SBI India

Concessional home loan scheme of SBI extended till 31st December

2011-09-22T05:15:00.000-07:00

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

2011-09-08T04:08:00.000-07:00

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

2011-06-09T04:43:00.000-07:00

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

2011-05-03T04:49:00.000-07:00

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

2011-04-19T04:05:00.001-07:00

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

2011-03-30T00:49:00.000-07:00

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

2011-03-25T03:09:00.001-07:00

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

2011-03-23T02:21:00.000-07:00

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

2011-03-01T04:01:00.000-08:00

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

2011-02-24T03:30:00.000-08:00

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

2011-02-09T03:40:00.000-08:00

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

2011-02-02T03:34:00.001-08:00

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

2011-01-25T03:21:00.000-08:00

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

2011-01-13T04:09:00.003-08:00

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

2011-01-13T04:09:00.001-08:00

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

SBI to finance projects of only reputed builders

2011-01-10T04:20:00.000-08:00

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

2011-01-07T04:40:00.001-08:00

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

2011-01-03T03:20:00.000-08:00

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.

Cash back offer on train tickets for SBI credit card holders

2010-11-01T04:31:00.000-07:00

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

2010-10-28T04:49:00.001-07:00

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

2010-10-25T04:52:00.000-07:00

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

2010-10-05T04:19:00.001-07:00

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

2010-10-05T04:14:00.000-07:00

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

2010-10-01T04:01:00.000-07:00

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

2010-09-21T04:46:00.000-07:00

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

2010-09-16T04:08:00.000-07:00

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

2010-09-06T05:28:00.000-07:00

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

2010-08-26T03:21:00.000-07:00

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

2010-08-25T04:56:00.000-07:00

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

2010-08-23T04:25:00.001-07:00

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

2010-08-16T04:42:00.000-07:00

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

2010-07-16T04:33:00.000-07:00

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

2010-07-15T05:03:00.000-07:00

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

2010-07-08T04:19:00.000-07:00

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

2010-07-05T08:31:00.000-07:00

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

2010-07-02T04:02:00.000-07:00

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%

2010-06-30T05:25:00.000-07:00

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

2010-06-28T06:33:00.000-07:00

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

2010-06-21T04:53:00.000-07:00

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

2010-06-17T03:47:00.000-07:00

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

2010-06-16T05:55:00.000-07:00

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

2010-06-11T02:29:00.001-07:00

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

2010-06-09T03:36:00.000-07:00

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

2010-06-08T04:08:00.000-07:00

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

2010-06-07T03:48:00.000-07:00

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

2010-05-27T00:13:00.000-07:00

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

2010-05-24T03:01:00.000-07:00

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

2010-05-20T03:03:00.000-07:00

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

2010-05-19T02:07:00.000-07:00

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

2010-05-17T02:57:00.000-07:00

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%

2010-05-10T02:23:00.000-07:00

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

2010-05-06T00:50:00.000-07:00

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

2010-05-05T05:20:00.000-07:00

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

2010-05-05T04:39:00.000-07:00

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

2010-03-30T05:19:00.000-07:00

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

2010-03-30T05:04:00.000-07:00

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

2010-03-10T03:12:00.000-08:00

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

2010-02-26T03:44:00.000-08:00

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

2010-02-26T03:12:00.000-08:00

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

2010-02-09T03:44:00.001-08:00

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

2010-01-19T03:54:00.000-08:00

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

2010-01-06T02:05:00.000-08:00

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.

SBI predicts no immediate change in lending rates

2009-12-29T03:00:00.000-08:00

The State Bank of India (SBI), country’s largest lender the first bank to launch special home loan scheme offering 8% interest rate, says no immediate change is likely in lending rates.

SBI chairman .P. Bhatt, who was on a visit in Jamshedpur, told the step taken by the bank in the home loan segment has benefited both the customers and real estate developers.

Bhatt said, “We reduced the home loan lending rates to 8 per cent per annum and as a result developers and customers started returning to the market. Other banks were also forced to follow our footsteps.”

He maintained that in market liquidity is in surplus but the credit growth has yet to pick up.

He added, “I don’t see any hike in lending rates of the bank in the next six months. There is enough money available in the market and banks are not facing any difficulties in providing credit to customers at this point of time”.

MoU inked between SBI and Honda Siel Cars

2009-12-07T02:15:00.000-08:00

A Memorandum of Understanding (MoU) was inked between State Bank of India (SBI) and Honda Siel Cars India Ltd for providing auto retail financing to prospective customers.

According to company’s press release SBI will be the preferred financier for the entire range of vehicles marketed by Honda Siel Cars in India.

Honda Siel Cars' director (marketing) Tatsuya Natsume and SBI's chief general manager, personal banking business unit, P Nanda Kumaran signed the MoU.

The main aim of signing MoU is to target high-end customers who will be taking car loans of above Rs 5 lakh from the bank. SBI has launched a special scheme called SBI Advantage Car Loan Scheme for this segment. The bank release said the scheme is available for individuals – salaried, professionals, self-employed, businessmen and proprietary/ partnership firms- who pay income tax and whose income/net profit or gross taxable income is Rs2.50 lakh and above.

SBI under its car loan is giving 85% of on-road price of the car with a repayment period of 7 years as maximum applicable to all categories of customers. Bank is charging only 0.50% of the loan amount as processing fee.

The release said, the USP of the product is the loans will be sanctioned on a priority basis.

SBT extended home loan scheme, withdrawn car loan scheme

2009-12-03T03:09:00.000-08:00

The State Bank of Travancore (SBT) has also extended its Aishwarya Home Loan scheme till March 31, 2010, and has reintroduced processing charges.

Under this scheme the home loans taken during this period will be offered at the rate of 8 per cent (fixed) during the first year, then for the next two years the rate would be 9 per cent (fixed) on up to Rs 30 lakh and for the next two years it would charge 9.5 per cent (fixed) for above Rs 30 lakh.

According to bank press release, subsequently the interest rates for these loans after wards will be at 2.5 per cent below prime lending rate (floating) for limits up to Rs 30 lakh and at 2 per cent below prime lending rate (floating) for limits above Rs 30 lakh.

For the time being SBT has withdrawn its Aishwarya Car Loan scheme from December 1, and consequently the SBT Car Loan scheme will be available at normal rates with processing charges. The normal rates of car loan scheme charged by the bank range from 11 per cent to11.25 per cent for a tenure of up to seven years, the release stated.

SIB authorized to distribute commemorative coins on St Alphonsa

2009-11-13T02:08:00.001-08:00

Recently the commemorative coin on India’s first woman Catholic Saint Sister Alphonsa was released by the Union Finance Minister Mr P. Chidambaram. Sister Alphonsa, who spent a quiet life at a convent in Bharananganam village in Kottayam district in the early 20th century, was conferred sainthood by Pope Benedict last year. South Indian Bank (SIB), a Kerala based lender has been authorized to distribute the coins through its branches.

The Rs five coin has the engraving of the Kerala – born nun. The distribution of coin was inaugurated at SIB headquarters in Thrissur where Dr V.A. Joseph, Managing Director and Chief Executive Officer of SIB presented few pieces of coin to Archbishop Andrews Thazhath, a bank press release stated.

The Provincial of Assisi Province of Franciscan Clarist Congregation received the coins; St Alphonsa belonged to this place.

State Bank expects growth in loan segment and increase in margins

2009-11-03T01:45:00.000-08:00

Country’s top lender, the State Bank of India is expecting growth in its loan segment and margins to increase as more and more corporate are showing confidence in Asia's third largest economy which will boost in credit demand.

On Saturday, the state-run lender September quarter net profit raised by 10.2 percent taking to 24.9 billion rupees ($530.2 million) on trading gains, while there was slip in loan demand and low lending rates from core operations.

However Reuter survey of analysts had forecasted net profit at 24.6 billion rupees.

While on Friday ICICI bank the closest rival said, their net profit has increased to 2.6 percent, defeating the forecast.

It is said the increasing business confidence in Asia's third-largest economy is likely to boost the corporate, housing, auto and retail loan demand which will help Indian banks to retrieve their loan growth.

SBI Chairman O P Bhatt told reporters, "Loan growth was slow until June. After that it has picked up significantly and if the rate of growth continues we should be able to meet our targets".

in July-September there was a growth of 16.4 percent in advances, covering its 30 percent flow over the past few years but more than 13 percent sector growth, stated State Bank. The State Bank along with its associates has hold over a quarter of Indian bank loans and deposits.

Bhatt stated, it is likely to attain credit growth of 22 percent in the year of March 2010.

In the September quarter, most Indian corporate has done good earnings, which reduced the risk of rising bad debt for Indian banks.

State Bank has 12,000 branches across India and abroad, and its bad debts is estimated to have risen to 2.99 percent in the fiscal second quarter as against 2.79 percent in the June quarter.

Also its provisions for bad debts had declined to 42.9 percent in July-September as against last quarter’s 45.2 percent.

According to Analysts State Bank and ICICI Bank will be affected most by the measures taken by the central bank to raise the minimum provision ratio for bad debts to 70 percent from 10 percent by September 2010.

In view of RBI’s move the bank will be required to provide at least 50 billion rupees more to meet this target, Bhat said he is waiting for details from the RBI.

Bank there was growth of 2.55 percent in net interest margin in the quarter to September as against the 2.3 percent in the previous quarter.

The bank hopes net interest margin to push up by 10 to 15 basis points in the next few quarters as it is increasing low-cost deposits and cutting high-cost term deposits
on the other hand bank’s capital adequacy ratio, a measure of its financial efficiency was at 12.47 per cent which stood at 12.14 percent a year ago.

State Bank of India will require about 360 billion rupees over the next 5 years so that it can maintain its capital adequacy ratio of 12 percent, said Chief Financial Officer S.S. Ranjan.

Bhat informed the process of acquisition of State Bank of Indore is on track and the board has given its approval to the share swap ratio, but he refused to reveal the details.

State Bank sources said it is looking at overseas acquisition opportunities in order to strengthen its portfolio.

Bhat referring to the global credit crisis stated, "We are looking at it but in the current climate it is difficult. If you make a mistake it won't be good for us in the context of what has happened across the world".

State bank is getting tenth of its profits from its overseas operations.

In July-September shares of State Bank prized at $31.5 billion rose by 26 percent, beating a 20 percent rise in the sector index and an 18 percent gain on the benchmark index.

SBI ATM failed to dispense cash, paid compensation to a customer

2009-10-21T03:50:00.000-07:00

The State Bank of India was directed by the District Consumers’s Forum to pay Rs 3,000 as compensation to a customer as an automated teller machine (ATM) of the bank could not provide him cash.

Forum President Iqbal Ahmad said, "The compensation must be provided to Mr Rajesh Kapale in a month".

Kapale resident of Noniya Kardal has an account at the local SBI branch. On February 10, 2009 tried to withdraw Rs 15,000 from the ATM but machine dispensed a slip mentioning that the transaction could not be processed. Kapale had adequate funds in his account.

He wrote a letter to SBI officials but did not obtain any response.

The Bank agreed that on February 10 the ATM was non-functional for some hours and Mumbai was alerted about this.

SBI, LIC proposes to introduce Islamic products

2009-10-21T03:16:00.000-07:00

Senior officials of the State Bank of India (SBI), country’s largest lender and Life Insurance Corporation (LIC), the largest insurance company, informed that the two firms are planning to introduce Islamic products to tap the investment habits of Muslims in the country.

Following this the SBI officials over the past few days have been meeting top experts in the field while a team of LIC officials has been set up to study these products. The Reserve Bank of India recently conducted a study and reached to a conclusion that it might not be possible to include Islamic banking in the current regulatory structure in the country.

However LIC chairman TS Vijayan told ET the corporation has set up a team to study Takaful, the insurance equivalent of Shariah-compliant Islamic banking. Through insurer’s representative office in Singapore the product will be offered to cater the Malaysian and Indonesian market.

Mr Vijayan informed, “We have put a team to study Takaful products. We are looking at this product for our Saudi operations where Takaful is coming up”.

At SBI the process is in the preliminary stage. SBI deputy general manager, overseas expansion and planning, Naresh Malhotra told, “We have been studying the feasibility of launching Islamic banking in terms of the products that can be offered and the systems that need to be put in place”. He along with a team of officials at the International Business Group, have been meeting several experts to study the legal and regulatory obstructing from launching Shariah-compliant products.

SBI is the latest entry in the growing list of firms which are trying to get hold on the investment habits of around 142 million Muslims in the country. However, over the past few months, two mutual fund schemes have been launched which are operating on a Shariah-compliant basis. Two more insurance companies have launched special pension fund schemes. Recently the Kerala government has also announced that it is thinking of setting up a Shariah-compliant NBFC, capitalized at Rs 1,000 crore.

Mohammed Hussain Khatkhatay, noted expert on Islamic banking pointed out, “Islamic banking could be introduced by effecting changes through notifications of RBI and without a change in law”. He added that for this strong political will is required from the government side which might be difficult to bring about.

Regarding this recently RBI constituted a working group under the chairmanship of Anand Sinha, an executive director. The group in its report stated that it is not possible to introduce Shariah-compliant instruments in the current regulatory structure.

SBI’s business per employee lower than industry average

2009-09-17T22:35:00.000-07:00

According to RBI report for the year 2008-09 the productivity of the State Bank of India’s employee stood at Rs5.56 crore which is below the estimated industry average of Rs7.50 crore for the year.

While the country’s largest lender’s wages as percentage of total expenses accounted to 16.64% as against the industry average of 13.52% for 2008-09.

As per the RBI report on profile of banks, business per employee (total business of the bank divided by the number of employees) of IDBI Bank stood at Rs20.30 crore and that of Punjab National Bank at Rs6.54 crore.

While the business per employee of Canara Bank stood at Rs7.80 crore, Bank of Baroda at Rs9.14 crore, Bank of India at Rs8.33 crore and Union Bank at Rs6.94 crore for 2008-09.

In comparison to public sector banks, country’s private sector banks have done fairly well with the business per employee of ICICI Bank and Axis Bank being at Rs11.54 crore and Rs10.60 crore, respectively for the last fiscal.

Also the foreign banks’ employee productivity has been higher in comparison to the industry average with Citibank, HSBC, Standard Chartered Bank and Barclays business per employee at Rs18.80 crore, Rs9.61 crore, Rs9.71 crore and Rs11.10 crore, respectively.

ICICI Bank’s profit per employee has been higher at Rs 11 lakh, among the private lenders while the HDFC Bank average has stood below at Rs 4.18 lakh.

SBP announced Festival Bonanza- offers 3 new home loan schemes

2009-09-10T03:35:00.000-07:00

There is a competition among the banks of offering best festive offers. The State Bank of Patiala has launched a Festival Bonanza with 3 new Home Loan schemes on liberal terms and conditions. According to bank’s press release the schemes will be applicable from September 1 to November 30, 2009. The release said the schemes have been launched to cater the customer’s need for attaining home loan at affordable rate of interest.

Under HI-Five Home Loan scheme SBP is offering a fixed rate of interest at 8% p.a. for 5 years for the loan of up to Rs.5 lacs. The loan repay back period has been set for 10 years. Under Easy Home Loan scheme SBP is offering a fixed interest rate of 8% p.a during 1st year 8.50% for 2nd and 3rd year. The maximum loan amount under this scheme is Rs.50 lacs and maximum repay back tenure is 25 years.

While under Advantage Home loan scheme SBP is offering 8% p.a interest for 1st year and 9% p.a. for 2nd and 3rd year. The scheme will be offered on above Rs.50 lacs for the period of 25 years. The bank will not charge any pre-payment penalty in case the borrower opts to pre-pay the loan at the time of reset in all variants. Processing fee has also been completely waived off up to 30.11.2009.

SBI see surge in mobile banking customers

2009-09-02T05:07:00.000-07:00

More and more customers are opting for mobile banking facility. According to banks data in the last two months there have been increase in the number of customers registering for mobile banking facility. The main reason behind this increase is a steep rise in small-value transactions.

A senior SBI official informed that in the last two months more than 20,000 customers have opted for mobile banking and in the future more are expected to add.

The official told press, "Both customers and bank branches have realized the immense potential of this service, especially when it comes to small value transactions. We have seen more number of customers availing this service in the July-August period."

As on date around 33,000 clients have registered for mobile banking with SBI as against 10,000 in May this year.

SBI announce fresh offers in the housing finance segment

2009-08-13T03:17:00.000-07:00

The State Bank of India announced fresh volley in the housing finance segment in which it has capped the interest rate at 8 per cent for five years loans of up to Rs 5 lakh.

The bank stated it will offer loans up to Rs 50 lakh at 8 per cent for the first year and 8.5 per cent in the second and third years. Recently SBI has become aggressive in the highly competitive home loan market, which was earlier dominated by HDFC.

Currently HDFC is offering home loans up to Rs 15 lakh at an interest rate of 8.75 per cent. For loans between Rs 15 lakh and Rs 30 lakh and that above Rs 30 lakh, bank is offering 9% and 9.50% for 20-year tenure respectively.

Currently SBI’s home loan offers are the cheapest one in the market.

Earlier in February SBI announcement had astonished the market when it capped the interest rate on all home loans at 8% in the first year. It made the offer more attractive in June when it set a Rs 30 lakh cap for its Easy Home Loan Scheme, under which it fixed interest rates at 8% in the first year and 9% in the second and third years.

Latest SBI has announced a three-month long “SBI My Home Campaign” from August 8 to make easy for home buyers during the forthcoming festival season. The bank stated no processing fees will be charged on home loans.

Thus the individuals can take loan up to Rs 5 lakh under SBI Hi-Five Home Loan at an interest rate of 8% for a period of five years. Therefore the customer gets an option to choose between floating rate of 2.75 per cent below the State Bank Advance Rate (SBAR) and a fixed rate of 1.25 per cent below the SBAR for a further loan term of five years. However the SBAR is the bank’s benchmark rate and stands at 12.25 per cent.

The borrowers who take home loans up to Rs 50 lakh will get an option that at the end of three years they can choose between a floating rate of 2.75 per cent below the SBAR and a fixed rate of 1.25 per cent below the SBAR. But the tenure for these loans can stretch up to 25 years.

P. Nandkumaran, general manager, retail loans at the SBI, in an interview told The Telegraph that in the second scheme the effective interest rate of around 8.71 per cent will be charged for the entire tenure of the loan.

He added, “No bank now offers that kind of rate and if we were to minus the processing charges, the effective rate will come down further by another 10 basis points”.

Nandkumaran informed that home loan sanctions have jumped to Rs 2,100 crore a month from Rs 1,500 crore since its offer of 8 per cent interest rate scheme. He said, “We expect a much better response from this scheme”.

According to analysts although the SBI home loan segment has seen rise in the share over the past six months, but HDFC still continues to be the leader. At present SBI’s market share in the home loan market stands to be a little over 20 per cent. Though the current figures of the country’s largest home loan financier HDFC is not known but the corporation, during the fiscal year ended March 31 had market share of 40%.

SBI auto, home loans registered growth of 22% by June end

2009-08-06T05:10:00.000-07:00

State Bank of India, during the last one year has witnessed a considerable increase in its retail loan portfolio. Between July 2008 and June 2009 the total retail advances increased by 22.52 per cent which amounted to Rs 112,862 crore.

There has been fastest growth on a year-on-year basis in the education loan segment among the various retail loan portfolios, while auto loans increased by 29.05 per cent and home loan registered a growth of 24.00 per cent on a year-on-year basis.

Bank education loan portfolio registered a growth of Rs 7,162 crore by the end of 2009 as against Rs 5,099 crore in the same period previous year which means a 40% increase in the portfolio.

In India SBI is the largest education loan provider and by the end of March 2009, it had approximately disbursed 24% of the total education loan distributed by all public sector banks put together.

The figures were made public in quarterly report of the bank released on Thursday.

In case of auto loan portfolio by June 30, 2009 the bank had distributed loans amounting to Rs 10,399 crore as against total auto loans of Rs 8,059 crore in the previous year, thus attaining the growth of 29.05 per cent, the highest among all banks.

To increase its market share in the auto loan portfolio SBI this year had launched a special auto loan scheme called SBI Ezee car loans, under which the bank offered 8% per interest for the first year.

While the home loan portfolio registered a growth of 24.00 per cent on a year-on-year basis. The bank by June 30, 2009 had distributed home loan amounting to Rs 57,513 crore as comparison to Rs 46,370 crore previous year.

Earlier this year SBI had introduced a special home loan scheme under which it offered loans at 8% in the first year.

Thus SBI maintains that it has been the fastest growing home loan provider during the first quarter of the present financial year.

Personal loans also come under retail loans but bank did not provide separate figures for this segment.

SBI to launch banking plaza – the 24-hour banking

2009-07-24T03:15:00.000-07:00

Soon India’s largest lender the State Bank of India (SBI) will be opening a banking plaza at its main branch. This was informed by Sanjaya Dikshit, DGM of the main branch.

On Sunday the DGM held a meeting with customers and non-customers in which he revealed about the plans of opening a banking plaza. He told the banking plaza will be opened at the main building and will work on the concept of 24-hour banking under which customers can avail all the facilities (from operation of account to loan sanction) of banking under one roof.

He told in the meeting there was a good interaction with the customers and got feed back along with suggestions from its respected customers. In the meeting before the interaction session bank officials informed the guests about the various schemes, new schemes and facilities bank is offering. During the interaction session customers gave some good feedback and suggestions which can help the bank in offering better services.

The DGM also informed the guest that bank is giving car loans and housing loans at the rate of eight per cent for the first year, the lowest rate of interest being offered by SBI in the banking industry. Along with him Suresh Sharma and Shashikant Khandekar were also present in the meeting.

SBI get first-stage nod for general ins biz in tie-up with Insurance Australia Group

2009-07-13T04:59:00.000-07:00

Insurance regulator Insurance Regulatory and Development Authority (IRDA) has given first-stage approval to State Bank of India (SBI) for its general insurance business.

SBI will start its general insurance business in collaboration with Insurance Australia Group.

IRDA Chairman J Hari Narayan told press, "We have given first-stage (R1) approval to SBI for the general insurance company. There are a total of three stages (of approvals)".

He informed that IRDA SBI will be granted full approval when it will apply for it.

Hari Narayan said, "The ball is in their (SBI) court. It is up to them -- when they apply for the remaining two stages".

SBI will be starting its general insurance joint venture in the fourth quarter of the current fiscal.

SBI, the public sector lender, is already having a life insurance joint venture with BNP Paribhas Assurance--SBI Life Insurance.

SBI chairman says interest rates can be hiked in 6 months

2009-07-09T03:37:00.000-07:00

On Tuesday the chairman of State Bank of India, the country's biggest lender, said since last October the interest rates have been falling but there are chances that interest rates might get strengthen in six months as credit is picking up. O.P. Bhatt informed reporters as the increase in business activity can be seen which in turn will result in higher loan growth in the second half of the year. He added, "Six months down the line with credit rising and the entire borrowing taking place, rates will either stabilize or even harden".

"There are lots of signs available in the economy that business activity is increasing across multiple sectors. But it is still not showing up in bank lending. We believe that with time lag it is going to happen." Since last October the central bank has cut its main lending rate by 425 basis points in order to boost the slowing economy and state-run banks responded to this by reducing rates by 150-200 basis points. State Bank, along with its associates controls a quarter of the Indian bank loans and deposits; on June 24 it reduced its lending rate by 50 basis points. Since November its benchmark lending rate has declined by 200 basis points since November. In November Indian bank loan growth has come down from around 27 percent in to about 15 percent in June and rates have halved to around 30 percent seen in the financial year to March 2008. Bhatt addressed the reporters after he along with other bank chiefs met the central bank governor, D. Subbarao, before a quarterly monetary policy review on July 28. He told in the meeting the main focus was on the current "liquidity overhang" in the system and managing government borrowing without stress. Finance Minister Pranab Mukherjee said in the budget on Monday the fiscal deficit will touch a 16-year high of 6.8 percent of gross domestic product and the government will have to borrow from the market to reduce the shortfall.

Bhatt added commercial banks have requested the Reserve Bank of India (RBI) to extend loan restructuring program till December. Last year the central bank has allowed banks to re-set terms of some loans where they are not receiving repayments regularly, except for real estate and personal, to avoid them from being accounted as non-performing loans in the course of an economic downturn. "We have asked RBI to extend loan restructuring deadline as it is taking lot of time as cases of consortium lending involves multiple banks," Bhatt said. Shares in State Bank, which having a market value of $22 billion, ended down 1.1 percent lower at 1,636.35 rupees in a Mumbai market that rose 0.9 percent.

SBI promises promotions to top levels and overseas postings to prospective executives

2009-07-07T05:13:00.000-07:00

State Bank of India (SBI) is looking for 500 management executives therefore it is looking for best talent. Therefore bank is promising to its prospective management executives a promotion to top levels as well as postings in overseas branches.

The bank said, it has prepared an “attractive promotion policy to reach the top levels of the bank” along with an “attractive compensation package”.

In addition, “an unmatched opportunity to experience the rich diversity of India through posting at various places and also foreign locations” is also being publicized.

SBI in its recruitment notice for the management executives has stated, “The bank has a massive and unmatched distribution network of 11,655 domestic branches, reaching every nook and corner of the country, 92 foreign offices spread over 32 countries covering all time zones as well as world-class technology base providing st ate-of-the-art virtual banking channels”.

It further added, “On an ever expanding banking horizon, globalization has opened up infinite business opportunities at home and abroad.”

Earlier SBI has mentioned that in the current fiscal, the bank will be recruiting 33,703 new hires of 2008-09 and also has the plan for the recruitment of 13,000 employees in 2009-10.

SBS successful merger with SBI builds confidence for future M&As

2009-07-03T03:42:00.000-07:00

State Bank of India (SBI) will be finalizing the merger of State Bank of Indore with itself in the next twelve months.

Meanwhile the State Bank of India (SBI) Chairman O P Bhatt has received the final approval from the government on the proposal to merge State Bank of Saurashtra (SBS) with the parent bank on August 13 last year.

Precisely a month later, SBI has incorporated the systems of the two banks. Jeevan Das Narayan, general manager in the SBI’s mergers and acquisitions (M&A) cell said, “It was an overnight operation and next morning, when people logged in, no one even realized that we had moved to a common platform”.

The good experience the banks have attained has given the M&A cell the confidence to complete a second merger – with State Bank of Indore -- within the next 12 months.

Bharati Rao while sitting in her 18th floor office at the SBI headquarters, advisor in-charge of the bank’s M&A cell, is closely examining the feedback her team is receiving on the bank’s proposal to acquire State Bank of Indore, its smallest associate bank.

However, bank’s discussion board has received an optimistic feedback from ‘Jai ho’ to ‘Yeh to hona hi tha’. Although the employees union has called for a strike after the two boards have approved the plan 10 days ago, Rao isn’t too disturbed.

After the merger over 6,000 State Bank of Indore employees will get the benefit of pension and better healthcare. Rao stated, “But it’s not just about better facilities. A big benefit is that post-merger; State Bank of Indore employees can also work for a large financial conglomerate that has interests in insurance, mutual fund and pension”.

Similar to SBS case, top executives from SBI and State Bank of Indore will be shortly holding consultations with employees and clients of the Bhopal-headquartered body to explain the rationale and benefits of the merger.

Rao, who was earlier deputy managing director at SBI stated, “Most customers do not like dislocation. We need to tell them that they will have access to all products and services that they use at present and may get some more. A lot of times pricing at SBI is much better”.

The strategy adopted will be simple. The large clients will be common; some of the smaller ones will be serviced by the mid-corporate group. In case of SBS, the only upsetting for clients has been that some of them are now being serviced by SBI’s Ahmedabad office, instead of the SBS head office at Bhavnagar. The helping point in this case was that senior SBI executives led by Bhatt met clients to alleviate whatever fears they had.

But the main focus is on employees, as they are the ones who make a merger a success or a failure. Once more, it is the SBS experience that SBI is banking on, though with minor variations.

In the beginning, some executives from State Bank of Indore will be joining Rao’s team to make sure a smooth merger. Besides, the entire staff will be given training in batches to ensure problem-free system integration. In case of SBS, SBI had given six months training almost the entire 7,000 employees of the former.

Incorporation of employees is something that Rao’s team had worked on very closely since the last public sector bank merger of New Bank of India with Punjab National Bank is still causing heartburns to the employees of both the banks, who are still bitter about delay in promotion.

Therefore SBI examine the data on promotions over a five-year period, worked on nearly half-a-dozen models, hired a consultant and then finalized the policy. And, to fight off any problems later, SBI even got legal opinion to endorse the move.

In smaller bank, the chances of promotion are higher. As, there were only 2,000 officers at SBS, over 90 per cent of whom were in ranks up to AGM. While at SBI, there were nearly 50,000 officers. Although all SBS officers have joined at the same level and their seniority has not been affected, the promotion policy predict that it will take one year extra for an SBS officer to get a promotion. In case an SBI officer is eligible for promotion in four years, it will take a former SBS officer five years.

The other area of focus is to ensure that there is no disturbance at the branch level. At the head office in Bhavnagar, the three zonal offices in Gujarat and at the two regional offices in Mumbai and Delhi, the clerical staff is redeployed. But some 500 officers were shifted to the Ahmedabad branch. But in the zonal and regional offices, it was ensured that officers up to the level of chief manager were not moved outside the state.

A senior executive of SBS, who is at present part of the SBI set-up, said that the policy has worked out well, at least so far. “State Bank of Indore employees know exactly what was given to the SBS staff. So, that part is clear now,” said Rao.

Although she is unwilling to discuss the plan for the remaining five associate banks, SBI’s policies have been worked out carefully over the last two years or so. “The thought was, let’s give it a try. If it works out, it’s wonderful, if it does not, its okay,” said a senior SBI executive.

A merger is right decision as there is too much of duplication. For instance, there are many places where an SBI branch is competing with one of its associates in mobilizing deposits and giving out loans.

“All the seven banks have an establishment cost, which can be one and we can work in unison. They have strong presence in some areas which we can make use of,” Rao said.

If SBI is able to merge all the associate banks, its branch network will increase nearly by 40 per cent, while the profits would be 30 per cent extra. And, to top it up, there will be significant savings. The SBS merger has already led to subsequent savings of a few hundred crore though no firm assessment has been made, bank executives informed.

“Given the common ownership, common technology platform and a common chairman, that should not be tough… At the front-end, there was no change for the customer -- the logo is the same, though there were some changes in the stationery and the boards at the branches,” Rao added.

So, what after State Bank of Indore? No one at SBI is ready to reveal anything. But what makes SBI’s measure unique is the fact that none of the other public sector banks have taken any action beyond giving their support for consolidation. Maybe they might illustrate upon SBI’s experience to pull off mergers, whenever they finalize one.

Merger of State Bank of Indore to take place with parent bank SBI

2009-07-01T23:46:00.000-07:00

In a recent meeting with bank chiefs the Finance Minister, Pranab Mukherjee had approved the consolidation process among the State-owned commercial banks, following this State Bank of India (SBI) has begin the process of merger.

Working on the same line on Friday the board of State Bank of Indore passed a declaration to open the way for the merger process with the SBI. At present the SBI is holding 98.05 per cent stake in State Bank of Indore, a smallest associate bank.

Following this the SBI board met in Mumbai has passed a declaration for the merger of State Bank of Indore with the parent bank. This is the second associate bank to be merged with the parent after the State Bank of Saurashtra in July 2008. In case the merger process of State Bank of Indore gets through then only five associate banks will independently exist within the Group they are State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Travancore, and State Bank of Patiala.

The latest consolidation process is being taken up in spite of the Government-Reserve Bank of India appointed Committee on Financial Sector Assessment (CFSA) which recommended that banks should not be reckless in merger process in the current economic conditions. According to the RBI Deputy Governor, Dr K. C. Chakrabarty the current economic environment is not matured for consolidation among the public sector banks and there main focus should be on financial inclusion.

In 1960 State Bank of Indore became a subsidiary of the SBI. The bank is having around 500 branches, with as many as 357 in Madhya Pradesh. By the end of the fiscal year March 31, 2009, it has made a recorded profit of Rs 278.92 crore. As on March 31 banks total business accounted to about Rs 50,500 crore. It is having a network of 400 automated teller machines (ATMs).

On Friday in Indore a board meeting of State Bank of Indore was held in which the workman-director, Mr Atul Pradhan, gave a nonconforming note on the declaration that was taken up in the meeting as a table agenda.

Sources closely related to the developments said the board approved the declaration by a majority vote with five members in favor of the proposal and only one (the workman director) nonconforming.

Mr Alok Khare, President of the All India Bank Officers’ Association, told Business Line in the meeting there was no officers’ representation as the board seat for officers is currently vacant.

Banking industry observers said that it would be remarkable to see if the proposed merger of State Bank of Indore with SBI will come under the scrutiny of the Competition Commission of India (CCI). Although the CCI is functional, the provisions related to regulation of combinations under the Competition Act are yet to be reported.

Bank reaches at the doorstep of the villagers

2009-05-13T04:21:00.000-07:00

People living in villages, such as Shivaji Gulab Dhegre, 22 an owner of a small paan shop in Ghotawade village in Mulshi Taluka, 30 km from Pune, never had a bank account and also have never thought of opening one as they earn just enough income to make both ends meet.

As new technologies are being adapted by the Indian banking industry to take banking to the far away villages, working on the same line Financial Information Network and Operations (FINO), a Mumbai-based Biometric-enabled smart card solutions provider, along with the State Bank of India (SBI), is making a unique offer to Dhegre and the 2,000-odd people of the village, mostly farmers and workers of nearby factories: a bank account (without a passbook), where they can deposit an amount as low as Rs 10.

The most interesting part of this offer is the villages don’t have to go to the bank to deposit or withdraw money. The bank will reach their doorstep.

Ashish Rath, a management trainee with FINO, who is looking after the company’s ground operations in Ghotawade, explained, “The accountholder is provided a biometric smart card, which has personal information and fingerprint details. When the accountholder needs to withdraw or deposit money, all he/she needs is to do is swipe the card on a special machine called the Point of Transfer (POT) machine, and enters the PIN number. All agents of FINO, who go door-to-door, carry the machine.”

A person can deposit a maximum amount of Rs 50,000. In case a customer deposits money more than the limit then, his account is upgraded to the main SBI branch. Kanhaiya Lal, a factory worker, who is ready to open an account, said, “Even if you have a regular bank account, it makes sense to open this account, because the nearest SBI branch is at Pirangut, 8 km away, and the nearest ATM is at Hinjewadi, 25 km away.”

The process of opening an account has been kept simple. One has to just provide the name, address and the amount of land one owns, if any. There is minimal paperwork or extra documents are asked for. Two months back the process was introduced in Pune district, the company is having 4,500 customers in four talukas, Rajgurunagar, Mulshi, Daund, and Ambegaon, informed Sachin Bhahiti, FINO’s district co-ordinator.

The first batch of 60 customers was given their smart cards at Rajgurunagar last Wednesday. Bhahiti is expecting to enroll 2 lakh customers across the district in the next eight months. Rishi Gupta, Chief Financial Officer, FINO informed, “We have a customer base of 5.5 million across the country. We expect Pune region to add to that substantially.”

PSBs headed by SBI to open at least 15,300 ATMs

2009-05-05T04:46:00.000-07:00

Recently the Reserve Bank of India has liberated the norms on setting up of ATMs therefore public sector banks (PSB) have drafted enormous development plans to set up at least 15,300 ATMs across the country by the end of this fiscal year.

Under this expansion plan five leading state-owned banks, headed by State Bank, will be setting up 15,300 ATMs to help retail customers, for whom the service has become free from April 1 this year after the implementation of the RBI directives.

State Bank Group, is having the largest number of ATMs in the country, will be opening 13,400 more ATMs in the current fiscal after which the total number will increase to 25,000 by end-fiscal, an SBI official informed.

The official said, "Customer retention, particularly in the retail segment, necessitates setting up of large number of ATMs.

Presently, State Bank Group has 11,600 ATMs pan-India. We plan to more than double this number this fiscal”.

Recently, in the norms related to ATMs, Reserve Bank had permitted banks to open offsite ATMs without its prior approval. The apex bank has also allowed free usage of third party ATMs for customers from April 1.

However, banks have been allowed to charge Rs 18 per transaction from each other for every third party ATM transaction.

SBI for term loans and working capital for SMEs freeze rates at 8%

2009-04-22T02:33:00.000-07:00

State Bank of India, the country’s largest lender, has freezed interest rates at 8% on certain term loans and working capital for small and medium enterprises (SMEs).

Bank will be freezing interest rates on working capital assistance up to September 2009, while bank informed that loans up to Rs 5 lakh, which are covered under the Credit Guarantee Trust for Micro and Small Enterprises, will be frozen for two years.

Moreover, for new SMEs with fund-based loan requirements of between Rs 5 lakh and Rs 25 lakh, the bank is offering a fixed rate of 10 per cent a year for the next two years.

B S Bhasin, the bank’s chief general manager in-charge of SMEs, told that the lending rates for new term loans of up to Rs 5 lakh are in the range of 8.5 per cent to 10 per cent. While the term loans between Rs 5 lakh and 25 lakh, rates vary between 9 per cent and 11 per cent. The bank, is having around 1.2 million SME clients, and has already announced two products for the small industry segment – SME Care and SME Help.

In SME Care, bank offers an additional working capital facility of 20 per cent of the fund-based limits in order to take care of inventories even of delayed payments from their buyers due to the current downturn. While SME Help is a term loan product being offered for the purchase of fixed assets, including generator sets.

However SBI has not involved in the latest round of reduction in benchmark prime lending rates, but it has decided to offer specialized packages for home, auto and SME loans where it has freezed interest rates for a specified period of time at 8 per cent and would go back to to the prevailing level once the special offer is over.

Besides this, Bhasin explained that SBI has been insistently restructuring loans of SMEs that are facing temporary cash flow problems. Till now, the bank has instigated restructuring in about 41,000 cases out of the 800,000 accounts. The sectors which had come under high stress due to slowdown in demand and financial crisis are textiles and auto components. At the end of March 2009, the bank’s outstanding SME loan portfolio stood at Rs 1,00,000 crore. SBI for the current financial year, has a target of 24 per cent growth from the segment with main focus on segments such as chemicals and pharmaceuticals.

A bank executive informed, “The garments and auto sectors are showing signs of revival. But developments have to be watched carefully”.

SBI, IDBI, Yes banks slash deposit rates by 25 to 75 basis points

2009-03-06T02:01:00.000-08:00

State Bank of India (SBI), country’s largest lender slashed its deposit rates by 25 to 75 basis points on various slabs. IDBI Bank and Yes Bank following the suit also slashed the deposit rates by 25 to 75 basis points across various maturities. It is expected more banks will be revising their deposit rates in line to these banks.

SBI has reduced its deposit rates by 40 to 50 basis points on various slabs. Bank has cut interest rates by 40 basis points to 8.10 per cent on deposits for a period of one year to two years. While on deposits for any length of time between two years and 1,000 days bank is offering an interest rate of 8.5 per cent against 9 per cent earlier.

Likewise on the deposits above 1,000 days and less than three years bank has cut by 50 basis points to 8.25 per cent. According to bank sources the new rates will be effective from March 9.

IDBI Bank has also announced cut in its deposit rates for one-to-three years, 1,100 days and more than three years up to 10 years by 25-50 basis points. The new rates will be applicable from March 6.

C S Jain, head of retail at IDBI Bank explained, “We have brought down deposit rates to reduce the cost of resources. Even after this revision, our rate structure would remain attractive compared to other banks”.

Private sector lender Yes Bank has reduced deposit rates across maturities by 25-75 basis points. Interest rates on deposits with tenures of more than a year up to two years were lowered by 75 basis points to 9.25-9.50 per cent, depending on the amount deposited.

Likewise, the deposit rates of more than two years time period have been reduced by 25 basis points. Therefore, the new rates range between 8.75 per cent and 9.25 per cent, depending upon the deposit amount.

IDBI bank has also reduced the lending rates of its floating home loan rates by 50-100 basis points. Now the new floating interest rate will be 9.75 per cent for loans up to Rs 20 lakh and 10.25 per cent for loans above Rs 20 lakh. The new rates will come into effect from March 3.

However for loans up to Rs 30 lakh, IDBI Bank has cut down the margin money from 20 to 15 per cent. Also, for loans above Rs 30 lakh, the margin money has been reduced to 20 per cent from 25 per cent.

On Friday Reserve Bank of India (RBI) Governor Duvvuri Subbarao held a meeting with the bank chiefs to discuss the interest rate scenario. The central bank mainly pushed the private sector lenders to reduce loan rates as they have so far cut down interest rates by only 50 basis points. The public sector banks have reduced rates by up to 200 basis points.

After the meeting on Saturday some banks such as Punjab National Bank (PNB) and Union Bank of India reduced home and auto loan rates.

PNB announced cut in car loan rates by 50 basis points, Union Bank slashed rates on home loans by 25-100 basis points and car loans by 125-150 basis points. A Union Bank executive explained, “Our deposit rates are the lowest in the market at around 8 per cent, so there is little scope for further reduction”.

Earlier SBI has freeze home and auto loan rates at 8 per cent and 10 per cent respectively for a year.

C S Jain, head of retail, IDBI Bank notify, “We have cut deposit rates to reduce the cost of resources. Even after this revision, our rate structure would remain attractive compared to others”.

SBI introduce new system- transaction through fingerprints

2009-03-04T03:43:00.000-08:00

The State bank of India (SBI) country’s largest public sector bank has cropped up a new technique for transactions. Under the new technique the transactions would be card-less and will require only an account holder’s fingerprints.

The bank with a view to lower the cost of transactions has decided to give out with cards, especially for the distribution of social security pensions and wages under the National Rural Employment Guarantee Scheme (NREGS).

The new system will be implemented across the country and for this a point of sale (POS) machine, comprising bio-metric details of account holders will go to a particular village where the bank’s customers would be able to withdraw or deposit funds using the fingerprint-based method.

Previously, each account holder was issued a card with a magnetic strip that was swiped at the POS machine before any transaction. The smart card was priced according to its memory. For instance, 4GB cards cost Rs 75, whereas it costs Rs 140 for a 32GB card.

NREGS was set up in 2004 since then SBI had disbursed around 1.6 million smart cards across the country, before taking a decision of shifting to the new system a couple of months ago. S Mukhopadhyay, deputy general manager in the bank’s rural banking department said, “In the last two months, we have opened more than 400,000 accounts but we have not disbursed any smart cards thereby saving close to Rs 3 crore.”

One more reason behind bank’s switching to the new system is the fact that 2% of the no-frills account holders stepped out of their villages. As most of the account holders just access the bank to receive the pension or the NREGS payment, therefore a banking correspondent can easily go with a POS machine at periodic intervals to help them complete their transactions.

“These villagers do not require inter-operability, which a smart card offers, since most of them use their accounts only once a month to avail of the NREG scheme, practically the accounts remained dormant for the rest of the month. Therefore, it was not cost-effective for the banks to carry on with cards,” an SBI executive said.

However other banks, have not yet decided to shift to card-less transactions. An executive of a public sector bank told, “Different banks use different technologies and we are sticking to a card-based system, at least for the time being.” Another banker while expressing his views said the cost-saving is not important.

SBI, PSBs likely to further cut rates

2009-02-17T03:35:00.000-08:00

After a meeting with Finance Minister Pranab Mukherjee SBI chairman O P Bhatt briefed reporters about the possibility of public sector banks led by State Bank of India (SBI) will look at further interest rate cuts. He told that the bank is thinking of cutting its prime lending rate (PLR) for the second time in as many months.

Earlier on January 1 SBI had cut PLR 75 basis points to 12.25 per cent and has also cut all new home loan rates to 8 per cent for a limited period with a clause to reset rates after one year.

Finance Secretary Arun Ramanathan notified after public sector bank chiefs met Mukherjee, “Since deposit rates have come down, there is a general expectation that interest rates will come down”.

Kolkata-based UCO Bank Chairman S K Goel told the bank might cut lending and deposit rates 200 basis points, with a 100-basis-point reduction possible this month. The bank soon will be launching a scheme similar to SBI’s.

United Bank of India informed that it will cut its PLR 50 basis points soon.

While Punjab National Bank and Bank of India informed they will be cutting interest rates after inflation dips further and Bank of Baroda and Bank of Maharashtra said they will review the rates after a fortnight. Canara Bank also seems to cut down lending rates for all sectors.

Mukherjee pointed out the government will focus on boosting domestic demand. “In view of contracting global demand, we have to focus on domestic demand by primarily stimulating demand in the rural areas and highly labor-intensive sectors,” he said.

The banks have been advised to increase credit to productive sectors like infrastructure, small and medium industries and textiles, among others.

On the other hand since September last year with an aim to boost the economy, the Reserve Bank of India (RBI) has taken a series of measures including cuts in the cash reserve ratio and the repo and reverse repo rates to inject liquidity into the system and signal a soft interest rate regime.

But last week RBI said banks can reduce rates further. However since November, public sector lenders have reduced lending rates up to 200 basis points, while private banks have lowered rates 50 basis points. In comparison to this, deposit rates have been reduced up to 300 basis points.

Bankers are not willing to cut lending rates further as they claim that the cost of deposits has not come down significantly. They told further cut in deposit costs will result in investors shifting to small savings schemes such as post office deposits and public provident fund, which offer 8 per cent returns.

SBI to review on rate cuts in ALCO meet

2009-02-10T03:03:00.000-08:00

State Bank of India (SBI) Chairman O P Bhatt while indicating at interest cut in the near future notified that although several banks have cut down their rates in the recent past but these have not been done in a uniform way and across the industry.

He informed the reporters, "In the past 2-3-months, there have been some rate cuts by banks but these have not been across the industry and not uniform."

He pointed out there are possibilities that banks might cut rates around March, and added that there is enough liquidity in the system.

When asked about more cut in PLR and other interest rates by SBI, Bhatt pointed out that its "asset-liability committee (ALCO) meets every week" and would look into the matter.

Bhatt further stated, "We will factor in the policy inputs" along with other factors (while taking a decision on its rates).

He stated SBI is amongst the first banks to reduce its prime lending rate (PLR) as also its deposit rates.

He informed, "SBI reduced its deposit rates by 1.50 per cent".

SBI awarded 2 IBA Award

2009-01-29T03:19:00.000-08:00

State Bank of India has bagged two prestigious awards from Indian Banks Association namely "RURAL BANKING INITIATIVE "AND "BEST IT ARCHITECTURE". The award was given on 20th January 2009 in the IBA & TFCI's 5th Annual Banking Technology Awards function, 2009 held at Mumbai.

SBI is having a network of 4261 rural branches in Rural Banking Initiative, which is a astounding 38% of its network. All these branches including diverse geographical terrains- some in the hilly and mountain raven regions like Leh at an altitude of 13000 feet above the sea level are on Wide Area Networking Platform. One of the Bank's aims is to offer service even in the remotest part of the country. In alliance with this acknowledged objective, the Bank is setting up another 1000 new branches in rural and semi-urban areas before March 2009.

In IT Architecture, State Bank of India (SBI) which is largest premier financial institution in India having a network of 11,500 branches and an additional 4600 branches of its associate banks spread across India has upgraded its IT Architecture by getting on an ambitious Core Banking System (CBS) implementation with an aim of connecting all the branches that will serve to 150 million plus accounts with a daily transaction volume of 25 million plus transaction per day. The environmental friendly feature of SBI's CBS architecture has allowed flawless edge with other IT initiatives like ATM, Internet Banking (both retail and corporate), Payment Systems (NEFT, RTGS, SWIFT, ECS, and EDI), Government Business, Financial inclusion, Treasury and Foreign Exchange.

SBI associates merger plans put on hold

2009-01-21T03:19:00.000-08:00

State Bank of India (SBI) is taking steps more cautiously while progressing with the planned merger of its six associate banks with itself. SBI chairman OP Bhatt said at present there are no further merger plan on the cards. Recently SBI completed the merger of State Bank of Saurashtra (SBS) with it and post-merger integration is still on.

On being asked about the merger of other associate banks with SBI Mr Bhatt said “Nothing is on the cards.” This is clearly a huge move what the SBI top management used to project on the issue of merger till now.

Earlier SBI management was planning to take steps for merger of State Bank of Patiala and State Bank of Hyderabad with the parent bank. In the meantime, the Union government has started preparing the platform for merger of State Bank of Indore and State Bank of Patiala with SBI. These plans have been delayed.

As per bank insiders information, at present the focus is on tiding over the ongoing financial crisis and economic recession. Therefore, issues like mergers would be taken up later when things get in a better position.

SBI’s merger of all its associate banks with itself is a long-term plan, is to strengthen its presence. After the SBI-SBS merger, SBI has six associate banks in line — State Bank of Patiala, State Bank of Hyderabad, State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Indore and State Bank of Travancore.

According to the SBI chairman the employees of the banking group have now developed a positive attitude towards mergers. This is in spite of the fact that SBI’s employees’ associations have been protesting against the merger. However its associations had supported the SBI-SBS union.

Currently, the bank is busy incorporating its bank operations after the SBI-SBS merger. Mr Bhatt informed the post-merger rationalization will be in the areas like technology, asset management, branch banking and seniority. The chairman is of view that this experience can help the country’s largest banking group in preparing for the proposed mergers when these transpire.

In the meantime, SBI has merged its Mauritius-based subsidiary, Indian Ocean International Bank (IOIB), with SBI International (

Mauritius

) to strengthen its operations in the African island nation. The new unit has started its operations as SBI (

Mauritius

SBI registered 10% hike in auto loan demand

2009-01-20T03:31:00.000-08:00

In Chennai the State Bank of India (SBI) and other nationalized banks have made possible the December sales major auto players after most of the private sector banks have stopped auto loans which led to decline in auto sales.

Official sources informed Express, “SBI registered a 10 per cent hike in loan demand in the metro in December, compared to the rest of the year. Normally, on an average, we receive 25 applications for loan demands per day”.

This was followed by the Cenvat cut of four per cent by the Centre and resultant decline in discounts by car majors fueling demand.

Private Banks had cut down their auto loan segments by almost 35 to 40 per cent have also contributed to the PSU bank’s lending.

Sources said, “SBI sanctioned and disbursed 372 vehicle loans totaling Rs 12.32 crore to customers of Maruti Suzuki, Hyundai Motor India, Toyota, Tata Motors and others in Chennai during this month”.

Thus the most beneficiaries of the lion’s share were Maruti customers at 30 per cent of the total disbursements and Hyundai at 25 per cent. Other vehicle manufacturers brought up the rear.

Besides this the bank did not rejected any loan demand during this month as compared to its customary five per cent rejections each month. Though, it is believed that 10 per cent applications have been returned due to lack of proper documentation.

In the meantime, the banking organization is expectant of another downslide in interest rates by 0.5 per cent in January that would further boost their loan segments.

On the other hand SBI also saw a dip in auto loan demands by 30 per cent in FY’ 09, vis-à-vis FY’08. This is due to high interest rates for auto loans prevailed till uneven a couple of months ago. As 75 per cent of the industry’s sales is dependent on bank financing for vehicles, sales were hit during the year.

SBI website was shutdown due to attempt by hackers

2009-01-16T03:32:00.000-08:00

On Saturday State Bank of India’s (SBI) website was shutdown due to attempted attack by hackers. A senior official confirmed “There has been an attempt to disrupt the system.” But he refused to reveal any further details. Bank’s internet banking site www.onlinesbi.com was operational, but its sites www.statebankofindia.com and www.sbi.co.in were down on Saturday.

Lately in the evening, officials stated that the bank was aiming to get its website operational by 9.00pm. Afterward the bank put up a message stating that site was under maintenance and directed online applicants to clerical positions to the Institute of Banking Personnel Selection site.

State Bank of India is the country’s largest bank and is having over three million online customers. There has been increase in the number of people with access to internet banking has increased dramatically after SBI has installed its core banking solutions in over 11,100 branches across the country. In the past also, government website was attacked by hackers who left behind anti-India slogans.

In the previous year Bank of India’s website was hacked by the hackers who planted malaware on the site that installs itself on the user’s computer and transmits sensitive information to the hacker. Moreover there have been phishing attempts on customers of various banks where the hacker puts up a website identical to that of a bank to steal passwords.

On Saturday, the bank has launched a railway ticket booking facility at internet kiosks at ATM centers located in railway stations. With this all online banking customers will be able to get printed electronic reservation slips instantly through the kiosks. The kiosk can also be used for other internet banking transactions as well.

SBI likely to hire 500 ATMs to reduce capital expenditure and improve capital service

2009-01-05T03:41:00.000-08:00

The State Bank of India (SBI) is likely to hire 500 ATMs from external agencies to reduce capital expenditure and improve capital service; this was reported by government sources.

Minister of State for Finance P.K. Bansal stated in a written reply in Lok Sabha, “It would be done on a pilot basis to reduce capital expenditure in setting up ATMs and to improve availability of ATMs to customers”.

“Besides, it will improve the quality of customer service,” he said adding: “The process of site identification for installation of ATMs has begun.”

According to the information available on the website of the bank, SBI is having over 8,500 ATMs in India, the largest network in the country.

Replying to another question, Bansal said that there is no recession in the economy.

Although in the situation of the global financial crisis, the government with a view to safeguard the growth process has announced fiscal incentive measures on 7 December.

He pointed out that there is no fiscal crisis or destabilization of markets in India.

About problems faced by investors while putting money in the initial public offer, Bansal stated that some of the problems and risk identified are related to disclosures in offer documents, non-receipt of shares after allotment, delayed receipt of refunds, non-receipts of refunds etc.

RBI lodged complaint against SBI alleged fake notes

2008-12-12T02:02:00.000-08:00

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

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

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

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

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

SBI to expand branch network in A&N Islands

2008-12-12T00:48:00.000-08:00

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

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

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

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

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

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

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

2008-12-02T01:22:00.000-08:00

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

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

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

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

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

SBI Card to announce ‘financial difficulty package’ for defaulters

2008-11-10T03:09:00.000-08:00

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

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

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

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

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

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

State bank to reduce deposit rates before cutting lending rate

2008-11-03T02:14:00.000-08:00

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

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

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

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

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

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

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

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

State bank to reduce deposit rates before cutting lending rate

2008-10-22T03:27:00.000-07:00

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

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

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

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

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

Bank holidays to leave common man in lurch

2008-09-30T04:19:00.000-07:00

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

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

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

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

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

2008-09-22T00:53:00.000-07:00

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

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

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

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