ING Vysya Bank staff concerned over merger with Kotak

http://timesofindia.indiatimes.com/business/india-business/ING-Vysya-Bank-staff-concerned-over-merger-with-Kotak/articleshow/45743158.cms

KOLKATA: Employees and officers of ING Vysya Bank on Saturday expressed concerns over their future post the merger with Kotak Mahindra Bank which will come into effect from April 1, 2015.

The management of ING Vysya Bank used to honour the bi-partite negotiations which it had entered with the unions regarding service conditions but Kotak Mahindra Bank management did not make any commitment on the continuation of existing service conditions on absorption into the new merged entity, the spokesman for officers and employees of ING Vysya Bank said here on Saturday.

Kotak Mahindra Bank management has also said that ING Vysya employees would get pension but it would not be linked to dearness allowance, the spokesman added.

More than 4,000 employees and officers of ING Vysya Bank would be absorbed into the rolls of the merged entity.

The deal will make Kotak the fourth-largest private bank in the country in terms of total business. The biggest three are ICICI Bank, HDFC Bank and Axis Bank, in that order.

The combined banking entity will have a widespread network of 1,214 branches across the country.

Daily GK Update - 3rd January 2015

1. ICICI Launches Digital Village Project in Gujarat

i. Joining Digital India programme, top lender ICICI Bank has launched its own 'digital village' project while adopting an entire village in Gujarat to provide services ranging from cashless banking to digitised school teaching.

ii. Digital village has three themes -- cashless, comprehensive and connected. 

iii. Village, named Akodara, in Sabarkantha district of Gujarat incidentally happens to be the same place where Modi started Gujarat's first animal hostel in 2011 when he was the Chief Minister of the state.

iv. One of the key points is providing cashless banking services to every villager. 

v. The villagers are getting SMSs in Gujarati for their transactions and other digital services.

vi. the bank has set up e-health, e-milk producer group, Wi-Fi connectivity and schools with digital black boards in the village, along with a host of other digital facilities.

2. Gyan Sangam: Government on its way to overhaul public sector banks

i.  Government has embarked on a mission to overhaul public sector banks, beginning with a twoday, high-profile retreat in Pune.

ii. The main objective is to search for "out-of-the-box" ideas to reorient them to support the country's bid to move back to a high-growth trajectory. 

iii. the government wants to draw up an urgent reform road map that could include the revamp of priority sector lending, consolidation and effective use of technology for lending besides greater financial inclusion. 

iv. The event is being held at the National Institute of Bank Management on the outskirts of Pune.

3. Bengal Global Business Summit

i. Projecting itself as an ideal investment destination, the Government of West Bengal is organising Bengal Global Business Summit — Bengal Leads.

ii. The State is seeking investment in sectors such as urban infrastructure and housing, IT software and hardware, food processing, horticulture and floriculture, MSME and textiles.

iii.Other Sectors such as health care, education and skills development, manufacturing, energy and infrastructure, hospitality and tourism and business of entertainment and financial services are given the nod of the state as special sectors to look for. 

4. Kumar Sangakkara fastest to 12,000 runs in Tests

i. Kumar Sangakkara, the Sri Lankan Wicket Keeper batsman became the fastest player to reach 12,000 Test runs.

ii. Sangakkara had entered the game needing five runs to become the fifth man to surpass 12,000 test runs.

iii. Sangakkara has accumulated his runs in 224 innings, compared to India's Sachin Tendulkar and Australia's Ricky Ponting, who both needed 247 innings to surpass the mark.

5. Intel invests $24.8 million to speed up launch of Google Glass rival
i. Vuzix Corporation said that Intel Corp invested $24.8 million in the company to speed up the launch of internet-connected eyewear.
ii. Rochester, New York-based Vuzix develops computerized, internet-connected glasses and other video eyewear aimed at consumers, businesses and entertainment.
iii. Intel, which was slow to launch chips for smartphones and tablets, is striving to be at the forefront of future trends in mobile computing and expand into new markets.

 6. RBI relaxed KYC rules for Non-Banking Financial Companies
i. Know-Your-Customers (KYC) rules for Non-Banking Financial Companies (NBFCs) were relaxed by the Reserve Bank of India (RBI).
ii. The KYC rules were amended for NBFC’s due to practical difficulties and constraints being faced by them in getting KYC documents at frequent intervals.
iii. As per RBI notification, the KYC exercise will be required to be done in three ways and they are

• For high-risk individuals and entities – in at least every 2 years
• For medium risk individuals and entities - in at least every 8 years
• For low risk individuals and entities – in at least every 10 years

7. India lost 66 wild tigers in 2014

i. Sixty-six wild tiger deaths were reported in the country in 2014.Two tiger deaths occurred on the last day of the year. 

ii.  It was the only day in 2014 when two wild tiger deaths were reported. One was at Bandipur in Karnataka and the other at Tadoba Andhari in Maharashtra.

iii. As per statistics provided by Tigernet, the official database of the National Tiger Conservation Authority, the highest number of wild tiger deaths was reported from the forests of Tamil Nadu —15, followed by Madhya Pradesh —14. Six of the deaths in Tamil Nadu were from the Mudumalai Tiger Reserve.

iv. The majority of wild tiger deaths was caused by poaching, It is estimated that about 50 tigers could have been killed in this manner.

Read more: http://www.bankersadda.com/2015/01/daily-gk-update-3rd-january-2015.html#ixzz3Nr0JSd5F

Mortgage Credit Certificate

http://en.wikipedia.org/wiki/Mortgage_Credit_Certificate

In the United States, a Mortgage Credit Certificate (more commonly referred to as MCC) is a certificate issued by certain state or local governments that allows a taxpayer to claim a tax credit for some portion of the mortgage interest paid during a given tax year.

Contents

  [hide] 

• 1 Uses
• 2 Qualifications & Example
• 3 External links
• 4 References

Uses[edit]

The MCC program is designed to help first-time homebuyers offset a portion of their mortgage interest on a new mortgage as a way to help homebuyers qualify for a loan. Because it is a tax credit and not a tax deduction, mortgage lenders will often use the estimated amount of the credit on a monthly basis as additional income to help the potential borrower qualify for the loan.

Qualifications & Example[edit]

Generally speaking, homebuyers who wish to obtain an MCC must meet certain minimum guidelines:

1. Buyers must not have owned a home in the previous three years.
2. Buyers must meet income and purchase price restrictions.
3. Buyers must intend to use the new home as a primary residence.

Some of these restrictions may be waived for certain circumstances. For example, following a natural disaster, state or local governments may raise or remove the income limits for affected municipalities temporarily to help spur redevelopment.

The MCC Credit can be used with Conventional/Conforming, FHA, USDA and VA home loans. These credits can help a homebuyer qualify for a little "bigger" (more expensive)home. While all homeowners can claim an itemized tax deduction for mortgage interest, you can go a step further with an MCC. An MCC reduces your tax liability, dollar-for-dollar, by a percentage of the mortgage interest you pay.

The amount of mortgage credit allowed varies depending on the state or local government that issues the certificates, but is capped at a maximum of $2000 per year if your State's rate is over 20%,by the IRS. As an example, if a homebuyer were to receive an MCC that offers a 30% credit on a $200,000 loan for 30 years with a rate of 6%, the allowable tax credit would be figured as follows (all numbers rounded):

• Mortgage Interest Paid (1st Year): $11,933
• x MCC Credit: 30%
• = Total Credit: $3579

Because the total credit in this example exceeds the IRS limit of $2000, the homebuyer would report a $2000 credit on their tax return. The buyer may continue to receive a tax credit for as long as they live in the home and retain the mortgage.

Links for five videos on bank interview posted by me -- 1 to 5

links for five videos on interview posted by me

https://www.youtube.com/watch?v=RI-tZ2XUm5Q&list=UUwja18MD_pCwb6cagdxo-kQ

https://www.youtube.com/watch?v=yU_KzQgDyG8&list=UUwja18MD_pCwb6cagdxo-kQ

https://www.youtube.com/watch?v=9Ui-aVwheww&list=UUwja18MD_pCwb6cagdxo-kQ

https://www.youtube.com/watch?v=4cWtqDxSpfE&list=UUwja18MD_pCwb6cagdxo-kQ

https://www.youtube.com/watch?v=g0vUK6CR6AM&list=UUwja18MD_pCwb6cagdxo-kQ

S. SAMBASIVAN

CHENNAI

9003037557/9094155869

Daily GK Update - 2nd January 2015

Daily GK Update - 2nd January 2015

1. K.K. Paul to be Uttarakhand Governor

i. Krishan Kant Paul will be sworn in as the sixth Governor of Uttarakhand on January 8.

ii. A presidential communiqué said Mr. Paul, Meghalaya Governor, would continue to hold the office of the Governor of Manipur.

iii. The current Uttarakhand Governor, Aziz Qureshi, would be transferred to Mizoram.

iv. Challenging the move of the Narendra Modi government to seek resignations of Governors appointed during the UPA regime.

2. Uttarakhand governor Aziz Qureshi transferred to Mizoram

i. Dr Aziz Qureshi was shunted out and appointed Mizoram governor. 

ii. A statement issued by the President's office said that Qureshi had been given charge of Mizoram for the remainder of his term. He has almost three years of tenure left. 

iii. West Bengal governor K N Tripathi meanwhile has been asked to take additional charge of Meghalaya. 

3. Pakistani fishing boat carrying explosives sets itself on fire after being chased by Indian Coast Guard

i. A suspicious fishing boat carrying explosives from Pakistan was intercepted by Indian Coast Guard in Arabian Sea near Indo-Pak maritime boundary but it sank after the crew on board set it on fire. The incident came a month after sixth anniversary of the Mumbai terror attack.

ii. The boat carrying some four people blew up some 365 kms off Porbander coast after a hot chase.

iii. As per the intelligence inputs received on 31st December, a fishing boat from Keti Bunder near Karachi was planning some illicit transaction in Arabian Sea.

iv. Coast Guard Dornier aircraft undertook sea – air coordinated search and located the suspect fishing boat.

4. BHEL bags first key power project in Telangana

i. BHEL will set up first Supercritical Thermal Power Plant in newly formed state of Telangana. The company has bagged contract worth Rs. 3,810 crore.

ii. The order is for setting up the 1x800 MW Supercritical Thermal Power Plant on EPC (Engineering, Procurement & Construction) basis at Kothagudem in Khammam District of Telangana. 

iii. To this effect, an advance cheque of Rs. 350 crore was handed over by the Chief Minister of Telangana, K. Chandrasekhar Rao to Chairman & Managing Director.

iv. The project is targeted to be commissioned in 36 months on fast track basis with both BHEL and TSGENCO setting up teams to expedite clearances and execution of the project.

5. LIC International launches co-branded credit card with UAE's First Gulf Bank
i. India's LIC International and Abu Dhabi -based First Gulf Bank are planning to introduce a unique co-branded credit card in the United Arab Emirates to address concerns of insurance policy holders.
ii. It is first of its kind payment solution. This is the first time that an insurance firm has entered into a strategic alliance with a bank in the gulf country.
iii. LIC International, established in Bahrain in 1989 by LIC of India to facilitate residents in the gulf region, has over 350 million policyholders worldwide.

6. Government to prioritise drugs, states to revive Jan Aushadhi Pharmacies 
i. To infuse a fresh lease of life into the struggling Jan Aushadhi chain of pharmacy outlets, set up to make affordable generic drugs available to people.
ii. The government plans to focus on select drugs and states, spruce up supply chain and encourage doctors to use generic names of drugs.
iii. Government is considering a proposal to trim the list of drugs being distributed through Jan Aushadhi outlets to 40-50 mass consumption ones from the 320 medicines enlisted to be part of stock at present.

7. R Koteeswaran takes over as new Indian Overseas Bank CMD 
i. R Koteeswaran has taken over as the Chairman and Managing Director of public sector Indian Overseas Bank.
ii. Prior to this, Koteeswaran was serving Bank of India as its Executive Director
Koteeswaran began his career in 1976 in Bank of Baroda and later joined Bank of India as its Executive Director.
iii. He replaces M Narendra who has superannuated

Read more: http://www.bankersadda.com/2015/01/daily-gk-update-2nd-january-2014.html#ixzz3NlyvEqVd

SARFAESI Act 2002

http://www.gktoday.in/sarfaesi-act-2002/

The full form of SARFAESI Act as we know is Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Banks utilize this act as an effective tool for bad loans (NPA) recovery. It is possible where non-performing assets are backed by securities charged to the Bank by way of hypothecation or mortgage or assignment.

• Upon loan default, banks can seize the securities (except agricultural land) without intervention of the court.
• SARFAESI is effective only for secured loans where bank can enforce the underlyingsecurity eg hypothecation, pledge and mortgages. In such cases, court intervention is not necessary, unless the security is invalid or fraudulent. However, if the asset in question is an unsecured asset, the bank would have to move the court to file civil case against the defaulters.

Contents [hide]

• How it works?
• Background of the act
• Rights of Borrowers
• Pre-conditions
• Methods of Recovery
• Powers of Debt Recovery Tribunal
• Role of Chief Metropolitan Magistrate or District Magistrate
• Role of High Court:
• Proposed amendments to the Act

How it works?

The SARFAESI Act, 2002 gives powers of "seize and desist" to banks. Banks can give a notice in writing to the defaulting borrower requiring it to discharge its liabilities within 60 days. If the borrower fails to comply with the notice, the Bank may take recourse to one or more of the following measures:

• Take possession of the security for the loan
• Sale or lease or assign the right over the security
• Manage the same or appoint any person to manage the same

The SARFAESI Act also provides for the establishment of Asset Reconstruction Companies (ARCs) regulated by RBI to acquire assets from banks and financial institutions. The Act provides for sale of financial assets by banks and financial institutions to asset reconstruction companies (ARCs). RBI has issued guidelines to banks on the process to be followed for sales of financial assets to ARCs.

Background of the act

The previous legislation enacted for recovery of the default loans was Recovery of Debts due to Banks and Financial institutions Act ,1993. This act was passed after the recommendations of the Narsimham Committee - I were submitted to the government. This act had created the forums such as Debt Recovery Tribunals and Debt Recovery Appellate Tribunals for expeditious adjudication of disputes with regard to ever increasing non-recovered dues. However, there were several loopholes in the act and these loopholes were mis-used by the borrowers as well as the lawyers. This led to the government introspect the act and this another committee under Mr. Andhyarujina was appointed to examine banking sector reforms and consideration to changes in the legal system .

• This committee recommended to enact a new legislation for the establishment of securitisation and reconstruction companies and to empower the banks and financial institutions to take possession of the Non performing assets.

Thus, via the Sarfaesi act, for the first time, the secured creditors were empowered to recover their dues without the intervention of the court.

• However, as soon as the act was passed, its implementation was challenged in the court and this delayed its coming into force for 2 years. In the Mardia Chemicals v. Union of India, the Supreme Court upheld the validity of the SARFAESI act was upheld.

Rights of Borrowers

The above observations make it clear that the SAFAESI act was able to provide the effective measures to the secured creditors to recover their long standing dues from the Non performing assets, yet the rights of the borrowers could not be ignored, and have been duly incorporated in the law.

• The borrowers can at any time before the sale is concluded, remit the dues and avoid loosing the security.
• In case any unhealthy/illegal act is done by the Authorised Officer, he will be liable for penal consequences.
• The borrowers will be entitled to get compensation for such acts.
• For redressing the grievances, the borrowers can approach firstly the DRT and thereafter the DRAT in appeal. The limitation period is 45 days and 30 days respectively

Pre-conditions

The Act stipulates four conditions for enforcing the rights by a creditor.

• The debt is secured
• The debt has been classified as an NPA by the banks
• The outstanding dues are one lakh and above and more than 20% of the principal loan amount and interest there on.
• The security to be enforced is not an Agricultural land.

Methods of Recovery

According to this act, the registration and regulation of securitization companies or reconstruction companies is done by RBI. These companies are authorized to raise funds by issuing security receipts to qualified institutional buyers (QIBs), empowering banks and Fls to take possession of securities given for financial assistance and sell or lease the same to take over management in the event of default.

This act makes provisions for two main methods of recovery of the NPAs as follows:

• Securitisation: Securitisation is the process of issuing marketable securities backed by a pool of existing assets such as auto or home loans. After an asset is converted into a marketable security, it is sold. A securitization company or reconstruction company may raise funds from only the QIB (Qualified Institutional Buyers) by forming schemes for acquiring financial assets.
• Asset Reconstruction: Enacting SARFAESI Act has given birth to the Asset Reconstruction Companies in India. It can be done by either proper management of the business of the borrower, or by taking over it or by selling a part or whole of the business or by rescheduling of payment of debts payable by the borrower enforcement of security interest in accordance with the provisions of this Act.

Further, the act provides Exemption from the registration of security receipt. This means that when the securitization company or reconstruction company issues receipts, the holder of the receipts is entitled to undivided interests in the financial assets and there is not need of registration unless and otherwise it is compulsory under the Registration Act 1908.

However, the registration of the security receipt is required in the following cases:

• There is a transfer of receipt
• The security receipt is creating, declaring, assigning, limiting, extinguishing any right title or interest in a immovable property.

Is Mortgaged House exempted? 
The Sarfaesi act covers any asset, movable or immovable, given as security whether by way of mortgage, hypothecation or creation of a security interest. There are some exceptions in the act such as personal belongings. However, only that property given as security can be proceeded under the provisions of SARFAESI Act. If the property of the borrower is his own mortgaged residential house, it is also NOT exempted from the Sarfaesi act.

Powers of Debt Recovery Tribunal

The debt Recovery Tribunals have been empowered to entertain appeals against the misuse of powers given to banks. Any person aggrieved, by any order made by the Debts Recovery Tribunal may go to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

Role of Chief Metropolitan Magistrate or District Magistrate

The Chief Metropolitan Magistrate or District Magistrate has been mandated to assist secured creditor in taking possession of secured asset. These officers will make sure that once the creditor has given him in writing that all other formalities of the act have been done, the CMM or DM will take possession of such asset and documents relating thereto; and forward such assets and documents to the secured creditor. Now, here, you have to note that such an act of the CMM or DM can not be called in question in any court or before any authority.

Role of High Court:

The act allows taking the matter to high courts only in some matters related to the implementation of the act in Jammu & Kashmir. However, High Courts have been entertaining writ petitions under article 226 (Power to issue writs) of the constitution of India.

Proposed amendments to the Act

The government had approved bill to amend the act. The Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011, amends two Acts — Sarfaesi Act 2002, and Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (DRT Act). Via these amendments:

• Banks and asset reconstruction companies (ARCs) will be allowed to convert any part of the debt of the defaulting company into equity. Such a conversion would imply that lenders or ARCs would tend to become an equity holder rather than being a creditor of the company.
• The amendments also allows banks to bid for any immovable property they have put out for auction themselves, if they do not receive any bids during the auction. In such a scenario, banks will be able to adjust the debt with the amount paid for this property. This enables the bank to secure the asset in part fulfillment of the defaulted loan.
• Banks can then sell this property to a new bidder at a later date to clear off the debt completely.

However lenders will be able to carry this property on their books only for seven years, as per the Banking Regulation Act, 1949.

Explanation of break-even point:

http://www.accountingformanagement.org/break-even-point-analysis/

Explanation of break-even point:

The point at which total of fixed and variable costs of a business becomes equal to its total revenue is known as break-even point (BEP). At this point, a business neither earns any profit nor suffers any loss. Break-even point is therefore also known  as no-profit, no-loss point or zero profit point. Calculation of break-even point is important for every business because it tells business owners and managers how much sales are needed to cover all fixed as well as variable expenses of the business or the sales volume after which the business will start generating profit. The computation of sales volume required to break-even is known as break-even analysis. The concept explained above can also be presented as follows:

After reading this article you will be able to compute the break-even point of a single product company using two popular methods – equation method and contribution margin method. First we shall compute break-even point using these two methods and then present the information graphically (preparation of break-even chart).

Computation of break-even point:

(1). Use of equation method:

The application of equation method facilitates the computation of break-even point both in units and in dollars. As we have already described that the sales are equal to total variable and fixed expenses at break-even point, the equation can therefore be written as follows:

Sp × Q = Ve × Q + Fe

Or

SpQ = VeQ + Fe

Where;

Sp = Sales price per unit.

Q = Number (quantity) of units to be manufactured and sold during the period.

Ve = Variable expenses to manufacture and sell a single unit of product.

Fe = Total fixed expenses for the period.

Notice that the left hand side of the equation represents the total sales in dollars and the right hand side of the equation represents the total cost. If the information about sales price per unit, variable expenses per unit and the total fixed expenses is available, we can solve the equation for ‘Q’ to find the number of units to break-even. The break-even point in units can then be multiplied by the sales price per unit to calculate the break-even point in dollars. Suppose, for example, you run a manufacturing business that is involved in manufacturing and selling a single product. The annual fixed expenses to run the business are $15,000 and variable expenses are $7.50 per unit. The sale price of your product is $15 per unit. The number of units to be sold to break even can be easily calculated using equation method:

Sp × Q = Ve × Q + Fe

15 × Q = 7.5 × Q + 15,000

15 Q = 7.5 Q + 15,000

15Q – 7.5Q = 15,000

7.5Q = 15,000

Q = 15,000 / 7.5

Q = 2,000 units

The break-even point in units is 2,000 units and the break-even point in dollars can be computed as follows:

= (2,000 units) × ($15)

= $30,000

(2). Use of contribution margin method:

The method described above is known as equation method of calculating break-even point. Some people use another method called contribution margin method (read about contribution margin and its calculation). Under this method, the total fixed expenses are divided by contribution margin per unit. Consider the following computations:

Total fixed expenses / Contribution margin per unit

= 15,000 / 7.5*

= 2,000 units

or

= (2,000 units) × ($15)

= $30,000

*$15 – $7.5

A little variation of this method is to divide the total fixed expenses by the contribution margin ratio (CM ratio). Doing so results in break-even point in dollars. It is shown below:

Total fixed expenses / Contribution margin ratio

= $15,000 / 0.5*

= $30,000

*($15 – $17.5)/$15

Graphical presentation (Preparation of break-even chart or CVP graph):

The graphical presentation of dollar and unit sales needed to break-even is known as break-even chart  orCVP graph:

Explanation of the graph:

1. The number of units have been presented on the X-axis (horizontally) where as dollars have been presented on Y-axis (vertically).
2. The straight line in red color represents the total annual fixed expenses of $15,000.
3. The blue line represents the total expenses. Notice that the line has a positive or upward slop that indicates the effect of increasing variable expenses with the increase in production.
4. The green line with positive or upward slop indicates that every unit sold increases the total sales revenue.
5. The total revenue line and the total expenses line cross each other. The point at which they cross each other is the break-even point. Notice that the total expenses line is above the total revenue line before the point of intersection and below after the point of intersection. It tells us that the business suffers a loss before the point of intersection and makes a profit after this point.  The break-even point in the above graph is 2,000 units or $30,000 that agrees with the break-even point computed using equation and contribution margin methods above.
6. The difference between the total expenses line and the total revenue line before the point of intersection (BE point) is the loss area. The loss area has been filled with pink color. Notice that this area reduces as the number of units sold increases. It means every additional unit sold before the break-even point reduces the loss.
7. The difference between the total expenses line and the total revenue line after the point of intersection (BE point) is the profit area. The profit area has been filled with green color. Notice that this area increases as the number of units sold increases. It means every additional unit sold after the break-even point increases the profit of the business.