Tides of 30.07.2007

1. Union Bank of India (UBI) is eyeing a slice of the reverse mortgage pie and expects to finalise the product details in about two months.The bank is undeterred by concerns expressed about growing delinquency in personal and housing loan repayments and plans to have 33 Retail Asset Branches (RABs) that would deal with a slew of products, before the end of the current fiscal.

2. In the wake of inflation moderating, the Confederation of Indian Industry has suggested that the monetary tightening measures introduced earlier by the RBI to contain inflation be eased.The non-food credit offtake during the period March 31 and May 25 reduced significantly. The non-food credit outstanding during this period declined by more than two per cent to Rs 18,41,656 crore as on May 25.The total bank credit also registered a similar downward movement.

3. ICICI Prudential Life Insurance has increased its capital base by Rs 300 crore to Rs 2,372 crore. The capital has been infused by the promoters ICICI Bank and Prudential plc, in the existing proportions of 74:26 respectively. The additional capital will be used to fund the high up-front expenses and meet the solvency norms. It will also enable ICICI Prudential to continue driving its expansion strategy over the next year, which includes opening new branches and offices across the country as well as scaling up operations.

4. Select branches of Indian Bank will work on all seven days of the week for a few months to sanction education loans to meritorious students, said the bank’s Chairman and Managing Director, Mr M.S. Sundara Rajan. Addressing newspersons on Saturday, he said that as counselling for admission to higher education courses would be completed shortly, the bank anticipated a large number of applicants for education loans.

5. SBI’s performance looks spectacular, although the gloss has much to do with a relatively poorer performance a year ago. At that time (quarter ended June 2006), profits had dipped 35 per cent to Rs 799 crore due in part to a drop in treasury income and the presence of a tax refund in the earlier year).On the average most banks have reported a 35 per cent growth in profits this quarter, riding on the back of a fairly consistent increase in interest income.

6. Backed by a strong growth in net interest income and other income, Bank of Baroda posted 102.6 per cent growth in its net profit for the quarter ended June 30, 2007, at Rs 330.84 crore from Rs 163.32 crore in the corresponding quarter of the previous year.The other income went up by 64.38 per cent to Rs 370.19 crore from Rs 225.20 crore. Net interest income was up 15.5 per cent to Rs 958.6 crore from Rs 829.9 crore.Total income for the quarter grew by 37.94 per cent to Rs 3,024.8 crore (Rs 2,192.87 crore). The net interest margin was at 3.2 per cent (3.19 per cent). The bank has set a target to keep its NIM over 3 per cent. Operating profit was up 28 per cent to Rs 644.46 crore (Rs 503.52 crore). Its capital adequacy ratio (CAR) stood at 14.33 per cent.

7. A consortium of lenders led by State Bank of India has committed Rs 7,793 crore to Guru Gobind Singh Refinery Ltd, which is setting up a 9 million tonne refinery at Bhatinda in Punjab.
The company is a joint venture between Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investments Pvt Ltd, Singapore. HPCL and Mittal Investments will be equal partners in the company (49 per cent each). The remaining 2 per cent will be raised from financial investors.The project, which has a debt equity ratio of 1.5:1, envisages an outlay of Rs 13,789 crore. The entire debt is designated in Indian rupees.

8. The country’s forex kitty swelled by $3.087 billion to $222.043 billion for the week ended July 20 on continuous RBI intervention in the forex market and revaluation of non-dollar currencies, especially the euro against dollar. The reserves had gone up by $4.12 billion to $218.956 billion for the week ended July 13. Foreign currency assets rose $3.087 billion to $214.79 billion, said the RBI’s Weekly Statistical Supplement.

9. J&K Bank on Friday reported a 33.44 per cent increase in net profit for the quarter ended June 30 to Rs 83.24 crore compared with Rs 62.38 crore recorded in the same period last year.
Interest earned for the quarter under review stood at Rs 575.05 crore as against Rs 454.65 crore in the same period last year. The 33 per cent growth in net profit in the first quarter has been driven by a 32 per cent increase in advances and about 113 basis points increase in yield on advances from 9.1 per cent to 10.23 per cent.

10. Karnataka Bank Ltd has posted a net profit of Rs 51.79 crore for the first quarter of the current financial year as against Rs 36.78 crore in the corresponding period of the previous year, recording a growth of 40.81 per cent. The increase in net interest income and higher yield on advances contributed for the growth in net profit. The net interest income rose 30.51 per cent to Rs 124.4 crore (Rs 95.32 crore).

11. With the change at the helm, there has been a shift in gears. The new Chairman and Managing Director of Indian Overseas Bank, Mr S.A. Bhat, intends to go slow on activating the bank’s financial services subsidiary, which recently obtained the RBI’s nod for stock broking activities. At a press conference here, he said that the bank would not begin stock broking activities. Other financial services such as wealth management and merchant banking could well be provided by the parent bank.

12. In an effort to help NRIs in buying homes, HDFC has opened special counters at its offices in Coimbatore, Erode, Palakkad and Salem. Trained counsellors would help the customers in property search, explain the different products available and provide them advice on legal and technical issues. In a release, HDFC said since their holiday season coincided with HDFC’s ‘Monsoon Festival’, customers who apply for loans on or before August 14 and availing themse lves of disbursement by August 31, would be offered special interest rates.The special NRI counters would function from July 27 to August 5.

13. The initial public offering of Central Bank of India was subscribed 61.94 times. Bids were received at lower end of the price band of Rs 85 – 102. A total of 495.4 crore bids were received against the issue size of 8 crore equity shares.

Tides of 27.07.2007

1. Dena Bank registered a 201 % growth in its first quarter net profit at Rs 55.58 crore, against Rs 18.49 crore in the corresponding quarter of the previous year. The growth in net profit is due to a rise in operating income. “Interest and non-interest income have shown strong growth this quarter”.Interest income Net interest income grew by13.85% to Rs 224.69 crs from Rs 197.36 crs a year ago. Total income for the quarter ended June 2007 increased 30% to Rs 702.42 crs, compared with Rs 539.61 crs in the year-ago period.

2. ING Vysya Bank has reported a net profit of Rs 25.32 crore in the first quarter (Q1) of the current financial year 2007-08 (FY08), a 71.2 per cent increase over Rs 14.79 crore in Q1 of FY07.The bank’s gross income in Q1 FY08 was Rs 486.38 crore up from Rs 364.07 during the corresponding quarter of the previous year. The rise in gross income was driven by a rise in interest income. Interest income rose to Rs 428.47 crore from Rs 321.19 crore driven by improved credit offtake. Advances increased 23.3 per cent to Rs 11,810 crore from Rs 9,578 crore.

3. The Reserve Bank of India has imposed a penalty of Rs 10 lakh on Catholic Syrian Bank Ltd for non-adherence to Know-Your-Customer norms and AML standards while opening and operating certain accounts and failure of the bank’s internal control systems in detecting the irregularities. The RBI had earlier issued a show-cause notice to the bank and on a careful examination of the bank’s reply, the RBI found that the violations were conclusively established and the penalty was accordingly imposed.

4. Bank depositors put a bulk of their money in short-term deposits, especially below one year. Driven partly by the incentive of higher rates for such deposits offered by many banks during the past year, depositors have parked their money across different periods starting from a fortnight to a year and more. Banks offered a rate of 9.5 per cent to 10.5 per cent for deposits of periods ranging from 12 months to 18 months through last year.

5. What if you lose your ATM card and even before you realise it, all your money is drawn and someone just walks away with all that you so dearly earned and saved since years? Banks such as HDFC, HSBC and State Bank of India have taken a step to prevent such frauds and thefts in their ATMs. Some of them have already installed ATMs with anti-fraud mechanism. NCR Corporation, a major player in the field of ATM manufacturing, has introduced a Fraudulent Device Inhibitor to put a check on the rise in the number of frauds. The company is in talks with a couple of private and public sector banks to install ATMs enabled with the device .

6. Bank of India has registered a 51 per cent growth in Q1 net profit at Rs 315 crore, against Rs 209 crore in the corresponding quarter of the previous year. Increase in both interest and non-interest income and higher non-performing assets (NPA) recoveries have boosted profits. Net interest income increased 23.7 per cent to Rs 947 crore (Rs 765 crore). Non-interest income rose 23 per cent to Rs 381 crore (Rs 311 crore).The bank’s net interest margin (domestic) went up from 2.95 per cent to 3.06 per cent. However, net interest margins of foreign businesses declined to 1.2 per cent from 1.3 per cent.

7. Punjab National Bank (PNB) expects to register a 20 per cent increase in net profit this fiscal on the back of a stable interest rate environment and higher business turnover arising from economic growth. For the first quarter ended June 30, 2007, it has reported 15.7 per cent increase in net profit to Rs 425.07 crore compared with Rs 367.52 crore in the same period last year. This bottomline growth came even as the net interest margin (NIM) saw a decline from 4.07 per cent as on March 30, 2007 to 3.82 per cent as on June 30, 2007. “In a competitive environment, high NIMs are not sustainable. Do not ridicule a bank just because its NIM is coming down. Even though its NIM has come down, the Bank has increased its net profits by 15.7 per cent. It wants to maintain our NIM at 3.75-3.8 per cent levels.

8. Backed by a growth in its fee-based income, IndusInd Bank has posted a 65.04 per cent growth in its net profit for the quarter ended June 30, 2007 to Rs 13.22 crore from Rs 8.01 crore in the corresponding quarter of the previous year. The fee-based income was up 53.34 per cent to Rs 22.28 crore (Rs 14.53 crore).

Tides of 18.07.2007

1. One of the most prominent developments in Indian banking in the recent past has been the rapid growth of the retail loan portfolios of private sector commercial banks. The growth posted by some of the private sector banks has been such (a near doubling of retail credit in around two years which shows an annual rate of growth of around 35 %) as to overshadow the more modest attainments on this front by other b anks — particularly the public sector banks. It has also created the perception that overall economic conditions have so changed that a major shift in business strategy (such as the dominant focus on retail banking as against wholesale banking) is quite inevitable and the future lies only in retail banking expansion.

2. Concerned over the retail deposit chase at high rates of interest, the Union Finance Ministry has asked public sector banks (PSBs) to focus on raising low-cost funds, particularly current account and savings account (CASA).Barring a handful of PSBs, most large banks currently have a CASA base of barely 20 per cent. The Ministry, at a meeting with top bankers, has conveyed that it wanted this ratio to be raised to 35 per cent of their respective demand and time liabilities, said the head of a PSB who attended the meeting. Among the banks that are close to the Ministry’s prescribed CASA, include Central Bank of India and Vijaya Bank.

3. If you are a regular customer of Net banking and receive any mail from your bank asking for information update or reconfirmation of your particulars, think twice before clicking on the mouse. The mail could be originating from a proxy bank intending to access your confidential information, cautions Mr Patrik Runald, Senior Security Specialist, F-Secure Labs, Malaysia.“Globally, accessing confidential account information through proxy banking has been on the rise and given the pace at which the banking sector is growing in India, attempts are already being made to crash into banking information of netizens in India.

4. The Finance Minister, Mr P. Chidambaram, said on Monday that all the 29 Regional Rural Banks (RRBs) with negative networth would be recapitalised by March 2010. This is however subject to the nod of the States’ which have a 15 per cent stake in each of the RRBs.“We intend to write to the State Governments and ask them to contribute their share in the recapitalisation. Where State Governments agree to bring in their 15 per cent contribution, those RRBs would be recapitalised immediately,” Mr Chidambaram told reporters after his nearly four-hour long meeting with the Chairmen of RRBs here on Monday.Of the 96 RRBs, 29 have a negative networth. The total fund requirement for recapitalisation has been estimated at about Rs 1,850 crore.

5. Foreign companies will have much easier access to Indian capital markets. The government on Tuesday eased guidelines for Indian Depository Receipts (IDRs), doing away with turnover-based ceilings and relaxing the requirement for foreign companies to have a profit and dividend track record for five years. The rules are intended to bring the Indian stock market norms for foreign companies in step with global markets. The new provisions will deepen the stock markets and also result in slowing the build-up of foreign exchange reserves.

6. KV Kamath, managing director & CEO, ICICI Bank, said interest rates are expected to come down in the next three months—or by the time the next mid-term credit policy is announced.
Speaking to reporters here on Tuesday, Kamath said interest rates have reached a level where cost to borrowers has gone up 33%, leading to a slowdown in credit off-take. The demand for funds will taper off significantly over the next few months, predicted Kamath, who is also the vice-president of CII.

7. The new generation private sector UTI Bank has finally received unanimous approval from its shareholders to raise equity capital of over $1 billion through a mix of global depository receipts (GDRs), qualified institutional placement (QIP), and a preferential allotment to promoters, using both the domestic and overseas routes.

Tides of 16.07.2007

1. Recapitalisation of Regional Rural banks with negative net worth is likely to come in for some elaborate discussion here on Monday, when the Union Finance Minister, Mr P. Chidambaram, meets the Chairmen of RRBs from all over the country. Of the 96 RRBs, 29 RRBs comprising 11 amalgamated and 18 standalone RRBs have a negative net worth. The total fund requirement for recapitalisation of these 29 RRBs has been pegged at Rs 1,814.86 crore.

2. The High Powered Committee on Mumbai as International Financial Centre has made interesting recommendations, but it is difficult to say at this point if they are feasible politically and technically. For even as Mumbai has to become an IFC, India has also to be competitive.

3. Aviva Life Insurance is planning to join hands with the cooperative banks in India to expand its reach besides augmenting its direct sales force significantly.

4. While piloting the SBI (Subsidiary Banks Laws) Amendments Bill 2006 in Parliament, the Finance Minister had declared that the merger of the associate banks with SBI was not being considered as these banks had special regional character and the aspirations of the people of the regions were involved.

5. The increase in cost of deposits and its consequent pressure on operating margins notwithstanding, Corporation Bank reported a 22.79% rise in net profit for the first quarter ended June 30, 2007 at Rs 177.11 crore compared with Rs 144.24 crore recorded in the same quarter last year. Most of the net profit this quarter came from our core banking operations. The growth in net profit is mainly due to higher volumes. Its margins are under pressure. The Bank is not able to pass on increase in cost of deposits fully to the borrowers.

6. Allahabad Bank has registered a 56.26% growth in net profit at Rs 200.4 crore during the first quarter of 2007-08 from Rs 128.25 crore in the corresponding period last year.
The net profit growth was powered by improved NPA (non-performing asset) management, higher income from operations and cost control.Total income during the first quarter stood at Rs 1,535.1 crore (Rs 1,095.2 crore), up 40.17 per cent.Total business currently stood at Rs 1,03,379 crore, comprising Rs 62,819 crore deposits and Rs 40,560 crore advances.

7. IDBI Bank has tied up with Sumitomo of Japan for trading in carbon credits. IFC and Sumitomo would help find buyers in various geographies.This is at least the fourth tie-up the bank has entered into for trading in carbon credits. Earlier, in October 2006, IDBI Bank had tied up with MITCON Consultancy Services Ltd of Pune. MITCON has expertise in project identification and registration of clean development mechanism (CDM) projects with the United Nations Framework Convention on Climate Change.

8. Public sector banks’ (PSBs) lending to minorities is set to once again come under Government scanner. These banks have now been asked to submit to the Government the status of their branch opening efforts in the 121 minority dominated districts of the country.Official sources said that the Finance Minister, Mr P. Chidambaram, is expected to personally review this issue during his meeting with the Chief Executives of PSBs here on August 1.The Government has been advising the PSBs to step up lending to minorities under priority sector. In particular, they have been asked to open more branches in minority dominated districts (as identified by the Ministry) of the country.Besides reviewing the action taken report in respect of decisions taken in the last meeting of April 19, Mr Chidambaram is also likely to evaluate the financial performance of PSBs for the year ended March 31, 2007.

9. Vijaya Bank would be opening its first overseas branch shortly and had already got the RBI assent for the same.The overseas branch would be set up either in Dubai, Hong Kong or in Malaysia.The bank had plans to increase its number of branches to 1,050 by March 2008 and of them at least 30-32 branches would set up in Karnataka. The bank had already received licences for setting up 25 branches.

10. The Central Board of Direct Taxes (CBDT) plans to extend the refund banker scheme to Chennai, Kolkata, Mumbai and Bangalore from September. At present, the scheme is operative in Delhi and Patna. Under the scheme, a scheduled bank is authorised to issue refund instruments on behalf of the income-tax department. In the case of Delhi and Patna, SBI was authorised to issue refund ins truments on behalf of the tax department.

11. Corporation Bank, presented a final dividend cheque of Rs 41 crore to the Union Finance Minister, Mr P. Chidambaram, in New Delhi recently. With this the total payout as dividend for the financial year 2006-07 comes to 90%.

Tides of 11.07.2007

1. The Tatas are picking up a stake in the Mumbai-based Development Credit Bank (DCB), which could just fall short of the 5-per cent mark. The investment is being routed through the newly formed Tata Capital Ltd, a company created to give an added focus to the group’s presence in the financial services business.

2. IRDA has cancelled the direct insurance broker licence of New Delhi-based Paramount Insurance Brokers Pvt Ltd.

3. RBI Governor, Dr Y.V. Reddy, called on the Union Finance Minister, Mr P. Chidambaram, at the latter’s North Block office here.Indications are that the discussions, which lasted over two hours, centred around issues such as rupee appreciation and its impact on exporters, inflation situation in the economy and policy initiatives that may be required at the Central Bank’s forthcoming quarterly review of monetary policy on July 31.

4. Driven by a surge in other income and healthy growth in deposits and advances, HDFC Bank posted a 34.2 % rise in net profit. The bank’s net profit for the first quarter ended June 30, 2007 was at Rs 321.23 crs against Rs 239.3 crs in the corresponding quarter of the previous year.

5. The net profit of South Indian Bank has grown by 102 per cent to Rs 30.37 crore during the first quarter of the current financial year, from Rs 15.05 crore in the previous year. The total income grew by 41.85 per cent to Rs 322 crore (Rs 227 crore) and the gross profit was up at Rs 53 crore (Rs 42 crore).

6. Corporation Bank will take up an aggressive branch expansion plan for regions other than the South, its traditional bastion. The bank is weighing the possibility of widening its network further, especially to areas where it needs to markedly scale up presence. The idea is to penetrate markets that have displayed positive signs in terms of generating fresh business.

7. The Karnataka State Financial Corporation has come out with a one-time settlement scheme for small and tiny borrowers for loans of up to Rs 10 lakh. The State Government has extended budgetary support of Rs 54 crore for the settlement. The scheme would allow settlement of loans that have turned to non-performing assets till April 2006. Under the scheme, the interest dues by the KSFC would be compensated by the State Government.

8. Standard Chartered Bank has announced that it had set up its global private banking hub in Chennai, under its wholly owned, captive, BPO subsidiary, Scope International Private Ltd.
The bank has private banking operations in ten cities across the globe (more coming up) and the Chennai hub would handle all the transaction processing. Scope was initially set up as a cost arbitrage opportunity by offshoring processes, but “has evolved into a centre of expertise, providing risk-controlled process efficiency.” Today, it processes 80 million transactions for Standard Chartered Bank annually.

9. Reserve Bank of India is likely to transfer its stake in National Bank for Agriculture and Rural Development (Nabard) to the Government, after completing the SBI equity transfer.Highly placed Nabard officials said that the discussions were still underway on the methodology for transfer. The RBI holds 72.5 % stake in Nabard or Rs 1,450 crore of the paid-up equity of Rs 2,000 crore. The remaining 27.5% or Rs 550 crore is held by the Centre. Nabard has an authorised capital of Rs 5,000 crore. The stake transfer proposal comes as Nabard enters its 25th year of operations.

10. ICICI Prudential Life Insurance has opened a representative office in Dubai. This is ICICI Prudential’s second overseas office, after its first one in the Kingdom of Bahrain.The company hopes to cater to the vast Non-Resident Indian population in the Gulf.

11. While plastic cards can open the doors of any commercial establishment, there are still many who prefer thick wads of currency on their person. The amount of cash people flush out of ATMs (automated teller machines) is 44.4 % more than what is spent on credit cards. A recent industry survey shows that ATM withdrawals account for Rs 65,000 crore as against Rs 45,000 crore swiped away on credit cards. However, purchases on debit cards were only Rs 12,000 crore, despite debit cards far outnumbering credit cards.The number of debit cards in circulation is close to 60 million and credit cards only 26 million. The total transaction on the cards as a whole during the year is said to be close to Rs 1,25,000 crs.

Tides of 8.07.2007

1. Kerala is just a few notches away from achieving total financial inclusion with the latest count at 97.5 %.This emerged at the meeting of the State Level Bankers Committee (SLBC) held here on Friday. The target date for achieving the milestone was June 30 this year.The meeting also discussed the annual credit plan for 2007-08 for the State with the disbursement to the priority sector having been fixed at Rs. 30,017 crore. Out of this, the target for the agriculture sector is Rs. 11,597 crore and for the small-scale industries sector Rs. 4,754 crore.
2.Regional rural banks (RRBs) will have to enter into suitable tie-up arrangements with their sponsor banks for opening and maintaining FCNR-B deposit accounts by non-resident Indians and persons of Indian origin (PIO).The tie-up will enable necessary support and expertise to the RRBs in putting through the transactions regarding acceptance of FCNR (B) deposits.“Since the RRBs may not have well-developed treasuries to manage the foreign currency liability or risk, they may enter into suitable tie-up arrangements with their sponsor banks,” according to the Reserve Bank of India notification.
3. Forex reserves have increased by $937 million to $213.486 billion for the week-ended June 29 on strengthening of non-dollar currencies against the greenback.The reserves had increased by $1.534 billion to $212.549 billion for the week ended June 22.Foreign currency assets rose $936 million to $206.114 billion, said the RBI’s Weekly Statistical Supplement.Foreign currency assets, as expressed in dollars, include the effect of appreciation or depreciation in non-US currencies (euro, sterling and yen) held in reserves.
4. IFCI Ltd has reported a net profit of Rs 246.86 crore for the quarter ended June 30, 2007 on net sales of Rs 349.95 crore. This standalone result for the quarter was stated in a communication sent by the company to the National Stock Exchange. IFCI had recorded a net loss of Rs 15.61 crore on net sales of Rs 252.01 crore in the same period last year.
5. Crisil has got a nod from its board of directors to incorporate a company to undertake credit information business subject to due diligence and regulatory approvals.In a BSE announcement, it said that its board meeting on Friday has approved the proposal. “This is just to create an enabling environment before planning to set up a credit information bureau to assess the credit risks of borrowers at individual levels.
6. South Indian Bank and Oman International Exchange, have signed an agreement for enabling online fund transfer facility for non-resident Indians working in Oman. It would facilitate the transfer of funds through the Oman International Exchange to all the branches of South Indian Bank instantaneously. The facility under the brand name, “SIB Express” utilises the bank’s ‘Finacle’ backbone.
7. Syndicate Bank today announced the launch of sale of gold coins under the brand name “Syndsona” through its 104 select branches spread across eight States. The coins in denominations of 4 gm, 8 gm and 10 gm in tamper proof card with 999.9 purity certificate will be sold through its designated branches. The bank has imported the gold coins from Switzerland and a tie-up arrangement should enable the bank to offer very competitive rates to its customers, a bank re lease said. The bank had tied up with the existing clients and corporates for the sale of gold coins and has sold 50 kg of gold on the first day itself.
8. Gross bank credit increased by Rs 2,186 crore and stood at Rs 18,95,801 crore for the fortnight ended June 22, according to the Reserve Bank of India’s Weekly Statistical Supplement.The gross bank credit was inclusive of food credit which increased by Rs 514 crore to touch Rs 43,956 crore, and non-food credit which increased by Rs 1,671 crore to Rs 18,51,845 crore.The food credit had gone down by Rs 1,422 crore to Rs 43,442 crore for the fortnight ended June 8 while non-food credit went up by Rs 8,517 crore to Rs 18,50,174 crore.
9. The Kerala Government is keen on entering the banking industry, according to the Finance Minister, Dr Thomas Isaac.
10. ayments made by a credit card, a debit card and use of an electronic clearance system (ECS) through a bank account would now fall outside the scope of expenditure disallowance by the taxman even if the amount involved exceeded Rs 20,000.The Central Board of Direct Taxes (CBDT) has now spelt out the circumstances in which disallowance cannot be made by the assessing officer under Section 40A (3) of the income-tax law. This provision relates to expenses or payments not deductible in certain circumstances.
11. A slight breather has come for those seeking to apply for a home loan. ICICI Bank has cut its floating rates on home loans by upto 50 basis points or 0.5 per cent. On fresh loans, for upto Rs 20 lakh, the rates have been slashed by 25 basis points or 0.25 per cent.However, the rate cut is just a correction and it is unlikely that other banks will follow suit.

Tides of 5.07.2007

1. There are happy tidings for the country’s financial inclusion policy. In a recent speech in London, Ms Usha Thorat, Deputy Governor, RBI, revealed that between March 2006 and 2007 as many as 60 lakh no-frills bank accounts were opened. New account holders should be enabled to have access to an array of banking products, so that there is also financial deepening.

2. With a view to addressing a variety of challenges faced by micro-finance institutions, National Bank for Agriculture and Rural Development (Nabard) has decided to evolve a model institution that ensures transparency in accounting disclosure and coercive-free recovery methods.While Nabard subscribed to 51% for this, the rest would be contributed by banks and State Governments.

3. Now one can buy jewellery not only on credit and but also pay in interest-free monthly instalments. Gitanjali Gems Ltd has in partnership with ICICI Bank launched ‘Jewellery Credit Card’ first of its kind in India. Purchases of Gitanjali products made by using the newly launched gold credit card will be eligible for discounts (5% on purchase up to Rs 10,000 and 7.5% beyond Rs 10,000). At the same time, the invoice value can be paid in interest-free EMI for three months/ six months.

4. Banks have started lowering bulk deposit rates (typically Rs 15 lakh and above). According to bank officials, some have even slashed it by 2 percentage points and may lower it further. But bankers are not sure if the trend will translate into similar downtrend in retail deposits or lending rates immediately.

5. Urban co-operative banks (UCBs) with a capital adequacy ratio not less than 9 per cent and with net non-performing assets (NPA) below 10% can now open new branches and extension counters (EC). The banks will also be required to fulfil certain other eligibility criteria for opening of new branch and extension counters, according to Reserve Bank of India notification.

6. The Chairman, Economic Advisory Council to the Prime Minister, Dr C. Rangarajan, has underlined the need to modify the country’s credit and financial services delivery system to achieve greater financial inclusion.This, he said, called for institutional changes, and innovative ideas to link bank branches with millions of farm households and other approaches will have to be thought off.

7. State Bank of India plans to formally launch an online share trading facility for its customers in Delhi on Wednesday. This facility would however be available at select branches only.

8. Tired of receiving calls for a new credit card or an attractive loan offer on phone? A customer unwilling to receive such calls can now heave a sigh of relief with the Reserve Bank of India asking banks not to engage telemarketers (DSAs/DMAs) without a valid certificate from the Department of Telecommunications.“Banks should not engage telemarketers who do not have a valid registration certificate from DoT, Government of India, as telemarketers,” said a RBI notification.

9. Centurion Bank of Punjab plans to raise Tier-I capital of about Rs 500 crore through qualified institutional placement of equity shares. This approval is subject to shareholder, regulatory and statutory approvals as applicable, said a statement from the bank. The capital adequacy ratio for the bank stands at 11.1 per cent, with Tier-I capital of about 9.9 per cent and Tier-II capital of about 1.2 per cent. The proposed exercise would enable the bank to sustain its growth a nd build on the business volumes and profitability over the ensuing quarters, said the statement. “This resolution is an enabling resolution for raising capital in the future, and the bank does not necessarily have to raise this capital immediately,” it said. Centurion Bank said it will finalise the specific timing for raising such capital from time to time and would do so when required.

Tides of 3.07.2007

1. Reliance Money, an Anil Dhirubhai Ambani Group venture, launched a ‘security token’ to counter the growing threat of hackers and phishers in online trading. It has given out 1-lakh gadgets free-of-cost to its customers over the past two months and hope to distribute more in the coming months. 6-digit code The device has a six-digit code that changes every 32 seconds. Even if somebody gets hold of the trader’s password and username, they will not be able to access the account since the code of the security token is essential in logging in. With a battery life of five years, this almond-shaped security token is small enough to fit in to a palm and easy to operate. It can be blocked like any mobile phone in case of theft or misplacement. Though HSBC was the first Indian company to launch this product, Reliance is the first to introduce it in online trading.

2. ABN Amro Bank has registered 59 % growth in net profit to Rs 385.35 crs in 2006-07 against Rs 241.68 crs in the previous year, on the back of a rise in interest and fee-based income. Turnover increased by 36% to Rs 32,077 crs (Rs 23,539 crs). Advances rose 22 % to Rs 18,387 crs (Rs 15,073 crs), while deposits increased 34.85 % to Rs 15,998.30 crs (Rs 11,863.77 crs). Total income went up by 52.23% to Rs 3,027 crs (Rs 1,988 crs), while other income increased 23% to Rs 753 crs (Rs 612 crs).

3. Karnataka Bank Ltd has raised Rs 120.5 crs through unsecured redeemable non-convertible subordinated (Tier-II) bonds. The issue of unsecured redeemable non-convertible subordinated (Tier-II) bonds (series I) in the nature of promissory notes/debentures of Rs 10 lakh each for cash at par aggregating Rs 75 crs (with an option to retain over subscription up to Rs 75 crs) has been closed for subscription on June 30.

4. Centurion Bank of Punjab plans to raise Tier-I capital of about Rs 500 crs through qualified institutional placement of equity shares. This approval is subject to shareholder, regulatory and statutory approvals as applicable, said a statement from the bank. The capital adequacy ratio for the bank stands at 11.1 %, with Tier-I capital of about 9.9% and Tier-II capital of about 1.2%. The proposed exercise would enable the bank to sustain its growth a nd build on the business volumes and profitability over the ensuing quarters.

5. Punjab National Bank is considering merging its subsidiary, PNB Gilts, with itself. The bank feels that while subsidiary is profitable, the return on net worth is very small. PNB Gilts’ turnover of Rs 121 crs for the year 2006-07 was less than its paid-up equity of Rs 135 crs. Its net profit, Rs 16 crs, was only 3% of the net worth of Rs 506 crs. It has a 74.07 % stake in the Rs 135-crs paid-up equity of PNB Gilts.

6. After literacy and universal healthcare, it’s the turn of money matters and savings. Last week Kerala was declared the first ‘Total Banking State’ in the country. The plan to achieve that landmark feat was chalked out by the State Level Bankers’ Committee (SLBC) early this year. The target was to ensure that every household in the State would have at least one bank account and would be eligible for a general-purpose loan of up to Rs 25,000, following the Reserve Bank of India’s directive to bring people from all walks of life into the banking spectrum. The campaign focused on households that still lie outside the banking net, especially in the interior regions of Kerala.

7. Ten Indian companies have raised a total of $3.1 billion through issue of foreign currency convertible bonds (FCCBs) in the first half of 2007, as per the financial data released by Bloomberg on Sunday. The total volume of FCCBs issue is $4.8 billion. While Reliance Communications Ltd issued the largest FCCB of $1,000 million among Indian companies, Tata Motors Ltd stood at second position with an issue size of $490 million.The other companies include JSW Steel Ltd, Sterling Biotech Ltd, Adani Enterprises Ltd, Subex Azure Ltd, Orchid Chemicals & Pharmaceuticals, Rolta India Ltd, Rajesh Exports Ltd and Tulip IT Services Ltd. The data also revealed that zero coupon seemed to be a preferred mode by most.

8. Nabard is organising a ‘National Seminar on Agricultural Credit’ on the occasion of its silver jubilee celebrations on July 3 and 4. In the back drop of the massive credit requirements projected for development of agriculture sector in the Eleventh Five Year Plan by the Government, the seminar also intends to focus on the challenges facing Nabard in meeting the national goals.The seminar proposes to deliberate on some of the major issues daunting Indian agriculture such as production, productivity and technology, marketing, extension and risk management. The challenges in scaling up of micro finance, which is evolving as one of the major tools for alleviation of poverty, will be also deliberated in the seminar.

9. Crisil has assigned its first set of Bank Loan Ratings (BLRs) based on Basel II, the new regulatory framework on capital adequacy for banks. The banks will be able to use the ratings to determine risk weights for their loan exposures, said a press release from Crisil.The new guidelines on capital adequacy issued by the Reserve Bank of India require banks to link the minimum size of their capital to the credit risk in their portfolios which is a departure from the present framework, under which banks calculate the minimum size of their capital as a proportion of the entire loan portfolio, regardless of the degree of credit risk.The rating agency assigns BLR to various types of facilities provided by banks, such as working capital demand loans, cash credit, project loans, loans for general corporate purposes and non-fund based facilities. The ratings will be assigned on both long-term and short-term rating scales, similar to ratings for debentures and commercial paper respectively.

10. HDFC Bank Ltd has allotted 1.36 crore equity shares of the face value of Rs 10 each for cash at a premium of Rs 1013.49 per share to Housing Development Finance Corporation Ltd on preferential basis. Consequent to above preferential allotment of equity shares, it has raised Rs 1,390 crs.

11. Corporation Bank, which had an outstanding of Rs 269 crs in the education loan portfolio in the last fiscal, intends to disburse additional Rs 100 crs during the current fiscal.It has launched ‘Online request facility for CorpVidya (education loan product)’ in Mangalore.It has 16,571 CorpVidya accounts and the number of accounts has seen a good growth in the past two years.

Tides of 24.06.2007

1. Punjab National Bank (PNB) has won the `PC Quest Best IT Implementation Award' for `maximum business impact' for 2006-07.

2. ICICI Bank has fixed the offer price of its follow-on public issue at Rs 940 per equity share. For retail investors the price would be Rs 890, which is a discount of Rs 50 from the offer price.

3. Banks resorting to "extra constitutional" method, like engaging recovery agents, to recover dues from debtors could not be condoned, and the lender bank had ample power to seek recovery, the Madurai Bench of the Madras High Court has held.
Mr Justice K. Chandru, who heard the petition of Mr S. Ovuraj, a farmer, challenging seizure of his tractor and trailer by State Bank of India, Vilathikulam, Tuticorin district, quoted a Supreme Court order [2007(2) CTC 334] dealing with practice of multi-national banks in engaging recovery agents, and said the impugned action of the first respondent bank, "is shocking" inasmuch as owned by Central Government, the bank was also taking similar mode of recovery by engaging agents.

4. Citigroup India said that its net profit for the fiscal year 2006-07 grew 39 per cent, on a conglomerate basis, to Rs 1,566 crore against Rs 1,127 crore in the previous year. The net profit of Rs 1,127 crore in fiscal 2005-06 excludes the Rs 2,188 crore from the gain on sale of holding in one of the group companies. For the year ended March 31, 2007, Citigroup India, comprised of all Citigroup entities in the country, reported revenues of Rs 7,315 crore.

5. The country's foreign exchange reserves rose $1.468 billion to $211.015 billion in the week ended June 22 mainly due to the RBI's intervention in the forex market. The reserves had increased by $1.174 billion to $209.547 billion in the week ended June 8. The foreign exchange kitty has seen accretion to the tune of $7.028 billion in four consecutive weeks. Foreign currency assets rose $1.469 billion to $203.646 billion, according to RBI's Weekly Statistical Supplement.

6. The interest rates have peaked but might soften to some extent in the short term, though it is difficult to give a perspective on this for the medium and long term," said Mr V.P. Shetty, Chairman and Managing Director, IDBI Bank, on the sidelines of its annual general meeting in Mumbai on Friday. Mr Shetty felt that the overall liquidity in the system gave an impression of a comfortable situation and that under such a situation the interest rates might not harden further. IDBI Bank plans to increase its retail portfolio to about 20-22 per cent of its total portfolio in fiscal 2007-08.

7. The Centre would make cash payment of Rs 35,531.33 crore to the Reserve Bank of India for acquiring the latter's entire holding in State Bank of India (SBI). Currently, the RBI has a 59.73 per cent stake in SBI, which is the largest commercial bank in India. The stake transfer involving 31,43,39,200 equity shares of Rs 10 each of SBI would happen on June 29. The ordinance amending the State Bank of India Act to enable the transfer of RBI's entire holding in SBI to the central government was promulgated on Thursday. The Government had in this year's budget provided a sum of Rs 40,000 crore for SBI stake buy from the RBI.

8. Karnataka Bank hopes to disburse Rs 500 crore towards agriculturesector and increase its priority sector lending to 10 per cent from its current level of about 7 per cent. The Chairman, Mr Ananthakrishna, said that growth in other businesses and the difficulties faced by coffee farmers had combined to reduce its exposure in agriculture below the statutory requirement of 18 per cent. The bank hopes to achieve the target in stages by increasing its lending to contract farming segment apart from micro-finance segment.

9. The board of directors of Karur headquartered Lakshmi Vilas Bank has recommended a dividend of 7 per cent for the 2006-07 fiscal against 25 per cent the earlier year. Bank sources attribute it to higher provisioning and additional dividend outgo consequent to the rights and bonus shares issued last year. The audited results show a 19.05 per cent growth in business volume to Rs 8,750 crore (Rs 7,350 crore) and higher total income of Rs 474.99 crore (Rs 357 crore). While the operating profit soared by 84 per cent to Rs 73.58 crore (Rs 39.91 crore), its net slipped to Rs 17.58 crore (Rs 22.47 crore). Its total income increased to Rs 474.99 crore (Rs 357 crore). Interest on advances grew by 44 per cent to Rs 312.12 crore (Rs 216.67 crore). The bank managed to reduce its net NPA from 1.89 per cent to 1.58 per cent. The bank has set for itself a business target of Rs 11,200 crore this fiscal.

10. With global interest rates showing signs of hardening, external commercial borrowings (ECBs) are beginning to become more expensive. Bankers said they have already cautioned some of the intending external commercial borrowers to hedge their open positions. Most international borrowings are currently linked to the London Inter Bank Offered Rate (LIBOR). Six-month LIBOR is currently 5.5 per cent. Inclusive of swap and hedging costs, the effective rates were currently in the region of about 9 per cent. This was assuming that corporates were borrowing at rates of about 100 basis points over LIBOR.

11. Deutsche Bank has posted a net profit of Rs 218.22 crore for the fiscal ended March 2007, an increase of 73 per cent from the previous year's Rs 125.92 crore. Total income increased 40 per cent to Rs 1,625.36 crore, from Rs 1,158.97 crore. Total assets of the bank jumped 47 per cent to Rs 17,715 crore from Rs 12,050 crore.

12. The Security Department of Syndicate Bank's head office in Manipal has been awarded ISO 9001:2000 certificate. This is the first security department among all public sector banks to be ISO certified.

13. Syndicate Bank has launched a small credit scheme tied to its Pygmy Plus 2007 branded deposit product. The loan product offers financial assistance up to Rs 1.5 lakh to customers of small means, including redemption of high-cost debt. It added that the scheme called `SyndsmallCredit' provides flexibility to customers where they can contribute varied amounts at their doorstep to the Pigmy Plus 2007 account. These could ultimately be appropriated towards the loan account. The product also offers a three-month repayment holiday in addition to a stepped-up repayment option, the release added.

14. Syndicate Bank is planning to come out with a public issue during the current fiscal to meet the needs of Basel II requirements and to continue the growth in business, according to the Chairman and Managing Director, Mr C.P. Swarnkar.

15. Bank of Maharashtra has paid a dividend of Rs 66.10 crore to the Government for the financial year 2006-07 at 20%.

16. Karur Vysya Bank has unveiled the triple `S' - Spouse Senior Citizen Deposit Scheme. The scheme is applicable to term deposits opened in the joint names of husband and wife (where one is a senior citizen). In the event of the demise of either of the partners during the pendency of the deposit, the surviving spouse would be eligible to receive one per cent additional interest over the card rate of special interest offered to senior citizens from the date of the original deposit till maturity.

Tides of 20.06.2007

1. SBICAP Securities Ltd has obtained licence from the RBIto offer portfolio management services and the product would be available to investors by September. The company plans to expand its branch network to 50 by the end of the current fiscal and would have 15 franchisees offering its bouquet of services.When the company began its operations, it focussed on institutional players. In the last two years, it has been turning towards retail players and has opened 34 branches across the country.
2. LIC Housing Finance Ltd will be foraying into the reverse mortgage segment within a month. It "sees huge potential in the reverse mortgage segment in view of the changes in the social and economic fabric of the country.
3. PNB has decided not to extend its `PNB Mahabachat' scheme beyond June 30. This is a special fixed deposit scheme launched by the bank early this calendar year to boost its deposits base and fund the surge in credit growth.PNB Mahabachat scheme, which has already been extended twice, is to end on June 30. It offered 9.5% interest per annum to individuals on minimum deposit of Rs 25,000. Senior citizens were offered an additional interest rate of 0.25%.
4.UCO Bank is examining the possibility of providing stock broking services in order to add value to the services it currently provides to its customers.The bank, which will need to tie-up with a broking firm to meet this objective, is aware that a section of its clients are increasingly taking to broking services, given their need to transact in the stock market.
5. Standard & Poor’s Ratings Services on Monday assigned a BB rating to State Bank of India’s (SBI’s) proposed $225-million hybrid tier-I perpetual notes under its $5-billion medium term notes (MTN) programme. BB in the S&P rating scale means inadequate safety.
6. The Indian banking sector, had assets worth $600 billion, which is one-tenth the size of China’s $6 trillion. Indian banks must participate in the growth story. India Inc is investing $500 billion in the next four-five years. If banks have to partner in that process, Banks in India need to grow in size. India was a large market, but to reach economies of scale, technological consolidation should be a priority.
7. The Securities and Exchange Board of India on Tuesday asked 15 stock broking firms, including Indiabulls, and ten other entities to desist from violating SEBI code on futures and options (F&O) trading.
8. The Reserve Bank of India on Monday launched a multi-lingual site, carrying information in 13 languages. The site includes recent instructions of the RBI on customer service, frequently asked questions, lending rates of banks, banking ombudsma n scheme, right to information Act and links to commercial banks’ websites.
9. In the run up to the largest ever share sale by an Indian entity at home and abroad, ICICI Bank on Saturday announced a price band of Rs. 885 to Rs. 950 for its upcoming domestic public offer to mop up Rs 8,750 crs.This is part of the combined offer, wherein India's largest private sector bank would issue American Depository Receipts to raise an identical amount after getting necessary clearances. The bank has an option of retaining an additional 15 per cent bids both from the domestic and international market.
10. An investor protection fund to save gullible investors from defaulting member brokers will be set up by early July, Securities and Exchange Board of India (SEBI) Chairman M Damodaran said on Wednesday.He, however, said the SEBI Act needs to be amended ahead of setting up such a fund. Indications were that the changes will be carried out by July.Investor protection fund will be a consolidated fund that will be created from the money collected through fines and penalties, as per the announcement made by Finance Minister P Chidambaram in his budget speech early this year, Damodaran said.
11. Canara Bank today announced the launch of a new retail loan scheme called 'Canara Guide' to finance Tax Return Preparers (TRPs) selected by Union Ministry of Finance.TRP was a novel scheme introduced by the Centre recently to provide self-employment opportunities to unemployed or partially employed graduates all over the country, a bank release here said.Under the scheme, upto Rs 60,000 would be sanctioned at an interest rate of one per cent less than the Benchmark Prime Lending Rate of the Bank, which is at present 12.25 per cent. The loan was returnable within 60 months.
12. Stock markets continue to remain a key route for corporates' to raise funds for expansion, with the worldwide IPOs space posting a record net proceeds of $246 billion in 2006, a new study shows.

13. India's IPO market emerged as the eighth largest with $7.23 billion (Rs30,000 crs) in net proceeds through 78 public issues, global research and consultancy firm Ernst & Young said in its Global IPO report released on Wednesday.Across the world, the companies raised $ 246 billion, up from $167 billion in 2005, through a total of 1,729 IPOs, led by Chinese companies at the top with net proceeds of $56.6 billion.However, the biggest number of IPOs came from the US with 187 offerings, followed by Japan with 185 and China with 175 IPOs.

Tides of 19.06.2007

1. Financial Intelligence Unit-India (FIU-IND) has been admitted as a member of the Egmont Group at its recent Plenary Session at Hamilton, Bermuda.The Egmont Group is the international organisation for stimulating cooperation amongst FIUs across the globe and has FIUs of more than 100 countries as its members.
2. Even as it is awaiting Government of India's nod for converting into a commercial bank, Repco Bank has set up a NBFC subsidiary exclusively for SME financing.Repco Bank, originally set up to help repatriates (not refugees!) from Myanmar and Sri Lanka, is today a multi-state co-operative bank.
3. Cashing in on the banking community's enthusiasm for reverse mortgage products, Nucleus Software plans to launch a reverse mortgage solution for banks and financial organisations in the next three months.
4. Global rating agency Standard & Poor's assigned its `BB' rating to State Bank of India's proposed $225-million Hybrid Tier I perpetual bonds indicating it as non-investment grade.The bonds would be issued under its $5-billion Medium Term Notes (MTN) programme. The bonds will be perpetual notes with a call option of 10 years from the date of issue, said a press release from Standard & Poor's. The rating differential between the `BBB-' counter party credit rating and the `BB' rating on the Hybrid Tier I notes reflects the junior subordinated nature of the notes and the embedded interest deferral feature.
5. Centurion Bank of Punjab has identified Gangtok as a high growth region.The bank hopes to tap the potential with its products and services, including personal loans, mortgages, wealth management products such as life and general insurance through its partners and a range of select mutual funds.It has opened its first full-fledged branch office.
6. PNB has decided against making any equity offering this fiscal that could lead to trimming of the Government stake from 57.8% to 51%.The bank, however, plans to raise tier-II capital and even look at innovative perpetual debt to fund business growth this fiscal.
7. All international operations of ICICI Bank, comprising branches and wholly owned subsidiaries outside India (except its wholly owned Canadian subsidiary), have broken even. It has a presence in 17 countries.ICICI Bank's foreign operations accounted for 19 per cent of its consolidated balance sheet.
8.Forex reserves virtually make up the Reserve Bank of India's entire assets. From a position of shipping gold to London to borrow a few millions to the $200-billion reserves today, it has been a remarkable journey. A debate on making funds available for infrastructure projects has ensued.To sustain the booming economy there is need for huge investments in infrastructure, but the prospects of rationing of funds and increased costs would act as a dampener. When scarce resources have to be deployed judiciously, some selectivity and rationing are inevitable. Though costlier, opening the LAF or repos window by the RBI would lead to more efficient use of resources. Using borrowed funds would also mean stringent scrutiny of their application.
9. The Centre's buyout of the Reserve Bank of India's entire holding in State Bank of India (SBI) would be done as per SEBI specified pricing formula. The price is likely to be the 26-week average of the quoted price of SBI calculated from a day prior to the date of transfer. The pricing will be as per the SEBI formula.

Tides of 16.06.2007

1. The Centre's buyout of the Reserve Bank of India's entire holding in SBI would be done as per SEBI specified pricing formula. The price is likely to be the 26-week average of the quoted price of SBI calculated from a day prior to the date of transfer. "The pricing will be as per the SEBI formula.

2. Kerala will be declared a "total banking state" by June 30 with every family having at least one bank account. This is in tune with the RBI guidelines for ensuring total financial inclusion in all the districts of the country. In September 2006, Palakkad in Kerala had become the first district in the country to achieve the status of a `total banking district'.

3. The home loan market could grow faster, with the National Housing Bank (NHB) working on ways to structure products that will expand the market for housing finance to include urban slums and low-cost rural housing. The housing regulator is looking at products where the repayment schedules coincide with the cashflow of farmers and self-employed. Banks and housing finance companies (HFCs) prefer to enter this space, in partnerships with established microfinance institutions (MFIs). The key issue in expanding the market to include low-cost funding is the lender’s fixation for equated monthly installments.

4. Goldman Sachs Group Inc, the world's most profitable investment bank, offered to buy shares in ICICI Financial Services. ICICI Financial, which controls the insurance and asset- management arms of India's biggest bank by market value, said on June 12 it received bids from investors for as much as 5.9% of its stake.

5. Consumer education is finding its way into housing finance now. Customers have been questioning disparities in home loan agreements, varied service charges and hidden costs for some time now. They may get answers from a common forum of banks and housing finance companies (HFCs). NHB is mulling over an idea to promote a common forum of banks and HFCs. The idea is to promote customer protection and education in the housing finance arena. Letters have already been dispatched to leading banks and housing finance companies asking for their feedback.

6. The Kerala government has unveiled an action plan to convert the state into a favoured investment destination by promoting public-private partnership in infrastructure development and offering to set up exclusive industrial parks for NRI investors. While the policy speaks about setting up product-specific Special Economic Zones, that in a state like Kerala, large quantum of land like 30,000 acres could not be set apart for SEZs.

7. Foreign institutional investors (FIIs) and mutual funds (MFs) are likely to be allowed to trade in bullion and energy futures on the country’s commodity exchanges. According to officials, the finance and agriculture ministries have finally come to an agreement on the proposal. Besides giving small investors access to the commodities market, the participation of FIIs and MFs is expected to lend depth to trades in these areas. FII and MF investments in commodity exchanges will fall under the purview of the Sebi, while the Forward Markets Commission (FMC) regulates the exchanges.

8. United Bank of India will complete the mop-up of Rs 575 crs upper tier-II bonds today. The bonds are being raised to meet the capital adequacy requirements and fund the business growth in the current financial year. The 15-year bonds are being taken at a coupon rate of 10.65%.

9. ICICI Bank is offering baits to entice retail investors to invest in its equity share issue aimed at mobilising Rs 10,062.5 crs from the domestic market, including a greenshoe option (or, the option to retain a part of the oversubscription) of Rs 1,312.5 crs. Apart from a discount of up to 5%, the bank is providing small investors an easy option to pay for the shares on offer through the book-building process (an auction conducted by investment bankers). Retail bidders also have the option to pay only Rs 250 per share on application, Rs 250 on allotment and the balance on call, which will be issued within six months of allotment. ICICI Bank will also list the partly paid shares for the benefit of retail investors. ICICI Bank has defined retail investors as individual bidders, including Hindu undivided families and NRIs, whose bid amount does not exceed Rs 1,00,000.

10. UTI bank , the third largest private bank of the country, has chalked out a plan to increase its lending in Orissa by 55 % during the current fiscal. The bank , which lent Rs.450 crs during 2006-07, plans to increase lending to Rs.700 crs during the current fiscal. However, in the overall growth of credit, focus will be on priority sector lending. The bank's lending to the priority sector of the state was Rs.140 crore last fiscal. It aimed to increase priority sector lending by 64 percent to Rs 230 crore. Similarly, the agricultural lending target had been raised by 91% to Rs 65 crs from Rs 34 crs at present.

11. IDBI Bank will set up a mutual fund subsidiary with IDBI Capital markets, its wholly-owned subsidiary, once its proposed life insurance venture gets off the ground. The bank will have a 65% stake in the asset management company (AMC) with IDBI Capital holding the remaining share, according to a senior IDBI official. The bank’s application for setting-up the AMC business is already with the RBI. The central bank, however, has asked the public sector bank to focus on getting the insurance business off the ground before taking up new businesses.

Tides of 13.06.2007

1. ICICI Bank will issue a 5.9% stake in its proposed subsidiary (the holding company for its non-banking businesses) for Rs 2,650 crs to private investors. This would value the subsidiary at Rs 44,600 crore on a post-issue basis, said the bank in a letter to the National Stock Exchange. ICICI Bank said that discussions had been initiated with potential investors and definitive offers have been received for the subscription to equity shares of the proposed subsidiary. The bank did not elaborate on the identity of its potential investors.

2. HDFC Bank has bagged the Best Retail Bank in India award at the sixth Asian Banker Excellence in Retail Financial Services Awards function held in Shanghairecently. At the same programme, ICICI Bank won the inaugural Excellence in Remittance Business award for outstanding performance in 2006. About 150 senior bankers from award winning banks in 22 countries across the Asia Pacific, the Gulf Region and Central Asia attended the programme, administered by The Asian Banker.

3. IndusInd Bank may set up a wealth management subsidiary and hopes to tie-up with an overseas player for the same.
It has a comfortable capital adequacy ratio of about 12.54% and it can look at setting up a subsidiary. It may partner an overseas entity and will soon apply to RBI for permission. It has a sizeable client base of NRIs and Indian residents who are high networth individuals or mass affluent customers. The wealth management business will benefit these customers.

4. Ranbaxy Group promoted Religare, a financial services provider, and Indusind Bank have a
tie-up; the bank will provide a 3-in-1 offering for the bank's savings account customers with a savings and a DP account from the bank along with an Internet trading account from Religare.
Initially, Religare will provide Internet trading platform to the bank's customers eventually followed by the entire spectrum of Religare's services.

5. Karnataka Bank Ltd has targeted a forex business of Rs 8,500 crs during 2007-08. The bank, which achieved a forex merchant turnover of over Rs 6,100 crs showing a growth of around 31.53 % during 2006-07, has envisaged an addition of Rs 2,400 crs for 2007-08. During 2006-07, the export credit outstanding crossed Rs 1,100 crs amounting to 11.47 % of net bank credit of the bank. For the current fiscal, it has targeted an export credit of Rs 1,450 crs.

6. Some 35,000 women members of the Self Help Groups (SHGs) in the Nilgiris under the umbrella of Repco Foundation for Micro Credit, an NGO floated by the Union Home Ministry's Repco Bank, can now look to have their products getting internationally marketed, thanks to a memorandum of co-operation (MoC) which the Repco Bank will enter into with the Exim Bank on June 15.

7. IndusInd Bank Ltd has informed the BSE that Mr R. Seshasayee has been appointed, with the approval of Reserve Bank of India, part-time non-executive chairman of the bank for a period of two years. Mr Seshasayee is the Managing Director of Ashok Leyland, the Hinduja Group flagship company. Prior to Mr Seshasayee, Mr R.J. Shahaney was the non-executive chairman of the bank.

8. Barclays Bank PLC, which recently launched retail banking services in India, has tied up with ICICI Lombard General Insurance Company Ltd for bancassurance. ICICI Lombard will provide exclusively designed non-life insurance products for Barclays retail customers. It will also provide insurance products for Barclays customers who have availed themselves of credit cards, personal loans, SME loans, premier investment services or any other banking products.

9. Bankers may not break into a jig to the tunes of ringing cash registers in the manner of heroes of films that they finance. But they have reasons to feel happy. With a better repayment record than conventional loans, film financing has the best script in their business. "The film-financing scheme has been quite successful and bad loans so far are negligible," says Mr Jitender Balakrishnan, Deputy Managing Director, IDBI Bank, a big player in this business. For Exim Bank it is an even better story. "There are no bad loans in this segment," said Mr Mathew John, General Manager and Head-Corporate Banking, Exim Bank.

10. A 13-year-long saga of stake-sale controversy in Tamilnad Mercantile Bank ended last month, when seven foreign investors bought out the holding of Mr C. Sivasankaran. With a networth of Rs 760 crore and total business of Rs 10,067 crore, Tamilnad Mercantile Bank is one of the more profitable old private sector banks in the country. Growth had been stunted to some extent by the controversy surrounding ownership. Now with that problem gone and with a new professional at the helm of affairs, TMB is like a just-unshackled racehorse.

11. In what is arguably the first buyout led by an Indian private equity firm in the international market, ICICI Venture, the private equity arm of ICICI Bank, has acquired majority control in US-based clinical research company Radiant Research. The deal amount is not known but said to be in millions of dollars. Last year Radiant Research had sold a part of its clinical research business, constituting eight clinical pharmacology centres, to US-based clinical research company Covance for $65 million. Today, Radiant has 26 other clinical centres. Going purely by the number of centres, the current deal led by ICICI Venture could have been valued at $150 million plus.

12. The central bank’s efforts at tempering the rate of loan growth through monetary measures are paying off. According to the figures released by the RBI, loan disbursements dipped by Rs 36,672 crore since end-March 2007 to Rs 18,86,520 crore on May 25. Last fiscal, loans had dipped by Rs 13,644 crore during the same period. On a year-on-year basis, the growth was 26.3% as against 30.9% last year.

Tides of 11.06.2007

1. To facilitate faster credits, State Bank of Hyderabad has introduced `Express Clearing' in its 104 branches in Hyderabad and Secunderabad. "Express Clearance is the first of a number of programmes lined up for the next couple of months to provide higher comfort levels to the customers. While the cheques drawn on any branch of our bank can be cleared on the same day, instruments drawn on other local banks would be cleared within one working day. All 104 branches of the bank in the twin cities would have a drop box. Further, a jumbo box is kept at the service branch in Abids here which would be cleared once in every half an hour for processing cheques and DDs.
2. Fixed maturity plans, which were hugely in demand till recently, are suddenly not so hot any more. Other debt products, and, certainly, bank deposits, seem to be regaining their appeal insofar as a large section of the market is concerned. The situation calls for a fresh look at the FMP segment, especially with regard to the products that are now in place and the ones that are likely to be rolled out in the near future.
3. Fraudsters have declared an open season on banks. And most ‘serious’ fraudsters are using non-electronic methods to cheat. Largely because electronic methods are easily traceable. While methods vary, all of them revolve around misleading banks about the identity of fraudsters. A popular technique they use is the ‘set-up’ fraud. Consider the case of Godrej Consultancy. This company had nothing to do with the Godrej group, but it was enough to attract direct selling agents who were looking forward to acquire new customers. There were around 30 employees in the company which had an operational record of around three months. Based on the name and operations, the employees were able to obtain credit cards from many important banks. After receiving the cards, they maintained clean credit histories on credit card spendings for a while, which attracted banks to sell them personal loans. The moment the loans were disbursed, the employees did a vanishing act. Thus, banks became victims to what is termed as identity theft. There is an estimate that many banks have lost at least Rs 1 crore through this modus operandi, but no bank is willing to admit the problem.
4. Life Insurance Corporation of India is reducing its exposure to real estate stocks, taking a cue from the banking regulator, the Reserve Bank of India, which has warned of an asset bubble building up in the sector.
5. The Reserve Bank of India (RBI) has announced enhanced auctions of treasury bills and government bonds totalling Rs 22,000 crore next week as part of the government’s borrowing programme. The RBI will on Monday issue 91-day and 182-day treasury bills for Rs 3,000 crore and Rs 2,000 crore, respectively, followed by auction of 7.49 per cent, 2017 bond in tranches of Rs 5,000 crore on Tuesday and Rs 6,000 crore on Friday. Another auction of 91-day and 182-day t-bills for Rs 5,000 crore would be held on Wednesday.
6. The Reserve Bank of India has barred companies from raising funds overseas through issue of optionally and partially convertible bonds under foreign direct investment (FDI) regulations.
Companies will now be allowed to only sell bonds that compulsorily convert into equity within a specified timeframe.

Tides of 10.06.2007

1. Foreign banks with presence in India and Indian banks with overseas operations may have to categorise their income from banking services (such as loans, deposits, payment services, among others) into income paid by "residents" and "non-residents". This is one of the suggestions made by a technical group set up by the RBI to "finetune" the data (for statistical purposes) on international trade in banking services for negotiations under General Agreement on Trade in Services (GATS).

2. Pressure is mounting on the Finance Ministry to look into various aspects of the reverse mortgage scheme and take decisions on tax treatment at the hands of both the borrower and the lender under such a scheme. With reverse mortgages taking off in a small way in the Indian market, bankers and prospective users of this product are keen that all taxation issues are addressed upfront by the Ministry as a matter of precaution. Sources said that the Ministry was looking into the taxation aspect and no final view has emerged on the taxation policy on reverse mortgages. The main contentious issue is whether the recurrent monthly payments received by a senior citizen under a reverse mortgage (equitable mortgage) would be characterised as a capital receipt or income for taxation purpose. Also, clarity is needed on whether any element of profit embedded in cases where the loan is substantially more than the cost of acquisition of the property should be brought to tax or not.

3. City Union Bank plans to introduce yet another deposit scheme - `CUB 500', effective June 11. The bank has decided to offer interest at 10.75% for general category and 25 basis points higher for senior citizens, who park their funds under this scheme. Depositors have to invest a minimum of Rs 10,000 under this scheme. The upper limit is Rs 2 crore. The bank is expecting to garner Rs 2,000 crore through this product.

4. Recent private equity investments in non-banking finance sector in India portend further consolidation in this segment, likely to be driven by foreign banks and financial institutions trying to find a way out of restrictive regulations, observers say. While strategic investors pick up stake in companies as a part of growth plans, private equity players tend to invest in companies only to sell their stakes eventually (usually in about seven years). In case of investments in publicly-held companies, the exit could even be earlier. Thus, investments by private equity players could be an indicator of what they expect to happen in that sector.

5. IFCI Ltd has got a tax refund of Rs 3.8 billion. The refund was on account of some extra provisioning from previous years, and "this will add to the profits of this quarter."

6. The new Confederation of Indian Industry (CII) president, Sunil Bharti Mittal, wants US companies to make long-term and "inclusive" investments in India as the country today offers "the perfect combination" for partnership. "Thanks to economic reforms India is growing at a fast pace, understanding of US industry is increasing in India and irritation levels are going down in America."

Tides of 9.06.2007

1. The export prices of Indian products in major exporting sectors have become uncompetitive by 10-12% on an average compared to competing countries' products as a result of rupee appreciation against the US Dollar, according to a survey conducted by industry chamber FICCI.
2. Forex reserves have increased by $3.439 billion to $208.373 billion for the week-ended June 1 on revaluation of non-dollar currencies against the dollar and RBI's intervention in the forex market. Forex reserves had gone up by $952 million to $204.934 billion for the week-ended May 25.
3. The air is abuzz with talk of a new hi-tech, low-cost deal for farmers and other rural folk. Hub and spoke models are spoken of, and ATMs wired for bio-and speech-recognition. Salaries, loan disbursals, proceeds of bulk sales at procurement centres and market yards, and revenue earned by sales to private traders, could be directly credited at a centralised location. Account holders could check that this has been done, or draw on this money at any one of the dozens of ATMs sprinkled all over the place. Tedious visits to branches, time and time again, would no longer be necessary. But, though life would become a great deal easier for account holders, whose numbers would, therefore, increase in leaps and bounds, bankers themselves would need to be pretty nimble to avoid indiscriminate lending and ensure good recoveries. Customers, too, would face a problem if they wished to deposit cash. ATMs can pay out thousands in a jiffy. But their ability to count is greater than their ability to recognise what they are counting. They can be `taught' how to scrutinise notes fed into them. But they are slow learners. It would still take them three to five minutes to verify every note. Feeding 100 tenor fifty rupee notes into an ATM would take pretty much all day.
4. The Union Finance Minister, Mr P. Chidambaram, has asked the Security Printing Press - Hyderabad (SPPH) to diversify into tapping commercial business opportunities in smart cards, university degree printing, MICR cheques, National I-Card project and so on.Promising substantial investments in the next 5-10 years in equipping the Press with latest technology, Mr Chidambaram said the National I-Card project itself demands 100 crore cards. Similarly, printing of driving licenses offers big business.
5. RBI has mandated that only instruments which are fully and mandatorily convertible into equity, within a specified time would be reckoned as equity under the Foreign Direct Investment policy; and reckoned as eligible for issuance to persons resident outside India.
6. Centurion Bank of Punjab is providing loan to DLF group employees to participate in the issue of DLF Ltd. The bank offered to provide loans to the DLF employees for subscribing in the IPO against shares. One million shares are reserved for the employees of DLF out of a total offering of 175 million equity shares of Rs 2 each at a price band fixed between Rs 500 and Rs 550. Only a section of the 2,600 employees, including 2,100 professionals of DLF group comprising DLF Ltd and its subsidiaries, will be eligible for the preferential allotment of equity shares from the company's upcoming IPO.
7. Air India has floated enquiries calling for bids from banks and financial institutions for the second tranche of aircraft deliveries beyond December 2007 till March 2009, as also pre-delivery payments in respect of aircraft and spare engines. The financial packages have been invited for EXIM guaranteed facility for $1.06 billion and commercial facility of $181.25 million for 10 aircraft, comprising a combination of 777-200 LRs, 777-300 ERs and 787. Air India said it would evaluate any other innovatively structured financing package that is not based on US EXIM- guaranteed financing or a sovereign guarantee.
8. Gross bank credit fell by Rs 4,541 crs and stood at Rs 18,86,520 crs for the fortnight ended May 25, according to the RBI 's Weekly Statistical Supplement. The gross bank credit was inclusive of food credit, which dropped by Rs 2,541 crs to touch Rs 44,864 crs and non-food credit, which fell by Rs 2,001 crs to Rs 18,41,656 crs.
9. Barclaycard, part of the Barclays Bank Group, sees partnerships as a cornerstone for its growth in the Indian credit card market. Although a recent entrant in the domestic credit card market, it soon hopes to be among the larger players in this market on the back of its brand equity, product innovation and the focus on scale besides partnerships.
10. The All India State Bank Officers' Federation has deferred the countrywide strike scheduled for June 8 by two weeks. It has deferred the strike to avoid inconvenience to customers and also to give some time to the management to address its demands. The federation had called for a strike in protest against the "unilateral actions" by the management on issues such as promotion policy and outsourcing of core banking operations to private institutions.
11. Bank of Baroda and Reliance Capital Asset Management Co Ltd have entered into a marketing tie-up for distribution of Reliance Mutual Fund products through select branches of the bank. BOB looks at this tie-up as customer centric strategy. In the drive towards providing greater customer convenience, the bank will continue to enlarge its basket of products, both its own and also third party, leveraging its vast branch channel, latest technology and customer base.
12. "A large foreign bank" is on the verge of picking up minority stake (up to 49 %) in Repco Home Finance Ltd, the housing finance subsidiary of Repco Bank, the Chennai-based multi-state co-operative bank. Confirming this to Business Line, Mr M. Balasubramanian, Managing Director of Repco Home Finance, said that the deal was likely to be sealed in August. "The due diligence is over and we are in the final stages of negotiations," he added.
13. The loans against securities (LAS) scenario is undergoing another round of change, with lending institutions looking at hiking rates in the context of recent modifications in the interest-rate structure and growing uncertainties in the markets. Investors who had lately opted for LAS point out that many of them now have a tough time dealing with revised rates, following decisions by LAS providers to do so. Such moves are to be seen against rates that have risen steadily over the past few months. Capital market circles agree that investors — bank clients who have taken loans — may well find it more expensive to borrow and invest, a likelihood that may discourage a section of them from adding to their leveraged exposure.
14. Foreign investors have picked up 46,862 shares of Tamilnad Mercantile Bank Ltd , which works out to 16.47% of the paid-up equity of the bank. Members of the Nadar community have also purchased another 48,556 shares of the bank, or 17.06%. With this, all the 95,418 shares (33.58%) of the bank that were with Mr C. Sivasankaran, Chairman of the Sterling group of companies, have been bought out. This effectively brings the curtain down on the controversial stake-sale that has been raging for 14 years now.Senior sources in the bank said that the transactions have been approved by the RBI.
15. The Finance Ministry plans to take a re-look at the criteria for appointment of additional executive directors (EDs) in public sector banks (PSBs), especially from the viewpoint of the number of branches. Currently, the additional ED appointment is determined on the parameters of business turnover and number of branches. For the recent round of additional ED appointments, the Finance Ministry went by the parameter of Rs 1,00,000 crore of business turnover and branch network of around 2,000 as on the balance sheet date of March 31, 2006.
16. Banks and financial institutions in the country might lay a major thrust to the adoption of packaged software in areas beyond core banking. The non-core banking applications are that of customer relationship management and human resources management among others. Packaged software worth $263 million has been purchased and installed by banks and financial institutions during 2006, according to a recent Skoch Consultancy research, which is expected to go up to $305 million in 2007.

Tides of 5.06.2007

1. Bank of Baroda plans to launch a `reverse mortgage' - a stream of loan payments against the homeowner's net equity stake in the property- product for customers based on the recent guidelines issued by the National Housing Bank (NHB). It will introduce a `reverse mortgage' product in the next three months' time based on the revised NHB guidelines.
2.HDFC Bank has opened 19 branches in a day in Delhi and the National Capital Region (NCR), outdoing its own record of 14 branches in a day in October 2005. With the launch of 19 branches on Saturday (June 2), the total number of branches in Delhi and NCR has gone up to 116 and to 270 in North India. As on March 31, 2007 the bank had a network of 684 branches and 1,605 ATMs in 316 towns and cities.
3. More than a million small borrowers, who are approaching micro-finance institutions (MFIs), to get their financial needs will be brought into an electronic portfolio, which makes it easy to keep track of their operations. Through the implementation of a software solution, it would soon be possible to capture data transactions from the various units of the MFIs, operating in the rural and semi-urban areas, where the small borrowers are. An Electronic Portfolio Tracker will be put in place. To make this possible, Spandana-Spoorthy Innovative Financial Services, an MFI and Satguru have signed a memorandum of understanding. They will together develop a management information system, to be called Spandana Information Management Systems (SIMS).
4. The five PSBs where CMD appointments have been made are Indian Overseas Bank (IOB), Punjab National Bank (PNB), Bank of India (BOI), Indian Bank and Oriental Bank of Commerce (OBC). After the due clearance from the Prime Minister's Office (PMO), the Finance Ministry today issued formal orders for the lateral movement of Mr T.S. Narayanasami, CMD of IOB, to BOI and Mr K.C. Chakrabarty from Indian Bank to PNB. The latest round of top-level appointments also saw a number of executive directors (EDs) getting elevated as CMDs.
The UCO Bank Executive Director, Mr S.A. Bhat, has been promoted as CMD of IOB. While Mr M.S. Sundara Rajan, currently Executive Director of Indian Bank, has been elevated as CMD of the same bank, Mr Alok Mishra, Executive Director at Canara Bank, has been promoted as CMD of OBC.
5. Dr A.K. Khandelwal, CMD of Bank of Baroda, has been appointed as Deputy Chairman of Indian Banks' Association (IBA). Dr Khandelwal succeeds Mr S.C. Gupta, Chairman and Managing Director of Punjab National Bank, who retired from services of the bank on attaining superannuation.
6. Private sector lender City Union Bank has received shareholders' approval to raise over Rs 125 crore by allotting equity stakes to a clutch of domestic and foreign investors.
7. IFCI is planning to carve out its bad loans amounting to nearly Rs 6,000 crore and transfer them to its asset reconstruction company in a bid to separate grain from the chaff. ARC is expected to buy out bad loans at a significant discount — less than 30% of the original outstanding amount. Initially, bad loans of IFCI, which are to the tune of Rs 6,000 crore, will be bought out by way of loans. This means that the ARC will buy out bad loans for Rs 2,000 crore and is expected to generate recoveries of at least Rs 4,000 crore over these assets.
8.

Tides of 4.06.2007

1.Tamilnad Mercantile Bank (TMB) has signed up with UAE Exchange Centre LLC, Abu Dhabi, for money transfer services. The arrangement, which comes into effect immediately, enables NRIs in the Gulf to remit funds to India by sending rupee drafts drawn on the UAE Exchange Centre to any of the 182 branches of the bank. This includes both the traditional draft drawing arrangement and the speed remittance arrangement that provides Web-enabled money transfer in minutes.
2.Madhu, serving a life imprisonment, is a member of one of the three self-help groups (SHG) formed by the SBI in the female prison of Yerawada Jail, on the outskirts of Pune.The bank has formed three groups — Savitri, Jijau and Mahalakshmi — with about 12 members in each group."As the prisoners in jail cannot carry the banking functions on their own, SBI has included two women jail guards and a member of an NGO called Janeev Samajik Sanstha in each of the group for operating accounts on behalf of the prisoners. The inmates of the jail feel that the group concept has created a bond and a spirit of healthy competition among them. "We now sit together and discuss our ideas freely.
3. The repayment of housing loans should be flexible enough to take into account the income flows of individuals, said Dr Rakesh Mohan, Deputy Governor, RBI."There is a need for standardisation of procedures and documents in the area of housing finance. There should also be flexibility in collection systems," he said, speaking at a seminar on `National Conference on Affordable Housing' .Dr Mohan's observation comes on the heels of an RBI notification issued in May advising banks to consider having a ceiling on the interest rate besides processing and other charges on housing loans.
4. SC VTB Bank (VTB), Russia's second biggest bank, hopes to start operations in India by opening a corporate branch in the Capital by the year-end. The bank aims to address problems of Russian companies operating in India on issues that arise in their foreign economic activities.
5. The National Housing Bank is working on several new initiatives in the area of housing finance including the introduction of Certified Independent Mortgage Counsellors."These counsellors will represent the borrower," said Mr S. Sridhar, Chairman and Managing Director, National Housing Bank. Globally, such independent advisors help clients obtain mortgage finance at the most competitive rates from lenders.
6.The country's foreign exchange reserves rose by around $952 million to $204.934 billion for the week ended May 25, due to the RBI's intervention in the forex market.In the week ended May 18, the reserves had fallen by $9 million to $203.98 billion.
7. Punjab & Sind Bank saw a sharp rise in profitability and a steep decline in its NPAs for 2006-07.The bank's net profit more than doubled in 2006-07 to Rs 218.53 crore from Rs 108.32 crore (102 per cent) in the previous year. Its gross profit went up by 76.55 % to Rs 472.44 crore (Rs 267.60 crore). The return on assets stood at 1.01 %.
8. UTI Bank plans to raise fresh capital by way of an overseas issue and a preferential allotment to promoters.In a notice to the Bombay Stock Exchange, the bank said it would raise its Tier-I capital (core capital) by issuing up to 4.23 crore equity shares. Overseas issue would be equity linked securities or depository receipts.The bank would be raising around Rs 2,442 crore through the fresh issue.The bank will also offer 3.19 crore shares to the promoters on a preferential allotment basis. This is to help maintain the promoters' stake after the overseas issue.
9. Indian Bank has launched biometric-enabled smart cards to bring about financial inclusion in the unbanked areas. The card was launched at a function held at Dharavi, Mumbai.
10. Married couples where one of the partners is below 60 years can now avail themselves of reverse mortgage loan (RML) facility. Earlier, the National Housing Banks (NHB) norms required both the partners to be above 60 for availing themselves of the scheme.In a release issued today, NHB said that it has relaxed the age restriction for availing loan facility by senior citizens under the RML scheme.
11. ICICI Lombard General Insurance Corporation Ltd has raced ahead and grabbed the second spot in the insurance sweepstakes, displacing three public sector companies in the process.ICICI has earned a premium of Rs 448.65 crore for April, a 35 % growth over the corresponding period of the last financial year. Public sector New India Assurance, however, remains on top with a gross premium of Rs 650.82 crore for the same period. New India has grown by only 8.2% over the corresponding period of the last financial year.
12. Canara Bank, Thiruvananthapuram Circle, has entered into a memorandum of understanding with the Southern Railway division here for installation of 11 ATMs-cum-e-ticketing kiosks at the railway stations in the State.The ATMs will be installed at Thiruvananthapuram, Ernakulam, Kollam, Thrissur, Kayamkulam, Kottayam, Thrissur, Guruvayur, Changanassery and Wadakkancherry.
13. YES Bank has launched a $100-million (approximately Rs 400 crore) private equity fund called the Food and Agribusiness India Fund. The objective of the fund is to invest in around 10-15 companies in the food and agribusiness sector.

Tides of 30.05.2007

1. The leather industry, which has sustained an annual export growth of about 15 per cent in 2006-07, could take a drastic hit in the current year due to the strengthening rupee, according to the Council for Leather Exports (CLE). Briefing reporters after a review with representatives of the Council for Leather Exports, the Union Minister of State for Commerce, Mr Jairam Ramesh, said that the CLE has sought the Commerce Ministry's assistance in bringing down transaction cost to offset the impact of rupee's appreciation against the dollar.
2. The `impossible' trinity, it is called - you cannot simultaneously control the interest rate and exchange rate and have full currency convertibility. Complete freedom in any one of these restricts your freedom of action on the others. Ambiguity and ambivalence are part of the Hindu way of life and existence. Even in economic (and political) decision-making, we postpone difficult decisions till the very end - often till it is too late. Thus, it is not surprising that we gamely continue with the impossible act of finding the right balance of interest rates, exchange rates and capital mobility.
3. Targeting a 30% jump in the sales of its `Ape' range of three-wheelers this year, Piaggio Vehicles Pvt Ltd has tied up with SBI for extending finance options to the customers. As part of the tie-up, SBI would offer finance to customers on both commercial and passenger vehicles of Ape range of three-wheelers in all branches across the country. "The finance schemes are being offered with an interest rate of Rs 11.5%. However, if one sees the market terminology of flat rates, the interest would work out to around 8% and there are no hidden charges.
4. April 2007 is a landmark month in the history of Cholamandalam MS General Insurance Company, because that is the month the company cleaned up all the red in its balance sheet. The company earned premium income of Rs 315 crore in 2006-07 and made a net profit of Rs 13 crs. In April, it made a net profit of Rs 5 crs. With this, it has wiped off the entire accumulated losses of Rs 16 crs. The company expects at least 60% growth in premium income in the current year.
5. Oriental Bank of Commerce is opening two branches in Garia and Baruipur (South 24 Parganas district) as part of its plan to expand its branch network in Kolkata region. Right now the bank has 40 branches, one extension counter and 28 ATMs in the region. It has plans to open more branches in Kolkata region as also in North Eastern states.
6. Eyeing an untapped segment of customers, school kids, Andhra Bank will be launching a campaign in schools across the country to mobilise Kiddy Bank accounts from next month. Its branches across the country will go to schools in their respective regions to mobilise Kiddy Bank accounts. It is re-launching Kiddy Bank accounts for children. As per the re-launched scheme, children in the age group of one month to 18 years (only minors) are eligible to open accounts.
7. The Government of India has increased Exim Bank's authorised capital to Rs 2,000 crs. The existing authorised capital of the bank is Rs 1,000 crs and has been fully subscribed by the Government. The bank's Capital to Risk Assets Ratio was 16.38% as on March 31, 2007 and the total assets were over Rs 26,000 crs. Key areas of the bank's lending include project exports, export lines of credit, export capability-creation finance, finance for Indian ventures overseas and for agri-business and small and medium enterprises.
8. Several indicators currently point to the boom in the Indian economy. Both aggregate GDP growth rates and investment rates have been increasing; the foreign exchange reserves keep on increasing, to almost embarrassing levels; and despite this, the exchange rate has been appreciating, largely because of capital inflows.
9. In a major setback to state-run insurers, the finance ministry has struck down their request to access the capital market with equity issues. GC Chaturvedi, joint secretary (banking & finance) in the finance ministry, said that the government did not have any plan to allow public sector insurance companies to raise money in the equity market for meeting capital requirements and expansion plans.
10. India has yet again shown its credibility as the world's most preferred BPO (Business Process Outsourcing) destination as three of its leading companies - Wipro, Airtel and Bank of India - have bagged the prestigious Outsourcing Excellence Award.The 'Best Offshore' award was bagged by Wipro-Nortel Networks for their 15 years of partnership that brought about many achievements for the offshore industry.The 'Best IT Infrastructure' award was given to Bank of India-Hewlett Packard combine for their efforts to implement a core banking solution. Bharti Airtel-Nortel Networks India won the 'Best First Steps' award for representing best practices in outsourcing.