🍒 RBI to conduct auction of State Development Loans on October 22 : The Reserve Bank of India on Friday said it will conduct the first ever purchase auction of State Development Loans (SDLs) under Open Market Operations (OMOs) for an aggregate amount of ₹10,000 crore on October 22. The central bank said the purchase auction amount has been kept at ₹10,000 crore, keeping in view that this is the first ever OMO purchase of SDLs. Depending on market response, the size of the auctions may be enhanced in the subsequent auctions, it added. - Business Line
🍒 Rajkiran Rai elected IBA chief : The Managing Committee of the Indian Banks’ Association (IBA), at its meeting held on Friday, elected Rajkiran Rai G, Managing Director and CEO, Union Bank of India, as the Chairman of the Association for the term 2020-21. Dinesh Kumar Khara, Chairman, State Bank of India, was elected as Deputy Chairman of the Association for the year 2020-21, IBA said in a statement. Rai was earlier the Deputy Chairman of IBA. - Business Line
🍒 BOB Fin wants to emerge among top-five credit card players in two years : BOB Financial Solutions Limited (BFSL), which recently entered into a strategic partnership with Mastercard, is eyeing entry into the top-five league in credit cards industry in terms of cards in force (CIF) in the next two years, Shailendra Singh, Managing Director and CEO has said. This wholly-owned subsidiary of Bank of Baroda, which has about 5 lakh CIF, is currently ranked 14th in the credit cards industry pecking order. “I don’t think this (aspiration of getting into top five in 2 years) is going to be very challenging. We are now very aggressive on credit cards, and will leverage our recent strategic alignment with Mastercard to build great customer experience and product innovation and technology use,” Singh said. - Business Line
🍒 Valuation gap between HDFC Bank and ICICI Bank narrowest after correction : The correction in banking stocks since March has helped reduce the valuation premium that HDFC Bank commands over ICICI Bank. From 4.2 times FY19 book, HDFC Bank’s asking rate has currently dipped to 2.8 times FY21 estimated earnings. ICICI Bank’s valuations, on the other hand, has improved from 1.8 times FY19 to 1.9 times FY21 estimated book. The number for ICICI Bank is expected to remain stable or marginally improve going ahead. In other words, HDFC Bank’s valuation premium which was twice more than that of ICICI Bank for most years between FY10 - FY19 is fast melting. At about 37 per cent premium to ICICI Bank, the valuation gap with HDFC Bank is at a decadal low (see table). Even on FY20 basis, the figure is the lowest in a decade. The difference between the two stocks now is just about mirroring their balance sheet size. HDFC Bank’s balance sheet at Rs 10.03 trillion in FY20 is 36 per cent larger than ICICI Bank's Rs 6.45 trillion. - Business Standard
🍒 HDFC Bank Q2 preview: May post over 16% profit growth; asset quality trends key monitorable : HDFC Bank is expected to report over 16 percent growth in profit as well as net interest income (NII) in Q2 FY21. Asset quality may weaken a bit sequentially. Profitability of the country's largest private sector lender may be hit by higher provisioning on expected restructured accounts (COVID-19 related), but lower tax rate may support earnings growth. The bank had earlier reported a 16 percent year-on-year growth in Q2 advances at Rs 10.37 lakh crore, while deposits grew 20 percent to Rs 12.29 lakh crore. "NII is expected to be moderate to 16 percent YoY on account of lower NIM, with the bank carrying excess liquidity. On a quarter-on-quarter basis, the same is seen around 3 percent on account of the lockdown imposed in certain states and conservative approach of banks," Narnolia Financial Services said. - Moneycontrol
🍒 Federal Bank, Kotak Mahindra Bank launch festive campaigns : Ahead of the upcoming festive season, Federal Bank and Kotak Mahindra Bank have also launched special campaigns for their customers with cheaper loans and discounts. As part of the 2020 Edition of Khushi Ka Season, Kotak Mahindra Bank is offering home loans starting at seven per cent per annum and savings of up to Rs 20 lakh on balance transfer cases. It is also offering 50 per cent waiver on processing fee on car loans and two wheeler loans as well as a similar waiver on agri business, commercial vehicle and construction equipment finance. Federal Bank has launched Fed Fiesta which provides a range of discounts, cashbacks and offers on shopping. - Business Line
🍒 IDBI Bank launches banking services on WhatsApp : IDBI Bank on Friday announced the launch of banking services on WhatsApp. The WhatsApp Banking service is being offered through a dedicated WhatsApp verified number ensuring end-to-end encryption, the Bank said in a statement. The facility will enable IDBI Bank customers to avail various essential services such as account balance information, last five transactions, request for a cheque book and an email statement, interest rates, as well as details of IDBI Bank branches/ATMs in the vicinity, to begin with. - Business Line
🍒 Kotak Mahindra Bank launches festive offers to woo borrowers : Kotak Mahindra Group on Friday flagged-off this year’s festive season celebrations by announcing the launch of the 2020 edition of Khushi Ka Season. Kotak is offering customers attractive loan rates, loan processing fee waivers and quick online loan approvals on a range of retail and agri loan segments.Customers can avail special offers on other banking products including savings accounts, debit & credit cards and no-cost EMI payments. Further, Kotak is partnering leading ecommerce players such as Amazon.in and Flipkart with exciting offers for Kotak debit and credit cardholders. - economic times
🍒 Federal Bank Q2 net profit falls 26% on sharp rise in provisions : Private sector lender Federal Bank registered a 26.2 per cent drop in its net profits in the second quarter of the fiscal with a sharp rise in its provisions. The bank reported a net profit of ₹307.62 crore for the quarter ended September 30, 2020 as against ₹416.70 crore a year ago. Its net profit was ₹400.77 crore in the first quarter this fiscal. Its total income increased by 8.8 per cent to ₹3,997.23 crore in the July to September quarter this fiscal versus ₹3,675.17 crore a year ago. Its net interest income rose by 22.8 per cent to ₹1,379.87 crore in the second quarter this fiscal as against ₹1,123.77 crore a year ago. Net interest margin stood at 3.13 per cent as on September 30, 2020. “The bank could deliver the highest ever operating profit, which crossed ₹1,000 crore for the first time in its history. Low risk and a high yielding product like gold loan registered handsome growth,” said Shyam Srinivasan, Managing Director and CEO, Federal Bank, adding that it continues to weather the turbulence in the external environment by returning strong numbers for CASA and asset quality. - Business Line
🍒 Covid impact: South Indian Bank’s Q2 profit dips to ₹65.09 crore : The Covid pandemic seems to have taken a toll on South Indian Bank’s net profit in Q2 of the current fiscal, which was down at ₹65.09 crore against ₹84.48 crore in the corresponding period of the previous year. The net profit in Q1 of the current fiscal was ₹81.65 crore. However, the operating profit for the second quarter has grown marginally from ₹411.45 crore to ₹413.97 crore. Murali Ramakrishnan, who recently took over as Managing Director and CEO, said the bank has conservatively provided ₹24 crore of extra provisioning towards accounts which has technically become NPA due to government direction. This is one of the reason for a reduction in net profit. - Business Line
🍒 Now, PMC depositors seek bank merger to access cash : After literally moving heaven and earth for the last 13 months to find a resolution to scam-hit Punjab and Maharashtra Cooperative (PMC) Bank, the PMC Depositors Forum has now approached its Administrator with a proposal to get the bank merged with either a public sector bank (PSB) or a strong private sector bank in a bid to get access to their hard-earned money. The forum has liaised with the central bank, Finance Ministry and politicians cutting across party lines, among others, and its members, including many senior citizens, even took to the streets amid the raging Covid-19 pandemic to draw the attention of the authorities to their struggle for survival but to no avail. - Business Line
🍒 Micro-credit collections in East, N-E lagging national average : Repayments by microcredit borrowers in the eastern and north-eastern regions, who have been hit by the dual impact of pandemic and natural calamities,is currently lower than the national average. As per estimates available, the collection efficiency in the eastern and north-eastern region, is lower by 5-6 percentage points when compared to the national average. “After the end of the moratorium (in August), the performance (of this region) has been encouraging, but due to several reasons it is not at par with some of the other well-performing States. There are also some local-level disturbances (which is impacting collections). September was the first month after moratorium, so we still don’t have the data ready. But based on what we are hearing from institutions, it is currently lower by about 5-6 percentage points,” Alok Misra, CEO, Microfinance Institutions Network (MFIN), told BusinessLine. - Business Line
🍒 Bank loan fraud: ED attaches over Rs 122-crore assets of DCHL, ex promoters : Assets worth over Rs 122 crore belonging to Deccan Chronicle Holdings Limited (DCHL) and its former promoters have been attached under the anti-money laundering law in connection with an alleged bank loan fraud case, the Enforcement Directorate (ED) said on Friday. A total of 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, Bangalore and a few other places that belong to DCHL, its former promoters T Venkatram Reddy and T Vinayakravi Reddy and that of a benami company “floated by them” have been attached, the central probe agency said in a statement. The company at present is under corporate insolvency resolution process but the attached properties are not covered under the process being adjudicated by the national company law tribunal (NCLT), the agency claimed. A resolution plan for only Rs 400 crore has been approved by the NCLT. The total loan fraud committed by DCHL and its promoters is estimated to be at Rs 8,180 crore, it claimed. - financial express
🍒 Demand for home loans on the rise ahead of the festival season : Leading financial institutions are seeing demand picking up for home loans and expect the momentum to gather pace in the festival season aided by the RBI’s latest announcement on rationalising the risk weights for all new housing advances until March 31, 2022 and linking them to the loan-to-value (LTV). The new-home-loan market is showing some signs of recovery in the run-up to the festival season, though the commercial realty market is likely to remain subdued for some more time. “For the quarter ended September 30, individual loan disbursements were at 95 per cent of the level in the corresponding previous period. Even our individual loan approvals grew sharply by 31 per cent year-on-year, which shows that new and fresh decisions are being taken by home buyers, thus reflecting their confidence,” said Renu Sud Karnad, Managing Director, HDFC Ltd.- Business Line
🍒 Jana Bank to be sponsor bank for Ashoknagar Co-operative Bank : Jana Small Finance Bank, a Bengaluru-based small finance bank (SFB), has partnered with Ashoknagar Co-operative Bank Limited under the bank sponsorship programme. With this, Jana Bank has become the first SFB to go live under the sponsorship programme. Recently, the RBI permitted co-operative banks that are Core Banking Solution (CBS)-enabled, to issue ATM cards/ATM-cum-debit cards in a tie-up with a sponsor bank. Ashoknagar Co-operative Bank Limited, in association with Jana Small Finance Bank, can extend ATM, POS and e-commerce services to its customers. This association marks the fulfilment of Jana Bank’s endeavour to promote a full suite of services to co-operative banks. - Business Line
🍒 Thanks to RBI’s policy moves, the ₹20,000-crore OMO sails through : The slew of liquidity measures announced by the RBI in its recent October policy, it appears, are already easing bond market concerns. Not only has the 10-year government bond yield moved lower notably to 5.89 per cent levels, but the RBI’s ₹20,000-crore outright OMO (open market operations) purchase auction also sailed through, after the last auction had failed. The RBI received bids to the tune of ₹1.13-lakh crore against the notified OMO purchase of ₹20,000 crore on October 15. It accepted ₹6,600 crore amount for the six-year bond at a cut-off yield of 5.56 per cent, ₹5,177 crore for eight-year bond at 5.89 per cent, ₹3,475 crore for the 10-year bond at 5.86 per cent and ₹4,748 crore for 13-year bond at 6.3 per cent. The cut-off for the 10-year bond yield coming in lower than 6 per cent levels at 5.86 per cent, is indicative of the comfort that bond market is drawing from the RBI’s recent policy moves.- Business Line
🍒 Uday Kotak says now’s best time to invest in India : Overseas investors should look to invest in Indian digital to consumer sector companies now as the economic fallout of the coronavirus pandemic makes valuations of businesses attractive, Asia’s richest banker said. “I have always believed you have to invest in India when things look more challenging,” Uday Kotak, the managing director of Kotak Mahindra Bank Ltd said in a conversation with David Rubenstein, the co-founder of Carlye Group Inc at the Bloomberg India Economic Summit on Thursday. “That’s the best time to put your money to work.” - Business Line
🍒 LIC IPO: RFP soon to appoint actuary to determine shareholder value : The Department of Investment and Public Asset Management (DIPAM) will soon issue a Request for Proposal (RFP) to appoint an actuary for determining the Indian Embedded Value (IEV) for Life Insurance Corporation of India. The IEV is a measure of the consolidated value of shareholders’ interest in the life insurance business within the meaning of the Insurance Act, 1938, and applicable IRDAI regulations. “IEV is one of pre-condition of the IPO for LIC and that needs to be determined by an independent actuary,” a top Finance Ministry official told BusinessLine. - Business Line
🍒 SC refuses to entertain plea against writing down of AT-1 bonds by Yes Bank : The Supreme Court has refused to entertain a plea of over 340 persons challenging the writing down of additional tier-1 (AT-1) bondholders’ Rs 8,419 crore investment in Yes Bank in March 2020 as part of a plan to revive the cash-strapped private bank. The apex court said the issue can be raised before the concerned high court. We decline to entertain the petition under Article 32 of the Constitution since the petitioners are at liberty to adopt appropriate remedies available in law, including by virtue of a petition under Article 226 of the Constitution (before the High Court), a bench comprising Justices D Y Chandrachud, Indu Malhotra and Indira Banerjee said. - financial express
🍒 Labour Ministry dismisses reports of new CPI-IW series leading to pay hike of employees : The labour ministry on October 16 dismissed media reports that the launch of new series of Consumer Price Index for Industrial Workers (CPI-IW) would lead to a hike in salaries of government employees and industrial workers. The CPI-IW is used primarily for measuring Dearness Allowance (DA) payable to workers in the organized sector including PSUs, Banks and Insurance companies besides government employees. - moneycontrol.
🍒 Forex reserves rise by $5.867 billion to lifetime high of $551.505 billion : The country’s foreign exchange reserves surged by $5.867 billion to touch a record high of $551.505 billion in the week to October 9, according to the RBI data. In the previous week ended October 2, 2020, the reserves had increased by $3.618 billion to $545.638 billion. During the reporting week, the increase in forex kitty was on account of rise in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $5.737 billion to $508.783 billion. - moneycontrol.
🍒 Rupee close: INR ends flat at 73.35 against USD : The rupee on Friday settled almost flat at 73.35 against the US dollar in the absence of any fresh trigger. At the interbank forex market, the rupee opened at 73.41 against the greenback, and after witnessing a volatile trading session closed at 73.35, higher by just 1 paisa from its previous close of 73.36.
🍒 Sensex jumps 254 points led by metals, banking stocks : quity benchmark BSE Sensex held on to its early gains and ended 254.57 points higher at 39,982.98 on Friday, led by intense buying mainly in metals, banking and IT counters. Likewise, the broader NSE Nifty surged 82.10 points or 0.70 per cent to close at 11,762.45. On the Sensex chart, IndusInd Bank, Tata Steel, Infosys, ONGC, Kotak Bank, NTPC and Bharti Airtel were among prominent gainers. Of the 30 Sensex constituents, 24 stocks have advanced in the green, while six stocks have declined. Gold prices rise Rs 242 to Rs 50,905/10 gm, silver up Rs 1,399/kg : Gold prices rose by Rs 242 to Rs 50,905 per 10 gram in the Mumbai retail market on a weaker dollar and lacklustre global cues. The precious metal is up Rs 27, or 0.05 percent, this week. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,179, Rs 46,629 and Rs 50,905, respectively, plus 3 percent GST. Silver prices jumped Rs 1,399 to Rs 61,558 per kg from its closing on
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