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Thursday, December 17, 2015

HDFC Bank elevates seven senior executives in bid to retain talent

HDFC Bank has elevated 7 senior executives to group heads of various businesses as it tries to groom talent and protect them from being poached by emerging rivals such as IDFC Bank and other payment banks.

India's second largest private sector bank has elevated Parag Rao, who heads the bank's card payments and merchant acquiring business, Nitin Chugh who is in charge of the bank's Digital Banking services, Nirav Shah who handles the SME portfolio, and Ravi Narayanan who helms the bank's branch banking vertical.

Others who have been promoted are Ashok Khanna who is the head of the auto loan division, Ashima Bhat who is currently part of the finance team, and Munish Mittal, the Chief Technology officer of the bank. HDFC Bank will now have 19 executives as part of its senior management team. HDFC Bank had seen three senior level exits in August this year, when Biju Pillai, Amit Kumar and Birendra Sahu quit to lead IDFC Bank's personal and business banking divisions.

The bank had also elevated Dhiraj Relli to head of HDFC Securities and Aseem Dhru as group head -business banking, rural, commodity and agri-lending businesses in June this year.

Although the bank has re vealed very little about its succession planning or management roles for senior staff, experts believe these promotions follow the entry of potential banking companies which are scou ting for experienced and proven bankers.

In December 2013, HDFC Bank had elevated its long time second-in-command Paresh Sukthankar as deputy managing director, a move that was interpreted as improving Sukthankar's chances of succeeding Aditya Puri as MD and CEO of India's most valuable bank.

Other private sector banks like ICICI and Axis Bank ha ve also faced the brunt of employee attrition after the launch of IDFC, Bandhan and several payments banks. Some bankers point out that the ability to retain talent has been the lowest in years with new entrants of fering generous pay hikes to employees especially at the junior and middle manage ment level.

Source : Economic Times
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IDRBT to develop digital banking framework

The Institute for Development and Research in Banking Technology (IDRBT) has announced plans to launch a digital banking framework within the next few months, aimed at incorporating new channels of payments.

A.S. Ramasastri, Director of IDRBT, told BusinessLine, “The framework/ platform being developed with inputs from banking sector players, technology firms, and IDRBT research teams, is also aimed at meeting emerging requirements in the e-commerce sector.”

Recent advances in Big Data and its analytics has thrown up immense possibilities in identifying areas of business propositions for banks, while meeting the choosy demands of their customers.

Research in this area has enabled banks to develop their own data warehouses for customer relationship management (CRM) initiatives. Big data has, therefore, become the mantra for understanding new leads for banks, the likes and dislikes of customers, their behavioural analysis, and information security threats, among other issues.

Over the years, IDRBT, based in Hyderabad and part of Reserve Bank of India, has played a significant role by contributing through centres of excellence in analytics, mobile banking, cyber security, Centre for Open Source Systems, and Centre for Virtualisation and Cloud Computing.

“There has been a huge growth in data requiring specialised systems and tools to make sense of the information flow. While a lot of business intelligence has been built into banking systems, it calls for more advanced systems to extract information from Big Data,” he said.

Towards this, IDRBT is seeking to focus on new areas of fuzzy computing, neuro computing and hybrid neuro-fuzzy computing. By exploring new applications areas and designing novel hybrid algorithms for solving different real world application problems, the Digital Framework seeks to use the power of fuzzy and neuro computing to address complex, uncertain, and imprecise problems.

The concept of Fuzzy Neuro Computing gained importance to analyse and make sense of complex data that keeps flowing into the banking systems. By use of various computing techniques, it is aimed at providing solutions to make the right decisions.


The IDBRT Director said the Institute is all geared up to introduce a Post-Graduate Diploma in Banking Technology (PGDBT) commencing from July 2016.

Describing the course as a unique programme designed to provide the Indian banking and financial sector a pool of talented professionals with technology expertise, he said this is a full-time regular one-year programme that provides essential learning inputs on technology implementation, integration, and management to meet the challenging technology requirements of the banking sector. The selection is based on CAT scores.

Source : Thehindubusinessline
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Thursday, December 3, 2015

Dena Bank gets board approval to dilute government stake

Public sector lender Dena Bank has got board approval for dilution of government holding to up to 52 per cent and raise capital up to Rs 2,500 crore from various bonds.

"To raise equity capital of the Bank by diluting GOI holding up to 52 per cent, on obtaining necessary approval government," the bank said in a BSE filing.

Government shareholding in the bank was 65 per cent at the end of September 30.

Last year, the government allowed public sector banks to to bring down its stake to 52 per cent so as to meet capital requirement.

As per law, government holding at any moment must not come below 51 per cent to maintain the public sector character of the state-owned banks.

The bank said it has got board approval to raise Additional Tier-1 (AT1) capital up to an amount of Rs 1,500 crore in one or more tranche, in one or more instruments.

It further added that the bank has got board approval to raise Tier 2 capital up to an amount of Rs 1,000 crore in one or more tranche, in one or more instruments.

Shares of the bank closed down 0.80 per cent at Rs 43.45 on the BSE.

Source : Economics Times
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Monday, November 30, 2015

SBT launches ‘affordable housing loan’ scheme

State Bank of Travancore (SBT) has launched a ‘Housing for All (Urban): Mission 2022’ to provide affordable housing to families belonging to the economically weaker sections/low-income groups in the urban centres.

The scheme upholds the spirit of the ‘Swachh Bharath Mission’ by insisting on a toilet for every house that is built, a spokesman for the bank said here.

The loan can be accessed in all statutory towns of India as per the Census of 2011, the spokesman added.

As part of the scheme, loans will be advanced in line with the Centre’s target of providing ‘pucca’ residential houses for all urban Indian families by the year 2022.

The loans will be available for beneficiaries in two segments, viz. (i) those with a household annual income of up to Rs. 3 lakh under the economically weaker sections and (ii) those with a household annual income between Rs. 3,00,001 and Rs. 6 lakh under the low-income group.

The beneficiaries will be eligible for an interest subsidy of 6.50 per cent provided by the Centre, the spokesman added.

Simple documentation and relaxed norms makes access easy. The scheme is expected to improve the overall ratings on the standard of living and health conditions of the targeted group of citizens.

Source : Thehindubusinessline
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Bank officers serve notice for strike on Dec 11

The All-India Bank Officers’ Confederation (Aiboc) has given a call for a nationwide strike on December 11 in support of its various demands.

The notice of strike has been served by mail to all concerned, says Harvinder Singh, general secretary, Aiboc.

The one-day strike will be preceded by other types of protests including wearing of black badges while on duty on December 2; demonstrations at the headquarters of all banks on December 4; and mass demonstrations at major centres and state capitals on December 7.


Singh recalled that the Joint Note for the 1oth bipartite settlement was signed on May 25 but many issues were left pending on the assurance of the Indian Banks’ Association (IBA) that action would be taken without delay.

Among these are issues pertaining to retirees covered in the record cote; disciplinary matters; calling officers for work on Sundays/holidays; and anomaly in stagnation increments.

Singh said even settled issues of medical aid and reimbursement of medical expenses for retired employees through insurance, have not been implemented.

Despite the lapse of six months and our several reminders, no steps have been taken by the IBA to resolve them.

There is no move either to start negotiations or restart discussions, Singh said. The IBA has not extended even the normal courtesy of acknowledging Aiboc communications.


These apart, the Centre is announcing and implementing policies based on the recommendations of PJ Nayak Committee to dilute stake in public sector banks; privatise them through denial of capital; put up a Banking Bureau Board; deliberately delay appointment of officer-directors on boards; pick private entrepreneurs as MDs and chairmen in Banks; and permit FDI.

But it has not cared to move decidedly to recover debts from wilful defaulters even as more leeway is being provided to them via asset reconstruction companies and strategic debt restructuring.

Singh also alluded to non-implementation of the understanding between Dhanlaxmi Bank Officers’ Organisation and the management reached in the presence of the Kerala Home Minister and trade union leaders.

In view of these, the executive committee of Aiboc felt that any delay in deciding on direct action will harm the interests of public sector banks and the job security of employees.

Also, there is a need for a re-look at the 10th bipartite settlement in view of the recommendations of 7th Pay Commission and salary settlement of LIC employees.

Source : Thehindubusinessline
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Monday, November 9, 2015

Andhra Bank seeks to sell $209 mn worth bad loans to ARCs

State-run Andhra Bank is seeking to sell bad loans worth about 13.88 billion rupees ($209 million) to asset reconstruction companies, according to a newspaper advertisement on Monday.

The bad loans are in 29 accounts, the bank said in the advertisement.

Andhra Bank
on Saturday reported a 74 per cent increase in its second-quarter net profit to 2.51 billion rupees from a year earlier. Its gross bad loan ratio eased to 5.71 per cent from 5.75 per cent in the first quarter. ($1 = 66.4200 Indian rupees)

Source : Thehindubusinessline
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Govt to revise small savings rate by month end

Government is likely to reduce the interest rates on small savings schemes by the end of this month with a view to aligning them with the market rates.

“The government will take a decision on reducing small savings rate by the end of this month,” a Finance Ministry official said.

The ministry in September had announced its intention to review interest rates on small savings, which includes Post office savings and Public Provident Fund (PPF), after bankers said high rates on such schemes run by the government make fixed deposits of banks uncompetitive.

The government may leave the interest rates on Senior Citizen’s Savings Scheme and Sukanya Samriddhi Accounts unchanged.

With small saving deposits commanding a rate of 8.7-9.3 per cent, banks have been reluctant to transmit the entire policy rate reduction by the RBI to borrowers.

The median base lending rates of banks have come down by about 60-70 bps despite extremely easy liquidity conditions, which is a fraction of the 125 basis points of the policy rate reduction since January.

Small saving schemes include Post Office Monthly Income Scheme (MIS), Public Provident Fund (PPF), Post Office Fixed Deposit Scheme, Senior Citizen’s Savings Scheme, Post Office Savings Account and Sukanya Samriddhi Accounts.

Source : Thehindubusinessline
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Allahabad Bank Q2 net up at Rs 177 cr

Allahabad Bank has reported a net profit of Rs. 177.10 crore during the second quarter to September 30, 2015 against Rs. 141.44 crore in the corresponding quarter last year. The bank's gross NPA stood at Rs. 7,985.75 crore (Rs 7,674.27 crore).

Source : Thehindubusinessline
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Friday, November 6, 2015

Vijaya Bank opens Retail Assets Processing Centre at Ahmedabad

Vijaya Bank plans to increase its branch network in the Ahmedabad Region by adding three more branches during this financial year. The bank plans to scale up its business from Rs. 5,191 crore as of September 2015, to cross Rs. 7,000 crore by the end of the fiscal.

At the launch of Retail Assets Centralized Processing Centre (RACPC) at the Regional headquarters at Ahmedabad, A Murali Krishna, Deputy General Manager and Regional Head, Vijaya Bank, informed that the bank plans to more than double its home loan advances from Rs. 38 crore last year to Rs. 75 crore this fiscal. The average ticket size for home loan at Ahmedabad Region is Rs. 14 lakh.

The Ahmedabad Region has nearly 100 per cent credit deposit ratio. In its total advances portfolio of Rs. 2,500 crore currently, corporate advances stands at Rs. 1,200 crore. Retail segment advances stand at Rs. 347 crore, which the bank expects to increase to Rs. 450 crore.

Source : Thehindubusinessline
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PNB shifting gears to become a retail bank in big way

Punjab National Bank (PNB) is "shifting gears" to change itself into a retail bank in a big way, Usha Ananthasubramanian, Managing Director and CEO, has said.

As part of risk diversification strategy, the bank will focus on expanding the share of "small value loans” in its balance sheet, Usha said at a press conference to announce the second quarter results.

Special focus will be on retail loans. There is ample room for PNB to expand its retail loan book and this would be the way forward, she said.

For the second quarter ended September 30 this year, PNB on Friday reported a 7.9 per cent increase in net profit at Rs. 621 crore (Rs 575 crore). For the half year ended September 30, PNB's net profit stood at Rs. 1,342 crore.

On non performing assets, Usha said that the picture was better than the first quarter and the trend was in the direction of reducing NPAs.

In a change of tack, PNB has now decided to look at selling stressed assets to asset reconstruction companies (ARCs).

For the last 5-6 years, PNB had desisted from selling assets to ARCs.

"It is very difficult to say where we will land on the NPA front when we close the current fiscal. One thing is for sure, we are seriously focused on reducing NPAs and improving recoveries", she said.

Source : Thehindubusinessline
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SBI reports 25% jump in Q2 net profit to Rs. 3,879 cr

State Bank of India (SBI), the country’s largest bank, reported a 25% jump in net profit for the July to September quarter to Rs. 3,879 crore. The profit was driven by a jump in other income due to strong performance of treasury operations and lower provisions for bad loans.

Net profit for the second quarter of the last fiscal year was at Rs. 3,100 crore.

Net interest income, difference between interest earned and expended, was at Rs. 14,253 crore , up 7 per cent from Rs. 13,275 crore in the comparable quarter last year. Other income rose 36% to Rs. 6,197 crore compared to Rs. 4,750 crore in the second quarter last year.

Asset quality at the bank improved for the bank as against the trend of a number of public sector banks.

Bad loans

Gross non-performing assets (NPAs) were at 4.15 per cent at the end of the September quarter compared to 4.29 per cent at the end of the June quarter and 4.89 per cent in the same quarter last year.

During the July-September quarter, the bank set aside Rs. 3,842 crore as provisions for bad loans compared to Rs. 3,359 crore in the April-June quarter. Compared to the second quarter of last year, provisions were 7 per cent lower.

Post-provisioning, net NPAs were at 2.14 per cent of total loans compared to 2.24 per cent in the June quarter and 2.73 per cent in the September 2014 ended quarter.

At 1.15 pm, shares of SBI were trading 2.4 per cent higher at Rs. 239.85 per share on the BSE.

Source : Thehindubusinessline
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Bank of Baroda Q2 profit tumbles as provisions spike

Bank of Baroda Ltd's, India's second-biggest state-run lender by assets, second-quarter profit slumped about 89 per cent on Friday, hit by a sharp rise in provisions as bad loans jumped.

Shares in the Mumbai-based bank, which in August became one of the first state owned lenders to appoint a private sector chairman, tumbled almost 10 per cent at the market open. At 10.10 am, the stock was down 3.3 per cent or Rs. 5.40 at Rs. 154.10 on the BSE.

Net profit fell to Rs. 124 crore ($18.9 million) for its quarter ended September 30 from Rs. 1,104 crore reported a year earlier, the Mumbai-based lender said in a statement on Friday.

The gross bad loan ratio for the quarter rose to 5.56 per cent, a jump from 4.13 per cent in the previous three months and 3.32 per cent in the same quarter a year earlier.

Source : Thehindubusinessline
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Union Bank net zooms 77% at Rs. 658 cr

Union Bank of India today reported a massive jump of 77 per cent in its net profit to Rs. 658 crore for the September quarter.

The bank had reported net profit of Rs. 371 crore in the July—September quarter of the previous fiscal.

Global business grew by 7.4 per cent to Rs. 5,84,687 crore as on September 30 of the current fiscal, while deposits soared by 10.2 per cent to Rs. 3,30,665 crore, Union Bank said in a statement.

Advances grew by 3.9 per cent to Rs. 2,54,022 crore.

Net interest income for July—September quarter of 2015—16 increased by 0.8 per cent to Rs. 2,102 crore from Rs. 2,085 crore in the same quarter of last fiscal.

Source : Thehindubusinessline
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Vijaya Bank Q2 net drops 20% to Rs. 115 cr

Vijaya Bank on Friday reported a 19.80 per cent fall in its July-September quarter net profit at Rs. 115.29 crore, impacted by higher provisions.

The bank had registered a net profit of Rs. 143.75 crore in the corresponding quarter last year.

Total income of the bank stood at Rs. 3,202.89 crore for the quarter ended September 30, 2015 from Rs. 3,253.75 crore in the corresponding quarter a year ago.

“Even though there is increase in the operating profit, but because of the increased provision net profit has come down. This quarter we had to make a provision of Rs. 283 crore, out of that Rs. 272 crore was only on account of NPAs. Because of the increased provision for NPAs, net profit has come down,” Vijaya Bank MD & CEO Kishore Sansi told reporters here.

“Net slippage is around Rs. 600 crore in this quarter and most of it has come from infrastructure and large corporates,” he added.

The bank’s gross NPA ratio as on September 30 was 3.98 per cent against 2.85 per cent during the corresponding period last year, while the net NPA stood at 2.84 per cent as against 1.88 per cent last year.

The provision coverage ratio was at 58.28 per cent at the end of September quarter.

Net interest income for three months ended September 2015 increased to Rs. 692.55 crore from Rs. 578.70 crore for the corresponding period last year, up by 19.67 per cent.

Other income of the bank increased from Rs. 169.85 crore in the second quarter of last fiscal to Rs. 193.93 crore for the corresponding period this year, up by 14.18 per cent.

CASA of the bank increased from Rs. 23,348 crore as of September 30, 2014 to Rs. 25,311 crore this year, up by 8.41 per cent. The percentage of CASA deposits also improved to 20.53 per cent from 18.95 per cent.

Responding to a question on plans to raise capital, Sansi said “We had requested government of India to infuse about Rs. 400 crore of capital. They may take a decision either by end of this quarter or early next quarter, but any case we have a plan to go in for tier-I capital of about Rs. 200 crore and tier-II of about another Rs. 200 crore in the coming quarter.”

“Our objective is to reach a figure of about 11.5 per cent CRAR by March 2016,” he added.

The bank said its total number of branches increased to 1,755 as on September 30 this year, while total number of ATMs stood at 1,496.

Source : Thehindubusinessline
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PNB net profit rises 8% to Rs 621 cr in Q2

Punjab National Bank today reported 8 per cent rise in standalone net profit to Rs 621.03 crore for the second quarter ended September 30, 2015—16.

The bank had posted net profit of Rs 575.34 crore in the same quarter of the previous financial year.

Interest earned was Rs 12,345 crore for the July-September quarter of the current fiscal, as against Rs 11,462 crore in the year-ago period.

The bank’s provisioning was higher at Rs 1,882 crore as opposed to Rs 1,768 crore a year ago.

PNB’s total income has increased from Rs 13,020.46 crore in July-September quarter of 2014-15 to Rs 13,701.93 crore for the same quarter of the current fiscal.

Source : Thehindubusinessline
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Tuesday, November 3, 2015

Yes Bank, IndusInd Bank in fray for GE Capital Asset

Global diversified conglomerate General Electric is in the midst of exiting most of its financial assets to concentrate on its industrial segments as part of a global strategy and its India divestment strategy is picking up pace, as sources tell ET NOW that GE Capital India's medical equipment financing business is on the block and has attracted the attention of top private sector banks.

" Yes Bank and IndusInd Bank are amongst suitors in the fray for the asset and currently multiple suitors are conducting due diligence," a source privy to ongoing negotiations told ET NOW.

Explaining the deal rationale, another source added " This asset will be attractive to banks who want access to the current accounts of several leading hospitals and doctors in a bid to improve their CASA ratio. This is a sun-rise sector and moreover represents a safe investment, as there are HNI's involved who are covered by insurance and generally, these loans are not defaulted."

According to the company website, GE Capital India offers affordable purchase plans for the purchase of a wide array of healthcare equipment relating to diagnostic imaging, surgery and clinical systems.

In response to an email query from ET NOW, a Yes Bank spokesperson said, "Yes bank as a policy does not comment on market speculation. However we do remain open to evaluating opportunities which are aligned to Yes bank's strategic focus." IndusInd Bank declined to comment and GE responded saying , " At GE, we do not comment on speculation."

Source : Economic Times
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Lakshmi Vilas Bank launches co-branded credit card

Lakshmi Vilas Bank (LVB) today launched a co-branded credit card in partnership with SBI Cards and Payment Services, commemorating LVB's 90th anniversary.

The Tamil Nadu-based bank had partnered with payment solutions provider SBI Cards and Payment Services to offer its first Lakshmi Vilas Bank-SBI Credit Card, a top official said.

"This is a win-win concept for us. For the first time we are launching this co-branded credit card. We would like to take this relationship (with SBI Cards and Payment Services) to much greater levels," LVB Chief Operating Officer A J Vidyasagar told reporters.

He said the bank along with SBI Cards would leverage each other's strengths and offer the credit cards -- Visa Platinum Credit Card and Visa SimplySAVE credit card -- to customers.

"Initially, we are targeting to cover 10,000 customers".

SBI Cards and Payment Services is a joint venture between State Bank of India and GE Capital.

SBI Cards currently has a subscriber base of 3.2 million customers and 10 per cent of it constitute customers who have co-branded credit cards, SBI Cards and Payment Services Chief Executive Officer Vijay Jasuja said.

"We have been growing very aggressively over the last two years. By partnering with them (Lakshmi Vilas Bank), we have added another feather in our cap," he said.

LVB also unveiled a health and wellness solutions to customers under its tie-up with Cigna TTK Health Insurance.

A mobile application, LVB Mobile, allowing customers to make banking transactions through mobile phones was also launched on the occasion.

Source : Economic Times
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Suresh N Patel is new MD & CEO of Andhra Bank

Suresh N Patel has assumed charge as Managing Director and CEO of Andhra Bank.

According to a release issued here, Patel assumed charge in New Delhi on Monday.

Patel, who had started his career in banking as an agricultural officer in Dena Bank in 1981, had earlier served as executive director of Oriental Bank of Commerce and has diverse experience in various roles.

A graduate in science and law, he is also a certified member of Indian Institute of Bankers.

Source : Thehindubusinessline
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Finance Ministry makes 4 CEO-level appointments at public sector banks

The Finance Ministry has appointed new chief executives in four public sector banks.

Mahesh Kumar Jain, currently executive director at Indian Bank, has been elevated as Managing Director & CEO of the bank. He has been appointed for a period of three years.

The Finance Ministry has also appointed Suresh N Patel as Managing Director & Chief Executive Officer (CEO) of Andhra Bank. Prior to this appointment, Patel was an executive director at Oriental Bank of Commerce (OBC).

Ravi Krishan Takkar, who was executive director at Dena Bank, has now been appointed as Managing Director & CEO of UCO Bank for a period of three years.

The Finance Ministry has also appointed Jai Kumar Garg, Executive Director at UCO Bank, as MD & CEO of Corporation Bank. Garg will assume charge on or after February 1 next year.

Source : Thehindubusinessline
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Wednesday, October 28, 2015

UAE bank NBAD purchased RBS's offshore loan book in India

National Bank of Abu Dhabi( NBAD), the largest lender by assets in the United Arab Emirates, bought Royal Bank of Scotland's offshore loan book in India for 3 billion dirhams ($816.8 million) in October, the bank's chief executive Alex Thursby said in a conference call on Wednesday.

The bank is planning to start operations in India next week.

Source : Thehindubusinessline
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Sundaram BNP Paribas posts 27% rise in net profit

Sundaram BNP Paribas Home Finance has reported a 27 per cent increase in its net profit for the second quarter ended September 30, 2015 at Rs. 40.52 crore.

Income from operations rose marginally from Rs. 238 crore to Rs. 242 crore during the second quarter. The company had disbursed Rs. 450 crore in this quarter compared with Rs. 537 crore in the same quarter last year.

Srinivas Acharya, Managing Director, Sundaram BNP Paribas Home Finance, said in a press release that the real estate sector continues to be sluggish.

He said, "The recovery has been delayed and still seems at least a few months away. We are continuing to witness stiff resistance from buyers and the quantum of unsold stock remains a concern. Improvement in hiring sentiments, especially in the IT sector, could trigger a recovery in the home buying space later this year."

Sundaram BNP Paribas Home Finance Ltd.
is a 50.1% - 49.9% joint venture between Sundaram Finance and BNP Paribas of France.

Source : Thehindubusinessline
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Syndicate Bank Q2 net up at Rs. 332.4 cr

Syndicate Bank has reported a 5.3 per cent growth in net profit for the September quarter on higher interest income and lower provisioning.

The Manipal headquartered public sector bank reported a net profit of Rs. 332.37 crore for the quarter ended September 30, 2015 agasint Rs. 315.60 crore in the corresponding quarter last year.

Net interest income, the difference between the interest earned and expended, grew 12 per cent to Rs. 1,594.75 crore from Rs. 1,422.48 crore in the corresponding period last year. Operating profit for the quarter was up 28 per cent at Rs. 1,225.30 crore against Rs. 953.87 crore in the corresponding last quarter.

Gross non performing assets grew to Rs. 7,734 crore (3.72 per cent of total advances) for the September quarter against Rs. 6,048.98 crore (3.43 per cent) in corresponding quarter last year. Net NPAs were up at Rs. 4,854.50 crore (2.37 per cent of the advances) against Rs. 3,825.32 crore (2.20 per cent). Syndicate Bank's provision coverage ratio stood at 63.37 per cent as of September 2015.

Syndicate Bank
scrip was trading 2 per cent lower at Rs. 95.25 on the BSE tracking the earnings announcement.

Source : Thehindubusinessline
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MUDRA sanctions Rs. 100 cr refinance to SKS Microfin; scrip zooms 5.52%

Micro Units Development and Refinance Agency Ltd (MUDRA) has sanctioned a refinance line of Rs. 100 crore for SKS Microfinance at 10 per cent interest per annum.

"This is the first refinance line availed by us,'' S Dilli Raj, President of SKS Microfinance said in a release issued here on Wednesday.

At a rate of 10 per cent, this was lower than the regular term loans from conventional lenders. ``We are already the lowest cost lender in MFI segment,'' he added.

The development is expected to bring down the cost of interest bearing liabilities for SKS, the only listed MFI in the country.

SKS scrip gained 5.52 per cent on the Bombay Stock Exchange after opening of the trade and was trading at Rs. 422.25.

Source : Thehindubusinessline
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Pradeep Gupta elevated as State Bank of India MD

The Central Government has appointed Pradeep Kumar Gupta as the new Managing Director of State Bank of India (SBI), the country’s largest bank.

Gupta will succeed P Pradeep Kumar, who will superannuate on October 31 this year, the bank said.

At present, Gupta is the Deputy Managing Director at SBI and will take over the post on or after November 1, 2015 and up to March 31, 2020, the date of his superannuation, or until further orders, whichever is earlier, the bank statement said.

Source : Thehindubusinessline
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Monday, October 19, 2015

PNB slashes car loan rates for women borrowers

Punjab National Bank (PNB) has cut the car loan rates for women borrowers from 9.85 per cent to 9.75 per cent.

The bank also announced that housing loan is available to women borrowers at 9.60 per cent for any amount for the longest repayment period of 30 years.

PNB had recently cut its base rate to 9.60 per cent with effect from October 1.

Base rate is the minimum rate below which a bank cannot lend.

Source : Thehindubusinessline
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South Indian Bank Q2 net up 22.4%

The Kerala-based South Indian Bank has posted a 22.38 per cent growth in its net profit at Rs. 93.38 crore in Q2 of FY16. Net profit in the corresponding period for the previous year was Rs. 76.30 crore.

V G Mathew, Managing Director and CEO, told reporters here on Saturday that the consistency in achieving operating profit, treasury operations and other income have significantly contributed for the growth in net profit in the second quarter.

Total business increased by Rs. 10,687 core to Rs. 93,251 crore, registering a 12.94 per cent YoY. Deposits increased by 13.58 per cent to Rs. 53,036 crore and advances increased by Rs. 4,344 crore to Rs. 40,215 crore, a growth of 12.11 per cent.

CASA of the bank increased by Rs. 1,757 crore, registering a growth of 17.03 per cent, and it now stands at 22.76 per cent of total deposits.

However, there was a growth in net NPA in the second quarter at 1.39 per cent against 0.9 in the corresponding period last year. This is because certain sectors like infrastructure, power, steel etc did not turnaround as expected, he said. “We are making efforts to recover the loans extended to these sectors and it will be reflected in the next quarter”, he added.

The bank has been focusing on various retail sectors for asset growth, which registered a substantial growth. Agri and MSME advances increased by 26 per cent, and home loan auto loan portfolios also increased by 38 per cent and 53 per cent respectively, he said.

Source : Thehindubusinessline
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Friday, October 16, 2015

‘Payments bank, a historic opportunity for India Post’

“Trust me ladies and gentlemen, India Post will soon be a force to reckon with. Until now we (India Post) were seen as a slumbering giant. Not anymore. We have woken up. This time we are not going to give it up, as payments bank presents a historic opportunity for India Post.”

So said MS Ramanujan, Member (Banking & HRD), Department of Posts, at the 3rd Financial Inclusion symposium organised by dun & bradstreet, exuding confidence about India Post regaining its spot under the sun.

“It’s very exciting for us as the payments industry is going to be like skating on thin ice. We don’t know who will fall by the wayside, when there will be a bloodbath, and what kind of pricing/revenue models will emerge,” he said, adding that this will be a game of high volumes and wafer-thin margins.

India Post is among the 11 successful applicants that recently got in-principle nod for a payments bank licence from the Reserve Bank of India.

The new entity will be registered as a company and will be called ‘India Post Payments Bank’. It will have an initial capital of Rs.300 crore, much more than the minimum of Rs.100 crore stipulated by the RBI.

“We will soon approach the Cabinet for approval,” Ramanujan told BusinessLine here.

Types of payments

The bank will undertake the following types of payments: P2P (people to people) — involving, say, remittances; C2G (citizen to government) — taxes, duties, levies, and so forth; C2B (customer to bank) — e-commerce-related payments, among others; and G2C (government to citizen) — such as direct benefits transfer payments.

One thing is certain — India Post will fully leverage the existing postal network (technology, personnel, etc) for its payments bank foray. However, the bank will have a separate logo.

As on date, nearly 7,000 full-services branches of the postal department are under core banking solution (CBS). By March-end 2016, all the 25,000 full-services branches of India Post will be under CBS, Ramanujan said.

Source : Thehindubusinessline
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SBI Mutual Fund’s AUM likely to cross Rs 1 trillion-mark soon

Assets under management (AUM) of SBI Mutual Fund has crossed Rs.98,000 crore and is soon likely to cross Rs.1 trillion-mark, its managing director said today.

“At SBI MF, we have recently crossed the AUM of Rs.98,000 crore and we are all set to cross the mark of Rs. 1 trillion in near future,” SBI MF Managing Director and CEO Dinesh Khara told PTI here.

He was speaking on the sidelines of an event organised by Indian Chamber of Commerce.

In its bid to increase the subscriber base, the company is currently conducting a host of activities which include making its presence felt in every part of the country through independent financial advisors (IFAs), among others.

“We are currently doing multiple things so as to bring more and more subscribers on board. While we are focusing on online sale, we are also trying to have our presence through IFAs in every nook and corner of the country,” he said.

Talking about the progress of ongoing SBI Equity Opportunities Fund-Series IV, he said, “We have seen good response coming from the investors for the close-ended scheme, which opened on October 7 and will come to a close on October 21.”

Source : Thehindubusinessline
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Federal Bank's missed call banking service

Federal Bank has launched another digital service called Missed Call Banking, a simple way to get account balance on mobile.

The service enables customers to get their account balance by giving a missed call to a dedicated mobile number. To avail the facility, customers have to do a onetime registration by sending an SMS (ACTBAL14 Digit account number) to 9895088888 from their mobile number registered with the bank.

Upon successful registration, the customer will receive an instant confirmation message. Thereafter, a simple missed call to 8431900900 will be enough to get the account balance instantly through SMS. This service is free and available 24X7.

Being SMS-based, the Missed Call Banking service can be availed by all customers. It is not essential to have a smart phone or a high end devise as any mobile handset will do. Also there is no need for internet connection, K A Babu, Head-Retail Business said.

Source : Thehindubusinessline
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Expansion pace eased on investor feedback: DCB bank MD

After facing investor flak, private sector lender DCB bank decides to change gears on the pace of its branch expansion to open 150 branches in 24 months from 12 months as decided earlier.

Shares of the bank fell 30 per cent since October 13, when the bank announced its results in which it laid out its plans to double its branch network in the next one year. Fearing its profit would shrink on such a plan, the market gave its negative feedback which affected the stock price.

In a statement to the exchanges, DCB bank said, “In view of the feedback received, and in close consultation with our Chairman, the management team has decided to install 150 plus branches in a cautious, prudent and calibrated manner over a period of 24 months (instead of 12 months).”

In its earlier expansion plans, the bank had said that its expansion plan of over 150 branches in the next one year is likely to break even in 24 to 30 months and payback in 44 to 50 months. In addition, it pointed out that, “The cost to income ratio, ROA (return on assets) and ROE (return on equity) will get negatively impacted due to the gestation period of the new 150+ branches. In the coming 24 to 30 months, depending on the speed and quality of implementation, we expect cost to income ratio to worsen by 5-11 per cent, ROA may be in the range of 50-60 bps and ROE may continue to be below 10 per cent.”

Answering the media and investors in the past 2-3 days, DCB Bank’s MD and CEO, Murali Natrajan said, “We as a management team are employees who are answerable to the bank’s stakeholders – customers, investors and employees. It is important to create value for them and we have to be sensitive towards investor feedback.”

It is more of pacing out of our investments and see it can take less risks and be cautious on our expansions. We met quite a lot of investors and they appreciated our strategy on the 150 plus branch expansion… Any plan has a risk element associated with itself. We have created a brand that is cautious. We have been growing at a pace of 25-30 branches per annum… So, we have to change gears, it has to be in a slightly more phased manner,” he added.

After the alteration in the expansion plan, DCB scrip ended higher by 3.7 per cent at Rs 95.80 per share on the BSE.

According to Natrajan, the bank is in a better position today than in the past 2-3 years.

Without commenting on the stock price, Natrajan said, “We have been discussing this for the past 6-8 months and thought we must accelerate our expansion. The product mix and portfolio remain the same.”

Giving an analogy of how a passenger of a car is as much a part of a ride as is the driver, Natrajan added that “as a bank we have to be sensitive to our stakeholders and are responsible to investors as well. After all, they provide capital to the bank. If we can act on our customer and employee feedback, why not on our investors.”

Source : Thehindubusinessline
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Thursday, October 15, 2015

Lakshmi Vilas Bank Q2 net profit jumps 42% as bad loans fall

Lakshmi Vilas Bank has reported a 42 per cent rise in net profit for the September quarter at Rs. 45 crore as against a profit of Rs. 31.50 crore in the year ago quarter.

Net interest income grew to Rs. 160 crore, up by 19 per cent from Rs. 134 crore in the same quarter a year ago. Other income rose marginally to Rs. 64 crore as against Rs. 63 crore in the June to September period in FY14.

The asset quality of the bank improved with gross non-performing assets (NPA) substantially down to 1.89 per cent from 3.72 per cent as on September 30, last year. The Net NPA of the bank also reduced to 1.01 per cent from 2.78 per cent on a year-on-year basis.

As on September end, 2015, total advances increased by 28 per cent year-on-year to Rs. 17,574 crore, while total deposits grew 21 per cent to Rs. 23,445 crore.

Shares of Lakshmi Vilas Bank ended the day higher at Rs. 91.10 (+Rs 2.25 or 2.53 per cent) on the BSE.

Source : Thehindubusinessline
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Karur Vysya Bank net surges 57% to Rs. 142 cr in Q2

Karur Vysya Bank today posted a 57.14 per cent jump in net profit at Rs. 142.22 crore for the second quarter ended September 30.

The bank had recorded a net profit of Rs. 90.50 crore in the corresponding quarter last fiscal, Karur Vysya Bank said in a regulatory filing.

The total income of the lender also increased to Rs. 1,570.27 crore during the quarter from Rs. 1,494.86 crore over the corresponding period of 2014—15 fiscal.

During the quarter, the gross non—performing assets (NPAs) rose to 1.96 per cent from 1.36 per cent at the end of second quarter of 2014—15.

Net NPA of the bank also increased to 0.96 per cent from 0.59 per cent of the total assets.

The shares of the bank were trading in the afternoon at Rs. 430 down 3.78% on the BSE.

Source : Thehindubusinessline
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Wednesday, October 14, 2015

HDFC Bank suspends official involved in Bank of Baroda scam

Amid the alleged involvement of HDFC Bank official Kamal Kalra in the Rs. 6,000-crore illegal remittances, the private sector bank has suspended Kalra pending the investigation.

The scam involves Rs. 6,000 crore illegal remittances that have suspected to be flown out from Bank of Baroda's Ashok Vihar branch in New Delhi to Hong Kong and Dubai.

In a statement, HDFC Bank said, “The bank has a zero-tolerance policy for any misconduct on the part of its staff and any deviation from its clearly defined processes is viewed very seriously. Swift action is taken both at an organizational and employee level, and as per process the employee in question has been suspended pending the outcome of the investigation.”

”In response to reports relating to investigations against one of our employees, we would like to state that the matter is being examined internally on top priority. The Bank is also extending its full cooperation and support to the authorities as they conduct their investigations,” the statement further adds.

As per the investigation so far, both Central Bureau of Investigation and Enforcement Directorate have arrested six persons including Kalra, who is HDFC Bank’s Forex Sales Manager in the forex department, for the alleged money laundering.

While CBI arrested Suresh Kumar Garg, the assistant general manager of Ashok Vihar Branch and Jainis Dubey, the foreign exchange head, the persons arrested by the Enforcement Directorate include Kamal Kalra, Chandan Bhatia, Gurucharan Singh and Sanjay Aggarwal, who were allegedly involved in the transaction of 15 accounts.

Bhatia, Singh and Aggarwal are said to be owners of companies based in Hong Kong and Dubai towards which the money was being transferred through 59 accounts at the bank's Ashok Vihar branch.

Meanwhile, Bank of Baroda’s internal investigation had detected irregularities in foreign exchange transfers from said branch and also suspended five officers. The public sector bank has also changed the concurrent auditor firm of the specific branch.

“The investigation currently underway pertains to 59 current accounts, which were opened during the period between May 13, 2014 to June 20, 2015 and were used for outward foreign remittance transactions aggregating to $576 million (Rs 3,672.30 crore) predominantly for the purpose as “Advance remittance for imports” to overseas parties numbering about 418, mainly based in Hong Kong,” Bank of Baroda had said on Tuesday.

“It is pertinent to note that less than 10 per cent (Rs 343 crore) of the amount involved had been deposited in these accounts by way of cash and balance 90 per cent amount had been received through RTGS / NEFT from 51 different banks. Bank would also like to clarify that while the investigations are underway, at the current stage, it does not envisage significant financial losses on account of this incident,” it added.

There are many unanswered questions which continue to be probed, such as opening of current accounts in spite of inconclusive KYC process in some cases, individual failure of detection of irregularities, non-follow up of system alerts to track exceptional transactions and reasons for the long lead time to identify these irregularities.

The newly appointed MD & CEO, P.S. Jayakumar said, “My utmost priority is to examine the current situation and bring about the necessary changes within the bank to ensure such unfortunate incidents do not recur. This will include the appointment of an external accounting firm for full review of our KYC norms and its effectiveness across all branches…”

Source : Thehindubusinessline
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Bank of Baroda chairman meets Jaitley

The Finance Ministry on Wednesday took stock of the alleged Rs. 6100 crore remittance scam in public sector Bank of Baroda.

Newly appointed chairman of BoB Ravi Venkateshan also met Finance Minister Arun Jaitley.

"It was a courtesy meeting with the Finance Minister. Investigations are onit would be inappropriate to say anything” he said after the meeting.

However sources said the case is likely to be probed by the Serious Fraud Investigations Officethe amount of fund alleged to be involved could be lesser than estimated.

Checks would be made over the entire banking system to prevent such cases in the future.

"Our new Managing Director PS Jayakumar and I will together try to restore the Bank's image which has taken a hit due to the case" Venkateshan said.

Jayakumar took over as BoB Managing Director and CEO of BoB on Tuesday.

Source : Thehindubusinessline
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Jan Dhan deposits cross Rs 25,000 cr

In a big boost to the government’s financial inclusion agenda, deposits in bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have exceeded Rs.25,000 crore.

“As on October 7, the deposits collected stood at Rs.25,146.97 crore,” said the Finance Ministry in a statement, adding that zero-balance accounts are now less than 40 per cent of the total accounts. The ministry said State Bank of India, United Bank of India and Oriental Bank of Commerce are the major contributors to PMJDY.

Source : Thehindubusinessline
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DCB Bank Q2 net dips 10%

Private sector lender DCB Bank reported a 10 per cent decline in net profit to Rs.37 crore in the second quarter ended September 2015 mainly due to higher provisioning and tax expenses.

Provisioning towards bad loans and other contingencies rose 58 per cent to Rs.22 crore as against Rs.14 crore a year ago.

Tax expenses rose nearly four-fold to Rs.20 crore from Rs.5 crore in the corresponding quarter last fiscal.

Net interest income, the difference between interest earned and interest expended, grew 27 per cent to Rs.150 crore ( Rs.118 crore a year ago), led by strong growth in advances. Non-interest income rose 32 per cent year-on-year (y-o-y) to Rs.49 crore.

Net interest margin improved a tad to 3.79 per cent (3.72 per cent).

As on September-end, advances grew 27 per cent y-o-y to Rs.11,180 crore, while deposits spiked 24 per cent to Rs.13,557 crore.

NPAs up

Asset quality deteriorated with gross non-performing assets (NPAs) rising nine basis points y-o-y (up three bps q-o-q) to 1.99 per cent.

Net NPAs increased (down six bps on sequential basis) to 1.16 per cent in Q2 FY16 from 1.07 per cent in Q2 FY15.

Source : Thehindubusinessline
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Thursday, October 8, 2015

After IOB, RBI may pull up Allahabad Bank, Central Bank of India and Andhra Bank

The Reserve Bank of India may now turn its focus on Allahabad Bank, Central Bank of India and Andhra Bank as their dodgy loans and provision for loan losses are getting precariously close to that of Indian Overseas Bank's -the bank on which the central bank has imposed restrictions on branch expansion.

On Monday, the Chennai-based Indian Overseas Bank had informed the Bombay Stock Exchange that the RBI has initiated a Prompt Corrective Action (PCA) on the bank, which is triggered if bad loans rise above 10 per cent, capital adequacy ratio slips below 9 per cent, and return on assets falls below 0.25 per cent.

According to a report by Asian Markets Securities, in case of some public sector banks, the gross impaired loans -which includes gross non-performing assets and gross restructured loans -have crossed 15 per cent. This comes at a time when demand for credit has dried up and slippages continue to be at an elevated level which in turn could hurt banks' earnings.

The report says that as on March 2014-15, the gross impaired loans of Central Bank was 21.3 per cent, Andhra Bank's was 16.4 per cent, Allahabad Bank's was 16.6 per cent and Punjab National Bank's was 15.9 per cent. During the same period, the provision coverage ratio -the total provisions set aside to write off bad loans -is less than 60 per cent.

Banking experts said the move to impose PCA on Indian Overseas Bank was taken after the RBI inspected the bank and found several irregularities.

The bank cannot open new branches, declare dividend and recruit new employees without RBI's approval.

"However, the regu lator has not placed any restrictions on lending, which means that the regulator is more concerned about the way the bank is run," they added. In a notice to the ex change, the bank has said that "this action will not have any material impact on the growth prospects performance of the bank. The directions given by the RBI are for improving its internal controls and consolidation of its activities".

In the past, the central bank had initiated Prompt Corrective Action on United Bank of India after it came to light that the bank's bad loans were much more than declared.

The restrictions were, however, lifted after two years once its performance improved.

Source : Economic Times
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ICICI Bank launches in-store mobile-based payments with ‘mVisa’

ICICI Bank, India’s largest private sector bank, launched a service to enable customers to make electronic payments from their smartphones at physical stores, e-commerce and other deliveries at home, radio taxis, and utility billers, among others.

This service is based on ‘mVisa’, a new mobile payment solution from Visa. ICICI Bank claims to be the first bank globally to launch a mobile app-based ‘mVisa’ solution for consumers and merchants.

With this service, users of ‘Pockets’, ICICI Bank's app, can make cashless payments from their smartphones using their debit card by simply scanning an ‘mVisa’ Quick Response (QR) code at a merchant location without swiping the card at an EDC machine, the bank said in a statement.

This service provides customers the convenience of speed to complete a transaction along with enhanced security as the card remains in the possession of the customer.

To use this facility, a customer needs to click on the ‘mVisa’ icon on the home screen of the ‘Pockets’ app. The app automatically activates the camera in the phone, allowing customers to scan the QR code and enter their debit card PIN.

Rajiv Sabharwal, Executive Director, ICICI Bank, said: “...While there are 570 million debit cards in the country, there are only 1.1 million point-of-sale (POS) machines available for card payments. This restricts cashless payments to a certain category of merchants. We believe the simplicity of this technology will allow us to address this market gap and enable digital payments for an array of untapped categories such as home deliveries, cab services, and small merchants.”

TR Ramachandran, Visa Group Country Manager India and South Asia, said: “...The mVisa solution will enable consumers to engage in secure and convenient payments, and more easily access funds in their existing bank accounts to make everyday purchases and pay utility bills. mVisa will provide the benefits of electronic payments to thousands of consumers and small merchants across India, in line with the Government’s Digital India mission.”

To start with, this facility has been introduced in Bengaluru with 1,500 merchants and will shortly be extended to other cities.

The availability of electronic payments using debit cards through mobile phone is a new addition to ‘Pockets by ICICI Bank’, its own digital bank.

It also offers the most comprehensive digital wallet from a bank that allows anyone to download and start transacting instantly. The wallet allows users to send money using e-mail id, mobile number, Whatsapp, or bank account. Users can pay bills, recharge mobiles, book movie tickets, send physical and e-gifts, split and share expenses with friends.

‘Pockets’ uses a virtual Visa card which enables users to transact on any website or mobile application in India.

Customers can also request for a physical card to use it at any retail outlet. ‘Pockets’ has garnered over two million downloads in a few months since its launch, the bank statement added.

Source : Thehindubusinessline
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Banks can sanction 90% loan for property upto Rs 30 lac: RBI

Banks can now provide home loans up to 90 per cent for properties that cost Rs. 30 lakh or below, RBI said today.

Earlier, the facility was available only in cases where the cost was up to Rs. 20 lakh.

This will benefit those home seekers who plan to buy properties in the range of Rs. 20-30 lakh.

The RBI’s decision comes in the wake of all major banks reducing interest rate on home loans.

The Reserve Bank, through a circular, said that in the case of ‘individual housing loans’ falling under the loan category of up to Rs. 30 lakh, the LTV (Loan to Value) ratio is now up to 90 per cent.

For properties above Rs. 30 lakh and up to Rs. 75 lakh, the LTV is up to 80 per cent and those above Rs. 75 lakh, the ratio comes in at 75 per cent.

It has also modified the provisioning or risk-weights norms for home loans.

Source : Thehindubusinessline
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Wednesday, October 7, 2015

Bajaj Allianz Life ties-up with Dhanlaxmi Bank for distribution of products

Bajaj Allianz Life Insurance and Dhanlaxmi Bank have signed long-term agreement for a bancassurance partnership. As part of the agreement, the bank will continue to be a Corporate Agent for nine years and sell life insurance products of Bajaj Allianz Life Insurance.

Dhanlaxmi Bank has been a partner of Bajaj Allianz Life Insurance since 2009 and has done business worth nearly Rs. 400 crore. The relationship between Bajaj Allianz Life Insurance and Dhanlaxmi Bank started off with customised insurance solutions for the bank's customers.

Bajaj Allianz Life Insurance is a joint venture between Allianz SE, the world's leading insurer, and Bajaj Finserv Limited.

Dhanlaxmi bank is present through 678 touch points across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Delhi and West Bengal. All the life insurance products of Bajaj Allianz Life Insurance will be made available for the customers of Dhanlaxmi Bank and they will have the option to choose from the bouquet of different insurance solutions provided by Bajaj Allianz Life Insurance.

"Dhanlaxmi Bank has been one of our valued partners for nearly six years now and we aim to continue the strong relationship going forward. This partnership will help us leverage the existing synergies of the bank partner and its wide reach across the regions they operate in," said Anuj Agarwal, Managing Director & CEO, Bajaj Allianz Life Insurance.

"The 88 year long tradition of Dhanlaxmi Bank, equipped with modern technological capabilities, embellished with quality products of Bajaj Allianz Life Insurance, is set to form a strong partnership extending smart choice of investments to the customers," said G. Sreeram, Managing Director & CEO, Dhanalaxmi Bank.

Source : Economic Times
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Axis Bank realigns home loan rates; introduces new slab

Country’s third largest private lender Axis Bank, on Tuesday, introduced a new slab for its home loan borrowers with offers starting at 9.60 per cent onward.

The newly introduced slab is for loans up to Rs. 28 lakh, an official spokesperson of the bank said.

For salaried borrowers, home loans up to Rs. 28 lakh will come at 9.60 per cent, which is only 0.10 per cent over its revised base rate of 9.50 per cent, he said.

While the loans above Rs. 28 lakh will attract 9.65 per cent interest, he added.

The rates compare with rival ICICI Bank and HDFC’s offerings, which have been revised in the past two days, and are a shade expensive than SBI’s offering.

State Bank of India’s best offering for women is 9.50 per cent, while the same for other borrowers is 9.55 per cent.

Non-bank lender HDFC, which also announced a rate cut yesterday, is on par with ICICI Bank’s 9.60 per cent for women and 9.65 per cent for others.

Source : Thehindubusinessline
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J&K Bank slashes base rate by 35 bps to 9.5%

J&K Bank on Wednesday said that it has reduced its base rate by 35 basis points, making its loans cheaper for new as well as existing customers in Jammu & Kashmir and across the country.

The base rate of the bank stands reduced to 9.50 per cent from 9.85 per cent with immediate effect.

Maushtaq Ahmed, Chairman & CEO, J&K Bank announced this decision after the bank's Asset Liability Committee meeting at its Corporate Headquarters in Srinagar.

Source : Thehindubusinessline
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IRDAI chairman stresses on insuring all assets

There is a need to insure all assets of the country, according to T S Vijayan, Chairman of Insurance Regulatory and Development Authority of India (IRDAI).

He was speaking at a function organised by ICICI Lombard to mark the sale of one lakh long-term two-wheeler insurance policies here on Wednesday.

"'In the US, 80 per cent of assets are insured, while in India this is only at 7 per cent," he said.

Saying that there were 54 life and general insurance companies in the country, Vijayan said there is huge scope for increasing insurance penetration further.

The insurance penetration is less than 4 per cent of the country's GDP today.

Digitisation of policies to reduce the costs of distribution and speedy settlement of claims were important, he observed.

Bhargav Dasgupta, MD & CEO of ICICI Lombard, said response for the product offering long-term insurance was 'good '.

About 60 to 70 per cent of over 16 crore two-wheelers in the country did not have insurance, he added.

Source : Thehindubusinessline
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Tuesday, October 6, 2015

BoB, Andhra Bank, Legal & General infuse Rs. 150 cr in IndiaFirst Life

Bank of Baroda, Andhra Bank and Legal & General have together infused an additional Rs. 150 crore in their life insurance venture — IndiaFirst Life Insurance — taking the total share capital to Rs. 625 crore.

The equity infusion is proportionate to the shareholding pattern of the three entities, a statement from IndiaFirst Life said. Bank of Baroda holds 44 per cent, Andhra Bank 30 per cent, while Legal & General holds the remaining 26 per cent in IndiaFirst.

R.M. Vishakha, MD and CEO, IndiaFirst Life Insurance said, “This demonstrates the support, confidence and commitment of the shareholders to the company objective of ‘Securing Lives, Creating Value’ through an approach of Customer First. We believe in a balanced focus across diversified business channels to access various customer segments.”

The capital will be deployed to leverage the insurer's innovations on business channels and service delivery platforms, besides fuelling business growth.

Present in over 1,000 cities and towns across the country through 10,040 partner bank branches, the life insurer has covered over 9.5 million lives and has over Rs. 8,160 crore of AUM as on June 30, 2015.

Source : Thehindubusinessline
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Indian Overseas Bank shares skid 3% on RBI move

Shares of Indian Overseas Bank fell by nearly 3 per cent following the RBI announcing restrictions on the firm and taking “prompt corrective action” with the view to improve internal processes to deal with mounting non— performing assets.

The stock lost 2.27 per cent to Rs. 36.50 on BSE.

At NSE, shares of the company declined by 2.93 per cent to Rs. 36.35.

“The RBI has initiated a prompt corrective action on the bank and that this action will not have any material impact on the growth prospects or performance of the bank,” IOB had said in a regulatory filing yesterday.

The RBI has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) framework, in terms of three parameters —— capital to risk weighted assets ratio (CRAR), net NPA and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.

Gross NPA of the bank rose to 9.40 per cent for the quarter ended June 30.

IOB’s gross non—performing assets rose to 8.30 per cent at the end of March 31, from 4.84 per cent a year ago, according to the provisional RBI data taking into account domestic operations of banks.

Source : Thehindubusinessline
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HDFC mobilises Rs. 10,400 cr; NCDs, warrants list at big premium

In two highly successful offerings, mortgage giant HDFC Ltd has raised Rs. 5,000 crore from low— cost non convertible debentures (NCDs) and a further amount of about Rs. 5,400 crore would come in from warrants, both of which got listed with a huge premium today.

“Total amount we have received is Rs. 5,051 crore, including Rs. 5,000 crore from the NCD and Rs. 51 crore is the face value of the warrants, which on conversion will get us an additional Rs. 5,384 crore,” HDFC Vice Chairman and CEO Keki Mistry told reporters here.

Mistry said money raised through NCD issue will be deployed for regular lending purposes while the conversion of warrants will beef—up the capital, which is currently at “reasonably comfortable” levels in the future.

“The advantage of this instrument is that it gives us the ability to generate money today and generate capital at a future date,” Mistry said, adding that the need for capital can be necessitated due to a variety of reasons including balance sheet growth and also maintaining its stake in HDFC Bank.

The NCDs were offered at a coupon rate of 1.43 per cent, but were trading at 8.54 per cent in the debut trade today.

Similarly, the warrants generated total volumes of over three crore in the first day of trade on the BSE and the NSE.

As against the issue price of Rs. 14, the warrants were listed at a discovered price of Rs. 146.05 and closed at the upper circuit of 10 per cent at Rs. 160.65 at the two bourses.

The warrants also generated huge unsatisfied demand as they were locked in upper circuit.

Mistry said the NCD issue, which saw sale of 5,000 secured NCDs of the face value of Rs. 1 crore each, comes at a coupon of 1.43 per cent.

It issued 3.65 crore warrants at Rs. 14 per warrant, and the warrant holder has the right to exchange one warrant for one equity share of the company in the next three years at a pre—agreed price of Rs. 1,475.

The conversion price of Rs. 1,475 is a 25 per cent premium over the floor price as on September 30, determined by a formula announced by SEBI, he said.

Assuming all the warrant holders convert into equity, the dilution in the stock will not be over 2.2 per cent, he said.

Both the NCDs as well as the warrants were issued to qualified institutional buyers domestically, the company said, adding that the NCDs have been listed on both BSE and NSE.

HDFC’s scrip closed 0.17 per cent higher at Rs. 1,258.10 apiece on the BSE, as against a 0.55 per cent gains in the benchmark.

Source : Thehindubusinessline
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Bank of Maharashtra to raise Rs. 394 cr via pref shares to Govt

Bank of Maharashtra today said it has received shareholders’ approval to raise Rs. 394 crore by issuing 10.51 crore equity shares on preferential basis to the government.

“We have obtained the approval of shareholders for raising equity capital of the bank through preferential issue of 10,51,50,787 equity shares of the face value of Rs. 10 each at an issue price of Rs. 37.47 per share, including premium of Rs. 27.47 per share to the government aggregating to Rs. 394 crore,” the bank said in a statement.

The approval was given at the extraordinary general meeting of the shareholders of the bank today.

Post this issuance, the government’s holding in the bank would increase to 81.61 per cent from the existing 79.80 per cent.

Last week, eight public sector banks, including SBI, Punjab National Bank and Bank of Baroda, had allotted equity shares on preferential basis to the government against capital infusion of Rs. 13,955 crore.

Source : Thehindubusinessline
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Bank of Baroda investigating Rs 350-crore bill discounting fraud

India's second largest lender Bank of Baroda is investigating a bill discounting fraud running into Rs 350 crore.

The listed bank, which has suspended a senior official after it stumbled upon the irregularities in its Ahmedabad operations, will soon have to decide whether to provide the amount in the September-end earnings number.

A senior official of the government-owned institution told ET that the matter has been reported to the Reserve Bank of India. "There is a suspected fraud. An internal probe is on. If the money cannot be recovered, the bank will have to take a hit... An established company is involved, but I'm not in a position to disclose the name... We sensed something was wrong when a few bills bounced," said the person who declined to share details as an investigation is underway.

It is understood that one of the bank's offices in Ahmedabad ended up discounting bills against which the underlying trade transactions were fake or non-existent.

In typical bill discounting transactions, a bank buys the bill before it is due and credits the amount (after deducting certain discounting charge) to the customer's account. It's a facility that sellers and exporters avail of from banks to obtain finance. A fraud is perpetrated when typically a buyer and seller, acting in connivance, win the bank's confidence by carrying out a string of regular transactions where the buyer (either local or overseas) agrees to honour the payment. As these come across as normal trade transactions, the bank agrees to raise the bill discounting limit. After a default — when a buyer fails to pay up — the seller comes up with explanations like product defect or cash crunch faced by the buyer for non-payment.

Once the bank is convinced, the seller makes a new shipment, discounts a new bill and uses the proceeds to repay the bank for the previous transaction. As this is repeated for a few more shipments, the amount increases due to the interest cost.

While the specific modus operandi in the Bank of Baroda fraud is still unclear, it is possible that the customer concerned — which, according to a banker in Ahmedabad, is a textile company — had used a similar ploy.

Such frauds surface as increasingly larger amounts and frequent discounting evoke the bank's suspicion.

In recent times, the facilities offered by many banks for working capital have increasingly been misused by borrowers facing cash flow stress — in particular, the trade bills discounting facilities offered by banks has been a source of frequent 'kite flying' (without actual trade transactions) for funds generation by borrowers.

"At some point when the amount becomes too large to handle, the parties abruptly discontinue. Since in several cases, these are in the nature of unsecured finance, a bank may be left with no choice but to absorb the losses," said another banker.

Source : Economic Times
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