Thursday, 23 July 2015

Focus is now on personal loan space: Shyam Srinivasan

SME grew 17% y-o-y and we think this growth will continue. Corporate growth has been dented. Retail and agri segments are growing well although gold loan book is flattish. In retail, home loan is doing okay, but we are confidently stepping into the personal loan biz

Federal Bank reported a 36% y-o-y drop in net profit in the first quarter of this fiscal. Shyam Srinivasan, MD & CEO, attributed this fall to provisioning for one large account and treasury losses. The bank, however, expects NPAs to improve going forward and is now concentrating on the personal loan space. 

Excerpts from an interview:
Federal Bank’s PAT fell 36% y-o-y and NPAs also rose. What led to this?
Largely, two things impacted the quarter that went by. One was the impact of one large account worth R134 crore and, added to this, was the impact of treasury. The treasury provisions were about R49 crore whereas credit provision for the one particular account stood at R70-odd crore. A combination of these two increased the overall provisions by almost R120 crore. For the first quarter, the provisions stood at R153 crore against R22 crore in the same quarter last year.

How soon do you think you could recover your loan from this account?
We are certainly looking at recovery. The percentage of recovery and the duration in which we can make it is a challenge because we are not the sole bankers. There are nine banks and the outstanding is quite significant. The market is working on various options, including SDR. It may take some time.

What would be your outlook on NPAs going forward?
If you see our last seven to eight quarters, sequentially, it (the asset quality) has improved every quarter. I expect it to revert to that momentum. It also depends on how the economy shapes up. I would not like to guide a figure, but certainly the improvement will be seen.
How were the NIMs in Q1? What is your guidance for the same?
NIM for Q1 was 3.12%, while for the same quarter last year, it was 3.25%. NIM for Q4FY15 was 3.31%. The fall in NIMs is a function of the impact of reversal of interest on account of slippage. We have had excellent deposit growth, but deployment has been relatively muted. We are looking at an NIM of 3.2-3.22% for the full year.

What was your cost of funds for Q1?
Our blended cost of funds for Q1 came to 7.12% against 7.29% on a sequential basis. The yield on advances has fallen much more.
Any recoveries or upgrades in the first quarter?
Nothing major, apart from the routine ones. There is one account where we had a recovery of R18 crore.

Where is your growth coming from?
SME is doing well. It grew 17% on a year-on-year basis and we think this growth will continue. Corporate growth has been dented. Retail and agri segments are growing well although gold loan book is flattish. In the retail segment, home loan is doing okay, but we are confidently stepping into the personal loan business.
We have also got the approval from all authorities for launching our IFSC branch in the GIFT City. That will be a big one for us prospectively, more in the medium term. In FY17, we should see big benefits accruing from our ability to compete more formidably on the foreign currency business. By end of this quarter or early next quarter, we will be launching it.

What are your fund raising plans for FY16?
Almost none. We are very well capitalised and we don’t see any requirements in the near term.

Monday, 13 July 2015

6 things about CIBIL every young adult should know

Your CIBIL score is a measure of your financial health. A good CIBIL report and CIBIL score of 750 and above can help you get easy access to credit. But did you ever wonder how the CIBIL score is calculated, or what are the factors that may take it downhill? Here are six things that you must know about CIBIL.

How is your CIBIL score calculated?
First, you need to know the components of the CIBIL score and the weightage they carry.
· The pattern you follow in paying off your credit card and loan EMIs has the highest weightage of 35% and thus is the most important factor impacting your CIBIL score.
· Next comes the "credit utilisation" that carries a weightage of 30%. Credit utilisation ratio is arrived at by calculating the balance outstanding on your existing cards as a percentage of the total credit limit on all your cards.
· The third factor carrying a weightage of 15% is the "length of credit" or how long have you been servicing debt.
· The number of "hard inquiries" on your CIBIL report has a 10% weightage on your CIBIL score. Every time you apply for a new loan or a credit card, it gets registered in CIBIL as a hard inquiry and shaves off a few points from your CIBIL score.
· Lastly bearing a 10% weightage on your CIBIL score is the "mix of credit". A healthy mix of secured and unsecured credit, will have a positive bearing on your CIBIL score.

Now that you know what goes into the calculation of your CIBIL score, here a few mistakes you need to avoid to keep your CIBIL score intact.

Making late payments
It doesn't matter how many credit cards you own, but if you develop a habit of not paying the total outstanding amount within the billing cycle, you may be heading towards a disaster. Ensure that you spend judiciously and make all credit card repayments on time. The same holds true for loans, missing even one repayment can bring your CIBIL score down substantially.

Exceeding credit utilisation above 30%
Having a higher limit on your credit card, doesn't mean that you have to use it completely. This ways, you'll be inviting an overwhelming debt trap, as a higher credit utilisation means that more points being knocked off your CIBIL score. Therefore, keep a conscious check to see that your credit utilisation remains under 30% at all times.

Closing old credit cards
Do not commit the mistake of closing a credit card that was given to you by your parents once you are proficient enough to own a bunch of cards yourself. The reason being that if the card carries you name, it means that CIBIL has been recording your repayment history (assuming that your Mom or Dad have been footing the bill for the same). You simply need to ensure that you have cleared the balances as this will help you gain brownie points for maintaining good credit history.

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Appearing credit hungry
We are often credit card issuers and money lender to avail easy credit, but one should try to escape as much as possible unless you are in dire need of it. Applying for too many credit cards or loans will make you appear credit hungry and a considerable number of enquiries on your CIBIL report will bring your CIBIL score down.

Not having the right credit mix
If you are thinking that you are better off not availing credit at all, you are wrong. In fact, it makes a lender wary because he can't access your credit history to asses you. On the other hand, what adds on to your CIBIL score is having a good mix of credit such as a home loan, car loan, a personal loan, etc. along with a maximum of two or three credit cards. Remember, the crux of maintaining a good CIBIL score is to use credit responsibly. If you are aware of your spending habits and are making timely repayments, you have little to worry about! - Leading Financial Services Provider for Personal Loans, Home Loans, Business Loans etc., 

Monday, 6 July 2015

Now get a home loan from State Bank of India in just 10 days!

"It will bring down the average time taken for delivery of home loan to within 10 days from the date of receipt of completed home loan application form and relevant supporting documents from the customer," the release said.

Country's largest lender State Bank of India has launched an initiative to provide doorstep services and expedite home loans application process.

The initiative known as 'Project Tatkal' will help get the loan within 10 days after receipt of application form and relevant supporting documents, the bank said in a release.

"It will bring down the average time taken for delivery of home loan to within 10 days from the date of receipt of completed home loan application form and relevant supporting documents from the customer," the release said.

The implementation will be done at large centres with sizable home loan business.

The bank has also recently introduced an online customer acquisition solution (OCAS) for instant e-approval of home loan applications.

The bank has over three million home loan customers with a portfolio of over Rs 16,60,000 crore.

Thursday, 2 July 2015

HDFC Bank launches 10-second personal loan disbursement

     HDFC Bank will now disburse personal loans to its customers in just 10 seconds. With this product, existing customers will have a pre-approved loan amount available to them 24x7. "The entire process to avail of the loan is completely paperless, and users can simply log into their bank account via net-banking or mobile banking and avail of this loan at a click," HDFC Bank said.

The bank claimed that it is the first institution in the retail lending space to completely automate the entire process of loan approval and disbursement. "The 10-second loan is completely hassle-free and transparent and users will no longer have to wait for disbursement of funds, particularly in medical or other types of emergencies where there is an urgent need for cash," it said.

For  Personal Loan in Chennai , Call 91-9710283311

"It is like having a real cheque in one's virtual wallet and is part of our mission of enabling customer delight by creating simple and speedy banking solutions that are available at a click," said Arvind Kapil, business head - unsecured loans, home & mortgage loans, HDFC Bank.

"Customer convenience lies at the heart of our digital initiatives and we have noticed growing demand from digitally-savvy customers to avoid paper-work and to accelerate processes," he said. "Most customers expect banks to connect the dots between online and offline options to deliver convenient, consistent service," he stated.

The 10-second loan is the latest initiative in HDFC Bank's digital banking offering christened 'GoDigital'. This campaign began in Varanasi last year with the launch of its 'Bank Aap Ki Muththi Mein' offering, which literally converts the mobile phone into a bank branch. Since then the bank has launched a host of digital initiatives.

"The move is part of our transformation into a digital bank which inlays digital solutions all through its value chain," Kapil said. "This means building significant efficiencies in the back-end and streamlining of processes that are central to delivering an enriched customer experience at the front-end," he said. At the end of 2014-15, 63% of all transactions at HDFC Bank were conducted through digital channels.