Festive Cheer:some banks to cut home, auto rates

Banks are getting into a festive mood. A few public sector banks have decided to reduce home and automobile loans till Dec 31.
State Bank of India(SBI), the country's largest lender, has decided to extend its fixed-cum-floating rate home loan scheme for 3 months. The hugely popular scheme, launched in Feb.2009 was scheduled to expire on September 30. Under the scheme, for the first year, home loans carry an 8% interest rate, which rises to 9% in second & third years. Mangalore- based Corporation Bank has gone up. It has bettered SBI's offering, at least for thr first year, by charging 7.75% on home loans. Corporation Bank, charging 8.25% for home loans less than Rs30 lakh, has now launched a fixed-cum-floating home loan product which charges 7.75% interest for the 1st year and 8.25% for the next 2 years.The Mangalore-based bank has also reduced auto loan rates. Another lender, Bank of Baroda is also planning to give 'better rates" on home and auto loan products.(BS 29092010)

RBI allows 'for profit' Cos to act as bank business correspondents

In a bid to give a fillip to financial inclusion, the Reserve Bank of India on Tuesday allowed banks to engage the services of ' for profit' companies as business correspondents (BCs). This move will enable banks to engage the services of companies ( registered under the Indian Companies Act, 1956) with wide distribution network to offer limited range of banking services at low cost at places where setting up a brick and mortar branch may not be viable.
When the BCs model of banking outreach was introduced in Jan. 2006, only entities such as non-government organisations or micro finance institutions set up under Societies/Trust Acts, Societies registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States, Section 25 (not-for-profit) companies and post officies were eligible to act as BCs.
The list of persons who can be engaged as BCs was later expanded to include individuals like retired Bank employees, retired teachers, retired Government employees and ex-servicemen, individual owners of kirana, medical, fair price shops,individual public call office operaters, agents of small savings schemes of Government of India, insurance companies, individuals who own petrol pumps, etc.
BCs are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. They are permitted to perform a variety of activities including collection of small value deposit, disbursal of small value credit, recovery of principal, collection of interest, sale of micro insurance, mutual fund products, pension products, other third party products and receipt and delivery of small value remittances/other payment instruments. Corporate as BC would be more suitable for rendering banking services in accordance with the bank's internal policies and standards than individuals and other small entities.(BL 29092010)

SBI may raise rates to grab bonus money

In an effort to grab a share of the hefty Diwali bonus to employees in government and corporate sector, country's largest lender State Bank of India may raise the interest rate on term deposit rates in next few days.
"Bank may revise hike interest rate on term deposits only during festive season to get funds from people who will get bonus money. This is also will time build liquidity to manage rise in credit uptake from the third quarter" senior SBI official said. The asset liability committee would take a decision this week, official said but did not elaborate further. At present, bank has adequate liquidity to manage any immediate rise in demand for resources.The Statutory Liquidity Ratio( SLR) is about three-four per cent over minimum level 25 per cent of deposits prescribed by Reserve Bank of India, he added.(BS 29092010)

Corporation Bank starts branchless banking in W. Bengal

Mr. Pranab Mukherjee, Finance Minister, inaugurated five branchless banking units (Grameen Vikas Kendras), a biometric ATM of Corporation Bank and its 1170th branch at Sagardighi in Murshidabad district of West Bengal on Monday,the bank said in a press release .
Mr. Mukherjee said that the Government, in consultation with the Reserve Bank of India, has decided to provide appropriate banking facilities to habitations having population in excess of 2000 by March 2012.The benefits of welfare programmes such as those provided by the Mahatma Gandhi National Rural Employment Guarantee Act or payment of wages in lieu of work, pension etc. will be routed through the banks directly to the beneficiaries, so that there will be no pilferage through middlemen. Banking services will be provided to everyone within their reach through branch, mobile, internet, business correspondents, he said.( BL 28092010)

Central Bank plans Rs2500 crore rights issue this fiscal

Public Sector Central Bank of India said on Monday that it will come out with a rights issue to raise around Rs 2500 crore in this financial year. The funds will be issued for normal operations said the bank's CMD, Mr.S.Sridhar while attending a conference on " Finance and Investment" organised by CII. He further said that the bank is assessing the market and is taking all the necessary steps. The bank is yet to approach the SEBI. It will be filing its Red Herring Prospectus shortly. The bank has already appointed the merchant bankers for the rights issue.(BL 28092010)

Corporation Bank to expand branchless banking network

Corporation Bank, which uses the branchless banking model for financial inclusion, plans to bring more people under its branchless banking network. Mr. Ramnath Pradeep,CMD,said that the bank has around six lakh no-frills accounts, with an average balance of Rs 475 a customer. The Bank plans to increase the number of no-frills accounts to nine lakh,by the end of the fiscal year, under its financial inclusion plan. He said that opening of no-frills accounts is a stepping stone to enable customers to avail other banking products. The Corporation Bank has 1385 branchless banking units in Karnataka,AndhraPradesh, Goa, TamilNadu, Kerala, Gujarat, Maharashtra, Haryana & Punjab.(BL 24092010)

Toyota, UCO Bank seal car loan deal

Toyota Kirloskar Motor (TKM) Ltd. said on Thursday that it has signed an agreement with UCO Bank earlier this month to extend finance to its prospective customers. The Bank will be one of the preferred financiers for the entire range of vehicles sold by Toyota. The CMD, UCO Bank said that the tie-up will enable the Bank to increase its car loan portfolio substantially.The ED, UCO Bank said that inorder to increase the competitiveness of the Bank's Car Loan Scheme, the product has been modified and interest rate is lowered to make it more attractive in the market place.(BL 24092010)