Government to infuse capital in IDBI, Bank of Maharashtra and Dena bank

State-owned IDBI Bank, Bank of Maharashtra and Dena Bank will receive a capital infusion from the government in lieu of preferential allotment of shares. IDBI Bank will get Rs 2,500 crore funding from the government, subject to regulatory approvals. Board of directors of the bank at a meeting held today approved proposal to allot preference shares to the government.

“Board of directors of the bank has approved the proposal for preferential issue of capital to government and other financial institutions, if any aggregating up to Rs 2,500 crore,” IDBI Bank said in an exchange filing. IDBI Bank extraordinary general meeting is scheduled for April 27 for obtaining shareholders’ approval to allot preferential shares to the government.

Pune-based Bank of Maharashtra said board of directors will meet on Friday to consider the proposal of raising equity capital by preferential allotment of shares to the government. The bank said it has received communication from the government on March 16 for capital allocation plan of Rs 300 crore.

Dena Bank said in a separate filing to exchange, “We would like to inform you that the Board of Directors of the Bank approved raising of share capital of the Bank up to amount of Rs 800 crore.” The government has approved the second tranche of capital infusion in public sector banks to enhance their capital base.

The first tranche was announced in July with the objective of enhancing their lending operations and enabling them to raise more money from the market. It has already announced a fund infusion of Rs 22,915 crore, out of the Rs 25,000 crore earmarked for 13 PSBs for the current fiscal.

The second round of funding entailing about Rs 8,000 crore is based on strict parameters.



Source : Financial Express

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Bank of Maharashtra to raise Rs. 394 cr via pref shares to Govt

Bank of Maharashtra today said it has received shareholders’ approval to raise Rs. 394 crore by issuing 10.51 crore equity shares on preferential basis to the government.

“We have obtained the approval of shareholders for raising equity capital of the bank through preferential issue of 10,51,50,787 equity shares of the face value of Rs. 10 each at an issue price of Rs. 37.47 per share, including premium of Rs. 27.47 per share to the government aggregating to Rs. 394 crore,” the bank said in a statement.

The approval was given at the extraordinary general meeting of the shareholders of the bank today.

Post this issuance, the government’s holding in the bank would increase to 81.61 per cent from the existing 79.80 per cent.

Last week, eight public sector banks, including SBI, Punjab National Bank and Bank of Baroda, had allotted equity shares on preferential basis to the government against capital infusion of Rs. 13,955 crore.


Source : Thehindubusinessline

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Bank of Maharashtra, Siddhi Vinayak Logistics under CBI lens

The Central Bureau of Investigation has started search operation against Bank of Maharashtra and a private firm Siddhi Vinayak Logistics in an alleged fraud matter involving an amount of around Rs. 800 crore.

Late on Thursday evening, a senior CBI official informed that the agency is conducting searches on two entities. "Searches are being conducted at 7 offices and 3 residences. 4 of the places are in Surat, 3 in Pune, 2 in Mumbai and one place is in Silvassa. The amount involved is Rs. 800 crore. This amount was defrauded in the 'Chalak se Malak' scheme where the company got sanctioned loans for its drivers without their knowledge and siphoned the money" he said.

Further, searches are against the company Siddhi Vinayak Logistics Ltd, its directors, its associate companies and other companies who aided in the diversion of funds, and unknown public servants. The agency has initiated proceedings under section 420, 468 and 471 of IPC and 13(2) r/w 13(1)(d) of Prevention of Corruption Act, the official mentioned.

This is the second incidence after Syndicate Bank in which public sector bank is allegedly involved.


Source : Thehindubusinessline

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Bank of Maharashtra Q1 net drops 50% to Rs 59 cr on higher provisioning

Bank of Maharashtra has reported a 49.55 per cent fall in net profit at Rs 59.44 crore for the quarter ended June 30, hurt by a sharp increase in bad loans and higher provisions.

The bank had reported a net profit of Rs 117.82 crore in the corresponding quarter of the previous fiscal.

The bank’s total income in the quarter under review stood at Rs 3,526.13 crore, up 7.30 per cent against Rs 3,286.12 crore in the same period a year ago.

Provisions and contingencies in the quarter more than doubled to Rs 483.91 crore as against Rs 236.25 crore in the same quarter in previous year.

Net non-performing assets (NPA) of the bank during the first quarter increased sharply to 5.04 per cent as against 2.94 per cent during the corresponding period a year ago.

Shares of Bank of Maharashtra were trading at Rs 35.10 apiece in the afternoon session, down 3.57 per cent from their previous close on the BSE.


Source : Thehindubusinessline

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Bank of Maharashtra cuts base rate by 25 bps to 10 per cent

State-run Bank of Maharashtra today trimmed its base rate by 25 basis points to 10 per cent, effective Monday, following its larger peers, which will bring down the cost of home, car and retail loans.

The move comes ahead of the second bi-monthly monetary policy announcement on Tuesday, wherein the Reserve Bank is widely expected to slash policy rates following sharp drop in inflation and factory output numbers in recent months.

The Pune-based lender had cut its base rate or the minimum lending rate last December by 15 basis points to 10.25 per cent.

Commenting on the move, its executive director R K Gupta said, "It is hoped to boost housing, car and SME loans and other retails loans credit off-take in the current year."

Soon after the April 7 policy, wherein RBI Governor Raghuram Rajan had blasted banks for not cutting rates despite the RBI doing so twice in the year, major banks led by SBI, ICICI, HDFC, among others had reduced their lending rates by 10-15 basis points.

In its first monetary policy review for 2015-16 on April 7, Rajan had kept the repo rate -- the rate at which it lends to the banks -- unchanged at 7.50 per cent.

However, outside its monetary policy review, RBI effected a cut in repo rate by an equal margin of 0.25 per cent each in January and March this year.

Source : Economic Times

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KYC norms breach: RBI imposes fine on three banks

Bank of Maharashtra, Dena Bank and Oriental Bank of Commerce have been imposed with a monetary penalty of Rs. 15 crore each by the Reserve Bank of India (RBI) for violation of Know Your Customer (KYC)/ Anti Money Laundering (AML) norms.

“Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and its impact,” RBI said in a release.

The RBI also cautioned eight other banks -- Central Bank of India, Bank of India, Punjab and Sind Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, UCO Bank, Union Bank of India and Vijaya Bank – “to put in place appropriate measures and review them from time to time to ensure strict compliance of KYC requirements in future.

“The penalties have been imposed in exercise of powers vested in the Reserve Bank…taking into account the violations of the instructions/directions/guidelines issued by the Reserve Bank from time to time. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank and its customers,” the central bank said.

RBI said it received a complaint from a private organisation, on the basis of which a scrutiny of fixed accounts opened in its name in Mumbai based branches of certain public sector banks was undertaken in July 2014.

“With more complaints and involvement of other banks coming to light, a wider thematic review was conducted. In all, 12 branches of 11 Public Sector Banks were covered.

“The scrutiny/thematic review looked into the modus operandi of the alleged frauds involving accounts of certain organisations in these banks, deficiencies/irregularities while opening Fixed Deposits (FD) and extending Overdraft (OD) facility there against them. Besides, the effectiveness of systems and processes in place pertaining to implementation of KYC norms/AML standards in respect of these accounts was also looked into,” the RBI added.

The findings revealed violation of some regulatory guidelines as also other disquieting actions on the part of the banks such as non-adherence to certain KYC norms, monitoring of transactions in customer accounts, RBI’s instructions regarding funds received through Real Time Gross Settlement System (RTGS), opening of FD accounts and granting overdrafts without due diligence or process, weaknesses in the internal control systems, management oversight, use of internal accounts for parking customer funds and involvement of middlemen/intermediaries in opening of accounts as also subsequent operations in those accounts.


Source : Thehindubusinessline

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Bank of Maharashtra to sell bad loans worth Rs400-500 cr to ARCs

By the end of March Bank of Maharashtra will offload non-performing loans worth Rs.400-500 crore to asset reconstruction companies (ARCs), a top bank official has said.

“We are exploring this possibility (sale to ARCs) now that the norms have been modified to ensure a balanced environment for ARCs and banks”, RK Gupta, Executive Director, told BusinessLine.

The regulatory framework for securitisation companies had been recently modified to stipulate that ARCs will have to mandatorily invest and hold 15 per cent of the security receipt (SR) in place of a limit of 5 per cent earlier. This will have an immediate beneficial impact on cash-flows for banks, which will receive 15 per cent of the value of the sale.

So far this fiscal, Bank of Maharashtra has not offloaded any of its non-performing loans (NPLs) to ARCs.

Seeking improvement

Gupta said the bank is looking to improve the NPA situation and its planned sale of bad loans is part of the bank’s NPA management strategy.

As of end December 2014, the bank’s gross NPAs as a percentage of advances stood at 6.65 per cent. The net NPA level stood at 4.7 per cent.

Gupta said the bank is not looking to raise any capital in March, which is the only remaining month this fiscal. “We have a comfortable capital adequacy ratio at 11.7 per cent”, he added.

The bank had recently raised additional tier-1 capital of Rs.1,000 crore through seven-year perpetual bonds with a coupon of 9.48 per cent a year.


Source : Thehindubusinessline

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Bank of Maharashtra launches mobile banking app

Bank of Maharashtra has launched its new mobile banking application – MahaMobile in a bid to make banking simpler for customers.

“Designed to be intuitive and user friendly, MahaMobile App will enable the Bank’s customers to view all their deposit and loan accounts, do fund transfers, bill payments and raise a variety of service requests on their mobile anytime, anywhere,” the bank said in a statement.

Any Bank of Maharashtra customer with a debit card and registered mobile number can register for this facility without visiting the branch.

The launch is part of a series of customer initiatives by the public sector bank as part of Project Utkarsha –its Bank transformation program. Last month, it introduced 24x7 convenience lounges at select branches in Pune.

S. Muhnot, Chairman and Managing Director, Bank of Maharashtra, said, “Bank of Maharashtra has always believed in making banking simple for everyone and with smart phones and mobile internet becoming increasingly affordable in India, we offer yet another convenient channel for our customers to bank with us.”


Source : Thehindubusinessline

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Bank of Maharashtra cuts minimum lending rate to 10.25%

State—run Bank of Maharashtra today announced a cut of 0.15 percentage point in its minimum lending rate or base rate to 10.25 per cent, a move which will make its housing and auto loans cheaper.

“The bank has decided to revise the bank’s base rate from 10.40 per cent per annum to 10.25 per cent per annum with effect from December 15, 2014,” Bank of Maharashtra (BoM) said in a filing to the BSE.

BoM is the first bank that has lowered lending rates after RBI Governor Raghuram Rajan made a case for lowering lending rates by banks earlier this month.

“Some easing of monetary conditions has already taken place... However, these interest rate impulses have yet to be transmitted by banks into lower lending rates,” Rajan had said during the monetary policy review.

Helped by softening prices of food items, retail or consumer price index (CPI) based inflation declined to 5.52 per cent in October.

The wholesale price index (WPI) based inflation fell to 1.77 per cent during the month.

Shares of Bank of Maharashtra were trading at Rs. 43.20 per piece on the BSE, up 1.29 per cent from previous close.


Source : Thehindubusinessline

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Bank of Maharashtra net surges

Robust cash recoveries and upgradation of assets helped Bank of Maharashtra log a 247 per cent jump in net profit in the second quarter ended September 30, 2014.

The bank recorded a net profit of Rs 163 crore , compared with Rs 47 crore in the year-ago period.

The bank made cash recoveries of Rs 217.51 crore (Rs 89.15 crore in the year-ago period). It saw upgradation in assets of Rs 425.92 crore (Rs 118.61 crore). Net interest income (the difference between interest earned and expended) was up 13 per cent at Rs 992 crore (Rs 876 crore).

Non-interest income, which includes profit from the sale of investments and recovery in written-off accounts, rose 21 per cent to Rs 222 crore (Rs 183 crore).

Sushil Muhnot, Chairman and Managing Director, said the bank is in a consolidation mode, whereby it has de-grown the corporate loan book and stepped up loans to the retail, agriculture and MSE segments.

The bank is focusing on high-yielding loans and is also shedding high-cost deposits, he added.

Though the bank managed to make handsome recoveries, the net rise in NPAs, post-reduction in bad loans, was Rs 589 crore.

Muhnot said his bank will mop up about Rs 500 crore by issuing Basel III-compliant additional Tier I bonds in the next couple of months.


Source : The Hindu

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Bank of Maharashtra to raise Rs 500-1,000 cr this fiscal

Public sector lender Bank of Maharashtra plans to mop up Rs 500-1,000 crore by issuing Tier-I bonds this year, according to Chairman and Managing Director S Muhnot.

“We will look at raising Basel III-compliant additional Tier-1 capital, instead of taking up further equity right now.

“We may raise Rs 500-1,000 crore during this financial year,” Muhnot told newspersons here on the sidelines of a banking conclave organised by FICCI and the Indian Banks’ Association.

Currently, the bank’s capital adequacy ratio stands at around 11.

Muhnot said the bank sees its credit growth moderating to 12-15 per cent in FY15.



Source : The Hindu

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Bank of Maharashtra plans to raise Rs 1,000 cr this year

State-run Bank of Maharashtra today said that it plans to raise around Rs 500-1,000 crore by issuing Basel III-compliant Tier-I bonds this year.

“We will look at raising Basel III-compliant additional Tier-1 capital instead of taking up further equity right now. We may raise around Rs 500 crore to Rs 1,000 crore during this financial year,” bank Chairman and Managing Director S Muhnot told reporters here on the sidelines of an event organised jointly by FICCI and the Indian Banks’ Association (IBA).

Currently, the city-based bank’s capital adequacy ratio is around 11.

The bank sees its credit growth to moderate to around 12 per cent to 15 per cent this fiscal.

“We are looking at around 12 per cent to 15 per cent growth this financial year as compared to 18 per cent to 20 per cent last year,” Muhnot said.

He said there are some signs of improvement in the manufacturing sector, adding that it would take one or two quarters for it to translate into growth in the banking system.


Source : The Hindu

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BoM launches savings bank deposit scheme

Bank of Maharashtra has launched a savings bank deposit scheme — Mahabank Royal Savings Account — exclusively for high net worth Individuals having a minimum monthly average balance (MAB) of Rs 1 lakh in their account.

The slew of benefits offered to the accountholder under the product includes assistance of a relationship manager, free accident death insurance cover (Rs 50 lakh personal air accident death insurance and Rs 10 lakh personal accidental death insurance), higher transaction limit on ATM-cum-debit card on merchant point of sale terminals, and free national electronic funds transfer/real time gross system transactions through Internet banking, the bank said in a statement.

Other benefits to the account holders include 50 per cent concession in the processing fees of all retail loans, 100 free personalised cheque leaves per annum, 50 per cent concession on annual maintenance charge of BoM-SBI co-branded Gold Credit Card, and free demat account facility for the first year.

S. Bharatkumar, General Manager, Bank of Maharashtra, said the scheme has been launched to attract new affluent customers besides deepening relationship with the existing savings bank customers.

Source: Thehindubusinessline

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Bank of Maharashtra to focus on small-scale, retail segments

Bank of Maharashtra has opted for qualitative realignment of assets and plans to focus more on advances to the micro, medium and small enterprises and retail segment instead of large corporates.

Currently, the bank has an exposure of 11 per cent to the retail sector and 16 per cent to the MSME sector.

“We have set a target of 15 per cent to the retail sector and 20 per cent to MSME sector by next fiscal (2014-15),” Chairman and Managing Director Sushil Muhnot, told Business Line.

For speedy recovery of MSME and retail stressed assets, the bank has initiated a one-time settlement scheme for loan sizes up to Rs 5 lakh. Exposure in this category is around Rs 800 crore.

“The scheme has been successful so far. Our main aim is to recover these non-performing assets by offering incentives to borrowers. Depending on the response to this exercise, the bank is planning to cover loan portfolio up to Rs 10 lakh in the next phase,” he said.

Branch network

The bank is planning to increase its network of branches to generate additional business.

“Branches should generate business instead of just handling transactions. We are planning go for a hub and spoke model to expand our operations,” he explained.

The bank has 1,863 branches and is planning to to open 65 more before March 31. “The bank’s capital requirement will increase in the coming months. We will examine various options to infuse additional capital in the next fiscal. The bank’s capital adequacy ratio is about 11 per cent,” Muhnot said, referring to compliance with Basel-III norms.

anil.u@thehindu.co.in

Source: Thehindubusinessline

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Sushil Muhnot is new CMD of BoM

Bank of Maharashtra has a new Chairman and Managing Director in Sushil Muhnot.

Prior to this appointment, Muhnot was Chairman of Small Industries Development Bank of India since April 2012.

Muhnot will assume charge as CMD of Bank of Maharashtra in Mumbai on Saturday. He will be taking charge at a challenging time for the bank, which recently saw huge increase in non-performing assets and sharp reduction in bottom-line.

Source: thehindubusinessline

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Bank of Maharashtra Q2 profit declines 72%

Pune-based Bank of Maharashtra posted a net profit of Rs 46.85 crore during the second quarter of the current fiscal against Rs 166 crore in the same quarter of last fiscal, a decline of 72 per cent year on year.

Total income stood at Rs 3,196 crore (Rs 2,434 crore), a growth of 31 per cent year on year.

Wholesale and corporate banking operations accounted for the maximum growth in the income as well as for a loss of Rs 46 crore (gross) impacting the bottom line adversely. In the same quarter of FY 13, this segment had shown profit of Rs 39 crore.

The bank’s gross NPAs rose to Rs 2,450.48 crore from Rs 1,292.45 crore. Net NPA stood at Rs 1,535.33 crore.

Source: thehindubusinessline

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BoM Q1 net jumps 89.6%

Pune-based Bank of Maharashtra has posted a 89.6 per cent rise in net profit in the first quarter of this fiscal at Rs 266.33 crore against Rs 140.46 crore in Q1 of FY13.

Total income in the quarter grew 34.14 per cent to Rs 2,974 crore (Rs 2,217 crore).

Announcing the results, Narendra Singh, Chairman and Managing Director of the bank, said the bank had asked the Centre for a capital infusion of Rs 2,200 crore this year. “We expect to get this next month,” he said, adding that permission sought for Qualified Institutional Placements (QIPs) is pending with the Government. BoM plans to raise Rs 200 crore through this.

The capital will help raise its core capital adequacy ratio (CAR), which currently stands at around 7.57 per cent. Its overall CAR under Basel II norms as of end-June was 11.83 per cent. At the end of Q1 of this fiscal, the bank’s gross NPA ratio fell 44 basis points (bps) to 1.8 per cent, while the net NPA was 17 bps lower at 0.8 per cent.

Singh refuted reports that the Government had asked the bank for any explanation regarding the steep rise in its credit growth.

The new initiatives planned include launching of Maha Aasra, a reverse mortgage product aimed at senior citizens, opening 225 new branches the fiscal, and extending doorstep banking.


Source: thehindubusinessline

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Bank of Maharashtra net jumps 43% in Q3 to Rs 194 cr

Bank of Maharashtra today reported 43 per cent jump in net profit at Rs 194.06 crore for the third quarter ended December 31.

Net profit of the public sector lender in the same quarter of the previous fiscal, 2011-12, was Rs 135.54 crore.

Total income of the bank during the October-December quarter of 2012-13 increased to Rs 2,710.16 crore from Rs 2,020.78 crore, it said in a filing to the BSE.

The non-performing assets of the bank increased to 0.66 per cent during the quarter, from 0.54 per cent over the same quarter a year earlier.

Income from wholesale banking increased to Rs 1,846.96 crore from Rs 941.92 crore, however, while income from retail banking fell to Rs 196.75 crore from Rs 605.79 crore.

The bank had reserves and surplus of Rs 4,030.75 crore as on December 31, 2012 as against Rs 3,249.90 crore as on December 31, 2011.

Its deposits as of December 31, 2012 stood at Rs 99,276.49 crore, from Rs 69,925.68 crore over the same period of the previous fiscal.

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Bank of Maharashtra to increase equity capital

Bank of Maharashtra has informed the BSE that a meeting of the board of directors of the bank will be held on December 22, 2012, to consider the proposal of raising equity capital by way of preferential allotment to Government of India and/or to qualified institutional buyers or rights issue. The government's shareholding as of September 2012 was nearly 79 per cent of the share capital.

The bank had a capital adequacy ratio of 10.75 at the end of September 2012. It had come down sharply from a level of 12.46 three months earlier as business volumes rose sharply in the second quarter. Risk weight assets rose from Rs 51,497 crore to Rs 59,059 crore in the second quarter of the fiscal.

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Nagpur: Bank clerk accused of Rs 96 lakh fraud

The city police has registered a case against a clerk with Bank of Maharashtra for a fraud to the tune of Rs 96,43,599.

Dewanand Nichwani, who works with BOM’s Jaripatka branch, is accused of diverting cheques. Police said between November 2007 and May 2008, he deposited 48 cheques handed in by the bank customers in 13 accounts, most of them belonging to his relatives or friends, instead of depositing them in the customers’ accounts.

No arrest has been made yet.

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