1. Pulock Chatterji, Secretary in Prime Minister Manmohan Singh's Office, has been appointed as the new executive director of World Bank for a term of three years beginning February 1, 2009.
2. The big banks are safe and smaller ones are getting a face lift. The government on Monday sought parliament approval to restructure the capital base of state-owned Uco Bank and Punjab & Sind Bank, aiming to help them lower their equity that would increase earning-per-share as they dress up go public. A supplementary demand for grants Finance Minister P Chidambaram said the government plans to convert Rs 250 crore of Uco Bank’s equity into “perpetual non-cumulative shares,” while Rs 560 crore of Punjab and Sind Bank will be converted into similar debt instruments.
3. If you are waiting to see a cut in your home or car loan rate after Monday’s cut by the Reserve Bank of India (RBI) in its signal repurchase (repo) rate by one percentage point, you may have to wait longer. Bankers are waiting to see what it does to their costs – and that may take a couple of months. There is nothing on the horizon to suggest a deposit rate cut either, because the RBI has freed up more than Rs. 1,00,000 crore from its cash reserves since October 11. The Prime Lending Rate (PLR) that bankers set is yet to take a cue from the repo.
4. The Indian government on Monday said banks have exposure of US$ 336 million in US-based investment bank Lehman Brothers, which has filed for bankruptcy.The banks' exposure to Lehman Brothers is US$ 336 million (Rs 1,580 crore) as on September 30, Finance Minister P Chidambaram told Lok Sabha in a written reply.The exposure mainly consisted of investments in floating rate notes, nastro balances, bank guarantees, forex exposures, etc, he said.
The banks have made aggregate provision of US$ 47.3 million (about Rs 220 crore) on these exposures.
The banks have made aggregate provision of US$ 47.3 million (about Rs 220 crore) on these exposures.
5. Indian Bank has earned a net profit of Rs 282.93 crore for the first quarter of the current fiscal against Rs 247.59 crore for the corresponding period of last fiscal. The Bank Chairman MS Sundarajan, releasing the unaudited financial results for the quarter, told reporters that the profit recorded a growth of 14.27 per cent over the previous year.The deposits, gross advances and total business also recorded a growth of 20.22 per cent, 47.36 per cent and 30.47 per cent respectively during the quarter.The deposits stood at Rs 64,614 crore against Rs 53,747 crore for the corresponding period of the last fiscal, advances at Rs 48,092 crore against Rs 32,636 crore and total business was Rs 1,12,706 crore against Rs 86,383 crore, he said.He said that the current global financial problem would not have any impact on the Bank's performence as it had lot of liqudity.
6. Public sector banks (PSBs) are giving more trouble to cash-crunched mutual funds (MFs) by not honouring some credit instruments and charging as high as 16 per cent, despite a special lending window set up by Reserve Bank of India (RBI) this week.MFs have seen Rs 36,000 crore flow out this month due to liquid fund redemptions by corporate customers, after a drain of Rs. 45,000 crore in September.The RBI has allowed MFs to borrow against bond-like certificates of deposits (CDs) but state-run banks are not accepting CDs issued by private banks. “If PSBs are practising discrimination on the papers of private and public sector banks, it is unfair,” said AP Kurien, chairman, Association of Mutual funds of India.
7. Public sector banks, with a market share of over 80 per cent, are gripped with a severe talent crunch. PSU banks are not really hot with those with the right qualifications and the few that do are quick to jump ship, leaving the behemoth banks with an attrition problem. But things might change soon.In a bid to draw talent, attractive pay packages for the entry level employees are on the cards. Industry sources say that the issue will be taken up once negotiations involving trade unions, government and the Indian Banks Association begin for wage revision, which is expected soon.
8. Clearing and settlement of around 120,000 transactions amounting to a total volume of Rs 4 lakh crore on the real-time gross settlement and electronic fund transfer platform came to a grinding halt today as the employees of the Reserve Bank of India (RBI) struck work across the country.there was no settlement in the domestic money market, transactions in the foreign exchange market will be settled tomorrow (under the T+1 settlement as against the usual practice of the real-time settlement).A banking source said that if the current trend continues, state-owned banks would have very few qualified people left to man the show by 2020. About 50 per cent of the officers currently employed with PSU banks are over the age of 40.
9. It had been a week like never before on Wall Street. Lehman Brothers Holdings, the fourth-largest US securities firm, was bankrupt. The credit markets, which Goldman uses to fund its business, were frozen. And Treasury Secretary Henry Paulson, Blankfein’s predecessor as chief executive officer of Goldman, was begging the Congress for $700 billion to save the financial system. Goldman’s stock had plunged as much as 26 per cent in just one day.In the brief meeting in lower Manhattan that warm Sunday, according to a person familiar with the events, Blankfein told his lieutenants the firm would become a bank holding company, ending its run as the jewel of global investment banks.
10. ICICI Prudential Life Insurance reported a 56 per cent growth in premium in the half year ended September 30, 2008. The premium rose to Rs 6,726 crore from Rs 4,311 crore in the corresponding period last year.The insurance firm wrote 1,285,000 policies at a sum of Rs 1,82,427 crore in the period from April to September 2008 as against 1,099,000 policies in the same period last year, a growth of 17 per cent. Renewal premium rose significantly by 90 per cent to 3,423 crore.
