Tides of 6.04.2007

1. Bank branches are no longer muggy halls with dull colours, long queues and grunting fans. It is all about air-conditioned halls, channel music, bright colours and swanky lounge areas. A customer of a new private sector bank said, "I don't want to be caught in a queue; in this branch I can sit in the meeting room and discuss the financial details with my bank manager. I can sip coffee and surf the Internet on my laptop at my bank branch. It feels good to be treated in that manner at my bank branch, after a tiring day at work." These branches are specially targeted at high-net worth individuals and mass affluent customers.It is basically a move to give the customers a comfort zone. It helps in retaining the customers. SBI has over 150 such branches across the nation and is in the process of upgrading some other branches as well. The UTI Bank branch at Andheri (Mumbai) has a business lounge, Internet access zone and a meeting room. The branch has special investment advisors and relationship managers to advise customers on financial matters.

2. State Bank of Hyderabad will be Basel-II norms compliant by September 2007. The bank, which completed 65 years today, is optimistic of achieving a business turnover of Rs 1 lakh crore by March 2008. The first branch of SBH was started at Gunfoundry, Hyderabad on April 5, 1942. It has a network of 965 branches and 400 ATMs. It has brought all its branches under core banking solution and is offering value-added services such as any branch banking and Internet banking.

3. Banks' term deposits swelled in the last three months, but bankers aren’t happy because the increase has come at the cost of low-cost current and savings account (CASA) balances. A large part of the accretion to fixed deposits till March 16, 2007 was on account of a flight of funds from the low-cost CASA.

4. Industrial and Commercial Bank of China (ICBC), which listed in October after the world’s largest initial public offering to raise $19.07 bn, sees India as a key potential market. Zhan Xiangyang, director general of the world’s third largest bank, with a market capitalisation of $183.85 bn.

5. Aggressive marketing of online services and a sharp growth in internet connections have seen the internet gaining popularity as a banking channel. But, while banks are extremely bullish about the development of this channel, they are discovering the challenge of protecting gullible customers from online fraudsters. The onus of fighting phishing is as much on the customer, or the prospective victim, as it is on the bank. However, banks are concerned that the negative publicity from phishing attacks could harm the development of this channel. Figures released by anti-phishing service provider RSA Consumer Solutions suggest that phishing attacks have grown by 41% internationally in the past 12 months.

6. The 280-year old British banking giant Royal Bank of Scotland is learnt to be considering applying for a banking licence in India.

7. India's largest commercial bank, SBI, hinted at a hike in its interest rates next week following the RBI move to raise the cash reserve ratio (CRR) and a key rate last Friday.

8. Faced with a chorus of protests from the corporate sector, the Finance Minister, P. Chidambaram, has called for a meeting of bankers and top officials of the RBI for a review of the recent monetary tightening measures. Top bankers said this was one of the rare occasions when the Finance Minister has called for a meeting with bankers on the eve of the lean season credit policy scheduled for April 24. Bankers said that none of them was expecting any rollback in the RBI monetary tightening measures. A top banker said, "At best, we may see the interest on CRR balances being restored."

9. Banks will soon get tied up explaining to customers why their loan request has been turned down, or so it appears. RBI has directed banks to reveal to the customer the reason for rejecting his loan request, irrespective of the amount and category. The amended code will be effective from April 30, 2007. The apex bank has taken these steps to make the lending operations of banks and financial institutions more transparent. It has asked banks to take steps for making customers aware of this regulation. Banks would be placing the notice on their websites and also sending circulars to their existing customers.

10. Union Bank of has upgraded and automated its 'Swift' messaging system to make international money transfers faster and less expensive at a number of its branches across the country. Using Turbo Swift system, the bank has converted its international transfers to an automated platform, replacing a previous system that required payment messages travelling over the Swift Network to be sent manually.
By switching to an automated system like TurboSwift, the bank will be able to support many of those services at a fraction of the previous time and cost. Installation of the system was completed in 12 days by Synergy Login Systems, BankServ's distribution and support partner in India.

“Read, every day, something no one else is reading. Think, every day, something no one else is thinking. Do, every day, something no one else would be silly enough to do. It is bad for the mind to be always part of unanimity."