'Increasing credit offtake to put pressure on interest rates'
New Delhi: The Economic Survey 2005-06 though enthused by a
17 per cent increase in credit offtake and the resultant economic boom, has asked the government to maintain a check on interest rates, saying the high demand coupled with uncertain prospect of inflation and surging global oil prices could exert pressure on them.

The pressure on interest rates makes a case for release of the required liquidity by the Reserve Bank through the market stabilisation scheme, the Survey presented in Parliament said, while complimenting the authorities for timely steps to keep the liquidity under check during the current fiscal.
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Bank of India to issue bonds to raise Rs200 core
Mumbai: Bank of India plans to raise Rs200 crore by way of redeemable, non-convertible and subordinated bonds. The board of directors of the bank has considered and approved raising of tier II capital by way of unsecured, redeemable, non-convertible and subordinated bonds in the nature of promissory notes, the company informed the BSE.
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BoI implements core banking solution in branches
Bangalore: Bank of India (BoI) and Hewlett-Packard (HP) have implementation the core banking solution (CBS) in 500 BoI branches across India. The implementation in the branches has been achieved within 15 months, which, according to an HP statement, makes it the fastest CBS implementation in India.

This project was part of the 10-year outsourcing contract. Under the terms of the contract, HP is to implement and manage a CBS across 750 branches of BoI. The CBS is based on Infosys' Finacle application.

The CBS, coupled with the multi branch banking (MBB), networks 1,200 branches of the bank across 300 cities in the country.
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IPO scam claims more banks
Mumbai: The Reserve Bank of India has imposed financial penalties on Industrial Development Bank of India (IDBI) and ING Vysya Bank. It has also fined HDFC Bank for the second time since January 23. This takes the total number of banks penalised for their role in the scam to nine.

The penalties were imposed for violating the know-your-customer (KYC) norms, breaching prudent banking practices and not adhering to directives and guidelines for granting loans against shares/IPOs, the RBI said in a statement.

HDFC Bank was fined to the tune of Rs25 lakh, ING Vysya Bank Rs10 lakh and IDBI Rs5 lakh. Last month, the RBI had penalised seven banks - ICICI Bank (Rs5 lakh), Citibank (Rs5 lakh), Standard Chartered Bank (Rs5 lakh), HDFC Bank (Rs5 lakh), Vijaya Bank (Rs10 lakh), Bharat Overseas Bank (Rs20 lakh) and Indian Overseas Bank (Rs15 lakh).

HDFC Bank has been fined for failing to show prudence in opening 271 savings accounts with one common name and multiple unconnected names.

These accounts were used by the IPO allotment process manipulators for opening 1,142 demat and 24 loan-against-share accounts.

The demat accounts opened with HDFC Bank were used for making multiple applications in IPOs. The bank had even issued around 4,000 cheque books with 100,000 leaves to one person who effectively controlled operations in 24 loan-against-share accounts, the RBI said, adding that HDFC Bank had also failed to follow norms for monitoring large-value transactions in customer accounts.

The Bangalore-based ING Vysya Bank has been penalised Rs10 lakh for failing to adhere to the KYC norms in opening joint savings bank accounts. It especially failed to independently verify the addresses of the joint account holders, solely relying on the principal joint account holder's identity, the RBI said.

RBI said ING Vysya Bank did not apply due diligence in establishing relationships among joint account holders and violated RBI instructions on IPO finance, particularly the limit on maximum permissible finance per borrower.

RBI said IDBI has been fined for extending IPO finance in excess of the limit specified for individuals by allowing pooling of funds by certain individuals.
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Federal Bank seeks RBI nod for 49 per cent FII limit
Kochi: Federal Bank after receiving shareholders consent has sought the RBI permission to raise the FII investment limit from the current 24 per cent to 49 per cent. The FII holding had earlier crossed the upper limit of 24 per cent of the bank's total paid-up capital of Rs85.6 crore. Responding to the heightened FII interest, the bank decided to increase its stake.

The initiative is seen as a move to make the scrip more liquid and visible in the national and international bourses. The bank had recently deployed 18 million GDRs in the European markets and mobilised $80 million.

On the BSE, the Federal Bank scrip closed at Rs174.10.
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