Corp Bank allots pref shares to Govt

Corporation Bank has allotted 47,85,137 equity shares to the Government of India on a preferential basis.

The bank informed the BSE that the preferential allotment committee of the board of the bank, which held a meeting on Friday, has allotted 47,85,137 equity shares of Rs 10 each at a premium of Rs 416.32 a share to the Government on a preferential basis. This allotment will help the bank raise Rs 203.99 crore.

Consequent upon this, the issued and subscribed capital of the bank gets raised to 15,29,14,391 equity shares. With this preferential allotment, the holding of the Government in the bank gets increased from 58.52 per cent to 59.82 per cent.

The notification to the BSE said that the equity shares so allotted shall rank equally with the existing equity shares of the bank — including dividend, if any — and the same shall be locked in for a period of three years from the date of allotment — March 22, 2013.

It may be mentioned here that the March 15 extraordinary general meeting of the shareholders of the bank had given its approval for the preferential allotment to the Government.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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SKS Micro raises Rs 115 cr via securitisation deals

SKS Microfinance Ltd, India’s only listed micro-lender, today said it has completed two more securitisation transactions aggregating Rs 115 crore.

In a stock exchange filing, SKS without naming the rating agency said both the transactions were rated as A+(SO).

“The company has completed two securitisation transactions aggregating Rs 115 crore, rated A1+(SO). With this, the company has completed 10 securitisation transactions aggregating Rs 981 crore in FY13 (YTD),” SKS said in the filing.

When contacted Dilli Raj, Chief Financial Officer, SKS, said the securitisation was done from the receivables of non-AP portfolio.

“While one securitisation deal was done with a private sector bank, the other was completed with a public sector bank,” Raj told PTI.

Securitisation is the process of conversion of existing assets or future cash flows into marketable securities.

SKS shares rose 5.85 per cent to Rs 126.60 on Bombay Stock Exchange during afternoon trade.


Source: thehindubusinessline

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ING Vysya Life is now subsidiary of Exide Ind

Exide Industries Ltd said on Friday it has bought out three other partners holding 50 per cent stake in ING Vysya Life Insurance Co Ltd (IVL).

It informed the stock exchanges that the purchase deals involved erstwhile partners — 26 per cent of ING Group, 16.32 per cent of the Hemendra Kothari Group and 7.68 per cent from the Enam Group. The total consideration was around Rs 550 crore.

ING Vysya Life Insurance Co has now become a wholly-owned subsidiary of Exide. The Kolkata-headquartered battery-manufacturing company had first “invested” in the insurer in 2005.

jayanta.mallick@thehindu.co.in


Source: thehindubusinessline

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SEBI invites applications for mutual fund distribution SRO

Starting the process for setting up a Self Regulatory Organisation (SRO) for the mutual funds (MF) distributors, capital markets regulator SEBI today invited applications from groups of intermediaries interested in forming such an oversight body.

The move follows notification of norms by the Securities and Exchange Board of India (SEBI) in January to set up an SRO for regulation of distributors of mutual fund and portfolio management products.

In a public notice issued today, the SEBI said it is inviting applications from “any group or association of intermediaries which are desirous of being recognised as an SRO...for distributors of mutual fund products”.

As per the norms, an applicant seeking SRO status from SEBI has to be a registered company under the Companies Act.

Among others, the applicant should have a minimum net-worth of Rs one crore and have adequate infrastructure to enable it to discharge its functions as a SRO.

Besides, the directors of the applicant entity would need to have professional competence, financial soundness and general reputation of fairness and integrity to the satisfaction of SEBI.

In addition, the applicants and their directors must not be involved in legal proceedings connected with the securities market or have any conviction for an economic offence.

According to the norms, the certificate of recognition as an SRO would be valid for a period of five years.


Source: thehindubusinessline

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IOB hopes to meet 15% bulk deposit norm

Indian Overseas Bank (IOB) today said it is hopeful of reducing its bulk deposit level out of the total deposit to the mandated level of 15 per cent by end of the current fiscal.

This would provide space for increase in the Chennai based lender’s net interest margin (NIM) in the fourth quarter of FY13, a top official said.

“We are hopeful of reducing the bulk deposit to 15 per cent by end of the fiscal from more than 30 per cent last fiscal,” IOB Executive Director, A K Bansal said here.

He said the declining bulk deposit rates will also supplement the bank’s NIM.

“Rates of high cost deposits have fallen from a high of 11 per cent in March last year to around 9.6-9.7 per cent level now, which will support margin.”

Bansal said the bank would re-price the bulk deposits, which will come for maturity in the near future.

The bank had earlier said its NIM would be around 2.8 per cent in the fourth quarter.

Last year, the finance ministry has directed the public sector banks to reduce their bulk deposits to 15 per cent of the total deposits by end of this fiscal to improve their profitability and for sound asset-liability management.

On the impact of repo rate reduction in the March 19 mid-quarter policy review meet, Bansal said the bank would take a call on rates taking into account the deposit mobilisation environment.


Source: thehindubusinessline

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SKS plans to resume lending operations in Andhra Pradesh soon

Country’s only listed micro lender SKS Microfinance today said it plans to resume lending operations in Andhra Pradesh soon, two years after the state government came out with a stringent laws to regulate the industry.

SKS Chief Financial Officer, Dill Raj said the recent Supreme Court’s interim order was of great relief to them and paves way to resume operations in the state.

“That is primary relief we got (from the Supreme Court order). We plan to carry out our business in Andhra Pradesh strictly in compliance with the Supreme Court order. We will adhere to those two sections. Also, we will comply with the Reserve Bank Rules,” he said,

When contacted, R Subrahmanyam, state Principal Secretary, Rural Development, said the Andhra Pradesh government is going to file a detailed affidavit with Supreme Court.

“We have not been issued any notice by the Supreme Court in this case. As far as our interpretation goes, Supreme Court did not set aside AP MFI Act,” Subrahmanyam said.

The Supreme Court only said no coercive measures should be taken by the state government, he added.

Dilli Raj said, SKS has 122 branches in the state and 1,200 people are working.

“Now we are getting our plans ready for fresh lending. May be in two to three days time, we should be ready with the plans,” he added.

Meanwhile, shares of SKS closed at Rs 119.60, down 10.58 per cent over their previous close on the BSE.


Source: thehindubusinessline

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United Bank ties up with Tata Power Solar

United Bank of India has entered into a memorandum of understanding (MoU) with Tata Power Solar to provide credit to the non-renewable energy sector.

Under the MoU, Tata Power will leverage the bank’s branch network in the eastern region to make easy finance available to the purchaser of the off-grid solar home lighting or water heating system, said a bank statement.

The bank, in turn, will utilise the Tata Power outlets to increase its reach in the country.

The arrangement will facilitate the bank to further increase its exposure to the micro sector, said Deepak Narang, Executive director, United Bank.

shobha.roy@thehindu.co.in


Source: thehindubusinessline

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Exim Bank extends $ 41.6 mn credit to Comoros

The Export Import (Exim) Bank  said that it has extended a line of credit worth USD 41.60 million to the island nation of Comoros, located off the African coast, to install an 18-mw power project in the capital city of Moroni.

Under the agreement, the Exim Bank will reimburse 100 per cent of contract value to Indian exporters upfront upon shipment of goods or after providing the services, the bank said in a statement.

This is the first LoC extended by Exim Bank to Comoros and takes the total to 169 LoCs, covering 76 countries with credit commitments of over USD 9.106 billion.

An agreement was signed between Exim Bank Executive Director David Rasquinha and Comorosian Vice-president in charge of finance Mohamed Ali Soilihi in New Delhi.


Source: Economictimes

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Deutsche Bank restates 2012 profit on writedowns, legal costs

Deutsche Bank, Germany’s biggest bank, said on Wednesday that writedowns and legal costs hit its 2012 earnings harder than expected and it has now been forced to restate last year’s profits.

“New developments related to specific existing legal matters have occurred after the disclosure of (our) preliminary, unaudited 2012 results on January 31,” Deutsche Bank said in a statement.

“Based on these developments ... the bank has increased its provisions for litigation by €600 million ($774 million) to €2.4 billion.

“This reduces the previously announced income before income taxes by €600 million... and net income by €400 million,” it said.

Deutsche Bank is currently being investigated over allegations that some of its employees may have been involved in rigging the Libor and Euribor interest rates.

And one of its co-chief executives, Juergen Fitschen, is among a number of top managers suspected of involvement in a tax evasion scheme in the trading of carbon emissions certificates.

Deutsche Bank’s restated year-end net profit now stood at €291 million in 2012, compared with €4.326 billion in 2011.

Pre-tax profit plummeted to €784 million from €5.39 billion.

Deutsche Bank’s so-called Core Tier One capital ratio—a measure of a bank’s ability to withstand unforeseen risks—slipped to 7.8 per cent in 2012 from 8.0 per cent announced at the end of January.

“Nevertheless, the bank reaffirms its target for (a capital ratio) of 8.5 per cent at March 31,” it insisted.

Plans to pay shareholders an unchanged dividend of 0.75 euros per share would not be affected, the statement added.

Deutsche Bank shares were the biggest gainers on the Frankfurt stock exchange on Wednesday, adding 2.42 per cent while the blue-chip DAX 30 index was up 0.56 per cent.


Source: thehindubusinessline

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BoI foreign currency bonds issue oversubcribed

Bank of India’s $500-million Foreign Currency Bonds issue, which hit the market on March 14, has been oversubscribed 5.4 times.

It is significant for being the first bond transaction by BoI offered to US institutions under Rule 144A and is also the first Indian PSU bank offering in 2013.

Priced at 280 bps above US Treasury, the bond has the lowest coupon for any Indian 144A offering. Subscription for the bonds was worldwide, with 46 per cent coming from Asia, 17 per cent from Europe and the balance 37 per cent from the US, the bank said in a filing to the BSE.

V.R. Iyer, CMD, BoI, said: “We are pleased to receive a warm welcome form US investors on our first 144A bond transaction.”

Bank of India has 52 foreign offices in 20 countries and over 25 per cent of its business comes from overseas. It was also the first Indian bank to go overseas when it opened an office in London in 1946.


Source: thehindubusinessline

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SIDBI signs tripartite MoU with Egyptian body, World Bank

Small Industries Development Bank of India (SIDBI) has signed a tripartite Memorandum of Understanding (MOU) with Social Fund for Development (SFD) Egypt and the World Bank.

The MOU was signed in the presence of visiting Egyptian President Mohamed Morsi and Commerce and Industry Minister Anand Sharma here today.

Under the MOU, SIDBI and its associates will provide consultancy for three year period to SFD and establish credit guarantee system for micro, small and medium enterprises in Egypt, Sushil Muhnot, Chairman & Managing Director, SIDBI told Businessline.

SIDBI will also help SFD in cluster development, introduction of venture capital and risk capital products in Egypt besides developing responsible micro-finance in that country, Muhnot said.

World Bank is carrying out a SME development project in Egypt and will fund the technical assistance/consultancy to be provided by SIDBI, it is learnt.

Srivats.kr@thehindu.co.in


Source: thehindubusinessline

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Little scope to reduce lending rates

The 25 basis point reduction in the repo rate by the RBI might not be immediately passed on to customers, said S. Chandrasekharan, Executive Director, UCO Bank. “Most banks had reduced their base rates post the 25 basis point reduction in policy rates announced by Reserve Bank of India in January this year. So there is little scope for banks to reduce lending rates further, at least till March 31,”Chandrasekharan said. UCO Bank had reduced its base rate by 30 basis points to 10.2 per cent post the January announcement. Banks have also increased the interest rates on deposits in certain buckets, particularly for retail depositors. This was primarily due to liquidity pressure in the system, he said. “Unless the cost of deposits comes down it will be difficult to pass on the benefit by way of a cut in lending rates,” he pointed out. —

shobha.roy@thehindu.co.in


Source: thehindubusinessline

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IDBI Bank raises $500 m in overseas bond sale

IDBI Bank has raised $500 million through sale of long-term bonds in international markets at a coupon of 3.75 per cent (300 basis points over the US Treasury Bill).

The bond offering, which has been made by the bank’s Dubai International Financial Centre (DIFC) branch, is significant, as it comes in a highly uncertain market marked by risks of bankruptcy of Cyprus and domestic political developments, with the DMK pulling out of the United Progressive Alliance at the Centre.

The success of the current issue, which is part of IDBI Bank’s $3.5 billion medium-term notes programme, is reflective of the faith in India’s long-term growth story, debt market observers said.

The bonds to be issued by the DIFC branch will have a tenure of five years and 10 months and will be listed on the Singapore stock exchange.

Confirming that IDBI Bank had mobilised $500 million through the bond offering, a top official said that substantial response to the issue came from investors in the East (63 per cent from Asia, and the rest mostly from Europe).

With this bond offering, IDBI Bank has so far this fiscal raised $2 billion in foreign currency.

Standard Chartered Bank and HSBC were arrangers for the offering. This bond offering comes close on the heels of Bank of India, another public sector lender, raising $500 million in international markets at US Treasury plus 280 basis points last week.

Rush for overseas funds

With rupee funds remaining costly here, more Indian companies are accessing offshore markets for their funding requirements.

Over half a dozen Indian organisations, including RIL, PowerGrid, ICICI , HDFC Bank, Exim Bank, and Bharti Airtel, have till date raised about $4.25 billion so far in 2013.

srivats.kr@thehindu.co.in


Source: thehindubusinessline

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IOB allots 12.71-cr equity shares to Govt

Indian Overseas Bank has obtained the approval of its shareholders to create and allot 12.71 crore equity shares to the Government.

According to a press release from the bank, the approval is to create up to 12.71 crore equity shares of Rs 10 each for cash at an issue price of Rs 78.68 a share, including a premium of Rs 68.68 a share, for a total of Rs 1,000 crore to the Government of India.

The bank has already received the amount from the Government and, accordingly, allotted the equity shares to it on preferential basis.


Source: thehindubusinesslinea

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EMI relief for home loan takers in the offing

Home Loan borrowers hoping for lower interest rates may have to wait a little longer. Banks are not likely to pass on the benefits of RBI's repo rate cut to borrowers this month.

"There is no reason to believe that easing will happen at a rapid pace but it may happen at a measured pace. We expect easing of deposit rates as we enter new fiscal year, and as this happens, the transmission will take place," said SS Mundra, chairman and managing director, Bank of Baroda.

However, borrowers need not despair. While interest rates are unlikely to be reduced immediately, they can expect relief in the coming weeks. "Since the deposit growth has been muted, interest rates on deposits too have remained high. Therefore, we expect the monetary transmission to take place only after two to three months," added B A Prabhakar, chairman and managing director, Andhra Bank.

And when banks do cut rates, you will have two options to choose from - reducing your EMIs or the loan tenure. "In such cases, it might be tempting to get your EMI lowered, but refrain from doing so. Getting the tenure shortened should be your priority so that you clear your dues sooner," says certified financial planner Pankaj Mathpal, CEO, Optima Money Managers. Remember, shorter tenure would mean lower interest burden on your loan.


Source: Economictimes

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UCO Bank lodges complaint with CBI on FD scam

UCO Bank has lodged complaints of two alleged frauds — one related to the West Bengal Infrastructure Development Finance Corporation (involving Rs 120 crore) and the other linked to West Bengal State Cooperative Bank (involving Rs 20 crore) — with the Central Bureau of Investigation.

The Bank’s officer on special duty, S.C. Sharma told Business Line that the lender had complained of alleged “frauds” related to its Circus Avenue branch and the Hastings branch in the city. “The WBIDFC-related complaint was filed on March 14 with the CBI fraud cell in New Delhi. The other related to the WBSCB was lodged on March 16”, the official said.

For a bank, it is mandatory to file complaints regarding such “high-value” (over Rs 15 crore) frauds with the CBI. Sharma said though the CBI was yet to swing into action, the Kolkata Police was continuing with the investigation.

Racket

On a complaint by the State Government unit — WBIDFC — on March 13, Kolkata Police arrested the branch manager of the UCO Bank Circus Avenue branch last Thursday.

However, according to sources, no arrest has so far been made in relation to the alleged fraud involving Hastings branch of the branch. The cooperative bank, which was also defrauded by fake fixed deposit certificates, also filed an FIR with the police.

Bank officials said five staff members of the Hastings branch and 12 at the Circus Avenue branch have been suspended.

“It seems a racket involving people within the organisations and the bank was behind the wrongdoings”, said a source.

UCO Bank claimed on Saturday that the WBIDFC did not have any current or term deposit account with the Circus Avenue branch of the bank. Neither did the branch submitted any bulk deposit rate quotation to the corporation, it said.

The bank also said that the so-called two fixed deposit certificates, allegedly issued by the Circus Avenue branch to WBIDFC, were “fake”. The bank further said, “at no point of time the said bank branch has issued any deposit certificate” to WBIDFC.

According to WBIDFC, the corporation had transferred Rs 59 crore from Bank of India on August 30 last year and deposited it to Circus Avenue branch of UCO Bank. “On January 10 this year, we further transferred Rs 61 crore from Indian Bank to the UCO Bank’s branch. WBIDFC obtained two separate fixed deposit certificates from the bank, signed by the branch manager”, Avirup Sarkar, Chairman of the WBIDFC, had told Business Line last week.

jayanta.mallick@thehindu.co.in


Source: thehindubusinessline

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IDBI Bank raising over $500 m in overseas bond sale

State-run IDBI Bank today hit the overseas debt market with a benchmark-sized five-year bond issue to raise over $500 million, according to merchant banking sources.

“IDBI Bank is raising over $500 million through a five-year Reg S (Regulation S bonds) note issue. The five-year bond issue, maturing in January 2019, has an initial pricing guidance of 315 basis points over the US Treasury bills,” a merchant banker involved with the sale of the senior unsecured notes programme told PTI.

The current issue is part of the bank’s $3.5 billion medium-term notes programme.

Meanwhile, global rating agency Standard & Poor’s has assigned BBB— rating to the proposed IDBI issue, S&P said in a statement issued from Singapore.

S&P further said the rating on the notes reflects the long-term counter party credit rating on the issuer.

The notes will constitute direct, unconditional, unsecured and unsubordinated obligations of IDBI, the rating agency added.

It can be noted that more and more domestic companies are accessing overseas markets for funding as the rupee funds are too costly.

So far in 2013, over half a dozen companies, including RIL, PowerGrid, Tata Comm, ICICI Bank, HDFC Bank, Exim Bank, and Bharti Airtel among others, raised $4.25 billion from overseas debt market.


Source: thehindubusinessline

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RBI cuts repo rate by 25 bps, leaves CRR unchanged

The Reserve Bank of India has cut repo rate by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect. Consequently, the reverse repo rate stands adjusted to 6.5 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 8.5 per cent with immediate effect.

The RBI has left the cash reserve ratio unchanged at 4 per cent.

The central bank said high current account deficit and inflationary expectations limit possibility of further easing of rates.

At 14.02 p.m., the 30-share BSE index Sensex was trading tanked 322.17 points or 1.67 per cent to 18,971 and the 50-share NSE index Nifty fell 98 points or 1.68 per cent to 5,737.25.

The rupee fell to 54.33 against the dollar after the RBI indicated that the "headroom for further monetary easing remains quite limited".

Economic activity weakens

In its mid quarter view unveiled this morning, the RBI said that since January, while global financial conditions improved, economic activity had weakened. It noted that on the domestic front too, "growth has decelerated significantly, even as inflation remains at a level which is not conducive for sustained economic growth."

It said that food inflation remains high, driving a wedge between wholesale price and consumer price inflation, and is exacerbating the challenge for monetary management in anchoring inflationary expectations.

GDP growth

RBI said India’s GDP growth in Q3 of 2012-13, at 4.5 per cent, was the weakest in the last 15 quarters. It said that what is worrisome is that the services sector growth, hitherto the mainstay of overall growth, has also decelerated to its slowest pace in a decade.

Investments, key to growth

The RBI said that the key to reinvigorating growth is accelerating investment. It said, "The Government has a critical role to play in this regard by remaining committed to fiscal consolidation, easing the supply bottlenecks and improving governance surrounding project implementation."

It also issued a caution to the Government on upward revisions in the minimum support prices (MSP) in view of their implications for overall inflation.

Don't expect more cuts

While admitting that a competitive interest rate is necessary for reviving investment, the RBI said it was not sufficient. In its guidance, the RBI noted that risks on account of the current account deficit remain significant notwithstanding likely improvement in Q4 over an expected sharp deterioration in Q3 of 2012-13.

In a key signal, the RBI noted that even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited.

Decoded, that means don't expect more cuts for now.


Source: thehindubusinessline

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LIC Housing Fin appoints V K Sharma as MD & Chief Executive

LIC Housing Finance has elevated V K Sharma to the post of Managing Director and Chief Executive of the company with effect from March 19, 2013.

The company in a filing to the BSE said: “V K Sharma who has been Director and Chief Executive of the company has been appointed as Managing Director and Chief Executive of the company in the capacity of whole time Executive Director with effect from March 19, 2013.”

Also, Sushobhan Sarker who has been Managing Director of the company will continue to be a Non-Executive Director with effect from March 19, 2013, it added.

Shares of LIC Housing today ended flat at Rs 241.35 apiece on the BSE.


Source: thehindubusinessline

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SBI chief pitches for 50 bps cut in CRR, repo rate

A softening in lending rates will be conducive for kick-starting the investment cycle in the country, according to State Bank of India Chairman Pratip Chaudhuri.

Whichever country has shown rapid growth, particularly in the manufacturing sector, the interest rates were much lower.

“Rates of interest need to come down further. Our base rate is at 9.70 per cent, I would like to see a base rate of something like 9.50 per cent because internationally the rates are so low,” said Chaudhuri.

Base rate is the minimum lending rate below which banks cannot lend. The actual lending rates charged to borrowers by banks are the base rate plus borrower-specific charges, which include product-specific operating costs, credit risk premium and tenor premium. India’s largest bank last pared its base rate from 9.75 per cent to 9.70 per cent on January 30.

SBI nudged its base rate lower a day after the Reserve Bank of India cut both the repo rate and the cash reserve ratio (CRR) to 7.75 per cent (from 8 per cent) and 4 per cent (from 4.25 per cent of deposits), respectively.

Repo rate is the interest rate at which RBI lends short-term money to banks. CRR is the slice of deposits that banks have to park with RBI. Chaudhuri said: “If you are a corporate in India and want to set up a petrochemical plant, you will pay 11 per cent interest rate. But if your competitor in Dubai is setting up a similar petrochemical plant, he will pay an interest rate of 3 or 4 per cent… So, you are uncompetitive from day one.”

Policy rates

The SBI chief said lending rates in the banking system could soften if the central bank cuts key policy rates in its mid-quarter review of monetary policy, which is due on Tuesday.

“Both the CRR and the repo rate should be cut by 50 basis points each. CRR cut is more important as it releases primary liquidity into the banking system.

“Whereas a repo rate cut is more of a signal/an indication (of the direction of interest rates). It is not very material but, yes, the cost of refinance goes down,” said Chaudhuri.

The central bank has underscored that subdued investment activity in the economy has led to the decline of capital goods production. With investment activity remaining subdued, the prospects of a recovery in industrial growth appear weak.

In its latest macroeconomic and monetary developments document, the RBI observed that the emerging slack in investment needs to be addressed. This slack has emerged from a combination of domestic and global factors.

“While global growth may remain slow for some more years as significant fiscal adjustment is needed to overcome the debt overhang in the advanced economies, the domestic growth could respond to the policy (reform) action that has now begun,” it said.

Ramkumar.k@thehindu.co.in

Vagees.ns@thehindu.co.in


Source: thehindubusinessline

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IDBI Bank to offer new service

IDBI Bank has said that it will implement digital signature-based authentication solution for its corporate Internet banking clients.

This will ensure authenticity, non-repudiation, confidentiality and integrity of the data transmitted, the bank said.

The new generation public sector bank said it has partnered eMudhra Consumer Services to implement the solution.

satyanarayan.iyer@thehindu.co.in


Source: thehindubusinessline

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Clause in LIC pension policy dubbed ‘unfair trade practice’

The State Consumer Disputes Redressal Commission has held that a specific condition in an LIC’s pension policy that no proportionate annuity can be paid from the date of last payment of annuity instalment till the date of death of an annuitant amounted to unfair trade practice.

The Commission made the ruling while upholding an order of the Ernakulam District Consumer Disputes Redressal Forum directing the LIC to disburse the annuity arrears to a complainant. The Commission dismissed the appeal filed by LIC.

The district forum passed the order on a complaint filed by C.R. Paniker of Aluva.

According to him, his wife died on April 10, 2009. She had taken seven immediate annuity ‘New Jeevan Akshay’ policies from LIC.

The policies had provided for payment of specified amounts of annuity until the death of annuitant and for the return of the purchase price to the nominee of the annuitant on her death. The deceased opted for payment of annuity instalments yearly.

Panicker said he had received the purchase price of the policies in June 2009. However, proportionate annuity for the period from the date of payment of the last annuity till the date of death of annuitant had not been paid.

The LIC took the stand that it was unable to meet his demand in view of a specific condition that no annuity could be paid from the last date of payment till the date of the death of the annuitant.

The Commission observed that the condition mentioned in the policy amounted to “unfair trade practice”. That apart, if the deceased had opted for monthly annuity she would have obtained annuity up to the month preceding her death. Moreover, the policies were immediate annuity policies, that is, the first instalment was to be paid on the date of joining itself.

Dismissing a contention of the LIC that the Insurance Ombudsman had already rejected the petitioner’s claim, the Commission observed that the National Commission had already held that a decision by the Ombudsman was not binding on a complainant.

gopakumar.kc@thehindu.co.in


Source: thehindubusinessline

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Bengal Infra FD certificates fake, says UCO Bank

UCO Bank said on Saturday that the West Bengal Infrastructure Development Corporation (WBIDFC) did not have any current or term deposit account with the Circus Avenue branch of the bank in the city, which allegedly submitted rate quotation for bulk deposits to the corporation. On a complaint by the State Government unit, the Kolkata police had on Thursday arrested the branch manager of the bank. 

WBIDFC had alleged that a large part of the Rs 120 crore fixed deposits were found missing on Wednesday. In a statement, the Kolkata circle of the bank said the fixed deposit certificates, as claimed by WBIDFC, were “fake”. “At no point of time, has the said bank branch issued any deposit certificate” to WBIDFC, it said. “In addition, the branch has not submitted to the organisation (WBIDFC) any rate quotation for accepting bulk deposits.”“We have requested the investigating agencies to look into the matter,” the statement added.


Source: thehindubusinessline

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Mukesh Ambani to exit board of Bank of America

Reliance Industries Chairman and Managing Director Mukesh Ambani will step down as the board of director of Bank of America and instead join its global advisory council.

Ambani has decided not to seek another term on the bank's board at its 2013 annual meeting of stockholders, Bank of America had said in a statement yesterday.

He has served on the Bank of America board since March 2011 and became a director prior to the establishment of the global advisory council.

Ambani will join 13 other internationally recognised business, academic and public policy leaders who serve on the global advisory council.

The council, chaired by Bank of America Chief Executive Officer Brian Moynihan, is a non-fiduciary body that shares expertise and insights on the bank’s global engagement.

“Our global advisory council is an ideal venue for the company to continue to benefit from Mukesh’s judgment and insights,” Moynihan said.

“We are very grateful for Mukesh’s contributions to the board and for the global expertise and perspective he provided,” said Chad Holliday, Chairman of the Bank of America board of directors.

One of the world’s largest financial institutions, Bank of America serve approximately 53 million consumer and small business relationships.


Source: thehindubusinessline

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Karnataka Bank to open 120 tiny branches by March next year

Karnataka Bank will open 120 ultra-small branches (USBs) by March 2014. According to a press release issued here on Saturday, the bank has so far opened 18 USBs, and eight more are proposed to be opened by March 31. With this, the bank is planning to close the current financial year with 26 USBs. The release said that another 94 USBs are planned for 2013-14. With this, the total of USBs will be 120 by March 2014. P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said that the bank is taking up financial inclusion activities in 205 gram panchayats, covering 1,002 villages. With this, the bank plans to reach out to over 2.10 lakh households in 1,002 villages with a total population of 10.51 lakh. The release said that USB acts as an intermediary branch located at gram panchayat and linked to the base branch. While an officer from the base branch will visit the USB at least once a week and provide non-financial services, the basic financial services and transactions will be provided through business correspondents.


Source: thehindubusinessline

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Axis Bank initiates probe in money laundering allegations

Private sector lender Axis Bank said that it has asked 16 officials concerned to report to the administrative offices, pending investigation which has been initiated with regard to alleged money laundering activities.

“The bank has initiated an internal enquiry. Pending outcome of the enquiry, we have asked 16 employees concerned to report to the administrative offices,” Axis Bank sources said.

The country’s three largest private banks — ICICI Bank, HDFC Bank and Axis Bank — were accused of indulging in money laundering both within the country and outside, with an online portal Cobrapost claiming that a sting operation conducted by it has revealed a money laundering scam.

Yesterday, ICICI Bank had suspended 18 officials concerned till the investigations are completed.

Cobrapost had played the contents of a purported video recording of the officials of private banks including Axis Bank, allegedly agreeing to receive unverified sum of cash and put them in their investment schemes and benami accounts in violation of anti-money laundering laws.

‘Operation Red Spider’

The footage taken in ‘Operation Red Spider’ purportedly shows a number of senior executives of the three banks verbally agreeing to take huge amount of cash from the undercover reporter and putting them into a variety of long-term investment plans so that the black money ultimately is converted into white.

However, neither any account was opened nor any cash deposited in these banks.

Soon after the revelation, the bank had said in a statement: “Axis Bank has systems and processes that are robust and fully compliant with extant regulations...we are confident that all our businesses will live up to the high standards we have set for ourselves as a bank.”


Source: thehindubusinessline

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Money laundering charges: HDFC Bank appoints Deloitte to conduct enquiry

Facing serious charges of money laundering, the country’s top three private banks have been galvanised into action. They have appointed audit and law firms to probe the charges, suspended staff, and directed branch heads to report to administrative offices.

HDFC Bank, which is believed to have suspended 20 employees who were caught on camera by Cobrapost for allegedly offering to covert black money into white, has appointed Deloitte Touche Tohmatsu India to carry out an independent forensic enquiry into the allegations and reported statements made by its staff on camera.

The private sector bank has also appointed Amarchand & Mangaldas & Suresh A. Shroff & Co to examine any breach of the bank’s code of conduct and ethical standards by bank officials. Alongside, the bank said in a statement, an internal departmental probe has been launched to verify the video-taping of the bank officials.

HDFC Bank said it will carry out special audit of some of its branches where the reported video-taping was done.

A spokesperson for the country’s largest private sector lender ICICI Bank said 18 employees had been suspended pending inquiry into the suspected money laundering case. “We have constituted a high-level inquiry committee to investigate into the matter and submit its findings in two weeks,” the bank said in a statement. Axis Bank has advised 16 of its employees who were caught on tape to report to their administrative offices, pending enquiry.

“We are internally trying to check if the transactions claimed by the online Web site (Cobrapost.com) have actually taken place. A high-level committee has been constituted to monitor and supervise the entire investigation process on a daily basis,” said an Axis Bank official.

beena.parmar@thehindu.co.in


Source: thehindubusinessline

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Dhanlaxmi Bank to raise Rs 51 cr via pref. issue

Dhanlaxmi Bank Ltd has proposed to mobilise Rs 51 crore by issuing 85 lakh equity shares with an issue price of Rs 60 per share with a face value of Rs 10 each.

The bank plans to raise funds to augment its long-term capital.

The shares will be issued would be on a preferential allotment basis, subject to the approval of RBI, SEBI and other authorities concerned, bank sources said.


Source: thehindubusinessline

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