SBI to allow ATM withdrawals via e-wallet, denies ATM service charge hike

The largest lender State Bank of India will introduce new facility that would enable withdrawal of cash through ATMs using the bank’s mobile wallet.
However, the bank will charge Rs 25 on every cash withdrawal from the mobile wallet via ATMs.

SBIMeanwhile, the SBI has denied media reports that it has increased service charges to Rs 25 on regular ATM transactions.
“The service charge on cash withdrawal from ATMs has not been changed for normal savings accounts,” SBI MD (national banking) Rajnish Kumar told PTI.
“If a customer has money in SBI Buddy, our mobile wallet, he can now withdraw that money through ATMs. Also, now customer can deposit cash or withdraw cash through business correspondent (BC) from or into our mobile wallet. These facilities were not available earlier,” Kumar added.
For cash deposit of up to Rs 1,000 into its mobile wallet through business correspondents, the bank will levy a service charge of 0.25 per cent (minimum Rs 2 and maximum Rs 8) plus service tax.
For cash withdrawal of up to Rs 2,000 from SBI Buddy through business correspondents, the service charges will be 2.50 per cent of the transaction value (minimum of Rs 6) in addition to service tax.
The service charges will be effective from June 1, 2017, Kumar said.
The bank levies a service charge of 3 per cent plus service tax using immediate payment service (IMPS) for fund transfer through SBI Buddy to bank account.
On the media reports about the bank hiking ATM charges to Rs 25, Kumar clarified that cash withdrawals from ATMs has not been changed for normal savings accounts and that there was some errors in the circular earlier.
A corrected circular will be issued soon, he added.

Kotak bank to raise Rs 5,662 cr via QIP, promoter stake to fall

Private lender Kotak Mahindra Bank is looking to raise about Rs 5,662 crore through sale of 62 million shares through qualified institutional placement (QIP).
This share sale is part of stake reduction exercise by its promoter Uday Kotak, the vice-chairman of the bank, as advised by the Reserve Bank of India (RBI).
“Shareholders of the bank have approved and declared the opening of (QIP) issue today (Thursday),” Kotak Mahindra Bank said in a regulatory filing on stock exchanges.

Uday Kotak, executive vice-chairman & managing director, Kotak Mahindra BankThey also approved and took on record the floor price in respect of the issue and fixed this at Rs 913.24 per share of Rs 5 each, it said.
So, at the floor price, the bank would raise about Rs 5,662 crore. The proposed capital dilution works out to 3.37 per cent on the current equity base. RBI had issued a directive that Kotak Mahindra Bank Executive Vice-Chairman Uday Kotak would need to reduce his stake in the bank to 30 per cent by June 2017 and 20 per cent by December 2018.
Earlier in March, Kotak had sold 27 million shares, reducing his stake in the bank to 31.8 per cent, from 33.3 per cent.
On March 30, the bank’s board had approved a proposal to raise capital through an equity offer by issuing up to 62 million shares of Rs 5 each.
The koank had cited four reasons for the fundraising. These are to pursue consolidation opportunities in the banking and financial services space, capitalise on opportunities in acquisition and stressed assets resolution, including joining a bad bank, mop up additional avenue for organic growth like more international lending and infuse capital into subsidiaries.

RBI begins ‘corrective action’ against UCO Bank on high bad loans

The Reserve Bank of India (RBI) has initiated “prompt corrective action” for state-run UCO Bank over its high bad loans and negative return on assets, UCO said on Friday.

UCO, in a filing to the stock exchanges, said the action “will not have any material impact” on its performance, but did not give details of the corrective action.

It is the second state-run lender to come under the curbs of the Reserve Bank of India after the regulator revised the so-called prompt corrective action framework last month, tightening thresholds around bad loans.

Image result for RBI begins 'corrective action' against UCO Bank on high bad loansEarlier on Friday, UCO reported a narrowing of its quarterly loss and bad-loan ratio. It had net non-performing loans (NPLs) of 8.94 percent at the end of March.

Under RBI rules, prompt corrective action is triggered if a bank’s net NPL ratio crosses 6 per cent.

IDBI Bank, another state-run lender, said on Tuesday it was facing corrective action by the regulator.

Analysts say more lenders could come under central bank curbs as regulators strive to clean up bad loans of $150 billion in the sector.

UCO Bank posts net loss of Rs 588 cr for sixth successive quarter

Public lender UCO Bank narrowed its loss to Rs 588.19 crore during the March quarter as provisions for bad assets fell.
This is the sixth straight quarter that the lender posted net loss.

UCO BankNet loss stood at Rs 1,715.15 crore in the same period last year.
Income in January-March was down at Rs 3,906.74 crore, from Rs 4,745.48 crore a year earlier.
For the entire 2016-17, the Kolkata-headquartered bank trimmed its net loss to Rs 1,850.67 crore as against Rs 2,788.25 crore earlier, showed its balance sheet.
Full-year income fell to Rs 18,440.29 crore compared to Rs 20,157.28 crore in 2015-16.
UCO Bank set aside Rs 1,577.60 crore to cover stressed assets during the quarter, down from Rs 2,344.88 crore in the previous year.
Asset quality improved with non-performing assets (NPAs) coming in at 8.94 per cent of net advances as on March 31, 2017, from 9.09 per cent a year ago.
However, gross NPAs were a sticking point, which grew to 17.12 per cent of gross advances at the end of 2016-17, from the earlier 15.43 per cent.
The bank said no dividend has been announced for 2016-17.
The board of directors at a meeting held today also approved the issuance of 75 crore shares by various means, including follow-on public offer, qualified institutional placement or preferential allotment of shares.
The stock of UCO Bank closed 0.24 per cent down at Rs 41.55 on the BSE.

Karnataka Bank Q4 net profit up 30% at Rs 138 cr

Private sector Karnataka Bank has reported a rise of about 30 per cent in net profit at Rs 138.37 crore for the last quarter ended March 31, 2017.
It had posted a net profit of Rs 106.79 crore during January-March period of 2015-16.

Image via ShutterstockTotal income during March quarter rose to Rs 1,606.19 crore in 2016-17, from Rs 1,447.68 crore a year ago, the bank said in a regulatory filing.
For full fiscal ended March 2017, bank’s net profit increased to Rs 452.56 crore, up 9 per cent, from Rs 415.29 crore in 2015-16.
Income in the entire fiscal rose to Rs 5,994.74 crore, from Rs 5,535.07 crore.
On asset front, net non-performing assets (NPAs) were 2.64 per cent of the net advances at the end of March 2017, slightly up from 2.35 per cent year ago.
Gross NPAs or bad loans rose to 4.21 per cent as a percentage of gross advances made by the end of fiscal, from 3.44 per cent year ago.
Due to a restricted level of bank’s bad assets, there was only a small rise in provisioning and contingencies allocation to Rs 160.40 crore for the quarter, against Rs 112.50 crore year ago.
Board of the bank has declared a dividend of Rs 4 per share for 2016-17, Karnataka Bank said.

LIC divides investment portfolio among 3 MDs for more balanced decisions

Amidst some of its investment decisions being questioned by many, insurance behemoth Life Insurance Corporation (LIC), which manages Rs 25 trillion of assets, has divided its investment portfolio among the three managing directors so that a more balanced decision can be taken.
Last week, chairman V K Sharma distributed the portfolios among the three recently appointed MDs, sources at the Corporation, which is the largest institutional investor in the country, told PTI.

LIC divides investment portfolio among 3 MDs for more balanced decisionsFor the past many years, the life insurance giant had been functioning with only one or two MDs, but since the financial year (FY) 2015, it was only Usha Sangwan holding the fort. The top management of the Corporation consists of the chairman and four MDs below whom there are 40 executive directors.
It can be noted that LIC has been criticised for being driven into investment in many state-run units by the government in the past. Most of the failed or not-so- successful follow-on options by the state-run companies in the past were bailed out by the Corporation.
Now, LIC along with other state-run insurers are under legal scrutiny at the Bombay High Court for being the largest investor in the tobacco major ITC and other companies in the sector after a PIL has questioned the rationale. LIC and the five state-run general insurers hold over 30 per cent in the company now.
Though to put the record straight, LIC does not own these shares on its own but on behalf of government holdings in Suuti. LIC, through this, holds more than 16 per cent in the largest cigarette maker and even others did not purchase these shares from the market but transferred to them by the government, which they have already informed the court too.
According to the portfolio allocation order issued by the chairman last week, Sunita Sharma, the junior most MD, will oversee the investment operation department, while B Venugopal will handle the risk management and research part of the investment portfolio and Hemant Bhargava has been given the charge of monitoring and accounting, the sources said.
The investment department is divided into three verticals — monitoring and accounting, risk management and research and investment operations, which is the most important of the three. Earlier, all the three wings were reporting to the MD in-charge of investment portfolio.
The marketing department, that mobilises around Rs 2.5 trillion in premium annually and also the customer relationship management department, has been given to Usha Sangwan, while Bhargava is in also charge of the personnel and HR departments overseeing around 1 lakh employees of the Corporation.
Sangwan is also in charge of the newly-created department called the mission office for digital India, while Venugopal holds the additional charge of the finance department.
Earlier, LIC revamped the senior management to improve performance by transferring as many as 40 executive directors.
The Corporation had shifted the product development head in the marketing department Vinay Sah to head its housing finance arm LIC Housing Finance. The position was vacated by Sunita Sharma on her elevation as an MD.
Sah’s position has been filled in by Saroj Dikhale, who had been heading LIC Mutual Fund in the past.
LIC Housing Finance will now be headed by Raj Kumar who was heading the Bhopal office of the Corporation so far.
P K Molri will be looking after the investment operations wing of the Corporation, replacing V Chandrasekaran who has been shifted to the investment research department.
The Corporation has registered a 27.22 per cent growth in the new business premium in terms of the first-year premium in fiscal 2017. The Corporation garnered total first-year premium of Rs 1.24 trillion in the year gone-by against Rs 98,000 crore in the previous fiscal, helping it improve its market share to 71.07 per cent.

HDFC too matches SBI, ICICI’s home loan rates at 8.35%

The war for attracting customers for affordable housing loans intensified on Monday after and HDFC Ltd. reduced their interest rates by up to 0.3 per cent for loans of up to Rs 30 lakh to promote affordable housing.

New home loans rates for up to Rs 30 lakh for women will be 8.35 per cent and for other others, 8.40 per cent, mortgage lender HDFC Ltd said in a statement.
For home loans above Rs 75 lakh it is now 8.55 per cent, from 8.75 per cent for all, it said. The new rates are effective from Monday and are expected to be followed other lenders as well.

Image result for HDFC top matches SBI, ICICI home loan rates at 8.35%Earlier in the day, the country’s largest private sector lender, ICICI Bank too reduced interest rates by up to 0.3 per cent for home loans up to Rs 30 lakh in its bid to boost affordable housing. With this reduction, salaried borrowers can avail home loans at among the lowest rates in the industry, the country’s largest private sector lender said.
Salaried women borrowers will get home loans at 8.35 per cent and others at 8.40 per cent, it said.
Last week, State Bank of India (SBI) had reduced its affordable home loan rates by up to 25 basis points, offering a lower rate of 8.35 per cent to new women borrowers.
With around 26 per cent market share, SBI is also the biggest player in the home loan segment.
This move would be followed up by other lenders both in private and public sector space to stay in the competition.

SBI picks BofA, Deutsche Bank for $2-bn offering

State Bank of India (SBI), the country’s largest lender by assets, picked Bank of America Corp and Deutsche Bank AG to arrange a share sale that could raise about $2 billion, people with knowledge of the matter said.
The lender also chose IIFL Holdings, Kotak Mahindra Bank, JM Financial and SBI Capital Markets to work on the offering, according to the people, who asked not to be identified because the information is private. SBI aims to start the share sale as soon as next month, the people said.
SBI, whose origins date back more than two centuries, is seeking capital to bolster loan growth after reporting fourth-quarter profit more than doubled. The offering comes as the Indian banking system battles a soured-debt ratio that’s surged to the highest level since at least 2001.

SBI, state bank, state bank of India, bank“There would be good demand for SBI’s share sale, as it is the best story among state-run banks in the country,” Hatim Broachwala, a Mumbai-based analyst at Nirmal Bang Institutional Equities, said by phone Friday. “Its strong network, loan and deposit franchise, quality of management and comfortable valuations make it the best-placed lender among government-controlled banks in India.”
Any deal would add to the $5.9 billion of new equity offerings in India over the past 12 months, according to data compiled by Bloomberg. The board of SBI in March approved fundraising of as much as Rs15,000 crore ($2.3 billion) through methods including an institutional share sale, rights offering and depositary receipt sale.
SBI hasn’t finalised the exact timing and size of any offering, the people said. Representatives for SBI, IIFL and Kotak Mahindra Bank declined to comment, while representatives for Bank of America, Deutsche Bank and JM Financial didn’t immediately answer phone calls seeking comment.

Bank of Baroda swings back to profit in Q4 at Rs 155 cr

Indian state-run Bank of Baroda on Thursday reported a fourth-quarter net profit of Rs 155 crore ($23.89 million).

The Mumbai-based bank, the fifth-biggest in the country by assets, had reported a net loss of Rs 3,230 crore in the year-ago quarter.

Bank of Baroda headquarters in MumbaiAnalysts, on average, had expected the bank to report a net profit of Rs 516 crore in the three months to March 31, according to Thomson Reuters data.

Gross bad loans as a percentage of total loans declined to 10.46 per cent at end-March from 11.40 per cent in December. Gross bad loans on an absolute basis was although higher at Rs 42,719 crore compared with Rs 42,642 crore in December.

Ahead of the results, shares in Bank of Baroda closed 2.24 per cent lower in a broader Mumbai market per cent that fell about 1 per cent.

Axis Bank cuts home loan rates by 0.30%

Axis Bank has lowered its rate for a home loan under Rs 30 lakh by 30 basis points (bps) to 8.35 per cent for the salaried and to 8.4 per cent for the self-employed.
A loan under Rs 30 lakh comes under the definition of affordable housing, where borrowers get a subsidy of Rs 2.67 lakh a year.
The private lender’s move is in response to State Bank of India (SBI) cutting its rates by 25 bps to 8.35 per cent early this month.

Axis Bank cuts home loan rates by 0.30%SBI’s move was followed by ICICI Bank and HDFC; they cut to match its revised rate but only for salaried women; their rate is 8.4 per cent for salaried males.  With around 26 per cent market share, SBI is the biggest in the home loan segment.
Axis’ revised 8.35 per cent for the salaried does not differentiate between men and women.
“There is a large, genuine and mostly unmet need for affordable housing,” says Rajiv Anand, its executive director. Home loans were 44 per cent of Axis’ retail (to individuals) loan book of Rs 1,67,993 crore at end-March.