Invest In India » State Bank Of India

Rs. 1 crore to open an account with SBI

Tushar Mathur — Sat, 04 Sep 2010 13:23:23 +0000

After extending the service to urban middle class and rural poor State Bank of India (SBI) is now aggressively targeting the millionaires of the country.

This move by the bank is to shed its PSU image. By this move it has it taken straight fight with other foreign and private banks.

After the scheme of ‘One Rupee Bank’ account for poor, SBI, the biggest bank has opened first-of-its-kind branch for high networth individuals (HNIs). The Bank has open has inaugurated its first branch for HNIs in Hyderabad on September 2 and it takes Rs. 1 crore to open an account, and that too on an invitation only.

However money is not the only criteria, the individual interested in opening an account has to undergo a tough application process.

The first ‘Crorepati Only’ branch is named after the Kohinoor diamond that was found here. ‘Kohinoor Banjara Premium Banking the swanky branch, spread over 4,000 sq ft, will see SBI roll out the red carpet for Hyderabad’s nawabs, nouveau and old. It will offer them specialized banking facilities like personalized relationship managers, 24/7 lockers, extended banking hours, doorstep pick-up and drop facilities, in addition to pampering with five-star amenities at the branch
In an interview to PTI, SBI Chief General Manager Shiva Kumar, said “We have opened as many as 50 accounts so far. We are confident of opening another 150 by the end of the current fiscal.”

Diwakar Gupta, Deputy Managing Director, SBI, said while the bank has over 150 branches catering to HNIs, this centre is based on a different concept.

According to bank officials, an attractive feature of the branch is its lockers. “They are open 24 hours. People can come anytime and take or keep their jewellery and other valuable items. We have special dressing rooms for customers. These will be useful for late night function goers as they would not have to take the valuables home.”

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Rs. 1 crore to open an account with SBI

Loans to get costlier as PSU’s increased their base lending rate

Tushar Mathur — Tue, 17 Aug 2010 03:07:45 +0000

State Bank of India (SBI), the country’s largest banking player on Monday beefed up its benchmark lending rate by 50 basis points to 12.25%.

This increase in the base lending rate by the SBI signals the dripping down of the Reserve Bank’s policy of tight money.

State Bank, which along with its associates control a quarter of bank loans and deposits in India, said it was raising its benchmark prime lending rate (BPLR) 50 basis points to 12.25% effective from 17^th of August 2010.

This will make home, vehicle and corporate loans to existing customers costlier. However, for new borrowers the base rate, which became effective from 1 July this year, stands at 7.5 per cent.

SBI also raised its fixed deposit rates by up to 150 basis points across various maturities.

The decision comes days after RBI increased its key rates to control rising prices.

The Reserve Bank of India has increased its main short-term lending rate by 100 basis points since mid-March and the borrowing rate by 125 points, to curb inflation that has stayed in double-digits for 5 months.

Meanwhile, other public sector banks (PSU) have also revised their money lending and deposit rates. Punjab National Bank, the country’s second largest lender, has increased its benchmark prime lending rate by 75 basis points. This is the sharpest increase among all lenders.

Bank of Baroda, Corporation Bank and Oriental Bank of Commerce have also increased their standard lending rates by 50 basis points.

©2009 Copyright by Invest In India
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Loans to get costlier as PSU’s increased their base lending rate

The Increasing Wealth Management Services

Tushar Mathur — Mon, 29 Mar 2010 07:54:04 +0000

There are people who have a lot of money, but don’t know how to invest or deposit it wisely.   They just leave it in the bank as dead asset. Sometimes they trust their friends or relatives and invest in some foolish schemes. These schemes may or may not give them returns. This is where the Wealth Management Services come in.

Like any other service sectors, this too serves you. These Wealth Management Services do nothing except to give advices, as and when you need, to increase your wealth. They are the experts in the financial field and know the latest trends and movements of financial institutions like banking, insurance, shares, property etc.

It was a monopoly of the wealthy people before. But now, with the laymen becoming more and more aware of shares, mutual funds, gold funds and other profit making fields, Wealth Management Services are increasing by the double every year. Almost all the leading banks have started their own Wealth Management Service section. This service is offered by the Canara Bank and State Bank of India. Private Banks like ABN Amro, Citigroup, ICICI etc. also give this facility.

These Wealth Management Services are targeting the NRI’s primarily, because they bring the biggest chunk of foreign money, which amounts to about $500 billion. Thus they are the largest customers of Personal Wealth Management sector in India. Before, these NRI’s had to depend on foreign Wealth Management Services to manage their funds. With the increasing number of such services here (in India) itself, they don’t have to look abroad now.

Preparing a budget is not what the Wealth Management Services do. They help you to plan and save for your future. They help you to manage your money wisely and make more profits.   Provide the executives of these services, the details of your income and other earnings, and then you can relax. They will plan everything else for you, to build your financial status.

©2009 Copyright by Invest In India
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The Increasing Wealth Management Services

Best Banks in India – Career Wise

Tushar Mathur — Sun, 14 Mar 2010 04:36:53 +0000

Indian Banking Sector

In India Banking is still in the developing stage. A big part of it is under the control of the states. India’s largest bank, The State Bank of India, is very small compared to the globally large Citibank. According to The Banker magazine, SBI is only one tenth of Citibank, which is a sister concern of Citigroup in the USA. The next biggest bank in India is ICICI, which is only half the size of that.

Development

Like the other sectors in India, developments in banking sector are also showing promises. With the IT boom, banks too have taken giant leaps. They have started to show more hospitality; have become more customer-friendly and are easily accessible. Banks have become indispensable to people with the facilities like ATM, Net Transaction, and Mobile Accessibility etc.

Career

In India, banks are classified into 3; the Public Sector Banks, the Private Sector Banks and the Foreign Banks. Of course, the Public Sector Banks, with government stakes in it, are the best option for job seekers because of the job security. But if you are after monitory benefits and high profile work environment, seek out Foreign Banks.   Though they are guided by the RBI rules and regulations, government has no stake in the Private Sector Banks. The payment, job security, work environment all will be accordingly. In short, the key word is finding a bank that grows and adapts, a bank that will give you good experience and chance to diversify.

Most Suitable

Business Today and Financial Express clearly states that Corporation Banks is the most sought after national banks. Multinationals like Bank of America, HSBC, ABN-AMRO and Citibank are also good choices. In the Private Sector too there are some that has good reputation in terms of customer satisfaction and business volume. If you are service minded and don’t care for job security and monitory gains one of them will be ideal. HDFC Bank, ICICI Bank and Federal Banks are some of the reputed private sector banks.

©2009 Copyright by Invest In India
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Best Banks in India – Career Wise

Slowly banks are raising fixed deposit rates

Tushar Mathur — Fri, 26 Feb 2010 10:55:00 +0000

In the coming months fixed deposit can again be a good investment option as the deposit rates are on their way up. But the things will get better in fiscal 2010-11.

Last week HDFC Bank had raised its deposit rates by 25-150 basis points (one basis point equals one-hundredth of 1%) across various terms. Earlier this month, IDBI Bank and ICICI Bank had raised the deposit rates by 25-50 basis points for some maturities, while J&K Bank had raised rates by 75 basis points on deposits above one year. The public sector Union Bank of India is proposed to raise deposit rates later this week. More banks are likely to follow the suit.

According to analysts the bigger banks will join the bandwagon to remain in competition. Ashish Gupta and Deepak Ramineedi, analysts at Credit Suisse, wrote in a report dated February 22, “With these rate actions, State Bank of India and ICICI Bank deposit rates are now at a 50-100 basis point discount (for some maturities) and they will now need to follow suit.”

But big bankers disagree with it. OP Bhatt, chairman, SBI, said in Delhi that his bank will not raise deposit rates before May-June as it has surplus liquidity (the amount of free money it had to give out as loans).

By the end of December 31, 2009, the bank liquidity was whopping over Rs 75,000 crore.

MD Mallya, chairman and managing director, Bank of Baroda said, “There is ample liquidity in the system. Hence, at the moment we are not looking at raising interest rates on deposits.”

But Gupta and Ramineedi of Credit Suisse said that “as loan growth (14.8% currently) accelerates and the central bank starts tightening money, this liquidity will also dry up soon.” In the recent past banks’ deposit growth rates have declined as much as four-year low of 17%. Therefore, banks raise lending rates then deposit rates have to rise.

©2009 Copyright by Invest In India
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Slowly banks are raising fixed deposit rates

Banks report surge in Casa ratio as against fixed deposits

Tushar Mathur — Thu, 04 Feb 2010 11:24:00 +0000

In the past few months term deposit rates have lost sheen as banks have reduced rates. Now people prefer to park their money in current account savings accounts (Casa) rather than investing their money in fixed deposits for longer duration. Banks have reported a significant rise in their current account savings accounts (Casa) ratio for the quarter ended December 31, 2009.

State Bank of India (SBI), country’s largest commercial bank is the major one to witness surge in the ratio of its Casa. Bank’s Casa surged to 42.94 per cent as on December 31, 2009, against 36.58 per cent in the corresponding period a year ago, thereby registering a growth of 29.94 per cent. Earlier in the same period SBI overall deposits growth stood at 11.26%.

When bank Casa ratio increases its cost of funds comes down. On the other hand HDFC Bank Casa ratio surged close to 49 per cent as on December 31, 2009, as against 40 per cent as on December 31, 2008. And, as of December 31, 2009 the savings account deposit of HDFC Bank stood at Rs 46,696 crore, registering a growth of 41.2 per cent over December 31, 2008, whereas current account deposits amounted to Rs.33,276 crore as of December 31, 2009, a growth of 37.2 per cent over December 31, 2008.

Ashish Parthasarthy, head of treasury, HDFC Bank, said, “We traditionally have the highest Casa ratio in the industry. Since, the difference in interest rates offered on term deposits and savings are not significant, many people prefer to keep their balance either in current or savings accounts, which is resulting in higher Casa.”

A similar trend was also reported from ICICI Bank, the largest private sector bank in the country. ICICI Bank Casa ratio registered at 39.6 per cent at the end of third quarter of the present financial year as against 27.4 per cent on December 31, 2008 and 36.9 per cent on September 30, 2009.

Regarding savings deposits ICICI Bank reported an increase of Rs 1,736 crore and in case of current deposits it was Rs 3, 581 crore, during the quarter ended December 31, 2009. Besides major players improvement in Casa ratio was also reported from mid-size and smaller banks such as Yes Bank and IndusInd Bank. Improvement in low-cost deposits was also reported from these two banks.

Yes Bank Casa ratio increased to 10.1 per cent at the end of December 2009 from 9 per cent at the end of December 2008.

Rana Kapoor, founder Yes Bank told Financial Chronicle, “Though, our Casa is at 10.1 per cent, the share current deposit is much higher at 80 per cent, which effectively means that 15 per cent of our total deposits are low-cost deposits.”

©2009 Copyright by Invest In India
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Banks report surge in Casa ratio as against fixed deposits

Banks low-cost deposits share drop to a 10-year low

Tushar Mathur — Mon, 28 Dec 2009 11:35:00 +0000

In the recent times group of pubic sector banks has witnessed drop in their low-cost deposits, the drop is a 10-year low While individuals are preferring bulk deposits and more are depositing more money in fixed deposits, which offered higher interests a year ago.

Also, the opening of customer-savvy private sector banks is responsible for bringing down investments in low-cost deposits (savings and current account balances) at public sector banks.

This year public sector banks, savings and current account balances accounted to 31 per cent of their total deposits, which was 34 per cent in 1999 and was at peak of 38 per cent in 2066, as per the study conducted by Indian unit of London-based investment banking group, Noble.

But among the public sector banks there have been some of the exceptional banks like State Bank of India (SBI) and Bank of Baroda (BoB). SBI accounted increase in its savings and current account balances in its total deposit by 41 per cent at the end of September from 38 per cent in 1999. Although, in 2006 bank savings and current account balances was 48 per cent. While BoB, has witnessed increase of 36 per cent from 32 per cent.

According to an anonymous chairman of a large public sector bank, public sector banks took time in taking on competition from private sector banks such as ICICI Bank and HDFC Bank.

Private sector banks have got hold of salary accounts of companies due to marketing skills that they used in dealing with companies, especially with those having large number of employees, he said.

In 2007 there was rise in expensive term deposits and wholesale deposits of public sector banks’ deposit portfolio as liquidity in banks have got scarce amongst an unprecedented high credit growth, due to home and other retail loans.

In 2007, banks mostly laid stress on grabbing every bulk deposit available, in a bid some of the banks offered interest rates as high as 15 per cent in some instances. At that time the fight for bulk deposits between the banks intensified so much that the then chief executive of Indian Banks’ Association (IBA) had to meet the top officials at SBI on behalf of ICICI Bank.

The IBA official gave the message that the banks should stop increasing bidding for bulk deposits, as there was lack of faith on each other no solution could be found for this.

The ICICI bank low-cost deposits share in its total deposits stood at 13 per cent 10 years ago which has increased to 37 per cent.

While the HDFC Bank low-cost deposits showed high percentage. In September, bank low-cost deposits accounted at 50 per cent of total deposits, which is up from 46 per cent in 1999, although it has come down from 61 per cent in 2005.

Since 2004 HDFC Bank’s low-cost deposits share was above 50 per cent. However none of the banks have been able to achieve 50 per cent and more share of low-cost deposits in total deposits.

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Banks low-cost deposits share drop to a 10-year low

Top 10 Mutual Funds in India

Tushar Mathur — Thu, 03 Dec 2009 07:50:00 +0000

India can be an investors paradise or and investors nightmare. India was a region hit hard by the economic downturn of the last couple of years but has been bouncing back nicely from the nearly 53% lose taken last year. It has rebounded well though, much faster than other developing countries and many foreign investors are channeling funds into this “new” market. The top 10 current Indian mutual funds are:
• The Matthews India Fund offers investors specific exposure to India’s economy but investing in Indian start ups.
• Reliance Capital Asset Management managed more than one half times more money than it nearest competitor with more than $21 billion rupees in assets.
• Britain’s Standard Life Investments owns a large stake, 40%, in HDFC, India’s second largest private-sector lender. This firm managers $527 billion rupees in June and is still growing.
• Prudential Plc, a part of the British Financial services group, has a nearly 59% stake in ICICI Prudential Asset Management, with only ICICI holding the remainder.
• The State Bank of India and Punjab National Bank, along with Life Insurance Corp, all state run entities, each own 25% of UTI Asset Management which is the oldest mutual fund company.
• Birla Sun Life Asset Management is a joint venture between Aditya Birla Group and the Canadian insurer Sun Life Financial and manages $410 billion rupees.
• Societe General has obtained a 37% stake in SBI Funds Management, with State Bank of India, the largest bank in India. This fund manages $300 billion rupees.
• Franklin Resources Inc. owns India’s sixth largest fund, Franklin Templeton Asset Management and manages %247 billion rupees.
• Tata Asset Management is controlled by Tata Group, which controls more that $238 billion rupees in June. The firm is also allying itself with Britain’s New Star Asset Management, to manage New Star India’s India-dedicated funds.
• Kotak Mahindra Management is owned by Kotak Mahindra bank Ltd, which has an alliance with T. Rowe Price in an effort to launch global funds.
With India’s newly booming market opportunities, it may be just the place for savvy investors to squirrel away some money for better returns.

©2009 Copyright by Invest In India
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Top 10 Mutual Funds in India

IDBI Bank, Central Bank announces cut in deposit rates by 0.25-0.5 per cent

Tushar Mathur — Fri, 13 Nov 2009 09:19:00 +0000

Central Bank of India and IDBI Bank- two state-owned banks have slashed deposit rates by 0.25-0.5 per cent in various maturities in order to bring down the cost of funds.

Before country’s largest lender State Bank of India has reduced its deposit rates by a similar margin.

IDBI Bank revised rates will be effective from November 16 while the Central Bank has to yet announce the rate reduction officially.

After revision on one year to less than two years maturity deposits IDBI Bank offers a rate of 6.5 per cent as against 6.75 per cent, informed IDBI Bank sources.

On tenure 2 years to less than 1,100 days deposits, bank will offer rate of 7 per cent (7.25 per cent) while that of 1,100 days maturity deposits will now attract a rate of 7.25 per cent (7.5 per cent) earlier.

Moreover on 1,100-days to 5 years, 5-years to 7-years and 7-years to 10-years deposits bank will offer 7 per cent (7.25 per cent), 7.5 per cent (7.75 per cent) and 7.75 per cent (8 per cent) earlier, the bank said.

The bank said senior citizens will get 0.5 per cent above the card rate.

©2009 Copyright by Invest In India
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IDBI Bank, Central Bank announces cut in deposit rates by 0.25-0.5 per cent

Banks close deposit rates to where they were five years ago

Tushar Mathur — Wed, 21 Oct 2009 11:11:00 +0000

In the last few months the banks have slashed their deposit rates which have shrink depositors income. Banks have reduced interest rates (especially for deposits of up to one year) by about four percentage points in comparison to a year ago.

At present after the cut the deposit rates of 15 days to one-year period range from 3 per cent to 6.25 per cent per annum. Whereas five-and-a-half years ago, in March 2004, the peak rates for this time duration was about 5.25 per cent.

After that the deposit rates began to rise and gradually over the next few years, the deposit rates reached 8 per cent in March 2008.

Moreover banks started lending aggressively as the economic growth started improving.

For aggressive lending banks needed more resources thus they started increasing deposit rates.

However in the bulk market interest rates in the bulk fixed deposits market (deposits above Rs 1 crore) were equally higher by 0.50-1 percentage point. Thus the deposit rates of one-year tenure increased to 10.25 per cent a little over a year ago with the economy moving fast.

The global meltdown undulate also started effecting India, GDP numbers were reduced, as of loan growth figures. The banks also did not require extra liquidity as they had enough.

The investor’s confidence got shaken due to crisis but bank treasury continued to fill up even when they could not find lend-able opportunities for the money pouring in.

For instance State Bank of India for a few months received deposits at the rate of about Rs 1,000 crore a day which led it to set out the bulk money in the Reserve Bank of India’s reverse repo auctions that earned it 3.25 per cent.

Thus banks have been steadily reducing deposit rates for the past few months and now the rates have been closed to where they were five years ago.

After revision State Bank’s one-year deposit is at 5.75 per cent.

However some of the banks have reduced their rates deeper. Punjab National Bank, Union Bank and Indian Bank offer about 5.50 per cent for deposits of similar tenor while Bank of Baroda, a few months ago, pruned them to 5 per cent. While other bank’s deposit rates stand at 6.25 per cent.

©2009 Copyright by Invest In India
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Banks close deposit rates to where they were five years ago