Banking News

Estd. 20-4-1946 13 -14 SEPTEMBER , 2015

NEWS BULLETIN from ALL BANK EMPLOYEES’ ASSOCIATION

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AIBEA opposes SBH merger

SPECIAL CORRESPONDENT THE HINDU Vishakhapatnam 13 9 2015 While planning agitations to resist moves to privatise and merge banks, the All India Bank Employees’ Association (AIBEA) has opposed the merger of State Bank of Hyderabad with SBI. Association general secretary C.H. Venkatachalam said SBH was a strong bank, central to the economy of Andhra Pradesh and Telangana and the merger was not necessary. On the other hand, SBH should be detached from SBI and should be made independent like other banks. Mr. Venkatachalam was here in connection with the 43 rd national triennial conference of SBH Staff Association. Alleging that the NDA government was trying to privatise public sector banks, he said any such decision would be opposed with a nationwide bank strike within 48 hours.

There was no weak bank or strong bank, but some were affected by non-performing assets , he said. A whopping Rs.3 lakh crore was due, 90 per cent of it from private corporate sector, and the government was not acting on recovering them. Demanding that criminal proceedings be launched against such defaulters, he said AIBEA would release the latest list of big defaulters on October 2 . The government should strengthen Sarfesi Act and make recovery laws more stringent.

Instead of strengthening public sector banks, the government giving licences to open private banks which would take deposits away from the public sector banks and hit their role in lending to people. While the U.S. with a population of about Rs. 40 crore had 3000 banks, India had only 100, Mr. Venkatachalam said adding that the country needed more banks with expansion and not mergers and consolidation.

Atlas Group probe: Govt transfers Bank of Baroda ED

PTI MUMBAI, SEPT 13: BUSINESSLINE The Government has shunted out Bank of Baroda executive director KV Rama Moorthy, as an investigation by Reserve Bank continues into granting 70 million dirham loan to the troubled Atlas Group, when he was heading its branch. In an unprecedented move, Moorthy has been shifted to a smaller state-run lender United Bank of India. He assumed his new job on August 29 as executive director. Moorthy confirmed to PTI that he has been transferred to United Bank following a government notification. The RBI had recently initiated a probe into the operations of BoB’s Dubai branch and had reportedly told the government that his continuance may lead to a conflict of interest. The apex bank’s investigation is still ongoing. The -based Atlas Jewellery Group is promoted by the Kerala-born M Ramachandran and its founder is in judicial custody in Dubai following the default of around Rs. 1,000 crore (520 million Dubai dirham) loan drawn from nearly 20 banks, including four domestic lenders. At 70 million dirham, BoB has the largest exposure to the jewellery chain. Others include ICICI Bank (50 million dirham), IDBI Bank (30 million dirham) drawn from their Dubai IFC branches, and State Bank of India which has exposure of 11 million dirham extended from its branch, according to sources.

Sources said the transfer came after the RBI ordered a probe into the operations of BoB’s Dubai branch after Atlas Group’s default case came to light late last month. The RBI had reportedly observed that continuance of Moorthy in BoB, who was chief executive BoB Dubai operations between 2011 and 2014, when the loan was given to Atlas, may lead to conflict of interest, they added.

On completion of his three-year term as CEO of BoB’s UAE unit — which is a GM level rank — Moorthy was transferred as the head of the north Gujarat zone last year.

On March 10, this year, he was elevated to the post of ED at BoB. Besides, the newly appointed Managing Director and Chief Executive of BoB, PJ Jaikumar is yet to assume his charge as acting Chairman Ranajn Dhawan is retiring on September 30. When contacted, a SBI official said that the bank is busy recovering the money from Atlas and did not want comment on the issue.

Andhra Bank to raise Rs. 700 cr via QIP

G NAGA SRIDHAR HYDERABAD, SEPT 11:

Andhra Bank plans to raise Rs. 700 crore through qualified institutional placement (QIP) next quarter. "This is part of our plan to raise Rs. 3,000 crore capital in the current financial year,'' its Managing Director and CEO (Additional Charge), S K Kalra, told newspersons after remotely inaugurating the bank’s 2,600th branch and 3,000th ATM here on Friday. A bond issue of Andhra Bank is currently on for Rs. 500 crore which will be closed by the last week of this month. In addition, Andhra Bank is expected receive Rs. 378 crore from the Government. "So, by this month-end, we will have Rs. 878 crore capital,’’ he said. The remaining fund will be raised before the end of March 2016 by way of tier II bonds and also from the Government. Profitability For the full year, Andhra Bank expects profitability to the tune of Rs. 800 crore. In the first quarter, it had earned Rs. 203 crore profit. "Our dream profit target, however, is Rs. 1,000 crore for the year,’’ Kalra added.

The gross and net non performing assets could come down to 5 per cent and 2.5 per cent from present 5.75 per cent and 2.93 per cent, respectively, he added.

Rakesh Sharma is new MD & CEO of Canara Bank

Rakesh Sharma BENGALURU, SEPTEMBER 11: BL Rakesh Sharma took over as Managing Director and CEO of Bengaluru- headquartered Canara Bank on Friday. Before being appointed by the Government to head Canara Bank, Sharma was the MD and CEO of Lakshmi Vilas Bank since March 2014, where, in a short span of 18 months, he helped the private sector lender excel in all parameters, an official statement said. With over three decades of experience in the banking sector, Sharma’s main expertise lies in retail and wholesale banking, corporate credit, asset liability management, loan syndication, trade finance, industrial relations and human resources issues. Prior to his stint in Lakshmi Vilas Bank, Sharma served State Bank of India in various roles, including in Tokyo where he was in charge of the overall functioning of SBI branches in Japan. Sharma joins Canara Bank at a time when the public sector lender’s profitability has come under pressure amidst worsening asset quality. Canara Bank reported a 41 per cent drop in net profit for the April-June quarter at Rs 479 crore over corresponding the period last year on higher provisioning .

Global developments no immediate cause for worry: RBI panel

OUR BUREAU NEW DELHI, SEPTEMBER 10: India’s macroeconomic fundamentals are quite strong and there is no immediate cause for worry due to the international economic developments, a high-level panel headed by RBI Governor Raghuram Rajan said on Thursday. At the meeting in Mumbai, the Rajan-chaired sub-committee of the Financial Stability and Development Council (FSDC) however, said there was a need to be vigilant over the emerging situation, an official statement issued here said. All eyes are now on the US Federal Reserve meeting on September 16-17 to see if there will be a lift-off — a rate hike in the world’s largest economy after a decade of near-zero interest rates. This will be a challenging decision for the US Federal Reserve given the mixed trends in inflation outcomes and employment data coming out in the US.

NEW SECRETARY IN DEPT. OF FINANCIAL SERVCIES:

Government has appointed Ms Anjuly Chib Duggal , as Secretary (Financial Services) in the place of Shri Hashmuk Adhia who has been posted as Secretary, Revenue.

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