PRESS RELEASES

RBI  has announced reduction in interest rates by reducing the repo rate and reverse repo rates by 100 basis points each.  The repo rate is now 6.50% the lowest since JAN 2006  and the reverse repo rate drops from 6 to 5% , the lowest in 3 years.  Reliefs were also announced for housing finance companies , exporters , SMEs. ( source 081208)              

Bank advances have grown by 29.9 %

Bank advances have grown by 29.9 % on a year on year basis while bank deposits grew by 23.6 % on a y-o-y basis. Bulk of this growth has been in fixed deposits of maturities of more than 1 year. ( source BS 141208)

SBT has entered into a tie up

SBT has entered into a tie up with united india insurance co to provide personal accident insurance cover to its savings account holders. The insurancecover is of rs 5 lacs at a subsidised premium of rs 50 per annum per account holder. By jan 2009 the scheme is to be available at 715 branches across the country ( source bl 101208 )

RBI has cancelled the licences

RBI has cancelled the licences of two cooperative banks-Bhavnagar Mercantile Coop Bank Ltd and Siddhpur Commercial Coop Bank Ltd. They could not be revived even with the help of Gujarat government. ( source BL 121208)

Kotak Bank is looking

Kotak Bank is looking at launching a corporate credit card product by April 2009.( source BL 131208)

Interest rates in the banking sector

Interest rates in the banking sector are set to drop in the next 2-3 weeks. This would help the borrowers taking loans for home , auto and education . The rate cut is likely to steeper as per Mr K V Kamath of ICICI Bank. ( source BL 141208)

SBT has opened an extension counter

SBT has opened an extension counter with core banking facility a Sabarimala Temple. The bank has also provided an ATM to withdraw cash. ( source BL 021208)

State bank of travancore

State bank of travancore has activated an intrnet banking facility for online payment of donation to guruvayoor temple. (source bl 031208)

Public sector banks are sanctioning auto loans much faster than private banks at interest rates of 12.25percentinstead of 13 percent and going upto 18-19 percent. (bl 041208)

CIBIL has 162 members and record of 127 mn companies and individuals. It will soon offer fraud repository, data on personal loans and a mortgage repository that lenders can access while taking credit decisions. ( source BS 041208)

IBA

IBA to form a mechanism to identify borrowers enjoying credit facilities from more than one bank. The aim is to improve flow of information of borrowers among banks. (source BS 031208)

Intelligent Deposit ATMs

Intelligent Deposit ATMs have been developed by NCR Corporation who are having 60% market share. These would cost USD 35,000-40,000 more than the cost of an average ATM but useful for deposit of cash directly including checking of counterfeit notes and issuing of receipts. ( source BS 041208)

BANKS IN NEWS

Banks are planning to focus more on home loans below Rs 25 lakhs. Andhra bank is targeting home loans between Rs 10 and 15 lakhs with 0.75% reduction in interest rates. State Bank of Hyderabad is pushing home loans above Rs 20-25 lakhs.( source BL 211108)

Lakshmi Vilas Bank has effected upward revision in its deposit rates on 1to 2 years bucket to 11% for all except senior citizens who would get 0.5% more. Rate revision is effective 21-11-08.( source BL 211108)

SBI is organizing Lok Adalats to recover stressed retail loans not exceeding Rs 5 lakhs. These would be personal ,auto loans which are non performing as on 31-03-2007. Under this one time settlement borrowers are required to pay the principal loan amount with interest waiver depending on the repaying capacity of the borrower.(source BL 221108)

HDFC Bank opens counter for exchange of soiled and mutilated notes at branches in Secunderabad from 25th to 28th November 2008 ( source BL 221108)

Federal Bank in these difficult times is planning to recruit 3000 persons in next 2-3 years. It will be 1000 every year for the next 2-3 years. They are likely to increase their branches to 1000 by 2011 from just over 600 as of now. ( source BL 231108)

Corporation Bank is expanding in states like Rajasthan, MP, WB, Bihar, Haryana, Punjab and HP where presence is poor. From 1026 branches at present they are likely to reach 1400 within 2 to 3 years. ( source BL 231108)

Often there is mention of limitation period. Please clarify

Limitation period is governed by the Limitation Act which specifies the time limit within which the parties to a legal agreement can take action in a court of law to enforce their legal right. On expiry of limitation period the filing of legal suit is barred. In most bank loan agreements the limitation period is 3 years except in mortgage where it is 12 years

We hear of Negotiable Instruments but are not clear about it. Can you elaborate.

Cheques ,bank drafts, bills of exchange and promissory notes are known as negotiable instruments. Negotiation means transfer of an instrument through endorsement and delivery with the transferee getting better and absolute title provided it is taken in good faith and for value. All bank payments are based on this requirement to be fulfilled.

What are Lok Adalats?

RBI approves of compromise settlement of dues through Lok Adalats. They are convened to hear disputes where disposal of the cases are quick and concessions for one time settlement is offered by banks. It is an effort to settle large number of cases at a single forum in an expeditious manner where clients and banks are willing to settle the issue.

Home Loans are mostly against equitable mortgage. Please explain equitable mortgage

Where the mortgager i.e. the borrower delivers to the mortgagee i.e. the bank, at notified places, the documents of title to immovable property with intention to create a security thereon for availing a loan or credit facility it is known as equitable mortgage of the immovable property. It is also known as mortgage by deposit of title deeds. In case of non payment of the loan amount the bank can sue for sale of the property but cannot confiscate.

What is Right to Information ?

Right to Information Act 2005 empowers the central information commission to receive complaints if a Public Information Officer does not provide timely and correct information.  It is the right to  information available to Indian citizens to access the information under control of the public authorities.  RBI and public sector banks are a public authority under the Act and as such are obliged to provide information to members of public.

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BANKS IN NEWS (19-11-08)

PNB launched mobile banking in Daringibadi in Kandhamal district in Orissa. It aims to reach out to people in remote areas not covered by banking services and bring them into the fold by opening no frills account. Biometric cards, thermal filters and near filled communication mobile handsets are required to operate this unique banking service.(source BS 181108)

Banks have hiked NRI deposit rates by 75 basis points to attract foreign currency resources for the country (source BS181108)

ICICI Bank is reducing the timings from 12 hours to 9 hours at some of its branches from 1st December 2008. Instead of 8am to 8pm it would be 9am to 6pm at about 500 branches. (source BS 131108)

State Bank of Hyderabad has recently rolled out Smart Salary account for corporates which include features like pre-approved credit facility besides offering ca loans and personal loans. (source BS101108)

SBI inaugurated its 5th MICR cheque processing centre at Sripuram branch in Tirunelveli. It has the capacity to process 600 cheques a minute and will cater to the needs of 69 branches of various banks in the district. (source BL 181108)

Standard Chartered is looking to increase its field force and focus on relationships as a strategy to give its consumer banking segment the push. The thrust would be on SME business among which doctors, chartered accountants etc would be given special attention. Currently Stanchart has $ 2 billion of assets under management from about 2 lakh customers. (source BL 181108)

State Bank of Travancore has started girl child adoption scheme from schools across the country under which the bank will bear the cost of tuition, books and stationery, uniform and transport to school and back subject to maximum of Rs 5000 per month for each child. The bank has adopted 22 girl children in the age group of six to 14 years hailing from disadvantaged families but academically sharp. (source BL 171108)

Union Bank of India has cut its prime lending rates by 50 basis points to 13.50%. ( source HT 041108)

BANKS IN NEWS ( 3-11-2008 )

Hero Honda and Andhra Bank have signed up to support two wheeler buyers including rural parts of Andhra Pradesh. Buyers can avail loan upto 90% of the on road price of the two wheelers. ( source Business Line 29-10-08)

Sale of gold coins on the rise through banks this year. There has been significant rise in demand for gold coins and ingots this year. Union Bank and Kotak Bank have reported impressive results. ( source Business Line 29-10-08)

State Bank of Hyderabad has donated a pick-up van, as part of bank’s community service campaign, to Centre for Social Service. The van would be used for transport needs of the girls for sending them to schools.( source Business Line 31-10-08)

The Union Cabinet has approved the capital restructuring plan of UCO Bank by converting Rs 250 crore equity into preference shares. This will improve their earnings per share.( source Business Line 01-11-08)

United Bank of India has revised their interest rates on deposits w.e,f 01.11.2008. Deposits of two years to less than three years will carry interest at 10.50% while deposits for 30-90 days 91-179 days would fetch 7% and 8% respectively. ( source Business Line 01-11-08)
Punjab National Bank has announced cut in their prime lending rates by 0.5% to 13.5% effective from 1st November ,2008. It is also likely to cut peak deposit rates by 50 basis points to 10% effective from 1st December ,2008. ( source Business Line 01-11-2008)

IDBI cuts rates on home and education loans by 50 basis points from 1st November, 2008. The margin on home loans raised from 15% to 20% upto Rs 30 lakhs and to 25% for loans above Rs 30 lakhs. ( source Business Line 02-11-08)

IDBI Bank has decided to sell its housing loan subsidiary IHFL, unlike its previous plan to merge the unit with itself. (source Business Standard 03-11-08)

Press Release

RBI has effected yet another rate cut by 100 basis points in the Cash Reserve Ratio (CRR) maintained by banks to 5.5% effective in two tranches. The first cut of 0.5% is effective from 25th October 2008 and the second 0.5% would be effective from 8th November 2008. Similarly there would be 0.5% cut in repo rate to 7.5% w.ef 3.11.2008 and a one percent reduction in the Statutory Liquidity Ratio or SLR to 24%. All these measures are aimed at improving the liquidity position of banks and a possible reduction in the banks lending rates. ( source Business Line 1-11-08)

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