1. Punjab National Bank (PNB) on Wednesday paid a final dividend of 60 per cent amounting to Rs 109.34 crore to the Union Government for 2006-07.The bank had already paid an interim dividend of 40 per cent amounting to Rs 72.90 crore to the Central Government.
2. As many as 90 million Indian borrower accounts and 1.2 million commercial borrowers are now in the Credit Information bureau net. If these borrowers were to approach other banks for loans, the chances are that banks would be better prepared. They would very likely have some knowledge of their background including earlier loans taken and credit card borrowings. If these borrowers hid anything or gave fake addresses, there is a good possibility of being found out.
3. ICICI Bank, which saw a growth of 40 per cent in its small and medium enterprise business segment last year and currently services one million SME clients, has tied up with International Finance Corporation and IBM to offer an ‘SME toolkit’. This is a Web site which provides information and advice to help SMEs start, finance and grow their business. This toolkit has been launched in 24 countries and in 13 languages.
4. Deutsche Bank expects its non-banking finance company (NBFC) operations in India to commence in early 2008. The proposed NBFC would be entirely owned by Deutsche Bank. Currently, Deutsche Bank has 10 bank branches in India. The NBFC is expected to initially focus on consumer loans.
5. State Bank of India is looking at an increase of ‘at least one percentage point’ market share to 11 per cent in the current fiscal with the rolling out of ‘Project Parivartan,’ an HR programme targeted at clerical staff and officers. Announcing the details of the programme, Ms Mahpara Ali, Chief General Manager of the Bangalore Circle, said though training is an ongoing effort at SBI, this was the first time that such a transformation exercise and a multi-level communication programme has been attempted. “The programme is about sensitising each employee about the bank’s transformation and energising them to be change agents with a focus on customer delight.”
6. Banks in India have achieved international standards in respect of prudential norms, including capital adequacy, levels of NPLs and are poised to adopt Basel-II norms for risk management. In the process of managing a bank prudently and efficiently balancing the compliance with all international standards, there are some tools such as securitisation of assets, freedom to fix interest rates and rights of foreclosure which need to be made available to banks to facilitate compliance with regulatory requirements. While the Reserve Bank of India has provided such environment in the matter of recovery rights and liberalised regulations, as far as securitisation of financial assets are concerned, there is a need to undertake further legislative reforms for making securitisation really an effective tool for asset-liability management and exposure norms.
7. Reserve Bank on Tuesday said foreign institutional investors cannot purchase shares of Delhi-based IFCI as foreign exposure has reached the trigger limit of 22 per cent of its paid up capital. No fresh investment can be made by FIIs in the company without obtaining prior permission, RBI said in a release. IFCI last week decided it will invite preliminary bids for inducting a strategic partner from August 13.
8. After ATMs, here come biometric ATMs. NCR Corporation — a manufacturer of automated teller machines (ATMs) — is planning to roll out biometric ATMs in India which will recognise a user by his fingerprint. These ATMs do not require a debit or credit card or a personal identification number (PIN) for banking.The company is running a pilot in India in partnership with leading banks. “The pilots are nearly through and we will soon go in for the rollout,” an NCR spokesperson says. Besides helping villagers get access to ATMs, this would also help sort out security-related issues by minimising the use of skimmed (counterfeit) cards, he adds.In biometric ATMs, the fingerprint of the account-holder needs to be captured and stored by the respective banks or a third party in a database to which the bank has access. A user needs to verify his fingerprint before making the transaction. Additionally, he will be supported with voice instructions in his local language on how to withdraw money, check the balance or for any other transaction.
9. The Centre is planning to raise the ceiling on foreign equity holding in public sector banks to enable them to mop up the required capital for meeting higher capital requirements and to fund growth. To help public sector banks raise Rs 31,300 crore by March 2009, the government is trying to act on a recommendation by a Indian Banks’ Association panel to lower the minimum dividend-payment requirement for the public sector banks. Banks now pay a dividend of 20 per cent of net profit or paid-up capital, whichever is higher. The government is also examining a proposal to allow splitting of shares. “Splitting of shares will enable banks to attract more investors as the price will be affordable. It will also improve liquidity of bank stocks,” said a senior IBA official. Stock split, from Rs 10 to Rs 5 or Re 1, is expected to enhance the market price of the shares of public sector banks.
