According to a CMIE estimate, as many as Rs 5 trillion worth of projects, mostly in the power and steel sectors, and running into 500 projects, were stalled in FY 2012 due for want of mandatory clearances, fuel, raw material linkages.

On the insurance front, he said the proportion of foreign investments is not increasing.

Last week the government had also decided against increasing the FDI cap in the insurance sector which is currently pegged at 26 percent.

On the tightening of the IPO listing norms, Sinha said the volatility which used to happen on the opening day has come down since the new norms were implemented.

"We've started this concept of call-auction in the pre- open market, (earlier there was high volatility on the listing day) after which there have been four IPOs, and our feedback is that all four of them have been free from any such managed volatility and the numbers have come down substantially," he said.

Later talking to reporters on the sidelines, the Sebi Chairman said FIIs want to understand whether there is a slowdown in policy-making and growth.

On the new consent order norms, he said, "We have highlighted how particular cases are to be treated under the new Consent guidelines."

Last month, the Sebi had revamped the widely criticised consent mechanism, which earlier used to give a lot of leeway to corporates.

Source: Financial Express
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RBI to banks on unique ID codes

Banks must assign unique customer identification codes to their new as well as existing clients by May 31, 2013, the Reserve Bank of India said in a notification on Friday. The unique identification code will help in stronger enforcement of know-your-customer norms, and aid banks in identifying customers, tracking the facilities availed, etc.

Source: Business Standard
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RRB personnel observe 1-day strike

Close to 74,000 officers and employees working at 16,914 branches of 82 Regional Rural Banks (RRBs) in 635 districts of the country observed a one-day strike on Friday.

All the branches and offices of the RRBs remained closed, according to a press statement issued by the All-India Regional Rural Bank Employees’ Association (AIRRBEA).

Some of the key demands of these employees included parity of pension, formation of the National Rural Bank of India, and regularisation and absorption of part-time workers in RRBs.

According to Mr Dilip Kumar Mukherjee, Secretary-General, All-India Regional Rural Bank Employees’ Association (AIRRBEA), the employees have also been demanding the withdrawal of the Government order on HR policy and representation of workmen and officers on the board of management.
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Corp Bank to hold doctors' meet

Corporation Bank will conduct a doctors' meet in Mangalore on June 9.

A press release said here that Mr Ashwani Kumar, executive director of the bank, will preside over the function.

Dr K. Jayaprakash Shetty, president of Indian Medical Association, Mangalore; Dr Muralee Mohan C, president of Indian Dental Association, Mangalore; and Prof M. Shantharam Shetty, Vice-Chancellor of Nitte University, will be the guests of honour.

The release said that the bank's ‘Corp Doctor Plus' scheme is specially designed to meet the credit requirements of the medical fraternity.
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IRDA seeks half-yearly reports on trade credit insurance

The Insurance Regulatory and Development Authority has directed the non-life insurance companies to submit half-yearly and yearly reports on trade credit insurance business.

``With a view to maintain consistency in reporting and better analysis of the credit insurance portfolio, the Authority has devised certain forms for reporting under credit insurance,’’ Mr Randip Singh Jagpal, Joint Director, IRDA said in a circular issued on Thursday.

All the non-life insurers should submit half-yearly reports for the financial year 2011-12 within 15 days, the circular added.
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Vijaya Bank’s special deposit scheme

Vijaya Bank has launched a 100-day campaign to augment its retail business and customer acquisition.

A press release from the bank said the campaign started on June 1 and will end on September 8. During this period, the bank is offering a V-Vriddhi Term Deposit, a 400-day limited period term deposit scheme, at 9.75 per cent per annum.

The bank is also offering a V-Vriddhi Recurring Deposit product with a fixed maturity at a higher rate of interest, during the campaign period. Besides, vehicle loan customers will get a 10-basis points concession, while home loan buyers can avail of loans at a 20-basis points concession, and waiver of processing fees during the campaign period.

Home loans start at 10.55 per cent, while vehicle loans start at 11.20 per cent.

The campaign also offers a savings bank product with 12 benefits, added the release.
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Friday, June 8, 2012

ICICI Bank, Yes Bank ink deal with Exim Bank of Malaysia

India's private lenders ICICI Bank and Yes Bank signed a collaborative deal with the Export -Import Bank of Malaysia Berhad (Exim Bank) to enhance trade, especially for palm oil, between the two countries.

Through this deal, Exim Bank, a development financial institution wholly-owned by Malaysia's Ministry of Finance, will provide credit lines to ICICI Bank and Yes Bank to facilitate imports of goods from the South-East Asian nation.

"We have entered into a USD 100 million master facility agreement in order to facilitate ongoing trade and finance transactions between Yes Bank and its importing customers. This facility will play an active role towards further augmenting trade flows in the Indo-Malaysia corridor by arranging overseas trade credit for Indian importers," Yes Bank said in a statement here.

Through the tie-up, Yes Bank and Exim Bank will be able to leverage their combined expertise, local knowledge and corporate relationships to open up trade finance opportunities for their respective clients. The facility will be available by means of line of credit refinancing, buyers credit financing, import collection and/or open account transaction financing for Malaysia based trade transactions.

"This alliance will further strengthen our commitment towards the Indo-Malaysia business corridor. Bilateral trade in this jurisdiction has grown to USD 10 billion in 2010-11 and is expected to significantly increase with the signing of the Comprehensive Economic Cooperation Agreement (CECA) last year," Yes Bank Managing Director and CEO Rana Kapoor said.

This is a first-of-its-kind trade finance facility extended by the Malaysian Exim Bank to banks in India, which will further augment the trade and investment ties between the two countries, he said.

Source: EconomicTimes
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K C Chakrabarty may get 2-yr extension as RBI dy governor

The government is likely to extend K C Chakrabarty’s tenure as deputy governor of the Reserve Bank of India (RBI) by two years.

Chakrabarty, appointed deputy governor in June 2009, was given a three-year term that ends on June 14.

The other three deputy governors are Subir Gokarn, Anand Sinha and H R Khan.

A deputy governor in the central bank can be appointed for five years and the retirement age is 62 — the age limit is 60 for other RBI officials. A candidate has to be younger than 60 to be eligible. An exception to this rule was made during the re-appointment of Shyamala Gopinath in 2009.

Chakrabarty, who was chairman and managing director of state-run lenders Punjab National Bank and Indian Bank before joining RBI, will turn 60 by the end of the month.

Of the four deputy governors, traditionally one comes from the banking fraternity, while one is an economist. The other two are promoted from within. Chakrabarty is the most senior deputy governor and looks after banking supervision, customer service, rural planning, currency management and human resources, among others.

As a deputy governor, Chakrabarty spearheaded the agenda of the government and RBI of fostering inclusive growth by encouraging banks to expedite financial inclusion. He is also known as a customer-friendly regulator, and was instrumental in abolishing the prepayment penalty on floating rate home loans, which banks used to levy on customers. He constituted the high-profile Damodaran committee on customer service and is in the process of implementing its recommendations.

The outspoken deputy governor had a brush with controversy when the media reported his differences of opinion on monetary policy. This landed him in trouble as most of his portfolios were taken away in August 2010. However, after a mere four months, he got these back with some additions, such as the department of banking supervision.

Source: Business Standard
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SBI cuts rate on short-term deposits

State Bank of India has cut interest rates on short-term retail deposits by 0.25 per cent.

This move suggests that the bank is flush with liquidity. It is also a pointer to the fact that the softer interest rate regime, heralded by the central bank through a 50 basis points cut in the repo rate in April, is getting entrenched.

After the RBI cut the interest rate at which banks borrow funds from it (repo rate) on April 17, SBI had cut the retail term deposit rates across various tenors by 25 to 100 basis points. A basis point is one hundredth of a percentage point.

Following the latest round of interest rate cut, deposits in the first three maturity buckets — 7 to 90 days; 91 to 179 days; and 180 days — will earn a return of 7 per cent (7.25 per cent earlier). The new interest rate for deposits in the 181-240-day maturity bucket will be 7.25 per cent (7.50 per cent).
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Now, public sector banks on ‘USB' drive

Opening USBs or ultra-small branches is the new mantra for public sector bankers in the country.

Over 900 villages, or about 2.5 per cent of the villages, where public sector banks have implemented financial inclusion programme have USBs. For the past few years, banks have been trying to reach un-banked villages as part of a regulatory mandate.

The roadmap to financial inclusion had envisaged covering 74,414 villages with population above 2,000 by March 31, 2012. Recently, the Reserve Bank of India said that banks have covered 74,199 villages or 99.7 per cent of the target. As part of their commitment, public sector banks have covered over 37,000 villages.

Annual reports of various banks that are just coming out make prominent mention about USBs.

The RBI thinks that opening of USBs would lead to efficiency in cash management, documentation, redressal of customer grievances and close supervision of business correspondent (BC) operations.

The BC model, in which a representative of the bank carries out the banking operation, has contributed in a big way in the implementation of financial inclusion.

RBI circular

Recently, an RBI circular noted the need for having an intermediate brick and mortar structure (ultra-small branch) between the present base branch and BC locations. The circular suggested that these USBs could be either newly set up or by conversion of the BC outlets. Such USBs should have minimum infrastructure, such as a core banking solution terminal linked to a pass book printer and a safe for cash retention for operating large customer transactions.

It would have to be managed full time by bank officers/employees, it said.

Some banks, such as Bank of Maharashtra, Canara Bank and Syndicate Bank, have opened more than 100 brick and mortar branches in the villages allotted to them along with BCs.

The number of such branches by all public sector banks put together now exceeds 800.
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Govt approves Rs 632-cr capital infusion in RRBs

The Government today approved Rs 632 crore capital infusion in cash-starved regional rural banks (RRBs) to improve their capital adequacy and lending capacity to the agriculture sector.

“RRBs will get Rs 632 crore from the Central Government," said a Minister after the meeting of the Cabinet.

Following recommendations of the Reserve Bank Deputy Governor, Dr K.C. Chakrabarty, the Government had initiated recapitalisation process in 2009-10 for 40 financially weak RRBs, which mainly provide credit to rural and agriculture sectors.

However, till March 2012, capitalisation was done in 16 banks as several States did not provide their contribution.

In order to complete the process of recapitalisation, the Cabinet has decided to extend the scheme by two years.

“The Union Cabinet today approved the release of 50 per cent share of the central government for recapitalisation of the remaining RRBs to improve their capital to risk weighted assets ratio (CRAR),” an official statement said.

“The release of central government share is subject to the release of state government and sponsor bank share,” it added.

The capital of RRBs is shared by centre, states and the sponsor bank in the ratio of 50 per cent, 15 per cent and 35 per cent respectively.

Hence, in essence, these 16 RRBs would get Rs 1,264 crore of fresh capital if all stakeholders contribute in proportion to their shares for recapitalisation.

India has 82 RRBs and almost all of them are equipped with core banking solutions.
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SBI looking to reduce bad loans by 40% this fiscal

Banking behemoth State Bank of India wants to reduce 40 per cent of its stock of non-performing assets during this year, according to a top bank official.

“There could be blips month to month, but during the year we are focusing on at least a reduction of about 40 per cent in the stock of NPAs as on March 2012,” Mr A. Krishna Kumar, Managing Director, SBI, told Business Line.

As on March 31, 2012, SBI's slippages were at Rs 26,976 crore, up from Rs 18,145 crore in FY11. The bank's gross NPAs rose to 4.44 per cent (3.28 per cent in FY11), while net NPA was 1.82 per cent in FY12 (1.63 per cent in FY11).

He said that the bank hopes to achieve this by “concentrating at the grassroots level, by contacting customers and meeting them.”

Despite a significant increase in NPAs during the last fiscal, “on a quarter-on-quarter basis, there was quite a bit of a pullback because of initiatives such as setting up account-tracking centres and recovery teams, and “re-instilling in our staff the need to individually contact the borrowers,” explained Mr Kumar.

Rupee depreciation

Though it was too early to talk on the impact of rupee depreciation, he said that the RBI's directive asking exporters to convert 50 per cent of export earnings into rupee and keep it in the country was a good step. He pointed out that the RBI was also trying to encourage inflow of money through NRI/FCNR route by equalising the maximum rate you can pay on both the fronts.

“These measures would definitely take effect, but it is very difficult to expect an instantaneous effect,” said Mr Kumar.

On lending to telecom companies, he said that SBI did not have stress in the telecom sector. “As long as the applicants follow all the ground rules laid down by the regulator, we have no issues,” he added.
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RBI asks banks to put in place policy on unclaimed deposits

The RBI has asked banks to put in place a Board approved policy on classification of unclaimed deposits; grievance redressal mechanism for quick resolution of complaints; record keeping; and periodic review of such accounts. This is with a view to further strengthen the regulatory framework for inoperative accounts and unclaimed deposits.
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Thursday, June 7, 2012

State Bank of India (SBI) has taken competition head on by launching a personal loan scheme against property loans at interest rates lower than that of some of its private peers.

The scheme, aimed at existing home loan borrowers and linked to the price of property, is offering personal loan at 11.25% to existing home loan customers.

The offer is similar to the top-up scheme of other players such as ICICI Bank and home loan provider HDFC, which have pegged their loans at 12.25% and 12.50%, respectively. The new product, called 'SBI Home Equity scheme', gains relevance in the context of the rise in property prices over the last few years.

The personal loan entitlement under the scheme is linked to the value the property for which the borrower is already paying EMI. The lender will give a maximum 75% of the value of the property after deducting the outstanding amount of the loan.

For instance, if the property is valued at Rs 1 crore and the borrower has an outstanding principal loan of Rs 10 lakh, the bank will deduct a margin of Rs 25 lakh and the outstanding principal of Rs 10 lakh, making the borrower eligible for a loan of Rs 65 lakh, provided his annual income supports it.

"It is too early to gauge how successful the scheme is since it was launched less than a month back," said an official from SBI on condition of anonymity. The interest rate of 11.25% charged by SBI is benchmarked to the bank's base rate of 10%.

Similarly, rates offered by other players like ICICI Bank and HDFC for top-up loans are benchmarked to their base rates or prime lending rates. The scheme, which links home loans to personal loans will attract home loan customers of other banks, say industry experts.

Customers may shift their loan account to SBI, particularly in the context of the Reserve Bank of India banning banks from charging any prepayment penalty. SBI is also offering overdraft facility on the new scheme at 11.50%.

SBI has emerged as one of the largest players in the home loan market with a portfolio of more than Rs 1 lakh crore.

Source: EconomicTimes
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Allahabad Bank may open 250 branches this year

Allahabad Bank plans to open 250 branches this year, significantly more than the 100 branches opened during the last fiscal.

“With over 2,500 branches across the country, our focus now is to ensure that we are seen as a pan-India bank,” Mr T.R. Chawla, Executive Director, Allahabad Bank, told Business Line on the sidelines of the Global Investors' Meet 2012 in Bangalore on Wednesday. According to him, being spread out across the country will help reduce risk for the bank.

The bank has already recruited 1,600 probationary officers and 350 specialist officers so far, and plans to recruit about 1,200 clerical staff going forward, he added. Allahabad Bank is also aggressively going for customer acquisition and “we are also providing the technology-based products to all customers,” said Mr Chawla.

Focus areas

The bank saw an 18 per cent growth in advances last fiscal, and this year, the focus would be on SME, agriculture and retail sectors for lending. However, “we have no appetite for power and steel, and we are selective on lending to the textile sector,” said Mr Chawla.

On lending to the telecom sector, he explained that the bank is yet to firm up on whether to aggressively lend in that sector, and “we will remain cautious this year too,” he added.

Cash recovery target

The bank was facing a challenge in terms of quality of assets, he said, adding that during the current quarter, focus would be on recovery of assets.

“We have kept a cash recovery target of Rs 500 crore during the April-June quarter, and we are hopeful of achieving that,” he added.

On whether the SME sector was impacted due to the rupee depreciation and the uncertain global economic scenario, he said that SMEs have been facing delays in payments from their clients, but “since about 75 per cent of their exposure has been covered, they are not impacted much. If at all, they are experiencing a slowness.”
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HDFC Bank plans to roll out 10-currency travel card

The increase in corporate travel to international destinations and the rise in currency fluctuations seem to have given a fillip to multiple currency forex cards. The demand for such cards is on the rise, senior bank officials said.

A forex or travel card is a prepaid card which can be loaded with foreign currency. It can be used like a debit/credit card while travelling overseas.

“Multicurrency card enables customers to manage transactions across various currencies in one single card and helps them to lock in the currency exchange rates,” said Mr Uday Sareen, Country Head, Retail Banking, ING Vysya.

While most banks have separate cards for the different currencies, some banks such as ING Vysya, State Bank of India and Axis Bank have multicurrency cards offering 5-6 currencies on a single card.

HDFC Bank plans to launch a card offering 10 currencies, which include the US Dollar, Euro, Sterling Pound, Singapore and Canadian Dollars, Yen and Dirhams loaded onto it. The card would be primarily targeted at corporate customers, said a senior bank official.

Growing usage

The usage of forex cards by the corporate segment has been growing at over 25 per cent on a year-on-year basis. HDFC Bank holds about 30 per cent of the total forex card market with a usage volume pegged at about $1.5 billion (around Rs 8,400 crore at current exchange rate).

Close to 90 per cent of the total spends made by the corporate segment is on forex cards while currency and travellers' cheques account for just about 10 per cent.

According to Mr Sareen, the travellers' cheque as a segment has been de-growing annually at 7 per cent. “This gives an opportunity for muti-currency cards to grow and slowly replace the cash market, when it comes to overseas travel.”

Retail or leisure travellers still account for just about 15 per cent of the total travel cards usage market. The rise in foreign travel and growing awareness about the convenience, safety and security of travel cards has helped the segment post growth of over 50 per cent.
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United Bank to hire over 700 clerks

United Bank of India is recruiting 751 clerks across the country.

The recruitment for these posts will be done state-wise. Candidates can visit the bank's Web site and get more details regarding state-wise, category-wise vacancy, eligibility criteria, selection procedure etc.

Those who have appeared for the common exam conducted by IBPS and hold a valid score card are eligible to apply.

Applications have been invited online and are open from June 8 to June 22.
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Union Bank ATM for differently-abled

The Union Bank of India along with ATM manufacturer NCR Corporation has launched the ‘Accessible' or the 'Talking ATM’ for the differently abled.

The public sector lender opened its 4,000th ATM at the Blind People Association in Ahmedabad.

An ATM for the differently abled had been specified in the Reserve Bank of India circulars in 2008 and 2009. The central bank had stated that all banking services including ATM cards need to be offered to all customers without any discrimination.

The ATM has headphones attached for customers to hear the instructions and fill in the required data. There is also an option to blank out the screen as a safety mechanism to ensure no bystander misuses the pin.

“As more talking ATMs are deployed, access to self-service technology is ensured making the lives of the differently abled more convenient,” said Mr Nagesh Nayak, Professional Services Practice Manager, NCR.
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Wednesday, June 6, 2012

SBI and Geojit BNP Paribas sign an agreement to extend PIS to NRIs

Geojit BNP Paribas Financial Services Ltd. and State Bank of India have inked an agreement to extend portfolio investment services (PIS) to NRIs, mainly from the Gulf region.

Using the SBI PIS account, NRIs can purchase and sell shares and convertible debentures through stock exchanges, subject to limits prescribed by the RBI. The investments can be on repatriable or non-repatriable basis.

NRIs can visit an SBI branch in the Middle East to open a NRE PIS account for repatriable and NRO PIS account for non-repatriable investments to commence investing in the stock market.

Following the opening of the PIS account, NRIs who wish to trade, can open a trading and DP account with Geojit BNP Paribas Financial Services Ltd through the offices of joint ventures in the Middle East at Dubai, Abu Dhabi, Sharjah, Ras al-Khaimah, Al Ain, Riyadh, Muscat, Damam and Jeddah.

V. Murali, deputy managing director of SBI said the joint initiative is a major step taken by SBI in providing PIS service to a large number of NRIs in the Gulf particularly from Kerala. C. J. George, MD of Geojit BNP Paribas said the partnership will help NRIs to look beyond bank deposits and traditional investments in physical assets.

Source: EconomicTimes
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Housing and Urban Development Corporation plans to raise Rs 10,000 crore through tax-free bonds

State-owned housing and urban infrastructure developer Housing and Urban Development Corporation (Hudco) today said it plans to raise about Rs 10,000 crore through tax-free bonds and other instruments this fiscal to fund business expansion.

"We are planning to raise about Rs 10,000 crore in 2012-13," Hudco Chairman and Managing Director V P Baligar said after announcing financial results of the company here.

Of the total resource mobilisation target for the current fiscal, he said, Rs 5,000 crore would come from tax-free bonds.

Besides, some amount would be raised from non-tax free bonds, he said, adding, the company is also talking to National Housing Bank for loans worth Rs 500 crore at a competitive interest rate for its social housing operations in rural areas.

The company will also mobilise about Rs 400 crore from its public deposit scheme, he added.

During 2011-12, the company mobilised a total of Rs 10,395.95 crore. Of this, it raised Rs 5,000 crore of tax-free bonds.

In addition, Hudco also mobilised an amount of Rs 667.40 crore via taxable bonds.

Talking about the financial performance of the Hudco during 2011-12, Baligar said, the company recorded a 14 per cent rise in net profit at Rs 629.18 crore, which is also the highest ever.

The net profit of the company was Rs 550.03 crore in the previous year.

The company registered a growth rate of 35 per cent in disbursement with releases of Rs 6,906 crore as compared to Rs 5,105 crore in 2010-11.

"We have sanctioned a total loan of Rs 20,511 crore, in 2011-12, which is the highest so far," he added.

During the year 2011-12, he said, Hudco sanctioned a total amount of Rs 14,204 crore for urban infrastructure projects. A substantial focus has been laid during the year on core infrastructure projects, which affect the quality of life of citizens, he added.

Of the total sanctions for infrastructure projects, about 56.10 per cent constituted for core infrastructure projects (Rs 7969 crore) covering water supply, sewerage, drainage, solid waste, roads/transport sector and social infrastructure projects, he added.

With regard to the asset quality, Baligar said, the gross non-performing asset (NPA) of the company stood at 6 per cent while the net NPA was 1.35 per cent at the end of March 2012.

Loans of about Rs 300 crore given to Maheshwar Hydel Power Corporation, Konaseema EPS Oakwell Power Ltd have turned NPA, he said.

The company will be making efforts to bring down its non-performing assets during the financial year by focussing more on recovery.

Source: EconomicTimes
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Syndicate Bank launches ‘mega gold loan' campaign in AP

Syndicate Bank has launched a ‘Mega Gold Loan' campaign across all its branches in Anantapur, Kurnool and Kadapa districts.

“The campaign, coinciding with crop loan season, is expected to serve the farming community and supplement the need of crop finance,'' Syndicate Bank said in a release.

Under the scheme, Rs 1,900 per gram of gold of 75 per cent of net value of told would be given as loan if the tenure of is less than 12 months.

For loans with a tenure of 12-24 months, Rs 800 per gram or 75 per cent of net value will be offered at 11.75 per cent interest.

The main aim of the campaign is to mobilise an incremental business of Rs 100 crore under the jewel loan portfolio by September 30, 2012, the release added.
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T. V. Raghunath is new MD of Kotak Mahindra Capital

Kotak Mahindra Capital Company (KMCC) has appointed Mr T. V. Raghunath as MD and CEO with effect from July 1. He is currently serving as Head-Group Strategy at Kotak Mahindra Bank. He will report to Ms Shanti Ekambaram, Director, KMCC, and Group President, Corporate & Investment Banking.

In addition, Mr S. Ramesh, the present Chief Operating Officer (KMCC) will take over as Joint Managing Director and Board Member from July 1.
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Postal dept to set up 1,000 ATMs by 2014

The Department of Posts will be setting up about 1,000 ATMs in different parts of country by 2014, according to Ms Manjula Prasher, Secretary, Department of Posts, Government of India.

Speaking at an award-presentation ceremony of the department here on Tuesday, Ms Prasher said the department had taken up a technology-induction programme to improve the services.

The work on providing online connectivity between various post-offices and circles was currently under way. The Postal Department was also participating in the ‘Aadhaar' project by despatching cards to about 60 crore persons, she added.

Later, she also gave away ‘Dak Seva' and postal life insurance awards to the staff.

In 2011-12, Andhra Pradesh Postal Circle secured Rs 863 crore business in postal life insurance and Rs 886 crore business under rural postal life insurance segment. In terms of the number of policies, it ranked the second in the country with over 3.46 lakh policies.

The total number of lives insured as on March 31, 2012 was about 40.52 lakh and 4.29 lakh in rural postal life insurance and postal life insurance respectively.
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Tuesday, June 5, 2012

RBI directs banks not to levy foreclosure charges

The Reserve Bank of India has directed banks to not levy charges for foreclosure/prepayment of home loans taken on floating interest rate basis, with immediate effect.

In a notification, the RBI said though many banks voluntarily abolished prepayment penalties on floating rate home loans in the recent past, there was a need to ensure uniformity across the banking system.

The removal of foreclosure charges/prepayment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers, and competition among banks will result in finer pricing of the floating rate home loans, it added.

Some banks have waived penalties on all floating rate home loans prepaid either from own sources or via balance transfer. Over 90 per cent of home loans that are taken from banks are on floating-rate basis. The Damodaran Committee on Customer Service has observed that foreclosure charges levied by banks on prepayment of home loans were resented by home loan borrowers across the board, especially since banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario.

Further, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source.

The RBI directive comes in the wake of the recommendations of the Damodaran Committee.
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Bolloju appointed interim CEO of Deutsche Bank India

Shrinath Bolloju will succeed Gunit Chadha as the chief executive officer for Deutsche Bank’s India business, industry sources told Business Standard on Monday.

Bolloju, currently chief operating officer of the bank in India, has been appointed for an interim period. The Reserve Bank of India had approved the appointment, sources said.

Chadha has relocated to Singapore after he was named as the co-chief executive of Deutsche Bank’s Asia-Pacific operations. He and Alan Cloete (also appointed co-chief executive for the Asia-Pacific) have also joined Deutsche Bank’s global group executive committee.

Bolloju, a veteran banker with two decades of experience, is known for his ‘people and change management’ skills. He started his career with Citi in their information technology arm in India in 1988, working mainly in the securities processing business.

He moved to Singapore in 1995. After spending a year with a technology product company, System Access, Bolloju joined Deutsche Bank.

He was given several regional responsibilities, including information technology management for private banking, securities custody, fixed income and equities. He was responsible for settlement systems for the Asia region supporting all the regional installations.

Bolloju relocated to London in May 2002 to take up global responsibility for Deutsche Bank’s core banking platform dbInternet. His next assignment was as chief operating officer for personal and corporate banking information technology. In this role, he was overseeing integration of the new organisation and set up working processes in the COO team for the smooth administration of a division with a total cost base of ^1 billion.

In July 2005, he was given responsibility to run the securities and custody operations globally for Deutsche Bank. A year later, he relocated to India as global head of corporate trust and agency services operations.

Bolloju became group chief operating officer at Deutsche Bank India from May 2008. He is an alumnus of SP Jain Institute of Management & Research, Mumbai.

Source: Business Standard
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RBI hints at cut in interest rates

Ahead of its mid-quarterly policy review, the Reserve Bank on Monday hinted at cut in interest rates, saying moderation in inflation due to lower economic growth and cooling global oil prices provide room for easing monetary policy.

“.. The growth is somewhat lower than expectation and that may have positive, moderating impact on core inflation,” said Dr Subir Gokarn, Deputy Governor, RBI.

“... Oil prices have come off somewhat more than expected. Those are the two factors that suggest more room (for easing monetary policy),” he said.

The central bank is scheduled to announce its first mid-quarter review of monetary policy for 2012—13 on June 18.

In its annual credit policy for 2012—13 on April 17, RBI had slashed short—term lending rate or repo rate by 0.50 per cent to 8 per cent to prop up economy.

India’s economic growth rate slipped to 5.3 per cent in the fourth quarter of 2011—12, the lowest in nearly nine years, following poor performance of the manufacturing and farm sectors.

As a result, GDP growth for the full year 2011—12 was down to 6.5 per cent from 8.4 per cent in 2010—11.

However, wholesale price—based inflation for the month of April rose to 7.23 per cent, from 6.9 per cent in the previous month.
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Karnataka Bank to launch mobile banking soon

Karnataka Bank Ltd will launch mobile banking soon. Speaking at a function at the Founders' Branch of the bank at Dongarakery in Mangalore on Monday, Mr P. Jayarama Bhat, Managing Director of the bank, said that the bank will start offering mobile banking facility in the next two months.

With this, the customers of the bank can carry out their transactions through their mobile phones.

Mr Bhat said that the bank, which crossed a business level of Rs 53,000 crore in 2011-12, is planning to do much more in the years to come. The bank has set a target of achieving Rs 1 lakh crore business by 2015, he said.

As of now, the average business of the each branch of the bank is more than Rs 100 crore, he said.

The bank re-named its Dongarakery branch as Founders' Branch on the occasion. The bank started functioning from this branch on May 23 1924.

Mr Mahabaleshwara Bhat, General Manager of the bank, said that the Founders' Branch made a profit of Rs 3,591 in the first year of its inception way back in 1924.

The total deposit then was Rs 68,499 and total advance was Rs 1.25 lakh then.

Mr Ananthakrishna, Chairman of the bank, said that the administrative office of the bank was situated at Dongarakery premises till 1972.

Several customers of the branch, who have been banking with the branch for the past five decades, were honoured on the occasion.

Mr Krishna Avatar Jalan, one of such customers, recalled his association with the bank since 1959.
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Muthoot Finance eyes 10% growth in assets under management

Gold loan financier Muthoot Finance Ltd is looking at 10 per cent growth in its assets under management (AUM) this fiscal, its Managing Director, Mr George Alexander Muthoot, has said.

This is much lower than the 55 per cent increase in AUM seen in 2011-12 and over 100 per cent growth in 2010-11. As of end March 2012, the company had AUM of about Rs 24,417 crore. “This year will be a year of consolidation for us,” Mr Muthoot said, adding that bottomline growth is also likely to be flat during 2012-13.

Muthoot Finance's profit after tax recorded 80 per cent increase in 2011-12 to Rs 892 crore as against Rs 494 crore in previous fiscal. Income from operations nearly doubled to Rs 4,536 crore in 2011-12. Mr Muthoot said that the company has already made representation to the RBI on the latter's move to clamp down on gold loan companies in February by bringing down the loan-to-value ratio to 60 percent.

The RBI had also asked banks to reduce exposure to gold loan companies from 10 percent to 7.5 percent of their net owned funds.
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