IDFC Alternatives raises Rs 750-crore realty fund

IDFC Alternatives, a wholly-owned subsidiary of IDFC Ltd, raised its first fund of Rs 750 crore focused on the residential sector in India.

The maiden real-estate fund, called the IDFC Real Estate Yield Fund, will invest Rs 60-80 crore and will target gross returns of 22%. The four-year (extendable by one year) close-ended private equity fund will invest in projects across six cities. "This is our first real estate fund and we feel confident about its performance," said MK Sinha, managing partner & chief executive officer, IDFC Alternatives.

IDFC Alternatives raised the money from domestic investors within a span of 10 weeks.


Source: Economic Times

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Uco Bank sells bad loans worth Rs 1500 crore to clean up books

State run Uco Bank said it has sold bad loans worth Rs 1,500 crore to an asset reconstruction company to clean up its balance sheet before the end of the fiscal.

This is nearly five-folds than what Uco had sold in the third quarter -- Rs 330 crore.

Banks are rushing to sell off bad loans to protect themselves against the higher loan loss provision rule that take effect in March 2015.

"High non performing assets is a concern area for banks," Uco chairman and managing director Arun Kaul said. "Banks are proxy to the economy. So, there is stress in banks' asset quality as the economy is facing slow growth," he said at an event in Kolkata, organised by MCC Chamber of Commerce & Industry.

Earlier, the Kolkata-headquartered lender announced that it was looking to sell Rs 1900 crore of bad loans during the fourth quarter.

"We expect the NPA ratios to improve in the fourth quarter," Kaul said.

Its gross NPA ratio was 5.20% as on December, compared with 5.53% a year back while net NPA ratio fell to 3.06% from 3.32%.

Kaul said he expects net interest margin to be a little less than 3% for the quarter.


Source: Economic Times

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West Bengal’s savings scheme for poor in limbo as SBI demands higher fees

West Bengal chief minister Mamata Banerjee's flagship savings scheme for the state's poor depositors is yet to gain momentum with State Bank of India, the country's largest bank, demanding a higher fee for services. The plan is aimed at protecting the poor from falling prey to pyramid schemes such as those offered by the now-defunct Saradha Group.

The state has invited banks to take part in the programme to act as a payment gateway, but only United Bank of India has signed up thus far. State-owned SBI wants Rs 63 for every transaction but that's not acceptable to West Bengal Infrastructure Development Finance Corporation, the agency implementing the scheme, said people aware of the developments.

United Bank, coincidentally struggling with a mountain of bad debt, gets Rs 25 per transaction. "We are neither confirming nor denying it," SBI chief general manager Sunil Srivastava said when asked for comment. A senior WBIDFC official said the scheme would not be viable if banks charge more than Rs 25 per transaction. Both SBI and WBIDFC are still negotiating the rate.

State finance department officials have asked SBI chairman Arundhati Bhattacharya to look into the issue, sources said. The state's wholly owned subsidiary launched the safe savings scheme, or 3S, in November last year to offer an alternative investment avenue to small depositors and protect them from being deceived by the spuriously high returns offered by pyramid schemes.

Saradha went bust last year affecting 17-lakh depositors who had deposited an estimatedRs 2,000-3,000 crore expecting their money to multiply. WBIDFC, a non-banking company registered with the Reserve Bank of India, has engaged 30,000 agents to mobilise deposits. Depositors are supposed to visit a designated bank's branch and open nofrills accounts with minimum customer identification formalities.

At the same time, the depositors will submit a request to the bank to transfer the amount to WBIDFC. WBIDFC has mobilised about Rs 2 crore so far of the Rs 250 crore it needs to make the scheme viable, officials said. Depositors are paid 9 per cent-9.25 per cent interest on their money.

The scheme also has a financial inclusion angle — it aims to improve banking access in the state, where branches cater to nearly 14,000 people each on average against RBI's prescribed limit of 10,000.

Kolkata-based Allahabad Bank and Uco Bank refused to participate in the plan. However, several other banks have shown interest in joining the savings scheme to boost fee income from a state where loan growth remains modest in the absence of large industries.


Source: Economic Times

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SBI country’s first bank to set up payment gateway

E-commerce in India is set to get a big boost with the country's largest lender State Bank of India setting up its payment gateway - SBI ePay — with the objective of enrolling government entities and municipal corporations as well as small traders in the online marketplace.


SBI is the first bank in India to start its own online aggregator services. Besides the payment gateway, which will enable merchants accept payment by net banking, credit card, debit card and mobile banking, SBIePay is also in the process rolling out an electronic bill presentment and payment platform (EBPP) and IVRS phone payment. EBPP enables a payment provider to generate the bill and receive payments while IVRS is an interactive voice response system that enables merchant receive credit card payments over the phone.

"We will be brining in new merchant categories with a special focus on government merchants such as, central, state departments and municipal corporations," said a senior official with the bank's payment services vertical. He added that the payment gateway service will come with a dashboard site which will provide analytics for banks and merchants to help them boost their business.

SBI is a relative late entrant in the payment gateway space. Existing players include: Times of Money, IndiaIdeas (BillDesk), CCAvenues, TechProcess Solutions, E-Billing Solutions (EBS), Atom Technologies, and new aggregators like PayU, Citrus, Emvantage.

Source: Economic Times

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IBA wants free use of other-bank ATMs to end in metros

Industry lobby Indian Banks Association (IBA) said it has requested RBI to allow banks to charge customers in the metros to pay for accessing ATMs of other banks but continue with the current cap of five free transactions a month for rural customers.

"We have made our recommendations to the RBI that at least in the metros, the current five free usage of other bank ATMs be withdrawn so that every transaction on other bank ATM is chargeable. At the same time, the present set up be continued in rural areas," chief executive MV Tanksale told reporters here.

The issue of charging customers for ATM usage has become into a very vexed one, ever since banks were asked by state governments to place armed guards at all the ATMs after a brutal attack on a customer in Bangalore last November.

According to banks, the overheads will make operations of ATMs unfeasible and hence, they have been struggling to come up with a solution for over three months now, without much of success.

The IBA says banks are losing Rs 400 crore a month because of the excess security requirements at 1.4 lakh ATMs.

A slew of measures, including raising the inter-bank charges and limiting the number of all free transactions at five per month, have been mooted.

Currently, a customer can enjoy unlimited free transactions at his own bank's ATMs and is allowed five free transactions a month in other banks' machines.

Irrespective of it being a free transaction for the customer or not, a bank has to pay the other a fee of around Rs 15 for every transaction done at the other bank's ATM.

Meanwhile, when asked if banks have written to the Reserve Bank to extend the mark to market loss amortization by two more quarters, Tanksale said replied in the affirmative but did not confirm the time period for which the relief has been sought.

"We have certainly requested. It is being examined," he said. Fearing the heavy losses booked by the banks after the July liquidity sucking measures, the RBI had allowed the banks to book their losses spread across four quarters in order to protect the bottomlines.

On the wage revision issue, Tanksale said the IBA is scheduled to hold a core committee group meeting with the bank unions.

He, however, reiterated that there is no change in the stance of the banks and they continue to offer a 10 per cent hike as against the demand for 15 per cent.

Source: Economic Times

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