The move comes even as Bank of India on Wednesday said its corporate clients will suffer mark-to-market losses of around Rs 125 crore. It has 34 clients with 74 derivative transactions. Last week, State Bank of India said its clients may incur MTM losses of up to Rs 700 crore at the end of March 2008.
Earlier norms on para-banking activities stated that investment by a bank in a subsidiary company, financial services company, financial institutions and stock and other exchanges could not exceed 10 per cent of its paid-up share capital and reserves. On a cumulative basis, the limit was fixed at 20 per cent of the bank's paid-up capital and reserves.
In order to offer a level playing field to co-operative banks, the Reserve Bank of India (RBI) may allow them to use new products for raising funds from the debt market. The co-operative banks could come out with subordinate debt structures like tier-II bonds, tier-III bonds and upper tier-II or perpetual bonds to raise finance.
Banks may have to spend up to Rs 800 crore (Rs 8 billion) in training close to one million employees to comply with the Reserve Bank of India's proposed loan recovery norms. RBI has proposed that banks should tie up with the Indian Institute of Banking and Finance (IIBF) or organise programmes in their own training colleges to ensure that every agent passes the exam conducted by IIBF during a one-year period. 'Agents' would include agencies as well as bank employees.
Citibank has put on sale yet another residential property on Altamount Road in south Mumbai. Earlier it had sold off prime residential property at Mumbai's National Centre for the Performing Arts for Rs 34 crore. Most of the banks are selling residential properties as they are offering a fixed cash compensation every month to their employees. Bank offices have now shifted to suburbs and employees prefer to live close to workplace. Such sales unlock value and releases capital.
The household sector's savings in physical assets increased by 16.12 per cent to Rs 5,17,837 crore (Rs 5.17 trillion) in 2006-07 compared to Rs 4,45,915 crore (Rs 4.45 trillion) in 2005-06. While savings in financial assets have gone up by 11.20 per cent to Rs 4,67,985 crore in 2006-07 compared with Rs 4,20,841 crore in 2005-06. This data shows that Indian households are increasingly opting for physical assets as instruments of savings rather than relying on financial tools.
International claims of Indian banks have risen by 41.15 per cent to Rs 1,49,167 crore (Rs 1491.67 billion) at the end of June 2007 on account of higher exposure to guarantees, derivatives and credit commitments. Exposure of Indian banks to derivatives rose 79 per cent to Rs 13,999 crore (Rs 139.99 billion) at the end of June 2007, as against Rs 7,818 crore (Rs 78.18 billion) in the corresponding period in June 2006, data released by Reserve Bank of India said.
Meera Sanyal, Country Executive, ABN Amro Bank, revealed the bank's merger plans with Royal Bank of Scotland. Dutch Central Bank has approved of the merger and a country-by-country approval is being sought. As part of the deal, RBS will acquire the banking business in India and Fortis will buy the asset management company. Neither have a presence in India. ABN Amro is negotiating with RBI too on this issue. The bank will continue to operate through 28 branches in 21 cities.
The sub-prime loss-hit Citigroup is on a cost-cutting exercise in its Indian operations. CitiFinancial, its consumer finance unit, which is also reeling under the burden of rising bad loans, is considering closing about 100 of its 450 branches in India.
The Reserve Bank of India (RBI) has issued a restricted banking licence to American Express Bank (Amex) to conduct credit card and travel-related businesses in India.
The Reserve Bank of India's (RBI) denial of permission to Swiss bank UBS to acquire Standard Chartered Asset Management Company has come as a blessing in disguise for Standard Chartered Bank.
The Monopolies and Restrictive Trade Practices Commission (MRTPC) had sent a letter to about half a dozen banks last month, seeking details on how they had determined the interest rate increases on their housing loans.
Banks had raised the interest rates on loans by as much as 350 basis points although the cost of deposits had increased by a maximum of 200 basis points. With the deposit rates having softened from the April 2007 levels, banks have decided to pass on the benefits but only to the new borrowers.
Foreign banks operating in India want the Reserve Bank of India to prepare a vision document on policy changes they can expect after March 2009.
Policy rates are not likely to increase in 2008 but a cut in repo rate too is uncertain.
About 35,000 credit card customers of Citibank received free tickets worth Rs 23 crore (Rs 230 million) in early 2007 under the 'Fly for Sure' promotional campaign undertaken by the bank in 2005. The customers became lucky after the bank was cautioned by the Reserve Bank of India (RBI) about consequences if customer complaints were not redressed and commitments made under the promotional scheme not honoured, banking sources said.
At the start of April, State Bank of India (SBI) and ICICI Bank, the country's two largest banks, reviewed the situation. They felt the resource-raising madness was over and that interest rates on bulk deposits would drop automatically with credit growth expected to temper between June and September.
The money mule scam has reached Indian shores. Banks have noticed instances of fraudsters based overseas, posing as global payment companies, luring gullible people into joining them as "money transfer agents" and using their bank accounts to route ill-gotten money.
The Reserve Bank of India (RBI) is likely to reiterate its view that it would be comfortable only with holding companies at the top in financial services groups when it releases final guidelines on setting up bank holding companies or financial holding companies by November 15.
ICICI Bank, the country's second-largest bank, has stopped lending to borrowers from the sub-prime segment, while the biggest player in small loans, Citigroup, has made its processes more stringent.
© 2025 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances