ADB, 23 housing finance firm get to use Securitisation Act
New Delhi: The Centre has sparked off fresh action under the Securitisation Act by allowing the Asian Development Bank (ADB) and housing finance companies (HFCs) to exercise powers provided under the legislation.In separate notifications issued on Monday, the ministry of finance said that the ADB and 23 HFCs would be allowed to tackle their loan defaulters under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SAFRAESI), commonly referred to as the Securitisation Act.

The move to broaden the ambit of legislation comes even as a petition challenging the very legality of the Act is pending before the Supreme Court involving Mardia Chemicals and ICICI Bank. It has been argued before the apex court that the law is heavily biased in favour of lenders.The Securitisation Act provides enormous powers to lenders to take possession and subsequently dispose of assets of chronic defaulters without the need of going through the cumbersome and time-consuming legal process under the civil laws."ADB can now act under the law to deal with defaulters of its loans as any other bank or financial institution can do," a senior official of the finance ministry said while confirming the issuance of the notifications.

On the housing finance front, the Government has stipulated that only those HFCs which are registered with the National Housing Bank (NHB) and having a minimum Tier-I capital of Rs 10 crore would be eligible for exercising the powers under the Act. The eligibility norm allows only 23 of the larger HFCs to be included under the Act.NHB officials said that though the net non-performing assets (NPAs) on housing loans would be in the region of 2-3 per cent of outstanding loans,the new powers accorded to the HFCs would further the bolster lending for housing purposes by the entities."Till now we were able to take possession of property only through the court process by obtaining the necessary decree. Now we would be able to act outside the court process. This would act as a further deterrent and allow lenders to provide loans more freely for housing purposes," a senior NHB official said.This is the second time that new entities have been allowed under the Act after cooperative banks being allowed to exercise the powers.
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SBT plans ATM at Sabarimala
Thiruvananthapuram: The State Bank of Travancore (SBT) will set up two special `pilgrim banking centres' and an ATM in the environs of the Sabarimala temple, says a press release from the bank.Dr N. Babu, the president of the Travancore Devaswom Board, will inaugurate the bank's ATM at Pamba on November 16, the release adds. This ATM will be linked to the bank's network and also to the countrywide network of the State Bank group, the release states.

The `pilgrim banking centres' will offer several facilities to pilgrims including the encashment of demand drafts issued either by the SBT or other banks of the State Bank group, issue of demand drafts on all branches of banks in the State Bank group, phone, fax and e-mail facilities and so on, the release adds. These centres will also offer pilgrims facilities for the safe custody of their money, says the release.
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State Bank slashes small loan rates
Mumbai: Taking a cue from the mid term credit policy of the Reserve Bank of India (RBI) announced last week, the largest commercial bank, State Bank of India (SBI) has reduced interest rates by 0.25 to one per cent for small scale industries (SSI), small businesses and agriculture. The rate for short-term loans between Rs 25,000 to Rs 50,000 up to one year for SSI and small businesses has been cut by one per cent to 8.75 per cent. The new rates are effective retrospectively from November 1. Loans between Rs two to Rs five lakh will be charged 10.5 per cent, down by 0.75 per cent.

However, the interest for the slab between Rs 50,000 to Rs two lakh remained unchanged at 9.75 per cent, it said. Similar benefit has been extended for loans above one year as well. SBI said the rates for agriculture sector loans has been reduced by 0.25 per cent for term loans between Rs 50,000 to Rs two lakh at 10 per cent while the cut is 0.5 per cent at 10.5 per cent for those between Rs two to Rs five lakh.
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StanChart offers special home loan rate
Mumbai: Standard Chartered Bank (StanChart) on Tuesday announced special rates for home loans across all tenures up to 20 years. The offer, valid from November 12 to November 30, 2003 will offer floating rate loan at 7.49 per cent and fixed loan at 7.75 per cent per annum.The home loan customers can also avail a bundle of insurance products such as home contents insurance, health insurance and personal accident insurance, said a press release.

"We are delighted to offer this special rate bundled with unique insurance benefits. Apart from competitive pricing and special offers we ensure speedy processing of the loan application, ease in documentation and flexible terms," the bank's general manager & head (Home Loans, Car Loans and Banking Strategy), MN Murali said. The offer is available in Mumbai, Delhi, Chennai, Kolkata, Pune, Bangalore, Hyderabad, Surat, Baroda, Coimbatore, Jaipur and Lucknow.
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Unions agree to IBA proposal for 100% computerisation
Kolkata: The Indian Banks' Association (IBA) has achieved a major breakthrough in its eighth bipartite wage negotiation with the unions which have unconditionally agreed to IBA's proposal for 100 per cent computerisation in all public sector commercial banks in the country.With the industry-wise agreement put in place, individual PSU banks will now go for similar bank-wise agreements with their respective unions. The country's biggest public sector commercial banks, State Bank of India (SBI) has already entered into a 100 per cent computerisation agreement with its staff and officers associations. The United Forum of Bank Unions (UFBU) convenor, Ashok Kumar Dutta, told that there is no point in opposing the IBA proposal for 100 per cent computerisation."As trade unions, our duty is to ensure that salaries, wages and other benefits of bank employees are protected and we can ensure that only if our banks perform well financially. The proposal for 100 per cent computerisation is aimed at improving customer service and thus attract more customers. So, there is no reason for us to oppose that, Dutta said.

UFBU is an umbrella organisation of nine officers' and staff unions operating in the banking industry. Dutta further pointed out that despite the agreement in the earlier ie, seventh bipartite wage negotiation that the PSU banks will not allow more than 70 per cent computerisation, there is not a single PSU bank that has not surpassed the limit. State Bank of Patiala and Indian Overseas Banks have already achieved 100 per cent computerisation. "Some other banks that have already achieved over 90 per cent computerisation include Andhra Bank at 99 per cent, Bank of India at 92 per cent, Bank of Maharashtra at 91 per cent, Corporation Bank and Oriental Bank of Commerce at 93 per cent each and State Bank of Hyderabad at 91 per cent,"Dutta said.

According to him, 14 banks, namely, Bank of Baroda, Canara Bank, Central Bank of India, Dena Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, SBI, State Bank of Indore, State Bank of Mysore,State Bank of Saurashtra, State Bank of Travancore, Syndicate Bank and Union Bank of India, have already achieved over 80 per cent computerisation. "Even the three erstwhile weak banks - Indian Bank, Uco Bank and United Bank of India - have achieved computerisation at the rates of 78 per cent, 75 per cent and 74 per cent respectively," Dutta said. He said that that of the fourteen circles of SBI, already five have achieved 100 per cent computerisation.Dutta pointed out that when it is quite evident that banks are determined to go in for computerisation on a large scale considering its advantages,there is no point in resisting the move. "However, we will resist the IBA proposal for transfer of clerks beyond their linguistic zones," he said. The next meeting of the eighth bipartite wage negotiation is scheduled for tomorrow.
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