South Indian Bank Targets More NRI Money

The Thrissur-based South Indian Bank is tapping other foreign exchange houses for boosting its foreign currency inflows.

About 30 per cent of its NRI customers are from West Asia, and the bank caters to them through the Haadi Express Exchange exclusively through its staff in Dubai and Sharjah.

“The bank is offering the fastest and the cheapest money transfer facility. Money is transferred within 30 minutes to the customer’s account and the customer will get a message on his mobile about the exchange remittance to his account, if he opts for mobile service,” bank chairman VA Joseph told Business Standard.

Joseph was in Mysore for the inauguration of the Jayalakshmipuram branch and an onsite ATM, and the opening of the renovated premises of its Mysore main branch on the Devaraj Urs Road. He said, “We will further improve our competitive service in the next 2-3 years with more tie-ups for money transfer.”

As against the Rs 20,000 crore business last year, he said the bank was aiming for Rs 25,000 crore business this year. The net NPA was less than 1 per cent last year. It has been planned to bring this down to below half per cent. Established in 1929 with a capital of Rs 22,000 and now having 478 branches spread across 23 states, South Indian Bank has proposed to extend its branch network to 500 by opening 22 branches this year.

The new branches proposed to come up are: four in Bangalore, three each in Hyderabad and Chennai, two in Mysore at Banni Mantap and Kuvempunagar, and other centres in the country. “We are opening two branches in Mysore because the city is expected to have a great growth, as Bangalore is getting crowded.

It will be like what Pune is to Mumbai,” he said. South Indian Bank has as many as 270 branches in its home state, Kerala, and 93 branches in the neighbouring Tamil Nadu.

NRI Deposits Fail To Pick Up Despite Rising Rupee

NRIs park their foreign currency savings in either the non-resident (external) rupee accounts (NR(E)RA) and the foreign currency non-resident (bank) accounts (FCNR(B)). Of these, the FCNR (B) deposits do not involve any exchange-related arbitrage since the accounts are denominated in foreign currency.

A rising rupee appears to have failed to catch the attention of NRIs. A stronger rupee gives them exchange-rate benefit when they convert dollars to open rupee accounts. Bankers feel that a lower rate of interest offered on such deposits seems to have taken away the sheen from such deposits, and inflows have slowed down since February. The rupee has strengthened by more than Rs 3.50 a dollar since March this year, as it now trades at Rs 40.50 against the greenback compared to Rs 44.25 in March.

In case of NR(E)RA deposits, once the foreign currency deposit is made, it gets converted into rupees. And, it again gets reconverted into dollars at the time of redemption. Consider this: An NRI had made a deposit of $100 for one year in May 2006, when the value of the dollar was Rs 45.88. This gets translated into a rupee deposit of Rs 4,588. One year down the line, even if there was a zero interest rate, the rupee funds would fetch him more dollars as Rs 4,588 at the current dollar rate of Rs 40.50 would translate into $113.28 on maturity.

Despite this advantage, there seems to be little interest in these deposits. A senior official from a private sector bank said, “Despite the rising rupee, lowering of rates has made such deposits very unattractive and we are rather seeing a slowdown. Also, interest rates have been rising in developed markets, which may seem to be more lucrative.” According to Bank of India executive director KR Kamath, NRI depositors normally take a long-term view on the rupee. “We expect a growth in such flows, but it has not yet happened,” he said.

Of late, RBI has further capped the interest rates. In April this year, RBI has capped the interest rates on the 1-3 year NR(E)RA term deposits at the London Inter-bank Offer Rate (Libor) prevailing on the last working day of the previous month.

Source: Economictimes

ICICI Bank hikes interest rates on NRI deposits

Largest private sector bank of the country ICICI Bank on Thursday revised upwards intrest rates on deposits of Non Resident Indians (NRIs).

As per the revised rates, the Non Resident External (NRE) Fixed deposits of maturity period 12 months to less than 18 months, 18 months to less than 24 months, 24 months to less than 36 months will all attract interest rate of 6.43 per cent.

For deposits of 36 months to 120 months, the new interest rates would be 6.45 per cent.

The new rates for Foreign Currency Non Resident (FCNR) deposits in US Dollars for 12 months to less than 24 months will be 5.43 per cent, for 24 months to less than 36 months will be 5.43 per cent, 36 months to less than 48 months will be 5.45 per cent, 48 months to less than 60 months will be 5.47 per cent and for 60 months it will be 5.51 per cent, a release here stated.

Source://Hindustantimes

ICICI opens office in Qatar

ICICI bank has inaugurated its branch in Doha, the first by an Indian bank in Qatar. India's second largest bank and the country biggest private money-lender opened its office at the Qatar Financial Centre yesterday।

The bank has a strong presence in the region। It had set up the Dubai representative office in October 2003. The bank enhanced its presence in Dubai by setting up a wealth management branch in the Dubai International Financial Centre (DIFC) in December 2005.

Operations at the Bahrain offshore banking unit commenced in October 2004 following the granting of license from the Bahrain Monetary Agency with a special permission to provide NRI banking services.

K V Kamath, Managing Director and Chief Executive Officer, told reporters that the Doha branch is the 18th outside India।

"This is a part of our focus to build up our international presence," he was quoted as saying in Peninsula newspaper।

The bank is targeting Non-Resident Indians (NRIs) and Indian businesses. The licence given by the QFC is a Category 4 one, but allows for credit facilities and investments. The bank's overseas operations now account for 18 per cent of its global balance sheet, a figure that should go up to 25 per cent over the next few years। Kamath stated Bahrain is a money-spinner for ICICI Bank as far as revenues are concerned, and accounts for 22 per cent of income from international operations। ICICI bank has US$ 4 billion to US$ 4.5 billion in assets in Bahrain.

Source: Hindu

HSBC Introduces New Banking Solution for NRIs

HSBC announced today a new banking solution for global Non-Resident Indians (NRIs)। The comprehensive solution allows the NRI community to conduct cross-border banking transactions and choose from a variety of tailored US and Indian deposit, mortgage and investment products.

In addition to helping NRIs better facilitate their banking transactions in the US and India, the solution also offers the following benefits:

Assistance in account opening with HSBC India(a) while in the US, and assistance in account opening with HSBC USA, while in India।

FastCheque - Free remittances to HSBC India from the US, at competitive exchange rates, by USD checks।

FastClick – Free remittances from the US to India through internet banking, whereby customers banking with both HSBC USA and HSBC India can remit monies to their NRI Accounts held with HSBC India, in a speedy and convenient manner।


Assistance in choosing from a wide array of HSBC USA personal and commercial products
Assistance in choosing from a variety of deposit and mortgage products offered by HSBC India.
"Today, there are 22 million Non-Resident Indians around the world who expect, and indeed demand, global banking expertise and the highest levels of service,” said Naina Lal Kidwai, Group General Manager and Country Head, HSBC India। "Between the US and India, HSBC currently serves more than 160,000 NRI customers and the new joined-up solution with HSBC USA will make this process even more seamless.”

“We believe in providing an appropriate and market leading level of service to all our customers in the US and this new offering will ensure a seamless banking experience for the NRI community,” said Kevin Newman, Group General Manager and Head, Personal Financial Services HSBC USA। “HSBC recognizes the specific needs of our global customers and this solution is designed to exceed those needs.”

सोर्स://Businesswire

ECB & NRI deposits: Half the outstanding external debt

If the Reserve Bank of India took measures in the past months to curb internal liquidity in order to check inflation, it has now taken measures to reduce the flow of external funds to strengthen its effort। In its latest annual monetary policy statement presented last Tuesday, the central bank has sought to discourage capital inflows by slashing rates on NRE and FCNR deposits.

The bank has also taken measure to reduce the existing liquidity by enhancing the prepayment limit of external commercial borrowings (ECBs)। Prepayment of ECBs up to $400 million is now allowed against $300 million earlier by authorised dealer banks without prior approval of RBI, subject to compliance with stipulated minimum average maturity period as applicable to loans.

These measures may have come at a time when the priority of the bank is to curb liquidity in order to check inflation, but what is significant is that they would play a big role in reducing the country’s external liabilities also। The outstanding external debt of the country has been rising sharply and was estimated at Rs 6,38,181 crore last September against Rs 5,48,100 crore in September 2005 — up by 16.4%. It increased by 4.7% in 2005-06 over 2004-05.

ECBs and NRI deposits are two key drivers of the growth in external debt stock in recent years and measures to curb their flow will automatically reduce the overall debt position too। The share of commercial borrowings in total outstanding external debt has been hovering around 22% in the current decade against about 14% in the mid-nineties.

Commercial bank borrowings accounted for about half of the ECB loans, while the other half was accounted for by securitised borrowings, including FCCBs। As such, the rise in the share of commercial borrowings indicates a change in the nature of India’s external debt. This also indicates a change in India’s image abroad and its growing acceptability as investment destination.

But the reality is that the sharp rise in ECBs has led to a rise in external debt too। The share of NRI and FC (B&O) deposits at the other end has risen at an even rate during this period. From less than 14% in 1999-2000 the share of NRI deposits in total outstanding external debt has increased to about 28% in 2005-06. In actual terms, NRI deposits have increased by more than two and a half times in last five years from Rs 59,137 crore in 1999-2000 to Rs 1,56,715 crore in 2005-06.

Similarly, government’s bilateral borrowings, too, have declined by 4।5 percentage points from 14.2% in 1999-2000 to 9.7% in 2005-06. And not only has the government’s share in external debt declined, but what is probably more important is that the larger part of the debt is concessional. The share of multilateral concessional debt of the government was estimated at 18.8% in 2005-06 against only 5% of non-concessional loans. The bilateral loans, at the other end, have come almost entirely under concessional terms.

सोर्स:economictimes.indiatimes.com

NRI deposits in Kerala banks on a high

NRI deposits in Kerala banks touched a new high of Rs 329 billion on Dec 31, 2006.
NRI deposits in 3,539 branches of various banks grew from Rs 288 billion in December 2005 to Rs 329 billion, constituting 38।42 per cent of all deposits in the state's banks, said figures released at a bankers' committee meet in Thiruvananthapuram on Tuesday.

Details of the NRI deposits show that the State Bank group leads the pack with a total of Rs 124 billion, followed by private sector banks with Rs 101 billion। Then come nationalised banks with Rs 97 billion.

The State Bank of Travancore, Kerala's own bank, leads all other banks with a record Rs 81 billion। Among private sector banks, the Federal Bank leads with Rs 48 billion.

Kerala has a record two million Keralites working abroad, of which close to 85 per cent are in the Middle East.

Central Bank has Reduced the Ceiling on NRI Deposits

Non-resident Indians (NRI) will now have to settle for lower returns from their deposits in India। The central bank has reduced the ceiling on NRI deposits - FCNR (B) and NRE - by 50 basis points, making these deposits less attractive for investors. The downward revision in the cap on interest rates comes in the wake of large capital flows into the country.

At present, the interest rate ceiling on FCNR (B) deposits is fixed at London Inter Bank Offered Rate (Libor) minus 25 basis points for all maturities। Now, this will be Libor minus 75 basis points.

For NRE deposits, where the depositor takes the exchange rate risk due to the conversion of the funds into rupees, the interest rate ceiling has been brought down to Libor। Earlier, the ceiling was not to exceed 50 basis points above Libor.

"These measures should result in smaller net inflows and help stabilise the rupee in the medium term,'' said Romesh Sobti, country executive, India ABN Amro Bank।

RBI's decision is expected to reduce the scope for interest rate arbitrage and check the rise in money supply। The central bank had lowered the ceiling as late as in January 31, 2007, on FCNR (B) by 25 bps and NRE by 50 bps.

The inflow of NRI deposits showed a quantum jump between April and December 2006 over same period in 2005. They (flow) registered an increase of $3.2 billion in April-December 2006 over that of $1.1 billion in April-December 2005. The outstanding NRI deposits rose from $ 35.13 billion as on March 31 2006 to $ 39.31 billion at the end of January 2007, according to RBI data.

Banks Seek Hike in FII, NRI Cap in Hybrid Capital

Banks have asked the Reserve Bank of India (RBI) to review the ceiling on investment by foreign institutional investors (FIIs) and non-resident Indians (NRIs) in perpetual debt and debt capital instruments (hybrid capital)।

According to RBI guidelines, investment in these instruments by FIIs and NRIs are to be within an overall limit of 49 per cent and 24 per cent of the issue। Investment by a single FII and NRI was capped at 10 per cent and 5 per cent of the issue.

This demand was made to the RBI Governor Y V Reddy by a delegation of bankers, including K V Kamath, managing director and chief executive officer,ICICI Bank, V P Shetty, chairman and managing director (CMD), IDBI Ltd, A K Khandelwal, CMD, Bank of Baroda, P J Nayak, CMD, UTI Bank, and Sanjay Nayar, chief executive officer, Citibank, India।

In January, 2006 the RBI had permitted banks to raise capital through additional instruments popularly known as hybrid instruments। This was to let banks shore up their capital in the light of the implementation of Basel II norms. However, the RBI capped FII and NRI investments in these debt instruments.

“The investors in hybrid debt instruments are pension funds, provident funds and large institutional investors looking for fixed returns। The relevance of the ceilings prescribed may be examined considering that the hybrid debt instruments does not constitute any equity participation with ownership/voting rights implications. The ceiling fixed by the RBI has more relevance for equity participation. Since hybrid capital is not purely equity capital, there is a need to examine this aspect,’’ said the CEO of a private sector bank.

“There is a talk of moving towards full capital account convertibility. Under full capital account convertibility such restrictions have to be done away with. If the ceiling set is to ensure that such inflows do not fuel liquidity then the regulator could ask banks to keep the funds overseas rather than place restrictions on investments,’’ said a senior banker.

ICICI Bank scheme for NRIs

ICICI Bank has introduced a new product 'NRI SmartSave Deposits'? an unique fixed deposit scheme for Non Resident Indians(NRIs). A one of a kind service introduced by ICICI Bank comes with a host of benefits that are tailor made for the Indian diaspora settled abroad. To avail of this service, even if the customer has a fixed deposit account in any other bank, all that the customer has to do is to get in touch with ICICI Bank, who will ensure a flawless transfer of the account on maturity.

The customer may not be in India when the deposit matures or may not have the time to go to the bank when in India. ICICI Bank will collect the documents from the customer and send the documents to the concerned bank through a vendor on behalf of the customer and get the money transferred to ICICI Bank. The customer simply has to walk into ICICI branches for the product and his requests will be taken care of by the sales executives of ICICI Bank. ICICI Bank will transfer the money for the customer so that the customer can manage funds effectively through internet banking and relationship managers.

Speaking while introducing the product, Anup Bagchi, senior general manager said, 'The customer can look towards a seamless, reliable, trustworthy and speedy transfer of money through ICICI Bank. We at ICICI Bank are committed to making banking easy and convenient for NRIs around the world. We offer a wide range of world-class banking services that are tailored to meet the unique needs of the global Indian. With ICICI Bank's convenient Balance Transfer facility switching from traditional banking service is easy. The customer can easily and conveniently transfer his deposits with other banks to ICICI Bank by completing easy formalities with us and we will handle the rest. '

Source: //newstodaynet.com

ICICI Bank freezes many NRI accounts

ICICI Bank has frozen the accounts of many non-resident Indians (NRIs) in the UAE after they failed to submit personal documents demanded by the Bank.

The Bank had asked for the documents after the 2005 Mumbai floods damaged documents originally given by the customers, including papers submitted for opening savings and current accounts, demat accounts for trading and investing, NRI home loans and auto loans, and ICICI Direct online trading accounts.

Apart from NRI customers, the damage has also affected several account holders in India.
While the bank had given its customers in India until December 25, 2006 for submiting the required documents, NRIs in the UAE were given a deadline of January 31, 2007.

"Several accounts of customers who have failed to meet the deadline have been deactivated," an official at the ICICI Representative Office in Dubai said.

The official, however, said that the accounts would be reopened after the documents were submitted.

"It will definitely affect our customers. At least that way we can expect them to quickly come and rectify the problem," he said.

Source: hindu.com

NRIs dont need Bank Loans for Ventures

Loans is a word that does not exist in the dictionary of many businessmen in four districts of the states, which are flush with NRI remittances.

When a majority of businessmen in Kutch, Anand, Kheda and Navsari need money for a venture, they do not head for banks looking for loans. Rather, they dig their own pockets. And no amount of promotional activities by banks which have to ensure that atleast 60 percent of their deposits are dispersed as loans, has helped to improve the dismal credit deposit (CD) ratio of below 30 percent in these districts. Otherwise the CD ratio of the commercial banks in the state hovers around 65 percent.

Gujarat has more than 8 lakh NRI accounts with total NRI deposits for Rs 17,486 crore. NRI deposit worth Rs 8,390.15 crore is distributed by these for districts.

While these districts have the maximum number of NRGs, two Dangs and Porbander, have a low CD ratio of 25 percent, due to poor business activity.

According to the latest review report of the State Level Bankers' Committee, CD ratio ratio of commercial banks in Kutch, Anand, Kheda and Navsari is 22.78 percent, 24.85 percent, 27.30 percent and 17.92 percent respectively, says Dena Bank GM, Purshotam Kumar.

ICICI Bank's senior general manager; international retail product group, Anup Bagchi says remittances from NRIs make a higher contribution to the country's forex reserve of $160 billion than FII and FDI. And, Gujarat receives one of the highest remittances. However, RBI has asked all banks to set up their credit activities in these districts in order to improve the CD ratio.


//Source: indiapost.com/

PNB hikes interest on fixed deposits

The Punjab National Bank (PNB) has hiked interest rates on fixed deposits under different maturity periods with effect from December 26, 2006, PNB zonal manager S P Singh said.

The interest rates are as follows: Eight percent for five years and above; 7.50 percent for one year to less than three years; Seven percent for 180 days to less than one year.

For bulk deposits, PNB offers eight percent interest for deposits of Rs 15 lakh to Rs 5 crore for periods of one year to less than two years. For deposits over Rs 5 crore, the bank offers higher rates of interest depending on the size and period of deposits.

For NRI deposits, the PNB is offering 6.33 percent for NRE deposits for one year. FCNR deposits in US dollars gets 5.33 percent, in GBP - 5.58 percent, Euro - 4.02 percent, CAD - 4.24 percent and AUD - 6.62 percent for a year. PNB offers housing loans at 9 percent for five years repayment, 9.25 percent for 10 years and 9.50 percent for 20 years.

//Source: newindpress.com

National Bank of Dubai teams up with India's HDFC Bank to offer non-resident Indian (NRI) services

National Bank of Dubai today announced its partnership with HDFC Bank, one of India's premier banks to help conduct their banking transactions in UAE and in India, in a seamless and cost-efficient manner.

Under the umbrella brand of NBD-HDFC Bank NRI Services, the partnership will offer a series of banking products and services such as joint account facilities, remittances, wealth management solutions, preferential pricing on home loans in India and others.

As part of the joint proposition, NRI customers will be able to sign up for the NBD-HDFC Bank NRI Value Account, featuring an NBD Value Account in the UAE and an HDFC Bank NRE / NRO Account in India.

The accounts will offer a host of benefits and features in the UAE such as interest, insurance, a free credit card, roadside assistance, medical access and value offers. Additionally, customers will get international gold debit cards at a preferential fee, payable at par chequing, investment advisory services, online mutual funds purchase and discounted safe deposit lockers, in India. Customers would be able to apply for opening both accounts at the same time by either visiting specified NBD branches or requesting a bank staff to visit them at home or office when convenient

Additionally, customers will be entitled to carry out cash withdrawals and enquiries on ATMs of NBD and HDFC Bank free of charge on accounts held in UAE and India. This will be a key benefit to NRI equity funds held in any account, whether in the UAE or in India, will be freely accessible at no extra cost to the customers. HDFC Bank has 1323 ATMs in 228 cities in India while NBD has over 150 ATMs in the UAE.

The arrangement will also offer customers the convenience of free telex transfers for remitting funds, from the customer's NBD Value account held with NBD to his or her account with HDFC Bank in India. Customers will be able to log on to NBD Online or walk into any NBD branch to request for a telex transfer.

In addition to the above, NRI customers will also be able to avail comprehensive wealth management solutions including investment products and insurance, with advisory services to help them choose the right NRI investment strategy to suit their personal financial profiles and needs. They will also be able to avail preferential pricing and home loan services for purchase of a dream house back home in India, apart from a variety of other banking products such as credit cards, personal loans, and auto loans, both in the UAE and India.

'An integral part of NBD's strategy is to provide value added products, seamless convenience and superior service to our customers,' stated Douglas Dowie, CEO, National Bank of Dubai. 'Our partnership with a leading institution like HDFC Bank will enable us to offer Indians in the UAE, one bank for both their worlds.' 'Through this alliance with NBD, we are looking to jointly provide Indian customers in the UAE the convenience of one - stop financial services,' said Aditya Puri, Managing Director, HDFC Bank. 'With growing interest in investment opportunities in India, we believe NRIs in the UAE will benefit from the hassle-free and cost effective platform that this partnership provides.'

//Source:http://www.ameinfo.com/