SBT-Kudumbasree drive for financial inclusion

State Bank of Travancore(SBT) is now in the process of tying up with the Kudumbasree poverty eradication project of the Govt. of Kerala to roll out the banking correspondent/ facilitator model in 27 under-banked villages allocated to the Bank in the state. Earlier this year, SBT had formulated and approved a full-fledged financial inclusion plan according to the directives,Managing Director-in-charge said.The plan, inter alia,involves extending banking services to 41 currently under-banked villages with a population of over 2000. Of these, 27 are in Kerala and 14 in Tamil Nadu.(BL 08092010)

SBI to raise Rs 500 crore via retail bonds

State Bank of India plans to tap retail investors via a bond issue . The executive committee of the bank's board accorded approval for raising Tier II capital by way of public issue of lower Tier II bonds for Rs 500 crore with an option to retain 100% oversubscription. Although other banks like IDBI and ICICI regularly tapped retail investors through the 1990s and early 2000 via deep-discount bonds, SBI have not tapped retail investors as deposits were easy to come, say analysts.SBI may make the bond issue in October which could be of 10-15 years tenure.(BL 08092010)

IDBI Bank likely to raise equity capital

IDBI Bank may consider raising equity capital, thereby diluting the Govt's stake, over the next 12-15 months. The Bank will explore the options of going in for a right issue, follow-on public offer , qualified institutional payment or preferential placements for raising funds,according to its Chairman and Managing Director,Mr.R.M.Malla. The Union Govt. currently holds a 65% stake in the bank. The bank will also focus on garnering more CASA( current account and savings account) deposits,which currently stands at close to 15% of the Bank's overall deposits. IDBI Bank has done away with the concept of minimum balance on CASA accounts and has waived off most service charges, other than those pertaining to bounced cheques.(BL 06092010)

Shift to card payments to save on cash printing cost: Study

It cost the Govt. nearly Rs 2800 crore to print currency notes in 2009-10.Cash/ currency notes are the preferred mode of payment for most customers,but with printing cost on the rise, it makes sense for the Govt. to reduce usage of these notes and shift cash transactions to a card-based system of payment. Right now, a mere 5% of retail sales or about 90000 crore worth of transactions in India are done through cards(credit & debit).In other words, card transactions reduced cash transactions in the retail sector by about 5% .Given the cost of printing notes,card usage leads to savings of about Rs 140 crore(i.e,5%of Rs 2800 crore), in currency management, says a study conducted by Prof. Ashis Das, Professor of Maths,IIT Bombay.(BL 06092010)

New Banks must be strong for financial inclusion

New entrants in the banking sector should be strong , well capitalised to promote financial inclusion in a cost-effective way, said a top official at the Reserve Bank of India(RBI),which views increased access to financial services as a driver of sustainable economic growth. RBI initiated its process of increasing banking participants with a discussion paper on issues including capital requirements for aspiring banks, for which it has sought public feedback. The Govt. aims to increase access to banking services across geographics , through the new players, with a stated intention of ensuring every village with a population of over 2000 has access to such services by March 2012.(BS 01092010)

Vijaya Bank to focus more on branch expansion

With the Govt. directive to drive up CASA levels ,Vijaya Bank wants to place more emphasis on opening new branches.In 2010, the Bank plans to open about 100 branches,which it believes would give a boost to its CASA (current account savings account) ratio.According to the Executive Director,Vijaya Bank,with more technology driven products such as RTGS,NEFT and speed clearing in the payment and settlement arena, the float funds historically available to banks will continue to get reduced. However, with the daily interest regime ,customers are now comfortable keeping funds in savings account,which also meant easy liquidity and help Bank maintain its CASA level. The Bank's current CASA stands at 24.24%, and it targets a 25% CASA level this year.(BL 30082010)

PNB's online remittance facility

Punjab National Bank has launched PNB NRI Remit- India, an online remittance facility and PNB World Travel Card. The remittance facility is an online cross-border remittance solution to send money from the US to India and has been launched in association with the Bank of New York Mellon, said a release issued by the Bank. The World Travel Card is designed as a prepaid wallet for persons travelling abroad that can be used outside India. It is in association with Master Card and is available in dollar,euro and pound.(BL 30082010)