Indian Banks

The Reserve Bank of India (RBI) has imposed an Rs 25-lakh fine on Jaipur-based private sector lender Bank of Rajasthan (BoR) for violating regulations on five counts.

The central bank has faulted the bank on various grounds, including violating RBI directions on acquisition of immovable property, deletion of records in the bank’s IT system, non-adherence to know-your-customer (KYC) and anti-money laundering (AML) norms, irregularities in the conduct of accounts for certain corporate groups and the bank’s failure to provide certain documents to RBI and misrepresenting that these documents were not available.

The central bank had issued a show-cause notice to the bank. After reviewing replies, it came to the conclusion that the violations were substantial which warranted an imposition of penalty.

G Padmanabhan, the RBI-appointed chief executive of BoR, said the issues pertained to corporate governance concerns for the period 2004-07.

In view of these concerns, the central bank appointed a chief executive, placed two RBI officers along with two independent directors (as RBI nominee) on the bank’s board.

The bank has reviewed the business model of the bank and has decided to put special emphasis on the retail segment instead of the earlier emphasis on large-ticket loans.

The bank had a network of 466 branches which was not being leveraged, Padmanabhan said. After making amends to the business practices, the bank’s exposure to the real estate segment is now within norms.

On the recent Icra downgrade of its Tier-II bonds, he explained that it was partly due to not making provisions for wage revisions, as was the case with most other banks. “Now our liability has crystalised and we have to make provision for wage revision,” he said.

The rating agency has downgraded the bank’s Rs 220-crore Lower Tier-II Bonds from LA- to LBBB+. It also downgraded the LBBB+ rating assigned to the Rs 62-crore Upper Tier-II bonds to LBBB. The long-term ratings continue with a negative outlook.

The rating downgrades reflect deterioration in the quality of the lender’s advances portfolio, which reported a higher-than-expected restructuring, its relatively higher exposure to sensitive sector such as real estate and textile and low net profitability over the last few quarters.

With a provision of Rs 38 crore for non-performing assets, the private bank reported a net loss before tax of Rs 67 crore in the third quarter as against a profit of Rs 74 crore in the previous comparable quarter.

(BS)

Popularity: 2% [?]

The UK-based financial services giant, Royal Bank of Scotland group (RBS), reduced the size of its India asset book by more than a third in 2009.

The beleaguered bank, which is 84 per cent owned by the UK government, has reduced its risk assets in India from 5.56 billion pounds (Rs 39,328 crore) at the end of 2008 to 3.60 billion pounds (Rs 25,458 crore) in 2009.

The sharpest fall was seen in personal assets, which fell from 1.02 billion pounds to 547 million pounds as of December 31, 2009.

Corporate risk assets also fell from 2.58 billion pounds to 3.8 billion pounds at the end of 2009.

As part of its recast, the bank has divided its global businesses into a core group, which the bank plans to retain and the for-sale non-core division. In India, the global banking and markets (GBM) and global transaction services (GBS) divisions are part of the core group while consumer banking and commercial banking businesses are part of the non-core group.

RBS’ core assets in India totaled 2.89 billion pounds while non-core assets were 719 million pounds at the end of 2009. While profit figures for India operations were not revealed, the group reported a net loss of 3.6 billion pounds for 2009, a significant improvement over the 24 billion pounds loss reported in 2008.

The lender has been scouting for buyers for its retail and SME divisions in India, China and Malayasia. Till October last year, Standard Chartered Bank was the front-runner for the businesses but the talks fell through due to disagreements on valuations and lack of clarity on the fate of the branch licences. HSBC is now reported to be one of the contenders for the sale.

The bank recently completed the re-branding of its India operations to RBS from its earlier avatar as ABN Amro Bank. ABN Amro Bank’s profits for the fiscal year ended March 31 in India had dropped 93.09 per cent to Rs 19.39 crore.

The bank had written off debt worth Rs 962 crore in financial year 2009, an almost three-fold increase from previous year’s Rs360 crore. The lender’s consumer banking operations posted an operating loss of Rs230.77 crore at the end of March 2009.

(BS)

Popularity: 1% [?]

A five-member jury selects him for Axis Bank’s sterling performance in 2008-09.

P J Nayak, former chairman and CEO of Axis Bank, is the Business Standard Banker of the Year for 2009. Nayak was the unanimous choice of a five-member jury led by H N Sinor, former CEO of the Indian Banks’ Association.

Though it’s almost nine months now that Nayak has stepped down from Axis, the jury felt he richly deserved the award for the bank’s stupendous performance in 2008-09 when he was in charge. The jury also said one of the key factors for judging the success of a CEO should be how the organisation fared even after he left.

By the time he resigned, the retail assets of India’s third largest private bank accounted for 20 per cent of the total portfolio, while the share of current and savings account balances in total deposits had risen to over 43 per cent.

During his nine-year stint at Axis, the bank outperformed its peers by posting a 48.75 per cent compounded annual growth rate for net profit. Return on assets, too, improved significantly from 0.77 per cent in March 2000 to 1.44 per cent in March 2009.

Apart from Sinor, the other members of the jury were Aditya Birla Financial Services CEO Ajay Srinivasan, J P Morgan India Chief Economist Jahangir Aziz, Mahindra & Mahindra Chief Financial Officer Bharat Doshi and Tata Consultancy Services CFO S Mahalingam.

What is the key to the success of this bureaucrat-turned banker who holds a Master’s Degree in Economics and a Doctorate from Cambridge? Nayak himself provides the answer. In an interview with Business Standard, the details of which has been published in the Banking Annual being distributed with today’s edition, Nayak said, “Banking is not rocket science. You need customer-empathetic people with a commonsensical head on their shoulders”.

That’s the reason Nayak stuck to the basics of banking even when others were lending aggressively. He followed a system of scoring sheets to assess credit-worthiness instead of granting credit cards and personal loans in large numbers. The bank also stayed away from businesses such as two-wheeler loans and small-ticket personal loans, fearing defaults.

The Banking Annual also covers a round-table discussion involving the CEOs of seven leading banks on the topic: “Life after the Crisis”. The panelists were State Bank of India Chairman O P Bhatt, ICICI Bank MD & CEO Chanda Kochhar, Axis Bank MD & CEO Shikha Sharma, Union Bank of India Chairman M V Nair, HSBC India CEO Stuart Davis, Standard Chartered CEO Neeraj Swarup and Citibank India CEO Mark Robinson.

The consensus was that 2010 will be a challenging year when managing liquidity is going to be a big issue in a volatile market. But the opportunities are also limitless because this year is expected to see growth in investment as well as consumption.

(BS)

Popularity: 1% [?]

The country’s largest private sector lender, ICICI Bank, today raised deposit rates by 25-50 basis points (bps), a week after HDFC Bank raised rates for long-term maturities by 25-150 bps. The rate for the 390-day bracket went up from 6.5 to 6.75 per cent, and from 6.25 to 6.75 per cent for 590 days.

The revised rates are effective from today. The banks to have increased interest rates so far are J&K Bank and IDBI Bank apart from HDFC Bank. ICICI Bank and Union Bank had increased rates for one maturity each at the beginning of 2010.

A spokesperson of ICICI Bank said, “ICICI Bank monitors rates on a continuous basis and this revision for a few select fixed-deposit bracket is based on current market conditions.”

(BS)

Popularity: 5% [?]

Public sector banking industry in India continues to hire. Bank of Baroda (BoB) will recruit 3,500 people including officers during the current financial year (2009-10). This will include 2,000 clerks and 1,000 probationary officers.

The bank will also conduct campus hiring at institutes like IIMs and IITs. As many as 200 management students and engineers are planned to hired during the year. In addition to this, the bank will recruit 250 agriculture officers.

Vacancies : 1200 posts (UR-600, SC-183, ST-91, OBC-326) 36-posts are reserved for PWD.
Age Limit : 21 to 30 Years
Pay Scale : (JMG-I) Rs.10000-18240/-
Qualification : Degree in any discipline from a recognized University OR Any equivalent qualification recognized by Central Government. Should be computer literate (Proficient in MS-office, basic applications, internet usage.etc)

Important Dates :

Online Application Open From 15.03.2010 To 10.04.2010
Written Test : 30.05.2010
Payment of fees at BOB Branches From 15.03.2010 To 10.04.2010

Application Fee :

* For SC/ST/PWD candidates : Rs. 50/- (towards postage charges only)
* For all others : Rs.300/- (including postage charges of Rs.50/-)

Click here For more Details

Popularity: 2% [?]

Andhra Pradesh Grameena Vikas Bank

Head Office : Warangal

Recruitment of Office Assistants – 2010

Important Points to remember before making online applications:

a) Please read the Recruitment Notification carefully before making online application. The candidates can click on the following Link to access the Notification document. A print out also can be taken, if they wish.

Notification for recruitment of Office Assistants – 2010

b) The applications are accepted online only. Manual applications i.e., applications printed on white sheet are not allowed / accepted. A link is given below, which, when clicked, will direct the candidate to IBPS website for filling up the online application electronically.

c) Before accessing the online application, the candidates should be ready with the following: (This is a repetition of what is given in notification, for ready reference by the candidates.

a. Payment of applicable fees:

i. Candidates presently residing in our area of operation i.e., the districts of Srikakulam, Vizianagaram, Visakhapatnam, Khammam, Nalgonda, Mahabubnagar, Sangareddy and Warangal, should pay the fees in any of the Branches of Andhra Pradesh Grameena Vikas Bank (APGVB).

ii. Candidates from all other places can pay the fees in any State Bank of India Branches.

iii. There are separate challan forms for payment in APGVB Branches and SBI Branches, which the candidates should download and take printout by clicking on the respective links given below:

In challan forms, the Branch code and name have to be filled up. List of APGVB Branch with codes are given in the Link. In respect of SBI, candidates have to find out the code from the branches, where candidates wish to make payment.

APGVB Challan APGVB Branch Codes SBI Challan

b. The payment of applicable fees should be made before attempting to fill the online application electronically.

c. Candidates are also advised to keep the following information ready before accessing the online application, so as to complete submission of online application within the stipulated period of not exceeding five minutes:

i. The candidate’s copy of the Paid Challan which contains Journal number etc.

ii. Email address of the candidate

iii. Basic details of the candidate

iv. Examination Centre and its code

v. Details of educational qualifications.

d. The notification document contains all details including “How to apply”.

Click here to Apply Online

Click here for FAQ

Andhra Pradesh Grameena Vikas Bank

2-5-8/1, Near Ambedkar Statue, Ramnagar, Hanamkonda – 506 001, Warangal Dist, A.P

Popularity: 2% [?]

The country’s largest lender, State Bank of India (SBI), is looking to acquire a significant stake in Tata Motors Finance (TMFL), the vehicle financing arm of Tata Motors, the largest automobile company in the country.

“Our investment committee would like the bank to take part in the deal and invest some amount (in Tata Motors Finance),” said SBI Chairman OP Bhatt at the sidelines of a seminar without deliberating on the size of the deal.

The bank, however, will not be the majority shareholder. “It will not be small, it will be significant, but not a majority stake,” Bhatt said.

In 2008, SBI had acquired a 91 per cent stake in Global Trade Finance (GTFL), a factoring services company. The promoters of GTFL were Export-Import Bank of India, International Finance Corporation, Washington, and Malta-based FIM Bank.

The deal would enable SBI to gain presence in the commercial vehicle segment, Bhatt said. TMFL, on the other hand, will have access to cheaper money.

“We see a lot of synergy for us. Synergy in terms of business… the commercial vehicle segment, the bus and trucks businesses,” he said. After receiving clearance from its board, the bank will approach the Reserve Bank of India for approval.

The lender, which controls around 15 per cent of the auto loan market, has bcome aggressive in the segment in the last few years. In 2009, in order to make auto loans more attractive, SBI launched a scheme at an interest rate of 8 per cent for the first year. As on December 31, the bank’s auto loan disbursements grew by 46.35 per cent on year to Rs 13,012 crore. TMFL, though experiencing improvement in margins, has witnessed its market share decline, which the company attributed to “active competition from domestic banks.” During the first nine months of the current financial year, TMFL disbursed loans worth Rs 4,446 crore, which is lower by 18 per cent over the same period of the previous year.

(BS)

Popularity: 3% [?]

State Bank of India (SBI) may go for a rights issue in the next financial and will start discussions with the government after the presentation of the Union Budget.

Talking to reporters at the sidelines of a seminar, Chairman OP Bhatt said, “We need some equity and we need it in the next financial year. Our rights issue can be successful, if the government subscribes to it.” Bhatt expects the government to give some indications regarding capital infusion in public sector banks in the Budget.

“There may be some announcements on whether the government wants to give money for bank capitalisation. Based on that, we will start discussions with the government after the Budget,” Bhatt said. The lender seeks to raise Rs 10,000-20,000 crore from the rights issue. Bhatt also said the bank needed to raise around Rs 40,000 crore in the next five years in addition to Tier-II capital and retained earnings.

Popularity: 3% [?]