29.09.2020: Today's Banking / Financial News

29.09.2020: Today's Banking / Financial News

🍒 RBI postpones MPC meeting scheduled to begin tomorrow : The Reserve Bank of India (RBI) on Monday said the meeting of the Monetary Policy Committee (MPC), scheduled for September 29, 30 and October 1, 2020, is being rescheduled. The central bank did not cite any reason for the rescheduling the MPC’s meeting. It only said the fresh dates will be announced shortly. The August MPC meeting was the last one for external members Chetan Ghate, Professor, Indian Statistical Institute; Pami Dua, former Director, Delhi School of Economics; and Ravindra H. Dholakia, former Professor, Indian Institute of Management, Ahmedabad, who were appointed to the committee for a four-year term in 2016.- Business Line

🍒 SBI to waive processing fee on YONO loans, offers 10 bps off on home loans : In order to boost credit demand in the upcoming festive season, the State Bank of India will waive off processing fee for customers applying for car, personal and gold loans through digital banking platform YONO. It will also give a concession of upto 10 basis points (bps) on home loans. The country’s largest lender is offering the lowest interest rate starting from 7.5 per cent to customers opting for car loans. They will also get 100 per cent on-road finance on select models, SBI said in a statement. The lender's retail advances grew by 12.85 per cent (year-on-year) in the June quarter (Q1Fy21). Home loans, which constitute 22 per cent of the bank’s domestic advances, have grown by 10.72 per cent. - Business Standard.

🍒 RBI likely to keep rates unchanged : The Reserve Bank of India (RBI) is likely to keep interest rates unchanged in the monetary policy committee (MPC) meeting this week, according to a Mint survey of economists and bankers. Respondents to the poll—10 eminent economists and senior bankers—were unanimous that curbing inflation, currently hovering above 6%, remains the primary concern of the MPC. “We do not expect RBI to cut the policy rate while keeping its stance accommodative. It could instead focus on its intention to keep bond yields contained and announce plain vanilla OMOs (open market operations) or further Operation Twists," said Abheek Barua, chief economist at HDFC Bank Ltd. - Live Mint

🍒 RBI extends enhanced borrowing limit for banks under MSF till Mar 31 : Amid the ongoing economic woes created by the coronavirus pandemic, the Reserve Bank has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021. The RBI, as a temporary measure, had increased the borrowing limit for scheduled banks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020. The facility, which was initially available up to June 30, 2020 was later extended up to September 30, 2020 in view of the disruptions caused by the COVID-19 pandemic. - economic times

🍒 RBI approves panel of directors to run day-to-day affairs at LVB : The Reserve Bank of India stepped in to address issues at Lakshmi Vilas Bank on Sunday, approving a Committee of Directors (CoD), composed of three independent directors, who would run the day-to-day affairs of the lender. "This CoD will exercise the discretionary powers of Managing Director and CEO in the ad-interim and is composed of Meeta Makhan - Chairperson of the Committee of Directors, Shakti Sinha - Member and Satish Kumar Kalra - Member," the private sector lender said in a regulatory filing. - Business Line

🍒 ‘Merger or strategic investor could turn around loss-making Lakshmi Vilas Bank’s fortunes’ : A possible merger with a stronger bank or the culmination of its proposed investment from Clix Group are two possible ways ahead for-crisis ridden Lakshmi Vilas Bank with experts pointing out that apart from balance sheet problems, the private sector lender has also faced governance issues. “This whole issue has been allowed to fester for a while. The. bank is past it’s ‘best before date’, and vote is a signal that investors have sent to RBI (Reserve Bank of India) to find a solution to this. Regarding the progress of the deal with Clix Group it will depend on who was negotiating it - the erstwhile CEO, the erstwhile board members or the RBI representatives. Depending on the answer, we will know whether it will continue or has to start afresh,” said Amit Tandon, founder and Managing Director of corporate governance and proxy advisory services, IiAS.- Business Line

🍒 Dhanlaxmi Bank tussle may hit customers, small investors : The tug of war between Dhanlaxmi Bank’s large individual shareholders with roots in Kerala and the new management that is keen on roping in new shareholders, is apparently the reason the old generation private sector Bank is currently in a state of flux. The All-India Bank Employees’ Association (AIBEA) had sought the intervention of the Reserve Bank of India in the affairs of the bank, stating that the new top management may be headed in the wrong direction, with its attempts to open more branches in northern States. Though the Thrissur (Kerala) headquartered bank has recorded continuous profits for the last nine quarters and has a healthy capital position, shareholders feel the ongoing tussle could adversely affect the interests of the majority of the bank’s customers in Kerala and small investors. As at June-end 2020, Dhanlaxmi Bank’s large individual shareholders included B Ravindran Pillai (10 per cent stake), CK Gopinathan (7.50 per cent), Kapilkumar Wadhawan and Yussuffali Musliam Veetil Abdul Kader (5 per cent each). - Business Line

🍒 DHFL moves NCLT over disbursements for 2 SRA projects : With the report of the Transaction Auditor revealing a monetary impact of ₹12,705.53 crore, the Administrator of scam hit Dewan Housing Finance Corporation Ltd (DHFL) has filed an application in respect of disbursements made towards the development of two SRA (Slum Rehabilitation Authority) projects. Also read: Forensic audit findings on DHFL. “Basis the investigation and observations of the Transaction Auditor, the Administrator has filed an application in respect of disbursements made towards the development of two SRA projects, before the Mumbai Bench of the National Company Law Tribunal … on September 27, 2020 against Kapil Wadhawan, Dheeraj Wadhawan, the developers and assignees of the SRA projects,” DHFL said in a regulatory filing on Monday. “The Application is in relation to certain irregularities in loan disbursements towards development of SRA projects, undertaken by the company in the past,” it further said. - Business Line

🍒 Paytm Money starts stockbroking business : Homegrown digital financial services platform Paytm on Monday announced that its wholly-owned subsidiary Paytm Money has opened stockbroking access for everyone in the country. “The company aims to onboard over 10 lakh investors this fiscal with the majority of them first-time users from small cities and towns,” it said in a statement, adding that it aims to drive higher penetration in investing with an easy-to-use product, low pricing and digital KYC with paperless account opening. Paytm Money has registered over 2.2 lakh investors, of which 65 per cent of users are in the age group of 18 to 30 years.- Business Line

🍒 NCLAT may reconsider its 5-member bench ruling on debt acknowledgement for insolvency plea : Appellate tribunal NCLAT may reconsider its own judgement passed by a five-member bench on the acceptability of debt entered in the balance sheet of a company for deciding the time frame for initiating insolvency proceedings. The issue pertains to whether entries in the balance sheet can be treated as an acknowledgement of debt for the purpose of calculating the three-year period limitation in terms of applicability of Section 18 of the Limitation Act, 1963. Limitation Act is also applicable for proceedings under the Insolvency and Bankruptcy Code (IBC). - economic times

🍒 Chinese banks to start enforcement action against Anil Ambani’s worldwide assets : The three e Chinese banks to whom Anil Ambani owes more than $716 million (Rs 5,276 crore), as well as significant legal costs, have decided to pursue their rights against him on his worldwide assets, following the beleaguered Reliance Group chairman’s English high court cross-examination on Friday. Once the world’s sixth-richest person, Ambani was ordered by a UK court on May 22 this year to pay $716 million (Rs 5,276 crore) including interest and £750k (Rs 7.04 crore) in legal costs to the Industrial and Commercial Bank of China, Export-Import Bank of China and China Development Bank. By June 29, the debt he owed, after taking accrued interest into account, had risen to $717.67 million.- economic times

🍒 SC adjourns loan moratorium interest case to October 5 : The Supreme Court on Monday adjourned the hearing on relief for the loan moratorium issue till October 5 as the government submitted that a decision on relief will be taken soon. According to the daily order of the court, Solicitor General Tushar Mehta submitted that the issues are under active consideration of the Government of India and, only after a decision is taken, an affidavit along with the decision can be filed. “The affidavit will be sent by October 1 through email to the appearing counsel,” he told the Bench comprising Justices Ashok Bhushan, R Subhash Reddy and MR Shah. - Business Line

🍒 Fake currency notes worth Rs 1 crore deposited in RBI : Fake currency notes worth Rs 1 crore have been deposited in various banks which then deposited the same in the Reserve Bank of India. The assistant manager of Reserve Bank of India in Lucknow’s Metropolitan Kotwali has filed a complaint after fake notes worth Rs 1 crore were deposited in several banks between 2017 and 2018. Assistant manager Ranjana Maravi said 15,436 fake notes were deposited in the currency chest of the Reserve Bank of India between October 2017 and March 2018. During the investigation, 9,753 notes of Rs 500 and 5,783 notes of Rs 1,000 were found to be fake. The total fake notes recovered are close to Rs 1.05 crore. Ranjana Maravi has also asked the metropolitan police to conduct a forensic examination of the seized notes. - tribune

🍒 Lenders give clean chit to Reliance Commercial Finance as GT audit finds no fraud : A group of lenders, including the National Bank for Agriculture and Rural Development (Nabard), has given clean chit to Reliance Commercial Finance Ltd (RCFL), the NBFC arm of Reliance Capital, after an independent forensic audit report from Grant Thornton did not detect any fraud in the RCFL account. As per the report, of the total consolidated debt owed to banks, RCFL accounted for Rs 11,620 crore, Reliance Home Finance Ltd (RHFL) Rs 7,430 crore and Reliance Capital (standalone) Rs 6,750 crore of debt. The consolidated debt includes term loans, cash credit and non-convertible debentures. Last year, lenders had given a go-ahead to appoint Grant Thornton to conduct a forensic audit of two Reliance Capital arms, the listed-RHFL and RCFL. According to banking sources, the consortium of lenders led by Bank of Baroda has accepted the forensic audit report submitted by Grant Thornton, which indicates that no fraud has taken place. It is to be noted that appointment of auditor is part of the standard operating procedure for all companies going through the ICA (inter-creditor agreement) process, and is a mandatory requirement under the guidelines laid down by the Reserve Bank of India. Sources further said that clean chit has been given to RCFL as the lenders have accepted the audit report. - financial express

🍒 Gold prices dip marginally to Rs 49,757 per 10 gram; silver gains Rs 594 : Gold prices fell marginally by Rs 89 to Rs 49,757 per 10 gram in the Mumbai retail market on rupee depreciation, weak global cues and rally in the equity market. The precious metal traded under pressure as investors are awaiting the US presidential election debate and key data from China. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,577 plus 3 percent GST, while 24-carat 10 gram was Rs 49,757 plus GS 

T. The 18-carat gold quoted at Rs 37,318 plus GST in the retail market. Silver prices gained Rs 594 to Rs 58,071 per kg from its closing on September 25.

🍒 Rupee opens on a flat note versus dollar : The rupee started the session on a flat note against the dollar, opening at 73.68 from the previous close of 73.67 levels. It has been trading in the band between 73.56 and 73.68 for the session. After taking support at around 73.8, the rupee started to strengthen and appreciated to 73.5 levels. As long as the key support level of 73.8 holds, the near-term view will remain positive for the session. A strong move beyond 73.55 can take the INR to 73.3 and then to 73 levels in the short term.

🍒 Sensex rallies 593 points; financial, auto stocks take charge : The 30-share BSE Sensex settled 592.97 points or 1.59 per cent higher at 37,981.63, while the NSE Nifty surged 177.30 points or 1.60 per cent to 11,227.55. In the Sensex pack, IndusInd Bank was the top gainer, soaring around 8 per cent, followed by Bajaj Finance, Axis Bank, PowerGrid, ONGC, ICICI Bank, Sun Pharma and M&M.On the other hand, HUL, Infosys and Nestle ended in the red. “Key indices ended high as bulls led the charge backed by financials and well supported by auto and pharma stocks,” said S Ranganathan, Head of Research at LKP Security

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. 

24.09.2020: Today's Banking / Financial News

24.09.2020: Today's Banking / Financial News at a Glance

🍒 RBI says it has no information on loans of top 100 wilful defaulters written off by banks :The Reserve Bank of India said it has no information about loans of the top 100 defaulters and wilful defaulters that banks had written off, just over four months after it had put the total write-off of the largest 50 wilful defaulters at Rs 68,600 crore. “The information sought is not available with us,” the central bank said in a recent response to an RTI petition by a Kolkata-based activist, who had sought details on the loans that had been written off, along with the amount that each of the 100 defaulters and wilful defaulters had owed to banks and the period when the loans to them had been sanctioned and disbursed. “No defaulter information is collected as such by us,” the RBI said, responding to another query, which was part of an RTI petition. ET has seen a copy of the RBI response dated August 31. - Economic Times

🍒 No clamour or rush for restructuring of loan: SBI Chairman, Rajnish Kumar : Contrary to market expectations, there was not too much demand or clamour for restructuring of loans as permitted by RBI recently to beat the COVID-19 related stress, SBI Chairman Rajnish Kumar said. He expects not more than Rs 1.5 lakh crore worth loans would avail restructuring benefit even though people have projected it to be around Rs 8 lakh crore. "On the banking side, what I am saying, there is not too many demand. It may be contrary to what the public discourse is. Reasons could be many. One is lot of clean-up has already happened and lot of deleveraging done. More than the banks, corporates themselves are reluctant to carry the tag of restructuring. That is the feeling I am getting," he said.- Economic Times

🍒 SBI to levy 1% more on working capital under debt restructuring : State Bank of India will charge 1 per cent above the current pricing on working capital loans for limits sanctioned under the resolution framework. Any concessions provided during the resolution period will result in right of recompense (compensation for loss). There will be a change in pricing to offset the cost of additional provisions that the bank has to make for extending the benefits under the resolution, according to SBI’s frequently asked questions for debt recast for non-personal segment. Promoters of units or firm will have to bring in minimum contribution (capital infusion) of 10- 15 per cent of the additional loan facilities sanctioned under the resolution plan. - Business Standard

🍒 55% of customers may seek loan recast: Paisabazaar survey : More than half the customers may approach their banks for loan restructuring, although 40 per cent of those who took the moratorium could afford to pay their EMIs, a new survey by Paisabazaar.com has found. “Fifty-five per cent of the customers responded that they would approach their lender to restructure their loan in some form to provide relief. Though this includes many whose income has not been affected due to the coronavirus pandemic and, hence, their lenders may not find them eligible for a loan recast plan,” said the survey report ‘Dealing with Debt - How India plans to pay EMIs’. A total of 8,616 participants, in the age group of 24-57 years, responded to the survey and had outstanding debt of over ₹1 lakh. The responses were registered from 37 cities. - Business Line

🍒 IDFC First Bank to launch contactless debit card facility next week : IDFC First Bank on Wednesday said it will launch contactless debit card-based payment facility, SafePay, next week allowing transactions up to Rs 20,000 per day. IDFC First Bank is set to launch the digital facility that will allow payments by simply waving one's smartphone against a near field communication (NFC)-enabled PoS terminal, the bank said in a release. Users can simply wave, pay and go, making the payment process not only touch-free but also faster, simpler and safer, it said. The bank also claimed it is the first such facility to be made available in an integrated mobile banking app. - Business Standard

🍒 Compliance officer for banks prescriptive, not right thing: Ex-SBI MD : The prescriptive way of having a dedicated compliance officer is not the right thing and by initiating such a move, which is in line with other countries, the Reserve Bank is making the compliance function as the overall incharge of a lender, a senior banker said on Tuesday. V G Kannan, who served as the chief executive of industry lobby Indian Banks Association till recently after retiring as the managing director of SBI, said the risk function is as important and it cannot be equated with that of compliance. Earlier this month, the RBI asked banks to appoint chief compliance officers (CCO) with a view to getting uniformity in the approach followed by lenders. "The prescriptive way of having a compliance officer may not be the right thing. It should be left to the individual organization depending on their perception of the risks, Kannan said speaking at a NSE webinar. He explained that some banks can be absolutely compliant even without such an officer and also made it clear that he does not wish the banks to be completely non-compliant as well. - Business Standard

🍒 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. Customers can visit the bank’s website or contact the relationship manager to fill the application. “The link for application will be updated shortly,” it further said. - Business Line

🍒 HDFC to raise up to Rs 5,000 crore by issuing bonds : Mortgage lender Housing Development Finance Corporation Ltd (HDFC) on September 23 said it will raise up to Rs 5,000 crore by issuing bonds on a private placement basis. The issue size for the secured redeemable Non-Convertible Debentures (NCDs) will be Rs 2,500 crore with an option to retain oversubscription of up to Rs 2,500 crore, HDFC Ltd said in a regulatory filing. - Moneycontrol.com

🍒 Parliament passes Labour Bills, making it easier for employers to hire and fire workers : Parliament on Wednesday passed the three key labour reform bills that will provide greater flexibility to employers to hire and fire while ensuring social security for workers. The three bills---- Code on Occupational Safety, Health and Working Conditions, Industrial Relations Code and Social Security Code, were passed in the Upper House by voice vote amid boycott by the opposition over suspension of eight members. Replying to the debate on the three labour reforms bills in the house, labour Minister Santosh Gangwar said: "The purpose of labour reforms is to provide a transparent system to suit the changed business environment."- Economic Times

🍒 A year later, PMC Bank depositors still struggling to get their money back : For depositors of the tainted Punjab and Maharashtra Cooperative (PMC) Bank, the situation is not very different from what it was almost a year ago when the RBI placed withdrawal restrictions on the bank after the mega scam involving misreporting of loans with senior bank officials' involvement came to light. Exactly one year ago, on September 23, 2019, the Reserve Bank of India had superseded the board of the multi-state urban cooperative bank and placed it under various regulatory restrictions after detection of certain financial irregularities. Initially, the RBI had allowed depositors to withdraw Rs 1,000 which was later raised to Rs 1 lakh per account to mitigate their difficulties. In June this year, the RBI had extended the regulatory restrictions on the cooperative bank by another six months till December 22, 2020. - Business Standard

🍒 Morgan Stanley Fund bets big on private banks in India : A Morgan Stanley fund is betting some private-sector lenders in India will emerge from the coronavirus pandemic stronger than others. Kristian Heugh, co-manager of the $4.3 billion Asia Opportunity fund, expects private banks with strong deposit franchise and quality underwriting standards will gain market share from both state-owned lenders and the weaker private ones. “The events of this year are likely to accelerate both these factors strong banks will gain share at a faster pace and the pace of digital adoption has picked up sharply,” Heugh said in an interview. His Asia excluding Japan-focussed equity fund was up 37 per cent this year through August. - Business Line

🍒 JP Morgan says India making progress on global debt index debut : Measures taken by Prime Minister Narendra Modi’s government in opening the sovereign debt market to foreigners have boosted prospects for inclusion in major global indexes, according to JPMorgan Chase & Co. “India is making progress toward opening up its market to foreign investors and establishing a track record for future inclusion in major bond indices, including the GBI-EM Global Diversified Index,” JPMorgan Index Research Team said by email. Reuters on Monday reported JPMorgan had kept Indian bonds out of its flagship indexes. - Business Line

🍒 UTI AMC to launch Rs 3,000 crore-IPO on September 29; SBI, LIC, T Rowe to divest stake : UTI Asset Management Company will launch its initial public offering for subscription on September 29. The company plans to raise Rs 3,000 core via the issue, sources pivy to the matter told Moneycontrol. The public issue will consist of an entire offer for sale of 3,89,87,081 equity shares by State Bank of India, Life Insurance Corporation of India (LIC), Punjab National Bank, Bank of Baroda and T Rowe Price International. State Bank of India, LIC and Bank of Baroda are going to divest 1,04,59,949 equity shares each, while PNB and T Rowe Price International 38,03,617 equity shares each via offer for sale. - Moneycontrol.com

🍒 SEBI bars DHFL promoters from accessing securities market : The Securities and Exchange Board of India (SEBI) has barred the promoters of Dewan Housing Finance Corporation Ltd (DHFL) from accessing the securities market or even associating themselves with any listed company. “The promoters of DHFL during the period from April 1, 2006 to March 31, 2019 namely — Kapil Wadhawan, Dheeraj Wadhawan, Rakesh Kumar Wadhawan, Sarang Wadhawan, Aruna Wadhawan, Malti Wadhawan, Anu S Wadhawan, Pooja D Wadhawan, Wadhawan Holding Pvt Ltd, Wadhawan Consolidated Holding Pvt Ltd, Wadhawan Retail Venture Pvt Ltd and Wadhawan Global Capital Ltd (formerly known as Wadhawan Housing Pvt Ltd) — are restrained from accessing the securities market and are further prohibited from buying, selling or otherwise dealing in securities in any manner whatsoever, either directly or indirectly,” SEBI said in its interim ex-parte order. - Business Line

🍒 RBI to intervene to prevent Rupee gains despite signs of leniency: ICICI : India’s central bank will continue to intervene to prevent any sharp appreciation in the rupee, even after signs of leniency toward currency gains in recent weeks, according to ICICI Bank Ltd. The Reserve Bank of India’s forex strategy has been in sharp focus after it stepped away from dogged dollar buying amid large inflows. The perception that the RBI was easing back on greenback purchases was accentuated by a rare comment from policy makers in late August that the appreciating rupee had helped tackle imported inflation. Inflation has spiked in India, with the headline figure above the upper 6% limit of the RBI’s tolerance band for five months. The central bank has a fine balancing act: It is trying to keep liquidity adequate as the economy slumps, while managing large capital flows and trying to keep inflation in check. “We believe that RBI is cognizant of the fact that an overvalued rupee is an adverse terms of trade for local industries and given the challenges on the growth front, a sharp appreciation of the rupee is not desirable,” said B. Prasanna, group head for global markets sales, trading and research at ICICI Bank Ltd. in Mumbai. - Business Standard

🍒 Gold prices slip for third day in a row to touch Rs 50,327 per 10 gram; silver tanks Rs 1,059 : Gold prices gained for the third straight day by Rs 356 to Rs 50,327 per 10 gram in the Mumbai retail market on firm US dollar and weak global cues. The precious metal prices fell below $1,900/oz on global uncertainties over rising coronavirus cases and delay in fiscal stimulus. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,100 plus 3 percent GST, while 24-carat 10 gram was Rs 50,327 plus GST. The 18-carat gold quoted at Rs 37,745 plus GST in the retail market. Silver prices declined by Rs 1,059 to Rs 58,908 per kg from its closing on September 22.

🍒 Rupee gains marginally against US dollar : The rupee appreciated by one paisa to close at 73.57 (provisional) against the US dollar on Wednesday, as investors turned cautious amid weak domestic equities. At the interbank forex market, the rupee opened weak at 73.59 against the greenback and moved in a close range. It finally settled one paisa lower at 73.57 against the American unit.

🍒 Central Bank of India drops over 5% on QIP plan : The floor price for Central Bank of India's share sale through a qualified institutional placement, which opened on Tuesday, has been set at ₹16.18 apiece. The Bank board will meet on Friday to consider and approve the issue price for equity shares to be allotted to qualified institutional buyers, it said in a notice to the stock exchanges. Earlier, the State-owned Central Bank of India said it would raise up to ₹5,000 crore of equity capital through various modes, including follow on public offer, rights issue or QIPs, to maintain its capital adequacy ratio. The shares of the bank dropped over 5 per cent to trade at ₹16.35.

🍒 Sensex, Nifty end marginally lower; Bharti Airtel down 8% : Extending its losses for the fifth straight session, equity benchmark Sensex ended 66 points lower on Wednesday, tracking weakness in Bharti Airtel, TCS and Bajaj Finance despite mostly positive cues from global markets. After opening on a positive note, the 30-share BSE index pared all intra-day gains to settle 65.66 points or 0.17 per cent down at 37,668.42. Similarly, the NSE Nifty fell 21.80 points or 0.20 per cent to close at 11,131.85. Bharti Airtel was the top laggard in the Sensex pack, tanking around 8 per cent, followed by Tata Steel, IndusInd Bank, NTPC, PowerGrid, ONGC and TCS. On the other hand, Axis Bank, HUL, Infosys, Nestle India and HDFC Bank were among the gainers.

23.09.2020 Banking / Financial News

23.09.2020 Banking / Financial News

🍒 Central Bank sets QIP floor price at ?16.18 apiece : Central Bank of India launched its fund-raising exercise on Tuesday through a qualified institutional placement. The floor price has been set at ?16.18 per equity share for the QIP. “…the capital-raising committee of the bank has, at its meeting held on September 22, passed the following resolutions – approved and adopted the preliminary placement document …, approved the opening of the QIP on September 22, 2020; and approved the floor price of ?16.18 per equity share for the QIP,” it said in a regulatory filing. The capital-raising committee of its board will meet again on September 25 to consider and determine the issue price for the equity shares to be allotted to qualified institutional buyers, it further said. On Tuesday, the bank’s scrip closed 14.29 per cent higher at ?17.20 apiece on the BSE. - Business Line

🍒 Indian Parliament passes bill to bring cooperative banks under RBI's supervision : Parliament on Tuesday passed amendments to the Banking Regulation Act to bring cooperative banks under the supervision of the RBI, a move aimed at protecting the interest of depositors.The Banking Regulation (Amendment) Bill, 2020, which replaces an ordinance that was promulgated on June 26, was passed by a voice vote in Rajya Sabha. The amendment had got approval from Lok Sabha on September 16. The bill, which comes in the backdrop of the PMC Bank scam, seeks to strengthen cooperative banks by increasing their professionalism, enabling access to capital, improving governance and ensuring sound banking through the RBI.Replying to a short debate on the bill in Rajya Sabha, Finance Minister Nirmala Sitharaman said the amendments have been brought to completely protect the interest of depositors. She clarifies this amendment is only for cooperative societies engaged in banking activities. "During the COVID period many cooperative banks have come under stress. Their finances are being closely monitored by the regulator RBI," Sitharaman said. - economic times

🍒 Rate cuts have not spurred investment: SBI Chairman Rajnish Kumar : State Bank of India chairman Rajnish Kumar on Tuesday said that interest rate cuts had not led to an increase in investment, despite the banks passing on the rate cuts to the customers. Speaking at the 47th National Management Convention of the All India Management Association (AIMA), Kumar said that credit growth had been slow this year as capex was not happening at the usual pace. He pointed out that in the last crisis in 2008, banks had increased lending by diluting norms and the country had paid a high price for that, so banks were being prudent this time. - economic times

🍒 Corporates reluctant to go in for loan restructuring: SBI chief : SBI Chairman Rajnish Kumar, on Tuesday, said there has not been too much of rush for loan restructuring so far as announced by the Reserve Bank of India. According to him, more than banks, corporates are reluctant to go for restructuring. Hence, there might not be much demand for restructuring among corporates; however, there might be some demand from the lower end of corporates or from the MSME segments. “From the banking side, what I am seeing is that there is not too much demand (for corporate restructuring). It may be contrary to what the public discourse is, but as of now, the reasons could be many. One is, of course, a lot of clean up has already happened. In the capital, a lot of deleveraging has also happened. And more than banks, corporates are reluctant to go for restructuring. That is the feeling I am getting,” said Kumar at the banking colloquium organised by CII on Tuesday. - Business Line

🍒 PSBs get more retail credit inquiries than private banks during Jul-Aug: Report : The state-run lenders are seeing faster pick up in retail credit inquiries than their private counterparts on quicker reopening of branch network, a report by a credit information company (CIC) said on Tuesday. Despite the inroads done by digital alternatives, through which lenders are receiving inquiries and even disbursing loans online, branch offices continue to play an important role, Transunion Cibil said in the report. The lenders get in touch with CICs while doing diligence on every credit proposal, which triggers in inquiries. It can be noted that many analysts have said that a large share of the incremental credit demand is coming from the more aggressive private sector lenders who also have larger capital buffers. "Public (sector) lenders saw the biggest rebound in inquiries in July and August 2020, most likely because they were early in recommencing operations than their private and NBFC (non-bank finance companies) counterparts," the report by Cibil said.- economic times

🍒 RBI, government in right direction to keep economy moving: Axis Bank CEO : The Reserve Bank and the government are in the right direction to keep the economy moving and signs of revival in the banking industry are visible with people starting to repay their liabilities, Axis Bank MD and CEO Amitabh Chaudhry said on Tuesday. "We have gone through two phases of concession being given to the borrowers with the moratoriums, now we are in the so called restructuring phase. "The numbers are trending in the right direction, that means the customers do realise that they do need to pay. Many customers who have taken moratorium or who were worried about this situation have actually started paying and I am expecting a similar trend on restructuring side as well," Chaudhry said. He was speaking at a virtual event organised by the All India Management Association (AIMA).- economic times

🍒 Government needs to cap MDR on debit card at 0.6% to promote digital transaction: Report : The government needs to cap the merchant discount rate on all types of debit and pre-paid cards at a lower rate of 0.6 per cent of the transaction value with a view to end distortions in the card payment ecosystem and promote digital transactions, suggested a study. The study done by the Indian Institute of Technology Bombay further suggested that there could be an upper ceiling of Rs 150 for a prescribed merchant discount rate (MDR) of 0.6 per cent. "To encourage digital payments where cash is a strong alternative, for small and medium merchants accepting POS based payments, and having annual turnover of at most Rs 2 crore, the MDR for all types of debit and pre-paid cards, for transactions up to Rs 2,000, could be fixed with a cap of 0.25 per cent, while for transactions exceeding Rs 2,000, the cap could be 0.6 per cent," it said.- economic times

🍒 State Bank of India planning to monetise its integrated digital banking platform YONO : State Bank of India is planning to monetise its flagship digital banking platform YONO by allowing smaller lenders such as small finance banks and regional rural banks to use it, chairman Rajnish Kumar said. The country's largest bank may soon carve out the integrated digital platform into a separate entity. "The work has started," the chairman said at a CII event on Tuesday. Other lenders would need to connect with the YONO API (application programming interface) for using the platform. Kumar had earlier said that YONO (You Only Need One) is a profitable platform with 2.7 crore users. He had said that YONO could have been valued at $40 billion had a valuation been done. The platform was launched in November 2017. SBI onboarded about 29 lakh customers on this platform in the first quarter of this fiscal. It has seen around three million transactions in the same period. The bank also opened three pilot YONO branches. About 93% of the bank’s total transactions now take place through alternate channels. - economic times

🍒 Punjab and Maharashtra Co-operative Bank gets a new administrator : Reserve Bank of India (RBI) has appointed former Union Bank of India general manager AK Dixit as the new administrator of the beleaguered Punjab and Maharashtra Co-operative Bank (PMC) as the present administrator JB Bhoria is stepped down on September 22 due to health reasons. PMC was placed under RBI directions on September 23, 2019, after its NPAs rose sharply due to loans given to real estate company HDIL and its promoters the Wadhawan's with accounting for it in the bank's book. The directions have been subsequently extended and is presently valid till December 22.- economic times

🍒 Stressed assets could touch 20% by end of fiscal year: Macquarie Capital : In what could raise alarm bells over the asset quality of the Indian Banking system, Macquarie Capital has estimated that stressed assets could more than double and touch nearly 20% by the end of FY21. Bad loan ratio at the end of March 2020 stood at 8.5%. //“As per our estimates, we believe overall stressed assets for banks is expected to touch 20% by FY21E which is perhaps the highest observed in the history of the banking system in India and also one of the highest in the world,” said Suresh Ganapathy, Associate Director, Macquarie Capital. This is so far the worst assessment of the stress induced by the pandemic on bank’s books. The Reserve Bank of India as part of the stress tests it conducted on lender’s books predicted that bad loan ratio could rise to 14.7% under a severely stressed scenario.- economic times

🍒 Banks ready with one-time rejig plan for retail loans : There’s relief in sight for pandemic-hit retail borrowers struggling to make EMI payments. Banks have started offering relief packages to borrowers under the RBI’s Resolution Framework for Covid-19-related Stress. As the six-month moratorium offered to all borrowers came to an end on August 31, the RBI allowed banks to open a one-time restructuring window for banks to offer further relief to borrowers who are still cash-crunched and unable to resume EMI payments. The one-time restructuring of loans include personal, housing, auto and education advances, and credit card dues. Banks are now rolling out the scheme. “We have framed guidelines on the modalities and customers can apply for relief before December 24, 2020,” a senior SBI official told BusinessLine. -Bussiness Line  

🍒 ‘DHFL used 2.6 lakh fraud a/cs in fake branch to siphon funds’ : A whopping 2.6 lakh fake accounts in a Mumbai branch that did not exist. This is what investigations into the DHFL scam have revealed. The ‘branch’ created fake accounts using names of account holders who had already repaid in full to siphon out ₹11,750 crore. Coding was done with the help of three software platforms to camouflage these transactions, according to probe documents seen by BusinessLine Nearly 70 per cent of the ‘fraudulent transactions’ of DHFL flagged by the forensic auditor, Grant Thornton, are from this fictitious ‘Bandra-branch,’ the probe documents show. - Business Line

🍒 Vivriti Capital raises ?100 crore in Series B Funding : Vivriti Capital, which owns and manages online platform CredAvenue, has raised ?100 croreled by existing investor Creation Investments. The company had earlier raised ?350 crore in March from LGT Lightstone Aspada and ?310 crore in 2019 from Creation Investments, and with this investment the company has raised ?760 crore till date, it said in a statement. The funds infused will be used to further strengthen our technological and analytical capabilities and ramp up new platforms, which we have launched specifically for co-lending, supply chain, among others. We will also invest more into our asset management business to set up and launch unique funds spanning the BBB to AAA fixed income universe, said Gaurav Kumar and Vineet Sukumar, Founders and MD of Vivriti Capital.-Bness Line  

🍒 More clarity on loan recast likely by month-end : A clearer picture on the availment of the loan restructuring scheme is likely to emerge by the month-end as banks are still awaiting collection data and are also hoping for a verdict from the Supreme Court oe of moratorium interest. Meanwhile, even as banks, NBFCs and housing finance companies have begun rolling out retail and home loan recast schemes, most of them do not expect too many borrowers to avail the facility. “As of now, discussions have begun with borrowers who want to avail the recast. But everyone is hoping for more clarity after the Supreme Court hearing on September 28,” said a senior banker with a private sector lender.Like State Bank of India, mFrwost lenders are also seeking the details and proof of Covid-related job loss or salary reduction. “It is the same for both retail and corporate borrowers. They have to approach the bank and discuss the recast. It is not a free lunch,” said anoFoher banker, adding that bank and salary statements and GST returns are being examined.-Bussiness Line  

🍒 Singapore, HK top destinations for suspect funds; China and India follow : Singapore and Hong Kong were the biggest destinations for suspect transactions in Asia, even though the financial centers saw just a smal🙏🏻firaction of an estimated $2 trillion in potentially dodgy money flows revealed in a report. Singapore processed $4.4 billion in suspicious flows through banks, including DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd., the International Consortium of Investigative Journalists said in an investigation published Sunday. Some $4.1 billion was handled in Hong Kong by lenders including HSBC Holdings Plc and Deutsche Bank AG, it said. The two banking centers are followed by China and India in Asia in terms of the size of suspect flows, according to the report based on a leaked trove of documents to BuzzFeed News. The documents detailed more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity. - Business Standard

🍒 Covid-19 effect: Banks may recast Rs two trillion loans, says SBI : The banking system in India is expected to restructure loans worth Rs two trillion of borrowers impacted by the Covid-19 pandemic, State Bank of India chairman Rajnish Kumar said. This estimate for recast covers corporate, MSME and retail borrowers. As for SBI, the estimates are in the region of Rs 20,000 crore covering all segments. There isn't much demand for restructuring as of now. The scale of recast will remain restricted if economic recovery isn't delayed much, SBI chairman said. Addressing a banking webinar organised by the Confederation of Indian Industry (CII), Kumar said said very few large corporates with loans above Rs 1,500 crore are likely to be come for restructuring. A lot of clean up and deleveraging has already happened in the case of large companies, many of whom are reluctant to carry the 'restructuring' tag. Segments impacted the most include aviation, hospitality and shopping malls. The real estate sector has been struggling for four to five years and the pandemic has added to problems, Kumar said. - Business Standard

🍒 NBFC-MFIs' loan disbursement drops 96% to Rs 570 cr in June quarter : Loan disbursements by non-banking financial companies-microfinance institutions (NBFC-MFIs) declined 96 per cent to Rs 570 crore in the first quarter of the current financial year, according to a report by Microfinance Institutions Network (MFIN). It had stood at Rs 15,865 crore in the corresponding quarter of the previous year. The data pertains to NBFC-MFI members of MFIN, a self-regulatory organisation and industry association of the microfinance sector in the country. It has 56 NBFC-MFIs and 35 associates including banks, small finance banks (SFBs) and NBFCs as its members. Analysis on NBFC-MFIs is based on data collected from 54 members that are registered with the Reserve Bank of India (RBI), MFIN said.- Business Standard

🍒 SBI to charge additional 0.35% interest on rejigged retail loans : State Bank of India (SBI) on Monday launched a portal to administer the restructuring scheme to retail borrowers hit by Covid-19-related stress. The country’s largest lender will be charging an additional interest of 0.35% per annum over and above the current pricing for the remaining tenure of the restructured loans, “in order to offset partial cost of additional provisions required to be made by the bank.” Customers can check their eligibility for the restructuring of their loans through the portal. Upon logging in, they will be asked to key in their account number. After completion of OTP validation and inputting a few other details, the customer will come to know their eligibility and receive a reference number. This reference number will be valid for 30 days, within which period customers can visit the branch to complete the required formalities. The restructuring process will be completed after verification of documents and execution of some procedures at their branch. - financial express

🍒 Gold prices drop by Rs 658 to Rs 50,683; silver rates fall to Rs 59,959 per kg : Gold prices slide by Rs 658 to hit Rs 50,683 per 10 gram in the Mumbai market on a strong dollar and subdued global cues. The precious metal prices decline on sharp dollar recovery as safe-haven buying switched to dollar with rising coronavirus cases and fear of another lockdown in Europe and the UK. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,426 plus 3 percent GST, while 24-carat 10 gram was Rs 50,683 plus GST. The 18-carat gold quoted at Rs 38,012 plus GST in the retail market. Silver prices declined by Rs 4,182 to Rs 59,959 per kg from its closing on September 21.

🍒 Rupee skids 20 paise to 73.58 against US dollar : The rupee depreciated 20 paise and settled at 73.58 (provisional) against the US dollar on Tuesday tracking negative domestic equities. At the interbank forex market, the rupee opened on a weak note at 73.50, then fell further and finally closed at 73.58 against the greenback, registering a fall of 20 paise over its last close. The rupee strengthened by seven paise to close at 73.38 against the US dollar on Monday.

Forwarded as received:🙏🏻🙏🏻

Business Standard

Ø Tata Group offers to buy out Mistry family stake in shares dispute

Ø National Textile Corporation not operationally profitable despite revival scheme: Smriti Irani

Ø Israel and India sign MoU to collaborate in tech innovation & start ups

Ø NBFC-MFIs' loan disbursement drops 96 pc to Rs 570 cr in June quarter

Ø Trai for a rulebook to ensure net neutrality

Ø Sebi enhances IL&FS case penalty on ICRA, CARE and IndRa to Rs 1 crore

 

Ø India's current account to register surplus of $30 bn in FY21: Report

Ø Lenders seek higher cover from property developers over Covid-19 issues

Ø Covid-19 effect: Banks may recast Rs two trillion loans, says SBI

Ø Sebi to prescribe stress tests, liquid holdings for debt mutual funds

Ø US economy highly uncertain despite marked improvement: Fed's Powell

Ø NTPC invites EoI for setting up manufacturing facilities in its plants

Business Line

 

Mint

Ø ‘DHFL used 2.6 lakh fraud a/cs in fake branch to siphon funds’

Ø Parliament gives its approval to Taxation Bill

Ø TCS bags contract from UK supermarket chain Morrisons

Ø Chemcon Speciality Chemicals IPO subscribed 12.65 times on second day

Ø Power Ministry proposes Standard Bidding Document for Discom privatisation

Ø Gear import duty: Inox Wind under DRI lens for ‘false’ claims

 

 

Ø Sebi rule on multi-caps brings investors to the drawing board

Ø Kharif food production estimated at a record 145 million tonnes

Ø HC dismisses plea by HCC's invocation of bank guarantee by NHPC worth ₹214 cr

Ø Sebi debars 12 DHFL promoters for frauds causing ₹17,000-cr impact on accounts

Ø India's natural gas production down 13% year-on-year in April-August

Financial Express

 

Deccan Chronicle

Ø ‘Labour reforms intend to put India among top 10 nations in ease of doing business’

Ø US household wealth hits record even as economy struggles

Ø Public telcos to procure equipment as per amended GFR: Dhotre

 

Ø Parliament removes cereals, pulses and oilseeds from Essential Commodities Act

Banking / Financial News 22/9/20

☕22.09.2020: Today's Banking / Financial News at a Glance

🍒 Privatise select PSU banks, dilute role of DFS: Raghuram Rajan : Former RBI Governor Raghuram Rajan on Monday suggested the government to privatise select public sector banks, set up a bad bank to deal with NPAs and dilute the role of Department of Financial Services. The reforms are necessary to ensure growth of the banking government without the periodic boom-bust cycles, said a paper titled 'Indian Banks: A Time to Reform?' co-authored by Rajan and former Reserve Bank Deputy Governor Viral Acharya. "Re-privatization of select PSBs can then be undertaken as part of a carefully calibrated strategy, bringing in private investors who have both financial expertise as well as technological expertise; corporate houses must be kept from acquiring significant stakes, given their natural conflicts of interest," the paper said. "Winding down Department of Financial Services in the Ministry of Finance is essential, both as an affirmative signal of the intent to grant bank boards and management independence and as a commitment not to engage in 'mission creep' when compulsions arise to use banks for serving costly social or political objectives," the paper noted. According to the paper, private asset management and national asset management 'bad banks' should be encouraged in parallel to the online platform for distressed loan sales. "The national public sector 'bad bank' could serve as a vehicle to aggregate loans, create management teams for distressed firms, and possibly buy and hold distressed assets in a sector like power till demand returns. "It could provide fall-back prices for loans sold by PSBs," the paper suggested. - Live Mint

🍒 BBB recommends 13 names for appointment as executive directors in PSU banks : The Banks Board Bureau (BBB) has recommended to the government names of 13 general managers of various public sector banks (PSBs) for appointment as executive directors. BBB, the headhunter for state-run banks and financial institutions, interviewed 28 candidates over a period of two days for vacancies of executive directors. The list of selected candidates would be sent to the Department of Financial Services to get the Appointments Committee of Cabinet (ACC) approval. The Banks Board Bureau interfaced with 28 candidates from various public sector banks for 13 clear vacancies of Executive Directors in PSBs, the Bureau said in a notification on Sunday. The Bureau recommended the names of Swarup Kumar Saha, Debadatta Chand, K Satyanarayana Raju, Nitesh Ranjan, Sangram Keshari Mohapatra, Monika Kalia, Swarup Dasgupta and Karthikeyan M, Ishraq Ali Khan, Vivek Wahi, S Srimathy, B Vijayakumar A and Raghavendra V Kollegal. Rajeev Puri, Imran Amin Siddiqui, Brij Mohan Sharma, Prakash Kumar Sinha, Vikas Kumar and Monoj Das are in the Reserve list, it said. - Business Standard

🍒 State Bank of India kicks off restructuring of retail loans : State Bank of India (SBI), the country's largest bank has kicked off its due diligence for restructuring of retail loans by announcing a two step process to which includes allowing customers to check their eligibility for restructuring through its website. Customers have to enter their loan account number, income pre Covid, current income and also expected income in the near term for the bank to assess whether they are eligible. They will be given a reference number valid for 30 days to visit the bank's branches and chalk out a restructuring plan. "Instead of people coming to branches to check whether they qualify they can just check on the website. For a loan to be eligible we will need to ascertain that Covid has had an impact on the customers income and we will also have to get some confidence that he or she will be able to repay in the future," said CS Setty, managing director, retail and digital banking at SBI. - economic times

🍒 Banks not risk averse, they are being prudent: SBI chairman Rajnish Kumar : Asserting that there is muted demand for loans, SBI Chairman Rajnish Kumar on Monday said banks are not risk averse but they are being prudent in these trying times to avoid a repeat of the post-2008 scenario when there was "dilution" in credit underwriting standards. Data clearly shows that investment in the economy has come down, the head of the country's biggest lender said. "If the capex (capital expenditure) is not happening and investment in the economy is not happening at the same pace, then obviously this is a demand issue and the risk aversion would be where there is a demand and banks are not lending," he said at a virtual event organised by AIMA. - economic times

🍒 SBI opens online window for restructuring retail loans: Here's how to use it : The State Bank of India (SBI) announced today that it has launched an online portal for smooth and hassle-free implementation of restructuring of retail loans such as home loans, auto loans etc. According to a press release issued by the bank, retail customers can access the portal at https://bank.sbi/ or https://sbi.co.in to check their eligibility instantaneously for loan recasts by providing income details. Using the portal, borrowers also the option of requesting a moratorium of 1-24 months and extension of their loan term. SBI has launched this facility, after the Reserve Bank of India (RBI) allowed banks to provide loan restructuring options to individual borrowers. The Finance Minister Nirmala Sitharaman had asked banks to roll out these restructuring schemes by September 15, 2020.- economic times

🍒 SBI to seek additional security for resolution of non-personal loans : State Bank of India has said it will seek additional security in the form of personal guarantee of promoters of unlisted companies and ask promoters to pledge their shares for listed entities as part of the loan-restructuring process. In its frequently asked questions (FAQs) on the resolution framework for Covid-19-related stress other than personal segment loans, SBI said a processing fee or upfront fee of 0.25 per cent of the aggregate limits will also be payable. Further, for term loans and working capital loans, the interest cost would be increased by 100 basis points over the current pricing on working capital loans. - Business Line

🍒 P Manikandan quits as Chief General Manager of Dhanlaxmi Bank : P Manikandan, Chief General Manager of the Kerala-based Dhanlaxmi Bank, has dismissed rumours of his being sacked from the post following an RBI directive for not adhering to good corporate governance practices. “I have submitted my resignation from the services of Dhanlaxmi Bank due to personal reasons. The same was submitted to the Managing Director on September 18 at 4 pm and the Board accepted the same. This is the fact,” he said when BusinessLine sought his response on the news.- Business Line

🍒 Reserve Bank of India looks to sort out e-KYC matter for non-bank lenders : The Reserve Bank of India and the government are working closely on how to allow the Aadhaar-based digital customer authentication facility to non-bank entities to help them to reach out and cater to a wider section of population, two people familiar with the matter said. This assumes significance amid the spread of coronavirus when physical proximity is best avoidable. At present, only banks are allowed to do customer identification online through OTP (one-time password) based Aadhaar card authentication. The government has been hesitant to give non-banks entities the access to the Unique Identification Authority of India’s (UIDAI) database following the complaints of misuse of it. Non-bank lenders and microfinance companies which are not allowed to do so, are lobbying for similar facilities. - economic times

🍒 Yes Bank to get fresh forensic investigation into its top 10 defaulters : Yes Bank is looking to conduct an in-depth investigation of its top 10 accounts that have either turned bad or have been declared fraudulent, three people aware of the development said. The private lender is looking to conduct a forensic investigation of a few ADAG Group companies, its exposure to Essel Group, Essar Group and Cox & Kings. In some of these cases the first round of forensic investigation was carried out by a group of lenders, which Yes Bank was part of. According to the people in the know, Yes Bank is looking to get a digital forensic audit and asset tracing probe on some of the top accounts. While Yes Bank did not respond to an email query, its chief Prashant Kumar had hinted about a planned approach against defaulters last month. - economic times

🍒 Google Pay, Visa partner for card-based payments with tokenisation : Google Pay on Monday announced the rollout of tokenisation across its platform that will enable users to safely transact with their debit or credit cards. Through tokenisation, Google Pay Android users can use their debit or credit card to make payments through a secure digital token attached to their phone without having to physically share their credit or debit card details. The feature will also facilitate use of tap-to-pay feature on near-field communications (NFC)-enabled point of sale (PoS) terminals and online merchants, a statement said. "Working in close partnership with Visa and banking partners, this feature is now available to all users of Axis and SBI Card, with Kotak and more banks expected to follow suit very soon," it added.- economic times

🍒 HDFC Bank denies charges by US law firm; to defend vigorously in lawsuit : Largest private sector lender HDFC Bank on Monday denied the allegations of misleading claims levelled by a US-based law firm to seek damages in a class action suit. The bank vowed to defend itself “vigorously” in the lawsuit and added that the response to the lawsuit will be ready by early next year. Rosen Legal last week filed the class-action suit seeking damages for the losses incurred by investors because of alleged "materially false and misleading" representations by HDFC Bank. It had specifically named the bank's chief executive and managing director of over 25 years, Aditya Puri, his designated successor Sashidhar Jagdishan and company secretary Santosh Haldankar as defendants..- economic times

🍒 Was forced to remove UPI cashback to get relisted on Android Play Store: Paytm : Paytm, on Monday, said it was forced to remove the UPI cashback and scratch cards campaign in order to comply with Google’s mandate and get re-listed on the Android Play Store. “Offering both is legal in India, and cashback was being given following all rules and regulations set by the government,” it said in a statement, adding that it was “arm-twisted” by the search engine major to comply with its biased Play Store policies that are meant to artificially create Google’s market dominance. After getting temporarily de-listed, Paytm app was restored on the Play Store in a few hours, it further said. - Business Line

🍒 IRDAI permits video-based identification for KYC : Insurers can now use video-based identification process (VBIP) in Know Your Customer (KYC) process for insurance policies. With a view to simplifying the KYC process by leveraging various electronic platforms to make it customer-friendly, the Insurance Regulatory and Development Authority of India (IRDAI) has permitted all life, general and standalone health insurers to use VBIP as an optional. “Insurers may undertake VBIP by developing an application, which facilitates KYC process for either online or face-to-face personal verification through video,” said the regulator in a circular released on Monday. - Business LIne

🍒 Banks moved $2 trillion, defying money laundering orders: ICIJ : A new investigation by the International Consortium of Investigative Journalists (ICIJ) says JPMorgan Chase & Co., Deutsche Bank AG and several global banks kept profiting from powerful and dangerous players in the past two decades even after the US imposed penalties on these financial institutions. The report, based on leaked documents obtained by BuzzFeed News and shared with the consortium, said that in some cases the banks kept moving illicit funds after receiving warnings from US officials. The documents identified more than $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions internal compliance officers as possible money laundering or other criminal activity, the report said. The top two banks are Deutsche Bank, which disclosed $1.3 trillion of suspicious money in the files, and JPMorgan, which disclosed $514 billion, the analysis found.- Business LIne

🍒 FinCEN files: Almost all Indian banks named for suspicious transactions : Between 2010 and 2017, a number of Indian banks, irrespective of ownership – public, private and foreign -- helped facilitate transactions red-flagged by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for suspected money laundering, terrorism, drug dealing and financial fraud, latest leaks suggest. International Consortium of Investigative Journalism (ICIJ) obtained the top-secret Suspicious Activity Reports or SARs, worth more than $2 trillion globally. These transactions are not outright evidence of frauds or proof of nefarious activities, but are red-flagged by the US authority as suspicious. While the data dump is available on the organisation’s website, so far it has meticulously tracked down 18,153 transactions totaling $35 billion, in which links between both sending and beneficiary banks have been established. The transactions were done between 2000 and 2017. - Business Standard

🍒 IDBI Bank to raise Rs 11,000 cr through QIP; six merchant bankers appointed : IDBI Bank is all set to roll out its mega fund raising exercise in November. Sized at Rs 11,000 crore, the qualified institutional placement (QIP) will be the bank’s maiden equity raise in over five years and also the first ever since it came under the fold of Life Insurance Corporation of India (LIC) in 2018. Six investment banks – ICICI Securities, Axis Capital, SBI Capital Markets, IIFL Securities, Credit Suisse and IDBI Capital Markets have been appointed to manage the QIP. Shareholders of IDBI Bank approved the QIP on July 15, 2020. The equity issuance is expected to hit the market within weeks after the bank declares its September quarter results, which is likely to be published in October. “We are in the initial stages of reaching out to investors. Responses have been reasonable so far, especially from domestic institutional investors,” said a banker aware of the development. - Business Line

🍒 mPokket to disburse instant loans of ₹1,200 cr this fiscal : Lending platform mPokket on Monday said it will disburse ₹1,200 crore loan to college students and young working professionals this fiscal year, an increase of over 70% from 2019-20. mPokket, an instant loan app, had disbursed about ₹700 crore in the last fiscal. "mPokket will disburse ₹1,200 crore in 2020-21," the company said in a statement. The firm has a user base of more than 1 million KYC-approved borrowers and the number is expected to reach 1.5 million by the end of this fiscal ending March 2021. - Live Mint

🍒 SBI raises ₹7,000 crore via Basel III compliant bonds : The country's largest lender State Bank of India on Monday said it has raised ₹7,000 crore by issuing Basel III compliant bonds. "The Committee of Directors for Capital Raising at its meeting of held today on September 21, 2020 accorded its approval to allot 70,000 Basel III compliant non-convertible, taxable, redeemable...debt instruments in the nature of debentures aggregating to ₹7,000 crore, to bond subscribers," SBI said in a regulatory filing.The allotment of bonds to the subscribers took place on the same date i.e. September 21, 2020, it added. The bonds qualify as tier II capital of the bank, and has face value of ₹10 lakh each, bearing coupon rate of 6.24% per annum payable annually for a tenor of 10 years, it said. - Live Mint

🍒 Bank fraud: 24 directors of Ghaziabad bank booked for embezzling around Rs 100 crore : Twenty-four directors of Ghaziabad’s now defunct Mahamedha Cooperative Bank have been booked for allegedly misappropriating around Rs 100 crore, according to an FIR lodged here. The case was lodged following an audit by a company engaged by the Cooperative Department. The company in its report named the errant directors and officials. In a complaint to police, Cooperative Department Assistant Commissioner and Registrar Devendra Singh alleged the bank officials sanctioned loans to ineligible customers. He said Rs 99.85 crore was embezzled. Devender Singh said properties of seven people who took hefty loans from the bank have been attached. Properties of other borrowers will also be attached, he said. The case will be investigated by the cooperative cell of the UP police, SP (City) Abhishek Verma told PTI. One of the directors named in the FIR is already dead. - financial express

🍒 Over 1,634 cr digital transactions registered in Apr-Aug: Dhotre : Digital payments have witnessed an increase with 1,634.92 crore digital transactions being conducted between April-August this year, the Parliament was informed on Monday.Digital payments have increased in the country during the last three years from 2,071 crore digital transactions in FY2017-18 to 3,134 crore in FY2018-19, and further to 4,572 crore in FY2019-20, Minister of State for Electronics and IT Sanjay Dhotre said in a written reply to the Lok Sabha. In FY2020-21 (till August), 1,634.92 crore digital transactions were registered, he said, adding that final data for July and August 2020 has not yet been published by RBI. Replying to a separate question, Dhotre said 306.47 crore transactions were registered in April, 329.22 crore in May and 412.14 crore in the month of June this year. “In the wake of COVID-19 pandemic, digital payments have increased as people are adopting more digital payments as these are easy, convenient and safe and enable a contactless mode of payment,” Dhotre said. - financial express

🍒 SBI Life Insurance inks pact with Yes Bank to sell insurance policies : SBI Life Insurance on Monday said it has signed bancassurance agreement with Yes Bank to offer a comprehensive bouquet of life insurance solutions to the bank’s customers across the country. As part of the partnership, SBI Life’s diverse range of individual and group insurance solutions will be offered to the customers of Yes Bank through the bank’s branches spread across 28 states and 8 Union Territories in India The agreement was signed by Rajan Pental, Global Head – Retail Banking, Yes Bank and AVS Sivaramakrishna, Regional Director-Mumbai region, SBI Life Insurance, in the presence of Mahesh Kumar Sharma, MD & CEO, SBI Life and Ravi Krishnamurthy, President-Zone 1, SBI Life, among others. - Moneycontrol.com

🍒 CBI books Kwality for defrauding Bank of India, other banks of Rs 1,400 crore : The Central Bureau of Investigation (CBI) on September 21 said it has registered a case against Delhi-based private company Kwality and its directors, among others, on allegations of causing a loss of approximately Rs 1,400.62 crore to a consortium of banks led by Bank of India. The company's directors Sanjay Dhingra, Siddhant Gupta, and Arun Srivastava have been named in the complaint along with other unknown persons. The case was filed following a complaint by Bank of India. - moneycontrol.com

🍒 Gold prices ease to Rs 51,341/10 gm on stronger dollar, silver plunges Rs 1,764/kg : Gold prices fell Rs 279 to Rs 51,341 per 10 gram in the Mumbai market on rupee appreciation against the dollar and weak global cues. The precious metal prices slipped as the dollar rebounded on safe-haven buying ahead of Federal Reserve Chairman Jerome Powell’s speech later this week. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,506, Rs 47,028 and Rs 51,341, respectively, plus 3 percent GST. Silver prices declined Rs 1,764 to Rs 64,141 per kg from its closing on September 18.

🍒 Sensex tumbles over 800 points on global sell-off; Auto, Media stocks top drag : The 30-share BSE index ended 811.68 points or 2.09 per cent lower at 38,034.14. The NSE Nifty tumbled 254.40 points or 2.21 per cent to finish at 11,250.55. Traders also said that valuations of the market was a concern for investors as analysts believed a healthy correction in the market was in the offing. IndusInd Bank was the top loser in the Sensex pack, tanking over 8 per cent, followed by Bharti Airtel, Tata Steel, ICICI Bank, M&M, Maruti, Axis Bank and ONGC. On the other hand, Kotak Bank, Infosys and TCS were the gainers.

🍒 Rupee settles 7 paise higher at 73.38 against US dollar : The rupee strengthened seven paise and closed at 73.38 (provisional) against the US dollar on Monday, even as the domestic equity market traded with significant losses. At the interbank forex market, the domestic unit opened at 73.43 against the US dollar and finally settled for the day at 73.38 against the greenback, registering a rise of 7 paise over its previous close.