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.