RBI lodged complaint against SBI alleged fake notes

In Bihar East Champaran district, situated on the Indo-Nepal border fake currency notes are being circulated which has taken inquisitive turn. The Reserve Bank of India (RBI) lodged an FIR against the State Bank of India (SBI) for depositing fake currency notes in the RBI. The FIR was lodged by the RBI’s Patna-based manager Robin Tirkey at the Town police station of East Champaran's district HQ town of Motihari. In his complaint manager alleged as many as 23 fake notes of Rs 500 denomination were deposited in the RBI treasury by SBI on different dates.

Motihari assistant superintendent of police (ASP) Anil Kumar Singh informed investigation is being done. In East Champaran there are as many as 14 SBI branches and their payments come to the Motihari SBI branch which deposits the same in the RBI.

SBI's Patna-based GM Sameer Sharan showed false ignorance about such an FIR. He told TOI, "Today being a holiday on account of Bakrid, we will have details by tomorrow and we will do the needful".

For quite sometime the bordering district has been in the news as it is considered as a haven of fake currency racketeers. Police teams of different states keep descending on the Nawtan block in the district and conduct raids following leads on fake currency. Several arrests have also been made from the block.

Last month two such racketeers belonging to Nawtan were arrested in Delhi with fake notes worth Rs 70,000. In a bigger haul, a few days ago local police have made arrests; four such racketeers have been arrested with Rs 11 lakh worth fake notes near Motihari town.

SBI to expand branch network in A&N Islands

State Bank of India (SBI) officer informed that it will be opening its branch in the Andaman & Nicobar (A&N) Islands to boost the Union Territory's economy.

SBI Chief General Manager, Bengal Circle, Jayant Kr Sinha briefed a group of visiting journalists that the number of branches will be increased from 18 to 20 by the end of the current financial year.

Sinha also told by December the number of ATMs will be also be increased from 11 to 16, adding to that he said one will be installed at Car Nicobar Islands.

SBI, is the lead bank of the Andaman & Nicobar Islands, will also start income generation activity among the unemployed youth in the Union Territory, for this it has collaborated with Nabard to set up a training institute under the Rudseti (rural development and self training institute) program.

Sinha said that as the island is lacking in industrial activity, the bank will pass on financial assistance for fisheries, horticulture and floriculture.

The credit-deposit ratio in the island has been low at 36. With time in the island tourism has gained importance therefore the bank will be extending finance for developing related logistics in the area.

SBI to offer round-the-clock banking facility in Lucknow

State Bank of India (SBI), is India’s largest public sector lender. A senior bank official informed that it will be launching a 24-hour banking service in Lucknow.

The bank's chief general manager Shiv Kumar told IANS, "We will offer round-the-clock banking facilities at a centre that will be set up at the main SBI branch in Hazratganj".

Bank will be providing facilities like internet banking, mutual funds and insurance services at the centre, to instigate it as 'Banking Plaza'. Basically the new facility is targeted at customers who are unable to avail of services during regular working hours between 10 a.m. and 5 p.m.

Kumar informed that the process to setting up of the new centre will start next month. He said, "Once the Plaza is set up, customers need not bother about the fixed timings".

As per SBI officials report the bank is having over 60 million customers across Uttar Pradesh.

SBI Card to announce ‘financial difficulty package’ for defaulters

The State Bank of India (SBI) country’s largest bank soon will be rolling out a “Financial difficulty package” for its customers who were regular with their repayments however, have defaulted in the recent months owing to difficult financial circumstances.

“We are planning to roll out a package which would include enhancement of the loan tenure and a downward revision of interest rates,” said SBI Card CEO Diwakar Gupta.

At present the company is charging an interest between 3.1-3.35 per cent and the revised interest charged for the defaulters would be around 2.5 per cent. Expressing views about the rising delinquencies, Gupta said the company is performing at parity with the industry standards.

“We are neither better off nor worse compared to the industry standards. Our delinquencies are in line with the industry average of around 15 per cent,” he added.

In the meantime, SBI Cards & Payments Services has signed an agreement with Dena Bank to launch a co-branded credit card. State-run Dena Bank is having a credit card holder base of 10,000 of which 6,000 are active.

Executive Director Bhaskar Sen informed “Banking and credit card management are different and our core competence lies in banking, so we decided to partner with a professional organization for credit cards”.

State bank to reduce deposit rates before cutting lending rate

A senior official of State Bank of India, the country’s largest public sector lender informed that immediately there are no plans to cut lending rates at least not before reducing deposit rates

The official pointed out, “The (overall) effect of the measures taken by RBI will come with a lag. The cost of funds may not come down overnight”.

The official said a close monitoring is being down about the situation. The Asset-Liability Committee of the bank held the meeting last night to review the situation but no decision was taken on interest rates. The panel will be meeting once again today or on Friday.

Reserve Bank of India to permeate liquidity in the cash-starved system has reduced banks’ cash reserve ratio by 250 basis points in the last nine days to 6.5 per cent, including the 100-bps cut Wednesday.

On the other hand state-owned Punjab National Bank showed an immediate reaction on Wednesday’s RBI measures by reducing its home and car loan interest rates by 50 bps late Wednesday.

But State Bank of India will probably keep a watch on the situation for some more time.

“It is too early to decide whether to cut lending rates. And before lending rates, it is deposit rates which has to be reduced,” the official said.

On October 1, SBI had announced a new deposit scheme offering 10.5 per cent on 1,000-day deposits. Previously, the bank was offering 9.50 per cent on deposits having tenure of two years to less than three years.

State bank to reduce deposit rates before cutting lending rate

A senior official of State Bank of India, the country’s largest public sector lender informed that immediately there are no plans to cut lending rates at least not before reducing deposit rates

The official pointed out, “The (overall) effect of the measures taken by RBI will come with a lag. The cost of funds may not come down overnight”.

The official said a close monitoring is being down about the situation. The Asset-Liability Committee of the bank held the meeting last night to review the situation but no decision was taken on interest rates. The panel will be meeting once again today or on Friday.

Reserve Bank of India to permeate liquidity in the cash-starved system has reduced banks’ cash reserve ratio by 250 basis points in the last nine days to 6.5 per cent, including the 100-bps cut Wednesday.

On the other hand state-owned Punjab National Bank showed an immediate reaction on Wednesday’s RBI measures by reducing its home and car loan interest rates by 50 bps late Wednesday.

But State Bank of India will probably keep a watch on the situation for some more time.

“It is too early to decide whether to cut lending rates. And before lending rates, it is deposit rates which has to be reduced,” the official said.

On October 1, SBI had announced a new deposit scheme offering 10.5 per cent on 1,000-day deposits. Previously, the bank was offering 9.50 per cent on deposits having tenure of two years to less than three years.

Bank holidays to leave common man in lurch

Few days back it was bank strike and now the holidays are going to hit the banking operations and affect the daily life of people to a large extent. During the two day strike the banking operations in all the branches of public sector banks including State Bank of India and its associates had come to stand still and now in this month of October the festival season has started meaning a number of holidays is going to leave the common man in lurch.

Now banks will be closed for public on September 30 on account of half-yearly closing; then in some states banks will be closed on Wednesday or Friday for Eid. After this the banks will be closed for Gandhi Jayanti on October 2. Then banks will open for one day in between and again they will get in the weekend mood.

However bank branches in the financial capital, will remain open for business on Friday. The spokesperson of ICICI Bank informed that the bank will remain open on Friday although its Goa branches will remain closed because of the festival of Eid. However He added in case the Maharashtra Government declared a holiday on Friday, banks will remain closed in Mumbai also. While a Canara Bank spokesperson said that banks will be closed on October 2 but will remain open on Friday.

A member of the All India Association of Industries (AIAI) said, “Industry will also suffer if banks remained closed for so many days. Cheques and other transactions will be delayed. This is not in the interest of a growing economy like India’s”.

State Bank of Patiala hiked Interest Rates on NRE term Deposits by 3.71%

After, the Reserve Bank of India (RBI) lifted the ceiling on rates by 50 basis points to attract more dollars into the country. Banks have started hiking the interest rates on NRE/FCNR terms.

State Bank of Patiala has hiked interest rates on NRE term deposits to 3.71 % per annum for one year up to and less than 2 years, to 3.81 % for a maturity period of 2 years and above but less than 3 years and to 4.13 % p.a for 3 years and up to up to 5 years. The rates will come into effect from18 Sept., 2008

In a press release bank has stated the interest rates on FCNR (B) deposits in USD have been increased to 2.96% p.a for a period of 1 year and above but less than 2 years, to 3.06 % p.a for 2 years and above but less than 3 years, to 3.38 % p.a. for 3 years and above but less than 4 years, to 3.60 % p.a. for 4 years and above but less than 5 years and to 3.76 % p.a. for a period of 5 years.

Likewise, interest rates on FCNR (B) deposits in Australian Dollars have been hiked to 7.22% p.a for a period of 1 year and above but less than 2 years, to 6.54 % p.a for 2 years and above but less than 3 years, to 6.49 % p.a. for 3 years and above but less than 4 years, to 6.52 % p.a. for 4 years and above but less than 5 years and to 6.49 % p.a. for a period of 5 years.

Dena Bank in tie-up with SBI to launch its new credit card

Dena bank soon will be signing an agreement with State Bank of India to launch its new credit card, to make its market position strong.

Dena bank's Chairman and Managing Director P L Goirala told reporters that, "Even 10 years after launching the Dena credit card, we have not been able to make much dent in the market. Hence we decided to go ahead with the SBI."

He informed that the final shape to the agreement will be given in the next one month wherein all the formalities will be completed.

"Our talks are in advanced stage. SBI will handle all the back office functions and other process... It will be mostly on revenue sharing basis," he said.

Goirala agreed that in spite of being in the credit card business for last ten years, they have not been able to forcefully drive the product in the market.

He informed that the new card will carry logos of Dena and SBI together.

At present Dena Bank is having 1165 branches and 325 ATMs. "This quarter the deposits have gone up by 23.82 per cent as against the last year and gross credit by 26.55 per cent," he said.

He told bank has opened 26 new branches during 2007-08 and have plans to open 25 more this year and adding up150 ATMs to its chain.

SBI extends Debit Cards cash back campaign upto Sept 30

State Bank Group had started cash back campaign on 1st July 2008 for two months to promote the usage of Debit Cards on POS. On getting the overwhelming response from the Debit Card holders, Bank has decided to extend the offer period by another month – up to 30th September 2008.

In addition to cash withdrawals and other utilities like fund transfer, donations, mobile top up, payment of fees, etc., State bank customers will also be able to use their debit cards to pay for purchases, restaurant bills, hotel bills, airline tickets, etc. Payment with Debit Cards for goods and services is easier than writing cheques and safer than carrying cash. Debit cards allow users to have a greater control over their expenses unlike a sbi credit card. Even there is no fear of penalty and interest charges on late payment.

All the State Bank Debit Card holders through out the country will be able to avail the offer on the POS transactions made from 1st July to 30th September 2008. The customers will get cash back as under :-

The cash back on transactions (other than on ATM withdrawals and Internet transactions) will get credited to customers’ accounts within 4-6 weeks of the end of the Campaign. The maximum amount of cash back bank is offering during the entire period of offer (01.07.2008 to 30.09.2008) will be Rs.1000/- per debit card.

SBI launched loan scheme ‘SBI Hrudaya Suraksha Scheme’ for poor

State Bank of India (SBI), the country’s largest commercial bank, launched a special loan scheme for the poor heart patients named ‘SBI Hrudaya Suraksha Scheme’. The scheme will be available for the patients who are undergoing cardiac treatment at the Narayana Hrudayalaya in Bangalore.

The loan scheme was launched by Muhammad Yunus, founder of Grameen Bank of Bangladesh and Nobel Laureate for peace in 2006.

Speaking at the launch function, SBI Chairman O P Bhatt, said SBI has been working out the plans so that it can reach to the larger sections of the society and the new loan scheme is part of one such initiative to help the poor heart patient who has to undergo heart surgery. He added bank in the future will be coming up with more complex products in association with Narayana Hrudayalaya.

Mahpara Ali, chief general manager, SBI, Bangalore, while explaining about the scheme said the SBI Hrudaya Suraksha Scheme is a hassle-free loan product which aims to help the poor patient meet the huge medical expenses in getting the treatment and surgery.

As per the scheme SBI will be lending around 80 per cent of the medical expenditure or Rs 50,000, whichever is lower? The borrower will be required to repay the loan amount in six months with no interest for the first three months.

After three months, interest will be charged on the loan amount which will be of 8.5 per cent. The loan scheme will be available only to poor patients and as per the on recommendation of the hospital. She said that bank will be lending out to about 30-50 patients per month initially.

Dr Devi Prasad Shetty, chairman and managing director, Narayana Hrudayalaya said, “We need to bring in innovative schemes and investments to shore up healthcare cover in the country. Healthcare, especially heart care, needs huge investments. The present demand is 25 lakh heart procedures a year, but only 80,000 procedures are carried out across various hospitals”.

Ali said, “Talks are on with Narayana Hrudayalaya as to how to link self help groups (SHGs) in Karnataka for healthcare schemes. Integration of SHGs and healthcare schemes are being worked out”. She further added “State Bank of India along with few non-government organisations (NGOs) in Karnataka has exposure to 50,000 SHGs and has disbursed loans to the tune of Rs 200 crore”.

UBI to sell SBI mutual fund products

United Bank of India (UBI) will be selling SBI mutual fund products through its branches. An agreement was signed between SBI Funds Management Pvt Ltd and UBI.

SBI Funds Management Pvt Ltd has tied up with United Bank of India (UBI) for selling mutual fund products through UBI branches.

Achal Kumar Gupta, Managing Director, SBI Mutual Fund said, tie-up with UBI is significant as the bank’s network of branches across the country will be utilized for selling mutual funds products. “Distribution and reach coupled with superior fund performance and efficient customer service hold the key to achieving success,” he said.

P K Gupta, CMD, United Bank of India, said, “The partnership with SBI Mutual Fund will enable us to offer more quality products to our customers.” He added customers will be benefited with this new arrangement.

State Bank of Travancore raised BPLR by 14 percent

Last week the Reserve Bank of India (RBI) raised its benchmark rate for the third time in two months. The apex bank raised by a higher-than-expected 50 basis points to 9 percent is the highest in seven years and the cash reserve ratio by 25 basis points.

Following this State Bank of Travancore, a unit of State Bank of India, the country's biggest lender, has raised its benchmark prime lending rate by 50 basis points to 14 percent with immediate effect.

Consequently, several state-run and private sector banks have started raising their respective lending rates, citing higher cost of funds.

SBI-SBS merger gets approval from cabinet

State Bank of India and State Bank of Saurashta merger has got the final approval from the cabinet. According to State Bank of India sources merger process will get completed within three months.

SBI Chairman O P Bhatt told the reporters, "We expect to complete the merger before this calender year in the next three months. This would be a good learning experience to proceed to the mergers of other associates".

Other associates which will be in the process of merger are State Bank of Travancore, State Bank of Indore, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad and State Bank of Patiala.

Bhatt informed that State Bank is holding 59.41 per cent share in the government, has enough headroom to raise capital even with a 4 per cent dilution in the holding.

"The holding can be brought down by 8 per cent. Even a 4 per cent dilution will give enough headroom to raise capital," Bhatt said.

In the given financial conditions, the apex bank may go for further tightening in the monetary policy. Bhatt added the central bank might look for a 0.25 per cent hike in its Cash Reserve Ratio or repo rate.

SBI launched its first debit card in Canada

State Bank of India (SBI) has seven branches across Canada, has launched its first debit card in Canada with an aim to increase its clientele profile in the country.

The State Bank of India-Canada (SBIC) - SBI's 100 percent-owned subsidiary – maintains that it has been able to encapsulate about 65 percent of the trade conducted between that country and India.

During the launch of the card SBI chairman O. P. Bhatt said bank is looking at 84 locations globally to increase its association with international business.

He informed that by using debit card customers will be able to withdraw cash at all cash vending machines at SBIC branches, and will be accepted in the US and around world. Customers will be able to use the card for withdrawal in India also; here SBI has 14,000 automated teller machines (ATMs).

Bank sources said SBIC clients can also access other ATMs around the world displaying Interac, Cirrus and Maestro symbols.

Besides, the debit card can also be used for purchases from merchant members in Canada, the US and other countries.

SBIC president and chief executive Arun Nagaranjan said, "The debit card will provide our clients with access to their money around the clock and around the world".


At the promotion of the debit card at a gala dinner Wednesday night, Bhatt, who had flown in from India, said with the launch of debit card SBI’s has completed product profile in Canada 26 years after it started operations in the country.


Currently the Indian economy is growing at a rate of about nine percent with its exports and imports increasing by 20 to 25 percent annually, the SBI chairman informed that his bank is ready for increasing its global presence to meet demands of its business clients.

He added, "Till last year, our international business contributed seven percent to our balance sheet, and about seven percent of our profits. This year, it went up to 10-11 percent. We want to raise this figure to 25 percent in the next five years".

Bhatt informed that SBI have to expand outside India as 50 percent of business houses engaged in international business are banked with it.

"Since we are the largest financial service provider in India, we have to go where our clients do business. We are looking at 84 locations around the world to increase our engagement with international business," he said.

Bhatt added SBIC, in spite of being a 100 percent-owned subsidiary, was in fact a Canadian bank as it was integrated here. "Thus, it enjoyed all the advantages of a Canadian bank and the advantages of its parent bank - the SBI," he said.

"The bank has already captured about 65 percent of the total trade between India and Canada. But given our advantages, we would like to capture a larger percentage."

Bhatt said for the expansion of the business abroad the second area involves capturing the non-resident Indian (NRI) segment - whether it is their remittances or their local businesses.

"Increasingly, SBI is offering facilities of banking transactions for NRIs to meet their requirements such as buying a house in India," he said.

Then the third area of push for the SBI in its proposal for the expansion of global operations is to increase its operations in the retail and corporate sector.

Bhatt also informed SBI has planned more branches in Canada, possibly next year.

Coir Board and SBI sign MoU for REMOT Scheme

Coir Board has launches a scheme in Kerala with the cooperation of banks. Through scheme named as REMOT Scheme (Rejuvenation, Modernization and Technology Upgradation Scheme) two categories viz – spinning category and household category will be benefited.

The Memorandum of Understanding has been signed on implementation of REMOT Scheme of Coir Board. On behalf of Coir Board, Government of India MoU was signed by M Kumararaja, and by K Neelakandhan, Assistant General Manager (SME), SBI.

The MoU was signed and exchanged in the presence of A.C.Jose, Chairman, and Coir Board.

On this occasion Jose said, “This is the first time in the history of Coir Board that such a novel Scheme with maximum out lay is implemented in the Coir sector for the benefit of workers in the spinning as well as products sector”.

Jose added Coir Board is implementing a novel Coir centric Scheme to benefit the working class in the Coir sector in the XIth plan.

While the State Bank of India (SBI) has expressed its willingness of full cooperation to Coir Board for the implementation REMOT Scheme and to consider/disbursal of term loan in Kerala as outlined in the Scheme.

Under the scheme any individual, self-help group or a group of persons who want to engage themselves in the coir spinning activity or are already in the coir spinning activity are eligible for the benefit.

The total cost of the Scheme is Rs. 243 crore. The expenditure comprises of Central Government subsidy of Rs.99 crores.

The unit cost for a spinning unit has been worked out at Rs.2.00 lakhs. The beneficiary contribution, either in his individual capacity or in his collective capacity, will be about Rs.10000. The rest of the grant amount of Rs.80000 will be deposited by the Board in the Bank.

The bank will be providing Rs.1, 10,000 as term loan to the unit at a lower interest rate. The term loan obtained from the bank will have a time period of five years from the date of sanction.

Likewise, for the small household sector, the unit cost ceiling has been fixed at Rs.5.00 lakhs. The beneficiary will have to contribute about Rs.25, 000. The Bank will provide Rs. 2,75,000 as term loan with attractive interest which will have set time period of 5 years. The Board will be depositing the grant portion of Rs.2,00,000 with the Bank.

State Bank of Saurashtra merger bill passed by Union Cabinet

Finally the State Bank of Saurashtra merger bill has got the approval from Union Cabinet. The State Bank of Saurashtra will be merging with the State Bank of India to enable it to increase in terms of footprint, manpower and other resources.

According to sources the merger will enable the bank to become efficient for facing competition arising from globalization of the economy, along with better management of risk.

The Union Cabinet gave approval to the following proposals for the merger:

1. Issuing of order sanctioning the Scheme of Acquisition of State Bank of Saurashtra by the State Bank of India, in terms of section 35(2) of the State Bank of India Act, 1955

2. to introduce Bill (a) repealing the State Bank of Saurashtra Act, 1950 in the Parliament, (b) to make important amendments in the State Bank of India (Subsidiary Banks) Act, 1959 to remove references to State Bank of Saurashtra wherever it occurs in the State Bank of India (Subsidiary) Banks Act, 1959.

The bill passed by the Union Cabinet will be called namely State Bank of India (Subsidiary Banks) Amendment Bill, 2008.

SBI will hire 3,000 marketing and recovery officers

The country's biggest lender, State Bank of India (SBI), will be hiring 3,000 marketing and recovery officers. The lender is carrying out recruitment drive for the second time in less than a year in the midst of the displeasure expressed by the regulators and the judiciary on the high-handedness of agents hired by banks to recover loans.

Looking for the applications by August 16, SBI sources said the position of officer (marketing and recovery) for its rural operations will have a contract period of two years. Earlier in October 2007, SBI had announced plans to hire 3,000 marketing and recovery officers whose job profile would include "soft recovery" of loans.

In addition, these officers will be responsible for marketing of bank’s products, conduct pre-sanctioned survey, file applications and verify the documents. At present it is not clear about the emoluments being offered in the latest hiring drive, whereas in its October announcement the bank had said these officers will be given a compensation package of Rs 2 lakh per annum.

As per SBI's latest annual report, the bank had a total 1,79,205 employees as on March 31, 2008, making it the biggest employer in the country's banking space.

SBI and its associate bank customers get cash back offer on debit card

Country’s largest bank State Bank of India launched a ‘Cash Back’ offer for its Debit card holders through out the country. The scheme has been launched from 1st July to 31st August 2008. During the campaign period customers of State Bank of India and its Associate bank customers who use their debit cards for making payments for Rs 501/- or above will be eligible to get cash back up to 5% as under.

Bank sources clarified the cash back scheme is not applicable on ATM withdrawals and Internet transactions and the amount will be credited to customers' accounts within 4-6 weeks of the end of the campaign. The maximum amount limit of cash back during the period of offer will be Rs.1000/- per debit card.

State Bank Group is largest debit card issuer in the country having more than 37 million Debit Card holders across the country, who have access to more than 8500 ATMs of the Bank and about 9000 additional ATMs of 13 other banks under bilateral sharing arrangements.

In addition to cash withdrawals and other utilities like fund transfer, donations, mobile top up, payment of fees, etc., State Bank customers gets the facility to use their debit cards to pay for purchases, restaurant bills, hotel bills, airline tickets, etc. Using Debit Cards for payment for goods and services is more convenient than writing cheques and safer than carrying cash. In credit card people tend to spend more but in case of debit cards users have greater control over their expenses with no chance of overspending. On debit card there is no chance of penalty and interest charges for late payment.

SBI’s first quarter report shows recovery of Rs 2,000-cr bad loan

State Bank of India (SBI) in its first quarter results is likely to report on improvement in its asset quality. As per reports from SBI top sources bank has been able to recover bad loans worth around Rs 2,000 crore during April-June 2008.

Though top SBI executives, refused comment on this. SBI managing director SK Bhattacharyya said: “We can’t divulge details before the first quarter results announcement.”

During 2007-08 SBI’s credit quality had declined, since it had booked fresh bad loans worth Rs 2,700 crore, mainly on account of retail loans, and to some extent, mid-sized corporate loans. As per data, on March 31, 2008, the bank had gross non-performing assets (NPAs) of Rs 12,837 crore as compared with Rs 9,998 crore, a year back.

“On the other hand, the bank is slated to make a provision of around Rs 1,000 crore against mark-to-market (MTM) losses of its investment,” an SBI official said on conditions of anonymity. Official told that out of the available sum, around Rs 700 crore is expected to be provided for against depreciation of bonds the bank received from the government on account of its rights issue.

During April- June 2008 banks booked MTM losses against depreciation of bonds and equity investments. However, it is expected that SBI might click double-digit growth in the first quarter to June 30, 2008 over the corresponding period a year back in spite of the fact that the demands for loans from sectors like commercial real estate and auto has slowed down.

If we look at SBI’s bad loan management, it being said that government’s debt waiver-cum relief scheme will help SBI reduce its bad loans by another Rs 2,000 crore. SBI has waived off over dues of around 25 lakh farmers, aggregating about Rs 7,000 crore. According to SBI inside sources, “It’s estimated that around 30% of the total waived sum had become NPAs”. While as on March 3, 2008 gross NPA stood at 3.04% and the net NPA stood at 1.78%.

SBI Life to launch its individual health insurance plan

SBI Life Insurance Company is a joint venture between BNP Paribas Assurance and the State Bank of India. The company is planning to launch its first individual health insurance plan next month.

U.S. Roy, managing director and CEO, SBI Life Insurance Company informed, “We got the approval of the insurance regulator for the product last month and at present we are upgrading our information technology system for this product. Hopefully, we’ll launch our first standalone health insurance plan in August.”

Foreseeing big business in health insurance, the well established insurance companies like Life Insurance Corporation of India, Bajaj Allianz Life Insurance, Reliance Life Insurance and Tata AIG Life Insurance have already launched their individual plans besides offering critical-illness riders.

Similar to the other life insurers, SBI Life’s health insurance scheme will also have a defined benefit plan where the policy-holder will be given a predetermined sum in the case of hospitalization.

Only Bajaj Allianz has recently introduced a family floater insurance plan under which the hospitalization bills will be reimbursed subject to the sum assured — similar to the mediclaim policies of the general insurance companies.

In 2007-08, SBI Life earned a total premium income of Rs 5,622 crore, of which income from new policy sales was Rs 4,800 crore. “Our net profit for the year stood at Rs 34 crore compared with Rs 3.5 crore in 2006-07 and Rs 2.02 crore in 2005-06,” Roy said. The life insurer showed a growth in net profit for the third year in a row. It was integrated in March 2001.

“We have shown more than 100 per cent growth in business during the first quarter of the current fiscal. However, since we provide mark-to-market provisioning for our investments as a prudential practice, though it is not required for long-term investments such as life insurance. Our growth in profitability will not be much given the turmoil in both stock prices and interest rates,” Roy said.

In the first quarter of 2007-08 SBI Life earned a premium income of Rs 426 crore from new business. Between April and June this year, the insurer is expecting a first year premium income of between Rs 800 crore and Rs 900 crore.

Roy said, “For the current financial year, our target is to achieve a total premium income of Rs 10,500 crore and a first year premium income of Rs 8,500 crore”. The SBI Life ranks second in terms of market share among private life insurers in the country.

SBI plans to start film ticket vending through its ATMs

Country’s largest public sector bank the State Bank of India (SBI) senior official informed on an experimental basis is planning to start film ticket vending through its automatic teller machines (ATMs) in Uttar Pradesh.

Chief General Manager Shiv Kumar said SBI is having talks with technical service providers and multiplexes in some of the major urban centers in the state in this regard.

Kumar informed media, "We are looking at the feasibility of the plan but are confident we will be the first bank to offer this service".

He added, "Considering our large network of ATMs, our customers will have the option to buy film tickets from anywhere, without worrying about the long queues at cinema hall counters."

SBI reduces educational loans

The country’s largest public sector bank State Bank of India, has reduced interest rates on educational loans. The rates for loan amounts above Rs7.50 lakh have been reduced from 13.25% to 12.25%


Whereas, on the loan amounts less than Rs4 lakh the rates have been reduced from 12.25% to 11.75%. Rates for loan amounts above Rs7.50 lakh have been reduced from 13.25% to 12.25%. Meanwhile interest rates for amounts between Rs4 lakh and Rs7.50 lakh have remained unchanged at 13.25%.


Soon other banks might be following the suit. Says M.P. Murugan, assistant general manager, Allahabad Bank: “We are the leader in the educational loan space. We already have special lower interest rates for IIT and IIM students, at 11.25%. However, if the need arises, we may look into reducing our rates as well.”


N.R. Shet, general manager, Corporation Bank, said “We do not have immediate plans to reduce educational loan rates, but you cannot rule out the possibility of us doing so. Our rates are not that high, so we will wait and watch.”

Hsoc Matthai, 17, a student from Mumbai Any cut is, of course, good news for students expressing his views said, “Educational loans are necessary. My brother and I are planning to go for professional courses this year. Even a small decrease in interest rates makes a lot of difference. We would rather go to a bank that offers lower rates.”

SBI-Vijayawada will extend its branch network by opening 15 new branches

State Bank of India, Vijayawada branch will be setting up 125 ATMs and 15 new branches during 2008-09 as its extension plan. The region includes 205 branches in Krishna, Guntur and West Godavari districts. Earlier in 2007.08, the bank had opened 93 ATMs and 18 new branches.

Ravindra Joshi, module deputy general manager, informed the deposits of the division has increased by Rs 933 crore taking the total deposits to Rs 4,190 crore whereas advanced increased by Rs 1,241 crore, to Rs 5,920 crore.

He said the division gave Rs 342.89 crore loans for crop to 60,561 farmers. Then a sum of Rs. 12.61 crore had been given as advance to farmers for purchase of 507 tractors. The division helped in forming 1,211 rythu mithra groups and loaned them Rs 13.52 crore.

The bank has also go into contract farming under which it has given advance of Rs 18 crore to farmers in this regard while Rs 10.14 crore was advanced to dairy farmers. The small scale industries were given Rs 184 crore, while for housing loans it gave Rs 133 crore and education loans Rs 133 crore to 6,200 students. The bank has also financed 17,830 women self-help groups (SHGs) with Rs 178.30 crore. It advanced Rs 15.35 crore to 2,922 weaker section people.

All the branches in the division have been networked under core banking. He informed the branches had adopted 337 girl students from weaker sections under "Adoption of Girl Child" scheme and contributed Rs 9.34 lakh for pursuing their education.

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SBI against raising rates on lending for now

From this month Bank of India (SBI), the country's largest lender, had increased the rates on domestic deposits but for time being it is against raising interest rates on lending. This move of SBI is being considered as to set the tone for other banks.

On Saturday meeting of the assets-liability committee (Alco) was held in which a decision was taken. For the second consecutive day Alco held the meeting to discuss the issue of interest rates in the wake raise in repo rates last week by the Reserve Bank of India's (RBI), or the rate at which it lends to banks, by 25 basis points to 8 per cent.

SBI is in a different situation as its cost of funds has gone up due to an increase in deposit rates earlier this month.

On Thursday, SBI chairman Om Prakash Bhatt had informed that the bank might take a decision on raising its prime lending rate or alternatively, increase the interest rate on some of its loans to deal with the higher cost of borrowings.

Hours before his bank’s Alco meeting in Mumbai, Bhatt said in Hyderabad that SBI in the present situation might absorb the hike and will decide only after a while.

A Bank of Baroda executive said, "We will wait and watch how the industry leader moves and then decide our stance."

Bank of India senior official clarified that for the moment there bank has no plans to change in rates. "Liquidity is our prime concern but the situation is expected to change after a week," the executive said.

The first installment of advance tax has tightened the liquidity position, is estimated to have sucked out around Rs 15,000 crore from the system.

However call rates have gone up to above 8.30 per cent and is expected to cross 8.50 per cent this week. The profit on 10-year government securities has established to 8.38 per cent on Friday following inflation hitting a seven year high of 8.75 per cent.

SBI introduce centralizing pension payment work through its CBS

The largest public sector bank State Bank of India is taking initiatives to provide improved customer service to its customers. Bank under its Business Process Re-engineering Project, took one more step forward by centralizing pension payment work through its Core Banking Solutions (CBS).

Bank has setup fully computerized Centralized Pension Processing Centers in each of the 14 LHO Centers of the Bank, to extend standardized and timely pension payment. About twenty two lakh pension accounts handled by over 6800 branches spread across the country have already been covered under this initiative, and the remaining CBS branches soon will be brought under this domain.

Shri K. Sitaramam, Dy Managing Director & Group Executive (NBG) informed that, with this initiative of the bank pensioners will get very important benefits are. Under this pension will be accurately credited to their account on a common date across the country.

Basic difficulties in the decentralized process have been overcome therefore the receipt of revised instructions from the Government on account of D.A revision etc. and the communication to all branches including in far flung areas is no longer required. The amended rules are very quickly taken care of at the central level. The pensioners have been assured that the amount paid will be correct and uniform across the country.

As per Govt. directives, one time submission of life certificate in November each year would require a visit to their branch. But for pension, the pensioners are not required to come to the branches for withdrawing their monthly pension. They can withdraw money any time- anywhere (24X7) through over 8500 ATMs of State Bank free of cost or even know / transact through Internet Banking. Pension payment slips and details of pension paid will continue to be given by the Pensioner’s branch.

Shri Sitaramam added that the Central Govt. pensioners under Central Civil and Defence category will now be able to change their pension branch in a quicker and simpler manner. Pensioners who are keen to avail the benefits of the centralized pension processing can do so by approaching a nearby CBS branch of the Bank to open their account.

SBI to cover 548 branches under CBS

Core Banking Solution (CBS) was inaugurated at Serango of Gumma block in Gajapati district by State Bank of India (SBI) chief manager Mr MN Rao. Speaking at the inauguration Rao said all the 548 branches of SBI, in Bhubaneswar circle will be brought under Core Banking Solution (CBS) platform by the end of June 2008.

Mr Rao said “SBI is committed to provide world class technology to the people of the state, even in the remote and backward areas”. “The implementation of CBS at a remote branch like this is a bright example of the bank’s commitment towards public service”, he added.

The deputy general manager Mr BV Sarangi was also present at the occasion said that the SBI has opened 14 branches with this module in the year 2008-09. He informed, “The deposits level of the bank was Rs 4,051 crore with advance of Rs 2,032 crore”.

Earlier, during February this year the Bhubaneswar zone which comprises 199 branches in 10 coastal districts was fully placed on CBS.

Currently through core banking platform more than 99 per cent of the circle’s business is carried out. Under this scheme all the branches are connected to more than 9500 branches of the bank, sources said.

Bank sources said that under CBS, the customer can access his account in any branch of SBI and also enjoys the facility of depositing as well as withdrawing from any branch and through real time gross settlement system and national electronic funds transfer system can remittance to nationalized and private banks. The facility of internet banking and issue of ATM cards are available at the entire core banking branches.

Currently, the bank has 316 ATM counters with 21 of them installed in various railway stations. It has plans to install 369 more counters during the year, out of which 18 have been earmarked for railway stations. Bank has also extended credit facilities to about 11,800 SHG in Orissa.

SBI to focus on non-banking businesses for major expansion

State Bank of India (SBI) India's largest public sector lender in order to ensure the group remains on a strong growth path it is trying to push growth in its non banking businesses as the banking business pace is getting slow.

SBI has chosen broking business for its major expansion drive for this year, which comes under SBI Capital Markets (SBICAPS).

This year due to increase inflation the share market has gone down and the situation has not improved. SBICAPS has missed out strongly in Bull Run in equities therefore it has decided to expand its broking presence in tier 2 and tier 3 cities.

“We are trying to leverage the huge network that our parent has and use that as an advantage of existing players,” said A P Verma, MD & CEO, SBICAPS.

Working on the process this year SBICAPS' broking subsidiary has already opened 5000 new broking accounts and has worked out plan for adding another 50,000 accounts in the coming year.

As SBI is working through for increasing its retail presence in the broking business, it is being expected that the revenue from the division will contribute just Rs 100 crore to the kitty because of the low margin nature of the business.

On the other hand SBICAPS is trying to enhance its presence in higher margin areas like loan segment and project financing.

Over the next year, SBICAPS have made plans to earn significant revenue especially from large power projects that are in the pipeline.

"We are involved in all the major power projects and expect to be a big player there,” added Verma.

SBI’s mainstream business is of lending and recent shift in focus towards non-banking subsidiaries points out that in the coming months the credit growth is going to slow down even further.

Slow down in credit growth will add pressure on the State Bank Group's consolidated finances, hence the top management expects that businesses like SBICAPS will help in reducing some of that pressure.

SBI Credit Card wins Trusted Brand 2008 Survey award

SBI Card, a joint venture between State Bank of India and GE Money, has won the Gold Award as India’s most trusted brand in the Credit Card category in the Reader’s Digest Trusted Brand 2008 Survey. SBI Card is one the largest Credit Card issuers in the country and has over 3.2 million credit card holders.

In India in the credit card industry SBI Card has set new standard and in the past its has won many prestigious awards - Rated among the top 2 in Business World survey on Customer Loyalty, 2007 and CNBC Awaaz Consumer Awards, 2007; the latest being the Reader’s Digest Trusted Brand Gold Award in 2008.

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In 2007, SBI Card launched its premium card segment with SBI Platinum Card segment offering unparalleled Travel & Lifestyle benefits to its customers. SBI Card has a wide range of other credit cards such as Silver & More, Gold & More, Tata Card, Hero Honda SBI Card, SBI Railway Card, LG SBI Card, SBI Lifestyle Card, SBI Social Card, and SBI Vishal Mega Mart Card. This unmatched range of SBI Cards and co-branded cards has made possible for more and more Indians to own credit cards and has also been widely appreciated for their offers and services.

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SBI hikes fixed deposit rates by up to 0.50 per cent

India’s largest lender State Bank of India (SBI) announced hike in fixed deposit rates on medium to long term by up to 0.50 per cent. The rates will come into effect from June 1. Last month also SBI had raised fixed deposit rates and the latest move is likely to have a fight on interest rates regime in the banking sector, while the second largest PSU bank PNB said that it would take decision on rates after its Asset Liability Committee (ALCO) meeting.

Statement released by the bank stated the bank has raised interest rates on deposits between two- and 10-year maturities by 0.25-0.50%. Whereas, interest rates on deposits of two year to less than three years has been raised from 8.5-8.75% and that of five years to 10 years will now offer 9%, up from 8.50%. Rates on deposits of three years to less than five years have been increased by 35 basis points to 8.85%. One basis point is a one hundredth of a percentage point. While those on deposits of five years and up to ten years by 0.50 per cent to nine per cent.

Rates on deposits for less than two years have not been changed.

Bank sources said a rise in deposit rates will increase banks’ cost of funds and will increase pressure on their net interest income, which is the difference between the interest earned on loans and interest expended to raise deposits. Whereas public sector banks, led by SBI, had reduced their prime lending rates, or PLR, by 50 basis points in February. PLR is the benchmark rate to which all lending rates of banks are linked.

SBI to give awards to top ranking students of rural higher secondary schools

State Bank of India (SBI) has started Talent Award Scheme under which this year it would be felicitating 1,00,000 top ranking students across 10,000 rural higher secondary schools in the country. For this bank has approved Rs 10 crores for the purpose.

As a reward each of the selected students will get a Certificate of Excellence signed by a top executive of the bank and the school principal concerned and they will be given a cash award of Rs 1,000 either in cash or the Bank will open a saving account with ATM card and internet banking facility into which the money would be deposited.

The bank will also be sanctioning, in-principle, education loan to the rank holders for pursuing higher education. The top three rank holders under each stream viz Science, Arts and Commerce will be eligible for the loan.

Separate awards would be given to the rank holders of the State Board Examinations, ICSE and CBSE.

SBI rollback loan circular on FM’s instructions

Five days earlier the State Bank of India (SBI) had released circular to suspend loans for purchase of tractor and other farm equipment. The Finance Minister, Mr P Chidambaram, today said, the circular was “poorly worded and misunderstood”, he stated that bank has been asked to withdraw the circular.

When the reporters asked for his comments on the circular he said, “That circular was poorly worded and misunderstood. I asked my secretary to advise the bank to withdraw it.” He added loans should be given and recovered but a proper method has to be followed. He further added that at any given time there will be some non-performing assets (NPA). . “I don’t think the circular was justified in the manner it was worded,” he said, adding that the best thing was to withdraw it. “The matter is now closed,” he quipped.

He said loans must be given and recovered but there was a proper method of doing it. At any given time there would be some non-performing assets (NPA), he added. “I don’t think the circular was justified in the manner it was worded,” he said, adding that the best thing was to withdraw it. “The matter is now closed,” he quipped.

On the advice of the finance minister the country’s largest lender SBI yesterday withdrew instructions from its branches which it had issued five days earlier to stop fresh loans for purchase of tractors and other farm equipment.

Bank’s decision to stop tractor loans was strictly opposed by tractor manufacturers, politicians and the farm lobby. The rollback of a commercial decision clearly indicates the bank has acted under pressure.

Commenting on the rollback of the circular by the SBI, Venugopal N. Dhoot, president of the Associated Chambers of Commerce and Industry of India (Assocham) said, "It seemed that the SBI came under heavy political pressure from various quarters, including bureaucracy, which forced it to withdraw the circular which is not a healthy practice in a vibrant democracy like that of India."

"As a result of withdrawal of this particular circular, the balance-sheet of the SBI would adversely be affected and its profitability would erode to a great extent as the bank issued the circular as a pressure practice to affect its recoveries," he added.

In a press meet yesterday SBI chairman, Mr OP Bhatt, said: “We regret that our circular dated 16 May 2008, concerning tractor loans has been misunderstood and has given rise to concern. The circular is withdrawn with immediate effect.”
Although bank is trying to justify the rationale behind the suspension the SBI took a sudden decision to drop it.