Gross NPA divergence at Rs 6,816 crore by Mar 2016: IDBI Bank

Public lender IDBI Bank’s gross NPAs by the end of March 2016 were lower than the Reserve Bank’s estimate, with a divergence of Rs 6,816.60 crore, its annual report shows. As of March 31, 2016, the bank had reported gross non- performing assets (NPAs) or bad loans to the tune of Rs 24,875.07 crore, according to the bank’s annual report for 2016-17. The Reserve Bank (RBI) had put gross bad loans on the bank’s balancesheet at Rs 31,691.67 crore by 2016 March-end, which works out to a difference of Rs 6,816.60 crore.

In case of net NPAs by this period, the divergence is of Rs 4,755.60 crore. The lender had reported net NPAs worth Rs 14,643.39 crore as against RBI’s estimate of Rs 19,398.99 crore. During 2015-16, the bank had reported a net loss of Rs 3,664.80 crore because of a surge in bad loans on its books. This led to an overall divergence in the bank’s provisioning at Rs 2,061 crore.

The annual report data further showed that the bank’s total exposure of 20 largest borrowers and customers by the end of March 2016 stood at Rs 62,329.21 crore (14.55 per cent of total advances), which further increased to Rs 63,967.81 crore (15.53 per cent) as of March 31, 2017. The total exposure to top four NPA accounts was Rs 11,576.97 crore at the end of the fiscal ended March 2016 and Rs 13,172.74 crore by March 31, 2017.

In his message to shareholders, MD and CEO Mahesh Kumar Jain said that good performance during 2016-17 was overshadowed because of deterioration in asset quality. As a consequence of higher NPAs and stressed assets, the provisioning rose, which in turn negatively impacted the bottom line of the bank and raised concerns on the capital adequacy front, he said. “These developments have led to implementation of prompt corrective action (PCA) framework on your bank by RBI. We are ensuring the RBI guidelines relating to distribution of dividend, branch expansion, capital expenditure, investment in subsidiaries are followed,” he said.

Jain said the bank has devised a comprehensive turnaround strategy that seeks to leverage its strengths and entail identification of areas for containing cost and revenue maximisation that would ensure sustainable growth and profitability. Earlier in May, IDBI Bank came under RBI’s PCA watch because of high level of bad loans on its balancesheet.

In April this year, RBI had issued a set of enabling provisions under the revised PCA framework with a clause that if the bank does not improve, it could either be merged or taken over by another bank. Under PCA, RBI has powers to curb a bank’s capacity of giving fresh loans, besides putting restrictions on dividend distribution, among others. Banks are now required to state their bad loan divergence in their financial statements if it exceeds 15 per cent. The sock of IDBI Bank traded at Rs 56.85 on the BSE, up 0.89 per cent from its previous close.


Source : Financial Express

Read more »

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

Read more »

Government plans to swap CEOs of IDBI Bank and Indian Bank

The government is likely to tap Indian Bank chief executive MK Jain to try and turn around troubled IDBI Bank after seeing his hand in the stunning transformation of the Chennai-based lender. Jain, who is credited with making Indian Bank profitable, would swap positions with IDBI Bank chief Kishor Kharat, who would move to head Indian Bank.

This is the first time in recent memory that such a move is being considered and it is likely to set a precedent with performers being rewarded with challenging assignments, said two people familiar with the matter. A formal announcement is likely soon. Jain and Kharat could not be immediately reached for comment.

Jain’s selection was also prompted by the realisation that IDBI Bank needs stable leadership for some time so that a turnaround can be sustained. Jain has three years to go.

IDBI Bank reported record losses recently, and Jain would work to help recover dud loans amid an overall freeze in other operations of the bank, said the people who did not want to be identified.

Under Jain’s leadership, Indian Bank shares have delivered an over-three-fold jump in returns even as many of lender’s peers have struggled amid rising bad loans. In contrast, IDBI Bank is up just 22% from its year’s low. The stock price of the two banks reflects their financial performance over the past year.

IDBI Bank also had to contend with sagging morale after the Central Bureau of Investigation arrested five of its officials over alleged irregularities in lending to the failed Kingfisher Airlines.

Jain joined Indian Bank in No-vember 2015 and in the past one ye-ar has overseen a remarkable tur-naround. Net profit jumped nearly eight-fold to Rs 373.47 crore in the quarter ended December 2016 and earnings per share improved to Rs 7.78 in the same quarter from Rs 0.88 in October-De-cember 2015.

IDBI Bank, on the other hand, posted a record loss of Rs 2,255 cro-re in the Decem-ber quarter as it had to make huge provisions for bad debt which stood at 15% of the total loan book. Due to poor de-mand for loans and non-payment of dues, the bank’s net interest in-come crashed 45% to Rs 850 crore while non-interest income fell 5% to Rs 551 crore.

ICRA, which downgraded the bank’s rating, has said the lender would need at least Rs 9,000 crore to stay afloat, which is almost the bud-geted capital investment by the central government for all banks.


Source : Economic Times

Read more »

Government may shuffle heads of some PSU banks

The government is considering a proposal to shuffle the heads of some public sector lenders, including IDBI Bank, to improve their performance and resolve the issue of bad loans.

"There is a proposal for swapping of MD level position in banks which is being looked into. Final decision would be taken after careful consideration," said a source.

There are also talks of the CEO and managing director of IDBI Bank, Kishor Kharat, being moved to another bank.

The Appointments Committee of the Union Cabinet, headed by Prime Minister Narendra Modi, will take a final decision on this issue.

IDBI Bank has largest presence in joint lending and a has critical role in many Corporate Debt Restructuring (CDR) proposals, sources said.

According to a Parliamentary Committee report, although IDBI Bank has been a pioneering institution in the financial sector of the country, in 2015-16 it registered a loss of Rs 3,664 crore as against a net profit of 873 crore in 2014-15.

The bank has also seen decline profits on a sequential basis -- Rs 2,031 crore in 2011-12, to Rs 1,882 crore and Rs 1,121 crore in 2012-13 and 2013-14, it said.

The decline in profits of IDBI Bank could be attributed to increase in Gross Non-Performing Assets, loan write-offs and poor financial results, Committee on Petitions said in its report.

It has recommended that the Finance Ministry should effectively liaise with the IDBI Bank for formulating a Transformational Plan with a target of putting the stressed projects back on track.

It has suggested bringing down Gross NPAs to 3 per cent and Net NPAs to zero per cent by 2018-19, selling of non-core assets to fund the growth.

The board of IDBI Bank last month approved proposal for dilution of stake in some non-core businesses to shore up capital base.



Source : Economic Times

Read more »

IDBI Bank opens first self service mini branch kiosk

IDBI Bank has launched its first self service Mini Branch Kiosk at its Cuffe Parade, Mumbai Branch.

The kiosk will address the customer’s request of personalised cheque leaves dispensation and issue of Demand Draft & Pay Order on 24X7 basis. It also has the functionalities of ATM, the bank said in a statement.

Speaking on the occasion, B K Batra, DMD, indicated that the bank will install more such 24x7 banking facilities so that its customer can do banking at their own convenience and time.


Source : Thehindubusinessline

Read more »

IDBI Bank to roll out e-huts to connect with rural population, Goa gets two more branches

IDBI Bank has decided to roll out e-huts to connect with the rural populace, a senior bank official said here today.

"We will be launching e-huts across the country. It's a concept that is widely accepted in the West, but in India, it's yet to pick up," IDBI's Deputy Managing Director M O Rego said.

He said e-huts will be located at a relatively populated place.

"The bank has currently introduced e-lobbies which are next to the branches. The e-hut concept will be completely unmanned units... to help the customer understand technology," Rego said.

The top official was addressing a press meet in Goa after inaugurating two more branches in the state, taking the total to eight.

The branches were opened in Candolim and Chinchim. Rego said the newly opened branches are in line with the bank's strategy to strengthen its home and MSME loan portfolio in the state.

"IDBI has registered impressive growth in the region with 22 per cent growth in current accounts and saving accounts (CASA) in Goa. The total deposits in the state grew 16 per cent in the previous financial year," he said.

The structured retail assets, which include home loans as the largest component, saw a jump of 66 per cent in the state, Rego said.

The bank has also been extending support to medium and small enterprises in the region, and the lending to this segment rose 48 per cent, he added.

Source : Economic Times

Read more »

IDBI Bank may raise capital in FY16, says CMD Raghavan

IDBI Bank may look to raise further capital this fiscal and is not averse to tapping the market with a follow-on-public offering (FPO), its Chairman & Managing Director M.S. Raghavan has said.

"We definitely need capital. I am not ruling out tapping the market with FPO for this purpose this fiscal", Raghavan told Business Line when asked about capital raising plans for 2015-16.

Raghavan said that he would look to tap the market the day the Bank’s share price equalled its book value.

"Current price-to-book (P/B) of the bank is around 50 per cent. The day my price comes close to the book value that is the day I will go to market"

At the same time, he made it clear that the bank was not in any "dire need" of capital and could manage the current fiscal with existing capital.

The credit growth in the financial year just gone by was muted at about 6 per cent, Raghavan noted.

He was however confident about the prospects for the current fiscal (2015-16) and expects the overall business to grow 12-15 per cent this fiscal.

IDBI Bank has aggressive plans to increase its branch network to 2,000 by end June from the current level of 1,711.

Plans are afoot to add another 750 ATMs this fiscal, taking the overall count of ATMs to 3,750.

Raghavan was in New Delhi for launch of the 3,000th ATM of the bank.

srivats.kr@thehindu.co.in


Source : Thehindubusinessline

Read more »

Bank cannot freeze employee's account on employer's request: Consumer forum

A bank cannot freeze the account of an employee on the request of the employer and become a judge of dispute between them, a consumer forum here has said while holding IDBI Bank Ltd guilty of deficiency for doing so.

A bench of New Delhi District Consumer Disputes Redressal Forum, presided by CK Chaturevdi, made the observation while asking IDBI Bank Ltd to pay Rs 20,000 to Delhi resident Om Prakash Sharma, noting that his account was freezed from December 23 to 27, 2010, on his employer's request and without any intimation to him.

"In our considered view, the bank cannot become a judge of dispute between the employer and employee and freeze the account of employee on the request of employer. Such a right belongs to Court or police on investigation can resort to such a request," the forum said, adding the bank did a "negligence act" in freezing Sharma's account.

It asked the bank to pay a compensation of Rs 20,000 for deficiency and litigation charges while holding the bank "guilty of gross deficiency".

Sharma had told the forum that he had some dispute with his employer and was given a cheque of Rs 59,000 towards settlement of dues.

However, Sharma said that he came to know through RTI that his employer had written to his bank to put a debit freeze on his account, alleging that complainant had stolen the said signed cheque and filled in figures and got the money transferred in his account.

In its order, the forum also noted that the employer had not lodged any FIR with police about the theft of cheque by complainant.

Source : Economic Times

Read more »

IDBI Bank Q3 net flat at Rs. 102.79 cr

Public sector IDBI Bank today reported a marginal decline in net profit at Rs. 102.79 crore for the October-December quarter of 2014-15.

The bank had a net profit of Rs. 103.96 crore in the third quarter of the 2013-14 fiscal.

Total income of the bank rose to Rs. 7,935.99 crore during the three-month period, from Rs. 7,149.88 crore in the corresponding period a year ago, the bank said in a statement.

The net non-performing assets (NPA) of the bank rose to 3.05 per cent of total advances, as against 2.93 per cent at the end of December 2013. The gross NPA stood at 5.94 per cent.

Interest income of the bank rose to Rs. 7,159 crore during the third quarter, from Rs. 6,617 crore in the same period a year ago.

Shares of IDBI Bank closed at Rs. 65.80, up 0.23 per cent over the previous close on the BSE.


Source : Thehindubusinessline

Read more »

IDBI Bank launches electronic insurance account

IDBI Bank in association with NSDL Database Management Ltd (NDML) has launched 'Electronic-Insurance Account (e-IA)’.

e-IA is the portfolio of insurance policies of a policy holder held in electronic form with an insurance repository.

Under this facility, customers can buy and keep insurance policies in electronic form, rather than as a paper document.

Existing policies in physical mode too can be dematerialised and held in e-IA.

This facility will not only provide policy holders a facility to keep insurance policies in electronic form but also enable them to undertake changes, modifications and revisions in the insurance policies.

"This would also be useful as the client would not have to undergo for fresh KYC verification in order to purchase new policies," the bank said in a statement.


Source : Thehindubusinessline

Read more »

IDBI Bank net dips to Rs. 118 cr on higher employee cost, provisioning

IDBI Bank today said its net profit fell by 38 per cent to Rs. 118.49 crore in the second quarter ended September 30 in the current financial year on higher employee cost and provisioning.

The bank’s net profit during the same quarter a year ago stood at Rs. 192.27 crore.

The bank made provisioning towards bad loans of Rs. 990.47 crore during July-September, 2014—15; up from Rs. 878.72 crore in the same quarter of 2013—14.

Meanwhile, employee cost went up to 497.31 crore during the quarter from Rs. 360.49 crore a year earlier.

“Total income has increased from Rs. 7,114.44 crore to Rs. 7,610.52 crore for the quarter ended September” it said in a BSE filing.

The non-performing assets (NPAs) rose to 5.72 per cent in Q2—FY15, from 4.98 per cent year ago.

Net NPAs, however, reduced to 2.79 per cent of total advances as of September 30, from 2.82 per cent year earlier.

IDBI Bank shares closed at Rs. 70.55 apiece on the BSE today, up 3.37 per cent from the previous close.

Source : The Hindu

Read more »

IDBI Bank launches e-lounge in Mumbai branch

IDBI Bank on Thursday launched its first ‘e-lounge’. The e-lounge is unmanned and located at Mahim branch, Mumbai.

At IDBI Bank’s e-lounge, banking services that the customers can, on a self-service basis, enjoy are facilities such as ATM, Automated Cash Deposit (with a receipt and instant credit of the amount), Automated Cheque Deposit (with an acknowledgment receipt), Automated Pass Book Printing, e-Transact terminal for various Card and Net Banking holders to view balance, make a funds transfer, pay bills and recharge.

The platform also contains an LED screen providing details of Interest rates, products and services and a Hotline to our Customer Care Centre, the bank said in a statement.


Source : The Hindu

Read more »

IDBI Bank joins the credit card bandwagon

Nearly nine years after becoming a full-fledged commercial bank, IDBI Bank has decided to issue credit cards to its customers.

The Mumbai-headquartered bank intends to issue around five lakh cards in three years — one lakh in the first year and two lakh cards each in the following two years.

The public sector bank, which currently has a base of more than 10 million customers, will be issuing EMV (Europay, MasterCard and Visa) chip cards with magnetic stripes.

EMV is a global security standard for microprocessor chip card technology. This ensures that the credit card is not only accepted anywhere in the world but is also better protected against fraudulent activities.

Since many merchant establishments in the country still have credit card payment infrastructure (terminals) that accept cards with magnetic stripe, the bank has decided to issue EMV cards with magnetic stripe.

The category of credit cards that the bank plans to issue are: Platinum, Signature and Corporate.

Service provider

For foraying into the credit cards space, IDBI Bank is planning to engage the services of a third party service (TPS) provider for providing end-to-end solutions for credit card issuance under the outsourced model. The TPS provider, among others, will undertake operational activities relating to account updation, demographic changes, payment instructions, recurrent payment instructions and balance transfer request received through physical change request form/phone banking/Net banking.

For now, IDBI Bank will be issuing credit cards on Visa and MasterCard platforms. The main business of Visa Inc and MasterCard Worldwide is to facilitate electronic funds transfer — they process payments between the banks of merchants and the card issuing banks of the purchasers.

Once Rupay (the home-grown rival of Visa and MasterCard) launches the credit card, the bank will issue the cards in association with Rupay too. Currently, IDBI Bank’s debit card portfolio comprises Rupay debit cards also.

As on November-end 2013, there were 18.77 million credit cards outstanding in the country. The total value of loans outstanding against these cards stood at Rs 12,789 crore.

ramkumar.k@thehindu.co.in

Source: Thehindubusinessline

Read more »

IDBI Bank to raise Rs 1,200 cr fresh capital through QIP

State-run IDBI Bank plans to raise up to Rs 1,200 crore through qualified institutional placement in FY14, said a top official.

The bank needs an additional Rs 3,000 crore this fiscal, of which Rs 1,800 crore will come from the Government and the rest will have to be raised via qualified institutional placement route, IDBI Bank Chairman and Managing Director, M.S. Raghavan, at the sidelines of annual banking conference Bancon.

“We want to augment our tier one capital. Rs 3,000 crore is the amount we foresaw, of which Rs 1,800 crore has been allotted by the government. So, Rs 1,200 crore is the rough estimate which will come through QIP,” said Raghavan.

The bank has been allotted Rs 1,800 crore in support from the government, as part of the Centre’s Rs 14,000-crore capital infusion programme for banks during this fiscal.

On raising tier-II capital, Raghavan said it was very comfortable in that front and will not be doing any debt raising for the next two years. He also said his main objective is to improve the banks lending to the priority sector.

“We have been in the commercial banking space only for the last 10 years. So in our priority sector lending, we are substantially less and are yet to catch up to the RBI norms,” said Raghavan.

deepa.nair@thehindu.co.in

Source: thehindubusinessline

Read more »

IDBI Bank net profit drops 60% on higher bad loans, provisions

Higher bad loans and provisions dragged IDBI Bank’s net profit down by 60 per cent in the second quarter to Rs 192 crore from Rs 484 crore in the year-ago period.

Gross non-performing assets (NPAs) jumped to 4.98 per cent as of September-end, 2013, from 3.45 per cent in Q2FY’13. Net NPAs also rose to 2.82 per cent from 2.04 per cent, as per the BSE filing.

Provisioning of the public sector lender soared 78 per cent to Rs 879 crore from Rs 495 crore in the corresponding quarter last year.

However, net interest income, the difference between interest earned and expended, saw a 19 per cent increase at Rs 1,484 crore against Rs 1,249 crore in the same quarter last fiscal.

During the quarter, other income declined 15 per cent to Rs 579 crore compared with Rs 683 crore in Q2FY’13.

Year-on-year advances grew 10 per cent to Rs 1.84 lakh crore (Rs 1.66 lakh crore as on September 30, 2012), while total deposits increased 12 per cent to Rs 2.03 lakh crore (Rs 1.80 lakh crore).

The shares of IDBI Bank ended down by 3.1 per cent at Rs 65.60 per share on the BSE.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

Read more »

IDBI Bank hopeful of recovering 80% of Kingfisher dues

Public sector lender IDBI Bank is hopeful of recovering up to 80 per cent of its Rs 800 crore exposure to Kingfisher, even as the revival of the grounded airline remains uncertain.

“We are quite hopeful of recovering our dues from Kingfisher Airlines. In all, we expect to recover 70-80 per cent of our total loans to the airline,” a senior IDBI Bank official told PTI here.

The official said the bank’s total exposure stands at around Rs 800 crore. “We have already recovered Rs 70-80 crore by way of selling pledged shares,” the official added.

IDBI Bank is one of the five lenders in the SBI-led core group, which was set up early this year to recover over Rs 7,500 crore in principal alone from the Vijay Mallya-promoted airline. The company has not been servicing these loans since January 2012. The airline took loans from as many as 17 banks.

While SBI has the maximum exposure with Rs 1,800 crore, the other major lenders to the grounded airline include PNB (Rs 800 crore), BoI (Rs 650 crore), Bank of Baroda (Rs 550 crore), United Bank of India (Rs 430 crore), Central Bank of India (Rs 410 crore).

UCO Bank has an exposure of Rs 320 crore), Corporation Bank (Rs 310 crore), State Bank of Mysore (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).

“There is enough collateral to cover the dues of all the lenders,” the official said, adding, “also, the Kingfisher brand still has a lot of value.”

The declared collaterals include the Kingfisher House in Mumbai worth about Rs 150 crore, the Kingfisher Villa in Goa worth around Rs 90 crore and the brand Kingfisher which had a notional value of over Rs 4,000 crore when pledged.

In May, the consortium leader SBI had said the lenders had recovered Rs 1,000 crore and was making all efforts to recover the remaining dues from beleaguered airlines.

“KFA recoveries are going on. We have substantial amount of recoveries. Total recoveries of more than Rs 800-1000 crore is already done,” past SBI chairman Pratip Chaudhuri had said.

The airline has been grounded since last October and its flying licence got expired in December, though it has a two years window to restart the carrier on the same permit.

Source: thehindubusinessline

Read more »

IDBI Bank on bad loan recovery drive

IDBI Bank wants its managers — at the zonal, regional and branch levels — to focus their energies on making recoveries from the top 20 bad loan accounts in their jurisdiction.

What this means is that the bank does not want its officials to spread themselves too thin by seeking to make recovery from all bad loan accounts at the same time.

To clean up its books, the public sector bank has launched a special ‘Own Your NPA’ (non-performing asset) campaign so that officials give it all they’ve got for faster resolution of bad debts.

According to IDBI Bank Chairman and Managing Director M.S. Raghavan, as part of the campaign, each zonal, regional and branch manager will personally go and meet the customers.

“Hitherto, the focus (recovery) was missing. So, now the focus has returned. It is not 200 accounts but the top 20 (bad loan) accounts that are getting attacked time and again,” he said.

The total number of cases identified under the campaign, which was launched on August 1 and runs up to December 31, is 1522, involving an aggregate principal outstanding of Rs 5,805 crore.

Through the campaign, the bank is trying to settle some 73 per cent of its total NPAs of Rs 7,959 crore as on June-end 2013.

Raghavan said the managers have been told that their achievements on the recovery front under the campaign will be an important factor in their overall performance appraisal.

“We said that ideally these accounts should be closed. However, we all know this is not possible. In any case, there should be substantial progress on the recovery front,” said the IDBI Bank chief.

Year-on-year, IDBI Bank has seen a 45 per cent increase in NPAs, from Rs 5,496 crore as at June-end 2012 to Rs 7,959 crore as at June-end 2013.

Raghavan observed that in any bank’s loan portfolio, about 1 per cent is the normal stress that is built up due to various reasons, including business failure.

But what is more important is the stress arising from external factors, such as slowdown in the economy.

So, the stress from external factors is one major factor that has affected the asset quality of all major banks. This will get minimised only if the economy makes a turnaround.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

Read more »

Melwyn Rego elevated to Deputy MD of IDBI Bank

Melwyn Rego has been appointed by the Government as Deputy Managing Director of IDBI Bank. He took charge on August 30. Prior to his elevation, Rego was Executive Director.

With this appointment, IDBI Bank has two DMDs who are whole-time directors on the board.

B. K. Batra is the senior-most DMD.

According to reports, Batra is expected to be elevated as the chief of either a public sector bank or a financial institution.

Source: thehindubusinessline

Read more »

Axis Bank hikes NRE deposit rates by 50-75 bps

Axis Bank, India’s third largest private sector bank, has increased interest rates on Non-Resident External (NRE) fixed deposits for tenures above three years by 50-75 basis points (bps), with effect from August 24.

The bank also increased interest rates on Foreign Currency Non-Resident (FCNR-B) deposits of tenures over three years by 100 bps, effective from August 17. Similarly, the rates for fixed deposits in other currencies have been hiked by one percentage point, the bank said.

For NRE fixed deposits of three to five years, the interest rate has been raised to 9.50 per cent from 8.75 per cent and for 5-10 years, it has been revised to 9.25 per cent from 8.50 per cent.

IDBI Bank

IDBI Bank has hiked FCNR (B) deposits for the tenor of three years and above by 100 basis points across all nine currencies.

In respect of NRE deposits, the rates have been hiked for tenors of more than three years and up to seven years by 25-50 bps. The bank is now offering a peak interest rate of 9.5 per cent on NRE deposits as a result of the revision.

Lakshmi Vilas Bank

Meanwhile, Lakshmi Vilas Bank also increased its lending and deposit rates. The bank hiked its base rate or the minimum lending rate by 25 bps to 11.25 per cent (from 11 per cent).

Its fixed deposit rates have been raised by 75-275 bps in select maturities ranging from 15 days to 270 days. The revised rates will come into effect from August 26.

beena.parmar@thehindu.co.in

Source: thehindubusinessline

Read more »

IDBI Mutual launches tax saving fund

IDBI Mutual Fund launched an open-ended equity-linked savings scheme (ELSS), ‘IDBI tax saving fund’, with an aim to provide capital appreciation to investors along with tax benefit.

The new offering which will be open for subscription from tomorrow, will close on September 3 and the scheme will re-open for continuous sale from September 17.

“We feel this is the right time for equity investors to enter into the market as the valuations are attractive in many stocks following the recent market crash. Apart from capital appreciation, the new fund will also offer tax savings to the investors,” Debashish Mallick, Chief Executive, IDBI Mutual Fund said here.

He also said the fund house expects to garner around Rs 100 crore during the NFO period.

“We will majorly focus on retail investors for this new scheme,” Mallick said.

When asked about the timing of launch, Mallick said equity funds tend to do well when valuations are at an attractive level as investors benefit in the long run.

Talking on the distribution penetration, Mallick said the fund house is planning to increase the strength of its representative offices.

IDBI MF, promoted by public sector lender IDBI Bank, has a total AUM of around Rs 5,500 crore at the end of June quarter.

Source: thehindubusinessline

Read more »