1.The `Dakiya', the Indian postman, is set to become a banker. The postman will now not only be the harbinger of good and bad news, but also offer loans, deposits and credit cards. For now, a number of banks are signing agreements with India Post to market their products. However, in the future, India Post could soon be making the transition to a banking entity.
2. The Economic Survey, released on the eve of the Budget, spoke of the high rate of credit growth. While the Budget does not spell out the precise steps to rein-in credit, the latent riskiness of certain sectors has been recognised by mentioning that regulations will be brought into to govern "Mortgage Guarantee" companies. Internationally, such companies offer credit enhancement opportunities to lenders and, thus, in a sense increase the reach of credit products. It remains to be seen whether the legislation recognises guarantees under Basel II norms to enable commercial banks look into such products seriously.
3. Financial inclusion as a strategic initiative seems to loom over the banking sector. Thus, the Regional Rural Banks, after many attempts to push them to the fore of commercial banking and leverage their reach, have at last been pushed to the vanguard. With distribution of financial services in the rural areas being touted as the next big wave, there could be more competition for banks and NBFCs (non-banking financial companies) operating in the hinterland. The Government is now thinking of allowing the RRBs to provide consumer banking products and not necessarily keep them concentrated on priority sector lending. The Budget also states that the SARFESI Act shall cover the RRBs, thus allowing for speedy recovery of bad loans. Perhaps recognising that many NRIs hail from the hinterland, the RRBs would now be allowed to accept NRE and FCNR accounts.
4. The stock of Indian Bank made its debut on a volatile note on the exchanges; on the BSE at a 15.38% premium at Rs 105 against its issue price of Rs 91. The stock reached a high of Rs 105 and a low of Rs 77 before closing at Rs 98.30. On the NSE, the company made its debut at a 3.18 % premium at Rs 93.90. The stock closed at Rs 98.35 after reaching a high of Rs 100.25 and a low of Rs 75. The total traded quantity of shares was 3,08,10,511 and 5,48,02,922 on the BSE and NSE respectively. The Indian Bank IPO had received strong response from investors, especially FIIs, when it hit the capital market in the first week of February and was subscribed by over 32 times. Through the issue, the bank mopped up around Rs 782 crore at the issue price of Rs 91 per share.
5. Banks will not be required to maintain average Cash Reserve Ratio of 3% on credit balances in Asian Clearing Union (US dollar) accounts, transactions in Collateralised Borrowing and Lending Obligation (CBLO) with Clearing Corporation of India and, demand and time liabilities in respect of their Offshore Banking Units (OBUs). Recently, the RBI decided to pay interest to all commercial banks on the eligible CRR balances.
6. The Israel-based Aladdin Knowledge Systems said PNB has selected Aladdin eToken to protect sensitive bank and customer data accessed by its employees. The company has deployed 2,500 eToken smart card devices since Nov 2006, with another 5,500 slated to be deployed in the second quarter of 2007. Aladdin eToken is a portable USB device smaller than a house key that generates and provides secure storage for passwords, digital certificates, secure authentication, digital signing and encryption.
7. The United Forum of Bank Unions has called for a national three-day strike from March 28-30, demanding that the one-lakh job vacancies in various banks be filled, enforce pension schemes for employees, provide jobs for dependents and call off outsourcing of jobs from the banking sector. In support of these demands, various employees and officers belonging to the union staged protest demonstrations at select centres across the country.
8. The first general council meeting of the OIC (Oriental Bank of Commerce, Indian Bank, Corporation Bank) alliance was held in Bangalore on Feb 24-25. CMDs, EDs and General Managers of three banks attended the two-day meeting. The purpose of the meet was to generate synergies at the operation level, identify newer areas of collaboration and to generate newer ideas for customer value addition. On the first day of the conclave, Dr Blaine Lee, Senior Consultant, Franklin Covey, US, addressed the council members on `Leadership challenges and integration of processes for the alliance.' Mr Leo Puri, Director of McKinsey, spoke on the ideal business model for the alliance.
9. Madras School of Economics received a grant of Rs 30 lakh from Oriental Bank of Commerce. The funds would be used for building infrastructure, essentially for building a library and a computer lab, and creating a corpus for meeting the institution's running expenses. MSE runs two 2-year post-graduate courses in Economics and Financial Economics. The latter was set up with the help of a Rs 1cr grant received recently from Canara Bank. The institution today has 63 students and 12 professors.
10. Public sector non-life insurers have sought the help of their banking counterparts for launching their initial public offerings during the next financial year. Banks' help is required for valuation purposes. Two weeks ago, the Group of Ministers had indicated that the Government was willing to dilute stakes in the PSU insurers to 74% without any divestment. Currently, the Government holds the entire paid-up equity capital amounting to Rs 450 crs in the four non-life insurance companies, after General Insurance Corporation transferred its holdings in 2004.
11. The Chairman of Catholic Syrian Bank, Mr N.R. Achan, has resigned from the bank. The Director Board that met at Thrissur accepted his resignation. Mr Achan's tenure as Chairman was to end in June. Poor health was cited as the reason for the resignation.
2. The Economic Survey, released on the eve of the Budget, spoke of the high rate of credit growth. While the Budget does not spell out the precise steps to rein-in credit, the latent riskiness of certain sectors has been recognised by mentioning that regulations will be brought into to govern "Mortgage Guarantee" companies. Internationally, such companies offer credit enhancement opportunities to lenders and, thus, in a sense increase the reach of credit products. It remains to be seen whether the legislation recognises guarantees under Basel II norms to enable commercial banks look into such products seriously.
3. Financial inclusion as a strategic initiative seems to loom over the banking sector. Thus, the Regional Rural Banks, after many attempts to push them to the fore of commercial banking and leverage their reach, have at last been pushed to the vanguard. With distribution of financial services in the rural areas being touted as the next big wave, there could be more competition for banks and NBFCs (non-banking financial companies) operating in the hinterland. The Government is now thinking of allowing the RRBs to provide consumer banking products and not necessarily keep them concentrated on priority sector lending. The Budget also states that the SARFESI Act shall cover the RRBs, thus allowing for speedy recovery of bad loans. Perhaps recognising that many NRIs hail from the hinterland, the RRBs would now be allowed to accept NRE and FCNR accounts.
4. The stock of Indian Bank made its debut on a volatile note on the exchanges; on the BSE at a 15.38% premium at Rs 105 against its issue price of Rs 91. The stock reached a high of Rs 105 and a low of Rs 77 before closing at Rs 98.30. On the NSE, the company made its debut at a 3.18 % premium at Rs 93.90. The stock closed at Rs 98.35 after reaching a high of Rs 100.25 and a low of Rs 75. The total traded quantity of shares was 3,08,10,511 and 5,48,02,922 on the BSE and NSE respectively. The Indian Bank IPO had received strong response from investors, especially FIIs, when it hit the capital market in the first week of February and was subscribed by over 32 times. Through the issue, the bank mopped up around Rs 782 crore at the issue price of Rs 91 per share.
5. Banks will not be required to maintain average Cash Reserve Ratio of 3% on credit balances in Asian Clearing Union (US dollar) accounts, transactions in Collateralised Borrowing and Lending Obligation (CBLO) with Clearing Corporation of India and, demand and time liabilities in respect of their Offshore Banking Units (OBUs). Recently, the RBI decided to pay interest to all commercial banks on the eligible CRR balances.
6. The Israel-based Aladdin Knowledge Systems said PNB has selected Aladdin eToken to protect sensitive bank and customer data accessed by its employees. The company has deployed 2,500 eToken smart card devices since Nov 2006, with another 5,500 slated to be deployed in the second quarter of 2007. Aladdin eToken is a portable USB device smaller than a house key that generates and provides secure storage for passwords, digital certificates, secure authentication, digital signing and encryption.
7. The United Forum of Bank Unions has called for a national three-day strike from March 28-30, demanding that the one-lakh job vacancies in various banks be filled, enforce pension schemes for employees, provide jobs for dependents and call off outsourcing of jobs from the banking sector. In support of these demands, various employees and officers belonging to the union staged protest demonstrations at select centres across the country.
8. The first general council meeting of the OIC (Oriental Bank of Commerce, Indian Bank, Corporation Bank) alliance was held in Bangalore on Feb 24-25. CMDs, EDs and General Managers of three banks attended the two-day meeting. The purpose of the meet was to generate synergies at the operation level, identify newer areas of collaboration and to generate newer ideas for customer value addition. On the first day of the conclave, Dr Blaine Lee, Senior Consultant, Franklin Covey, US, addressed the council members on `Leadership challenges and integration of processes for the alliance.' Mr Leo Puri, Director of McKinsey, spoke on the ideal business model for the alliance.
9. Madras School of Economics received a grant of Rs 30 lakh from Oriental Bank of Commerce. The funds would be used for building infrastructure, essentially for building a library and a computer lab, and creating a corpus for meeting the institution's running expenses. MSE runs two 2-year post-graduate courses in Economics and Financial Economics. The latter was set up with the help of a Rs 1cr grant received recently from Canara Bank. The institution today has 63 students and 12 professors.
10. Public sector non-life insurers have sought the help of their banking counterparts for launching their initial public offerings during the next financial year. Banks' help is required for valuation purposes. Two weeks ago, the Group of Ministers had indicated that the Government was willing to dilute stakes in the PSU insurers to 74% without any divestment. Currently, the Government holds the entire paid-up equity capital amounting to Rs 450 crs in the four non-life insurance companies, after General Insurance Corporation transferred its holdings in 2004.
11. The Chairman of Catholic Syrian Bank, Mr N.R. Achan, has resigned from the bank. The Director Board that met at Thrissur accepted his resignation. Mr Achan's tenure as Chairman was to end in June. Poor health was cited as the reason for the resignation.
