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Saturday, April 12, 2014

Ratnakar Bank gets Rs 328 crore infusion from global investors

Ratnakar Bank said it has received Rs 328 crore in capital infusion from leading global investors like CDC Group and Asia Capital & Advisors.

Existing investors, including International Finance Corporation (IFC) and Gaja Capital, also participated in this round of capital infusion, the private lender said in a statement here.

The exercise was part of the bank's third round of financing which started three years ago.

"These new funds will assist the bank in expanding its branch network in semi-urban and rural areas of as well as providing a suite of financial products and services to the unbanked sections of society," the statement said.

Founded in 1943, the bank has its main markets in Maharashtra, Karnataka and Goa. The lender's current business size stood at over Rs 21,000 crore and it offers services to more than 5,00,000 customers.

"IFC's repeat investment will assist Ratnakar in expanding its services to the under-served SMEs, helping increase access to finance," said Serge Devieux, IFC Director for South Asia.

Commenting on its investment, Srini Nagarajan of CDC said "we are strongly aligned with Ratnakar's strategy to expand and provide a range of financial services to customer segments that are under-served by the market. Our investment approach will complement their strong management team as they continue to implement the bank's growth strategy."

Francis Andrew Rozario of Asia Capital said, "We have been impressed by the track record of the management and staff of the bank and its achievements, which include successful transformation to their performance across all segments of the economy".

Source: Economic Times
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Tuesday, April 8, 2014

Bharatiya Mahila Bank plans to open 57 branches in 2014-15

Bharatiya Mahila Bank on Monday said it plans to open 57 branches across the country this fiscal year (FY15) to take its total number of branches to 80 by March 2015.

The bank plans to launch its net banking services shortly, for the convenience of its customers, it said in a statement.

In this short span of four months, BMB has opened 23 branches across the country with a presence at Mumbai, New Delhi, Bengaluru and Chennai.

Source: ndtv
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RBI to issue Rs. 10 with inset letter 'A' in numbering panel

The Reserve Bank of India will shortly issue Rs. 10 denomination banknotes incorporating "Re"symbol on the obverse and reverse, with inset letter 'A' in both the numbering panels, in the Mahatma Gandhi Series-2005 bearing the signature of Dr. Raghuram G Rajan, Governor, RBI, and the year of printing '2014' printed on the reverse of the Banknote.

The design of these notes to be issued now is similar in all respects to the Rs. 10 Banknotes in Mahatma Gandhi Series- 2005 issued earlier, the RBI said in a notification on Monday.

All the Banknotes in the denomination of Rs. 10 issued by the Bank in the past will continue to be legal tender, the RBI added.

Source: India Infoline
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Hitachi-Omron Terminal Solutions has entered Indian market of self-service terminal for banking with Cash Deposit / Cash Recycling ATM

Hitachi-Omron Terminal Solutions, Corp. (Hitachi-Omron Terminal Solutions) today announced that the number of Hitachi Cash Deposit / Cash Recycling ATM, HT-2845-V in operation in India has exceeded 1,000. Hitachi-Omron Terminal Solutions is the first manufacturer who achieved more than 1,000 Cash Deposit / Cash Recycling ATM in service in India.

In India, major installation of self-service terminal of banking transaction has been Cash Dispensing ATM (CD). In accordance with rapid economic growth in India, the needs of deposit automation has been increasing, and this trend is expected to continue. Hitachi-Omron Terminal Solutions defined India as one of the most important market as well as China and Indonesia.

Hitachi-Omron Terminal Solutions’ HT-2845-V is one of the bestselling Cash Deposit / Cash Recycling ATM in the world. Model “HT-2845-V” is reputed by banking industry as high performance and most reliable self-service cash deposit terminal based on its cutting edge sensing and mechatronics technologies. In India, HT-2845-V has been using as a Cash Deposit ATM, but it can be upgraded to Cash Recycling ATM.

Hitachi-Omron Terminal Solutions has entered Indian market of self-service terminal for banking with Cash Deposit / Cash Recycling ATM, HT-2845-V in 2010. Since the first order, Hitachi-Omron Terminal Solutions has delivered the ATM, HT-2845-V to India’s major public sector and major private sector banks, and has been installed nationwide in India. Hitachi-Omron Terminal Solutions’ ATMs are modified to adopt environment in India such as banknote condition, counterfeit threat, climate, etc. Along with HT-2845-V proved superior performance in live, installation has been expanded and achieved 1,000 units of installation.

“Our highly advanced note transportation technologies and bill validation technologies developed over many years are well acknowledged by financial institutions world wide.” Kokichi Murayama, Operating Officer and General Manager Global Business Group of Hitachi-Omron Terminal Solutions, Corp. said, “In Japan and China, we have achieved more than 100,000 units in each market, and also, in terms of Automated Deposit Terminal (ADT), we have No.1 market share in Thailand, Indonesia, Malaysia and Taiwan. As a leading company of cash recycling ATM, Hitachi-Omron Terminal Solutions will continue to expand Cash Deposit ATM business and create efficient cash management with cash recycling technology in India.

Source: India Infoline
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The RBI said that there is no justification for banks to charge pre-payment penalty on any loan which usually have floating rate of interest

The Reserve Bank of India (RBI) is expected to direct banks to cancel penalty on pre-payment of all retail and small corporate loans. The central bank is also likely order banks do away with fines for failure to maintain minimum balance, according to a media report.

The RBI said that there is no justification for banks to charge pre-payment penalty on any loan which usually have floating rate of interest. Floating rates charge interest rates based on the prevailing markets, however with a lag of a few days or weeks, the report added.

Last week, the RBI in its first bi-monthly monetary policy statement said instead of penal charges for non-maintenance of a minimum balance in ordinary savings bank accounts, banks should limit the services available on such accounts, to those available to basic accounts.

However, the decision on penalty removal is yet to be finalised. RBI further said banks should restore the services when the balances improve to the minimum required level.
The central bank also said that in the interest of their consumers, banks should consider allowing their borrowers the possibility of pre-paying floating rate term loans without any penalty.

The banking regulator said that banks should also limit the liability of customers in electronic banking transactions in cases where banks are not able to prove customer negligence.

Source: India Infoline
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Sunday, April 6, 2014

SBI to offload up to Rs 4,000 crore bad loans to ARCs

India's largest banker SBI is selling off its non-performing assets (NPA) of around Rs 3,500 -4,000 crore for the financial year 2013-14 to asset reconstruction companies (ARC).

"We are selling NPA between Rs 3,500-4,000 crore of NPA," SBI chairman and managing director Arundhati Bhattacharya said last evening at IIM Calcutta.

SBI has total bad assets of Rs 67,799 crore. It had reported 5.73 per cent of its assets as bad loans in the October-December quarter.

It had said earlier that there were 14 ARCs functioning and many of them had been invited to pick up stressed loans.

Normally ARCs pay 5-10 per cent of the total bad loans being bought in cash and the rest could be security receipts (SRs). This helps banks to take the equivalent NPA figure out of books and make an yearly provision for recovery or actual cash payment.

"We will make yearly provisions and adjust it on mark-to-market basis," Bhattacharya said.

She said that the first quarter outlook for 2014-15 would remain sluggish and there would not be much credit growth.

Regarding predictions of a poor monsoon because of the El Nino effect, she said "Let us keep our fingers crossed on the prospect of monsoon this year. But one thing is reassuring -- the ground water levels stand sufficiently recharged by the last rains."

Source: Economic Times
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Federal Bank plans to open office in Dubai

Private lender Federal Bank plans to open an office in Dubai as part of its strategy to expand its global footprint and cater to the Indian diaspora.

"We have approached the Reserve Bank to seek their permission to open a representative office in Dubai (UAE)," Federal Bank Managing Director Shyam Srinivasan told PTI.

The bank is awaiting regulatory approval for opening the representative office there, he said. The bank already has a presence in the United Arab Emirates with a representative office in Abu Dhabi.

Domestically, the bank headquartered at Aluva in Kerala, has 1,142 branches across the country.

The bank is also exploring the possibility of entering the credit card business in 2015-16 as part of its diversification drive. It will look for an alliance or an acquisition for the credit card business, Srinivasan said.

Private sector lender IndusInd Bank had entered this segment by acquiring Deutsche Bank's card business in the country.

With the diversification, Federal Bank would be able to enhance its revenue stream and earn more fee-based business.

Srinivasan said the bank is also making efforts to reduce its non-performing assets or bad loans.

Federal Bank, a part of the consortium that had given loans to Kingfisher Airlines, has recovered Rs 10 crore till date.

"So far we have recovered Rs 10 crore from Kingfisher Airlines. We had an exposure of Rs 85 crore in the company," he said.

The State Bank of India-led consortium of 17 banks has an outstanding debt of about Rs 7,000 crore from the now-grounded carrier.

SBI has the maximum exposure, over Rs 1,600 crore, in the Vijay Mallya-led airline. It is followed by Punjab National Bank (Rs 800 crore), IDBI (Rs 800 crore), Bank of India (Rs 650 crore) and Bank of Baroda (Rs 550 crore).

Federal Bank's gross non-performing assets (NPAs) came down to 2.83 per cent at the end of the third quarter from 3.85 per cent at the end of December 2012.

During this period, its net NPAs dropped to 0.86 per cent from 0.92 per cent.

Source: Economic Times
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State Bank of India to hold home loan rates

The State Bank of India (SBI) will hold on to its home loan rates, a senior official of the bank said here.

"Home loan rates will remain as they are," SBI Chairperson and Managing Director Arundhati Bhattacharya said on the sidelines of the IIM Calcutta's 49th convocation.

The RBI on Tuesday kept policy rates unchanged but lowered the borrowing limit for the banks from the overnight facility. A lowering of borrowing limit is likely to translate into increase in cost of funds for the banks.

"Cost of funds will go up but we are not considering any hike in the home loan rates," she said.

Some of the banks like the Indian Bank have increased base rates marginally a few days back.

The bank was open to any idea for reaching a solution regarding Haldia Petrochemicals.

"We are trying to work out a solution and we are open to any idea that gives us a solution," she said.

Earlier, Bhattacharya had said that the HPL asset will not turn bad. The troubled company has a potential of very good profitability if it runs at more than 80 per cent capacity. The company is facing financial crunch for long and is on the verge of knocking the doors of Board of Financial Reconstruction.

Source: Economic Times
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Banking licence to IDFC may affect infra sector: SBI

The State Bank of India (SBI)  welcomed competition in the banking sector but apprehended that IDFC's entry into banking may impact the infrastructure sector.

"We welcome RBI's decision on banking licence. Only thing is that IDFC was a major player in the infrastructure segment. Now they will need to build their own portfolio to balance their book.

"Going forward, I don't see them playing a big role in infrastructure, which for the sector is not good. We need all the people we can get to fund infrastructure sector," SBI chairperson Arundhati Bhattacharya said on the sidelines of IIM Calcutta 49th convocation here.

It had been reported that Infrastructure finance major IDFC would reduce its exposure to the infrastructure sector over the next 18 months as it readies to enter the universal banking space.

She said the infrastructure sector requires $1 trillion in the current plan period and was apparently seemed worried to over meeting the target.

Bhattacharya said SBI would not, however, increase its exposure into the infrastructure space in order to fill the vacuum to be created by IDFC's decision to cut exposure.

"We are not going to jump in to filling that vacuum," she said.

IDFC, a specialised financial intermediary for infrastructure, had a total expose of around Rs 72,500 crore as on March, 2013.

Source: Economic Times
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