03.11.2020: Today's Banking / Financial News

 03.11.2020: Today's Banking / Financial News at a Glance

🍒 PNB posts Q2 profit of ₹621 crore : Aided by lower provisioning for bad debts, PNB, on Monday, reported a standalone net profit of ₹621 crore for the second quarter ended September 30. This was more than double the net profit of ₹308 crore recorded in first quarter of this fiscal. It may be recalled that the country’s second-largest public sector bank had, from April 1, this year amalgamated two PSBs – Oriental Bank of Commerce and United Bank of India – with itself. For the second quarter ended September 30, 2019, PNB had recorded net profit of ₹507 crore. The latest Q2 performance is not comparable with the same quarter last fiscal in view of the three-way amalgamation from April 1 this year, PNB said in a filing with the stock exchanges. - Business Line

🍒 HDFC Q2 net profit down at ₹2,870 crore : Mortgage lender HDFC Ltd reported a 27.5 per cent decline in standalone net profit in the second quarter of the current fiscal at ₹2,870.12 crore, compared with ₹3,961.53 crore in the same period a year ago. “To facilitate a like-for-like comparison, after adjusting dividend, profit on sale of investments, fair value adjustments, net gains on loans assigned, charge for employee stock options and provisioning the adjusted profit before tax for the quarter ended September 30, 2020 is ₹ 3,366 crore compared to ₹ 2,646 crore in the previous year, reflecting a growth of 27per cent,” it said in a statement on Monday, adding that the profit numbers for the quarter ended September 30, 2020 are not directly comparable with that of the previous year.  - Business Line

🍒 City Union Bank net slips to ₹158 cr in Q2 : Kumbakonam-headquartered City Union Bank’s profit after tax slipped to ₹158 crore for the quarter ended September 2020 when compared to the ₹194 crore clocked during the corresponding quarter of the earlier fiscal. The bank, in a statement, said that the profit before tax for the quarter was impacted on account of additional provision of ₹115 crore made towards Covid to meet future contingencies. The bank already made a provision of ₹225 cr for Covid-19 as on June 30, 2020; during the current quarter, with the additional provision of ₹115 crore, total provision towards Covid-19 at the end of the first half of the current fiscal has touched ₹340 crore. - Business Line

🍒 Karur Vysya Bank Q2 net profit jumps 81% to Rs 115 crore : Private sector Karur Vysya Bank (KVB) on Friday reported an 81.4 percent jump in its net profit at Rs 114.89 crore in the second quarter of FY 2020-21, helped by lower provisioning for bad loans. The south-based lender had posted a net profit of Rs 63.33 crore in the corresponding three months a year ago.Total income though fell to Rs 1,666.26 crore in the July-September period of FY21 as against Rs 1,815.24 crore in the same quarter of 2019-20, KVB said in a regulatory filing. - moneycontrol.

🍒 Centre extends Emergency Credit Line Guarantee Scheme till the end of November : The government has extended the Emergency Credit Line Guarantee Scheme (ECLGS) by a month till November 30 until the entire Rs 3 lakh crore made available under the scheme is sanctioned, according to a finance ministry statement on Monday. Lending institutions under the scheme have sanctioned loans amounting to Rs 2.03 lakh crore to 60.67 lakh borrowers and disbursed loans totaling Rs 1.48 lakh crore as of date, it said. The decision was taken in view of the further easing of Covid-19 restrictions on various sectors of the economy and the expected rise in demand during the festive season, it said. - economic times 

🍒 Covid stress: Banks confident provisions are good enough : Rising collection efficiencies helped by a rebound in economic activities and benign initial requests for restructuring have made banks increasingly confident that the provision they carry on their books should be good enough to deal with Covid related stress. Both private and public sector banks are confident that stress in their books will not go out of hand by the end of the fiscal as they have all increased their provision coverage ratio (PCR) to deal with any increased stress. However, analysts say that the real test for banks will come in the third and fourth quarters as the Supreme Court stay on classification of NPAs will be lifted and more clarity emerges on the restrcuturing requests to banks.- economic times

🍒 Aditya Puri appointed as a senior adviser in Asia for Carlyle Group : Global investment firm The Carlyle Group has announced that Aditya Puri, former CEO of India’s largest private sector bank, HDFC Bank, has been appointed as a senior advisor to Carlyle in Asia, said a statement issued today. Puri will advise the Carlyle team on investment opportunities across Asia. He will provide guidance on the evolving market landscape and new investment opportunities, while also advising the company’s investment professionals and portfolio management teams on building differentiated high quality businesses. - economic times

🍒 IDFC First Bank logs strong September quarter, expects restructuring at 4% of loan book : IDFC First Bank is factoring in total restructuring of about 4% of its loan book of Rs 1.06 lakh crore under the Covid-19 recast window, chief executive V Vaidyanathan told ET. The bank has received retail restructuring proposals worth Rs 200 crore through its online portal, while a few corporate restructuring requests are also under consideration, he added. “On our website, we have provided an end-to-end-restructuring journey for our retail customers, where we have received proposals worth Rs 200 crore, which is 0.4% of our customer base; some requests have come on the corporate side which are under consideration,” Vaidyanathan said. The restructuring window is open for corporates till December 31. According to a previous estimate by India Ratings, the banking system could restructure loans worth Rs 8.4 lakh crore due to the Covid-19 pandemic. - economic times

🍒 Bandhan Bank prunes Covid-related risk projections with better repayment collection : Bandhan Bank has lowered its Covid-related risk projections with repayment collection showing steady improvement over the last six months giving the lender confidence about further recovery and asset quality strength. The bank said it has made additional Covid-related provision of Rs 2100 crore covering 2.8% of its portfolio, and it might not need to top it up substantially going forward if the current repayment trend continues, bank chief executive Chandra Shekhar Ghosh told ET. During the initial days of the pandemic, the lender thought of creating an additional provision buffer of 3.5% of its loan book. At the end of September, it has Rs 76615 crore as loan outstanding including Rs 5000 crore of off-balance sheet exposure .- economic times

🍒 HSBC appoints new head of debt financing business in India : HSBC has elevated old hand Chetan Joshi as head of its debt financing business in India, according to sources. Joshi was previously managing director and head of the bank's debt capital markets business in which role he led the UK-headquartered lender to the position of the top-ranked arranger of foreign debt issuances from India. The bank is also said to have announced the appointment of Vinod Venkatesh in Joshi’s role. Joshi will also be overseeing the debt capital markets business in addition to taking added responsibilities for acquisition and leveraged finance, these sources said.. - economic times

🍒 RBI extends deadline for banks' compliance with new guidelines for existing current accounts :  The Reserve Bank of India has given more time to banks to comply with the revised current account opening norms to ease their operational glitches. The regulator changed the rules to prevent the misuse of the current account facility and fund duversions. The new deadline is December 15 instead of November 5. RBI suggested that banks should not route drawal from term loans through current accounts. Since term loans are meant for specific purposes, the funds should be remitted directly to the supplier of goods and services.- economic times

🍒 ICICI Lombard gets CCI nod to acquire Bharti AXA’s non-life insurance business : The Competition Commission of India (CCI) has given its nod for the merger of Bharti AXA’s non-life insurance business with ICICI Lombard General Insurance, paving the way for creating the country’s third-largest non-life insurance company. “Commission approves acquisition of General Insurance Business of Bharti AXA @BhartiAXAGI by ICICI Lombard @ICICILombard”, the CCI tweeted on Monday.- Business Line

🍒 RBI to increase trading hours for various markets : The Reserve Bank of India (RBI) has decided to increase trading hours for various markets regulated by it by up to 90 minutes with effect from November 9. With the graded roll-back of the lockdown and easing of restrictions on movement of people and functioning of offices, it has been decided to restore trading hours for regulated markets in a phased manner, the central bank said in a statement. The timings of markets for call/notice/term money; Commercial Paper and Certificates of Deposit; Repo in Corporate Bonds; Government Securities; Foreign Currency (FCY)/Indian rupee (INR) Trades, including Forex Derivatives; and Rupee Interest Rate Derivatives, will be increased to 10 am to 3.30 pm from 10 am to 2 pm. - Business Line

🍒 ICICI Bank shares jump nearly 6 per cent as Q2 profit zooms to record high : Shares of ICICI Bank on Monday jumped nearly 6 per cent after the company reported an over four-fold jump in consolidated net profit for the September quarter. The stock gained 6.64 per cent to Rs 418.65 on the BSE. On the NSE, it jumped 6.59 per cent to Rs 418.50. . - Business Line

🍒 ‘Fresh corporate bond issuances to rise up to ₹8.2-lakh crore in FY21’ : Fresh corporate bond issuances are expected to rise to ₹8.0-8.2-lakh crore in FY21 from ₹6.55-lakh crore in FY20, as spreads on these bonds over government securities (G-Sec) of similar tenure are likely to remain narrow over the next few quarters, according to ICRA. The spreads on corporate bonds over G-Secs of similar tenure declined to pre-Covid levels by the end of Q2 (July-September) FY21, the credit rating agency said.- Business Line

🍒 PNB Housing Finance set to prune corporate loan book by Rs 1,500 cr : Mortgage lender PNB Housing Finance (PNB HFC) plans to reduce corporate loan book by Rs 1,500 crore by March 2021 and is going in for a second round of rationalisation. Hardayal Prasad, managing director (MD) and chief executive officer (CEO) said the company has built a strong balance sheet and will continue to rebalance its portfolio to build a robust retail franchise. There was a sell down and accelerated pre-payment of Rs 477 crore in the corporate book. "HFC remains steadfast in its strategy to bring down share of corporate book by end of the current fiscal year," Dayal said in an analysts’ call. - Business Standard

🍒 10-year G-Sec yields will average 6.2% by March 2021: Crisil : Credit rating agency Crisil believes that 10-year Government Security (G-Sec) yields will average 6.2 per cent by March 2021 versus its previous estimate of 6.5 per cent. The agency reasoned that the Reserve Bank of India (RBI) has looked through the current spurt in inflation and stated its commitment to stay accommodative and provide liquidity to the system. In this regard, Crisil observed that the central bank increased purchase of G-secs by conducting Open Market Operations (OMOs), Operation Twists (OTs), introduction of OMOs for State G-secs, and increase in banks’ limits for statutory liquidity ratio (SLR) securities under held-to-maturity (HTM) to ensure that the demand for G-secs remains strong. - Business Line

🍒 Paytm Postpaid targets 15 million users by end March 2021 : Paytm, a leading digital financial services provider, on Monday said it is aiming a total of 15 million users for its Postpaid micro credit service by March 20-21. This would be more than double the current customer base of 7 million for its Postpaid service. With Paytm Postpaid, users can avail instant credit for their Paytm purchases, which they can repay next month. Paytm Postpaid is offered in partnership with two leading NBFCs with an instant credit line for various payments to Paytm App users. - Business Line

🍒 PhonePe hits 250 mn user mark, registers 925 mn transactions in October : Flipkart-owned fintech platform PhonePe on Monday said it has crossed the 250 million registered user milestone. The company reported over 100 million monthly active users (MAU) and 2.3 billion app sessions in October, a statement said. “PhonePe had a record month in October, processing 925 million transactions – its highest so far – with an annual TPV (total payment volume) run rate of USD 277 billion. PhonePe also processed 835 million UPI transactions in October, for a market leading share of over 40 per cent,” it added. Sameer Nigam, CEO and founder of PhonePe, said the company has set a target of crossing 500 million registered users by December 2022. - financial express

🍒 Four ex-RBI governors including Raghuram Rajan, YV Reddy warn of NPAs delaying recovery : Domestic banks, which have the highest bad loan pile in the world, pose a huge risk to the recovery of the pandemic-ravaged economy unless the government rescues them, four former Reserve Bank governors warn in a soon-to-be-released book. While Raghuram Rajan blames excessive investments by companies and the exuberance of bankers, coupled with inability to act fast as the prime causes for NPAs (Non-Performing Assets), Yaga Venugopal Reddy opines that the bad loans are not only a problem but a consequence of other problems. Duvvuri Subbarao sees NPAs as a big and real problem that needs to be contained, and Chakravarthy Rangarajan blames the lingering real sector problems, partly policy-driven most recently seen with demonetisation, aggravated the crisis. "Yes, the bad loan problem is big and real," says Subbarao, who was the governor for five years from September 2008 to September 2013, in the book by senior journalist Tamal Bandyopadhyay titled 'Pandemonium: The Great Indian Banking Tragedy'. - moneycontrol.

🍒 BoB, ICICI Bank announce fees for certain cash transactions; more may follow : Some of the large commercial banks have introduced or tweaked convenience fees on certain cash transactions from November 1. Two banks - Bank of Baroda (BoB) and ICICI Bank - have made announcements that essentially say that they will now levy a fee or hike existing fees that will be charged to customers for certain type of cash transactions. BoB has said it will levy a higher cash handling charges for cash transactions beyond certain limits - a minimum Rs 50 and a maximum Rs 20,000, the bank said on its website. Earlier, BoB, used to charge a minimum of Rs 10 and maximum of Rs 10,000 for certain kind of cash deposits. Similarly, ICICI Bank too has said it will charge a convenience fee of Rs 50 per transaction from customers for cash deposits at ATMs during non-business hours and bank holidays. Customers will be charged for every such transaction done on bank holidays and between 6:00 pm and 8:00 am on working days.  - moneycontrol.

🍒 Gold prices back above Rs 51,000/10 gm on safe haven buying ahead of US election, silver gains Rs 1,941/kg : Gold prices rose by Rs 197 to Rs 51,037 per 10 gram in the Mumbai retail market on the weaker rupee and positive global cues. The precious metal was trading firm on safe-haven buying ahead of the US Presidential election on November 3. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,750 plus 3 percent GST, while 24-carat 10 gram was Rs 51,037 plus GST. The 18-carat gold quoted at Rs 38,278 plus GST in the retail market. Silver prices jumped Rs 1,941 to Rs 61,867 per kg from its closing on October 30.

🍒 Rupee slumps 32 paise to close at 74.42 against US dollar : The rupee depreciated 32 paise and settled at 74.42 (provisional) against the US dollar on November 2 tracking strong American currency amid global risk aversion. The local unit opened at 74.40 at the interbank forex market, then lost further ground and finally closed at 74.42 against the greenback, down 32 paise over its last close.

🍒 Sensex ends 144 pts higher; banking, financial stocks sparkle : Equity benchmark Sensex ended 144 points higher on Monday, tracking strong buying sentiment in financial stocks amid positive cues from global markets. After gyrating 633.11 points in a choppy session, the 30-share BSE index settled 143.51 points or 0.36 per cent higher at 39,757.58.Similarly, the broader NSE Nifty advanced 26.75 points or 0.23 per cent to 11,669.15.IndusInd Bank was the top gainer in the Sensex pack, rallying around 7 per cent, followed by ICICI Bank, Axis Bank, HDFC, Bharti Airtel, SBI, Bajaj Finance and HDFC Bank.On the other hand, Reliance Industries (RIL) was the top laggard, crashing over 8 per cent. HCL Tech, TCS, Tata Steel, Asian Paints, Bajaj Auto, Maruti and UltraTech Cement also ended in the red.

01.11.2020: Today's Banking / Financial News

01.11.2020: Today's Banking / Financial News at a Glance

🍒 Bank of Baroda reduces lending rate by 15 bps to 6.85% : Bank of Baroda, India's third largest public sector bank, announced a reduction in Baroda Repo Linked Lending Rate (BRLLR) from seven per cent to 6.85 per cent. The rate cut would be effective from November 1, 2020. With the cut in the external benchmark repo linked rate, all retail loans of the bank would get automatically adjusted.The customers availing home loan, mortgage loan, car loan, education loan, personal loan and all other retail loan products could avail of this benefit. Earlier, ahead of the festive season, the bank had announced a concession in interest rates on home loans and car loans. Now with the revision of BRLLR, home loan rates start at 6.85 per cent, car loan rates at 7.1 per cent, mortgage loan rates at 8.05 per cent and education loan rates at 6.85 per cent. - economic times

🍒 Union Bank of India cuts home loan rates by 10 bps : Union Bank of India (UBI) has decided to cut the interest rate on home loans above Rs.30 lakh by 10 basis points (bps) with effect from November 1, 2020. The public sector bank, in a statement, said women home loan borrowers will get a further concession of 5 bps in rate of interest over and above the aforementioned reduction in interest rate. One basis point is equal to one-hundredth of a percentage point.There will be zero processing charges for home loans till December 31, 2020, the bank added.In addition, UBI has waived legal and valuation charges upto Rs.10,000 in case of take over of home loans by it. UBI said there are no processing charges for car and educational loans. - Business Line

🍒 ICICI Bank Q2 net profit rises over 6-fold to Rs 4,251 crore : ICICI Bank on Saturday reported an over six-fold jump in its standalone net profit at Rs 4,251 crore for the second quarter ended September 2020. The bank had posted a net profit of Rs 655 crore during the same period of the previous fiscal year. Total income (standalone) in July-September 2020 stood at Rs 23,650.77 crore, up from Rs 22,759.52 crore in the same period a year earlier. On asset front, there was an improvement with gross non-performing assets (NPAs) falling to 5.17 per cent of gross advances as of September 30, 2020, against 5.37 per cent a year ago. In value terms, gross NPAs or bad loans stood at Rs 38,989.19 crore as against Rs 45,638.79 crore. Net NPAs fell to 1 per cent (Rs 7,187.51 crore) from 1.60 per cent (Rs 10,916.40 crore). On consolidated basis, the bank’s net profit was up over four-times at Rs 4,882 crore in Q2 FY21 against Rs 1,131 crore in Q2 FY20. - Business Line

🍒 IDFC First Bank posts Rs 101-cr profit in Q2 on interest income, lower provisioning : IDFC First Bank on Saturday reported a net profit of Rs 101 crore for the July-September quarter of the current fiscal year on healthy interest income and lower provisions. The private sector lender had posted a net loss of Rs 680 crore in the same quarter a year ago. The profit after tax for the half-year ended September 30, 2020, is reported at Rs 195 crore. Thus the bank reported three consecutive quarters of profitability, IDFC First Bank said in a release. Bank's total income grew by 21 per cent at Rs 2,288 crore in July-September period of 2020-21 from Rs 1,884 crore. Net interest income was up by 22 per cent at Rs 1,660 crore. Despite the COVID-19 pandemic impact, the quarter-on-quarter NII grew by 2 per cent, the private sector lender added. - Business Standard

🍒 DCB Bank Q2 net profit down 10% : DCB Bank’s net profit declined 9.97 per cent to ₹82.29 crore in the second quarter of the fiscal from ₹91.41 crore a year ago. “Profit before tax for the quarter was impacted by ₹48 crore Covid-19 Regulatory Package Provision. In order to further strengthen the balance sheet, the bank intends to make conservative provisions given the current environment,” DCB Bank said in a statement on Saturday. Total income also declined to ₹970.98 crore in the quarter ended September 30, 2020 from ₹980.59 crore a year ago. - Business Line

🍒 Retail, small biz loans aid credit recovery in September : Outstanding bank credit in September rose by ₹71,490 crore from the previous month, in sharp contrast to August when it had shrunk by ₹36,000 crore month-on-month. However, on a year-on-year basis, bank credit rose just 5.8% in September, compared to an 8.2% growth in September 2019.According to the Reserve Bank of India’s sectoral credit deployment data released on Friday, the jump in bank credit was driven by personal loans, services sector and agriculture and allied sectors. Within personal loans, housing loans grew by ₹10,300 crore, and other personal loans grew by ₹12,400 crore from the previous month. Within the services sector, loans to non-bank lenders saw sequential growth of ₹5,800 crore to ₹8.02 trillion. - Live Mint

🍒 Kotak Mahindra Bank Rating: Buy- A strong second quarter for company : Kotak Mahindra Bank (KMB) reported a strong quarter – with lower provisions and higher treasury income boosting earnings, even as core PPOP grew 19% y-o-y. The bank reported an uptick in fee income and margins too expanded 12bp q-o-q, while loan growth stood flat. On the asset quality front, slippages stood lower (partially aided by the SC order), driving sequential improvement in asset quality ratios, while PCR increased to 76%. The bank carries total COVID-19 provisions of Rs 12.79 bn (0.6% of advances). On the business front, the loan book stood flat q-o-q, reflecting the bank’s cautious approach in a weak environment. Disbursals under the ECLG scheme exceeded Rs 81 bn in Oct’20 (Rs 76 bn as of end-Sep’20), while the Agri/Tractor portfolio reported healthy growth. CASA growth remains steady, driving further improvement in the CASA mix to 57.1%. We increase our FY21/FY22 earnings by 27%/20%, aided by steady revenues and sharp decline in provisioning expenses. We upgrade to Buy, following a gap of 10 quarters, when we had downgraded our rating to Neutral, nearly at current price. - financial express

🍒 Small & midcaps underperform; 55 stocks in BSE 500 rose 10-70% in October : Bulls remained in control of D-Street in October and pushed benchmark indices above crucial resistance levels, but the rise in COVID cases across the globe, as well as uncertainty around the US elections, capped the upside. The S&P BSE Sensex rose above 4 percent while the Nifty50 rallied 3.5 percent in October compared to 1.3 percent rise seen in the S&P BSE Midcap index, and 0.14 percent gain seen in the S&P BSE Smallcap index in the same period. As many as 55 stocks in the S&P BSE 500 index rallied 10-70% in October. These include Can Fin Homes, ICICI Bank, IndusInd Bank, Asian Paints, JSW Steel, Kotak Mahindra Bank, Dr Lal PathLabs, and Just Dial among others. - Moneycontrol.

31/10/2020 Today's Banking / Financial News

31/10/2020 Today's Banking / Financial News at a Glance

🍒 RBI board mulls future course for weaker banks : Should weaker banks hold back lending and expansion till they are totally out of the woods? Or, is there a better chance to improve their financials if the regulator allows them to lend and grow? The question cropped up at last week’s meeting of the central board of the Reserve Bank of India (RBI) – with opinions of directors divided on the matter. Five banks – Central Bank of India, IDBI Bank, Indian Overseas Bank, Uco Bank and Lakshmi Vilas Bank – are now under the RBI prompt corrective action (PCA) framework that brings in multiple restrictions aimed at conserving capital of banks and better their loss-absorption capacity. The curbs would be lifted only after fresh directives from the regulator. “Some of the (board) members felt that a delay in lifting the restrictions could prolong the recovery of these banks post Covid. Instead, RBI should let them hire and chase business. It was a general discussion... members had different views and no decision was reached. The matter is likely to be referred to the BFS,” said a person aware of the discussion. (The Board for Financial Supervision, or BFS, undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies). - economic times

🍒 Retail investors will get to own more of public sector banks, says Nirmala Sitharaman : Finance Minister Nirmala Sitharaman is all for greater public participation in the banking sector. The government will have to work out the modalities for that, she said while sharing her plans for the sector. “I would, probably in the later part of next year, focus on some more retail participation in ownership of the banks,” she told BusinessLine in an exclusive interview through video conference. “We had earlier approved consolidation of 10 banks into four. In the last few years, the Centre has infused about ₹3,50,000 crore by way of capital into public sector banks for regulatory and growth purposes. Governance reforms would be carried out in these banks, so that they become more competitive. A few among them will be encouraged to approach the capital market to raise additional capital,” she added. - Business Line

🍒 RBI launches latest surveys on consumer confidence, inflation expectations : The Reserve Bank has launched the latest round of surveys to capture consumer confidence and inflation expectations of households, which are useful inputs for its monetary policy. The central bank has been regularly conducting Consumer Confidence Survey and Inflation Expectations Survey of Households (IESH). The results of these surveys "provide useful inputs for monetary policy", the RBI said while announcing the launch of the November 2020 round of CCS and IESH through two statements. The next meeting of the RBI Governor-headed Monetary Policy Committee (MPC) is scheduled for December 2 to 4, 2020. - Business Standard

🍒 SBI targets digital delivery of retail loans by June: MD : State Bank of India (SBI) is looking at providing digital delivery of all retail loans by June 2021, scaling it up from the current level of 60%, said CS Setty, managing director – retail and digital banking, on Thursday. He exhorted non-banking finance companies (NBFCs) to look beyond lending to industry and commercial real estate and to bring down their collection costs for pooled loans. SBI has 50 professionals in its data sciences department and it plans to expand its strength to 110. This department, which works on the bank’s artificial intelligence/machine learning (AI/ML) capabilities, has helped it identify a majority of its leads in the retail lending segment, Setty said at an NBFC seminar, organised by the Ficci. - Financial Express

🍒 Despite heavy provisioning, Canara Bank’s Q2 profit up 5.31% : Heavy provisioning has impacted Canara Bank’s profits. The bank has posted a 5.31 per cent higher profits for second-quarter of FY 2020-21 at ₹466.41 crore as against ₹442.86 crore posted in the same period last year. The bank’s profits got impacted due to ₹4,021.34 crore provisions (other than tax) and contingencies for Q2, as against last year’s ₹2,109.97 crore. For Q1 of this fiscal, the bank had made a provision of ₹3,826.61 crore. For Q2, the bank’s total income grew by 46.24 per cent at ₹22,681.05 crore as against ₹15,509.36 crore recorded last year. EPS for the quarter stood at ₹3.21 as against ₹5.88 posted last year.- Business Line

🍒 HDFC Bank offers cashback to merchants to encourage digital transactions : With a view to drive digital payment adoption among the merchant segment, HDFC Bank has launched cashback offers and other incentives for small and medium-sized merchants across the metro, semi-urban and rural markets. A merchant using the bank's merchant App, QR code, PoS or Payment gateways, across all segments, including electronics, apparel, grocery, stand to win assured cashback and prizes on volume build-up, EMI or digital transactions. "This is a first for the bank, where we are extending the festive treats campaign for even the entire small and medium merchants in our network across the country. This programme is not just for merchants based in metros, but also in semi-urban and rural markets," HDFC Bank Head - Payments, Consumer Finance, and Digital Banking Parag Rao told PTI. - Business Standard

🍒 IndusInd Bank Q2 profit down 53% : Private sector lender IndusInd Bank’s net profit in the second quarter of the fiscal more than halved with lower fee income and rise in provisions. For the quarter ended September 30, 2020, IndusInd Bank registered a 53.2 per cent decline in net profit to ₹647.04 crore against ₹1,383.37 crore in the same period last fiscal. Its total income fell by 1.64 per cent to ₹8,731.05 crore in the quarter under review from ₹8,877.02 crore a year ago. Net interest income for the quarter ended September 30, 2020, increased by 12.7 per cent to ₹3,278 crore from ₹2,909 crore in the same period last fiscal. - Business Line

🍒 Karur Vysya Bank Q2 net up 82% : Karur Vysya Bank has reported an 82 per cent jump in net profit at the end of the second quarter of this fiscal when compared to the corresponding quarter of the previous year. The bank’s net profit rose to ₹115 crore, up from ₹63 crore during Q2 of FY20. Operating profit was up 4 per cent at ₹449 crore (₹431 crore), net interest income improved marginally to ₹601 crore, and non-interest income was almost flat at ₹272 crore. The net profit at the end of the first half of the current fiscal stood at ₹220 crore (₹136 crore) and the operating profit at ₹923 crore (₹876 crore). Other income during the first half rose by 7.5 per cent to ₹589 crore. - Business Line

🍒 IndusInd expects restructuring book to be in control: CEO : IndusInd Bank expects its total restructured book to be in "single digits" even as it stepped up provisions to deal with any Covid related uncertainties. "We are still in the process for identifying accounts for restructuring and we expect it to be in the low single digits. We have got some requests for restructuring but they are not substantial," CEO Sumant Kathpalia said in a conference call with reporters. The bank's total slippages at just 19 basis points of its loan book or Rs 400 crore were made up by the Rs 495 of recoveries and upgrades the bank had in the quarter ended September. One basis point is 0.01 percentage point. Kathpalia said the bank's guidance of credit costs at 92 basis points could change because of the restructuring allowed by the RBI.. - economic times

🍒 Axis Bank's JV deal with Max Life hits yet another regulatory wall : Axis Bank has yet again revised the terms of its deal with Max Financial to form a joint venture involving the latter's life insurance entity after the previous agreement was deemed not in line with existing laws by the Reserve Bank of India. As per the revised deal, Axis Bank now plans to acquire up to 9% as opposed to the earlier agreed upon 17% of the equity share capital of Max Life while its subsidiaries Axis C

apital and Axis Securities will together acquire up to 3%, the private lender said in a regulatory filing on Friday. Furthermore, the Axis entities part of the revised deal will also hold a right to further acquire an additional stake of up to 7% in Max Life in tranches. This deal, however, is subject to approvals from the regulatory authorities including RBI and Irdai.- economic times

🍒 Jana SFB upbeat on ‘collection efficiency’ backed by steady improvement in repayments : Jana Small Finance Bank expects its collection efficiency to improve to 97-98 per cent by November this year backed by a steady improvement in repayments. According to Ajay Kanwal, MD & CEO, Jana SFB, the collection efficiency was close to 87 per cent in September and is expected to improve to 90-92 per cent in October. “Covid has proved to be a challenge for all of us, and now the main task would be to stabilise the book, and by that, I mean taking collection efficiency back to 99 per cent. On the overall book level, we have reached a collection efficiency of 87 per cent till September and hope to be 90-92 per cent by October and 97-98 per cent by November. By the year-end we will be back to normal (around 99 per cent),” Kanwal told BusinessLine.- Business Line

🍒 NPS fails to enthuse traders, self employed : The National Pension Scheme (NPS) for traders, shopkeepers and self-employed has failed to make an impact, a senior Labour Ministry official has said. Latest data shows total enrolment at 42,207, which was around 34,000 in February. The scheme was launched on September 12, 2019. “We are not seeing interest from traders, self employed etc for the scheme,” the official told BusinessLine. He said there could be many reasons for this, including high yield options such as stock market or even small savings, availability of benefit after attaining age of 60 and small pension amount. “For a youth of 25 today, the pension amount of ₹3,000 at the age of 60 may not be of use for him,” he explained. - Business Line

🍒 Max Financial profit up 26% in Q2 : Max Financial Services (MFS), on Friday, reported a 26 per cent increase in consolidated net profit for the second quarter ended September 30, 2020, at ₹81 crore. Aided by higher investment income, consolidated revenues grew 50 per cent year-on-year to touch ₹7,020 crore for the quarter ended September 30. The bottomline performance for the quarter under review was bolstered by reversal of impairment loss on investments.- Business Line

🍒 Nabard HI profit rises 8% to ₹2,361 crore : The National Bank for Agriculture and Rural De velopment (Nabard) reported an 8.26 per cent increase in net profit at ₹2,361 crore in the half-year ended September 30, 2020, against ₹2,180.86 crore in the year-ago period. The government-owned development financial institution’s (DFI) loans portfolio increased to ₹4,95,095 crore as of September-end 2020, registering growth of 20.83 per cent from ₹4,09,743 crore last year. - Business Line

🍒 Give ‘deposit-accepting licences’ to all non-bank lenders above a threshold: EY-FICCI report : India should grant ‘deposit-accepting licences’ to all non-bank lenders that are credit rated ‘A’ and above by at least two credit rating agencies and having capital/networth of over ₹1,000 crore, a joint report by EY-FICCI has recommended. This recommendation forms part of the slew of measures suggested to provide a level-playing field for non-bank lenders (NBFCs and HFCs). The EY-FICCI report, ‘Non Banking Finance Sector in India – Building Resiliency’, calls for a level-playing field for all non-bank lenders while ensuring that the interest of depositors, especially small depositors, are not compromised.- Business Line

🍒 Bank lending expanded by over Rs one trillion in Sept: Soumya Kanti Ghosh : Credit growth to industry was 'nil' in September, but banks stepped up their lending to the micro-small and medium enterprises, while depending largely upon services for their loan book growth, according to data released by the Reserve Bank of India (RBI) data showed on Thursday. Growth in credit to industry, which was nil in September, had grown at 2.7 per cent YoY in September 2019. Credit to ‘medium’ enterprises expanded by 14.5 per cent. Analysing the data, State Bank of India (SBI) group chief economic advisor Soumya Kanti Ghosh said on a month-on-month basis, September actually saw a huge amount of credit activity by banks. - Business Standard

🍒 Now you can pay with PhonePe at 20 lakh shops in Maharashtra, without scanning QR code : PhonePe, one of the leading payment platform in the country, on Friday announced that it is now available as a payment option at over 20 lakh shops in Maharashtra. The platform reported a massive 64% year-on-year increase in its offline stores in the western state, the company said. From large retail chains to small shops and neighbouhood kirana stores, PhonePe offers offline payment option at over 1.3 crore shops across the country. The firm has recently introduced several new features to help "offline merchant partners grow their business and attract more customers". The ‘stores' tab available on the PhonePe app, enables "a seamless connection between PhonePe’s 23 crore customers and offline shops at scale throughout the country," the company mentioned. - Live Mint

🍒 Crop, tractor loans ineligible for ex-gratia relief as they fall into Agri allied activity, clarifies FinMin : The Ministry of Finance today clarified that agriculture and allied activity loans will not be eligible for the interest on interest waiver announced by the government last week. It added that crop and tractor loans will not be a part of the eight segments or classes eligible under the scheme as they come under agriculture and allied activities loans. It is to be noted that the government had recently announced the scheme for grant of ex-gratia payment of the difference between compound interest and simple interest for six months to borrowers in specified loan accounts. The government had notified that loan accounts with sanctioned limits and outstanding not exceeding Rs 2 crore will be eligible for the scheme and such accounts should be standard in the books of the lending institutions as of the cut-off date of 29 February 2020. The governmnet added that the benchmark rate applicable for such relief would be the contract rate used by the credit card issuers for the purpose of EMI loans. According to the scheme, the ex-gratia relief is to be credited to the account of all eligible borrowers without any requirement to apply. - Financial Express

🍒 Lakshmi Vilas Bank to send two more names to RBI for top post, favours local CEO : Troubled lender Lakshmi Vilas Bank (LVB) will recommend to the Reserve Bank of India (RBI) two more candidates for the post of MD & CEO. Interviews will be completed by November, persons in the know indicated. The bank had earlier sent a list of three candidates, but the RBI had allowed it to add more names to the list. Shakti Sinha, independent director and part of the three–member committee of directors approved by the RBI to run day-to-day operations at cash-starved LVB, told FE the lender will be conducting interviews to find more suitable candidates. - Financial Express

🍒 India's forex reserves surge $5.4 billion to all-time high of $560.532 billion : The country's foreign exchange reserves swelled by $5.412 billion to touch an all-time high of $560.532 billion in the week ended October 23, RBI data showed on October 30. In the previous week ended October 16, the reserves stood at $555.12 billion after increasing by $3.615 billion. During the reporting week, the surge in the forex kitty was mainly on account of an increase in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $5.202 billion to $517.524 billion, the RBI's weekly data showed.

🍒 Gold rate flat at Rs 50,840 per 10 gram, down 0.75% for the week : Gold prices remained unchanged at Rs 50,840 per 10 gram in the Mumbai retail market after a decline of three days on sluggish global cues as markets remain cautious ahead of the US presidential election. The precious metal was trading with marginal gain as the dollar gave up gains pushing safe-haven inflows to bullion. The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,130, Rs 46,569 and Rs 50,840, respectively, plus 3 percent GST. Silver prices declined by Rs 1,504 to Rs 59,926 per kg from its closing on October 29.

🍒 Sensex ends 135 points lower; Telecom, banking and auto stocks take hit : The 30-share index ended lower by 135.478 points or - 0.34 per cent, to 39,614.07. The benchmark fell to an intraday low of 39,241.87 and recouped some of its losses in late session. It ended yesterday at 39,749.85. On the NSE, the Nifty too was down 28.40, or 0.24 per cent, to 11,642.40. The index touched a low of 11,535.45 in the mid-session.However, the overall market breadth was almost even with positive bias on the BSE. Out the 2,751shares traded, the declining scrips were slightly lesser at 1,239, while the number of advancing shares was at 1,339. Major losere were Bharti Airtel, Bajaj Finance, Maruti, Hindusan UniLever, ICICI Bank, Infosys, Bajaj Auto, HDFC and Kotak Bank 

🍒 Rupee slumps 23 paise, settles below 74/USD level : The rupee continued its downward journey on Thursday, sliding another 23 paise to settle at 74.10 against the US dollar, tracking weak domestic equities and strong American currency amid global risk aversion. At the interbank forex market, the domestic unit opened weak at 74.02 against the greenback, then lost further ground and finally closed at 74.10 against the American currency, showing a fall of 23 paise over its previous close..

29.10.2020: Today's Banking / Financial News

29.10.2020: Today's Banking / Financial News at a Glance

🍒 SBI signs $1-b loan deal with JBIC : State Bank of India (SBI) has signed a loan agreement amounting to up to $1 billion with Japan Bank for International Cooperation (JBIC). India’s largest bank, in a statement, said the ‘untied’ loan is intended to provide funds for manufacturers, suppliers and dealers of Japanese automobiles in India.As per the statement, $600 million will be financed by JBIC and $400 million by other participating banks. JBIC will provide a guarantee for the portion co-financed by the participating banks – SMBC, MUFG Bank, Mizuho Bank, Shizuoka Bank and Bank of Yokahama. - Business Line

🍒 SBI ties up with global education platform edX : State Bank of India (SBI) has entered into a strategic partnership with global non-profit education platform edX, where the bank will offer its Massive Open Online Courses (MOOCs) on the platform from Novemberonwards. Initially, SBI will be offering three courses – Unleashing Creativity at the Workplace, Relationship Marketing Strategy for Financial Services, and Conflict Resolution, said SBIin a statement. “The duration of these courses would be for four to six weeks, with an expected spend of two to three hours per week on a course. Interested learners need no specific academic qualifications to apply for the same,” said SBI. - Business Line

🍒 Loans against FDs, bonds, shares out of Nirmala Sitharaman's relief plan : Loans against fixed deposits, bonds and shares will not be eligible for relief under the government scheme for an ‘ex gratia’ payment to borrowers of up to Rs 2 crore. However, in the case of credit card dues, the government has clarified that the outstanding as on February 29 will be eligible for relief. The government on Tuesday released FAQs (frequently asked questions) on its scheme to provide ex gratia payment for the difference between simple and compound interest for borrowers of up to Rs 2 crore. This is available for the period of moratorium (March 1 to August 31, 2020) announced by the RBI. The FAQs clarify that for calculating the Rs 2-crore loan amount limit, banks will take into account all borrowings and not just a single loan. - economic times

🍒 Jan Dhan accounts rise 60% amid pandemic, help stifle crime: SBI Research: The Covid-19 pandemic has led to a 60% increase in opening of new Jan Dhan accounts and they are acting as a deterrent to crime in several states, an SBI research report has said. Latest data showed that the total number of Pradhan Mantri Jan Dhan Yojana accounts stood at over 41 crore with a total balance of Rs 1.31 lakh crore. Since April 1, around 3 crore accounts were opened, with deposits of Rs 11,060 crore. The average balance of PMJDY accounts increased to Rs 3,400 in April and declined thereafter to Rs 3,168 in September and marginally increased to Rs 3,185 in October, the report said. - economic times

🍒 Interest waiver: Outstanding as of Feb 29 to be reference for ex gratia relief : The loan outstanding as of February 29 would be the reference amount for calculating the differential interest amount under the 'scheme for grant of ex gratia payment of difference between compound interest and simple interest' according to the FAQs released by the Finance Ministry. The Reserve Bank on Tuesday asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by November 5, as decided by the government. Last Friday, the government had announced the scheme for grant of ex gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. The lending institutions have been asked to complete the exercise of crediting the amount in the accounts of borrowers by November 5.. - economic times

🍒 Amazon Pay ICICI Bank credit card crosses 10-lakh issuance milestone : Amazon Pay and ICICI Bank on Wednesday announced that the bank has issued about 14 lakh Amazon Pay ICICI Bank credit cards. “In the process, the credit card has become the fastest in the country to cross the milestone of 10 lakh, in less than 20 months of its launch,” they said in a statement. Amazon Pay and ICICI Bank introduced the co-branded credit card, powered by Visa, in 2018. Sudipta Roy, Head – Unsecured Assets, ICICI Bank, said the bank enabled video KYC facility across the country in June 2020, thereby allowing new-to-bank customers to apply for the credit card seamlessly from anywhere in the country. “We believe that with this facility, more customers will be able to apply for the card in a contactless and safe way,” he said “To make digital payments more convenient and seamless we have introduced instant issuance of cards in under 60 seconds and 100 per cent digital video KYC enabled issuance. It is the trust that customers have in us that encourages us to further innovate on behalf of them,” said Vikas Bansal, Director and Head Financial Services, Amazon Pay. - Business Line

🍒 AU Small Finance Bank Q2 net profit up 87% : AU Small Finance Bank reported an 87.2 per cent jump in net profit to ₹321.87 crore in the second quarter of this fiscal from ₹171.94 crore a year ago. Its net interest income grew by 24 per cent on a year-on-year basis to ₹561 crore in the quarter ended September 30, 2020, though other income fell by 6 per cent to ₹141 crore. Its provisions declined to ₹574 crore in the second quarter of this fiscal, 6 per cent lower than ₹610 crore a year ago. “The bank carries ₹278 crore of Covid-19-related provisions, which constitute about 1 per cent of gross advances,” said AU Small Finance Bank in a statement on Wednesday.- Business Line

🍒 RBI report: States to re-prioritise revenue spends; sharp cutback in capex on the cards: Over the past decade, States have been cutting back their capital expenditure significantly to rein in their fiscal deficit. With Covid-led disruptions leading to large shortfalls in revenues receipts and rise in revenue expenditure, States are expected to cut back on capex spend more significantly this fiscal, according to the RBI Annual Report on State Finances: 2020-21. States have cut back capex by almost 0.5 per cent of GDP in recent years; the cut in 2019-20 was the steepest at 0.6 per cent of GDP. The pandemic-led disruption in capex activity in the first half of this fiscal and steep shortfall in revenues is expected to lead to deeper cuts in capex spend in 2020-21 (in relation to what was budgeted earlier in the year). - Business Line

🍒 Google Pay is now back for iPhone users in India :   New users can now download the latest version 115.2 from the App Store while existing users will be required to update the app. The Google Pay for India (Tez) app is now back up on Apple’s App Store. The app had been temporarily taken down from Apple’s App Store to fix specific issues. The app was unavailable on the App Store for almost two days. The app was available for Android users. Google, in a statement, had previously said that the app had been briefly taken down from the App store as it was working to fix issues with payment failures. “A small number of Apple iOS users might experience persistent payment failures on their transactions. Our teams are working to fix it at the earliest. Meanwhile, affected users can reach out to Google Pay support through the app for help. We apologise for the inconvenience to our users,” a Google spokesperson had said in a statement. - Business Line

🍒 Gold-loan NBFCs will see up to 18% growth in AUM in FY21 : Gold loan non-banking finance companies (NBFCs) will see a 15-18 per cent growth in assets under management in fiscal 2021 as demand for gold loans would rise with the Covid-19 pandemic-driven lockdowns being lifted slowly and economic activity clawing back, according to Crisil Ratings. Demand for gold loans would rise, especially from individuals meeting urgent personal requirements and from micro enterprises for working capital to restart businesses, the credit rating agency said. Crisil observed that gold loans would be preferred also because NBFCs and banks have tightened their underwriting norms for other loans, leading to cautious lending to micro and small enterprises, traders and the self-employed.  - Business Line

🍒 RBL Bank Q2 net profit surges to ₹144 cr : Private sector lender RBL Bank’s net profit shot up to ₹144.16 crore in the second quarter of fiscal against ₹54.13 crore in the same period a year ago. For the quarter ended September 30, 2020, its total income was ₹2,533.47 crore, about 1.3 per cent lower than ₹2,567.68 crore a year ago. Net interest income increased by 7 per cent to ₹932 crore in the second quarter of the fiscal from ₹869 crore a year ago. Net interest margin was 4.34 per cent as on September 30, 2020, versus 4.35 per cent a year ago. ther income increased by three per cent on an annual basis to ₹456 crore in the quarter under review. - Business Line

🍒 Axis Bank posts net profit of ₹1,623 crore in Q2 : Private sector lender Axis Bank reported a standalone net profit of ₹1,628.67 crore for the second quarter of the fiscal against a net loss of ₹112.08 crore a year ago. For the quarter ended September 30, 2020, the bank’s total income grew by 2.8 per cent to ₹19,870.07 crore when compared to ₹19,333.57 crore in the same period last fiscal. The bank’s net interest income grew by 20 per cent to ₹7,326 crore in the July to September 2020 quarter from ₹6,102 crore in the same period last fiscal. Net interest margin for the second quarter of this fiscal was 3.58 per cent against 3.51 per cent a year ago. - Business Line

🍒 Board size matters for better performance of banks: study : Empirical results suggest that board size of a Bank matters, with more board members exerting pressure for performance by better monitoring and control, according to a working paper put together by two IIM Professors. “At the same time, they (more board members) bring a wide variety of expertise which are performance-enhancing. We also find that better performance is associated with higher compensation. “High-powered incentives might motivate the board members to actively contribute in the monitoring and advisory roles,” said Abhiman Das, Professor, Indian Institute of Management (IIM), Ahmedabad and Balagopal Gopalakrishnan, Assistant Professor, IIM, Kozhikode, in the paper. - Business Line

🍒 Healthy core performance, prudent provisioning can mitigate asset quality risks : Amid industry-wide challenges on credit offtake and deposit accretion (for a few private banks), Axis Bank put up a good show in the September quarter. Healthy growth in core net interest income, backed by improvement in disbursements across segments, good traction in deposits, higher fee income, strong capital ratios and prudent provisioning, are key positives that can hold the stock in good stead over the medium term. However, as is the case for the entire banking sector, asset quality uncertainty continues to weigh on Axis Bank. As such, the bank’s asset quality was under pressure before the Covid-led disruption, with slippages steadily rising in the first three quarters of FY20.- Business Line

🍒 Covid-19: Mahindra Finance expects loan recast worth Rs 6,000 crore : Mahindra and Mahindra Financial Services expect to restructure loans worth Rs 6,000 crore of 0.15 million customers under RBI's loan Covid-19 regulatory package. It will also work to keep net Non-Performing Assets (NPAs) below four per cent in the current fiscal end. Out of 1.6 million customers, 100,000-150,000 accounts are likely to come up for restructuring. That amount would be around Rs 6,000 crore. Some customers have sought an additional two-three months to repay, meaning they would start to repay from January. Another set of customers have sought reduction of Equated Monthly installments (EMI) for six months, said Vice Chairman and Managing Director Ramesh Iyer in an analyst call post Q2FY21 results. Its loan book rose to Rs 64,389 crore at the end of September 2020 from Rs 63,793 crore a year ago. - Business Standard

🍒 Banks turn to AI to curtail loan frauds : Banks such as state-run Punjab National Bank (PNB) are looking to deploy an artificial intelligence-enabled early warning signal system that crawls the web for information on borrower's activities, including news articles and social media. Having burnt its fingers in the Nirav Modi scam and seen quite a few wilful defaults, Punjab National Bank has decided to outsource its early warning signal (EWS) system. So far, the bank has been using an in-house system but wants an external agency to revamp it. Some of the capabilities sought by the bank are artificial intelligence, web crawling, optical character recognition (OCR) for triggering the early warning signal. The bank has put out a public notice seeking bids from interested parties According to the notice, the bank wants a solution capable of giving early warning signals on a dynamic basis, based on information collected from various internal and external sources. This, the bank said, will aid timely corrective action in such loan accounts. - Live Mint

🍒 Deutsche Bank rebound hinges more than ever on trading unit : Five quarters into a historic restructuring of Deutsche Bank AG that aimed to emphasize lending and reduce reliance on trading, Chief Executive Officer Christian Sewing is more dependent on the securities unit than he has ever been. Germany’s largest lender on Wednesday reported a 47% jump in debt trading, beating all but one of the large investment banks so far and prompting Sewing to lift the outlook. The boost propelled the firm to an unexpected third-quarter profit, even as the corporate bank around which the CEO built his strategy continued to shrink amid negative interest rates and the worsening pandemic. - Live Mint

🍒 US SEC not to take action against ICICI Bank in provisioning probe : ICICI Bank on Tuesday said the US Securities and Exchange Commission (SEC) has concluded a probe into the bank’s bad-loan provisioning exercise and decided not to take any enforcement action against it. The probe dates back to 2018, when the lender had received requests for information from the SEC investigatory staff for an enquiry relating to the timing and amount of the bank’s loan impairment provisions taken under US GAAP (generally accepted accounting principles). “The Bank has via its legal counsel received a communication from the United States Securities and Exchange Commission (‘SEC’) that they have concluded their investigation into the Bank’s loan impairment provisions under US GAAP and that the SEC does not intend to take any enforcement action against the Bank,” ICICI Bank said in a notification to the exchanges. - financial express

🍒 UPI volumes fall in these two states, even as jump in all other states; sharpest rise in 7 sisters : Uttar Pradesh and Haryana are the only two Indian states that saw a contraction in the UPI payments volume in the first quarter of the current fiscal year. Except for these two states, all the states, including those with a decline in IMPS volume, saw growth in UPI transaction volume, according to the latest RBI report. The growth in the volume of UPI payments was highest in the north-eastern states. While the volume surged 57.3 per cent in India during Q1, the states in the north-east reported growth in excess of 140 per cent. The trend highlights the user preference of UPI over IMPS during the pandemic, on account of its ease of usage and operability, especially for small value transactions. It is to be noted that economically advanced states like Maharashtra and Delhi, which account for a higher share of total digital transactions, saw a significant fall in Immediate Payment Service (IMPS) transaction volume during the first quarter, compared to the fall of 9.6 per cent in all-India average. - financial express

🍒 PNB Housing Finance Q2 net down 15% at Rs 313 crore : PNB Housing Finance on Wednesday reported a 15 percent decline in net profit at Rs 313 crore for the quarter ended September. The housing finance company had posted a net profit of Rs 367 crore during the corresponding period of the previous fiscal. Total revenue during the July-September period of FY21 declined by 9 percent at Rs 2,022 crore, as against Rs 2,230 crore in the same period of 2019-20, PNB Housing Finance said in a statement. Net interest margin stood at 3.5 percent as compared to 3.2 percent earlier, while the gross margin (net of acquisition cost) stood at 3.5 percent as against 3.4 percent a year earlier. - Moneycontrol

🍒 Gold prices flat at Rs 50,989/10 gm, IBJA says sales in south India back to normal levels : Gold prices fell marginally (Rs 54) to Rs 50,989 per 10 gram in the Mumbai retail market on a firm dollar and weak global cues. The precious metal has been trading in a narrow range for the last few weeks as the dollar ticked higher, with investors awaiting next week’s US Presidential election and lack of progress on a stimulus package. The dollar trades trade firm at 93.59, up 0.72 percent, against a basket of major currencies on safe-haven buying. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,242, Rs 46,706 and Rs 46,706, respectively, plus 3 percent GST.   Silver prices dropped Rs 561 to Rs 61,430 per kg from its closing on October 27.

🍒 Sensex plunges 600 points; Nifty cracks below 11,750 : After hitting a low of 39,774.60 during the day, the 30-share BSE index ended 599.64 points or 1.48 per cent lower at 39,922.46. Similarly, the broader NSE tanked 159.80 points or 1.34 per cent to close at 11,729.60.IndusInd Bank was the top loser in the Sensex pack, shedding over 3 per cent, followed by HDFC, ICICI Bank, Tech Mahindra, Bajaj Finance, UltraTech Cement and Tata Steel.On the other hand, Bharti Airtel was the top gainer, rallying more than 4 per cent, after the country’s second-largest telecom operator reported its highest-ever quarterly consolidated revenue, helping it narrow losses in the July-September period.

🍒 Rupee settles 16 paise lower at 73.87 against US dollar : The rupee depreciated 16 paise and settled at 73.87 against the US dollar on Wednesday as heavy selling in the domestic equity market and strengthening American currency weighed on investor sentiment. At the interbank forex market, the rupee opened on a positive note at 73.70 against the greenback, but soon pared the gains and closed for the day at 73.87, registering a decline of 16 paise over its previous close

28.10.2020: Today's Banking / Financial News

28.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI asks lenders to implement compound interest waiver scheme : The Reserve Bank on Tuesday asked all lending institutions, including NBFCs, to implement the waiver of interest on interest for loans up to ₹2 crore for the six months moratorium period beginning March 1, 2020. On October 23, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. The scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions.- Business Line

🍒 RBI: Difficult years ahead for States, and federalism : The next few years are going to be challenging for States due to the impact of the Covid-19 pandemic, which could also leave lasting scars on federalism, the Reserve Bank of India has cautioned. With States in the frontline of the battle against Covid, their fiscal arithmetic for 2020-21 is likely to suffer, the central bank said in its report, State Finances — A Study of Budgets of 2020-21. According to the report, States’ combined GFD (Gross Fiscal Deficit) is projected to widen beyond 4 per cent of GDP in the baseline scenario, higher than the budgeted 2.8 per cent of GDP for 2020-21.- Business Line

🍒 Centre initiates groundwork for IDBI Bank stake sale : The Centre is initiating plans to sell stake in IDBI Bank, though the exact modalities for the transaction are likely to be finalised later. The Finance Ministry is likely to seek Cabinet approval over the next few weeks for selling its stake in IDBI Bank, sources close to the development said, but added that this would be the first step and that the transaction could take place towards the end of the fiscal year or early next fiscal.The Centre currently holds a 47.11 per cent stake in IDBI Bank, and may consider selling stake in two to three tranches.State-owned Life Insurance Corporation of India, which owns a 51 per cent stake in the bank, has also been alerted on the proposal, but it is unclear whether it will divest stake in the bank as of now. The insurer may choose to prune its stake in the bank at a later time when valuations are more attractive. “As of now, work has begun on the initial proposal,” said a person familiar with the development.- Business Line

🍒 PMJDY usage more frequent in areas prone to crime: SBI report : Usage of the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts increases over time in regions that are more prone to theft, according to State Bank of India’s economic research report ‘Ecowrap’. The report underscored that empirical research suggests that PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption, increased spending on healthcare and most importantly the usage is more frequent in areas that are more crime prone. Acknowledging that the genesis of crime can also be traced to interplay of various social, economic, demographic, local and institutional factors, apart from putting more money in accounts at the lower strata of society, there is evidence of PMJDY accounts having some impact on crime, the report said .- Business Line

🍒 Atal Pension Yojana: PFRDA enables online on-boarding through banks’ own portal : Savings bank customers may soon get another channel for online on-boarding to the Atal Pension Yojana (APY) — a government-backed pension scheme targeted at the unorganised sector — without having to use Net banking or a mobile App. Pension regulator PFRDA has now allowed APY-Points of Presence (PoPs) to introduce an alternate channel for online on-boarding of their existing Savings account of customers through the bank’s own web portal. Currently, some banks are providing online APY account opening through Net Banking or mobile app. However, a large number of bank customers who are eligible are not using either of the facilities. In such cases, these bank customers are not able to open an APY account through online/digital mode. To solve this issue, PFRDA has enabled the facility of ‘Online Paperless On-boarding of Subscribers using the Web Portal’, sources said. - Business Line

🍒 SIDBI's 'Standup Mitra' portal records over 96,000 loan sanctions : The Small Industries Development Bank of India (Sidbi) on Tuesday said its 'Standup Mitra' portal has recorded over 96,000 loan sanctions worth over Rs 21,000 crore as of September end. The portal, developed by Sidbi, was launched in April 2016 to extend online financial assistance to the unserved and underserved segment of the society without the need of visiting any bank branch, and apply for loan online under the Stand-Up India scheme. The Standup Mitra portal "has successfully recorded more than 96,000 loan sanctions worth more than Rs 21,000 crore as on September 30, 2020," Sidbi said in a release. - Business Standard

🍒 Massive jump in Jan Dhan accounts during pandemic; labour remittances touch pre-Covid levels : The coronavirus pandemic has led to a massive surge in PM Jan Dhan Yojana accounts since the beginning of the ongoing financial year. The total number of PMJDY accounts stood at 41.05 crores with a total balance of Rs 1.31 lakh crore, said the SBI Ecowrap report. Since 1 April, around 3 crore accounts were opened, with a total rise in deposits of Rs 11,060 crore in those accounts. The pandemic has led to a 60 per cent increase in the opening of new Jan Dhan accounts, the report added. PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption, and increased spending on healthcare. The research further stated that there was a significant reduction in remittances due to lockdown and it touched the lowest level in April. However, it increased in June and July, and in the month of September, it has just crossed the pre-COVID level as witnessed in February. Thus, it seems migrant labourers are coming back in adequate numbers to workplaces for livelihood and that too much before Diwali as was largely expected, the report added. - financial express

🍒 RBI asks Lakshmi Vilas Bank to reconsider names proposed for new MD & CEO : The Reserve Bank of India has asked Lakshmi Vilas Bank (LVB), which is in the midst of a merger process with Clix group, to reconsider the names proposed for the post of new MD & CEO, a senior official said on Tuesday. In September, shareholders of the cash-strapped private sector lender had voted out seven board members, including MD & CEO S Sundar, at the annual general meeting. Subsequently, RBI appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra. “In the first round, we had done interviews of three candidates and sent the names to RBI. But the Reserve Bank has come back to us saying that we have to reconsider. So, we have started the process again. Now, we are broadening our search with more candidates,” Shakti Sinha told PTI. He noted that appointing a new MD & CEO is a complex and long process, and right now, the process of merger with Clix group assumes more significance. - financial express

🍒 CSB Bank, IIFL Finance join hands to offer gold loans in untapped locations : Private sector lender CSB Bank has tied up with IIFL Finance to offer gold loans in untapped locations, including rural areas. Under the partnership, IIFL, a non-banking financial company, will act as a business correspondent of CSB Bank and will source new business from markets where CSB Bank does not have adequate branch network. IIFL, with its vast branch network, would help CSB Bank penetrate the lower strata of customers and rural areas, where the bank currently does not have adequate reach. This arrangement would result in scaling up of the customer base, a joint statement said. - moneycontrol.

🍒 Paytm Money launches ETFs starting ₹16 in equity, ₹44 in gold and ₹120 for NIFTY : Paytm Money, a wholly-owned subsidiary of digital financial services platform Paytm, has launched Exchange-Traded Funds (ETFs) on its platform, post-approval from the Securities and Exchange Board of India (SEBI). These are passive funds that are listed on NSE/BSE and traded like regular equity shares proving the merits of mutual funds along with the return potential of stocks. Paytm Money said that it believes that ETF is an essential part of an investor’s portfolio and all Indians must invest in it. Therefore, the company has made it convenient for new investors by facilitating ETF investments for as low as ₹ 16 in Equity, ₹ 44 in Gold and ₹ 120 for NIFTY. .- Business Line 

🍒 BharatPe launches digital gold on its platform : BharatPe, a leading merchant payment network, has announced the launch of digital gold on its platform. The launch of this new category of fintech product is in line with the company’s commitment to offer the entire gamut of financial products to Small and Medium Enterprises (SMEs). Through this latest offering, BharatPe’s merchants will be able to buy and sell 99.5 per cent pure24-carat gold. Merchants can choose to buy in rupees or grams, any time of the day and from anywhere, by using the BharatPe app. - Business Line

🍒 Banks relieved as government notifies reimbursement of compound interest : Banks are relieved at the government notification waiving off only compounded interest as it will restrict their losses without burdening the fisc much. On Tuesday, the Reserve Bank of India (RBI) issued a notification directing banks to follow the government order reimbursing small borrowers with loans up Rs 2 crore that have paid compounded interest on their loans between March 1 and August 31. Bankers said the government's clarity and its notification committing to bear the difference between the rates have lifted a major over hang over banks. "This issue has now been taken care off. The fact that the government has given a timeline for crediting the losses to banks is very positive because at one time we were not sure of what the court would say and whether we will have to bear the burden," said a bank CEO. - economic times

🍒 Yes Bank starts physical takeover of Anil Ambani’s Reliance Group HQ in Mumbai : Yes Bank has started the process for obtaining physical possession of Reliance Centre, the headquarters of Anil Ambani’s Reliance Group in Mumbai. The bank is seeking to either sell the property to realise its dues, or may move its headquarters there. In July, the private lender had taken symbolic possession of the sprawling complex situated off the Western Express Highway and overlooking the Mumbai airport. The action was taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act to recover dues of Rs 2,892 crore from Reliance Infrastructure. In terms of the act, the bank has to give a two-month notice before taking possession, which the bank had done in May. - economic times

🍒 MSMEs suffered 'triple whammy' during COVID lockdown; reverse migration added to woes : India’s micro small and medium enterprises (MSMEs) suffered a ‘triple whammy’ because of the COVID lockdown in India. Along with other factors, massive reverse migration too took a toll on the MSMEs, said the central bank in a report. “The lockdown was a triple whammy for the MSME sector in India – supply disruption; domestic demand shock; and external demand decline,” said the RBI.India has 63.4 million MSMEs which contribute significantly to the country’s economy. The sector accounts for 45 per cent of manufacturing output, more than 40 per cent of exports and employs about 120 million people. “MSMEs have taken a bigger hit than other sectors, particularly because of the spatial distribution of the pandemic that is skewed towards states with a higher share of MSMEs, more so micro and small enterprises,” RBI said in the report.- moneycontrol.

🍒 Gold prices slip marginally to Rs 51,043/10 gm, silver rises by Rs 285/kg : Gold prices fell marginally by Rs 195 to Rs 51,043 per 10 gram in the Mumbai retail market on a stronger rupee and lacklustre global cues. The precious metal steadied around $1,900 per troy ounce as investors weighed fading prospects of financial aid before next week’s US presidential elections. The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,282, Rs 46,755 and Rs 51,043, respectively, plus 3 percent GST. Silver prices rose Rs 285 to Rs 61,991 per kg from its closing on October 26.

🍒 Rupee settles 13 paise higher at 73.71 against US dollar : The rupee pared early losses and settled 13 paise higher at 73.71 against the US dollar on Tuesday, tracking positive domestic equities. At the interbank forex market, the domestic unit opened on a weak note at 73.94 against the greenback, but soon recovered the lost ground and finally closed at 73.71, registering a gain of 13 paise over its previous close of 73.84 against the US currency. During the session, the domestic unit witnessed an intra-day high of 73.71 and a low of 73.94 against the greenback.

🍒 JM Financial clocks 7.31 per cent rise in Q2 net profit : Diversified financial services firm JM Financial has posted a 7.31 per cent rise in net profit of ₹139.06 crore in the second quarter ended September 30, riding mainly on its investment banking, Wealth Management and Securities (IWS) business. “Despite a tough business environment, our investment banking, wealth management and securities businesses remained resilient by demonstrating strong performance. We continue to maintain liquidity buffers and healthy leverage ratios,” JM Financial Group Managing Director Vishal Kampani said. - Business Line

🍒 Angel Broking records highest ever quarterly PAT at ₹74.6 crore in Q2 : Angel Broking, which recently got listed on the bourses, has reported its highest ever quarterly profit after tax (PAT) at ₹74.6 crore for the second quarter ended September 30, 2020. This is substantially higher than the net profit of ₹48.3 crore recorded in the first quarter this fiscal and ₹18.9 crore in the second quarter of last fiscal. Total income for the quarter under review stood at ₹317.9 crore, up 29 per cent over total income of ₹246.6 crore in the previous quarter. The board of directors has recommended a second interim dividend of ₹4.15 per equity share of ₹10 each. - Business Line

🍒 Sensex rallies 376 points higher led by banking, financials stocks : The BSE benchmark Sensex ended higher by 376.60 points, or 0.94%, at 40,522.10. The benchmark had touched a low of 39,978.39 in the opening trading session, but steadily improved on buying support.On the NSE, the Nifty too rebounded from an initial low of 11,723, and touched a high of 11,899.05 before settling at 11,889.40, gaining 121.65 points over its previous close of 11,767.75. Indices were led by gains in index-heavyweights such as Kotak Bank, NTPC, Nestle, Asian Paint, Bajaj Auto, UltraCem Co, L&T and Tech Mahindra amid negative trend in other Asian markets.- Business Line.