Central Bank India

Topics: Bank, Fractional-reserve banking, Central bank Pages: 9 (2554 words) Published: February 23, 2011
Central Bank of India
Central bank a government-owned bank is one of the oldest and largest commercial banks in India. The bank currently has 3,168 branches and 270 extension counters across 27 Indian states. Mr. S Sridhar [Ex CMD National Housing Bank] has been appointed as the Chairman and Managing Director of state-run Central Bank of India as on 2 March 2009. The post had been lying vacant and the appointment was cleared by the government yesterday, the Bank said in a statement. To improve the Bank's capital adequacy ratio and enable it to support the credit requirements of the productive sectors of the economy, the Centre has recently decided to infuse Rs 1,400 crore in the Bank. Under the proposed capital infusion plan, Central Bank of India will get Rs 700 crore by this month-end, while the balance amount will be made available to the Bank in next fiscal. Central bank of India is one of 18 Public Sector banks in India to get recapitalization finance from the government over the next 24 months. The infusion of fund will improve the financial health of the banks as their capital adequacy ratio (CAR) will be raised more than desired level of 12 percent. The increase in CAR of the banks will also enable them to lend more money. The CAR of Central Bank of India was less than 12 percent as on June 30 2006. The wholly-owned public sector bank, based in Mumbai, will convert an amount of Rs. 800 crore out of its Rs. 1,124.14-crore total equity capital into perpetual non-cumulative preference shares. The preference shares would carry an annual floating coupon rate of eight per cent, which would be benchmarked to 100 basis points above the repo rate. It will shore up the balance-sheet of the bank and enable it to raise capital from the markets. According to an official statement, the equity capital restructuring would lead to an improvement in the bank's credit rating was also facilitate the adoption of Basel II norms. For financial year 2008-2009, Central Bank of India's Q3 standalone net profit went up at Rs 353.26 crore from Rs 201.01 crore (YoY). The bank's standalone net interest income, NII was up at Rs 671.94 crore versus Rs 544.85 crore (YoY). At a time when the global banking industry is feeling the pinch of the global credit crunch, Central Bank of India is planning to expand its foreign presence. The public-sector lender has approached the Reserve Bank of India (RBI) for permission to open representative offices in five locations - Singapore, Dubai, Doha, London and Hong Kong. This is the first time the bank is venturing an independent overseas foray after the Sethia scam in the 1970s forced the bank to close down its London office. RBI had then asked the other two banks, who had operations in London, to close down. As on March 31, 2006, the bank's reserves and surplus stood at Rs. 1,810.19 crore. Its total business at the end of the last fiscal amounted to Rs. 1,05, 677 crore. The bank had staff strength of 37,241 as on Nov 2006. Central Bank of India partnered with TCS [Tata Consultancy Services] for its Core Banking Solution. The solution set to be implemented will include B@NCS from Sydney-based Financial Network Solutions (FNS), Exim Bills Trade Finance software from China Systems and treasury from TCS. With 703 banks in the core banking system (CBS), it was planned that by the end of March 2008 a total of 1,000 branches would be brought under the CBS. As of 31 March 2006, the bank achieved a landmark: crossing a business mix of Rs. 1, 05,000.00 crores. The next target has been fixed at doubling this figure in the next three years. Krishnan Subharamaniam, Executive Director of the bank, in his message to staff members, has called upon them to achieve the target and suggested some steps. One of these steps is to change the manner in which employees extend service to customers across different delivery channels. He has advocated the adoption of the '3R' principles when dealing with customers - recognition,...
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