Despite the new financial year marching ahead, most of the banks are showing a slow trend in raising capital. These banks are slow in this regard as most of them have already raised funds this year and the increasing yield in bonds has made the idea of selling them as completely unfavorable, a merchant banker said.

Generally, end March is the time when banks flood the market with bond issuances as they prepare themselves for a...

The Reserve Bank of India has said that the guidelines for fresh banking licenses for new entrants would be coming in three months.

"It (framework on new banking licenses) may take three months. It all depends on what are the situations and complexities of issues," RBI deputy governor K C Chakrabarty said.

Finance Minister, Mr. Pranab Mukherjee had announced in the Union Budget that more banks are needed in the economy and fresh licenses should be given...

Following the trend of big lenders like ICICI and HDFC Bank, the Indian Overseas Bank has also hiked deposit rates for the deposits coming to the bank. The rise in deposit rates has been to the extent of 50 basis points. The bank is a Chennai based entity.

"We have decided to raise the deposit rates considering the current market conditions. We expect the rate to firm up in the near future," IOB executive director...

The credit target set by the Reserve Bank of India for the financial year 2009-10 has led banks to start lending at low interest rates. Such has been the pressure on banks that the Indian Oil Corporation (IOC) was granted a loan of Rs. 1000 crore from banks last week at a rate that is much cheaper than what is granted normally to such borrowers. These rates are even lower than the rates at which...

The base rate system has been the talk of town since quite some time. Many issues have arisen against the new directive which is going to hit the banking platform from July this year following which no banks can lend below their base rate. This will give a leap to the commercial papers market as the priority sector market is expected to prefer them instead of bank loans for meeting their short term requirements,...

The Government of India has finally started off with the feasibility study test of its new plan to spread banking services to all parts of the country. The Government has plans to set up a specialized banking services subsidiary under the department of post.

Tenders have been invited for carrying out the feasibility study on a detailed time bound basis to check the practicability of the service. It plans to set up the Post Bank of...

The top slot in the list of the country's top ten highest advance taxpayers has been bagged by the largest lender in the country, State Bank of India (SBI). The bank has made a payment of Rs. 6, 552 crore this fiscal, an Income Tax official said.

The last quarter of the current fiscal has seen a huge surge in advance tax payment with most companies paying higher tax in this quarter.

Apart from SBI,...

The RBI's mission to bring banking to all unbanked areas of the country is deepening its roots all over the country. In order to bring all people residing in remote villages upfront with banking operations, the RBI has started a special drive. RBI, in collaboration of the main bank in the area has decided to expand banking operations by using wireless technology and banking correspondents as tools.

The business correspondent model had been adopted by the...

The positive trend of tax payment amongst advance tax payers seems to be an indicative that the Indian economy has jaunted well in the current fiscal, despite the tinge of global meltdown.

According to an Income Tax Department official, most of the companies with a few exceptions have paid higher tax in the fourth quarter of the current fiscal.

"According to preliminary data, several companies have paid a higher tax this quarter," the source added.

However, the tax...

Reserve Bank of India has declared that more disclosure is needed from the part of banks regarding their Non Performing Assets (NPAs). The Central Bank has said that a detailed information is required regarding the market operations of banks including the list of their top 20 depositors, 20 largest borrowers , 4 largest NPAs to which the bank is exposed and also if any special purpose vehicles (SPV) are sponsored by them in this fiscal.

According...

Government of India may pick up RBI's stake in the National Bank of Agriculture and Rural Development (NABARD) in the upcoming fiscal. The Government had apportioned Rs. 1450 crore in this budget.

It has been revealed that the Government after consultation with RBI has decided to acquire 72.5% of share holding in NABARD which is currently held by RBI, thus making it a wholly government owned organization.

Official sources suggested that the transfer of shares is in...

Mahindra and Mahindra is the latest name added to the list of corporate houses seeking a banking license after the announcement by the Finance Minister in Union Budget 2010-11 that fresh banking licenses should be issued to private players and NBFCs.

According to a top executive of the $6.3-billion group, the group is planning to seek a banking license for its non-banking finance company Mahindra & Mahindra Financial Services (MMFSL).

"We are interested in getting a...

The time for savings account holders to rejoice is nearing. As per the directives given by the RBI, all banks have to calculate interest on savings account holdings on a daily basis from 1st April 2010.

Currently banks calculate interest on the lowest available balance in customer's account from 11th to last day of a particular month.

The new system is surely going to bring a smile on the faces of customers as their earnings...

The upcoming monetary policy review meeting of the RBI in April is likely to bring with it the start of the process of setting up of more private banks in the country. This step by the RBI follows the announcement by the Finance Minister during Union Budget 2010-11 that the country needs more private banks and that fresh licenses should be given to private players and non banking financial companies (NBFCs).

A source having knowledge about...

Credit growth has taken a peak in the last few weeks. But banks still need to lend another Rs.1,30,000 crore in order to meet the projection of 16% credit growth set by RBI for the year 2009-10.

This means that credit in March has to be more than double the amount lent by banks in February 2010. The banks have lent Rs. 60,000 crore in February.

As more and more lenders are demanding loans to meet their...

Banks are seeing a huge gush in credit flow as lenders are demanding more loans to meet their annual targets. The credit flow of banks has shown an increase by Rs 37,465 crore during the second half of February -- the highest fortnightly disbursal seen this quarter.

Bankers are ready to take up this credit upsurge and expect the rush to extend till March even if that means lending at lower rates. Banks like SBI are...

A major frame shift was observed in the recently conducted recruitment scenario at IIM-A. Consulting firms left the finance sector behind to emerge as the largest recruiter in IIM-A. The campus placement season this year saw a credible rise in salary structure offered to the students as compared to last year. However, the salaries offered still lagged behind the ones offered in 2008 during the period of boom.

Finance sector companies closed with 27 offers...

Stock market head and regulator, SEBI has banned all 100 entities of Bank of Rajasthan (BoR) and also many members of Tayal Family who are the promoters of the bank from any kind of activity in the stock market. Many entities which have been banned are listed companies either held directly by Tayal family or their associates.

As per a reference from the RBI, SEBI had conducted an investigation on the shareholding patterns in Bank...

The Government has started with the process of recapitalizing public sector banks. The Government would be infusing capital worth Rs. 9500 crore for the same purpose in the first quarter next year and Rs 7000 crore would be pumped in during the remaining part of the upcoming fiscal.

The Union Budget 2010-11 had last month declared that Rs.16, 500 crores would be infused into public sector banks for recapitalization. The measure has been taken so...

One major question which still remains unanswered regarding the much debated base rate issue is whether priority sector will be exempt from base rate or not. The priority sector which constituted the major chunk of bank borrowers was allowed loans below the BPLR (sub BPLR lending).

The draft published by the Reserve Bank of India regarding the implementation of base rate system said that no lending would be allowed below the base rate threshold. If this...