Infy moves funds from private to govt-owned banks

Infosys moves funds from private to govt-owned banks

Satyam’s non-existent Rs 5,361-crore cash hoard, which resulted in the collapse of the company and arrest of its chairman Ramalinga Raju, has made Infosys give a detailed account of where exactly its Rs 9,686 crore cash and its equivalents are kept.

In recent times, the IT giant has shown a great fondness for government-owned banks. In the last three quarters, Infosys’ deposits in Indian banks have gone up to Rs 7,419 crore from Rs 5,772 crore on March 31, 2008. The balance amount of Rs 1,832 crore is with liquid mutual funds, corporate bodies and financial institutions. According to the company’s CEO, Kris Gopalakrishnan, 67% of the company’s cash reserves are parked with nationalised banks.

In an interesting sub-text, Infosys Technologies has shifted Rs 1,000 crore from ICICI Bank to State Bank of India (SBI) over the past nine months. Today, it has a mere Rs 10-crore with ICICI Bank. Its deposits with SBI have doubled from Rs 1,000 crore in March 2008 to Rs 2,000 crore in December 2008.

Infy takes out cash from banks abroad
The country’s second largest IT firm Infosys has made public details of where its cash is parked.

Infosys has parked Rs 500 crore each in State Bank of Mysore, Bank of India and Axis Bank. It has Rs 535 crore in Punjab National Bank and Rs 528 crore in Canara Bank.

According to the list, the total deposits of Infosys with non-scheduled foreign banks has reduced from Rs 414 crore to Rs 281 crore between March and December 2008. Also, Infy has reduced its dependence on the Bank of America. For instance, the company had a deposit of Rs 272 crore in March 2008 and now it is Rs 174 crore. It also reduced its dependence on Deutsche Bank, UK, by bringing down deposits from Rs 76 crore to Rs 44 crore. However, its deposit with Deutsche Bank, Belgium, has gone up from Rs 5 crore to Rs 11 crore.

As for FIs and corporate bodies, the firm cut its deposits from Rs 1,421 crore to Rs 1,234 crore for the same period. HDFC deposits remained constant at Rs 1,000 cr while LIC deposits increased from Rs 161 crore to Rs 234 crore. Infy’s deposits in GE Capital India, (Rs 260 cr) has now become nil.

And I advise each of you to do the same.

1. Do not have FD's more than 1 lakh.
2. If you have an FD of 3 lakhs, break it into 3 FD's of 1 lakh each. This has multiple advantages:
   
   • Bank FDs are protected upto an amount of 1 lakh
   • If you need money suddenly, you can break one or more of the FDs and that way keep some FDs intact. As you know, when you break an FDs, there is a lot of interest loss.
3. Spread out the FDs in multiple banks.
4. Rely on state owned nationalized banks such as SBI, PNB, BoB, Canara, etc.
5. Avoid co-operative and scheduled banks of unknown reputation even if interest rate is higher
6. Private banks like ICICI, HDFC, IDBI, etc. are very poor in terms of service.

I moved all my money from ICICI bank to my SBI & IOB accounts.
The balance in my ICICI bank is Rs 5.00...