Corporation Bank elects two directors (BL 08.09.17)
The extraordinary general meeting of shareholders of Corporation Bank resolved and approved the election of two shareholder directors in Mangaluru on Thursday. Jai Kumar Garg, Managing Director and CEO of the bank, in a press release, announced that Pradeep Kumar Jain and Chitra Gouri Lal have been elected as shareholder directors of the bank. They will hold office for a period of three years till September 7, 2020.
Revival strategy: BoM short-lists branches, zones for merger (BL 08.09.17)
In a bid to save on operating expenses, Bank of Maharashtra (BoM) has constituted a committee to zero in on branches and zones that need to be merged. This move comes at a time when the RBI has invoked prompt correct action (PCA) against the Pune-headquartered public sector bank to nurse it back to health from it current weak financial position. The merger of branches and zones also needs to be seen in the context of the bank signing a memorandum of understanding (MoU) with the Finance Ministry to get Rs. 300-Cr capital. Along with the MoU, the bank has submitted to the ministry a turnaround plan, outlining reduction in the number of administrative offices to curtail operating expenses. This has been highlighted as one of the key strategies for reviving its fortunes. In Mumbai, as per the recommendation of the committee, BoM has decided to merge Bandra (West) branch with Khar branch; senior citizens branch at Cuffe Parade with another branch in the same area; Worli personal banking branch with another branch in the same area; and the self-help group branch in Goregaon (East) with another branch in the same suburb. Merger of zones will be conducted in a phased manner beginning with the merger of Mumbai Suburban Zone with Mumbai City Zone; Pune West Zone with Pune City Zone; and Raigad Zone with Thane Zone. The aforementioned merger of branches and zones will be effective from September 28. The merger exercise has been done initially for zones from Maharashtra and would be extended to other States later on. RP Marathe, MD and CEO, told analysts last month that in terms of both the PCA as well as MOU signed with the government, his bank is not planning any increase in branch network, which as at June-end stood at 1,897. Devidas Tuljapurkar, Joint General Secretary, All Indian Bank Employees Association, said in order to show to all stakeholders that they are taking action, bank managements are resorting to soft options such as branch or zone closure.
Saturday banking: TMB told to maintain status quo for now (BL 08.09.17)
The Regional Labour Commissioner, Madurai, has restrained Tamilnad Mercantile Bank (TMB) from making any changes to service rules and declare all Saturdays as working days for select branches of the bank. This is in response to a dispute raised by the Tamilnad Mercantile Bank Employees Union over what it described as the unilateral decision of the management to this effect and made known through an internal circular issued last month. The new work schedule was supposed to have come into effect from September 1 but the Regional Labour Commissioner has ordered that status quo be retained until September 18 when the two parties have been invited for conciliatory talks. Earlier, the TMB circular said that select branches shall work on second and fourth Saturdays, currently banking holidays, with a view to building new business, expediting recovery of NPAs and improving customer service. The newly-declared working Saturdays would apply only for the specially denoted ‘strategic branches’ (109 in number as on date). Select staff, up to a maximum of one-third of the total in such branches, and jewel appraisers, will work on these days. They will be given a compensatory leave within 15 days. Branch heads will ensure that the compensatory leave thus earned is exhausted within this time-frame. Other offices of the bank will not function on the second and fourth Saturdays, at least for now, the circular had clarified. The Commissioner, in identical notices sent to both parties, cautioned against making any change in the service conditions during the pendency of the conciliation proceedings.
Bank of India cuts MCLR by 10 bps (FE 08.09.17)
Bank of India slashed its one-year marginal cost of funds-based lending rate (MCLR) by 10 basis points (bps) to 8.3%. The bank also slashed MCLRs for some other tenors by 5-10 bps and said the new rates will come into effect on Sunday. On Wednesday, IDBI Bank had reduced by 10 basis points (bps) to 8.55%, saying that the reduction in MCLR was expected to positively impact loan growth, thereby supporting the growth impulses in the economy. Last week, Dena Bank had reduced its one-year MCLRs by 15 bps. Other public sector lenders have also cut their lending rates recently. PNB and Union Bank of India had lowered their MCLRs. The one-year MCLR at PNB now stands at 8.15%, down from 8.35% earlier. Union Bank had reduced its one-year MCLR by 20 bps to 8.2%. This series of cuts follows the RBI’s decision to lower the repo rate by 25 bps to 6% at its August policy.
IDBI Bank seeks bids to sell 13.71% stake in SIDBI (FE 08.09.17)
IDBI Bank sought bids to sell 13.71% stake in Small Industries Development Bank of India (SIDBI). According to a source, the bank has already identified a buyer for the remaining 2.54% its owns in SIDBI. Last month, the lender had mandated SBI Capital Markets (SBI Caps) to look for a buyer for its entire stake of 16.25% but had to extend the bid submission deadline in more than one occasion owing to tepid investor response. “Although we have identified a buyer for the 2.54% stake, a few formalities are yet to be completed and we hope to sell the remaining stake in the latest round,” a banker said. IDBI Bank is the second-largest shareholder in SIDBI after SBI which owns 16.73%. Other shareholders include the government of India (15.4%), LIC (12.21%), Punjab National Bank (3.99%) and other public sector banks and insurance companies. The advertisement announcing the stake sale said that investors require to submit a demand draft of Rs 29,500 in favour of the bank by September 14. The sale is part of IDBI Bank’s plan to raise capital by divesting non-core assets. Mahesh Kumar Jain, MD and CEO, IDBI Bank had said in June that it would sell Rs 5,000 Cr of non-core assets in FY18 to bolster its capital base. The bank had formed a committee to work around right valuations. The bank has, so far, received 1,861-Cr capital infusion from the government in FY18. Meanwhile, in May, the RBI had initiated a prompt corrective action (PCA) for IDBI Bank. The action was prompted by IDBI Bank’s high net non-performing assets (NPAs) and negative return on assets (RoA). In Q1FY18, the bank’s net NPA ratio stood at 15.8% while the RoA stood at -1%.
Homebuyers in Jaypee Infrastructure project suffer big setback; here is what IDBI Bank wants SC to do (FE 08.09.17)
IDBI Bank, the largest lender to the Jaypee group asked the Supreme Court to vacate its Monday’s stay order and allow the NCLT-appointed interim resolution professional (IRP) to turn around real estate developer Jaypee Infratech’s finances and help recover Rs 10,000-Cr debt. While the bank had orally mentioned its plea before the apex court on Tuesday, it filed a detailed application on Thursday. It said the stay order had the “unintended effect of derailing the whole time-bound process envisaged under the Insolvency and Bankruptcy Code”. “The stay order inadvertently undoes all the developments that took place after NCLT’ August 9 order… IRP is in the process of verifying all the claims received from the creditor and soon the first meeting of the committee of creditors would have been held,” it added. In its fresh affidavit filed through counsel Bishwajit Dubey, the IDBI Bank said the stay order had the impact of transferring the control and management and bank accounts of Jaypee back to its promoters who had led the company to this situation. “As consequences of the stay, control is transferred to Jaypee promoters as a result of which all stakeholders, including all the creditors, will lose control. The financials of Jaypee are already in a poor condition and the creditors are concerned that such a transfer will prevent the assets of Jaypee from being managed properly,” it said, adding that it is in the interests of all the stakeholders that the IRP, who is a neutral person and in-charge of running Jaypee as a going concern is not prejudicial to the interests of the homebuyer and he owes a fiduciary duty to all the stakeholders, including creditors. Around 32,000 buyers have booked their flats in 27 different housing projects of Jaypee Infratech. IDBI Bank has loaned the company Rs 4,000 Cr of the total exposure of Rs 10,000 Cr.
US ousts Pakistan’s Habib Bank amid money laundering concerns (FE 08.09.17)
US banking regulators ordered Pakistan’s Habib Bank to shutter its New York office after nearly 40 years, for repeatedly failing to heed concerns over possible terrorist financing and money laundering, officials said today. Habib, Pakistan’s largest private bank, neglected to watch for compliance problems and red flags on transactions that potentially could have promoted terrorism, money laundering or other illicit ends, New York banking officials said. The state’s Department of Financial Services, which regulates foreign banks, also slapped a $225 million fine on the bank, although that is much smaller than the $629.6 million penalty initially proposed. Habib has operated in the United States since 1978, and in 2006 was ordered to tighten its oversight of potentially illegal transactions but failed to comply. New York regulators said Habib facilitated billions of dollars of transactions with Saudi private bank, Al Rajhi Bank, which reportedly has links to al Qaeda, and failed to do enough to ensure that the funds were not laundered or used for terrorism. “DFS will not tolerate inadequate risk and compliance functions that open the door to the financing of terrorist activities that pose a grave threat to the people of this State and the financial system as a whole,” DFS Superintendent Maria Vullo said. “The bank has repeatedly been given more than sufficient opportunity to correct its glaring deficiencies, yet it has failed to do so.” Habib permitted at least 13,000 transactions that were not sufficiently screened to ensure they did not involve sanctioned countries, the agency said. And the bank improperly used a “good guy” list to rubber stamp at least $250 million in transactions, including those by an identified terrorist and an international arms dealer, regulators said.
SBI to Go All Out to Capitalise on Reviving Home Loan Demand (ET 08.09.17)
SBI, battling the lack of any major project lending plans, is planning to capitalise on the reviving demand for home loans and may use the festival season to drive its mortgage business which is already accelerating. In what is likely the biggest push to increase market share in home loans since its teaser rates a decade ago, the biggest lender of the country has waived off processing fees for all home loans and will deploy 7,500 specialised `feet on street' to market its home loans over and above the thousands who already do so at its branches. “We expect that in this festive season our volumes will increase substantially, we have already brought down our interest rate which is the lowest in the industry and now we have also waived the processing fee,“ said Vaijinath MG, chief general manager, State Bank of India. “We have an exclusive offer for loans up to 30 lakh where interest rate is 8.35%. We are also offering top-up loans where rates are comparable to our home loan interest rate and we have waived processing fee on that as well.“ Banks which are facing the heat of slow loans offtake due to poor private investments are piling on the opportunity in secured lending home loans where the defaults have been minimal so far. With loans to industry contracting to 0.3%, retail loans are growing by 15%. SBI has also launched a new scheme campaign `Hamara Ghar' (Our Home) that caters to the affordable housing segment. The loan carries a fixed rate of interest for two years up to a loan amount of Rs 30 lakh. The bank posted a growth of 13.92% in its home loan book at the end of June 2017. SBIs housing loan book now stands at 2.8 lakh Cr. Its overall retail book had grown by 13.31% last quarter. The bank had also reported home loan NPA ratio at 1.27%, against its overall bad loans at 9.97%.
BoB Puts 275 Properties On the Block (ET 08.09.17)
Bank of Baroda has put 275 commercial and residential properties across India on the block in a fresh attempt to clean up its books. The total reserve price for these properties is more than 400 Cr and the last date for submission is September 25. The online bids for these properties will be done between 1 pm and 3 pm on September 26, the notice said. These properties are residential, commercial and agricultural land and premises that the bank has likely taken as collateral. The final sale price of these properties is likely to be much higher than the reserve price. Bank of Baroda has been struggling with high non-per forming assets just like its other public sector peers. In the quarter to June, the bank's net profit halved due to higher provisioning for bad loans. The bank's gross non-performing assets, rose to 46,172.77 Cr as on June 30, or 11.40% of the total advances, up from 42,991.68 Cr, or 11.15% of advances as on end-June 2016. Alpesh Mehta, deputy head of research at Motitlal Oswal Securities, said sale of collateral was a routine thing for banks. “All banks do it periodically. These are mostly small loans taken by individuals and enterprises and the recovery process is simpler,“ Mehta said.
Less Pvt Role, Post Offices & Banks to be Hub of Aadhaar (ET 08.09.17)
The government is planning to limit the role of private agencies in Aadhaar enrolment and will focus on setting up permanent centres owned by the government and banks to facilitate registrations and updates as the country nears 100% Aadhaar saturation levels. The Unique Identification Authority of India (UIDAI) has said this in a presentation to banks recently while informing them of the need to become UIDAI registrars for enrolling their customers under Aadhaar, and stressing on its intention of restricting the role of private registrars. The government is banking on 24,000 plus post offices and 12,000 bank branches to offer Aadhaar services to citizens by March next year. This is also the deadline fixed by the government to achieve 100% Aadhaar target which is at 87% now. UIDAI has now started enrolling people for Aadhaar in the two states in which it had not been allowed in so far Assam and Meghalaya. Nearly 117 cr out of 132 cr people in India already have Aadhaar card. UIDAI is planning Aadhaar enrolment in all nodal schools twice a year as children at 5 years and 15 years need updates to their Aadhaar biometric details. “A structure will be required whereby people need to come to update their Aadhaar details for change of address, etc. and for fresh enrolments of new-born children. A government-backed structure is more apt for this...we are not discouraging private operators and government representatives will oversee them but we feel people will veer more towards the former,“ a senior government official said. A big criticism of Aadhaar project has been its dependence on private registrars for enrolment. Also, 110 cr bank accounts need to be linked to Aadhaar by December 31 nearly 70 cr accounts have already been seeded with Aadhaar but it is suspected that many people may not have an Aadhaar or their details may not be updated in their existing Aadhaar data and may not match with the details in bank records. UIDAI has asked nearly 42 banks to offer these Aadhaar enrolment facilities at nearly 14,000 out of their existing branches. SBI to offer it at 3,149 branches, Punjab National Bank at 939 branches, ICICI Bank at 485, HDFC Bank at 477 and Bank of India at 700 branches.
 |
Current account deficit may widen to 3% in April-June: Nomura (FE 08.09.17)
The country’s current account deficit is likely to widen to 3% in the second quarter of 2017 due to sharp deterioration in trade deficit, says a report. In the quarter ended March or first quarter of 2017, current account deficit widened to USD 3.4 billion, or 0.6% of gross domestic product (GDP). “We estimate that the current account deficit widened to a four-year high of 3% of GDP in the second quarter from a low of 0.6% in first quarter of 2017,” Nomura said in a report here today. The widening in current account deficit will be likely on account of a sharp deterioration in the trade deficit which according to monthly customs data widened to 6.9% of GDP in the quarter ended June from 4.5% in the quarter ended March. The report said despite the wider current account deficit, financing is not a concern. It estimates that net capital inflows stood at 4-4.5% of GDP in the period, led by portfolio equity and FDI inflows, resulting in a positive (1-1.5% of GDP) balance of payments surplus. The report said over the last two fiscal years, low commodity prices has driven the current account deficit to narrow to around 1% of GDP. With commodity prices marginally higher and a cyclical recovery expected in coming quarters, the report expects the current account deficit to widen to a steady state of around 1.5-2% of GDP. “But we see this as a sustainable level given high real rates and ongoing economic reforms, which should continue to attract FDI inflows,” the Japanese brokerage said.
Post note ban, 21,000 people disclosed Rs 4,900 cr black money under PMGKY (BL, BS, FE, ET 08.09.17)
Black money worth Rs 4,900 Cr was disclosed by 21,000 people under the Pradhan Mantri Garib Kalyan Yojna (PMGKY), the stash money declaration window announced by the government post demonetisation, an official said. The Income Tax Department, a top government official said, has collected a tax of Rs 2,451 Cr till now from these declarations. "21,000 people disclosed Rs 4,900 Cr of black money under the PMGKY scheme that closed on March 31 this year. These are now the final figures," the official said, adding that the I-T department is now following up the legal processes with the declarants in few cases. The scheme was launched in December last year by the government to enable people with black money to come clean by paying tax and penalty of 50%. It closed on March 31 this year. The scheme was announced after Prime Minister Narendra Modi declared the demonetisation of two high-value currency notes of Rs 1,000 and Rs 500 on November 8 last year. Revenue Secretary Hasmukh Adhia, after the closure of the PMGKY window, had said that the response to the scheme has "not been so good."
Focus on infra, power, exports to boost growth: Raghuram Rajan to govt. (BS 08.09.17)
“Let us focus on things we have control over. Let us ensure that the infrastructure we have built actually gets completed. That is a lever that the government can push harder. Can we solve impediments like land acquisition, given the political capital this government has?” Rajan said at the launch of his new book I Do What I Do in New Delhi. The former RBI governor was asked about the three things he would advise the finance minister to focus on for higher growth. “The second area is power,” he said. “In a country supposed to have surplus generation capacity, why do we have large areas without 24/7 power? We also have generation companies which cannot sell that power. That is because we have highly indebted distribution companies whose books are still unhealthy. “The third is exports. Exports from Asia are picking up. Why cannot we build that up? Can we start building the required logistics chain and infrastructure? Can we boost export promotion? After all, that was what Make in India was about.” On if there was more he could have done to oppose demonetisation, announced on November 8, as he was the central banker till September, he said the RBI’s powers were ambiguous on such issues. “Is it an issue on which the RBI can say no, and say over my dead body? The answer to that is quite ambiguous. Given what happened in the 1978 demonetisation, the government can get an ordinance. The legal sense we got was that the RBI is not needed for such an action.”
No comments:
Post a Comment