🍒 ACC extends tenure of 3 Executive Directors of PSU banks : The Appointments Committee of the Cabinet (ACC) has approved the extension of the term of three Executive Directors (EDs) in various Public Sector Banks (PSBs). The Department of Financial Services in the Finance Ministry had made these proposals based on the recommendations of the Banks Board Bureau (BBB). While Matam Venkata Rao, Executive Director of Canara Bank, has been given an extension of two years -- beyond his earlier term that expired on October 8, the term of Ajay Kumar Srivastava, Executive Director of Indian Overseas Bank, has also been extended by two years from the same date. The ACC has also approved the extension of the term of Debashish Mukherjee, Executive Director of Canara Bank for a period of two years from February 18, 2021 -- when his current term is due to expire, according to an executive order issued by the Department of Personal Training. - Business Line
🍒 'Interest on interest': Can’t go beyond relief already announced, Centre tells SC : Amid demands for succour from sectors such as real estate, the Centre on Friday said it would not be possible to add to the already announced financial relief packages and waive compound interest for the six-month loan repayment moratorium period. It also urged the Supreme Court against getting into sector-specific financial assistance, arguing that fiscal policy is the exclusive domain of the Union government. The Centre clearly indicated it would not be possible to revise the Rs 2 crore limit on loans that would benefit from its proposal. It said this had been arrived at after considerable deliberations. “Fiscal policy is the remit of the government,” the finance ministry said an affidavit. - economic times
🍒 Reserve Bank of India appeals to Supreme Court to allow NPA classification : India's central bank has appealed to the country's top court to let banks classify loans as nonperforming, saying a ban imposed to help borrowers in the COVID-19 pandemic could greatly harm the nation's financial system. The Reserve Bank of India, in a filing to the Supreme Court late on Friday, warned that failure to immediately lift an interim stay on banks classifying any loan as a non-performing asset (NPA) would also undermine the central bank's regulatory mandate. The court granted the stay last month, responding to a plea filed by an Indian optician, later joined by a wide range of borrowers whose income or revenue was hit by the COVID-19 pandemic. The court is set to rule on the matter on Tuesday. The ruling could have far-reaching consequences not only for millions of borrowers, but also for banks and the country, as state-run banks dominate the sector. - economic times
🍒 Government allows bulk transfer of provident fund from exempted establishments : In a move aimed at improving the ease of doing business, government has allowed bulk transfer of provident fund from exempted establishments to the Employees' Provident Fund Organisation in one go. The move is expected to benefit 1500 exempted establishments of EPFO. Till now exempted establishments had to approve and transfer the funds one-by-one for each member. Consequently, larger establishments requiring to transfer the funds of many employees each day, found the process very cumbersome and time taking. Under the new facility, exempted establishments can bulk upload data and transfer the funds for large number of members, through a single payment. "This will enhance ease of doing business by increasing the speed of funds transfer for exempted establishments," EPFO said in a statement.- economic times
🍒 Moratorium period exceeding six months may result in vitiating overall credit discipline: RBI to SC : A loan moratorium exceeding six months might result in “vitiating the overall credit discipline”, which will have a “debilitating impact” on the process of credit creation in the economy, the Reserve Bank of India has told the Supreme Court. In an af
fidavit filed in the apex court in the loan moratorium case, the RBI has said that a long moratorium period could impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments. The banking regulator fled the affidavit in pursuance to the apex court's October 5 order asking the Centre and the RBI to place on record the K V Kamath committee recommendations on debt restructuring because of COVID-19 related stress on various sectors as well as the notifications and circulars issued so far on loan moratorium.- economic times
🍒 PSBs on-board 1.5 crore account holders on digital payment modes in 45 days : The Finance Ministry on Friday said that public sector banks (PSBs) have on-boarded about 1.5 crore customers on digital payment modes in just 45 days of launch of the ‘Digital Apnayen’ campaign. The campaign, aimed at encouraging customers to use digital banking channels, was launched on August 15 under the aegis of the government’s Digital India initiative. “Pushing digital payment adoption further with the #DigitalApnayen campaign! Started on 15th Aug’20, DFS’s campaign has already onboarded >1.58 Cr. Customers and has resulted in deployment of 50k PoS, >3L QR codes & 18k BHIM Aadhaar pay devices in just 45 days,” Department of Financial Services said in a tweet. Under the campaign, banks were asked to on-board a minimum 100 new customers including merchants and financial inclusion account holders by each branch on digital payment mode. - financial express
🍒 RBI makes TLTROs on-tap, extends fund use to loans : The Reserve Bank of India (RBI) on Friday expanded on its liquidity measures to make the targeted long term repo operations (TLTRO) available on tap and extend the use of money raised under this window to loans given by banks. Industry executives and analysts said while the expanded scheme is meant to enable smaller firms to access funds, details on eligibility will be key. The new format is also aimed at leaving banks with few excuses to not lend aggressively, NBFC chiefs said. RBI governor Shaktikanta Das said that the central bank will conduct on-tap TLTROs with tenors of up to three years for a total amount of up to Rs 1 lakh crore at a floating rate linked to the policy repo rate. The scheme will be available up to March 31, 2021, with flexibility with regard to enhancement of the amount and period after a review of the response to the scheme. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, loans and non-convertible debentures issued by entities in specific sectors over and above the outstanding level of their investments in such instruments as on September 30, 2020. - financial express
🍒 Care Ratings downgrades Lakshmi Vilas Bank’s debt instruments : Care Ratings has downgraded a slew of unsecured redeemable non-convertible subordinated lower tier II bonds already issued by Lakshmi Vilas Bank (LVB) and additional tier- I bonds that are yet to be issued by the troubled private sector lender. Majority of the ratings have been revised down to Care BB- negative (double BB minus, outlook negative) from Care BB+ negative (double B plus, outlook negative). The revision in ratings assigned to various debt instruments of LVB to the tune Rs 618.70 crore factors in the sharp decline in the net worth due to significant losses reported in FY20 and Q1FY21. The bank reported total CAR and tier I CAR of 0.17% and (-)1.83%, respectively, as on June 30, 2020, Care Ratings said. - financial express
🍒 RBI extends SLR holdings in HTM category till March 2022 : n order to provide certainty to banks, Reserve Bank of India (RBI) on Thursday extended the time period for statutory liquidity ratio (SLR) holdings in held to maturity (HTM) category by one year till March, 2022. Earlier in September, the central bank had increased the limits of SLR holdings under HTM category to 22% from previous 19.5% of the net demand and time liabilities (NDTL) till March, 2021.This dispensation is available to banks for securities acquired between September 1, 2020 and March 31, 2021. Bankers feel that move by RBI will provide cushion in terms of planning for them. “The opening of HTM window upto March 31, 2022 is a much needed move, otherwise we were worried about planning after March, 2021, ” a senior bank official told FE. “In the absence of this order, we were supposed to shift these securities from HTM category to available for sale (AFS) category from first quarter of next financial year.” The investment portfolio of banks is classified under held to maturity (HTM), available for sale (AFS) and held for trading (HFT) category. The holding of securities under HTM provides cushion for banks from valuation changes. - financial express
🍒 RBI allows HFCs to lend with banks under co-origination model : The Reserve Bank of India (RBI) on Friday allowed housing finance companies (HFCs) to collaborate with banks for priority sector lending under co-origination model. In 2018, RBI had put in place a framework for co-origination of loans by banks and non-banking financial companies (NBFCs). However, HFCs were not allowed to co-lend with banks under this model. Lenders believe that move from RBI may bring down interest rates for HFCs. Although, this model has not taken a broad shape since inception, bankers said that latest move from RBI may bring best of banks and NBFC together. Dinesh Kumar Khara, chairman, State Bank of India (SBI), said that the decision to operationalise the co-origination model is right as it brings the best of banks and NBFC together. This will surely increase the reach of the financial sector at such a critical point, he added. In an interaction with CNBC TV 18, S S Mallikarjuna Rao, MD and CEO, Punjab national Bank (PNB), said the interest rate may come down for loans given by housing finance companies as a result of co-lending. Although, co-lending has not taken a broad shape since 2018, but we expect it to go little further at least in housing segment, he further said. - financial express
🍒 ‘Regulators have ignored handholding’ : Just like the Securities Appellate Tribunal (SAT), which was set up to hear and dispose of appeals against orders passed by the market regulator Securities and Exchange Board of India (SEBI), it is time to create an appellate tribunal for the Reserve Bank of India (RBI) to make the banking regulator accountable and its decisions more transparent, said former Supreme Court Justice BN Srikrishna on Friday. He was speaking at the BusinessLine Knowledge Series webinar on ‘Is the long arm of the regulator hurting the markets?’. The webinar, powered by BSE, was moderated by Palak Shah, Senior Assistant Editor, BusinessLine.- Business Line
🍒 LIC to offer 24 cr shares at ₹320/per share for Vedanta delisting : Life Insurance Corporation (LIC) is likely to seek ₹320 per share from Vedanta promoters in the delisting issue of the company, sources told Business Line. Data from stock exchange website showed that around 40 crore shares were being offered at ₹320 and there were only 2 orders offering such huge number of shares. The confirmed quantity was around 4 crore shares and cumulative confirmed quantity stood at around 40 crore shares. LIC holds about 24 crore shares in the company and is its largest non-promoter shareholder. -
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