Thesynergyonline Banking Bureau

Mr Nandan Nilekani, Chairman UIDAI and Mr K R Kamath, Chairman, PNB at the MoU signing ceremony of UIDAI with PNB. Mr Ashok Pal Singh, Deputy Director General, UIDAI and Mri MV Tanksale, ED, PNB are also seen.

NEW DELHI, JULY 30 :
PUNJAB National Bank (PNB), today signed memorandum of understanding (MoU) with Unique Identification Authority of India (UIDAI) here to act as Registrar for 'AADHAAR' project. The MoU was signed in the presence of Chairman of the UIDAI, Mr Nandan Nilekani and Chairman and Managing Director of PNB, Mr KR Kamath.

According the MoU , PNB being the sixth bank to have entered into such MoU, shall provide AADHAAR (UID No.) to its existing 58 million customers as well as future customers by collecting biometric and demographic details as per UID norms.

The bank has network of banking outlets with over 5000 branches and 3715 ATMs and has a strong presence of more than 3000 rural and semi urban branches. The bank has a business of Rs 4520 billion at end June 2010 with a deposit base of Rs 2550 billion and a credit portfolio of Rs 1970 billion.

The bank opened 57 lakh No Frill accounts under financial inclusion which are being serviced by its nearly 3000 Rural/Semi urban branches. It has plans to open another 130 rural branches in the current financial year. The bank is implementing 39 ICT based projects in 15 States. PNB has plans to cover 5,000 villages in next 2 years and provide services to 10 million customers through ICT model.

The UID is developing the architecture of technical standards and ecosystem that will facilitate collection of demographic and biometric attributes by various agencies it has empanelled to support AADHAAR, based on which the UID number will be allotted to each citizen. These UID numbers then shall be dovetailed into PNB's present and future customer base so as to provide the facility of 'Anytime Anywhere Anyhow' banking services.

The bank will use this platform not only to cover rural populace which has hitherto been deprived of financial services but also to distribute benefits under the Social Security Scheme and provide credit facilities as per PNB's motto "Banking for the Unbanked".

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NEW DELHI, JULY 31 :
PUNJAB National Bank (PNB) has increased in its term deposit rates up to 75 basis points for various maturities effective from August 1, 2010. The increased rates are applicable for deposits upto Rs 10 crore.

The bank is now offering highest interest rate at 7.50 percent per annum for deposits of 5 year and above. The step has been taken to compensate its depositors against the inflation impact. Besides this, the Bank has also implemented payment of interest in Savings deposits on Daily Product basis effective from Apri1st, 2010.

The bank also increased its BPLR to 11.75 percent from . August 1, 2010 to offset the impact of above changes, while retaining its base rate intact.
The bank has been offering the most competitive BPLR in the industry @ 11 percent since May 1, 2009. Even at 11.75 percent, the bank would continue to offer one of the lowest benchmark prime lending rate (BPLR) in the industry.

Recently, the bank implemented the Base Rate System with effect from July 1, 2010. The current increase in BPLR would not adversely impact the customer interest as the new customers will come under Base Rate regime. The existing borrowers also have an option of switching over to the Base Rate whenever they so desire. Hence the impact of increased BPLR on the borrowers is expected to be minimal .

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MUMBAI, JULY 31 :
THE Profit after tax of the ICICI Bank iciincreased 17 percent to 1,026 crore (US$ 221 million) for the quarter ended June 30, 2010 (Q1-2011) from ` 878 crore (US$ 189 million) for the quarter ended June 30, 2009 (Q1-2010). 1,026 crore (US$ 221 million) for the quarter ended June 30, 2010 (Q1-2011) from ` 878 crore (US$ 189 million) for the quarter ended June 30, 2009 (Q1-2010).

ICICI Bank continued to invest in expansion of its branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products. The branch network of the Bank has increased to 2,016 branches at June 30, 2010, the largest branch network among private sector banks in the country.

Current and savings account (CASA) deposits of the bank increased 32 percent to 84,618 crore (US$ 18.2 billion) as on June 30, 2010 from ` 63,977 crore (US$ 13.8 billion) at on 30, 2009 and the CASA ratio increased to 42.1 percent at June 30, 2010 from 30.4 percent as on June 30, 2009.

The bank's net non-performing asset ratio decreased to 1.62 percent as on June 30, 2010 from 2.19 percent as on June 30, 2009 . Provisioning coverage ratio increased to 64.8 percent on June 30, 2010 from 51.1 percent on June 30, 2009

Fee income of the bank increased 7 percent to 1,413 crore (US$ 304 million) in Q1- 2011 from 1,319 crore (US$ 284 million) in Q1-2010. Operating expenses (including direct marketing agency expenses)
decreased 2 percent to 1,461 crore (US$ 315 million) in Q1-2011 from 1,494 crore (US$ 322 million) in Q1-2010. o Provisions decreased 40 percent to 798 crore (US$ 172 million) in Q1-2011 from 1,324 crore (US$ 285 million) in Q1-2010.

Total deposits of the bank were 200,913 crore (US$ 43.3 billion) as on June 30, 2010, as compared to 202,017 crore (US$ 43.5 billion) as on March 31, 2010. The loan book of the Bank increased to 184,378 crore (US$ 39.7 billion) as on June 30, 2010 from 181,206 crore (US$ 39.0 billion) as on March 31, 2010.

The total assets of the bank as on June 30, 2010 were 363,997 crore (US$ 78.4 billion). The bank's capital adequacy at June 30, 2010 according to Reserve Bank of India's guidelines on Basel II norms was 20.2 percent and Tier-1 capital adequacy was 14.0 percent , above RBI's requirement of total capital adequacy of 9.0 per and Tier-1 capital adequacy of 6.0 percent .

Net non-performing assets of the bank ecreased by 25 percent to 3,514 crore (US$ 757 million) at June 30, 2010 from 4,667 crore (US$ 1,005 million) as on June 30, 2009. The bank's net non-performing asset ratio decreased to 1.62 percent as on June 30, 2010 from 2.19 percent as on June 30, 2009.

The bank's provisioning coverage ratio as on June 30, 2010 was 64.8 percent compared to 51.1 percent as on June 30, 2009. ICICI Life's new business annualised premium equivalent (APE) increased by 90 percent to 1,182 crore (US$ 254 million) in Q1-2011. (editor@thesynergyonline.com) 

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Mr T Y Prabhu (second from left) Chairman and Managing Director , Oriental Bank of Commerce, announcing the Q1 Financial Results in New Delhi, Also seen are (from left to right) E D Mr S C Sinha, E D Mr H Rathnakara Hegde and CFO Mr R L Aggarwal.

NEW DELHI, JULY 30 :
THE net profit of Oriental Bank of Commerce (OBC) increased by Rs.105.60 crore to Rs. 363.01 crore in the first quarter of 2010-11 ended June 30, ,2010 from Rs.257.41 crore in the corresponding quarter ended June 30, 2009, recording a growth of 41.02 percent y-o- y.

The operating profit of the bank for Q1FY'11 increased by Rs. 305.40 crore to Rs. 822.31 crore as on June 30, 2010 from Rs.516.91 crore as on June 30 , 2009, recording a growth of 59.08 percent y-o-y .

The bank's Net Interest Income (NII) for Q1 reaches Rs. 1057.24 crore , recording a y-o-y growth of 118.36 percent. Net Interest Margin (NIM) of the bank for Q1 increased to 3.34 percent as against 1.83 percent as on June 30, 2009.

The total business of the bank stood at Rs.2,09,156 crore as on June 30 , 2010, showing an increase of Rs. 34,895 crore from Rs.1,74,261 crore as on June 30,, 2009, recording a y-o-y growth of 20.02 percent.

Total deposits of the bank grew by 19.83 percent y-o-y to Rs.1,23,057 crore as on June 30, 2010 from Rs. 1,02,695 crore as on June 30 , 2009. The CASA deposits of the bank grew by 28.82 percent y-o -y.

Total Advances of the bank showed a growth of 20.31 percent y-o-y to Rs. 86,098 crore as on June 30 , 2010 as against Rs. 71,566 crore as on June 30, 2009. The Credit Deposit Ratio stood at 70.16 percent as on June 30, 2010 . Bank's priorityb sector advances grew by 22.94 percent y-o-y out of which Direct Agriculture grew by 43.97 percent y-o-y . Number of of SME accounts increased from 56,200 to 1,59,807 and bank's fund-based exposure from Rs.7080.24 crore to Rs.12,365.19 crore , registering a growth of Rs.5284.95 crore and an increase of 74.6 percent y-o-y .

The bank's gross NPAs as percentage to total advances stood at 1.74 percent. Net NPAs of the bank as percentage to total advances stood at 0.72 percent. Cash recoveries aggregating Rs. 69.95 crore were effected in the Q1 of Financial Year 2010-11. The NPA provision coverage stood at 80.39 percent as on June 30, 2010 as against the minimum prescribed level of 70 percent.

The CRAR of bank stood at 12.44 percent as on June 30, 2010. Return on Equity (RoE) stood at 19.97 percent as on June 30, , 2010 as against 15.85 percent as on June 30, 2009. Return on Assets (RoA) of the bank increased up to 1.03 percent as on June 30 , 2010 from 0.89 percent as on June 30, 2009. The earnings per share (EPS) of the bank stood at Rs.14.50 as on June 30, , 2010 as against Rs.10.27 as on June 30, 2009. Book Value of share increased to Rs.303.58 from Rs. 264.38 in June 2009. (editor@thesynergyonline.com) 

Mrs Sushma Bali, General Manager, PNB receiving 'CSR Excellence Award - 2010' from Mr R. Bandyopadhyay, Secretary, Ministry of Corporate Affairs at 2nd International CSR Conference organized by ASSOCHAM in New Delhi..

LAKASHMI VILAS BANK REVISES INTEREST RATES ON DOMESITC TERM DEPOSITS

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NEW DELHI, JULY 28 :
LAKSHMI Vilas Bank has raised the interest rates on domestic term deposits from 181 days onwards to up to 2 years with effect from the August 2, 2010.

The term deposit rate for 181-270 days has been raised by 50 basis points to 6.25 percent from 5.75 percent currently.

For deposits of 271-364 days the rate has been raised to 6.50 percent from 6.25 percent.
" For the period ranging from 1 year to less than 2 years the rate has been raised from 7.25 percent to 7.50 percent.

For the senior citizen additional interest rate of 0.75 percent is applicable for the maturity period of 1 year and above. (editor@thesynergyonline.com) 

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NEW DELHI, JULY 28 :
UNITED Stock Exchange of India (USE) said that ICICI Bank has joined the USE shareholder base by picking up a 1.33 percent stake in the exchange. This move by India’s largest private sector bank further strengthens the bank shareholder base of USE, which is all set to launch operations in currency derivatives segment.

“We have an illustrious list of shareholders comprising of all 21 Public Sector Banks, Public Sector Units, leading Private Sector Banks and corporate institutions like the Bombay Stock Exchange. With ICICI Bank becoming the 26th Bank to join us, we now have the support of almost the entire Indian Banking fraternity. This association will allow us to reach new customers in both institutional and retail segments thereby expanding currency trading in this country ", said Mr. T.S. Narayanasami CEO and MD, United Stock Exchange.

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NEW DELHI, JULY 27 :
YES Bank, India’s private sector bank, today formally inaugurated its Delhi and National Capital Region operations of 70 branches (including 30 soon to be commissioned ) to further focus on the growing business and financial opportunities in the region.

The inauguration by the Chief Minister, Government of NCT of Delhi, Mrs Sheila Dikshit from the flagship New Delhi branch at South Extension, also known as the Yes Bank Global innovation Centre witnessed the presence of business leaders and industry experts. The bank has recently announced its plans to launch 100 more branches in India within the next one year to reach 250 branches nationally in 26 states.

The bank aims at strengthening the financial infrastructure in the highly important National Capital Region by establishing an extensive and robust framework of state-of-the-art branches providing comprehensive financial solutions, specifically catering to Large and Mid-Corporate, Central and State Government entities, MNCs, SMEs, MSMEs and Individual customers in this high-potential region. (editor@thesynergyonline.com) 

The bank also aims at transforming branches from mere transaction outlets to ‘Service Oriented Financial Centers’, thus shifting the focus from providing vanilla transactions to value added services.

On bank's future plans, Rana Kapoor, Founder/Managing Director and CEO, Yes Bank, said, “With over 25 percent of the bank branches NCR will be a significant contributor to the bank’s overall growth. This incremental branch expansion up to 100 branches by 2012 in the NCR region is a significant organizational imperative for the bank’s next phase of growth Version 2.0 that will further propel retail/SME banking initiatives."

" The bank is steadily entering into the retail banking segments, by offering a wide suite of competitive products including secured/unsecured business loans, working capital finance, trade and CMS and complementary products including CV finance, secured personal loans, amongst others gradually, while augmenting the pan-India branch presence to 250 by June 2011, " he added. (editor@thesynergyonline.com) 

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Mr V K Khanna, GM, PNB, Delhi inaugurating 'PNB Computer Centre' at Adharshila Welfafre Centre , Kalkaji (JJ Slums) in New Delhi.  Also present were Ms. Neena Jolly and Ms. Geeta Arora, co-founders of Adharshila.

NEW DELHI, JULY 26 :
UNJAB National Bank (PNB) today opened ‘PNB Computer Centre’ at Adharshila Welfare Centre, Kalkaji (JJ Slums), in Capital which was inaugurated by Mr V.K. Khanna, General Manager, Punjab National Bank , Delhi.  Also present were Ms. Neena Jolly and Ms. Geeta Arora, co-founders of Adharshila.

This centre has been sponsored by PNB, for children of underprivileged section of the society.  Its mission is to make children of deprived class self-reliant by imparting vocational training on computers.  With the help of this centre, children and youth of above 14 years of age will be able to enrol themselves for higher education and get better job prospects. 

The computer programme will be of six months duration having 05 sessions per week for hours each.  On completion of the course, all participants will get certificate issued by the Ministry of HRD, Govt. of India.  The centre is aimed to reach out to the children & adolescents from the slum community of Okhla, Garhi, Sanjay colony, Janta Jeewan Camp, Tilak Khand, Shyam Nagar, Indira Camp etc.

Adharshila is a young NGO whose mission is to build foundation at grassroots level with dedication and sincerity.  Punjab National Bank is sponsoring this ‘Computer Centre’ with its commitment to society under Corporate and Social Responsibilities. (editor@thesynergyonline.com) 

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Mr K R Kamath, CMD, PNB alongwith Mr M V Tanksale and Mr Nagesh Pydah, Executive Directors of the bank at a media conference in New Delhi.

NEW DELHI, JULY 22 :
THE state- owned Punjab National Bank (PNB) has reported net profit of Rs 1068 crore for the quarter ended June 2010 as against Rs 832 crore in the corresponding quarter of previous year, registering a y-o-y growth of 28.4 percent .

The bank's net interest income (NII) rose 40.67 percent to Rs 2,619 crore from Rs 1,861.8 crore (y-o-y), disclosed Mr K R Kamath , Chairman and & Managing Director, PNB at a media conference here today.

The operating profit of the bank for the first quarter of current financial year (Q1 FY11) stood at Rs 2098.17 crore as against Rs 1569.34 crore in Q1 FY10, recording a y-o-y growth of 33.7 percent. The bank's core operating profit excluding trading profit rose by 63.3 percent to Rs.1977.06 crore in Q1 FY11 from Rs 1210.86 caroler in Q1 FY10 , he said.

The net profit excluding treasury operations witnessed a jump of 127 percent to reach Rs 960.81 crore in Q1 FY11 from Rs 423.18 crore in Q1 FY10. The total business of the bank rose to Rs 4,52,205 crore as compared to Rs 3,76,939 crore in June 2009, showing a y-o-y growth of 20 percent, he added.

Mr Kamath further said that deposits of the bank at the end of June 2010 amounted to Rs 2,55,335 crore as compared to Rs 2,18,960 crore in June 2009, exhibiting a growth of 16.6 percent on y-o-y basis. CASA improved from Rs 83,948 crore in June'09 to Rs.1,04,385 crore in June'10 recording a growth of 24.3 percent.

CASA share improved to 40.9 percent in Q1 of FY 2010-11 from 38.3 percent a year ago. Advances of the bank at Rs 1, 96,870 crore as on June 30, 2010 grew by 24.6 percent on y-o-y basis as against Rs 1,57,979 crore as on June 30, 2009. The Credit Deposit Ratio improved to 77.1 percent as at June'10 from 72.1 percent in June'09, he informed.

The bank's total income increased by 11.1 percent to Rs 6863.38 crore, led by y-o-y growth of 16.4 percent in interest income. Net interest income rose by 45.4 percent on y-o-y basis to reach Rs 2618.57 crore in Q1 FY11.

The Core Non Interest Income (excluding trading profit) witnessed a y-o-y growth of 10.9 percent to touch Rs 674.15 crore.

Total expenses (excluding provisions) at Rs 4765.21 crore at the end of June 2010 have registered a growth of 3.4 percent only from a year ago.

While growth in Interest expenses was contained at a miniscule 0.8 percent, Non-Interest expenses growth was restricted to mere 10.2% during the first quarter of 2010-11 despite recent wage revision and provisions made for pension fund , he added.(editor@thesynergyonline.com) 

OBC PAYS 91 % DIVIDEND TO SHAREHOLDERS

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NEW DELHI, JULY 22 :
ORIENTAL Bank of Commerce (OBC) , a public sector banks declared a dividend of 91 percent for its shareholders for the financial year ended 2009-10 at in its 16th annual general meeting.

Mr T Y Prabhu, Chairman and Managing Director, Oriental Bank of Commerce , called on the Union Finance Minister Mr Pranab Mukherjee today and handed over a cheque for Rs 116.48 crore towards dividend on the equity owned by the Central Government.

Mr Prabhu was accompanied by Executive Directors, Mr H. Rathnakara Hegde and Mr S C Sinha. Mr. Prabhu also apprised him of the progress made by the bank under various parameters and also the initiatives taken for achieving its corporate goal. (editor@thesynergyonline.com) 

 
 LEVY INTEREST ON CRR TO FREE FINANCIAL SECTOR FROM RATIONING – DIRECTOR, NIPFP

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NEW DELHI, JULY 19 :
HUNDREDS of crores of rupees deposited with Reserve Bank of India (RBI) by commercial banks in form of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) ought to be rewarded with moderate interest rate regime in a bid to free financial sector from rationing and repression, says PM’s Advisory Council Member and Director, National Institute of Public Finance and Policy, Dr. M. Govinda Rao.

In addition, Dr. Rao has advocated for allowing Foreign Direct Investment (FDI) into retail and insurance sectors adding that entry of private sector into some areas that are hitherto considered a public sector preserve be permitted to broad base the existing FDI regime.

In a paper on performance of Indian Economy and Emerging Challenges, contributed by Dr. Rao for 10th JRD Memorial Lecture to be organized under aegis of ASSOCHAM next week, he has stressed the need for large expenditure outgo on subsidies, pay-revision and loan waiver and excise & service tax cuts to combat economic slowdown resulted in deficit burgeoning to 10.3 per cent in 2009-10.

Hindering development of credit market on account of contestable competition in financial system has not helped to develop robust and mature credit market, lamented Mr. Rao, pointing out that over-whelming proportion of credit portfolio of banking system is pre-empted through SLR, CRR and priority sector lending. In such a situation commercial banks cannot ensure low cost funds for private investments.

The bond market is still in it’s infancy and much of government bonds are brought by RBI and offloaded to commercial banks, only secondary trading takes place and that is extremely thin. There is need for considerable reforms to free financial sector from rationing and repression, says the paper.

Currently, CRR is interest-free and the return on SLR is very nominal, based on maturity and tenure of government securities. Cost of funds in banks is worked out after meeting above mandatory requirements and government policy towards lending. Banks after meeting the above stated requirements are left with almost 60 per cent funds to meet demand of industry and commerce for which they charge higher rate of interest to compensate for loss of income/interest on statutory requirements and concessional government funding schemes.

If RBI provides some interest on CRR and also offers reasonable rate of return on SLR, banks will be in a position to lend at further lower rate of interest to industry and commerce, indicates the paper.

Sustained economic growth at 9 per cent and more is possible only when stable and sustainable micro-economic requirement is maintained and stalled reform agenda is revived for opening up of retail and insurance to FDIs. Besides, the government should enact bankruptcy laws and permit entry of private sector into non-strategic areas without much of hitch as also do away with labor laws that are obsolete and need to be reviewed.

Mr. Rao has also stressed for ensuring a stable macroeconomic management in a globalizing environment which according to him is an extremely complex task. Surging capital inflows in emerging market economies like India can result in currency appreciation and create “Dutch Disease” type of situation.

The RBI, feels Mr. Rao has been sterilizing capital inflows to keep exchange rate at a competitive level though in recent months capital flow situations has actually reversed which is a temporary phenomenon. Sterilizing capital flows by RBI augments money supply and reduces flexibility in calibrating monetary policy, he added.   (editor@thesynergyonline.com) 

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NEW DELHI, JULY 17 :
IN a bid to make sure that borrowers are able to access funds with fair, equitable and effective delivery mechanism, the Associated Chambers of Commerce and Industry (ASSOCHAM) has urged the Reserve Bank of India (RBI) to further finetune base rate regime so that level playing field is also created for all stakeholders in money market.

In a statement, the ASSOCHAM president, Dr. Swati A. Piramal has pointed out, that base rate regime in it’s existing shape needs to encompass in it’s fold various issues and grey areas that confront interest rate regime.
In the present state, the base rate does not cover the fixed interest rate segment, presently under the benchmark prime-lending rate (BPLR) segment. It also does not cover as to how long existing BPLR system will continue, creating anomaly in existing as well as new borrowers. Therefore, there needs to be a sunset clause for the BPLR system.
 
It is well-known that banking industry has re-structured and re-habilitated a large number of viable units where concessional rates  or even the funding of over-dues have been considered at substantially low rates of interest as enshrined in respective re-habilitation policies of banks. The present base rate regime is totally silent and would hit this portfolio and borrowers perceptively.

The existing borrowers having availed loans at fixed rates need to be brought into base rates so that they do not suffer. The purpose of base rate has been to transmit monetary policy action swiftly and adequately. Currently, the base rates are proposed to be reset every quarter irrespective of time and tenure of monetary policy instances of RBI. There needs to be parity in timelines.

There should be similar timelines in addition to banks own policy for resetting the base rate. This will ensure monetary policy transmission without gap.

The present base rate also makes no mention of it’s applicability on non-banking financial companies (NBFCs), Regional Rural Banks (RRBs) and Co-operative Banks which continue to have different set of guidelines, heavily loaded against the borrowers.

The government is the biggest borrower in the market and is often responsible for interest rate swings. The base rate does not appear to cover the government borrowings in the sense that these borrowings are related to the prevailing coupon rates for various government securities or various maturities. The role played by the government while making huge amount of borrowings influences interest rates and base rate regime clarity is needed in this regard.

The present arrangement of banks for funding against letter of credit (LCs) and bill discount which invariably is at substantially reduced rate due to guaranteed payments will be severely affected and therefore, needs to be addressed on priority.

The ASSOCHAM has reiterated that the base rate has to be broad based and widened to address all these issues comprehensively to defeat any distortions in the money market, said ASSOCHAM chief. (editor@thesynergyonline.com) 

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The Finance Minister, Mr Pranab Mukherjee, presenting the 'Best Public Sector Bank Award' to Mr K R. Kamath, CMD of Punjab National Bank.

NEW DELHI, JULY 15 :
PUNJAB National Bank (PNB) has been adjudged India’s Best Public Sector Bank for the year 2009-10 amongst 27 nationalized banks on the basis of study conducted by the Financial Express, the leading business daily along with Ernst & Young.

The award was received by Mr K R Kamath, CMD of PNB, on behalf of the bank from the Finance Minister, Mr Pranab Mukherjee. Leaders of India’s financial sector including heads of banks, industry stalwarts and others were also present on the occasion.

According to the study, Punjab National Bank has been ranked No 1 in terms of strength and soundness, profitability and credit quality which earned it the Best Bank slot. The asset size of Rs 2,46,91,862 lakh and networth of Rs 14,65,362 lakh helped the bank in attaining the top slot in terms of 'strength and soundness'.

The bank outperformed others in 'credit quality' by registering the decline of Rs 55,183 lakh in gross NPAs. The bank was placed ahead of others in 'profitability' parameter due to its reasonably good profitability ratios like Return on Assets, Return on Networth and Cost to Income Ratio. (editor@thesynergyonline.com) 

CIBIL DETECT FOR NATIONWIDE DATA BASE OF SUSPECT ACTIVITIES

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NEW DELHI, JULY 08 :
TO address the need for better collaboration and the sharing of information  on fraud and high-risk activities throughout the banking and financial industry, Credit Information Bureau (India) and TransUnion have launched CIBIL Detect - a nationwide database of reported fraudulent and suspect activities.
                                                                                                             
CIBIL Detect is the first, centralized repository in India on confirmed frauds, cases of misuse or attempted misuse of data and suspected or high-risk cases that are under investigation in banks and financial institutions. The solution is actively addressing an industry concern at a time when lending institutions are facing increases in write-offs and bad debt, many of which can be attributed to fraudulent activities.

In addition to reported fraudulent and suspicious activities, CIBIL Detect also contains valuable information on high-risk vendors and agents which credit grantors can share and access. This repository will be a comprehensive, reliable, up-to-date, centralized point of reference on the high-risk incidents in the credit sector for India. It will also keep a track of the modus operandi of individuals who have committed banking-related frauds in the past.

Mr. Arun Thukral, Managing Director, CIBIL said, “Banks and financial institutions have been reporting rising cases of frauds and spurious incidences. Realizing the urgent requirement of an industrywide system for fraud control, the Indian Banks’ Association (IBA) entrusted CIBIL and TransUnion to develop an exhaustive repository of information on spurious activities that will not only capture the methods used to commit fraud, but can also indicate whether the person or organization was a victim of fraud or was involved in it.”

While delivering the keynote address at the conference, Mr. K Unnikrishnan, Deputy Chief Executive, Indian Banks’ Association (IBA) said, “Increasing number of frauds in banks in recent years is a matter of great concern. Anywhere, anytime banking facilities make it easier for fraudsters to remain faceless and siphon funds out of the system much faster than ever."

"As fraudsters move from one bank to another to avoid detection, we had thought of  creating a data base on frauds to serve as due diligence tool for banks before establishing business relationship with new customers. As more and more banks start reporting fraud data to CIBIL, the data base would become larger and more useful to the banking system. I am confident this IBA backed initiative from CIBIL will serve public interest in a meaningful manner.”   

CIBIL Detect has been designed to help at both an organizational as well as an industry level. At an organizational level, it will act as a comprehensive nationwide repository that can be used to check if the business prospect has been involved in any spurious activity. On an industry level, CIBIL Detect will fuel the regulatory body’s efforts towards creating a healthy and sound credit culture by effectively identifying, recording and sharing information on high-risk activities.

“CIBIL Detect is bringing speed and confidence to risk management decisions taken by lending institutions and improving their overall portfolio quality. It will also pave the way for economic development by inculcating greater financial discipline, provide better control on high-risk activities and help disciplined and deserving consumers gain access to the credit they deserve,” added Mr. Thukral. (editor@thesynergyonline.com) 

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NEW DELHI, JUNE 29 :
WITH an approval of the board of directors Punjab National Bank (PNB) has decided to fix the base rate at 8.00 percent The base rate has been arrived at by taking the average cost of deposits of the last quarter as the benchmark.

The Card Rates under lending schemes are arrived at by adding appropriate spread determined by credit risk premium, scheme specific operating cost and tenor premium, which is a markup to the base rate.

The base rate of 8.00 percent will be the minimum lending rate. The card rates for the lending schemes of the bank are available on the website of the bank. (pnbindia.com)

As advised by the Reserve Bank of India (RBI) ,base rate system is to be implemented from . July 01,.2010. The base rate system would be applicable for all new loans and also existing loans that come up for renewal.

The existing loan based on the BPLR system may continue till maturity of existing contract. However existing borrowers have the option to switch over to base rate system before the renewal /expiry of the existing contract without any charges.

The methodology and benchmark used for calculation of base rate are based on Reserve Bank of India(RBI) guidelines and as permitted by RBI these can be changed any time during the initial six month period i.e. end-December 2010. The information on base rate will also be exhibited in all bank's branches for the convenience of customers. (editor@thesynergyonline.com) 

HDFC MD NOPMINAED AS 'ASIAN CAPTAIN OF FINANCE'

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NEW DELHI, JUNE 29 :
ADITYA Puri, Managing Director of HDFC Bank, has been nominated an 'Asian Captain of Finance' in a poll among analysts conducted by the Institutional Investor Magazine. There are two Indians on the list and Mr Puri is the only Indian banker. Reliance Capital's CEO Sam Ghosh is the other Indian. Mr. Puri was among the 7 business leaders who analysts rated highest.

Along with Mr Puri three other bankers from Asia voted as Asian Captains of Finance are Ma Weihua of the China Merchants Bank Co. (Greater China), Ra Eung Chang of Shinhan Financial Group (South Korea) and Agus Martawardajo of Bank Mandiri (Southeast Asia).

The poll conducted by the magazine asked buy and sell side analysts across Asia to identify the best financial executives in 5 sectors that include Banks, Brokers, Asset Managers & Exchanges, Insurance - Life and NonLife, and REITs (Real Estate Investment Trusts).

"There have been stunning changes in the fortunes of the financial industry in recent years. Increasingly Asian firms are innovators and leaders in their own right, not merely adopters of Western Practices and Products," the magazine said.

For the quarter ended March 31, 2010, the bank earned total income of Rs. 4,956.7 crore. The bank's total balance sheet size increased by 21.4 percent from Rs.183,271 crore as on March 31, 2009 to Rs. 222,459 crore as on March 31, 2010. The bank's net profit for year ended March 31, 20. (editor@thesynergyonline.com) 

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Mr M Damodaran, Chairman of the Committee on Customer Service in Banks, lighting lamp at Silver Jubilee function of Customer Service Centre, Delhi. Also seen are Mr KR Kamath, CMD, PNB , Mr T Y Prabhu, CMD, OBC and Mr G S Vedi, CMD, PSB.

NEW DELHI, JUNE 26 :
THE bank should not confine themselves to the symptomatic issues but concentrate on the systemic issues to bring out lasting improvement in customer service , said Mr M. Damodaran, Chairman of the committee set up by Reserve Bank of India (RBI) on customer service in his keynote address at the Silver Jubilee function of Customer Service Centre, Delhi coinciding with its 300th monthly meeting. Mr Damodaran was chief guest at the function.

He further exhorted the banks that KYC implementation should be made a more meaningful and purposeful exercise rather than a mechanical compliance.

He stressed that Citizens' Charter in the Bank should be followed in letter and spirit. The attitudinal aspect and soft skills should be given due weightage while making recruitment in the banks.

He lauded the efforts made by this forum for quick redressal of customer complaints and improvement in customer service in banks.

He also brought to the attention of bankers the need to focus upon the basic details of banking ranging from layout of the branch to the core services that are being rendered, along with the new challenges brought about by technology.

Mr K.R. Kamath, CMD, Punjab National Bank informed that Customer Service Centre in Delhi was set up on March 27 , 1985 by the Ministry of Finance, Government of India , under the aegis of PNB with all public sector banks and J&K Bank as its members.

The purpose of this centre is redressal of grievances pointed out by customers of member banks within a set timeframe. Review meetings on the functioning of this centre are conducted on monthly basis wherein representatives of RBI and banking ombudsman, Delhi are also participate in discussions on issues relating to improvement in customer service and to take stock of pending complaints directly lodged with RBI and banking ombudsman. Incognito visits of branches of member banks are also taking place , he further informed .

Representatives from RBI/banking ombudsman and GMs/DGMs/AGMs and nodal officers from member banks also deliberated in the Open House session on customer service.

The discussions centred around paradigm shift in the range of services rendered by the banks and their complexities which bring forth new set of challenges in the matter of efficient customer service. Also the technological advancements brought about in the banks' functioning in the past 25 years add a new dimension to the customer service.

Mr G.S.Vedi , CMD, Punjab & Sind Bank and Mr T Y Prabhu, CMD, Oriental Bank of Commerce shared the dias and made valuable contribution for better customer service and to further activate the complaint redressal mechanism system.
Mr T Y Prabhu, CMD, Oriental Bank of Commerce, proposed a vote of thanks. (editor@thesynergyonline.com)

Thesynergyonline Banking Bureau

NEW DELHI, JUNE 24 :
PUNJAB National Bank (PNB) has signed a memorandum of agreement (MoA) with Principal Financial Group of Mauritius and Vijaya Bank for restructuring of their existing joint ventures.

According to the MOA, PNB and Vijaya Bank will continue to support Principal in the Asset Management Company for a period of three years .

PNB and Vijaya Bank shall sell their 30 percent and 5 percent stake respectively in distribution JV company to Principal.

PNB will buy out Principal and Berger Paints stake of 26 percent and 25 peprcent respectively in insurance broking company.

PNB will buy out Principal and U K Paints stake of 26 percent and 32 percent respectively in Principal PNB Life Insurance Company . PNB and Vijaya Bank will decide future course of action in the insurance companies after getting regulatory approvals and finalisation of the deal.(editor@thesynergyonline.com) 

Mr K R Kamath CMD, PNB receiving the Best Bank Award in Hyderabad for Customer Relationship Management initiatives for the Year 2009 from RBI Governor, Mr D Subbarao. Dr K C Chakrabarty, Dy Governor RBI and Mr Ajay Misra , GM PNB are also seen.

Thesynergyonline Banking Bureau

Mr T. Y. Prabhu (second from left), CMD, OBC, announcing 91 percent dividend for shareholders for the FY 2009-10 in New Delh. Also seen alongside are E D Mr H Rathnakara Hegde (right) and ED Mr S C Sinha (left ).

NEW DELHI, JUNE 23:
ORIENTAL Bank of Commerce (OBC) , has declared a diividend of 91 percent for its shareholders for the financial year ended 2009-10 at its  16th annual general meeting here today.

Mr T Y Prabhu, Chairman and Managing Director of OBC , apprised the shareholders of the growth of the bank under various parameters during the financial year 2009-10. The total business of the bank grew by 22.10 percent to reach Rs.2,04,442 crore.

Bank's deposits grew by 22.25 percent to reach Rs.1,20,258 crore and advances grew by 21.89 percent to reach Rs.84,184 crore. The net profit of the bank increased to Rs.1134.68 crore from a level of Rs.905.42 crore , showing a growth of 25.32 percent. Operating profit of the bank grew by 43.71 percent to Rs.2421.50 crore from a level of Rs.1684.98 crore at the end of preceding year.

Gross NPA stood at a level  1.74 percent of total advances while  net NPA stood at 0.87 percent of total advances. The CRAR of the bank stood at 12.54 percent. The earning per share (EPS) increased to Rs.45.29 from Rs.36.14. The bank has opened 93 branches during the year 2009-10 taking the branch network to 1508 branches as on March 31, 2010. (editor@thesynergyonline.com) 

RABOBANK REDUCES STAKE IN YES BANK TO 4.9%

Thesynergyonline Banking Bureau

NEW DELHI, JUNE 22 :
THE Netherland-based Rabobank placed 37.3million shares of Yes Bank today to a diversified group of institutional investors (both domestic and foreign), reducing its stake in Yes Bank from around 15.9 percent to 4.9 percent. The bank has sold around 11 per cent of its stake in private sector lender Yes Bank in a deal worth about Rs 1,000 crore.

Rabobank was one of the initial investors in Yes Bank, which has been a major performing new private sector bank in India. Rabobank, as a part of its overall business plan for India, is obliged under the regulations to reduce its shareholding in Yes Bank pending approval of its application for a full banking licence in India.

Rabobank has been present in India for over 12 years and currently has a 100 percent- owned non-bank finance subsidiary (Rabo India Finance) and a minority stake in Yes Bank.

The bank is keen to participate and contribute to India's further growth in these and other sustainable sectors including renewable energy and clean technology. To this end it is keen to establish its own banking presence in India and has sought the necessary regulatory approvals.

Sipko Schat, Member of the Executive Board of Rabobank said: "We are a strong supporter of Yes Bank and its entrepreneurial management team, who have successfully established the bank as one of India's most successful and fastest-growing full-service providers. We remain confident in the future prospects of Yes Bank and are retaining a 4.9 percent stake in the bank." In line with the reduction in their shareholding, Sipko Schat will step down from the board of Yes Bank. (editor@thesynergyonline.com)

PNB, ESCORTS SIGN AGREEMENT TO FINANCE TRACTOR DEALERS

Thesynergyonline Banking Bureau

Mr M V Tanksale, Executive Director of PNB and Mr O K Balraj, Group Chief Financial Officer of Escorts exchanging MoU documents after signing the same at a ceremony which was presided over by Mr K R Kamath, CMD,, PNB

NEW DELHI, JUNE 16 :
PUNJAB National Bank (PNB) and Escorts today signed a memorandum of understanding (MoU) for financing tractor dealers of Escorts under supply chain financing product of the bank .

The signing ceremony was presided over by Mr K R Kamath, Chairman and Managing Director , PNB and the MoU was signed by Mr M V Tanksale, Executive Director of PNB and Mr O K Balraj, Group Chief Financial Officer (CFO) of Escorts.

According to the agreement, PNB will provide working capital finance to Escorts dealers in India by way of hassle-free drawee bills discounting facility on attractive terms.

The agreement is expected to generate an additional revenue of Rs 200 crore under the supply chain product of the bank.

The agreement is also expected to bring more agriculture/small and medium enterprises(SMEs) in the bank's fold and facilitate expansion of bank's credit to these segments. (editor@thesynergyonline.com)