IDFC gets shareholders nod to launch bank

Infrastructure financing firm IDFC Ltd today said it has received shareholders approval to its demerger scheme to set up a wholly-owned subsidiary IDFC Bank.

The scheme was earlier approved by the Reserve Bank and board of directors of IDFC Ltd.

"The...shareholders have unanimously approved the scheme of arrangement among IDFC Ltd and IDFC Bank Ltd and their respective shareholders and creditors under Section 391 to 394 of the Companies Act, 1956", IDFC Ltd said in a BSE filing.

In April last year, IDFC Ltd bagged a licence from the RBI to set up a bank.

Last month, the Chennai-based company, as part of taking forward its plan to set up bank, sought shareholders' approval for demerging its financial undertaking into a new entity to be named IDFC Bank.

IDFC Ltd proposes to realign its businesses to comply with the corporate structure requirements of the RBI guidelines to set up new banks and demerge its financing undertaking to IDFC Bank.

The guidelines specifically mandates that all new banks are to be set up through a non-operative financial holding company.

The demerger was in accordance with RBI conditions which requires IDFC Ltd to transfer the relevant business activities to the proposed IDFC Bank.

IDFC Bank Ltd was established as a public limited company to carry out business of banking pursuant to approval granted by the Reserve Bank in April 2014.

Source : Economic Times

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HDFC cuts home loan rates by 20 bps to 9.9%

HDFC, country’s leading housing finance firm, reduced its home loan rate by 20 bps to 9.9 per cent on Friday. The rate cut will benefit its new and existing borrowers in the form of lower EMIs (equated monthly instalments).

Housing Development Finance Corporation or HDFC’s move comes two days after the RBI announced a status quo in its monetary policy review and Governor Raghuram Rajan prodded banks and lending institutions to pass on the previous two policy rate cuts effect since January this year.

The company said the reduction in the RPLR will also be applicable on loans to Non-Resident Indians (NRIs).


Source : Thehindubusinessline

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IndusInd Bank to buy RBS India's diamond, jewellery financing business

Private sector lender Indusind Bank has announced to buy RBS's Diamond & Jewellery Financing business with a loan book of Rs. 4,500 crore its and related deposit portfolio.

The deal is subject to regulatory approvals. Until ownership of the loans is transferred to te Hinduja-promoted IndusInd Bank, day to day management of the loan portfolio will remain with Royal Bank of Scotland N.V. (RBS) employees within diamond and jewellery clients in India will also move to IndusInd Bank Ltd and will ensure seamless transition of the customer base.

“IndusInd Bank enters into an agreement to acquire Royal Bank of Scotland's (RBS) Diamond & Jewellery Financing business in India; simultaneously enters into Partnership Agreement with ABN AMRO Bank N.V. for cooperation in Diamond & Jewellery Financing,” the bank said in a statement on Friday.

The statement added that this is part of ABN AMRO Bank NV’s diamond & jewellery clients [unit] that is housed in RBS NV acting through its Mumbai branch in India and the diamond and jewellery financing loan book of RBS is approximately Rs. 4,500 crore in size.

“This acquisition fits nicely into our strategy of creating scale with profitability in select business segments. We like this business and have a deep insight into the industry. We are also happy to reach a Partnership Agreement with ABN AMRO Bank NV, one of the oldest banks in Diamond and Jewellery financing,” said Romesh Sobti, MD & CEO, IndusInd Bank.

ABN AMRO was acquired by RBS in 2007. Moreover, before taking over as IndusInd CEO and MD, Ramesh Sobti was country head at ABN AMRO.

IndusInd Bank specialises in the diamond and jewellery financing business and this acquisition will enhance its position, IndusInd said. "Several members of IndusInd Bank’s senior management had been associated with this portfolio in RBS NV and prior to that in ABN AMRO Bank NV…A critical success factor in diamond financing is global client knowledge and this is being achieved through a long term Partnership Agreement with ABN AMRO Bank. This strategic relationship will facilitate deeper industry and client insight and in turn lead to improved client servicing, enhanced revenue opportunities and better risk management,” the bank statement further said.

RBS has been trying to exit its operations in India since its UK-based parent went into a government bailout after the 2008 global credit crisis.

After the RBI spiked a deal to sell its retail banking business to rival HSBC in 2012, RBS had said it would wind down its business gradually.

In August 2013, RBS had sold its credit card business, mortgage and commercial banking portfolios to mid-sized private sector lender Ratnakar Bank.

At present, RBS has just 20 branches in 10 cities across the country and retains its presence in the wholesale business and offers financing, risk management, investment banking, cash, payments, trade finance and wealth management solutions to its clients.


Source : Thehindubusinessline

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Mobile banking set to get a boost

Public sector banks plan to step on the gas to get their customers to use mobile banking over the next one year. Steps such as automatic on-boarding of all new customers on mobile banking and enrolling 10 lakh merchants to accept mobile payments are in the works.

In a bid to deepen mobile banking penetration, public sector banks will download the mobile banking app for new customers alongside the account opening process.

Bank employees may be made responsible for educating customers on how to transact seamlessly on mobiles at the time of opening an account, according to the suggestion of a bankers’ working group constituted at the behest of the Finance Ministry, on leveraging technology.

This initiative can be supported through a bank-wide customer and employee awareness programme.

Update database, enrol merchants

Further, PSBs will update the mobile number of customers in their databases on a mission mode. Subsequently, banks can increase communication with their customers on mobile phones and educate them on effecting mobile payments.

The idea behind this move is to ensure that 20 per cent of the existing customers migrate to mobile banking transactions. As at March-end 2013, there were 104.5 crore deposit accounts in the country.

Banks may run a programme to enrol almost 10 lakh merchants for mobile banking. This will entail educating merchants about no interchange fees for mobile payments, ease of transactions, and designing incentive schemes for merchants.

Cash/cheque vs e-payments

PSBs will individually undertake a study to assess the cost of cash/cheque versus electronic payments such as national electronic funds transfer and real time gross settlement.

Based on this assessment of cost, banks may consider revising their charges such that beyond a minimum number of in-branch cash and cheque transactions, customers are charged more. This would encourage customers to migrate to digital payments such as mobile and Internet banking.

In 2013-14, 9.5 crore mobile banking transactions valued at around Rs6,000 crore were transacted. In FY2012-13, the corresponding figures were 5.3 crore and Rs6,000 crore, respectively, according to the RBI’s annual report. There are 27 PSBs in the country and they dominate the banking system. As at March-end 2014, their share in total deposits and total advances was 77 per cent and 76 per cent, respectively.

Pointing out that the use of technology has expanded from the days when accounts were maintained manually in ledgers and unions called for strikes at the very mention of the word computers, RBI Governor Raghuram Rajan, in a recent speech, observed: “Today, some banks allow customers to do all their banking transactions on a mobile phone, without entering a branch or touching a pen.”


Source : Thehindubusinessline

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Andhra Bank not to operate ATMs in TN at night

Andhra Bank has decided to keep its ATMs in Tamil Nadu closed during nights till normalcy returns, said a senior official of the bank.

Following protests over the police encounter near Tirupati, Andhra Pradesh, in which 20 woodcutters from Tamil Nadu were shot dead by the police on Tuesday, protests swelled across Tamil Nadu condemning the brutal incident.

Police protection has been given to all branches, but we do not want to take a chance and hence decided to close all our ATMs in Tamil Nadu after office hours, said the official.


Source : Thehindubusinessline

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