IDBI Bank cuts retail term deposit rates

IDBI Bank has reduced its retail term deposit rates (deposits up to an amount less than Rs 1 crore) in two short-term maturity buckets.

The bank’s retail deposit rates in two short-term buckets — 91 days to less than six months were cut by 50 basis points (bps) to 7.25 per cent and in six months to 269 days bucket by 15 bps to 8.5 per cent, the bank said in a statement.

A basis point is one hundredth of a percentage points. The revised interest rates would come into effect from May 13, 2013.

The reduction is considered in response to the signals emanating from RBI’s Monetary Policy for 2013-14, announced on May 3, 2013, the bank said.

Interest rates to senior citizens

Further, additional interest rates payable to senior citizens over the normal interest rates were rationalised to a uniform 50 bps across all retail term deposits having a maturity of six months up to 20 years, including for tax-saving deposits.

Accordingly, the offer rate on retail deposits less than six months will be identical for normal and senior citizens.

Source: thehindubusinessline

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LIC’s new premium mop-up declines 6.5% in FY13

Having witnessed a drop in new premium collections in 2012-13, state-owned Life Insurance Corporation of India aims to grow its business by 15 per cent this fiscal.

According to Sushobhan Sarker, Managing Director, LIC, the growth in new premium collections would be achieved by increasing insurance penetration in underserved areas.

In 2012-13, LIC registered a 6.5 per cent drop in new premium collection at Rs 76,245 crore compared with Rs 81,514 crore in the corresponding period last year.

Over all, new premium collection by 23 life insurance companies in the country fell by 6.3 per cent to Rs 1,07,010 crore during the year, compared with Rs 1,14,232 crore in the year ago period.

Sarker attributed the fall to the slowdown in economic growth and regulatory changes.

“The drop in new business was primarily on account of a lower growth in the economy and a series of regulatory changes in the industry. However, this year we expect 15 per cent growth in new premium collections,” Sarker told newspersons on the sidelines of an insurance seminar organised by the Bengal Chamber of Commerce and Industry here on Friday.

Ponzi schemes – Impact

According to Sudhin Roy Chowdhury, Member (Life), IRDA, the high penetration of Ponzi schemes has had an impact on the first premium income of many insurance companies.

“In the last one-two years we have been getting some feedbacks from agents who were not able to mobilise investments due to the operation of Ponzi schemes in certain areas,” Chowdhury said.

Responding to a query on some insurance agents selling such schemes, he said, “We have not come across any such instances or complaints pertaining to agents selling such products.

However, I feel there needs to be a separate law for life and general insurance agents, preventing them from selling such schemes.”

shobha.roy@thehindu.co.in

Source: thehindubusinessline

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SBI signs pact with Korea bank to support SMEs

State Bank of India has signed a memorandum of understanding with Industrial Bank of Korea to support the business activities of Korean small and medium enterprises entering or already operating in India.

The MoU would assist the Korean companies in meeting their financial requirements from SBI.

Currently, there are 480 Korean SMEs operating in India. Industrial Bank of Korea currently does not have any branch presence in India.

SBI is also setting up a representative office in Seoul. The MoU will help SBI get more Korean business not only for domestic branches, but also in that country.

The MoU was signed last week by Hemant Contractor, Managing Director & Group Executive on behalf of State Bank of India and Jun-Hee Cho, Chairman and Chief Executive Officer of Industrial Bank of Korea.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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IRDA norms on microinsurance in 2-3 months

The Insurance Regulatory and Development Authority (IRDA) hopes to bring out the final guidelines for microinsurance sector in two to three months.

According to Sudhin Roy Chowdhury, Member (Life), IRDA, the guidelines will focus on the issues of product design and distribution.

“We are looking at microinsurance from a different point of view. We want companies to design products wherein customers can get slightly higher returns than the premium deposited at maturity,” Chowdhury said at an insurance seminar organised by the Bengal Chamber of Commerce and Industry here on Friday.

The guidelines would also focus on the distribution channels that can be adopted by insurers to help penetration of the product in remote areas, he added.

Source: thehindubusinessline

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Central Bank posts Rs 169-crore profit in Q4 on stable loan growth

Central Bank of India swung back into the black with a net profit of Rs 169 crore in the January-March quarter on the back of lower bad loans and stable loan growth.

The public sector lender had posted a loss of Rs 105 crore in the same quarter last fiscal. Net profit for the immediately preceding December quarter stood at Rs 180 crore.

Net interest income (difference between interest earned and expended) increased 25 per cent to Rs 153 crore.

During the quarter, contributing to the profits were lower provisions of Rs 445 crore that declined by about half from Rs 859 crore in the year-ago quarter.

Net profit in FY13 almost doubled to Rs 1,015 crore compared with Rs 533 crore in FY12.

As on March 31, 2013, the bank’s total advances rose by 16 per cent driven by robust growth in retail and agriculture loans, while corporate loan growth remaining flat during the year.

Total deposits grew 15 per cent. “We expect the deposits and advances growth to be bottom-driven at around 18 per cent in FY14,” said M.V. Tanksale, Chairman and Managing Director.

Net interest margins (NIM) annually declined to 2.67 per cent from 2.75 per cent in FY12 due to higher cost of deposits.

“NIM will be better going forwards as costs of deposits are likely to come down. NIM is expected to be in the 2.75 to 3 per cent range,” Tanksale said.

Gross non-performing loans (NPA) ratio declined marginally to Rs 4.80 per cent, while net NPA ratio declined to 2.90 per cent.

The board recommended a dividend of Rs 2.50 per share in FY13.

Shares of Central Bank closed higher by 4.25 per cent at Rs 72.30 per share on BSE on Friday.


beena.parmar@thehindu.co.in

Source: thehindubusinessline

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