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Friday, September 5, 2014

Syndicate Bank Chief Managing Director Sudhir Kumar Jain, others asked to respond on CBI's plea

A Delhi court today sought response of Syndicate Bank Chief Managing Director Sudhir Kumar Jain, CMD of Prakash Industries Ltd Ved Prakash Agarwal and another accused, arrested in a bribery case, on CBI's plea seeking to record their specimen voice for its ongoing investigation.

Special CBI judge Swarana Kanta Sharma directed Jain, Agarwal and co-accused Vineet Godha to reply on September 10, when the court will also hear the arguments on CBI's plea.

The court also said that investigating officer (IO) has not filed the status report, as directed by it, and asked the CBI to place it on record on the next date of hearing.

The court was told by the IO that CFSL report was still awaited and it was expected to be received in next three-four days after which they will file the status report before it.

"They (CBI) are directed to positively file the status report on the next date of hearing i.e. on September 10," the judge said.

CBI, in its application, said that the case was based on intercepted telephonic conversations and specimen voice sample of these three accused was required for its probe.

These accused, along with others, including Bhushan Steel Ltd Vice Chairman and Managing Director Neeraj Singal, are now in judicial custody till September 11.

They were arrested in connection with two separate graft cases in which CBI had booked them under the Prevention of Corruption Act and for the charge of criminal conspiracy under the IPC.

On August 2, CBI had arrested six accused in connection with the case and claimed to have recovered Rs 21 lakh in cash from Jain's residence besides gold worth Rs 1.68 crore and documents of fixed deposits of up to Rs 63 lakh.

The agency has filed two cases against Jain, accusing him of receiving a bribe of Rs 50 lakh through conduits and abusing his official position to enhance the credit limits of some companies in violation of laid-down procedures.

Source : Economic Times
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RBI opens supervisory college for ICICI Bank

The RBI opened a second supervisory college for ICICI Bank Ltd in Mumbai on Thursday as part of supervision of cross border operations of Indian banks abroad.

The RBI sets up supervisory colleges for banks which have good international presence. The main objectives of such colleges are to enhance information exchange and cooperation among supervisors, to improve understanding of the risk profile of the banking group and thereby facilitate more effective supervision of internationally active banks.

The first supervisory college for ICICI bank was set up in December, 2012. The RBI had set up supervisory college for State Bank of India in December 2012, while for Bank of Baroda, Bank of India and Axis Bank were set up in February and September 2014, respectively.

Source : The Hindu
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PNB challenges HC order allowing lawyers to represent Kingfisher

Punjab National Bank (PNB) has challenged a Delhi High Court order allowing lawyers to represent Kingfisher Airlines in proceedings initiated by the bank to decide whether the grounded carrier and its regulators are wilful defaulters for non-payment of dues.

PNB in its plea has sought setting aside of the High Court’s August 28 order which had also stayed the bank’s notice to the extent it threatened to hold the airlines and its guarantors United Breweries (Holdings) Ltd (UBHL) and Vijay Mallya as wilful defaulters in the event of no reply within seven days from August 21.

The court had said the operation of the default notice would not come into effect as PNB will have to give to the airline, within a week from August 28, the documents relied upon by it and Kingfisher was given two weeks time thereafter to respond.

In its appeal PNB said the airline had not disclosed that a similar plea of the carrier, against United Bank of India, was dismissed by a division Bench of the Calcutta High Court on July 16.

It has also submitted that the airline’s appeal against the Calcutta High Court’s decision was dismissed by the Supreme Court on September 2.

“Set aside the impugned judgment and order dated August 28, 2014 passed by the single judge of the High Court,” the bank’s petition has prayed.

The Delhi High Court in its August 28 order had held as “unacceptable” the bank’s reasons for not allowing the airlines to be represented by lawyers in the proceedings initiated to decide whether the grounded carrier is a wilful defaulter for non-payment of dues and directed that two advocates be allowed to represent Kingfisher.

Source : The Hindu
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Shriram Group says interested in securing small bank licence

Chennai-based Shriram Group, which failed to secure a banking licence in the recent round of licencing, has not given up the hope and is now looking at applying for a small bank licence.

The Reserve Bank had in July issued the draft guidelines for licencing of small banks and payment banks.

"The draft guidelines for small banks have been issued and we have given our suggestions and asked for some clarifications."

"Once the RBI comes out with the final guidelines and if we know that there is an opportunity for us then we will definitely apply for it," Shriram Group director G S Sundararajan (rpt) Sundararajan told PTI.

He said the group wants to get into banking space as it would fill up the gap it has in terms of our product offerings.

In the last round of banking licencing, as many as 25 corporates, including Aditya Birla Nuvo, Bajaj Finserv, Reliance Capital, LIC Housing Finance, L&T Finance and Shriram Capital, among others had applied.

The RBI, however, gave in-principle approval only to infrastructure financing firm IDFC and micro-lender Bandhan.

G S Sundararajan (rpt) Sundararajan said his group will apply for a small bank licence only if the regulations do not affect its existing businesses.

"If we have to convert our existing NBFCs (Non-banking financial company) into the bank then we may not be interested... we will remain an NBFC only," he said.

In the previous round of granting banking licence, Shriram Capital had showed its discomfort over the regulation which insisted on merging of Shriram Transport Finance Corporation and Shriram City Union into the bank if a licence were to be issued.

Source : Economic Times
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Banking sector NPAs could rise in FY'15, says Icra

Asset quality pressures continue to haunt public sector banks even as policy paralysis is being addressed as measures to revive the economy are being announced by the policy makers. Moreover, new investment norms for asset reconstruction companies too could add to the NPA pile up.

Fresh non-perfoming assets or NPAs of public sector banks are estimated to be at 3.5% of advances during the quarter ended June'14, according to a study by ratings firm Icra. Their gross NPAs increased by 20 basis points (bps) to 4.6% during the quarter. Asset quality of private sector banks too continued to remain under pressure as their NPAs also increased by 20 bps to 2.0% during the quarter.

However, there was a significant drop in the number of fresh cases of loans being refered to the corporate debt restructuring or CDR Cell for restructuring during the first of FY'15.

The Icra study notes that the level of NPAs in the banking system gets understated as a sizeable amount of loans are sold to asset reconstruction companies or ARCs. It says that the gross NPA percentage would have been higher by 20-30 bps if there were no sales to ARCs .

But sale of NPAs to ARCs is expected to decline in the rest of the current financial year ending March'15 as the Reserve Bank of India has prescribed that ARCs must invest and hold 15% in Security Receipts (SRs) as against 5% earlier.

Icra expects public sector banks' gross NPAs to be at 4.4-4.7% as on March 31, 2015, as against 4.4% as on March 31, 2014 and 4.6% as on June 30, 2014. Overall, the Gross NPAs of the banking sector including both the government owned as well as private banks could be at 4-4.2% as in March 2015, as against 3.9% as in March 2014 and 4.0% as in June 2014.

Source : Economic Times
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Thursday, September 4, 2014

IDBI Bank launches e-lounge in Mumbai branch

IDBI Bank on Thursday launched its first ‘e-lounge’. The e-lounge is unmanned and located at Mahim branch, Mumbai.

At IDBI Bank’s e-lounge, banking services that the customers can, on a self-service basis, enjoy are facilities such as ATM, Automated Cash Deposit (with a receipt and instant credit of the amount), Automated Cheque Deposit (with an acknowledgment receipt), Automated Pass Book Printing, e-Transact terminal for various Card and Net Banking holders to view balance, make a funds transfer, pay bills and recharge.

The platform also contains an LED screen providing details of Interest rates, products and services and a Hotline to our Customer Care Centre, the bank said in a statement.

Source : The Hindu
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Jan Dhan Yojana: KVG Bank opens over 1 lakh accounts

Karnataka Vikas Grameena Bank (KVG Bank), a Syndicate Bank sponsored regional rural bank, has opened 1,10,268 accounts under under Pradhanmantri Jan Dhan Yojana within a week in north Karnataka.

Ashok Reddy Chairman, KVG Bank, while sharing district-wise information, said the bank has opened 21,854 accounts in Belgaum, 19,983 at Haveri, 18,733 at Bagalkot, 14,010 at Gadag and 13,002 in Dharwad district. The campaign is said continue up to January 26, 2015.

Source : The Hindu
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Financial inclusion makes business sense for banks, says RBI official

When foreign investors are attracted by the return on investment generated by microfinance institutions, which cater to the credit needs of those at the bottom of the pyramid, then there is definitely a business case for banks to go the whole hog on financial inclusion under the Prime Minister’s Jan Dhan Yojana, according to a top Reserve Bank of India official.

“Why are foreign investors willing to come into the country in the microfinance segment? This is because they can get returns on their investment. So, the business case has been built up. What we need to build up in financial inclusion is also a similar business case. You do have profit at the bottom of the pyramid,” said Deepali Pant Joshi, Executive Director, Reserve Bank of India, on the sidelines of a recent financial inclusion conclave.

Basic accounts

Under the Yojana, which was launched on August 28 by Prime Minister Narendra Modi, banks collectively have to open 7.5 crore basic savings bank deposit accounts by January 26, 2015.

These accounts come with benefits including a RuPay debit card, a Rs1-lakh accident insurance cover and an additional Rs30,000 life insurance cover.

On satisfactory performance of an account in the first six months, the account holder will get an overdraft facility of up to Rs5,000.

Joshi observed that under the Yojana there would be a steady stream of small deposits for banks. So, they will have a large corpus to depend upon.

The RBI has advised banks to leverage the Government’s Direct Benefit Transfer (DBT) initiative to link all individuals to the banking system and to utilise the large amounts likely to be credited in these accounts to promote deposit and credit products.

Direct transfers

“It is a win-win proposition for banks if they manage to build a business case. And such a business case is emerging, because if you have direct benefit transfers and you have a revenue stream, then a lot can be achieved. If 50 per cent of the country’s population, which is marginalised, comes into the mainstream as producers and consumers of goods, you can imagine what strength of the economy would then be,” said Joshi.

The RBI official said the central bank is monitoring implementation of the Yojana at the State and district levels.

“It is a question of putting your shoulder to the wheel and being in the trench along with the troops,” she added.

Source : The Hindu
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Jan Dhan cover: LIC says no to premium

Life Insurance Corporation wants the Government to bear the premium cost involved in providing  Rs30,000 life cover for reach beneficiary of the Pradhan Mantri Jan Dhan Yojana (PMJDY), the flagship financial inclusion scheme launched by Prime Minister Narendra Modi.

While the insurance behemoth has agreed to extend life cover, it has conveyed to the Finance Ministry’s top brass that it is in no position to bear the premium cost, sources close to the development said.

Even a premium as low as Rs100 for every life insurance contract with a sum assured of Rs30,000 would mean an outgo of at least Rs 750 crore, a rough calculation shows.

This is because the Government wants to open at least 7.5 crore basic bank accounts for un-banked families by January 26 next year. The Modi administration is keen that each un-banked family has at least two accounts (including one for a woman member of the family).

Apart from a basic bank account, a beneficiary will get accident cover of Rs 1 lakh under the programme. The premium bill for the accident cover will be borne by the National Payments Corporation of India and the cover, by HDFC Ergo.

Meanwhile, Financial Services Secretary GS Sandhu on Wednesday reviewed the implementation of the scheme with top executives of all the public sector banks.
Good start

The scheme got to a flying start with 2.5 crore accounts opened on the launch date of August 28 and subsequent few days.

The main draw to this financial inclusion project has been the free accident cover that was being bundled with the Rupay debit card.

The Prime Minister's move to add life cover for the beneficiaries sweetened the deal for the un-banked families, say bankers.Moreover, the Finance Ministry’s “camp mode” strategy paid rich dividends. About 78,000 camps were organised across the country on August 28 to enable enrolments.

Source : The Hindu
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