1.Private sector lender Yes Bank today said its net profit rose 24.20 per cent to Rs 80.11 crore during the fourth quarter of FY09 despite an eight-fold increase in gross non-performing assets (NPA). Net interest income in the quarter rose 45.4 per cent to Rs 155.2 crore, as against Rs 160.7 crore in the year-ago period. However, its non-interest income declined 16.6 per cent, from Rs 107.6 crore in the quarter ended March 2008 to Rs 89.8 crore in the quarter under review. Gross NPAs rose to Rs 84.93 crore during the quarter, as against Rs 10.57 crore last year. As a proportion of advances, gross NPAs were estimated at 0.68 per cent at the end of 2008-09, as against 0.11 per cent in the corresponding period in the previous year. Higher gross NPAs have resulted in a 40.93 per cent increase in non-tax provisions to Rs 32.19 crore.
2. Shikha Sharma, who is likely to join Axis Bank in August, will have to start the search for at least two top-level executives soon after she takes over as the managing director and chief executive officer.Of the four internal contenders who were in the reckoning for the top job at the country’s third largest private sector lender, MM Agarwal, executive director for corporate and international banking, has already expressed his desire to leave the bank. Though V K Ramani, ED for technology and business processes, is unlikely to quit immediately, he is scheduled to retire by October-end.
3. Infrastructure Development Finance Company (IDFC), a non-banking finance company (NBFC), has revived its plan to enter the banking space.Sources close to the development told Business Standard that IDFC is hunting for a mid-size private sector bank that could lend the company a banking status through a share swap deal.A source close to the development said that IDFC, which has been trying to get a banking licence from the Reserve Bank of India (RBI) for over a year now, has appointed two investment banking firms — IDFC-SSKI and Kotak Mahindra Capital — as advisors for working out modalities on shortlisting a bank for a potential merger.
4. State Bank of Mysore (SBM), the Bangalore-based associate bank of SBI, is aiming at a growth of 30.9 per cent growth in its advances to Rs 33,880 crore and 29.3 per cent growth in deposits at Rs 41,888 crore for FY10 as compared to FY09.
5. There has been a sharp increase in the use of IT in banking services. The Reserve Bank of India devoted almost three pages to it in Annual Policy Statement for 2009-10, released on Tuesday. With the cellular user base expected to touch 600 million by 2010, the volume of pre-paid card recharging alone could exceed the $4-billion mark. Bharti Airtel launched its mobile payment services in June 2008 and has already got one million registered users. “mCommerce will be one of the top three services offered over mobile in the future,” said an Airtel spokesperson. International remittance is another service that operators are piloting in India.
6. HDFC Bank, the second largest private sector bank, has reduced the interest rates on deposits of some tenors by 25-35 basis points, with immediate effect.According to data on the bank’s Web site, the bank has cut the rates on deposits having maturity periods ranging from one year and up to eight years to 7.75 per cent.
7. The Reserve Bank of India has deferred the opening up of the banking sector for foreign players and decided to continue with the current policy and procedures governing the presence of foreign banks in India.In its Annual Policy Statement 2009-10, the RBI said, “In view of the current global financial market turmoil, there are uncertainties surrounding the financial strength of banks around the world. Further, the regulatory and supervisory policies at national and international levels are under review.”
8. Though banks are reluctant to cut rates, some will prune their deposit rates within a month; rates for certificate of deposit (CD) were already down on Tuesday. Lending rates could soften at a later stage. Payment of interest on savings bank account on a daily product basis, wef April 1, 2010 I: Savers will get more out of their savings account and banks’ total payout would be much more. So, if an investor parks Rs 2 lakh and withdraws it 2 days later, she will get interest for two days instead of the lowest balance between 10th and 30th of a month. This is similar to liquid schemes of mutual funds.
9.Kotak Mahindra bank plans to file a petition against the merger of the two companies before the Madras High Court on Thursday — a day ahead of the hearing of a string of petitions on the same issue, including those by Azim Premji’s Zash Investment and ICICI Venture. Meanwhile, the Madras High Court on Wednesday directed Subhiksha Trading Services to submit copies of balance sheets of the past three years and all accounts from April 2008 till date to the provisional liquidator (PL) appointed by the court. It gave the respondent 10 days to submit the same.
10. Banks' settlement with defaulting borrowers will now specifically exclude criminal cases lodged and proceedings with regard to criminality would continue even after the settlement of the civil cases, Indian Banks' Association (IBA) said on Thursday. The IBA decision comes against backdrop of two recent cases where the courts absolved the defaulting borrowers of any criminal wrongdoing who had entered into One Time Settlement (OTS) agreements with banks and where banks withdrew all charges against them.
