Syndicate Bank briefs customers about e-products

Syndicate Bank had recently conducted a uniform customers' meet across over 2750 of its branches across the country.

As a part of this programme, the NS Road-Kolkata branch of the Bank had organized a meeting on May 23 to brief its customers on the performance highlights of the bank for the financial year 2011-12. At the customer meet, the bank educated its customers about the various products and offerings like SyndArogya, UniHome Care, UniStudy Care Policies, the advantageous features of NEFT and RTGS and the new initiatives for e-products.

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SBI plans $1 billion medium-term notes issue by August

State Bank of India plans to come out with a medium-term notes (bonds) issue worth about $1 billion before August.

Talking to media persons on the sidelines of a CSR event at the Bangalore circle office here on Monday, Mr Pratip Chaudhuri, Chairman, SBI, said that the bank has time till August to come out with a medium-term notes issue.

On the size of the issue, he said whenever SBI has gone to the markets in the past, it has been for about $1 billion.

“The issue is for our overseas operations,” he said, adding that preparation for the issue was going on and the bank has time till August. The exact timing of the issue will be decided at a “strategic moment”, said Mr Chaudhuri.

SBI has a tier-I capital adequacy of 9.67 per cent and its current year profitability is “expected to be good”, he said.

“We are not stressed for capital,” he added.

Merger moves

On the merger of associate banks with SBI, he said that the economic rationale for merger was “as strong as ever”. But mergers “require capital, require funding, and so it would receive some attention”, he said, adding that the bank will decide on it during the year.

On the impact of rupee depreciation, Mr Chaudhuri said that the importing customers have been impacted, but exporters have been on an advantage. Remittances from Indians abroad into NRI accounts have gone up, he added.

Lending rates

On lending rates going down further, he said any interest rate reduction would depend on CRR cut by the RBI. “More the RBI cuts the CRR, greater will be the ability of the banks to reduce interest rates. We see a direct correlation between the level of CRR and the level of interest that banks have to charge,” he explained.

anju@thehindu.co.in

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Current account deficit will see a dip in the short term: Kotak Bank chief

Current account deficit will see a dip to about 3 per cent in the short-term owing to falling crude oil prices and drop in gold imports, said Mr Uday Kotak, Executive Chairman and Managing Director, Kotak Mahindra Bank.

Addressing a banking and financial services (BFSI) conference here, Mr Kotak said the rupee is making the Indian companies more competitive. There is no significant spread of credit problems to different sectors of the industry.

“Any further policy measure will be derivatives of the currency movement,” he added.

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Axis Bank ties up with Bahrain bank for NRI remittances

Private sector lender Axis Bank announced its tie up with Ahli United Bank B.S.C., Bahrain for remitting money from Bahrain to any person in India.

The agreement will provide money transfer services to NRIs in Bahrain using the internet banking platform MyE-Bank.

Such remittances would be processed and disbursed to the intended beneficiaries holding an account with Axis Bank or any of more than 83,000 NEFT-enabled branches of over 100 other banks in India.

There is no limit on the number of transactions that can be initiated under this arrangement.

Currently, the customers can initiate transactions up to Bahraini Dinar 5,000 ( approximately Rs 7,31,950) per day.

While transactions pertaining to Axis Bank accounts would be credited instantly, the ones pertaining to non-Axis Bank accounts would be processed on real time basis and the final credit to beneficiary accounts shall take 1 to 2 working days depending on the respective beneficiary banks.

beena.parmar@thehindu.co.in

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Unitech accuses Deutsche Bank of selling ‘unsuitable' interest swap

Real estate player Unitech has become the latest company to seek compensation in the UK over the sale of a controversial type of interest rate derivative product designed to protect firms against rate rises, according to reports.

Unitech has accused Germany's Deutsche Bank of selling it an unsuitable interest rate swap, and not fully explaining the risks of the deal in a lawsuit lodged in the Queen's Bench Division of London's High Court of Justice this month, according to Bloomberg News.

Unitech alleges that Deutsch Bank “knew, or appreciated, that it was likely to make significant amounts of money,” from the interest rate swap on a $150-million loan deal, according to the report.

In the three years till 2010, $23.5 million worth of payments were made showing that the “transaction was not a suitable hedge.” According to the report, Deutsche Bank had previously sued Unitech claiming it was due $11 million under the swap contract.

Both Unitech and Deutsche Bank declined to comment on the story.

Claims stacking up

Claims over controversial interest swap deals have been stacking up in both Europe and the US.

Unitech's case comes a week after Britain's market regulator the Financial Services Authority said it was examining the interest rate swaps sold to thousands of small and medium-size businesses.

“We have requested extensive information from the largest providers of these products including the volumes of sales, the level of complaints, the ways in which the products were sold and the material that was provided to purchasers,” according to the FSA.

The swaps were also discussed at a House of Commons Treasury Select Committee hearing last week.

Earlier this month, Unitech reported a 98 per cent drop in consolidated net profit for the quarter ending March in what it described as “a very challenging year,” forecasting that 2012-2013 would be “significantly better”.

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