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India Banking Bits
Mar 04, 2011
In News Today — Banking Laws Amendment Bill gets cabinet law; One month
deposit rates hit 10%; Financial Inclusion key rider for new bank licenses; MFI
regulations may be in place by April; PNB will buy stake or plan tie-up for
insurance foray; ICICI expects 20% credit growth in FY12; Banks review norms for
fixing base rate.
Banking Laws Amendment Bill gets Cabinet nod — The government has
cleared the Banking Laws Amendment Bill that seeks to align the voting rights in
banks in proportion with the equity holding. The amendment will also give the
central bank powers to inspect books of financial conglomerates and vet mergers
and acquisitions in the banking sector. (Economic Times, Mar 04)
One-month deposit rates hit 10% — The scramble for cash to meet year-end
targets has made banks pay 10% for even 1month deposits. According to bankers,
the rates for such deposits may rise further, as certificates of deposit (CDs) worth
Rs 1trillion will come up for renewal this month. (Business Standard, Mar 04)
Financial inclusion key rider for bank license: Subbarao — Aspirants for new
bank licenses will need to show their commitment to financial inclusion, according
to RBI governor D. Subbarao. RBI has been contemplating whether to make it
mandatory for new entrants to have a rural presence or to leave it to the
competition in the market to force them to look for newer markets. (Mint, Mar 04)
MFI regulations may be in place by April — The Reserve Bank of India may
start implementing some of the proposals of the Malegam committee on
microfinance regulations, including a cap on lending rates, as early as April, said
governor Duvvuri Subbarao. (Economic Times, Mar 04)
PNB will buy stake or plan tie-up for insurance foray — Punjab National Bank
will buy equity stake and enter into a corporate agency tie-up with one of the 10
life insurers it has shortlisted. The firms are Aegon Religare Life, Aviva India, Bharti
AXA Life, Birla Sun Life, DLF Pramerica Life, Future Generali Life, HDFC Life, Max
New York Life, MetLife and Reliance Life. (Economic Times , Mar 04)
ICICI Bank expects over 20 pc credit growth in 2011-12 — Country's largest
private sector lender ICICI Bank today said it expects over 20% growth in loans in
the next fiscal against 18% in 2010-11, as they are seeing strong credit growth
which is universal across sectors. (Economic Times, Mar 04)
Banks review norms for fixing base rate — Eight months after the introduction
of base rate and switching from the bench mark prime lending rate (BPLR)
system, the banks are once again reviewing the methodologies for fixing the base
rate. Though the Reserve Bank of India had given time till December-end to
finalize the methodologies, the central bank had extended it by another six
m onths. (Financial Express, Mar 04)
Industry
RBI reminder to banks: increase deposit rates, cut lending rates
The Reserve Bank has prodded banks again to raise deposit rates to
encourage people to save more and put the Indian economy on sustained
double-digit growth and lower lending rates by cutting salaries, wages and
transactions costs. (Business Standard, Mar 04)
Computerization to help RBI better monitor NPAs: Dy guv
The Reserve Bank of India's deputy governor KC Chakrabarty said that once
the core banking solution (CBS) was complete the central bank would be in a
better position to monitor non-performing assets (NPA) of banks. RBI has
detected enough discrepancies in data in the bank branches," Chakrabarty
revealed. (Financial Express, Mar 04)
Concerns on MFI Bill choking the sector: Subbarao
The news of a comprehensive legislation on the micro finance sector has
brought some optimism back to the industry but the Reserve Bank of India
governor D Subbarao is keen to ensure that the new legislation does not affect
the growth prospects of the sector. (Financial Express, Mar 04)
Banks lose enthusiasm for MFI loans on Andhra Pradesh woes
Securitization volume has dropped to about Rs.10bn so far this fiscal compared
with Rs.42bn in the previous year as banks have become more averse to
buying microfinance loan portfolios, particularly from Andhra Pradesh,
according to Sa-dhan, an association of micro lending firms. (Mint, Mar 03)
NPCL rolls out Aadhar-enabled payment system
The National Payment Corporation has rolled out its Aadhar-enabled payment
system (AEPS) project to make banking easier for those at the bottom of the
pyramid by involving business correspondents. NPCL has partnered with three
banks for the project. The pilot project being run in districts of Jharkhand
(where the first unique identity authority, or UID numbers, have been provided)
in association with three banks — ICICI bank, Union bank of India and Bank of
India. (Economic Times, Mar 04)
Higher capital to help Nabard access financial market better
NABARD has received a boost from the proposals in the budget. The FM has
increased allocation to Rs100bn from Rs50bn for supporting crop loan
refinance to cooperatives and regional rural banks, and increasing Nabard’s
capital base. Besides, a dedicated fund of Rs 200bn has been set up in Nabard
for the creation of warehousing facilities. (Business Standard, Mar 04)
Funds Houses Queue up to Join ETF Frenzy with Gold Saving
Schemes
Close on the heels of Reliance MF and Kotak Asset Management, some retail
brokers are planning to launch feeder funds with exposure to gold exchange
traded funds. UTI MF, SBI MF and HDFC Mutual are also planning to launch
similar schemes. (Economic Times, Mar 04)
Banks / Financial Institutions
PFC may raise up to $1 bn in external debt
Power Finance Corp, or PFC, may raise up to $1 billion (around 4,500 crore) of
external commercial debt next fiscal, exceeding the limit of $500 million under
automatic route. This will be part of PFC's total borrowing target of 30,000 crore
in 2011-12. The company borrows funds at an average cost of 8.5%.
(Economic Times, Mar 04)
Birla Sun Life launches unit-linked Foresight Plan
Private insurer Birla Sun Life Insurance announced the launch of BSLI
Foresight Plan - a unit-linked plan. The company is positive about the
performance of this product and expects to collect about Rs 10bn premium
within the first year. (Economic Times, Mar 04)
Opinion
‘Letting Corp Houses to set up Banks is a recipe for disaster’:
Yashwant Sinha
There has always been a nexus between the industry and the banks. The
banking sector is already hit by so many scandals and we should not add to
them by letting the industry control banks, said Yashwant Sinha. (Economic
Times, Mar 04)
Stringent norms could limit CDS market growth
Stringent norms on Credit Default Swap (CDS) for corporate bonds, as
prescribed by the Reserve Bank of India (RBI), may limit development of the
market, bankers said. Other than some technical fine-tuning, the instrument
may also face the problem of regulatory overlap. (Business Standard, Mar 04)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Banking Bits
Mar 04, 2011
In News Today — Banking Laws Amendment Bill gets cabinet law; One month
deposit rates hit 10%; Financial Inclusion key rider for new bank licenses; MFI
regulations may be in place by April; PNB will buy stake or plan tie-up for
insurance foray; ICICI expects 20% credit growth in FY12; Banks review norms for
fixing base rate.
Banking Laws Amendment Bill gets Cabinet nod — The government has
cleared the Banking Laws Amendment Bill that seeks to align the voting rights in
banks in proportion with the equity holding. The amendment will also give the
central bank powers to inspect books of financial conglomerates and vet mergers
and acquisitions in the banking sector. (Economic Times, Mar 04)
One-month deposit rates hit 10% — The scramble for cash to meet year-end
targets has made banks pay 10% for even 1month deposits. According to bankers,
the rates for such deposits may rise further, as certificates of deposit (CDs) worth
Rs 1trillion will come up for renewal this month. (Business Standard, Mar 04)
Financial inclusion key rider for bank license: Subbarao — Aspirants for new
bank licenses will need to show their commitment to financial inclusion, according
to RBI governor D. Subbarao. RBI has been contemplating whether to make it
mandatory for new entrants to have a rural presence or to leave it to the
competition in the market to force them to look for newer markets. (Mint, Mar 04)
MFI regulations may be in place by April — The Reserve Bank of India may
start implementing some of the proposals of the Malegam committee on
microfinance regulations, including a cap on lending rates, as early as April, said
governor Duvvuri Subbarao. (Economic Times, Mar 04)
PNB will buy stake or plan tie-up for insurance foray — Punjab National Bank
will buy equity stake and enter into a corporate agency tie-up with one of the 10
life insurers it has shortlisted. The firms are Aegon Religare Life, Aviva India, Bharti
AXA Life, Birla Sun Life, DLF Pramerica Life, Future Generali Life, HDFC Life, Max
New York Life, MetLife and Reliance Life. (Economic Times , Mar 04)
ICICI Bank expects over 20 pc credit growth in 2011-12 — Country's largest
private sector lender ICICI Bank today said it expects over 20% growth in loans in
the next fiscal against 18% in 2010-11, as they are seeing strong credit growth
which is universal across sectors. (Economic Times, Mar 04)
Banks review norms for fixing base rate — Eight months after the introduction
of base rate and switching from the bench mark prime lending rate (BPLR)
system, the banks are once again reviewing the methodologies for fixing the base
rate. Though the Reserve Bank of India had given time till December-end to
finalize the methodologies, the central bank had extended it by another six
m onths. (Financial Express, Mar 04)
Industry
RBI reminder to banks: increase deposit rates, cut lending rates
The Reserve Bank has prodded banks again to raise deposit rates to
encourage people to save more and put the Indian economy on sustained
double-digit growth and lower lending rates by cutting salaries, wages and
transactions costs. (Business Standard, Mar 04)
Computerization to help RBI better monitor NPAs: Dy guv
The Reserve Bank of India's deputy governor KC Chakrabarty said that once
the core banking solution (CBS) was complete the central bank would be in a
better position to monitor non-performing assets (NPA) of banks. RBI has
detected enough discrepancies in data in the bank branches," Chakrabarty
revealed. (Financial Express, Mar 04)
Concerns on MFI Bill choking the sector: Subbarao
The news of a comprehensive legislation on the micro finance sector has
brought some optimism back to the industry but the Reserve Bank of India
governor D Subbarao is keen to ensure that the new legislation does not affect
the growth prospects of the sector. (Financial Express, Mar 04)
Banks lose enthusiasm for MFI loans on Andhra Pradesh woes
Securitization volume has dropped to about Rs.10bn so far this fiscal compared
with Rs.42bn in the previous year as banks have become more averse to
buying microfinance loan portfolios, particularly from Andhra Pradesh,
according to Sa-dhan, an association of micro lending firms. (Mint, Mar 03)
NPCL rolls out Aadhar-enabled payment system
The National Payment Corporation has rolled out its Aadhar-enabled payment
system (AEPS) project to make banking easier for those at the bottom of the
pyramid by involving business correspondents. NPCL has partnered with three
banks for the project. The pilot project being run in districts of Jharkhand
(where the first unique identity authority, or UID numbers, have been provided)
in association with three banks — ICICI bank, Union bank of India and Bank of
India. (Economic Times, Mar 04)
Higher capital to help Nabard access financial market better
NABARD has received a boost from the proposals in the budget. The FM has
increased allocation to Rs100bn from Rs50bn for supporting crop loan
refinance to cooperatives and regional rural banks, and increasing Nabard’s
capital base. Besides, a dedicated fund of Rs 200bn has been set up in Nabard
for the creation of warehousing facilities. (Business Standard, Mar 04)
Funds Houses Queue up to Join ETF Frenzy with Gold Saving
Schemes
Close on the heels of Reliance MF and Kotak Asset Management, some retail
brokers are planning to launch feeder funds with exposure to gold exchange
traded funds. UTI MF, SBI MF and HDFC Mutual are also planning to launch
similar schemes. (Economic Times, Mar 04)
Banks / Financial Institutions
PFC may raise up to $1 bn in external debt
Power Finance Corp, or PFC, may raise up to $1 billion (around 4,500 crore) of
external commercial debt next fiscal, exceeding the limit of $500 million under
automatic route. This will be part of PFC's total borrowing target of 30,000 crore
in 2011-12. The company borrows funds at an average cost of 8.5%.
(Economic Times, Mar 04)
Birla Sun Life launches unit-linked Foresight Plan
Private insurer Birla Sun Life Insurance announced the launch of BSLI
Foresight Plan - a unit-linked plan. The company is positive about the
performance of this product and expects to collect about Rs 10bn premium
within the first year. (Economic Times, Mar 04)
Opinion
‘Letting Corp Houses to set up Banks is a recipe for disaster’:
Yashwant Sinha
There has always been a nexus between the industry and the banks. The
banking sector is already hit by so many scandals and we should not add to
them by letting the industry control banks, said Yashwant Sinha. (Economic
Times, Mar 04)
Stringent norms could limit CDS market growth
Stringent norms on Credit Default Swap (CDS) for corporate bonds, as
prescribed by the Reserve Bank of India (RBI), may limit development of the
market, bankers said. Other than some technical fine-tuning, the instrument
may also face the problem of regulatory overlap. (Business Standard, Mar 04)
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