Banks use 'negative list' gambit to make defaulters pay up

To recover dues, bankers are trying to put the fear of God into obstinate defaulters to pay up. And how? By making it plain that they could get reported to the Credit Information Bureau, banks have been able to achieve a modicum of success in recoveries. Some defaulting borrowers do see the writing on the wall when they are sensitised about the deleterious consequences of finding their names on the bureau's negative list, say bankers. By delivering the simple key message that the doors of the banks will be shut for the defaulters once they are on the negative list, banks are gradually making headway in recoveries. The prospect of future banking relationship getting jeopardised convince some defaulters to repay loans.
According to the Credit Information Companies (Regulation)Act 2005, every credit institution has to become member of at least one credit information company. Credit institutions, including banks and housing finance companies, have to provide credit data (positive as well as negative) to the credit information company. By tapping into a credit information bureau, credit grantors get complete picture of the payment history of a borrower.(BL 22.11.2010)

Banks forging tie-ups with brokerages

Banks are increasingly looking at online equity trading as an opportunity to boost their fee income and also increase the proportion of low cost current and savings account (CASA) deposits in total deposits. The recent spate of public issues, especially public sector units, has led to a revival of the retail interest in the equity markets. The total no. of demat accounts with CDSL and NSDL crossed the 1 crore mark and is now at 1.80 crore.
Banks are also hoping that the increase in the investment limit for retail investors in primary markets ( from Rs 1 lakh to Rs 2 lakh) will see more inflows into the equity markets. With State Bank of India, ICICI Bank and HDFC Bank have their own subsidiaries that offer online booking, others are tying up with online booking firms to offer the same, as they look for more avenues to increase fee income.( BL 19.11.2010)

SBI to open exclusive branch for youth

Trendy music, a cafeteria for chatting over a cup of coffee and catchy ambience. It's an exclusive "Youth branch" to be set up by State Bank of India in Andhra Pradesh in a first-of-its kind initiative in the country . This is a new concept and the idea is to project SBI as a bank for youth too, Mr. Shiv Kumar, Deputy Mananaging Director, SBI, told newspersons after the formal launch of e- payment system for commercial taxes in Andhra Pradesh on Thursday.
The proposed branch, to be set up in about three months, may have criteria such as age for opening accounts. "We were working on deciding an age bracket- something below 35 years of age", he said. The nature of branding/naming of the branch is also being discussed.
SBI now believes that a segmented approach to cater to different types of customers is the way to go.Further, with a view to helping its retail and corporate customers to pay commercial taxes, SBI has launched an e- payment platform.(BL 19.11.2010)

Corporation Bank on biz. development drive

Corporation Bank has launched a business development drive called "Operation Customer Outreach". A bank release said at Mangalore that the drive, which was launched on Thursday, will continue till November 28 at various centres throught the country .Under the programme, each staff member of the bank will move out in the command area of the branch and reach out to all residential areas, business establishments, govt. organisations, and corporates to connect the people to Corporation Bank. (BL 19.11.2010)

Bad loans on the rise in small scale industries

"Vernacular" drive for financial inclusion

Indian Institute of Banking and Finance (IIBF) has brought out the first vernacular edition (in Malayalam)of the book, 'Inclusive growth through business correspondent', a courseware for certification as a business facilitator/correspondent(BC/BF). The book was released by the Managing Director of State Bank of Travancore at Thiruvananthapuram. While making a presentation, Mr. R.Bhaskaran,CEO,IIBF said that candidates aspiring to be business facilitator/ business correspondents have to possess skill-sets necessary to making them effective and efficient in their assigned role. It is expected that he/she be equipped with adequate knowledge of banking and banking operations, bank-specific rules, norms and procedures related to acceptance of deposits and lending to the public. In addition, they should possess the skills for communication, interviewing, marketing and cross-selling. These are essential and necessary to enhance their effectiveness in information-gathering and customer profiling.
Keeping the above objectives in mind, the IIBF designed a certificate course for this newly emerging cadre of financial intermediaries. The objective is to expose the individual BF/BCs to current developments in the field and upgrade skill-sets to enable them to relate better with the rural people.(BL 10.11.2010)

Canara Bank bets growth on customer service

Usually when a Chairman takes charge of a bank, his first comment would be to increase the bank's deposits and advances. However, Mr. S.R.Raman,the present Chairman of Canara Bank had different views to comment. He said that his efforts would be to make all his customers only bank with the Canara Bank and which would mean better service to the customers. "Take good care of your customers and they'll take care of you", he further said.
He further stressed that his immediate focus would be first to initiate employees to know and understand all the features of the services offered by the bank. For example, employees would operate their own accounts only online, therefore, it would help them impart their knowledge to the customers easily. There is a perception problem with the customers, although public sector banks offer all the services offered by the private banks, still customers feel the latest service is given only by the latter. This is due to the fact that our own employees do not know all the features of the products and services provided by the bank.
Regarding challenges to be faced, he visualised that human resource would be a big challenge with about 5000 employees retiring in the next 3-4 years. To cope with this, the Bank would recruit about 4000 employees by next year.
For taking the Bank to the global, the Chairman said that the Bank is open to buying a small Bank in the US. Canara Bank expects to double its global business to 8% in the next 5 years.(BL 08.11.2010)