Companies & Sectors
RBS buys 50 lakh shares of SKS Microfinance for Rs58 crore

Deutsche Securities Mauritius sold 50 lakh shares to RBS at Rs58 crore, thus reducing its stake in SKS Microfinance to 45 lakh shares

 
Mumbai: Royal Bank of Scotland (RBS) has bought 50 lakh shares of SKS Microfinance for a little over Rs58 crore through open market transactions, reports PTI.
 
According to bulk data available with stock exchanges, RBS, which is 82% owned by the UK government, bought 50 lakh shares of the Hyderabad-based microfinance player.
 
The shares were purchased from Deutsche Securities Mauritius Ltd on average price of Rs117.15 apiece, valuing the deal to Rs58.57 crore.
 
Earlier in July, Deutsche Securities Mauritius had picked up 9.15% stake, or 95 lakh shares, in SKS Microfinance through qualified institutional placement basis for an estimated Rs78 crore.
 
AT 11.51am on Wednesday, SKS Microfinance shares were up 1.7% to Rs124.5 on the BSE, while the benchmark Sensex was marginally down at 18,652.
 

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RBI Governor Subbarao hopes banks will cut lending rates

Subbarao said he hopes to evoke a positive response from banks and the lending rates will go down since there is credit flow for productive sector

 
Chhaproh (Himachal Pradesh): Reserve Bank of India (RBI) Governor D Subbarao expressed hope that banks would lower their lending rate in response to the recent cut in the cash reserve ratio (CRR)-- the percentage of deposits banks have to keep with the central bank, reports PTI.
 
"We hope that there will be response from banks and the new rates will go down so that there is credit flow for productive sector," Subbarao, who was in north India in connection with an outreach programme, said.
 
Following the CRR cut by the Reserve Bank, the country's largest bank State Bank of India (SBI) reduced the minimum lending rate by 0.25% last week.
 
With the reduction, the base rate of the bank came down to 9.75%, the lowest in the banking sector.
 
It is a challenge for banks to keep the lending rates low, Subbarao said.
 
Last week, Reserve Bank reduced CRR by 0.25% but refrained from reducing lending rates in view of high inflation.
 
The central bank's decision released Rs17,000 crore of primary liquidity into the system.
 
The liquidity infusion, RBI had said, would ensure adequate flow of credit to productive sectors of the economy.
 
Following the cut, CRR will come down to 4.5% while the repo rate, at which the central bank lends to the banks, would remain unchanged at 8%.
 

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HC flays State Bank of Travancore for 'bad ways' of loan recovery

State Bank of Travancore took possession of a commercial building, earned rent of Rs19,500 in two years and then sold the building for Rs18.7 lakh to recover a loan of Rs15,000

 
Kochi: Coming down on a bank for meting out 'unfair deal" to a client by selling his commercial building for Rs18.7 lakh to recover a loan due of Rs19,500, the Kerala High Court has reminded nationalised banks that they are only engaged in money lending and should not take up real estate business, reports PTI.
 
The observation was made by a division bench comprising Justice CN Ramachandran Nair and Justice CK Abdul Rahim directing the State Bank of Travancore (SBT) Chala branch to repay Rs6.5 lakh to a loanee who had availed Rs15,000 as loan some years ago.
 
The bank filed a suit for recovering Rs19,500 with interest after which the petitioner's commercial building was taken into possession by it. The building fetched Rs19,500 as rent within two years after which it was sold for Rs18.7 lakh by the bank.
 
The petitioner sought refund of the excess amount which was turned down by the bank. It also said capital gain tax had to be paid on the sale of the building.
 
The bench held that the transaction was an 'unfair deal at the hands of the bank which made a huge profit at the expense of unfortunate people'.
 
'While the clever ones get all the benefits and the banks writes off their dues, the sick and weak are exploited,' it said.
 
The court directed SBT to repay Rs6.5 lakh to petitioner Sobhana of Thiruvananthapuram. Her husband, Thamburaj, who was also a petitioner, died during the pendency of the case.
 

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