News

BoB gets nod for full-fledged branch in Hong Kong (BL 29.08.06) Bank of Baroda has received licence from the Hong Kong Monetary Authority for conversion of its existing operations into full-fledged banking operations. As a branch, the new entity is permitted to accept retail deposits and grant loans to retail and small and medium enterprises segments, besides foreign currency term loans, syndicated loans, foreign currency convertible bonds and trade finance to corporates. Bank of Baroda now has a presence across 20 countries. The bank will roll out its Singapore operations through an offshore banking unit in Singapore in September 2006.

News

Karnataka Bank new ATM (BL 29.08.06) Karnataka Bank Ltd has opened an ATM at Bangalore City Civil Court. A bank release said that with this, the total number of the bank's own ATMs went up to 77.

News

No takers yet for troubled Rupee Co-op Bank (ET 29.08.06) The troubled Rupee Co-operative Bank, which will complete five years under an administrator in February ’07, has not found any takers. The fate of the bank’’s customers hangs in the balance as the RBI has now made it clear that elections cannot be held till inquiries are completed on its former directors. The RBI missive has put the state government in a bind because a cooperative bank - whose board has been superseded - can be managed by an administrator for a maximum period of five years. The board of directors of Rupee Co-operative Bank was superseded in February ’02, after they were charged of financial irregularities.

News

No takers yet for troubled Rupee Co-op Bank (ET 29.08.06) The troubled Rupee Co-operative Bank, which will complete five years under an administrator in February ’07, has not found any takers. The fate of the bank’’s customers hangs in the balance as the RBI has now made it clear that elections cannot be held till inquiries are completed on its former directors. The RBI missive has put the state government in a bind because a cooperative bank - whose board has been superseded - can be managed by an administrator for a maximum period of five years. The board of directors of Rupee Co-operative Bank was superseded in February ’02, after they were charged of financial irregularities.

News

Borrowed for 20 years? Pay for 38 (FE 29.08.06) Welcome back to the pocket-pinching era of high interest rates. You may not have realised it by now, but in the last 18 months, your home-loan rate has gone up 2 to 2.5%, depending upon your housing finance company. And if home loans statements are difficult to decipher, do take a closer look at your current statement, comparing it with the one 18 months ago. Chances are, you will shudder in horror. Your 15-year loan, at current EMI, has already got extended to 20 years. That is, if the interest rate is up only 2% from 7% to 9%. If the rate is up 2.5%, you will have to pay for 22 years and 6 months. If you took the loan at a little higher rate of 7.5% and it’s now 9.5%, your tenure is now 23 years. There’s worse news for those who have 20-year loans. If you borrowed at 7.5% for 20 years, your latest tenure at 9.5% is 43, yes, 43 years. Hypothetically, if you are okay paying the same EMI amount despite the rate hike, and your finance company does not mind risking the loan amount beyond your working life, you could pay that loan for perpetuity. Such a situation is called ‘negative amortisation’.

News

Report on fair bank charges soon (FE 29.08.06) A Reserve Bank working group, set up to formulate reasonable bank charges, is likely to submit its report in next 10 days. "The report is nearing completion and is likely to be submitted in the next 10 days", said member secretary of the working group Kaza Sudhakar, Concerned over the unreasonable levy of service charges by banks, RBI constituted a five- member working group in May