Some imporant facts about banks

बैंकों के बारे में कुछ महत्वपूर्ण जानकारी-

1. इन्टरनेट बैंकिंग सेवा शुरू करने वाला प्रथम बैंक – ICICI

2 ATM सेवा शुरू करने वाला प्रथम बैंक – HSBC

3. क्रेडिट कार्ड जारी करने वाला प्रथम बैंक – सेंट्रल बैंक ऑफ इन्डिया

4. भारत में खुलने वाला पहला विदेशी बैंक – Comptoire d’Escompte de Paris of France (सन् 1860 में खुला)

5. वर्तमान में कार्यरत भारत का सबसे पुराना बैंक – इलाहाबाद बैंक (Allahabad Bank)

6. बचत खाता (Savings Bank a/c) खोलने वाला भारत का प्रथम बैंक – प्रेसीडेंसी बैंक (Presidency Bank) द्वारा पहली बार सन् 1830 में बचत खाता खोला गया

7. चेक सिस्टम जारी करने वाला भारत का पहला बैंक – बंगाल बैंक (Bengal Bank) द्वारा पहली बार सन् 1784 में चेक सिस्टम जारी किया गया

8. विदेश में शाखा खोलने वाला भारत का प्रथम बैंक – बैंक ऑफ इन्डिया ने सन् 1946 में भारत के बाहर लंदन में पहली बार अपनी शाखा खोली

9. म्युचुअल फंड आरम्भ करने वाला प्रथम बैंक – भारतीय स्टेट बैंक (State Bank of India)

10. भारत में खुलने वाला पहला बैंक – बैंक ऑफ हिन्दुस्तान (सन् 1770 में खुला)

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Citigroup to slash 11,000 jobs worldwide

In a major restructuring exercise, global banking giant Citigroup today announced that it will cut 11,000 jobs worldwide to save nearly $1.1 billion in expenses annually from 2014.

The repositioning exercise comes two months after bank’s former CEO Vikram Pandit left the company unceremoniously

The restructuring would result in a “reduction of more than 11,000 positions,” a statement by Citi said, adding that “these actions are logical next steps in Citi’s transformation.”

“While we are committed to—— and our strategy continues to leverage — our unparallelled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they centre on technology, real estate or simplifying our operations,” Citi’s Chief Executive Officer Michael Corbat said.

Citi said the repositioning would generate $900 million of expense savings in 2013.

The annual savings will exceed $1.1 billion annually beginning in 2014, it added.

Citi also expects the repositioning actions to have a negative impact on annual revenues of less than $300 million.

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India Ratings affirms ING Vysya at ‘IND AA-’

India Ratings has affirmed ING Vysya Bank’s Long-Term Issuer rating at ‘IND AA-’ with a stable outlook on adequate capital position, improving asset quality and moderate funding profile.

“ING Vysya’s capitalisation is currently adequate. However, the bank will need to raise capital regularly to support its above-system-average growth targets. The bank raised Rs 970 crore of equity capital in FY’12 through a qualified institutional placement, in which its parent, ING Vysya NV, participated to the extent of its 44 per cent shareholding,” the ratings agency said in a statement.

The rating also factors in the bank’s relatively weak (although improving) profitability and relatively high proportion of loans to the traditionally volatile SME sector, the agency said.

Asset quality

Asset quality has improved over the two years ending first half of fiscal 2013. Gross non-performing assets (NPA) ratio declined to 1.9 per cent at end-H1FY’13, aided by lower NPA additions (FY’12: 0.7 per cent of average loans; FY’11: 1.1 per cent) and fewer slippages from the low stock of restructured loans (H1FY’13: restructured were 1.4 per cent of total loans).

According to the agency, given the moderating economic environment and the bank’s focus on growing its SME portfolio, asset quality could come under pressure in the near-to-medium term.

The bank’s high provision coverage ratio (FY’12: 91%) would help cushion any immediate spikes in delinquencies especially from its SME portfolio.

A positive rating action could result from a significant and sustained improvement in the bank’s profitability and franchise, while maintaining stable asset quality and adequate capital ratios.

A negative rating action could result from any weakening linkage with the parent, including lack of timely infusion of capital or access to risk management systems, together with a significant deterioration in ING Vysya’s capitalisation.

Beena.parmar@thehindu.co.in

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ICICI Bank rating unchanged following tap bond offer: Moody’s

Moody’s Investors Service said ICICI Bank’s credit rating for an existing unsecured note remains unchanged at Baa2 following the announcement of a tap bond offering.

ICICI Bank has announced a $250 million tap bond offering, which has the same terms as the existing $750 million 4.7% 2018 senior unsecured notes. The unsecured notes were issued through the Dubai branch as part of $5 billion medium-term note programme.

The outlook on the ratings remains stable, Moody’s Investors Services said.

Tap bonds defined

Tap issue is a procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. Usually, the bonds are issued at their original face value, maturity and coupon rate. Such bonds are, however, sold at the current market price. Issue on tap is suited for smaller fund-raising attempts.

Moody’s has a standalone bank financial strength rating of D+ for ICICI Bank, mapping to a baseline credit assessment BCA of baa3 on the long-term scale.

“We believe that the probability of systemic support for ICICI Bank is very high, given its sizeable retail deposit franchise and its importance to the national payments system as India’s second largest commercial bank.

Therefore, the long-term local currency deposit and foreign currency senior unsecured debt ratings receive a one-notch rating uplift from its BCA”, the international rating agency said.

The foreign currency senior unsecured debt rating at Baa2 is at the same level as the foreign currency debt ceiling for India.

The bank’s foreign currency deposit ratings of Baa3/P-3 are constrained by the sovereign ceiling.

srivats.kr@thehindu.co.in

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Oriental Bank raises Rs 1,025 cr tier-II capital

Oriental Bank of Commerce (OBC) has raised Rs 1,025 crore of capital through lower tier-II bonds to fund its business growth.

These bonds carry a coupon of 8.93 per cent a year and have tenure of 10 years.

Confirming the completion of the capital raising through the bond offering, V. Kannan, Executive Director, OBC, said this would help the bank conform to the Basel-III requirements. These bonds were rated AA+ by both CARE and ICRA.

The bank is looking at a capital adequacy ratio of over 12 per cent at end-March 2013. The Basel-III capital adequacy rules will kick-in on January 1 next year in India.

As of September 30 this year, OBC had a tier-I capital of 9.69 per cent. The overall capital adequacy ratio stood at 12.06 per cent (without including the profits of the first half).

Kannan did not rule out further tier-II bond issuance this fiscal. “In case there is a requirement, we will come out with another issue in December.”

The bank was looking to mop up Rs 1,000 crore through the recent bond offering. There was also a green-shoe option beyond the Rs 1,000 crore.

Including the green shoe option the bank has got Rs 1,025 crore through this issue. Kannan said.

As of end September 2012, OBC had headroom of Rs 5,157 crore of lower tier-II capital. Of this, the bank has now raised Rs 1,025 crore.

The OBC board had given authorisation for Rs 1,200 crore, implying that the bank could raise another Rs 175 crore without board approval.

srivats.kr@thehindu.co.in

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Allow banks to buy back gold coins: SBI chief

Banks should be allowed to buy back the gold coins they sell to their individual customers, according to State Bank of India Chairman Pratip Chaudhuri.

Pointing out that there is good demand for gold coins, the SBI chief said permitting banks to buy back will create liquidity in the precious metal, thereby easing pressure on the import front.

The current RBI guidelines do not permit buy back of gold coins/bars by banks. In a study on India’s gold rush, industry body Assocham said the country imports most of its gold requirement, accounting for nearly a third of the global demand. Gold as a commodity on its own does not add much to the productive capacity of the economy.

Moreover, gold imports reduce the availability of foreign exchange reserves to finance the import of other commodities. Such high value of gold imports has now started hurting India’s current account position, said Assocham.

ramkumar.k@thehindu.co.in

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SBI donates bus to Lakshya Sadhana

As part of its community service banking, State Bank of India has donated a Tata winger mini-bus to Lakshya Sadhana society for the mentally challenged here. The Chief General Manager of the bank, Rakesh Sharma, while donating it, said the Hyderabad circle of the bank is lending a helping hand to the needy. Recently, a minibus and hearing aids were donated to ‘Ashray-Akruti,’ an institution taking care of the hearing impaired. In the last financial year, SBI spent Rs 4 crore under corporate social responsibility activities. The circle has 1,300 branches and this year, an amount of Rs 6 crore has been earmarked for this activity. Each branch also donated 10 fans and a water purifier to schools. The SBI is in the process of donating nearly 25 medical vans to hospitals/health centres situated in the backward districts of Andhra Pradesh under the ‘Adoption of girl child’ scheme.

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LIC allowed to buy up to 30% equity in a company

Hard pressed to meet the Rs 30,000 crore disinvestment target, the Finance Ministry on Wednesday permitted the state-owned Life Insurance Corporation to invest up to 30 per cent in a company as against the earlier ceiling of 10 per cent.

“LIC can invest up to 30 per cent of a company’s paid-up capital. Earlier it could invest up to 10 per cent,” Financial Services Secretary D K Mittal told reporters here.

The notification relaxing investment norms for LIC has been issued, he added. The new norms will enable the cash-rich LIC, which invests around Rs 50,000-60,000 crore in equity annually, to pick up higher equity in state-owned companies during the disinvestment process.

Insurance regulator IRDA, however, was against LIC picking up more than 10 per cent equity in a company. It wanted LIC to stick to the norms applicable for private insurers.

The government’s decision is apparently aimed at pushing through the disinvestment process which had so far remained a non-starter.

The government in the budget for 2012-13 had proposed to raise Rs 30,000 crore from stake sale in PSUs.

Finance Minister P Chidambaram in a recent interview to PTI had expressed the confidence that government would endeavour to be as near the target as possible.

The government proposes to sell equity in several state-owned companies like Nalco, Hindustan Copper, SAIL, BHEL, MMTC and Oil India Limited (OIL). It is also planning to sell residual equity in companies privatised earlier.

In view of the subdued tax collection and subdued revenue realisation, the Finance Ministry had raised the fiscal deficit target for the current fiscal to 5.3 per cent of the Gross Domestic Product (GDP) from 5.1 per cent estimated earlier.

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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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IDBI Bank opens 1,000th branch at Kannangudi

Union Minister of Finance P. Chidambaram inaugurated the 1,000th branch of IDBI Bank in Kannangudi, in Sivaganga district on Sunday. On the occasion, the bank announced the launch of an attractively priced education loan scheme, encompassing both non-vocational and vocational courses designed largely in line with the model education scheme circulated by Indian Bank Association.

Speaking at the inaugural, Chidambaram said that he was happy that the bank has transformed itself into a full-service commercial bank and is actively focusing on expanding customised financial solutions. R. M. Malla, CMD, IDBI Bank, in his address, said that the inauguration of the branch was a testimony of the bank’s dedication to the socio-economic development of the region. The bank has 1,000 branches and 1,592 ATMs. It has an aggregate balance sheet size of Rs 265,000 crore and total business of Rs 350,000 crore as on September 30, 2012.

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ICICI Bank launches money transfer service in Germany

ICICI Bank UK today launched money transfer service for Indians living in Germany.

‘Insta Netexpress’ will be offered through its online platform with an assured exchange rate and faster transfer time for users who wish to send money to India.

Money2India.eu is a web-based online money transfer tracking platform which facilitates tracking of money transfers from 17 Euro zone countries to beneficiaries in India, the bank said in a statement.

This service will offer competitive exchange rates, no processing fee or service charges, faster transfer time and dedicated toll free telephone support.

Users will benefit from this cooperation and experience simple and fast access to international payment schemes.

With PAY.ON's local presence, ICICI Bank will be able to meet customer needs better and provide a faster, more efficient service.

In this service, money can reach the beneficiary within 24 hours and the exact exchange rate applicable can be known at the time of sending money, an ICICI Bank spokesperson said.

beena.parmar@thehindu.co.in

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Oriental Bank bond issue to open tomorrow

Oriental Bank of Commerce’s issue of subordinated lower Tier II bonds of Rs 10 lakh each for cash at par aggregating Rs 1,000 crore is slated to open on November 21 and will close on November 27.

The public sector bank has an option to retain oversubscription of up to Rs 200 crore. In a notice to the BSE, the bank said the bonds, which have a 10-year tenure, have been rated ‘AA+’ by credit rating agencies ICRA and CARE and bear coupon rate of 8.93 per cent.

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HDFC Bank launches mobile banking in Hindi

Targeting 560-million Hindi-speaking population, the second largest private sector lender HDFC Bank on Tuesday launched a mobile banking application in the national language.

Mobile banking services is part of the bank’s overall strategy to use convergent communication platform to engage with customers, Senior Executive Vice-President for Direct Banking Channels and Premier Banking Birendra Sahu said here.

Today 82 per cent of all customer-initiated transactions happen on electronic channels, he said, adding therefore the bank has launched mobile banking solutions ranging from SMS banking, browser-based and application-based applications for smartphones.

There are around 565 million Hindi-speaking populations in the country, he said.

He said the bank launched the English-language mobile banking in July-August last year and already has 12 lakh users, and with the Hindi option, the user base can touch 16 lakh soon.

Quoting a CyberMedia report, he said, Android phones constitute about 56.4 per cent of the total 5.5 million smartphones sold in the first half of the year in the country.

This application will allow customers using an Android smartphone to conduct over 30 banking transactions, ranging from balance enquiry and checking transaction history to fund transfer and bill payments.

As of September, the bank had 2,620 branches and 10,316 ATMs spanning 1,454 cities/towns, he said.

For the September quarter, on the back of high retail loans HDFC Bank reported an over 30 per cent rise net profit to Rs 1,560 crore. Its net interest income grew at a healthy 26.7 percent to Rs 3,731.7 crore, due to a 22.9 percent growth in advances.

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Karnataka Bank raises Rs 250 cr through tier-2 bonds

Karnataka Bank Ltd has raised Rs 250 crore through the issue of 10-year lower tier-2 bonds.

The bank informed BSE on Monday that it has raised Rs 250 crore by issue of non-convertible subordinated debt instruments in the nature of debentures (lower tier-2 bonds) on private placement basis. The issue of bonds with a tenor of 10 years opened for subscription on October 22 and closed on November 12.

It said the Rs 125-crore issue, with a right to retain oversubscription to the extent of Rs 125 crore, received a huge response from investors. It resulted in over-subscription by 100 per cent.

As on March 31, the capital-to-risk weighted assets ratio (CRAR) of the bank was 12.84 per cent consisting of tier-1 capital of 10.86 per cent and tier-2 of 1.98 per cent.

The bank informed the exchange that with the above issue of bonds, capital funds have further improved. This will enable it to further expand the credit portfolio in the coming days.

vinayak.aj@thehindu.co.in

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IOB plans perpetual bond issue

Indian Overseas Bank is mulling to raise funds through a perpetual bond sale and will soon seek approval from its board for the same, a top bank official said.

“We are planning to raise some funds through perpetual bond issuance and had already got the approval from our Alco (asset-liability committee). We will soon seek board approval for this,” Chief Financial Officer T S Srinivasan told PTI over the weekend.

He, however, didn’t divulge how much the bank is planning to raise. Perpetual bonds are quasi-equity in nature and are considered as part of the tier-I capital.

The bond sale plan is part of its effort to ramp up the tier-I capital, which was below 8 percent at the end of the September quarter.

The public sector lender, which has sought Rs 1,500 crore from the government as capital infusion this financial year to increase its capital adequacy ratio, also said the amount of fund raising by the bank through alternate route will depend on the amount received from the government.

Finance Minister P Chidambaram, who held a meeting with public sector banks chairmen last week, had also said IOB, Bank of Maharashtra and Central Bank of India would need the maximum capital infusion from the government this year.

The government has budgeted Rs 15,000 crore for fund infusion into its banks this fiscal.

“The amount of capital we raise through alternate route will depend on the amount of infusion from the government,” Srinivasan said, adding the bank can look at raising money through QIP route if the market sentiment improves as the share price of the bank is currently trading at a discount to its book value.

Indian Overseas Bank reported a 23 percent drop in net profit to Rs 158.43 crore in the quarter ending September against Rs 207.46 crore reported in the same period a year ago.

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Home, auto loan rates may drop as competition hots up

Home and auto loan seekers might soon be able to borrow at relatively lower rates of interest.

The rising competition amongst public sector banks to shore up their retail portfolio is likely to drive down interest rates on such advances.

Hit hard by slowdown in credit demand from the corporate segment and the rise in stressed assets (from the sector), banks are looking to boost their retail portfolio, which includes home, auto, personal and education loans.

According to Saday Sinha, Vice-President, Equity Research, Kotak Securities, banks will look to bring down interest rates marginally to boost demand and grow their retail book.

State Bank of India, for instance, recently lowered lending rate across the board by cutting the base and prime lending rates by 25 basis points each to 9.75 per cent and 14.50 per cent, respectively. Besides, the bank also lowered its home loan rate to 10 per cent for loans up to Rs 30 lakh and 10.15 per cent for above Rs 30 lakh.

A host of other public sector banks have also lowered interest rates on retail advances as a part of their festival bonanza.

Lower rate of growth

While the average ticket size of retail advances is relatively lower than those extended to the corporate sector, banks seem to be comfortable lending to the retail segment due to the comparatively lower risks.

According to Sinha, by focusing on the retail sector, banks might have to settle for a lower growth rate in advances.

Banks have already revised their growth projections for this year to 15-16 per cent from the 18-20 per cent made during the beginning of this year.

However, banks prefer lending to the sector as the credit cost is lower on such advances due to relatively lower provisioning required for non-performing assets (NPAs).

Provision-coverage ratio refers to the ratio of outstanding provision to gross NPAs; higher provisioning depletes a bank’s bottomline.

“The asset quality in the retail segment has been better than in the agriculture, SME and large corporate segments. Naturally, the provisioning requirement for NPAs will also be lower, thereby helping banks improve their profitability,” Sinha said.

Margins

Currently, retail accounts for 16-20 per cent of public sector banks’ total advances.

Though lowering of interest rates on retail advances might put a pressure on margins, this will be offset by a corresponding reduction in interest rates on deposits, senior bank officials said.

“Fixed and bulk deposit rates are coming down, and so the cost of funds will start easing soon. The reduced yield on retail advances will be more than offset by the lowered cost of funds,” a senior official pointed out.

Moreover, most banks are sitting on surplus cash and it makes sense for them to lend these funds to the retail sector than invest in commercial paper or certificate of deposits which will earn them only 8.5-9 per cent.

Banks earn better margin on loans given to the retail sector. “Given the slowdown and the rise in stressed assets, banks prefer lending to AAA-rated corporates or big NBFCs which are safer. But here the rates are comparatively lower and so margins are squeezed,” said Deepak Narang, Executive Director, United Bank of India.

shobha.roy@thehindu.co.in

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No new banking licences without legal powers: Subbarao

A day after Finance Minister P Chidambaram asked the Reserve Bank to speed up the process of issuing new bank licences, Governor D Subbarao on Friday said it would be not possible without fulfilling the enabling conditions for the same.

“We have been preparing for launching this process (of issuing new bank licences) but all the ground work, all the enabling conditions for launching this work have to be fulfilled,” he told reporters on the sidelines of a function here.

Yesterday, Chidambaram had said he had asked RBI to finalise the guidelines for new bank licences and start accepting applications for the same pending passage of the Banking Laws (Amendment) Bill.

“We have written to RBI recently urging them to proceed to finalise the guidelines and proceed to receive applications for new banking licences in anticipation of the amendment in the Banking Regulation Act,” the Finance Minister had said.

“We hope that RBI will pick up the thread and finalise the guidelines and start receiving the application.”

The Minister had said that “the power or the authority” which RBI wants is already available in the other provisions of the law and with the central bank’s own regulations and guidelines for new banking licences.

The last time RBI allowed new private banks was in 2002, prior to which it allowed new players in the mid—90s.

The RBI issued the final guidelines in August 2011 for entry of new banks, including those floated by corporates, but is waiting for the necessary legal powers before it proceeds further. The bank licences were initially slated to be issued way back in 2008—09.

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63,000 public sector bank jobs up for grabs this financial year

Government-owned banks will hire over 63,000 people, including officers and clerical staff, during the current fiscal.

“There are huge job opportunities for young men and women in banks. It’s a very attractive career, and young men and women must take advantage of it,” Finance Minister P. Chidambaram announced on Thursday, after a review meeting of public sector banks and financial institutions.

As on September 30, all Government-owned banks had a total vacancy (officers, clerks and sub-staff combined) of 84,489. Of this, banks plan to recruit 63,200 during the current financial year. As on March-end 2012, the total workforce of public sector banks (including nationalised banks, SBI and its associate banks) was 8,01,509.

The Finance Minister also said that the State Bank of India alone had plans to recruit 1,200 officers and nearly 20,000 clerks this year. As on September-end, the total vacancies in the SBI and its five associate banks stood at 28,979.

A senior Finance Ministry official said the Government, in consultation with public sector banks and Institute of Banking Personnel Selection (IBPS), has tried to simplify and rationalise the recruitment process. Now, there are common eligibility criteria and interview for all public sector banks and a one-time application fee.

He said the Government had also suggested carrying on the recruitment exercise in each cadre at least once a year. To fill vacancies in the clerical cadre, IBPS has already invited applications for an examination scheduled next month, he added.

shishir.sinha@thehindu.co.in

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Allahabad Bank revises rates on term deposits

Allahabad Bank has revised interest rates on domestic term deposits below Rs 5 crore of varying maturities effective November 15.

While the bank has raised the rates of interest in the range of 25-150 basis points on deposits in varying time buckets; it has reduced rate of interest on deposit of one-to-less than two years by 10 basis points to 9.15 per cent.

The bank has also enhanced the maximum amount of deposit that can be accepted under AllBank Liquid Term Deposit Scheme to Rs 100 crore (Rs 50 crore), said a press statement issued by the bank.

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Karnataka Bank cuts lending rate by 0.25%

Karnataka Bank today reduced base rate, or minimum lending rate, by 0.25 per cent to 10.75 per cent with effect from November 10, 2012.

“The Bank’s base rate now stands reduced to 10.75 per cent from the earlier 11 per cent,” it said in a filing to the BSE.

It also reduced rate of interest on deposits by 0.25 per cent.

With the reduction in base rate, all loans linked to the base rate would be cheaper by 25 basis points (0.25 per cent).

“The said reduction is applicable to the existing loans and also for the future loans. This will enable retail and MSME customers to avail funds at reduced rates and to stay competitive in their market,” it said.

Also, the housing loan up to Rs 25 lakh will attract interest rate of 10.75 per cent and car loans 11.25 per cent per annum.

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