Page 6 - Banking Finance April 2016

BANK UPDATE
CAR of banks could rise
up to 100 bps
The capital adequacy of banks could
go up by up to the network of Common Services Cen-
100 basis
points follow-
ing the Re-
serve Bank of
India relaxing CSCs whereas opening of
the norms on treatment of certain
balance sheet items.
Among others, State Bank of India,
Bank of Baroda, and Indian Overseas
Bank will get the benefit of close to
100 basis points increase in their
capital adequacy ratio (CAR), said
top officials of these banks.
Central Bank of India's CAR could go
up by up to 40 basis points, said BK
Divakara, Executive Director. CAR is
the measure of the amount of a
bank's capital expressed as a per-
centage of its risk-weighted credit
exposures. According to the revision
in Basel III capital regulations made
by the RBI, banks can now include
certain items, such as property value
and foreign exchange for calculation
of its Tier I capital (CET1), instead of or memorable places and
Tier II capital.
Banks' CET1 capital, comprising paid-
up equity capital, statutory reserves,
capital reserves, other disclosed free
reserves and balance in profit and
loss (P&L) account at the end of the
previous financial year, must be at
least 5.5 per cent of risk-weighted
assets - for credit risk plus market
risk and operational risk on an ongo-
ing basis. Foreign currency transla-
tion reserves arising from translation
of financial statements of a bank's
foreign operations to the reporting
currency may be considered as CET1
capital. These will be reckoned at a
discount of 25 per cent.
6 | 2016 | APRIL
Govt to create banking access point in all villages
The government is looking at providing trepreneurs (VLEs) under CSCs.
banking services in every village of the
country by leveraging technology and The minister said commission earned
by VLEs on pancards, passport and rail
tres (CSCs). ticketing stands at Rs 438 crore. "VLEs
have a major role in Prime Minister
The withdrawal facility has
already been introduced at Narendra Modi's dream of
startup revolution in India.
accounts is being worked CSCs play important role in
out with the banks and is interface between the
likely to be rolled out government and the ben-
shortly. eficiaries, thus reducing
corruption and delays," Prasad said.
"Our target is to create banking access The minister asked the officials to help
point in every village through new tech- CSCs take a lead role in spreading e-
nology," Communications and IT Min- commerce in rural India. CSCs should
ister Ravi Shankar Prasad said during a also play a major role in promoting lo-
conference of women village level en- cal handicrafts and artisans, he said.
UK customers to get elite treatment from HSBC
HSBC bank is set to launch voice rec- "the largest planned rollout of voice
ognition and fingerprint ID security biometric security technology in the
services in Britain, in an effort towards UK".
introducing biometric banking.
"The launch of voice and touch ID
The bank said its internet banking cus- makes it even quicker and easier for
tomers will no longer have
to remember a password customers to access their
bank account, using the
dates to access accounts. most secure form of pass-
HSBC said its service will be word technology - the
offered to up to 15 million body," she added.
banking customers.
Barclays has already introduced voice
Francesca McDonagh, HSBC Britain's recognition software, but it is only
head of retail banking and wealth man- available to corporate clients. RBS and
agement, described the change as NatWest have offered finger print tech-
nology for the last year.
Bank of Baroda posts highest-ever loss of Rs 3,342 crore
Bank of Baroda (BoB) posted highest-ever quarterly loss by an Indian bank of Rs
3,342 crore in the quarter ended December 2015 on
account of an almost five times increase in provisions
for bad loans. It had posted net profit of Rs 333 crore in
the same period last year. The bank's net interest in-
come for the quarter declined to Rs 2,795 crore from
Rs 3,286 crore a year ago. Other income, comprising
items like fees and treasury, was flat at Rs 1,112 crore in Q3 FY16, compared
with Rs 1,090 crore in Q3 FY15.
| BANKING FINANCE