Corporation Bank to open 9 more SME loan centres this year

Corporation Bank will open nine more SME (small and medium enterprises) loan centres by the end of the current financial year.

Inaugurating an SME expo in Mangalore on Saturday, B.K. Srivastav, Executive Director, said the bank has 16 SME loan centers across the country. The intention is to take the total number to 25 by March 2014.

He said the bank is expecting not less than 30 per cent growth in the SME portfolio from these loan centers during the fiscal.

Speaking on the occasion, Suresh Bhat, Director of Science and Technology Entrepreneurs’ Park (STEP) of the National Institute of Technology Karnataka (NITK), said banks should meet the financial requirements of budding entrepreneurs.

Responding to this suggestion, Srivastav said Corporation Bank could enter into a tie-up with NITK-STEP to help entrepreneurs. If NITK-STEP mentors and supports the entrepreneurs, Corporation Bank could extend them financial assistance, he said.

vinayak.aj@thehindu.co.in

Source: thehindubusinessline

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Finance firms set to launch ATMs as demand spreads

Indian corporates have lined up plans to roll out ATMs, a year after the RBI gave its nod to non-banking companies to set up ATMs.

First off the block, Tata Communications Payment Solutions (TCPL), a wholly-owned subsidiary of Tata Communications, plans to set up 15,000 ATMs in India under the brand name, Indicash.

The company, after launching its initiatives in Maharashtra, has set its eyes on Karnataka.

“In the next three years, we will launch 1,000 ATMs in Karnataka, with a thrust on rural areas,” Sanjeev Patel, CEO, TCPL, told Business Line.

TCPL may be the first off the block but others are hot on their heels.

Muthoot Finance, engaged in the business of financing against the security of gold ornaments, wants to leverage its network of 3,853 branches to set up white-label ATMs - industry parlance for non-banking entities launching their branded ATMs, but using the RBI-mandated National Financial Switch network. Srei Infrastructure Finance has received in-principle approval from the apex bank to set up such ATMs.

Semi-urban, rural areas

The reason for companies wanting to get into this segment is largely due to the fact that despite banks setting up ATMs averaging a growth of 23-25 per cent, the deployment has been primarily in Tier-1 and Tier-2 cities, said a tech analyst. This leaves the semi-urban and rural areas without access to services, such as ATMs, he added.

However, for companies, such as TCPL, a successful roll-out of ATMs would give its parent, the Tata Group, an advantage to bag a banking licence, say industry watchers. In July, Tatas were among 26 Indian corporate houses which applied for banking licences. London-based RBR, a research and consulting firm, in a report said India’s ATM density is 74 per million people and 48 per $1 billion of GDP, way below other BRIC countries, which on an average, have 246 ATMs per million people.

venkatesh.ganesh@thehindu.co.in

Source: thehindubusinessline

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LIC Housing launches ‘Sanchay’

LIC Housing Finance Ltd has launched a public deposit scheme ‘Sanchay’ whereby it will offer the highest interest rate of 9.5 per cent on five-year deposits.

The term period for deposits ranges from one to five years with the minimum amount of deposit being Rs 10,000 and thereafter in multiples of Rs 1,000.

The rate of interest (for deposits up to Rs 5 crore) ranges from 8.75 per cent to 9.5 per cent for general public for a period ranging from one to five years.

For senior citizens, the company is offering additional 0.1 per cent for deposits up to Rs 50,000 and 0.25 per cent for deposits of Rs 51,000 and above.

In the cumulative scheme, the interest accumulated with half-yearly interest will be paid on maturity and in the non-cumulative scheme, the interest will be paid on a half-yearly basis i.e. 31st March and 30th September.

The housing finance company said that it will accept deposits from individuals, Hindu Undivided Families, Companies, Non-Resident Indians, Cooperative Societies and Association of persons.

LICHFL’s public deposit scheme has a ‘FAAA Stable’ rating from Crisil, the company said in a statement. As of June-end 2013, the company had a deposit portfolio of Rs 839 crore.

Source: thehindubusinessline

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IRDA issues norms for licensing banks as insurance brokers

Banks can now become licensed insurance brokers. The Insurance Regulatory and Development Authority has come up with regulations for licensing banks as insurance brokers.

This move is expected to open up distribution possibilities for non-bank promoted insurance companies that hitherto had no tie-ups with banks under the banassurance model.

Till date, banks were able to distribute insurance products only as a corporate agent (under a bancassurance model).

The existing regulations stipulated that each bank can distribute only one life insurance, one general insurance and health insurance company products.

With the latest move to allow banks to become insurance brokers, the scope for banks to sell multiple company products has become a reality.

But banks are not going to readily jump into the broker bandwagon as many already have floated their own insurance joint ventures. They would not like to go in for selling others’ products when they can sell their own joint venture company’s products.

However, some banks especially those in the private sector are likely to opt for becoming brokers in a big way, according to sources in the banking industry.

srivats.kr@thehindu.co.in

Source: thehindubusinessline

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Ratnakar Bank to acquire RBS assets

Private sector lender Ratnakar bank will acquire Royal bank of Scotland’s (RBS) Business Banking, Credit Cards and Mortgage business in India.

The Kolhapur-based bank would also acquire over 1.2 lakh customers of RBS across the three business segments which form the part of the purchase deal. The RBS employees associated with these businesses are proposed to be absorbed by Ratnakar Bank.

The deal size was not disclosed by the bank.

The RBS assets sale was on the cards for the past few months with many banks in the race, including Yes Bank, IndusInd Bank and HSBC among others.

“We are glad we were not the one of the banks in the speculation and still have managed to purchase the RBS assets. The portfolios are of high quality and will give a strong platform over and above our existing business,” said a person familiar with the deal.

The business banking holds high transactional current account and forex franchise. Our mortgage business was 8-12 months old and this will add to the portfolio, the person added.

The transaction is expected to help the Bank create further capabilities in a very short span of time and enhance the current and savings account (CASA). RBS customers would also get access to the larger and expanding branch network along with broader banking capabilities of Ratnakar Bank.

This will also mark Ratnakar Bank’s entry into the credit card business.

Over the last three years the bank has been building scale with the entry of new CEO and Managing Director Vishwavir Ahuja and other top management changes.

The acquisition will be subject to approvals from Competition Commission of India (CCI).

Derek Nazareth, Head of Retail and Commercial Banking, RBS India said: “Over the next few weeks we will be writing to all of our clients who are affected, and working closely with Ratnakar Bank to ensure a seamless transition for our customers.”

PricewaterhouseCoopers were the advisors to Ratnakar Bank while Morgan Stanley and RBS M&IB Asia Pacific advised to RBS.

There is no impact on RBS’s Corporate and Institutional Business (Markets and International Banking) or its Private Banking businesses in India. RBS will continue to offer financing, risk management, wholesale and investment banking, cash, payments, trade finance and a comprehensive range of wealth management solutions to its clients.

Source: thehindubusinessline

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