Concessional home loan scheme of SBI extended till 31st December

The largest lender in the country State Bank of India has announced to extend the concessional scheme where the lender was offering a concession of 25 basis points over the card rates till 31^st December this year, earlier the scheme was available till October 31^st.

In a statement the bank said "A concession of 0.25 per cent in the card interest rate over the tenor of the home loan is available under the ongoing special home loan campaign up to December 31."

A few lenders have recently launches the dual rate home loan scheme which has affected the home loan business of the bank and in order to lure customer the bank has extended the tenure of the scheme.

SBI not in mood to get into any trouble because of teaser loans

As ICICI Bank and HDFC Ltd, both leading lenders in the country have launched teaser home loan schemes where the interest rate remains fixed for initial few years and then turns to floating. The trend was started by the largest lender in the country State Bank of India which has to withdraw this scheme under immense pressure from the Reserve Bank of India has ruled out any possibility of re-launching the teaser loan scheme.

The Chairman of State Bank of India, Mr. Pratip Chaudhuri said "We have no plans as of now to launch any special home loans.

“We had tried to argue (with the RBI), to reason, but the regulator has a position and already we have provided 2 per cent on our teaser loan portfolio that is Rs. 500 crore. I think it was a stiff enough penalty and we would not like to live through it again,” he said.

SBI and its associate banks to recruit 5,000 employees

The largest lender in the country, State Bank of India has created job opportunities for youngsters willing to be a part of banking sector. It would be hiring as much as 5,000 employees on various posts for itself as well as for its associate banks.

As per requirements of the subsidiary banks, 1,000 probationary officers would be hired for State Bank of Bikaner and Jaipur, 1,416 for State Bank of Hyderabad, 1,328 for State Bank of Patiala, 843 for State Bank of Mysore and 400 for State Bank of Travancore and SBI itself will recruit around 206 officers.

Not only SBI, but other banks are soon to hire to meet their workforce requirements, it is estimated that all the public sector banks combined will hire around 45,000 employees during the year 2011-2012.

The last date to apply is 25^th of June.

SBI not in favor of further hike in policy rates

Due to the constant rise in the policy rates from Reserve Bank of India, the lenders and the borrowers are already in much pressure despite that the Central Bank is all set to hike the Key policy rates once again.

The Chairman of State bank of India Mr. Pratip Chaudhuri expressed his concern about the issue and said that the ongoing hike is no good and it might deter growth.

On the other hand RBI is taking all the necessary steps to rectify inflation and the hike in the interest rate is a part of its strategy.

The Central Bank has recently issued a discussion paper regarding the deregulation of the saving bank account interest rate, with which an individual could earn interest up to 6 percent on his saving account deposits. In this regard he said "We are not in favour of deregulation but adequate incentives for saving bank deposits. We will go along with whatever the Reserve Bank of India prescribes."

SBI and RBI in dialogue over teaser loans

The teaser loan scheme of State Bank of India has been a topic of topic for quite some time now and has attracted a lot of controversies. The teaser loan scheme was a great success in the masses but was never appreciated by the Central Bank.

But now, RBI has given a clue that it want to fix this point causing discontent between RBI and SBI permanently. RBI has asked for clarification in the matter of the special home loan scheme from State Bank of India.

A senior SBI official said "We have received communication from RBI seeking clarification on certain issues relating to our special home loan scheme. We will send a reply by this weekend."

The chairman of SBI MR. Pratip Chaudhuri said “We are continuing with the schemes at present. At the same time, we are in dialogue with RBI and will try to address the concerns of the regulator, deliver value to the customer and also make sure the provisioning is affordable.”

SBI sets up affordable home loan facility

The largest lender in the country State Bank of India has further extended its list of service, the latest addition being ‘affordable housing loan’ cell. First such facility has been set up in Nalla Sopara and initially will focus on providing home loans between 8-15 lakh.

The bank has launched this project on pilot basis and has formed an association with a few builders operating in the affordable housing segment so that the customers can get can every possible relevant information.

A bank official said "The facility will be set up near localities where affordable housing projects are undertaken. The cell is a distinct delivery structure, which has been designed to offer a simple model for appraisal/sanction methodology suited to the segment."

Discontent amongst SBI unions regarding merger of the subidiaries

The proposal of merger of all the subsidiaries with in State Bank of India suffered a huge setback when the officers and the staff members with the largest lender in the country expressed discontent regarding the merger of the subsidiaries.

Stat Bank Staff Union and SBI Officers Association of Kerala Circle said that such a move might hamper the growth of the India Public Sector Banking System and they even think that it will ultimately lead to the privatization of Indian financial sector.

The Union also said that as a lot of population in the country is yet devoid of banking system and thus it provides all the banks a handsome opportunity to grow.

According to the Union as the bank and the subsidiaries are growing at a good pace and they are earning satisfactory benefits there is no not of merger instead the banks needs to increase their branch count so that they could cater more and more people in the country.

Earlier while announcing the initiation process of the merger the senior official wit the bank accounted for various benefits that are expected through this merger, most importantly that it will cut the un-necessary competition prevailing between the subsidiaries of the same group and also the bank will be able to channelize talent pool available.

SBI experiencing dip in home loan demand

After recording a handsome growth of 32 percent in the home loans advances last fiscal, the largest lender in the country State Bank of India is likely to experience a dip in the home loan growth in the present fiscal year.

Inflation is the main culprit, due to which there has been a drop in the demand for the home loans. In the current quarter alone, SBI hiked the base rate twice that made home loans dearer for the customers.

A SBI official said “Our home loan advances growth will be a shade lower than last year. The drop is because demand for home loans has come down. Inflation has impacted the demand. High real estate prices are rising; interest rates are also responsible for bringing down demand of home loans.”

Another factor that contributed significantly is the change in the pricing structure. The teaser loan scheme that was very popular amongst the customers in whom the bank charged 8% interest rate for the first year then 9% for the second year and floating rate thereafter, has lost its charm.

SBI free to reduce its stake to 51% in subsidiaries

The largest lender in the country State Bank of India will now be free to reduce its stake in subsidiary banks to up to 51 percent. All this is made possible after the Government proposed a bill to be introduced in the Parliament.

Being able to do this, SBI will be able to raise capital and boost its operations.

The Managing Director and CEO of icra Mr. Naresh Takker said "This will give SBI the flexibility to raise funds for its associate banks rather than infusing capital all by themselves. However, it is unlikely that SBI will opt for this option for its associate banks, specially the unlisted banks, since it is in consolidation mode."

Earlier there were 7 subsidiaries of SBI but the bank merged two of them with itself some time ago. Now there are 5 subsidiaries left that includes State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Mysore , State Bank of Hyderabad and State Bank of Patiala.

SBI all set to merge subsidiaries with it

The largest lender in the country, State Bank of India is all set to grow to a mammoth size. The bank is under proceedings to merge the five subsidiary banks in it. The lender expects to complete the formalities involved in 12-18 months.

State Bank of India is expected to benefit a lot from the merger as it will reduce administrative overheads and the bank will be able to utilize the employees to the full extent.

In a statement Finance Ministry said “The consolidation is aimed at making the State Bank Group a stronger and more resilient organization.”

“While SBI has also stepped up its efforts to grow organically, the inorganic growth through mergers would also help the bank in scaling up within an acceptable time frame, to enable it to compete on an equal footing with foreign banks, not only in India but in the international economic arena as well,” informed the standing committee.

SBI has been working in this direction for 2 years now. Last year the bank merged State Bank of Saurashtra and State bank of Indore with it and now working on the five others.

The Finance Ministry also said “The merger of subsidiary banks with itself is thus more in the nature of restructuring leaving size, market share etc of the Group unchanged but leading to better operational efficiency.”

SBI in no hurry to raise deposit rates

The largest lender of the country State Bank of India has announced that it does not have any intentions of increasing the deposit rates in near future.

After the announcement of hike in the key lending rates by The Reserve Bank of India after the meeting on 25^th January, most of the banks have announced a hike in their deposit rates and a few other banks are soon going to increase their deposit rates.

Previously, State Bank of India raised their deposit rates thrice in past six months but for now it does not have any plans for the same.

Earlier the Reserve Bank of India expressed it concerns on the increasing gap between the loan and the deposits amounts.

SBI raises FCNR deposit rates

The largest Public Sector Bank of the country State Bank of India has raised the Foreign Currency Non Residential (FCNR) deposit on various currencies by up to 46 basis points. The bank raised deposit rates on selected currencies over various maturities.

The bank has announced a 28 basis point hike of deposits in pound sterling over all the maturities. The bank revised the deposit rates in Euro by 10 basis points to 2.57 percent over maturity of one year and less than two years.

The bank revised deposit rates for some other currencies including Yen and Canadian Dollar over various maturities. The bank kept the deposit rates unchanged for deposits in American Dollar.

SBI to go Green

State Bank of India has introduced a new facility to the banking system to reduce the wastage of paper and to save the precious time of the customers. An official from the bank said that apart from the regular counters the bank will introduce an additional counter in the banks where the customers could swipe their ATM card and enter the PIN to receive cash from the person operating the counter.

"In this way, there will be no requirement for paperwork and the process of money withdrawal will be fast," said I D Mozumdar SBI General Manager for network.

Under the Financial Inclusion Plan The State Bank of India has been given the responsibility to provide basic banking facilities to 408 villages of Jharkhand state with population over 2,000. The bank expects to equip 200 villages of the state with banking facilities by March this year.

Mr Mozmdar further said , "We do not require brick and mortar branches these days to extend banking facilities because technology has made the work easier and SBI is fortunate to have all the modern banking technology".

The bank plans to provide banking facility to the villages through mobile-based banking and bio-metric smart card. The bank has appointed Business Correspondents to implement these schemes .

SBI and ICICI ink deal with leading telecom companies

The two leading lenders in the country State Bank of India and ICICI Bank have tied up with Bharti Airtel and Vodafone Essar to offer mobile based banking to the customers. The mobile market in India is the second largest and the fastest growing in the world.

To make full use of the available opportunity the two leading banks took the step. The joint venture will be very beneficial for the population residing in the unbanked remote areas of the country. The step would further enhance the electronic payments market in the country.

SBI is the leading bank in the country and Bharti Airtel is the leading telecom service provider in the country with over 150 million customers. SBI and Bharti Airtel will jointly invest 1 billion rupees initially for mobile based banking.

The largest private sector bank in the country ICICI has tied up with the third leading telecom service provider in the country with above 121 million customers. The CEO and Managing Director of the bank Chanda Kochhar said "We are very excited about the partnership with Vodafone which will help ICICI Bank in deepening its base within the country. Mobile penetration is growing exponentially in the country of which the rural market forms a major contributor".

Presently about 60 percent of the population in the country has mobile connection and the sector is adding a staggering 18 million customer per month. The joint venture of the banks with the telecom companies will enhance their accessibility to the rural area in the country.

In all the deal could be very beneficial for the rural population in the country.

SBI and ICICI ink deal with leading telecom companies

The two leading lenders in the country State Bank of India and ICICI Bank have tied up with Bharti Airtel and Vodafone Essar to offer mobile based banking to the customers. The mobile market in India is the second largest and the fastest growing in the world.

To make full use of the available opportunity the two leading banks took the step. The joint venture will be very beneficial for the population residing in the unbanked remote areas of the country. The step would further enhance the electronic payments market in the country.

SBI is the leading bank in the country and Bharti Airtel is the leading telecom service provider in the country with over 150 million customers. SBI and Bharti Airtel will jointly invest 1 billion rupees initially for mobile based banking.

The largest private sector bank in the country ICICI has tied up with the third leading telecom service provider in the country with above 121 million customers. The CEO and Managing Director of the bank Chanda Kochhar said "We are very excited about the partnership with Vodafone which will help ICICI Bank in deepening its base within the country. Mobile penetration is growing exponentially in the country of which the rural market forms a major contributor".

Presently about 60 percent of the population in the country has mobile connection and the sector is adding a staggering 18 million customer per month. The joint venture of the banks with the telecom companies will enhance their accessibility to the rural area in the country.

In all the deal could be very beneficial for the rural population in the country.

SBI to finance projects of only reputed builders

Leading bank of the country State Bank of India has decided that it will also lend money to the reputed builders also. The bank has made the developments as the prices for the construction material is constantly moving up and the banking regulators are raising the provisions on commercial real estate.

According to the bank, it will fund only those reputed builders that have got all clearances from the civil and legal authorities.

Due to the rising interest rates the bank is expecting that the demand for housing loan may dampen.

About 70 per cent people availing home loan are first time home buyer and the remaining 30 per cent do it as investment.

SBI to introduce 600 Financial Inclusion Centres

The banks in India are working at full pace to successfully implement the Financial Inclusion Plan. In a similar effort the largest bank of the country , State Bank of India has announced to set up 600 Financial Inclusion Centers through out the country.

The motive behind the move is to provide back end support to the Business Correspondents working in the villages and also to exercise administrative control over them. The bank has set up the FIC to provide banking facilities to the 12,421 unbanked villages out of 72,315 villages having a population of more than 2,000 by March 2012.

The FIC will provide back end support to the Business Correspondents on the opening of no frills accounts and will also keep a constant watch on the performance of the BC. Such a practice will surely enhance the efficiency of the Business Correspondents.

Deputy General Manager of SBI Mr M I Dholakia said “Under the financial inclusion plan, our bank is currently providing basic banking services in 1,300 villages. This number will jump to 5,300 by March-end 2011. We will complete the target of providing banking outreach in 12,421 villages by March-end 2012”.

The entities that can work as business correspondents includes include NGOs/ MFIs set up under Societies/ Trust Acts, Post Offices, retired bank employees, ex-servicemen, retired teachers, retired government employees, individual kirana/ medical/ fair price shop owners.

The Financial Inclusion Plan is a very ambitious project lead by the Reserve Bank of India. This project will definitely bring a change in the life of the poor people who reside in the rural India and will definitely make a major contribution in the development of the country.

SBI takes another step in overseas venture

State Bank of India is currently present in 32 countries including US, UK, Canada and Mauritius. The bank is now planning to mark presence in a few more countries this year. The bank has plans to set up operation in South Korea, Sao Paulo and Botswana.

A bank official said "The bank is looking at opening a representative office in Brazilian city Sao Paulo and a full service branch in South Korea".

The bank said that the focus of the new offices will be on India related business and to provide more facilities to the overseas customers of the bank. At present the contribution of overseas collection in the total business of the bank is 16 percent.

The bank is expanding overseas but the bank has maintained a constant pace in domestic expansion also. The bank opened 611 new branches and 4, 206 new ATM between October 2009 to September 2010.