Tuesday, 15 November 2011

Banking and Financial News October 2011 Part 3 of 3

Canara Bank enters into MOU with M/s Brickwork Ratings India Pvt Ltd.:
Canara Bank signed a Memorandum of Understanding on 19.10.2011 with M/s Brickwork Ratings India (Pvt) Ltd, a Bangalore based credit rating agency for rating of units (both existing and prospective) under MSME sector, in the presence of Sri Ashok Kumar Gupta, Executive Director, Sri G Sreeram, GM and Sri Vivek Kulkarni, Managing Director, M/s Brickwork Ratings India Pvt. Ltd. This is yet another initiative of Canara Bank, to boost the MSME Credit growth.

Bankers fear new borrowers will prefer housing finance firms:The National Housings Bank’s (NHB) latest circular waiving penalty on full home loan prepayment may give housing finance companies (HFCs) an edge over banks this festival season. Bankers said that the RBI should also issue the same guidelines for banks to avoid a situation where HFCs have an advantage over banks. Mr R S Sangapure, General Manager, Central Bank of India, says, “Even the RBI may waive prepayment penalty soon. We expect to hear something in a month or so because prepayment penalty is an important parameter for customers to choose a lender.” (BS dt. 21.10.2011 p. 7)

Central Bank launches direct taxes payment facility:Central Bank of India has launched a direct taxes payment facility through the bank’s ATM network. This facility was inaugurated by Mr C. R. Sundaramurti, Controller General of Accounts, at the bank’s Connaught Circus branch in the Capital. Speaking on the occasion, Mr Sundaramurti urged banks to provide IT-enabled services so as to make banking a hassle-free experience for all. Mr M. V. Tanksale, Chairman and Managing Director of the bank, and Executive Directors, Ms V. R. Iyer and Mr R. K. Dubey were present on the occasion.  (BL dt. 22.10.2011 p. 6)

Forex reserves up $5.269 b to $317.5 b:India’s foreign exchange reserves surged by $5.269 billion to $317.500 billion in the week ended October 14, according to Reserve Bank of India’s ‘Weekly Statistical Supplement’. This is the second week in a row that foreign exchange reserves have seen an increase. In the previous week ended October 7, foreign exchange reserves rose by $749 million to $312.231 billion. (BL dt. 22.10.2011 p. 6)

Value of cheque transaction down:The total value of transactions carried out through cheques across the country in August amounted to Rs 7.43 trillion, down 83% over that in the same month last year. Banks had cleared cheques worth Rs 8.11 trillion in August 2010, according to the RBI data. The number of cheques cleared by banks in August also went down by 5% from the same month last year. A total of 11.16 crore cheques were cleared by banks in the month under review, compared with over 11.75 crore in the corresponding month of 2010.   (Mint dt. 24.10.2011 p. 10)

SBBJ to unveil special branch for rich & famous:This Diwali, top 1,000 millionaires of the country will get a well decorated greeting card from public sector lender State Bank of Bikaner and Jaipur (SBBJ) inviting to open a privileged account in its upcoming 'crorepati only' branch in Jaipur. The bank is targeting rich and famous, including Anil Ambani, Amitabh Bachchan, Mukesh Ambani, Kumar Mangalam Birla, Shah Rukh Khan and Sachin Tendulkar among other stalwarts of respective fields who can open account with a minimum opening balance of Rs 1 crore. This will be the second crorepati branch of the country after SBI's 'Kohinoor Banjara Premium Banking Centre' in Hyderabad which was opened last year. (ET dt. 24.10.2011 p. 13)

3-year rural posting 'must' for new bank clerks:New clerk recruits in public sector banks will have to serve three years mandatory in rural and semi-urban areas. Also, only graduates will now be eligible for taking clerical examinations for banks, as opposed to intermediate passed candidates at present. These are some of the recommendations of the A K Khandelwal Committee that have been asked to prepare a human resource plan incorporating these recommendations and get them approved by their Boards of Directors latest by December 31, 2011. The Khandelwal  Committee was set up on October 22, 2009 to study human resource issues of public sector banks. The committee has made 105 recommendations. (Bl dt. 25.10.2011 p. 1)

Syndicate Bank ties up with Asit C. Mehta for online platform:Syndicate Bank has tied-up with Asit C. Mehta Investment Interrmediates (ACMIIL) for the launch of ‘Synd e-Trade’ — an online trading platform. This platform will enable the customers of Syndicate Bank to make investments in equities, derivatives and initial public offerings, said the bank in a release. “Customers who have a bank account and demat account with Syndicate Bank, will now have the facility to open an online investment account with Asit C. Mehta Investment Intermediaries Ltd,” said Mrs Deena Mehta, Managing Director, ACMIIL. (BL dt. 25.10.2011 p. 12)

Find a fake note? Fear not to report it:If you come into possession of a fake currency note inadvertently, don’t be afraid to report it. No more will you face the threat of a police case or be treated with suspicion, thanks to new norms of the Reserve Bank of India. As per the existing norms, banks are required to file a first information report (FIR) immediately upon detection of a fake note. However, hesitation among customers as well as bank officials in taking the matter to police has led to under-reporting of the detection of fake notes. To address this, the apex bank now has instructed banks that there is no need to register a case with police unless five or more pieces of fake notes are detected in a single transaction. In all other cases where one or up to four fake notes are detected, a consolidated report can be sent to the police at the end of every month, the Reserve Bank of India said. This decision was taken on the recommendations of the High Level Group on Systems and Procedures for Currency Distribution Chaired by Ms. Usha Thorat, former Deputy Governor, Reserve Bank of India. (BL dt 28.10.2011 p.14)

High savings deposit rate likely to dent banks’ profits:Fears of banks’ earnings plummeting in a deregulated savings deposit rate regime appear to have gripped investors, with most analysts hinting that profitability may come under pressure due to higher cost of funds amid slowing growth in advances. “The rise in the savings deposit rate will increase pressures on banks’ profitability,” Mr Suman Chowdhury, head of Crisil Ratings, said. The rating agency expects the lenders’ return on asset ratio to shrink by five basis points (bps) because of higher savings deposit rate, even if banks increase their transaction and service charges on such deposits. The RBI allowed banks to decide on their own the interest rate on savings deposits. The central bank, however, asked banks to pay a uniform rate on savings deposits up to Rs 100,000 irrespective of the amount in the account.  (BS dt 27.10.2011 p.6)

Banks look to young talent as retirements bunch up:For young, talented bank employees with a passion for work, there is opportunity to move up the ladder. To fill the leadership vacuum likely to be created in the middle-to-upper rungs of management due to retirement, many banks are now drawing up strategies to deal with the situation. In fact, this is one of the key recommendations of Dr Anil Khandelwal Committee, which looked into the human resources function of bank. Some of the suggestions of the panel are now being implemented by the Government in a phased manner. It is estimated that nearly half of the senior managers in banks would begin to retire in next 3-5 years and the trend would continue for some more years. This will open up new avenues for the younger employees to grow even as the lateral movement will create fresh vacancies at the entry level.  (BL dt 29.10.2011 p.6)

Forex reserves up $858 m to $318.35 b:India’s foreign exchange reserves rose by $858 million to $318.358 billion in the week ended October 21, according to Reserve Bank of India’s ‘Weekly Statistical Supplement’. In the previous week ended October 14, India’s foreign exchange reserves rose by $5.269 billion to $317.50 billion The reserves increased on account of a $861 million rise in the foreign currency assets, taking it to $282.514 billion. Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen held in reserves. In the week under consideration, the euro strengthened against the dollar from $1.3737 on Monday to $ 1.3896 on Friday. 
(BL dt 29.10.2011 p.6)

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