HDFC Bank to scale up branch count in Gujarat

Gujarat is a focused state for HDFC Bank and it will open 250 branches in the state over the next three years, taking the total tally to 465 branches, the bank’s Managing Director, Aditya Puri said today.

“The state grew at the rate of 10 per cent. HDFC believes that Gujarat will grow at the same rates. We have 215 branches in the state and we plan to open 250 more branches here in the next three years,” Puri said here at the sixth edition of ’Vibrant Gujarat’.

“Gujarat is a focused state for HDFC Bank... Our credit-deposit ratio in the state is at 105 per cent,” he added.

Defying the doomsayers on the India’s economic prospect in the wake of widening gap in the fiscal deficit, Puri showed optimism of the Indian prospect in the medium to long term.

“India’s medium to long term prospect remains intact,” Puri said.

His comments come against the backdrop of a slowdown in the country’s economy and mounting concerns over high fiscal and current account deficits.

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ItzCash ties up with HDFC Bank, Visa

ItzCash Card, a multi-service prepaid card company of the Essel Group, has tied up with HDFC Bank and Visa to launch corporate gift cards. The HDFC Bank ItzCash Visa Gift Card offers a wide range of products and can be used at over a million outlets where Visa cards are accepted. Employers can use the card to reward staff members, customers or pay commissions. The card can be purchased for any value. It comes with a range of security features designed to protect cardholders from unauthorised purchases if their card is stolen. The gift card, which is valid for one year, cannot be reloaded by paying at bank branches and cannot be used in ATMs for withdrawal of cash. The card can be used for purchases at shops and online transactions over the Internet.

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Sidbi ties up with Franchising Association

Small Industries Development Bank of India (SIDBI) today announced it has tied up with the Franchising Association of India to work together for entrepreneurship growth and development of Micro, Small and Medium Enterprises (MSME).

SIDBI, the financial institution for promotion, financing and development of MSME sector, would provide financial assistance under its Direct Credit Schemes, after initial screening to the Franchising Association of India, an industry association representing franchisees, franchisors and service providers to the sector, SIDBI said in a statement.

A proper mechanism would be put in place to ensure that the right kind of proposals from its members is referred to SIDBI based on the product features, the statement said.

The services sector contributes more than 60 per cent to the national GDP and all eligible proposals would be covered under Credit Guarantee Fund Trust for Micro and Small Enterprises Scheme, said S. Muhnot, Chairman and Managing Director, SIDBI.

Recently, SIDBI had launched a Web site ‘smallB.in’ to encourage individuals to look at the enterprise-based business opportunities and simplify the process of starting a business in India.

beena.parmar@thehindu.co.in

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Oriental Bank may rejig loans worth Rs 2,500 cr

Oriental Bank of Commerce is likely to restructure loans worth Rs 2,500 crore in the next few quarters. The bank has a restructuring book of close to Rs 10,500 crore.

According to Chairman and Managing Director S.L. Bansal, the bank is in the process of restructuring its Rs 450-crore advances to Moser Baer.

The restructuring of advances is likely to drag down margins.

“We have to make additional provisioning of up to 0.75 per cent on restructured accounts, this will put pressure on bottom line,” Bansal said at a press meet on the occasion of a branch inauguration here on Friday. The bank’s net interest margin was close to 2.79 per cent in December and might inch up to 2.9 per cent by the end of this fiscal, he said.

Exposure to Kingfisher

The bank’s Rs 55-crore exposure to Kingfisher Airlines turned into a non-performing asset in the third (October-December) quarter of this fiscal.

“We hope to recover the money by the end of this month,” Bansal said, refusing to explain how the amount will be recovered.

The bank has close to Rs 5,500-crore worth exposure to power-distribution companies (discoms).

“We have already received indications from the Haryana Government for restructuring.

We are working on it. This apart, some restructuring proposals might also come from Punjab, Rajasthan and Uttar Pradesh Governments,” he said.

According to Bansal, power generation companies are also under pressure as discoms are not in a position to pay them.

“This could pose some challenge for banks,” he pointed out.

shobha.roy@thehindu.co.in

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Federal Bank launches online puja offering services

Federal Bank has launched ‘online religious offering services bouquet’ in association with the Sree Padmanabhaswami Temple. This enables the devotee to make offerings/pujas without visiting the place. Any credit or debit card or the Federal Bank net banking service (FedNet) may be used for the purpose.

Federal Bank also plans to roll out the service through its merchant-payment system soon. The service can be accessed through following addresses -

www.sreepadmanabhaswamytemple.org/pooja.aspx

and

www.federalbank.co.in/General_ProductandServices_OnlineReligiousOfferings.aspx

Shyam Srinivasan, Managing Director and CEO of the bank, launched the facility here on Thursday. C. P. Sasidharan, Deputy General Manager and zonal head, presided.

V. K. Harikumar, executive officer, Sree Padmanabha Swamy Temple Trust and other office-bearers of the temple administration were present.

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ICICI Bank raises S$225 mn

ICICI Bank has raised S$ 225 million from a seven-year bond sale programme through its Dubai branch at a coupon rate of 3.65 per cent.

“We have successfully raised S$ 225 million through our Dubai branch yesterday at a coupon rate of 3.65 per cent. Significantly, the seven-year bond will also yield 3.65 per cent,” a bank spokesperson said here today.

The bank had given an initial price guidance of 4 per cent while the final pricing saw of tightening of 0.35 per cent. The issue was oversubscribed by over 13 times to S$ 3 billion, the lead banker to the issue StanChart said.

This is the fifth debt raising by the private sector bank this fiscal with it earlier in the year raising $1 billion in two instalments of $750 million and $250 million. The bank had also raised a 1 billion yuan bond earlier in the year apart from a 100 million Swiss franc bond.

StanChart, HSBC and ANZ were the lead managers to the issue, which was closed yesterday.

This was the second issue in 2013, with Exim Bank on January 8 raising $750 million through a European bond sale, which was overbought by 8.5 times at a 4 per cent coupon.

“ICICI’s new issue has established a new benchmark for them in the Singapore-dollar-denominated bond market. It has also helped them achieve investor diversification, raise seven-year pricing tighter than the USD curve, and establish a benchmark for them in the S$ (SGD) bond market,” Jujhar Singh, Managing Director – Capital Markets, StanChart India said from London.

It’s heartening to see an Indian issuer pricing 2013’s first SGD issue so tight, he added.

Singh further said the issue, despite having a seven-year tenor is dearer by only 0.02 per cent as the bank’s existing dollar bond maturing by 2018 is priced at 3.63 per cent.

The pricing has also been helped by the timing as it came soon after the resolution of the US fiscal cliff apart from the fact that the traders are flushed with cash after the Christmas and New Year holidays, said Singh.

On the tenor extension by two years, he said, ICICI Bank wanted to diversify its investor profile. Also, generally insurers want longer tenor and the bank has quite a few insurers in its investor kitty in Singapore.

As much as 36 per cent of the 102 investors were insurers followed by 31 per cent HNIs of private banks, 17 per cent of fund houses and 16 per cent constituted international banks, Singh said.

Majority of these investors are from Singapore (78 per cent) 19 per cent from Greater China and 3 per cent from Europe.

On the rationale for the huge demand for Indian debt, Singh said since September there has been a substantial improvement in sentiment about the Indian growth as since then the sovereign downgrade threat has eased.

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IRDA’s softening brings back pension products to life

The unit-linked pension market is slowly coming back to life for life-insurance companies following regulatory changes.

Private life-insurance companies have not launched any unit-linked pension plan in the last one year, as the regulator had mandated a minimum annual guarantee of 4.5 per cent. Public-sector insurance behemoth Life Insurance Corporation of India (LIC) was the only insurer offering pension products during the period.
Change in regulations

However, with an amendment allowing assured benefit and the regulator showing some urgency in disposing product approvals, the insurers are now encouraged to launch products. In the last couple of months, LIC and ICICI Prudential Life Insurance have launched pension products during the crucial tax-saving period, when insurers log almost a third of the sales during the year.

The slowdown in pension products started in September 2010, when the Insurance Regulatory and Development Authority (IRDA) came out with new regulations on pension products, mandating a minimum annual guarantee of 4.5 per cent. Following this regulation, unit-linked pension plans from private insurers disappeared from the market.

After several discussions with life insurers, the Life Insurance Council presented its views to the regulator. In January last year, the regulator amended the guidelines on unit-linked pension plans whereby insurers now had to guarantee an assured benefit in the form of a rate of return that would have to be disclosed upfront.

HDFC Life Insurance and ICICI Prudential recently launched their plans after the new rules came in.

Reliance Life Insurance and Birla Sunlife Insurance have already filed for their products with the regulator.

deepa.nair@thehindu.co.in

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Kotak Mahindra serves possession notice on Deccan Chronicle press

Kotak Mahindra Bank has served a possession notice on Deccan Chronicle Holdings Ltd, publisher of English daily Deccan Chronicle, seeking payment of dues.

The notice for recovery of Rs 50.25 crore has been served under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and its rules calling upon the borrower to repay the amount together with the interest at contractual rates and other costs and expenses from August 16, 2012, till payment or realisation within 60 days from the date of receipt.

The notice stated that Deccan Chronicle Holdings failed to repay the amount, and the notice is hereby given to the borrower and the public in general that the bank has taken symbolic possession of the property admeasuring 9,892 sq. yards located at Kondapur in Andhra Pradesh, where it has a printing press.

The bank is learnt to have extended a loan of Rs 100 crore and has knocked at the doors of the debt-recovery tribunal to restrain the management from selling its assets to third parties and thereby secure its interests, including recovery of amount lent to the company.

Deccan Chronicle Holdings is faced with several petitions for recovery of dues, including winding-up petitions. Other lenders who have knocked at the doors of High Court and the debt-recovery tribunal include IFCI, ICICI Bank and IDFC.

GE Capital, to which some of the properties and machinery have been mortgaged by the company after the latter availed loans, has also secured a restrain order against the company. GE Capital had lent about Rs 100 crore and has approached the court to recover dues.

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S&P assigns ‘BBB-’ rating to ICICI Bank’s overseas bond issue

Standard & Poor’s Ratings Services on Wednesday assigned ‘BBB-’ long-term issue rating to a proposed issue of Singapore dollar-denominated senior unsecured notes by ICICI Bank Ltd. The rating on the notes reflects the long-term issuer credit rating on the bank.

The proposed notes will constitute direct, unconditional, unsecured, and unsubordinated obligations of the bank. They will rank at par with all other unsecured obligations of the bank. The bank will list the notes on the Singapore Exchange.

jayanta.mallick@thehindu.co.in

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Allahabad Bank, small-businesses body sign pact

Allahabad Bank has signed a memorandum of understanding with the Chamber of Indian Micro, Small and Medium Enterprises to shore up its priority-sector lending. The Chamber will get proposals from its members for consideration of the bank. Once a loan is sanctioned, the organisation will support the bank in follow-up and recovery and provide early warning signals, if any, said a press statement issued by the bank.

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Syndicate Bank new branch at Nagaram

Syndicate Bank has opened a new branch at Nagaram, Keesara Road here.

A.S. Rao, Regional Director, Reserve Bank of India, Hyderabad had inaugurated the branch in the presence of M. Anjaneya Prasad, Executive Director, Syndicate Bank.

Speaking on the occasion, Rao said Syndicate Bank was a ‘pioneer’ in schemes pertaining to agricultural advances, Government-sponsored schemes, among others.

He urged the people to procure Aadhaar cards to be linked to the accounts with the bank.

M. Anjaneya said his bank had the highest number of branches in Andhra Pradesh next to Karnataka.

The bank also crossed the business level of Rs 3 lakh crore as on December 31, 2012 and entered the league of large banks, he added.

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Exim Bank raises $750 million

The Export-Import Bank of India has raised $750 million by issuing 10 year Reg S bonds to funds it operations including extending lines of credit to the Governments of other countries, export finance and support Indian companies overseas investments. The resources were raised at a fixed coupon of 4 per cent (or 10-year US Treasury plus 220 basis points), said David Rasquinha, Executive Director.

“The original issue size was $500 million. But seeing the investor interest, we upscaled it to $750 million. The order book touched $6.50 billion.” Rajiv Nayar, Head of Capital Markets Origination at Citi India said: “Exim Bank’s inaugural 10-year US dollar bond marks the first such issuance from India this year. “It was priced inside their existing USD notes due 2017, representing a negative new issue concession.”

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Axis Bank joins PSBs like Dena Bank & Corporation Bank in raising deposit rates

Axis Bank joined state-run lenders such as Dena Bank and Corporation Bank in raising interest rates for deposits in select tenor, sending contrary signal to the market, which is expecting lower interest rates.

The instances of banks increasing deposit rates, though sporadic, come as a stark indicator of the reality that the economic slowdown has had varying effects on different entities, which could make RBI's monetary policy choice tough.

Axis Bank, the country's third-largest private sector bank, on Tuesday raised rates from 9% to 9.25% for deposits of size Rs 1 crore to less than Rs 5 crore and for maturity of 18 months to less than five years. "We have raised rates for ALM (asset liability management) reasons," said a senior treasury official with the bank, requesting anonymity.

Even as the market clamours for lower interest rates, banks are finding it difficult to raise funds to meet loan demand at low rates, forcing many of them to raise deposit rates.

Corporation Bank had, on Monday, introduced a new tenor for 555 days offering 9.10% per annum, higher than the maximum of 9% it pays for one-year deposits. The bank pays 6.5% to 9% for deposits of various maturities. Dena Bank increased interest rates on term deposits for maturity period of one year to less than two years by 35 basis points since December 22.

At the system level, deposit growth has lagged the RBI's comfort level of 15 % for FY'13. As of mid-December '12, deposits in the system grew by 13.3% year-on-year compared to 18% in the same period a year ago. Loan growth is, however, higher at 16.3%, compared with the central bank's comfort of 16% for the year.

The central bank has been worried about the growing wedge between deposit and loan growth. "The wedge between deposit growth and credit growth could widen on the back of the seasonal pick-up in credit demand in the second half of the year," Governor Duvvuri Subbarao had said last September.


Source: Economic Times

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IRDA asks Bajaj Allianz to adhere claim settlement norms

Taking serious note of violation of claims servicing regulations by Bajaj Allianz General Insurance, insurance regulator Insurance Regulatory and Development Authority (IRDA) has asked it to ’scrupulously adhere’ to the norms.

“The competent authority has taken serious note of your company’s violation of regulations...of IRDA (PPI) Regulations, 2002 in the matter,” it said in response to a complaint filed by an individual with regard to delay in settlement of motor insurance claim.

The IRDA, however, did not impose any monetary penalty.

“While no further charges are pressed for the moment, you are specifically advised to scrupulously adhere to IRDA PPI Regulations 2002 in all matters regarding claims servicing,” it said in a communication to Tapan Kumar Singhel, CEO, Bajaj Allianz General Insurance Company.

The regulator has also directed Bajaj Allianz to put in place a system so that all claim/papers/documents are properly docketed.

IRDA guidelines require that general insurance claims should be settled in 30 days of the filing of claims by the insured person.

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MasterCard Worldwide appoints Ari Sarker as India Country Head

MasterCard Worldwide on Tuesday said Ari Sarker has been appointed as its India Country Head.

“Ari Sarker has been appointed as Country Head, India to bolster the India leadership team as well as division president, South Asia,” MasterCard Worldwide said in a statement.

Sarkar will provide leadership to the South Asia team to drive core business growth, executing on the nascent but fast rising emerging payments opportunities in the subcontinent.

Sarker succeeds TV Seshadri who is moving from India to Singapore as Group Executive, Global Products and Solutions for APMEA,

Sarker, joined MasterCard in December 2010 and has been responsible for the growth of network processing under Global Products and Solutions (GP&S) for APMEA and across the payment value chain.

In his last role prior to MasterCard, he led the GE Private Equity business in India.

Prior to joining MasterCard, Sarker spent over 12 years with GE in a variety of senior roles in accounting, audit, corporate finance, and private equity across several key markets in the Americas, Europe and Asia Pacific.

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SBI not merging its associate banks this fiscal

State Bank of India is not looking to consolidate any of its associates with itself during the current fiscal, Chairman Pratip Chaudhuri has said.

“We could look at consolidation next financial year. Nothing this quarter,” he said. SBI has already merged State Bank of Saurashtra and State Bank of Indore with itself during the recent years.

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Federal Bank makes top-level changes

Private sector lender Federal Bank has announced two changes in its senior management by appointing Suresh Kumar as Non-Executive Chairman and K.M. Chandrasekhar as an Additional Director.

Suresh Kumar, who has been on the board of the Kochi-based bank since November 2005, will stay as the Non-Executive Chairman for two years.

Besides, he is the Non-Executive Chairman of the bank’s associate concern, Fedbank Financial Services Ltd, and Director in IDBI Federal Life Insurance Co. Ltd.

On the other hand, Chandrasekhar’s term will be for three years. He has been Vice-Chairman of Kerala Planning Board and former Union Cabinet Secretary.

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Allahabad Bank to shore up priority sector lending

Allahabad Bank has signed a Memorandum of Understanding with the Chamber of Indian Micro, Small and Medium Enterprises (CIMSME) to shore up its priority sector lending.

CIMSME represents the interests of companies in MSME sector, with banks, financial institutions, concerned ministries and other organisations.

As per the terms of agreement, CIMSME would mobilise proposals from its members for consideration of the bank. Once the loan is sanctioned, the organisation would support the bank in follow-up and recovery of dues and provide early warning signals, if any, said a press statement issued by the bank.

The MoU will help accelerate the process of disposal of loan proposals under MSME and help the bank garner quality proposals and boost credit flow to the sector.

shobha.roy@thehindu.co.in

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