Vijaya Bank launches HNI branch; GenNext on radar

Public sector Vijaya Bank has cast the net for high net worth account holders even as it goes about mandatorily including the poor at the far end of business.

On Friday, it launched the first of its planned 24x7 HNI branches, branded Vijaya Samruddhi, in upscale Dollars Colony in north Bangalore.

Bank officials said it would soon take some of the services to the local customers’ doorsteps.

Next on the bank’s radar is GenNext, the public sector bank's chairman and managing director, Mr H.S. Upendra Kamath, told Business Line after the launch.

An HNI savings account must have a minimum balance of Rs 5 lakh. Premium account holders here enjoy personalised, smooth, queueless services.

The ‘lobby’ banking comes with an Internet kiosk, a passbook printer, drop boxes for cheques and cash, besides the ATM.

“We plan to start 20 HNI and GenNext branches across the country shortly. The youth-focussed outlets would have similar high-end and electronic features. For this, we are looking at IT campuses, Electronics City and areas that have a concentration of young employees from the IT sector,” he said.

According to Ms Shubhalakshmi Panse, executive director, HNIs formed a surprisingly big chunk – 48 per cent – of savings accounts with the bank. The exclusive branches would meet the special service needs of an important client category.

Mr Kamath said this was another step in the customer-friendly initiatives that banks were taking beyond regular banking, just as “we also have branches focussing on industrial finance, NRI, corporate banking, NPA recovery and urban micro-finance.”

Mr Anil Kumar Jha, Secretary, Karnataka Department of Commerce & Industry, cut the ribbon.

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SIDBI to hire experienced bankers, CAs on contract basis

The employability of job seekers is an issue that captains of industry invariably concerned about. They feel that job applicants are not industry-ready, necessitating the need to invest quite a bit on training.

To tide over this sticky issue, SIDBI (Small Industries Development Bank of India) has proposed to hire experienced chartered accountants and retired bankers on contract for jobs that require certain skills.

Mr Ram Nath, Chief General Manager, SIDBI, said, “We are trying to enter the loan syndication space in a big way and are in the process of appointing knowledge partners to help the MSMEs in need of finance support prepare bankable project reports. Who better than an experienced banker or chartered accountant can fit the bill?” he asks.

The bank is looking to set up at least 50 Trade Facilitation Centres this fiscal. “We are planning to have such centres in prime MSME pockets to guide and help units have access to finance. Service sector is another focus area for SIDBI, for commercial banks do not lend to this sector and we are looking to bridge the gap,” he said

The response to the call for experienced hands has been positive, he said, in reply to a query.

lnr@thehindu.co.in

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Kotak Bank sees stress in select loan segments

Kotak Mahindra Bank is seeing some stress on its loans to the commercial vehicles, construction equipment (CVCE) industry.

The bank’s President and Group CFO, Mr Jaimin Bhatt, told Business Line that while there were some incipient signs of a build up of non-performing loans in the ‘commercial vehicles’ sub-segment, the bank had actually booked some NPAs in the construction equipment area.

Kotak Mahindra Bank has a loan exposure of about Rs 8,200 crore to the CVCE industry.

When small truck operators delay paying their loan instalments, it means there is something wrong in the system, Mr Bhatt said. (For the small truck operator — who might own one or two trucks — the vehicle(s) are the only source of livelihood, and therefore he would worry about the vehicle being seized. Hence, if that borrower does not pay, it is because he is unable to.)

No restructuring business

Mr Bhatt said that following a “if there is a problem, recognise it” philosophy, Kotak Mahindra Bank does not believe in restructuring loans. The total restructured loan book is just Rs 12 crore — 0.03 per cent of the loan book. (In most banks, this number runs into thousands of crores.)

During the first quarter of the current year, there was one “chunky corporate account” that turned bad. The exposure to this borrower has been put at “between Rs 50 crore and Rs 100 crore”.

mramesh@thehindu.co.in

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United Bank of India to hire 900 this fiscal

United Bank of India is planning to hire close to 900 employees by the end of this fiscal.

“We will recruit 400 probationary officers and 500 clerical staff in 2012-13,” Mr Bhaskar Sen, Chairman and Managing Director, UBI, told newspersons here on Friday.

He was speaking at an interactive session on the role of banking sector in promoting economic growth organised by MCC Chamber of Commerce and Industry.

Talking about the bank’s financial inclusion plans, Mr Sen said: “As on March 31, 2012, we have reached out to 1,106 villages with our services. We will connect 412 more villages with population varying between 1,600 and 2,000 by September.”

The bank also plans to reach out to 1,200 more villages by the end of this fiscal.

ayan.pramanik@thehindu.co.in

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Now, IRDA helps you choose best insurance deals

Who offers the best deal for your car insurance? If you want to know this or make a comparison of the products of various insurers, all you have to do is click on the regulator’s Web site.

The Insurance Regulatory and Development Authority (IRDA) has introduced an online application that enables the user to compare coverages, exclusions, and so on.

The facility, now available through a link on its portal www.irda.gov.in, allows users to browse through the different features of the products.

“This application has been developed with the objective of providing a mechanism for consumers/prospects to make informed decisions by comparing features of insurance products,” Mr J. Hari Narayan, Chairman, IRDA, said in a release.

A user can select the product segment — fire, motor, engineering, etc. Based on the lines of businesses selected, the user is provided with a list of insurance companies having approved products in the market.

For product comparison, a user can select approved products of four insurers at a time. This can be made based on various parameters such as coverage, exclusion, discounts, deductibles, and so on.

naga.gunturi@thehindu.co.in

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Karnataka Bank Q1 net jumps 67.6% on strong growth in core business

Growth in core business helped Karnataka Bank record a 67.6 per cent growth in net profit in the first quarter of 2012-13.

The bank registered a net profit of Rs 83.43 crore in the first quarter against Rs 49.78 crore in the corresponding period of the previous fiscal.

Speaking to Business Line after the board meeting here on Friday, Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that the healthy growth in core business coupled with good recoveries enabled the bank attain the present level of performance.

The net interest income of the bank increased to Rs 226.3 crore (Rs 153.68 crore) during the quarter. “We have almost maintained the interest spread at 4.66 per cent. It was 4.21 per cent in the first quarter of the last fiscal,” he said.

The yield on advances stood at 12.79 per cent (11.75 per cent), and cost of deposits at 8.13 per cent (7.54 per cent) during the first quarter of 2012-13.

The operating profit for the quarter increased to Rs 168.93 crore (Rs 107.08 crore) during the period.

Recovery drive

On the recovery front, Mr Bhat said: “Rigorous recovery efforts are being made, and we are recovering the amount across the sectors. In this quarter, we made a recovery of Rs 56 crore.”

The bank recorded an 18.2 per cent growth in deposits and 19.68 per cent in advances.

He said the CASA (current account savings account) deposits increased to Rs 7,694 crore (Rs 6,585 crore), a 17 per cent growth during the quarter. The CD (credit-deposit) ratio went up from 65.32 per cent to 66.17 per cent, he added.

On the outlook for the current fiscal, Mr Bhat said the bank is expecting a business growth of around 25 per cent in 2012-13.

On Friday, the bank’s share closed at Rs 102.30 on BSE, up 2.20 per cent against the previous close.

vinayak.aj@thehindu.co.in

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RBI brings more services under priority sector lending

Foreign banks having 20 or more branches in India will be brought on a par with domestic banks for fulfilling priority sector lending targets in a phased manner.

They will have to achieve the target over a maximum period of five years starting April 1, 2013, according to Reserve Bank of India’s revised guidelines on priority sector lending (PSL).

These banks will be required to submit an action plan for achieving the targets over a specific timeframe to be approved by the RBI. The PSL target for Indian banks is set at 40 per cent of their adjusted net bank credit.

Priority sector loans are small-value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low-income groups and weaker sections.

Foreign banks with less than 20 branches will have no sub-targets within the overall priority sector lending target of 32 per cent. This is expected to allow them to lend as per their core competence to any priority sector category.

In the revised guidelines, the central bank kept the PSL target unchanged at 40 per cent. It revised the list of services which will be classified as priority sector.

Now, housing loans of up to Rs 25 lakh in metropolitan cities and Rs 15 lakh in other centres will be classified as priority sector lending.

Education loans

Educational loan of up to Rs 10 lakh for courses in India and Rs 20 lakh for courses abroad will also come under priority sector lending.

It may be noted that banks were struggling to meet their priority sector lending targets.

Bank lending to farmers who are caught in the web of moneylenders and other non-institutional organisations will also be classified as priority sector lending. Loans to individuals other than farmers up to Rs 50,000 to prepay their debt to non-institutional lenders will also be eligible for PSL under the revised guidelines.

Loans to food and agro-processing units, for housing projects for economically weaker sections and low-income groups up to Rs 5 lakh and loans to State Sponsored Organisations for Scheduled Castes and Scheduled Tribes will also form the priority sector lending criterion for banks.

In an effort to boost green energy, the central bank suggested that loans to individuals for setting up of off-grid solar and other off-grid renewable energy solutions for households be tagged under priority sector lending. Loans to micro and small service enterprises up to Rs 1 crore and all loans to micro and small manufacturing enterprises will also be classified as priority sector loans.

satyanarayan.iyer@thehindu.co.in

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Kotak Bank’s Q1 profit growth slows to 12% on higher provisioning

Higher provisioning towards advances and receivables tempered Kotak Mahindra Bank’s standalone profit. The bank said net interest margins could come under pressure going ahead.

The bank reported a 12 per cent increase in net profit at Rs 282 crore in the April-June period against Rs 252 crore in the year-ago period.

Provisioning towards advances and receivables were at Rs 52 crore in the Q1 FY13 against Rs 13 crore in the year-ago period.

Net interest income (difference between interest earned and interest expended) increased by 27 per cent to Rs 721 crore during the quarter as compared with Rs 568 crore in Q1 FY12.

Advances and NPA

Advances grew by 31 per cent mainly in the corporate banking and the commercial segments.

Low cost current and savings bank account (CASA) deposits increased by 34 per cent to Rs 11,054 crore. “Within CASA deposits, savings bank deposits jumped 68 per cent aided by the deregulation in SB deposits by the RBI,” said Mr Dipak Gupta, Joint Managing Director.

Net NPAs during the quarter increased to 0.80 per cent from 0.66 per cent in June quarter last year.

“The NPAs have increased as we don’t believe in restructuring loan accounts,” said Mr Gupta. The provision-coverage ratio on NPAs as on June 30, 2012, was 62.5 per cent.

“However, this is a good time to resolve bad loans,” Mr Gupta said.

“Slippages have largely been in the commercial vehicles and agriculture sectors. “There is some stress in construction and companies associated with the infrastructure sector,” Mr Gupta said.

Net interest margins (NIMs) were lower at 4.7 per cent in the quarter ended June 30, 2012, as against 5 per cent as on June 30, 2011. “We may see some pressure in NIMs in the coming quarter,” Mr Gupta added.

Consolidated results

On a consolidated basis, the private sector bank reported a 6.5 per cent growth in net profit to Rs 443 crore (Rs 416 crore in Q1 FY12). Advances grew by 28 per cent to Rs 57,049 crore.

The group’s subsidiary, Kotak Securities, reported a steady growth in net profit at Rs 23 crore while it declined sequentially by 54 per cent. Kotak Mahindra Prime posted a flat profit growth at Rs 94 crore.

Kotak Mahindra Old Mutual Life Insurance Company’s net profit declined to Rs 32 crore from Rs 46 crore in the June quarter last year.

The bank sees a 20 per cent growth in its loan book, while deposits growth is expected to be more than 20 per cent, said Mr Gupta.

The shares of the private sector bank ended lower by 2.51 per cent to close at Rs 579.25 on the BSE.

beena.p@thehindu.co.in

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New norms for traditional life insurance products soon: IRDA chief

The insurance regulator has formed a joint working group with Life Insurance Council on norms for traditional products.

“The group has already commenced work and had two rounds of discussions. It will give its recommendations soon,” Mr J. Hari Narayan, Chairman, Insurance Regulatory and Development Authority, told Business Line here on Thursday.

The Authority is in the process of framing a new set of guidelines for traditional life insurance products. “This can be expected very soon,” Mr Hari Narayan said.

The regulator sees lack of clarity in certain class of insurance products. “Post Budget this year, some products have lesser or no IT benefits. This has to be clearly spelt out,” the IRDA chief said.

Further, the dividing line between the participatory products (those with fixed returns) and non-participatory products was also not clear.

APPROVALS

The IRDA has also withheld approvals to some products filed by insurers for introducing in the market.

“They are not sound products and may adversely impact policyholders’ interests. We wrote about the same to the companies,” he said.

In last one/two months, the IRDA had approved 100 products and rejected or withheld permissions to over 30, Mr Hari Narayan said.

There has been a view in the industry that there has been ‘undue’ delay in clearing product filings.

HEALTH PLANS

On the recently released draft guidelines for health insurance policies, Mr Hari Narayan said the Ministry of Health had sought more time to send its feedback on the draft.

“But I don’t want to give much time. The feedback from all stakeholders will be sent to advisory council before finalisation,” he said. The final guidelines could be expected in about two months from now, he added.

The draft guidelines propose to make it mandatory for insurers to settle claims within 10 days of receipt of documents and non-denial of health insurance to anybody who is under 65 years of age, among others.

naga.gunturi@thehindu.co.in

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PNB cheque truncation system in Kerala

Punjab National Bank has introduced cheque truncation system in its clearing cells at Ernakulam, Thiruvananthapuram and Thrissur.

Mr K.V. Rajesh, deputy general manager and circle head, said that PNB is the first public sector bank to introduce this facility in India.

In the present system of MICR cheque clearing, cheques are required to be physically moved from place to place and presented at the branch where they are payable. Under the cheque truncation system, images of the instruments and the corresponding data contained in MICR line is captured and used for settlement amongst banks and payment of cheques, he said.

Under the MICR clearing, though the proceeds of the cheque are available to the beneficiary on the second working day, the same can be withdrawn/used only on the third working day. Under the cheque truncation system, the proceeds are available for use on the second day.

As per the cheque truncation system, there will be only one clearing in South India based at Chennai. All the clearing houses in Kerala and other southern States will be connected to RBI clearing cell at Chennai. Thus the cheque clearing process will be quicker and more effective, he said.

In due course, with of multiple clearing sessions taking place in a day, the funds will be available to customers on the day of deposit of cheques, Mr Rajesh said.

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Union to protest SBI move to do away with business facilitators

The All-India Business Facilitators Union plans to stage a demonstration against the State Bank of India’s decision to discontinue the practice of appointing individual business facilitators.

Business facilitators are responsible for the identification of borrowers, collection and preliminary processing of loan applications, creating awareness about savings and other products, submission of applications to banks; post-sanction monitoring, and follow-up for recovery.

Close to 1,000 individual business facilitators, who are also members of the Union, will join the demonstration outside SBI’s Kolkata head office, Samriddhi Bhawan, on Strand Road on Friday.

SBI had recently decided to discontinue the practise of appointing fresh individual facilitators citing certain malpractices in their operations. The bank also plans to terminate its existing agreement with such facilitators on the expiry of the term.

According to Mr Gour Gopal Ghosh, President, All-India Business Facilitators Union, SBI’s allegation against individual facilitators was fictitious in nature.

“The bank’s allegation is baseless and there is no proof to it,” Mr Ghosh said.

SBI’s decision would also lead to loss of livelihood of many facilitators and would also cause damage to his market credential, he added.

Even while a senior SBI official said that there close to 10,000 individual facilitators working with the bank at present, the Union pegs the number at close to 30,000.


shobha.roy@thehindu.co.in

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Will get to the bottom of HSBC issue, says Home Secretary

India will get to the bottom of alleged violation of safety compliance on money laundering and terrorist financing by HSBC staff in the country, a top Government official has said.

An investigation report of the US Senate Permanent Sub-committee has revealed that the banking major had failed to prevent money laundering by drug cartels and terrorist into US and other countries. It has been found that HSBC’s anti-money laundering compliance department, which included employees in India, was highly inadequately staffed.

“I think this is a very serious matter and we will get to the bottom of it. We need to get some more information from the Americans. We will get that very soon. This has been worrying us”, Mr R. K. Singh, Home Secretary, told newspersons here.

He was reacting to reports that HSBC India staff have come under scanner for deficiencies in their role as “offshore reviewers” of HSBC’s compliance to safety mechanism against money laundering and terrorist financing.

Mr Singh also said that any financial institution that does not follow the international guidelines set by financial action task force (FATF) makes the entire world vulnerable.

RBI’s domain

Meanwhile, Financial Services Secretary, Mr D. K. Mittal, told newspersons on the sidelines of an event that HSBC is a regulatory issue.

“It is for the RBI to comment. If they need any input from us, they will have to tell us. This subject is strictly in the domain of the RBI. They are very conscious of these issues and they are evaluating and they must be evaluating”.

krsrivats@thehindu.co.in

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IOB to raise $500 m to fund overseas business

Indian Overseas Bank (IOB) plans to raise $500 million (around Rs 2,750 crore at the current exchange rate) through the issue of medium term notes in 3-6 months.

According to Mr M. Narendra, Chairman and Managing Director, IOB, the amount would be used to fund the bank’s overseas operations.

“A number of Indian corporates need funds for their overseas operations. The amount raised through the MTN issue will be lent as medium term loans (5-6 years) to these corporates,” Mr Narendra told newspersons on the sidelines of a banking conclave organised by the Federation of Indian Chambers of Commerce and Industry here on Thursday.

The bank is awaiting licence for the upgradation of its representative offices in China, Vietnam and Dubai. Overseas business accounts for about 10 per cent of its revenues and 22 per cent of its profits, he said.

Capital raising

IOB will also require capital of Rs 1,500 crore to fund its growth needs this year. The fund would be raised partly through ploughing back of profits and partly by way of government funding.

“We have to assess our fund requirement based on the business plan, estimated profits level and possibility of recovery of bad debts and submit it to the Government for its consideration,” he said.

The bank had received Rs 1,440 crore from the Government in 2011-12. Capital adequacy ratio of the bank stood at 13.32 per cent as on March 31, 2012.

IOB aims to achieve 18-20 per cent credit growth this year. The bank hopes to improve its net interest margin to 2.85-3 per cent (2.75 per cent) by the end of this year.

shobha.roy@thehindu.co.in

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Central Bank to open 25 new branches in Punjab, Haryana

The Central Bank of India plans to open 25 new branches in Punjab, Haryana and Chandigarh and Jammu and Kashmir during 2012-13. At present the total number of branches in this zone comprising four states is 302.

The Central bank would also add 150 more ATMs in this zone during this period according to the Chairman and Managing Director of Central Bank, M.V.Tanksale.

Tanksale who was here today to launch “Cent Premium Scheme” of the Bank told that “total branches of Central Bank across country at present were 4021 and the bank plans to open 250 new branches in 2012-13. The bank will also open several ultra small branches during this period. At present the bank has 1800 ATMs and has plans to raise the number to 3500 ATMs”.

He said that retail banking was a focus area for the bank. The other areas for growth would be agriculture and SME sectors. Tanksale today launched a new saving product, Cent Premium under which customers will be provided free doorstep delivery or collection of cash; fresh cash deposit and withdrawals at any branch of the Bank; free RTGS/NEFT; free demand drafts, special rates for processing charges of car and housing loan; free internet/SMS/phone banking facility; free online tax payment facility; free account statement through e-mail; free credit card issuance and renewal. He clarified that electronic transfers upto Rs one lakh did not accrue any charge on customers.

Tanksale said that this product has been launched to fulfill the growing aspiration of public and will be well received by the public. He said that Bank has enviable range of products tailor-made to suit all types of customers. To convey the message of benefits of recovery of public funds and to make aware the public about the One Time Settlement Scheme, the Chairman of the Bank flagged off the recovery van. This van will go to areas where the bank is having major concentration of overdue loan accounts and prevail upon them to avail the benefits of settlement scheme of Bank. Earlier while inaugurating, Mid Corporate branch at Panchkula, Tanksale said that the bank has already achieved 100% coverage of core banking solutions for all its branches.

The CMD said that the total business of the bank increased to Rs. 346898 crore as on March 31, 2012 from Rs 310763 crore as on March 31, 2011 registering a growth of 11.63% which includes a deposit growth of 9.38% and advances growth of 14.70%. Total deposits as on March 31, 2012 stood at Rs 196173 crore in comparison to Rs. 179356 crore as on March 31, 2011 showing a growth of 9.38 % over 2010-11.


Source: Financial Express

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StanChart sells distressed assets worth Rs 1,000 cr

Standard Chartered Bank, the largest foreign bank in the country in terms of branch presence, has sold Rs 900-1,000 crore of distressed assets to Mumbai-based International Asset Reconstruction Company (IARC), in an all-cash deal.

This took place in two tranches and was one of the largest deals in the asset reconstruction space in recent months, industry players said.

“Barring two or three accounts, the assets were purchased for cash considerations. We have started recovery in some of these accounts. The progress is reasonably good so far,” Birendra Kumar, managing director and chief executive officer of IARC, told Business Standard.

The loans were sold at a discount to the book value. Still, StanChart said it had made a profit by selling these distressed assets, as it had also bought the loans at a sharp discount from other banks and financial institutions. The transaction involved 150-175 mid-corporate and small & medium enterprises accounts.

“The sales are by our Alternate Investment Group business, which deals in distressed assets of banks and other lenders in the financial services sector. These transactions are profitable and part of our normal business activity,” the official spokesperson of the bank said, without offering details.

Sources said the bank sold these assets as it found an opportunity to make profit in an area where very few big-ticket transactions happen.

In 2011-12, StanChart’s net profit from its India branches fell 15.7 per cent, as it made provisions to cover the rise in non-performing loans. Both the gross non-performing asset ratio and net bad loan ratio deteriorated, by 321 basis points and 43 bps, respectively, during the year.

The total exposure to the top four non-performing accounts was Rs 1,989 crore last financial year, compared with Rs 336 crore a year before. In the industry segment, which includes loans to micro and small, medium and large companies, the net non-performing asset ratio widened to 0.65 per cent from 0.46 per cent.


Source: Business Standard

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Is Citi planning Facebook banking?

Citigroup, the global banking giant has turned to the social media to gauge the public mood on offering banking transactions through Facebook, a service already being offered by ICICI Bank.

US-based Citi attracted the attention of hundreds of people within minutes of it posting messages on social networking platforms Twitter and Facebook last night about banking services on Facebook.

“If you could do your banking on Facebook - Would you?,” Citi asked on its official Twitter and Facebook pages, evoking mixed reactions most of which was directed towards security concerns in conducting banking transactions through a social networking platform like Facebook.

Citibank was non-committal on whether it was actually planning to offer banking services on Facebook.

The message was posted by Citi on its global Facebook and Twitter pages, but most of the comments appeared to have come from Indians.

Citi is known for having brought many innovations into the world of banking, including the advent of 24X7 banking through ATMs and various other smart banking offerings.

However, it seems to have lost the race to India’s largest private sector bank, ICICI Bank, when it comes to offering banking services through Facebook.

Earlier this year, ICICI Bank launched its Facebook banking application, through which its customers can carry out a number of banking related tasks such as checking account details, getting account statements, upgrading debit card and cheque book enquiry.

Also, it claims that checking account through the ‘ICICI Bank App’ on Facebook is completely safe and secure due to features such as “Secure SSL connection, two-factor authentication process (and) activity details not (being) published on Facebook Wall.”

“There is no charge for this application. ICICI Facebook banking application is totally secured. All communication between the app and ICICI server is encrypted. No data is stored on Facebook. All communication is secured and encrypted,” the bank commented.

As part of the security features, registration is subject to Debit Card and PIN authentication and access to application is subjected to separate PIN authentication generated by the user.

It goes on to claim that a customer’s account details would remain secure even if the Facebook ID is hacked.

“Since your account data are not stored on Facebook, your bank account is completely safe. Even if your Facebook ID is hacked, the hacker will not be able to access the application unless you have shared your application password with the hacker,” ICICI Bank shared on its Facebook page.

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South Indian Bank plans to raise Rs 500-cr via QIP

South Indian Bank on Monday said it will raise up to Rs 500 crore through private placement of shares.

The board has decided to raise the paid up capital by way of a QIP (qualified institutional placement) issue of equity shares with an issue size (including premium) not exceeding Rs 500 crore, South Indian Bank informed the BSE.

The number and price of the equity shares to be issued as well as the time of the issue to be decided later, it said.

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Kotak Life launches assured protection plan

Kotak Mahindra Old Mutual Life Insurance Ltd (Kotak Life Insurance)  launched its ‘assured protection plan’.

Kotak Assured Protection Plan, a protection-cum-savings product, will provide death cover (natural causes), against accidental death, premium waiver in the case of accidental disability during the premium paying term and critical illness cover for 12 illnesses prior to attaining the age of 70.

The plan provides cover till the attainment of 75 years.

Further, the plan provides the full sum assured at the end of the policy term. In the case of a payout for critical illness or if the premium waiver is applicable due to accidental disability, the policy will continue with other benefits in full.

If critical illness and premium waiver benefits are availed, the maturity amount (basic sum assured) will still be paid in full on survival to maturity. In addition, loan against policy option is available.

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Lakshmi Vilas Bank cuts deposit rates

Lakshmi Vilas Bank has effected a downward revision on deposits with a term period of one to two years with immediate effect. The domestic term deposit rate as also the NRE term deposit rate has been slashed by 0.20 per cent for the one to two year term. 

From the earlier level of 10.25 per cent for senior citizens and 10 per cent for the others, the rate on domestic term deposits now stands reduced to 10.05 per cent and 9.8 per cent, respectively. The NRE term deposit, which was earlier fetching the investor a return at 10 per cent (one to two year period) has been reduced to 9.8 per cent.

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DCB net zooms on higher income, lower provisions

Higher income and lower provisions helped Development Credit Bank (DCB) report a 111 per cent jump in net profit in April-June.

In the reporting period, the private sector bank, which has 86 branches spread across 13 States and two Union Territories, reported a net profit of Rs 19 crore, against Rs 9 crore in the year-ago period.

As on June-end, the bank’s deposits grew by 14 per cent year-on-year to Rs 6,829 crore (Rs 5,980 crore). Advances grew by 29 per cent to Rs 5,449 crore (Rs 4,234 crore).

“We have made a good start to FY2013. We aim to build further momentum in the coming months. However, we will remain cautious given the current external environment,” said Mr Murali M. Natarajan, MD and CEO.

The bank, in a statement, said retail deposits (current and savings bank accounts as well as term deposits) continued to be stable, accounting for 83 per cent of total deposits as on June-end, against 82 per cent as on June-end 2011.

As on June-end, the major shareholders in DCB includes promoter and promoter group — Aga Khan Fund for Economic Development (18.18 per cent) and Platinum Jubilee Investments Ltd (1.02 per cent); South Indian Bank (3.95 per cent); and Tata Capital Financial Services (2.74 per cent).

Shares of DCB ended 3.17 per cent lower at Rs 45.80 a share on the Bombay Stock Exchange against the previous close of Rs 47.30.

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South Indian Bank Q1 net up 49.17%

The South Indian Bank has registered a 49.17 per cent growth in net profit in Q-1 at Rs 123.04 crore against Rs 82.49 crore for the corresponding period.

The total business had also gone up by Rs 10,729 crore from Rs 53,733 crore to Rs 64,502 crore during the period, registering a growth of 19.95 per cent.

The total deposit increased by Rs 5,531 crore from Rs 31,622 crore to Rs 37,153 crore, registering a growth of 17.49 per cent. The advances increased by Rs 5,198 crore from Rs 22,151 crore to Rs 27,349 crore, registering a growth of 23.47 per cent.

Current account, savings account (CASA) increased by Rs 1,046 crore from Rs 6,789 crore to Rs 7,835 crore, registering a growth of 15.40 per cent. Bank could maintain the stressed asset at low levels with the gross NPA at 1.08 per cent and net NPA at 0.35 per cent.

Dr V A Joseph, Managing Director and CEO of the bank, stated that the robust growth in business coupled with low NPA enabled the bank to attain the present level of performance.

The bank earned a total income of Rs 1,144.41 crore during the quarter as against Rs 820.34 crore for the corresponding period, registering a growth of 39.50 per cent.

The net interest income has increased by Rs 91.82 crore from Rs 204.97 crore to Rs 296.78 crore registering a growth of 44.80 per cent. The net interest margin also increased from 2.77 per cent to 3.15 per cent as on June 30.

The annualised earnings per share increased from Rs 2.93 as on June 30, 2011 to Rs 4.35 as on June 30 this year. The book value per share increased from Rs 17.04 to Rs 20.18.

The capital adequacy ratio stood at 13.16 per cent (under BASEL II standards) against the regulatory requirement of 9 per cent. The bank is planning to increase the number of branches to 750 and ATMs to 800 by the year end, he said.

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‘RBI serves the nation, not the Govt’

The Reserve Bank of India’s Governor has a responsibility to speak up. As a public servant, he owes his loyalty to the country and the Constitution — and not just to a government in transit, the Governor, Dr D. Subbarao, said. He was quoting the late I.G. Patel, a former RBI governor, while speaking at the launch of a collection of the latter’s essays — Of Economics, Politics and Development.

At the same time, central bankers have to be sensitive to the democratic milieu in which they function. Governors must choose their issues carefully and help steer debate in the right direction without annoying the government, Dr Subbarao said.

He said that at the start of his career he was advised that as a civil servant his responsibility was to give unbiased advice and leave the rest to the executive. After so many decades, Dr Subbarao wondered whether it was enough to just give impartial advice and not worry about feasibility. On the division between the Government and the RBI, Dr Subbarao said, “We share a common goal and some disagreement is natural between the Reserve Bank and the Government.”

beena.parmar@thehindu.co.in

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Card-fee suit: Visa, MasterCard to pay

Credit card giants Visa and MasterCard agreed to pay more than USD 6 billion to millions of merchants which had sued them for allegedly fixing card-use fees.

In a negotiated settlement to resolve the seven-year-old case, Visa agreed to pay USD 4.03 billion to settle the class-action lawsuit while MasterCard and banks that issue cards and were also part of the suit will pay USD 2.02 billion Friday, according to documents filed in federal court in New York.

The two will also have to cut their so-called "swipe" fees for eight months that could give the merchants another USD 1.2 billion in relief.

And they will have to allow merchants to impose a surcharge on credit card transactions, subject to a cap. Law firm Robins, Kaplan, Miller & Cires, which represented about seven million merchants in the suit, said that penalties for the two and other card-issuing banks added up to USD 7.25 billion USD 6.05 billion for past damages and the USD 1.2 billion for relief.

Also involved in the settlement are card-issuing banks including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One and others.

Visa said its total payouts would be USD 4.4 billion, which appeared to include settlements from separate individual suits over the same issue that were not part of the class-action suit.

"The reforms achieved by this case and in this settlement will help shift the competitive balance from one formerly dominated by the banks which controlled the card networks to the side of merchants and consumers," said Craig Wildfang,

lead Robins, Kaplan lawyer in the case for the merchants.

"Over time, the reforms induced by this case and in this settlement should help reduce card-acceptance costs to merchants, which in turn, will result in lower prices for all consumers."

But in a reaction, American Bankers Association president Frank Keating blasted the idea that consumers will benefit from the deal.

"Let's be clear retailers, not consumers, benefit from today's resolution," he said.

"This settlement even provides merchants with the ability to impose 'checkout fees' on customers just for using credit cards."

"Only time will tell if this history will repeat itself, as retailers continue to show little regard for consumers."

"While the banking industry may not like all the results in this case, our industry is ready to put this matter behind us."


Source: Financial Express

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Over Rs 1cr swindled from pvt bank ATMs

A man entrusted with the responsibility of loading cash into ATMs of a private bank allegedly swindled over Rs 1 crore from various such machines in the city, police said on Saturday.

Officials of an Axis Bank's branch in the area registered a police complaint last night claiming that Rs 1.16 crore had been stolen from nearly half a dozen ATM outlets in various parts of the city, police said.

The bank officials alleged that a man named Bhupesh Kumar, who used to load cash into the ATMs of the bank, on Wednesday suddenly went missing and switched off his mobile phone.

This raised suspicion among the bank officials, who started checking bank records.

The bank officials found that over the past few weeks, Kumar had been collecting cash from the bank's Civil Lines branch and showing in records that the same had been loaded into the assigned ATMs, while he swindled away the money, police said.

A search is on to nab Kumar, who has apparently fled the city, police said.




Source: Financial Express

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Robust 1st quarter results for HDFC Bank

HDFC Bank, the country’s second largest in the private sector, has reported a 30.6 per cent increase in net profit to Rs 1,417 crore for the quarter ended June, as compared to Rs 1,085 crore a year earlier, on the back of robust loan growth and higher fee income.

Loan growth of 21.5 per cent has helped its net interest income, or the difference between interest income and interest expense, to post a 22.3 per cent growth to Rs 3,484 crore during the three-month period.

The net interest margin improved sequentially as well as year-on-year, by 10 basis points to 4.3 per cent.

Commenting on the loan growth projection, Aditya Puri, managing director, HDFC Bank said, “Loan growth is a function of GDP growth. It’s generally 2.5 times the GDP growth. We’ll grow two per cent more than the system.

The bank also reported other income growth of 36.6 per cent, as it received more fees and commissions, gained from sale of investments, earned revenues from foreign exchange and derivative deals. Income from fees and commissions grew 24 per cent to Rs 1,143 crore.

Profit from sale of investment of Rs 66.5 crore also helped the bottom line, as it had reported a loss of Rs 41.3 crore on this in the corresponding period last year.

Foreign exchange and derivative revenues were Rs 315 crore, up 37 per cent year-on-year.

“The results were in line with the estimates. Higher non-interest income via fee income and foreign exchange gains compensated for the higher provisioning requirement,” said broking firm Emkay Global Financial Services.

Operating expenses increased 25.7 per cent to Rs 2,433 crore, as the bank expanded its network and paid more salaries. The cost-to-income ratio expanded to 49.2 per cent at the end of June 2012, from 48.3 per cent a year before.

Asset quality, liabilities

The bank made higher provisioning during the quarter, though credit quality remained steady from a year ago. Provisions were up 10 per cent from a year earlier, at Rs 487.3 crore, including specific, general and floating provisions of Rs 475 crore.

The net non-performing asset ratio remained steady at 0.2 per cent, while the gross bad loan ratio improved marginally by seven basis points to 0.97 per cent. Total restructured loans, including applications received and under process for restructuring, were 0.3 per cent of gross advances.

According to brokerage firm Motilal Oswal, the restructured loans due remain one of the lowest in the industry.

On the liabilities side, the deposit base expanded by 22 per cent to Rs 257,531 crore, with 18.4 per cent growth in savings deposits and 7.4 per cent in current account deposits. The share of low-cost current account/savings account deposits continued to be on the higher side, at 46 per cent of total deposits.

Regarding capital requirement under the new Basel-III norms, Puri who was speaking at the sidelines of the bank’s annual general meeting, said, “The bank is capitalised enough for the Basel-III norms, however RBI guidelines for Basel-3 are bit stringent and the bank would require some capital to fulfil those.”

He also said the chances of a rate cut from the central bank is low, “Looking at the current economic situation, I don’t think that RBI will reduce key rates.” RBI will announce its first quarter review of monetary policy on July 30.

The bank’s shares closed one per cent up at Rs 586 on the National Stock Exchange.



Source: Business Standard

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SBI to open 56 ultra small branches in Assam and Manipur

In a attempt to take forward financial inclusion,India's largest banker, State Bank of India (SBI) will open up 56 Ultra Small Branches (USB) in 5 districts of Assam and one district of Manipur by the end of this month.

SBI has also planned to complete 100 USB within July 31, 2012 and convert all the Customers Service Points of State Bank of India into USB in a phased manner during the current financial year.

Ultra Small Branch is a new concept where a Business correspondent/Customer Service Points (BC/CSP) operates with their infra-structures including laptop accessing internet based site or through mobile software along with photograph and finger print bio-metric devices etc.

According to SBI the customer of USB get the benefit of accessing to Bank system through bio-metric devices which has been proved to be very useful and user friendly for the common man. Service at the door step and immediate disposal of transaction with financial literacy campaign are also added to the service of this USB.



Source: EconomicTimes

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