Public sector banks able to retain new hires better than private banks: Report

http://www.thehindubusinessline.com/industry-and-economy/banking/article3855139.ece

Management consulting firm BCG has found that, on an average, 12 per cent of the new recruits hired by public sector banks quit within the year.

This compares favourably with the corresponding figures of 22 per cent and 20 per cent for new and old private sector banks, respectively.

“Contrary to popular perception, public sector banks are not losing their fresh hires in large numbers.

“Clearly, there is an element of public sector culture and work environment that is working for the fresh hires to stay,” said BCG in its report on productivity in Indian banking.

PSBs may not be facing attrition today because relative compensation at junior levels in good.

However, the firm cautioned that as the new hires reach middle management levels, the threat of losing the best people will be very high due to compensation mismatches.

Retirements will create 1.8 lakh vacancies in public sector banks

http://www.thehindubusinessline.com/industry-and-economy/banking/article3855137.ece

The banking industry will need to hire 9-11 lakh employees over the next five years, according to a report by Boston Consulting Group.

The report, which includes a survey of about 14,000 customers, 50,000 bank employees and analysis of data obtained from about 35 banks in the country, said about half of the hiring will be due to attrition.

The banking sector is expected to grow at approximately 20 per cent over the next decade and will need major induction of talent, a significant part of which is to replace vacancies arising due to retirements in public sector banks. At the current rate of attrition, the industry will need to hire over four lakh more people.

“We will hire around 6,000 this year,” said Pratip Chaudhari, Chairman, State Bank of India.

Retirements in public sector banks will continue to increase and peak by 2017. In total, 1.8 lakh employees will retire and will be replaced. Depending upon the productivity growth, the industry will need 2.5-4.5 lakh additional people for growth in business.

Saurabh Tripathi, Partner & Director, BCG, said: “Public sector banks will have to double the current intake of employees to meet the talent needs of future.”

SBI car loan disbursals almost doubled to Rs 900 crore in August

http://businesstoday.intoday.in/story/auto-loans-doubled-in-august-sbi/1/187753.html

State Bank of India on Tuesday said its car loan disbursals almost doubled to Rs 900 crore in August, following an interest rate cut.

The disbursals jumped to Rs 900 crore from the earlier Rs 550 crore in July on the back of 0.50 per cent cut in its auto loan offering, chairman Pratip Chaudhuri said.

He said the rise in advances has been observed even as the nation's largest carmaker Maruti Suzuki's production has dipped due to internal issues.

SBI cut interest rates on auto and home loans in the first week of August, after the Reserve Bank cut the SLR (statutory liquidity requirement) holdings which was preceded by a raising of limits on export refinance.

Both the moves made additional liquidity available for the bank which the bank decided to pass on, without announcing a cut in its base rate or the minimum rate of lending. "The home loan impact will take some time to come, but car loans have gone up significantly," Chaudhuri said.

RBI asks banks to issue cheques with uniform features by September 30

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/rbi-asks-banks-to-issue-cheques-with-uniform-features-by-september-30/articleshow/16239327.cms

The Reserve Bank today directed all banks to issue cheques with uniform features conforming to Cheque Truncation System (CTS) 2010 standard by end of this month. 

The homogeneity in security features act as deterrent against frauds, and the fixed field placement specifications facilitate straight-through-processing at drawee banks' end through the use of optical or image character recognition technology, RBI said in a notification. 

Adherence to CTS-2010 standards has inherent advantages as the security features in cheque forms help the presenting banks to identify the genuineness of the drawee banks' instruments while handling them in the image based scenario, it said. 

To ensure the time-bound migration to CTS-2010 standard cheque formats, all banks are advised to arrange only "multi-city or payable at par CTS-2010 standard cheques not later than September 30, 2012," it said. 

"Arrange to withdraw the non-CTS-2010 standard cheques in circulation before December 31, 2012 by creating awareness among customers through SMS alerts, letters, display boards in branches/ATMs, log-on message in internet banking, notification on the web-site etc," it said. 

The introduction of new cheque standards 'CTS 2010' was warranted on account of several developments in the cheque clearing namely growing use of multi-city and payable-at-par cheques at any branch of a bank, increasing popularity of speed clearing for local processing of outstation cheques and implementation of grid based CTS for image-based cheque processing etc., it said.

RBI asks urban co-op banks to modify fixed deposit form

http://www.financialexpress.com/news/rbi-asks-urban-coop-banks-to-modify-fixed-deposit-form/995501/0

The Reserve Bank (RBI) has asked the urban co-operative banks to modify fixed deposit (FD) account opening form to allow pre-mature withdrawal in the event of death of one of the joint account holders without any penalty.

Under the modified norms, it would be easier for the surviving joint account holders of FD with 'either or survivor' or 'former or survivor' mandate to go in for pre-mature withdrawal of fixed deposit in the event of death of the other.

As per the notification of the Reserve Bank of India (RBI), banks will have to incorporate a clause in the FD form to give option of premature withdrawal by survivor in case of death of the other joint account holder.

It further clarified that "such premature withdrawal would not attract any penal charge".

Finance Ministry wants loss-making banks, insurers out of CCI ambit

http://www.thehindubusinessline.com/industry-and-economy/banking/article3854382.ece

The Finance Ministry has sought an exemption for mergers and acquisitions of “loss-making and failing” banks as well as insurers that are being vetted by the Competition Commission, the Corporate Affairs Ministry said today.

However, no banks have themselves sought any exemption from their mergers being reviewed by the fair-trade regulator, Minister of State in Corporate Affairs Minister RPN Singh said in reply to the Rajya Sabha.

Asked about any exemption sought for the telecom sector, Singh said the Department of Telecom (DoT) has not sought any exemption for mergers and acquisitions (M&As) in the sector from the CCI purview.

“No such communication has been received from Department of Telecommunication seeking exemption in the telecom sector.”

About the banking sector, “Department of Financial Services has approached the Ministry (of Corporate Affairs) for granting exemption to loss making and failing organisations in the insurance and banking sector from the purview of the Competition Act, 2002,” Singh said.

CCI has the powers to review and approve the M&A transactions that could have bearing on competition in the market. The Competition Act empowers it to check anti-competition practices and abuse of dominant position.

RBI asks banks to post bulk deposit rates on website

http://www.business-standard.com/india/news/rbi-asks-banks-to-post-bulk-deposit-rateswebsite/484960/

The Reserve Bank of India (RBI) has asked banks to put up bulk deposit rate on their websites, to stop banks from offering exorbitant rates to corporate depositors.

According to RBI norms, no bank can offer varying rates on the same day at different locations. According to bankers, some of the banks are offering as much as 200 basis points higher than the card rate to their corporate clients. 

Bulk deposits are corporate deposits that are generally Rs 1 crore and above with maturity of up to one year.

The central bank’s directive comes following the finance ministry’s effort to discourage banks’ rush for bulk and certificates of deposit, which are of high cost and adversely impact margins. The ministry had asked banks to cut down their proportion of high cost deposits (bulk deposit and certificates of deposit) to 15 per cent, with a cap of 10 per cent on bulk deposits.

About 25-30 per cent of the deposits of public sector banks are bulk in nature. The central bank and the finance ministry’s concern over exorbitant bulk deposit rate comes on the back of banks scrambling for funds during the end of the previous financial year.

In March, bulk deposit rate crossed 12 per cent, higher by 100 basis points in a month. As a result, deposit growth in March swelled by Rs 3 lakh crore — one third of the deposits garnered in 2011-12.

The finance ministry and RBI had also asked the public sector banks not to bid for bulk deposits.