Tides of 16.08.2015

1.  The government has announced appointments of MD & CEOs for five more banks besides declaring the names of non-executive Chairmen in five banks. However, these appointments are subject to the outcome of a writ petition filed in the Supreme Court. The government’s move has raised questions over the rationale to make such announcements given the uncertainty.In a departure from tradition, at least four of those appointed in the latest round have come from the private sector. The Finance Ministry is also looking at allowing private sector candidates to laterally come into middle management roles. For Bank of Baroda, the non-executive Chairman and the Managing Director & CEO have come from the private sector.While PS Jayakumar, MD & CEO of VBHC Value Homes, has been appointed Managing Director and CEO, Ravi Venkatesan, an independent director at Infosys, has been appointed non-executive Chairman.Usha Ananthasubramanian, who is currently Chairperson of Bhartiya Mahila Bank, has been appointed MD & CEO of Punjab National Bank.In the case of Bank of India, MO Rego — who is currently Deputy MD at IDBI Bank — has been appointed MD and CEO of the public sector bank. And, G Padmanabhan, retired Executive Director of the Reserve Bank of India, has been appointed non-executive Chairman. For Canara Bank, the Centre has appointed Rakesh Sharma of Laxmi Vilas Bank, as the new MD & CEO. TN Manoharan, Director at Tech Mahindra’s public health foundation, has been appointed non-executive Chairman of Canara Bank. G Narayanan, retired Executive Director of Indian Overseas Bank, is the new non-executive Chairman of Vijaya Bank. TCV Subramanian, retired Chairman and Managing Director of Exim Bank, has been appointed the non-executive Chairman of Indian Bank. The Centre has also appointed Kishore Kharat Piraji, Executive Director at Union Bank of India, as Managing Director and CEO of IDBI Bank. The entire selection process for the top posts in the five major banks — Bank of Baroda, Bank of India, Punjab National Bank, Canara Bank and IDBI Bank — has been transparent and based on merit. A three-stage screening was conducted for MD’s position, culminating in a final interview by three different panels. There are some vacancies of non-official directors on the board of PSBs and the selection process for these will be completed in the next three months. The selection of non-executive chairmen in the remaining six PSBs will also be completed in the next three months. The appointment of MDs and CEOs in two other banks will also be done as early as possible.

2.  The Kerala State Financial Enterprises (KSFE), a non-banking company fully-owned by the Kerala Government, has asked for regulatory approvals to expand its operations outside the State. It also needs some enabling provisions in other laws that will allow it to recover money lent to borrowers. Principally, it is awaiting nod from the Finance Ministry to enable it to use the Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act for recoveries in its lending operations.For this, it will have to be notified as an institution of public interest. The matter is in an advanced stage of discussion with the Centre and the institution is hopeful of getting the necessary approvals soon. The Sarfaesi Act would empower KSFE to attach and auction the property of defaulters without having to go through an elaborate court procedure. In Kerala, it does not have a problem with recovery, since its dues enjoy the status of a revenue recovery, being an arm of the State Government. “With the Sarfaesi Act in place, we will be able to branch out and go outside Kerala,” P Rajendran, Managing Director, KSFE, said. This would enable the company to expand its branch network to 1,000 from the present 530 branches. Eyeing a 25-30 per cent annual growth, KSFE hopes to double its business to Rs. 50,000 crore in the next five years from Rs. 26,000 crore now, in the process becoming a one-stop financial supermarket.As part of these plans, KSFE will spread out and establish a presence in every panchayat as announced in the Budget presented two years ago, PT Jose, Chairman of KSFE, said.KSFE is currently serving about 15 lakh customers and there is enormous potential for further growth, he said.In the second phase of expansion, he said, KSFE will be rolling out white-label ATMs in almost all major urban and semi-urban branches. This will begin from January next year.The company is also in the process of developing a core software package suitable for chit operations in all the branches, which will be implemented from October, Jose said.

3.  State Bank of India is strengthening its presence in the SME space using information technology and digital tools, according to B Sriram, MD(National Banking Group). Addressing media persons at the opening of the 1,000{+t}{+h}branch in the Chennai Circle, a branch to meet the needs of high net worth individuals (HNIs), he said the bank is appointing relationship managers to facilitate interaction with SMEs.It is also using digital analytics to identify good customers and generate leads for risk-mitigation.Digital technology is helping the bank reach out better to smaller businesses. For instance, through its tie-up with Ola Cabs, the bank funds individual drivers who want to buy cars and join the Ola fleet. The loan repayments are made on a daily basis, with a portion of the fare in each trip going towards repaying the loan. This way, the bank also keeps a closer watch on its money, he said.

4.  Corporation Bank has signed an agreement with NCDEX e-Markets (NeML) and three warehouse service providers — LTC Commercial Company (P) Ltd, Navjyoti Commodity Management Services, and Kalyx Warehousing Pvt Ltd — for pledge finance through electronic mode.This facility will enable farmers and traders to use their goods or produce stored in the warehouses of approved warehouse service providers (WSPs) through e-pledge. E-pledge is a process by which any registered member, after depositing commodities in an NeML-accredited warehouse, can apply online to the bank to get finance against the electronic holding, said a press release from the bank.The empanelled WSPs act as collateral manager responsible for the commodity’s safety, stock management, insurance, deposit and delivery. NeML acts as the facilitator, bringing depositors, the WSP and the bank under one roof.

5.  Federal Bank has launched what it claims to be India’s first mobile app for opening a bank account.This mobile-phone-based account opening facility is an update to FedBook, an e-passbook app, which was launched two years ago.Anyone having an Aadhaar card and PAN card can now open a savings bank account instantly using a mobile phone.

6.  The new account can also be funded with an initial remittance not exceeding Rs. 10,000, a bank statement said.Download FedBook.To open an account, one has to download the FedBook on one’s mobile phone and follow two easy steps — take a selfie, and scan the Aadhaar and PAN cards.The App verifies the Aadhaar card in real time and opens the account on the click of a button.Once the account is opened, the app turns itself into the digital passbook for the customer.On Android, iOS.The app is currently available on Android and iOS phones and will soon be available on Windows and BlackBerry phones too.The app was launched simultaneously in Mumbai and Kochi.

7.  Govt launches mission 'Indradhanush' to revamp PSU banks. The government  would infuse Rs 20,088 crs into 13 PSU banks within a month's time with country's largest lender SBI cornering a hefty Rs 5,531 crs. "The proposals can help public sector banks effectively deal with the malaise of NPAs (non-performing assets), and potentially grow faster than our earlier estimate of 12 per cent annually till fiscal 2019," Crisil said in a statement.