Page 6 - Banking Finance AUGUST 2015

BANK UPDATE

Banking network to be extended to cover more villages Greek bank deposits
faces steep fall
The state government hopes to bring banking services are yet to reach are
at least 80 more gram panchayats into an easy prey base for unscrupulous Greek bank deposits have fallen to
the folds of banking network in the Ponzi firms. The government hopes to their lowest in
current financial year. shield villagers from Ponzi claws. more than a de-
cade. New sta-
The finance minister Amit "Some banks, such as tistics show, as
Mitra reported that Canara Bank, have already Greeks worked
Bandhan Bank, the new opened branches in vari-
private sector bank from ous gram panchayat of- about their new government's pain-
Bengal, has alone promised fices," Mitra added. He fully slow negotiations with creditors
to set up branches in 53 said that credit deposit ra- withdraw savings.
gram panchayats where banking ser- tio of the state had marginally im-
vices are yet to reach. Bandhan is proved during 2014-15 to 68% from Figures from the European Central
scheduled to start its operations from 67% in 2013-14. The credit deposit ra- Bank published recently showed
August 23. tio was 65% in 2011. "We are target- more than $5 billion ($5.5 billion)
ing higher credit deposit ratio closure were withdrawn in April. That leaves
At present, there are 716 gram to national average this time," he household deposits at the end of the
panchayats in Bengal where banking added. month at $139.4 billion ($151.9 bil-
services are yet to reach. Areas where lion), down from $145 billion in
March.
PSB settled Rs.12K-cr loans under OTS
The figure is the lowest since Novem-
The public sector banks (PSBs) settled It also relieves pressure on customers ber 2004, when deposits stood at
loans worth Rs.12,734 crore for with limited staying capacity and need $137.2 billion.
730,000 accounts in the one-time of further financial support. Retail cus-
settlement (OTS) scheme in A penalty of Rs.20 lakh
2014-15, to cleanse their tomers would no longer on Hubli Co-op bank
balance sheets. have the "defaulter" tag in
their record with the bank The Reserve Bank has imposed a fine
The amount that the banks and credit information bu- worth Rs.20 lakhs on Karnataka's
agreed to give up for OTS ac- reaus, though the history Hubli Urban Co-operative Bank for ir-
counts was close to Rs.6,000 about customer behavior regularities in Cheque discounting.
crore, according to union fi- would remain on the books. "The RBI has imposed a monetary
nance ministry data. The customer could apply for fresh penalty of Rs.20 lakhs on Hubli Urban
credit. Co-operative Bank for violation of
The scheme was mainly for the retail, RBI's instructions for irregularities in
agriculture and micro and smaller en- State Bank of India and its associate cheque discounting, overdrawal in OD
terprises. Given the large number of banks settled loan under the scheme loan accounts," the central bank said.
small ticket accounts, it involved a lot for 280,000 accounts worth Rs.1,433
of process work across their networks. crore of loans in 2014-15. The RBI had issued a show cause no-
tice to the bank in response to which
Karnataka Vikas Grameen bank net profit surges to the latter submitted a written reply.
10.7 per cent After considering the facts of the case
and the bank's reply in the matter,
Increase in the advances, a good share of low-cost deposits, the RBI came to the conclusion that,
and NPA recovery measures have helped the Dharwad head- violations were established beyond
quartered Karnataka Vikas Grameen Bank register a growth doubt and warranted imposition of
of 10.71 per cent in net profit during 2014-15. the penalties.

The bank registered a net profit of Rs.155 crore during 2014-
15 as against Rs.140 crore in 2013-14.

6 | 2015 | AUGUST | BANKING FINANCE