Karnataka Bank offers 5% interest on SB deposit

Karnataka Bank Ltd has increased the interest rate on savings bank (SB) deposit from 4 per cent to 5 per cent with immediate effect.

Quoting Mr P. Jayarama Bhat, Managing Director of the bank, a bank release said here on Saturday that the enhancement of interest rate on SB deposits, coupled with crediting of interest on quarterly basis, will increase the yield on SB deposits of all the customers.

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SBI Cards to customise offers around spending patterns

Credit-card issuers are increasingly turning into financial counsellors. Come January quarter, SBI Cards, a standalone credit-card company co-promoted by India's largest state-owned bank, plans to launch ‘customised statements' to help its customers know their spending pattern, say over a year.

Based on the analysed spending pattern, which will be shared in the credit-card statements, SBI Cards will provide ‘offers' that would help its customers save on their spends.

“Our new customised statement will tell you where your Rs 100 is going. X per cent in grocery, Y per cent in jewellery, and so on, We want to help customers know how are they spending… where their money is going …and we have offers which are going to help them make smart savings on their spends,” Mr Sanjeev Jain, Chief Executive Officer, GE Capital Business Processes Management Services (GECBP), said.

GECBP handles the technology and processing needs of SBI Cards. The total number of SBI credit-cards issued and outstanding is about two million. Nearly 60 per cent of SBI Cards' customers are receiving e-statements (in electronic form), Mr Jain said.

Personal touch

Any analysis of spending patterns by SBI Cards may not be an industry first in India, but it does show how credit-card issuers are striving to provide better customer experience.

“We believe that we are in an industry where we should be working like an FMCG company works, and not as a finance company. We believe that our touch-points with customers are going to be extremely personal,” Mr Jain said.

Mr Kadambi Narahari, CEO, SBI Cards, said that the company was very customer-centric and plans to increase its presence in Tier-II and Tier-III cities in the coming months.

The credit-card industry in India is still at a fairly nascent stage. The exuberance seen among credit-card issuers prior to 2007-08 has now changed and customers have also become more financially savvy, Mr Narahari noted.

A period of turmoil

The last five years, since the outbreak of the global financial crisis in 2007-08, has been a period of turmoil for the credit-card industry in India. From a high of 27 million cards in 2007-08, the total number of credit-cards outstanding has now come down to about 18 million as of end October 2011, according to latest RBI data.

But SBI Cards is very bullish about the Indian market given the fact that it is still under-penetrated. “As consumerism grows, and as people become comfortable with plastic, the credit-card market is bound to grow. People are already very comfortable with plastic in terms of debit cards. The usage of credit cards probably would ride, in some sense, on that. Our idea here is to see how we can develop the credit-card market and make sure it grows in a big way,” Mr Narahari said.

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Pranab tells LIC to open branches in 18 districts in South India

Out of the 156 districts in the seven States/Union Territories in South India, 18 do not have a branch of the Life Insurance Corporation of India (LIC). Four districts do not have branches of non-life insurance companies, said the Union Finance Minister, Mr Pranab Mukherjee, at a press conference after chairing the meet with the chief ministers of south zone States/Union Territories and heads of public sector banks (PSBs) in Bangalore on Sunday.

Mr Mukherjee said he has instructed the LIC and non-life insurance companies to ensure that all districts have at least one branch or a satellite office in these districts in the coming year.

According to him, the southern region enjoys a healthy credit-deposit (CD) ratio. Tamil Nadu, Andhra Pradesh Karnataka and Kerala have shown an impressive growth of 177.2 per cent, 114.9 per cent, 74.6 per cent and 75.9 per cent. CD ratios of Pondicherry, Andaman and Nicobar, and Lakshadweep is, however, less than the 60 per cent benchmark.

Flow of credit

The overall flow of credit to the micro and small enterprises sector, which is next only to agriculture in terms of employment generation, is satisfactory, said Mr Mukherjee.

According to him, the outstanding MSE credit from PSBs by the end of March 2011 increased by 36.3 per cent against the target of 20 per cent growth.

He added that all southern States, except Andhra Pradesh, have attained the target of 20 per cent credit to the MSE sector. Except Andhra Pradesh and Tamil Nadu, all other States have achieved the target of 50 per cent credit flow to micro enterprises within the MSE sector.

He urged the State Governments to devise suitable schemes to improve credit flow.

On financial inclusion, the Finance Minister said nearly 11,114 villages, out of the 14,612 villages allotted to the southern States for provision of banking services, have been covered by the end of October 2011, which is 76 per cent of the target.

“For achieving the balance 24 per cent, we require a bit of effort on the part of the State Governments and banks,” he said.

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SBI donates vehicles under ‘Banks on Wheels' model

To further the goal of financial inclusion in Karnataka, the State Bank of India donated two ‘Banks on Wheels' to the Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) on Sunday here. Mr Pratip Chaudhuri, Chairman, SBI, handed over the vehicles to the Managing Director of SKDRDP, Dr H.L. Manjunath.

Speaking at the event, Mr A. Krishnakumar, Managing Director, SBI, said that the bank has over 100 ‘Banks on Wheels' across the country. Each of these vehicles covers 5-6 villages every week.

Self-help groups

Dr Manjunath said SKDRP, which acts as the business correspondent (BC) of SBI in three under-served districts in Karnataka — Gadag, Haveri and Dharwad, has opened over 35,000 self-help groups in the three districts. These SHGs bring in a business of about Rs 2 crore per week, he said. As part of the financial inclusion programme, 1.85 lakh small accounts have been opened, he added.

The bank's kiosk banking programme has helped cover 33 villages in these districts, pointed out Dr Manjunath.

SBI also donated a fully-equipped ambulance to Bangalore-based Rangadore Memorial Hospital.

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Sebi wants listed cos to be ethical

New Delhi: Rejecting the idea of assuming a CVC-like role of anti-corruption watchdog for the private sector, capital market regulator Sebi has said it wants listed entities to follow a nine-point disclosure norm against non-ethical business practices instead.

The Securities and Exchange Board of India (Sebi), which regulates thousands of listed companies as well as hundreds of other market entities like brokers, merchant banks and ratings agencies, has informed its board that it cannot adopt aprivate sector role similar to that of the Central Vigilance Commission (CVC) for government entities.

In a memorandum submitted to its board at its last meeting on November 24, Sebi said a CVC-like role "is not within the mandate of Sebi under the existing legal framework".

At the same board meeting, Sebi approved a new disclosure-based regime for listed companies with respect to non-ethical business practices.

As per the decision, companies would need to submit a 'Business Responsibility Report', along with their annual reports, to help assess the fulfillment of their environmental, social and the corporate governance responsibilities.

These disclosures, which Sebi has proposed to be based on nine key principles of responsible, transparent and ethical business practices, would initially apply to the top 100 companies.

Regarding the adoption of a CVC-like role in respect of activities of private sector companies, Sebi said its jurisdiction extends to listed companies in the private sector on certain matters delegated under the Companies Act.

“Further, Sebi has been established to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market as enshrined in the Sebi Act," the regulator told its board.

The matter came up for discussion in the backdrop of a proposal to Sebi by Transparency International, a global civil society organisation working against corruption, for exploring the possibility of Sebi performing a CVC-like role with respect to the activities of private companies.

The CVC was set up by the government with a mandate to inquire into offences alleged to have been committed under the Prevention of Corruption Act by certain categories of central government employees, corporations established by or under any Central Act, government companies and other entities owned and controlled by the central government.

Sebi said that Transparency International India (TII) was also working toward eradication of corruption by "bringing together relevant players from government, civil society, business and the media to promote transparency in elections, in public administration, in procurement and in business."

In a letter sent to Sebi in July, inviting the regulator to participate in a Conference on Ethics in Business, TII had suggested exploring the possibility of Sebi performing a role similar to the CVC with regard to the activities of private sector firms.

Sebi participated in the conference, held in August.

Sebi said the conference was focused on the performance of Integrity Pacts (IP), a tool developed by TII for preventing corruption in public contracting.

An IP is an agreement between a government agency and all the bidders for a public contract and lays down each parties' rights and obligations for prevention of bribery and other corrupt practices.

This tool also introduces a monitoring system with the approval of the CVC that provides for independent oversight and accountability.

Sebi told its board that it was also informed by the TII representatives about their initiatives for extending the principles of business ethics and adoption of IP by corporates in private sector in their business dealings.

Sebi also noted that the "CVC has issued various circulars emphasising the necessity of adopting IP in government organisations in their major procurement activities."

However, in view of the limited procurement activities of public sector banks, insurance companies and financial institutions, these organisations were exempted from the Ips.

Noting that Sebi, being a government organisation, was covered under the said circulars of the CVC, the board was told "... the fact remains that Sebi has only very limited procurement activities."

On the Business Responsibility Report, Sebi told its board that companies were "accountable not merely to their shareholders from a revenue and profitability perspective, but also to the larger society, which is also its stakeholder."

“Hence, adoption of responsible business practices in the interest of the social set-up and the environment are as vital as their financial and operational performance.

"This is all the more relevant for listed entities, which, considering the fact that they have accessed funds from the public, have an element of public interest involved, and are obligated to make exhaustive continuous disclosures on a regular basis," the board was informed.

The nine key principles proposed for the new disclosures include the companies' conduct and governance being based on ethics, transparency and accountability, promotion of the well-being of all employees, respect toward human rights and environmental issues, among others.

They also call for businesses to act responsibly when engaged in influencing public and regulatory policy.

Source: Financial Express

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