Honda Siel ties up with SBI

Honda Siel Cars India announced on Friday that it has entered into a finance programme with the country's largest lender, State Bank of India(SBI).Under the agreement, SBI has approved a line of credit for financing HSCI dealers under the Electronic Dealer Finance Scheme(e-DFS). HSCI and SBI already have a retail finance agreement, under which SBI provides automobile loans to Honda customers at competitive rates. According to Mr. Manas Kumar Nag, Chief General Manager, SME BU, Corporate Centre, Mumbai," This agreement will further give us the opportunity to provide our customers more value-added services at competitive rates, and expose them to our various offerings."(BL 02.10.2010)

SBI to pay more for deposits: holds base rate

From 1st Oct 2010, bank depositors will earn 15 to 75 basis points more interest on term deposits across various maturities, while borrowers will have to pay more as a host of banks have marked up interest rates.
State Bank of India has hiked interest rates on domestic term deposits by 25 to 75 basis points across various maturity buckets. While SBI has decided to hold its base rate at 7.50% "for the present",Punjab National Bank(PNB),IDBI Bank and Allahabad Bank have increased their base rates from 8% to 8.50%. Axis Bank too upped its base rate by 25 basis points to 7.75%.
With effect from July 1, banks moved to the transparent base rate- linked lending regime. Banks determine their actual lending rates on loans and advances with reference to the base rate (which is the minimum rate below which banks can not lend ) and by including other such customer-specific charges.
PNB and IDBI Bank have upped term deposit rates by 25-50 basis points and 15-50 basis points respectively across various maturities. Over the next few days, other banks are also expected to increase interest rates on term deposits and the base rate.(BL 1.10.2010)

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)