Indian Institute of Banking and Finance (IIBF) has brought out the first vernacular edition (in Malayalam)of the book, 'Inclusive growth through business correspondent', a courseware for certification as a business facilitator/correspondent(BC/BF). The book was released by the Managing Director of State Bank of Travancore at Thiruvananthapuram. While making a presentation, Mr. R.Bhaskaran,CEO,IIBF said that candidates aspiring to be business facilitator/ business correspondents have to possess skill-sets necessary to making them effective and efficient in their assigned role. It is expected that he/she be equipped with adequate knowledge of banking and banking operations, bank-specific rules, norms and procedures related to acceptance of deposits and lending to the public. In addition, they should possess the skills for communication, interviewing, marketing and cross-selling. These are essential and necessary to enhance their effectiveness in information-gathering and customer profiling.
Keeping the above objectives in mind, the IIBF designed a certificate course for this newly emerging cadre of financial intermediaries. The objective is to expose the individual BF/BCs to current developments in the field and upgrade skill-sets to enable them to relate better with the rural people.(BL 10.11.2010)
Thursday, November 11, 2010
Monday, November 8, 2010
Canara Bank bets growth on customer service
Usually when a Chairman takes charge of a bank, his first comment would be to increase the bank's deposits and advances. However, Mr. S.R.Raman,the present Chairman of Canara Bank had different views to comment. He said that his efforts would be to make all his customers only bank with the Canara Bank and which would mean better service to the customers. "Take good care of your customers and they'll take care of you", he further said.
He further stressed that his immediate focus would be first to initiate employees to know and understand all the features of the services offered by the bank. For example, employees would operate their own accounts only online, therefore, it would help them impart their knowledge to the customers easily. There is a perception problem with the customers, although public sector banks offer all the services offered by the private banks, still customers feel the latest service is given only by the latter. This is due to the fact that our own employees do not know all the features of the products and services provided by the bank.
Regarding challenges to be faced, he visualised that human resource would be a big challenge with about 5000 employees retiring in the next 3-4 years. To cope with this, the Bank would recruit about 4000 employees by next year.
For taking the Bank to the global, the Chairman said that the Bank is open to buying a small Bank in the US. Canara Bank expects to double its global business to 8% in the next 5 years.(BL 08.11.2010)
He further stressed that his immediate focus would be first to initiate employees to know and understand all the features of the services offered by the bank. For example, employees would operate their own accounts only online, therefore, it would help them impart their knowledge to the customers easily. There is a perception problem with the customers, although public sector banks offer all the services offered by the private banks, still customers feel the latest service is given only by the latter. This is due to the fact that our own employees do not know all the features of the products and services provided by the bank.
Regarding challenges to be faced, he visualised that human resource would be a big challenge with about 5000 employees retiring in the next 3-4 years. To cope with this, the Bank would recruit about 4000 employees by next year.
For taking the Bank to the global, the Chairman said that the Bank is open to buying a small Bank in the US. Canara Bank expects to double its global business to 8% in the next 5 years.(BL 08.11.2010)
Wednesday, October 27, 2010
NBFCs too raise interest rates to attract depositors
With most banks increasing deposit rates, non-banking finance companies(NBFCs), including housing finance companies and non-banking non finance companies, are being forced to fork out higher interest rates on deposits to woo savers.
All major housing finance companies like HDFC,LIC housing finance, DHFL and HUDCO are now offering over 7% for a one year deposit compared with between 6-6.50% about 6 months back. For instance, Mahindra and Mahindra Finance(MMFL) rated FAA+ is paying a 8% for a one-year maturity while Shriram Transport, which commands a similar rating is offering 8.75% for a one-year deposit. While ICICI Bank offers 6.75% for a one year deposit, though it offers 7.25% for 390 days.
Meanwhile, Corporates looking for deposits too are being forced to raise interest rates. Real estate major Unitech is offering 11% for 6 months while Avon Corporation and another real estate company, Kolte Patil are paying 11.46% for a one year deposit. Not surprisingly, most savers prefer banks.(FE 27.10.2010)
All major housing finance companies like HDFC,LIC housing finance, DHFL and HUDCO are now offering over 7% for a one year deposit compared with between 6-6.50% about 6 months back. For instance, Mahindra and Mahindra Finance(MMFL) rated FAA+ is paying a 8% for a one-year maturity while Shriram Transport, which commands a similar rating is offering 8.75% for a one-year deposit. While ICICI Bank offers 6.75% for a one year deposit, though it offers 7.25% for 390 days.
Meanwhile, Corporates looking for deposits too are being forced to raise interest rates. Real estate major Unitech is offering 11% for 6 months while Avon Corporation and another real estate company, Kolte Patil are paying 11.46% for a one year deposit. Not surprisingly, most savers prefer banks.(FE 27.10.2010)
Pon IIIam inaugurated in Maduri
Pon IIIam (Gold House), the exclusive set up for those who deal in Gold, was inaugurated in State Bank of India(SBI),Madurai Branch recently.Inaugurating the set up, Mr. J. Chandrasekaran, Chief General Manager, Local Head Office , SBI Chennai, said this was the second in the circle, the first one at Chennai and soon such exclusive set up would be established in Coimbatore and Tiruchi, he said.(BL 27.10.2010)
Karvy to provide online trading facility to BOI customers
Karvy Stock Broking Ltd.(KSBL) will provide its online trading services to customers of Bank of India(BOI). According to an agreement between the Hyderabad-based Karvy and BOI, customers having savings/current account with Bank of India alongwith depository participant account either with NSDL/CDSL can avail a readymade online trading account from Karvy.(BL 27.10.2010)
Banking sector in India put up a good show during global financial crisis
The performance of various bank groups as on March 2009 and March 2010 had been impressive despite constraints faced by them due to slow down in the economy of the global financial crisis and adverse real economic scenario witnessed all over the world.The performance parameters during the two-year period showed that the banking sector exhibited remarkable resilience in withstanding the impact of global economic crisis. Increase in net NPAs or fall in return on assets during the period was marginal whereas the cost of funds registered a significant decline. Analysis of bank group-wise performance was as follows:-
Cost of funds:
The cost of funds had come down considerably during 2009-10 although it continued to be high for all bank groups except for foreign banks. The cost of funds which ranged between 4.46% and 6.67% for different bank groups in March 2009 came down considerably and worked out between 2.82% and 6.13% in March 2010.
Foreign banks could bring down their cost of funds from 4.6% to 2.82% during the period, whereas the State Bank group and nationalised banks could bring down their cost only from 5.94% to 5.32% and 6.09% to 5.35% respectively. While the new private sector banks could bring down their cost of funds sharply by 1.63%, the old private sector banks could bring down their cost of funds only by 0.54% during the period.
Cost of funds for public sector banks and old private sector banks continued to remain high and is a matter of concern.
Return on advances adjusted to cost of funds:
Return on advances adjusted to cost of funds in respect of various bank group remained in the range of 3.95% and 8.14% as at the end March 2009 and 3.60% and 7.17% as at end March 2010. State Bank group had the lowest return on advances for both the years. Foreign banks outperformed the entire bank groups as their return on advances adjusted to cost of funds stood at 8.14% and 7.17% as at end March 2009 and 2010 respectively.
Return on assets:
In respect of return on assets, while the foreign bank group scored well as compared with the other bank groups, State Bank group stood lowest even compared with old private sector banks.It is noteworthy to observe that while the new private sector banks increased their return on assets from 1.12% in March 2009 to 1.38% in March 2010, all other bank groups, including foreign banks, registered a decline on their return on assets.
Net NPAs
Barring the State Bank group, nationalised banks, and foreign banks, the other bank groups could show a reduction in their net NPAs during the period 2009-10. The benefit of restructuring of assets might have come to the rescue of banks to improve their NPAs position.(BL 25.10.2010)
Cost of funds:
The cost of funds had come down considerably during 2009-10 although it continued to be high for all bank groups except for foreign banks. The cost of funds which ranged between 4.46% and 6.67% for different bank groups in March 2009 came down considerably and worked out between 2.82% and 6.13% in March 2010.
Foreign banks could bring down their cost of funds from 4.6% to 2.82% during the period, whereas the State Bank group and nationalised banks could bring down their cost only from 5.94% to 5.32% and 6.09% to 5.35% respectively. While the new private sector banks could bring down their cost of funds sharply by 1.63%, the old private sector banks could bring down their cost of funds only by 0.54% during the period.
Cost of funds for public sector banks and old private sector banks continued to remain high and is a matter of concern.
Return on advances adjusted to cost of funds:
Return on advances adjusted to cost of funds in respect of various bank group remained in the range of 3.95% and 8.14% as at the end March 2009 and 3.60% and 7.17% as at end March 2010. State Bank group had the lowest return on advances for both the years. Foreign banks outperformed the entire bank groups as their return on advances adjusted to cost of funds stood at 8.14% and 7.17% as at end March 2009 and 2010 respectively.
Return on assets:
In respect of return on assets, while the foreign bank group scored well as compared with the other bank groups, State Bank group stood lowest even compared with old private sector banks.It is noteworthy to observe that while the new private sector banks increased their return on assets from 1.12% in March 2009 to 1.38% in March 2010, all other bank groups, including foreign banks, registered a decline on their return on assets.
Net NPAs
Barring the State Bank group, nationalised banks, and foreign banks, the other bank groups could show a reduction in their net NPAs during the period 2009-10. The benefit of restructuring of assets might have come to the rescue of banks to improve their NPAs position.(BL 25.10.2010)
Friday, October 22, 2010
Corporation Bank to focus on improving low-cost deposits
Corporation Bank is chanting the "you scratch my back and I'll scratch yours' mantra when it comes to extending credit to corporates. While sanctioning loans, the Bank will insist that corporates open salary accounts of at least one division or unit.
The Bank has hit upon this strategy to grow its current account savings account(CASA) deposits, which at 25 percent of total deposits is lower than the 35-40 percent prevalent among public sector banks.
For every large corporate loan that Corporation Bank sanctions- be it on a standlone basis or in consortium with other banks- the Bank will insist that salary accounts of that company's staff be opened with it. This way the bank hopes to tap CASA deposits. To improve the proportion of CASA deposits in the total deposits, the Bank plans to open 200 branches, mostly in the semi-urban and rural areas in the North, East and West, every year over the next 5 years.(BL 21.10.2010)
The Bank has hit upon this strategy to grow its current account savings account(CASA) deposits, which at 25 percent of total deposits is lower than the 35-40 percent prevalent among public sector banks.
For every large corporate loan that Corporation Bank sanctions- be it on a standlone basis or in consortium with other banks- the Bank will insist that salary accounts of that company's staff be opened with it. This way the bank hopes to tap CASA deposits. To improve the proportion of CASA deposits in the total deposits, the Bank plans to open 200 branches, mostly in the semi-urban and rural areas in the North, East and West, every year over the next 5 years.(BL 21.10.2010)
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