SBI signs $500 mn LoC with Korea Exim Bank

Public sector lender State Bank of India (SBI) today said it has signed a line of credit (LoC) of $500 million with Export-Import Bank of Korea (Korea Eximbank).

This line will be in addition to (LoC) of $200 million signed between the two institutions on January 16, 2014 to support Indian companies importing goods and services from Korea, SBI said in a release.

The agreement was signed between SBI’s regional head (East Asia), C Venkat Nageswar and Korea Eximbank’s member of Board of Directors, Young Whan Sul, at Seoul.

The entire process was facilitated by SBI’s subsidiary, SBI Capital Markets.

“This signing is a step towards further strengthening of Korea-India strategic partnership,” SBI Capital Markets Managing Director and CEO Rajnish Kumar said.

The LoC can be utilised to finance SBI’s clients in India and its neighbouring countries having business relationships either by way of equity participation or regular trade with Korean companies globally, as well as joint ventures or subsidiaries of Korean companies, the release added.

Source : The Hindu

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IRDA chief: Make insurance products suitable for online sales

The insurance industry should introduce products that are suitable to be sold online, according to T S Vijayan, Chairman, Insurance Regulatory and Development Authority (IRDA).

He was speaking at a conference on digitisation and enhanced foreign direct investment, organised by Assocham here on Friday.

“Customers should have the facility to compare various products online while buying insurance,” the regulator said.

P Nandagopal, MD & CEO, IndiaFirst Life Insurance Company, said it was easy to sell insurance online.

However, only one per cent of total insurance sales was currently happening in the digital mode due to the complexity of products and Know Your Customer norms, among others, he added.


Source : The Hindu

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SBI’s officer, clerical posts attracting engineering, MBA graduates

The State Bank of India has been attracting engineers and MBA graduates in droves in its recruitment for probationary officers and clerks, a top SBI official has revealed.

The Mumbai-headquartered bank is in the process of recruiting about 1,800 probationary officers and 5,400 clerks, this year.

The bank has been attracting applications from a wide range of candidates, as the job scenario elsewhere remains bleak and public sector banks are seen to be offering jobs with better pay at the entry level.

The annual compensation on a cost-to-company basis for POs at Mumbai is around Rs8,40,000 or about Rs70,000 a month. The total starting pay for a clerical cadre employee in a metro like Mumbai is around Rs17,500 a month.

JN Misra, Deputy Managing Director and Corporate Development Officer, SBI said, “About 60 per cent of the 1,800 officers are engineers and about 10-20 per cent are MBA graduates. They apply because at the entry level, our pay package is quite good compared to the industry.”

Misra also revealed that bulk of the engineers applying for officer position is from the information and technology domain.

He said that candidates cite the public sector tag, trust and job security as the reasons for looking to a bank job. Also, he added, most applicants are engineers because most of the students these days don’t pursue courses like B.Sc. or M.Sc.

When SBI advertised for 1,500 posts in the probationary officer cadre in 2013, a record 17 lakh candidates applied for the post. In other words, 1,133 applicants were vying for a single position at the country’s top bank making the odds of clearing the exam exponentially difficult.

In 2014, the bank received 18.83 lakh applications for the 1,837 vacancies for probationary officers (POs) or a whopping 1,025 aspirants vying for every slot. As for clerical recruitment, the bank received 23 lakh applications for 5,092 vacancies or about 452 applications for every vacancy.

And it is not just the officer position that is attracting engineers or MBA graduates, even clerical posts are eliciting applications from these graduates.

“For clerical positions too, we are getting MBAs,” Misra added.

It is estimated that about half-a-million bank employees will retire from public sector banks over the next five years. It is therefore, not surprising that these banks have been on a massive recruitment drive over the last couple of years.


Source : The Hindu

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UCO Bank inks pact with CCAvenue for online shopping

Public sector lender, UCO Bank, has signed a net-banking agreement with “CCAvenue” – one of the largest payment gateway providers.

The tie-up will entail UCO Bank customers to shop online across various websites that are powered by “CCAvenue.com”. Payments can be made directly through the bank’s debit card.

Source : The Hindu

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SBI Ahmedabad donates computers for poor students

The Ahmedabad Circle of State Bank of India (SBI) distributed computer sets and peripherals to 150 needy schools in Gujarat. The move was aimed at making a visible impact on the educational infrastructure of the schools, which were in need but unable to procure due to lack of funds. The bank has spent about Rs. 46.63 lakh for the purpose and the move is expected to benefit about 59,198 students in these schools.

“SBI gifted 150 new computers sets and peripherals to 150 needy schools across all districts in Gujarat. The Ahmedabad circle made this gesture which can enhance the computer awareness amongst poorest of the poor children. Chief General Manager of the circle, A N Appaiah handed over the computers to the principals of these schools located in and around Ahmedabad and Gandhinagar,” SBI Ahmedabad circle informed in a statement here.

Source : The Hindu

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Visa to open new tech base in India; create 2,000 jobs globally

Visa Inc, the global card payments system provider, will open a new technology centre in India in 2015 and provide about 2,000 full time jobs globally.

“Visa Inc...will open a new technology centre in India in 2015 and strengthen its technology resources by creating 2,000 full-time technologist positions around the world,” Visa said in a press release today.

The positions will be a combination of new roles and existing contractor positions that are being converted to full-time positions.

Visa said the initiatives will help it accelerate shift to electronic payments and drive innovation in mobile and digital platforms.

“India is known around the world as a hub for technology- led innovation. Visa’s decision...further demonstrates our commitment to the region and presents us with an exciting opportunity to grow our internal team from the strong pool of local software engineering talent,” said Uttam Nayak, Visa’s group country manager India and South Asia.

The new technology centre will develop key application programming interfaces and software development kits that will help easy access to VisaNet, it added. 

Source : The Hindu

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Andhra Bank says has Rs. 4,346 cr exposure to firms affected by coal ruling

Indian state-run Andhra Bank has a loan exposure of Rs. 4,346 crore ($711.8 million) to companies that have been ordered by the Supreme Court to return coal blocks, its chairman said on Thursday.

Andhra Bank's total exposure to steel and power companies is between Rs. 12,000 crore and Rs. 13,000 crore, C.V.R. Rajendran told Reuters.

Andhra Bank shares were down 5.85 per cent by 2 p.m., extending Wednesday's 4 per cent fall after the Supreme Court verdict. Lenders have been hit by worries that the verdict scrapping coal allocations over two decades could lead to a rise in bad loans.

"This is an industry-wide problem," Rajendran said in a phone interview, adding an early reallocation of the coal blocks could help lower the impact on the companies and the lenders.

"If it happens at the earliest, it should not have a major impact."

Source : The Hindu

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Vijaya Bank unveils new e-products

Vijaya Bank has launched a slew of customer friendly e–products including V-Gyansagar, an Android mobile app through which the bank aims to impart financial information to the public to spread financial literacy. The products were launched executive director recently by Chairman and Managing Director V Kannan, Executive Directors KR Shenoy and BS Rama Rao.


Source : The Hindu

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BNP Paribas chairman Prot to leave bank, board meets Friday

Baudouin Prot, Chairman of BNP Paribas since 2011, is to leave the French bank and the board is due to meet on Friday to choose a successor, two sources close to the situation said on Wednesday.

One of the sources said Jean Lemierre, an adviser to the bank since 2008 who was a key negotiator with U.S. authorities over its $8.9 billion fine this year for sanctions busting, is a potential successor.

"It was a personal decision," said a second source of Prot's move, confirming recent press reports. "After more than 30 years with the bank, he wants to take a step back."

Prot's mandate as chairman was renewed earlier this year and had been due to run until 2017. He joined the bank in 1983.


Source : The Hindu

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ICICI Bank launches account for kids above 10 years

ICICI Bank, the country's largest private sector bank, has launched an account for minors above 10 years.

"The account, which will be opened in the name of the minor, will offer a personalised cheque book and a debit card with a picture his or her choice,” the bank said in a statement.

Minors will be able to undertake various banking transactions, including issuing cheques, paying bills, recharge mobile phones, open fixed deposits and recurring deposits, among others.

They will also have access to banking channels such as ATM, mobile and Internet banking.

“We are pleased to offer the ‘Smart Star’ account, which allows minors to operate their accounts independently. This will help to inculcate a habit of saving and responsibility of spending wisely,” said Rajiv Sabharwal, Executive Director of ICICI Bank.


Source : The Hindu

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Make transfers at banks need based, says Reserve Bank of India panel

Reserve Bank's committee on capacity building has suggested that banks must avoid transfer for the sake of norms and make them need based as per leadership requirement.

"Job rotation in banks, especially PSBs, should not be done in a mechanical manner but through a well laid down criteria.

"Transfers should focus on critical requirement like leadership across the geography and posts that require high concentration of power..., need-based transfers may be undertaken," said the Committee on 'Capacity Building in Banks and Non Banks'.

Banks must avoid transfer for the sake of preset norms, it added.

The 10-member committee is chaired by RBI's former Executive Director G Gopalakrishna.

It said banks should allow specialisation up to level III or IV so that demands of contemporary banking needs are met.

Among others, the report has recommended creating a position of Chief Learning Officer in banks for leadership development, knowledge dissemination and sharing.

The report has also recommended six-steps strategy for skill development; coaching or mentoring process for entry- level employees; top management training and supervisory focus on human resource management in banks.

Further, the report has suggested a common Banking Aptitude Test at a national level for entry level employees.

"The BAT score can be designed to provide an insight into the candidate's aptitude for banking; it is a necessary but not sufficient condition for selection as a bank employee. All banks can subscribe to and participate in the design and adoption of BAT as their common basic filter for recruitment."

It also said a centre of excellence (CoE) for leadership development may be created either as an independent institute or under the aegis of Centre for Advanced Financial Research and Learning(CAFRAL).

The report also said CAFRAL can administer the mentoring programme for CMD/CEOs of banks.

To address the issue of replacement of talent in banks, it has recommended that an expert pool be created internally as well as free movement of talent within organisation.

"One of the major bottlenecks banks face is in terms of finding suitable replacement of talent that is necessitated on account of attrition, retirement... Special recruitment based on job roles and competency could also be considered," it said.

The committee has asked for suggestions or comments on the evolving framework to operationalise the recommendations on or before October 31, 2014.

Source : Economic Times

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Syndicate Bank CMD dismissed from service

Sudhir Kumar Jain, who was suspended from the post of Syndicate Bank CMD from August 2, after CBI registered a case against him for bribery, has been dismissed from service with immediate effect.

In a communication to the stock exchanges today, the bank said that the Central Government in its letter dated September 22 has "terminated the term of office'' of Sudhir Kumar Jain as Chairman-cum-Managing Director of the bank with immediate effect.

He had been placed "under deemed suspension'' with effect from August 2, 2014 in the wake of his arrest by CBI for allegedly accepting bribe to hike the credit limit of some private companies bypassing rules.

The two companies named in the case were Prakash Industries and Bhushan Steel, some of whose senior executives, apart from others, have been charged.

Source : The Hindu

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Gujarat covers 8 lakh households under Jan Dhan Yojana

After the announcement of ambitious financial inclusion programme, Pradhan Mantri Jan Dhan Yojana (PMJY) by the Prime Minister Narendra Modi on August 15, banks in Gujarat have so far opened about 14 lakh new accounts, covering nearly 8 lakh households in the State, a report claimed.

After the State Level Bankers’ Committee meeting held on Tuesday here, bankers informed that while 14 lakh accounts were opened so far under the PMJY, a strategy was chalked out to open 28 lakh more accounts by January 26 to achieve the target.

“There has been remarkable headway in the PMJY scheme in Gujarat. Banks have successfully achieved household coverage of as high as 93 per cent in Mehsana district,” said Ashwani Kumar, CMD, Dena Bank - SLBC convener in the State.

Notably, among the public sector banks, Bank of Baroda and Dena Bank topped by opening over 3 lakh accounts each since the announcement of the scheme, while the distant third was Central Bank of India with 1.01 lakh new account opening.

As per the SLBC data, till July 31 public sector banks had outperformed their private sector counterparts in the State with higher coverage against the allotted target for financial inclusion.

According to the data most of the public sector banks had achieved over 60 per cent household coverage, while private sector majors including HDFC Bank, ICICI Bank, Federal Bank and Yes Bank among several others could not even reach halfway mark. While State Bank of India, Dena Bank and Bank of Baroda among the public sector players had maximum coverage of 77 per cent and 75 per cent respectively, HDFC and ICICI Bank could achieve 48 per cent each, while YES Bank and Federal Bank among the private players had 43 per cent coverage as on July 31, 2014.

“Banks have been aggressive in financing. We have seen 43 per cent year-on-year growth in MSME advances. These are the symptoms that economy is reviving and we are hopeful to see credit growth taking place in areas like housing and education loan,” Kumar told mediapersons.

According to Kumar, banks in the State performed well during the first quarter ended June 2014 by achieving about 33 per cent of their targeted service area plan for the year 2014-15.

Source : The Hindu

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ICICI Bank unveils new product for NRIs

ICICI Bank today launched a new product to serve the Indian diaspora and cater to their non— financial needs.

The top private lender said ‘NRI Advantage’ entitles customers to avail of exclusive discounts/special offers. It is targeted at NRI Premia, NRI Pro and NRI savings account holders.

Commenting on the offering, ICICI Bank Executive Director Rajiv Sabharwal said, “the bank serves 1.5 million NRIs spanning 150 countries and processes over 5 million inbound transactions annually. With NRI Advantage we are confident that we will be providing our customers with a better value in the market.”

The product delivers a host of discounts for healthcare requirements, gifting family & friends, assistance for service needs and India—based shopping wants of NRIs, among others.

Source : The Hindu

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Exim Bank receives Rs. 650 cr capital infusion from Govt

Export and Import Bank of India received Rs. 650 crore capital and is due to receive further Rs. 650 crore this year as part of the worth capital infusion from the Government of India.

"Last year we got Rs. 700 crore from the government… (it) will give us Rs. 1,300 crore this year. Out of that, we have already received Rs. 650 crore of capital about ten days ago. Rest we will receive in the second half of this fiscal," Yaduvendra Mathur, Chairman and Managing Director, Exim bank said on the sidelines of a round table to sign Memorandum of Intent with US dignitaries to encourage collaboration to promote investment into Indian companies in the US.

Following the infusion, the paid-up capital base of the Government-owned bank will be increased to Rs. 5,000 crore.

The bank has also asked for additional Rs. 2,500 crore for next financial year in addition to room for further leverage. “The leverage ratio should be enhanced from 11 to 15. The other request is additional Rs. 2,500 crore in the next financial year and another Rs. 2,500 crore after that,” the CMD had said last month.

According to him, net asset growth for Exim bank will be at least in the range of 10-12 per cent this year. “We will be looking at more off-take from industry in the next two quarters. Last year, net asset growth was about 15 per cent. We are not too bullish on net asset growth. We are looking at more project export this year,” Mathur added.

Source : The Hindu

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No second account needed for Jan Dhan benefits: Govt

The Finance Ministry on Monday said that micro-credit (overdraft) limit of Rs5,000, proposed under the Pradhan Mantri Jan Dhan Yojana (PMJDY), can also be extended to existing savings bank accounts.

This facility will be available to all existing savings bank accounts on application and depending on the satisfactory conduct of the account, the Finance Ministry said in a statement here.

It has also issued instructions to the effect that people who already hold bank accounts need not open a Jan Dhan account just to get insurance benefits under the PMJDY.

The insurance benefits are available through RuPay card and existing bank account holders keen to avail themselves of the insurance benefits (promised under Jan Dhan accounts) can submit an application to the bank branch concerned to get a RuPay debit card.

Once a RuPay debit card is available to an account holder, the insurance benefits of accident cover of Rs1 lakh and life cover of Rs30,000 will be provided to them too.

As on date, 4.18 crore accounts have been opened under the PMJDY.

The Finance Ministry has also said that people who do not have officially valid documents or Aadhaar numbers can still get bank accounts opened by submitting two copies of signed photographs at the bank branch.

However, these accounts will be called “small accounts” and would be normally valid for 12 months. Such accounts shall be continued subject to showing of proof that he/she has applied for any of the officially valid documents within 12 months of opening of the small account.

Source : The Hindu

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Andhra Bank to open 450 new branches

Andhra Bank has firmed up plans to open 450 new branches across the country during this financial year, according to its Chairman and Managing Director, CVR Rajendran.

He was speaking to newspersons after inaugurating the 2000th ATM of the bank in the Punjagutta area of the city along with a customer service kiosk. Customers can open accounts, link Aadhar numbers and do transactions from the facility.

The Bank, now a lead bank for Andhra Pradesh has leveraged technology to expand its facilities. The pioneer in credit cards, it opened the first ATM at Saifabad in Hyderabad in 1998, he said.

Along with ATMs, self cash depositing machines, pass book printing kiosks are installed to make all the basic banking services available to the customers round the clock.

The customer service kiosk has trained personnel, who will guide customers to open accounts, link Aadhar, do transaction with online as well as deposit and withdraw cash, said G Ravi Kumar, General Manager. 


Source : The Hindu

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Syndicate Bank plans 50 mid-corporate branches this fiscal

Syndicate Bank will open 50 mid-corporate branches during the current financial year, according to the bank’s Executive Director TK Srivastava.

Inaugurating a mid-corporate branch in Mangalore on Monday, he said the branch will cater to credit requirements of Rs5 crore and above. Chartered accountants and credit officers will manage the operations of the branch.

Stating that the bank has opened 17 such branches in the country, he said 35 branches would be opened by December. The target is to open a total of 50 such branches by the end of 2014-15.

The bank expects business of around Rs200-300 crore from each of these branches.

Terming MSMEs (micro, small and medium enterprises) as the backbone of the country, he said advances by the bank to MSMEs have seen a growth of 30-35 per cent. Mid-corporate branches like this will further boost the growth of MSME advances, he said.

On the Prime Minister’s Jan Dhan scheme, Srivastava said 3,300 branches have already opened 800,000 accounts under the scheme.

The bank has introduced the Aadhar-enabled e-KYC (know your customer) system in 50 of its branches. Around 700 branches will come under the e-KYC during this year.

The bank, which has 3,300 branches across the country, plans to open 3,500 branches by the end of the current financial year.

The bank recruited around 5,000 people in officers and clerical cadres last year. Srivastava said the bank is hopeful of reaching a business level of Rs4 lakh crore by the end of September 30. The bank’s business crossed Rs3.92 lakh crore in the first quarter of the current financial year, he added.


Source : The Hindu

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Jan Dhan Yojana: Union Bank engages Fino PayTech in Gujarat

Union Bank of India (UBI) has engaged Fino PayTech in more than 400 villages in Gujarat to identity and enrol unbanked population under the Prime Minister’s Jan Dhan Yojana (PMJDY).

Already, UBI has enrolled more than 9,000 rural customers under the scheme in 41 villages of Gujarat.

With the latest numbers reporting four crore accounts opened under the PMJDY, there is growing concern over a single person opening multiple accounts. Following a directive from the RBI, banks have started to undertake massive exercises to identify and enrol the right persons eligible for a bank account under the scheme.

Taking the lead in Gujarat, UBI flagged off its national financial inclusion project in the districts of Rajkot, Bhavnagar and Junagadh where camps were held in 44 villages. A total of 9,500 hitherto unbanked people in these villages have been enrolled for new bank accounts.

Payments technology firm and leading business correspondent (BC) network operator, Fino PayTech is UBI’s partner in this endeavour. Together they intend to extend the project further in 400 more villages through BC network in Rajkot, Ahmedabad, Mehsana, Surat and Vadodara districts, Vikaas Goel, Vice-President, Fino PayTech, said on Monday.

Explaining the strategy for taking forward banking in rural areas, he said business correspondents brought about paradigm shift in the way rural banking was being conducted. The PMJDY further emphasises their strategic role in making financial inclusion possible. “To penetrate further in rural Gujarat we plan to hire over 200 agents who will identity and enroll the unbanked population for new bank accounts under the scheme.”

“Identification of an eligible household for a bank account is a major development compared to earlier efforts. We will undertake surveys to identify such households prior to enrollments. This will ensure quality of bank accounts and reduce wastages in terms of effort, cost and duplication,” added Goel. 

In addition to enrolling new bank accounts, the agents will also service the customers’ banking needs by providing access to various products such as savings, credit, insurance, RD/ FD and remittances.

Apart from Gujarat, Fino is working with UBI on the PMJDY in UP, MP, Bihar, Odisha and Jharkhand, among other states, enrolling over 3.75 lakh people for new bank accounts.

Fino PayTech is micro payments solutions provider to banks, financial institutions and MFIs. Together with its service delivery network of 28,000 transaction points it facilitates access to financial services to the unbanked and un-served segments of the population. It services over 2.80 crore active banking customers spread across India, providing a range of financial services like savings, remittance, insurance, credit etc.


Source : The Hindu

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Punjab and Sind Bank to allot 9.46 crore shares on pref basis

The shareholders of Punjab and Sind Bank have approved a special resolution for allotting over 9.46 crore shares on a preferential basis to the Government of India at Rs59.14 a share. This was done at an extraordinary general meeting (EGM) held in the Capital on Friday, the bank said in a filing to the stock exchanges.

The allotment would be done by converting Rs200 crore worth of perpetual non-cumulative preference shares, Rs200 crore worth of perpetual cumulative preference shares and Rs160 crore worth of innovative perpetual debt instruments held by the Government.

The EGM also voted on allotting over 6.76 crore shares to LIC and GIC (along with its subsidiaries) at the same price on preferential basis.

After the preferential allotment, LIC’s stake in the bank would go up to 9.6 per cent from 4.2 per cent now, while that of GIC and its subsidiaries to 8.54 per cent from 0.06 now. The Government’s stake would come down from 81.41 per cent to 72.85 per cent.


Source : The Hindu

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ICICI Bank launches 4 mobile banking apps

With an aggressive approach to mobile banking, ICICI Bank, the country's largest private sector bank, today announced the launch of four new mobile banking applications that facilitate basic transactions over mobile phone.

The ICICI Store app will enable customers to view all mobile apps of ICICI Group under one app, while another app allows customers to initiate a transaction before visiting a branch, connect with a service executive over video call and view their transactions over the last 30 days on their mobile phones, the bank said in a statement.

The new apps are available for download on Google Play store and shall shortly be available on the Apple app store.

In June, ICICI Bank had touched Rs. 1000 crore worth of mobile banking transactions in a month, the statement said.

Among the mobile apps, the Insta Banking app will facilitate customers to process desired transactions any time, up to seven days prior to visiting the branch.

When the customer visits a branch to complete the transaction, it will be executed on priority. Transactions such as cash deposit, cash withdrawal, request for demand draft, updation of personal information like communication address, PAN and email id, among others can be executed.

On the other hand, the Video Banking app will enable the bank’s wealth and NRI customers to carry out a video chat with the customer care, while the mPassbook app helps customers to view their recent savings, credit card and PPF account transactions on their mobile phone itself without the Internet services, the bank said.


Source : The Hindu

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State-run banks need $37 billion in fresh capital to meet Basel III norms: Moody's

Rating company Moody's has said that capital requirement for government owned Indian banks may rise to 8% to $37 billion as the economic recovery could raise the demand for loans. It would be difficult for banks to raise the needed capital if the economic reforms do not lead to lower government's holdings in banks.

Assuming a moderate recovery in economic growth and a gradual decline in new non-performing loans (NPLs), Moody's has estimated that rated public-sector banks in India will need to raise Rs 1.5 - Rs2.2 trillion ($26 - $37 billion) in Tier 1 capital externally between FY'15 and full implementation of Basel III in FY' 19. The estimate is equivalent to 42%-61% of public-sector banks' aggregate market cap (as of 12 September 2014), the ratings firm has norm. Basel II are the new capital norms prescribed for banks globally by the Bank of International Settlements head quartered in Basel, Switerland.

A study by the ratings firm of the banks it rates noted that in the three years between FY'11 and FY'14, annual loan growth at rated public-sector banks averaged 18%, while pre-provision income declined to 2.6% of risk weighted assets or RWA from 3.3% of RWA. " Weak asset quality has depressed public-sector banks' profitability and ability to generate capital internally, leaving them reliant on periodic capital injections from the government." Moody's said in a release.

The implementation of Basel III requirements will raise the minimum required capital levels for both total Tier 1 and Common Equity Tier 1 (CET1) capital. By March 2015, the minimum Tier 1 capital ratio will increase to 7.0% while the minimum for CET1 capital will rise to 5.5%. In addition to these minimum requirements, a Capital Conservation Buffer (CCB), needed for banks to pay dividends, will be phased in starting from March 2016. As a result, the total Tier 1 capital required to meet transitional minimum requirements and the transitional CCB will exceed the current 8.0% Tier 1 target by FY2017.

Injections of public money will provide some support, but there are constraints as the new administration under prime minister Narendra Modi looks to reduce the country's budget deficit. Banks could use the listed equity markets to raise capital, but current valuations may limit the feasibility of raising large amounts of money through this avenue. Even after hopes for the new government boosted Indian stock prices by more than 30% in the past six months, most Indian public-sector banks  still trade at a discount to their book value, Moody's said.


Source : Economic Times

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ICICI Bank says 5% of total transactions done via mobile phone

Amid reservations expressed by the Reserve Bank on slow pick-up of mobile banking, country's largest private lender ICICI Bank today said it is witnessing a huge growth in adoption and the stream now constitutes for up to 5 per cent of overall transactions.

"We are witnessing a three times growth on a year-on-year basis on mobile transactions. They account for 7-10 per cent of the total digital channel and are growing in multiples," bank's head of digital channels Abonty Banerje told reporters.

She said the digital channel, including mobile and the Internet, accounts for over half of its overall transactions at present, and is expected to grow much more. The bank said that over 2 million of its customers are active users of its various mobile apps for transacting with the bank.

Last week, RBI deputy governor HR Khan had chided lenders for being lax about the cost-effective ways of transacting.

"If you see the data, it is growing but not the way it should be catching up...we still do not have proper usage. There is an active need for collaboration between the bank and telecom companies," Khan had said at an industry summit here.

The city-based bank today launched four new mobile applications, including one that enables its wealth and non-resident Indian customers to video chat with an executive for resolving banking queries and get information related to products.

"With these new mobile banking applications, we will offer our customers a unique and unparallelled experience in their banking interaction. I believe these apps will further propel growth of mobile banking," bank's Chief Executive and Managing Director Chanda Kochhar said in a statement.

The bank also launched a dedicated app through which a customer can "pre-process" a transaction and then visit a bank, through which she saves time at the bank branch, Banerjee said.

Customers can carry out many transactions, including cash deposits and withdrawals, request for demand drafts, updating personal information like communication address, PAN and email id among others, through the app.

It also launched a store which will act as an aggregator of all the mobile applications of the ICICI Group for customer convenience.

Source : Economic Times

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Federal Bank launches new version of e-passbook

Federal Bank on Friday said it has launched a new version of its electronic passbook called ‘FedBook’.

Customers can now monitor their loan accounts, keep track of their cheques and view their deposit accounts with ease, the old generation private sector bank said in a statement.

The new version of FedBook, among others, provides the account holders with the current balance, interest rate, loan period, installment amount, due date of remittance, amount due of their various loan accounts on their cell phones.

In the case of deposit accounts – Recurring and Fixed Deposits, Deposits with re-investment plan (Cash Certificates) -- the opening balance, latest balance, interest rate, date of opening, maturity date, and period of deposit can be viewed, the statement said.

The application can also provide the full list of deposits of the customer sorted in the order of maturity.

Source : The Hindu

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ING Vysya Bank makes changes in senior management

South-based old private sector lender ING Vysya Bank announced changes in its senior management across retail banking, IT, audit and operations.

The bank appointed Ashok Rao B as Chief operating officer with effect from October 1, 2014, and Ambuj Chandna as Chief Distribution Officer in Retail Liabilities effective October 13, 2014, the bank said in a statement.

In addition, Sonalee Panda will be Chief marketing officer and Anantha Raman to be Chief Auditor.

Current Country head – Branch banking, Marketing and Private Client group, Brett Morgan and head of operations A Meenakshi will pursue opportunities outside the bank, the bank said.

Shailendra Bhandari, MD & CEO, said, “I am pleased to announce the changes in the leadership team. This is in line with the bank’s philosophy to groom internal talent. Keeping in mind our ambitious growth plans, we continue to develop our leadership pipeline with job rotation, stretch assignments and international exposure.”

Source : The Hindu

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RBI cautions banks on misuse of Jan Dhan Yojana scheme

The Reserve Bank warned the banks to be more careful while opening accounts under the Jan Dhan Yojana, saying that a single individual could open multiple accounts in the lure of Rs. 1 lakh insurance cover.

“There are some caveats when the banks are implementing the financial inclusion scheme under the recently launched Jan Dhan programme,” RBI Executive Director P Vijay Bhaskar said at a CII seminar.

He said people could open accounts in different banks using different identity documents like PAN card, Aadhar among others in the lure of getting insurance cover of Rs. 1 lakh from all the banks.

The banks should have a single information sharing system by which this possible misuse could be stopped.

Another possible threat was ‘smurfing’, the RBI official said.

In this case, hawala operators would split the whole amount into several small units beyond the threshold using several bank accounts and send money overseas.

The last was ‘money mules’ by which an individual would operate through another person’s bank account.

Talking about the north—eastern region, he said the SLBCs and the SLCCs should take steps to improve the credit—deposit ratio of the region as the CD ratio was much lower than the national average.

Earlier this week, RBI Governor Raghuram Rajan had cautioned banks on the risks involved in just hunting for numbers with regards to Jan Dhan scheme, asking them not to compromise on core objectives of the programme.

“When we roll out the scheme, we have to make sure it does not go off the track. The target is universality, not just speed and numbers,” Rajan had said.

Source : The Hindu

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Now, SBI’s education loans come with credit cards

State Bank of India is offering credit cards along with education loans to students to stay connected with them and to keep bad loans down.

India’s largest bank is expecting the usage of the credit card and payment of dues by students to build up credit history, giving it a clue on the borrower’s credit behaviour.

SBI Chairperson Arundhati Bhattacharya said, “We were having a lot of non-performing assets (NPAs) in education loans. So, now we have created a credit card along with the education loans.”

The credit card has a credit limit of Rs5,000 which is guaranteed by the parent, she added.

“Now what happens is the child starts using the credit card. He learns to use the credit card and repay the loan. And also, through the credit card we remain connected with him,” said Bhattacharya.

She pointed out that earlier once the bank gave the education loan it was no longer in the scene and the student forgot all about the bank. “But if there is a credit card, there is a monthly bill, so we remain connected with that person,” said the SBI chief.

And even when the student-borrower completes his education and takes up a job, the bank hopes that he/she will continue to use the card. “So, we can continue to track him. And in the meanwhile, he is building up a credit history which will enable use to give credit once he goes into a job,” said Bhattacharya.

As at June-end 2014, SBI had an education loan portfolio of Rs14,945 crore, up 7.21 per cent year-on-year.
Overdraft facility

Meanwhile, parents, who open accounts under the bank’s two recently launched savings bank products for children, can avail themselves of an overdraft to the extent of the child’s fee and repay it in six months.

“Now we thought that this is a good thing to do because many schools are insisting on upfront payment either every quarter or twice a year. This becomes a major burden on parents because the school fees have gone up,” said Bhattacharya.

Source : The Hindu

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Jan Dhan scheme may not bring much ‘dhan’ to public sector banks

People who have moved to the Capital from villages across the country to earn their livelihood, as household help and drivers, do not have any documents to show residence proof or even an Aadhar card for identity purpose. This makes it tough for them to benefit from the Pradhan Mantri Jan Dhan Yojana (PMJDY).

And public sector banks are also facing challenges, albeit of a different kind. The banks are staring at a hole in their balance sheets as the scheme gathers steam.

They hope that the Centre would soon start channelising the direct benefit transfer (DBT) payments to these accounts, paving the way for them to earn some revenues via commissions.

The problem is that banks in the Capital – despite the push for financial inclusion – do not think it is worth their while to do business with people from lower socio-economic backgrounds. To make matters more difficult, banks want them to bring about Rs2,000 as initial deposit before opening a Jan Dhan account. At the latest count, the number of PMJDY accounts have crossed the 4 crore mark.

“There is clear intent to ride the DBT benefits through these accounts. But, the real issue is when this will actually become a reality. Till then, the public sector banks have to bear the burden,” said a chief executive of a public sector bank.

Apart from the operational costs involved, a big chunk of the spend will go to payment of salaries for the business correspondents (BC). To ensure the success of this scheme, the Finance Ministry has also decided to increase the salary payments for BCs to Rs5,000 per month. 

If we assume a BC force of 5 lakh persons, then the annual salary bill for the banks will be around Rs3,000 crore. Now, the moot question is whether the PMJDY accounts will earn sufficient returns to offset the increased BC salary payout for the banks.

Of course, one could always argue that the BCs will not end up servicing only PMJDY accounts.

But, the real issue is that banks see only costs getting saddled on them upfront due to financial inclusion drive, without any near-term revenues in sight. Also, the float money that they will enjoy from these “basic accounts” are not going to be much, going by the early trend.

For the roughly 4 crore Jan Dhan accounts that have been opened, the total value of deposits received by banks is about Rs3,500 crore. Once all the initially targeted 7.5 crore PMJDY accounts are opened, the maximum float money is expected to be around Rs8,000 crore.

So the annual earnings by banks from the float money will be about Rs1,000 crore, lower than the estimated operational costs. The only thing that could change the economics for the banks will be early routing of DBT monies to the accounts.

The Finance Ministry wants to ensure that no-frill account holders don’t rush to open PMJDY accounts just to get privileges of free accident cover of Rs1 lakh, free life cover of Rs30,000, overdraft facilities and a RuPay debit card.

It has now announced that even existing bank accountholders will be entitled for the benefits of RuPay debit cards, insurance and overdraft facilities currently associated with Jan Dhan benefits.

The same benefits will also now be extended to the accounts opened by cooperative banks, Anurag Jain, Mission Director for PMJDY, had recently said.

“Duplication is bound to happen. Most public sector banks don’t have the systems to check this — especially in interior India,” a chief executive of a public sector bank said.

Source : The Hindu

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Vijaya Bank may delay fund-raising plan

Vijaya Bank may postpone plans to raise funds for its tier 1 and tier 2 capital requirements, “as the market condition is not really conducive at present”, said V Kannan, Chairman and Managing Director.

The public sector bank is waiting for the opportune time to raise ₹600 crore through Qualified Institutional Placement (QIP) for its tier 1 capital requirement and to mop up ₹500 crore through bonds for its tier 2 capital.

The bank was earlier planning to raise Rs600 crore in October, but it may wait for some more time for the market to be better, he said.

The bank has obtained necessary approvals for the fund-raising plans. Though the bank is adequately funded for the current year, it may have to raise capital for the next year, considering the growth in business, said Kannan.

It hopes to grow 17 per cent this year. He was in town to deliver the P Brahmayya Memorial Lecture, organised by the Institute of Chartered Accountants of India.

In the lecture, he said while the technology has brought in major revolution in the working system of the banks, the fundamental aspects of banking, which is the trust and confidence of the people, remains the same. Also, there is a need to relook at the way companies and individuals are funded by banks, coupled with the need for improving the asset quality.

The reasons for default by the customers are both external, which are to an extent uncontrollable, and also controllable factors such as higher leverage by the customers, bad management of funds and wilful defaults.

“In recent years, there has been an increase in the amount of debt restructured under the CDR mechanism. This calls for radical overhaul of the risk management practices by banks,” Kannan added.

Source : The Hindu

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AIBOC asks banks to recover NPAs from corporate houses

The All-India Bank Officers’ Confederation (AIBOC) has urged the banking industry to adopt stronger measures to recover NPAs (non-performing assets) from corporate houses.

Addressing the members of Corporation Bank Officers’ Organisation (CBOO) in Mangalore, Y Sudarshan, President of AIBOC, said some corporate houses were evading the recovery process through their influence in political circles.

The recent setback in the performance of some banks was due to the huge corporate loans that have become NPAs. He stressed the need for support from the government and the RBI in enforcing the security that are available for realisation of dues from corporate houses.

Wage revision

On the wage revision in banking industry, he said the rank and file in the banking sector have been waiting for the conclusion of 10th bipartite for last two years. The Indian Banks Association has not been able to come with a reasonable offer. The settlement would be elusive unless there is a reasonable, fair and equitable compensation revision for the officers’ fraternity, he said.

On the security of workforce, he said AIBOC has sought the intervention of the Centre for extending safety and security to those working in difficult centres. The recent incidents of kidnapping of some innocent people by militants in the North East have created a fear psychosis among the workforce, he said.

DN Prakash, President of CBOO, was present on the occasion.

Source : The Hindu

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Andhra Bank launches 2000th ATM in Hyderabad

Andhra Bank has firmed up plans to open 450 new branches across the country during this financial year, according to its Chairman and Managing Director, CVR Rajendran.

He was speaking to newspersons after inaugurating the 2000th ATM of the bank in the Punjagutta area of the city along with a customer service kiosk. Customers can open accounts, link Aadhar numbers and do transactions from the facility.

The Bank, now a lead bank for Andhra Pradesh has leveraged technology to expand its facilities. The pioneer in credit cards, it opened the first ATM at Saifabad in Hyderabad in 1998, he said.

Along with ATMs, self cash depositing machines, pass book printing kiosks are installed to make all the basic banking services available to the customers round the clock.

The customer service kiosk has trained personnel, who will guide customers to open accounts, link Aadhar, do transaction with online as well as deposit and withdraw cash, said G Ravi Kumar, General Manager.


Source : The Hindu

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South Indian Bank appoints V G Mathew as new MD & CEO

Private lender South Indian Bank has appointed V G Mathew as its Managing Director and Chief Executive Officer for three years.

“...the Reserve Bank of India has conveyed their approval for appointment of V G Mathew as MD & CEO of the Bank for a period of three years,” the bank said in a filing to the BSE.

Mathew’s appointment will come to effect from October 1, 2014.

He was the Executive Vice President of the bank earlier.

For the quarter ended June 30, the bank had posted net profit of Rs. 126.65 crore, up from Rs. 114.84 crore over the corresponding period a year ago.

Source : The Hindu

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Bank unions extend a cautious welcome to Jan Dhan Yojana

The United Forum of Bank Unions (UBFU) has extended a cautious welcome to the Jan Dhan Yojana that aims to extend banking facilities to the unbanked people.

Its views were conveyed to the Indian Banks’ Association (IBA) during the latest round of bipartite talks for wage settlement.

FRAUDULENT ACCOUNTS

But the UBFU expressed the fear that ‘compromises’ on KYC norms might lead to opening of fraudulent accounts for which employees should not be held accountable.

It also conveyed to the IBA that the pressure due to targets stipulated for opening of accounts were affecting delivery regular services to customers in significant manner.

Due to the stipulation on timings for opening of accounts from 8 a.m. to 8 p.m., employees had to stay back beyond their working hours. The UFBU demanded that these matters needed to be duly addressed.

On the wages issue, the IBA insisted that the unions review their demand of a 25 per cent increase in payslip components since it was ‘beyond the paying capacity of banks.’

FLEXIBILITY ASSURED

To this, the UBFU responded by saying that the IBA may ‘substantially increase’ its offer of 11 per cent increase in the payslip components.

It also demanded that issues such as regulated working hours, five-day banking, and improvements in pension-related matters should simultaneously be discussed in a time-bound manner.

Also, negotiations need to be held at frequent intervals for an expeditious settlement of issues.

The UBFU extended a promise that it would be flexible in its demands depending on the response of IBA on all these matters.

IBA assured to schedule the next round of meeting within one week for comprehensive discussion on all the issues.

CLARIFICATIONS SOUGHT

The UFBU thanked the IBA for securing Government clearance for the resumption of the compassionate appointment scheme.

But it sought clarifications on issues like eligibility, applicability with regard to death cases prior to August 8, 2014, which the IBA assured to obtain from the Government and advise the unions thereafter.

Another round of bipartite talks between Indian Bank’s Association and the United Forum of Bank Unions was held in the afternoon yesterday preceded by a meeting of UFBU in the morning.

Rajeev Rishi was introduced as the new Chairman of the IBA negotiating team. He replaced TM Bhasin, who has been elevated as Chairman of IBA.


Source : The Hindu

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