Last fortnight, The Reserve Bank of India (RBI) cut repo rate (the rate at which RBI lends to banks) and reverse repo rate (the rate at which banks keep surplus funds with RBI) by 100 basis points each. The repo rate is now 6.5 per cent, down from 7.5 per cent and reverse repo rate has come down to 5 per cent from the earlier 6 per cent, effective 8 December. Talking about the cuts, RBI governor D. Subbarao said, “The new rates are (more…)

Tags: HDFC Bank, ICICI Bank, Prime lending rates, Reserve Bank of India

Several banks have cut their prime lending rates (PLR), making loans cheaper. This could also lead to cut in home loan rates in the near future. Last fortnight, India’s largest public sector bank, State Bank of India (SBI), slashed its benchmark PLR by 75 basis points (bps) to 13 per cent, effective 13 November. It also declared a drop of 50 bps on deposits with tenors of between 91 days to 5 years and 25 bps on deposits above five years, effective 1 December. (more…)

Tags: Allahabad Bank, Corporation Bank, DENA BANK, hdfc home loans, Home loans, home loans interest rate, ICICI Bank, Indian Overseas Bank, Oriental Bank of Commerce

Sector will rise to $48bn by 2015

India has said its growth story, steered mainly by IT and telecom so far, will shift gear towards financial services to drive expansion. “It is our intention to make financial services the next growth engine for India,” finance minister P. Chidambaram said at ICICI Securities Investor Conference here on Friday.

As the economy becomes more open and trade intensity increases big financial flows would be intermediated in India, he said. Pointing out that India is a purchaser of international financial services, he said there is an opportunity for India to become a provider of these services as well.

He cited a recent report to state that these services were valued at $13 billion a year and would rise to $48 billion by 2015. A government constituted committee earlier this year had submitted its recommendations on making Mumbai an international financial centre. “It is, therefore, our intention to make Mumbai an international financial centre,” he said, adding the report is in public domain and the process of building a consensus on the key recommendations is on.

Pointing out that the outlook for the Indian economy is positive, Mr Chidambaram said the factors driving the current growth are domestic consumption, rise in investment, increase in employment and increase in productivity of both labour and capital. “I do not foresee any change for the worse in these factors. While there are some risks such as crude oil prices and commodity prices, we are confident that we would be able to manage these risks without hurting the process of growth,” he said.

Tags: ICICI Bank

The disbursement growth of ICICI Bank between July and September 2007 was almost flat, compared with the previous quarter April to June 2007. This was stated by the bank’s chief financial officer Vishakha Mulye while announcing the Q2 results of the current financial year in Mumbai on Friday.
The bank’s net profit for Q2 was Rs 1,003 crores as against Rs 755 crores in the corresponding period last year. The interest expended was Rs 5,730 crores as against Rs 3,892 crores a year ago. Net interest inc-ome rose 34 per cent, dep-osits grew 20 per cent and retail loan growth recorded 22 per cent jump.

Tags: ICICI Bank

ICICI Bank, the country’s biggest private lender, does not see any merit in acquiring a foreign bank at the moment and prefers to grow through the organic route in the domestic market. “Organic growth is the better way for us to grow further. We are an Indian bank and for boosting domestic operations we do not need to tie-up with foreign banks. Other than deep pockets, what can they bring for us,” ICICI Bank managing director and CEO K.V. Kamath said in an interview to PTI.
“Foreign banks do not bring anything on the table except large capital. On the technology front we have everything at par with the best of them. We have the right skill set also. Why should we need to go for an acquisition?” he said. If anything was needed for boosting the bank’s growth, it was more branches. “Branch licensing needs to be liberalised in the country,” he said. “There are immense opportunities in the Indian market. Even foreign banks are coming here because of huge gro-wth potential in the banking space,” Mr Kamath said, replying to a query

Tags: ICICI Bank

ICICI Bank on Tuesday complemented rival State Bank of India on its ongoing consolidation exercise, saying merging associate banks with itself would give the public sector bank “greater opportunities”. ICICI Bank managing director and CEO K.V. Kamath, however, feels no desire to overtake SBI to become the largest bank in India, saying that “overtaking someone is a negative goal as it can involve undesirable short cuts.”
Asked about the exercise initiated by SBI to merge its associate banks with it, Mr Kamath said that “SBI may have had indirect control over its subsidiaries already, but the merger would certainly give it lot more opportunities, such as consolidation which can bring in better efficiency.” On impact of consolidation on ICICI, Mr Kamath said that there would not be any effect on his institution, where he believes the growth driver is efficiency and productivity. “In the process if we can overtake (SBI) it will be incidental.”
Late last month, the SBI board approved the merger of State Bank of Saurashtra, while there are plans to merge other associate banks. Mr Kamath, however felt that there were lots of opportunities for the public sector banks. On the issue of further hitting the equity market, Mr Kamath said that the bank has no plans to go for it for at least three years and that the bank was in a comfortable position to meet credit demand.
“If the economy grows at a high pace then the banking services sector also grows… in case the economy grows by about ten per cent annually, the financial services sector will grow by 25-30 per cent. This would mean doubling the size of the institution in three years,” he quipped. He said that the follow-up equity issue had given the bank sufficient flexibility to meet the credit requirement of its insurance and mutual fund business.

Tags: ICICI Bank

The sixth Disha centre, an initiative from the ICICI Bank to provide financial counselling to help individuals overcome money problems and manage lives better, was launched in Hyderabad by the Regional Director, Reserve Bank of India, Hyderabad, Mr M.R. Gandhi.
The ICICI Trusteeship Services Ltd, which runs the service through the Disha Trust, started the first centre in Mumbai in April. The service, offered gratis now, will help people to understand their credit, manage debts better and overall improve their awareness about various financial products offered by the banks and other financial institutes.
The Executive Director, ICICI Bank, Mr V. Vaidyanathan, who spoke on the occasion said with the total consumer credit in India estimated at about $130-140 billion, and expected to pile up to a huge figure in the next 20 years, the bouquet of services offered by Disha, could be termed as ‘early stage financial education’.
In India, financial literacy is low. Through Disha “We intend to introduce financial literacy at the grass root level. Consumer financial has just taken root,” he added

Tags: ICICI Bank

ICICI Bank will shift its focus on global mergers and the acquisition financing with less than 25 per cent equity participation in the newly acquired companies.
Speaking to the media in Mumbai, ICICI Bank deputy managing director, Ms Chanda Kochhar said, “We initiated our investment banking services in the year 2004. We are shifting our prime focus across various life cycles of the corporates namely: lending services, private equity placements, IPO advisory services and global mergers and acquisition (M&A) financing etc.”
Ms Kochhar clarified that ICICI Bank has got no exposure to the subprime mortgage market in the US. “Although the Indian banks can invest in the subprime mortgage markets in the US, to the best of my knowledge, none of them currently have an exposure in these segment. We have got Rs 6,000 crores worth collateralised debt obligations on a balance sheet of over Rs 3,00,000 crores. ICICI Bank’s entire exposure is related only to India linked papers,” Ms Kochhar said.
ICICI Bank global investment banking group head Kalpesh Kikani said, “We have branded ourselves as a leading global bank of Indian origin that not only offers the M&A advisory services but also provides the financial solutions to the global acquisition processes. Ideally, our financing in mergers and acquisition deals is through the equity participation that allows us less than 25 per cent stake in the newly acquired companies. Also, we will focus on consolidation and the organic growth. Our overseas operations have broken even and amount to about 20 per cent of the consolidated revenues of ICICI Bank.”

Tags: ICICI Bank