South Indian Bank Q3 net up 32%, eyes Rs 1,000 cr QIP

South Indian Bank has registered 32% jump in net profit at Rs 280 crore for the third quarter ended December 31 and plans to raise Rs 1,000-crore through qualified institutional placement (QIP).

"We have registered the highest-ever quarterly profit at Rs 279.70 crore and are looking at raising Rs 1,000 crore through QIP issue to fund our expansion plans over the next three-year period," South Indian Bank CEO and Managing Director VA Joseph said.

"Our capital-raising plan of course depends on the revival of market condition," Joseph said.

The bank's total business increased 27.49% to Rs 58,883 crore in Q3 FY12, over the same period last fiscal. The deposits have gone up by Rs 6,836 crore from Rs 26,998 crore to Rs 33,834 crore. The advances increased by 30.55% at Rs 25,050 crore in Q3 FY12.

The bank's CASA increased from Rs 6,045 crore in Q3 last fiscal to Rs 7,280 crore, up 20.43%.

SIB said it earned Rs 2,754 crore during the 9-month period, as against Rs 1,879 crore in the previous year, a growth of 46.61%.

The capital adequacy ratio of the bank stood at 12.03% (under BASEL II standards) against the regulatory requirement of 9%.

The robust growth in business, coupled with low NPA enabled the bank to attain the present level of performance, Joseph said.

Its gross non-performing asset (NPA) ratio improved from 1.33% to 0.94% sequentially, while the net NPA ratio changed little at 0.24% during the three months period.

The bank is looking at 25% growth in FY12 and plans to increase the number of branches to 700 and ATMs to 625 by fiscal-end.

Source: Business Standard

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Accounts can not be closed for non-compliance of KYC norms without notice

NEW DELHI: A Delhi consumer forum has ruled that a bank closing its customer's account without serving him notice seeking his various particulars as per the banking sector's Know-Your-Customer (KYC) norms, is liable to be held guilty of rendering deficient service.

Delhi's Central District Consumer Disputes Redressal Forum, headed by its president B B Chaudhary gave the ruling while holding Karol Bagh branch of the State Bank of Bikaner and Jaipur guilty of rendering deficient service to one of its customers, whose bank account it had closed without serving a due notice to him, seeking his particulars.

It also asked the bank to pay Rs 15,000 as compensation within 30 days to complainant R N Prabhakar, a lawyer, for causing "harassment, pain and mental agony" to him.

"We hold that the act of the bank amounts deficiency in service. It led to harassment, pain and mental agony to the complainant," the forum said.

The forum said the bank, itself, did not follow the RBI guidelines, published in a news daily, on the KYC by closing the account of the lawyer on its own.

Rather, it cleared two cheques of the complainant before closing his accounts without giving him a notice, it said.

"It was not appropriate on its part to close the account or not to honour the cheque of the complainant by taking shelter under the public notice," it said.

Prabhakar, in his complaint, had alleged that the bank dishonoured a cheque issued by him in favour of Airtel without any valid reason. He also also sought that his complaint be treated as a public interest litigation.

Source: EconomicTimes

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SBI trims housing loan processing fee

Country's largest lender State Bank of India has halved the home loan processing fee, a move which could be followed by other public sector lenders in the coming days.

The bank has slashed processing fee on home loan above Rs 75 lakh to Rs 10,000 from Rs 20,000, while for loans between Rs 30-75 lakh, the fees has been reduced to Rs 6,500 from Rs 10,000 earlier, a senior SBI official said.

The new fee structure is applicable starting January 11, the official added.

The official, however, added that the processing fee for loans below Rs 30 lakh continues to be 0.25% of the loan amount.

The reason for slashing fee is to promote home loan products of the bank, the official said.

Competitors like ICICI Bank and Axis Bank charge 0.5% of the loan amount for home loans -- both floating and fixed both.

At the same time, Bank of Baroda levies a charge of 0.4% of the loan amount or maximum limit of Rs 50,000, while Bank of India charges Rs 20,000 flat fee for housing loans between Rs 25-75 lakh.

According to another public sector bank official, banks could offer some incentive to promote home loan product above Rs 30 lakh as there has been some moderation in this segment.

It could be in the form of lowering of fee or some concession in rates if interest rates don't come down by the end of the current fiscal, the official added.

In other retail loans, particularly auto loans, some banks are offering concession in rate as well as waiving of processing charges to garner higher share.

Some bankers also feel that the processing fee may go up in the medium term. However, charges are likely to remain stable for the next couple of months.

"Since most of the banks have done away with pre-payment charges, I feel the processing charge in the industry as a whole would tend to go up in the medium term if not in the short run," Axis Bank Head (consumer lending and payments) Jairam Sridharan said.

Last year, housing finance regulator National Housing Bank had directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers. Subsequently, many banks announced abolition of such charges.

SBI, Bank of Baroda, Bank of India, Punjab National Bank are some banks which scrapped pre-payment charges.

Source: Business Standard

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IRDA asks agent training institutes to register as cos

To eliminate non-serious players, the insurance regulator IRDA has asked all existing agent training institutes (ATIs) to get themselves registered either as a company or trust by June.

“Existing accredited entities (ATIs), other than the companies/ societies, trusts, have to convert themselves into companies, societies or trusts within 6 months...,” the IRDA said in a circular.

The Insurance Regulatory and Development Authority (IRDA) has said that only those entities with more than three years of experience in training for financial or insurance products will be eligible for accreditation as institutes for training insurance agents.

The initial approval will be for a period of three years and consideration of further renewal for next three years.

Further, ATIs are required to maintain the attendance record by way of biometric system and put in place an effective mechanism for the same by April 1, 2012.

These entities play an important role in training agents for selling insurance products as the sector is battling the curb the menace of mis-selling. Mis-selling refers to sale of a financial instrument without fully disclosing the pros and cons of it to an investor.

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DCB defers Rs 150 cr QIP plan to June

Sloppy market conditions have forced Development Credit Bank (DCB) to defer its QIP issue to next fiscal and the small private lender is now hoping to raise up to Rs 120 crore in the first quarter of FY 13.

“We should do a QIP (qualified institutional placement) of up to Rs 120 crore by June... the market conditions have not been so good,” DCB Managing Director and Chief Executive, Mr Murali Natrajan said.

In January, last year, the bank had announced plans to raise up to Rs 150 crore through a QIP issue by August.

Mr Natrajan said the exact timing of the issue depends on the market condition and added it is unlikely that the issue will happen this fiscal.

The bank’s capital adequacy stood at a healthy 13 per cent as of the December quarter with the core tier—I at 11.15 per cent. Post—fund infusion, tier—I will go up to 14 per cent, he said.

Apart from raising its already healthy capital adequacy, it will also help dilute the promoter Aga Khan Foundation’s holding in the city—headquartered bank in compliance with the Reserve Bank’s requirement.

The central bank rules do not allow more than 10 per cent holding in a private sector by any single individual or the promoter group entity. The QIP issue will ensure the promoter holding will come down by up to 3 per cent from the present 23.07 per cent, Mr Natrajan said.

The promoters of DCB Bank, which changed into a private sector lender from being a cooperative one, has been asked by the Reserve Bank of India (RBI) to bring down its stake to under 10 per cent by March 2014.

Post—infusion, the bank will not be requiring any fresh capital for up to two years, he said.

The bank’s net profit had almost doubled to Rs 15.6 crore for the December quarter against Rs 8.2 crore in the year—ago period.

The bank, which has 82 branches, has charted a roadmap to increase this number to 150 in three years and is on its way to add 10 more before the end of the current fiscal, he said.

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