New Deposit

Bank of Baroda has increased its interest rate to 9.5 % on Fixed Deposits. This is a unique scheme which offers higher interest rates to customer for a short period of one year. The major attraction is that the scheme provides for investing for any amount as low as Rs.1000 and there is no lock-in period. The scheme takes effect from 18.05.07.Senior Citizens will get an additional 0.5% on fixed deposits under the scheme i.e.10 % p.a. Dena Bank launched a new Deposit scheme " Dena Diamond Deposit Scheme" to mark its 70th Foundation Day on 26th May 2007. The new scheme offers the depositors an opportunity to earn higher interest rate of 9.60 percent for deposits of maturity period of 700 days. The senior citizens will get 10.10 percent interest in this scheme. The minimum amount of deposit is Rs.10,000/-.The scheme also has a special feature of part withdrawal in multiples of Rs.5000/-.

News

State Bank of Travancore (SBT) has launched a new loan scheme for pensioners from military and related services. The scheme titled `Jai Jawan pension loan', will cover pensioners who retired at an early age from armed forces, paramilitary forces, coast guards, Rashtriya Rifles, CRPF, BSF, ITBP, etc. The scheme provides for loan of up to Rs 2 lakh or 48 times the monthly pension, whichever is lower Utkal university, Bhubaneshwar, is tying up with the country's largest private sector bank ICICI to impart training to students in banking, insurance and finance related aspects. The two entities will shortly sign a Memorandum of Understanding (MoU) to introduce a one-year diploma course on banking, insurance and finance. The course would be sponsored by ICICI. With ICICI planning to expand its operations in Bhubaneswar to a large extent the need for expert hands might have prompted the bank to sponsor such a course. Initially the course would admit around 25-30 students. Students passing out from the course would be recruited by the ICICI bank. The financial market will soon see the country’s biggest junk loan deal. State-owned Indian Bank has decided to sell all its bad loans at one shot. The Chennai-headquaterted bank has put on block its entire distress loan portfolio amounting to Rs 1,500 crore. Indian Bank chairman and managing director KC Chakrabarty said, “We have received bids on the auction of Rs 1,500-crore bad loans. The bank will shut the asset recovery cell which would free around 250 people. These officials would then be deployed for marketing other products.” Sources said that the bank had received five bids, including three from asset reconstruction companies. These are ICICI-promoted Arcil, UTI-promoted Asrec and the privately-held Pegasus Assets Reconstruction. Till now, the single-biggest bad loan transaction was from ICICI, when the country’s second-largest bank sold over Rs 1,400 crore to British bank Standard Chartered. Bidders said Indian Bank has indicated that it would prefer not to receive the entire income upfront from the bad loans selloff. Instead, the bank would like to receive the income over a couple of years In a rising interest scenario, these banks which engaged in a neck-to-neck battle for gaining more deposits finally landed up managing close to 29% of the software services giant’s monies tied up as bank deposits. Infosys redeemed its holding of Rs 684 crore in liquid funds in FY07, while deposit accounts rose to Rs 4,827 crore in the same year as against Rs 2,735 crore in FY06 - showing a 76.48% year-on-year rise. Infosys expanded the relationship with banks like Bank of India (Rs 504 crore), Bank of Baroda (Rs 503 crore), Punjab National Bank (Rs 179 crore), SBI (Rs 151 crore) and Bank of Maharashtra (Rs 51 crore), which gained as a result. In FY06, Infosys had placed funds with two PSU banks - Corporation and Canara Bank. While in the case of Corporation Bank, the quantum of deposits rose to Rs 302 crore in FY07 from Rs 126 crore in FY06, there was a marginal dip in the case of Canara Bank to Rs 503 crore in FY07 against Rs 504 crore in FY06.

Sunday Special

National Electronic Funds Transfer System (NEFT) This is a nationwide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch. But not all the bank branches are its members. As on January 31, 2007, 18500 branches of 53 banks are participating. The system uses the concept of centralized accounting system. Each participating bank has to designate one branch at Mumbai to handle NEFT transaction. All the transactions originated by that bank has to be routed through and all the transactions to be responded by that bank has to be routed through that designated branch. The funds are available to the beneficiary on the same day or the next day depending on the time of settlement Process Flow: • The Remitter fills in the NEFT application form giving the particulars of the beneficiary (Bank Branch, Beneficiary’s name, Account type and Account number) and authorizes the branch to remit the specified amount to the beneficiary by raising a debit to the remitter’s account. • The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its service centre of NEFT. • The service centre forwards the same to the local RBI (National Clearing Cell, Mumbai) to be included for the next available settlement. • The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of the net debit or credit for passing onto the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to the banks. • The receiving banks process the remittance message received from RBI and affect the credit to the beneficiaries account. As of now, NEFT is settled in six batches at 0930,1030,1200,1300,1500 and 1600 hours on weekdays and 0930,1030 and 1200 on Saturdays. At present there is no Value Limit for individual transactions and RBI has waived the processing charges till March 31, 2008. Levy of service charges by banks is left to the discretion of the respective banks. Another important aspect NEFT uses is IFSC codes ( Indian Financial System Code) which is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit codes with first 4 characters representing the banks code, the next character reserved as control character (presently 0 appears in the fifth position) and the remaining 6 characters to identify the branch. The IFSC codes will normally printed on Cheque Book or Pass Book or the customer can call his bank branch and get the same. Sending remittances abroad using NEFT is not possible but one can send/receive funds from/to NRI accounts subject to applicability of provisions of FEMA. In case of non-credit or delayed credit you can contact your branch or if the issue is not resolved satisfactorily, the Customer Service Department of RBI may be contacted on cgmcsd@rbi.org.in or write to The Chief General Manager, Reserve Bank of India, Customer Service Department, 1st Floor, Amar Building, Fort, Mumbai-400001 For any other queries you can visit RBI web site www.rbi.org.in