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Friday, May 1, 2015

Bank unions concerned over slow progress of wage talks

The United Forum of Bank Unions (UBFU) has expressed concern over the slow progress of negotiations underway to settle the 10th bipartite wage revision accord.

In a letter to the Chief Executive of Indian Banks’ Association (IBA), which represents the management, the UBFU recalled the minutes of the discussions signed on February 23 between the two parties in this regard.

Terms agreed

The understanding was that the wage negotiations will be concluded within 90 days, which falls on May 22.

An important issue on which consensus was reached was that every second and fourth Saturday of every month will be a holiday and other Saturdays will be full working days.

It was decided that all issues of the managements and unions/associations discussed during the process of negotiations will be settled based on mutual satisfaction.

The parties will meet on mutually convenient dates to draw out a detailed bipartite settlement/joint note on various issues on which consensus has been reached.

“The parties will endeavour to finalise the bipartite settlement/joint note within a period of 90 days,” the minutes of the meeting of February 23 had said.

Peripheral issues

In the letter dated April 28, the UBFU pointed out that only peripheral and non-monetary issues had been discussed so far in the sub-group meetings held in the interregnum between its representatives and the IBA.

What was of immediate concern was that discussions on construction of pay-scales and settlement of other important monetary issues are yet to take place.

The UBFU letter sought to remind the IBA that the deadline for conclusion of negotiations, according to the minutes of the discussions signed on February 23, “is fast approaching.”

It requested that meetings with UBFU representatives be held at regular intervals in order to arrive at a settlement on wage revision and other service conditions well within the agreed time limit.

The United Forum also requested the IBA to keep it updated on the latest developments in the matter.

Source : Thehindubusinessline
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Thursday, April 30, 2015

LIC's FY15 policy sales income hits a 10-year low

Life Insurance Corporation of India posted its worst performance in a decade on income from policy sales in 2014-15, as new regulations threw out many of its products.The coming year could be equally tough with well-capitalised private rivals taking on the state-run behemoth.

LIC's premium collection from sale of new policies fell 13.62% to Rs 78,302 crore in the fiscal year ended on March 31, 2105, compared with Rs 90,644 crore the previous year.

"Last year (2013-14) was an extraordinary year," said an LIC executive who didn't wish to be named.

"Many blockbuster products were withdrawn and new products were introduced this year (2014-15). This has affected sales."

Overall, the life insurance industry reported a 5.84% fall in new business income collection Rs 1.13 lakh crore, mainly because of LIC's weak performance. Private-sector companies posted an 18% increase in new business income, aided mainly by sale of unit-linked insurance plans.

Private-sector insurers capitalised on a surge in investor in terest in stocks by launching unit-linked plans and marketing them well.

LIC, the country's largest insurer, didn't have a unit-linked product, which was the flavour of the season. Unit-linked insurance plans are instruments where a part of the premium goes for insurance cover and the rest is invested in a fund. As much as 100% of the fund can be invested in equities.

LIC has predominantly relied on its traditional products. All insurance products have been re-launched this year in accordance with new rules, which offer policyholders guaranteed surrender value and lower commission charges.Traditional policies are debtoriented products in which the bulk of the underlying investment is in government and corporate bonds, with a maximum of 15% deployed in equities.

Agents push sales in the last quarter of the fiscal year as investments in life-insurance schemes with sum assured of at least 10 times the annual premium are eligible for tax deduction within the Rs 1 lakh limit under I-T rules.

Source : Economic Times
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Exim Bank net rises marginally to Rs. 726 cr

The Exim Bank today reported a marginal increase in net profit at Rs. 726 crore for FY 2014—2015, up from Rs. 710 crore in the previous fiscal.

“Around 35 per cent of our portfolio is Government— directed lending where I cannot change the profit margins.

Secondly, the interest rate is moving down, so we have also been pressurised on the interest rate margins which we can charge to our customers.

“Lastly, our provisioning for NPAs is around 80 per cent which is much higher,” Chairman and Managing Director Yaduvendra Mathur said while explaining the reasons for lower profit.

The bank transferred Rs. 433 crore to the government as return on capital, as against Rs. 339 crore a year ago.

The government—run export credit agency’s total business grew 13 per cent to Rs. 1,76,511 crore as of end—March, he said.

Loan portfolio grew 15 per cent to Rs. 86,953 crore from Rs. 75,873 crore the previous year. The non—funded portfolio also expanded 15 per cent to Rs. 10,847 crore.

Exim Bank Deputy Managing Director David Rasquinha said the loan growth in the current fiscal is likely to be at 15 per cent.

Gross non—performing assets stood at 2.94 per cent in FY15, while the net NPAs was at 0.60 per cent.

Exim Bank
borrowed Rs. 30,000 crore in the year and is likely to raise Rs. 32,000 crore this fiscal.

During 2014—15, it raised foreign currency resources of around $9.02 billion, launched a 5—year Reg S Green bond of $500 million and issued a 10—year Samurai bond worth 20 billion yens.

The lender has also received board approval to increase its MTN (medium—term note) programme to $10 billion from $6.5 billion.

“We are opportunistic and we may raise the amount depending on which market is attractive at a particular point,” Rasquinha said.

Exim Bank received Rs. 1,300 crore of capital from the government and is likely to get a similar amount this year as well, taking its capital to risk assets ratio to 15.34 per cent.

Source : Thehindubusinessline
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Vijaya Bank ties up with SBI Life

Vijaya Bank has tied up with SBI Life Insurance to launch the social security scheme — Pradhan Mantri Jeevan Jyoti Bima Yojana.

The memorandum of understanding was signed by Kishore Sansi, Managing Director and CEO of Vijaya Bank and Arijit Basu, Managing Director & CEO of SBI Life Insurance, in the presence of Executive Directors of Vijaya Bank KR Shenoy and BS Rama Rao, a press release said.

Source : Thehindubusinessline
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SBI joins hands with National Insurance

Country’s largest lender State Bank of India today entered into a tie-up with the National Insurance Company (NICL) to offer non-life cover to its savings account holders under the Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The bank will offer personal accidental death and disability cover of Rs. 2 lakh under the scheme, it said in a release.

The customer will have to pay an annual premium of only Rs. 12. All the savings account holders in the age group 18 to 70 years will be eligible for the cover.

Source : Thehindubusinessline
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Karur Vysya Bank Q4 net jumps 15.2%

Private sector Karur Vysya Bank today registered 15.2 per cent jump in net profit at Rs. 137.83 crore for the fourth quarter ended March 31, 2015.

The Tamil Nadu-based bank had registered net profit of Rs. 119.59 crore in the January-March quarter of previous fiscal, 2013-14.

For 2014-15, the net profit of the bank grew by 8 per cent to Rs. 464.28 crore, from Rs. 429.60 crore in the previous fiscal.

Total income for the January-March 2015 quarter went up to Rs. 1,507.61 crore, from Rs. 1,468.45 crore registered during same period of the previous fiscal.

For the financial year ended March 31, 2015 total income of the bank soared to Rs. 5,976.71 crore from Rs. 5,680.41 crore registered a year ago.

The Board of Directors have recommended a dividend of Rs. 13 per equity share of Rs. 10 each for the year 2014-15, it said.

The Bank shares were trading at Rs. 495.75 a piece down by 0.80 per cent over previous close in afternoon BSE.

Source : Thehindubusinessline
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Robosoft develops ICICI Bank app for Apple Watch

The Udupi-based Robosoft Technologies, a mobility solutions partner, has developed a proprietary banking solution for the Apple Watch. Robosoft partnered with ICICI Bank to integrate with this solution thereby creating one of India’s premiere banking apps for the Apple Watch.

Quoting Rohith Bhat, Chief Executive Officer and Managing Director of Robosoft Technologies Pvt Ltd, a press release said: “Soon after the Apple Watch was announced, we saw the tremendous potential the device has to offer for various new kinds of use-cases. We set out to create a unique, proprietary platform than can help banks build on-the-go banking solutions while quickly integrating with existing back-end systems.”

He said that the proprietary solution on the Apple Watch can help banks offer banking solutions on the device within two weeks as it integrates easily with their back-end systems.

The ICICI Bank app for the Apple Watch seamlessly connects a user’s device with his or her ICICI Bank account. The app integrates with ICICI’s existing back-end systems and has features specific to the minimal Apple Watch interface.

The release said that it alerts the user with actionable notifications about transactions and even has the option to pay bills instantly. It uses geo-location to fetch offers around the user’s location with precise navigation directions. It also displays available balance as well as details of last five transactions.

The app also makes use of the Glances feature of the Apple Watch where a simple account summary can be viewed without launching the app, it added.

Source : Thehindubusinessline
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Wednesday, April 29, 2015

PNB first bank to roll out Sukanya Samriddhi Scheme

The Punjab National Bank has started opening Sukanya Samriddhi Scheme accounts, the first bank to do so after the scheme was formally launched in January this year. According to a statement from the bank, the scheme is available at 1,604 PNB branches across India.

Almost seven weeks ago, on 11 March, the RBI had sent a circular to the heads of 28 commercial banks spelling out the operational guidelines of the Sukanya scheme. But except for PNB, no other bank has rolled out the scheme till now.

Meanwhile, the Sukanya scheme has emerged as the hottest selling investment in post offices. More than two lakh Sukanya accounts have been opened in Post Offices since the scheme was launched. According to India Post, some 8,000-9,000 new accounts are opened every week in Mumbai alone. Given that the scheme offers 9.2 per cent returns and the maturity amount is tax free, the Sukanya scheme is a better alternative to the all-time favourite PPF.

But the Sukanya scheme is only open to girls below 10 years. For this year, the government has allowed a grace period of one year so even girls up to 11 are eligible. The scheme also has a longer tenure and partial withdrawals are allowed only after the child turns 18 or gets married.

A parent or legal guardian can open a Sukanya account in the name of a girl. To open an account, one needs to submit a copy of the birth certificate of the child, address proof and identity proof.

Source : Economic Times
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HDFC net profit increases 8% to Rs. 1,862 cr in Q4; to pay Rs. 13/share final

HDFC Ltd posted an 8 per cent rise in net profit for the fourth and last quarter ended March 2015 at Rs. 1,862 crore as against a profit of Rs. 1,723 crore in the year ago quarter.

Profit including the deferred tax liability on special reserve grew 15% at Rs. 1,982 crore.

The National Housing Bank has advised housing finance companies to create a deferred tax liability on the amount transferred to special reserve as a matter of prudence.

Individual loan disbursements grew by 16 per cent during the year. After adding back loans worth Rs. 8,249 crore sold in during the year (Rs 5,000 sold in Q4FY15), the individual book grew by 23%.

The average size of individual loans stood at Rs. 23.3 lakh as against Rs. 22.1 lakh in the previous year.

“The growth was in line with the December quarter. Further, the non-individual lending segment saw some pick-up as indicated earlier,” said Keki Mistry, Vice-Chairman and CEO, HDFC.

The ratio of individual to non-individual segment improved to 78:22 from 85:15 last year.

Net interest margin declined marginally to 4% from 4.06% a year ago.

Gross non-performing loans reduced a tad to 0.67% of the loan portfolio as at March 31, 2015 compared to 0.69% in the previous year.

As on March end 2015, the total loan book outstanding increased by 13% to Rs. 2.54 lakh crore as against Rs. 2.25 lakh crore as of March last year.

Full Year

For the full year April-March period, HDFC posted a 10% growth in the standalone profit at Rs. 5,990 crore in FY15 as compared with Rs. 5,440 crore in FY14.

Profit excluding the impact of deferred tax liability on special reserve grew 17% Rs. 6,355 crore for FY15.

On a consolidated basis, the profit growth was at 15% to Rs. 8,732 crore for the year ended March 31, 2015 after adjustment for redemption premium on Zero Coupon Debentures and impact of Deferred Tax Liability on Special Reserve.

The board of HDFC recommended a final dividend of Rs. 13 per equity share of face value Rs. 2 per share.

HDFC Ltd scrip ended down 2.34 per cent or Rs. 28.75 at Rs. 1,199 on Wednesday.

Source : Thehindubusinessline
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Axis Bank profit climbs 18% to Rs. 2,180 cr in Q4

Axis Bank, the country’s third largest private bank, reported an 18% rise in net profit for the fourth quarter ended March 31, 2015, at Rs. 2,180 crore.

The profit was at Rs. 1,842 crore a year ago.

Net interest income (difference between interest earned and expended) increased 20% to Rs. 3,799 crore as compared with Rs. 3,165.75 crore in the March quarter last year.

Other income rose 21% to Rs. 2,687 crore as against Rs. 2,213 crore in Q4FY14.

Gross non-performing assets (NPAs) as a percentage of total loans increased to 1.34% as on March end, 2015 as compared with 1.22 per cent as on March end, 2014.

Net NPAs also increased to 0.44% from 0.40%.


The board of directors of the bank has recommended the payment of dividend of Rs. 4.60 per equity share.

The board also approved the proposal to seek enabling approval of shareholders for increase in the foreign Investment cap in the bank from 62% to 74% of its paid up equity capital of the Bank.

In addition, the board approved Sponsored Level 1 Depositary Receipt (DR) issuance programme of up to Rs. 14.2 crore DRs, with conversion of 5 equity shares to 1 DR.

Axis Bank shares closed higher at Rs. 552.90 per share, up by Rs. 17.65 (3.30%) over the previous close.

Source : Thehindubusinessline
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Federal Bank Q4 net up 6% at Rs. 280.53 cr

Federal Bank has posted its highest ever operating profit and net profit, the latter breaching the Rs.1,000 crore landmark for the first time. The net profit grew by 20 per cent YoY from Rs.838.89 crore in FY14 to Rs.1,005.75 crore in FY15.

The bank also registered a 6 per cent growth in the net profit in Q4 at Rs.280.53 crore against Rs.264.69 crore achieved in Q3. The operating profit during the whole year registered 9.96 per cent growth at Rs.1,627.79 crore against Rs.1,480.39 crore.

The total deposits stood at Rs.70,824.99 crore, an increase of 18.57 per cent against the industry growth rate of 12.78 per cent. The board of directors recommended 110 per cent dividend (Rs.2.20 per equity share of Rs.2 face value).

Shyam Srinivasan, Managing Director and CEO said that the bank has crossed an important milestone in its journey to achieve this record figure thanks to the support extended by its employees and clients at a time when the environment is challenging. This gives us the inspiration to double the figure by next year. Besides the focus on asset quality for the last two years has paid off well by improving more than 50 per cent, he said.

The bank’s total business increased by 18.36 per cent to Rs.1,22,109.98 crore. The NRE deposits recorded an impressive growth of 27.71 per cent to Rs.24,230.90 crore from Rs.18,973.56 crore. CASA grew 17.11 per cent to reach Rs.21,549.57 crore as on March 31.

The other income grew 26.58 per cent from Rs.693.85 crore as on March 31, 2014 to Rs.878.31 crore as on March 31 this year.

The net interest income grew 6.81 per cent from Rs.2,228.61 crore to Rs.2,380.41 crore and the net interest margin improved sequentially by 11 basis points from 3.20 per cent to 3.31 per cent.

The bank continued to improve its asset quality in FY15 as the gross NPA de-grew by 2.73 per cent and stood at Rs.1,057.73 crore against Rs.1.087.41 crore. The net NPA stood at Rs.373.27 crore as on March 31. The capital adequacy ratio (CRAR) computed as per Basel III guidelines, stands at comfortable level of 15.46 per cent.

The bank continued to expand its footprint and added 73 branches and 126 ATM’s during the year to take the tally to 1,247 branches and 1,485 ATM’s.

Source : Thehindubusinessline
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IRDA launches motor insurance awareness campaign

The Insurance Regulatory and Development Authority of India (IRDAI) has launched an awareness campaign on motor third-party insurance jointly with Cyberabad Police.

Speaking at the launch of the campaign here on Wednesday, R Raghavan, Chief Executive Officer, Insurance Information Bureau (IIB), an arm of the insurance regulator, said 55 per cent of the vehicles plying on the roads in the country did not have the mandatory motor third-party insurance.

In number terms, this would translate into seven crore vehicles! ``India ranks among the top five countries in the world in the number of accidents which makes insurance vital. Today is just a beginning. We will roll out a national campaign soon,’’ he added.

Lack of the third-party insurance will not only lead to severe social security perils for the victims but also losses to the insurers, he added.

``Cyberabad has been chosen as the first place for launch in view of the proactive approach and high technology adoption of the police here,’’ Raghavan said.

Cyberabad Police Commissioner CV Anand formally launched the campaign, which will involve ‘enactment, enforcement and enablement’ of motor insurance.

The data on uninsured vehicles compiled by IIB has been matched with transport department information and a final list will be shared with the police, who will initiate action on the vehicle owners.

Lack of third-party insurance will attract a Rs. 1,000 fine or three months’ imprisonment or both in line with the Motor Vehicles Act.

Source : Thehindubusinessline
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Dewan Housing Q4 net up 15% at Rs. 162 cr, to pay Rs. 2 final

Dewan Housing Finance Ltd reported a 15 per cent increase in net profit at Rs. 162 crore in the fourth quarter ended March 31, 2015, as against Rs. 141 crore in the year-ago period.

For the FY2015, the housing finance company clocked a 17 per cent rise in net profit at Rs. 621 crore (Rs 529 crore in FY2014).

The board of directors has recommended final dividend to be paid out of the current year profits at Rs. 2 per equity share of Rs. 10 each to equity shareholders.

Housing loans sanctioned during the reporting year were up 27 per cent at Rs. 28,497 crore. It disbursed loans aggregating Rs. 19,822 crore, up 19 per cent over the previous year.

Source : Thehindubusinessline
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KYC norms breach: RBI imposes fine on three banks

Bank of Maharashtra, Dena Bank and Oriental Bank of Commerce have been imposed with a monetary penalty of Rs. 15 crore each by the Reserve Bank of India (RBI) for violation of Know Your Customer (KYC)/ Anti Money Laundering (AML) norms.

“Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and its impact,” RBI said in a release.

The RBI also cautioned eight other banks -- Central Bank of India, Bank of India, Punjab and Sind Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, UCO Bank, Union Bank of India and Vijaya Bank – “to put in place appropriate measures and review them from time to time to ensure strict compliance of KYC requirements in future.

“The penalties have been imposed in exercise of powers vested in the Reserve Bank…taking into account the violations of the instructions/directions/guidelines issued by the Reserve Bank from time to time. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank and its customers,” the central bank said.

RBI said it received a complaint from a private organisation, on the basis of which a scrutiny of fixed accounts opened in its name in Mumbai based branches of certain public sector banks was undertaken in July 2014.

“With more complaints and involvement of other banks coming to light, a wider thematic review was conducted. In all, 12 branches of 11 Public Sector Banks were covered.

“The scrutiny/thematic review looked into the modus operandi of the alleged frauds involving accounts of certain organisations in these banks, deficiencies/irregularities while opening Fixed Deposits (FD) and extending Overdraft (OD) facility there against them. Besides, the effectiveness of systems and processes in place pertaining to implementation of KYC norms/AML standards in respect of these accounts was also looked into,” the RBI added.

The findings revealed violation of some regulatory guidelines as also other disquieting actions on the part of the banks such as non-adherence to certain KYC norms, monitoring of transactions in customer accounts, RBI’s instructions regarding funds received through Real Time Gross Settlement System (RTGS), opening of FD accounts and granting overdrafts without due diligence or process, weaknesses in the internal control systems, management oversight, use of internal accounts for parking customer funds and involvement of middlemen/intermediaries in opening of accounts as also subsequent operations in those accounts.

Source : Thehindubusinessline
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