26.10.2020: Today's Banking / Financial News

 26.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI Governor tests positive for Covid-19 : The Reserve Bank of India Governor Shaktikanta Das has tested positive for Covid-19 but is asymptomatic. “I have tested Covid-19 positive. Asymptomatic. Feeling very much alright. Have alerted those who came in contact in recent days. “Will continue to work from isolation. Work in RBI will go on normally. I am in touch with all Deputy Governors and other officers through VC and telephone,” the Governor said in a tweet. In his statement in the minutes of the monetary policy committee meeting, Das emphasised that monetary policy has to provide adequate support to ensure a robust revival of the economy from the devastating effects of Covid-19, while at the same time ensuring that any persistence of elevated inflation does not lead to an unanchoring of inflation expectations. “With the supply side disruptions seen to drive the current inflationary pressures likely to be transient and expected to wane out in the months ahead as the economy normalises, there is merit in looking through the current high levels of inflation and persevere with the accommodative stance for monetary policy as long as necessary to revive growth on a durable basis,” said the Governor, who is leading RBI’s fightback against the impact of Covid on the economy. - economic times

🍒 Yes Bank lacked cost control; aim to cut operational expenses by 20% in FY21: CEO Prashant Kumar : Yes Bank lacked a culture of cost control, and under the new management, the lender is targeting to reduce operational expenses by 20 per cent in FY21 by rationalizing branches and ATMs, giving up unwanted leased spaces and renegotiating rents, a top official has said. The city-based lender is experiencing delays in loan recovery efforts as big defaulters are approaching courts, its new chief executive and managing director Prashant Kumar told PTI. Kumar was asked to lead Yes Bank in March after its rescue by a SBI-led consortium of lenders after alleged governance lapses under co-founder and chief executive Rana Kapoor. The bank reported a 21 per cent reduction in operating expenses in September quarter. "Unfortunately, there was no control on costs," Kumar said, adding that a global consultant has charted out a step-by-step agenda to reduce spending through which it aims to save 20 per cent on operating expenses in FY21 over FY20. - economic times

🍒 DHFL Committee of Creditors to discuss four offers on Monday : The Committee of Creditors (CoC) to the beleaguered DHFL will Monday begin discussing the four offers that lenders have received for the debt laden housing finance company (HFC). There will be a presentation on the offers made during the bidding process that ended on Saturday, sources said. Lenders will get to know who has bid what and the conditionalities, they said. It may be recalled that Oaktree Capital, which offered the highest recovery to lenders, has offered Rs 28,000 crore for the entire company. The others in the fray are Adani Group, which is learnt to have offered about Rs 1,600 crore for the wholesale portfolio and slum redevelopment asset; Piramal Enterprises, which has offered about Rs 15,000 crore for the retail portfolio; and Hong Kong’s private banking firm SC Lowy. It may take another fortnight before the winning bidder is selected, banking industry sources said. - Business Line

🍒 Prashant Kumar, tasked to lead YES Bank's revival, braces for Covid impact : The chief executive officer of Yes Bank Ltd., who helped the lender emerge from India’s biggest-ever bailout, is girding for fallout from the pandemic. The coronavirus outbreak has “created a problem” on the loan book, even as progress has been made on fixing key drawbacks such as weak governance, fund-raising challenges and declining deposits, Prashant Kumar said in a phone interview Saturday. It’s “very, very difficult to estimate the impact,” Kumar said. “With the fundamental issues taken care of, we want to control costs and increase profit to deal with any adverse impact on the credit due to the pandemic.” Yes Bank returned to profit in the quarter ended September and Kumar made provisions for potential covid-related losses. When regulators seized the lender in March, its depositors had been fleeing and the bank was struggling to attract investors. State Bank of India bought a stake in Yes Bank and Kumar was plucked from the government-controlled lender to lead the turn around. His predecessor, Rana Kapoor, who co-founded Yes Bank in 2003 and built it into India’s fastest-growing lender, was forced out by the central bank in 2018 amid a dispute over reporting of bad debts. “The market wasn’t even sure how much rot was still in the loan book,” Kumar said. - Business Standard

🍒 Bitcoin rallies to reach highest level in over a year with PayPal support : Bitcoin has breached the $13,000-mark for the first time since July 2019 after online payments company PayPal decided to allow the customers to buy, sell and hold this and other virtual coins using its online wallets. PayPal customers will also be able to use cryptocurrencies to shop at the 26 million merchants on its network starting in early 2021. The Calfornia-headquartered company plans to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first. The service will be available to PayPal account holders in the US in the coming weeks. The company plans to expand the features to Venmo and select international markets in the first half of 2021. The move has been welcomed by cryptocurrency experts and enthusiasts in India as well. "PayPal offering services to its customers to buy or sell cryptocurrencies is a positive sign for the overall ecosystem. Given the strong distribution and reach of PayPal, the huge user base of over 346 million globally, and many merchants around the world, with this service, it has given direct access to cryptocurrencies to numerous users," said Sumit Gupta, CEO and co-founder, CoinDCX, a Bain Capital-backed cryptocurrency exchange. "Although the users can't redeem their Bitcoin outside PayPal, I believe it is a good starting step and it is likely that other major global payment players will follow the lead." - Business Standard

🍒 LIC IPO may spill over to next fiscal : The mega initial public offering of Life Insurance Corp (LIC) may spill over to the next fiscal as the government will first look at the independent actuarial valuation of the country''s largest insurer, a top official has said. Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the pre-IPO work of LIC is going on at four stages -- appointment of advisors for ensuring compliance, legislative amendment, LIC''s internal software changes to come out with its ''embedded value'' and appointing an actuary for vetting LIC's actuarial valuation. The government plans to amend the Act under which the state-run LIC was set up to prepare for the sale. A stake sale in LIC is crucial for meeting a record Rs 2.1 lakh crore disinvestment target set for the current fiscal ending March 31, 2021. - moneycontrol.com

🍒 IRDAI proposes changes in insurance advertisement regulations : In a bid to protect consumers, regulator IRDAI has proposed to prohibit insurers from issuing advertisements that make claims which are beyond reasonable expectations of performance. The unfair and misleading advertisements will include those which fail to clearly identify the product as insurance and describe benefits that do not match the policy provisions, the regulator said in the draft Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 2020. The Insurance Regulatory and Development Authority of India (IRDAI) is seeking to come out with new advertisement regulations and has invited comments from stakeholders on the exposure draft by November 10.- moneycontrol.com

🍒 LTC cash voucher scheme: How government employees can avail benefits : Central government employees can submit multiple bills of goods and services purchased in their own name to avail the benefit of the LTC (Leave Travel Concession) cash voucher scheme, according to the Finance Ministry. The Expenditure Department, under the Ministry, has issued a set of FAQs (Frequently Asked Questions) on LTC cash voucher scheme, clarifying that an employee can also avail the scheme utilising the applicable LTC fare without leave encashment. The government on October 12 announced the LTC cash voucher scheme under which central government employees can purchase any goods or services with GST rate of 12 per cent or above to avail the benefit. Till now, employees got LTC benefits only on travels made, or had to forgo the amount.- moneycontrol.com

🍒 FPIs remain net buyers in October so far amid better than expected financial results : Foreign portfolio investors (FPI) remained net buyers in Indian markets in October so far, pumping in a net ₹17,749 crore in the month as better than expected quarterly results, the opening of the economy, and resumption of business activities kept investors’ interest intact. In equities, FPIs invested a net sum of ₹15,642 crore and the debt segment saw an inflow of ₹2,107 crore during October 1-23, the depositories data showed. The total net investment during the period under review stood at ₹17,749 crore. - Business Line

🍒 Franklin Templeton to move Supreme Court against HC order to wind up six debt schemes : Franklin Templeton India plans to move the Supreme Court against the Karnataka High Court order making it mandatory to seek investors approval for winding up the six debt schemes even while upholding Trustees decision to close down the scheme. In a note to investors, Sanjay Sapre, President, Franklin Templeton Asset Management (India) said on basis of initial review the fund house believes it may be necessary to appeal aspects of the order in the Supreme Court even while the fund house is still in the process of studying the order. - Business Line

🍒 Six of top 10 most valued firms add Rs 86,684 crore in m-cap : Six of the top 10 most valued Indian firms added a cumulative Rs 86,683.71 crore in market valuation last week, with HDFC twins emerging as the biggest gainers. On the top 10 chart, HDFC Bank, HDFC, ICICI Bank, Kotak Mahindra Bank, Bharti Airtel and HCL Technologies were gainers. While, Reliance Industries Ltd (RIL), Tata Consultancy Services (TCS), Hindustan Unilever Ltd (HUL) and Infosys saw erosion in their market valuation. HDFC Bank, India’s biggest private sector lender, witnessed its valuation soar by Rs 20,198.59 crore to stand at Rs 6,80,092.72 crore. - Business Line.

25.10.2020: Today's Banking / Financial News

25.10.2020: Today's Banking / Financial News at a Glance

🍒 Credit outstanding of banks up ₹74,734 cr : Scheduled banks probably saw the highest fortnightly offtake of credit in the current financial year so far, with their overall credit outstanding going up by ₹74,734 crore. Deposits of scheduled banks during the reporting fortnight ended October 9 lagged credit growth for the first time in the current financial year, growing ₹43,893 crore in the reporting fortnight, according to the Reserve Bank of India’s (RBI) data on scheduled bank’s statement of position in India. The revival in credit growth comes in the backdrop of the economy entering the so- called “busy season” for credit offtake amid the raging pandemic. It may be pertinent to mention here that the RBI Governor Shaktikanta Das, on Wednesday, said that the country is almost at the doorstep of revival process. However, since the beginning of the current financial year, the scheduled banks’ credit outstanding is down by ₹30,069 crore. - Businesss Line.

🍒 ICICI Bank shuts down operations in Sri Lanka : ICICI Bank on Saturday said it has shut down operations in Sri Lanka after getting approval from the Sri Lankan monetary authority. The Monetary Board of the Central Bank of Sri Lanka, having considered the request made by ICICI Bank, has granted approval to close down business operation of the bank in Sri Lanka and cancel the licence issued to it, ICICI Bank said in a regulatory filing. “The Director of Bank Supervision being satisfied with the bank complying with the terms and conditions imposed by the Monetary Board, the licence issued to the bank to carry on banking business in Sri Lanka is cancelled with effect from October 23, 2020,” the private sector lender said.- Businesss Line.

🍒 Covid relief: No interest on interest for any loan up to Rs 2 crore : Bringing financial relief to millions of borrowers from financial system, the Department of Financial Services in the Finance Ministry has finally rolled out a much anticipated scheme that will provide interest compounding relief for the six month moratorium extended to mitigate COVID19 effect. The relief will come to borrowers in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30). This scheme has been rolled out after the Supreme Court directed the Centre to implement the relief as soon as possible and ahead of upcoming Diwali. Put simply, borrowers will need to pay interest only on simple basis for their outstanding borrowing (only those with aggregate borrowing upto ₹ 2 crore) during the six months COVID-19 induced lockdown period. The compounding effect will be made good by the government reimbursing the lending institutions. - Busines Line

🍒 Loan moratorium: Finance ministry issues guidelines to implement interest waiver : The finance ministry on Saturday announced the details of the implementation of the waiver of ‘interest on interest’ on loans of up to ₹2 crore for the six-month moratorium that was rolled out to mitigate the hardship of borrowers hit by the coronavirus pandemic. The Centre approved the scheme for ‘grant of ex-gratia payment of difference between compound and simple interest to borrowers of specified loan accounts’ from March 1-August 31. The ‘ex-gratia payment’ or the benefit will have to be routed through lending institutions, the ministry said in a circular addressed to banks and other lending institutions on October 23. The lender has to credit the amount to the account of the borrower on or before 5 November, giving relief to borrowers ahead of Diwali. Thereafter, lenders will have to claim reimbursement from the government by December 15. - Live Mint

🍒 NBFCs ask RBI again to open TLTRO window to access funds : Nonbank finance companies (NBFCs) have again called on the Reserve Bank of India (RBI) to give them access to the on-tap TLTRO (targeted long term repo operations) window, which provides long-term funds to banks at the policy rate. Despite the RBI introducing several tools to prop up bank funding to non-banks, the latter have been complaining of a persistent lack of liquidity, especially the smaller ones. The Finance Industry Development Council (FIDC), the NBFC lobby group, has urged RBI governor Shaktikanta Das to direct banks to lend to NBFCs under this scheme to ensure benefits reach a wider segment of borrowers. “We sincerely appeal to kindly consider our request to carve out a part of the on-tap TLTRO funds for the NBFCs including small NBFCs to avail of loans from banks under the aforesaid scheme for the purposes of on-lending to the desired sectors only,” FIDC said in a letter, a copy of which ET has seen. “We note that while sections including agriculture, MSME and retail are covered, NBFCs have not been included as a sector which could avail of the facility.” - economic times

🍒 Need cautious approach in further IBC suspension extension beyond December 25: SBI MD : State Bank of India (SBI), the country’s largest commercial bank, has advised a cautious approach in taking crucial decisions such as any extension of insolvency and bankruptcy code (IBC) suspension beyond December 25, stating that one would have to weigh pros and cons in continuing a relaxed environment.“RBI and government have rightfully (in the current Covid-19 times) given a relaxed environment till the months of September or October. Taking this beyond will actually give an impression that the borrowers are fundamentally weak and banks are likely to go back to square one where we are seen as promoting ever-greening etc. If that were to come as perception in the minds of investors, that would be a major negative for our economy,” Arijit Basu, Managing Director, SBI said at an international conference on IBC, organised by the Indian Institute of Insolvency Professionals of ICAI. - Business Line

🍒 Franklin Templeton can’t wind up 6 MF schemes without consent from unitholders: Karnataka High Court : In a big victory to investors, the High Court of Karnataka on Saturday said that the Franklin Templeton Trustees Services (FT Trustees) Pvt Ltd cannot implement its decision of prematurely winding-up six open ended debt oriented Mutual Fund (MF) schemes without obtaining the consent of the unitholders in the form of a simple majority. The consent of unitholders is mandatory as per Regulation 18(15)(a) of the Security Exchange Board of India (Mutual Funds) Regulations, 1996 when the majority of the trustees decide to wind up or prematurely redeem the units, the HCK said while declining to interfere with the FT Trustees’ April 20, 2020 decision to prematurely wind-up the six schemes. A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Ashok S Kinagi delivered the verdict while disposing of the petitions filed by unitholders, who had challenged the decision of the FT Trustees to wind-up the schemes without duly following the MF regulations.- Business Line

🍒 YES Bank: Gradual improvement in metrics...but a long road to recovery : Bolstered by the capital raised (nearly ₹15,000 crore) through the further public offering (FPO) in July, YES Bank has certainly eased concerns on the bank’s ability to continue as a going concern, with key capital and liquidity ratios (which were in breach in the March quarter) moving above the RBI’s regulatory requirement. But even as the bank’s earnings have moved into the black over the past two quarters and asset quality has remained stable, there are several risks that need a close watch. As such, most metrics indicate a long road to recovery for the beleaguered bank. In the latest September quarter, YES Bank reported a profit of ₹129 croreagainst a profit of ₹45 crore in the June quarter. A marginal improvement in core net interest income (3 per cent sequential growth) and fall in operating expenses (by 4.5 per cent QoQ) have aided earnings. Gross NPAs remained stable at ₹32,344 crore in the September quarter (₹32,703 crore in the June quarter). Advances saw a slight uptick (1.5 per cent QoQ), while deposits have grown 15 per cent sequentially. The bank’s Tier I capital ratio stood at 13.6 per cent (above the regulatory requirement of 8.875 per cent) thanks to the capital infusion through the FPO. Liquidity coverage ratio, too, has moved up to 107 per cent from about 40 per cent in the March quarter. - Business Line

🍒 Risk averse banks continue to lend with caution; bank credit up marginally, deposit growth stable : Bank credit grew marginally during the fortnight ending October 9 when compared to the previous 14 days that ended September 25, hinting at risk aversion in the banking industry. Total bank credit at the end of October 9 stood at Rs 103 lakh crore, compared to Rs 102.7 lakh crore at the end of September 25, data sourced by Care Ratings shows. When compared to the previous year, credit growth registered an increase of 5.7% on-year. On the other hand, deposits growth was at 10.5% on-year basis and remained largely stable from the previous fortnight. While bank credit might have grown marginally the growth levels registered during the same period last year were higher. “The credit growth decelerated to 5.1% and 5.7% during the last two fortnights, compared to last year’s level of 8.8% and 8.9% respectively reflecting weak demand and risk aversion in the banking system due to COVID-19 pandemic,” the report said. Asset quality concerns have kept commercial banks on the edge during the pandemic. Despite the slow credit growth, disbursements for medium, micro and small enterprises (MSME) continued to be strong under the Emergency Credit Line Guarantee Scheme. Over half the amount under the scheme has been sanctioned so far. - financial express.

24.10.2020: Today's Banking / Financial News

24.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI’s first OMO purchase of state development loans sees good response : In a bid to sooth bond market concerns over large state borrowings in the second half of the fiscal, the RBI announced open market operations (OMO) purchase of State Development Loans (SDLs) for the first time, as a special case, in its October policy. The first auction of ₹10,000 crore of SDLs on October 22, not only received good response, but experts also believe that future auctions could help narrow the spreads between SDLs and equivalent government securities in certain tenures. Against the notified amount of ₹10,000 crore, RBI received bids to the tune of ₹15,475 crore, implying a bid-to-cover-ratio (amount of bids received relative to the amount announced) of 1.5:1 times. Top OMO purchases (by amount) included ₹1,505 crore of 7.78 per cent Maharashtra SDL 2029 at a cut-off yield of about 6.5 per cent, ₹1,199 crore of 7.17 per cent Karnataka SDL 2029 at again 6.5 per cent, ₹1,136 crore of 7.2 per cent Karnataka SDL 2029 at 6.47 per cent and ₹950 crore 7.18 per cent Gujarat SDL 2030 at 6.5 per cent. - Business Line

🍒 RBI board holds review meet to take stock of economic situation, other challenges : Amid the uncertainties created by the coronavirus pandemic, the Reserve Bank’s central board on Friday held a meeting to discuss, among other things, the economic situation and other challenges. The meeting, which was held through video conferencing, also deliberated on the issues concerning financial stability in the present context. "The board reviewed the current economic situation, continued global and domestic challenges and various areas of operations of the Reserve Bank. The board also discussed the working of sub-committees of the central board and the local boards and deliberated on the aspects related to financial stability in the present milieu,” the RBI said in a release. - moneycontrol.

🍒 RBI issues guidelines to set up self-regulatory organisation for PSOs : The Reserve Bank on Thursday issued final guidelines, including the framework, to set up a self-regulatory organisation for payment system operators as part of its payment and settlement systems vision. The framework will enable the central bank to recognise a self-regulatory organisation (SRO) for payment system operators (PSOs). The plan was announced in February 2020 monetary policy. "Interested groups/association of PSOs (banks as well as non-banks) seeking recognition to be an SRO may apply to the chief general manager, department of payment and settlement systems at the RBI," the regulatory circular said. An SRO is a non-governmental organisation that sets and enforces rules and standards relating to the conduct of its members to help protect customers and promote ethical and professional standards. - Business Standard

🍒 Punjab and Sind Bank reports account of IL&FS Financial Services (IFIN) as fraud account to RBI : Punjab and Sind Bank on Friday said it has reported to the Reserve Bank of India (RBI) the account of IL&FS Financial Services (IFIN) as fraud with outstanding dues of over Rs 561 crore. The NPA account, IL&FS Financial Services, with outstanding dues of Rs 561.13 crore has been declared as fraud and reported to the RBI as per the regulatory requirement, the bank said in a regulatory filing. "Further, the bank has already made 100 per cent provisioning as per the prescribed prudential norms and the account is technically written off," it added. The scam at the IL&FS group came to light in September 2018 after several group entities defaulted on repayments due to severe liquidity problems. Later, the government superseded the board of directors to revive the ailing group. - economic times

🍒 IDBI Bank posts ₹324-crore profit in Q2 : IDBI Bank reported a net profit of ₹324 crore in the second quarter ended September 30, 2020 against a net loss of ₹3,459 crore in the year ago period. Net profit in the reporting (Q2) quarter jumped 125 percent.

23.10.2020: Today's Banking / Financial News

23.10.2020: Today's Banking / Financial News at a Glance

🍒 Bank credit up 5.66 percent, deposits rise 10.55 percent: RBI data : Bank credit grew by 5.66 per cent to Rs 103.44 lakh crore, while deposits increased by 10.55 per cent to Rs 143.02 lakh crore in the fortnight ended October 9, according to RBI data. In the fortnight ended October 11, 2019, bank credit had stood at Rs 97.89 lakh crore and deposits at Rs 129.38 lakh crore. In the previous fortnight ended September 25, 2020, bank credit had grown by 5.15 per cent to Rs 102.72 lakh crore and deposits rose by 10.51 per cent to Rs 142.64 lakh crore. On a year-on-year basis, non-food bank credit growth decelerated to 6 per cent in August as against 9.8 per cent in the same month last year, central bank data showed. Growth in loans to agriculture and allied activities rose 4.9 per cent in the reporting month, as compared to a growth of 6.8 per cent in August last year. - economic times

🍒 Fill up Non-Executive Director posts: PSBs to Finance Ministry : Public sector banks (PSBs) have requested the Finance Ministry to fill up Non-Executive Director positions to ensure adherence to corporate governance norms and constitution of board-level committees. Some of these positions have been vacant for almost seven years. Currently, there are vacancies in the category of Non-Executive Chairman, Workmen Employee Director, Officer Employee Director, and Director (under the Chartered Accountant category), and Part-time Non-official Directors, among others. With six PSBs getting merged into four PSBs with effect from April 1, there are now 12 state-owned banks in the country. Non-Executive Director vacancies exist in a majority of these banks. “All 12 PSBs have unfilled vacancies of Officer and Workmen Director positions. It is a purely political decision. “If the positions are vacant, the bank is free to do and undo things as per the select few on the board. Hence, (bad loan) write-offs are going on unchecked,” said S Nagarajan, General Secretary, All-India Bank Officers’ Association. He underscored that a PSB board without an Employee and Workmen Director can steamroll its decisions without any opposition.- Business Line

🍒 ‘UCO Bank yet to come out of RBI’s PCA framework’ : Despite complying with all key regulatory parameters for three subsequent quarters, UCO Bank is yet to come out of the Prompt Corrective Action (PCA) measure of the Reserve Bank of India. The bank has been posting a sequential growth in net profits for the last three quarters, and has also been able to consistently improve its asset quality by bringing down both gross and net non-performing assets (NPA). PCA is triggered when banks breach certain regulatory requirements such as minimum capital, return on asset, and quantum of non-performing asset. According to Atul Kumar Goel, MD and CEO, UCO Bank, while the bank has been able to adhere to all the four parameters required to come out of PCA, the regulator (RBI) might want to wait and assess the impact of the pandemic and the moratorium on asset quality in the next one or two quarters. “We have managed to adhere to all four parameters required to come out of PCA in the March, June and now in the September quarter. The call has to be now taken by the regulator. The impact of moratorium, if any, would be only seen in the December and March quarters. So, they may want to see our performance during these quarters,” Goel told newspersons in a virtual conference on Thursday. - Business Line

🍒 Indian Bank Q2 net profit rises 15 per cent to Rs 412 cr : State-owned Indian Bank on Thursday reported a 15 per cent rise in net profit at Rs 412.28 crore for the second quarter ended September, despite increase in provisions for bad loans. The bank’s net profit in July-September quarter of 2019-20 stood at Rs 358.56 crore. The results are not strictly comparable with that of previous year’s as Kolkata-based Allahabad Bank merged with Indian Bank on April 1, 2020. Indian Bank’s total income rose to Rs 11,669.11 crore during September quarter this year from Rs 6,045.32 crore in the same period of the previous fiscal. - Business Line

🍒 SBI Cards Q2 results: Net profit dips 46% to Rs 206 crore as NPA provisions rise : SBI Cards and Payment Services Ltd (SBI Card) the credit card arm of State Bank of India (SBI) reported a 46% drop in net profit in the quarter ended September 2020 to Rs 206 crore from Rs 381 crore a year earlier due to a rise in provisions as non perfoming assets (NPAs) spiked. Total provisions for NPAs and stressed loans more than doubled to Rs 862 crore from Rs 329 crore a year earlier, including an additional Rs 268 crore provision made in the second quarter, SBI Card said in a press release. Gross NPAs spiked sharply to 4.29% from 1.2% in June 2020 and was higher than the 2.33% reported a year earlier even as the company flagged uncertianties due to the economic disruption caused by the Covid 19 pandemic. - economic times

🍒 Payment operators must shift to interoperable QR code by March 2022: RBI : The Reserve Bank of India (RBI), on Thursday, said the Payment System Operators (PSOs) that use proprietary Quick Response (QR) codes have to shift to one or more interoperable QR codes by March 31, 2022. The two interoperable QR codes in existence – UPI QR and Bharat QR – will continue as it is at present, it added. No new proprietary QR codes shall henceforth be launched by any PSO for any payment transaction, the central bank said in a notification to all Authorised PSOs (banks and non-banks). The payment system operators ecosystem includes Cards Payment Networks; ATM Networks; entities issuing Pre-paid Payment Instruments; White Label ATM Operators; and Bharat Bill Payment Operating Units; among others. “QR Code is a type of a two-dimensional bar code. It consists of black squares arranged in a square grid on a white background. Imaging devices such as smartphone cameras can be used to read and interpret these codes. “...One can simply scan a QR code to pay utility bills, fuel, grocery, food, travel, and several other categories,” according to the Report of the Committee on the Analysis of QR Code.The RBI Committee was headed by DB Pathak, Professor Emeritus, IIT Bombay. - Business Line

🍒 Kotak Bank cuts interest rate on home loans by another 10 bps : Private sector Kotak Mahindra Bank, on Thursday, announced a further 10 basis points cut in the interest rate for its home loan products. “Kotak Mahindra Bank announced that it has reduced its rate on home loans by a further 10 basis points to 6.9 per cent per annum with effect from October 21, ,” it said in a statement. Consumers can avail Kotak’s festive season bonanza with home loans and balance transfer loans starting at 6.9 per cent per annum, it further said. Significantly, a day before, State Bank of India had also announced concession in home loan rates by as high as 25 basis points. SBI is also now offering interest rates starting as low as 6.9 per cent for a home loan of up to ?30 lakh and 7 per cent for above ?30 lakh.- Business Line

🍒 HDFC AMC Q2 PAT falls 8 per cent to Rs 338 cr : HDFC Asset Management Company (AMC) on Thursday reported a 8 per cent decline in profit after tax (PAT) at Rs 338.06 crore for the three months ended September 30, 2020. The company had posted a PAT of Rs 368.24 crore in the year-ago period, HDFC AMC said in a regulatory filing to the stock exchanges. Total income rose to Rs 569.95 crore in the quarter from Rs 549.07 crore in the corresponding quarter a year ago. The company’s average asset under management (AAUM) stood at Rs 3.75 lakh crore as of September 30, 2020 as against Rs 3.76 lakh crore on September 30, 2019.- Business Line

🍒 Pandemic beats DeMon: Jan Dhan accounts surge, by numbers and balance, in April-Oct : The no-frill bank accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have crossed the 41-crore mark, thanks mainly to the surge in new joinees during the lockdown. As on October 14, the total number of Jan Dhan accounts stood at 41.05 crore with a total balance of ₹1,30,741 crore. Since April 1, when the number stood at 38 crore, 3.05 crore accounts were added. During the same period in 2019, the number of accounts went up from 35.39 crore to 37 crore, or a rise of 1.6 crore. Thus, the pandemic led to a 100 per cent increase in the opening of new Jan Dhan accounts. The rise in balance reveals a similar trend. From ₹11,000 crore on April 1, it jumped to ₹1,30,741 crore on October 14.- Business Line

🍒 ‘HFCs should have 60% of total assets towards housing finance’ : The Reserve Bank of India (RBI) has prescribed a transition path for registered housing finance companies (HFCs), whereby they should have at least 60 per cent of total assets towards housing finance by March 31, 2024. Further, as per the review of regulatory framework for HFCs, the central bank has specified ?20 crore as the minimum net owned funds (NOF) requirement for a company to commence housing finance as its principal business or carry on the business of housing finance as its principal business. According to the framework, HFCs shall maintain a liquidity buffer in terms of Liquidity Coverage Ratio (LCR), which will promote their resilience to potential liquidity disruptions by ensuring that they have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for 30 days. - Business Line

🍒 L&T Finance Q2 profit up 52% : L&T Finance Holdings registered a 52.2 per cent increase in consolidated net profit at ?265.12 crore in the second quarter of the fiscal against ?174.2 crore in the same period a year ago. Its total income, however, fell by 5.5 per cent in the July to September 2020 quarter to ?3,508.91 crore against ?3,711.85 crore a year ago. “With normalcy returning, net interest margins and fees have reached the desired range of 6.5 per cent to seven per cent, despite carrying a negative carry of ?64 crore on additional liquidity,” L&T Finance Holdings said in a statement on Thursday. - Business Line

🍒 RBI pegs minimum NOF for housing finance companies at Rs 25 crore : The Reserve Bank of India (RBI) on Thursday fixed the minimum Net Owned Fund (NOF) size for housing finance companies at Rs 25 crore. The housing finance companies (HFCs) holding a Certificate of Registration (CoR) and having an NOF of less than Rs 25 crore will be required to achieve NOF of Rs 15 crore by March 31, 2022 and Rs 25 crore by March 31, 2023, the Reserve Bank said in a notification. The RBI has issued the revised regulatory framework for HFCs. The RBI further said that it would be incumbent upon such HFCs whose NOF currently stands below Rs 20 crore to submit a statutory auditor's certificate to the central bank within a month evidencing compliance with the prescribed levels. "HFCs failing to achieve the prescribed level within the stipulated period shall not be eligible to hold the Certificate of Registration (CoR) as HFCs and registration for such HFCs shall be liable to be cancelled," the RBI said, adding such companies will be required to approach the RBI for conversion of their CoR from HFC to NBFC-Investment and Credit Companies.

🍒 Banks’ overall credit outstanding goes up by ?74,734 crore : Scheduled banks probably saw the highest fortnightly offtake of credit in the current financial year so far, with their overall credit outstanding going up by ?74,734 crore. Deposits of scheduled banks during the reporting fortnight ended October 9 lagged credit growth for the first time in the current financial year, growing ?43,893 crore in the reporting fortnight, according to the Reserve Bank of India’s (RBI) daa on scheduled bank’s statement of position in India. The revival in credit growth comes in the backdrop of the economy entering the so- called “busy season” for credit offtake amid the raging pandemic. - Business Line

🍒 BCFI moves to become self-regulatory organisation : The board of the Business Correspondent Federation of India (BCFI) has approved the formation of a self-regulatory organisation (SRO), subject to approval from the Reserve Bank of India. It has also appointed Sunil Kulkarni as the new head of BCFI and CEO (designate) for the SRO. “The team at BCFI will improvise upon the code of conduct and grievance redressal mechanism developed last year, and implement them in earnest among its members with key focus towards ensuring customer protection and betterment of service standards,” the BCFI said in a statement on Thursday. - Business Line

🍒 Gold prices steady at Rs 51,350 per 10 gram; silver falls Rs 484 a kg : Gold prices were steady at Rs 51,350 per 10 gram in the Mumbai retail market on rupee appreciation and negative global cues. The precious metal declined in the international market, weighed down by firm dollar and stalemate over the US stimulus package before November 3 vote. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,037 plus 3 percent GST, while 24-carat 10 gram was Rs 51,350 plus GST. The 18-carat gold quoted at Rs 38,513 plus GST in the retail market. Silver prices declined Rs 484 to Rs 62,779 per kg from its closing on October 21. 

🍒 Equitas SFB issue subscribed twice : The IPO of Equitas Small Finance Bank was subscribed 1.95 times on the last day of bidding on Thursday. It received bids for 22.58 crore shares against 11.58 crore on offer, according to data available with the NSE. The portion reserved for qualified institutional buyers was subscribed 3.91 times while HNIs by just 0.22 times. Retail investors portion got subscribed by two times and employees by 1.84 times. The IPO, which comprises a fresh issue of 280 crore and an offer-for-sale of 7.20 crore shares, has came out with a price band of ?32-33. Equitas SFB had raised ?139.68 crore from anchor investors. - Business Line

🍒 Sensex snaps four-session winning run, ends 149 points lower : he 30-share BSE index settled 148.82 points or 0.37 per cent lower at 40,558.49. The broader NSE Nifty slipped 41.20 points or 0.35 per cent to 11,896.45. IndusInd Bank was the top laggard in the Sensex pack, shedding around 3 per cent, followed by ICICI Bank, Titan, Infosys, HDFC Bank, Nestle India, Sun Pharma and Reliance Industries. On the other hand, NTPC, Bharti Airtel, Bajaj Finance and Axis Bank were among the gainers.- Business Line

🍒 Rupee settles 4 paise higher at 73.54 against US dollar : The rupee appreciated by 4 paise to close at 73.54 against the US dollar on Thursday, as sustained foreign fund inflows strengthened investor sentiment. However, a strong dollar against major currencies overseas restricted the rupee’s gain, forex dealers said. At the interbank forex market, the rupee opened lower at 73.77, but pared all its losses to finally settle at 73.54, registering a rise of 4 paise..

22.10.2020: Today's Banking / Financial News

22.10.2020: Today's Banking / Financial News at a Glance

🍒 Banks can deploy on-tap TLTRO funds in agriculture, retail and MSMEs: RBI : The Reserve Bank of India on Wednesday said that banks can deploy money drawn from Rs 1 trillion on-tap targeted long term repo operations (on-tap TLTRO) in six sectors - agriculture, agri-infrastructure, secured retail, MSMEs, and drugs, pharmaceuticals and healthcare. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial paper and non-convertible debentures issued by the entities in specific sectors. Liquidity availed under the scheme can also be used to extend loans and advances to these sectors, the RBI said in guidelines issued for the scheme. On tap TLTROs are intended to enable banks to conduct their operations smoothly and seamlessly without being hindered by illiquidity frictions. This was done in view of the borrowing requirements of the Centre and states in the second half of 2020-21 and the likely pick-up in demand for credit as the recovery gathers strength, RBI had said in early this month. - Business Standard

🍒 India at doorstep of economic revival, says RBI Governor : Reserve Bank Governor Shaktikanta Das on Wednesday said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government.Shaktikanta Das was speaking at the launch of the book ‘Portraits of Power: Half a Century of Being at Ringside’, written by former bureaucrat and current chairman of the Finance Commission N K Singh. “We are almost at the doorstep of revival process and it’s very important that the financial entities have adequate capital (to support growth),” he said. - Business Line

🍒 Festival season offer: SBI announces concession in home loan rates : State Bank of India on Wednesday announced concession in home loan rates of up to 25 basis points (bps) as part of its festival season offer. The country’s largest bank, in a statement, said home loan customers would get an interest concession of 20 bps for buying homes of above ₹75 lakh based on CIBIL (Credit Bureau) score. Additionally, 5 bps concession will be offered for home loans if applied through YONO, SBI’s digital banking platform. One basis point is equal to one-hundredth of a percentage point. SBI also said it is offering credit score based concessions of up to 20 bps, up from 10 bps earlier, for a home loan of above ₹30 lakh to ₹2 crore across India. This concession would also be applicable for home loan customers for a loan amount of up to ₹3 crore in eight metro cities, it added. An additional 5 bps concession for all home loans is given if applied through YONO, the statement said. - Business Line

🍒 YES Bank offers discounts on credit card; loans at competitive rates : Yes Bank on Wednesday introduced festival season offers with discounts on processing fee on loans, low-cost EMIs, gift vouchers, cashbacks as well as various consumer loans at competitive interest rates. Unveiling the 'Khushiyon Ki Karein Zimmedari Se Tayyari' campaign, Yes Bank said customers can avail hassle-free loans personal and business loans, two-wheeler and auto loans up to 100 per cent of on-road prices at competitive interest rates, topped up with tailored options and flexible payment plans. In addition to these offerings on easy loans, customers can enjoy benefit of over 100 attractive deals on Yes Bank credit cards with rewards, Yes Bank said in a release. Under the various offers available, the lender said it will offer car loans beginning from 7.99 per cent with up to 100 per cent on-road prices, besides longer tenor option of up to 8 years. - Business Stndard

🍒 HSBC to cut up to 300 jobs in UK commercial banking overhaul: Sources : HSBC has launched a restructuring of its commercial banking business in Britain, a source familiar with the matter told Reuters on Wednesday, resulting in around 300 job losses. "In line with the Group strategy announced in February, we continue to restructure and review the roles required to transform the bank," a spokesman for HSBC said. Europe's biggest bank in June resumed plans to cut around 35,000 jobs it had put on ice after the coronavirus outbreak, as Europe's biggest bank grapples with the impact on its already falling profits. Chief Executive Noel Quinn has said the moves are necessary to improve the banks profits, as economic forecasts point to a challenging time ahead for the Asia-focused lender. - economic times

🍒 Surging UPI failure rates worry banks : The record surge in online payments since the onset of the pandemic is testing the digital infrastructure of public sector banks beset by sharp spikes in failed transactions, data from the National Payments Corporation of India (NPCI) shows. Ten of the top 30 banks using the country’s unified payment interface ( UPI) network recorded failure rates of over 3% for the month of September, latest data showed, nine of these ten banks are state-owned. United Bank of India recorded the highest rate of technical decline at 12.4% followed by Canara Bank at 5.9% and State Bank of India at 5.3% in September. In comparison, before July, the technical decline rates for most of the top thirty banks stood at less than 1% according to NPCI data. - economic times

🍒 Mudra loans surpass FY20 target by 5% at ₹3.37-lakh cr : Small business loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) have exceeded the target set for the financial year ended March 31, 2020, at ₹3,37,495 crore. The target set by the Government of India under PMMY for FY20 was ₹3.25-lakh crore, which was distributed across various lending institutions, banks, MFIs and NBFCs based on their outreach and presence in various parts of the country. According to the latest data available, sanctions in FY20 registered a 5 per cent growth over the previous year, which registered loan sanctions worth ₹3,21,721 crore. - Business Line

🍒 Rates on small savings way higher than they should be under the ‘committed formula’ : Small savings schemes offered by the post office have always found favour with savers, as they offer notably higher rates than bank deposits. While this anomaly was intended to be set right by aligning rates on small savings to market rates from April 2016, latest data suggests that the wide disparity still persists. According to the RBI’s monetary policy report, the existing rates (for the October-December quarter) offered by various small savings schemes are higher by 83-203 bps than the rates based on the ‘committed formula’. For instance, while the formula-based rate for the popular public provident fund (PPF) is 6.27 per cent (based on corresponding G-Sec yield and spread), the scheme currently offers 7.1 per cent. Similarly, the five-year NSC offers 6.8 per cent currently, as against the formula-based rate of 5.65 per cent. The senior citizen savings scheme (SCSS) offers 7.4 per cent, 111 bps higher than what it should be according to the formula. - Business Line

🍒 Aatmanirbhar Bharat: Raghuram Rajan cautions against import substitution by erecting tariffs : India would do well not to focus on import substitution by erecting tariffs under the Aatmanirbhar Bharat package, said Raghuram Rajan, former Governor of the RBI on Wednesday. “If the focus under Aatmanirbhar is on import substitution by erecting tariffs – which we have done lot in the last few years – it is a direction we tried before and failed. I would caution against going that direction,” said Rajan at a webinar on ‘India’s Third Pillar – The Way Forward’, organised by the Centre for Financial Studies at Bhavan’s SPJIMR. - Business Line

🍒 IRDAI to tighten insurance advertising norms : Insurers will soon have to be more cautious in their advertisements as the insurance regulator is in the process of bringing out comprehensive regulation. As per the draft Insurance Regulatory and Disclosure Regulations 2020, released by the IRDAI, advertisements that make claims beyond the ability of the policy and describe benefits that do not match policy provisions will be treated as “unfair and misleading” advertisements. They also cannot use terms or phrases that convey a fabricated sense of security, the draft regulations said. “All insurance advertisements should ensure that communications are clear, fair and not misleading, and they should use material and design to present information legibly and in an accessible manner,” the draft said. - Business Line

🍒 Bajaj Finserv Q2 profit falls 18% : Bajaj Finserv Ltd (BFS) reported an 18 per cent drop in consolidated net profit at ₹986 crore in the second quarter ended September-end 2020 against ₹1,204 crore in the year-ago period. BFS is the holding company for the various financial services businesses under the Bajaj Group. The holding company’s bottomline was weighed down as Bajaj Finance Ltd (BFL) reported a 36 per cent year-on-year (yoy) decline in consolidated net profit at ₹965 crore and Bajaj Allianz Life Insurance Company Ltd (BALIC) reported a 53 per cent yoy drop in shareholders’ net profit at ₹98 crore. - Business Line

🍒 IRDAI moots basic standard cover against cyber attacks : The Insurance Regulatory and Development Authority of India (IRDAI) has formed a working group to examine the need for standard cyber liability insurance products, chaired by P Umesh, Consultant-Liability Insurance. Observing that cyber attacks are on the rise with a number of high-profile data breaches amid the Covid-19 pandemic, the regulator said cyber security is the “most important need” for all sectors today to address the numerous risks posed by cyber attacks. The general liability policies do not cover cyber risks, and cyber cover products currently available are highly customised for clients. - Business Line

🍒 Hasten claim settlements in flood-hit States: IRDAI : The insurance regulator has directed all general and standalone health insurers to take immediate action for quick registration and disposal of claims arising out of floods in parts of Telangana, Andhra Pradesh and neighbouring States. “The recent floods (October 2020) have caused immense loss to property in parts of Telangana, Andhra Pradesh and neighbouring States. There is an urgent need for the insurance industry to take immediate steps to mitigate the hardships of the affected insured population,” said Yegnapriya Bharath, Chief General Manager (Non-Life), Insurance Regulatory and Development Authority of India (IRDAI), in a circular.- Business Line

🍒 Australia’s Westpac selling stake in buy-now-pay-later firm Zip : Westpac Banking Corp said on Wednesday it would sell its 10.7 per cent stake in buy-now-pay-later firm Zip Co Ltd in a deal valued at about A$368 million ($260 million), as it aims to trim its portfolio and improve its capital position. Australia’s second-largest lender, whose capital has been eroded by a record lawsuit settlement and surge in bad-debt provisions due to the coronavirus outbreak, said the sale will add around 8 basis points to its common equity tier 1 capital ratio. - Business Line

🍒 Your name should not mislead about your role: AMFI tells MF distributors : The Association of Mutual Funds in India (AMFI) has released a list of 39 permissible and 52 non-permissible names for mutual fund distributors (MFDs). It has directed distributors follow the SEBI diktat banning the use of nomenclature such as ‘independent financial advisor’ (IFA) and ‘wealth advisor’, unless registered with SEBI as such. SEBI has amended the Investment Advisor Regulations, prohibiting the use of words such as advisor, IFA, wealth advisor and ‘similar names’ by MFDs from October. The amendment was proposed in February and enacted in July. However, the implementation of the amendment was deferred to October at the request of MFDs. - Business Line

🍒 Central govt employees not covered under PLB scheme to get upto Rs 7,000 as monthly ad-hoc bonus : Central government employees not covered by any productivity-linked bonus scheme will get upto Rs 7,000 in monthly ad-hoc bonus for emoluments in the last fiscal, according to a finance ministry memorandum on Wednesday. The festive bonus will be applicable to employees of the central para military forces and the armed forces as well as some Union Territory (UT) administration employees, the memorandum said. The grant of non productivity-linked bonus (non-PLB) or ad-hoc will be applicable only to those employees who were in service on March 30, 2020 and worked for six continuous months in the previous fiscal, the ministry said.. - Business Line

🍒 Cabinet to soon consider new PSE policy: DEA Secretary : The Union Cabinet will soon consider a new public sector enterprises policy that will define strategic sectors which would have not more than four state-owned firms, Economic Affairs Secretary Tarun Bajaj said on Wednesday. As part of the 'Aatmanirbhar Bharat Abhiyan' package, the government in May had announced that there will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised. Under the policy, a list of strategic sectors will be notified where there will be at least one and a maximum of four public sector enterprise, apart from private sector companies. - economic times

🍒 Govt plans to extend PLI scheme to 7-8 more sectors to promote manufacturing: DEA Secretary : Enthused by initial response of industry with regard to the production-linked incentive (PLI) scheme, Economic Affairs Secretary Tarun Bajaj on Wednesday said the government is considering an extension of the scheme to 7-8 more sectors to promote domestic manufacturing. With the view to make India a manufacturing hub, the government recently announced the PLI scheme for mobile phones, pharma products and medical equipment sectors. "I have a lot of confidence and hope on the PLI scheme that we have brought out for mobile phones, pharma products and medical equipment, and in the offing are about 7-8 sectors where the PLI scheme would be extended," Bajaj said while addressing a virtual CII conference. - economic times

🍒 Gold prices climb to highest level since September 18, at Rs 51,366/10 gm; silver gains Rs 1,085/kg : Gold prices climbed Rs 390 to Rs 51,366 per 10 gram in the Mumbai retail market on a weaker rupee and positive global cues. The precious metal settled at the highest level since September 18 in India amid growing optimism over the US stimulus package before the election. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,051 plus 3 percent GST, while 24-carat 10 gram was Rs 51,366 plus GST. The 18-carat gold quoted at Rs 38,525 plus GST in the retail market. Silver prices jumped Rs 1,085 to Rs 63,263 per kg from its closing on October 20.

🍒 SEBI slaps fines on Kirloskar brothers for insider trading; levies ₹32-crore penalty : The promoters of Pune-based Kirloskar Brothers have been penalised by SEBI in a decade-old insider-trading case. The regulator has asked Rahul and Atul Kirloskar to pay up ₹31.21 crore in 45 days. They have also been banned from dealing in the markets for six months. - Business Line

🍒 Sensex rises 163 points; Nifty tops 11,900 level : Extending its gains for the fourth session, equity benchmark Sensex ended 163 points higher on Wednesday, led by index majors HDFC twins and ICICI Bank. After gyrating 825.54 points in a highly volatile session, the 30-share BSE index ended 162.94 points or 0.40 per cent higher at 40,707.31.Similarly, the broader NSE Nifty rose 40.85 points or 0.34 per cent to finish at 11,937.65. It touched an intradday high of 12,018.35.PowerGrid was the top gainer in the Sensex pack, surging over 4 per cent, followed by Bharti Airtel, Tata Steel, NTPC, HDFC Bank, UltraTech Cement and Kotak Bank. On the other hand, TCS, Nestle India, Reliance Industries and HCL Tech were among the laggards.

🍒 Rupee pares early gains, settles 9 paise lower at 73.58 against US dollar : The rupee pared its initial gains and depreciated 9 paise to settle at 73.58 (provisional) against the US dollar on Wednesday, as heavy selling in domestic equities weighed on investor sentiment. At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.39, pared the gains and finally closed at 73.58 against the greenback, registering a decline of 9 paise over its previous close of 73.49.