Cap of 3 free ATM transactionsmay apply in cities near metros

If you are staying in a city abutting one of the six metros then you may not get to enjoy the convenience of five free transactions a month at other bank ATMs in the city of your residence.

Reason: banks are planning to consider cities lying on the outskirts of the six metros as part of the metros and rationalise the number of free transactions (from five to three per month) with effect from November 1.

In August, the RBI had identified six metros — Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad — for the purpose of rationalisation of the number of free transactions for savings bank account customers at other banks’ ATMs.

The central bank also said that at other locations — other than the six metro centres mentioned above — the present facility of five free transactions for savings bank account customers will remain unchanged.

This reduction will, however, not apply to small / no frills / Basic Savings Bank Deposit account holders, who will continue to enjoy five free transactions.

With the RBI asking banks to determine the jurisdiction of the six metros, bankers are of the view that since cities on the periphery of the metros have also seen proliferation of ATMs such areas too should be included within the jurisdiction of metros.

Uniformity in application

According to a senior State Bank of India official, banks are jointly drawing up jurisdiction of the six metros to ensure that there is uniformity in the applicability of free transactions at other bank ATMs.

What this could mean is that for the purpose of rationalising the number of free ATM transactions Thane and Navi Mumbai will be considered as coming under the jurisdiction of the Greater Mumbai urban agglomeration (metro).

Similarly, Gurgaon, Ghaziabad, Noida and Faridabad will be considered as coming under the Delhi urban agglomeration; and Howrah, North and South Paraganas under the Kolkata urban agglomeration.

According to National Payments Corporation of India (NPCI) data, as at September-end 2014, the number of ATMs in the country stood at 1,80,494. Of these, about 97 per cent belonged to direct member banks of the Corporation’s National Financial Switch. 

Source : The Hindu

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Axis Bank cuts base rate by 10 bps to 10.15%

Axis Bank, India’s third largest private sector bank, has cut its base rate to 10.15 per cent from 10.25 per cent per annum.

The move comes against the backdrop of ample liquidity in the banking system and tepid credit growth.

The new base rate is effective from October 15. Base rate is the minimum lending rate below which banks cannot lend.

The bank said the cost of funds has eased due to more liquidity and this has helped to reduce interest rates.

Following the reduction, the effective rate applicable to loans linked to this rate will be reduced by 10 basis points, the bank said in a statement. One basis point is one hundredth of a percentage point.

However, peer private banks ICICI Bank and HDFC Bank, continue to have the lowest base rate of 10 per cent.

Amid comfortable liquidity and low credit demand in the market, several banks, including the country’s largest lender State Bank of India, have been reducing their bulk and retail term deposit rates in select maturity buckets.

Axis Bank shares closed marginally weaker at Rs393.90 a share on the BSE on Thursday.

Source : The Hindu

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Jan Dhan accounts cross 6 crore mark

The number of bank accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have crossed the 6 crore mark, Financial Services Secretary GS Sandhu has said.

The total savings deposits in these accounts stood at about Rs. 4,500 crore till date, Sandhu said at TIEcon Delhi 2014 event in the capital here on Friday.

srivats.kr@thehindu.co.in

Source : The Hindu

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Andhra Bank opens account for AP cyclone relief donations

The Andhra Pradesh Government has opened an exclusive account with Andhra Bank for collecting donations for providing relief to those affected by cyclone Hudhud in Visakhapatnam, Vizianagaram and Srikakulam districts.

The account is CM Relief Funds (AP Cyclone Relief) bearing the number 110310100029039 in Andhra Bank’s AP Secretariat branch. The IFSC code is ANDB 000 1103. For foreign remittances the Swift code is ANDBINBB.

``The donations will be accepted in all branches of Andhra Bank in the form of cash/ cheques without any charges,’’ G Ravi Kumar, General Manager, Andhra Bank, said in a release. The remittances could also be made through RTGS/ NEFT.

Source : The Hindu

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Lakshmi Vilas Bank Q2 net profit up at Rs. 31.5 cr

Lakshmi Vilas Bank reported an over four-fold rise in net profit to Rs. 31.50 crore for the second quarter ended September 2014-15 on account of a decline in bad assets and lower provisioning.

The private sector lender’s net profit was Rs. 5.85 crore during July-September of the last fiscal.

The total earnings of the bank in Q2 2014-15 rose to Rs. 617.84 crore, up from Rs. 536.76 crore in the year-ago period, Lakshmi Vilas said in a filing to the BSE.

Provisions and contingencies were trimmed to Rs. 50.89 crore in the second quarter 2014-15 over Rs. 74.63 crore in the previous fiscal.

Net non-performing assets (NPAs) or bad loans came down to 2.78 per cent in Q2, from 3.77 per cent a year ago. Gross NPAs reduced to 3.72 per cent from 5.22 per cent.

Lakshmi Vilas Bank shares were trading at Rs. 76.35 apiece on the BSE, up 1.33 per cent from the previous close.

Source : The Hindu

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IRDA forms working group on Companies Act

The Insurance Regulatory and Development Authority (IRDA) has constituted a working group on harmonising its corporate governance guidelines and disclosures with the Companies Act 2013.

R. K. Nair, Member (F&I), IRDA, has been appointed as Chairman of the group with 11 other members, including C. S. R. Sridharan, President, ICSI; V. Manickam, Secretary-General, Life Insurance Council; and Kurush J Daruwalla, representative of the General Insurance Council, among others.

The terms of reference of the group include recommending changes to insurance regulations in the light of the Companies Act, especially on corporate social responsibility, related party transactions and financial statements, composition of the board and provisions related to independent directors and remuneration of CEOs, managing directors and whole-time directors.

The group should submit its report within four months, according to a circular issued by IRDA Chairman T S Vijayan.


Source : The Hindu

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Axis Bank Q2 net profit up 18%

Axis Bank, country’s third largest lender, reported an 18 per cent increase in net profit during the three-month period ending September, 2014, at Rs. 1,611 crore.

The net profit was at Rs. 1,362 crore in the same quarter a year ago.

Net Interest Income (difference between interest earned and expended) rose 20 per cent to Rs. 3,525 crore during Q2FY15 from Rs. 2,937 crore during Q2FY14.

Other income grew by 10 per cent at Rs. 1,948 crore as against Rs. 1,766 crore in the second quarter last year.

As on September 30, 2014, total advances grew 20 per cent year-on-year to Rs. 2.42 lakh crore on the back of retail advances growth of 27 per cent. On the other hand, total deposits increased 11 per cent to Rs. 2.84 lakh crore from Rs. 2.55 lakh crore.

The bank’s gross non-performing assets (NPAs) worsened to Rs. 3,613 crore as on September end, 2014 as against Rs. 2,734crore as on September 30, 2013. Recoveries and upgrades were at Rs. 164 crore and write-offs were Rs. 597 crore.

As on 30th September 2014, Gross NPAs increased to 1.34 per cent (from 1.19 per cent) and net NPAs also deteriorated to 0.44 per cent (from 0.37 per cent).

The cumulative value of net restructured advances as on September 30, 2014 stood at Rs. 6,690 crore, constituting 2.52 per cent of net customer assets.

Axis Bank shares ended at Rs. 401.95 per share, higher by 2.04 per cent over the previous close on the Bombay Stock Exchange. The results were declared after market closing hours.


Source : The Hindu

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Andhra Bank chief hits the streets to boost biz

In a novel move, a public sector bank chief went from shop to shop in a business area in a marketing campaign.

CVR Rajendran, Chairman and Managing Director, Andhra Bank, along with a team of officials, undertook the exercise, covering over 350 shops/business establishments in a commercial area in Hyderabad.

“We have launched a shop-to-shop campaign to market credit and current account facilities among businesses. But as some staff were either shy or slow, I told them I would also join them, and we almost covered every shop, over two hours,” said Rajendran in a chat with BusinessLine.

Andhra Bank plans to continue this marketing initiative in important business centres in major cities/towns involving both top executives in the general manager cadre and lower-rung officials.

Survey too

The campaign also doubled up as a customer survey as every businessman was asked details of his bank account, what he expects from his banker, and so on.

“We have got very good feedback. I understand that most of them have accounts with private banks because of the facilities they were offering long back. But now, public sector banks like Andhra Bank also offer them, which has to be communicated to them properly,” he said. Another takeaway was the need for cash-swiping machines (point-of-sale terminals) for businessmen, he said. The bank has decided to focus on this unmet need by providing the machines to the shop-owners.

Cash flow

It was noticed that the day-to-day cash-flow from unorganised business establishments is weak as many a bank’s working hours are not conducive.

Andhra Bank sees good scope in this segment by ramping up its cash-deposit machines in select shop.

“We have ordered 1,200 machines and 120 have already arrived. We will be installing them on a priority basis,” Rajendran said.


Source : The Hindu

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Federal Bank gets IDRBT award

Kerala-based Federal Bank has won the IDRBT Banking Technology Excellence award for 2013-14 in four out of total five categories in the mid-sized lenders segment.

Federal Bank was adjudged as the ‘best bank’ for use of Technology for Financial Inclusion, Social Media and Mobile Banking, Business Intelligence Initiatives and for Best IT Team.

With this, Federal Bank has won the maximum number of awards this year, the bank said in a statement.

The awards were presented to the winners at a function held in Hyderabad on October 1. Shyam Srinivasan, Managing Director and CEO, received the awards from RBI Governor Raghuram Rajan.

Instituted in 2001, the IDRBT Banking Technology Excellence Awards recognise and honour the best innovative use of information technology to enhance the levels of customer service.

Source : The Hindu

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Axis Bank cuts base rate by 10 bps to 10.15%

Axis Bank, India’s third largest private sector bank, revised its Base Rate to 10.15 per cent per annum from 10.25 per cent per annum with effect from October 15, 2014.

The bank said the cost of funds has eased for the bank due to more liquidity with the bank which has helped reduce interest rates.

Accordingly, the effective rate applicable to loans linked to the bank’s Base Rate will reduce by 10 basis points, the bank said in a statement.

Sidharth Rath, President (Treasury, Business Banking & Capital Markets), Axis Bank said “The Bank has reduced the Base Rate by 10 bps, as the cost of fund has eased due to softening of interest rates based on improving liquidity and other macroeconomic developments."

Source : The Hindu

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Federal Bank Q2 net up at Rs. 240 cr

Old private sector lender Federal Bank has posted a 6 per cent increase in net profit in the July to September period at Rs. 240 crore helped by non-interest income.

The net profit was at Rs. 226 crore in the year-ago period.

The profit was limited due to higher provisions, which increased to Rs. 169 crore, up 50 per cent, from Rs. 113 crore in the corresponding quarter a year ago.

The Kerala-based bank’s net interest income (NII) or the difference between interest earned and expended, grew 10.5 per cent to Rs. 606 crore from Rs. 548 crore in the second quarter last year.

Non-interest income jumped 37 per cent to Rs. 196 crore in Q2FY15 against Rs. 143 crore in Q2FY14.

Net Interest Margin (NIM) improved marginally to 3.35 per cent as on September end this year from 3.3 per cent as on September end in the previous year.

As on September end 2014, net advances increased 15 per cent year-on-year to Rs. 48,466 crore from Rs. 42,220 crore as on September 30, 2013. Total deposits increased 14 per cent to Rs. 64,564 crore from Rs. 56,794 crore.

Gross non-performing assets (NPAs) improved to 2.10 per cent of total advances from 3.39 per cent.Net NPAs also lessened to 0.66 per cent from 0.98 per cent.

Post results, shares of Federal Bank were trading down 3.57 per cent at Rs. 133.75 per share on the Bombay Stock Exchange.

Source : The Hindu

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Bill to split CMD’s post in banks likely in winter session

The Finance Ministry is likely to move a Bill in the Winter Session of Parliament to amend the Banking Regulation Act, 1949, for splitting the post of Chairman and Managing Director in banks.

The move aims at ushering in better governance and greater transparency in the public sector banking system. A senior Finance Ministry official said the Cabinet is expected to consider the amendments soon, after which a Bill would be prepared. This is the second key development in the banking sector after the ‘work in progress’ for a new Monetary Policy Framework Agreement.

Finance Ministry officials said once the proposals for splitting the top post are in place, new opportunities may open up for retired bureaucrats to be appointed as Chairman, while the CEO or Managing Director would come from the banking industry. The proposal to split the post comes at a time when serious governance issues are being raised following the Syndicate Bank bribery case, leading to the termination of its CMD, SK Jain.

At present, private sector banks have separate Chairmen and Chief Executive Officers. But, among public sector banks, only State Bank of India has an Executive Chairman and four managing directors. SBI’s five associates are led by managing directors, while the SBI Chairman heads all these. Public sector banks, such as Punjab National Bank, Bank of Baroda (headless at present) and Union Bank, among others, have a single post of CMD. After the CMD, large banks have three executive directors, while the others have two.

Panels’ recommendations

Two Reserve Bank of India panels, headed by AS Ganguly in 2002 and PJ Nayak in 2014, had recommended separation of the post. The Ganguly-led panel had suggested that it would be desirable to separate the office of CMD in respect of large public sector banks.

“This functional separation will bring about more focus on strategy and vision as also the needed thrust in the operational functioning of the top management of the bank,” it said.

The Nayak Committee had suggested separation of the positions of bank Chairman and CEO. The Chairman should be non-executive, it said, suggesting a minimum five-year tenure for the Chairman and three years for Executive Directors.

However, whether the Finance Ministry will make a provision of a minimum tenure for key officials post-bifurcation of the CMD’s post, remains to be seen.

Source : The Hindu

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DCB Bank raises Rs. 250 cr through QIP

DCB Bank (formerly Development Credit Bank) raised about Rs. 250 crore of Tier I Capital through a recently concluded Qualified Institutions Placement (QIP).

The Board of Directors of DCB Bank has approved the issue and allotment of 30,432,136 equity shares of face value Rs. 10 each to eligible qualified institutional buyers (QIBs) at the issue price of Rs. 82.15 per equity share, aggregating to approximately Rs. 250 crore.

In a notice to BSE and NSE, the DCB Bank said consequent to the issue and allotment of the equity shares to the QIBs, its paid-up equity share capital stands increased to INR 281,20,63,580 divided into 28,12,06,358 equity shares of face value of Rs. 10 each from the pre-QIP paid-up equity share capital Rs. 250,77,42,220 divided into 25,07,74,222 equity shares of face value of INR 10 each.

As of June 30, 2014, DCB Bank’s Capital Adequacy Ratio (CAR) was 13.63 per cent (of which Tier I Capital was 12.77 per cent and Tier II at 0.86 per cent as per Basel III norms). This does not consider the impact of the QIP.

As a result of the QIP the shareholding of DCB Bank’s promoter will be reduced to approximately 16.43 per cent from 18.45 per cent as of June 30, 2014.

Murali Natrajan, Managing Director & CEO of DCB Bank said, “The capital raised will certainly help DCB Bank execute plans for growth in the near future. We are mindful of the responsibility to ensure secure and stable growth of the Bank.”


Source : The Hindu

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Reserve Bank to keep open public counters for coins exchange

The Reserve Bank of India has clarified that it would not ‘in the foreseeable future’ close down its public counters which distribute coins/currency to the general public, including traders.

The RBI Governor has extended an assurance to this effect to the United Forum of Reserve Bank Officers and Employees, according to Samir Ghosh, Convenor.

Policy reversal

This amounts to a reversal of contentious policy announced in 2012-13, Ghosh told BusinessLine. The United Forum had protested this, and had demanded that the counters be retained in public interest.

Associated with regional and other offices, these counters handle as much as 90- 95 per cent of the exchange of notes and coins.

According to Ghosh, the Governor also responded positively to the Forum’s concerns relating to organisational restructuring and lateral recruitment during a recent meeting in Mumbai.

It has been agreed that merger of officers’ cadre will be resorted to prospectively and only for new recruits from year 2015.

Postings would be planned in such as way that they would not alter the seniority or career progression of officers/employees. The existing system of seniority and order of promotion would be followed.

Similarly, status quo would be retained with respect to postings of Regional Directors and Principals of staff colleges.

Officers would be allowed to opt for selection to departments/area of work, according to their choice/skill ‘on an experimental basis.’

This would lead to better skill development, job satisfaction and better utilisation of human resources. The Governor has also agreed to redress any inconvenience or mismatch that may arise in the course of implementation of the new proposals.

Not justifiable

But the United Forum did not agree with the proposal to create two additional posts of Executive Directors and one post of Deputy Governor/Chief Operating Officer as part of restructuring and clustering. The apex bank could instead consider creation of four additional posts of Executive Directors for the four metros to take care of zonal interests, Ghosh said.

The United Forum was of the view that the current volume of work did not justify such accretions to staff at high levels while the base level was shrinking.

The staff strength had reduced from around 40,000-plus in the mid-90s to 17,500 now, Ghosh said.


Source : The Hindu

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SBI links free ATM usage to balance, branch visits

The country's largest lender State Bank of India (SBI) has reviewed its ATM usage charges, allowing more free transactions to those who avoid visiting its branches, and unlimited transactions for those with large balances.

In its latest directive on ATM charges applicable from November 1, SBI said that it will limit the number of branch withdrawals to four a month for those maintaining balances of up to Rs 25,000.

For customers maintaining an average monthly balance of Rs 25,000 and above, the bank will provide unlimited usage of its own ATM network, but will limit access to third-party ATMs to three transactions a month. The bank will also increase the number of free transactions on its home network from five to nine if the customer does not visit a branch during the month.

For those who maintain average balances of over Rs 1 lakh, the bank will provide unlimited access to all ATMs across the country. However, those customers whose balances are less than Rs 25,000 will face the limit of five transactions on their home bank ATMs and three transactions on other banks' machines. Those who exceed the limit will pay Rs 5 per transaction at SBI's ATMs and Rs 20 at machines belonging to other banks.

The new charge structure follows an RBI directive that allowed banks to reduce the number of free ATM transactions on their own networks and other bank's networks to five and three respectively. The limits are applicable only in six major cities — Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. Elsewhere, the earlier limit of five free transactions will continue.

SBI's 12.59 crore cardholders account for 31% of the 40.9 crore debit cards in the country. Its 44,929 ATMs form 27% of the 1.66 lakh machines installed in India and its cardholders are responsible for over 41% of all ATM transactions in the country.


Source : Economic Times

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Citi pulls out of consumer banking in 11 countries, profit jumps

Citigroup Inc said it was pulling out of consumer banking in 11 markets, including Japan and Egypt, as the US bank with the biggest international business looks to cut persistently high costs.

The third-largest US bank, built with a series of acquisitions spanning back to the 1980s, has been trying to slim down since the financial crisis to be as profitable as rivals. It has shed hundreds of billions of dollars of bad assets.

The latest exits were the result of studies the bank began in early 2012 to figure out which countries were not profitable enough for retail banking.

Getting results took a long time, partly because the bank did not have standardised accounting systems across all countries to compare the units' profitability, sources familiar with the matter told Reuters in 2013. A spokesman for Citigroup said the bank has long had systems in place to consistently measure profitability across businesses and geography.

The deliberate pace at which Chief Executive Officer Michael Corbat is fixing its business underscores how hard it is to fix a business as sprawling as Citigroup, which operates in more than 100 countries. Corbat told analysts that in shedding the poorly performing businesses the company is also taking a valuable step toward reducing complexity.

Chief Financial Officer John Gerspach, speaking earlier to reporters, said the bank first identified sub-standard businesses about a year-and-a-half ago and tried to fix them before concluding they had to go.

"Better late than never," said stock analyst Mike Mayo of CLSA.

Citigroup separately announced the results of a probe that also illustrates how hard it is to manage the bank: it found a new $15-million fraud at its Mexican unit, Banamex, which has been roiled by a series of mishaps.

The bank is showing some signs of progress in streamlining itself. On Tuesday, it posted stronger-than-expected third-quarter adjusted net income of $3.67 billion, or $1.15 per share, from $3.26 billion, or $1.02 per share, a year earlier. Profit was boosted by better results from its portfolio of troubled assets left over from the financial crisis.

Its shares rose 3.1 per cent on Tuesday to $51.47.

Adjusted results exclude a tax benefit from last year and accounting adjustments linked to changes in the value of the company's debt.

Analysts had expected earnings of $1.12 per share, according to Thomson Reuters I/B/E/S.

FOCUSING ON EXPENSES

But the bank still has work to do. Expenses at Citicorp, which houses the bank's main businesses, rose 11 per cent, while revenue rose 8 per cent. The increase in expenses came from money set aside to cover expected legal liabilities.

The bank has been trying to rein in its expenses for about a decade. At a meeting with 300 Citigroup executives in February, CEO Corbat stressed the need to focus on expenses and efficiency this year.

Shedding retail businesses in 11 markets may help — stripping out these units would have reduced operating expenses by $1.34 billion over the last year, while reducing net income by only $34 million. The bank said it would exit Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as the consumer finance business in Korea. It will continue to serve institutional clients in these markets.

In December 2012, Citigroup said it was withdrawing from consumer banking in five other countries. After these latest exits, the bank will serve consumers in about 24 countries.

ASIAN EXITS

Citi has previously flagged its reduced ambitions in Asia, where it faces tough competition in developed markets such as Japan and Korea from entrenched local players, and a rising challenge from regional rivals such as Australia's ANZ and Malaysia's CIMB.

Cutbacks in its less profitable Asian markets will help Citi focus on the rest of the region, which reported record revenue of $3.9 billion for the third quarter this year, with profits up 39 per cent on the same period a year ago.

In April Citi said it would close around a third of its branches in Korea, becoming the third global bank to trim its presence in the country after Standard Chartered and HSBC both pulled back.

Citi is screening bidders for its Japan consumer banking business, which includes Diners Club credit card, amid weak loan demand and falling interest margins in a market where the US-based lender has operated for over 100 years.

Four banks — Sumitomo Mitsui Trust Holdings Inc, Sumitomo Mitsui Financial Group Inc, Shinsei Bank Ltd and Mitsubishi UFJ Financial Group Inc — remain on the shortlist of potential buyers after the first round of bidding last month, people with knowledge of the matter said. They said the second round of bidding was likely to take place next month.

The four Japanese banks could not immediately be reached for comment.

Source : The Hindu

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Guidelines on small finance banks in a few weeks: RBI Governor

The Reserve Bank of India will issue guidelines for small finance banks in a few weeks, according to its Governor Raghuram G Rajan.

Speaking at the 10th IDRBT Technology Awards here on Wednesday, Rajan said these small finance banks could cater to small customers across the country.

Referring to payment banks, he said they should tie-up with a regular commercial bank to offer entire range of services.


Source : The Hindu

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Canara Bank keen to extend financial support to budding entrepreneurs

After completing a certification course in tailoring, Hema, 35 and mother of two, sought to cater to the needs of her neighbours. She could not establish a tailoring shop as this required some investment.

“The small money that I made helped buy books for the children, vegetables and at times some stuff for the family,” she said.

Sitting besides Hema was Manjula, who after completing a beautician course was working in a beauty parlour for close to a year.

Both these women were among the 60-odd persons identified by Avinashilingam Jan Shikshan Sansthan at the instance of Canara Bank MSME Facilitation Centre here for collateral free loan to establish a venture on their own.

The MSME Facilitation Centre in Coimbatore is among the five centres mooted by Canara Bank to cater to the needs of the MSMEs in particular. The other centres are located at Hyderabad, Chandigarh, Noida and Mumbai, said the Head of the Coimbatore MSME Facilitation Centre J Vanangamudi.

The Centre here is now in the process of identifying potential candidates who are keen to start their own venture.

“This is only a beginning. We want to create awareness about the schemes available for people who undergo job-oriented skill development programmes to be on their own. While there are a number of skill development training institutes imparting job-oriented programmes, most of the candidates join some company or other to eke out a living, after completion of the course. If those with a business acumen are given some finance assistance, they can start a small venture and grow it over a period of time. This Facilitation Centre will help imbibe confidence by giving finance to the deserving candidates,” Mr Vanangamudi told Business Line.

Canara Bank, which is the Lead Bank in this district also roped in the District Industries Centre (DIC), whose primary objective is to generate employment by promoting MSMEs.

Highlighting some of the Government schemes such as the New Entrepreneur-cum-Enterprise Development Scheme (NEEDS) and Unemployed Youth Employment Generation Programme (UYEGP), DIC General Manager Asokan told the candidates that the Centre (DIC) would support the beneficiaries of State-sponsored schemes by extending 3 per cent back-end subsidy.

He advised the participants against diversion of funds and prompt repayment of loan dues.

The Director of Avinashilingam Jan Shikshan Sansthan Mr Balasubramaniam said that the institute sponsored by the Ministry of Human Resource Development, Government of India had till date imparted training to over 2 lakh candidates in various need-based vocational programmes.


Source : The Hindu

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Bank unions call for strike on November 12 over wage hike

Bank employees have given a nationwide strike call on November 12 to press for immediate resolution of wage hike issue, the talks on which remain stalled.

The United Forum of Bank Unions (UFBU), an umbrella organisation comprising various employee bodies, has given the strike call.

All-India Bank Employees Association (AIBEA) General Secretary C H Venkatchalam said they were forced to give a strike call as Indian Banks Association (IBA) has rejected demand for higher wages and are sticking to their earlier 11 per cent hike citing poor financials of the lenders.

IBA is the representative body of bank managements. UFBU has decided to take out rallies on October 30 in all the state capitals and other centres across the country before observing the strike, Venkatchalam said.

The one-day stir will be followed by relay strikes on December 2 in the South, on December 3 in the North the next day in the West and on December 5 in the Northeast, he said.

AIBEA, with over 5 lakh members, is a major constituent of UFBU.

Venkatchalam warned that if the IBA does not meet their demand, the unions will be forced to take more drastic steps like an indefinite strike.

"We have categorically informed IBA that we will be reasonable and flexible in our approach provided the same is shown by the IBA on the issues raised by us. But IBA is adamant and has refused to improve their offer and stuck to 11 per cent (salary) hike," he said.

The 27 public sector banks have a combined employee strength of about 8 lakh.


Source : Economic Times

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IndusInd Bank to foray into asset reconstruction business

Private lender IndusInd Bank will foray into the asset reconstruction business by funding acquisition of bad assets by asset reconstruction companies (ARCs) and also participate in the reconstruction of these assets.

“We are testing waters in the asset reconstruction business by working with an ARC…So, we will provide the funding and participate in reconstruction of the asset,” its Managing Director and CEO Romesh Sobti told BusinessLine. The Hinduja Group-promoted mid-sized bank has already hired people required to drive the business. “We should begin our first (bad loans) acquisition in a couple of months,” Sobti said.

According to him, because of the availability of well secured assets and ARCs have less capital a bank can enter this space.

RBI norm

In August, in an attempt to strengthen the asset recovery process, the Reserve Bank of India asked ARCs to pay upfront a minimum of 15 per cent of security receipts (issued against the underlying bad loan) as against the earlier 5 per cent. This will require ARCs to invest more money upfront and make the price of the asset more competitive.

“We have chosen the deal-by-deal structure. So, we will collaborate by providing funding to the ARC to acquire (the bad loan) and then can work on the reconstruction of the asset,” he added.

“I get the security receipts and the income that will accrue from the sale of the asset is the IRR (internal rate of return) and the market has seen earning an IRR of about 25-30 per cent. So, let us see,” Sobti said optimistically.

In 2008, peer lender Kotak Mahindra Bank group had floated its ARC unit, Phoenix ARC, in collaboration with a few investors.

Ramnath Pradeep, former CMD of Corporation Bank, in an article in BusinessLine, said, “Banks are better equipped in terms of manpower, knowledge of the borrower and knowledge of the security (assets). On the other hand, ARCs deal with the borrowers for the first time.”

He added that restructuring of loans, on condition that the promoters infuse some capital, can be done without banks incurring much loss. Banks can recover the losses later once the company turns around and/or the economic conditions improve. That has been the time-tested practice in the country. But none of the public sector lenders are seen doing this nowadays.

Loan rejig

In the second quarter of FY15, IndusInd Bank restructured about five bad loan accounts and sold around ₹16 crore of assets to ARCs. According to Sobti, the first quarter saw more sale to ARCs. However, with a drop in referrals to ARCs in Q2, the industry may see a drop in NPAs.


Source : The Hindu

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SBT ‘open house’ tomorrow

State Bank of Travancore (SBT) has decided to conduct an ‘open house’ with customers on 15{+t}{+h} of every month. It will be conducted between 3 and 5 pm at the head office, administrative offices and branches.

The head office will host the ‘open house’ of the month at the Staff Learning Centre Auditorium on Wednesday. Based on suggestions received at the event, the bank will take measures to improve customer service. For details, call 0471-2359324/2192028.


Source : The Hindu

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IndusInd Bank net profit jumps 30% to Rs. 430 cr

IndusInd Bank has reported a 30 per cent rise in net profit at Rs. 430 crore on the back of robust non-interest income and loan growth.

The net profit stood at Rs. 330 crore in the second quarter last fiscal.

Net interest income or the difference between interest earned and expended increased 19 per cent to Rs. 833 crore from Rs. 700 crore in the same quarter last year.

Non-interest income jumped 34 per cent to Rs. 558 crore from Rs. 417 crore.

Source : The Hindu

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Kotak Bank launches Facebook-based instant money transfer

Kotak Mahindra Bank (KMB) has launched KayPay, a bank agnostic payment product for Facebook users to send money to each other in an instant.

Millions of bank account holders can now transfer money to each other at any hour of the day or night, without needing net banking, or knowing various bank account related details of the payee, the private sector bank said in a statement.

KayPay will enable over 25 crore Indian bank account holders to transfer funds to each other instantly by just choosing recipients from their Facebook friends list.

The bank said KayPay offers a safe and secure platform to transact on the social networking site through a two-level authentication – Facebook user id & password and a One Time Password (OTP).

Further, both sender and receiver immediately receive notifications via SMS and on Facebook about the transfer.

As a one-time process, users need to register their existing bank accounts, which participate in the IMPS (Immediate Payment System) P2M Pull platform by National Payment Corporation of India, on Facebook or www.kaypay.com. Currently, KMB is offering KayPay at no cost to users.​

According to Shanti Ekambaram, President – Consumer Banking, Kotak Mahindra Bank, KayPay leverages social media to offer a better and secure payment platform to all.

"The convenience of not having to know payee details breaks down all barriers of a process, which otherwise requires a host of information that one may not necessarily have handy,” she said.

Source : The Hindu

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Union Bank opens 18.4 lakh SB accounts under Jan Dhan Yojana

Union Bank of India has so far opened 18.40 lakh basic savings bank deposit accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY), according to Chairman & Managing Director Arun Tiwari.

The PMJDY, which kicked off on August 15, is a national mission for financial inclusion to ensure that the weaker sections have access to financial services — banking/ savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.

“On an average we have mobilised deposits amounting to about Rs. 950 in each of these accounts opened under PMJDY…

“People are realising the importance of saving money in a bank and earning interest,” said Tiwari on the sidelines of a press meet to announce the launch of the bill payment service through the any bank mobile banking application for MTNL subscribers.

A back-of-the-envelope calculation shows that Union Bank would have mobilised about Rs. 175 crore by way of deposits under the PMJDY.

PMJDY focuses on coverage of households as against the earlier financial inclusion plan (FIP) which focused on coverage of villages. It focuses on coverage of rural as well as urban areas.

The earlier FIP only targeted villages with a population of over 2,000, while under PMJDY the whole country is to be covered by extending banking facilities in each sub-service area consisting of 1,000–1,500 households, such that the facility is available to all within a reasonable distance, say about 5 km. 

Source : The Hindu

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Moody's withdraws LIC's rating for business reasons

Moody's Investors Service has withdrawn the Baa3 insurance financial strength rating of Life Insurance Corporation.

The rating has been withdrawn for Moody's own business reasons, the international rating agency said in a statement.

Headquartered in Mumbai, LIC --which is wholly owned by Indian Government--is the largest life insurer in India.

srivats.kr@thehindu.co.in

Source : The Hindu

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RuPay cards boost e-commerce, says SBI

RuPay e-Commerce has roped in big online merchants such as IRCTC, Life Insurance Corporation (LIC), Flipkart and Snapdeal to facilitate online payments.

RuPay cards’ acceptance has grown to over 15,000 online merchants with having a customer base of 30 million RuPay cards that are acceptable at all ATMs and 9.8 lakh PoS (point of sale) and over 15000 online merchants in the country, said RuPay in a statement.

With this arrangement, RuPay card holders can book train tickets on irctc.co.in, make online payments for LIC premium, shop on Flipkart.com, Snapdeal.com, Homeshop18.com and book movie tickets on Bookmyshow.com. Also, the country’s largest bank- State Bank of India (SBI) has started accepting RuPay cards on its payment gateway. RuPay e-Commerce service was launched in June 2013 with an additional anti-phishing feature for security checks, the statement

“Team-SBI is quite upbeat about the development. State Bank Payment Gateway (PG) facilitates every month, around 1.3 crore Card-Not-Present (CNP) transactions. Addition of RuPay platform will give a further boost to e-commerce transactions. Flipkart is one of our active merchants. Acceptance of RuPay Card for online transactions by Flipkart will add to the transaction flow from their site to our NetBanking and PG”, said B Sriram, Managing Director at SBI.

Sachin Bansal, Co-founder and CEO, Flipkart, said “Payments is a core area of focus for Flipkart. We are constantly looking for ways to expand and improve the payments experience on our site and this initiative with RuPay is an important step in that direction. We look forward to working with SBI and NPCI on more such initiatives that will contribute towards enhancing the payments ecosystem for our customers”.

RuPay scheme aims at addressing the needs of Indian consumer, merchants and banks with benefits attached to it including - lower cost, customized product offering, protection of information related to Indian consumers, electronic product options as relevant to untapped/unexplored consumer segments and Inter-operability between payment channels and products.

A P Hota, MD and CEO, NPCI said, “Acceptance on large merchants like IRCTC, LIC, Flipkart, Homeshop18, Snapdeal and BookMyShow among others marks an important milestone for RuPay ecommerce. Today, 30 million RuPay cards have already been issued in the country. RuPay cards today are enabled at all ATMs across the country, 9.8 Lakhs POS terminals and over 15000 online merchants. It is our vision to touch every Indian with at least one payment mode of NPCI by 2020”

NPCI offers e-commerce solution PaySecure, through which a RuPay cardholder uses ATM PIN to make an online transaction which is easy and quick.


Source : The Hindu

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Andhra Bank okays Rs. 50 cr spot loans in property show

Andhra Bank has sanctioned Rs. 50 crore spot loans to over 250 prospective home and vehicle buyers in its mega property show which concluded here on Sunday.

``In addition, we have got business leads for over Rs. 200 crore during the two-day event,’’ G Ravi Kumar, General Manager, Andhra Bank, Hyderabad zone told Business Line here.

The number of visitors as well as business exceeded expectations of bank officials. The bank expected about 5,000 visitors while 10,000 visited the expo. Similarly, it was expecting to get a total business of Rs. 100 crore but now, it could be over Rs. 250 crore including the leads generated.

Over 30 builders and all major four-wheeler dealers participated in the event and customers were offered many concessions including waiver of the processing charges. It was organised as part of bank’s focus on retail lending.


Source : The Hindu

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Bank officers to ‘work-to-rule’ over pay hike row

The All India Bank Officers' Confederation (AIBOC) has decided to stick to office hours and not attend office on Sundays/ holidays and extended office hours with effect from Monday.

The AIBOC Executive Committee has also authorised the leadership to decide about a strike for minimum of two days along with other constituents of UFBU (United Forum of Bank Unions) in the first week of November to press their demand for early settlement of wage revision.

Sharing details of AIBOC's Executive Committee discussions at Delhi, District President of AIBOC, Coimbatore J Vanangamudi told Business Line that the committee had, among others, discussed wage revision for officers, working conditions and other issues including stringent action against bank loan defaulters.

Voicing criticism about the unrelenting stand of the IBA, he said "we have created a record of sorts in financial inclusion, implemented various policies and programmes of the government, but the IBA is adamant even towards our genuine salary revision demand. We have therefore decided to withdraw extra co-operation by strictly observing office hours, not attend office on Sundays and holidays. We are also planning a massive rally at Jantar Mantar on October 13, country-wide protest demonstrations with UFBU constituents on October 17 and one-day dharna between Oct 18 and Oct 31 at all State capitals".


Source : The Hindu

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