Tides of 26.03.2007

1. With corporates on a roll, India’s importance for global banks has grown manifold. India is now the 10th largest profit contributor for Europe’s most-valuable bank HSBC in ’06 up from No. 16 in ’05. Though for smaller multinationals such as Standard Chartered India has always been a significant market it is gaining significance among big players as well. HSBC India reported a growth of 85% in the profit before tax to $393 mn (Rs 1,739 crs) compared to $212 mn (Rs 938 crs) in 2005. India has reported the highest growth in organic profits among emerging markets like Mexico, Middle East and Brazil where profits grew 9%, 25% and 30% respectively. China has reported a growth of 112% to $708 mn.

2. Syndicate Bank has relaunched its oldest deposit scheme, Pigmy, with many new features. The bank has named it as Pigmy Plus 2007. It will also continue the earlier scheme as Pigmy 1928. It hopes that Pigmy Plus 2007 will help to shore up core deposit base of the bank. It is aiming at a deposit of at least Rs 2,000 crs annually through both the schemes. The bank has been collecting an average Rs 1,000 crs through the earlier pigmy deposit scheme.

3. South Indian Bank implemented the core banking solution (CBS) in all 475 branches in the country. The bank has used the banking software of Infosys — Finacle — as its CBS. Its other CBS partners were Wipro and HCL.

4. The total demand for micro-credit in India is pegged at Rs 3.6 lakh crore as against Rs 20,000 crs the microfinance institutions offered at present, according to Dr Vikram Akula, Chief Executive Officer of SKS Microfinance. The potential to be tapped was huge. There were 15-crore poor households in the country. The average credit needs for a household were estimated at Rs 30,000. Even if one puts the inaccessible and unqualified households aside, the potential size would be Rs 3,40,000 crs.At present, most of this credit need was being attended to by local moneylenders and other informal sources.

5. Ernakulam has attained the status of 100% banking habit district and this is the second district in Kerala to attain the distinction, the first being Palakkad. The State PWD Minister, Mr T.U. Kuruvila, said that the banks should make loans affordable to common men by simplifying security norms and provide loans on personal security. Accounts alone could not serve the poor, affordable short-term loans should be provided. Scheduled banks helped society from exploitations of the private banks in the country.

6. In a significant move to help the farmers of Uttar Pradesh, the SBI and Nabard have joined hands to establish a “Farmers’ Club”. The club aims at enhancing the bargaining power of the farmers and artisans besides reaching out to the rural masses.

7. The International Monetary Fund (IMF) has advised the RBI to continue with its monetary tightening policy to control inflation which remains way above the central bank’s comfort level of 5-5.5 %.

8. The past four years have seen the vehicle finance market grow two and a half times, with rising income levels and easy availability of finance driving the demand for cars and rapid economic growth raising the sales of commercial vehicles.The total outstanding loans are likely to touch Rs 1,10,000 crs at the end of 2006-07 this month, up nearly 27 % from Rs 86,870 crs at the end of March 2006.