1. One of the most prominent developments in Indian banking in the recent past has been the rapid growth of the retail loan portfolios of private sector commercial banks. The growth posted by some of the private sector banks has been such (a near doubling of retail credit in around two years which shows an annual rate of growth of around 35 %) as to overshadow the more modest attainments on this front by other b anks — particularly the public sector banks. It has also created the perception that overall economic conditions have so changed that a major shift in business strategy (such as the dominant focus on retail banking as against wholesale banking) is quite inevitable and the future lies only in retail banking expansion.
2. Concerned over the retail deposit chase at high rates of interest, the Union Finance Ministry has asked public sector banks (PSBs) to focus on raising low-cost funds, particularly current account and savings account (CASA).Barring a handful of PSBs, most large banks currently have a CASA base of barely 20 per cent. The Ministry, at a meeting with top bankers, has conveyed that it wanted this ratio to be raised to 35 per cent of their respective demand and time liabilities, said the head of a PSB who attended the meeting. Among the banks that are close to the Ministry’s prescribed CASA, include Central Bank of India and Vijaya Bank.
3. If you are a regular customer of Net banking and receive any mail from your bank asking for information update or reconfirmation of your particulars, think twice before clicking on the mouse. The mail could be originating from a proxy bank intending to access your confidential information, cautions Mr Patrik Runald, Senior Security Specialist, F-Secure Labs, Malaysia.“Globally, accessing confidential account information through proxy banking has been on the rise and given the pace at which the banking sector is growing in India, attempts are already being made to crash into banking information of netizens in India.
4. The Finance Minister, Mr P. Chidambaram, said on Monday that all the 29 Regional Rural Banks (RRBs) with negative networth would be recapitalised by March 2010. This is however subject to the nod of the States’ which have a 15 per cent stake in each of the RRBs.“We intend to write to the State Governments and ask them to contribute their share in the recapitalisation. Where State Governments agree to bring in their 15 per cent contribution, those RRBs would be recapitalised immediately,” Mr Chidambaram told reporters after his nearly four-hour long meeting with the Chairmen of RRBs here on Monday.Of the 96 RRBs, 29 have a negative networth. The total fund requirement for recapitalisation has been estimated at about Rs 1,850 crore.
5. Foreign companies will have much easier access to Indian capital markets. The government on Tuesday eased guidelines for Indian Depository Receipts (IDRs), doing away with turnover-based ceilings and relaxing the requirement for foreign companies to have a profit and dividend track record for five years. The rules are intended to bring the Indian stock market norms for foreign companies in step with global markets. The new provisions will deepen the stock markets and also result in slowing the build-up of foreign exchange reserves.
6. KV Kamath, managing director & CEO, ICICI Bank, said interest rates are expected to come down in the next three months—or by the time the next mid-term credit policy is announced.
Speaking to reporters here on Tuesday, Kamath said interest rates have reached a level where cost to borrowers has gone up 33%, leading to a slowdown in credit off-take. The demand for funds will taper off significantly over the next few months, predicted Kamath, who is also the vice-president of CII.
Speaking to reporters here on Tuesday, Kamath said interest rates have reached a level where cost to borrowers has gone up 33%, leading to a slowdown in credit off-take. The demand for funds will taper off significantly over the next few months, predicted Kamath, who is also the vice-president of CII.
7. The new generation private sector UTI Bank has finally received unanimous approval from its shareholders to raise equity capital of over $1 billion through a mix of global depository receipts (GDRs), qualified institutional placement (QIP), and a preferential allotment to promoters, using both the domestic and overseas routes.
