UCO BANK SELECTS XCHANGING TO IMPLEMENT DISASTER RECOVERY SOLUTION

UCO BANK SELECTS XCHANGING TO IMPLEMENT DISASTER RECOVERY SOLUTION

To become the first Indian bank to implement EastNets' empowerment product

MUMBAI, 1 June 2010 - Xchanging /quotes/comstock/23s!e:xch (UK:XCH 178.90, -1.80, -0.10%) , a large, fast growing global business processor, announced today that it has extended its relationship with UCO Bank, a leading Indian bank, to implement mission critical disaster recovery solution for its most business critical financial telecommunication infrastructure.

Xchanging will enable UCO Bank to seamlessly integrate near real-time databases, payments, and transactions over its SWIFT payment gateway with the bank's existing disaster recovery infrastructure. Xchanging EastNets' implementation compliance and payment solution conforms to international banking benchmarks. The solution will provide a secure environment for efficient duplication detection, and recoverability of high volume messaging traffic. The scope of the implementation also includes back-up of foreign exchange payments and telecommunications platform.

A leading commercial bank and Government of India undertaking, UCO Bank has an extensive network of over 2,000 service outlets and 35 regional offices across India. With additional offices in Hong Kong, Singapore, Malaysia and China, UCO Bank conducts extensive foreign exchange business in more than 60 centres across India. Xchanging's comprehensive disaster recovery solution will address the data recovery needs of the bank's operations.

David Andrews, CEO Xchanging said, "We are delighted to be the provider of choice for UCO bank and to be the first to introduce the EastNets solution to the Indian banking market. IT is playing an increasingly important role in business processing across industry sectors. As a technology powered business processor, our vision is to now bring the power of collaborative technologies such as cloud computing to our customers' business processing needs. With our extensive Intellectual Property, we have already set the foundations to be ahead of the market in providing our customers the benefits of new generation technologies".

Nimish Soni, Managing Director, Xchanging India added, "Xchanging has been supporting UCO Bank since 2004 as a SWIFT Partner. Xchanging's mission critical solution will allow UCO Bank to streamline its back-up and recovery practices and derive increased operational efficiencies. In the event of any hardware failure, human error, file system corruption or disaster, our solution will help the bank to restart operations without any delay in switching to the back-up system". He further added, "We are seeing a growing number of banks adopt an increasingly focused approach towards disaster recovery management planning. This is spurred by an increased regulatory thrust by the Reserve Bank of India (RBI). UCO Bank when looking for a strategic partner to augment its disaster recovery planning selected Xchanging after a careful assessment of the depth of our experience".

Xchanging designs, builds and runs a range of technology solutions for business processing. The company embeds its Intellectual Property (IP) to create a solution faster and more cost effectively than customers can themselves. These technology services are aimed at organisations that wish to use IT services to improve organisational effectiveness and profitability.

Xchanging's capabilities in the banking and securities industries include retail investment account management and securities processing services. By the end of 2010, it will be the largest independent investment account processor in Germany, and is expected to administer approximately 1.5 million accounts for its Enterprise Partnership (EP) Allianz Global Investors and other customers such as SEB Bank and MEAG MUNICH ERGO Kapitalanlagegesellschaft mbH (MEAG).

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RBI tries its hand at contract style recruitment

For long now, a government job has meant official accommodation, easy working hours and a wholesome retirement kitty, among a host of benefits. However, this is changing, as state-run organisations increasingly tilt towards contract basis employment, where the benefits are limited to bare essentials such as medical benefits and salary.

So it is at the Reserve Bank of India (RBI), which is currently looking for executive interns on a three-year contract.

The search is for 200 executive interns, way more than the number of direct recruit probationary officers (POs) the central bank takes in every year.
The selected candidates would neither be entitled to company accommodation, pension, provident fund or gratuity, nor have any claim to seniority. In fact, they could get sacked even before the contract period ends if their performance is not up to the mark.

This is the first time RBI has issued an advertisement for mass recruitment of entry level executives on contract basis. Earlier this year, it was looking for media relations executives at the middle and top on contract basis.

The entry level jobs could well be served by employees on contract now. In fact, RBI had advertised for vacancies for recruiting POs in July last year. However, it is yet to issue any such advertisement so far this year.

Going by experts, RBI may stick to this mode of employment.

“Employing on a short-term basis makes it easier to weed out non-performers. So the clear indication is that people shouldn’t come here to park themselves,” said Aneesh G Laikar, CEO, Selectema Consulting, a Mumbai-based recruitment firm.

“In contract basis employment, you cannot be a part of a trade union, which will make the exits easier. It is a sign of times to come. We cannot rule out the possibility of RBI using this way of employment on higher levels too,” said Laikar.
T Shreedhar, managing director of Hyderabad-based talent management firm TMI Network, feels the RBI move will legitimise contract staffing.

The eligibility criteria for the executive interns are the same as those for the POs recruited by RBI every year.

However, the procedure of examination has been shortened. It would now be limited to the aptitude test and an interview. The descriptive test on economic and social issues, finance and management has been skipped.

The emoluments are in the range of Rs5-6 lakh per annum. The cost to the bank for a PO also works out to around Rs6 lakh per annum, though in case of POs, it spreads across perquisites like bank accommodation, various reimbursements, provident fund, pension and gratuity, besides medical benefits.

The closing date for receiving application from candidates for executive interns is August 30, while the written examination will be held on October 24.

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Public sector banks seen besting private sector peers in RoE

Public sector banks (PSBs) have fared better than their private sector counterparts in terms of return on equity (RoE) in the last two financial years, breaking with the trend seen over at least six previous years, says a report by Avendus Equity Research.

The trend may be here to stay, Chandana Jha, banking analyst, Avendus Equity Research, suggests in the report, released last week.

RoE measures a bank’s profitability by revealing how much profit it has generated with the money shareholders have invested.

India’s second-largest lender, ICICI Bank, had the lowest average RoE of 9.2% in the March 2008-March 2010 period, while Punjab National Bank (PNB) had the highest, at 24%.

The figures are likely to be maintained in the March 2011-March 2013 period, with ICICI Bank’s average RoE at 10% and PNB’s at 24.1%, says Jha.
“Due to lower equity dilution, most PSBs have either sustained or increased their RoE during the past decade.

This is in contrast to the decline in RoE for new banks, which was partly driven by frequent capital raising. Despite the lead in loan growth over PSBs, the RoEs of new banks may not diverge and may stay below that of a few PSBs during March 2011-March 2013,” Jha writes.

For state-owned lenders, the RoE performance has largely been a result of improving profitability.
“Our profitability has improved over the years and that helped us to maintain higher RoE. We hope to maintain this going forward,” said M D Mallya, chairman and managing director, Bank of Baroda.

Another reason is that Tier-I capital, which is the core measure of a bank’s financial strength from the regulator’s point of view, has been kept lower than for private sector banks. This has helped them achieve higher leverage.

“The profits of peer banks remain the same. If they have more equity than us, then the RoE can get depressed. In our case, the Tier-I capital is 8.47%, whereas the private peers have much more. The leverage is slightly higher in our case,” said B A Prabhakar, executive director, Bank of India.

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RBI against securitisation for profit booking

India's central bank Wednesday proposed higher capital requirements and capping the foreign holding below 50% in new private-sector banks as it considers issuing fresh banking licenses.

"A larger number of banks would foster greater competition, and thereby reduce costs, and improve the quality of service," the Reserve Bank of India said in a discussion paper.

India's banking sector is dominated by 27 state-run banks, and the RBI has historically been wary of granting licenses to the private sector due to apprehensions it may become difficult to control any rise in bad loans. The last domestic banking license was allotted to Yes Bank Ltd. in May 2004. India now has 22 private-sector banks.

The discussion paper comes about six months after Finance Minister Pranab Mukherjee, in his budget speech in February, said there was a need to expand the banking system and that the RBI was considering issuing new bank licenses.

The discussion paper proposes three different options for the minimum capital requirement for new banks with their pros and cons. The first one argues for a capital base above 3 billion rupees ($64.5 million), while the second is for a steeper 10 billion rupees. The third option is to have an initial minimum capital of 5 billion rupees, which can be increased to 10 billion rupees in five years.

"Taking into account the lapse of time since the last guidelines issued in January 2001 and inflation since then, there is a case to have the minimum capital requirement at more than 3 billion rupees," it said, seeking feedback on the discussion paper by Sept. 30.

The 2001 rules had specified the minimum capital at 2 billion rupees, which was to be raised to 3 billion rupees within three years of starting business.

The RBI said also that the total foreign shareholding through direct and institutional investments may be capped below 50% with a lock-in period of 10 years.

The paper proposes multiple options for minimum shareholding. That includes retaining the existing rule of founders initially bringing in at least 40% of capital with a lock-in clause of five years while the maximum stake of other shareholders capped at 10%.

The paper discusses allowing industrial and business houses to enter into the banking sector. It said that firms which have experience in financial services may be considered for such licenses. Another option may be allowing corporations to take over regional rural banks before being issued a bank license, it said.

Non-banking finance companies can also be given an option of converting to banks, but they must not be involved in real-estate activities, it said.

Financial services firms such as Bajaj Finserv Ltd. and IFCI Ltd., which may look at converting to bank, welcomed the move.

"Our net worth today is above 30 billion rupees. So there is every possibility of us meeting the capital adequacy criteria," IFCI Chief Executive Atul Kumar Rai told the ET Now television channel.

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45-yr-old woman foils robbery

A 45-year-old women, Rekha Jais, a resident of Mohade Layout in Wadi, foiled a robbery and helped nab two accused. Police said the woman had withdrawn cash Rs 25,000 from UCO Bank. She had kept the cash in her handkerchief. While she was walking towards her house, two miscreants came on a bike and tired to snatch the handkerchief.

However, she screamed and held on to the pillion rider's hand. Though the accused managed to free his hand, passers-by chased and nabbed them. Wadi police arrested Dhananjay Malode and Rashid Shaikh.

Bag containing ornaments stolen: A bag containing 6 tola (60gm) gold valuables was stolen by an unidentified miscreant from Midas Heights, a complex of private hospitals, at Central Bazar Road in Randaspeth on Wednesday evening.

Police said the complainant Hemant Patel and his wife had gone to the building for treatment of their four-year-old daughter. The incident took place when the wife left her purse in the waiting room and the family went inside for the check-up. After returning, the couple was shocked to see the purse missing.

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