At a time when financial institutions are in the process of cutting costs through retrenchment, the country's largest insurer, Life Insurance Corporation of India, has drawn up plans to hire over 10,000 employees and around 250,000 insurance agents across the country.
Similarly, the state-owned corporation has subscribed to NCDs worth around Rs 20,000 crore (Rs 200 billion) this year, with nearly Rs 12,000 crore (Rs 120 billion) flowing into these instruments over the last three months when the global credit crisis intensified.
Public sector banks have lowered both deposit and lending rates, while almost all private and foreign banks have stayed away from rate cuts despite the Reserve Bank of India reducing key rates. HDFC Bank has become the first private sector lender to reduce deposit rates, while other private sector banks said they would also jump on the bandwagon over the next few weeks.
With terror attack claims likely to wipe out over 70 per cent of the Rs 700-crore (Rs 7 billion) terror pool, insurers are expected to chip in with additional funds to replenish the corpus and raise the premium paid for terrorism insurance.
Insurance industry is gearing up to clear claims from the attack on Mumbai even as many of the injured are finding it tough to produce the required documents.
Because of the terrorism insurance pool created after the terror strikes in the US, insurers said, costs will be manageable for Indian companies and they will continue to get risk covers. The Insurance Regulatory Developmental Authority has mandated all general insurance companies be allied to a common pool for terrorism insurance. So, premium of terrorism insurance collected by all general insurance companies flows into a common pool.
A committee headed by Irda's member actuary R Kannan has suggested a grace period of 15 days for policyholders who pay premium on a monthly basis, while a 30 days grace period will be available to those who pay their premium annually, half-yearly or quarterly.
At a time when the global banking industry is feeling the pinch of the global credit crunch, Central Bank of India is planning to expand its foreign presence.
At least 150 of the 205 employees at Lotus India Mutual Fund may lose their jobs.
They say liquidity remains a major cause of concern, and the coming quarters could witness a significant rise in non-performing assets. According to them, a robust risk management system, adequate capital infusion and regulatory reforms is crucial if India's economic growth is to remain intact in the medium and long term. Banks are facing immense liquidity pressure, as resources gradually disappear from the system. Banks have also been unwilling to lend each other.
The average, fixed cost of setting up an ATM is estimated at Rs 600,000-800,000. There are about 30,000 ATMs in India. The RBI norms will enable small banks to benefit from low-cost, switch-enabled ATM services without opting for expensive bilateral tie-ups.
In an effort to soothe nerves of the country's mutual funds and the non-banking finance companies, the bankers today assured that they would come forward to support these financial institutions' funding needs including liquidity to meet redemptions.
It is mission damage control and ICICI Bank is pulling out all the stops. Weighed down by persistent rumours over its health, the bank's top management will meet senior employees on Monday to reassure them about their future.
The bank approached RBI for the second time in August this year. The erstwhile development financial institution had approached the regulator in 2007 to get into the private equity business. While no formal proposal was moved, RBI had then advised the bank to concentrate on its upcoming life insurance business. Its joint venture with Fortis and Federal Bank is now up and running.
The Reserve Bank of India has initiated a review of the benchmarking system for pricing floating rate loans, a move that could impact 70 to 75 per cent of banks' loan portfolios.
As the tides of investments change over time, venture capital funds are shifting their focus to businesses related to consumer demand such as education, media and entertainment, food & beverages and alternative energy.
Banks levy a fee on transactions under core banking solutions.
According to the latest data released by the Reserve Bank of India, the growth was significantly higher than the 24.51 per cent rise in the value of plastic money transactions in 2006-07 and was partly attributed to banks encouraging people to use cards for transactions. In recent months, banks have increasingly put in place schemes, like cash-back offers, to entice people to use more of debit cards.
A clampdown on fresh personal loans, credit cards and auto loans is taking a toll on direct selling agents hired by banks to push these products. According to estimates, banks have reduced the number of DSAs by 15-25 per cent, while marketing expenses are 35-40 per cent lower.
With higher interest rates, bankers today said their loan portfolios will grow at a slower pace, partly because of the caution being exercised by lenders themselves.
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