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Sep 30, 2012

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.

Sep 29, 2012

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.

Sep 26, 2012

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.

Sep 25, 2012

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.

Sep 24, 2012

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

Sep 23, 2012

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.


Sep 22, 2012

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.

Sep 21, 2012

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.

Sep 20, 2012

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.

Sep 19, 2012

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