Tuesday, March 30, 2010

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Although many banks have withdrawn their teaser home loan rates but there is a good news that State Bank of India (SBI), the country’s largest lender will continue to offer teaser home loan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

Wednesday, March 10, 2010

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.