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FM
suggests consolidation of State-owned banks as means to
raising capital base
Mumbai:
Finance minister P. Chidambaram has ruled out government
diluting its equity stake in State-owned banks, saying
that the government would retain its 51 per cent equity
stake in public sector banks. He said that the banks that
have reached this limit would have to identify new avenues
to mobilise capital in order to strengthen their capital
base, and suggested that consolidation of banks could
be one such route.
The
minister was speaking at the annual general meeting of
Indian Banks' Association here.
Observing
that there is little scope for the public sector banks
to approach the capital markets because the government
holding cannot be reduced below 51 per cent, the Finance
Minister, however, suggested that banks can look for consolidation
to become larger in size in order to sustain their growth.
Reacting
to the FM's observations, leading bankers said high performing
banks should find out new avenues for capital mobilisation
through hybrid bonds, right issues or professional shares,
while weak banks could merge or consolidate their business
with strong ones.
''We
need to go back to our respective Boards to discuss the
issues and redraw our growth path for future'', said State
Bank of India chairman A K Purwar, who is also the chairman
of IBA. He said that the SBI would be acquiring at least
one bank abroad in the next 6-8 months besides exploring
organic growth within India.
Union
Bank of India chairman Cherian Varghese said consolidation
among public sector banks becomes imperative to achieve
size in business volume and financial strength to enable
survival in the era of globalisation.
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Bahrain
Financing Company and ICICI Bank tie up for electronic
fund transfers
Manama:
ICICI Bank, India's second largest bank, has established
a tie-up with Bahrain Financing Company (BFC), the first
foreign exchange company in the kingdom.
According
to ICICI Bank country head, Ajay Sharma, the tie-up will
put into operation the Special Electronic Funds Transfer
(SEFT) arrangement for those customers who maintain accounts
with non-ICICI Banks. They would receive direct credit
in 34 banks and 2,609 branches, he said at a press conference
here. The network will be enhanced to 6,000 branches in
one month, and to 8,000 in three months, said Sharma.
Under
an earlier tie-up with BFC, the customers have the benefit
of receiving direct credit into their accounts with ICICI
Bank using Speed Remittance, he added. With the tie-up
in place, all the customers of BFC would get faster remittance,
said BFC general manager George Philip.
Speed
Remittance enables NRIs to send money to their ICICI Bank
accounts in India within 24 hours. This can be done to
all the 551 branches of ICICI Bank. SEFT uses the Reserve
Bank of India clearing facility to credit funds to non-ICICI
banks that are a part of this network.
Using
the Demand Draft facility, NRIs can get an instant draft
across the exchange house counter in Indian Rupees, which
can be payable at designated locations of ICICI Bank.
Remittances
to India were to the order of US$21bn last year, and ICICI
Bank's market share was 15 per cent, Sharma revealed.
ICICI Bank market share in remittance in Bahrain is 10
per cent, he added.
ICICI
Bank's international presence spans ten countries and
include three wholly owned subsidiaries in the UK, Russia
and Canada, branches in Singapore and Bahrain and representative
officers in US, China, UAE, Bangladesh and South Africa.
BFC,
established in 1917, has a paid up capital of BD1.5mn
and a net worth of over BD10mn. It has 14 branches covering
Bahrain.
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J
& K Bank Q1 net up 2.3 per cent
Srinagar: The Jammu and Kashmir Bank has reported
a marginal rise of 2.3% in its net profit from Rs47.29
crore to Rs48.44 crore for the first quarter of the current
fiscal. A sharp drop in the trading income has led to
the marginal rise.
The
key positives for the bank are improved socio-political
environment in the state. The socio-political environment
in the state of J&K is changing for the better and
tourist inflows have touched the pre-militancy days' numbers.
Big-ticket
investments are lined up for J&K, including the Prime
Minister's reconstruction plan worth Rs24,000 crore. Also
the World Bank and other multilateral institutions are
funding investments in the state, all of which will translate
into more business for the J&K Bank, as it enjoys
a near monopoly status in the state with 390-odd branches.
The
bank is also aiming to shore up its fee-based income by
selling third party products like mutual funds and insurance.
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Andhra
Bank to expand operations abroad
Mumbai: Hyderabad-based Andhra Bank has said that
it was planning to open 50 new branches this fiscal and
would soon expand its operations abroad by opening a representative
office in Dubai.
"We
would be opening 50 new branches this fiscal with around
10 branches in the un-banked areas of Orissa, which have
a huge Telugu-speaking population," Andhra Bank CMD
K. Ramakrishnan told reporters.
The
bank was also interested in setting up a representative
office in the USA as it had a large Telugu population.
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