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Friday, November 25, 2016

Demonetisation: Currency recall could cost India a massive Rs 1.28 lakh crore, says CMIE

The cost of withdrawing high-denomination currency notes to wipe out black money from the country will be about Rs 1.28 lakh crore during the 50-day window till December 30, the Centre for Monitoring Indian Economy (CMIE) said.

The overall cost could be much higher, the private economy watcher estimated. The demonetisation invalidated 86% of the Rs 17.8 lakh crore of currency that was in circulation on October 28. “A steady stream of news reports of empty mandis, low footfalls at malls and drop in business in restaurants, stressed factories paint a grim picture of the effects of a sudden withdrawal of liquidity from markets,” CMIE said in a report on Thursday.

Emphasising that all estimates are conservative and limited to the 50-day window, CMIE said the government and the Reserve Bank of India are estimated to bear a cost of Rs 16,800 crore, largely on account of printing new currency notes and transporting them to banks, ATMs and post offices.

CMIE said businesses are expected to pay the biggest price of the demonetisation, which became effective on November 9, and the immediate impact could be about Rs 61,500 crore, or 48% of the total cost of the exercise.

“We estimate the direct impact on business in terms of the drop in discretionary spending by households. This alone adds up to more than half a trillion rupees during the 50-day period till end of December,” it said. After enterprises, the other big sector to get hit is banks, which, according to CMIE, “lose a lot more.”

Wage levels of bankers are higher than those of the average person in the queue and banks suffer overheads and operational costs in terms of recalibrating ATMs to dispense new notes. “Banks would do little else during this 50-day period and we estimate that they would bear a cost of Rs 35,100 crore,” it said.

People standing in queues to exchange or deposit old currency notes bear 12% of the total cost and could lose Rs 15,000 crore in foregone wages during the period. The long-term impact could be more, CMIE said.

“All estimates are admittedly conservative. All estimates are limited to the 50-day window. However, the impact of low liquidity, broken supply chains and loss of confidence in consumers is likely to impact the economy over a longer period,” CMIE said.

Source : Economic Times
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No more over-the-counter exchange of old notes

Facing severe attack in the wake of difficulties thrown up by demonetisation, government tonight extended till December 15 the facility of using old Rs. 500 notes in public utilities and included more services like mobile recharge but stopped the over-the-counter exchange of defunct currencies and use of Rs. 1,000 notes.

From now on payment of fees up to Rs. 2,000 per student has been allowed in schools and colleges run by central and states governments, municipalities and local bodies.

Payment towards pre-paid mobile top-up to a limit of Rs. 500 per recharge has also been allowed while purchase from consumer cooperative stores will be limited to Rs. 5,000 at a time, an official release said.

Current and arrears dues payments will be limited to only water and electricity, a facility that will continue to be available only for individuals and households.

However, the release said payments for the transactions under all the exempted categories will now be accepted only through old Rs. 500 notes.

“Considering that the Ministry of Road Transport and Highways have continued the toll free arrangement at the toll plazas up to December 2, it has been decided that toll payment at these toll plazas may be made through old Rs. 500 notes from December 3 to December 15,” it said.

Foreign citizens will now be permitted to exchange foreign currency up to Rs. 5,000 per week. Necessary entry to this effect will be made in their passports, it said.

Explaining the reason for discontinuance of exchange of the defunct notes, the release said it has been observed that over-the-counter exchange of the old notes has shown a declining trend.

It has further been felt that people may be encouraged and facilitated to deposit their old Rs. 500 and Rs. 1000 notes in their bank accounts. This will encourage people who are still unbanked, to open new bank accounts, it said.

Consequently, it said, there will be no over-the-counter exchange of old notes after midnight tonight.

The exemptions were initially announced by Prime Minister Narendra Modi when he disclosed the demonetisation scheme on November 8. Subsequently there have been modifications in these measures.

The release said the government has been reviewing the issues arising out of the cancellation of the legal tender character of the high denomination notes.

The Government has also been receiving various suggestions in this regard. After due consideration of all relevant aspects, decisions relating to certain operational aspects of the Scheme have now been taken, it said.

There has been large scale criticism of the government in the wake of severe hardships faced by a cross-section of people following demonetisation of high denomination currency.

Source : Thehindubusinessline
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60 per cent of SBI ATMs are calibrated, operational

As of Wednesday, State Bank of India has managed to calibrate 60 per cent of its ATMs.

The rest would be done within the next five days, the bank's Chairperson, Arundhati Bhattacharya, said on the sidelines of SBI's Community Service Banking organised at the bank's Administrative Office premises in Coimbatore.

She also admitted that though 60 per cent of the ATMs were calibrated, most of these automated teller machines were loaded with the new Rs. 2,000 currency, because the new Rs. 500 note was not available in the first few days. “It has just started to come in.”

“The machines have been calibrated to dispense the new Rs. 500 as well. Every State is getting covered, but at a slower pace. As the higher denomination currency came first, it was important to put in (load) some bulk. The new note will be available in Chennai from today and Coimbatore will get it soon enough. Once the new currency gets distributed we will load these on the ATMs,” she said.

She allayed rumours about the difficulty in getting the new Rs. 500 currency calibrated. “When we calibrated for Rs. 2,000, we did so for Rs. 500 as well,” she said.

Source : Thehindubusinessline
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SBI, associate banks merger on track

State Bank of India Chairman Arundhati Bhattacharya on Thursday said that the merger of associate banks with SBI is on track and remains unaffected because of the demonetisation move.

“There is a separate team working on this and they are not into demonetisation exercise,” she told reporters in Coimbatore.

She said the demonetisation exercise has impacted branch working. “But this has not impacted any other team working alongside. So the merger exercise is on track. We have to receive the Government approval, there are several steps along the way. Once approved, we will come together,” she said, unwilling to commit on a timeline.

The SBI chief is in the city to take part in a leadership summit titled “Insight – The DNA of Success”, organised by Isha Leadership Academy.

Source : Thehindubusinessline
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ATMs in rural areas are still a far cry

Remember the long queues at bank branches and spending hours to do a simple transaction such as cash withdrawal?

Most of you may not, because the advent of ATMs changed that trend a long time ago, providing customers access to money any time. But after the Centre announced the demonetisation scheme a fortnight ago, people in cities and metros were seen queueing up outside ATMs to do a simple cash withdrawal. And this, when over 80 per cent of the 2.15 lakh ATMs as of June 2016 are in metro, urban and semi-urban areas.

With only 40,000-odd ATMs available in rural areas, access to money in the remotest parts of the country posed a greater challenge. While public sector banks operate only about 20 per cent of their ATMs in rural areas, the reach of private banks in the hinterland is far poorer with just 8 per cent of their ATMs in these areas.

According to data put out by the RBI, State Bank of India has the highest number of ATMs in the country operating 49,669 ATMs as of June 2016, followed by ICICI Bank, Axis, HDFC Bank, Canara Bank and Bank of Baroda.
Bunched up

All the top banks have over three-fourth of their ATMs in urban, metro and semi-urban areas. There are a few banks such as UCO Bank, United Bank, Punjab and Sind Bank that have a higher — 34-38 per cent of their branches in rural areas. But given that ATMs of these banks are fewer in number (less than one to one per cent of the total number of ATMs), it does not help in better reach.

SBI has a little under 8,000 ATMs in rural areas; the second largest network belongs to Punjab National Bank with a far lower number of around 2,700. The count reduces significantly to less than 1,000 ATMs after the top 10 banks.

The National Payments Corporation of India (NPCI) puts out a more granular data covering all members of the National Financial Switch — the largest network of ATMs in India. This includes 99 direct member banks, 587 sub-member banks, 56 Regional Rural Banks (RRB) Banks and eight white label ATM providers as of October 2016.

The weak penetration of ATMs across the country is starker in the figures put out by the NPCI. As of October 2016, there are 2.3 lakh ATMs across the country.

Of this about 92 per cent are operated by direct member banks. Sub- member banks and RRBs put together have only about 3,700 ATMs. The rest are white-label ATMs.

One of the initiatives that the RBI took a couple of years back, was to grant licences to non-bank entities to set up white-label ATMs (WLAs) in the country. The main objective of this was to expand reach of ATMs in semi-urban and rural areas, where banks were not able to put up ATMs. Under the RBI’s guidelines, a minimum number of WLAs have to be installed in Tier-III to -VI centres, depending on the scheme opted by each player.

White-label ATMs

Hence almost 41 per cent of WLAs operate in rural areas. However since the total number of WLAs itself is significantly smaller than bank-operated ATMs, access to money still remains a challenge. As of October 2016, there were just 14,427 white label ATMs. Of the 8 players in this market, two players — Tata Communications Payment Solutions (8, 941) and BTI Payments (4, 087) — alone constitute 90 per cent of total white label ATMs. The number of ATMs set up by rest of the players, are far lower in the tally.

With the number of transactions failing to scale up in these remote areas, WLA operators have found it difficult to generate revenues and hence expand further.

Source : Thehindubusinessline
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Monday, October 24, 2016

Passwords compromised in majority of debit card fraud transactions

Amid reports of widespread debit card security breaches, a senior State Bank of India official on Saturday said the passwords were compromised in majority of cases.

"I strongly believe password is being compromised and most cases are of false transactions," Chief General Manager of State Bank of India, Bengal circle, Partha Pratim Sengupta told IANS.

SBI, the country's largest commercial lender, has advised its customers to use the bank's own Automated Teller Machine (ATM) network after the security breach of around six lakh debit cards issued by the bank.

"Prima facie information says a lot of password compromise is happening. But we are obviously looking into the audit trail and will check transaction history of all customers who have suffered to see if there is any kind of malware problem," he said.

Also read: Debit cards from SBI, HDFC Bank, Axis Bank ICICI Bank compromised

The bank had blocked the debit cards whose security was reportedly breached due to the malware attack.

Some of the country's top private banks like HDFC Bank, ICICI Bank and YES Bank among others too are facing similar issues and several of the customers' debit cards are reportedly being compromised.

SBI on Wednesday had blocked close to six lakh debit cards following a malware-related security breach in a non-SBI ATM network.

Several other banks such as Axis Bank, HDFC Bank and ICICI Bank too have admitted being hit by similar cyber attacks -- forcing Indian banks to either replace or request users to change the security codes of as many as 3.2 million debit cards over the last two months.

There were also reports of fraudsters robbing customers by of their bank deposits by calling them up and forcing them to give out details of debit cards on the threat of blocking the debit cards.

Sengupta cautioned customers not to divulge details like pin, card verification value, or any other identity information to anybody. "The bank will never ask for these details."

Source : Economic Times
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Govt to set up Rs 1,000-cr cyber security R&D fund

With the recent escalation in threats from neighbouring countries and incidents of ATM/debit card data breach, the Centre is setting up a cyber security research and development fund of Rs.1,000 crore to be spent over five years.

According to senior officials, this will be administered by a high-power committee headed by National Security Advis0r Ajit Doval.
Focus on critical infra

One of the salient features of the proposed scheme is the emphasis on technology for protection of critical infrastructure needed by law enforcement agencies, sources told BusinessLine.

At a mid-October meeting of the Cabinet Committee on Security (CCS), it was decided that such an R&D programme can be operationalised and implemented by the National Security Council Secretariat (NSCS). The fund will be sourced from the annual budgets of the Department of Science and Technology (DST) under a separate head.


The activities proposed to be covered under the programme will include support for R&D projects, setting up centres of excellence, an inter-operability laboratory to test the developed hardware and software products, indigenisation of products, and human resource development.

Such a scheme was first proposed in 2013, and in July last year it was again floated with a draft note for the CCS from the NSCS for comments, the official said.

The sources also said that the CCS, at its meeting in May 2013, had considered and approved the note on ‘Framework for Enhancing Cyber Security of Indian Cyber Space’. It was proposed to set up a national-level fund for undertaking R&D in certain strategic areas of cyber security.

Vulnerability effect

“So, it is a proposal already in place, which is being revisited,” said another official, adding that the government has decided to establish the R&D fund now, considering the current situation of vulnerability.

The recent advances in ICT (information, communication, technology) and the exponential growth of the Internet are posing several challenges in the form of sophisticated/complex cyber incidents, the sources said.

“Such cyber incidents and risks may cause major disruptions that could impact the economy. Dependence on a few countries for technology and equipment could compromise national interest and security,” said one of the sources.

Considering the strategic and critical nature of cyber space, several countries recently included cyber as part of their military strategy and brought security products under the export control regime.

Under these circumstances, India cannot lag in such developments, the sources added.

“It is a challenge for all of us to allow the fast spread of the digital world, at the same time ensure security,” Ravi Shankar Prasad, Electronics and Information Technology Minister, tweeted recently, highlighting the importance of security in the cyber space.

Source : Thehindubusinessline
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We use 1% of profits for CSR annually, says SBI chief

The State Bank of India annually contributes around 1 per cent of its profits to socially relevant and corporate social responsibility projects. SBI Chairman Arundhati Bhattacharya shares with BusinessLine details of the projects and strategies the bank adopts. Edited excerpts:

What kind of projects has the SBI take up under its Corporate Social Responsibility initiatives, especially on education, empowerment, financial inclusion and Swachh Bharat?

We have been working on all of these areas. For instance, under Swachh Bharat, last year, , we asked each of our 14 LHOs (Local Head Offices) to adopt one district and build toilets for girls in all schools in that district.

With respect to education, we are doing a project along side Oracle India, called D-Change. Under this programme, we go to schools and teach children how to use internet and computers for productive purposes.

Subsequent to the students being taught, we hold weekend classes where the students in turn teach their parents.

With the help of volunteers from SBI and Oracle, we provide vocational training in 117 Rural Self Employment Training Institutes.

In the past few years, we have trained almost 2,50,000 people, 49 per cent of whom are either employed or run a business. We also give them small loans, if we feel that we can settle them in a good business.

In Karnataka, under the Gram Ujjwala scheme, we have donated one solar street lamp each to 212 villages.

Besides all of these, we have also donated a large number of ambulances and medical equipment. We have given RS10 lakh to 35 people who were not able to afford heart surgeries.

Recently, we donated a van to the Indian Cancer Society. The van has an entire lab for detecting cancer, including space for general examination, a blood testing unit, a Pap smear unit and a mammogram unit.

Does the SBI regularly contribute a sizeable amount for CSR. What kind of spend does the bank do? Is it more than the mandated 2 per cent stipulated by the Companies Act?

We did not start this now. We have been doing it from the beginning.

We don’t contribute the mandatory 2 per cent because we are a statutory company. As a statutory company created by an Act of Parliament, the Companies Act does not apply to us. For a very long time, we have been using 1 per cent of our profits for CSR activities. Even today, we continue to use 1 per cent; especially because banks have been going through a lot of stress in the past few years. The Reserve Bank of India has told us to keep it at 1 per cent. But, we are trying to increase the volunteering.

How does the SBI measure the success of its intervention in societal projects?

That is one of the reasons why we set up a foundation. When we were doing it through the bank, the contributions were in small pieces and we could not really assess the impact. Now, we are doing this through the foundation; we are doing many of these projects in conjunction with others, and because the scope of the project becomes large, it is much easier to measure the impact. We started doing the impact measurement last year. We will have to wait for a while to understand what change we are making.

After an intervention, when does the SBI decide to disengage?

Normally, when we get into a project, we decide on a goal and the number of people it needs to cover. If that goes well, we can extend the project. We don’t need to disengage, but if we find that it is not working out the way we want, we will disengage and move to some other effort.

Has the SBI made a one-time contribution to any project or movement?

Yes. For instance, we recently made a one-time contribution to the Barasat District Hospital, Kolkata, for a radiation machine. There are other examples, too.

Source : Thehindubusinessline
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Saturday, October 22, 2016

ATM compromise: Yes Bank says vendors need to do more

In wake of a system-wide security scare triggered by a malware attack on systems of its vendor Hitachi Payment Systems, Yes Bank sought to distanceitself from the breach and stressed on need to police service providers in a better way.

"There needs to be a lot more vigilance where there are outsourcing partners to make sure they don't endanger the delivery and system risk, and there's a fair amount of policing as far as outsourcing risks are concerned," its managing director and chief executive Rana Kapoor told reporters here.

According to media reports, systems of Hitachi Payment Systems which counts on Yes Bank as one of its major customers, are suspected to have been breached.

Asserting that there has not been breaches with the bank, Kapoor said there is a need for vigilance on the outsourced aspects because a bank does not do every function in-house.

Kapoor also exuded confidence in the security architecture of the National Payments Corporation of India (NPCI), calling it as the finest in the world.

Following the discovery of the breach, he said the bank has initiated some cautionary measures to ensure that its customers do not get affected. ..

A bank spokesperson said after the suspected breach came to light for the first time, it had advised all its customers to change their secret personal identification numbers (PINs).

Also, to ensure that they indeed change the PINs and minimise the risk, it capped withdrawal at Rs 5,000 per transaction till the PIN gets changed.

According to reports, over 32 lakh cards stand at risk following the suspected security breach and banks have taken a slew of actions to thwart any untoward possibilities by either replacing the cards or asking them to change the PINs.

Source : Economic Times
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Wednesday, May 4, 2016

Airtel Payments Bank to begin operations from Q2

Airtel M-Commerce Services, a subsidiary of Bharti Airtel (Airtel), on Tuesday said it has been renamed as Airtel Payments Bank after receiving the necessary approvals from all concerned authorities.

The company also unveiled a new logo to reflect its new identity. The company plans to start rolling out its banking network in the second quarter of the current financial year, it said in a statement.

On April 11, Airtel Payments Bank received a payments bank licence from the Reserve Bank of India. It plans to leverage on Airtel’s national distribution network in the rural areas and offer a platform to deliver banking services to the last mile.

Currently, the Airtel distribution channel is spread across 15-lakh outlets covering around 87 per cent of the country’s population.

Kotak Mahindra Bank has acquired 19.90 per cent stake in Airtel Payments Bank for around Rs98.8 crore.

Source : Thehindubusinessline
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YES Bank cuts lending rate

YES Bank has reduced its marginal cost of funds-based lending rate (MCLR) by 10 basis points across all tenors. The MCLR for one year now stands at 9.5 per cent, against 9.6 per cent earlier. The MCLR cut is effective from May 1. On Monday, State Bank of India, the country’s largest bank, announced a five basis points cut in its MCLR across maturities. After the cut, SBI’s one-year MCLR now stands at 9.15 per cent, against 9.20 per cent earlier. Once the MCLR is pared, all loans linked to it, including home, car, personal, and education, become a tad cheaper.

Source : Thehindubusinessline
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Wednesday, March 9, 2016

BEFI extends support to strike call by RRB employees

The Bank Employees' Federation of India (BEFI) today came out in support of a two-day national strike by employees and officers of regional rural banks ( RRBs) protesting against the government's move of alleged privatisation on March 10-11.

"The union supports the genuine demands of RRB employees and appeals to the central government to stop privatisation moves and resolve the long pending issues of the employees," said P Venkataramaiah, General Secretary, BEFI, Andhra Pradesh and Telangana, in a statement here.

"We appeal all the bank employees and general public to support the RRB employees as they are going on strike as the last resort after failing in all their attempts to resolve the issues amicably," BEFI said.

BEFI had also submitted a detailed memorandum to the finance minister to look into the "dangers" of the proposed amendments to the RBI Act, it added.

Source : Economic Times
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RRB employees call two-day strike on Thursday and Friday

Regional rural banks (RRB) employees and officers have called for a two-day all India strike on Thursday and Friday to protest against the government's plan to privatise these entities and outsourcing of banking services. They are also demanding pension-provident fund facilities in line with mainstream commercial banks.

All India Rural Bank Employees' Association said that rural banking services would come to a halt on these two days as employees of 56 RRBs will join the strike.

RRBs have about 2000 branches across the country. They are also demanding introduction of compassionate appointment scheme in line with sponsor banks retrospective effect and uniform and equal gratuity payment scheme.

Source : Economic Times
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Moody's affirms ICICI Bank's ratings on strong capital buffers

Moody's Investors Service today affirmed its ratings on ICICI Bank due to the healthy capital adequacy of the country's largest private sector lender despite some reverses on asset quality.

"Moody's expects asset quality for ICICI Bank's corporate loans will remain under pressure, even beyond the quarter ending March 2016...the bank has significant buffers to withstand a meaningful deterioration in asset quality," the international ratings agency said in a note.

The bank's long-term local and foreign currency bank deposit ratings have been affirmed at Baa3 with a positive outlook.

has "meaningful exposure" to large corporates, some of whom are showing weak debt servicing abilities, it said, identifying this as a "key source of risk" for the asset quality.

It said the bank's gross non-performing loans ratio increased to 4.21 per cent as of December 2015 from 3.29 per cent in March 2015, and acknowledged that the RBI's one time asset quality review may have resulted in the spike.

The bank had reported a 4.4 per cent decline in its consolidated net profit to Rs 3,122 crore in the third quarter of the fiscal on a three-fold increase in provisions. It had warned of NPA pains in the March quarter as well.

Moody's today said there has been a significant improvement in its core operating profitability over last few years, with its pre-provision income to average assets ratio increasing to 3.18 per cent for FY15 from 1.91 per cent in FY09.

This was possible on a structural improvement in its funding profile, as well as higher net interest margins and better cost-to-income ratios, it said.

Source : Economic Times
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Axis Bank’s forex prepaid card

Axis Bank on Wednesday announced the launch of a forex prepaid card, issued in conjunction with Diners Club International. The card will run on the Discover Global Network, the third-largest payments network in the world, providing cardholders global acceptance. The bank said cardholders will have access to more than 35 million merchant locations and more than one million ATM and cash access locations across 185 countries. Corporate and leisure cardholders travelling abroad, especially to the US, China, Japan and Korea, will benefit, the bank said.

Source : Thehindubusinessline
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Allahabad Bank organises roadshow on NPAs

State-run Allahabad Bank, on Tuesday, organised a country-wide road show to create awareness among the public about recovery in non-performing asset (NPA) accounts.

Bank’s staff along with top executives carrying placards gathered near the residence/offices of select large NPA borrowers during the road show to silently impress on the urgency of repayment and regularisation of loan accounts, Allahabad Bank said in a release.

Source : Thehindubusinessline
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Saturday, February 27, 2016

Bank of India’s accounting change saves over Rs 1,000 crore

At a time when most public sector banks (PSBs) have taken a huge hit on their books, mainly because of provisioning for bad loans, Bank of India (BoI) appears to have escaped with a lesser knock in the December quarter. A close look at the bank's financials shows that a small change in the accounting practice — which is within the rules — helped it save over Rs 1,100 crore in the third quarter.

The government-owned bank posted a loss of Rs 1,505 crore in the third quarter of this fiscal as its provisions to cover bad loans more than doubled to Rs 3,603 crore. However, the bank would have run up another Rs 1,170 crore losses had it followed the conservative practice of setting aside 60 per cent as provisions for doubtful loans — loans that are overdue for over one year to three years, also known as D2 category.

In the third quarter, the bank reverted to RBI's prescribed formula of 40 per cent provisioning, which reduced the provisioning by Rs 1,789 crore, and helped it trim losses by up to Rs 1,170.25 crore, BoI said in a filing with the BSE.

Speaking to ET, Melwyn Rego, MD of Bank of India, said that the bank thought it appropriate to follow the RBI's prescribed norms on provisioning since banks have to anyway make proactive provisioning as per the Asset Quality Review undertaken by the regulator.

"The bank is working on a three-pronged strategy — focus on reducing NPAs, increasing low-cost deposits, and rebalancing the loan in favour of retail loans," he said.

This is the second time BoI has changed its accounting procedure without violating RBI norms.

Source : Economic Times
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SBI gets shareholders nod to raise Rs 15,000 cr

Country’s largest lender SBI on Friday said it has got shareholders’ approval to raise up to Rs 15,000 crore by public issue or overseas issuance of shares.

The bank had convened a general meeting today to obtain shareholders’ approval to raise the said amount.

Earlier in January, SBI had informed about its plans to raise this sum of Rs 15,000 crore by March 2017.

“The General Meeting was convened to obtain the shareholders’ approval, to create, offer, issue and allot such number of equity shares of Re 1 each, not exceeding Rs 15,000 crore or such amount as may be approved by the Government and the RBI”, it said in a BSE filing.

State Bank of India said the issue will be subject to the condition that the Government shareholding in the bank’s equity share capital does not fall below 52 per cent at any point of time.

The money can be raised by either of the ways including public issue, rights issue or private placement, such as qualified institutional placement (QIP) or Global Depository Receipt or American Depository Receipt or any another mode or a combination, as may be decided by the Board, it said.

The fund to be raised will help the bank to meet global risk norms under Basel III, which the banks needs to be fully compliant with by March 2019.

Source : Thehindubusinessline
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Bharatiya Mahila Bank opens branch in Vizag

The Bharatiya Mahila Bank (BMB) is making all efforts for the economic empowerment of women, especially those from the economically disadvantaged sections of the society, and that is the specific mandate given to the bank, according to Executive Director S MSwathi.

She was speaking here on Thursday morning after inaugurating a BMB branch, the first in the city and the fourth in Andhra Pradesh. She said the bank was in expansion mode and it would aim to cross the hundred-mark soon in the country.

Swathi said the bank, established in 2013 with a capital base of Rs. 1,000 crore, was offering loans to women upto Rs. 1 crore at the base rate and the processing fees was also being waived up to Rs. 75 lakh for women.

"We are supporting all income-generating activities and encouraging women to become entrepreneurs. We are encouraging women to set up small and cottage units, and we are also tying up with NGOs and other organisations to extend loans to women and support their economic activities," she said.

She said, "We have given loans to women to run electronic-rickshaws in some cities. Women need not confine themselves to setting up beauty parlours, as so many other avenues are opening up in a growing economy. However, there is a need for promoting financial literacy among women and we are taking up those programmes as well."

She clarified that the bank was not only for women and men could also deposit their monies in the bank and avail themselves of the banking services. But when it comes to loaning, "women would be given preference. After all that is our basic objective. If a woman prospers, the whole family prospers. Men are also benefited indirectly."

She said the bank had made considerable progress in three years and it would strive to make its presence felt, especially in semi-urban and rural areas.

Source : Thehindubusinessline
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Saturday, February 6, 2016

Corporation Bank inks pact with Universal Sompo for accident death coverage

Corporation Bank has signed a memorandum of understanding (MoU) with Universal Sompo General Insurance Co Ltd for providing accident death coverage to its savings bank account holders under Corp Signature, Corp Super and Corp Saral category.

A press release by the bank said here on Saturday that the bank provides free personal accident death cover of Rs.10 lakh to its Corp Signature and Rs.5 lakh to its Corp Super account holders.

The MoU was signed in the presence of Jai Kumar Garg, Managing Director and Chief Executive Officer of Corporation Bank, and VV Vendhen, Head (Bancassurance), Universal Sompo General Insurance Co Ltd.

Source : Thehindubusinessline
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Dinabandhu Mohapatra takes charge as Canara Bank ED

Dinabandhu Mohapatra, the new Executive Director of Canara Bank, is a post-graduate with a degree in Law, CAIIB and Diploma in Computer Application.

Mohapatra, who took charge as ED of Canara Bank recently, started his banking career with Bank of India as Probationary Officer in 1984.

Source : Thehindubusinessline
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Vijaya Bank net up 43% in Q3

Vijaya Bank reported a 43 per cent increase in net profit at Rs.53 crore in the third quarter ended December 31, 2015, as against Rs.37 crore in the year-ago quarter.

The Bengaluru-headquartered public sector bank logged a 33 per cent year-on-year (y-o-y) increase in net interest income at Rs.738 crore from Rs.555 crore in the year-ago period. According to a bank statement, fee-based income increased by 31 per cent to Rs.122 crore (Rs.93 crore in the year-ago period).

Net interest margin improved to 2.44 per cent from 1.88 per cent, it added.

Gross non-performing assets and net non-performing assets in percentage terms deteriorated to 4.32 per cent (from 2.92 per cent) and 2.98 per cent (1.89 per cent), respectively, as per the financial results filed with the BSE. Shares of the bank closed at Rs.34.30 apiece, up 15.88 per cent over the previous close on the BSE.

Source : Thehindubusinessline
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Thursday, February 4, 2016

Govt to infuse about Rs. 5,000 cr in PSU banks this quarter

Government will infuse about Rs. 5,000 crore of capital in the public sector banks in the current fiscal to strengthen the balance sheet.

“As committed, banks will get fund infusion in the fourth quarter. Banks will get about Rs. 5,000 crore,” Financial Services Secretary Anjuly Chib Duggal said on the sidelines of an event here.

Funds would be infused after Parliament approves the third Supplementary Demand for Grants in the upcoming Budget session.

Last year, the government announced a revamp plan ‘Indradhanush’ to infuse Rs. 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs. 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel-III.

In line with the blueprint, PSU banks will get Rs. 25,000 crore this fiscal and also in the next fiscal. Besides, Rs. 10,000 crore each would be infused in 2017-18 and 2018-19.

Of the Rs. 25,000 crore earmarked for 2015-16, the government has pumped in about Rs. 20,088 crore in 13 public sector banks so far.

Talking about initiatives taken by the government to deepen the social security net, Duggal said banks are addressing last mile connectivity issues.

The Department of Financial Services is holding discussions with banks on a regular basis to sort out issues as soon as possible, she said.

Banks such as SBI and Andhra Bank are currently addressing the issue of Internet connectivity in the 800 identified areas.

Besides, steps are being taken to strengthen Internet connectivity in various parts so that Direct Benefit Transfer (DBT) is made seamless.

Source : Thehindubusinessline
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Bandhan Bank to scale up retail lending from next fiscal

Kolkata-based Bandhan Bank is on course to introducing new products and scaling up its presence in the retail lending segment. The offerings are expected to be introduced next fiscal onwards.

According to Chandra Shekhar Ghosh, Founder, MD and CEO of Bandhan Bank, “teams are being readied”, with offerings targeting micro, small and medium enterprises (MSMEs), housing reconstruction or “smaller value” home loans, vehicle financing and loans against property.

The teams, he said, will consist of members across verticals that include those with microfinance expertise, banking background and fresh recruits with hold over the local language.

“There are some common requirements across regions and states. Our retail loan portfolio will start catering to some of these common sectors,” he maintained.

Currently, some of the retail loan offerings are being tested across states on a smaller scale. For example, the (rural and suburb) vehicle financing loan scheme, started with lending (Rs.80,000 to Rs.1 lakh) to 1,000-odd people in the first phase and on a pilot-basis.

“It is more important for us to first create a credit repayment habit in a region. Hence, we start with selective lending and establish a repayment cycle first. Once this happens, we look at increasing our disbursements there,” Ghosh told BusinessLine on the sidelines of a summit organised by the Bengal Chamber of Commerce and Industry.

Small portfolio

According to him, the portfolio of offerings will ‘deliberately’ be kept small. This is to refrain customers from having a negative perception.

“Too many offerings can actually create confusion and deter a customer. In many cases a bank’s branch manager does not know about a very specific product if there are too many variants of it,” he pointed out.

Apart from small vehicle financing (done through its micro-financing wing), Bandhan has started giving housing loans in some areas.

MSME loans too are being disbursed. Loans below Rs.1 crore are initially being targeted. Once the bank has a foothold, it will look to give MSME loans of Rs.1 crore and above. “Corporate lending will come at a later stage,” he added.

Meanwhile, over the last five months (September to January), the lender mobilised deposits to the tune of Rs.7,000 crore. The country’s largest microfinance lender, Bandhan, began full-fledged banking operations in August last year.

The bank has over 612 branches and more than 750,000 customers across 27 states. Its loan book stands at Rs.12,500 crore, against a targeted Rs.13,000 crore (till March 2016).

Source : Thehindubusinessline
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New SBI home loan product offers interest moratorium

The newly-launched SBI FlexiPay Home Loan will help working professionals fulfil their aspirations of owning homes, Badal Chandra Das, Chief General Manager, SBI Kerala Circle, has said.

The new product was unveiled at 14 circle offices of SBI along with the formal launch at the hands of Chairperson Arundhati Bhattacharya in Mumbai on Monday.

Flexible option

It is targeted at the salaried employees aged between 21 and 45 years with a required loan amount of not less than Rs.20 lakh, Das told newspersons here.

It allows borrowers to get higher loan amount compared to their loan eligibility under normal home loan schemes. Interest rates, loan to value ratio (LTV) and pre-payment conditions remain the same.

The eligibility is arrived at by calculating equated monthly instalment (EMI) to net monthly income (NMI) ratio, which will not be allowed to exceed 65 per cent. Twenty per cent is sanctioned extra.

The additional loan amount will help the customer in acquiring better and spacious living spaces for himself and his family even as their future needs are also taken into account.

To lower the impact of such additional loan amount on the monthly repayments in the form of EMIs, customers need to pay only the interest during a moratorium period (pre-EMI) of three to five years and thereafter pay moderate EMIs.

The EMIs will be stepped up during the subsequent years in consonance with the expected rise in salaries, Das said.

Among those present at the press conference were K Venkatachalapathy, General Manager, and Joy C Aryakara, Deputy General Manager (Personal Banking Business), SBI, Kerala Circle.

Source : Thehindubusinessline
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