09.12.2020: Today's Banking / Financial News

09.12.2020: Today's Banking / Financial News at a Glance

🍒 Blanket interest waiver on all loans to be Rs 6 lakh crore: Centre to SC : The Centre informed the Supreme Court on Tuesday that if it were to consider waiving interest on all the loans and advances to all categories of borrowers for the six-month moratorium period announced by RBI in view of COVID-19 pandemic, then the amount foregone would be more than Rs 6 lakh crore. If the banks were to bear this burden, then it would necessarily wipe out a substantial and a major part of their net worth, rendering most of the lenders unviable and raising a very serious question mark over their very survival, it said. A bench of Justices Ashok Bhushan, R S Reddy and M R Shah was informed by Solicitor General Tushar Mehta, appearing for the Centre, that this was one of the main reasons why waiver of interest was not even contemplated and only payment of instalments was deferred. The top court is hearing a batch of pleas of various bodies including from real estate and power seeking sector wise relief in view of the COVID-19 pandemic. - economic times

🍒 Reserve Bank of India cancels license of Maharashtra's Karad Janata Sahakari Bank : The RBI on Tuesday said it has cancelled the licence of The Karad Janata Sahakari Bank Ltd, Karad, Maharashtra, as it does not have adequate capital and earning prospects. More than 99 per cent of the depositors of the bank will get full payment of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC), the Reserve Bank said in a statement. With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of The Karad Janata Sahakari Bank will be set in motion. On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs 5 lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC) as per usual terms and conditions. - economic times

🍒 Indian Bank raises ₹1,048 cr through private placement of Basel III compliant bonds : : State-owned Indian Bank on Tuesday said it has raised ₹1,048 crore by issuing bonds on private placement basis. The bank has successfully raised tier I capital fund through private placement of Basel III compliant additional tier I perpetual bonds aggregating to ₹1,048 crore, Indian Bank said in a regulatory filing. The bonds will bear a coupon rate of 8.44% per annum payable annually, it said. The placement of the bonds has been completed by the bank through BSE-EBP (bond platform), Indian Bank said. Indian Bank shares jumped 15.44% to close at ₹85.60 apiece on BSE. - Live Mint

🍒 ICICI Bank to be designated bank for all financial transactions under National Health Mission in West Bengal : ICICI Bank has won the mandate to be the designated bank for all financial transactions under National Health Mission (NHM) in West Bengal, outbidding State Bank of India and other public sector lenders despite their bigger presence in the state. "ICICI quoted the lowest bid," a person familiar with the development said. Punjab National Bank, the convenor of state level bankers' committee (SLBC), by the virtue of its merger with United Bank of India, did not bid for the project. PNB officials said that neither UBI nor PNB could bid as both were busy in the process of merger. PNB has 1258 branches in the state, with SBI having nearly the same count. ICICI Bank has 213.- economic times

🍒 Bill Gates calls India’s digital finance approach a global model : Tech pioneer Bill Gates praised India’s policies for financial innovation and inclusion, saying his philanthropic foundation is working with other countries to roll out open-source technologies modeled on the country’s implementation. India has built ambitious platforms for universal identification and digital payments, including the world’s largest biometric database and a system for sending rupees between any bank or smartphone app. Gates said those policies have drastically reduced the cost and friction of distributing aid to the poor, especially during the pandemic. “If people are going to study one country right now, other than China, I’d say they should look at India,” Gates said at the Singapore Fintech Festival on Tuesday. “Things are really exploding there and innovation around that system is phenomenal.” - economic times

🍒 RBI bought three times more gold in HI FY21 : The Reserve Bank of India (RBI) bought about three times more gold in the first half (H1) of the current financial year vis-a-vis the year-ago period, betting on the safe haven asset class in the face of the pandemic’s deleterious impact on the global economy. India’s central bank mopped up 15.24 tonnes of the yellow metal in H1 (April-September 2020), against 5.61 tonnes in the year-ago period, as per RBI’s Report on Management of Foreign Exchange Reserves. - Business Line

🍒 Kotak MF launches REIT Funds of Funds scheme : Kotak Mahindra Asset Management Company has launched of Kotak International REIT Fund of Funds, which is India’s first diversified Real Estate Investment Trusts (REIT) Mutual Fund. The open-ended scheme will invest in units of SMAM Asia REIT Sub Trust Fund. This MF scheme will have a diversified investment portfolio comprising of listed REITs which will invest in real estate projects such as residential, office, data centres, warehousing, retail and hospitality. The New Fund Offer will be open for subscription till December 21. - Business Line

🍒 Banks are not snatching our jewellery loan business: Muthoot Finance MD : George Alexander Muthoot, Managing Director of Muthoot Finance, is not too worried about banks suddenly turning aggressive in the ‘loans against jewellery’ business, which is bread and butter for his company. In an interaction with BusinessLine, Muthoot emphasised that banks will lose interest in this business as soon as they find some other lending opportunity. - Business Line

🍒 Chanda Kochhar told Videocon's Dhoot to invest in hubby’s company: ED : Former head of ICICI Bank Chanda Kochhar had in 2009 told Videocon group chairman V N Dhoot, whose loan applications had been pending with the bank, to invest money in her husband Deepak’s company, said the Enforcement Directorate (ED) in its chargesheet filed recently. The documents attached to the chargesheet show that in Pacific Capital Service Pvt Ltd (PCSPL), one of the companies belonging to Kochhar, an office boy who served tea was shown as a director and had a stake in the company. - economic times

🍒 Walmart could join other tech giants in picking up stake in one of the NUEs : US-based retail giant Walmart could join Facebook, Google and Amazon in securing a part ownership in one of the upcoming new umbrella entities (NUEs) vying to become the country’s next big retail payment network. People close to the situation said that at least two consortium players preparing to apply for the coveted NUE license have approached Walmart’s PhonePe to become a strategic investor in their respective ventures. The Bengaluru-based fintech major is learnt to be studying the guidelines before deciding on its participation. Sameer Nigam, the co-founder and CEO of PhonePe, in an interview with ET confirmed that the startup has been approached by several prospective participants, even as he downplayed the interest. - economic times

🍒 IndusInd's Ramesh Sobti likely to join Aditya Birla Capital's board, pending RBI approval : Ramesh Sobti, who helped transform IndusInd from a small struggling bank into one of the fastest growing private sector lenders, is likely to join the board of Aditya Birla Capital, two people aware of the development said. Sobti’s induction which is subject to the Reserve Bank of India’s (RBI) approval, comes after some prominent investors had expressed concern over the performance of the group’s flagship financial services business, one of the persons cited above said. - economic times

🍒 Committee of Creditors at DHFL likely to extend deadline for debt resolution by a month : The Committee of Creditors at DHFL is likely to extend the deadline for debt resolution by a month to February of next year to factor in and evaluate the latest round of bids that might be radically different from those made in the past. Lenders met on Tuesday to discuss the extension proposal that would soon be put to vote, three people with knowledge of the matter told ET. The proposal will be submitted to Mumbai's National Company Law Tribunal citing growing complexities of competitive bids and a lawsuit by National Housing Bank, sources said. - economic times

🍒 Artificial Intelligence: Financial services industry behind the curve in meeting customer expectations : The financial services industry has not been up to the mark in driving Artificial Intelligence (AI) at scale to transform customer experience, said Capgemini, a global leader in consulting, technology services and digital transformation. Financial services customers’ overall expectations have still not been met, irrespective of all claims made by enterprises that are investing in Artificial Intelligence (AI) for improving customer experiences, Sudhir Pai, Chief Technology and Innovation Officer, Global Financial Services, Capgemini, told BusinessLine. - Business Line

🍒 Bank employee unions oppose large-scale engagement of apprentices : Four bank employee unions have opposed engagement of apprentices on a large scale in the banking sector and sought immediate review and reconsideration of the same by the Indian Banks’ Association (IBA). The unions said it is a matter of concern and intrigue that while banks as a whole would be recruiting only about 2,500 clerical staff in the next financial year, State Bank of India alone is planning to engage about 8,500 apprentices. In a joint letter to IBA Chairman Rajkiran Rai G, the unions observed that if the objective of engaging apprentices is to provide skill to them — keeping in view future job opportunities in the banking sector — then engaging 8,500 apprentices, when future job openings are so meagre, is not reconcilable. - Business Line

🍒 ICICI Bank to sell 2.21% stake in ICICI Sec via OFS : ICICI Bank will sell up to 2.21 per cent stake in ICICI Securities through an offer for sale on December 9 and 10. The proposal was approved by the board of directors of ICICI Bank on Tuesday. In a regulatory filing, ICICI Securities said the OFS will take place on December 9 for non-retail investors and on December 10 for retail investors. The floor price has been set at ₹440 per share, which amounts to a 4.75 per cent discount on ICICI Securities’ closing price of ₹460.90 a piece on the BSE on Monday. No discount is being offered to retail investors. - Business Line

🍒 Outlook for NBFC-HFC sector remains ‘negative’, says ICRA : The outlook for the non-bank sector – non-banking finance company (NBFC) and housing finance company (HFCs) – remains ‘negative’ as the operating environment is yet to materially recover post the pandemic-induced disruptions, according to ICRA. Further, the near-term demand outlook is likely to continue to remain subdued, the credit rating agency added. ICRA expects the NBFC Assets Under Management (AUM) to contract by 2 to 4 per cent in FY21 as the wholesale exposures – corporate/ real estate – are steadily being run down, while retail-NBFC AUM is expected to grow at +/- 1.5 per cent. - Business Line

🍒 South Indian Bank mulls multi-pronged approach to return to profitability : Thrissur-based South Indian Bank (SIB) is working on short- and medium-term growth strategies to remain competitive in the new and changed business environment. Murali Ramakrishnan, the new Managing Director and CEO, who brings with him a lot of exposure to retail banking, has identified many focus areas, including beefing up of capital to strengthen the balance sheet, focused drive on building strong and low-cost CASA book, leveraging of the strong distribution network to increase business, strengthening of NRI relationships, and augmenting the talent of young resources. As per the strategy of the bank, the corporate portfolio was consciously de-grown and is presently at 25 per cent of the total advances portfolio. Also, the stressed accounts in the large corporate book which were identified, have either turned into NPAs or have been sold off to ARC barring a few, which are closely monitored. - Business Line

🍒 BharatPe, third-largest player in UPI payment acceptance space : BharatPe, on Tuesday, said it has become the third-largest player in the merchant UPI payment acceptance space. The company recorded ₹3,334 crore in transaction value for November and processed 6.15 crore transactions last month.With this, BharatPe said it has toppled Google Pay from the third position. “BharatPe has been outgrowing the market and has doubled its market share in the UPI P2M merchant payment acceptance category since April 2020,” it said in a statement. - Business Line

🍒 Fitch affirms Axis Bank's IDR at BB-plus with negative outlook : Fitch Ratings has affirmed Axis Bank's long-term issuer default rating at BB-plus with a negative outlook and its viability rating at bb. The negative outlook mirrors the outlook on India's BBB-minus sovereign rating which was revised to negative from stable in June due to the impact of escalating coronavirus pandemic on the country's economy. Axis's issuer default rating which is higher than its viability rating is driven by its support rating floor and support rating. Fitch said the bank has a moderate likelihood of extraordinary state support if required due to its size and systemic importance; 5.6% of banking sector loans and 4.5% of deposits on 1H FY21. - Live Mint

🍒 Kotak Mahindra Bank introduces fitness allowance for employees : Kotak Mahindra Bank (Kotak) today announced the introduction of a fitness allowance and remote working benefits for its employees. The allowances – new additions to Kotak’s ‘Health to the Power Infinity’ programme for employees – are effective from 1st December, 2020. Under Kotak’s 'Health to the Power Infinity' programme, employees are eligible for a monthly fitness allowance. However, to ensure employees actually benefit from the purpose of the allowance, they would need to share their fitness goals with the bank. Further, as per Kotak’s Remote Working policy for employees, roles have been classified as full-time or partially remote working roles. To make work-from-home (WFH) more comfortable and productive, Kotak employees in full-time and part-time remote working roles will receive a remote working allowance every month. - Live Mint

🍒 Google Pay, PhonePe accounted for 86% of UPI transactions in Oct: NPCI : Google Pay and PhonePe together accounted for more than 80 percent of Unified Payments Interface (UPI) market. The two apps make up about 81 percent of the market, and accounted for 86 percent of the UPI transactions value in October, Mint reported, citing NPCI data. UPI transactions worth Rs 1,65,654.71 crore were done through Google Pay in October, the report said. Rs 1,68,085.06 crore worth of transactions were carried through PhonePe. - moneycontrol.

🍒 Market update: Sensex jumps 182 points to close at new high of 45,608 : After touching a record intra-day high of 45,742.23, the 30-share BSE index climbed 181.54 points or 0.40 per cent to finish at 45,608.51. Similarly, the broader NSE Nifty rose for the sixth consecutive day, up 37.20 points or 0.28 per cent to 13,392.95 -- its new lifetime closing high. It touched an intra-day record of 13,435.45 in early trade.UltraTech Cement was the top gainer in the Sensex pack, rising around 3 per cent, followed by TCS, Reliance Industries, HCL Tech, Infosys and Kotak Bank. On the other hand, Sun Pharma, IndusInd Bank, NTPC, Tech Mahindra, ONGC and Asian Paints were among the laggards.

🍒 Rupee settles 10 paise lower at 73.90 against US dollar : The rupee dropped by 10 paise to settle at 73.90 (provisional) against the US currency on Monday due to a stronger dollar in overseas markets. At the interbank forex market, the domestic unit witnessed a volatile trading session. It opened at 73.79 and rose to an intra-day high of 73.70 and dropped to a low of 73.96.

🍒 Gold prices today fall, a day after big gains; silver rates drop : Gold prices and silver prices dropped in Indian markets amid a strong rally in equity markets. On MCX, gold futures edged 0.15% lower to ₹49,879 per 10 gram, after rising to ₹50,175 earlier in the session. Silver futures fell 0.6% to ₹65,057 per kg. In the previous session, gold futures had jumped 1.5% or ₹750 per 10 gram while silver had surged 2.5% or ₹1,600 per kg..

08.12.2020: Today's Banking / Financial News

 08.12.2020: Today's Banking / Financial News at a Glance

🍒 NBCFDC, NSFDC in pact with Central Bank of India for interest subvention : The Social Justice Ministry’s interest subvention scheme — VISVAS — got a major boost with the National Backward Classes Finance & Development Corporation(NBCFDC) and the National Scheduled Castes Finance and Development Corporation (NSFDC) signing agreements with Central Bank of India. The scheme will benefit OBC/SC SHGs with loans/borrowings up to ₹4 lakh and OBC/SC individuals with loan/borrowing up to ₹2 lakh with a quick interest subvention benefit of 5 per cent directly into the standard accounts of borrowing SHGs/beneficiaries, an official release said. The VISVAS Yojana is for financial empowerment of economically marginalised OBC/SC SHGs and individuals. The memorandum of agreements was signed by VK Mahendru, Field General Manager, Central Bank of India; Anupama Sood, General Manager (Projects), NBCFDC and Devanand, Chief General Manager, NSFDC in the presence of K Narayan, Managing Director NBCFDC /Chairman cum Managing Director NSFDC. The scheme is expected to benefit many entrepreneurs on a pan India basis, the release added. - Business Line

🍒 Bankers not to participate in Bharat Bandh on Tuesday : Bank unions said they will not participate in the ‘Bharat Bandh’ on Tuesday, even as they expressed solidarity with farmers protesting against the new farm laws. Farmer groups, camping at various Delhi border points for over a week, have called for a nationwide shutdown on Tuesday to protest against three recently enacted agriculture-related legislations. - financial express

🍒 SBI to boost retail loan book, sees earnings improving : State Bank of India will accelerate retail loans and expects most lenders to post stronger-than-anticipated earnings as the economy revives faster than expected, according to Chairman Dinesh Khara. The banks were expecting worse, so they strengthened risk management significantly,” Khara, who took charge as head of the country’s largest lender in October, said in an interview with Bloomberg Television on Monday. “That’s why we are expected to see much better results than at the beginning of the pandemic.” SBI’s bad loan ratio fell to 5.28 per cent at the end of September from 5.44 per cent three months earlier, but the bank warned that it expects a further 200 billion rupees ($2.7 billion) of loans to sour over the next six months as the pandemic hurts borrowers. However, the state-run bank has provided for its potential bad loans in advance, which will prevent significant pressure from building, Khara said last month. - Business Standard

🍒 SBI recasts only 4,000 retail loans : State Bank of India (SBI) has recast loans of just around 4,000 retail borrowers so far under the limited window of the Reserve Bank of India (RBI), indicating that barring micro, small and medium businesses, not many are availing of easier repayment norms. C.S. Setty, managing director of India’s top lender by assets, said in an interview that 100,000 retail borrowers logged on to its website to check their eligibility, but not many were found to have met the stringent conditions set by RBI. Lenders have till December-end to agree on recast plans for retail borrowers and an additional 90 days to implement them. “The reasons for borrowers not being eligible include loans being more than 30 days overdue on 1 March. That apart, many also wanted to check out (their eligibility) despite not having lost their jobs or income. There are people who have had no decline in income due to the pandemic but still checked their eligibility," said Setty. - Live Mint

🍒 We are taking steps to ensure Yono outage like incidents don't recur: SBI MD : Days after State Bank of India’s (SBI's) Yono mobile banking application faced a system outage, the bank has said it was caused by technical glitches, rather than heavy digital traffic. C.S. Setty, managing director of SBI told Mint that the Reserve Bank of India's decision to pull up HDFC Bank on outages has sent out a strong signal to all banks to ensure that they have a robust infrastructure in place along with a robust security system to take care of the growing customer usage. We had some technical glitches both on Thursday and Friday and I think 99% of them have been addressed. They are usual technical glitches and have nothing to do with the traffic. A lot of people were asking whether our app will be able to handle an increase in the number of users. The app is structured in a manner as to add as many customers as possible and handle as many logins as possible. We are building it based on our customer base. While we have a large base, we also have a substantial number of internet banking customers who would eventually move to the Yono app and it is not like all my 460 million customers are going to move to Yono. That kind of infrastructure is already created. The focus was on making the app available immediately and maybe in the next four to five days we will know how to prevent such problems in future. While Yono is our most important digital asset, we always have a fall-back mechanism for our customers. We have also created a lighter version of Yono and that was operational, however, we will definitely take care that such incidents do not happen in future. - Live Mint

🍒 BoB launches Atmanirbhar Women Gold Scheme : Bank of Baroda (BoB) has launched the Atmanirbhar Women Scheme as part of its Baroda Gold Loan. Under the scheme, the bank is offering loans at 0.50 per cent concession for women. The bank under the gold loan scheme is also offering agri-gold loan at 0.25 percent concession and for retail loan at 0.50 per cent concession. The scheme was launched at BOB's Ramamurthy Nagar branch in Bengaluru and simultaneously in 18 branches coming under 18 zones in the country, virtually by Sanjiv Chadha, MD & CEO, Bank of Baroda. M Ravindra Rai, head, gold loan vertical, said: “This Atmanirbhar scheme is exclusively meant for helping women to be self-reliant.” - Business Line

🍒 ICICI Bank opens up its mobile app for customers of rival lenders : At a time when the Reserve Bank of India (RBI) has tightened scrutiny over digital services offered by banks in light of increased instances of outages, private sector lender ICICI Bank has upgraded its mobile app to allow customers of rival banks to avail basic online banking services on its platform. The new app, which ICICI Bank claims is a first in the industry, will allow users to link their bank accounts, generate a UPI ID and avail services such as online transactions, opening savings accounts, making investments, applying for loans and credit cards without being an ICICI Bank account holder. The lender in a statement said that it aims to “extend the ambit of mobile banking apps which are hitherto restricted to only the customers of the respective banks.” - economic times

🍒 ICICI Bank launches interoperable banking app : The second largest private sector lender ICICI Bank on Monday launched a new version of its mobile payment app which is interoperable and allows payments and other banking services to customers of any other bank. The latest version of the bank's mobile banking app is called iMobile Pay, through which customers of other banks can link their bank account, generate a UPI ID and start paying, shopping, transfer funds to any bank account or to any other payment apps or digital wallets; or bill payments and online recharges, among others, ICICI Bank said in a statement. The app also offers instant banking services such as savings account, investments, loans, credit cards, gift cards, and travel cards, among others.- economic times.

🍒 Lakshmi Vilas Bank name board gets DBS logo, tagline on new ownership : DBS Bank India, the new owner of 94-year Lakshmi Vilas Bank (LVB), has retained the latter's identity and logo in name boards at LVB's Head Offices, branches and website. The only new additions are DBS Bank India's logo and a line under Lakshmi Vilas Bank saying: 'Now part of DBS Bank India Ltd'. With effect from November 27, 2020, LVB has been amalgamated with DBS Bank India Ltd (DBIL), the subsidiary of DBS Bank, Singapore. While DBS India did not comment on whether this is a permanent or a temporary arrangement, experts and LVB employees believe that the LVB name will be retained. Sources said as per the scheme of amalgamation, the appointed date is November 27. This means LVB ceased to exist from that date and DBS Bank India Ltd took over. This would be a discretionary business decision of DBS. Even in the merger of Syndicate Bank with Canara Bank, every name board carries the word Syndicate. This is required to avoid confusion in the minds of the public. But for how long, is a question to be decided by the management by prudence, bank officials said. - Business Standard

🍒 Fino Payments Bank firms up plan to convert into Small Finance Bank : Fino Payments Bank which started generating profits (post-tax) three quarters ago, has started back-end planning to eventually convert into a small-finance bank (SFB). Enthused by the recent internal working group report that advocated allowing payments bank (PB) to convert to SFB after three years of operations from the current five years, Fino is also looking to give stakeholder comments to RBI on the issue. “These are progressive guidelines we are yet to study this in further details, there is obviously uncertainty whether the final guidelines will take into account these suggestions so we will have to wait and see on that but we are looking at this very positively,” said Rishi Gupta, CEO, Fino Payments Bank. - economic times

🍒 ICICI Bank tells analysts technical outages can happen anytime, banks can only reduce probability : Chiming in support of peer HDFC Bank, private lender ICICI Bank has told analysts that technical outages are an unfortunate but harsh reality and can happen anytime, a report by Macquarie Capital has revealed. The ICICI bank management also told analysts that the only thing a bank can do is minimise the probability of such events, Macquarie has said. Last week, the Reserve Bank of India had asked HDFC Bank to halt launches of all new digital offerings and stop onboarding credit card customers. This is the first time the regulator has imposed business sanctions on a bank for a system outage, indicating a strict stance here on for similar episodes. - economic times

🍒 Suspension of new digital initiatives, credit cards negative for HDFC Bank: Moodys ; The Reserve Bank of India's (RBI) directions on HDFC Bank due to multiple outages in its internet banking, mobile banking and payment services in the last two years are credit negative for the bank and it will delay the launch of new digital initiatives and could likely increase spending which will strain the bank's profitability, global credit rating agency Moody's said in a report. "The RBI action will delay the launch of HDFC Bank's Digital 2.0 initiative, under which the bank aims to consolidate all customers' digital transactions, including payments, savings, investments, shopping, trade, insurance and advisory services, into one platform. This has the potential to increase spending to improve the bank's digital infrastructure, which would strain its profitability," Moody's said.- economic times

🍒 Kotak MF launches REIT Funds of Funds scheme : Kotak Mahindra Asset Management Company has launched of Kotak International REIT Fund of Funds, which is India’s first diversified Real Estate Investment Trusts (REIT) Mutual Fund. The open-ended scheme will invest in units of SMAM Asia REIT Sub Trust Fund. This MF scheme will have a diversified investment portfolio comprising of listed REITs which will invest in real estate projects such as residential, office, data centres, warehousing, retail and hospitality. The New Fund Offer will be open for subscription till December 21. Kotak International REIT Fund of Funds offers an opportunity for domestic investors to invest and benefit from growth in real estate market without actually owning the entire asset. REIT owns, operates, or finances income-generating real estate. - Business Line

🍒 Covid-19 impact: Rise in demand for higher sum assured under health insurance : The Covid-19 pandemic and the rising costs of medical treatments seem to be pushing people to opt for a higher sum assured under health insurance. Insurance companies have been witnessing a surge in the number of people opting for higher sum assured or going in for top-up policies over their existing cover. The average sum assured under the indemnity policy, which was usually in the range of ₹2-3 lakh, has now increased to ₹5-7 lakh, with a fair share of people also opting for sum assured of ₹10 lakh and above.- Business Line

🍒 Companies raise over Rs 73,000 cr from capital markets in October : Companies raised Rs 73,215 crore from the capital markets in October, with private placement of debt instruments continuing to be the most-preferred route for funding. The funds have been mopped up mainly for business expansion plans, loan repayments and working capital requirements.According to monthly bulletin published by markets regulator Sebi on Monday, firms raised a total of Rs 73,215 crore in October compared to Rs 75,232 crore in September through issuance of equity and debt securities.Prior to this, companies had mopped up Rs 1.1 lakh crore in August.Out of the cumulative Rs 73,215 crore garnered in October, Rs 62,331 crore was mopped up from private placement of debt securities and Rs 4,144 crore through private placement of equity, which include qualified institutional placement (QIP) and preferential allotment routes. Individually, a total of Rs 2,200 crore were raised through the QIP route and Rs 1,944 crore were raised through issuance of shares on a preferential allotment basis. - Business Standard

🍒 Franklin seeks investors’ nod for ‘orderly winding up’ of six debt schemes : The Trustee of Franklin Templeton Mutual Fund in India has approached the unitholders to seek consent for the orderly winding up of the six debt schemes, as directed by the interim order of the Supreme Court. The Trustee has partnered with K Fintech for the electronic voting process and a meeting of the unitholders to seek their consent. Voting will take place from December 26-28 and the meeting of unitholders of the relevant schemes on December 29. - Live Mint

🍒 Ujjivan SFB launches neighbourhood banking channel : Ujjivan Small Finance Bank on Monday said it has introduced a new channel to make banking services accessible to customers in their neighbourhood. The channel – Money Mitra – will facilitate entrepreneurs running local businesses like Kirana, medical stores and insurance agencies to offer retail banking solutions to the bank’s customers exclusively. In these outlets, the lender’s customers can make a deposit, withdraw money, pay loan EMI and perform fund transfer without having to travel to branches, the bank said in a release. “We believe that Money Mitra is in-line with our purpose of building banking behaviour specifically among our micro banking customers. Now, Ujjivan SFB customers can opt for banking facilities even if they go to buy daily essentials in their neighbourhood,” the bank’s managing director and CEO Nitin Chug said. - financial express

🍒 Gold Prices Fall For Second Day In A Row To Rs 49,199 Per 10 Gram; Silver Slips : Gold prices on December 7 fell by Rs 117 to Rs 49,199 per 10 gram in the Mumbai retail market on a rebound in US dollar and negative global cues. This is the second straight day of fall in gold prices. The precious metal price had risen nearly 1 percent last week in the domestic market. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,066 plus 3 percent GST, while 24-carat 10 gram was Rs 49,199 plus GST. The 18-carat gold quoted at Rs 36,899 plus GST in the retail market. Silver prices dropped Rs 916 to Rs 62,148 per kg from its closing on December 4.

🍒 Rupee settles 10 paise lower at 73.90 against US dollar : The rupee dropped by 10 paise to settle at 73.90 (provisional) against the US currency on Monday due to a stronger dollar in overseas markets. At the interbank forex market, the domestic unit witnessed a volatile trading session. It opened at 73.79 and rose to an intra-day high of 73.70 and dropped to a low of 73.96.

🍒 Shares of ICICI Bank have seen renewed buying on the bourses in the last few days as its focus on digital has been welcomed by analysts. The stock on Monday closed at ₹510.65 on the BSE, up 1.7 per cent. In the last one week, ICICI Bank has gained 7.8 per cent and in the last one month15.3 per cent. The stock’s 52-week high and low figures are ₹552.40 and ₹269, respectively.nvestors warm up to ICICI Bank as its digital strength is back in focus : "New digital innovations have positioned the bank well to gain incremental market share across key product lines," the note added

🍒 Sensex rallies 347 pts to end at fresh peak; Nifty tops 13,350 for first time : After touching a record intra-day high of 45,458.92, the 30-share BSE index settled 347.42 points or 0.77 per cent higher at 45,426.97. Similarly, the broader NSE Nifty rose 97.20 points or 0.73 per cent to an all-time closing high of 13,355.75. It touched its record intra-day peak of 13,366.65 in early trade. Bharti Airtel was the top gainer in the Sensex pack, rising around 3 per cent, followed by HUL, HDFC, ITC, IndusInd Bank, SBI, Sun Pharma, ONGC, Tech Mahindra, L&T and Asian Paints. On the other hand, Kotak Bank, Nestle India, Tata Steel, Bajaj Finance and HDFC Bank were among the laggards..

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..