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Thursday, March 12, 2015

SBI offers personal loans to existing borrowers at housing loan rates

State Bank of India is offering a bonanza to its existing home-loan customers. They can take personal, or top-up, loans at the same rate that they are paying on home loans under a limited-period offer from the nation's top lender.

In effect, an existing borrower can take a personal loan at 10.15%, provided he had been paying his homeloan EMIs on time. For women, this will be even cheaper at 10.10%. The rates imply a 0.35-0.40 percentage point cut in the top-up loan rates that SBI has been charging.

It charges 13.50-18.50% on personal loans to other customers. A senior SBI official, who did not want to be named, said the rate on top-up loans was lowered to boost the bank's loan book. "Also it is a safe bet for the bank to attract their existing customers with good track record to borrow from them rather than approaching its rival banks."

The rate reduction comes at a time when RBI has signalled a softer interest rate regime by cutting policy rates twice - both by a quarter percentage point - in 2015.

Despite the signal from the central bank and a nudge from the finance ministry, banks have mostly stayed away from cutting rates, citing subdued demand for loans and arguing that a reduction would hurt their bottom lines in the final quarter.

Most banks have pegged their base rate - the rate below which they don't lend — in the range of 10% to 10.25%.

To attract customers, SBI has also waived off the processing fee, but at the same time said the reduction was valid only for a limited period. The bank plans to charge its existing home-loan borrowers 10.5% for top-up loans from next fiscal year.

A woman home-loan borrower can take up to Rs 50 lakh at 10.10%. The tenure of the top-up loan will be linked to the customer's outstanding tenure of the home loan. Top-up loans between Rs 50 lakh and Rs 2 crore will cost 10.75%. For Rs 2 crore to Rs 5 crore, the rate will be 11.25%. Analysts say the move will help SBI achieve its loan growth targets.

The bank has lowered its credit growth target to 11% for this fiscal year through March from the originally planned 14%.

"Even 11% (growth in credit) is also a stretch," Chairman Arundhati Bhattacharya had said while announcing thirdquarter results.

The bank's advances portfolio rose just 2% in the first nine months of this fiscal year.

SBI's home-loan book rose 13.2% year-over-year to aboutRs 1.56 lakh crore as of February 2015. Top-up loans totalledRs 4,800 crore.

Source : Economic Times
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LIC to invest Rs. 1.5 lakh cr in Railways over next 5 years

Railways and Life Insurance Corporation (LIC) have signed a memorandum of understanding (MOU) to aid the financing of Railway Projects in the country.

Under the MoU, the LIC will make available to the Ministry of Railways/its entities a financial assistance of upto Rs. 1,50,000 crore over the next five years for implementing Railway projects.

Under this financing facility, there would be a five year moratorium on interest and loan repayment and the rate would be linked to 10-year benchmark (G-Sec yield) plus 10 basis points.

The financial assistance will be available from the financial year 2015-16, according to the MoU.

This historic MoU was signed by Rajalakshmi Ravikumar, Financial Commissioner, Ministry of Railways and S.K.Roy, Chairman, LIC here on Wednesday in the presence of Finance Minister Arun Jaitley and Railways Minister Suresh Prabhu.

This MoU would help Railways fund part of the total Plan budget of Rs. 10,011 crore for the financial year 2015-16.

Source : Thehindubusinessline
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TDS by co-operative banks will ‘hassle’ small depositors

Co-operative banks will be required to deduct tax at source if the interest they pay to a depositor, who is also a member (shareholder) of these banks, exceeds Rs10,000 in a financial year.

In this regard, the Finance Bill 2015-16 has proposed an amendment to Section 194A of the Income Tax Act (relating to interest other than ‘interest on securities’).

According to the amendment, the tax deducted at source (TDS) will not apply to income credited or paid by a co-operative society (“other than a co-operative bank”) to a member or to any other co-operative society.

What this means is that while co-operative societies continue to be exempt from TDS, co-operative banks will have to deduct TDS on the interest they pay on deposits. This provision will be made effective from June 1, 2015.

According to Satish Marathe, President, Sahakar Bharati, this move will cause unnecessary hassles to the small depositor-members of co-operative banks.

“Suppose a depositor-member of a co-operative bank earns, say,
Rs20,000 interest in a year from a fixed deposit but does not have any taxable income.

“Now if the member does not have a PAN (Permanent Account Number) but submits either Form 15G or Form 15H for non-deduction of tax, such a declaration will not be acted upon by the bank.

So, tax will be deducted at source on the interest earned from the fixed deposit,” he explained.

Marathe said the TDS proposal in the Finance Bill will cause hardship to depositors. Besides, it will also increase the administrative burden on the tax authorities for granting refunds.

Source : Thehindubusinessline
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Nine Executive Directors appointed to various public sector banks

The Centre has elevated as many as nine general managers to the post of executive directors in various public sector banks (PSBs).

The nine general managers who have been appointed as executive directors are Ravindra Marathe ( from Bank of Baroda to Bank of India); K.V.R. Moorthy (Bank of Baroda); Harideesh Kumar ( from Vijaya Bank to Canara Bank); Kharat Kishore Piraji (Bank of Baroda to Union Bank); N.K.Sahoo (from Canara Bank to Allahabad Bank); Ravishankar Pandey (from Union Bank to Syndicate Bank); Rishab Lodha ( from Union Bank to Central Bank of India); Pawan Kumar Bajaj (from Bank of India to Indian Overseas Bank); and Charan Singh (Bank of India).

A panel headed by the Reserve Bank of India Governor Raghuram Rajan had interviewed 35 candidates on December 25 last year in New Delhi.

Interestingly, all the 33 General managers who had appeared for the interviews a year ago, again attended the interview in December also.

Source : Thehindubusinessline
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Monday, March 9, 2015

Axis Bank, MasterCard to offer biz payment solution

Axis Bank, India’s third largest private sector bank, announced a partnership with MasterCard and Vayana Network to launch ‘Invoice to Payment’- an end-to-end digital invoicing and payment solution.

“This solution aims to simplify B2B payments in India, estimated at over $95 billion annually. Processing of these payments today is physical, involves a number of manual steps and corporates spend a lot of time and resources to reconcile invoices and their payments. Invoice to pay is designed to simplify, digitize and automate the entire process – from invoice presentment to final payment,” Axis Bank said in a statement.

With this solution, users would experience greater convenience, security, control, and increased efficiency in business payments. For the suppliers it will ensure timely receipt of payments. The fully integrated solution will give significant financial returns to both buyers and suppliers alike, it said.

Jairam Sridharan, President – Retail Lending & Payments, Axis Bank, “Axis Bank Commercial Card Products go beyond being a lending facility. ‘Invoice to Payment’ is a completely automated, digital payment solution for businesses. It offers digital invoicing, electronic workflow approval and instant payment processing. This solution will build significant bottom line savings on administrative expenses. This solution addresses a critical need of all businesses – to view, control and efficiently manage payments to other businesses.”

Ari Sarker, Country Corporate Officer, India, and Division President, South Asia, MasterCard said, “At MasterCard, we endeavour to provide a simple, safe and secure payment experience to consumers as well as businesses. In line with the government’s Digital India mandate to encourage greater use of electronic payment transactions, we are proud to partner with Axis Bank and Vayana Network to bring this breakthrough solution to businesses large and small. The use of technology will also improve productivity for corporates, enhance buyer-seller relationships, and facilitate faster flow of funds.”

Source : Thehindubusinessline
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Vijaya Bank rolls out 2 debit cards

Vijaya Bank has launched two debit card in partnership with VISA and RuPay targeting the high-income group in urban localities. The cards were launched by the bank’s Managing Director and CEO Kishore Sansi in Bengaluru.

The Visa Platinum card comes with an international EMV chip with enhanced security features and has daily cash withdrawal limits of Rs50,000 and shopping limit of up to RS1 lakh a day at merchant outlets. The RuPay Platinum card comes with similar facilities but is valid only in India. Launching the new cards, Sansi reiterated the bank's commitment to providing innovative facilities.

Source : Thehindubusinessline
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Kshatrapati Shivaji takes over as SIDBI chief

The Small Industries Development Bank of India (SIDBI) has a new Chairman and Managing Director in Kshatrapati Shivaji.

Prior to this appointment, Shivaji - a Maharashtra cadre IAS officer--was Principal Secretary, Finance (Expenditure), in Government of Maharashtra.

Shivaji has already assumed charge of his new role.

Source : Thehindubusinessline
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