Tides of 28.03.2007

1. Corporation Bank has declared an interim dividend of 40% for 2006-07. It said April 10 has been fixed as the record date for the purpose of payment of interim dividend.

2. A bank job was seen as the passport to safety and security in an uncertain world. Naturally, once you got into a bank job, you stayed with it till retirement. That's history. Bankers, even those at lower levels, are moving places. And it is happening across banks. Old private banks that were relatively insulated from this phenomenon till recently are now facing this new challenge. Banks such as Lakshmi Vilas Bank, Karur Vysya Bank and City Union Bank among others have been seeing more exits in their middle and lower cadre than what they saw a couple of years ago. This is clearly seen from the increased number of job interviews being conducted by these banks. Local bank officials said they were losing people to new generation banks such as ICICI Bank, HDFC Bank, UTI Bank, among others.

3. To facilitate Government transactions and meet the probable rush of taxpayers by March 31, RBI has taken the following steps. All the regional offices of RBI and branches of agency banks conducting Government business will extend the banking hours and keep their counters open from March 26 to March 31 to facilitate receipt of taxes. Further, these offices will keep their counters open on March 31, even if it is declared a holiday and conduct transactions.

4. Union Bank of India has launched its first centralised processing centre for retail, in South India at Saifabad in Hyderabad. It has identified Hyderabad, Bangalore, Ernakulam and Chennai for the centre. Hyderabad has now come up with one and in the rest of the cities, the centre would be ready in the first week of April. The objective of this centre was quick disbursal of loans for retail products. The centre is expected to receive, on an average, 200 loan application forms on any working day. This single-window clearance would help sanction loan fast in 48 hours particularly to reduce housing loan sanction turnaround time, he said. On the very first day of inauguration it had sanctioned and disbursed loans worth Rs 7.49 crs for various retails products, which include home loan, personal loan, two and four-wheelers.

5. The All Indian Bank Officers Association (AIBOA) has decided to launch action programmes in the country for regulated working hours. The bank employees, especially officers, are experiencing massive work pressure and there is no system of regulated working hours for them since the initiation of economic reforms in the country. This phenomenon, coupled with non-recruitment of staff, has forced the bank officers movement to fight for regulated working hours.

6. For depositors of several co-operative banks that have been liquidated, the wait for return of their deposits seems an indefinite one. Although the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides a cover of up to Rs 1 lakh for every depositor of a bank that is being liquidated, the depositors have not received any relief yet. This is because the liquidators have not provided the insurer the required details. The total deposits stuck with these cooperative banks are estimated at Rs 400 crs.

7. Vijaya Bank’s plans to acquire a bank may materialise by 2009. The bank is looking at acquiring a bank with network in the western or northern parts of the country as it aims at strengthening its position in these regions. The bank is not yet to set its eyes on any bank. It could be a public sector bank or even a private bank. Vijaya Bank, with 962 branches, is looking at strengthening its position in the western and northern parts of India and for that the bank is planning to acquire an existing bank.

8. It could be a major jolt for cooperative banks in the country. The Bombay High Court has ordered that the recovery certificates issued by the joint registrar of cooperative societies under section 101 of the Maharashtra Co-operative Societies Act cannot be considered as a decree of a civil court and hence cannot be executed through a court. The judgment was passed in a case filed by Greater Mumbai Cooperative Bank against Satguru Construction Company and its director Gopal Khetan and Vijay Khetan. Early this year, the high court had issued arrest warrant against the directors for non-payment of dues to the tune of Rs 80 lakh. Satguru Construction had challenged the issue of the warrant.

9. Most public sector banks are anticipating a much slower growth in net profit in the fourth quarter of 2006-07. A year-on-year increase of 10% in net profit is expected as higher provisioning, particularly on standard loans to sensitive sectors such as real estate and capital market, would negate most of the gain on account of expansion of loan portfolios. RBI had doubled the provisioning requirement on standard loans to capital market, real estate, personal loans and credit card receivables to 2% in its third quarter review. Banks would be required to make an additional provisioning of Rs 2,500 crs on loans to sensitive sectors, totalling around Rs 2,50,000 crs.

10. The Financial Express unveils the much-awaited line-up of India’s Best Banks for 2005-06. An annual and rigorous number-crunching exercise undertaken with Ernst & Young (E&Y), this year’s rankings feature some of the sector’s biggest names. So, while Canara Bank, Corporation Bank, and Indian Overseas Bank are the top three among 28 public sector banks, ICICI Bank, Yes Bank and HDFC Bank head the list of seven new generation private sector banks. Karur Vysya Bank, Federal Bank and Karnataka Bank are toppers among 19 old private sector banks and Citibank, Bank of America and HSBC lead the rest among ten foreign banks. The survey excludes banks with five or less branches either in 2004-05 or 2005-06.