Source:Apr 22, 2010 RBI
RBI has issued RBI Circular No. – DPSS.CO.CHD.No. 1832/01.07.05/2009-10 dated 22nd February 2010 by virtue of which Banks are supposed to prohibit alterations / corrections on the cheque leaf. Circular summary is as follows:-
Prohibiting alterations / corrections on cheques : No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.
Based on the above guidelines Banks clearing teams can return cheques which have any alteration in the
· Payee Name
· Amount in numbers
· Amount in words
The only alteration which is allowed is the alteration in the date.
Thursday, April 22, 2010
RBI issues draft norms on securitisation transactions
Source:BusinessLine Bureau:20 April,2010
Mumbai,
The Reserve Bank of India on Monday issued draft guidelines regarding the minimum holding period and minimum retention requirement for securitisation transactions. The aim behind the guidelines is to develop an orderly and healthy securitisation market, to ensure greater alignment of the interests of the originators and the investors, as also to encourage the development of the securitisation activity, said the RBI in its circular.
The circular says that originators should retain a portion of each securitisation originated, as a mechanism to better align incentives and ensure more effective screening of loans. In addition, the RBI has also recommended a minimum period of retention of loans prior to securitisation so as to give comfort to investors regarding the due diligence exercised by the originator. These were recommended by the RBI in its October 2009 Quarterly Review.
Minimum Holding Period
For loans of up to 24 months duration, in case of loans with periodic repayment schedules, the MHP would be nine months from a certain set of relevant dates, while in case of bullet repayment loans, the MHP is 12 months from the relevant dates.
These relevant dates are the date of full disbursement of loans for an activity or purpose; or date of acquisition of asset by borrower (i.e. car, residential house,); or date of completion of project; or date of first instalment of interest or principal or EMI; whichever is later.
For loans of more than 24 months, in case of loans with periodic repayment schedules, the MHP would be 12 months from the relevant dates.
In case of loans of more than 24 months with bullet repayment, securitisation would not be allowed, said the RBI guidelines.
The RBI guidelines also list certain assets where banks are not permitted to undertake securitisation activities or assume securitisation exposures.
These include re-securitised assets (e.g. collateralised debt obligations of asset backed securities, including, a CDO backed by residential mortgage-backed securities); synthetic securitisations (e.g. credit-linked notes or credit default swaps) and securitisation with revolving structures (e.g. (e.g. credit card receivables and cash credit facilities).
Barclays India head for corporate unit:Karan Bhagat
Source:ET:22 Apr 2010, 1136 hrs IST,REUTERS
MUMBAI: Barclays Plc has named Karan Bhagat as India head for the bank's corporate business that mainly focuses on the banking needs of companies, the British bank said in a statement. Bhagat joined Barclays in 1990, and has worked in different roles within corporate and investment banking.
MUMBAI: Barclays Plc has named Karan Bhagat as India head for the bank's corporate business that mainly focuses on the banking needs of companies, the British bank said in a statement. Bhagat joined Barclays in 1990, and has worked in different roles within corporate and investment banking.
Indian Bank may enter insurance sector
Source:21 Apr 2010, 2048 hrs IST,Nageshwar Patnaik,ET Bureau
BHUBANESWAR: Indian Bank is exploring options to add insurance products to its portfolio. For this, the Bank may partner with foreign players, if need be, Indian Bank executive director V Ram Gopal, said in Bhubaneswar on Wednesday.
Speaking to reporters here, Mr Gopal said the Indian Bank was bullish about its growth and he hoped that the inclusion of insurance products would further boost the bank’s business prospects.
“We are quite bullish about our growth. For the 2010-11 fiscal, we are eyeing a 22% growth in our business. We have set a target of Rs 2, 10,000 crore turnover for the year and 16% increase in our net profit,” Mr Gopal said.
Claiming that the national credit-deposit (CD) ratio of the Bank was 71% in the last fiscal, the ED said the Indian Bank always focused on winning the trust of its clientele, especially in priority sectors, by increasing the volume of lending.
He informed that the total lending of the Bank by March 31 was Rs 61,000 crore as against a total deposit of Rs 88,000 crore.
“Our priority sector lending is much above the stipulated 40%. In micro, small and medium-sized enterprises (MSMEs) sector together with retails, the total lending by March 31 was Rs 8,360 crore. In agriculture sector, our lending is much above the stipulated 18%,” he informed.
56 Indian firms in list of world's most powerful listed companies
Source:22 Apr 2010, 1124 hrs IST,IANS
WASHINGTON: China with 113 members and India with 56 members gained the most ground in breaking into the exclusive club of 'The Forbes Global 2000' - 'the biggest, most powerful listed companies in the world'.
The latest list of global giants released by the reputed US business magazine Wednesday shows the corporate dominance of the developed nations is steadily receding. The rankings span 62 countries, with the US (515 members) and Japan (210 members) still dominating the list, but with a combined 33 fewer entries.
The top ten among 56 Indian Global High Performers are Reliance Industries (126) with sales of $29.40 billion, State Bank of India Group (130), Oil & Natural Gas (155), ICICI Bank (282), Indian Oil (313) NTPC (341), Tata Steel (345), Bharti Airtel (471), Steel Authority of India (502) and Larsen & Toubro (548).
UCO Bank (1910) with sales totalling $1.78 brings up the rear for India.
Forbes' ranking of the world's biggest companies using an equal weighting of sales, profits, assets and market value to rank companies according to size 'reveals the dynamism of global business,' it says.
In total the Global 2000 companies now account for $30 trillion in revenues, $1.4 trillion in profits, $124 trillion in assets and $31 trillion in market value. All metrics are down from last year, except for market value, which rose 61 percent.
An analysis of the Global 2000 shows that despite the turmoil in the financial sector, banks still dominate, with 308 companies in the 2000 lineup, thanks in large measure to their asset totals.
The oil and gas industry, with 115 companies, scores high in sales, profits and stock-market value, yet these sectors were not the leaders in growth over the past year. Insurance companies (up 27 percent) led all sectors in sales growth, while the leaders in profit growth were drugs and biotech firms (up 20 percent).
To qualify as a Global High Performer, a company must stand out from its industry peers in growth, return to investors and future prospects.
Most of the 130 Global High Performers have been expanding their earnings at 28 percent a year and 20 percent annualised gains to shareholders over the past five years, Forbes noted.
WASHINGTON: China with 113 members and India with 56 members gained the most ground in breaking into the exclusive club of 'The Forbes Global 2000' - 'the biggest, most powerful listed companies in the world'.
The latest list of global giants released by the reputed US business magazine Wednesday shows the corporate dominance of the developed nations is steadily receding. The rankings span 62 countries, with the US (515 members) and Japan (210 members) still dominating the list, but with a combined 33 fewer entries.
The top ten among 56 Indian Global High Performers are Reliance Industries (126) with sales of $29.40 billion, State Bank of India Group (130), Oil & Natural Gas (155), ICICI Bank (282), Indian Oil (313) NTPC (341), Tata Steel (345), Bharti Airtel (471), Steel Authority of India (502) and Larsen & Toubro (548).
UCO Bank (1910) with sales totalling $1.78 brings up the rear for India.
Forbes' ranking of the world's biggest companies using an equal weighting of sales, profits, assets and market value to rank companies according to size 'reveals the dynamism of global business,' it says.
In total the Global 2000 companies now account for $30 trillion in revenues, $1.4 trillion in profits, $124 trillion in assets and $31 trillion in market value. All metrics are down from last year, except for market value, which rose 61 percent.
An analysis of the Global 2000 shows that despite the turmoil in the financial sector, banks still dominate, with 308 companies in the 2000 lineup, thanks in large measure to their asset totals.
The oil and gas industry, with 115 companies, scores high in sales, profits and stock-market value, yet these sectors were not the leaders in growth over the past year. Insurance companies (up 27 percent) led all sectors in sales growth, while the leaders in profit growth were drugs and biotech firms (up 20 percent).
To qualify as a Global High Performer, a company must stand out from its industry peers in growth, return to investors and future prospects.
Most of the 130 Global High Performers have been expanding their earnings at 28 percent a year and 20 percent annualised gains to shareholders over the past five years, Forbes noted.
PIL against insurance cos for ULIP `fraud'
Source:TNN, Apr 22, 2010, 05.27am IST
LUCKNOW: In a public interest litigation (PIL) filed with the high court, a lawyer has charged insurance companies of fleecing people of their hard-earned money through unit linked insurance policies (ULIPs).
The PIL comes after the insurance regulatory and development authority (IRDA) allegedly failed to protect the interests of the insured persons despite an order by the Securities and Exchange Board of India (SEBI) issued with the aim to check malpractice by insurance companies. Besides prominent insurance companies, the PIL makes the IRDA also a respondent, charging the regulatory authority of being "most unsympathetic" towards complaints of policy holders with a grievance. In fact, "when it comes to protecting the interests of insurance companies," IRDA "is most proactive", the PIL alleges.
The PIL gives as an example the IRDA order to defy the ban of SEBI and continue selling ULIPs. The PIL claims that the sale of ULIP is in violation of sub-section (11) of section (2) of the insurance Act, 1938 because ULIP contracts are based on share market fluctuations which are not a contract upon human life.
Charging IRDA of being "hand-in-glove" with the insurance companies, the PIL brings to the court's notice certain cases in which insurance companies had duped the insured persons, one a doctor, another a scientist and even a lawyer.
The PIL primarily requests the court to issue an order commanding insurance companies not to sell any ULIPs and IRDA not to approve any new ULIP. The PIL also requests that the Union government institute a committee to thoroughly investigate the fraud committed by private life insurers along with the role of IRDA on complaints against insurance companies.
LUCKNOW: In a public interest litigation (PIL) filed with the high court, a lawyer has charged insurance companies of fleecing people of their hard-earned money through unit linked insurance policies (ULIPs).
The PIL comes after the insurance regulatory and development authority (IRDA) allegedly failed to protect the interests of the insured persons despite an order by the Securities and Exchange Board of India (SEBI) issued with the aim to check malpractice by insurance companies. Besides prominent insurance companies, the PIL makes the IRDA also a respondent, charging the regulatory authority of being "most unsympathetic" towards complaints of policy holders with a grievance. In fact, "when it comes to protecting the interests of insurance companies," IRDA "is most proactive", the PIL alleges.
The PIL gives as an example the IRDA order to defy the ban of SEBI and continue selling ULIPs. The PIL claims that the sale of ULIP is in violation of sub-section (11) of section (2) of the insurance Act, 1938 because ULIP contracts are based on share market fluctuations which are not a contract upon human life.
Charging IRDA of being "hand-in-glove" with the insurance companies, the PIL brings to the court's notice certain cases in which insurance companies had duped the insured persons, one a doctor, another a scientist and even a lawyer.
The PIL primarily requests the court to issue an order commanding insurance companies not to sell any ULIPs and IRDA not to approve any new ULIP. The PIL also requests that the Union government institute a committee to thoroughly investigate the fraud committed by private life insurers along with the role of IRDA on complaints against insurance companies.
NPAs of public sector banks rise in March-Dec '09
Source:Business Line 22 April 2010
Our Bureau
New Delhi, April 21
Net non-performing assets (NPAs) of public sector banks grew 23 per cent between March and December last year, as global economic downturn and drought conditions in the country affected asset quality.
Except a few banks, all the public sector banks (PSBs) had shown rising NPAs consecutively in the last three years, said a report of the Parliamentary Standing Committee on Finance tabled recently in the Lok Sabha.
PSBs have reported an increase in net NPA to Rs 25,610 crore as at end December 2009 from Rs 20,801 crore in end March 2009. Net NPAs of PSBs stood at Rs 18,009 crore as at end March 2008.
Climbs down
Private sector banks' net NPA declined to Rs 6,972 crore at end December 2009 from Rs 7,305 crore in end March 2009. Net NPAs of private sector banks stood at Rs 5,632 crore in end March 2008.
The Finance Ministry has attributed the rise in NPAs of the banks during 2008-09 to slippage of accounts in various sectors, mainly due to the global economic recession and the vagaries of monsoon affecting agricultural loans.
In his deposition to the committee, the Secretary, Department of Financial Services, said that “Rs 25,000 crore (Net NPA) is because of the fact that there are stressed assets and economic downturn was there”.
The Finance Ministry official noted that the Gross NPAs and the Net NPAs have been coming down. “We are including NPAs as one of the aspects that is looked into very seriously. Each bank board has to look into these assets, which are going bad, and see that what better monitoring can be done to see that these accounts are nursed and brought back to proper health,” the official said.
krsrivats@thehindu.co.in
| Finance Ministry blames it on economic recession, monsoon woes. |
New Delhi, April 21
Net non-performing assets (NPAs) of public sector banks grew 23 per cent between March and December last year, as global economic downturn and drought conditions in the country affected asset quality.
Except a few banks, all the public sector banks (PSBs) had shown rising NPAs consecutively in the last three years, said a report of the Parliamentary Standing Committee on Finance tabled recently in the Lok Sabha.
PSBs have reported an increase in net NPA to Rs 25,610 crore as at end December 2009 from Rs 20,801 crore in end March 2009. Net NPAs of PSBs stood at Rs 18,009 crore as at end March 2008.
Climbs down
Private sector banks' net NPA declined to Rs 6,972 crore at end December 2009 from Rs 7,305 crore in end March 2009. Net NPAs of private sector banks stood at Rs 5,632 crore in end March 2008.
The Finance Ministry has attributed the rise in NPAs of the banks during 2008-09 to slippage of accounts in various sectors, mainly due to the global economic recession and the vagaries of monsoon affecting agricultural loans.
In his deposition to the committee, the Secretary, Department of Financial Services, said that “Rs 25,000 crore (Net NPA) is because of the fact that there are stressed assets and economic downturn was there”.
The Finance Ministry official noted that the Gross NPAs and the Net NPAs have been coming down. “We are including NPAs as one of the aspects that is looked into very seriously. Each bank board has to look into these assets, which are going bad, and see that what better monitoring can be done to see that these accounts are nursed and brought back to proper health,” the official said.
krsrivats@thehindu.co.in
Dhanlaxmi Bank join hands with UTI Mutual Fund
Source:Business line,22 April 2010
MUMBAI: Private sector Dhanlaxmi Bank has entered into an alliance with UTI Mutual Fund (UTI MF) to offer a bouquet of UTI MF’s schemes to its customers.
“This alliance with UTI MF will help us provide quality funds to our customers and thereby provide more choices and opportunities for financial planning,” the Dhanlaxmi Bank Head-Broking and Distribution, Mr D.A. Dhananjaya, said in a statement.
The UTI Asset Management Company (AMC) Chief Marketing Officer, Mr Jaideep Bhattacharya, said: “The tie-up will enable UTI MF to offer its comprehensive range of mutual fund products to a wider segment of the society.”
Dhanlaxmi Bank already has distribution agreements with ICICI Prudential Mutual Fund and Kotak Mahindra MF, the statement said. — PTI
MUMBAI: Private sector Dhanlaxmi Bank has entered into an alliance with UTI Mutual Fund (UTI MF) to offer a bouquet of UTI MF’s schemes to its customers.
“This alliance with UTI MF will help us provide quality funds to our customers and thereby provide more choices and opportunities for financial planning,” the Dhanlaxmi Bank Head-Broking and Distribution, Mr D.A. Dhananjaya, said in a statement.
The UTI Asset Management Company (AMC) Chief Marketing Officer, Mr Jaideep Bhattacharya, said: “The tie-up will enable UTI MF to offer its comprehensive range of mutual fund products to a wider segment of the society.”
Dhanlaxmi Bank already has distribution agreements with ICICI Prudential Mutual Fund and Kotak Mahindra MF, the statement said. — PTI
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