Banks' merger plan on the anvil; SBI and SBP first in queue

The government has asked IDBI Bank and United Bank of India to prepare a consolidation plan. A daily newspaper has reported that the government will first begin merger process between State Bank of India and State Bank of Patiala.

It may be recalled that talks have been going on for long for merging SBI’s subsidiaries with the parent bank. SBI first merged its State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI. 

The country’s largest lender has five associate banks—State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed entities.

Finance Minister Arun Jaitley in his Budget speech had said, "There have been some suggestions for consolidation of Public Sector Banks. Government, in principle, agrees to consider these suggestions."

Jaitley, speaking to reporters after the Budget, had said that the consolidation could be between a big bank and its subsidiaries.

SBI exploring ways to declare Vijay Mallya 'wilful defaulter'

State Bank of India, which has an exposure of Rs 1,600 crore to grounded airline Kingfisher, today said it is exploring ways to declare the carrier's promoter Vijay Mallya as a 'wilful defaulter'.

"We are looking at various ways to declare Vijay Mallya a wilful defaulter and trying build a strong case in that regard," an SBI source said.

The source said that as per RBI guidelines, it would have to be proven that the borrower had diverted funds which he taken from the bank and not paying up despite having the ability to pay.

"If we are sure on these two points, then the bank will declare Mallya a wilful defaulter," the source said.

Read More... 

http://www.financialexpress.com/news/sbi-exploring-ways-to-declare-vijay-mallya-wilful-defaulter/1253716

SBI launches Youtube channel; Twitter is next

http://www.thehindubusinessline.com/companies/sbi-launches-youtube-channel-twitter-is-next/article5609936.ece

Nation’s largest lender State Bank of India on Thursday strengthened its social media presence with the launch of its channel on popular video sharing website Youtube and said it will also be launching its handle on the micro-logging site Twitter soon.

“The YouTube channel is another platform that will enable us to connect with our customers. SBI will continue to spread its footprint on social media through the launch of platforms like Twitter, shortly,” Chairperson Arundhati Bhattacharya said in a statement.

The YouTube channel, which follows a dedicated Facebook page launch in November, will initially have information about the bank’s products and services and its legacy to begin with and will gradually include philanthropic initiatives, it said in a statement.

SBI, has over 200 years of history. It has over 15,000 branches and over 43,000 ATMs.

The bank statement said the Youtube channel will help it connect with the young and technologically savvy customers.

Don’t lend short for long-drawn projects, SBI chief tells associate banks

http://www.thehindubusinessline.com/industry-and-economy/banking/dont-lend-short-for-longdrawn-projects-sbi-chief-tells-associate-banks/article4766140.ece

State Bank of India (SBI) Chairman Pratip Chaudhury has cautioned associate banks against committing short-term funds for long-gestation projects.

He said this with specific reference to exposure to a series of big-ticket infrastructure projects in Kerala, where State Bank of Travancore (SBT), an associate bank, is headquartered.

BIG PROJECTS

Chaudhuri was here to attend the annual general meeting of the associate bank and also a corporate social responsibility event that coincided with it.

Among projects announced in the State are Metro Rail in Kochi; monorail in Thiruvananthapuram and Kozhikode; a high-speed rail corridor; the Vizhinjam container terminal and the Kannur international airport.

By no chance should short-term funds be advanced to these projects since it could lead to a mismatch of deposit base versus long-term advances committed.

Chaudhury advised banks to examine how and when revenue stream from a project starts kicking in. It is easy to take a decision on projects, for instance Metro or monorail, with an assured revenue stream.

NOT SAME

It would not be the case with projects such as a flyover or a bridge, which propped up the contentious issue of toll as a means of realising costs over a period of time.

Chaudhury said parent SBI was sitting on a cash surplus of Rs 40,000 crore. It is willing to fund projects being executed by reputed contractors known for speed of implementation.

Separately, he reiterated his demand that all loans, including home and vehicle, be brought under a single regulator.

Why should there be a separate regulation for commercial banks and housing finance companies when they lend funds to the same sector, he wondered.

PAT FOR SBT

He complimented SBT for maintaining a good credit-to-deposit ratio of 69 per cent, indicating the extent of credit sanctioned within the home State relative to the deposit base.

This should help remove the misconception that the bank is taking away funds outside for investing in lucrative projects in other States.

Chaudhury said the associate bank had revealed solid financial position with a net profit of Rs 615 crore during 2012-13, backed up with a deposit base of Rs 85,000 crore and advances of Rs 67,000 crore.

State Bank of India suggests RBI as single regulator for all home loans

http://www.indianexpress.com/news/state-bank-of-india-suggests-rbi-as-single-regulator-for-all-home-loans/1117535/

The State Bank of India today suggested that the (RBI) Reserve Bank of India should be the regulator for all home loans provided by banks or housing finance companies.

"I see no justification for having a separate regulator for home loans. Perhaps the regulations of objective would be better served with RBI itself becoming the sole regulator for all loans including home loans," State Bank of India chairman, Pratip Chaudhuri said on the sidelines of the ICC banking summit here.

Banks currently accounted for more than two-thirds of total home loans disbursed in the country. A single regulator having the same rules for all players would help remove the regulatory arbitrage that existed between banks and HFCs, he said.

Currently RBI regulated home loans provided by all commercial banks, while housing finance companies like HDFC Ltd, LIC Housing Finance Co Ltd, also offered home loans which were regulated by the National Housing Bank.

RBI had raised objections to SBI's dual rate policy on housing loan which was tagged as teaser loans introduced some time ago.

"If a bank offers a slightly lower rate in the initial years and higher rate in later years it is called a teaser loan and they are required to make provision but could similar rules not be applied for other players in the home loan market?" Chauduri said.

Meanwhile, SBI has urged upon RBI to reduce the minimum tenure of deposits to three days from seven days for inducing more flexibility of consumers.

"These are not issues that will lead to inflation or bring imbalances in financial stability, but induce flexibility to the depositor," Chaudhuri said.

"Now we have shadow banking offering investors investment for even one day," he said.

The liquidity risk was not very different from a seven-day deposit and three day deposit, but the question was why make banks handicapped," he asked.

SBI raises the red flag on falling gold prices

http://www.dnaindia.com/money/1823362/report-sbi-raises-the-red-flag-on-falling-gold-prices

Pratip Chaudhuri, chairman of the State Bank of India, says 20% lower gold prices won’t impact the lender yet.

“But any further fall would become an issue.”

As a precautionary measure, the bank is planning to reduce the quantum of loan given against gold, or reduce the so-called loan-to-value (LTV) ratio, which stands at 70% currently.

SBI has a gold loan portfolio of Rs 35,000 crore, which makes up for a little more than 3% of its gross advances. Most of this is agricultural loans supplemented by gold, Chaudhuri said.

LTV ratios have climbed high in the recent past, mainly due to intense competition and regulatory loopholes.

Gold prices have fallen more than 10% to a two-year low in just the last four trading sessions to Rs 25,900 on Tuesday. It is expected to fall further.

This sudden and sharp decline has raised issues over the value of gold collateral with banks and other gold loan companies.

“Falling gold prices, if sustained, can significantly impair the asset quality of the gold loan portfolios of non-banking finance companies (NBFCs) and banks,” said Prakash Agarwal, associate director at India Ratings.

A sizeable proportion of gold loans outstanding may already be close to the realisable value of the collateral, according to India Ratings’ assessment.

An additional 10% correction in gold prices in the near future could result in a majority of outstanding loan amounts being higher than the realisable value of collaterals, increasing possibility of losses, it added.

South-based private banks such as Federal Bank are likely to be impacted more, mainly because of higher proportion of gold loans.

SBI mulls merging one of its associate banks this year

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/sbi-mulls-merging-one-of-its-associate-banks-this-year/articleshow/19582055.cms

State Bank of India will revive the plan to merge its associate banks with itself after putting it on the back-burner for more than three years. For the first time after taking charge in April 2011, SBI chairman Pratip Chaudhuri said that the bank is now open to merging its associate banks with itself. The move will further enhance its already enormous balance sheet.

"Now that the capital conditions are favourable for merger, we will think about it," Chaudhuri told reporters.

However, he did not indicate any timeline. "For us, all five fingers are the same," he said when asked which of the remaining five associates would be considered first for merger.

OP Bhatt, former chairman of SBI, had ambitious plans to merge all the seven associate banks with itself to create a bank which, in India, would resemble behemoths such as ICBC, and National Agricultural Bank of China. During Bhatt's tenure two associate banks, State Bank of Saurashtra and State Bank of Indore, were merged with SBI. After taking charge, Chaudhuri had put merger of associate banks on hold on the grounds that such mergers consume enormous amount of capital.

SBI's tier I capital (equity and reserves) had fallen to 7.9%—lower than its internal target of 8%—after it nearly slipped into losses in the March 2011 quarter.

In an interview with ET in 2011, referring to the bank's decision to press the pause button on merger of associate banks, Chaudhuri had said, "It is very much on the table, but associate bank mergers are not going to happen in a hurry. It is not because we are not convinced that merger is the right thing, but it is because it requires capital and operational efficiency. The cost of a single merger of an associate bank with the parent would be Rs 1,500 crore in terms of payout on staff benefits."

SBI received Rs 11,900 crore in capital from government in two years and it ploughed back Rs 11,700 crore profit last year, which improved its capital position.

SBI to discontinue free accident cover for loan customers

http://www.thehindubusinessline.com/industry-and-economy/banking/sbi-to-discontinue-free-accident-cover-for-loan-customers/article4590965.ece

The country’s largest bank SBI will discontinue a free accident insurance cover given to its home and car loan customers from July this year.

In a notification to its customers, the State Bank of India said the complimentary group personal accident insurance cover (death only) for home and car loan customers will be discontinued on the expiry of current Master Policy on July 1, 2013.

“Hence, in case of accidental death of any Home/Car loan borrower on or before July 1, 2013, claims may be lodged for the outstanding amount in the loan account subject to the terms and conditions mentioned in Master Policy,” SBI said.

The bank, however, did not mention the reasons for scrapping the complimentary cover.

SBI said that its home and car loan borrowers, who do not have any insurance cover for their loan liabilities, may opt for the policies being offered by SBI’s insurance venture.

Currently, SBI General Insurance Company Ltd is offering an accident insurance cover of Rs 4 lakh for SBI’s savings bank account holders for an annual premium of Rs 100.

Earlier this year, SBI had said it provided personal accident cover to over 7 million of its account holders across the country in association with SBI General Insurance.

SBI General Insurance Company is a joint venture between the State Bank of India and Australia’s leading general insurance provider Insurance Australia Group.

Moody’s lowers SBI’s rating as bad loans mount

http://www.thehindubusinessline.com/industry-and-economy/banking/moodys-lowers-sbis-rating-as-bad-loans-mount/article4452637.ece

State Bank of India’s baseline credit assessment has been lowered a notch by credit rating agency Moody’s Investors Service, reflecting its relatively high level of bad loans.

Moody’s has adjusted SBI’s mapping to a baseline credit assessment (BCA) of ‘ba1’ (speculative grade rating) from ‘baa3’ (investment grade rating) previously on the long-term scale.

BCAs are opinions of the intrinsic — or standalone — financial strength of issuers subject to extraordinary government support, which can include banks, sub-sovereigns and government-related corporate issuers.

The lowering of SBI's BCA reflects its relatively high level of bad loans, which are unlikely to be managed down quickly, said the agency.

The new BCA also reflects the bank’s relatively weaker ability to sustain any further deterioration in the economic environment relative to its similarly-rated peers globally.

DEPOSIT RATING UNCHANGED

Due to SBI’s systemic importance, Moody's has left unchanged the global local currency deposit rating and senior unsecured debt rating at ‘Baa2’ (investment grade rating), said the agency in a statement. The outlook on all SBI’s ratings is stable.

The deterioration in asset quality witnessed over the last 18 months increases the bank’s risk profile, cautioned Moody’s.

The agency pointed to a rise in impaired loans, including re-structured loans, and a smaller cushion to absorb losses due to low-provision coverage and lower Tier-1 capital relative to other large banks in emerging markets.

LOAN-LOSS RESERVES

Furthermore, SBI's shock-absorbing buffers are also not as robust as those of its peers. Its loan-loss reserves of 61 per cent of gross non-performing loans or less than 45 per cent of impaired loans are modest when compared globally.

Lending rates likely to come down: SBI

http://businesstoday.intoday.in/story/rbi-policy-review-lending-rate-sbi/1/191929.html

Borrowers could see better days ahead as banks are expected to cut lending rates following the RBI's decision to cut short term lending rate as well as unlocking Rs 18,000 crore by slashing cash reserve ratio (CRR) by 0.25 per cent.

Soon after the Reserve Bank unveiled its mid-quarter review of the monetary policy, several bankers hinted that they may consider rate cut in their ALCO (Asset Liability Committee) meeting.

RBI Governor D Subbarao in the third quarter monetary policy review surprised the market by cutting short-term lending rate called repo by 0.25 per cent to 7.75 per cent and Cash Reserve Ratio (CRR) by similar margin to 4 per cent, releasing Rs 18,000 crore primary liquidity into the system.

Commenting on RBI's action, SBI Managing Director A Krishna Kumar said "a rate cut is likely. Rates on advances and deposits could come down simultaneously. The RBI's action is positive".

Kingfisher should infuse Rs 2,000 crore for revival: SBI chief

http://www.thehindubusinessline.com/industry-and-economy/banking/kingfisher-should-infuse-rs-2000-crore-for-revival-sbi-chief/article4332672.ece

Kingfisher Airlines needs to invest at least Rs 2,000 crore to restart its operations, said one of its lender SBI’s Chairman Pratip Chaudhuri.

SBI is the lead banker in the 17-lender consortium that extended Rs 7,000 crore loans to the now grounded Kingfisher Airlines. The state-run bank has an exposure of Rs 1,500 crore to the carrier. The debt has not been serviced since January, 2012.

To a question, Chaudhuri also said right now SBI is not contemplating any legal action against the carrier as the door for negotiations is still open.

“In order to restart operations, Kingfisher Airlines needs to infuse at least Rs 2,000 crore as capital. We are still holding talks with the company and following up also,” Chaudhuri told reporters here.

Chaudhuri said the bank was holding talks with the carrier every week.

If necessary, some buildings and non-core assets might be disposed, he said.

Kingfisher is saddled with mounting losses and debts. It has been grounded since October 1 following strike by pilots over non-payment of salaries. The airline’s licence has also been temporarily suspended and aviation regulator DGCA has told the airline that it will be restored only when it submits a revival plan.

As per the revival plan submitted to DGCA last year, Kingfisher had said it would require about Rs 652 crore over the next 12 months for running its operations.

State Bank of India rules out rights issue

http://www.thehindubusinessline.com/industry-and-economy/banking/state-bank-of-india-rules-out-rights-issue/article4282871.ece

State Bank of India (SBI) is likely to get a capital infusion of about Rs 3,000 crore from the Centre by March-end, Chairman Pratip Chaudhuri has said.

This capital infusion would not come through a rights issue but in the form of a preferential allotment of shares to the Centre, Chaudhuri said here on Monday.

He made it clear that the bank had not sought any capital and that it was the Government that had indicated infusion of Rs 3,000 crore.

“This (capital infusion by the Government) should happen by March 31,” Chaudhuri said

The capital infusion will be part of the Rs 12,000 crore that the Government intends to pump in various banks this month. The Cabinet may consider capital-infusion proposals of banks this week.

Last fiscal, the Centre had infused Rs 7,900 crore in SBI, taking the Government holding to 61.58 per cent from 59.4 per cent .

On expectations from the upcoming monetary policy review, Chaudhuri said he expected a 50-100 basis-point cut in the cash reserve ratio and a 50 basis-point cut in the repo rate.

In a first, SBI takes its officers' body to court

http://www.business-standard.com/india/news/infirst-sbi-takes-its-officers-body-to-court/495844/

For the first time in its 200-year history, State Bank of India has taken its officers’ association to court for resorting to a work-to-rule agitation and demonstrations in September that hit the business of the country’s largest bank.

In its interim injunction, the Bombay High Court on December 3 restrained the association from holding demonstrations, hunger strikes and relay fasts at the bank’s headquarters and branches until further orders.

The trigger for the agitation by the officers’ association was the SBI chairman’s August statement about his plan to introduce seven-day banking to meet the challenges of growing competition.

Though the members of the association did not go on strike, they protested through demonstrations and a call to officers not to cooperate with the proposed changes by the management.

While granting interim injunction, judge S J Kathawalla said the association had the liberty to write to the SBI management to refer disputes to a mediator. SBI, the order said, could refer the matter to a senior advocate specialising in labour matters for mediation.

The court will take up the matter again on Tuesday (December 18).

The officers’ association is in the process of filing a reply to the SBI petition. The association’s general-secretary, D S Rishab Das, declined to respond to queries on the issue.

The SBI brass has been in talks with officers’ representatives on service conditions, including working hours. SBI officials maintain an agreement signed in 2003 provides flexibility for changing the banking hours. “Seven-day banking does not mean the bank would ask employees to work on all seven days,” an official said.

The SBI chairman and top officials held negotiations with the office-bearer of the association on October 4 but the talks did not yield fruit. After officers in some circles held demonstrations on November 30, the management moved court for action. An office-bearer said the move for seven-day banking was at odds with unions fighting for introducing a five-day week for bank employees.

Meanwhile, SBI has sought an explanation from the association for allegedly instigating officers to protest against the management. It also issued chargesheets and showcause notices to some leaders. Some of these leaders have filed writ petitions, while others are in the process of filing petitions in high courts.

Govt may infuse Rs 4,000-cr capital into SBI this fiscal

http://www.thehindubusinessline.com/industry-and-economy/banking/govt-may-infuse-rs-4000cr-capital-into-sbi-this-fiscal/article4166894.ece

The Government is expected to infuse Rs 4,000 crore into State Bank of India this fiscal. This will boost the bank’s capital adequacy ratio to over 13 per cent, according to a top bank official.

“The mode (of infusing capital) is being discussed and we have given various options. It is the government’s call to decide on how to infuse that equity,” said Diwakar Gupta, Managing Director, SBI.

The country’s largest bank’s has been awaiting the Government’s nod for the rights issue for more than two years.

When asked if the rights issue would be appropriate in the current volatile market conditions, Gupta emphasised that issue size is only Rs 4,000 crore. On a rights basis, it would work out to about 1 share for every 19 or 20 shares.

“So, it is a very small issue…But the rights issue is a very fair way of offering capital. There are pros and cons of every mode (of capital raising) and that is being evaluated,” Gupta said.

The Rs 4,000-crore capital infusion is adequate for the bank and will take its capital base above 13 per cent, Gupta added.

As on September 30, 2012, SBI’s capital adequacy ratio stood at 12.63 per cent, against 11.40 per cent in the year-ago period. CAR is a key indicator of a bank’s financial strength expressed as a ratio of capital to risk-weighted assets.

The government earlier this week had said it would finalise the capital infusion plans for public sector banks this week. The budget has earmarked nearly Rs 15,800 crore for shoring up the core capital base of the state-run lenders hit by bad loans and poor asset growth.

On the revival of the economic conditions, Gupta said the effect of the reforms announced will take time to impact the real economy. “We see some revival in 2-3 months,” Gupta added.

We’re yet to hear from Kingfisher: SBI chief

http://www.thehindubusinessline.com/industry-and-economy/banking/were-yet-to-hear-from-kingfisher-sbi-chief/article4130354.ece

With barely a week left ahead of the November 30 deadline set by bankers to pump in fresh capital into the grounded Kingfisher Airlines, State Bank of India (SBI) today said it has not heard from the company so far.

“Kingfisher as a company has not given us any information or visibility on capital infusion,” SBI chairman Pratip Chaudhuri told reporters on the sidelines of the annual two-day banking summit `Bancon 2012’ here.

In an obvious reference to the United Spirit—Diageo deal earlier this month, he said there are reports relating to the group company, but that cannot be a basis for taking a view on the airline.

Late last month, SBI set a November 30 deadline for Kingfisher to bring in fresh capital and produce a comprehensive revival plan.

But the airline chairman Vijay Mallya said later that he had no knowledge about any such deadline.

On the day United Spirits sold majority stake to the English liquor major Diageo for over Rs 11,100 crore, Mallya had hinted that the proceeds would not be diverted to the troubled airline, saying “both businesses will be dealt with separately“.

The SBI chairman had earlier this week categorically ruled out fresh funds to the airline, which has not been servicing its Rs 7,000-crore working capital and long-term loans taken from 17 banks since January this year.

Banks have been demanding that Kingfisher management pump in at least $1 billion of fresh equity.

SBI net profit jumps 30% to Rs 3,658 cr

http://www.thehindubusinessline.com/industry-and-economy/banking/sbi-net-profit-jumps-30-to-rs-3658-cr/article4080667.ece

State Bank of India reported a 30 per cent increase in net profit at Rs 3,658 crore in the July-September quarter as against Rs 2,810 crore in the year-ago period.

Though the bank reported healthy profitability, its stock was down 3.59 per cent or Rs 80.55 at Rs 2,163 at about 1.30 pm on the BSE. The stock dragged the BSE Sensex down nearly 125 points in afternoon trade today.

Bad loans continued to be a concern with gross NPAs at Rs 49,202 crore (as at September-end 2012) against Rs 33,946 crore as at September-end 2011.

The SBI stock came under pressure after its Q2 numbers showed that its operating profit was marginally down in the second quarter of this year compared to the corresponding quarter last year though the income earned registered significant growth.

Both its gross and net NPAs in the second quarter of this fiscal were higher than in the same quarter last year.

According to SBI’s unaudited results for the second quarter this year, it had earned a total income of Rs 32,953.47 crore compared to Rs 29,394.32 crore in the same quarter last year. The total expenditure was Rs 25,599.82 crore (Rs 21,920.01 crore) in the second quarter of last year. Its operating profit before provisions and contingencies was Rs 7,353.65 crore compared with Rs 7,474.31 crore in Q 2 last fiscal.

Kingfisher will not fly if doesn’t get capital by Nov 30: SBI

http://www.thehindubusinessline.com/industry-and-economy/banking/kingfisher-will-not-fly-if-doesnt-get-capital-by-nov-30-sbi/article4070942.ece

State Bank of India (SBI), the lead bank to ailing Kingfisher Airlines, on Tuesday cautioned the carrier that it “will not fly” if it fails to bring in fresh capital by November 30.

“Banks’ consortium has done everything possible to make the company (Kingfisher) work. Only the company is not working... The management has to get capital. We have given time till November 30 that they should get capital otherwise the company will not fly...,” SBI Chairman Pratip Chaudhuri told PTI.

He further said the airline would not be able to get investors if it is not flying.

Chaudhuri said the consortium of 17 banks have been meeting regularly to help the cash-strapped airline.

SBI has over Rs 1,500-crore of exposure to Kingfisher.

The bank chairman said the consortium, led by SBI, has made available a total Rs 7,000 crore to Kingfisher to help it keep flying.

The Directorate General of Civil Aviation (DGCA), however, recently suspended the flying licence of Kingfisher following the airline’s failure to come up with a viable plan of financial and operational revival.

Meanwhile, Kingfisher said it is working on a comprehensive revival plan which will be given to aviation regulator, DGCA, in the next few weeks.

“We are working on a comprehensive plan which will address the interests of all stakeholders and this will be submitted to DGCA,” an airline spokesperson said when asked about their plans to get the suspension of its scheduled operator’s permit (SOP), valid till this year-end, revoked.

Kingfisher is burdened with a loss of Rs 8,000 crore and a debt burden of another over Rs 7,524 crore, a large part of that has not been serviced since January.

CRR is a waste for economy: SBI Chief

http://www.thehindubusinessline.com/industry-and-economy/banking/crr-is-a-waste-for-economy-sbi-chief/article4047654.ece

SBI Chairman Pratip Chaudhuri today once again expressed his open disagreement with the RBI on CRR saying it is a “waste” for the economy and successive interest rate cuts by central bank have failed to contain inflation.

“Of course, I am an incurable optimist and I had expected a 50 basis points CRR cut. I still hold that CRR is a waste for the economy,” he said after RBI Governor D Subbarao unveiled the half-year review of the credit policy which had a 0.25 per cent cut in CRR.

“But anyway it (CRR) has been cut by 25 basis points and governor had his own reasons and his own compulsions to see the inflation down,” he said.

This is not the first time the head of the largest bank has had a run-in with the RBI. Chaudhuri had raised the issue of CRR in August too, but was vehemently countered by RBI Deputy Governor K C Chakrabarty.

“If the SBI Chairman is not able to do business as per our regulatory environment, he has to find some other place,” Chakrabarty had said.

Taking a jibe at RBI’s attempts at reining in inflation by effecting 10 interest rate hikes, Chaudhuri said it did yield desired result.

“But I do not think that the 10 rate increases that happened have not helped in lowering the inflation because today’s inflation is largely cost push. It is not so much of demand pull,” he said. “So to try to address that the rate of interest as an instrument may not be very effective,” he said.

SBI to acquire 50,000 PoS machines

http://www.thehindubusinessline.com/industry-and-economy/banking/sbi-to-acquire-50000-pos-machines/article3994011.ece

State Bank of India group plans to acquire 50,000 Point-of-Sale (PoS) machines for deployment over the next 18 months.

These are being done as part of its plans to upgrade its technological infrastructure and improve the speed of customer handling at its branches as well as merchant locations.

SBI has over 14,100 branches while its five associate banks have over 4,500 branches. The group has about 28,000 ATMs.

At present, the bank and its associates have a Single Window Operator counter called Green Channel at their branches. Under this facility, it is possible to withdraw, deposit or remit amount up to Rs 40,000.

The SBI group plans to enlarge the type of transactions at these Green Channel counters through deploying these terminals.

Among other things, the transactions would include bill payment, bus/train/air ticketing, gold coin sale, mobile top-up, merchant acquiring business activity, etc.

Currently about 35 per cent of the transactions done by SBI’s 200 million customers is through alternate channels (non-branch) such as internet, mobile, ATMs, PoS terminals etc.

‘Will do whatever appropriate’ to recover Kingfisher loan: SBI

http://www.thehindubusinessline.com/industry-and-economy/banking/article3988496.ece

State Bank of India on Thursday said it will do whatever appropriate to recover the loans that banks have made to the beleaguered Kingfisher Airlines (KFA).

The cash-strapped airline owes about Rs 7,000 crore to a consortium of 17 banks, including SBI, IDBI Bank, Bank of Baroda and Bank of India.

SBI Managing Director S. Visvanathan said: “Our effort is to recover the maximum from the company by all possible methods. There are many methods by which we (banks) recover money.

“We let the company run and they give us the money back. We wind up the company, sell the assets and get the money back. We sell the company itself and get the money back. We will do whatever is appropriate in the best interest of the group of banks.”

Pointing out that SBI had fully provided for its exposure of about Rs 1,500 crore to KFA, the top SBI official said “(from now on) we are only going to look to the upside, if there is any.”

Banks are looking at KFA from all aspects to ensure that the money that has been lent to it is recovered.

The current lock-out at the airline due to strike by pilots and engineers is a concern, said Visvanathan. He added that the revival plan (to resume operations) will be shared by KFA in the third or fourth week of this month.