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Saturday, November 29, 2014

Corp Bank’s free ATM transactions

Corporation Bank has decided to offer unlimited number of free transactions in the bank’s ATMs for its savings bank customers. A press release said here on Thursday that according to revised guidelines of Reserve Bank of India, banks have an option to cap the number of free transactions (financial and non-financial) for savings bank account holders in own bank ATMs across India at five transactions per month. However, Corporation Bank has decided to offer free transactions to all its savings bank account cardholders for using the bank’s ATMs, irrespective of the number of transactions. 

Source : Thehindubusinessline
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Govt plans to cut stake in PSBs to raise Rs. 89,120 crore

The Indian government plans to raise about Rs. 89,120 crore ($14.4 billion) by reducing its stakes in state-run banks to 52 percent, the junior finance minister said on Friday, sending shares of state lenders higher.

The government holds stakes ranging from 56 per cent to 84 per cent in 24 state-run banks that account for 70 per cent of total outstanding loans of about $1 trillion in Asia's third-largest economy.

The state-run lenders are estimated to need as much as $60 billion in capital over the next four years to meet upcoming global regulations and to build a buffer against rising bad loans.

While the Indian government has traditionally funded the state lenders - to the tune of about $13 billion over the past decade - it is now striving to reduce the capital injections to lower its budget deficit.

Cutting its stakes "would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks," Jayant Sinha told parliament in a written statement.

Bank shares, which were trading higher before the news as the market bets on an interest rate cut next week, extended gains. The index of state lenders rose as much as 5.8 per cent to its highest level in more than 3-1/2 years.

Top lender State Bank of India (SBI) rose as much as 5.3 per cent, while second-largest Bank of Baroda jumped 8.3 per cent.

Finance ministry officials say the federal cabinet is expected to take a final decision on the issue of stake sale soon. A bunch of state lenders including SBI are awaiting the government's approval to sell shares to raise capital.

Analysts say bigger state-run banks have a better chance to raise capital from the market, but remain sceptical of smaller lenders' ability to attract investors.

Indian state-run banks have been burdened by high bad debt levels and corporate governance issues. A central bank-appointed panel this year recommended the government cut its stake in state lenders to below 50 per cent. 

Source : Thehindubusinessline
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SEBI slaps Rs1-cr fine on 6 merchant bankers for disclosure lapses in CARE IPO

In a major clampdown for “suppression of material facts” in IPO documents, SEBI penalised merchant banking arms of SBI, ICICI, Kotak Mahindra, IDBI, DSP Merrill Lynch, and Edelweiss groups for lapses during the public offer of rating agency CARE two years ago.

The six merchant banks have been asked to pay a fine of Rs1 crore – the maximum penalty applicable for violation of disclosure related norms in IPO documents – within 45 days.

Taking a strong view about the violation of SEBI norms as also the Code of Conduct for merchant banks and book-running lead managers (BRLMs) for public issues, SEBI said in its 86-page order: “While making disclosures in the Red Herring Prospectus, the BRLMs cannot pick and choose some material facts that they prefer to disclose and suppress some material facts.

“If material facts are suppressed or distorted as in the extant case, the very safety and integrity of the securities market would become a cause of concern for the regulators and the investors.”

The IPO came in December 2012, prior to which these six bankers had filed a Red Herring Prospectus for the public issue involving sale of nearly 72 lakh shares.

In this case, the bankers had made disclosure of one of the conditions under the FDI route in the RHP, terming it as “a material disclosure” because CARE had specifically sought such approval from RBI.

At the same time, they omitted the disclosure of another condition applicable to the Offer under the FDI route (though the compliance of the same was specifically directed by RBI while granting exemption to non-resident investors participating in the Offer) by unilaterally assuming the non-applicability of the said condition.

Source : Thehindubusinessline
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RBI issues final norms for small, payment banks

The Reserve Bank of India on Thursday issued final guidelines for payments and small banks that aim to take banking services to more people and small businesses.

The RBI aims to push financial inclusion by setting up these niche outfits — small finance banks that can have all-India operations and payments banks, which can accept more deposits.

The guidelines open up an window of opportunity for entities which did not bag new bank licences in April.

Shriram Capital, Janalakshmi Financial Services, Magma Fincorp and Muthoot Finance, among others, are expected to throw their hats into the ring to set up small banks.

The Department of Posts, Bharti Airtel, Vodafone India, Tata Teleservices, Western Union and online digital payment players such as Paytm, Oxigen and MobiKwik have expressed interest in floating payment banks.

The minimum paid-up equity capital for both small and payment banks has been pegged at
Rs100 crore.

Who are eligible?

Eligible promoters for a small bank include resident individuals/professionals with experience in banking and finance; and companies and societies. Existing non-banking finance companies (NBFCs), microfinance institutions and local area banks can also opt to convert into a small bank. The RBI said proposals from large public sector entities and industrial and business houses, including NBFCs promoted by them, will not be entertained to set up small banks.

In the case of payment banks, the eligible promoters will include existing non-bank prepaid payment instrument issuers and other entities such as individuals/professionals; NBFCs, corporate business correspondents, mobile telephone operators, and super market chains.

A promoter/promoter group can have a joint venture with an existing scheduled commercial bank to set up a payment bank, subject to the stake holding complying with the Banking Regulation Act.

Key activities

The small bank will primarily undertake basic banking activities of acceptance of deposits and lending to un-served and under-served sections, including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Small banks will be required to maintain a minimum capital adequacy ratio of 15 per cent of the loans on a continuous basis.

In the draft guidelines, the RBI had suggested that small banks would have a restricted area of operations (possibly contiguous districts in a homogenous States). However, in the final guidelines, these restrictions have been removed. The small bank will be required to extend 75 per cent of its credit to the priority sector. Payments banks can accept deposits — current and savings bank — from individuals, small businesses and other entities. However, they cannot accept non-resident Indian deposits.

The payment bank will initially be restricted to holding a maximum balance of Rs1 lakh per individual customer. While the bank can issue ATM/debit cards, it cannot issue credit cards.

It can contract outside liabilities (deposits) but not exceeding 33.33 times (against 20 times in the draft guidelines) its net worth.

Source : Thehindubusinessline
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Monday, November 24, 2014

IRDA in favour of increasing agent remuneration

The Insurance Regulatory and Development Authority (IRDA) is in favour of giving insurers a free hand in paying out agency commission to make it more remunerative for individual agents.

Speaking at an insurance summit organised by FICCI, IRDA Chairman T S Vijayan said insurance companies should protect agents by fixing minimum wages for them and creating employment opportunities in the industry. He said there should be some minimum protection for agents and they should be in a position to earn at least Rs. 10,000 a month from selling insurance.

"I hope that freedom is given to companies in the insurance bill. We can fix a cap on expenses and the insurers can decide on the best way to remunerate the agents. We feel that there should be a cap on the overall charges that a policyholder is subject to and if a company wants to pay a higher commission from its shareholders' account, it should be free to do so," said Vijayan.

On the benefit of raising foreign direct investment to 49 per cent, Vijayan said allowing 26 per cent FDI was a great success as it has helped the insurance industry increase insurance penetration. He also said the current legal and regulatory framework was adequate to ensure that the management of insurance companies was in Indian hands.

Vijayan also called for a ‘Jan Bima Yojana’ by the Government, on the lines of the ‘Jan Dhan Yojana' to increase insurance awareness.

Source : Thehindubusinessline
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Corporation Bank targets Rs. 6,000 cr from retail lending this fiscal

Corporation Bank (Chennai Circle) is targeting to achieve Rs. 6,000 crore from retail lending this fiscal.

The circle has achieved Rs. 4,700 crore till mid-November and is hopeful of reaching Rs. 5,200 crore by end-December, the bank's General Manager (Chennai Circle), U Vasanth Kini, told BusinessLine.

Coimbatore zone (comprising nine districts) in Chennai circle is said to top in retail lending.

Kini was in the city at the sixth edition of the bank's home loan expo now underway at Suguna Kalyana Mandapam.

Speaking on the sidelines of this expo, he said: “The focus is now on the high-end premium segment, existing borrowers, professionals and two-income families, where the risk element is minimal. The recovery from retail lending has also been quite satisfactory.”

Home loans

At this two-day event (which comes to an end this evening), the bank is offering home loans at 10.25 per cent for loans up to Rs. 2 crore and at 10.5 per cent for loans above Rs. 2 crore, notwithstanding the waiver on processing charges.

Car loans can be availed at 10.65 per cent for financial assistance of Rs. 50 lakh with 50 per cent waiver on processing fee.

Builders and project promoters have also come up with offers like cash discount of up to Rs. 10 lakh, gold coin, modular kitchen and home automation on spot booking.

Over 40 builders have put up stalls at this expo.

Source : Thehindubusinessline
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Stay away from imposter NBFCs: RBI

The Reserve Bank of India sounded out a warning bell to the people to remain on guard against certain entities fraudulently posing as Non-Banking Finance Companies (NBFCs).

Such entities, the RBI said, were posing as having got a certificate of registration from the regulator to do business. They were reportedly approaching the people with loan offers and would collect a sizeable amount as processing fees and then flee with the money so collected.

Such entities include companies, partnership firms, individuals, the RBI said, adding, “It is understood that entities/imposters are promising loans to the needy public at attractive rates and collecting money from them as processing charges for the loans/advances and vanish with the money so collected,” the RBI said.

The central bank advised people to refrain from making any payments or financial commitments to any individuals/entities without verifying the veracity of the transaction, the credentials and genuineness of licence or Certificate of Registration issued by the appropriate regulatory authority to function as a financial institution.

Source : Thehindubusinessline
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LIC waiting for disinvestment plan; ready to invest more in equities

Life Insurance Corporation, the country's largest life insurer is expecting to meet 20 per cent of its annual budgeted new business premium collection of Rs. 35,000 crore in the third quarter of the current fiscal, said a top company official.

SK Roy, Chairman of LIC, said on the sidelines of the FICCI insurance summit that while the new business premium collection for the state-owned insurer has seen a very good growth in November, the company may not be able to surpass its previous year's record premium collection in the third quarter.

Roy said that at present the insurer has already invested Rs. 45,000 crore in equity markets in the current fiscal and is ready to buy more if the government comes out with its divestment programme.

Source : Thehindubusinessline
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Andhra Bank Coimbatore zone targets Rs. 5,000 cr business this fiscal

Coimbatore zone of Andhra Bank is targeting a business level of Rs. 5,000 crore this fiscal.

As at end September, this zone achieved a business of Rs. 3,677 crore with deposits at Rs. 823 crore and advances at Rs. 2,854 crore.

This zone was formed out of the Chennai zone in May this year.

It now encompasses 23 districts, with 42 branches and 33 ATMs.

Briefing presspersons on the occasion of the bank's completion of 91 years, the zone's Assistant General Manager J Vamanaraman said 30 new branches have been planned for the zone before the close of the current fiscal to take the branch network to 72. Of these, 8 would be opened by end-December.

“The number of corporate advances is comparatively high here. It stands at Rs. 1,750 crore. Our focus would now be on MSMEs as we see huge potential in this space. Incidentally, Coimbatore branch tops in export finance,” he said.

To a query on NPAs, he said “Rs 331 crore out of the total advances of Rs. 2,854 crore have been classified as NPA. About 10 accounts have been restructured.

Source : Thehindubusinessline
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Banks open 7.73 cr Jan Dhan accounts with combined balance of Rs6,092 cr

Banks in India opened 7.73 crore accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) till November 19, according to Snehlata Shrivastava, Additional Secretary, Department of Financial Services, Union Ministry of Finance.

In an informal chat with presspersons at a PMJDY mega camp organised by Corporation Bank at Vamanjoor village in Mangalore taluk on Saturday, she said that these accounts have a balance of Rs6,091.86 crore.

Of the 7.73 crore accounts, public sector banks have opened around 6.21 crore accounts with a balance of Rs4,946.03 crore, and they have distributed RuPay debit cards to around 4.3 crore accounts.

She said that the Prime Minister will be writing a letter to all the Chief Ministers and Governors asking them to link the payment of subsidies under the government schemes to PMJDY accounts.

Earlier addressing the customers of the bank at the mega camp, Snehlata Shrivastava said the objective of PMJDY is to bring more and more public into the banking system.

She said the overdraft of
Rs5,000 will be given to head of the family, preferably women, under the scheme. Women have the habit of saving and prudent in their spending, she said.

Speaking on the occasion, SR Bansal, Chairman and Managing Director of Corporation Bank, said that the bank has opened around 12.83 lakh accounts under the PMJDY with a balance of
Rs211.03 crore.

In Dakshina Kannada district, the bank has opened accounts of all un-banked households in the allotted villages and wards under PMJDY and achieved 100 per cent target, he said.

The bank is confident of reaching the target of 100 per cent coverage under the scheme by January 26.

Source : Thehindubusinessline
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Bank unions plan zone-wise relay strike from Dec 2

Employee unions of public sector banks across the country will go on zone-wise relay strike from December 2 to 5 to press for wage revision.

The public sector bank employees had stopped work on November 12 on the wage issue, affecting services like cheque clearance and withdrawal from branches across the country. The strike call was given by United Forum of Bank Unions (UFBU).

“After the nationwide stir (on Nov 12), we are moving close to our next action — that is relay zonal strike scheduled from December 2 to 5.

“This will be first such strike in the banking industry,” C H Venkatchalam, General Secretary, All India Bank Employees Association (AIBEA) told PTI.

AIBEA is a major constituent of UFBU, an umbrella organisation of nine bank employee and officer unions.

According to the programme finalised by the unions, the strike will be preceded by demonstrations in each zone.

Bank employees of Southern Zone will be the first to go on strike, on December 2, followed by Northern Zone (Dec 3), Eastern Zone (Dec 4) and Western Zone (Dec 5), said Venkatchalam.

“We hope the IBA (Indian Banks’ Association) and the Government would understand the seriousness of the issue and initiate steps to resolve it at the earliest.

“In the event of the issue remaining unresolved, we may be forced to resort to more strike actions, including indefinite strike, in the days to come,” he warned.

The wage revision of public sector bank employees has been due since November 2012. While the unions demanded a 25 per cent rise in wages and later scaled it down to 23 per cent, the IBA stuck to its position of 11 per cent increase.

There are 27 public sector banks in the country with employees’ strength of about 8 lakh. There are about 50,000 branches of these banks across the country.

Source : Thehindubusinessline
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UCO Bank to add 50 e-lobbies by March next

Kolkata-headquartered UCO Bank is looking to add 50 e-lobbies to its existing five, by March 2015. The e-lobbies will enable users to withdraw cash, deposit cash or cheque and print passbooks.

Additionally, 500 self-service passbook printers have been purchased and are getting deployed in the branches, the banks said in a press release.

This apart, the bank is looking to expand its ATM network and is also mulling the possibility of having “ATMs through the wall”. It currently has 2160 ATMs.

Plans are also afoot to announce a reward points scheme for debit card users. The idea is to promote cashless transactions.

UCO Bank is also examining the option of acquiring POS machines at merchant sites.

According to the release, one of the most popular services has been the missed call facility. Customers can call on the number - 092787 92787 – that provides for balance enquiry across various accounts like current or savings bank accounts.

A missed call on 09213125125 provides customers with a mini-statement with last balance facilities on the accounts.

Missed call on 09210422122 & 09210222122 enables users to obtain the bank’s car loan and home loan schemes.

This apart, the bank has also introduced online savings bank and current account opening facility with provision to upload KYC documents. Thereafter, bank representative will contact the applicant and complete the residual formalities.

Source : Thehindubusinessline
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YES Bank not looking at acquisitions as strategy for growth, says CEO Rana Kapoor

YES Bank would continue to focus on organic growth and is not unduly perturbed by the recent Kotak Mahindra Bank-ING Vysya Bank deal, its CEO and Managing Director Rana Kapoor has said.

The proposed absorption of ING Vysya Bank by Kotak Mahindra Bank would catapult the new combined entity to the fourth place in the private sector league table, dislodging YES Bank from the fourth position.

YES Bank will not look to grow through acquisitions although competition may resort to such route for growth, according to Kapoor.

“No.. There is a reason for it. When the economy rebounds, we can grow faster than any other bank. We can then step on the pedal. We are taking a very contrarian approach to what has happened (merger deal in front of us). We have total focus on quality and organic growth”, Kapoor told BusinessLine here.

He was replying to a BusinessLine question on whether YES Bank will in the wake of the Kotak Mahindra Bank-ING Vysya Bank deal announcement reorient its strategy and look at acquisitions for growth.

Kapoor said that the most important thing in banking was quality—Human Resource quality, asset quality, capital quality, management quality and there should be nothing to disturb that.


On expectations for the December 2 (policy review), Kapoor said there is a “dovishness” to this upcoming policy.and this should get percolated.

“My expectation is in 2015 we should have 2 per cent reduction (in interest rate)”, Kapoor said.

Given the softening inflation trend, there is wide expectation among industry that RBI Governor Raghuram Rajan will on December 2 cut policy rates.

Source : Thehindubusinessline
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Dhanlaxmi Bank independent director quits

Dhanlaxmi Bank in a release to the stock exchange said K Srikanth Reddy, Non-Executive Independent Director, had resigned from the board of directors of the bank with effect from November 15.

Source : Thehindubusinessline
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