Indian Banks

The regional office of Reserve Bank of India (RBI) at Thiruvananthapuram conducted special outreach programmes in 11 villages of Kerala and at 1 village in Union Territory of Lakshadweep.

The programme envisages the development of identified villages as model villages in terms of availability of banking facilities and services through a variety of channels such as bank branches, satellite branches, mobile banking, and business correspondent-cum-biometric card model.

Special focus was placed on delivery of banking services with the application of information and communication technology (ICT) solutions through the banking correspondent-cum-biometric card model to maximise outreach of the banking facilities.

The programmes were conducted at Chellanam (Ernakulam district), Muthukulam (Alappuzha), Akathethara (Palakkad), Vallikkunnu (Malappuram), Minicoy (Lakshadweep), Krishnagiri (Wayanad), Pavoor (Kasaragod), Vimalagiri (Idukki), Kareepra (Kollam), Vellarvalli (Kannur), Perumanna (Kozhikode) and Thonoorkara (Thrissur).

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Popularity: 1% [?]

Past may be no prologue for Treasury investors when Federal Reserve policy makers begin to withdraw their unprecedented monetary stimulus without raising interest rates.

For the first time since at least 1980, a change in monetary policy may mean the difference between short- and long-term Treasury yields will widen rather than narrow.

The threat of the Fed selling the $2.29 trillion in securities on its balance sheet, combined with record Treasury auctions, will keep longer-term yields higher, according to Deutsche Bank AG, one of 18 primary dealers that trade directly with the central bank.

A so-called steeper yield curve would boost borrowing costs for companies and home buyers while attracting money managers deterred by record-low rates. President Barack Obama needs to lure investors more than ever as Treasury extends average debt maturities and finances a budget deficit that the government predicts will expand to an unprecedented $1.6 trillion in the fiscal year ending September 30. “The policy for the Fed to keep rates low for an extended period of time will keep front-end rates lower for longer,” said James Caron, head of US interest-rate strategy in New York at Morgan Stanley, another primary dealer.

“The weight of supply and the risk premiums for inflation may rise as the Fed keeps rates low, that will increase the term premium on the curve and the 10-year note yield will rise to reflect that.” The yield curve, or the gap between two and 10-year Treasury note rates, widened to a record 2.94 percentage points on February 18, before narrowing to 2.80 percentage points on February 26. Yields on two-year notes fell 10 basis points to 0.81 percent last week.

Those on 10-year securities dropped 16 basis points to 3.61 percent even after the government sold a record $126 billion in notes and bonds.

The 10-year note yield advanced 2 basis points to 3.63 percent as of 8:40 a.m. in London, and the curve spread was little changed.

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Popularity: 1% [?]

The National Bank for Agriculture and Rural Development (Nabard) is seriously mulling a proposal to provide Credit Plus services through the Farmers’ Clubs. Nabard regional office chief general manager Venkatesh Tagat said North Karnataka offers ample scope for construction of rural godowns and the banks should hold talks with farmers and explore the possibility of godown construction especially in the chilly growing belt.

Addressing the farmers during an interaction session organised at Neeralakatti village in Dharwad taluk recently, he said refinance facility from Nabard would be available for the purpose with subsidy of up to 25 per cent of the project cost. Likewise, Nabard was also extending subsidy for units producing organic manure. Villages covered 100 per cent under solar energy units, would get a special package from Nabard, he revealed.

The CGM stated that Nabard was keenly watching the flow of credit to agriculture and rural development. “Monetary assistance alone is not the criterion for achieving true progress. It is essential to provide information and technology to the farmers,” he said and felt that concentration of lending activities to the crop loan segment was depriving investment credit to take off as envisaged. He called upon banks to give equal importance to advances under investment credit. Proper utilisation of loan amount, information on technological advancement, market trends, value addition are some of the topics that came up for discussion at the session.

The forum provided many answers to the queries raised by farmers.

Karnataka Vikas Grameena Bank chairman K P Muralidharan noted that many farmers are very innovative and that new ideas should be shared with others. “The Farmers Club is the most suitable medium for such exchange of ideas. KVGB has floated 516 Farmers Clubs in its area of operation. For dissemination of information, the bank plans to donate computers to three best clubs soon” he declared.

The Kannada edition of Leisa India, a magazine devoted to farm news in its entirety, was released on the day.

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Popularity: 2% [?]

ICICI Bank was the largest recruiter at the Indian Institute of Management, Ahmedabad (IIM-A) final placements’ third cluster today, with the number of its offers in double-digits.

The third cluster of the final recruitment process began last evening with group discussions and the interviews continued through the day on Sunday, a release from the institute stated. The cluster had companies in several cohorts such as Indian banking services, financial advisory services and credit rating agencies. Regular recruiters such as Icra, KPMG, Essar Group and Philips offered roles in finance, consulting, sales and marketing.

“The new process once again ensured smooth experience for both students and recruiters. Seamlessness prevailed despite a large number of recruiters visiting the campus this weekend. Recruiters are highly upbeat about their decision to hire at IIM-A. We hope the positive spell continues in subsequent clusters,” said Mansi Chitalia, media co-ordinator of the placement committee.

Cluster Two of final placements at IIM-A saw Indian investment banks, corporate leadership programmes and global FMCG (fast moving consumer goods) companies as prominent cohorts.

Deloitte made 10 offers (including lateral offers) for consulting roles. Tata Administrative Services and Feedback Ventures offered general management and consulting roles and hired six students each.

While other recruiters on campus during the second cluster were HUL, P&G, American Express, Standard Chartered and Nestle, Cluster One saw international investment banks and consulting agencies such as Boston Consulting Group and McKinsey & Co offer roles to students.

The new cohort-based placement process for the second year post-graduate programme (PGP) students, which began on February 13, will comprise companies that offer similar roles, profiles, salaries, locations, etc. The new process allowed recruiters to interact with students for a longer duration.

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Popularity: 4% [?]

The Reserve Bank of India (RBI) is likely to announce its draft guidelines on the compensation packages of private sector bank chiefs by next month, a move aimed at aligning the salary structures with business performance.

The indications are that the draft paper will be out by March. This would be aimed at putting a framework in the way banks compensate their CEOs and other top executives,” a source in the know said. In the mid-term policy review, RBI Governor D Subbarao had said the apex bank was working on the principles outlined in the Financial Stability Board for sound compensation and will come out with norms to ensure healthy practices in the compensation policies of private and foreign banks.

The Governor had highlighted the compensation practices, especially that of bigger financial institutions, as one among the factors that contributed to the recent global financial crisis.

In the G-20 meet last year, the leaders had expressed concerns over the high compensation packages of top bank executives, which, they argued was a not a positive sign in a healthy financial system. With a view to align the compensation with long-term value creation, the G-20 leaders had urged central banks to formulate compensation policies. However, each country will have to adopt its own norms.

The agreements reached in the G-20 summit discourage bonus guarantees extending more than one year. Besides, the bonuses should be linked to their individual contribution and performance in the organisation, it said.

“What the RBI is trying to do is to rationalise the remunerations of CEOs and other key employees in private and foreign banks, as they feel that it is important for the health of the individual firm and the system as a whole,” the source said.

Presently, the salaries of top executives in private and foreign sector banks are approved by the central bank after the individual bank’s board clears the proposals. Last year, the Reserve Bank had reportedly expressed its concerns on the compensation packages of at least three private sector banks, as they felt the structure was not in line with market standards.

(BS)