02.10.2020: Today's Banking / Financial News at a Glance

☕ 02.10.2020: Today's Banking / Financial News at a Glance

🍒 FM Nirmala Sitharaman asks banks to prepare cadre of officials well versed in local languages to better serve customers :  Finance Minister Nirmala Sitharaman on Thursday asked banks to prepare a cadre of people who can speak and understand a regional language in order to serve the customer better. This will bring them at par with other All-India services like Indian Administrative Services in true sense, she said while launching the Uniform Training Programme for Induction and Mid-Level Training, including a module on preventive vigilance for officers of public sector banks (PSBs). She said there is no point in banks claiming that they have pan-India presence when in some pockets, where Hindi does not work, their executives still need to learn native language to serve the customers. "We need to have a cadre of people who will have to understand the language of the state in which the posting happens," she said. Observing that recruitment in banks happens in an All-India fashion, she said officers are unable to speak the language of locals if the postings are deep into a state where Hindi is not spoken. "Of late, I have come across several friction points in some branch-level cases where because the locals come to the branch, and the branch officials are not able to speak the local language," she said. - economic times

🍒 Corporate relationships more than big-ticket lending for SBI now: Chairman : State-owned State Bank of India (SBI) has changed its approach of serving corporate clients to one extending beyond supply of credit, its Chairman Rajnish Kumar said on Thursday. Kumar said the new approach involves giving solutions to a variety of needs of the corporates and their stakeholders like supply chain vendors, distributors and employees. "Our relationship with corporates was more about giving credit. But, in the past couple of years, we have shifted focus," Kumar said at an event to announce a tie-up with the country's largest fast-moving consumer goods firm Hindustan Unilever. He said corporates have a large ecosystem consisting of their supply chain, logistics and their own employees. "If we look at them holistically, it is more than the need for money by them. It is the solutions that matters the most," he said. - economic times

🍒 SBI in tie-up to offer digital payment solutions to HUL retailers and distributors : State Bank of India (SBI) and Hindustan Unilever Ltd (HUL) have signed a memorandum of understanding (MoU), under which the bank will provide its digital payment and financing solutions to the FMCG company’s retailers and distributors. SBI will offer an instant paperless overdraft facility of up to ₹50,000 to retailers for their billings with distributors as well as financing facilities to HUL’s distributors. To ensure that customers get the option of digital payments in smaller towns as well, the bank will install point of sale (PoS) machines at multiple HUL touchpoints across the country, SBI said in a statement. Additionally, it will provide UPI-based solutions to HUL retailers for hassle-free, safe and instant cashless payments to their dealers from HUL’s retailer application ‘Shikhar’. The bank will also offer HUL employees the option of a corporate salary package via an SBI microsite hosted on HUL’s intranet.- Business Line

🍒 BoB launches third edition of Baroda Kisan Pakhwada : The third edition of ‘Baroda Kisan Pakhwada’ — a pan-India initiative to encourage farmers to connect with services offered by Bank of Baroda and Government — got under way on Thursday, with the bank this year placing special emphasis on promotion of certain new agri-focussed schemes under Atmanirbhar package. In focus during this Pakhwada period of October 1-16 are schemes for financing under Agriculture Infrastructure Fund, Animal Husbandry Infrastructure Development Fund and PM Formalisation of Micro Food Processing Enterprises Scheme. The Pakhwada, which is happening mainly in virtual mode will conclude on October 16 with the celebration of ‘Baroda Kisan Diwas’, coinciding with ‘World Food Day’, a statement issued by the bank said. - Business Line

🍒 Banks are going all out with offers to revive credit growth during festive season : Banks are putting in their best efforts — offering fee discounts, lower interest rates and a promise of quick loan processing — to revive credit growth, which is languishing at multi-decade lows because of the pandemic. Large lenders such as the State Bank of India, HDFC Bank and ICICI Bank have unveiled a host of special offers to take advantage of pent-up consumer demand during the festive season as they hope higher demand will make up for the lost first quarter. On Wednesday, HDFC Bank announced halving of processing fees on auto, personal and business growth loans, while removing the fees all together for two-wheeler loans. It is also offering special deals on various brands with credit and debit card purchases, in an attempt to boost consumption. - economic times

🍒 LVB shortlists three candidates for MD & CEO post; to send names to RBI in a week  : The Committee of Directors (CoD) at the troubled Lakshmi Vilas Bank (LVB) has shortlisted three candidates for the post of MD and CEO and the names will be sent to the RBI within a week, an official of the bank said. The lender's chief executive S Sundar and six other directors were voted out by shareholders earlier this week. Post the removal, the Reserve Bank appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra. "A bank cannot work without a managing director and chief executive officer (MD and CEO). So, we at the board got together and discussed how to move ahead without an MD (for the time being). "The bank had interview for the post... and we have selected three candidates. We will send our recommendations to the Reserve Bank within a week," Sinha told PTI.- economic times

🍒 Crisil expects bank credit to grow by up to 1 pc in FY21 : The banking system's credit growth will plummet to a multi-decadal low of up to 1 per cent in FY21, domestic credit ratings agency Crisil said on Thursday. For non-banking finance companies (NBFCs), the shock will be more pronounced and assets under management (AUM) may decline by up to 3 per cent during the fiscal, impacted majorly by wholesale segment, it said. It can be noted that non-food credit growth was at 5.5 per cent as of August 28 as compared to the year-ago period. Lenders have been undertaking targeted measures to increase the growth and are pinning hopes on festive season for growth to go up.Generally, bank credit growth is said to be directly linked to the economic activity, which is set to contract by over 10 per cent in FY21. "Given the grim economic outlook, the banking system's credit growth will come at between 0-1 per cent in FY21. This will be a multi-decade low," the agency's senior director Somasekhar Vemuri told reporters on a call. - economic times

🍒 India Post Payments Bank attains 3.6 crore customers amid the pandemic : Even as mode of transaction turning cashless the government-backed India Post Payments Bank (IPPB) is gaining ground amid a COVID-19 caseload. The bank attained a total customer base 3.6 crore and completed over Rs 38,500 crore financial transactions cumulatively until September 15, the bank said in a release. IPPB launched its operations just two years ago. In August last year, it had crossed the milestone of one crore customers. “The Aadhaar Enabled Payment System Service (AePS) has been a game changer of sorts in expanding access to banking and financial services for millions of poor and unbanked at the last mile with cash being delivered at their doorstep,” said Easwaran Venkateswaran, Interim MD & CEO, India Post Payments Bank. “The bank is committed to deliver value to its stakeholders through an adaptive and agile business model that leverages the power of digital and technology and change the way every Indian transacts,” he said. - economic times

🍒 Insolvency and Bankruptcy Code has resulted in substantial recoveries: GC Murmu : The Insolvency and Bankruptcy Code (IBC) has nudged the behaviours of debtors and creditors and this has resulted in substantial recoveries for creditors outside the framework of the code, said GC Murmu, comptroller and auditor general of India (CAG) on Thursday. “With the code in place, non-repayment of loan is no more an option and ownership of the firm is no more a divine right and equity is no more the only route to own a firm,” Murmu said, during an event commemorating the fourth annual day of the Insolvency and Bankruptcy Board of India (IBBI). The IBC was also reducing the incidence of default and helping to resolve the non-performing assets crisis affecting the banking system, he said. - economic times

🍒 CBI books Hyderabad-based firm, its MD for Rs 166-crore bank fraud : The CBI has booked Hyderabad-based Chadalavada Infratech Ltd and its Managing Director for allegedly cheating State Bank of India to the tune of over Rs 166 crore, officials said on Thursday. The company deals in electricity infrastructure such as transmission, distribution and construction of sub-stations and was contractor in projects in Assam, Bihar, Chhattisgarh, Karnataka and Maharashtra, they said. Initially, the company started participating in tenders of Rs 25 crore and gradually started getting orders from various state electricity boards, they said. The company has been doing business with State Bank of India since 2006 with an initial credit limit of Rs seven crore, which was increased to Rs 243 crore within four years, they said.. - economic times

🍒 SBI sees govt overshooting fiscal deficit numbers, pegs combined deficit at 13% : The union government is likely to overshoot the fiscal deficit numbers and the consolidated fiscal deficit of the Centre and the states is expected to touch 13 per cent of GDP during the current fiscal, says a report. According to the SBI Research report, the country's nominal GDP growth is expected to decline below the FY19 levels this year. "We are expecting a consolidated fiscal deficit of the Centre and the states to touch 13 per cent of GDP going by the current trends," the report said.According to the data released by the Controller General of Accounts (CGA), fiscal deficit, the gap between expenditure and revenue, during April-August was at 109.3 per cent of the annual target estimated in the Budget. In absolute terms, the fiscal deficit was at Rs 8,70,347 crore."Given these numbers (fiscal deficit had touched 109.3 per cent by August already at Rs 8.7 lakh crore), sticking to the budgeted borrowing numbers of (Rs 12 lakh crore) indicates large expenditure cuts that will be clearly inimical to growth," the report noted. The report did not offer separate numbers for the Centre and the states.- economic times

🍒 Digital payment transactions surge in lockdown to surpass pre-Covid levels : Notwithstanding the economic slowdown, digital payment transactions continued to surge in September and crossed pre-Covid levels in categories like UPI, IMPS and FASTags. According to data released by the National Payments Corporation of India on Thursday Unified Payments Interface (UPI) crossed the ₹3 lakh crore mark last month. As many as 180 crore transactions amounting to ₹3.29 lakh crore took place on the UPI platform in September, 2020 as compared to the 161 crore transactions of total ₹2.98 lakh crore recorded in August, 2020. Apart from March and April this year, when transactions on the platform had taken a hit due to the Covid-induced national lockdown, payments through UPI have seen an almost continuous rise. - Business Line

🍒 Former Union Bank of India official convicted in fraud case : The Special Judge for CBI Cases, Chennai, on Thursday sentenced R Kannan, former Chief Manager of Union Bank of India in Chennai’s Mount Road branch, to three years rigorous imprisonment with a fine of ₹2 lakh in connection with a bank fraud case involving top officials of Chennai-based National Medicines Private Ltd. In a press release, the Central investigating agency said it has registered a case on the allegations that between 2006 and 2007, the Directors of National Medicines conspired with Kannan and Parvathi Ramakrishnan, Manager of Standard Chartered Bank, Chennai, with an intention to cheat the Union Bank of India.. - Business Line

🍒 Dhanlaxmi Bank: RBI approves interim panel to run operations till new MD, CEO take charge : Dhanlaxmi Bank on Thursday said that the Reserve Bank of India has approved a three-member panel till the new managing director and chief executive officer take charge. The committee of directors will be constituted with Shri. G. Subramonia Iyer as chairman, G. Rajagopalan Nair and P.K Vijayakumar as members. The banking regulator has directed that the interim arrangement will not continue beyond four months, the bank said in the regulatory filing. The bank has been asked to complete the proceedings of appointing a new MD and CEO. - Live Mint

🍒 BharatPe clocks over ₹80 crore disbursements in September : Merchant payment network BharatPe said on Thursday it recorded disbursal of over ₹80 crore in September, making it the largest fintech lender for merchants in India during the pandemic. The company has facilitated loan disbursals to the tune of ₹150 crore through its partners in the current quarter. BharatPe also said that it has ambitious plans of increasing the number of loan disbursals by seven times this year and will disburse loans worth ₹1,000 crore in the rest of FY21. - Live Mint

🍒 Gold trades steady for the second straight day at Rs 50,413/10 gm, silver slips Rs 710/kg : Gold prices were steady for the second consecutive day at Rs 50,413 per 10 gram in the Mumbai retail market on sharp appreciation in the rupee despite positive global cues. The precious metal had lost Rs 567, or 1.12 percent, this week in the domestic market. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 37,810, Rs 46,178 and Rs 50,413, respectively, plus 3 percent Goods & Service Tax (GST). Silver prices slid Rs 710 to Rs 59,264 per kg from its closing on September 30.

🍒 Rupee surges 22 paise to 73.54 against US dollar : The rupee strengthened by 22 paise to 73.54 against the US dollar in opening trade on Thursday, as positive domestic equities and weak American currency buoyed investor sentiments. At the interbank forex market, the domestic unit opened at 73.60 against the US dollar, then gained further ground and touched 73.54, registering a rise of 22 paise over its previous close. On Wednesday, the rupee closed at 73.76 against the US dollar.

🍒 Sensex surges 629 points; Nifty reclaims 11,400 : The 30-share BSE index ended 629.12 points or 1.65 per cent higher at 38,697.05. The broader NSE Nifty surged 169.40 points or 1.51 per cent to close at 11,416.95.IndusInd Bank was the top gainer in the Sensex pack, zooming over 12 per cent, followed by Bajaj Finance, Axis Bank, ICICI Bank, Tech Mahindra, Bajaj Finserv and Kotak Bank. On the other hand, ITC, NTPC, Titan, Reliance Industries and ONGC were the laggards.