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Thursday, March 26, 2015

RBI eases lending curbs on United Bank; shares up 5%

The Reserve Bank of India has removed the restriction imposed on United Bank of India for sanction of credit / participation in restructuring proposals. This is significant in view of fresh slippage by corporate borrowers, including some restructured loans.

P Srinivas, MD & CEO of the bank, met the RBI Governor earlier this month and requested the RBI to remove restrictions on its corporate borrowing. After the bank reported net losses in the second and third quarter last fiscal, the RBI had clamped several restrictions on the UBI.

Since then, UBI has reported fourth consecutive quarterly net profits till December 31, 2014. UBI’s net NPA stood at Rs. 5,240 crore at the end of the third quarter. Until the end of the third quarter this fiscal, it restructured debt worth Rs. 7,697 crore. During the third quarter cash recovery was Rs. 194 crore, bad loans worth Rs. 318 crore were upgraded and Rs. 340 crore were written off. UBI currently also faces branch expansion restrictions.

The RBI in June last year allowed UBI to consider loan proposals up to Rs. 200 crore taking exposure to triple A-rated PSUs and corporate borrowers. The RBI also had removed the ban on recruitment early this year.​

At 1.55 pm, United Bank shares were trading up 5.01 per cent or Rs. 1.35 at Rs. 28.30.

Source : Thehindubusinessline
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Branches doing government business should be open on March 30 & 31: RBI

The Reserve Bank instructed all banks, who deal with government business, to keep designated branches open on March 30 and 31.

"It has been decided that all agency banks shall keep the counters of their designated branches conducting government business open for full day on March 30, 2015, and till 2000 hrs on March 31, 2015," it said in a notification.

The RBI said the government is desirous of accounting all the government transactions within the same financial year itself and has requested for special arrangements to be made at branches for this purpose.

It said the electronic transactions will continue till midnight on March 31.

The central bank has also asked the lenders to give adequate publicity about this facility, which is being done during the closure of the financial year, when banks are burdened with year-ending work.

Source : Economic Times
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Exim Bank green bond issue raises $500 mn

Export-Import Bank of India has successfully launched a five-year Green Bond issue of $500 million.

The issue, launched on Tuesday, attracted subscription of around 3.2 times the issue size led by demand across 140 accounts.

“The five-year $500-million Eurodollar Reg S Green bond issue was priced at 147.50 basis points over US Treasuries (UST) at a fixed coupon of 2.75 per cent p.a., cutting through the current secondary trading levels of similar bonds and achieving a pricing tighter than the bank’s own $500 million Reg S bonds issued in February 2015 for a 5.5 year tenor,” EXIM Bank said in a statement.

The above transaction marks the first USD-denominated Green bond offering out of India as well as the first benchmark-sized Green bond out of Asia in 2015 and the third ever Green bond issuance out of Asia. It provides Exim Bank an opportunity to expand its investor base and to support an important market as investors seek more socially responsible investment options. Exim will use the net proceeds from the sale of the notes to fund eligible green projects in countries including Bangladesh and Sri Lanka, it said.

The issue attracted over $1.6 bn of bookings across 140 accounts with significant participation from green investors and real money accounts. The offering saw majority (58 per cent) participation from fund managers, while banks (20 per cent), sovereign wealth funds / insurance companies (18 per cent) were the other major investor classes. The issue was distributed 60 per cent to Asian investors, 30 per cent to EMEA (Europe, Middle East and Africa) and the balance to offshore US investors. Bank of America Merrill Lynch and J.P. Morgan acted as Joint Lead Managers on the offering.

Exim Bank of India
has been rated ‘BBB-’ by Standard and Poor’s and ‘Baa3’ by Moody’s, same as the rating of Government of India.

David Rasquinha, Deputy Managing Director of Exim Bank, commented, “We were able to upsize the transaction to $500 million from initial indication of $250-300 million based on a strong investor response. The deal followed calls with select global investors spanning over two days. We were able to pick the optimal execution window and are satisfied with the outcome.”

Source : Thehindubusinessline
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Corp Bank opens ‘e-Lobby’

Corporation Bank opened a new branch with ‘e-Lobby’ facility at Balmatta in Mangaluru on Wednesday. The ‘e-Lobby’ facility at Balmatta is the sixth in Mangaluru. The other e-Lobbies are located at Head Office of the bank in Pandeshwar, Car Street, Jeppu, Kankanady and Bejai.

The e-Lobby has self-service automation kiosks and an ATM. A press release said here that the bank has so far opened 99 e-lobbies across the country. Amrit Paul, Inspector General of Police, Western Range, inaugurated the Blamatta branch. SR Bansal, Chairman and Managing Director of Corporation Bank, presided over the function.

Source : Thehindubusinessline
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Standard Chartered appoints new Group CIO

Standard Chartered (StandChart) announced the appointment of Michael Gorriz as Group Chief Information Officer.

He will join in the third quarter of 2015 and be based in Singapore, reporting directly to incoming Group Chief Executive, Bill Winters, the foreign bank said in a statement.

Michael will succeed Jan Verplancke, Director, current Group Chief Information Officer, who will retire after 10 years of service. Jan will leave on the completion of an appropriate hand-over period, the bank said.

Michael has prior experience at Daimler AG as Vice President and CIO. Michael (55) is a physicist and engineer by background and progressed through specialist research and design in aerospace to a general management role in Daimler Mexico. Over the past 14 years, he held various CIO roles with the group and since 2008 was responsible for strategy, planning and development of all IT systems, as well as the operation of all data centres and communication networks at Daimler AG.

Peter Sands, Group Chief Executive, StanChart, "Michael is an immensely talented CIO, who has worked across our footprint. As a leader in digital transformation, he has the capabilities and experience to drive innovation and change in technology and operations, which are key to delivering our productivity goals and to enhancing our service to clients.”

Source : Thehindubusinessline
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Muthoot Fin cautions people against fake promotion schemes

Muthoot Finance has cautioned people against fake Muthoot Finance Lottery promotions.

In a recent instance, a supposed organisation by the name of Chevron Texaco Oil & Gas Company fraudulently attempted to lure customers/ investors, through the platform of Muthoot Finance, by sending bogus e-mails and informing unsuspecting people that they have won a lottery worth crores of rupees.

The unsuspected customers were further instructed to submit their details, including residential address, bank name, account number, account holder’s name, bank branch, and scanned copy of their ID proof to a dubious email ID:

Muthoot Finance has advised customers and the general public to exercise caution against such e-mails. The company has clarified that it has no partnership with Chevron Texaco Oil & Gas Company – and that it does not seek money from people in exchange for lottery money.

According to R. M. Diwan, General Manager, Muthoot Finance Ltd, the company is looking into the matter and is also taking appropriate legal and punitive action to curb fraudulent claims by fake companies and fraudsters.

Source : Thehindubusinessline
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DCB Bank rises; Motilal Oswal starts coverage with 'buy'

India's DCB Bank shares gain as much as 2.7 per cent.

Motilal Oswal initiate coverage of stock with "buy" rating and price target of Rs. 155.

Loan book realignment from unsecure to secure, cost control and focus on strong granular liability profile, key reason for growth, says DCB Bank.

Oswal expects core revenues to clock healthy CAGR of 26 per cent over FY14-17, driven by strong loan growth and largely stable margins.

While there was a sharp improvement in NIM, helped by "healthy" asset quality management, provisioning coverage ratio remains best in sector.

“Expecting bank's liabilities to re-price faster and benefit margin from declining interest rates,” says Oswal.

Source : Thehindubusinessline
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Tuesday, March 24, 2015

SBI sees loan growth picking up from next year

State Bank of India, India's largest lender, expects loan growth to rise to as much as 15 per cent in the fiscal year to March 2016, boosted by government auctions for coal concessions and mobile radio airwaves, Chairman Arundhati Bhattacharya said on Tuesday.

That compares to what is expected to be "very very low" loan growth of below 10 per cent in the current fiscal year, Bhattacharya said in an interview.

She also said a cut in India's cash reserve ratio, the share of deposits which lenders must hold with the central bank, would "definitely help" banks to cut lending rates, Bhattacharya said.

Most Indian banks have yet to cut their base lending rate, despite a 50 basis point reduction in the key policy rate by the central bank so far this year.

Source : Thehindubusinessline
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Syndicate Bank to open 300-500 branches next fiscal

Syndicate Bank is planning to open 300-500 branches in the next financial year, according to TK Srivastava, Executive Director.

He told presspersons in Manipal on Tuesday that the bank had around 3,500 branches currently. Of these, 50-60 were opened during the fourth quarter of the current financial year. “Going forward, another 300-500 branches will be opened in the next fiscal,” he said.

The bank also has 37 mid-corporate branches. Another 13-14 such branches would be opened in the next two-three months, taking the total to 50, he said.

To a query on the bank’s recruitment plans, Srivastava said the bank planned to recruit around 5,000 people last year. However, it could get only 4,000 people. It planned to recruit another 5,000 people in various cadres. The proposed recruitment would take care of the branch expansion, in addition to those retiring from service, he said.

Jan Dhan Yojana

To a query on the bank's performance under the Prime Minister's Jan Dhan Yojana (PMJDY), Srivastava said Syndicate Bank had opened 25 lakh accounts under the scheme, all of which were issued RuPay cards.

He said 60 per cent of the accounts opened were zero balance accounts. Every effort would be made to make them operational.

He hoped that at least 50 per cent of these zero-balance accounts would become operational in another three months.

The percentage of zero-balance accounts was around 95 per cent in the beginning. It had come down to 60 per cent now, he said.

The bank had opened 8 lakh accounts under PMJDY when it was launched on August 18 against the target of 4 lakh accounts, he said.

Ravi Shanker Pandey, Executive Director, was present on the occasion.

Source : Thehindubusinessline
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Axis Bank launches financial planning app

Axis Bank, India’s third largest private sector bank, has partnered Max Life Insurance, to launch a financial planning app to facilitate better life insurance purchasing experience to customers.

"The app furthers the Axis Bank vision to be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology...," Axis Bank said in statement.

The application is designed to enable policy issuance in less than four hours.

The digital initiative also involves latest analytics tools that will ensure that Axis Bank and Max Life are able to offer customised life insurance solutions after complete understanding of life stage needs of their customers.

Rajiv Anand, Group Executive & Head – Retail Banking, Axis Bank, said, “The launch of this app will further help us in identifying the customer’s needs and constraints and then offer the best product to realise those goals. We will also be able to provide a straight through process with minimal paperwork with the customer interacting with just a single person instead of six in the current process.”

Ashish Vohra, Senior Director & Chief Distribution Officer, Max Life Insurance, said, “...The process enables us to leverage smart customer analytics to offer a wider spectrum of customised offerings which will help Axis Bank in creating and protecting wealth for their customers.”

Source : Thehindubusinessline
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PNB raises Rs. 1,800 cr from bonds to fund infra projects

State—owned Punjab National Bank (PNB) today announced raising Rs. 1,800 crore through long-term bonds for funding infrastructure projects.

“The bank has raised Rs. 1,800 crore via long-term bonds for infrastructure project finance and affordable housing in the nature of debentures,” Punjab National Bank (PNB) said in a statement.

The 10-year bonds were issued at an annual coupon rate of 8.35 per cent on private placement basis on March 24, 2015, the statement said.

Shares of PNB closed at Rs. 161.60 per unit, down 0.95 per cent on the BSE.

In order to encourage infrastructure development and affordable housing, RBI last year exempted long term bonds from mandatory regulatory norms like cash reserves ratio (CRR), statutory reserves ratio (SLR) if the money raised is used for funding of such projects.

CRR is the portion of deposits which the banks are required to have in cash with the central bank.

SLR is the portion of deposits banks must invest in government bonds.

Rules were relaxed in pursuance of Finance Minister Arun Jaitley’s Budget speech in which he had said “banks will be encouraged to extend long term loans to infrastructure sector with flexible structuring to absorb potential adverse contingencies, sometimes known as the 5/25 structure”.

Under the 5/25 structure, bank may fix longer amortisation period for loans to projects in infrastructure and core industries sectors, say 25 years, with periodic refinancing, say every 5 years.

Last month, the bank had raised Rs. 1,000 crore through bonds on private placement basis. The long term bonds were issued at an annual coupon rate of 8.23 per cent.

Subsequently, it raised Rs. 1,500 crore through Basel III compliant perpetual debt instruments in the nature of debentures through private placement.

Source : Thehindubusinessline
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Standard Chartered bank holds global board meeting in New Delhi

Amidst reports of Standard Chartered shifting its headquarter to Asia, the UK-based bank is having its two-day global board meeting here starting on monday, reflecting increased importance of India in its global framework.

As India is the third largest profit centre of the Standard Chartered, the board may also consider separating Indian operations into a subsidiary as the banking sector regulator RBI is encouraging global lenders to set up subsidiary.

In 2011, India emerged as the largest profit centre for the bank. The other two largest profit centres are China and Hong Kong.

This would be probably the last board meeting of its global CEO Peter Sands before demitting office in June.

"We have two board meets a year outside UK. In one year, the board met twice in Africa. In another year, we met at Singapore and Malaysia," a Standard Chartered official said.

In the past also, the board had its meeting in India. It was held some two years ago, the official added.

Asked about the agenda for the meeting, the official declined to comment.

It is very unlikely that the global management will meet the political leadership like Prime Minister, Finance Minister in Delhi, the official added.

Last month, Standard Chartered announced a massive overhaul of the global leadership team, including a new group CEO and a new head for its largest market, Asia, replacing Standard Chartered veteran Jaspal Bindra.

While former CEO of Wall Street major JPMorgan Bill Winters will replace the embattled incumbent group chief executive Peter Sands from June, the London-headquartered bank asked Bindra, the present chief executive of Asia to leave by April.

Bindra was also the country head of its India franchise. Under Sands' tenure, total assets of Standard Chartered nearly trebled to USD 690 billion in June 2014 from USD 266 billion in 2006.

The bank also said three longest serving independent directors will also step down from the board.

Standard Chartered was the first and only foreign entity to have raised funds from India by issuing Indian Depository Receipts (IDRs). It had issued 24 crore IDRs in 2010 with every 10 IDRs representing one ordinary shares. The bank raised Rs 2,490 crore from the issue.

Source : Economic Times
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Monday, March 23, 2015

Bharatiya Mahila Bank to have 60 branches by Mar 31: Chairman and Managing Director

Bharatiya Mahila Bank will launch nine more branches by this month end to close the fiscal with a network of 60 outlets, a top official said today.

"The number of branches of the bank will be increased to 60 by the end of this financial year (2014-15)," Bharatiya Mahila Bank (BMB) Chairman and Managing Director Usha Ananthasubramanian told reporters after inaugurating the bank's 51st branch here.

She said, the bank plans to open some more branches next year, but the decision would be taken by the Board.

The deposits of the bank stand at Rs 800 crore and advances at Rs 400 crore, she said.

BMB provides internet banking and very soon it would introduce mobile banking on the Android platform for the benefit of its customers.

She said, the bank's priority is to improve financial literacy among women and it provides loans to women entrepreneurs to set up small businesses in order to become self-reliant.

Launched in 2013, BMB is the first of its kind in the country's banking industry, formed with a vision of economic empowerment for women.

Source : Economic Times
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Syndicate Bank raises Rs 400 crore by issuing bonds

Syndicate Bank today said it has raised Rs 400 crore by issuing bonds.

The bank has issued unsecured redeemable non-convertible Basel III compliant tier II bonds in the nature of debentures aggregating to Rs 400 crore, the public sector lender said in a filing to BSE.

"The issue is fully subscribed," it added. Syndicate Bank's net profit for the third quarter ended December 2014 had fallen by 20 per cent to Rs 304.99 crore.

Syndicate Bank
scrip closed at Rs 104.90 apiece on BSE, down 1.69 per cent from previous close.

Source : Economic Times
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Bank of Baroda cuts deposit rate for select maturities

After Axis Bank, state-owned Bank of Baroda has also reduced the interest rate for deposits below Rs. 1 crore by 0.1 percentage points (or 10 bps) for a select maturity bracket.

"The bank has decided to revise rates of interest payable on Domestic Term Deposits & NRO Deposits of below Rs. 1 crore, applicable to fresh deposits and renewal, with effect from March 24, 2015. The applicable rate of Interest in the maturity range of 181 to 270 days has been reduced from existing 7.75 per cent to 7.65 per cent," the public sector lender said in a filing with the BSE.

For all other deposits, no change has been made, the bank said.

In a surprise move earlier this month, the Reserve Bank had cut the key repo rate by 0.25 per cent to 7.50 per cent. The central bank in January too this year, had cut the repo rate by a similar margin to 7.75 per cent.

Repo is the rate at which the central bank lends to the commercial banks.

Following this, Axis Bank was the first lender to cut its deposit rates last week by 25 basis points in select maturities.

However, banks have so far have not passed on the benefit to their customers and have mostly stayed away from lowering lending rates.

Bankers say, the lending rate will be lowered only after deposit rates come down, which is likely by next quarter or so.

At day’s close, the Bank of Baroda scrip ended at Rs. 169.75 per share, down by 1.82 per cent over the previous close on BSE.

Digital-friendly measures

Bank of Baroda has launched an initiative to provide passbook facility on mobile and facilitate online credit to PPF account.

“As part of new customer-centric IT initiatives, we've launched Baroda mPassbook on March 13, 2015, a mobile app on Android platform to view account and transactions related information on a mobile phone,” Bank of Baroda said in a statement.

Along with online credit to PPF account, a PPF account statement through Bank’s Internet Banking – Baroda Connect was also launched.

The government bank has also launched 24 by 7 e-lobby self service banking to facilitate all days and anytime service to its customers.

Source : Thehindubusinessline
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IRDAI slaps Rs. 20 lakh penalty on Apollo Munich Health Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed Rs. 20 lakh penalty on Apollo Munich Health Insurance Company for violation of various norms.

In an order, IRDAI Chairman TS Vijayan said fine was imposed for accepting premiums from agents after expiry of their license. The company did not capture the record of the license dates of the agents as well.

Further, the insurer did not provided the mandatory reserve for claims under litigation. It also violated norms by procuring travel insurance business through Make My Trip which is not authorised to act as an intermediary, the order said.

The regulator had also imposed Rs. 10 lakh penalty on Agricultural Insurance Company of India Ltd for violation of norms related to reinsurance, among others.

Source : Thehindubusinessline
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Nabard staff union bats for reverse merger with RBI

The Centre may consider appointing the Deputy Governor of RBI as Chairman of Nabard (National Bank for Agriculture and Rural Development).

It may also seriously consider the reverse merger to make RBI and Nabard complementary to each other for the betterment of agriculture and rural development.

These are among the suggestions that VK Bhosale, General Secretary, All India Nabard Employees Association, has made in a communication to Finance Minister Arun Jaitley.

He welcomed the allocation of around Rs1 lakh crore in the budget towards various schemes of Nabard.

As an offspring of the RBI, Nabard shares the work culture, ethos and development orientation of its parent institution. Snapping of this link has led to a great disadvantage for both.

Bhosale was referring to the transfer of 99 per cent of Nabard shares owned by the RBI to Centre. This has weakened any role or participation RBI can have over its activities.

There is also a dearth of national rural credit funds made available to rural financial institutions after stoppage of source funding from RBI since 1993.

Financing costs

This has already affected long-term credit for and capital formation in agriculture. Cost of financing has gone up since market borrowings of Nabard add up to 80 per cent of its resources. Member-driven and de-bureaucratised cooperative structures have to fill-in the gaps of institutional credit left open by commercial banks.

RBI and Nabard may jointly provide effective financial, supervisory, regulatory support as envisaged by the Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development.

District offices

Bhosale recalled that the Centre has bifurcated the Chairman and Managing Director posts in commercial banks. In Nabard, these posts are historically separate and the Nabard Act also provides for it.

“We understand that there is a move to merge the posts in Nabard. We request you to discard the proposal. A qualified and experienced development/central banker must be appointed as the Managing Director.”

District Development Offices must be opened or re-established, as the case may be, in all districts. A full complement of supporting staff may be provided in existing offices through fresh recruitment.

Bhosale also recalled the Centre stating that public sector banks have full autonomy to recruit staff at all cadres. It has asked them do succession planning in view of retirements.

But such luxury has been denied to Nabard. This situation needs to be remedied.

Bhosale requested that compassionate appointments be restored since the Centre has restored the same in commercial banks.


This copy has been amended as the headline incorrectly said Nabard bats for reverse merger with RBI. The suggestion has been made by the All India Nabard Employees Association, and not the Nabard management.

Source : Thehindubusinessline
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