Edelweiss keen on banking foray,awaits RBI norms

Mumbai-based financial services firm Edelweiss is eyeing a banking foray,according to investment bankers. It will be joining the growing list of corporates,including Anil Ambani-promoted Reliance group, Aditya Birla group, Shriram Capital and Religare, which have already made known their intentions to seek a banking licence. Most of the players are waiting for the Reserve Bank of India (RBI) to come out with a fresh set of guidelines that would allow new private players in the banking sector after which they are expected to approach RBI for a banking licence.(ET 27052010)

PNB ties up with OICL

Punjab National Bank has tied up with Oriental Insurance Company Limited to offer a floater Health Insurance Policy covering the proposer and family under one sum insured.The product was launched by the Circle Head,PNB,Ernakulam at Kochi.The scheme is applicable to all PNB customers and employees.Under this,the beneficiary and family members(comprising the spouse and two children)will be covered in one policy and one sum assured.The sum insured floats for all the beneficiaries under the policy.The policy covers beneficiaries between the ages of 3 months and 80 years. (BL 26052010)

SBI to lend Rs20,000 Cr for 3G funding

State Bank of India (SBI) will be lending Rs 20,000 crore for telecom companies to pay for licences for the Third Generation(3G) mobile services. The rate of interest will be decided in one-to-one talks with the operators to whom SBI will be lending, said bank's chairman .The 3G funding would impact the liquidity of the bank in a big way. The SBI chairman said that as on March 31,2010,the bank had Rs40,000 crore liquidity,about 50% of which would go for 3G funding.On the business focus ,the chairman further said that the first focus of the bank would be in retail- home loans and auto loans in particular-followed by the corporate sector. The bank is expecting a 20% credit growth in 2010. (BL 23052010)

For banks,green is the new black

India's leading banks are seizing opportunities in an emerging low-carbon economy.Last December IndusInd Bank inaugurated Mumbai's first solar-powered ATM as part of its 'Green Office Project' campaign titled 'Hum aur Hariyali'. State Bank of India,as part of its green banking policy ,plans to set up captive windmills to generate 15 Mw of power in Tamil Nadu, Maharashtra and Gujarat.A new study by PricewaterhouseCoopers(PwC) commissioned by the Indian Bank's Association(IBA) and The Climate Group confirms that India's leading banks are recognising and seizing opportunities in an emerging low-carbon economy. For instance, in coal technologies, ICICI Bank introduced innovative concepts like deep benefication of coal(coal washeries) and coal bed methane. It is seen that public sector banks are less involved in voluntary initiatives and appear to be postponing action until regulation is in place. However, as an exception, The new Green Home Loan Scheme from SBI will support environmentally -friendly residential projects and offer various concessions.These loans will be sanctioned for projects rated by the Indian Green Building Council (IGBC) and offer several financial benefits-- a 5% concession in margin,0.25%concession in interest rate and processing fee waiver.(BS 22052010)

NHB bullish on reverse mortgage loans

With its new reverse mortgage loan-enabled annuity scheme(RMLeA)offering senior citizens assured lifetime payments instead of the earlier cap of 20 years,National Housing Bank(NHB) is expecting more takers for the product.It is in talks with banks and insurance companies to expand its pool of RML facilitators. While the concept of RMLeA itself has been a slow starter in India,NHB feels the new offering is more attractive to borrowers in terms of higher payments and better risk mitigation.NHB,which is the principal agency to promote housing finance institutions,launched the scheme in India in 2007. Reverse mortgage seeks to monetise the owner's equity in the house. This involves senior citizen borrowers mortgaging their house to a lender ,who then makes periodic payments to the borrower during the latter's lifetime. The borrower need not repay the principal and interest to the lender during their lifetime. On the borrower's death or on borrower leaving the house permanently,the loan along with accumulated interest is settled through sale of the house.The borrower's heir can also repay or pre-pay the loan with interest and release the mortgage without sale of property.Around 23 banks took up the RML scheme which include State Bank of India,Punjab National Bank, Bank of India and Indian Bank.According to NHB, as of March 31,2010,around 7000RMLs of Rs 1400 crore have been sanctioned. (BS 22052010)

Axis Bank inks largest ATM outsourcing deal

In what is the largest ATM outsourcing deal in the country,Axis Bank has entered into an agreement with two third-party service providers to increase its ATM count to more than 9000 within the next 18 months. The country's third largest private sector lender has signed contracts with Prizm Payment Services and AGS Infotech to set up and manage 5000 ATMs on a purely variable model according to someone with knowledge of the development. Axis Bank had 4293 ATMs as on 31st March, 2010.Prizm will set up 3500 ATMs while AGS Infotech will set up 1500 ATMs. Since it is a fully outsourced deal, the bank will not incur capital expenditure.The ATMs will be owned and managed by the two service providers.Axis Bank will only be responsible for cash settlement and will pay the service providers a fee per transaction.(BS 16052010)

Bank of Rajasthan to merge with ICICI Bank

Bank of Rajasthan is to be merged with ICICI Bank.The boards of both banks which met separately granted in-principle approval for the merger.In a statement, ICICI Bank said it has entered into an agreement with certain shareholders of the BOR for amalgamation of the bank with itself with a share swap ratio of 25:118.The merger is not likely to have any material impact on ICICI Bank's capital and the only advantage is a readymade branch network. Post merger ,ICICI Bank's branch network would go up to 2463. This is the third merger for the bank after it took over Bank of Madura and Sangli Bank.(BL 19052010)