Corporation Bank has launched three products in Mangalore - Corp Shubha Vivah (loan scheme to meet expenses related to marriage), Corp Ghar Shobha (loan scheme for house renovation/extension/furnishing) and Corp SB Smile (flexi savings deposit scheme for micro traders). The products were launched by P Shivshankar, chief executive officer, zila panchayat.
Narendra Singh, executive director of the Bank said, “Corporation Bank has always been responsive to the social realities and needs. We understand the financial difficulties faced by parents at the time of marriage of their children, especially daughters Corp Shubha Vivah is specially designed to take care of the entire marriage expenses”.
While explaining about the Corp SB Smile Scheme he said, “Hawkers and street vendors are an important link in the overall supply chain in our marketing system. But, they are not formally integrated into the system. Their banking needs are limited. Owing to the limited exposure to education, they are not comfortable with the banking system and hence they try to fulfill their banking needs outside the system with a daily collection account or sometimes a term deposit. The Bank has come up with a novel scheme Corp SB Smile, especially focused to cater to the needs of this segment.”
Narendra Singh said, “Corp Ghar Shobha is designed as a complete housing solution, providing financial assistance for repair, renovation, extension, improvement, and furnishing of house.”
Products
Corp Shubha Vivah loan has been designed specially to take care of the expenses related to marriage. The loan will cover the entire expenses related to marriage such as shamiana, hall booking, food and catering, purchase of jewelry, clothes, etc. The loan repayment period is 7 to 15 years and at present bank is offering loan at an interest rate of 12% (4.25% above the base rate).
Corp Ghar Shobha is a loan designed to provide complete housing solution. The loan covers cost of repairs/renovation/extension/improvement/furnishing of house/flat. This loan also covers consumer durables like refrigerator, television, washing machine, laptops, digital cameras etc. In the metro centers the maximum loan amount is Rs 10 lac. The loan can be repaid in the form of EMI in maximum period of 10 years. At present the rate of interest is 10% (2.25% above the base rate).
The third product Corp S B Smile is a loan specially designed Flexi Savings Deposit with Sweep facility for Micro Traders. Under this scheme an account can be opened with an initial deposit of Rs 200. When in Corp SB Smile account balance touches to Rs 6000 the system will automatically transfer in units of Rs 5000 in the SB account
Thursday, October 28, 2010
Tuesday, October 19, 2010
Govt proposes to include loan products in financial inclusion program
The government and Reserve Bank of India has been pushing public sector banks to adopt financial inclusion program in order to reach out to the unbanked segments in the country. Earlier under financial inclusion program banks were to provide basic banking facilities like opening accounts, issuing smart cards for transactions, now government is planning to include loan products. This was stated by Department of Financial Services Secretary R Gopalan. Around 10 PSU banks in the South including Indian Bank, Andhra Bank, Corporation Bank, Canara Bank, Indian Overseas Bank, Syndicate Bank, Vijaya Bank, State Bank of Mysore, State Bank of Tranvancore and State Bank of Hyderabad are carrying out financial inclusion program which was reviewed by Gopalan.
He said, “Corporation Bank is already undertaking such initiatives by opening credit lines to unbanked segment customers to start small businesses like saloon and cycle shops by granting small value loans of Rs 10,000 to Rs 15,000. This can be replicated by all banks after the ministry approves it at the national scale. It works somewhat like a kisan card.”
He said as per the finance ministry’s budget proposal to reach out to 72,300 habitats having population of 2,000 people, up till now the review of FIP implementation in Western and Eastern region has been done. He added in south, approximately 30,000 habitat locations were identified for FIP implementation.
“We are focusing on providing facilities including deposits, withdrawals, remittances, micro-pension, micro-insurance in the identified FIP pockets.”
He told the projected regulatory framework on microfinance institutions is in final stage and the department has getting feedback from public and other stakeholders. However, he said, regulation will not include interest rates as in the Indian financial markets the interest rates are deregulated.
He said, the banking sector is prepared for huge HR challenge as about 3-4 lakh staff is expected to retire in the next three to four years. He added, “New age banking workers has to reorient themselves for new situation. In the modern day banking, more work will be handled at the back offices with conventional banking adopting Business Process Re-engineering at the front-end to stay relevant. We need people with indepth skills in areas like Risk Management, Forex management, Treasury Management, Credit appraisal, etc to meet the demands of the modern era banking."
He said, “Corporation Bank is already undertaking such initiatives by opening credit lines to unbanked segment customers to start small businesses like saloon and cycle shops by granting small value loans of Rs 10,000 to Rs 15,000. This can be replicated by all banks after the ministry approves it at the national scale. It works somewhat like a kisan card.”
He said as per the finance ministry’s budget proposal to reach out to 72,300 habitats having population of 2,000 people, up till now the review of FIP implementation in Western and Eastern region has been done. He added in south, approximately 30,000 habitat locations were identified for FIP implementation.
“We are focusing on providing facilities including deposits, withdrawals, remittances, micro-pension, micro-insurance in the identified FIP pockets.”
He told the projected regulatory framework on microfinance institutions is in final stage and the department has getting feedback from public and other stakeholders. However, he said, regulation will not include interest rates as in the Indian financial markets the interest rates are deregulated.
He said, the banking sector is prepared for huge HR challenge as about 3-4 lakh staff is expected to retire in the next three to four years. He added, “New age banking workers has to reorient themselves for new situation. In the modern day banking, more work will be handled at the back offices with conventional banking adopting Business Process Re-engineering at the front-end to stay relevant. We need people with indepth skills in areas like Risk Management, Forex management, Treasury Management, Credit appraisal, etc to meet the demands of the modern era banking."
Wednesday, October 13, 2010
APGVB ‘Suvidha Vikas’ boon for poor borrowers
Andhra Pradesh Grameena Vikas Bank (APGVB), a government owned bank has a debt swapping scheme called ‘Suvidha Vikas’ for poor people in Warangal. But poor borrowers do not have awareness about the scheme due to which it has remained under utilized by these borrowers who go to private micro-finance institutions (MFIs) for help.
Although loan borrowers go to MFIs for help, the borrowers of Warangal unit of APGVB are in safe hands.
Suvidha Vikas’ loan book show loan of up to Rs 5 lakh given to self-help groups (SHG) (without any security) and monthly installment repayment, as against the weekly installment system followed by private MFIs.
Except for Chennaraopet, Gudur, Tadwai, Dornakal and Cheriyal mandals, the scheme is doing well in rest of the 45 mandals of Warangal.
Moreover, besides Warangal, the APGVB scheme is running in four other Telangana districts of Medak, Mahbubnagar, Nalgonda and Khammam and three more districts in Andhra.
The sources informed, APGVB Warangal is providing services to members of 14,590 SHGs under Suvidha Vikas, each group having an average 12 members. M. Balathimma Reddy, manager (advances), APGVB, Warangal, who looks after Suvidha Vikas said, “In the last two months, we have seen a sudden rise with 192 new SHGs, who constitute the majority of loan borrowers from private MFIs, being added in Warangal.”
Although APGVB officials are not able to market their loans efficiently as the agents employed by private MFIs do through sweet-talk, but APGVB charge low interest on loans as compared to what is charged by private MFIs.
Mr Reddy said, “As against the high rate of interest charged by MFIs, we charge only 14 per cent interest rate. Of this, the state government pays on 5 per cent interest rate as subsidy under Pavala Vaddi scheme to the poor borrowers.”
According to sources, there is a major drawback with Suvidha Vikas scheme, that it does not completely takeover loans of borrowers from private MFIs instead it only provided the SHG another loan to pay-off the first loan.
A. Vinayak Reddy, professor of Economics, Kakatiya University said, “As of now, Reserve Bank of India has not given permission to public sector banks (PSUs) to take over loans from MFIs.” Mr Reddy further said as the state government provides support for the setting up of SHGs, so it becomes the primary responsibility of the government to provide them loans when they require.
Although loan borrowers go to MFIs for help, the borrowers of Warangal unit of APGVB are in safe hands.
Suvidha Vikas’ loan book show loan of up to Rs 5 lakh given to self-help groups (SHG) (without any security) and monthly installment repayment, as against the weekly installment system followed by private MFIs.
Except for Chennaraopet, Gudur, Tadwai, Dornakal and Cheriyal mandals, the scheme is doing well in rest of the 45 mandals of Warangal.
Moreover, besides Warangal, the APGVB scheme is running in four other Telangana districts of Medak, Mahbubnagar, Nalgonda and Khammam and three more districts in Andhra.
The sources informed, APGVB Warangal is providing services to members of 14,590 SHGs under Suvidha Vikas, each group having an average 12 members. M. Balathimma Reddy, manager (advances), APGVB, Warangal, who looks after Suvidha Vikas said, “In the last two months, we have seen a sudden rise with 192 new SHGs, who constitute the majority of loan borrowers from private MFIs, being added in Warangal.”
Although APGVB officials are not able to market their loans efficiently as the agents employed by private MFIs do through sweet-talk, but APGVB charge low interest on loans as compared to what is charged by private MFIs.
Mr Reddy said, “As against the high rate of interest charged by MFIs, we charge only 14 per cent interest rate. Of this, the state government pays on 5 per cent interest rate as subsidy under Pavala Vaddi scheme to the poor borrowers.”
According to sources, there is a major drawback with Suvidha Vikas scheme, that it does not completely takeover loans of borrowers from private MFIs instead it only provided the SHG another loan to pay-off the first loan.
A. Vinayak Reddy, professor of Economics, Kakatiya University said, “As of now, Reserve Bank of India has not given permission to public sector banks (PSUs) to take over loans from MFIs.” Mr Reddy further said as the state government provides support for the setting up of SHGs, so it becomes the primary responsibility of the government to provide them loans when they require.
Friday, October 1, 2010
Loans to get costlier as banks hike base rate
Some banks have raised their base rates during quarterly review. The banks that have raised lending rates include Punjab National Bank, IDBI Bank, Allahabad Bank and Axis Bank. The rates have been raised due to increase in borrowing costs.
This year in July all the banks shifted to base rate system since then this is the first time banks are changing the benchmark. Few banks have raised their deposit rates – SBI, PNB and IDBI Bank.
SS Ranjan, CFO, State Bank of India told bank might revise base rate after mid-November. He said, “While the cost of deposits has gone up we can absorb the cost for some more time.”
MV Nair, CMD, Union Bank of India said, “We will review our base rate towards the end of October based on our funding cost.”
Bank of India’s asset and liability committee will be meeting on October 4 to decide on a base rate hike. The commercial banks like PNB, IDBI Bank and Allahabad Bank have hiked their base rate by 50 basis points to 8.5%.
Axis Bank has raised its base rate by 25 basis points to 7.75%. Few weeks back the Reserve Bank of India (RBI) had raised its key lending, the repo rate, by a quarter percentage point and the borrowing rate by half a percentage point to rein in rising inflation. However there will be no immediate impact on the existing loan borrowers with the hike in base rate as about 70% of the borrowers loans are linked to the BPLR. SBI has not revised its base rate, it is unchanged at 7.5%.
Earlier, on July 27, 2010 RBI had hiked its key policy rates as a result SBI and ICICI Bank raised their benchmark prime lending rates (BPLR) by 50 basis points each. PNB had hiked its BPLR by 75 basis points.
However, the revised benchmark PLR of SBI is 12.25% while that for ICICI Bank is 16.25%. to bring more transparency and effective transmission of policy rates RBI directed all banks to introduced base rate system and from July 1, 2010.
The two big commercial banks PNB and SBI have raised their deposit rates across maturities by 25 to 75 basis point and 25 to 50 basis points across maturity, respectively. IDBI Bank has raised its deposit rates by 15 to 50 basis points.
Meanwhile, SBI has extended its teaser home loan scheme till December 31, 2010, hence the new home loan seekers can avail the opportunity.
This year in July all the banks shifted to base rate system since then this is the first time banks are changing the benchmark. Few banks have raised their deposit rates – SBI, PNB and IDBI Bank.
SS Ranjan, CFO, State Bank of India told bank might revise base rate after mid-November. He said, “While the cost of deposits has gone up we can absorb the cost for some more time.”
MV Nair, CMD, Union Bank of India said, “We will review our base rate towards the end of October based on our funding cost.”
Bank of India’s asset and liability committee will be meeting on October 4 to decide on a base rate hike. The commercial banks like PNB, IDBI Bank and Allahabad Bank have hiked their base rate by 50 basis points to 8.5%.
Axis Bank has raised its base rate by 25 basis points to 7.75%. Few weeks back the Reserve Bank of India (RBI) had raised its key lending, the repo rate, by a quarter percentage point and the borrowing rate by half a percentage point to rein in rising inflation. However there will be no immediate impact on the existing loan borrowers with the hike in base rate as about 70% of the borrowers loans are linked to the BPLR. SBI has not revised its base rate, it is unchanged at 7.5%.
Earlier, on July 27, 2010 RBI had hiked its key policy rates as a result SBI and ICICI Bank raised their benchmark prime lending rates (BPLR) by 50 basis points each. PNB had hiked its BPLR by 75 basis points.
However, the revised benchmark PLR of SBI is 12.25% while that for ICICI Bank is 16.25%. to bring more transparency and effective transmission of policy rates RBI directed all banks to introduced base rate system and from July 1, 2010.
The two big commercial banks PNB and SBI have raised their deposit rates across maturities by 25 to 75 basis point and 25 to 50 basis points across maturity, respectively. IDBI Bank has raised its deposit rates by 15 to 50 basis points.
Meanwhile, SBI has extended its teaser home loan scheme till December 31, 2010, hence the new home loan seekers can avail the opportunity.
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