TIDES OF 20.10.2007

1. The forex kitty swelled by $5.356 billion to $256.686 billion for the week ended October 12, backed by sustained intervention by the Reserve Bank of India in the forex market.The reserves had gone up by $3.568 billion.

2. ICICI Bank posted a net profit of Rs 1,002.6 crore for the quarter ended September 30, 2007, up 33 per cent from Rs 755.01 crore in the corresponding quarter last year on the back of a 33 per cent growth in advances.

3. As part of its efforts to penetrate the semi-urban and rural areas of Gujarat, SBI Life Insurance, a joint venture between State Bank of India and Cardif-A BNP Paribas Company, on Friday announced a strategic bancassurance tie-up with the Valsad District Co-operative Bank Ltd (VDCB).The tie-up is a referral arrangement wherein SBI Life products will be available throughout all the 43 branches of VDCB.

4. Bank of Rajasthan, with a pre-dominantly North Indian focus, seeks to increase its presence in the Southern States with at least 10 new branches this fiscal.

5. Andhra Bank has reduced interest rates on housing, personal, vehicle loans and on advances to transport and agricultural sector during the festival season.

6. State Bank of Mysore (SBM) intends to raise Tier II capital through bond issues of up to Rs 400 crore during the year to support its asset growth. In addition, the bank is also planning a follow-on public issue.

7. The board of directors of ICICI Bank has approved the establishment of ICICI Foundation for inclusive growth, subject to the required approvals. The Foundation would integrate, consolidate and scale up the group’s existing initiatives in the area of philanthropy and development.

8. UCO Bank has announced festival discount on its home loans under UCO Shelter. For all new housing loans up to Rs 20 lakh, the bank will charge with immediate effect 0.25 per cent less than the normal rates.

9. HSBC has launched an enhanced version of the ‘HSBC Premier’ service for its mass affluent customers.The new HSBC Premier offers cross-border banking services where customers can take their accounts, credit history and banking relationships with them wherever they choose to live and work- subject of course to local regulations. It also offers emergency encashment facilities across any Premier branch or centre, a single global emergency number which you can access anywhere in the world and swipe-based Internet Protocol phones which connects a customer to his home country call centre.Customers will also have special benefits on their HSBC Premier Master Card credit card.

10. Punjab & Sind Bank plans to soon raise a sum of Rs 1,000 crore through Certificate of Deposit, which is a debt instrument. ICRA has assigned A1+ rating .

Tides of 14.10.2007

1. The country’s forex kitty swelled by $3.568 billion for the week ended October 5, on the back of continuous intervention by the Reserve Bank of India in the forex market. The forex reserves had surged by a whopping $11.871 billion to touch $247.762 billion for the week ended September 28, 2007, said the Weekly Statistical Supplement from RBI.

2. HDFC Bank saw a rise of 33.4 per cent in its total customer assets (including advances, corporate debentures, and investments in securitised paper) to Rs 65,812 crore (Rs 49,326 crore) in the quarter ended September 30, 2007.
The bank is planning to maintain its share of low-cost deposits at 50 per cent this fiscal.

3. A healthy interest income from higher advances helped HDFC Bank post a 40 per cent increase in net profit for the quarter ended September 2007. It was also able to maintain its net interest margin at four per cent (3.8 per cent last year). The net profit rose to Rs 368.48 crore from Rs 262.94 crore in the corresponding quarter last year.

4. Asian Development Bank (ADB) sees scope for continued increase in its financial assistance to India in the coming years.

5. For the first time ever, bank unions are to submit a common charter of demands to the Indian Banks’ Association (IBA) for the next wage revision settlement.With the existing settlement, arrived about five years back, set to lapse on October 31, the nine bank unions are to meet in Mumbai on October 18 to finalise the charter of demands. The meeting would he held under the aegis of the United Forum of Bank Unions (UFBU).

6. Life Insurance Corporation of India (LIC) has said that it would complete the process of digitisation of all the policies in the next three years.

7. When the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002, was brought in, the idea was to recover the Rs 75,000-odd crore of bank NPAs, half of which were of the large companies. But today, while the large borrowers “negotiate” for waivers and rebated repayments, banks seize the assets of micro units, alleges the newly formed All India Micro, Agro, Rural & Small Industries Association.

8. The Basel Committee on Banking Supervision is confident that its ongoing initiatives would help address the types of issues and risks arising from the recent financial market turbulence. In a statement issued at the conclusion of its 8-9 October meeting, the committee has said that it continues to assess the supervisory and risk management issues arising from recent financial market developments and, where appropriate, would consider supervisory responses that are pragmatic and proportionate.

9. Resident individuals can now book forward contracts based on self-declaration, without producing underlying documents up to a limit of $1,00,000.

10. The net profit of South Indian Bank dropped 14% in the second quarter of this fiscal ended September 30. However if the extraordinary gains made in the corresponding quarter of the previous year are removed, then the profit has grown by 90 per cent to Rs 35.69 crore (Rs 18.81 crore) during this second quarter. The extraordinary gains made in the previous year were from the sale of the bank’s stake in Bharat Overseas Bank.

Tides of 10.10.2007

1. Indian IT services firms are expected to post a robust growth for the second quarter (Q2), despite currency volatility. The earnings momentum as a result is likely to be sustained, after a slip in Q1 this year. Industry analysts expect Tier I companies to outperform their own projections to post 7-10 per cent quarter-on-quarter revenue growth driven by strong volumes for the seasonally strongest quarter. Profits are expected to grow 3-6 per cent sequentially.

2. Birla Sun Life Insurance has received capital infusion of Rs 100 crore from its promoters taking it to a total of Rs 877 crore.

3. Worried about forgetting the due date of your life insurance premium or having to waste time standing in line to renew it? Life insurers are addressing this issue by introducing alternative modes of payment. According to industry estimates, around 25 per cent of the policies each year lapse due to non-payment of premiums on time.While most of the companies in the life insurance business offer online payment service or electronic clearance services, ING Vysya Life Insurance and Max New York Life (MNYL) have gone a step ahead. Both companies have launched premium pay service through SMS, and the latter has also tied up with two banks to offer premium pay services through ATMs.

4. A consortium of five banks, the Andhra Pradesh Government and the National Bank for Agriculture and Rural Development (Nabard), has set up the Andhra Pradesh Bankers’ Institute of Rural and Entrepreneurial Development.
The Institute, a first of its kind in the country, will provide support to rural youth in equipping themselves with skills, especially in sustainable technologies and employment generating sectors. The consortium members are Andhra Bank, Canara Bank, Indian Bank, Indian Overseas Bank and State Bank of Hyderabad. The State Government will provide 17 acres land on the outskirts of the city to set up the facility. Till the permanent facilities come up, the Institute will function out of the Andhra Pradesh Academy for Rural Development.

5. The Government has given an in-principle nod for State Bank of India (SBI) to raise about Rs 10,000 crore of capital.

6. State Bank of Patiala (SBP) has started offering online education loans facility under the SBP-Gyan Jyoti Scheme. The applicant (student, parent/guardian) can now apply online for education loans on a link provided in bank’s Web site.

7. The Finance Minister, Mr P. Chidambaram, on Tuesday asserted that the Government would implement the recommendations of the Rangarajan to achieve the goal of financial inclusion among the economically disadvantaged. The final report of the committee is yet to be submitted to the Government.

8. State Bank of India has set a target for increasing its Current Account and Savings Account (CASA) deposit base by 300 basis points this year. The bank is also focusing on small and medium enterprises (SMEs) segment.

9. Tamilnad Mercantile Bank has introduced a new deposit scheme,‘TMB 222 Days Deposit’. The scheme offers higher interest rate for this particular tenor and senior citizens would earn interest rate of 9.25 per cent.

10. Having got the Reserve Bank’s approval and the shareholders’ nod for raising capital through issue of 68 lakh equity shares of Rs 10 each at a premium on preferential basis, the Kumbakonam-headquartered City Union Bank today went ahead with the allotment.The bank has allotted 3 lakh shares to L&T and 15 lakh shares to LIC at Rs 169.15/share, while fixing the rate at Rs 190 each for the 15 lakh shares allotted to FMO, Netherlands, 12.5 lakh shares each to Ares Investments LLC and Argonaut Ventures and 10 lakh shares to Yatish Trading Company.

Tides of 4.10.2007

1. Soon insurance agents can get their commission transferred straight to their accounts and need not wait for the clearance of cheques or demand drafts. Visa is in talks with insurance companies to offer the money transfer service.Visa money transfer is the process of transferring funds through a customer’s bank account, debit or credit card via the Internet or ATM (Automated Teller Machines).

2. Canara Bank has reduced the rate of interest on fresh housing loans by 50 basis points. For loans with tenures up to 5 years up to Rs 20 lakh, the rates have been fixed at 10.25 per cent. For tenures between 5 years and 10 years, the rate is 10.50 per cent. For tenures above 10 years up to 20 years, the rate is 10.75 per cent. The rate of interest for fresh housing loans above Rs. 20 lakh for repayment periods up to 5 years is 10.50 per cent; above 5 years up to 10 years 10.75 %; and above 10 years up to 20 years 11 per cent. Processing charges are also reduced by 50 per cent up to December 31.Central Bank of India has reduced interest rates by 0.50 percentage point on retail loans, effective October 1.

3. From passion-driven financing to funding by the “parallel economy” (mafia money), the aspect of financing in Hindi film industry has seen a sea change in the last 110 years.The art of film making has witnessed transformation through the years.

4. Mukesh Ambani’s Reliance Retail plans to enter non-banking finance business (NBFC), besides insurance broking and travel services.
These businesses will be set up, in the near future, as independent companies in the context of Reliance Industries venturing into a range of services as part of its retail operations.

5. The State Bank of India is in the process of strengthening its overseas branches.Specialised cells were also being opened in the country to facilitate loans to Indian companies starting operations in other countries.

6. Indian Bank is bullish on micro credit in urban areas. It plans to add seven more exclusive micro-finance branches (Microsate) by the end of the current financial year.The bank currently has five Microsate branches (a satellite branch for micro loans) for extending credit to self-help groups (SHGs) in urban areas.

7. The Andhra Pradesh Government will ensure availability of Rs 7,000 crore micro loans to members of self-help groups (SHGs) in the State.

8. Technology solutions provider and multi-bank promoted company FINO (Financial Information Network and Operations Ltd) plans to partner with Punjab National Bank for rolling out smart cards for the rural masses in Rajasthan.

9. State Bank of India is planning to build a parallel structure, within the bank, to focus on non-performing assets and recovery. The idea is to have a separate ‘bad bank’ and ‘good bank’.Currently, the bank has the Stressed Assets Management Group (SAMG), which deals with NPAs in the corporate sector and Stressed Assets Realisation Centres (SARCs) for retail and SME sectors. The bank has 10 branches under SAMG and SARCs in 55 centres. The SAMG branches handle accounts that have a credit limit of Rs 1 crore and above. The SARCs handle all small and medium business, and personal segment loans such as housing loans, consumer durables and auto loans.

10. The Institute of Clinical Research (India) is set to get financial support from ICICI Bank for a dedicated clinical research institute that would come up in Bangalore. Looking to invest in the growing opportunity of clinical research, ICICI Bank has approved a Rs-18-crore-loan towards setting up the dedicated clinical research institute.

11. American Express and Kingfisher Airlines announced the launch of airline corporate charge card programme on Monday, targeted at the small to medium sized enterprises (SMEs).Benefits .As per the co-branding arrangement between the two companies, the card would offer eight per cent corporate rebate on Kingfisher Airlines air travel purchased with the card. Companies could also save up to 30 per cent under the programme on business expenses and also reduce costs on business travel and entertainment. Some of the other benefits of being a card member would include direct membership for King Club, the airline’s frequent flier programme.

Tides of 1.10.2007

1. The Delhi State Consumer Commission has slapped a penalty of Rs 1 lakh on Axis bank for lapses in finalising the account of an 85-year-old customer.

2. Information and communication technologies (ICT) may not be a cure to all problems, but it can be a powerful tool to facilitate economic, individual and social development, said Prof K Raj Reddy of Carnegie Mellon University (USA) at the 73rd and 74th convocation of Andhra University .

3. Indian banks face the likelihood of scaling down their lending targets for 2007-08, following a slump in credit off-take during the first six months of the financial year resulting from successive rounds of interest rate hikes. The loan portfolio of banks has grown by Rs 54,908 crore till September 14, representing only 3.6 per cent growth. During the same period last year, banks had lent Rs 147,657 crore, a rise of 10.5 per cent. As a result, banks anticipate credit growth in 2007-08 to be closer to 20 per cent, down from 27.6 per cent in 2006-07 and short of the target of 25 per cent set at the beginning of this fiscal.

4. Need for funds slows as credit offtake till mid-Sept crawls to just 9% of annual target. The sustained slowing of credit growth has made State Bank of India (SBI), the country’s largest lender, consider shelving its proposed rights issue of Rs 8,000-12,000 crore, sources in the bank told Business Standard. The bank’s credit portfolio has grown by just about Rs 9,000 crore in the first five and a half months of 2007-08 against the bank’s target of increasing its advances by Rs 1,00,000 crore.

5. State Bank of India, the country’s biggest lender, became the first public sector bank to touch a market capitalisation of Rs 1,00,000 crore.

6. State Bank of India (SBI) will lend another $1-1.5 billion to Tata Steel UK to enable the Tata group to refinance a part of the bridge loans taken by it for the acquisition of Anglo-Dutch steel maker Corus. Tata Steel is unable to raise funds from foreign banks, which have turned risk-averse following the US sub-prime mortgage crisis. The Indian conglomerate has therefore turned to the country’s largest lender for funding support. The fresh loan will be in addition to the $1 billion SBI sanctioned late last month. SBI will take the enhanced exposure to Tata Steel through its overseas branches. This will become a substantially bigger acquisition financing exposure of SBI, considering that it till now was involved in deals only of less than $100 million.
Tata needed refinance to pay-off $7.2 billion of bridge loans taken for the biggest buyout by an Indian company.

7. In the first-ever case of its kind, ICICI Bank has compensated the families of its two borrowers who allegedly died due to harassment by the bank’s recovery agents. The bank has paid Rs 10 lakh in the form of fixed deposit to the family of Prakash Sarvankar from Andheri here who committed suicide after being publicly humiliated by the agents for recovery of a personal loan.

8. The country's largest private general insurer ICICI Lombard has bagged a contract from the railways to provide personal accident cover at a premium of just 4.75 paise per passenger.

9. Standard Chartered Bank recently announced the acquisition of American Express Bank for $860 million in cash. This purchase would give the UK-based bank an expanded presence in India and boost its recently launched private banking business in the country. Its wholesale banking business focuses on the entire spectrum ranging from emerging corporates, small and medium enterprises (SME) and large corporates. It is doing well and will continue to grow at 20 per cent to 25 per cent. It wants to expand the SME business as it accounts for around 20 per cent of our revenues. The small and medium enterprises business segment is growing at upwards of 50 per cent and will continue to report robust growth.

10. RBI is in favour of a domestic card payment settlement company to rival the global payment majors Visa and MasterCard. The Indian Banks Association (IBA) had earlier proposed the setting up of a domestic card transaction settlement company called India Pay, following a forecast that card payments in India will increase three-fold in five years. The central bank wants new players to be promoted so as to infuse competition in the card payment market. All card-based transactions are currently settled through the global payment network of Visa and MasterCard. The central bank’s Board for Payment and Settlement Systems observed that nearly 95 per cent of the card-based transactions in the country were domestic in nature, but most of the credit card, debit card and pre-paid cards issued were affiliated either to Visa, Master card or American Express. The RBI has asked IBA to submit a detailed report on the feasibility of setting up an indigenous payment settlement system. A streamlining of card transactions could reduce the cost of operations.