Dept of Posts to move Cabinet note to apply for bank licence

 The Department of Posts will move a Cabinet note in order to apply for a banking licence by the stipulated deadline of July 1, a senior official has said, even as a top Finance Ministry went public with doubts over the efficacy of the post office being converted into a bank.

“We are moving a cabinet note now and after that we will be applying for the licence. After the cabinet note, we will go ahead with setting up the bank,” Postal Services Board’s member, planning, Suneeta Trivedi, told PTI here.

Trivedi asserted that the Department will be making the application by July 1, which is the last date set by the Reserve Bank for receiving applications.

The department of Posts has engaged consultancy firm Ernst & Young for helping it at the application stage by creating the “whole concept” of the bank and has already gathered all the know-how to enter the fray.

However, Department of Financial Services Secretary Rajiv Takru seemed to be not so much interested at the prospect of India Posts entering the banking fray.

There is a lot more to banking than merely having the reach and opening savings accounts, he told reporters, adding that it also involves very complex things at the back end and seemed to suggest that a Japan-like case, where the postal department has a bank, may not work in the country.

When asked about the same, Trivdei said, “We have worked out all on know how, about everything. There is nothing like that” and added that there is no rethink on the part of the Postal department.

Sector watchers suggest that if financial inclusion is the ultimate aim in granting new licences in this round, the entry of the department will be highly beneficial to the agenda being pursued by the Reserve Bank and the Government.

Source: thehindubusinessline

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Yes Bank director election drama in suspense

The contentious appointment of three directors to the board of Yes Bank is in suspense with it going to ballot at the shareholders meet, whose result will be declared on Monday.

But it is believed that the voting strength is in favour of the appointment will ensure that Diwan Arun Nanda, Ravish Chopra and MR Srinivasan. Although promoters' voting rights are capped at 10%, the presence of a lot of staff and shareholders loyal to the management might have voted in favour of the appointments.

Even as results are awaited there are murmurs that there are disputes about the way it is proceeding which may lead to the outcome getting challenged in the court.

Reacting to these murmurs M.R. Srinivasan, chairman, YES Bank said,"The voting process and the subsequent counting process; is proceeding in the fullest conformity with the instructions of the Chairman of the Meeting, and in consonance with the General meeting guidelines as contained in the Articles of Association. The ongoing counting process is being conducted by the two appointed scrutineers and Karvy - the Registrar of YES BANK. On a request from Mrs. Madhu Kapur, as a special case the Chairman has permitted the presence of her authorized representative - Mrs. Shagun Gogia to be an observer of the complete process, to provide necessary comfort."

"YES BANK being a Public Trust institution, kindly ensure that there is responsible reporting on the subject," he said.

Rana Kapoor did not comment on the matter and the media was barred from covering the shareholders'event.

``They want their right to nominate a director on the board. Madhu Kapur is not in favour of the appointment of directors so she demanded a poll,'' said one of the proxis of Madhu Kapur, wife of the last Ashok Kapur, the co-founder of Yes Bank. ``Few of the other shareholders also asked for a poll.''

The appointment of three directors is sought to be stalled by the Kapur family demanding consultations as provided in the Articles of Associations of the bank. The representatives of Kapur allege that the other founder and Chief Executive of the bank Rana Kapoor is not consulting them on appointments.

``Ashok Kapur, like Rana Kapoor, is termed as an Indian partner in the bank documents,'' said an associate of Kapur at the venue of the shareholders' meet but did not want to be identified by name. ``The articles of association gives Ashok Kapur family equal right on appointment of directors.''

Two shareholders questioned the CEO Kapoor on the ongoing family dispute, but there was no answer, said a shareholder.

Source: economictimes

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SBI authorised to file recovery suit against Kingfisher Airlines

Lenders plan to open a new ‘recovery’ front to realise their dues aggregating about Rs 7,000 crore from the defunct Kingfisher Airlines. They have authorised the State Bank of India to file recovery suit against the airline in the debt recovery tribunal.

The lenders have also given their consent to SBI to proceed against the guarantors of loans given to the Vijay Mallya-promoted KFA, said a banker privy to the consortium meeting held last week.

This development comes even as the 17-bank consortium, led by SBI, has sold off shares of Mangalore Chemicals and Fertilisers Ltd pledged by the airline’s promoter. The consortium is also realising its dues by selling the pledged United Spirits Ltd (USL) shares in tranches. The sale of USL shares by banks started in March even as the open offer by Relay B.V., an indirect wholly-owned subsidiary of Diageo Plc, for United Spirits’ equity shares was on.

The open offer, which closed on April 26, met with tepid response from public shareholders as the offer price was lower than the ruling market price. A total of 58,668 shares were tendered by the public shareholders of USL and accepted by Relay B.V. as against the target of acquiring up to 37,785, 214 equity shares, according to USL’s filing with the BSE. It may be recalled that the Kolkata-headquartered United Bank of India has independently filed a winding-up petition in the Karnataka High Court against United Breweries Holdings Ltd. The public sector bank moved against UBHL as it stood guarantee for loans taken by KFA.

So far, banks have realised about Rs 1,000 crore from KFA by selling the low-hanging fruits — pledged Mangalore Chemicals and Fertilisers Ltd and USL shares.

Bankers say they are bracing for a legal challenge as making recoveries from the pledged immovable properties such as Kingfisher House in Mumbai and a villa in Goa as well as pressing guarantors for making good the guarantees could prove an uphill task.

ramkumar.k@thehindu.co.in

Source: thehindubusinessline

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Yes Bank holds paper ballot for directors appointment after dissent

Private sector Yes Bank was forced to resort to paper ballots for appointment of three new directors on its board following dissent from one of the founding families.

The Annual General Meeting (AGM) of Yes Bank was to approve appointment of Diwan Arun Nanda, Ravish Chopra and MR Srinivasan as wholetime directors by voice vote.

Three directors were sponsored by bank MD & CEO Rana Kapoor -- who holds 13.72 per cent stake in the bank -- but were opposed by Madhu Kapur, wife of late Ashok Kapur and co-founder of Yes Bank.

Madhu Kapur, who holds 12 per cent stake in the bank, wants a say in board appointments.

Shareholders attending the AGM said when the subject was taken up, Kapur opposed the move.

Following this, members were asked to cast paper ballots and results of the same will be known in 48 hours, they added.

An Yes Bank spokesperson refused to comment on the issue. The events come a day after Bombay High Court turned down a petition filed by Madhu Kapur objecting to the holding of AGM on the ground that they had not been consulted before appointment of directors.

According to shareholders present at the meeting, Kapur expressed dissent against the appointment of the directors due to which the AGM held at the bank's headquarters Nehru Centre, had to carry out the voting.

Ashok Kapur, who died in 26/11 terror attacks at the Oberoi Hotel in Mumbai, had co-founded the bank with his brother-in-law Rana Kapoor and Rabobank in 2004.

As per sources, the feud between families of two founder members had started in 2009 after the board of Yes Bank declined to induct Shagun Gogia, the daughter of late Ashok Kapur as a nominee board member.

The board of the bank had declined to induct Gogia saying that she might not be eligible as per 'Fit and Proper' criteria laid down by the Reserve Bank, sources said.

However, one of the close associates of Shagun Gogia, said: "It is for the RBI to decide if Shagun is 'fit-and-proper' or not. Rana Kapoor cannot decide this unilaterally."

When pointed out that if the bank board does not pass her name, then it cannot be sent to the RBI, Gogia's close associate said, if the board does not pass her name, then they will have to approach the High Court.

Meanwhile, one shareholder attending the AGM  said that the issue should be sorted out as soon as possible, which otherwise would affect the reputation of the bank.


Source: economictimes

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T.M. Bhasin re-elected as IBA Deputy Chairman

T.M. Bhasin, Chairman and Managing Director of Indian Bank, has been re-elected as Deputy Chairman of Indian Banks’ Association (IBA) for 2013-14 by the IBA managing committee.

The decision was taken at IBA’s 66th annual general meeting.

Bhasin will also be the Chairman of IBA’s Human Resources Committee and chair the ongoing wage negotiations with the United Forum of Bank Unions for the 10th bipartite discussions.

Source: thehindubusinessline

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