The financial inclusion program across the country has not yet attained the pace. One of the reasons for this could be lack of people familiarity with the digital technology (digital natives), along with lack of public trust on business correspondents of various banks.
Only small section of Indian people, especially living in rural areas is digital populace comfortable with modern technology such as mobile banking.
K Ramakrishna, chief executive, Indian Banks’ Association, in his speech at a Skoch summit in New Delhi said, “According to recent survey, close to 70 per cent of world’s population is analogue and only 15 per cent of world’s population is digital native. In such a scenario, adoption of mobile banking services as tool for financial inclusion is not going to change the scenario overnight and it would require sustainable effort to achieve the goal of financial inclusion”.
However in India around 50 per cent of mobile phone users do not have a bank account and this further hinders the mobile banking popularity. The bankers informed the other model in which reporters are to publicizing banking through news and articles have also suffered lack of trust. M V Tanksale, executive director, PNB told, “Many business correspondent do not enjoy the confidence of villagers. As a result, they (villagers) do not hand over their savings to such correspondents and that in turn is hampering the speed of financial inclusion”.
According to latest figures around 50 per cent of India’s population is still unbanked. Although majority of PSU banks, who are working on financial inclusion programs, have been able to open 33,024,761 no-frills accounts till March 2009.
Friday, November 13, 2009
Axis Bank first Home for All Expo held at Bangalore
Axis Bank a private sector bank is organizing the Home for All Expo across the country, first of this expo was held in Bangalore on November 6, at the Koramangala Indoor Stadium. Last year similar expo was organized and was a big success. In these expos wide array of properties will be showcased, across price points (five lakh rupees to five crore rupees) and category of properties (site, flats, row houses and villas).
In expo held at Bangalore, over 45 of city’s top developers had participated in the expo which showcased over 250 projects. In the expo over 25,000 units were for sale, this was the largest property expo ever organized in Bangalore before.
In accordance with the expo bank has extended the maximum tenure of the repayment period to twenty five years, of the standard home loan. While in another variant of the home loan product called the step down product, the bank has a provision, the customer whose combined family income is higher then he will have to pay higher EMI and in case family income reduces over a period of time then EMI will be lower. Also the customer gets the option to repay back the whole amount of the loan before its maturity and bank will not charge any prepayment penalty.
Bank sources informed similar expos will be organized by the bank at major locations across the country and this special offer on interest rates for home loans will be offered till December 10, 2009 only. Home loan borrowers can avail power plus home loans at an interest rate of just eight per cent for the first year. From the second year bank onwards bank will offer floating rate of interest based on the bank’s mortgage reference rate. As per the current MRR, the rate for the second year and thereafter, the rate charged will be 8.75 per cent for loan amounts up to Rs 30 lakhs and 9.25 per cent for loan amounts above Rs 30 Lakhs.
Bank has made special arrangement of on the spot approval for the prospective buyers who wish to take loan at the Home for All Expos, and the loan processing fees will be waved off.
Manju Srivatsa, president retail banking, Axis Bank told, “The Home for All Exposition provides a platform to bring the buyer and seller together and to offer prospective home buyers easy financing all under one roof. We are confident that the expositions will get a tremendous response for home buyers.”
In expo held at Bangalore, over 45 of city’s top developers had participated in the expo which showcased over 250 projects. In the expo over 25,000 units were for sale, this was the largest property expo ever organized in Bangalore before.
In accordance with the expo bank has extended the maximum tenure of the repayment period to twenty five years, of the standard home loan. While in another variant of the home loan product called the step down product, the bank has a provision, the customer whose combined family income is higher then he will have to pay higher EMI and in case family income reduces over a period of time then EMI will be lower. Also the customer gets the option to repay back the whole amount of the loan before its maturity and bank will not charge any prepayment penalty.
Bank sources informed similar expos will be organized by the bank at major locations across the country and this special offer on interest rates for home loans will be offered till December 10, 2009 only. Home loan borrowers can avail power plus home loans at an interest rate of just eight per cent for the first year. From the second year bank onwards bank will offer floating rate of interest based on the bank’s mortgage reference rate. As per the current MRR, the rate for the second year and thereafter, the rate charged will be 8.75 per cent for loan amounts up to Rs 30 lakhs and 9.25 per cent for loan amounts above Rs 30 Lakhs.
Bank has made special arrangement of on the spot approval for the prospective buyers who wish to take loan at the Home for All Expos, and the loan processing fees will be waved off.
Manju Srivatsa, president retail banking, Axis Bank told, “The Home for All Exposition provides a platform to bring the buyer and seller together and to offer prospective home buyers easy financing all under one roof. We are confident that the expositions will get a tremendous response for home buyers.”
Wednesday, November 11, 2009
Corporation Bank to introduce new logo
Corporation Bank, a public sector bank is the latest bank to get into re-branding exercise after few of the state-owned lenders like Canara Bank, Jammu & Kashmir Bank, Bank of Baroda and Union Bank of India. The bank has planned to start its re-branding process with the introduction of the new logo.
For this bank has already appointed consultants who will be redesigning bank’s 38-year old logo with a view to increase the visibility. JM Garg, chairman and managing director of the bank, has confirmed about the developments to FE.
Garg informed, “We got an approval to alter the font size as well as the colour shades of our existing logo in the recent board meeting of the bank”. He added at present bank is not going to change its entire logo.
The new structural changes in its design are likely to increase the brand image of the bank. But Garg did not reveal any details related to the expenses the bank will incur towards its partial re-branding exercise.
The current logo of Corporation Bank was integrated in 1972 when the name of the bank was changed from Canara Banking Corporation (Udipi) Ltd to Corporation Bank Ltd. In the recent years, the other Indian banks who have changed its logo or underwent a re-branding exercise include UTI Bank, Saraswat Bank, Dhanalakshmi Bank and IndusInd Bank.
The bank has finalized a foreign partner for its proposed foray into non-life insurance business. Garg, did not reveled the name of the prospective foreign partner but told FE, “We have almost finalized a foreign partner for our proposed venture in non-life insurance.” Garg informed a consultant has been appointed for this by the bank and within six months it will be submitting a report.
Garg completely denied the media report that his bank is looking to venture in life insurance business.
For this bank has already appointed consultants who will be redesigning bank’s 38-year old logo with a view to increase the visibility. JM Garg, chairman and managing director of the bank, has confirmed about the developments to FE.
Garg informed, “We got an approval to alter the font size as well as the colour shades of our existing logo in the recent board meeting of the bank”. He added at present bank is not going to change its entire logo.
The new structural changes in its design are likely to increase the brand image of the bank. But Garg did not reveal any details related to the expenses the bank will incur towards its partial re-branding exercise.
The current logo of Corporation Bank was integrated in 1972 when the name of the bank was changed from Canara Banking Corporation (Udipi) Ltd to Corporation Bank Ltd. In the recent years, the other Indian banks who have changed its logo or underwent a re-branding exercise include UTI Bank, Saraswat Bank, Dhanalakshmi Bank and IndusInd Bank.
The bank has finalized a foreign partner for its proposed foray into non-life insurance business. Garg, did not reveled the name of the prospective foreign partner but told FE, “We have almost finalized a foreign partner for our proposed venture in non-life insurance.” Garg informed a consultant has been appointed for this by the bank and within six months it will be submitting a report.
Garg completely denied the media report that his bank is looking to venture in life insurance business.
Bank of Maharashtra reduced loan and deposit rates
Following the path of bigger banks, the state-run Bank of Maharashtra has reduced its home and vehicle loan rates and has also cut down the deposit rates across various maturities.
According to BoM release the loans sanctioned up to December 31, 2009 will get the benefit of rate reductions.
After revision the bank will be offering home loan up to Rs 30 lakh at a fixed rate of 8 per cent for the first two years, 8.5 in the third year, 9.5 per cent in the fourth and 9.75 per cent in the fifth year.
The release stated after the fifth year, the rates will be reset as per the benchmark prime lending rate of the bank.
On loan above Rs 30 lakh, for the first two years the bank will offer rate of 8.25 per cent, then for the third year the rate will be 9 per cent and subsequently for fourth and fifth years the rate will be 9.75 per cent.
According to BoM release the loans sanctioned up to December 31, 2009 will get the benefit of rate reductions.
After revision the bank will be offering home loan up to Rs 30 lakh at a fixed rate of 8 per cent for the first two years, 8.5 in the third year, 9.5 per cent in the fourth and 9.75 per cent in the fifth year.
The release stated after the fifth year, the rates will be reset as per the benchmark prime lending rate of the bank.
On loan above Rs 30 lakh, for the first two years the bank will offer rate of 8.25 per cent, then for the third year the rate will be 9 per cent and subsequently for fourth and fifth years the rate will be 9.75 per cent.
Dhanalakshmi Bank gets approval to start merchant banking
Sebi has given approval to the private sector lender Dhanalakshmi Bank to start its merchant banking business and also the bank is almost ready to acquire a major stake in an existing asset management company, informed a top bank official.
"We have got Sebi approval for starting our merchant banking business. We have also zeroed-in on an existing asset management company in which we intend to take a major stake," Dhanalakshmi Bank's Managing Director and CEO Amitabh Chaturvedi, told PTI here.
He told Parag Kothari will be looking after merchant banking business. Parag Kothari has recently joined the bank from Cholamandalam.
He added currently no separate subsidiary has been formed and a division within the bank will be seeing the merchant banking business. He said, "This will add to our bouquet of services."
He told in the beginning bank has plans to start businesses such as lead- managing public issues, deal structuring, QIPs and stake-sale, among others.
Regarding banks venture into mutual funds, Chaturvedi said bank has finalized on an existing player and in this bank might be holding either a 49 per cent or 51 per cent stake.
He added, "Negotiations are in the final stages".
Before, bank had short-listed four MF players for either a buy-out or a stake-buy.
"We have got Sebi approval for starting our merchant banking business. We have also zeroed-in on an existing asset management company in which we intend to take a major stake," Dhanalakshmi Bank's Managing Director and CEO Amitabh Chaturvedi, told PTI here.
He told Parag Kothari will be looking after merchant banking business. Parag Kothari has recently joined the bank from Cholamandalam.
He added currently no separate subsidiary has been formed and a division within the bank will be seeing the merchant banking business. He said, "This will add to our bouquet of services."
He told in the beginning bank has plans to start businesses such as lead- managing public issues, deal structuring, QIPs and stake-sale, among others.
Regarding banks venture into mutual funds, Chaturvedi said bank has finalized on an existing player and in this bank might be holding either a 49 per cent or 51 per cent stake.
He added, "Negotiations are in the final stages".
Before, bank had short-listed four MF players for either a buy-out or a stake-buy.
Friday, November 6, 2009
Corp Bank launched loan syndication, plans to venture in general insurance in 6 months
State-run Corporation Bank has an aim to increase its banking business at the domestic level, in view of this it has launched loan syndication business and has plans to venture into the general insurance business in the next six months.
Corporation Bank Chairman and Managing Director J M Garg told, "We have launched the loan syndication business and have also taken up a proposal for a Rs 500 crore loan. The bank expects to increase its fee-income from the segment".
Loan syndication means pooling of advances by a group of lenders to alleviate risks.
He informed, for general insurance business, the bank is planning to form a separate subsidiary in a joint venture partnership, for this it has appointed a consultancy to search for a suitable partner.
Garg said, "We are thinking of setting up a subsidiary for the non-life insurance business. We have appointed a consultancy and the process is expected to take around six months time".
Garg informed to grow its banking business, bank’s main focus will be more on increasing its non-interest income and current, savings account growth. The bank hopes to increase its CASA by 30 per cent in the current fiscal.
He added bank has also set a target to grow its loan segment by 22 per cent in FY10, whereas the deposit base is likely to grow by 23 per cent during the period.
At present the net interest margin of the bank is 2.3 per cent, hopes to increase to 2.4-2.5 per cent in the second half of the financial year, informed Garg.
Garg pointed out by the year-end bank’s total business is likely to grow to Rs 1,50,000 crore from Rs 1,33,456 crore.
Corporation Bank Chairman and Managing Director J M Garg told, "We have launched the loan syndication business and have also taken up a proposal for a Rs 500 crore loan. The bank expects to increase its fee-income from the segment".
Loan syndication means pooling of advances by a group of lenders to alleviate risks.
He informed, for general insurance business, the bank is planning to form a separate subsidiary in a joint venture partnership, for this it has appointed a consultancy to search for a suitable partner.
Garg said, "We are thinking of setting up a subsidiary for the non-life insurance business. We have appointed a consultancy and the process is expected to take around six months time".
Garg informed to grow its banking business, bank’s main focus will be more on increasing its non-interest income and current, savings account growth. The bank hopes to increase its CASA by 30 per cent in the current fiscal.
He added bank has also set a target to grow its loan segment by 22 per cent in FY10, whereas the deposit base is likely to grow by 23 per cent during the period.
At present the net interest margin of the bank is 2.3 per cent, hopes to increase to 2.4-2.5 per cent in the second half of the financial year, informed Garg.
Garg pointed out by the year-end bank’s total business is likely to grow to Rs 1,50,000 crore from Rs 1,33,456 crore.
Tuesday, November 3, 2009
Banks advertising cash back & reward points schemes but read the fine print
Banks in order to encourage customers for more spending, they are giving cash back offers and reward points on credit cards. Advertisements can be seen like 'Shop using your credit or debit card and get Rs300 off' or 'Get up to 3% cash back on your card transactions'. The credit card head of a foreign bank pointed out, “Though cash backs and reward point schemes existed all through, they have become more aggressive".
Some of the banks such as Citibank, HSBC, Corporation Bank, Deutsche Bank and HDFC Bank are offering cash backs or reward points. Although some of the offers have got closed on October 31, but few of the schemes have been extended up to the end of 2009.
Ravi Subramanian, head of consumer assets, HSBC, informed, "Points and cash backs bring loyalty for a card company. Reward points are good for inducing spends, and cash backs work in the short run."
Subrat Pani, head of the credit card division at Kotak Mahindra Bank, while explaining why schemes are in full bloom said, "When new card acquisitions have slowed down, you have to focus more on the existing base."
The credit card holders should be careful, before going for these offers they should read the fine print of cash back schemes. In the fine print banks mention the limitation on the amount of purchase and on the cash back or points per transaction on a per month basis. According to the promotional material of a credit card, "The minimum transaction amount for cash back on fuel and telecom is Rs500, and Rs1,000 for other categories. The maximum cash back per transaction is Rs150 and maximum cash back per month per customer is Rs500". As per this amount restriction, it might not be the right decision to make purchases to earn cash back.
According to another card issuer cash backs is offered only if used "for purchases worth Rs250 or more before your second statement is generated". In case you do not know about your bill generation cycle and do purchasing after that period, your cash back will be invalid.
Regarding reward points banks advertise of doubling the number of reward points, as compared to earlier, but card holders should make note of the conversion ratio of rupee per point as some of the banks have reduced it.
Past eight months back, most banks offered 40paise per reward point. Now the ratio has been reduced to 20-30paise, informed a banker. But banks deny this.
Some of the banks such as Citibank, HSBC, Corporation Bank, Deutsche Bank and HDFC Bank are offering cash backs or reward points. Although some of the offers have got closed on October 31, but few of the schemes have been extended up to the end of 2009.
Ravi Subramanian, head of consumer assets, HSBC, informed, "Points and cash backs bring loyalty for a card company. Reward points are good for inducing spends, and cash backs work in the short run."
Subrat Pani, head of the credit card division at Kotak Mahindra Bank, while explaining why schemes are in full bloom said, "When new card acquisitions have slowed down, you have to focus more on the existing base."
The credit card holders should be careful, before going for these offers they should read the fine print of cash back schemes. In the fine print banks mention the limitation on the amount of purchase and on the cash back or points per transaction on a per month basis. According to the promotional material of a credit card, "The minimum transaction amount for cash back on fuel and telecom is Rs500, and Rs1,000 for other categories. The maximum cash back per transaction is Rs150 and maximum cash back per month per customer is Rs500". As per this amount restriction, it might not be the right decision to make purchases to earn cash back.
According to another card issuer cash backs is offered only if used "for purchases worth Rs250 or more before your second statement is generated". In case you do not know about your bill generation cycle and do purchasing after that period, your cash back will be invalid.
Regarding reward points banks advertise of doubling the number of reward points, as compared to earlier, but card holders should make note of the conversion ratio of rupee per point as some of the banks have reduced it.
Past eight months back, most banks offered 40paise per reward point. Now the ratio has been reduced to 20-30paise, informed a banker. But banks deny this.
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