Tides of 29.12.2006

Mottos for Success-266
“Extraordinary people are ordinary people who do everything in life with extraordinary Passion.”
1. The Govt. of Bihar, which plans to hire five lakh temporary teachers, is set to mandate UTI M F for a scheme that will help them save part of their salaries in a fund that the country's largest asset management company now manages. The State will have its Zila Parishads recruit these teachers, who will sign up in the savings programme that UTI MF proposes to devise.
2. Banks are catching their customers young. Children's deposit schemes are seeing little piggy banks grow into modest bank accounts. Some of the banks said their customer base under children's schemes have almost doubled this fiscal.
3. The boards of directors of ICICI Bank and Sangli Bank Limited at their respective meetings approved an all-stock amalgamation of Sangli Bank with ICICI Bank. Deloitte Haskins & Sells, the independent valuer appointed jointly by ICICI Bank and Sangli Bank, has recommended a share exchange ratio of 100 shares of ICICI Bank for 925 shares of Sangli Bank. The proposed amalgamation would result in issuance of an additional 3.45 mn shares of ICICI Bank, equivalent to about 0.4% of its existing issued equity share capital.
4. The amalgamation of Sangli Bank with ICICI Bank has once again highlighted the role of old private sector banks in the consolidation exercise. The deal is likely to prove beneficial to the shareholders of the ailing Sangli Bank, by offering them an opportunity to participate in the growth of ICICI Bank's widely spread out operations. For ICICI Bank, the merger would give it an immediate access to 198 branches of Sangli Bank, apart from strengthening its rural portfolio.
5. Allahabad Bank's zonal office at Barasat, North 24-Parganas district, recently organised a mega-credit camp in which farmers, entrepreneurs, borrowers and customers participated. The camp generated Rs 12.44 crs as loans for 1,551 borrowers, specially from agriculture and priority sectors. The bank has introduced different schemes for the development of farmers and women such as kisan credit card, kisan shakti yojana, women's empowerment scheme, etc.
6. The 50 bps hike in cash reserve ratio (CRR) to 5.50% by the RBI will impact banks' profitability, say bankers. The central bank's surprise move may put pressure on lending rates even as bankers are assessing the impact.
7. Banks are finding new ways of funding the high level credit growth, with lagging deposit accretion making lendable resources scarce and ahead of expected liquidity squeeze in the January-March 2007 quarter. Bankers said foreign currency deposits are being swapped by banks into rupees to meet the escalated demand for credit. Swapping of foreign currency deposits helps banks generate rupee liquidity and also to enjoy higher interest margins on rupee loans.
8. Foreign currency ratings and outlook (BB+/Positive/B) on ICICI Bank by Standard & Poor's Ratings Services remain unchanged following the bank's proposed acquisition of Sangli Bank. Although the financial profile of Sangli Bank is weak, as evident in its capitalisation and profitability, this merger will not have any material impact on ICICI Bank's financial profile.
9. RBI has suggested a limit of 0.25% of the net worth on banks' exposure to all non-option rupee derivative contracts, including rupee-foreign currency contracts.

Tides of 28.12.2006

Mottos for Success-265
“The bad news is time flies. The good news is you are the pilot.”
1. It's now the turn of insurance companies, after banks, to introduce biometric cards in rural and semi-rural areas. ICICI Lombard General Insurance Company plans to offer family biometric cards to group health insurance policyholders. The card will enable policyholders to get hospital treatment without making any advance cash payment. Biometric cards authorise transactions based on the customers' fingerprints. To begin with, ICICI Lombard will launch these cards for health insurance policyholders in Manipal, Karnataka. This family card will cover the head of the family and three other dependants.
2. The transfer of RBI shareholding in SBI to the Government would not in any way adversely impact the bank's capital-raising ability. The Government had agreed in principle to acquire the RBI's shareholding in SBI and was close to reaching a final decision on the transaction. Currently, the RBI holds 59.73% stake in SBI. SBI has a comfortable capital adequacy of 12.63%, as on September 30, well above the minimum regulatory environment of 9%. The apprehension that the transfer would impair fresh capital-raising is unfounded. The Government would fully stand by SBI in its efforts to raise more capital.
3. ICICI Bank Ltd, is looking to take over ailing Maharashtra based Sangli Bank Ltd. The board of directors of ICICI Bank will meet on December 9 to consider the proposal for amalgamation of Sangli Bank with itself.
4. The RBI has marked up the Cash Reserve Ratio from 5% to 5.5% (in two phases) to impound about Rs 13,500 crs of bank funds. CRR will go up from 5% to 5.25%, effective December 23 and on to 5.50% from January 6.The CRR was last raised by one half of one percentage point (two phases) to 4.75% on Sept 18, 2004 and to 5% effective Oct 2, 2004.
5. City Union Bank has been inducted as a member of the `Cash Tree' ATM sharing network. With this induction, the number of banks has gone up to 12 under the `Cash Tree' network for mutual sharing of their ATMs. The customers of 12 banks can access over 3,500 ATMs across the country.
6. The OIC alliance, formed a few months ago between OBC, Indian Bank and Corporation Bank, has initiated moves to make the alliance function. The present moves, as explained, presupposed the sharing of IT platform initially for ATMs, formation of a joint appraisal cell in Mumbai to undertake appraisal of large projects for funding, participating in each other's training programmes and building up a common data centre. One of the partners of the alliance had gold for selling while the other partners also used their outlets to sell the metal, thus adding to their earnings.
7. Gross bank credit has gone up by Rs 12,637 crs to Rs 16,83,730 crs as of November 24.
8. SBI has raised interest rates on deposits effective December11. The last interest rate revision was on August 19. Interest rates on domestic term deposits, deposits of senior citizens and super saver term deposits have been hiked by 25 bps to 75 bps.
9. Mr G. Narayana Moorthy has taken over charge as the new Managing Director and Chief Executive Officer of the Tamilnad Mercantile Bank with effect from December 1, for two years.

Tides of 27.12.2006

Mottos for Success-264
“Time stays long enough for those who use it.”
1. PNB has launched a new remittance service with Buyindiaonline.com Inc, a wholly owned subsidiary of Xoom Corporation, USA. Under this service, non-resident Indians can send their remittances to India through the website www.Xoom.com. A beneficiary can pick up pay order in his favour from any of the over 2,000 core banking solutions branches of PNB in India.
Bank of India has declared a 20% interim dividend payable on December 20. For 2005-06, the bank had paid a 30% dividend. The capital adequacy of the bank stands at 11.85%.
2. UTI Mutual Fund will offer a micro-pension initiative to the staff members and customers of Union Bank of India called UTI's `Retirement Benefit Pension Fund.' It will enable them to get pension (periodical income) after 58. It is an open-ended scheme and has been operational for the last 13 years. It invests minimum 60 – 100% in debt and balance in equity.
3. Ambit Corporate Finance, Television 18 group company Web18 and Centurion Bank of Punjab have announced a partnership to pursue stock broking business with a strong Internet presence in India. The venture, will be a first of its kind with three domestic players coming together to capture the fast-growing brokerage market. Besides stock broking, the venture will offer a range of financial services including distribution of third-party product and portfolio management services.
4. United Bank of India's Internet banking service, was inaugurated by the Finance Minister, Mr P. Chidambaram. The service would now be available in 175 branches. As and when the bank goes for CBS (core banking solution), all the branches under CBS would be in a position to extend the service to its customers. The facility would include bill payment, rail and air ticketing, and mobile banking. The service has been audited by Ernst & Young.
5. SIDBI has launched a new software,called Credit Appraisal and Rating Tool (CART),for appraising and rating SMEs. It has been developed in-house by SIDBI. CART aims at helping in prudent decision-making on support-worthiness of credit proposals and on pricing of loans, said a statement from the company.It has contributed to significant reduction in credit dispensation time in the bank. SIDBI has sanctioned about 1,000 loans of average size of Rs 36 lakh using this tool. The software is intended for banks and state finance corporations who have signed MoUs with SIDBI for co-financing. SBI, IDBI Ltd, BOI, BOB, Canara Bank, Dena Bank, Corporation Bank, YES Bank, among others have signed MoUs with SIDBI. SIDBI has co-financed Rs 100 crs till now.
6. The Finance Minister, Mr P. Chidambaram, has urged the RBI to be more liberal in granting branch licences to regional rural banks (RRBs). The RRBs are not expanding their branch network. He stressed the need to maintain distinction between RRBs and commercial banks and ensure that the identity of RRBs is not lost. After the amalgamation drive in the recent years, the number of RRBs in the country has reduced from 196 to 102.
7. OBC hopes to bring all its branches in the city under CBS by March next year.
8. Karnataka Bank Ltd has signed a MoU with Orb Energy Pvt Ltd for financing solar equipment manufactured and marketed by the latter. The finance will be extended under bank's `KBL-Ravi Kiran' scheme. The customers availing of finance under the scheme will get a benefit of sum equal to Rs 25 per watt peak, from Orb Energy Pvt Ltd.

Tides of 26.12.2006

Mottos for Success-263
“Your most unhappy customers are your greatest source of learning.”
1. RBI has proposed fresh guidelines to regulate non-banking financial companies (NBFC), including the minimum capital adequacy ratio of 10%,they should maintain and commercial banks' exposure in them. 2. Electronic filing of income tax returns by corporates has evoked a good response. The IT has received 2,88,471 electronic returns up to the due date of November 30. The returns were filed through Form-01, which is a combined income tax and fringe benefit tax return. The government had last year received 3,27,000 returns from corporates.
3. ICICI Bank has opened its representative offices in Thailand, Indonesia and Malaysia, extending its reach to 17 countries.
4. YES Bank has partnered with United Nations Environment Programme-Finance Initiative to promote linkages between environment, sustainability and financial performance. It is the first Indian bank, which has become a signatory to UNEP-FI, which forges global partnerships between itself and private financial sector. It also plans to engage other banks in similar partnerships.
5. Taking a cue from the RBI’s peak season credit policy and finance ministry fiats, commercial banks have cut back on credit disbursement to real estate and retail sectors, essentially amounting to rebalancing of credit portfolios. The Finance Ministry at a review meeting last month told bankers to redirect credit to more productive areas, which included infrastructure, manufacturing and farm sectors. The shift was necessitated by the fact that these sectors currently needed credit-support the most.
6. Lakshmi Vilas Bank Ltd has tied up with Western Union Financial Services for offering global money transfer facility to its customers. The Bank has entered into an agreement with Weizmann Forex Ltd, the primary agent of Western union.
7. Banks can now break open safe deposit lockers if the hirer does not pay the rent, says a draft RBI circular. Lockers will have to be opened at least once a year, if the profile of the customer is considered high-risk going by the `Know Your Customer' norms. Reacting to a recent incident where explosives and weapons were found in the locker of a bank, the RBI has advised banks to contact `medium' and `high risk' customers if they have not opened their lockers in one and three years, respectively. They will be given the option to operate or surrender them.
8. Allahabad Bank, which has a large concentration of branches in West Bengal, has been awarded the WB Govt.'s prize for outstanding performance in recruitment of persons with disabilities.
9. With the industry confronting diverse challenges, banks have to become supermarkets that provide an array of products and deliver superior service to the clients, according to Mr M. Damodaran, Chairman of SEBI.
10. NBFCs with a minimum net-owned fund of Rs 100 crs and a net profit for two years can now distribute mutual funds and issue co-branded credit cards (with commercial banks) with prior approval of RBI. NBFCs should not have more than 3% net NPAs. The non-deposit-taking NBFCs should have a CAR of 10% and deposit-taking NBFCs should have 12% or 15%, as applicable to the company.

19.12.2006

Mottos for Success-262
“The biggest enemy of future success is past success.”
1. So long as the performance of Non-Banking Finance Companies is within the guidelines laid down by the RBI and their capital adequacy and lending operations are in order, no purpose is served by a ceiling on lending by banks to NBFCs. Indeed, this would amount to subverting priority lending, says S.VENKITARAMANAN, former Governor of RBI.
2. SBT has entered the league of medium-scale banks in the country with its total business crossing Rs 50,000 crs.The current fiscal started with a total business of Rs 44,400 crs and the bank had fixed a growth target of Rs 8,750 crs for the year. As at the end of November, the business had grown by Rs 6,800 crs, raising the prospects of the final figure going well beyond the target.
3. Exim Bank of India is studying the healthcare/medical tourism industry to ascertain the funding opportunities in the business and derive a model for lending, according to sources in the bank. As part of the study, which is expected to result in a report on healthcare and medical tourism, the bank has been holding seminars in many cities, to collect the views of various stakeholders in the industry.
4. Germany's Baader Bank will take a 30% stake in Mumbai-based public limited company Parsoli Corporation Ltd, which opened its state-of-the-art trading terminal centre and has organised the First Islamic Investment Conference.
5.Indian Bank plans to hit the capital markets with an initial public offer of 8.6 crs equity shares. The bank intends to list on the exchanges by the end of January. It filed its Draft Red Herring Prospectus with SEBI on December 1. The offer will constitute 20% of the post-issue fully diluted paid up equity capital of the bank.
6. UBI launched its new product called "Union Classic Current Account, the benefits of which can be availed by different segments of customers including traders, government departments, SMEs and IT companies among others.
7. Keeping in mind the normal needs of the customers, particularly the trader community, such as quick fund-transfers, quick collection of outstation cheques, the bank has designed the product, under which the trader can efficiently manage his funds. A customer or trader can open the UCCA in three categories, with any of the over 908 comprehensive banking system or CBS branches.
8. Barclays Plc, UK’s third-largest bank by assets, plans to enter the emerging credit card market in India. It is in talks with LIC to use the latter’s huge database on royalty payment. Barclaycard is the single biggest branded credit card operation in Britain, with 11.2 mn card holders and about £25 bn lent out at any one time.
9. ON NOVEMBER 21, in a landmark order, the SEBI has asked certain well-known financial intermediaries and unscrupulous investors to "disgorge'' the gains they had illegally made in the Initial Public Offer related demat scam that was brought to light in April this year. SEBI, after extensive surveillance and investigations, had held certain well known capital market intermediaries, the two principal depositories, the NSDL & CDSL as well as some leading depository participants including some operated by well known banks, responsible for the acts of certain unscrupulous investors who actually made the illegal gains.

Tides of 18.12.2006

Mottos for Success-261
“Whether you think you can, or think you can’t, you’re right.”

1. Corporation Bank has joined BSE as a clearing bank. An agreement between BSE and Corporation Bank has been signed. It had made a good beginning with SHCIL Services as a member, and hoped to grow to be a very valuable clearing-house member of BSE.
2. International Visa cardholders spent Rs 6,000 crs in India between July last year and June this year, with cardholders from the European Union emerging the biggest spenders. A research report prepared by Visa International showed that the total international spend on Visa cards here by Europeans was pegged at more than Rs 2,400 crs. The top-three Visa spending countries of origin were the United States ($421 mn or 31% of total tourist spend), the UK ($268 mn or 20% of total tourist spend) and France ($69 mn or 5%of total tourist spend).
3. Catholic Syrian Bank has launched a mediclaim policy, CSB Health Care Support, in association with the New India Assurance Company.The launch of the scheme is just right since most customers would be looking out for better tax breaks towards the end of the financial year, along with medical insurance facilities. The fee-based income of Catholic Syrian Bank is expected to go up substantially during the current year, since the bank has tied up with several mutual funds also for selling their products.
4. The Union Bank of India has introduced `Union Classic Current Account (UCCA),' an improved version, offering more facilities over the `Multi Gain Current Account (MGCA),' introduced in 2004. The scheme, effective from December 1 to December 31, 2006, is aimed at boosting the current account portfolio, attracting more high-value traders' segment and nurture super-value current account connections. The scheme is introduced only in branches with CBS.
5. HSBC Investments has launched portfolio management services. The service aimed at providing customised portfolio management services to select clientele tailored to the investor's risk appetite, growth expectations and personal requirements. There were three product options being offered: 85% capital protection portfolio, signature portfolio and strategic portfolio.
6. Asset Reconstruction Co (India) Ltd (Arcil), the country’s first bad loans buyer, has resolved cases of NPAs involving total dues of Rs 1,741 crs during April-September 2006. Till September, Arcil resolved Rs 11,592 crs of NPAs from Rs 22,412 crs of NPAs acquired since it began operations.
7. While a number of public sector banks are over a hundred years old, their performance has been poor and market shares remain low. It’s high time they consolidate. Bank of India, Canara Bank, Corporation Bank and Indian Bank are all 100-year-old PSBs. While first three have already completed their 100th year, the fourth one, Indian Bank, will turn 100 next March. Two more PSBs, BOB & Punjab & Sind Bank, are inching towards the milestone. They will turn 100 in 2008. There are 87 scheduled commercial banks (excluding the cooperative banks and regional rural banks) and only one of them, SBI, has a double-digit market share. While ICICI Bank’s share is close to 10%, there is only one more bank, PNB, that has a market share (of assets) of more than 5%.
8. Union Bank of India has brought 906 of its branches under core banking solutions. This is 40% of the total branch network.

Tides of 16.12.2006

Mottos for Success-260
“You must be the change you wish to see in the world.”

1. Export Import Bank of India has tied up $230 mn from the Japanese market as part of its strategy of raising funds from advanced overseas markets.
2.SIB will be launching co-branded Citi Bank credit card next month. This is part of the bank's endeavour to increase its non-fund based revenue. SIB has already signed MoUs with five mutual funds to distribute their products.
3. A clutch of foreign banks and ICICI Bank have made a killing as India Inc goes on an overseas acquisition spree. Almost all overseas deals undertaken by Indian companies between April and November this year have been funded, by ICICI Bank and foreign banks, including Citibank, ABN Amro and Standard Chartered Bank. In what is clearly bad news for the likes of SBI, the country's largest bank with a sizeable overseas presence, PSBs have virtually got no share of this lucrative and fast-growing business.
4. US-based Citigroup which is making large investments in various sectors expects its India business to contribute a substantial amount of total revenue to its global balance sheet.
5. The India Fund, Inc, a closed-end fund managed by the Blaskstone Group of the US, has increased its stake in the South Indian Bank to over 5%.
6. K.V. Kamath, MD & CEO of ICICI Bank, has been chosen Business Standard’s Banker of the Year for 2005-06. The choice is based on his track record, a perception audit in the industry, and a poll involving senior editors of the newspaper.
7. Setting what is likely to be a trend in inclusive banking, Citibank has launched two biometric ATMs for micro-finance customers. Biometric ATMs authorise transactions by scanning customers' thumbprints instead of a PIN code. While ICICI Bank has introduced biometric cards, PSU banks are on the verge of launching bio-metric ATMs. Citibank plans to establish a network of 25 to 35 such ATMs within a year, specifically targeted at its Citibank `Pragati' savings account holders. Citibank `Pragati' is a no-frills savings account with nil minimum balance and is offered directly or through a micro-finance institution.
8. RBI has asked Margadarsi Financiers, a Hyderabad-based HUF, not to accept fresh deposits or renew matured deposits. The unincorporated body has also been advised to put in place a mechanism to monitor the assets of the HUF so that they are not eroded and thereby compromising its capacity to discharge obligations to the depositors. Moreover, the HUF has been asked to pay deposits as and when they mature and that any violation could attract attention under the provisions of the Andhra Pradesh Protection of Depositors of Financial Establishments Act 1999.
9. City Union Bank perceives that the 9.99% stake by L&T in the bank would create an image for the bank and help improve the bank's business. They may use the bank for placing deposits and other business dealings. It would be advantageous for both. This investment is expected to enhance the bank's net worth by Rs 45 crs.
10. Syndicate Bank has implemented the core banking solution in the 1001 branches with Flexcube from i-flex Solutions Ltd.

Tides of 15.12.2006

1. For IDBI Capital, which recently launched its online trading service, paisabuilder.in, tying up with PSBs is an easier way of reaching out to a larger number of people.
2. PSBs fear that the proposed revision in priority sector guidelines, if implemented, would lead to a shortfall in meeting targets. The proposed guidelines are likely to compound the problem (of meeting priority lending obligations) further. PSBs as a group had failed to meet the sub-targets for lending to agriculture and weaker sections in 2005-06.
3. The government should allow the RBI to increase the share of gold in the country’s foreign exchange reserves to diversify risks arising from volatility in global currencies.
4. Barclays Bank’s total lending in India is just over Rs 4 crs, but its off-balance sheet liabilities are over Rs 2,50,000 crs. If the RBI goes ahead and implements its revised priority sector lending guidelines from April 1, 2007, then the British bank will have to lend over Rs 1,200 crs to priority sectors. That’s because the draft guidelines propose to use either the net bank credit or credit equivalent of off-balance sheet exposure as the base for calculating bank’s priority sector lending obligations. Barclays Bank is not much into lending activities, but its investment banking and derivatives business has seen a sharp rise over the last couple of years as Indian corporates went on a fund raising spree. Foreign banks are required to lend 32 % of net bank credit or credit equivalent of off-balance sheet (OBS) exposure to priority sectors such as agriculture, small scale industries, small business/service enterprises, micro credit, education loans and housing loans.
5. As many as eleven banks, including PNB , Canara Bank and BOB, are planning to enter the lucrative insurance market in joint ventures with leading overseas insurance companies in 2007Besides a foreign partner, banks are expected to enter the market with one domestic player as overseas insurers’ holding is capped at 26%, while banks are permitted to hold a maximum 49% in any insurance JV.
6. With yields showing signs of softening on the back of a rising liquidity, banks have begun extending the maturity of their investments in government securities. The ten-year yield to maturity dropped by more than 20 bps over the last three weeks to 7.44% currently.
7. Kotak Mahindra Bank has plans to expand its overseas operations, in West Asia, Far East and Japan. It plans to handhold overseas investors and help them tap into the India story. Currently, it is managing a portfolio of about $1.3 bn through its UK subsidiary, which is about 5% of the bank's overall portfolio; it expects to increase this to about 25 % within next 3-4 years. It may raise about Rs 300 crs as Tier II Capital.
8. In a bid to control recruitment costs and raise productivity of its HR personnel, ICICI Bank is in talks with Internet service providers such as Reliance Infocomm for providing interview cubicles with audio-visual recording and tele-conferencing facilities. ICICI bank expects to hire 15,000 people every year for the next several years and most of the recruits will come from tier-II cities. It will set up separate kiosks inside the branch where candidates can attend interviews besides submitting resumes and job application forms. This will enable candidates to attend interviews at centres nearest to their homes, instead of travelling to Mumbai, where interviews generally take place.

Tides of 14.12.2006

1. For IDBI Capital, which recently launched its online trading service, paisabuilder.in, tying up with PSBs is an easier way of reaching out to a larger number of people.
2. PSBs fear that the proposed revision in priority sector guidelines, if implemented, would lead to a shortfall in meeting targets. The proposed guidelines are likely to compound the problem (of meeting priority lending obligations) further. PSBs as a group had failed to meet the sub-targets for lending to agriculture and weaker sections in 2005-06.
3. The government should allow the RBI to increase the share of gold in the country’s foreign exchange reserves to diversify risks arising from volatility in global currencies.
4. Barclays Bank’s total lending in India is just over Rs 4 crs, but its off-balance sheet liabilities are over Rs 2,50,000 crs. If the RBI goes ahead and implements its revised priority sector lending guidelines from April 1, 2007, then the British bank will have to lend over Rs 1,200 crs to priority sectors. That’s because the draft guidelines propose to use either the net bank credit or credit equivalent of off-balance sheet exposure as the base for calculating bank’s priority sector lending obligations. Barclays Bank is not much into lending activities, but its investment banking and derivatives business has seen a sharp rise over the last couple of years as Indian corporates went on a fund raising spree. Foreign banks are required to lend 32 % of net bank credit or credit equivalent of off-balance sheet (OBS) exposure to priority sectors such as agriculture, small scale industries, small business/service enterprises, micro credit, education loans and housing loans.
5. As many as eleven banks, including PNB , Canara Bank and BOB, are planning to enter the lucrative insurance market in joint ventures with leading overseas insurance companies in 2007Besides a foreign partner, banks are expected to enter the market with one domestic player as overseas insurers’ holding is capped at 26%, while banks are permitted to hold a maximum 49% in any insurance JV.
6. With yields showing signs of softening on the back of a rising liquidity, banks have begun extending the maturity of their investments in government securities. The ten-year yield to maturity dropped by more than 20 bps over the last three weeks to 7.44% currently.
7. Kotak Mahindra Bank has plans to expand its overseas operations, in West Asia, Far East and Japan. It plans to handhold overseas investors and help them tap into the India story. Currently, it is managing a portfolio of about $1.3 bn through its UK subsidiary, which is about 5% of the bank's overall portfolio; it expects to increase this to about 25 % within next 3-4 years. It may raise about Rs 300 crs as Tier II Capital.
8. In a bid to control recruitment costs and raise productivity of its HR personnel, ICICI Bank is in talks with Internet service providers such as Reliance Infocomm for providing interview cubicles with audio-visual recording and tele-conferencing facilities. ICICI bank expects to hire 15,000 people every year for the next several years and most of the recruits will come from tier-II cities. It will set up separate kiosks inside the branch where candidates can attend interviews besides submitting resumes and job application forms. This will enable candidates to attend interviews at centres nearest to their homes, instead of travelling to Mumbai, where interviews generally take place.

Tides of 13.12.2006

1. Corporation Bank, Nampally, has become the first PSB to earn BIMA Bank award from the LIC, South Central Zone. The award is in recognition of the highest insurance premium mobilised by the branch over the last six months. The branch had crossed Rs 50 crs business at the end of September 2006 and earned ISO certification.
2. There is more to Basel-II than capital requirement. The `New Accord of Basel Committee of Banking Supervision', popularly known as Basel-II, is really a push towards a system that shines a light on various risks, so that the management could address them. The true benefits of Basel-II would be realised if banks meet the requirements not just to satisfy the regulator, but as a means of risk mitigation. All banks, including those who do traditional, deposit taking-lending banking, were open to operational risks.
3. In tune with intensifying its efforts to serve the rural community more effectively, Corporation Bank has initiated a process to sell its loan products in villages with the help of India Post. In association with India Post, It has launched `Corp Gram Mitra Yojana' - a security-free consumption loan scheme for rural beneficiaries. To begin with, the scheme has been introduced on a pilot basis in Goa.
4. The All-India Bank Depositors Association (Mumbai) contends that the RBI working group report on reasonableness of bank service charges is "not specific." The association thinks the report should specify the "financial services that need scrutiny" for fair charges.
5. Not to be left behind private banks, several public sector banks are tying up with broking firms to offer online trading services. In the last week, three public sector banks announced trading services and a few more banks are also expected to follow. While the securities firms provide the trading facility, banks provide savings and demat accounts. For the banks, it means a new source of fee income, more floating funds and a larger base of low cost deposits in the form of savings and current bank accounts.
6. SBI which tied up with Motilal Oswal Securities, already has 65,000 demat clients and is targeting 1,50,000 clients. Online trading will give floating funds to banks. PNB has tied up with IDBI Capital Market Services and OBC with ILFS Investmart. BOI is linking up with Asit C. Mehta Investment Intermediates Ltd. UBI has been offering online trading services since November 2005 with SSKI Securities and has 1.1 lakh demat accounts.
7. BOB, too, has plans to offer depository services once its CBS are extended to more branches. As of now, the bank offers demat account facilities at 11 centres and plans to extend it to about 600 branches in the next few months. 8. Online retail trading is getting popular as investible surpluses with retail investors swell the purse, at the ICICI Direct.com, the online broking subsidiary of ICICI Bank. Banks retain customers with online trading, while investors gain from having a link with their demat, trading and savings accounts. Electronic fund transfer acts as a bonus. ICICI Direct.com has 10 lakh customers in the last six years. While there are about two crs shareholders, there are only about 19 lakh registered Internet trading customers indicating the scope for online trading.

Tides of 12.12.2006

1. RBI is under pressure to reduce the cash reserve ratio for banks from the existing 5% to help them meet the increasing demand for credit. In the current financial year, bank credit has been growing at a healthy clip of over 30%.A 1% CRR cut releases funds to the tune of Rs 22,000 crs.
2. To make sure their voice is not lost in the corridors of power, the India CEOs of 12 banks have formed a pressure group within the IBA. The group had its first meeting and will henceforth meet once every quarter. Sanjay Nayar, CEO of Citigroup in India, is the chairman of this standing committee of foreign sector banks. The other banks in the group are HSBC, Standard Chartered, Deutsche Bank, BNP Paribas, ABN Amro, Bank of America, American Express, DBS Bank, JP Morgan, Barclays, and Calyon.
3. RBI is reviewing its policy of not allowing multilateral agencies to provide loans to banks. The review might result in multilateral agencies such as the International Finance Corporation (IFC) and Asian Development Bank (ADB) being allowed to lend to banks and financial institutions, including PSBs.
4. Japan’s Shinsei Bank has announced an exclusive tie-up with the largest MF UTI asset management company for launching a diversified offshore fund to mobilise over $ 300 mn.
5. UBI is being chased by four new life insurance companies to make the Mumbai-based bank a shareholder in their ventures. Italy’s largest insurer Generali, Japan’s Dai-Ichi Mutual Life Insurance, which has tied up with BOI, Germany’s second largest primary insurer The Ergo Insurance Group, and interestingly, Bharti Axa life insurance company, which commenced operations in August, have already made presentations to Union Bank.
6. HSBC is launching a new cash management product, titled National Network Collections. It will help customers keep track of their receivables while helping them reduce their working capital cycle and cutting costs by between 2 -20%. Access to timely and relevant management information and cost efficiencies are key cash management issues for the customers. The product would reduce the working capital cycle for users by between 3 and 4 days on the average.
7. Loans to SHGs engaged in agriculture and allied activities will now be categorised as direct finance to agriculture within the priority sector. It is in response to banks requesting for the change. Banks will have to maintain separate data on SHG--micro credit portfolios. The loans provided to NGOs or SHGs for on-lending to members or small groups are to be classified as priority sector advances.
8. In its efforts to ensure speedy flow of credit to industrial customers, the Andhra Pradesh State Financial Corporation has entered into a MoU with Canara Bank. Sanction of term loans up to Rs 5 crs by the APSFC would now be possible. Canara Bank will assist in larger term loan sanction in projects with requirement of more than Rs 5 crs, as per the MoU. Bigger projects would be funded by the APSFC and Canara Bank on a consortium basis. APSFC has forged similar strategic alliances with the BOI, SBH, Andhra Bank and Central Bank of India. In addition to speedy flow of credit, easy facility of working capital to all the existing industrialists and new entrepreneurs in the State would be facilitated.

Tides of 11.12.2006

1. PNB plans to come up with its own credit card by March next year. It would soon invite expression of interest for a joint venture partner in the proposed credit card venture. Currently, PNB has a co-branding tie-up with HSBC in which latter is the card issuer and plays the dominant role. Indications are that PNB would withdraw from this tie-up as soon as the joint venture company takes off.
2. OBC would soon offer online share trading facility to its demat account holders. For this purpose, the bank has signed a MOU with IL&FS Investsmart. Initially, the online share trading facility would be available on a pilot basis at Mumbai. This facility would in due course get extended to other branches. Currently, OBC has more than 1 lakh demat accounts spread over 111 branches.
3. ICICI Bank has signed a MOU with Export Development Canada (EDC), a Canadian export credit agency, for financing support to Indian buyers of capital goods and professional services from Canada. ICICI Bank will leverage its international presence to provide holistic support to Indian corporates in their global aspirations.
4. Basel II was to have been on in about four months, but Indian banks got a reprieve when the RBI recently extended the deadline by up to two years. Perhaps our banks knew it all along that compliance with Basel II was still far away. Which explains why approximately 75% of the banks have not specifically budgeted funds for their Basel II programme, as a recent survey has found.
5. IDBI Capital Market Services Ltd has signed an agreement with Bank of Rajasthan to offer e-trading services through www.IDBIpaisabuilder.in to the customers of the bank.
6. Forex reserves for the fortnight ended November 17 increased by a massive $2.071 bn to touch $170.355 bn.
7. Wall Street Finance Ltd has tied-up with IndusInd Bank for sales and marketing of Saudi Riyal drafts to Haj pilgrims during the Haj season. WSFL is involved in foreign exchange and inward money remittance services.
8. ING Mutual Fund has tied up with Dena Bank for the distribution of its mutual fund products through select branches.
9. The Hongkong and Shanghai Banking Corporation Ltd is organising the HSBC Bird Race, a signature event of the bank to create awareness about nature.The HSBC Bird Race is a dawn-to-dusk event and each of the four-member team will be named after birds found locally such as kingfisher, cuckoo and woodpecker etc. The teams will spend the entire day spotting and identifying birds in an effort to record as many species of birds as possible.
10. Foreign commercial and investment banks have quietly begun picking up public sector bank's tier II and upper tier II bond issues. Bankers said that the foreign banks were picking up the securities in anticipation of softening of yields, across all categories.
11. Gross bank credit has gone up by Rs 15,525 crs to Rs 16,71,093 crs as of November 10, according to RBI's Weekly Statistical Supplement.

Tides of 9.12.2006

1. PNB plans to come up with its own credit card by March next year. It would soon invite expression of interest for a joint venture partner in the proposed credit card venture. Currently, PNB has a co-branding tie-up with HSBC in which latter is the card issuer and plays the dominant role. Indications are that PNB would withdraw from this tie-up as soon as the joint venture company takes off.
2. OBC would soon offer online share trading facility to its demat account holders. For this purpose, the bank has signed a MOU with IL&FS Investsmart. Initially, the online share trading facility would be available on a pilot basis at Mumbai. This facility would in due course get extended to other branches. Currently, OBC has more than 1 lakh demat accounts spread over 111 branches.
3. ICICI Bank has signed a MOU with Export Development Canada (EDC), a Canadian export credit agency, for financing support to Indian buyers of capital goods and professional services from Canada. ICICI Bank will leverage its international presence to provide holistic support to Indian corporates in their global aspirations.
4. Basel II was to have been on in about four months, but Indian banks got a reprieve when the RBI recently extended the deadline by up to two years. Perhaps our banks knew it all along that compliance with Basel II was still far away. Which explains why approximately 75% of the banks have not specifically budgeted funds for their Basel II programme, as a recent survey has found.
5. IDBI Capital Market Services Ltd has signed an agreement with Bank of Rajasthan to offer e-trading services through www.IDBIpaisabuilder.in to the customers of the bank.
6. Forex reserves for the fortnight ended November 17 increased by a massive $2.071 bn to touch $170.355 bn.
7. Wall Street Finance Ltd has tied-up with IndusInd Bank for sales and marketing of Saudi Riyal drafts to Haj pilgrims during the Haj season. WSFL is involved in foreign exchange and inward money remittance services.
8. ING Mutual Fund has tied up with Dena Bank for the distribution of its mutual fund products through select branches.
9. The Hongkong and Shanghai Banking Corporation Ltd is organising the HSBC Bird Race, a signature event of the bank to create awareness about nature.The HSBC Bird Race is a dawn-to-dusk event and each of the four-member team will be named after birds found locally such as kingfisher, cuckoo and woodpecker etc. The teams will spend the entire day spotting and identifying birds in an effort to record as many species of birds as possible.
10. Foreign commercial and investment banks have quietly begun picking up public sector bank's tier II and upper tier II bond issues. Bankers said that the foreign banks were picking up the securities in anticipation of softening of yields, across all categories.
11. Gross bank credit has gone up by Rs 15,525 crs to Rs 16,71,093 crs as of November 10, according to RBI's Weekly Statistical Supplement.

Tides of 8.12.2006

1. BSLI, belonging to the Aditya Birla group, has drawn up a marketing strategy to leverage the dealer network of another ABG company, Indo-Gulf Fertilisers, to reach out to rich farmers in Uttar Pradesh, Bihar, Jharkhand and West Bengal. It will be promoting its flexi-line of products to this group of customers. It has targeted 20% of its rural sales through its savings-linked policies.
2. The government will soon open up stock exchanges to foreign direct investment and foreign institutional investment, with the finance ministry finalising an outline of the policy for this purpose. Broad contours of the policy are ready. A decision has now to be taken on whether it has to go to Cabinet for approval or through a notification under the provisions of FEMA. The ministry was awaiting response from market regulator SEBI and banking watchdog RBI in this regard, the official said, indicating there could be a decision in the near future.
3. The Dharwad-based Karnataka Vikas Grameena Bank has signed a MOU with Sonalika Tractor Company of Punjab, under which the bank will finance for the purchase of Sonalika tractors. It is committed to introducing latest farm technology to the farmers. During this fiscal, the bank has given loans to the extent of Rs 38 crs for the purchase of 843 tractors. It aims to finance 2,000 tractors till the end of March.
4. SEBI has lifted the ban on HDFC Bank, a depository participant, allowing it to open fresh demat accounts. SEBI had prohibited the bank to issue further demat accounts, as it had failed to adhere to the `know your client' norms.
5. SBI has launched an online trading facility, eZ@sbi account, with Motilal Oswal Securities Ltd. It is a three-in-one account. The demat account and the savings or current account will be opened with SBI and the trading account will be with MOSL. To start with, it will be offered in 10 branches in Mumbai. By March 31, 2007, it will be extended to 350 branches across the country, which offer demat facility. In the third phase, the bank will offer additional services like selling IPOs, mutual funds and postal products.
6. International banking major HSBC has drawn the attention of the West Bengal Government to the need to institute a modern system of property registration in the State. The bank made a strong case for an online registry mechanism. The State would gain considerably if it set the ball rolling on this front. An online system would help in rooting out cases of fraud.
7. SBI may overshoot its 30% loan growth target for this fiscal. Currently, it is running at 35% y-on-y. The target may have to be revised upwards. SBI's deposit growth is placed at 20% and there is pressure on margins because of a rise in bulk deposits.

Tides of 7.12.2006

1. Six States, Kerala, Punjab, Gujarat, Tamil Nadu, Maharashtra and Andhra Pradesh, would be accounting for 40-50 per cent of the $23-billion annual remittances to India. Western Union, which had a presence through 3,000 outlets in 2001, has extended its reach to 36,000 today. The company had also tied up with petroleum marketing companies, BPCL and HPCL for extending its reach further.
2. As part of its initiative to improve ticket-booking facilities for passengers, the Railways would soon enable buying of reserved train tickets from ATMs, which are being set up at railway stations. The ATMs would have Internet access facility, using which passengers can book e-tickets. The ATM site design and kiosk design for Internet access (to be used for e-ticketing) have already been approved. Setting up of ATMs with e-ticketing facilities will help in reducing long queues at the counters. After entering into an agreement with the SBI to set up 682 ATMs at railway stations, Indian Railways today entered into an agreement with six nationalised banks to set up another 711 ATMs at railway stations for passengers to withdraw cash. Out of the 711 ATMs, 473 will have e-ticketing facilities.
3. PNB has launched online share trading services for its customers. It has tied-up with IDBI Capital Market Services to enable the bank's customers to access www.IDBIpaisabuilder.in, a Web-based portal, for investing in equity, mutual funds and initial public offerings. Although PNB offered bank and demat accounts to its customers so far, it could not directly provide investment products (like online share trading) to them due to regulatory reasons. This alliance with IDBI Capital Market Services would help the bank to offer online trading in shares and, thereby, enlarge the number of demat accounts.
4. Indian Bank's extension counter in the Madras High Court campus has been upgraded as a full-fledged branch. It will have the facilities under Core Banking Solution and also offer services such as Internet banking, phone/mobile banking and multi-city cheques.
5. HSBC, a critical stakeholder in UTI Bank, will for now let its holding remain as it is but is fully aware that the advancing stock market offers it an opportunity to dispose of the stake at a good price. The foreign bank, which on September 30 held 4.96% in UTI Bank, is not considering a dilution at the moment.
6. IIBF, a premier training body promoted by PSBs, is all set to launch a three-paper online diploma course in banking and finance. The board has already approved the programme and the institute is expected to offer it in the next academic session starting May-June 2007.
7. RBI working group has sought deferment of imposition of income tax on urban cooperative banks (UCBs) for three years, to provide them time to develop alternative instruments.

Tides of 6.12.2006

1. Catholic Syrian Bank’s capital raising plans are likely to be further delayed with the RBI asking the bank to first seek the approval of the Foreign Investment Promotion Board for its proposed private placement of equity shares. CSB had applied to the RBI for permission to privately place about 15% stake in the bank for about Rs 35 crs with investors from Mauritius.
2. The Union Bank of India’s capital market exposure limit may decline by over Rs 400 crs to about Rs 1,630 crs owing to the RBI’s new draft guidelines on capping bank capital.
3. RBI Deputy Governor Rakesh Mohan has said it was possible to bring down interest rates in the medium term provided there is greater price stability.
4. With the advent of corporate giants like Reliance, Godrej Agrovet, Bharti in the agri-sector in Chandigarh, the private sector banks are now concentrating on priority sector lending. They are looking for tie-ups with the corporate giants so that they can lend to the farmers who are into contract farming.
5. Banks will now have to check whether a housing loan is being sought for an authorised structure and seek an undertaking that construction is being done in accordance with the sanctioned building plan. Banks have also been asked to ensure that the sanctioned building plan is attached with such an undertaking. These directives from RBI to banks are a follow-up to an order of the Delhi High Court. Banks are advised to strictly comply with the directions with immediate effect. For a housing loan for purchase of constructed property/built-up property, banks are required to obtain from the applicant a declaration that the built-up property has been constructed in accordance with the sanctioned plan and/or building bye-laws.
6. It has been more than a year since the monsoon floods devastated Mumbai in July 2005, but ICICI Bank is still grappling with the damage left in the aftermath. Documents submitted by many of the bank’s customers for safekeeping were damaged in the floods. These include papers submitted as part of opening savings and current accounts, demat accounts, home loan and auto loan accounts and ICICI Direct online trading accounts. The damage was not restricted only to customers based in Mumbai, for certain types of accounts, it touched even customers from other parts of the country. In fact, it has taken ICICI Bank almost 15 months to identify the customers who need to resubmit documents.
7. Half of the Rs 9,000 crs of NPAs transferred to the Stressed Asset Stabilisation Fund by IDBI Bank have been settled for an amount 15% higher than the book value. SASF has settled NPAs with book value of Rs 4,410 crs for Rs 5,140 crs and the bad loans still left in its books as unsettled NPAs are chronic ones which would be difficult to resolve.
8. Citibank Singapore is offering a new way for credit-card holders to make payments, using their fingerprints instead of credit cards. It has begun rolling out biometric payment systems in Singapore that allow Citibank Clear Platinum credit card holders to pay using their fingerprints. It’s an investment for its future. This is the first time the bank has used a biometric payment system anywhere in the world.

Tides of 5.12.2006

Mottos for Success-252
“Give a man a fish, you feed him for a day; teach a man to fish, you feed him for a lifetime.…but teach a woman to fish and chances are that she’ll go on teaching others how it is done.”

1. ICICI has crossed the 1mn customer base for online trading, making it the world’s third largest online trading company.
2. Scope International, Chennai, a global shared service centre of Standard Chartered Bank, UK, will double its infrastructure capacity in Chennai to around 800,000 sq ft by February. It added two more centres in the city recently, taking the number of facilities in the city to four. It also plans to add one more in Chennai.
3. RBI injects or removes liquidity every day from the market through repos and reverse repos. In a repo, the RBI lends funds while in a reverse repo it absorbs funds. The rates at which these are done are the repo and reverse repo rates. Naturally, the repo rate is more than the reverse repo rate. Currently, they are 7.25 % and 6% respectively. In its semi-annual monetary policy review last month, the RBI increased the repo rate but did not touch the reverse repo rate. It is significant and could be the prelude to doing away with reverse repos altogether.
4. Max New York Life and Adilabad District Cooperative Central Bank Ltd have announced a strategic tie-up to sell life insurance products through the rural bank. The tie-up will strengthen the insurance company's rural presence in AP. Through this partnership, the bank will sell Max New York Life's insurance products through a network of 19 branches and 60 cooperative societies in the rural areas of Adilabad district.
5. Improvement in customer service is one of the focus areas for growth for Karnataka circle of SBI. In this regard, the bank is planning to sensitise its frontline staff in the branches by giving special training to them.
6. PNB has announced that all the CBS branch customers with PNB debit card could now have 2 add-on-debit cards for his/her family members, who may be spouse and dependent children not below 18 yrs. The add-on-card holders are also covered under the accident death insurance of Rs 1 lakh. The debit card is issued free-of-cost to the primary cardholders as well as to the add-on-card holders. Insurance cover of Rs 1 lakh is also available free-of-cost.
7. As watchers of the banking scene know, `schedule for compliance' has been redrawn for Basel II. The recent Mid-term Review of Annual Policy for the Year 2006-07 from the RBI conceded that March 31, 2007 as the intended date for adoption of Basel II had to be postponed by two years, `taking into account the state of preparedness of the banking system.' The delay is `a blessing in disguise,' says Mr Amreshwar Seth, Senior Adviser, KPMG. "The extension of the Basel II implementation deadline is unlikely to slow down the process; in fact, it could provide some much-needed time to adequately execute the guidelines.
8. LVB is planning to double its customer base in two years by opening new branches in unrepresented areas and states. It has already commissioned five new branches during the current fiscal. It was awaiting clearances from the RBI for setting up another 25 branches, which would be opened before end of this fiscal.
9. ICICI Bank, is planning a $1 bn overseas syndicated loan. This is the third time in four months that the bank will tap the overseas market for funds.

Tides of 4.12.2006

1. Birla Sun Life Insurance has set a target of Rs 1,000 crs in new business premium by the fiscal-end. The company received Rs 600 crs in new business premium last year. The insurance company hoped to accelerate the growth in premium.
2. LIC's North Zone completed its annual total first premium income (FPI) target on November 15 by bringing in a total FPI of Rs 4,478.28 crs, posting a growth rate of 193%.
3. DCB will issue equity shares up to Rs 225 crs to qualified institutional buyers. This may lead to a dilution of promoter Aga Khan Fund for Economic Development's stake from 29.8% to below 26%.
4. United Bank of India held an interface programme with NGOs, the objective being to increase the existing credit exposure of the bank and assist the target agencies to expand their activities.
5. BOI is striving to enhance its credit exposure to the SME segment to Rs 1,000 crs this fiscal.
6. Since April, it has formulated and implemented 25 cluster schemes, financed about 27,000 new accounts and sanctioned to the tune of Rs 753 crs. It is confident of surpassing the target. It has prioritised 61 clusters for intensive development. It is also willing to modify the rules and evolve schemes to suit customer requirements.
7. RBI employees all over the country will participate in the nationwide strike called by central trade unions on December 14.
8. In order to provide insight into the existing business opportunities available in the various fields such as tourism, IT and industry in Doha and India, the Doha Bank is organising an investor meet in Kochi on November 21.
9. French banking group Societe Generale is looking for fresh Indian partners to build on its consumer credit portfolio in India. The group, which has already acquired 75% in Apeejay Finance, expects the sector to expand rapidly, the footprint of the universal bank in India. Post-acquisition, Societe Generale expects to drive the management of the new entity, which manages over Rs 500 crs in outstanding loans.
10. Nabard has renewed its request to the Centre to allow it to set up a dedicated Rs 25,000 crs fund to provide concessional refinance to co-operative banks and RRBs. It has asked for permission to refinance at least 80% of crop loans extended by cooperative banks and RRBs so that they may provide these loans to farmers at 7% or less.
11. Doha Bank will soon launch an exclusive offshore fund, with Tata Mutual Fund, opening new vistas for investment for NRIs in Qatar.
12. Banks will have to call back around Rs 9,000 crs in loans to stock brokers after the RBI’s proposed norms on banks’ capital market exposure take effect from January 1, 2007. The proposed norms seek to restrict advances against shares from the entire banking system to a single borrower to Rs 20 lakh if the security is held in demat form and to Rs 10 lakh if the security is held in physical form. The ceiling applies to individuals, partnerships and companies.
13. Indian Banks see big business as China opens up banking sector.

Tides of 1.12.2006

1. `SBI Tiny', the no-frills account targeting villagers, has been launched by the SBI , in Medak district of AP. As part of its financial inclusion strategy, officials will help villagers open accounts at their doorstep. The bank had recently launched it on a pilot basis in Mizoram.
2. UTI Bank has rolled out its first priority banking lounge in Pune. The bank would be introducing this facility in four more places in the country by the end of the current fiscal. The lounge was an innovative concept wherein priority banking services would be displayed on an experimental basis. It will be of a boutique banking branch for HNW customers offering a one-stop shop for their banking and investment needs. Earlier, the bank had entered into the wealth management sector and followed it up with priority banking and had recently entered the private banking segment. Other products such as wealth advisory service, credit cards, loans (personal, auto, home etc) would also be offered.
3. BoB proposes to finalise three joint venture partners by the end of this financial year for the credit card, asset management and the life insurance business.
4. BOB received the RBI's permission to open second office in Johannesburg, South Africa. It has also sought permission from the Chinese Banking Regulator to upgrade its representative office in Guangzhou. Currently, the bank has 60 international offices. In addition, the bank also plans to step up its presence in southern India from the current level of 265 branches to 300 branches. These include dedicated SME branches in Tiruppur and Chennai.
5. Dena Bank is expecting a significant fall in the net non-performing assets level in the third quarter of this fiscal.
6. Canara Bank has set a new benchmark, securing the finest pricing by any Indian financial institution in the global debt markets for its $250-mn medium term note (MTN). It got a pricing of 129 bps over the six month LIBOR. But the effective pricing after a fixed to floating rate swap was 125 bps over LIBOR. This was well below the initially targeted price band of 129-131 bps. The bank received an overwhelming response for its MTN issue, the first international capital issue in its 100-year history. It was rated +Baa2+ by Moody's.
7.Kalpataru Grameena Bank has been adjudged the Best Regional Rural Bank for 2005-06.
8. The microfinance sector in India has not reached its full growth even 15 years after its emergence because of slow policy processes. There is a need to evolve uniform regulations and a single regulatory body for the sector and legislate so that all confusions are laid to rest. It is hoped that the Bill on microfinance that is expected to be tabled in the Parliament session opening tomorrow will take care of these issues.
9. RBI must create an enabling environment (rather than setting mandatory farm credit targets and sub-targets) for Rural Financial Institutions to deepen and widen credit outreach covering small/marginal/tenant farmers, share croppers and landless labourers. The World Bank alone committed over $16 bn to these efforts from the mid-1950s to the late 1980s; other donors also have spent substantial amounts. In several countries, such as Brazil, India, Indonesia, Mexico and Sri Lanka, supply-led and directed credit programmes were used extensively to spur agricultural development till the 1990s.

Tides of 30.11.2006

1. RBI has pulled up commercial banks for neglecting various regulatory requirements. It has pointed out that most of the banks do not have comprehensive structures, policies and manuals to address compliance risks. This, however, has not received the required attention of banks, as a number of instances of non-compliance and lack of proper interpretation of regulatory guidelines are being reported in successive RBI inspection reports. In an effort to tone up banks’ compliance, the RBI has come out with draft guidelines. The compliance processes remain weak and compliance officer has not been an effective instrument.
2. Canara Bank, planning to sell stake in its fully owned mutual fund arm in December, is likely to finalise the Netherlands-based Robeco for the proposed joint venture.
3. RBI is understood to have stepped up its surveillance in the government securities market.
4. Much has been written about Grameen Bank ever since Mr Muhammad Yunus and his brainchild concept won this year's Nobel Peace Prize. Not many may know that `gramin banks' have been popular in Karnataka ever since 1976. Gramin banks enjoy a good share of rural banking in the State, measured by several indicators, according to statistics as of March 2005. Gramin's share of rural branches is 53 %. Nearly half of the total rural deposit accounts of nearly 90 lakh are with gramin banks. `Borrowing accounts' number about 22 lakh in rural category; in this, gramin has about 54% share. "Nearly 83 % of their borrowing accounts are in the advances group of less than Rs 25,000.
5. Robust business growth, impressive performance on fee based income and strong showing on core operations highlight the earnings scorecard of banks for the quarter ended September. Re-pricing of loans by about 50 bps in June and August following upward revision in the PLR appears to have improved yields on advances for many banks. While the quarter has proved to be a good one for the banking industry, private sector banks continued to surpass their counterparts in the public sector on several key parameters such as growth in net interest income (NII), fee income and net profits. PSBs, on an average have recorded a YoY growth of about 16% in earnings, while the figure for private sector banks is double at 32%. In terms of containing costs, PSBs have fared better than their counterparts in private sector.
6. The National Rural Health Mission, in collaboration with ICICI Bank, has introduced an e-banking solution for healthcare services in Kerala. It is the first State in the country to implement the bank's `Health I-Check Pay' software that will make fund movements faster and more simple. The software, an integral part of the National Rural Health Mission, will also make it possible to monitor utilisation of funds and provide better transparency in financial transactions in the working of the Health Ministry.
7. You can now go in for a chip - based card without fear of fraud. Unlike the normal plastic cards, the microchip-based card has security features that prevent misuse of cards. The chip is inserted into the sale-point terminals, which validate the card for usage. There is no swiping of the card. The latest to introduce this card in India is the UTI Bank. The bank plans to launch the chip - based card by February 2007.

Tides of 29.11.2006

1. The Gold based Deposit scheme, of Bankers will work as follows: a customer can buy gold by depositing the market price of the metal with the bank. The bank will provide the customer a receipt for physical deposit of gold. The customer can either get the gold in physical form or its value at the prevailing market price anytime after a specified period, say five or 10 years. A customer can keep on depositing funds (in other words, buying gold) at intervals of his convenience and accumulate it for 5-10 years. Interest at a nominal rate will be paid on the deposit. For the customer, it will work like a systematic investment plan. Banks are expected to customise the scheme to make it more customer-friendly. On their part, banks will buy gold futures to hedge against price variations. IBA is expected to submit a proposal to RBI for approval for the scheme.
2. Over 1,500 Citigroup India employees spread across 35 towns and cities will participate as volunteers in various community initiatives in the country on 18.11.2006, as part of Citigroup's global community day initiative.
3. RBI has unveiled draft guidelines on banks’ exposure to capital markets. The guidelines cap a consolidated bank’s aggregate exposure to capital markets at 40% of its consolidated net worth of March 31 in the previous financial year. The revised guidelines will be effective from January 1, 2007. But under the ceiling, the aggregate direct exposure by way of a bank’s investment in capital markets has been capped at 20% of its consolidated net worth. The aggregate stand-alone exposure of a bank to capital markets has been retained at 40% of its net worth.
4. Of the three 100% government owned banks, which were slated to hit the market during the current fiscal, Indian Bank and United Bank of India may delay their plans to launch their IPO.
5. Asian Development Bank has reduced commitment fees for project loans, a key demand of India, as part of the series of enhancements it introduced in the Libor-based loan, ADB’s main lending instrument.
6. Given the non-reliance of the government to external financing to finance domestic debt, India is expected to be less affected by global imbalances.
7. RBI has sought to further tighten the flow of bank funds into the capital market. In a big blow to broking firms and corporates, the central bank’s proposals will reduce access to bank funds against security of equity and equity-linked investments. The entire banking system cannot lend more than Rs 10 lakh for subscribing to shares in an IPO to any single borrower be it an individual, a partnership firm or a company. Any general purpose borrowing from banks by an individual or a corporate against security of equity investments is also proposed to stifled. Any single borrower can borrow from the banking system against security of such investments only up to Rs 10 lakh if the security is held in physical form and only up to Rs 20 lakh if the security is held in demat form.
8. An internal study by the RBI is understood to have found out that most of the foreign exchange inflows into India from NRIs and portfolio investments are emanating from tax-haven countries. The study further aims at trailing the origin of the funds to the tax-haven countries. The findings are part of the overall study by the RBI to track the origin and utility of funds flowing into the country under the broad umbrella of FDI.

Tides of 27.11.2006

1. HDFC has come out with an innovative housing loan scheme for which the finance company will visit the customer at home for three days. Titled `Doorstep Assistance' in 30 minutes, the scheme will be available for customers across the State and also for people in Thirunelveli, Kanyakumari and Tuticorin districts of Tamil Nadu. The interest rate on the loan will be at 9% (floating) compared to the company's usual interest rate of 9.5%. The company has a network of 11 offices in the State and the doorstep assistance will help reach out to customers in about 250 locations in Kerala and the neighbouring districts of Tamil Nadu.
2. PNB, Kerala Zone’s , disbursement under the Special Agricultural Credit Plan for the half-year ended September has risen by 85% over last year. The loans disbursed amounted to Rs 30.73 crs, which is 63% of the annual budget. PNB has seven rural branches in the State. Outstanding retail credit grew by 67% to Rs 565.11 crs from Rs 337.85 crs earlier. Under the bank's Kisan Card Scheme, 3,347 cards have been issued to farmers.
3. Till now banks have not had many options to raise capital. It is here that the recent RBI guidelines, which allow banks to raise capital by issue of Innovative Perpetual Debt Instruments (IPDIs) and debt capital, open the doors for looking at "innovative instruments" to raise further capital.
4. Innovative Perpetual Debt Instruments are eligible to be issued as Tier I capital. It can be issued in rupees or with prior approval in foreign currency. Maximum amount that can be raised is 15 % of Tier 1 capital reduced by intangible assets. As the name suggests, the maturity period is perpetual. The instruments can be issued at fixed or floating rate referenced to a market-determined rupee interest benchmark rate.
5. Debt capital instruments are eligible to be issued as Upper Tier II capital. Maximum amount that can be raised should not exceed Tier 1 capital reduced by intangible assets. The maturity period is minimum of 15 years. The instruments can be issued at fixed or floating rate referenced to a market-determined rupee interest benchmark rate.
6. Dena Bank has signed an agreement with Wipro Infotech for implementing core banking solutions (CBS) and total outsourcing contract worth Rs 304.4 crs. Under this contract, Wipro will implement the centralised and integrated CBS in 850 of Dena Bank's branches over a period of four years. This will cover 92 % of the bank's business.
7. The Indian Railway Finance Corporation plans to raise Rs 500 crs through a bond issue over the next few days. It also plans to raise $200 mn through ECBs in January next year.
8. ICICI Prudential Life Insurance's new business weighted premium has grown 143% in the first half to Rs 1,626 crs (Rs 668 crs). New business weighted premium gives only 10% weightage to single premium.
9. Bankers are trying to moot a gold-based scheme to raise the much-needed long-term deposits. The scheme will be designed to induce people to invest in the yellow metal while simultaneously offering banks a new source of funds.

Tides of 25.11.2006

1. Alarmed by rise in the incidents of bank robbery in Bihar, the state police has warned of penal action if its directive to switch off the mobile phones while entering banks in the state capital is not being strictly adhered to. A decision to ban the use of the mobile phones was taken at a meeting of senior police officials with representatives of various nationalised and private banks. Now closed-circuit cameras would be installed at the main entrance of the banks besides at the cash counters and the strong rooms.
2. ABN Amro Bank, Citigroup Global Markets, Macquarie Bank, Fidelity and Morgan Stanley have picked up a combined 34% stake in Development Credit Bank from the open market.
3. RBI has given Vijaya Bank the green signal for opening 28 new branches & 23 offsite ATMs.
4.The RBI has dispensed with the lock-in period for remittance of sale proceeds of immovable property of NRIs or Persons of Indian Origin from their NRO accounts in India. The remittance of such sale proceeds was subject to a lock-in period of 10 years.
5. Centurion Bank of Punjab (CBoP) has tied up with software services company SAS Institute India Pvt Ltd to strengthen its customer services. The "SAS Banking Intelligence solution suite" will help the bank in customer segmentation, identification of vulnerable customers and prediction of the most likely purchases of the customer.
6. The board of directors of banks will be responsible for ensuring that an appropriate compliance policy is in place to effectively manage compliance risk faced by banks. Compliance includes strict observance of all statutory provisions contained in various legislations and also following the guidelines issued by organisations such as IBA, FEDAI, FIMMDAof India and so on.
7. Indian Bank has ensured that every family in the Union Territory of Puducherry has a bank account. The project has resulted in bringing 1.25 lakh new "no frill'' account holders into the banks' fold. Besides, the bank has provided overdraft facilities to 15,000 people. The project also involves providing health insurance coverage to 2.8-lakh members of SHGs. All the families have been provided with a bank account. Only those families who did not want one are excluded.
8. Karnataka Bank Ltd has enabled its real time gross settlement (RTGS) facility, MoneyQuick, under Internet banking. Customers using the bank's Internet banking facility would be able to transfer funds from their account to their or third party accounts at RTGS-enabled branches of other banks across the country. This facility is provided in tune with the changing demands and preferences of its customers and in pursuit of its endeavour to improve customer satisfaction.
9. With India's economy continuing to grow at 8%, FIIs infusing capital of over $7 billion so far this calendar year and business cycle going strong, it is not surprising to see Corporate India's second quarter results exceeding the market expectations of about 25% growth.
10. Banks reported a strong set of numbers in the September quarter after two relatively dull quarters. Higher yield on advances, fall in bond yields to the tune of about 50 bps and robust growth in non-fund based exposure appear to be the key factors behind banks reporting good set of numbers. Earnings growth has been 16% for PSBs on an average, while private sector banks have notched a growth of 32%. Even on core operations, private sector banks have managed to walk away with a larger pie. This is reflected in the net interest income (NII) growth, which stood at 14% for PSBs on an average and 48% for private sector banks.

Tides of 24.11.2006

1. Banks may lose between Rs 7,200 crs and Rs 9,000 crs as bad assets on housing loans disbursed over the last four years, with the Municipal Corporation of Delhi systematically demolishing illegal property. Delhi witnesses sales of around 25,000 residential properties in a market of about Rs 12,000-15,000 crs. On an average, about 60% property value is financed by banks. There are around 50 banks operating through 2,000 branches in Delhi. The problem has arisen since banks, in a rush to beat rivals, have financed loans without proper documentation. Legally, banks are supposed to release loans after ensuring that title deeds, the form A (map approval), form C (water), form D (electricity) and the form E (completion certificate) issued by the MCD are in place. But most banks and housing finance companies have been financing properties without the form E, and in some cases, the form C and D.
2. The accelerated initiatives by banks to promote micro-finance through the SHGs model has seen impressive results during 2005-06. This has been manifested by the fact that banks extended loans of Rs 4,499 crs to the SHGs during 2005-06, recording a growth of 50% over the previous year. The number of families supported through the SHGs increased by 35% from 24.3 mn as on March 31, 2005 to over 32.9 mn as on March 31, 2006. Meanwhile, total refinance support increased by 10% to Rs 1,068 crs during 2005-06 from Rs 968 crs during the preceding year.
3. ICICI Bank, intends to thrust on the micro-finance area to address rural India’s poverty issues. The bank intends to provide loans to the extent of $10 billion by the year 2010. In the past three years, the bank has been operating in the micro-finance space with over 100 micro finance partners. Over this period, lending has grown from $1.2 mn to 20,000 clients to $522 mn to around 3 mn clients in 2006.
4. SBI will set up ATMs at 11 railway stations in Chhattisgarh for internet banking and sale of monthly tickets and other services to commuters. The stations were yet to be identified. SBI was working on re-orientation of staff to deliver better customer care, besides modernising branches, upgrading technology and setting up more ATMs in Chhattisgarh. The orientation programme for better customer care was necessary to boost business. SBI would be upgrading technology at its branches for speedier service. SBI had 222 branches in the state, of which more than 50% were in rural areas.
5. RBI has imposed some restrictions on the ailing Sangli Bank, including expansion of advances, as the small-size private sector bank’s CAR has fallen to 1.84%
6. RBI has proposed a complete restructuring of the operations of the Deposit Insurance and Credit Guarantee Corporation of India (DICGC).
7. RBI should, by the end of March 2007, allow rupee-denominated external commercial borrowings (ECBs), raise the ceiling on the amount of foreign exchange corporates can remit overseas and liberalise non-resident investment in debt instruments, according to S S Tarapore, former RBI deputy governor and chairman of the Committee on Fuller Capital Account Convertibility. ECBs denominated in rupees but repayable in foreign exchange need to be encouraged so as to diversify the exchange risks for Indian borrowers.

Tides of 23.11.2006

1. i-flex Solutions Ltd and Financial Services Inc. (FSI) have tied up to launch FLEXICUBE as a hosted offering to community banks in the US. FLEXCUBE, the company's flagship offering, will equip community banks to compete with large banks and financial institutions on an equal footing.
2. UBI has launched Union Mitr, a financial education counselling service, available at 51 centres across the country. This service will offer information on products, services, and provide guidance on opening a bank account, information on managing savings, as well as on management of existing debt. It plans to use village knowledge centres, which are attached to rural branches, for this purpose. Financial education requires a highly individualised approach so it is carried through individual counselling at the bank's centres.
3. PNB has launched PNB Arogya Shree to provide health insurance for its 35 mn customers. The new offering is a product of Reliance General that has been tailor-made for PNB customers. The product is unique. The large customer base has helped it in getting the premium amount lowered. It will have additional features and would be marketed through the branches.
4. Former Dy. Governor of RBI and Chairman of the Committee on Fuller Capital Account Convertibility, Mr S.S. Tarapore, has cautioned against the impending transfer of ownership of SBI from the RBI to the Government. An alert Parliament should block the clauses in the SBI Amendment Bill that relates to the transfer of ownership of SBI from the RBI to the Government. The transfer would be a major setback to the credibility of transparency of the financial sector reform process built up so assiduously over the past 15 years.
5. Software Technology Parks of India (STPI) AP, has enlisted the services of Ernst & Young to chart out a strategy to help accelerate the contribution of the burgeoning SME segment of the IT sector. There are about 3,500 SMEs in the IT sector and their contribution is now estimated at about 35% of the country's total exports of about Rs 1,00,000 crs. The STPI would like to help accelerate their output and cover other segments and step up contribution to exports.
6. The Power Ministry has proposed putting in place a set of normative criteria for allotting captive coal block to players in the power sector and having "reasonable" bank guarantees that could be encashed if they fail to achieve certain prescribed milestones in the development of the block.
7. The RBI has restricted NBFC's borrowing limits. They will have to maintain a capital adequacy ratio of 10%. As per the guidelines, all non-deposit taking NBFCs will be able to raise borrowings only up to 10 times their net-owned funds. The new guidelines will change the way the balance sheet of an NBFC is funded.
8. Standard Chartered Bank has launched a customer service initiative through which they can SMS if there is a complaint or need assistance. The sender will receive a personalised call from the bank within 24 hours of sending the SMS. The customer needs to send an SMS to the number 9980033333 with the text "Service." If complaints are not addressed in 24 hours then the bank will credit around Rs 100 to the customer's account. This has been launched as a pilot project in Chennai and would be rolled out nationally early next year. On an average, the bank's call centre receives around 20,000 service related calls a day.

Tides of 22.11.2006

1. Reversing last year's trend, the financial assistance sanctioned and disbursed by the financial institutions in 2005-06, has increased significantly. The asset quality, profits and CAR of the FIs improved during the period. The sanctions by FIs witnessed a rise of about 39% at Rs 27,239 crs and the disbursements rose by about 34% to stand at Rs 20,522 crs. The assets and liabilities during the period, however remained more or less at the same rate as of 2004-05.
2. After software services, India is now also emerging as a major exporter of financial services. In FY06, the earnings in forex were $1.7bn from providing financial services to the rest of the world. From being a net importer of financial services, India, for the first time since 2000, has emerged as a net exporter of financial services. Net inflows on account of financial services aggregated $1,087m in ‘05-06, according to the latest balance of payments figures. Contrast this with the net outflow of $1,626m in ‘00-01.
3. RBI has permitted ICICI Bank to open new branches and set up off-site ATMs. This signifies the lifting of the ban, imposed by the banking regulator, on the branch expansion of a slew of commercial banks involved in the IPO allotment scam. These banks were also fined for their role in the scam. HDFC Bank would soon be allowed to open new branches.
4. The competition for raising resources, including deposits, to meet the burgeoning credit demand has taken a toll on spreads, of the new private sector banks in 2005-06 over 2004-05. The spreads for new private banks dipped to 3.5% from 4.3 % in the previous financial year. For PSBs, spreads improved to 2.9% from 2.8% and for foreign banks, they rose to 4.4% from 4.2%.
5. The country’s top two banks, SBI & ICICI, reported a sharp rise in loan loss provisioning in the second quarter of 2006-07. The provisioning for NPAs rose nearly 11 times for SBI and by over 3 times for ICICI Bank, on slippage in loan accounts, particularly retail. SBI’s provisioning for NPAs was Rs 116 crs in July-September 2006 against Rs 10.7 crs a year earlier, an increase of 981.1%. For ICICI Bank, the provisioning was Rs 380 crs in the second quarter of 2006-07 against Rs 90 crs a year earlier.
6. SBI and Hero Honda have joined hands to help the farmers of Uttar Pradesh and signed a deal in Lucknow for financing two-wheelers for the state’s farmers. The deal envisages SBI financing in the rural areas and attractive cash discounts by the company. Hero Honda is targeting sales of 250,000 two-wheelers in the rural areas in the current financial year and the tie-up is aimed at synergising the marketing and servicing strengths of the two giants.
7. Information Technology holds the key to kick-starting a revolution in banking, said Radha Unni, chief general manager, SBI. She was inaugurating a national conference on `Braving new frontiers in banking,' organised by the ICFAI Business School, Trivandrum. She called for standardisation across banks and appealed to them to take the services to the doorsteps of the customers for financial inclusion.
8. Indian (Indian Airlines) has launched the exclusive, fully-loaded "Indian Platinum Credit Card Master Card'' in association with ICICI Bank. Issued by invitation, initially to senior officials of the Government, the card offers a generous 20 % cash back on airline tickets purchased at full fare levels, together with convenient options of buying tickets at any Indian (Indian Airlines) offices.

Tides of 21.11.2006

1. HSBC India is looking to reach out to new consumer segments through offerings such as its recently launched HSBC Pragati Finance. It has enabled the bank to offer consumer finance to people who have no credit history and are unable to prove their repayment ability, but actually have the ability to repay. This product will help people who have so far had limited access to organised lending.
2. People in India, especially young people, have become more comfortable with borrowing for consumption. However, despite the growth in borrowing for consumption, the level of consumer debt in India is still low.
3. RBI has cautioned banks against near-term market risks arising from a possible abrupt asset portfolio reallocation globally. The source of such risk is the continuing large global financial imbalances.
4. Bank credit to the priority sector increased by 33.7% to touch Rs 5,09,910 crs as on March 31, 2006. In the previous year, such credits increased 40.3% to Rs 3,81,476 crs as on Mar 18, 05. Ag. and housing were the major beneficiaries, which together accounted for more than two-third of incremental priority sector lending in 2005-06. Loans and advances grew by 31.8% during 2005-06 on top of the increase of 33.2% in the previous year. Deposit growth was 17.8% against 16.6%. While PSBs as a group achieved the priority sector target of 40% of net bank credit as on the last Friday of March 06, the sub-targets of 18% of NBC to agriculture sector and 10% of NBC to the weaker sections were not met. Total priority sector advances extended by private sector banks increased by 52.25% in 2005-06. None of the private sector banks could meet the sub-targets for agriculture and weaker sections. Off-balance sheet exposures of SCBs rose sharply by 50% in 2005-06 over and above the increase of 58% in 2004-05.
5. Now with the possibility of sitting at home and accessing the records of all registered companies in the country, as many as 90,000 company records have been viewed over the MCA portal by around 30,000 registered users. This has happened in a span of about two months, after the Ministry of Company Affairs initiated e-filing of company records. The portal now gets 5.8 mn hits per day. The project, which is in partnership with TCS, covers at present 20 Registrar of Companies (ROC), four Regional Directorates and about 53 locations across the country. With this, companies no longer have to go to the ROC office to file their statutory documents, instead they can be filed online.
6. Following a boom in the domestic real estate market, banks’ exposure to sensitive sectors increased sharply to 19% of the total loan book in 2005-06. Lending to sensitive sectors (real estate, capital markets and commodities) increased to Rs 2,86,691 crs during 2005-06, an increase of 75% over Rs 1,63,831 crs recorded last year. The huge increase in the exposure was mainly due to more loans to the real estate market, which constituted 91% of the total loans to sensitive sectors, against 88.7% of the previous year. Lending to real estate rose 82% to Rs 2,60,223 crs in financial year 2005-06.
7. Over 6,000 officers including one CGM in foreign business division have sought an early separation (retirement) from SBI.

Tides of 20.11.2006

1. UTI Bank plans to raise Rs 200 crs with an option to retain over-subscription, through upper tier II unsecured redeemable subordinated debentures. The face value and issue price of one debenture is about Rs 10 lakh. The bonds have been rated "LAA'' by ICRA and "AA (ind)'' by Fitch. The coupon rate is 9.35 % payable annually. Issue is open from Nov13-22.
2. SBI Card, a joint venture between SBI and GE Money, has crossed the three-mn cardholders mark. It has added one mn cardholders in just 10 months. SBI Card is planning to increase its sales force from 5,000 to 7,000 by December 2006 and expand in Tier II cities.
3.Canara Bank has launched a deposit scheme for children up to 12 years, called `SB Canchamp Deposit Scheme'.It allows children to start a deposit with a min amount of Rs 100. On opening the account, the depositor will get a savings box and a personal photo folder-cum-memoir. The child will also get an education loan eligibility card. Using the card, the child can avail education loan once he or she completes HSC or plus two.
4. ICICI Bank has introduced a new product `NRI SmartSave Deposits', a fixed deposit scheme for NRIs. Under this scheme, a customer who has a fixed deposit in any bank's overseas branch can get the amount transferred to ICICI Bank in India on maturity. The bank will settle all the paper work. Even after the amount is transferred to India, the deposit will continue to remain on NRE/NRO savings account, said the release. The bank is also offering free international credit card insurance and free personal accident insurance with the scheme.
5. Godrej Aadhaar, the agri services and rural retail initiative of Godrej Agrovet, has tied up with Western Union Money Transfer to provide money transfer facilities at the rural hubs.
6. Rabo India Finance Pvt Ltd, a wholly-owned subsidiary of Rabobank International, has become a public limited company. The name of Rabo India has been changed to Rabo India Finance Ltd. The conversion from private to public will enable Rabo to list its debt securities (non-convertible debentures) on the wholesale debt market segment of the NSE. It provides customised solutions in food and agri business, telecom, media and information technology, life sciences, corporate finance, renewable energy and carbon credits. It offers fund and fee-based products and services in India drawing on its local resources as well as on Rabobank's global network.
7. Tata Industries Ltd, one of the two holding companies of the Tata Group, is in informal talks with the RBI to let the group into `banking infrastructure'. The infrastructure provision the Tatas had in mind, was `money-boxes'. These boxes could be (owned by the Tatas) put up at, say, shopping malls. The shopkeepers could deposit the day's cash collection into the box. The machine would count the money, just as an ATM does, and the amount would be instantaneously credited to their accounts. Tatas were looking to collaborate with the IIT Madras, for developing low-cost ATMs and to produce the money-boxes at a price of about Rs 3 lakh a piece.
8. HDFC has announced the launch of its operations in London. The London office will provide advisory services on housing finance and property acquisition in India.
9. Retail loans have surged by 40.9% in fiscal 2005-06, which was higher than the overall credit growth of 31%, according to the RBI's report on Trend and Progress of Banking in India.
10. The off-balance sheet exposures of the banking system is concentrated in just 15 banks, most of which are foreign banks. These banks are particularly active in the derivatives segment.

Tides of 18.11.2006

1. UTI Bank plans to raise Rs 200 crs with an option to retain over-subscription, through upper tier II unsecured redeemable subordinated debentures. The face value and issue price of one debenture is about Rs 10 lakh. The bonds have been rated "LAA'' by ICRA and "AA (ind)'' by Fitch. The coupon rate is 9.35 % payable annually. Issue is open from Nov13-22.
2. SBI Card, a joint venture between SBI and GE Money, has crossed the three-mn cardholders mark. It has added one mn cardholders in just 10 months. SBI Card is planning to increase its sales force from 5,000 to 7,000 by December 2006 and expand in Tier II cities.
3.Canara Bank has launched a deposit scheme for children up to 12 years, called `SB Canchamp Deposit Scheme'.It allows children to start a deposit with a min amount of Rs 100. On opening the account, the depositor will get a savings box and a personal photo folder-cum-memoir. The child will also get an education loan eligibility card. Using the card, the child can avail education loan once he or she completes HSC or plus two.
4. ICICI Bank has introduced a new product `NRI SmartSave Deposits', a fixed deposit scheme for NRIs. Under this scheme, a customer who has a fixed deposit in any bank's overseas branch can get the amount transferred to ICICI Bank in India on maturity. The bank will settle all the paper work. Even after the amount is transferred to India, the deposit will continue to remain on NRE/NRO savings account, said the release. The bank is also offering free international credit card insurance and free personal accident insurance with the scheme.
5. Godrej Aadhaar, the agri services and rural retail initiative of Godrej Agrovet, has tied up with Western Union Money Transfer to provide money transfer facilities at the rural hubs.
6. Rabo India Finance Pvt Ltd, a wholly-owned subsidiary of Rabobank International, has become a public limited company. The name of Rabo India has been changed to Rabo India Finance Ltd. The conversion from private to public will enable Rabo to list its debt securities (non-convertible debentures) on the wholesale debt market segment of the NSE. It provides customised solutions in food and agri business, telecom, media and information technology, life sciences, corporate finance, renewable energy and carbon credits. It offers fund and fee-based products and services in India drawing on its local resources as well as on Rabobank's global network.
7. Tata Industries Ltd, one of the two holding companies of the Tata Group, is in informal talks with the RBI to let the group into `banking infrastructure'. The infrastructure provision the Tatas had in mind, was `money-boxes'. These boxes could be (owned by the Tatas) put up at, say, shopping malls. The shopkeepers could deposit the day's cash collection into the box. The machine would count the money, just as an ATM does, and the amount would be instantaneously credited to their accounts. Tatas were looking to collaborate with the IIT Madras, for developing low-cost ATMs and to produce the money-boxes at a price of about Rs 3 lakh a piece.
8. HDFC has announced the launch of its operations in London. The London office will provide advisory services on housing finance and property acquisition in India.
9. Retail loans have surged by 40.9% in fiscal 2005-06, which was higher than the overall credit growth of 31%, according to the RBI's report on Trend and Progress of Banking in India.
10. The off-balance sheet exposures of the banking system is concentrated in just 15 banks, most of which are foreign banks. These banks are particularly active in the derivatives segment.

Tides of 17.11.2006

1. Indian Bank may tap the capital market with an IPO sometime in the first quarter of 2007. It has already taken up a capital rejig to strengthen its balance sheet ahead of the planned IPO next year. 2 new products of the bank - SB Platinum and Premium Current Account, have been introduced. These two offerings, which come with auto sweep facility, transfer the funds in savings bank or current account (over a certain threshold balance) to fixed deposits that earn higher interest for the customer. SB Platinum has a host of add-ons such as life-insurance cover and personal accident insurance cover, free ATM-cum-Debit card, and at par demand drafts . Similarily, the Premium Current Account has features such as ATM-cum-Global debit card and at par demand drafts. Other services such as phone banking, mobile banking, Internet banking would also be available.
2. Chief economic advisor Ashok Lahiri has said that size, credit outreach, technology and customer service are key challenges for Indian banks.He pointed out that except for the SBI, no Indian bank features in the top 100 list of global banking biggies at the seminar titled Global Banking: Emerging Challenges and Opportunity.
3. Development Credit Bank ,which got listed last month, plans to further increase its net worth to Rs 500 crs from around Rs 350 crs through more capital issuances. The fresh floats will also help dilute the stake of Aga Khan Fund for Economic Development, the promoter, from over 31% to within the RBI permitted 10%. RBI has asked DCB to reduce AKFED’s stake to the maximum permitted, by March 31, 2007.
4. RBI would consider adopting some practices followed by the central bank of Mexico, including elimination of commission on inter-bank transactions. Elimination of commission on inter-bank transaction would lead to an end to charges levied for certain services.
5. SBI is drawing up a retail and agricultural banking strategy to reclaim lost market share. Its market share in total assets fell to nearly 17% from over 19% in 2006-07, as private and foreign banks gained on the back of a sizzling growth in retail loans. ICICI’s share in banking assets jumped to over 9% last year from over 7% a year earlier. SBI proposes to carve out retail and agricultural banking as separate strategic focus areas. Retail, for the time being will be a focus area and could be converted into a strategic business unit depending on its performance later.
6. Standard Chartered Bank has launched its NRI Swagat account, which addresses specific banking requirements of NRIs with roots in Kerala and Punjab. The account comes in two variants - one targeting NRIs/PIOs with their origins in Kerala and the other for NRIs with their roots in Punjab. This product has the regular features of a NRE savings account. Both the principal and interest can be remitted overseas without any limitations and no tax deduction at source. The NRI Swagat account also allows unlimited free cash withdrawals from the account through VISA ATMs across the globe.
7. IDFC has announced the purchase of 8.71% equity in ARCIL for a consideration of Rs 57.46 crs. Arcil, India's first asset restructuring company, is sponsored by SBI, ICICI Bank, IDBI and PNB. IDFC has subscribed to the un-subscribed portion of the rights issue offer by Arcil, which closed last month. The infrastructure finance company will be paying Rs 30 per share.