Transcript Document

Latest Developments –
01/2009
SBLC
Bangalore
01. Margin Money on Home Loan has been
increased
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To provide a cushion against any
fluctuation in real estate market.
It will ensure that only reasonably
sound and creditworthy borrowers
are financed.
The risk of lending will be lower.
01. Margin Money on Rent Plus has been
increased
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Due to fall in the rental value.
Due to downturn in the real estate
market.
The risk of lending will be lower.
02. National Payment Corporation of India
has been set up.
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Presently RBI handles all retail
payments and settlements activities.
Formation of NPCI will relieve RBI
from routines processes as a
settlement agency and focus more on
its key role.
NPCI will handle all retail payment
and settlement activity except RTGS.
03. SBI 1000 a new Domestic Term Deposit
has been introduced.
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A new maturity bucket has been
created for medium term duration.
It will help attract deposits from Central
Govt. staff, which have been disbursed
arrears as recommended by 6th pay
commission.
The rate of interest for deposit scheme
is currently the highest in the market.
In the volatile financial market
scenario, where the trust and security
of the PSBs is exemplified by SBI, it will
be easy to market the product.
04. Recently SBI has introduced Mobile
Banking.
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Mobile phones as a medium for extending
banking services have of late been
attaining greater significance.
The rapid growth in users and wider
coverage of mobile phone growth users and
wider coverage of mobile phone networks
have made this medium an important
platform for extending banking service to
the customers.
It is cost effective.
We will be able to attract more new
generation customers.
In order to ensure the level playing field for
our bank in comparison of Foreign/Private
banks.
05. e-invest has been introduced by SBI.
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The product is devised as per SEBI
guidelines.
A lien will be marked in the investor’s
account for the subscription amount and the
amount will be debited only if shares are
allotted to him.
This will protect investors during the process
of IPO issue as he is not out of funds.
The facility is available for all internet
banking users having transaction right.
ASBA (Applications Supplied by Blocked
Amount)
06. New Business Group has been formed in
the bank.
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The New Business Groups formed are
 (1) Rural & Agri Business,
 (2) Corporate strategies and New Business
Group,
 (3) Treasury and Marketing Group.
It is strategic business initiative taken by the
bank to focus on the business opportunities
arising out of the emerging growth of rural
and international economies.
These initiatives will enable the bank to
expand further and tap the business potential
available from these new business segments.
07. RBI stresses on IT enabled financial
inclusion.
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Banking outreach to the remote corners of
the country can be achieved through IT
enabled financial inclusion.
By use of appropriate technology
transaction cost for the bank can be
brought down.
No frill accounts were introduced for the
common man to start with towards
financial inclusion.
Biometric ATMs, General Credit Cards etc.
are important new moves towards IT
enabled financial inclusion.
08. “Direct Debit Product” has been
introduced.
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This is a new cash management product.
The product envisages a debit to the
accounts of customers both corporate and
individuals, initiated from the centralized
location.
It facilitates collection of funds for
corporate, Mutual funds, Finance
companies etc from dealers, investors etc.
on a regular basis spread over large
number of branches.
09. Focus is given on Electronic Payment
System.
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Paper based system is costly, time
consuming are exposed to risk such a lost
in transit, mutilation, etc.
They are also subjected to the process of
clearing cycle leading to delay.
Settlement risk is eliminated.
This will speed up migration from paper
based system to electronic system.
10. Many products have been introduced for
home loan borrowers.
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To meet the varied demands of various type
of borrowers according to their eligibility in
term of age, income, preferences etc.
To meet the competition and exploit the
business potential available in this
segment.
This will help increase our home loan
portfolio.
11. Marketing and Recovery Officers (Rural)
have been appointed.
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Marketing and Recovery Officers (MRO)
would keep focus on marketing the bank’s
products in rural areas and give thrust on
timely recovery of advances and NPAs.
The recovery of loans would be improved.
MROs can receive cash up to Rs. 5000/ and
issues receipts, hence the villagers can
avoid the travel for the repayment of their
loans, and time/ expenses will be saved for
them.
This will not only increase the level of
agriculture business in our bank but also
will bring down the level of NPAs
12. Bank has introduced “Power Jyoti”
scheme recently.
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To leverage our CBS platform more
effectively.
Only Current account will be opened for
educational institutions.
To provide fee collection facility to the
institutions through our Core banking
branches and credit this account.
Any type of fees like school / college /
university fees, competitive exam fees, can
be collected through any our CBS branches.
The bank will be able to mobilize low cost
deposits from the educational institution.
13. GBU (Government Business Unit) has
been set up under NBG.
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Government business constitutes sufficient
portion of our income and are low cost
income. It also mobilizes low cost deposits
and is now target of private sectors bank
and other commercial banks.
Our share of government Business has
come down over a period of time and is
under constant threat from other banks.
The new positions (i.e. GBU under NBG,)
have been created to keep required focus
on this and meet the enhanced competition.
This strategic business unit will help bank to
develop proper policies in changed business
condition and keep our share intact.
14. Limit for Dairy Plus has been increased
to 5 lacs and sub limit has been removed?
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It will help to counter competition.
Within the overall ceiling of Rs.5 lacs, loans
may be disbursed for different items of
expenses like purchase of animals, milking
machine, construction of sheds, and
purchase of other equipments.
It will provide flexibility and help in
enhancement of Agriculture finance. It will
also simplify the process and decrease
farmers’ problems.
It will simplify the process to the banker
who is supposed to verify the end use of
fund limit wise, which is difficult.
15. Photographs have been made mandatory
for guarantor under Housing Loan?
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NPA in Housing Loan is a big problem and
also it is long-term loan. To follow up with
both the borrower and guarantor, it is
necessary to have photographs.
Along with this chances of impersonation by
guarantor can be ruled out at the time of
revival. Photograph will also help in
recovery process.
16. Corporate Governance is necessary in
Banking Industry
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Good corporate governance encompasses
appropriate checks and balances through
external and internal audits and
accounting, clear division of responsibility,
both horizontal and vertical, disclosures
and transparency.
This will ensure better stability and greater
shareholder interest value. It will be in the
interest of its entire stake holders i.e.
employees, customers and shareholders.
As per Kumarmangalam Birla Committee
recommendations
17. Alternate Channel in need of the hour
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Several alternate delivery channels such as
ATM, Phone banking, Internet banking, etc.
will provide customer satisfaction and
convenience.
It will decrease the crowd at the counter
and give free time to branch operative to
sell and market products.
It will help to improve market share and
quality of business.
It will help our bank to retain undisputed
leadership in India and compete effectively
with new forces of the market.
18. RBI uses Reverse Repo?
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Reverse Repo is an instrument of borrowing
fund short-term period and simultaneously
agreeing to repurchase it at a stated future
date for slightly higher price.
Means it is instrument to absorb excess
liquidity (fund).
When Increase in oil prices and increased
demand of credit have caused inflation to
increase, Reverse Repo was hiked to absorb
the excess fund in the market.
Similarly, Reverse Repo has now been
reduced to increase liquidity in the market.
19. A new Account Named “Recalled Assets A/c”
has been created by merging PB and RD a/cs.
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Now IRAC classification has been stabilized
well. Identification of substandard, Doubtful
and loss A/Cs provisioning for them are
being done on case-to-case basis at
stipulated periods.
Hence, having two accounts to control bad
debts have become redundant.