epages News [Banks, October 2003]

ICICI bank opens representative office in Dubai

Oct 02, 2003: Dubai: India's second largest private bank, the ICICI Bank, opened its representative office in Dubai seeking to get a larger share of NRI business from the region. The branch will be upgraded as a full-fledged branch subject to the approval from UAE. However, the UAE Central Bank Governor had clarified during the just concluded World Bank-IMF meeting that it did not plan to allow more banks to open offices in the country. India's largest bank, State Bank of India had also indicated that they may be the first choice if the UAE financial system opens up to accommodate more foreign banks. SBI has also made an application to open an office and was in touch with the Central Bank. The ICICI bank chief said the bank was also keen to open an office at the Dubai International Financial Centre (DIFC) and as part of plans to increase international presence, it may open subsidiaries in Toronto, Canada and a representative office in Shanghai, China.

SBI to turn branches into financial super shops

Oct 02, 2003: Mumbai: SBI will start marketing mutual fund, insurance products and credit cards through its branches across the country. In the initial phase, it will convert about 525 of its branches into financial super shops, which sell products of SBI MF scheme, its life insurance products and also its credit cards. SBI MF has launched Magnum Income Plus scheme with a free life insurance cover for investors. Investor will get a life insurance cover up to their investment with a maximum capital of Rs 2 lakh. Magnum Income Plus is an open-ended scheme with Saving Plan and Investment Plan. While the Saving Plan will put 100% in debt papers, Investment Plan will have a 20% equity component. The scheme, which opened today, will close on October 22. This scheme will have investment option of less than one year and also more than three years.

State Bank, ICICI Bank link ATMs to create 4,000-strong network

Oct 03, 2003: Mumbai: The country’s largest private and public sector banks, ICICI Bank and State Bank of India, are integrating their ATM networks to give their retail banking customers access to almost 4,000 automated teller machines across the country. Banking industry sources said details of the ATM sharing agreement between the two banking big-guns have been ironed out and that the tie-up will be announced in the next few weeks. Customers of both banks will be able to use ATMs of the other bank at no extra charge or fee, said sources. This is the first bilateral ATM sharing deal of this size in the country till date, though the trend had been started by other smaller banks, which have made attempts to form bilateral and multi-lateral ATM networks in order to provide more machines at more locations to their customers, as well as maximise revenues from each machine.

Many banks like UTI Bank have entered into at least three different ATM network- agreements with foreign, public and private sector banks. Apart from this new initiative between ICICI Bank and SBI, four banks—IDBI Bank, Citibank, Stanchart and UTI Bank—have set up a shared ATM network of 1,500 machines called Cashnet—managed by Euronet, the US based provider for electronic financial transactions solutions. combined network of 1,700 machines. Five public sector banks—Union Bank of India, Central Bank of India, Uco Bank, Indian Overseas Bank and Canara Bank—have also announced plans to launch a shared network with over 600 ATMs, called Cash Online.

UCO Bank to refund Rs 4,000 cr to IPO applicants

Oct 03, 2003: Bangalore: Kolkata-based UCO Bank will refund nearly Rs 4,000 crore to applicants who had bid for the bank's IPO last month. The state-owned bank's IPO for 20 crore-equity shares of Rs 10 each at a premium of Rs two per share, aggregating to Rs 240 crore, was oversubscribed 17.5 times. The bank's scrip is to be listed on the stock exchanges on October nine following completion of allotment of shares. With the IPO, the bank's equity capital would go up to Rs 799.36 crore and government holding would reduce to 74.98 %. UCO Bank, which has 20 ATMs, planned to increase its network to 150 by March 2004.

Andhra Bank cuts PLR by 0.75%

Oct 15, 2003: Mumbai: Andhra Bank has reduced its prime lending rate by 0.75 % to 10.5 %, effective from Wednesday. The short-term prime lending rate has been revised to 9.75 % from 10.5 %, an Andhra Bank release said here. The new prime term lending rate (PLR) would now be 10.75 %, brought down from 11.5 %, it added.

IFCI clears air on relationship with ICICI Bank

Oct 15, 2003: New Delhi: IFCI, which has been served a notice for winding up by ICICI Bank today said that there was an intractable relationship between the two institutions and that it had filed joint applications for recovery of money on behalf of ICICI Bank also. The FI today recalled the chain of events, which led to the notice being issued by ICICI Bank. According to the Delhi-based FI, it had availeda bridge loan of Rs 206 crore from ICICI Bank in July, 2001. As per the terms of the bridge loan, the repayment was to be made by way of deposit of periodical instalments by specified assisted concerns in a designated account. In terms of the bridge loan agreement, IFCI had the option to prepay the loan amount and get the specified assisted accounts released in its favour. Around May 2002, the two institutions exchanged correspondence to decide the modalities of the pre-payment. However, no decision could be reached until November, 2003.

RBI asks banks to load ATMs

Oct 15, 2003: New Delhi: Taking a serious note of non-availability of cash at ATMs, the RBI has asked banks to keep adequate cash in these machines. In a letter to CMDs of all the private and public sector banks, RBI asked them to maintain ample amount of cash to do away with hardships faced by customers. However, banks like HDFC and ICICI denied that their ATMs had ever been without cash. HDFC Bank M.D. Aditya Puri said such situations should not arise, as all HDFC Banks’ ATMs are connected to nearby branch offices. ‘‘As soon as the cash goes out of an ATM, the branch manager comes to know and he should take remedial measures immediately,’’ he said.

Visa/Master Card antitrust ruling upheld

Oct 18, 2003: New York: An appeals court upheld a ruling that Visa and Master Card violated antitrust laws by barring their member banks from issuing credit and charge cards on rival networks. The US Second Circuit Court of Appeals reiterated a decision issued Sept. 17 by a panel of that court, with some changes. The original decision upheld a 2001 ruling by US District Judge Barbara Jones. The case had been brought in 1998 by the US Department of Justice challenging the organisational structure of two of the four major U.S. payment card systems. The complaint said Visa and Master Card, which are organised as joint ventures owned by their member banking institutions, conspired to restrain trade. Jones had ruled that Visa and Master Card broke antitrust laws by barring member banks from issuing American Express and Discover cards. The card associations in late April agreed to pay a combined $3 billion to resolve a separate lawsuit over debit card fees brought by millions of retailers led by Wal-Mart Stores Inc.

Bank plans IT subsidiary

Oct 23, 2003: Thiruvananthapuram: The IT firmament in the country is set to witness the entry of another major player, with the State Bank of India (SBI) planning to launch an IT subsidiary. SBI chairman AK Purwar said that talks were on with an IT major to form a joint venture infotech company. Mr Purwar would not disclose the name of the company, but said the subsidiary would not confine itself to doing work for the bank, and would function independently taking on its own business. The equity stakes of SBI and the partner company in the joint venture are yet to be worked out. It is learnt that the fast track computerisation efforts currently on in SBI provides a large captive business opportunity for the new company.

SBI's retail loans jump 35% in H1

Oct 23, 2003: Mumbai: State Bank of India (SBI) has recorded a 35% growth in retail loans as on September 30, ‘03. Retail loans comprise 21% of the bank’s total advances. According to the bank sources the year-on-year retail loan growth was 35% on account of growth in home and car loans. SBI is slated to announce its six monthly results on September 30. Banking analysts are expecting Rs 900 crore net profit on a conservative basis for Q1 while some have pegged it at Rs 1200 crore. Operating profit is expected to be about Rs 2,900 crore. In Q1, it registered a net profit of Rs 914 crore and operating profit of Rs 2,582 crore. The figures published by the Reserve Bank of India’s weekly statistical supplement showed a growth of Rs 16,632 crore (or 2.3%) to Rs 7,45,847 crore. However, on a year-on-year basis SBI’s advances have improved by 6.8%. Meanwhile, deposits have grown 12.8% to Rs 250,596 crore.

Corp Bank to open 50 more branches

Oct 27, 2003: Kochi: Public sector Corporation Bank plans to open 50 more branches throughout the country, including three more in Kerala this fiscal. Of the five branches planned in Kerala, two have been already opened. Three other branches would be opened by the end of this year. The bank proposes to increase its ATM network in the country from the present 555 to 1000 by the end of this year. The bank had entered into a tie-up with seven banks, three of them in the public sector, for sharing ATMs.

The bank also proposes to complete nation-wide interconnectivity of branches by the end of this year. Using the IT platform, the bank hopes to come out with innovative products. Its latest product 'Crop Mahila Gold', for acquiring 999 pure imported gold from the bank or for purchase of jewellery from others. The bank had posted a net profit of Rs 126.43 crore in the quarter ending June this year.

Bank bets on good monsoon to boost credit offtake

Oct 29, 2003: Bangalore: The recent spell of rains in Karnataka is good news not just for the farmers and the state’s policy makers, but also for State Bank of Mysore, which has bulk of its branches in the state (528 out of total 620). “Drought has hit credit offtake. In some districts like Davangere and Chitradurga, which are pre-dominantly agrarian, we find that service providers like medical shop owners, fertiliser dealers have seen a decline in business,”M Sitarama Murty, MD of SBM, said. Besides legacy problem accounts in the plantation sector, SBM is also being impacted by problem accounts in coconut and arecanut. Understandably, the drought is also expected to impact SBM’s non-performing assets.

Cost control measures see SBM's Q2 net zoom

Oct 29, 2003: Bangalore: For the second quarter ended September 30, ‘03, State Bank of Mysore (SBM) has posted a net profit of Rs 44.9 crore as against Rs 8.1 crore in the corresponding period last year, registering a sharp rise of 455%. The bank’s total income rose by 7.3% on year-on-year basis to Rs 338.9 crore (Rs 315.9 crore). The outflow towards interest payment stood at Rs 151.7 crore (Rs 166.4 crore) in Q2. Effective treasury management and cost control have helped SBM report a 186.4% rise in its net profit for the first half (H1) of the current fiscal on a year-on-year basis. Net profit stood at Rs 90.3 crore compared to Rs 31.5 crore in the corresponding period last year. The other income component, which also included earnings from the treasury operations, was Rs 156.1 crore during H1, registering a 68% rise on a year-on-year basis.

A falling interest rate scenario helped SBM pare interest payment to Rs 297.5 crore (Rs 331.5 crore), representing a decline of 10.2%.The bank also made provision towards VRS (Rs 14.9 crore) and leave encashment of Rs 1.1 crore. The bank, whose gross non-performing assets (NPAs) as of September 30, ‘02 stand at 13.3% saw this to fall to 10.4%.

 
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