Corporation Bank to open 9 more SME loan centres this year

Corporation Bank will open nine more SME (small and medium enterprises) loan centres by the end of the current financial year.

Inaugurating an SME expo in Mangalore on Saturday, B.K. Srivastav, Executive Director, said the bank has 16 SME loan centers across the country. The intention is to take the total number to 25 by March 2014.

He said the bank is expecting not less than 30 per cent growth in the SME portfolio from these loan centers during the fiscal.

Speaking on the occasion, Suresh Bhat, Director of Science and Technology Entrepreneurs’ Park (STEP) of the National Institute of Technology Karnataka (NITK), said banks should meet the financial requirements of budding entrepreneurs.

Responding to this suggestion, Srivastav said Corporation Bank could enter into a tie-up with NITK-STEP to help entrepreneurs. If NITK-STEP mentors and supports the entrepreneurs, Corporation Bank could extend them financial assistance, he said.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

Read more »

Finance firms set to launch ATMs as demand spreads

Indian corporates have lined up plans to roll out ATMs, a year after the RBI gave its nod to non-banking companies to set up ATMs.

First off the block, Tata Communications Payment Solutions (TCPL), a wholly-owned subsidiary of Tata Communications, plans to set up 15,000 ATMs in India under the brand name, Indicash.

The company, after launching its initiatives in Maharashtra, has set its eyes on Karnataka.

“In the next three years, we will launch 1,000 ATMs in Karnataka, with a thrust on rural areas,” Sanjeev Patel, CEO, TCPL, told Business Line.

TCPL may be the first off the block but others are hot on their heels.

Muthoot Finance, engaged in the business of financing against the security of gold ornaments, wants to leverage its network of 3,853 branches to set up white-label ATMs - industry parlance for non-banking entities launching their branded ATMs, but using the RBI-mandated National Financial Switch network. Srei Infrastructure Finance has received in-principle approval from the apex bank to set up such ATMs.

Semi-urban, rural areas

The reason for companies wanting to get into this segment is largely due to the fact that despite banks setting up ATMs averaging a growth of 23-25 per cent, the deployment has been primarily in Tier-1 and Tier-2 cities, said a tech analyst. This leaves the semi-urban and rural areas without access to services, such as ATMs, he added.

However, for companies, such as TCPL, a successful roll-out of ATMs would give its parent, the Tata Group, an advantage to bag a banking licence, say industry watchers. In July, Tatas were among 26 Indian corporate houses which applied for banking licences. London-based RBR, a research and consulting firm, in a report said India’s ATM density is 74 per million people and 48 per $1 billion of GDP, way below other BRIC countries, which on an average, have 246 ATMs per million people.

venkatesh.ganesh@thehindu.co.in

Source: thehindubusinessline

Read more »

LIC Housing launches ‘Sanchay’

LIC Housing Finance Ltd has launched a public deposit scheme ‘Sanchay’ whereby it will offer the highest interest rate of 9.5 per cent on five-year deposits.

The term period for deposits ranges from one to five years with the minimum amount of deposit being Rs 10,000 and thereafter in multiples of Rs 1,000.

The rate of interest (for deposits up to Rs 5 crore) ranges from 8.75 per cent to 9.5 per cent for general public for a period ranging from one to five years.

For senior citizens, the company is offering additional 0.1 per cent for deposits up to Rs 50,000 and 0.25 per cent for deposits of Rs 51,000 and above.

In the cumulative scheme, the interest accumulated with half-yearly interest will be paid on maturity and in the non-cumulative scheme, the interest will be paid on a half-yearly basis i.e. 31st March and 30th September.

The housing finance company said that it will accept deposits from individuals, Hindu Undivided Families, Companies, Non-Resident Indians, Cooperative Societies and Association of persons.

LICHFL’s public deposit scheme has a ‘FAAA Stable’ rating from Crisil, the company said in a statement. As of June-end 2013, the company had a deposit portfolio of Rs 839 crore.

Source: thehindubusinessline

Read more »

IRDA issues norms for licensing banks as insurance brokers

Banks can now become licensed insurance brokers. The Insurance Regulatory and Development Authority has come up with regulations for licensing banks as insurance brokers.

This move is expected to open up distribution possibilities for non-bank promoted insurance companies that hitherto had no tie-ups with banks under the banassurance model.

Till date, banks were able to distribute insurance products only as a corporate agent (under a bancassurance model).

The existing regulations stipulated that each bank can distribute only one life insurance, one general insurance and health insurance company products.

With the latest move to allow banks to become insurance brokers, the scope for banks to sell multiple company products has become a reality.

But banks are not going to readily jump into the broker bandwagon as many already have floated their own insurance joint ventures. They would not like to go in for selling others’ products when they can sell their own joint venture company’s products.

However, some banks especially those in the private sector are likely to opt for becoming brokers in a big way, according to sources in the banking industry.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

Read more »

Ratnakar Bank to acquire RBS assets

Private sector lender Ratnakar bank will acquire Royal bank of Scotland’s (RBS) Business Banking, Credit Cards and Mortgage business in India.

The Kolhapur-based bank would also acquire over 1.2 lakh customers of RBS across the three business segments which form the part of the purchase deal. The RBS employees associated with these businesses are proposed to be absorbed by Ratnakar Bank.

The deal size was not disclosed by the bank.

The RBS assets sale was on the cards for the past few months with many banks in the race, including Yes Bank, IndusInd Bank and HSBC among others.

“We are glad we were not the one of the banks in the speculation and still have managed to purchase the RBS assets. The portfolios are of high quality and will give a strong platform over and above our existing business,” said a person familiar with the deal.

The business banking holds high transactional current account and forex franchise. Our mortgage business was 8-12 months old and this will add to the portfolio, the person added.

The transaction is expected to help the Bank create further capabilities in a very short span of time and enhance the current and savings account (CASA). RBS customers would also get access to the larger and expanding branch network along with broader banking capabilities of Ratnakar Bank.

This will also mark Ratnakar Bank’s entry into the credit card business.

Over the last three years the bank has been building scale with the entry of new CEO and Managing Director Vishwavir Ahuja and other top management changes.

The acquisition will be subject to approvals from Competition Commission of India (CCI).

Derek Nazareth, Head of Retail and Commercial Banking, RBS India said: “Over the next few weeks we will be writing to all of our clients who are affected, and working closely with Ratnakar Bank to ensure a seamless transition for our customers.”

PricewaterhouseCoopers were the advisors to Ratnakar Bank while Morgan Stanley and RBS M&IB Asia Pacific advised to RBS.

There is no impact on RBS’s Corporate and Institutional Business (Markets and International Banking) or its Private Banking businesses in India. RBS will continue to offer financing, risk management, wholesale and investment banking, cash, payments, trade finance and a comprehensive range of wealth management solutions to its clients.

Source: thehindubusinessline

Read more »

Muthoot Capital Q1 net rises 21%

Muthoot Capital Services Ltd has registered a 21.30-per cent growth in net profit at Rs 5.98 crore in the first quarter of the current financial year, compared with Rs 4.93 crore in the corresponding period last year.

Total income increased 56.83 per cent to Rs 34.77 crore (Rs 22.17 crore). Financial expenses increased to Rs 12.36 crore (Rs 7.19 crore), recording a rise of 71.91 per cent.

Non-financial expenses increased to Rs 13.32 crore (Rs 7.42 crore), a rise of 79.51 per cent. Profit before tax grew 20.24 per cent to Rs 9.09 crore (Rs 7.56 crore).

Total loan portfolio increased to Rs 508.68 crore (Rs 325.05 crore), recording a growth of 56.49 per cent. .

Thomas George Muthoot, Managing Director, Muthoot Capital Services, said loan disbursal has been consistent over the years and stands at Rs 508.68 crore. According to R. Manomohanan, CEO, the company is expanding its business by adding new products and manpower. The annual general meeting also approved a dividend of Rs 4 per equity share (40 per cent).

sajeevkumar.v@thehindu.co.in

Source: thehindubusinessline

Read more »

Muthoot Capital Q1 net rises 21%

Muthoot Capital Services Ltd has registered a 21.30-per cent growth in net profit at Rs 5.98 crore in the first quarter of the current financial year, compared with Rs 4.93 crore in the corresponding period last year.

Total income increased 56.83 per cent to Rs 34.77 crore (Rs 22.17 crore). Financial expenses increased to Rs 12.36 crore (Rs 7.19 crore), recording a rise of 71.91 per cent.

Non-financial expenses increased to Rs 13.32 crore (Rs 7.42 crore), a rise of 79.51 per cent. Profit before tax grew 20.24 per cent to Rs 9.09 crore (Rs 7.56 crore).

Total loan portfolio increased to Rs 508.68 crore (Rs 325.05 crore), recording a growth of 56.49 per cent. .

Thomas George Muthoot, Managing Director, Muthoot Capital Services, said loan disbursal has been consistent over the years and stands at Rs 508.68 crore. According to R. Manomohanan, CEO, the company is expanding its business by adding new products and manpower. The annual general meeting also approved a dividend of Rs 4 per equity share (40 per cent).

sajeevkumar.v@thehindu.co.in

Source: thehindubusinessline

Read more »

Corporation Bank expo for SMEs

Corporation Bank will conduct an SME (small and medium enterprises) expo in Mangalore on August 10.

A press release by the bank said here on Thursday that the expo is specially designed for the benefit of SMEs. Various stalls on SME products, retail products, deposits, etc. will be positioned at the expo. Added to this, various SME customers of the bank will also exhibit their products at the expo.

Corporation Bank has launched ‘Corp SME Monsoon Bonanza’ on SME credit schemes offered by the bank for a limited period till September 30, it said.

vinayak.aj@thehindu.co.in


Source: thehindubusinessline

Read more »

Muthoot Capital Q1 net rises 21%

Muthoot Capital Services Ltd has registered a 21.30-per cent growth in net profit at Rs 5.98 crore in the first quarter of the current financial year, compared with Rs 4.93 crore in the corresponding period last year.

Total income increased 56.83 per cent to Rs 34.77 crore (Rs 22.17 crore). Financial expenses increased to Rs 12.36 crore (Rs 7.19 crore), recording a rise of 71.91 per cent.

Non-financial expenses increased to Rs 13.32 crore (Rs 7.42 crore), a rise of 79.51 per cent. Profit before tax grew 20.24 per cent to Rs 9.09 crore (Rs 7.56 crore).

Total loan portfolio increased to Rs 508.68 crore (Rs 325.05 crore), recording a growth of 56.49 per cent. .

Thomas George Muthoot, Managing Director, Muthoot Capital Services, said loan disbursal has been consistent over the years and stands at Rs 508.68 crore. According to R. Manomohanan, CEO, the company is expanding its business by adding new products and manpower. The annual general meeting also approved a dividend of Rs 4 per equity share (40 per cent).

sajeevkumar.v@thehindu.co.in

Source: thehindubusinessline

Read more »

Muthoot Capital Q1 net rises 21%

Muthoot Capital Services Ltd has registered a 21.30-per cent growth in net profit at Rs 5.98 crore in the first quarter of the current financial year, compared with Rs 4.93 crore in the corresponding period last year.

Total income increased 56.83 per cent to Rs 34.77 crore (Rs 22.17 crore). Financial expenses increased to Rs 12.36 crore (Rs 7.19 crore), recording a rise of 71.91 per cent.

Non-financial expenses increased to Rs 13.32 crore (Rs 7.42 crore), a rise of 79.51 per cent. Profit before tax grew 20.24 per cent to Rs 9.09 crore (Rs 7.56 crore).

Total loan portfolio increased to Rs 508.68 crore (Rs 325.05 crore), recording a growth of 56.49 per cent. .

Thomas George Muthoot, Managing Director, Muthoot Capital Services, said loan disbursal has been consistent over the years and stands at Rs 508.68 crore. According to R. Manomohanan, CEO, the company is expanding its business by adding new products and manpower. The annual general meeting also approved a dividend of Rs 4 per equity share (40 per cent).

sajeevkumar.v@thehindu.co.in

Source: thehindubusinessline

Read more »

Muthoot Capital Q1 net rises 21%

Muthoot Capital Services Ltd has registered a 21.30-per cent growth in net profit at Rs 5.98 crore in the first quarter of the current financial year, compared with Rs 4.93 crore in the corresponding period last year.

Total income increased 56.83 per cent to Rs 34.77 crore (Rs 22.17 crore). Financial expenses increased to Rs 12.36 crore (Rs 7.19 crore), recording a rise of 71.91 per cent.

Non-financial expenses increased to Rs 13.32 crore (Rs 7.42 crore), a rise of 79.51 per cent. Profit before tax grew 20.24 per cent to Rs 9.09 crore (Rs 7.56 crore).

Total loan portfolio increased to Rs 508.68 crore (Rs 325.05 crore), recording a growth of 56.49 per cent. .

Thomas George Muthoot, Managing Director, Muthoot Capital Services, said loan disbursal has been consistent over the years and stands at Rs 508.68 crore. According to R. Manomohanan, CEO, the company is expanding its business by adding new products and manpower. The annual general meeting also approved a dividend of Rs 4 per equity share (40 per cent).

sajeevkumar.v@thehindu.co.in

Source: thehindubusinessline

Read more »

HDFC Bank opens rural branch in Bengal

HDFC Bank Ltd on Thursday announced the inauguration a 2-person rural branch in Narugram, a village in the Burdwan district of West Bengal. Burdwan is around 200 kms from Kolkata.

According to a release issued by HDFC Bank, it will be the first bank to set up a branch in the previously unbanked village.

The new branch will cater to the nearly 10,000 population in the village. With the new branch, HDFC will have 135 branches in the State.

abhishek.l@thehindu.co.in

Source: thehindubusinessline

Read more »

11 public sector bank GMs elevated as Executive Directors

In a significant move, the Centre has elevated as many as 11 General Managers (GMs) to the post of Executive Directors in various public sector banks.

The orders for the promotion of these officials have been issued, sources in the Finance Ministry said.

Rakesh Sethi, currently General Manager at Bank of India, has been appointed Executive Director, Union Bank of India.

Animesh Chauhan, General Manager at Bank of Baroda, has been appointed Executive Director at the Central Bank of India. K.K. Sansi, General Manager at Oriental Bank of Commerce, has joined Punjab & Sind Bank as an Executive Director. Krishna Guha has joined Dena Bank as an Executive Director. Prior to this, she was General Manager at Allahabad Bank. P.S. Rawat will move from Bank of India, where he was a General Manager, to Canara Bank as an Executive Director.

Arun Srivastava has been appointed an Executive Director at Bank of India. Prior to this, he was General Manager at Bank of Baroda. R. Koteeswaran has been appointed as an Executive Director at Bank of India. He is currently General Manager at Bank of Baroda.

While Mukesh Jain will move from Dena Bank to Punjab & Sind Bank as Executive Director, B.B. Joshi has been appointed as an Executive Director at Bank of Baroda. Joshi is currently a General Manager at Bank of India.

Jaikumar Garg has been appointed Executive Director at UCO Bank. He was General Manager at Corporation Bank. T.K. Srivastava, who is currently General Manager at Union Bank, has been appointed Executive Director in Syndicate Bank.

srivats.kr@thehindu.co.in
Source: thehindubusinessline

Read more »

South Indian Bank cancer venture

Minister for Finance K.M. Mani inaugurated the ‘Cancer care for life enrolment’ programme through South Indian Bank branches.

Cine actor Innocent launched the scheme at the function in which Salim Gangadharan, Regional Director, Reserve Bank, and Thomas Jacob, Director, South Indian Bank, offered felicitations.

A one-time payment of Rs 500 will enable treatment benefit of Rs 50,000 from the Regional Cancer Centre here. Membership schemes are available up to Rs 10,000 for individual and family for treatment care of up to Rs 5 lakh.

V.A. Joseph, Chief Executive of South Indian Bank, said that Rs 50 lakh had been earmarked for subsidising this venture. Enrolment can be done through all branches of the bank.

Source: thehindubusinessline

Read more »

SBI not to hike lending rates

State Bank of India on Thursday said it is not considering an increase in lending rates even though some private lenders have already taken the step.

“We are not (thinking of hiking lending rates) because we are witnessing a surge in deposits. We are getting a huge influx from liquid mutual funds. Last week, we got about Rs 10,000-15,000 crore of new money. We are sitting on a significant amount of extra cash,” said SBI Chairman Pratip Chaudhuri, on the sidelines of a customary luncheon hosted by Reserve Bank of India’s Governor D. Subbarao after the central bank’s board meet in Mumbai.

Private sector banks, such as HDFC Bank and YES Bank, have already hiked their base rates (rate below which banks cannot lend to borrowers), following RBI’s liquidity tightening measures last month.

These banks have also increased their deposit rates. Others, such as Axis Bank and Deutsche Bank, have hiked their deposit rates, generally seen as a precursor to a hike in lending rates.

According to the SBI chief, “The people who are borrowing in the wholesale market are challenged, but we are lending in the wholesale market. So, in a way, it is good for us. We are not seeing any pressure.”

“Further, our cost of funds remains at about 6.7 per cent. Even if we lend at base rate, we have a spread of 3 per cent,” Chaudhari added.

The RBI, last month, announced a series of liquidity tightening steps, including restricting banks’ overnight borrowings and sale of Government bonds, in order to stabilise the rupee.

As a result, rates in the call money market shot up, leading to some banks experiencing pressure in their cost of funds and margins, resulting in a hike in lending rates.

At present, SBI’s base rate is the lowest in the industry at 9.70 per cent.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

Read more »

RBI transfers Rs 33,000 cr surplus profit to Govt

The Government has received a bounty of Rs 33,010 crore from the Reserve Bank of India.

This amount represents transfer of surplus profit by the RBI to the Government for the year ended June 30, 2013.

In the previous year ended June 30, 2012, the RBI had transferred Rs 16,010 crore.

The RBI’s central board approved the transfer of Rs 33,010 crore at its board meeting in Mumbai. The transfer of surplus profit could be reckoned as RBI Governor D. Subbarao’s parting gift to the Government.

Subbarao, who has not missed an opportunity to emphasise the importance of containing subsidies, re-prioritising expenditure towards plan and capital expenditure and fiscal consolidation, will demit office on September 4.

The RBI’s latest macroeconomic and monetary development document has cautioned that if the government’s revenues fall short of the target, as a result of slowdown in growth, a cutback in expenditure will be required to achieve the budgeted fiscal deficit.

“It is, therefore, important for the Centre to take steps to contain its non-plan revenue expenditure within the limit set in the Union Budget 2013-14 through subsidy reforms,” it said.

Source: thehindubusinessline

Read more »

HFCs allowed to raise public deposits of up to 10 years

Housing finance companies (HFCs) have been allowed to raise public deposits with tenure of up to 10 years. Till now, these firms were permitted to raise public deposits with maximum tenure of seven years.

A decision to this effect was taken by the National Housing Bank (NHB), the regulator of housing finance companies.

With this decision, these companies can now get access to longer-term funds, R.V. Verma, NHB Chairman and Managing Director, told Business Line.

“This will help in better asset-liability management for HFCs, whose assets are growing. They also need to go in for longer-term lending and this move will help them do that,” Verma said.

Not all HFCs registered with NHB can raise public deposits – they need special approval from the regulator.

Currently, there are only 18 registered HFCs that are authorised to raise deposits from the public. The total outstanding public deposits for these 18 companies stood at about Rs 40,000 crore.

Since 2005, NHB has not granted fresh authorisation to any HFCs to mop up funds from the public.

srivats.kr@thehindu.co.in
Source: thehindubusinessline

Read more »

RBI imposes Rs 5.6 lakh fine on SBI for violation of norms

The Reserve Bank on Wednesday said it imposed a fine of about Rs 5.6 lakh on State Bank of India (SBI) for violation of currency chest norms.

"The Reserve Bank of India has imposed a penalty of Rs 5,62,555 on July 12, 2013 on SBI for violation of the terms of agreement with RBI for opening and maintaining currency chests," the central bank said in a statement.

The penalty was levied in connection with deficiencies and lapses in the operation and maintenance of the currency chest at the Secunderabad branch of SBI, it said.

Last month, the RBI had imposed a penalty of Rs 3 crore on SBI for violating know your customer (KYC)/anti-money laundering norms.

The penal action by RBI was taken after an online portal alleged violation of KYC norms and money laundering by banks and financial institutions.

"After considering the facts of each case...Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty...", the central bank had said in a statement.

Cobrapost alleged that the financial sector entities had offered to open bank accounts and lockers for customers without following KYC norms, convert their black money into white and obtain fictitious PAN cards.

Those named in the expose include SBI, LIC, Punjab National Bank, Bank of Baroda, Canara Bank, Reliance Life, Tata AIA, Yes Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Dena Bank, Corporation Bank, Allahabad Bank, Central Bank of India, Dhanlaxmi Bank, Federal Bank, DCB Bank and Birla Sun Life.

Source: Indian Express

Read more »

Central Bank of India to open 23 more branches in Vizag zone

The Central Bank of India is in the expansion mode in the north coastal districts of Andhra Pradesh as 23 more branches will be added during the current financial year, according to N.K Balakrishnan, the Field General Manager in charge of Karnataka and Andhra Pradesh, Central Bank of India. The Visakhapatnam zone covers the five districts - Srikakulam, Vizianagaram, Visakhapatnam, East Godavari and West Godavari.

Balakrishnan was speaking to reporters here on Wednesday after opening a retail asset branch of Central Bank in the city. He said it was bank’s 75th retail asset branch in the country.

“Our focus is on retail lending and our interest rates are competitive and much cheaper than those offered by private banks," he said. The bank was offering customers 30-year tenure for housing loans and there would be on-the-spot sanctions if the customers brought with them all the required documents.

He added the bank was offering loans to small and medium enterprises at 10.5 per cent and for women no security would be needed up to Rs 1 crore if they wanted to set up SMEs. The bank itself would pay the guarantee fee under the scheme specifically meant for women and has been named “Cent Kalyani”. Balakrishnan urged women entrepreneurs to make use of it.

He mentioned the bank was making all efforts to compete with the new generation private banks and “in fact the customers will get better service in our branches without the extra cost and hidden charges he/she would have to bear in the private banks.”

He said the bank would appoint business facilitators to promote retail lending. M. Achi Reddy, the chief manager, also spoke in the event.

sarma.rs@thehindu.co.in
Source: thehindubusinessline

Read more »

HDFC Bank raises benchmark lending rate by 0.2%

Country’s second largest private sector lender HDFC Bank has raised benchmark lending rate by 0.2 per cent, a move which will make auto, corporate and other loans linked with base rate or the minimum lending rate costlier.

“The base rate of the bank has been increased to 9.80 per cent from 9.60 per cent with effect from August 3,” HDFC Bank Treasurer Ashish Parthasarthy told PTI.

Base rate is dependent on cost of deposit which have gone up in the recent past both on account of RBI measures and increase in short term deposit rates, he said.

On March 30, the bank reduced the benchmark lending rate from 9.7 per cent to 9.60 per cent after the Reserve Bank of India (RBI) cut its repo rate by 0.25 per cent on March 19.

HDFC Bank becomes the second lender after Yes Bank to hike lending rate after the status-quo monetary policy review of RBI last week.

Weighed down by a weak rupee, the Reserve Bank chose to keep the repo rate or the rate at which RBI lends to the system, at 7.25 per cent and the cash reserve ratio, the amount of deposits banks park with RBI, unchanged at 4 per cent.

Yesterday, the rupee hit a intra-day record low of 61.80 against the dollar.

Last month, HDFC Bank had raised fixed deposit rates by 1 per cent for maturities between 15 days to 6 months and one day effective July 27.

The bank increased the interest rate by 0.75 per cent for maturity buckets less than 1 year but over 6 months one day.

"With hike in base rate we still remain one of the lowest in the market," Parthasarthy said.

In order to contain rupee depreciation, RBI has taken slew of measures in the past couple of weeks resulting in the tight liquidity situation for the banks.

The decline of the rupee to previous record low of 61.21 against the dollar on July 8 forced the RBI to take a series of unconventional measures to curtail liquidity and curb speculation.

On July 15, the Reserve Bank put in place measures to restore stability in the foreign exchange market, including raising the Marginal Standing Facility and bank rates to 10.25 per cent and restricting access by way of repo window to Rs 75,000 crore.

Source: Financial Chronicle

Read more »

Install surveillance cameras at ATM outlets

The RBI insists on banks on installing surveillance camera in all their ATM outlets as it helps resolve consumer complaints too apart from security issues.

Sujatha Elizabeth Prasad, Chief General Manager and Banking Ombudsman, Chennai, said nearly a fourth of the total complaints received in 2012-13 were related to credit and debit cards and ATM issues, and most of them were resolved with the help of CCTV footage.

Addressing media persons, she said with increased awareness even in rural areas, the number of complaints relating to deficiency in banking services has gone up during the year. There were a total of 7,255 complaints received by the office of the banking ombudsman, Chennai, from consumers in Tamil Nadu, Puducherry and Andaman & Nicobar Islands, and “92 per cent of them were disposed of during the year.”

Ten banks accounted for 75 per cent of the complaints – with SBI and its associates leading the pack with 27 per cent of the total complaints. Other nationalised banks accounted for 35 per cent; old private sector banks 6 per cent; new private sector banks 21 per cent; foreign banks 8 per cent, and others 2 per cent.

Of the total complaints received, close to 30 per cent were from rural and semi-urban areas. This clearly shows that there is increased awareness among consumers in rural and semi-urban areas, she said adding in a lighter vein, “and not that banks’ deficiency level has gone up”.

The RBI is planning to step up efforts during the current year to create more awareness.

ravikumar.r@thehindu.co.in

Source: Financial Express

Read more »

Karur Vysya Bank Q1 profit down 17%

Private sector lender Karur Vysya Bank said its net profit in the first quarter of the current financial year fell by 17.6 per cent to Rs 120.30 crore.

The bank had posted net profit of Rs 145.95 crore in the corresponding period (April-June) of 2012-13.

Total income rose to Rs 1,429.46 crore during the period under review from Rs 1,109.81 crore a year-ago, the bank said in a filing to the BSE.

Net non-performing assets (NPAs) or bad loans increased to 0.5 per cent from 0.38 per cent during the first quarter of FY13.

Gross NPAs, however, decreased slightly to 1.51 per cent from 1.53 per cent a year earlier.

Shares of the bank ended at Rs 345 apiece on the BSE, down 5.41 per cent from the previous close.

Source: Financial Express

Read more »

Three arrested in South Indian Bank appointment scam

Three persons, including two women have been arrested in connection with an alleged extortion racket offering officers’ post in private sector South Indian Bank Ltd here.

Police said the woman, who was the brain behind the racket, was at large after an Interpol alert in connection with another cheating case

She had reportedly cheated several people into parting with lakhs of rupees offering appointments in the Railways and Cochin Dewaswom Board and cases had been registered against her on this count.

She was arrested earlier in cheating cases and she pretended to be a relative of Therambil Ramakrishnan, MLA.

Police started investigating the matter two weeks ago on a complaint from the banks in this regard.

The modus operandi of the trio was to offer appointments in SIB without a written test and interview after paying them a hefty amount as bribe.

They had taken amounts ranging between Rs 4 lakh and Rs 10 lakh for the posts of General Accountant, Legal Officer and probationary Agricultural Officer for which SIB had advertised recently, police said, adding the exact amount taken from the public would be known only after they were questioned.

The scamsters led aspirant-employees to believe that a major portion of the money paid would go to certain Bank directors, police added.

The scam came to light when some of the victims approached the bank with fictitious appointment letters, with the bank seal and signature of the General Manager. It is suspected at least 10 such letters were issued to the head office of the bank here, police said.

The scamsters had issued appointment letters of SIB branches at Bangalore, Kanjirappilly and Thiruvananthapuram, police added.

Source: Financial Express

Read more »

Federal Bank revises home, auto loan rates for festival season

Federal Bank revised lending rates in the home and car loans segment for the month of August and September.

During this period, the bank will offer a uniform concessional interest rate of 10.25 per cent for all housing loans regardless of the amount and period of loans, the old private sector bank said in a statement.

Car loan rates will be offered at a starting rate of 10.25 per cent. No processing fee will be levied on housing loans and car loans during the festival period.

The revised rates will be offered from August 5 to September 30.

At present, the Kerala-based bank’s base rate (the minimum lending rate that the bank offers) is 10.20 per cent.

Special Loan stalls will be put up in different centres in Kerala and will facilitate spot sanction of loans. Customers can also avail various top-up loans linked to their housing loans at concessional rates. Special house warming loan to celebrate the auspicious occasion will also be available, the bank said.

Source: Financial Express

Read more »

Rakesh Sethi takes charge as Executive Director, Union Bank of India

Rakesh Sethi took charge as Executive Director at the Union Bank of India on August 5.

He has earlier worked with Bank of India as a General Manager heading the National Banking position in Southern India.

Sethi also headed the Retail Banking division and Marketing Department at the head office.

Source: Financial Express

Read more »

State Bank to expand ‘point of sale’ terminals

State Bank of India is going all out to promote electronic transactions.

India’s largest bank plans to deploy over 1.25 lakh point-of-sale (POS) terminals in the next 18 months at various merchant outlets and counters at branches across the country.

POS terminals help customers carry out cashless transactions at merchant outlets by swiping credit/ debit cards on the POS machine.

Further, the terminals also facilitate withdrawal of cash (up to a maximum of Rs 1,000 a day according to existing RBI guidelines) using debit cards at designated merchant outlets.

Reducing risk

Cash withdrawal at POS terminals at merchant outlets will help the merchants reduce the risk and costs associated with handling cash and also earn a small commission.

The terminals that SBI is planning to roll out will enable transactions using credit, debit and pre-paid cards. Besides, they will also support signature based, chip based and personal identification number based cards.

In its annual report, SBI said “In order to create a comprehensive electronic infrastructure in the country, activate the debit cards on PoS terminals, increase visibility and tap the huge potential available in the market, Merchant Acquiring business is being conducted by the bank.”

More customers

As on June-end SBI, which has over 20 crore customers and issued about 14 crore debit cards, had 86,617 POS terminals. The banking system as a whole had deployed 10,31,734 POS terminals as at June-end.

New private sector banks such as ICICI Bank (2,56,294), HDFC Bank (2,45,842) and Axis Bank (2,20,616) together accounted for 70 per cent of the total POS terminals in the country.

As at March-end 2013, alternate channels, such as ATMs, Internet banking, mobile banking and POS terminals, accounted for 35.7 per cent of SBI’s total financial transactions against 33.3 per cent as at March-end 2012.

As at June-end 2013, SBI accounted for 29 per cent of the country’s total 1,23,705 ATMs in the country.

ramkumar.k@thehindu.co.in

Source: Financial Express

Read more »

StanChart India H1 net up 45%

Standard Chartered India’s net profit before tax rose 45 per cent to $450 million in the six-month ended June 2013, driven by higher net interest margin and growth in trade and working capital loans to corporates.

The foreign bank had posted a profit before tax of $311 million in the same period in the previous fiscal year.

NIM increased to 3.7 per cent from 3.5 per cent due to lower cost of deposits, said Sunil Kaushal, Regional Chief Executive, India and South Asia, Standard Chartered.

Wholesale banking income in India grew 20 per cent to $682 million, while income from consumer banking was up 10 per cent to $245 million.

Rupee impact

“Consumer loans grew about 14 per cent, excluding the rupee depreciation. Also, the small and medium enterprise loans were driven mainly by short term trade and working capital loans,” Kaushal said adding that there was no pick up in capital expenditure loans.

There was a five per cent drag due to the currency depreciation on Indian income. It creates a lot of volatility for our clients, he added.

NPAs rise

Non-performing assets or bad loans jumped to $917 million in the January to June period. This was higher than the NPAs in full fiscal year 2012 that stood at $819 million.

Overall, the bank’s profit before tax dropped 16 per cent to $3,325 million on account of a decline of 55 per cent in profits from Korea.

Going forward, the bank said it remains “cautiously optimistic” for the second half in 2013.

beena.parmar@thehindu.co.in

Source: Financial Express

Read more »

Karnataka Bank gets IDRBT awards

Karnataka Bank Ltd has won two ‘IDRBT Banking Technology Excellence’ awards.

A press release by the bank said here on Monday that the bank has won ‘Best bank award for managing IT risks’ and ‘Best bank award for use of IT for business innovation’ for 2012-13 among ‘small banks’ category.

D. Subba Rao, Governor of Reserve Bank of India, presented the awards to P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, at the Institute for Development and Research in Banking Technology (IDRBT) in Hyderabad recently.

Quoting Bhat, the release said: “These awards demonstrate Karnataka Bank’s commitment to maintaining global standards of safety and security in the use of information technology and also making the best and innovative use of the same to enhance the levels of customer service and satisfaction.”

vinayak.aj@thehindu.co.in

Source: Financial Express

Read more »

YES Bank: No headway in attempts to settle case out of court

YES Bank Managing Director and CEO Rana Kapoor’s efforts for a truce with co-promoter Madhu Kapur through an out-of-the-court settlement has not made much headway, said a person familiar with the development.

On Saturday, Kapoor called for a ‘family’ meeting to resolve the two-month long court battle with Madhu Kapur, widow of co-founder Ashok Kapur and sister of Rana Kapoor’s wife.

“There was no conclusion at the meeting. Though Rana Kapoor came with the intent to resolve the dispute, he did not agree to recognise our joint right to nominate a director on the bank’s Board as Indian Partners,” the person said.

YES Bank spokesman did not confirm or deny the meeting. “As the matter is subjudice, we will prefer not to comment on your queries,” the spokesman said over the phone.

A set of e-mailed questions remained unanswered by the bank. Madhu Kapur moved the Bombay high Court against the bank in early June. Since then, the stock price has plunged nearly 40 per cent.

The banking sector index on the BSE has dropped around 9 per cent in the same period. Analysts believe that the stock has corrected mainly due to concerns over sustainability of the bank’s profitability amid changing interest rate scenario in the banking sector.

“Since the dispute is public, some investors would be worried. However, larger concerns on the banking sector as a whole could be the major reason. It would be difficult to assess how much the legal battle would be impacting the stock,” said Vaibhav Agrawal, Senior Analyst, Angel Broking.

YES Bank shares ended 2.95 per cent weaker at Rs 299.35 a share on the Bombay Stock Exchange on Monday.

The High Court will further hear the case on August 12.

beena.parmar@thehindu.co.in

Source: Financial Express

Read more »

At a time when commercial banks and Regional Rural Banks are in consolidation mode, splitting a State cooperative bank due to political reasons will make it weak, Prakash Bakshi, Nabard Chairman, said.

Speaking at an event hosted by Andhra Pradesh State Cooperative Bank Ltd (APCOB), he said bank consolidation and merger of Regional Rural Banks are being done to bring their numbers down from 196 to 61. Talks are also on for consolidating some of the large commercial banks.

“Due to political reasons overnight if we put a dividing line administratively or politically, and allow a banking institution to break down into smaller ones, they will become non-viable entities,” he felt.

So far, APCOB, which is serving the entire Andhra Pradesh, was meeting the requirements of all partners irrespective of where they were located.

“If we split the bank which is serving entire Andhra Pradesh, we will create one more cooperative bank, one more board and have one more chairman. A good financial institution broken into two will become weak,” he felt.

“We have seen this in Bihar, Chhattisgarh and Uttar Pradesh. Overnight when another State is created, the state cooperative bank becomes a deemed multi-state cooperative society and goes out of the State Cooperative Societies Act immediately,” he said.

AMENDMENT

The Multi-State Cooperative Societies (Amendment) Bill 2010 is pending in Parliament. When this amendment takes place, this bank can be put into that category. It will open up the possibility of creating a multi-state cooperative bank, he said.

Bakshi wanted cooperative banks to open more savings accounts under the financial inclusion programme and compete with commercial banks.

APCOB in association with RABO International Advisory Services is seeking to change its credit profile and aims to compete with commercial banks.

APCOB Managing Director V. Giridhar said the bank’s business has touched Rs 12,500 crore in 2013, up from under Rs 24 crore in 1963-64.

A Scheduled State Cooperative Bank, APCOB has 37 branches and operates through 22 affiliated District Cooperative Credit Banks (DCCBs) with their 616 branches. They are in turn linked to 2,748 Primary Agriculture Cooperative Society (PACS) at the village level.

Arun Jain, CEO of Polaris, said, when the bank is celebrating its 50{+t}{+h} anniversary, this is a moment of pride to see the bank go live with Intellect core banking solution. It is accessed by the bank’s 560 branches and 22 head offices of district banks.

rishikumar.vundi@thehindu.co.in

Source: Financial Express

Read more »

Former Vijaya Bank CMD passes away

B.B. Shetty (77), former Chairman and Managing Director of Vijaya Bank, died in Mangalore in the early hours of Saturday.

He had joined Vijaya Bank in 1975 as Manager and was elevated to the post of General Manager in 1984.

In 1989, he was appointed as an Executive Director of Indian Bank. He was the Chairman and Managing Director of Vijaya Bank from July 1, 1992 to January 31, 1996.

Source: Financial Express

Read more »

RBI approves reforms in primary co-ops

The Reserve Bank of India (RBI) has accepted the recommendations of an expert committee on primary agricultural cooperatives to ring in far-reaching reforms in the three-tier short-term cooperative credit structure.

Assets and liabilities of primary cooperatives will now stand transferred to central/state cooperative banks.

In States where the central/state cooperative banks are fully computerised and on core banking systems, primary cooperatives will function as their business correspondents.

A circular from the head office of National Bank for Agriculture and Rural Development (Nabard) unveiled the reforms to state and central cooperative banks.

Jose T. Abraham, President, All-India Nabard Employees Association, said this would mean the death knell for an estimated 93,000 primary cooperatives in the country. Rather than help financial inclusion, the new reform would only drive poor farmers and rural people to local moneylenders for meeting their credit needs, he added. The employees association would resist implementation of these reforms with all strength at its disposal.

Bhima Subrahmanyam, Managing Director, National Federation of State Cooperative Banks, said he feared a total collapse of the short-term cooperative credit structure.

Nabard had questioned the fundamental rights of cooperatives, he said. It seems to be against autonomy, democratic management, cooperative principles and concept of member-driven organisations, according to him.

ASSETS TRANSFER

Nabard has told state cooperative banks that the assets of primary cooperatives will stand transferred to the books of central/state cooperative bank along with related liabilities. Similarly, all deposits collected will be transferred to the state cooperative bank.

Share capital mobilised from members by way of share-linked capital of the loans provided will now stand transferred to the books of state cooperative banks and will form part of their share capital.

Borrowing members and depositors will have to become members of the state cooperative bank.

Primary cooperatives will not accept deposits on their account anymore and will not do lending operations of any kind on their behalf henceforth.

However, they may carry out these services for cooperative banks.

They can also facilitate the issuing of RuPay debit cards (to be issued by cooperative banks having core banking systems).

They would also work on loan recovery and canvas for deposits on behalf of state cooperative banks on a pre-decided commission or fee basis.

vinson.kurian@thehindu.co.in

Source: Financial Express

Read more »

Canara Bank considering takeover of Amanath bank

Canara Bank is conducting “due diligence” of the beleaguered Amanath Cooperative Bank, considering a possible takeover, said R.K. Dubey, chairman and managing director of Canara Bank on Saturday.

Speaking on the sidelines of a media conference convened to announce the bank’s financial results, Mr. Dubey said, “The due diligence process is expected to be completed in 15 to 20 days.”

Asked if Canara Bank is under pressure to take over the cooperative institution, Mr. Dubey said, “We are aware of its problems, but somebody has to bail it out.”

Asked whether the bank, which has been slapped with a moratorium by the Reserve Bank of India against allowing withdrawals of more than Rs. 1,000 by depositors, would not become a burden, Mr. Dubey said, “Of course, we are aware of the moratorium by the Central bank, but we will also consider other factors, including how many (loan) accounts are secured, before we take a decision on the matter.” He said he was aware the cooperative bank was saddled with “some NPAs”. “But we are also aware that the institution has a network of 16 metropolitan branches and ATMs,” he added.

Source: thehindubusinessline

Read more »

Canara Bank Q1 profits rise 2.17% to Rs 792.07 cr

Canara Bank, with higher provisioning and slippages in large and mid corporate portfolio, has posted 2.17 per cent higher profits to Rs 792.07 crore for the first-quarter of fiscal 2013-14 compared with Rs 775.24 crore same period of the previous year.

Its total income for the quarter up 14.64 per cent to Rs 10,507.88 crore compared with Rs 9,165.47 crore same period last year, while EPS stood at Rs 17.88 (Rs 17.50).

R.K. Dubey, Chairman and Managing Director, told reporters here “Bank’s profits are low due to higher provisioning and slippages in few large corporate and mid-portfolio.”

Its operating profit before provisions and contingencies increased by 36.19 per cent to Rs 1,898.26 crore compared with Rs 1,393.77 crore last year. As for the bank’s asset quality, Gross non-performing asset (NPA) stood at Rs 7,328.88 crore (same period last year Rs 4,496.55 crore) and net NPA stood at Rs 6,209.17 crore (Rs 3,755.61 crore).

Net interest margin has come down to 2.21 per cent as compared with 2.26 per cent recorded last year. Net Interest Income (NII) is up 8 per cent to Rs 1,991 crore as compared with Rs 1,844 crore in the same period last year. Provisions and contingencies increased to Rs 1,106 crore (Rs 619 crore).

Its CASA deposits to domestic deposits marginally increased to 24.2 per cent in Q1 from 24 per cent recorded same period last year. The Credit Deposit ratio of the bank stood at 13.4 per cent.

Dubey said bank has shed nearly Rs 1 lakh crore since June 2012. With this CD ratio has come down drastically to 13.4 per cent from a high of 46 per cent. Cost of deposits of the bank is around 7.5 per cent and yield on advances is around 10.5 per cent.

The total business has gone up 12.8 per cent to touch Rs 6.32 lakh crore as on June 30, 2013. The deposits increased by 14.2 per cent to reach Rs 3.82 lakh crore. The advances (net) of the bank increased by 10.8 per cent to Rs 2.50 lakh crore.

Commenting on the bank’s results, Vaibhav Agrawal VP-Research, Banking, Angel Broking said “The Canara Bank witnessed significant asset quality deterioration during the quarter, as Gross and Net NPA levels increased sequentially by around 17 per cent each. We believe that asset quality pressures for the banking sector are unlikely to abate as quickly as was expected earlier, as we take into consideration the recent macro developments in an overall weak macro environment.”

anil.u@thehindu.co.in

Source: thehindubusinessline

Read more »

Karnataka Bank to focus on credit monitoring

The Managing Director of Karnataka Bank has urged his regional heads to focus on qualitative growth through effective credit monitoring.

Addressing the review conference of regional heads of the bank here on Saturday, P. Jayarama Bhat, Managing Director and Chief Executive Officer of Karnataka Bank Ltd, said that achieving business growth and balancing it with quality in the present subdued and uncertain macro-economic conditions is a daunting task for banks.

This calls for greater efforts at all levels to ensure progressive business growth over the next three quarters of the current fiscal, however, without losing sight of quality.

“Focus shall therefore be on qualitative growth through effective credit monitoring to control slippages, improvement in customer service and inclusive growth,” he said.

A press release said here that Bhat was reviewing the business performance of the bank for the quarter ended June 30.

The general managers of the bank -- M.S. Mahabaleshwara Bhat, P. Jairama Hande, N. Upendra Prabhu, M.V.C.S. Karanth and Meera Aranha – spoke on the occasion.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

Read more »

Oriental Bank net profit down 9.7% in Q1

Oriental Bank of Commerce (OBC) has sought capital support of Rs 1,600 crore from the Centre to fund its business growth, S.L.Bansal, Chairman and Managing Director, said.

The bank expects this fund infusion out of the Rs 14,000 crore allocated in this year’s Budget for capital infusion in various public sector banks.

The previous occasion the Government infused capital in OBC was in March 2011 and the amount involved was Rs 1,740 crore, Bansal said.

OBC on Saturday reported a 9.7 per cent decline in net profit for the first quarter ended June 30, 2013 at Rs 353.38 crore (Rs 391.42 crore).

Total income for the quarter under review increased 11.93 per cent to Rs 5,255.70 crore (Rs 4,695.57 crore).

The bank’s bottomline performance was weighed down by provision towards non-performing loans and taxes despite an increase in operating profits.

Its financial performance was bolstered by a sharp rise in trading profits from the treasury at Rs 205.57 crore (- Rs 13.34 crore).

Bansal said it would be difficult to give any specific profit guidance for the second quarter. India is no longer working in a closed economy set-up and economic events in developed world are impacting domestic market conditions, he added.

Bansal, however, said the bank would look to achieve net interest margin of 2.9-3 per cent in the second quarter.

He also made it clear that there was no question of reducing the base rate for now. The bank is unlikely to look at any base rate reduction until the Reserve Bank of India’s recent liquidity reduction measures are reversed, V. Kannan, Executive Director, said.

“We are going to continue with the base rate of 10.25 per cent. The question of increasing the base rate is certainly not on the radar”, Bansal said.

As for non-performing assets, there has been a write-off to the extent of Rs 260 crore during the quarter under review.

This is substantially lower than Rs 480 crore written-off in the same quarter last fiscal, said Bhupinder Nayyar, Executive Director, OBC.

The total slippages (bad loans) for the June quarter were Rs 764 crore (Rs 706 crore).

Total recoveries stood at Rs 480 crore (Rs 437 crore).

OBC has this quarter recognised Winsome Diamonds as a non-performing asset.

The bank has an exposure of Rs 140 crore towards this company and has now provided 50 per cent toward doubtful debt, Bansal said.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

Read more »