Budget 2013: Ladies-only banks make strong business sense, say experts

The finance minister's proposal to set up a women's bank may have triggered a flurry of jokes on twitter and the social media, but bankers acknowledge that it will give a boost to financial inclusion.

"It will provide a sense of comfort for the segment of women that finds going to a bank intimidating," said Shikha Sharma, MD & CEO, Axis Bank.

According to Aditi Kothari, EVP, DSP Blackrock, and the daughter of Hemendra Kothari, there is a tendency among women to leave financial matters to men and many do not know what to do in the event of a divorce or a death.

"I think it will encourage women and make them more confident. There are a lot of women planning to start their own business. A bank for women will help them become financially independent," she said, adding that the objective of increasing women's participation cannot be done by existing banks.

"To get so many public sector banks to change their culture and to get them to think of women's needs is a long-term goal. The medium term goal to start a bank for women would serve as a model that will help other banks realise women as a segment and help to change culture," she said.

The new bank will have a paid-up capital of Rs 1,000 crore and should get its licence by October. The government is yet to come out with the fine print on the extent to which the new entity will lend to women and the extent to which jobs will be reserved for women. In the past a private sector bank discontinued a women's only branch ostensibly on the grounds of security.

Rana Kapoor, MD & CEO of Yes Bank suggests that the Women's Bank could tie in a gold deposit account, which would help convert physical savings into financial savings. "It is a tremendous and progressive step forward for emancipation of Indian women who constitute a significant part of household savings. A specialized women's bank will add to their social security and personal income and even bring in a lot of personal savings lying idle into the banking system," said Kapoor.

The All India Bank Employee Association has supported the proposal for a women's bank.


Source: Economictimes

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Fund houses flood markets with RGESS new fund offer

As the finance minister extended Rajiv Gandhi Equity Saving Scheme for three successive years and also allowed investors with Rs 12 lakh income to invest in these schemes for tax benefit FY2013-2014 onwards, mutual funds have increased their focus on RGESS. Seven new fund offers are open now to allow investors to tap RGESS to save tax.

Birla Sun Life RGESS, DSP BlackRock RGESS Fund, HDFC RGESS, IDBI RGESS Fund, LIC Nomura MF RGESS Fund Series - 1, and UTI Rajiv Gandhi Equity Saving Scheme are the ongoing new fund offers.

Reliance Mutual Fund has launched R*Shares CNX 100 Fund, an ETF that is compliant with RGESS. "RGESS offers investors an opportunity to take exposure to large cap stocks for long term. This should offer them twin benefits of capital appreciation and tax savings," says Abhinav Angirish, managing director, investonline.in, an online mutual fund distribution entity. It can be a good entry point for first time investors in volatile markets.

First time investors with income below Rs 10 lakh annually, can avail an additional tax benefit under section 80 CCG for maximum investment up to Rs 50,000.

This benefit is over and above the Rs 1 Lakh exemption limit available as regular benefit under Sector 80C. For the next three years the income criteria has been enhanced to Rs 12 lakh per year.


Source: Economictimes

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‘Intelligent-powered’ ATMs

ATM service provider, Diebold Systems today launched ‘intelligent-powered’ ATMs. The ATM automatically switches between three power sources (solar panel, alternating current grid and internal battery), managing up to 3-5 per cent cost savings,” said Wico van Genderen, Vice-President, Diebold Asia-Pacific.

In addition to basic operations, the ATMs will provide card-less transactions and have an option for accepting small-volume currency deposits and bill payments at the ATM.

Beena.parmar@thehindu.co.in


Source: thehindubusinessline

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United Bank of India, UCO Bank hike deposit rates

United Bank of India has increased the rate of interest on domestic term deposits below Rs 5 crore by 25 basis points effective March 1.

The revised rates for deposits of one-year tenure have been increased to nine per cent (8.75 per cent). Senior citizens will get an additional 50 basis points benefit on the rate, said a bank statement.

UCO Bank has also upped interest rates on term deposits of Rs 1-5 crore effective March 2.

The revised rates on deposits of 91-120 days has been increased to 8.75 per cent (8.25 per cent) and that on 121-180 days has been hiked to 8.75 per cent (8.30 per cent).

shobha.roy@thehindu.co.in


Source: thehindubusinessline

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Indian Bank revises FCNR rates

Public sector lender Indian Bank has revised downwards foreign currency non-resident (Banking) term deposit interest rates with immediate effect.

The revised interest rates have been fixed at 2.75 per cent (from the existing 2.78 per cent) for deposits (in$) of one year and above but less than two years by the Chennai-based bank for FCNR (B) deposits.

For deposits of two years and above but less than three years, the interest rates have been revised to 2.40 per cent from the existing 2.43 per cent, Indian Bank said in a statement.

Interest rates have been revised to 3.51 per cent for deposits of three years and above but less than four years from the existing 3.56 per cent.

For deposits of four years and above but less than five years, the interest rates have been revised to 3.69 per cent from 3.77 per cent, it said.

Interest rates have been fixed to four per cent for deposits of up to five years against the existing 3.92 per cent, the release added.


Source: thehindubusinessline

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