Kotak Bank suffers derivative burns

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Kotak Mahindra Depository Financial Institution vice-chairman and managing manager Uday Kotak in Mumbai on Friday. (PTI)

Mumbai, May 9: After ICICI Depository Financial Institution and the State Depository Financial Institution of Republic Of India (SBI), it’s now the bend of Kotak Mahindra Depository Financial Institution to take a derivative hit.

The private depository financial institution today said it had made a provisioning of Rs 86 crore to cover the mark-to-market (MTM) losings of its clients on business relationship of forex derived function transactions.

The depository financial institution have got around 45 clients, having exposure to forex derivatives, who have suffered MTM losings of Rs 612 crore on business relationship of forex minutes as on May 8, 2008.

MTM is the pattern of assigning a value to a fiscal instrument based on its current marketplace price.

“We carry a proviso of Rs 86 crore toward stressed assets. In this respect (exposure to forex derivatives), the depository financial institution have no exposure to SME clients,” Uday Kotak, the bank’s vice-chairman and managing director, told newsmen here today.

A host of lenders, including the SBI and ICICI Bank, have made commissariat on business relationship of losings of their clients in forex transactions.

The SBI have made a proviso of $10 million (around Rs 40 crore) to cover forex losings of its clients, which is in the scope of Rs 600-700 crore, while ICICI Depository Financial Institution have made provisioning of around $170 million (around Rs 680 crore).

On a amalgamate basis, Kotak Mahindra Depository Financial Institution posted a net income growing charge per unit of 41 per cent for the 4th one-fourth ended March 31, 2008. Net net income grew to Rs 240 crore from Rs 170 crore in the same time period last year.

Net net income for the full twelvemonth rose 84 per cent to Rs 991 crore (Rs 538 crore). The standalone Numbers for the one-fourth showed a net income growing of 86 per cent to Rs 69 crore.

Kotak Mahindra Depository Financial Institution said amalgamate fee income was up 59 per cent to Rs 1,676 crore in 2007-08 from Rs 1,053 crore last year. For the 4th quarter, fee income was up 37 per cent to Rs 407 crore from Rs 297 crore in same time period last year.

Consolidated progresses was up 41 per cent year-on-year to Rs 21,985 crore as on March 31, 2008, with retail and commercial loans comprising 89 per cent of the portfolio. Consolidated network involvement border (NIM) for the twelvemonth was a strong 5.6 per cent.

Deposits of the depository financial institution grew 49 per cent to Rs 16,005 crore (excluding impermanent sedimentations held as aggregation bankers to IPOs) as on March 31, 2008 from Rs 10,251 crore last year. Current and economy business relationship sedimentations comprised 27 per cent of entire sedimentations (22 per cent) and entire Numbers of sedimentation business relationships have got more than than doubled at 749,000 as on March 31, 2008 (350,000), the depository financial institution reported.

SBI looking to sell products via e-gram

The Gujerat government-pioneered e-gram project, which takes to ease e-governance inaugurals in small towns through a cardinal information and communication theory engineering (ICT) system could soon also move as a concern facilitator for banking products.

State Depository Financial Institution of Republic Of India (SBI) is working on this project, which would see e-gram kiosks be able to ease checking of business relationship balance, deposits, loans, coverage and other banking services through the Internet in bicycle-built-for-two with the nighest SBI branch.

"This is for the first clip a undertaking like this would be taken up in the country. Through this service, people from rural countries who dwell far away from a depository financial institution subdivision will be able to help of banking merchandises without having to personally see the nighest branch," said HC Pattnaik, main full general manager, SBI (Gujarat).

He added that Vadodara and countries near the metropolis would in most likeliness acquire the nod for the airplane pilot execution of the project.

SBI's subdivisions are under the core banking system and modes are being worked out on whether the rural ICT booths would be compatible with the engineering or a new platform would have got to be created. The depository financial institution is looking at targeting more than than 5,000 rural ICT booths in the adjacent 1 twelvemonth to duplicate up as its banking facilitator.

Under the Modesty Depository Financial Institution of Republic Of India guidelines, Banks are permitted usage of services of non-governmental organisations/self-help groups, microfinance establishments and other civil society arrangements as mediators in providing fiscal and banking services through the usage of concern facilitator and letter writer models.

A concern facilitator can set about designation of borrowers, aggregation and preliminary processing of loan applications, selling merchandises and follow-up for recovery whereas a concern letter writer can set about activities such as as expense of little value credit, recovery of principal or aggregation of involvement and little value deposits.

The bank's other rural initiative, SBI Tiny account, could also come up to Gujerat this year. The enterprise will enable villagers to begin a depository financial institution business relationship with sedimentation amount as low as Rs 50. The business relationship can be maintained with zero balance.

Also, a concern letter writer for SBI can utilize his/her cellphone to enter minutes which, in turn, is connected to a cardinal waiter in Mumbai. The undertaking is currently being piloted at Arunachal Pradesh and Uttar Pradesh.

"We are looking at concern from facilitators and letter writers to travel up increasingly. In the adjacent two years, we could gain as much as Rs 1 crore per twelvemonth from each of the facilitator Centres we tie in with," said Pattnaik.

Under the concern facilitator model, SBI have already signed an MoU with Republic Of India Post to move as a facilitator for 50 station business offices in a airplane pilot undertaking at Surendranagar, Anand and Bharuch territories in Gujarat. It have also signed up with Gujerat Agro Industries Corporation to marketplace the bank's merchandises in 700 mercantile establishments of the 1,200 mercantile establishments in the state.

Further, SBI is looking at milk labor unions as facilitators. It have signed MoUs with Sabarkantha Dairy, Dudhsagar Dairy and Amul. The depository financial institution is looking to bind up with 7-8 more than co-operatives inch the adjacent 1 year.

SBI joins Chinese bank to touch 10,000 branches

PUDUVAYAL:
Public sector State Depository Financial Institution of Republic Of India on Lord'S Day became only the 2nd depository financial institution in the
world to have got 10,000 subdivisions when Union Finance Curate Phosphorus Chidambaram
inaugurated its up-to-the-minute subdivision here. Speaking on the occasion,
Chidambaram said China's ICBC Depository Financial Institution was the other depository financial institution to have got 10,000 branches. Opening 10,000 subdivisions was a
great feat. "It is not an easy milepost though the SBI was the depository financial institution of the
government and Indian people even before other Banks were nationalised," he
said. People all over the
world, including the Chinese, would now cognize about this little small town where the
10000th subdivision of the SBI had been opened, he said adding they would be amazed
by the bank's growth. The bank
should be proud of the accomplishment he said and wished that the depository financial institution opened one
lakh branches. "Chairman of
the 202-year old depository financial institution Omprakash Bhatt was indeed a more than powerful adult male than me
because he handled Rs nine hundred thousand crore (business) whereas my budget is only for
Rs eight hundred thousand crore," he said. The Curate said out of the
over 100 crore people, 70 75 per cent did not have got any type of insurance. Similarly, 50 per cent of the 11 crore husbandmen did not have got depository financial institution account. Banks
should travel to the people and inscribe them as business relationship holders. 'That is what
economists state is fiscal inclusion,' he said.

NBFCs' bourse activity worries RBI

The Modesty Depository Financial Institution of Republic Of India have told Parliamentarians that it is concerned over the stock marketplace exposure of assorted non-banking fiscal companies (NBFCs) promoted by leading Banks in the country.

At a meeting with the Parliamentary Standing Committee on Finance on February 12, the cardinal depository financial institution said some Banks were circumventing prudential norms for working capital marketplace exposure through these NBFCs.

On February 12, the Committee had met functionaries of the Modesty Depository Financial Institution of Republic Of Republic Of India and the State Depository Financial Institution of India, besides representatives of the investor and agent communities.

A member of the Standing Committee, who attended the meeting, said the run batted in officials, when questioned about the engagement of Banks in the stock market, told them that the cardinal depository financial institution was "worried".

Another Committee member said the run batted in had pointed out that most Banks were within the bounds put for working capital marketplace exposure, but said some may have got breached the norms. "The run batted in told us it is monitoring the state of affairs keenly," he said.

Earlier, on January 25, Business Standard had reported that the run batted in had sought information from the NBFCs on their investing and funding activities in the working capital marketplaces over the last two months.

Estimates nail down NBFC exposure to the working working capital marketplace at Rs 70,000 crore and it is believed that most NBFCs have got far exceeded the stipulated ceiling on capital marketplace exposure to single physical things or corporate groups. Sir Joseph Banks have got a bounds of 5 per cent of incremental sedimentations to be deployed in the working capital market, while NBFCs are not subject to an overall ceiling.

Meanwhile, the Committee, which met here again today, posed a figure of inquiries to senior finance ministry functionaries on the recent volatility in the stock market. Cutting across political party lines, the mononuclear phagocyte system demanded greater transparence and answerability in the working capital market.

"There is absolutely no transparence in the rating and pricing chemical mechanism of initial populace offerings (IPOs). The evaluation companies are paid by the initial public offering companies to make the ratings. We wanted to cognize from the finance ministry how more than transparence can be brought in this process," an military policeman said, adding that there were grounds to believe that large corporate participants were trying to flex regulations and pull strings the stock market.

"We desire the stock marketplace to go more than than crystalline and there should be more answerability in the stock market. Our study will take to supply suggestions in this regard," said Rupchand Pal, member of the Committee and main whip of the CPI(M) in the Lok Sabha.

Committee member Degree Centigrade Ramachandraiah of the Telegu Desam Party have written to Prime Curate Manmohan Singh today seeking contiguous policy intercession to forestall the Indian working capital marketplace from slipping into a meltdown.

"The larger inquiry is about the function of the stock marketplace regulator. Are it not prudent that Securities and Exchange Board of Republic Of India (Sebi) be entrusted with the duty to inform investors about the pricing of public issues," he said.

Committee members also asked the ministry functionaries whether the recent volatility in the stock marketplace was on business relationship of the issue of foreign institutional investors (FIIs).

The adjacent meeting of the commission is scheduled for February 28. The commission have asked the ministry to submit written answers to the queries, based on which it will set up its report.

The Standing Committee, which is headed by BJP military policeman Ananth Kumar, also queried functionaries about some of the proposals mooted by Sebi that are yet to acquire clearance from the corporate personal business ministry.

"There was a proposal to make investors protection monetary fund but the corporate personal business ministry is sitting on it. We wanted to cognize from the authorities what happened to these proposals," a member of the commission said.

SBI, Coface in race for Global Fin stake

State Depository Financial Institution of Republic Of Republic Of India (SBI) and Coface, a planetary recognition coverage and factorization company headquartered in Paris, have got been shortlisted for purchasing the 52.5 per cent interest in India's prima factorization company, Global Trade Finance (GTF). The concluding bidder will be chosen in a week's clip and the trade is likely to fold by January end.

The boosters of GTF, Export-Import Depository Financial Institution of Republic Of India (Exim) and International Finance Corporation (Washington) had some calendar months back decided to sell their stake.

Exim Depository Financial Institution of Republic Of India and International Finance Corporation (Washington) currently throw 40 per cent and 12.5 per cent interest respectively. The other stockholders are FIM Depository Financial Institution Malta, with a 38.5 per cent stake, and Depository Financial Institution of Maharashtra (9 per cent).

A host of private equity players, foreign Banks and public sector Banks had evinced an involvement in purchasing into GTF. The investors who had submitted looks of involvements (EoIs) were JP Lewis Henry Morgan Financial, germanium Financial, Warbug Pincus, Actis (a private equity fund), Standard Chartered Bank, State Depository Financial Institution of Republic Of India and Coface.

The two boosters Exim Depository Financial Institution and International Finance Corporation American Capital will sell their interest to the concluding shortlisted participant between Rs 80 and Rs 110 a share. The trade will fold by the end of January, said an executive director stopping point to the development.

The sum equity of GTF is 7.7 crore shares. At a terms of Rs 110 a share, the trade is valued at Rs 900 crore.