Corporation Bank to focus on improving low-cost deposits

Corporation Bank is chanting the "you scratch my back and I'll scratch yours' mantra when it comes to extending credit to corporates. While sanctioning loans, the Bank will insist that corporates open salary accounts of at least one division or unit.
The Bank has hit upon this strategy to grow its current account savings account(CASA) deposits, which at 25 percent of total deposits is lower than the 35-40 percent prevalent among public sector banks.
For every large corporate loan that Corporation Bank sanctions- be it on a standlone basis or in consortium with other banks- the Bank will insist that salary accounts of that company's staff be opened with it. This way the bank hopes to tap CASA deposits. To improve the proportion of CASA deposits in the total deposits, the Bank plans to open 200 branches, mostly in the semi-urban and rural areas in the North, East and West, every year over the next 5 years.(BL 21.10.2010)

Canara Bank to invest in tech to attract the young

Canara Bank plans to invest significantly in technology with a view to wooing younger customers. Mr. S.Raman, CMD,Canara Bank advised that the Bank would invest as much as it requires to make the Bank the most technologycally advanced Bank. The Bank will also invest in recruiting specialities such as IT professionals and Chartered Accountants.The Bank will recruit 100 IT professionals, 100 Chartered Accountants, risk analysts and young people with technical skills, he added. There are also plans to appoint officers to exclusively work in rural branches. The Bank is also embarking on branch expansion plans, including a better ATM network. Canara Bank also plans opening branches in Africa,"possibly Nigeria, South Africa and Kenya", he added.(BL 21.10.2010)

State Bank raises base rate 10 bps to 7.60%

Striking a balance between wanting to attract more borrowers into its fold and the need to pass on the increased cost of mobilising resources, State Bank of India has nudged its base rate up by 10 basis points to 7.60 per cent. Simultaneously, India's largest lender increased its benchmark prime lending rate by 25 basis points to 12.50 per cent. Both the rate hikes are effective from October 21. By upping its base rate only marginally at a time when other banks have raised their rates by as much as 50 basis points, SBI clearly wants to attract borrowers from other banks into its fold, say analysts.Most public sector banks , including PNB, BOB, Union Bank of India and IDBI Bank have increased their rates from 8.00-8.25% to 8.50% after the RBI hiked key short term interest rates in September. Private sector banks such as ICICI Bank and Axis Bank have increased their base rate by 25 basis points to 7.75%. HDFC Bank has raised its base rate by 25 basis points to 7.50%. With interest rates on deposits of various maturities being marked up by 25-75 basis points over the last few weeks, analysts say the increased cost of mopping up liabilities will pinch banks.(BL 21.10.2010)