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Thursday, February 4, 2016

Govt to infuse about Rs. 5,000 cr in PSU banks this quarter

Government will infuse about Rs. 5,000 crore of capital in the public sector banks in the current fiscal to strengthen the balance sheet.

“As committed, banks will get fund infusion in the fourth quarter. Banks will get about Rs. 5,000 crore,” Financial Services Secretary Anjuly Chib Duggal said on the sidelines of an event here.

Funds would be infused after Parliament approves the third Supplementary Demand for Grants in the upcoming Budget session.

Last year, the government announced a revamp plan ‘Indradhanush’ to infuse Rs. 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs. 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel-III.

In line with the blueprint, PSU banks will get Rs. 25,000 crore this fiscal and also in the next fiscal. Besides, Rs. 10,000 crore each would be infused in 2017-18 and 2018-19.

Of the Rs. 25,000 crore earmarked for 2015-16, the government has pumped in about Rs. 20,088 crore in 13 public sector banks so far.

Talking about initiatives taken by the government to deepen the social security net, Duggal said banks are addressing last mile connectivity issues.

The Department of Financial Services is holding discussions with banks on a regular basis to sort out issues as soon as possible, she said.

Banks such as SBI and Andhra Bank are currently addressing the issue of Internet connectivity in the 800 identified areas.

Besides, steps are being taken to strengthen Internet connectivity in various parts so that Direct Benefit Transfer (DBT) is made seamless.

Source : Thehindubusinessline
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Bandhan Bank to scale up retail lending from next fiscal

Kolkata-based Bandhan Bank is on course to introducing new products and scaling up its presence in the retail lending segment. The offerings are expected to be introduced next fiscal onwards.

According to Chandra Shekhar Ghosh, Founder, MD and CEO of Bandhan Bank, “teams are being readied”, with offerings targeting micro, small and medium enterprises (MSMEs), housing reconstruction or “smaller value” home loans, vehicle financing and loans against property.

The teams, he said, will consist of members across verticals that include those with microfinance expertise, banking background and fresh recruits with hold over the local language.

“There are some common requirements across regions and states. Our retail loan portfolio will start catering to some of these common sectors,” he maintained.

Currently, some of the retail loan offerings are being tested across states on a smaller scale. For example, the (rural and suburb) vehicle financing loan scheme, started with lending (Rs.80,000 to Rs.1 lakh) to 1,000-odd people in the first phase and on a pilot-basis.

“It is more important for us to first create a credit repayment habit in a region. Hence, we start with selective lending and establish a repayment cycle first. Once this happens, we look at increasing our disbursements there,” Ghosh told BusinessLine on the sidelines of a summit organised by the Bengal Chamber of Commerce and Industry.

Small portfolio

According to him, the portfolio of offerings will ‘deliberately’ be kept small. This is to refrain customers from having a negative perception.

“Too many offerings can actually create confusion and deter a customer. In many cases a bank’s branch manager does not know about a very specific product if there are too many variants of it,” he pointed out.

Apart from small vehicle financing (done through its micro-financing wing), Bandhan has started giving housing loans in some areas.

MSME loans too are being disbursed. Loans below Rs.1 crore are initially being targeted. Once the bank has a foothold, it will look to give MSME loans of Rs.1 crore and above. “Corporate lending will come at a later stage,” he added.

Meanwhile, over the last five months (September to January), the lender mobilised deposits to the tune of Rs.7,000 crore. The country’s largest microfinance lender, Bandhan, began full-fledged banking operations in August last year.

The bank has over 612 branches and more than 750,000 customers across 27 states. Its loan book stands at Rs.12,500 crore, against a targeted Rs.13,000 crore (till March 2016).

Source : Thehindubusinessline
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New SBI home loan product offers interest moratorium

The newly-launched SBI FlexiPay Home Loan will help working professionals fulfil their aspirations of owning homes, Badal Chandra Das, Chief General Manager, SBI Kerala Circle, has said.

The new product was unveiled at 14 circle offices of SBI along with the formal launch at the hands of Chairperson Arundhati Bhattacharya in Mumbai on Monday.

Flexible option

It is targeted at the salaried employees aged between 21 and 45 years with a required loan amount of not less than Rs.20 lakh, Das told newspersons here.

It allows borrowers to get higher loan amount compared to their loan eligibility under normal home loan schemes. Interest rates, loan to value ratio (LTV) and pre-payment conditions remain the same.

The eligibility is arrived at by calculating equated monthly instalment (EMI) to net monthly income (NMI) ratio, which will not be allowed to exceed 65 per cent. Twenty per cent is sanctioned extra.

The additional loan amount will help the customer in acquiring better and spacious living spaces for himself and his family even as their future needs are also taken into account.

To lower the impact of such additional loan amount on the monthly repayments in the form of EMIs, customers need to pay only the interest during a moratorium period (pre-EMI) of three to five years and thereafter pay moderate EMIs.

The EMIs will be stepped up during the subsequent years in consonance with the expected rise in salaries, Das said.

Among those present at the press conference were K Venkatachalapathy, General Manager, and Joy C Aryakara, Deputy General Manager (Personal Banking Business), SBI, Kerala Circle.

Source : Thehindubusinessline
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Thursday, December 17, 2015

HDFC Bank elevates seven senior executives in bid to retain talent

HDFC Bank has elevated 7 senior executives to group heads of various businesses as it tries to groom talent and protect them from being poached by emerging rivals such as IDFC Bank and other payment banks.

India's second largest private sector bank has elevated Parag Rao, who heads the bank's card payments and merchant acquiring business, Nitin Chugh who is in charge of the bank's Digital Banking services, Nirav Shah who handles the SME portfolio, and Ravi Narayanan who helms the bank's branch banking vertical.

Others who have been promoted are Ashok Khanna who is the head of the auto loan division, Ashima Bhat who is currently part of the finance team, and Munish Mittal, the Chief Technology officer of the bank. HDFC Bank will now have 19 executives as part of its senior management team. HDFC Bank had seen three senior level exits in August this year, when Biju Pillai, Amit Kumar and Birendra Sahu quit to lead IDFC Bank's personal and business banking divisions.

The bank had also elevated Dhiraj Relli to head of HDFC Securities and Aseem Dhru as group head -business banking, rural, commodity and agri-lending businesses in June this year.

Although the bank has re vealed very little about its succession planning or management roles for senior staff, experts believe these promotions follow the entry of potential banking companies which are scou ting for experienced and proven bankers.

In December 2013, HDFC Bank had elevated its long time second-in-command Paresh Sukthankar as deputy managing director, a move that was interpreted as improving Sukthankar's chances of succeeding Aditya Puri as MD and CEO of India's most valuable bank.

Other private sector banks like ICICI and Axis Bank ha ve also faced the brunt of employee attrition after the launch of IDFC, Bandhan and several payments banks. Some bankers point out that the ability to retain talent has been the lowest in years with new entrants of fering generous pay hikes to employees especially at the junior and middle manage ment level.

Source : Economic Times
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IDRBT to develop digital banking framework

The Institute for Development and Research in Banking Technology (IDRBT) has announced plans to launch a digital banking framework within the next few months, aimed at incorporating new channels of payments.

A.S. Ramasastri, Director of IDRBT, told BusinessLine, “The framework/ platform being developed with inputs from banking sector players, technology firms, and IDRBT research teams, is also aimed at meeting emerging requirements in the e-commerce sector.”

Recent advances in Big Data and its analytics has thrown up immense possibilities in identifying areas of business propositions for banks, while meeting the choosy demands of their customers.

Research in this area has enabled banks to develop their own data warehouses for customer relationship management (CRM) initiatives. Big data has, therefore, become the mantra for understanding new leads for banks, the likes and dislikes of customers, their behavioural analysis, and information security threats, among other issues.

Over the years, IDRBT, based in Hyderabad and part of Reserve Bank of India, has played a significant role by contributing through centres of excellence in analytics, mobile banking, cyber security, Centre for Open Source Systems, and Centre for Virtualisation and Cloud Computing.

“There has been a huge growth in data requiring specialised systems and tools to make sense of the information flow. While a lot of business intelligence has been built into banking systems, it calls for more advanced systems to extract information from Big Data,” he said.

Towards this, IDRBT is seeking to focus on new areas of fuzzy computing, neuro computing and hybrid neuro-fuzzy computing. By exploring new applications areas and designing novel hybrid algorithms for solving different real world application problems, the Digital Framework seeks to use the power of fuzzy and neuro computing to address complex, uncertain, and imprecise problems.

The concept of Fuzzy Neuro Computing gained importance to analyse and make sense of complex data that keeps flowing into the banking systems. By use of various computing techniques, it is aimed at providing solutions to make the right decisions.


The IDBRT Director said the Institute is all geared up to introduce a Post-Graduate Diploma in Banking Technology (PGDBT) commencing from July 2016.

Describing the course as a unique programme designed to provide the Indian banking and financial sector a pool of talented professionals with technology expertise, he said this is a full-time regular one-year programme that provides essential learning inputs on technology implementation, integration, and management to meet the challenging technology requirements of the banking sector. The selection is based on CAT scores.

Source : Thehindubusinessline
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