SBI cuts interest rate on bulk FD by 0.25% on select tenor

State Bank of India (SBI) today announced reduction in interest rate on fixed deposits of maturity up to one year by 0.25 per cent to 7.25 per cent.

It has been decided to revise downwards by 25 basis points the interest rate on bulk deposits above Rs 1 crore for the tenors 7 days to less than 1 year, SBI said in a statement.

“Accordingly, the interest rate for bulk deposits for the above tenors will be 7.25 per cent per annum with effect from June 7, 2013,” it said.

The announcement comes a month after RBI reduced key policy rate by 0.25 per cent.

The RBI lowered the short-term lending (repo)rate to 7.25 per cent from 7.50 per cent, lowest since May 2011, while retaining the CRR for banks unchanged at 4 per cent.

Another public sector lender Oriental Bank of Commerce (OBC) in May had slashed fixed deposit rates by up to 1 per cent on select maturities.

The fixed deposit rate for maturities ranging from 31-45 days has been reduced to 6 per cent from 7 per cent.

At the same time, term deposit of 180-269 days earns 0.5 per cent lower interest rate at 8 per cent from earlier rate of 8.50 per cent, while interest rate on 91-179 days is down by 0.25 per cent at 7.75 per cent.

Source: thehindubusinessline

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Canara Bank to charge Rs 112 annual fee on its debit cards

State-owned Canara Bank will levy about Rs 112 annual fee on its ATM debit cards from July 1.

The bank, which currently issues the cards free of cost, said in a circular that a need has been felt to offer the services at competitive rates in tune with "market trends".

“It has been decided to charge a nominal fee of Rs 100 per card plus applicable service tax on completion of one year from the date of issue/renewal of the card and thereafter to be charged yearly,” it said.

The current rate of service tax is 12 per cent.

The annual fee will be levied from July 1, it added.

Several other banks, including SBI, also charge an annual fee in the same range.

Canara Bank further said the annual fee will not apply to debit cards issued to customers with Canara Small Savings Account, Basic Savings Bank Account and Financial Savings Bank Account.

It said that for debit cards issue or renewed up to June 30, 2012, the annual fee would charged on July 1.

For cards issued after July 1, 2012, the fee will be recovered after 12 months.

The annual charges will be debited from primary account of the card holder by the system on due date.

In case of insufficient balance, a “hold” will be created and same will be released as and when the balance is available, the bank said.

Source: thehindubusinessline

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Moody’s puts debt ratings of SBI, ICICI, 9 others under watch

Global credit rating agency Moody’s today said it has placed some debt ratings of 11 banks, including SBI, ICICI, HDFC Bank and Axis Bank, under review because of the updating of its methodology.

The subordinated and junior subordinated debt ratings of these banks have been placed under review in the wake of the methodology update, said Moody’s Investors Services.

Other banks are Bank of Baroda, Bank of India, Canara Bank, IDBI Bank, Indian Overseas Bank, Syndicate Bank and Union Bank of India.

“The review takes place in the context of a methodology update that has changed the way Moody’s looks at the probability of support, which has led to several sub-debt ratings in multiple banking systems being reviewed simultaneously,” the rating agency said.

The agency also noted debts of those banks were placed under review that had benefited from an uplift linked to Moody’s prior assessment of systemic support in the country.

However, the agency noted that the reviews of these banks’ sub-debt ratings were not indication of any change in the affected banks’ fundamental credit quality.

“The reviews of the banks’ sub-debt ratings are not in any way related to any deterioration in the affected banks’ fundamental credit quality,” it said, but added that it needs to assess whether the Government’s likely behaviour in times of stress has changed compared to previous assumptions.

Moody’s also noted that its preliminary conclusion points to reasonable doubt over whether the status quo would survive test cases where Governments provide significant financial support to banks, particularly in a systemic crisis that puts stress on the Government’s own balance sheet.

Moody’s expects to conclude its review within the next three months.

The market did not react badly to the report and the Bankex was down just 50 bps against the broader market which was down nearly double the Bankex.

Source: thehindubusinessline

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S K Roy takes charge as LIC managing director

S K Roy assumed charge of Managing Director of Life Insurance Corporation of India.

Roy, whose name is in the reckoning for the post of LIC Chairman, joined the largest insurance company in the country in 1981.

The term of current Chairman D K Mehrotra ended on May 31 2013.

Besides, Roy other managing directors are Thomas Mathew and S Sarker.

Prior to elevation, he was head of the International Operations.

He was also zonal manager of North Central Zone and Eastern Zone of the insurance firm.

Source: thehindubusinessline

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Corporation Bank to offer housing, vehicle loans at base rate

Corporation Bank will offer housing and vehicle loans at 10.25 per cent for certain slabs from June 1. In fact, 10.25 per cent is Corporation Bank’s base lending rate.

Addressing presspersons here on Friday, Chairman and Managing Director Ajai Kumar said the “monsoon bumper offer” would be in force from June 1 to September 30.

Under this offer, housing loans up to Rs 50 lakh would be offered at a floating rate of 10.25 per cent. Loans above Rs 50 lakh would be offered at 10.50 per cent. There would not be any processing charges or pre-payment penalty, he said.

The interest on vehicle loans of up to Rs 5 lakh would be 10.45 per cent, and for loans above Rs 5 lakh and below Rs 10 lakh, 10.40 per cent.

Vehicle loans above Rs 10 lakh would be offered at an interest rate of 10.25 per cent. Asked about the reason for offering vehicle loans above Rs 10 lakh at base rate, Ajai Kumar said many people were going for vehicles in that range. Earlier, the bank thought of fixing it at Rs 25 lakh. “Then we saw that many people go for vehicles in the Rs 10 lakh range,” he said.

The bank was expecting to get fresh business of about Rs 4,000 crore during the ‘monsoon bumper offer’ period, he said.

Stating that retail lending was a focus area, he said retail credit had registered 39 per cent growth during 2012-13.

SB ACCOUNTS

Ajai Kumar said the bank had launched a savings bank (SB) account called ‘Corp Saral Plus’.

Targeted at the common man, he said the customer did not have to maintain a prescribed minimum or average balance in the account. In addition, the customer would be offered a personal accident insurance of Rs 5 lakh for a fee of Rs 50 per annum, he said.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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