Cash back offer on train tickets for SBI credit card holders

The Indian Railways is offering cash back facility to the people who book their ticket through the website of Indian Railways Catering and Tourism Corporation (IRTC). The cash back offer is valid only for bookings made up to November 30, 2010. The scheme is under some terms and conditions.

Passengers can avail cash back between 12% and 14% on rail tour packages. The scheme is only for Indian citizens who are retail customers and own a SBI or Tata card. The customers can avail scheme for packages booked through IRCTC and rail tourism websites using any SBI master card.

The cash back is calculated on the following basis: 12% cash back on total transaction value of tickets up to Rs 7,500 and 14% cash back on tickets above Rs 7500.

SBI credit card holder who avail this offer using card for packages booking, IRCTC will credit back the offer to the account of the passenger within seven working days which will reflect in the SBI cardholder’s monthly statement.

The offer will be subject to the availability at the time of booking and will be governed by the standard IRCTC terms and conditions. The usual cancellation charges/date change penalties will be applicable as per the railways rules for all bookings done through this promotion.

The refunds, if any will be done after deducting the cash back that has been processed while taking the original booking. It the tickets/bookings have been partly utilized in such case there will be no refunding.

The funds for scheme have been provided from a special promotional budget created by IRCTC.

Indian Railways to launch ‘smart card’ in association with SBI

The Indian railway is planning to launch ‘smart card’ for rail users in association with State Bank of India.

Railway Minister Mamata Banerjee at the economic editors' conference said, "We are negotiating with SBI for issuing smart card for rail passengers."

The card will be a multiple purpose one which can be used in metro, suburban and passenger trains. The card can be also used for e-ticketing.

A railway official said, "The modalities are being worked out for the smart card which will be the first of its kind by the railways. We are in discussion with other stakeholders to make it a composite all-purpose card."

Ms Banergee also said, "Every suburban train will have toilet for which test has been carried out already. There will also be facilities for handicapped passengers."

SBI plans to take charges for no-frills accounts transaction

Country’s largest public sector lender, State Bank of India (SBI) is thinking of taking charges from no-frill account holders for every transaction they conduct to make operation of no-frills accounts opened under the financial inclusion plan possible.

An anonymous senior SBI official involved in its financial inclusion initiatives said that the bank will be taking nominal charge which can be either a percentage of the amount transacted or a fixe amount and this will not discourage people from operating no-frills accounts.

The official said, "The question on our minds is -- how do we make the operations of the model feasible? We can recover the Rs 20,000 required for setting up infrastructure in a village through a kiosk or palm-held device by opening around 100 accounts and charging Rs 200 as account-opening fees."

He said although the plan has not been finalized but people will prefer to pay a small amount like Rs3 for a transaction than travelling 20-kilometres to reach a branch.

He added, "You cannot have a model under which the financial inclusion roll-out is subsidized, it needs to be sustainable."

He told, there are some persistent expenses like maintaining the back-end systems and paying the business correspondent (BC) who is operating on behalf of the branch at the village level, of which bank has to take care.

Bank will do campaigning through multiple media which will help in increasing public interest in being a part of the banking system and assuage any concerns.

Regarding, whether such move will face any regulatory hurdles, the official said, "Though the regulators have given us all the freedom, it is very difficult to say (what their reaction will be)."

Bank financial inclusion plan also includes opening of last mile banking infrastructure at village level to get the local population into the formal banking system.

Earlier this year, in his budget speech Finance Minister Pranab Mukherjee had said that all the 60,000 unbanked villages having a population of over 2,000 will be covered by March 2012, and the public sector banks were allotted these villages.
The banks need funds to invest in traditional brick-and-mortar branches, therefore banks are outsourcing the operations to non-bank financial companies by appointing them as BCs to look after the operations.

SBI clerical post receives applications from 3,800 graduate engineers, 200 post graduates

Recently SBI, the country's largest commercial bank gave an advertisement for clerical category. In the advertisement bank had declared vacancy for over 27,000 posts in the clerical cadre, in response to this around 38 lakh aspirants from across the country had applied for the jobs online, 28 lakh of them appeared for the written exam. Out of these 88,000 candidates passed the written exam and 27,000 were selected for an interview.

From the selected 27,000 candidates, 3,800 are graduate engineers, 200 are post graduates in different branches of engineering, 8,200 are women and 2,000 are ex-servicemen.

A senior SBI official was surprised to see such a response from technically qualified candidates said, "It was the biggest such exercise for us. The response to our advertisement was huge. It took a little longer to complete the selection process."

After the global economic crisis, though the job market has picked up still it does not seem to be that favorable for aspiring candidates. The young and potential candidates are finding difficulty in getting job which has led them to rethink about their career. An engineering graduate said, "I come from a leading engineering college. When I applied for the SBI job, there were virtually no vacancies in the manufacturing or IT sector due to recession. I had to seriously look at other options. After all, SBI offers a safe job."

An HR professional who was shocked to see engineering graduates taking up clerical assignments said, "The country boasts of having a large number of engineering colleges. However, it does appear that we are producing engineers without accessing the manpower requirement."

SBI and Western Union tie-up for mobile money transfer in India

State Bank of India (SBI), the largest commercial bank in India has signed an agreement with Western Union, may be the largest money transfer service to India, to offer cross border money transfers service to SBI account holders on their mobile phones. Anil Kapur, Western Union’s Senior VP (South and Southeast Asia), said India is the world’s No. 1 remittance recipient country. According to World Bank figures in 2009 the received figure stood at US$52 billion. At present, consumers through 70,000 Western Union Agent located in 25 countries will be able to send Mobile Money Transfers.

In India, there are 61,000 agent locations of Western Union with the mobile transfer partnership it will be able to expand its distribution within India using SBI’s network. However Western Union is already partnered with SBI, at over 12,000 SBI branches Western Union Money Transfer service is available. With this partnership, SBI customers will be able to transfer money from Western Union into their accounts, using mobile phones, online banking, ATMs and bank branches. In July, Western Union made an announcement in early 2011the Account-Based Money Transfer (ABMT) service will be introduced which will be enable SBI customers with online bank accounts to draw a Western Union Money Transfer directly into their accounts via the Internet or an ATM. According to the release, there are 110 million SBI accountholders, out of which more than 4 million are registered for online banking.

Western Union is offering the Mobile Money Transfer service in many other parts of the world including the Philippines with Smart Communications and Globe Telecom; in Kenya with Safaricom; in Malaysia with Maxis and in South Africa with Absa Bank. Recently company has tied-up with EnStream in Canada and has agreements with Tunisian Post and Bank of Commerce & Development (BoCD) in Libya. Besides this, Western Union had earlier announced tie up with Zain (now owned by Airtel) in Africa.

SBI raises deposit rates by 25-75bps, base rate remain unchanged

Country’s largest lender State Bank of India (SBI), has revised its deposit rates but has not changed the base rate the minimum rate of interest on loans is at 7.5%. Bank has raised deposit rates by 25 to 75 basis points (bps), ranging from 4 percent to 7.75percent.

The SBI said in a statement, “The bank revises upwards the deposit rates by 25-75 bps in various maturities, effective from Oct 1.”

Bank has raised deposit rates by 75 basis points to 5.5percent per annum on term deposits from 91 days to 180 days maturity period.

While on the maturity period of 556 days to less than 2 years rate has been increased by 50 basis points to 7.25 percent. For maturity period from 2 years to 999days interest rate has been increased to 7.50 per cent from existing 7 per cent and on 1,000 days maturity bank has raised interest rate by 50 basis points to 7.75 per cent.

For 1 year to 554 days the rates have been increased by 25 basis points to 7 percent, whereas on 555 days the rates have been raised by 25 basis points to 7.5 per cent and on 1,001 days to less than 3 years bank is offering revised rate of 7.15 percent.

For other maturity period’s bank has not kept rates unchanged.

Bank in its quarterly review of base rate said, “Base rate will continue to remain 7.50 percent per annum for the present.”

Although, last month SBI had raised benchmark lending rate by 50 basis points and deposit rates by 25 to 150 basis points.

SBI opens exclusive branch for corporate salary accounts in Hyderabad

Country’s largest lender the State Bank of India (SBI) is on the move to target special class of the society. Two weeks ago the bank had opened a special branch for high networth individuals, this week on Monday bank launched an exclusive branch for corporate salary accounts at the DLF Cyber Centre at Gachibowli in Hyderabad.

Through this, the bank aims to target mainly the IT and engineering companies which are concentrated around Gachibowli. At this branch full range of services will be available including deposit, loan, insurance, mutual funds and Internet banking.

The branch was inaugurated by Shiva Kumar, chief general manager of SBI (Hyderabad circle), on the occasion he said, bank is expecting to open net 3,000 to 4,000 accounts by March 2011.

He added, “As the DLF premises get occupied to its 16,000-person capacity, the branch will have the first mover advantage in gaining their accounts. We will also consider extending our working hours to suit the 24-hour schedules of the IT industry.”

This branche will offer corporate salary account package in four variants including anywhere banking, zero minimum balance, free Internet banking as well as concessions on interest and processing fee on loans, and on remittance and maintenance charges on demat and eZ trade accounts.

Kumar told at present seven employees have been positioned in the branch, gradually number of employees will be increased, and, added more such branches might be opened in other parts of the state.

The branch also has a Finmart lounge where customers can comfortable sit and discuss products besides carrying out their routine transactions. Other services to be offered at branch include financial planning, advisory services and financial wellness camps.

The other facilities to be provided of particular interest of the targeted class customers will include e-tax, demat and online trading, and e-Invest for ASBA (Application Supported by Blocked Amounts) facility, where an IPO applicant’s account doesn’t get debited until shares are allotted to him.

SBI opens branches at kirana stores

State Bank of India (SBI), country’s largest lender is offering banking services through kiosks branches set up at kirana stores. At these branches you can open an account, deposit cash, withdraw or transfer money and will get a ‘pakka’ receipt for it.

SBI is offering this service in partnership with pre-paid services provider Oxigen Services - a bill payment, mobile recharge and ticketing systems provider.

The bank has opened the first 50 kiosks in Mumbai, including one in Dharavi and will be opening around 1,000 more in the city and another 870 across the state.

According to bank sources 30 kiosks branches have also been opened in Delhi. In Bihar and UP kiosks will start operation by October 2010.

Soon other banks will start offering such service.

The SBI kiosk will offer banking services in six languages.

To open an account at the selected kirana stores a person need to carry a photo ID and address proof. The account will be a no-frills account, where to maintain a minimum balance is not mandatory. The shopkeeper will take a photo of the person using a webcam and also fingerprints with a biometric device.

Pramod Saxena, managing director and chairman at Oxigen said, “The know-your-customer verification process is diluted here; the regular KYC is so stringent that daily wage earners and migrants get excluded from banking facilities.”

If a person who wants to open an account does not have an address proof, then he can get a letter from the mukhiya of his native place or letter from employer stating the place of stay, will serve as address proof. No personal verification will be done as done for a regular bank account and the fingerprints will serve as the main identification.

At a regular SBI bank branch the cost of opening an account comes to Rs400 but at these kiosks branches the cost will be as low as Rs20.

The limit of deposit of cash or withdrawal at these kiosks is up to Rs 10,000 per day, while the total balance in any account can not cross Rs 50,000 at any given point.

There will be no charges for cash deposit but for withdrawal you will have to pay Rs 25 per transaction if it is done at kiosks other than one where you have opened an account.

The money can be transferred from kirana account to the regular SBI account, but you cannot access kirana account through a bank branch.

At present the SBI bank customers having regular savings account cannot access banking through kirana stores.

Gradually micro loans, insurance and remittance will be offered to these account holders.

Riten Ghose, general manager, Mumbai at SBI said, “Through the Dharavi microfinance branch we will be financing Rs50 crore by March 2011.”

Soon other banks follow the path and more kirana stores start offering banking services.

An Oxigen official pointed out, “Other banks, private included have been approaching us. But at least for the next couple of months we do not want to sign on any other bank.”

However Oxigen is offering other services such as bill payments, railway ticket booking, mobile recharge and DTH payments through 20,000 web kiosks and, now banking service has been added to the same network.

State Bank of Patiala opens seven branches in different districts of Punjab

State Bank of Patiala, a public sector lender headquartered in Patiala has opened seven brick and mortar branches in its Bathinda and Jalandhar zones with an aim to provide banking facility to the rural people of Punjab. The new branches have been opened in the districts of Ludhiana, Jalandhar, Hoshiarpur and Amritsar.

Bank managing director Ashok Nayar, told, bank is planning to open 20 branches in the identified villages which will be covered under the financial inclusion drive. Out of these, 11 branches will be opened in Punjab and nine in other states of India. The branches to be opened in the villages under financial inclusion program are provided by the lead bank under the guidelines of Reserve Bank of India.

Through these branches bank will be providing loan and banking facilities to the rural people. The bank is proposed to cover 500 villages during the current year under Financial Inclusion, out of which these 263 villages will be of Punjab. In rest of the villages bank will provide services through business correspondents.

Banks has done all the arrangements for this and the services will be rolled out in the next month. By 30th September, 2010 bank is likely to cover over 150 villages under the financial inclusion program.

According to RBI directives, any village with a population of over 2000 households has to be covered under financial inclusion.

Nayar emphasized that loan should be used for productive purpose also the repayment should be done timely as it will help in recycling the money which is a must for the growth of the economy and the nation. He said people should avail facility of free counseling available at the Financial Literacy and Credit Counseling cell known as Lead Bank opened at Mini Secretariat Bhatinda. The FLCC is providing counseling on responsible borrowing, banking terminologies and restructuring of irregular loans.

SBI looking for merger of 5 associate banks into itself

Country’s largest lender State Bank of India is looking for the merger of five of its associate banks into itself. The five associate banks are powerful at the state levels. Chairman O.P. Bhatt, in a reply to the rumors said he will take up the matter with the government. On the other hand after this rumor, this week the shares of the listed associate banks’ have moved up.

Meanwhile the State Bank of Indore has already been merged with the parent bank the remaining five associates which are up for merger are the State Bank of Bikaner and Jaipur, the State Bank of Hyderabad, the State Bank of Mysore, the State Bank of Patiala and the State Bank of Travancore.


Bhatt while speaking on the sidelines of a Confederation of Indian Industry seminar told reporters, “I will discuss with the government whether we should go ahead with some more banks.”

If the government approves the merger of five associate banks then SBI will approach the associate banks for this. Bhatt said, “If the government answer is yes, as we had done in the past, we will talk to the remaining five associate banks.”

When asked from the listed banks and the unlisted ones which will be merged first, he replied, “It doesn’t matter whether it’s listed or unlisted. What matters is how smoothly we can do it because now we have an experience in terms of modalities—both for listed and unlisted. We can pick either.”

On Thursday finally the merger of State Bank of Indore with SBI will take place. It is expected everything will move smooth as it happened during the merger of State Bank of Saurashtra with its sister banks.

Bhatt added he want all associate banks of SBI should be well capitalized.

State Bank of Indore branches will become SBI branches from Aug 27

From August 27 onwards, all branches of State Bank of Indore will start functioning as those of State Bank of India (SBI).

The Reserve Bank of India said in a statement, "All branches of State Bank of Indore will function as branches of State Bank of India from August 27, 2010. Customers, including depositors of State Bank of Indore will be able to operate their accounts as customers of State Bank of India with effect from August 27."

A month-and-a-half earlier, the union cabinet approved the merger between State Bank of Indore with its parent SBI, with an aim to help the country’s largest lender to increase its operations and cut costs.

The apex bank added, "The order of acquisition will be effective on and from the close of business on August 26, 2010."

In July the government had issued the 'Acquisition of State Bank of Indore order 2010', according to which the process of amalgamation is to begin from August 26.

Last year, the central board of SBI had given approval for the merger, after this the Centre also gave an in-principle approval.

SBI holds 98% stake in State Bank of Indore, which is having 503 branches, including 437 crore banking branches and 66 branches for NRI services.

After this merger the competition between two entities will also come to end and will lead to easier access to funds at competitive rates.

After this merger SBI will have five associate banks - State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

While the State Banks of Bikaner and Jaipur, Mysore and Travancore are listed companies.

SBI and nationalized banks authorized to accept I-T dues

Now you can pay your income tax (I-T) dues at different branches of the State Bank of India (SBI) and nationalized banks. These banks have been authorized to accept payment of income tax dues in cash or by cheque.


According to press release issued by the public accounts department (PAD), Reserve Bank of India (RBI), these arrangements have been made for the public so that they can easily pay their I-T dues. For the convenience of assesses the list of branches has been displayed in the banking hall of the RBI and it will also be available with the PAD.

SBI raises BPLR and deposit interest rates

State Bank of India, the country’s largest lender has raised its benchmark lending rates by 50 basis points to 12.25 per cent, thus home, vehicle and other corporate loans linked with the rate become costlier for the existing borrowers. For the new borrowers bank has set the base rate at 7.5 per cent.

The bank has also raised its deposit rates by up to 150 basis points across various maturities.

Before this various lenders had raised lending as well as deposit rates after the Reserve Bank of India had increased its key rates to control rising prices.

SBI said a filing to the Bombay Stock Exchange, “The bank has revised the benchmark prime lending rate upwards by 50 basis points from 11.75 per cent p.a. to 12.25 per cent p.a. effective from August 17.”

In case of fixed deposits on maturity between 15 to 45 days SBI has raised rates by 1.5 per cent to 4 per cent per annum, this is the highest raise done by the bank among various maturity term deposits.

For tenures between 181 days to less than 1 year the new interest rate will be 6 per cent against existing 5.25 per cent, while for 555 days fixed deposit rate has been set at 7.25 percent, an increase of 1.25 per cent.

On maturity between 3 years to 5 years rates have been raised by 75bps to 7.25 per cent, while for 5 years to 8 years slab the rates have been raised by 25 bps to 7.50 per cent. The revised deposit rates will come into effect from tomorrow.

The bank has also announced that it will be launching floating fixed deposit product linked with base rate with effect from September 6, 2010.

SBI said in the filing, “The bank announced launching of floating rate term deposit products linked to ‘Base Rate’ effective from September 6, 2010.”

Base rate is the lowest lending rate below which the bank cannot give loan to any customer.

It said, for 1 year floating fixed deposit the interest rate has been set to 50 basis points (bps) lower than the existing base rate which is currently at 7.5 per cent.

For 3 years (floating) term deposit the interest rate will be 25 bps lower than the base rate and for 5 years floating fixed deposit the interest rate will be at base rate.

However last month the RBI in its monetary review had raised the short term borrowing (reverse repo) rate by 50 basis points and lending (repo) rate by 25 bps to control inflation.

Cabinet approved merger of State Bank of Indore and SBI

Finally the merger of State Bank of Indore by the State Bank of India has got cabinet approval. The cabinet also gave approval to introduce a Bill in the Parliament for making amendments in the State Bank of India (Subsidiary Banks) Act, 1959, to remove references of State Bank of Indore.
Before this in 2008, State Bank of Saurashtra was merged with SBI, since then the issue of acquisition of the banks other associate banks has been attracting attention of SBI. However the bank has been facing competition for the same business in the same market, under the same brand from most of its branches and those of the State Bank of Indore. Due to which SBI has been unable to fully exploit its brand equity for driving business growth.

SBI makes your mobile number as saving account number

In India the number of mobile increasing day by day as a result it is becoming most basic requirement of the human being. The State Bank of India (SBI) country’s largest lender has come up with a plan of making your mobile number as your saving account number. This Mobile Saving Account can be used for all kinds of banking services. A private company offering economic help in association with SBI has started a branch free Mobile Banking service called Indian State Bank Mini Saving Account.

The Head officer of this private company Abhishek Sinha told that his company is National Business Correspondent of State Bank. His company is offering banking services to those people who do not want to avail banking services because they do not want to be involved in any type of documentation problems.

This service can be used on a simple mobile and is easy to handle. No fee is to be paid to mobile company to avail this service. Abhishek Sinha told that his company will be appointing the people like shopkeeper, medical stores, and mobile recharge coupon sellers, etc., who will be looking after the whole transactions. Around 55,000 of accounts have already been opened in the state of Delhi, Bihar, Jharkhand and NCR and it is planning to make this number to 1 lakh till the end of this year.

Special features of this service are:

* Only a rupee is required to use this account.
* There is no minimum amount limit in the account.
* A minimum of Rs 10 can also be deposited in the saving account.
* Also there is no with drawl limit, Rs 10 can be withdrawn.
* Shopkeeper’s payment can also be done by using this service.

SBI staff held for missing cash from bank’s ATM

A cheating case has been filed against some State Bank of India employees for the missing cash worth Rs 21 lakh from the bank’s ATM at Bagh Ameer under Kukatpally PS limits. Kukatpally police has filed a cheating case under section 420 IPC and investigating the case.

The incident occurred on July 3.

Kukatpally inspector of police, S Lakshminarayana told the SBi official reported about the incidence. On July 4 when SBI official when came to ATM to fill the cash box, he found Rs 21 lakh missing and that the CCTV was not functioning. The SBI official lodged a complaint against the employees who knew the ATM password. The inspector told police has taken the SBI staff into custardy and investigation of the case is being done.

SBI takes up registration of UID number for its customers

State Bank of India is the first bank in the country to begin registration of the Unique Identification number for its customers. SBI has signed a deal with UIDAI for registration of its customers.

SBI through its 12,000 plus branches and 17,000 plus Customer Service Points (CSP) of Business Correspondents (BCs) will be joining UIDAI (Aadhaar).

The bank said in a statement, "SBI, as a registrar, will be capturing through empaneled enrollment agencies the biometric characters like finger prints, iris among others and sending the same to UIDAI for providing the unique number".

During the signing of the MoU SBI Chairman, O P Bhatt said, "Whatever it will take, whatever we can, we will do it."
The bank pointed out by grouping of the process of enrollments of residents by UIDAI and the customer acquisition by SBI will make possible implementation of the project and achieving greater financial inclusion.
The other benefits of the UID project include improving the viability of financial inclusion program through reduced enrollment costs, reduction of distribution channel costs for government disbursals and remittances, mobility of identity to migrant labour.

SBI extends special home, car loan schemes, no changes in terms

All the banks have moved to new base rate system therefore the special rate schemes offered by some of the banks were to be closed. But countries largest public sector lender, the State bank of India (SBI) has extended its special home and car loan schemes and, has also not changed the terms following the transition to the base rate system with effect from July 1, as stated by the press release from the bank.

However SBI has fixed its base rate at 7.5%. For home loans, the rate of interest is 8% in the first year and 9% for the second and third years, irrespective of the loan amount.

While from the fourth year onwards, the rate will be linked to the base rate, and at present the effective rate is 9.25% for loans up to Rs 50 lakh and 9.75% for loans above Rs 50 lakh

In case of car loan for new cars, bank is offering 8% interest rate for the first year and 10% for the second and third years. Then from fourth year onwards the rates will be linked to the base rate. At present the bank is offering 11.25% for the fourth and fifth years and 11.5% for the sixth and seventh years for Ezee Car loans with limits up to Rs 5 lakh.

On the other hand LIC Housing Finance has reduced rates on loans for above Rs 75 lakh. Whereas, for new customers, it is offering 8.75% floating interest rate for loans up to Rs 1.5 crore for the entire term of the loan.

And for borrowers who want a fixed-cum-floating rate, LIC has a Fix-o-Floaty scheme, in this it is offering a rate of 8.9% fixed up to March 31, 2012, for loans up to Rs 1.5 crore and thereafter on floating basis. The company also has a new product under which it has fixed its lending rates at 9.25% for five years and thereafter on floating basis.

Four PSU banks set base rate at 8% and SBI set base rate at 7.5%

From tomorrow all the banks will move to base rate system as instructed by the Reserve Bank of India.

Punjab National Bank (PNB), Bank of Baroda (BoB), Union Bank, Central Bank of India and Bank of Rajasthan have announced their base rates. These banks have set their base rate for lending at a uniform 8%.

PNB while filing with the Bombay Stock Exchange said that the card rate under any lending scheme of the bank will be the sum of base rate and the increase.

PNB added it calculated the base rate by taking the average cost of deposits of the last quarter as the benchmark.

The State Bank of India (SBI) has also announced a base rate of 7.5%.

Chanda Kochhar, managing director and CEO of ICICI Bank pointed out that base rate will not affect cost of funds for companies or the growth of credit.

As per RBI instructions all new loans sanctioned after 1 July and those due for renewal from 1 July, (except exempt categories as per RBI Guidelines) will be priced on base rate instead of Benchmark Prime Lending Rates (BPLR).

SBI launched `SBI Tiny no frills account’ as part of its financial inclusion program

For all nationalized banks it has become mandatory to rope into RBI’s `Financial Inclusion Programme` as four hundred plus million population that is still unbanked.

The State Bank of India with over sixteen thousand four hundred plus branches has become leader by taking up this challenge by introducing `SBI Tiny no frills account` for the urban slum communities & Rural India. In this new account there is no need of `KYC` documents and the account can be opened with a zero balance. In this account one can deposit or withdraw from Rs.10/- to Rs.10,000/- the upper limit for this account is Rs.50,000/-. Bank has various loan schemes to cater different needs of rural farmers and urban slum based persons.

The SBI Tiny also provide facility for the local poor NGOs to become Customer Service Providers (CSPs) that work like a local branch at each slum dweller/villagers` doorstep in the community. For this NGO get some percentage benefits as well as it helps their socio-economic empowerment objectives. From this RBI will be benefited as it is making this database for the (Unique Identity Number) UID scheme of the Government of India.

Laxmibhai at one of the SBI Tiny Centers said, ``I rob some money from my husband at night and come and save it in our SBI Tiny account in the morning, this way I can manage our house`s essentials through the entire month and do not need to get loans at the end of each month``.

This scheme is being strongly promoted by Don Bosco Rehabilitation and Research, Matunga (R&D), for various poor NGOs, in rural areas, Out of our institutions ex-street boys and urban slum communities. The R&D provided its support for such savings to over one million marginalized in various communities of Maharashtra.

The R&D has been conducting various training workshops in rural Maharashtra viz. Yewla, Nagar, Amravati, Beed, Lonavla, Pune and now it has started networking with social action NGOs in Jharkhand and Uttaranchal. The aim of this unique scheme is to cover as many of the poor unbanked population in the country.

SBI tries to encourage existing customers for second home loans

Now days most of the young generation owns a house at the age of 25. This has become possible due to increase in disposable income. Today a well qualified working individual with a multi-national company gets salary in lakhs thus they are in much better position in comparison to their parents. Also, now days banks have made their loan terms and conditions easy which has made possible for these youngsters with high income to take loans for buying car, home, or even for pursuing higher education.

Therefore banks whether public sector or private banks are always in chase of new customers. State Bank of India, country’s largest lender apart from chasing new customers, is sighting on existing customers in order to offer those second home loans. Bank is doing this to grow its retail portfolio.

Besides corporate sector employees, after planning commission there has been substantial jump in the pay of employees working in the Government (Central and States), as a result banks are trying to woo existing customers with good track record with an offer of a second home loan. SBI is also encouraging its employees to take a second home loan.

SBI is trying to woo its existing borrowers for second home loans as for investment purpose.

According to bank figures, 96 percent of its home loan borrowers are first-time borrowers.

A senior official said, “We know that customers' income is rising. Hence, we look at their Equated Monthly Installment to Net Monthly Income ratio. If the higher income is sufficient to cover the second home loan, we would make the offer without any hesitation. We don't look at the value of the property, but the customers' capacity to repay his/her loan.”

For this fiscal SBI is aiming to achieve 32 per cent year-on-year growth in its home loan portfolio. It is planning to distribute Rs 22,000 crore (Rs 17,130 crore in FY2010).

As per bank data in the first two months of the current financial year, the home loan portfolio have grown by approximately Rs 2,800 crore, from Rs 71,193 crore as on March 31, 2010 to around Rs 74,000 crore.

Along with sourcing customers, sanctioning and disbursing loans, SBI is also focusing on follow-up with customers in cases where they fail in their mortgage payments.

The bank has tied-up with SBI Cards which has expertise in soft recovery. The follow-up involves contacting customers on telephone, reminding them about the delay in payment, and reverting to the bank with their response.

The bank is also working on increasing the capacity of its 116 retail loan processing centers so that they can process loan application faster.

SBI to introduce wealth management program for its high net worth clients

State Bank of India (SBI), India’s largest lender, in the current fiscal will be venturing into the wealth management business. Through this program bank aims to tap high net worth clients, a top bank official said.

SBI's Chairman, O P Bhatt, told shareholders at its annual general meeting that, "We plan to introduce wealth management services in a phased manner in the current fiscal."

The bank is also searching for a global partner for its merchant acquiring business. It is planning to form a separate company to carry out operations.

He said, "It is proposed to conduct the merchant acquiring business under a separate company with an experienced and reputed global partner.

Bhatt informed that in the next 5 years bank will also install 6 lakh point-of-service (PoS) terminals across rural and urban areas.

He added, this initiative will aid in SBI’s debit card acceptance pan-India.

The SBI chief told soon bank will be signing an agreement for the operation of a joint investment fund in collaboration with sovereign entities of Oman.

Currently, the SBI group has 17,337 branches out of which 4,841 branches are of its six associate banks.

SBI implements SCE system to improve efficiency & provide high quality of customer service

The State bank of India (SBI, country’s largest lender is adopting private banking strategies to improve efficiency, high quality of customer service and also act as a forum for sharing practices. Working on this line bank has implemented the concept of Super Circle of Excellence (SCE) to focus on select branches to achieve high growth.

By end of March 2010, under SCE were 661 branches, out of which 331 branches are under 16 dedicated SCE regions and 330 selected on the basis of one-per-region, facilitated by SCE coordinator.

The branches under SCE have been selected on a twin track approach, - one subset comprising bunch of branches in metro and large urban centers to meet the growing competition and other subset consisting of branches selected on the basis of one per region in order to transfer best practices from high-performing branches to other outlets across the country.

These branches will mainly focus on growth in retail business, CASA deposits and income from cross selling.

The SCE branches overall functioning is judged on a multi-dimensional efficiency matrix, covering all aspects of business. These branches have set standards by achieving high growth in retail operations and by providing outstanding customer services. The aim of these branches is to achieve a zero complaint status.

These branches comprise 5.32% of the total network of the bank. These branches are making significant contribution in business of SBI. As on March 2010, these branches have achieved growth of 12.94% in retail deposits, 15.90% in retail advances, 16.99% in personal advances and 13.36% in the cross-selling income, and have been maintaining steady growth.

These branches are extensively adapting new technology initiatives such as , internet banking, mobile banking, RTGS, NEFT, demat and e-trade to improve efficiency in providing services and to decongest the branches and increase overall customer experience. The SCE subset has contributed nearly 18% in total technological product coverage of the bank.

As on March 2010, the SEC branches have seen increase in retail deposits of Rs 53,451 crore (experiencing a year-on-year growth of Rs 9,879 crore, or 22.67% as against 21.97% achieved by non-SCE branches). Likewise, these branches achieved a growth of Rs 22,834 crore,y-o-y growth of Rs 6,488 crore in personal advances. While in CASA deposits these branches achieved an estimated growth of Rs 32,652 crore (Rs 7,650 crore), the ratio improved to 40.15% in March, 2010, from 35.20% in the year-ago period.

Also, the cross-selling income at these branches grew at Rs 27.66 crore (Y-o-Y growth of 112.17% from 97%).

To provide high quality of customer service and improve efficiency SBI has undertaken potential mapping application through SCE department through data warehouse portal to correctly measure and tap on the right potential available in the area of operation of each SCE branch. Bank has devised a feedback system with 25 parameters to determine the level of customer satisfaction in SCE branches on a matrix of 100. The feedback form is directly dispatched to customers and the responses keyed in online in the centralized CSM application developed by SCE department.

As continuous track of deficient areas is being kept therefore the average CSM scores is now in the range of 85-87 as against 80-82 in March 2009.

State Bank of India to provide training to its employees to make them competitive

State Bank of India will be providing intensive training to its over two lakh employees to upgrade their skills so that they can efficiently perform their duties in the changing business environment and competition. The employees working at various levels in banking technology, e-learning and other areas will take up the training program.

The bank is making arrangements to make its employees attend a two-week training program once in 18-24 months. Ms Mahpara Ali, Head, Strategic Training Unit (STU) of SBI, told Business Line told, “Our major focus is on upgrading the skills of employees in view of the major expansion of workforce in recent years and competitive business environment.” She added, the main focus of STU is to provide training to at least 1.2 lakh employees a year.

The STU is a unified training establishment, was set up recently, and is linked with over 50 learning centers and four apex training units of SBI located in different parts of the country.

Ms Ali said, “The idea is to consolidate entire training process for undertaking skilling and re-skilling of our employees. We will do this through e-learning predominantly.” STU is reviewing skill requirements for the bank and examining the resources and capabilities.

However STU has designed over 150 e-learning course modules in key areas such as risk management, foreign exchange, treasury handling or credit proposals and also front office management.

STU has in-house developed the entire-technology platform for e-learning modules. At present SBI is not seeing it training unit as an independent source for earning revenue. The official said, “Our focus is only on staff. However, we have trained staff of other public sector banks and some foreign banks on their request on cost-to-cost basis.”

Earlier SBI has also provided training to personnel from the Vigilance Department, Central Bureau of Investigation and State-run insurance companies.

Ms Ali informed the bank has assigned a separate budget for training she did not revealed the exact figure.

She said, “All the infrastructure is owned by SBI. We have over 400 full-time faculties in addition to many visiting experts. Training huge staff itself means lot of expenditure.”

From past two years SBI has been a major recruiter among the banks. In the last two years it has hired over 60,000 officers and clerks and is fulfilling our staff requirement for the current year.

SBI’s Bhatt appointed as new Chairman of IBA

The Indian Banks Association elected its new office bearers for 2010-11 after its Annual General Meeting held on Tuesday.

O P Bhatt, State Bank of India’s Chairman has been elected as the new chairman of the Indian IBA for 2010-11. He will be taking charge from M V Nair, Chairman and Managing Director of Union Bank.

While HDFC Bank's Managing Director Aditya Puri, Bank of Baroda's Chairman and Managing Director M D Mallya and Canara Bank's Chairman and Managing Director A C Mahajan have been elected as Deputy Chairmen.

Rana Kapoor, Managing Director and Chief Executive officer of Yes Bank will be the Honorary Secretary of the Association.

SBI offers teaser rates on car loan

All the banks are preparing to move to base rate system from July 1 which is likely to increase interest rates. At this time State Bank of India (SBI) has extended its teaser rate offer to its car loans. Bank has announced to offer 8% on its car loans up to June 30.

Under the Ezee Car Loan Scheme bank is offering car loans at 8% per annum for the first year and 10% for the second and third years. The EMI (equated monthly installment) on a car loan will be as low as Rs 1,559 in the first year and Rs 1,647 in the second and third years for every Rs 1 lakh.

From the fourth year the interest rate will be reset at the card rate (rack rates which doesn’t include dealer discounts or other subventions) contracted on the date of sanction, depending on the tenure of the loan.

Currently banks are offering floating rates which is around 9.5-14% depending upon the tenure of the loan. While fixed rates are set in the range of 10.5-15%.

According to experts the Ezee loan scheme is best for the borrowers who can pay off the loan in 3-5 years. The loan is offered for 3 years in this scheme. If you loan with a longer repayment tenure then bank might slap a penalty of 2% of the repaid amount subject to certain conditions. Thus before selecting the scheme you should evaluate your repayment capacity and stick to the schedule.

Meanwhile all banks are still busy in calculating the new barometer for pricing their loans. This can affect the loan offer from the fourth year amid uncertainty as it will depend on what the banks would fix as the benchmark rate, below which they will not be able to lend, unlike under the current dispensation.

According to experts if you can pay off the loan in first 3-5 years then it would make sense to take loan now as the interest rate will be low during the initial years.

However the clear picture on base rates will be visible only in July, so if you take car loan now the contracts from the fourth year will be signed under the shadow of uncertainty.

SBI to keep base rate around 8 per cent

State Bank of India, country's largest lender will be announcing its base rate by June 15- the new benchmark at which banks lend to clients-- and the rate will be calculated based on SBI's cost of deposits.

SBI Chairman O P Bhatt said in Mumbai, "For State Bank alone, we are looking at the cost of deposits and not the cost of funds (for the calculation of base rate). The tenure (of deposits) we have not decided."

Although Bhatt did not tell what would be SBI base rate but it can be around 8 per cent. Bhatt said, "Right now, we have such a wide variety of options we need to make sure that our customers do not suffer nor should the bank."

The meeting of chiefs of leading state-owned lenders was held under the guidance of SBI to discuss various operational challenges while switching to the new benchmark system as directed by the Reserve Bank of India in order to enhance the transparency in lending.

As per RBI guidelines from July 1 all banks have to switch to base rate system from the existing benchmark prime lending (BPLR) but they have been given free hand till December 31 to choose the parameter using which the benchmark rate will be computed.

The chiefs who attended the meeting under SBI guidance to discuss the base rate implementation included Union Bank Chairman and Managing Director, M V Nair, Bank of Baroda CMD M D Mallya, Bank of India CMD Alok Misra, Central Bank of India Executive Director Ramnath Pradeep amongst others.

SBI and all other banks to meet to discuss the new loan pricing system

Base rate is coming into play from 1st July 2010. Although banks have been working on the process of base rate system but all are looking at State Bank of India (SBI). Now the guessing game by banks on each other’s base rate is likely to get over as country’s top bankers are going to meet on the request of SBI to discuss the new loan pricing system.

The meeting will be held a day before i.e. June 15, a fortnight before SBI will make announcement of its base rate, SBI Chairman O P Bhatt said.

However, most of the banks are still have to decide about their base rate and the parameters to be taken into account for calculating the new benchmark. A key parameter is the cost of funds, which can cause a huge variance across banks. For example, if bank base rate is calculated on the basis of overnight cost of funds, which is very low, then the base rate will be significantly lower in comparison to other bank which takes one-year average cost of funds into account.

Thus most of the banks, especially the small banks are waiting for SBI’s base rate announcement. In this meeting all the banks will come to know what their colleagues are contemplating and help put in place an industry-wide consensus.

Last year, the Reserve Bank of India (RBI) had formed a committee headed by Executive Director Deepak Mohanty to review the present system of benchmark prime lending rate as all the banks have different BPLR due to which there is a wide variation in the interest rates offered to the loan borrowers. Therefore the regulator with a aim to bring greater transparency in risk pricing issued final guidelines in April, although the decision about the mechanism was left completely in the hands of banks.

Bhatt said SBI will conduct three more internal meetings to before deciding the final number. Although he gave a hint that bank’s base rate can be around 8%. For its staff members the bank will be announcing its base rate a fortnight before the scheduled roll out so that it gets familiar with the model and the calculation part.

On the other hand Punjab National Bank, country’s second-largest state-run lender, has said that its base rate might be around 8-8.5%.

It is believed the new base rate system will help in eliminating the wide variations prevailing under the BPLR regime. Most of the government owned banks have BPLR around 11-12 per cent, whereas the private banks have BPLR as high as 15.75 per cent.

SBI offers helping hand to Mangalore air crash victims’ families

The plane crash at Mangalore airport on Saturday morning killing all except 8 passengers has left the country in shock and grief. To help the families of the victims, the country’s largest bank, State Bank of India has offered a helping hand. It will provide assistance in transferring funds free of cost to the families of the victims, the official sources said.

"SBI has come forward to provide assistance to families of victims who perished in the crash near Bajpe airport here yesterday," Karnataka Coastal Development Authority Chairman Nagaraj Shetty, who is coordinating the operation at Wenlock hospital here, said.

After meeting a senior bank officer at the hospital Nagaraj said, he has been told that assistance to transfer funds and other processing services will be provided free of cost at SBI’s branches in Mangalore, select branches in Kerala and the one in Dubai.

He added, this will include compensation amounts announced by Karnataka government and the centre.

SBI extension of teaser home loan to depend on liquidity condition

State Bank of India might extend its special home loan scheme further. Recently the bank had extended its special home loan scheme up till June 30, 2010. Sources said that the bank's decision to further extend the scheme will depend on its liquidity condition. As on March 31, 2010, surplus liquidity of the bank was Rs 40,000 crore.

Under the special home loan scheme SBI is offering loans at 8% interest for the first year and 8.5 per cent for the second and third years. After this period it becomes a floating rate depending on the prevailing interest rates.

Mr R. Sridharan, Managing Director and Group Executive (Associates and Subsidiaries), SBI said, “We are sitting on surplus liquidity at present, lending at eight per cent would make more sense than parking the funds in reverse repo, which will fetch us only about 3-3.5 per cent. We will review the need for extending the scheme further based on our liquidity position.”

Last year when bank launched the scheme, it was for three months in August 2009 as a festival offer for home buyers thereafter the scheme was extended up till March 31, 2010. Then again it has been extended to June 30, 2010.

Under the scheme loans up to Rs 50 lakh and tenure of 25 years were offered at 8 per cent interest rate during first year and 8.5 per cent fixed during the second and third year.

After three years, interest rate is calculated at 2.75 per cent below SBAR (for floating rate) and 1.25 per cent below SBAR with a reset frequency of five years.

However for loans above Rs 50 lakh bank offers interest rate of 8% for first year and 9% for the second and third year.

Mr Sridharan said, the special scheme did not have any negative affect on bank net interest margin (NIM) and added, “It has only had a positive impact on our margins.”

In fact by the end of quarter on March 31, 2010, bank’s NIM had improved at 2.96% as against 2.39% during the corresponding period last year.

The bank’s home loan has increase by about 32 per cent at Rs 71,193 crore as on March 31, 2010, against Rs 54,063 crore during the year ago period.

During the announcement of the bank’s annual performance report Mr S.K. Bhattacharya, Managing Director, SBI told that more than 95 per cent of customers (in rural, semi urban and urban areas) were first time home buyers.

Earlier bank sanctioned around 14,400 loans ever month in February 2009 after the launch of this scheme bank had witnessed 50 per cent increase in average home loan sanctions, to 22,000 in September 2009.

Last year, when SBI launched its ‘teaser rates’ other lenders were forced to launch the similar products.

But when RBI showed concern over the teaser rate schemes other banks withdrew the scheme in March, but SBI extended its scheme. HDFC also followed the suit and extended its teaser rate home loan scheme till June 30.

Under its special scheme HDFC bank offered fixed rate of 8.25 per cent up to March 2011, nine per cent for the next one year thereafter it becomes the floating rate depending up on the prevailing rate. Although scheme had expired last month but now it has been extended till June 30, 2010.

Customers having non-Java, non –GPRS mobile can use SBI's mobile banking service

The mobile banking services of State Bank India- 'State Bank freedoM' will now be available on non-Java and non- GPRS mobile phones as well.

Up till now the service was available only on Java-enabled mobile phones over SMS/GPRS/WAP and on non-Java phones with GPRS connections.

According to bank press release customers can avail the mobile banking service on non-Java mobile phones without the GPRS facility.

SBI had launched 'State Bank freedoM' in March 2009 on a pilot basis in all its branches of the bank, offering its retail customers an alternative channel for a 'secured Anytime Anywhere Banking experience'.

Registration for this service is free and can be done at ATMs and customers holding debit cards can also register for this facility without visiting any branch, the release said.

However customers will have to pay charges levied by telecom operators for the use of SMS/GPRS.

Using this service customers can transfer funds, inquire and view balance, get mini statements of their accounts, pay bills, request for cheque book, recharge of prepaid mobile connections, viewing of demat account details, top-up of Tata Sky/other direct-to-home services, and conduct of m-commerce transactions.

The service is available over all modes -- application based, over Wireless Application Protocol (WAP), and over USSD (Unstructured Supplementary Service Data).

At present USSD-based service has been launched on five telecom operators - Vodafone, Airtel, Aircel, Tata Docomo and Idea, and can be used over low-cost mobile handsets with limited sets of offerings within a daily financial limit of Rs1, 000. The limit is Rs50, 000 for application- and WAP-based services.

The customer can continue using 'State Bank freedoM' services without disruption if the user has changed the mobile number by offering the option to change the mobile number through the system without visiting any branch.

The bank is planning to add more services like purchase of air/rail/movie tickets through the application of 'ngpay' among others.

Soon SBI will be launching 'mobile wallet', based on the policy approved by its board. Thus bank plans to take mobile banking to non-customers, the release said.

SBI chief signals at rise in interest rates

State Bank of India (SBI) Chairman Mr O.P. Bhatt has said in the coming days bank might raise the interest rates.

He said, “There continues to be surplus liquidity in the system and credit offtake has not picked up, in fact it has been negative and by the end of June it could be flat. Capital inflows also look good for now, so there is no pressure on liquidity, however, if RBI takes steps to control inflation, liquidity could dry up, and there could be an upward bias in interest rate.”

The bank plans to raise Rs 15,000-20,000 crore, if possible through rights issue by the end of this fiscal.

He added, “We have adequate capital at present. But we are in talks with the Government for seeking their approval for a rights issue, which would help us maintain the Government's stake at the present level of 59 per cent”.

The bank might also look at the option of raising funds by reducing government stake from 59 per cent.

He said, “Though rights issue will be the preferred route, in case government does not agree for that, then we have the cushion of bringing down government's stake to 55 per cent (59 per cent). There is also a Bill in the Parliament, which will enable us to bring down government's stake further to 51 per cent so we can dilute up to eight per cent and can rise about Rs 20,000 crore.”

The bank is also planning to launch retail bond issue of about Rs 200 crore in the first half of this year. The duration of the bonds will be 15 years, with a call option for 10 years, or duration of 10 years, with a call option of five years, he said.

He informed that bank also want its life insurance venture, SBI Life to get listed. He said, “We are not in need of capital for the company, but we would like it to be listed, so that there can be some price discovery. We are in touch with IRDA for that.”

Regarding its venture in overseas, it is planning into the Latin American countries.

“There are places where we already have licenses. For example, in Botswana we already have licenses and we have not utilized that so far,” he said.

The bank is also thinking of opening branches in countries such as in Africa where there is business from India but the bank has no presence so far, He said the Indian companies might go for doing business in energy, metals or minerals.

The told SBI Cards, the credit card venture of the bank is likely to achieve break even by the end of this fiscal as the losses are reducing, and added, “The losses have been coming down, we have been able to issue about 25,000 fresh cards on a monthly basis; we are hopeful of breaking even by this fiscal.” In the present fiscal the net loss by credit has come down by 17 per cent at Rs 154 crore (Rs 185 crore).

SBI revived loan scheme for farmers, to offer loan at 8.5%

State Bank of India, country’s largest lender has now come with a new scheme for farmers. Bank has revived its scheme under which it will provide irrigation and crop loans to the farmers at cheap rates. The bank aims to help farmers during the upcoming kharif season, and the rabi season later, a bank official pointed out. Earlier bank extended its special home loans scheme till end June 2010.

However SBI has marginally increased its lending rates for the special scheme which was first launched to help farmers hit by weak monsoons and drought conditions last year. This has been done as the bank’s cost of funds that increased in the period. The bank official clarified, that it has kept the rates still lower than normal floating rates loan.

In a released issue, SBI said it will be offering all fresh minor irrigation loans at 8.5% in the first year and 9.5% for the second and third years. These rates will be applicable for loans up to Rs 25 lakh and payable in three years and above. The normal rates will be around 10.50% to 13.25%.

The bank said crop loans will be given for one year on 10% rate for a sum above Rs 3 lakh and up to Rs 25 lakh. If the repayment is done timely then an additional 1% concession will be given, this is being done to encourage, “timely repayment culture.”


The crop loans under Rs 3 lakh will be offered at 7% and the concession for timely repayment here will be 2%, as per the interest subvention scheme of the central government. An anonymous SBI official said, “A combination of minor irrigation and crop finance concessions are required for helping farmers build capacity at this juncture.”

Bank has not changed margin money for new minor irrigation loans it continues at 10% flat from the original levels of 15% to 25% of the project cost. It has extended the moratorium period by one year for minor irrigation loans. The release said the repayment period for new loans has also been extended by one year.

In 2009-10 India’s food grain output is expected to equal last year’s levels in spite of the worst drought in 37 years hitting the summer crop hard, with the bumper winter crop output is expected to make up for the shortfall in the summer production, according to recent ET report.

SBI finalized two US based firms for joint venture of POS terminals network

State bank of India has finalized two US-based companies for the joint venture regarding the setting up of a network of point-of-sale (POS) terminals across the country. The two companies are Visa International and Elavon Inc.

The two foreign partners will provide payments technology solutions to SBI for setting up six lakh POS terminals at merchant establishments over the next five years.

The POS terminals are devices kept with retail and hospitality establishments for processing credit cards, debit cards, smart cards and other electronically submitted transactions in a traditional retail environment.

The POS system installed at retail includes a computer, monitor, cash drawer, receipt printer, customer display, barcode scanner, integrated card processing system, a signature capture device and a customer pin-pad device. When customer make payment with card, the merchant swipes the card at the terminal on keys-in payment information and the terminal does the rest.

At present merchant establishments in India, have to pay between 1.5 and 2.5 per cent of the transaction value to merchant acquiring banks. SBI is having talks with its partners to finalize the details of the joint venture, including signing of the memorandum of understanding, shareholders' agreement, capital structure and Foreign Investment Promotion Board approval for capital infusion, with its partners.

In January 2010 bank had launched SBI Payment Services Pvt Ltd, a wholly owned company, the joint venture partners will be initiated in the company to carry out merchant acquiring business.

A senior official told in the joint venture SBI will be the major share holder (over 51 per cent stake) even after the wholly owned subsidiary is converted into a joint venture. He added, the new entity will be a good source of non interest income.

As the POS terminal will be a tool for acquiring and retaining merchant establishments as customers, these can further be used for financial inclusion as it can be used as an alternative delivery channel in areas where it is not feasible to set up a branch or an ATM, said the official. In order to enhance usage of plastic money for the customer convenience the RBI has set the cash withdrawals up to Rs 1,000 a day per debit card issued in India at POS terminals.

A merchant establishment's account gets credited by about Rs 5 for every Rs 1,000 disbursed through the swiping of the card and SBI has issued around 7 crore debit cards up till now therefore the POS terminal will help in increasing their usage

As a future plan bank is thinking of using POS for mobile top-ups, utility bill payments, booking of railway and movie tickets.

SBI offers defence salary package for Indian Air Force

The State Bank of India, country’s largest lender as its commitment to offer best services to defence personnel has launched a defence salary package for the Indian Air Force. Before this, bank had announced similar package for Army and Navy personnel.

The bank will offer an array of concessional services such as zero balance accounts, interest rate concessions on loans, preferential allotment of lockers and free mobile banking.

During the launch of product SBI chairman O P Bhatt said, "I recommit that SBI would serve the very best we can."

In the package bank will provide free drafts and free cheque books and free funds transfer facility to any of the State Bank Group's networks of almost 16,000 branches or any other bank in India, besides free ATM cards and other features.

SBI further said it is planning to add 5,000 ATMs to its existing count of 20,000, out of which large number of ATMs will be established to serve Air Force formations which will benefit more than one lakh Air Force personnel.

The package offered to Air Force personnel include opening of zero balance accounts with a unique lifetime account number, valid even after retirement, and offers free mobile banking services, preferential allotment of lockers and interest rate concessions on home, car and personal loans, among others.

SBI said, "The bank's network of business correspondents appointed in unbanked rural areas will also be available for the basic banking requirement of the Air Force personnel and their families."

Speaking on the occasion, Air Chief Marshal P V Naik said, "I hope SBI would meet the expectations of defence personnel," and added that he would recommend the SBI chairman to translate it into a reality at the earliest.

SBI to install barcode-enabled ATMs

Mostly the senior citizen prefer to pay bills in personal as they are not comfortable in using ATM or make payment with debit cards, due to this they have to stand in long queues to pay bills. SBI is introducing barcode-enabled ATM throughout the country

If you are not tech savvy and have to stand in the long queue to pay bills, then you have a reason to smile. SBI is introducing barcode-enabled ATM throughout the country for faultless bill payment facility. The process will be completed in phases and over 5 crore SBI customers across the country will be able to use this facility.

SBI official said, the payments of the bills having barcode can be made at these specialized ATM. He added, "This can be used to pay mobile, electricity, credit card as well as civic authority bills.”

The official told the first such ATM will be set up in West Bengal's Mursidabad district, which houses the constituency of FM Pranab Mukherjee. In the first phase, three such ATM machines will be installed in the state. Later, 13 more barcode-enabled ATMs will be rolled out. The official told for this process bank has already tied up with Airtel and Vodafone.

SBI launched Platinum Debit Card

State Bank of India,, country’s largest lender has launched Platinum Debit card. Bank has a debit card base of over 70 million, have SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card.

On this card bank provides daily with drawl limit of Rs 1 lakh from ATMs and spending limit of Rs. 2 lakh at PoS (points of sale). The Platinum Debit Card holders will get extra benefits like they will have access to premium lounges, golf courses and various lifestyle outlets in India and abroad.

Apart from this cardholder will get insurance coverage of Rs 5 lakh for accidental death and Rs 50,000 for liabilities arising out of card loss as supplementary benefits.

The new debit card was launched in a function held at Mumbai. O. P. Bhatt, Chairman of the Bank, handed over the first Platinum Debit Card to Ashok Chawla, Secretary, Union Ministry of Finance, and Shyamala Gopinath, Deputy Governor, RBI. C. Narasimhan, Deputy Managing Director (Corporate Strategy & New Businesses), described the card as a premium payment product to cater the needs of high net worth individuals (HNIs) and bank’s affluent customers.

He said it is the first chip-embedded SBI debit card.

SBI plans to extend its teaser loan offer beyond March 31

Although many banks have withdrawn their teaser home loan rates but there is a good news that State Bank of India (SBI), the country’s largest lender will continue to offer teaser home loan rates beyond March 31. However formal announcement is yet to come.

As the lending and property rates are going to move up SBI plan as given more room to new home loan borrowers.

According to industry sources, the banking major decision might prompt other lenders to follow suit.

A senior SBI official claimed that the special home loan rate has helped in growth of its retail lending book. “There is demand from the field offices (circles) to continue with this offer beyond March, for better credit growth in 2010-11.”

“But the final decision rests with the corporate centre, which will look into the cost and liquidity conditions.”

A senior official in a housing finance company, however, had reservations. “Giving loans at 8 per cent is fine. But to keep it fixed for another year might be quite difficult.”

“With the Reserve Bank of India’s recent hike in repo and reverse repo rates by 25 basis points and an indication of further tightening, interest rates are expected to go up by 100-150 basis points in the next 12 months. Lower lending rates will put pressure on any finance company’s balance sheet,” he added.

According to some market analysts the bank is in a position to lend at these rates as it has a reserve surplus of close to Rs 40,000 crore.

Earlier when SBI had launched its teaser loan products, HDFC Chairman Deepak Parekh had called it a ‘gimmick’. Soon after that, in December, HDFC launched its fixed-cum-floating rate product.

In January 2009, SBI started the rate war, when it offered a fixed rate of 8 per cent for the first year. At that time bank launched two home loan products - SBI Easy Home Loan and SBI Advantage Home Loan.

Under the former scheme bank offered loan up to Rs 30 lakh, with rates of 8 per cent in the first year and 9 per cent in second and third years. At present the rates being offered at 8 per cent for the first year and 8.5 per cent for second and third years. From the fourth year onwards, customers have the option of choosing a floating rate at 2.75 per cent below the benchmark State Bank Advance Rate (SBAR). The “advantage loan” was for amounts above Rs 30 lakh.

Others such as HDFC and Axis Bank followed the SBI move. However Axis bank has withdrawn its two- year fixed rate in February, almost two months before schedule, citing high cost of funds. HDFC closed its offer on February 27, following an extension of two weeks over the February 14 deadline.

SBI and State Bank of Indore merger to complete by March

The merger of State Bank of Indore with country’s largest Bank, State Bank of India is likely to be completed by the end of this financial year.

This is the second merger after the State Bank of Saurashtra merger with SBI in August 2008.

After the completion of this merger five associate banks of the SBI will be left namely State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

The merger of State Bank of Indore with SBI has got the approval from both the central board of the bank as well as of government of India. In 2008-09 State Bank of Indore registered a net profit of Rs. 279 crore. SBI will have about 98 per cent stake in the bank.

In another development SBI indicating towards the lending rates has said the rates may rise from the second quarter of fiscal 2010-11. Chairman of SBI O P Bhatt said "So far as bank lending rates are concerned, I do not expect lending rates going up before May-June."

As recently RBI had raised its key rates in its policy review which will reduce the liquidity by Rs 36,000 crore from the monetary system.

SBI has also launched new scheme officers and other naval personnel called Defence Salary Package-Navy to offering services for free or with concessions.

The bank will be offering free drafts, free cheque book, free fund transfers and free ATM cards to officers and other navy personnel.

SBI and TVS Motor Company inks MOU to offer inventory funds for dealers

A Memorandum of Understanding (MOU) was signed between State Bank of India (SBI) and TVS Motor Company. Under this agreement SBI will be providing funds to over 600 dealers of TVS Motor Company across the country, at attractive interest rates. This will help the dealers to increase their working capital, enhance vehicle stocks and consequently increase retail sales.

The bank is initiating inventory funding program by the “Supply Chain Finance Unit” and the program is available on an electronic platform for its approved clientele having features such as online fund transfers, online repayment, real time viewing of account status etc. With this system time of transactions between the bank and its clients will get reduced.

“This association with SBI, is in line with our overall strategic business plan towards strengthening the working capital of our dealers. Their access to such funds at attractive interest rates will help them in growing their dealership and offer better retail services to the customer” said President (Marketing), TVS Motor Company, H S Goindi.

Manas Kumar Nag Chief General Manager - SME (BU), State Bank of India said,

“Through the signing of an MOU with TVS Motor Company, State Bank of India has made inroads into the two wheeler industry and this is a realization of yet another accomplishment of our overall strategy to step up loan disbursals under Supply Chain Finance and garner a significant market share.”

SBI Home/Car Loan Utsav 2010 to be held in Bangalore

State Bank of India (SBI) Bangalore circle will be organizing a three day SBI Home/Car Loan Utsav 2010 in the city, starting from February 19 to February 21. The event will be held at the bank’s head office on St. Mark’s Road.

The bank sources said at the utsav bank will offer spot loans to the borrowers at an interest rate of 8%. It added the customers can visit the stalls from 11 am to 7 pm on these three days and can choose from over 25,000 apartments. At utsav the customers can also select their favorite cars from a wide range available there.

SBI expands physical & technical network in North

The State Bank of India country’s largest public sector lender is expanding its physical and technological network by opening around 80 branches and 150 ATMs in the states of Jammu and Kashmir, Himachal Pradesh, Punjab and Haryana, and the Union Territory of Chandigarh in 2010-11.

At present, in the region the bank is having 875 branches and 32 processing centers.

Speaking on the sidelines of the launch of the off-line trading in Chandigarh Circle, Chief General Manager S K Sehgal told Business Standard the physical expansion will be mainly done in the under-banked regions, mostly in the hinterland. He added the bank has been taking up various awareness activities in the suburbs for the promotion of banking through technology that is via ‘business correspondents’ as it is more cost-effective.

He said that major physical expansion will be done in Himalaya (Leh and Drass) and this will help in catering the banking needs of defence personnel.

SBI to install 6 lakh ‘point of sale terminals’ across country

State Bank of India (SBI) will be installing 6 lakh point of sale (PoS) terminals, across the country where shoppers can make payments by swiping their credit, debit or pre-paid cards.

At present there are 4.5 lakh PoS terminals in the country, out of which few belong to SBI.

Brajesh Varma, deputy general manager - new business, SBI said, “We have select PoS terminals installed in Manipal University and Indian Institute of Management - Ahmedabad, where the installations were done on request to benefit students. But right now most are at colleges and universities.”

The bank also have plans to start a separate company to take care of the card payment network, for this bank has short-listed 3-4 joint venture partners, including global players.

Varma informed, putting to rest speculation about SBI having shelved the plan, “The timeframe is yet to be finalized, but in two years we should have around 6 lakh merchant terminals”.

Sachin Khandelwal, senior general manager, ICICI Bank has been recently nominated the chairman of the Prepaid International Forum, said, it’s a huge target.

SBI will be installing large number of PoS terminals in smaller cities.

Verma stated, “Tier-I cities have already been covered by the private sector banks. We will build this network in Tier-II and Tier-III cities”.

According to plan, the joint venture partner name will be finalized in a couple of months and the company will start operations in 6-8 months.

The bank will not wait for the new company to be formed it will start installing terminals.

SBI’s plan is close to private sector ICICI Bank who is selling its network to First Data Corporation. It is expected the Reserve Bank of India will allow to cardholders to withdraw cash from PoS terminals installed with shopkeepers, mall stores, etc.

It is believed that SBI has changed the name it had initially decided on for the venture.

SBI opened `SBI Sona Ghar' first exclusive gold banking outlet

The State Bank of India (SBI) first exclusive gold banking outlet `SBI Sona Ghar' in the country was inaugurated by the Minister of State for Human Resource Development D Purandeswari. Bank’s main branch is in Koti.

SBI Chief General Manager Shiva Kumar told the reporter banks’ launch of its new initiative is very timely as more and more people prefer to invest in gold. At new center gold deposit scheme will also be available.

He told through new centre pure gold coins and bars of 999.9 purity of 2 gm to 50 gm in a tamper-proof packaging will be sold. At new center gold deposit scheme will also be available.

The gold coins will be assay certified and are ideal for investment and individual and corporate gifting. At this outlet on bulk purchase of 500 grams and above special discounts will be given.

On deposit scheme 1 to 1.5 per cent interest in gold will be given for a period ranging from three to five years.

For instance on a 500 gram gold deposit for a period of three years, a customer will get 515 gram at the end of the term, he pointed out that the interest earned on the gold deposit is exempted from income tax and the value of gold has been exempted from wealth tax.

Even the appreciation on value of gold has been exempted from the capital gains tax.

Customers can take loan from any SBI branch by pledging gold deposit certificates. There is a provision for premature with drawl of the gold deposit, after an initial lock-in period of one year individual can with draw it.

He said, “We are targeting gold deposits of 500 kg in one year,'' and added that they will contact various temples and trusts to persuade them to deposit the gold which has been lying idle with them.

He informed bank aims to sell 100 kg gold every month. Purandeswari said as the price of gold is very high therefore it is the best investment option.