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.
Wednesday, March 19, 2008
Wednesday, March 5, 2008
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.
"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.
Sunday, March 2, 2008
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.
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.
Thursday, February 28, 2008
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.”
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.
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.
Wednesday, February 20, 2008
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.
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.
Tuesday, February 12, 2008
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.
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.
Subscribe to:
Posts (Atom)