SBI, ICICI Bank among top 100 global banking brands

Indian banks, barring SBI, and ICICI Bank, come a cropper in the global stage when it comes to their brand value, while their counterparts in China have fared better, according to the findings of a study. In a study by London-based consultancy Brand Finance, only two Indian Banks - the country's biggest lender SBI and ICICI Bank, the largest in the private sector, figure among the top 100 global banking brands. Compared to the Indian brands in top 100, three Chinese banks find a place in the top 25 brands. According to the study, SBI has a brand value of $2,852 million, while for ICICI Bank it is $2,603 million. Industrial & Commercial Bank of China has a brand value of $8,427 million, China Construction Bank is at $7,786 million, Bank of China at $6,741 million.

HDFC Bank, Centurion boards to consider merger

HDFC Bank and Centurion Bank of Punjab (Centurion) on Friday confirmed that they are considering a merger proposal. The boards of directors of both the banks are meeting separately on Saturday to consider “in principle” a possible merger. The boards will appoint independent valuers for deciding on the share swap ratio. After the merger, the combined entity would have a formidable network of over 1,100 branches with a pan-India presence. This would overtake ICICI Bank in terms of branch network (955). However, in terms of balance sheet size, ICICI Bank maintains its lead by a large margin. As on December 31, 2007, the balance sheet size of Centurion Bank of Punjab stands at Rs 25,403 crore and of HDFC Bank at Rs 1.31 lakh crore. ICICI Bank’s balance sheet stands at a much larger figure of Rs 3.76 lakh crore. Centurion has traditionally adopted the inorganic route to expansion. It took over BankMuscat’s Indian operations in 2003 followed by Bank of Punjab in 2005 and the Lord Krishna Bank in 2006. Centurion has a large presence in the North and a considerable exposure to the agriculture sector, thanks to its merger with Bank of Punjab in 2005. Centurion has 394 branches and 452 ATMs with employee strength of around 7,500. HDFC Bank has a branch network of 754 and is understood to have over 200 more licenses in hand. HDFC Bank has 1,906 ATMs in 327 locations

Corp Bank lifts Rs 300 cr from NPCIL for 9.87%

Corporation Bank has piped rival public sector banks in the race to pick up bulk deposits from Nuclear Power Corporation of India (NPCIL). Corporation Bank had bid 9.87 per cent for Rs 300 crore bulk deposits of one year duration from NPCIL and lifted the funds through placement of certificates of deposit. The effective cost after factoring in reserve ratios (cash reserve ratio and the statutory liquidity ratio) was likely to be about 40-50 basis points higher. Besides public sector banks, private banks were also in the fray for the bulk funds. Some of the private sector banks had bid even higher rates of over 10 per cent. The high rates were seen due to tight liquidity conditions as oil refiners were drawing down their credit lines, for funding their dollar purchases. Bankers said a slow down in capital inflows had also resulted in reduced RBI interventions in the foreign exchange markets leading to a shortage of rupee liquidity. Some bankers said that the high bids were also in expectation of firm call rates next month, when advance tax payments begin.

Cheque truncation to save time

Cheque Truncation Solution is a big milestone in the Indian banking industry. It enables cheque clearing on the same day, reducing floating time available for funds. The technology, being implemented from February 1 in the National Capital Region, enables banks to send images instead of paper cheques for clearing and settlement. The US-based NCR Corp was mandated by the Reserve Bank of India to prepare the truncation project for the capital region. In an interview to Prashant K Sahu, South Asia General Manager Navroze Dastur asserts that cheque truncation will benefit both customers and banks, and help reduce frauds. Instead of manually moving the cheque from one bank to another for payment, we would now use images. This will bring down the time required for processing. Earlier, it would take two to three days. Cheques would now be cleared on the same day or the next day, thereby bringing efficiency into the entire banking system.

RBI rejects more equity exposure

The banking regulator has rejected proposals by four banks - Bank of India, IndusInd Bank, Kotak Mahindra Bank and HDFC Bank - to increase their capital market exposure beyond the regulatory cap of 40 per cent of net worth on grounds of excessive market volatility. The RBI has the discretion to allow higher capital market exposure to banks with sound internal controls and robust risk management systems, but the banking regulator decided against exercising it. HDFC Bank had a capital market exposure of 70.58 per cent of its net worth at the end of November 2007. This was before the RBI changed the norms and capped the exposure at 40 per cent of net worth. The exposures of the other three banks were within the regulatory ceiling.

Banks told to reschedule poultry loans

In a major relief to the poultry industry that has been rattled by the bird flu crisis in the last few weeks, the Reserve Bank of India (RBI) has asked the banks to reschedule loans given to the poultry units across the country. RBI wrote to all scheduled commercial banks on Tuesday, providing guidelines to them to give a breather to the poultry industry. It asked the banks to convert principal and interest due (on working capital loans), instalments and interest on term loans due for payment on or after the onset of bird flu into term loans. The RBI suggested that the banks could consider December 31, 2007 as cut-off date for such conversion, and treat the rescheduled or converted loans as current dues. “The process may be completed by April 30, 2008,” Mr G. Srinivsan, Chief General Manager of RBI, said in the letter. After conversion, the borrowers would be eligible for fresh need-based finance. The relief would be extended to all accounts of poultry industry, which are classified as ‘standard accounts’ as of the cut-off date. The apex bank had issued similar guidelines to the banks in April 2006 to bail out the poultry industry.

Bank strike: Conciliatory talks on Friday

A final decision on whether bank employees would go ahead with their planned strike on February 25 and 26 is likely to emerge only after Friday, the day on which conciliatory talks are proposed to be held between Government, bank unions and the Indian Banks’ Association (IBA). Finance Minister, Mr P Chidambaram, is understood to have assured bank unions that he would advise IBA to enter into a time-bound dialogue with them to find expeditious solutions to their demands

Bank of Baroda seeks variable pay, incentives for officers

Bank of Baroda wants to have a separate salary structure for its officers. The bank is trying to be out of the industry-level-wage negotiation with the unions as it wants to introduce incentives and variable pay. The bank has not given the mandate to the Indian Banks’ Association to negotiate with unions for officers’ wage revision, but it has for salaries of the award staff (clerical staff). While acknowledging that securing Government approval may be difficult, Mr A.K. Khandelwal, Chairman and Managing Director, Bank of Baroda, said: “We have made an attempt to at least voice our feelings on this. We will be very happy if the Government wishes to try an experiment with Bank of Baroda and gives us permission.” The earlier wage agreement, between IBA and bank unions, for the period 2002-2007, was signed in 2005 and it ended on October 31, 2007. According to an IBA official, all other 27 PSU banks have given the mandate to IBA for negotiating salaries, except Bank of Baroda. So, it is unlikely that the Government will amend the banking regulations for one bank.

Canara Bank launches online trading facility

Public sector Canara Bank on Monday announced the launch of its online equity trading platform through its wholly-owned subsidiary Gilt Securities Trading Corporation Ld.(GSTCL). The online trading facility, to start with, will be available to all individual savings and current account holders in select CBS-compliant Canara Bank branches in India. It will be extended to all CBS branches in a due course. Besides the trading option, the portal would provide features such as market-related information research report, technical market analysis and sector watch.

Cash withdrawal from ATMs to be free

Banks will now have to make withdrawals from ATMs free of charge for their own customers. Requests for balance enquiries would have to be made free to customers of other banks as well. In a draft circular, the RBI has asked banks to implement these changes with immediate effect. For use of other bank ATMs for cash withdrawals, the RBI has asked banks not to charge more than Rs 20 with effect from March 31, 2008. This will also gradually be made free of charge by April 1, 2009. According to the RBI, some banks had suggested that instead of making the service totally free, number of free withdrawals in a quarter or a month can either be prescribed or left to individual banks. IBA had also suggested that the number of free transactions at ATMs of other banks be restricted to two per month. The RBI has, however, said that a cap on the number of free cash withdrawals in a month is neither desirable nor practical.

Large payments only thru e-mode from April

Payments of Rs 1 crore and above between banks, NBFCs, primary dealers and any other entities regulated by the Reserve Bank of India may be allowed only through electronic mode from April 1. Mr V. Leeladhar, RBI Deputy Governor, said here on Monday that all such payments above the cut-off point done between parties regulated by the RBI should be through Real Time Gross Settlement or National Electronic Fund Transfer. The new guidelines will also be applicable to participants in the RBI-regulated markets such as foreign exchange, money and Government securities markets. The move will not only reduce risk from moving large paper-based value retail payments to safer electronic modes, but will also bring greater efficiency and customer convenience to the payment systems.

Information on operation of ATMs not to be revealed under RTI

Citizens cannot invoke their right to information to compel commercial banks to share the details on operation of their ATMs, the Central Information Commission (CIC) has held. The Commission's observation came as it turned down an RTI application seeking certain information from the country's biggest lender SBI about the operation of its ATMs.

Standard Chartered asked to pay Rs 50,000 compensation

The Standard Chartered Bank has been asked by a consumer court here to pay compensation of Rs 50,000 to logistics firm Kuehne & Nagel (India) Ltd for clearing a bearer cheque of Rs 400,000 without comparing the authorised signatures. Despite guidelines issued by the Reserve Bank of India to all banks not to make payments against bearer cheques of heavy amounts above Rs 50,000, the bank cleared the cheque of Rs 400,000 without carefully comparing the signatures of the signatory with the specimen signatures, so the bank is held guilty for deficiency in service," Justice J D Kapoor of the Delhi State Consumer Disputes Redressal Commission said in his order.

Govt may bank on RBI to push SBS merger with SBI

To get around the legal hurdles in way of merger between State Bank of Saurashtra (SBS) with State Bank of India, the government is planning to ask the Reserve Bank of India to introduce a scheme for the merger. Under the State Bank of Saurashtra Act, RBI can frame a scheme to enable merger with SBI, said a source. The Cabinet was expected to take up the terms and conditions of SBS merger last month.The approval of the terms and conditions for this merger will be crucial because similar conditions will be relevant for the subsequent merger of the remaining subsidiaries of SBI. The law ministry is of the view that the government cannot issue an executive order and repeal the specific legislations governing some of these associates, since they were created by an act of Parliament. In addition, all subsidiaries are also governed by the SBI Subsidiaries Act, 1959. The government needs parliamentary approval to make such changes. Given issues of legal amendments and rationalisation of staff, among others, the government first wants SBS to be merged and then take the experience forward to merge other subsidiaries. Indications are that the employees are on board for the merger as employees of the subsidiaries will be treated at par with SBI employees and will be given the third retirement benefit too, in addition to two, as a result of the merger.

Canara to tap broking biz;SBI to scale up ops

Recognising the potential in the broking space, state-run Canara Bank is mulling a foray in the sector while State Bank of India has plans to scale up its business manifold by next year. Canara Bank, plans to foray into broking along with its wholly-owned broking subsidiary, Gilt Securities Trading Corporation. Presently, SBI's services in broking is limited to online equity tradingHowever, the bank will shortly enrich its portfolio by enabling customer-access to mutual funds and IPOs, a company official said. Kolkata-based United Bank is also understood to have zeroed in on leading broking firm IDBI Capital Markets as its partner from among a group of bidders, including Sharekhan. SBI started its broking operations in 2005 by partnering with Motilal Oswal and with its own subsidiary, SBI Cap Securities last year. Presently, SBI has a minimal presence in the segment, having only around 20,000 customers, but plans to scale up its business manifold by 2009.

Two-wheeler loans go scarce

Banks are going slow on lending for purchase of two-wheelers. Such lending has seen a decline of more than 15 per cent over the past year, said officials from banks which are active in this segment. According to them, high rate of delinquency among customers and the recent norms on appointment of recovery agents have forced banks to go slow in the two-wheeler segment. Centurion Bank, which is a major player, has reduced lending for two-wheelers by almost 50 per cent during 2007-08. Bankers say tighter recovery norms have given customers more scope for avoiding payments. ICICI Bank, the largest player in the segment, said it has stopped lending for two-wheelers in more than 100 locations. Another reason for the slowdown is the higher cost of living.

Coin-vending machine at Corp Bank

In view of the shortage of coins, the Corporation Bank has installed a coin-vending machine at its Car Street Branch in Mangalore. A bank release said here that this is the first of its kind initiative by any bank to mitigate the acute shortage of coins in the city. The coin-vending machine scans the note inserted into it for genuineness and then dispenses coins. There are two hoppers in the machine which can store three types of coins of denominations five, two and one. The General Manager, Mr B.R. Bhat, inaugurated the machine on Friday.

SBI single borrower exposure above RBI norm

State Bank of India's exposure to a single borrower is 16.3 per cent of its net worth, higher than the regulatory cap of 15 per cent, the bank disclosed in its draft red herring prospectus on Thursday. The bank, however, did not name the borrower. The bank, which is coming up with a rights issue, said in the prospectus that it has a high concentration of loans to certain customers and to certain sectors and if a substantial portion of these loans were to become non-performing, the quality of its loan portfolio could be adversely affected. Net non-performing asset of the bank was at 1.44 per cent in October-December compared with 1.45 per cent a year ago. "The 10 largest individual borrowers in aggregate account for 11.1 per cent of the bank's total exposure and its 10 largest borrower groups in aggregate accounted for approximately 18.3 per cent of its total exposure," the bank said. The largest borrower group accounted for 5.3 per cent of the bank's total exposure and for 50.1 per cent of its total capital funds

Centurion Bank bags awards

Centurion Bank of Punjab won two awards at the Global HR Excellence Awards 2008 given at the Asia Pacific HRM Congress held in Mumbai this week. A first time participant, Centurion Bank of Punjab, had sent entries in two categories of awards and won both of them against several hundreds of entries received from across diverse sectors.

RBI raises concerns over govt proposal on currency futures

The Reserve Bank of India has raised several concerns over the government’s proposal to use the existing infrastructure of stock exchanges for introducing currency futures. In its technical advisory committee meeting with market participants yesterday, RBI said that foreign exchange and related activities should be isolated from all other businesses of exchanges and for the participants in the market like banks or brokers. Further, any existing exchange, even if allowed to float a platform for currency futures, should have a diversified shareholding pattern. RBI said exchanges could float separate bourses for the currency futures business as it would become a wholly owned independent subsidiary with separate books. Further, banks who would be the major participants in the currency futures business are regulated by RBI.

Indbank opens trading cafe in Chennai

Indbank Merchant Banking Services (Indbank), a subsidiary of public sector Indian Bank, opened its first 'trading cafe' for stock trading in Chennai. It plans to open another 20 such cafes and 18 new branches during 2008-09 across the country.Indian Bank is the first public sector bank to open such a cafe for stock trading facility, A Subramanian, executive director, Indian Bank, said. Indbank plans to establish around 200 such cafes in tier-II and tier-III cities across the country in a phased manner. The cafes will be opened in residential areas and target mostly housewives and elders, who are largely getting into trading these days, in the middle income families, he added. Customers having a demat account with Indbank or with Indian Bank and a savings bank account with Indian Bank can trade through the cafe, he said.

Dena Bank to auction NPAs

Mumbai-based Dena Bank will auction Rs 188.4 crore of its non-performing assets (NPAs) to bring down gross NPAs below 2.5 per cent by March 2008. “We have finalised a portfolio of 49 borrowers (including operating and closed units) with an aggregate principal balance of Rs 188.40 crore. These loans will be sold in either one or multiple tranches,” a senior bank official said. All of the loans are commercial. Chairman and Managing Director P L Gairola said, ”This process (auction) will help secure better value for these assets than sale through bilateral negotiations.”

More foreign banks keen to open offices here

Anticipating opportunities in India after 2009, foreign banks are queuing up to open offices in India. Two foreign banks have recently announced their plans to start operations here. Royal Bank of Canada, the largest bank in Canada, inaugurated its representative office in Mumbai on February 1. It will provide capital market products, wealth management, correspondent banking and trade finance services. On February 6, Glitnir, the Northern European bank headquartered in Iceland, also announced that it would be filing applications with the Reserve Bank of India to open a representative office here.

Dhanalakshmi rights issue from Feb 19

The rights issue of Thrissur-based Dhanalakshmi Bank will open on February 19 and close on March 19. he bank is aiming at raising Rs 200 crore through the issue at a 1:1 ratio. Each share will be sold at a premium of Rs 52, aggregating the offer price to Rs 62 a share.

Sabre likely to exit CBoP; ICICI, HDFC Bank, IDFC may join race

Centurion Bank of Punjab (CBoP) is back in news. The word is out that the private sector bank, where Rana Talwar’s Sabre Capital has the management control, is in talks with some of the financial institutions and large banks for a possible merger. However, indications are that CBoP is in no hurry to complete a deal. New generation banks like ICICI Bank and HDFC Bank are also believed to be interested in CBoP, but this was denied by ICICI Bank and HDFC Bank. ICICI Bank may have shown an interest to increase its presence in the North and pockets of southern India. For HDFC Bank, acquiring CBoP would give it a more extensive branch network than ICICI. Sabre’s moves may be driven by concerns that policy makers would take a long time in allowing foreign banks to acquire local banks.

FM asks banks to submit report on sugar package in 10 days

The finance minister, P Chidambaram, while meeting the heads of state-run banks in New Delhi on Tuesday, has asked the public sector banks to implement sugar package within 10 days and submit a report before the government. The Indian Banks' Association (IBA), the trade body of bankers, is going to discuss the issue at length during its forthcoming managing committee meet to be held on February 15 in Mumbai. More interestingly, the State Bank of India and few other state-run banks have already issued letters through their circles and regions to comply the government's instruction in this direction. As part of the sugar package that has been announced by the government, full interest subvention would be provided to all scheduled commercial banks, regional rural banks and cooperative banks for the total duration of the loan (four years including two years moratorium). The interest subvention would be limited to 12% per annum of which 5% would be met out of general budget provisions of the Centre and the remaining 7% from the Sugar Development Fund.

Govt holds interview to fill top bank positions

The government conducted interviews for the post of chairman and managing director of public sector banks, in which 11 candidates appeared. In addition, two deputy managing directors from Small Industries Development Bank of India (Sidbi) were also interviewed. The executive directors who appeared for the interview included RS Reddy, (Union Bank of India), KR Kamath and A Parulkar (Bank of India), SC Gupta, (Bank of Baroda), DL Rawal (Canara Bank) and JM Garg (Punjab National Bank). The two Sidbi deputy managing directors interviewed were Rakesh Rewari and Basant Seth. This is for the first time that officials from development finance institutions have been called for selection. Nine public sector bank heads are due to retire this year, starting with A K Khandelwal and C P Swarnkar of Bank of Baroda and Syndicate Bank, respectively, who will retire on March 31. The top jobs in Canara Bank, United Bank of India, Andhra Bank, Dena Bank, Corporation Bank, Vijaya Bank and Central Bank of India will also fall vacant during the course of the year. MD Mallya, CMD, Bank of Maharashtra, is expected to take charge as the head of Bank of Baroda, while Allahabad Bank Chairman AC Mahajan is tipped to head Canara Bank. Among executive directors, Allen Periera of Oriental Bank of Commerce is slated to join Bank of Maharashtra as its head. Periera was not interviewed this time around, as he had been selected as a prospective chairman in the previous round of interviews.

HDFC Bank ATMs upgraded

NCR Corporation has successfully upgraded 1,200 HDFC Bank automated teller machines (ATMs) with its ‘jitter-enabled' card readers that help make common types of skimming attempts ineffective. With this upgrade, all 1,910 ATMs of HDFC Bank are now equipped with ‘jitter-enabled' card readers.

ICICI Bank puts ‘high-risk’ loans on the block

ICICI Bank is understood to have sounded off a couple of foreign banks to buy out its Rs 2,000-crore small-ticket personal loans (STPL) portfolio, it is reliably learnt. Foreign banks such as Deutsche Bank, Standard Chartered and Barclays are understood to have been approached by the bank to pick the portfolio. ICICI Bank has decided to exit this ‘high-risk’ space a couple of months ago owing to the rising defaults in the segment. Currently, ICICI’s collection agency is handling the portfolio until it identifies a suitable buyer, it is learnt. The bank’s total STPL portfolio size is estimated to be around Rs 3,000 crore, of which the bank intends to sell Rs 2,000 crore. By acquiring the portfolio, new entrants in the retail banking space will be able secure a foothold in the market. Almost 70% customers in the portfolio will be good customers and it will enable the player to sell other products to the same customers.

'Staff crunch in public sector banks'

The public sector banks have a shortage of one lakh staff and the shortfall needs to be filled up immediately to cope with rapid expansion plans and provide better customer services. "People are retiring. And the banks also have rapid expansion plans. There is a staff shortage of around one lakh, including officers and other cadre," the General Secretary, All India Bank Officers' Confederation, Mr Amar Pal, said. The situation has come to such a pass that there has been virtually no recruitment for 20 years. Moreover, because of long-drawn recruitment process, it is found that many of those shortlisted for appointment have taken employment elsewhere, he said.

Union Bank imparting special training to officers

‘Plan for the future while competing in the present competitive environment’ is the strategy of Mr M.V. Nair, Chairman and Managing Director of Union Bank of India, for getting his organisation ready to face the challenges in the next decade In this regard, the bank has come out with a unique model, where it picked up 30 officials in the age group of 30 to 40 years for a year-long training at its training college in Bangalore. “It is like a capsule MBA programme. Thirty of them were given 15 projects. These projects are those which the bank wants to implement in future. They work on these projects. I personally monitor them,” he said. “Now the second batch is under going training. Every year, we want to train 30 such officers,” Mr Nair said. Fortunately, attrition at that level has been quite low. As of now, none from the first batch of officers has left. “This year, we are recruiting around 2,500 people at different levels. We also have put in place fast-track promotion process,” he said. Union Bank is planning to cover all its branches under core banking solutions (CBS) by the end of this financial year.

Govt fiat to bulk up PSBs

In a significant move, the finance ministry has issued a directive instructing all government departments and ministries to park with public sector banks at least 60% of the funds under their control and distributed by them to PSUs and state government agencies. The move is aimed at helping nationalized banks garner significant business over their private sector counter parts. Simultaneously, the finance ministry has also directed government departments and PSUs to discontinue the practice of inviting competitive bids for bulk deposits with banks. This, according to the finance ministry, resulted in undesirable competition amongst banks, thereby leading to arbitrary hikes in deposit rates (even in the short term), which has consequences on the economy. Bulk deposits should be placed with the banks conducting the irregular business, the ministry said. The letter stated that as public sector banks had "a special role and importance in the banking industry and in advancing the economic policies of the government, it is important that departments/ministries conduct their business, as far as possible, through public sector banks".

BoE cuts rates by 25 bps

The Bank of England cut its benchmark interest rate by a quarter-point in response to slowing consumer spending and the steepest decline in house prices in a decade. The nine-member Monetary Policy Committee, led by the Governor, Mr Mervyn King, reduced the key rate to 5.25 per cent, the second reduction in three months.

Strike call by bank unions forum

The United Forum of Bank Unions (UFBU) has called upon its member units to strike work for two days on February 25 and 26 to express their protest against the delay in settlement of the long pending demands of the bank employees. The demands, among others, include the proposal to stop merger of public sector banks, the option to join a pension scheme, compassionate appointments, filling up of permanent vacancies through recruitment, putting an end to outsourcing of bank jobs, and early settlement of wage revision. The UFBU has also urged its members to be ready to go on an indefinite strike from the last week of March if these demands still remained unresolved

BoI to raise about Rs 1,360 cr

Bank of India has said its board has approved a proposal to raise about Rs 1,360 crore through an issue of 3.78 crore equity shares. In a notice to the BSE, the bank said it will issue the shares at a price of Rs 360 per share of face value of Rs 10, issued at a premium of Rs 350 per equity share, aggregating to Rs 1,359.81 crore. SBI Capital Markets Ltd, A.K. Capital Services Ltd, Edelweiss Capital Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, JM Financi al Consultants Pvt Ltd, Kotak Mahindra Capital Company Ltd and Motilal Oswal Investment Advisors Pvt Ltd were the book running lead managers to the issue.

Vijaya Bank eyes acquisition

The Bangalore-based Vijaya Bank is planning to acquire a bank in northern/western India to expand its reach, according to Mr Prakash P. Mallya, its Chairman and Managing Director. “We are definitely looking at inorganic growth. A north-Indian bank has in fact approached us albeit there are no concrete developments thereafter,” Mr Mallya said. The bank, which had done a total business of Rs 73,000 crore as on December 31, 2007, is aiming at closing the current fiscal with a total business of Rs 76,000 crore and a net profit of Rs 450 crore. “We will touch one lakh crore business by 2009-10,” he said. The bank has 1,008 branches across the country and would take the number to 1,050 by the end of March, 2008. On the interest rates, Mr Mallya said there were no plans for a reduction. “There are certain banks which are charging higher rates. Most of them are now announcing a cut. We cannot do it,” he said. Vijaya Bank’s interest rate on housing loans is currently in the range of 9.2-10.75 per cent, he added.

Syndicate Bank opts for QIP route to raise capital

Syndicate Bank has decided to raise its additional capital through the qualified institutional placement route instead of the follow-on public offer programme planned early this year. Syndicate Bank’s move followed the Government’s recent liberalisation permitting public sector undertakings/enterprises to raise capital through placement with placements of equity with qualified institutional buyers (QIB). Bank of India has already received permission to tap QIBs and is poised to make the placement. QIBs include financial institutions, banks, mutual funds, foreign institutional investors registered with SEBI, venture capital funds and multilateral financial institutions. Syndicate Bank’s capital raising involves issuing an additional 8 crore (80 million) equity shares. The equity float was expected to bring down Government stake in the bank from the current level of 66.47 per cent to around 57.64 per cent. The bank currently has a capital to risk weighted asset ratio of 11.99 per cent. However, its tier 1 capital was 6.99 per cent or 99 basis points over the prescribed threshold of 6 per cent. Syndicate Bank also had the flexibility to raise at least Rs 240 crore through perpetual bonds, to push up the tier one capital ratio.

Corporation Bank wins award for taking tech to rural areas

Contrary to popular belief, it was a public sector bank that walked away with the award for the best use of information technology in retail banking at the IBA & TFCI: Banking Technology Awards 2007, held on January 9, in Mumbai. Corporation Bank was the winner in this category, followed by Axis Bank as the runner-up. Corporation Bank has also taken technology to rural areas by introducing RFID/Smart Card based authentication devices that are operated by the business correspondents (BCs) at identified villages. The BCs serve as literal extension counters of the bank at these villages by providing basic banking services to people in rural areas

ICICI to list four subsidiaries

ICICI Bank will list at least four of its subsidiaries, starting with its brokerage arm ICICI Securities, and the process would commence within six months, Managing Director and Chief Executive Officer K V Kamath said. Noting that ICICI Securities could be the first of the lot to hit the capital market, he said it could be soon followed by two insurance arms - life insurance unit ICICI Prudential and general insurance arm ICICI Lombard - and the bank’s housing finance arm. Kamath said there could be two more probable listings - that of mutual fund arm and private equity business ICICI Ventures, but they could take some time.

Cabinet to talk SBS-SBI merger this Thursday

The proposal for merger of State Bank of Saurashtra (SBS) with the State Bank of India (SBI) will be taken up by the Cabinet on January 10. “Once the Cabinet approves the terms and conditions for the SBS merger with SBI, it will set the tone for merger of the rest of the associates with the parent. Internally, it is envisaged that the merger with all the subsidiaries will be completed by the end of 2008. There are HR issues but they are not intractable,” a top official of the SBI group said. The merger of SBS with SBI will be completed on January 27. Meanwhile, it is expected that top officials from the six associate banks will meet on January 25 to pass an in-principle resolution for merger with SBI. The SBI-associates merger will entail providing for pension benefits for all employees. At present, employees have only two benefits: gratuity, and pension or provident fund. However, SBI provides all three benefits to its employees. “There is unlikely to be a major burden on the parent bank to provide the third benefit. It is a windfall for the associates’ employees who will now enjoy the third benefit,” a top official in the SBI group said. SBI will have to factor in changes in the accounting standards (AS-15) that mandate a provision for pension liabilities going forward. Banks have sought to stagger the provision over a period of five years starting April 2008. It’s not clear who among the unions will head the resolution of industrial disputes post-merger.

SBI, ICICI extend festive loan offer to January 31

State Bank of India (SBI) and ICICI Bank have extended their limited period festival offers, providing lower interest rates on new home and other retail loans, till January 31. SBI reduced interest rates on new home, car, truck and farm equipment loans by 50 to 200 basis points from October 8, 2007, as a special offer. On October 10, 2007, ICICI Bank, the largest private sector lender, cut interest rates on floating rate home loans by 50 basis points to 11 per cent and on other retail loans by 25-50 basis points.

SBI may offer employees stock purchase plan

While State Bank of India informed the BSE that its central board would meet on January 14 to consider issue of increase in the issued capital via the rights issue and Employees Stock Purchase Scheme, the announcement turned out to be a pleasant surprise for the bank’s employees. Mr. Prakash Gangal, Secretary, All India State Bank of India Employees Federation said ‘we had asked for Employee Stock Option (ESOP) or some quota for employees at concessional rate on November 26. The management had then stated that the matter would have to be referred to the Government and did not commit anything. Even last week, when we followed up on this issue, we learnt that they had not heard from the Government. We are pleasantly surprised now. We will have to wait and watch," he said when sought for his comment. He, however, pointed out that such of those who already had some shares of the bank would be eligible to apply for rights shares.

Licence to open bank branches may go

The mandatory licensing requirement for Indian banks to open branches may be done away with. The department of financial services is taking up the matter with the Reserve Bank of India (RBI) as banks are no more shying away from opening branches in semi-urban and rural areas. The likely relaxation, however, will not apply to foreign banks. “There is a case made out for dispensing with the mandatory licensing requirement with certain transparent safeguards to ensure an equitable distribution of bank branches in the urban and rural areas,” an official source said. RBI might make it mandatory for banks to open one rural or semi-urban branch for every new urban branch that is opened, added the source. Citing a recent speech of RBI Governor Y V Reddy that “many banks now find that branches in semi-urban and rural areas are also commercially viable”, official sources said the entire policy followed by RBI on opening new branches needed to be revisited. Many public and private sector banks have been demanding the removal of the licensing system, which comes in their way to expand organically in a rapid manner. The department has sought views from public sector bank chiefs in this regard.

Bank of Rajasthan divesting 10% stake to raise Rs 167 cr

Jaipur-based private lender Bank of Rajasthan is set to divest nearly 10 per cent stake in the bank to raise upto Rs 167 crore. "The bank will allot shares and convertible warrants to four private equity players - Glasia Mauritius II Ltd, BNP Paribas S A, Shree Naman Developers and Darashaw & Company, who will together invest nearly Rs 167 croe," a source said.

Ministry, RBI differ on NPA classification

The Finance Ministry has taken the view that advances to infrastructure projects that face completion delay exceeding a year need not be classified as non-performing assets (NPAs) by banks so long as the interest component on the loan was being serviced. This stance is, however, in contrast to the Reserve Bank of India (RBI) guidelines that require advances to infrastructure projects delayed by more than a year to be classified as NPAs even if interest was being paid on time. Official sources said this issue had come up for discussion at the meeting that the Finance Minister, Mr P. Chidambaram, had with chief executives of public sector banks (PSBs) on Friday. Indications are that the RBI may again be requested to review the guidelines. “Our view on this is that the account cannot be classified as NPA in situations of delay over one year if the interest is serviced,” a senior Finance Ministry official said.

Canara Bank may make an acquisition this year : Rao

Canara Bank has hinted that during the current year it may acquire a bank which can increase its footprint in the North and West India. "We are still examining it (possibility of acquisition). Definitely in the current year we should see some action," the Canara Bank CMD, Mr B N Rao, said. "We are strong in the South. But actually lot of growth is taking place in the North and the West." While making an acquisition, Canara Bank would prefer a bank that has a good footprint in these areas, he said.

Bank employees to strike work on Jan 25

About a million employees and officers from various banks in the country will go on day-long strike on January 25 to protest against the planned merger of associate banks of State Bank of India with their parent bank and press for resolution of their unmet demands including early settlement of wage revision, and extension of one more option to join pension scheme This decision emerged at a meeting of the United Forum of Banking Unions (UFBU) here in the Capital today, according to the UFBU Convenor, Mr C.H.Venkatachalam. The strike call for January 25 coincides with the meeting of the boards of six associate banks on the same date to consider in-principle nod for their merger with SBI. Besides the strike call for January 25, the UFBU has also decided to go for two days of strike on February 25 and 26. “If our demands are not met by then, we will go on an indefinite strike from last week of March 2008,” Mr Venkatachalam said.

SBI hikes rates on deposits of up to 2 years maturity

State Bank of India on Thursday hiked rates on fixed deposits of up to two years maturity. This is the second time in less than a month that the bank is hiking its deposit rates. The interest rates have been hiked by between 0.5 and one percentage point with immediate effect. SBI would now pay 7 per cent on 91-180 day deposits, which is 175 basis points more, and 7.5 per cent on 181 days to less-than-a year deposits, an increase of 100 basis points. It would now offer interest of 8.75 per cent on deposits of 1 year to two years, which is a 50 basis points increase on its earlier maturity slab of 1 year to 549 days and a 25 basis points hike on 550 days deposits.

United Bank sets aside Rs 250 crore for IT

United Bank of India (UBI) has committed an investment of Rs 250 crore on information technology for the next financial year. The investment will cover a massive roll out of core banking solutions (CBS), on line share trading facility, phone banking and cash management services among others. P K Gupta, chairman and managing director, UBI, said, “The main challenge in the coming year would be the application of technology for business growth.” “All these initiatives are a part of our vision to emerge as a dynamic, techno-savy, customer-centric, progressive and financially sound bank,” said Gupta. The bank has roped in Tata AIG Life Insurance Company as a strategic partner for its life insurance venture and launched a child insurance scheme in December 2007. “We are going to launch some exclusive products in this area,” he added.

CorpBank to add 100 branches in 2008

Corporation Bank will be opening 100 new branches in the calendar year 2008 with focus on western and northern regions of the country. The bank has already received the approval from the Reserve Bank of India for its biggest expansion initiative, Mr B. Samba Murthy, Chairman and Managing Director, Corporation Bank, told after the inauguration of its 950th branch in the country at Film Nagar (Hyderabad) on Wednesday. “We are now looking beyond Karnataka and would like to tap the market potential in the western and northern regions. This is in line with our aim of crossing one-lakh-crore mark in our business in 2008,” Mr Murthy said. By May 2008, the number of branches would be 1,000 and the remaining branches would be added by December this year, he said. The bank is building on its new format branches which house ‘CorpInvest Shoppe’ to cater to varied investment needs of the customers. “With the opening of today’s branch, we now have three new format braches. We plan to add another 37 before the year-end,” he said. The bank has also launched its ‘Branchless Banking’ at Shankarpalli near here to conduct transactions through biometric smart card with the help of a business correspondent

SBI lures CAs, lawyers with hefty pay package

State Bank of India (SBI) is recruiting chartered accountants (CAs) at the entry level on contract by offering a salary that is considered hefty by public sector bank standards. The country’s largest bank will also dangle a carrot in the form of loyalty bonus on completing a certain number of years in service to CAs in an attempt to retain them. The CAs would be placed in departments such as risk management, treasury, accounts and compliance. During the probation period of six months, CAs will get a lump sum payment of Rs 50,000 a month. After completion of the probation, the salary will increase to Rs 9 lakh a year, which will be split into two components - 70 per cent fixed pay and 30 per cent variable pay. “Our experience has been that many professionals leave mid-way even when on contract. We want professionals to remain with us and that is the driving factor behind the decision to offer loyalty bonus,” a senior SBI official said. The direct recruit in the law officer category will get a maximum of Rs 3.5 lakh a year as salary. For them (law stream), the bonus will be paid at the rate of 20 per cent of the total remuneration. The bank expects to induct over 10,000 employees in the current financial year.

Govt to subscribe to SBI rights issue:

Finance minister P Chidambaram on Saturday said the Union government has decided to subscribe to the State Bank of India’s rights issue in a non-cash transaction [SBI,Bank] Confirming reports, the FM said, “the decision is a non-cash transaction which would see the bank (SBI) setting up a redemption fund that would comprise dividends and additional taxes that SBI would pay.” SBI’s Rs 17,000-crore rights issue will be one of the largest public offerings by an issuer in India. The government would need to pump in Rs 10,000 crore as its contribution to the offering. It holds controlling interest in the country’s largest bank after the shares were transferred to it from the Reserve Bank of India. If things go as per plans, the rights issue will be launched in the second week of February and the process will be over by the second week of March ’08. “If something on similar lines has to be done for other PSU banks, then it would depend on how the banks pay the dividends and additional taxes,” Mr Chidambaram added

Withdraw money on Moving Train !!!!!!!!!

Yes, Punjab National Bank is planning to install ATM on Delhi-Agra Shatabdi. [PNB,ATM] There is a new year gift from the Indian Railways to its commuters. After months of will-it-won’t-it speculations, the department has now decided to go ahead with the proposal for automated teller machine (ATM) facility on moving trains. As a beginning, the state-run Punjab National Bank (PNB) will install an ATM on the Delhi-Agra Shatabdi Express, which is likely to be operational by February 15. PNB was awaiting final approval and communication from the railways after which the work of installation of the ATM would begin. The ATM should be installed and become operational by mid-February. After the project’s success, the railways plan to extend similar facility on other routes too. Meanwhile, the railways propose to rope in six nationalised banks, including Canara Bank, Punjab National Bank, Indian Bank, Dena Bank, Union Bank of India and Bank of Baroda, for setting up ATMs at various railway stations.

Karnataka Bank revises rates

Karnataka Bank Ltd has revised interest rates on term deposits with effect from January 1. The interest rate on term deposits of one year to less than two years would be 8/75 per cent (8.50 per cent) and of two years to less than three years would be 9 per cent (9.25 per cent). Interest rate on term deposits of three years to five years would be 9.25 per cent (9.50 per cent). Domestic term deposits of senior citizens with maturity period of one year and above would attract 0.75 per cent more compared to the deposits of the general public. [Karnataka BAnk, Interest]

There’s no one to blame if your ATM hands you a fake note!

What do you do if you find a counterfeit note while withdrawing money from an ATM? You may be shocked to learn this, but there is little you can do. Forget about losing money, you could even be booked for cheating or possessing a counterfeit note. This is what norms of several banks say. “There is absolutely no defined mechanism to fix the responsibility or to check the veracity of counterfeit note claims from the customers,” a top RBI official from Mumbai said. The gravity of the situation can be gauged from the fact that ATMs are rapidly emerging as an alternative to bank branches and currently there are 31,000 ATMs across the country. These ATMs on average register 300 transactions a day. The number of counterfeit Rs 500 notes had gone up from 12,014 in 2005-06 to 25,636 in 2006-07. “We take our own precautions. But if something is suggested or designed, we will be happy to implement,” Mr B. Samba Murthy, CMD, Corporation Bank said.

Finmin no to interest subsidy hike on crop loans

The finance ministry has ruled out an increase in interest subsidy, which at its present level of 2 per cent will cost the exchequer more than Rs 2,000 crore this fiscal, given for short-term crop loans. The government has been giving a subvention of 2 per cent with a ceiling of Rs 3 lakh on the principal amount of crop loans with effect from the kharif season of 2006-07. The scheme has been extended to this fiscal as well. The interest subsidy is provided by the government to public sector banks, cooperative banks and regional rural banks on the involvement of their own funds and concessional refinance to RRBs and cooperative banks through NABARD

SBI to open third branch in US

SBI is readying to open its third full-fledged branch in the US by end-fiscal, to widen its network abroad. The bank is likely to get the approval from the US Federal Reserve Board early next year and is understood to have received the first clearance from the New York State Banking Department. SBI has already two full-fledged branches in the US (New York and Chicago) and a representative office in Washington. The bank has a subsidiary in California - SBI California, which has six banks in the US - Los Angeles, Artesia, San Jose, Fresno, Congoa Park and San Diego. The third branch is expected to come up in New York and it will focus mainly on corporate lending.

Canara Bank redesigns brand identity

In an effort to fight the growing competition and to attract new customers, Canara Bank on Saturday announced a new brand identity. [Canara Bank, Brand] The new logo, which depicts interlocking triangles - one rich blue and the other a bright yellow - was unveiled by Union Finance Minister P Chidambaram at a function in Bangalore. Created by brand consultants Ray + Kesavan WPP, the logo symbolises the bond between the bank and its stakeholders, which includes its customers, employees, investors, institutions and the society at large, bank executives said. Canara Bank Chairman and Managing Director M B N Rao said it had become imperative to rebuild the brand in order to attract and retain customers, who now had a variety of alternatives. “We also have to take into account post-2009 scenario when foreign banks will have access to more organic and inorganic growth,” Rao said. He hoped that the new identity would particularly attract the younger generation

If you are frequent visitor to ATM, then read this..

Free ATM usage from April 2009 Recently RBI gave a statement that ATM usage charges across all banks will be free from April 2009. The customers feel happy about this because they are paying money on every transaction done through other banks ATMs ranging from Rs.10 to Rs.60, now they can save all those money. The banks are not happy because they were earning fee commission every time a non-customer used their ATMs and there will be drain on their profits. During the period when there was craze to open ATMs, Some of the banks joined hands to provide ATM services at reduced costs. Some smaller banks, to retain their customers joined hands with banks having wide ATM base. Some banks are refunding the charges incurred by their customers for using their banks ATM card at other banks ( only if they maintain some balance as stipulated by the bank) From here onwards banks will think twice before opening ATMs because of the costs associated with it. (rent, furnishing, power, machine, A.C., guard, security and many) The banks may force the customers to use ATMs for cash withdrawal. The charges for ATM card issue and annual charges may go up substantially. The other bank may not allow next banks customer to use his ATM. [ATM,Bank,RBI]

Intending to take Educational Loan, then read this...

The Educational Loan is going to be cheaper, say thanks to the government. The Government is thinking to bear interest burden on educational loans taken by students during moratorium period or the times when students are pursuing academincs and have not yet begun earning. The Manmohan Singh government is finalising a scheme in consulation with Planning commission. The corpus of the scheme is estimated to be Rs.4,000 crore and the Interest burden on the government is estimated to be Rs.650 crore a year. The above amount arrived by planners is based on that five lakh students from families earning Rs.2.5 lakh a year or less availed of the loans. The interest subsidy would be availabe for students meeting the economic bar set for beneficiaries and studying professional and technical courses at the undergraduate and post-graduate levels. The government is intending to implement the scheme from the next academic year 2008, also wants to ensure that the benefit should be available only for one loan. Untill now the education loans come with a clause which allows students not to pay interest during academic life. The interest for this period is added to the principal and repayment begin once the student availing of the loan starts working. This step by the government will be a breather to Banks who lend to students as they can lend more freely. This step is more useful to students as the courses take normally 3 to 4 years. By the time they complete the course and start earning their loan would have been increased by 30 to 50% by addition of interest. If the government takes this burden they will be relieved a lot.

Bank of Baroda Recruitment for Specialist in senior management category

BOB is recruiting for specialists in senior management category. Last date for applying 18.01.2008..http://www.bankofbaroda.com/recruitment.asp?artid=2102&modid=36

Deutsche Bank to infuse Rs 2,155 cr in Indian unit

Deutsche Bank said it will infuse an additional Rs 2,155 crore in its Indian operations. This includes Rs 1,470 crore Tier-I capital for the bank’s branches and Rs 685 crore towards equity of the newly formed non-banking finance company for which the Deutsche Bank group received approval recently. With this infusion, the group’s total capital in India will cross Rs 5,700 crore, making it among the highest capitalised foreign banks. The bank will use the additional funds for lending, both corporate and retail. Mr Gunit Chadha, Chief Executive Officer of Deutsche Bank India, said, “The fresh capital will allow us to offer greater local balance sheet financing for our corporate, institutional and retail clients.”

SBI goes aggressive on stocks

State Bank of India (SBI), the country’s largest bank, is aggressively scaling up its equity investments, for the first time since banks were allowed to invest in company shares over a decade ago. Till March 2007, the bank had invested a total of Rs 1,973 crore in shares of companies. In the nine months since then, it has added Rs 3,000 crore to its investment kitty, making investments of over Rs 100 crore in a clutch of blue-chip companies including GMR Infrastructure, Godrej Industries, Maruti Suzuki, Cairn India and DLF, besides closest rival ICICI Bank. Last year, the bank’s equity book had expanded by Rs 455.46 crore. “We have never looked at equity the way we are doing in the last one year or so. We are building (our investment portfolio) gradually and we intend to (continue to) do it,” said a senior SBI official. “There has been a shift in the financing of companies to a combination of debt and equity. If the bank has to have a relationship with the corporate, then it has to be in the debt and equity segment together. We are taking part in nearly all issues unless we feel the valuation is too high,” said the official.

Encashment norms for joint term deposit holders eased

The Finance Ministry has relaxed encashment norms for joint holder type term deposits under the tax-saving ‘bank term deposit scheme’ framed last year. This scheme was developed to encourage flow of long-term deposits into the banking system. In the event of the death of the first holder, the Central Board of Direct Taxes (CBDT) has now allowed the joint holder to encash the term deposit before its maturity. Hitherto, the scheme did not permit any encashment of term deposits before the expiry of five years.

ING Vysya's new deposit scheme

Private lender ING Vysya Bank has hiked interest rate on 120-day deposits by 25 basis points to 7.75 per cent in a bid to attract more funds. The bank has created a new slab of 120 days for fixed deposits. This slab was earlier clubbed with 91-364 days, drawing 7.50 per cent interest rate. The new fixed deposit scheme has been effected from December 15.

Union Bank to enter MF biz

As part of its ‘Vision 2012’ programme, Union Bank of India is planning to diversify into mutual fund business and will also explore the possibility of entering the venture capital arena. Mr M.V. Nair, Chairman and Managing Director of the bank, told newspersons that the meeting also decided to look for a partner to get into credit card business. The ‘Vision 2012’ is aimed at making Union Bank of India one of the three largest banks in the country and also becoming a global player with its presence in at least 20 countries. As of now, the bank has a branch in Shanghai in China and a representative office in Abu Dhabi. These apart, a full-fledged branch will be opened in Hong Kong in February next year. The bank would choose ‘hot growth spots’ for locating its overseas branches. He said that the bank would recruit another 16,000 employees over the next four years to support its diversification plans as also keeping in view the tremendous growth expected in the financial sector.

Bank Unions submit Charter of Demand (Wage Settlement) to IBA

As we are aware the wage settlement expired on 31.10.2007 and new settlement is due from 01.11.2007 And the Bank Unions have already submitted their charter of demands to Indian Banks Association. The copy of same is available for you. Click here to read more.http://groups.google.co.in/group/the-bank-page/web/Charter+of+demands-wage+settlement-bank.pdf

SBI mulls VRS for 40K staff

State Bank of India (SBI) is planning to introduce a voluntary retirement scheme (VRS) for its subordinate staff in the next financial year. The proposed scheme aims to give chance to over 40,000 employees, who find it challenging to work in a computerised environment and competitive market conditions. "The nature of work has changed substantially due to introduction of core banking solutions (CBS) and automation. Besides, the work demands on staff are growing enormously to retain market share. Some of the subordinate staff should get a decent exit option," a senior SBI official said. He, however, ruled out any VRS for the clerical or officer cadre. There are three aspects related to VRS for this category of staffers. First, with computerisation and rollout of core banking platform, their role is limited. Second, even if some of them could be retrained, the cost incurred may not bring much benefit. Finally, they are not mobile.

RBI plugs loophole in forex management regulations

The Reserve Bank of India has detected and plugged a loophole in FEMA (Foreign Exchange Management Act) regulations which some Indian companies were exploiting to raise funds abroad and bring to India. The regulations are related to repayment of advances that are paid by overseas investors to Indian companies for allotment of shares under automatic FDI route. Under these regulations, while Indian companies are allowed to receive advance payment from NRIs and overseas investors, no time limit was stipulated for issue of shares or refund of the amount. Taking advantage of this loophole, companies instead of allotting shares use the advance money for other purposes and refund it after two to three years, giving some vague reasons. On Friday, through a circular to banks and authorised foreign exchange dealers, RBI has plugged this loophole, stipulating that companies receiving funds from abroad as advance payment for allotment of equity shares or debentures should issue the instruments to investors within 180 days.

OBC is recruiting - Click here for more details

Oriental Bank of Commerce is Recruiting 200 Officers. Laste date to submit application is 14.01.2008http://the-bank-page.googlegroups.com/web/OBC-PO-2008.pdf

Banks asked to unwind guarantees to FIIs

Foreign institutional investors (FIIs) from now on cannot avail of guarantees (irrevocable payment commitments) from banks for their payment obligations at the stock exchanges. In a circular to banks on capital market exposure, the Reserve Bank of India (RBI) has said entities such as FIIs are not permitted to avail of fund or non-fund based facilities such as irrevocable payment commitments (IPCs) from banks, under the provisions of the Foreign Exchange Management Act (FEMA). Banks have been asked to unwind all such guarantees given on behalf of FIIs within six months starting today. The RBI’s regulations under FEMA state that the payment for buying shares by persons resident outside India has to be made through inward remittances, with non-resident Indians (NRIs) having the option of paying through debits in their bank accounts in India. An official with a private sector bank, which was already including loans to mutual funds as capital market exposure, said this would have a marginal impact as only a few banks had not included loans to mutual funds in their capital market exposures.

Bank loans to equity MFs to be part of capital market exposure

Bank loans to equity-oriented mutual funds will now form part of the bank’s total capital market exposure, said the Reserve Bank of India. In its note the RBI said, “Banks are advised to be judicious in extending finance to mutual funds and grant loans and advances to mutual funds only to meet their temporary liquidity needs for the purpose of repurchase/redemption of units.” A senior official from a public sector bank said, “A short term loan to a mutual fund is a standby facility in any case. In India we have not seen a stage, as yet, of large-scale redemptions, which would make mutual funds approach banks for loans.” The RBI also said that irrevocable payment commitments (IPCs) issued to stock exchanges at the request of mutual funds for their secondary market purchases would also form part of banks’ capital market exposure. This facility, too, is not something that mutual funds normally use, the bank official said.

If you use CyberCafe to do Banking Transaction, Then you must read this

Every time you make an online bank transaction at a cyber cafe, you run the risk of losing all the money in your account, since you could leave traces of your password on the computer. A 27-year-old hacker, who used special software to get nearly 100 bank account passwords from cybercafes, was arrested in Bangalore. "It's a major crime," said SP (Cyber Crime-CoD) B A Mahesh. The hacker is Joseph, a diploma holder in computer science from Virudhunagar district, Tamil Nadu. A Bangalorean since 1999, he worked as a data entry operator before losing his job two years ago. Joseph came under the scanner of sleuths investigating a complaint lodge recently by Carl Braganza, HR manager at a software company. Braganza claimed that someone had hacked into his Citibank account on Oct 10 and defrauded him of Rs.1.27 lakh: Rs.87,200 was used to recharge cellphones and Rs.40,000 transferred to another bank account in Mumbai. The sleuths traced the hacker's IP address to Anu Cyber Cafe in Mahadevapura. They zeroed in on Joseph on November 29. When interrogated, Joseph confessed. Mahesh said Joseph visited cybercafes and installed a free software called 'Key Logger' on computers. "The software captures every stroke on the keyboard. If a person is checking his bank account on the net, all the details are recorded," he said. The number of visitors to cybercafes is high during the first week of the month, when people come to check their salaries. Joseph then went to the computer where he had installed the software and retrieved the data. Once he had the account details, he transferred money to his associates, who charged him a commission. The group recharged others' cellphones at discounted prices from the hacked accounts. " It is similar to a cellphone thief selling a stolen handset for half its original price," sleuths said. Some DOs and DON'Ts for those assessing sites at cyber cafe. DON’Ts Don’t leave personal documents at places where it can be picked up or viewed by others. Don’t log into online account from an insecure network. Don’t enter your log-in details on a website unless you are sure it is secure. A lock at the bottom or ‘https’ in the address field are signs of a secure website. Don’t follow links to banking sites. Don’t respond to e-mails that ask you to enter your bank details. Dos Type the bank’s URL yourself. Use other methods to enter details. Some banks have on-screen keyboards to avoid key presses. Scan your computer and update anti-virus software regularly. Times of India dated 15.12.2007

Corporation Bank offering ‘financial health check-up’

Corporation Bank will now offer a ‘financial health check-up’ for its customers. The bank is offering this service at two of its centres, Mumbai and Bangalore. Customers can get their finance portfolio examined, find out if it is a healthy mix and get advice on making investments. The bank plans to introduce this service at all its other important centres. The service in Mumbai was launched by Mr T.S.Vijayan, Chairman, Life Insurance Corporation of India. To supplement this service, the bank has also set up an ‘Investment Shoppe’, which is a one-stop shop that will offer loans, mutual funds (13 tie-ups), retail gold, demat services as well as offline and online trading. It will also offer non-life insurance products from New India Assurance, life products from Life Insurance Corporation. The bank can also collect direct tax, excise duty and custom duty with online remittance facility at this outlet. The bank is also running a pilot for ‘mobile banking’ at 2,000 merchandise institutions. “Mobiles are more secure than credit cards. The customer can transfer money from his account to his mobile and also use it instead of a credit card to pay his bills at a retail outlet,” said Mr Sambamurthy, CMD, Corporation Bank.

Canara Bank hikes offer price for Can Fin

Canara Bank has hiked its offer price to Rs 63 a share to the shareholders of Can Fin Homes from Rs 58 a share announced in August this year. The announcement to this has been made by Indbank Merchant Banking Services, which is managing the offer on behalf of the bank.

OBC is Recruiting - Click here for more details

Oriental Bank of Commerce is recruiting 200 probationery officers. Last date for application 14.01.2008

PSUs join talent hunt with big hiring plans

After a hiatus of sorts on large-scale recruitments, and with several rounds of voluntary retirement schemes behind them, public sector companies are back to hiring like never before. The trend is more pronounced in the case of PSUs in the infrastructure and banking sectors, with new inductions happening mainly at the entry level. According to Indian Institute of Banking and Finance estimates, public sector is slated to recruit over 1.5 lakh employees across various levels over the next three years. State Bank of India, Oriental Bank of Commerce, Union Bank of India, Andhra Bank and Bank of Baroda are among those working on plans to increase headcount. According to IIBF, public sector banks in the country are likely to recruit over 1.5 lakh employees over the next three years. SBI is looking to hire nearly 3,000 employees, mainly for its associate banks including the State Bank of Hyderabad, while others such as Bank of Baroda, Union Bank of India and Andhra Bank are reportedly looking to expand their workforce by about 2,000 at various junior-and middle-management levels. Oriental Bank of Commerce is already in the market for recruiting around 200 Probationary officers in its first phase of officer-level recruitments.

Insurance investments, banking may need PAN

After the capital markets, the government is targeting the financial sector - banking and insurance segments - to make it mandatory quoting of permanent account number (PAN) for investment products. The government is vetting a proposal to make quoting of PAN as a requirement for investment in financial products such as fixed deposits and unitlinked insurance plans (Ulip) above a certain limit. Credit cards are also expected to be included in the new list. The monetary ceiling has been mooted at Rs 1 lakh initially. According to government officials, the finance ministry has started consultations on the front with the financial sector regulators.

IOB to accept tax payments

Tax payers may pay their taxes through the branches of Indian Overseas Bank. The only requirement is that the taxpayer has to open an account with any of their networked branches and register for E-See Banking (IOB’s Net Banking) with funds transfer facility. With this facility, income-tax, corporation tax, wealth tax, gift tax, fringe benefit tax, banking cash transaction tax can be paid through Internet. Customer needs to log-in to http://tin.tin.nsdl.com/etax or alternatively http://incometaxindia.gov.in and select “Pay Taxes Online” and fill up the requisite challan.

Srs. look ahead with reverse mortgage

Kolkata-based UCO Bank has, on Saturday, announced the launch of a reverse mortgage loan scheme for senior citizens. The scheme is targeted for supplementing pension and other monthly income for citizens over 60 years. The scheme, being new in India, will offer the seniors a regular fixed sum per month from banks and housing finance players, based on the value of their property that they live in. The owners will receive the sum for a period not more than 15 years. A dozen banks, including Allahabad Bank and Punjab National Bank, have already launched a reverse mortgage scheme.

Union Bank mulls rights issue

“We would be making the plans for the next financial year in February, and if we find there is a need for capital, we may look at a rights issue as an option,” Mr M.V. Nair, Chairman and Managing Director of Union Bank of India, told. The Government currently holds 55.43 per cent stake in the bank, with public institutions including mutual funds, financial institutions and banks, insurance companies and foreign institutional investors (FIIs) having 31.1 per cent stake. Union Bank, on Thursday, also raised a debt of Rs 600 crore, which includes Rs 200 crore in perpetual debt and Rs 400 crore in Tier-II bonds. The bank is targeting a total business of Rs 1,85,000 crore of which Rs 1,05,000 crore would be from deposits and Rs 80,000 crore from advances. Currently, the total business is at Rs 1,65,000 crore. Mr Nair also said that the capital adequacy ratio of the bank after the introduction of Basel II norms in April next year will be 11.5 per cent. “The net interest margin (NIM) of the bank is also expected to dip marginally to around 3 per cent for the current fiscal from 3.05 per cent last year.” he said.

SBI tops customer complaints : RBI data

SBI has emerged as the bank with the maximum number of customer complaints in 2006-07 (April-March), followed by ICICI Bank, according to data available with RBI. SBI - the largest bank in the country - had a whopping 8,579 complaints in 2006-07. As against this, ICICI Bank has 5,048 complaints against it - a distant second. This is the first time the central bank has come up with such an exhaustive and dis-aggregated data on customer complaints. Total complaints against public sector banks stood at 21,660, out of which the SBI group alone accounted for more than half - 11,117. Of the 9,036 complaints against private sector banks, more than 90 per cent were against new generation banks - 8,211. In the credit cards segment, complaints against SBI stands at 0.73 per 1000 - much higher than ICICI Bank's 0.19.

12 banks sign financing documents for Delhi airport

Delhi International Airport Pvt Ltd, which is taking up the modernisation of Delhi airport, signed key financing documents with its project lenders for Rs 3,650 crore and foreign currency loan of $350 million. The total debt requirement has been financed by Canara Bank (Rs 600 crore), IIFCL (Rs 500 crore), Union Bank of India (Rs 500 crore), Oriental Bank of Commerce (Rs 400 crore), Central Bank (Rs 400 crore), Andhra Bank (Rs 250 crore), Vijaya Bank (Rs 250 crore), IDFC (Rs 250 crore), Bank of India (Rs 250 crore) and PNB (Rs 250 crore). The loan of $350 million has been financed by ICICI Bank, Singapore - $200 million and Abu Dhabi Commercial Bank, Abu Dhabi - $150 million.

5 PSBs to have majority stake in Payments Corp

Five public sector banks - State Bank of India, Canara Bank, Punjab National Bank, Bank of Baroda and Union Bank of India - will have the majority stake in a new company to be incorporated to undertake the payment and settlement work, currently being done by Reserve Bank of India. Initially the company, to be incorporated under Section 25 of the Companies Act, will have nine shareholders - five PSU banks, two private and two foreign banks. The non-PSU banks are likely to be ICICI Bank, HDFC Bank, Standard Chartered and HSBC. Initially, the proposed company-National Payments Corporation of India-will take over the RBI-run clearing houses in the four metros-Mumbai, Delhi Chennai, and Kolkata. The employees of these clearing houses will also be transferred on deputation to the new company.

BoE cuts rates by 25 bps to 5.5%

The Bank of England cut interest rates for the first time in more than two years on Thursday, after a week of feverish speculation over whether it would act to shore up economic growth in the face of the global credit crunch. The Bank said it had cut its key rate by a quarter percentage point to 5.5 per cent. The European Central Bank left interest rates at 4.0 per cent on Thursday, as expected, resisting a growing global bias towards monetary policy easing.

HDFC plans mobile wallets, remittances

HDFC Bank, which already provides mobile banking facilities, is now planning to foray into mobile wallets. These will enable customers to use their mobile phones for transactions instead of carrying the debit or credit cards. “Our mobile banking users has doubled in less than six months of this year and with the growing trend, we are planning to introduce mobile wallets and remittances soon,” said HDFC Bank executive vice-president, retail banking, Rahul N Bhagat at the Banktech Congress in Mumbai. “We are looking at getting debit-card and credit-card services on mobile phones for transactions and introduce it in the rural areas,” he added. The bank is also focusing aggressively on ATM expansion. Kotak Bank has invested around Rs 20 lakh for developing mobile banking services. Currently, there are 1.6 million mobile banking users in India

Trust banks to draw up your will and execute it too

Here is the beginning of my post. And here is the rest of it.More and more banks are keen on offering services such as will drafting, execution and trusteeship for management of property of the deceased. For customers, it perhaps makes more sense to entrust their wealth to a bank, which already has experience in handling financial matters. For banks, it is an opportunity to earn fee income and also cross sell other investment products. Some banks such as Canara Bank and Bank of Maharashtra have been offering the service for quite some years now and the latest entrant in this segment is Centurion Bank of Punjab (CBoP). CBoP offers this service through its joint venture, Centurion Executorship, Trusteeship, Real Estate Management and Advisory Services Pvt Limited (CERMA) and Bank of Maharashtra through its fully-owned subsidiary, Maharashtra Executor and Trustee Company (METCO). While CBoP caters to customers with a net worth of $1 million, Canara Bank and Bank of Maharashtra offer this service to everyone. Charges for drafting range from Rs 3,000-Rs 5,000. For execution and management of trusts, banks charge about 1-2 per cent of the value of the assets as fees.

Now, withdraw cash without ATM cards

If you are falling short of money while on a shopping binge, you can ask your friend to SMS a system generated personal identification number (PIN).The PIN can be used to withdraw money from his account in an automated teller machine (ATM). NCR, a global self service technology major, has developed an interactive technology for cash withdrawals without an ATM card. It is in talks with a leading private sector bank to offer this technology. “We are also in talks with a couple of other banks to offer our technology. The technology solution will offer services such as stock trading, shopping, mobile money transfer and bill payments through interactive ATMs. However, the system generated PIN can be used only once. Banks are willing to spend on this technology,” said country sales manager of NCR India’s financial solutions division Mr Manjunath Rao.

KVB ties up with IDBI Capital

Karur Vysya Bank (KVB) has tied up with IDBI Capital Market Services Ltd to provide online trading facility on both BSE and NSE for its demat account holders. These transactions could be put through idbipaisabuilder.in of IDBI Capital and the service would be available from March 1, 2008, Mr P. K. Kuppuswamy, Chairman, KVB said.

Centurion’s service for NRIs in Canada, UK

Here is the beginning of my post. And here is the rest of it.Non-resident Indians in Canada and United Kingdom can get all information regarding account operations through ‘Post Box Service’ without incurring any courier charges. Centurion Bank of Punjab has launched ‘Post Box Service’ in the two countries for NRI customers who can use the service to send documents, statement and cheque requisition, account instructions, electronic banking application form, mandate application form, change of address form, PIN re-generation, debit card re-issue or any other account operating instructions including FD opening or renewal instruction. The service will be provided free of charge. The documents should be sealed thoroughly and sent through ordinary inland postal service in the above countries. The service cannot be used for sending cheque, demand draft, cash or any other monetary instrument.

SBI requires Law Officers - Click here for more

Here is the beginning of my post. And here is the rest of it. SBI is recruiting for Law Officers

SBI is hiring - click here for more details

State Bank of India is hiring for the post of Customer Relationship Executives (contractual basis)

Banks look to sell bad loans to clean up books

Here is the beginning of my post. And here is the rest of it.A number of banks are planning to put on the block loans with a face value of Rs 2,500-3,000 crore to clean their balance sheets before the fiscal year ends. State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank of India, UCO Bank are among some of the banks that are keen on offloading poor quality loans from books. To being with, bidding for PNB’s loan portfolio opened on Monday. The bank is looking at selling 59 loan accounts with a face value of Rs 400 crore for cash and another 10 accounts for security receipts in return. State Bank of India is planning a circle-wise auction. The total face value of the loans is said to be Rs 1,000 crore. Bank of Baroda has invited bidding from December 13 for 100-odd loan accounts with a face value of Rs 400 crore. Union Bank of India has asked the bidders for only security receipts against the sale of bad loans. This would mean that only asset reconstruction companies (ARCs) can bid for the Union Bank’s auction. However, the size of the auction is very small - around Rs 100 crore - since this is the first experiment by the bank. Kolkata-based UCO Bank, too, is eyeing the market with the loan book of Rs 200 crore, but is it looking at a combination of both cash and SRs.

'All Arabs will prefer Islamic banking’

Here is the beginning of my post. And here is the rest of it.Hussein Hamid Hassan is considered as the father of Islamic finance. He received his PhD from the faculty of Sharia at the Al Azhar University in Cairo in 1965 and holds two degrees in law from the International Institute of Comparative Law, University of New York. He chairs the Sharia Supervisory Committee of many Islamic banks in the Middle East, and has advised several governments. An expert in Law, he had been the attorney general for the government of Egypt between 1969 and 1970. He has advised several governments in the Middle East and CIS countries on establishment of Islamic Finance Institutions. According to Mr Hassan, Islamic financing is the most equitable form of financing since it enables the creation of wealth without fuelling inflation or stoking a financial crisis.

Banks refuse dollar loans to exporters

Here is the beginning of my post. And here is the rest of it.Suddenly, foreign currency loans have become a scarce commodity. Indian banks draw foreign currency credit lines from international banks to lend to local exporters. These credit lines have now dried up with the subprime fiasco severely impacting the global money market. Under the rules stipulated by the Reserve Bank, banks can charge a maximum of Libor (London inter-bank offered rate) plus one percentage point for such loans, commonly called packing credit in foreign currency (PCFC). Libor is the international benchmark rate for bulk money. “Liquidity has become so tight that we would be losing money if we give PCFC loans to exporters,” said the head of trade finance of a private bank.

Bank staff to strike work today

Here is the beginning of my post. And here is the rest of it.Over 45,000 employees, under the banner of State Sector Bank Employees Association and 2,500 officers under the banner of All India Bank Officers Association (AIBOA) in the subsidiary banks of SBI, are observing strike on Monday to oppose the attempts of SBI to merge its associate banks with itself. On December 4, over 24,000 officers, under the banner of Associate Banks Officers Association, in all these banks are also observing the strike for the same reason.

Jobs in ICICI Bank : Click here for more details

Here is the beginning of my post. And here is the rest of it.ICICI bank is hiring for more details visit; http://groups.google.com/group/the-bank-page/web/vacancies-in-icici-bank

Banks lure Gen Next with new schemes

Here is the beginning of my post. And here is the rest of it.With 50% of India’s population consisting of youngsters, bankers are increasingly targeting kids and teens by offering products that meet their requirements. And with a third of the population aged between four and 14 years, kids are playing an important role in purchase decisions from consumer durables to automobiles. “We recognise the changing role of children in purchase decisions and want to harness them by introducing them to banking and money management,” says Maninder Juneja, head-retail liabilities, ICICI Bank. Similarly, HDFC Bank also has a Kids Advantage account. Features include a free education insurance cover upto Rs one lakh. Moreover, amounts in excess of Rs 5,000 over and above a balance of Rs 10,000 gets converted into fixed deposit for a specific period in the child’s name. Even nationalised banks are catering to Gen Next. Indian Bank launched its saving product IB Smart Kid in Aug 2007 targeting kids below 18 years.

Realty claims a third of private bank loans

Here is the beginning of my post. And here is the rest of it.For every Rs 10 lent by new private banks, Rs 3 was lent to the real estate sector. In FY07, 32% of their loans were to the ‘sensitive’ real estate market, including direct and indirect exposures. This was despite tightening of lending norms during the period. Even foreign banks had a high share of 26.3% of its total advances in the market in FY07. In contrast, public sector and old private sector banks were more conservative in their real estate exposures with shares at 15.1% and 16.6% of their respective total loans in FY07. Interestingly, the real estate exposure rose sharply, despite several prudential measures initiated by the central bank during the fiscal year, requiring banks to set aside additional capital.

LVB's funds transfer facility

Here is the beginning of my post. And here is the rest of it.Lakshmi Vilas Bank has gone live with National Electronic Funds Transfer transactions across its 156 CBS-enabled branches in the country. The facility is expected to enable LVB customers to transfer funds between banks in a quicker and more secure manner. The bank introduced the `Lakshmi Super Fast money' two months ago. The product facilitated real time gross settlement transfer of funds to the tune of Rs 1 lakh and above among banks, at a flat commission of Rs 50 per transaction. The bank has also introduced on pilot basis a flexible deposit scheme `Lakshmi Freedom Deposit' with sweep out - sweep in facility in select branches