Class Room

ATM frauds/crimes This article aims at alerting those who use their ATM/Debit cards. In this world fraud can take place in any form. We should be ever vigilant to protect ourselves from that frauds. The technology has paved the way to many frauds. Today’s fraudsters are white collard people sitting somewhere and steeling from your pocket your hard earned money. E-mail and Internet related fraud schemes are being perpetrated with increasing frequency, creativity and intensity. A few methods adopted by fraudsters are; Skimming: Here the fraudsters make counterfeit ATM cards by using a skimmer, which is s card swipe device that reads the information on a consumer’s ATM card. Scammers insert onto an ATM, ready to swipe information from unsuspecting customers. They take a blank card and encode all the information from an ATM card when they swipe The skimmer catches the PIN through a small camera mounted on the ATM. Lebanese Loop: Here fraudsters insert a portable steel loop into an ATM card slot. The fraudster usually approaches the victim while at the machine, and poses as the person next in the line. Victims are advised to enter their PIN three times and then hit cancel to get the machine to accept the cards. The fraudster is able to memorize the PIN for future use and the machine keeps the card because of the excessive number of attempts to enter the correct PIN. The victim cannot get back the card as it is held in the loop. When the victim leaves the fraudster removes the loop and he has both card and pin. Spoofing: Here the attacker creates a misleading context to trick victim into making an inappropriate security relevant decision. For example, fraudster have set up bogus automated teller machines, typically in public areas or shopping malls. The machines would accept ATM cards and ask for PIN codes. Once victim gives the information. Fraudster has enough information to steel the money. Pretexting: Here the fraudster has some information about you and wants to have more information so that he can steel your money. He claims to be from victims bank and makes calls to victim to provide the needed information. Many a times victim provides the needed information and fraudster can make merry on that. Phishing: Here the fraudster sends emails at random, purporting to come from a genuine company operating on the internet and this mail requests the victim to provide his personal information like password etc to update the database. The link provided in the mail takes the victim to look alike website of the bank. When the victim provides the required information, fraudster can steel the money at his will. Protect yourself: While using ATM see that no extra fitting is attached to Machine if any inform the security or the contact number of the bank provided on the ATM. Never take the help of third person to operate your card. Never disclose your PIN to anybody. Never keep your PIN and card at same place. Be cautious when third person comes to help you generously. Never disclose your personal information over phone to bank unless you know Cent percent that this is genuine call. Banks usually never call/mail you to take your personal information, when you receive Such call/mail take his number and confirm/inform the bank.

No RBI subsidy to banks for ‘no frills’ accounts

The Reserve Bank of India (RBI) has ruled out support or subvention to banks for the opening of ‘no frills’ accounts as part of the nationwide financial inclusion project. Speaking after inaugurating the biometrically- enabled smart cards of Canara Bank, the RBI Deputy Governor, Ms Usha Thorat, said, “Banks stand to benefit through financial inclusion and they are prepared to incur the costs for the purpose.” Financial inclusion, she said, allowed the State governments to dispense social security, subsidies and pensions directly to the beneficiaries through their bank accounts. She also said that for the last financial year, about 60 million ‘no frills’ accounts had been opened by the public sector banks. These cards allowed customers to use Automatic Teller Machines, especially in the rural regions where literacy rates were low. Customer identification is done on the basis of finger prints. These cards are estimated to cost anywhere between Rs 80-100 each. Mr M.B.N. Rao, Canara Bank Chairman and Managing Director, said that Canara Bank intended to complete banking inclusion in 1639 villages by the end of the current financial year and open at least 10 lakh ‘no frills’ accounts. The bank, he said, had opened about 6.5 lakh such accounts after completing the inclusion project in 23 districts where it was the lead bank

Fitch ties up with Dena Bank

Credit rating agency Fitch has tied up with Dena Bank to evaluate the credit quality of its existing and potential clients to help the bank prepare for Basel-II norms. Fitch has also signed MoU for bank loan ratings with Indian Bank, State Bank of India, Syndicate Bank and UCO Bank and was in the process of signing MoUs with other banks.

IBA resists CBI plan to probe private banks

India’s premier investigative agency the Central Bureau of Investigation (CBI) is seen attempting to extend its turf to cover private banks and corporates which remain largely outside its investigative domain. The agency has sounded out the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), which represents the interests of a multitude of banks, on whether private banks and corporates could be brought under the ambit of the investigative agency. CBI is now of the view that since private banks deal with public money, the onus is on the agency to check corrupt practices taking place in such institutions. IBA was of the view that CBI was not in tune with the nuances of banking. “Very often, a banker may take a commercial decision to grant a loan and the account holder may default due to various reasons such as a slowdown in the economy or the export-import policy and other reasons. This may not mean that the banker is in the wrong,” said a banker. There are other reasons for banks to resist the move. According to bankers, a probe undertaken by CBI drags on for long before the agency arrives at a logical conclusion. “Currently, as per the Banking Regulation Act and Prevention of Corruption Act, private entities are not covered under CBI. These two Acts will have to be amended to include private banks and corporates under CBI,” said former RBI executive director and now IBA chief legal advisor MR Umerji.

SBM logs into e-trading

Bangalore-based State Bank of Mysore on Wednesday launched e-trading services under which its customers will be able to access bank account, demat account and Internet trading account sitting at home. Initially, the facility is being offered through the designated branches of SBM at Bangalore, Mysore, Mumbai, Surat, Ahmedabad, Hyderabad and Chennai. The brokerage charges vary between 0.5 per cent and 1.5 per cent depending on the monthly turnover. The bank has tied up with SBI Cap Securities Ltd (SSL) for offering e-trading facility

Fed cut may prod RBI to soften rate regime

Bankers expect the Reserve Bank of India to soften its view on interest rates in the light of the US Federal rate cut. Domestic loans and overseas borrowing may become cheaper. “There may not be direct correlation between the US Federal Reserve action and the RBI’s moves. But the country is more tuned to global trends especially capital flows which has implications on exchange rate and relative difference in interest rates,” said a chairman of medium size public sector bank. S K Goel, chairman and managing director of UCO Bank, said the domestic interest rates could soften by about 50 basis points in the coming days. This also means reducing deposit rates to control cost.

Fed beats expectations; cuts key rate by 50 bps

The Federal Reserve cut a key interest rate for the first time in four years, seeking with an aggressive half-point move to prevent a steep housing slump and turbulent financial markets from triggering a recession. The Fed announced on Tuesday that it was reducing its target for the federal funds rate, the interest that banks charge each other, from 5.25% to 4.75%. The halfpoint reduction was double the quarterpoint move that many economists had been expecting. Commercial banks were expected to quickly match the Fed’s action by cutting their prime lending rate. The prime rate has been at 8.25% for the past 15 months.

Now, passbook update at ATMs

Now you can withdraw money and simultaneously get your passbook updated at the automated teller machine (ATM) instantly. Banks in association with NCR, a technology company, are planning to get the self service technology in India. “Every passbook update costs the bank Rs 70 to Rs 80. The updating of passbooks at ATMs is a good concept but in India we have major bandwidth problem. Banks will have to train customers, there could be instances where in the passbook could get stuck in the printer. The customer wait time at the ATM will also increase,’’ said a retail banking head of a private bank

BoI relocates site hosting from US to India

After facing attacks on its website, the Bank of India has shifted website hosting from United States to India in an attempt to have greater control over operations. The site was hacked on August 31, 2007 and remained inaccessible for many days. There were attempts to load multiple copies of malware, one of which had features to steal information such as user names and passwords

StanChart buys AmEx, expands India presence

Standard Chartered Plc today reached an agreement to acquire US-based American Express Bank Ltd for about £431 million ($860 million) in cash - a deal that would give the British banking major additional branch licences in India. American Express Company (AXP), which agreed to sell its banking business American Express Bank to UK's Standard Chartered, said the sales does not include its primary card and travel-related businesses.

Lakshmi Vilas goes live with RTGS

Lakshmi Vilas Bank has gone live with RTGS (Real Time Gross Settlement) transactions across its 120 Core Banking Solution enabled branches. This facility would enable LVB customers in faster transfer funds between banks, better fund and liquidity management and considered more secure. The bank has established a primary site for RTGS at Chennai and a disaster recovery site at Mumbai.

Sekhsaria hikes stake in Centurion Bank

Radha Madhav Investments, the investment arm of Narottam Sekhsaria, has increased its stake in Centurion Bank of Punjab by 0.66%. The company purchased 1 crore shares of the bank from Citigroup Venture Capital International Growth Partnership Mauritius, through a bulk deal on the Bombay Stock Exchange. The total size of the transaction was around Rs 40.46 crore. Following this transaction, the stake of Radha Madhav Investments in Centurion Bank of Punjab has risen to 3.21%.

IndusInd Bank rejigs loan portfolio

IndusInd Bank is planning to re-balance its retail portfolio by reducing its dependence on vehicle financing on account of the rising interest rate risks. The bank had earlier decided to offer personal loans only to customers with corporate salary accounts due to fears of defaults. “As a part of our overall strategy, we want to reduce the share of vehicle finance loans in our total loan book to about 40 to 45 per cent from the existing 58 per cent,’’ said managing director, Bhaskar Ghose. Over dependence on a particular business segment could expose a bank to the risk of credit concentration. "These loans are 2 to 3 years, fixed rate loans. Attempts to convert these fixed rate loans to floating rates have not been accepted by the market. Hence, there is a interest rate risk in this business segment," added Ghose. Fitch ratings has downgraded IndusInd Bank (IBL’s) rating citing weak financials compared with its peers and continued vulnerability in a rising interest rate scenario. The proportion of fixed-rate retail loan stood at 60 per cent, while wholesale term deposits constituted 75 per cent of the bank’s total deposits.

Andhra Bank hikes rates to woo short-term bulk deposits

Andhra Bank has raised the interest rate on the certain short-term buckets by up to 200 basis points for large-sized (read bulk) deposits. This is being done to replace deposits, which are due to mature. “There is going to be outflow of some deposits on maturity. We want to replace them at a lower cost,” said a bank official. The public sector bank will offer 8% on 91-119 days deposits compared with 6.50% earlier and 8.50% on 120-179 days deposits from 6.25% earlier.

Bank of Maharashtra turns 72

Bank of Maharashtra, which was registered on September 16, 1935 with an authorised capital of Rs 10 lakh, celebrated its 73rd foundation day on Monday. The bank launched two new schemes to coincide with its Foundation Day. The Maha Suraksha Deposit Scheme provides life insurance to savings/current/term deposit account holders between 18 and 59 years of age, under a one-year renewable term insurance plan of LIC of India. The Maha Grih Suraksha Scheme provides life insurance cover to the housing loan borrowers of the bank through LIC under “Group Mortgage Redemption Assurance Scheme” (GMRA).

Fed may cut rates

The Federal Open Market Committee, which meets Tuesday, is widely expected to act in the face of the worst housing slump in decades, which has led to rising mortgage defaults and a tightening of credit standards that threatens the overall economy. A growing number of analysts say they expect the FOMC, which has held its federal funds rate at 5.25 per cent since June 2006, to cut the benchmark rate by 25 to 50 basis points.

SBI associate banks staff strike

The State Sector Bank Employees Association (SSBEA), an umbrella organization of six SBI associate banks, has called for a strike on September 27, to oppose any attempt of merger with SBI. The union is opposed to consolidation of associate banks with SBI as the merger is not in the interest of the economy and banking sector, SSBEA central committee member Mr V B Gupta said.

China hikes interest rates

China's central bank announced on Friday its fifth interest rate hike this year, raising both deposit and lending rates by 27 basis points. After the hike, which takes effect on Saturday, the key one-year lending rate will be 7.29 per cent.

ICICI Bank's training programme

ICICI Bank has announced a nation-wide initiative called "Probationary Officer Programme' aimed at attracting bright graduate students to pursue a career in banking. Applications will be invited from graduates across the country and aspirants who are selected under this programme will go through an intensive one-year residential training programme. They will also have an opportunity to pursue an e-MBA while working and costs incurred would be borne by ICICI Bank.

IOB in talks for tie-up with another bank

Chennai-based Indian Overseas Bank is looking for a tie-up with another bank to expand its business and reach. Mr S.A. Bhat, Chairman and Managing Director, IOB, said, “Talks are at a very formative stage. We will tie up with a bank that will complement us in terms of business and geographies.” Mr Bhat said that the agreement would be on the lines of the alliance between three public sector banks - Oriental Bank of Commerce, Indian Bank and Corporation Bank, which was signed last year.

Tools RBI uses to contain inflation:

Cash Reserve Ratio This is the portion of funds that banks have to retain with the Reserve Bank. When the RBI increase this percentage, the amount actually available with the commercial banks comes down The RBI increases the CRR to draw out exess money from the banking system and thus check increase in prices. Bank Rate This is the rate at which the BRI lends to other banks. If the RBI increase its lending rate, the ripple effect will be felt across all the other banks that will hike lending rates to continue making profits. Repo Rate If banks face any shortfalls of funds they borrow from the RBI. Repo rate is the rate at which banks borrow money from the RBI. If the RBI reduces repo rates, it will be cheaper for the banks to borrow money. On the other hand, if repo rates go up, borrowing becomes expensive. Reverse Repo Rate: The RBI can borrow money from the banks and offer them a lucrative rate of interest. This is called the reverse repo rate and banks will be very glad to have their money with the RBI for a good interest rate as the money is safe here. When the reverse repo rate is increased, banks find it more attractive to park their money with the RBI, and hence money is drawn out of the system.

Housing Loan Rates

HOusing loan Rates (floating rates) Bank 0to5years 6to10years Over10years Canara Bank 10.75 11.00 11.25 Bank of India 9.50 10.00 10.25 Corporation Bank 10.00 10.50 10.75 Syndicate Bank 8.75 9.25 9.50 Federal Bank 10.50 11.00 11.00 IDBI Bank 11.00 11.00 11.00 ICICI Bank 12.00 12.00 12.00 Vijaya Bank 9.25 9.75 10.00 SBI 10.25 10.75 10.75

RRBs can now attach properties

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act 2002 has been extended to the regional rural banks (RRB) too. Under the Act, banks can now exercise the power to take possession of securities and sell them without the intervention of courts. This would enable RRBs to improve their recovery performance. Karnataka Vikas Grameena Bank (KVGB) senior manager said the bank plans to impart suitable training to all its 401 branch managers on the provisions of the Act so as to enable them to make an effective impact on defaulting clients. He said the bank would enforce the Act against wilful defaulters as it provides power to take possession of securities and sell them without waiting for court directions or police action.

Banks told not to vie for creamy loans

The Reserve Bank of India (RBI) has warned banks against competing to lend to top-rated corporates under the Basel-II regime, saying it could squeeze their margins. The new capital norms require banks to set aside lower capital for loans to corporates with higher credit ratings. Under Basel-II, the risk weight for loans to AAA-rated companies is just 20 per cent against 150 per cent for BB or lower-rated companies. This means banks would have to provide only Rs 1.8 of capital for every Rs 100 lent to an AAA-rated corporate, while they would need to set aside Rs 13.5 of capital for loans to corporates rated BB or lower

PNB picks credit card partners

PNB decided to join hands with American International Group (AIG) for its credit card business.The bank said that its board of directors has approved the setting up of a joint venture bank in Bhutan and the upgradation of Representative Office in Shanghai in China to a branch. PNB has decided to rope in Venture Infotech Global Pvt Ltd - American International Group (AIG) Consortium as joint venture partner for the proposed credit card business subject to approval of the RBI and the Central Governement.

Banks in a position to meet Basel II norms’

The Basel II norms might lead to an increase in the overall regulatory capital requirements for the banks, particularly under the simpler approaches adopted in India, if the additional capital required for the operational risk is not offset by the capital relief available for the credit risk, said Mr V. Leeladhar, Deputy Governor, Reserve Bank of India. Mr Leeladhar was speaking on the implementation of Basel II. He felt that the Indian banks are adequately prepared for its implementation. “We have been scrutinising the progress of every bank for each quarter during the last two years and we are confident that banks are now in a position to meet the requirements,” he said. Basel II is based on three pillars. The Pillar 1 stipulates minimum capital ratio and requires allocation of regulatory capital not only for credit and market risk but also operational risk, while Pillar 2 deals with supervisory review process and Pillar 3 with market discipline which focuses on the effective public disclosures to be made by the banks. The advanced approaches, being data-intensive, require high-quality, consistency and time-series data for various borrowers and facility categories for a period of five to seven years to enable computation of the required risk parameters. It also calls for robust risk management and technological architecture and the highest standards of corporate governance.

IndusInd unveils 3-in-1 account

IndusInd Bank has launched its freedom 3-in-1-account which enables buying and selling of stocks and shares and making payments at the click of a mouse. The account offers customers a whole new way of trading by helping them integrate their bank and demat accounts with their trading accounts, thereby ensuring seamless transactions.

City Union offers anywhere access

The Kumbakonam-headquartered City Union Bank has interconnected its entire network of 175 branches across the country, providing anywhere access to its customers. The bank has also introduced ‘CUB Classic Plus’ - a new current account with special features and freebies such as free cash remittances and deposits (unlimited), demand draft up to Rs 1 lakh/month at no extra cost, and inter-branch funds transfer for free up to Rs 5 lakh/day. These facilities would be available for customers maintaining a minimum quarterly average of Rs 1 lakh in their current account.

Pump more into PSBs or trim stake, Govt told

The Government should either bring down its equity stake in public sector banks below 51 per cent or infuse more capital into them. These banks will require more capital for the adoption of Basel II norms and to meet the growth of the real sectors of the economy, said Dr C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister. “As the growth is at a rapid pace, there is need for injecting equity or enlarging the shareholding of public sector banks. According to analysts, it is difficult to get an exact estimate of the capital requirement of the entire banking industry post-Basel II. Stressing the need for consolidation in the banking sector, which has so far been largely confined to a few private sector banks, Dr Rangarajan said, “As the bottomlines of domestic banks come under increasing pressure and the options for organic growth exhaust themselves, banks in India will need to explore ways of inorganic expansion.”

J&K Bank to launch apple insurance scheme

In a significant step to promote horticulture sector, Jammu & Kashmir Bank has decided to launch a first-of-its-kind apple insurance scheme in the state next week. Bank chairman Haseeb Drabu said J&K Bank has made an investment of Rs 800 crore in horticulture, which needs to be enhanced keeping in view the vast potential of the sector. Drabu also suggested minimising risk factors in the horticulture sector to prompt financial institutions to make greater investments in the sector. He said apple, cumin seed and saffron are ideal products for profitable investments.

Loan recovery may lose muscle

Failed wrestlers and goons are an integral part of the country’s sophisticated financial sector. They are used in large numbers to recover dues from customers. Not averse to using some muscle power on the customer, they invariably get the job done. If the Reserve Bank of India (RBI) has its way, these tough-talking, muscle-flexing men could soon find themselves without a job. The RBI is working on a comprehensive set of guidelines that will make banks responsible for ensuring that their recovery agencies do not recruit individuals with a criminal background. The RBI move follows a sharp rise in complaints from credit-card holders against the recovery methods used by some banks. Recently, the Supreme Court had also expressed its strong reservations against banks recruiting goons for recovering loan dues. This does not mean that defaulters will be protected against the banks. Banking sources said once the new guidelines were in place, all banks would have to ensure that recovery agencies did a thorough background check of their employees, including police verification. The proposed RBI guidelines will also require each bank to publish the names of its recovery agencies, including on its website. Collection agents would be barred from making calls from any other number.

Banks cannot ignore weak spots: S&P

The banking sector in India is highly fragmented, with 53 domestic banks accounting for about 93 per cent of the system’s assets. The top 10 banks together account for 66 per cent of the system (as of March 31, 2006), with the remaining 27 per cent market shared between 43 banks. The banking business benefits from scale, especially with the increasing role of marketing- and technology-based systems. With about three-fourths of the banking systems’ assets in the hands of 29 public sector banks, a meaningful consolidation is not possible until this segment is included in the process. Hence, it is the government that determines the extent and speed of consolidation in the Indian banking system.

SBI`s sale of gold coins

State Bank of India (SBI) on Tuesday launched its scheme of retail sale of gold coins/ingots to the public at 15 branches in Andhra Pradesh. Coins of 2 gm and 5 gm and ingots of 10 gm will be initially sold at these branches. TS Bhattacharya, MD, said the scheme assumed importance as the corporates have started gifting gold coins to their employees as part of their reward and recognition initiative besides growing importance of gold at social functions.

ICICI sells 5.3% stake in Andhra Cement

ICICI Bank Ltd has sold its 5.30 per cent stake in Andhra Cement Ltd thereby reducing its holding in the company to 0.35 per cent from 5.65 per cent. It sold 62,10,997 shares, according to the data available on the BSE.

ICRA to rate IOB loans, exposures

Credit rating agency ICRA said it has signed a MOU with Indian Overseas Bank (IOB) for assigning ratings to the latter's loans and other exposures. The ratings would be done under the standardized approach of the RBI's New Capital Adequacy Framework for Basel-II, the rating firm said in a filing to the Bombay Stock Exchange.

Gold Rates

2 Gram 2205 5 Gram 5240 8 Gram 8295 20 Gram 20570 50 Gram 49900 100 Gram bar 95100

ICICI Bank in ‘phishing’ net?

India's largest private sector bank, ICICI Bank, is now in for a rude shock after a battery of e-mails that said that the bank's website was a victim of phishing, by which fraudsters steal passwords, user-names and other personal data of customers by setting up fake look-alike websites of companies.

YES Bank chalks out mega expansion plan

YES Bank is set for a mega expansion drive. The Rana Kapoor-promoted bank plans to foray into retail broking space and also carve out separate subsidiaries for existing banking segments. Besides, the bank is also looking for private equity investments to enlarge and enhance operations. While the retail broking business will be incorporated as a separate entity, YES Securities, the online transaction platform will be branded YES Direct. In fact, the bank is already looking at private equity placement for the new venture.

CBoP allots 13 cr shares to LKB shareholders

Centurion Bank of Punjab (CBoP) has allotted 13.21 crore equity shares to the shareholders of Lord Krishna Bank (LKB), which was merged with itself recently. The Reserve Bank of India (RBI) approved the amalgamation of LKB with CBoP and had said all branches of LKB would function as branches of CBoP with effect from August 29.

Bank unions defer strike

Bank employees have decided to defer the nation-wide strike called for Wednesday following the Indian Banks’ Association (IBA) assurance to commence negotiations on the unions’ demands within a fortnight.

Branchless banking - reaching out to remote villages

"If I want to visit the nearest branch, I will have to spend a major portion of may day's earning as bus charge to and fro (nearly Rs.10-12). With that, half of my day's productivity will come down," says Zulaikha, who also nurses her ailing mother at home. For Zulaikha, fellow village Shobha is the banker. Shobha, a member of the local self-help group, is the Business Correspondent of Corporation Bank in Surinje village of Dakshina Kannada district. Her home serves as the extension counter of Tadambail branch, situated 8 km away from the village, providing basic banking facilities to the villagers. Zulaikha wanted to deposit a portion of her savings with the bank at Shobha's house. After enquiring about the health of her mother, Shobha asked Zulaikha for her smart card, to be inserted in the small device kept at her house. Unlike in the sophisticated systems, where one has to produce a PIN (personal identification number) and passwords, the customer is asked to place her left thumb at the place marked on the device. Voice guidance from the device confirms the authentication of the transaction to both the customer and the banking correspondent. This system is now proving to be a role model on how banking facilities can be taken to more un-banked areas in the country.

BoB hires US consultancy to groom talent

Bank of Baroda (BoB) has appointed US-based consultancy firm, Wright Management Grow, to groom 300 employees in the scale-4 and above segments, as future senior managers. “The level of loyalty and commitment is very high among this bunch, in spite of the poor compensation package, so we decided that it is necessary to provide them with good development program along with an attractive incentive from the total profit,” said A K Khandelwal, chairman and managing director. The bank has devised several training programs to train recruits at various levels. The bank has been imparting specialised training for 500 young people in new segments such as mutual funds, wealth management and others. At the same time, the bank is also training 100 people for frontline sales and customer services.

Recovery ratings of NPAs soon

Distressed or non-performing assets can now have a better market with the credit rating agencies offering to rate such assets. The rating agency will assign the rating on the basis of the possibility and extent of recovery from a defaulted or non-performing asset through its recovery rating mechanism. Mr Krishnan Sitaraman, Head - Fund Services & Fixed Income, Research, CRISIL, felt that the key benefit of the recovery rating was basically an independent third-party evaluation of the recovery prospects in defaulted assets or NPAs based on which the banks or asset re-construction companies could arrive at a valuation to their investments backed by such assets.

Vijaya Bank biz volume rises to Rs 66,000 cr

"With a lift in the volume of business of more than Rs 22,000 crore since March 2006, our bank has moved from a small bank to a mid-sized bank in the country. Within a year and four months, the business volume which stood at Rs 44,471 crore in March 2006 has risen to around Rs 66,000 crore at present. Our aim is to register a business volume of Rs 1 lakh crore by 2010 with focus on SMEs, retail business and infrastructure,” Mr T. Valliappan, Executive Director, Vijaya Bank, said.

Gold Selling Rates (09.09.2007)

2 Gram 2205 5 Gram 5245 8 Gram 8295 20 Gram 20570 50 Gram 49900 100 Gram bar 95100

HDFC, Fidelity pick Corp Bank stake in NSE

Corporation Bank has offloaded its stake in the National Stock Exchange by 0.27 per cent. Fidelity Trustee Corporation and HDFC Ltd have together picked up the stake sold by the bank for Rs 35 crore on September 7. Earlier this year a host of institutional investors such as Industrial Development Bank of India, State Bank of India, SBI Capital Markets Ltd, Corporation Bank, Union Bank of India, Bank of Baroda, Canara Bank and Oriental Bank of Commerce had sold part of their stakes in the NSE.

Foreign banks looking beyond metros

The Reserve Bank of India would like foreign banks to get a flavour of semi-urban India and the rural hinterland. The branches of foreign banks that have been approved between July 2006 and June 2007 are mostly in smaller towns and tier-2 and tier-3 cities. Of the 13 branches for which permission was given, only one branch belonging to Shinhan Bank has been allowed in New Delhi. Most foreign banks follow a strategy of first setting up base in metros – Mumbai, New Delhi, Kolkata and Chennai. Then, in the next stage, they move to the mini-metros such as Bangalore, Hyderabad, Pune and Ahmedabad. Foreign banks in India have got approval from the Reserve Bank of India to open 10 branches and seven representative offices during the July 2006- June 2007 period. There are currently 29 foreign banks operating in India with 268 branches. There are also 34 other foreign banks that have representative offices. The share of foreign banks in the business done in the country (deposits and advances) has been hovering between 5 - 7% during the past decade.

ICICI Bank ties up with City Union Bank

ICICI Bank has tied up with City Union Bank (CUB) to provide its Money2India (M2I) online platform services to CUB customers. Under the tie-up, the non-resident Indian (NRI) customers of CUB will be able to transfer funds to their beneficiaries (CUB customers) in India. Besides online transfer of funds to CUB accounts, the remitter can also request for issuance of demand draft payable at over 2,300 locations across the country

Andhra Bank to hire in a big way

Andhra Bank will be hiring about 2,000 personnel in different categories over the next three years to strike a balance between retirements and new business needs. “The human resource needs of banks are now varied. In line with the business growth, we will be hiring clerks, probationary officers, market/finance executives, legal officers, rural development/agricultural officers, IT professionals and analysts,” Mr Kalyan Mukherjee, ED, said. The bank, which has indicated its likely foray into insurance, would also be needing domain experts in insurance. “We are not looking at big institutes like IITs and IIMs for campus recruitment. We are focusing on mid-sized institutes to bring in rural people, as we believe in employment inclusion,” Mr Mukherjee said.

Syndicate Bank's Premium Savings Account

The Bank has introduced a Premium Savings Account at e-banking branches that combines full safety, easy liquidity and highest possible interest. The salient features of the scheme are as under A unique 'Sweep out, Sweep in' facility offered at our e-banking branches ensures that while the customer's money earns solid interest as a fixed deposit, it turns liquid to meet his urgent needs. That too at no extra cost. Average monthly balance of Rs.10000/-to be maintained in the Premium Savings Account. Balance available in the account in excess of Rs.10000/-on any day gets automatically swept out into a fixed deposit for 180 days in units of Rs.1000/-. In the event of shortfall in SB for meeting your clearing cheques or for other urgent needs, the fixed deposit is swept back into the Premium Savings Account in required number of units of Rs. 1000/- free of cost. No penalty is charged for breaking the fixed deposit prematurely. However, the amount swept out earns interest for the period run at the applicable rate. Even while breaking the fixed deposit, only the most recently converted fixed deposit is first broken to minimise interest loss to the customer. Only those amounts swept out of your Premium Savings Account are eligible for sweep in and not other fixed deposits. When fixed deposits mature at the end of 180 days, the Bank will renew the principal every 180 days while crediting the interest to the savings account. Rs.100/-per month is levied as service charges whenever the monthly average balance in the Premium Savings Account goes below Rs.10000/-

Canara Banks CanChamp Deposit Scheme

SB CANCHAMP DEPOSIT SCHEME Basically an SB deposit for children WHO CAN OPEN Children upto the age of 12 years (i.e. till 11 years, 364 days) WHAT IS THE MINIMUM DEPOSIT Initial deposit can be any nominal amount with a minimum of Rs.100/- RATE OF INTEREST As applicable to SB deposits. Presently 3.5% per annum CHEQUE BOOK Cheque books are not issued under the scheme JOINT ACCOUNT Joint accounts cannot be opened under the scheme OTHER FACILITIES • Nomination facility is available • C-Net Banking facility is available (For view only) • Loan eligibility card for educational loan as per the then prevailing educational loan scheme • Attractive Savings Box to cultivate the habit of savings among children • Attractive photo folder cum personal details with 16 pouches to store photos of the child and record memorable moments • Free collection of cheques/DDs gifted to the child upto Rs. 25,000/- per annum (In Indian Rupees or foreign currency) • Conversion of the account into regular SB account after the child attains majority

State Bank of Patiala offers e-trading

The State Bank of Patiala has launched a 3-in-1 account e-trading facility in association with SBICAP Securities Ltd. It is an online trading facility which will allow the account holders of the bank to trade on BSE and NSE - equity and derivatives segment without the hassle of running around to a broker’s office for placing orders. SBICAP will provide demat account and trading account to the bank’s account holders. Apart from account holders of State Bank of Patiala, SBICAP already offers its e-broking services to the account holders of State Bank of Indore and will extend similar services to the account holders of other SBI associate banks in the near future.

Award for Canara Bank CMD

The Hyderabad-based Institute of Practical Accountancy (IPA) has conferred ‘Lifetime Achievement Award’ on Mr B.N. Rao, Chairman and Managing Director, Canara Bank, for his professional excellence and contribution to the banking and financial sector. Prof K.C. Reddy, Chairman of AP State Council of Higher Education, presented the award to Mr Rao.

Allahabad Bank cuts home loan rates

Allahabad Bank has reduced interest rates on fresh housing loans under various maturity buckets by 1 per cent, both on fixed and floating schemes.

Bank as a neighbour

A survey by market research firm IIMS Dataworks shows that Indian consumers rarely distinguish between banks in their decisions to opt for the one over the other. They go for the bank that comes their way, for one reason or the other. "Only very high income groups make a choice to go to a particular bank, others just walk into the nearest bank branch,” says K C Chakrabarty, chairman and managing director, Punjab National Bank (PNB). About 60 per cent of the working population still do not have bank accounts, he added. While State Bank of India (SBI) dominates the mind space almost as a singular monolith, PNB’s brand recall seems to be in line with its status as the second largest public sector bank in the country. Among the relatively low income segments, the only private bank that has any significant brand recall is ICICI Bank

Bank of Maharashtra in pact with LIC

Bank of Maharashtra in association with Life Insurance Corporation of India has launched two products, Maha Suraksha Deposit Scheme and MahaGrih Suraksha scheme. Under the Maha Suraksha Deposit Scheme, deposit holders get life cover under a one-year renewable term insurance plan of LIC of India. Deposit account holders between 18 and 59 years of age, who opt for the scheme, would be eligible for an insurance cover of Rs 1 lakh on life, at a low premium. The Maha Grih Suraksha Scheme provides life insurance cover to the housing loan borrowers of the bank through LIC under “Group mortgage redemption assurance scheme” (GMRA).

Indian Bank revises rates on term deposits

Indian Bank has revised the interest rates on domestic term deposits with effect from September 1. Interest rate for the 7-14 days period for an investment of Rs 15 lakh is at 3.5%, while that for the same period for Rs 15 lakh to less than Rs 1 crore is at 4%. Interest rate for the 30-45 days period upto Rs 1 crore is at 4.5%. The bank has fixed interest rate on deposits for 46-90 days for Rs 15 lakh at 5.25% and for Rs 15 lakh to less than Rs 1 crore at 5.75%. Term deposits for 91-179 days for investment upto Rs 1 crore is at 6.5% and that for 180-364 days is at 7%. For a period of one year to less than three years, the interest rate is at 9%. For 3 years to less than 5 years, the interest rate is at 8.75% and for five years and above at 8.50%.

PSB Director resigns

Punjab and Sind Bank (PSB) Director, Mr Harcharan Singh Josh, has resigned from the board of the bank, which is fully state-owned. The Government order accepting his resignation was received by the bank a few days ago, sources in the Board said. Mr Josh, who was one of the five non-official directors in the bank’s board, had a face-off with the PSB Chairman, Mr R.P. Singh, over alleged favouritism in sanctioning Rs 150 crore loan without collateral and at lower interest rate to Orbit Resorts expansion project. The PSB Chairman had contended that politically affiliated directors were attempting to frustrate the debt recovery measures of the bank.

India's sub-prime market proves a prime opportunity

Like the US, India too has a subprime market and it is booming. The success of early entrants like Citi Financial and GE Money has encouraged several others to enter the consumer lending business, nearly half of which is a sub-prime market. These include players like HSBC (Pragati Finance), Stanchart (Prime Financial), Fullerton India, DBS Cholamandalam and Indiabulls. Industry sources say Barclays, Deutsche Bank and AIG are eyeing the segment, which includes private lenders like ICICI Bank and HDFC Bank, which entered in 2004. What’s attracting them is an estimated $10-11 billion market for unsecured credit, which is growing at 25-30 per cent, according to Citi Financial Managing Director Sandeep Soni. The smaller players are growing at 50 per cent or more. "It’s an untapped market. There’s an opportunity to expand the market like in telecom," said Rajeev Yadav, head of personal loans at GE Money. A typical sub-prime customer is the self-employed, neighbour-hood retailer or a trader who needs credit to buy goods and grow their business. He may be filing a tax return (most show an income of Rs 70,000-80,000), but it doesn’t truly reflect his cash flows. "Many of these people do huge business in cash; there’s no way it can be registered on paper. If he maintains an average bank balance of Rs 2,000-3,000 and that’s increasing or services an EMI of Rs 1,500 on credit card or another loan, it shows he has cash flows. Banking tells us about a guy’s character, about his cash flows."

Demand for home loans slowing down

The demand for home loans has slowed down over the past few months due to rising property prices and high interest rates. The number of applications for home loans and registrations of new flats have come down, say bank officials and analysts. The stricter prudential norms for the real estate sector have pushed up property prices across the country. According to Mr Sunil Rohokale, General Manager, Mortgage Finance and Real Estate, ICICI Bank. “Interest rates have increased by 250-350 basis points in the last 18 months. Also, the property prices have increased by as much as 40-50 per cent in the same period. Customers have been hit by a double whammy,” he said. Mr H.N. Sinor, Chief Executive, Indian Banks’ Association, said that there is need for some kind of relaxation of the prudential norms with regard to sectors such as housing, as the sector is seeing a slowdown.

SBH deposit mop-up drive

State Bank of Hyderabad (SBH) will launch a nation-wide ‘Deposit Mobilisation Utsav’ from September 1. During the one-month programme, an additional interest of 25bps per annum would be offered on all term deposits for a period of one year and above. Coinciding with the campaign, the bank would also be launching two new deposit products - Recurring Deposit Plus and Current Account Plus. These account-holders would be offered free Internet banking facility, free ATM/debit card, free multi-city cheques, and free accident insurance cover. The bank had set a goal of opening more than three lakh new accounts during campaign and mobilise over Rs. 3,500 crore of deposits.

Bank of Baroda cuts home loan rates

Bank of Baroda reduced the rate of interest on housing loans up to 50 basis points. The bank said the new rates would be applicable to all new housing loans sanctioned on or after September 1, 2007. The new floating rates for loans up to Rs 20 lakh range from 10 to 11 per cent for periods from five years to 25 years. For loans of above Rs 20 lakh, the rates vary from 10.25 per cent to 11.5 per cent. In case of fixed rate option, the revised rates on loans up to Rs 20 lakh range from 11.25 per cent to 12.5 per cent for periods from five to 15 years. For loans of more than Rs 20 lakh, the rates are between 11.5 and 12.75 per cent. The reduction in rates is merely to realign with the market.