1 A resolution of Lakshmi Vilas Bank to raise funds through issue of shares to qualified institutions was passed by shareholders on Thursday at the annual general meeting, after the management agreed to modify the resolution.Sources said that a number of shareholders spoke in opposition, but voted for it after the management modified the resolution to the effect that the shares will be sold at a price not less than 2.5 times the book value at the time of placement of shares.Lakshmi Vilas Bank’s book value today stands at around Rs 85. At this level then, the shares cannot be placed at Rs 212.50 a share. On the National Stock Exchange, the bank’s shares closed today at Rs 94, less than Rs 0.45 than the previous close.The Bank’s Managing Director, Mr V. S. Reddy, told Business Line today that the management decided to modify the resolution to allay fears that the shares would be given away at a low price.
2. Karur Vysya Bank has effected an upward revision of 50 basis points on the rates offered on term deposits in time buckets ranging from 181 days to 3 years, from August 11. The interest on deposits for periods from 181 days but less than 1 year has been hiked by 50 basis points to 8.50 per cent and deposits in the one to two year time period by 25 bps to 9.75 per cent (9.50 per cent) and deposits maturing beyond 2 years and inclusive of 3 years would earn 10 per cent (9.75 per cent). It has also hiked its benchmark prime lending rate to 15.25 per cent with immediate effect..
3.The Finance Minister, Mr P. Chidambaram, on Wednesday said that Central public sector enterprises (CPSEs) appear to be violating Government departmental guidelines on placement of funds with banks.“They (CPSEs) are continuing to call for competitive bids… nor are they observing the guidelines that 60 per cent of public sector companies’ monies should be kept with public sector banks. I intend to take up this matter with the Department of Public Enterprises (DPE)”, Mr Chidambaram told reporters after a meeting with the chief executives of public sector banks here today.
4. ith certificates of deposit (CD) headed to breach the 11-per cent mark on the back of tight liquidity, banks have started waiving penalties for loan prepayments.Prepayment penalties were mostly levied by the domestic private sector and foreign banks. The penalties ranged anywhere between one and three per cent of the outstanding loan principal amount. Public sector banks have long done way with the prepayment charges. But private sector banks have now followed suit.ING -Vysya Bank sources said, “We have already done away with penalties on partial prepayments.”Banks typically resisted prepayments when interest rates were low and liquidity was in surplus.Bankers said that the move was influenced by tight liquidity conditions and soaring costs of working funds.The Finance Minister also plans to talk to the Minister concerned (Ministry of Heavy Industries) and call a meeting of CPSEs to urge them to desist from such an unhealthy practice.
5.The recent appreciation of the euro against the Indian rupee has underlined a point that most corporate CFOs intuitively know, but apparently do not always play by: there is a need to be well hedged.Last year, taking a call on the rupee was a one-way bet. Those who had to receive dollar – such as exporters – were battered, while those who had to make payments in the currency were thrilled. The rupee was going down slightly against the euro, and suggestions about shifting to euro receivables were commonplace.Now, the complete reversal of the trend in the last few weeks has turned the spotlight on the need to manage currencies better.
6. Bank unions are planning a one-day strike on August 20 to protest the merger of public sector banks, even as the final Government order on merger of State Bank of Saurashtra with State Bank of India is expected any time now.A union official said three bank unions — All India Bank Officers Association (AIBOA), All India Bank Employees Association (AIBEA) and the Bank Employees Federation of India (BEFI) will join the strike. The other six bank unions have decided not to join the strike and are adopting a wait and watch policy. The merger of State Bank of Saurashtra with SBI is only a prelude for things to come, with the Government looking at privatisation.
.7. HSBC would like to hold on to its stake in Indian private sector lender Axis Bank in the short-term, its India head said on Wednesday.Naina Lal Kidwai, HSBC's country head, said it did not make sense to sell the shares after a fall in the stock's price. Axis Bank shares are down more than 20 percent in 2008.
8. According to research by Seclore Technology, a data security firm that developed the Filesecure information protection software, 80 per cent of consumers’ personal information lies in unprotected files.This lack of security means pesky telemarketers could get hold of your personal information and phone numbers easily, terror groups could use your name and details to send threats, and corporate rivals could get hold of soft copies of your company letterhead to sabotage your operations and ruin your name.
9.State Bank of India (SBI) has launched its first debit card in Canada to raise its client profile in Toronto.SBI is also looking at 84 locations globally to increase its association with international business, chairman OP Bhatt said Wednesday while launching the card in Toronto.With seven branches across Canada, the State Bank of India-Canada (SBIC) - SBI's 100 per cent-owned subsidiary - claims to have captured 65 per cent of the trade conducted between that country and India.
10. A working group set up by the Reserve Bank of India has suggested that all the regional rural banks (RRBs) should move to the core banking platform by September 2011. This will help them undertake 90 per cent of their business on the platform.The cost of moving RRBs to core banking services (CBS) is estimated at Rs 730.78 crore. All RRBs are likely to get financial help but sponsor banks may have to contribute 25 per cent of the cost.
