NHB mulls new scheme for weaker sections
Mumbai: National Housing Bank (NHB), mainly a refinancing agency, is working on a new scheme to provide direct assistance to homeless poor. The scheme is essentially aimed at helping economically weaker sections, who are not able to get loans from housing finance companies, a senior NHB official on Tuesday said. This would be a part of NHB's plan to intensify its direct lending. So far, NHB's direct lending confines to state housing boards and housing projects of public sector agencies. Meanwhile, NHB, a wholly-owned subsidiary of the Reserve Bank of India, plans to raise Rs 1,800 crore from the market in the current year. Part of it would be to argument the bank's tier-II capital. NHB has obtained a `AAA' rating from the credit rating agency CARE for its Rs 1,800-crore bond issue. This is the first time the bank has gone in for a credit rating, said the official.
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SBI Kerala circle loan disbursal to touch Rs 1,000 cr
Thiruvanathapuram: The Kerala circle of State Bank of India has targeted to disburse loans to the tune of Rs 1,000 crore in the current year. According to a break-up of the disbursement target provided by the circle office, industry and agriculture will be extended loans of Rs 200 crore each, while small-scale industries and small business enterprises will get Rs 150 crore and Rs 100 crore, respectively. Besides, housing and education sectors will be provided a total of Rs 350 crore. The circle has also targeted to install 100 new ATMs in the current year, apart from the 44 ATMs already in operation. The ATMs are networked across the country and with the ATMs of State Bank of Travancore, an associate of SBI. Plans are also afoot to open five specialised branches and six general branches in the circle. A commercial branch in Thiruvananthapuram is also on the agenda of the bank.
The Kerala circle of SBI, which came into being in November 2000 with an aggregate business of Rs 5,988 crore, has since been able to add another Rs 2,337 crore to its business. The figure was expected to cross Rs 10,000 crore soon, an SBI spokesman said. In 2002-03, the deposits of the circle stood at Rs 6,553 crore as against Rs 5,799 crore in the previous year.
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HDFC Bank bullish on corporate business
Mumbai: HDFC Bank aims to achieve a 15-20 per cent growth in the corporate banking sector by capitalising on two relatively new areas— supply chain management and agri-business. The bank has an over Rs 2,000 crore portfolio for its supply chain management business, through which it finances the suppliers and small- scale industrial units which provide components, raw materials or spare parts to large corporates, said Ashima Bhat, vice-president, head-supply chain management, HDFC Bank.
"We are bullish on the supply chain business where the bank has had zero NPAs, 18 months after venturing into the business. We finance a few thousand ancillary units of several large corporates such as Telco, Reliance, Mahindra & Mahindra amongst many others," said Samir Bhatia, country head, corporate banking, HDFC Bank. The bank gets an introduction to suppliers from the corporates, which are already customers of the bank. Loans in this segment are typically between Rs 1 lakh - 2 crore with tenors varying from 15 to 90 days and are rolled over on expiry, thereby remaining a permanent financing model for the suppliers, explained Bhatia. About 20 per cent of the Rs 2,000-crore portfolio consists of channel finance, where the bank offers finance to dealers towards distribution of a manufactured commodity. The bank has clients in varied sectors ranging from FMCGs, automobiles, pharma, petroleum and white goods. Another private-sector bank to go aggressive on channel financing is UTI Bank.
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State Bank plea to raise foreign pie still on hold
New Delhi: The government has yet to make up its mind on the State Bank of India (SBI) request for permission to raise its foreign holding level. Chairman AK Purwar said on the sidelines of a seminar on accounting organised here by the Controller General of Accounts and the World Bank that SBI had sought approval to raise its foreign stake level by around 8 per cent in order to improve its share value. It wanted that its global depository receipts (GDRs) totalling 7.89 per cent of its total shareholding be treated separately from its foreign holding of 20 per cent. “It is still under examination. The government takes its own time,” he remarked. In case the GDR proceeds are treated separately, then the bank’s foreign holding is slated to go up by 7.89 per cent. Purwar also expressed himself in favour of attaching a premium on bank capital being returned to the government, though SBI has no role in the ongoing developments, “if I put money in risk capital, I would like to have a risk-related return,” he commented.
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Icra doubts ARC effectiveness in tackling NPAs
New Delhi: Icra on Tuesday cautioned that asset reconstruction companies (ARCs) might not be effective in tackling non-performing assets (NPAs) and said a bank-based bad debt mode was preferable as the ARCs may have to deal with large amount of bad debts, which were difficult to restructure. “International experiences suggest that in dealing with old NPAs (non-performing assets), the success of ARCs has been supported by special circumstances, which a developing country (including India) is unlikely to have,” icra said in its latest review on money and finance. India should opt for decentralised creditor-led strategy and adopt policies to create an environment more conducive to such a strategy, it said, adding pre-conditions for successful bank-based restructuring were already there in the country. The recovery process was in for a drastic change with the Securitisation Act as banks were empowered to take stringent steps for fast and trouble-free recovery, Icra said. Expressing doubts on the efficiency of ARCs, it said though such entities were owned and funded by some commercial banks and govt was not involved directly, “this does not ensure that the management will be efficient.”
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Suspense over SBI lateral recruitments
Chennai: State Bank of India (SBI), country’s largest commercial bank, has taken a roundabout route for lateral recruitment. The bank, through its subsidiary SBI Capital Markets Ltd (SBI Caps), has recruited scores of MBA graduates from reputed management institutes like the Indian Institute of Management (IIM) and XLRI, Jamshedpur, to fill various key mid-management positions. Interestingly, the new recruits are being paid market linked-salaries, which is way above the compensation package given to its middle level managers now. The move also assumes significance as the bank brass is under pressure from different quarters, including the Central government, to come out with another ‘exit option’ to cut the flab further. The State bank of India had reduced its staff strength considerably by offering a voluntary retirement scheme (VRS) for its staff some time back. “SBI Caps has selected 20 MBAs from the institutes through campus interviews and deployed them at various branches across the country. The selected candidates, who are specialists in their respective fields, are undergoing training to understand the working of the bank,” sources said.
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Bajaj Allianz, BPL Mobile tie up for handset insurance
Pune: After banks, it is now the turn of mobile phone boutiques to sell insurance. Bajaj Allianz General Insurance Co Ltd and BPL Mobile have tied up to offer handset insurance against theft, loss or damage through the BPL Mobile distribution network. A personal accident insurance and hospital cash is also bundled with the handset insurance product. Deepak Verma, senior VP and COO, BPL Mobile, said this service would be available for BPL Mobile subscribers in Maharashtra and Goa circle and then be rolled out in Mumbai, Kerala and Tamil Nadu. This offer could also be made available to the other MobileFirst alliance members.
Kamesh Goyal, COO, Bajaj Allianz said he was looking at a five per cent penetration of the market. BPL has a base of two lakh subscribers in this circle. For Bajaj Allianz, this is also seen as a cheaper customer acquisition route especially in a segment where the insurance awareness was low.
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