Banking News.....


Par 100 posts (V.I.P)
Banks see profits in India's millionaires club

MUMBAI: India's millionaires club is expanding as the economy explodes, offering a tantalising opportunity to wealth management institutions seeking to help these newly minted tycoons invest their money. But wealth managers seeking to profit from India's new crop of millionaires, who have made their fortunes in software, telecommunications, oil refining and property, must first win over suspicious clients who are notoriously coy about their wealth and have fixed ideas about their investment portfolios.

"The first question you hear is: 'Who told you I have money?'," said Sonu Bhasin, head of Axis Bank's wealth management arm, whose team of 75 relies on referrals for clients. "Being a private banking client is not seen as a status symbol to flaunt.

They don't want to talk about it with friends and they want absolute discretion from us," she said. Economic growth which has averaged 8.6 percent for four years and a record-setting stock market have boosted the number of Indians with more than $1 million to invest by nearly 21 percent in 2006 to 100,015, the Merrill Lynch/Capgemini World Wealth report showed.

But even that is a gross underestimate, bankers say. "There's probably that many millionaires in south Mumbai alone," Shailendra Bhandari, managing director, Centurion Bank of Punjab, said tongue-in-cheek, referring to the financial hub's well-heeled district. Global banks, including Merrill Lynch, Citigroup, UBS, Standard Chartered, BNP Paribas, HSBC, Morgan Stanley and Societe Generale have been expanding their wealth management services in India.

Local banks including ICICI Bank, who have focused on credit cards and home loans, are also jumping in, lured by the more lucrative fee-based incomes in managing wealth.


The banks are encountering younger, more sophisticated clients with a higher risk appetite than their western peers, but who may be slow to warm up to professional wealth advisers. "Many of them have a fixed notion of what their portfolios should look like," said Bhasin at Axis, which has tied up with Banque Privee Edmond de Rothschild Europe to also service overseas Indians holding about $1 trillion of investable assets.

"It takes a while to convince them we are on the same side of the table, that they need not take on so much risk," she said. The newly wealthy are open to more risk and seek options such as hedge funds, private equity and real estate. "The level of sophistication continues to rise, as does the level of money being made by younger entrepreneurs," said Peter Hu, head of investor solutions, Barclays Capital, Asia ex-Japan.


Par 100 posts (V.I.P)
RBS to get ABN's BPO operations

MUMBAI: Royal Bank of Scotland (RBS) will takeover ABN Amro's outsourcing operations in the country. A consortium led by RBS is in the process of taking over the Dutch bank globally.

Till now, it was not clear who would takeover ABN Amro Central Enterprise Services (ACES) as discussions were on within the consortium partners. “ACES will be with RBS. They are impressed with the quality and they feel that this could be a resource centre, which will fuel their growth plans and also help in quick launches,” according to Meera Sanyal, country executive, ABN Amro Bank India, and chairperson, ACES.

Incidentally, RBS has an IT offshoring centre in India with around 750 people. ACES at present employs around 4,500 people across Mumbai, Delhi and Chennai and is into operations, HR-shared services, finance-shared services and also in KPO space like credit analytics and equity research.

Ms Sanyal took over as the head of the Indian operations after Romesh Sobti put in his papers. Mr Sobti is moving on to head IndusInd Bank. For Ms Sanyal it has been a lateral move. She was till now the head of services (Asia) of ABN Amro, which included operations, IT, procurement, premises and business continuity management. She was responsible for 16 countries in Asia.

Other than Mr Sobti, two other senior officials have also put in their papers. These include Paul Abraham, who was heading ACES, and reporting to Ms Sanyal and K Sridhar, who headed the risk management. Two more senior officials are also said to be joining Sobti in IndusInd Bank. Ms Sanyal has been in discussions with other senior management for the past couple of days. “I have had intense discussions with all the senior people. My understanding is that they have faith in the future growth of the bank and their careers in the bank,” she said.

With the backing of RBS, ABN is on an aggressive mode in the country. “Our mission is to be the No.1 foreign bank in products we choose across global markets, consumer and transaction banking. There will be an equal focus on wealth management. In the products that we are very strong, we will play to the strengths of India,” said Ms Sanyal.

ABN Amro currently has competition from other foreign banks including Citi, StanChart and HSBC. In consumer banking, the Dutch bank is behind these three players.

The Indian operations are the bank’s top revenue earner in Asia. In transaction banking and global markets, the Indian operations have 33% and 42% of Asia’s share, including UAE.

The mission for ABN Amro in Asia in the next five year is to be among the top 5 banks and treble its revenues. The bank’s Asian operations have grown 175% between 2005 and 2007. “RBS is looking at India as a jewel in the crown. They plan to invest in Asia, which they feel is a growth market. They have plans on both consumer and global markets. Their growth plans are very aggressive,” she added. The AMC operations of the bank in India would move to Fortis.


Par 100 posts (V.I.P)
ICICI Bank launches high yield fixed deposit scheme for NRIs

MUMBAI: ICICI Bank has launched a new non-resident ordinary deposit feature in order to enable NRIs to maximise their post tax yield on NRO fixed deposits.

With this scheme, namely NRO Fixed Deposit Plus, NRI customers can avail tax deducted at source at a concessional rate under the double taxation avoidance agreement. The bank will offer this feature initially to non resident Indians from countries such as US, UK, Canada and Singapore.

However, plain vanilla NRO deposits, which earn interest equal to the high yield resident deposits, are not eligible for the statutory tax benefits enjoyed by non resident external or foreign currency non resident deposits.


Par 100 posts (V.I.P)
Exim Bank extends $35.2 mn credit to Cambodia

MUMBAI: Export-Import Bank of India (EXIM) said it has extended a USD 35.2-million Line of Credit (LoC) to the Government of Cambodia for financing some of the latter's infrastructure projects.

The fund will be utilised to finance the Stung Tasal Development Project, purchase of the water pumps and for the construction of the electric transmission line between Kratie and Stung Treng Province in Cambodia, an Exim release said here.

Under the agreement, Exim Bank bank will reimburse 100 per cent contract value to the Indian exporter, upfront upon the shipment of goods, the bank said.

The pact was signed between Secretary of state, Ministry of Economy and Finance, Cambodia, Aun Porn Moniroth and Exim Bank's Chairman and Managing Director T C Venkat Subramanian.

With this, Exim Bank now has 85 LoCs in place, covering over 80 countries in Africa, Asia, Latin America and Europe, with credit commitments amounting to USD 2.8 billion.


Par 100 posts (V.I.P)
RBI asks regional rural banks to disclose CRAR

MUMBAI: In a move to impose greater financial discipline, the Reserve Bank on Friday asked all regional rural banks to disclose capital-to-risk-weighted- assets ratio, which indicates the solvency status, for 2007-08.

"In order to assess the capital structure of the RRBs, in the context of financial stability of the whole system, it is proposed that they should disclose the level of CRAR in their balance sheets," RBI said in a notification.

The roadmap for achieving the desired level of CRAR norms would be worked out later, it said.

Currently, RRBs are outside the purview of the CRAR framework. For scheduled commercial bank, the ratio is pegged at 9 per cent.

Under the proposed framework, the balance sheet assets and non-funded or off-balance sheet items will be assigned weights and banks have to compute the ratio of their capital funds to the aggregate of risk weighted assets and other off-balance sheet exposures, it said.

As of March 2007, total number of RRBs was 96 with the amalgamation of 145 such banks into 45 new RRBs. The total number of RRBs declined from 196 at end-March 2005 to 133 at end-March 2006.


Par 100 posts (V.I.P)
Banks should not give in to any pressure: FM

TIRUCHIRAPALLI: Union Finance Minister P Chidambaram on Friday asked the banks not not to give in to pressure of any kind, including that from political circles, while issuing loans to applicants.

Bank officials should weigh the merit of the case and be liberal in sanctioning loans to the poor and downtrodden, he said while inaugurating the 179th branch of the Pandiyan Grama bank(PGB) here.

"Every customer, be it a depositer of Rs five or Rs five crore, should be treated equally that too when the government was keen on implementing financial inclusion in the rural areas", he said.

He lauded the performance of PGB for achieving 'numero uno' status among the 92 regional rural banks in the country.

He said the government had given its approval of PGB to expand its operations in six more districts of Tamil Nadu namely Tiruvarur, Thanjavur, Tiruchirappalli, Theni, Nagapattinam and Perambalur in addition to the nine districts where it was already operating.

He also said that the PGB will be opening the 180th branch at Theni on December 31 and four more branches would be opened before the end of this fiscal in the state.


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StanChart launches rewards plan for e-banking

MUMBAI: Global banking major, Standard Chartered Bank, on Thursday said that it is launching a rewards programme for savings account customers who avail of electronic banking channels, beginning from January 1.

The initiative is intended to encourage e-banking which is both more convenient and also supportive of the environment, the bank said in a press release issued here today.

The offering rewards customers for performing e-transactions on their savings accounts.

"It is a key initiative to boost the usage of online payment, ATMs, electronic clearing service (ECS) and the standing instructions facility," the bank said.

Customers need to only use these channels to be rewarded a point for every single use as per the terms of the proposition, irrespective of the size of their transactions.

Standard Chartered will pass to customers savings made as a result of using electronic channels of payments.

The reward points can be exchanged for a cash-back (1 point=Re 1) into the customer's bank account.

The bank's head, Consumer Transaction Banking, CDK Sai Narain, said that, "this programme is essentially to encourage paperless transactions. Electronic banking is convenient, efficient and very secure. It also supports Standard Chartered Bank's global focus on building a sustainable business by supporting the environment and climate change-related initiatives."


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RBI to build its IT muscle, plans data centres in Maharashtra

MUMBAI: In one of the Reserve Bank of India’s (RBI) largest IT implementations in recent times, the central bank is setting up two large data centres in Maharashtra and overhauling its IT infrastructure, consisting of legacy applications and software, to move to a modern, more robust system. The exercise will cost RBI close to Rs 100 crore, and the contract has been awarded to software exporter HCL Technologies, sources close to the development said.

Under the terms of the contract, HCL will set up the two centres and maintain them for RBI for a period of seven years. A part of the contract also involves moving the different applications that are running across locations and consolidating them at a single place on web and Java-based platforms. An RBI spokesperson confirmed the development, but declined to comment on the implication of the move for banks, citing security reasons. A source said this would probably be RBI’s first data centres.

Of the two data centres RBI is setting up, one would be located at Navi Mumbai (where others like BSE also have their infrastructure) and the second, which will function as a disaster recovery centre, will be based at Nagpur. The implementation and maintenance of the project will be handled by HCL Comnet, the HCL Tech arm that provides infrastructure management services, the source said.

HCL Comnet officials declined to speak on the development, but said the firm was also taking on domestic clients. The development indicates that HCL Technologies is getting serious about the domestic market, which is becoming more lucrative with larger contracts from the government and private sector players.

Last year, Infosys Technologies said it would also take on select domestic contracts in a departure from its earlier stance of not taking on domestic business because it was low-margin. After telecom, the government and retail sectors are projected to make the largest IT spends in India.


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Indian Bank to recover 670 cr bad loans

NEW DELHI: Public sector lender Indian Bank today said it expects to recover 670 crore bad loans during the ongoing fiscal.

"So far, we have recovered 440 crore and expect to recover another 230 crore in the next three months," Indian Bank's CMD M S Sundarrajan told media.

Of the total recovery, around 300 crore would be added to the bank's reserves and surpluses, giving more headroom for raising capital through bonds, he said.

Asked about the loan target for the ongoing fiscal, he said the bank expects credit growth of 25 per cent during the year, with the deposit growth target pegged at 20 per cent.


Par 100 posts (V.I.P)
Bank chairman held in multi-crore scam

NAGPUR: The prime accused in the multi-crore Samata Sahakari bank scam, its Chairman Milind Chimurkar was arrested from Ahmedabad by the Nagpur police.

Giving details of the police operation, the Additional Commissioner of Police (Crime) Bhushan Kumar Upadhyay said, the police had registered an FIR against Chimurkar and 29 others, including some bank directors, more than a month back.

However, many of the accused were absconding since then. The Rs 145.60 crore scam was detected more than a year back.

The bank directors had flouted Reserve Bank of India norms while disbursing loans, Upadhyay said, adding 12 prominent groups of Nagpur were found to be recipient of loan from this bank. But the loan was never repaid and neither did the bank make any effort to get it back.

Upadhyay also expressed surprise at the fact that though the irregularities have been going on in the bank since 1997, it could never be detected in the annual auditing undertaken by the co-operatives department of the state government.

The police would now interrogate Chimurkar and look for not just the documents required in the case, but also try and get details of others who continue to be at large.

Meanwhile, Milind Chimurkar has been remanded to police custody till January 2.


Par 100 posts (V.I.P)
Business mix no mirror to bank's efficiency

MUMBAI: Next week when finance minister P Chidambaram reviews the performance of state-owned banks, he may well have to reflect on the fact that balance sheet size is in no way an indicator of the efficiency of a bank.

A study of select banks shows that a number of banks with a smaller business mix have reported higher profits than those with a larger business mix — which is deposits plus advances. For instance, Bank of India reported an operating profit of Rs 1,517 crore against its total business of Rs 2,25,406 crore. Compared to this, Canara Bank, which features among the largest state-owned banks, reported an operating profit of Rs 1,262.3 crore with total business of Rs 2,40,537 crore.

Similarly, Indian Overseas Bank has reported an operating profit of Rs 867 crore against its total business of Rs 1,29,628 crore. In comparison, Central Bank of India, which recently raised over Rs 800 crore from the capital market, reported an operating profit of Rs 511 crore, despite the fact that its business mix was much higher at Rs 1,44,816 crore.

Surprisingly, Canara Bank, which is undergoing a massive branding exercise, has a business mix three times that of Corporation Bank. Yet, its operating profit is only twice that of Corporation Bank. In fact, many banks including Allahabad Bank, Corporation Bank and Indian Overseas Bank with a far lower business mix than that of Central Bank of India have outpaced the Mumbai-based bank in terms of profits.

Analysts say if the profits are not commensurate with the business mix, it does not reflect well on the efficiency of the bank. Further, it also indicates that the bank has earned a lower fee income and that it has raised deposits on which the management has failed to generate healthy revenues.

But the performance of state-owned banks pales when compared with private banks. HDFC Bank, has reported an operating profit of Rs 1,610 crore, which is much higher than that reported by a host of large state-owned banks such as Canara Bank, Bank of Baroda, Bank of India and Union Bank of India.

Yet, its total business mix at Rs 1,53,347 crore is much lower than these banks. This could be partly because HDFC Bank has posted the highest net interest margin (NIM) of 4% in the local banking industry while most state-owned banks are stacked far below, averaging NIMs in the range of 2.3% to 3.5%.

Similarly, the country’s largest bank, State Bank of India, has a business mix twice that of the second-largest bank, ICICI Bank. Yet, the private bank has reported more than half the profit of SBI in the first six months. This is despite the fact that ICICI Bank’s NIM at 2.25% is much lower than that of SBI at 2.84%.


Par 100 posts (V.I.P)
Nabard grants Rs 222 cr for infrastructure development

KOLKATA: The National Bank for Agriculture and Rural Development (Nabard) on Thursday said it has sanctioned Rs 222.23 crore for Rural Infrastructure Development Fund (RIDF) of West Bengal.

Nabard said the amount was sanctioned for projects under 13 tranches of RIDF for building 48 rural roads, three bridges, 1,208 minor irrigation projects, construction of 1,119 anganwadi centres, drainage and joint forest management projects.

In 2007-08, total cumulative assistance from Nabard in RIDF-XIII to West Bengal was Rs 358.53 crore, Nabard said.

Since inception of RIDF, Nabard has sanctioned loan to 25,392 projects totalling 4338.30 crore, the release said.

Rural connectivity received the highest attention with Rs 2188.74 crore or 50.45 per cent of the total assistance.
hey boyz n gilrz
there r lots of new things going on in banking sector
soo stay updated


Hey friend, you said right thing that there are many changes taking place in banking sector in order to improve their service quality. Well, i am also uploading a document which will show you some reforms or changes took place in banking sector.


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