1. The Institute of Financial Management and Research (IFMR) today launched the ‘IFMR Trust’. The Trust will “create and manage funds which will invest in commercial enterprises that leverage the competitive strengths of low income households.”IFMR already runs initiatives towards building channels to deliver financial and other services in rural remote locations. It has already invested around Rs 30 crore in seven commercial enterprises focussed on low income households and expects to raise the investments to Rs 600 crore by March 2009.
2. Banks must implement strong IT governance practices to ensure that that their technology projects do not adversely impact their performance, according to senior bank officials at Banknet’s “Fourth International Conference on Payment Systems,” held here on Wednesday.
Strong information technology platforms call for calculated and discrete measures from banks. “Banks are faced with two major risky propositions – the pace at which their businesses are growing and the pace at which technology changes,” according to Mr Ravikiran Mankikar, Chief Technology Officer, Shamrao Vithal Co-operative Bank. This makes it imperative for banks to have strong wraps of governance surrounding their IT practices.
Strong information technology platforms call for calculated and discrete measures from banks. “Banks are faced with two major risky propositions – the pace at which their businesses are growing and the pace at which technology changes,” according to Mr Ravikiran Mankikar, Chief Technology Officer, Shamrao Vithal Co-operative Bank. This makes it imperative for banks to have strong wraps of governance surrounding their IT practices.
3. South Indian Bank (SIB) has recorded a 64 per cent increase in net profit during the third quarter of the current year as compared to the corresponding period of the previous year.
The net profit was Rs. 40.72 crore for the 3 month period ended December 31, 2007, as against Rs. 24.84 crore last year.
The net profit was Rs. 40.72 crore for the 3 month period ended December 31, 2007, as against Rs. 24.84 crore last year.
4. Higher interest income and better net interest margin enabled Axis Bank to report a 66 per cent growth in its net profit for the third quarter ended December 31, 2007.The net profit increased to Rs 306.83 crore from Rs 184.61 crore in the corresponding quarter of the previous year.
5. Grappling with issues of change management, innovation for new delivery channels and broadening the range of services portfolio — both internal and external, the banking sector in the country, like its peers across the world, is taking to business transformation solutions.With the Indian banking sector poised to open up further by welcoming global competition, consolidation has gained momentum. This now means that the large banks, with disparate systems, cannot any longer assume that the current rate of growth and returns will continue given the nimbleness of some of the new players and the likely competitive environment in the financial services business.
6. The Indian banking sector is at a watershed. Brisk economic growth is opening up unprecedented opportunities. Several Indian banks are pursuing global strategies, as Indian companies globalise and people of Indian origin increase their investment in India. At the same time a number of global banks have stepped up their focus on India, keen to participate in the sector’s growth. Today, the question often asked is how competitive are Indian banks and do the practices at work in these banks compare against global best practices. To assess this, McKinsey & Co launched five proprietary surveys with help from the Indian Banks Association to profile leading Indian banks. The surveys administered were The McKinsey Personal Financial Services Survey; Excellence in Retail Banking Survey; IT Benchmarking Survey; Organisational Performance Profile Survey; and Asset-Liability Management Survey.
7. Raise a question on size to any of the old private bank chiefs, and all of them defend their space strongly. The common refrain – “We too have a role to play. We cater to a niche segment and there is room for growth. A vast majority of our populace still remain unbanked, under-banked. Small-size banks exist even in developed economies.”
8. Lakshmi Vilas Bank today announced the roll out of its 200th CBS branch. It has a branch network of 236 across 11 States and one Union Territory. The bank plans to unveil technology-driven products and multi-city cheque facility soon, besides providing Internet and mobile banking facility.According to a press release, the RBI has permitted the bank to open 15 new branches across the country by May 2008.
9. Exim Bank of India has entered into a line of credit (LoC) agreement for $45 million with the Government of Vietnam to finance construction of a power project in Vietnam. Bharat Heavy Electricals Ltd will construct the 200-MW Nam Chien Hydropower Project, at Son La Province. This is the second line of credit extended by Exim Bank to Vietnam, said a press release from the bank. The first LOC of $27 million was utilised to finance export contracts such as supply of equipmen t for cold rolling steel plan, hydropower plants, tea processing machinery and textile machinery from India to Vietnam.
10. Loss levels in small ticket personal loans and a portion of credit card receivables, which are currently at 7-9 per cent, could rise to 10-13 per cent in three years, said a report by Crisil Ratings.Terming this segment as ‘sub-prime’ assets in the Indian context, the report said that these are unsecured loans between Rs 5,000 and Rs 25,000-30,000. Of the total credit card receivables, about 15-20 per cent falls in the profile of low income groups.
