Associate banks don’t need capital, says SBI

MD says SBI is comfortable in terms of capital and has no plans of raising funds as of now

                                                        

Mumbai: The five associate banks of State Bank of India (SBI) do not require any additional capital infusion this fiscal as the credit growth is tepid, a top official said.

  

He, however, added that the associate banks collectively need up to Rs.30,000 crore in capital over the next five years as they gear up for the higher capital Basel-III regime. “As of now, we are comfortable in terms of capital. No plans of raising funds as of now.

 There is no credit growth in the market,” State Bank of India (SBI) managing director (MD) and group executive for associates and subsidiaries V.G. Kannan told reporters in New Delhi over the weekend.

He said that the five associates—State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad and State Bank of Bikaner and Jaipur—collectively need up to Rs.30,000 crore in capital over the next five years as they gear up for the higher capital Basel-III regime.

However, Kannan declined to comment about old speculation that associate banks would be merged with the main parent bank SBI. He said that bond markets and money markets have factored in a rate cut from the Reserve Bank of India (RBI) already and are moving accordingly at present.

“There’s a lot of liquidity in the system and market feels that inflation has also appears to be benign. So bond markets have factored in an interest rate cut. Deposit rates are coming down. Rates on commercial papers have come down,” he said.

Source

Livemint .com

                      

By

Shah Mohammad Abdul Qadir

PGDM 3^rd Semester

IIMT College of Management

Greater Noida, U.P.

Reforms 2.0 set to take off in Winter session, hints FM 

 

Easier land buying rules, cut in govt’s stake in banks to 52%, higher FDI limit in insurance cos, GST rollout and disinvestment calendar on anvil

NEW DELHI: India is set to unveil a slew of reform measures in the coming weeks, including a proposal to amend the land buying rules, and a law to introduce the goods and services tax (GST) for a common national market.
Also on the anvil are plans to pare government’s equity in state-owned banks to 52% and a disinvestment agenda laying down the schedule to sell the Centre’s stake in public sector undertakings (PSUs).
Besides, the government is hopeful that it would be able to get the Insurance Bill passed in Parliament’s Winter Session, which begins on November 24, to raise the foreign direct investment cap in insurance companies from 26% to 49%.
Finance minister Arun Jaitley, tasked with the mandate to steer the economy out of a quartercentury slump, hinted on Sunday that the government was willing to walk the talk on some critical reform measures despite potential political opposition.
“Some changes may be necessary (to the Land Acquisition Act),” Jaitley said at a seminar organised by the IISS and Observer Research Foundation.
“We will first try to reach a consensus and if that is not possible we will go ahead and take the decision,” he said.
Many analysts have cited highly-restrictive conditions in the land acquisition legislation that the UPA government enacted last year as a major barrier for the industry to buy land.
Time and cost overruns have been a major bane for India’s infrastructure projects. Many large proposals are stymied by ambiguous titles of ownership, environmental issues, poor compensation and social concerns.

Jaitley also indicated that the plans to introduce GST, India’s biggest tax reform initiative, has entered the final leg with the Centre holding final round of negotiations with the states to iron out the thorny issues.
If adopted, GST can alter tax administration by giving a oneshot solution by subsuming a string of central and local levies such as excise, value-added tax and octroi into a single unified tax and stitching together a common national market.
The Centre is planning to introduce the Constitution Amendment Bill in the Winter Session of Parliament, which will likely lay out the roadmap for the system’s rollout.
GST’s implementation has faced political hurdles as state governments fear it could rob them of fiscal powers.
“Economy was and is in a challenging situation and one of the principal challenges before us is to restore the confidence, to expand economic activity and move towards increasing the growth rate,” he said.

In September, the government had approved share-sale plans in three major state-owned companies —Coal India Ltd, NHPC and ONGC — that can earn the exchequer 44,000 crore.
Revenues from selling shares in PSUs is critical to the government’s plans to keep the fiscal deficit — the amount of money the government borrows to fund its expenses — at 4.1% of GDP in 2014-15.
Over the last five months, the Narendra Modi-led government has unveiled string of measures including lifting of state controls on pricing of diesel, plans to put up coal mines for bidding and as also a signature initiative ‘Make in India’ to turn India into a manufacturing powerhouse, remove bureaucratic sloth, make the country more investor-friendly and aid its economic recovery.
NAME-RAJ GAURAV
             PGDM 3SEM

Home loan transfer: 5 things to note

Many may seek a home loan transfer to benefit from lower interest rates. Given that most banks in India currently offer home loans at an average interest rate of 10.25 % (floating rate of interest), anyone paying more than this amount and still having 12 to 13 years outstanding on the loan should definitely consider a transfer.

However, the reality may be a little more complex. Every time the rate of interest falls, homeowners can’t leap for a loan transfer.
Here are some things to know before planning to transfer a home loan or getting it refinanced:
1. Transfer to another bank Vs negotiation existing bank:
Many people complain that banks are quick at hiking interest rates (floating), but seldom inclined to reduce them when the rates soften. Banks may not always allow new borrowers – who are about 3-4 years into the bank tenure – to reap benefits from lower rate of interest or agree upon negotiating other loan terms. However, if you have a good credit history and the ability to pay EMIs (Equated Monthly Installments) on time, you can make the most of it and approach another bank for home loan refinancing.
2. Know the rate of interest:
Before transfer, you should carefully research about the rate of interest being offered by different banks. The rates are readily available on bank websites. This can help you identify the best deal. Some financial experts prefer that there should be a difference of at least 175 base points or 1.75% for a deal to be good. Others hold the opinion that since the home loan is a long term debt, even a difference of 0.5% will be beneficial in the long run.
3. Fees and penalties:
In recent times, many banks like ICICI and State Bank of India have completely waived off any penalty on loan transfers, but some banks still charge borrowers who want to discontinue with their services. This is called pre-payment penalty. Banks typically charge around 2% penalty on the outstanding loan balance. This amount could turn out to be significant in case of a huge balance. Borrowers also have an option to get this amount financed by the new bank.
In addition, the new bank will also charge a processing fee for its refinancing services. Most banks and house financing companies charge 0.5% of the loan amount as processing fee. Some of them may charge a flat fee, which is usually restricted up to Rs 5,000.
4. Cost-benefit analysis:
Loan transfer will only make sense if the net savings over the entire tenure of the loan are greater (and more significant) than the expenses incurred in a transfer. Put simply, a transfer is beneficial when the net savings on outgoing interest is more than the total penalty and processing fee.
5. Right time for a shift:
Every EMI payment you make has an interest and a principal component. This means, part of the money is the interest, while the remaining is to repay the principal sum the bank loaned to you. As a thumb rule, in the beginning of the loan term, borrowers pay a higher amount towards interest payment; towards the end, they pay higher towards the principal repayment. This is why, it is better when you switch the loan during its initial years.

Pradeep Shukla

PGDM 3sem 

Comment- when we take home loan than we care of this five stap if thay care all five stap our investment will be good.

How much will ATM transactions cost now?


The Reserve Bank of India (RBI) has put in place a regulation because of which you will be charged for the excess number of transactions at even own-bank automated teller machines (ATMs). From 1 November, banks have been allowed to charge if you transact more than five times a month at your own bank’s ATM. The restriction on own-bank free transactions is applicable throughout the country. Also, only three transactions will be free at other bank’s ATMs, compared with five earlier. But this limit is applicable only in six metro cities—Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. It doesn’t necessarily have to be money withdrawal. Even non-financial instructions such as balance enquiry, chequebook request and mini-statement request will be included in this limit. For non-metro users, the number of free transactions at other bank ATM will remain five. Some banks, however, continue to allow free transactions, for a limited period. What it will cost Many banks have either adopted the change or are in the process of doing so. Some have set conditions. From 1 November, State Bank of India, for example, has set a monthly limit on the number of free financial and non-financial ATM transactions. The bank has linked monthly balance with ATM charges. If your average monthly balance is over Rs.1 lakh, there is no limit. If it’s up to Rs.25,000 in the savings account, you will have only five free transactions at your own-bank ATM and three free transactions at other-bank ATMs in a metro city. Charges are Rs.5-20 per financial transaction and Rs.5-8 for non-financial ones depending on the type of account. Free ATM service for basic savings bank deposit account holders will continue. The bank also stated that it will allow one-way inter-changeability between branch transaction and ATM transaction. For instance, a customer will be allowed nine free transactions at own-bank ATMs if she does not visit the branch at all during a month or eight free ATM transactions if she visits the branch once, and so on. Canara Bank has stated that it is not charging for transactions at own-bank ATMs. But more than three transactions at other-bank ATMs in the six metros and beyond five in other places are chargeable—Rs.15 for every financial transaction and Rs.5 for every non-financial one. Service tax will also be applicable. In the private banking space, banks will bring in the revised charges from 1 December. HDFC Bank Ltd has stated on its website that effective 1 December, savings and salary account customers will be allowed first five transactions free across all cities at own-bank ATMs. In the six metros, first three transactions will be free at the non-HDFC Bank ATMs. In non-metros, first five transactions will be free. Anything over this limit will be charged. For instance, cash withdrawal will be charged Rs.20 plus taxes per transaction and Rs.8.5 plus taxes per non-financial transaction. But for some accounts, such as basic savings bank deposit account, the limit is five at other-bank ATMs. Axis Bank Ltd, has stated on its website: “We have revised the number of free ATM transactions, which will be applicable with effect from 1 December. The transaction limits have been revised taking into account the high cost of operation and maintenance of our growing ATM network.” The new limits will be based on ATM usage patterns. For most of its savings accounts, the bank will follow the new RBI guidelines. It will charge Rs.20 per financial transaction and Rs.9.55 including tax for every non-financial one beyond the free limit. For some accounts, such as priority or defence personnel’s salary account, ATM transactions will remain free. Some are still free If you are with a smaller bank, chances are that you will continue to get free ATM service. Banks such as Yes Bank Ltd and Federal Bank Ltd have decided to continue giving free ATM services. “As of now, we give free transactions to our customers on own-bank as well as other-bank ATMs. In the foreseeable future we don’t want to charge. We are in a sweet spot where our base is not big. Some banks have 20-30 million customers; we have only crossed a million. So, business prudence says that we don’t create negativity by charging customers. Till we scale to a certain level, we will keep ATM transactions free,” said Pralay Mondal, senior group president (retail and business banking), Yes Bank. Thrissur-based Federal Bank Ltd also offers free ATM transactions for all its customers at other-bank ATMs too. “RBI has come up with these regulations as banks are facing huge expenses in managing ATMs, considering the improved security features that have been implemented. At present, we are not charging our customers for using our own ATM. For some time, we are allowing our customers outside Kerala to use other-bank ATMs for free for convenience. Also, we hope to migrate more customers to alternate digital channels,” said A. Surendran, head–retail and international banking, Federal Bank. Kotak Mahindra Bank, too, has decided not to revise charges. “We want to provide reach to our bank customers. As of now, there will be no change for them,” said Puneet Kapoor, executive vice-president (consumer banking) at the bank. What you should do With costs going up, it’s time to alter your ATM transaction behaviour. But before that, find out details from your bank. Though the RBI regulation is in place, banks still have the right to decide whether they want to charge their customers. As per the regulations, it is mandatory for banks to intimate their customers about any changes in service charges and fees. This means it is time to pay more attention to e-mails and SMSs from your bank. You can also visit the bank’s website to know the charges since it is mandatory for every bank to publish the changed service charges. For an individual, a total of 8-10 free transactions is good enough. To avoid paying for using an ATM, use Internet or mobile banking for non-financial transaction such as checking mini-statements and balance enquiries. All these services are free of cost on the website. Some banks also provide missed call service for balance enquiry, free of charge. For shopping, it may be better to use a debit card instead of cash. But do remember that some outlets charge an additional 1-2% of the total amount if you pay by card, and, of course, many smaller shops don’t accept cards at.


md.aquil alam 
3rd semester pgdm 
source. live mint 

5 crore Jan Dhan accounts outside Rs 1 lakh accident insurance ambit 

 

NEW DELHI: Five crore of the seven crore bank accounts opened under the government's flagship financial inclusion programme, Pradhan Mantri Jan Dhan Yojana (PMJDY), have fallen outside the ambit of the in-built Rs 1 lakh accident insurance cover as these accounts have seen no transaction since they were opened.

Bankers and insurance industry executives say rules require at least one transaction in the account in the preceding 45 days for an account holder to be eligible for the insuran ..

PMJDY, which was launched by Prime Minister Narendra Modi on August 28, seeks to cover 7.5 crore un-banked households in the country in the first phase. It provides Rs 5,000 overdraft facility for Aadhar-linked accounts and RuPay debit card, besides a Rs 1 lakh accident insurance cover "If an account holder meets with an accident during the 45 days when there has been no transaction in his account, he is not entitled to the insurance cover," said a senior executive with state-run Vijaya Bank ..

Comment;- the seven crore accounts opened under the scheme, only 1.71 crore accounts have seen transactions while the rest have had zero balance since they were opened, which means there have been no transactions in these accounts.

Name- Anand kumar maurya

pgdm-3sem

5 crore Jan Dhan accounts outside Rs 1 lakh accident insurance ambit

Read more at:
http://economictimes.indiatimes.com/articleshow/45092865.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

5 crore Jan Dhan accounts outside Rs 1 lakh accident insurance ambit

Read more at:
http://economictimes.indiatimes.com/articleshow/45092865.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Union Bank slashes interest for medium companies by up to 3.75 per cent

 

MUMBAI: State-run lender Union Bank of IndiaBSE -1.75 % today reduced interest rates for medium enterprises in the range of 200-375 basis points.

The revision will also give fillip to Prime Minister Narendra Modi's 'Make in India' campaign, a bank release said.

The government's ambitious campaign, launched in September, is aimed at making the country a global manufacturing hub.

"The revised interest rate for borrowers from investment-grade medium enterprises is in the range of 12.25-13.75 per cent," the bank said.

The new rates are effective from November 3. The city-based bank had reported a 78 per cent spike in its net at Rs 371 crore in the September quarter. The sharp increase in the profit was on account of lower provisioning and a Rs 140 crore income tax write-back.

Provisions during the quarter stood at Rs 785.41 crore as against Rs 936.75 crore in the same period last year. Its domestic advances rose 9.4 per cent to Rs 2,26,011 crore from Rs 2,06,690 crore year ago.

Chairman and managing director Arun Tiwari has attributed the good set of numbers to loan growth in retail, agriculture and MSME sectors. 

Comment---- Union Bank of IndiaBSE -1.75 % today reduced interest rates for medium enterprises in the range of 200-375 basis points. Union Bank of IndiaBSE -1.75 % today reduced interest rates for medium enterprises in the range of 200-375 basis points. 

anand maurya

pgdm-3sem

Google challenges Amazon with new price cuts for cloud tools

San Francisco: Google Inc. unveiled price cuts for its cloud-based computing services, as the company seeks to attract business customers from Amazon.com Inc. and other rivals. The Mountain View, California-based company is reducing the cost of some features, including some storage, database and networking options, by 23% to 79%, it said today at Google Cloud Platform Live, a conference for developers in San Francisco.

Amazon, Google and Microsoft Corp. have been lowering prices for Web-based services this year as they compete for customers in a market that was worth more than $45 billion last year, according to researcher IDC. 

 

Google last month said it was cutting prices by about 10% on some of its cloud products. The reductions were driven by declining hardware costs and greater efficiency at the search provider’s data centres, the company said0

“We’re going to do everything we can to unburden you,” Brian Stevens, Google vice president of product management, said at the event. “We’ll continue to drive greater efficiencies and pass that cost savings on to you.”

Google also unveiled updates to other parts of its lineup, including new networking options for quickly accessing its cloud and a new service that uses a technology called containers, which give developers more flexibility as they build and ship applications.

This is the company’s third major cloud-services conference this year, underscoring the investment Google is making in the market. Last month, Google acquired Firebase Inc., a provider of software tools, to help build a better platform for developing mobile applications.

Source :Bloomberg

Shah Mohammad Abdul Qadir

PGDM 3^rd Sem

IIMT college of Management.

Greater Noida, U.P.