20.10.2020: Today's Banking / Financial News

20.10.2020: Today's Banking / Financial News at a Glance

🍒 New privatization policy ready; Cabinet to discuss note on 'strategic sectors' soon: After months of inter-government discussions, the proposal to define ‘strategic sectors’ is slated to be taken up by the Union Cabinet within the next few weeks, Moneycontrol has learnt from senior government sources. “The cabinet note was circulated to 49 central ministries and departments. There were a lot of inputs, but the note is now ready,” said a top government official, who spoke on the condition of anonymity. The person added that the note could be up for consideration within 10-15 days. “Banking and insurance will be designated as strategic sectors,” the officials said. - Moneycontrol.

🍒 Centre may have no stake in public sector banks after privatisation : The government is veering towards the view that exiting a public sector bank should be total when it is privatised. To make the sale attractive, however, the government wants the Reserve Bank of India (RBI) to relax the rules on ownership in private-sector banks. A top government source said there had been intense discussion among the Prime Minister’s Office (PMO), the finance ministry, and the RBI on what level of stake should be retained. There have also been talks with specialists outside the government this financial year, particularly since July, when the PMO had asked the officers concerned for a thorough debate on the subject, spread over two days. Since then, after several iterations, government officials have come round to the view not to retain any shareholding in a bank which has to be divested. It will be impossible to make a strategic partner believe the government will stay off board decisions “even if it has only 10 per cent shareholding in a bank”, the source said. For instance, under the Indian Companies Act, a shareholder with 10 per cent of the company’s paid-up share capital, by a written notice, may requisition the board to convene an extraordinary general meeting. There are other ways in which the government will assert its presence and this tension with the new management will not help the bank grow. Business Standard.

🍒 Transmission lower at weakly-capitalised banks during easing cycle, says RBI report : Banks with higher capital ratios transmit monetary policy actions more smoothly than banks with lower capital base. Given that the chunk of the banking sector lending pertains to public sector banks and they do not have excess capital, it is difficult for them to extend credit without improving their capital position during the downturn of the current business cycle. Despite the RBI’s easing policy since 2014 (except for two intermittent rate hikes in 2018), credit growth has not picked up in the past few years, signalling weakening of bank lending channel of monetary policy transmission. These are some of the findings of a recent study by the RBI in its working paper titled ‘Bank Capital and Monetary Policy Transmission in India’.- Business Line

🍒 Banks sanction Rs 1.35 lakh cr concessional loans to 1.5 cr KCC card holder farmers : The Finance Ministry on Thursday said banks have covered 1.5 crore farmers under the Kisan Credit Card (KCC) scheme to sanction credit limit of Rs 1.35 lakh crore to help them meet financial requirements during the COVID-19 crisis. As part of the Aatmanirbhar Bharat Package, the government has announced to cover 2.5 crore farmers under the KCC scheme with a credit boost of Rs 2 lakh crore through a special saturation drive. "As a result of concerted and sustained efforts by the banks and other stakeholders in the direction of providing access to concessional credit by the farmers, including fishermen and dairy farmers, a major milestone target of covering more than 1.5 crore farmers under KCC, with sanctioned credit limit of Rs.1.35 lakh crore has been achieved," an official statement said. - Economic Times

🍒 Bank of Baroda, Accenture complete technology integration of former Vijaya Bank's branches :  Accenture and Bank of Baroda have successfully completed the technology integration of the former Vijaya Banks branches with Bank of Baroda part of the post-merger integration of the three-way merger of public sector banks in India. Accenture is now helping align former Dena Banks IT systems with Bank of Baroda, a joint statement said on Monday. The merger of Vijaya Bank and Dena Bank with Bank of Baroda in 2019 created the country's third largest public sector bank. Upon completion, the combined technology architecture will help the merged entity seamlessly integrate its India- wide customer service and business operations network of nearly 9,000 bank branches and more than 12,000 ATMs, it said.- Economic Times

🍒 Bank of Maharashtra posts 13% rise in Q2 net profit : Bank of Maharashtra (BoM) reported a 13 per cent increase in net profit at ₹130 crore in the second quarter ended September 30, 2020, against ₹115 crore in the year-ago quarter. The Pune-headquartered public sector bank’s net interest income edged up 4 per cent year-on-year (yoy) to ₹1,120 crore (₹1,073 crore in the year-ago quarter). Other income rose 14 per cent yoy to ₹451 crore (₹396 crore). AS Rajeev, MD and CEO, BoM, said only ₹1,000 crore to ₹1,500 crore (or 1-2 per cent of the total advances) of the Covid-19- related stressed accounts will need restructuring. Of this, the bank has so far restructured small accounts, including retail and micro, small and medium enterprise (MSME), aggregating about Rs 42 crore. - Business Line

🍒 CSB Bank Q2 profit jumps to Rs 69 crore : CSB Bank on Monday reported over two-fold jump in net profit at Rs 68.9 crore for the quarter ended September 30, 2020. It had posted a net profit of Rs 24.6 crore in the second quarter of 2019-20. The bank’s half-yearly profit after tax is at a record high of Rs 122.50 crore with Return on Assets or RoA (annualised) of 1.13 per cent despite having made a healthy provision of Rs 58.2 crore for COVID-19 during April-September, CSB Bank said in a regulatory filing. Total income grew to Rs 567.55 crore during September quarter of 2020-21 as against Rs 431.07 crore in the year-ago period. The bank registered a rise in gross non-performing assets (NPAs) to 3.04 per cent of gross advances at September-end 2020 from 2.86 per cent by the same period of 2019. - financial express

🍒 Centre to ensure interest waiver benefits to small borrowers by Nov 2 : The Union government is set to pass on the benefits of the compound interest waiver to small borrowers before November 2. Banks, on the other hand, have started making additional provisioning based on their own judgment of the loan books in balance sheet for the second quarter following the Supreme Court’s standstill order on classifying loans as non-performing assets (NPA). “We are putting all our efforts to ensure that we pass on compound interest waiver to borrowers before the SC deadline,” a top government official said, requesting anonymity. Both state-owned and private lenders will be asked to refund the compound interest waiver sum to all borrowers, with loans up to Rs 2 crore, before November 2 and file a claim with the government subsequently. However, the government is likely to frame a scheme that will spell out the modalities to be followed by lenders. It will be applicable to all borrowers — irrespective of whether they availed moratorium or not but the calculation of computing waiver by banks may vary according to the type of loan. - Business Standard.

🍒 India must not neglect bank recapitalisation despite pandemic, says Viral Acharya : India is neglecting bank recapitalisation as it focuses on debt moratoriums and interest waivers for borrowers amid the COVID-19 pandemic, a former central bank official told Reuters on Monday. Indian banks are saddled with over $120 billion in bad debt, and in severely stressed conditions the bad-loan ratio could nearly double by March, according to Reserve Bank of India projections. Restoring banks' capital is critical for aiding a meaningful recovery, but there has been little focus on the matter, former RBI Deputy Governor Viral Acharya said. "This lack of focus is tantamount to kicking the can down the road and jettisoning financial stability for short-term gains," said Acharya, who recently wrote a book titled the "Quest for Restoring Financial Stability in India". "This repeated mistake has prevented India from recovering well from adverse shocks," Acharya said. His comments came weeks after India offered to waive the compounded interest component on all loans up to 20 million rupees following a legal challenge to the terms of a six-month moratorium.- Economic Times

🍒 Accumulated losses vs share premium a/c balances: PSB proposal will improve ability to service AT-I bonds: ICRA : The recent proposal by some public sector banks (PSB) to set-off their accumulated losses against the share premium account balances could improve the ability of these PSBs to service their AT (Additional Tier)-I bonds, according to ICRA. Four PSBs – Bank of India (BoI), Bank of Maharashtra (BoM), Punjab National Bank (PNB) and Union Bank of India (Union) – recently secured shareholders’ approval to set-off their accumulated losses against the share premium account balances and await regulatory approval. - Business Line

🍒 NCLT approves JSW Steel’s resolution plan for Asian Colour Coated Ispat Ltd : The Delhi Bench of National Company Law Tribunal on Monday approved the resolution plan submitted by JSW Steel to acquire bankrupt steel company Asian Colour Coated Ispat Ltd (ACCIL) for Rs 1,550 crore. “JSW Steel Coated Products, wholly owned subsidiary of JSW Steel, to acquire Asian Colour Coated with certain modification in the resolution plan approved by the lenders,” JSW Steel said in a statement. The written order is awaited. In 2018, ACCIL was included in the Reserve Bank of India’s second list of defaulters on which banks were asked to take corrective action. State Bank of India, Punjab National Bank and JM Financial are among the lenders to Asian Colour Coated Ispat.- Economic Times

🍒 Fino Payments Bank to add 300 more points at BPCL outlets in Tamil Nadu :  Fino Payments Bank is planning to add another 300 points at BPCL outlets to its existing 1,075 in Tamil Nadu, to help truck drivers to get fleet cards recharged by paying equivalent cash, without any hassles, a top official said on Monday. Recharging the Bharat Petroleum (BPCL) SmartFleet cards that are used to pay for fuel has been a challenge to truck drivers for quite some time and in order to ease this discomfort, Fino with BPCL has started such facilities, its State head, Dhanasekaran said. The digitised cash in the form of prepaid fleet cards allows drivers to make payments for fuel at BPCL outlets, which also completely frees BPCL from handling the cash given by the drivers, Dhanasekaran told reporters here after inaugurating a facility at Perundurai in Erode district.- Economic Times

🍒 Urban unemployment fell to 8.4% in July-September 2019: Government : Unemployment in urban areas fell to 8.4% in July- September 2019 from 8.9% in the June quarter last year, data released by the Ministry of Statistics and Programme Implementation (MoSPI) in the quarterly bulletin of the Periodic Labour Force Survey (PLFS) showed. Urban unemployment in the age group 15-29 years was 20.6%. Among states, urban unemployment was higher than the national average in Kerala, Uttar Pradesh, Rajasthan, Andhra Pradesh, Delhi, Bihar, Chhattisgarh, Madhya Pradesh and Telangana, among others. The rate of urban joblessness in the quarter ended September 30, 2018 was 9.7%. Urban unemployment declined in the three quarters spanning January till September 2019. - Economic Times

🍒 IBA move on officers’ wage revision: Bank unions to embark on action programmes : Bank officers, owing allegiance to four unions, have decided to embark on action programmes, including withdrawal of extra cooperation, work only till 6 pm and not work on Sundays and holidays, after the Indian Banks’ Association (IBA) informed their them of its inability to conclude and ink the joint note pertaining to officers’ wage revision. The four officers unions that have decided to retaliate with agitational programmes in a phased manner are: the All-India Bank Officers’ Confederation (AIBOC), the All-India Bank Officers’ Association (AIBOA), the Indian National Bank Officers’ Congress (INBOC), and the National Organisation of Bank Officers (NOBO). A memorandum of understanding was signed on July 22, where an amount of ₹7,898 crore was allocated representing 15 per cent hike in wages with effect from November 1, 2017, in the banking industry, the unions said in a joint statement. - Business Line

🍒 Paytm aims to issue 20 lakh co-branded credit cards in next 12-18 months : Homegrown digital financial services platform Paytm plans to issue 20 lakh co-branded credit cards over the next 12 to 18 months for which it will partner with various card issuers. In a statement on Monday, Paytm said it is working to democratise access to a formal credit system for the masses and is building the country’s ‘next generation credit cards’. “The company is aiming to transform the credit market by enabling ‘new to credit’ users to join the digital economy,” it said, adding that it is designing an innovative digital experience on its app allowing users to manage their overall spends and have full control over the card usage.- Business Line

🍒 HDFC Life Insurance Q2 net profit up 5.6% : Private sector HDFC Life Insurance registered a 5.6 per cent increase in net profit for the quarter ended September 30, 2020, at ₹326.09 crore. Its net profit amounted to ₹308.69 crore in the same period a year ago. It registered a 34.8 per cent increase in its net premium income to ₹10,045.44 crore in the July to September quarter this fiscal, compared to ₹7,453.68 crore a year ago. In a statement on Monday, HDFC Life said its private market share within the group and overall new business segment stood at 27.4 per cent and 23.3 per cent, respectively, in the first half of this fiscal. - Business Line

🍒 Vineet Nayyar resigns as Executive Vice-Chairman of IL&FS Group : Vineet Nayyar has resigned as Executive Vice-Chairman of IL&FS Group citing medical reasons. “The board of IL&FS Group today announced the resignation of Vineet Nayyar as the Executive Vice-Chairman of IL&FS Group. Nayyarhas requested the board to relieve him of his duties as Executive Vice-Chairman of IL&FS with effect from October 31on grounds of indifferent health,” said a statement from IL&FS  - Business Line

🍒 Transfer pricing: CBDT notifies tolerance range for AY 2020-21 : The Central Board of Direct Taxes (CBDT) has notified the “tolerance range” of transfer price for the assessment year 2020-21. It has re-notified the prevailing 1 per cent tolerance range for wholesale trading and the 3 per cent range for all other transactions undertaken during the financial year ending March 31, 2020. The notified tolerance range has been consistently at 1 per cent and 3 per cent in the recent years. If the CBDT had been bit magnanimous, it could have expanded it and provided more comfort to MNCs, claimed tax experts. “This is an opportunity lost as the CBDT could have used this to give more comfort to the multinational companies in the current Covid-19 times,” said Amit Agarwal, Partner, Nangia & Co. - Business Line

🍒 Edelweiss Asset Management raises ₹6,600 crore in ESOF III : Edelweiss Alternative Asset Advisors (EAAA) on Monday announced the final close of its ₹6,600-crore alternative investment fund, ESOF III. “This fund raise, amidst the subdued economic climate, is a strong endorsement of the opportunities in the Indian alternative asset management space, as well as the robust and unique private debt platform of Edelweiss Asset Management (EAM),” Edelweiss Financial Services said in a statement. The ESOF III strategy has generated strong investor interest and has received commitments from marquee global institutional investors, which include recent investments by the Canadian Ontario Teachers’ Pension Plan Board, Florida’s State Board of Administration, Swedish Pension Fund-AP4 and a European Insurance Investor, among others, it further said. - Business Line

🍒 As realty sector revives, LIC Housing aims for double-digit growth in FY21 : LIC Housing Finance sees bright prospects to record double-digit growth this fiscal, supported by the return of home loan growth to pre-Covid-19 levels, government push, revival in affordable housing segment, and its new products and support measures. “As of now, sentiments are improving day by day. We expect a positive rub-off in the realty space, with the overall economy opening in phases. A big chunk of an upwardly mobile middle-class segment, urbanisation rates, and the emerging concept of work from home will be able to sustain the demand. At the current rate, we can look forward to a double-digit growth towards the end of the current financial year,” Siddhartha Mohanty, MD and CEO of LIC Housing Finance, told BusinessLine. - Business Line

🍒 Kapil Wadhwan offers to settle all claims of DHFL; alleges 'outside forces trying to depress DHFL asset value’ : In what could throw a spanner in the ongoing debt resolution process of scam-hit Dewan Housing Finance Corporation Ltd, its former promoter Kapil Wadhwan has written to the RBI-appointed administrator of DHFL, claiming attempts by “outside forces” to depress the value of the assets. Pegging the total estimated profit from about 10 projects of DHFL at close to ₹44,000 crore, Wadhawan, who is currently lodged in a Mumbai jail, has alleged an attempt to suppress the true value. The letter was written from inside Taloja Jail on October 17, which was the last day for submission of bids for the debt-laden housing finance company under the insolvency process.  - Business Line

🍒 Experts moot widening microinsurance sector on the lines of SFBs : A committee of experts on insurance has recommended to IRDAI amendments in the current regulatory framework and relaxing the entry-level rules for standalone microinsurance entities, including co-operatives. In the backdrop of the pandemic, experts have underlined the immediate need to expand the coverage of microinsurance sector on the lines of what small finance bank have done for financial inclusion – catering to the underprivileged low-income groups. The Insurance Regulatory and Development Authority of India (IRDAI), in February, appointed an expert committee to come up with recommendations on feasibility of standalone microinsurance through co-operatives, mutual or companies. - Business Line

🍒 No more extension of BPCL privatisation bid deadline: DIPAM Secy : BPCL privatisation bid deadline will not be extended for the fifth time, as the government’s strategic disinvestment programme that was hit by the pandemic is back on track, DIPAM Secretary said Monday. The government had on four occasions extended the date of putting in the preliminary expression of interest for buying out the majority stake in Bharat Petroleum Corp Ltd (BPCL). The current deadline is November 16. “We had a serious COVID impact on strategic disinvestment, investors asked for time, particularly with respect to key transactions. I hope that further extensions may not be there, especially in BPCL where the current date is November 16.?So hopefully, we will be able to move through,” Tuhin Kanta Pandey, Secretary in the Department of Investment and Public Asset Management (DIPAM), told PTI. - financial express

🍒 Gold prices today fall for second day, silver rates drop sharply : Gold and silver prices in India edged lower today, tracking muted global rates. On MCX, December gold futures fell for the second day as prices slipped 0.22% to ₹50437 per 10 gram while silver futures fell 0.7% to ₹61,250 per kg. In the previous session, gold had settled 0.3% lower while silver had edged up 0.2%. In India, gold prices have lost momentum since hitting a record high of ₹56,200 in August, following the same trajectory as that of global rates. 

🍒 Sensex rallies 449 pts; Nifty tops 11,850 : Equity benchmark Sensex rallied 449 points on Monday, led by heavy buying in banking and financial counters amid largely positive cues from global markets. The 30-share BSE index ended 448.62 points or 1.12 per cent higher at 40,431.60. The broader NSE Nifty surged 110.60 points or 0.94 per cent to 11,873.05. ICICI Bank was the top gainer in the Sensex pack, jumping over 5 per cent, followed by Axis Bank, Nestle India, SBI, HDFC, ONGC and Kotak Bank. On the other hand, Bajaj Auto, TCS, Bharti Airtel, M&M and Maruti were among the laggards.

🍒 Rupee falls 2 paise to 73.37 against US dollar : The rupee settled on a flat note and fell 2 paise to 73.37 against the American currency on Monday even as the domestic equity market was trading with significant gains. The local unit opened at 73.38 against the US dollar at the interbank forex market and finally finished the day at 73.37 against the greenback, down by just 2 paise over its previous close of 73.35.

19.10.2020: Today's Banking / Financial News

19.10.2020: Today's Banking / Financial News at a Glance

🍒 Higher NPAs hinder monetary policy transmission: RBI paper : High incidence of non-performing assets (NPAs) in banks acts as a major roadblock in transmission of monetary policy actions of the Reserve Bank, a working paper prepared by the officials of the central bank said. The working paper also made a strong case for capital injection in state-owned banks, arguing that such a move would increase the credit flow to the real sector in addition to ensuing smoother transmission of monetary policy. "Presence of non-performing assets in a bank also weakens monetary policy transmission and lowers the loan growth rate," said the working paper co-authored by Silu Muduli and Harendra Behera, Department of Economic and Policy Research (DEPR), RBI. The RBI said the views expressed in the paper are those of authors and not of the Reserve Bank of India. - economic times

🍒 Retail cheque payments down to a trickle in FY20 to 2.96 per cent: RBI data : The aggressive push to a digital payments and settlement system has paid rich dividend to the Reserve Bank as the share of paper clearing in retail payments has come to trickle in FY2020, show the latest RBI data. In FY2020, the share of paper clearing in total retail payments plunged to just 2.96 per cent in terms of volume and to 20.08 per cent in terms of value, the data showed. In FY2016, when the central bank began to push digital payments aggressively on the back of the contentious note-ban, paper/cheque clearings accounted for a high of 15.81 per cent in volume and nearly half in terms of value at 46.08 per cent of the total retail payments. That the efforts towards digitization have been very successful is clear from the steady fall in the share of paper clearing. From 15.81 per cent in volume and 46.08 per cent in terms of value in FY2016, the same shrunk to 11.18 per cent and 36.79 per cent, respectively, in FY2017. - Business Line

🍒 Women beneficiaries comprise maximum number of a/c holders under PMJDY at 55% : More than half of bank accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) are held by women beneficiaries, according to an RTI reply. However, there is no gender-wise data when it comes to amount held by women and men account holders. The number of accounts till September 9, 2020, under PMJDY was 40.63 crore, of which 22.44 crore accounts were held by women and 18.19 crore by men, said the RTI reply to Madhya Pradesh-based activist Chandra Shekhar Gaur. The deposits in these PMJDY accounts witnessed an 8.5 per cent rise till early September of the current fiscal year to nearly Rs 1.30 lakh crore, according to the information provided by the finance ministry. The total balance under the PMJDY accounts on April 1, 2020, was Rs 119,680.86 crore, which grew by 8.5 per cent to Rs 129,811.06 crore by September 9, 2020, the government said in the Right to Information (RTI) query. - economic times

🍒 Shriram Housing Finance looking at 50-60% increase in loan disbursement in FY21 : Mortgage lender Shriram Housing Finance is looking at around 50-60 per cent increase in loan disbursement to Rs 1,800 crore in the current financial year, a top company official said. The company, promoted by Shriram City Union Finance, had disbursed Rs 1,127 crore in the fiscal ended March 31, 2020. In the first quarter, we didn’t do much business. Despite that, in FY21, we will do about 50-60 per cent more business than what we did in FY20. We will end this year with a disbursement of Rs 1,800 crore, the company’s managing director and CEO Ravi Subramanian told PTI. In the first quarter of the current fiscal, the housing financier disbursed Rs 77.4 crore, a decline of 68.1 per cent year-on-year, owing to the nationwide lockdown imposed to contain the spread of the coronavirus. In the second quarter of FY21, it disbursed around Rs 520 crore, which was 20-25 per cent more than what it disburses in every quarter, he said. The biggest tumbling block was COVID-19 in Q1, but we have come back on trajectory. Growth in Q3 is more than Q2, and growth in Q4 will be more than Q3, he said. - financial express

🍒 DHFL lenders staring at ₹65,000-crore haircut : Lenders to Dewan Housing Finance Corporation Ltd (DHFL) may have to take a ₹50,000-65,000 crore haircut, with none of the four bidders offering more than ₹20,000 crore to acquire the debt-laden housing finance company (HFC) under the Insolvency and Bankruptcy Code (IBC). The bidding process ended on Saturday with offers submitted by Adani Group, Piramal Enterprise, US-based distressed asset fund Oaktree Capital and Hong Kong’s private banking firm SC Lowy. - Business Line

🍒 DLF raises Rs 2,400 crore from SBI to refinance debt, fund ongoing commercial projects : Realty major DLF's rental arm DCCDL has raised Rs 2,400 crore debt from India's largest lender SBI to refinance its existing debt and fund future expansion plans, a senior company official said. In an interview with PTI, DLF's group chief financial officer (CFO) Vivek Anand said the debt has been raised at a very attractive interest rate of 7.35 percent, enabling the company to reduce interest cost. DLF Cyber City Developers Ltd (DCCDL), the joint venture between DLF and Singapore sovereign fund GIC, has 33 million sq ft of office and retail properties generating an annual rental income of Rs 3,500 crore. DLF holds 66.66 percent stake in DCCDL while GIC has the rest. "DCCDL has secured funding of Rs 2,400 crore from India's largest public sector bank SBI. It sets a benchmark for lease rental discounting (LRD) in the country," Anand told PTI. - moneycontrol

🍒 Gems, jewellery exports may dip 20-25%; growth expected by FY22: GJEPC : The gems and jewellery export is expected to decline by 20-25 per cent this fiscal year compared to 2019-20 due to the disruptions caused by the COVID-19 pandemic, GJEPC said on Saturday. During 2019-20, the exports stood at Rs 2,52,249.46 crore, according to data provided by the Gem and Jewellery Export Promotion Council of India (GJEPC). “We expect the exports to witness a decline of 20 25 per cent in 2020-21, compared with last year. With demand improving gradually, we should be at our 2019-20 levels next year. Growth will come back only maybe by 2021-22,” GJEPC chairman Colin Shah said at the virtual press conference about the closing of 5-day Virtual India International Jewellery Show (IIJS).- moneycontrol

🍒 Gold discount shrinks sharply in local markets amid festive demand : Amid signs of rising festive and wedding demand for gold jewellery, the bullion discount to the landed price in the key cities of Mumbai and Ahmedabad plummeted to $1 an ounce (31.1 gms appx) on Friday from a steep $44 early last month, industry sources said. Further, net bullion imports, which plunged 95% year on year to 11.6 tonnes in the June quarter, are expected to be much higher in Q3 , said jewellery retailer Kumar Jain of UT Zaveri in Mumbai's famous Zaveri Bazaar gold market. The pandemic-induced lockdown dragged down Q2 demand , but with restrictions easing steadily since then and many weddings deferred to the fourth quarter, jewellery demand is expected to improve in Q3 and Q4. Kumar Jain said that sales at his store are estimated to be 60-70% of the previous festive year , corresponding to the December quarter. - economic times

🍒 6 of top-10 most valued firms' combined market valuation tumble over Rs 1 lakh crore : The combined market valuation of six of the country’s top-10 most valued firms declined by Rs 1,02,779.4 crore last week, with Reliance Industries (RIL)taking the biggest hit. Over the past week, the Sensex lost 526.51 points or 1.29 per cent. Reliance Industries Limited (RIL), Tata Consultancy Services (TCS), HDFC Bank, ICICI Bank, HCL Technologies and Bharti Airtel suffered losses in their market capitalisation during the week, while Hindustan Unilever Limited, Infosys, HDFC and Kotak Mahindra Bank were the gainers. The valuation of RIL tumbled Rs 39,355.06 crore to reach Rs 14,71,081.28 crore.- moneycontrol.

18.10.2020: Today's Banking / Financial News

18.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI imposes Rs 4.5-cr penalty on IndusInd Bank for non-compliance with its directions : The Reserve Bank of India has imposed a monetary penalty of Rs 4.5 crore on IndusInd Bank Ltd for non-compliance with certain provisions of directions issued by it. In a statement, the central bank said the non-compliance was with respect to certain provisions of directions issued by it on ‘Exposure Norms’, ‘Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances’, among others. RBI also flagged non-compliance of its directions on ‘SPARC (Supervisory Programme for Assessment of Risk and Capital) – Monitoring of Information Submission by bank’, ‘Creation of a Central Repository of Large Common Exposures - Across Banks’ read with directions on ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’, and ‘Disclosure in Financial Statements - Notes to Accounts’. According to the central bank, the statutory inspection of IndusInd Bank with reference to its financial position as on March 31, 2019, and the Risk Assessment Report (RAR) revealed, inter-alia, non-compliance with the directions issued by RBI. - Business Line

🍒 SBI warns customers against making these 5 mistakes or risk emptying bank account : State Bank of India (SBI) has issued a warning for its customers. Amid rising fraud incidents, customers need to be careful. Through ATMs fraud is being done apart from online transactions. To keep bank accounts safe and secure, SBI has given some advice to its customers. Customers should not make such a mistake during the festive season that their bank account should be empty, SBI warned its customers. Here are 5 mistakes SBI has advised its customers not to do: - *OTP, PIN, CVV, UPI PIN* should not be shared. Do not share OTP (one time password), PIN number, debit or credit card CVV number with any one, according to the State Bank. Most of the frauds are on phone calls, by asking you to change password, OTP or CVV number written on the back of your card and also warn you to block your card. - Business Line

🍒 Bank of Baroda inks pact with Mahindra & Mahindra for tractor finance biz : To push agriculture finance, state-owned Bank of Baroda (BoB) on Friday said it has entered into a pact with Mahindra and Mahindra for tractor finance business. The lender, through its over 5,000 rural and semi-urban branch network, will provide tractor loan facility to customers of Mahindra and Mahindra. This memorandum of understanding (MoU) will give a boost to agri business and will help farmers in availing hassle-free credit facilities for buying tractors, BoB Executive Director Vikramaditya Singh Khichi said. The tractor financing scheme was first piloted in the UP zone for a year and it has been successful, he said adding that this is being expanded into 11 zones of the bank. The bank has tied up with Gromax under the Mahindra stable as the preferred brand, he added. - Business Standard

🍒 HDFC Bank reports 18.4 per cent increase in Q2 net profit : Private sector lender HDFC Bank reported an 18.4 per cent increase in its standalone net profit for the second quarter of the fiscal at ₹7,513.11 crore as against ₹6,344.99 crore a year ago. For the quarter ended September 30, 2020, the bank’s total income grew by 6.9 per cent at ₹36,069.42 crore compared to ₹33,755 crore a year ago. Net interest income for the second quarter this fiscal grew by 16.7 per cent to ₹ 15,776.4 crore from ₹13,515.0 crore for the quarter ended September 30, 2019. In a statement on Saturday, HDFC Bank said this was “driven by asset growth of 21.5 per cent and a core net interest margin for the quarter of 4.1 per cent”. Other income grew by nine per cent to ₹6,092.45 crore in the quarter under review. - Business Line

🍒 HDFC Bank board appoints Sashidhar Jagdishan as its MD & CEO : The board of directors of HDFC Bank on Saturday approved appointment of Sashidhar Jagdishan (Sashi) as Managing Director and Chief Executive Officer of bank for three-year term from October 27, 2020. The Reserve Bank of India has already approved Jagdishan’s appointment. The appointment shall be placed before the shareholders of the Bank for their approval, by way of postal ballot (through remote e-voting), bank said in filing with BSE. Sashi joined the Bank in 1996 as Manager in the Finance function. He became business Head (Finance) in 1999 and was appointed as Chief Financial Officer in the year 2008. He played a pivotal role in aligning the organisation in achieving the strategic objectives over the years. Prior to his appointment as Managing Director & CEO of the Bank, he was the Strategic Change Agent of the Bank in addition to overseeing the functions including Finance, Human Resources, Legal & Secretarial, Administration. He has completed his graduation in Science with specialisation in Physics. He is a Chartered Accountant by profession and also holds a Master’s degree in Economics of Money, Banking & Finance from the University of Sheffield, UK. - Business Standard

🍒 Paytm users to pay 2% charge on using credit cards to top up wallets : Paytm users will have to pay a 2 per cent fee on the amount added to their e-wallet using a credit card. Until now, users had to pay 2 per cent fee if they loaded more than ₹10,000 in their e-wallets via credit card in a month. A message saying “Nominal charge of 2 per cent is applicable on adding money using a credit card. A nominal fee is applicable since we pay high charges to your bank/payment network when you add money using a credit card. Please use UPI or debit card to add money for free” is displayed when customers attempt to add money to their Paytm wallet via a credit card. - Business Line

🍒 NHB levies penalty on CanFin Homes for non-compliance of SLR norms : National Housing Bank (NHB) has levied a penalty of ₹5,000 plus GST on CanFin Homes Limited for non-compliance concerning the provisions of its policy circular No 21. CanFin Homes Limited, on Saturday, in a regulatory filing to exchanges, said “The company is supposed to maintain SLR investments to the extent of 13 per cent of its outstanding public deposits and create floating charges on the same. The company has maintained SLR investment to the extent of 14.65 per cent. However, there was a shortfall of 0.59 per cent in the charge created. Hence, the company has represented the matter before NHB.” - Business Line

🍒 Franklin Templeton’s six debt mutual fund schemes generate Rs 8,302 cr since closure : Franklin Templeton Mutual Fund has said its six shut schemes have received ₹8,302 crore from maturities, pre-payments and coupon payments since closing down in April. Franklin Templeton MF shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market. “The six schemes have received total cash flows of ₹8,302 crore as of October 15, 2020 from maturities, pre-payments and coupon payments since April 24, 2020,” Franklin Templeton MF said in a statement. - Business Line.

17.10.2020: Today's Banking / Financial News

17.10.2020: Today's Banking / Financial News at a Glance

🍒 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

16.10.2020: Today's Banking / Financial News

16.10.2020: Today's Banking / Financial News at a Glance

🍒 5% of total bank loans could be restructured due to Covid: CARE Ratings : CARE Ratings has estimated that 5% of banking systems loans could be recast under the one-time restructuring (OTR) scheme available to companies impacted by the pandemic. An earlier estimate by India Ratings had estimated that up to 7.7% or Rs 8.4 lakh crore of the total bank credit could get restructured or if they do not qualify for restructuring, may slip into bad loans. CARE also said that the OTR scheme is expected to dilute Covid-19’s impact on the asset quality of banks. “As per trends in reduction of moratorium over Phase I & II, moratorium levels could reduce even further and a few companies would not need to have their debt restructured as they would be able to service their debt obligations due to the opening up of the economy,” the rating agency noted in a report. “Approximately, 4% - 5% of overall bank credit outstanding would be restructured under the OTR scheme.” The impact of restructuring could be lesser also because specific segments like NBFCs have been kept out the ambit of scheme along with not allowing loans classified as SMA 1 and SMA 2 under this bracket. - economic times

🍒 Banks need Artificial Intelligence for corporate lending: Krishnamurthy Subramanian, Chief Economic Advisor : Indian banking sector needs to use emerging technologies such as Artificial Intelligence (AI) and machine learning for corporate loans for quality lending, Chief Economic Advisor Krishnamurthy Subramanian said on Thursday. Speaking at a virtual summit organised by Intel and Indian School of Business, he said lending to MSMEs (Micro, Small and Medium Enterprises) in the country has remained stagnant for the last 15 years indicating that banks have not developed models to actively lend to the sector. "So, the Indian banking sector can really benefit from implementing this (AI and machine learning) especially in the context of corporate lending...And evidence shows that when the better models are employed, banks that employ such models are able to grow their balance-sheets in a very robust manner without suffering quality issues. This is a very important opportunity," he said.- economic times

🍒 Disbursed Rs 5,500-crore retail credit via YONO in Sept quarter: SBI chief : State Bank of India (SBI) witnessed an 83% year-on-year (Y-o-Y) growth in disbursement of retail credit through its digital platform YONO (you only need one) during the September quarter. In an interview with CNBC TV18, SBI chairman Dinesh Kumar Khara said the lender disbursed Rs 5,500-crore retail credit through YONO during the September quarter, compared with Rs 3,000 crore disbursed in the same period last year. Khara also said SBI was not looking to help Lakshmi Vilas Bank in any manner. The Chennai-based private sector bank was jolted on September 25 when its shareholders voted out seven directors on its board, including chief executive officer S Sundar and promoters KR Pradeep and N Saiprasad. Following this, the Reserve Bank of India (RBI) appointed a three-member team to run the bank under Meeta Makhan as chairperson and Shakti Sinha and Satish Kumar Kalra as members. - Financial Express

🍒 No recast for accounts that cured 30-day default after March 1: RBI : Loan accounts that were in default for over 30 days as on March 1 will not be eligible for restructuring under the Covid resolution scheme even if they cleared their dues thereafter, the Reserve Bank of India (RBI) said in a set of frequently asked questions (FAQs). Sectors for which no eligibility ratios have been laid out by the central bank will be able to avail of recast in accordance with banks’ assessments, the FAQs said. Also, the actual debt that may be considered for resolution will be the outstanding as on the date of invocation. “Such accounts (which were more than 30 DPD on March 1, 2020, but subsequently got regularised through receipt of overdue) are ineligible for resolution under the Resolution Frame work as the Resolution Framework is applicable only for eligible borrowers which were classified as standard, but not in default for more than 30 days as on March 1, 2020. However, such accounts may still be resolved under the Prudential Framework dated June 7, 2019,” the RBI said. - financial express

🍒 Indian Bank inks MoU with Ministry, SIDBI for street vendors : Public sector Indian Bank has signed a memorandum of understanding (MoU) with the Ministry of Housing and Urban Affairs and with Small Industries Development Bank of India (SIDBI) for payment of subsidy to street vendors under the Centre's SVANidhi Scheme. Indian Bank MD and CEO Padmaja Chunduru said it is a privilege for the bank to associate with the scheme which is the flagship scheme of the government in line with Atmanirbhar Bharat. The Centre introduced the Prime Minister Street Vendor's AtmaNirbhar Nidhi (SVANidhi Scheme) to provide loans to the vendors and hawkers, among others. "Indian Bank has developed an integrated online system to make payments of interest subvention and cash incentives to all street vendor-beneficiaries across the country through the Direct Benefit Transfer," Chunduru said.- economic times

🍒 Indian Bank follows SBI, sets up portal to restructure retail loans : Indian Bank has put in place a digital platform for restructuring all retail loans, allowing the borrowers to submit recast requests on the portal and check eligibility criteria. The portal which became active from October 5 allows borrowers to submit the requests for restructuring their personal loans like home loans, education and vehicle loans among others. “The requests will be registered with a unique reference number and through SMS, customers will be informed to visit their respective Indian Bank Branches with required documents for completion of restructuring process,” the public sector lender said in a statement. Country’s largest lender State Bank of India had last month announced a similar online portal to restructure retail loans.- economic times

🍒 Indian Bank to pay subsidy, cash back to street vendors under PM SVANidhi : Indian Bank on Thursday signed a Memorandum of Understanding (MoU) with the Ministry of Housing and Urban Affairs (MoHUA), and Small Industries Development Bank of India (Sidbi) for payment of subsidy and cash incentives to street vendors under PM SVANidhi Scheme. Padmaja Chunduru, MD & CEO, Indian Bank said street vendors are a very important constituent in the urban economy and offer varied services to the public. They are engaged in productive activities for their livelihood. - Business Standard

🍒 Indian Bank launches e-facility for restructuring of personal loans : State-run Indian Bank on Thursday said it has launched a facility on its website for its personal loan borrowers to submit the requests for restructuring of their loans under the Reserve Bank of India's one-time loan recast norms. In August this year, the RBI had announced a one-time restructuring scheme for personal loan and corporate borrowers affected by COVID-19 stress. The bank said the requests for restructuring from retail borrowers be registered with a unique reference number. The lender will inform customers through SMS to visit their respective branches with required documents for completion of restructuring process, the release said. Retail borrowers who have not applied online can also visit their branch along with the required documents for considering the restructuring of their personal loan accounts, the lender said. Last month, State Bank of India (SBI) had launched a facility on its website to help retail customers check their eligibility for one-time loan restructuring. - Business Standard

🍒 ICICI Bank customers can create FD, pay utility bills on WhatsApp : Private sector lender ICICI Bank on Thursday announced the launch of services that would enable its customers to create fixed deposits, pay utility bills and access details of trade finance instantly on WhatsApp. “Services like opening FDs and paying utility bills are available for customers. The trade finance services are being piloted with some select corporates; they will be available for all in next few days,” it said in a statement, adding that the service for recharge of prepaid mobile phones will also be available shortly on WhatsApp. Retail customers will be able to create FDs, pay bills for electricity, cooking gas and postpaid mobile phones through WhatsApp while corporates and owners of MSMEs can check trade finance related services like customer ID, Import Export (IE) code, limit availability of all credit facilities availed from the bank, status of pending inward remittances and history of inward remittances. - Business Line

🍒 Pension assets under management cross ₹5 lakh crore mark: PFRDA chief : Pension assets under management (AUM) have crossed the ₹5-lakh crore mark to touch ₹5.05-lakh crore now, PFRDA Chairman Supratim Bandyopadhyay said on Thursday. “This is a small milestone we have achieved. We have to cross many such milestones before we can really provide old age security to people at large. Pension as a concept is still at a nascent stage in India,” Bandyopadhyay told a virtual press conference. He also said that the overall AUM could touch close to ₹6-lakh crore by end March next year. For the current fiscal, Bandyopadhyay expects the AUM to continue clocking at least 30 per cent compounded growth as was seen in recent years. Bandyopadhyay said there has been steady inflows into NPS across all segments including government, private corporates, retail. The returns generated over long period of time besides the income tax benefits has made NPS an “unbeatable” product. - Business Line

🍒 Lakshmi Vilas Bank gets board's nod to raise Rs 500 crore via rights issue : Cash-strapped Lakshmi Vilas Bank on Thursday said its board has approved plans to raise up to Rs 500 crore through a rights issue. The board at its meeting held on October 15, 2020, has considered and approved the raising of funds by issuance and allotment of equity shares or such other eligible securities for an aggregate amount of up to Rs 500 crore by way of a rights issue, LVB said in a regulatory filing. Last week, the private sector lender had informed about receiving a non-binding offer from Aion-backed non-banking finance firm Clix Group for a merger. The old-generation Chennai-based private sector bank, which has been on the lookout for an investor and capital for long, had to face a blow in late September when its shareholders voted out seven directors of its board, including CEO S Sundar and promoters K R Pradeep and N Saiprasad. Business Standard

🍒 Equitas Small Finance Bank fixes IPO price band at Rs 32-33 per share : Equitas Small Finance Bank, the subsidiary of Equitas Holdings, has fixed the price band at Rs 32-33 per shares for its forthcoming initial public offering. The IPO is going to open for subscription on October 20 and close on October 22. The issue for anchor invetors will open for a day on October 19, a day before the issue opening for public. One can bid for a minimum of 450 equity shares and in multiples of 450 shares thereafter. The public issue consists a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by Equitas Holdings (which valued at Rs 237.6 crore at upper price band), hence the total issue size stood at Rs 517.6 crore. - Financial Express

🍒 Indian banks log the worst total returns in Q3 2020; Bangladeshi lenders shine : Smaller banks from Bangladesh, Pakistan and China emerged as the best-performing banking stocks in Q3 2020, while its Indian peers logged the worst total returns, according to data by S&P Markets Intelligence. According to the analysis, 16 of the 20 largest banks in the Asia-Pacific region saw declines in their market capitalisation in Q3. "Indian bank stocks have been on a declining trend in 2020, with major lenders falling between 12 percent to more than 50 percent between January 1 and August 31," the report said. - moneycontrol.

🍒 LIC Housing Finance expects Q3 sales in high double-digits : On the back of "a much-more-than-expected recovery in demand since the past two months", India's second-largest pureplay mortgage lender LIC Housing Finance expects a bumper festival season as it eyes loan growth to be in double-digits, a top company official has said. The LIC arm reported positive numbers even in the June 2020 quarter which was a washout for the entire economy, with a net income of Rs 817.48 crore, up 34 percent y-o-y, even though its net interest income rose only 3 percent to Rs 1,220.61 crore and the loan sales grew 6 percent. - moneycontrol.

🍒 Banks can restructure loans to COVID-19-impacted real estate firms on the basis of project rather than developer : The Reserve Bank of India (RBI) giving the go-ahead to banks to restructure the loans of real estate firms at the project level rather than developer level is expected to benefit both homebuyers as well as real estate developers. The move may ease liquidity and enable construction to recommence in projects that were stuck due to the impact of the COVID-19 pandemic. “Both buyers and developers will stand to gain when stuck projects will eventually see the light of the day. From a buyers' standpoint, they will no longer have to wait for an indefinite period for their homes," said Anuj Puri, chairman - ANAROCK Property Consultants. - moneycontrol.com

🍒 Supreme Court's stay on NPA classification will give shocker for banks in Q3 and Q4. Here’s why : The Supreme Court’s interim stay on banks from classifying borrowal accounts that are standard as on August 31 as non-performing assets (NPAs) till a final order could mean a major bad loan shocker for the industry in the third and fourth quarters, analysts and banking sector experts said. This will have implications since banks need to set aside money for bad loans under the Reserve Bank of India (RBI) norms. The Supreme Court’s September 3 interim order has already been used by one of the banks—Karnataka Bank—which announced its second-quarter results early this week. The lender has shown a declining NPA trend presumably because it has not tagged any accounts NPA that are standard on its books as on August 31. Other banks are also likely to do this, showing lower NPA numbers in the second quarter. The next hearing of the Supreme Court is on November 2. This means, at least till that date, the interim directive of the SC will continue. "NPAs are likely to go up given the economic situation and job losses,” said RK Bansal, Managing Director and CEO of Edelweiss Asset Reconstruction Company. “There are two main variables here. The SC order and the one-time loan recast (OTR). Those accounts which are not eligible for OTR and are not able to pay after moratorium will reflect as bad loans on the books of banks in Q3 and Q4. In Q2, banks cannot disclose these accounts as NPAs till the SC passes final orders” said Bansal. - moneycontrol

🍒 Will exceed guidance of 15% growth in FY21: Muthoot Finance : NBFC Muthoot Finance is confident of exceeding its guidance of 15% growth for the current fiscal year with demand for gold loan appearing to be robust. Muthoot Finance managing director George Alexander Muthoot told FE that business had achieved the pre-Covid level. “First quarter business was not good, but the second quarter business is extremely good for gold loans. Last year, our total business grew by 22% and this year we will grow more than 15 %,” he added. The gold loan company with more than four thousand branches was closed till April 23 due to the Covid-induced nationwide lockdown. “Demand for credit is good because people are thinking of re-starting business. Gold loan is easy and quick funding for small traders and MSME .In the long-run they manage to get other loans from the banks. Our average ticket size of gold loan has also increased from Rs 35,000 to Rs 48,000 because gold prices have gone up,” he said. - financial express

🍒 An Odisha-based micro lender at the centre of a ₹251 crore loan fraud : A fraud of ₹251 crore unearthed at a small Odisha-based non-banking financial company (NBFC) micro-finance institution (MFI) has put the spotlight on “bogus accounts" as the modus operandi for fund diversions. Sambandh Finserve Private Limited (SFPL) has disclosed to a rating agency that it has defaulted on its repayments because of a fraud in its books. The company with debt of ₹433 crore is undergoing an internal investigation as ordered by its board. In a letter to the board on 7 October, four senior company executives detailed how the actual assets under management (AUM) is approximately ₹140 crore as against the reported figure of ₹391 crore as on 30 September. “The reported AUM is inflated and non-existent. The gap is approximately ₹251 crore," the letter alleged, a copy of which has been reviewed by Mint. - Live Mint

🍒 Saral Jeevan Bima will provide financial security to lower-income families : Saral Jeevan Bima, the upcoming new standard life insurance policy, will add to the financial security of the commoners and families with lower incomes. In addition, it also addresses the long-felt need for a simple policy without the complication of trying to understand the terminology of a policy document. Even for an educated person, the wordings of an insurance policy are difficult to understand, as there are many term products in the market with varying terms and conditions. - Business Line

🍒 All life insurers must offer standard term policy: IRDAI : Buying life cover will soon be easier as the insurance regulator has mandated all life insurers to offer a standard individual term life insurance product. The standard plan, ‘Saral Jeevan Bima’, will have to be offered by all insurers from January 1, 2021, the Insurance Regulatory and Development Authority of India (IRDAI) said in a circular issued today. “There are many term products in the market with varying terms and conditions. Customers who cannot devote adequate time and energy to make informed choices find it difficult to select the right product and products may not be available for the intended sum assured,’’ the regulator said.- Business Line

🍒 DBS Bank India sees V-shaped recovery for Indian economy : DBS Bank India, a wholly-owned subsidiary of Singapore-headquartered DBS Bank, will continue to adopt a ‘phygital’ — a mix of physical and digital outreach — approach to expand in the Indian market even as it redoubles efforts on digitally led fulfilment mode of doing business, said a top official said. “We realise that a certain amount of physical nearness is also essential if we have to expand and address the SME client base in the country. SME is where the future is and growth will come from,” Niraj Mittal, MD and Country Head - Institutional Banking Group, DBS Bank India, told BusinessLine in an interview. - Business Line

🍒 Digital adoption will improve return on equity for Indian banks: Morgan Stanley : Increased digital adoption by Indian lenders would lead to higher return ratios in the next few years. In its forecast Morgan Stanley has said that banks could see a rise of atleast 20 basis points in their return on equity, if the digital drive continues at the current pace. The forecast reflects faster growth in retail and SME segments, increased cross-sell and faster product delivery and better risk-adjusted returns given greater data availability. Morgan Stanley believes that the stronger Indian banks are well placed to manage the increasing competition from the fintechs. “We forecast digitalisation will further add 20bps to Indian banks' ROE by 2025, with a gap of nearly 400bps between the digital leaders and the slow adopters,” Morgan Stanley said in a report. “Cost ratios for India are much higher relative to the region, and a faster pace of digitalisation can further help improve productivity.” - financial express

🍒 Gold prices steady at Rs 50,663 per 10 gram, silver declines by Rs 571 per kg : Gold prices were steady at Rs 50,663 per 10 gram in the Mumbai retail market on a weaker rupee and subdued global cues. The precious metal continues to trade lower on a firm dollar and doubts over US fiscal stimulus before November 3 election. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,407 plus 3 percent GST, while 24-carat 10 gram was Rs 50,663 plus GST. The 18-carat gold quoted at Rs 37,997 plus GST in the retail market. Silver prices dropped by Rs 571 to Rs 60,159 per kg from its closing on October 14.

🍒 Cut-off time restored to 3 pm for buying/selling MF units : SEBI has restored the cut-off timing for buying and selling of mutual fund units to 3 pm, effective Monday. In a tweet Nilesh Shah, Chairman, Association of Mutual Funds in India, said cut-off timing for both subscription and redemption for all schemes other than those categorised as debt schemes and conservative hybrid fund is being restored to original cut-off timing of 3 pm, effective, October 19.

🍒 Sensex plunges over 1,000 points amid global sell-off : The US elections in November and the absence of major announcements by the government on the economic front have affected the stock market sentiment. Analysts, despite Thursday’s sharp fall in key benchmark indices , are of the view that no major fall is in the offing. The BSE Sensex fell 2.61 per cent, or 1,066 points, to close at 39,729. The NSE Nifty was down 2.43 per cent, or 290 points, at 11,680. The small- and mid-cap indices have been flat for nearly two weeks now. “Thursday’s fall in stock markets was more technical. The Nifty index touched 12,000 levels for the first time after Covid-19 fall and it was a crowded street with long positions. It is likely that Nifty may slip back to 11,500 or nearby levels if the fall continues for a day or two. But it does not seem that a market correction could go beyond that,” said Rohit Srivastava, chief strategist, Indiacharts

🍒 Rupee settles 5 paise lower at 73.36 against dollar : The rupee pared its initial gains and settled 5 paise lower at 73.36 (provisional) against the US dollar on Thursday tracking heavy selling in domestic equities and strengthening American currency. At the interbank forex market, the rupee opened at 73.32 against the greenback, and after witnessing a volatile trading session closed at 73.36, lower by 5 paise from its previous c