BoI cuts fixed deposit rates by 0.25% on select maturities

Bank of India (BoI) slashed interest rate on fixed deposits by 0.25% on select maturities.

Interest rate on fixed deposit for maturity between 2-3 years has been reduced by 0.25% to 9%, while 1,111-days term deposit will attract 9.10% as against 9.30%, state-run BoI informed the BSE.

With the revision, BoI's interest rate on 3-10 years fixed deposit would come down to 9% from 9.25%.

The Mumbai-based bank had last revised the interest rate on fixed deposits on March 22 this year.

The new rates are effective from July 2, it said.

However, interest rates on other maturities remain unchanged.

State Bank of India on the contrary had raised interest rate on select fixed deposits by 0.25% last week.

SBI's term deposits of three years but less than five years earns an interest rate of 9%, up from 8.75%.

A hike in interest rate by SBI is surprising also because it followed a cut of 0.20% in base rate by private lender HDFC Bank.

Meanwhile, another public sector lender Union Bank of India also slashed interest rate on various categories of farm loans by up to 1.75%.

Union Bank will offer crop loans, investment credit and loans for allied activities up to Rs 50,000 at base rate only.

The interest rate for lending to self help groups (SHGs) has also been reduced by 1.75%, Union Bank of India said in a statement today.

The revised interest rates are effective from July 1. At present, the base rate of Union Bank of India is 10.50%.



Source: Business Standard

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SBI offers incentives to top officers to boost deposits

State Bank of India, India’s largest bank, is introducing performance incentives for its middle and senior management.

These variable incentives are being structured in such a way as to provide higher incentives for better performance.

DEPOSIT GROWTH

The bank had said that it hoped to grow its deposits at 20 per cent and its loans at 16 per cent this fiscal.

Last year, its deposits grew 11.75 per cent and advances, 15.78 per cent.

Given the slowdown that the economy is facing, it may be a tough ask for the bank to grow its deposits at nearly twice the pace of last year.

Perhaps to ease the pain involved in meeting the targets, the bank has decided to provide its middle and senior management with incentives that will be as high as Rs 1.5 lakh for a Chief General Manager.

The bank has now fixed a target for achieving 25 per cent growth in deposits over March 2012 level.

However, consolation incentives are also proposed on achieving 20 per cent and above.

CLERICAL STAFF OUT

Interestingly, there is no mention here of other bank officers, clerks or the subordinate staff who are the first point of contact and are on the field mobilising the deposits.

The results of the scheme will be announced on the PBBU (personal banking business unit) Web site. All incentives will be in the form of gift cards only.

The performers under various categories will be felicitated at various conclaves and performance review meetings at the end of financial year 2012-13.

The campaign would be for all branches opened up to March 31, 2012 and run (with retrospective effect) from April 1, 2012 to March 31, 2013.

vinson.kurian@thehindu.co.in

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SBI launches eFile service for filing I-T returns

State Bank of India (SBI) today launched a new service that will facilitate filing Income Tax returns online.

This service is currently available only to the bank's customers, at a discounted price, SBI said in a statement.

For salaried individuals the fee starts as low as Rs 150, inclusive of taxes, which can be paid by the customer through SBI internet banking or debit card, it said.

"Considering that it is mandatory for individuals earning an annual income in excess of Rs 10 lakh to file their returns online from the current financial year, there is a growing demand for online tax filing services which SBI is trying to meet and provide for its customers through its eFile service," it added.

Apart from salaried individuals, the service is available to individuals who are self-employed, professionals, etc., it said.

For a higher fee, it said, the facility provides enhanced features such as professional review, tracking of tax refund, an online tax vault to store and access tax related documents, online filing using digital signature etc.



Source: Business Standard

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RBI for customer-friendly savings bank deposit rate policies

The Reserve Bank wants larger banks to come out with customer-friendly interest rate policies following the deregulation of savings bank rate like their smaller counterparts in the private sector.

Since the deregulation of the rate last year, said RBI Governor D Subbarao yesterday, 7 relatively small private banks have raised it and "expectedly improved their share of this market segment".

"The big banks have yet to respond to this...Reserve Bank looks forward to more active play in the Saving Bank segment with banks coming out with some customer friendly innovations especially aimed at attracting low income households, presently outside the banking sector," he said.

Subbarao stated this at IOB Platinum Jubilee Oration Series here.

While the banks were allowed to decide interest rate on deposits and lendings in early 1990s, the saving bank segment continued to be regulated as there were apprehensions that deregulation would hurt the asset-liability management of banks and also militate against financial inclusion.

However, Subbarao said belying earlier apprehensions, the adjustment to the deregulation has been fairly smooth.

He said it is expected that whenever big banks respond to the deregulated regime, "...the adjustment will be smooth".

While deregulating the rate in the segment, RBI mandated the banks to provide a uniform rate for accounts upto Rs one lakh while enjoying flexibility in the rates and charges for accounts over Rs 1 lakh.

This was done to protect small customers whose knowledge levels and bargaining power are low, Subbarao said.



Source: EconomicTimes

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Union Bank slashes interest rate on agricultural loans up to 175 bps

In an effort to boost credit flow to agriculture, Union Bank of India today announced interest rate cut for various categories under agriculture by up to 175 basis points.

Union Bank will offer crop loans, investment credit and loans for allied activities by up to Rs 50,000 at base rate only.

The interest rate for lending to self help groups (SHGs) has also been reduced by 175 bps, the bank said in a statement here.

The revised interest rates are effective from July 1. At present, the base rate of Union Bank of India is 10.50 per cent.

For the benefit of farmers, Union Bank is extending credit under crop loan up to double the scale of finance fixed by DLTC (District Level Technical Committee).

It also offers 3 per cent interest subvention upfront to the farmers for repayment of dues in time for both pre and post harvest finance, for loans up to 3 lakh.

Union Bank has already launched a new scheme 'Project Hariyali' to provide additional touch points and facilitate the branches to reach out to the farmers with the help of business facilitators, the release said.



Source: EconomicTimes

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ICICI Bank ties up with Chhattisgrah's ITM Varsity

ICICI Bank tied up with Chhattisgarh-based ITM University to train potential candidates and make them ready for banking jobs.

The industry-academia partnership is aimed at creating a talent pool to meet growing demand of pre-skilled human capital by the banking industry, the country's second-largest lender said in a statement here.

As part of the agreement, a three-month residential certificate course in retail banking and sales management will be held in Raipur under the banner of ICICI Bank Sales Academy. The course will entail one-month of campus coaching after which the pupils will undergo a two-month internship with the bank.

Candidates will be selected from locations where ICICI Bank has a branch and upon completion of the course, will be absorbed as sales trainees and posted back in their respective local market, the release added.



Source: EconomicTimes

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Axis Bank, UAE Exchange unveils mobile remittance service

Axis Bank and UAE Exchange and Financial Services launched money transfer service for NRIs to transfer money to any registered mobile number in India.

 
The recipient can simply withdraw the money from any of the 10,000 Axis Bank ATMs with the help of codes sent to their registered mobile number.

 
The remittance amount must be in multiples of Rs 100 and is presently capped at Rs 18,000 per remittance transaction.

 
To avail of this service, customer is required to register once at any Axis Bank branch in India. A registered beneficiary can receive a maximum of 30 remittance transactions in a calendar year.

 
In September 2010, Axis Bank in partnership with Empays Payment Systems had launched ‘instant money transfer’, a mobile based domestic remittance service in India. The bank has now extended this facility for cross border inward remittances.

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Kotak Life Insurance appoints Sunil Sharma as ‘Appointed Actuary’

Kotak Mahindra Old Mutual Life Insurance (Kotak Life Insurance) announced the appointment of Mr Sunil Sharma as ‘Appointed Actuary’.

The appointment is effective from July 1.

With an experience of more than 21 years in life insurance and reinsurance practice areas in India, USA, UK and South East Asia, Mr Sharma has worked with companies such as Swiss Re, GE Financial Assurance and others.

Mr Sharma is a qualified Actuary and a Fellow of Institute of Actuaries, UK (FIA) and Institute of Actuaries of India (FIAI). He is Chairperson of Advisory group on Communication of Institute of Actuaries of India (IAI) and member of Advisory Group on Peer, Stakeholder & International Relations of IAI. He is also the editor of the Actuary India Magazine.

beena.parmar@thehindu.co.in

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Federal Bank ties up with Saudi Arabia-based bank for remittances

Federal Bank has tied up with Samba, the Saudi Arabia-based bank for disposal of cash remittances.

Under the arrangement, remittances received through the Samba bank under ‘SpeedCash Now’ can be encashed by the beneficiaries from any of the Federal Bank branches up to Rs 50,000 per remittance.

Federal Bank has a presence in inward remittance from Gulf countries wit

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Oriental Bank to hire over 400 officers

Oriental Bank of Commence is recruiting 425 probationary officers/agricultural officers.

There are 325 vacancies of probationary officers and 100 posts of agricultural officers. While any graduate can apply for probationary officer's post, a degree in agriculture/horticulture and other related disciplines is a must for agricultural officers.

The candidates should have appeared in the common written examination for officers conducted by the Institute of Banking Personnel Selection in 2011.

The last date for online registration of applicaitons is July 29, according to a notification.

nagsridhu@thehindu.co.in

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Indian Bank to recruit 1,200 clerks

Indian Bank is recruiting 1,200 clerks to work in its branches spread across the country.

According to a notification, those who passed intermediate with a minimum of 50 per cent marks are eligible to apply. They should have taken the common written examination for clerical cadre conducted by the Institute for Banking Personnel Selection in 2011 and have a valid scorecard.

The online registration of applciations will be open up to July 13. Further details can be had from bank's portal.

nagsridhu@thehindu.co.in

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Ratnakar Bank profit zooms

Ratnakar Bank has posted a 112 per cent increase in net profit, helped by growth in deposits and advances.

For the full year ended March 31, 2012, the Kolhapur-based private sector bank reported a net profit of Rs 66 crore. Net advances grew 117 per cent to Rs 4132 crore and total deposits grew 132 per cent to Rs 4739 crore.

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HDFC Bank cards for doctors

HDFC Bank has launched an exclusive range of credit cards for doctors – Doctor’s Superia and Doctor’s Platinum – on the occasion of National Doctors’ Day.

These premium credit cards are designed to cater to the lifestyle, travel and other needs of doctors, said Mr Parag Rao, business head, credit cards and merchant acquiring services, HDFC Bank.

Apart from welcome benefits, Doctors Superia members can access more than 600 airport lounges around the world, irrespective of the preferred airlines or class.

Members of the doctor’s range of cards will also benefit from the reward point redemption across all major airlines in India.

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SBI waives minimum balance criteria for savings bank account

In order to attract new customers, State Bank of India (SBI) has done away with minimum balance criteria for saving banks account.

The bank will not levy any charge for breaching minimum balance criteria.

The facility is available to existing customers also, SBI said in an advertisement.

For the normal SBI savings account with cheque book facility, a customer had to maintain a minimum balance of Rs 1,000 in his or her account failing which it attracted penalty.

There are certain saving account products of the bank where the minimum monthly balance is as low as Rs 50. Depending on features and facility, the minimum average monthly balance varies.

The waiver would help the bank in improving customer base, an official said, adding, it will also help the bank inc generating low cost deposits as the savings bank account earns interest rate of just 4%.

As of March 2012, SBI had 15.39 crore saving banks accounts. During 2011-12, the bank opened 2.19 crore such accounts.

On the other hand, the minimum balance requirement for savings bank account of private sector bank like ICICI Bank, and HDFC Bank is Rs 10,000. This is for an individual having account in any branch in a metro centre.

Failing to maintain minimum average monthly balance in ICICI Bank attracts a fine of Rs 250 per month for the metro region.

In case of savings bank account with foreign banks like Citibank, the minimum average monthly balance criteria Rs 25,000 for metro centres.



Source: Business Standard

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Karnataka Bank beefs up exposure to micro, small units

The Mangalore-based Karnataka Bank wants to earmark one-fourth of its total credit to MSME sector.

According to Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer, the bank is eyeing a business turnover of Rs 65,000 crore for 2012-13. This includes deposit of Rs 39,000 crore and advances of Rs 26,000 crore.

The bank has plans to take the exposure of 25 per cent of its total credit to micro, small and medium enterprises sector.

While sanctioning loans, priority is given for the proposals from the MSME sector. To achieve this, all the Central Loan Processing Centres are equipped with specialised officers to process their applications quickly. The credit sanctions are streamlined by reducing the turnaround time to less than four working days, he said. SME marketing officers are placed in select centres and regional offices.

Till May-end, the bank had 37,077 accounts of the sector. The bank had disbursed around Rs 4,758 crore to these accounts, which was 22.21 per cent of the total advances of the bank. 

A major share of total MSME accounts was garnered by micro enterprises. Of the 37,077 accounts, micro enterprises contributed 25,585 accounts. This was followed by small enterprises with 6,682 accounts and medium enterprises with 1,810 accounts.

In terms of disbursal, the small enterprises got a major share. The bank disbursed Rs 2,380 crore to small enterprises. This was followed by medium enterprises at Rs 1,275 crore and micro enterprises at Rs 1,104 crore.

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Corporation Bank aims at Rs 3-lakh cr business

Corporation Bank hopes to achieve a business of Rs 3 lakh crore by March 2013.

Speaking at the 30th year celebration of Corporation Bank Officers’ Organisation’s journal Officers’ Voice here on Monday evening, Mr Ajai Kumar, Chairman and Managing Director, said that the bank has set a target of achieving Rs 2.88 lakh crore business by March-end.

“However, I wish to achieve a business of Rs 3 lakh crore by the end of the current financial year. We can achieve this, if you have passion for it,” he said.

There has been good growth in priority sector advances and in savings bank accounts also.

Luring young customers

Mr Ajai Kumar stressed the need for attracting more young customers into the bank’s fold.

Stating that 70 per cent of the people in the country are below 35 years, he said: “We do not have any share of younger generation. This generation has money. But they are not banking with Corporation Bank.”

To bring them into the banking field, the bank is trying to promote electronic banking in a big way. “We need to immediately upgrade and make our product smarter, better and attractive to the young customers,” he said.

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Citibank India’s net up 35% in FY12

Citibank India on Tuesday reported a 35 per cent increase in its net profit for the financial year 2011-12 at Rs 1,922 crore (Rs 1,424 crore).

Pre-tax profit for the period grew 37 per cent to Rs 3,297 crore (Rs 2,402 crore), Citibank India said in a statement here.

It also said that Citibank India’s total assets grew 15 per cent to Rs 1.28-lakh crore at end-March 2012 from Rs 1.12-lakh crore at the end of previous financial year.

In 2011-12, Citibank India’s deposits grew 14 per cent to Rs 64,698 crore and the current account/savings account (CASA) ratio stood at 55 per cent.

At end-March this year, Citibank India’s net non-performing loans were lower at 0.9 per cent from 1.2 per cent in the previous year.

Overall, Citi India’s total assets, including credit extended to Indian institutional and non-resident Indian clients from offshore branches, stood at Rs 1.82-lakh crore as at March 31, 2012. This represented an 18 per cent increase over the previous year.

Meanwhile, Citi announced that it had in 2011-12 helped Indian clients raise close to $16 billion from equity and debt capital market transactions. It had advised on merger and acquisition transactions worth $12 billion of announced deal value.

krsrivats@thehindu.co.in

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Assocham wants RBI to cut policy rates by 100 bps

The Reserve Bank of India should reduce key interest rates by at least 100 basis points to spur economic activity, according to industry body Associated Chambers of Commerce and Industry.

Assocham representatives met the RBI Governor, Dr D Subbarao, on Tuesday to put forth their suggestions to reduce both the repo rate (the interest rate at which banks borrow funds from RBI) and the cash reserve ratio (the slice of deposits that banks park with the RBI) by 100 bps to support credit growth and investments.

“The market intervention by the RBI to support the rupee has sucked out liquidity,” the body said in a statement.

Mr Rajkumar Dhoot, President, Assocham, said, “The reduction in interest rates will increase the earnings of the industry.” In addition, the industry body said the RBI and the Government should not delay the New Bank Licensing policy for entry of more private sector banks. “The Governor said that the RBI will reply to our suggestions after the first quarter review of monetary policy 2012-13 on July 31,” Mr Dhoot added.

ECB

If a company demonstrates to the RBI that the repayment of the proposed ECB (external commercial borrowing) can be met out of its own forex earnings, the limit of 50 per cent of the annual export earnings should not be applicable, said Assocham.

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BoM introduces easy loans for traders

Sensing the demand for loans with minimum documentation, Bank of Maharashtra has introduced a trade finance product for traders and micro, small and medium enterprises.

By doing so, the public sector bank is trying to attract co-operative bank customers into its fold. Traders and MSME promoters prefer going to small banks as they offer hassle-free loans.

Mr C.V. R. Rajendran, Executive Director, Bank of Maharashtra, said traders and MSMEs can get loans up to Rs 5 crore from the bank if they offer collateral which is 140 per cent of the loan amount. “It is not a real-estate loan. We just take the property from a loan seeker as collateral,” he said.

The new loan product is a property-based loan. The loans are given after verifying the balance-sheet of the companies. Due to the security of the property, the bank charges lower interest — 14.5 per cent, against the normal interest of 16.5 per cent.

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Online tracking to speed up Vijaya Bank’s loans disbursal

Public sector Vijaya Bank has introduced online registration of application and tracking to facilitate speedy clearance of projects under micro and small enterprises.

“Through this we have achieved faster processing of MSE applications. We are also encouraging anybody approaching us to opt for online filing of their application and also upload certain document for easier and faster transactions,” said Ms Shubhalakshmi Panse, Executive Director, Vijaya Bank. The bank also initiated regular ‘MSME Melas’ to push to get larger share of MSE disbursal of loan.

During the year 2011-12, about 44 such melas were held in different parts of the country. Through these melas, bank was able to sanction Rs 353.26 crore and disburse Rs 165.43 crore.

According to Mr K.V. Brahmaji Rao, General Manager, Retail & MSME, Vijaya Bank, “At the mela, we sit across the table and disburse working capital, bank guarantees, Letters of Credits and term loans for expansions.”

To service MSME banking requirements, it has set up eight exclusive cells -- at Ahmedabad, Delhi, Mumbai, Hyderabad, Chennai, Pune and two in Bangalore. During 2011-12, it has sanctioned 314 loans worth Rs 711.08 crore through these MSME cells.

Ms Panse said: “This financial year, we will be opening three more MSME cells one each at Raipur, Kolkata and Coimbatore.”

With renewed efforts, the bank’s advances to micro and small enterprises has seen an increase of 28.10 per cent to Rs 7,272 crore as on March from Rs 5,677 crore as on March 2011. In line with the directive of Reserve Bank of India that advances under micro enterprises have to be 55 per cent of MSE advances as at March, Vijaya Bank has achieved 42.53 per cent for 2011-12.

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Birla Sun Life deploys IBM solution

Birla Sun Life Insurance has deployed IBM’s Cognos analytics software solution for planning and forecasting its internal business operations.

Further, this would help Birla Sun Life integrate operational and financial planning functions, which would give its internal teams flexibility in business functions. This helps in determining resource requirements and forecasting of future business performance.

This solution helped in streamlining their spreadsheet-based planning and budgeting process for data coming for more than 600 branches and multiple insurance-related products. As part of this, IBM’s Cognos would provide financial planning solutions in areas such as channel-wise projections of revenue, expenses and headcount, actuarial model, capex planning, expense analysis, scenario trend analysis, and data comparisons.

This helped Birla Sun Life Insurance identify the different sales trends across the region and plan better for the coming months. The Cognos solution also facilitated the BSLI team in doing what if and scenario analysis which earlier was not possible due to the time taken in managing spreadsheets for data collection.

The project was completed within 100 days, within the target time and allocated budget, according to IBM officials.

Mr Mayank Bathwal, CFO & Head - Institutional Sales said: “We can plan better, monitor performance at a granular level, manage profitability and capital efficiently. The solution is easy to use and our finance team can learn easily with minimal change management or skills upgrade. Also the finance team is able to support the solution for their business users with minimal support from IT team.”

Mr Prashant Tewari, Country Manager, Business Analytics, IBM Software Group India/South Asia said: “In the face of the fast-changing business environment and regulatory scrutiny, this application compresses the time for finance to close the books and eliminates the risks associated with more manual processes, spreadsheets and legacy systems.”

venkatesh.ganesh@thehindu.co.in

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Syndicate Bank brings small enterprises under one roof

Syndicate Bank by revisiting its existing micro and small enterprises products now has brought all of them under one umbrella - ‘SyndMSE’.

“To popularise ‘SyndMSE’, we have come out with a reduced interest rate, margin and liberalised terms and conditions to micro and small enterprises,” said Mr Gopinath T. Iyer, General Manager-MSME, Syndicate Bank.

“Further to encourage micro enterprises, rebate in interest rate for prompt repayment has also been introduced,” he added.

The bank’s board has also approved a policy for restructure/rehabilitation of potentially viable MSME units.

This has been launched to take up timely rehabilitation measures for potentially viable sick units.

It has also signed memorandums of understanding with commercial vehicle manufactures such as Tata Motors, Bajaj Auto for financing commercial vehicles under micro and small enterprises.

According to the guidelines of Central Government and Reserve Bank of India, the bank has taken steps for increased flow of credit to micro, small and medium enterprises sector.

The bank’s total advances to the sector are up 11.08 per cent and stood at Rs 14,865.96 crore as on March 31, 2012 as against Rs 13,382.60 crore as on March 31, 2011.

Advances to these enterprises touched Rs 13,491.73 crore as at March 31, 2012, registering a growth of 11.97 per cent compared to previous fiscal.

The bank’s total number of accounts under micro enterprises increased by 11.59 per cent at 4,59,884 as on March 31, 2011 to 5,13,206 as on March 31, 2012.

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Oriental Bank cuts rates of 1-2 year deposit by 25 bps

Oriental Bank of Commerce on Tuesday cut deposit rates by 25 basis points on term deposits of 1-2 years maturity.

With this, OBC will from July 5 offer 9.25 per cent on term deposits of 1-2 years maturity, said Mr S. L. Bansal, Chairman and Managing Director, OBC.

Currently, term deposits of 1-2 years maturity earn 9.5 per cent a year.

Nearly 70 per cent of OBC’s total deposits portfolio falls in the 1-2 years bucket. The decision to cut deposit rate on this slab came at a meeting of asset liability committee (ALCO) today, Mr Bansal said.

This cut in deposit rate also signals that the bank may in the coming days look at reducing its lending rate too.

OBC’s base rate is currently pegged at 10.5 per cent. Base rate is the minimum lending rate below which banks cannot lend.
 

The trigger

So what has prompted OBC to cut its deposit rate for term deposits of 1-2 years now?

It could probably be due to the fact that bank’s deposits are growing at 24 per cent, while its advances are growing at 16-17 per cent per annum.

In the absence of enough number of projects for financing, the bank is often compelled to look at G-Secs for parking the surplus funds, if any.

krsrivats@thehindu.co.in

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ICICI Bank sells Rs 430-cr Kingfisher debt to Srei Infra

With the turnaround plans for Kingfisher Airlines yet to take off, ICICI Bank has bailed out, selling its entire Rs 430-crore debt exposure in the airline.

The buyer is a debt fund managed by Srei Venture Capital Limited (SVCL), the fund management arm of Kolkata-based Srei Infrastructure Finance Ltd (SIFL).

In a statement, ICICI Bank said it has ‘recovered’ the entire debt exposure of Rs 430 crore to Kingfisher Airlines. India’s largest private sector bank, however, owns 2.07 per cent stake in the airline.

Adequate collateral

Bankers say when a debt fund or an asset reconstruction company buys a non-performing loan from a bank, the transaction is usually at a discount to the face value. In a statement, Srei Infrastructure said a debt fund managed by Srei Venture Capital has invested in Kingfisher Airlines’ debt.

“It (SVCL) has invested against good security with adequate collateral. The fund saw an opportunity in the securities and commensurate returns being offered by this proposal,” said Srei Infrastructure.

The airline, which has been impacted by rising cost of fuel and competition, has struggled to repay loans and interest to banks.

All efforts to recast the airline’s debt have come to a nought so far. The cash-strapped airline has not cleared all its dues to oil companies and airports and defaulted on payment of service tax and TDS to the government.

Banks, including State Bank of India, Punjab National Bank, Bank of Baroda, ICICI Bank, IDBI Bank, and Bank of India, have been grappling with a debt exposure aggregating Rs 7,000 crore.

SBI is the biggest stakeholder in KFA, holding 3.49 per cent. IDBI Bank has a 2.16 per cent stake and Bank of India 1.08 per cent. They acquired ownership in the airline following conversion of a part of their loan into equity. Bankers will meet tomorrow to take stock of the KFA recast proposal. Banks want the promoter and promoter group, who collectively own 35.86 per cent stake in the airline, to pump in fresh equity before seeking a loan lifeline.

KFA shares closed 0.75 per cent down at Rs 11.96 per share on the BSE against the previous close of Rs 12.05.

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Yes Bank plans to raise $500-m via QIP

Yes Bank is seeking shareholders’ approval to raise $ 500 million (Rs 2,800 crore) to take care of the “growing requirement of funds for expanding business” and to shore up capital to meet the Basel II norms of capital adequacy.


The bank proposes to raise the additional capital by way of placement of shares with Qualified Institutional Buyers, issue of American or Global Depository Receipts or a public issue “or any other methods”, says the bank in its notice to the shareholders.
 

The placement of shares may be consummated in one or more tranches at a price to be decided by the Board of Directors. Shareholders are expected to approve a resolution empowering the board to go ahead with the fund raising at the bank’s forthcoming annual general meeting on July 14.
 

Yes Bank in the past had raised equity capital three times—Rs 120 crore in December 2006 and Rs 330 crore in December 2007. In January 2010, the bank raised Rs 1,034 crore through a placement of shares to qualified institutional buyers.
 

In addition, the bank raised $ 75 million as debt from IFC, Rs 150 crore through an issue of perpetual debt bond and another Rs 300 crore of debt from financial institutions.

 
As of March 31, 2012, Yes Bank’s capital adequacy stood at 17.9 per cent, of which Tier-I capital (owned funds) was 9.9 per cent.

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PNB cuts deposit rates of FCNR accounts

Punjab National Bank (PNB)  revised its deposit rates downwards on Foreign Currency Non-Resident (FCNR) accounts with maturity of 2-5 years.

The existing rates of FCNR (B) scheme have been reviewed as per the directives of the RBI, the public sector bank said in a statement.

”... it has been decided to revise the interest rates on these deposits with effect from July 1, 2012,” the bank said in a statement.

In dollar terms, the bank has lowered the deposit rates to 2.55 per cent from 2.63 per cent for deposits of maturity of two years and less than three years.

For maturity of three years and less than four years, it been lowered to 3.63 per cent from 3.71 per cent.

The rates have been cut to 3.78 per cent from 3.87 per cent for maturity of four years and less than five years.

Similarly, the interest rates have been lowered to 3.97 per cent from 4.04 per cent for deposits maturing in five years.

However, the interest rate for maturity of deposits for one year and less than two years has been kept unchanged to 3.07 per cent.

These interest rates will be applicable only on fresh deposits and on renewal of deposits maturing on or after July 1, 2012, PNB said in an update on its website.

The interest rates are valid for the period July 1, 2012 to July 31, 2012, it added further.

FCNR accounts are opened by non—resident Indians and these deposits can be maintained in five designated currencies —— US dollar (USD), pound sterling (GBP), euro, Australian dollar (AUD) and Canadian dollar (CAD).

The interest rates have been revised for other currency accounts accordingly, it said.

These accounts can only be maintained in the form of terms deposits for maturities of minimum one year to maximum five years.

Chennai—based Indian Bank had also revised the interest rates on FCNR deposits yesterday.

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ICICI Bank to get $30 m export credit line from JBIC

The Japan Bank for International Co-operation (JBIC) will extend an export credit line of $30 million to ICICI Bank for financing renewable energy projects.

This will be co-financed with $50 million from Japanese private financial institutions, taking the overall loan assistance to ICICI Bank at $80 million (Rs 439 crore).

The credit line will support the export of renewable energy-related equipment by Japanese firms to India.

As demand for electric power has been increasing, the Indian Government has been making efforts to promote broader utilisation of renewable energy for power generation.

The Government plans to increase the power generation capacity of renewable energy to 41.4 GW by the year 2017.

krsrivats@thehindu.co.in

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HDFC Bank aims 1 mn new credit cards in 2012-13

Private lender HDFC Bank rolled out credit cards for doctors to cater to medical fraternity's specific needs, as part of its plans to launch total one million credit cards in current fiscal to deepen its presence in credit cards space.

The credit cards for doctors--Superia and Platinum have been designed to cater to the lifestyle, travel and other needs of doctors.

The doctors with new exclusive range of credit cards members will be able to access more than 600 airports lounges around the world, irrespective of preferred airlines or class and they will also benefit from the reward point redemption across all major airlines in India, said HDFC Bank, Business Head ( Credit Cards & Merchant Acquiring Services) Parag Rao here today.

He informed that 8.4 lakh are registered doctors in the country as per Medical Council of India while 35,000 become new doctors every year.

"Healthcare sector in India stands at USD 17 billion and it is growing at a rate of 13 per cent," he said.

Claiming to be one of the largest players in credit cards business in the country, Rao said that HDFC bank had a credit card customer base of 5.60 million as on March 2012.

"We are adding 90,000 to 100,000 credit cards every month which is more than the double of what credit card industry is doing," he said.

HDFC bank has plans to launch 1 million new credit cards in current fiscal in line with its strategy to further penetrate the credit card business.

"We have plans to launch 1 million new credit cards in 2012-13 which is more than what we launched last fiscal," he said.

Country's total credit card holders are pegged at 18 million, down from 28 million in 2008 when slowdown hit global economies.

Rao further said that the bank witnessed 60 per cent growth in terms spending through credit cards in last fiscal against industry's overall spending of 10-11 per cent.

"We aim to perform better than industry's growth in terms of spending which is likely to be 15-20 per cent in current fiscal," he said.

With travelling, eating out and apparel segments constituting bulk of total spending by credit card holders, Rao said that the online shopping was going to be the next growth driver for the credit card industry.

"The way internet space is growing, we feel online shopping through credit card which constitutes almost 20-25 per cent at present will move up to 50 per cent in next three years," he said.



Source: EconomicTimes

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SBI eyes 20% growth in loans to mid-corporate segment

State Bank of India eyes 20 per cent loan growth in the mid-corporate segment this fiscal, Mr R. Venkatachalam, Deputy Managing Director and Group Executive-Mid Corporate, has said. This is much more than the 8 per cent growth recorded last fiscal.

SBI, which is the country’s largest commercial bank, classifies companies with turnover over Rs 50 crore and less than Rs 1,000 crore as mid-corporate segment.

"Last year was a difficult year and our growth was only 8 per cent. Normally, we grow at 20 per cent levels. That is why we are now aiming at 20 per cent this fiscal,” Mr Venkatachalam said.

In the mid-corporate segment, SBI’s loan book as at end March 2012 was Rs 1.72 lakh crore. A 20 per cent growth on that would mean additional advances of Rs 34,400 crore this fiscal.

"We should have an ambitious target always. Because even in a slowdown there would be some sector that is wanting funds for growth. Requirements of our society are high and all the banks together have not been fully able to satisfy the needs. There are sectors that will be growing and we will be focusing on them."

Last year (2011-12), SBI’s mid-corporate segment advances grew by Rs 9,000 crore, said Mr Venkatachalam, who was here on Saturday for a corporate social responsibility initiative of the bank.

Mr Venkatachalam sees demand revival in cement and steel, which he said augurs well for the infrastructure sector and the economy.

krsrivats@thehindu.co.in

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NABARD to provide Rs 400 cr for various projects in Uttarakhand

National Agricultural Bank for Rural Development (NABARD) will provide funds of Rs 400 crore to Uttarakhand in the current financial year for various projects of PWD, and the irrigation and the power sectors.

Chairing a meeting with the NABARD last week, Uttarakhand Chief Secretary, Mr Alok Kumar Jain, approved projects worth Rs 300 crore for PWD, Rs 150 crore projects for the irrigation department and Rs 127 crore projects for the power department, official sources said.

During the meeting, Mr Jain directed officials to prepare Detailed Project Report (DPR) of projects in time.

He instructed the PWD officers to constitute a cell of mechanical engineers for construction of ropeways for carrying out the projects.

He also asked the irrigation department officers to prepare DPR of lift irrigation projects besides that of tube wells and canals.

He said UJVN Ltd would construct three hydropower projects of 23 MW capacity for power generation. These projects would begin generating power by 2017.

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Vijaya Bank declares dividend

The 12th Annual General Meeting of Vijaya Bank was held at its Head Office here on Friday. The Board of Directors recommended a dividend of Rs 2.50 per share and fixed 9.50 per cent per annum on perpetual non-cumulative preference share of the Bank payable to Government of India for the financial year 2011-12. 

The shareholders approved recommendations of the Board of Directors and adopted accounts and payment of dividend. The AGM was attended by about 500 shareholders. Mr Upendra Kamath, CMD, addressed the shareholders and briefed them on the performance of the bank in the financial year 2011-12.

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SBI Kerala Circle observes Bank Day

The Kerala circle of State Bank of India (SBI) observed ‘Bank Day’ on Sunday. This commemorates the transformation of erstwhile Imperial Bank to State Bank of India on July 1, 1955. Social welfare and environmental awareness programmes were held in all branches on Sunday.

The day also saw employees and family members take part in cultural programmes and contests at the P. Subrahmaniam Hall here. Mr V. Murali, deputy managing director, State Bank of India, presided over the programme. Mr K. M. Chandrasekhar, deputy chairman, State Planning Board, was the chief guest.

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RBI launches online platform for G-secs trading

The Reserve Bank has introduced Internet-based platform for trading in secondary market of government securities for gilt account holders.

The web-based NDS-OM (Negotiated Dealing System-Order Matching) system module will facilitate buying and selling of government bonds or securities online to the gilt account holders (GAH).

The RBI had introduced the NDS-OM system in August 2005.

The NDS-OM is an electronic, screen based, anonymous, order driven trading system for dealing in government securities.

RBI said the web-based “module permits internet-based direct participation of gilt account holders in secondary market for G-secs.”

The newly launched online trading platform is an additional facility to the existing system for trading by GAHs through primary dealers.

RBI further said that the access to the module will be subject to controls by the respective primary dealers.

GAHs are the non-NDS members who have gilt account and current account with the primary dealers.

Non-banking finance companies (NBFCs), provident funds, pension funds, mutual funds, insurance companies, co-operative banks, regional rural banks, trusts and corporates and individuals are the entities permitted by RBI as GAHs.

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SBI to pay more for 3-5 year deposits

State Bank of India has upped the interest rate on deposits in the three-to-five year maturity slab to 9 per cent.

The 25 basis points increase in the interest rate (from 8.75 to 9 per cent) suggests that India’s biggest lender is eyeing stable, long-term deposits.

In a statement, SBI said the interest rate hike is effective July 1, 2012. It has, however, left interest rates on all other maturity slabs unchanged.

In late April, the bank had reduced retail term deposit rates by 25-100 basis points across the board. Earlier this month, it pared short-term retail term deposit rates on tenors up to 240 days by 25 basis points. (A basis point is one hundredth of a percentage point.)

Among the nine maturity slabs, the bank is offering the highest rate of 9 per cent on deposits in three slabs — 1-2 years; 2-3 years; and 3-5 years.

As on March-end 2012, retail term deposits at Rs 4,12,285 crore accounted for 42 per cent of SBI’s domestic deposits of Rs 9,82,214 crore.

Union Bank CUTS lending rates

In a statement, Union Bank of India has cut interest rates on loans to the micro and small enterprise (MSE) sector by up to 300 basis points.

What this means is that depending on the MSE’s credit rating, the bank will reduce its mark-up over the base rate (10.50 per cent) by up to 300 basis points. Base rate is the minimum lending rate below which banks cannot lend.

kram@thehindu.co.in

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