Wage Settlement - AIBOC press release

(taken from 'all banking solution')

REF: AIBOC/2014/01 DATE: 05/02/2014

PRESS RELEASE – SALARY REVISION

The revision of salary of around 10 lac bank officers and employees is due from 1st November 2012 for which a comprehensive Charter of Demands was submitted by the Officers’ Organisations to Indian Banks’ Association (IBA) on 30th October 2012. In the last 15 months, 8 rounds of discussions have taken place between IBA and Officers’ Organisations and date of effect from 01.11.2012 and DA Merger points at 440 points were the only two issues settled.

Apart from this, IBA has made an initial offer of 5% salary increase on “pay slip component” which was enhanced to 9.5% after the Unions gave a strike notice and Central Labour Commissioner intervened to avert the strike. In the next round of discussion held on 27th of January 2014, IBA improved the offer by 0.50% i.e. from 9.5% to 10% which was considered as insultingly inadequate and less than what was offered in the last Bipartite Settlement and hence rejected by the Employees’ and Officers’ Organisations.

Bank Strike Stands

The Bank Employees will observe strike on 10th and 11th February 2014 as the concilation meeting held by CLC (Chief Labour Commissioner) and IBA (Indian Bank's Association) , UFBU (United Forum of Bank Unions) held today failed as the IBA did not increase the offer.

Bulk deposit rates shoot up as banks scramble for cash

The liquidity situation may be comfortable, but banks have started building up their balance sheets ahead of the financial year-end to meet yearly targets. This has resulted in a spike in bulk deposit rates as banks are offering as much as 9.4-9.6% as compared to the card rate of 9% for one-year deposits. Bulk deposits are typically Rs 10 Cr and above. Canara Bank, for example, has sealed a Rs 500-Cr bulk deposit deal of one-year maturity with an Andhra Pradesh-based PSU for 9.61%. Similarly, Bank of Baroda offered 9.41% for a Rs 200-Cr deal. The card rate for deposits of similar maturity is 9%. Spectrum outflow and advance tax have left banks worried about liquidity ahead of the financial year-end. Banks are offering 9.4-9.6% as compared to the card rate of 9% for one-year deposits.

Bank Strike on 10th and 11th

All Public Sector Bank employees will observe 2 days strike on 10th and 11th February 2014 as the Wage Settlement which is due from November 2012 has not been settled till now. The IBA has offered 10% hike which is duly rejected by the unions represented by UFBU.

HDFC Bank introduces Missed Call Banking

Private Sector Bank HDFC Bank has also started "missed call banking". The customer who intends to use this service has to register his mobile with the bank. Once his mobile number is linked to his account a customer can call any of the Toll Free number that the bank provides to get the services.

Karnataka court refuses to get in the way of banks for recovery of Mallya Debt

The Karnataka High Court refused to interfere with the proceedings initiated by a consortium of banks against industrialist Vijay Mallya and two of his companies — UB (Holdings) Ltd, Kingfisher Airlines Ltd — before the Debt Recovery Tribunal (DRT) in Bangalore to recover a due of Rs.6,200 Cr. Justice AS Bopanna passed the order asking UBHL, Kingfisher and Mallya to approach the Debt Recovery Appellate Tribunal (DRAT) at Chennai against the November 12, 2013, order of the DRT, which refused to reject the application filed by the banks seeking grant of recovery certificate. The banks had sought recovery certificate from the DRT under the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. In his order, Justice Bopanna said it was not established that there is an inherent lack of jurisdiction to DRT or there is a statutory bar or any violation of statute… Also, proceedings or the action (before DRT) cannot be termed as arbitrary, unreasonable and unfair at this stage requiring the High Court’s interference.

SBBJ Q3

State Bank of Bikaner & Jaipur (SBBJ) has reported a 41% decline in net profit for the quarter ended December 31, 2013, at Rs.152 Cr (Rs.215 Cr). Total income for the quarter under review increased 10% to Rs.2,289 Cr (Rs.2,082 Cr). The bottom-line was weighed down by additional provisioning for bad loans, staff benefits and tax expense, B. Sriram, Managing Director, SBBJ, said. He expressed hope that the banks bottom-line this fiscal will come close to the Rs.730 Cr achieved last year. For the nine months ended December 31, 2013, SBBJ reported a net profit of Rs.494 Cr, lower than net profit of Rs.552 Cr in same period in the previous year.

New CMD of Punjab and Sind Bank an IAS officer

The Centre has appointed Jatinder Bir Singh, a 1983-batch IAS officer of Assam-Meghalaya cadre, as Chairman and Managing Director of Punjab & Sind Bank (PSB). He is expected to assume charge as CMD on Monday. Prior to this, Singh was an Additional Secretary in the Ministry of Water Resources. At PSB, Jatinder Bir Singh has come in the place of DP Singh who had superannuated recently.

Govt comes up with Rs 1,400-Cr interest subvention on loans taken by women SHGs

The government on Monday reached out to rural women by rolling out a R1,400- Cr interest subvention on loans taken by Self Help Groups working for their empowerment. Interest subvention for the loans taken by women Self Help Groups (SHGs) is a significant initiative under the Centre’s ambitious programme National Rural Livelihoods Mission (NRLM). Rural development minister Jairam Ramesh said that it is applicable for loans availed by women SHGs from April 1, 2013. According to the minister, from Monday onwards, all banks/will lend to women SHGs at upfront 7% interest (for loans upto R3 lakhs) in 150 select backward districts, most of which are affected by Naxal menace. These SHGs will get a further 3% subvention on prompt repayment, thus the effective charge on all such loans will be 4% only.

IBA issues advisory to banks on use of Win XP

The Indian Banks Association (IBA) has issued an advisory to banks to ensure business continuity after Microsoft ends support for its popular Windows XP operating system on April 8. IBA, in its advisory, drew the attention of the banks to a study by Microsoft, which estimates that over 34,000 branches of public sector banks would become vulnerable following the US-based firm’s decision to stop support to Windows XP. The fiscal impact of this could be as much as a loss of business opportunity worth Rs 1,100 Cr in a day and a loss of income worth Rs 330 Cr over a period of three days (assuming that a major incident may take three days for the systems to come up to normal functioning), the study had said.

Kotak Mahindra Bank hikes interest on Deposit

 

The private sector bank has revised interest rates on its rupee term deposits of less than Rs. 1 Cr for select maturity buckets by up to 25 bps, with effect from February 6, the bank said in a statement. The bank now offers 9.25% interest (9% earlier) for the 390-day deposit and 9% (8.75%) for deposits in the 181-269 day tenor. Kotak Bank is the first lender to hike its deposit rates after the central bank increased the repo rate by 25 bps to 8% in its third quarter Monetary Policy Review.

Vijaya Bank Q3

Vijaya Bank reported a 91.1% drop in net profit at Rs 11.39 Cr for the October- December quarter due to higher provisioning for bad loans and rise in operating expenses. The Bangalore-based public sector lender had posted a net profit of Rs 126.73 Cr for the same quarter of last fiscal. The bank’s total income in the third quarter ended December 31, 2013, increased to Rs 2,874.60 Cr, from Rs 2,357.05 Cr in the year-ago period, the bank said. Provisions other than tax and contingencies during the quarter increased to Rs 159.41 Cr against Rs 102.72 Cr in the same period of last fiscal. At the same time, operating expense of the bank rose to Rs 456.39 Cr during the quarter compared to Rs 319.18 Cr. As of December 31, the bank’s portfolio quality improved, with gross NPAs rising to 2.67% of gross advances against 2.91% a year ago. Its net NPAs during the third quarter declined to 1.57%, from 1.71% in the period a year earlier. During the three quarters (April-December) of 2013-14, the bank’s net profit declined by 22% to Rs 280.07 Cr against Rs 361.46 Cr in same period of 2012-13. Its total income rose to Rs 8,387.03 Cr for the nine months, from Rs 6,978.68 Cr in the year-ago period.

Govt may infuse capital of Rs.175 cr

 

Corporation Bank is planning to raise Rs.175 Cr from the government to meet the lender’s capital requirement. S R Bansal, chairman and managing director, Corporation Bank, said that during the fiscal, the government had infused Rs.450 Cr and will pump in another Rs.175 Cr by end of the fiscal. Speaking at the launch of bank’s SME loan centre in Chennai, Bansal said with the proposed infusion, the government’s stake will increase to 63% from the current 58%. Bansal said the bank would focus on retail, SME and agriculture. Currently, the retail portfolio accounts for 15% of the total credit portfolio and the plan was to increase it to 25% in the next 12 months. To boost lending to these sectors, specialized centres for each of the businesses are being set up across the country.

Corporation Bank CMD speaks

 

SR Bansal, CMD of Corporation Bank, is a banking industry veteran with more than three decades of experience. Known in the industry circles for his result-oriented approach and quick decision-making, Bansal assumed charge of Mangalore-based Corporation Bank in October 2013. In an interview he said that he is now focused on five areas for growth. According to him, the overall performance of the financial sector in general and the banking sector in particular has been impacted. “The credit and deposit growth in the current fiscal has been moderate so far, but we expect some improvement in the last quarter, which is the busy season” he said. In this environment, retail, agriculture and SME (small and medium enterprise) sectors offer good potential and we have made efforts to improve our business in these segments. I have advised our field staff to focus on five important areas, he added. Mobilising CASA deposits; quality credit growth with focus on agriculture, retail and MSME; expansion of branch and ATM network and alternative delivery channels; customer acquisition, especially Next-Gen customers; and improvement in asset quality, according to him are the major focus areas for the Bank.

Union Bank of India Q3

Union Bank of India posted a 16% growth in the third quarter net profit helped by treasury gains and higher income from its retail loan portfolio. The Mumbai-headquartered public sector lender posted a net profit of 349 Cr in the three months period ended December 31, 2013 against 302 Cr, a year ago. The bank said the growth was due to its focus on the retail, agriculture and micro, small and medium enterprises businesses. Total income rose 18% to 8,230 Cr. Total deposits grew 19% to 2,85,125 Cr, while total advances increased 20% to 2,27,745 Cr. Revenue from treasury operations increased to 2,173 Cr against 1,729 Cr, a year ago. The bank’s gross non-performing loans (NPA) increased to 8,776 Cr (6,384 Cr, a year ago). As a percentage of total loans, gross NPA’s grew to 3.85% from 3.36%, a year ago.

Punjab National Bank Q3

 

Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.

Punjab National Bank Q3

 

Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.

Punjab National Bank Q3

 

Despite its net profit taking a hit, Punjab National Bank has announced a 100% dividend, meaning every shareholder will get 10 for each share he holds. On the financial front, higher provisioning saw the bank’s net profit decline by over 42% for the three-month period that ended on December 31, 2013. However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings. The bank recorded a net profit of 755 Cr during the three-month period ended December 2013 as against 1,306 Cr in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.” Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to 1,500 Cr from over 3,000 Cr during previous quarters. At the same time, the net interest margin went up to 3.57% during the quarter from 3.47% in the corresponding period of 2012-13.