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Feb 6, 2014

Wage Settlement - AIBOC press release

(taken from 'all banking solution')

REF: AIBOC/2014/01 DATE: 05/02/2014

PRESS RELEASE – SALARY REVISION

The revision of salary of around 10 lac bank officers and employees is due from 1st November 2012 for which a comprehensive Charter of Demands was submitted by the Officers’ Organisations to Indian Banks’ Association (IBA) on 30th October 2012. In the last 15 months, 8 rounds of discussions have taken place between IBA and Officers’ Organisations and date of effect from 01.11.2012 and DA Merger points at 440 points were the only two issues settled.

Apart from this, IBA has made an initial offer of 5% salary increase on “pay slip component” which was enhanced to 9.5% after the Unions gave a strike notice and Central Labour Commissioner intervened to avert the strike. In the next round of discussion held on 27th of January 2014, IBA improved the offer by 0.50% i.e. from 9.5% to 10% which was considered as insultingly inadequate and less than what was offered in the last Bipartite Settlement and hence rejected by the Employees’ and Officers’ Organisations.

Bank Strike Stands

The Bank Employees will observe strike on 10th and 11th February 2014 as the concilation meeting held by CLC (Chief Labour Commissioner) and IBA (Indian Bank's Association) , UFBU (United Forum of Bank Unions) held today failed as the IBA did not increase the offer.

Bulk deposit rates shoot up as banks scramble for cash

The liquidity situation may be comfortable, but banks have started building up their balance sheets ahead of the financial year-end to meet yearly targets. This has resulted in a spike in bulk deposit rates as banks are offering as much as 9.4-9.6% as compared to the card rate of 9% for one-year deposits. Bulk deposits are typically Rs 10 Cr and above. Canara Bank, for example, has sealed a Rs 500-Cr bulk deposit deal of one-year maturity with an Andhra Pradesh-based PSU for 9.61%. Similarly, Bank of Baroda offered 9.41% for a Rs 200-Cr deal. The card rate for deposits of similar maturity is 9%. Spectrum outflow and advance tax have left banks worried about liquidity ahead of the financial year-end. Banks are offering 9.4-9.6% as compared to the card rate of 9% for one-year deposits.

Feb 5, 2014

Bank Strike on 10th and 11th

All Public Sector Bank employees will observe 2 days strike on 10th and 11th February 2014 as the Wage Settlement which is due from November 2012 has not been settled till now. The IBA has offered 10% hike which is duly rejected by the unions represented by UFBU.

HDFC Bank introduces Missed Call Banking

Private Sector Bank HDFC Bank has also started "missed call banking". The customer who intends to use this service has to register his mobile with the bank. Once his mobile number is linked to his account a customer can call any of the Toll Free number that the bank provides to get the services.

Karnataka court refuses to get in the way of banks for recovery of Mallya Debt

The Karnataka High Court refused to interfere with the proceedings initiated by a consortium of banks against industrialist Vijay Mallya and two of his companies — UB (Holdings) Ltd, Kingfisher Airlines Ltd — before the Debt Recovery Tribunal (DRT) in Bangalore to recover a due of Rs.6,200 Cr. Justice AS Bopanna passed the order asking UBHL, Kingfisher and Mallya to approach the Debt Recovery Appellate Tribunal (DRAT) at Chennai against the November 12, 2013, order of the DRT, which refused to reject the application filed by the banks seeking grant of recovery certificate. The banks had sought recovery certificate from the DRT under the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. In his order, Justice Bopanna said it was not established that there is an inherent lack of jurisdiction to DRT or there is a statutory bar or any violation of statute… Also, proceedings or the action (before DRT) cannot be termed as arbitrary, unreasonable and unfair at this stage requiring the High Court’s interference.

SBBJ Q3

State Bank of Bikaner & Jaipur (SBBJ) has reported a 41% decline in net profit for the quarter ended December 31, 2013, at Rs.152 Cr (Rs.215 Cr). Total income for the quarter under review increased 10% to Rs.2,289 Cr (Rs.2,082 Cr). The bottom-line was weighed down by additional provisioning for bad loans, staff benefits and tax expense, B. Sriram, Managing Director, SBBJ, said. He expressed hope that the banks bottom-line this fiscal will come close to the Rs.730 Cr achieved last year. For the nine months ended December 31, 2013, SBBJ reported a net profit of Rs.494 Cr, lower than net profit of Rs.552 Cr in same period in the previous year.

New CMD of Punjab and Sind Bank an IAS officer


The Centre has appointed Jatinder Bir Singh, a 1983-batch IAS officer of Assam-Meghalaya cadre, as Chairman and Managing Director of Punjab & Sind Bank (PSB). He is expected to assume charge as CMD on Monday. Prior to this, Singh was an Additional Secretary in the Ministry of Water Resources. At PSB, Jatinder Bir Singh has come in the place of DP Singh who had superannuated recently.

Feb 4, 2014

Govt comes up with Rs 1,400-Cr interest subvention on loans taken by women SHGs

The government on Monday reached out to rural women by rolling out a R1,400- Cr interest subvention on loans taken by Self Help Groups working for their empowerment. Interest subvention for the loans taken by women Self Help Groups (SHGs) is a significant initiative under the Centre’s ambitious programme National Rural Livelihoods Mission (NRLM). Rural development minister Jairam Ramesh said that it is applicable for loans availed by women SHGs from April 1, 2013. According to the minister, from Monday onwards, all banks/will lend to women SHGs at upfront 7% interest (for loans upto R3 lakhs) in 150 select backward districts, most of which are affected by Naxal menace. These SHGs will get a further 3% subvention on prompt repayment, thus the effective charge on all such loans will be 4% only.

IBA issues advisory to banks on use of Win XP

The Indian Banks Association (IBA) has issued an advisory to banks to ensure business continuity after Microsoft ends support for its popular Windows XP operating system on April 8. IBA, in its advisory, drew the attention of the banks to a study by Microsoft, which estimates that over 34,000 branches of public sector banks would become vulnerable following the US-based firm’s decision to stop support to Windows XP. The fiscal impact of this could be as much as a loss of business opportunity worth Rs 1,100 Cr in a day and a loss of income worth Rs 330 Cr over a period of three days (assuming that a major incident may take three days for the systems to come up to normal functioning), the study had said.

Kotak Mahindra Bank hikes interest on Deposit

 
The private sector bank has revised interest rates on its rupee term deposits of less than Rs. 1 Cr for select maturity buckets by up to 25 bps, with effect from February 6, the bank said in a statement. The bank now offers 9.25% interest (9% earlier) for the 390-day deposit and 9% (8.75%) for deposits in the 181-269 day tenor. Kotak Bank is the first lender to hike its deposit rates after the central bank increased the repo rate by 25 bps to 8% in its third quarter Monetary Policy Review.

Vijaya Bank Q3

Vijaya Bank reported a 91.1% drop in net profit at Rs 11.39 Cr for the October- December quarter due to higher provisioning for bad loans and rise in operating expenses. The Bangalore-based public sector lender had posted a net profit of Rs 126.73 Cr for the same quarter of last fiscal. The bank’s total income in the third quarter ended December 31, 2013, increased to Rs 2,874.60 Cr, from Rs 2,357.05 Cr in the year-ago period, the bank said. Provisions other than tax and contingencies during the quarter increased to Rs 159.41 Cr against Rs 102.72 Cr in the same period of last fiscal. At the same time, operating expense of the bank rose to Rs 456.39 Cr during the quarter compared to Rs 319.18 Cr. As of December 31, the bank’s portfolio quality improved, with gross NPAs rising to 2.67% of gross advances against 2.91% a year ago. Its net NPAs during the third quarter declined to 1.57%, from 1.71% in the period a year earlier. During the three quarters (April-December) of 2013-14, the bank’s net profit declined by 22% to Rs 280.07 Cr against Rs 361.46 Cr in same period of 2012-13. Its total income rose to Rs 8,387.03 Cr for the nine months, from Rs 6,978.68 Cr in the year-ago period.

Govt may infuse capital of Rs.175 cr

 
Corporation Bank is planning to raise Rs.175 Cr from the government to meet the lender’s capital requirement. S R Bansal, chairman and managing director, Corporation Bank, said that during the fiscal, the government had infused Rs.450 Cr and will pump in another Rs.175 Cr by end of the fiscal. Speaking at the launch of bank’s SME loan centre in Chennai, Bansal said with the proposed infusion, the government’s stake will increase to 63% from the current 58%. Bansal said the bank would focus on retail, SME and agriculture. Currently, the retail portfolio accounts for 15% of the total credit portfolio and the plan was to increase it to 25% in the next 12 months. To boost lending to these sectors, specialized centres for each of the businesses are being set up across the country.

Corporation Bank CMD speaks

 
SR Bansal, CMD of Corporation Bank, is a banking industry veteran with more than three decades of experience. Known in the industry circles for his result-oriented approach and quick decision-making, Bansal assumed charge of Mangalore-based Corporation Bank in October 2013. In an interview he said that he is now focused on five areas for growth. According to him, the overall performance of the financial sector in general and the banking sector in particular has been impacted. “The credit and deposit growth in the current fiscal has been moderate so far, but we expect some improvement in the last quarter, which is the busy season” he said. In this environment, retail, agriculture and SME (small and medium enterprise) sectors offer good potential and we have made efforts to improve our business in these segments. I have advised our field staff to focus on five important areas, he added. Mobilising CASA deposits; quality credit growth with focus on agriculture, retail and MSME; expansion of branch and ATM network and alternative delivery channels; customer acquisition, especially Next-Gen customers; and improvement in asset quality, according to him are the major focus areas for the Bank.

Feb 1, 2014

Union Bank of India Q3

Union Bank of India posted a 16% growth in the third quarter net profit helped by treasury gains and higher income from its retail loan portfolio. The Mumbai-headquartered public sector lender posted a net profit of 349 Cr in the three months period ended December 31, 2013 against 302 Cr, a year ago. The bank said the growth was due to its focus on the retail, agriculture and micro, small and medium enterprises businesses. Total income rose 18% to 8,230 Cr. Total deposits grew 19% to 2,85,125 Cr, while total advances increased 20% to 2,27,745 Cr. Revenue from treasury operations increased to 2,173 Cr against 1,729 Cr, a year ago. The bank’s gross non-performing loans (NPA) increased to 8,776 Cr (6,384 Cr, a year ago). As a percentage of total loans, gross NPA’s grew to 3.85% from 3.36%, a year ago.

Punjab National Bank Q3

 
Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.

Punjab National Bank Q3

 
Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.

Punjab National Bank Q3

 
Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.

Jan 31, 2014

State Bank of Travancore Q3

 
Public sector lender State Bank of Travancore (SBT) posted a 43% drop in net profit at Rs 256 Cr for the nine-month period ended December 31, 2013, this financial year, as against Rs 449 Cr for the same period last year. Total income during the period saw a 15.45% growth at Rs 7,785 Cr, when compared with Rs 6,743 Cr a year ago. NII rose 13.43% to Rs 1,767.76 Cr from Rs 1,558.43 Cr last year. Operating profit increased 6.65% to Rs 1,030 Cr from Rs 965 Cr. The capital to risk weighted assets ratio (CRAR) during the period under review stood at 10.03% under the Basel III framework. The regulatory minimum prescribed by the RBI was at 9%. Gross NPAs increased to 4.41%, as against 3.04% while Net NPAs stood at 2.73%, when compared with 1.83%.

Bank of India Q3

A sharp increase in provisions for bad loans hurt Bank of India’s net profit, which dropped 27% in the third quarter ending December 2013 at Rs. 586 Cr. Provisions or amount set aside for stressed assets, jumped 53% to Rs. 1,404 Cr from Rs. 916 Cr in the corresponding quarter of the last fiscal year. Further, provisions rose as restructured assets worth Rs. 298 Cr had to be declared as non-performing according to the RBI’s classification norm. “Without these provisions, our profit would have been boosted by Rs. 110 Cr,” said VR Iyer, CMD of the bank. Asset quality improved marginally with gross non-performing assets ratio as a percentage of total advances at 2.81% as on December, 2013 from 3.08% as on December, 2012. Net interest income rose 18% and non-interest income increased 17% year-over-year. Total advances grew 25% driven by robust growth in agriculture, corporate and retail portfolio.

Jan 30, 2014

Award for Corp Bank

Corporation Bank has been awarded the second runner-up in the IBA Banking Technology Award 2012-13 for the ‘best use of mobility technology in banking’ under the category of public sector banks. SR Bansal, Chairman and Managing Director, received the award from Raghunath A Mashelkar, Chairman, National Innovation Foundation, in Mumbai on January 27.

Indian Overseas Bank Q3

IOB has reported a 35% drop in net profit at 75 Cr for the quarter ended December 31, 2013, against 116 Cr posted for the comparable previous year quarter. M Narendra, CMD of the bank, attributed the fall in net profit to higher provisioning towards bad debts and restructured accounts. The bank reported a slippage of 1,615 Cr during the quarter. According to Narendra, the bank provided 690 Cr for bad debts this quarter against 486 Cr in the previous quarter, and hence the coverage ratio was close to 57%. Total income went up by 6% to 6,190 Cr (5,846 Cr). “The year so far has been very challenging. And we have been focussing on recovery, and have recovered 206 Cr during the period,” he said. The bank’s net interest margin went down to 2.26% for the period, from 2.39% in the previous year period. Gross non-performing assets rose to 9,168 Cr (5.27%) during the quarter from 6,515 Cr (4.13%) last year. Net NPAs increased to 5,481 Cr (3.24%) for the quarter under consideration from 3,595 Cr (2.33%).

ICICI Bank Q3 profit rises 13%

ICICI Bank posted a 13% increase in net profit at 2,532 Cr for the December quarter, on stable interest income and healthy loan growth in the retail segment. Chanda Kochhar, MD and CEO, said that but for the provisions of 215 Cr towards additional deferred tax, the profit would have grown 22%. Provisions towards bad loans during the quarter rose 88% to 695 Cr from 369 Cr a year ago. Net interest income was at 4,255 Cr, up 22%. Non-interest income was up 26% at 2,801 Cr. The bank made a treasury profit of 447 Cr during the quarter, compared to a loss of 72 Cr in the second quarter. Despite the hike in policy rate, ICICI Bank expects to sustain its net interest margin as the bank’s dependence on short-term funding is low. Overall, the loan portfolio increased 16%, driven by 22% growth in retail advances. Given the challenges in the economic climate, the bank moderated its corporate loan growth to 7% (year-on-year) in the December-quarter, against 11% in the preceding quarter. Total deposits witnessed 11% growth including one-time deposits inflow of $2 billion raised via the FCNR (B) route. NPAs in net terms, worsened to 3,118 Cr compared to 2,182 Cr at Dec 31, 2012.

Jan 28, 2014

Third Quarter Review of Monetary Policy 2013-14 : Statement by Dr. Raghuram G. Rajan, Governor, Reserve Bank of India

Good morning and welcome to the Reserve Bank.

Today, on the basis of an assessment of the current and evolving macroeconomic situation, we have decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 8.0 per cent.

2. Let me first address the balance of risks that confronts us in the evolving macroeconomic outlook. The slowdown in the economy is getting increasingly worrisome. Our current assessment is that growth is likely to lose momentum in Q3 of 2013-14, with industrial activity in contractionary mode, mainly on account of manufacturing. Lead indicators of services also suggest a subdued outlook, barring some pick-up in transport and communication activity. On the other hand, agricultural performance has so far been robust, and the strong pick-up in rabi sowing indicates that this should be sustained.

RBI surprises with 25 basis points rise in Repo Rate


 
Third Quarter Monetary Policy Review 28th Jan 2014

Mr. Raghuraman Rajan, Governer of Reserve Bank of India surprised the Banking circle with

Increase in the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 8.0 per cent; and consequently, the reverse repo rate under the LAF stands adjusted at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent.

But the cash reserve ratio (CRR) of scheduled bankskept unchanged at 4.0 per cent of net demand and time liability (NDTL).

The banking circle and the market was expecting the RBI Governer would keep the rates unchanged.

Following the recommendation of the Dr. Urjit Patel Committee, monetary policy reviews will ordinarily be undertaken in a two-monthly cycle, consistent with the availability of key macroeconomic and financial data. Accordingly, the next policy review is scheduled on Tuesday, April 1, 2014.

Allahabad Bank net rises 4.6% to

Allahabad Bank reported a 4.6% increase in net profit to Rs 325 Cr for the quarter ending December 2013, compared to the same period last year. While net interest margin (NIM) remained flat at 2.75%, a 59% jump in ‘other income’ at Rs 542 Cr, due to “recoveries in written-off accounts”, contributed to profit growth. During the quarter, NPAs worth Rs 389 Cr were sold to asset reconstruction companies. According to the bank’s CMD Shubhalakshmi Panse, profits were subdued on account of higher provisioning for NPAs, possible wage revision and mark-to-market losses. Provisions and contingencies rose 29% to Rs 557 Cr. The provision coverage ratio was 42.93%. During the period, gross NPAs rose 256 bps to 5.47% (from 2.91%) of total advances. Net NPAs stood at 4.19%. In absolute terms, gross NPAs jumped 113% on a yearly basis to Rs 7,512 Cr, while net NPAs rose 128% to Rs 5,651 Cr.