Tag Archives: SBI

Corruption, India

Two year imprisonment for ex-manager of SBI

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Newsroom24x7 Staff

Ernakulam (Kerala): The Special Judge, CBI Cases here, has sentenced K. Balasundaram, ex Manager, State Bank of India, Alagappa Nagar Branch, Trichur to undergo two years Simple Imprisonment with fine of Rs. 100, 000 and another person N.D Venkitachalam to undergo two years Simple Imprisonment with fine of Rs.50,000.

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CBI had registered a case on the allegations that K. Balasundaram while working as Manager of State Bank of India, Alagappa Nagar Branch, Trichur during the period 2001-2002 entered into a criminal conspiracy with four accused persons, including the other person convicted in this case along with a Manager of Dhanalakshmi Bank, Thrissur and sanctioned a loan of Rs. 24.75 lakh for the purchase of two luxury vehicles on the basis of quotations.

The beneficiaries of this loan had issued the quotation and floated a fictitious company in the name of Shalimar Auto Garage and had also issued letters undertaking that they shall execute the body building. Another private person opened a bank account for Shalimar Auto Garage with the Dhanalakshmi bank, Thrissur. The Manager of SBI released the loan amount without verifying the credit worthiness of the loan & his collateral securities and disbursed the loan amount to the said Motor company. The manager of the said Motor company, after realizing the loan amount, did not hypothecate the vehicle in the name of SBI, but sold it to two other persons. After a period of one year, the loan amount became a non-performing asset (NPA) and a loss of Rs. 24,75,000 (Rs. 2.4 million) was caused to the Bank. After investigation, a chargesheet was filed.

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The Court convicted the accused persons and acquitted the Manager of Dhanalakshmi Bank. One Private person expired and charges against him were abated.

Banking

State Bank of India comes under attack on minimum balance penalty

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Newsroom24x7 Staff

I understand that the bank is having financial difficulties but this is not how they are going to make up the deficit.

Bhopal: K.K. Sethi, a retired bureaucrat, was in for a rude shock today when the State Bank of India (SBI) charged him Rs. 115 on the ground that he was not maintaining the mandatory minimum balance during the month.

Narrating his woe, Sethi told Newsroom24x7 that all the time, he had maintained Rs. 1,65,000 in his account but it was a sweep account where they send the money in excess of a limit and bring it back when it falls short of that limit. In his case the limit is Rs. 25,000, which is much in excess of what is the minimum balance required.

Instead of transferring the amount back, they want to tax me for no fault of mine, Sethi said adding “I understand that the bank is having financial difficulties but this is not how they are going to make up the deficit.” The former bureaucrat, known for his upright image and no-nonsense stance throughout his illustrious career, described the bank’s action as “downright illegal and immoral”.

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KK Sethi

KK Sethi, a retired IAS officer, is highly respected for his commitment to the larger cause of society. He has held several important posts and was Chief Secretary Manipur and President Board of Revenue in Madhya Pradesh. As Commissioner for Linguistic Minorities, he had presented to the President of India, the forty-fourth Annual Report under Article 350- B (2) of the Constitution. For the implementation of the constitutional provisions and Nationally Agreed Scheme of Safeguards provided to linguistic minorities, the report recommends action to be taken by the Central Government and various State Governments / Union Territory Administration, to assuage the feelings of the linguistic minorities.

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Banking

SBI’s core capitalisation to improve in the financial year ending-March 2017

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Newsroom24x7 Staff

fitch ratingsSingapore/Mumbai: Fitch Ratings expects SBI’s core capitalisation to improve in the financial year ending-March 2017 (FY17), from a core equity Tier 1 ratio of 10.3% at end-September 2016.

SBI is likely to receive around USD835 million in new capital from the government shortly (of the total USD1.1 billion earmarked for FY17; around 5% of FY16 equity) and plans to raise an additional USD2.2 billion directly from the market, for which it has received shareholder approval.

The bank’s NPL ratio of 7.1% at end-1HFY17 and stressed asset ratio of 9.6% have moderately picked up in 1HFY17, but remain considerably lower than those of other large state banks.

Fitch Ratings has assigned State Bank of India’s (SBI, BBB-/Stable) USD500 million senior unsecured notes due January 2022 a final rating of ‘BBB-‘.

This follows the completion of the securities issue and the receipt of final documents conforming to information previously received. The final rating is the same as the expected rating assigned on 16 January 2017.

The notes constitute the issuer’s direct, unconditional, unsubordinated and unsecured obligations and rank pari passu among themselves and SBI’s all other unsubordinated and unsecured obligations.

The notes were issued by SBI’s London branch with a tenor of five years.

India

Money lending scenario in Indian banks – home is where the money is !

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Newsroom24x7 Desk

homes in indiaNew Delhi : Money lending scenario in Indian banking industry, which has been witnessing a slow momentum from the corporate clientele is showing a trend of pick up, as demand for home loans are nudging a tad higher and building up expectations for Indian banks to strengthen mortgage lending in home-sector. With India’s banks, struggling to boost mainstay corporate loans, the emerging home loan datasheet suggests of a fillip in the home-buying spree, especially in the second tier towns that has driven mortgage-loan growth to the fastest rate in at least six years.

Top lender State Bank of India (SBI and Co.), and two big private sector giants – ICICI Bank and Axis Bank sound optimistic on grounds that smaller cities and such home-demand centres in the country have contributed towards a swell in overall home-loans books. Data supports the claim as outstanding home loans in India stood at $103 billion as at end-November.

This scenario is an outcome of banks adopting a well-planned strategy — wherein, attention and focus has shifted from corporate clients to private customers (read individuals). This change of focus has found strategic alliance between the lenders (banks) and the borrowers (individuals), and has helped in building back on the eroded base, vacuumed by corporate disinterest.

Banks, having base in Indian soil, are focusing on lending to individuals to counter a sluggish corporate-loan market that has been hit by a three-year long slowdown in Asia’s third-largest economy. Advantage — many. To begin with — One — lending is on, albeit decreasing corporate demand. Two — low number of defaulters, as Home loans more often than not, present lower bad-debt risks for the banks than corporate loans, as supported by data. Third — Tier-2 cities which are picking up and walking hand-in-hand along with infrastructure growth story, enable banks to expand laterally on their loan-lending books, without having to shell out very high amount per client, as tier-2 cities comparably are more affordable for investment vis-a-vis biggies in the likes of metros and A-class cities.

SBI alone expects an 18 percent growth in home loans for this fiscal year ending in March, against 14 percent growth for overall credit. According to CGM (Chief General Manager, real estate lending) of SBI, Jayanthy Laxmi — Tier 2 cities are picking up…Connectivity, affordability and rising employment are helping them to grow faster.

Infrastructure is atan overall high on expectations, as rising income levels, increasing urbanization, lower mortgage interest rates over the past year and easier capital regulations for loans to mid-segment home buyers are driving demand for housing units in India. Analysts are ready to bet on numbers, and projections are brimming with optimism. Some forecast that India would need 110 million new houses by 2022, thanks to PM Modi’s ‘housing for all’ vision. Banks too are filling the hope-pit and supporting it with data, as central bank data shows housing loans during April-November grew 12.2 percent, their fastest pace in at least six years, and accounted for nearly a third of total loans made. By comparison, credit to industry, which includes corporate loans, was up just 0.4 percent.