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Banking Related News/ Awareness : 11APR13

RBI likely to penalize top 3 private banks :

Lapses in adherence to the know-your-customer guidelines and sales staff encouraging customers to
buy gold, mutual fund and insurance products in cash, are believed to be among the findings of an
RBI scrutiny of India’s top three private sector banks. Following its findings, the RBI, at the systemic
level, is likely to tighten Know-Your-Customer guidelines and put in place norms to curb sales-driven
incentives to push third-party products.

Govt. plans on-demand bank accounts for Aadhar-holders :

Banks may soon provide a simple account on-demand to people with Aadhar numbers. Prime
Minister Manmohan Singh is also in favor of Aadhar numbers being available on demand. These
issues were discussed in the meeting of National Committee on Direct Benefit Transfers, chaired by
the Prime Minister, here on Friday. The meeting decided to expand the Direct Benefit Transfer (DBT)
to 78 more districts and to add three schemes in the next phase, starting July 1. With this, over 120
districts or nearly one-fifth of the total population will be under DBT.

12 companies authorized to own, operate White ATMs, says RBI official :

The RBI has given in-principle approval to seven companies to roll out White Label ATMs last month.
While five were given in December last year, taking the total to 12. As soon as they get their act
together, they will be in operation”, said Vijay Chugh, Chief General Manager of RBI. About 1.5 lakh
ATMs can be rolled out in the next three years and two million PoS (Point-of-Sale) terminals in two
years if all the 17 companies start functioning. That is the expectation, he added.

SBI to invoke Vijay Mallya’s guarantee :

Lenders to Kingfisher Airlines have stepped in to invoke the personal guarantee of Vijay Mallya as
well as UB Holdings’ corporate guarantee on borrowings by the grounded airline. SBI, on behalf of the
consortium of lenders, recently sent letters to convey their decision on the invocation on guarantees.
What the banks do next and the legal proceedings that follow could emerge as a benchmark case in
Corporate India. If a guarantor fails to pay up after the invocation and with-in the time given in
successive notices, creditors consider this as an act of insolvency.

Forex reserves drop by $720 m :

The recent RBI data shows that India’s foreign exchange reserves decreased by $720.3 million to
$292.646 billion for the week ending April 5. In the previous reporting week, the reserves rose by
$1.05 billion to $293.37 billion. During this week, foreign currency assets, a major component of forex
reserves, dropped by $689.4 million to $259.725 billion. Gold reserves remained unchanged at
$26.292 billion.

BoB cuts deposit rates by 15-25 bps :

Bank of Baroda, the second largest lender in the country, today reduced the interest rate on fixed
deposits by 15-25 basis points (bps) across various maturities. Its peak deposit rate has fallen to 8.9
percent from 9.15 percent. This rate was offered for deposits of a tenure of 1,111 days.

SBBJ cuts FD rates by up to 1% :

State Bank of Bikaner and Jaipur on Friday slashed interest rates for fixed deposits. For deposits
maturing between 91 days and 179 days, it slashed rates by 0.50 percent to 7.50 percent, while for
deposits between 180 days and less than one year, the rate has been cut to 7.50 percent from 8.50
percent. Deposits of one year and less than 3 years will now attract interest rate at 8.75 percent. For
maturities of three to five years, the new rate will be 8.50 percent. For more than five years and up to
10 years, rate has been cut to 8.50 percent.

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