IOB training for crafts persons

Indian Overseas Bank (IOB), lead bank for Thiruvananthapuram, in partnership with SEWA, conducted a hands-on training for women bamboo crafts persons here on Saturday.

Atul Agarwal, executive director, IOB, inaugurated the event in the presence of Balachander, general manager-credit, and Haridas, chief regional manager, Thiruvananthapuram.

This was part of the bank’s initiative to revive bamboo craft in which the new generation of traditional craft persons lack needed skills.

The bank also plans to start a production unit. The session is for six months where master crafts persons will handle it. SEWA training coordinator Roselet also was present at the inaugural ceremony.

Source: thehindubusinessline

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South Indian Bank Q2 net soars 30.5% on hefty margins

Kerala-headquartered South Indian Bank has registered a 40 per cent growth in NRI remittances during the first half of the current fiscal.

Briefing media persons after the board meeting here this morning, the bank Chief Executive V.A. Joseph said that the NRI remittances crossed the Rs 7,000-crore mark for the first time this year.

“Favourable rate of return on investment coupled with the depreciating rupee became a huge attraction for the NRIs to park their funds here. While this was not totally unexpected, we can’t expect the remittances to grow at the same speed in the coming quarters,’’ he told Business Line.

The bank has reported a 30.5 per cent growth in net profit for the quarter ended September 30, 2013.

“By maintaining our net interest margin at over 3 per cent and strategically managing the portfolio mix of liabilities, we managed to achieve such growth in our profits. We will strive to improve our growth momentum in the coming quarters,’’ he said.

Biz growth

Total business grew 12.67 per cent to Rs 75,610 crore from Rs 67,110 crore. Net NPAs increased to 1.39 per cent (0.86 per cent).

“This was on account of the stress in 2-3 corporate accounts and the fact that we did not grow our advances aggressively this year. The base has remained small,’’ he said.

(Advances grew 12.27 per cent from Rs 28,620 crore as at end September 2012 to Rs 32,132 crore at the end of the just-ended quarter).

Retail loans

The bank is concentrating on retail loans, which account for about 45 per cent of the total advances, Joseph said.

To a query on gold loans, he said: “It is the best form of advance as the recovery is excellent.’’

Gold loans at present account for 20 per cent of SIB’s total advances. The bank is targeting to increase it to 25 per cent by the end of the year.

Source: thehindubusinessline

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Axis Bank Q2 net up 21% on strong interest income

Axis Bank posted a 21 per cent rise in net profit at Rs 1,362 crore in the July-September quarter, driven by interest income, higher margins and retail loan growth.

The country’s third largest private sector bank had reported a net profit of Rs 1,124 crore in the year-ago period.

Net interest income (difference between interest earned and expended) rose 26 per cent to Rs 2,937 crore, Other income was up 11 per cent to Rs 1,766 crore from Rs 1,593 crore in the year-ago period.

Despite liquidity tightening measures taken by the central bank in July, Axis Bank’s net interest margin (NIM) grew to 3.79 per cent in Q2 FY14 (from 3.46 per cent in Q2 FY13) due to lower cost of funds arising out of unutilised forex borrowings. The bank borrowed Rs 2,000 crore from overseas markets earlier this year.

“We transferred 96 per cent of our government securities held in the available-for-sale bucket (about Rs 7,566 crore) to the held-to-maturity category and booked a mark-to-market loss of Rs 114 crore (as compared to a loss of Rs 207 crore in Q2 FY13) with a trading profit of Rs 5 crore,” said Somnath Sengupta Executive Director, Axis Bank. Gross non-performing asset (NPA) ratio increased to 1.19 per cent from 1.10 per cent in Q2 last year. Net NPA ratio also increased marginally to 0.37 per cent, as against 0.33 per cent in Q2 FY13.

Asset quality stress is likely to stay for the next two quarters of this fiscal, Sengupta said.

As on September 30, 2013, the bank’s total advances grew 17 per cent year-on-year on the back of retail and SME (small and medium enterprise) loans growing at 37 per cent at 29 per cent, respectively.

According to Sengupta, the retail and SME segments would continue to drive loan growth as the investment cycle has slowed due to the macroeconomic situation. Overall, loan growth is likely to remain slow in the next two quarters.

Total deposits grew at a moderate 8 per cent. “Our deposit growth remained muted as our wholesale term deposit growth has been lower,” Sengupta added.


beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Yes Bank, Care Ratings tie up for SME segment services

Private sector lender Yes Bank and credit rating company Care Ratings have entered into an agreement to offer services and products in the small and medium enterprise (SME) segment.

The collaboration will also work towards creating awareness on the importance of external ratings for SMEs, and funding avenues through knowledge dissemination workshops.

Both partners will also undertake focused research studies in the SME segment, the bank said in a statement.

Mehul Pandya, Head – SME, Care Ratings, said “While access to finance remains a key challenge for SMEs, their dependence on bank credit is high in the absence of alternate financing avenues. Customisation of product/ service offerings and enhanced outreach will be the key to facilitate adequate access to credit for the SMEs. With ratings covering an increasingly large segment of the MSMEs, the benefits of rating in terms of easier access to bank finance are getting acknowledged.”

Sanjay Agarwal, Senior President–Business Banking, Yes Bank, said “MSMEs are extremely critical for the Indian economy as they generate significant employment opportunities and export revenue.”

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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RBI rejects takeout finance plan of IIFCL’s London arm

The Reserve Bank of India has rejected IIFCL’s proposal to provide takeout finance at the latter’s wholly-owned London subsidiary.

This is despite the Centre giving its nod to IIFCL’s London arm to operate in the takeout finance segment.

The RBI’s move is a setback of sorts for the state-owned infrastructure lender, IIFCL, which was betting big on takeout finance to speed up disbursements from its London subsidiary.

Takeout financing at London was envisaged to be similar to IIFCL’s takeout scheme in India. Under takeout financing, loans made by banks to infrastructure firms are sold to IIFCL so that banks recover their funds ahead of the payment schedule under the loan agreement.

India Infrastructure Finance Company Ltd had contended that allowing takeout at London would speed up disbursements from its subsidiary there.

Any Indian infrastructure project developer who had raised external commercial borrowings for equipment imports could approach IIFCL’s London arm and reduce its borrowing cost, it was proposed. But RBI has not bought into this argument and, hence, rejected the proposal, sources close to the developments said.

Foreign banks

The RBI has contended that takeout at London will not be appropriate as it could end up benefiting foreign banks, which provided ECBs to Indian infrastructure developers.

In 2012-13, IIFCL had, under its takeout finance scheme in India, disbursed Rs 2,126 crore.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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Kotak Mahindra Bank to move into Bandra Kurla Complex

Kotak Mahindra Bank Managing Director Uday Kotak along with the bank’s operating management committee, including C. Jayaram and Dipak Gupta, are soon to get a swank new office address at Bandra Kurla Complex in Mumbai.

After playing host to the who’s who of Mumbai’s banking corporates, including ICICI Bank, Bank of Baroda, Bank of India, IDFC, Standard Chartered, HSBC, Deutsche Bank and Citibank, the complex is now set to welcome the latest entrant after a four-year wait.

The new office, with an area of about 1.5 lakh square feet, is set to house about 1,500 Kotak Bank employees. The first phase of shifting has already begun on Monday. “The building is currently under process of being done up for the shifting and our offices there should be ready by the next two months,” said a Kotak Bank employee.

This follows the company finally receiving the said approvals to begin shifting its staff into the 10-storey building belonging to Apple Finance whose ownership rights were acquired by the bank in 2009 for about Rs 470 crore as part of a stress-sale acquisition. This acquisition, in turn, was part of the consent terms signed before the Bombay High Court between the bank and Apple Finance.

The building that came up in early 2000 was constructed by Shapoorji Pallonji and designed by Hafeez Contractor.

Uday Kotak now shuttles between his three office premises at Nariman Point, Kalina and Goregaon. However, now that is set to change with the entire top management moving into a central office post consolidating its branches at INGS point Kalina and Baktawar building in Nariman Point in the initial phase.

The latter now houses the bank’s investment banking and treasury divisions, apart from one of Uday Kotak’s office.

manisha.jha@thehindu.co.in

Source: thehindubusinessline

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IndusInd Bank: Beats cost of funds pressure

IndusInd Bank’s well-diversified loan portfolio, improving share of low-cost deposits and good asset quality continued to help it deliver healthy earnings.

Post the Reserve Bank of India’s liquidity tightening measures in July, there were concerns that the bank’s higher dependence on wholesale short-term deposits could increase its cost of funds and, hence, affect its net interest margins (NIM); sixty-five per cent of the bank’s deposits and borrowings are in the less-than-one-year category.

Despite this, IndusInd Bank has been able to log a healthy 32 per cent growth in earnings during the September quarter.

The bank’s return on assets, at 1.7 per cent, is on a par with most leading private sector banks. The NIM has declined only marginally over the last quarter.

IndusInd Bank has been building its retail presence, more than doubling its branches in the last three years.

This has helped improve significantly its low-cost CASA (current account and savings account) deposits, which now stand at 32 per cent of the total deposits.

The bank’s growing CASA mix has helped offset to some extent the pressure of the increase in cost of funds. There has also been a marginal, 10 basis points, rise in loan yields.

After growing 29 per cent annually over the last three years, the bank’s loan book continues its strong run, logging 24 per cent growth during the September quarter, well above the industry average.

The current loan portfolio is equally split between the corporate and retail segments.

Asset quality

The bank has been able to maintain its asset quality. Gross non-performing assets, at 1.1 per cent, have increased only marginally from the previous quarter. Restructured assets, at 0.31 per cent of loans, are also within comfort levels.

The bank was able to maintain the provision-coverage ratio at 80 per cent of non performing assets, despite minimal treasury gains.

In the previous quarter, the bank had made use of the sharp treasury gains to improve its coverage.

The sixth-largest private sector bank has always traded at a premium to ICICI Bank and Axis Bank as it has been growing much faster than its peers.

The stock is now trading at 2.4 times its one-year forward book value, which is close to its historical average.

radhika.merwin@thehindu.co.in

Source: thehindubusinessline

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Birla Sun Life launches BSLI Savings Plan

Private sector insurer Birla Sun Life Insurance (BSLI) launched a participating traditional plan, BSLI Savings Plan, with guaranteed additions for the first five years of the policy term.

“BSLI Savings Plan is designed to cater to the changing needs across customer segments with the flexibility it offers in choosing the policy term and the premium paying term with guaranteed additions,” Birla Sun Life Managing Director and CEO, Jayant Dua said in a release issued here.

The plan is a savings-cum-insurance option that aims to provide secured growth to savings and comprehensive financial protection from the risk of unfortunate death.

By way of its guaranteed additions, bonus accumulation and life insurance benefit, this product offers a three-way solution.

There is an option for premium payment term of 10, 15 or 20 years with the minimum age of entry at 18 years and the maximum at 50 years.

At inception, the customer needs to choose the sum assured, the policy term and the premium payment term.

The minimum sum assured for this plan is Rs 30,000.

This plan also offers reduced paid-up benefit and auto cover continuation benefits.

For customers who have paid the premium for three years but are unable to pay a subsequent premium, full death benefits will continue for two successive years (auto cover continuation period) from the due date of the first unpaid premium, although the policy is in reduced paid-up status.

BSLI is a joint venture between the Aditya Birla Group and Sun Life Financial Inc, a leading international financial services organisation from Canada.

Source: thehindubusinessline

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Dena Bank slashes interest rate on tractor financing

After reducing interest rate on retail loans, public sector lender Dena Bank has decided to offer tractor financing at base rate to farmers to improve agriculture lending this festive season.

In addition, the bank also waived off the processing fee on tractor finance.The bank will now offer the tractor loans at base rate of 10.25 per cent up to Rs 100 lakh.

The revised rate of interest will be effective from October 12, 2013 to March 31, 2014.

Last week, the bank cut interest rates on home loan and auto loans.

Source: thehindubusinessline

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LIC Housing cuts home loan rates by 0.25%

LIC Housing Finance Ltd (LIC HFL) reduced its home loan rates by 0.25 per cent as a festival offer between October 15 and November 30, 2013.

Special rates of processing fees will also be offered during the period, the company said in a statement.

In the Bhagyalakshmi Plus scheme, specially designed for women borrowers as first property owners, the rate will be from 10.10 per cent onwards for the first fixed period of two years. An additional rebate of 0.25 per cent will be applicable throughout the loan term after conversion to floating rate, the company said.

The company also reduced interest rates by 0.25 per cent in its other schemes, namely, New Fixed 10 starting from 11.25 per cent, which is fixed for 10 years with borrowers given the choice to convert to a floating rate at the end of five years. Another ‘sure fixed’ scheme is offered at an interest rate of 12.25 per cent.

Source: thehindubusinessline

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ING Vysya ties up with IRCTC to offer online ticketing services

ING Vysya Bank has entered into a business tie-up with Indian Railways’ IRCTC to offer online train ticketing services to its customers.

This facility enables ING Vysya Bank’s customers to book train tickets using ING Net Banking or ING debit cards. Over 1 lakh tickets were booked during the first month of the launch, the bank said in a statement.

The South-based private sector bank has been enrolled into a select category of financial services firms offering these services with a high level of safety, security and ease of transactions online. The bank has also invested in advanced systems and technology for processing faster refunds and cancellations.

“This tie-up is in line with our ongoing focus to offer the best online experience to our retail customers,” said Brett Morgan, Country Head – Branch Banking and Private Client Group, ING Vysya Bank.

Beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Muthoot Finance gets ‘Golden Peacock’ award

Gold loan company Muthoot Finance Ltd has been bestowed with Golden Peacock Award for ‘HR Excellence for 2013’ at a function in London.

Baroness Verma, Parliamentary Under Secretary of State for Energy and Climate, Government of United Kingdom, presented the award to George M. Jacob, Director, Muthoot Group.

Golden Peacock Award recognises the continuing commitment by business to conduct itself ethically and contribute to economic development, while improving the quality of life of the workforce, their families as well as of the local community and society at large.

Source: thehindubusinessline

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IndusInd Bank Q2 net rises 32% on higher interest income, margins

IndusInd Bank reported a 32 per cent jump in net profit to Rs 330 crore in the July-September quarter from Rs 250 crore in the same quarter last year.

Higher interest income, net interest margin and loan growth helped boost the profit.

However, sequentially, the private sector bank’s net declined marginally from Rs 335 crore in the first quarter of FY14.

Net interest income in the reporting quarter grew 37 per cent to Rs 700 crore from Rs 510 crore in the year-ago period.

A 32 per cent growth in core fee income helped non-interest income rise 30 per cent to Rs 417 crore, from Rs 320 crore in Q2 FY13. Gross non-performing assets (NPAs) ratio climbed to 1.11 per cent (from 1.03 per cent).

The hike in the Marginal Standing Facility (MSF) rate in July did not impact the bank as it resorted to refinancing from institutions, such as Nabard and SIDBI.

This reduced costs by 70-100 basis points, helping NIM increase to 3.65 per cent from 3.25 per cent in July-September quarter last year. “Also, we used the bulk-funding route to finance short-term loans and recovered the margins in two months,” said Romesh Sobti, CEO and MD of the bank.

Overall, deposit rates have peaked and margins should improve in the upcoming two quarters, he added.

Sobti also said the bank will look at mobilising more deposits from hereon.

On foreign currency funding, IndusInd Bank is looking to raise $400 million.

The bank’s shares ended 0.14 per cent lower, at Rs 427.35 apiece, on the BSE.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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Life insurance cover for HIV-AIDS patients from April 1

The HIV-AIDS patients can look forward to life insurance cover from April 1, 2014.

The Insurance Regulatory and Development Authority (IRDA) will be making in mandatory for insurers to offer insurance cover for people living with HIV/AIDS.

Underwriting policy

In the draft guidelines issued on Friday, the regulator said that the board-approved underwriting policy should be put in place by all insurers. The patients should not be denied life insurance if the eligibility criteria as per the underwriting policy is satisfied.

Mortality study

For pricing the risk, the mortality study conducted by the Institute of Actuaries of India with the support of the working group constituted by the National AIDS Control Organisation (NACO) could be used.

The standard underwriting guidelines for life insurance products framed by the Life Insurance Council could also be taken into consideration by the insurers.

On the health insurance side, IRDA said: “With respect to persons who are HIV negative at the date of commencement of the contract and subsequently found to be HIV positive during the term of the policy, the insurers shall not reject/deny any claim, on such grounds.’’

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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Finance Ministry target: PSBs must set up 137 ATMs daily

Public sector banks will have to race against time to install 137 ATMs every day to meet the Finance Ministry’s target of putting up cash dispensing machines at all their branches by March end.

According to the ministry, all the public sector banks are running behind schedule. The banks, which are required to install onsite ATMs at 34,668 branches by March 31, had set up 5,726 at the end of August.

In the remaining seven months of the financial year, the 26 public sector banks will together have to set up 28,942 ATMs, or an average of 137 every day.

The government has directed public sector banks to have ATMs at all their branches as part of its financial inclusion drive. Finance Minister P Chidambaram said in his last Budget speech that “public sector banks have assured me that all their branches will have an ATM in place by March 31, 2014.”

At the end of March 2013, public sector banks had a combined 72,340 branches, of which 37,672 had onsite ATMs.

According to the monthly rollout plan, 1,114 ATMs were set up in August against a target of 2,959. As of August end, State Bank of India, the country’s largest lender, had 3,339 ATMs left to be installed in the current financial year.

Bank of India has 2,586 ATMs to be set up and Allahabad Bank has to install 2,174 ATMs.

Source: thehindubusinessline

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Re rises as RBI makes it easier for banks to borrow abroad

The rupee closed at an over two-month high closing at 61.07 to the dollar, buoyed by a rising domestic equity market and sale of dollars by foreign banks.

The Indian unit, which opened 32 paise stronger at 61.08 against the previous close of 61.40, was also helped by the Reserve Bank of India’s notification allowing banks, which are authorised to deal in foreign exchange, greater flexibility to access overseas funds.

The benchmark 30 stock BSE Sensex closed 1.26 per cent (255.68 points) up at 20,528.59.

A public sector bank dealer said, “Among others, strong equity markets, dollar selling by custodial (foreign banks), Standard Chartered Bank’s report revising India’s current account deficit forecast lower, and the RBI providing banks flexibility to borrow from overseas supported the rupee.”

The RBI on Thursday allowed banks authorised to deal in foreign exchange to borrow from their head office or overseas branches or correspondents outside India or any other entity (international/ multilateral financial institutions) up to 100 per cent of their unimpaired Tier I capital or $10 million, whichever is higher. Banks can borrow from these entities for a limited period up to November 30, 2013, for general banking business and not for capital augmentation.

Standard Chartered Bank, in its research report, revised India’s current account deficit (CAD) forecast for FY2014 to $45 billion from $71.8 billion. Less concern about CAD should improve foreign investors’ perception of India’s external-sector dynamics, it said.

Forex market dealers expect the rupee to settle in the 59-60/$ range in the next couple of weeks.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

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Vijaya Bank slashes interest rates on vehicle, consumer durables loans

Vijaya Bank has reduced interest rate on vehicle loans and consumer durables.

The bank has slashed by 30 basis points to 10.75 per cent on four wheeler loans, interest on two wheeler loans is also reduced by 45 basis points to 10.60 per cent.

Interest rate on consumer durables for salaried class has been slashed by 220 basis points from 14.70 per cent to 12.50 per cent.

The Bank has already reduced home loan interest by 80 basis points. The current home loan interest under festive offer is 10.25 per cent for loans up to 75 lakhs and 10.50 per cent for loans above 75 lakhs. The interest rate concessions are effective from October 11.

anil.u@thehindu.co.in

Source: thehindubusinessline

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RBI infuses Rs 19,000-cr liquidity

The Reserve Bank of India infused liquidity aggregating Rs 19,000 crore into the banking system through a seven-day term repo auction on Friday.

This is the maiden term repo auction by the central bank. It announced introduction of this auction, whereby banks pledge excess government securities with the regulator to borrow funds for 7 days and 14 days, on October 7.

Against the notified auction amount of Rs 19,000 crore, the central bank infused Rs 19,001 crore into the banking system, at the cut-off rate of 8.80 per cent. To borrow funds for seven days, banks put in bids in the 7.60 per cent to 8.96 per cent range, according to a RBI statement. Banks can borrow up to 0.25 per cent of their deposits under the term repo, provided they have surplus government securities. According to S. Srinivasaraghavan, Head-Treasury, Dhanlaxmi Bank, “The term repo route of funding works out cheaper than borrowing from the call money market or the marginal standing facility. Hence, the incremental cost of funding will be a tad cheaper for banks.”

Market players say there is a catch in the term repo in the sense that once the government securities are pledged with the RBI, banks will not be able to capitalise should the yields on government securities soften. Yields and prices of government securities move in opposite directions. Introduction of the term repo auction is aimed at developing a more reliable term structure of interest rates.

While the 14-day term repo of tenor would be conducted every reporting Friday, the 7-day term repo would be conducted on every non-reporting Friday.

Status quo on rates

Meanwhile, with the index of industrial production (IIP) reading coming in at a low of 0.6 per cent for August, the market expectation is that the Reserve Bank may maintain status quo on the repo rate and cut the marginal standing facility (MSF) rate further by about 50 basis points. Currently, the repo rate (the interest rate at which banks borrow funds from RBI) is at 7.50 per cent.

ramkumar.s@thehindu.co.in

Source: thehindubusinessline

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SBI tenders apology in contempt case against former chief

State Bank of India has tendered an unconditional apology in the Madras High Court in a contempt of court case involving Pratip Chaudhuri who retired as Chairman on September 30.

The court had summoned Chaudhuri for a personal appearance on his last day in office, but at the request of the bank’s counsel, was given 10 days until Thursday to comply.

The case involved the summary withdrawal by the bank of the ‘check off’ facility extended to its officers associations.

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

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.

While tendering an apology, the bank assured the court that the amount to be collected as ‘check off’ for September will be debited to the bank’s system suspense account and credited to the respective circle associations’ account.

Justice N. Kirubakaran of the Madras High Court also passed an order that this credit should be made on or before October 15. The check off facility requires 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 bank management had chosen to withdraw the facility suggesting to members of the unions that they pay up their subscriptions individually.

Writ petition

After negotiations failed, the association of the Chennai circle filed a writ petition on September 23. Justice Kirubakaran stayed the impugned order of the bank.

The All-India State Bank Officers Federation filed another writ petition the next day, following which the court made the stay applicable to the entire country.

Though the Chennai circle of the bank implemented the court’s order, the corporate centre in Mumbai refused to enforce it in other circles.

This is what triggered the contempt petition against Pratip Chaudhuri and Ranjit Goswami, chief general manager (human resources) of the bank.

D. Thomas Franco Rajendra Dev, General Secretary, filed the petition for the Chennai Circle Officers Association while Y. Sudharshan did the same on behalf of the Federation.

vinson.kurian@thehindu.co.in

Source: thehindubusinessline

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Corporation Bank cuts lending rates on home, auto loans

Corporation Bank reduced interest rates on home, auto and consumer durables loans by up to 1.75 per cent to cash in on the festival season demand.

The bank cut lending rate on home loans by 0.50 per cent, while the reduction in rates for auto loans is 1 per cent.

The cut in lending rate for consumer durables loans of up to Rs 5 lakh is 1.75 per cent.

The bank offers home loans of up to Rs 50 lakh at base rate of 10.25 per cent for all tenors. For loans of above Rs 50 lakh, the interest rate is 10.50 per cent.

The processing charges are fully waived for loans up to Rs 25 lakh, while 50 per cent concession is offered on loans above Rs 25 lakh, it said.

With regard to auto loans, it said the rate of interest is 10.65 per cent for up to Rs 50 lakh and 50 per cent of applicable processing charges are waived.

Similarly, the rate of interest has been reduced from 12.25 per cent to 10.50 per cent for kitchen and home appliances, solar panels, water heaters etc.

The offer is available for a period of four months till January, 2014.

For the advantage of customers, the bank has made a special arrangement with New India Assurance Company Ltd in offering vehicle insurance coverage at attractive premium.

Source: thehindubusinessline

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Canara Bank raises $500 m senior unsecured bonds

Canara Bank has raised $ 500 million through the issue of Senior Unsecured Bonds under the $2 billion medium term note (MTN) programme through the bank's London branch.

According to the bank’s release to exchanges, the coupon rate is 5.25 per cent per annum. The tenure of the bonds is five years. The bonds are listed on the Singapore Stock Exchange.

anil.u@thehindu.co.in

Source: thehindubusinessline

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J&K Bank expands branch network

Expanding its branch network, private sector lender Jammu and Kashmir Bank opened 122 new business units and 179 ATMs in the state of J&K to increase banking infrastructure in the state.

The number of branches stood at 695, while total number of ATMs was at 662 as on June 30, 2013.

The private bank’s net profit in the first quarter of FY14 was up 25 per cent to Rs 308 crore in the April to June period as compared with Rs 246 crore in the same period last year. The gross non-performing assets (NPAs) in Q1 FY14 stood at 1.67 per cent of gross advances, while net NPAs were at 0.14 per cent.

As the bank celebrated its platinum jubilee, Mushtaq Ahmad, Chairman and CEO of the bank, said “Our immediate vision is to strike the right balance between continuity and change. We envisage J&K Bank to be a mid-size financial institution in the industry that builds a strong and secure economic bridge between the demands of our present societies and aspirations of our future generations.”

Appreciating the role of the bank in localising its products, Omar Abdullah, Chief Minister of J&K, said, “J&K Bank has really sustained the local economies by providing them tailor-made solutions in agriculture, handicrafts and tourism. From entrepreneurship to providing employment they have always taken the lead.”

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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SBI to focus on agri portfolio in AP; to add 85 branches

State Bank of India (SBI), Andhra Pradesh Circle, will be adding about 85 new branches in the State before the end of the current financial year, according to Chief General Manager C.R. Sasikumar.

“We will also be adding over 200 ATMs in the same period to cater to the growing needs of our customers,’’ Sasikumar, who recently took over as AP circle head, told Business Line here.

As on September 30, 2013, SBI has 1,359 branches in the State and 2,911 ATMs with the highest amount loans under the agricultural portfolio among SBI circles in the country with about 22 lakh farmers as its customers. “So far, our focus has been on the agricultural advances along with retail,” the SBI official said.

Total advances stood at Rs 62,000 crore, while deposits were around Rs 64,000 crore. “The growth in advances has been about 17 per cent in general and we expect the same to continue in the remaining quarters of the year,” he added.

SBI sees some stagnation in small and medium enterprises engaged in infrastructure-related areas. The premium housing segment was also stagnant though some sub-Rs 40 lakh home loan segment had some traction.

TECH INITIATIVES

“We will be stepping up technology initiatives such as increasing the number of cash deposit machines, mobile banking offering among others,” he said.

On the lower credit pick up in some sectors such as corporate lending and prevailing economic environment, Sasikumar said the downward cycle had almost touched the bottom and it had to turn around at some point. “I think things will be exciting after 8-10 months due to a variety of factors such as the ensuing general elections and possible certainty about policies,” he observed.

naga.gunturi@thehindu.co.in

Source: thehindubusinessline

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Syndicate Bank focusing on expanding branch network

Syndicate Bank is concentrating on expanding its network of branches and growing its current account deposits, according to Sudhir Kumar Jain, Chairman and Managing Director.

In an interaction with media persons, after inaugurating a new branch in the city, Jain said the bank plans to increase the number of branches to 3,200 by March compared with 3,047 now. The number of ATMs would more than double by the year end to 3,000 from 1,360 at present. The bank plans to rejig administrative zones by bifurcating one of its two zones to create a new area in South Tamil Nadu.

Another area of focus will be on growing the current account portfolio which he felt was stagnating. Syndicate Bank will target small and medium enterprises and mid-corporate segment with specialised branches located in select industrial clusters.

The bank’s NPA continues to be an area of concern, he said while declining to divulge the latest figures which are being finalised.

As of June 2013, the net NPA of the bank was Rs 1,759 crore (1.19 per cent) against Rs 1,185 crore (0.93 per cent) in the corresponding month previously.

balaji.ar@thehindu.co.in

Source: thehindubusinessline

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Kotak Bank cuts interest rates on home, car loans

After public sector banks, it is now the turn of private sector lenders to cut interest rates. Kotak Mahindra Bank cut interest rates on its retail loan products for the festival season.

The bank slashed its home loan rates by 13-20 basis points (bps), while the interest rate on car loans was cut by 25 bps. “Kotak does not publish a definite card rate but both the loans range in the 10.50 to 11 per cent range,” a bank official said. One bps is a hundredth of a percentage point.

During the first quarter ending June 30, car loans grew 17 per cent year-on-year at Rs 13,055 crore (from Rs 11,154 crore in the April-June quarter in 2012).

According to the Kotak official, this fiscal year so far, the overall retail growth has been slow. “In the second half of FY14, we expect the growth to be at around 15-20 per cent,” the official added.

Kotak Mahindra Bank’s retail loan grew 16 per cent in the fiscal year 2012-13.

In the first quarter, the retail loan portfolio of the bank grew 15 per cent to Rs 24,430 crore as on June 31, 2013.

Hyderabad bureau reports: Andhra Bank has reduced interest rates on retail loans.

According to a press release, the interests rates are 10.75 per cent (for car loans), 11.25 per cent (two-wheeler loans), 10.25 -10.50 per cent (home loans), 12.25 per cent (consumer loans) and 14.25 per cent (clean loans). The processing fee on these loans has also been waived up to January 31, the release said.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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SBI appoints new CFO

State Bank of India has designated Rajendra Kumar Saraf as Deputy Managing Director and Chief Financial Officer (CFO) of the bank.

Prior to this appointment, Saraf was Deputy Managing Director in-charge of Corporate Strategy and New Business.

Before her elevation as the Chairperson on October 7, Arundhati Bhattacharya was Managing Director and CFO of SBI.

Source: thehindubusinessline

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IRDA invites applications from retired insurance professionals

The Insurance Regulatory and Development Authority has invited applications from experienced insurance professionals retired from public sector insurance companies on a contract basis.

The place of posting will be at Hyderabad/Mumbai/New Delhi.

The candidates should possess qualification in CA/CFA/CS/ICWA/LLB/MCA/B.Tech (IT)/FIII or equivalent and should have experience in Audit/Inspection/Accounts/Legal/Information Technology/Insurance and have retired from a public sector insurance company in Scale–II or Scale-III.

The number of positions is 15 and the candidate should not be above 62 as on November this year.

“Consolidated remuneration up to Rs 40,000 per month. No other facility or allowance will be payable,’’ said the regulator in a circular.

The last date of receipt of application if 31.10.2013. 

The link for applications is http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_NoYearLayout.aspx?page=PageNo2101

Source: thehindubusinessline

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SBI cuts short-term bulk deposit rates

State Bank of India has cut the interest rate on ultra-short duration bulk deposits of Re 1 crore and above to 8.5 per cent.

In a filing with the stock exchanges late last night, SBI said that the interest rate on bulk deposits for a tenure of 7-60 days would be 8.5 per cent per annum with effect from October 10.

The bank had revised the revised rates with effect from August 31, interest rates on domestic term deposits of Re 1 crore and above for a tenure of 7 days to 60 days to 9 per cent from 7.25 per cent for the general public (excluding senior citizens for whom it was raised to 9.25 per cent from 7.5 per cent).

It has now cut the interest rates for ultra short-term bulk deposits to 8.5 per cent. It was not specifically mentioned in the SBI statement to the stock exchanges as to whether the interest rate cut to 8.5 per cent would be applied uniformly to both categories of depositors — general public and senior citizens.

SBI has become the second PSU bank after Oriental Bank of Commerce (OBC) to reduce the interest rate on short-term bulk deposits after the RBI’s decision to cut the interest rate on Marginal Standing Facility (MSF) by 50 bps.

OBC had announced on Monday that it had reduced the interest rate on term deposits of Re 1 crore & above with a maturity of 180 days to less than two years by 25 bps i.e.from 9.25 per cent to 9 per cent with effect from 8th.

Source: thehindubusinessline

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Dena Bank cuts interest rates on home, car loans

Public sector lender Dena Bank reduced interest rates on various retail loans including home and car loans.

The bank will provide home loan at base rate, which is at 10.25 per cent for up to Rs 100 lakh and 10.50 per cent for home loan above Rs 100 lakh.

The interest rates on car loan also have been reduced by 100 basis points to 11 per cent from 12 per cent.

Similarly, for consumer loan, in case of tie-up under Corporate Salary Scheme rate of interest has been reduced by 100 basis points to 12 per cent from 13 per cent.

On a combo loan of car loan with home loan will be offered at 10.25 per cent up to the limit of Rs 100 lakh and at 10.50 per cent above Rs 100 lakh.

Dena bank will also offer a combo loan of car loan and consumer durable loan with home loan. The bank’s offer on consumer durable loan along with home loan will be at 11.75 per cent.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

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