SBI associate merger proposal irks employee's unions, strikes to follow

Even as the State Bank of India management starts deliberating mergers of its associate banks with the parent, the employees' union is planning a series of bank strikes protesting against such a move.

More than 50,000 employees did not work on Thursday at about 6,000 bank branches of five SBI group banks as All Associate Banks of SBI, the employees' union, called a strike.

The union will again observe the same on June 24 as the conciliation meeting with the SBI management fizzled out in New Delhi at the Central Labour Commissioner a few days ago.

"Only a general manager attended the meeting on behalf of SBI without giving any concrete assurance to our demands," said Sudesh Karkera, vice president, Maharashtra State Bank Employees Federation, who is also an employee of State Bank of Mysore.

"We will extend our protest unless our matters are addressed. On June 24, other state-owned lenders too will join the strike call," he said.

"All associate banks are profitable. We will be treated with step-motherly attitude if we are merged with the parent bank."

With this customers will face trouble in transacting at branches as banking services cripple on strike calls.

So far SBI has merged State Bank of Surastra and State bank of Indore in past few years. Plans are on the anvil to follow the same process with State Bank of Mysore, State Bank of Travancore, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala.

The move is aimed at raising the rank of SBI in the international arena. With market capitalization of US$38 billion, SBI is now ranked 46th globally.

Moreover, Indian banking industry strewn with many local small banks needs consolidation, say experts.

Some of the union demands include the inclusion of retired employees into the union-fold as SBI management has apparently declined to recognize retired employees as union representatives, said the union leader.

"In terms of emoluments and benefits, there is a huge difference between SBI employees and associate employees," said Karkera.

For example, SBI employees get up to Rs 45 lakh as home loan from the bank while group bank employees are entitled to have Rs 12 lakh only, he cited.

Source : Economic Times

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United Bank of India cuts fixed deposit rates by up to 0.5% on select maturities

State-owned United Bank of India today slashed interest rates on fixed deposits by up to 0.5 per cent on select maturities, a move that is being seen as precursor to a cut in lending rate.

The bank has revised its interest rates on its retail term deposits for 1 year to 8 per cent and above 1 year to 7.75 per cent, UBI said in a statement.

Currently, the interest rate on fixed deposits above 1 year is pegged at 8.25 per cent.

The new rates will be effective from June 8, it said. PNB and Axis Bank had yesterday reduced fixed deposit rates.

The decision by banks to cut interest rates on fixed deposits comes two days after the Reserve Bank reduced key policy rate.

As part of its second bi-monthly monetary policy review, RBI cut the repo rate (short-term lending rate) from 7.5 per cent to 7.25, but left other policy tools like cash reserve ratio unchanged at 4 per cent and Statutory Liquidity Ratio (SLR) at 21.5 per cent.

Following policy action, several banks including market leader State Bank of India have reduced base rates or minimum lending rate. SBI cut it to 9.70 per cent from 9.85 per cent effective June 8.

Allahabad Bank cut base rate by 0.30 per cent to 9.95 per cent, while Dena Bank, Punjab & Sind Bank reduced their base rate by 0.25 per cent each. Dena Bank and Punjab & Sind Bank lowered their base rate to 10 per cent.

With these reductions, all loans linked to the base rate will come down proportionately.

IDBI Bank, however, has reduced bulk deposit rate, a move which is a precursor to a cut in lending rate.

Other banks are likely to follow suit in the next few days.

Source : Economic Times

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Andhra Bank cuts lending rate by 25 bps

Andhra Bank has reduced its base rate by 25 basis points from 10.25 per cent to 10 per cent with effect from June 11, 2015.

The Benchmark Prime Lending Rate (BMPLR) has also been reduced from 14.50 per cent to 14.25 per cent with effect from the same date, Andhra Bank said in a statement.


Source : Thehindubusinessline

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SKS Microfinance cuts interest rate by 1.55%

SKS Microfinance Ltd on Thursday announced a 1.55 per cent reduction in the interest rate charged to the borrowers.

It cut the interest rate from 23.55 per cent to 22 per cent with effect from July 1, 2015. ``With the present reduction, SKS Microfinance charges the lowest rate among the Non-Banking Finance Company – Micro Finance Institutions.

(NBFC-MFIs) on its core income generating loans which are unsecured micro loans,’’ the company said in release issued here today.


Source : Thehindubusinessline

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Deutsche Bank to launch tech labs

Deutsche Bank will launch three innovation labs this year, partnering with big development firms to speed creation of financial technology for its own uses and will spend up to €1 billion on digital development in the next 5 years.

German bank said it would work with three technology partners for the labs, including Microsoft in Berlin, HCL in London and IBM in Silicon Valley.

"These labs will act as a bridge between start-ups and different parts of the bank, enabling it to apply innovative technology to enhance service to clients and internal processes," said Henry Ritchotte, Chief Operating Officer and Chief Digital Officer, in a statement.


Source : Thehindubusinessline

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Axis Bank cuts deposit rates by up to 20 bps

A day after the Reserve Bank’s policy announcement, country’s third-largest private sector lender Axis Bank announced a deposit rate cut of up to 0.20 per cent.

“We have cut the deposit rates between 0.10 per cent to 0.20 per cent across all tenors,” a bank official told PTI.

The revision in deposit rates, which generally precedes a lending rate cut, is applicable June 9, the official said.

However, the bank has not taken a call on lending rate, the official said.

It had cut its base rate or the minimum rate of lending, by 0.20 per cent in April to 9.95 per cent after RBI’s hard talk on bank holding on to higher rates.

After announcing 0.25 per cent reduction in its key rate yesterday, RBI Governor Raghuram Rajan had continued to sound dismayed with banks for a lack of enthusiasm in transmitting RBI’s policy moves to lending rates and also warned them that they stand to lose market share to money market alternatives because of this.

He said banks have cut deposit rates by 1 percentage point in the recent months. Banks like SBI, which has been the most aggressive in cutting lending rates, have cumulatively cut rates by 0.30 per cent.


Source : Thehindubusinessline

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SBI associate banks' staff to strike on June 4

A section of employees of five associate banks of SBI will go on strike tomorrow to protest against the proposal for merger of associate banks with the parent bank.

Bank employees under the banner of State Sector Bank Employees Association (SSBEA) will go on nationwide strike tomorrow, S K Gautam, the Secretary of SSBEA, said today.

SSBEA comprise unions in the associate banks of State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala.

“On June 2, with intervention of Chief Labour Commissioner of Delhi, a meeting was held between management of State Bank of India and SSBEA but it ended in a deadlock in the absence of any offer from the management for redressal of our grievances. So, we are left with no alternative except to go on strike tomorrow,” Gautam said.

Protesting bank employees are demanding delinking of associate banks from State Bank of India, saying that these associate banks should not be merged with SBI.

State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala are the five associates of the country’s largest lender SBI.

Their other demands are extension of compassionate appointment scheme as per government guidelines, recruitment of sub staff and part—time employees, increase in quantum of staff housing loan, among others.


Source : Thehindubusinessline

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PNB cuts fixed deposit rates by 0.25%

State-owned Punjab National Bank (PNB) today slashed the interest rate on fixed deposits by 0.25 per cent on select maturities, a move which could be seen as precursor to a cut in lending rate.

The reduction will be effective June 8, PNB said in a statement.

The decision to cut interest rate on fixed deposits comes a day after the Reserve Bank of India reduced the key policy rate.

As part of its second bi-monthly monetary policy review, RBI had yesterday cut the repo rate (short-term lending rate) from 7.5 per cent to 7.25, but had left other policy tools like cash reserve ratio unchanged at 4 per cent and statutory liquidity ratio (SLR) at 21.5 per cent.

Following policy action, State Bank of India has reduced its base rate or minimum lending rate to 9.70 per cent from 9.85 per cent effective June 8.

Another state-owned Allahabad Bank has cut the base rate by 0.3 per cent to 9.95 per cent, while Dena Bank, and Punjab & Sind Bank have reduced their base rate by 0.25 per cent each to 10 per cent.

With the reduction, all loans linked to the base rate will come down proportionately.

IDBI Bank, however, has reduced the bulk deposit rate, a move which is a precursor to a cut in lending rate. Other banks are likely to follow suit in the next few days.


Source : Thehindubusinessline

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South Indian Bank to raise FDI limit by 10%

The board of directors of South Indian Bank has decided to increase the FDI limit by 10 per cent subject to shareholders/FIPB approval.

With the proposed increase, the foreign shareholding can go up to 59 per cent against the maximum permissible limit of 74 per cent prescribed under FDI policy in the case of private sector banks.

According to V G Mathew, Managing Director & CEO, the bank plans to raise further capital from the market to support its growth plan and the change in FDI cap is expected to catalyse the capital augmentation programme.

Meanwhile, the bank has also rolled out RuPay premium debit card in association with National Payments Corporation of India. The card comes with upgraded features and provide secured access to large number of ATMs, POS terminals, e-commerce Web sites and participating merchants across the country.


Source : Thehindubusinessline

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SBI cuts base lending rate by 15 bps

State Bank of India (SBI), country's largest bank, on Tuesday decided to cut its base or minimum lending rate by 15 basis points (bps) to 9.7%, effective June 8.

Other peer banks ICICI Bank and HDFC Bank are likely to follow suit.

SBI's base rate cut comes the same day when the RBI cut its key interest rate or repo rate by 25 bps to 7.25% in it bi-monthly monetary policy of 2015-16.

SBI had previously cut its base rate by 15 bps on April 7 after the RBI's first bi-monthly policy where RBI had maintained a status quo keeping the repo rate unchanged at 7.50%.

The reduction of 25 bps cut in the repo rate by RBI was its third monetary easing this year.


Source : Thehindubusinessline

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RBI not a cheerleader for markets: Rajan

Doing some plain-speaking, Governor Raghuram Rajan today said the RBI is not a ‘cheerleader’ and he may have “erred a bit” in lowering the policy rate to push investments as growth was not happening at the ground level.

He said GDP growth might be weaker than what the headline number suggested and questioned why an economy needed rate cut when it was growing at 7.5 per cent.

There is a “contradiction” in the higher GDP growth numbers and poor corporate earnings while there was no visible pick—up in the consumer demand, he added.

“In some sense it is a Goldilocks policy, just right given the current situation,” Rajan said, while defending his third 0.25 per cent rate cut this year despite lingering concerns over the below—normal monsoons as well as steadily firming oil prices and their impact on inflation.

After two off-policy rate cuts of 0.25 per cent each since January, Rajan today reduced the short-term lending rates by 25 basis points to 7.25 per cent.

“The RBI is not a cheer leader. Our job is to give people confidence in the value of the rupee, in the prospects of inflation, and having established that confidence, create a longer-term framework for good decisions to be made.

“Every time an exporter comes to me and says that stability has been very valuable for us to make decisions, that reinforces my view that these our main role is not to act as cheer leaders,” Rajan told reporters here at the customary post-policy press briefing.

His response came on a query as to why the RBI chose a moderate 25 bps cut and not a “booster-dose of 50 basis points“.

However, he added that he might have erred a bit to push investments in spite of higher headline growth numbers, as investments been stalled for many quarters now.

“In fact, we have sort of erred a little bit on focusing on encouraging investment, given the need to alleviate medium-term supply constraints,” Rajan said, adding however that recent corporate earnings confirm that at the ground level growth is not happening nor there is any visible pick—up in the end user demand.

He termed today’s policy move as neither conservative nor aggressive, but based on the current data available and underlined that “going forward, as in the past, our policy steps will be data contingent“.

He also denied being under government pressure for cutting the rates, saying the decision was purely based on available data.


Source : Thehindubusinessline

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Future rate cuts are data dependent: Karnataka Bank MD

The Managing Director and Chief Executive Officer of Karnataka Bank Ltd, P Jayarama Bhat, has said that the Reserve Bank of India has delivered the much expected 25 basis point cut in the repo rates.

Bhat said the statement on inflationary expectations, lower monsoon predictions and upward expected movements in oil prices will pose uncertainty in future actions on rates. “Any future cuts in rates are more data dependent,” he said.

He said the Karnataka Bank has already lowered the base rate by 25 basis points with effective from June 1.


Source : Thehindubusinessline

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Corporation Bank eyes CASA ratio of 25%

Corporation Bank is keen to raise its current account savings account (CASA) ratio to 25 per cent by end March 2016, its Chairman and Managing Director S R Bansal has said.

The CASA ratio of the bank is now pegged at 17 per cent. "Our CASA ratio needs to go up further. The aim is to take it to 25 per cent by March this fiscal". Bansal told Business Line.

On Tuesday, Bansal inaugurated the 2300th branch of Corporation Bank at Gurgaon in Haryana.

This public sector lender plans to open atleast 500 new branches across the country this fiscal, Bansal said.

Higher the CASA ratio, better the net interest margin, which means better operating efficiency of the bank. Moreover, current and savings accounts are a cheaper source of funds for the bank.

Bansal said that Corporation Bank would this current fiscal look to better its profitability besides improving the quality of assets.

There is no plan in the current fiscal to offload any of the stressed assets to any asset reconstruction company, he added. "We have decided to manage it (NPA situation) ourselves and do it inhouse"

Corporation Bank had also recently reduced its base rate for lending to 10 percent (from 10.25 percent) with effect from June 1.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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