How to go about mobile banking ?

Source : B S :Neha Pandey / Mumbai April 15, 2011, 0:30 IST Heard about mobile banking? “Yes,” pat comes the reply from Mumbai-based Supriya Pandit. She was issued a Mobile Money Identifier (MMID) by her bank, two months back. But the 30-year old graphic designer doesn’t know how to use it. MMID is a seven-digit number issued by your bank for transactions through mobile banking.  There will be different MMIDs for different savings accounts but all these can be linked to one mobile number. Axis Bank, Federal Bank and Kotak Mahindra Bank, recently launched Interbank Mobile Payment Service (IMPS) or mobile banking. “The idea is to enable quick transfer of funds through mobile phones,” a senior official at State Bank of India (SBI) said. While mobile banking is available free of cost for the consumer, a transaction cost (of 10 paise) for availing IMPS is levied by National Payments Corporation on the bank from which the money is transferred. You can transfer money across banks, provided the beneficiary bank is registered for mobile banking. As per the Reserve Bank of India norms, an individual can transfer up to Rs 50,000 per day but you can receive an unlimited amount.  Transfer of funds can be done by anyone who has an MMID but he needs to be a registered net banking user. Net banking users automatically get registered for mobile banking. Apart from fund transfer, mobile banking can also be used for purchase of goods and services, making bill payments, investments in mutual funds or creating fixed deposits. Here’s how to go about m-banking. (This is the process for Kotak Mahindra Bank, the process may differ slightly for other banks) Step 1: If you are registered for net-banking, download the mobile banking application form from the bank’s website. Or, send an SMS to the customer care service and get the link for the mobile application. Step 2: When you run the application, you will need your net banking username and password to log in. On logging in, you will get the activation number or the (IMEI) number, to activate your account. Step 3: The application gives the option of banking, investment and change password. Step 4: Under the banking head you can also pay bills, request for cheque books and report loss of debit cards. Under the investment head you can buy and redeem investments in mutual fund schemes.

SBI to make loans dearer, others to follow suit

Source : B S :Parnika Sokhi / Mumbai April 18, 2011, 0:17 IST

State Bank of India (SBI), the country’s largest lender, is set to increase its base rate — the benchmark rate for all loans — by 25 basis points. Top SBI officials said the rate hike may happen even before the Reserve Bank of India’s (RBI’s) annual policy review scheduled for May 3.

SBI’s base rate, which is at 8.25 per cent, is the lowest among major banks. Most other public sector banks have set their base rates at 9.5 per cent.

The base rate of ICICI Bank, which is the largest private sector lender, is at 8.75 per cent.

Bankers said other banks will increase their base rates if SBI goes ahead with the proposed hike.

“We (SBI) are looking at revising the base rate. We need to increase it as the cost of funds has gone up. The decision will be taken in the asset-liability committee meeting this month,” an official said, adding this is necessary to protect net interest margins (NIMs). A 25 basis points rate hike is a possibility, he added.

According to the official, the cost of funds has gone up as the bank offered high rates for deposits, both for retail and bulk deposits, in the last couple of months. Most of the banks had offered higher rates on deposits during the last quarter of the previous financial year to meet their yearly targets. Besides, offering home loans at a lower rate has exerted additional pressure on SBI’s margin.

Banks were also funding their deposit base via certificates of deposits (CDs) at high rates in the last quarter of 2010-11. According to the latest RBI data, banks issued over Rs 70,000 crore of CDs in the fortnight ended March 11, 2011. This was at a time when short-term rates were hovering around the 10 per cent level.

The increase in cost on the liabilities side will eat into margins, if not passed to the customers. According to a report by ICICI Securities, the full-quarter impact of higher lending rates and subsequent deposit rate hike by banks in the third quarter will be felt in the last quarter.

“We had expected NIMs (of SBI) to come off gradually, by 40 bps over the next four quarters. However, the pace of increase in system deposits implies that the NIM compression can be greater and could be front-loaded as well. Although SBI has raised retail deposit rates since June 2010 to a near-peak level of 9.25 per cent, the full impact of this has not yet filtered through into deposit costs,” a report by Morgan Stanley said. SBI’s NIM was at 3.40 per cent in the first nine months of 2010-11.

Banks have resisted a rate hike since RBI’s policy rate hike of 25 bps in mid-March. With inflation hovering around 9 per cent, much above the comfort zone of the central bank, more hikes in policy rates are expected.

Tighter liquidity conditions in the coming days may also push up interest rates. Goldman Sachs had said in a recent report that liquidity may remain tight due to government borrowing, high credit-deposit ratio and a weaker balance of payments.

Foreign firms involved in 61% M&A deals in India

Source :BS :P T I / New Delhi April 17, 2011, 12:33 IST

India has emerged as an attractive investment destination for global investors as 61% of merger and acquisition deals in the first quarter of this year were by foreign firms of Indian entities and going forward this trend is likely to heat up further.

According to mergermarket, the M&A intelligence service provider, in India out of 57 deals that took place this

quarter, 35 deals had foreign bidders.

As much as 61.4% of all the activities in India were inbound deals -- a significant portion compared to 27.1% for China, or 14.3%, for Japan.

"Inbound M&A drove deals in Q1 2011 with India proving itself an attractive investment destination as it lured buyers in the energy, insurance and IT space.
     

Despite the ongoing wave of corporate scandal and political corruption, India will continue to entice suitors on the back of strong fundamentals such as its growing population," mergermarket Asia Pacific Deputy Editor Anjali Naik said.

     
The interest of foreign companies and their subsidiaries on Indian entities is likely to see a further uptrend as Korea and Russia are likely to start entering India along with the US, Europe and Japan.
     
"Buyers from typical markets such as the US, Europe and Japan could be joined by those from Korea and Russia and deals across borders - consumer, financial services, energy, industrial, engineering and chemicals - will continue.
     
Overseas activity in energy, consumer and IT are also expected to grow," Naik added.
     
According to mergermarkets' India M&A Q1 2011 round-up, cross-border deals dominate the top deals table, with four inbound and one outbound deals qualifying as the five largest deals announced in Q1, 2011.
     
As many as 57 deals totalling $18.3 billion has been recorded in Q1, 2011, a 270.6% increase in value as compared to the same quarter last year, the second most active quarter in Indian M&A in terms of deal value, beaten only by Q2, 2010 when $26.4 billion worth of deals were announced.
     
Deal volume, however, has decreased by nine deal counts, it added.
     
Morgan Stanley has topped the financial advisor league table by value, having advised on $12.9 billion worth of deals, and Yes Bank came out on top in terms of value, participating in five deals this quarter.
     
The latter represented a giant step up for the India-based lender, having qualified for 36th place last year.
     
AZB & Partners continue to lead the legal adviser league tables both by value and deal count, having worked on eleven deals totalling $9.7 billion in Q1, 2011, it added.