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Friday, November 2, 2012

Postal Life Insurance setting up full-fledged investment division

Postal Life Insurance, the oldest life insurer in the country, is in the process of setting up a full-fledged investment division for generating optimal returns, according to the Department of Posts.

This move is aimed at ensuring compliance with the Insurance Regulatory and Development Authority’s (IRDA) regulations which disallow outsourcing of the investment function by an insurance company.

The Postal Life Insurance and Rural Postal Life Insurance corpus is currently being managed by SBI Funds Management Pvt Ltd and UTI Asset Management Company.

The assets managed under PLI and RPLI for the year ended 2011-12 were Rs 23,010.56 crore and Rs 9,141.44 crore, respectively.

The funds are deployed, among others in Central and State Government securities, housing, infrastructure, corporate bonds, and equity, as per the investment guidelines prescribed by IRDA.

Postal Life Insurance

Postal Life Insurance was introduced in 1884 as a welfare scheme for postal employees and then extended to the employees of the telegraph department in 1888. Over the years, it has grown from a few hundred policies in 1884 to 50.07 lakh policies as on March 31, 2012.

Postal Life Insurance covers the employees of Central and State Governments, Central and State public sector undertakings, universities, government-aided educational institutions, nationalised banks, and local bodies. It also extends insurance cover to the officers and staff of the defence services and para-military forces.

Rural Postal Life Insurance

Rural Postal Life Insurance was introduced in 1993. The prime objective of the scheme is to spread awareness as well as provide insurance cover to the rural population, especially the weaker sections and women workers. It had 135.47 lakhs policies as on March 31, 2012.
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‘Talking’ ATM machines for visually impaired in UK

New cash machines that can ‘talk’ to customers who have difficulty reading screens have been introduced in the UK.

More than three quarters of Barclays cash machines across England and Wales have had audio technology installed so they can ‘talk’ to customers, the bank said.

Blind and partially sighted people can listen to speech output on more than 3,000 of the ATMs by plugging in their earphones to listen to the options being read out, The Telegraph reported.

Barclays said it is the first major high street bank to provide the facility on such a mass scale up and down the country, which will also help people with dyslexia and anyone who finds it easier to listen to information rather than reading it.

The facility is open to anyone who would normally be able to use the cash machines, so not just Barclays customers, and a spokesman for the bank said the technology will work with most standard earphones.

A Make Money Talk campaign was launched by a UK-based charity, Royal National Institute of Blind People (RNIB), last September, calling for banks in the UK to provide ATMs with audio facilities for their blind and partially sighted customers.

“We are delighted that Barclays has fulfilled its commitment to our Make Money Talk campaign and become the first major bank to roll out speech enabled ATMs,” Fazilet Hadi, RNIB’s group director of inclusive society, said.

“We believe banks in the UK should provide ATMs with audio facilities for their blind and partially sighted customers, across their ATM networks,” Hadi said.
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ICICI Bank offers cash-back for home loans

India's largest private sector lender ICICI Bank launched a new home loan product for new customers with ‘cashback’ offer on each loan instalment.

Available with immediate effect, this product offers customers 1 per cent cash-back on every equated monthly instalment (EMI) for the entire loan tenure. As a part of this offer, customers will be provided the option of renewable fixed interest rates for the entire tenure, the bank said in a statement.

The cashback will start accruing from the first EMI month onwards and will get credited into the customer’s account after the completion of 36 EMI months. Subsequently, the 1 per cent cashback will be accumulated with every EMI month and will get credited to the customer’s account after every 12 EMI months.

It is at customer’s discretion to choose to avail of this cashback offering either in the form of a credit to their ICICI Bank account or in the form of a principal pay-down.

Renew fixed interest rates

Customers have also been given the option to renew their fixed rate loans for tenures of 2/3/5 years at a zero conversion fee within 30 days of completion of the initial fixed rate tenure.

They can choose to renew this multiple times till the completion of the tenure. In case the customer decides not to renew, the loan will move to floating rate by default, the bank said.

After the completion of the initial fixed rate tenure, if a customer decides to renew his fixed rate home loan, the renewable fixed rate will be decided on the prevailing ICICI Bank base rate at that point of time plus the margin decided at the time of sanction of the loan. In case the customer decides not to renew the fixed rate, the floating rate offered to him will also be decided on the prevailing base rate at that point of time plus the margin decided at the time of sanction of the loan.

The EMIs for this product will have to be paid only through auto debit to an ICICI Bank account.
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Postal Life Insurance setting up full-fledged investment division

Postal Life Insurance, the oldest life insurer in the country, is in the process of setting up a full-fledged investment division for generating optimal returns, according to the Department of Posts.

This move is aimed at ensuring compliance with the Insurance Regulatory and Development Authority’s (IRDA) regulations which disallow outsourcing of the investment function by an insurance company.

The Postal Life Insurance and Rural Postal Life Insurance corpus is currently being managed by SBI Funds Management Pvt Ltd and UTI Asset Management Company.

The assets managed under PLI and RPLI for the year ended 2011-12 were Rs 23,010.56 crore and Rs 9,141.44 crore, respectively.

The funds are deployed, among others in Central and State Government securities, housing, infrastructure, corporate bonds, and equity, as per the investment guidelines prescribed by IRDA.

Postal Life Insurance

Postal Life Insurance was introduced in 1884 as a welfare scheme for postal employees and then extended to the employees of the telegraph department in 1888. Over the years, it has grown from a few hundred policies in 1884 to 50.07 lakh policies as on March 31, 2012.

Postal Life Insurance covers the employees of Central and State Governments, Central and State public sector undertakings, universities, government-aided educational institutions, nationalised banks, and local bodies. It also extends insurance cover to the officers and staff of the defence services and para-military forces.

Rural Postal Life Insurance

Rural Postal Life Insurance was introduced in 1993. The prime objective of the scheme is to spread awareness as well as provide insurance cover to the rural population, especially the weaker sections and women workers. It had 135.47 lakhs policies as on March 31, 2012.
Read more »

Union Bank Q2 net rises 57% on better loan recovery

Union Bank of India reported a 57 per cent jump in net profit for the second quarter ended September 30, 2012, at Rs 554 crore due to lower provisioning.

The public sector bank had posted a net profit of Rs 353 crore in the year-ago quarter. Provisioning during the quarter decreased by 22 per cent to Rs 487 crore from Rs 623 crore in the same quarter last year.

Net interest income (the difference between interest earned and expended) increased by 11 per cent to Rs 1,850 crore as against Rs 1,661 crore in Q2FY12. Non-interest income rose to Rs 546 crore, up 9 per cent from Rs 501 crore in Q2FY12.

Net interest margins declined to 3.02 per cent (from 3.21 per cent in Q2FY12). The gross non-performing assets (NPA) ratio increased to 3.66 per cent (from 3.49 per cent), while the net NPA ratio stood marginally higher at 2.06 per cent (2.04 per cent).

The capital adequacy ratio dropped to 11.39 per cent in line with Basel II norms (from 12.54 per cent in Q2FY12).

Post-results, the shares of Union Bank rallied more than 7 per cent to trade at 220.90 on the Bombay Stock Exchange.
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9 more PNB branches in Kerala

The Chairman and Managing Director of Punjab National Bank K R Kamath will inaugurate nine new branches and nine ATMs in Kerala on Friday.

With this, the total outlets of the bank in Kerala will reach 309. The new branches are located at Maradu and Piravom in Ernakulam district, Aroor (Alappuzha), Kothanelloor, and Earattupetta (Kottayam), Varkala and Vizhinjam and Attingal (Thiruvananthapuram) and Wadakkanchery in Thrissur.

K.V. Rajesh, deputy general manager and circle head of the bank said in a statement that the new branches are provided with 24x7 e-lobbies.

The CMD will also launch the co-branded remittance card – PNB Remit Card under tie up with UAE Exchange and Financial Services Ltd.
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ICICI Bank opens second branch in Hong Kong

India’s largest private sector lender ICICI Bank launched its first high street branch in Hong Kong.

This is the bank's second branch in Hong Kong. The new retail branch will supplement the bank's seven-year-old presence here, the bank said in a statement.

In July 2012, the Hong Kong Monetary Authority had approved the commencement of this branch.

It will provide Hong Kong residents and Non-Resident Indians (NRIs) comprehensive access to the bank through products and services like term deposits, current accounts, remittance services and NRI services, the bank said.

Vijay Chandok, President, International Banking for ICICI Bank, said: “This will act as a gateway for companies in Hong Kong wanting to do business in India and visa-versa.”

In Hong Kong, ICICI Bank was granted a banking licence on October 10, 2005 by the Hong Kong Monetary Authority. The bank commenced business on November 14, 2005.
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SBT net up 16% in Q2 on robust interest income

Kerala-based State Bank of Travancore (SBT) posted a 16 per cent rise in second-quarter net profit at Rs 135.63 crore (Rs 116.95 crore, a year ago) helped by an increase in net interest income.

Net interest income (the difference between interest earned on loans and interest expended on deposits) grew 20 per cent to Rs 503 crore against Rs 413 crore a year ago.

Net interest margin stood at 2.50 per cent in September 2012 against 2.63 per cent a year earlier and 2.48 per cent in June 2012.

Total income grew 24 per cent to Rs 2,204 crore.

The bank made a provision of Rs 138.60 crore to cover bad loans in the July-September quarter (Rs 124.08 crore). However, the bank officials said that it earned Rs 21 crore by the way of treasury income which helped it to reduce its provision on the book to Rs 117.60 crore.

The bank earns a significant amount by the way of NRI deposits, which improved 40 per cent to Rs 17,796 crore against Rs 12,604 crore a year ago.

Total deposits grew 21 per cent to Rs 75,352 crore (Rs 62,372 crore).

The bank gets about Rs 40,000 crore every year by way of remittances P. Nanda Kumaran, Managing Director of the bank, said.

According to the bank, 15-18 per cent of its restructured accounts turn into non-performing assets (NPAs).

The total restructured accounts increased by Rs 205 crore to Rs 1,828 crore in July-September period. “One shipyard and a couple of hotel properties that SBT lent to have gone for restructuring,” the bank officials told.

Shares of the Thiruvananthapuram-headquartered, State Bank of India affiliate bank, closed at Rs 515, up 0.78 per cent on the Bombay Stock Exchange.
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MasterCard, Thomas Cook tie up for prepaid travel card

Thomas Cook (India), an integrated travel and travel-related financial services company, today launched its prepaid foreign exchange travel card in collaboration with MasterCard Worldwide.

The ‘borderless prepaid card’ enables travellers with the option of loading eight currencies on a single card - US Dollars, British Pounds, Euro, Australian Dollars, Canadian Dollars, Swiss Francs, Singapore Dollars and Japanese Yen.

It is a multi-currency card with a validity of five years, within which the cardholder can get the visiting country’s currency loaded on the card, thereby, saving money and time. An embedded chip and PIN ensures security and increased protection against counterfeiting and skimming card frauds, the company said.

A free replacement of the card in case stolen or lost within 72 hours and a 24x7 global emergency assistance available via toll free access in over 80 countries.

“We are now focusing more on the retail segment as we see the travel patterns in India are changing,” said Madhavan Menon, Managing Director, Thomas Cook (India). As per a Consumer Segmentation Study conducted by MasterCard in July 2011, 36.7 per cent affluent Indians want to go overseas for a holiday.

The collaboration with MasterCard, a global payments and technology company will provide an acceptance at over 34.3 million merchant establishments, e-commerce websites and access to 2 million ATMs, Thomas Cook said.

T.V. Seshadri Division President, South Asia, MasterCard Worldwide, said: “We see this card as a significant step forward in our goal to become the card of choice for the overseas travellers.”
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KVB sustains growth momentum in tough quarter

The private sector Karur Vysya Bank (KVB) has registered growth in deposits and advances in a difficult market environment during the second quarter of the current fiscal.

While its gross NPA ratio declined in Q2 of this year compared with the corresponding quarter last year, the net NPA edged up marginally.

According to K. Venkataraman, MD and CEO, the second quarter income during 2012-13 FY had gone up by 32.70 per cent to Rs 1,123.64 crore as against Rs 846.76 crore in the same period last year. The net profit also witnessed a sizable increase of 17.16 per cent year-on-year to Rs 132.75 crore (Rs 113.30 crore).

The bank witnessed significant growth in both deposit mobilisation and advances year-on-year in a tough environment. Deposits jumped by 23.32 per cent to Rs 33,444 crore, whereas total advances stood at Rs 25,677 crore, a year-on-year growth of 27.01 per cent. As on September 30, 2012, the total business of the bank was Rs 59,121 crore.

He said net interest income increased by 32.01 per cent year-on-year to Rs 285.77 crore (Rs 216.47 crore) due to the growth in lending as shown by an increase in average advances of 31.64 per cent. Other income too was up by 13.76 per cent in Q2 of this year — from Rs 74.71 crore in Q2 of last year to Rs 84.99 crore during the second quarter this year. However, the net interest margin was down slightly at 3.06 per cent from 3.07 per cent in the same quarter last year but had improved by 24 bps from the first quarter of FY 2013 (2.82 per cent).

Venkataraman said the gross NPA ratio declined to 1.26 per cent from 1.48 per cent and net NPA was at 0.32 per cent in the quarter ending September 30, 2012, as against 0.29 per cent during Q2 last year, with a Provision Coverage Ratio of 75.16 per cent.

The capital adequacy ratio of the bank was strong at 14 per cent (Basel II) that was far higher than the regulatory requirement of 9 per cent. As on date, the bank has 475 branches and 1,011 ATMs.
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Thursday, November 1, 2012

IDBI Bank slashes interest rates home loan, cuts deposit rates too

IDBI Bank on Wednesday slashed interest on home loans by 0.25% and the deposit rates in select brackets by up to 0.50%.

Home loans of up to Rs 75 lakh will be available at par with its base rate at 10.50% while those above Rs 75 lakh will have 0.25% more in interest over the base rate, the bank said in a statement.

A slew of lenders, led by State Bank of India have cut home loan rates as the bankers shift their focus on the retail segment following a slowdown in the corporate segment.

The lender also cut its deposit rate by up to 0.50% after Bank of India. Under the new scheme, deposits of up to Rs 15 lakh over seven years but up to 10 years will fetch an interest of 8.50% per annum against the earlier 9% while the 500-day deposit will fetch an interest of 9% versus the earlier 9.25%. 

Source: EconomicTimes

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Wednesday, October 31, 2012

Higher provisions drags IDBI Bank Q2 net down 6.3%

Higher provisioning, increase in non-performing assets (NPAs) and slower credit growth tempered the net profit for IDBI Bank by 6 per cent in the July-September quarter at Rs 484 crore.

The public sector bank had posted a net profit of Rs 516 crore in the corresponding quarter last year.

Provisioning during the quarter increased by 59 per cent to Rs 495 crore against Rs 312 crore in the corresponding period last year.

Net interest income (the difference between interest earned and expended) grew 11 per cent to Rs 1,249 crore (from Rs 1,122 crore). ‘Other income’ rose 45 per cent to Rs 683 crore, from Rs 471 crore in the year-ago period.

Year-on-year, advances increased by 7 per cent to Rs 1.66-lakh crore, while deposits rose marginally by 3 per cent to Rs 1.80-lakh crore as on September 30, 2012.

The bank’s NPAs increased significantly during the quarter with gross NPAs rising to 3.45 per cent from 2.47 per cent as on September 30, 2011. Further, percentage of net NPAs jumped to 2.04 (1.57).

The capital adequacy ratio stood at 13.91 per cent (13.34 per cent).

The shares of IDBI Bank recovered from yesterday’s lows to close higher by 0.81 per cent at Rs 92.85 on the Bombay Stock Exchange.

IDBI Bank has decided to reduce its interest rates on new floating rate home loans above Rs 30 lakh by 25 basis points (bps). Loans up to Rs 75 lakh would now be available at Base Rate (BR), which is currently at 10.50 per cent per annum.

On loans above Rs 75 lakh, the rate is BR plus 25 bps.

Further, interest on the Home Loan Interest Saver (HLIS) product would go down by 25 bps across all loan slabs, subject to minimum of Base Rate, the bank said in a statement.

The revised rates will come into effect from November 1, 2012.

The bank has also decided to reduce the Retail Term Deposit Rates by between 25-50 bps in seven maturity buckets having maturity of ‘270 days up to 20 years’.

Effective October 1, 2012, the bank had introduced a new maturity bucket “above 10 years up to 20 years” for deposits up to Rs 1 crore.
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HDFC Bank hires three vertical heads

HDFC Bank today appointed heads for infrastructure finance, financial services, healthcare and pharmaceutical verticals.

Former civil servant Ajay Gupta will head the infrastructure finance, while Askhay Dixit will be driving financial services and Abhishek Sharma will look after healthcare and pharma, the bank said in a statement.

“The appointments have been made keeping in mind the larger objective of growing our investment banking business,” Rakesh Singh, Head (Investment Banking), HDFC Bank said.

According to a recent report, the appointments have been done over the last two months anticipating a surge in deal making.

Gupta, a mechanical engineer from IIT Roorkee also holds a Masters from IIT Delhi and an MBA in finance and strategy from the Vanderbilt University in the US, joins HDFC Bank from GE Capital, the statement said.

Dixit, a chartered accountant, joins after seven years at Mape Advisory Group, while Sharma, a qualified doctor, has also worked with Mape earlier, the statement added.
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Karnataka Bank chief calls for alternate delivery channels

Karnataka Bank Managing Director has asked the regional heads to market alternate deliver channels.

Presiding over the review conference of regional heads of the bank here on Wednesday, he said the bank has an array of technology-based products. These products will attract the new group of customers and enhance the convenience to the customers.

These channels should be marketed aggressively through branches to enhance customer service, convenience and comfort. These channels will enable the bank to increase the clientele base and improve CASA (current account and savings account) deposits.

He said it is time for the bank to concentrate more on CASA deposits, retail advances along with reasonable exposure under corporate portfolio to consolidate the growth.

Bhat said that global economy is marked by uncertainty, slowdown is continuing and outlook is not so encouraging. Even though the Indian economy continued to be sluggish, the recent policy initiatives by the Government are expected to improve the investment climate, he added.

The General Manager of the bank, Mahabaleshwara M.S., highlighted the performance of the bank for the half-year ended September 2012. He also spoke on the impact of macro economic developments on banking sector.

The General Managers of the bank, P. Jairama Hande, N. Upendra Prabhu, M.V.C.S. Karanth and Meera Aranha, spoke on the occasion.
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Corporation Bank eyes Rs 20,000 cr loans to SMEs

Corporation Bank is looking to reach Rs 20,000 crore loans to small and medium enterprises (SMEs) by March 2013.

Recently, the public sector bank launched a credit scheme that charges 11.10 per cent (from 11.60 per cent) on loans up to Rs 1 crore to the SME sector. This is to encourage SME lending and fulfil the 40 per cent priority sector lending target.

“SMEs are covered under priority sector lending and direct lending, and this scheme will help us increase our effort to achieve the target mandated by the Reserve Bank of India. In addition, our risks are also spread in this segment,” said B. B. Tejappa, Mumbai Circle General Manager, Corporation Bank. As on September 2012, the outstanding loan by the bank to the SME segment stood at Rs 15,784 crore.

Currently, the SME segment contributes to about 15 per cent of the total credit. In its festival offer, the bank is also giving an additional 25 percentage point discount to women entrepreneurs along with 50 per cent waiver in processing fees.

The scheme, which was launched from October 20, will last till January 31.
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PNB to roll out self-service counters in 500 branches this fiscal

Nearly 500 branches of Punjab National Bank (PNB) will be known as ‘PNB Pragati’ branches by the end of the fiscal.

Speaking to newspersons on the sidelines of the inauguration of a self-service counter of a ‘PNB Pragati’ branch of the bank here on Wednesday, K.R. Kamath, Chairman and Managing Director, said that the bank has taken up a transformation exercise with its stakeholders.

The aim is to infuse fresh energy and initiatives for business excellence.

The introduction of self-service counters is an effort to empower customers.

He explained that every ‘Pragati’ branch would have a well-laid service area equipped with passbook printing terminal, cash deposit machine, cheque deposit machine and an ATM to take care of the basic requirements of customers.

Stating that ‘PNB Pragati’ concept was launched in 50 branches in the country on a pilot basis, Kamath said nearly 500 branches will be known as ‘PNB Pragati’ branches by the end of this fiscal.

Comparing the self-service areas in such branches to those of buffet counters in hotels, he said such self-service areas saves time for them. The customers don’t have to stand in queues to complete their works.

Giving the example of branches in Delhi, he said the waiting period of customers came down from 40 minutes to 10 minutes there after this concept was introduced.

Generally, 40 per cent of customers come for transactions such as updating passbooks and depositing cash/cheques. Their needs are met in these self-service counters, he said.

The layout of a ‘Pragati’ branch depends on the customer profile of a branch and the requirements of those customers.

If such counters are placed outside the branch premises, for example, in an ATM outlet, then such counters are called as e-lobby, he said.
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Insurance premium collection down 4.2%

The total premium collections of the life insurance industry in the country have gone down by 4.2 per cent in the first six months of the current fiscal to Rs 46,963 crore.

The premium collected during the April-September period of last fiscal was Rs 49,046 crore, according to the statistics supplied by the industry regulator— Insurance Regulatory and Development Authority (IRDA).

The total premium collections of Public sector insurer LIC has gone down by 3.75 per cent to Rs 35,342 crore in the first half from Rs 36,721 crore for the corresponding period last year.

The dent was caused by the huge drop in Group non-single Premium collections of LIC which was pegged at Rs 765 crore in the first six months against Rs 6,322 crore last year.

This has pushed down the total industry Group non-single premium collections to Rs 2,552 crore this year from Rs 8,005 crore during the first half of last fiscal.

As far as private life insurers are concerned, the total premium collection has gone down by 5.7 per cent to Rs 11,622 crore in the period from Rs 12,325 crore during last fiscal same period.

The drop was largely due to the downfall in individual single premium collections which was registered at Rs 962 crore in the first six months against Rs 2,102 crore in the last year.

However, Non-life industry has shown a significant growth in terms of premium collections in the first six months.

Both Public and private sector insurance companies have collected Rs 34,001.9 crore in the first half against Rs 28,607.03 crore in the last year registering a growth of 18.9 per cent.

While the four state-owned non-life insurers collected Rs 19,876 crore, private players have collected Rs 14,125 crore from April to September this year.
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IDBI Bank approves merger of Stock Holding Corpn

The board of IDBI Bank has given itsapproval to the merger of Stock Holding Corporation of India with the bank.

“Valuation is yet to be done,” said a senior official of SHCIL. “Further, approval from the Bombay High Court is also required,” he added.

IDBI shares will be issued to SHCIL shareholders in an all-stock deal after the valuation is worked out by our merchant bankers.

“They will also work out the scheme of amalgamation in the next few days. We expect approvals from the RBI, SEBI, court and the Government to be finalised in the next 4-6 months,” said B. K. Batra, Deputy Managing Director, IDBI Bank. “The merger will augment our branch network by 20 per cent with an addition of 227 branches and employee strength by eight per cent,” he said.

“Our retail client base will increase by nearly eight lakh,” he added.

“We will be able to offer custodial services, document storage and digitisation, and other services of SHCIL. It will also help us better our cross-selling business to the new clients,” said Batra.
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LIC Housing Q2 net zooms as provisioning drops steeply

LIC Housing Finance posted a more than two-fold increase in second quarter net profit at Rs 243.05 crore against Rs 98.39 crore last year.

The company earned higher interest income on housing loans and made lower provisions in the quarter.

The Mumbai-based lender earned an interest income of Rs 1,808 crore, which is 24 per cent more than that of the year-ago period.

Total provisions dropped to about Rs 7 crore from Rs 204.69 crore a year earlier. This is primarily because of an absence of a one-time provision that it made in the last fiscal to meet the regulatory requirements.

“During the financial year 2011-12, the company had aligned its provisioning policy on standard/NPA accounts to match the revised NHB norms,” the home finance firm said in a statement.


The company said that its individual loan disbursements rose 21 per cent to Rs 5,716 crore.

“It is encouraging to note that there is a 10 per cent increase in number of customers, which is a very good sign. Also, the incremental costs of funds are showing some trends of easing,” V. K. Sharma, Chief Executive, said.

LIC Housing Finance’s larger peer, HDFC, posted an 18 per cent jump in net profit last week because of growth in retail loans. It’s smaller peer Dewan Housing Finance Corp (DHFL) posted a 19 per cent increase in net profit on the back of rising loan disbursements.

Shares of the company closed at Rs 242.95, up 0.27 per cent on the Bombay Stock Exchange.
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Banks can't lend to jewellers for purchase of gold: RBI

After putting curbs on non-banking finance companies (NBFCs) lending against gold, the Reserve Bank of India on Tuesday banned banks from lending for purchase of gold by jewellers.

"No advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilised for purposes of financing gold purchase at auctions or speculative holding of stocks and bullion," the RBI said in its half-year review of the monetary policy. The RBI has been concerned over banks' exposure to gold finance companies and has taken steps to curb it.

Earlier this year, the central bank asked banks to reduce their exposure to NBFCs giving loans against gold, as it was concerned by the significant rise in gold imports in recent years. The RBI set up a working group to suggest ways to deal with the rising imports of gold.

The central bank said that direct bank financing for purchase of gold in any form - bullion or primary gold, jewellery, gold coin - could lead to fuelling of demand for gold for speculative purposes.

RBI governor D Subbarao said this step is more of a reiteration of an old policy and banks should not finance gold purchases unless it is a working capital need for a jeweller.

In March, the RBI has restricted NBFCs from lending against bullion.
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Tuesday, October 30, 2012

SBI hints at reducing lending rates soon

Within hours of RBI slashing the Cash Reserve Ratio (CRR) by 0.25 per cent, State Bank of India (SBI) today hinted at a likely reduction in lending rates soon.

“Our bank, it’s for ALCO to take a view. But we would prefer a more secular rate cut with the adjustment in the base rate because we have almost (done) rebalancing of the portfolio... but it is for ALCO to take a final view,” SBI Chairman Pratip Chaudhuri said at the press meet after RBI unveiled half-yearly review of credit policy.

“I think our ALCO (asset liability committee) would meet in a day or two,” he said.

At present, the base rate of SBI stands at 9.75 per cent.

The bank last reduced its base rate downward on September 20 by 0.25 per cent.

The CRR, or the portion of deposits banks have to park with the RBI, now stands at 4.25 per cent, while the repo rate at which RBI lends to the system, has been left unchanged at 8 per cent at the second quarter review of the monetary policy.

Highlighting the impact of interest rate cut on the retail loan demand, Chaudhuri said, daily home loan sanction has tripled following the rate cut by the bank in August.

“We have greatly benefited by rate cutting because now the growth is coming in the retail segment which is rate sensitive and ever since we have dropped our home loan rate our daily sanctions have almost tripled. Home loan sanctions used to be Rs 65 crore, now there are about Rs 150 crore per day,” he said.

The bank had reduced lending rates on car and home loans by up to 0.6 per cent in August.

Earlier this month, SBI reduced the processing fee on home and auto loans by 50 per cent to cash in on festive season demand.

For home loans up to Rs 25 lakh, the processing charge is 0.125 per cent of the loan amount from 0.25 per cent.

In case of loans between Rs 25 lakh and Rs 75 lakh, the processing fee is Rs 3,250 as against Rs 6,500, while loans above Rs 75 lakh, it is flat Rs 5,000 as compared to Rs 10,000 per application earlier.

With regard to auto loan, the processing charge has been slashed to 0.255 per cent of the loan amount as against 0.51 per cent.
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StanChart operating profit grows by mid single digit

Standard Chartered Plc today said the group’s operating profit has grown at a mid single digit rate in the first nine months of this year driven by good momentum across its businesses and geographies.

However, the company did not provide details.

According to its Interim Management Statement, the year to date income grew at “a mid single digit rate”, maintaining the trajectory seen in the first half of 2012 driven by the strength of the dollar against Asian currencies.

Standard Chartered has continued to perform strongly in the third quarter of 2012. Although the environment remains turbulent, we are in the right markets and continue to see good momentum across our businesses and geographies,” Standard Chartered Group Chief Executive Peter Sands said in a statement.

Geography-wise, Hong Kong, China, Indonesia and the Americas, UK and Europe region have delivered strong performances, it said.

The robust performance of Standard Chartered in these geographies has more than offset the continued currency weakness impacting India’s growth, a slowdown in Singapore’s wholesale banking business and a muted consumer banking performance in Korea, the statement added.

“We manage the Group conservatively with costs controlled tightly and risk well managed. Our balance sheet philosophy remains a source of competitive advantage with a focus on diversity, high levels of liquidity and a strong capital position,” Sands said.

The Interim Management Statement, excludes the impact of the UK bank levy but includes a payment of $340 million made to the New York State Department of Financial Services (NY DFS).

Excluding the NY DFS settlement, the Group’s operating profit for the year to date has grown at a double digit rate, the statement said.

“We continue to see growth on both sides of the balance sheet with inflows of deposits and continued disciplined loan growth highlighting the strength of our franchise,” the release said adding that the “advances to deposit ratio remains strong and was below 80 per cent at the end of the third quarter.”
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Muthoot Finance raises Rs 286 cr from NCD issue

Gold loan company Muthoot Finance has raised Rs 286 crore from its just concluded non-convertible debenture (NCD) issue, a top company official has said.

The company had tapped the market in September with a Rs 250-crore NCD issue with an option to retain oversubscription of up to Rs 250 crore.

Of the Rs 286-crore mobilised, as much as Rs 146 crore came from institutional investors and Rs 140 crore from retail investors, Oommen Mammen, Chief Financial Officer, told Business Line.

This is the first NCD issue for the company this fiscal and the fourth since August last year.

A large proportion of the response to the latest NCD issue came in for the two-year instrument which had a coupon of 11.5 per cent per annum. The recent NCD issue was to originally close on October 5, but later extended to October 22.

Mammen did not rule out further NCD issues this fiscal. The company is yet to decide on the timelines, he noted.

Muthoot Finance is eyeing only 5-10 percent growth in assets under management this fiscal, Mammen said, adding that the current fiscal is being treated as a consolidation phase.
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RBI maintains status quo on policy rates; cuts CRR by 0.25%

The RBI maintained status quo and left its key repo rates unchanged.

The repo rate remains at 8 per cent, at the same level that it has been for the past six months. This was in line with the hint thrown in its review of macroeconomic and monetary developments released yesterday evening, that it may cut policy rates 'down the line'.

In doing so, the RBI chose to not oblige the Government expectations that it would cut rates in response to policy measures unveiled over the past month as well as the 5-year fiscal consolidation plan released yeseterday. The government hopes to cut the fiscal deficit to 3 per cent of GDP over the next five years.

For the current fiscal, the Government has admitted that keeping the fiscal deficit to the budgeted 5.1 per cent would be difficult while 5.3 per cent was doable.

Infuses liquidity into the system

The RBI, however, cut the Cash Reserve Ratio (the amount parked by banks with the RBI) by 25 basis points from 4.5 per cent to 4.25 per cent. This measure is expected to infuse Rs 17,500 crore liquidity into the system.

The RBI said in its guidance, "The reduction in the CRR is intended to pre-empt a prospective tightening of liquidity conditions, thereby keeping liquidity comfortable to support growth. It anticipates the projected inflation trajectory which indicates a rise in inflation before easing in the last quarter. While risks to this trajectory remain, the baseline scenario suggests a reasonable likelihood of further policy easing in the fourth quarter of 2012-13. The above policy guidance will, however, be conditioned by the evolving growth-inflation dynamic."

It expected these actions to enable liquidity conditions to facilitate a turnaround in credit growth to productive sectors so as to support growth; reinforce the growth stimulus of the policy actions announced by the Government as inflation risks moderate; and anchor medium-term inflation expectations on the basis of a credible commitment to low and stable inflation.

The RBI has also been paring its GDP growth forecasts through successive quarterly reviews. In its April policy, the RBI had projected a GDP growth forecast of 7.3 per cent. That was cut to 6.5 per cent in July and further to 5.7 per cent yesterday. Simultaneously, the RBI has also revised upwards its baseline projections for WPI inflation. This has been raised from 6.5 per cent given at the beginning of the fiscal to 7.5 per cent for March 2013.
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Monday, October 29, 2012

Smart ATMs to count cash, read cheques and credit in real time

New smart ATMs that can count your cash, read the cheques and credit it to your account immediately at any hour are on the way.

“We’ve already rolled out 40 ATMs that can do that and we’ll have 150 of that type out by the end of this financial year,” the Commonwealth Bank’s executive general manager of retail products, Michael Cant, said.

“You deposit your cash or a cheque into an ATM that’s smart enough to count the cash, read the cheque ... and credit that immediately to your account,” Cant said.

Australian Bank ANZ is also set to introduce 800 ATMs by the end of the 2012-13 financial year that have the ability to deposit coins, notes and cheques and have them instantly credited to the customer’s account, ‘’ reported.

Cant says customers will also be able to personalise their settings on ATMs that will pop up each time they use it.

“When you put in your card, it identifies you as the customer and preferences that you set,” he says.

The smart ATMs will also be able to read the EMV (EuroPay, MasterCard and Visa) chip instead of the magnetic strip on a card.

This will improve customer security, with the card’s chip containing encrypted information, making it harder for fraudsters to skim details, the report said..

Digital strategy agency New Republique spokesman Nima Yassini says banking is being redefined in a digital age.

“A lot of stuff you saw in the branch network is slowly shifting to ATMs. So you don’t have to queue up to put your cash or cheques in at the branch,” Yassini said.
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SKS Micro pares net loss in Q2 to Rs 262 cr

SKS Microfinance reported a net loss of Rs 262.15 crore for the quarter ended September 30, as against a net loss of Rs 384.54 crore in the year-ago period.

Total income from operations was Rs 77.56 crore, as against Rs 121.83 crore in the second quarter of last fiscal.

India’s only listed microfinance firm said its loan disbursement in non-Andhra Pradesh States rose 25 per cent to touch Rs 690 crore during the quarter. Andhra Pradesh’s microfinance sector has been facing a crisis since October 2010.

Its core interest income in non-Andhra Pradesh States increased 7 per cent to Rs 68 crore. “The increasing growth momentum in non-Andhra Pradesh States helped the company report lower operating loss. During the quarter, the firm’s Andhra Pradesh portfolio reduced to zero from a high of Rs 1,491 crore before the crisis in October 2010,” it said in a statement.

S. Dilli Raj, Chief Financial Officer, said the company’s strategy to optimise its cost structure and cash-flow management helped it weather the AP microfinance crisis.

Its net worth stood at Rs 386 crore and capital adequacy at 37.1 per cent as of September 30.
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RBI cautions on fake notes, SMS

The Officials of Reserve Bank of India have advised people to be vigilant about fake notes and fake SMSes. Talking to a gathering on financial literacy aspects, they explained the features of genuine currency notes.

A.S. Rao, Regional Director, RBI, in his remarks at an RBI’s urban financial inclusion-cum-outreach programme recently said the apex bank was making efforts to inform the general public about financial literacy aspects through these efforts.

Syndicate Bank, which organised the event, mopped up 2,000 new savings bank accounts as part of its efforts in financial inclusion, at the Natco Government High School here.

The Programme was designed in consultation with the local people of Borabanda and with their participation. The area is surrounded by Bastis inhabited by daily-wage earners and lower middle class people. Syndicate Bank donated/sponsored a range of activities designed to help the people, a release said.

M. Anjaneya Prasad, Executive Director, Syndicate Bank, told the gathering that the bank was taking lot of initiatives to extend various banking facilities to the needy people at affordable cost. T.R. Viswanathan Nair, general Manager Syndicate bank, Hyderabad said the bank has adopted the locality and shall work with the people in the coming days for their welfare.

The Local Self Help Groups put up stalls at the venue in the exhibition cum sale of products manufactured by their members. Loan sanction letters/cheques were handed over to 18 Groups and to 22 beneficiaries under various Govt. sponsored schemes, the release added.
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IOB recasting lending strategy to tackle bad loans

Faced with rising bad loans, Indian Overseas Bank (IOB) is changing its lending strategy.

The public sector bank will place more thrust on loans to the retail, small and medium enterprises and agriculture segments even as it goes slow on corporate loans, said a top official.

The bank, which added bad loans aggregating of Rs 1,854 crore in the July-September quarter, has revised its credit growth target for this fiscal from 20-22 per cent projected earlier to 16-18 per cent.

Narendra said the economic slowdown could see overall accretion of Rs 4,000 crore to the bank’s bad loans portfolio in FY13. However, IOB expects to make recoveries amounting to about Rs 1,800 crore this financial year.

Hurdles to recovery

The IOB chief pointed out that clients were putting hurdles in the recovery process. For example, a borrower to whom the bank had a loan exposure of Rs 40 crore got a stay on the recovery proceedings from the Debts Recovery Tribunal by paying just Rs 2 lakh to the Tribunal.

In this regard, Narendra said the Finance Ministry has called a meeting of top recovery officers of public sector banks on October 30 and 31 to take stock of the problems being faced by banks when it comes to loan recovery.

As on September-end 2012, IOB’s gross non-performing assets, including domestic and overseas bad loans, stood at Rs 5,930 crore (Rs 3,898 crore as on September-end 2011). The gross NPA to gross advances ratio was higher at 3.87 per cent (3.07 per cent). Industry accounts for almost 43 per cent of the bank’s total domestic NPAs of Rs 5,310 crore; services (24 per cent); and agriculture (14 per cent).

Base rate

ADM Chavali, Executive Director, IOB, said the bank will cut the base rate (the minimum benchmark lending rate below which no bank can lend) only if the Reserve Bank of India pares the repo rate (the interest rate at which RBI lends funds to banks).
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Bank of Baroda plans to expand branch network in Karnataka

Bank of Baroda, which has 80 branches in Karnataka, will open another 20 by March-end, according to an executive. M. D. Mallya, Chairman and Managing Director of the bank, said with the opening of the new branches, the total number will cross 100 in Karnataka.

Added to this, the bank has 33 onsite ATMs and 19 offsite ATMs in the State.

Financial inclusion

In its financial inclusion efforts, the bank has engaged 13 business correspondents in the villages allocated to it in Karnataka.

He said the bank sees Karnataka as a potential industrial and trading region, that can attract substantial inflow of funds and create opportunities for speedy growth.

The credit processing and delivery systems of the bank have been centralised with retail and SME loan factories. These loan factories that operate on assembly line principle are well geared up to serve customers more efficiently and quickly.

He said the customer services, after-sale services and wealth management services have been put on the fast-track by linking them to dedicated city sales and city back offices managed by specially trained employees.

Advisory services

The bank has been co-ordinating with State-level bankers committee, State enterprises, corporate sector, industrial parks and infrastructure units to offer specialised funding and advisory services, he said.

The bank opened its 81st branch in Karnataka, the ninth branch in Mangalore region on Saturday.

M. M. Reddy, General Manager (Karnataka and Andhra Pradesh zone), and J. Ganesh Kumar, Deputy General Manager, Regional Office (Karnataka), were present on the occasion.
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Bank of India net falls 38.5%

Bank of India has reported a 38.53 per cent drop in its second quarter net profit at Rs 301.85 crore against Rs 491.11 crore in the year-ago period.

Total income of the public sector bank increased 15 per cent to Rs 8,899.55 crore (Rs 7,728.16 crore).

Shares of the bank were trading at Rs 276.10 per share at 2.45 pm on the BSE, down 3.78 per cent from the previous close.
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RBI must not dither over issuing new bank licences

In the history of Indian banking, possibly no other developments have had as much fundamental and revolutionary impact as the overnight nationalisation of banks in 1969. And, then, some 25 years later, pursuant to the Narasimham Committee recommendations, the RBI giving out licences to set up new commercial banks in the private sector.

At their respective times, both these momentous steps, had phenomenal positive impact and rewrote the rules of the game for Indian banking. The structure and the system that we have today is, unarguably, the result of these two developments.

Even as the so-called new-generation private sector banks grew at a fast pace, eating into the market shares of the older public sector and private banks, it is critical to understand that they also created new products/services, new mix of revenues-costs-profits and, thereby, made the entire banking system reorient basic business models.

For more than three years now, interested parties have been voicing both for and against starting the next phase, that is, of allowing the entry of more private banks.

The then Finance Minister, Pranab Mukherjee, in his 2010 Budget speech, announced that business houses and NBFCs (non-banking finance companies) would be allowed to set up banks. This generated a lot of interest. Since then, there have been many strong voices on this subject.

The RBI itself has discussed this, notable being its view that licences would be given only after the Banking Laws Amendment Bill is passed by Parliament.

More banks needed?

In one sense, this question is irrelevant, as the number of players will, just as in any other industry, from time to time be determined by the marketplace through forces of competition. It will be foolish to assume that the RBI has any interest in appropriating this role to itself.

In another sense, it is also a settled question from the RBI’s point of view itself, as the central bank has had a long consultative deliberation process with the draft guidelines for licensing released more than a year back, in August 2011. And back in August 2010 there was a ‘discussion paper’. Recently, the RBI also put out comments on the draft guidelines. To put it simply, it has been a very long and boring stretch of ‘groundwork’.

Hesitating to move ahead?

Last year, at Bancon-2011, C .Rangarajan, Chairman, PMEAC, while pitching for moving ahead with allowing entry of more banks, said: “A closed system can only become oligopolistic. The ‘threat’ of entry should not be eliminated.” And knowing Rangarajan, it would be ridiculous to construe this as merely the “Government’s view”. While the RBI’s cautious approach is just perfect and laudable, its continuing discomfort to move at all is somewhat perplexing.

The more contentious issues such as allowing industrial houses to set up banks and protective mechanisms for that have all been thrashed out.

Eligibility norms, requirement for non-operative, non-leveraged holding company structure, floor and caps for promoter holding pre- and post-public listing — are all conceptually well-defined and widely understood.

In any case, it is not going to be some kind of ‘automatic’ licensing. Possibly, a committee to be set up will go through the licence applications and subject them to a very tough evaluation. And the RBI will any way ultimately release a certain number of licences.

For those who are familiar with the licensing history of the 1990s, the application for a bank with a focus on a particular State, with four different parties jointly promoting the bank, and the fact that the proposal finally did not find approval is proof enough that the RBI’s evaluation process would be systematic, fair and sound.

Ideal licensees

There is another important angle that must be considered here. While allowing only the most deserving applicants is important, India’s own experience in the last two decades clearly has proved the fallacy of there being some kind of perfect promoters and RBI finding them ab initio at licensing stage.

Business environmental changes and revised strategic priorities of the promoters can also result in a need for market-driven or regulator-assisted restructuring exercises.

Public memory is ultra-short but it is valuable and illuminating to refresh our memories of Times Bank and its eventual merger with HDFC Bank; Global Trust Bank and its rescue by merger with the public sector Oriental Bank of Commerce; Centurion Bank along with Bank of Punjab being now inside of HDFC Bank; Ashok Leyland Finance being part of IndusInd, and so on.

The RBI, in each of the aforementioned and other situations, has undoubtedly done a commendable job as the regulator. The point here is, it is this experience that should make the RBI go ahead with allowing some more players into the system.

While it is difficult and futile to speculate as to who will get to set up banks if and when allowed, there are, without doubt, a large number of interested and good applicants. Apart from the top business houses, reports suggest that NBFCs such as L&T Finance Holdings, Religare and Indiabulls would possibly apply. An interesting possibility is that of India Post applying for setting up Post Bank of India.

Time to go ahead

At times, one cannot but help feel that everyone else — the Government, the experts, the industry, the business community — seems to have a lot more confidence in the RBI than what the apex bank has in itself.

Else, there is no solid explanation for the hesitant approach in this area . The RBI should immediately announce the window for applying for licences, also specifying the date for awarding the first batch of licences.

Just as one never liked the SBI to be allowed to become too big, one wouldn’t want an ICICI, HDFC or for that matter any other bank to be too big either.

Let there be more competition. Let the next phase of banking revolution begin. The RBI must act. Not with just guidelines but with dates and deadlines.

(The author is a management consultant. The views are personal.)
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Muthoot Finance net rises 25% in Q2

Muthoot Finance Ltd’s net profit rose 25 per cent to Rs 268 crore in the second quarter of this fiscal from Rs 215 crore in the corresponding period last year.

The retail loan assets under management increased by Rs 405 crore to Rs 23,743 crore in the quarter.

For the half year ended September 30, the net profit rose 27 per cent to Rs 514 crore from Rs 406 crore in the year-ago period.

The total income in H1 FY13 stood at Rs 2,610 crore (Rs 2,024 crore in H1 FY12), a growth of 29 per cent.

Public shareholding

The board at a meeting on Monday decided to raise the public holding of its shares to 25 per cent from the current 19.88 per cent by May 2014 to comply with the SEBI stipulation on minimum public holding.

This dilution may be through any of the modes approved by SEBI from time to time in one or more tranches.

M. G. George Muthoot, Chairman, said that the half year gone by has been extremely challenging for gold loan NBFCs, owing to the unequal playing field created by 60 per cent loan-to-value cap made applicable only to NBFCs.

Also, because of the negative perception about the sector, asset growth has decelerated and borrowing costs have gone up considerably.

Despite these adverse developments, the company, he said, has been able to improve its profitability through ingenious funds management and cost control.

The capital adequacy ratio has risen to 19.95 per cent and loan losses for the six-month period were a negligible of 0.014 per cent (Rs 3.25 crore) of the retail loan portfolio, he said.
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Sunday, October 28, 2012

HDFC Life to launch immediate annuity plan in Dec

HDFC Standard Life Insurance Company Ltd (HDFC Life) will launch an immediate annuity plan in December, a top company official has said.

HDFC Life has got insurance regulator IRDA’s approval for this product — HDFC New Immediate Annuity Plan — last week, said Sanjay Tripathy, Executive Vice-President, Marketing & Direct Channels.

He said that the new product will offer 11 annuity options for single and joint lives.

“Annuities are an established category in international market. We feel there is a lot of potential for growth in this category in India and hence the decision to launch an immediate annuity plan.’’

An immediate annuity is one that makes income payments immediately or very soon after the purchase of the contract. They do not have an accumulation period.

One can go in for an immediate annuity when you want to start taking income at the earliest. This product may be best suited for those in the 55 plus age bracket and will go in for retirement in the next few years, Tripathy said.

Immediate annuity is in sharp contrast to deferred annuity, where annuity payments are available only after a certain accumulation period.

HDFC Life is also looking to launch more health insurance products in the coming days and IRDA approval has been sought for this purpose, he said.
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Religare plans to launch travel insurance product

Religare Health Insurance, a standalone health insurer, plans to launch travel insurance product before the close of the current fiscal, Anuj Gulati, Managing Director & Chief Executive Officer, has said.

“We do have plans to launch a travel insurance product for outbound overseas travel. We will approach it in a phased manner and do it before the fiscal year ends,’’ Gulati said.

Religare Health Insurance is a recent entrant to the health insurance market and formally started its commercial operations last fortnight. Health insurance is the fastest growing segment in the insurance industry.

Gulati said that the company had already filed two products — personal accident and critical illness — for IRDA approval.

“Our plan is to try and launch all these three products this fiscal year.’’

The company has already launched its first product ‘Care’, which offers a host of industry first features including a wide range of sum insured — up to Rs 60 lakh. There is also the option of availing specialised treatment anywhere in the world.

This product also allows automatic recharge of sum insured in case the claims exhaust the coverage, Gulati said.

Religare Health Insurance has opted to build in-house cashless claims management capability. It has decided against appointment of third party administrators.

Since the date of its commercial launch, this health insurer has underwritten policies to the tune of Rs 14 crore.
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Central Bank banks on property expos to boost home loans biz

In a bid to grow its home loan portfolio, Central Bank of India plans to bring residential project developers and prospective home buyers under one roof by organising property expositions across the country.

The public sector bank plans to ramp up its home loan portfolio from Rs 6,800 crore as on September 30 to Rs 10,000 crore by March 31 next year.

Pointing out that the size of the bank’s home loan portfolio was not commensurate with its network of 4,100 branches, Chairman and Managing Director M.V. Tanksale said the idea behind the property expositions is to get more home loans business.

At its recent maiden two-day property exposition ‘Swapna Sankul-2012’ in Mumbai, the bank gave in-principle approval to home loans aggregating about Rs 50 crore. The bank will replicate the Mumbai property exposition model across the country, said Central Bank chief.

“Home loan is one segment which offers a lot of opportunity to expand our loan book. These loans currently account for 4.5 per cent of our total loan book. We hope to increase the share of home loans to 7-8 per cent of total loans by March-end 2013,” said Tanksale.

As part of its retail loans push, Central Bank of India had cut interest rates on home loans and car loans by 10 basis points (bps) and 150 bps, respectively, with effect from September 1. A basis point equals one-hundredth of a percentage point.

The bank had also reduced the interest rate on personal loans and loans against gold by up to 200 bps and 100 bps, respectively. Besides, it waived processing charges on retail advances.

Central Bank is offering home loans up to Rs 30 lakh at its base rate of 10.50 per cent; above Rs 30 lakh to Rs 75 lakh at 10.65 per cent; and above Rs 75 lakh at 10.90 per cent.

According to R.K. Dubey, Executive Director, Central Bank of India, the bank has tied up with the Odisha, Bihar and Madhya Pradesh State Governments to provide their employees home loans at affordable rates. It plans to enter into similar tie-ups with other States as well.
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Sundaram BNP Paribas Home net jumps 60%

Sundaram BNP Paribas Home Finance’s net profit jumped 60 per cent in the second quarter of the current financial year compared with the corresponding quarter in the previous year.

For the quarter ended September 30, it reported a net profit of Rs 34 crore (Rs 21 crore) on disbursements of Rs 682 crore (Rs 454 crore). Assets under management stand at Rs 5,070 crore (Rs 3,493 crore).

Rapid increase in market reach, stable real estate sentiments in the South and “close to customer” strategy contributed to the growth, said Srinivas Acharya, Managing Director, Sundaram BNP Paribas.

The company hopes to reach targeted disbursement of Rs 2,500 crore for the current year.

Usually, the home loan market gets more active in the second half of the year, he said.

The company is “bullish on the real estate market in the South” and focuses on the first-time home buyer.
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Corp Bank aims to sanction Rs 7,000 cr loans in festive season

Seeking to aggressively expand business in the retail segment, Corporation Bank today said it aims at providing Rs 7,000 crore loan in the ongoing festive season.

“The bank aims for total disbursement of Rs 7,000 crore pan-India, including Rs 1,000 crore in Delhi and NCR region, this festive season,” S M Swathi, General Manager (Delhi Circle), Corporation Bank said.

She also said the bank expects to achieve 40-48 per cent growth in retail portfolio, including home and car loans during the year.

“We have already achieved 24 per cent of growth in retail and expect to achieve 40-48 per cent this year,” Swathi said after inaugurating the bank’s ‘Home Loan Expo’ in Gurgaon.

The state-run bank will offer home loan at base rate with no processing charges to the customers who will book property at the expo.

With a view to cater to the SME segment, the bank has launched exclusive SME Loan centres in 14 cities across the country, she added.

To encourage SME entrepreneurs, the bank has recently launched a festival loan bonanza for them, under which it would offer 50 basis points concession on interest rates applicable on 10 SME credit schemes.
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