ICICI Bank reduced home loan rates from 13% to 11.5%

ICICI bank has reduced its home loan rates from 13 per cent to 11.5 per cent for loans of up to Rs 20 lakh.

As per bank sources the only new customers will be eligible to enjoy new rates. Sources added as no change has been made in the bank’s prime lending rate, the benefit of the 1.5 percentage point cut in the loan rate can not be passed on to the existing customers.

It is a big surprise that ICICI Bank has raised its home loan rate by 1.5 percentage point about a month back, at the time when public sector banks have started reducing their rates.

Banks offer easy repayment solutions to customers facing crunch

Earlier this year interest rates have climbed up and companies have started laying off staff and tightening employee costs due to financial crisis, the recovery teams of banks therefore from the past few months housing finance firms have started offering at least half a dozen easy repayment solutions to a growing number of borrowers who have been hurt by the slowdown.

Ashish Wagh, a senior executive with a foreign investment bank, recently contacted his mortgage lender for a help after his company started cutting jobs and cutting down salaries. Earlier this year, Wagh had taken Rs80 lakh home loan to buy an apartment in Bandra, a Mumbai suburb, to be repaid over 20 years at an annual floating interest rate of 11.75%.

Now Wagh is thinking of selling his ancestral property in Pune to repay back nearly half the loan amount and so that he can avail a two-year freeze—a legal authorization to delay payments. He refused to name the mortgage firm as this could harm his negotiations with it.

On the other hand lenders are getting lenient in offering easier terms to existing borrowers as they want to prevent an increase in the proportion of non-performing assets (NPAs) on their books and the worth of their collateral—the houses—which declined sharply this year with falling real estate prices.

According to the Reserve Bank of India latest data as on 29 August banks had offered home loans worth about Rs2.69 trillion, but between 1 September 2007 and 31 August growth in home loans went down by 13.9% at Rs32,792 crore, from 17% in the previous year.

On the other hand interest rates increased on home loans from 7.50% in 2003 to 11.75% in August, which increased pressure on borrowers who had taken loans at floating interest rates.

For instance, if a person took a Rs20 lakh home loan which is to be repaid back over 20 years, his monthly repayment move up from Rs16,418 in November 2004, when the interest rate was 7.75%, to Rs21,674 now.

Housing Development Finance Corp. Ltd, or HDFC, is the oldest mortgage lender in the country, offering its existing borrowers the more common options of extending the term of the loan without raising the interest rate, or increasing the equated monthly installments after closing other debts such as personal or auto loans.

“In case a customer is servicing multiple loans such as a housing loan, vehicle loan, personal loan, and has to make the choice to repay, it is advisable that the customer evaluates the loans and decide to repay the loan based on its cost and impact on cash flows,’’ said HDFC’s joint managing director Renu Sud Karnad.

For additional collateral, some lenders are ready to allow borrowers to “balloon” the loan till the end of the tenure or make a large payment towards the end. Borrowers can also get the option to choose to make large payments, or so-called bullet payments, every year so that the term of the loan is trimmed.

While Axis Bank Ltd, depending on an individual’s future cash flow, is even allowing borrowers to guarantee savings instruments in return for easier repayment terms.

A senior official at ICICI Bank Ltd, India’s second-largest lender told, “Depending on the customer’s need we take a three-pronged approach, which includes increasing the tenure of the home loan, keeping the interest rate constant for a limited time frame, and ballooning up the loan towards the end of the tenure”.

“(But) we do not encourage customers to opt for the option of deferring the payment towards the end of the tenure of the loan as it increases the debt burden on the customer. The chance of default also increases,” he added, asking not to be identified because he isn’t the bank’s official spokesman.

Another reason which forced borrowers to restructure their home loans is delays done by builders for various reasons.

“Some builders are finding it difficult to complete the housing project on time (and are) hence delaying the possession of the flat. In such cases, banks have seen many customers come to them and ask for a re-scheduling of the loan,” said a senior official with Axis Bank.

“All the major real estate developers are seeing a time overflow, hence this is a very common request we are getting from customers,” added this official who wished not to be identified.

PSU banks anticipate growth in vehicle loans in fiscal year

At present there is slowdown in economic but the major public sector banks are anticipating growth in Auto Loans by 20-25 per cent for the purchase of cars and other passenger’s vehicles in the current fiscal.

Though private sector rivals are restraining from lending to the auto sector and are expecting a much lower growth.

The major reason is that on car finance PSU banks are charging lower interest rates in comparison to the private sector banks. The lending rates of the public sector banks range from 11.75 to 13.75 per cent, private sector banks charge 15 per cent and above.

A State Bank of India official said: “We are growing our portfolio faster than the average market growth rate.”

SBI has recorded a powerful growth of 30 per cent year-on-year in its auto loan portfolio. The bank had an exceptional auto loan portfolio of Rs 8,029 crore as on September 30, 2008 as against Rs 6,153 crore as on September 30, 2007.

Another PSU bank, Union Bank of India, too has booked around 25 per cent year-on-year growth in its auto loan. “Unlike some banks, which resort to direct sales agents to garner business, we prefer dealing with customers directly through dealers. This way we have control over the customer profile,” said a senior bank official.

The bank has set around Rs 1,000 crore for auto loan.

On the other hand the largest private sector bank ICICI Bank does not hope for much growth in auto loans in the current year.

“Primary demand in the four-wheeler segment is coming down. The ratio of actual sales to purchase enquiries is coming down,” said Mr N.R. Narayanan, Head of Vehicles Business, ICICI Bank.

According to ICICI official in the next six months, the car loan market may witness de-growth. He said, “By March 2009, I see a flat to negative growth”.

Mr Mayank Pareek, Executive Officer, Marketing & Sales, Maruti Suzuki Ltd, said “private sector banks such as ICICI Bank and HDFC Bank, which were aggressive players in auto finance three-four years ago, have noticeably scaled down their lending from the beginning of this year”.

“ICICI Bank’s share of financing our vehicles dropped to five per cent now from 35-40 per cent earlier. We anticipated it and entered into agreements with PSU banks. Two years back, we tied up with SBI and associate banks, and now we are building on that and also the tie-ups with other PSU banks.”

Bankruptcy or Debt Consolidation: Which is better?

When you are overwhelmed by debts and desperately seeking a way out, the question might arise in your mind that which is better, bankruptcy or debt consolidation. Both options have their own benefits and drawbacks.

While you face embarrassing situations due to your increasing debt burden, you might go on to obtain new loans for the purpose of repaying the earlier loans. However, most of the times you would find it impossible because carrying on with a number of loans is often very much risky and this would progress towards bankruptcy. If you feel that you are not able to repay your loans, at that time you can file for bankruptcy. If you are declared as a bankrupt person, you would be freed from your debt obligations. Alternatively, bankruptcy remains in your credit report for seven to ten years. Due to this cause, you need to make an attempt to pay off your debts rather than filing for bankruptcy. You have got some ideas on Which is better bankruptcy or debt consolidation?

One method of avoiding bankruptcy is to receive a debt consolidation loan. For controlling your debts, debt consolidation can work as a useful tool. It combines your every debt carrying high rates of interest into a single loan bearing a low rate of interest. This reduced rate of interest allows you to pay reduced monthly payments. This loan is available in both secured and unsecured forms. You should try to obtain a secured debt consolidation loan since it bears a lesser rate of interest. An unsecured debt consolidation loan carries a higher rate of interest, thus it nullifies the benefits of consolidating debts with higher rates of interest into a debt consolidation loan with lower rate of interest. Nonetheless, debt consolidation may not be advantageous for you if you have a poor credit.

Whether bankruptcy is better than debt consolidation or vice versa is a matter of speculation. Therefore, it is recommended that you seek the advices of an expert financial consultant. He will tell you which of the two is right for you.

ICICI bank fined for sending musclemen for loan recovery

ICICI Bank has been directed by the court to pay Rs.20,000 as a compensation to a consumer. Court termed the act of sending recovery agents as “uncivilized” and instructed the bank to pay compensation to a consumer for sending musclemen to his home.

The complainant Rahul Sharma had filed the case before the Delhi State Consumer Disputes Redressal Commission that he got threatening calls and musclemen were sent to his home for the recovery of unpaid installments of a house loan he had taken. The court ordered bank to pay the compensation and Rs 2,000 as the cost of litigation to the complainant.

"In a democratic society governed by rule of law, any other method of recovery of dues from the person who had taken loan from the bank or financier is not permissible. Threatening calls on telephone to recover the amount due and using muscle power by sending musclemen to the house of the borrower is a highly uncivilized act," commission president Justice J D Kapoor ruled.

The case was filed in 2004 when Sharma took a home loan of Rs 450,000 from the bank. The loan amount was payable in 240 EMIs.

Till September 2005 there was no problem but on Sep 19, Rahul was asked to issue the cheques against the EMI as these could not be realized through the electronic clearing service (ECS), by the bank.

Therefore, he issued cheques of the required amount for consecutive months as directed by the bank.

Despite making the full payment, bank used to send musclemen to his house to threaten his family members in abusive language, Sharma stated in his complaint.

But the bank termed the complaint as frivolous and stated that as Sharma had failed to pay his installments on time, the bank is well within its rights to recover its dues. The commission rejected the bank's contention.

The commission in its judgment stated, "The legal process may be slow but it is no excuse for employing musclemen. Such type of 'instant justice' cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy, that too, when the borrower retorts and uses force".

ICICI Bank, Dish TV together launched banking interactive service

ICICI Bank in collaboration with Dish TV on Tuesday launched interactive banking service, ICICIATIVE, which would enable subscribers to access information on the bank's products and services from their home.

Through ICICIACTIVE, Dish TV viewers will be able to get information about various types of ICICI Bank accounts and deposits.
"The association with Dish TV will enable us to further extend our reach and offer latest information to the customers," ICICI Bank Retail Liabilities Head Maninder Juneja said in a release.

Dish subscribers will be able to access information on different products, EMI on loans, eligibility criteria, documentation, and time required for processing a request, ATM/branch details. ICICIATIVE will appear as a separate channel. ICICI Bank customers will get this feature free. ICICI Bank sources said they are open to other DTH service providers for similar kind of understanding.

ICICI Bank adopts new technology

ICICI Bank is country’s largest private sector bank and in adopting latest technology, bank is in the forefront in banking sector in India. Even in business aptitude also currently bank has a long journey with 12 million terabyte of data. The reason for ICICI bank spending so much on technology is mainly because of two reasons- firstly, customer expectations and change in behavior in India and second, the diversified customer base in India.

ICICI group have so many business units like banking, mutual funds and insurance and it is very important for the group to flawlessly incorporate these units because there is an overlap of the customer base among these business units.

Therefore it is very important for the group to have one fundamental group unit having made all acquiescence with different laws and regulations. Retail banking has continuously developed over last two decades. Earlier in 1990s, the banking operation was high cost and people intensive with low scalability and inevitability of customer behavior. But after 10 years, at the start of this new millennium, there has been efficiency in banking operations with lower cost, higher scale and more predictability but lag in differentiation or customized product offerings.

Currently many banks have crossed all hurdles and are offering many personalized products and services. "Efficiencies, effectiveness and adaptability are three pillars of necessities in improving the banking business", says Pravin Vohra, Group Chief Technology Officer of ICICI Bank. A bank requires Enterprise Intelligence capability to process more and more data. And to gain such capabilities, banks are required to have right technology, culture and processes in place.

In case of ICICI Bank, it has taken up a number of proposals like score card, business intelligence for sales and marketing, customer acquisition and linking different accounts of the same customer. According to Mr Vohra the next use of enterprise intelligence will be used in new areas like corporate performance management, master data management, web analytics and enterprise fraud management. It can also be used for budgeting, planning, forecasting and the profitability optimization in the area of corporate performance management.

At the same time, data from different channels can be used by the same customer can be integrated to create master data. But the real gain from the analytics tools can be obtained only if it is properly used. "For any business intelligence tool to be successful, the senior management should believe and own it. At the end of the day, business intelligence is a tool and requires human intelligence to reap maximum benefit out of it", emphasises Mr Vohra.

ICICI bank to pay fine for unfair practice

It has become very common to receive a call on mobile from an insurance company which tries to sell you a policy. Sometimes, companies go beyond this and offer medical insurance policy absolutely free. But, in reality nothing comes free. The customer one day realizes that he has been charged a heavy amount for something which he did not want at all.

Harish Sisodia, a city businessman and Maharashtra Sports Council member had to face this when he received a call from ICICI Lombard General Insurance Company, which offered him a medical insurance policy free of cost. In the beginning, Sisodia did not show any interest in the policy at all but he kept receiving a call from ICICI Lombard executives urging him to accept the policy.

Ultimately, Sisodia agreed to take the policy (No. 4034/FNP/01727327/00/000) on December 29, 2006, but on one condition that none of the policy transactions “would get reflected in his ICICI Credit Card statements”. However, when he received a monthly statement of January 2007, the insurance transactions showed up in the credit card statement. Therefore Sisodia contacted ICICI Lombard and told them to cancel his policy.

Sisodia told TOI, “It took four months for the insurance company to cancel the policy on April 28, 2007, but until then I kept on receiving the credit card statements wherein the premium amount and some other charges were levied”. But, even after this till January, 2008, Sisodia continued to get ‘statements’ showing premium amount and others charges. The total amount had by now risen to Rs 25,422.59.

Sisodia informed, “Unable to take it anymore I contacted ICICI officials on two three occasions and told them to reverse the entries, but all my requests fell on deaf ear.” He said, “With no option left, I approached the Consumer Disputes and Redressal Forum, Nagpur district, which gave a verdict in my favor and ordered both ICICI Lombard and ICICI Bank to pay me a compensation of Rs 5,000 for mental agony. The forum also stamped a cost of Rs 1,000 on both respondent companies.”

The forum observed that Sisodia had taken the policy on one condition that no payment will be made through his credit card. But, ICICI Bank submitted that ICICI Lombard had given them the authority to collect the premium amount from Sisodia through credit card.

The forum further stated that while it was sufficiently clear that Sisodia said that his transactions will not be made through credit card, but neither ICICI Lombard nor ICICI Bank could put forward any proof saying that ICICI Bank (credit card) has been authorized to collect money from Sisodia. The forum considered this an unfair trade practice.

It also supported Sisodia’s views that ICICI Lombard and ICICI Bank being connected companies, the latter provides names of some credit card holders to the former who trail the customers to take policies. Therefore forum directed the ICICI Bank to reverse all the charges relating to the policy.

“We had demanded a compensation of Rs 25,000 for mental harassment. The forum partly upheld the claim and ordered the insurance company and bank to pay Rs 5,000 as compensation and Rs 1,000 as cost,” said Advocate Ranjit Sardey, Sisodia’s counsel.

ICICI Lombard had appealed against the verdict at the state consumer forum but to no avail. In the end, the ICICI Bank had to hand over Rs 6,000 cheque (dated September 5, 2008) to Sisodia on September 18.

ICICI Bank leads in offering remittance services online

India in recent times receives over 12% of global remittances which has made it the single largest recipient country for remittances, followed by Mexico and Philippines.

The World Bank alone has estimated the remittance inflows at USD 337 billion for 2007 from migrants which in recent times have brought considerable attention towards this.

In the recent time remittances to India have skyrocketed to USD 42 billion in FY2007-08 as compared to USD 2.1 billion in FY1990-1991 in the past.

ICICI Bank, India’s largest private sector bank and second largest bank in the country, has come forward in recognizing the remittance opportunity and has started offering a host of remittance services made to meet the needs of various customer segments. It has acquired a market share of over a fifth of the migrant remittances into India.

For this in 2001, ICICI Bank set up an online remittance tracking portal, www.money2india.com which has become the fastest and largest online remittance tracking service for disbursements to India.

Through www.money2india.com bank offers tracing money transfers from any bank in over 10 countries to any bank in India through ICICI Bank’s correspondent banking network along with centralized transaction processing and 24X7 customer support.

Money2india is leveraging the payment infrastructure in India to the fullest, offering credits to accounts in ICICI Bank, electronic payments using the National Electronic Funds Transfer (NEFT) system to over 100 banks, payments to debit and credit cards (through VISA) and bank drafts.

The website is a convenient and a user friendly for money transfer tracking service. There is only one-time simple registration process after which the user can, at his convenience track the sent money as and when s/he wants from the comfort of home or office.

Peerless in tie-up with ICICI launches co-branded credit card

With the increase in defaults in payments of credit cards banks are going slow on issuing credit cards. ICICI bank country’s largest private sector bank and Peerless General Finance & Investment Company Ltd in a tie-up has launched a co-branded credit card.

Under the banner of Peerless Smart Money, the credit card business will operate it is already selling life insurance, general insurance and mutual funds products.

Addressing a press conference during the launch of credit cards S K Roy, managing director, Peerless General Finance, said, "Through Peerless Smart Money, we seek to ensure total customer satisfaction."

In the beginning, the company will be disbursing the card through 76 branches across the country.

Ray informed the company is aiming to launch its own insurance and mutual funds products soon.

Similar to all other credit cards, standard offers like balance transfer and utility bill payment services will be offered through the cards.

Speaking during the launch, Jayanta Roy, director, (corporate planning and strategy), of Finance, said, by 2010, the Peerless has plans to considerably build up its operations.

ICICI bank reduces interest free credit periods on credit cards

ICICI Bank the largest credit card issuer has recently done changes in the interest-free credit periods. Such a move taken by the banks is going to prove a setback for the credit card holders regarding the interest-free credit periods.

The bank has reduced the interest-free credit period on its credit cards to a maximum of 48 days, earlier it was 52. After this change now the card holders will have to pay up within 18 days on receiving the monthly statement rather than 22 days earlier. Nowadays a very special rewards point are being offered with icici credit card so make a check to them and choose the best one.

Sachin Khandelwal, head of cards group at ICICI Bank said, “We decided to reduce the cycle in May 2008. It was communicated to the customers in June, so it has been effective from the July cycle. There is no particular reason for reducing it. The market has a cycle of 46-52 days and we have decided to keep it at 48 days.”

However other bankers are not persuaded with this move of ICICI Bank. The bankers are of a view that ICICI bank might have done this without a reason. Going by them, the rising cost of funds could the reason behind this move.

Earlier the Reserve Bank of India tightened the liquidity measures which had resulted in rise in the cost of funds of banks in the recent months. In turn this has reduced their ability to offer bigger concessions such as free credit periods on cards. More over banks having low current account and savings account deposits which contribute for lower-cost funds compared to other sources have been hit harder.

Subrat Pani, business head - cards, Kotak Mahindra Bank, conceded, “If the cost of funds increases, banks might look at revising the credit cycle.”

However Kotak Mahindra Bank, entered in the credit card business in mid-April this year, has already kept the free credit period to a maximum of 48 days from the beginning. “The credit cycle is different for each bank. We have decided to keep it at 48 days and we do not plan to change it,” said Pani.

DNA Money reporter contacted other major credit card issuers whether they are also planning to lower the interest-free period.

HSBC Bank sources informed that they will not change the current credit cycle, it will remain at 22-52 days. But, the bank refused to comment on whether it has any future plans of reducing it.

Other banks foreign banks such as Citibank and Standard Chartered Bank also informed that they have no plans to change the credit cycle in recent times.

A Citibank spokesperson told DNA Money, “The interest-free or grace period for all Citibank Cards ranges from 17 to 55 days. This is stated in our customer communication and we have no near-term plans to change the disclosure.”

However if we look on the other side, some banks have raised the interest rates on their credit cards. Earlier banks charged an interest of 2.95% per month, or 41.75% annually, but now they will be charging as much as 49-50% annually on some cards.

In some cases, the interest charges vary, i.e. it depends on the last bill payment. “Customers who consistently maintain a good payment record are eligible for rates as low as 1.49% per month. However, customers who miss their payments repeatedly can see their rates rise to a maximum of 3.5% a month,” said the Citibank spokesperson.

Hence the card holders should better start repaying their debts. This is the only best option.

ICICI bank Airtel join hands to provide M-Cheque facility

ICICI bank country’s largest private lender and Airtel are planning to launch M-cheque cashless transaction facility for bank customers.

There are rumors that Tata is already working on this type of project called Tata IndiPay. Now Airtel and ICICI bank will be joining hands to allow the bank customers to use their mobile phones for conducting transactions.

The two companies in joint venture will be offering a facility called M-Cheque which will enable the facility of cashless transactions. Consumers will be required to have an Airtel connection with a SIM card with 32K capacity.

For this project ICICI Bank is taking services from Mumbai-based IT firm Littleworld to develop the technology. In this process a merchant will be required to send an SMS to Littleworld, which will have the customer’s mobile database. After the getting authorization from the ICICI bank, an SMS will ask for the customers’ authorization. Also must check out icici housing loan to make your dreams come true to buy a fully furnished house.

After getting authorization, from both the bank and the customer the transaction will be completed. The merchant would receive the payments though the bank the next day. ICICI Bank general manager B Madhivanan said on this new initiative: “We have launched the pilot project in some 100 outlets and for customers in Delhi and Mumbai. The project will be ready in some month’s time. Based on the results of the pilot project a proper rollout will be initiated”.

Two-wheeler makers to get into finance biz.

After ICICI bank decision not to provide two-wheeler loan facility through its dealer network as part of its efforts to cut down expenses, the two-wheelers manufacturers are gearing up to enter the finance business by either expanding their non-banking finance arms or through tie-ups with local financers.

However the ICICI bank said that it will be providing two wheeler loans at its branches.

Two of India’s largest two-wheeler manufacturers TVS Motor and Bajaj Auto, have almost finalized the alternate arrangements to finance their businesses. “This would mean better service for customers,” said S Sridhar, CEO, two-wheelers, Bajaj Auto. “However, we would ensure that the customers’ credit history is properly scrutinized”.

However both the companies have expanded their domestic finance arms, TVS is trying for outsourcing finance to local financers to fill in the gaps at its showrooms across the country. The company is having talks with up to six local financers in various regions as well its own finance arm, TVS Finance.

HS Goindi, head of sales, service and marketing, TVS Motor pointed out, “The question is not of credit, it is of the need for two-wheelers in India, and we are working out a strategy to fill the need”. “Since local financers have better local knowledge, they will be able to figure out a way to ensure credit quality.”

Bajaj Auto Finance Ltd, the finance arm of the Bajaj Group, has decided to enter the two-wheeler finance market.

“Mercedes Benz, Audi are among some companies abroad who have been very successful in finance businesses. We feel this is an opportunity,” said Sridhar.

Sridhar informed BAFL is on the expansion mode since last six months.

Companies do agree that ICICI Bank’s pullout is going to hurt two-wheeler makers, they also said that the quality of credit is not necessarily a killer. “There is a huge need for two-wheelers in the Indian market, and we have seen growth at TVS in the last two months,” said Goindi.

ICICI Bank launched "b2- Branch- free Banking"

ICICI Bank, India’s second largest bank has launched “b2- Branch- free Banking“. Through “b2- Branch- free Banking“, bank will be offering flawless information through a single interface to make banking transaction easy, over the internet. With this unique direct banking customers will be able to manage all their finances online.

Besides this for easy access and anytime anywhere banking, customers opting for “b2-Branch- free Banking“, will be benefited from zero charges and no minimum balance. Under this the customers will also benefit from quantum optima facility, in which if the balance exceeds Rs 5000, the money is automatically transferred, in multiples of Rs 5000, to a linked fixed deposit which will earn ICICI bank fixed deposit rates. Along with this bank will also offers facilities like an e wallet – a zero limit pre paid visa card which can be used for online purchases and to pay utility bills.

While explaining about the new banking scheme Mr. V. Vaidyanathan, Executive Director, ICICI Bank Ltd said, “b2- Branch- free Banking”, implies to a new way of banking -100 % online. Currently India has over 49 million internet connections and this number is growing at around 20%. Therefore this innovation of banking “only” on the net will gather momentum.”

He informed “b2- Branch- free Banking”, is complete safe as it offers complete security to customers transacting on the internet by using different tools, methods, and processes to protect account information and banking transactions.

ICICI Bank Limited is India's largest private sector bank and the second largest bank in the country, have a consolidated total assets of $121 billion as of March 31, 2008. ICICI Bank’s subsidiaries include India’s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. Currently ICICI Bank’s has presence across 19 countries, including India.

In online fraud bank manager loses Rs 53,000

An online fraud has come into light in which, 48-year-old Abhay Sharad Bapat, chief manager of Janata Sahakari Bank in Shukrawar Peth, has lost Rs 53,528. Bapat, in July 2007 got an American Express Card of the ICICI bank. He told that he accepted the card as it was free but never used it.

Bapat said. “I have not used the card even once. In February, I got an SMS from the ICICI bank saying that money to the tune of Rs 53,000 from my account has been transferred to the account of Eseva Epayments Company in Hyderabad through two online transactions”.

He added, “I informed the customer care service of ICICI immediately that I never did these transactions. I was asked to file a written complaint on receiving the bill of these transactions”.

He informed, “I got the bill on March 16 and the same day I filed a complaint that my card has been misused. The bank gave me a complaint number. Even after this, the recovery agents of the bank started coming to my house and workplace demanding money. I also received several calls from the bank asking me to pay the amount”.

He further added, “I repeatedly contacted the ICICI customer care officials requesting them to stop the nuisance. But still the pestering by agents and phone calls continued. Finally, I approached the cyber cell of Pune police two weeks back”.

On Tuesday case has been transferred to the Kothrud police station. Police believes that a cyber fraudster must have stolen the secret information of Bapat’s card. The case has been handed over to police-sub inspector S N Choudhary for investigation.

In the meantime, Home Minister R R Patil has informed that help will be taken from the Central Bureau of Investigation (CBI) for nabbing the Nigerian fraudsters involved in the credit card fraud at Le-Meredien hotel. On Tuesday in the State Assembly, Patil also announced an award of Rs 50,000 for the Pune police team for exposing the fraud with the arrest of eight persons in the case.

Award announcement was made in the assembly after MLA Chandrakant Chhajed gave a statement in which he pointed out there has been rise in online fraud cases which has created fear in the minds of credit card holders.

ICICI to raise service charges from 1st August

From August this year ICICI bank the largest private sector bank in the country will be increasing its service charges.

Earlier last month, IDBI (formerly IDBI Bank) had revised its fees. Kotak Mahindra Bank revised fees in January and the State Bank of India raised its service charges in February this year.

With the increase in service charges one will have to pay more money to make a demand draft from one’s bank and a higher penalty if a cheque drawn on or deposited in the bank account is dishonored. Banks are also raising fees for collecting outstation cheques, issuing statement of accounts on ad hoc basis, duplicate passbooks and a host of other services.

Although ICICI Bank, has already increased the average quarterly balance requirement on a regular savings account to Rs 10,000, and have plans to charge Rs 50 per demand draft up to Rs 10,000 and Rs 3 per Rs 1,000 thereafter, subject to a minimum of Rs 75 and maximum of Rs 15,000, from August 1. Currently bank is charging Rs 2 per Rs 1,000, subject to a minimum of Rs 50 and maximum of Rs 10,000.

The bank will be also increasing the price for cheque books. While it is giving 50 payable-at-par cheque leaves every quarter for free, but from now the bank will be distributing only 30 such cheque leaves without any charge. Any additional cheque leaves will cost Rs 2 per leaf. Thus, one will have to pay more if one writes more than 30 cheques in 121 days or one cheque in four days, beginning August this year.

Experts say banks are increasing their service charges to shore up their non-interest income in the current financial year. As the deposit rates are going up and there has been a significant slowdown in credit growth; therefore banks have started feeling the pinch of declining net interest margin. In view of stock market dipping and unprofitable treasury operations following the rise in interest rates, banks are planning to take a hit on income from investments.

“Income from core banking operations is likely to suffer during the first two quarters, at least in the current financial year. Hence, banks are on the look out for increasing their fee-based and other non-interest income,” said M.V. Nair, chairman and managing director of Union Bank of India. According to bankers the cost of deposits is going up, therefore banks are looking to mobilize more low-cost deposits. In view of this Kotak Mahindra Bank and ICICI Bank had already raised the minimum average quarterly balance for their savings accounts to Rs 10,000 earlier this year.

Police arrested ICICI bank recovery agent for theft

Police arrested ICICI bank recovery agent for theft at Bhiwandi near Mumbai. Police said accused Tabrez Jafri, worked as recovery agent with ICICI bank at Bhiwandi was arrested on Sunday for snatching a gold chain of a woman near Apsara Cinema in Pratapnagar locality.

From the accused police recovered gold ornaments, including bangles, chain and necklaces.

Police said the incident occurred on Sunday evening when the police was on their regular patrolling duty, heard some uproar near the cinema hall where maximum robberies take place.

Police informed but it was not just Jafri, there were three others too who were involved in the heist. All the four accused were from Maharashtra. Police said further probe is being conducted on the matter.

ICICI to review interest rate trends and RBI steps before hiking interest rates

ICICI Bank country’s largest private sector lender bank released a statement in which it stated the bank will be closely monitoring interest rate trends and the Reserve Bank of India's steps for managing inflation before taking any decision on interest rates. Currently ICICI Bank's benchmark prime lending rate is among the highest in the industry at 15.75%.

ICICI Bank Executive Director V Vaiadyanathan pointed out that most banks will take decision on interest rates after reviewing RBI's quarterly review next month.

ICICI Foundation for Inclusive Growth launched a new plan, Read to Lead. Under this scheme about 100,000 disadvantaged children will be helped to access formal education.

ICICI Bank directed to pay Rs 10,000 compensation to credit card holder

ICICI Bank Ltd was directed by a consumer forum to compensate Sunil Kumar Sinha a city resident for withdrawing money from his credit card account and issuing a medical policy without his consent.

Sinha in a complaint before the forum, alleged that ICICI Lombard General Insurance Ltd had issued medical policy in his and family members' names without any consent or authorization.

He said that when he raised objection on the withdrawal of Rs 9,000 from his account, the company refunded him just Rs 7,000 but held back Rs 2,000 as service charge.

"The bank argued that policy was issued to complainant on telephonic instructions. But it could not file any such record where daily telephonic messages are stored. The forum holds that it had issued medical policy without consent, authorization and knowledge of complainant," forum President A K Jain said.

The forum also instructed the bank to pay Rs 10,000 as compensation to Sunil Kumar Sinha, also Rs 3,000 as cost of litigation.

The panel, comprised S C Jain and M Siddiqui as members, has also directed the bank to credit a sum of Rs 5,204 in Sinha's account, noting that the amount was withdrawn without any authorization from him.

Sinha, also have a salary account with ICICI Bank, he further stated that the company had withdrawn Rs 5,204 from his account without any notice, causing him "great mental and physical harassment."

However the insurance company told the forum that it had issued the medical policy following a telephonic request from Sinha and denied any deficiency in service, maintained that the money was withdrawn in accordance with the terms.

ICICI Bank in no hurry to hike retail loan rates

In an exclusive interview given to NDTV ICICI Bank Joint Managing Director, Chanda Kochhar, said that it would be early to say that interest rates on retail loans will increase in the wake of the increase in the repo rate by the Reserve Bank of India. She added the bank does not see a pressure on deposit rates and the retail rates might be hiked in case of liquidity getting tighten up.

Regarding loan growth, Kochhar said at present the bank sees a loan growth of 20 per cent, but the composition will change, with retail finance to grow at 12-15 per cent. She said that currently there is no slowdown in corporate investment demand.

ICICI bank to orient itself towards fee-based income

ICICI bank mainstream for its growth has been retail business all these years but now bank is changing its track of business to fee-based income. Mr Vijay Chandok, Senior General Manager, Head SME Business, ICICI Bank said banking industry is facing pressure on spreads hence ICICI bank will be focusing itself towards fee-based income this fiscal.

Bank is looking forward to increase its share of current accounts and add to its fee income by improving the business banking services. The bank’s total fee income is getting 13-14 per cent from SME sector, though its share in total assets is about 2-3 per cent.

“This year, our orientation is towards improving the visibility and servicing of current account business in our branches,” Mr Chandok said. Mr Chandok said.some visible changes will come in the forefront in the bank’s branches and the staff too will be encouraged through incentives linked to business banking services and products to encourage promoting business banking products and not merely retailing.

The bank’s share of low-cost CASA (current account savings account) to total deposits was 26 per cent, as on March 31, 2008.

Mr Chandok in an interview told Business Line, that the SME sector can experience moderation this fiscal, as compared to last year, but it will be restricted to industries that are highly export-oriented.

He added there has been some muting of growth in export-oriented industries such as apparels and IT, even though the dollar has seen a rebound. In fact, the investment market continues to be healthy as companies are looking to acquire relatively low-priced assets overseas this will them to access overseas markets, while they can provide low-cost manufacturing domestically, he said.

Mr Chandok added while demand for credit is strong and liquidity is not a problem, interest rates are likely to have an upwards bias, due to inflation.

“The question being asked by companies is that of cost,” he said. About the emergence of new clusters within the SME structure, Mr Chandok said, “Infrastructure in SME space is basically small contractors who work with large companies. That is a strong growth area for us. In the next few years there will also be significant investment in social infrastructure, such as educational institutions and wellness centres.”

Mr Chandok informed for the last five years ICICI Bank’s SME segment has seen a growth of over 50 per cent and is expected to maintain the same this year as well.

ICICI Bank hike credit card interest rates

The ICICI bank cardholders have to pay more interest on “extended credit and cash advances”. Bank has increased “extended credit and cash advances” from the current 3.15 per cent per month (45.09 pc per annum) to 3.40 per cent per month (49.36 per cent annualized) effective from June 1, 2008.

Bank is informing its customers through credit card statements sent to them. At the bottom of the statement there is an inconspicuous line conveying about the increase in interest rate.

Credit card industry has always been known for hike in rates and it signals to troubled times. Most of the card companies are charging around 2.7 per cent to 2.9 per cent per month or about 36 per cent per annum and this also has been criticized as being exorbitant rates.

From long time there has been demand for lower interest rates on credit card spending. But card companies have always defended against hike in interest rates with a reasoning of high default rates, poor laws and lack of any security and the bad borrower behavior.

Across the card industry earlier default rates were in the 5-7 per cent range have now double says Shameek Bhargava, Managing Director, Head of Cards, Asia Pacific, Deutsche Bank, India.

According to State Bank of India in the recent times its losses on the credit card business were of the order of Rs 150 crore and non performing assets (NPAs) on this portfolio had touched a whopping 16.5 per cent. The problem became so severe that SBI had to replace the head of the card company with one of its own officers.

It has become difficult to understand why the credit card industry is facing loss when the economy is growing at 9 per cent and there has been a 15 per cent growth in wages and salaries for the last three years at least – not to mention the considerable amount of spending on consumer goods, entertainment, groceries and travel.

According to Mr Bhargava the reason is increase in number of highly over-leveraged customers using multiple cards and creating havoc all around. He suggests that to tackle this problem card companies should use more of own sales agents rather than outsource the marketing function to other agencies.

The borrowers splitting off the system through multiple banks, accounts and cards led to the need for the formation of the Credit Information Bureau of India (CIBIL), an agency meant for sharing borrower information among lenders, was started a couple of years ago. On seeing the numbers it would be clear that the lenders are not making the best use of resources available.

A credit card official name to be kept anonymous said, “About 80 per cent of due diligence is being done on their own by all major banks. A verification of data from CIBIL is being taken up on an optional basis. CIBIL may become popular only three to five years from now going by the present use.”

In fact at present there is very little hope of any immediate improvement. Earlier this year Credit Rating agency Crisil had forecast that the NPA situation in personal loans would worsen this fiscal. Credit card holders, brace up.

ICICI Bank launched financial solution for ultra- high class

ICICI Bank for years, country’s largest private sector lender in a bid to capture the fast growing Indian ultra-high class customer segment, has launched a novel financial solution. The bank said it aims to add over 1,000 customers in this space in 2008.

ICICI Bank's Executive Director V Vaidyanathan, in a press meet told reporters, "The bank would provide end-to-end financial solutions to cutsomers having a networth of above USD one million (around Rs 4 crore). The client-base in this segment is expected to grow to 3,500 from the present 2,500 by the end of this year."



He said the bank, will be offering to its customers solutions in alternative investments, structured notes, insurance products, corporate services, private equity investments and investment banking amongst others.

Vaidyanathan said at present, the bank's total client invested assets under management in the private banking portfolio stands at USD 26 billion and India alone contributes nearly USD 19 billion.

He further added that India, which has witnessed a robust economic growth over the last four years, has nearly one lakh people having wealth above USD one million. It is expected that the projected figure will grow by 20 per cent each year.

ICICI Bank launched financial solution for ultra- high class

ICICI Bank for years, country’s largest private sector lender in a bid to capture the fast growing Indian ultra-high class customer segment, has launched a novel financial solution. The bank said it aims to add over 1,000 customers in this space in 2008.

ICICI Bank's Executive Director V Vaidyanathan, in a press meet told reporters, "The bank would provide end-to-end financial solutions to cutsomers having a networth of above USD one million (around Rs 4 crore). The client-base in this segment is expected to grow to 3,500 from the present 2,500 by the end of this year."



He said the bank, will be offering to its customers solutions in alternative investments, structured notes, insurance products, corporate services, private equity investments and investment banking amongst others.

Vaidyanathan said at present, the bank's total client invested assets under management in the private banking portfolio stands at USD 26 billion and India alone contributes nearly USD 19 billion.

He further added that India, which has witnessed a robust economic growth over the last four years, has nearly one lakh people having wealth above USD one million. It is expected that the projected figure will grow by 20 per cent each year.

ICICI Bank slapped with damages for debit error

In a recent judgment the state consumer disputes redressal commission instructed ICICI bank to pay Rs 30,000 in compensation to Kalyan Kumar Sur, a resident of Dum Dum’s RN Guha Road.

The bank has been charged for wrongly debiting customers credit card account and sending him monthly statements even after he had surrendered the card.

In its order the commission said a copy of the order must be sent to the Reserve Bank of India governor, “so the RBI is aware how the business of a reputed private bank is conducted and how the credit card-holders are taken for a ride”.

The complainant Sur was holding a Gold Credit Card and his wife Sarbani an add-on card of ICICI Bank. On December 30, 2004, Sarbani made purchase worth Rs 183.95 using her card and repaid the amount on February 1, 2005.

Sur alleged that the dues were cleared within the deadline of interest-free repayment, then also the bank in the statement issued on February 2, 2005, levied a late payment charge of Rs 250 and service tax of Rs 25. This, along with other purchases, took the closing balance to Rs 655.

Therefore Sur approached the bank and he was assured by the bank officials that the mistake would be rectified. But it was not. In spite of repeated reminders sent by Sur to bank authority for the irregularity, the subsequent statements kept charging the couple interest and service tax.

In the statement of September 9, 2005, bank showed the charges of Rs 29,827, which the bank claimed was a “debit transaction” in the earlier month. The closing balance in October 2005 was around Rs 42,000 and the bank asked Sur to pay up immediately.

Although couple had stopped making purchases using the cards, the debit balance kept increasing in the subsequent months, prompting Sur to ask for proof of his taking any loan from the bank.

Sur had returned the credit card to the bank in January 2006 after tearing it apart.

A lawyer’s notice was sent to him by the bank asking him to clear all the dues immediately. At this Sur filed a complaint with the Calcutta District Consumer Forum II, alleging that the bank could not produce any evidence of providing him a loan and yet was threatening him to “repay the dues”.

After hearing the case the forum slapped compensation of Rs 1 lakh on ICICI Bank. The bank then moved the state commission against the order, denying the allegations of Sur.

“The allegations of the complainant were without any basis, since he had failed to adduce satisfactory evidence in support of his contention,” the bank told the commission.

But banks plea was dismissed by the state panel and asked it to pay a compensation of Rs 30,000 to Sur.

“We are yet to get the certified copy of the order. Once we receive it, the course of action will be planned,” said a bank official.

Pay ICIC Prudential Life premium online

ICICI Prudential Life Insurance signed an agreement with American Express Banking Corp, to provide the online payment gateway to the private insurer's policy-holders across the world to pay their premiums online.

According to banks press release customers who are ICICI Prudential Life policy-holder and also have American Express Card will be able to log into insurance company's website to pay premiums through American Express online payment gateway.

On the other hand, policy-holders have another option also they can go to any ICICI Prudential Life branch and make a one-time premium payment. Furthermore, the policy-holder also having credit card can give instruction for auto debit from credit card for subsequent premiums.

ICICI Prudential Life's Executive Vice-President, Anita Pai, said "our partnership with American Express is yet another step in the direction of making customer interactions convenient and effortless."

ICICI bank to enter into private banking

ICICI bank country’s second-largest bank is getting into private-banking by extending its retail segment to the higher-end of the market. However ICICI is making entry late in this segment whereas for the past few years host of foreign banks like BNP Paribas, ABN Amro, Deustche Bank, Citi, HSBC, Merrill Lynch, are already operating in this segment and will have to face competition from them.

In India the number of millionaires (those with liquid assets of over Rs 4.3 crore) has increased which is estimated to be at over 1 lakh, has allured banks to get into private banking space. According to ICICI Bank officials there are around 20 % of the bigger players in the market.

Private banking refers to the personalized service provided to elite customers as against mass retail banking. In fact private banking is more people and process-driven than capital intensive. ICICI Bank main focus in the beginning will be more on the middle and the upper ends of the markets. Recently it has doubled the minimum average balance for its savings accounts to Rs 10,000 from Rs 5,000 earlier.

Similarly to other banks in India, ICICI Bank has also set $1 million as an entry limit for private banking. The bank is having a team of 250 relationship managers globally and plans to add another 100 to its team. V Vaidyanathan, ED, ICICI Bank said, “We already have 2,500 customers and are looking to add 1,000 more in the next one year. We will be launching this product in all the countries where we have a presence. Globally, this is a $30-trillion opportunity and is growing at a fast pace.”

Bank will be facing two way challenges from the existing foreign banks as well as from new entrants. Swiss bank UBS, the world’s largest private banker, has obtained a banking license and is expected to enter the market soon. Other players like Morgan Stanley have recently launched private banking in the country. In addition to this there is a host of Indian players in wealth management; in this segment ICICI Bank is already having its presence for the past few years. ICICI Bank officials claimed that they are already having $26 billion of assets under management, of which $19 billion is in India.

ICICI Bank makes strategic shift to corporate loans

ICICI Bank India’s second largest private sector lender has decided to refocus on corporate loans as its sees bigger opportunities in this segment. Therefore it has decided to go slow on its retail assets expansion though after three years it has seen fast growth in the segment.

As a result, consumer loans, mortgages and auto loans, which collectively accounted for about 69% of ICICI’s total loan book two years ago, have now come down to 58%, and are set to go down further.

The shift stems from India’s second largest private sector lender believing that there is a bigger opportunity in corporate loans.

Whereas, some banking experts believe that ICICI who has been an aggressive consumer lender all these years, has experienced bitter end in the retail segment due to growing non-performing assets or NPAs in such loans. While Chanda Kochchar, joint managing director and CFO of ICICI pointed out that it is not possible to keep growing at the bank’s previous scorching pace, especially when its base is expanding.

In an interview given to Mint Kochchar said, “The growth rate of consumer credit will come down from 35-40% to 12-15% this year”.

She said growth in consumer credit will be in accordance with the industry, but its growth for corporate credit will be higher than the industry, or more than 20%. She explained that the main focus of the bank will be on retail liabilities instead of assets, which means the bank will be aggressively mopping up retail deposits and not go for retail loans because retail deposits cost less than wholesale deposits, which in turn can bring down the cost of deposits and add to the profitability of ICICI.

Currently the bank has already pushed up the share of current and savings accounts of its total deposits to 26% from 22% of its total deposits by focusing on retail deposits.

A bank is not paying any interest on current accounts and pays 3.5% on savings accounts.

“Three years back, our corporate credit book was growing at 5%,” said Kochchar. “(For the) last two years, the growth was around 12-15%. Now, we could grow at even 25%. The high consumer spend in the last few years created huge demand, and Indian firms now want to invest big money. By our estimates, there is about $700 billion (Rs29.9 trillion) investment in the pipeline. If you include the working capital requirement of Indian firms and the money required for overseas acquisitions, banks’ corporate loan book should grow between 20% and 25% this year.”

Kochchar also confronted the market insight about growing NPAs in consumer finance in ICICI Bank.

“Yes, the total value of NPAs in consumer loans is growing, but this is because our portfolio of unsecured loans is growing,” she said. “Earlier, unsecured loans were 13% of our total retail loans and now they have gone up to 18%. But, the losses are moving within the accepted level.”

In March the net NPAs of ICICI raised to 1.49%, which is up from about 1% a year ago.

ICICI Bank cash van traceless after 24hrs

Bullet-proof van was hijacked at Salgadi on NH-33, about 65km from Jamshedpur, was carrying of carrying Rs 5.07 crore cash and gold coins weighing 1.20kg belonging to ICICI Bank. The van remains untraced even after 24 hours. Police suspects Maoists behind this hijack.

Director-general of police V.D. Ram said, “Neither the vehicle nor the cash and gold have been recovered so far but we are making all efforts.” He had visited the site of loot between Tamar and Bundu this afternoon.

According to senior police officers it is the fault from the ICICI Bank side for not informing the district administration about the movement of cash from Jamshedpur to Ranchi, allegedly undertaken by the bank at least twice a month, as per procedures it is mandatory to give prior information.

In fact the police are working on a “conspiracy” angle to the robbery. Ranchi police today cross-examined several key bank officials suspecting involvement of insiders of ICICI Bank’s Bistupur or Sakchi branch of revealing to the extremists about the cash movement, including van driver Vinay Singh, security guards Sagar and Babulal Mahto, two loaders Albinus Kachhap and Soma Kacchap, and bank official Parveen Kumar, who were in the hijacked vehicle.

East Singhbhum superintendent of police Naveen Kumar Singh, had made an on-the-spot, inquiry, said, “Some of the bank officials appear to be hand-in-glove with the extremists.”

Superintendent of police remarked, that, “The occupants of the high-profile security van had stopped at Salgadi on their own. The question arises, why they stopped the vehicle at a place, which is Naxalite-prone. Also, how could the Naxalites reach there moments after the van had stopped?”

The police suspect the hand of Jharkhand Liberation Front of India (JLFI) behind the said robbery, which was till recently known as Jharkhand Liberation Tigers. Jharkhand Liberation Front of India is known to loot and rob to fund their operations.

The police has intensified search around Barigarha forest where it suspect extremists might be hiding with the van belonging to the Mumbai-based Top Security Agency, along with all the cash and gold. A technical team has also been set up to track down the exact location of the van and the extremists.

A four-member team, including two retired IPS officials of Top Security Agency has been sent to assist the police.

ICICI Bank launches Platinum Identity Credit Card with high value offers

ICICI Bank India’s largest private sector bank launched a new card in its premium series ‘ICICI Bank Platinum Identity Credit Card’. The card has been designed to for the elite section of the society who wishes to experience the privileges that are offered to the global cardholder. The ‘Platinum Identity’ credit card offers a high value scheme, as it brings together shopping, travel and golfing privileges along with a powerful reward program and distinguished service benefits.

The card is an up gradation of its previous lifestyle and travel cards designed keeping in view with the changing lifestyle and demand of the people.

Sachin Khandelwal, head- cards product group, ICICI Bank said, “This card is launched keeping in mind the fact that our customers have matured and demanding more exclusive offers. We will offer our customers value and privileges which are, the best in the industry. Keeping in line with the changing lifestyle of our customers, the Platinum Identity product has been designed to make cardholders feel truly special as well as to meet their evolved needs specially related to travel and lifestyle. This is a global offering at a truly competitive price point.”

The card carries a nominal fee on an annual basis, and the card has a credit limit of Rs 2.5 lakh plus.

The other exclusive features and privileges the card offers are accelerated rewards program, exclusive rewards catalogue, a powerful air mile conversion option and travel benefits which include Rs 1 crore air accident insurance and complete fuel surcharge waiver across pumps.

Apart from this the card also features a full-fledged concierge services, named i-Assist, which will address the lifestyle needs of the cardholders.

The Platinum Identity Credit Card offers the following features:

• Welcome privileges - Golf Fee Card with two year membership and Priority Pass
• Accelerated rewards earn – double reward points on international spends, fast-forward earning through the powerful Xpress Rewards program
• Exclusive rewards redemption catalogue ‘Hand-picked Rewards’ featuring premium brands
• Superior air mile conversion program – Convert your reward points into air miles
• Comprehensive air accident insurance of Rs. 1 crore
• Complete waiver of fuel surcharge
• ‘Specials’ - Exclusive offers in lifestyle categories
• ‘i-Assist’ - A round-the-clock, complimentary service that provides assistance with travel and restaurant reservations, gift arrangements, event tickets, and more.

Crisil downgrades ICICI Bank’s securitized car and personal loan pool

There has been rise in the number of defaults on payments by borrowers therefore the rating agency Crisil has downgraded ICICI Bank’s securitized car and personal loan pool worth over Rs 203 crore from AAA (so) to AA (so).

In 12 months the negligence levels for the loan pool since securitization has gone up than expected, with collections significantly going down below expectations.

Crisil in its report said this has led to the rating revision for pass through certificates (PTCs) series A13 (Rs 105.73 crore) and A14 (Rs 98.2 crore).

Prasad Koparkar, head of structured finance rating with Crisil, said there has been no default in payment to PTC investors. There are enough credit development cushions for payment to investors in securities.

For instance while securitizing loans, the cushion will be in multiple of expected defaults rate. He added for Rs 100 crore loan pools if the expected default rate is Rs 5 crore, then the credit enhancement will be three-four times the default rate.

There is no need to panic as the rise in default of personal and vehicle loans extended by banking and financial entities is on expected lines. When banks will move away from the saturated safe loan market, the default rate is set to go up, as they are persuading the relatively higher risk segment (self employed). But these segments of loans also carry higher interest rates — reflecting risks and higher transaction costs.

All the PTCs are backed by a pool of new car and personal loan receivables created and serviced by ICICI Bank. The rating outfit reaffirmed the outstanding ratings on 16 other PTCs. The reaffirmed papers carry AAA (So) rating.

ICICI bank, SBI to be affected most by CRR hike says analyst

The inflation is running at a three-year high and the interest rates are also at the highest in six years. To control the inflation the Reserve Bank of India (RBI) on April 17 said that it will raise the cash reserve ratio (CRR). On the other hand banks are already facing slower loan growth as the interest rates are high due to which there has been fall in the earnings and returns have fallen by 1 percent to 2.7 per cent.

The statement released by the central bank in Mumbai on April 17 stated CRR will be raised to 8 per cent from 7.4 per cent in two phases by May 10. The central bank said the increase, the first in 2008, would drain as much as Rs 18,500 crore from the financial system.

According to a Goldman Sachs Group report the nation’s two biggest banks State Bank of India (SBI) and ICICI Bank, will be affected most by the central bank’s decision to increase the amount of cash they must hold with it.

On April 18 Goldman analyst Sampath S K Kumar had written in a note to clients, “ICICI Bank is likely to be the most impacted by this change followed by State Bank of India and other state-owned banks.”

ICICI bank is more dependent on large deposits that come with higher interest rates so the average cost of the funds is much higher than the most state-run banks. The State-run banks have lower cost deposits from retail savers.

According to information available on the websites of the banks low-cost deposits, which consist of current and savings accounts, comprise 27 per cent of ICICI Bank’s deposits and 39.45 per cent of State Bank’s.

To review the monetary policy the central bank is holding a meeting on April 29. In the year through March 2008, the loan growth has slow down to 21.6 per cent from 28.1 per cent a year earlier as consumers have postponed purchases of automobiles and homes because of higher interest rates.

ICICI Bank raises savings a/c minimum balance limit

The country's largest private sector lender ICICI Bank on Wednesday increased the limit of minimum quarterly balance to be maintained in its savings account. The bank said it has doubled the minimum quarterly balance to be maintained in its savings accounts to Rs 10,000. The reason it gave is the cost of infrastructure has increased with the expansion of service offerings for its customers.

The bank's Executive Director V Vaidyanathan told the media from Mumbai that the new minimum balance requirement, will be effective from July 1, and is not applicable to the salary, no-frills and senior citizen accounts.

He added the salary and no-frills accounts do not require minimum balance to be maintained, while minimum levels for senior citizen accounts remain untouched at current levels.

Vaidyanathan said for over 10 years the bank has been maintaining the minimum balance at Rs 5,000 and now it has become necessary to revise it in view of the rise in the number of services customers were being offered.

"There has been a sharp increase in the number of customers, branches and ATMs, while the bank timings have also been increased... This required us to revise the minimum quarterly balance," Vaidyanathan said.

Most of the foreign banks operating in the country are already having a minimum quarterly balance of Rs 10,000 for savings accounts, though some of the domestic private banks such as HDFC Bank have it at Rs 5,000.

Whereas, public sector banks have a much lower minimum balance, mostly ranging from Rs 500-1,000 per savings account.

When the second largest private sector lender HDFC Bank, was inquired about their plans of increasing minimum balance companies spokesperson said, "There are no such plans at this moment."

ICICI in tie-up with Visa, Elcom Systems launch Visa eMarketplace

The first Visa eMarketplace service has been launched in the Asia Pacific region, jointly by Visa, ICICI Bank and Elcom Systems Ltd. A press note released said Visa eMarketplace is an online gateway that connects sellers and buyers of commercial goods and services.

The press release said Visa eMarketplace will provide a platform for the businesses in India to conduct the entire procurement and payment transaction electronically and efficiently over the internet using a Visa purchasing card.

Mr Santanu Mukherjee, country manager, South Asia, Visa International, informed, Visa eMarketplace has been designed to be an efficient, perfect and transparent procurement system for the commercial and government sectors. He further added that it will help to eliminate the need for paper-based purchase orders and approvals therefore with eMarketplace manual effort will be reduced as the process of payment and management of costs is automated.

Visa eMarketplace is fully secured online option that has been built on the existing Visa purchasing card platform. By using this seller will be able to give buyers easy access to their product catalogues while buyers can have better understanding and management of their inventories, for instance, by providing purchase analysis to help in the planning of expenses. The records provided also help ensure detailed tracking for audit purposes.

The main hub to Visa eMarketplace is the Visa purchasing card, which is meant for low-value, high-volume purchase of non-personal goods and services.

Mr Sachin Khandelwal, head of cards product group, ICICI Bank said, “Corporates and government departments can use Visa eMarketplace to make purchases online from their suppliers and use ICICI Bank purchase card to make payment.”

Visa eMarketplace is an eProcurement service which does not require participating organizations to invest in hardware, software or continuous upgrades. Visa eMarketplace is a secure system. It uses secure sockets layer (SSL) data encryption to help ensure that information exchanged within Visa eMarketplace is encrypted to prevent unauthorized disclosure.

ICICI Bank to sell mortgage loan products through MBRD in Russia

The Moscow Bank for Reconstruction and Development is a medium-sized bank in Russia having 166 branches in 34 regions in Russia. India’s largest private sector bank, ICICI Bank, is in talks with the bank, an arm of Sistema, for selling its mortgage loan products in Russia.

Giving comments regarding talks with ICICI bank Sergey Ya Zaytsev, chairman of the executive board, Moscow Bank for Reconstruction and Development (MBRD) said, “We have held discussions with ICICI Bank for possible cooperation in mortgage lending and trade finance. ICICI Bank may design the mortgage products and we will sell them in the Russian market through our banking network”.

MBRD has a retail loan portfolio of $800 million, as on January 1, 2008, and total assets of $3 billion.

In Russia ICICI Bank is having a subsidiary, ICICI Bank Eurasia LLC, but it has a very small branch network. ICICI bank is very positive about the tie-up with MBRD as it will enable the Bank to enter many Russian regions which will offer good opportunity to lenders in mortgage financing. In Russia at present, mortgage financing is less than 3 per cent of Russia’s GDP, while it is more than 100 per cent in western countries.

The tie-up with ICICI Bank will be clearly on revenue-sharing basis. The mortgage products will be designed by ICICI, and will be sold by MBRD. ICICI bank will buy the mortgage portfolio for a fee from MBRD.

Furthermore MBRD following the footsteps of its parent Sistema has plans to open its representative office or branch office in India.

ICICI Bank launched SME Knowledge handbook for entrepreneurs

With the change in time one has to update its skills and knowledge to survive and to increase the output.

ICICI Bank in an attempt to help CEOs of small and medium enterprises sharpen their skills and knowledge, and enhance the productivity, on Tuesday in collaboration with Cyber Media, Bank launched a program SME CEO Knowledge Series.

The program has been conceived for providing a platform to the CEOs of various SMEs for interacting with experts of various fields including human resources, finance and entrepreneurship.

For this purpose it has identified groups in 26 cities across the country.

As a pilot program the bank has already conducted the program at a leather cluster in Agra, ICICI Senior General Manager and Global head SME Vijay Chandok told reporters here.

"The SME CEO Knowledge series will enable us to cater to the entrepreneurs at the root level," he said.

Former President APJ Abdul Kalam unveiled the SME Knowledge handbook for entrepreneurs. On the occasion APJ Abdul Kalam said: “The information ... Will be handy in creation of new enterprises, enhancing the productivity of present SMEs, reducing the sickness among SMEs and above all, increasing the throughput of the SMEs significantly."

Senior faculty from IIM-C and bankers along with other experts have been lined in for giving advise to the entrepreneurs on how to raise capital for each stage of business, information about M&A, forex advice etc.

Approximately there are about 13 million SMEs in the country which employ about 31 million people.

ICICI Bank to enhance wealth management and mobile banking

ICICI Bank country’s second largest lender this year will be mainly focusing more on enhancing its wealth management business and value-added services such as mobile and internet banking.

ICICI Bank Executive Director V Vaidyanathan in a press meet told "We would focus more on areas like product distribution, wealth management and mobile banking in the period ahead”.


He said the bank this year there has been a 50 per cent growth in the share of revenues contributed from the distribution of products as against a credit growth of 20 per cent.

"If you look at profits of any bank, the contribution from liability and distribution sides are more than credit, so equation is shifting to the non-credit side."

The home loan portfolio is expected to maintain its growth in the months ahead, "as it (housing) is a basic need of the people," he said.

"Mortgage will continue to be an important part of Indian banking system," he said, adding that "good underwritten practices will help the country even in turbulent times,"

Businessman duped ICICI bank of Rs 2.2. crore

Last year Mumbai police had arrested a business who was one of Haseena Parker’s associates has been arrested again by EOW on Tuesday on the new complaint lodged by ICICI bank on the charges of doing fraud of Rs 2.2.crore.

ICICI bank officials lodged a complaint on October 11, 2006 against the businessman, Krishnamilan alias Baba Shukla. The EOW is searching for two of Shukla's associates, builder Arshad Shaikh and Sameer.

The police said in the EOW case a first round of inquiry has been done before registering an FIR. "Shukla had floated a company called Biltech Engineering in Vashi.

Arshad Shaikh would persuade several people to submit their documents to procure loans from banks and promised them to pay around Rs 50,000 each. On receiving the documents, Shaikh, with the help of Sameer, prepared some more fake documents and took housing loan of Rs 2.2 crore from the ICICI bank," said a police officer.

The money was purportedly deposited in Shaikh's account as he had posed as a developer for the project. "Shukla had withdrawn money from Shaikh's account. On going through the documents, bank officials realized documents were fake and lodged a complaint," said the officer.

Earlier also Shukla (41) was arrested in connection with extortion and cheating case involving Dawood Ibrahim's younger sister Haseena Parkar and six others. The case was about the development of an SRA plot near Wadala, for which real estate broker Vinod Avlani paid Shukla and his associates Rs 1 crore.

When Shukla and the others did not hand over the project or return the money, Avlani lodged a complaint. Later, Shukla also filed a complaint to the ACB that two crime branch officers asked him for money in return for not pursuing the case.

Consumer Forum directs ICICI Bank to return re-possessed card and pay fine

The West Delhi District Consumer Forum passed the orders to the ICICI bank to pay Rs 50,000 compensation to a customer and return his Indica car forcibly repossessed by its employees in violation of Supreme Court's guidelines.

While giving the decision on the petition filed by Ajmer Singh, the West Delhi District Consumer Forum president J P Sharma said "The conduct of the Bank in taking forcible possession of car without intervention of the civil court was illegal in view of what has been observed by the Supreme Court and the National Consumer Commission"

The Forum held the Bank guilty of deficiency in service for illegal taking away his car while it was parked outside his residence on July 29 2006, awarded a compensation of Rs 50,000 to be given to Ajmer Singh, a resident of Tilak Nagar.

"We direct the Bank to return Singh's car on payment of EMIs due till date," he said.

"The Bank shall have to pay a compensation of Rs 50,000, including cost, to the complainant for the harassment caused to him," the Forum, also comprising S M Mazumdar and Krishna Gupta, said.

Singh had taken a loan of Rs 1.50 lakh from ICICI Bank to buy a car and deposited post-dated cheques for its repayment, had filed a petition against the Bank to the Forum seeking compensation over for the illegal repossession of his vehicle.

He blamed the Bank for violating the Supreme Court's guidelines by repossessing his financed vehicle, without giving him a notice.

Singh further alleged that the Bank refused to release his Indica car even on the payment of the due amount.

The Bank opposing Singh's contention, referred to the terms and conditions of the loan agreement which empowered it to repossess of the car, after due notice, on default.

ICICI Bank credit card insurance issue come under scanner of MRTPC

ICICI Bank, the country’s largest private sector lender, and its insurance arm ICICI Lombard, had unveiled an offer to provide insurance cover to its credit card customers and compensation in case of any mishap. Following on the compliant by the a customer about being denied insurance claims the bank has come under the scanner of fair trade practices body MRTPC for imposing “unfair and unjust” conditions on the insurance cover provided to the credit card customers. The Monopolies and Restrictive Trade Practices Commission directed the DGIR to probe into the matter.

In its investigation report Director General of Investigations and Registration (DGIR), have found that certain terms and conditions concerning the insurance cover on credit cards were not conveyed to the customers at the time of issue, but only mentioned in the welcome kit booklet.

While taking note of some conditions being “unfair and unjust to the consumers”, DGIR said that customers are being denied insurance claims on the ground that cards were not used two times within 90 days from the accident day.

The report said, “ICICI Bank did not inform the customer about this pre-condition while issuing the credit card. The subscriber came to know of the same only when the card was delivered along with the welcome kit”. “This shows the bank’s casual approach,” said DGIR in its report, while recommending suitable action against the ‘unfair and unjust’ terms.

“ICICI Bank and ICICI Lombard would have misled many more people while selling the credit card and making tall claims regarding benefits, without revealing the terms and conditions regarding usage”.

Admitting a report of its investigative unit DGIR, the Monopolies and Restrictive Trade Practices Commission issued ‘notice of enquiry’ against the two companies.

The notice was issued on March 11 and both the companies have been asked to file their replies within four weeks. When ICICI Bank, was contacted in this regard, the bank denied receiving any such notice.

“ICICI Bank is yet to receive any notice and would reply appropriately when we get it,” said an ICICI spokesperson.

Development Credit Bank tie up with ICICI Bank enters credit card business

Private-sector lender Development Credit Bank tied up with ICICI Bank to get into credit card business. The ICICI Bank will be handling its credit card venture.

"The credit card market in India is currently under-penetrated and growth in this segment is expected to be high," DCB Managing Director and CEO Gautam Vir said.

He said currently bank is having 4.5 lakh customers and about 50,000 customers are expected to take the card which will be called "DCB Advantage Credit Card".

Meanwhile, Sachin Khandelwal, head, cards product group of ICICI Bank said previously credit card holders preferred revolving credit. But revolving credit attracts higher interest rate. He further added that now many of the card holders have started resorting to convert their dues into equated monthly installments which attract interest rate of only 20 per cent.

ICICI Bank starts operations in US

ICICI Bank, India's largest private sector bank, has started its operations in the United States at posh midtown New York. It is the banks first branch in US.

Under the license granted by regulators here, initially the bank will be providing services to corporate customers, but it aims is to go into general retail banking also.

Talking to PTI, Executive Director Sonjoy Chatterjee said that at present the bank has been authorized to do retail business for Indians who come to the United States on work H1B visa.

He said the bank, will be offering package facilities to them. For example, they could be given credit card and cheque book before they leave for the US to enable them to do business from the day of their arrival.

On being asked whether Indians on other visas will be able to avail of the facility, Chatterjee said only and specifically H1B visa is mentioned in the license.

The bank will be offering a suite of banking services including working capital, acquisition finance, trade services and treasury solution to corporates and savings products to qualified individuals.

ICICI Bank opened branch office in Frankfurt

ICICI Bank branch has been opened in Frankfurt by the ICICI Bank UK, a wholly owned subsidiary of ICICI Bank.

The branch is a member of the Association of German Banks. The branch will mainly focus on serving corporate businesses with significant Germany-India linkages.

ICICI Bank UK also launched a call money account product, HiZins, with an interest rate of 4.75 per cent.

A call money account will be a no-frills savings account with a facility of withdrawals on a daily basis and no restrictions on the amount that can be deposited. The customers will be provided services through a call centre that will be located in Germany.

On February 29 the bank will also be opening its New York Branch at the New York Stock Exchange. G V S Ramesh has been appointed the chief representative of the New York office.

K V Kamath, managing director and CEO, ICICI Bank, said, “Germany is the biggest economy in Europe and marks a critical step in ICICI Bank’s international expansion strategy. We are naturally positioned to service the trade and business needs of companies with linkages between Germany and India.”

Currently ICICI Bank’s presence extends across 19 countries, including Germany.

Sonjoy Chatterjee, ICICI Bank executive director corporate and international banking, said, “After the success of our consumer business in the UK, we are entering the German market with what we believe is a compelling customer savings product.

“We will leverage our corporate advisory and financing capabilities to facilitate Indian investment into Germany and vice versa.”

ICICI Bank to open its first branch in New York

ICICI Bank, India’s largest private sector bank, will be opening its first branch in the US, in New York, on Friday.

K.V. Kamath, managing director and chief executive officer, and Sonjoy Chatterjee, executive director of the bank, will be present at the opening ceremony of the branch.

The bank is listed at the New York Stock Exchange on the occasion, Kamath will be ringing the closing bell at the New York Stock Exchange.

Previously ICICI Bank had opened its representative office in New York. Last year in October the bank got approval from the US Federal Reserve to convert its representative office in New York to a full-fledged branch. The branch will be offering services in wholesale banking business, including trade financing and factoring services to US-based subsidiaries of Indian firms.

Mumbai-based ICICI Bank has consolidated total assets of about $115 billion (Rs.4,589.5 billion) as of Dec 31, 2007, and a market capitalization of over $30 billion.

The bank’s international presence currently extends to 19 countries and includes three wholly owned subsidiaries in Britain, Russia and Canada, offshore banking unit in Singapore, an advisory branch in Dubai International Finance Centre, branches in Bahrain, Sri Lanka, Hong Kong, Belgium, Qatar, Germany and representative offices in China, UAE, Bangladesh, South Africa, Indonesia, Thailand and Malaysia.

ICICI cough up a portion of their non-performing home loans to Arcil

Few of the leading private sector banks have starting taking steps to shell out a portion of their non-performing home loans to the Asset Reconstruction Company (India) Ltd (Arcil).

Arcil is the country's leading accumulation of distressed industrial assets.

According to industry sources ICICI Bank recently had set the trend by selling a bunch of non-performing home loans to Arcil.

Kotak Mahindra Bank and Standard Chartered are also supposed to have followed ICICI by doing similar deals with Arcil. But this could not be verified by DNA Money.

Rajiv Sabharwal, head of retail assets at ICICI Bank has confirmed that ICICI Bank had recently made a deal with Arcil that involves a sale transaction to see bad home loans to Arcil.

"We did this in the last quarter," Sabharwal said.

According to sources ICICI offloaded receivables worth Rs 1,000 crore, but Sabharwal said the number was around Rs 400 crore in the last quarter.

He added the securitized portfolio includes a mix of home loans and other personal loans,

ICICI Bank is the first one in the industry to deal to bundle bad home loans in Arcil's favor.

It is for the first time Arcil's is entering into retail space.

On April 4, 2007, S Khasnobis, managing director and CEO of Arcil, told DNA Money about its plan to speculate into troubled retail home loans market by buying out securities from banks.

Thus far, the asset reconstruction firm has stuck to troubled assets from the corporate sector.

ICICI a belligerent bank has been a pioneer in securitization of loans. "We do play in this segment. We have been securitising both good and bad assets," Sabharwal said. Arcil plans to create a special purpose vehicle to handle mortgage backed securities.

In his last interview, Khasnobis had said the initial investment would be to 'test the markets.' Arcil will create its own "fair debt collection norm and formalize a list of dos and don'ts." This is mainly because a clear policy on bad home loans has yet to be drafted by the regulators.

Arcil is likely to use the skills from its stock up as an asset reconstruction firm to turn bad assets into good. Its new medium in the distressed home loan market will use "compensation" as a prime motif to recover assets. Arcil can provide "temporary cheaper homes" to the borrowers to deluge over the bad times. It will help in discouraging practices such as putting pressure on borrowers. However, ICICI will still manage the securities such as collecting interest and handing it over to Arcil for a small fee. "At a future date when Arcil is ready, we will handover the management of the bad home loans to it," said Sabharwal.

ICICI Bank to sell its small-ticket personal loans portfolio to foreign banks

ICICI Bank is selling its small-ticket personal loans (STPL) portfolio to the foreign banks. The bank is having discussions with a couple of foreign banks for this. It is has been learnt that ICICI bank as approached foreign banks such as Deutsche Bank, Standard Chartered and Barclays for selling the portfolio. The bank has decided to exit this ‘high-risk’ space a couple of months ago owing to the rising defaults in the segment.

At present, ICICI’s collection agency is looking after the portfolio until it finds a suitable buyer. According to the sources this step taken up by the bank will help in moderating the losses on the portfolio. The bank’s total STPL portfolio size is expected to be around Rs 3,000 crore, of which the bank aims to sell Rs 2,000 crore, sources added.

When the reporter of ET inquired about this from ICICI officials, they declined to comment. However, a senior official in the bank said on condition of secrecy, “The purpose of these loans was not clear and we had to deal with a high default rate. If we get suitable proposals for the portfolio, we will surely consider it.” ICICI Bank is also taking in consideration credit-scoring methods for appraising borrowers at present.

The official said bank is aiming heavily on micro financing where the loans offered are picked up for a clear developmental purpose. By get hold of the portfolio, new entrants in the retail banking space would be able to secure a foothold in the market. Sources added almost 70% customers in the portfolio will be good customers and this will enable the player to sell other products to the same customers.

ICICI Bank got into this segment a couple of years ago offering small-ticket loans of around Rs 10,000-30,000. According to sources rise in number of defaulters have forced the bank to tighten its credit filters. In actual, sources told ET that the loss rate on the STPL portfolio is around 20-25%. Several banks are getting more cautious with lending to low-income earners in urban areas. Industry sources say new entrants in this segment will be keen to pick up the portfolio to gain a foothold in the market.

Interest rates on STPL were as high as 48% which were later brought down due to RBI intervention to 18-25% last year. Banks are now aiming on medium ticket personal loan (MTPL), enhancing the ticket size from a minimum of Rs 10,000-20,000 to a maximum of Rs 5 lakh for salaried individuals. Interest rates on these loans are similar to that of credit cards at 24-30%. Industry sources said the credit worthiness of customers in the MTPL bracket would be more sound as compared to the low-income group strata which records marginal.