The sub-prime mess has presented the foreign units of domestic banks with lucrative investment opportunities. Global banks, struck by a severe liquidity crunch and risk aversion, are selling a lot of their investments in debt of Indian companies at a discount.
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.
Till March 2007, the bank had invested a total of Rs 1,973 crore (Rs 19.73 billion) in shares of companies. In the nine months since then, it has added Rs 3,000 crore (Rs 3 billion) to its investment kitty, making investments of over Rs 100 crore (Rs 1 billion) in a clutch of blue-chip companies including GMR Infrastructure, Godrej Industries, Maruti Suzuki, Cairn India and DLF, besides closest rival ICICI Bank.
The focus on instances of excesses by banks in their attempts to recover money has had the unintended effect of encouraging some borrowers to dare banks to take steps to recover loans.
Banks plan to charge a levy on unutilised portion of credit.
Banks are sensing warning signals of potential loan defaults from gems and jewellery exporters as the appreciating rupee continues to dent their profits. Loan accounts of a few diamond and jewellery exporters are already showing signs of stress, with banks receiving delayed payments.
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.
ICICI Bank, the country's second largest bank, has sold roughly 45 per cent of its sticky home loans to the Asset Reconstruction Company India Ltd (Arcil) in a first step towards creating a market for retail loans that have turned bad.ICICI Bank sold Rs 360 crore of non-performing home loans at a price around the book cost, confirmed Rajiv Sabharwal, senior general manager, ICICI Bank.
RBI's warning was delivered by Governor Y V Reddy at an address to bank chiefs during the mid-term review of the monetary policy on October 30. Reddy told bank chiefs he would not hesitate to recommend to Parliament that the ULA be extended to the banking sector if they did not charge reasonable rates of interest.
The Mumbai-based recovery chief does not want to be identified but says his greater concern is not that non-performing loans would rise from the already elevated levels. Coordinated opposition to recovery efforts could lead to banks withdrawing altogether from lending to this sub-prime segment in India that otherwise depends on informal money lenders.
We are focusing on how to make banking affordable for the customer. The bank is bullish on retail business, says Suresh Gurumani.
The interest rates on deposits continue to be high despite ample liquidity due to monetary policy uncertainty and expectations that liquidity would tighten later this year. Banks are still offering peak interest rates of 9 to 9.5 per cent on deposits
The loan portfolio of banks has grown by Rs 54,908 crore (Rs 549.08 billion) till September 14, representing only 3.6 per cent growth. During the same period last year, banks had lent Rs 147,657 crore (Rs 1,476.57 billion), a rise of 10.5 per cent.
The RBI is drafting a comprehensive study on the credit card market and a best practices code for credit card issuers.
Now you can withdraw money and simultaneously get your passbook updated at the automated teller machine (ATM) instantly.
The RBI is working on a comprehensive set of guidelines that will make banks responsible for ensuring that their recovery agencies do not recruit individuals with a criminal background.
Banks are facing increasing delinquencies by overleveraged mid-sized companies, now caught in hardships due to changes in their operating environment.
In their first step towards introducing a pension scheme based on defined contribution, public sector banks have in-principle decided to introduce such a scheme for new recruits in the officer cadre.
Chidambaram clears holding company for insurance & mutual fund subject to RBI clearance.
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