Central Bank of India

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Central Bank of India, (Marathi:सेंट्रल बाँक ऑफ इंडिया) 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]^[1] 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 recapitalisation^[2] 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 as 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).^[3]

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.^[4]

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 a staff strength of 37,241 as on Nov 2006.

Central Bank of India partnered with TCS[ Tata Consultancy Services ] for its Core Banking Solution.^[5] 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 eTreasury 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.^[6]

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, respect and response. This is asserted to be the path to make customers experience 'Customer Delight'. Subbaraman is of the view that to be able to achieve the coveted goal of at least Rs.2,00,000.00 crores in three years' time, it is urgent to add large numbers of new customers to the bank's existing portfolio. Central Bank also came with its IPO, which was oversubscribed 64 times. The bank has plans to change the bank's signboard across the country, trying to impart a new look to the bank after the IPO.

Contents 1 History 2 Recent News/ Initiatives 3 External links 4 References

[edit] History

It was established in 1911 by Sir Sorabji Pochkhanawala^[7] and claims to have been the first commercial Indian bank completely owned and managed by Indians.

In 1923, it acquired the Tata Industrial Bank in the wake of the failure of the Alliance Bank of Simla.

In 1969, the Indian Government nationalized the bank on 19 July, together with 13 others. ^[7]

Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India as the 'property of the nation and the country's asset'. He also added that 'Central Bank of India lives on people's faith and regards itself as the people's own bank'.

During the past 98 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry.

A number of innovative and unique banking activities have been launched by Central Bank of India and a brief mention of some of its pioneering services are as under:

1921 Introduction to the Home Savings Safe Deposit Scheme to build saving/thrift habits in all sections of the society. 1924 An Exclusive Ladies Department to cater to the Bank's women clientele. 1926 Safe Deposit Locker facility and Rupee Travellers' Cheques. 1929 Setting up of the Executor and Trustee Department. 1932 Deposit Insurance Benefit Scheme. 1962 Recurring Deposit Scheme.

Subsequently, even after the nationalisation of the Bank in the year 1969, Central Bank continued to introduce a number of innovative banking services as under:

1976 The Merchant Banking Cell was established. 1980 Centralcard, the credit card of the Bank was introduced. 1986 'Platinum Jubilee Money Back Deposit Scheme' was launched. 1989 The housing subsidiary Cent Bank Home Finance Ltd. was started with its headquarters at Bhopal in Madhya Pradesh. 1994 Quick Cheque Collection Service (QCC) & Express Service was set up to enable speedy collection of outstation cheques.

Further in line with the guidelines from Reserve Bank of India as also the Government of India, Central Bank has been playing an increasingly active role in promoting the key thrust areas of agriculture, small scale industries as also medium and large industries. The Bank also introduced a number of Self Employment Schemes to promote employment among the educated youth.

Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to distribution of its large network in 27 out of 28 States as also in 4 out of 7 Union Territories in India. Central Bank of India holds a very prominent place among the Public Sector Banks on account of its network of 3541 branches and 218 extension counters at various centres throughout the length and breadth of the country.

In view of its large network of branches as also number of savings and other innovative services offered, the total customer base of the Bank at over 25 million account holders is one of the largest in the banking industry.

Customers' confidence in Central Bank of India's wide ranging services can very well be judged from the list of major corporate clients such as ICICI, IDBI, UTI, LIC, HDFC as also almost all major corporate houses in the country.

[edit] Recent News/ Initiatives

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• Mr S Sridhar has been appointed as the Chairman and Managing Director^[1]
• Central Bank of India launched Visa Platinum and Visa Gold cards^[when?]
• Central Bank of India was conferred with the 1st Award under National Awards for Excellence in MSE Lending based on its outstanding performance in lending to Micro and Small Enterprises during the year 2007-08.
• On December 29, 2008, Kotak Mahindra Asset Management Company, one of India's leading mutual fund houses, entered into a distribution tie-up with Central Bank of India. Under the agreement Central Bank of India will offer the entire bouquet of Kotak Mutual Fund products from the Bank's branches.
• The Bank has been in the forefront in business growth also. The total business of the Bank sharply increased by 124% touching the level of Rs.1,97,162/- as of 30 September, 2008 from Rs. 87,857 crore as of 30 June, 2005.
• The Core Banking System (CBS) of the Bank covers 77% of its business. And, all CBS Branches have been enabled for both RTGS and NEFT services.^[when?]
• IT Enabled Financial Inclusion at Hoshangabad which will bring the financial services to the door steps of those who are living in remotest parts of the country.^[when?] The Bank will deliver deposit, loan and other financial services by engaging Business Correspondent, who will use hand-held mobile devices and issue Smart Cards to the customers.^[when?]
• In order to develop rural entrepreneurship, the Bank launched a Rural Development and Self Employment Training Institute (Rudseti) at Hoshangabad.^[when?] This will provide intensive entrepreneurship training to rural youth, to enable them to take up vocational activities. The Bank has already set Rudsetis at Kota and Muzaffarpur.
• A Financial Literacy and Credit Counseling Centre - Centsahyog was launched at Vadkun in Thane District.^[when?] This will provide free counseling to the villagers on the various banking products, both deposits and loans and also counseling to distressed borrowers, irrespective of whether they are bank's clients or not.
• The Bank also launched Perizaad Zorabian, a well-known personality in the film industry as its Brand Ambassador.^[when?]
• Operating Profit of the Bank was up by 13.28% at Rs. 1,436.74 crore in 2008-09 over the Operating Profit of Rs. 1,268.30 crore in 2007-08.
• Net Profit of the Bank in 2008-09 went up to Rs. 571.24 crore up 3.83% over the net profit of Rs. 550.16 crore in 2007-08.
• Net Profit per employee as on March, 2009 increased to Rs. 1.71 lacs from Rs.1.56 lacs as on March, 2008.
• The Bank had launched a special Housing Loan Scheme in January 2009 at 8.5% rate of interest for five years. The interest rate was brought down to 8% for a period of one year.
• A special deposit scheme for children up to the age of 12 years was launched as "Cent Bal Bhavishya" scheme with an insurance wrap in December 2008.
• Bank has received 'Best Education Loan Provider" and runner up award for "Best Home Loan Provider" by Outlook Money NDTV profit Award 2008".
• Bank ranked first amongst all Banc assurance partners of Life Insurance Corporation of India.

[edit] External links

• Central Bank of India Official website
• [1]
• [2]

[edit] References

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