Citi’s Pandit gets $15-m pay package for 2011

Citigroup’s India-born CEO, Mr Vikram Pandit, has received nearly $5 million (about Rs 75 crore) as his compensation for 2011, as he got his first cash bonus in about four years at the global banking giant.

According to a regulatory filing by Citi, Mr Pandit’s pay package for 2011 included a salary of $1.67 million, a cash incentive of $5.33 million and stock options valued at $7.98 million, totalling to $14.98 million.

This is the first time Mr Pandit has got a bonus at Citi and had also got only a token salary of one dollar for 2010. Soon after taking charge in December 2007, Pandit had also decided to forego his cash bonus at the bank.

“The committee awarded annual incentive compensation, in addition to salary, to Pandit for the first time in four years in a manner commensurate with his responsibilities and the success of his implementation of Citi’s long-term strategies,” Citigroup said.

Mr Pandit had pledged in 2009 to receive an annual salary of one dollar until the struggling Citigroup returned to sustained profitability. Massive losses during the financial crisis had forced the bank to take $45 billion in US Government bailout funds.

Citigroup reported earnings of $11.1 billion in 2011, besides, the bank has posted eight consecutive quarters of profitability. In 2010, the bank’s net income was $10.6 billion in 2010 against a loss of $1.6 billion in the previous year.

“Pandit has led Citi’s return to profitability and has positioned the company for future growth. His numerous accomplishments are reflected in the company-wide achievements.

“... Pandit has championed in multiple forums Citi’s mission to serve clients and stakeholders through Responsible Finance — conduct that is transparent, prudent and dependable,” the company said

“He has led Citi as it has achieved well-managed risk and controlled growth. Citi reduced its exposure to European markets significantly throughout 2011.

“In the US mortgage business, risk controls were enhanced and the business executed innovative loss mitigation strategies to improve asset quality. The consumer businesses took action to tighten unsecured underwriting criteria in emerging markets,” it added.

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Banks expand safe deposit lockers to keep gold

A huge demand for safe deposit lockers for gold, prompted by a spate of thefts in south Indian cities, is driving banks to increase storage in their branches.

With gold consumption continuing unabated despite an escalation in price, pressure is on banks to arrange lockers. "Nobody wants small lockers. Everyone wants medium or large lockers. Earlier, only corporate houses sought large lockers," said Gopal Gusain, the Chennai circle head of PNB.

He said the bank was expanding strong rooms to accommodate more cabinets. "We are doubling the space from 100 sq ft wherever possible. We are bringing in innovation in cabinet sizes too. Instead of a standard size, the cabinets are getting cutomised," he said.

Safe deposit lockers have always been in short supply. But incidents of thefts in the past months in Tamil Nadu and Kerala are forcing more people to opt for safe deposit lockers in banks. "On an average, over 30% of investors are seeking large lockers," said Roopa, a senior manager with Andhra Bank in Hyderabad.

Locker rent has not been raised much as banks have not considered it as a means of revenue. The annual rent ranges from Rs 800 to Rs 2,000 or more depending on the size. Although the storage is used to store documents, title deeds and other precious metals, gold ornaments are the main items that are kept in lockers, bankers say.

Source: EconomicTimes

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BoB, Union Bank await policy review cues to decide on rate cut

Public sector lenders Bank of Baroda (BoB) and Union Bank of India today said they would take a call on slashing interest rates in specific segments once the RBI has announced its mid-term policy review.

"We will take a call after the RBI's policy review. At the moment, liquidity is tight and perhaps one will like to assess the overall situation before taking a decision [on slashing rates]," Chairman and Managing Director of Bank of Baroda MD Mallya said.

He was speaking on the sidelines of the fourth Annual Credit Information Conference organised by Credit Information Bureau (India) Ltd (CIBIL).

Mallya also said that unless the cost of raising resources came down, it would be difficult to pass on the benefits to end-users.

The chairman of Union Bank echoed similar sentiment.

"We will have a look at our Net Interest Margin [NIM]. If it improves substantially, we will look at [rate cut] in some of the products. Based on that, we will take a call," Chairman and Managing Director of Union Bank of India, MV Nair said.

Union Bank of India was the first bank to slash its base rate by 10 basis point to 10.65% after the policy review by the apex bank on December 16, 2011.

Referring to tight liquidity situation and expectation from upcoming mid-term review, Mallya said he was expecting some relaxation.

"Liquidity is by and large tight in the last few weeks. May be with the advance tax payout, liquidity will remain tight for sometime. Market expects a CRR [cash reserve ratio] cut..Let's see," Mallya said.

He, however, declined to speculate on the quantum of CRR cut likely to happen in the next policy review.

At present, banks are borrowing around Rs 1.5 lakh crore a day from the repo window, which is much above the comfort level of the central bank of around Rs 60,000 crore.

Source: Business Standard

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Loans to fisherwomen: Vijaya Bank forms 300 joint liability groups

Vijaya Bank's Mangalore region has formed 300 joint liability groups for disbursing loans to fisherwomen. Till now, around 2,800 fisherwomen in two districts of coastal Karnataka have taken loans under this scheme.

Mr Sudhakar Shetty M., Deputy General Manager, said that the bank has disbursed around Rs 14.9 crore to 2,804 members of 300 such groups in Dakshina Kannada and Udupi districts.

Asked about the recovery from these groups, he said as of now it is good because of peer pressure from the group members.

Each member of the group is given a loan of Rs 50,000 at 3 per cent. A group can have at most 10 members.

Ms Padmavathi, a member of Nandadeepa group from Mangalore, said that her group members are happy with this format, as earlier they used to take loans from private moneylenders.

Mr Ashok Amin, a trader in a local fish market who coordinated the formation of these groups with fisherwomen, said this facility has helped them in carrying out operations without difficulty.

Earlier, they were paying around Rs 200 as interest for a Rs 1,000 loan from private moneylenders.

Ms Vanajakshi, a member of Kousalya group, said that they are getting timely money for selling fish in the local market.

Since the price is good for fish, some of them could save for their families.

However, she demanded that the loan limit be increased to Rs 1 lakh a person.

However, the bankers say that to get loans at 3 per cent interest rate the upper limit is Rs 50,000.

vinayakaj@thehindu.co.in

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Karnataka Bank to open 20 financial inclusion branches

Karnataka Bank is likely to open 20 financial inclusion branches by March 2013. Of them, three branches will be opened by this month-end.

Mr P. Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, told Business Line that the bank opened its first financial inclusion branch at Kairangala village in Dakshina Kannada district on Wednesday. Mr Ananthakrishna, Chairman of the bank, inaugurated it at Kairangala village.

The second such branch will be opened at Horanadu village in Chikmagalur district on March 12. Two more branches – one in West Bengal and another in Andhra Pradesh - will be opened by this month-end, he said.

The plan is to open around 20 brick-and-mortar financial inclusion branches in the country by March 2013. A majority of them will be opened in Karnataka, he said.

Financial inclusion branches will be opened in the villages, where the population is above 2,000. The branch will take care of the entire requirement of the village such as credit disbursement and opening of accounts, Mr Bhat said.

To a query on the implementation of financial inclusion programme by the bank till now, Mr Bhat said Karnataka Bank was allotted 80 villages in the country. Of them, 69 villages are in Karnataka.

The existing 15 rural branches are implementing the financial inclusion programme in some locations in these 69 villages. The remaining villages are being covered by business correspondent model.

Asked about the response to the financial inclusion programme, he said the bank has opened more than three lakh no-frill accounts under this programme.

vinayakaj@thehindu.co.in

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