Tag: loans

Karur Vysya Bank revises marginal cost based lending rates

Karur Vysya Bank revises marginal cost based lending rates

06/10/2016 16:00

Private sector lender Karur Vysya Bank Ltd on Thursday said that it has revised its marginal cost of fund based lending rate (MCLR) effective from October 07, 2016.

The lender has fixed its MCLRs for loans of different time intervals ranging from ‘overnight’ to ‘one-year’ duration. These rates are varing in the range of 9.50 per cent to 9.90 per cent.

The bank has finalised 9.50 per cent rate for its ‘overnight’, ‘one-month’ and ‘three-month’ MCLR benchmark, the bank said in a filing to the BSE.

On the other hand, the private sector lender has set 9.70 per cent rate for its ‘six-month’ period MCLR while ‘one-year’ period MCLR has been set at 9.90 per cent.

Meanwhile, shares of the bank closed at Rs 476.90 apiece, up 0.07 per cent, from previous close on BSE.

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Hinduja Leyland Finance files IPO papers to raise Rs 500-cr

Hinduja Leyland Finance files IPO papers to raise Rs 500-cr

31/03/2016 13:02

Hinduja Leyland Finance, an arm of Ashok Leyland, has filed draft papers with capital markets regulator Sebi to raise at least Rs 500 crore through the initial share sale, said the media report.

The initial public offer (IPO) comprises fresh issue of equity shares worth Rs 500 crore and an offer for sale up to 26,608,810 scrips by existing shareholders.

The company is considering a pre-offer placement of up to 2.6 crore equity shares for an amount not exceeding Rs 200 crore.

“Hinduja Leyland Finance, a subsidiary company of Ashok Leyland has filed today the Draft Red Herring Prospectus (DRHP) with Sebi for the proposed initial public offering of equity shares,” Ashok Leyland in a regulatory filing to stock exchanges.

It has appointed Axis Capital, ICICI Securities, SBI Capital Markets and Yes Securities as the merchant bankers for the public issue.

Hinduja Leyland Finance, a non-banking finance company (NBFC), provides customised finance to utility vehicles, tractors, cars, two wheeler and other commercial vehicles, focusing on the semi-urban and rural sector.

Hinduja Leyland finance, part of Hinduja Group which has global presence in automobiles, energy, IT/ITES, banking and finance, media, entertainment and infrastructure.

SBI leads mobile banking chart with over 38 pct market share

SBI leads mobile banking chart with over 38 pct market share

22/03/2016 00:36

State Bank of India, the nation’s largest lender, is also the leader in digital banking in the country in both volume and value terms, handling over 38 per cent mobile banking transactions a month, reported PTI.

The bank, quoting the Reserve Bank data for December 2015, today said in December 2015, SBI accounted for 38.44 per cent of total mobile banking transactions in terms of volume and 35.97 per cent market share in terms of value.

SBI leads the mobile banking space with 151.83 lakh transactions worth Rs 17,636 crore in December 2015.

As against this, the closest rivals, who are all private sector lenders, pale. ICICI Bank, the second largest lender, had just about 70.01 lakh transactions, followed by Axis Bank with 60.28 lakh and HDFC Bank with a low 39.13 lakh, in volume terms.

Commenting on the achievement, SBI chairperson Arundhati Bhattacharya said in terms of mobile banking volume, the bank has been consistently maintaining leadership position since April 2015.

“Till a few months back, our customers were doing mostly low to medium value fund transfers and m-commerce transactions on mobile. But with the launch of our dedicated user-friendly mobile apps for non-retail customers, the average transaction size has shot up more than five times,” she said.

In May 2015, SBI launched mobile banking variant StateBankAnywhere-Saral which is meant for small and medium firms with single authorised signatory/user. Another variant StateBankAnywhere- Corporate for large corporate customers was launched in October 2015.

These apps have been receiving significant response from on-the-move corporate customers and are facilitating a large number of high-value transactions through their mobiles.

State Bank has a mobile app for each segment covering a wide range of customer needs. The app ‘State Bank App Kart’ gives its users a seamless user interface for installing, opening or upgrading mobile applications of the State Bank Group.

Its another platform is SMS Banking with the app called SBI Quick that facilitates inquiry related options for everyone even from basic phones.

Then the bank also has a mobile wallet ‘State Bank Buddy’ with a user base of around 2.5 million.

Bank of India posts Rs 1,505.58 cr loss in Q3

Bank of India posts Rs 1,505.58 cr loss in Q3

11/02/2016 16:02

Country’s one of the oldest and largest commercial lender Bank of India (BoI) saw business taking a dip in October-December quarter mainly on account of surge in bad loans. It had posted a standalone net loss at Rs 1,505.58 crore in the quarter ended December 31, 2015.

The bank had posted standalone net profit of Rs 173.38 crore in corresponding quarter of previous fiscal, said Bank of India in a filing to the Bombay Stock Exchange on February 11, 2016.

Total income of the bank too fell by 7.2 per cent at Rs 11,086.95 crore in Q3 FY16 from Rs 11,947.45 crore in Q3 FY15.

During the quarter, provisions (other than tax) and contingencies jumped significantly to Rs 3,603.92 crore from Rs 3,237.39 crore in previous quarter and from Rs 1,580.72 crore in corresponding quarter of last fiscal.

During the quarter under review, the bank’s gross non-performing assets jumped to 9.18 per cent of total loans, compared with 4.07 per cent in the year-ago quarter. Net NPA of the bank too grew to 5.25 per cent against 2.50 per cent in corresponding period last year.

Reacting to the numbers, shares of Bank closed at Rs 85.20 apiece, down 5.96 per cent, from previous close on BSE.

27 PSBs write off 1.14 lakh-cr bad loans in 2012-15

09/02/2016 01:19

Rs 1.14 lakh crore of bad loans have been written off by 27 public sector banks (PSBs) during FY 2012-15, with the last fiscal alone witnessing a steep 53 per cent rise in write-offs as part of the balance sheet clean-up, said the media reports.

For the fiscal ended March 2015, public sector banks have written off loans amounting to Rs 52,542 crore, an increase of 52.6 per cent over the previous fiscal, as per the RBI data.

About one-fifth of bad loans was written off in 2014-15 as the gross non-performing assets (NPAs) at the end of March 2015 rose to Rs 2,67,065 crore, reported PTI.

These 27 banks had written off Rs 34,409 crore in 2013-14 while Rs 27,231 crore in 2012-13. So in aggregate, a staggering Rs 1.14 lakh crore were written off in the last three fiscals.

For 2014-15, SBI topped the chart of PSBs by writing off Rs 21,313 crore followed by Punjab National Bank Rs 6,587 crore and Indian Overseas Bank Rs 3,131 crore.

Besides, Allahabad Bank’s write-off figure stood at Rs 2,109 crore, Central Bank of India Rs 1,995 crore, IDBI Bank Rs 1609 crore, Bank of Baroda Rs 1,564 crore, Syndicate Bank Rs 1,527 crore, Canara Bank Rs 1,472 crore and Uco Bank Rs 1,401 crore.

PSU banks have been witnessing a continuous surge in bad loans. As on September 2015, the gross NPAs of PSBs have increased to Rs 3,00,743 crore as against Rs 2.67 lakh crore in March 2015.

Concerned over mounting bad loans, RBI in consultation with the government is working on methodologies to clean up balance sheet of state-owned banks by March 2017.

RBI Governor Raghuram Rajan recently announced a March 2017 deadline for banks to clean up their balance sheets which are plagued by high incidence of bad assets.

While Rajan had assured that enough capital is available for public sector banks, he cautioned that some of the banks may witness erosion of profitability in the short run due to cleaning of books.

“We believe enough capital is available. While the profitability of some banks may be impaired in the short run, the system, once cleaned, will be able to support economic growth in a sustainable and profitable way,” he had said.

The Finance Minister has indicated he will support the public sector banks with capital infusions as needed.

The government last year announced a revamp plan, ‘Indradhanush’, to infuse Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel III.

As per the capital infusion road map, PSU banks will get Rs 25,000 crore this fiscal and as well as the next fiscal and Rs 10,000 crore each in 2017-18 and 2018-19.

Out of Rs 25,000 crore set for the current fiscal, the government has infused about Rs 20,088 crore in 13 public sector banks.

Process to de-stress banks has been initiated: Jaitley

21/01/2016 01:08

As bad debts weigh down on banks, Finance Minister Arun Jaitley said the process to de-stress the banks has been initiated while the government may add to the re-capitalisation of public sector lenders, reported PTI.

“More things are being done. Steps are being taken for recapitalisation of banks. We have announced the programme and we probably will have to add to that programme,” Jaitley said here at the WEF Annual Meeting following suggestions from business leaders to take steps to boost the banking sector.

“Besides, RBI has asked banks to line up the bad debts they need to sell. The problem is not widespread and is limited to a few sectors.

“I am aware that both private and public sector banks are in touch with the concerned industry groups. We do not want to create a panic situation. Destressing of banks need to be tackled and the process for the same has been initiated,” he added.

The truth about zero percent finance schemes

The truth about zero percent finance schemes

Day in day out we see ads all over offering everything from a toaster to a car at zero percent finance. And with the advent of EMIs (Equated Monthly Installments), even the middle class can now dream of owning a car; the big and bold 0% finance just makes it all the more tempting.

However, there may be a lot more to the zero percent schemes than meets the eye. What you initially think is a great offer, may end up costing you more money in the long run. Remember, the popular saying: “There is no such thing as a free lunch!”

How does the zero percent scheme work?

At the outset, what you need to know is that there are ALWAYS hidden costs inbuilt in such schemes. You will also be paying a transaction or processing fee under the zero percent scheme and consequently more money through advance EMIs.

For example, you decide to buy a 39-inch LED Full HD television that costs around Rs. 48,000. And of course, the zero percent finance scheme is too tempting to refuse. So, as per this scheme you are required to pay the entire cost in 6 EMIs of Rs. 8,000 each with Rs. 1000 as processing fees. This is a standard charge that all finance companies will charge.

What most consumers don’t know is that cash payment entitles the customer to a discount. Let’s say, in this case it is Rs. 2,000.

Now here’s how you end up paying more: To begin with you pay a processing fee of Rs. 1,000. And since you are buying the TV on a zero percent finance scheme you are not entitled to the cash discount of Rs. 2,000! So, overall, you will end up paying Rs. 3000 more.

Extra charges:

By chance if you end up missing an EMI, the interest charges are back-breaking! Yes, companies actually charge anywhere between 24% to 36% as interest charges. To put things in perspective, a car loan is available at around 11.5% and a home loan at around 11%. This is topped with late payment fees and taxes. If you purchase a product on an EMI scheme offered by your credit card company, it is most likely that there will be a pre-closure penalty in the range of 2.5% to 3%.

How to decide if the scheme is actually zero percent?

It is always better to ask some basic questions to find out if the zero percent schemes are actually zero percent. Find out if you are eligible for any discount if you pay the full amount and if there are any transaction charges for the finance scheme. If the answer is ‘no’ for both the questions then you might consider yourself lucky that the zero percent schemes is actually zero percent. This is as rare as a blue moon though.