Home loans: Compare bank interest rates

Zee Media Bureau

New Delhi: Buying your dream house requires a lot of research, more so when you opt for home loans.

It is very important for the home buyers to carefully choose banks and compare the rate of interest that the banks offer on home loans. Though the rate of interest differs from bank to bank, the tenure of loan is also different in various banks.

Let’s have a look at the interest rates on Home loan of some of the major banks of the country.

STATE BANK OF INDIA

Upto Rs. 30.00 lacs: 9.95% p.a.

Above Rs. 30.00 lacs: 10.10% p.a

State bank of India website mentions no fixed rate option in any limit bracket

UCO Bank

(Floating Option)

Floating: 10.20%

PUNJAB NATIONAL BANK

(Floating Option)

Upto 5 years: 11.00% (Upto Rs 30 lac), 11.75% (Above 30 Lacs to < 75 Lacs), 12.00% (Rs. 75 Lacs and Above)

Above 5 & upto 15 yrs: 11.25% (Upto Rs 30 lac), 12.00% (Above 30 Lacs to < 75 Lacs), 12.25% (Rs. 75 Lacs and Above)

Above 15 & upto 25 yrs: 11.50% (Upto Rs 30 lac), 12.25% (Above 30 Lacs to < 75 Lacs), 12.50% (Rs. 75 Lacs and Above)

CORPORATION BANK

(Floating Rate)

For all Tenors
[Max. 30 Years]: Up to Rs.50 lakh (BR (10.25%)), Above Rs.50 lakh {BR+0.25% (10.50%)}

(Fixed Rate)
For all Tenors
[Max. 20 Years]: Upto Rs.25 lakh (13.10%), Above Rs.25 lakh (13.60%)

AXIS BANK

(Floating Rate)

Less than Rs. 25 Lac: 10.75% p.a. (Effective Rate Of Interest)

Loans greater than Rs.25 lac - Rs. 75 lac: 11.00% p.a.(Effective Rate Of Interest)

Loans greater than Rs. 75 lac: 11.25% p.a (Effective Rate Of Interest)

Top Up - All loans, Renovations: 12.00% p.a.(Effective Rate Of Interest)

Fixed Rate

11.75% p.a.(Effective Rate Of Interest)

ICICI Bank

(Floating rate)

HL <= Rs. 3.0 million: 10.15% (Effective Rate of Interest)

HL > Rs. 3.0 million: 10.40% to 11.00% (Effective Rate of Interest)

(Fixed Rate)

One year & Two year (s) fixed rate:

HL <= Rs. 3.0 million: 10.15% (Fixed rate for first 12/24 months), I-Base + 0.40% (Floating rate pricing from second & third year onwards (from 13th/25th month)

HL > Rs. 3.0 million and <= Rs. 30 million: 10.40% (Fixed rate for first 12/24 months), I-Base + 0.65% (Floating rate pricing from second & third year onwards (from 13th/25th month)

HL <= Rs. 3.0 million: 10.50% (Fixed rate for first 36 months), I-Base + 0.40% (Floating rate pricing from fourth year onwards (from 37th month)

HL > Rs. 3.0 million and <= Rs. 30 million: 10.75% (Fixed rate for first 36 months), I-Base + 0.65% (Floating rate pricing from fourth year onwards (from 37th month)

Courtsey: Bank Websites, Rates may vary from time to time

Source: zeenews

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Yes Bank family feud deepens: Corporate rivalry involved?

The Yes Bank battle seems to intensify. Its promoter Rana Kapoor wrote to the Reserve Bank of India (RBI) in 2012 to seek declassification of Madhu Kapur, the wife of late Ashok Kapur, as a promoter.


Yes Bank management sources said the bank thinks that the feud over a position on the board of Yes Bank could be part of a larger corporate battle. Sources are maintaining that a decision would be taken in this regard over the next one week because all eyes will be on July 15, when the Bombay High Court once again hears the petition of Madhu Kapur, report CNBC-TV18’s Gopika Gopakumar and Ronojoy Banerjee. ( Read More )

RBI says that Rana Kapoor's request for declassifying Madhu Kapur as a promoter is contradictory to the banks shareholding structure and the article of association. The request of Rana Kapoor to declassify Madhu Kapur as the promoter was part of the dilution plan under which Rana Kapoor will have to give a time period for bringing down his stake to 10 percent.

The reason, he says for declassification is because Madhu Kapur currently does not hold any board level or management level position. This request is contradictory on two fronts - it contradicts the shareholding structure as is given in the annual report of Yes Bank, which says that Rana Kapoor and the promoter group together hold 25 percent. This 25 percent is including Madhu Kapur's 12 percent stake and Rana Kapoor's 13.7 percent stake.

The request also contradicts article of association which defines Ashok Kapur as a promoter or Indian partner which includes his successors, his family members and the assignee. So, this request or RBI's view could have ramifications, it could strengthen Madhu Kapur's case when it comes to the legal battle as the court could take cognizance of the regulators view or it could force Madhu Kapur to bring down her stake from the current 12 percent to 5 percent because RBI has declassified her as a promoter.

Either way, RBI has not formally communicated their view to Yes Bank because the matter is subjudice but RBI is concerned because the legal battle for ownership may risk Yes Bank’s reputation. According to Yes Bank sources, the management is clearly veering towards the view that there could be a corporate involvement, a third party involvement as far as this matter is concerned. They do not even rule out that perhaps this whole thing was instigated at the behest of one or two corporate houses.

In order to bring the regulators on this issue, Yes Bank management is considering two options right now. One is to approach the RBI, apprise the central bank of this supposed corporate hand behind this whole board level tussle. Apart from that, the management is also considering moving competition commission of India (CCI), according to a senior Yes Bank executive. He also added that it is a fit case for CCI because in this matter there appears that a competitor is using unfair means to fight competition.

Source: MoneyControl

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Reduction in base rate, a relief to students seeking overseas education

After witnessing a weakening rupee inflate their overseas education budget in the last three months, students aspiring to study abroad finally have some news to cheer.

Public sector banks - Bank of India, Central Bank of India and Union Bank of India - slashed their base rates by 25 basis points to 10% last week, resulting in reduced interest burden for students and their parents. Canara Bank, which also slashed its rate, is offering the lowest rate of 9.95%.

Since education loans are linked to base rate, students aspiring to take education loans, will benefit with banks lowering rates. Other PSU banks are also expected to lower rates, bank officials said.

The reduction in base rate will not only help new applicants for loan but existing students who have borrowed will also benefit with the reduction in rate.

However, among government owned banks, State Bank of India has said that it is unlikely to reduce rates immediately as has pegged its base rate at the lowest - 9.70% - among its peer banks.

Students, seeking education overseas, are concerned about the sharp depreciation in the rupee, particularly because this increases their quantum of education loan. Rupee closed 59.60 after it touched an all time low of 61.21 few days ago. Rupee has fallen 12% since May.

Source: EconomicTimes

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Karur Vysya makes remittance easier

Karur Vysya Bank has implemented Bahwan CyberTek’s Cuecent eRemit, a remittance solution. This is to offer instantaneous remittance service to the bank’s customers. The remittance solution helped the bank launch an instant cross-border remittances service for non-resident Indians. This offers the remitter the facility to instantly credit funds into the beneficiary’s account in any bank in India. Both the beneficiary and remitter receive free mobile and email alerts instantaneously on receipt of money, says a company press release.

Source: thehindubusinessline

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South Indian Bank Q1 profit at Rs 115 cr

Thrissur-based South Indian Bank, which has a network of 753 branches across the country, has registered a net profit of Rs 115 crore in the first quarter of the current fiscal.

The bank carried out total business of Rs 75,123 crore against Rs 64,502 crore in the corresponding period last year, a statement from the bank said. Its net profit is down by 6.66 per cent compared with the first quarter of last year.

The deposits grew to Rs 43,584 crore from last year’s Rs 37,153 crore, while advances rose to Rs 31,539 crore from Rs 27,349 crore. The bank’s net non-performing assets have increased from 0.35 per cent to 1.12 per cent. South Indian Bank’s Managing Director and Chief Executive Officer, V.A. Joseph, said the performance of the bank was despite the ‘subdued growth of the economy’ during the period.

Source: thehindubusinessline

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IDBI offers inflation-indexed bonds to retail investors

IDBI Bank has modified its online investment portal ‘Samriddhi’ to enable retail investors and high net-worth (HNI) individuals to invest in inflation-indexed bonds (IIBs).

The Government introduced such bonds in June to offer investors an alternative to investing in physical assets, such as gold and real estate.

The bonds seek to provide inflation protection to both principal and interest payments.
Market maker

To ensure liquidity, IDBI Bank will play the role of a market-maker, providing bid-ask quotes for the bonds.

To encourage investment in these instruments, the bank will not charge any brokerage. An investor can buy and sell bonds worth Rs 10,000 (minimum face value) and in multiples of Rs 10,000 thereafter, subject to a maximum of Rs 25 lakh per deal. All that an investor needs to have to transact in IIBs through the portal is a bank account (with any bank), demat account and an Internet connection on a desktop, laptop or mobile phone.

At the launch event, H.R. Khan, Deputy Governor, Reserve Bank of India, said: “From the issuer (the Government’s) point of view, the inflation-indexed bond brings in a diversified investor base. Obviously, we have been liberalising the opening of our debt market to foreign investors. But predominantly it remains a domestic investor-driven market which, in a sense, provides resilience and strength to the market.”

According to Khan, it makes eminent sense to get into government securities (G-Secs) from the investor point of view as well.

World-over, institutional investors play a predominant role in the G-Secs market. But there are situations, countries and products, where individual retail investors and HNIs, apart from mid-segment investors, such as provident funds, trusts and corporates, also have an interest in IIBs.

Risk-free return

The interest in such bonds stems from risk-free returns (of course, it may not be so in all countries but at least India offers risk-free returns). Over a long duration, this investment provides a decent return, capital is protected and there is reasonable liquidity, said Khan.

M.S. Raghavan, Chairman and Managing Director, IDBI Bank, said the vending of IIBs through the portal will generate retail interest in inflation-indexed bonds.

Besides IIBs, investors can buy/ sell G-Secs and certificates of deposit (only of IDBI Bank) through the portal.

Source: thehindubusinessline

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Srei Infra hopes to roll out ATMs on trial basis by Dec

Srei Infrastructure Finance Ltd hopes to get the final nod from Reserve Bank of India for setting up its white-label ATMs in the country shortly.

White label ATMs are owned and operated by non-bank entities and, hence, do not carry the label of any particular bank. These ATMs can be accessed by the card-holders of all the banks and the operator is allowed to charge customers as per bank charges. Currently, customers are allowed up to five withdrawals free of charge from other bank ATMs; however, beyond five transactions, banks levy Rs 15 for cash withdrawal and Rs 5 for balance enquiry.

Srei had received in-principal approvals from the apex bank for setting up such ATMs in December 2012. As a pre-requisite to getting the final nod, Srei had to receive clearance from the Foreign Investment Promotion Board (FIPB) as the company has foreign investments. The RBI had, in June 2012, permitted non-bank entities with net worth over Rs 100 crore to own and operate ATMs, particularly in Tier III-VI towns.

“We got the FIPB clearance last week. We hope to get the final nod soon,” Hemant Kanoria, Chairman and Managing Director, Srei, told Business Line.

Srei proposes to set up 1,000 white-label ATMs in first year, 2,000 in the second and 6,000 in the third year of its operation. These ATMs will have the “Srei” brand. Tata Communications Payment Solutions Ltd, a wholly-owned subsidiary of Tata Communications Ltd, has already rolled out its white label ATM under brand “Indicash”; Muthoot Finance has received in-principle approval to set up such ATMs.

PILOT PLAN

Meanwhile, Srei plans to roll out 100 white-label ATMs on a pilot basis at an estimated cost of over Rs 5 crore by December 2013. The commercial rollout of these ATMs are likely to happen by the end of this fiscal on receiving the final nod from RBI, Kanoria said.

“Based on the success of our pilot project, we will go for commercial rollout,” he said.

The company plans to leverage on the strength of its common service centres — Srei Sahaj — for setting up the ATMs in rural areas. Srei, which is primarily into infrastructure and equipment financing, is one of the 26 applicants for new bank licence.

abhishek.l@thehindu.co.in

shobha.roy@thehindu.co.in

Source: thehindubusinessline

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PNB's KR Kamath leads bank chiefs’ clamour for a cut in policy rate

Punjab National Bank ( PNB) chairman KR Kamath led chief executives' call for a reduction in cash reserve requirement if the central bank is serious about lowering borrowing costs in the system, but voices seeking interest rate cut were feeble.

Demand for a cut in the repo rate, the rate at which the central bank lends to banks, which has been a constant for nearly two years, is fast vanishing from the thoughts of the industry as the currency slide makes it meaningless. There are fears that a sustained fall in the value of the currency could force the central bank to reverse its stance and raise borrowing costs.

"We asked RBI to give relief on CRR and repo rate, and also asked RBI to pay interest on CRR," Kamath told reporters after the customary pre-monetary policy meeting with central bank officials. "We also asked RBI to relax provisioning norms on restructured assets." Quarterly monetary policy is scheduled to be released on July 30.

The near 12% slide of the Indian rupee since May is threatening to fan inflation in the form of higher diesel and coal prices. Inflation as measured by the WPI which fell below 5% may begin to climb again throwing a spanner in the works. Industry, government and investors have been lobbying for interest rate cuts to reverse the slump in economic growth.

The repo rate is at 7.25% and the CRR, the proportion of deposits to be kept at the RBI, is at 4%. "If the rupee remains at its current levels (rupee averages .`58 per US$), average WPI inflation for 2013-14 would be closer to 6% rather than our baseline forecast of 5.3%," forecasts Crisil, a rating company.

With little clarity on the way the Federal Reserve may go, governor Duvvuri Subbarao could opt to pause on July 30. "While slowing growth does call for a rate cut, a sharp rupee depreciation of 12% against the dollar since April 13 and rising capital outflows of $8.8 billion since May 22, would likely restrict rate cuts in the near term, especially till the Fed's Sep 17 meeting," Religare Capital said in a note.

Abank chief who did not want to be quoted said that bankers conveyed to RBI that a cut in CRR will send a positive signal to corporates that interest rates are moving southward and it will also enable them to lower lending rates.

Last week, a few banks like Bank of India, Union Bank of India and Canara Bank cut lending rates due to pressure from finance ministry. During the meeting with RBI, banks indicated that a cut in CRR will result in a further reduction in lending rate.

In the past, SBI chief Pratip Chaudhuri has categorically said that the bank will be in a position to lower rate only if RBI cuts CRR. SBI has pegged its base rate — the floor rate at which it lends — stands at 9.70%.

During the meeting, bankers also told RBI that considers a reduction in provisioning norms for restructured loans. As per the revised guidelines banks have to make a provision of 5% for new restructured loans and 3.50% on all the old restructured loans from March 2014.

Bankers told senior RBI officials that these provisioning requirements are very steep given that the economy is facing a slowdown. Restructured loans constitute 5-6% of banks' loan book.

Source: EconomicTimes

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Bankers demand CRR cut or interest on it from RBI

In run-up to the first quarter monetary policy announcement by RBI on July 30, bankers on Thursday strongly  pitched for a reduction in the cash reserve ratio (CRR) as they feel a cut in the short-term lending rate looks unlikely given the rupee volatility.

"We have requested the central bank to cut CRR as we don't think a repo rate cut is possible given the shape of the rupee. We have also told them if the CRR cannot be reduced at least we should be paid interest on our deposits with the RBI, as that can also enable us to bring down our lending rate," Punjab National Bank  chairman KR Kamath told reporters at RBI headquarters in Mumbai.

Kamath, also chairman of Indian Banks Association, was talking to the media after the customary pre-policy meeting  with the RBI brass. RBI governor D Subbarao was not present in the meet as he was in Indore.

State Bank of India managing director and chief financial officer Diwakar Gupta said bankers also discussed the muted credit and deposit growth as well as the rising bad loans in the system. "We also discussed the impact of the rupee  fall on the asset quality of banks," said Gupta, who is retiring from the bank by July-end.

The bankers demanded the RBI reduce the tenure of FCNR /NRE deposits in the light of depleting forex reserves and the flight of capital due to FII selling in the debt and equities. Such a reduction can help stem the volatility in the  rupee as it will possibly increase the remittance inflows, said Bank of Baroda  chairman and managing director SS Mundra.

"We have sought a relaxation in the provisioning norms for restructured assets in the light of the stress in the economy due to the weakening of the rupee," he said. The rupee has depreciated by over 12 percent against the dollar  since the beginning of FY14.

It has slid heavily since May 20 after announcement by the US Federal Reserve that it  might pull back its liquidity-infusing bond repurchases as domestic employment situation and the economy has  improved.  The rupee hit a lifetime low of 61.21 to the dollar on Wednesday, forcing the RBI and capital markets regulator Sebi  to take steps to arrest the slide.

Source: moneycontrol.com

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Lenders ask central bank for interest on cash reserve ratio

In a marked departure from the usual vociferous demand for a policy rate cut and a lower cash reserve ratio (CRR), the country’s top bankers shied away from making such demands, given the comfortable overall liquidity and their own inability to pass on any rate cut by the Reserve Bank of India to borrowers.

In their customary pre-policy meeting with the central bank brass, the bankers discussed the state of the banking system and the relief that the RBI can be expected to give banks to improve their profitability.

Bankers said they had asked the RBI to give them interest on cash reserve ratios held by it. CRR is the slice of deposits banks must mandatorily park with the RBI; the current CRR rate is 4 per cent. CRR does not earn any interest for the banks.

Sluggish growth

Last year, the CRR was a point of hot debate in banking circles, with State Bank of India Chairman Pratip Chaudhuri saying mandating such a ratio is “anathema” to the system and must be abolished.

On why the bankers did not ask for a CRR cut and/or a repo rate cut, Punjab National Bank Chairman K.R. Kamath said: “Unless the deposit rate comes down, we may not be in a position to transmit whatever cut the RBI is announcing.”

There is no possibility of the cost being brought down because deposit growth is sluggish, said Kamath, who is also the Chairman of the Indian Banks’ Association.

“Bankers themselves believe that liquidity is really comfortable, so the case for a CRR cut does not really exist. Any cut in the CRR will just add to the banks’ profitability,” said Diwakar Gupta, Chief Financial Officer, State Bank of India.

REVISIT PROVISIONING

In the face of slowdown in the economy and rising demand from corporate borrowers to re-structure their loans, bankers requested the RBI to re-visit the provisioning requirements on restructured accounts.

The RBI increased the provision on restructured standard accounts to 2.75 per cent from 2 per cent in November to recognise the inherent risks in restructured standard assets. Further, the provisioning has been increased to 5 per cent in respect of new restructured accounts with effect from June 1, 2013.

In the case of the existing stock of restructured standard accounts (as on March-end 2013) the provisioning will be increased in a phased manner: 3.50 per cent with effect from March 31, 2014; 4.25 per cent with effect from March 31, 2015; and 5 per cent from March 31, 2016.

satyanarayan.iyer@thehindu.co.in

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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New product norms will not affect life insurers’ growth this fiscal, says IRDA chief

The regulatory requirement of the life insurance industry to re-file all existing products will not impact its growth this fiscal, said Insurance Regulatory and Development Authority Chairman T. S. Vijayan.

According to IRDA norms, insurance companies have to re-file all their existing group and individual products by October. “It (re-filing of life insurance products) is an ongoing process. There is not a single company which has not got a product approved… The whole process is going on seamlessly,” said Vijayan.

On distribution of insurance products through banks (bancassurance), Vijayan said the regulator is considering the proposal to allow banks to sell products of more than one insurance company. Currently, a bank is allowed to sell products of only one life, one non-life, and a standalone health insurance company.

However, to improve insurance coverage, the Finance Minister in the Union Budget had announced that banks can be allowed to act as brokers, selling policies of multiple insurance companies.

The Life Insurance Council, an industry body, has recommended that a bank tie up with at least five insurers with not more than 25 per cent share per insurer.

“Banks have a huge branch network and they should be representing the customer rather than the insurance company. We are having a series of discussions and committee meetings on how best to utilise bank branches to improve insurance penetration,” said Vijayan.

The regulator also said it is considering increasing the debt investment limit of the country’s largest insurer, Life Insurance Corporation . “There is a demand from LIC that it wants a higher limit in debt and we are examining it very closely,” said R. K. Nair, Member Finance and Investments, IRDA.

deepa.nair@thehindu.co.in

Source: thehindubusinessline

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Bank of India to hire 4,500 this year: CMD

Bank of India plans to recruit about 4,500 personnel both in the officer and clerical cadres in the current year, said Vijayalakshmi R. Iyer, the bank’s Chairperson and Managing Director.

Commenting on non-receipt of call letters by thousands of aspirants who had cleared the bank exams and the interview, she said “there has been a slight delay in the process. They will be getting the letters in due course.”

She said the banks indicate to the Institute of Banking Personnel Selection (IBPS), which is entrusted with the task of selection, the number of officers they need. The question of sending call letter may only be “a small aberration… and I don’t see any other reason for it.”

On reports of many candidates who take up bank jobs only to quit in a short time, Vijayalakshmi Iyer said banks normally recruit about 30 per cent more staff than required to meet such contingencies.

It was possible that the selected candidates might not join a particular bank for some reason. But since they had gone through the entire selection process, it may not be that they did not prefer a banking career.
STAFF Training

M. V. Nair, former CMD of Union Bank of India, said a study by the Khandelwal Committee, of which he was a member, showed that public sector banks alone would need about 700,000 new recruits by 2020 in view of the large number of bank staff retiring and the expansion the sector is witnessing because of financial inclusion. And, training the personnel will, therefore, be a mammoth task.

Nair, who is the Chairman of Banker's Quotient Academy, said he intended to work with “quite a few banks” to initially train some 1,000 bankers at a time in the academy which is coming up on the outskirts of Coimbatore.

He said the academy will be training the staff of Bank of India, Central Bank of India and Corporation Bank and is in talks with three more banks. With regard to private sector banks, he said discussions were on with “two large private sector banks” to customise programmes for them.

yegya.narayanan@thehindu.co.in

Source: thehindubusinessline

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SIDBI to fund banks for lending to small units

Getting a loan from a bank or a non-banking finance company may no longer be an uphill task for micro enterprises.

Reason: The Small Industries Development Bank of India (SIDBI) is planning to give liquidity support to financial intermediaries to encourage them to give loans to micro enterprises.

Towards this end, SIDBI has tied up with German development bank KfW for a line of credit aggregating €100 million (about Rs 780 crore).

Micro enterprises typically have loan requirements ranging from Rs 50,000 to Rs 10 lakh.

‘Missing middle’

According to SIDBI Chairman and Managing Director Sushil Muhnot, the KfW line of credit is ‘for financing the missing middle’.

“Loans up to Rs 50,000 are covered under microfinance. Banks normally do not lend below Rs 10 lakh because it does not work out to be economical for them. So, for loans between Rs 50,000 and up to Rs 10 lakh there is nobody (lender) as such,” he said.

Given that liquidity support will be available from SIDBI to commercial banks, regional rural banks, urban co-operative banks and non-banking finance companies, it is expected that they will step up lending to micro enterprises.

Last week, SIDBI signed an agreement with KfW for the nine-year credit line at a fixed rate of 1.67 per cent.

After adding the 1.20 per cent charge that SIDBI has to pay towards government guarantee on the borrowing and the forward cover on the loan, the overall cost of borrowing comes to around 8.50 per cent.

Muhnot said “We will draw the funds over a period of time. We will draw more when the forward cover rates come down so that we get the benefit of lower cost. We have kept the funding line in place so that as and when the rupee stabilises we get a better rate.”

SIDBI will make the funds available to banks and non-banking financial companies at about 10.5 per cent. These financial intermediaries, in turn, can lend to micro enterprises at normal market rates.

Makes biz sense

The SIDBI chief emphasised that for banks it makes eminent commercial sense to finance the micro, small and medium enterprise (MSME) sector.

In the backdrop of the regulatory pre-emption in the form of investment in government securities and deployment of cash with the Reserve Bank of India; mandatory lending to the agriculture segment (at below base rate); the rush to push home loans (almost at the base rate), and large corporates playing banks against each other to get loans at cheaper rates, lending to MSME will fetch better returns.

Muhnot observed that as all banks have public shareholding, they are under the gaze of analysts, who want to know about margins and growth outlook.

“So, if you have to show growth then you have to seriously look at the MSME sector,” he said.

ramkumar.k@thehindu.co.in

satyanaraynan.iyer@thehindu.co.in

Source: thehindubusinessline

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Interest income lifts IndusInd Bank Q1 net 42%

IndusInd Bank reported a 42 per cent jump in net profit to Rs 335 crore in the first quarter ending June 2013, thanks to robust growth in interest income and drop in bad loans.

The private sector lender had posted a net profit of Rs 236 crore in the same quarter last fiscal.

Net interest income (difference between interest earned and expended) soared 40 per cent to Rs 679 crore. Other income rose 48 per cent on the back of increase in fee and treasury incomes.

Net non-performing assets (NPAs) declined to 0.21 per cent from 0.27 per cent in Q1 FY13. However, gross NPAs in the quarter increased to 1.06 per cent from 0.97 per cent.

For the first time, the bank also set aside floating provisions of Rs 50 crore. This improved the bank’s provision-coverage ratio to 80 per cent from 70 per cent.

As on June 30, 2013, advances grew 27 per cent year-on-year, while deposits were up 23 per cent. “The outlook still doesn’t seem encouraging as there are no new lending pools. There are no drivers for credit growth and it will remain subdued in the quarter ahead,” said Romesh Sobti, Managing Director and CEO, IndusInd Bank.

Also, with cost of deposits coming down, Sobti said the bank will follow other banks and cut its base rate soon.

The bank plans to grow its branch network to 650 by fiscal year end from 530 at present.

The IndusInd Bank share fell by 1.25 per cent to close at Rs 495.70 on the Bombay Stock Exchange on Wednesday.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Canara Bank buys 10% stake in Brickwork Ratings

Canara Bank has acquired 10 per cent stake in Brickwork Ratings, Bangalore.

Canara Bank and Brickwork have signed the share subscription agreement today. The stake buy enable the entities to collaborate in various activities related to banking and credit rating.

Canara Bank and Brickwork will take up joint activities in risk management, training, research, financial inclusion, credit rating models, events, and conferences.

anil.u@thehindu.co.in

Source: thehindubusinessline

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Axis Bank ties up with Experian for debt management

Axis Bank, India’s third largest private sector bank tied up with information services firm Experian to enhance its debt management and collections activities.

“Axis Bank will use Experian's Tallyman software to efficiently manage customers in arrears, reduce the cost of collecting debt and increase working capital by reducing debt write-offs,” Experian said in a statement.

Tallyman is a key component of Experian's Debt Collection and Recovery suite and the software automates the collections process across the complete lifecycle - from managing high-risk pre-delinquent customers through to debt recovery. The software also segments arrears portfolios into highly specific customer types to enable collections departments to assign the appropriate collections activities sensitive to each individual case, it said.

Jairam Sridharan, Head of Consumer Lending & Payments, Axis Bank, said: "Through Tallyman, we will be able to minimise collections costs, while delivering the best possible customer service. Furthermore, it will significantly reduce our implementation time and dependency on IT resources which can be dedicated to improving other core banking systems."

Vikram Narayan, Chief Executive Officer& Country Manager, Experian India, said: "Tackling bad debt in an efficient and effective way is a real problem for many organisations. Our work with Axis Bank will enable it to manage customers in arrears in a more proactive, targeted and sensitive way when collecting debts. The software's flexibility means that Axis Bank can rehabilitate customers back to active trading, identify and manage those showing signs of financial distress but also take the appropriate actions for those customers where the recovery of debt is a priority.”

Source: thehindubusinessline

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Oriental Bank cuts base rate by 25 bps

Oriental Bank of Commerce (OBC) has reduced its base rate by 25 basis points to 10 per cent from the existing level of 10.25 per cent.

The revised base rate will be applicable from July 22, S.L. Bansal, Chairman & Managing Director, OBC, told Business Line here.

OBC had last revised its base rate from 10.4 per cent to 10.25 per cent in February this year.

Public sector lenders have in the last few days started reducing their base rates in keeping with the Finance Minister P. Chidambaram's recent advice to reduce their minimum lending rates.

Base rate is the interest rate below which banks cannot lend.

Already, Canara Bank, Bank of India and Union Bank have reduced their base rates by 25-30 basis points.

Source: thehindubusinessline

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Bank recruits to receive call letters in due course: BoI chief

"While there may be a delay in candidates selected for appointments in PSU banks getting call letters, they will “get the call letters in due course”, according to Vijayalakshmi R. Iyer, Chairperson and Managing Director, Bank of India (BoI), Mumbai.

She said her bank itself has planned an intake of about 4,500 personnel during the current year, both officers and clerical staff.

Responding to a question during an interaction with the media here on Monday about the reported non-receipt of call letters by thousands of aspirants who had cleared the bank exams and interview, she said “I understand there has been a slight delay in the process. They will be getting the letters in due course.”

She said the banks indicate to the Institute of Banking Personnel Selection (IBPS), entrusted with the task of selection, the number of officers they need based on which selection is made. The question of sending call letters may only be “a small aberration” but it would be issued. “I don't see any other reason for it,” she said.

(According to reports, over 60,000 candidates who had qualified for appointment as officers and clerks in PSU banks have not got call letters and their selection might lapse if they failed to get postings before March 2014.)

Commenting on reports of many candidates who had taken up bank jobs but later left them in a short time, Vijayalakshmi Iyer said banks normally recruited about 30 per cent of excess staff than required to meet such contingencies. It was possible that selected candidates might not join a particular bank for some reason. But since they had gone through the entire selection process, it may not be that they did not prefer a banking career itself.

M.V. Nair, former CMD of Union Bank of India, said according to an estimate made by the Dr. Khandelwal Committee, of which he was a member, the public sector banks alone would need about 700,000 new recruits by 2020 in view of the large number of bank staff retiring and the expansion the sector was witnessing because of financial inclusion. This has created a huge need for training the personnel.

Nair, who is the Chairman of Banker's Quotient Academy, said he intended to work with “quite a few banks” by creating a capacity to train to begin with 1,000 bankers at a time in the academy which is coming up at the RVS Group of Institution’s premises at Sulur on the outskirts of Coimbatore. The duration of the training would be structured to meet the specific needs of the banks. If need be, the intake capacity would be enhanced next year.

He said the academy had brought on board Bank of India, Central Bank of India and Corporation Bank for training their staff and was in discussion with three more banks. With regard to the private sector banks, he said discussions were on to customise programmes for them with “two large private sector banks”.

But he would like to take up this responsibility after six months since the needs of the PSU banks were huge and he would prefer not to dilute the focus for at least six months. But involving the private sector banks in the programme was also definitely on the agenda.

Source: thehindubusinessline

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Rajeev Rishi appointed CMD, Central Bank of India

Central Bank of India has a new Chairman and Managing Director in Rajeev Rishi. Prior to this elevation, Rishi was an Executive Director at Indian Bank.

Rishi will assume charge on August 1. His appointment is for a period of five years.

Central Bank of India’s incumbent Chairman and Managing Director M.V. Tanksale is due to retire on July 31.

Rishi has served as Executive Director at Indian Bank since October 1, 2010.

Before joining Indian Bank, Rishi was General Manager at Oriental Bank of Commerce.

Srivats.kr@thehindu.co.in

Source: thehindubusinessline

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Karnataka Bank inks pact with Reliance Capital

Karnataka Bank Ltd has signed a memorandum of understanding (MoU) with Reliance Capital Ltd for financing the micro, small and medium enterprises (MSMEs) through a co-financing arrangement.

A bank press release said here on Tuesday that the bank will provide finance to the eligible MSMEs referred by Reliance Capital Ltd as per the norms.

The release said the bank has over 550 branches and Reliance Capital Ltd has over 230 million customers across India.

N. Upendra Prabhu, General Manager of Karnataka Bank Ltd, and K.V. Srinivasan, Chief Executive Officer of Reliance Commercial Finance, signed the MoU in Mangalore recently in the presence of bank CEO and MD, P. Jayarama Bhat.

Shares of both Karnataka Bank and Reliance Capital witnessed a strong trading volume on the NSE.

Karnataka Bank gained Rs 5.75 to trade at Rs 113.55 with a trading volume of 73.78 lakh shares. Reliance Capital was up by Rs 10.05 at Rs 380.20 with a trading volume of 61.28 lakh shares about 45 minutes before the trading was to close.

Vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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Public sector banks to recruit 50,000 officers, clerks

Here is good news for job aspirants. The recruitment process for over 50,000 officers and clerks in public sector banks is likely to kick off in about a month or two.

“We have requested banks to intimate us the vacancies to be filled for the next financial year. There may be confirmation by August/September. Then the process will begin,” A. S. Bhattacharya, Director, Institute of Banking Personnel Selection (IBPS), told Business Line.

“We hope to complete the process by March 2014,” he added. In the current financial year, over 53,000 officers and clerks were recruited by 20 public sector banks through the common written exam.

“I expect the number of vacancies to be in the similar range for the forthcoming recruitment phase,” the IBPS Chief said.

It may be recalled that Finance Minister P. Chidambaram said last week that about 50,000 banks vacancies would be filled soon.

This will be an advantage for those who cleared the probationary officers and clerical examinations conducted by the IBPS earlier and waiting for jobs.

As the validity of their qualification is up to March 2014, they stand to gain in the recruitment for the next financial year which is likely to be completed before the same deadline.

“It this happens, it will be a big relief for all of us who have got through the written test and interview of IBPS already,” Amarender, an aspiring probationary officer from Ongole in Andhra Pradesh, said.

Most of the aspirants complain that the allotment of candidates to banks by IBPS in the recent past was lower than the notified vacancies in a particular bank.

“The complaint is baseless. Allotment against all the vacancies projected by the banks for 2013-14 (category-wise — SC, ST, OBC, physically challenged, etc) has been made subject to availability of candidates,” Bhattacharya said.

The individual minimum criteria fixed by different banks might also render some candidates ineligible for some posts leading to lower allotment of candidates to a bank.

However, with the new bulk recruitment in the offing, most of the candidates waiting for call letters may land jobs, say experts.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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S. B. Mainak appointed LIC MD

The Centre has appointed S. B. Mainak, Executive Director, LIC, as Managing Director of the state-owned life insurance behemoth.

He will hold office from the date of assuming charge till February 29, 2016. Life Insurance Corporation (LIC) plans to invest nearly Rs 2.5 lakh crore in equities and bonds this fiscal.

Last fiscal, it had invested in aggregate close to Rs 2.25-lakh crore in bonds and equities. For the current fiscal, LIC expects a 15 per cent growth in first year premium income. This is against a contraction seen last fiscal.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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Syndicate Bank gets new CMD

Syndicate Bank has a new Chairman and Managing Director in Sudhir Kumar Jain. He will hold the post of Chairman and Managing Director for a period of five years from the date of his taking charge. Prior to this appointment, Jain was an Executive Director at Bank of Baroda.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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SBI launches State Bank Xpress Money Card

State Bank of India, in partnership with a non-banking finance company, UAE Exchange and Financial Services, has launched a card which will enable the holder to receive the remittance directly on the card.

The card — State Bank Xpress Money Card — can be loaded with up to Rs 50,000. A maximum of 30 remittances can be loaded during a calendar year.

The card can be used for cash withdrawals from any bank ATM, transactions at point of sale (PoS) and e-commerce transactions.

A depositor will have to visit the UAE Exchange and Financial Services branch to deposit the money. For now, the card will be available free-of-cost in Kerala. Subsequently, it will be rolled out across the country.

Prepaid cards are beneficial to customers as there is no need to open a bank account, State Bank of India said.

satyanarayan.iyer@thehindu.co.in

Source: thehindubusinessline

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YES Bank case: Madhu Kapur to challenge appointment of whole-time directors

Madhu Kapur, widow of YES Bank co-promoter Ashok Kapur, has opened another flank in her dispute with the private sector lender.

In her amendments to her original suit against the bank, Kapur has decided to challenge the June 27 decision of the board to appoint Rajat Monga, Sanjay Palve and Pralay Mondal as whole-time directors.

The position taken by Kapur in the amendment is that the bank’s Articles of Association require a recommendation by the “promoters” for appointment of the whole-time directors.

The amendment says that as ‘successors and the legal representatives of the late Ashok Kapur, Madhu Kapur family’s concurrence or recommendation for the appointment of the directors was not sought.’

Further, the amendment points out that two of the three directors who were elected in the AGM last month did not meet the age criteria of 35-65 years, as prescribed by the RBI circulars. The bank on July 1 had rejected the nomination of Shagun Gogia, daughter of Madhu Kapur, as an independent director on board.

The Kapur family holds 11.7 per cent stake in the company while, co-promoter Rana Kapoor, who is the current MD and CEO, holds 13.7 per cent.

The counsel of Madhu Kapur is likely to tender the amendments to the original suit on Thursday.

YES Bank opposed the amendments sought by Kapur and, hence, the Bombay High Court has directed Kapur to file the amendments as per the court procedures.

The next hearing is likely to be held on July 15.

The list of amendments sought to be made was submitted before the court on Monday. The bank’s lawyers have opposed certain amendments made by Kapur.

Kapur’s counsel has also asked the court to direct the bank to furnish a copy of the video recording of the 9th Annual General Meeting of the bank.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Union Bank cuts base rate by 25 bps to 10%

The Finance Minister’s recent ‘advise’ to banks to pare lending rates seems to be having the desired effect.

After Bank of India and Canara Bank cut their base rates last week, Union Bank of India followed suit on Monday, reducing its base rate from 10.25 per cent to 10 per cent.

Base rate is the minimum benchmark lending rate below which banks cannot lend.

Banks determine their actual lending rates on loans and advances with reference to the Base Rate and by including such other customer-specific charges as considered appropriate.

The public sector bank said the revised interest rate is effective from today. In view of the reduction in base rate, the interest rate on home loans and car loans stands reduced to 10 per cent per annum and 10.45 per cent per annum respectively.

Public sector banks are cutting their base rates as Finance Minister P. Chidambaram, at a meeting with top bankers on July 3, ‘advised’ them to do so.

The minister reasoned that “In my view, reduction of the base rate will be a powerful booster, will be a powerful stimulus to credit growth.”

In view of the ‘advise’, Bank of India announced a cut in its base rate from 10.25 per cent to 10 per cent on July 3 itself.

Canara Bank followed the next day with a 30 basis points reduction in base rate from 10.25 per cent to 9.95 per cent for all loans/advances, that is, agriculture, MSME sector, retail, export credit with effect from July 8. The public sector bank also cut deposit rates by up to 50 basis points.

State Bank of India, the country’s largest bank, has refrained from cutting its base rate. At 9.70 per cent, the bank’s base rate is already the lowest in the industry.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

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Karnataka Bank shareholders agree to raising more capital via QIP

Shareholders at the 89th annual general meeting of Karnataka Bank approved a special resolution to raise capital by way of QIP (qualified institutional placement).

The bank’s Chairman, Ananthakrishna, who placed this special resolution before the shareholders, said: “It is only an enabling resolution. We will not do anything that affects the interests of shareholders.”

The management may consider this only if market conditions improve and the move helps the bank to boost its capital. Because of this, existing shareholders shall also benefit, he said.

The resolution had stated that the aggregate amount to be raised through the QIP shall not exceed Rs 500 crore.

Referring to the recent decision of Reserve Bank of India to issue new licences for banking in India, one of the shareholders wanted to know how it would affect Karnataka Bank. In his reply Ananthakrishna said that the bank would take all steps to improve its competitive edge. “Our staff members will respond to the competition and work for growth,” he said.

Another shareholder raised the issue of non-performing assets (NPAs) and asked the bank to bring down this level further.

Terming NPA as an industry-level problem, the Chairman said the NPA of the banking industry stood at 3.12 per cent during 2012-13. However, Karnataka Bank brought down the net NPA level to 1.51 per cent during 2012-13. It was 2.11 per cent in the previous fiscal. The bank will work on reducing it further, he added.

To a query on the bank’s move to reduce interest rates, Ananthakrishna said the asset-liability committee of the bank would take a decision on this.

The shareholders also approved a resolution to declare a dividend of 40 per cent for 2012-13.

P. Jayarama Bhat, Managing Director of the bank, and other directors on the board were present at the meeting.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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M.S. Raghavan takes charge as IDBI Bank CMD

M.S. Raghavan has taken charge as the Chairman and Managing Director of IDBI Bank.

Prior to this, he was the Executive Director of Bank of India. Raghavan will be at the helm of IDBI Bank up to end-June 2015.

The top position at the bank was vacant since May-end due to superannuation of R.M. Malla. As at March 2013, IDBI Bank had deposits and advances amounting to Rs 2,27,116 crore and Rs 1,96,306 crore, respectively.

Source: thehindubusinessline

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New norms won’t impact insurance sector: Regulator

The norms for traditional life insurance products will not impact industry, according to T. S. Vijayan, Chairman of the Insurance Regulatory and Development Authority.

“Initially there were some apprehensions. But, we had many sessions with the industry and explained to them what it is, and about modalities of implementation,” he told newspersons here on Saturday. The norms will come into force from October 1 this year. The new norms have changed the product design by aligning charges of traditional products with those of the unit-linked plans and pension products, among others.

Higher insurance penetration in the developed countries was due to the right use of local elements in business. “The old players in the industry could understand this and focussed more customer satisfaction than topline growth, he said.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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ICICI Bank trains women staff in self-defence, ensures safe travel

Security for working women remains a concern in most cities across the country. Taking serious note of this, the country’s largest private sector lender, ICICI Bank, has initiated additional assistance and support to its women employees after working hours.

Last month, ICICI Bank implemented some measures for women by setting up a team to conduct self-defence training, monitoring their travel after working late and organising quick-reaction mobile vans to handle emergency situations.

Women constitute about 25-30 per cent of the bank’s workforce. At present, ICICI Bank has 17,000 women employees, including probationary officers.

According to T. K. Srirang, Senior General Manager, Head - Human Resources, ICICI Bank, in the wake of rising crime, it is important to ensure a conducive workplace and safe atmosphere to employees .

The team will focus on three-hour long modules emphasising practical self-defence training and ways to tackle or avoid adverse situation and to create awareness on the legal rights of a woman.

The bank plans to conduct 200 such modules this year.

“This programme was launched last month. It’s about how a woman should respond in an emergency situation or approach a police station and be mentally prepared with basic self-defence in case of an emergency. We have a quick response team that we have launched in Mumbai and Delhi where two mobile vans will be located in each city,” Srirang said.

The mobile van is equipped with two personnel and a driver with basic equipment and a first aid kit. The personnel are ex-servicemen and medical professionals who are also trained to mobilise law and order support. Further, the bank’s control room takes charge and can rush for help immediately on receiving a missed call or SMS in case a woman gets into an uncomfortable situation while engaging with the bank’s clients. Women comprise 35 per cent and 25 per cent of the ICICI Bank’s employees in Mumbai and Delhi respectively.

“All supervisors are required to provide the women employees with a transport or cab facility if the working hours stretch beyond 9 p.m. We also reinforce that a male colleague or managers should accompany the female employee,” he added.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Online crop insurance service from United India

United India Insurance, in association with Agriculture Insurance Co of India, has launched an Internet service to cater to the crop insurance needs of farmers in remote areas.

Milind Kharat, Chairman and Managing Director of United India, and P. J. Joseph, Chairman of Agriculture Insurance Company of India Ltd, formally launched the Web portal recently.

According to a press release from United India, most of the farmers have no easy access to the offices of insurance companies.

This portal would facilitate insurance agents offer farmers services such as transfer of data on real-time basis and faster settlement of claims.

The farmers will be given an identification number that can be used for further renewals.

United India is marketing two schemes — weather-based crop insurance and modified national agriculture insurance — in designated districts of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka.

ravikumar.r@thehindu.co.in

Source: thehindubusinessline

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United India in talks with LIC to offer combo product

State-owned United India Insurance Co Ltd is in talks with Life Insurance Corporation of India to offer a combo product of life and general insurance, according to Milind Kharat, Chairman-cum-Managing Director of UIIC.

The company also plans to enter the the SAARC and the Gulf markets for general insurance during the course of this year, he added.

Speaking to newsmen in Coimbatore late on Saturday, he said in the last fiscal, the company made a gross premium income of about Rs 9,260 crore, which was a 13 per cent growth. It also made a profit after tax of Rs 527 crore during 2012-13. During the current year, the company has targeted a premium income of Rs 10,500 crore.

Conceding that the growth in premium income during the last financial year was less than that in the previous fiscal which was about 28 per cent, he attributed it to the economic slowdown witnessed in the country and the decline in automobile sales. The company has planned to open 531 micro offices across the country in tier IV towns and also has planned to bolster the sales force by adding about 15,000 new agents to promote its products which he felt would help UIIC to achieve its growth plans despite economy under stress with automobile sales continuing to decline.

Asked whether UIIC was planning to enter the life insurance space, the company’s Chairman & Managing Director said it did not have any such plans. But it was in

discussions with LIC to develop and sell a combo product that would have both life and general insurance components. He said he was not aware of any other insurance company offering such a combo product either within India or abroad.

Asked about the status of plans to list UIIC by floating an IPO which has been on the air for sometime, he said this was an issue to be decided by the Central Government and he would not like to comment on it.

On UIIC's plans to promote its business, he said the agency business was growing and the company also recognised the potential of online business as people are becoming tech- savvy and has taken steps to give a thrust to online sale of general insurance products.

Kharat, commenting on overseas foray, said UIIC was eyeing the SAARC countries and the West Asian markets. It was looking at the local regulations and once the plans were finalised it would seek IRDA's approval. At present, UIIC was intending to go it alone though it was not averse to joining hands with any other insurance player and initially it planned to open one office each in SAARC region and in West Asia this year.

On the hit taken by the insurance companies in Uttarakhand due to floods, he said it was estimated that the non-life insurance claims might be in the order of about Rs 3,000 crore and United India itself has received about 37 claims involving a total amount of about Rs 500 crore. This was mainly from hydro electric power projects that took a major hit due to the floods. He said the company would take steps to settle the claims expeditiously. The surveyors were not able to approach the damaged areas and he said the claim ratio may go up later.

Source: thehindubusinessline

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Battle against bulk deposits continues: Vijaya Bank CMD

Upendra Kamath, as Chairman and Managing Director, has steered Vijaya Bank through a difficult two years. During this period, he focussed mainly on rebalancing the portfolio — both on the assets and liabilities sides. Vijaya Bank was excessively reliant on bulk business — whether on the corporate lending side or on deposits.

The need to change the mindset of officials to focus more on the retail side consumed much of his energy during his first year in this office. Kamath has achieved considerable success in bringing the important financial parameter within a safe range, although he says this is a continuing battle and makes clear that it is not yet won.

He spoke to Business Line on these and other banking issues at his office in Bangalore. Excerpts:

Why have you not cut your interest rates although the RBI has cut its repo rate thrice over the last year?

When the RBI cuts its repo rate (the rate at which banks borrow from RBI against the pledge of surplus government securities), it affects us very little. The portion of such borrowings in my total borrowings is abysmally small.

Almost 95 per cent of my resources are from deposits. If the RBI tweaks the repo rate, there is hardly any cost implication, because my costs are not going to go down dramatically. I don’t think you can expect banks to react in a manner similar to the RBI.

Repo rate cut is a signal from the RBI, and banks should look into it and explore possibilities of transmission. But the base rate decision is a function of cost. If cost undergoes a change, yes, there is a case for transmission.

Also, if the consumer price index is 9.31 per cent and if I quote 9 per cent rate for deposits, are the savers getting anything? Can I still mobilise resources?

We have seen how people were diverting their income to gold and real estate. That is why our deposit growth has lagged behind.

My ability to cut rates is limited. We have to give savers a positive real interest rate that is between 100 and 200 basis points higher than the inflation rate to persuade them to keep money in the bank.

Any unilateral cut will lead to loss of income for the bank, and, in the current scenario, where profits are under pressure, one needs to take a call on whether we can afford to do this.

Has the non-performing assets problem peaked?

The velocity with which they went up has come down now. This is reflected in the numbers coming down a bit for the industry as a whole. But is the worst behind us? The answer is, no. As long as the economy is not doing well, there is always the risk of delinquencies coming up to the surface with a lag. We need to be cautious.

The third and fourth quarters of last fiscal were better than the first two quarters. We brought down our gross NPA from 2.95 per cent to 2.17 per cent and net NPA from 1.7 per cent to 1.3 per cent. We also did some substantial cash recoveries as well as prudential write-offs in the small-loan category.

How is credit growth likely to be this year?

I expect we will grow at around 18 per cent this fiscal. I have set a business target of Rs 2.10-lakh crore to be achieved by the fiscal year-end. We were at Rs 1.67-lakh crore in March 2013, so we plan to add Rs 43,000 crore of business during the year. It is difficult but not impossible.

Where will this growth come from?

All of us have pipeline sanctions that should provide us incremental business of 7-8 per cent. Projects that take 3-5 years for execution will draw down funds.

We have attempted to rebalance our credit portfolio and reduce reliance on corporate credit. We have focussed more on the retail, agriculture and MSME (micro, small and medium enterprise) segments.

So, over the last year, retail has grown 20 per cent, MSME at about 27 per cent, and agriculture advances, 31 per cent. These have become our main growth drivers.

Apart from these, we saw growth in road projects, renewable energy, engineering, auto components, NBFCs and real estate last year. This trend has continued so far in this year too.

Have you been able to bring down your bulk deposits component substantially?

We have been only partially successful. This is a bank that was over-reliant on bulk business. On the resources side, our bulk deposits were at 46 per cent when I took charge. I spent the first 6-9 months trying to change the mindset towards retail.

In the first year, I did not succeed. The level of bulk deposits went up a bit to 47 per cent. But last year, we took a decision to change this system. And because everybody was convinced, the level of involvement in this makeover was fairly high.

Our CASA (current account and savings accounts) grew at 11.5 per cent compared to a decline in growth in the previous fiscal. Our retail term deposits started growing well.

The cumulative result was that we brought our bulk deposit from 47 per cent to nearly 21 per cent of deposits. Even that is not enough. Banks should ideally have only 10 per cent in bulk deposits.

That is why I qualified myself by saying we have only partially succeeded. The battle is not yet over. It continues.

Source: thehindubusinessline

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