Tides of 17.07.2015

1.       SBI is seeking the government's permission to dole out up to 3% of its annual profits to staff in incentives in an attempt to draw top talent that normally make a beeline for private sector behemoths such as ICICI Bank and HDFC. The state-run giant also plans to give stock options to employees above the rank of assistant/deputy general manager, hoping that it will help retain talent.

2.        With the Centre doing away with sub-limits for foreign investments in Indian companies, domestic banks, especially those in the private sector, could benefit from enhanced capital-raising options from overseas investors. Currently, the different types of foreign investments include foreign direct investment (FDI), foreign institutional investors (FIIs), foreign portfolio investors (FPIs), non-resident Indians (NRIs), qualified foreign investors (QFIs), and depository receipts (DRs). Each class of these investors is allocated a sub-limit for investment in the capital of an Indian company.

3.        Grocery shopping, grooming, karaoke, virtual desktops, cinema and dramatics will soon be a part of YES Bank employees’ breaks or after work hour sessions at its national operating centre in Chennai. In a bid to make the workplace more informal, the mid-sized private sector lender has leased a four lakh square feet operating centre in Chennai and will offer employees, numbering about 500, the facilities mentioned. This centre will be operational in about eight to nine months. The bank added that it plans to increase the staff count at this centre to about 4,000 in 3-4 years. The operating or processing centre will be a multi-purpose facility that can host project management workshops and stand-up meetings, among others. It will host a personality grooming facility and round-the-clock cafeteria aimed at increasing productivity.

4.        Innovation lab : YES Bank  will also house an innovation lab that will showcase the best-in-breed technology/digital solutions upcoming in the bank.  The Bank is also encouraging building of clubs pan-India for team bonding and activities that are not very tightly-controlled. The lighting, colour of cabins, seating arrangements, wall-video conferencing for meetings in the same office, etc, will be looked at. Bank  wants  to create a centre with both a human touch and technology.

5.        A significant volume of transactions at ATMs of Karnataka Bank comes from customers of other banks. This was revealed at the 91st annual general meeting (AGM) of shareholders of the bank in Mangaluru on Thursday. Replying to a query by a shareholder, who wanted to know the profit from ATM transactions, P Jayarama Bhat, Managing Director and Chief Executive Officer of the bank, said all the ATMs of the bank are profit centres. However, he added, profits cannot be quantified as there are indirect benefits also. “As and when we get more of acquired transactions (that is from other banks’ customers) we stand to gain. Around 60 per cent of our ATM transactions are from other banks’ customers,” he said, adding that the bank gets almost Rs. 15 a transaction from other banks.

6.        IndusInd Bank has launched a service called QuickPay, which enables the bank’s customers to send money instantly to their personal contacts and/or business parties through SMS, e-mail and social media. This does not require the beneficiary bank account details. The sender can transfer money and a personalised message through net banking from the bank’s website by just filling the e-mail ID or mobile number of the receiver.

7.        The RBI has directed banks to ensure their overall direct lending to non-corporate farmers does not fall below the system-wide average of the last three years. Further, it has cautioned them that failing to do so will attract the usual penalties for shortfall. The directive comes in the wake of the Centre expressing concerns over the adverse impact of any reduction in direct credit to individual farmers, given the recent weather-related difficulties.  The central bank also said that banks should continue to make all efforts to reach the level of 13.5 per cent direct lending to beneficiaries who earlier constituted the direct agriculture sector. The target for small and marginal farmers under the recently revised Priority Sector Norms has been increased to 7 per cent for 2015-16 and to 8 per cent for 2016-17. A variety of corporate loans has been precluded from getting direct lending status. This is to ensure that overall direct lending to agriculture will increase.