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Friday, July 27, 2012

SKS Microfinance: Deutsche Sec buys 9%

Deutsche Securities Mauritius has picked up 9.15 per cent stake in SKS Microfinance for an estimated Rs 78 crore.

Deutsche Bank arm has picked up 95 lakh shares through qualified institutional placement basis, the German bank said in a BSE filing.

Deutsche Securities Mauritius expected to have paid about Rs 77.9 crore at today's closing price for picking up shares of Hyderabad based micro finance company.

Source: Financial Express
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SBI raises $1.25 billion from overseas bond sale

State Bank of India raised $1.25 billion from an overseas-dollar-denominated bond sale on Thursday. This is the largest single-tranche offering by a public sector bank from India.

The bank’s London branch issued 4.125 per cent five-year-notes due in July 2017 at 375 basis points, spread over five-year US Treasuries. The notes offer the lowest ever coupon achieved for an Indian issuer in the US dollar bond market in the five-year tenure, said a banker close to the development. The notes, a debt instrument, are rated Baa2 by Moody’s and BBB- by Standard & Poor’s.

This is also the first public sector bank US dollar bond issuance out of India since May 2011. The last dollar-denominated bond offering by an Indian company was in February when Axis Bank raised $500 million (in the form of five-year medium-term notes) at 440 basis points spread over five-year Treasuries.

SBI had hired six global giants — Citigroup, Barclays, Bank of America Merrill Lynch, Deutsche Bank, JP Morgan and UBS — to manage the debt sale.

“The SBI bond has been priced at an attractive level. Its success can be attributed to SBI’s track record, identification of a window of opportunity in volatile markets and seamless execution,” said Mr Rajiv Nayar, Managing Director & Head of Capital Markets Origination, Citi India.

Mr Nayar said that the SBI issuance at an oversubscription of 5.4 times, has provided a window of opportunity to other high quality Indian issuers to tap international bond markets.

For the latest debt sale, SBI received an order book of $6.8 billion, resulting in an over-subscription of 5.4 times. As many as 350 investors participated in it. The bonds will be listed on the Singapore exchange, sources said.

As for the geographical representation of investors, as much as 47 per cent came from Asia, 31 per cent from the US and 22 per cent from Europe. As regards investor profile, about 49 per cent were fund managers, 24 per cent were private banks, 12 per cent banks, 12 per cent insurance funds and 3 per cent were public companies.
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State Bank of India to hire 7,740 clerks

State Bank of India will recruit 7,740 clerks to work in its associate banks.

According to a notification posted on SBI’s portal, the online registration of applications would begin on July 30 and will continue till August 13.

The written examination is likely to be conducted in two phases on October 7 and 14.

A clerk in SBI would earn approximately Rs 14,200 a month. A first division in intermediate or a degree from a recognised university is the minimum educational qualification required to apply for the examination.

Mr C.S. Vepa, Director of National School of Banking, a coaching institute for bank jobs, says the notification should bring cheer to job aspirants as the number of vacancies are higher than last year.

Last year, the banking behemoth hired a little over 6,000 clerks.

Further, SBI is the only bank which conducts its own state-wide competitive examination for recruitment.

Other public sector banks use scores obtained by candidates in a common written examination conducted by the Institute for Banking Personnel Selection, for short-listing candidates for interview.
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Thursday, July 26, 2012

Exim Bank pays Rs 205 cr dividend

The Export-Import Bank of India (Exim Bank) has paid a dividend of Rs 205 crore to the Government. Mr T. C. A. Ranganathan, Chairman & Managing Director, Exim Bank, presented an RTGS receipt representing return on capital to Mr Namo Narain Meena, Union Minister of State for Finance, on Tuesday.
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Indian Bank makes Rs 32-cr provision for Air India loan

Indian Bank has made a provision of Rs 32 crore against its Rs 800-crore loan to Air India, the bank’s Chairman and Managing Director, Mr T. M. Bhasin, said at a press conference here today.

He said the bank was required to make Rs 8 crore of provision for each of the four quarters of the year, but it decided to take the entire provision in the first quarter itself.

Except for Air India, the bank has no other exposure to the aviation sector.

Indian Bank has restructured loans worth Rs 9,918 crore (loans for which payment terms have been reset to help the borrower.)

Two loan accounts are chunky, incidentally, both are public sector — Air India, and the one to the Rajasthan State Electricity Board (about Rs 1,200 crore).

Indeed, most banks have exposure to RSEB, but it is generally believed that the loans would be paid back as they are backed by a Government guarantee.
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Get credit score before applying for home loan, says CIBIL

Stressing that borrowers with a credit score of 750 and above have a higher chance of getting a home loan, the Credit Information Bureau (India) Ltd (CIBIL) on Wednesday urged consumers to get their credit scores before applying for loans with banks and financial institutions.

Citing CIBIL data that show 88 per cent of home loan borrowers in 2011 had a credit score of 750 and above on a scale of between 300 and 900, Mr Arun Thukral, Managing Director, told a news conference here that home loan inquiries had doubled since 2007, indicating the huge demand. These inquiries increased more than 18 per cent in the first quarter of 2011-12 compared to the same quarter the fiscal before.

“According to CIBIL data, about 75 per cent of new accounts opened in 2011 had sanctioned amounts between Rs 5 lakh and Rs 50 lakh. This also means that the shift is clearly towards higher value loans, indicating the rise in property prices and higher borrowing affordability,” he said.

In 2011, 48 per cent of the total home loans sanctioned in the metro cities had a ticket size of more than Rs 20 lakh. Moreover, loans with a ticket size of less than Rs 50 lakh increased from around 7 per cent in 2007 to over 12 per cent in 2011.

More than one-third of borrowers sanctioned home loans in 2011 were less than 35 years of age and 70 per cent less than 45 years of age, Mr Thukral said.

The trends in acquisition of new home loans by banks based on the CIBIL TransUnion Score show that in 2008, 23 per cent of new home loan borrowers acquired had a credit score of 800 and above. In Q2 2011, more than 62 per cent borrowers acquired had a score of 800 and above.

This indicates that the CIBIL TransUnion Score has now become an integral risk assessment tool for banks and financial institutions for sanctioning any new credit. All the banks and financial institutions have started accessing CIBIL reports and CIBIL TransUnion Scores before sanctioning a loan, he said.
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PNB pays Rs 418.61 cr dividend to Centre

Punjab National Bank (PNB) has paid Rs 418.61 crore to the Central Government towards dividend for the financial year 2011-12.

The dividend payment advice for Rs 418.61 crore was handed to Mr Namo Narain Meena, Minister of State for Finance, by Mr K.R.Kamath, Chairman & Managing Director of the bank, here on Tuesday.

Also present on the occasion were Executive Directors, Mr Rakesh Sethi and Ms Usha Ananthasubramanian.

For the financial year 2011-12, this public sector lender had declared a dividend of 220 per cent, i.e Rs 22 per share of Rs 10 each.

The Centre currently holds 56.1 per cent equity stake in the bank. PNB has for the last three financial years been paying a dividend of 220 per cent.
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YES Bank profit soars 34% on income growth

Robust growth in net interest income and other income helped YES Bank report a 34 per cent increase in net profit in the April-June quarter.

The private sector bank clocked a net profit of Rs 290 crore against Rs 216 crore in the year-ago period.

Net interest income (difference between interest earned and expended) rose 33 per cent to Rs 472 crore.

Non-interest income, comprising financial advisory, investment banking, financial markets and fee income, jumped 74 per cent to Rs 288 crore.

Net interest margin (expressed as a ratio of net interest income to average earning assets) was unchanged at 2.8 per cent due to cost pressures, said Mr Rana Kapoor, Managing Director and CEO, YES Bank.

Year-on-year, total deposits rose by 15 per cent on the back of a huge rise in savings bank deposits. Loans grew by 16 per cent.

The restructured assets portfolio was unchanged at Rs 196.5 crore. Gross non performing assets ratio increased to 0.28 per cent as on June 30, 2012 from 0.17 per cent a year ago.

The bank’s total loan loss coverage ratio was at 295 per cent as on June 30, 2012.

YES Bank plans to focus on the retail segment and also look at selective sectors like hospitality, FMCG, healthcare, and education which are less affected by the interest rate changes.

“There is a slowdown in the infrastructure and manufacturing sector. Under the current economic scenario, we will focus on sectors with lower risk and also garner more fee income,” Mr Kapoor said.

The shares of the bank closed at Rs 346.05 a share on Wednesday, up 1.38 per cent from yesterday’s close on the Bombay Stock Exchange.
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Vijaya Bank Q1 net up 54% on lower provisioning, higher interest income

Lower provisioning for NPAs and higher net interest income lifted Vijaya Bank’s first quarter net profit by 54 per cent to Rs 111.36 crore.

The bank provided Rs 130 crore for NPAs this quarter compared with Rs 231 crore for the same period last year.

Total income for the quarter grew 18.8 per cent year on year to Rs 2,319.9 crore (Rs 1,953.4 crore).

Net interest margin grew 7.5 per cent at Rs 455 crore. The bank saw 23 per cent increase in interest income at Rs 2,197 crore.

Mr H.S. Upendra Kamath, Chairman and Managing Director, told a press conference on Wednesday, “Efforts made towards improving asset quality and containing the amount as well as the percentage of delinquent assets at below March 2012-levels paved the way for overall good numbers”. Containment, he said, was the key. It would target more recoveries from NPA- and written-off accounts and closely monitor the loans to check new delinquents.

Operating profit, however, was lower at Rs 258.87 crore (Rs 325.5 crore) but close to the January-March 2012 level.

For the quarter, provision coverage ratio improved to 64 per cent (62 per cent). Gross non-performing assets were kept at Rs 1,693 crore and net NPAs at Rs 979 crore, almost flat at 2.85 per cent and 1.67 respectively.

Advances increased 16 per cent. Total business reached a record Rs 1,45,770 crore or a 15 per cent growth.

For the year 2013, the bank is targeting business worth Rs 1,65,000 crore

To push profitability, the focus would remain on vanilla segments of retail credit and CASA.
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Wednesday, July 25, 2012

Mobile banking has failed to take off in India: RBI

The Reserve Bank of India (RBI) deputy governor H R Khan has hinted that mobile banking has failed take-off in India and hence has called upon banks and mobile companies to work together for the benefit of their customers. At a seminar in Bhubaneswar, Khan said that the growth rate in the value and the volume of mobile based transaction is much lower compared to the number of bank accounts and number of mobile subscribers.

Mobile banking transactions are transactions where customers undertake banking transactions using mobile phones involving credit or debit to their accounts.

This, he said, indicates that that banks are yet to fully exploit this technology even for their existing customers. In May 2012, close to 3.34 mn transactions were concluded for Rs 2.86 bn through mobile as against Rs 1.28 mn transactions of Rs 0.91 bn in May 2011. "This growth rate is low compared to the number of bank accounts and the vast mobile subscriber base of more than 900 mn," said Khan.

He said that Reserve Bank has provided the policy framework for a collaborative relationship between the banks and mobile network operators but 'the results of this collaboration are not yet fully visible.' He said that some of the reasons which have been flagged relates to ownership of the customer, control of transactions and developing an appropriate revenue sharing model.

"The need of the hour, therefore, is that the banks and the mobile operators reach a workable understanding while protecting their mutual interests. Such an approach would result in a "win-win" situation for both and, more importantly, serve the larger cause of public good of financial inclusion," he said.

With rapid growth mobile phone subscribers banks have sough collaboration with telecom operators to develop an alternate channel of delivery of banking services. The RBI allowed bank-led mobile banking model considering the diversity of network providers in India, remittance centric approach of such model and KYC related concerns. As on May 31, 2012, RBI had permitted 69 banks to provide mobile banking services to their customers.

Source: EconomicTimes
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PNB’s mega agriculture credit camp in Perambalur

Punjab National Bank conducted a mega agriculture credit camp in Perambalur near Tiruchi on Tuesday.

This camp was part of the month-long ‘Special Agriculture Credit Campaign’ launched by the bank in mid-June to boost agriculture credit to farmers.

Around 300 farmers attended this camp, in which the District Collector of Perambalur, Dr Darez Ahmed, distributed sanction letters to the farmers.

Though the sanctions were exclusively for agricultural activities, the Collector appealed to farmers to utilise the opportunity and increase agriculture production in the district.

The bank’s Deputy General Manager and Circle Head, Tiruchi Circle, Ms T. Latha, said that timely repayment of the loan would ensure rotation of funds and boost agriculture credit.

She said a similar camp was organised at Pilliyarpatti, the earlier day.

There are 78 branches in PNB’s Tiruchi Circle. These branches have disbursed Rs 56 crore to 6,217 farmers in the last one month.
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Aegon launches online health plan

Aegon Religare Life Insurance Company launched an online health plan today in Mumbai.

Called iHealth Plan, it covers hospitalisation and surgery expenses. This is a fixed benefit plan covering 849 surgeries and provides for lifelong renewal of health cover till the age of 100 years.

An important feature of this plan is that it can be used to provide cover for in-laws in addition to other family members such as spouse, children, parents and siblings.

Mr Rajiv Jamkhedkar, Managing Director and Chief Executive Officer, said the focus of the online plan was simplicity, convenience, premium stability and offering value for customers. He said that their earlier online term insurance plan had about 35,000 customers. Online policies accounted for about a fourth of the total policies sold by the company, he said.
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HDFC Standard Life to roll out more products for women

HDFC Standard Life Insurance plans to launch products targeted at the youth and for people in the age group of over 45 years. The company also plans to roll out products catering to the needs of women customers.

According to Mr Sanjay Tripathy, Executive Vice-President, Marketing and Direct Channels, HDFC Standard Life, the company has already applied to the Insurance Regulatory and Development Authority for its pension product.

The company has announced the launch of Smart Women — its first offering for women customers — on the unit-linked plan platform.

“Under this plan we are primarily catering to the investment needs of women. Depending on the success of this product, we also plan to rollout products catering to the pension, protection and savings needs of women,” Mr Tripathy said here on Tuesday.

Online sales, which currently account for about 3-4 per cent of the company’s total sales, will increase to 10 per cent in 2013-14, he said.
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State Bank of Bikaner profit up 31% in Q1 on higher income

State Bank of Bikaner and Jaipur (SBBJ) reported a 31 per cent growth in net profit at Rs 168 crore in the April-June period on the back of higher interest income and other income.

The State Bank of India associate reported a net profit of Rs 128 crore in the year ago period.

Net interest income (difference between interest earned and interest expended) rose by 33 per cent to Rs 656 crore from Rs 493 crore.

Other income jumped by 63 per cent to Rs 154 crore (Rs 94 crore) due to higher government commission.

According to Mr Shiva Kumar, Managing Director, better management of assets and funds helped the bank increase the net interest margin.

NPAs and Restructuring

Provisions towards bad loans jumped by 148 per cent to Rs 208 crore (Rs 84 crore).

Gross non-performing assets rose by 76 per cent to Rs 1,874 crore (Rs 1,062 crore). The increase in NPAs is mainly on account of the bank’s exposure to Rajasthan State Electricity Board (Rs 1,200 crore) and agriculture loans (about Rs 600 crore).

Mr Shiva Kumar said if the RBI’s draft guidelines on restructuring were to be implemented then there could be an impact on the bank in terms of the provisions that will need to be made.

“Infrastructure sector will remain an area of concern in the asset quality in the coming quarters,” Mr Kumar said.
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LIC Housing Finance net declines 11% on rise in expenses, fall in other income

Increase in expenses, coupled with a dip in other income, weighed down LIC Housing Finance profits in the first quarter.

The company reported a 11 per cent decline in net profit at Rs 228 crore in the April-June quarter against Rs 256.50 crore in the year-ago period.

In the reporting quarter, LICHF’s interest income on housing loans increased by 27 per cent to Rs 1,718 crore (Rs 1,358 crore in the year-ago period).

Total expenses, comprising mainly interest expense and provisions for bad loans, increased by 36 per cent to Rs 1,463 crore (Rs 1,073 crore). Other income dropped by 30 per cent to Rs 21 crore (Rs 30 crore).

Net interest margin, which is the ratio of net interest income to average earning assets, for the reporting quarter was lower at 2.18 per cent (2.78 per cent).

According to Mr V.K. Sharma, Director & Chief Executive, “Business environment has been very challenging….Margins have been under strain owing to the high interest rate regime, high borrowing costs and a lower developer loan portfolio.”

In April-June, developer loan disbursals showed improvement and this is likely to help increase the margins going forward, added Mr Sharma.

Individual loan disbursements increased by 29 per cent at Rs 4,470 crore (Rs 3,468 crore) and developer loan disbursements jumped by 315 per cent at Rs 321 crore (Rs 77 crore).

LICHF, in a statement, attributed the drop in profitability to the decline in the developer loan portfolio and the lower-than-expected developer loan disbursals on account of the overall economic scenario.
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ING Vysya Bank net rises 38% in Q1

ING Vysya Bank has posted 38 per cent increase in net profit at Rs 130.12 crore for the quarter ended June 30, against Rs 94.02 crore, in the same period the previous year.

Total income rose 32.7 per cent y-o-y to Rs 1,342.36 crore (Rs 1,011.29 crore)

Net interest income went up 31 per cent to Rs 343.3 crore. Net interest margin improved to 3.29 per cent (3.02) year-on-year.

The bank notched 48 per cent higher operating profit at Rs 217.5 crore.

It improved its net NPA to 0.19 per cent from 0.35 per cent and gross NPA to 1.97 per cent from 2.15 per cent for Q1 last year.

The CEO and Managing Director, Mr Shailendra Bhandari, said, “We have started the year on a strong note. Advance growth is at 22.9 per cent and deposits at 14.6 per cent. Our cost income ratio has improved to 57.7 per cent from 63.5 per cent resulting in a significant increase in the operating profit growth of 48.1 per cent.”

The bank did not restructure any assets during the quarter. It now has 1,001 outlets including 527 branches and extension counters.
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SKS Micro to step up lending to kirana stores

SKS Microfinance Ltd plans to extend more loans this year to kirana stores and for purchase of mobile phones.

The company would extend loans to 15,000 ‘Sangam’ stores from the present 10,742 stores, Mr M.R. Rao, Managing Director and Chief Executive Officer, SKS Microfinance, said in the annual report for the year 2011-12.

A Sangam store is a kirana store run by an SKS borrower. The objective of the lending initiative is to enable Sangam store owners to buy goods from a wholesale vendor and then resell them in their retail kirana stores. SKS Micro has tied up with Metro Cash and Carry to facilitate delivery of goods to the kirana stores. This would enhance the volume of business done by the stores and meet the working capital needs of store owners.


“On the business front, consolidation of customer base, cross-selling initiatives and diversification have been the key focus areas,’’ Mr Rao said.

The customer base of SKS had come down from 77.2 lakh in the third quarter of the last financial year to 53.5 lakh in the fourth quarter. SKS launched a mobile phone financing programme that offers its borrowers mobile phones at a relatively lower price with the option of paying in small, easy instalments. The company plans to finance up to 5.5 lakh mobile handsets this year. So far, loans have been provided for purchase of 2.8 lakh hand sets. In the core microfinance space, SKS registered 11 per cent quarter on quarter portfolio growth at Rs 1,320 crore in the fourth quarter, in non-Andhra Pradesh regions. The collection figure in 17 States, excluding Andhra Pradesh, was at 95 per cent.
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Higher interest income lifts Canara Bank Q1 net 6.8%

Canara Bank’s first quarter net profit grew 6.8 per cent year on year to Rs 775.24 crore (Rs 725.85 crore)

Total income for the quarter ended June 30 increased 18.9 per cent to Rs 9,165.47 crore (Rs 7,707.59 crore)

The public sector bank posted a 4 per cent higher net interest income of Rs 1,844 crore y-o-y. At a press conference on Tuesday, the Chairman and Managing Director, Mr S. Raman, said the continued de-risking strategy on interest outgo had lifted the net interest margin to 2.4 per cent. Amidst sluggish economic conditions, the bank had cut down high-interest bulk deposits by Rs 10,000 crore during the quarter.

It had also brought down and secured short-term corporate loans by Rs 22,000 crore from Rs 45,000 crore last year.

The goal was to further lift NIM in the coming quarters to 2.6 per cent by the year-end, he said. The bank made a higher NPA provisioning of Rs 477 crore, up from Rs 285 crore. Gross NPAs in the quarter were higher y-o-y at 1.98 per cent (1.67 per cent); net NPAs also higher at 1.66 per cent. (1.34).

Mr Raman admitted “some slippages” in the priority lending segments of MSME and agriculture, which had put a strain of Rs 1,500 crore on the bank in the latest quarter.
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Tuesday, July 24, 2012

Indian Bank Q1 profit up 13 % at Rs 461.7 cr

Indian Bank posted 13.4 per cent rise in net profit at Rs 461.7 crore for the first quarter ended June 30, 2012, over the same period in the previous fiscal.

The state-run bank had posted a net profit of Rs 406.9 crore in the corresponding quarter of last fiscal.

The bank's total income increased by 19 per cent at Rs 3,596.5 crore as compared to Rs 3,030.7 crore in the same period a year ago, Indian Bank said in a filing to the BSE.

The total interest income of the Chennai-based bank rose to Rs 3,373.8 crore as compared to Rs 2,781.4 crore in the same quarter previous fiscal.

Source: Financial Express
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BoB celebrates 105th Foundation Day

Bank of Baroda, Eastern Zone has recently celebrated its 105th Foundation Day. It carried out several welfare activities to mark the foundation day celebrations.

Mr M.L. Jain, General Manager of the Eastern Zone, and Mr S.K. Singhray and Mr Sukumar Saha, Deputy General Managers, distributed computers to Sujay Welfare Society. Fruits and other nutritious food were also given to 250 patients at the School of Tropical Medicine and the National Institute of Homeopathy.

The bank has also organised three free health check-up camps where 396 people were treated.

BoB also opened 56 ultra small branches to deliver banking services as part of its financial inclusion plans. It also opened four rural/semi-urban branches and two ATMs in West Bengal to mark the occasion.
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Allahabad Bank cuts rates on deposits less than Rs 5 cr

Allahabad Bank has slashed interest rates on term deposits of less than Rs 5 crore in the time band of one to less than two years. The interest rate has been reduced by 25 basis points to 9.25 per cent effective July 24, said a bank statement. 

Senior citizens will get additional interest rate of 50 basis points. The revised rate will be applicable for fresh deposits as well as those which come up for renewal.
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IOB to open 15 agri credit branches in Q2

Indian Overseas Bank will open 15 agriculture credit branches during the second quarter of 2012-13.

Addressing presspersons here recently, Mr M. Narendra, Chairman and Managing Director of the bank, said that the bank has planned to create special agriculture credit branches in the country.

In the first phase, 15 such branches will be opened in Karnataka and Maharashtra. These branches will be opened in Belgaum, Bagalkot, Raichur, Hassan and Udupi districts in Karnataka, and Sholapur, Kolhapur and Ratnagiri in Maharashtra.

The bank is targeting sugarcane, paddy, tobacco and other cash crops for the establishment of agriculture credit branches.

Stating that these branches will have agricultural officers as supervisory staff, he said they would meet farmers and also conduct agriculture awareness programmes. Apart from sanctioning agricultural loans, these branches will also process and appraise loan proposals of the nearby branches.

Asked if the bank has set any credit target for these branches, Mr Narendra said: “We want a minimum business of Rs 500 crore from these 15 branches.”

Bagalkot agriculture credit branch, which was set up six months ago, is doing a business of around Rs 100 crore, he said.

Stating that investment credit in agriculture is now the focussed activity of the bank, he said the bank mobilised Rs 610 crore of business in a 45-day investment credit campaign recently. Investment credit helps in creating long-term assets in agriculture.

To a query on agriculture gold loan, Mr Narendra said the banks giving loans against gold is much better than the farmer going to NBFCs (non-banking financial companies) and moneylenders for gold loan.
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Monday, July 23, 2012

Islami Bank Bangladesh, with suspected terror links, had dollar account with HSBC India

Mexico in the summer of 2006 was fun. Spirits were high, the go-go years were still not over, and Lehman was yet to cast its long shadow. On a sunny morning in Mexico City, the British bank HSBC was holding a leadership workshop for some of its bright sparks across markets.

The men and women who had assembled in the training centre straightened themselves with rapt attention as one of the stars at the global bank took the podium. The message that went across to the young managers (largely from sales) was one of the many untold stories behind banking excesses and a harbinger of events that could haunt the organization years later.

"If you have to grow the business take your own calls...the compliance man will only tell you how not to do business." The speaker, whose name figures in the recently released sensational US Senate report on the money laundering deals in HSBC, went on to share the tricks of the trade that had paid off in the Lat Am market. It was so bloody ironic that the guy spoke after a session on "business ethics", recalls someone who was part of the HSBC India team that was flown down for the workshop.

There was a silent flutter. Those at the receiving end of the street-smart wisdom looked at each other, eyebrows raised. "None of us questioned him."

But the man from India voiced his cautious concern while chatting with a member of the bank's global HR (which had organized the event). "They told me to spell out my views in writing...well, I couldn't have done that. He was a big guy," said the banker on Saturday after HSBC hit the headlines last week for wrong reasons.


It's not known whether any of those takeaways from Mexico were implemented in India. Perhaps not, at least not in a scale that happened in other markets: it was also the time banks were pulled up and anti-money laundering rules were tightened, with Sebi unearthing the IPO scam perpetrated through multiple demat accounts.

But the banking operation of HSBC India finds itself in the report for another reason that has gone largely unnoticed. The bank helped another bank with suspected links to terror - Islami Bank Bangladesh had opened a US dollar clearing account with HSBC India. The Bangla bank, one of the largest private sector lenders in that country, has strange shareholders: members of the Al Rajhi group held a 37% direct ownership in Islami Bank Bangladesh. The Al Rajhi Bank of Saudi Arabia was suspected to be a conduit for Islamic finance, according to a 2003 report by CIA.

HSBC India officials are unwilling to discuss anything about the report. Preferring anonymity, one of them said, "It was the account of another bank, not an individual or some shady group. It was natural to assume that it was regulated by the home country regulator."


The Bangla bank would have possibly found it difficult to open a nostro account with a bank in the US; HSBC provided the facility. Though it was a good business decision - given that there were 60,000 Hajj pilgrims every year from Bangladesh - troubling reports on Al Rajhi had surfaced by 2007 when the account was opened. The Bangla bank ran accounts of an international Islamic NGO which was on the alert list of organisations. The bank first froze the accounts (after the NGO came under suspicion), but was later told to "unfreeze" the account (by Bangladesh central bank and ministry of finance) and transfer the funds to the government bank. It's a bizarre turn of events -- something Indian regulators and anti-money laundering agencies should make a mental note of.

The Senate report and some of the stories that are beginning to pop out are grim reminders of how rules can be bent, alerts ignored, and business compulsions can play an overriding role in a bank.

Not many outside banking circles know that since last year the US Office of the Comptroller of the Currency (OCC) has started inspecting American banks' back office and data processing centres in India.

Officials of the US authority check the AML systems and talk to vendors who supply and maintain software at these centres. These centres use AML filters to spot suspicious money transfers by their size, layering of transactions through different entities, odd money flow patterns, etc. But even robust systems can be twisted if compliance can be occasionally undermined in the interest of business. If it could have happened in boom time Mexico, fears are that it may repeat during a downturn in Asia. When business is slow and chips are down, many high-street banks, fueled by greed and low moral fortitude, will find it tough shutting the doors on rich clients who don't like too many questions.

Source: EconomicTimes
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Bank of Maharashtra net rises to Rs 140.46 cr in Q1

Bank of Maharashtra (BoM) on Saturday said it has posted a 15 per cent rise in net profit at Rs 140.46 cr for the first quarter ended June 30, 2012 as against Rs 122.04 cr over the same period in the previous fiscal.

BoM’s total income increased by 22 per cent at Rs 2,217.30 crore as compared to Rs 1,817.6 crore in the year—ago period.

The total interest income of the bank rose to Rs 2,038.50 crore as against Rs 1,644.1 crore in the same quarter previous fiscal.
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Central Bank donates water tanks

Central Bank of India, under its corporate social responsibility programme, has provided water storage tanks in the water shortage areas of Man and Khatav Taluks in Maharashtra. These water storage tanks were handed over to the district administration who will in turn supply the water in the villages. On this occasion, programmes were organized at Dahiwade block office & Waduj tehsil of Satara district, a press release from the bank said.
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SBI plans lead management system for associate banks

State Bank of India plans to roll out ‘Lead Management System’ (LMS) in its five associate banks to help them garner more business.

Under LMS, customers of associate banks can not only access details of products of their respective bank from SBI’s helpline number, but they can also register for further contact by an expert from the bank.

According to a bank statement, the expert will call the customer, resolve the doubts and queries, and help him select a product. LMS is currently available to all SBI customers.

The associate banks of SBI are: State Bank of Bikaner and Jaipur; State Bank of Hyderabad; State Bank of Mysore; State Bank of Patiala; and State Bank of Travancore.

SBI’s helpline offers account-related information, hot listing and tracking of ATM cum debit cards, information about products and services, and registering of complaints.

Though the associate bank customers have been enjoying SBI’s helpline facilities since February, they do not have access to LMS.
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