1. Some people call it a ‘micro branch’, while some others call it ‘branchless banking’. Finally, it comes to the point of leveraging the power of IT (information technology) for implementing financial inclusion programme. With the vast number of rural populace yet to get banking facility and the potential it provides for bankers, ‘branchless banking’ is all set to become the next killer product in the industry. Pilot projects by some banks, in association with technology partners, have proved that new generation technology tools and the dedicated human resource base will make branchless banking a gold mine for bankers in the years to come.
2. Old private sector banks are vulnerable to forces both within and from outside and it is time for them to focus on improving the work culture to face the threat from these forces, according to Mr Anantakrishna, Chairman and Chief Executive Officer of Karnataka Bank Ltd. Speaking at the inauguration of the 15th conference of the Karnataka Bank Officers’ Organisation (KBOO) in Mangalore on Sunday, he said that old legacy culture is the force affecting the old private banks from inside and ‘vulture’ is the force from outside.
3. Bonds softened last week in thin trading as credit offtake slowed down ahead of a long holiday season. Traders said that volatility in the foreign exchange market had little impact on bonds, as domestic factors overwhelmed exit by foreign institutional investors. In fact during the week, there was hardly any RBI intervention. The only intervention was to pump in liquidity through reverse repurchases. Net outflow on account of selling by foreign institutional investors was $907 million last week. This has prompted exporters and some potential foreign direct investors to take cover. As a result, one-month forward premia dropped below one per cent to 0.61 per cent last week. The previous week it was 1.75 per cent. Forward premia for three, six and 12-month also narrowed to 1.01 (1.73), 1.42 (1.88) and 1.11(1.40) per cent respectively.
4. Some of the public sector banks that have largely been sellers of bad loans are now considering buying such assets, sensing the business potential this market can offer.
A senior official from State Bank of India said that the bank has, in principle, decided to purchase assets and could start the process by April next year. “We have agreed in principle to start aggregating debt. We could either invest in them or try to sell to other asset reconstruction companies.
A senior official from State Bank of India said that the bank has, in principle, decided to purchase assets and could start the process by April next year. “We have agreed in principle to start aggregating debt. We could either invest in them or try to sell to other asset reconstruction companies.
5. After steadily increasing for the past couple of months and surging by an all-time high of $11.871 billion during the week ended September 28, the country’s forex reserves fell by $599 million to $272.954 billion for the week ended December 14, 2007. The reserves increased by $33 million to $273.553 billion for the week ended December 7.
6. The World Bank approved $225 million loan/credit to Bihar to support the State in implementation of critical structural reforms to attain sustainable and inclusive development besides improving the delivery of services.
7. In a bid to give a further boost to infrastructure financing, the Finance Ministry has now allowed India Infrastructure Finance Company Ltd (IIFCL) to receive certain interest payments without them being subjected to tax deduction at source (TDS). The TDS exemption would be available only on interest payments other than ‘interest on securities’. It would basically be available on IIFCL’s loans and inter-corporate deposits.
8. The demand for commercial papers (CPs) is on the rise with mutual funds investing more in such short-term instruments. The total amount of outstanding CPs issued by companies rose by about 80 per cent to Rs 42,183 crore on October 31, 2007, against Rs 23,521 crore during the same time last year. “There is a latent demand from mutual funds for commercial papers and certificate of deposits as these are typically short-term instruments and they fit the overall maturity profile. The demand for CPs, however, falter when the mutual funds are hard pressed for cash particularly during the time of advanced tax outflows or tight liquidity conditions in the market.
9. The Reserve Bank of India is now rooting for environment conservation and fair social practices. In a circular issued today, the central bank has asked banks to put in place a suitable and appropriate plan of action towards helping the cause of ‘sustainable development’, with the approval of their boards. Spurred on by the worldwide momentum in sustainable development and the initiative being taken on various fronts by different organisations, including all major banks globally, Indian banks have been encouraged to actively look at corporate social responsibility, sustainable development and non-financial reporting.
10. Central Bank of India has launched a bouquet of products and services to cater to the needs of diverse strata of customers. Ms H.A. Daruwalla, Chairperson and Managing Director, Central Bank of India said that the new range of products and services would make Internet banking a reality. This would enable the bank to introduce a host of services and facilities like online booking of railway tickets and payment of utility bills, said a press release from the bank.
