Volume - 1 No. - 4 September 3, 2010 visit us at : www.imis.ac.

in For
Private Circulation only

Editor in Chief:
Dr. Kishore C. Padhy

Contributing Editor:
ANIRBAN GHOSH • IDFC not interested for Banking license - Infrastructure finance
PGDM-IVTH TERM company IDFC is not interested in applying for a banking license, a day
after the apex bank RBI started a discussion on issuing new banking
license

Published by the
Director
on behalf of
Institute of • Commercial banks sees rise in NPA - Commercial banks saw gross
Management & non-performing assets (NPAs) grow by over Rs 5,100 crore in the April-
Information Science June period of the current financial year.
Swagat Vihar, Bankuala
Bhubaneswar-751002
Orissa, India
Tel.: +91-674-6542256/
• RBI approves merger of ICICI Bank and BOR - The Reserve Bank of
57
India (RBI) has approved the proposed merger between ICICI Bank and
E-mail: imis@imis.ac.in
Bank of Rajasthan (BoR) .All branches of Bank of Rajasthan will function
as branches of ICICI Bank, with effect from August 13.

• HSBC to pick up stake in Nedbank - HSBC will buy up to 70 per cent

of South Africa's Nedbank, in a potential $6.8 billion deal that would give
Europe's largest lender a bigger presence in Africa's top economy and a
gateway to the fast-growing continent. HSBC and Anglo-South African
insurer Old Mutual, which owns a controlling stake in Nedbank, are in
exclusive talks about the deal.

• RBI has suggested lowering foreign investments in private sector -

• RBI to check unhealthy securitization- RBI wants to control markets that grow on arbitrage
making known its reservations about growth in securitization based on arbitrage, the Reserve
Bank of India (RBI) today said the thrust of final guidelines will be on a healthy growth of this
segment, which provides liquidity to financial sector entities. Securitization of assets, or
bundling together loans into one security that can then be traded, was allowed in India a
decade ago and banks quickly turned to it as a means to hedge their interest rate risk.

• RBI invites comments on regulations for new banking license- RBI said it is mulling
granting banking license to a "limited number" of new private players and invited public
comments on the kind of regulations it should have for this space, being eyed by players like
ADAG, Aditya Birla Group and India Bulls. The central bank listed pros and cons of keeping
minimum capital requirement at low level of over Rs 300 crore, middle level of Rs 500 crore
and high level of Rs 1,000 crore.

• RBI may prescribe higher net worth for firms- Worried by the sharp rise in commercial
paper (CP) issuances in the last one month Reserve Bank of India (RBI) is planning to ask
banks to inform it about the end use of this money. The regulator is also planning to tighten
the norms.

• RBI’s take on new banks - The Reserve Bank of India (RBI) initiated its process of
increasing banking participants with a discussion paper on issues including capital
requirements for aspiring banks, for which it has sought public feedback .New entrants in the
banking sector should be strong, well-capitalized to promote financial inclusion in a cost-
effective way, said a top official at India's central bank, which views increased access to
financial services as a driver of sustainable economic growth.

• O.P Bhatt pitches for raising SBI equity- For nearly two years now Bhatt has been pushing
for Rs 20,000 crore rights issue, under which the government will have to shell out close to Rs
12,000 given that it holds over 59 per cent in the bank. The bank’s capital adequacy ratio is a
shade below 14 per cent and it needs capital to fund credit growth of 21-22 per cent this year
as well as in the coming years.

• SBI is on a merging spree - SBI has proposed a merger of the remaining associate banks
with it. Given that the process takes a while, SBI wanted an omnibus clearance for all the
banks. On August 26, SBI will merge State Bank of Indore with itself. Last year, it had merged
State Bank of Saurashtra.
• SBI on a profitable path - Enthused by impressive first quarter numbers, State Bank of India
(SBI) is hopeful of earning a net profit of over Rs 10,000 crore this fiscal, which will be a
landmark in the Indian banking industry. The bank had recorded a meagre 0.4 per cent rise in
net profit at Rs 9,166.05 crore last fiscal.

• IRDA on approval process of ULIPs - The Insurance Regulatory and Development

Authority (IRDA) has said it has no plans to cap the charges levied by life insurance
companies on traditional products. The regulator also assured it would approve new unit-
linked insurance plans (Ulips) on time so that insurers could sell them from September 1
onwards. It further stressed it is not out to micro-manage the sector.

• New definition of Ulips by IRDA - The Insurance Development and Regulatory Authority's
(IRDA) new guidelines protecting unit-linked insurance product (Ulips) holders from mis-
selling by dealers and onerous commissions. They are likely to make the equity-linked
instruments more investor-friendly. As per the new IRDA guidelines, the commission paid to
distributors and expenses charged by insurers will no longer be front-loaded and will be
distributed over the lock-in period of the schemes, which has been raised to five years from
three years earlier.

• NABARD on a new path - National Bank for Agriculture and Rural Development (NABARD),
which has launched “Project Reposition” by roping in the Boston Consulting Group, has
proposed a slew of initiatives including NABARD Infrastructure Development Assistance
(NIDA), a longer tenure product (more than 10 years) for states.

• IDBI bank makes a new move – IDBI Bank scraps charges on CASA (Current and Savings
Account) services like draft issuances. It will also not charge any penalty on customers who
fails to maintain minimum balances in their account.

• SMX creates new history - The Singapore Mercantile Exchange (SMX) becomes the first
Asian exchange to deal in multiproduct commodity and currency derivatives.
• Demand for ARCs grows - State owned Indian Banks plans to sell Rs 900cr worth of assets
to Asset Reconstruction Companies (ARC).

• India becomes favorite destination for FIIs - India tops Asia in luring FII inflows. India has
emerged as a star performer in attracting foreign inflows into the domestic equity market. It
has attracted around Rs 9700cr in the month of July.

• Power companies to try their hands in banking - Public sector power companies Power
Finance Corporation (PFC), NTPC, REC and NHPC have banded together to explore the
option of entering the banking sector in order to access cheaper funds.

• SEBI redefines the definition of retail investors - SEBI has enhanced the limit for defining
Retail Individual Investors (RII) in public issues from Rs100000 to Rs200000.

• Direct Tax Code (DTC) to replace IT Act - The Direct Taxes Code (DTC) Bill which was
introduced in the parliament on 30th Aug 2010, will replace the Income Tax Act 1961 and will
be put in place from April 2012.