CENTRAL BANK TO FORAY INTO INSURANCE BUSINESS

Central Bank of India has said it will take a decision in the current financial year to enter insurance business.

"We are looking to diversify into insurance, both life and non-life, and asset management businesses," the bank's Chairman and Managing Director S Sridhar told reporters during the inauguration of a branch in Murshidabad in West Bengal.

He said a decision to this effect would be taken during the current financial year.

He said the bank was poised to make the highest-ever profit during 2009-10. In the first nine months of the last fiscal, the total net profit stood at Rs 887 crore.

On capital requirements, he said that in March the bank had received Rs 450 crore as Tier I capital from the government.

"In the first quarter of 2010-11, another Rs 250 crore is expected," Sridhar said.

To a query, he said net interest margin of the bank would be under pressure and a credit offtake growth of 25 per cent in the current financial year is expected.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Central-Bank-to-foray-into-insurance-business/articleshow/5835908.cms

RBI TO RELEASE LIBERALISATION POLICY FOR FOREIGN BANKS BY SEPT

RBI has decided to review its policy for foreign banks by September this year, which has been delayed by over a year due to global financial meltdown. RBI will prepare a discussion paper on the mode of presence of foreign banks through branch or wholly- owned subsidiary (WOS) by September 2010.

In February 2005, the Reserve Bank had released the 'roadmap for presence of foreign banks in India' laying out a two-track and gradualist approach aimed at increasing the efficiency and stability of the banking sector in India.

The first track was the consolidation of the domestic banking system, both in the private and public sectors, and the second track was the gradual enhancement of foreign banks in a synchronised manner.

The roadmap was divided into two phases, the first phase spanning the period March 2005 - March 2009 and the second phase beginning after a review of the experience gained in the first phase.

In the first phase, foreign banks wishing to establish presence in India for the first time could either choose to operate through branch presence or set up a 100 per cent WOS.

Foreign banks already operating in India were also allowed to convert their existing branches to WOS while following the one-mode presence criterion.

The WOS was to be treated at par with the existing branches of foreign banks for branch expansion in India. No foreign bank, however, applied to establish itself as a WOS or to convert to a WOS during the first phase.

As per the World Trade Organisation agreement, India has committed 12 branches of foreign banks in a year. As of March 2008, about 31 foreign banks were operating in India.

Source: http://economictimes.indiatimes.com/news/economy/policy/RBI-to-release-liberalisation-policy-for-foreign-banks-by-Sept/articleshow/5836817.cms

RBI ASKS BANKS TO FOCUS ON CUSTOMER SERVICE

RBI asked banks to attend to the needs of small borrowers and devote exclusive time at board meetings, at least twice a year, to review and deliberate on customer service. 

The Reserve Bank and the banking ombudsman's offices have been receiving several complaints regarding levying of excessive interest rates and charges on certain loans and advances. RBI said that banks must address the special needs of disadvantaged groups such as pensioners and small borrowers, including farmers.

A committee is to be set up by RBI to look into banking services rendered to retail and small customers, including pensioners.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/RBI-asks-banks-to-focus-on-customer-service/articleshow/5836853.cms

RBI NORMS ON BANKERS' PAY BY JUNE

As per the announcement made in annual policy for 2010-11, RBI would come out with norms on salaries of CEOs of private and foreign banks by June end. The guidelines will cover effective governance of compensation, alignment of compensation with prudent risk taking and disclosures for whole time directors and CEOs as well as risk takers of banks.

Currently, the salaries of top executives in private and foreign banks are approved by the RBI, after the respective bank's board gives a go-ahead to the proposal.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/RBI-norms-on-bankers-pay-by-June/articleshow/5836587.cms

RBI GUIDELINES ON NEW BANKING LICENCES BY JULY END

RBI will come out with a discussion paper on new norms for granting banking licences to private sector companies and Non-Banking Financial Companies by July end. The discussion on new banking licences will be posted on the website of the RBI for public comments. Thereafter, detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback. All applications received in this regard would be referred to an external expert group for examination and recommendations to the Reserve Bank for granting licenses. 

The move follows the announcement made by Finance Minister Mr. Pranab Mukherjee in the Budget speech 2010-11 to give more banking licences.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/RBI-guidelines-on-new-banking-licences-by-July-end/articleshow/5836064.cms

DENA BANK SEEKS RS 1,300 CR FROM GOVT FOR CAPITAL REQUIREMENT

According to Mr. Ashok Dutta, Executive Director, Dena Bank has approached the Government for infusion of Rs 1,300 crore to meet capital requirement norms. The first tranche of around Rs 500 crore to Rs 600 crore was expected to arrive any moment.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Dena-Bank-seeks-Rs-1300-cr-from-govt-for-capital-requirement/articleshow/5835903.cms

SBI GROUP’S DEPOSITS SHARE DIPS TO 23.4%

The SBI group has seen its market share in bank deposits fall 100 basis points to 23.4% for the quarter ending December 2009 over the same period a year ago as a result of its efforts to reduce high-cost deposits. However, the group’s market share in credit rose marginally during the same period.

Data from RBI’s quarterly statistics on deposits and credit of scheduled commercial banks show that the SBI group now accounts for 23.8% of all bank lending, against 23.4% on December 2008. The market share of government-owned banks rose from 49% to 50.6%. Private banks’ share has come down from 18.7% to 17.8% during the same period. The market share of foreign banks and regional rural banks as on December 2009 stood at 5.3% (6.6%) and 2.5% (2.3%) respectively.

The market share of nationalized banks rose to 50.9% as on December 2009 from 48.3% a year ago. The market share of private banks also rose to 18.6% from 17.1% while the market share of foreign bank and rural regional banks stood at 5.5% and 3%, almost flat.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/SBI-groups-deposits-share-dips-to-234/articleshow/5834018.cms

AIBOC CIRCULAR NO. 47 DATED 20.04.2010

AIBOC issued its circular No. 47 on the appointment of Mr. Kaushik Ghosh as Officer-Director on the Board of Corporation Bank. We are reproducing the same here for our readers.
CIRCULAR NO.47                  20.04.2010 

TO ALL AFFILIATES/MEMBERS:

COM. KAUSHIK GHOSH NOMINATED AS OFFICER – DIRECTOR ON THE BOARD OF CORPORATION BANK

We have pleasure in advising that Com. Kaushik Ghosh, General Secretary of Corporation Bank Officers’ Federation, our affiliate, has been nominated as Officer-Director on the Board of Corporation Bank from 16^th April 2010, the date of notification, for a period of three years.  The text of relative notification is furnished overleaf.

We congratulate Com. Kaushik Ghosh on his induction into the Board of Corporation Bank and wish him all the best in his new assignment.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

(TO BE PUBLISHED IN PART II SECTION 3(ii) OF THE GAZETTEE OF INDIA)

F.NO.9/19/2009-BOI

Government of India

Ministry of Finance

Department of Financial Services

New Delhi, dated the 16^th April, 2010

Chaitra  26, 1932 (Saka)

NOTIFICATION

In exercise of the powers conferred by clause (f) of sub-section(3) of Section 9 of the Banking Companies (Acquistion & Transfer of Undertakings) Act,1970/1980 read with sub-clause (1) & (2) of clause 9 of the Nationalised Banks (Management & Miscelianeous Provisions) Scheme, 1970/1980, the Central Government after consultation with the Reserve Bank of India, hereby nominates Shri Kaushik Ghosh  (DOB:05.07.1955), Manager, Corporation Bank as Officer Employee Director on the Board of Directors of Corporation Bank for a period of three years from the date of notification or until he ceases to be an officer of the Corporation Bank or until further orders whichever is the earliest.

Sd/-

(Sumita Dawra)

Director

To The Manager,

Government of India Press,

Mayapuri Industrial Area,

Ring Road,

New Delhi

MONETARY POLICY MEASURES

RBI today announced its monetary policy statement 2010-11 and announced the following monetary measures.

i)                 The repo rate has been raised by 25 basis points from 5.0 per cent to 5.25 per cent with immediate effect.

ii)                The reverse repo rate has been raised by 25 basis points from 3.5 per cent to 3.75 per cent with immediate effect.

iii)              The cash reserve ratio (CRR) of scheduled banks has been raised by 25 basis points from 5.75 per cent to 6.0 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning April 24, 2010.

RBI has put the press statement of the Governor and also the full document at its web site. We are providing here the links for the same.

For Governor’s press statement: http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=22363

For Full Document:

http://rbi.org.in/scripts/NotificationUser.aspx?Id=5602&Mode=0

SHRI PRANAB MUKHERJEE, HON'BLE UNION FINANCE MINISTER INAUGURATED 3564TH BRANCH OF CENTRAL BANK OF INDIA AT MARGRAM, DIST. MURSHIDABAD IN WEST BENGAL.

Shri Pranab Mukherjee, Hon'ble Union Finance Minister inaugurated Central Bank of India's 3564th Branch on 18th April 2010 at Margram, District Murshidabad in West Bengal. During the inaugural function the Finance Minister distributed various schemes loan sanctions and Kisan Credit Cards etc. to the needy beneficiaries.

Dedicating the Bank's Branch, Union Finance Minister said that Margram is a developing area and a long pending demand of the people of Margram for a Bank's Branch is fulfilled due to CMD, Mr. Sridhar's spontaneous agreeing and opening Bank's Branch at Margram.

Taking over charge as Union Finance Minister last year, his immediate priority was to arrest the declining trend of GDP of 5.8% and due to Government providing two financial packages of Rs.80,000 crores coupled with reduction in import & export duty, increase in allocation for Agriculture arrested the downward trend which has now increased to 7.2% and he expects GDP to touch 8.5% by 2011.

He further stated that in G-20 meeting when he was asked about the Govt. financial support given to Indian Banks, he was proud that Indian Banks are self sufficient, standing on strong financial footings and do not require any support from Government. Even during the global recession the Indian Banks survived because they did not take speculative risks.

He stressed for the inclusive growth through Primary Education, Sarba Siksha Abhijan, Midday Meals, 100 days work, Financial Inclusion for overall economic development of the country and praised the role played by Indian Banks, especially Central Bank's sanctioning loans of Rs.3.02 crores for various rural activities to the villagers of Margram.

The Minister appreciated the present leadership of the Bank for their firm commitment for serving rural masses reflected by opening a rural branch in such a remote unbanked area instantly.

Earlier, on the occasion the CMD Sri. S. Sridhar said Central Bank, a Swadeshi Bank, entering it’s centenary year is the third biggest public sector bank and has crossed business of Rs.2,64,000 crores recording 23% growth and is expecting highest profit in Bank’s history for the year ended March 2010.

He welcomed the villagers of Margram to join 25 million Bank’s existing customers. He further stated that Bank firmly believes in fulfilling it’s social responsibilities, and has recorded 52% growth in MSME and completed 100% financial inclusion in over 13000 villages by opening over 31 lakhs no-frill accounts.

He added that the Bank is serving West Bengal through its 272 branches and Margram branch is third in Murshidabad district and the Bank will further increase its presence to serve more and more to the rural masses in this area.

Sri Ramnath Pradip, ED thanked Hon’ble Finance Minister for dedicating Margram branch to its people reiterating Bank’s firm commitment for comprehensive economic and social development of the area.

The function was also attended by Sri. Arun Kaul, Executive Director of the Bank, Sri. Adhir Ranjan Choudhury, MP, Sri Apurb Sarkar, MLA and Sri. P. Siddiqui, DM, Murshidabad.

Source: https://www.centralbankofindia.co.in/upload/news/PRR_Br_FM.pdf