1.With the strengthening of the rupee against the US dollar, Indian exporters are exploring euro-denominated trade opportunities, according to a survey on exports conducted by the industry chamber FICCI. A combination of factors such as rising cost of raw materials, hike in interest rates and appreciating rupee has eroded the confidence level of Indian exporters, according to the survey. Margins of the exporters are getting squeezed to the point where some of them are contemplating catering only to the domestic market for the time being.
2.Mr Sunit Arora bought an ASSAY-certified 20 gm gold bar from a leading bank for Rs 21,098.08 on Akshaya Trithiya, hoping to get better returns at a later date. Little did he know that banks do not have a buyback policy linked to their gold-coin sales. "I was told that the coins/bars were not sold with a buyback guarantee and that I should try selling to a jeweller. I wanted to encash it even though the gold rate had taken a dip from the price I bought it,'' said Mr Arora. What's more, Mr Arora had paid Rs 2,300 premium over the then market rate for the 20-gm bar. Bankers have a totally different view on this. "RBI guidelines prevent us from buying back the gold coins sold to customers. They can pledge the coins and raise money against it."
3. Oriental Bank of Commerce plans to raise more capital in July to fund business growth. The bank had in mid-April raised about Rs 500 crore of tier-II capital through bond offering at a cost of little less than 10 per cent. "We are yet to decide on whether the capital raising in July would be under tier-I or tier-II. We will raise more capital to fund business growth and also to meet Basel-II requirements," a senior official of the bank said.
4. Most of the internationally active banks are more or less ready to meet Basel II requirements by 2008. In fact, some have prepared parallel balance sheet for 2006-07. However, that was not for any publication, but to understand what could be the impact of Basel II implementation on these banks. The other banks, by and large in the system, would be ready by 2009. Some would be having problems, as even urban cooperative banks are included in that. Such banks may find it difficult. Bankers expect that the Reserve Bank of India will give some more time to the weaker groups.
5. Karnataka Bank Ltd, which registered a growth of Rs 1 cr in net profit during 2006-07, has proposed a dividend of 35%. It has reported a net profit of Rs 177.03 crs for 2006-07 as against Rs 176.03 crs for 2005-06. The bank could show comfortable net profit, in spite of increased provisioning for depreciation on investments in the rising interest rate scenario.
6. Lakshmi Vilas Bank has proposed to raise the interest rate on the medium and long-term domestic deposits by 50 to 125 bps w.e.f May 21. For periods ranging between 181 days and 364 days, the rate is being raised to 8.25% (7.75%), between one and two years to 9.50% (8.25%) and maturity period beyond two years to 9.75% (8.75%). Besides raising the rates, it is also proposing to introduce an 18-month special deposit scheme at 10.25% (regular) and pay an additional 50 bps for senior citizens. This scheme, according to its release, would have a lock-in period of one year and be on offer up till end-September.
7. Loans to members of the minority communities who belong to the weaker sections of the society will be included under the priority sector advances of banks. The weaker sections under the priority sector as defined by the RBI include small and marginal farmers, landless labourers, tenant farmers, artisans, scheduled castes and scheduled tribes, self-help groups, among others. In a notification issued, the RBI said that the recently issued guidelines on the priority sector have been modified to include loans granted to persons who belong to the weaker sections and are from minority communities, as may be notified by the Government from time to time.
8. The government is considering a proposal to merge financially sound urban co-operative banks with private sector banks. Since private sector banks are finding it difficult to grow organically through the expansion of branches, it is felt that this is one way to ensure a good growth. According to the RBI licensing policy, new- generation private banks should be well spread out with a presence in urban, semi urban and rural areas. But except for a few, most smaller new-generation private sector banks are finding it difficult to grow and have restricted themselves to urban areas. Urban co-operative banks (UCBs), on the other hand, have limited presence and are too localised. They are also finding it difficult to raise funds given the enhanced capital requirements for UCBs with deposit above Rs 100 crs post-Basel-II norms, becoming effective from March 2009. Depositors of these banks also will get a bargain by shifting to bigger banks with a professional management structure. This could therefore lead to a win-win situation forboth. The suggestion has been sent to the RBI for its views. The apex bank, however, feels it will be difficult to assess the implications till a proposal comes up for examination.
9. RBI has allowed HDFC Bank to start a non banking finance company. The NBFC, to be set up by HDFC Bank, will be a wholly owned subsidiary and will undertake retail operations such as auto, personal loans etc. The bank does not rule out the option of roping in a partner with a minority stake. HDFC Bank also plans to start overseas operations in Singapore, Bahrain and Hong kong soon.
10. You need not visit a bank branch or log on to internet for transferring money from your account. Just walk into an automated teller machine (ATM). This comes in the wake of six Indian banks deciding to offer fund transfer facility through ATMs through a shared network - Mitr. The banks, Punjab National Bank (PNB), Indian Bank, Oriental Bank of Commerce (OBC), Karur Vysya Bank, IndusInd Bank and UCO Bank, are part of the ATM sharing network, Mitr, with PNB as the settlement bank. This inter-bank network of 2,600 ATMs will be managed by FSSNet. Besides options for balance enquiry, cash withdrawal and cash deposit, the main menu of the ATM would now also include a fund transfer option. The customer can transfer money by entering details of the account to which funds are to be moved.
11. Life Insurance Corporation of India is interested in picking up stakes in banks that have good financials and performance, with the insurer likely to prefer banks with which it has bancassurance tie-ups. Bancassurance enables the insurer to distribute insurance products through a bank’s network.
2.Mr Sunit Arora bought an ASSAY-certified 20 gm gold bar from a leading bank for Rs 21,098.08 on Akshaya Trithiya, hoping to get better returns at a later date. Little did he know that banks do not have a buyback policy linked to their gold-coin sales. "I was told that the coins/bars were not sold with a buyback guarantee and that I should try selling to a jeweller. I wanted to encash it even though the gold rate had taken a dip from the price I bought it,'' said Mr Arora. What's more, Mr Arora had paid Rs 2,300 premium over the then market rate for the 20-gm bar. Bankers have a totally different view on this. "RBI guidelines prevent us from buying back the gold coins sold to customers. They can pledge the coins and raise money against it."
3. Oriental Bank of Commerce plans to raise more capital in July to fund business growth. The bank had in mid-April raised about Rs 500 crore of tier-II capital through bond offering at a cost of little less than 10 per cent. "We are yet to decide on whether the capital raising in July would be under tier-I or tier-II. We will raise more capital to fund business growth and also to meet Basel-II requirements," a senior official of the bank said.
4. Most of the internationally active banks are more or less ready to meet Basel II requirements by 2008. In fact, some have prepared parallel balance sheet for 2006-07. However, that was not for any publication, but to understand what could be the impact of Basel II implementation on these banks. The other banks, by and large in the system, would be ready by 2009. Some would be having problems, as even urban cooperative banks are included in that. Such banks may find it difficult. Bankers expect that the Reserve Bank of India will give some more time to the weaker groups.
5. Karnataka Bank Ltd, which registered a growth of Rs 1 cr in net profit during 2006-07, has proposed a dividend of 35%. It has reported a net profit of Rs 177.03 crs for 2006-07 as against Rs 176.03 crs for 2005-06. The bank could show comfortable net profit, in spite of increased provisioning for depreciation on investments in the rising interest rate scenario.
6. Lakshmi Vilas Bank has proposed to raise the interest rate on the medium and long-term domestic deposits by 50 to 125 bps w.e.f May 21. For periods ranging between 181 days and 364 days, the rate is being raised to 8.25% (7.75%), between one and two years to 9.50% (8.25%) and maturity period beyond two years to 9.75% (8.75%). Besides raising the rates, it is also proposing to introduce an 18-month special deposit scheme at 10.25% (regular) and pay an additional 50 bps for senior citizens. This scheme, according to its release, would have a lock-in period of one year and be on offer up till end-September.
7. Loans to members of the minority communities who belong to the weaker sections of the society will be included under the priority sector advances of banks. The weaker sections under the priority sector as defined by the RBI include small and marginal farmers, landless labourers, tenant farmers, artisans, scheduled castes and scheduled tribes, self-help groups, among others. In a notification issued, the RBI said that the recently issued guidelines on the priority sector have been modified to include loans granted to persons who belong to the weaker sections and are from minority communities, as may be notified by the Government from time to time.
8. The government is considering a proposal to merge financially sound urban co-operative banks with private sector banks. Since private sector banks are finding it difficult to grow organically through the expansion of branches, it is felt that this is one way to ensure a good growth. According to the RBI licensing policy, new- generation private banks should be well spread out with a presence in urban, semi urban and rural areas. But except for a few, most smaller new-generation private sector banks are finding it difficult to grow and have restricted themselves to urban areas. Urban co-operative banks (UCBs), on the other hand, have limited presence and are too localised. They are also finding it difficult to raise funds given the enhanced capital requirements for UCBs with deposit above Rs 100 crs post-Basel-II norms, becoming effective from March 2009. Depositors of these banks also will get a bargain by shifting to bigger banks with a professional management structure. This could therefore lead to a win-win situation forboth. The suggestion has been sent to the RBI for its views. The apex bank, however, feels it will be difficult to assess the implications till a proposal comes up for examination.
9. RBI has allowed HDFC Bank to start a non banking finance company. The NBFC, to be set up by HDFC Bank, will be a wholly owned subsidiary and will undertake retail operations such as auto, personal loans etc. The bank does not rule out the option of roping in a partner with a minority stake. HDFC Bank also plans to start overseas operations in Singapore, Bahrain and Hong kong soon.
10. You need not visit a bank branch or log on to internet for transferring money from your account. Just walk into an automated teller machine (ATM). This comes in the wake of six Indian banks deciding to offer fund transfer facility through ATMs through a shared network - Mitr. The banks, Punjab National Bank (PNB), Indian Bank, Oriental Bank of Commerce (OBC), Karur Vysya Bank, IndusInd Bank and UCO Bank, are part of the ATM sharing network, Mitr, with PNB as the settlement bank. This inter-bank network of 2,600 ATMs will be managed by FSSNet. Besides options for balance enquiry, cash withdrawal and cash deposit, the main menu of the ATM would now also include a fund transfer option. The customer can transfer money by entering details of the account to which funds are to be moved.
11. Life Insurance Corporation of India is interested in picking up stakes in banks that have good financials and performance, with the insurer likely to prefer banks with which it has bancassurance tie-ups. Bancassurance enables the insurer to distribute insurance products through a bank’s network.
