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.
Friday, June 20, 2008
Tuesday, June 17, 2008
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as members, has also directed the bank to credit a sum of Rs 5,204 in Sinha's account, noting that the amount was withdrawn without any authorization from him.
Sinha, also have a salary account with ICICI Bank, he further stated that the company had withdrawn Rs 5,204 from his account without any notice, causing him "great mental and physical harassment."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policy following a telephonic request from Sinha and denied any deficiency in service, maintained that the money was withdrawn in accordance with the terms.
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.
Monday, June 16, 2008
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.
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.
Tuesday, June 10, 2008
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.
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.
Tuesday, June 3, 2008
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.
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.
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