India International bank in Malaysia will be operational by October:India International Bank (Malaysia) - which is a three-way joint venture between Bank of Baroda, Indian Overseas Bank and Andhra Bank – will entail a total investment of $100 million (approximately Rs 450 crore). Bank of Baroda, which holds the majority stake at 40 per cent, will invest about Rs 180 crore, while Indian Overseas Bank (35 per cent) and Andhra Bank (25 per cent) about Rs 157 crore and Rs 112 crore respectively in the joint venture, according to Mr M.D. Mallya, Chairman and Managing Director, BoB. The bank would be operational by October, he said, while talking to newspersons on the sidelines of a banking conclave organised by the Federation of Indian Chambers of Commerce and Industry on Thursday. (BL dt 12.08.2011 p.6)
RBI survey pegs down GDP growth to 7.9%:
India’s GDP growth projection for the current financial year has been pegged down to 7.9 per cent from the earlier projection of 8.2 per cent, according a Reserve Bank of India Survey. In its First Quarter Review of Monetary Policy 2011-12 on July 26, the RBI had stuck to its baseline projection of real GDP growth for the current year at 8.0 per cent. The Survey of Professional Forecasters on Macroeconomic Indicators had revised the real GDP growth rate forecast downwards to 8.2 per cent in its May survey from 8.5 per cent in the earlier survey. The latest round of survey has revised projections for agriculture, industry and services growth to 3.5 per cent (3.1 per cent in the May survey), 7.4 per cent (8.2 per cent) and 9.0 per cent (9.6 per cent) respectively. (BL dt 13.08.2011 p.4)
India’s GDP growth projection for the current financial year has been pegged down to 7.9 per cent from the earlier projection of 8.2 per cent, according a Reserve Bank of India Survey. In its First Quarter Review of Monetary Policy 2011-12 on July 26, the RBI had stuck to its baseline projection of real GDP growth for the current year at 8.0 per cent. The Survey of Professional Forecasters on Macroeconomic Indicators had revised the real GDP growth rate forecast downwards to 8.2 per cent in its May survey from 8.5 per cent in the earlier survey. The latest round of survey has revised projections for agriculture, industry and services growth to 3.5 per cent (3.1 per cent in the May survey), 7.4 per cent (8.2 per cent) and 9.0 per cent (9.6 per cent) respectively. (BL dt 13.08.2011 p.4)
India BBB rating stays, says S&P:
Standard and Poor’s has said there is no immediate threat to India’s sovereign debt rating of BBB, though loose fiscal policy and the government’s inability to carry forward economic reforms could have implications in the medium term.“We do not see an immediate impact on India’s sovereign rating (BBB-/Stable) resulting from the lowering of the US sovereign rating to AA+,” Standard & Poor’s sovereign analyst Mr Takahira Ogawa told PTI. S&P recently lowered the sovereign rating of the US to AA+ from AAA. The ratings are opinions that reflect the ability and willingness of the rated entity to meet financial obligations. The decision to lower the sovereign rating of the US had deleterious consequences for stock markets all over the world, including India. (DH dt. 16.08.2011 p. 14)
Standard and Poor’s has said there is no immediate threat to India’s sovereign debt rating of BBB, though loose fiscal policy and the government’s inability to carry forward economic reforms could have implications in the medium term.“We do not see an immediate impact on India’s sovereign rating (BBB-/Stable) resulting from the lowering of the US sovereign rating to AA+,” Standard & Poor’s sovereign analyst Mr Takahira Ogawa told PTI. S&P recently lowered the sovereign rating of the US to AA+ from AAA. The ratings are opinions that reflect the ability and willingness of the rated entity to meet financial obligations. The decision to lower the sovereign rating of the US had deleterious consequences for stock markets all over the world, including India. (DH dt. 16.08.2011 p. 14)
SBI net drops 46% in Q1 on higher bad loan provisioning:
Higher provisioning for NPAs and depreciation on investments dented State Bank of India’s net profits for the first quarter ended June 30, 2011 to Rs 1,584 crore, down 46 per cent decline over Rs 2,914 crore recorded in same period last year. The sharp fall was despite a 32-per cent increase in NII at Rs 9,700 crore (Rs 7,304 crore) and an 18 per cent increase in operating profit at Rs 7,242 crore (Rs 6,134 crore). However, the latest quarterly net profit was much higher than the Rs 20.88-crore recorded in the last quarter of fiscal 2010-11. (BL dt 14.08.2011 p.1)
Higher provisioning for NPAs and depreciation on investments dented State Bank of India’s net profits for the first quarter ended June 30, 2011 to Rs 1,584 crore, down 46 per cent decline over Rs 2,914 crore recorded in same period last year. The sharp fall was despite a 32-per cent increase in NII at Rs 9,700 crore (Rs 7,304 crore) and an 18 per cent increase in operating profit at Rs 7,242 crore (Rs 6,134 crore). However, the latest quarterly net profit was much higher than the Rs 20.88-crore recorded in the last quarter of fiscal 2010-11. (BL dt 14.08.2011 p.1)
SEBI wants powers to see phone call, e-mail records:
The SEBI has sought powers to seek e-mail and call records from telecom service providers. This move, the market regulator hopes, will help it prevent black money entering the market as also keep an eye on insider trading. The Minister of State for Finance, Mr Namo Narain Meena, told the Lok Sabha in a written reply on August 12 (unstarred question no 2091) that SEBI also wants to be in the list of law enforcement/investigating agencies that includes the CBI and the IB. A formal request has been sent to the Department of Telecommunications. Though getting call records from the phone service providers may not be difficult, tracking e-mail records could be. Most e-mail service providers such as Google, Yahoo, Hotmail have their servers based outside India. Even security agencies have been trying to get access to these services in vain. (BL dt 16.08.2011 p.1)
The SEBI has sought powers to seek e-mail and call records from telecom service providers. This move, the market regulator hopes, will help it prevent black money entering the market as also keep an eye on insider trading. The Minister of State for Finance, Mr Namo Narain Meena, told the Lok Sabha in a written reply on August 12 (unstarred question no 2091) that SEBI also wants to be in the list of law enforcement/investigating agencies that includes the CBI and the IB. A formal request has been sent to the Department of Telecommunications. Though getting call records from the phone service providers may not be difficult, tracking e-mail records could be. Most e-mail service providers such as Google, Yahoo, Hotmail have their servers based outside India. Even security agencies have been trying to get access to these services in vain. (BL dt 16.08.2011 p.1)
Banking on performance:
The rules of the game are changing for public sector bank staff. A number of banks are rolling out performance-based incentives for their officers and clerical staff numbering about 10 lakh. This, feel experts, would to ‘better’ the performance of the PSBs. “We are in the process of formulating a scientific system to encourage performance by structured incentives which will be implemented soon,” Ms Archna Bhargava, Executive Director, Canara Bank, told Business Line. Banks can spend at least one per cent of their profits on performance incentives, she added. (BL dt 17.08.2011 p.1)
The rules of the game are changing for public sector bank staff. A number of banks are rolling out performance-based incentives for their officers and clerical staff numbering about 10 lakh. This, feel experts, would to ‘better’ the performance of the PSBs. “We are in the process of formulating a scientific system to encourage performance by structured incentives which will be implemented soon,” Ms Archna Bhargava, Executive Director, Canara Bank, told Business Line. Banks can spend at least one per cent of their profits on performance incentives, she added. (BL dt 17.08.2011 p.1)
SBI hopes to see net profit grow to Rs 2,500 crore in Q2:
Having posted a decline in profit for two successive quarters, State Bank of India hopes to clock an increase in its bottomline to Rs 2,500 crore in the second quarter on account of lower provisioning against bad loans. “We expect to turn in another Rs 7,200 crore of operating profit. If you leave out the one-off provisions, which had happened due to raising of prudential norms and also the investment provision, we expect a normal provisioning of Rs 2,500-3,000 crore,” State Bank of India Chairman Mr Pratip Chaudhuri said. “So we would possibly look at a net profit of Rs 2,500 crore. This is broad indication, but we would get a number after we see August investments,” he said.
(ET dt. 17.08.2011 p. 11)
Having posted a decline in profit for two successive quarters, State Bank of India hopes to clock an increase in its bottomline to Rs 2,500 crore in the second quarter on account of lower provisioning against bad loans. “We expect to turn in another Rs 7,200 crore of operating profit. If you leave out the one-off provisions, which had happened due to raising of prudential norms and also the investment provision, we expect a normal provisioning of Rs 2,500-3,000 crore,” State Bank of India Chairman Mr Pratip Chaudhuri said. “So we would possibly look at a net profit of Rs 2,500 crore. This is broad indication, but we would get a number after we see August investments,” he said.
(ET dt. 17.08.2011 p. 11)
Banking doors set to open for India Inc:
Indian companies may have reasons to rejoice, as the RBI is likely to allow some of them an entry into the banking space. The entry will, of course, be subject to stiff riders. Real estate companies, however, may not be as lucky as they are among four sectors that will find the banking doors locked. According to a government official, the RBI is expected to come out with draft guidelines on allowing new private banks by next Monday, as the finance ministry and the central bank have resolved their differences on most of the contentious issues. The official said foreign direct investment (FDI) in new banks may be capped at 49% for now, as the RBI was not in favour of higher FDI. In a discussion paper released in August last year, the central bank had suggested capping FDI in new banks at 49% in the first 10 years, which could be subsequently raised to 74%. The ministry was open to a higher cap. The number of new licences to be issued has not been decided yet and the call will be taken by the RBI. The guidelines were more or less final, but the regulator would want to give a one-month window to all stakeholders to give their suggestions on the draft, said the official. (BS dt. 18.08.2011 p. 1)
Indian companies may have reasons to rejoice, as the RBI is likely to allow some of them an entry into the banking space. The entry will, of course, be subject to stiff riders. Real estate companies, however, may not be as lucky as they are among four sectors that will find the banking doors locked. According to a government official, the RBI is expected to come out with draft guidelines on allowing new private banks by next Monday, as the finance ministry and the central bank have resolved their differences on most of the contentious issues. The official said foreign direct investment (FDI) in new banks may be capped at 49% for now, as the RBI was not in favour of higher FDI. In a discussion paper released in August last year, the central bank had suggested capping FDI in new banks at 49% in the first 10 years, which could be subsequently raised to 74%. The ministry was open to a higher cap. The number of new licences to be issued has not been decided yet and the call will be taken by the RBI. The guidelines were more or less final, but the regulator would want to give a one-month window to all stakeholders to give their suggestions on the draft, said the official. (BS dt. 18.08.2011 p. 1)
Syndicate Bank likely to buy 26% in Aviva Life:
Aviva Life has emerged as the front-runner for tying up with Syndicate Bank for its proposed insurance joint venture. According to sources, the Manipal-headquartered lender is likely to pick up 26% stake. Mohit Burman, director of fast-moving consumer goods major, the Dabur Group, holds 74 per cent stake. The rest is held by UK’s Aviva. A Syndicate Bank official said the bidding process was still on and the bank was yet to decide on the insurance partner. “We have just finished receiving the financial bids and would shortlist three-four players on the basis of financial bids. Then, we would take the final call,” said a senior bank official. However, according to sources involved with the deal, Avia Life is better placed, as it is willing to offer significant equity. (BS dt. 18.08.2011 p. 6)
Aviva Life has emerged as the front-runner for tying up with Syndicate Bank for its proposed insurance joint venture. According to sources, the Manipal-headquartered lender is likely to pick up 26% stake. Mohit Burman, director of fast-moving consumer goods major, the Dabur Group, holds 74 per cent stake. The rest is held by UK’s Aviva. A Syndicate Bank official said the bidding process was still on and the bank was yet to decide on the insurance partner. “We have just finished receiving the financial bids and would shortlist three-four players on the basis of financial bids. Then, we would take the final call,” said a senior bank official. However, according to sources involved with the deal, Avia Life is better placed, as it is willing to offer significant equity. (BS dt. 18.08.2011 p. 6)
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