Vijaya Bank exporters’ meet

Vijaya Bank recently held its exporters meet 2013 in Bangalore. The meet was inaugurated by bank’s executive director K Ramdas Shenoy. B P Sashidhar, President KASSIA and R.Shivkumar, President, FKCCI and J Crasta, Co-Chairman, ASSOCHAM were present along with exporters. Speaking on the occasion, Shenoy stated that Vijaya Bank offers various products covering the various measures initiated by central government to narrow the trade gap and to improve the exports. Vijaya bank’s export credit is growing at more than 15 per cent annually.

Source: thehindubusinessline

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New chief for KVG Bank

Ashok Reddy Nukala has been appointed chairman of Karnataka Vikas Grameena Bank (KVGB), a regional rural bank sponsored by Syndicate Bank.

He is a graduate in agriculture science and has banking experience of 28 years. Nukala was heading the Vijayawada region of Syndicate Bank before taking charge as Chairman of KVGB.

At a function held at Dharwad, Sambasiva Reddy handed over the charge to Ashok Reddy. Sambasiva Reddy has been repatriated to Syndicate Bank Regional Inspectorate in Hyderabad.

Source: thehindubusinessline

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IDBI Bank hopeful of recovering 80% of Kingfisher dues

Public sector lender IDBI Bank is hopeful of recovering up to 80 per cent of its Rs 800 crore exposure to Kingfisher, even as the revival of the grounded airline remains uncertain.

“We are quite hopeful of recovering our dues from Kingfisher Airlines. In all, we expect to recover 70-80 per cent of our total loans to the airline,” a senior IDBI Bank official told PTI here.

The official said the bank’s total exposure stands at around Rs 800 crore. “We have already recovered Rs 70-80 crore by way of selling pledged shares,” the official added.

IDBI Bank is one of the five lenders in the SBI-led core group, which was set up early this year to recover over Rs 7,500 crore in principal alone from the Vijay Mallya-promoted airline. The company has not been servicing these loans since January 2012. The airline took loans from as many as 17 banks.

While SBI has the maximum exposure with Rs 1,800 crore, the other major lenders to the grounded airline include PNB (Rs 800 crore), BoI (Rs 650 crore), Bank of Baroda (Rs 550 crore), United Bank of India (Rs 430 crore), Central Bank of India (Rs 410 crore).

UCO Bank has an exposure of Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).

“There is enough collateral to cover the dues of all the lenders,” the official said, adding, “also, the Kingfisher brand still has a lot of value.”

The declared collaterals include the Kingfisher House in Mumbai worth about Rs 150 crore, the Kingfisher Villa in Goa worth around Rs 90 crore and the brand Kingfisher which had a notional value of over Rs 4,000 crore when pledged.

In May, the consortium leader SBI had said the lenders had recovered Rs 1,000 crore and was making all efforts to recover the remaining dues from beleaguered airlines.

“KFA recoveries are going on. We have substantial amount of recoveries. Total recoveries of more than Rs 800-1000 crore is already done,” past SBI chairman Pratip Chaudhuri had said.

The airline has been grounded since last October and its flying licence got expired in December, though it has a two years window to restart the carrier on the same permit.

Source: thehindubusinessline

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SKS completes Rs 321-cr securitisation transaction

SKS Microfinance Ltd has completed a securitisation transaction for Rs 321 crore with a major public sector bank.

The transaction is possibly the first substantial securitisation deal in the fiscal 2013-14 in the microfinance sector.

Dilli Raj, Chief Financial Officer, SKS Microfinance, said: "The present transaction generates liquidity of Rs 321 crore for the company and enables it to extend micro-loans to 4,75,000 rural women entrepreneurs.

somasekhar.m@thehindu.co.in

Source: thehindubusinessline

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Atul Agarwal joins IOB as ED

Atul Agarwal joined Indian Overseas Bank as its Executive Director on September 27. Prior to this assignment, he was General Manager in Central Bank of India.

Agarwal joined Union Bank of India as Probationary Officer in 1978 and acquired functional, accounting and information systems knowledge at various levels of operations and management. He moved to Central Bank of India as Assistant General Manager in 2007. He has 28 years of experience in commercial banking.

Source: thehindubusinessline

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Indian Bank gets new ED

Mahesh Kumar Jain has joined Indian Bank as Executive Director.Prior to this, he was General Manager at Syndicate Bank’s largest Regional Office, Mumbai. He also headed various portfolios, such as treasury and international banking, as General Manager.

Earlier, he worked in Punjab National Bank’s operations, credit and risk management department. Jain is also a member of Indian Banks’ Association’s steering committee on risk management, and member of IBA working group on implementation of Basel II and III.

Source: thehindubusinessline

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Bank of Baroda raises FD rates by up to 0.50%

State-owned Bank of Baroda (BoB) raised fixed deposit rates on select maturities by 0.50 per cent, reflecting the tightening of liquidity conditions.

Term deposits of 271 days to less than 1 year will now earns 0.5 per cent higher interest rate at 8.25 per cent as compared to the existing 7.75 per cent, BoB said in a statement.

With the revision, the interest rate on 1—6 years three months fixed deposit would go up by 0.30 per cent to 9.05 per cent, from 8.75 per cent. At the same time, 6 years three months to 10 years will also earn similar interest rate of 9.05 per cent, up 0.20 per cent.

Term deposit 1,111 days, would also earn higher interest rate of 9.05 per cent from existing 8.90 per cent.

However, the bank has left interest rate unchanged for deposits less than 271 days.

The new rates would be applicable from tomorrow, it said.

Decision of deposit rate hike come days after the RBI raised the policy rate by 0.25 per cent in its fight to keep inflation under check.

The repo rate or the short term lending rate has been increased by 25 basis points to 7.5 per cent from 7.25 per cent with immediate effect. One basis point is equal to 0.01 percentage point.

The cash reserve ratio (CRR), the portion of deposits that banks are required to maintain with the RBI in cash, unchanged at 4 per cent.

At the same time, the RBI reduced the minimum daily maintenance of CRR from 99 per cent of the requirement to 95 per cent effective from September 21, a move aimed at inducing liquidity into the system.

Source: thehindubusinessline

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YES Bank to sharpen focus on emerging sectors

Faced with a tough macro-economic environment, private sector lender YES Bank is sharpening its focus on emerging sectors such as life sciences, IT, education and healthcare to boost growth.

“Macro-economic environment is pretty tough. Yet there are sectors which are doing well and consciously the approach of the bank is... (to get growth from) emerging segments such as life sciences, IT, export-focused businesses, education and healthcare,” YES Bank, Group President & Country Head-Corporate and Institutional Banking, Amit Kumar, told PTI.

Kumar, who was speaking on the sidelines of BT-YES Bank Emerging Companies Excellence Awards, said that the rural markets are fairly strong and a lot of these sectors are getting the growth from under-penetrated markets.

“We continue to see a lot of companies which are managing the business very well in these sectors and there is a tremendous scope for the banks to really partner in their growth,” he said.

He said that the bank has identified these sectors which are largely driven by domestic consumption and such companies are very dedicated on consumption-bound growth.

Clients business

Kumar said that the bank is focusing on enhancing support to clients’ business, which can drive its P&L (profit & loss) growth.

“So, our focus is to work on P&L. And even that if it means moderated growth, we are fine with that as long as we achieve our P&L. In our road map for the next five years, we have said that we will quadruple the size of the bank over these five years.”

He said that YES Bank is on track in terms of growth strategy, which was charted out about three-and-half years ago.

During the first quarter of this fiscal, the bank had reported 38.1 per cent increase in its net profit at Rs 400.8 crore. Total income rose to Rs 2,839.9 crore against Rs 2,174.4 crore in the first quarter (April-June) of last fiscal (2012-13).

Source: thehindubusinessline

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Muthoot Housing eyeing Rs 300 cr biz this fiscal

Gold loan lender Muthoot Pappachan Group’s housing finance subsidiary is targeting to grow its book by nearly three times to Rs 300 crore by March 2014.

“We started home loan business in July 2011 and had a book of Rs 105 crore as of March 2013. This would grow to Rs 200 crore by September and Rs 300 crore by March 2014,” Muthoot Housing Finance Chief Executive Maneesh Srivastava told PTI.

Housing loans

He said the group, which has been facing trouble ever since the regulatory moves on flagship gold loans business, branched out into housing loans to increase its product bouquet, spread its risks and leverage on the existing network even though a loan is processed independently.

Srivastava said the company lends between Rs 3 and 15 lakh, with the average loan size at Rs 6.3 lakh. It generally targets projects in the vicinity of a big city or a town.

Due diligence on loans

It does not insist on any income documentation and relies on CIBIL data, inputs from the field time and ability to assess the informal sector of the economy, courtesy the experience from the gold loan lending, for doing due diligence on loans, he said.

The company is present in 17 cities across seven States. Unlike the gold loan lending business, a major chunk of business comes from western and northern markets, he said.

The company primarily depends on finance from commercial banks and also on refinance provided by sector regulator National Housing Bank, he said, adding that it lends in the region of 13.5 to 16 per cent per annum to borrowers depending on the risk.

Loan growth target

He claimed that the company has commitments worth Rs 100 crore from its bankers already lined up and hence, it will not be difficult to attain the targeted loan growth.

Srivastava said the company is well capitalised with a contribution of Rs 55 crore from the parent and its capital adequacy will stand at over 30 per cent by March 2014.

Currently, the parent holds 66 per cent in the company, Srivastava said, adding that in the future, it may look to divest to a “strategic investor”.

Source: thehindubusinessline

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SBI chairman summoned to court on last day in office

The Madras High Court has issued a notice to Pratip Chaudhuri, Chairman of State Bank of India, to present himself in court on Monday, his last day in office.

Chaudhuri and Ranjit Goswami, Chief General Manager (Human Rsources) of the bank, have been summoned in a contempt petition filed by the SBI Officers’ Association and State Bank Officers’ Federation.

A notice has been sent to Chaudhuri in his personal name as well, D. Thomas Franco Rajendra Dev, General Secretary of the Officers’ Union, Chennai circle, informed Business Line.

The contempt petition was invoked against breach of an interim stay on a contentious circular issued by the bank withdrawing the ‘check-off’ facility provided to the association.

This facility provided a lifeline to the association in the form of individual subscriptions from salary accounts of member-officers routed to its account by the bank.

LIFELINE

The management ensured that subscriptions ranging from Rs 100 to Rs 200 per employee went into the association’s account on the 25{+t}{+h} of every month, the salary payment day.

The convention has been that, at the time of joining, every employee gives a standing instruction in writing authorising the bank to deduct the sum from his/her salary account.

The management has sought to withdraw the facility suggesting to members of the unions that they pay up their subscriptions individually, Rajendra Dev said.

Earlier last week, the court had allowed a petition seeking an interim stay on the management’s circular withdrawing the ‘check-off’ facility.

While grating the interim stay, Justice N. Kirubakaran had observed that the facility was in operation right from 1975.

It is sought to be withdrawn, and in fact given effect on September 17, 2013, at a time when a similarly placed union (staff union) is enjoying the same benefit.

ORDER IGNORED

“This amounts to discrimination,” Justice Kirubakaran said in his order, copy of which is available with Business Line. But the management chose to ignore the stay order and went ahead to pay the salary on September 25 without effecting the check-off facility to members of the circle associations.

This is what forced the unions to file a contempt of court petition, Rajendra Dev said. SBI officers and clerical staff unions have a combined membership of more than two lakh.

vinson.kurian@thehindu.co.in

Source: thehindubusinessline

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New norms: LIC asks IRDA for deadline extension

Life Insurance of India (LIC) has said it has asked the regulator for extending the deadline for withdrawing existing products that do not meet the new norms from October 1.

“We are awaiting approval from the Insurance Regulatory and Development Authority (IRDA). We have made this request in case approvals are not with us. I am sure that IRDA is going to take a call on this and take a decision, which is in the larger interest of investors,” LIC Chairman S K Roy told reporters here on the sidelines of an event organised by Ramakrishna Mission.

According to the regulator, all the existing group products have to be aligned with the new rules before June 30, while individual products have time till September-end.

The new guideline for traditional life insurance will have products with more benefits for policyholders, improve transparency and curb mis-selling of the traditional products.

Under this, IRDA has capped commissions, and provided for minimum sum assured and guaranteed surrender value on traditional products sold by life insurers.

Talking about LIC’s product line Roy said, “Looking at what we are trying to do is that whatever products we have in the bouquet today, we want to have similar products in the restructured versions also. That is our product strategy at this moment. We are planning to file everything that is required to be filed. We are hopeful that IRDA will take a call on this matter.”

Going forward, he said the business growth is healthy and the company is expecting a good growth. “Business outlook is good. July and August have shown good growth. September business so far has also been very good. Overall, we are showing a healthy growth in the business,” he added.

The current quarter has seen growth in the business, but it is difficult to assume the impact of whatever changes have been brought in the restructured products by the regulator at this stage, Roy said.

“Unless the products are rolled out in the market and the distribution arm works on those products, it is difficult to predict the impact of the changes,” he said adding, “However, I am confident that our products will be well accepted by customers.”

Source: thehindubusinessline

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Four GMs elevated as Executive Directors in PSBs

The Centre has elevated four General Managers in various public sector banks to the post of executive directors.

B.S.Rama Rao, who was General Manager at Andhra Bank, has been appointed as Executive Director at Vijaya Bank.

The Centre has appointed Mahesh Kumar Jain, who was General Manager at Syndicate Bank, as Executive Director of Indian Bank.

Atul Agarwal, who was General Manager at Central Bank of India, has been appointed as executive director of Indian Overseas Bank.

All these appointments will come into effect immediately.

R.K.Takkar, who was General Manager at Oriental Bank of Commerce, has been appointed as executive director at Dena Bank.

He will assume charge of his new role in February next year.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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