Archive for the 'Banking, Insurance' Category

Euro falls against dollar, yen

Euro falls against dollar, yen

LONDON: The euro weakened against the dollar and yen, as some traders pared bets on interest rate increases this year by the European central bank after comments by President Jean-Claude Trichet. The ECB on Wednesday raised its benchmark borrowing cost to a six-year high of 4%. The European currency fell as far as $13495 and was trading at $1.3503 in afternoon trade in London from $1.3524 late on Tuesday in New York. The currency traded at 163.58 yen, from 164,16 yen on Tuesday. Traders pared bets that the ECB will lift rates to 4.5% this year. The implied yield on the December Euribor contract fell to 4.54% from 4.57% earlier.

BoB’s CMD is new IBA deputy chairman

BoB’s CMD is new IBA deputy chairman

MUMBAI: Bank of Baroda chairman and ‘ managing director A.K. Khandelwal has been elected as deputy chairman of Indian Banks’ Association (IBA). Mr. Khandelwal will succeed SC Gupta, who retired as chairman of Punjab National Bank on attaining super-annuation.

Banks told to share interest burden on crop loans

Banks told to share interest burden on crop loans

Amid hardening interest rates, the government has ruled out in a easing the subsidy to crop loans and instead asked PSU banks to share the burden of 1 -2% rise in interest rates.

There is no proposal to raise interest subsidy of 2% on short-term crop loans, We have asked banks to share the burden and provide crop loans up to Rs 3 lakh at 7%,” said a senior finance ministry official. Sources said banks had recently urged the finance ministry to raise interest subsidy on farm loans, but without any success so far.

ICICI to sell 5% in Arcil to First Rand of S Africa

ICICI to sell 5% in Arcil to First Rand of S Africa

ICICI Bank will sell 5% of its equity stake in Asset Reconstruction Company of India (Aral) to an African bank. First Rand Bank, for little less than Rs 40 crore. Aral deals in bad loans, and the development reflects a growing interest among foreign players in the local stress asset business.

Last year, ICICI Bank had decided to sell 10% of its stake to British bank Barclays Bank. However, this was rejected by the Reserve Bank of India (RBI) on the grounds that the bank would overstep its capital market exposure limit.

When the deal was stuck between ICICI Bank and Barclays, RBI’s capital market norms stipulated that a bank’s exposure to stocks should not be more than 5% of the advances portfolio. Since Barclays did not have a large advances portfolio, the proposal could not be pursued. Under the present norm, a bank’s market exposure can be up to 20% of the net worth or 5% of advances, whichever is lower.

As a result, ICICI Bank could sell only 5 % of its stake to Barclays at Rs 39.6 crore. The balance 5% would be sold to the African bank. Following this, ICICI Bank’s shareholding in Aral will be 19.58%, slightly lower than that of the other two key shareholders — State Bank of India and IDBI Bank — each holding 19.95%.

Confirming the development, Aral MD & CEO S Khasnobis said, “With this, ICICI Bank equity holding will come down to 19 % as was originally planned.” First Rand Bank is among the top four commercial and investment banking groups in South Africa. It has over 4,000 ATMs and 650branches.

Aral’s paid-up equity share capital is Rs 220 crore comprising of 22 crore shares of Rs 10 each. The other large shareholders include Punjab National Bank which holds 10% and LDFC with 8.71 %. The minority shareholders include Karur Vysya Bank (2.9%), Karnataka Bank (2.74%), Citicorp Finance (2%), Federal Bank and South Indian Bank (1.33% each) and HDFC and HDFC Bank (0.53% each). Besides this, ITCOT Consultancy, trustee of Aral employees’ stock, owns 0.46%.

United Bank of India, on a hiring spree

United Bank of India, on a hiring spree

UNITED Bank of India (UBI) is on a hiring spree. The Kolkata-based public sector bank has decided to recruit nearly 100 probationary officers (PO) soon. The bank has just recently completed hiring over 70 specialised officers through its first ever campus recruitment. The bank has also embarked upon a career progression plan to counter its ageing employee pool.

“There was no recruitment in the bank for quite sometime. The age profile of our employees is also on the higher side. So, we have decided to infuse fresh blood,” UBI chairman and managing director PK Gupta told ET. The bank had last recruited POsin2005.

Most public sector banks are now struggling with their ageing employees, This is despite the fact that India boasts of world’s largest youth population with 70 crore under 35 years of age, reflecting almost 62% of its total population. UBI has a head-count of 16,500 employees with average age nearing to 50.

DLF ties up with US co for selling life insurance products

DLF ties up with US co for selling life insurance products

CHENNAI: Real estate major DLF has entered into an agreement with US-based Prudential Insurance to set up a joint venture company to sell life insurance products in India. The company, which would be coming up with one of the country’s largest IPO to net Rs 9,625 crore, in its red herring prospectus, said it was exploring various business opportunities, including hospital properties, AS Minocha, chairman of DLF Commercial Developers, a group company, told reporters here on Monday. He said the company had got the Centre’s approval for setting up five special economic zones and was awaiting approval for two more, including one here.

K C Chakrabarti is PNB chairman

K C Chakrabarti is PNB chairman
MUMBAI: KC Chakrabarti is the new chairman of Punjab National Bank. Four other CMU appointments cleared by the ministry of finance are—T.S Narayansami for Bank of India, Alok Mishra for Oriental Bank of India, M S Sundara Rajan for Indian Bank and
S A Bhatt for Indian Overseas Bank.

PNB calls off Kazakh JV with Allahabad Bank

PNB calls off Kazakh JV with Allahabad Bank

MUMBAI: Punjab National Bank has decided to call off a proposal to set up a joint venture subsidiary with Allahabad Bank in Kazakhstan. The JV proposal was floated in 2004 when PNB had an office in Alamty. Since then the bank had received permission for a branch.

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