SBI cuts term deposit rates

Easy liquidity has prompted State Bank of India to cut retail term deposit rates by 25 basis points in select maturities.

The country’s biggest banker State Bank of India (SBI) has cut the retail term deposit rates for deposits below Rs. 1 crore with effect from Monday, December 8.

The bank has revised the rates only for a tenure of one year and above, leaving the short-term deposit rates untouched.

In its filings to the stock exchanges, SBI said that the interest rates for deposits of 1 year and above will be reduced by 25 basis points (0.25 per cent per annum). While the rates for deposits of 1 year to less than 3 years and 3 years to less than 5 years are reduced from 8.75 per cent to 8.50 per cent, for deposits of 5 years and above, the new rate would be 8.25 per cent against 8.5 per cent at present.

However, the interest rates for short-term deposits of 7 days up to 1 year in different terms remain untouched. Rates for deposits of 7 days to 45 days (5 per cent), 46 days to 179 days (7 per cent), 180 days to 210 days (7.25 per cent) and 211 days to less than one year (7.50 per cent) would remain unchanged.

The bank’s action comes in the wake of growing chorus for cut in interest rates as global oil prices are tumbling and as inflation remains under check.

Shares of SBI (face value Rs1) are trading at Rs319.10, down by Rs1.15, on the BSE.

In the last few days, ICICI Bank and HDFC Bank have cut retail term deposit rates by 25-50 basis points in select maturities. 


Source : Thehindubusinessline

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ICICI Bank sells Russian subsidiary to Sovcombank

The board of country’s largest private sector lender ICICI Bank on Friday approved sale of the bank’s shareholding in its Russian subsidiary ICICI Bank Eurasia, to a third party Sovcombank.

“ICICI Bank Ltd has informed BSE that the Board of Directors of the Bank at its meeting held on December 05, 2014, approved a proposal for the sale of ICICI Bank’s shareholding in ICICI Bank Eurasia Limited Liability Company (IBEL), a non-material wholly-owned banking subsidiary in Russia, to Sovcombank, an unrelated third party Russian bank,” ICICI Bank said in a release to the Bombay Stock Exchange.

At September 30, 2014, ICICI Bank Eurasia had total assets of Russian Ruble (RUB) 4.5 billion (about Rs. 500 crore) and paid-up equity capital of RUB 1.6 billion (about Rs. 185 crore). Its profit after tax in the six months ended September 30, 2014 was RUB 28 million (Rs 3.2 crore).

ICICI Bank Eurasia accounted for less than 0.1 per cent of ICICI Bank’s consolidated total assets at that date and consolidated profit after tax for the period, the BSE release said.

The sale is subject to execution of definitive agreements and regulatory approvals. The purchase price will be determined on the transaction completion date based on the financial statements of IBEL at that date. The transaction is expected to conclude by the end of the financial year.

Shares of ICICI bank ended at Rs. 359.45 per share, weaker by Rs. 2.40 (0.66 per cent) over the previous close on BSE.


Source : Thehindubusinessline

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HDFC Bank to cut lending rate by March: Aditya Puri

Having cut its deposit offering by up to 0.50 per cent, the country’s second-largest private sector lender HDFC Bank will be cutting its lending rate by March, a top official said today.

“Now I’ve reduced my fixed deposit rates, and you will see by March or so base rate will come down,” the bank’s Managing Director Aditya Puri told PTI after launching a blood donation drive.

Puri said the base rate or the minimum rate of lending is computed on the cost of deposits and the bank cannot cut its lending rate unless the deposit rate comes down.

Once the cost of deposits come down, following the December 1 cut in short-term deposits of up to one year maturities, the bank will pass on the benefit to borrowers, he added.

The bank’s base rate currently stands at 10 per cent and the last movement in it was in November last year, when it was hiked by 0.20 per cent.

The bank cut the deposit rates by 0.25 to 0.50 per cent in various buckets ranging from 49 days to less than a year deposits, attributing it to low credit pick-up, drop in money market rates and competitor’s moves.

On Tuesday, Reserve Bank Governor Raghuram Rajan had rued the fact that banks are not passing the benefits of the declining rates environment to the borrowers, saying the policy measures are not getting transmitted as desired.

Puri today said that policy transmission has happened as the banks have cut rates in different offerings such as car loans, where banks have reduced their spreads, but added that it does not reflect in the base rate due to deposit rates.

“Already interest rates have gone down in the market, whether it is car loans or term loans. Monetary transmission with or without reduction in policy rates has already happened,” he said.

Puri said Rajan’s stance has been dovish, which comforts the banking system and added that the RBI Governor should unleash a 0.50 per cent cut in the next policy.

“His statement is also dovish, saying that once he can see stability in the benignness of inflation, you can expect a cut. Let’s hope that the cut is a meaningful one at 50 basis points since he didn’t do it this time,” Puri said.

HDFC Bank today started a single-day blood donation drive at 2,000 locations across the country simultaneously. Last year, it had collected 67,000 units of blood in a similar drive and is targeting the same to go up to 1 lakh this year, Puri said. 


Source : Thehindubusinessline

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Federal Bank cover for students

Federal Bank has tied up with Kotak Life Insurance for the launch of a student insurance scheme. Called Vidya Suraksha, the scheme provides life cover for students who have taken education loans. It gives insurance protection to the extent of loan liability of a student in event of death. It is a single-premium policy and the premium will be funded by the bank.


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Bank services in Bihar hit due to strike

Banking operations in Bihar was hit today after Public Sector bank employees in the state joined the relay strike call given by United Forum of Bank Unions (UFBU) for early signing of wage accord.

According to general secretary of Bihar Bank Employees Federation, J P Dixit, around 7,200 bank branches in the state remained closed and a majority of 4,878 ATMs stopped working after their cash got over.

“The strike has been total. It is a mark of unity across the banks and has instilled hope and enthusiasm among the employees that their wage revision will be taken seriously by the government and other agencies,” Dixit told PTI.

Bank employees converged at their branches and shouted slogans in support of their demands. They also demanded regularisation of the services of contractual and daily wages workers.

Hundreds of bank employees staged a dharna at SBI Local Head Office in the state capital. It was led by Shaligram Sharma, the President of SBI wing of All India Bank Employees Association (AIBEA).

Sharma said the bank employees’ wages are revised every five years, but the latest one is due since November 1, 2012. The last wage revision was done in 2007.

SBI Staff Association General Secretary Umesh Prasad Singh pointed out that there have been 13 round talks on the issue and they have come to a naught so far.

BI Officers Association President Kamlesh Kumar Singh said the strike has been conducted peacefully at all the bank branches.


Source : Thehindubusinessline

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