‘Payments bank, a historic opportunity for India Post’

“Trust me ladies and gentlemen, India Post will soon be a force to reckon with. Until now we (India Post) were seen as a slumbering giant. Not anymore. We have woken up. This time we are not going to give it up, as payments bank presents a historic opportunity for India Post.”

So said MS Ramanujan, Member (Banking & HRD), Department of Posts, at the 3rd Financial Inclusion symposium organised by dun & bradstreet, exuding confidence about India Post regaining its spot under the sun.

“It’s very exciting for us as the payments industry is going to be like skating on thin ice. We don’t know who will fall by the wayside, when there will be a bloodbath, and what kind of pricing/revenue models will emerge,” he said, adding that this will be a game of high volumes and wafer-thin margins.

India Post is among the 11 successful applicants that recently got in-principle nod for a payments bank licence from the Reserve Bank of India.

The new entity will be registered as a company and will be called ‘India Post Payments Bank’. It will have an initial capital of Rs.300 crore, much more than the minimum of Rs.100 crore stipulated by the RBI.

“We will soon approach the Cabinet for approval,” Ramanujan told BusinessLine here.

Types of payments

The bank will undertake the following types of payments: P2P (people to people) — involving, say, remittances; C2G (citizen to government) — taxes, duties, levies, and so forth; C2B (customer to bank) — e-commerce-related payments, among others; and G2C (government to citizen) — such as direct benefits transfer payments.

One thing is certain — India Post will fully leverage the existing postal network (technology, personnel, etc) for its payments bank foray. However, the bank will have a separate logo.

As on date, nearly 7,000 full-services branches of the postal department are under core banking solution (CBS). By March-end 2016, all the 25,000 full-services branches of India Post will be under CBS, Ramanujan said.


Source : Thehindubusinessline

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SBI Mutual Fund’s AUM likely to cross Rs 1 trillion-mark soon

Assets under management (AUM) of SBI Mutual Fund has crossed Rs.98,000 crore and is soon likely to cross Rs.1 trillion-mark, its managing director said today.

“At SBI MF, we have recently crossed the AUM of Rs.98,000 crore and we are all set to cross the mark of Rs. 1 trillion in near future,” SBI MF Managing Director and CEO Dinesh Khara told PTI here.

He was speaking on the sidelines of an event organised by Indian Chamber of Commerce.

In its bid to increase the subscriber base, the company is currently conducting a host of activities which include making its presence felt in every part of the country through independent financial advisors (IFAs), among others.

“We are currently doing multiple things so as to bring more and more subscribers on board. While we are focusing on online sale, we are also trying to have our presence through IFAs in every nook and corner of the country,” he said.

Talking about the progress of ongoing SBI Equity Opportunities Fund-Series IV, he said, “We have seen good response coming from the investors for the close-ended scheme, which opened on October 7 and will come to a close on October 21.”


Source : Thehindubusinessline

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Federal Bank's missed call banking service

Federal Bank has launched another digital service called Missed Call Banking, a simple way to get account balance on mobile.

The service enables customers to get their account balance by giving a missed call to a dedicated mobile number. To avail the facility, customers have to do a onetime registration by sending an SMS (ACTBAL14 Digit account number) to 9895088888 from their mobile number registered with the bank.

Upon successful registration, the customer will receive an instant confirmation message. Thereafter, a simple missed call to 8431900900 will be enough to get the account balance instantly through SMS. This service is free and available 24X7.

Being SMS-based, the Missed Call Banking service can be availed by all customers. It is not essential to have a smart phone or a high end devise as any mobile handset will do. Also there is no need for internet connection, K A Babu, Head-Retail Business said.


Source : Thehindubusinessline

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Expansion pace eased on investor feedback: DCB bank MD

After facing investor flak, private sector lender DCB bank decides to change gears on the pace of its branch expansion to open 150 branches in 24 months from 12 months as decided earlier.

Shares of the bank fell 30 per cent since October 13, when the bank announced its results in which it laid out its plans to double its branch network in the next one year. Fearing its profit would shrink on such a plan, the market gave its negative feedback which affected the stock price.

In a statement to the exchanges, DCB bank said, “In view of the feedback received, and in close consultation with our Chairman, the management team has decided to install 150 plus branches in a cautious, prudent and calibrated manner over a period of 24 months (instead of 12 months).”

In its earlier expansion plans, the bank had said that its expansion plan of over 150 branches in the next one year is likely to break even in 24 to 30 months and payback in 44 to 50 months. In addition, it pointed out that, “The cost to income ratio, ROA (return on assets) and ROE (return on equity) will get negatively impacted due to the gestation period of the new 150+ branches. In the coming 24 to 30 months, depending on the speed and quality of implementation, we expect cost to income ratio to worsen by 5-11 per cent, ROA may be in the range of 50-60 bps and ROE may continue to be below 10 per cent.”

Answering the media and investors in the past 2-3 days, DCB Bank’s MD and CEO, Murali Natrajan said, “We as a management team are employees who are answerable to the bank’s stakeholders – customers, investors and employees. It is important to create value for them and we have to be sensitive towards investor feedback.”

It is more of pacing out of our investments and see it can take less risks and be cautious on our expansions. We met quite a lot of investors and they appreciated our strategy on the 150 plus branch expansion… Any plan has a risk element associated with itself. We have created a brand that is cautious. We have been growing at a pace of 25-30 branches per annum… So, we have to change gears, it has to be in a slightly more phased manner,” he added.

After the alteration in the expansion plan, DCB scrip ended higher by 3.7 per cent at Rs 95.80 per share on the BSE.

According to Natrajan, the bank is in a better position today than in the past 2-3 years.

Without commenting on the stock price, Natrajan said, “We have been discussing this for the past 6-8 months and thought we must accelerate our expansion. The product mix and portfolio remain the same.”

Giving an analogy of how a passenger of a car is as much a part of a ride as is the driver, Natrajan added that “as a bank we have to be sensitive to our stakeholders and are responsible to investors as well. After all, they provide capital to the bank. If we can act on our customer and employee feedback, why not on our investors.”


Source : Thehindubusinessline

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Lakshmi Vilas Bank Q2 net profit jumps 42% as bad loans fall

Lakshmi Vilas Bank has reported a 42 per cent rise in net profit for the September quarter at Rs. 45 crore as against a profit of Rs. 31.50 crore in the year ago quarter.

Net interest income grew to Rs. 160 crore, up by 19 per cent from Rs. 134 crore in the same quarter a year ago. Other income rose marginally to Rs. 64 crore as against Rs. 63 crore in the June to September period in FY14.

The asset quality of the bank improved with gross non-performing assets (NPA) substantially down to 1.89 per cent from 3.72 per cent as on September 30, last year. The Net NPA of the bank also reduced to 1.01 per cent from 2.78 per cent on a year-on-year basis.

As on September end, 2015, total advances increased by 28 per cent year-on-year to Rs. 17,574 crore, while total deposits grew 21 per cent to Rs. 23,445 crore.

Shares of Lakshmi Vilas Bank ended the day higher at Rs. 91.10 (+Rs 2.25 or 2.53 per cent) on the BSE.


Source : Thehindubusinessline

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Karur Vysya Bank net surges 57% to Rs. 142 cr in Q2

Karur Vysya Bank today posted a 57.14 per cent jump in net profit at Rs. 142.22 crore for the second quarter ended September 30.

The bank had recorded a net profit of Rs. 90.50 crore in the corresponding quarter last fiscal, Karur Vysya Bank said in a regulatory filing.

The total income of the lender also increased to Rs. 1,570.27 crore during the quarter from Rs. 1,494.86 crore over the corresponding period of 2014—15 fiscal.

During the quarter, the gross non—performing assets (NPAs) rose to 1.96 per cent from 1.36 per cent at the end of second quarter of 2014—15.

Net NPA of the bank also increased to 0.96 per cent from 0.59 per cent of the total assets.

The shares of the bank were trading in the afternoon at Rs. 430 down 3.78% on the BSE.


Source : Thehindubusinessline

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HDFC Bank suspends official involved in Bank of Baroda scam

Amid the alleged involvement of HDFC Bank official Kamal Kalra in the Rs. 6,000-crore illegal remittances, the private sector bank has suspended Kalra pending the investigation.

The scam involves Rs. 6,000 crore illegal remittances that have suspected to be flown out from Bank of Baroda's Ashok Vihar branch in New Delhi to Hong Kong and Dubai.

In a statement, HDFC Bank said, “The bank has a zero-tolerance policy for any misconduct on the part of its staff and any deviation from its clearly defined processes is viewed very seriously. Swift action is taken both at an organizational and employee level, and as per process the employee in question has been suspended pending the outcome of the investigation.”

”In response to reports relating to investigations against one of our employees, we would like to state that the matter is being examined internally on top priority. The Bank is also extending its full cooperation and support to the authorities as they conduct their investigations,” the statement further adds.

As per the investigation so far, both Central Bureau of Investigation and Enforcement Directorate have arrested six persons including Kalra, who is HDFC Bank’s Forex Sales Manager in the forex department, for the alleged money laundering.

While CBI arrested Suresh Kumar Garg, the assistant general manager of Ashok Vihar Branch and Jainis Dubey, the foreign exchange head, the persons arrested by the Enforcement Directorate include Kamal Kalra, Chandan Bhatia, Gurucharan Singh and Sanjay Aggarwal, who were allegedly involved in the transaction of 15 accounts.

Bhatia, Singh and Aggarwal are said to be owners of companies based in Hong Kong and Dubai towards which the money was being transferred through 59 accounts at the bank's Ashok Vihar branch.

Meanwhile, Bank of Baroda’s internal investigation had detected irregularities in foreign exchange transfers from said branch and also suspended five officers. The public sector bank has also changed the concurrent auditor firm of the specific branch.

“The investigation currently underway pertains to 59 current accounts, which were opened during the period between May 13, 2014 to June 20, 2015 and were used for outward foreign remittance transactions aggregating to $576 million (Rs 3,672.30 crore) predominantly for the purpose as “Advance remittance for imports” to overseas parties numbering about 418, mainly based in Hong Kong,” Bank of Baroda had said on Tuesday.

“It is pertinent to note that less than 10 per cent (Rs 343 crore) of the amount involved had been deposited in these accounts by way of cash and balance 90 per cent amount had been received through RTGS / NEFT from 51 different banks. Bank would also like to clarify that while the investigations are underway, at the current stage, it does not envisage significant financial losses on account of this incident,” it added.

There are many unanswered questions which continue to be probed, such as opening of current accounts in spite of inconclusive KYC process in some cases, individual failure of detection of irregularities, non-follow up of system alerts to track exceptional transactions and reasons for the long lead time to identify these irregularities.

The newly appointed MD & CEO, P.S. Jayakumar said, “My utmost priority is to examine the current situation and bring about the necessary changes within the bank to ensure such unfortunate incidents do not recur. This will include the appointment of an external accounting firm for full review of our KYC norms and its effectiveness across all branches…”


Source : Thehindubusinessline

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Bank of Baroda chairman meets Jaitley

The Finance Ministry on Wednesday took stock of the alleged Rs. 6100 crore remittance scam in public sector Bank of Baroda.

Newly appointed chairman of BoB Ravi Venkateshan also met Finance Minister Arun Jaitley.

"It was a courtesy meeting with the Finance Minister. Investigations are onit would be inappropriate to say anything” he said after the meeting.

However sources said the case is likely to be probed by the Serious Fraud Investigations Officethe amount of fund alleged to be involved could be lesser than estimated.

Checks would be made over the entire banking system to prevent such cases in the future.

"Our new Managing Director PS Jayakumar and I will together try to restore the Bank's image which has taken a hit due to the case" Venkateshan said.

Jayakumar took over as BoB Managing Director and CEO of BoB on Tuesday.


Source : Thehindubusinessline

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Jan Dhan deposits cross Rs 25,000 cr

In a big boost to the government’s financial inclusion agenda, deposits in bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have exceeded Rs.25,000 crore.

“As on October 7, the deposits collected stood at Rs.25,146.97 crore,” said the Finance Ministry in a statement, adding that zero-balance accounts are now less than 40 per cent of the total accounts. The ministry said State Bank of India, United Bank of India and Oriental Bank of Commerce are the major contributors to PMJDY.


Source : Thehindubusinessline

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DCB Bank Q2 net dips 10%

Private sector lender DCB Bank reported a 10 per cent decline in net profit to Rs.37 crore in the second quarter ended September 2015 mainly due to higher provisioning and tax expenses.

Provisioning towards bad loans and other contingencies rose 58 per cent to Rs.22 crore as against Rs.14 crore a year ago.

Tax expenses rose nearly four-fold to Rs.20 crore from Rs.5 crore in the corresponding quarter last fiscal.

Net interest income, the difference between interest earned and interest expended, grew 27 per cent to Rs.150 crore ( Rs.118 crore a year ago), led by strong growth in advances. Non-interest income rose 32 per cent year-on-year (y-o-y) to Rs.49 crore.

Net interest margin improved a tad to 3.79 per cent (3.72 per cent).

As on September-end, advances grew 27 per cent y-o-y to Rs.11,180 crore, while deposits spiked 24 per cent to Rs.13,557 crore.

NPAs up

Asset quality deteriorated with gross non-performing assets (NPAs) rising nine basis points y-o-y (up three bps q-o-q) to 1.99 per cent.

Net NPAs increased (down six bps on sequential basis) to 1.16 per cent in Q2 FY16 from 1.07 per cent in Q2 FY15.


Source : Thehindubusinessline

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