Recently State Bank of India (SBI), announced new home loan scheme in which it is offering 8% interest rate, after this since February SBI counters across country are receiving innumerable home loan applications. As per bank sources there is acute shortage of manpower in the bank’s loan processing centers due to huge number of loan applications are pending with the bank creating major dissatisfaction among the customers.
For instance in SBI’s Kolkata branch around 1000 home loan applications are pending for more than a fortnight even though bank had promised to sanction loan to the valid proposals with in a week.
The Bengal circle SBI officials have promised to take corrective measures to clear the pending application. For beginners SBI has planned to expand its loan processing desk to tide over the increasing flow of applications.
SBI chief general manager in Kolkata Jayanta Kumar Sinha told, “There are cases where customers had to wait longer than usual. This is primarily for two reasons. We took a long time to process a loan when we detected faults in the application. And there was also a gap in manpower”.
Mr Sinha said, “We plan to expand the loan processing desk as we expect the flow of application to double this year to 20,000”.
SBI officials, pointed out although the situation to some extent in all circles is similar, the problem is severe in Kolkata, as the demand of home loan in the city is high. Mr Sinha told, “Last year, we had received nearly 10,500 personal loan applications in Kolkata alone totalling Rs 688 crore. In terms of the number of applications, Kolkata was the highest in the country”. The bank is receiving around 60% of the home loan applications.
There are around 120 staffers in SBI’s retail asset central processing centre (RECPC) in Kolkata, which exclusively processes and sanctions retail loans received from the city people. But this appears to be inadequate in comparison to the flow of loan applications bank is receiving every day. There have been some cases for which bank have taken even more than 45-50 days for sanctioning home loans.
The bank sources say around 100 retail loan applications are received out of which approximately 60 are home loan applications.
Another senior SBI official acknowledges, “We have now geared up to process 100 applications every day. But there is a backlog of 840 applications”. On the other hand according to some sources working with the bank stated that over 1,200 loan cases are pending. But no official confirmation has been given by the bank about this.
SBI officials informed the high-value applications worth Rs 1 crore are given the priority and cleared first. There are few cases where valid applications were cleared after 45 days which were related to projects built by private promoters and where the ticket size is less than Rs 20,000.
Home loan processing is, more unwieldy, in comparison to education loans or car loans. “Home loans are offered for a longer period and so the processing job is a bit rigorous. We need to follow know your customer (KYC) guidelines on borrowers, for vendors and even on guarantors.”
Most of the banks do KYC verification by their own but SBI, out sources the legal verification to its 30-odd empanelled lawyers.
Wednesday, September 2, 2009
Friday, July 31, 2009
SBI announce cut in deposit rates by 25-50 bps
India’s largest lender, State Bank of India (SBI) has announced cut in interest rates on term deposits by 25-50 basis points (bps). The revised rates will come into effect from Monday. The cut has been done across various maturities.
Since April SBI has reduced its interest rates five times bringing the cumulative reduction to about 175 bps. The revised rates will be applicable to fresh deposits and the term deposits that come up for renewal. The maximum rate of 7.75 per cent is being offered on deposits for 8 to 10 years.
As per revised rates on one year to less than two years it will be 6.5% instead of 7% offered earlier. The Chief financial officer S Ranjan told the new cut and renewals of old term deposits at lower will together bring down the cost of deposits by 6-7 bps.
The rate for deposits of one year to less than two years will be 6.5 per cent as against 7 per cent offered earlier. Today’s cut along with renewals of old term deposits at lower rates were expected to bring down the cost of deposits by 6-7 bps, said Chief Financial Officer S Ranjan.
In 2008-09 SBI’s cost of deposit was 6.30 per cent, which is higher from 5.59 per cent for 2007-08. In the last two-three years bank has been under pressure because of high-cost deposits it had constricted in order to fund credit growth therefore to protect its net interest margin (NIM) it had opted for aggressive reduction in its deposit rate.
In October 2008 bank had offered 10.5 per cent annual interest rate on 1,000-day deposits to retail depositors with which bank earned Rs 1,000 crore daily. On the other hand its NIM reduced to 2.93 per cent in 2008-09 from 3.07 per cent in 2007-08.
There has been reduction of up to 300 bps in deposit rates since December last year; in comparison to this the benchmark prime lending rate has been reduced by 150 bps. The bankers say although they find little room for an aggressive deposit rate cut but in the second quarter it will remain subdued. Dhanalakshmi Bank CFO Bipin Kabra pointed out as now the banks do not have any liquidity problem therefore banks will go for cut in their costs.
However the Andhra Bank Chairman and Managing Director K R Kamath say at this point banks cannot find any room for further cut in deposits rates.
Since April SBI has reduced its interest rates five times bringing the cumulative reduction to about 175 bps. The revised rates will be applicable to fresh deposits and the term deposits that come up for renewal. The maximum rate of 7.75 per cent is being offered on deposits for 8 to 10 years.
As per revised rates on one year to less than two years it will be 6.5% instead of 7% offered earlier. The Chief financial officer S Ranjan told the new cut and renewals of old term deposits at lower will together bring down the cost of deposits by 6-7 bps.
The rate for deposits of one year to less than two years will be 6.5 per cent as against 7 per cent offered earlier. Today’s cut along with renewals of old term deposits at lower rates were expected to bring down the cost of deposits by 6-7 bps, said Chief Financial Officer S Ranjan.
In 2008-09 SBI’s cost of deposit was 6.30 per cent, which is higher from 5.59 per cent for 2007-08. In the last two-three years bank has been under pressure because of high-cost deposits it had constricted in order to fund credit growth therefore to protect its net interest margin (NIM) it had opted for aggressive reduction in its deposit rate.
In October 2008 bank had offered 10.5 per cent annual interest rate on 1,000-day deposits to retail depositors with which bank earned Rs 1,000 crore daily. On the other hand its NIM reduced to 2.93 per cent in 2008-09 from 3.07 per cent in 2007-08.
There has been reduction of up to 300 bps in deposit rates since December last year; in comparison to this the benchmark prime lending rate has been reduced by 150 bps. The bankers say although they find little room for an aggressive deposit rate cut but in the second quarter it will remain subdued. Dhanalakshmi Bank CFO Bipin Kabra pointed out as now the banks do not have any liquidity problem therefore banks will go for cut in their costs.
However the Andhra Bank Chairman and Managing Director K R Kamath say at this point banks cannot find any room for further cut in deposits rates.
Monday, July 27, 2009
SBI Davanagere main branch organize 2-day car, home loan mela
Country’s largest lender the State Bank of India (SBI), Davanagere main branch in association with its four other branches including Harihar is organizing a two-day `Home and Car Loan Mela' at Abhinava Renuka Mandir, P B Road, in Davanagere. The mela will be held for two days July 25 and 26 between 10.30 am to 5.30 pm.
Speaking at a press conference, chief manager of Davanagere branch H Ranganath informed, in this mela SBI is looking forward to do a business of at least Rs 15 crore. He added in earlier mela held in December bank had done a business of Rs 8 crore. In the mela loans will be sanctioned on the spot to the eligible customers. Ranganath said people coming to mela should carry any photo identity card, residential address proof, bank account statement for 6 months, salary certificate (for house loan) and a quotation for car loan.
The bank will also give one month time (till September 30) to the eligible customers to submit other documents, he said. He informed the bank will charge 8% interest rate for the first year, followed by 9% for the next two years and after that it will be charge floating rate according to the existing rates. He said the customers who take loan in the mela no processing fee will be charged from them.
In the press conference branch managers T Sidda Naik, Ashok Patvarkher, along with deputy managers Devendra Bellary and K Umapathy were present.
Speaking at a press conference, chief manager of Davanagere branch H Ranganath informed, in this mela SBI is looking forward to do a business of at least Rs 15 crore. He added in earlier mela held in December bank had done a business of Rs 8 crore. In the mela loans will be sanctioned on the spot to the eligible customers. Ranganath said people coming to mela should carry any photo identity card, residential address proof, bank account statement for 6 months, salary certificate (for house loan) and a quotation for car loan.
The bank will also give one month time (till September 30) to the eligible customers to submit other documents, he said. He informed the bank will charge 8% interest rate for the first year, followed by 9% for the next two years and after that it will be charge floating rate according to the existing rates. He said the customers who take loan in the mela no processing fee will be charged from them.
In the press conference branch managers T Sidda Naik, Ashok Patvarkher, along with deputy managers Devendra Bellary and K Umapathy were present.
Tuesday, July 7, 2009
Center advice SBI to have talks with bank unions on consolidation proposal
Last month the boards of SBI and the State Bank of Indore had passed resolutions approving the consolidation proposal. But the Center has directed the SBI not to follow the Reserve Bank of India the issue of acquirement of State Bank of Indore.
Now the Government has asked the SBI management to have talks with bank unions and try to convince them about the merits of the consolidation proposal.
Earlier SBI had approached the RBI and the Government for their approval of this transaction. An RBI may take some time to give approval because it seems that the central bank has some uncertainties over the method in which the SBI operations was carried out.
However the unions of all the six associate banks had called for protest strike on July 6 with regard to approval of consolidation proposal by boards of SBI and the State Bank of Indore.
The advice for meeting between the unions and the SBI management was given by the Deputy Chief Labour Commissioner, Mr N. K. Prasad, at a conciliatory meeting with the representatives of six bank unions, SBI management and senior management of all six associate banks of SBI.
Mr C. H. Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA), told Business Line, “Since the SBI management has now agreed to discuss the State Bank of Indore merger proposal with the bank unions, we have decided to defer the strike call given for July 6 in all six associate banks”.
A number of bank unions are against the consolidation proposal, as the SBI senior management had not taken the employees into confidence before taking the decision on the consolidation.
For now, at the meeting the senior management of the other five associate banks — State Bank of Mysore, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala and State Bank of Travancore — had clearly informed that they had no proposal for merger with SBI.
The proposed acquiring of State Bank of Indore by SBI will be the first consolidation deal in the banking industry after the Finance Minister, Mr Pranab Mukherjee, last month had emphasized that public sector banks must look at consolidation as a serious option. He had said that consolidation is important in order to reduce risk to financial stability and also to face competition.
The Finance Minister had also clarified that the proposal for consolidation in the banking sector had come from the management themselves and that the Government will only play a supportive role as a common shareholder.
Now the Government has asked the SBI management to have talks with bank unions and try to convince them about the merits of the consolidation proposal.
Earlier SBI had approached the RBI and the Government for their approval of this transaction. An RBI may take some time to give approval because it seems that the central bank has some uncertainties over the method in which the SBI operations was carried out.
However the unions of all the six associate banks had called for protest strike on July 6 with regard to approval of consolidation proposal by boards of SBI and the State Bank of Indore.
The advice for meeting between the unions and the SBI management was given by the Deputy Chief Labour Commissioner, Mr N. K. Prasad, at a conciliatory meeting with the representatives of six bank unions, SBI management and senior management of all six associate banks of SBI.
Mr C. H. Venkatachalam, General Secretary, All India Bank Employees Association (AIBEA), told Business Line, “Since the SBI management has now agreed to discuss the State Bank of Indore merger proposal with the bank unions, we have decided to defer the strike call given for July 6 in all six associate banks”.
A number of bank unions are against the consolidation proposal, as the SBI senior management had not taken the employees into confidence before taking the decision on the consolidation.
For now, at the meeting the senior management of the other five associate banks — State Bank of Mysore, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala and State Bank of Travancore — had clearly informed that they had no proposal for merger with SBI.
The proposed acquiring of State Bank of Indore by SBI will be the first consolidation deal in the banking industry after the Finance Minister, Mr Pranab Mukherjee, last month had emphasized that public sector banks must look at consolidation as a serious option. He had said that consolidation is important in order to reduce risk to financial stability and also to face competition.
The Finance Minister had also clarified that the proposal for consolidation in the banking sector had come from the management themselves and that the Government will only play a supportive role as a common shareholder.
Thursday, July 2, 2009
SBI offers inventory funding for dealers at lower interest rate
On Monday State Bank of India (SBI) country’s largest lender announced from July 1 it will introduce a 'Dealers Accounts Drive' which will be in operation for over six-months. Under this new account bank will offer inventory funding for dealers at reduced interest rate.
SBI's CGM-SME, Mr B S Bhasin, explained, “The interest advantage to dealers would be to the extent of 0.50 per cent”.
Bhasin informed the new reduced interest rate will be in addition to the recent 0.50 per cent reduction in the bank's prime lending rate. In addition to this during campaign period dealers who take finance from the bank will also be get the benefit of full waiver of mortgage charges.
Mr Bhasin pointed out, “Normally, dealers who avail credit facilities from the bank offer some collateral security in the form of lending property. When such collateral security is offered as a part of the services, banks charge a fee for creation of such security. SBI has waived these mortgages for dealer accounts during the campaign period”.
Besides this, SBI will also offer a wide range of deposit and transaction products to dealers like roaming current account.
He added, “With over 11,800 branches, SBI offers access to dealers' current accounts from anywhere across the country”.
SBI's CGM-SME, Mr B S Bhasin, explained, “The interest advantage to dealers would be to the extent of 0.50 per cent”.
Bhasin informed the new reduced interest rate will be in addition to the recent 0.50 per cent reduction in the bank's prime lending rate. In addition to this during campaign period dealers who take finance from the bank will also be get the benefit of full waiver of mortgage charges.
Mr Bhasin pointed out, “Normally, dealers who avail credit facilities from the bank offer some collateral security in the form of lending property. When such collateral security is offered as a part of the services, banks charge a fee for creation of such security. SBI has waived these mortgages for dealer accounts during the campaign period”.
Besides this, SBI will also offer a wide range of deposit and transaction products to dealers like roaming current account.
He added, “With over 11,800 branches, SBI offers access to dealers' current accounts from anywhere across the country”.
Wednesday, July 1, 2009
Banks currency chests short of coins, RBI says demand is more than supply
Banks handling currency chests are facing shortage of coins. The State Bank of India (SBI) and Bank of Baroda (BoB) serving other banks have also confirmed that there has been short supply of coins from the Reserve bank of India (RBI) and for several months the coins have not been made available to the banks.
RBI deputy general manager K Mohan while confirming said that there is a short supply of as required by the different currency chests handled by different banks. The officer stated banks handling currency chests to supply coins in different regions are required to make a periodical serrate with their office, which takes care of 187 currency chests in 11 districts in western Maharashtra and Goa.
He informed, "We distribute coins equitably," he pointed out, but maintained that the demand was more than the supply. He explained that the RBI supplies coins to its currency chests when it obtains a remittance from the mint. "We depend on the government of India's mint," he said.
However the Margao branch of SBI had received coins of one and two rupees denomination some what in February this year, while BoB got supplies around October-November last year. It is not only the big time gap but also the volume supplied is also far less.
Although around 500 bags would have satisfied the need for coins in the denominations from Rs one to five, but the supply was around 60 bags each for the one and two rupee coins. BoB provide supply to several banks like the Union Bank of India, Dena Bank, Syndicate Bank, Bank of Maharashtra and Corporation Bank.
One of the customer, Vivek a restaurant owner confirmed that when he sent one of his employees to BoB to get coins worth Rs 1000, he returned empty handed. He added, "This time, I shall go to the bank myself and convince them to part with half the number of coins at least".
In the short supply of coins beggars, though, have proved helpful. As after day’s collection several beggars roaming around the city head for eateries with their coins.
A Syndicate Bank source pointed out that the bank depends on the BoB for its coin supply, but in the absence of proper supplies the bank and its clients are hard hit.
The Syndicate Bank, handles the currency chest in Karnataka, publicizes through newspaper advertisements the venue, time and date when the bank van would make available the currency. The source also added that at the time of festivals and weekly markets, the bank's Hubli branch makes available coins to those who require it for trading purposes.
In spite of the fact that chocolates, blades at grocery stores, coupons at restaurants and Maggie cubes are being used to settle bills in the absence of coins, and this works out to be a profitable venture for businesses. The South Goa Hotel and Restaurant Owners' Association has started a campaign asking people to write to the RBI office in Mumbai (department of currency management) about the problem.
RBI deputy general manager K Mohan while confirming said that there is a short supply of as required by the different currency chests handled by different banks. The officer stated banks handling currency chests to supply coins in different regions are required to make a periodical serrate with their office, which takes care of 187 currency chests in 11 districts in western Maharashtra and Goa.
He informed, "We distribute coins equitably," he pointed out, but maintained that the demand was more than the supply. He explained that the RBI supplies coins to its currency chests when it obtains a remittance from the mint. "We depend on the government of India's mint," he said.
However the Margao branch of SBI had received coins of one and two rupees denomination some what in February this year, while BoB got supplies around October-November last year. It is not only the big time gap but also the volume supplied is also far less.
Although around 500 bags would have satisfied the need for coins in the denominations from Rs one to five, but the supply was around 60 bags each for the one and two rupee coins. BoB provide supply to several banks like the Union Bank of India, Dena Bank, Syndicate Bank, Bank of Maharashtra and Corporation Bank.
One of the customer, Vivek a restaurant owner confirmed that when he sent one of his employees to BoB to get coins worth Rs 1000, he returned empty handed. He added, "This time, I shall go to the bank myself and convince them to part with half the number of coins at least".
In the short supply of coins beggars, though, have proved helpful. As after day’s collection several beggars roaming around the city head for eateries with their coins.
A Syndicate Bank source pointed out that the bank depends on the BoB for its coin supply, but in the absence of proper supplies the bank and its clients are hard hit.
The Syndicate Bank, handles the currency chest in Karnataka, publicizes through newspaper advertisements the venue, time and date when the bank van would make available the currency. The source also added that at the time of festivals and weekly markets, the bank's Hubli branch makes available coins to those who require it for trading purposes.
In spite of the fact that chocolates, blades at grocery stores, coupons at restaurants and Maggie cubes are being used to settle bills in the absence of coins, and this works out to be a profitable venture for businesses. The South Goa Hotel and Restaurant Owners' Association has started a campaign asking people to write to the RBI office in Mumbai (department of currency management) about the problem.
Tuesday, June 16, 2009
SBI aims to be among top ten banks in the world
State Bank of India (SBI), country's largest bank, is planning to make its position among top ten banks in the world in the next three to five years, pointed out SBI chairman O P Bhatt during his maiden visit to Vadodara on Monday. Bhatt spoke to select chief executive officers (CEOs) of Gujarat Inc as part of CII-CEO Network series.
Bhatt told media persons, "SBI has set a high global ambition and we plan to open ten new foreign branches this financial year". The new branches will be opened in Hong Kong, Singapore and United Kingdom among other places.
He stated, "Even if one puts together market capital of 89 scheduled banks of India, it is not equivalent to that of one leading bank of China," and added that presently no Indian bank is positioned among top 50 banks of world. Bhatt while supporting for consolidation said Indian banks should grow as Indian industries are becoming global with investments outside India.
Meanwhile the Union minister of finance Pranab Mukherjee has given approval on banking industry's consolidation in a recent meeting with bankers, on the other hand the Associate Banks' Officers Association (ABOA) has opposed to the idea of merger and announced a protest strike on July 3, 2009, fearing job losses.
Bhatt, while quoting his observation on the merger of State Bank of Saurashtra with SBI, has given assurance that there will be no retrenchments. He added, "There was not even a ripple, the merger was smooth and we can do the same with other associate banks as well".
In spite of the recessionary phase, the bank has done 30,000 recruitments last year and this year too there will be 10,000 fresh recruitments.
Bhatt told media persons, "SBI has set a high global ambition and we plan to open ten new foreign branches this financial year". The new branches will be opened in Hong Kong, Singapore and United Kingdom among other places.
He stated, "Even if one puts together market capital of 89 scheduled banks of India, it is not equivalent to that of one leading bank of China," and added that presently no Indian bank is positioned among top 50 banks of world. Bhatt while supporting for consolidation said Indian banks should grow as Indian industries are becoming global with investments outside India.
Meanwhile the Union minister of finance Pranab Mukherjee has given approval on banking industry's consolidation in a recent meeting with bankers, on the other hand the Associate Banks' Officers Association (ABOA) has opposed to the idea of merger and announced a protest strike on July 3, 2009, fearing job losses.
Bhatt, while quoting his observation on the merger of State Bank of Saurashtra with SBI, has given assurance that there will be no retrenchments. He added, "There was not even a ripple, the merger was smooth and we can do the same with other associate banks as well".
In spite of the recessionary phase, the bank has done 30,000 recruitments last year and this year too there will be 10,000 fresh recruitments.
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