SBI's operations disrupted in Kashmir valley due to floods

Banking operations in as many as 66 branches of State Bank of India in Kashmir valley were severely affected following heavy floods in Jammu and Kashmir where massive rescue operations are underway to help out trapped people.

With no communication link functioning with the branches in the valley, SBI is hoping to restore banking operations once the water level recedes.

"Banking operations in Srinagar are completely disrupted due to floods. We have 66 branches in the valley. Out of total branches, minimum of 60 are supposed to be closed, while there is no connectivity with rest of branches which are located on the outskirts, so we are not sure whether they are functioning," a senior official of SBI told PTI today.

SBI, which has 66 branches in the valley spread across 10 districts, generates total business of more than Rs 3,000 crore in Kashmir valley, he said.

The official said the banking operations could only be restored when water level recedes, adding that communication link could not be established with the affected branches.

"Unless flood water level drops, banking operations cannot be restarted. But we have a back up team in place there which will start working towards restoring operations as and when water level comes down," the official added.

As far as banking operations in Jammu is concerned, SBI official said banking operations were normal.

"One branch was affected in Udhampur area but that has also started functioning from today," he informed.

SBI has a network of 177 branches in Jammu and Kashmir.


Source : Economic Times

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State Bank of India launches multi-currency travel card

State Bank of India and MasterCard announced launch of a multi- currency foreign travel card that will be available through identified State Bank branches. The card is available in both retail and corporate variants will allow the consumers to pay conveniently in multiple currencies. It will initially be available in four currencies—USD, GBP, Euro and SGD and eventually be made available in all major currencies.

It's a prepaid and reloadable card with 24/7 access to balance and transaction history online or via the dedicated customer service centre. The card also gives free access to exclusive benefits and offers around the world, which are unique to MasterCard members.

Speaking on the launch, S K Mishra, Deputy Managing Director (Corporate Strategy and New Business) State Bank of India said, "Outbound travel from India is growing at a rapid pace, with 35 million people travelling outside India. This is expected to grow to 50 million in 2020. Consumers expect smart payment products to address their travel needs and Multi-currency Foreign Travel Card provides customers both ease and choice."

Presently, the card can be issued, reloaded and refunded at 100 selected branches of Mumbai, Delhi, Chennai and Bangalore Circles and can be loaded in any or all of the four currencies. "The number of branches and currencies will be increased going forward," added Mishra.

MasterCard's Multi Currency Card is one of the most advanced multi-currency programs in India. While the opportunity and need was apparent, our next step was to find the right partnership for this project. SBI was a natural choice, keeping in mind their strength and capabilities to provide this initiative with the required back-end support and infrastructure," said Ari Sarker, Divisional President, MasterCard Worldwide, South Asia.

The card is Chip and Pin based and provides global emergency assistance services like complimentary card replacement, cash delivery, medical and lawyer assistance services, besides providing online account management services and 24 hours call centre support.

"The product is backed by MasterCard's powerful acceptance network of over 35.9 million merchant establishments and 1.9 million ATMs worldwide," added Sarker.

Source : Economic Times

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Arun Thiagarajan resigns from ING Vysya Bank

Arun Thiagarajan has relinquished his office as part-time Chairman and as a Director of ING Vysya Bank, effective September 6, 2014.

In a notice to the BSE, the Bangalore-headquartered private sector bank said it is taking necessary steps to appoint a successor in due course.

Thiagarajan had joined the bank, which has 547 branches and about 10,000 employees, in 2010.

The main stakeholders in ING Vysya Bank are: Dutch financial institution, ING Group (42.86 per cent stake); foreign institutional investors (28.16 per cent); and domestic institutional investors (15 per cent).

The bank had reported 18 per cent decline in net profit at Rs 143.4 crore in the first quarter ended June 30, 2014 as against Rs 175.1 crore in the year ago period.

Source : The Hindu

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RBI norms on Basel III instruments are credit positive: Moody's

The new norms by RBI for the instruments compliant under Basel III to raise Tier-I capital are credit positive for Indian banks, in particular public sector banks, according to Moody’s credit rating agency.

“They will make the instruments more attractive to investors, broaden the investor base for additional Tier 1 (AT1) securities to include retail investors and allow banks to have a higher proportion of AT1 capital in their Tier 1 capital,” Moody’s said in its credit outlook report.

New guidelines

On September 1, the Reserve Bank of India (RBI) had revised some of its rules governing instruments that qualify as bank capital under Basel III.

RBI has cut the minimum maturity for Tier 2 capital that banks can issue to five years from 10 years. It has also allowed retail investors to buy Tier 1 capital.

Basel III capital norms

Indian banks have to comply with Basel III capital norms by March 2019, including maintaining a minimum capital adequacy ratio of 11.5 per cent.

“Several changes will make AT1 instruments more attractive to investors. Write-downs of principal when a bank’s common equity Tier 1 (CET1) capital breaches the trigger level can now be temporary, giving investors the possibility of recouping their losses if the health of the bank improves,” said Srikanth Vadlamani, Vice President - Senior Analyst, Financial Institutions Group, Moody's Investors.

Broader investor base

Further, lack of broader investor base discourages banks from issuing Tier 2 instruments. RBI has tried to address this by widening the investor base to include retail investors.

The other key change in the new rules is the removal of certain limit on the amount of AT1 that a bank can use for calculating its Tier 1 capital, which effectively limited AT1 issuance to 1.5 per cent of risk-weighted assets.

At a time, when public-sector banks are finding it difficult to raise equity capital from the public markets, this provides a way for banks to bolster their Tier 1 ratio by raising a higher amount of AT1 capital.

Low capital levels are a key credit weakness for many Indian banks, particularly public sector banks.


Source : The Hindu

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Kotak Bank appoints woman director on board

Kotak Mahindra Bank has appointed Farida Khambata as additional director on its board with immediate effect. The decision was taken at a board meeting on Sunday, September 7, Kotak Bank said in an exchange filing.

Currently, Khambata is global strategist at Cartica Management LLC and a member of its investment committee.

At present, the Kotak Bank board comprises Shankar Acharya, Uday Kotak, C Jayaram, Dipak Gupta, Asim Ghosh, Prakash Apte, Amit Desai, Narendra P Sarda and Mahendra Dev.

Starting October 1, 2014, SEBI has mandated that "The board of directors of the company shall have an optimum combination of executive and non-executive directors with at least one woman director and not less than fifty per cent of the board of directors comprising non-executive directors."


Source : The Hindu

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