BNP Paribas acquires 33.35-per cent stake in Geojit
Mumbai: French banker BNP Paribas has acquired 33.35 per cent equity stake in the Kerala-based retail broking firm Geojit Financial Services for Rs207 crore.

Geojit has issued on a preferential basis, up to 7.96 crore equity shares to BNP Paribas at Rs26 per share, the company said in a statement here today. The preference issue will be in equity for up to 26 per cent and the balance in warrants convertible into equity.

BNP Paribas will have to make an open offer for another 20 per cent stake. Post the preferential offer, the stake of Geojit's promoter C J George and family will come down to 24 per cent from the present 38 per cent.

The holding of two other large investors KSIDC, a Kerala Government undertaking, and the Mumbai-based investor Rakesh Jhunjhunwala will also be down to about 10 per cent each.

With this acquisition the French group has become the single largest shareholder in the company. Geojit has 4.25 lakh customers, of which a majority are in the retail category.
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ADB warns India about non performing assets
Mumbai: The Asian Development Bank (ADB) in a report has said that that India faces a risk of piling up of non-performing loans or bad loans due to the rapid growth in credit card debt and home loans.

ADB's South Asia Economic Report (SAER) has said that since retail banking, for housing and credit cards, is a new growth area for banks in India and Pakistan, credit card debt growth should be monitored. The ADB added that credit card debt rose by 36 per cent in 2004.

Such a rapid rise points to the need for close supervision and consumer education. The bad loans (NPLs) for credit cards stand at about 8 per cent.

The credit card outstandings grew by 59.3 per cent to Rs9,177 crore by end of March 2006 from Rs5,760 crore a year ago, according to Reserve Bank of India's annual report for 2005-06.

The home loans grew by 44.8 per cent to Rs186,429 crore as on March 31, 2006, from Rs128,728 crore as on March 18, 2005. However, the share of home loans, which qualify as priority sector lending, is over 70 per cent, the RBI said.

ADB said some segments of the banking sector and individual banks remain vulnerable. In each economy (in South Asia), a number of banks are unprofitable, are undercapitalised, and have high NPLs.
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Banking services tax not to be imposed on SEZs
Mumbai: Banking services offered to units set up in special economic zones have been exempted from paying service tax according to a clarification issued by the Central Board of Excise and Customs (CBEC) in response to a query from the Indian Banks' Association (IBA).

Banking sources said this came as a relief to banks as well as promoters planning SEZs. While there had been a rush for banks to set up branches in SEZ's as offshore banking units (OBUs) earlier, the business is restricted to certain sectors like export of commodities which are ruled by a global economic cycle. With a downturn in commodity prices, the business of offshore banking units had become highly restrictive, a banker said.

Service tax on banking services has been raised from 10 to 12 per cent. It includes mainly the transfer of money through various modes such as electronic fund transfer and rendering of banking services to issuer of capital market instruments.
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PNB to offer cheaper medical insurance to depositors
New Delhi: The Punjab National Bank, the country's second largest state-run bank, will offer medical insurance cover from November to depositors to its depositors at a lower price than thye market rate. The bank has tied-up with private insurer Reliance General Insurance for the purpose.

The policy will be optional for all kind of depositors and will be issued by the bank to its 35 million depositors, who have Rs1,29,000 crore with PNB, on behalf of the insurance company at a price much lower than the market premium rate.

Depositors can also go for medical insurance cover for their family members.

PNB has also started testing the share trading facility from last week and plans to launch it from November 1 in three states on an experimental basis.

The bank has tied up with IDBI Capital for this purpose and the customers will trade through IDBI Capital's online trading platform and is offering only Demat services at present.
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Banking services may be hit by strike on October 27
New Delhi: The United Forum of Bank Unions, an umbrella of nine unions, has called for a strike to oppose outsourcing, privatisation and the proposed increase in voting rights of foreign investors in private banks.

The strike action was announced after the conciliation meeting held on October 18 by the Chief Labour Commissioner with the Unions and Indian Banks Association (IBA) failed.

The United Forum of Bank Unions (UFBU) blamed the casual approach of the Government and IBA for the failure of the meeting, in which UFBU had also demanded fresh recruitments, restoration of compassionate appointments and one more option to join pension scheme.
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