CCI said the proposed combination is not likely to have an appreciable adverse effect on competition in India as the size of the business instalment loans portfolio of Barclays in India is relatively insignificant
New Delhi: Fair trade regulator Competition Commission of India (CCI) has approved Kotak Mahindra Bank’s proposal to acquire Barclays Bank’s unsecured loan business in India, saying the deal would not have any adverse impact on competition, reports PTI.
The proposed transaction involves Kotak’s acquisition of business instalment loans portfolio of Barclays India and Barclays Investments and Loans (India).
Business instalment loans are provided by Barclays to individuals, sole proprietorships, partnership firms and companies for business needs or working capital requirements.
In its order dated 22nd January, CCI noted that “the proposed combination is not likely to have an appreciable adverse effect on competition in India”.
The regulator observed that the size of the business instalment loans portfolio of Barclays in India “is relatively insignificant”.
“There are also other players in the Indian banking and financial services sector providing similar loans,” CCI said.
“In view of the foregoing, it is observed that the proposed combination is not likely to give rise to any adverse competition concern in India,” it added.
Barclays and Kotak had reached an agreement on the proposed deal in December last year. Following this the entities had approached CCI for approval on 2 January 2013.
Banks are encouraged by the RBI to consider the option of raising Tier II capital through public issue to retail investors while issuing subordinated debt
Mumbai: The Reserve Bank of India (RBI) has asked banks to issue bonds to retail investors so as to deepen the corporate debt market, reports PTI.
“With a view to deepening the corporate bond market in India through enhanced retail participation, banks, while issuing subordinated debt for raising Tier II capital, are encouraged to consider the option of raising such funds through public issue to retail investors,” RBI said in a notification.
However, it said that while doing so banks are advised to adhere to the prescribed conditions.
The central bank also emphasised that the investor is aware of the risk characteristics of regulatory capital instruments.
Banks usually raise Tier II capital by issuing subordinated debt to banks and large investors.
As per the prescribed format, the amount of subordinated debt to be raised may be decided by the board of the bank.
The bonds have a minimum maturity of five years. However, if the bonds are issued in the last quarter of the year i.e. from 1st January to 31st March, they should have a minimum tenure of 63 months.
The coupon rate of such bonds are decided by the board banks.
From 1st April, banks would offer differential interest rates for only on term deposits of Rs1 crore and more and may refuse premature withdrawal of the deposit
Mumbai: The Reserve Bank of India (RBI) has tightened norms for differential interest rates asking banks to offer them only on term deposits of Rs1 crore or more, and permitted them to refuse premature withdrawal of such deposits, reports PTI.
“The permission to offer varying rates of interest for deposits of the same maturity shall apply to single rupee term deposits of Rs1 crore and above.
“Banks may therefore offer same rate of interest or differential rates of interest for deposits of Rs1 crore and above of the same maturity,” the RBI said in a notification.
The changes will be applicable from 1 April 2013
For deposits below Rs1 crore of the same maturity, the RBI said, the same rate will apply.
On premature withdrawal of large size term deposit, it said: “The bank at its discretion, may disallow premature withdrawal of large rupee term deposits of Rs1 crore and above” of all depositors, including deposits by individuals and Hindu Undivided Families (HUFs).
The bank shall have the freedom to determine its own penal interest rate of premature withdrawal of term deposits, it added.
The RBI also said that henceforth the expression “bulk deposit” would be used for single rupee term deposits of Rs1 crore and above.
As of now, the term “bulk deposit”, though not specifically defined, has been interchangeably used with “wholesale deposits”—deposits of Rs15 lakh or above.
The country’s monetary authority said that banks should disclose in advance the schedule of interest rates on deposits including those on which differential interest will be paid.
“Interest paid by banks should be as per the schedule and not be subject to negotiation between the depositor and the bank,” the RBI added.
Earlier also, banks were permitted to disallow premature withdrawal of large deposits held by entities except for those held by individuals and HUFs.
The RBI also modified the memorandum of instructions for opening and maintenance of Rupee/foreign currency Vostro accounts of non-resident exchange houses.
Through the amendment, payments to medical institutions and hospitals in India, for medical treatment of NRIs/their dependents and nationals of Hong Kong, Singapore and Malaysia, have been included in the list of “Permitted Transactions”.
Also, payments to hotels by nationals of Hong Kong, Singapore and Malaysia and NRIs for their stay has been included in the list.