Singapore’s Heliconia to buy 2.6% in Kotak Bank for Rs 1,296 cr

Private sector Kotak Mahindra Bank today said Singapore’s Heliconia Pte Ltd will buy 2.6 per cent stake in the bank for Rs 1,296 crore.

The board of directors has approved Heliconia Pte Ltd, an affiliate of GIC of Singapore, to subscribe to two crore equity shares, or about 2.6 per cent shareholding in the bank for Rs 1,296 crore, Kotak Bank said in a statement.

The price of Rs 648 per share offered by Heliconia Pte Ltd values Kotak Mahindra Bank at about Rs 49,000 crore.

Shares of Kotak Bank were trading at Rs 635 apiece, up 1 per cent on the BSE during the afternoon.

The preferential equity issue is subject to shareholder and other necessary regulatory approvals, the statement added.

“We welcome a reputed and large global financial institution of the stature of GIC as our shareholder. Their investment in the bank underscores the strong fundamentals of our institution,” Kotak Mahindra Bank President and Group CFO Jaimin Bhatt said.

The transaction augments the bank’s Tier-I capital for the pursuit of growth opportunities and is a step towards dilution of promoter stake in the bank, the statement said.

The consolidated networth of Kotak Group is Rs 14,568 crore.


Source: thehindubusinessline

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IRDA cautions people against fake insurers

The Insurance Regulatory and Development Authority (IRDA) has asked the general public to be wary of some logistic services providers selling insurance illegally.

“It has come to the notice of the IRDA that a few entities under the banner of cargo carriers, couriers, logistic providers and transporters are charging consideration from their clientele towards their contractual liabilities using the term insurance,’’ IRDA said in a circular.

Only licensed entities can offer an insurance product and collect or charge insurance premium towards consideration.

The general public should check the veracity of the entity as well as the insurance arrangement promised before making any payment as premium, the regulator said.


Source: thehindubusinessline

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SBI hits global bond market to raise $1 b

State Bank of India (SBI) today hit the international bond market to raise about $1 billion (Rs 5,430 crore) in a five-year dollar bond sale programme.

“The State Bank today hit the overseas bond market with a benchmark issue ($500 million or above). The initial pricing of the fixed rate, five-year senior unsecured bond is fixed at US treasury plus 275 basis points,” a merchant banker involved in the deal said late this evening.

SBI chairman Pratip Chaudhuri confirmed the sale programme and said they should be able to close the issue by late tonight.

However, Chaudhuri did not put a size to the issue.

The merchant banker also said the bonds, which are being sold to raise $1 billion, are being offloaded through SBI’s London branch and will be listed on Singapore Stock Exchange.

He further said the issue is being sold globally and the bank has run extensive road shows in all the major financial centres like hong Kong, Singapore, London, Frankfurt, New York among others.

The current issue carries a Baa2 rating from Moody’s and BBB— by Standard & Poor’s. The issue is being managed by four merchant bankers.

This ongoing issue is the third bond sale by SBI in the past two years, with the latest being the $1.25 billion it had raised in a 10-year issue last July. That issue was the largest ever from a domestic bank and also the cheapest five year-issue by a domestic issuer.

At 3.75 per cent over the US treasury bills, the SBI issue was the cheapest ever by a domestic company till date with the effective coupon rate, payable half yearly, working out to be just 4.125 per cent.

SBI had mopped up another $1 billion in July 2010 also.

The bank has a board mandate to raise $10 billion from overseas over the next few years, and it has a headroom to raise nearly $6 billion more, including the current issuance, since it had raised nearly $4 billion till last year.

So far this year, domestic companies like Reliance Industries, Bharti Airtel, ICICI Bank, HDFC Bank, Exim Bank, PowerGrid, and Tata Communications among others, have raised a whopping $6.5 billion, which is 65 per cent of what India Inc mopped in the entire previous year.


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Ratnakar Bank raises Rs 324 cr

Private sector lender Ratnakar Bank has completed its second round of capital infusion of Rs 324 crore by issuing 3 crore new shares to domestic and global investors.

The bank had last raised capital in January 2011.

With the latest round of funding, the bank has raised total equity capital of Rs 1,100 crore in two years, the bank said in a statement.

Investors in this round of capital raising are International Finance Corporation, a member of the World Bank Group, Aditya Birla Private Equity, ICICI’s Emerging India Fund, IDFC S.P.I.C.E. Fund and Ascent Capital.

Additionally, Faering Capital, an existing investor in the Maharashtra-headquartered bank too participated in the second round.

Vishwavir Ahuja, Managing Director and CEO, Ratnakar Bank said, “This equity raising has significantly strengthened the financial foundation of the bank and will allow us to continue our investments in new products, branches, technology etc to meet customer requirements.”

beena.parmar@thehindu.co.in


Source: thehindubusinessline

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IDBI Bank’s fee income from govt biz doubles in FY13

With fees earned from facilitating tax collections doubling, IDBI Bank plans to step up its focus on government business.

In fiscal 2012-13 (FY13), the public sector bank earned Rs 60 crore fee income (Rs 30 crore in FY12) from government business, which includes facilitating collection of direct and indirect (Central) taxes, State sales tax and treasury business.

Direct tax includes corporate and personal income-tax while indirect tax includes Customs duty, excise duty and service tax.

IDBI Bank facilitated central tax collections aggregating Rs 1,42,776 crore in FY13 against Rs 1,12,543 crore in FY12, registering a 27 per cent growth. As per the revised budget numbers, the central tax collection in FY13 amounted to Rs 10,35,381 crore.

The bank also mopped up Rs 16,198 crore in FY13 for 14 States by way of sales tax/value-added tax against Rs 12,125 crore in FY12.

According to Viney Kumar, Executive Director, “We are proactively encouraging our customers to pay their taxes through us. This is part of our cross-sell activity.

“We want to leverage our technology as much as possible to facilitate e-payments to the Central and State Governments. Even non-IDBI customers can pay their taxes through us.”

Government business presents two-fold advantage for banks. While banks earn fee income, the funds collected also improve their overall low-cost CASA (current account, savings account) deposits, albeit only for a day.

“Any banking relationship is not just an asset relationship. It has to be seen holistically as asset plus liability plus whatever other cross-sell opportunities that a commercial bank can tap,” said Kumar.

The IDBI official pointed out that there was an over 200 per cent jump in Customs duty collection in FY13 to Rs 22,000 crore from Rs 7,000 crore a year ago.

“We introduced a system of multiple challan (receipt) payment facility for Customs duty through a single e-payment transaction (you can upload multiple challans in one go instead of uploading one by one). This facility helped push up Customs duty collection,” said Kumar.

ramkumar.k@thehindu.co.in


Source: thehindubusinessline

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RBI to release Rs 10 banknotes bearing rupee symbol

The Reserve Bank of India (RBI) said it will soon issue Rs 10 denomination banknotes incorporating the newly-devised rupee symbol.

The new notes would bear the inset letter ‘M’ in both the numbering panels of the Mahatma Gandhi series, 2005.

The note will also bear the signature of RBI Governor D Subbarao and the year of printing ‘2013’ printed on the obverse side, a RBI release said.

All banknotes of Rs 10 denomination, which have been issued in the past, will continue as legal tender, according to a release today.


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Federal Bank redesigns Web site

Federal Bank has launched its redesigned corporate Web site, which comes with updated content, easy-to-use features, innovative tools and a design that’s easy on the eyes.

Armed with a modern GPS-supported branch/ATM locator, users can locate any of the over 2,250 branches/ATMs within seconds.

Facility to apply for business loans online, value-added services for NRI customers, tools and calculators with enhanced features, interactive wizards for product search, virtual 360 degree view of its key branches are among the principal features.

Customers can also buy third party insurance products online.


Source: thehindubusinessline

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Union Bank to recruit 336 specialist credit officers

Public sector lender Union Bank of India is looking for 336 specialist credit officers, according to advertisement given by the bank.

Under its recruitment drive, the bank has notified about 349 vacancies in the specialist officers’ category with 336 for the position of credit officers and two positions for the economists, according to a notification on the bank’s website.

The bank’s online registration for application closes on April 23.


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Srei, Vakrangee Software get approval to set up ATMs

Srei Infrastructure Finance and Vakrangee Software have received the Reserve Bank of India’s nod for setting up automated teller machines or ATMs that will not be proprietary to a particular bank.

The two companies join Tata Communications and nine other players that now have the authorisation to set up ‘white label ATMs’ for reaching out to the un-banked and under-banked pockets. Unlike the over one lakh ATMs in the country, the white label ones will not display any bank logos and they will serve customers from all banks for the same fee.
At bank rates

Under the RBI guidelines, the authorisation for setting up a WLA operation would be initially valid for a period of one year. The operators are allowed to charge their customers as per bank charges.

The RBI’s licence would allow Srei to set up 9,000 ATMs in rural pockets of the country, said Rajiv Aggarwal, Chief Executive Officer of Bharat Technical Solutions, a group company.

Aggarwal says that Srei is well placed to roll out the service, thanks to the network of over 7,000 common service centres (which facilitate the delivery of e-governance services) established by one of its subsidiaries in rural parts of the country. Similarly, Vakrangee has been given the approval to set up a minimum of 5,000 ATMs per year.

“The RBI has completed the process of technical competency analysis and financial systems testing of Vakrangee. Now we are scouting for multiple sponsor banks to come on board,” Santosh Dash, Chief Executive Officer, Retail & Financial Services, Vakrangee Software, told Business Line. Vakrangee will also aim to earn extra revenue through advertisement and other value-added services on the ATM.

The names of the other eight companies that have secured RBI licences could not be determined. Spokespersons of L&T Finance and Muthoot Finance (companies whose names were doing the rounds in the initial stages) said that they are not part of the mix.

(With inputs from S Shankar and K. Ram Kumar in Mumbai.)

Adith.charlie@thehindu.co.in

Source: thehindubusinessline

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Indian Bank bags excellence award

Chennai-headquartered Indian Bank has been conferred with the National Excellence Award in Micro Enterprises lending by the Union Ministry of Micro, Small and Medium Enterprises for 2012.

According to a release from the bank, T.M. Bhasin, Chairman and Managing Director, received the award from the President of India Pranab Mukherjee recently at Vigyan Bhawan, New Delhi.

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SBI to discontinue free accident cover for loan customers

The country’s largest bank SBI will discontinue a free accident insurance cover given to its home and car loan customers from July this year.

In a notification to its customers, the State Bank of India said the complimentary group personal accident insurance cover (death only) for home and car loan customers will be discontinued on the expiry of current Master Policy on July 1, 2013.

“Hence, in case of accidental death of any Home/Car loan borrower on or before July 1, 2013, claims may be lodged for the outstanding amount in the loan account subject to the terms and conditions mentioned in Master Policy,” SBI said.

The bank, however, did not mention the reasons for scrapping the complimentary cover.

SBI said that its home and car loan borrowers, who do not have any insurance cover for their loan liabilities, may opt for the policies being offered by SBI’s insurance venture.

Currently, SBI General Insurance Company Ltd is offering an accident insurance cover of Rs 4 lakh for SBI’s savings bank account holders for an annual premium of Rs 100.

Earlier this year, SBI had said it provided personal accident cover to over 7 million of its account holders across the country in association with SBI General Insurance.

SBI General Insurance Company is a joint venture between the State Bank of India and Australia’s leading general insurance provider Insurance Australia Group.


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