RBI profits halved to Rs 32,884 crore in FY10 due to lower returns on foreign assets and higher interest expenses. The banking industry's loan books have not grown since the first quarter as corporates prefer commercial papers over bank loans. Commonwealth Bank of Australia has started full-fledged operations in India with a focus on trade finance, remittances, and foreign exchange. BNY Mellon is looking for partnerships in asset management and custodial services in India. AtosWorldline is set to acquire Venture Infotek, reportedly for around $100 million, in its largest deal in the card payments space.

1. News updates in Banking Sector

2. RBI profits halve to RS 32,884 crore in FY10A steep growth for over four years, RBI profits almost halved to Rs 32,884 crore in FY10.Return on foreign assets tracked the zero policy rate maintained by the central banks of advanced economics, income on such assets declined significantly. As a result the country’s foreign exchange which are parked with foreign central banks yielded very low return.The rate of earning on foreign currency assets and gold was lower at 2.09% in 2009-10 compared with 4.16% in 2008-09.RBI has also spent more by way of interest as it continuously mopping up funds its reverse-repo window.After meeting the necessary transfer to the contingency reserve and asset development reserve,Rs18,759 crore was transferred to the government.

3. Banks loan books fail to matchThe banking industry’s loan book has not grown since the end of the first quarter with outstanding loans continuing to be lower than end June levels.Banker admit that with base rate system in place which envisages a more transparent pricing system for loans, corporate are not preferring to raise working capital loans from banks and instead are opting to raise short-term funds from the market by issuing commercial papers (CP) directly.Banks too prefer investing in CPs as they are more liquid than loans because they are traded in the market.

4. C’monwealth Bank Starts India ops with focus on trade finance, forexCOMMONWEALTH Bank of Australia (CBA) has started its full-fledged operation in India with a focus of trade finance, remittances and foreign exchange services, among others.Group Executive-Simon BlairCBA is the first Australian Bank in the country to start full-fledged banking operations.CBA , privatized in 1991, figures among the top 21 banks in the world, with 80% of its profits coming from home country operations.They chosen India as one of preferred growth markets along with China, Indonesia and Vietnam.From CBA’s perspective, India is Australia’s fourth largest export market and so far only Australian bank to operate in India.

5. BNY Mellon scouts for partners in AMC businessBank of New York Mellon bank(BNYMB) which was created in 2007 following the merger of Mellon Financial Corporation and The Bank of New York Company.BNYMB is looking for business opportunities in India in asset management and custodial services and is seeking domestic partnerships in these two areas.Looking at international funds which invest in global equities .The fund ti up with local mutual funds which could act as feeder funds.The business opportunity bank looking at is its trustee services for acting as an agent and security trustee for corporate bond issuers.

6. AtosWorldline to buy Venture InfotekAtosWorldline Europe’s leading payment services company is set to acquire Venture Infotek in a deal that is likely to be around $100 million.Deal to be biggest in card payments space at $100 million.AtosWorldline is in the electronic payment services business which includes all ends of credit card transactions. The company generates annually revenue of E844 million in Europe.