State Bank of India, India’s largest lender in a tie up with Insurance Australia Group (IAG) has set up a joint venture, SBI General Insurance. Recently the duo completed the initiated creative pitch process following the company has appointed two JWT India and Interpub to its list. The amount size is in the range of Rs 8-10 crore.
The SBI General Insurance officials declined to comment on the development and the agency officials were also not available for comments. Sources closely related to the development have confirmed the two agencies are already part of the SBI General Insurance list.
In the joint venture SBI holds a major stake of 74 per cent and IAG holds the remaining stake of 26 per cent. IAG is an international general insurance group carrying out operations in Australia, New Zealand, Thailand, Malaysia, China and the UK through various brands.
Thus SBI entry into the general insurance segment with a bunch of financial products has completed the financial services areas. However bank, through its subsidiary SBI Life Insurance Company of India is already offering life insurance products.
Monday, November 23, 2009
Friday, November 6, 2009
Banks union threatens to go on strike in protest to State Bank of Indore- SBI merger
Although the merger of State Bank of Indore with State Bank of India (SBI) had got green signal but the All India Bank Employees’ Association (AIBEA) is against this merger, thus in protest of this merger AIBEA has proposed to go on a one-day strike by November-end. According to union the merger is a “violation” against the agreement, and if the merger is pursued then it might think of going on an indefinite strike.
The union took decision to go on strike after SBI submitted a copy of ‘Scheme of Acquisition of State Bank of Indore by SBI’ to the Bombay Stock Exchange.
CH Venkatachalam, general secretary, AIBEA told Business Standard, earlier in June, this year the labour minister had held meeting with the bank management in which it was told not to go ahead with the merger, both the management and the union representatives agreed on this.
Venkatachalam added, “It’s clearly a violation by the SBI management, we have decided to go on a one-day strike by the end of this month against the decision”.
The union representatives will be meeting on Thursday or Friday to finalize the date of strike.
“I am not ruling out an indefinite strike,” he added.
He informed the bank (State Bank of Indore) is doing good business, even better than SBI, so why to go for merger? As State Bank of Indore provides support to the regional development projects, so, Venkatachalam feels if the bank is merged, then it will loose capability of supporting regional development.
He told comparatively the business per employee at State Bank of Indore is Rs 7.01 crore, while SBI figures stand to Rs 5.56 crore only. Likewise the advances per employee for State Bank of Indore accounts to Rs 3.43 crore as against Rs 2.63 crore for SBI, whereas deposits per employee of the former figures to Rs 4.50 crore against Rs 3.40 crore for the latter, and also in the priority sector lending it is 34 per cent for State Bank of Indore as against 26 per cent for SBI.
The union took decision to go on strike after SBI submitted a copy of ‘Scheme of Acquisition of State Bank of Indore by SBI’ to the Bombay Stock Exchange.
CH Venkatachalam, general secretary, AIBEA told Business Standard, earlier in June, this year the labour minister had held meeting with the bank management in which it was told not to go ahead with the merger, both the management and the union representatives agreed on this.
Venkatachalam added, “It’s clearly a violation by the SBI management, we have decided to go on a one-day strike by the end of this month against the decision”.
The union representatives will be meeting on Thursday or Friday to finalize the date of strike.
“I am not ruling out an indefinite strike,” he added.
He informed the bank (State Bank of Indore) is doing good business, even better than SBI, so why to go for merger? As State Bank of Indore provides support to the regional development projects, so, Venkatachalam feels if the bank is merged, then it will loose capability of supporting regional development.
He told comparatively the business per employee at State Bank of Indore is Rs 7.01 crore, while SBI figures stand to Rs 5.56 crore only. Likewise the advances per employee for State Bank of Indore accounts to Rs 3.43 crore as against Rs 2.63 crore for SBI, whereas deposits per employee of the former figures to Rs 4.50 crore against Rs 3.40 crore for the latter, and also in the priority sector lending it is 34 per cent for State Bank of Indore as against 26 per cent for SBI.
Wednesday, October 21, 2009
SBI - State Bank of Indore merger gets approval from govt
The State Bank of India (SBI) and State Bank of Indore merger have been finally approved by the government. A senior finance ministry official informed that the government has given an in-principal approval to the merger.
The official informed, “The boards of both the banks will now work out the modalities of the merger, and come to the government for final approval. We expect the merger to be completed by December”.
The official added that State Bank of India is not planning any more mergers of its subsidiaries with self. Last year in August SBI had merged State Bank of Saurashtra with self.
At present country’s largest commercial bank is having five other associate banks- State Bank of Travancore, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Hyderabad.
The official informed, “The boards of both the banks will now work out the modalities of the merger, and come to the government for final approval. We expect the merger to be completed by December”.
The official added that State Bank of India is not planning any more mergers of its subsidiaries with self. Last year in August SBI had merged State Bank of Saurashtra with self.
At present country’s largest commercial bank is having five other associate banks- State Bank of Travancore, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Hyderabad.
Thursday, September 10, 2009
SBI announced reduced interest rates for irrigation and crop loans
State Bank of India country’s largest lender has announced cut on interest rates of irrigation and crop loans to reduce the impact of a drought which can block burgeon economic recovery.
In India only 42% of agricultural land is irrigated, this year is facing the worst dry spell in more than two decades, and more than a third of the country's 625 administered districts have declared drought in their areas.
The effect of dry conditions can be seen on other things, in rural areas, which consists of more than 60% of the country's 1.2 billion population the demand for everything can come down from motorcycles to cell phones.
The government is urging state-run banks to appease farm loans and support irrigation in order to avoid decline in farm output, which would reflect on economic growth.
Niranjan Parsha, general manager of SBI's agriculture business unit, in an interview told Dow Jones Newswires, "Though the monsoon has now revived, this (lower interest rates) will help provide a further fillip to agri lending, which should start picking up from this month".
SBI stated in a statement for new minor irrigation loans of up to 2.5 million rupees ($51,125), the bank will be charging an interest rate of 8% in the first year and 9% for the second and third year.
At present on such loans bank is offering from 10.50% to 13.25%.
Moreover on loans provided for crops, on more than 300,000 rupees to 2.5 million rupees the bank has reduced the interest rate to 10% for one year from the existing 11.75% to 12.75%
Bank will offer the reduced rates for the summer-sown and winter-sown crop seasons up to March 2010.
Mr Parsha informed at present bank’s agriculture loan book accounts to 570 billion rupees and aims to increase it by 158 billion rupees in the remaining part of the fiscal year ending March 31, 2010.
Bank has also reduced the loan processing charges and has extended the repayment period by a year for new loans for the farmers.
In India only 42% of agricultural land is irrigated, this year is facing the worst dry spell in more than two decades, and more than a third of the country's 625 administered districts have declared drought in their areas.
The effect of dry conditions can be seen on other things, in rural areas, which consists of more than 60% of the country's 1.2 billion population the demand for everything can come down from motorcycles to cell phones.
The government is urging state-run banks to appease farm loans and support irrigation in order to avoid decline in farm output, which would reflect on economic growth.
Niranjan Parsha, general manager of SBI's agriculture business unit, in an interview told Dow Jones Newswires, "Though the monsoon has now revived, this (lower interest rates) will help provide a further fillip to agri lending, which should start picking up from this month".
SBI stated in a statement for new minor irrigation loans of up to 2.5 million rupees ($51,125), the bank will be charging an interest rate of 8% in the first year and 9% for the second and third year.
At present on such loans bank is offering from 10.50% to 13.25%.
Moreover on loans provided for crops, on more than 300,000 rupees to 2.5 million rupees the bank has reduced the interest rate to 10% for one year from the existing 11.75% to 12.75%
Bank will offer the reduced rates for the summer-sown and winter-sown crop seasons up to March 2010.
Mr Parsha informed at present bank’s agriculture loan book accounts to 570 billion rupees and aims to increase it by 158 billion rupees in the remaining part of the fiscal year ending March 31, 2010.
Bank has also reduced the loan processing charges and has extended the repayment period by a year for new loans for the farmers.
Wednesday, September 2, 2009
SBI face staff crunch, innumerable home loan applications pending
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.
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.
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.
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