SBI goes green, installs windmill for captive use

In pact with Suzlon Energy.

Source:BusinessLine: Coimbatore, April 23

It was with a sense of pride and a touch of symbolic triumph that the State Bank of India Chairman, Mr O.P. Bhatt, spoke at the inauguration of a windmill at Panapatti village, Pollachi Taluk, Tamil Nadu.

Speaking at what he called the “signal event”, Mr Bhatt said the bank's resolve to go green was o

ne of the many initiatives mooted in the last two-three years, and definitely one that would further its green banking initiative.

The bank has partnered with Suzlon Energy by installing windmills for captive use.
It has installed 10 windmills with an aggregate capacity of 15 MW in Tamil Nadu, Maharashtra and Gujarat.
The power generated by these windmills would be wheeled to various HT consumption points of the bank spread across these States, he said.

“It is not an IPP project; we are not selling to utilities. It is for captive use.”

Stating that the initiative was symbolically huge and reiterating the need for others to emulate State Bank in the green environment and clean energy initiative, he said the bank would add 20 MW during the next year.

“We will in due course estimate our carbon footprint and implement that much (100-150 MW) clean energy for the bank.”
 
Initiatives

He said SBI had spelt out several initiatives within the bank to further the cause of green banking by sensitising employees through training, workshops and education programmes; by investing in efficient lighting systems, energy savers and waste water management; and mooting a project within the bank to determine its carbon footprint.
The go-green resolve would extend to the new SBI buildings that it plans – at Pune, Hyderabad and Jaipur, among others.
“We offer concessional rate of finance for projects that are green, or for implementing clean technologies in building concepts. Carbon Credit Plus is a product for financing carbon credit receivables for our customers,” Mr Bhatt said

Referring to exploitation of resources beyond replaceable limits, the banker said: “It is because of our arrogance over science and technology that we have forgotten our wisdom and balance that is important to protect nature. If we do not maintain it (the balance), it will be a catastrophe of our own making.”


To a query on investment, he said: "It works out to Rs 10 crore for a windmill of 1.5 MW. Initially, the cost could be a fair amount and it is part of capital expenditure; operational cost would be nil though. We hope to recover the investment in four years. The cost of energy is going to be nil thereafter." Asked if the bank had identified the site and State for installing the additional 20 MW next year, he said: "It would be through a tender. We have now partnered with Suzlon." 

On carbon footprint, he said: "We will earn around 27,000 tonnes a year - all of them put together (referring to the installed 15 MW)." The bank's estimated energy consumption is 100 MW a year. Mr Bhatt accompanied by SBI dignitaries Mr Sanjay Bhattacharya, Managing Director; and Mr R. Sridharan, Managing Director and Group Executive; and the Suzlon Energy Chairman and Managing Director, Mr Tulsi R. Tanti; landed near the wind farm site in a helicopter.

Bench divided on lie-detection test for Ramalinga Raju

Mr B. Ramalinga Raju

Source:Business line Bureau,Hyderabad, April 23

The Andhra Pradesh High Court on Friday delivered a split verdict on a petition by the Central Bureau of Investigation seeking permission to conduct lie-detection test on Mr B. Ramalinga Raju, founder and former chairman of Satyam Computer Services Ltd.

The two-member Bench took divergent views with Mr Justice Gopal Reddy declining permission for the test and Mr Justice Govinda Rajulu approving the CBI's request.

The plea will now be referred to a third judge.

Meanwhile, on directions from the Special Court trying the Satyam fraud case, the Nizam's Institute of Medical Sciences (NIMS) had submitted the case sheet of Mr Raju to the court.

Earlier, the CBI had contended that Mr Raju — who is undergoing treatment for Hepatitis C at NIMS — was intentionally delaying the court proceedings citing health reasons. The Additional Chief Metropolitan Magistrate, Mr B. V. L. N. Chakravarti, then directed the NIMS authorities to submit daily reports on Mr Raju's health.

ADB appoints Lakshmi Venkatachalam as VP

Source:Press Trust of India / Mumbai April 23, 2010, 17:31 IST

The Asian Development Bank (ADB) today said it has appointed Lakshmi Venkatachalam as Vice-President for a period of three years.

Venkatachalam, currently the Director-General of Shipping and ex-officio Additional Secretary in the Indian Government, will be responsible for ADB's private sector and co-financing operations, the multilateral funding agency said in a press release today.


ADB is planning to scale-up private sector operations and co-financing partnerships as a part of its long-term strategy.

Venkatachalam, an Indian Administrative Service officer from the Karnataka cadre, has also worked as Principal Secretary in the Karnataka Government. She was also the chairperson of the Coffee Board of India from 2000 to 2005.

Indian banks get Malaysian licence

Source:Reuters / Kuala Lumpur April 17, 2010, 0:04 IST

Malaysia has awarded a commercial banking licence to a locally incorporated bank to be owned by Bank of Baroda (BoB), Indian Overseas Bank (IOB) and Andhra Bank.

Bank Negara said the licence was given as a reinstatement of a commercial banking licence to an Indian bank that had formerly operated in Malaysia.


The earlier bank had been affected by a rule that was previously in force which prohibited any commercial bank under the effective control of a foreign government from holding a banking licence in Malaysia. BoB would hold a 40 per cent stake in the bank, IOB 35 per cent and Andhra Bank 25 per cent, Bank Negara said. The issue of the licence was not part of the new commercial banking licences to be issued under the country’s liberalisation measures announced last year, the central bank said.

The new licence will add to Malaysia’s already crowded banking sector, which has nine commercial banks serving a population of 28 million.

In November last year, Industrial and Commercial Bank of China was given a commercial banking licence as part of a bilateral agreement.

Bank Lending rates start inching up

Source:BS Reporters / Mumbai April 24, 2010, 0:28 IST

Rates go up on sub-BPLR loans.

JM GargBanks may have kept overall lending rates unchanged despite a rise in policy rates but have started increasing rates on corporate loans in the sub-benchmark prime lending rate (BPLR) segment.

“In the sub-BPLR segment, we are scaling up rates as and when these loans come up for renewal,” said Corporation Bank Chairman and Managing Director JM Garg. He said the bank was renewing these loans at 6-6.5 per cent a year. Most sub-BPLR loans were offered around 4-4.5 per cent.

“Over the past two to three weeks, interest rates have risen about 25 basis points. The (recent) changes in policy rates by RBI have not been factored in yet,” said a Bank of India executive.

A senior Axis Bank executive said rates for short-term loans had risen 50-75 basis points over the past few weeks. One reason is that banks were offering lower rates to expand their loan books before the close of the financial year.

A senior executive at Bank of Baroda said companies seeking short-term loans had sent tenders to banks to get the best possible rates. “We have set higher cut-off points in view of the likely hardening of rates following the steps initiated by RBI. The extent of increase is in the range of 25-50 basis points,” the executive added.

According to bankers, well-rated companies can avail of a six-month loan at 6.5-7.5 per cent while the rate for a-one year loan is 7.5-8.5 per cent.

On Tuesday, RBI announced a 25 basis points increase in the repo rate, the reverse repo rate and the cash reserve ratio. The two policy rates were increased by 25 basis points in March, resulting in a cumulative increase of 50 basis points over the last one month. Similarly, CRR, used to manage liquidity in the system, has gone up by 100 basis points since January.

Banks have responded by raising deposit rates.

A Bank of India executive said there were early signs of tightening, though liquidity remained sufficient. “In June, banks will have a clearer idea of credit growth as well as the monsoon, so we are likely to see some rate action then,” said a senior Bank of India executive.

According to RBI data, banks parked Rs 31,395 crore through the reverse repo window. Bankers said with credit demand likely to rise in the coming weeks, overall lending rates would rise in the second quarter.

Bankers said the increase in rates would be linked to the introduction of the base rate system from July. RBI plans to ban lending below base rates.

Garg, however, said there was a possibility of banks having multiple base rates for various maturities. So, there will be a separate base rate for a one-year loan and another for a six-month loan.

Govt to infuse Rs 15,000 cr in PSU banks in 2010-11

Source:BS Reporters / New Delhi April 24, 2010, 1:03 IST The Union Cabinet today approved Rs 15,000-crore capital infusion in public sector banks (PSBs) in the current financial year (2010-11). The initiative will increase the lending capacity of the PSBs by Rs 1.85 lakh crore. The move is also likely to help the banks maintain a minimum of eight per cent Tier-I capital to meet the credit requirement of the economy. The amount of Rs 15,000 crore is to be infused in Tier- I Capital instruments of the PSBs. The exact amount, mode of capitalisation and other terms and conditions would be decided in consultation with the banks at the time of infusion.  For 2011-12, additional capital requirements, if any, will be worked out in consultation with the PSBs, based on their results in the third quarter of 2010-11. Capital infusion will also help the banks, which are close to the requirement of a minimum 51 per cent government ownership and do not have the option to raise funds from the capital markets. Injecting more capital would increase government holding in such banks, thereby providing them more headroom to raise capital by diluting stake in the future. Oriental Bank of Commerce, Dena Bank, Andhra Bank, Bank of Baroda, IDBI Bank and Vijaya Bank have less than 55 per cent government equity.

Sebi warns brokers against forcing clients to give PoAs

Source:BS Reporter / Mumbai April 24, 2010, 0:33 IST

The Securities and Exchange Board of India (Sebi) has warned stock brokers against forcing clients to give a power of attorney (PoA) in their favour for operating client accounts.

Sebi said stock brokers could not use a PoA to transfer shares for off-market transactions or execute trades on behalf of the client without his consent.

The move follows instances of clients being forced to give irrevocable PoAs to brokers for managing their demat and bank accounts. 

The brokers have been told to take steps to revoke the authorisations that are not consistent with the guidelines by September 1. The brokers shall take steps to implement the circular by May 31 for new clients, said Sebi.

PoAs are executed in favour of brokers and depository participants to authorise the former to operate clients’ demat and bank accounts to facilitate delivery of shares and pay-in/pay-out of funds.

These are mostly taken from clients who want to avail of internet-based trading services. But, there have been instances of stock brokers seeking authorisations from clients to offer non-internet based services.
In some cases, the PoA even allows a broker to open and close accounts on behalf of the client and to trade on the client’s account without the consent of the client, says the Sebi circular.

Sebi said the PoA should be limited to transfer of securities in the beneficial owner’s account towards stock exchange-related margin requirements, pledging of shares in favour of the stock broker for the limited purpose of meeting the margin requirements of the client for trades executed through the same broker and to apply for products such as mutual funds, IPOs and rights issues, but only after instructions from the client.
The circular says a PoA shall not facilitate transfer of funds from the client’s bank account for trades executed through another broker or merging of balances (dues) under various accounts to nullify debit in any other account.

Lakshmi Vilas Bank upgrades its IT network by 100% implementation of MPLS architecture

Source:Mumbai, Maharashtra, April 23, 2010 /India PRwire/

Lakshmi Vilas Bank (LVB), the leading, fast-growing private sector
Bank has become one of the few banks in India to have
achieved 100% Multiprotocol Label Switching (MPLS) architecture.


 The migration was completed in a record time of 45 days with the active involvement of BSNL and technology partner, Wipro. With this LVB became the first Bank based out of Tamil Nadu to complete 100% MPLS migration.

Lakshmi Vilas Bank's Managing Director, Mr. K.S.R. Anjaneyelu said, "The full implementation of MPLS will substantially reduce the network operating cost as well as provide higher availability of the network for the branches. It will also lead to better performance of the application at branches due to lesser congestion of the network."

Mr. Murali Nair, Chief Technology Officer of Lakshmi Vilas Bank observed that, "With 100% MPLS architecture, the Bank will do away with about 21 Hub locations across the country and save on the maintenance and operational cost of these hubs. We will also be able to save cost by redeploying the network equipment at these centres to other centres."

LVB has been a pioneer in Technology adoption. Bank has rolled out core banking solution at all its branches within a short span of 15 months. Based on this robust platform and centralized data, the Bank has launched various customer centric products. Lakshmi Vilas Bank, in partnership with the National Association of Software and Services Ltd (Nasscom) and the Data Security Council of India is helping the office of the CB-CID in Chennai to set up a 'cyber lab' to train police officials on cyber crimes. LVB has been offering various technology products and delivery channels including NEFT, RTGS, SMS Alerts,
 SMS Pull Services, Net Banking, ATMs Mobile Payments and E-commerce.