06.11.2020: Today's Banking / Financial News

06.11.2020: Today's Banking / Financial News at a Glance

🍒 Bank of Baroda rolls out free counselling for 8,000 employees : Bank of Baroda announced that it has rolled out free and anonymous psychological counselling for 8000 odd employees on a pilot basis. The public-sector bank has a total of 84,000 employees nationally. The program will cover all employees in the Mumbai zone. Prakash Vir Rathi, general manager (human resource management), in a phone call with ET said that the coronavirus pandemic had raised stress levels among employees. The employee assistance program was aimed at alleviating stress among the bank’s employees, especially younger employees. Around 60% of the bank’s employees are aged between 18-35 years. “They often face peer pressure, career and ambition issues, relationship / adjustment issues, etc. In such cases, expert counselling shall be of immense help in providing timely support to them for their emotional worries," said Rathi. -economic times

🍒 Loan moratorium case: Facing great difficulties with interim order on NPAs, says RBI to SC : The Reserve Bank of India told the Supreme Court on Thursday that it is facing “great difficulties” with the court’s interim order against declaring as non-performing assets (NPAs) accounts found perfectly good till August 31, 2020. On September 3, the apex court had, as an interim measure considering the hardships of the pandemic and moratorium, directed that “accounts which were not declared NPA till August 31, 2020 shall not be declared NPA till further orders”. - Business Line

🍒 RBI allows co-origination of PSL loans by banks and NBFCs : Reserve Bank of India (RBI) has eased norms to allow co-origination of priority sector loans by banks and non banking finance companies (NBFCs). The new RBI norms also allow co-origination of norms by housing finance companies and follows the central bank's announcement regarding the same after the monetary policy review last month. The RBI hopes that the co-lending model (CLM), will improve the flow of credit to the unserved and underserved sector of the economy at an affordable cost, considering the lower cost of funds from banks and greater reach of the NBFCs. -economic times

🍒 ICICI Bank's millennial branches to host entertainment shows as part of new offering : The country's second-largest private sector lender ICICI Bank on Thursday launched a special offering for the millennial segment, with features like exclusive branches that will host entertainment events. The country is poised for a demographic dividend, which will see millions of youth join the workforce, its executive director Anup Bagchi said, adding there are 40 million 'progressive' millennials who will contribute significantly to the economy and banking in the years to come. He said after extensive research, the bank has launched the mobile-first, personalised and experiential-led banking platform christened 'Mine' for this segment. -economic times

🍒 HDFC Bank appoints Ramesh Lakshminarayanan as its new CIO : Largest private sector lender HDFC Bank on Thursday said it has hired Ramesh Lakshminarayanan as its next chief information officer (CIO). The appointment comes nearly four months after the resignation of its the then CIO Munish Mittal to pursue higher education in the UK after spending over 25 years at the bank. This is also the first major hiring the bank has announced under its new chief executive and managing director Sashidhar Jagdishan. Lakshminarayanan joins from rating agency Crisil, where he was serving as the chief technology and information officer, HDFC Bank said in a statement, adding that he has also had stints with Kotak Mahindra Bank, Citibank and ABN Amro Bank. -economic times

🍒 Indian banks see revival in loan growth but concerns linger : Indian banks are loosening their purse strings and lending more as pent-up demand surfaces in the Indian festive season, though growth is still nearly half that seen last year. Several lenders including State Bank of India, the country's largest lender and HDFC Bank, India's most valuable bank by market capitalisation saw demand for housing and vehicle loans return to near pre-pandemic levels in the quarter ended September. "Now that the loan moratorium is over and we have a clearer view about repayments, we're feeling more comfortable about lending both on unsecured as well as secured retail loans," said the head of retail banking at a public sector bank, who asked not to be identified as the lender has yet to report its results. -economic times

🍒 Muthoot Capital posts ₹16-cr net profit in Q2 : Muthoot Capital Services Ltd has posted a net profit of ₹15.7 crore in Q2 of FY21 against a 14 crore in the same quarter last year. The total income for the quarter touched ₹143.7 crore. With economic growthstarting tonormalise, the company disbursed two-wheeler loans amounting to ₹106.1 crore only and had a total disbursement of ₹116.1 crore during the quarter. Total AUM reached ₹2,269 crore at the end of the quarter, including the assigned portfolio of ₹34 crore. For the same quarter last year, the company had a total disbursement of ₹487.8 crore, and AUM at the end of same quarter last year was at ₹2,760 crore. During the same quarter last year, the company reported a total revenue of ₹145 crore. - Business Line

🍒 NPCI allows WhatsApp to go live on UPI : The National Payments Corporation of India (NPCI) has given approval for WhatsApp to ‘go live’ on UPI in the multi-bank model. “WhatsApp can expand its UPI user base in a graded manner, starting with a maximum registered user base of 2 crore in UPI,” NPCI said in a statement on Thursday. The announcement came soon after NPCI also issued a cap of 30 per cent of total volume of transactions processed in UPI, applicable on all Third Party App Providers (TPAPs) with effect from January 1, 2021. WhatsApp has been running pilots of its payment service – WhatsApp Pay – but till now it had not received permission to run it on a full scale due to concerns over data localisation.. - Business Line

🍒 RBI to conduct ₹20,000-crore OMO : The Reserve Bank of India (RBI), on Thursday, said it will continue to conduct Open Market Operation (OMO) purchase auctions of ₹20,000 crore, as well as OMOs in State Development Loans (SDL), along with other operations. The central bank will be notifying the details of these operations separately. The aforementioned measures – based on an ongoing assessment of liquidity conditions – are aimed at supporting market sentiment and assuring adequate liquidity all along the yield curve, RBI said. As part of these measures, the Reserve Bank has decided to conduct OMOs involving a simultaneous purchase and sale of Government Securities (G-Secs) for an aggregate amount of ₹10,000 crore each on November 12, 2020. - Business Line

🍒 NPCI puts 30% cap on volume for all third-party apps offering UPI : The National Payments Corporation of India (NPCI) has decided to put a 30 per cent volume cap for third-party applications offering UPI. “With UPI reaching 200 crore transactions a month and with potential for future growth, it has issued a cap of 30 per cent of total volume of transactions processed in UPI, applicable on all Third Party App Providers (TPAPs). This will be with effect from January 1, 2021,” NPCI said in a statement on Thursday. This will help to address the risks and protect the UPI ecosystem as it further scales up, NPCI further said. The move comes after UPI transactions crossed the 200-crore mark in October, amounting to 207.16 crore payments worth ₹3.86-lakh crore. “The existing TPAPs exceeding the specified cap will have a period of two years from January 2021 to comply with the same in a phased manner,” it said. - Business Line

🍒 Aditya Birla Capital Q2 net marginally up at Rs 264 cr : Aditya Birla Capital on Thursday reported a 3 per cent increase in its consolidated net profit to Rs 264 crore for the second quarter ended September. The company’s net profit stood at Rs 256 crore in the same quarter a year ago. The net profit jumped 33 per cent quarter-on-quarter from Rs 198 crore for first quarter ended June, marking a move towards normalcy and growth, with continued resilience across businesses, the company said. - Business Line

🍒 GST collection, power consumption show recovery: Ex-RBI chief C Rangarajan : Former governor of the Reserve Bank of India (RBI) C Rangarajan on Thursday said the decline in the growth of the economy triggered by COVID-19 was like a coma that stays for a short period. Rangarajan, also the former Prime Minister's Economic Advisory Council chairman, said this during 'SICCI-360' organised here by the Southern India Chamber of Commerce and Industry. "(Normally) Coma lasts for several years (in medical terms). But there are people who come out of it in a shorter period. This is a coma which is short-lived. The point is as you (gradually) lift the lockdown, I expect the economic activity to pick up," he said. - economic times

🍒 Provision of SARFAESI Act empowering DMs to attach secured assets of borrowers directory: SC : In a relief to banks and financial institutions (FIs), the Supreme Court Thursday held that a provision of the SARFAESI Act empowering District Magistrates to take possession of secured assets of defaulting borrowers within 60 days period for handing them over to the lending FIs was “directory” and not “mandatory” in nature as banks cannot be made to suffer for the delay on the part of the government officers. Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act mandates District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon reasons recorded in writing, to banks. - economic times

🍒 SBI shares surge about 7% as brokerages upgrade stock, increase target price : Shares of State Bank of India on Thursday surged as much as 7% as many brokerages upgraded the stock and increased its target price after the lender reported better than expected earnings. SBI gained as much as 6.8%, to hit a high of Rs220.95 on BSE. At 9.50am, the scrip was trading at Rs218.15 on BSE, up 5.4% from its previous close.SBI reported a 52% year-on-year (y-o-y)jump in net profit in the September quarter to Rs4,574 crore backed by robust growth in retail loans and lower provisions for bad loans. "SBI’s current core valuation is lower than other state banks, which is unwarranted, given SBI’s strong deposit franchise, market leadership in home loans and strong traction in retail disbursals. We revise our earnings to build higher NIM and fees," said Elara Capital in a note to its investors. - Live Mint

🍒 Pay adequate compensation to shareholders during mergers, IRDAI tells insurers : Insurance Regulatory and Development Authority of India (IRDAI) on November 5 said that in merger cases between two insurers, adequate compensation must be paid to shareholders of the acquired insurers. In draft guidelines on compensation payable during insurers' mergers, IRDAI said that shareholders of acquired insurer will be eligible for compensation.Here, IRDAI said that the residual value of the assets shall be the total quantum available for payment of compensation. - moneycontrol.

🍒 Gold prices rise for fourth straight day to Rs 51,532/10 gm, silver soars Rs 1,556/kg : Gold prices surged for the fourth straight day by Rs 226 to Rs 51,532 per 10 gram in the Mumbai retail market on a sharp decline in US dollar and positive global cues, but the gains were capped by a stronger rupee. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,203 plus 3 percent GST, while 24-carat 10 gram was Rs 51,532 plus GST. The 18-carat gold quoted at Rs 38,649 plus GST in the retail market. Silver prices climbed by Rs 1,556 to Rs 62,799 per kg from its closing on November 4.

🍒 Sensex surges 724 pts; SBI up 5 per cent : After a strong start, the 30-share BSE index maintained its upward trajectory throughout the session to close at 41,340.16, up 724.02 points or 1.78 per cent. Similarly, the broader NSE Nifty zoomed 211.80 points or 1.78 per cent to finish at 12,120.30. All Sensex components closed in the green.SBI was the top gainer, soaring over 5 per cent, followed by Tata Steel, IndusInd Bank, Bajaj Finance, Bajaj Finserv and HCL Tech.

🍒 Rupee settles 40 paise higher at 74.36 against dollar : The rupee strengthened by 40 paise to close at 74.36 (provisional) against the US dollar on Thursday amid indications of Joe Biden’s victory in the US presidential elections. Traders said positive domestic equities and a weak American currency overseas also supported the local unit. At the interbank forex market, the domestic unit opened at 74.35 against the US dollar, and finally closed at 74.36, registering a rise of 40 paise over its previous close

 *🙏🏻 Forwarded as received🙏🏻*

05.11.2020: Today's Banking / Financial News

05.11.2020: Today's Banking / Financial News at a Glance

🍒 SBI Q2 results: Profit surges 52% YoY to Rs 4,574 crore, beats Street estimates : Top lender State Bank of India (SBI) reported a 51.9 per cent year-on-year (YoY) rise in net profit for the quarter ended September at Rs 4,574.16 crore. The bank had reported a net profit of Rs 3,011.73 crore in the same quarter a year ago. An ET Now poll had projected the profit figure at Rs 4,400 crore.Its total income came in at Rs 75,341.80 crore, up 3.42 per cent from Rs 72,850.78 crore a year ago. The bank’s net interest income (NII) for the quarter rose 14.56 per cent to Rs 28,181 crore, while net interest margins (NIMs) came in at 3.34 per cent, compared with 3.22 per cent a year ago.It earned interest to the tune of Rs 66,814.11 crore compared with Rs 64,312.39 crore a year ago.The bank's gross NPAs came in at 5.28 per cent against 5.44 per cent in the preceding quarter and 7.19 per cent in the same quarter a year ago. Net NPAs for the quarter stood at 1.59 per cent against 1.86 per cent in the June quarter and 2.79 per cent a year ago. - economic times

🍒 SBI Q2: Improvement in disbursements, strong deposit traction are positive signs ; Significant improvement in retail loan disbursements, ramp-up in provisions, good traction in deposits, and strong capital ratios (about ₹20,000-crore capital was raised during the September quarter) are heartening trends from State Bank of India’s latest September quarter results. However, actual slippages (if not for the Supreme Court order on asset classification standstill) for the September quarter, persisting stress in the bank’s agriculture loan book, expected restructuring, slippages in the second half, and a sizeable SMA1 (payments overdue by 31-60 days) and SMA2 (overdue by 61-90 days) book suggest more pain ahead for the bank’s asset quality. - Business Line

🍒 SBI warns bad debt can worsen even as its profit beats estimates : State Bank of India warned that the ongoing coronavirus pandemic would lead to more bad debt, even as the nation’s largest lender reported better-than-expected profit after setting aside fewer provisions for problem loans. The bank’s net income jumped 52% to 45.7 billion rupees ($610 million) for the three months to September, beating the 36.9 billion rupee average estimate of 11 analysts surveyed by Bloomberg. While its bad loan ratio fell slightly to 5.28%, from 5.44% at the end of June, SBI expects a further 200 billion rupees of loans to sour over the next six months as the pandemic continues to impacts borrowers. This would result in 600 billion rupees of problem loans, or 2.5% of its loan book, at the end of March 2021. “Going forward we might see some kind of stress in small and medium enterprises, and in the agriculture sector,” Chairman Dinesh Khara said during a post-earnings call. - Business Standard

🍒 Bank of Baroda rolls out well-being programme for its employees : Bank of Baroda (BoB) on Wednesday said it has introduced an ‘Employee Assistance Program’ to help its employees to deal with their personal problems and professional issues through psychological counselling and consulting. The public sector bank, in a statement, said it has taken the first step in addressing the issues and upkeeping employees’ emotional well-being by introducing this program initially as a pilot project in Mumbai Zone and its corporate office. - Business Line

🍒 RBI Guv Shaktikanta Das chaired SAARC FINANCE Governors’ Group, member nations discussed current initiatives : Reserve Bank of India Governor Shaktikanta Das and other central bank governors in the South East Asian nations vowed to work in tandem to fight against the Coronavirus pandemic. At the 40th meeting of the SAARC FINANCE Governors’ Group, held Wednesday, they reaffirmed their commitment to continued co-operation and sharing of central bank experiences.Das chaired the meeting and highlighted the close partnership and co-operation among the member countries. The group took stock of the macroeconomic situation in the SAARC region; discussed the current initiatives by the member countries. - economic times

🍒 RBI imposes penalty totalling Rs 15 lakh on two co-operative banks : The RBI on Wednesday said it has imposed penalty totalling Rs 15 lakh on two co-operative banks, including Millath Co-operative Bank, Davangere (Karnataka) for non-compliance with directions issued by it. A penalty of Rs 10 lakh has been imposed on Millath Co-operative Bank for "non-adherence/violation of all inclusive directions and other directions imposed on the bank", the Reserve Bank of India (RBI) said in a statement. In another statement, it said a monetary penalty of Rs 5 lakh has been imposed on The Thiruvaikuntam Co-operative Urban Bank Limited, Thoothukudi (Tamil Nadu) for contravention of the directions issued by RBI on prohibition of loans and advances to directors. - economic times

🍒 Interest on interest waiver: Banks start crediting accounts; FinMin issues additional FAQs : Banks have started refunding borrowers the compound interest charged on specified loan accounts during the moratorium period. Last week, the Reserve Bank of India (RBI) had 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. "Dear customer credited COVID-19 Relief ex-gratia of ... on November 3 to your account," a message from a public sector bank to a customer said.- economic times

🍒 SBI Card along with Paytm launch credit cards : SBI Cards and Payment Services (SBI Card) on Wednesday said it has launched credit cards in partnership with the digital payment platform Paytm. Available in two variants, Paytm SBI Card and Paytm SBI Card SELECT, the product has been launched on the Visa platform. This launch is in line with SBI Card's endeavour to offer customers tailored products which bring maximum value in line with spending needs and to encourage digital forms of payments for a safe and enhanced customer experience, SBI Card said in a release.- economic times

🍒 Yes Bank case: High Court rejects bail pleas of Wadhawans : The Bombay High Court on Wednesday rejected bail applications of Kapil and Dheeraj Wadhawan, promoters of Dewan Housing Finance Limited (DHFL), in the Yes Bank fraud case, holding that procedures were followed when a chargesheet was filed. Justice S V Kotwal rejected the arguments made by the Wadhawan brothers' lawyers, senior advocates Amit Desai and A M Singhvi, that the CBI failed to follow procedure while filing a chargesheet in the case. The Wadhawans had sought 'default bail', claiming that the Central Bureau of Investigation, the prosecuting agency, had not complied with the Code of Criminal Procedure (CrPC) while filing a chargesheet in a special CBI court here. A default bail is given when procedural aspects, such as filing chargesheet within the stipulated period, are not followed. - economic times

🍒 ‘Shriram Life Insurance to develop credit appraisal procedure’ : To maintain the quality of its credit portfolio amid falling interest rates and market volatility, Shriram Life Insurance is developing a credit appraisal procedure. “We are doing quite well in terms of assets under management and overall size of the book. We have focussed very much on the quality of the credit portfolio, and are also developing a credit appraisal procedure so that we scan our portfolio on a regular basis,” said Ajit Banerjee, Chief Investment Officer, Shriram Life Insurance. - Business Line

🍒 I-T refunds worth Rs 1.29 lakh cr issued to 39.49 lakh taxpayers : The Income Tax department has issued refunds worth over Rs 1.29 lakh crore to more than 39 lakh taxpayers so far this fiscal. This includes Personal Income Tax (PIT) refunds amounting to Rs 34,820 crore and corporate tax refunds aggregating to Rs 94,370 crore during this period. "CBDT issues refunds of over Rs 1,29,190 crore to more than 39.49 lakh taxpayers between 1st April, 2020 to 3rd November, 2020. Income tax refunds of Rs 34,820 crore have been issued in 37,55,428 cases & corporate tax refunds of Rs 94,370 crore have been issued in 1,93,059 cases,” Income Tax department said in a tweet. - economic times

🍒 46% people borrowed money to run their households during Covid times, reveals Home Credit India research : With job losses and pay cuts across industries during the Covid-19 pandemic, the lower middle-income group has been affected severely, says the findings of research from Home Credit India, a local arm of the international consumer finance provider with operations spanning over Europe and Asia. Home Credit India conducted a research across 7 cities to understand the borrowing patterns of people during the Covid lockdown. The pandemic has led to a shift in perspective towards loans and borrowing preferences, the research said. - Business Line

🍒 Banks offer competitive rates to woo home buyers : Competitive home loan rates by banks could further boost the demand for home loans. Private sector lender Kotak Mahindra Bank, which is offering one of the lowest interest rates, is keen on acquiring good quality customers in the home loan segment. “Our cost of funds has gone down apart from the policy rates. We have very competitive cost of funds. Also, home loan is one of the best asset categories. It is a relatively safer, long-term product,” said Shanti Ekambaram, Group President, Consumer Banking, Kotak Mahindra Bank. Speaking to BusinessLine, she said there is a lot of demand across the spectrum as “deals being offered by the eco-system as a whole are very interesting”. “We are seeing a lot of demand across the top five to six metros,” she said. - Business Line

🍒 Rs 1,800-cr fund infusion in pipeline; to be used to repay high-cost borrowings: PNB Housing CEO : With about Rs 1,800 crore equity fund raise in the pipeline, PNB Housing Finance plans to repay its high-cost borrowings and will ask its lenders to sweeten the lending rates as the firm is working consistently to improve profitability parameters besides enhancing the value proposition for the investors, its MD and CEO Hardayal Prasad said. PNB Housing Finance’s board has okayed to raise up to Rs 1,800 crore through a preferential or rights of shares. Of this, promoter Punjab National Bank (PNB) has already given its nod to infuse Rs 600 crore. Prasad said there is a large number of investors, of whom almost 84-85 per cent are institutional investors, who are all interested in the company. “But, we are also getting inquiries from many other players who feel that they have the ability to invest in the company directly. So, as far as the interest of our investors are concerned, it is high for the company and the franchise that has been built,” Prasad told PTI in an interview. He added that there is a strong retail book and second-highest deposit book also. “There is a massive amount of interest in the company.” - financial express

🍒 Credit cost for MFIs to rise to 6-7% in two years as loans remain unpaid : With about 12 per cent of their customers not having repaid loans till end of August, the credit costs of Micro Finance Institutions (MFIs) could rise to 6-7 per cent over two years from 1.5 per cent in FY20, according to Icra. The rating agency said 12 per cent of borrowers of 21 entities with collective assets under management (AUM) of around Rs 54,213 crore availed a complete moratorium during April-August 2020.Consequently, near-term delinquencies (30+ days past due) are expected to increase to double digits. They would remain at these levels for a few months as it will be difficult for such borrowers to clear their dues. However, the rise in credit costs could be lower at 6-7 per cent (spread over two years FY2021-FY2022; 1.5 per cent in FY2020). Entities with a higher share of such borrowers may face higher credit costs, said Supreeta Nijjar, Vice President and Sector Head, Financial Sector Ratings, ICRA. - Business Standard

🍒 PMC Bank trying to use the escape hatch used by tiny cooperative banks : Punjab and Maharashtra Co-operative Bank’s (PMC) proposal to convert deposits into equity is not a novel idea, but certainly the most visible one. Although not reported anywhere, every year depositors of one or two tiny cooperative banks undergo this fate. In most cases, deposits are converted into subordinated debts, to be serviced over at least 10 years, or the banks are merged with other cooperative banks and deposits beyond a certain amount are converted into equity with a deep discount. Both the options are done after getting consent from the depositors. The harassed depositors prefer the debt route as liquidating the equity is next to impossible. Besides, if the merged entity incurs loss, which is more often than not, then the equity holders have to bear the loss too. This erodes their deposits even further. But with a deposit base of more than Rs 11,600 crore, PMC is not a small cooperative bank. And therefore, PMC’s conversion to equity has attracted public attention. - Business Standard

🍒 Indian private banks shed Covid-19 woes, net profit rises by 159% : Indian private banks seem to have weathered the severe economic shocks inflicted by the Covid-19 pandemic, at least for now. Backed by a steady rise in net interest income (NII) and contraction in provisions, private banks posted 159 per cent growth (year-on-year) in net profit at Rs 18,814 crore in the second quarter (Q2) ended July-September 2020-21 (Q2FY21). While the asset quality held up during Q2, the real picture is masked by the Supreme Court’s (SC’s) directive that accounts not declared non-performing assets (NPAs) as of August 31 should not be classified as such until further orders. The NII in the September quarter rose 15 per cent to Rs 52,101 crore in Q2FY21, while provisions and contingencies declined 4.2 per cent to Rs 18,414, according to a Business Standard analysis of 17 listed private lenders.- Business Standard

🍒 SBI’s asset quality numbers warrant a closer look : Country’s largest lender, State Bank of India (SBI) has received applications for loan restructuring to the tune of Rs 6,495 crore in October, the bank said while announcing its second quarter results. Overall restructuring numbers could go up as customers have time till December to apply for the one-time loan recast for Covid-linked stressed assets. The total estimated slippages in Q2 (July-September) is Rs 14,388 crore, the bank said. But, if one includes the loans that are not tagged as bad following a recent interim Supreme Court order, the total fresh slippages in Q2 would stand at over Rs 17,144 crore. Overall gross NPAs also have stayed at elevated levels if one takes into account the portion of bad loans excluded under Supreme Court’s interim order. - moneycontrol.com

🍒 Gold recycling hits 8-year-high on record prices : High gold prices pushed the recycling of the yellow metal to an eight-year-high of 41 tonnes in the September quarter, with both consumers and some of the distressed jewellers recycling their inventory to meet immediate cash requirements. Average gold prices jumped 37 per cent in the September quarter to ₹45,640 per 10 grams, against ₹33,329 logged in the same period last year. In fact, prices jumped 65 per cent from ₹27,861 logged in 2018, according to the World Gold Council data. - Business Line

🍒 Gold prices remain flat at Rs 51,306 per 10 gram; silver falls by Rs 1,007 a kg : Gold prices were steady at Rs 51,306 per 10 gram in the Mumbai retail market on a sharp fall in rupee and weak global cues. The precious metal traded lower amid growing worries over the possibility of the contested US election outcome and firm dollar. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,996 plus 3 percent GST, while 24-carat 10 gram was Rs 51,306 plus GST. The 18-carat gold quoted at Rs 38,480 plus GST in the retail market. The gold/silver ratio currently stands at 83.77 to 1, which means the amount of silver required to buy one ounce of gold. Silver prices declined Rs 1,007 to Rs 61,243 per kg from its closing on November 3.

🍒 Sensex rallies 355 pts; Nifty reclaims 11,900 : Rising for the third straight session, the Sensex rallied 355 points on Wednesday following gains in Reliance Industries, Infosys and Kotak Bank amid a positive trend in global markets ahead of the outcome of the US presidential elections. After a volatile session, the 30-share BSE index ended 355.01 points or 0.88 per cent higher at 40,616.14. Similarly, the broader NSE Nifty climbed 95 points or 0.80 per cent to 11,908.50. IndusInd Bank was the top gainer in the Sensex pack, surging around 5 per cent, followed by Sun Pharma, Reliance Industries, Infosys, Kotak Bank and Tech Mahindra. On the other hand, HDFC, PowerGrid, Axis Bank, ICICI Bank, NTPC and L&T were among the laggards.

🍒 Rupee falls to over 2-month low of 74.66 amidst tight US vote : Most emerging market shares scored small gains while currencies were broadly weaker on hints of a tight race, sparking a bout of volatility across financial markets. The partially convertible rupee was at 74.66/67 per dollar at 0506 GMT versus its previous close of 74.40. The unit touched 74.78 earlier in the session, its weakest since August 24. Traders said they expect the rupee to weaken further with the unit having hit a low of 75.0550 in the overnight spot non-deliverable forward

04.11.2020: Today's Banking / Financial News

04.11.2020: Today's Banking / Financial News at a Glance

🍒 No increase in bank service charges, says FinMin : The Finance Ministry, on Tuesday, cleared the air on service charges levied by banks, and asserted that there was no truth to media reports alluding to the steep increase in service charges imposed by public sector banks (PSBs). On the Basic Savings Bank Deposit (BSBD) accounts, no service charge is applicable on the 60.04 crore accounts, including 41.13 crore Jan Dhan accounts opened by the poor and unbanked segments of society for the free services prescribed by the RBI, an official release said. As regards Regular Savings accounts, Current Accounts, cash credit accounts and overdraft accounts, the charges have not been increased, the release added. - Business Line

🍒 State-owned lender Bank of Baroda rolls back charges after public outcry : One of India's largest state-owned banks, Bank of Baroda, on Tuesday reversed course and said it would not charge for basic banking services following a public outcry. The announcement came just a day after the bank said it would begin charging customers for basic transactions, including deposits and withdrawls, above certain limits. "In view of the current prevailing COVID-19 pandemic and its impact on the economy, it has been decided to withdraw the above circular with immediate effect," the lender said in a statement. Opposition political parties had also protested against the move.Two sources said it was likely that the charges were rolled-back after government intervention.The Finance Ministry and Bank of Baroda did not immediately reply to an email seeking comment. "Other (public sector banks) have also intimated that they do not propose to raise bank charges in the near future in view the COVID pandemic," the finance ministry said in a tweet earlier today. - Economic Times

🍒 PNB to raise ₹7,000 crore via QIP in mid-December : Punjab National Bank (PNB), the country’s second largest public sector bank, will raise ₹7,000 crore through Qualified Institutional Placement (QIP) in the second or third week of December, SS Mallikarjuna Rao, Managing Director & CEO, has said. The state-owned lender also plans to raise ₹1,500 crore in Tier-2 capital and ₹3,000 crore in AT-1 capital from the market before this month-end, Rao said at a virtual press briefing to discuss the Q2 results of the bank. “As of today, we already have approvals from the Board and the Government to raise ₹14,000 crore. The ₹14,000 crore comprises of QIP of ₹7,000 crore; AT-1 capital of ₹3,000 crore and ₹4,000 crore of Tier-2 capital. In Tier-2, we have already raised ₹2,500 crore in July and September,” he said. - Business Line

🍒 Kotak Mahindra Bank trims home loan interest rates to 6.75% : Kotak Mahindra Bank has further reduced home loan interest rates by another 15 basis points. “Kotak home loan and balance transfer loans now start at 6.75 per cent per annum, which is one of the lowest rates in the home loan market,” the lender said in a statement on Tuesday, adding that the change is with effect from November 1. “The new normal has changed the functioning of the entire ecosystem. Interest rates at a 15-year low, developers significantly reducing residential property prices and having a ready inventory of ready-to-move-in homes and lower stamp duty,”it further said, adding that all these factors when taken together make home buying at this point of time extremely attractive. - Business Line

🍒 Bandhan Bank Q2 net profit falls 5% to Rs 920 crore; NII rises 26% : Private sector lender Bandhan Bank on Monday reported a 5.3 fall in net profit for the September quarter (Q2FY21) at Rs 920 crore due to additional provisions made for Covid-related uncertainties, even as it saw a robust 26 per cent growth in net interest income (NII). It had earned a net profit of Rs 971.8 crore in the corresponding period last financial year. Sequentially, though, net profit was up more than 67 per cent. Also, the bank earned its highest pre-tax profit at Rs 1,233 crore in the reporting quarter, up 6.2 per cent. NII was up almost 26 per cent to Rs 1,923 crore against Rs 1,539 crore in the corresponding period last financial year. Non-interest income, however, rose only 6 per cent to Rs 381.8 crore. Net interest margin (annualised) stood at 8 per cent against 8.2 per cent last year. - Business Standard

🍒 Muthoot Finance net profit rises 2.5% to Rs 931 cr in September quarter : Muthoot Finance on Tuesday reported a 2.5 per cent increase in consolidated net profit at Rs 930.80 crore for the second quarter ended September of the current fiscal year. The company had posted a net profit of Rs 908.54 crore in the same quarter of previous fiscal year. Total income grew 17.4 per cent to Rs 2,824.19 crore during July-September period of 2020-21 from Rs 2,406.39 crore in the same period of 2019-20, Muthoot Finance said in a regulatory filing. The company's consolidated loan assets under management grew 29 per cent to Rs 52,286 crore during April-September of FY21, it said.The results include financial numbers from its subsidiaries -- Muthoot Homefin (India) Ltd, Belstar Microfinance Ltd, Muthoot Insurance Brokers Pvt Ltd, Muthoot Money Ltd and Sri Lankan subsidiary Asia Asset Finance Plc (AAF). - Business Standard

🍒 Expect less than 3% of loan book under debt restructuring: PNB MD : State-owned Punjab National Bank (PNB) on Tuesday said it expects less than 3% of its loan book to be under one-time debt restructuring, lower than what the lender had earlier estimated. PNB managing director and chief executive officer SS Mallikarjuna Rao said the response to the debt restructuring scheme has been tepid. As of the now, the lender’s current estimate for restructuring is about ₹20,000 crore, half of what it had expected three months ago. “With restructuring profile, we had estimated it to be (overall amount) ₹40,000 crore. However, the response has been very low. People have started paying the money. As on today, in retail and MSME segment, the restructuring done at the end of September was ₹42 crore," Rao said in a post earnings virtual briefing. "We received application for another ₹32 crore, which we have restructured by October 31. In terms of corporate loans, we have 15 received applications amounting ₹2,022 crore. I am expecting the MSME profile restructuring to be between ₹4000-6000 crore," he said. “Overall, including corporate, the amount may not go beyond ₹20,000 crore. That is my estimate as on today." - Live Mint

🍒 Yes Bank in talks with ARCs to sell NPAs worth over Rs 32,000 crore: Report : Troubled private sector lender Yes Bank is in discussions with several asset reconstruction companies (ARCs) to sell off bad loans worth Rs 32,344 crore. It has appointed EY as an advisor for the bids, Business Standard reported. Yes Bank has already made provisions for 76 percent of its gross non-performing assets (NPAs) worth Rs 24,476 crore and is looking at the sale to “regain its place” in India’s banking sector, the report noted. Yes Bank and EY did not respond to queries, as per the report. - Moneycontrol.com

🍒 PNB lowers recast target; expects only Rs 20,000 crore loan book to be restructured : Punjab National Bank (PNB) on Tuesday lowered the debt recast target by 50 per cent to Rs 20,000 crore as there was not enough demand for restructuring approved by RBI a couple of months ago. The Reserve Bank of India (RBI) has permitted one-time restructuring of corporate and personal loans to help entities amid the COVID-19 crisis. "With respect to restructuring, surprisingly, as on today, if you look at, not many people have requested. In terms of retail and MSME together by September 30, we have undertaken restructuring to the extent of Rs 41 crore. As on today, another Rs 30 crore request has come with respect to retail and MSME. - economic times

🍒 Scam-hit PMC Bank invites EoI from potential investors for reconstruction : Scam hit Punjab and Mumbai Co-operative Bank (PMC) has invited expressions of interest from investors to take management control of the bank and run day to day operations. In a notice in its website the bank said eligible investors could be financial institutions, individuals or companies, societies, trusts or any other such entities. It has not detailed a precise financial qualification. "The investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk weighted assets ratio (CRAR) of 9%. However, the investors may explore the option of restructuring a part of deposit liabilities into capital/capital instruments. The bank may also approach DICGC for its support for payment uptoRs.5,00,000(Rupees Five lakh only) (insured deposits) to depositors," the notice said. - 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

🍒 Citigroup names Anand Selva global head of consumer banking : Citigroup Inc said on Monday, Anand Selva will become head of its global consumer bank in January, filling the spot left vacant by Jane Fraser when she becomes the first female CEO of a major Wall Street bank. Selva, who has been at the firm for nearly three decades, has helped shape the international banking giant's consumer strategy in different regions including Asia and the United States. Most recently, he was served as CEO of U.S. consumer banking since 2018. "Anand has unified our products into one client-centric business, strengthened talent and deployed a digital-first strategy that is elevating the growth trajectory of our franchise," the bank said in a joint memo signed by Fraser and outgoing CEO Mike Corbat. - economic times

🍒 Cholamandalam Financial Holdings Q2 net jumps 56 per cent : Cholamandalam Financial Holdings Ltd on Tuesday reported a 55.5 per cent jump in its consolidated net profit to Rs 505.55 crore for the second quarter of the current fiscal. The company had posted a net profit of Rs 325.15 crore in the same quarter a year ago. However, the profit was down sequentially from Rs 589.46 crore in first quarter ended June 30, 2021. Total income during the September quarter rose to Rs 3,503.15 crore from Rs 3,340.64 crore in the same period a year ago. - Business Line

🍒 October, November good months for economy: Uday Kotak : Veteran banker Uday Kotak, on Tuesday, said the performace of the economy wasmuch better in October and November than the lockdown months of April and May and that the infection trend of Covid-19 is also going down. “Overall, the economy in October and November is looking much better in India than in April and May. I do hope the way the Covid trend is playing out in India right now is also positive,” he said at the RH Patil Memorial Dialogue 2020 when asked about a possible disconnect between the global macro economic situation, markets and actual ground reality. These could have been priced in by equity markets earlier, he further said. - Business Line

🍒 RBI looking to diversify investment options for forex reserves: Report : The Reserve Bank of India is looking at diversifying its foreign exchange reserve investments amid the fall in global interest rates caused by the Covid-19 pandemic, according to two government sources aware of the development. The RBI's foreign exchange reserves stand at a record $560.63 billion. The central bank, which mostly invests in gold, sovereign debt and other risk-free deposits, has seen returns fall as monetary policy loosened globally. U.S. two-year government bonds ended at 0.16% on Nov. 2. As a result, the RBI is likely to increase its gold investments, as well buying dollars and exploring investing in AAA-rated corporate bonds for the first time, said the sources, who declined to be named due to the sensitivity of the issue. "The RBI is likely to continue to buy dollars. The problem is the dollar deployment and getting good returns," one of the officials said. - Business Standard

🍒 Ubs Principal Capital Asia sells IndusInd Bank shares worth Rs 148 cr : Ubs Principal Capital Asia Ltd on Tuesday sold shares of IndusInd Bank worth nearly Rs 148 crore through an open market transaction. On BSE, 23 lakh scrips of the private lender were sold at an average price of Rs 642.85 apiece.This translated into a total deal value of Rs 147.85 crore.The shares of IndusInd Bank were purchased by BofA Securities Europe SA at the same price, block deal data showed.According to shareholding data of the lender for the September 2020 quarter, Ubs Principal Capital Asia is a public shareholder and held 3.22 per cent stake. On BSE, shares of IndusInd Bank ended at Rs 646.75 apiece, up 3.13 per cent over the previous close. - Business Standard

🍒 HDFC’s home loan disbursements in October beat estimates : Housing Development Finance Corp. Ltd (HDFC) on Monday said its September-quarter standalone profit dropped by 27% to ₹2,870.12 crore because of one-time gains in the year-ago period. The mortgage lender reported a profit of ₹3,962 crore in the year earlier. “Profit would have been higher by as much as 27% after we remove dividend income, profit on the sale of investments (in the year earlier) and covid provisioning (made in the latest September quarter)," said Keki Mistry, vice-chairman and chief executive, HDFC. - Live Mint

🍒 RBI exploring investment options for forex reserves, sources say : The Reserve Bank of India is looking at diversifying its foreign exchange reserve investments amid the fall in global interest rates caused by the COVID-19 pandemic, according to two government sources aware of the development. The RBI's foreign exchange reserves stand at a record $560.63 billion. The central bank, which mostly invests in gold, sovereign debt and other risk-free deposits, has seen returns fall as monetary policy loosened globally. U.S. two-year government bonds ended at 0.16% on Nov. 2.As a result, the RBI is likely to increase its gold investments, as well buying dollars and exploring investing in AAA-rated corporate bonds for the first time, said the sources, who declined to be named due to the sensitivity of the issue. "The RBI is likely to continue to buy dollars. The problem is the dollar deployment and getting good returns," one of the officials said. - Live Mint

🍒 Gold prices gain for second day in a row to touch Rs 51,242 per 10 gram; silver rises by Rs 383 a kg : Gold prices gained for the second straight day by Rs 205 to hit Rs 51,242 per 10 gram in the Mumbai retail market on weakness in the US dollar and sluggish global cue. The precious metal traded firm on US election and worries over rising coronavirus cases. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,938 plus 3 percent GST, while 24-carat 10 gram was Rs 51,242 plus GST. The 18-carat gold quoted at Rs 38,432 plus GST in the retail market. Silver prices rose by Rs 383 to Rs 62,250 per kg from its closing on November 2.

🍒 Sensex rallies 504 pts; Nifty reclaims 11,800 : Equity benchmark Sensex rallied 504 points on Tuesday, tracking a strong uptick in index majors ICICI Bank, HDFC twins and SBI amid positive cues from global markets ahead of the US presidential election. The 30-share BSE index ended 503.55 points or 1.27 per cent higher at 40,261.13. Similarly, the broader NSE Nifty jumped 144.35 points or 1.24 per cent to 11,813.50. ICICI Bank was the top gainer in the Sensex pack, soaring over 6 per cent, followed by SBI, HDFC, PowerGrid, Sun Pharma, IndusInd Bank, Titan, Bajaj Auto and HDFC Bank. On the other hand, NTPC, Reliance Industries, Nestle India, HCL Tech and Infosys were among the laggards.

🍒 Rupee trims early gains to end flat at 74.41 against US dollar : The rupee on Tuesday settled almost flat at 74.41 against the US dollar after its initial gains were erased despite strong equity markets. Despite the early bounce, the home unit appeared to struggle, even as the dollar remained broadly weak. The rupee opened sharply higher at 74.34 amid heavy buying in local stock markets. The domestic currency rushed to hit the day’s high of 74.25..

*🙏🏻 Forwarded as received🙏🏻*

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.