07.12.2020: Today's Banking / Financial News

07.12.2020: Today's Banking / Financial News at a Glance

🍒 Banks need to hire experienced chief risk officers to deal with cyber attacks: Report : The banking industry needs to upgrade its IT infrastructure and appoint experienced chief risk officers to effectively deal with incidence of cybercrimes, says a report by Deloitte India. Observing that banks are the most targeted sector, the report said that nearly 22% of cybersecurity attacks which took place in India in 2018-19 were on the banking industry. "...these (cyber) attacks are becoming complex day by day. To address these challenges, banks need to appoint experienced Chief Risk Officers who can take the responsibility of skilling the employees and lead investment in military-grade cybersecurity solutions to detect the most advanced attacks," said the Deloitte report on "Digitizing the post COVID world: The '3I' approach". Banking sector, the report added, has been fast to adapt to the changing demands by accelerating efforts toward contactless business operations and speeding up digital transition to enable employees to work from home post the lockdown. - Live Mint

🍒 CBI registers case against Unitech MD in Canara bank fraud, carries out searches : Sanjay Chandra was released on interim bail from Tihar Jail on Friday after 43 months after a Delhi court gave him relief on medical grounds.The CBI has booked Managing Director of Unitech Sanjay Chandra, his father Ramesh and brother Ajay for alleged bank fraud of Rs 198 crore in Canara bank, officials said Sunday.The CBI after registering the fresh case against Chandra carried out searches at multiple locations at the premises of the accused. Sanjay Chandra was released on interim bail from Tihar Jail on Friday after 43 months after a Delhi court gave him relief on medical grounds.- Financial Express

🍒 Bank unions lend support to farmers’ agitation against agri laws : A number of bank unions have expressed their solidarity with farmers protesting against recently passed agriculture laws, and requested the government to resolve the issue at the earliest. The All India Bank Employees’ Association (AIBEA), in a statement, said the government should come forward and resolve their demands in the interest of the nation and farmers. The officer unions All India Bank Officers’ Confederation (AIBOC), All India Bank Officers’ Association (AIBOA) and Indian National Bank Officers’ Congress (INBOC) have also requested the government to initiate meaningful dialogue to resolve the impasse by referring the bills to a select committee by a special Presidential Order. - Business Line

🍒 ‘Customers get to choose preferred payment gateway for cards’ : For banks, the customer is still king when it comes to choosing their preferred payment gateway for debit and credit cards. “We always offer RuPay cards, but we leave the choice to customers when it comes to opting for the card they want,” said a senior bank executive, who did not wish to be named. Another senior banker also said typically almost all banks offer RuPay cards, but it depends on the customer to decide. “Most banks tend to have at least two partnerships, and they offer both to the customers. It is then up to them to decide,” said the banker. Industry sources also pointed out customers who tend to travel abroad frequentlyare not keen on a RuPay card as their primary card due to concerns over its network and availability. “Typically, for such customers, it can be the second preference as they want a card that has wider acceptance internationally,” noted the sources. - Business Line

🍒 DHFL administrator sends formal letters to four existing bidders inviting revised offers : The administrator at Dewan Housing Finance (DHFL) has sent formal letters to the four existing bidders of the troubled mortgage financier, seeking revised purchase offers for the fourth time. Potential buyers need to respond by December 14. Lenders to DHFL expect the Adani group and Oaktree Capital to submit new offers. The Piramal Group, one of the four that remained until round three, is yet to firm up its mind on the type of bid to be made, industry sources told ET. Lenders expect the fourth round of bids to lift the offer price by about 5-10%. Lenders are already talking to the four bidders informally to gauge their keenness on revised offers,” one of the executives cited above told ET. Some of them apparently questioned the rationale behind seeking bids for the fourth time after having sought a “final round” of bids earlier, said an executive aware of the developments. - economic times

🍒 Value of LIC’s equity holdings rallies 40% in H1 to USD 77 billion : The value of equity holdings of the nation’s financial powerhouse LIC has crossed USD 77 billion (Rs 5.7 lakh crore) by the end of the September quarter which is a shade below its record holding of USD 84 billion in the March 2018 quarter, rallying over 40 per cent in the first half, says a report. But since the second quarter, the market has rallied around 13 per cent which could have increased the value of LIC’s portfolio if not in as many percentage but considerably. According to a weekend note by Kotak Institutional Securities, in the March 2000 quarter, the value of LIC’s holdings was a pale of this at USD 4 billion when the BSE market capitalisation was only USD 102 billion and this touched USD 59 billion in March 2010 when the mcap was at USD 1.14 trillion. - Business Line

🍒 Tax dept allows revision of declarations under 'Vivad Se Vishwas' scheme : Entities filing declaration under the direct tax dispute resolution scheme 'Vivad Se Vishwas' can revise them till the time tax authorities issue certificate mentioning details of tax arrear and the amount payable, the Income Tax Department has said. Issuing a set of FAQs on 'Vivad Se Vishwas' scheme, the Central Board of Direct Taxes (CBDT) also said the scheme cannot be availed in a case where proceedings are pending before Income Tax Settlement Commission (ITSC) or where writ has been filed against the order of ITSC. The CBDT also clarified that in a case where Mutual Agreement Procedure (MAP) resolution is pending or the assessee has not accepted MAP decision, the related appeal shall be eligible under 'Vivad se Vishwas'. "In such case, the declarant will be required to withdraw both MAP application and appeal," it added. - Business Standard

🍒 PSU Banks Can Outperform As Valuation-Wise They Are Cheaper Than Private Banks: Geojit Financial : Market's trading pattern started on a strong note in December, raising the benchmarks to a fresh high, supported by good economic data like domestic GDP and Manufacturing PMI. Till date, it is an extension to the best monthly performance of November, where main indices were up by more than 10 percent each and midcaps by 15 percent. The market was largely led by influx of FII funds post the US presidential election outcome, expected arrival of vaccine and rising economic data. Markets across the globe, too, started well this month, expecting extension of November's record-breaking gains along with strengthening hopes of coronavirus vaccine. US and Europe plans to introduce inoculation soon. In this good start, it is noticed that Indian banking stocks are taking a halt. It is not participating much, in anticipation of Supreme Court hearing on moratorium, HDFC Bank & SBI system outages and the MPC meeting. - moneycontrol.

🍒 FPIs Pump In Rs 17,818 Crore In Just 4 Trading Sessions Of December : Overseas investors remained net buyers to the tune of Rs 17,818 crore in Indian markets in first four trading sessions of December amidst better than expected economic recovery around the world and positive sentiment on the back of various vaccine results. As per depositories data, foreign portfolio investors (FPI) pumped in a net sum of Rs 16,520 crore into equities and Rs 1,298 crore in the debt segment during December 1-4. This translated into a total net investment of Rs 17,818 crore during the period under review. In November, the total net investment of FPIs stood at Rs 62,951 crore. "The economies world over have continued to improve at a pace that is much better than what was expected and hence, Indian markets may continue to see this kind of an inflow," Harsh Jain, co-founder and COO at Groww said. - moneycontrol.

🍒 Approval From IRDAI On Axis Bank Stake Hike Expected By March: Max Life CEO : Max Life Insurance CEO and managing director Prashant Tripathy has said that approval from the insurance regulator on Axis Bank proposal to raise its stake in the insurer to about 19 percent should come through within next three months. Earlier in October, the Reserve Bank of India (RBI) did not approve Axis Bank's proposal to raise its stake up to 29 percent but scaled it down to an aggregate of 19.02 percent with the subsidiaries of private sector lenders. Axis Bank was to originally acquire an additional about 29 percent stake in Max Life. However, some changes had to be made to the deal following correspondence from the Insurance Regulatory and Development Authority of India (IRDAI). The bank has shown its willingness to raise its stake directly and through its subsidiary in the Max Life Insurance, Tripathy said. - moneycontrol

🍒 Six of top 10 most valued firms add cumulative Rs 91,629 cr in market capitalisation : Six of the top-10 most valued domestic firms added ₹91,629.38 crore cumulatively in market valuation last week, with ICICI Bank and Tata Consultancy Services clocking maximum gains. During the last week, which was holiday-truncated, the Sensex rallied 929.83 points or 2.10 per cent. The list of gainers had Reliance Industries Ltd (RIL), Tata Consultancy Services (TCS), Hindustan Unilever Ltd (HUL), Infosys, ICICI Bank and Bharti Airtel. On the other hand, HDFC Bank, HDFC, Kotak Mahindra Bank and Bajaj Finance saw decline in their valuation. Among the gainers, ICICI Bank saw maximum rise with an addition of ₹20,272.71 crore to take its valuation ₹3,46,497.75 crore. TCS m-cap zoomed by ₹17,579.92 crore to ₹10,22,900.07 crore, followed by Bharti Airtel which witnessed ₹16,694.01 crore jump in valuation at ₹2,69,449.98 crore. - Business Line

06.12.2020: Today's Banking / Financial News

 06.12.2020: Today's Banking / Financial News at a Glance

🍒 BBB recommends S Ramann for post of SIDBI chairman & managing director : The Banks Board Bureau (BBB), the headhunter for state-owned banks and financial institutions, on Saturday recommended S Ramann and Shivendra Tomar for the posts of CMD and MD of SIDBI and IFCI, respectively. The members of the Banks Board Bureau interviewed 20 candidates on December 4 and 5, 2020 for the vacancy of chairman and managing director (CMD) of Small Industries Development Bank of India (SIDBI), the BBB said in a statement. "Keeping in view their performance in the interview and their overall experience, the bureau recommends S Ramann for the position of chairman and managing director in SIDBI," it said. Ramann, 1991-batch Indian Audit & Accounts Service officer, is currently CEO of National E-Governance Services Limited (NeSL), India's first Information Utility. Besides, the Bureau recommended Shivendra Tomar for the post of MD and CEO of IFCI. - economic times

🍒 PNB to hold roadshow for proposed Rs 7,000 crore QIP next week : Punjab National Bank on Saturday said it will hold a roadshow for the proposed Rs 7,000 crore qualified institutional placement (QIP) issue next week. The bank will be participating again in the non-deal roadshow and meeting prospective investors on December 7-8, 2020, PNB said in a regulatory filing. The bank has taken approval for raising Rs 7,000 crore through Qualified Institutional Placement (QIP) route this fiscal. In a non-deal roadshow, nothing is for sale, a bank official said, adding it is an opportunity to discuss and develop interest in an upcoming offer. The bank has already taken approval from the board for raising Rs 14,000 crore by way of Tier II, Additional Tier 1 (AT-1) bonds and QIP (Qualified Institutional Placement), PNB Managing Director S S Mallikarjuna Rao had said last month. - Business Standard

🍒 Invest more in IT infrastructure for better reach: RBI Governor : The window to banking is now as wide as the worldwide web – so vast that protecting new-gen customers transacting online could soon tell success from failure in an industry that, for centuries, thrived on networking behind closed doors. With banking taking on an increasingly digital accent each passing day, Mint Road is now buttressing standards around grievance resolution and customer protection to ensure continued confidence in the burgeoning virtual channels that are crucial for financial inclusion. “Lakhs of internet banking customers cannot be put under distress,” Das said Friday, underscoring the need to strengthen both banking technology systems — and their supervision. “The financial sector is becoming increasingly IT-dependent and requisite investments by banks and NBFCs are necessary,” Das said. “We are constantly engaging with the entities around deficiencies…as the apex regulator of the banking and payment systems, certain action becomes unavoidable.”- economic times

🍒 RBI survey revises forecast for real GDP growth upwards for FY’21, FY’22 : The Reserve Bank of India’s (RBI) latest Survey of Professional Forecasters (SPF) has revised the forecast for real gross domestic product (GDP) growth upwards for FY21 and FY22 vis-a-vis the last round of SPF. The 67th round of SPF has projected a lower contraction of 8.5 per cent (median forecast) in real GDP in FY21 versus the 66th SPF round’s estimate of a 9.1 per cent contraction. Real GDP is expected to recover next year (FY22), when it is expected to grow by 9.5 per cent against earlier projection of 8.2 per cent, as per the Survey. The latest Survey has revised upwards the headline consumer price index (CPI) inflation projections for all the four quarters (Q3: October-December 2020 and Q4: January-March 2021; and Q1: April-June 2021 and Q2: July-September 2021) when compared with the previous survey round - Business Line

🍒 Consumer confidence takes a beating in November: RBI survey : Consumer confidence remained very low in November 2020 compared to a year ago, as reflected in the Current Situation Index (CSI), as per Reserve Bank of India’s (RBI) Consumer Confidence Survey. The weak confidence is attributable to consumer sentiments on the general economic situation, employment scenario, price levels and household incomes, according to the central bank. The November 2020 CSI reading came in at 52.3 against 85.7 in November 2019. The latest CSI reading, however, showed a marginal improvement over the all-time low of 49.9 recorded in the previous (September 2020) round. Households remain optimistic of the situation one year ahead, with the Future Expectations Index (FEI) remaining in growth terrain at 115.9, against 114.5 in the November 2019 round. - Business Line

🍒 ‘Investor response to PMC Bank resolution positive’ : Potential investors’ response to the Expression of Interest (EoI) floated by the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for investment/ equity participation for reconstructing the bank looks positive at this point of time, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. To a specific question as to why YES Bank and Lakshmi Vilas Bank could be resolved quickly but not PMC Bank, Das said the situation in PMC Bank was completely different. “The last date for submission of EoI is December 15. Let us see what is the response and after that we can take a view on this,” said the Governor. The bank, and its management, are engaged with investors who have purchased the information memorandum, he added - Business Line

🍒 In growth push, RBI continues liquidity support : The Monetary Policy Committee (MPC) on Friday left the policy repo rate unchanged at 4 per cent, for the third time on the trot. This was widely expected given the sticky retail inflation which, in the RBI’s view, is likely to remain elevated. However, to support the nascent recovery in the economy, the six-member MPC persisted with its accommodative stance and decided to continue with it for as long as necessary to revive growth on a durable basis. The MPC forecast the retail inflation to hold above its midpoint target of 4 per cent in the second half of 2020-21. Its members unanimously voted to keep the policy rate unchanged. With the outlook for inflation turning adverse relative to expectations in the last two months, the MPC projected CPI (consumer price index) inflation at 6.8 per cent for Q3 FY 21 and 5.8 per cent for Q4 FY21. The CPI inflation for the first half of FY22 has been forecast at 4.6-5.2 per cent, with risks broadly balanced. - Business Line

🍒 KVG Bank launches OD facility for farmers : The Dharwad-headquartered regional rural bank, Karnataka Vikas Grameen Bank (KVGB), has launched an overdraft (OD) facility for farmers. Speaking at the launch of the ‘Kirishi OD’ scheme designed for farmers, P Gopi Krishna, Chairman of the bank, said that the farmers are provided with an OD facility based on the value of the land. The limit is capped to a maximum of ₹1.5 lakh per acre to irrigated lands and ₹1 lakh per acre to dry land. The facility can be used for working capital requirements such as maintenance of machinery and equipment, repair and replacement of machinery, agricultural allied activities and even for the repayment of private loans availed for personal use. He said the uncontrolled weather, escalating natural disasters, and the current Covid situation have made farmers vulnerable. “To ease the situation, KVGB has designed a special OD facility for the farmers to help them to cope with the situation,” he added. - Business Line

🍒 Satin Creditcare Network to expand in South India : Microfinance company Satin Creditcare Network Ltd plans to strengthen its presence in the South with the opening of a few more branches, said the company’s Chief Operating Officer K Thangaraju. As part of its expansion plan, the company opened four branches at Perundurai, Udumalpet, Kinnathukadavu and Dharapuram in this region about 10 days back, and a regional office in Coimbatore on Friday. With 84 branches in the South (of which 53 and 31 are in the states of Tamil Nadu and Karnataka respectively), the company is looking to further strengthen its network in the South. Thangaraju said that the company has extended loans amounting to ₹360 crore to women self-help groups (SHGs) over the last two years. - Business Line

🍒 Gold Prices Decline To Rs 49,209 Per 10 Gram, Gains 2.66% For The Week : Gold prices edged lower to settle at Rs 49,209 per 10 gram on December 4 as participants trimmed their long position as seen by the open interest. The precious metal after hitting a low of Rs 47,792 on Monday ended the week with a gain of 2.66 percent for the week. In the retail market, the bullion metal settled at Rs 49,316 per gram on Friday up nearly 1 percent for the week on hopes of additional US stimulus and weakness in the dollar. The gold/silver ratio currently stands at 78.19 to 1, which means the amount of silver required to buy one ounce of gold. The retail silver prices eased Rs 54 to Rs 63,064 per kg from its closing on December 3.

🍒 Sensex, Nifty Create History: Over 60 Stocks In bse500 Index Rise 10-50% In A Week : Indian market created history as bulls pushed benchmark indices beyond crucial psychological levels in the holiday-shortened week. The S&P BSE Sensex surpassed Mount 45K while Nifty50 managed to hold 13,100-13,200 levels. The S&P BSE Sensex rose 2.1 percent while the Nifty50 climbed 2.2 percent for the week ended December 4 while the action was more prominent in the broader market space.The S&P BSE Mid-cap index rose 2.8 percent while the S&P BSE Smallcap index closed with gains of 2.6 percent for the week ended December 4. There are as many as 65 stocks in the BSE500 index that rose 10-50% in just 4 sessions that include names like KNR Construction, Tata Power, Maruti Suzuki, Sun Pharma, Adani Enterprises, Hindalco, Oberoi Realty, SAIL, SpiceJet, Tata Chemicals, and Adani Power, etc. among others. - moneycontrol..

05.12.2020: Today's Banking / Financial News

05.12.2020: Today's Banking / Financial News at a Glance

🍒 MPC maintains status quo on rates : Amidst rising inflation, the Reserve Bank of India’s Monetary Policy Committee decided to maintain the status quo on key rates. “The MPC voted unanimously to leave the policy rate unchanged at 4 per cent,” said RBI Governor Shaktikanta Das on Friday, adding that it will continue its accommodative stance. The decision was taken at the bi-monthly meeting of the MPC chaired by RBI Governor Shaktikanta Das. It met between December 2-4. The policy repo rate continues to be at four per cent. The MPC had in its last meeting in October also left rates unchanged. - Business Line

🍒 RBI to extend TLTRO to 26 sectors : The Reserve Bank of India (RBI) has decided to bring the 26 stressed sectors – identified by the Kamath Committee – within the ambit of sectors eligible under on-tap Targeted Long-Term Repo Operations (TLTRO). Further, the central bank encouraged banks to synergise on-tap TLTRO scheme and Emergency Credit Line Guarantee Scheme 2.0 (ECLGS 2.0) by availing funds from the RBI under the former and seek guarantee under the latter to provide credit support to stressed sectors. - Business Line

🍒 Bank credit grows by 5.82 percent, deposits by 10.89 percent : Bank credit grew at 5.82 % to Rs 104.34 lakh crore, while deposits rose by 10.89 % to Rs 143.71 lakh crore in the fortnight ended November 20, the RBI data showed. In the fortnight ended November 22, 2019, bank credit stood at Rs 98.60 lakh crore and deposits at Rs 129.58 lakh crore. In the previous fortnight ended November 6, advances grew by 5.67 % and deposits by 10.63 %. In October, non-food credit growth decelerated to 5.6 % compared to a growth of 8.3 % in the same month of the previous year. Growth in loans to agriculture and allied activities accelerated to 7.4 % in the month from a growth of 7.1 % last year. Credit to industry contracted by 1.7 % in October 2020 as compared with 3.4 % growth in October 2019. - economic times

🍒 ED seizes absconding business tycoon Vijay Mallya’s French asset worth Rs 14 crore : Businessman Vijay Mallya’s property worth Rs 14 crore located in France has been seized under the anti-money laundering law, the Enforcement Directorate said on Friday. It said the action was undertaken by French authorities “on the request of the Enforcement Directorate” and the property bears the address: 32 Avenue FOCH in France. The value of the seized asset is Euro 1.6 million that is worth about Rs 14 crore, the central probe agency said in a statement. Investigations conducted under the Prevention of Money Laundering Act revealed that “a large amount was remitted abroad from the bank account of Kingfisher Airlines Ltd (KAL)” for creation of the asset, it said. - financial express

🍒 RBI elevates rural banks while booting risk framework : The central bank Friday sought to both broaden and deepen the size and scope of its financial systems by offering enhanced roles and frameworks to two extreme ends of the complexity spectrum - regional rural banks and credit default swaps (CDS). The market had already factored in an enhanced role for mutual funds and insurance companies in managing surplus liquidity generated by the central bank purchases of bonds and foreign currency. But Mint Road did one better: It allowed in a new participant, the regional rural banks. These were so far not permitted to access the liquidity windows of the Reserve Bank and the call/notice money market. To facilitate more efficient liquidity management by the rural-focused lenders at competitive rates, the central bank said it will also extend the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF) to these lenders. They will also be permitted to participate in the call/notice money market, both as borrowers and lenders. Detailed instructions will be issued shortly. - economic times

🍒 Reserve Bank to consider new framework for its numerous banking proxies : India’s central bank Friday proposed a scale-based regulatory framework for shadow lenders, underscoring their increasing importance in driving financial inclusion, as banking gets increasingly interconnected with the last-mile financiers that are helping millions step on to the consumption ladder. "There are rapid developments in the last few years, which have led to significant increase in size and interconnectedness of the NBFC sector. There is, therefore, a need to review the regulatory framework in line with the changing risk profile of NBFCs,” the central bank said in its statement on developmental and regulatory policies that accompanied Friday’s monetary policy review. A discussion paper on the framework, which will use NBFC size as the primary filter, will be out by January 15 for comments. “It is felt that a scale-based regulatory approach linked to the systemic risk contribution of NBFCs could be the way forward,” the central bank said. “It has been decided to carry out consultation with stakeholders before finalising the revised regulatory framework." Governor Shaktikanta Das also focused on the need for this sector to be robust.- economic times

🍒 RBI yet to take call on working group's suggestion of corporates running banks : The Reserve Bank of India governor Shaktikanta Das on Friday categorically stated that the view of the internal working group (IWG) on private bank ownership should not be seen as the regulator’s view. It emphasised that the RBI is yet to take a call on the suggestions made by the IWG. “It is a report by an internal working group (IWG) of RBI, it should not be seen as RBI’s point of view or decision,” Das said. “The IWG had two external members, who are also members of the RBI central board and they have had their independent deliberations.” Das stressed that RBI will have a consultative stance and will consider stakeholder comments before arriving at any decision. - economic times

🍒 Governor Shaktikanta Das wants banks to improve corporate governance and risk standards : The Reserve Bank of India governor Shaktikanta Das on Friday stressed on the need for banks and other financial institutions to improve their corporate governance and risk standards. In light of the recent system outages at HDFC Bank and State Bank of India the governor also said that all financial institutions should invest more in upgrading their IT infrastructure. “If you want to remain competitive in the coming years, tech is the key, robustness of your IT system is the key,” Das said. “Banks, NBFCs and other financial entities need to invest more in tech and strengthen all their systems so that public confidence is maintained. Going forward the entire financial landscape will be IT-dependent.” - economic times

🍒 RBI asks banks to retain profit, not make any dividend payment for FY20 : In view of the economic shock caused by the COVID-19 pandemic, Reserve Bank of India (RBI) on Friday asked scheduled commercial banks and co-operative banks not to make any dividends for the financial year ended March 2020. In view of the ongoing stress and the heightened uncertainty on account of the pandemic, RBI said it is imperative that banks continue to conserve capital to support the economy and absorb losses, if any. The decision is based on review of the September quarter financial performance of banks. In response to the pandemic, RBI has focused on resolution of stress among borrowers, and facilitating credit flow to the economy, while ensuring financial stability, RBI Governor Shaktikanta Das said. "In continuation of this effort and to help banks conserve capital, while creating room for fresh lending, it has been decided after a review that commercial and co-operative banks will retain the profits and not make any dividend pay-out from the profits pertaining to financial year 2019-20," he said. Guidelines on the above measure will be issued shortly. - economic times

🍒 RBI to come out with digital payment security control directions: Shaktikanta Das : RBI Governor Shaktikanta Das on Friday said the central bank will be introducing digital payment security control directions for regulated entities. Such a move will improve the security of digital payment channels and also convenience for users, Das said in a statement released after the bi-monthly review of the monetary policy in which RBI opted for a status quo in rates. “These directions will contain requirements for robust governance, implementation and monitoring of certain minimum standards on common security controls for channels like internet and mobile banking, card payments, etc,” Das said. - economic times

🍒 RTGS to be made available 24X7 in next few days: RBI Governor : In a business friendly move, the Reserve Bank of India on Friday said that the Real Time Gross Settlement (RTGS) system, used for large value transactions, will be made available round-the-clock in the next few days. In December 2019, the National Electronic Funds Transfer (NEFT) system was made available on a 24x7x365 basis. Currently, RTGS is available for customers from 7.00 am to 6.00 pm on all working days of a week, except second and fourth Saturdays of every month. RBI Governor Shaktikanta Das said RTGS system will soon be made available 24x7 in the next few days... with this enablement, it is proposed to reduce settlement and default risk in the system by facilitating settlement of AePS, IMPS, NETC, NFS, RuPay, UPI transactions on all days of the week instead of five days earlier." - economic times

🍒 DBS Bank India gets Rs 2,500 cr capital support from parent for LVB merger : DBS Bank India Limited (DBIL) on Friday said it has received capital infusion of Rs 2,500 crore from DBS Bank Limited, Singapore to support its amalgamation with Lakshmi Vilas Bank (LVB). The scheme of amalgamation came into effect on November 27, 2020. DBIL said it is well-capitalised, and its capital adequacy ratios (CAR) remains above regulatory requirements after the amalgamation. "The amalgamation provides stability and better prospects to LVB's depositors, customers and employees following a period of uncertainty," it said in a release. - economic times

🍒 Hike in contactless transaction limit to further digital drive: Industry : The RBI allowing a higher contactless transaction limit of Rs 5,000 against Rs 2,000 currently will drive digital payments further in the country and shows the central bank's commitment to promote a less-cash economy, industry players said on Friday. The Reserve Bank at its bi-monthly monetary policy proposed to enhance the contactless card transaction limit from Rs 2,000 to Rs 5,000 from January 1 in order to further the adoption of digital payments in a safe and secure manner. "This is a welcome step by the RBI to increase transactions and e-mandate limit. The increased limit will also help to boost the average value of transaction and push the adoption of digital payments. This step re-affirms the commitment of the country to become a less-cash economy," said Dilip Asbe - MD & CEO, National Payments Corporation of India (NPCI).- economic times

🍒 RBI revises FY21 GDP growth upwards to -7.5% from -9.5% : The Reserve Bank of India (RBI) expects second half (H2) growth to turn positive as economic recovery has been faster than anticipated. It has revised the FY2021 GDP growth estimate to -7.5 per cent against -9.5 per cent projected earlier. The central bank has projected third quarter (Q3) growth at 0.1 per cent (-5.6 per cent projected earlier) and fourth quarter (Q4) growth at 0.7 per cent (0.5 per cent). In an indication that inflation will continue to remain sticky, the central bank has revised CPI inflation band for H2 to 5.2-4.6 per cent from 5.4-4.5 per cent earlier. - Business Line

🍒 Realtors hail RBI decision to hold rates : The Reserve Bank of India’s (RBI) decision to maintain the policy rate is in line with the real estate sector’s expectations as the sector is just recovering and is yet to bounce back to pre-Covid-19 levels, said Ramesh Nair, CEO & Country Head, JLL. “Residential real estate witnessed initial signs of recovery with sales increasing by 34 per cent in Q3 2020 over Q2 2020. Today’s RBI’s decision to hold the rate will help homebuyers to avail themselves of the benefit of the prevailing lowest mortgage rates. Green shoots of recovery, armed with other incentives such as stamp duty reduction in some States and the flexibility of developers in offering best prices/payment schemes will help in further improving home sales,” he added. - Business Line

🍒 RBI Governor on HDFC Bank action: Public confidence in digital banking has to be maintained : Reserve Bank of India Governor Shaktikanta Das on Friday said the need to maintain people’s confidence in digital banking led to the recent action against HDFC Bank. The RBI team is also studying the outage at State Bank of India, he further said. “In the case of HDFC Bank, there were earlier episodes also. HDFC Bank has an overwhelming presence in the digital payment segment, in the internet banking segment. We have some concerns about certain deficiencies. It is necessary that HDFC Bank strengthens its IT systems before expanding further,” Das told reporters. “We can not have thousands and lakhs of customers who are using digital banking to be in any kind of difficulty for hours together and especially when we are ourselves giving so much emphasis on digital banking. Public confidence on digital banking has to be maintained,” Das further explained. - Business Line

🍒 ‘Investor response to PMC Bank resolution positive’ : Potential investors’ response to the Expression of Interest (EoI) floated by the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for investment/ equity participation for reconstructing the bank looks positive at this point of time, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. To a specific question as to why YES Bank and Lakshmi Vilas Bank could be resolved quickly but not PMC Bank, Das said the situation in PMC Bank was completely different. “The last date for submission of EoI is December 15. Let us see what is the response and after that we can take a view on this,” said the Governor. - Business Line

🍒 ADB approves $190 million loan to upgrade power distribution in Bengaluru : The Asian Development Bank (ADB) has approved a combined sovereign and non-sovereign loan of $190 million to modernise and upgrade the power distribution system in Bengaluru. Though ADB has supported several power distribution projects in India since 2010, this combination of sovereign and non-sovereign loans is being deployed on a pilot basis for the first time. “The ADB assistance for the Bengaluru Smart Energy Efficient Power Distribution Project includes $100 million sovereign loans and $90 million without sovereign guarantee loan to Bangalore Electricity Supply Company Limited (BESCOM), one of five state-owned distribution utilities and the largest in the State,” an ADB statement said. - Business Line

🍒 Nifty, Sensex up ahead of monetary policy decision : Indian shares edged up on Friday, ahead of a central bank decision that would potentially leave interest rates unchanged in the face of stubbornly high inflation and a slowing economic contraction. All 53 analysts and economists in a Reuters poll conducted in November said they do not expect any change in rates at the three-day policy meeting ending Friday, with the next rate cut now seen in the April-June quarter. The NSE Nifty 50 index rose 0.31 per cent to 13,174.65 as of 0345 GMT, while the S&P BSE Sensex was up 0.29 per cent at 44,763.11. - Business Line

🍒 Sensex hits 45,000 on massive FPI buying : The BSE Sensex, a key barometer of India’s stock markets, scaled the 45,000 mark on Friday. The exuberance it has witnessed in recent days comes on the back of massive buying of stocks by foreign portfolio investors (FPI). Covid-related nervousness has been discounted by the street in India as well in the global stock markets. On Friday, more than 400 stocks hit the upper circuit as investors rushed to buy even small and mid-cap counters The Sensex closed at 45,079 points after gaining 446 points, or 1 per cent. The broader index Nifty gained 0.95 per cent, or 124 points, to reach 13,258. The RBI move to keep key rates unchanged was also cheered by the market. PSU stocks including GAIL, HPCL and BPCL have witnessed a strong rally in the past couple of trading sessions. - Business Line

🍒 Rupee settles 13 paise higher at 73.80 against US dollar : The rupee snapped its two-day losing streak to close 13 paise higher at 73.80 (provisional) against the US dollar on Friday as the Reserve Bank of India maintained status quo on the benchmark interest rate for the third time in a row. At the interbank forex market, the domestic unit opened at 73.81 and saw an intra-day high of 73.70 and a low of 73.81.

🍒 Forex reserves down $469 mn to $574.82 bn : After touching a lifetime high in previous week, the country’s foreign exchange reserves declined $469 million to $574.821 billion in the week ended November 27, RBI data showed. In the previous week ended November 20, the reserves had increased by $2.518 billion to touch a record high of $575.29 billion. In the reporting week, the reserves declined despite an increase in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $352 million to $533.455 billion, according to the weekly data by the Reserve Bank of India (RBI).

🍒 Gold Prices Slide Rs 116 To Rs 49,316 Per 10 Gram, Silver Declines : Gold prices declined by Rs 116 to Rs 49,316 per 10 gram in the Mumbai retail market on rupee appreciation and subdued global trend. The precious metal prices traded flat to positive during the day around $1,840 in overseas market tracking weakness in the US dollar. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,173 plus 3 percent GST, while 24-carat 10 gram was Rs 49,316 plus GST. The 18-carat gold quoted at Rs 36,987 plus GST in the retail market. Silver prices eased Rs 54 to Rs 63,064 per kg from its closing on December 3..

04.12.2020: Today's Banking / Financial News

04.12.2020: Today's Banking / Financial News at a Glance

🍒 Bank lending, deposit rates have bottomed out: SBI chief Dinesh Khara : Bank lending rates “have actually bottomed”, and will remain at these levels for a while till the economy recovers, Dinesh Kumar Khara, chairman of the country’s largest lender, State Bank of India (SBI), told Business Standard in an exclusive interview on Wednesday. Khara said SBI and other banks in the country were aware that the economy required softer rates to continue. “We are very mindful of supporting growth at this point of time.” On Friday, the Reserve Bank of India (RBI) is expected to maintain the "status quo" as far as its policy rate and stance are concerned, said Khara, who took over from Rajnish Kumar as SBI chairman in early October. Unlike Kumar though, Khara is in no hurry to list YONO, SBI’s digital banking application. Rather, he said the bank would evaluate various options for the app, which Kumar once had estimated could be valued at $40-50 billion. - Business Standard

🍒 Canara Bank raises fixed deposit rates by 0.2 per cent : State-owned Canara Bank has raised its rates by 0.2 per cent for fixed deposits having a maturity period of at least two years. With the increase, fixed deposits with tenure of two years but less than three years will now fetch 5.4 per cent from a rate of 5.2 per cent earlier, the bank said in a statement on Thursday. For fixed deposits with tenure of 3-10 years, the interest rate has been increased to 5.5 per cent from 5.3 per cent. Senior citizens are offered 0.50 per cent extra on the revised rates, the statement said. The new rates are effective from November 27. With the latest revision in rates, Canara Bank is offering the highest interest rate for fixed deposits having tenure of 2-10 years among all the other public sector banks, as per the statement. Canara Bank’s rate hike comes just a day before the Reserve Bank of India’s bi-monthly monetary policy announcement. The central bank is expected to keep benchmark policy rate unchanged at 4 per cent. - financial express

🍒 Union Bank of India plans to raise up to ₹6,800 crore : Union Bank of India (UBI), on Thursday, said plans to raise equity capital of up to ₹6,800 crore, including premium, if any, in FY21. As per the public sector bank’s regulatory filing, the capital-raise will be via various modes such as Follow-on Public Offer, Rights Issue, Private Placement, including Qualified Institutions Placement, and/or Preferential Allotment to the Government of lndia and/or other institutions. The bank said an Extraordinary General Meeting will be held on December 30to obtain shareholders’ approval for raising of equity capital. As at September-end 2020, the government owned 89.07 per cent stake in the bank. - Business Line

🍒 IDBI Bank puts home loan, LAP, corporate NPAs worth around Rs 970 cr on sale : IDBI Bank has put non-performing assets (NPAs) worth around Rs 970 crore on sale last month, according to notifications issued by the bank. The assets on the block include the lender’s exposure to KSK Mahanadi Power Company, two smaller corporate loans and 17 smaller loan accounts from the housing loan and loan against property (LAP) segments. The gross principal outstanding in the housing and LAP loan accounts is Rs 47.78 crore and they are being offered at a reserve price of Rs 27 crore on an all-cash basis to asset reconstruction companies (ARCs) and other financial entities. Loans to two Bhubaneswar-based companies — Raipur Power & Steel and Parth Concast — are being offered at a total reserve price of Rs 77.57 crore together. - financial express

🍒 ICICI Bank, Indian Bank at risk of becoming 'fallen angels', warns S&P : Many potential “fallen angel” banks — including ICICI Bank and public sector lender Indian Bank — face risks from a more severe economic downturn due to the Covid-19 pandemic, Standard and Poor’s (S&P) has warned. S&P terms an entity a “fallen angel” if its rating is lowered to speculative-grade (a long-term rating of ‘BB+’ or lower) from investment-grade (a long-term rating of 'BBB-' or higher). Potential “fallen angels” are issuers rated ‘BBB-’ with negative outlook or on CreditWatch negative. There have been three fallen angels in Asia-Pacific since the Covid-19 outbreak — Axis Bank, Bajaj Finance, and Hero FinCorp — S&P said in a statement. - Business Standard

🍒 RBI pulls up HDFC over outages, tells bank to halt all digital launches, new credit cards : Private lender HDFC Bank on Thursday said the Reserve Bank of India has advised the bank to temporarily stop all digital launches and sourcing new credit card customers. This after the bank suffered its third big outage in the span of just two years. The RBI order also states that the lender’s board needs to examine these lapses and fix accountability. “The RBI has advised to stop all launches of the Digital Business generating activities planned under its program - Digital 2.0 (to be launched) and other proposed business generating IT applications and (sourcing of new credit card customers,” the bank said in an exchange filing. “The above measures shall be considered for lifting upon satisfactory compliance with the major critical observations as identified by the RBI.” - economic times

🍒 RBI ban on HDFC Bank could stay for 3-6 months: Macquarie Capital : The Reserve Bank of India move to temporarily halt all digital launches and sourcing new credit card customers for HDFC Bank could stay for three to six months according to a note by Macquarie Capital. The bank could apply to the RBI for a review of its decision only after fixing the technology and scale issues, the brokerage house noted. “We believe the ban could be in place for around 3-6months as the bank would at least take a quarter to resolve some of these issues and then invite RBI for a review post which RBI may relax the restrictions in our view,” said Suresh Ganapathy, associate director, Macquarie Capital. While this is the first big challenge for newly minted chief executive Sasidhar Jagdishan, Ganapathy argued that one should not give much weight to the fact that the outage issue happened after Puri’s exit. “We won’t read this as an issue specific to the new CEO,” he said. “Technology outages were also happening under the earlier CEO Mr. Puri. As argued earlier, the biggest challenge for the bank under the new CEO Sashi Jagdishan is to build scale when they already have a 10% market share.” - economic times

🍒 After RBI action on outages, HDFC Bank CEO steps in to allay customer fears : HDFC Bank CEO Sashidhar Jagdishan on Thursday assured existing clients of the bank and said that they could continue to transact with the bank without any concern. Jagdishan also said that the bank with comply with the regulator’s diktat. RBI on Thursday asked HDFC Bank to temporarily halt new digital offerings and stop sourcing credit card customers. “Many of you may have read or heard about the RBI order asking us to temporarily stop any new digital banking launches and sourcing of new credit card customers. We will comply with the regulator's requirements,” Jagdishan said in a note to customers. “We take this opportunity to assure our existing customers that there is no reason to worry. You can continue to transact with the Bank without any concern.” - economic times

🍒 Bank of India to acquire 49% stake each in BOI AXA Investment Managers, BOI AXA Trustee Services : Bank of India (BoI) on Thursday said it will purchase 49 per cent stake each in BOI AXA Investment Managers Pvt Ltd (BAIM) and BOI AXA Trustee Services Pvt Ltd (BATS) from AXA investment Managers Asia Holdings Pvt Ltd (AXA IM). Pursuant to this transaction, BoI shall hold 100 per cent equity shares in BAIM and BATS. Currently, BOI AXA Mutual Fund is a joint venture between BoI (51 per cent stake) and AXA IM (49 per cent). BoI had acquired a 51 per cent stake in the then Bharti AXA Investment Managers Pvt Ltd on May 7, 2012. The bank said the acquisition is expected to be completed by end of December or such other extended date mutually agreed between BoI and AXA 1M. - Business Line

🍒 ICICI Bank opens representative office in Nepal : ICICI Bank, on Tuesday, has inaugurated its representative office Kathmandu, marking the foray of an Indian private sector bank in Nepal. The representative office at the business district of Thapathali will closely work with domestic banks in Nepal to facilitate investment, trade, payments and treasury business between the two countries. “With this foray, ICICI Bank has expanded its global footprint to 15 countries, including India,” said ICICI Bank in a statement. The bank has appointed Ranjan Kumar Thapa as the Chief Representative for its Nepal operations. - Business Line

🍒 Increasing private participation in banking will reduce fiscal bill: ICRA : Rating firm ICRA on Thursday said that the Reserve Bank of India’s internal working group (IWG) suggestions to increase participation in the banking sector will augur well for private players, reduce over reliance on public sector banks and cut the government’s fiscal bill. “Increasing private participation in the banking sector is a pressing need given the fact that continuing dependence only on public sector banks can escalate the fiscal bill. Also relying on PSBs for credit expansion could entail significant capital infusion in public banks by Government of India, which itself is constrained for resources,” said Anil Gupta, Vice President, ICRA. - economic times

🍒 Sarvatra on-boards 50 co-operative banks on UPI platform : Sarvatra Technologies, a banking technology provider announced that it has on-boarded 50 urban co-operative banks live on its Unified Payments Interface (UPI) platform, thereby making them interoperable with all the large banks across the country. The landmark milestone reflects more than 170 per cent annual growth in the number of co-operative banks on the company’s UPI platform. - Business Line

🍒 ‘74% borrowers willing to up their financial literacy quotient’ : India has miles to go on the financial literacy front, going by the latest findings of a Home Credit India survey. As many as 68 per cent of survey respondents did not know their CIBIL score, the survey revealed. All the more disappointing is that 76 per cent of borrowers do not know their interest amount on their loans. However, the good news is that 74 per cent of respondents are willing to take financial literacy lessons to manage their finances better. Home Credit India, a local arm of the international consumer finance provider with operations in Europe and Asia, conducted this research across 7 cities to understand the levels of financial literacy among borrowers. Close to 1,000 respondents were interviewed in the survey. - Business Line

🍒 Flipkart announces partial spin-off of PhonePe : Flipkart, India’s homegrown e-commerce marketplace, on Thursday announced a partial spin-off of its 100 per cent subsidiary PhonePe, India’s largest digital payments platform. While Flipkart will continue to remain PhonePe’s majority shareholder with 87 per cent stake, 10 per cent will be held by Walmart and 3 per cent by Flipkart’s existing investors including Tiger Global. The move will help PhonePe access dedicated, long-term capital to fund its growth ambitions. - Business Line

🍒 LVB shareholders believe merger with DBS negates bank’s inherent strengths : The legal tug-of-war between the shareholders of Lakshmi Vilas Bank (LVB) and the Reserve Bank of India (RBI) regarding valuation of their shares, which have been marked down to zero following the amalgamation of the financially-stressed bank with DBS India Ltd (DBIL), is unlikely to end soon. Each party to the case, currently on in the Bombay and Madras High Courts, expects the other to seek relief in the Supreme Court should they lose the case in the High Court. - Business Line

🍒 Religare files petition in Delhi HC to substitute DBS Bank with LVB : Religare Finvest has filed a petition with the Delhi High Court to make DBS Bank India a respondent in its pending case against Lakshmi Vilas Bank. The move comes after the merger of LVB with DBS Bank India with effect from November 27. The Bench, headed by Justice Rajiv Shakdher, in an order on December 1, has given DBS Bank India five weeks to respond. It has listed the matter for hearing on February 25. Religare Finvest had filed a case against LVB for misappropriating ₹750 crore of fixed deposits with inappropriate authorisation. The amount has now risen to ₹900 crore with interest. “The present application is being filed under Order XXII Rule 10 of the Code of Civil Procedure, 1908 for substitution of the defendant, Lakshmi Vilas Bank (LVB) with DBS Bank India Limited (DBS),” said Religare in its petition. - Business Line

🍒 Shriram City Union Fin clocks its highest two-wheeler loan disbursals at ₹1,000 cr in Nov : Shriram City Union Finance on Thursday said it has clocked its highest ever two-wheeler loan disbursals at over ₹1,000 crore in November on the back of festive demand. The company financed over 1.66 lakh two-wheeler loans in November 2020, it said in a release. This represents disbursements of slightly over ₹1,000 crore. This is a new high for the lender, Shriram City Union Finance said. - Business Line

🍒 NCLT gives nod to Reliance Infratel resolution plan : The dedicated insolvency court has given its nod to Reliance Infratel’s (RITL) resolution plan, thereby paving way for Reliance Jio Infocomm (Jio) to pick up the tower and fibre assets of this bankrupt company. Under the plan approved by National Company Law Tribunal (NCLT), lenders may recover under Rs 4000 crore through the resolution plan of Reliance Infratel,. This 100% subsidiary of Reliance Communications (RCom) holds 43,000 towers and and 1,72,000 km of fibre, a person familiar with the matter said. "However, the NCLT Resolution plan distribution is subject to disposal of Doha Bank Intervention Application," the person added. - economc times

🍒 Fitch affirms Issuer Default Rating on four PSBs including SBI : Fitch Ratings today affirmed ratings on four public sector banks–-State Bank of India, Bank of Baroda, Punjab National Bank and Bank of India. It affirmed Issuer Default Ratings (IDRs) at 'BBB-' for the lenders.The rating agency has maintained negative outlook on ratings. It mirrors the Outlook on India's sovereign rating of 'BBB-', which was revised to Negative from Stable on June 18, 2020. The revision factored in the impact of the escalating coronavirus pandemic on India's economy. The agency has also upgraded private lender IDBI Bank’s Viability Rating (VR) by one-notch from “ccc” to “ccc+”. The upgrade in VR is due mainly to the improved core capitalisation and the high loan-loss coverage. This provide some resilience to the capital buffers against potential asset-quality stress. It also factors in the possibility for more fresh capital in the current financial year (FY21). If successfully raised, it can provide a significant philip to the capital buffers, it said. - Business Standard

🍒 Govt's move to pare stake in Axis Bank fuels hope of divestment by stealth : The Centre’s move to pare its holding in Axis Bank--held under the Specified Undertaking of The Unit Trust of India’s (Suuti)--has stoked hopes of disinvestment by stealth. Last week, the government sold shares worth Rs 220 crore in Axis Bank in the open market. The transaction, carried out without a formal announcement, came to light only this week. Market players said the government should pursue the same strategy for selling shares in listed PSUs. A prior announcement often leads to bear hammering of the stock causing harm to the government as well as other shareholders, they add. The government usually offloads stake in listed firms using the offer for sale (OFS) route. Under this, the seller has to announce the details of the transaction at least a day in advance. Often the secondary market price tends to converge with the floor price set by the seller in case of a PSU. This impacts demand for the share sale. Experts said instead of an OFS, the government can use the open market route, wherever possible.- Business Standard

🍒 Former US Ambassador to India Richard Verma joins Mastercard as executive vice-president : Former US Ambassador to India Richard Verma has joined leading financial services company Mastercard as its executive vice-president for global public policy and regulatory affairs. In this capacity, Verma will oversee the company's public policy, regulatory affairs and litigation teams around the world, Mastercard said in a statement. - moneycontrol.

🍒 Sensex ends marginally higher; Nifty hits record peak ; After scaling an all-time intra-day peak of 44,953.01, the 30-share BSE Sensex pared some gains to end 14.61 points or 0.03 per cent higher at 44,632.65. Similarly, the broader NSE Nifty touched a fresh intra-day high of 13,216.60, before settling 20.15 points or 0.15 per cent up at 13,133.90 -- its lifetime closing high. Maruti was the top gainer in the Sensex pack, rallying around 7 per cent, followed by ONGC, Asian Paints, NTPC, SBI, Bajaj Finserv and Tata Steel. On the other hand, HDFC Bank, TCS, Bajaj Auto, Infosys and M&M were among the laggards.

🍒 Bank Of India shares rise 4% on acquiring controlling stake in subsidiaries : Bank Of India share price rose 4 percent intraday on December 3 after the bank said it is going to acquire the remaining 49 percent stake in its two subsidiaries. Bank of India has entered into a share purchase agreement (SPA) with AXA investment Managers Asia Holdings Private Limited (AXA IM) whereby Bank of India has agreed to purchase AXA IM's entire 49% equity shares in BOI AXA Investment Managers Private Limited (BAIM); and entire 49% equity shares in BOI AXA Trustee Services Private Limited (BATS). Bank of India is holding 51% equity shares in BAIM and BATS. 

🍒 Rupee loss widens by 12 paise to 73.93 against USD : The rupee weakened by another 12 paise to end at 73.93 against the US dollar on Thursday as investors remained cautious ahead of the RBI policy meet outcome. Analysts said investor focus is on the Reserve Bank of India’s Monetary Policy Committee’s three-day interest rate-setting meeting that started on Wednesday, with the decision due on Friday.

🍒 Gold prices up Rs 262 to Rs 49,432 per 10 gram on weak rupee, silver falls : Gold prices jumped Rs 262 to Rs 49,432 per 10 gram in the Mumbai retail market on rupee depreciation and positive global trend. The precious metal price was supported by a weaker dollar and fall in US treasuries. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,280 plus 3 percent GST, while 24-carat 10 gram was Rs 49,432 plus GST. The 18-carat gold quoted at Rs 37,074 plus GST in the retail market. Silver prices fell marginally by Rs 88 to Rs 63,118 per kg from its closing on December 2..

03.12.2020: Today's Banking / Financial News

03.12.2020: Today's Banking / Financial News at a Glance

🍒 PNB says completed technology integration with Oriental Bank of Commerce : State-run Punjab National Bank (PNB) has completed IT integration of all branches of erstwhile Oriental Bank of Commerce (OBC) with itself, the bank said in a release on December 2. All customers of erstwhile OBC Bank are now migrated to CBS of PNB wherein they can transact seamlessly via existing branches and digital banking channels like internet banking and mobile banking, the bank said.The ATM Switch and terminals also rowed smoothly into the PNB network. The entire migration has been completed without effecting any change in their account numbers, debit cards or net banking credentials, the bank said.With this, the OBC customers can now enjoy services at a wider network of branches without any hassle owing to harmonized products and services at PNB network. The amalgamation of PNB, United Bank of India and OBC has come into effect from April 1, this year. The merger created the second-largest nationalized bank in terms of business and total branches. Six Indian public sector banks (PSBs), some of which have been in existence for over a century, ceased to exist on April 1 after their amalgamation with bigger PSBs. - moneycontrol

🍒 Punjab National Bank introduces loan management solution to speed up delivery : To speed up and maintain accuracy in online loan processing and sanctioning of credit proposals, Punjab National Bank introduced 'LenS' which is a tech-based loan management solution. PNB said in a statement, "After the merger, it was paramount to have a stringent loan management solution, which can be used for activities related to lead capturing, loan appraisal, sanction, and documentation".The bank also added, "PNB started development/customisation of an IT-based solution PNB LenS- The Lending Solution for loan management. It facilitates field functionaries in uniform and consistent appraisal methodology to improve due diligence standards".To standardise the system, process and appraisal formats for loan processing, speed up the process of credit sanctions, and auto-generate loan documents, among others are the main purpose behind the launch of it. For all kinds of loans such as MSME, agriculture, retail and other credit, the system is expected to be implemented in a phased manner. - moneycontrol.

🍒 Banks want RBI to extend recast window till March 31, 2021 : Indian Banks Association (IBA) has made a representation to the Reserve Bank of India (RBI) to extend the restructuring window outlined by the KV Kamath committee by another three months to March 31, 2021, two people familiar with the development said. The window to seek restructuring is set to lapse on December 31. Bankers have requested the regulator that given the case in the Supreme Court leading to a prolonged moratorium, they haven’t been able to assess borrower cash flows. Also, with borrowers pinning hopes on the Supreme Court verdict in the loan moratorium case, several customers have sought more time to submit recast requests. “A request has been made to the RBI to extend the recast window by another three months, bank books are very opaque currently since several borrowers are sitting on the fence and awaiting a positive verdict from the apex court,” said a banker in the know of the IBA’s representation. - economic times

🍒 SBI’s digital banking platform ‘YONO’ encounters technical glitch : State Bank of India’s (SBI) digital banking platform ‘YONO’ encountered a technical glitch on Wednesday. Customers took to twitter to complain about not being able to open the app/login. According to SBI’s FY20 annual report, the daily active user base on YONO averaged 30 lakh logins (average 10 lakh in FY2019). This app was launched in November 2017. As of September-end 2020, India’s largest bank had about 2.85 crore cumulative registrations for YONO. As per the report, YONO provides both lifestyle and banking experience with more than 31 products, and over 40 services of 5 Joint Venture partners (SBI Life Insurance, SBI Card, SBICAP Securities, SBI General Insurance and SBI Mutual Fund) live on its financial superstore. - Business Line

🍒 Nabard, SBI ink MoU for livelihood intervention projects : Nabard’s Karnataka Regional Office on Wednesday has entered into MoU with State Bank of India (SBI), LHO-Bengaluru, to take up joint intervention projects and provide support, concessional refinance and capacity building of the stakeholders in Nabard’s livelihood projects. The ongoing development initiatives of Nabard and SBI include — Tribal Development Fund (TDF), Watershed Development Fund (WDF), Farmer Producer Organisation (FPOs), Self -Help Group (SHGs), and Joint Liability Groups (JLGs). The MoU will benefit farmers and 45,000 beneficiaries of 260 FPOs in 28 districts; 8,500 beneficiaries of 70 watersheds in 20 districts and 15 tribal development programmes (wadis) along with JLGs/ SHGs through EShakti (digitisation)/artisans/agri-preneurs/agri-start-ups. - Business Line

🍒 Legal tussle between LVB shareholders, RBI likely to reach SC : Irrespective of who wins the ongoing litigation arising from the amalgamation of LVB with DBS India Ltd (DBIL), it is more than likely that the losing side will escalate the matter to the Supreme Court. LVB shareholders (the petitioners) have challenged a clause in ‘The Lakshmi Vilas Bank Ltd(amalgamation with DBS Bank India) Scheme, 2020’ in the Bombay and Madras High Courts, whereby the value of their shareholding became zero overnight. The Reserve Bank of India (RBI), the main respondent in the aforementioned litigation, had prepared the draft scheme of amalgamation, which was sanctioned by the government on November 25. As per the clause in the scheme, the entire amount of the paid-up share capital, reserves and surplus, including the balances in the share or securities premium account of the transferor (LVB) bank, shall stand written off. - Business Line

🍒 LVB shareholders believe merger with DBS negates bank’s inherent strengths : The legal tug-of-war between the shareholders of Lakshmi Vilas Bank (LVB) and the Reserve Bank of India (RBI) regarding valuation of their shares, which have been marked down to zero following the amalgamation of the financially-stressed bank with DBS India Ltd (DBIL), is unlikely to end soon. Each party to the case, currently on in the Bombay and Madras High Courts, expects the other to seek relief in the Supreme Court should they lose the case in the High Court. While depositors’ interest has been safeguarded by merging the troubled LVB with a healthy bank (DBIL), shareholders of LVB are disappointed. As per a clause in the scheme in ‘The Lakshmi Vilas Bank (amalgamation with DBS Bank India) Scheme2020’, the entire amount of the paid-up share capital, reserves and surplus, including the balances in the share or securities premium account of the transferor (LVB) bank, shall stand written off - Business Line

🍒 Insolvency resolution in India sees second consecutive quarter of under-performance : Insolvency resolution in India saw a second consecutive quarter of underperformance as the number of cases admitted to the corporate insolvency resolution process (CIRP) fell 86% year-on-year in July-September. The National Company Law Tribunal (NCLT) admitted 80 cases during the second quarter of this financial year, one less than in the previous quarter and substantially lower than the 588 admitted a year ago, data released by the Insolvency and Bankruptcy Board of India showed. The data was along expected lines as the suspension of sections 7, 9 and 10 of the Insolvency and Bankruptcy Code (IBC) remained in place through the second quarter. "The drop in number of admissions in the quarter of July-September, is perhaps also on account of limitations of virtual hearings and the NCLT and the ecosystem adapting to the same," said Misha, partner at Shardul Amarchand Mangaldas & Co, adding that the suspension would have definitely put a stop to operational creditors (OCs) initiating CIRPs. - economic times

🍒 Fintech start-up CRED raises $80 million : Fintech start-up CRED, a members-only app that rewards users with exclusive rewards for paying credit card bills, has raised $80 million in a fresh round of funding. The new Series C round, which was led by existing investor DST Global along with other existing investors – Sequoia Capital and Ribbit Capital, takes CRED’s post-money valuation to $800 million. Including this round, CRED has raised a total of $175.5 million from 20 investors as per data sourced from Crunchbase. Founded in 2018 by Kunal Shah, CRED raised $120 million in Series B funding last year in July at a valuation of $450 million. Shah is the founder of mobile wallet service Freecharge, which he started in 2010 and which subsequently got acquired by Snapdeal in 2015 for $450 million. - Business Line

🍒 SIP inflow into MFs rises for first time in 7 months in Oct : After six months of continuous decline, investment in mutual funds through SIPs rose to Rs 7,800 crore in October indicating a return to normalisation for the retail investor. However, the increase in SIP numbers “may induce many to profit booking, as we are seeing in November equity flow preliminary numbers”, said Gautam Kalia, head (investment solutions) at Sharekhan by BNP Paribas. The industry raised Rs 7,800 crore through the SIP route last month, compared with Rs 7,788 crore garnered in September, data from the Association of Mutual Funds in India (Amfi) showed. This was the first increase in Systematic Investment Plan (SIP) inflows since March this year. - Business Line

🍒 Over 60 bids submitted for Reliance Capital’s asset monetisation plan : In a relief to creditors, over 60 bids including by Oaktree Capital, Blackstone and KKR are understood to have been submitted for various subsidiaries of Anil Ambani controlled Reliance Capital. As many as eight entities including Oaktree Capital, JC Flower and a number of asset reconstruction companies have put in bids for the entire RCAP assets on an as-is-where-is basis, according to banking sources. The details of the offer made by these entities including the bid amount could not be ascertained. For Reliance General Insurance, 18 bids have been submitted including by Chryscap, JC Flower, Blackstone, KKR, CVC Capital Partners, and Bain Capital. Meanwhile, 16 bids have come in for its life insurance subsidiary – Reliance Nippon Life Insurance from players including Bain Capital, NIIF, Arpwood Partners, Dabur Investments, Bandhan Bank, and Multiples Asset Management. - Business Line

🍒 High bounce rates indicate trouble ahead for lenders : Despite banks claiming that loan collection efficiencies have reached 95% of pre-Covid levels, bounce rates on auto-debit transactions continued to remain abnormally high. Data with NPCI and research done by Macquarie Capital showed that bounce rates on the National Automated Clearing House (NACH) platform stood as high as 40% in volumes and 32% in value at the end of October. This was at 31% in volume and 25% in value in February. Though these rates have come off slightly from a high of 45% in volumes and 38% in values in the month of June. Most banks and NBFCs have claimed of achieving near normal collection efficiency levels, but data suggests that Covid has altered borrower repayment behaviour. - economic times

🍒 Global bank job cuts reach five-year high : Banks around the world have announced the most job cuts in five years as the pandemic adds further pressure to business models upended by the digital revolution. ABN Amro Bank NV and Banco de Sabadell SA disclosed plans to eliminate as many 4,600 positions between them this week, taking the total to 85,540 globally, according to data compiled by Bloomberg. That’s the most since 2015, when deep overhauls of several major lenders called for a combined 91,448 positions to be axed. The moves by ABN Amro of the Netherlands and Spain’s Sabadell are a reminder that Europe is at the epicenter of the industry’s job cull, with its lenders facing record-low and even negative interest rates. Yet banks in the region have the added challenge of tougher labor protections than in other parts of the world, meaning the cuts will be drawn out over several years. - Live Mint

🍒 Ant Group mulls selling Paytm stake as China-India tensions mount : Chinese fintech giant Ant Group is considering selling its 30% stake in Indian digital payment processor Paytm amid tensions between the two Asian neighbours and a toughening competitive landscape, people with direct knowledge of the matter said. Financial details of the possible transaction have not been firmed up and Ant, the Alibaba-backed payments-to-consumer credit behemoth, has not launched a formal sale process yet, four people told Reuters. Paytm, which is also backed by SoftBank Group Corp among others, was valued at about $16 billion during its latest private fundraising round a year ago. At that valuation, Ant’s stake in the Indian firm is worth about $4.8 billion. Both Ant and Paytm said that the information was incorrect. A Paytm spokesman said “there has been no discussion with any of our major shareholders ever, nor any plans, about selling their stake.” - financial express

🍒 Razorpay, PayPal come together to help MSMEs : Razorpay has announced a partnership with PayPal to enable international payments for MSMEs and freelancers. The company’s partner businesses will integrate with PayPal and accept payments from international customers from across 200 markets in a convenient and secure manner, reducing wait time from days down to minutes. After having faced stiff challenges due to the ongoing pandemic, Indian SMEs are hoping to bounce back by leveraging digital technologies as they believe it’ll help them increase their revenues. Even the freelancer economy is flourishing, a recent study revealed that India saw a 46% increase in new freelancers. These businesses lose out on prospective global clients due to highly complex payment and banking infrastructure, processes and systems in place that lack seamless integration. By integrating PayPal into Razorpay’s payment platform, freelancers and MSMEs will be able to accept international payments easily. This service will also reduce wait times for statutory approvals. - economic times

🍒 Sensex dips 37 points on profit-booking; Nifty edges higher : The BSE Sensex retreated from record highs to close 37 points lower on Wednesday due to profit booking in banking and infrastructure stocks by cautious investors after the recent rally. The 30-share barometer closed lower by 37.40 points or 0.08 per cent at 44,618.04. The broader NSE Nifty edged higher by 4.70 points or 0.04 per cent to end at its fresh record high of 13,113.75.Banking stocks bore the brunt of profit selling ahead of the RBI policy announcement this week. Kotak Bank was the top loser among Sensex stocks, dropping by 3.28 per cent. HDFC Bank declined by 1.86 per cent, HDFC by 1.28 per cent and ICICI Bank by 0.99 per cent. SBI fell 0.5 per cent while Bajaj Finance by 0.72 per cent. Larsen & Toubro dropped 0.16 per cent. - Business Line

🍒 QIP mechanism: SEBI proposes discontinuing segregated offering of NCD, warrants : Markets regulator SEBI on Wednesday proposed discontinuing segregated offering of non-convertible debentures (NCDs) and warrants to institutional investors under the QIP mechanism. Under the current framework, an investor can either subscribe to the combined offering of NCD instrument with warrants or to the individual securities (that is, either NCD or warrants). It depends upon the type of offering made by the issuer -- whether the issuer has offered staple or segregated product. - Business Line

🍒 Rupee settles 13 paise lower at 73.81 against US dollar : The rupee pared its initial gains and settled for the day 13 paise lower at 73.81 (provisional) against the US dollar on Wednesday, tracking muted domestic equities. At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.45, pared the gains and finally closed at 73.81 against the greenback, registering a decline of 13 paise over its previous close of 73.68.

🍒 Gold prices today fall, a day after big jump; silver rates drop : Gold and silver prices in Indian markets dropped today amid weak global cues. On MCX, February gold futures slipped 0.24% to ₹48,449 per 10 gram while silver dropped 1% to ₹62,559 per kg. The precious metals had seen a sharp upmove in the previous session. Gold had jumped 1.4% or ₹700 per 10 gram while silver had surged about ₹3,000 per kg. Gold has been on a downhill journey since hitting a high of ₹56,200 in August.