UCO Bank Festive Offer on Housing and Vehicle loans

UCO Bank is offering 50% concession in processing charges on housing loan during its Grand Festive Offer. The offer period has already started on 20/09/2012. The bank is offering  10.50% on Housing loans. The vehicle loans are offered at 10.75%. Processing charges are fully waived for vehicle loans. If customer avails both housing and vehicle loans during offer period then processing charge is fully waived for both loans.

SBI bumper offer on Savings Bank accounts

State Bank of India has given bumper offer on festive season to those who intend to open Savings Bank account. The main offers are

1. Personal Accident Insurance of Rs.4 lakh for just Rs.100 per year.
2. No minimum Balance.

The second point is not important as most of banks are offering the same. But Rs.4 lakh insurance at a permium of Rs.100 per year is worth considering.

other features of Savings Accounts offered are;

1. Multi-city cheques
2. Net Banking and Mobile Banking
3. Free transfer of funds between accounts in SBI Branches
4. Auto-sweep facility
5. ATM cum Debit card
6. No Charges for pass book
7. Free withdrawal at over 27,000 State Bank Group ATMs

Mr. Pratip Chaudhari - Chairman - State Bank of India

                                       Mr. Pratip Chaudhuri , Chairman , State Bank of India

Banks paying more than 4% on Savings Bank Deposits

The Reserve Bank of India (RBI) has deregulated the interest on Savings Bank (SB) Deposits. Before that RBI used to regulate the rate of interest that is to be paid to SB deposits. Before deregulation the rate of interest mandated by RBI was 4%. The deregulaltion came into effect from 25the October 2011.

If you are aware the RBI also changed the way the banker's used to pay interest on SB deposits wef 1st April 2010. Before that date the bankers' used to pay interest on lowest balance in SB account from 10th to last day of month. From 1st April 2010 the bankers' are paying interest on daily closing balance.

None of Public Sector Banks has changed the rate on SB deposits after deregulation. In private sector banks also except few banks no other banks have changed the rate. The list of banks offering more than 4% on SB deposits is given below;

Interest payable to those customers who maintain balance of upto Rs. 1 lakh.

Indus Ind Bank 5.5%

Yes Bank 6%

Kotak Mahindra Bank 5.5%

Karnataka Bank 5%

Interest payable to those customers who maintain balance of above Rs. 1 lakh

Yes Bank 7%

Indus Ind Bank 6%

Kotak Mahindra Bank 6%

Saraswat Co-op Bank 6%

Kotak Bank is actively promoting the increase through TV commercials and Yes Bank is doing so in News Paper Ads.

Its interesting to see that HDFC Bank, ICICI Bank and Axis Bank has not increased the rates.

　

　

HDFC Bank - Investment opinion

HDFC Bank (Rs 621.9): This bank appears to be operating in another planet. Even as most bank stocks are trading well below their 2008 peaks, this stock trades 72 per cent above this peak. Both medium and short-term trends are up in the stock.

Investors should therefore ride this uptrend with suitable stop-loss to protect their profits. Stop-loss for short-term investors can be at Rs 580 while medium-term investors can hold with deep stop-loss at Rs 520.

 

The third leg of the uptrend from the 2009 low of Rs 156 is currently in motion. This leg has the targets of Rs 615 and then Rs 748.

 

If the stock manages a clean break beyond Rs 650, it can move on to Rs 748 over the long-term.

Long-term investors can stay invested as long as the stock trades above Rs 450.

 

Corrections to this level can also be construed as an opportunity to accumulate this stock by long-term investors.

 

(As appeared in Business Line dtd 07.10.2012)

HDFC Bank increases credit card payment fees through Cash/ATM

If you have HDFC Bank credit card and usually make payment of your card dues by cash at HDFC Bank outlet or ATM then from next time be ready to pay double the charges you are paying now, as HDFC Bank will charge Rs.100 towards each credit card payment received in cash or ATM with effect from November 1, 2012.  The bank at present has credit card customer base of 56 lakh or 32% of overall credit card market size in the country.

New ED for Bank of Baroda

Mr. Ranjan Dhawan has been appointed as  an Executive Director of Bank of Baroda.

Mr. Dhawan, who is now Chief General Manager at Punjab National Bank, is expected to assume charge of his new role on November 1.

 

New Executive Director for Oriental Bank of Commerce

Oriental Bank of Commerce has a new executive director in Bhupinder Nayyar. Nayyar, who was General Manager at Bank of India, assumed charge on Friday. He comes in the place of S.C.Sinha, who superannuated on July 31.

New Executive Director of Andhra Bank

 

Satish Kumar Kalra has been elevated as Executive Director of Andhra Bank from his present assignment as General Manager, Treasury Operations of Allhabad Bank. Mr. Kalra joined the banking industry in 1981 as Probationary Officer in Allahabad Bank and worked in various capacities. 

SBT campaign for MSMEs

State Bank of Travancore (SBT) has launched a special campaign for micro, small and medium enterprises (MSME) from October 1 to January 31, 2013. Those taking loans during the period will get concessions in interest rate and processing charges. MSME meets and entrepreneurial development programmes will be convened at various centres during the period. The bank is targeting a growth of Rs 4,000 Cr under the MSME segment during the year 2012-13.

Federal Bank to decide rate cut

Private sector lender Federal Bank will decide on a cut in interest rates on retail loans next week. The move will be decided after meeting of their ALCO committee. The Kochi-based bank has announced that it will offer home loans at its base rate of 10.45% from October 3 to October 18 as part of the 67th anniversary celebrations. Earlier, the minimum rate of interest on home loans was 10.78%.

New CMD of Allahabad Bank

Shubhalakshmi Panse has taken charge as the Chairperson and Managing Director of Allahabad Bank effective October 1. She earlier served as the Executive Director of Vijaya Bank. Panse was responsible for the administration and business development of Vijaya Bank for a period of two years. Panse, who joined Bank of Maharashtra as probationary officer, has worked in almost all key segments of banking including recovery, credit, fund management, law, accounts, IT and business process re-engineering.

Recruitment - Federal Bank

Federal Bank has invited applications for the post of Probationary Officers. But the applicant must successfully complete one year Post Graduate Diploma in Banking and Finance at Federal Manipal School of Banking. The minimum qualification for joining is Graduation with minimum 60% marks. The maximum age is 26 years.

You have to apply online for joining the course.

Last date for application is 15.10.2012

To apply for the job click here

ICAI urges RBI to appoint Auditors for Private Banks

Institute of Chartered Accountants of India (ICAI) has urged that RBI should appoint Auditors for Private Banks. Now the management of Bank is appointing the Auditors.

Government to sell its stake in Axis Bank

The government is on the way to start selling the stake in Axis Bank. The government holds 23.6% of shares of Axis Bank. The shares are held now by SPV (special purpose vehicle) which inherited this from UTI mutual fund.

Quarterly Results season starts

With the closure of September quarter banks have already announced dates for declaration of quarterly results;

IndusInd Bank on October 10

HDFC Bank on October 12

Karnataka Bank on October 17

Banking Stocks which are trading at 52 week high on 1st October 2012

The following banking stocks are trading at 52 week high

ING Vysya Bank 415.50

IndusInd Bank 364.90

Kotak Mahindra Bank 651.80

Yes Bank 395.00

Dena Bank 109.50

Rakesh Jhunjhunwala's views on Banking Sector

Excerpts from conversation with Punita Kumar Sinha on ET Now;

Q: In the banking sector, which is also indirectly like as domestic consumption story, I notice you have only one bank, Karur Vysya Bank.

A: No, I also have Federal Bank. But in Karur Vysya Bank, maybe, I think , I had invested Rs.50 lakh in 1993, now I think it is Rs.200 crore. I see now it is growing at 18-20%. It has a good management, is rewarding shareholders, has a good yield. I think Rs.400 is the price and Rs.16 is the dividend. So four rupees, a four percent yield. I don't trust the public sector banks. And the second thing is I don't want to invest less than Rs.50-Rs.100 crore in a scrip. firstlly, I don't have that kind of money to invest. Even if I have the money, the liquidity is not there. So, it is difficult to build positions.

Q: So, you have liquidity constraints and you don't like PSUs. But Federal Bank you like as well.

A: Yes. I have substantial investments. Banking will be 7-8% of my portolio.

Honourable Finance Ministers views on RBI rate cut and Bank consolidation

Excerpts from interview with Rohini Singh and Hema Ramakrishnan (ET)

Q: Do you think the RBI should start cutting rates now?

A: That is a call that the Governor has to take. In our view, government and monetary authority must point in the same direction and walk in the same direction. As we take steps on the fiscal side, the RBI should take steps on the monetary side.

Q: Are you in favour of bank consolidation ?

A: The main task is to recapitalise our banks, make them more technology driven, push them into aggressive financial inclusion and make them lend more to the bottom of the pyramid. We would need large-sized banks and, if that can be achieved by consolidation, so be it. The policy is to grant more licences and if required amendments to the Banking Regulation Act.

New IBA Chairman

Mr. K.R.Kamath, CMD of Punjab National Bank has been choosen as Chairman of Indian Bank's Association (IBA) wef 1st October 2012.

Recruitment - State Bank of India - Specialist Cadre

State Bank of India calls for applications from Indian Citizens for SBI Group under Specialist Cadre.

Important Dates:

On-line registration of Application form : 08.10.2012

Last date for on-line application :28.10.2012

Date of Written Test : 02.12.2012

Posts:

Post-Economist, Scale : Assistant General Manager (Scale V), For: SBBJ, Number of Posts : 1,
Maximum Age : 40

Post - Economist, Scale : Manager (Scale III), For : SBI, Number of Posts: 2, Maximum Age :35

Post - Chartered Accountant, Scale : Manager (Scale IV), For : SBBJ, Number of Post : 1,
Maximum age : 35

Post - Chartered Accountant, Scale : Manager (Scale III), For : SBM and SBBJ, Number of Post : 2, Maximum Age: 30

Post - Computer-Hardware, Scale : Manager (Scale III), For : SBH, Number of Post : 2, Maximum Age : 40

Post - Computer-Hardware, Scale : Manager (Scale II), For : SBBJ, SBH and SBP, Number of posts : 16, Maximum age: 35

Post - Computer-Hardwar, Scale : Asst. Manager (Scale I), For : SBP, Number of Posts: 9, Maximum age : 30

Post- Computer-Networking, Scale: Manager (Scale III) , For : SBH, Number of Post: 1, Maximum age : 40

Post - Computer-Networking, Scale: Dy. Manager (Scale II), For : SBH, Number of post : 3, Maximum age : 35

Post - Computer-Systems, Scale : Dy. Manager (Scale II), For : SBBJ,SBP,SBT, Number of Post : 25, Maximum age : 30

Post - Computer-Systemes, Scale : Assistant Manager (Scale I), For : SBBJ, SBH, SBP, SBM, SBT
Number of Post : 232, Maximum age : 30

Post - Computer and Communications, Scale : Asst. Manager (Scale I), For : SBI, Number of post : 5, Maximum age : 30

Post - Civil Engineering, Scale : Dy. Manager (Scale II), For : SBBJ, SBH,SBM,SBT, Number of post: 13, Maximum Age: 35

Post - Civil Engineering, Scale : Asst. manager (Scale I), For : SBI, SBM, SBP, SBT, Number of post : 32, Maximum age : 30

Post - Electrical Engineering, Scale : Dy. Manager (Scale II), For : SBH, SBM, Number of post : 4
Maximum Age : 33

Post- Electrical Engineering, Scale : Asst. Manager (Scale I), For : SBI, SBP, SBT , Number of post : 21, Maximum age : 30

Post - Official Language, Scale : Dy. Manager (Scale II), For : SBM, SBP, Number of post : 8,
Maximum age : 30

Post : Official Language, Scale : Manager (Scale III), For : SBBJ, Number of post : 2, Maximum Age : 35

Post : Official Language, Scale : Asst. Manager (Scale I), For : SBT, Number of post : 1, Maximum age : 30

Post - Law, Scale : Manager (Scale III), For: SBI, Number of post : 42, Maximum age : 35

Post - Law, Scale : Dy. Manager (Scale II), For : SBH, SBP, Number of post : 4, Maximum age : 35

Post - Law, Scale : Asst. Manager (Scale I), For : SBI, SBH, SBT, Number of post : 78, Maximum age : 30

Post - Security, Scale : Dy. Manager (Scale II), For : SBH, SBT, Number of post : 10, Maximum age : 35

Post - Fire & Safety, Scale : Dy. Manager (Scale II), For : SBBJ, Number of post : 1, Maximum age : 35

For more details and to apply online click here

　

Narayana Murthry to retire from HSBC Bank

N.R.Narayana Murthy, Co-founder of IT firm Infosys and the only Indian on board of UK Banking giant HSBC Holdings Plc will retire as its director on 31st December 2012. He had joined the board of the bank in 2008.

HDFC Bank shakes hand with PUNGRAIN

HDFC Bank has joined hands with Punjab Grains Procurement Corporation Ltd (PUNGRAIN) to facilitate payment to its commission agents spread over 350 mandis in Punjab.  For this project, HDFC Bank will install its Point of Sales (POS) machines in over 350 mandis to facilitate the payment to commission agents dealing in agriculture products. It said this initiative will facilitate faster payments to them and in turn will benefit farmers.

Crop loan interest subvention for 2012-13

The Honourable Finance Minister has announced in budget for 2012-13 that Interest subvention for short term crop loans of 2% will be continued this year and additional 3% subvention will be made available to prompt repayers of loan. In pursuance of this announcement, Government of India will provide interest subvention of 2 % p.a. to Public Sector Banks in respect of short-term production credit up to Rs.3 lakh during the year 2012-13. This amount of subvention will be calculated on the crop loan amount from the date of its disbursement/drawal up to the datae of acutal repaymnet of the crop loan by farmer or up to the due date of the loan fixed by the bank for repayment of loan, whichever is earlier, subject to a maximum period of one year. This subvention will be available to Public Sector Banks on the condition that they make available short-term production credit up to Rs. 3 lakh at ground level at 7% p.a.

Besides, Government of India will also provide additional interest subvention of 3% p.a. to Public Sector Banks in respect of those prompt paying farmers who repay their short-term production credit within one year of disbursement/drawal of such loans. This subvention will be available to such farmers on a maximum amount of Rs.3 lakh availed of by them during the year, from the date of disbursement/drawal of the crop loan up to the actual date of repayment by farmers or up to the due date fixed by the bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This additional subvention will be available to Public Sector Banks on the condition that the effective rate of interest on short-term production credit up to Rs. 3 lakh for such farmers will now be 4 % p.a. This benefit would not accrue to those farmers who repay after one year of availing such loans.

In respect of 2 % interest subvention, banks are required to submit their claims on a half-yearly basis as at September 30, 2012 and March 31, 2013, of which, the latter needs to be accompanied by a Statutory Auditor’s certificate certifying the claims for subvention for the entire year ended March 31, 2013 as true and correct.

In respect of the 3% additional subvention, banks may submit their one-time consolidated claims pertaining to the disbursements made during the entire year 2012-13 latest by April 30, 2014, duly audited by Statutory Auditors certifying the correctness.

In case of RRBs and co-operatives, a separate circular will be issued by NABARD.

ATM will not suck your cash anymore

Many a times you may have noticed that when using ATM for cash withdrawal, when ATM dispenses cash if you do not take it out within 10-15 seconds it goes back to machine. This is a safety measure adopted by the banks so that if anyone forgets to take the cash it should not go to wrong hands.

But this has created many problems for the banks as well as customers. Customers are in dilema as they will think that the money is already debited to account but cash not received, then from where to claim it. (ATM normally automatically redeposits the amount to the account of customer but requires some time) Some times as the money is already deducted they may not have sufficient balance in account to make next withdrawal. The banks are flooded with request for claims for the amount.

The RBI has also noticed some fraud. The modus operandi is as follows; The customer withdraws cash. When cash has come out take some cash only. Then after sometime the remaining cash goes in. As the machine does not have mechanism to recount the cash it sucked, it reimburses full amount to the account of customer.

As the operation and usage of the ATM has been stabilized. The RBI has asked the banks to stop the mechanism of Cash Sucking by ATMs if not taken within time. Now the customers has to be alert not to forget to take cash or else it may hand in wrong hands.

Recruitment - Punjab National Bank

Punjab National Bank (PNB) invites online applications for following Clerical post from Indian citizens who have taken the Common Written Examination (CWE) for recruitment in Clerical cadre conducted by IBPS in Nov-Dec 2011:

Single Window Operator A (Clerk) : 2985 posts in various states

(UR-1611 ,SC-695, ST-166, OBC-513) (PH-90, Ex.SM-420),

Pay Scale : Rs.7200-19300/-,

Age : 20-25 years,, relaxation in age as per rules.

Application Fee : Rs.100/- (Rs.20/- for SC/ST/PC/EXSM candidates) to be deposited any Branch of PNB through a voucher challan which is available on PNB website.

How to Apply : Apply Online only at Punjab National Bank website from 26/09/2012 to 10/10/2012.

Kindly click link below for more details and to apply online:

Apply online here

Kingfisher and consortium bank's meeting tomorrow

The consortium of 17 banks that have funded debt-laden Kingfisher Airlines Ltd (KFA) will meet in Bangalore on Thursday. The meeting assumes significance, as this would be the first one after the Government revised foreign direct investment norms in aviation and allowed foreign carriers to pick up to 49% stake in domestic scheduled airlines. There are indications that Kingfisher promoter, Vijay Mallya, will make a presentation to the bankers’ on the turnaround strategy for the ailing private carrier. Banks are hoping that Mallya would come up with proposals that would lead to equity infusion into the airline.

Banks have total exposure of nearly Rs.7000 to the airlines and the SBI has exposure of nearly Rs.1500 crore. The loans have turned bad (NPA) during january itself.

The RBI has disallowed the banks to use Kingfisher brand name as security. Hence the exposure has turned unsecured and banks are required to make 25% provision on the same.

Earlier the banks have also expressed displeasure due to absence of Mr. Mallya during the consortium meeting although advance intimation was available.

Happy time expected for HDFC bank loan customers

HDFC Bank has informed that it is looking at possibility of rate cut on loans during the Asset Liability Management Committee (ALCO) meeting to be held by this week end. So The loan customers can expect some relief in EMI amount.

Barclays Bank plans to shut 3 Indian branches

The British Bank, Barclays which is having 9 branches in India plans to shut 3 offices situated in Rajamundry, Ahmednagar and Junagadh. The Bank will also reduce the workforce due to the closure of the branches. The bank has taken the decision to sharpen focus in India on corporate and investment banking and wealth management and to reduce over time their retail banking presence to a core network of branches serving the high net worth individuals segment. The foreign bank is not able to make a presence in already heated banking market.

Cosortium Banks allow Hotel Leela Debt Restructuring

The debt-laden hospitality major Hotel Leela venture Ltd has got a breather. The restructured repayment plan of the company has finally been accepted by the lenders. It has received a 24-month moratorium for the outstanding principal amount of Rs 3,000 Cr it borrowed from a consortium of 17 banks. It applied for corporate debt restructuring (CDR) in February 2012. At the September 12 CDR meeting held with the banks, Leelaventure was told to repay all its outstanding principal amount in eight years from January 2014.

Higher interest draws more SB deposits in Kotak Mahindra Bank

Deregulation of the savings bank interest rate has led to a sharp spike in the savings bank deposits of Kotak Mahindra Bank (KMB) in Tamil Nadu. The bank, which has 19 branches in the State, will open three more branches over the next six months. The bank said the high interest rates offered by the bank on SB deposits clicked with the customers since it matched the post-tax yield of term deposits of ‘short to medium tenure’. That the interest earned in the savings bank account up to Rs 10,000 per year was tax free also weighed in with the customers. KMB said that after the new liberalised interest regime for SB deposits was announced by the RBI in October last year, KMB has witnessed a surge in SB deposits in Tamil Nadu. The SB deposit amount has grown by 45%, from Rs 181 Cr to more than Rs 263 Cr in Tamil Nadu region. The bank had, at the all-India level, seen a huge spurt of 68% in the savings bank deposit over a one-year period ending June 30, 2012 — from Rs 3,307 Cr on June 30, 2011 to Rs 5540 Cr on June 30 this year.

Zoom Developers - Fraud Case - Rs.3000 crores

While the CVC is on the verge of recommending action against officials of 25 banks, which together provided Rs 2,650 crore to Zoom Developers, declared a non-performing account, very little is known about the people running the show at the Mumbai-based company.

Zoom Developers set up in 1991, it is the flagship of the Zoom Group. The company is managed by Vijay Choudhary and father-in-law B L Kejriwal. The company website describes Choudhary as group chief executive.

Zoom Developers' business interests span engineering and project management services, development of industrial and infrastructure projects, information technology, telecom and business process outsourcing.

The shareholding of the undated company website shows the company is controlled by five holding companies. Zoom Developers started as an engineering sub-contractor for MNCs and later, established itself as an independent project executer with expertise in project development. The company website claims Zoom has a presence in China, India, Middle East, Europe, North and South America.

A consortium of nearly 25 state owned banks has given Rs.2600 crore loans mostly in the form of bank guarantee to the firm. The loan had turned bad in 2009 itself. Banks say global financial turmoil of 2008 had adversely affected companys cash flows and projects, which is why 26 Indian banks have taken Zoom Developers nearly Rs 2600 crore of debt to the corporate restructuring cell. Its also alleged that promoters has flouted FEMA guidelines.

Majority of the public sector banks have classified the exposure it had in Zoom Developers as non-performing loans or substandard or bad loans in the first quarter of FY11.

Major exposures:
Punjab National Bank
Indian Bank
Central Bank of India
Union Bank of India
UCO Bank
United Bank of India
Dena Bank
Bank of Baroda
Federal Bank

The amount has bulged to Rs.3000 crore and the banks are trying hard to recover their dues. Recently United Bank of India, member of consortium took possession of 3.4 acre land belonging to guarantors Magnificient Constructions.

Various investigating agencies like CBI are also investigating the matter and Central Vigilance Commission is close to finalise disciplinary action against officials of 25 banks that provided loans worth Rs.2650 crore to developers.

Who draws highest pay in India Inc.

These are the highest pay takers in Indian listed companies during 2011-12

1. Mr. Naveen Jindal,Jindal Steel and Power, Rs.73.42 crore
2. Mr. Kalanithi Maran, Sun TV network, Rs.57.01 crore
3. Mrs. Kaveri Maran, Sun TV network, Rs.57.01 crore
4. Mr. Pawan Munjal, Hero Motocorp, Rs. 34.47 crore
5. Mr. BrijMohan Lal Munjal, Hero Motocorp, Rs.34.44 crore
6. Mr. P.R.R.Rahja, Madras Cements, Rs.29.34 crore
7. Mr. Shinzo Nakanishi, Maruti Suzuki, Rs.28.14 crore
8. Mr. B.G. Raghupati, BGR Energy, Rs.25.98 crore
9. Mr. Karl Peter Forster, Tata Motors, Rs.23.97 crore
10. Mr. Murali K.Divi, Divi's Lab, Rs.23.15 crore

Interest Subvention on housing loan upto Rs.15 lakhs

The Government of India is extending Interest Subvention of Rs.1% on below conditions;

1. The loan availed to be maximum Rs.15 lakhs.

2. The cost of project to be maximum Rs.25 lakhs.

3. The loan to be availed by Scheduled Commercial Banks, Regional Rural Banks or Housing Finance Companies.

The Government has made Budgetary allocation of Rs.400 crore for 2012-13 for implementing the scheme.

The National Housing Bank is the authority to implement the scheme.

The banks normally extend the benefit to housing loan customer within one month of release of loan and inturn claim the amount from National Housing Bank on monthly basis. The subvention amount will be credited to housing loan of borrower which will effect in reducing the principle amount of loan.

If you are planning to raise loan from bank, ensure that you get the benefit mentioned above.

White label ATMs

Till now the ATMs in our country are installed and managed by the Banks itself. Although there are over 90000 ATMs in our country, most are located at Tier I and II centres. There is need to install more and more ATMs in Tier III and Tier VI cities. In this direction Reserve Bank of India has formulated guidelines which allow non-banking companies to install and manage ATMs in our country. Such ATMs are called White Label ATMs. And the operators of such ATMs are called White Label ATM Operators (WLAO).

The RBI wants to allow non-banking companies who have Net Worth of at least Rs.100 crores to operate WLAs. Its Memorandum/Articles must allow it to provide such services. If any FDI is involved then necessary permissions from concerned to be held.
There are three schemes formualted by RBI for WLAOs;


Scheme-A

Install minimum 1000 ATMs in Ist year of operation
Install minimum 2 times ATMs installed in Ist year in 2nd year of operation
Install minimum 3 times ATMs installed in 2nd year in 3rd year of operation

The ratio of installation will be 3:1. For every 3 ATMs intalled in Tier 3 to 6 cities they can install 1 ATM at Tier 1 and 2 cities.

Scheme-B

Install minimum 5000 ATMs in each 3 years of operation

The ratio of installation will be 2:1. For every 2 ATMs installed in Tier 3 to 6 cities they can install 1 ATM in Tier 1 and 2 cities.

Scheme-C

Install minimum 25000 ATMs in 1st year of operation and another 25000 in next 2 years of operation.

The ratio of installation will be 1:1. For every 1 ATM installed in Tier 3 to 6 cities they can install 1 ATM in Tier 1 and 2 cities.

The WALO has to inter into agreement with sponsor bank. The WALO can enter agreement with more than one sponsor bank.

The WALO cannot charge anything from the users of ATMs.

The Cash has to be provided by sponsor bank.

The WALO can advertise in ATMs which are approved by Advertising Council of India and RBI.

The WALO is responsible for settlement of accounts/failed transactions etc.

Only cards issued by banks can be used at WALs.

Acceptance of deposits is not permitted at WALs.

WALO can offer value added services as per guidelines of RBI.

WALO can receive fee from card issuer bank for using its ATM resources.

With the start of this we expect tier 3 to 6 cities to have good number of ATMs and participate in growth of banking in India.

Comply with KYC formalities

Now a days you must be receiving calls/letters from your banks saying that you have to comply with KYC formalities as per RBI guidelines. What is KYC and what is its importance.

KYC stands for Know Your Customer. RBI or the Government wants the banks to know the customer whose account its having. Knowing stands for below points:

Name
Father's name
Present residential address
Permanent address
Date of birth
PAN number
Contact number
Email/website
Income Source
Present income
Family details
Loans if any etc

While filling your account opening form you must have noticed all these.

Banks normally take followind documents of each account holder;

Photo
ID proof (PAN Card, Election Card, Passport, Driving Licence etc.)
Address proof (Ration Card, Tel. bill, Ele. bill, Bank pass book etc.)
Introduction from existing account holder

Now with crores of money being routed through bank accounts, RBI/Govt. wants to get assurance that they are legitimate transactions and no money laundering/hawala/terrorists are involved in it.

Hence RBI has mandated all banks to update its customers KYC afresh by obtaining latest photo, ID proof and Address proof. As its applicable to all types of account holders and banks have lot of non operative accounts such updation is a herculean task for the banks. Hence banks are sending notices to all customers giving them certain time to submit the documents or else the accounts of customers will be freezed.

Hence kindly submit the KYC documents to your bankers early.

Rajiv Gandhi Equity Savings Scheme

Our honourable prime minister Mr. Manmohan Singh has put red carpet for attracting new investors to financial markets. The scheme is Rajiv Gandhi Equity Savings Scheme. For investment up to maximum of Rs.50000/- , the investors can get 50% tax rebate. This is one time sop for first time investor only. It is available to those with taxable income of upto Rs.10 lakh. But some riders are attached to it.

1. The investment must be in Top 100 shares of BSE or NSE.

2. The investment made in PSU companies can also get tax brake.

3. If the investment is made in Mutual Funds and ETFs then the scheme in which funds are invested must comply with above conditions.

4. The investments have lock-in period of 3 years.

5. But the investors can trade after one year but must maintain the level of investment and also keep points 1 to 3 in mind while reinvesting.

Supreme Court opines that Wrong legal advice is no crime

Banker's beware, take full legal lessons before granting loans on legal opinion given by your advocates as highest court of law in India, Supreme court has said giving wrong legal advice is not crime if there is no link between them and perpetrators of fraud or offence. And from this we may easily draw our opinion that its ultimately Branch Managers who have sanctioned loans are liable for the frauds etc even if there is no link between them and perpetrators of fraud. The utmost penalty that bank panel advocate may get is depanelment that too from that bank only.

But the court also said the advocate's opinion must be bonafide as all legal practioners owe an unremitting loyalty to the interests of a client and it is the lawyer's responsibility to act in a manner that would best advance the client's interest.

Bank Holiday on 29th September 2012

There will be no customer transaction in Indian Banks on 29th September 2012 due to Half Yearly closing of accounts.

Recommendations by Bankers to IBA to revive Housing Sector

These are some of recommendations that the bankers have given to IBA(Indian Banks Association)which if passed at its Management Committe will be submitted to Finance Ministry for implementation.

1) Increase in income tax exemption on housing loan interest from existing Rs.1.5 lakh to Rs.5 lakh. But applicable only for first house.

2) Reduction in Risk Weight to loan granted to real estate developer from existing 125% to 100% and loan granted to individual home buyers from existing 75% to 50%.

3) The moratorium period i.e., time from first disbursal of loan to payment of first EMI to be 3 years (during which the borrower need to repay only the interest debited.

Festival Bonanza from SBH

State Bank of Hyderabad (SBH) has launched a festive campaign. The period of the scheme is from September 17 to December 31. Scheme is applicable for its home and car loan schemes. The bank has slashed interest rates by up to 50 bps on both these segments. Further, no processing charges would be levied for car loans and there is a 50% concession on charges for home loans.

UCO Bank joins the rate cut league

UCO Bank has slashed interest rates by 25-150 basis points on various retail and priority sector loans with immediate effect. The bank has reduced rates on home loans by 25 basis points to 10.50%, car loans by 50 basis points to 10.75%, education loans by 150 basis points to 12.75%.

Want to be Millionaire ?

Want to be Millionaire ? Within how many years ? Follow the simple technique.

Open Recurring Deposit with any bank of your choice. Assume rate of interest that will be paid on your recurring deposit is 9%, here is the time and amount to be invested to become millionaire.

1 year Rs.79400 pm.
2 years Rs.37950 pm.
3 years Rs.24150 pm.
4 years Rs.17300 pm.
5 years Rs.13200 pm.
6 years Rs.10500 pm.
7 years Rs.8550 pm.
8 years Rs.7125 pm.
9 years Rs.6025 pm.
10 years Rs.5150 pm.

In all the above cases you get Approx. Rs. 10 lakhs on maturity.

Some banks offer special rate to senior citizens. Hence the amount to be paid by them if the rate is above 9% will come down. The rates offered by different banks is different and the amount to be invested monthly vary according to that.

But the rate once agreed will be fixed for the tenure of the deposit.

Recurring Deposit is a type of deposit where the customer is required to deposit fixed sum of money every month within the date specified upto the period specified to get a lumpsum which is informed at the time of opening the deposit itself.

Also note that the banks do not deduct any Tax At Source on the interest earned.

Hence, plan your future expenses and make a RD at the earliest. Because the longer the period of deposit higher the interest you get due to cumulative effect.

SBI heats up loan market

State Bank of India has reciprocated the move of 0.25% cut in CRR by 0.25% cut in its Base Rate. The new Base Rate for SBI will be 9.75%. This is lowest Base Rate at present for Public Sector Banks. In Private Banks ICICI has the same rate and this also happen to be lowest in Indian banking at present. With the festive season started and lot of banks offering festival bonanza for its customers other banks may also start reducing the rates. The loan customers will be happy a lot.

Base Rate is the minimum lending rate the bank offers to any customer. It cannot lend less than its Base Rate. Base Rate is fixed by bank after knowing its cost of funds, yield on advances and maturity pattern of both.

RBI mid term term monetary policy

The RBI in its mid term monetary policy has announced a cut of 0.25% in Cash Reserve Ratio (CRR). So the new CRR will be 4.5%. Hence the banks will have to keep less money with the RBI and lend more. The amount that is expected to be released to the banking system will be approx. Rs.17000 crores.

This is possitive for borrowers since the banks having more money to lend may reduce their interest on loans.

The RBI has kept other rates unaltered (Repo and Reverse Repo rates).

Happy Ganesh Chaturthi to all

Wishing all my readers happy Ganesh Chaturthi Festival

Bank Strike on 28th Feb.2012

All the Central Trade Unions ( BMS- INTUC- AITUC- HMS- CITU- AIUTUC – AICCTU – TUCC – UTUC – LPF – SEWA ) have jointly given a call for General Strike on 28th February, 2012 against the anti-labour and anti-worker policies of the Government with the following issues and demands: 1) Concrete measures to contain price rise 2) Concrete measures for linkage of employment protection with the concession / incentive package offered to the entrepreneurs 3) Strict enforcement of all basic labour laws 4) Universal security cover for the unorganized sector workers without any restriction and creation of a National Social Security Fund with adequate resources in line with the recommendation of NCEUS and Parliamentary Standing Committing on Labour 5) Stoppage of disinvestment in Central and State Public Sector undertakings. 6) No contractorisation of work of permanent / perennial nature and till then payment of wages and benefits to the contract workers at the same rate as available to the regular workers of the industry / establishment. 7) Amendment of minimum Wages Act to ensure universal coverage irrespective of the Schedules and fixation of statutory minimum wage at not less than Rs. 10,000 per month with indexation. 8) Removal of all ceilings on payment and eligibility of Bonus, Provident Fund; Increase in the quantum of Gratuity. 9) Assured Pension for all 10) Compulsory registration of trade unions within a period of 45 days and immediate ratification of ILO Conventions No. 87 and 98. Bank Strike: Five lacs of bank employees under the banner of AIBEA support these demands and has decided to join the strike call. AIBEA will also focus its following demands on the occasion of the strike: Oppose implementation of Khandelwal Committee recommendations Oppose Banking Law ( Amendment ) Bill and other reform measures Oppose outsourcing of regular bank jobs Demanding stringent measures to recover bad loans in banks Oppose undue delay in settlement of pending demands We oppose Khandelwal Committee recommendations The Government appointed the Khandelwal Committee on staff related matters and this Committee has given various anti-employee recommendations like: Abolition of industry-wise common Wage Revision Settlement existing since 1966 and introduce bankwise wage revision Abolition of existing uniform wage pattern for bank employees/officers and introduce differential incentive based salary Free hand to managements to outsource all regular banking jobs and give them on contract basis. No recruitment of clerks in Metro/Urban areas. Compulsory rural service of 3 years for clerical staff in Banks Minimum qualification for recruitment of clerks to be Graduation Minimum qualification for recruitment of subordinate employees to be 10th Std Reduction in promotional opportunities for clerical staff All these are anti-employee measures and hence UFBU opposes the same We oppose Banking sector reforms: Banks represent the hard earned savings of the people of this country. The total Deposits in the Banks today have crossed Rs. 55 lacs crores. Hence the Banks have to be strengthened so that the problems that the Banks faced in USA and other countries faced are not faced by our Banks. But unfortunately, the Government is bent upon liberalizing our banking sector. Some of the measures are: Amending Banking Regulations Act and Bank Nationalisation Act Reduce Government’s Equity Capital in Government/nationalised Banks. Availing Loan from World Bank to contribute to the capital of Banks. Merger of Public Sector Banks Allowing more Foreign Capital in our Banks Allowing more voting rights in Banks for foreign capital Encouraging private capital in nationalised Banks Allowing corporate houses to start their own Banks Write off of huge bad loans of corporate sector Converting Bad Loans of defaulting companies as capital investments of Banks in the same defaulting company. All these measures are against the interest of our banking sector and hence UFBU opposes the same. We oppose outsourcing of regular bank jobs: The Bank managements, in violation of the existing bilateral settlement, are attempting to outsource all regular bank jobs to private contract agencies. This will affect the job security of the employees and job opportunities for the young educated youth. This will also endanger the interests of the bank customers as many banks have bitter experience with the contract employees in various countries. We demands stringent measures to recover bad loans: Bad Loans/NPAs in the Banks are increasing. In the last one year, Rs. 70,000 crores of bad loans have been added. Pepople’s money is being looted by the corporates. Government must take stringent measures to recover these bad loans. We demand immediate settlement of our Demands: Many important issues like implementation of mutually agreed scheme on compassionate ground appointments/financial compensation to family of deceased employees, regulated working hours for officers, adherence to stipulated working hours for clerks, introduction of 5-Day banking, improvements in pension scheme for retired employees, improvement in Staff Welfare Schemes, etc. are pending for a long time without any solution.

Do you know?

You can avail additional deduction of Rs.20000 from your income under section 80 CCF by subscribing to notified long term infrastructure bonds. This deduction is in addition to Rs.100000 you get under section 80 C for Provident Fund Contribution, LIC premium Payment, NSC, ELSS, Tuition Fee etc. So in total you can reduce your total income by Rs.120000 under above.

LIC picks up additional 5% stake in Dena Bank

Dena Bank issued 5% equity in favour of LIC of India on Preferential Allotment. With this the total holding of LIC in Dena Bank stood at 6%. And the government stake is reduced to 55%. The move has come after government which is cash strapped to infuse fresh equity to the government banks requested LIC to pick up the stake. The deal is valued at around Rs.125 crore.

CSIS

CSIS Central Scheme of Interest Subsidy for Education Loans It is well known fact that education is one of the major concerns of the government and nobody should be denied of education only because he is poor. To help the economically weaker section students the central government has introduced an interest subsidy scheme. The Central Government has introduced a scheme to provide Interest Subsidy upto moratorium period of educational loans availed by economically weaker section of students for their technical/professional studies in India conducted by recognized institutions from scheduled banks. The period of moratorium means Course period plus one year OR six months after getting the job which ever is earlier. Economically Weaker Section students means students whose family/parental income from all sources is less than Rs.4.5 lakhs per anum. The income assessing authority will have to be notified by each state as per directives of Ministry of HRD, Government of India. Majority of states have declared Income certificate issued by Tahsildar is valid income proof. The student will get full interest subsidy on his loan amount till course period plus one year or six months of getting job whichever is earlier. The student will also be eligible for getting 1% interest subsidy that he is getting for prompt repayment of interest debited during the month on his education loan account within 30 days of debit. Applicability of student: 1. Economically weaker section students 2. Studies in India 3. Professional and Technical studies 4. From recognized institutions 5. Loans taken from Scheduled Banks 6. Only for students who have taken professional/technical courses after 10 + 2 Interest subsidy if available only once for a student either for graduation or postgraduation. But when the student undertakes integrated course then CSIS is applicable in that case. The subidy will not be available once the student discontinues the course OR expelled from the college or disciplinary grounds. But where the student discontinues the course due to medical reason and if he provides sufficient proof for the same the CSIS can be given. The marks card of the student who had availed CSIS scheme bears a Tag to the effect that the student is covered under CSIS scheme to check for the regular repayment and the employers can identify the loanee. Canara Bank will be the Nodal Bank for the scheme. The Government will request for claim in specified formats. All banks will forward their claims to Canara Bank in those formats which in turn will be claiming it from the Government and the received subsidy will be distributed to member banks as per their claims. Applicability of the Scheme: The scheme is implemented from 2009-10 i.e., from 1st April 2009. All loans taken wef 1st April 2009 which fulfills the conditions set out under the scheme will be covered under CSIS and also the loans sanctioned before 1st April 2009 where part disbursement is made on or after 1st April 2009 which fulfills the scheme guidelines will be covered under the scheme to the extent released after 1st April 2009. The role of Student: 1. If you have taken loan from any scheduled bank and you fulfill the conditions set out to get subsidy kindly visit the bank branch where you have taken education loan to get full scheme guidelines. 2. Provide income certificate to bank authorities as per the formats provided by bank and as per the income assessing authority for your state (mostly Tahsildar). 3. Sign agreement along with your parent and bank to get yourself covered under the scheme. 4. Now you are covered under the scheme. The role of Bank: 1. If any student approaches you kindly verify if he can be covered under the scheme by going through guidelines. 2. If he can be covered then get Income certificate from the student (income of parent/family) 3. Get the agreement as set out by Ministry of HRD, Government of India duly signed by student and his parent. 4. Send the claim (half yearly/ yearly) as called by Nodal Bank (Canara Bank) or your Controlling Office. 5. On receipt of the claim kindly credit to loan account of student.

Bank Stocks

The closing price of Bank Stocks on NSE as on 03-Feb-2012 (Value in Rupees) Allahabad Bank 173 Andhra Bank 110 Axis Bank 1099 Bank of Baroda 763 Bank of India 349 Canara Bank 483 Central Bank 86 Corporation Bank 430 Federal Bank 403 HDFC Bank 506 ICICI Bank 915 IDBI Bank 100 Indian Bank 234 Indian Overseas Bank 88 IndusInd Bank 299 ING Vysya Bank 326 Kotak Mahindra Bank 517 Oriental Bank of Commerce 288 Punjab National Bank 962 State Bank of India 2103 Syndicate Bank 101 UCO Bank 72 Union Bank of India 229 Yes Bank 345

Base Rate

Base Rate is introduced in Indian banking system wef 01.07.2010. The base rate relates to interest charged by the banks on their advances. Before introduction of base rates Indian Banks used to give loans to corporates at very low rates. The amounts involved were also huge. Hence RBI felt the need to floor the rate charged by banks hence base rates were introduced. The base rates relates to the minimum rate that the bank can charge on any loan to anyone. They cannot lend below that rate. The banks were given freedom to fix their base rate based on their cost of funds, liquidity position etc.

Defaulters Photos to be published in newspaper

Are you aware that while signing loan documents banks take a undertaking from you which allows them to publish your photo in whichever mode they like if you default your loan payments. This also allows them to share data with CIBIL and RBI. They can also share your information with any one. Hence Beware. Now, banks are thinking to publish the photos of defaulters in the newspaper.

SB interest calculation

Interest on Savings Bank account is now being calculated on day end balance from 1st April 2011. Thus ending menthod of calculating SB interest on minimum balance during the month from 10th to last day.

Bankers you will surely need this

Auto Classification of Assets

Have you taken any loan from the bank and not so prompt in making repayment, then be cautious as the banks have introduced Auto Classification of its advances as per RBI's Directives. Auto classification means the system automatically downgrades/upgrades your account based on your repayment and the repayment terms of the bank. Till now banks were doing it manually and there were chances that the branch did not make your account as Non-Performing Asset even if your loan is overdue for more than 90 days as stipulated by RBI. Now the system automaticlly does the things and hence more transperancy in NPA declaration by the banks. All banks are mandatorily switched to Auto Classification from December 2011.