Allow intra-bank a/c portability: RBI to banks

The Reserve Bank of India on Friday asked banks to allow intra-bank account portability in cases where full KYC (know your customer) details of the concerned account have been ascertained.

The facility would enable the customers to shift their account to any of the desired branch any number of times, without any change in the account number.

"Banks are advised that KYC once done by one branch of the bank should be valid for transfer of the account within the bank as long as full KYC has been done for the concerned account," RBI said in a notification.

The customer should be allowed to transfer his account from one branch to another branch without restrictions, it said.

In order to comply with KYC requirements of correct address of the person, fresh address proof may be obtained upon such transfer by the transferee branch, it said.

RBI said: "It has been brought to our notice that some banks are insisting on opening of fresh accounts by customers when customers approach them for transferring their account from one branch of the bank to another branch of the same bank.

"Such insistence on opening of fresh account or making the customer undergo full KYC process again causes inconvenience to them resulting in poor customer service," it said.

"It is not reasonable in view of the fact that most bank branches are now on Core Banking Service (CBS) and KYC records of a particular customer can be accessed by any branch of the bank," it said.

Source: Financial Express

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Yes Bank eyes Rs 1.5 lakh cr balance sheet size by 2015

Private sector lender Yes Bank has set a target of achieving a balance sheet size of Rs 1.5 lakh crore by the turn of 2015.

"The remaining three years will see the bank witnessing accelerated growth with the objectives to achieve a balance sheet size of Rs 1.5 lakh crore, deposit base of Rs 1.25 lakh crore and advances of Rs 1 lakh crore," Yes Bank Managing Director & CEO Rana Kapoor said.

He was addressing the top management, investors and analysts on the completion of two years of its Version 2.0 vision yesterday.

This confidence comes on the back of significant momentum on Casa and retail liabilities front, he said, adding that going forward, the bank will focus on branch expansion.

"We have a target of 900 branches, along with increasing headcount to 12,750 by March 2015," Kapoor said.

The bank has 356 branches across over 200 cities and more than 5,600 employees as of March 2012.

He further said, "the focus for the next phase of growth is primarily to build on the strong underlying foundation created in terms of our expanding Casa deposit base by leveraging on the branches, products and human capital investments and further growing our corporate businesses."

The city-based bank, founded in 2004, has seen a jump in Current Account, Savings Account (CASA) growth after it raised the interest rates on savings bank deposit rates to 7% late last year.

As of Q4 of last fiscal, its CASA ratio grew to 15% of total deposits, up by 4.7% year-on-year. The bank has a CASA target of 30% by 2015. CASA ratio is the ratio of the deposits in the form of Current Account & Savings Account to the total deposits.

For the fourth quarter, the bank reported a 33.6% spike in net profit to Rs 272 on an income of Rs 2,051.4 crore.

Its net interest income improved 28.6% to Rs 448.2 crore as against Rs 348.8 crore in the same quarter a year ago.

Source: Business Standard

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Axis Bank slashes Enam valuation by a third

Axis Bank slashed by a third the valuation of Enam Securities' investment banking business it had agreed to buy in November 2010, ending a 17-month-long wait to boost fee income. It also added muscle to its mutual fund business by getting the UK's asset manager Schroders as a joint venture partner.

The third-biggest private sector lender, which faced questions from the regulator on the stock-swap transaction, reduced the value of Enam's business to Rs 1,396 crore, from Rs 2,070 crore agreed when first proposed. "The relook at the valuation was not driven by regulatory guidance," said Shikha Sharma, MD & CEO, Axis Bank. "The market valuation since then has changed and hence the change in valuation.''

Enam Securities Chairman Vallabh Bhanshali said the revised transaction is still attractive. "The deal was good for all in its current form as well," Bhanshali said in an emailed response.

Axis will now give 1.2 crore shares to Enam's shareholders, down from 1.38 crore. During the period, Axis shares have fallen about 25% to Rs 1,103 while the benchmark Sensex is down about 14%.

Since taking charge at Axis in 2009, Sharma who spent a good part of her career at the ICICI Bank group, began transforming it from a pure lender to a full-fledged financial services group.

The commencement of investment banking business under the Axis brand name and launch of products with Schroder's help will take Axis into the league of ICICI Bank, State Bank of India and HDFC Bank in offering the range of financial services. Axis, which is already a top bond arranger, will get equity and mergers & acquisitions strength with Enam.

"The Reserve Bank of India is okay with the change in the share swap as long as it is in favour of the bank,'' said Sharma. "The structure remains the same. The missing link was M&A. With this, we will be able to offer a full range of products,'' she added.

Axis Bank's strength in fixed income was also reflected in its treasury income tripling in the March quarter, helping the bank post profits amid retail business falling into losses. The March quarter net profit rose 25% to Rs 1,277 crore, up from Rs 1,020 a year earlier. Retail banking fell to a loss of Rs 5.8 crore, from a profit of Rs 114 crore a year earlier.

"The retail book has seen a loss as according to the Basel III definition all exposures of over Rs 5 crore on the asset side is included,'' said Somnath Sengupta, chief financial officer and whole time director, Axis Bank.

"SME and agriculture loans also fall under this category and the provisions to be made on this book has lead to a fall in the net profit in the retail business," he said.

Source: EconomicTimes

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'IDBI Bank to open taluk, village-level branches for farmers'

IDBI Bank aims to climb to the No 5 slot in terms of business among the banks within the next three years, from the No 7 position it holds now, the Executive Director, Mr K.C. Jani, has said.

The bank, which has forayed into the insurance and mutual funds businesses, has no plans to dilute its stake to bring in a foreign partner, he said.

Speaking to newspersons in Coimbatore on the sidelines of the ‘money tree finExpo’, he said IDBI Bank had closed the last financial year with business of Rs 3.91 lakh crore and made a net profit of more than Rs 2,000 crore. The bank had, within eight years of its launch in 2004, climbed up to the No 7 spot among the banks in terms of business.

He said the aim was to achieve the No 5 position within the next two-three years. During the year, the bank would aim to cross Rs 3,000 crore in profit. He claimed that though IDBI was a PSU bank with 70 per cent holding by GoI, its services were not at a par with but better than its private sector rivals.

Mr Jani said the banking sector in the country was on average growing at 18-20 per cent annually. To achieve its goal of reaching the fifth position, “we have to grow slightly faster than that” and IDBI Bank plans to grow by 20-22 per cent to reach its target.

The bank has 1,000 branches and 15,000 employees.The average age of its employees at 33 is the lowest for banks in India. Its per capita profitability (profitability per employee) was the best in the industry.

He said the bank plans to open around 150 branches during this year. Apart from expanding the regular branch network, the bank plans to open smaller branches at the taluk level and larger banks at the village level with limited staff strength, to take care of the financial needs of the farmers. RBI has permitted the bank to open such branches without any formal licence where the population was less than one lakh, and the bank was gearing to open them in coming weeks.

On the impression that interest rate cuts by banks were not commensurate with the repo rate cut by RBI, Mr Jani said banks were trustees of the funds of the public. As RBI was reducing rates step by step, the banks too were adopting a step by step approach. Going forward, banks would do what the RBI desired them to do. He said IDBI Bank’s net interest margin was around two per cent as it paid higher interest on deposits while charging lesser interest on lending since it kept the customers’ interest paramount. But it was ‘not worried’ over that.

On whether the stubbornly high inflation gave hopes of a further rate cut, he said interest rates have started falling and it is expected that the decline in rates would continue. He said ‘even if it is not coming down, it will not go up.’

Asked whether the bank planned to offload part-stake in ventures such as mutual funds and insurance to bring in overseas partners to monetise its investment, the Executive Director of the IDBI Bank said “as on today we don’t have any plans” but going forward “in future, nobody can say”.

Agreeing that the value of its investment in subsidiaries was not reflected in its share price (IDBI shares were trading at about Rs 102 with a P/E of just 6), he said the group companies were doing well and there was no plan for an immediate offloading of stake in them.

Earlier, inaugurating the first edition of ‘money tree finExpo’ organised by the Indian Chamber of Commerce and Industry, Coimbatore, he urged the organisers to conduct it annually. Mr M. Krishnan, President, ICCI, presided.

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SBI to launch four SME processing units

State Bank of India, Bengal Circle, plans to set up four small and medium enterprises (SME) processing units across the State in the next six months. The circle currently has one SME processing unit in Kolkata.

These processing units would help in speedy disbursals of SME loans and would aid in building up the bank's SME loan book in the region, Mr Sureinder Kumar, Chief General Manager, SBI Bengal Circle, said.

“SBI Bengal Circle's exposure to SME loans has been increasing over the last two years. The total outstanding currently stands at about Rs 11,000 crore,” Mr Kumar said while speaking at a seminar on avenues of raising fund for SMEs jointly organised by the Bengal National Chamber of Commerce and Industry and Peerless Securities Ltd here on Friday.

SBI Bengal Circle witnessed a 20 per cent growth in its business to Rs one lakh crore in 2011-12. The circle aims to achieve 25 per cent growth in business to Rs 1.25 lakh crore by the end of March 2013, he said.

shobha@thehindu.co.in

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