State Bank of Travancore Q3

 

Public sector lender State Bank of Travancore (SBT) posted a 43% drop in net profit at Rs 256 Cr for the nine-month period ended December 31, 2013, this financial year, as against Rs 449 Cr for the same period last year. Total income during the period saw a 15.45% growth at Rs 7,785 Cr, when compared with Rs 6,743 Cr a year ago. NII rose 13.43% to Rs 1,767.76 Cr from Rs 1,558.43 Cr last year. Operating profit increased 6.65% to Rs 1,030 Cr from Rs 965 Cr. The capital to risk weighted assets ratio (CRAR) during the period under review stood at 10.03% under the Basel III framework. The regulatory minimum prescribed by the RBI was at 9%. Gross NPAs increased to 4.41%, as against 3.04% while Net NPAs stood at 2.73%, when compared with 1.83%.

Bank of India Q3

A sharp increase in provisions for bad loans hurt Bank of India’s net profit, which dropped 27% in the third quarter ending December 2013 at Rs. 586 Cr. Provisions or amount set aside for stressed assets, jumped 53% to Rs. 1,404 Cr from Rs. 916 Cr in the corresponding quarter of the last fiscal year. Further, provisions rose as restructured assets worth Rs. 298 Cr had to be declared as non-performing according to the RBI’s classification norm. “Without these provisions, our profit would have been boosted by Rs. 110 Cr,” said VR Iyer, CMD of the bank. Asset quality improved marginally with gross non-performing assets ratio as a percentage of total advances at 2.81% as on December, 2013 from 3.08% as on December, 2012. Net interest income rose 18% and non-interest income increased 17% year-over-year. Total advances grew 25% driven by robust growth in agriculture, corporate and retail portfolio.

Award for Corp Bank

Corporation Bank has been awarded the second runner-up in the IBA Banking Technology Award 2012-13 for the ‘best use of mobility technology in banking’ under the category of public sector banks. SR Bansal, Chairman and Managing Director, received the award from Raghunath A Mashelkar, Chairman, National Innovation Foundation, in Mumbai on January 27.

Indian Overseas Bank Q3

IOB has reported a 35% drop in net profit at 75 Cr for the quarter ended December 31, 2013, against 116 Cr posted for the comparable previous year quarter. M Narendra, CMD of the bank, attributed the fall in net profit to higher provisioning towards bad debts and restructured accounts. The bank reported a slippage of 1,615 Cr during the quarter. According to Narendra, the bank provided 690 Cr for bad debts this quarter against 486 Cr in the previous quarter, and hence the coverage ratio was close to 57%. Total income went up by 6% to 6,190 Cr (5,846 Cr). “The year so far has been very challenging. And we have been focussing on recovery, and have recovered 206 Cr during the period,” he said. The bank’s net interest margin went down to 2.26% for the period, from 2.39% in the previous year period. Gross non-performing assets rose to 9,168 Cr (5.27%) during the quarter from 6,515 Cr (4.13%) last year. Net NPAs increased to 5,481 Cr (3.24%) for the quarter under consideration from 3,595 Cr (2.33%).

ICICI Bank Q3 profit rises 13%

ICICI Bank posted a 13% increase in net profit at 2,532 Cr for the December quarter, on stable interest income and healthy loan growth in the retail segment. Chanda Kochhar, MD and CEO, said that but for the provisions of 215 Cr towards additional deferred tax, the profit would have grown 22%. Provisions towards bad loans during the quarter rose 88% to 695 Cr from 369 Cr a year ago. Net interest income was at 4,255 Cr, up 22%. Non-interest income was up 26% at 2,801 Cr. The bank made a treasury profit of 447 Cr during the quarter, compared to a loss of 72 Cr in the second quarter. Despite the hike in policy rate, ICICI Bank expects to sustain its net interest margin as the bank’s dependence on short-term funding is low. Overall, the loan portfolio increased 16%, driven by 22% growth in retail advances. Given the challenges in the economic climate, the bank moderated its corporate loan growth to 7% (year-on-year) in the December-quarter, against 11% in the preceding quarter. Total deposits witnessed 11% growth including one-time deposits inflow of $2 billion raised via the FCNR (B) route. NPAs in net terms, worsened to 3,118 Cr compared to 2,182 Cr at Dec 31, 2012.

Third Quarter Review of Monetary Policy 2013-14 : Statement by Dr. Raghuram G. Rajan, Governor, Reserve Bank of India

Good morning and welcome to the Reserve Bank.

Today, on the basis of an assessment of the current and evolving macroeconomic situation, we have decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 8.0 per cent.

2. Let me first address the balance of risks that confronts us in the evolving macroeconomic outlook. The slowdown in the economy is getting increasingly worrisome. Our current assessment is that growth is likely to lose momentum in Q3 of 2013-14, with industrial activity in contractionary mode, mainly on account of manufacturing. Lead indicators of services also suggest a subdued outlook, barring some pick-up in transport and communication activity. On the other hand, agricultural performance has so far been robust, and the strong pick-up in rabi sowing indicates that this should be sustained.

RBI surprises with 25 basis points rise in Repo Rate

 

Third Quarter Monetary Policy Review 28th Jan 2014

Mr. Raghuraman Rajan, Governer of Reserve Bank of India surprised the Banking circle with

Increase in the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 8.0 per cent; and consequently, the reverse repo rate under the LAF stands adjusted at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent.

But the cash reserve ratio (CRR) of scheduled bankskept unchanged at 4.0 per cent of net demand and time liability (NDTL).

The banking circle and the market was expecting the RBI Governer would keep the rates unchanged.

Following the recommendation of the Dr. Urjit Patel Committee, monetary policy reviews will ordinarily be undertaken in a two-monthly cycle, consistent with the availability of key macroeconomic and financial data. Accordingly, the next policy review is scheduled on Tuesday, April 1, 2014.

Allahabad Bank net rises 4.6% to

Allahabad Bank reported a 4.6% increase in net profit to Rs 325 Cr for the quarter ending December 2013, compared to the same period last year. While net interest margin (NIM) remained flat at 2.75%, a 59% jump in ‘other income’ at Rs 542 Cr, due to “recoveries in written-off accounts”, contributed to profit growth. During the quarter, NPAs worth Rs 389 Cr were sold to asset reconstruction companies. According to the bank’s CMD Shubhalakshmi Panse, profits were subdued on account of higher provisioning for NPAs, possible wage revision and mark-to-market losses. Provisions and contingencies rose 29% to Rs 557 Cr. The provision coverage ratio was 42.93%. During the period, gross NPAs rose 256 bps to 5.47% (from 2.91%) of total advances. Net NPAs stood at 4.19%. In absolute terms, gross NPAs jumped 113% on a yearly basis to Rs 7,512 Cr, while net NPAs rose 128% to Rs 5,651 Cr.

SBH Q3

State Bank of Hyderabad posted a 63% drop in net profit at Rs 119 Cr during the third quarter (Sept-Dec) of the current financial year, as against a net of Rs 332 Cr in the corresponding period last financial year. Net interest income (NII) was up just 1.28% to Rs 989 Cr as against Rs 976 Cr last year. Gross non-performing assets (NPAs) moved to Rs 5,589 Cr in December 2013 from Rs 3,186 Cr in March last year. Net NPAs too piled up to Rs 3,013 in December last year, as against Rs 1,449 Cr in March last. Net NPA ratio was higher at 3.21% from 1.61%. Total advances increased by Rs 4,784 Cr to reach Rs 96,955 Cr, while deposits grew by Rs 3,972 Cr at Rs 122,211 Cr. The total business stood at Rs 219,166 Cr as at the end of December 2013. The bank's credit deposit ratio increased to 79.13% in December 2013, up from 76.83% in December 2012.

Oriental Bank launches Aadhar based e-KYC service

Opening an account with Oriental Bank of Commerce (OBC) could now turn out to be a hassle-free experience. This public sector bank has announced the launch of Aadhar-based electronic know your customer (e-KYC) service at its branches, making the account opening exercise less daunting for prospective customers. OBC has become the first public sector bank to launch e-KYC services in coordination with the National Payments Corporation of India and Unique Identification Authority of India (UIDAI), a release issued by the bank said. A prospective customer looking to open an account in OBC will have to just walk into a branch and provide his/her Aadhar number and scan one of his enrolled fingerprint at biometric devices available at the branches. Using the e-KYC services of UIDAI, the bank will verify the identity and address of the customer and thereby reduce the processing time for opening an account.

IBA improves offer by 0.5%

Bipartite settlement held today 27th January 2014 between IBA and UFBU to settle the wage settlement of bankers saw IBA improvings its offer by 0.5% to 10% and the unions rejecting the same and announcing strike on 10th and 11th of February 2014.

UCO Bank Q3

Public sector lender UCO Bank announced a whopping 206.95% y-o-y jump in its net profit to Rs 314.53 Cr for the quarter ended December 31, 2013, from Rs 102.47 Cr in the year-ago period. This was largely on the account of a more than 36% jump in its operating profit. The Kolkata-headquartered bank’s asset quality also improved as the gross as well as net non-performing assets (NPAs) were trimmed. The bank’s operating profit rose to Rs 1,137 Cr for the third quarter this fiscal against Rs 831 Cr in the year-ago period, on the back of a substantial rise in net interest income (NII). NII during the period under review stood at Rs 1,566 Cr against Rs 1,177 Cr in the year-ago period, registering 32.97% y-o-y growth. Retail lending saw a high growth, while corporate lending declined. UCO Bank CMD Arun Kaul attributed the more-than-three-fold rise in net profit to healthy growth in net interest income, rise in Casa ratio and a decrease in cost of funds.

Kharb Allahabad Bank's new ED

Allahabad Bank on Friday said Jal Karan Singh Kharb has joined the state-run lender as an executive director. He started his career with Dena Bank as a probationary officer in 1983 and was the general manager of the bank prior to this appointment. He is an LLB with CAIIB (II).

Central Bank of India's new ED

B K Divakara has taken charge as executive director at Central Bank of India. Prior to taking charge of the new assignment, he was working as general manager with Mangalore-based Corporation Bank, another public sector lender.

Karnataka Bank profit up 33%

Karnataka Bank saw its net profit grow 33.25% to 106.7 Cr in the third quarter of 2013-14. P. Jayarama Bhat, Managing Director, attributed the net profit growth to the 19.2% rise in net interest income and lower slippages compared to the first and second quarters of this fiscal. The NII increased to 271.50 Cr (227.80 Cr). The net NPA reached 2.23% (2.19%) during the period. On the outlook for the fourth quarter of 2013-14, he said: “We should grow better than all these three quarters, and we are looking at a guidance of around 2.75% for NIM (net interest margin) and return on assets (RoA) of 1%. The RoA was 0.96% for Q3 of 2013-14 and 0.71% for the nine-month period. The deposits stood at 38,683 Cr (34,620 Cr), and advances at 27,005 Cr (23,404 Cr). The bank’s effort to increase the retail loan book has started yielding results, he said.

E-donation facility

Corporation Bank has facilitated ‘e-Kanike/e-Donation’ service through its e-payment gateway for the benefit of the devotees of Sree Padmanabha Swami Temple, Thiruvananthapuram. A press statement by the bank said on Tuesday that the devotees across the world could just click in and offer donation or book for different ‘sevas’. S.R. Bansal, Chairman and Managing Director of Corporation Bank, inaugurated the ‘e-Kanike’ facility at the zonal office of the bank in Thiruvananthapuram in the presence of Lt Col S.R. Bhuvanendran Nair, Executive Officer of Sree Padmanabha Swamy Temple. Girdhar Shenoy and Lakshminatha Reddy, general managers of the bank, were present on the occasion.

The Bank is already having E-kanike/E-donation facility for following temples

Dharmasthala Sri Manjunatha Swami Temple  

Udupi Sri Krishna Mutt   

Kollur Sri Mookambika Temple                   

Indian Bank Q3 net down 20% as provisioning rises

Indian Bank has reported a 20% drop in net profit at Rs 264.50 Cr for the quarter ended December 31, 2013, against Rs 330.58 Cr in the corresponding previous-year period. T. M. Bhasin, Chairman and Managing Director of the bank, attributed the drop in net profit to additional provisions of around Rs165 Cr made towards pension fund and gratuity. The bank’s gross non-performing assets (NPA) grew to 3.42% (Rs 3,834.78 Cr) during the quarter, from 3.18% (Rs 3,180.12 Cr) in the same period of last year. The net NPA too rose to 2.25% (Rs 2,483.60 Cr) from 2.17% (Rs 2,141.86 Cr). However, Bhasin said the bank has made a robust recovery of 539 Cr during the quarter. The gross NPA has come down to 3.42%, from 3.76% for the quarter ended September 2013, aided by their sale to asset reconstruction companies. The bank has a provision coverage of 57.99%. During the quarter, non-performing assets aggregating to Rs 389.97 Cr (net of provisions) were sold to asset reconstruction companies for Rs 675.71 Cr. Bhasin said, in addition to the above, the bank has identified 19 large-value accounts (totalling around 300 Cr) to sell to ARCs.

SBI launches Youtube channel

Nation’s largest lender State Bank of India strengthened its social media presence with the launch of its channel on popular video sharing website Youtube and said it will also be launching its handle on the micro-logging site Twitter soon. “The YouTube channel is another platform that will enable us to connect with our customers. SBI will continue to spread its footprint on social media through the launch of platforms like Twitter, shortly,” Chairperson Arundhati Bhattacharya said in a statement. The YouTube channel, which follows a dedicated Facebook page launch in November, will initially have information about the bank’s products and services and its legacy to begin with and will gradually include philanthropic initiatives, it said in a statement. SBI, has over 200 years of history. It has over 15,000 branches and over 43,000 ATMs. The bank statement said the Youtube channel will help it connect with the young and technologically savvy customers.

Banks not to credit "account payee" cheque proceeds to third party

In a circular issued on 22nd January 2014 the RBI has strictly prohibited the banks from crediting  'account payee' cheques to the account of any person other than the payee named therein. RBI reiterated its previous circulars and instructed that banks should strictly collect ‘account payee’ cheques only for their payee constituents.

Banks may, however, consider collecting account payee cheques drawn for an amount not exceeding Rs.50,000/- to the account of their customers who are co-operative credit societies, if the payees of such cheques are the constituents of such co-operative credit societies

Bank notes issued prior to 2005 will be withdrawn from 31st March 2014

The Reserve Bank of India has today (22nd January 2014) advised that after March 31, 2014, it will completely withdraw from circulation all banknotes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication. The Reserve Bank further stated that public can easily identify the notes to be withdrawn as the notes issued before 2005 do not have on them the year of printing on the reverse side.

The Reserve Bank has also clarified that the notes issued before 2005 will continue to be legal tender. This would mean that banks are required to exchange the notes for their customers as well as for non-customers. From July 01, 2014, however, to exchange more than 10 pieces of `500 and `1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes.

The Reserve Bank has appealed to the public not to panic. They are requested to actively co-operate in the withdrawal process.

Major lenders for Kingfisher Airlines

SBI has the largest exposure to Kingfisher at Rs 1,600 Cr, followed by Punjab National Bank and IDBI Bank at Rs 800 Cr each. Bank of India and Bank of Baroda have an exposure of Rs 650 Cr and Rs 550 Cr, respectively.

9000% dividend !!!!!!!!!!!!!!!!!!!

Tamilnad Mercantile Bank (TMB) has declared an interim dividend of 9,000%. That’s actually Rs 900 per share of Rs 10 each, for the fiscal ending March 2014. The board of this Tuticorin-headquartered bank took a decision to this effect at a meeting held on January 18. Bank sources said this would translate into an outgo of Rs 25.6 Cr (unchanged from last year). The 9,000% interim dividend is said to be the highest in the banking industry and this is the second year in a row that the bank has declared such a high dividend. It may be recalled that the bank’s board had approved a dividend of Rs 750 per share for 2008-09 and Rs 1,000 per share the following year, but could not make the payment as the annual general meetings for 2009-10 and 2010-11 were not held due to legal issues. The AGMs for the subsequent years have also not been held till date. As a result of the legal tangles, the bank has been compelled to hold back some major decisions, including the plan to go for an initial public offering. Bank sources said TMB’s shares continue to trade at between Rs 60,000 and Rs 65,000 a share in the informal market.

FII can invest upto 74% in Federal Bank

The Cabinet Committee on Economic Affairs has approved the proposal of Federal Bank for increase in foreign investment up to 74%. This nod is, however, subject to the condition that aggregate foreign institutional investor shareholding will not exceed 49% of the paid-up capital of the bank. The approval will result in a foreign investment of Rs 1,400 Cr into the country, an official release said. As at end December 2013, FIIs had an aggregate holding of 43.34% in the private sector lender.

Kotak Mahindra Bank Q3

Private sector lender Kotak Mahindra Bank disappointed street with its third quarter earnings  on every parameter with the asset quality weakening. Standalone (banking operations only) net profit fell 6 percent year-on-year to Rs 340 crore and net interest income grew nearly 11 percent to Rs 912.7 crore.  Asset quality Gross non-performing assets (NPAs) expanded 4 basis points sequentially (55 basis points year-on-year) to 2.01 percent while net NPAs jumped 14 bps quarter-on-quarter (46 bps Y-o-Y) to 1.1 percent in the quarter gone by. In absolute term, gross NPAs surged 7 percent quarter-on-quarter (45.4 percent year-on-year) to Rs 1,076.18 crore while net NPAs climbed 20 percent Q-o-Q (81 percent Y-o-Y) to Rs 584.52 crore during October-December quarter.

Vacancies at Reserve Bank of India

Reserve Bank of India has called applications for filling various vacancies:

Combined Advertisement for the posts of (i) Research Officers in Gr. ‘B’ for DEPR (ii) Research Officers in Gr. ‘B’ for DSIM (iii) Assistant Manager (Rajbhasha) in Gr. ‘A’ and (iv) Manager (Technical-Civil) in Gr. ‘B’

Last Date for applying is 17.02.2014

IDBI Bank joins the credit card bandwagon

 

 

Nearly nine years after becoming a full-fledged commercial bank, IDBI Bank has decided to issue credit cards to its customers. The Mumbai-headquartered bank intends to issue around five lakh cards in three years — one lakh in the first year and two lakh cards each in the following two years. The public sector bank, which currently has a base of more than 10 million customers, will be issuing EMV (Europay, MasterCard and Visa) chip cards with magnetic stripes. EMV is a global security standard for microprocessor chip card technology. This ensures that the credit card is not only accepted anywhere in the world but is also better protected against fraudulent activities. Since many merchant establishments in the country still have credit card payment infrastructure (terminals) that accept cards with magnetic stripe, the bank has decided to issue EMV cards with magnetic stripe. The category of credit cards that the bank plans to issue are: Platinum, Signature and Corporate. For foraying into the credit cards space, IDBI Bank is planning to engage the services of a third party service (TPS) provider for providing end-to-end solutions for credit card issuance under the outsourced model.

Bank accounts for all in two years — a pipe dream?

The recommendation of the Nachiket Mor committee to provide bank account to every Indian over 18 years of age by January 1, 2016, seems a little stretched. It hinges on banks opening accounts based on KYC authentication done by the UIDAI for providing the 12-digit Aadhaar number to resident Indians. Till date, the UIDAI has provided Aadhaar numbers to about 56 Cr Indians. It plans to provide Aadhaars to three Cr Indians every month and complete the coverage by December 2015. But the UIDAI has, by design or default, left out most people working as migrant labourers and domestic helps as they do not possess valid identification and address proof. So, before banks can ride on the UIDAI-enabled KYC verification, the Authority must seek out such people and issue them Aadhaar numbers. According to the Mor committee report, only 36% adult Indians — 45% in urban centres and 32% in rural areas — have bank accounts. It is, however, not clear how many of these accounts are unique, as banks still lack the unique customer identification code where dual accounts of the same person across banks can be identified.

Virus - Beware

cyber security sleuths have detected a 'black' private information stealing virus in the Indian online banking transactions space and have alerted consumers who swipe debit or credit cards at shopping counters to make payments.

The 'severely' spreading virus of the Trojan family has been detected conducting its clandestine operations at the point of sale counters placed at retail terminals after the RBI made it mandatory in December last year for debit cards holders to punch in their PIN every time they make a purchase.

Bank of India loan against property scheme

Public sector lender Bank of India is giving Loan against Property at 11.75%. The loan can be taken for your personal and business needs. The maximum loan amount is Rs.5 crore and the repayment period is maximum 12 years.

RBI directive to Banks on Loan against gold

In its directive dated 20th January 2014 the RBI has directed banks that ,

As a prudential measure, it has been decided to prescribe a Loan to Value (LTV) Ratio of not exceeding 75 per cent for banks’ lending against Gold jewellery (including bullet repayment loans against pledge of gold jewellery). Therefore, henceforth loans sanctioned by banks should not exceed 75 per cent of the value of gold ornaments and jewellery.

In order to standardize the valuation and make it more transparent to the borrower, it has been decided that gold jewellery accepted as security/collateral will have to be valued at the average of the closing price of 22 carat gold for the preceding 30 days as quoted by the India Bullion and Jewellers Association Ltd. [Formerly known as the Bombay Bullion Association Ltd. (BBA)]. If the gold is of purity less than 22 carats, the bank should translate the collateral into 22 carat and value the exact grams of the collateral. In other words, jewellery of lower purity of gold shall be valued proportionately.

Andhra Bank plans exclusive locker centres

Andhra Bank is planning to set up exclusive locker centres across the state. CVR Rajendran, its CMD, said currently lockers were available at only bank branches, and due to heavy demand and lack of space they were not able to provide lockers to every customer. "In view of this, we are planning to set up exclusive locker centres, which will not only enable the bank to satisfy its customers but also earn additional revenues for it," he said.

ATM Fee

Levying of fee on ATM transactions appears imminent, thanks to the need to provide security at ATMs. As on November last year, there were 1.37 lakh ATMs in the country. Apart from adding to the customer convenience by facilitating withdrawals round the clock, the speedy expansion of ATMs in the last one decade has business implications for banks as well. Currently, bankers say transaction at a branch costs about Rs 40 as against Rs 20 through an ATM. So, these automated teller machines are a win-win for banks and customers.

Austerity measures directed for state run banks

Finance Ministry has directed some austerity measures to state run banks. The ministry thinks as the banks are reeling under high NPAs they should cut the expenditure. The measures include Not to pay (from bank) for the Drinks served during board meetings, Not to pay for the expenses of family members or any other who accompany the directors during the meeting, Avoid to pay for extended stay of board members, Hold meetings as far as possible at head quarters instead of Hotel and Resort etc. These are good measures to save the public money but the government should also make public the austerity measures directed for their offices/various departments which being non-profit centres are expending huge expenses.

Average age of IOB staff will fall further: CMD

 

 

At Indian Overseas Bank, promotions are happening thick and fast. Officers can become managers in less than two years. Apart from a conscious attempt at fast-tracking talent, the rapid expansion of its branch network is helping youngsters grow fast. M. Narendra, CMD of the bank, said the bank has opened more than 1,200 branches and recruited some 11,000 people in the last three years. The bank recruited around 4,500 people in the current fiscal alone. Of them, around 2,600 are officers. The attrition level is minimal, he added. Narendra said the new recruits become managers within one-and-a-half years because of the opportunities thrown up by expansion. “The average age of employees is 46 now. Earlier it was 52-55. Ideally, my endeavour is to take it to 35 years,” he said, adding that the age profile will come down further in the next three years.

HDFC Bank Q3

HDFC Bank, the country’s second largest private bank, posted a 25% jump in net profit in the October-December quarter on the back of robust loan growth, lower provisioning and tighter cost control. This is the second consecutive quarter that the bank’s year-on-year profit growth has been below 30%. The net profit was Rs 2,326 Cr as compared with Rs 1,859 Cr in the year-ago period. Net interest income grew 16% and other income, 11%. The bank recorded an overall loan growth of 23% as on December 31, 2013, boosted by loans to NRIs (nearly $2 billion) and large and mid-size firms (22% growth).

Wage Settlement update 17.01.2014

The employees who were expecting the UFBU to fight with IBA for at least 15% hike and while Business Papers expecting the UFBU to demand 30% increase in gross pay otherwise to go with its Strike plan on 20th and 21st were surprised when the  UFBU deferred its strike with meagre 9.5% hike in wage bill offered by IBA. The IBA has bettered its offer from 5% to 9.5%. But with its approval for 9.5% hike UFBU has nearly cheated 10 lakh  bank employees who were expecting better bargain.

New Managing Director of State Bank of Travancore

Jeevandas Narayan has taken over as Managing Director of State Bank of Travancore. Beginning his career as a probationary officer in State Bank of India, Narayan held several key assignments in the bank. He also had an overseas assignment in Kuwait and with SBI Capital Markets in India. His latest assignment was Chief General Manager, Patna Circle of SBI, which covers the States of Bihar and Jharkhand.

DCB Bank Q3 Result

Private sector lender DCB Bank reported a net profit of Rs 36 Cr in the October-December quarter of FY14, up 35% as compared with Rs 27 Cr in the year-ago quarter. Net interest income (difference between interest earned and expended) rose 31% to Rs 94 Cr (from Rs 72 Cr in Q3 FY13). Non-interest income was up 14% at Rs 33 Cr. The net non-performing assets (NPAs) increased to 0.77% (from 0.73%), while gross NPAs improved to 2.77% (from3.80%). As on December 31, 2013, the bank’s total advances increased by 23% to Rs 7,361 Cr, while total deposits grew 27% to Rs 9,592 Cr. Retail deposits constitute 77% of total deposits. During the quarter net interest margin increased to 3.55% as against 3.38% in Q3 FY13

Yes Bank Q3 Results

 YES Bank has reported a 21% rise in net profit on the back of stable interest income and loan growth in the third quarter of this fiscal. The private sector bank’s profit after tax was Rs 416 Cr, compared with Rs 342 Cr in the corresponding quarter last year. Net interest income increased 14% to Rs 665 Cr (Rs 584 Cr in Q3 FY13), and non-interest income rose 24% to Rs 388 Cr (Rs 313 Cr).  Net interest margin declined to 2.9% due to higher cost of funds, which was a result of the cumulative effect of RBI’s rate hikes. As on December 31, 2013, total advances grew 15%, while deposits increased 21% on the back of growth in current and savings accounts (CASA). Asset or loan quality deteriorated with gross non-performing assets (NPAs) increasing to Rs 196 Cr (0.39% of total advances) from Rs 76 Cr (0.17%). Net NPAs increased to Rs 42 Cr (0.08%) from Rs 16 Cr (0.04%). The bank plans to add 100-150 branches in the next 15 months to its current network of 517 branches as on December end.

 

Corp Micro Plus

 

 

 

Corporation Bank will launch ‘Corp Micro Plus’, a special campaign for micro enterprises from January 17 to March 31. The rate of interest will be at base rate (10.25% currently). There will be no processing charges during the campaign period. S. R. Bansal, Chairman and Managing Director of the bank, inaugurated a fully furnished SME (small and medium enterprise) loan centre at Ahmedabad on Monday, which will cater to the financial requirements of the MSME sector in Ahmedabad, Kadi, Rajkot, Gandhidham and Jamnagar. The bank is planning to open SME loan centres at Pune, Ludhiana and Chennai before February 15.

Invest in Tax Saving Deposit with Banks

With the Tax season on the salaried class is looking for avenues to save tax. The banks have Tax Saving Deposits which help them in saving the tax. The Amount invested in such deposit gets Tax Benefit under Section 80CCC of Income Tax subject to overall limit of Rs.1 lakh. You can opt for Interest payment at periodical interval or opt for cumulative interest to be paid at the time of maturity. Such deposit will have fixed maturity of 5 years. You cannot withdraw it prematurely and you cannot avail any loan by pledging the deposit. The interest earned is taxable. 

Wage Settlement update of 13.01.2014

The Central Labour Commissioner had called the parties IBA (Indian Banks Association) and UFBU (United Forum of Bank Unions) for discussing the status of the wage talks of bank employees. The CLC has advised IBA that fortnightly meeting to be held for early settlement of wage demand. IBA has offered to meet on 17th January 2014. The fate of strike call given by UFBU on 21st and 22nd January 2014 depends of the outcome of that meeting.

Interim Dividend windfall from the Banks

The Public Sector Banks are ready to please the shareholders (the government of india is the majority shareholder) by declaring Interim Dividends. Syndicate bank, Oriental Bank have already declared and many will follow soon..................

Syndicate Bank - Give a missed call to know your bank balance

Syndicate Bank has introduced such a facility for its customers. Shri T.K. Srivastava, ED, said that the bank launched the facility of missed-call to its customers a month ago. After giving a missed call to a dedicated number, the customer will get his/her balance amount in the account as an SMS, he said. The customer will not be charged for the facility. To a query on the reason for starting this service, Srivastava said a majority of the calls to the call centres are made to know the balance amount. Sometimes the call is put on hold for a few minutes. This leads to waste of money and time of the customer. Considering this, the bank came up with the idea of introducing the missed-call service, he said adding that the customers will have to follow the procedures related to SMS banking.

IndusInd Bank Q3 Result

The first banking result of Q3 is out with IndusInd Bank reporting a 30% increase in 3^rd quarter net profit at Rs 347 Cr against Rs 267 Cr in the corresponding quarter of the previous year. Despite an increase in bad loans, profit rose on account of robust growth in loans and fee income. The private sector bank logged 26% growth in net interest income at Rs 730 Cr. Other income grew 35% to Rs 480 Cr (from Rs 356 Cr) on account of growth in fee income (up 30%) and forex income (58%). 

Corporation Bank signs pact with Geojit for integrated account

 

 

 

Corporation Bank has signed an MoU with Geojit BNP Paribas to offer bank’s customers with the facility to seamlessly open 3-in-1 integrated accounts. This comprises a bank account, a demat account and a trading account with Geojit BNP Paribas. The agreement was inked in keeping with the company’s policy of building reach through partnerships with reputed banks. The MoU was signed by B.N. Shenoy, General Manager, Corporation Bank, and Satish Menon, ED of Geojit BNP Paribas. With this agreement, Corporation Bank’s retail clients will now have access to an uninterrupted, hassle-free online trading platform for equities, derivatives, IPOs and mutual funds. According to Shenoy, the signing of the MoU is an important step to have a seamless integration of wealth management products on offer to its over 1.8 Cr customers. He said the coming together of a 108-year-old bank and a reputed stock broking firm such as Geojit BNP Paribas would enable its customers to enjoy money market as well as capital market experience with delight.

Development Credit Bank is DCB Bank Ltd

 The name of "Development Credit Bank Limited" has been changed to "DCB Bank Limited" in the Second Schedule to the Reserve Bank of India Act, 1934 w.e.f. October 24, 2013 vide Notification DBOD.PSBD No. 10131/16.01.132/2013-14 dated November 25, 2013 and published in the Gazette of India (Part III Section 4) dated December 28, 2013.

NRIs as joint holders in Resident Bank Accounts

Reserve Bank of India vide its publication dated 9th January 2014 has liberalised facility to add NRI (Non-Resident Indian) close relative to be joint holder on "either or suvivor basis" in respect of all types of Resident Bank accounts (like SB / FD etc) . The guidlines are as follows:

Reserve Bank has received representations that for operational convenience the Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA Notification No.5 dated May 3, 2000, may be permitted to operate such accounts on "Either or Survivor" basis. Accordingly, on a review, it has been decided that AD banks may include an NRI close relative (relatives as defined in Section 6 of the Companies Act, 1956) in existing / new resident bank accounts as joint holder with the resident account holder on "Either or Survivor" basis subject to the following conditions:

a) Such account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank account shall be applicable.

b) Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative shall not be eligible for credit to this account.

c) The NRI close relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.

d) Where the NRI close relative becomes a joint holder with more than one resident in such account, such NRI close relative should be the close relative of all the resident bank account holders.

 

CERSAI to expand the scope of cover

Banks and lending institutions may soon be required to file with a central registry all information on loans sanctioned for gold jewellery, plant and machinery, corporate brands and logos. A legal working group set up by CERSAI and International Finance Corporation, under the chairmanship of M. R. Umarji, Chief Legal Advisor, Indian Banks’ Association, has recommended that the scope of CERSAI be expanded to cover movable assets, tangibles and intangibles. CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India), a state-owned entity, currently operates a central registry with which information on all equitable mortgages is filed by lending institutions.

Shikar Dhawan to be Brand Ambassador for Canara Bank

Canara Bank has roped in Mr. Shikar Dhawan, Cricketer to be its Brand Ambassador. The tenure of the deal is one or two years and the size of deal is expected to be Rs.1.25 cr.

Invest in SBT Navavarsha Deposit

State Bank of Travancore (SBT) has launched ‘Navavarsha,’ a new deposit scheme offering 9.10% for a period of one year but less than two years. This rate is applicable for all domestic term deposits and NRO under all segments but not for NRE rupee deposit. An additional 0.30% is offered to senior citizens (9.40%) for a minimum deposit of Rs 5,000.

 

 

Court order puts spoke in banks’ loan recovery process in non-metros

Non-performing assets are mounting but our hands are tied, say bankers in non-metropolitan cities, pointing to a recent observation made by the Madurai Bench of the Madras High Court. A Bench observed that secured creditors in metropolitan areas could approach either the Chief Metropolitan Magistrate or District Magistrate for relief under the SARFAESI Act.

 

Before proceeding further on this, here is a look at how the NPAs in banks are handled. Often, banks try to settle NPA cases out of court. If that doesn’t work, the banker issues a possession notice in newspapers that is mandated under Section 13 (4) of the Act, in order to initiate recovery proceedings. Then the banker has to wait for 30 days for the party to come to settle the dues. If there is no response, the bank can initiate legal possession under Section 14 (this Section deals with persons who are eligible to take security possessions). The crux of the observation lies here.

 

‘Banks can keep loan security for other liabilities’

The Kerala High Court has ruled that a bank is entitled to retain security, including gold ornaments deposited for taking a loan, even after clearing the same, if the borrower is yet to repay another loan. Justice V. Chithambaresh ruled that a bank had a general lien over all forms of security, including gold ornaments deposited by the borrower, for the entire outstanding balance amount due to the bank. The court made the ruling while disposing of a writ petition filed by Nakulan of Kollam seeking a directive to Canara Bank to release the gold ornaments pledged as he had already cleared the loan. According to him, when took a personal loan in January 2012 from the bank, no security had been given. The petitioner later took another loan by pledging his gold ornaments. He said that though he repaid the gold loan, the bank was retaining it as security for his personal loan. The bank took the stand that the gold ornaments could be released only after the petitioner cleared his entire liability.

‘Banks can keep loan security for other liabilities’

The Kerala High Court has ruled that a bank is entitled to retain security, including gold ornaments deposited for taking a loan, even after clearing the same, if the borrower is yet to repay another loan. Justice V. Chithambaresh ruled that a bank had a general lien over all forms of security, including gold ornaments deposited by the borrower, for the entire outstanding balance amount due to the bank. The court made the ruling while disposing of a writ petition filed by Nakulan of Kollam seeking a directive to Canara Bank to release the gold ornaments pledged as he had already cleared the loan. According to him, when took a personal loan in January 2012 from the bank, no security had been given. The petitioner later took another loan by pledging his gold ornaments. He said that though he repaid the gold loan, the bank was retaining it as security for his personal loan. The bank took the stand that the gold ornaments could be released only after the petitioner cleared his entire liability.

‘Banks can keep loan security for other liabilities’

The Kerala High Court has ruled that a bank is entitled to retain security, including gold ornaments deposited for taking a loan, even after clearing the same, if the borrower is yet to repay another loan. Justice V. Chithambaresh ruled that a bank had a general lien over all forms of security, including gold ornaments deposited by the borrower, for the entire outstanding balance amount due to the bank. The court made the ruling while disposing of a writ petition filed by Nakulan of Kollam seeking a directive to Canara Bank to release the gold ornaments pledged as he had already cleared the loan. According to him, when took a personal loan in January 2012 from the bank, no security had been given. The petitioner later took another loan by pledging his gold ornaments. He said that though he repaid the gold loan, the bank was retaining it as security for his personal loan. The bank took the stand that the gold ornaments could be released only after the petitioner cleared his entire liability.

‘Banks can keep loan security for other liabilities’

The Kerala High Court has ruled that a bank is entitled to retain security, including gold ornaments deposited for taking a loan, even after clearing the same, if the borrower is yet to repay another loan. Justice V. Chithambaresh ruled that a bank had a general lien over all forms of security, including gold ornaments deposited by the borrower, for the entire outstanding balance amount due to the bank. The court made the ruling while disposing of a writ petition filed by Nakulan of Kollam seeking a directive to Canara Bank to release the gold ornaments pledged as he had already cleared the loan. According to him, when took a personal loan in January 2012 from the bank, no security had been given. The petitioner later took another loan by pledging his gold ornaments. He said that though he repaid the gold loan, the bank was retaining it as security for his personal loan. The bank took the stand that the gold ornaments could be released only after the petitioner cleared his entire liability.

‘Banks can keep loan security for other liabilities’

The Kerala High Court has ruled that a bank is entitled to retain security, including gold ornaments deposited for taking a loan, even after clearing the same, if the borrower is yet to repay another loan. Justice V. Chithambaresh ruled that a bank had a general lien over all forms of security, including gold ornaments deposited by the borrower, for the entire outstanding balance amount due to the bank. The court made the ruling while disposing of a writ petition filed by Nakulan of Kollam seeking a directive to Canara Bank to release the gold ornaments pledged as he had already cleared the loan. According to him, when took a personal loan in January 2012 from the bank, no security had been given. The petitioner later took another loan by pledging his gold ornaments. He said that though he repaid the gold loan, the bank was retaining it as security for his personal loan. The bank took the stand that the gold ornaments could be released only after the petitioner cleared his entire liability.

Open for talks with unions, says IBA chief

With the two-day strike by the United Forum of Bank Unions hardly a fortnight away, the chief executive of the Indian Banks’ Association, Mohan V. Tanksale, has said the bank managements are open for negotiations. “The IBA is open for negotiations with the unions on their demands,” Tanksale told. “We have invited them for discussions for January 29.” He said the IBA, which represents the managements of nationalised, private and foreign banks in the country, had already offered a 5% hike in salary. He also pointed out that the Chief Labour Commissioner had called the bank unions and the IBA for reconciliation on January 13, ahead of the proposed strike by UFBU on January 20-21. UFBU, a collective of ten major unions of bank employees and officers, is planning to go on a nation-wide strike starting from the morning of January 20 to press for its demand for wage revision.

Open for talks with unions, says IBA chief

With the two-day strike by the United Forum of Bank Unions hardly a fortnight away, the chief executive of the Indian Banks’ Association, Mohan V. Tanksale, has said the bank managements are open for negotiations. “The IBA is open for negotiations with the unions on their demands,” Tanksale told. “We have invited them for discussions for January 29.” He said the IBA, which represents the managements of nationalised, private and foreign banks in the country, had already offered a 5% hike in salary. He also pointed out that the Chief Labour Commissioner had called the bank unions and the IBA for reconciliation on January 13, ahead of the proposed strike by UFBU on January 20-21. UFBU, a collective of ten major unions of bank employees and officers, is planning to go on a nation-wide strike starting from the morning of January 20 to press for its demand for wage revision.

SBI offers 2-year sabbatical to women staff

 

 

 

 

Women employees of SBI can now take two-year sabbatical leave from work for purposes like children’s education. SBI is likely to extend this facility to single male parents as well. “We have brought in a two-year sabbatical for our women staff in case they want to take it for any purposes like education of their children, taking care of the elderly parents/in-laws,” Arundhati Bhattacharya, the first woman to head SBI, told.

DCB bank offers 10.97% p.a. on fixed deposits !!!!!!!!!!!!!!!!

Don't be misled by the advertisement the bank is giving in the newspaper and its website. There is small catch * T & C apply. Now a days banks are also offering misleading advertisements to get the attention of customers. See the above advertisement bank is actually paying 9.60% p.a. for the fixed deposits of less than one crore for the period 24 months to 36 months. Then wherecome 10.97% ??. The bank is using 'effective yield'  as the tool. The effective yield works out to be 10.97% for the above period. But the bank's should not use such misleading ads for attracting customers.

The DCB Bank is offering 9.6% for deposits of less than one crore for the period 24 months to 36 months and the senior citizens will get 0.5% above this rate for the same tenure.

IBA offer of 5% rise in payslip bill inadequate: Unions

While bank managements, under the aegis of the Indian Banks Association, are ready to bear the burden of a 5% increase in the payslip component of the total wage bill, trade unions in the banking sector say the increase in not adequate if one takes into account the rising inflation. Mohan V. Tanksale, Chief Executive, IBA, said the offer of 5% increase in the pay slip bill was not acceptable to the unions.

ATM usage charges may rise

Banks are likely to start charging customers for transacting more than five times a month at any bank ATM, including their own bank. Banks have mooted the charge on ATM transactions to pay for the increased security costs at ATMs, put in place by many State Governments, following the grievous attack on a woman inside an ATM kiosk in Bangalore last November. Currently, there is no cap on the number of transactions that a customer can undertake at his own banks ATM. However, the number of free transactions at other banks ATMs has been capped at five a month. Banks may also down the shutters of some ATMs at night, especially at locations where footfalls are low. Banks have requested the RBI to allow them to increase the ATM interchange fees (the fees paid by the card-issuing bank to the acquiring bank) to Rs 18 from Rs 15 a transaction now. Further, they want to pass on the costs arising from the interchange fee and switching fee to customers from the sixth transaction onwards.

Bank Strike

Bank employees under UFBU (United Forum of Bank Unions) will be observing 2 days strike on 20th and 21st January 2014 for speedy settlement of their long pending wage settlement issue and also for stopping banking sector reforms. The wage settlement issue is pending for above one year now and there is no headway in the issue with IBA the negotiating body for the government offering meagre 5% increase in wage load which means 1% wage increase for the each 5 year duration for which the settlement runs. The UFBU also has not shown any inclination for speedy settlement as its added banking sector reforms as one of issue which should not have been mixed with wage settlement issue. The government is in no hurry to settle the issue as its busy in next poll process.

RBI releases Bhaskar panel report draft

 

 

 

 

RBI released a draft paper of the committee on financial benchmarks. RBI had announced constitution of a committee under Vijaya Bhaskar in June to study issues relating to financial benchmarks and submit the report by December 31. While the existing system was found generally satisfactory, the report recommends several measures to strengthen the benchmark quality, setting methodology and governance framework. "In line with the international move towards greater regulatory oversight of the benchmark setting process, the report reviews the existing regulatory powers of RBI over the financial benchmarks and recommends suitable amendments of the RBI Act," the banking regulator said in a press release on its website. RBI has invited public comments on the draft report.

 

 

Tax implications of various Bank Deposit products

The tax season is on. You must have invested in various bank deposits. What is the tax implicaitons of various bank deposit products ?

In Banks you will normally have Savings Bank Account, Current Account, Sweep Account, Recurring Account, Fixed Deposits, Cumulative Deposits. Let us know the tax implications one by one.

Savings Bank Account: Banks do not deduct any tax on the interest earned by you on your Savings Bank account balance. But the interest earned is Taxable. Its your responsibility to add it to your total income and pay tax accordingly. But the good thing is that if you are individual or HUF you can get tax exemption of Rs.10000 under Section 80 TTA on your interest earned on SB deposits.

Cabinet nod for conversion of pref shares into equity in 3 banks

The Union Cabinet has given its nod for conversion of perpetual non-cumulative preference shares held by the Government in three public sector banks — Indian Bank, UCO Bank and Vijaya Bank — into equity shares. PNCPS amounting to Rs 400 Cr, Rs 1,823 Cr and Rs 1,200 Cr in Indian Bank, UCO Bank and Vijaya Bank, respectively, will be converted into equity in favour of Central Government, Finance Minister P. Chidambaram told. This move will increase the Centre’s holding in Indian Bank from 80% to 82.22%, in UCO Bank from 69.26% to 77.25% and in Vijaya Bank from 55.02% to 71.85%. The conversion, which will be done this fiscal, is however subject to SEBI as well as shareholder approvals. Chidambaram noted that conversion of PNCPS will bolster the tier-I capital of these three banks and make available more funds for meeting the credit needs of the productive sectors of the economy.

ATM transactions to cost more this year

 

You might have to pay more for your transactions at ATMs in the new year. Bankers have proposed a reduction in the number of free ATM transaction a month to five — irrespective of whether you are transacting at ATMs of your own bank or those of other lenders. At present, there is no cap on free transactions at own-bank ATMs, while customers can use other banks’ machines up to five times a month without any extra cost. And, there’s more. Bankers have also proposed to a working group on ATM security that the rate for each ATM transaction (interchange fee or charge) be raised from Rs 15 to Rs 18. Interchange fee implies a charge paid by a bank to another for acceptance of card-based transactions. Usually, it’s a fee that a merchant’s bank (the ‘acquiring bank’) pays a customer’s bank (the ‘issuing bank’).

New CMD for Vijaya Bank

 

V. Kannan has taken charge as Chairman and Managing Director (CMD) of Vijaya Bank. He took charge from H.S. Upendra Kamath, who has demitted the office of CMD on attaining superannuation on December 31, 2013.

New CMD for Vijaya Bank

 

V. Kannan has taken charge as Chairman and Managing Director (CMD) of Vijaya Bank. He took charge from H.S. Upendra Kamath, who has demitted the office of CMD on attaining superannuation on December 31, 2013.

Email instructions not to be followed

 

While encouraging customers to make use of Net banking facility, banks have started to voice their anxiety over rising Internet-related frauds. For instance, State Bank of India recently issued a circular asking its branches “not to carry out any financial transactions requested by NRI customers through e-mail, even if the request is made by a letter scanned as an attachment.” The branches have since stopped entertaining requests from NRI customers. “Not only are the customers at a loss, but the bank is also losing business. The circular follows instances of fraud brought to the notice of the bank based on instructions received from registered email IDs of NRI customers. “There have been cases of accountholders disputing the transactions subsequently.”

Syndicate Bank emblem colour

 

 

Syndicate Bank has changed the colour scheme of its emblem from new year . The new emblem is as above

RBI's clarification on Scribbling on Banknotes

In the wake of rumours circulating in the market that from January 1, 2014, banks will not accept banknotes with anything written on them, the Reserve Bank has urged members of public not to fall prey to such rumours and to use their banknotes without any fear. The Reserve Bank of India has clarified it has NOT issued any such instructions.

It has further clarified that it had issued instructions on August 14, 2013 only to banks advising them to instruct their staff not to scribble or write on the body of the banknotes since it was observed that the bank officials themselves were in the habit of writing on banknotes which went against the Reserve Bank’s Clean Note Policy.

Reiterating that writing or scribbling on banknotes works against its Clean Note Policy, the Reserve Bank has also sought co-operation from all members of public, institutions and others in keeping the banknotes clean by not writing/scribbling anything on them.

Happy New Year 2014

Wishing all my readers  a very happy new year