BANKING - 2017 JANUARY

January 1

SBI cuts lending rate by 0.90 per cent; automobile, home loans set to get cheaper.
State Bank of India has made deep 90 basis points cut in its marginal cost of funds based lending rate (MCLR) across all maturities. Following this cut, home, auto, personal and other loans will become cheaper.
With this cut, the one-year MCLR is at 8 per cent against 8.9 per cent. The new rates are effective January 1, 2017.
With this, the bank has reduced its benchmark lending rate by 200 basis points since January 2015, when the RBI started its rate cut cycle. One basis point is equal to one-hundredth of a percentage points.

NRIs can exchange defunct notes till June 30, others till Mar 31: RBI.
Resident Indian citizens who were abroad from November 9 to December 30 can avail this facility up to March 31, 2017 and NRI citizens, who were abroad during this period, can exchange their defunct notes up to June 30, 2017.
While there is no monetary limit for exchange for the eligible resident Indians, the limit for NRIs will be as per the relevant FEMA Regulations (Rs. 25,000 per person).
Citizens can avail this facility in their individual capacity once during the period on submission of ID documents, and on submission of documentary evidence showing they were abroad during the period and that they have not availed the exchange facility earlier.

Govt permits 12 PSU banks to raise Rs. 3,000 crore from market.
To strengthen capital base of public sector banks (PSBs), the government has allowed 12 lenders to raise nearly Rs. 3,000 crore via preferential shares over and above the Rs. 22,915 crore capital support committed to them in July last year.
The Finance Ministry granted approval to 12 proposals of PSBs to raise a sum of Rs. 2,914.038 crore through preferential allotment and permission given to raise Rs. 200 crore by United Bank of India through QIP mode.
The government had already infused a sum of Rs. 25,000 crore in 19 PSBs during FY 2015-16.

January 2

IDBI slashes lending rates by 40 bps to 9.30 per cent for 3 years.
IDBI Bank has takes the lead in slashing interest rate by announcing 40 basis points cut one of the steepest in more than three years. Borrowers seeking three year loans would be charged 9.30%, down 40 bps while six-month loans is pegged at 8.90%, down 35 bps.
IDBI Bank reduced rates in the range of 15 to 40% depending on the tenure of the loans. The bank would charge 9.15% on year loan against 9.30% now. the rate reduction would be effective from January 1.

Bank of Baroda enters into partnership with CNX: Report.
Bank of Baroda (BoB), a public sector lender has reportedly entered into a partnership with CNX Corporation (CNX) with an objective to provide collateral management services towards the loans against warehouse receipt sanctioned to the farmers through the network of the bank’s branches across the country.
CNX is engaged in providing warehouse management services relating to commodities and inventories which include collateral management services, field warehousing arrangements, inventory audit services, storage and preservation services, procurement services, etc.
Bank of Baroda is engaged in providing various services, such as personal banking, corporate banking, international banking, small and medium enterprise (SME) banking, rural banking, non-resident Indian (NRI) services and treasury services.

26 crore accounts open under Jan Dhan Yojana across country.
Over 26 crore accounts have been opened under Pradhan Mantri Jan Dhan Yojana across the country now. The Scheme was launched by the Prime Minister Narendra Modi on August, 2014 with the objective of covering all households with at least one bank account.
Under the Jan Dhan Yojna anyone who is India citizen above age of 10 years and does not have a bank account, can open the account with zero balance.
The scheme also provides facility of accidental insurance cover up to rupees one lac without any charge for the account holder.

January 3

HDFC launches OnChat for payments through Facebook's Messenger.
HDFC Bank has tied up with Niki.ai, the artificial intelligence firm funded by Ratan Tata & Ronnie Screwvala, to bring in 'conversational banking' - chatbots that facilitate commerce and banking transactions without getting out of the chat window.
The chatbot is presently available on Facebook messenger where it can be used for e-commerce transactions like booking a cab, ordering food or paying bill.
The HDFC Bank on-chat app is available to anyone and not just those with HDFC Bank accounts. "The chat opens a payment gateway through which transactions can be made using any bank account''.

SBI partners Coca-Cola, HCCBPL to promote digital payment.
State Bank of India, Coca-Cola India and Hindustan Coca-Cola Beverages have signed an agreement to enable over 2.6 million retailers and 5,000 distributors in conducting business transactions digitally.
Arundhati Bhattacharya, Chairman, SBI and T. Krishnakumar, Chairman & CEO HCCBPL & Region Director (South Asia) signed the MoU to forge the strategic partnership.
It entails initiating the digitisation processes among the retailers by on-boarding them into the SBIs digital payment options such as Buddy P2P, Buddy Merchant App. Coca-Cola and SBI will provide training to the retailers on new and evolving digital business transaction solutions.

Banks cut base rates; home, corporate loans to be cheaper.
Housing, auto and corporate loans are all set to become cheaper with half a dozen PSU and private banks steeply reducing benchmark lending rate by up to 1.48 per cent after spurt in deposits following demonetisation.
SBI along with PNB and Union Bank of India, slashed lending rates by up to 0.9 per cent, Home loan rate for ICICI Bank will come down between 0.45 and 0.6 per cent depending on quantum and category.
Kotak Mahindra Bank too reduced the MCLR rate by up to 0.45 per cent. The bank has reduced MCLR by 0.20 per cent to 9 per cent from 9.20 per cent for 1-year tenor.
Bandhan Bank is concerned, it has cut its MCLR by 1.48 per cent to 10.52 per cent, Oriental Bank of Commerce has reduced the one-year MCLR rate by 0.8 per cent to 8.60 per cent while Andhra Bank has brought it down by similar percentage point to 8.65 per cent.
Dena bank has reduced marginal cost of funds based lending rate (MCLR) by 0.75 per cent to 8.55 per cent for 1 year tenor.

January 4

Yes Bank ties-up with Bajaj Electricals for vendor financing using blockchain.
Yes Bank entered into a tie-up with Bajaj Electricals for vendor financing using blockchain solution, and announced to use the technology more aggressively as it saves over 70 per cent in cost.
As part of the tie-up, the bank has completely digitalised its processes when it comes to transactions with Bajaj Electricals and its vendors in such a way that blockchain solutions can be implemented.
This will help in clearing short-term working capital loans to Bajaj’s vendors almost instantaneously as against the present manual practices which take upwards of four days. ''There is an over 70 per cent cost reduction because of blockchain and the payback for our investments is 6-8 months''.

Paytm gets RBI's final approval to launch payments bank.
Paytm has received final approval of the Reserve Bank to formally launch its payments bank and it expects to start operations next month.
Payments banks can accept deposits from individuals and small businesses up to Rs 1 lakh per account.
Paytm Payments Bank, the aim is to build a new business model in banking industry, focused on bringing financial services to hundreds of millions of unserved or underserved Indians.
The company hopes to launch operations in February with the first branch coming up in Noida, Uttar Pradesh.


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