Finance Ministry finds holes in Jan Dhan Yojana; banks to open 3.7 crore more accounts

The finance ministry has identified several gaps in the Pradhan Mantri Jan Dhan Yojana, which it flagged to bankers on Thursday, asking them to rectify them.

In an eight-page note, the ministry has said banks need to open 3.75 crore additional accounts. The study pointed out that there are at least 33 districts where the coverage is under 50%. A majority of these districts are in under-developed states.

In fact, in Arunachal only 29% of the households have been covered, while the level in Andaman & Nicobar Islands is 38%. Apart from accounts, there is also concern over account balances as 5.7 crore of the over 7.5 crore, over three-fourths of the Jan Dhan accounts, have zero balances.

"There is a need to ensure transaction in these accounts," the ministry told bankers.What is adding to the worry is a slowdown in deposit growth although overall deposits are close to the Rs 6,000 crore level. The other problem is the issue of debit cards as 4.4 crore RuPay cards have been issued, resulting in a 43% gap. Only 1.5 crore cards have been activated.

Now, in the absence of activation through non-financial transactions, the accident cover will not be activated. As a result, banks have not just been asked to step up card issuance but also educate account holders about activation.

There are other glitches too. For instance, against a target of 1.3 lakh business correspondents, 1.15 lakh sub-service areas — each covering 1,000-1,500 households -have been covered. But there are over 14,000 uncovered SSAs of which one-fifth are facing connectivity problems.

Source : Economic Times

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RBI warns against credit card fraud using its name

The Reserve Bank of India has invited public attention to a new form of fraud perpetrated in its name - a credit card issued by fraudsters in the name of the central bank.

Explaining the modus operandi, RBI said fraudsters are sending credit cards which allow withdrawal of money up to a certain limit, albeit a small sum, from a bank account. Having gained the confidence of the victim, the fraudster gets him to deposit a huge sum of money in the same bank account. Once the money is deposited, the card stops working and that would also be the last time the holder of the card would hear from the fraudster.

Warning against such efforts, RBI reiterated that it does not carry out any business with public, whether through savings bank account, current bank account, credit card, debit card, online banking services or receiving and holding funds in foreign exchange or any other form of banking services.

Source : Economic Times

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No big job cuts after Kotak Mahindra-ING Vysya merger: Uday Kotak

Kotak Mahindra Bank chief Uday Kotak has assured that there will not be “any dramatic” reduction immediately in the number of employees following the merger of ING Vysya Bank. While ING has around 10,000 employees, Kotak Bank has around 29,000.

“We believe total number of employees will grow over time, but we don’t see any dramatic reduction in the net number of people in a hurry,” the Executive Vice-Chairman and Managing Director of Kotak Bank Uday Kotak told PTI after he announced the merger deal last evening.

“We have no plans to do any massive rationalisation of branches or capacity. We are committed to growing, this is a merger for growth, not for cutting,” he said, answering a specific question on whether KMB will be pruning some jobs. ING Vysya Bank Deputy Chief Executive Uday Sareen said cost cutting was not the objective of the merger.

“At the heart of this deal is not cost-efficiency; yes it is cost-avoidance as there are synergies post-merger. But this is not one merger which talks about cost cutting and that is an extremely important point which we would like to communicate,” Sareen said.

“In any merger, there is a concern among employees...but at the heart of this partnership is our people,” Sareen added.

Some analysts have said that KMB may have to prune its expenses. In a service industry like banking, people are a major cost component. Meanwhile, Kotak said the merged KMB will not look at having a presence internationally.

“We will leverage on our cooperation arrangements, we believe the India opportunity is where we are good at and the core business model is to concentrate on the country’s diversified financial services,” Kotak said.


Source : Thehindubusinessline

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IRDA seeks previous 4 years’ data from life insurers

The Insurance Regulatory and Development Authority (IRDA) has asked life insurance companies to submit data for the last four years to the Insurance Information Bureau (IIB).

The data should be submitted in the prescribed format from the year 2010-11 to 2013-14 before December 15, 2014, Sriram Taranikanti, Executive Director, IRDA said in a circular.

In addition, the insurers would need to submit data for the periods ending September and March of each financial year within a period of one month from the last day of respective month.

``It may be noted that the Bureau would also undertake other analytics work including those sought by the Authority and also the insurance industry from time to time,’’ the circular said adding that IIB could also prepare standardised reports relevant to the industry. 


Source : Thehindubusinessline

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StanChart opens 100th branch in India

The largest foreign bank in the country, Standard Chartered Bank, has opened its 100th branch in the country.

The milestone branch was opened by the bank in Bareilly District of Uttar Pradesh.

Standard Chartered Bank has branches in 43 cities and a combined customer base of around 2 million retail customers and around 2,500 corporate and institutional relationships.


Source : Thehindubusinessline

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Corp Bank Jan Dhan camp

Corporation Bank will conduct Pradhan Mantri Jan Dhan Yojana (PMJDY) mega camp at Vamanjoor in Mangalore on November 22. A press release by the bank said here on Friday that Snehlata Shrivastava, Additional Secretary, Department of Financial Services, Union Ministry of Finance, will be the chief guest at the function. SR Bansal, Chairman and Managing Director of the bank, and BK Shrivastav, Executive Director, will be present.


Source : Thehindubusinessline

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Kotak-ING Vysya merger: good fit, good deal

ING Vysya Bank makes a good fit for Kotak Mahindra Bank in many ways. The merger will help Kotak Bank expand its reach at a time when competition in the sectoris set to grow.

Kotak’s network of 641 branches will nearly double with the addition of 573 branches of ING Vysya Bank. Kotak Bank, currently present in metros, will benefit from ING Vysya’s better mix of rural and urban branches along with its strong presence in South India. The chunk of Kotak’s branches are in West and North India.

Next, ING Vysya has been building its high-yielding SME loan portfolio, which has been its core strength. The bank’s SME loan portfolio constitutes 35 per cent of its total loans. For Kotak Bank, this segment is less than 10 per cent of its portfolio. In the past couple of quarters, Kotak Bank’s loan growth has been led by the corporate, small businesses, personal loans and agriculture segments. Within the corporate segment, the bank has been increasing its focus on the mid-market space (Rs5-25 crore); and the merger will hence help the bank build its presence within this space.

ING Vysya also has a strong funding base. The current account, savings account (CASA) ratio is now 33 per cent, up from 27 per cent five years ago. More than half of this has been from current account deposits, which carries zero interest. For Kotak Bank, the differentiated rates on savings deposits has helped it build a strong deposit base. The merger of the two banks will enhance the CASA profile.

 Kotak Bank has also been sitting on excess capital (capital adequacy of 17.6 per cent) and has to cut down its promoter’s stake in the bank from the current levels of about 40 per cent to 20 per cent by March 2018 according to the RBI’s directive. Post-merger, the promoter’s stake in the combined entity will be 34 per cent. The capital adequacy of the combined entity will be about 16.5 per cent, which will continue to provide adequate headroom for growth.In terms of valuations, the deal is a good one. At about two times ING Vysya’s book value, the deal is reasonable in the context of past mergers within the banking space.


Source : Thehindubusinessline

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Axis Bank to increase unsecured retail portfolio

Leading private bank Axis Bank would gradually increase the proportion of unsecured retail portfolio by increasing the credit cards business, an official said.

“We want to scale up the retail unsecured portfolio in a graded manner over time”, Rajiv Anand, Group Executive and Head (Retail Banking) of Axis Bank said.

Anand said that the bank was quite comfortable with the present underlying portfolio. “With economy showing signs of picking up, we are willing take more risks by increasing the unsecured retail component. “Presently, the proportion of unsecured retail portfolio was 20 per cent”, Anand told reporters here on Wednesday.

He said that bank would do so by increasing the credit cards business particularly “Presently, we are issuing credit cards to our customers only. We are looking at the open market also”, he said. The bank was also open to inorganic growth provided the price was right.

With 2500 branches at present, pan-India, the bank would set up another 250 more during the current financial year, Anand said.


Source : Thehindubusinessline

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Bharatiya Mahila Bank launches net banking

Bharatiya Mahila Bank Ltd (BMB) on Wednesday launched its internet banking facility by the name ‘BMBSmartBanking’.

This facility was launched at the hands of Usha Ananthasubramanian, Chairman and Managing Director, BMB.

A newly designed website of the bank was also launched.

Currently, this women focused bank has branch network of 33 branches and all of them on core banking solutions with onsite ATMs.

Speaking on the occasion, Usha Anathasubramanian said the internet facility came with several value added services besides regular features.

She also said BMB was entering into the second year of its operations today.

BMB also opened on Wednesday its second branch in the capital at Model Town.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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RBI urges companies to remit tax dues in advance

The RBI has requested companies to pay Income Tax in advance using online or alternate channels of banking to avoid last minute rush towards the end of December.

“The Reserve Bank of India has appealed to income tax assessees to remit their income tax dues sufficiently in advance of the due date. It has also stated that assessees can use alternate channels like select branches of agency banks or the facility of online payment of taxes offered by these banks. These will obviate the inconvenience involved in standing in long queues at the Reserve Bank offices,” RBI said in a statement.

The income tax can be paid through 29 agency banks authorised by the banking regulator. These banks include most public sector banks including State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India and Canara Bank among others. RBI has also authorised top three private banks – ICICI Bank, HDFC Bank and Axis bank to accept payments of Income Tax dues.

The RBI observed that, “The rush for remitting Income–Tax dues through the Reserve Bank of India has been far too heavy towards the end of December every year and it becomes difficult for the Reserve Bank to cope with the pressure of issuing receipts although additional counters to the maximum extent possible are provided for the purpose.”


Source : Thehindubusinessline

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Jaitley to meet PSB chiefs on Thursday

The Finance Minister Arun Jaitley will meet the chief executives of public sector banks (PSBs) here on Thursday.

Earlier, this quarterly performance review meeting was to be taken up and addressed by the new Financial Services Secretary Hasmukh Adhia.

However, both Jaitley and Adhia will now together meet chief executives of PSBs, official sources said.

This meeting assumes importance as the entire public sector banks system are at crossroads, facing several challenges including weak asset quality and questionable selection process for chief executives.

Besides reviewing the credit growth in the economy, the meeting will also look at critical areas like capital adequacy situation, the status of non-performing assets, stalled projects and financial inclusion.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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Axis Bank launches smart self-service terminal

Axis Bank, India’s third largest private sector bank, has launched a smart self-service terminal that enables customers to deposit as well as withdraw cash from the same machine.

“Customers can initiate a deposit transaction through the smart self-service terminal even without using a debit card and will receive instant credit for the deposited amount. There is no cap on the amount of cash deposited by the customer through these terminals, provided his/her PAN details are available with the bank,” Axis Bank said in a statement.

Cash recycling

The smart self-service terminal will reduce the frequency of loading cash in the machine as well as the cost of idle cash as it allows cash recycling operations by dispensing the deposited cash for future withdrawal transactions, thereby improving the efficiency of the bank's cash operations, it said.

Rajiv Anand, Group Executive & Head- Retail Banking, Axis Bank said, “The self-service terminal is another innovative product by the bank which will help customers carry out all financial and non-financial transactions in a convenient and hassle-free manner.”

The bank will convert its existing cash deposit machines to smart self-service terminals in a phased manner.


Source : Thehindubusinessline

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Banks turn to Facebook and Twitter to keep track of education loan takers

Be careful of friends and followers. Some banks have started using Facebook and Twitter to try and keep track of students who have taken education loans from them, casting a wider net to keep defaults in check.

When payments are delayed, these banks use information available on social networking websites to track down customers and get in touch with them with the help of local branch staffers. In some cases, banks may even be able to send or post reminder messages to them through such websites.

State-run banks have over 2.6 million education loan accounts with outstanding credit of about Rs 60,000 crore, according to government data.

The industry estimates that 5-6 per cent of these loans have turned bad. The government is yet to set up a credit guarantee fund for education loans. Central Bank of India, the top provider of education loans to the Indian Institutes of Management last year, has switched to keeping a tab on borrowers through social networking websites, a senior official with the bank told ET.

"Earlier, we used to track them through their alumni forums. But now that most students have a presence on social networking websites, it is easier to track their footprints online," said KK Taneja, field general manager with the bank. He declined to provide more details.

Facebook, the world's largest social network, is estimated to have more than 100 million users in India. Those on social networks sometimes restrict access to personal information to friends or people they know.

Under the Indian Banks Association's model educational loan scheme, collateral is waived for all loans up to Rs 4 lakh, while those above Rs 7.5 lakh need tangible security and have to be taken jointly with the parents. However, in case of a default, banks have little recourse to recover the money, apart from filing a case. Some banks track education loan defaulters through their online friends. "So, if from the same batch there are four account holders and two of them are defaulters we can track them through their batch mates' friend list," said a senior manager with a state-run lender based in north India.

Banks also find social networking websites useful to stay in touch with education loan customers who have moved abroad. A senior manager with a private bank said most students from top institutes often go overseas within a year or two of placement. "Some of these are marquee clients for us. We stay in touch with them through all possible avenues. We also offer them other services from the bouquet of products that we have," said a senior manager with a private bank.



Source : Economic Times

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HDFC to pare stake for foreign investment in bank

Parent HDFC will pare its stake in HDFC Bank to create room for foreign investors. HDFC, the country's oldest mortgage lender which owns 22.5 per cent in HDFC Bank, will not step in as a buyer when the bank issues shares to local and foreign investors to raise Rs 10,000 crore, said three people aware of the decision.

The institution will let its stake dip to a little over 20 per cent in HDFC Bank where `foreign ownership', as defined by the government, is close to the maximum permissible 74 per cent. "HDFC will not participate in the share purchase but will, in fact, sell shares to make way for other foreign investors,'' said one of the persons. In the past whenever there has been a share dilution in HDFC Bank, HDFC had always purchased shares to preserve its holding in India's most valuable lender.

HDFC Bank shareholders have approved a proposal to raise Rs 10,000 crore capital by July 2015. The bank has appointed investment banks Bank of America Merrill Lynch, Credit Suisse, HSBC, JP Morgan, Morgan Stanley and Citi Group as advisors to the proposed fund raising. HDFC's decision is driven by the government's stand that the institution's holding in HDFC Bank should be treated as foreign ownership because more than 51 per cent of HDFC's stake is with offshore investors.

On November 14, the Foreign Investment Promotion Board, a government panel which clears foreign investments in Indian companies, cleared the bank's revised proposal to increase foreign investment in the bank to 74 per cent. But the board's decision did not leave headroom for more foreign investment in HDFC Bank as the combined stake of HDFC, foreign portfolio investors and holders of ADR and GDR receipts in the bank is close to 74 per cent. "HDFC Bank's proposed fund raising would be a combination of ADRs and local share issuance to mutual funds and insurance companies. Since the headroom available is slim, a local share sale without parent's participation will allow space for foreign investors," said a person familiar with the plan.

"The fund raising exercise is still some time away. A decision on the timing of the issue will be taken in December and money will be raised only next year," said an investment banker. Analysts appear to have factored in HDFC's decision not to participate in any share purchase. ''HDFC Ltd may not be able to participate in a fresh issue of shares or restore its holding to 22.5 per cent as the FIPB turned down the bank's plea to not treat the promoter stake as foreign investment,'' said Dinesh Shukla, banking analyst at brokerage Sharekhan.

A 20 per cent stake will allow HDFC to consolidate in its balance-sheet the proportionate net profit of HDFC Bank.


Source : Economic Times

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Axis Bank raises $500 mn through overseas bonds

India’s third largest private lender, Axis Bank raised $500 million from the overseas debt market through unsecured bonds at a fixed coupon rate of 3.25 per cent for a 5.5 year tenure.

“The deal was launched at initial price thoughts at US Treasuries + 195 bps but the final pricing was 25 bps tighter than initial price thoughts at T + 170 bps… The unsecured notes are issued by Axis Bank’s DIFC branch, Dubai and are rated Baa2 by Moody's, BBB- by S&P and BBB- by Fitch,” Axis bank said in a statement.

The bonds were oversubscribed from investors in Asia, Middle East, Europe and the US… The coupon of 3.25 per cent is the lowest ever for a US Dollar deal of 5.5-year period, the bank said.

Barclays, Credit Agricole CIB, HSBC, JP Morgan and Standard Chartered acted as joint book-runners and lead managers.

“The Notes have been issued at a price of 99.656 to yield 3.319 per cent. The notes will be denominated in US dollars, and will bear fixed interest of 3.250 per cent per annum, with interest payable semi-annually in arrears. Axis Bank will apply the net proceeds to meet the funding requirement of its foreign branches and for general corporate purposes,” it added.

Sidharth Rath, President-Treasury, Business Banking & Capital Markets, Axis Bank said, "We are pleased to receive a warm welcome from investors on our return to the international bond markets after a long absence. The response demonstrates the global investor’s positive interest in the Indian economy and the banking sector."


Source : Thehindubusinessline

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FM’s thoughts, actions to augur well for economy: Citi

Government’s reform measures on GST, labour and land acquisition laws should augur well for the economy and equity markets, global brokerage firm Citigroup said today.

It said there is a lot happening that should see the light soon with respect to Goods and Services Tax (GST), land acquisition law modifications and changes to labour laws.

“The FM’s thoughts and actions should augur very well for India’s economy and its equity market,” Citigroup said in a report on Finance Minister Arun Jaitley’s meeting with investors yesterday.

“We were impressed ... believe the market should be too,” Citigroup said, adding the government has cleared environmental backlog, FDI in defence and railway infrastructure and diesel deregulation.

Also the resolution to coal sector problems and opening up of commercial mining and planned increased in FDI cap in insurance sector have buoyed market sentiments.

“Action does speak louder than words. The market and mood have moved up ... on expectations yes, but on a lot of action too,” it said.

The Minister sees high cost of capital, domestic bank financing, legal framework for contract enforcement and the weak global environment as challenges, it added.


Source : Thehindubusinessline

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74% accounts in Jan Dhan Yojana are with zero balance

Around Rs. 5,400 crore have been deposited in banks in over seven crore bank accounts opened under Pradhan Mantri Jan Dhan Yojana (PMJDY) of which 74 per cent accounts are with zero balance, according to an RTI reply.

The data provided by Department of Financial Services says that as on November 7, 2014 a total of 7.1 crore bank accounts have been opened of which 5.3 crore were accounts with ‘Zero balance’.

The reply provided to activist Subhash Agrawal said as on November 7, the total balance in these accounts was Rs. 5,482 crore. Majority of these accounts, over 4.2 crore, have been opened in rural areas, whereas in urban areas 2.9 crore have been opened.

The highest number of accounts under the scheme, have been opened by State Bank of India which started over 1.2 crore new accounts followed by Bank of Baroda which opened 38 lakh accounts and Canara Bank 37 lakh accounts, it said.

PMJDY is national mission for financial inclusion to ensure access to financial services, namely, banking and savings and deposit accounts, remittance, credit, insurance, pension in an affordable manner.

It focuses on coverage of households as against the earlier plan which focused on coverage of villages.

An overdraft facility up to Rs. 5,000 would be available to one account holder of PMJDY per household after six months of satisfactory conduct of the account.


Source : Thehindubusinessline

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No PAN requirement for investment in Kisan Vikas Patra

The Finance Ministry has said that there will not be requirement of Permanent Account Number or PAN in puttig money in relaunched Kisan Vikas Patra. There will also not be any upper limit on investment.

The Finance Minister Arun Jaitley and Communication Minister Ravi Shankar Prasad relaunched KVP on Tuesday. The scheme aims to boost saving and use them for long term capital requirement. "This will be a bearer instrument just like currency and easy to encash," he said.

In view of the popular demand and to revitalize Small Savings, the Finance Minister in his Budget Speech announced that KVP a very popular instrument among small savers will be reintroduced. The instrument will encourage people, who may have banked and unbanked savings to invest”. KYC norms regarding all National Savings Schemes (NSS) are now applicable in post offices and banks w.e.f. January, 2012.

It will be available to the investors in the denomination of Rs. 1000, Rs. 5,000, Rs. 10,000 and Rs. 50,000, with no upper ceiling on investment. The certificates can be issued in single or joint names and can be transferred from one person to any other person / persons, multiple times. The facility of transfer from one post office to another anywhere in India and of nomination will be available. The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited.

Initially the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks. An investor can encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value. The investment made in the certificate will double in 100 months.

The scheme will also safeguard small investors from fraudulent schemes. With a maturity period of 8 years 4 months, the collections under the scheme will be available with the Government for a fairly long period to be utilized in financing developmental plans of the Centre and State Governments and will also help in enhancing domestic household financial savings.

Earlier, it was launched by the Government on April 1, 1988. The scheme provided facility of unlimited investment by way of purchase of certificates from post offices in various denominations. The maturity period of the scheme when launched was 5 ½ years and the money invested doubled on maturity.

The scheme was very popular among the investors and the percentage share of gross collections secured in KVP was in the range of 9 per cent to 29 per cent against the total collections received under all National Savings Schemes in the country.

Gross collections under the scheme in the year 2010-11 were Rs. 21,631.16 crore which was 9 per cent of the total gross collections during the year. In the year of its closure, the scheme secured gross collections of Rs. 7,575.95 crore (April 2011 to November 2011).


Source : Thehindubusinessline

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New director nominated on RBI board

The Government has nominated Hasmukh Adhia, Secretary, Department of Financial Services, as the Director of Central Board of Directors of the RBI.

“The Central Government has nominated Dr. Hasmukh Adhia, Secretary, Department of Financial Services, Ministry of Finance, New Delhi as a director on the Central Board of Directors of the Reserve Bank of India vice Gurdial Singh Sandhu,” RBI said in a statement.

“Dr. Hasmukh Adhia’s nomination is with effect from November 11, 2014 and until further orders, RBI added.

Adhia is a 1981 batch Gujarat cadre IAS officer, who worked with Prime Minister Narendra Modi, when he was Gujarat Chief Minister.

In a major bureaucratic reshuffle earlier this month, Adhia was appointed the Financial Services Secretary replacing ex-Financial Services Secretary Gurdial Singh Sandhu.

His appointment was the third secretary level change in the Finance Ministry after Former Revenue Secretary Rajiv Takru was shifted to Department of North Eastern Region and Former Finance Secretary Arvind Mayaram was first shifted to Tourism Ministry and later to Minority Affairs Ministry.


Source : Thehindubusinessline

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FinMin notifies higher limit for tax savings bank deposits

Following the Budget announcement, the Finance Ministry has notified higher limit under bank term deposit for Income Tax benefit.

Now, for the current fiscal, one can deposit Rs. 1.5 lakh as against Rs. 1 lakh in a bank deposit to get tax benefit under Section 80C of the Income-Tax Act. This means amount deposited up to Rs. 1.5 lakh in a 5-year term deposit will be deducted from income before calculation of personal income tax. The new notification will come into effect from November 13.

In this year's Budget, the Finance Minister Arun Jaitley had announced enhancing tax investment limit under Section 80C to Rs. 1.50 lakh to boost domestic investment in long term savings. “In the year 2012-13, the gross domestic savings were 30.1% of the GDP as compared to 33.7% in the year 2009-10. Increase in savings and their productive use leads to higher economic growth. The households are the main contributors to savings,” he said.

Under Section 80C, one can invest in instruments such as 5 year National Saving Certificate, Public Provident Fund (PPF) , Life Insurance Policies, Equity Linked Saving Scheme, contribution in Employees Provident Fund and besides bank deposits. This limit also includes principal repayment towards home loan. Since, PPF is an independent scheme and have different features, the Government issued a separate notification on August 19 and now there is separate notification for bank term deposit.

The new notification has been issued under Bank Term Deposit Scheme 2006. The deposit can be transferred from one branch of a bank to any other branch of the same bank, but not to other bank. Unlike life insurance policy and NSC, It can also not be pledged to get loan. There is no provision of premature encashment

The deposit holder will have the facility to get interest either in lump sum or every quarter/month. However, interest will be liable to Tax Deducted at Source (TDS). Banks such as State Bank of India has launched tax saving term deposit.



Source : Thehindubusinessline

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Rate cut by RBI will give ‘good fillip’ to economy: Jaitley

Pitching for a rate cut by RBI, the Finance Minister Arun Jaitley today said lower cost of capital will give a “good fillip” to the economy.

“I am quite clear in my mind that the cost of capital has to come down. Inflation has moderated, global fuel price has eased. Therefore, if RBI, which is a highly professional organisation, in its wisdom decides to bring down the cost of capital (it) will give a good fillip to the Indian economy,” he said.

Delivering the key mote address at the Citi’s Investor Summit, Jaitley hoped that as a professional organisation the Reserve Bank will take “the best decision”.

RBI Deputy Governor S S Mundra, who was present, later said the central bank revises rate, but not on “popular demand. It changes when there is a clear conviction”.

At a different function, Mundra said that RBI will take into account various economic parameters while deciding on interest rate at its next policy.

The RBI, which has kept the key borrowing rate at 8 per cent since January to check inflation, is scheduled to come out with its next monetary policy on December 2.

Meanwhile, September retail inflation has dropped to a record low of 5.52 per cent in October, while the wholesale inflation eased to five-year low of 1.77 per cent.

Indian economy, which slipped to below 5 per cent growth in two consecutive fiscals, is expected to improve to 5.4 to 5.9 per cent in 2014-15.

Giving details of various economic reform measures in the pipeline, Jaitley specifically talked about the Goods and Service Tax (GST) and Insurance Amendment Bill.

The Minister said that he was expecting that Insurance Amendment Bill will be passed in the forthcoming Winter Session of Parliament.

He said he was in touch with the Parliament Select Committee, currently vetting the insurance Bill, and would to persuade it to give the report at the earliest.

As regards GST, the Finance Minister said that he is in discussions with the various state governments and most of the contentious issues have already been resolved.



Source : Thehindubusinessline

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Axis Bank hits overseas debt market with $500 m issue

Top private lender Axis Bank today hit the overseas debt market with a benchmark issue to raise at least $500 million in a 5.5-year money, merchant banking sources said here.

“Axis Bank today launched fixed-rate senior unsecured notes in the dollar-denominated debt market to raise at least $500 million. Depending on the pricing and demand, the bank may raise more than $500 million through these Regulation S notes,” a merchant banker said.

India’s third largest private lender has given a price guidance of 1.95 per cent above the US treasury, the sources said, adding the money will be raised through the Dubai branch of Axis Bank and instruments listed on Singapore Stock Exchange.

The book runners to the issue are Barclays, HSBC, JP Morgan and StanChart.

The bank was not immediately available for comments.

Meanwhile, international rating agency Fitch has assigned ’BBB-(exp)’ rating to the issue.

“Axis Bank’s IDR is driven by its viability rating of ’bbb-’, which denotes its standalone creditworthiness. It reflects the strength of its franchise, satisfactory asset quality, improved capitalisation and growing profitability.

“The bank’s increased focus on retail customers has helped it to diversify loan and funding mix and reduce concentration risk since FY11,” Fitch said.



Source : Thehindubusinessline

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Central Bank of India launches 'Cent Aspire'

You can now get the power of liquidity in a fixed deposit scheme.

State-owned Central Bank of India has launched a novel deposit scheme that has a free credit card bundled with it.

Under 'Cent Aspire', any individual can get a free credit card against fixed deposit with the bank for deposit amount of Rs. 20,000 and above, K.K.Taneja, Field General Manager, Central Bank of India, told reporters here on Monday.

"The main idea is to ensure that our customers in semi-urban and rural areas get a credit card product and liquidity in a fixed deposit scheme," Taneja told BusinessLine.

As much as 66 per cent of the branch network of 4,700 branches are located in rural and semi-urban areas, Taneja said.

Cent Aspire will enable the customers in these branches to avail themselves of a credit card, he said.

The maximum credit limit that could be availed through the credit card will be Rs. 4,00,000.

Better features

One of the salient feature of the credit card is that it comes with a personal accident cover of Rs. 1,00,000 (against

death). As much as 80 per cent of the deposit amount could be availed as credit limit.

Also, the interest rate on the amount outstanding beyond the credit period is lower than the prevailing interest rates on card receivables, Taneja said.

Home loan

Central Bank of India on Monday also launched a new housing loan product -- Cent Home Double Plus scheme.

This State owned bank's home loan portfolio had recorded a 40 per cent increase on a year-on-year basis as of end September 2014.

srivats.kr@thehindu.co.in



Source : Thehindubusinessline

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