1. PSBs enjoy a unique legal status by virtue of an Act of Parliament, The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980.Banks are neither incorporated nor registered under the Companies Act, 1956 as they are corresponding new entities of banks that were registered under the Companies Act, before nationalisation. The Banking Companies Act provides for a mechanism through which a bank's board of directors is appointed, nominated and elected from various constituents of shareholders.Section 9(3) of the Banking Companies Act, amended in 1994, provides for:
(a) not more than two whole-time directors, to be appointed by the Central Government after consultation with the RBI ,
(b) one director who is an official of the Central Government,
(c) one director who is an officer of the RBI, to be nominated by the Centre on the recommendations of the RBI,
(d) not more than two directors to be nominated by the Centre from SEBI, Nabard or public financial institutions specified from time to time under Section 4-A of the Companies Act and other institutions established or constituted by or under any Central Act or incorporated under the Companies Act and having not less than 51% paid-up share capital held or controlled by the Central Government,
(e) one director from among the workmen,
(f) one director from among the non-workmen,
(g) one director who is a chartered accountant with not less than 15 years' experience,
(h) not more than six directors to be nominated by the Centre, subject to Section 9(3). Clause (i), which says that where the capital issued by the bank is (1) not more than 20 per cent of the total paid-up capital, there need be not more than two directors, (2) more than 20 per cent but not more than 40 per cent of the total paid-up capital, not more than four directors, and (3) more than 40% of the total paid-up capital, not more than six directors to be elected by the shareholders, other than the Central Government from among themselves.
2. Buoyed by strong growth in fee income and improvement in net interest margin, UTI Bank has posted a 39.65% growth in net profit to Rs 211.89 crs for the fourth quarter ending March 31, 2007, against Rs 151.73 crs for the corresponding quarter of the previous year.The rise in net profit was mainly because it could increase the share of demand deposits by 40%, which helped it to maintain the cost of rising interest rates and pass on the burden of rising interest rates to the customers. This helped it to maintain its net interest margin.
3. In a bid to de-centralise operations further, the South Indian Bank opened its 12th regional office at Palakkad in Kerala. The need for the new regional office emerged from the phenomenal growth of the bank as well as the need to provide faster service to its increasing clients. With the support of the valued clients and cooperation of over 4,000 members of staff, the bank could achieve what was planned at the beginning of the last fiscal - Rs 20,000 crs in total business, 475 branches in 23 states and union territories, 175 ATMs and implementation of 100% core banking solutions in all its branches and offices.
4. Indian Overseas Bank has secured the RBI's approval for starting a financial services subsidiary. IOB would invest Rs 50 crs in IOB Financial Services Ltd, the company that will be set up to provide services such as stock broking, depository participant, wealth management, distribution of third-party financial products and, at a later stage, investment banking.
5. Corporation Bank is foraying into the sale of 20 gm gold coin (plain make) on the occasion of this Akshaya Tritya. The pricing of the coins is on a daily basis. At present, the bank is selling gold coins of 2 gm, 5 gm, 8 gm and 50 gm.The 2 gm and 5 gm coins are basically positioned as personal gift items to family and friends, and the 8 gm coins are sought to be marketed as milestone mark amongst corporates and also as a business achievement incentive.The 50 gm gold coins, along with newly launched 20 gm gold coins, are positioned as an investment option to HNIs (50 gm) and upper middle class (20 gm).
6. Oriental Bank of Commerce has signed an MoU with India Post to extend rural credit in Chandrapur and Warora districts in Maharashtra; and Mapusa, Vasco and Vadgaon districts in Goa.In the pilot project, the bank will provide short-term consumption credit worth Rs 20,000 per beneficiary. The loans will be collateral-free and not require a guarantee. The repayment period will be up to two years. Post-offices will identify prospective borrowers, assist in the filling up of loan application forms and forward them to the bank branch concerned for disbursement. The bank will pay a commission of Rs 600 per loan to India Post and also decide on the status of the loans.
7. Thiruvananthapuram district has recorded a credit-deposit (C-D) ratio of 76% at the end of the calendar year 2006, which is much high above the State average.
8. The Ministry of Finance has ruled out any immediate plans for a merger of four associate banks of the State Bank of India with the parent bank.There was no such proposal pending before the Government or SBI at present. Speculation of a possible merger of the banks has met with stiff resistance from the SBI staff.
9. To facilitate easy exchange of coins, the RBI is organising coin melas in Hyderabad. The exchange of coins facility will be available to the general public at Rythu Bazars in Yerragadda on April 17, in Alwal on April 18 and in Dilsukhnagar on April 19, between 11 a.m. and 3.30 p.m. The RBI is also making arrangements to distribute coins through select branches of commercial banks.
10. UTI Bank's board has not decided on a new chairman and managing director for the bank.The RBI had denied approval for the re-appointment of Dr P.J. Nayak, CMD, whose term ends on July 31.RBI has proposed a split in the office of Chairman and Managing Director in line with the recommendations of the Dr Ganguly Group Report on Corporate Governance. The RBI has sought a revised proposal from the bank on whether Mr Nayak should be reappointed either as Chairman or as Managing Director.
Mr Nayak has informed the RBI and the Remuneration and Nomination Committee of the board of the bank that it would not be possible for him to function in a "different and lesser capacity" and, therefore, cease to be associated with the bank after his current term with the bank expires.
11. Finance minister P Chidambaram will discuss with chiefs of state-owned banks how they propose to raise capital, given the fact that implementation of the new Basel II norms are round the corner and that credit continues to grow at faster pace. The meeting between the FM and bank chiefs is schedule on April 19 in New Delhi.
12. UTI Bank has decided to go in for a fresh equity issue in the current financial year. The bank is looking at raising around Rs 2,000 crs either through a domestic issue or global depository receipts in order to spruce up its tier-I capital base.
13. Issuing fresh guidelines to tackle the security threat, the RBI has permitted banks to break open a locker if it remains unoperated for over one year.In case the locker remains unoperated for more than one year, the bank would have the right to cancel the allotment of the locker and open it, even if the rent is paid regularly. Banks, however, will have to give notice to the customer asking the reason for the inoperation of the locker before opening it. The RBI has asked banks to insert a clause with this note in the locker agreement.
14. Bank of Baroda's (BoB) international business grew by 71% in the financial year 2006-07 while its total business grew by more than 30%.The bank had least exposure to capital market and real estate, sectors that would be affected by the recent interest rate hike. Interest rate hike on home loans is at the bottom of the bank's priorities. The bank had recently raised home loan rates by only 0.50% as compared to its PLR being raised by 0.75%.BoB's home loan grew at 41% last financial year.
15. Banks are considering setting up a domestic card payment settlement company, called India Pay, that would rival global payment systems Visa and MasterCard.At present, all card-based transactions are settled through the global payment network of Visa and MasterCard. The plan, taken up under the aegis of the IBA, comes amid estimates that payments through cards would increase three-fold over the next five years.In 2005-06, the total spends at point-of-sale (POS) terminals crossed Rs 55,000 crs. As many as 18 million credit cards and more than 60 million debit cards were issued in that year.Every transaction involves payment of an interchange charge to MasterCard or Visa for settlement, which amounted to about $50 million during the year. A domestic card payment settlement company would save the outgo on commission paid to Visa and MasterCard.
16. Nearly 4,000 clerical cadre and staff have sought early retirement from State Bank of India, under the exit scheme for reasons ranging from lack of future career prospects to difficulty in coping with intense work pressures.At present, the total staff strength of the bank is about 1,60,000 and about 4,000 employees have already put in applications for separation. The scheme closed in March 31, 2007 coinciding with the end of financial year 2006-07.The maximum response (approximately 700) to the scheme came from officers from the Maharashtra and Goa circles, which have the largest share in SBI’s business, and corporate office. The employee (clerical and other staff) strength in the circle and head office is about 15,000.
(a) not more than two whole-time directors, to be appointed by the Central Government after consultation with the RBI ,
(b) one director who is an official of the Central Government,
(c) one director who is an officer of the RBI, to be nominated by the Centre on the recommendations of the RBI,
(d) not more than two directors to be nominated by the Centre from SEBI, Nabard or public financial institutions specified from time to time under Section 4-A of the Companies Act and other institutions established or constituted by or under any Central Act or incorporated under the Companies Act and having not less than 51% paid-up share capital held or controlled by the Central Government,
(e) one director from among the workmen,
(f) one director from among the non-workmen,
(g) one director who is a chartered accountant with not less than 15 years' experience,
(h) not more than six directors to be nominated by the Centre, subject to Section 9(3). Clause (i), which says that where the capital issued by the bank is (1) not more than 20 per cent of the total paid-up capital, there need be not more than two directors, (2) more than 20 per cent but not more than 40 per cent of the total paid-up capital, not more than four directors, and (3) more than 40% of the total paid-up capital, not more than six directors to be elected by the shareholders, other than the Central Government from among themselves.
2. Buoyed by strong growth in fee income and improvement in net interest margin, UTI Bank has posted a 39.65% growth in net profit to Rs 211.89 crs for the fourth quarter ending March 31, 2007, against Rs 151.73 crs for the corresponding quarter of the previous year.The rise in net profit was mainly because it could increase the share of demand deposits by 40%, which helped it to maintain the cost of rising interest rates and pass on the burden of rising interest rates to the customers. This helped it to maintain its net interest margin.
3. In a bid to de-centralise operations further, the South Indian Bank opened its 12th regional office at Palakkad in Kerala. The need for the new regional office emerged from the phenomenal growth of the bank as well as the need to provide faster service to its increasing clients. With the support of the valued clients and cooperation of over 4,000 members of staff, the bank could achieve what was planned at the beginning of the last fiscal - Rs 20,000 crs in total business, 475 branches in 23 states and union territories, 175 ATMs and implementation of 100% core banking solutions in all its branches and offices.
4. Indian Overseas Bank has secured the RBI's approval for starting a financial services subsidiary. IOB would invest Rs 50 crs in IOB Financial Services Ltd, the company that will be set up to provide services such as stock broking, depository participant, wealth management, distribution of third-party financial products and, at a later stage, investment banking.
5. Corporation Bank is foraying into the sale of 20 gm gold coin (plain make) on the occasion of this Akshaya Tritya. The pricing of the coins is on a daily basis. At present, the bank is selling gold coins of 2 gm, 5 gm, 8 gm and 50 gm.The 2 gm and 5 gm coins are basically positioned as personal gift items to family and friends, and the 8 gm coins are sought to be marketed as milestone mark amongst corporates and also as a business achievement incentive.The 50 gm gold coins, along with newly launched 20 gm gold coins, are positioned as an investment option to HNIs (50 gm) and upper middle class (20 gm).
6. Oriental Bank of Commerce has signed an MoU with India Post to extend rural credit in Chandrapur and Warora districts in Maharashtra; and Mapusa, Vasco and Vadgaon districts in Goa.In the pilot project, the bank will provide short-term consumption credit worth Rs 20,000 per beneficiary. The loans will be collateral-free and not require a guarantee. The repayment period will be up to two years. Post-offices will identify prospective borrowers, assist in the filling up of loan application forms and forward them to the bank branch concerned for disbursement. The bank will pay a commission of Rs 600 per loan to India Post and also decide on the status of the loans.
7. Thiruvananthapuram district has recorded a credit-deposit (C-D) ratio of 76% at the end of the calendar year 2006, which is much high above the State average.
8. The Ministry of Finance has ruled out any immediate plans for a merger of four associate banks of the State Bank of India with the parent bank.There was no such proposal pending before the Government or SBI at present. Speculation of a possible merger of the banks has met with stiff resistance from the SBI staff.
9. To facilitate easy exchange of coins, the RBI is organising coin melas in Hyderabad. The exchange of coins facility will be available to the general public at Rythu Bazars in Yerragadda on April 17, in Alwal on April 18 and in Dilsukhnagar on April 19, between 11 a.m. and 3.30 p.m. The RBI is also making arrangements to distribute coins through select branches of commercial banks.
10. UTI Bank's board has not decided on a new chairman and managing director for the bank.The RBI had denied approval for the re-appointment of Dr P.J. Nayak, CMD, whose term ends on July 31.RBI has proposed a split in the office of Chairman and Managing Director in line with the recommendations of the Dr Ganguly Group Report on Corporate Governance. The RBI has sought a revised proposal from the bank on whether Mr Nayak should be reappointed either as Chairman or as Managing Director.
Mr Nayak has informed the RBI and the Remuneration and Nomination Committee of the board of the bank that it would not be possible for him to function in a "different and lesser capacity" and, therefore, cease to be associated with the bank after his current term with the bank expires.
11. Finance minister P Chidambaram will discuss with chiefs of state-owned banks how they propose to raise capital, given the fact that implementation of the new Basel II norms are round the corner and that credit continues to grow at faster pace. The meeting between the FM and bank chiefs is schedule on April 19 in New Delhi.
12. UTI Bank has decided to go in for a fresh equity issue in the current financial year. The bank is looking at raising around Rs 2,000 crs either through a domestic issue or global depository receipts in order to spruce up its tier-I capital base.
13. Issuing fresh guidelines to tackle the security threat, the RBI has permitted banks to break open a locker if it remains unoperated for over one year.In case the locker remains unoperated for more than one year, the bank would have the right to cancel the allotment of the locker and open it, even if the rent is paid regularly. Banks, however, will have to give notice to the customer asking the reason for the inoperation of the locker before opening it. The RBI has asked banks to insert a clause with this note in the locker agreement.
14. Bank of Baroda's (BoB) international business grew by 71% in the financial year 2006-07 while its total business grew by more than 30%.The bank had least exposure to capital market and real estate, sectors that would be affected by the recent interest rate hike. Interest rate hike on home loans is at the bottom of the bank's priorities. The bank had recently raised home loan rates by only 0.50% as compared to its PLR being raised by 0.75%.BoB's home loan grew at 41% last financial year.
15. Banks are considering setting up a domestic card payment settlement company, called India Pay, that would rival global payment systems Visa and MasterCard.At present, all card-based transactions are settled through the global payment network of Visa and MasterCard. The plan, taken up under the aegis of the IBA, comes amid estimates that payments through cards would increase three-fold over the next five years.In 2005-06, the total spends at point-of-sale (POS) terminals crossed Rs 55,000 crs. As many as 18 million credit cards and more than 60 million debit cards were issued in that year.Every transaction involves payment of an interchange charge to MasterCard or Visa for settlement, which amounted to about $50 million during the year. A domestic card payment settlement company would save the outgo on commission paid to Visa and MasterCard.
16. Nearly 4,000 clerical cadre and staff have sought early retirement from State Bank of India, under the exit scheme for reasons ranging from lack of future career prospects to difficulty in coping with intense work pressures.At present, the total staff strength of the bank is about 1,60,000 and about 4,000 employees have already put in applications for separation. The scheme closed in March 31, 2007 coinciding with the end of financial year 2006-07.The maximum response (approximately 700) to the scheme came from officers from the Maharashtra and Goa circles, which have the largest share in SBI’s business, and corporate office. The employee (clerical and other staff) strength in the circle and head office is about 15,000.
