25.09.2020: Today's Banking / Financial News

 25.09.2020: Today's Banking / Financial News at a Glance TV

🍒 Banks sanction loans worth Rs 1.77 trn to 4.4 mn MSMEs under ECLGS scheme : The Finance Ministry on Thursday said banks have sanctioned loans of about Rs 1.77 lakh crore to 44.2 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under the slowdown caused by the coronavirus pandemic. However, disbursement against the sanctioned amount stood at Rs 1,25,425 crore to 25.74 lakh MSME units till September 21. The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May to mitigate the distress caused by the lockdown due to COVID-19 by providing credit to different sectors, especially micro, small and medium enterprises (MSMEs). The latest numbers on ECLGS, as released by the Finance Ministry, comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs). "As of 21 Sept 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs and private banks to #MSMEs and individuals stands at Rs 1,77,353 crore, of which Rs 1,25,425 crore has already been disbursed," the finance minister said in a tweet. - Business Standard

🍒 RBI releases technology vision for cyber security for urban co-op banks : The Reserve Bank of India on Thursday came out with a Technology Vision for Cyber Security for Urban Co-operative Banks for 2020-23 listing action points for these lenders. “The number, frequency and impact of cyber incidents and attacks have increased manifold in the recent past, more so in the case of financial sector including Urban Co-operative Banks (UCBs). It has, therefore, become essential to enhance the security posture of UCBs so as to prevent, detect, respond to and recover from cyber-attacks,” the RBI said. - Business Line

🍒 Shift towards digital banking is permanent: SBI Chairman, Rajnish Kumar : tate Bank of India Chairman Rajnish Kumar on Wednesday said the number of consumers moving away from branch level transactions and adopting digital modes is increasing, and this change is going to be permanent. He said currently only seven out of 100 transactions are taking place at SBI branches as against 20 out of 100 transactions three years ago. "Progressively, we are seeing that there has been a shift away from branches and even from ATMs. The number of transactions on ATMs have come down from 55 to 29 per 100. On the other hand, the digital transactions, which are on mobile and internet banking, have gone to 55 out of 100 transactions," Kumar said at the Global Business Summit. - economic times 

🍒 Ujjivan Small Finance Bank forays into small commercial vehicle finance for tier II, III cities :  Ujjivan Small Finance Bank (SFB) on Thursday said it will offer small commercial vehicle finance for its customers in tier II and III cities. Ujjivan SFB said as part f the 'Raftaar Loans' product mix, the customised offerings will be available across southern and eastern regions: Karnataka, Tamil Nadu, and West Bengal. The product mix for Raftaar Loans also includes two-wheeler and E-3-wheeler (E-3W) loans. The service will be extended to other branches and locations over time based on the demand, it said in a release. "We remain cognizant of our customers' needs and based on the demand, we decided to foray into small commercial vehicle funding segment. This reinforces our portfolio, and serves as an alternate mode of income generation for our aspiring mass-market customers. - economic times 

🍒 HDFC Bank sets minimum outstanding at ₹25,000 for restructuring retail loans : The country’s largest private sector lender HDFC Bank has set out a minimum outstanding of ₹25,000 for restructuring of retail loans. “Minimum outstanding balance required to convert the card or loan outstanding is ₹25,000,” the lender has answered in the frequently asked questions (FAQs) on loan restructuring. “The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents or information provided which does show the drop in cash flow due to the Covid-19 impact. The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring,” it further said, adding that the repayment track record of the customer, and the responses given by the customer while claiming moratorium earlier will also be factored in the restructuring decision. - Business Line

🍒 RBI levies ₹5 lakh penalty on Shriram City Union Finance : The Reserve Bank of India has imposed a monetary penalty of ₹5 lakh on Chennai-based Shriram City Union Finance for non-compliance with its directions on verification of the ownership of gold jewellery contained in NBFC - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and on reporting of frauds contained in Monitoring of Frauds in NBFCs (Reserve Bank) Directions, 2016. “This action is based on  deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers,” the RBI said in a statement on Thursday.  - Business Line

🍒 Banks working to speed up ICA process for resolution of stressed loans: IBA : Banks are working together in removing hurdles and speeding up the process of execution of inter-creditor agreement (ICA) in order to ensure faster resolution of bad assets amid Covid-19 pandemic, Indian Banks' Association chief executive Sunil Mehta said. He said a draft on the same has been already given to banks for their suggestions. As per the RBI, in cases where a resolution has to be implemented, all lenders will have to enter ICA within a review period.The ICA shall provide that any decision agreed by lenders representing 75 per cent by value of total outstanding credit  facilities (fund-based as well as non-fund based) and 60 per cent of lenders by number shall be binding upon all the lenders. "The point is we want to go for a system where bottlenecks in execution of the ICA are removed. The moment threshold levels reached 60 per cent by number and 75 per cent by value, as per the RBI regulatory guidelines, the ICA can be executed immediately, maybe, within a few weeks. The outer limit is one month," Mehta said during a virtual event organised by Dun and Bradstreet. - Business Standard

🍒 DHFL FD holders move NCLT for clearing dues : Holders of Dewan Housing Finance Corporation (DHFL)’s fixed deposits (FDs) have filed a fresh petition at the National Company Law Tribunal (NCLT), Mumbai, seeking repayment of matured FDs held by senior citizens and critically ill people. Depositors moved NCLT after  the committee of creditors (CoC) refused any immediate relief to them. The Supreme Court had earlier directed deposit holders to seek relief from CoC for their dues. FD holders have admitted claims of Rs 5,375 crore from DHFL. NCLT is set to hear petition on September 25. Vaibhav Guliani, a practicing advocate in Supreme Court, who is represnting FD holders in the matter, said that payment to fixed deposits shall be considered as a regular course of business by financial service provider. - financial express

🍒 RBI announces speciFOl OMOs of simultaneous sale, purchase of G-Secs worth Rs 10,000 crore each : The Reserve Bank of India (RBI) on Thursday announced it will conduct simultaneous purchase and sale of government securities under open market operation (OMO) for an aggregate amount of Rs 10,000 crore each on October 1. “On a revFORWew of the current liquidity and financial conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of FOOovernment securities under open market operation (OMO) for an aggregate amount of Rs 10,000 crore each on October 1, 2020,” it said in a statement. The RBI further said it will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly functioning of financial markets. On October 1, the RBI would purchase three securities totalling Rs 10,000 crore and selling two securities of the same amount. The result of the auctions will be announced on the same day. - financial express

🍒 Citi appoints Arjun Chowdhry as acting head of consumer banking biz in India : Citigroup has appointed Arjun Chowdhry as the acting head of its consumer banking business in India, officials said on Thursday. Chowdhry, who has been with Citi for 25 years, currently serves as the head of credit cards, payments and unsecured lending for the American bank in India.  - financial express

🍒 IBC suspension gets 3 months’ extension : The Centre has extended by three months the suspension of insolvency proceedings initiation against the corporate debtor for defaults arising post March 25, when the Covid-19-induced lockdown was announced.  It may be recalled that in response to the pandemic, the government had, on June 5, come out with an ordinance to prohibit the initiation of insolvency proceedings for defaults arising during the six months from March 25, 2020 (extendable up to one year).- Business Line

🍒 Personal Guarantors: IBBI, govt to defend legal validity of IBC provisions : Insolvency regulator IBBI and the government are expected to go all out to defend the legal validity of the IBC provisions on personal insolvency against personal guarantors to corporate debtors, when the current matters on legal challenges come next before the Delhi High Court on October 6. Some personal guarantors who are in the dock are now claiming that enforcing certain IBC provisions in relation to personal guarantors to corporate debtors amounted to an unconstitutional usurpation of legislative power by the executive and they are challenging the provisions as “wholly impermissible in law”, sources said..- Business Line

🍒 Australian bank Westpac to pay record $920 million fine to settle money laundering case : Westpac, one of Australia’s largest banks, on Thursday announced thatFOROit had reached an agreement with the Australian government’s financial intelligence agency Australian Transaction Reports and Analysis Centre (AUSTRAC) to settle a civil lawsuit. Westpac has agreFOOd to pay a civil penalty A$1.3 billion ($920 million). The lawsuit revealed over 23 million breaches of the country’s Anti-Money Laundering and Counter-Terrorism Financing Act, 2006. AUSTRAC had begun civil proceedings against Westpac in November last year..- Business Line

🍒 IL&FS fiasco: SEBI hikes penalty on CARE, ICRA to ₹1 cr each : SEBI has hiked its penalty to ₹1 crore from the earlier ₹25 lakh on credit rating agencies ICRA and CARE for their lapses in assigning ratings to the non-convertible debentures of IL&FS, which later defaulted in payments. The IL&FS fiasco came to light in 2018 after which SEBI undertook an examination of the rating agencies. SEBI said it had examined the order passed by its Adjudicating Officer (AO) and observed that the penalty levied was “erroneous and not commensurate with the overall impact these violations had on the market”..- Business Line

🍒 India Ratings maintains negative outlook on NBFCs, HFCs for H2 FY21 : Domestic rating agency India Ratings and Research on Thursday said it has maintained a negative outlook on non-banking financial companies (NBFCs) and housing finance companies (HFCs) for the second half of 2020-21.  It said growth in assets under management would be flattish for NBFCs as against its earlier estimate of 8-10 per cent y-o-y, and in lower single digits for HFCs in 2020-21. - Economic Times

🍒 Gold price today: Yellow metal declines by Rs 505 to Rs 49,822/10gm; silver crashes by Rs 2,437 a kg : Gold prices weakened for the fourth successive day by Rs 505 to Rs 49,822 per 10 gram in the Mumbai retail market on firm US dollar and sell-off in equity markets.The precious metal is volatile today after a sharp 2.1 percent decline yesterday. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,637 plus 3 percent GST, while 24-carat 10 gram was Rs 49,822 plus GST. The 18-carat gold quoted at Rs 37,367 plus GST in the retail market. Silver prices declined by Rs 2,437 to Rs 56,471 per kg from its closing on September 23.

🍒 Sensex tanks over 1,100 points; Nifty at 10,800 : Equity indices on Thursday fell over 1,100 points dragged by Auto, IT and banking stocks amid a selloff in global equities after US Federal Reserve officials warned the US economy was worse than the market was pricing in. Expiry of September derivatives contracts amid a bearish sentiment, added to investor woes.At close, the Sensex ended down 1,114 points at 36,553 while the Nifty tanked 326 points to 10,805.The Sensex hit an intraday high of 37,304 and a low of 36,495. Similarly, the Nifty touched an intraday high of 11,015 and a low of 10,791. The market breadth was negative 1,509 shares declined, against advance of 327 shares. Among the Nifty50 constituents, 47 stocks ended with losses in today's session.

🍒 Rupee slips 32 paise to 73.89 against US dollar : he rupee depreciated 32 paise to settle at 73.89 (provisional) against the US dollar on Thursday as sell-off in domestic equities and foreign fund outflows weighed on investor sentiment. At the interbank forex market, the rupee opened on a weak note at 73.82, then fell further to finally close at 73.89 against the American currency, registering a fall of 32 paise over its last close.