Monday, April 28, 2008

PSBs want discrimination between domestic and foreign banks related to ATM sharing

From next year, RBI has asked the banks not to charge customers for use of third-party ATMs. With this it will be possible for the customer of small private banks, with a single ATM will have access to ATMs as the customer of the bank with the largest network.

From April 2008 the central bank has made available, free access to third-party ATMs for the purpose of balance enquiry and also the banks cannot inflict a transaction charge of more than Rs 20 per transaction on customers who withdraw from third-party ATMs.

On the implementation of this regulation by the RBI, the state owned banks with foreign branches have requested the regulator to discriminate between domestic and foreign banks, when it comes to allowing customer access to shared ATM networks.

Even the public sector banks have raised the issue of reciprocity, as they are allowed very limited access in overseas markets — both in terms of branches as well as ATMs. In India, the Reserve Bank of India grants licenses to set up branches and ATM installations and customers of foreign banks can access third-party ATMs, often free of charge.

For instance, although SBI has got the license to set up 25 outlets in Singapore, the country’s largest bank will not have access to the domestic network. However it can share foreign bank’s ATM network in Singapore. The matter was discussed during the informal meetings.

Bankers say the overseas regulators place a restriction on them with regard to access to their local markets, the Indian market is willy-nilly being opened up further. A decade ago, majority of banking transactions used to be carried out through the branch; today most of the foreign and private banks customers use the internet for the same. This is followed by automated teller machines. Even subscriptions to new services such as credit cards and demat accounts are also done outside the branches.

In India foreign banks are building up retail assets through non-banking finance companies, which do not have any restrictions on branch expansion. Bankers are of view considering that interest in India is quite high, so this is a good time to put conditions of reciprocity on foreign banks.

Recently, the central bank has given branch licenses to a couple of foreign banks who do not have a branch presence here. It is being considered that licensing would be more liberal from 2009, since RBI has promised foreign banks greater access to the Indian market.

Mobile banking significance in Indian banking scenario

Mobile banking has a growing significance in the Indian scenario. There are 260 million mobile users and most of the banks in India are already in this space or in the process of providing mobile banking facility to their customers. However it is being considered that mobile banking will proof to be of great help for a huge un-banked population.

Juniper Research conducted a survey and in its report released earlier this month stated mobile banking around the world is expected to grow tenfold to 816 million users by 2011. The report also stated that by same year, only China and Western Europe will have more mobile banking customers than India.

In spite of addition of around seven million mobile users every month, bank officials still feel that it would be too early to gauge the success of mobile banking in India. Officials from various banks expressed their views said, “Mobile banking is still in its nascent stage and we will have to wait and watch if it really changes the way we bank.”

There is also a difference in mobile banking services. Some banks are just offering SMS alerts to their customers, while some of the banks are offering services like payment of utility bills, viewing balance information and requesting mini statements, among others. Similarly, some charge their customers for their mobile banking services, while some others offer them as a free add-on service.

Furthermore, different banks have different modes for customers to avail of their mobile banking services.

The UK-based Barclays, which has recently launched its ‘Hello Money’ mobile banking operations this year, offers services like “fund transfers and bill payments without the customer having to download any application to bank through mobile phones,” according to Suresh Gurumani, director of retail banking at the bank. However, it is charging Rs 30 per month from its customers.

ICICI Bank introduced mobile banking four months back and the customers are required to download an application called ‘iMobile’ from its website. It offers services similar to the ones provided by Barclays.

It is not just private sector banks like Standard Chartered and ICICI that are providing mobile banking services to its customers, even public sector banks like Corporation Bank is also offering their customers a choice to pay their bills and shop using their mobile phones.

Banks that are not already in the mobile banking told that they have plans to begin operations soon, Bank of Baroda being one of them.

Banks are also expanding the services they offer in mobile banking since not many offer all the services under the gamut of mobile banking. For instance, Vijay Ramachandran, marketing director at Citibank India, informed that his bank has plans to go beyond the SMS alerts which it has been providing since 2000 and allow its customers access their account details and transact from their cell phones from May 31 this year.

Are banks looking for revenue in mobile banking? “At present, our focus will be to spread our services across as many locations and customer segments as possible. Revenues will flow in as people accept the service,” says Gurumani.

Although ICICI Bank is offering mobile banking service free of cost, its head of retail liabilities, Maninder Singh Juneja feels it is “an extremely important focus area for us to make banking convenient for our customers.”

Monday, April 21, 2008

Four arrested for cheating bank using fake documents

Hyderabad police on Saturday arrested a four-member gang on the charges of cheating banks with forged and fake documents. The four accused Chowdary Vijaya Kumar, 28, a resident of Madinaguda, Rajender Kumar, 27, of Bhagatsinghnagar in Kukatpally, Kallasheka Sampath Kumar, 48, of Dilsukhnagar and Dadda Srinivas, 27, of KPHB Colony formed a gang.

In a press meet Cyberabad police commissioner S Prabhakar Reddy told the four accused had created fake documents like salary certificates, ID cards of various companies to secure loans.

Prabhakar Reddy said the accused had created documents of Satyam Computers and Birla Soft Ltd and fake driving licenses in different names. With these fake documents the four applied for credit cards and were able to get 14 credit cards from banks like HSBC, ICICI, CitiBank, SBI, Centurion Bank. With these credit cards, they made purchases and cheated banks to the tune of Rs 11 lakh.

He said the gang had even bought a Ford Ikon car with these fabricated documents. Police had also arrested a businessman for purchasing stolen property.

The police commissioner said the gang members also purchased gold ornaments, garments and cell phones with money apart from spending huge amounts in bars and restaurants.

He told Sampath Kumar was arrested while disposing of gold ornaments to Shantilal Jain of Adinath Finance in Moosapet.

Miyapur police has recovered Ford Icon car, six credit cards, four fake driving licenses, eight cell phones, a Tata walky, five sim cards, a cheque book, printer, scanner, monitor and Rs 50,000 cash from them.

Prabhakar Reddy told Vijaya Kumar and Rajender Kumar studied B Sc computers, while Srinivas was a DTP operator. Vijay Kumar was reportedly involved in criminal cases, while Rajender Kumar is wanted in a dowry harassment case..

While the businessman Shantilal Jain, 48, of Moosapet, was arrested for purchasing stolen property from the gang.

Meanwhile, one Seelam Shetty Venkata Ramana alias Sreenu was arrested by the Saroornagar police when he was trying to dispose of stolen property near Konark theatre in Dilsukhnagar on Saturday. His friend Kondala Rami Reddy, 35, has also been arrested for assisting him.

Venkata Ramana used to do robbery in the locked houses. He is involved in 13 burglaries in the city and five in Vijayawada and Guntur.

First state-run bank introduces NEFT through ATMs

Karnataka-based Corporation Bank to cater the personal needs of individual debit cardholders launched national electronic funds transfer (NEFT) through its ATMs.

The press release from the bank stated, Corporation Bank is the first state-run bank to introduce this service which will enable customers especially the saving bank customers to remit the required amounts within two hours.

NEFT is based on inter-operability between banks using this service the funds can be transferred to the beneficiaries’ accounts of any bank.

The release said currently around 43,000 branches of scheduled commercial banks is providing NEFT facility. To use this service the bank’s customers have to pre-register the beneficiaries and a maximum of Rs 15,000 can be transferred in a single day.

Wednesday, April 16, 2008

Banking Ombudsman recommends exemplary punishment to banks for illegal recovery

The Banking Ombudsman submitted its annual report to the Department of Banking Operations and Development in the Finance Ministry, in which it has stated maximum number of complaints, was received against credit card companies in 2006-07.

In its report the committee has recommended the government must instigate policy measures to ensure exemplary punishment to banks for adopting illegal methods to recover dues on credit cards.

It said, "Certain 'exemplary punishments' can be given so that the same can act as a deterrent from adopting illegal methods of recovery of dues”.

The ombudsman said customers should not be held responsible for any misuse of unsolicited cards or associated products it is the banks should be held responsible.

It wants that banks or recovery agents should be banned from disturbing the family members of the cardholders to recover dues.

As per the records of ombudsman, it received over 7,600 complaints against credit card companies, about 20 per cent of total 38,638 complaints received in the previous fiscal.

Referring to exorbitant rates of interest rates charged on credit cards, the report stated banks are charging up to 60 per cent of interest rate and indulging in various illegal methods to recover dues.

Remarking on the practice of some banks to demand payments after a gap of years as grossly unfair, the ombudsman said, "specifying a time limit for rectifying any errors or making a claim on the cardholder need to be considered".

While referring to lack of transparency in recovery operations, the ombudsman said the banks should display all information relating to recovery agents on their website.

It said the banks should be asked, to authenticate the antecedents of all the recovery agents or agencies with the police. "Persons with criminal background, if any, should not be enrolled," it said.

Pointing to RBI guidelines, the ombudsman said that banks need to take caution while issuing credit cards. "The banks are required to inform the reason for rejection of credit card applications as per the extant RBI guidelines".

It said every information regarding the approval for the card issued or the other products offered along with it has to be clear and should not be implied.

In the report it was also stated that the calls made by the agents should only be from the registered offices of the agency, whose phone numbers are available on the bank's website.

The report also wanted that all the calls made by the agents should only be from the registered offices of the agency, whose phone numbers are available on the bank's website. It also said the banks should register all their telemarketers with Department of Telecommunications and carefully follow RBI instructions on the 'National Do Not Call Registry' of TRAI.

Regarding reducing of misuse of lost cards it has recommended banks can consider issuance of photo-cards along with a PIN and laminated signatures of the cardholder.

The bank should immediately block the lost card on being informed by the customer and formalities if any, including lodging of FIR can follow within a reasonable period.

Monday, April 14, 2008

SBI Bhubneshwar branch give Talent award

The country’s largest bank State Bank of India (SBI) has started Talents Award Scheme in an attempt to encourage the students of rural and semi-urban schools to engage in higher studies. Under the scheme, the bank would felicitate 1,00,000 top-ranking students across 10,000 rural and semi-urban schools across the country to continue education in higher secondary schools.

SBI’s Bhubneshwar branch participating in this scheme will be felicitating 1,00,000 top-ranking students from 10,000 rural higher secondary schools of the country.

The bank has allocated Rs 10 crore for the scheme. Under it, each student will get a certificate and cash award of Rs 1001.

Under this bonanza package he/she will get the option of receiving the award either in cash or get a savings bank account with the deposit. It would accompany ATM and Internet banking facility.

The awards will be conferred to top three rank holders of the schools in each of the three streams - science, arts and commerce.

Gramin banks to get bigger role

The government is planning to bring changes in the portfolios of the gramin banks for rural finance. It is planning to use potential of gramin banks at its fullest by giving them a bigger role. The gramin banks will be given the responsibility of selling other financial products like mutual funds and insurance policies and develop them into micro-finance institutions (MFI).

Already some of the progressive gramin banks are dealing into MFIs. Besides lending small amounts of credit and encouraging savings by collecting small deposits, many of these banks are also selling other financial products like insurance and mutual funds. An official spokesman said, “Quite a few of the annual reports of these banks reveal details relating to efforts made by them through cross-selling such product”.

The official added, “Rural banking being their core-competence, they could be major players in this arena in the future banking scenario. Recognizing their strategic position, it is desirable to make them the kingpin in the micro finance movement”.

The planned advantages that these banks have, makes them perfect micro finance institutions. These banks are already having a readymade rural base, intended to handle the credit delivery system, favorable for small lending. These banks have easy access to low-cost funds, organized through savings bank deposits from rural households.

The increased share of micro-finance is definitely going to improve the portfolio quality of these banks as the repayments under micro finance are generally above 90%. Since its existence for the past three decades, the number of gramin banks has gone down to around 133 from about 196, but their operational centers have widened.

MoU signed between Vijaya Bank and Fitch rating agency

On Thursday a memorandum of understanding (MoU) was signed between Vijaya Bank, a Bangalore-based public sector lender and Fitch Ratings India to offer bank loan ratings to its corporate clients at a discounted fee.

The statement released by the bank said according to the terms of the MoU, the corporate customers of the bank will be able to have their loan exposures rated by Fitch.

The statement said the Bank is certain that by entering into MoU with the rating agency, their corporate clients will be encouraged to go for the assessment of the credit worthiness which will them in setting the cost.

DCB looking for merger with larger bank

Merger of banks is gaining impulsion. After voluntary merger of Centurion Bank of Punjab’s with HDFC Bank, there is indication of merger of mid-sized Mumbai-based private sector bank, Development Credit Bank (DCB) with a larger bank. According to sources the DCB bank has opened its doors for merger with a larger bank.

In an interview to the FE top DCB sources told that bank is planning to expand its business in the country for this bank is vigorously thinking of merging itself with a large private sector or foreign bank in India before 2009.

Recently bank has analyzed many options including acquiring of few small banks that can club into a big bank in the country.

A sources from the bank said, “We will open negotiations with other large banks as soon as we find a bank which has a similar business model like ours. Currently, we are reviewing our options. This (a merger) will enhance our profitability, size and the branch network. We believe consolidation is very important for the banking sector to grow”.

“We would like to ‘merge’ rather than ‘get acquired’ by a large bank,” the source added.

When inquired whether DCB will be looking at HDFC Bank for a merger, the source refused to comment.

Interestingly, Nasser Munjee, at present the chairman of DCB, is on the board of HDFC, having a 2.32% stake in the bank. While the Aga Khan Fund, is the largest shareholder with 25.10%, whereas FIIs hold 30.25% stake. Foreign financial companies like Citi (2.06%), Morgan Stanley (3%), Lehman Brothers (3.04%), Merrill Lynch (1.76%) too have stakes in the bank. Recently Tata group has captured 3.78% of the bank’s equity.

This year bank will be raising Rs 150-450 crore to fund its credit growth and operations.

“We will look at raising the required funds after September 2008, through Tier-I or Tier-II bonds. We may look at Tier II capital as there is enough headroom,’’ said an official.

The sources said very soon the bank will be getting into the mutual fund business.

“The mutual fund industry in India is doing really well. We may look at a suitable partner or go on our own depending on the valuation of the business,” the official added.

Currently DCB is in both wholesale and retail banking.

In the past, DCB gained high NPAs from unsecured assets. But by 2007-08, the bank cut its gross and net NPAs to 5.5% and 1.6%, respectively.

Wednesday, April 9, 2008

Financial sector committee recommends opening of small finance banks

The high-level panel on financial sector reforms managed by Professor Raghuram G Rajan has recommended that the government should liberalize the entry norms for the banks. It said that the minimum norm of Rs 300 crore of capital would mean that only large players could enter. Only foreign institutions or converted domestic financial institutions would be able to enter.

The recommendations of the committee may make many small private banks in the country feel happy. The committee has urged the RBI not to focus excessively on the level of capital. It stated that large quantities of capital quickly degenerate it is the quality of promoters, their management capabilities, their capital adequacy and systems must be considered. It noted that in spite of the plaid record of some small banks, which it attributes to poor governance structures, excessive government and political interference and regulatory unwillingness or inability to take prompt action, there is no link between size and integrity.

In this perspective, the panel has recommended for the creation of small finance banks that resemble the earlier Local Area Bank (LAB) scheme. It feels that no serious efforts were made to reinforce the LAB scheme and that it was prematurely discontinued. According to the panel opening of more small finance banks will help in increasing financial inclusion by reaching out to poorer households and local small and medium enterprises.

The panel reported that there are a number of micro-finance institutions (MFIs) that are small and have a good track record but are forced by their inability to offer the full range of financial products (especially deposits which allow them to lower their cost of funds and commensurately their lending rates).

In its report the panel pointed out that as of March 2007; the total equity base of all the 54 Indian MFIs put together was a shade below the Rs 300 crore capital requirements. It feels that some of these MFIs would benefit from transforming into small finance banks.

UK offers Indian banks branch expansion program

UK is offering a range of services to Indian Bank’s for the expansion of their branches network in the country. At present ICICI Bank, Bank of India, Bank of Baroda and State Bank of India in Leicester are doing good business.

Currently a delegation from UK comprising officials of the British government funded trade body, Leicesershire Economic Partnership (LSEP) and the Lord Mayor of British city of Leicester, Councillor Gary G Hunt are on a visit in India and are meeting senior executives of ICICI Bank on Tuesday to offer more opportunities and services to the bank to expand its branch network so that it can have exposure in UK’s small to medium enterprises (SME).

The delegation is also expected to meet executives of other Indian banks to offer similar deal to them in order to attract investments in Leicester by offering the banks’ branch expansion program in UK’s East Midlands region.

LSEP chief, Kishor Tailor said: “The presences of ICICI Bank, Bank of India, Bank of Baroda and State Bank of India in Leicester have contributed significantly to the city’s Economy. We would hence like to offer a range of services to other Indian banks and act as facilitators to locate potential banking business from Asian as well as non-Asian owned SMEs in Leicester.”

Councillor Gary G Hunt said, “Following the entry of Barclays Bank in India, I am keen to see Alliance & Leicester Bank’s presence in India. We would encourage them to do that. Also, I am going to invite the ICICI Bank to start a corporate finance branch in Leicester’s proposed business park. The park is expected to attract huge investments from leading British Companies. The move could get about 10,000 bank accounts of highly paid executives to ICICI Bank.”

LSEP chairman Rick Moore said, “We have 3000 new business start-ups every year. The new business start ups by Asians are around 150 every year as they roughly constitute 30% of Leicester’s population. There exists a good opportunity for Indian banks to capitalize on SME business in Leicester.”

Leicestershire Chamber of Commerce deputy president John Townsend said, “In Leicester, 92% businesses employ less than 50 people and 82% employ less than five people. Many of these enterprises are owned by third generation Asians who traditionally like to bank with Indian banks.”

Monday, April 7, 2008

HDFC Bank to extend its network in the Valley

HDFC Bank had started operations in the Valley in 2005 and has plans of extending its network to Valley by opening four more branches in the Valley. India’s new generating private sector bank, HDFC Bank, has plans to open two branches in Srinagar and one each in north and south Kashmir. The bank will also for the first time opening some off-site ATMs to cater to its customers in the Valley.

“The new branches at Islamabad and Sopur will start functioning from the second week of next month,” said Zubair Iqbal, Cluster Head, and Northern Region (HDFC).

Zubair said the bank will probably be giving a tuff competition to the rural banks. “The customers in the rural areas still bank upon the traditional modes of banking. But we will be providing them with all modern banking facilities and up to the mark services in these areas”.

He informed that the service to be provided by the bank at its new branches in the Valley will be equivalent with the core banking facilities it provides to its customers in metropolitan cities in India.

He told the branches will also have site ATMs. The bank since its operations in the Valley has cultivated a huge customer base and now the bank has plans to expand its network in Srinagar by opening its branches at Karan Nagar and Maharaj Gunj. “Owing to the tremendous customer response, we are opening a branch in downtown Srinagar in Maharaj Gunj in May to cater the Downtown customers,” Zubair said.

To provide better facilities and making banking transactions easy for the huge customer base the bank will also be opening the off site ATMs for the first time. The off site ATMs will be opened at Hyderpora Airport Road, Karan Nagar, Boulevard Road and Saraf Kadal in the downtown.

With the opening of four new branches the total number of branches of the bank in the Valley will go up to seven. Presently bank has two branches, one at Residency Road and another at Hari Singh high Street here with three on site ATMs.

By 2009 the Bank might open fifteen branches in the Valley.

Saturday, April 5, 2008

Banks are using outdated and faulty methods to pay interest

Almost every one has a savings account in the bank but most of us do not check our savings account how much interest gets credited into our account for the deposits we make.

And if we say how many of us know the way interest is calculated and credited into our account? Not many of us. The most surprising thing is crores of rupees are lost through millions of savings accounts in our country. The numbers as you will see are staggering.

There are an estimated 320 million savings accounts in the various commercial banks. As per the RBI report of May 2007, saving deposits with banks amounted to approximately Rs 4,30,000 crore (Rs 4,300 billion) at the end of March 2007.

The interest paid by most of the banks in the country is on the minimum balance held between the 10th and 30th/31st of every month. A report was prepared after picking up the samples from nationalized, private and foreign banks in the country to take a broad representation of most banks.

For instance you have nil balance in your account as on April 10. On April 11th you deposit Rs 100,000 in your account. If you withdraw the funds on May 31st, there is no interest paid to you for the entire term of 51 days.

You may think why, the reason according to the bank’s calculation is that the minimum balance between April 10 (nil) and April 30 (Rs 100,000) is nil, so no interest is paid for April. Similarly between May 10 (Rs 100,000) and May 31st (nil), the minimum balance is nil and hence you earn no interest for May as well.

Basically it gives the chance to the bank to use your money for 51 days free of cost. As a result, the bank has the advantage of leveraging these zero-cost funds and lends them at higher rates of interest. This is one of the most important sources of their profits.

At the same time a smart person will deposit Rs 100,000 on April 10th instead of April 11th and remove the money on May 1st. The minimum between April 10th and April 30th now is Rs 100,000 and hence he gets 3.5 per cent a year for just keeping the money for 20 days. This is equivalent to a yield of 5.425 per cent.

The RBI knows well aware of this but has done nothing about this practice. At the end of the day it’s the depositor who bears the burden of this faulty interest calculation practice.

The question to ask is that in the area of technological sophistication, is it necessary to continue with this outdated method of interest calculation for the convenience of banks but at the cost to the depositor? This shows that the aam admi’s interests like always clearly take a backseat.

Then what should be done to maximize the interest you earn on bank deposits?

Make deposits in your savings account before or on the 10th of every month and try to withdraw any funds only after the 31st or the last day of every month.

Check your bank statements carefully to ensure that interest payments are properly credited into your account.

More importantly leave minimum funds in your savings account to pay for monthly expenses and immediate payments and move the rest in short term fixed deposits.

This way you have liquidity and at the same time you continue to earn higher interest. It is better to save funds in higher interest rate fixed deposits and take an overdraft against the deposit for any unforeseen event.

Union Bank to expand “Banking Habit Villages” program

Union Bank of India, under its business-building plan, is materializing to expand the ‘Banking Habit Villages’ program in Andhra Pradesh.

The main idea is to make certain all families have a bank account and access to banks various services. For this, the bank has deputed field staff and providing office with Internet and other facilities at its rural branches, said bank’s regional manager C Abraham.

The project has been put into operation in over 240 villages in the state and there are plans of extending it to other areas. The bank will conduct a survey of a particular region for assessing the banking needs of the people and will also take the help of self-help groups to identify the people, to understand their earning and spending patterns to devise services and products that suit them.

Under this project, the bank will be giving smart card apart from opening a savings account. The smart card can be used for getting pensions, claiming wages under the National Rural Employment Guarantee Scheme and other social security program. So far, the bank has issued about 6,000 smart cards in various districts.

It will be issuing about 150,000 cards shortly in Warangal, Karimnagar, Medak, Mahboobnagar, Chittoor and East Godavari districts. “The smart card can be used at the local grocery stores too,”’ said Abraham.

The bank has also established Village Knowledge Centers to provide knowledge to farmers on the new developments in cultivation and harvest, the right use of fertilizer and pesticides for better yield and higher income. Up till now 14 such centers have been opened in the state and there are plans to open more centers in the current financial year.

He informed on Friday, the bank launched its reverse mortgage scheme across the country and is working to open its overseas branch in Hong Kong shortly. Very soon it will also be launching Union M-Pay for transfer of funds through mobile this month besides adding another 50 branches to the present 156 in the state.

Thursday, April 3, 2008

Bank of Maharashtra and ECGC tie-up for distribution of insurance products

Public sector lender Bank of Maharashtra, headquartered in Pune signed an agreement with Export Credit Guarantee Corporation (ECGC) of India on Wednesday for distribution of the latter's insurance products.

A press release of the bank stated under the agreement, the bank will act as the corporate agent of ECGC and market the export credit insurance products through its 1,375 branches.

The agreement was signed by the Chairman and Managing Director M D Mallya of Bank of Maharashtra and ECGC Chairman and Managing Director A V Muralidharan.

The release stated ECGC headquartered in Mumbai, will be shortly starting its services in the domestic credit insurance sector, and enabling exporters to insure their domestic receivables.

The bank is already having insurance tie-ups with United India Insurance and Life Insurance Corporation of India. The bank is offering life insurance cover to its deposit account holders and home loan borrowers.

Tuesday, April 1, 2008

IOB to acquire Pune based cooperative bank

The Chennai-based Indian Overseas Bank will be acquiring Shree Suvarna Sahakari Bank, a Pune-based cooperative bank. The acquisition plans have been approved by the board of directors of IOB in a meeting held on March 29.

In an interview with Business Standard on Monday, IOB Chairman and Managing Director S A Bhatt said the acquisition will help the bank establish its presence in the western parts of the country. “If IOB wants to start branches, it will take another four to five years. Expanding through an acquisition would be easier,” Bhatt said.

Bhatt informed that acquisition process will take 6-7 months to complete. “This acquisition is a test process; if this model becomes successful we will go in for more acquisitions.”

This will be the second acquisition for IOB since the last quarter of the current financial year. Earlier in February, IOB had entered into a joint venture with JM Financial to acquire a minimum 10 per cent of the paid-up capital amounting to Rs 210 crore in the asset reconstruction company promoted by JM Financial. The said plan is subject to approval from the Reserve Bank of India.

Two or three public sector banks and high net worth individuals are likely to participate in the venture.

During the current financial year the Pune-based bank did total business of Rs 1,200 crore during the current financial year. Total liability is around Rs 700 crore and assets at Rs 500 crore. Bhatt said currently, the bank has 12 branches in Mumbai and Pune.