Articles for Banking

Indian Money In Swiss Banks Falls By 10 Per Cent

Money held by Indians in Swiss banks fell by over 10 per cent last year to 1.8 billion Swiss franc (about Rs 12,615 crore), amid an enhanced clampdown against the famed secrecy wall of Switzerland's banking system by Indian and other governments.The funds held by Indians with banks in Switzerland fell by CHF 215 million to CHF 1,815 million ($1.98 billion), from 2,030 million Swiss franc, as per the latest data released today by the country's central banking authority SNB (Swiss National Bank).This is the second lowest amount of funds held by Indians in the Swiss banks and follows an increase of over 40 per cent in the previous year, 2013.In contrast, the money held in Swiss banks by their foreign clients from across the world surprisingly rose during 2014 to 1.5 trillion Swiss franc ($1.6 trillion or Rs 103 lakh crore), from about Rs 90 lakh crore at the end of 2013 - the record low level so far.During 2012, the Indians' money in Swiss banks had fallen by over one-third to its lowest ever level of 1.42 billion Swiss franc (Rs 8,530 crore).As per the latest data, the total Indian money held in Swiss banks at the end of 2014 included 1,776 million Swiss franc or Rs 12,350 crore held directly by Indian individuals and entities (down from 1,952 million a year ago), and another 38 million Swiss franc (down from 77.3 million Swiss francs at 2013-end) through 'fiduciaries' or wealth managers.However, "amounts due to customers' savings and deposit accounts" was only CHF 52 million (down from CHF 63 million a year ago), while over CHF 100 million was due through other banks and the remaining amount of well over one billion Swiss francs have been classified as "other amounts due to the customers" from India.(PTI)

SBI Q4 Net Up 23%, Bad Loan Ratio Down

State Bank of India, the nation's top lender by assets, reported a better-than-expected 23 per cent increase in quarterly profit and a lower bad loan ratio, sending its shares more than 5 per cent higher. SBI, which accounts for about a quarter of Indian loans and deposits, said net profit rose to Rs 3,742 crore ($589.11 million) for its fiscal fourth quarter to March 31 from Rs 3,041 crore a year earlier. Analysts on average had expected a net profit of Rs 3,723 crore, according Thomson Reuters data. Gross bad loans ratio stood at 4.25 per cent in the March quarter, compared with 4.9 per cent in the December quarter. (Reuters) 

Indian Banks Must Aspire To Join Top Global League: Chanda Kochhar

With China' impressive economic growth catapulting their banks into the top global league, India's top private sector lender ICICI Bank's chief Chanda Kochhar has said Indian banks also must aspire to scale up their activities significantly. ICICI Bank, which has opened its first branch in China, would also keep reviewing the India-linked business opportunities in the international markets and expand its presence as new avenues emerge, Kochhar said. "For economies like India and China, where banks are the   major financiers of growth, the performance of the banking   sector is closely linked to the economy. "China has an exceptional record of consistent high growth of over 10 per cent for three decades which has helped to catapult Chinese banks to a significant size at a global level," said  Kochhar.  "India is expected to be the fastest growing economy in the medium term. As India grows, Indian banks must also aspire to scale up their activities significantly," added more.  A number of Chinese banks have made it to the world's top banking league, but Indian banks are still not there. Kochhar, who was here for the opening of ICICI Bank's first branch in China on Saturday, was replying to a question on whether some Indian banks, including ICICI Bank, would be   able to join the top global league some time soon. With a consolidated asset base of $132 billion, ICICI Bank is India's largest private sector bank and it is present across 17 countries. It already had a representative office in China, which it had opened over 10 years ago in 2003. The bank's international book accounts for about one-fourth of its assets. To another question on whether ICICI Bank would look at entering other countries which have potential for greater trade flows with India, Kochhar said, "The Bank continues to review India-linked business opportunities and expand our presence as new avenues emerge." "The Bank continues to calibrate its global presence as per its India-linked strategy. We have had a presence in China since over a decade through our representative office, which can now been be scaled up further through the branch to take advantage of the growing linkages between the two countries," she said. ICICI Bank's global footprint consists of subsidiaries in   the UK and Canada, branches in the US, China, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre, and representative offices in UAE, Bangladesh,   Malaysia and Indonesia. The bank's UK subsidiary has established branches in Belgium and Germany. (PTI) 

'Going Where Banks Won't Go' - SIDBI Fulfilling Its Mandate Of Helping MSMEs

Turning A Bad Situation Into An Opportunity - Ramesh Sobti, MD & CEO, IndusInd Bank

'Banking On Rural Reach' - Aditya Puri, MD, HDFC Bank

Look At The India Story Not As A Photograph But As A Movie,Says Uday Kotak, Kotak Mahindra Bank

HDFC Bank Sees Strong Loan Growth After Profit Rises

HDFC Bank Ltd, India's second-biggest private sector lender by assets, said on Thursday it was optimistic of growing loans on the back of faster economic expansion after reporting net profit grew more than a fifth in the March quarter. The lender said net profit rose to Rs 2807 crore ($444 million) in its fiscal fourth quarter from Rs 2327 crore a year ago. Analysts on average had expected a profit of 27.8 billion rupees, according to data compiled by Thomson Reuters. HDFC Bank expects to grow loans faster than the banking sector during the financial year to March 2016, Paresh Sukthankar, deputy managing director at the lender, told reporters. He expected the banking system loan growth this fiscal year to be between 13 and 14 percent if the economy grows one percentage point faster. Bank loans grew about 12 percent last fiscal year. Indian lenders have been hurt by two straight years of slower economic expansion that led to projects being stalled and corporate balance sheets getting stretched. Demand for loans from companies has yet to pick up, although consumer loans are growing fast. "Have we seen a huge pick up on the capex side? The answer is 'no'," Sukthankar said, but added that was not a surprise since loan demand revival typically comes with a lag to economic recovery. HDFC Bank's net interest income grew 21.4 percent in the March quarter as advances rose 20.6 percent. Net interest margin was stable at 4.4 percent. Bad loans as a percentage of total loans was at 0.9 percent compared with 1 percent in the third quarter. Shares in HDFC Bank, which is India's most-valuable lender with more than $40 billion in market capitalisation, have outperformed bigger rivals such as State Bank of India and ICICI Bank so far this year. HDFC Bank stock has gained 6.5 percent in 2015, while the bank sector index is down 2.6 percent.

Reserve Bank Seen Keeping Interest Rates On Hold

The Reserve Bank of India (RBI) is expected to keep its benchmark interest rate on hold at 7.50 percent at a policy review on Tuesday, while signalling that it could act swiftly to lower rates further if inflation stays within its target. This year, RBI has already cut the repo rate twice, by 25 basis points each time, in a bid to bolster economic growth. Neither reduction took place during a regular policy review. "Having cut rates in mid-March and mid-January, a pause may be warranted to reassess the outlook on inflation," said Gaurav Kapur, senior economist at Royal Bank of Scotland in Mumbai. The RBI rates on the back of easing inflation. The consumer price index rose 5.37 percent in February, marking a fifth consecutive month of staying within the RBI's target of 2 to 6 percent. Earlier-than-expected rainfall in parts of the country have pushed up prices of winter crops, such as wheat and pulses, which could make the RBI cautious over the outlook for inflation. The RBI's wariness will also be heightened by any rebound in crude oil prices due to tensions in the Middle East. Only nine of the 40 economists surveyed by Reuters expect the RBI to cut rates on Tuesday, but most expect at least a 25 bps cut by the end of June. Those analysts reckoning on a rate cut later this month, instead of at a policy review in June, are expecting inflation to remain within target when the next data is released on April 13. Beyond the outlook for inflation, the RBI has also made rate cuts contingent on Prime Minister Narendra Modi's government containing its fiscal deficit and passing economic reforms. Lower Indian interest rates would help stop the rupee from strengthening further against other currencies whose central banks are cutting interest rates. A surge in foreign investment flows into India has pushed up the rupee, raising worries about sudden, destabilising outflows should the Federal Reserve start raising U.S. interest rates later this year, as is widely expected. Analysts expect any dovish statement from the RBI to be accompanied by more pressure on commercial banks to lower their lending rates. Only a few reduced rates after the previous central bank cuts, raising concerns about the transmission of monetary policy actions to the broader economy. Although markets have speculated that the RBI could cut the cash reserve ratio (CRR) - the portion of deposits that lenders must keep with the central bank - to boost banks lending capacity, few analysts believe the RBI would resort to such a blunt tool. (Reuters)

FinMin Looks To RBI To Support Growth Revival

With RBI keeping interest rates unchanged, government today said it is looking forward to the central bank to support revival of growth and employment.In a statement, the Finance Ministry said it was encouraging that RBI has taken note of the structural change in the outlook for inflation."The government looks forward to the RBI supporting the revival of growth and employment," the statement said.Referring to the proposed new monetary policy framework, it said in the weeks ahead, government and RBI will work towards it.The framework would "help institutionalise the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth", the ministry added.Earlier in the day, RBI Governor Raghuram Rajan said talks with the government have progressed well and the details will be announced soon.The new monetary policy framework involves setting of a formal inflation target and accountability to deliver on the same. The RBI has set the inflation target for January 2016 and beyond at 4 per cent, plus or minus 2 per cent.In its policy review, the RBI said "if the current inflation momentum and changes in inflationary expectations continue, and fiscal developments are encouraging, a change in the monetary policy stance is likely early next year, including outside the policy review cycle".RBI today kept interest rates unchanged for fifth time in a row and the repo rate continues to be at 8 per cent while the cash reserve ratio has also been retained at 4 per cent.On the inflation trajectory, Rajan said he expects it to ease further and average at the 6 per cent."Over the next 12-month period, inflation is expected to retain some momentum and hover around 6 per cent, except for seasonal movements, as the disinflation momentum works through," he said after his bi-monthly review of the monetary policy.On her part, SBI Chairperson Arundhati Bhattacharya said that interest rates are likely to remain unchanged after RBI's status quo.ICICI Bank chief Chanda Kochhar said that "the statement that a change in monetary policy stance is likely early next year if the current positive trends continue is very welcome.""The results of government actions to energise investment activity should start playing out in the coming months. As this happens and interest rates moderate, we should see an improvement in growth going forward," she added.Economic growth slowed to 5.3 per cent in the second quarter of current fiscal, from 5.7 per cent recorded in April-June quarter.(PTI)