1. PNB expects its latest move to offer real-time gross settlement (RTGS) facility online to its customers to boost turnover. The additional turnover would help make up for the loss in "float" that is expected on account of the new IT initiative.
2. Speculation is rife about whether the RBI will further tighten credit and increase rates in its forthcoming policy review. The political apparatus, on the contrary, would not like to risk a slowdown in credit disbursement or its cost. Hopefully, Dr Reddy and Mr Chidambaram will resolve this conundrum without treading on each other's toes.
3. State Bank of Bikaner & Jaipur (SBBJ) hopes to touch a business volume target of Rs 50,000 crore before March. It has added nearly Rs 18,000crs business (deposits and advances) in the past 2years.
4. PNB held a customer meet and customers from all sectors of society from Ernakulam city branches and places like Aluva, Tripunithura and Angamaly attended the meeting. The total business of the bank as on Dec 31, 2006 crossed Rs 2,20,000 crs. It has also taken lot of IT initiatives for providing best services to the customers.
5. A team from Air India will be going to Washington soon to formalise documentation for availing itself of a $6-bn loan from the US Exim Bank for purchase of Boeing aircraft. The team will work on preparing all operative documents for Air India and Air India Express including the master lease agreement that would see the aircraft being leased to a Special Purpose Vehicle from which they would join the respective airlines. The loan constitutes about 85% of the cost of the aircraft with the airline tying up the rest of finances from commercial banks.
6. The World Bank’s International Finance Corporation (IFC) has pumped in about $ 300 mn into India between July and December 2006, and will invest a similar amount during the next 6 months. As against the $ 410 mn invested in India for the year ended June 30, 2006, IFC is planning to increase its exposure to India to around $600 mn this year. Over 70% of its exposure will be through the debt route and the rest through equity stakes in Indian companies. The financial sector accounted for the largest chunk of IFC’s exposure in the first half of our financial year, which is from July to December. The biggest chunk of $150 mn went into ICICI Bank’s tier-II bond issue announced in October. IFC put another $100 mn in HDFC Bank’s tier-II bond issue.
7. Private and foreign banks are now checking out lifestyle and entertainment freebies to woo high net worth individuals. UTI Bank, for instance, has set up two branches to provide priority customers a host of privileges to make their non-banking business activities a fulfilling experience. It offers business lounges and conference halls so that its HNI clients can organise exhibitions and other cultural activities at no extra cost. The bank recently got five licences to set up exclusive priority banking branches. Citibank, HSBC and StanChart Bank, too, are providing lifestyle privileges like invitations to fashion shows, art exhibitions, plays and movies. Also on offer is a range of shopping, dining and travel privileges. On similar lines, ICICI Bank recently hosted a golf event in Mumbai, where over 1,400 golfers from 17 cities, all high net worth clients of the bank’s private banking division, met in the largest invitational corporate golf event in India. The series had kicked off in Jaipur in Nov 2006 and was followed by similar events in 10 other cities.
8. Swiss major UBS Global Asset Management has acquired StanChart Asset Management Company for Rs 530 crs. As of Dec 2006, StanChart AMC’s assets under management were pegged at Rs 12, 628 crs.
9. Even 18 months after the finance ministry allowed external commercial borrowing (ECB) in realty projects involving integrated townships of 25 acres or 50,000 sq m, the RBI has not yet notified it. According to RBI sources, the central bank wants the government to first straighten its foreign investment policy on real estate before letting companies raise ECBs for realty. Also, the bank feels low-cost ECBs could fuel a further rise in real estate prices and make the market more volatile.
10. The government’s new performance-based remuneration package for PSBchiefs and executive directors will earn them Rs 8 lakh a year if they achieve 100% of the target specified in their statement of intent (SoI). The SoI indicates the target for profits and growth in credit and deposits, among other things. While the bank board sets its own annual performance target, the SoI has to be approved by the finance ministry. At present, state-owned bank CMDs and EDs get Rs 4-6 lakh a year depending on the size of the bank. If the bank achieves only 80% of the target set for the year, the brass will be entitled to an incentive of Rs 7 lakh, while 70% achievement will earn them Rs 6 lakh.
11. UTI Bank will open by March a branch each in Hong Kong and Dubai. It has a branch now in Singapore and a representative office in Shanghai. It has received RBI nod for setting up an asset management outfit.
