SBI may raise saving deposit rate by up to 125 basis points

Earlier this week, the RBI had deregulated the savings bank deposit interest rate with immediate effect giving banks freedom to determine their own rates

Mumbai: The country’s largest lender State Bank of India (SBI) today indicated that it could increase interest rate on savings bank accounts by up to 1.25% in view of competition following freeing of such rates by the Reserve Bank of India (RBI), reports PTI.

“On an average...we are expecting 100-125 basis points increase in the funding cost of savings bank,” SBI chairman Pratip Chaudhuri said.

Earlier this week, the RBI had deregulated the savings bank deposit interest rate with immediate effect giving banks freedom to determine their own rates.

Immediately after the announcement, private sector Yes Bank, a relatively small player, had raised savings rate by 200 basis points to 6%.

Banks now offers 4% on savings bank accounts.

When asked about the impact of RBI decision on deregulation, Mr Chaudhuri told a popular business TV channel in an interview, “I think that’s (rise in interest rate on savings bank) going to be inevitable. We are prepared for some pressure on the cost of saving bank funding.”

He, however, said, “We would not be the first mover,” adding that SBI will not be too worried as it has 34% of its total deposits in saving bank accounts on account of is wide distribution network. “We will have to see how other banks play it out and then we will take appropriate policy action,” he added.

By freeing the savings bank deposit rates, the RBI has demolished the last bastion of the regulated interest rate regime. As part of the economic reforms programme, the RBI had earlier given freedom to banks to determine fixed deposit rates, depending on their asset-liability positions.


Unease in Team Anna; Hazare hints at revamp

The thinking on reconstituting the team comes ahead of the crucial meeting of the core committee in Ghaziabad (Uttar Pradesh), on Saturday which will not be attended by Mr Hazare, who is on a vow of silence from 16th October

New Delhi: Social activist Anna Hazare Friday hinted at expansion of his core committee as a sense of unease gripped his team over allegations of financial misconduct by some of its key members, reports PTI.

The core committee of Team Anna will be expanded soon, journalist Raju Parulekar, who is Mr Hazare’s official blogger, said as two key members Medha Patkar and Kumar Vishwas demanded ‘overhaul; of the core committee.

He, however, declined to go into details of when and how the revamp will take place.

The thinking on reconstituting the team comes ahead of the crucial meeting of the core committee in Ghaziabad (Uttar Pradesh), on Saturday which will not be attended by Mr Hazare, who is on a vow of silence from 16th October.

The meeting comes against the backdrop of a series of allegations against key members like Mr Kejriwal and Ms Bedi as well as resignation of two prominent activists Rajinder Singh and PV Rajagopal citing the political turn taken by Mr Hazare’s anti-corruption movement.

Mr Parulekar also said Mr Hazare is contemplating forming a pan-India apolitical organisation to achieve his objective of a change in whole electoral system.

“The new outfit would aim at not playing the game of election but to change the rule of the game of election,” Mr Parulekar said adding “it will be an apolitical organisation.”

Though Ms Patkar and Mr Vishwas did not criticise Kiran Bedi and Arvind Kejriwal, who are facing flak over the running of their NGOs and their financial integrity being questioned, they have referred to the allegations faced by the core committee members.

“I don't think there is a difference of opinion. The only thing is a bit of overhauling is certainly becoming necessary because there are a number of allegations and core committee members are being targeted,” Ms Patkar, who will not be attending tomorrow’s meeting due to prior engagement, said.

Another prominent member Santosh Hegde will also not attend the meeting.

Mr Vishwas shot off a letter to Mr Hazare demanding suspension of the core committee and sought its expansion to make it more representative against the backdrop of Congress leaders targeting it.

“Such attacks (against Team Anna members) and the subsequent clarifications will strengthen the conspiracy to divert the attention from the key issues...I request you to give greater representation to the core committee consisting of limited members and turn it into a hard-core committee comprising of 121 crore people.

“I once again urge you to suspend the present core committee and create a new system to enable us to see a corruption-free new India,” Mr Vishwas, a lecturer-poet, said.

He said the leaders of the ruling party were targeting Mr Hazare and each member of the core committee and trying to tarnish their public image and credibility.

In a veiled attack on key Team Anna members, Mr Hegde said, “Anna’s strength does not lie in a core committee or the people’s honesty in the core committee.” However, he cited a prior commitment in Mumbai for not attending the meet and said there were no differences.

Meanwhile Rajinder Singh, who quit Team Anna due to differences over its political approach, alleged that Anna Hazare deviated from his objective by supporting a ‘corrupt’ candidate in Hisar bye-poll and that his team is full of ‘arrogant’ people.

Mr Singh also attacked Kiran Bedi and Arvind Kejriwal, alleging they were the ‘most arrogant’ members of Team Anna.

Being former bureaucrats they are in the habit of throwing their weight about and imposing themselves on others, he alleged.

Lawyer Prashant Bhushan, another member, also triggered a controversy by advocating plebiscite in Kashmir, evoking strong opposition from Mr Hazare and other team members.



S H Subrahmanian

5 years ago

I'm reminded of our popular sport: Cricket.
One fellow bowls 'as he doesn't want the ball'...! - intention to make the batsman out!
Ten around to make batsman out!
The batsman hits 'as he doesn't want the ball'...!
Why then he doesn't send the 'ball' tman who's there 'with open hands' to receive ...!
Ten thousand men in the stadium clap when one is declared out...!
The third umpayar now declares him '
not out'...!
And we at our homes mutter ...'it's match fixing' ...!
Indian democracy is just like this. The entire government machinery busy with targetting the whistle blowers ..How a revamp will take place?
Has the government succeeded in averting a bill and/or bring one ... Who's going to implement?

IDFC Premier moves in and out of stocks month after month

Mutual funds are supposed to be long-term investors. Why did IDFC Premier buy Tecpro Systems in August and sell it completely in September and sell Fag Bearings in August and buy it in September?

Most fund managers show you, by way of illustration, how a stock held over years can fetch you high returns, underlining the importance of ‘buy’ and ‘hold’. Do funds follow this approach in practice? Some even buy and sell the same stocks erratically for no apparent reason.

While looking at some fund data we came across some strange transactions in IDFC Premier Equity Fund. As per our data, the fund bought 9,67,545 shares of Tecpro Systems Ltd in August 2011 and then completely sold them in September 2011. Tecpro (listed in October 2010) has halved in value from the listing price. We also noticed that IDFC Premier had 200,000 shares of Fag Bearings at the end of July 2011, sold them completely in the immediate following month, that is, August 2011—and bought 247,602 shares in September 2011. What could be the reason for such frequent buying and selling? We asked the fund house but did not get a relevant answer. Indeed, a spokesperson replied that “we are long-term equity investors and don’t look at short-term opportunistic liquidity events.Given this, your query is factually incorrect” but was unwilling to show what was “factually incorrect” about the data. The data for this is sourced from the Mutual Funds of India (MFI) database; MFI insisted that this information of buying and selling is absolutely correct because it is culled from the data submitted by the fund house itself.

Mutual funds are supposed to be the best bets for those who have no idea about markets and individual stocks. Picking stocks is a job that needs long years of knowledge and expertise and mutual fund managers are supposed to be experts in that game. Unlike millions of uninformed and emotional individual investors who, reacting to greed, buy high and then, reacting to fear, sell low, fund managers are supposed to know what to buy and when.

However, as we have been pointing out time after time in many of our articles on mutual funds, including some unusual fund managers are, after all, human and they too act like individual investors from time to time. They buy the wrong stocks; they buy at the wrong time; and they sell at the wrong time. They cruise along in a bull market confusing luck with performance and are shocked to find the market collapsing around them. They talk of value investing but hold on to expensive stocks hoping for one more rally. They chase momentum. Not all fund managers sport these patterns of behaviour always, but almost all of them do at some time or the other. As we said, they are human.

We have nothing against IDFC Premier. It is a well-performing fund. We wished to understand the factors behind its performance. The bizarre buying and selling from month to month is not confined to IDFC Premier. We will bring more stories of buying and selling by fund houses in the near future.




5 years ago

there ARE MANY MANY ISSUES WHICH MONEYLIFE CAN ADDRESS/REDRESS & DEAL with, but it does only what it wants to do. why?

Ramesh B

5 years ago

idfc-PEF,is midcap oriented fund.idfc-smalnmidcp fund is renmaed as Sterlingfund.idfc-imperial is largecap.
now,name of the scheme should be transperant enough to know the catagory of the fund.idfc schemes names doesnt reveal it true theme.SEBI to insist that scheme names should expressly reveal its
catagory.many AMCs title the schemes clearly it base theme/ xxmidcap,xxsmalcap fund...


5 years ago

SOme mischief here
Last 2 comments shows sender Sanjay but both are different people so Beware


5 years ago

There is nothing wrong in this transaction. Moneylife is making a big issue out of nothing. Look at funds in the last 5 years which have given negative returns. Surprised that Moneylife is checking in IDFC PEF which has performed excellently. Look at other equity funds which have barely given returns equal to a SB Account in the last 5 years.


5 years ago

My raising the query was not why idfc Premier fund manager did what they did?
My query is How did the the fund do this quantity of buying & selling when jointly the months volume of both the exchanges jointly also dont cover the transcation of idfc permier's transcation volumewise.
Many questions can be raised from this data?


5 years ago

All of the above only points out to omissions of stocks in the fact sheet. Can the writer please check with the company's in question on their shareholding list to see if the above is valid and if the shareholding is so volatile. If so then the motive is questionable. Else we are raising issues with just one side of the story...


5 years ago

Does needless whistle blowing lead anybody anywhere?


5 years ago

If only they are innocent what is the need to hide mentioning incorrect facts. Are they incorrect or is the MFI data incorrect. Every fund management decision undergoes a process. Let them put up the process note if their hands are clean. They should dare enough to prove either Cafe Mutual is wrong or the MFI data is wrong. Well done CAFE MUTUAL. Bring out more such facts and educate both the investing public and distributors.



In Reply to CSK 5 years ago

care mutual? what is that

suhas wakankar

5 years ago

the fund managers are professionals paid millions of rupees as salary out of money we investors invest. They are not innocent like us.They know what and why they frequently buy and sell stocks at heavy loss of investors money. May be they have personal interest and must be getting a big booty from companies for such action. This needs a serious
investigation from financial fraud/ criminal interest point of view.such act of misuse of investors money is nothing but a criminal offence


5 years ago

I would agree that the fund has been doing well. but such erratic buying and selling could be risky too. besides, Sanjay has also pointed out very relevant data. these all need to be put in perspective and analysed for better understanding.


5 years ago

There is nothing wrong what IDFC has done in managing portfolio.Buy and hold was a good strategy 15 year ago when stock market was not only the place of speculation.Now in stock market there is 85%-90% is speculation.Real investors had shied away from the stock market during the last 4 years.In this type of speculative market "Buy and hold" strategy is not at all good.Frequently churning of portfolio stocks is only the buzz word and only it help the scheme to perform better.Yes, i understand that cost of changing portfolio is there but it is not so important than the overall return the scheme can generate.For instance if some Mutual Fund holding the share of Reliance Industries for last one year think about erosion of AUM of that scheme so also the valuation of investor's money.I failed to understand why many MF are still holding Reliance Industries.If they would switch to Hero Honda or TTK Prestige or Bata India they would have got remarkable return.
I can definitely not admire the fund managers understanding of stocks.


Deepak R Khemani

In Reply to Ranjan 5 years ago

Was the fund manager an astrologer to know that Reliance will not perform and TTK prestige and BATA will perform? What you are saying can only be said in HINDSIGHT after looking at prices of these scrips and not in advance!

Sunil Bhagat

5 years ago

IDFC Premier is one of the best performing mfs in the mkt. It has been one of the better funds to limit the downside also. I think it is only human to make errors.As there does not seem to be a change in the fund management , I think we should wait and watch rather than raising such questions.



In Reply to Sunil Bhagat 5 years ago

If errors have given me better returns I would suggest other fund managers to follow queue. I have found critisizing for the heck of it is the current fashion statemenet

Ramesh B

5 years ago

surprised by such moves by IDFC-PEF.
rightly its a good fund,BUT one such unusual moves in the fund in the past-
it bought big chunk of Raj oil mills in IPO.
The share from around 120 went down to
40(now 23).the fund offloaded the share.but the reason for this move and loss is hard to digest..!


5 years ago

Please Check UTI Sunder
Nav 566
CMP 2700
Clear case of manipulation


5 years ago

Surprise to say Idfc bought tecpro in august 2011 9,67.545 shares but nse's total volume in techpro was 3,48,175 shares and bse had 101785
in August 2011 How & from where did Idfc bought 9.67 lac shares in august 2011.
Sept 2011 it was sold and bse data afor sept is 132001 and for nse sept data is 464346 shares How IDFC transacted this volume. Is it some book entries within the funds.



In Reply to SANJAY 5 years ago

Dear Mr. Sanjay,

u seem to have pointed out extremely relevant data. this should be shared with the AMC for better clarification. r u an IFA?


In Reply to SANJAY 5 years ago

Very logical point raised by Mr.Sanjay.Are these internal book entries between various schemes?


In Reply to Sundaram 5 years ago

Looks like some criminal manipulation of the books. Transferring gains/losses from one Fund to another. SEBI should investigate.

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