In expose 4, Kejriwal guns for Swiss account holders

Training its guns on black money stashed in Swiss banks, India Against Corruption (IAC) on Friday called for an immediate halt to operations of HSBC in India, alleging its involvement in money laundering and hawala.

At a packed press conference here, Arvind Kejriwal and lawyer Prashant Bhushan of IAC said their allegations were based on the list of 700 people who, they claimed, had accounts in HSBC’s Geneva branch. They said the names were in a CD given by the French Government to India in July 2011.

According to Kejriwal, it was a Congress leader who gave IAC some names on the list, which were cross-checked by them. The list, he said, included names of top corporates such as Mukesh Ambani, Anil Ambani, Naresh Goyal of Jet Airways, one Motech Software (said to be a Reliance company), three members of the Dabur family, Annu Tandon, Congress MP from Unnao and her husband, among others.

“Since the Income-Tax Department has raided 125 people from this list and three among them – P.S. Kalra, Vikram Dhirani and Praveen Sawhney – have admitted that they had Swiss bank accounts that had not been declared for taxation, one could reasonably assume that the information about the others would be correct,” he said.

Kejriwal alleged that the statements of the three people, copies of which were distributed at the conference, showed that HSBC “is openly and brazenly running a hawala racket in India.”

He said as per the statements of these three men, one just needed to contact HSBC in India to open a Swiss account. “They would send someone to your home, get forms filled up, take money in cash and the account would get opened in Geneva or Dubai….”

“Perhaps it is easier to open a Swiss bank account than one in State Bank of India,” he said, and added that this raised questions about terror, drug and hawala money easily flowing to and fro, threatening the country’s economic sovereignty.

IAC accused the Manmohan Singh Government and former Finance Minister Pranab Mukherjee, of “misleading Parliament and shielding big names” and demanded that IT raids be conducted on all the 700 names on the said list.

Meanwhile, the Congress rubbished Kejriwal’s charges. Party spokesperson Rashid Alvi said the UPA Government had initiated a number of steps against black money.

The BJP, however said the allegations were “serious”. “The Congress is not serious in addressing the menace of black money,” party spokesperson Rajiv Pratap Rudy said.

No comments: HSBC

HSBC Bank in India declined to comment on IAC’s allegations even as it acknowledged taking note of it. The bank said it cannot comment on the specific details of the allegations that have been made, which relate to issues in the past.

“HSBC takes compliance with the law, wherever it operates, very seriously,” it said in a statement, adding that group was committed to investing in and growing its operations in India.

Allegations baseless, say Ambanis, Dabur

Reliance Industries Ltd denied the allegations made against the company and its Chairman Mukesh Ambani.

Reliance had business interests in several countries with turnover of thousands of crores in rupees, an RIL statement said, adding that as a part of its normal business, international subsidiaries of RIL deal with several global banks, including HSBC.

“These accounts are fully compliant with all regulations and are disclosed in their appropriate jurisdictions and in India”, it said.

A spokesperson for Anil Ambani said, “Anil D. Ambani had no bank accounts with HSBC in Geneva. It is regrettable that such baseless allegations are being made by IAC at the behest of vested interests.”

A Dabur statement said it was unfortunate that “every person having a foreign bank account is being painted with the same brush.”

It said “these accounts were opened by the Burman family members when they were NRIs, and were legally allowed to open such accounts. The amount being referred to in the media, pertaining to these accounts, has been officially remitted from India through official banking channels and as per applicable FEMA guidelines.”

A Jet Airways spokesperson said “there is no account in the name of Mr Naresh Goyal in the Swiss bank”.

He said Goyal has been an NRI since January 1991 and was entitled to have bank accounts outside India.

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Don’t reject educational loan application on technical grounds: RBI

The Reserve Bank on Friday asked banks not to reject any educational loan application even if the residence of the borrower does not fall under their service area.

”... banks are advised not to reject any educational loan application for reasons that the residence of the borrower does not fall under the bank’s service area,” RBI said in a notification today.

RBI has further asked the banks to issue suitable instructions to their branches or controlling offices for meticulous and strict compliance in this regard.

The apex bank issued the notification in view of number of complaints where students were refused educational loan as the residence of the student does not fall under the bank’s service area.

It also said that the service area norms should be followed only in the cases of government sponsored schemes.

In the financial year ended March 31, 2012, banks’ gross credit towards education loan was at Rs 502 billion from Rs 437 billion in the previous fiscal, as per the RBI data.

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IIFCL’s Rs 10,000-cr tax-free bond issue to open on Monday

India Infrastructure Finance Company Ltd (IIFCL) will launch its Rs 10,000-crore tax-free bond issue on Monday, S.K. Goel, Chairman & Managing Director, said.

The company would first do a private placement of these bonds for Rs 2,500 crore with institutional investors.

After the institutional portion is completed, the retail one of Rs 7,500 crore will be done in tranches.

The entire issue will be completed before March-end this fiscal, Goel said on the sidelines of the India Infrastructure Investment Forum meet here.

The Centre had allowed IIFCL to issue tax-free bonds worth Rs 10,000 crore in 2012-13.

Earlier, Goel told the Forum that IIFCL expected to get SEBI’s nod soon for launching a $1-billion infrastructure debt fund (IDF) through the mutual fund route.

DEA Secretary Arvind Mayaram had on Thursday taken up the matter with SEBI Chairman U.K. Sinha to sort out regulatory issues of IDFs, Goel said.

IIFCL is looking to launch the IDF sometime in December this year. The company will partner with LIC, IDBI Bank, HSBC and also most likely Standard Chartered Bank for the proposed IDF, Goel said.

Srivats.kr@thehindu.co.in

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Banks should ensure end use of crop loans: RBI

Banks should ensure that all crop loans are being used for the stated purpose and there is no diversion of funds, the Reserve Bank said here on Friday.

“Banks should not claim any interest subvention for loans not meeting the criteria as these will not be treated as ’agricultural’ loans,” RBI said in a notification.

For disbursal of agricultural loan, RBI said the banks must ensure that the borrower is an agriculturist; the rate of interest is not above the rate stipulated by the government, and the amount of loan is fixed as per the prescribed scale of finance for agricultural loans and the loan is used for stated purpose.

Moreover, the banks should ensure that seasonality is observed with regard to both disbursement and recovery of loans.

The government in 2006-07 had introduced interest subvention scheme during the budget to ensure availability of short-term crop loans up to Rs 3 lakh to farmers at a reduced rate of 7 per cent.

With an additional 3 per cent subvention for timely repayment, the effective cost of short-term crop loan stands at 4 per cent.

RBI said that it was brought to its notice that banks in various parts failed to ensure the end use of funds disbursed ostensibly for crop loans.

“As a consequence, the expenditure incurred by the Government of India with an intention to help small and marginal farmers has not reached the intended beneficiaries,” RBI added.

RBI has also advised the banks to strengthen their systems for pre-sanction scrutiny and post-disbursement supervision as well as carrying out post-disbursement audits to ensure that all crop loans for which interest subvention is being claimed are being used for the stated purpose and there is no diversion of funds.

Government has released Rs 10,901 crore to banks as interest subvention for giving crop loans up to Rs 3 lakh to farmers in the current fiscal.

Agricultural credit target for 2012-13 is Rs 5,75,000 crore, up from Rs,4,75,000 crore a year ago.

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ATM network crosses 1-lakh mark

The number of ATMs in India has crossed the one lakh mark, according to the National Payments Corporation of India (NPCI). All the banks put together have plans to install an additionally about one lakh ATMs over the next two years, raising the number of ATMs per million population to about 170 ATMs from 85.

As of October 2012 the total number of ATMs was 1,04,500. Public sector banks and the State Bank group with about 61,500 ATMs accounted for 59 per cent of the ATMs. The private sector and foreign banks put together have about 41,800 ATMs accounting for 40 per cent of the ATMs and the balance 1 per cent represents about 1,150 ATMs that have been deployed by co-operative banks/RRBs.

Almost all the ATMs in the country are part of NPCI’s National Financial Switch (NFS) network which facilitates routing of ATM transactions through inter-connectivity between the bank's systems, thereby enabling ATM/debit cardholders of the country to utilise the services in any ATM of a connected bank.

Nearly 200 million transactions are processed every month in NFS, of which 75 per cent are cash withdrawal transactions with an average ticket size of Rs 3,300. The balance 25 per cent transactions are non–financial transactions.

Besides cash withdrawal and balance Inquiry transactions, NFS supports other Value Added Services (VAS) such as pin change and mini statement through the ATMs. There are plans to increase the VAS through Card-to-Card transfer, cheque book request and statement request through the ATMs.

ramkumar.k@thehindu.co.in

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Corporation Bank Q2 net up marginally despite higher NPAs

Corporation Bank’s net profit rose 1.1 per cent to Rs 405.71 crore in the second quarter ended September from Rs 401.11 crore in the corresponding period of the previous fiscal.

The net interest income (NII) stood at Rs 803.25 crore (Rs 743.60 crore), and the ‘other income’ came down to Rs 325.96 crore (Rs 389.38 crore).

Speaking to Business Line over phone from Mumbai, Ajai Kumar, Chairman and Managing Director, Corporation Bank, said the bank had performed well despite the difficult economic situation and high interest rates leading to defaults and creation of more NPAs (non-performing assets).

He hoped that the profitability will be much better in the coming quarters, as the bank is getting out of all the high-cost deposits, most of which by this month. “By March, my bulk deposits will be around 15 per cent. With this, I am pretty sure that the profitability will be much better in the next and the coming quarters,” he said.

Yield on advances rose to 11.75 per cent (11.46 per cent) during the quarter, despite the interest rate having been brought down, he said.

Gross NPAs stood at 1.97 per cent (1.32 per cent), and net NPAs, at 1.38 per cent (0.91 per cent).

The Chairman said the bank has been able to contain and maintain its asset quality. During the second quarter, the slippage was hardly Rs 400 crore; in the previous quarter, it was about Rs 700 crore.

The bank effected cash recovery and upgradation of NPAs of Rs 510.09 crore during the first six months of this fiscal (Rs 250.48 crore in the same period of the previous year).

Provisions (other than tax) and contingencies increased significantly to Rs 268.82 crore (Rs 195.40 crore) during the second quarter. The NPA provision coverage ratio stood at 60.44 per cent.

On Friday, the bank’s shares closed at Rs 401.15 on the BSE, down 0.74 per cent, against the previous close of Rs 404.15.

vinayak.aj@thehindu.co.in

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Anil Ambani denies HSBC Bank account allegation

A spokesperson for Anil D. Ambani categorically denied all allegations made by Arvind Kejriwal against him today.

The spokesperson stated, "Anil D. Ambani had no bank accounts with HSBC in Geneva. It is regrettable that such baseless allegations are being made by IAC at the behest of vested interests."

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SBI Q2 net rises 30% on lower provisioning

State Bank of India reported a 30 per cent jump in second quarter net profit at Rs 3,658 crore helped by lower loan loss provisions.

Write-back of provisions worth Rs 260 crore, which was made for investment depreciation, coupled with recoveries from bad loans also boosted profitability.

“We had already made more than enough provisioning in the first quarter. So, to that extent the provisioning has come down in the second quarter,” Pratip Chaudhuri, SBI Chairman said.

The country’s largest lender had reported a net profit of Rs 2,810 crore in the July-September quarter last year.

Provisions to cover potential bad loans decreased 37 per cent to Rs 1,837 from Rs 2,921 crore, a year earlier.

Net Interest Income, the difference between interest earned on loans and interest given on deposits, increased a mere 4.69 per cent to Rs 10,974 crore from Rs 10,482 crore.

Explaining the rationale for the low net interest income, Chaudhuri said, “Loan growth has not been good in the first and the second quarters.”

The overall year-on-year credit growth was 18 per cent in the quarter. Term loans and project loans have been hit badly, he added.

Asset Quality

The ratio of gross non-performing assets (NPAs) to gross advances increased 96 basis points to 5.15 per cent or to Rs 49,202 crore. In net terms, the ratio increased to 2.44 per cent from 2.04 per cent.

In the second quarter, SBI saw a net addition of Rs 2,000 crore to its NPA portfolio.

As at September-end, the bank had restructured assets portfolio worth Rs 40,454 crore. “About 19 per cent of the restructured assets have slipped into NPA,” Chaudhuri said.

GUIDANCE

The bank expects that deposit growth will be slow for the rest of the year. However, it expects the credit growth to be in the 16-18 per cent range primarily driven by home loans growth.

The bank has accounts worth Rs 4,000 crore coming up for restructuring in the current quarter, Soundara Kumar, Deputy Managing Director, Stressed Assets, said.

Shares of SBI ended at Rs 2,156.35, down 3.89 per cent, on the Bombay Stock Exchange.

satyanarayan.iyer@thehindu.co.in

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DHFL cuts home loan rates

Mortgage lender Dewan Housing Finance Corporation (DHFL) cut its home loan lending rates by 0.25 per cent across categories for new customers.

This is a second rate cut by the lender within a month.

The variable rate of interest for loans of up to Rs 15 lakh has been cut to 10.75 per cent from 11 per cent, while for those above Rs 30 lakh but up to Rs 75 lakh will come at 11.25 per cent and those above Rs 75 lakh at 11.75 per cent, it said in a statement issued here.

It had earlier cut rates by 0.25 per cent on October 10.

The retail segment, especially the home loan vertical, is seeing some aggressive play by bankers in the recent months as the demand from the large borrowers is drying up due to gloomy economic conditions.

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RBI slaps Rs 5 lakh penalty on Solapur District Central Co-op Bank

The Reserve Bank of India has imposed Rs 5 lakh penalty on the Solapur District Central Co-operative Bank. The penalty has been imposed on the bank for violating the provisions of the Banking Regulation Act (As Applicable to Co-operative Societies), as it had granted unsecured loans to companies in which the directors of the board had interest and not reporting the transactions in the relevant monthly statement after sanctioning the loans, the RBI said in a statement.

The central bank had issued a show-cause notice to the co-operative bank in response to which the latter submitted a written reply. After considering the facts of the case, the bank's reply and personal submissions in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.

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Federal Bank rolls out mobile fund transfer facility to merchants

Federal Bank has launched a funds transfer facility to merchants and enterprises through mobile phone.

The Kochi-based private sector lender’s IMPS-Merchant Payment Service, in association with National Payment Corporation of India, will enable customers to use their mobile phones to access bank accounts and transfer funds.

Currently, services enabled through IMPS-Merchant Payment Service include railway ticket booking through IRCTC, mobile/DTH recharge, mutual funds, credit card bill payments, insurance premium, online shopping, post-paid mobile and utility bill payments, and ticketing facilities.

Customers need to register their mobile number with the bank after which a Mobile Money Identifier (MMID) will be generated.

The payments can be initiated through an SMS or the IMPS application using an OTP (One-Time Password), which is generated by the customer from his/her mobile banking application or by sending an SMS to the Customer Contact Number. The OTP is valid for 60 minutes once generated and can be used only for just one transaction.

Customers can make payments up to Rs 50,000 subject to a monthly limit of Rs 2 lakh using the mobile banking application. While using an SMS, the daily limit amount is Rs 5,000.

beena.parmar@hehindu.co.in

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UCO Bank Q2 net slumps 55% on higher provisioning

Higher provisioning for non-performing assets (NPAs) pulled down the net profit of UCO Bank by 55 per cent to Rs 104 crore for the quarter ended September 30, 2012.

Provisioning increased by 26 per cent to Rs 597 crore. According to Arun Kaul, Chairman and Managing Director, UCO Bank set aside Rs 435 crore as provisioning towards NPA during the period under review, as compared with Rs 244 crore during the same period last year.

“We witnessed fresh slippages worth Rs 1,500 crore during the quarter, of which, Rs 820 crore came from one group alone,” Kaul said at a press meet to discuss the bank’s performance during the quarter.

Kaul, however, refused to divulge further details about the group which was largely responsible for pushing up the bank’s NPA.

The percentage of gross NPA to advances increased to 4.88 per cent (3.64 per cent), while net NPAs rose to 2.94 per cent (2.11 per cent).

The rise in bad assets affected the bank’s profitability dragging down the net interest margin to 2.24 per cent (2.84 per cent).

“Moving forward our focus will be on arresting slippages and initiating recovery measures. If we can contain our NPAs, then our margins should also improve,” he said.

Capital requirement

UCO Bank has sought Rs 1,500 crore worth capital infusion from the Union Government this fiscal to fund its growth needs.

The bank is aiming at 16-17 per cent growth in credit and deposits this fiscal.The shares of UCO Bank closed at Rs 74.40, up 1.02 per cent on the BSE on Wednesday.

shobha.roy@thehindu.co.in

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Education loan: HRD Ministry sets deadline for banks to submit interest subsidy claims

Education loans taken by students belonging to the economically weaker sections on or after April 1, 2009, would do well to submit their parents’ income certificate from designated competent authorities to banks.

Else, they will lose the interest subsidy benefit they get on their education loans.

The reason: The Ministry of Human Resource Development (MoHRD) has set a deadline for banks to submit all pending interest subsidy claims pertaining to the period FY2010 and FY2011 to the nodal bank (Canara Bank) before November-end 2012.

For FY12, the claims have to be submitted between December 1 and end-December 2012.

The Indian Banks’ Association (IBA), in a circular to banks, said member-banks have to ensure that the interest subsidy claims are submitted within the aforementioned time slots. The MoHRD and the nodal bank will not entertain claims if not submitted within the stipulated period.

Eligible students can get the details of designated authorities from the branch they have taken the loan.

The students can complete the necessary formalities, including obtaining the certification in respect of annual family income, from the competent authority at the Block/Tehsil/District Level so that their accounts can be credited with the interest due on the loans.

The MoHRD had launched a scheme to provide full interest subsidy during the period of moratorium on educational loans for students belonging to economically weaker sections (annual parental family income from all sources of less than Rs 4.5 lakh) from scheduled banks under the Educational Loan Scheme of the IBA.

The loans are for pursuing of studies in professional/ technical streams from recognised institutions in India, subject to a loan ceiling of Rs 10 lakh. Under IBA’s updated model education loan scheme, even loans in excess of Rs 10 lakh qualify for interest subsidy.

ramkumar.k@thehindu.co.in

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SBI opens Kohinoor branch in Vizag for high networth individuals

The State Bank of India opened a Kohinoor branch for high net worth individuals here on Wednesday, the second in the State. It was inaugurated by Chief General Manager Rakesh Sharma at Ocean View Layout on the beach road.

The CGM told reporters that the first such branch, Kohinoor Banjara, had been opened in Hyderabad a year ago and it had so far mobilised Rs 500 crore in deposits and the advances amounted to Rs 150 crore. "We expect the branch here to mobilise Rs 100 crore by the end of the financial year," he said.

He explained that the USP of such branches was the specialised quality service offered to high networth individuals in view of their special needs. Customised banking solutions would be provided to the account-holders and a relationship manager would be attached to each customer. There would be 24-hour access to lockers with prior appointment, cheque/draft pickup and delivery facilities, and personal banker support for each customer.

He said the branch was furnished with a Dolphin lounge where the customers could relax and wi-fi connectivity would be provided for them to transact their business. There would be a range of e-products available to them. There was also a coffee bar and a dressing room for women customers.

He said the minimum deposit in the branch here was Rs 50 lakh and in Hyderabad Rs 1 crore. There was also a proposal to open the third Kohinoor branch in the State in Vijayawada in a year or so. "There is a great potential for such a branch there," he said.

In response to a question whether such elite banking was necessary, he replied that that it would not be possible to cater to the needs of such individuals in ordinary branches. "Therefore, if we do not open such branches, the private banks will grab them and we will lose a substantial chunk of business. We are expected to compete with the private banks," he said.

The CGM said that the SBI had so far opened 1,302 branches in Andhra Pradesh, and the bank had set itself the target of opening 107 new branches in the State during the current financial year, of which 28 had been set up so far.

sarma.rs@thehindu.co.in

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UCO Bank net halves to Rs 104 cr

Dragged down by higher provisioning, UCO Bank has posted a 55 per cent drop in net profit to Rs 104 crore for the quarter ended September 30, 2012, compared with Rs 231 crore during the same period last year.

Provisioning increased 26 per cent to Rs 597 crore. Net interest income was almost flat at Rs 1,013 crore (Rs 1,010 crore), while other income increased by about five per cent to Rs 213 crore.

Shares of UCO Bank were trading at Rs 74.70, up 1.43 per cent on the BSE on Wednesday.

shobha.roy@thehindu.co.in

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PNB adopts schools in Kerala

Punjab National Bank has organised various programmes as part of its CSR activities.

Pushpa Kamath, wife of K R Kamath, Chairman and Managing Director of PNB, participated in the programmes. The bank adopted the Government Higher Secondary School, Aroor, by donating desks and benches to the school.

Pushpa also handed over ceiling fan to the Principal. The CMD handed over the consent letter to the leader of Government Girls’ High School, Cherthala, as part of adoption of the school.

K.V.Rajesh, Deputy General Manager and Circle Head, also participated in the programme.

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Suzlon moving CDR cell to give lenders time to sort issues:SBI

State Bank of India, a major banker for debt-laden Suzlon, on Wednesday said the wind turbine maker’s move to approach corporate debt restructuring cell would give more time for lenders to sort out the issues.

Loss-making Suzlon Group last month said it has started discussions with lenders for restructuring debt, including a two-year moratorium on repayment of term loans.

“I think reference to the Corporate Debt Restructuring (CDR) cell gives the bankers more time to iron out these issues and Suzlon’s financials are a little more complex,” SBI Chairman Pratip Chaudhuri told reporters on the sidelines of the World Economic Forum on India summit here.

Suzlon has a debt burden of over Rs 13,000 crore including Foreign Currency Convertible Bonds (FCCBs) obligations. A few weeks back, bondholders had rejected its proposal seeking four-month extension to repay overseas debt worth about $221 million.

Noting that Suzlon case is much different from that of Kingfisher, Chaudhuri said the former “is a much different case, it is a running company and has operations globally”.

“Whatever little I understand is that they (Suzlon) took lot of short term debt...,” he added.

SBI is estimated to have an exposure of about Rs 3,500 crore to Suzlon.

Talking about Suzlon, he said that its business model is such that “when you build a wind energy farm, the payment would come after a long period of time of 15-20 years, which they financed out of 3-5 years, so its more a mismatch than I would say an insolvency issue”.

According to Chaudhuri, SBI is quite confident about Suzlon’s technological capabilities while recognising the challenging global environment.

“So, how the company manages the technological issues with the financing issues, that would need more in depth discussions,” he said.

Last month, SBI had suggested suggested merger of Suzlon’s German arm REpower with the group to improve profitability.

“They (Suzlon) have global subsidiaries (but) to what extent those global subsidiaries can be brought in together, to what extent you can use the surplus cash lying in one subsidiary to fund the another... so those are some of the issues,” he noted.

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Canara Bank Q2 profit dips 22% as non-interest income slips

Decrease in non-interest income dragged Canara Bank’s profit 22.44 per cent to Rs 660.97 crore in the second quarter of this fiscal.

While the bank’s revenues grew 9.08 per cent to Rs 9,203.61 crore compared with the same period last year, EPS fell to Rs 14.92 from Rs 19.24.

“During the quarter, the bank’s performance was affected by a drop in non-interest income (commission) by Rs 215 crore, flat net interest income and provisioning for non-performing assets,” said Ashok Kumar Gupta, Executive Director.

The operating profit before provisions and contingencies declined by 19.86 per cent to Rs 1,282.09 crore (from Rs 1,599.87 crore last year). Revenues from treasury operations stood at Rs 2,537.54 crore (Rs 1,932.62 crore), retail banking Rs 2,487.18 crore (Rs 2,345.30 crore) and wholesale banking Rs 4,133.04 crore (Rs 4,000.80 crore). The bank’s asset quality worsened, with gross NPA ratio at 2.58 per cent (1.75 per cent) and net NPA ratio, 2.12 per cent (1.42 per cent). Return on assets (RoA) was down at 0.71 per cent (1.01 per cent).

Net interest income (NII) for the quarter was flat at Rs 1,957 crore (Rs 1,962 crore, and) net interest margin (NIM) stood at 2.35 per cent (2.51 per cent).

Advances too were flat at Rs 2,15,751 crore (Rs 2,16,085.42 crore). Deposits grew 7.98 per cent to Rs 3,36,761.62 crore (Rs 3,11,857.91 crore).

The bank’s CASA deposits rose 3.44 per cent to Rs 83,556 crore.

Savings bank deposit increased by 10.07 per cent to Rs 7,0494 crore.

anil.u@thehindu.co.in

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Andhra Bank Q2 profit muted on higher NPA provisioning

Andhra Bank clocked a net profit growth of 3.2 per cent for the quarter ended September 30 at Rs 326 crore, as against Rs 316.12 crore in the year-ago period.

Higher deposit costs, slower credit off-take and stressed assets kept the bank’s growth muted during the quarter. It is expected to maintain this level of growth in the current quarter.

The total income of the bank touched Rs 3,417.62 crore, up by 15.5 per cent from the year-ago period. However, its net interest income declined six per cent to Rs 894 crore during the quarter.

B.A. Prabhakar, Chairman and Managing Director, said the fall in net interest income was mainly due to reversal of interest on account of NPAs (non-performing assets) and restructured accounts.

Gross NPAs rose to Rs 3,013.79 crore (3.48 per cent) during the quarter from Rs 1,987.07 crore (2.67 per cent) in the year-ago period.

Corporate accounts

“Slippages were mostly on account of a few large and mid-corporate accounts to the tune of Rs 1,000 crore. Two pharmaceutical companies alone accounted for NPAs of Rs 579 crore — expansion of these companies was stuck as they could not raise the required equity,” Prabhakar told newspersons here on Tuesday.

He said the bank’s exposure to the troubled media company Deccan Chronicle Holdings was Rs 200 crore, but it would become due only after November. “We will be taking recovery steps after it falls due,” he said.

Cost of deposits rose from 7.45 per cent in the second quarter of last fiscal to 8.03 per cent last quarter. “I expect this trend to continue in the next two quarters,” he said.

Overall, the bank expects to end the year with a growth of about 15 per cent both in deposits and credit.

amitmitra@thehindu.co.in

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RBI allows SIDBI to tap external commercial borrowing route

The Reserve Bank of India on Tuesday said the Small Industries Development Bank of India (SIDBI) can tap the external commercial borrowing route for on-lending to the micro, small and medium enterprise (MSME) sector.

For on-lending to the MSME borrowers, the RBI has stipulated that SIDBI should hedge the foreign currency risk in full in case the on-lending is in rupees.

On-lending in foreign currency will only be to those MSMEs which have a natural hedge by way of foreign exchange earnings.

Availment of ECB by SIDBI, including the outstanding ECBs, up to 50 per cent of owned funds, for on-lending to the MSME sector, will be under the automatic route and beyond 50 per cent of owned funds, the availment will be under the approval route, subject to a ceiling of $500 million per financial year.

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Migrate to web protocol IPv6, RBI tells banks

The Reserve Bank of India (RBI) today asked the banks to migrate to the latest version of Internet Protocol IPv6 from IPv4, preferably by December 2012.

“Since migration to IPv6 is an eventuality that has to be accepted and managed proactively, the government wants it to be done in a planned way rather than against time,” the RBI said in a notification.

Internet Protocol version 6 (IPv6) is the latest Internet Protocol (IP), the primary communications protocol upon which the entire Internet is built. It is intended to replace the older IPv4, which is still employed for the vast majority of Internet traffic as of 2012.

The RBI further added that “they (government) have expressed that the migration of all payment gateways, banks, financial institutions, insurance companies, etc. including their websites should be completed preferably by December 2012.”

It said banks may take necessary action by forming a special team to complete the migration within the stipulated time.

As per the National Telecom Policy 2012 (NTP-2012), Internet is envisaged as a catalyst for socio-economic development of the country and as an effective medium of various citizen-centric services.

“Since the current version of Internet Protocol (IPv4) has almost run out of addresses, the broadband revolution is sure to ride on next generation Internet Protocol (IPv6).

The NTP-2012 recognises the futuristic role of IPv6 and aims to achieve substantial transition to IPv6 in the country, the RBI added further.

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Vijayalakshmi Iyer appointed Bank of India CMD

Bank of India has a new Chairperson and Managing Director in Vijayalakshmi R. Iyer. She assumed charge of this post on Monday soon after the Finance Ministry issued a notification on her appointment.

Prior to this appointment, Vijayalakshmi Iyer was an Executive Director at Central Bank of India. She had served as an Executive Director at Central Bank of India since September 1, 2009. She has over thirty years of experience in the banking industry. Iyer began her banking career with Union Bank of India in 1975.

The Centre has also appointed Malay Mukherjee as an Executive Director at Central Bank of India. Prior to this appointment, Malay Mukherjee was a General Manager at Indian Bank.

srivats.kr@thehindu.co.in

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Kingfisher will not fly if doesn’t get capital by Nov 30: SBI

State Bank of India (SBI), the lead bank to ailing Kingfisher Airlines, on Tuesday cautioned the carrier that it “will not fly” if it fails to bring in fresh capital by November 30.

“Banks’ consortium has done everything possible to make the company (Kingfisher) work. Only the company is not working... The management has to get capital. We have given time till November 30 that they should get capital otherwise the company will not fly...,” SBI Chairman Pratip Chaudhuri told PTI.

He further said the airline would not be able to get investors if it is not flying.

Chaudhuri said the consortium of 17 banks have been meeting regularly to help the cash-strapped airline.

SBI has over Rs 1,500-crore of exposure to Kingfisher.

The bank chairman said the consortium, led by SBI, has made available a total Rs 7,000 crore to Kingfisher to help it keep flying.

The Directorate General of Civil Aviation (DGCA), however, recently suspended the flying licence of Kingfisher following the airline’s failure to come up with a viable plan of financial and operational revival.

Meanwhile, Kingfisher said it is working on a comprehensive revival plan which will be given to aviation regulator, DGCA, in the next few weeks.

“We are working on a comprehensive plan which will address the interests of all stakeholders and this will be submitted to DGCA,” an airline spokesperson said when asked about their plans to get the suspension of its scheduled operator’s permit (SOP), valid till this year-end, revoked.

Kingfisher is burdened with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of that has not been serviced since January.

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Interest income lifts Dena Bank Q2 net 24%

Dena Bank has reported a 24 per cent increase in net profit for the quarter ended September 30 at Rs 240 crore on the back of robust growth in interest income.

The public sector lender had posted a net profit of Rs 194 crore in the year-ago period.

Net interest income (the difference between interest earned and expended) increased by 15 per cent to Rs 594 crore as against Rs 515 in the second quarter of last fiscal. Non-interest income rose by 18 per cent to Rs 134 crore (Rs 113 crore).

The percentage of net non-performing assets (NPAs) increased to 1.22 per cent from 1.15 per cent in the year-ago quarter. The capital adequacy ratio stood at 12.05 per cent (12.55 per cent).

Provisions increased by 25 per cent to Rs 197 crore (Rs 158 crore), of which, Rs 154 crore was towards NPAs. CASA (current and savings account) ratio stood at 31.86 per cent.

Total slippages during the quarter was at Rs 288 crore (Rs 156 crore in June quarter) mainly comprising of infrastructure and telecom sector.

During the quarter, the bank’s restructured assets aggregated Rs 300 crore (from Rs 319 crore in Q2 FY12).

“We expect an additional Rs 160 crore restructuring in the next quarter,” Nupur Mitra, Chairman and Managing Director, Dena Bank.

“Net interest margins declined to 2.86 per cent (from 3.22 per cent) due to rationalisation of rate of interests especially on loans to small and medium enterprises, agriculture and retail. This was done so that our accounts remain standard,” Mitra said.

The bank plans to raise Rs 1,250 crore for the next two years, she said.

The shares of the bank ended higher by 1.42 per cent to close at Rs 110.70 on the Bombay Stock Exchange.

Beena.parmar@thehindu.co.in

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SKS Microfinance raises Rs 200 cr through securitisation deal

SKS Microfinance today said it has raised Rs 200 crore by selling loans to a state-run bank through a securitisation deal.

This is the first major deal in the troubled microfinance sector after the Reserve Bank issued revised securitisation guidelines for non-banking finance companies in August.

As part of the deal, SKS, which is the only listed MFI, said, it has downloaded the receivables from micro-loans extended to over 2.60 lakh rural women to a special purpose vehicle and pass through certificates, have been purchased by a public sector bank. The name of the bank is not revealed.

Late September, leading micro-loan player Basix sold as much as 92 per cent of its stake to a consortium of 19 banks led by Sidbi in a Rs 652-crore debt recast deal, which involved conversion of Rs 500 crore of this debt into equity.

“The present transaction generates liquidity of Rs 200 crore for SKS and also brings in concomitant capital relief,” said its chief financial officer S Dilli Raj said in the statement.

Notably, 26 per cent of the pool is from the Scheduled Caste/Scheduled Tribe entrepreneurs, 16 per cent from minorities and the remaining 58 per cent from women belonging to the Other Backward Castes, the company said.

The debt pool has an A1+ rating from Care and comprises receivables from 14 non-Andhra states.

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Syndicate Bank looking to boost fee-based income

Syndicate Bank is working towards boosting its fee-based income. It has created a separate wing and recruited professionals for this.

The target is to increase the revenues from this business segment to at least 20 per cent over last year, the bank’s Executive Director M. Anjaneya Prasad said.

The bank has taken on board 20 chartered accountants and tied up with nine mutual funds in the last few months, including HDFC, Reliance and IDBI, to drive up business from the capital market, mutual funds and insurance, he told Business Line at a recent interaction here.

Corporate focus

Another focus area for the bank is the mid-size corporate segment. It will be creating mid-corporate branches that will deal with Rs 5-75 crore loans. Initially, some of the existing branches would be converted and later exclusive ones created, the Executive Director said.

On non-performing assets, Prasad said they were a cause for worry, though recoveries have gone up. In the last few months, the bank recovered Rs 500 crore.

The bank is not inclined to support corporate debt restructuring deals. However, where it is a minority there is little option but to follow the lenders. The bank has at least 6-7 big accounts, where the exposure is around Rs 2,000 crore, he added.

somasekhar.m@thehindu.co.in

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Central Bank targets home-loan book at Rs 10,000 cr by March

City-based public sector lender Central Bank of India yesterday said it is targeting to take its home loan portfolio to over Rs 10,000 crore by this fiscal end.

“At the end of the September quarter, our home loan portfolio stood at Rs 6,800 crore, and by March, we are targeting to add Rs 4,000 crore or so. The target is to cross the Rs 10,000-crore-mark this fiscal,” Chairman and Managing Director Mohan V Tanksale said.

With the huge success of ‘Swapna Sankul-2012’, the first realty exhibition organised here by the bank last week, Tanksale said that they intend to take the initiative forward to 100 other cities by March.

The expo was also aimed at tapping the huge government housing market.

At the expo, the bank notched up sales worth Rs 174.24 crore from 525 applicants, Mohan V Tanksale said.

The chairman further said the bank will also focus on auto loans while adding that the home loan consumers will get a concession on rate of interest of the auto loan.

“Looking at the success of the Mumbai expo, we will hold similar expos and trade exhibitions in association with industry partners in the auto loan segment as well. However, home loans will remain our prime focus.”

Central Bank has over 4,100 branches and over 1,900 ATMs across the country. Its balance-sheet has crossed Rs 3.57 trillion last quarter.

The retail portfolio stood at Rs 18,964 crore, as of end September, up 34 percent from the year ago quarter.

The bank will announce its September quarter numbers this week.

In the June quarter its net profit grew 19.6 percent to Rs 336 crore, while the core net interest income inched up 3.56 percent to Rs 1,377.7 crore.

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Vijaya Bank profits down 39.4%

Vijaya Bank profits were down 39.38 per cent to Rs 123.37 crore for the second quarter of this fiscal.

The total income was up 9.69 per cent at Rs 2,301.72 crore, while the EPS was at Rs 2.49 compared with Rs 4.31 last year.

anil.u@thehindu.co.in

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Federal bank offers loan for house warming

Now you can get a loan for not only buying a house but also for house warming.

Federal Bank has launched a new product “House Warming Loan” for its customers (both existing and new) for meeting house warming and other related expenses.

The loan will be available on acquisition/ completion of house/ flat. The loan is offered at 2 per cent over the housing loan rate.

The quantum of loan can be up to 5 per cent of the Housing Loan limit with a maximum of Rs 2 lakh, the private sector bank said in a statement.

D. Sampath, Additional General Manager and Head, Retail Business Department, said “The timely help in the form of house warming loan to housing loan borrowers will enable customers to conduct house warming functions without resorting to raising short term loans at high rate of interest.”

ramkumar.k@thehindu.co.in

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LIC eyes distribution tie-up with Postal Department

Life Insurance Corporation of India is in favour of having a distribution tie-up with the Indian Postal Department, which has plans of its own in the insurance space.

The Government has launched an initiative to pave the way for over 1.5 lakh post offices in the country to offer full-fledged banking and insurance services. Postal Life Insurance is also setting up a full-fledged investment division for generating optimal returns.

“They (the postal department) have a huge network. It will be prudent to have some kind of distribution synergy between the department and LIC. We are in favour of such a synergy,” LIC Chairman D. K. Mehrotra told Business Line on the sidelines of the inauguration of the All-India LIC Games here on Monday.

A tie-up of this nature could change the insurance landscape in India as LIC controls nearly 80 per cent of the domestic life insurance market, while the postal department has a stronger rural network.

Vision 2020

He said LIC’s newly chalked out Vision 2020 to have every Indian backed by an LIC policy was a “daunting task”, but efforts were on to achieve this. He said different groups have been set up to draw up a roadmap for this vision, including branch expansion, recruitment and launching of new products.

The aim is to increase the number of its policyholders from the current 40 crore to 100 crore.

Online products

Mehrotra said the company would come out with its second and third on-line products. “We have today one online product and we will come out with two more in the next two or three months. While the first is in the pension category, the two new ones will be simple endowment-related products. We do not want to put any complex products online yet,” he said.

amitmitra@thehindu.co.in

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Allahabad Bank Q2 net drops 52% on rising bad loans

Allahabad Bank plans to open 250 branches in the current fiscal, of which authorisations have been received for about 60 per cent of them.

It is also entering Dhaka by opening a branch there and work in this regard is in progress.

Second quarter performance

The bank, in a communication to the stock exchanges today, said its total business had gone up to Rs 2,74,116 crore as on September 30, 2012, compared to Rs 2,38,897 crore as at the end of Q2 of last year, marking a 14.74 per cent growth year on year.

The total deposits also moved up to Rs 1,61,967 crore as at the end of Sept 30 this year compared to Rs 1,42,043 crore in the same period last year, a 14.02 per cent growth y-o-y.

However, the bank, while registering a rise in total income in Q2 of this year to Rs 4,582.64 crore (Rs 4,202.54 crore), has seen a sharp drop in net profit. Its total expenses shot up to Rs 3,780.35 crore (Rs 3,253.24 crore). The provisioning (other than tax) and contingencies too was higher at Rs 464.47 crore (Rs 411.66 crore) and the tax expenses too more than doubled to Rs 103.62 crore (Rs 49.62 crore).

All this led to the bank’s net profit tumbling 52 per cent to Rs 234.20 crore (Rs 488.02 crore).

Consequently, the EPS for the second quarter this year slumped to Rs 4.68 (from Rs 10.25).

There was a sharp uptick in the gross and net NPA in the quarter. While the percentage of gross NPA to advances shot up to 2.95 from 1.77, the percentage of net NPA to net advances trebled to 2.10 from 0.69 in Q 2 of 2011-12. The return on net assets on an annualised basis too fell to 0.51 from 1.24.

According to Shubhalakshmi Panse, Chairman and Managing Director, Allahabad Bank, added fresh NPAs worth Rs 1,720 crore during the quarter under review, against Rs 521 crore during same period last year.

Allahabad Bank said that during the first half of the current fiscal, it opened 48 new branches, taking the total number to 2,564 branches, of which rural and semi-urban branches accounted for 61 per cent of them with the rest in urban and metropolitan areas.

Looking ahead

On its future plans, the bank said it intends to open 250 branches during 2012-13 with 153 authorisations for opening new branches on hand. It had also obtained permission to open an overseas branch at Dhaka (Bangladesh) regarding which work was in progress. It was also in the process of launching RuPay Kisan Credit Card Scheme with Smart Card enabled payment system through ATMs and PoS terminals, the statement said.

Allahabad Bank shares witnessed heavy selling of 92.36 lakh shares on the NSE by 2.55 P.M. with the stock declining by Rs 4.25 to Rs 133.50. It had touched a low of Rs 127.90 but pulled back from it.

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IndusInd Bank to triple solar-powered ATMs in 2 yrs

IndusInd Bank plans to triple the number of solar-powered ATMs in its network in the next two years, Romesh Sobti, Managing Director & Chief Executive Officer, has said.

Plans are afoot to increase the bank's overall ATM network strength to 1,500 ATMs in 2 years, of which at least one-fifth would be solar-powered, Sobti told Business Line on the sidelines of an event here.

Currently, IndusInd Bank has 750 ATMs, of which 100 are solar-powered.

"We are the only bank in the country to have solar powered ATMs. Every solar powered ATM is 20 per cent more expensive (than normal). Over 10 years, it is economically viable," he said.

He pointed out that corporate social responsibility has sustainability elements and saw solar powered ATMs as part of this effort.

Sobti was in the Capital for the launch of a unique platform "Treasures of Rajasthan", which is being brought to the Capital by the Maharaja Sawai Man Singh II Museum Trust.

IndusInd Bank is sponsoring the first edition of this exposition, which will showcase heritage and boutique travel destinations along with exquisite crafts of Rajasthan.

srivats.kr@thehindu.co.in

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Postal Life Insurance can now cover more groups of employees

Life insurance behemoth, Life Insurance Corporation of India, and new-generation private life insurers had better sit up and take notice.

The Government has allowed the country’s oldest life insurer, the Postal Life Insurance, to cover more groups of people.

The Department of Posts can now offer Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) to employees engaged/ appointed on contract basis by Central/State Governments, where the contract is extendable.

Employees of joint ventures in which Central/State Government, public sector undertakings and public sector banks have a minimum 10 per cent shareholding and employees of all scheduled commercial banks can be offered life insurance cover by the Department.

Members/employees of co-operative credit societies and other co-operative societies registered under the Co-operative Societies Act and partly/fully funded by the Central/State Government, Reserve Bank of India, National Bank for Agriculture and Rural Development and public sector banks can also be covered by the Department.

Further, employees of deemed universities and educational institutes accredited by recognised bodies such as National Assessment and Accreditation Council, All-India Council of Technical Education, Medical Council of India, and/or affiliated to Universities/Boards are eligible for insurance cover from

For rural population

Rural Postal Life Insurance was introduced in 1993, to provide cover to the rural population, especially those in the weaker sections and to women workers.

Insurance industry experts say that the Department of Posts, with its vast network of 1.55-lakh odd post-offices across the country, may be well-placed to meet the rural/social sector obligation under the Insurance Regulatory and Development Authority’s rules.

PLI has grown from a few hundred policies in 1884 to 50.07 lakh as on March 31, 2012. As on March 31, there were over 1.35 crore active RPLI policies.

ramkumar.k@thehindu.co.in 

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Standard Chartered launches Yatra Platinum card

Standard Chartered in collaboration with travel portal Yatra.com launched the ‘Standard Chartered Yatra Platinum Credit Card’. The card offers a suite of benefits to credit-card customers when they make travel reservations on Yatra.com besides their regular shopping and other spends.

The co-branded card offers benefits like Cashback and accelerated reward points on spends at yatra.com, travel discount vouchers and free tickets.

Some of the attractive benefits that the card holder will get are – 10 per cent cashback on all travel spends at Yatra.com, waivers on Yatra.com domestic air cancellation fees for all tickets booked on Yatra.com, on-boarding vouchers (discount vouchers ranging from Rs 4,000 to Rs 8,500 for travel reservations across flights, hotels and holiday packages), four reward points for every Rs 100 spend on Yatra spends and fuel surcharge waiver on all fuel spends.

Commenting on the launch Sanjeeb Chaudhuri, Regional Head, South Asia & Group CMO, Standard Chartered Bank said, “Indian travel industry is growing by leaps and bounds.  In the cluttered market of travel services, we see the need among customers for services that will not just facilitate their travel reservations but also reward them for their spends.”

To avail this facility, customers can apply for the card online at the bank’s website or at any of its branches.

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LIC all set for major recruitment drive

In one of its biggest recruitment drives in recent times, Life Insurance Corporation will be taking on board about 5,000 graduates as development officers in the next few months.

This is part of the company's strategy to achieve its 2020 vision of increasing the number of policy holders from the current 40 crore to 100 crore.

“We will be soon coming out with the advertisement for recruiting the development officers.

We currently have a pool of 27,000 development officers, who form the strength of our marketing team,” K. B. Saha, Executive Director, Human Resource Development, told Business Line on the sidelines of an event here today.

The entry-level salary of an LIC development officer is between Rs 12,000 and Rs 14,000 a month.

“However, they can earn significant incentives,” he said, adding in a lighter vein, “some of them are getting a bigger pay packet than our chairman”.

LIC does not have any plans to recruit at the senior level this fiscal, as it recently hired 300 people.

“We may not take in any significant number of people at the senior level, due to our re-engineered business operations with greater dose of technology.

Overall, in the next five to seven years, we may increase our employee strength by 10-15 per cent,” Saha said.

LIC, which has a market share of 80 per cent, employs around 1.15 lakh people. In fact, the number has been brought down from over 1.30 lakh a decade ago, although its business has grown about seven-fold during this period.

Increasing online operations have reduced the need for LIC to hire more at the officers’ level.

“Today, 50 per cent of our premium collection is through alternative modes. And this will grow in the coming years,” Saha said.

amitmitra@thehindu.co.in

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Yes Bank, EZspend launches prepaid cards

Private sector lender, Yes Bank, has launched two prepaid cards in association with EZspend Prepaid Payment Solutions on the MasterCard platform.

Available in the Delhi/NCR and Gurgaon region, the Yes Bank-EZspend Card are prepaid cards that can be used to make purchases at point of sale terminals and even for online shopping across India on the MasterCard network. Each card holder’s account is linked to an online card tracking system which monitors and helps the account holder to track each transaction and provides a detailed statement every month, the bank said in a statement.

The product line includes two types of cards, viz., General Purpose Reloadable (GPR) Prepaid Cards and Non-reloadable One-time Gift Cards. The GPR Cards can be loaded for any value between Rs 500 up to Rs 50,000 at one-time and can be bought for an initial registration fees of Rs. 100.

While, one-time gift cards are non-reloadable in nature and can be loaded only once during purchase for any amount between Rs 500 up to Rs 50,000 for a one-time fee of Rs 100.

Chitra Pandeya, Senior President, Savings Liabilities Management, Cards and Direct Banking, Yes Bank said: “Yes Bank has a significant commitment in promoting cashless transactions as they encourage transparency and offer great utility to consumers, including ease of managing their resources.”

Beena.parmar@thehindu.co.in

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