Bank Stock News

Bank of Rajasthan said its shareholders have approved a bonus issue, wherein 2.69 crore shares of Rs 10 each will be allotted in a ratio of 1:4. Pursuant to the recommendation of the board of directors, shareholders have accorded their approval to the bonus issue at the extra ordinary general meeting (EGM) on Monday.

haiTechnorati Profile

New Deposit

Bank of Baroda has increased its interest rate to 9.5 % on Fixed Deposits. This is a unique scheme which offers higher interest rates to customer for a short period of one year. The major attraction is that the scheme provides for investing for any amount as low as Rs.1000 and there is no lock-in period. The scheme takes effect from 18.05.07.Senior Citizens will get an additional 0.5% on fixed deposits under the scheme i.e.10 % p.a. Dena Bank launched a new Deposit scheme " Dena Diamond Deposit Scheme" to mark its 70th Foundation Day on 26th May 2007. The new scheme offers the depositors an opportunity to earn higher interest rate of 9.60 percent for deposits of maturity period of 700 days. The senior citizens will get 10.10 percent interest in this scheme. The minimum amount of deposit is Rs.10,000/-.The scheme also has a special feature of part withdrawal in multiples of Rs.5000/-.

News

State Bank of Travancore (SBT) has launched a new loan scheme for pensioners from military and related services. The scheme titled `Jai Jawan pension loan', will cover pensioners who retired at an early age from armed forces, paramilitary forces, coast guards, Rashtriya Rifles, CRPF, BSF, ITBP, etc. The scheme provides for loan of up to Rs 2 lakh or 48 times the monthly pension, whichever is lower Utkal university, Bhubaneshwar, is tying up with the country's largest private sector bank ICICI to impart training to students in banking, insurance and finance related aspects. The two entities will shortly sign a Memorandum of Understanding (MoU) to introduce a one-year diploma course on banking, insurance and finance. The course would be sponsored by ICICI. With ICICI planning to expand its operations in Bhubaneswar to a large extent the need for expert hands might have prompted the bank to sponsor such a course. Initially the course would admit around 25-30 students. Students passing out from the course would be recruited by the ICICI bank. The financial market will soon see the country’s biggest junk loan deal. State-owned Indian Bank has decided to sell all its bad loans at one shot. The Chennai-headquaterted bank has put on block its entire distress loan portfolio amounting to Rs 1,500 crore. Indian Bank chairman and managing director KC Chakrabarty said, “We have received bids on the auction of Rs 1,500-crore bad loans. The bank will shut the asset recovery cell which would free around 250 people. These officials would then be deployed for marketing other products.” Sources said that the bank had received five bids, including three from asset reconstruction companies. These are ICICI-promoted Arcil, UTI-promoted Asrec and the privately-held Pegasus Assets Reconstruction. Till now, the single-biggest bad loan transaction was from ICICI, when the country’s second-largest bank sold over Rs 1,400 crore to British bank Standard Chartered. Bidders said Indian Bank has indicated that it would prefer not to receive the entire income upfront from the bad loans selloff. Instead, the bank would like to receive the income over a couple of years In a rising interest scenario, these banks which engaged in a neck-to-neck battle for gaining more deposits finally landed up managing close to 29% of the software services giant’s monies tied up as bank deposits. Infosys redeemed its holding of Rs 684 crore in liquid funds in FY07, while deposit accounts rose to Rs 4,827 crore in the same year as against Rs 2,735 crore in FY06 - showing a 76.48% year-on-year rise. Infosys expanded the relationship with banks like Bank of India (Rs 504 crore), Bank of Baroda (Rs 503 crore), Punjab National Bank (Rs 179 crore), SBI (Rs 151 crore) and Bank of Maharashtra (Rs 51 crore), which gained as a result. In FY06, Infosys had placed funds with two PSU banks - Corporation and Canara Bank. While in the case of Corporation Bank, the quantum of deposits rose to Rs 302 crore in FY07 from Rs 126 crore in FY06, there was a marginal dip in the case of Canara Bank to Rs 503 crore in FY07 against Rs 504 crore in FY06.

Sunday Special

National Electronic Funds Transfer System (NEFT) This is a nationwide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch. But not all the bank branches are its members. As on January 31, 2007, 18500 branches of 53 banks are participating. The system uses the concept of centralized accounting system. Each participating bank has to designate one branch at Mumbai to handle NEFT transaction. All the transactions originated by that bank has to be routed through and all the transactions to be responded by that bank has to be routed through that designated branch. The funds are available to the beneficiary on the same day or the next day depending on the time of settlement Process Flow: • The Remitter fills in the NEFT application form giving the particulars of the beneficiary (Bank Branch, Beneficiary’s name, Account type and Account number) and authorizes the branch to remit the specified amount to the beneficiary by raising a debit to the remitter’s account. • The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its service centre of NEFT. • The service centre forwards the same to the local RBI (National Clearing Cell, Mumbai) to be included for the next available settlement. • The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of the net debit or credit for passing onto the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to the banks. • The receiving banks process the remittance message received from RBI and affect the credit to the beneficiaries account. As of now, NEFT is settled in six batches at 0930,1030,1200,1300,1500 and 1600 hours on weekdays and 0930,1030 and 1200 on Saturdays. At present there is no Value Limit for individual transactions and RBI has waived the processing charges till March 31, 2008. Levy of service charges by banks is left to the discretion of the respective banks. Another important aspect NEFT uses is IFSC codes ( Indian Financial System Code) which is an alpha numeric code designed to uniquely identify the bank-branches in India. This is 11 digit codes with first 4 characters representing the banks code, the next character reserved as control character (presently 0 appears in the fifth position) and the remaining 6 characters to identify the branch. The IFSC codes will normally printed on Cheque Book or Pass Book or the customer can call his bank branch and get the same. Sending remittances abroad using NEFT is not possible but one can send/receive funds from/to NRI accounts subject to applicability of provisions of FEMA. In case of non-credit or delayed credit you can contact your branch or if the issue is not resolved satisfactorily, the Customer Service Department of RBI may be contacted on cgmcsd@rbi.org.in or write to The Chief General Manager, Reserve Bank of India, Customer Service Department, 1st Floor, Amar Building, Fort, Mumbai-400001 For any other queries you can visit RBI web site www.rbi.org.in

Reslut

IndusInd Bank has reported a net profit of Rs 21.4 crore in the fourth quarter of 2006-07, against a loss of Rs 62.4 crore in the previous year on lower provisioning. The Managing Director, Mr Bhaskar Ghose, said all the key ratios of the bank were looking better. Net interest margin for the quarter fell to 1.63 per cent, against 1.82 per cent in the corresponding quarter of the previous year. Mr Ghose said that the bank had shifted its focus from wholesale banking to a balanced combination of corporate loans, vehicle finance, and other retail advances. Vehicular finance contributes a significant chunk of the bank's portfolio at 55 per cent. In 2006-07, deposits grew by 18 per cent to Rs 17,645 crore from Rs 15,006 crore. Advances were up 19 per cent to Rs 11,084 crore against Rs 9311 crore in the previous year. Cost of deposits moved up to 6.73 per cent (5.87 per cent) while the yield on advances was slightly higher at 9.76 per cent (9.44 per cent). Net Non-Performing Assets ratio increased to 2.47 per cent (2.09 per cent).

Awards

Private sector Federal Bank has been adjudged the 'most efficient bank' in the large banks category by the 'Business Today-KPMG survey', 2006-07. The survey, which covered 78 scheduled commercial banks in the country, has analysed the growth, size and strength of the financial institutions under the category. The bank recorded an all time high net-profit of Rs 292.73 crore for March 2007. The total business stood at over Rs 36,480 crore and the return on assets recorded 1.3 per cent. The non-performing assets of the bank recorded 0.44 per cent, one of the lowest among the banks in India.

News

Bank of Baroda intends to open ten overseas branches this year, the Chairman and Managing Director, Dr A.K. Khandelwal, told. These will be at Port of Spain (Trinidad & Tobago), Accra (Ghana), Bahrain, second branch in Johannesburg (South Africa), ninth in UK, second in Tanzania, second in Botswania, eighth in Kenya, Canada and one representative office in Australia. In addition, a joint venture company, along with Punjab National Bank and Andhra Bank would be set up in Malaysia, he said. Overseas branches contributed 20 per cent to the bank's total business of Rs 2.09 lakh crore last year. A third of its profit of Rs 1,026 crore came from overseas operations.

Bank Stock News

Private sector lender City Union Bank is planning to raise over Rs125 crore by allotting equity stakes to a clutch of domestic and foreign investors, including Larsen & Toubro, LIC, and the Netherlands-based Nederlandse Financierings. Around 15 lakh shares are proposed to be allotted to state-run LIC and 3 lakh shares to L&T on a preferential basis at Rs169.15 per share raising Rs30.44 crore

Result

Centurion Bank of Punjab recorded a 7.6 per cent rise in its net profit to Rs 28.01 crore in the fourth quarter ended March 31, 2007 against Rs 26.04 crore in the corresponding quarter previous year due to a strong growth in advances. The bank experienced a 72-per cent growth in advances to Rs 11,221 crore, and 58 per cent rise in deposits to Rs 14,863 crore during the quarter. The net interest margin stood at 4.38 per cent (5.07 per cent) in the quarter due to rising interest rates. During 2006-07, the net profit was up by 38 per cent to Rs 121.38 crore against Rs 87.8 crore in the previous year. Catholic Syrian Bank has posted a 210-per cent increase in the net profit to Rs 19.07 crore for 2006-07, compared with Rs 6.14 crore the previous year. The board of directors has recommended a dividend of 15 per cent. Net NPAs were reduced to 1.98 per cent (2.78 per cent). The bank also recorded capital adequacy ratio of 9.58 per cent against the RBI-stipulated norm of nine per cent. Total deposits grew to Rs 4,748.60 crore (Rs 4,288.85 crore), while advances rose to Rs 3,012.64 crore (Rs 2,694.87 crore).

News

Punjab National Bank has received the licence for opening a full-fledged branch in Hong Kong, said the Chairman and Managing Director, Mr S.C. Gupta. "We will be opening our Hong Kong branch before July 31," he added. PNB had recently operationalised its London subsidiary. The country's third largest public sector bank by business also plans to open an offshore banking unit in Singapore this fiscal. PNB has placed a bid with the Pension Fund Regulatory and Devclopment Authority (PFRDA) for managing the pension fund accruals of the Central Government employees under the New Pension System (NPS) RBI nod for delivering cash at doorstep - Now, you do not even have to drive to your nearest ATM to withdraw cash. Instead, you can call up your bank branch or make an online request and have the cash delivered right at your doorstep. Taking the doorstep banking service one step forward, the Reserve Bank of India has allowed banks to deliver cash at the doorstep of individual customers. The RBI decision follows the suggestions made by the Indian Banks' Association to extend this facility to individual customers. Earlier this facility was restricted to corporate customers Union Bank in overseas pitch - After opening representative office in Shanghai recently, the Mumbai-based Union Bank of India will set up three more overseas offices at Beijing and Guangdong in China and the UAE. It will also set up branches in Hong Kong and Doha within a few months. In addition, the bank is also looking forward to set up its branch in Singapore. The bank has received Reserve Bank of India (RBI) approval for opening branches in Hong Kong and Doha and also for its representative offices at Beijing, Guangdong and UAE, whereas RBI approval for the Singapore branch is still awaited. Tamilnad Mercantile Bank (TMB) has entered into an agreement with the Abu Dhabi-based UAE Exchange Centre LLC to offer money transfer and speed remittance services. Under this tie-up, non-resident Indians (NRIs) in the Gulf region can remit funds to India by sending rupee drafts drawn on the UAE Exchange Centre to any of the 182 branches of the bank. The speed remittance arrangement will provide web-enabled money transfer services to NRIs. The UAE Exchange Centre handled 4.51 million remittance transactions amounting to around Rs 16,000 crore during 2006-07. Foreign cos can open escrow accounts -- Reserve Bank allowed foreign companies to open escrow or special accounts in authorised banks for buying shares in Indian firms - a move that gives them more flexibility in acquiring domestic companies. In a notification, RBI said authorised banks may open escrow or special accounts on behalf of non-residents for the purpose of open offers, delisting offers and exit offers subject to Sebi regulations. The notification follows the central bank's announcement in the annual credit policy for 2007-08. As per the notification, these banks will not require prior approval of the Reserve Bank to open such accounts. Such accounts could be operated by persons appointed by the firms.

Bank Stock News

The board of directors of Punjab National Bank has declared a final dividend of 60 per cent, taking the overall dividend for 2006-07 to 100 per cent against 90 per cent in 2005-06 The board of directors of Karur Vysya Bank have proposed a dividend of 100 per cent for the fourth year in succession.

Result

Karur Vysya Bank has recorded an 18 per cent increase in net profit at Rs.160 crore for 2006-07 against Rs.135.35 crore in the previous year. The board of directors also proposed a dividend of 100 per cent for the fourth year in succession. The bank is targeting to reach deposits of Rs.12,000 crore and advances of Rs.9,020 crore by 2007-08. Currently KVB has deposits of Rs.9,340.29 crore while advances stood at Rs.7,040.48 crore A higher provisioning for standard assets and retirement benefits of employees besides depreciation in certain government securities portfolio has impacted Punjab National Bank's (PNB) fourth-quarter bottomline performance in fiscal 2006-07. However, net profit for the financial year 2006-07 increased 7 per cent to Rs 1,540 crore against Rs 1,439 crore in the previous year. The board of directors has declared a final dividend of 60 per cent, taking the overall dividend for 2006-07 to 100 per cent against 90 per cent in 2005-06. As a measure of prudence, PNB has also adopted the ICAI's revised AS-15 on retirement benefits, leading to additional provisioning of about Rs 200 crore. He added that interest rates are likely to soften in the next two-three months as demand for credit would be much lower in this period, which is usually referred to as slack season. Meanwhile, Mr Gupta said that PNB would raise tier-II capital of Rs 500 crore before June 30.

Bank Stock News

Central Bank of India has filed the draft red herring prospectus with SEBI for its proposed public issue. The bank is offering through the issue 80,000,000 equity shares of Rs 10 each through the book building route. This includes 4,000,000 shares reserved for the eligible employees. Central Bank said that it needed funds to augment its capital base to meet the future capital requirements arising out of the implementation of the Basel II standards and the growth in its assets, essentially its loan and investment portfolio, due to the growth of the country's economy and for other general corporate purposes

News

Union Bank of India has launched biometric cards to facilitate `door step banking' in rural areas. The bank has tied up with Financial Information Network and Operations Ltd (FINO) and Cashpor Micro Credit to launch a pilot project in Chahania Block in Chandauli district, Uttar Pradesh. So far, 1,000 smart cards have been issued in four villages and the aim is to issue 5,000 such cards initially. FINO will provide technical support, which will enable the bank to leverage on technology to serve its customers. Union Bank of India also has financial stake in FINO. A biometric card is embedded with an electronic chip and is the same size as a credit or debit card. It uses the customer's fingerprint as a bio-password card and also serves as an e-passbook to store data of all transactions. Financial services provider Financial Information Network and Operations Ltd (FINO) has announced its partnership with Indian Bank to offer smart card solutions to its rural customers. FINO will be providing the public sector bank 'no frill accounts' (zero balance saving accounts) for carrying out transactions on FINO Smart-Cards and POT Devices.

Statistics

Bank Rate 6% wef 29.04.2003 Cash Reserve Ratio (CRR) 6.5% wef 28.04.2007 Statutory Liquidity Ratio (SLR) 25% wef 22.10.1997

New Product

Karnataka Bank Ltd has introduced a new term deposit scheme - KBL-400 - with a higher interest rate offer, with effect from May 21. The new deposit scheme for 400 days carries 10 per cent interest. Senior citizens will get 10.50 per cent for their deposit of 400 days. The new scheme will remain valid for a limited period. The bank has also raised interest rate for deposits under `KBL Tax Planner' (meant for income-tax exemption) to 9.50 per cent (8.25 per cent) to general public and 10.25 per cent (9 per cent) to senior citizens

Result

City Union Bank has reported a net profit of Rs 71.81 crore for 2006-07, earning Rs 29.92 a share. Net profit was also 27.38 per cent higher than the Rs 56.37 crore achieved in the previous year. The board of directors has recommended a dividend of Rs 4 per share (40 per cent). The bank achieved total business of Rs 8,029 crore for the year, comprising Rs 4,699 crore of deposits and Rs 3,329 crore of advances. For the current year, the bank targets a total business of Rs 11,000 crore. Net NPAs stood at 1.09 per cent against 1.95 per cent a year ago. Capital adequacy ratio stood at 12.58 per cent. Return on average assets was 1.57 per cent and return on equity was 19.64 per cent. Federal Bank’s net profit for the quarter ended March 31, 2007 increased by 95 per cent to Rs 99.25 crore from Rs 50.73 a year earlier, while its profit for the year ended March 31 increased to Rs 292.73 crore from Rs 225.21 crore last year. Its net interest income was up 32.36 per cent to 227.96 crore in the fourth quarter from Rs 172.22 crore a year earlier, while other income rose 51.10 per cent to Rs 105.36 crore during the quarter from Rs 69.73 crore. The capital adequacy of the bank as on March 31, 2007 stood at 13.43 per cent. The bank is also in the process of reviving its subsidiary Fedbank Financial Services which will act as the direct selling agent of the bank.

Bank Stock News

Syndicate Bank has proposed a follow-on public issue of 8 crore equity shares in the current financial year for meeting its capitalisation requirements. The bank said in a stock exchange notification that the issue would be subject to approvals from the Government and the Reserve Bank of India. The pricing of the issue has not been decided, though it is likely to be at a discount to the market price In less than a month since the last bulk deal, over 7.5 lakh shares of Canara Bank changed hands. The deal happened in two tranches on the BSE with the first one of 4.04 lakh shares being bought at an average price of Rs 260 per share, totalling Rs 10.51 crore. The second lot was 3.5 lakh shares at Rs 267.5 per share totalling Rs 9.36 crore. “The buying must relate to the rising Nifty in the light of it having touched all-time highs. With inflation fears expected to abate over the next two to three weeks, many of the PSU banking counters would stand to benefit,” said Gaurang Shah of Geojit Financial Services. Despite the possibility of Dena-Canara Bank merger, some brokerages like Emkay Research have taken a contrarian call on the stock.

News

Oriental Bank of Commerce said would start mobile banking facility for its customers in the next 2-3 months. It will be launched in another 2-3 months. The bank has already invited expression of interest from vendors. Besides, the bank is also in the process of extending its mobile top-up facility under which customer will get their mobile recharged by using ATMs. The bank has tied up with mobile service providers such as Airtel, Hutch, Reliance, MTNL, BSNL, Tata Indicom, etc. for this facility. The bank has applied for opening up a representative office in Dubai. ICICI Bank has stepped up its support to realty market in Mysore by launching a 48-hour home loan-processing scheme. The fast track scheme was introduced last week. Announcing its launch at the ‘My Realty-2007’, bank’s emerging market mortgage finance group national head Satish Kulkarni said, “If we do not do it (process within 48 hours), we will refund the processing fee.” He also said the bank would focus on Mysore in all its future property development cross-location events conducted regularly at leading centres across the country. The events are part of the bank’s retail property services in India Andhra Bank launched two mobile biometric ATMs and will soon expand them to other places. "Andhra Bank is the first bank in the country to launch mobile biometric ATMs. We will soon expand this to other places," Mr K. Ramakrishnan, Chairman and Managing Director, said at the inaugural function of the ATMs. The mobile ATMs would be moving in Hyderabad and Secunderabad on a particular route map with pre-announced timings from 6 am to 6 pm and would cover un-banked and under-banked areas. They would identify customers based on their finger print. However, the use of personal identification number is also accepted by the machines. For biometric access, customers have to register their fingerprints with the branch in which they maintain accounts.