Bankers wait for January CRR cut

Bankers are expecting Reserve Bank of India governor Duvvuri Subbarao will cut the cash reserve ratio (CRR) by at least 50 basis points next month — and provide further force to the economic incentive package that the government and the central bank paved over the weekend.

Earlier on Saturday, Subbarao informed there is enough cash swilling about in the financial system in a clear justification for keeping hold on the CRR at 5.5 per cent. The CRR is that portion of deposits that banks must maintain with the RBI. A cut in this reserve ratio directly instill liquidity into the system.

According to the central bank sources it will be reviewing its credit and monetary policy in the middle of January.

Banking industry was hugely disappointed as the RBI hadn’t cut the cash reserve ratio, which would have given banks more cash to lend to firms.

“Ample liquidity was one of the key factors why the RBI did not reduce the CRR. However, it could cut it by 50 basis points next month to ensure that cheap funds are available to banks for lending,” said a senior official with a private sector bank.

Industry mavens had cried out in distress after the RBI failed to cut the CRR once again. Although between October and November this year, the central bank had reduced the reserve ratio by 350 basis points to 5.5 per cent. Some of the monetary measures were attached with it, this had injected close to Rs 300,000 crore into the financial system.

Pressure to cut the CRR has already started to mounting. Industry forum Ficci has advised the RBI to cut the reserve ratio to the 2004 level of 4.5 per cent. It also wanted the RBI to bring down the statutory liquidity ratio, which is now hanging at 24 per cent.

The SLR determines how much of the total deposits banks must invest in approved securities such as government bonds.

Last week, the central bank had cut down the short-term lending and borrowing rates — the repo and the reverse repo, respectively — by 100 basis points each and the government followed it by a pump-priming strategy intended to encourage industrial growth, which has shown signs of sputtering.

A section of the bankers are of view that the CRR cut is not required now as the financial system is having a surplus liquidity of over Rs 56,000 crore. On the other hand the RBI governor had informed the liquidity adjustment facility — through which the central bank manages the level of funds within the system — is in absorption mode.

Banks have not reacted with enthusiasm to the cut in the benchmark rates. Only Yes Bank, HDFC Bank and Union Bank have announced cuts in their prime lending rates that prop up their rate tables.

Bankers say that the cost of funds for banks remains high. Therefore banks have not cut down their deposit rates either; both rates will have to move in tandem.

Short term deposits growth increased by 40 to 50%

Indian people are investing more in the short-term bank fixed deposits (read: three-month & six-month which they were to invest in real estate and equity markets. Due to this on an average there has been a 40 to 50% growth in the fixed deposits for shorter tenures.

According to Bankers market instability and general lack of confidence is the reason behind the investors opting for short-tenor product. In the last few months Kotak Mahindra Bank has seen its inflows more than doubling on fixed deposits (FDs), while the Bangalore-based ING Vysya Bank has witnessed an over 50% increase in its short-term deposits.

On the other hand Axis Bank, has accounted a growth of 25-30% in the 20-20 version of FDs. HDFC Bank India’s second largest private bank, also reported a high growth in fixed deposit. In the last nine months bank’s deposits have increased by almost 80%. According to latest data given out by Reserve Bank of India (RBI) in October alone, Indian banks had seen a raise in terms deposits worth Rs 94, 811 crore.

But bankers are of view that the high growth numbers is dangerous for the capital markets. As most of the investors, have withdrawn their funds from mutual funds and cleared up their stock portfolio to deposit with banks. K V S Manian, group head retail liabilities & branch banking, Kotak Mahindra Bank reportedly said that the latest trend is indicative of investor outlook towards equity markets in the short-term.

“We have in general seen a higher customer inclination for FDs. While the lower retail segment was always inclined towards the product, the attractiveness of current rates has enhanced their interest. However, in case of the high net worth individual segment, there’s a definite shift in attitude around this product of late,” he said.

Uday Sareen, country head, retail banking, ING Vysya Bank think this phenomenon, is quite broad based across the entire range of customers. “Given the current mood, individuals are deferring their decision to invest in real estate, stock market, and other investments. Gradually as people realign their expectations to the new financial paradigm, they will be willing to reassess their financial risk profile, financial goals and re-balance their portfolios,” he said.

While Manju Srivatsa, president, retail banking, Axis Bank feels, 25-30% growth in short-term FDs is a huge number in such a short period of time. “It’s a massive turnaround. There’s an overall increase in the demand and interest in FDs,” she said.

On the other hand Anindya Mitra, senior vice-president, retail liabilities, HDFC Bank, is of view that such trend might continue, till the equity market stabilizes. “Capital protection is on top of the priority with investors right now. At least, in the short-term, equity is getting substituted by FDs in an investor’s portfolio,” he said.

Serial home loan fraudster ran out of luck, caught by the police

Powai police had a break through the housing loan fraud by arresting one Pankaj Jani on the complaints of a leading bank. Last week one of the leading banks filed a complaint with the police that the documents submitted by some applicants were forged.

The police told that Jani, who is a part of a wider racket, had allegedly taken housing loans of Rs 40 lakh and Rs 49 lakh loan from ICICI Bank in April this year. However Jani, luck could not favor him this time when he attempted to get loans of Rs 50 lakh and Rs 41 lakh from HDFC Bank and thus landed him in the police net.

The police on investigation found that Jani had applied for housing loan using different names, but the photographs he submitted were of his own. Whereas the applications submitted were in the name of Birendra Sadhu Shetty and Santosh Mhatre.

Intriguingly, the police found a photograph of another person having the similar name to the one of the names mentioned on the application, Birendra Sadhu Shetty. Moreover the documents submitted were also similar to those Jani had provided.

There were seven housing loan applications involved in the racket -five with ICICI Bank in Ghatkopar and two with HDFC Bank in Andheri. Jani started filing the applications six months ago. The police apprehended three applications of Rs 54 lakh, Rs 60 lakh and Rs 24 lakh, respectively, which were pending with ICICI Bank. They also confirmed that Jani had used fake names such as Birendra Sadhu Shetty and Santosh Mhatre in the applications. Another application was made in the name of one Anand Chandshieve.

Explaining the technique, senior inspector Rajdoot Rupwate said, "The money was being used to pay EMIs for the two loans that had already been sanctioned. If they hadn't done so, it could have raised the suspicion of the bank authorities, especially while clearing the other applications. Jani had sought the loans through direct sales agents."

The fraud came to light when a verifying officer with HDFC Bank, Kiran Karnik, found that the Jani had submitted fake documents. To cross check he then dialed the number given against Shetty's name, but the call was attended by a man named Shabbir Patel. Thereafter he lodged a complaint with the Powai police.

"The bank officials, along with the police, laid a trap for Jani and caught him while he had gone to collect the loan cheques," said Rupwate. "Jani revealed that he carried out the fraud after receiving instructions from the kingpin, Sahil alias Sohil alias Abhay Singh alias Rajesh alias Vijay Saksena alias Ajay Saksena. He has never met or seen Saksena ; the others involved in the racket, too, haven't met one another."

Further giving out details about the racket, sub-inspector Keshavkumar Kasar said, "Jani was assigned to get hold of people seeking loans. Their signatures were then taken on loan application forms. These people had no idea that the documents would be misused."

In this connection three other persons-Anil Shelar, Chandar Sharma and Sanjay alias Ajit have been arrested as well. Their documents were used to get the loans. The property for which the loans were sought was in Karve village, Navi Mumbai. "A member of the gang was stationed at the property site. Whenever bank officials visited the place, he used to put up nameplates with Shetty and Mhatre written on them," he said.

The police has booked all the accused for impersonation, cheating and forgery under the IPC and have been remanded in jail custody. The police also informed that Saksena has been operating from Delhi and is missing at present.

Pankaj Jani had applied for the loans in the names of other people but used his own pictures. Picture 1 is the photograph he used while applying in the name of Birendra Sadhu Shetty and Picture 3 while using the name of Santosh Mhatre. Picture 2 is the building in Navi Mumbai for which the loans were allegedly taken. Jani, who is part of a bigger racket, had taken two loans of (Rs 40 lakh and Rs 49 lakh) of the seven loans he had applied for. The others, which were pending, were for Rs 50 lakh, Rs 41 lakh, Rs 54 lakh, Rs 60 lakh and Rs 24 lakh

Banks to earn Rs 475 cr from DDA housing scheme charges

The Delhi Development Authority (DDA), advertised in newspaper about the sale of about 5,000 flats in the city. By inviting the applications for the flat DDA is going to make a big earning of about Rs 4.5 lakh per flat as interest on the money it collects as refundable registration fee.

The seven banks, who are mediating the scheme, are expected to collect in about Rs 250 crore by financing the applications.

The DDA is gathering an amount of over Rs 9,000 crore collected from more than 600,000 applicants who have submitted their forms along with the registration fee of Rs 1.5 lakh.

By the last date September 16 it is expected to puff up considerably. Approximately DDA will be taking three months to take out the computerized draw for the allotment of the flats, till that period money is going to remain with the authority on which it will be earning an interest of 10 per cent before refunding the money to the unsuccessful applicants, which means it would be richer by at least Rs 225 crore. This money will remain with the DDA for three months — the approximate time the authority will take for the allotment of the flats through a computerized draw.

This is going to add an extra earning of at least Rs 4.5 lakh per flat as interest on the registration amount, which is kept with the banks that are collecting the applications. If the rate of interest is 9 per cent, the DDA will be earning an extra profit of around Rs 4 lakh per flat.

The DDA has plans to use this money to buy land for low-income group housing schemes. “That’s the model we follow. The money from the registration fees will be used to buy land to build houses for low-income groups,” said DDA spokesperson Nimo Dhar.

The DDA has announced sale of freehold flats in various localities which are aimed to cater to the aam aadmi. The flats have been priced much below the market rates, creating a huge rush of applicants. The lower price tags of the flats clearly show that the DDA is a not-for-profit developer. “We are a no-profit-no-loss organization,” the spokesperson added.

Ramesh S Singh, additional general manager of Central Bank of India, one of the seven banks mediating for the housing scheme, said the response has been tremendous.

“Real estate prices are shooting up and many people find it beyond their means to buy residences built by private players. For this section, especially the middle class, DDA flats are the best option.” Singh says this time people are showing more interest in the scheme than in a similar scheme in 2004.

The scheme has come up at a time when housing loans have gone up as a result of the central bank raising the repo rate and the cash-reserve ratio to control inflation. The premium flats have become even dearer therefore more and more people are trying their luck in this category.

The huge demand for these DDA flats has turned into a risk-free business opportunity for the seven banks — State Bank of India, Central Bank of India, Union Bank of India, IDBI Bank, ICICI Bank, HDFC Bank and Axis Bank — who are mediating the DDA housing scheme.

HDFC Bank revised rates of Foreign Currency, Non-Resident, RFC, NRE, EEFC Deposits

HDFC Bank the second largest private sector bank in the country has revised the interest rates of Foreign Currency, Non-Resident, RFC, NRE and EEFC Deposits. The rates will come into effect from September 1, 2008.

FCNR (B) deposits in US Dollar, having tenure of one year to less than two years, will have an interest rate of 2.45 per cent, while rate on the deposits with maturity of 2-3 years and 3-4 years has been set to 2.55 per cent and 2.88 per cent.

Bank sources said deposits having tenure of five years, will have an interest of 3.25 per cent.

Bank stated Euro deposits, having tenure of 1-2 year period, the revised rate was set at 4.57 per cent while for 2-3 years and 3-4 years, the interest rates will be 4.13 per cent and 4.02 per cent, respectively.

Bank further stated similarly for deposits in Pound, the rates have been revised to 5.27 per cent, for tenure 1-2 years whereas for maturities of 2-3 years and 3-4 years, rates have been revised to 4.65 per cent and 4.62 per cent respectively.

Bank sources said NRE deposits having a maturity period of 1-2 years the rates were revised the rates to 3.21 per cent while for 2-3 years and for the deposits with 3-5 years maturity period, the rates have been revised to 3.31 per cent and 3.63 per cent respectively.

Bank further added for Exchange Earners Foreign Currency (EEFC) deposits having maturity period of 30 days the rates on deposits will be 2.00 per cent whereas on 31-90 days the rates will be 2.24 per cent.

HDFC Bank BPO set up at Tirupati

HDFC Bank is the second biggest private sector has set up first of its kind commercial scale rural BPO at Tirupati in Andhra Pradesh. Youths from weaker sections from nearby villages have been employed by the bank.

A Rajan, Country Head, Operations, HDFC Bank informed that BPO has been set up by the Bank’s subsidiary, ADFC and started operations in July. Through BPO several outsourced processing activities of the bank are being supported.

At present there 500 employees and by March 2009 the strength of the staff will be increased to over 1,500. This will be the largest rural BPO in the banking sector.

Explaining the underlying principle behind setting up a rural BPO, he said, "The bank is pioneering an initiative which has the potential to revolutionize rural India by taking job opportunities closer to the rural doorsteps, through economically viable projects."

He explained that bank will be able to achieve its goal without compromising on customer service levels and economic viability of the project.

He added on the success of this plan there is proposal of opening similar rural BPOs in other states also.

According to Rajan the BPO idea has huge potential and other banks, insurance companies; mutual funds can also think of financial outsourcing through rural BPOs which in turn will create more job opportunities in thousands in the hinterland.

The BPO has been set up at Tirupati which is a semi-urban area and the bank has managed to get broadband connection from BSNL.

HDFC Bank 48th branch inaugurated in Chennai

HDFC Bank, is one of premier bank has opened its full-fledged branch in K K Nagar, Chennai.. Mr. Krishnaswamy Jambunathan, Director, Visteon Technical and Services Centre, Chennai inaugurated the new branch.

After the opening of this new branch HDFC banks branch network in South India will reach up to 345 branches. This new branch will be the 48th branch in Chennai and 79th branch in Tamil Nadu.

Through new branch office bank will be offering world class banking services to its customers – from basic banking services such as Savings Account, Fixed Deposits, Current Account, Mutual Funds, Lockers, NRI Services, Demat to sophisticated direct access banking channels such as ATM, PhoneBanking, NetBanking. Bank will be offering International Credit and Debit Cards.

Speaking at the inauguration function of the new branch, Mr. Navin Puri, Country Head, Branch Banking, HDFC Bank said, “Growing our network and expanding our reach has been the main focus of the bank. We see high market potential in this area and hence it is important that we further strengthen our presence and reach in Southern India. The new branch will offer a wide range of corporate and retail banking services. We are committed to offer our customers, world class financial products and services”.

Mr. C.S. Gopinath, Regional Head, A.P. & Chennai, HDFC Bank said, "We have received tremendous support from our customers in the South over the years. We would like the residents of Chennai to personally experience our excellent services and products much closer to home and make it a grand success."

HDFC Bank to increase branch network in north to increase access rural areas

HDFC has been working on increasing its access in rural areas. Following on this strategy bank will be carrying out a rationalization and integration of its branch structure in the northern region in view of merger with Centurion Bank of Punjab (CBOP) this year.

"We are at the planning stage of rationalizing and integration of our branch network in north in wake of merger with CBOP in a bid to enhance our penetration especially in rural areas," HDFC Bank, Regional Head- North, Govind Pande said here today.

During this exercise bank will be carrying out a survey in which it will be identifying the branches of CBoP (which are now with HDFC) and HDFC bank in same area and then will be relocating one of the branches in other areas.

"There is no point in having two branches of CBoP and HFDC at one area. Therefore, we will see where one branch could be relocated and our effort would be to relocate in rural areas," he said.

He informed that as such before the merger, CBoP was having a stronghold in the north (with over 100 branches in Haryana, Punjab, Chandigarh), in fact this exercise will be mainly concentrated to northern region only.

HDFC Bank also announced plans to open a new branch here which will be the 29th branch in Chandigarh, Panchkula and Mohal region.

HSBC launched 'HSBC Direct' for SMEs

HSBC, foreign lender Hongkong and Shanghai Banking Co on Tuesday launched a new current account 'HSBC Direct'. The new account will be targeting small and medium enterprises.

Bank sources said in this new account a host of services will be given to the account holders. The bank is optimistic of getting more customer base in this segment.

"We hope to grow faster in gaining SME customer base after this new product. Currently, we are increasing our customer base by 10-15 per cent per month," HSBC India head SME business, B Khanna said here today.

Khanna gave the gross revenue figures for 2007 and said from SME it was Rs 300 crore but he did not gave out the revenue of the total commercial banking during the year.

Official Website: www.hsbc.co.in

HDFC Bank, BoB hike rates

The country’s second largest private lender HDFC Bank and public sector players Bank of Baroda (BoB) and United Bank of India raised their prime lending rates by 50 to 75 basis points.

HDFC Bank raised its PLR by 50 basis points to 16.50 per cent 10 days after the Reserve Bank of India announced further monetary tightening in an attempt to fight inflation. The central bank had decided to raise the repo rate and the cash reserve ratio to 9 per cent each.

The private player raised the interest rate payable on deposits with maturities of over one year by up to 50 basis points. A deposit of over one year will earn at least 9 per cent per year, according to information posted on the HDFC Bank website.

The two public sector banks, however, did not hike deposit rates and also decided to keep home loans up to Rs 30 lakh – both new and existing -- outside the ambit of the latest revision. Are you looking for HDFC Home Loan rates which have been updated recently just check them here because before applying for the loan you need to verify the interest rates of that particular bank because once you select the loan it's very hard to switch the scheme.

Now, almost all banks – barring the country’s largest lender State Bank of India – have taken a cue from RBI’s monetary tightening and raised lending rates. While sources said SBI is expected to announce a 50 basis point increase, a formal word is awaited.

“This revision in lending rates has been done to partially overcome the adverse cost and profitability implications arising from monetary policy tightening measures announced by RBI,” BoB said.

While an HDFC Bank spokesperson did not share details, BoB said the cost of new home, auto and other consumer loans will go up 50 basis points.

HDFC, ICICI increase rates

If you have taken a Rs 10 lakh home loan your EMI will increase by Rs 510 for a term outstanding of 20 years. This steep rise has come in the wake of the strong message sent out by the Reserve bank of India governor, Mr Y.V. Reddy that money should not be leant cheap.

The country’s two biggest home loan lenders HDFC and ICICI Bank announced a steep hike in interest rates on loans on Thursday.

HDFC has revised its floating interest rates on home loans for both existing and new customers by 0.75 per cent with effect from August 1, 2008, while ICICI Bank has increased its interest rates for various tenors of retail fixed deposits by 0.75 per cent to one per cent. It also increased its floating reference rate for consumer loans (including home loans from 13.50 per cent to 14.15 per cent. This follows the hike in the CRR and repo rate announced in the credit policy on Tuesday.

HDFC bank said "This is in line with the rates of interest in the economy, which have hardened due to the rising inflation and shrinking liquidity in the domestic market."

HDFC bank has increased its retail prime lending rate (RPLR) on which its adjustable rate home loans (ARHL) are benchmarked, by 0.75 per cent. It will affect existing borrowers whose loans come up for re-pricing on or after August 1, 2008. The bank said it follows a three month reset cycle for its floating rate.

Consumer Forum directed HDFC bank to pay 7,000

District Consumer Disputes Redressal Forum, Fatehgarh Sahib has directed Mandi Gobindgarh branch of HDFC Bank to make payment of Rs 7,000 to Balaji Enterprises, Sirhind for mental agony and harassment and Rs 500 as cost of the complaint.

It was alleged that the firm through its proprietor Sham Lal Gupta that he has current account with the bank and an agent of the bank came to him and assured him that he will to provided with CC limit of Rs 10 lakh so he completed all the formalities and the bank had got a cheque of Rs 2245 dt April 17, 2007 as processing fee from the complainant and the amount was duly transferred to the bank account. He alleged that even after one month the bank had not issued the credit limit to him despite that fact that he had completed all the formalities.

The notice was sent to bank but none has appeared on behalf of the bank so the bank was proceeded against ex-party.

While accepting the complaint, the Forum president also directed the bank though its Branch Manger to process the case of the complainant and pass final order for providing facility of cash credit limit of Rs 10 lakh within 15 days from the receipt of the copy of order. The Forum also observed that in case the complainant is not satisfied with the final order passed by the bank, he is permitted to challenge the same by filing a separate complaint.

Bankers feel the heat as home loan queries fall

There is a slump in the market and its direct impact can be seen on the housing loans section of different banking divisions. According to many officials in the home loans divisions, the walk-in and enquiries have gone down by 50 per cent in many places.

One of the officials with Corporation Bank said that there is a major slump in the housing loans enquiries and even the walk-ins have reduced. "The property market has been affected badly because of various reasons resulting which the home loan divisions has been affected," said the official.

Apart from reasons like inflation and rise in home loan rates, another reason is that the affordability has also gone down said another official from HDFC home loans. He added that the enquiries and final confirmation is not as same as those that were there in the last few weeks. "When the property market had been good about three weeks back the walk-in had been much better as compared to the scene now," he said adding that on a positive note one also feels that probably the increasing competition in the home loan market is one of the reasons for this fall.

Avers an official from Reliance Capital who said that there is a fall in enquiries but the change is marginal. "There is probably a 30 per cent fall as compared to the last few weeks," he said adding that enquiries cannot be a basis as people have now become net savvy and can get all the details over the world wide web. "There is no need for most of them to visit the bank and it is only the final stages when they come for loan and that has fallen in the last few weeks. Where there were 15 forms about few weeks back filled confirming the loan, now it has become 10 forms," said the Reliance Capital official.

HDFC Bank drops on hike in lending rate

The bank made this announcement after trading hours on Friday, 20 June 2007.

Meanwhile, the BSE Sensex was down 146.44 points, or 1.01%, to 14,424.32.

On BSE, 30,346 shares were traded in the counter. The scrip had an average daily volume of 1.1 lakh shares in the past one quarter.

The stock hit a high of Rs 1,100.05 and a low of Rs 1,075 so far during the day. The stock had a 52-week high of Rs 1,825 on 14 January 2008 and a 52 week low of 1,050.30 on 17 August 2007.

India’s second largest private sector bank in terms of net profit had underperformed the market over the past one month till 20 June 2008, declining 20.36% compared to the Sensex’s decline of 13.82%. It had also underperformed the market in the past one quarter, declining 13.47% compared to Sensex’s fall of 2.82%.

The bank has an equity capital of Rs 354.73 crore. Face value per share is Rs 5.

The current price of Rs 1,087.50 discounts its Q4 March 2008 annualised EPS of Rs 53.17, by a PE multiple of 20.45.

The HDFC bank has also upped its deposit rates by 25 basis points across different tenures. The hikes come into effect from 18 June 2008.

Reserve Bank of India on Wednesday, 11 June 2008, hiked repo rate by 25 basis points to 8% with immediate effect in an effort to contain rising inflation. The repo rate is the rate at which Reserve Bank of India (RBI) lends money to banks under its liquidity adjustment facility. The repo rate increase was announced after market hours on Wednesday (11 June 2008) and came outside a scheduled policy review. The repo rate is now at its highest since November 2002.

As per reports, several banks are reviewing their interest rate structures and are expected to take a call soon on whether to raise their rates or not.

HDFC Bank’s net profit rose 37.1% to Rs 471.11 crore on 51% rise in operating income to Rs 3,505.52 crore in Q4 March 2008 over Q4 March 2007.

HDFC Bank is one of the leading private sector banks in India.

Markets recover; HDFC Bank up 5.3%

Markets are trading firm in the noon deals of Tuesday with the benchmark index Sensex gaining 164 points or 1.1 per cent. It is trading at 15,560 levels.

Broader market index Nifty also gained 36 points or 0.8 per cent and it is trading at 4608 levels.

“Markets are moving in line with crude movement and I expect it to be range bound in the coming days. We are witnessed huge selling on rise. I won’t advice sugar stocks at the current levels,” said Sandeep Wagle, Chief Technical Analyst, Angel Broking.

Buying is evident in realty, capital goods, IT and banking stocks by over 0.4 per cent each.

Other Asian markets are trading weak on Tuesday. South Korea's Kospi and Japan's Nikkei are trading in red territory by over 0.4 per cent each.

HDFC Bank at Rs 1211 jumped 5.3 per cent or Rs 60 and it is the biggest gainer among the BSE-30 scrips. Other major gainers in this pack are Housing Development Finance, State Bank of India and L&T.

HDFC bank expanding its network in Valley

Emerging as the fast growing private sector bank in the valley since its operation in the valley, HDFC bank is expanding its network with setting up of four new branches and on and off site ATMs this month. Starting its operation in 2005 in the valley, the bank has achieved a clientele of more than 20,000 in just two branches.The Bank is expected to increase its customer base with the opening of four branches within next two months. Off site ATM is also being introduced at the Airport Road, Srinagar. Zubair Iqbal, Assistant vice president Jammu and Kashmir and north Punjab told Etalaat that growing response of the people towards the products and services of the Bank has led to the creation of more branches across valley .He said that three new branches at Islamabad, Sopore and Maharaj Gunj will start functioning from the third week of this month while another branch at Karan Nagar will be functional in August this year.

“The response we have received during last 4 years shows that people are satisfied with our products and services. In order to broaden our reach in valley we have decided to set up four more branches , two in Srinagar and one each in north and south Kashmir,” Iqbal said.
“We are expecting a good response from the new branches as people from Sopore and Islamabad are approaching us and expressing their desire to open accounts,” he said, adding the new branches will have on spot ATMs for the convenience of its customers.

Iqbal said that bank is also introducing off site ATMs at hyderpora, airport road for the convenience of the customers. He said that HDFC is the only bank in valley that has tie- up with asset management companies (AMCs) and is authorized to sell their products and services.

“We are the first bank to introduce net banking and mutual fund investments in valley. We are also authorized to sell the products and services of AMCs,” He added.
With the expansion of the network, the total number of branches of the bank in the Valley will go upto seven. Presently the bank has two branches, one at Residency Road and another at Hari Singh high Street with three on site ATMs. The Bank is expected to have fifteen branches in the Valley by 2009.

In 2007 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,200. Though, the official license was given to Centurion Bank of Punjab branches, to continue working as HDFC Bank branches, on May 23, 2008.

“We have acquired Centurion Bank of Punjab and from May 23 last month, their branches have started operating by the title of HDFC,” Iqbal said.

ICICI Bank, HDFC Bank see sharp fall

US stocks ended lower last week as high oil prices refreshed investors’ worries on inflation and consumer spending. The S&P 500 fell 3.5 per cent, which according to Bloomberg, was the steepest decline since the first week of February, to 1,375.93. The Dow Jones Industrial Average dropped 3.9 per cent to 12,479.63. The Nasdaq Composite Index slid 3.3 per cent to 2,444.67.

Foreign institutional investors’ selling coupled with weak global cues affected the sentiment in the Indian markets. The Bombay Stock Exchange’s Sensex slumped by 4.5 per cent and the NSE’s S&P CNX Nifty by 4.09 per cent.

Among the ADRs, only Dr Reddy’s Laboratories was able to finish in the green. The ADR jumped 5.18 per cent to end the week at $16.01 against the previous week’s close of $15.22. The company last week announced the launch of Omez Insta, a powder formulation that offers relief to gastritis, following which the ADR moved up sharply. Earlier during the week, the company announced a 40 per cent drop in net profit for the quarter ended March 30, 2008 at Rs 162 crore (Rs 269 crore), as sales growth slowed in the key US market. Income fell 9.8 per cent to Rs 1,038 crore.

Banking counters – ICICI Bank and HDFC Bank – were the biggest losers on rising inflation. The ADR of ICICI Bank fell by 11 per cent and the latter by 8.29 per cent.

IT counters also witnessed a fall of around 5-6 per cent. The ADR of Infosys Technologies was the biggest loser among them, which fell by 6.28 per cent. Satyam Computer slipped 5.3 per cent, Patni Computers by 5.19 per cent and Wipro by 3 per cent.

Telecommunications counter MTNL and Tata Communications (erstwhile VSNL) fell by 3.5 per cent and one per cent respectively.

Tata Motors also witnessed sharp fall of about 5.25 per cent at $15.18 ($16.02) on the back of surge in crude price, which could slow down the growth of auto sector. Fall in metal prices at the LME appeared to have weakened Sterlite Industries’ ADR, which slipped by 2.42 per cent at $21.29 ($21.82).

RBI approves merger of CBoP with HDFC Bank

Reserve Bank of India has approved the merger of Centurion Bank of Punjab with HDFC Bank and the amalgamation would be effective from May 23.

"The RBI hereby sanctions the appended scheme of amalgamation of CBoP (Transferor Bank) with the HDFC Bank Ltd (Transferee Bank). The scheme shall come into effect from May 23," HDFC Bank said in a filing to the Bombay Stock Exchange.

The boards of HDFC Bank and CBoP had given in-principle approval for the merger of both the banks in February.

Following the in-principle nod, HDFC Bank had approved the share swap ratio of 1:29.

As per the ratio CBoP shareholder would get one share of HDFC bank for every 29 shares held.

With the merger, the combined entity will have a nationwide network of 1,148 branches and the deposits would climb up to Rs 1,20,000 crore.

At the same time, advances of the combined entity would touch Rs 85,000 crore while the balance-sheet size would swell to Rs 1,50,000 crore.

In a bid to maintain the promoter's holding at 23.2 per cent in the merged entity, HDFC Bank made a preferential offer of about 2.62 crore convertible warrants to its promoter Housing Development Finance Corporation Ltd.

HDFC has to pump in Rs 4,000 crore to retain its holding in the bank. According to the rules, 10 per cent of this amount should be paid within 15 days after receiving the RBI approval for the merger.

HDFC Bank Managing Director Aditya Puri will head the merged bank, while Jagdish Capoor will continue as non- executive Chairman.