Companies & Sectors
ICICI sees Internet overtaking branch banking channel

According to Chanda Kochhar, handheld devices like mobile phones and tablets segment, which are growing at over 100% every year as compared to the 20% growth in desktops, will help drive this growth

Mumbai: ICICI Bank said Internet-based transactions have grown to constitute a third of its total and the segment may grow to become the largest channel in future, reports PTI.

 

"More than one third of our transactions take place through Internet, making it the second most used medium. With the increase in Internet usage, it may also grow to occupy the number one position," the bank's Chief Executive and Managing Director Chanda Kochhar told reporters.

 

She said handheld devices like mobile phones and tablets segment, which are growing at over 100% every year as compared to the 20% growth in desktops, will help drive this growth.

 

The country's leading private sector bank launched a slew of products like an electronic branch which will do all the operations of a branch across the clock, tablet-based banking which will fasten account opening, a better point of sale terminal which can conduct a host of transactions and an e-locker for storing important documents.

 

Kocchar said the bank wants to "democratise" the use of technology through the launch of the products so that customers outside the realm of technology can also enjoy the fruits of technology.

 

The bank has already made 25 electronic branches operational in 18 locations in Tier-I and II cities across the country and has launched its e-locker initiative servicing 1,000 customers.

 

It has already deployed 2,000 tablets as part of its "Tab Banking" initiative across eight centres in the country, she said.

 

Kochhar, however, refused to share investment details or the cost benefits accruing out of the initiative.

 

"Customers are seeking enhanced convenience and time has also become of essence. We have studied customer requirements and launched the products which will help customers," Kochhar said.

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IDBI Bank to raise $580 million from overseas bond sale

The public sector lender is also mulling to increase the size of MTN programme to $2.5-3 billion from the present $1.5 billion from next January

Mumbai: Public sector lender IDBI Bank said it plans to raise $580 million from the overseas market this fiscal as part of its $1.5-billion overseas bond sale programme, reports PTI.

 

The bank raised $200 million (250 million Singapore dollars) for a three-year maturity with a coupon of 3.65% from the Singapore market on 21st August, making it the first domestic bank to raise funds in Singapore dollars.

 

The issue got a sound response with demand for the issue touching 3 billion Singapore dollars or 12 times the issue size, the bank said.

 

"With this round of fund raising from the Singapore market, the total fund raising through medium-term-note programme (MTN) had reached $920 million out of the total $1.5 billion. We are likely to raise the rest of the amount ($580) in the current financial year," executive director Melwyn Rego told reporters.

 

HSBC, DBS, StanChart were the lead managers to the issue.

 

Talking about initiatives taken up by the bank to raise the rest of the amount, Rego said the bank was in advanced stage of discussions with a multilateral funding institution and also planning to enter into a new market to raise money which has not been tapped by any domestic bank yet.

 

The public sector lender is also mulling to increase the size of MTN programme to $2.5-3 billion from the present $1.5 billion from next January.

 

"Normally, we renew our MTN programme in January. So, we are planning to increase it to $2.5-3 billion next January," Rego said.

 

Elaborating the significance of recent fund raising from the Singapore market, Rego said it was first of its kind among the domestic banks and the coupon was very attractive.

 

Talking about utilisation of proceeds from the bond sale, deputy managing director BK Batra said the fund raised would be deployed in normal business operations.

 

"The proceeds will be utilised for normal business operations. We are also witnessing sound demand from clients for the overseas funds," Batra said.

 

IDBI Bank's MTN issue in Singapore comes on the heels of the SBI, ICICI Bank, Axis Bank, IOB and UBI raising $3.10 billion over the past one month while Exim Bank had raised another $500 million early this month.

 

Others like Bank of Baroda and Bank of India and companies like Rural Electrification Corporation, Jindal Steel & Power and Power Finance Corp are also waiting to mop up funds from international markets.

 

The biggest fund raiser so far this year has been Reliance Industries, which had mopped over nearly $5 billion since February this year.

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RBI says real lending rates nearly halved in FY12 to 3.8%

RBI said contrary to claims, the real interest rates of commercial had been heading south in FY12 from their high during the pre-crisis period of 2003-04 and 2007-08

Mumbai: The Reserve Bank of India (RBI) has proved wrong its critics, who have been flaying it for sharp growth dip and blaming it on the tight monetary policy, saying real lending rates nearly halved in FY12 to 3.8% from about 7% in the pre-crisis period, reports PTI.

 

The RBI has been under constant criticism for its hawkish stance on inflation, resulting in higher lending rates, which in turn pulled down growth rates beginning the middle of last fiscal.

 

Real lending rate is calculated by subtracting inflation from the banks' lending rates.

 

Attributing this decline to the elevated inflation rates and deceleration in growth, the RBI annual report for FY12, released last evening said, contrary to these claims, the real interest rates of commercial had been heading south in FY12 from their high during the pre-crisis period of 2003-04 and 2007-08.

 

"The real or net of inflation weighted average lending rate (WALR) increased only moderately to about 3.8% in 2011-12, but remained lower than the average of about 7 percent in the pre-crisis period of 2003-04 to 2007-08," the report said, quoting its own calculation of the weighted average lending rates of banks.

 

Attributing this fall to an investment boom during the pre-crisis period, the report said "the fall in real lending rates in post-crisis period is even sharper if GDP deflators are used to calculate inflation instead of WPI.

 

"The fact is that real lending rates have secularly declined since 2003-04. During this period, investment boomed initially, but stalled in recent years even though real rates continued to decline," the report said.

 

However, the report admits that according to an exercise undertaken by the RBI to calculate the WALR of banks using the accounts-level data from basic statistical returns, the effective lending rate in nominal terms rose in FY12 in response to monetary tightening.

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