Banks press pause button on power loans

The power sector could run into a funding crunch as banks are going slow on lending.Many lenders have hit the sectoral credit exposure limit and concerns have emerged over environmental and coal mining clearances.As a precautionary measure, banks are laying down conditions such as tying up coal linkages.Some are even insisting that the coal supply should be only from within India and not from countries such as Indonesia and Australia, from where a lot of companies are now trying to source coal. But, domestic coal production is beset with its own set of problems like obtaining clearances from the Ministry of Environment,which can take ages or may not come at all. A senior official from a public sector bank said that currently, disbursements are only for power distribution and transmission projects.(BL 20092010)

Banks see gains from inclusion.

No-frills accounts are proving to be a growing business opportunity.SBI's business correspondent outlet in the middle of Mumbai's Dharavi's grime run by ageing LaduLal Jain which started around four months ago has brought a silent revolution for 2000 account holders there. Mr. Jain's outlet remits around Rs 1,00,000 a day.Account holders can send a maximum of Rs 10,000 on which they pay just Rs 25 as commission, he says. It earns 60% of that and the Bank keeps the rest. Jain expects to exhaust the limit of 2500 accounts very shortly and may seek permission to open more accounts. His expense is a modest Rs 20,000 on mobile phones and a printer to confirm transactions, he says. Many of his account holders are migrant workers who are permitted to furnish a limited KYC disclosure, which may even be a village identity card to open an account for deposits, withdrawals and remittances.It is a revolutionary concept said a senior SBI official closely associated with the project.Costs for banks are limited to spending on a few days training and paying the business correspondents, use of hand-held instruments and other related technological investments. SBI which has enrolled 1000 BCs in the past 3 months, plans to increase the number to 50,000 in 2 years. It aims to open up to 7.5 million no-frills accounts and extend its direct and indirect coverage to 1,00,000 villages. The Bank expects to generate Rs 2,000 crore in business by the 3rd year, and is working on various models with varying commission structures.(BS 16092010)

SBI ties up with Oxigen for kiosk banking in Mumbai

State Bank of India has tied up with technology company Oxigen Services to offer kiosk banking in Mumbai and Maharashtra. To begin with , the bank is launching 50 kiosk banking outlets in Mumbai,with the first one being launched in Dharavi on Wednesday. Last month, SBI had launched kiosk banking with Oxigen in Delhi, with 30 outlets. Under the arrangement, Oxigen will provide the technology support , while Sahyog Microfinance Foundation, an Oxigen-sponsored Company which is registered as a banking correspondent(BC) with SBI, will deal with the commercial aspects of the transactions.Mr. Riten Ghose, General Manager,SBI,Mumbai, said the Bank has about four-five national level BCs and many more at the local level. For instance, there are about 500 BCs in Maharashtra. The Bank is also looking to enrol its active self-help groups as BCs.
Customers will have to open a no-frills SBI account through Oxigen Web Retailers. These are retailers who already offer services such as online bill payment and ticketing.The kiosks would be linked to SBI's Core Banking System to offer banking services such as account opening, cash deposit and withdrawals and products such as remittance, mortgages, loans, insurance and mutual funds. The accounts will be opened with minimum Know Your Customer rules and using fingerprints for identification. The limit for daily cash deposit is Rs 10,000. The Bank will pay a fee to the retailer for every account opened and every transaction - withdrawal and deposit.(BL 16092010)

Tata Motors in pact with 14 Banks

Tata Motors has tied up with 14 banks to offer customers in Kerala with loans for purchasing the Tata Nano at attractive rates of interest. More such arrangements are in process.Loans for the Tata Nano will be available at all the branches of SBI, Central Bank of India, HDFC Bank, ICICI Bank, UCO Bank, Bank of Baroda, Tata Finance etc.(BL 16092010)

Allahabad Bank expects 25-26% credit growth

On the back of robust demand for credit, Allahabad Bank expects to post 27% growth in advances during the second quarter(july-september) of fiscal 2010-11.The Bank is hopeful of achieving a credit growth of about 25-26% for the financial year 2010-11, according to its Executive Director, Mr. M.R.Nayak. Mr. Nayak further said that the Bank might raise about Rs 1000 crore during the current fiscal. Although the Bank is quite comfortable with the capital position and might not need to raise funds immediately, however, if credit offtake picks up, then it may consider raising about Rs 1000 crore, he said.(BL 16092010)

Banks urged to launch awareness drive on financial inclusion

Banks should undertake joint publicity campaign in order to create awareness among people about financial inclusion and various products being offered, according to Mr. Rakesh Singh, Additional Secretary(Financial Services), Ministry of Finance.Mr. Singh was addressing a special review meeting to analyse the progress of implementation of financial inclusion plan and the initiatives taken by three Kolkata- based banks on financial inclusion.The banks were United Bank of India,Allahabad Bank and UCO Bank. The meeting took note of the progress in enrolling business correspondents to roll out financial inclusion plan, status of banking service in the villages having population above 2000 and position of training of rural branch managers and BCs among others.(BL 19092010)

ATM transactions cross 10-crore a month mark

ATMs in India appear to be humming with activity, what with the cumulative monthly transaction volumes recorded by the National Payments Corporation of India's (NPCI), National Financial Switch (NFS), to which 61,702 ATMs are linked, crossing the 10-crore mark for the first time in August 2010. The Switch recorded 7.32 crore ATM transactions in July 2010. Between Jan,2010 when 53,906 ATMs of 37 Banks were connected to the NFS, and August 2010, when 61,702 ATMs of 44 Banks were linked to the Switch, monthly transaction volumes on the NFS shot up by 79% to 10.18 crore (5.68 crore in Jan,2010). The spurt in transaction volumes is on 2 counts. For one, bilateral transaction volumes between banks have migrated to the multilateral NFS platform. Two, due to the festival season, said Mr.K.S.Nerurkar, Head-NFS and Business Development,NPCI. NPCI promoted by State Bank of India,Punjab National Bank,Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citi Bank and HSBC, was established in December, 2008. It is the umbrella organisation for all retail payment systems in the country owned and operated by banks.(BL 15092010)