LIC’s higher stakes in banks a concern: Mundra

Country’s largest financial institution Life Insurance Corporation’s (LIC) higher stakes in a clutch of state—run and private banks could potentially create a contagion effect on the system, Reserve Bank deputy governor S S Mundra said today.

“LIC’s stake is more than 9 per cent for the banking system as a whole. So, from the point of inter-connectedness and contagion, as a probability, it is something that affects financial stability. It’s not that it’s affecting today or it’s going to affect tomorrow, but these are probabilities,” he said when asked about why he is worried about LIC raising holding in banks.

But Mundra, talking to reporters on the sidelines of an event organised by the National Payments Corporation of India (NPCI), was quick to add that he did not name any entity in his previous media interaction this week wherein also he had warned about such risks.

When asked what the central bank is doing on this, he said, “There are inter—regulatory frameworks. And what we do in our financial stability report, we flag these issues.”

According to Mundra, with 9.21 per cent stake in banks, including private lenders, LIC is the largest shareholder in the banking sector after the government.

Some of the large holding that LIC has include a whopping 22.5 per cent in Corporation Bank, 21.4 per cent in Allahabad Bank, 13.9 per cent in the nation’s largest lender SBI, 16 per cent in IDBI Bank, 12.7 per cent in Punjab National Bank and 11.33 per cent in Syndicate Bank.

It also holds 13.6 per cent in the private sector lender Axis Bank, in which the government also holds almost same stake and 9.7 per cent in ICICI Bank apart from some stakes in banks like HDFC, Kotak Bank and Yes Bank among others.

Source : Thehindubusinessline

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Karnataka Bank Q4 net jumps 65.5%; to pay Rs. 5/share dividend

Karnataka Bank Ltd has recorded a net profit of Rs.134.42 crore in the fourth quarter of 2014-15 against a net profit of Rs.81.21 crore in the corresponding period of the previous fiscal, recording a growth of 65.52 per cent.

Net interest income of the bank during the period under review stood at Rs.291.32 crore (Rs.249.93 crore) and the other income stood at Rs.111.69 crore (Rs.113.98 crore).

Net profit for 2014-15 stood at Rs.451.45 crore against Rs.311.03 crore in 2013-14.

The board of the directors of the bank has recommended a dividend of Rs.5 per equity share of Rs.10 each for 2014-15.

Source : Thehindubusinessline

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SBI Q4 net profit surges 23% to Rs. Rs.3,742 cr; to pay dividend of Rs.3.50 per share

State Bank of India has reported an approximate 23 per cent increase in net profit to the tune of Rs.3,742 crore, for the quarter ended March 31, 2015. Standalone net profit for the corresponding period last year stood at Rs.3,040 crore.

Total income (net interest income and other income) increased by nearly 15 per cent to Rs.48,616 crore from Rs.42,443 crore.

Segment Results

In terms of segment results for the fourth quarter (January-March 2015), losses were contained in the wholesale or corporate banking operations to the tune of Rs.1,210 crore against Rs.2,071 crore.

However, treasury operations, reported a 118 per cent increase in profit to Rs.2,739 crore against the Rs.1,257 crore in the year-ago period.

Profits in retail banking operations for the January to March period have gone down by a little over 32 per cent to Rs.4,208 crore (Rs.6,234 crore).

Full Year Operations

For the full year ended March 31, 2015, standalone net profit grew over 20 per cent to Rs.13,102 crore (Rs.10,891 crore).

Total income for the full year increased to Rs.1,74,973 crore (or by approximately 13 per cent) from Rs.1,54,904 crore it reported in the year-ago period.

For 2014-15, the bank’s board has declared a dividend of Rs.3.50 a share of face value of Rs.1 each.

Loan quality

Gross non-performing assets per cent (gross NPA to advances) in the quarter improved to 4.25 per cent (4.95 per cent).

Gross NPAs stood at Rs.56,725 crore (Rs.61,605 crore), while net NPAs came down to Rs.27,591 crore (Rs.31,096 crore).

Net NPA per cent also improved by 45 basis points to 2.12 per cent against 2.57 per cent in the year-ago period.

"This has been a year of consolidation. Consolidation has been done not just in regular line of businesses; but we have also explored new digital business opportunities," Arundhati Bhattacharya, Chairman, SBI, said.

Initially, after the results were announced, the stock witnessed a surge in its price and touched a high of Rs.305 on the NSE. But profit booking subsequently pared much of the gains and SBI shares are trading at Rs.291, a gain of 75 paise on the exchange.

But the trading interest in the stock was phenomenal with the trading volume crossing 5 crore shares by 2.15 pm on the NSE.

Source : Thehindubusinessline

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SBI ties up with Snapdeal to offer seller finance

State of Bank of India (SBI) on Thursday entered into a seller financing scheme with e-com major Snapdeal.

Under the scheme, SBI will provide loans to small and medium enterprises at easier interest rates. Data regarding the sellers will be provided by Snapdeal.

"Rates of interest will be determined by the credit worthiness of the seller," Arundhati Bhattacharya, Chairman, SBI, said after signing the MoU with Snapdeal.

The country's biggest lender (SBI) had an MSME loan book of approximately Rs. 170,000 crore as on December 31, 2014.

The seller financing scheme will help MSMEs — traders, sellers and manufacturers — scale up their operations by catering to their working capital requirements, Bhattacharya said.

According to Kunal Bahl, CEO, Snapdeal, there are at least 150,000 sellers associated with Snapdeal. E-com major Snapdeal operates in a marketplace model.


Source : Thehindubusinessline

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RBI discussion paper on cashless transactions soon

To promote more cashless transactions, the Reserve Bank of India is in discussions with the Government on ways to reduce cash usage in the system and will soon be coming out with a paper on the same, RBI's Executive Director G Padmanabhan said.

"We are looking at various ways to incentivise cashless transactions, and various aspects are being considered like looking at charges for card payments," Padmanabhan told reporters on the sidelines of a National Payments Corporation of India (NPCI) event.

As black money has been a burning debate in the country, the central bank and the Government are looking at solutions which will take into consideration the local conditions and make cashless transactions as easy as the cash ones.

Both the government as well as the RBI are doing many things to promote cashless transactions as much as possible, Padmanabhan said, adding that a discussion paper on the topic has been cleared and will be made public soon.

Infrastructure and Cost

Highlighting the tax incentives given for cashless transactions in South Korea, Padmanabhan said methods have to be devised as infrastructure penetration is low.

According to him, the focus on moving to a cashless economy should not hurt the infrastructure roll-out and industry will be incentivised.

"Initially, we can't have a solution which will take away the incentives to put up the infrastructure. That is why we are having a prolonged discussion," he said.

At present, a commission of up to 2 per cent is charged for card transactions, which many feel is a deterrent for the agenda of cashless society.

Padmanabhan said he has also cleared the guidelines for mobility cards and they will be published in a fortnight.

Mobility cards will be multipurpose and interoperable cards.

Padmanabhan asked the banking system to devote sufficient attention to safety and security, saying there have been instances of data compromises in electronic transactions.

Industry players should also work towards minimising the cost of transaction, he said, hinting that a regulator-prescribed pricing may not be desirable.

The USSD-based framework, which will enable a user of low cost feature phones to use mobile banking services, has overcome the initial hiccups and is now ready for a take-off, Padmanabhan added.


Source : Thehindubusinessline

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SBI ties up with PayPal to enable cross-border transactions

State Bank of India (SBI), on Thursday, entered into a strategic partnership with digital payments company, PayPal, to facilitate cross-border trade and payments.

The service will be extended to SBI and PayPal users both in India and abroad and is targeted at small and medium enterprises (SMEs). SBI currently, has over 900,000 SME customers.

According to B Sriram, Managing Director &Group Executive (National Banking), SBI, attempts are also being made to extend the services for domestic transactions.

"Currently the tie-up will be for cross-border remittances and payments. We are looking to explore the domestic payments space too in the coming days," he said after signing an MoU with PayPal.

This will be SBI's first such tie-up for remittances and payments.

According to Sriram, SBI is also looking at exploring opportunities in e-visa, e-governance, and remittances for the Clean Ganga Campaign with this tie-up.

He, however, did not give details of how volumes for such cross-border transactions will be impacted post this tie-up with PayPal.


Source : Thehindubusinessline

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Vijaya Bank reduces base rate by 25 bps

Vijaya Bank will revise its base rate with effect from June 1.

The bank in a release said it has reduced base rate by 25 basis points to 10 per cent per annum.

The revised rates will be applicable to housing loans also.

Due to reduction in rates, equated monthly instalments related to retail loans including housing loans shall come down proportionately.


Source : Thehindubusinessline

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LIC Jeevan Sangam plan to be available up to June 1

The close-ended Jeevan Sangam (Plan 831) introduced by the Life Insurance Corporation will be available in the market for subscription up to June 1.

Jeevan Sangam is a participating, non-linked, savings-cum-protection, single-premium plan that provides for a high-level risk cover.

The proposer has an option to choose the maturity sum assured, said Shaji M Shankar, Senior Divisional Manager, LIC, Thiruvananthapuram.

The single premium payable (exclusive of service tax) will depend on the chosen amount of maturity sum assured and age of the life assured.

Priority of an assured varies with the stage of life of the individual. Some are concerned with building a corpus for pension on retirement, while some others may like to fund children’s education and marriage.

The plan provides for a death benefit ten times of the tabular single premium along with loyalty addition. Maturity sum assured shall be payable along with loyalty addition.

Loyalty addition

Loyalty addition refers to participation in surplus (profit) and the policy is eligible for this after the completion of five policy years.

The minimum and maximum years for entry are six and 50 respectively and the minimum basic sum assured is Rs.75,000. There is no limit to the maximum sum assured. The policy term is for 12 years and premium payable, single.

Tax benefits include guaranteed exemption under Section 80C and tax-free Maturity under Sec 10 (10) D.

For a maturity sum assured of Rs.4 lakh, a single premium of Rs.1,80,540 paid at age eight will add up to insurance cover of Rs.18,85,400 (loyalty additions extra kicking in after five years).

Amount of premium eligible for rebate is Rs.1.5 lakh. A single premium of Rs.1,81,080 paid at age 10 will provide for an insurance cover of Rs.18,90,800 with applicable loyalty additions and eligible rebate.

Similarly, a single premium of Rs.1,82,220 paid at age of 12 will return an insurance cover of Rs.19,02,200; and Rs.1,84,100 paid at age 15 will make available Rs.19,21,000.


Source : Thehindubusinessline

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UBS to pay $545 mn in fines to settle forex probe by US authorities

UBS said on Wednesday it has settled a probe by US authorities over alleged rigging of currency markets by agreeing to pay $545 million in combined fines and pleading guilty to one count of wire fraud in a separate matter.

The Swiss bank's disclosure comes as part of what is expected to be a combined bill of more than $5 billion and criminal charges for five of the world's biggest banks in a settlement with US and British authorities over the foreign exchange probe.

UBS said its settlement includes a $203-million penalty for pleading guilty to allegations it rigged Libor benchmark interest rates.

The Zurich-based bank originally reached a settlement on that matter in 2012, but US justice officials cancelled an agreement not to prosecute UBS over Libor as the forex probe mushroomed. The bank at one stage received conditional immunity over forex, because it was the first firm to report the misconduct to US officials.

The bank said US prosecutors would not file charges against the bank in relation to a currency business known as 'V10 structured products', nor its precious metals business.

"The bank continues to cooperate with ongoing investigations by other authorities in this industry-wide matter, which includes investigations of individuals," UBS said in a statement, without specifying.

Wednesday's settlement with the US Department of Justice, the Federal Reserve, and the Connecticut Department of Banking follows a settlement UBS reached six months ago with Swiss financial regulator FINMA, which included a fine and bonus curbs.

"The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary action," Zurich-based UBS' Chairman Axel Weber and Chief Executive Sergio Ermotti said in a statement.

US banks JPMorgan and Citigroup and Britain's Barclays and Royal Bank of Scotland are expected to plead guilty to criminal charges with the US Department of Justice related to forex rigging, people familiar with the matter have said.


Source : Thehindubusinessline

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IndusInd Bank inks pact with payment processing company Worldpay

The UK-based payment processing giant Worldpay has partnered with IndusInd Bank to offer acquiring services in India.

The association will assist both the companies in processing customers’ payments and marks the first step for Worldpay in entering the Indian market — a result of the growth in eCommerce across the country, IndusInd Bank said in a filing to the BSE.

“We are delighted to offer eCommerce acquiring services in India in association with Worldpay. We are confident that the association will help both organisations to contribute to the growth of the growing Indian eCommerce industry,” IndusInd Bank, Head of Transaction Banking, Ramesh Ganesan, said.

This partnership will allow each company to benefit from the other’s respective expertise in domestic and international payments, thereby, helping in promoting online payment services in India, he added.

Worldpay, Deputy Chairman, Ron Kalifa said: “India’s increase in card use has meant that more of our customers are looking to expand operations in the country.”


Source : Thehindubusinessline

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SBI ties up with Amazon

Amid a wave of e-commerce and surge in online payments, State Bank of India has partnered with global e-commerce firm Amazon to serve its customers and small businesses.

"SBI and Amazon will develop trusted, frictionless payments and commerce solutions for customers and small businesses, capitalising on the exponential growth in internet penetration to drive the adoption of ecommerce and m-commerce in India," SBI said in a statement.

"We are working on ways to enrich customers' patent experience and opening up windows of e-commerce to our SME customers...We have a great opportunity to work tofwter to transform how India shops and sells," said Arundhati Bhattacharya, Chairman of SBI.


Source : Thehindubusinessline

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YES Bank recruits 94 from top B-Schools

Yes Bank has emerged as one of the top recruiters in the BFSI domain at India’s top business schools this year, extending a total of 94 offers.

The bank extended 14 offers at IIM-A and 38 offers were made across the other IIMs.

Premier schools

Other premier B-Schools Yes Bank visited this year include XLRI, FMS, SJMSOM, IIT Bombay, SPJIMR, JBIMS, MDI, MICA, NITIE, SCMHRD, NMIMS, IRMA, XIMB and NIBM. The new hires (popularly known as Y-PEPs) will be joining the bank’s training cum mentoring programme ‘YES Professional Entrepreneurship Programme’ (Y-PEP).

“We look at an entrepreneurial streak, ownership, out-of-the-box thinking, high degree of passion, commitment and professional pride while hiring talent from B-schools,” says Deodutta Kurane, Group President, Human Capital Management, Yes Bank.

Yes Bank offered roles including investment banking, treasury, corporate banking, wholesale banking, loan syndication, risk management, marketing and corporate communication, human capital management, transaction banking, technology solutions group and strategic government advisory at these campuses.

The average package offered by Yes Bank across profiles this year was approximately Rs13 lakh. “The bank has also offered stock options to B-school graduates for long-term wealth creation,” says Kurane.

Contrary to the hiring process at B-school campuses, the bank chose to hire a majority of the students through spot offers. It made just nine pre-placement offers as a part of the ‘Transformation Series Global Case Study Challenge’. The competition was conducted under the ‘University and School Relationship Management programme’.

To keep a check on attrition, the bank offers fast-track career progression opportunities, cross functional time-bound strategic project assignments, internal redeployments, job rotations and need-based cross business transfers to its key talent such as Y-PEPs. “Y-PEPs form a part of the ‘talent pool’ for the bank. They are tracked regularly and offered larger/cross-functional responsibilities,” says Kurane.

Y-PEPs go through a structured induction programme and an intensive on-the-job training where they work on real assignments to build their expertise and confidence.


Source : Thehindubusinessline

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IDBI Bank to roll out e-huts to connect with rural population, Goa gets two more branches

IDBI Bank has decided to roll out e-huts to connect with the rural populace, a senior bank official said here today.

"We will be launching e-huts across the country. It's a concept that is widely accepted in the West, but in India, it's yet to pick up," IDBI's Deputy Managing Director M O Rego said.

He said e-huts will be located at a relatively populated place.

"The bank has currently introduced e-lobbies which are next to the branches. The e-hut concept will be completely unmanned units... to help the customer understand technology," Rego said.

The top official was addressing a press meet in Goa after inaugurating two more branches in the state, taking the total to eight.

The branches were opened in Candolim and Chinchim. Rego said the newly opened branches are in line with the bank's strategy to strengthen its home and MSME loan portfolio in the state.

"IDBI has registered impressive growth in the region with 22 per cent growth in current accounts and saving accounts (CASA) in Goa. The total deposits in the state grew 16 per cent in the previous financial year," he said.

The structured retail assets, which include home loans as the largest component, saw a jump of 66 per cent in the state, Rego said.

The bank has also been extending support to medium and small enterprises in the region, and the lending to this segment rose 48 per cent, he added.

Source : Economic Times

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Not eyeing acquisitions for growth, says Federal Bank chief

Federal Bank Limited is not looking to reorient its strategy towards "inorganic growth" for now, Shyam Srinivasan, Managing Director and Chief Executive Officer, has said.

This private sector bank will continue to focus on ‘organic growth’ even as competition was adopting merger route for growth, Srinivasan told Business Line here.

He was responding to a question on whether Federal Bank would now look at acquisitions for growth instead of relying only at organic growth.

Srinivasan’s remarks are significant as it came on the heels of Kotak Mahindra Bank, a private sector lender, acquiring Bengaluru-headquartered ING Vysya Bank in an all stock deal.

This deal had catapulted Kotak Mahindra Bank to the fourth largest private bank in the country in terms of total business.

Srinivasan noted that Federal Bank still had more branches (1,247) than that of Kotak Mahindra Bank (1214 branches) post its ING Vysya bank acquisition.

While there was no proposal on the table for buyout of any other bank, Federal Bank however was not averse to buying "good quality portfolios", Srinivasan said.

"We are very much open to acquiring good quality portfolios (of assets)", Srinivasan said, adding that the bank would be careful in its choice given the weak asset quality environment in the country.

Federal Bank had closed the fiscal just ended with a credit growth of about 18 per cent.

For the current fiscal, the aim will be to grow its advances at 600-800 basis points over the banking industry’s growth rates, said Srinivasan.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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Bank of India ties up with returns filing portal

Bank of India (BoI) has tied up with income-tax returns filing portal myITreturn.com to facilitate e-filing of returns.

The tie-up enables Bank of India customers and employees to e-file their income-tax returns through the website.

Customers can also avail of various tax services by downloading the myITreturn app on their mobile phones. At present, several free features are being given to app users such as calculation of tax liabilities, e-filing status, and others. So far, more than 40,000 users have downloaded this app.

Saakar Yadav, MD of MyITreturn said, “Bank of India has one of the largest branch networks among the public sector banks in India, thereby expanding access to the myITreturn website and app service. We built myITreturn on the idea wherein one can finish filing his or her tax returns within 15 minutes. We want more and more people to avail themselves of our services through our website and mobile app.”

MyITreturn is currently in discussion with the Income-Tax Department to roll out additional security features in the upcoming version of the app so that they can provide services such as mobile e-filing of income-tax returns.

Now, one can log on to the myITreturn.com website and file his or her income-tax return within few minutes. Also, the app is completely free to use, and is currently available for Android users on the Google Play Store or users can go to https://myITreturn.com/app.


Source : Thehindubusinessline

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SBI launches online facility for overdraft against FDs

State Bank of India on Tuesday launched an online facility for Overdraft against Fixed Deposit, whereby customers holding fixed deposits in a single name can avail of up to 90 per cent of the FD amount as an overdraft to meet emergency and other needs.

As an introductory offer, SBI is charging an interest rate of only 0.5 per cent more than the linked FD. This is among the lowest in industry.

While the core product has been available at SBI branches for a while now, the online facility is part of SBI’s endeavour to take products and services onto the digital platform, SBI said in a statement.

The OD is created instantly without the need to visit a branch.

This facility is now available to all Internet banking users through the OnlineSBI portal. In the coming days, it will also be extended to the State Bank Anywhere mobile app.


Source : Thehindubusinessline

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Syndicate Bank to raise Rs2,000 crore from capital market

Syndicate Bank has planned to raise Rs.2,000 crore from the capital market.

However, the timing of the issue has not been specified by the bank.

In a communication to the stock exchanges, the public sector bank headquartered in Manipal in Karnataka said that its board today (May 19) approved raising of equity capital of Rs.2,000 crore including premium by way instruments like Qualified Institutional Placement (Domestic & Foreign Financial Institutions)/ rights issue /Follow on Public Offer (FPO) /or any other mode approved by the RBI / Government of India, "at an appropriate time".

The statement said that the board also cleared raising Basel III compliant additional tier I bonds up to Rs.1,800 crore and tier II bonds up to Rs.1,750 crore as per eligibility at an appropriate time.

Shares of Syndicate Bank closed at Rs.109.15, a gain of 20 paise, on the BSE today.


Source : Thehindubusinessline

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HDFC Bank launches medical prepaid card

HDFC Bank, the country’s second largest private lender, launched medical benefits prepaid card for corporates to disburse medical benefits to their employees.

HDFC Bank has partnered with Apollo Hospitals for this prepaid product that allows corporates to load the specified allowance onto the card each month, which can be used by employees for medical expenditure at pan-India VISA/ MasterCard outlets, the bank said in a statement.

The card also offers employees access to a wide range of additional benefits such as free accidental insurance of Rs. 3 lakh, complimentary ambulance services at select hospitals and offers and discounts at Apollo Network.

“This card offers an easy and convenient way for corporates to save costs and eliminate administrative issues while disbursing medical allowances," said Parag Rao, Senior Executive Vice President & Business Head, Cards Payment Products.


Source : Thehindubusinessline

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HDFC Bank hikes e-funds transfer charges

HDFC Bank customers will now have to pay almost 43 per cent more for sending up to Rs.10,000 using the instant real time inter-bank electronic fund transfer service — Immediate Payment Service (IMPS).

India’s second largest private sector bank has upped the service charge for sending up to Rs.10,000 from Rs.3.50 to Rs.5 with effect from May 15.

Unchanged brackets

This charge is excluding taxes. The bank has, however, left the service charges for the remaining two slabs – Rs.10,001 to Rs.1 lakh (service charge: Rs.5) and Rs.1,00,001 to Rs.2 lakh (Rs.15) – unchanged.

The IMPS was rolled out by the National Payments Corporation of India in collaboration with member banks in 2010.

It allows customers to make instant, 24x7, interbank payments to individuals, or merchants/enterprises via mobile phone and other channels (Internet or ATM).

They can also receive money through this mechanism from anyone else in a participating bank.

Usually, the transaction volumes in the up to Rs.10,000 slab are very high.

Hence, HDFC Bank will be able to earn more by way of service charges, said a senior banker.

ICICI Bank, India’s largest private sector bank, had raised the IMPS charges for sending up to Rs.10,000 from Rs.2.50 to Rs.5 with effect from February 10.


Source : Thehindubusinessline

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SBI Foundation for group CSR activities

The nation’s largest lender State Bank of India (SBI) has created a separate company, SBI Foundation, to carry out its massive CSR initiatives and hopes to get it “running” from July.

“We have been spending over 1 per cent of our profit on CSR even before the new law on corporate social responsibility (CSR), mandating every company to spend 2 per cent of its profit on such activities, came into effect. This is despite the fact that we are not legally bound to do so as we are not governed by the Companies Act.

“So, in order to streamline our CSR activities and better target our efforts, we’ve decided to create a new company called SBI Foundation. We hope to get the foundation running from July 1,” General Manager in charge of CSR and change management at SBI Vinod Pande told PTI.

Foundation Day

Incidentally, July 1 is the Foundation Day of the bank, which was started as Bank of Calcutta in June 1806. Pande said that in fiscal 2014, the bank had spent Rs.115 crore on CSR, on a profit of Rs.10,891 crore, which was Rs.6 crore more than its 1 per cent profit.

Pande said the SBI Foundation has already been registered under Section 8 of the Companies Act, 2013, which applies to non-profit companies or organisations and will be headquartered in Mumbai.

The foundation has already taken an office in the 22-storey Air India Tower in the city, where the bank has taken four floors.

Asked about management structure of the foundation, he said the bank Chairperson Arundhati Bhattacharya will be the Chairman of the foundation and it will have a full-time Managing Director and Chief Executive.

The State Bank and its five associate banks are registered under a separate Act of Parliament, the SBI Act. Pande said once the foundation is registered and starts working, SBI and its five associates banks as well its arms will carry out their CSR work via the foundation.

Pande said he expected the total outgo from the group to be more than Rs.200 crore this fiscal.


Source : Thehindubusinessline

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