SBI tops ATM expansion in non-metros: Assocham

Mumbai, September 19: Country's largest lender State Bank of India (SBI) is more aggressive in expanding its ATM (automated teller machine) network in the non-metro and semi-urban centres as compared to its peers, according to a study by Assocham. "Unlike other banks, the State Bank of India (SBI) is expanding its ATM network in non-metro and semi-urban centres, faster than expansion in the metros," the study based on the recent Reserve Bank data said. As compared to the 5,783 ATMs in metro cities, SBI has 7,511 and 6,419 ATMs in non-metro urban areas and semi-urban areas, respectively, the Assocham statement said.
SBI's peer in the state-run banks space, Punjab National Bank is the only other bank which has more ATMs in non-metro cities than the metros, it said. The objective of financial inclusion can be better achieved by the usage of technological interventions, including ATMs, and public sector banks have an important role to play in the objective, Assocham Secretary General D S Rawat was quoted as saying.
Overall, the private sector banks, led by Axis Bank have gone about expanding their network through ATMs in a much more aggressive way than their public sector peers.  Be it, ICICI Bank, Axis Bank or HDFC their bias and preference for ATMs is for the metro cities, followed by tier two cities.Among the private sector banks, Axis Bank has the largest (10337) ATM network, followed by HDFC Bank with 9709 such machines and ICICI Bank - 9366 ATMs.
Excepting the SBI, the other banks have to go a long way before achieving the financial inclusion in the semi-urban and rural areas.
“The Finance Ministry is rightly very keen of achieving the financial inclusion of a large number of people in rural areas.  This can best be achieved by leveraging of technology and use mobile telephony and ATMs. Somehow, the public sector banks will have to take a lead in these areas. Even their brick and mortar branch network is wider in the rural and semi-urban areas than the private sector banks,” ASSOCHAM Secretary General D S Rawat said.
He said while a good beginning has been made, pooling of technology resources like the ATMs should be encouraged so that optimum use can be made to the advantage of the people. The ASSOCHAM quoted honourable Finance Minister Mr P Chidamabaram who recently noted how even the trade has not been fully brought into the banking network.
“As was pointed out by the Finance Minister, today traders are not able to deposit their cash of sales proceeds at night in any bank. In the process, they have to keep it either in the shop premises or at home taking the risks of theft and other insecurity issues. We must have technology-driven day and night banking so that a wider section of the informal economy is brought into the banking network,” Mr Rawat said. While the RBI has been expressing concerns over regulatory issues over the mobile banking, sooner or later different technology platforms have to converge and the regulators need to equip themselves to deal with new challenges and opportunities.
The ASSOCHAM said a large number of Indians still remain outside the banking network.  It is because of lack of the organized banking that the gullible people in semi urban and rural areas fall prey to unscrupulous money-lenders. “The institutions of micro-finance did make a good beginning. However, because of certain corporate governance issues, the entire experiment has become rather overshadowed by controversies. The use of technology to reach out to the bottom of the pyramid promises a lot of scope,” the ASSOCHAM Secretary General said.

SBI for nearly six-fold rise in PoS terminals to 1,00,000 by March

Mumbai, September 5: State Bank of India, the country’s largest lender, plans to take its point of sale (PoS) terminals to 1.00,000 by the end of this financial year, to expand its current account (CA) base. “Our current PoS terminals are 18,500 and we plan to take it to 32,000 by October and 100,000 by March,” R Karthikeyan, chief general manager, corporate strategies and new businesses, told reporters on the sidelines of the Ficci-IBA banking summit.
SBI had engaged Visa International and Elavon as joint venture partners for setting up 6,00,000 PoS terminals across the country. However, this was called off in January this year, over differences on sharing of technology. The volume of transactions through a PoS is about Rs 4 crore a day for SBI, with the average size being Rs 2,800. Axis Bank is the market leader in this segment, with around 2,30,000 PoS terminals.
SBI is the largest debit card issuer in the country. It had about 100 million cards as of June. “We want to leverage this number to expand our PoS terminals,” said Karthikeyan. “This is a part of our endeavour to promote more electronic transactions.” He said the bank would look to Tier-II and Tier-III towns and even rural areas to expand the base.
The bank’s Current Account share at the end of the first quarter was Rs 83,485 crore or 8.1 per cent of total deposits, down 187 basis points sequentially from 10 per cent.

Banks should compensate customers for local cheque clearance delay: RBI

Mumbai: The Reserve Bank of India, or RBI, has directed banks to compensate customers for any delay in clearing local cheques. This would mean that banks will have to compensate customers monetarily if a cheque to be credited in an account on Monday, for instance, gets delayed till Wednesday.
In a note to the chiefs of all banks - both commercial and co-operative - the RBI said they should have a cheque collection policy containing details of the amount they would pay customers for any delay in collection and clearance of cheques. If this policy does not include the amount payable for delays, the bank will have to pay the savings account rate to customers as compensation, the central bank said.
"Banks are advised to reframe their cheque collection policies (CCPs) to include compensation payable for the delayed period in the case of collection of local cheques as well. In case, no rate is specified in the CCP for delay in realisation of local cheques, compensation at savings bank interest rate shall be paid for the corresponding period of delay," a statement issued by the RBI on Monday said.
Private banks such as Yes Bank, IndudsInd Bank and Kotak Mahindra Bank offer savings rate in the range of 5.5% to 7%, while state-run banks and some private banks like HDFC Bank, ICICI Bank and Axis Bank, pay 4% on similar accounts. The RBI had, in May last year, raised the savings rate from 3.5% to 4%. Many banks started offering higher rates after the central bank deregulated savings rate last October.
The RBI's decision to link compensation to savings bank account rates comes after it received several complaints from customers about delays in cheque clearance. "Instances of delayed credit to customers' accounts without any compensation for the delayed period beyond the timeline indicated in the CCPs, in respect of local cheques, have been brought to our notice," the RBI release said.

HDFC Bank overtakes SBI as India's most valued bank

Private sector lender HDFC Bank today surpassed SBI as the country's most valued bank with a total market valuation of about 1,37,500 crore.
SBI shares were seen trading under pressure with a fall of nearly 2% this afternoon, despite an overall uptrend in the market, while HDFC Bank shares gained by more than 3%.
The market benchmark Sensex was trading more than 200 points higher on broad-based buying among blue chips.
As a result, HDFC Bank's market capitalisation rose to Rs 1,37,500 crore, as against SBI's 1,32,700 crore, as per the BSE data.
At close yesterday, SBI was the country's most valued bank with a total market cap of Rs 135,360 crore, followed by HDFC Bank (Rs 133,375 crore), ICICI Bank (Rs 1,04,558 crore), Axis Bank (Rs 41,657 crore) and Kotak Mahindra Bank (Rs 40,178 crore).
At 1415 hrs today, HDFC Bank shares were trading 3.1% higher at Rs 584 after scaling an intra-day high of Rs 588.
On the other hand, SBI was down nearly 2% at Rs 1,977.40 at the BSE, while ICICI Bank was up 2.5%, Axis Bank was up 2.1% and Kotak Mahindra was trading 1.6% down.
In terms of market cap, HDFC Bank and SBI were followed by ICICI Bank (Rs 1,07,221 crore), Axis Bank (Rs 42,541 crore) and Kotak Mahindra Bank (Rs 39,547 crore) at 1420 hours.

Foreign investors lap up SBI dollar bonds

Mumbai, July 26: The country’s largest lender, State Bank of India (SBI), has raised $1.25 billion from investors abroad at 4.125 per cent, for five years. This was the second largest single tranche bond sale that garnered overwhelming response, despite recent concerns expressed by international credit rating agencies on the country’s economy.

SBI’s dollar-denominated bonds were subscribed 5.4 times. They got $6.8 billion from around 350 accounts spread over Asian, European and US investors. The lead managers to the issue were Deutsche Bank, Citibank, Barclays, Bank of America Merrill Lynch, JP Morgan and UBS.

In 2010, SBI had raised $1 billion for five years at 4.5 per cent.

“This issuance has certainly provided a window of opportunity to other high-quality Indian issuers to tap the international bond markets,” said Rajiv Nayar, head of capital markets origination at Citi India. He said the SBI notes were priced at the lowest ever coupon...

SBI raises $1.25 b from overseas bond sale

New Delhi, July 26:  State Bank of India raised $1.25 billion from an overseas-dollar-denominated bond sale on Thursday. This is the largest single-tranche offering by a public sector bank from India.

The bank’s London branch issued 4.125 per cent five-year-notes due in July 2017 at 375 basis points, spread over five-year US Treasuries. The notes offer the lowest ever coupon achieved for an Indian issuer in the US dollar bond market in the five-year tenure, said a banker close to the development. The notes, a debt instrument, are rated Baa2 by Moody’s and BBB- by Standard & Poor’s.

This is also the first public sector bank US dollar bond issuance out of India since May 2011. The last dollar-denominated bond offering by an Indian company was in February when Axis Bank raised $500 million (in the form of five-year medium-term notes) at 440 basis points spread over five-year Treasuries. SBI had hired six global giants — Citigroup, Barclays, Bank of...

SBI's $1 billion international bond issue opens

Mumbai, July 25: State Bank of India on Wednesday launched an international five-year bond sale programme to raise at least USD one billion. When contacted, SBI Managing Director and Group Executive for International Banking Hemant Contractor said that the bank on Wednesday launched its benchmark bond sale through book-building route.
"The issue is open and the details like pricing and the quantum of funds being mobilised will be known only by late night," Contractor said. A benchmark bond issue typically aims to raise more than USD 500 million. According to sources, the bond issue is of over USD 1 billion size with a five-year tenure.
The issue's investment bankers include Bank of America Merrill Lynch, Barclays Capital, Citigroup, Deutsche Bank, JP Morgan and UBS. SBI launched a marketing campaign for its benchmark bond issue on July 16 in Hong Kong, Singapore, London, New York, Los Angeles, Boston, Frankfurt and Zurich.
The bank has a board mandate to raise USD 10 billion from overseas markets over the next few years, and it has a headroom to raise nearly USD 7 billion more since it has raised USD 4 billion. The senior notes offering, which has been rated as 'BBB-' by Standard & Poor's, is a dollar-denominated issue. Giving the 'BBB-' rating on the SBI bond sale, S&P had earlier said this reflects the long-term counterparty credit rating on the bank. "The proposed notes will constitute direct, unconditional, unsecured, and un-subordinated obligations of SBI," S&P said.
SBI's move to raise overseas funds comes in the wake of the recent RBI steps to stem the falling rupee value and measures to encourage foreign debt inflows. Earlier, ICICI Bank and India Overseas Bank had initiated their respective dollar bond plans and had also hired investment bankers, but the offerings were delayed amid tough market conditions.
While Indian Overseas Bank was aiming to raise about USD 500 million, ICICI Bank was eyeing USD one billion through a bond sale. A slew of sovereign downgrades in the past few months have made it difficult for domestic companies to raise overseas debt. So far this year, a sum of USD 4 billion has been raised by two corporates -- USD 3.5 billion by Reliance Industries in two instalments in February and May, and USD 500 million by Axis Bank.
The fourth issue which is underway now, is again from RIL, to raise another USD 1.5 billion, for which market making meetings are beginning tomorrow in Singapore. However, domestic companies had raised over USD 8 billion through dollar bonds in 2011.