Lakshmi Vilas Bank hikes lending rates by 25 bps

Lakshmi Vilas Bank has increased its base rate or the minimum lending rate by 25 basis points (bps) to 11.25 per cent (from 11 per cent).

The private sector bank also hiked its fixed deposit rates from 75 up to 275 bps in select maturities ranging from 15 days to 270 days period.

The revised rates will take effect from August 26, 2013.

“RBI's tight liquidity and high interest rate in the shorter end of the rate curve needs suitable adjustment in deposit rates and to align with shift of operating policy rate from Reverse Repo to MSF rate,” said Moses Harding, Executive Director of the bank.

It is also expected that high interest rate regime is there to stay till rupee settles down in its comfort zone and there is clarity on US Fed's stance of quantitative easing, he said.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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V. Kannan to head Vijaya Bank

The Centre has appointed V. Kannan as Chairman and Managing Director of Vijaya Bank. Kannan, who is currently an Executive Director at Oriental Bank of Commerce, is expected to assume charge of his new role on January 1 next year.

The Centre has also appointed Suresh N. Patel as Executive Director of Oriental Bank of Commerce.

Patel will assume charge as ED of Oriental Bank on January 1 when Kannan moves over to Vijaya Bank.

Patel is currently General Manager at Dena Bank.

Source: thehindubusinessline

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Exim Bank to open Myanmar office in September

The Export Import Bank of India will open its eighth overseas office in Yangon, the capital of Myanmar, next month, a senior official said on Friday.

This is being done as a follow up to Prime Minister Manmohan Singh’s recent visit to the neighbouring nation during which the two sides had signed MoUs worth $500 million for various projects.

These include irrigation and railway projects worth $199 million and $100 million, respectively. “We have requested the Government to finalise the remaining projects at the earliest,” said David Rasquinha, Executive Director, Exim Bank, here.

Exim Bank had so far contributed to the development of projects worth $250 million, including a Tata Motors’ vehicle assembly plant, in Myanmar.

Currently, Exim Bank has overseas offices in Singapore, Dubai, London and Washington DC, besides three offices in Africa.

Rasquinha said the Bank’s overseas payment receipts have been excellent and its non-performing assets negligible.

On rupee depreciation, he said it could benefit India in the long term as this currency has now become more competitive, particularly vis-à-vis those of Brazil, Malaysia and Indonesia, whose currencies, too, have depreciated.

He said Exim Bank sees good business opportunity for India in Africa. Seven of the fastest growing economies are now in that continent whose entire GDP is almost equal to India’s $1.3 trillion. As on March 31, 2013, project export contacts valued at over Rs 1,16,000 crore ($21.37 billion), supported by Exim Bank, were under execution by 90 Indian companies in 68 countries across Asia, Africa and the CIS.

Of these, 163 projects worth Rs 20,682 crore in 41 countries are under Exim Bank’s Government of India-supported Lines of Credit (LoCs). The balance 130 projects worth Rs 95,337 crore in 40 countries, which are on progress-payment basis, have been supported by Exim Bank.

Recently, with Exim Bank’s support, Gujarat-based Kalpataru Power Transmission Ltd (KPTL) secured a power transmission line contract worth $180.87 million in the Democratic Republic of Congo in Africa.

Source: thehindubusinessline

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Axis Bank hikes NRE deposit rates by 50-75 bps

Axis Bank, India’s third largest private sector bank, has increased interest rates on Non-Resident External (NRE) fixed deposits for tenures above three years by 50-75 basis points (bps), with effect from August 24.

The bank also increased interest rates on Foreign Currency Non-Resident (FCNR-B) deposits of tenures over three years by 100 bps, effective from August 17. Similarly, the rates for fixed deposits in other currencies have been hiked by one percentage point, the bank said.

For NRE fixed deposits of three to five years, the interest rate has been raised to 9.50 per cent from 8.75 per cent and for 5-10 years, it has been revised to 9.25 per cent from 8.50 per cent.

IDBI Bank

IDBI Bank has hiked FCNR (B) deposits for the tenor of three years and above by 100 basis points across all nine currencies.

In respect of NRE deposits, the rates have been hiked for tenors of more than three years and up to seven years by 25-50 bps. The bank is now offering a peak interest rate of 9.5 per cent on NRE deposits as a result of the revision.

Lakshmi Vilas Bank

Meanwhile, Lakshmi Vilas Bank also increased its lending and deposit rates. The bank hiked its base rate or the minimum lending rate by 25 bps to 11.25 per cent (from 11 per cent).

Its fixed deposit rates have been raised by 75-275 bps in select maturities ranging from 15 days to 270 days. The revised rates will come into effect from August 26.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Manappuram moves to new corporate office

Manappuram Finance, one of the leading gold-loan companies in the country, has a new corporate office.

On Friday, Maharashtra Governor K. Sankaranaryanan, formally opened the new corporate office at Valapad in Thrissur district. He noted that just because the value of the rupee has gone down recently the Indian economy would not collapse as some doomsday predictions had made out to be.

He recalled that while hundreds of banks in the US and Europe had folded up in the wake of the global economic slowdown, none of the banks in India had closed, signalling the strength of the country’s banking system as well as of the economy.

V.P. Nandakumar, managing director and chief executive officer of the company, recalled that Manappuram Finance had its humble beginnings at the village of Valapad.

Source: thehindubusinessline

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Union Bank raises bar in retail loans push

In the backdrop of banks focussing on retail loans to ride out the current economic slowdown, Union Bank of India has pushed the envelope by extending the maximum age by when home loans can be repaid to 70 years.

The move also comes in the wake of increased life expectancy coupled with senior citizens, especially former Government employees, drawing higher pensions, getting income from post-retirement employment or business.

What this means is that you can decide on taking a home loan (it could be the first, second or third one during your lifetime) even when you are in your 50s, irrespective of whether you belong to the salaried or non-salaried class.

Previously, the bank had pegged the maximum permissible age by when repayment of the last instalment of home loan had to be made for salaried and non-salaried class of borrowers at 60 years and 65 years, respectively.

Extended tenure

As part of its revamped home loan policy, the bank, in a bid to encourage young salaried / self-employed people to have a home of their own, has extended the maximum tenure for loan repayment to 30 years (from 25 years).

The extended tenure was aimed at easing the instalment burden, said Pravin K. Bansal, General Manager, Union Bank.

With house prices remaining high at most metros, the public sector bank has decided to do away with the ceiling on the maximum quantum of loan for purchase of a flat/ house. The quantum of home loan will be based on the repayment capacity of the borrower and margin norms.

Previously, the maximum quantum of loan for purchase of a flat/ house was Rs 5 crore in metros, State capitals and the NCR, Rs 3 crore in urban centres and Rs 1 crore in semi-urban and rural centres.

During the last four years, the Reserve Bank of India’s index of house prices has increased by over 110 per cent (up to January-March 2012-13). The index comprises nine cities — the four metros apart from Bangalore, Ahmedabad, Lucknow, Jaipur and Kanpur.

Union Bank has also relaxed the norms relating to the age of the house that can be financed. Its branches will consider loan applications for purchase of house up to 25 years old (previously it was up to 15 years old).

Further, the regional level credit committee has been empowered to consider loans for houses older than 25 years (previously, older than 15 years).

Bansal said the bank had also set a tight turnaround time for home loans and auto loans at five days and three days, respectively, provided the customer documents were in order.

The aim is to grow the bank’s retail loans portfolio to about Rs 25,000 crore by March-end 2014 against Rs 19,560 crore as at March-end 2013.

Source: thehindubusinessline

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HDFC hikes Retail Prime Lending Rate by 0.25 per cent

Home loan borrowers from housing loan major HDFC will now have to pay 0.25 per cent more on their floating loan monthly instalments.

“HDFC has increased its Retail Prime Lending Rate, on which its Adjustable Rate Home Loans is benchmarked, by 0.25 per cent per year with effect from August 23, 2013,” the home loan provider said in a statement.

Some banks had revised their interest rate upwards as their borrowing costs shot up after the Reserve Bank of India increased its effective lending rates to suck out liquidity from the system.

Source: thehindubusinessline

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Banking services restored at Indian Overseas Bank

Banking services at Indian Overseas Bank, which had been hit across all its branches in the last few days due to a technical glitch in a server at the headquarters here, have been sorted out, bank sources said.

Considered one of the largest public sector banks with 3,000 branches nationwide, the glitch “largely affected” transactions, hampering day-to-day operations, they said.

IOB Chairman and Managing Director M Narendra said services were affected on Monday and restored on Tuesday.

However, for the fourth day, banking as well as ATM services continued to remain affected.

A senior IOB official told PTI that “the issue was sorted out and system is working now“.

The bank has about 2,000 ATM networks across the country.

Source: thehindubusinessline

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IRDA slaps Rs 3.1 cr penalty on Bajaj Allianz Life

The Insurance Regulatory and Development Authority (IRDA) has imposed Rs 3.1 crore penalty on Bajaj Allianz Life Insurance Company.

The company was fined for violating various norms including those pertaining to payments to corporate agents and other third parties and not obtaining permanent account numbers (PAN) in policies above Rs 1 lakh, according to an order issued by the regulator on Wednesday.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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HDFC Bank to almost double two-member branches

HDFC Bank is increasing focus on its two-member mini-branch model, with plans to increase the network from the existing 280 to 500 nationwide by the end of this fiscal.

The two-member branch, which is a 250-350 sq ft facility with all the amenities available at other branches, provides the entire bouquet of its services, including phone and Net banking and international credit cards. This concept has been introduced as part of its target of bringing 10 million families (or 40 million Indians) within the banking fold.

According to Madhusudan Hegde, Head - Branch Banking South, not only do these branches involve a much lesser capital investment than the usual ones, but they also break even faster.

“Since we introduced this concept, we have seen that these branches can break even in just about 36 months — it is a cost-effective model,” he told Business Line.

While a typical branch takes Rs 25-30 lakh to set up, including an ATM, a two-member facility requires just Rs 7.5 lakh.

The bank, which inaugurated its 15 th two-member branch in Andhra Pradesh in Medak district, will be opening 10 more in the State in the next couple of weeks, followed by another eight in Tamil Nadu, which currently has 17, by September-end.

These branches are doing an average of 12-15 transactions a day (excluding ATM transaction), building up a customer list of an average of 750 in the first year of operation. As these facilities are being set up in un-banked areas, the branches are tapping the agriculture and SME credit market.

Why two-members? “Because, it is our belief that two pairs of eyes are better than one (in handling banking transactions),” Hegde said.

amitmitra@thehindu.co.in

Source: thehindubusinessline

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ICICI Bank, Vodafone launches mobile banking service in Mumbai

ICICI Bank and Vodafone India launched mobile banking service ‘M-pesa’ in Mumbai.

M-Pesa provides access to financial services via the mobile phone to the unbanked and under-banked sections of the population.

The service leverages Vodafone’s mobile services with its distribution and ICICI Bank’s security of financial transactions.

This service will now be available through 1,400 authorised agents in Mumbai. Apart from Mumbai, the service has been rolled out in Kolkata, West Bengal, Bihar, Jharkhand, Rajasthan and Delhi/NCR.

The service can help deposit and withdraw cash from designated outlets, transfer money to any mobile phone in the country, remit money to any bank account in India make payments to clear utility bills and online shopping among others.

N R Narayanan, Senior General Manager- Retail Business Head (West), ICICI Bank, “With ‘M-Pesa’, the Bank offers a unique service that provides basic banking facilities to millions of Indians who still depend on informal channels for their banking needs.”

Source: thehindubusinessline

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HDFC Bank launches 11 mini branches in rural areas of Andhra Pradesh

HDFC Bank Ltd announced the launch of 11 mini branches in rural locations across Andhra Pradesh.

Each mini branch, comprising two persons, will complement the bank’s existing traditional branch set up in the state, allowing it to reach out to more people in rural geographies, HDFC said in a statement.

A mini branch is one of the formats introduced by the bank to take formal banking experience to people in unbanked and under-banked areas. It augments the bank’s efforts towards achieving its financial inclusion goal.

HDFC Bank has a board mandated objective to bring 10 million families (40 million Indians) within the banking fold, it said.

With these launches, the bank now has 25 two-person branches in the state. This takes the total number of branches in Andhra Pradesh to 228.

Madhusudan Hegde, branch banking head, HDFC Bank, said the growth of the bank network in Andhra Pradesh reiterates its commitment to support inclusive growth and take banking services to every part of India.

“With the mini branches format, we are able to offer rural customers our full-range of products through a viable model without compromising on the quality of our service offering,” Hegde said.

A mini branch is designed to be cost-effective by maximising efficiency of space, infrastructure, technology and processes.

The product range at a mini branch is comparable to that in a traditional branch and the two members are available to provide customers an array of services.

The two-person branch works closely with the nearest large branch, operating as hub and caters to a particular geography and ensures that all products and services are made available to customers, the release added.

Source: thehindubusinessline

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Bank of India plans 2-day home loan mela in Coimbatore

Bank of India in association with Springfield Shelters and event management company VG Ads is organising a Home Loan Expo at Suguna Kalyana Mandapam on August 24 and 25.

At least 45 builders, promoters and car dealers from various districts in and around this region are said to have confirmed their participation in this mela. The bank has indicated that it would offer concession on processing charges, easy instalment and spot approval based on the applicant’s eligibility during this two-day expo.

To avail spot sanction of loan, the applicants are asked to carry with them an identity proof, PAN Card and address proof, bank statement (last six months), salary slip (last three months, if the applicant is a salaried employee) and in the case of self-employed and business people, IT returns of the last three years.

The bank has also planned a Current Account opening mela with the home loan expo.

Source: thehindubusinessline

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Bombay High Court to decide on jurisdiction of YES Bank case

The Bombay High Court will continue its hearing on Thursday to decide if it has the jurisdiction to hear the suit filed by Madhu Kapur against YES Bank.

YES Bank, in its argument on Wednesday, said the court must first determine if it has the jurisdiction in the matter before it hears the case. The private sector lender has argued that appointment of directors by the bank’s board cannot be questioned in a court of law.

It further said the appointment of directors was “duly” held as mandated by the Banking Regulations Act.

Also, the YES Bank counsel argued that the court cannot have part jurisdiction in some matters pertaining to the case.

“The suit will have to be addressed by the court in its entirety,” the senior counsel arguing on behalf of YES Bank said.

The Madhu Kapur camp has so far maintained that the appointment of six directors on the YES Bank board was not “duly” held as per the Banking Regulations Act. Madhu Kapur, widow of the bank’s co-promoter Ashok Kapur, holds 11.71 per cent stake in the bank.

Shares of the Mumbai-based bank have fallen by almost 50 per cent since the beginning of the legal battle between the families of the two promoters since June. However, analysts tracking YES Bank have said that not all of the fall can be attributed to the legal battle.

satyanarayan.iyer@thehindu.co.in

Source: thehindubusinessline

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RBI left key rates unchanged based on majority view of advisory panel

Reserve Bank of India Governor D. Subbarao chose to go with the majority opinion of the external members of the monetary policy advisory panel to maintain status quo on interest rates at the first quarter review of monetary policy last month.

Four of the seven members recommended maintenance of status quo in the policy repo rate (the interest rate at which banks borrow short-term funds from RBI by pledging government securities). Currently, the repo rate is at 7.25 per cent,

The minutes of the meeting of the Technical Advisory Committee on Monetary Policy, released by the RBI, said, “In their (members) view, though growth and inflation are projected to move down, we still have to guard against high inflation expectations that can destabilise the momentum of the economy.

“Moreover, the external front is fragile and warrants that we do not do anything that can send wrong signals about our discounting the possibility of capital outflows.”

Exchange rate

The members were of the view that developments in the external sector — large current account deficit (CAD) and pressure on the rupee — are the immediate concerns that need to be addressed.

The CAD, which arises when a country’s total import of goods, services and transfers is greater than its exports, is high and unsustainable, and the net international investment position has worsened by 50 per cent in the last two years.

Some members suggested that under these circumstances, the RBI should let the real effective exchange rate depreciate to help regain competitiveness that Indian exports have lost.

On external risks, some members were of the view that markets are forward looking and have already factored in the impact of tapering of quantitative easing by the US.

Inflation

Members were of the view that though the monsoon has been good, inflation is still high. Food prices are still elevated and the food security Bill will aggravate food price inflation as it will tilt supply towards cereals and away from other farm produce (proteins), which will raise food prices further. Fuel under-recoveries are also a consideration.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

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ICICI Bank raises fixed deposit rates by up to 0.75%

ICICI Bank has raised fixed deposit rates by up to 0.75 per cent across select maturities due to a series of steps taken by the RBI, leading to a tightening of the liquidity condition.

The private sector bank has raised the interest rate on term deposits with 46-60-day maturity by 0.75 per cent to 7 per cent. For 61-289 days as well, the increase is by similar percentage points to 7.75 per cent, according to the ICICI Bank Website.

At the same time, the bank raised interest rates by 0.5 to 7.75 per cent as compared to 7.25 per cent for fixed deposits maturing between 290 days to 1 year.

For term deposits between 1 year to 389 days, the rate has been raised by similar percentage points to 8 per cent from 7.50 per cent.

The new rates would be effective from August 16, it said.

Faced by tight liquidity, the lender’s competitors including HDFC Bank and Axis Bank have not only raised fixed deposit rates but have also increased the base rate or minimum lending rate by up to 0.25 per cent.

Meanwhile, some of the public sector banks such as Andhra Bank and Canara Bank have also raised interest rates.

The country’s largest lender State Bank of India has, however, gone public saying that it will not cut its rates as it is flush with fresh deposits and its reliance on retail deposits.

SBI Chairman Pratip Chaudhuri had said banks with excessive reliance on wholesale funding are the ones raising the lending rates as the rates in the money markets have hardened following the RBI moves.

The cost of funds has gone up for banks as the Reserve Bank has taken a series of steps to check the fall of the rupee against the US dollar.

On July 15, the RBI 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 the repo window to Rs 75,000 crore.

Source: thehindubusinessline

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PNB officers’ plea

The fourth State conference of Punjab National Bank Officers’ Association (Kerala) has demanded regulation of the working hours of bank officers, introduction of five-day week, and recruitment of sufficient staff.

It also appealed to the government to stop mergers and consolidation of banks and take effective measures to combat price rise.

The conference was inaugurated by T. R. Verma, general secretary, All India Punjab National Bank Officers’ Federation. K.C. Mohandas, Chairman, PNBOA (Kerala), presided.

Source: thehindubusinessline

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Technical glitch in IOB’s core banking system hits service

A technical snag in Indian Overseas Bank’s core banking system (CBS) on Monday affected services across the country.

According to M. Narendra, Chairman and Managing Director of the bank, following a usual maintenance work, a complex technical malfunction cropped up in the system that restrained banking services to its customers. While the transactions were carried out on the basis of account holders’ Saturday balance in some branches across the country, the bank’s ATM network could not transact any business on Monday.

However, Narendra explained that while customers of other banks could withdraw money from IOB ATMs, IOB customers were able to transact their business on other banks’ ATMs. “Our technical team is working on this, and we hope to get the system back in order by tomorrow,” he said.

The bank has 3,000 branches and a little over 2,000 ATMs.

Meanwhile, the bank has appointed EY (formerly, Ernst & Young) as consultant to shift its core banking system “from an individual platform to Oracle base” in order to align with other banks’ CBS, said Narendra. Since most banks are on the Oracle platform, the rest of the banks were asked to migrate to it. Currently, some banks, including IOB, Canara Bank and Syndicate Bank, are using individual platforms.

ravikumar.r@thehindu.co.in

Source: thehindubusinessline

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Axis Bank hikes base rate by 25 bps to 10.25%

Axis Bank, India’s third largest private sector bank, today hiked its base rate or the minimum lending rate to 10.25 per cent from 10 per cent earlier.

The new base rate will be effective from August 19, 2013. One basis point is one hundredth of one per cent (0.01 per cent).

Base rate is the rate below which banks cannot lend.

The private lender had increased its short term deposit rates by up to 50-400 bps in select tenures ranging from 7 days to one year.

Recently, YES Bank and HDFC Bank also hiked their base rate after the Reserve Bank of India tightened the liquidity from the banking system making it expensive for the banks’ short term borrowings.

The RBI had kept the key policy rate unchanged in its first monetary policy review in July. However, its liquidity tightening measures taken in July has impacted the short-term rates.

On July 15, the RBI capped banks' borrowings under liquidity adjustment facility and increased the marginal standing facility rate by 200 basis points to 10.30 per cent. The move has led to an increase in cost of funds for the banks if the steps are not rolled back, soon their margins would get affected, bankers said.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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IDBI Mutual launches tax saving fund

IDBI Mutual Fund launched an open-ended equity-linked savings scheme (ELSS), ‘IDBI tax saving fund’, with an aim to provide capital appreciation to investors along with tax benefit.

The new offering which will be open for subscription from tomorrow, will close on September 3 and the scheme will re-open for continuous sale from September 17.

“We feel this is the right time for equity investors to enter into the market as the valuations are attractive in many stocks following the recent market crash. Apart from capital appreciation, the new fund will also offer tax savings to the investors,” Debashish Mallick, Chief Executive, IDBI Mutual Fund said here.

He also said the fund house expects to garner around Rs 100 crore during the NFO period.

“We will majorly focus on retail investors for this new scheme,” Mallick said.

When asked about the timing of launch, Mallick said equity funds tend to do well when valuations are at an attractive level as investors benefit in the long run.

Talking on the distribution penetration, Mallick said the fund house is planning to increase the strength of its representative offices.

IDBI MF, promoted by public sector lender IDBI Bank, has a total AUM of around Rs 5,500 crore at the end of June quarter.

Source: thehindubusinessline

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All women bank to have 25 branches by fiscal-end

Government plans to set up about 25 branches of the proposed public sector Bharatiya Mahila Bank, India’s first all women bank, by the end of this fiscal.

“The Bharatiya Mahila Bank proposes to complete the first six branches at Mumbai, Delhi, Kolkata, Chennai, Indore and Guwahati by October 15 and take the total to 25 by March 31, 2014,” an official said.

The government has already approved Rs 1,000 crore seed capital for the women focused public sector bank, announced by Finance Minister P Chidambaram in his budget speech.

The government is also on look out for locations to set up the branches, including at Kolkata, Guwahati, Chennai, Bangalore, Jaipur, Lucknow, Mysore and Indore. The proposed bank, to be headquartered at Delhi, is likely to be operational by November this year.

Reserve Bank of India gave its in-principal approval for the Bharatiya Mahila Bank in June and the banking company is being set up, the official added.

One of the key objective of the Bank is focus on the banking needs of women and promote economic empowerment.

Earlier in the month, the Finance Ministry had said it will seek Parliament in the first Supplementary to be approved in the ongoing Monsoon Session.

Minister of State for Finance Namo Narain Meena said had the initial capital of Rs 1,000 crore for the bank has been so decided that it is not capital constrained for expansion of normal business.

Source: thehindubusinessline

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