Sunday, 13 December 2020

12.12.2020: Today's Banking / Financial News

 12.12.2020: Today's Banking / Financial News at a Glance

🍒 RBI eases norm for entities availing TLTRO funds to get guarantee : The Reserve Bank of India (RBI), on Friday, said the credit outstanding stipulation for availing credit guarantee under ECLGS (Emergency Credit Line Guarantee Scheme) 2.0 will not apply to funds availed under On Tap TLTRO (Targeted Long-Term Repo Operation). Currently, under ECLGS 2.0, only entities with credit outstanding between ₹50 crore and ₹500 crore are eligible for credit guarantee. The RBI’s latest move will increase liquidity availability and credit guarantee to those entities with credit outstanding below ₹50 crore and above ₹500 crore. Banks have been encouraged to synergise the two schemes – ECLGS 2.0 and On Tap TLTRO – by availing funds from the RBI under TLTRO and seek guarantee under ECLGS to provide credit support to stressed sectors (identified by the Kamath Committee). - Business Line

🍒 Banks sanction Rs 2.05 lakh cr to 81 lakh MSMEs under credit guarantee scheme : The Finance Ministry on Friday said banks have sanctioned loans worth Rs 2,05,563 crore to about 81 lakh accounts under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector that was impacted by disruptions caused due to the coronavirus pandemic. While, 40 lakh MSME accounts have received Rs 1,58,626 crore till December 4, the Finance Ministry said in a series of tweets. "Rs 3 lakh cr Collateral-Free Guaranteed Loans - Budgetary provision of Rs 4,000 crore made for the Scheme in First Supplementary Demand for Grants for FY 2020-21," a tweet said.Announcing Aatmanirbhar Bharat Package 3.0 last month, Finance Minister Nirmala Sitharaman had said that Rs 2.05 lakh crore sanctioned and Rs 1.52 lakh crore disbursed under ECLGS 1.0. "As part of the Aatmanirbhar Bharat Abhiyan 3.0 (announced on November 12), ECLGS Scheme has been extended through ECLGS 2.0 for the 26 stress sectors and health care sector with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 29, 2020," a tweet said. - economic times

🍒 Post-lockdown boost: Public-sector banks told to tap markets aggressively to help spur economic activities : The government has impressed upon public-sector banks (PSBs) to raise capital from the markets more aggressively, taking advantage of abundant liquidity, and ensure a sustained credit push to help spur economic activities, as lockdown curbs are all but lifted. At the same time, it is planning to finalise by late February or early March the distribution of the Rs 20,000-crore capital, approved in September, among various PSBs after assessing their financial performance in the third quarter as well as success in fund-raising, sources told FE. “The idea is to ensure that PSBs have adequate capital to not just meet regulatory requirement but also substantially boost lending. PSBs have lined up fund-raising plans, so that they don’t have to rely excessively on the government for more capital,” said a senior banker. - financial express

🍒 COVID crisis has brought an inflection point in banking system: Axis Bank chief : The pandemic due to COVID-19 has ushered in an inflection point in the entire banking system which is going to bring in radical changes in terms of lending parameters, MD and CEO of Axis Bank Amitabh Chaudhary said on Friday. Speaking at a session on financial system organised by XLRI, he said that the COVID crisis has created a huge disruption in the banking system in the country where individual banks are feeling its impact. He said that due to the pandemic, individuals ability to repay loans has reduced significantly while 90 per cent of the banks’ books is in moratorium. “The crisis has increased the health costs and the average individual household needs money while banks at the same time will have to be more cautious. A vicious negative cycle has set in while discretionary spending has hit an all time low”, Chaudhary said. - financial express

🍒 Finance Ministry gives progress report on Atmanirbhar package : The finance ministry on Friday provided details of the progress made under various schemes announced in the Atmanirbhar package. It noted that around 50% of the loans have been disbursed under the Rs 3-lakh crore collateral free guaranteed loan scheme for businesses, a part of the Atmanirbhar package announced in May 2020. “Loans worth Rs 2.05 lakh crore have been sanctioned to over 80 lakh accounts, of which Rs 1.58 lakh crore have been disbursed to over 40 lakh accounts,” it noted detailing the progress under the scheme. The scheme provides fully guaranteed and collateral-free loans for amounts up to 20% of outstanding loans to all business enterprises, individuals seeking credit for business purposes and MUDRA borrowers. - economic times

🍒 LIC allows online switching of Ulips : To help policyholders during the pandemic, the national life insurer LIC has allowed them to switch online funds under ulip policies through its portal. The facility will be available for those policyholders who are registered for its premier services, LIC said in a statement on Friday. This online switching of funds will be available for the new endowment plus (Plan 935), Nivesh plus (Plan 849) and the SIIP (Plan 852), it added. There is no fee for doing so. One switch is allowed per day per policy through an OTP-based authentication system, it added. The insurance behemoth has also launched a multilingual call centre by extending the support to Marathi, Tamil and Bengali. The corporation plans to add more regional languages in the near future. Call centre services were available only in English and Hindi since September 2018. BEN MR - economic times

🍒 I-T refunds worth Rs 1.45 lakh cr issued to 89 lakh taxpayers : The Finance Ministry on Friday said the Income Tax Department has issued refunds worth Rs 1.45 lakh crore to about 89 lakh taxpayers so far this fiscal. This includes personal income tax (PIT) refunds during this period. "CBDT issues refunds of over Rs 1,45,619 crore to more than 89.29 lakh taxpayers between 1st April, 2020, to 08th December, 2020," the Finance Ministry said in a tweet. - economic times

🍒 Lenders look to revive restructuring of JP Associates outside IBC : Lenders to Jaiprakash Associates Ltd are looking at a possible resolution outside the Insolvency and Bankruptcy Code. Sources close to the development confirmed that the consortium of lenders, led by ICICI Bank, are working on a proposal for restructuring under the RBI’s June 7 circular. The objective is to go in for timely restructuring so that lenders can get back some of their dues. Lenders are expected to submit the proposal to the RBI in the coming months as discussions are still on. “There have been previous instances also when similar discussions were started but did not fructify. Banks are now hoping that this will go through,” said a person familiar with the development, adding that public sector lenders are taking a keen interest. - Business Line

🍒 ATM moment of banking services is here as lenders make apps open for all : Long after automated teller machines (ATM) were made interoperable for bank customers, the whole gamut of banking is becoming membership agnostic. Earlier this week, ICICI Bank created some buzz by announcing its banking app — iMobile Pay — would be free for all to use. A customer need not be with the bank but can link her bank account with a Unified Payments Interface (UPI) ID with ICICI Bank and start using it for all kinds of payments across all platforms. Much like how Google Pay is being used for paying bills and purchases through UPI. iMobile Pay can also be used to get credit cards, instant loans, and, if needed, a savings bank account with the ICICI Bank. In the coming days, the bank plans to introduce products such as fixed deposits, recurring deposits, mutual funds and insurances through the app. - business standard

🍒 ICICI Prudential's assets under management cross Rs 2 trillion : ICICI Prudential Life, which is entering the 20th year of operations, on Friday said that its assets under management have crossed Rs 2 lakh crore. The company, the first in the industry to go public, started operations 20 years ago with the issuance of policies to seven underprivileged children and closed the first year of operations with an AUM of around Rs 100 crore (in FY01). The AUM grew to about Rs 50,000 crore in FY10 and subsequently the company was the first in the insurance industry to achieve an AUM of Rs 1 lakh crore in February 2015. As of September 2020, its total sum assured stood at Rs 18.06 lakh crore. "Achieving the Rs 2-lakh-crore assets milestone demonstrates the trust reposed in us by our customers," ICICI Prudential Life MD and chief executive NS Kannan said. "As one of the largest life insurers, it is our mission to protect and provide financial security to every citizen."- business standard

🍒 Kotak can’t pay dividend on preference shares, says RBI : The Reserve Bank of India (RBI) has barred Kotak Mahindra Bank from paying dividend on perpetual non-cumulative preference shares (PNCPS) worth ₹500 crore that it sold in 2018 to comply with a regulatory ceiling on promoter shareholding. The regulator first ordered banks and certain categories of non-banks on 4 December not to pay dividends from their profits in FY20 to conserve capital but clarified on Thursday that it applied to PNCPS as well in a letter to Kotak Mahindra Bank. - Live Mint

🍒 NBFCs AUM to grow at 5-6 per cent in FY22: Crisil : The asset under management (AUM) of non-banking finance companies, including housing finance companies, is likely to see a positive growth but will be muted at 5-6 per cent in the next financial year, according to Crisil Ratings. The turnaround will be led by larger entities with stronger parentage. In the current fiscal, NBFCs’ AUM is likely to de-grow for the first time in the last two decades, it said. “Navigating a raft of headwinds for over two fiscals – culminating in de-growth in the current fiscal – assets under management (AUM) of non-banking financial companies (NBFCs) is set to grow again – although at a relatively subdued 5-6 per cent next fiscal,” the agency said in a report. According to the agency’s president Gurpreet Chhatwal, despite an estimated GDP growth of 10 per cent next fiscal, overall NBFC sector growth is likely to be slower because access to funding remains a challenge due to concerns about the impact of the pandemic on asset quality. “Additionally, competition is expected to be more intense from banks – which are flush with low-cost deposits and better placed with improved capital buffer than in the previous years,” he said. - financial express

🍒 Gold eases to Rs 49,046 per 10 gram on a firm dollar, silver also falls : Gold prices fell Rs 145 to Rs 49,046 per 10 gram in the Mumbai retail market on a firm dollar and subdued global cues. The precious metal traded under pressure on optimism surrounding coronavirus vaccine after the USFDA approved Pfizer/BioNTech jab for emergency use. The metal has dropped Rs 270, or 0.55 percent, in the domestic market this week and traded lower in four of the five sessions. The rate of 10 gram 22-carat gold in Mumbai was Rs 44,926 plus 3 percent GST, while 24-carat 10 gram was Rs 49,046 plus GST. The 18-carat gold quoted at Rs 36,785 plus GST in the retail market. Silver slipped Rs 368 to Rs 62,232 per kg from its closing on December 10.

🍒 India's forex reserves surge by $4.525 billion to record $579.346 billion : The country's foreign exchange reserves surged by $4.525 billion to touch a record high of $579.346 billion in the week ended December 4, the RBI data showed. In the previous week ended November 27, the reserves had declined by $469 million to $574.821 billion. In the reporting week, the increase in reserves was on account of a rise in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $3.932 billion to $537.386 billion, the Reserve Bank of India's (RBI) weekly data showed. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. 

🍒 Rupee ends 2 paise higher at 73.64 against US dollar ; The rupee traded in a narrow range and settled for the day 2 paise higher at 73.64 against the US dollar on Friday, tracking recovery in doemstic equities towards the fag-end of the session. At the interbank forex market, the domestic unit opened at 73.65 against the US dollar and witnessed an intra-day high of 73.56 and a low of 73.71. 

🍒 Markets perch near all-time highs; bank, FMCG stocks shine : After touching its all-time intra-day high of 46,309.63, the 30-share BSE Sensex dipped into the negative zone in late-afternoon trade. However, it staged a comeback to end 139.13 points or 0.30 per cent higher at 46,099.01, just shy of its closing record. On similar lines, the broader NSE Nifty rose 35.55 points or 0.26 per cent to 13,513.85. It hit a lifetime high of 13,579.35 during the session.ONGC topped the Sensex gainers’ chart, rallying 5.68 per cent, followed by NTPC, Tata Steel, ITC, ICICI Bank, Titan, Bajaj Auto and SBI. On the other hand, Axis Bank, M&M, Tech Mahindra, HCL Tech, Bajaj Finserv and Infosys were among the laggards, skidding up to 2.19 per cent..

11.12.2020: Today's Banking / Financial News

11.12.2020: Today's Banking / Financial News at a Glance

🍒 Canara Bank sets issue price for Rs 2,000 crore QIP at Rs 103.50 a share : State-run Canara Bank on December 10 said it has approved the issue price at Rs 103.50 per share for its qualified institutional placement (QIP) to raise Rs 2,000 crore. Earlier this week, the bank had set the floor price for the issue at Rs 103.50 apiece. In respect of the QIP, the sub-committee of the board at its meeting held on December 10 "approved the closure of the issue period for QIP today (i.e., December 10, 2020)", Canara Bank said in a regulatory filing.The sub-committee approved the "issue price at the floor price of Rs 103.50 per equity share…for an aggregate value of Rs 2,000 crore to be allotted to eligible qualified institutional buyers in the QIP", the bank said. Further, it has also approved the confirmation of allocation note to be sent to the qualified institutional buyers, intimating them of allocation of equity shares pursuant to the QIP, it added. Stock of Canara Bank closed 4.37 per cent down at Rs 122.50 apiece on BSE. - moneycontrol

🍒 Indian Bank aims to grow MSME portfolio riding on mentoring programme : Indian Bank is aiming to grow its MSME portfolio riding on its small entrepreneurship mentoring programme, christened MSME Prerana, as it will enable small businesses to access bank credit more easily. The bank’s MSME portfolio is of Rs 65,176 crore (17.34 lakh accounts), which is 18% of total advances portfolio. During the first half of 2020-21, the MSME portfolio had grown by 14.73%. Under the Prerana, online training sessions for MSMEs are being conducted to train them in basics of accounting, maintenance of books of accounts, government and bank schemes. Training programmes are being arranged in vernacular languages for the benefit of MSMEs. The bank has entered into tie-ups with Poornatha & Co, a entrepreneurial development organisation and Michigan Academy for Developing Entrepreneurs for this purpose. The lender has recently started its fourth batch of MSME Prerana for entrepreneurs in Tamil Nadu. MSME Prerana, a first-of-its-kind initiative by a bank for the MSME sector, was launched by Union finance minister Nirmala Sitharaman on October 6, 2020. - financial express

🍒 RBI imposes penalty of ₹10 lakh on HDFC Bank : Private sector lender HDFC Bank, on Thursday, said the Reserve Bank of India has imposed a penalty of ₹10 lakh on it. “The RBI has, vide its letter dated December 4 (which was received by the bank on December 9), imposed a monetary penalty of ₹10 lakh on the bank for bouncing of SGL, which lead to shortage of balance in certain securities in the bank’s CSGL account on November 19,” it said in a regulatory filing. The bank has since enhanced its review mechanism to ensure that such incidents do not recur, it further said. On Thursday, HDFC Bank scrip closed 1.42 per cent lower at ₹1,385.85 apiece on the BSE.- Business Line

🍒 RBI to Kotak Mahindra Bank: No dividend payment on perpetual non-cumulative preference shares : The Reserve Bank of India has restricted Kotak Mahindra Bank from paying dividend on perpetual non-cumulative preference shares (PNCPS). The private sector lender, in a regulatory filing, said it has received communication from the RBI on this issue. The central bank had, on December 4, issued a circular advising banks not to make any dividend payment on equity shares from the profits pertaining to the financial year ended March 31, 2020. “It is clarified that the above restriction on dividend distribution also applies to PNCPS,” the RBI said in its letter to Kotak Mahindra Bank.- Business Line

🍒 Indian Bank makes requisite accounting entries to set off losses : Indian Bank said that it made requisite accounting entries setting off accumulated losses of Rs18,975.53 crore from the share premium account of the bank. The bank informed exchanges that on November 30, 2020, a special resolution was passed by the shareholders of the bank approving "Appropriation of accumulated losses of Rs.18,975.53 crore from share premium account of the bank in the Extraordinary General Meeting (EGM), we have to inform you further that the bank on the date, with prior approval of Reserve Bank of India, has passed the requisite accounting entries setting off accumulated losses of Rs.18,975.53 crore from share premium account of the bank. On November 30, at the extraordinary general meeting (EGM) the Bank approved the appropriation of accumulated losses of Rs 18,975.53 crore from the share premium account of the bank. - Business Standard

🍒 RBI lays down stringent dividend distribution formulae for NBFCs : The Reserve Bank of India has said that non-banking finance companies (NBFC) with minimum 15% capital adequacy and net non-performing assets (NPA) below 6% for three years will be eligible to declare dividend from this fiscal onwards. In a graded dividend payout format released on Wednesday, the regulator said that a better managed NBFC with less than 4% net NPA can still become eligible for dividend distribution even if the minimum capital and leverage norms are not met for the previous two years. These are part of a matrix where capital adequacy, leverage ratio, adjusted net worth and net NPA set the criteria for distributing the earnings with shareholders. - economic times

🍒 ICICI opens new front with mobile app interoperability, other banks may follow : State Bank of India (SBI) will follow ICICI Bank's unprecedented move to open its mobile application to use by other bank's customers using the UPI platform, opening a new front in the battle for new customers and cheap deposits in the banking sector. ICICI on Monday announced that customers of any bank can link their bank account generate a UPI ID and start sending and receiving money to any bank account, payment app or digital wallet immediately. Moreover customers will also get instant access to the entire range of ICICI Bank’s banking services. Anup Bagchi, executive director, retail banking at ICICI said the bank hopes to benefit from new customer leads and ultimately deposits in the long run by allowing other bank customers to use its application. - economic times

🍒 Kotak can’t pay dividend on preference shares, says RBI : The Reserve Bank of India (RBI) has barred Kotak Mahindra Bank from paying dividend on perpetual non-cumulative preference shares (PNCPS) worth ₹500 crore that it sold in 2018 to comply with a regulatory ceiling on promoter shareholding. The regulator first ordered banks and certain categories of non-banks on 4 December not to pay dividends from their profits in FY20 to conserve capital but clarified on Thursday that it applied to PNCPS as well in a letter to Kotak Mahindra Bank. - Live Mint

🍒 Despite improved collections, bad loans could rise: Moody’s : Despite improvement in collection efficiencies delinquencies will continue to rise amid weak economic conditions, Moody’s Investors Service said in a report. The rating agency said that Indian asset-backed securities (ABS) performance risks will remain elevated over the next 12 months, as weak economic conditions will continue to hurt borrowers’ ability to repay loans. “As payment moratoriums came to an end in August, collections in rated Indian ABS improved markedly in September and October, although they remain below pre-coronavirus levels,” says Dipanshu Rustagi, Moody’s Assistant Vice President. Indian asset-backed securities loan collection rates for our rated deals have improved since the end of coronavirus-related payment moratoriums, which shows that many borrowers have resumed repayments after lenders' grace periods finished. - economic times

🍒 Gradual phase-out of moratorium mitigates asset quality cliff for Indian banks: Moody’s : The gradual tapering of coronavirus relief measures will help prevent a spike in nonperforming loans for Indian banks, as the country faces an uneven recovery ahead, Moody’s Investor Service said on Thursday. "The gradual tapering of support measures will give borrowers time to adjust and enable banks to build loan-loss buffers, in turn reducing the risk of a sharp decline in banks' asset quality," said Rebaca Tan, Moody's Assistant Vice President. "Still, risks remain amid a likely uneven recovery in 2021 that remains vulnerable to setbacks, including any new wave of coronavirus infections," Tan added. - economic times

🍒 New dividend policy not to affect most NBFCs: Report : The new dividend distribution policy for non-banking lenders is unlikely to impact most of them as their payout ratios have been hovering at 10-20 for the past three years, according to a report. The Reserve Bank of India on December 9 issued a new draft dividend distribution policy for NBFCs to ensure financial discipline and transparency under which only those NBFCs that meet the prescribed prudential requirements on capital and asset quality will be allowed to pay dividends. The new payout norms assume importance as unlike banks, currently, there are no guidelines in place concerning the distribution of dividend by NBFCs. The RBI had on October 4 asked banks to not to pay dividend this year given their stretched balance sheets pummelled by the pandemic.- economic times

🍒 Muthoot Finance to raise ₹1,000 crore through NCDs : Muthoot Finance Ltd has announced its 24th series of public Issue of Secured Redeemable Non-Convertible Debentures of face value of ₹1,000 each (secured NCDs). The issue is with a base issue size of ₹100 crore, with an option to retain oversubscription of up to ₹900 crore aggregating up to tranche limit of ₹1,000 crore (issue). The issue opens on December 11 and closes on January 5, 2021, with an option to close on such earlier date or extended date as may be decided by the board of directors or NCD committee. - Business Line

🍒 Pull payments made on behalf of merchants: Acquirer banks should not push consumers to pay for services : The Reserve Bank of India (RBI) needs to move towards creating an environment whereby for pull payments effected on behalf of merchants, the acquirer banks/Payment Aggregators (PAs) are not allowed to push consumers to pay for a payment service, according to a study by an IIT Professor. Pull payments entail a recipient (for example a merchant) requesting payment. Ashish Das, Professor, Department of Mathematics, IIT-Bombay, in his study, ‘Charging Consumers for Merchant Payments’, emphasised that consumers have a relationship only with the core merchant and the issuer bank (that issues cards).The Reserve Bank of India (RBI) needs to move towards creating an environment whereby for pull payments effected on behalf of merchants, the acquirer banks/Payment Aggregators (PAs) are not allowed to push consumers to pay for a payment service, according to a study by an IIT Professor. Pull payments entail a recipient (for example a merchant) requesting payment. Ashish Das, Professor, Department of Mathematics, IIT-Bombay, in his study, ‘Charging Consumers for Merchant Payments’, emphasised that consumers have a relationship only with the core merchant and the issuer bank (that issues cards). - Business Line

🍒 Restricting foreign capital in banking sector a mistake: Abhijit Banerjee : Nobel laureate Abhijit Banerjee has said that restricting capital infusion in the banking sector to Indian capitalists is a mistake. “It is a wrong view that Indian capitalists are somehow better than foreign capitalists,” he said. “Foreign banks can bring in capital. Involving foreign banks in the Indian banking sector but restricting it to Indian ownership is bad,” he said.Stating that the Indian banking sector is in a ‘zombie’ state, he said, banks are half-dead with so much bad debt. “If the books are carefully examined they are not in good health and they are in red,” Banerjee said. “They are not lending as they don’t have capital. This capital can come from the foreign investors in the banking sector,” he said. - Business Line

🍒 Banks have been lending more to NBFCs: CARE Ratings : Banks have been lending more to non-banking financial companies (NBFCs), increasing their overall exposure to them, according to CARE Ratings. This comes in the backdrop of decline in both the total monthly funds raised by NBFCs from the primary market and the external commercial borrowings (ECBs) registrations in financial services. The credit rating agency assessed that banks’ outstanding exposure to NBFCs registered a growth of 42.5 per cent in absolute terms from September 2018 (₹5.5 lakh crore) to October 2020 (₹7.8 lakh crore). - Business Line

🍒 Equitas Small Finance Bank launches 3-in-1 account : Equitas Small Finance Bank, on Thursday, announced that it has launched a 3-in-1 account, which includes savings, trading and demat, to widen its product offerings and allows its customers to keep their banking and financial investments under one umbrella entity. The bank will provide stock broking and demat services through referral arrangement with brokerage firms for trading and depository services. “This product allows customers a secure seamless and convenient way to invest in their choice of investment instruments including equity, FDs, govt securities and mutual fund products. Customers can transfer money seamlessly between their bank account when they have a 3-in-1 account with us,” said Murali Vaidyanathan, President & Country Head- Branch Banking, Liabilities, Product & Wealth, Equitas Small Finance Bank in a press statement. - Business Line

🍒 First-year premium for life insurers down 27% in November : First-year premium for life insurance companies declined in November by almost 27 per cent after months of positive growth, with both private sector insurers and Life Insurance Corporation (LIC) of India registering a contraction in premiums. Data released by IRDAI revealed that first-year premium for life insurers in November fell by 26.93 per cent to ₹19,159.30 crore from ₹26,221.24 crore in November 2019. First-year premium for the period between April and November also contracted by 1.53 per cent to ₹1,66,662.97 crore as against ₹1,69,251.20 crore in the same period a year ago. - Business Line

🍒 PhonePe plans to fill 700 open job positions in 3-6 months : Online payment company PhonePe is planning to fill in 700 open job positions in the next 3-6 months in line with its business growth led by the accelerated adoption of digital payments across the country post the Covid 19 pandemic. “We have over 700 open positions which we aim to fill…we are hiring across functions in line with our business strategy and needs,” said Manmeet Sandhu, Chief People Officer, PhonePe. “In addition to this, we will be looking to expand our rural network which will involve leveraging locally available talent to service this network,” she added. “We are still in the process of closing out the numbers for next year, but our growth trajectory will likely continue at the same rate," she said in an interaction with ET. - economic times

🍒 IL&FS puts corporate loans worth Rs 5,000 crore on the block : IL&FS financial services arm IFIN has put NPA accounts of Essar Shipping, Reliance Naval & Engineering, Unitech, Parsvnath Developers, Ansal API among others on the block. Corporate loans of 70 companies worth Rs 5,000 crore have put been on the block and will be put through a bid process. The deal will be on cash consideration basis with the beleaguered group seeking one consolidated bid for the entire portfolio. Applicants have to submit binding bids by next month. IFIN is owed a principal amount of Rs 209 crores from Unitech Limited, Rs 174 crore from Parsvnath Developers, Rs 135 crore from Ansal Group, Rs 25 crore from Essar Shipping and Rs 5 crore from Reliance Naval. - economic times

🍒 India’s CPI to decelerate marginally to 7.3%: Morgan Stanley : India could see some easing pressure on inflation in November as compared to October as the country’s consumer price index or CPI could decelerate marginally, a Morgan Stanley research has said. We expect headline CPI to decelerate marginally to 7.3% year on year in November from 7.6% year on year in October. “High-frequency food prices suggest food inflation likely softened sequentially in the month, while we expect core inflation to remain largely steady,” the research said. In addition, favourable base effects should also support the moderation, the report added. - economic times

🍒 Nippon MF launches passive Flexicap FoF : Nippon Life India Asset Management has launched Passive Flexicap Fund of Fund, an open-ended fund of funds (FoF) scheme that will invest in units of ETFs/Index Funds of Nippon India Mutual Fund. The fund will be benchmarked to the Nifty 500 TRI. The new fund offering (NFO) will close on December 24. The minimum investment required is ₹5,000. Different parts of the market ― large-cap, mid-cap and small-cap ― perform at various points in time. It is difficult to predict which part of the markets would outperform. Hence, staying invested across market-caps may help generate potentially better returns over the long run. - Business Line

🍒 Central bank's proposals on dividend payouts weigh on state-owned NBFCs : Shares of state-owned REC, Power Finance Corporation (PFC), LIC Housing Finance, and M&M Financial Services (MMFS) fell around three per cent each on Thursday after the Reserve Bank of India (RBI) proposed to cap dividend payouts by non-banking financial companies (NBFCs). Under the new rules, the dividend payouts will be dependent upon factors such as capital adequacy, non-performing asset (NPA) ratio and leve­rage ratio from the next financial year. “Among the listed NBFCs, we expect PFC and REC to react negatively to the new rules as both the entities have a historic dividend payout of 45 per cent. As per new norms, they will be eligible for a 25 per cent dividend payout. Being high-dividend-yielding NBFCs had been one of the arguments in favour of these entities, which will be negatively affected by the new RBI rules,” said Emkay analysts Jignesh Shial, Anand Dama and Parth Sanghvi in a note. - Business Standard

🍒 ATM moment of banking services is here as lenders make apps open for all : Long after automated teller machines (ATM) were made interoperable for bank customers, the whole gamut of banking is becoming membership agnostic. Earlier this week, ICICI Bank created some buzz by announcing its banking app — iMobile Pay — would be free for all to use. A customer need not be with the bank but can link her bank account with a Unified Payments Interface (UPI) ID with ICICI Bank and start using it for all kinds of payments across all platforms. Much like how Google Pay is being used for paying bills and purchases through UPI. iMobile Pay can also be used to get credit cards, instant loans, and, if needed, a savings bank account with the ICICI Bank. In the coming days, the bank plans to introduce products such as fixed deposits, recurring deposits, mutual funds and insurances through the app. . - Business Standard

🍒 Late Payments: Banks blame fintechs for EMI bounces : Bankers have attributed the high bounce rates, in large part, to defaults at fintech lenders, whose collections are still below pre-Covid levels. Most banks claim their collection efficiencies stood well over 90% in the September quarter. The share of unsuccessful auto debit requests at 40.5% in November was a shade higher than the 40.1% seen in October, according to data released by the National Payments Corporation of India (NPCI) from its National Automated Clearing House (NACH) platform. o be sure, the data doesn’t account for EMI requests made to deposit accounts held within the same bank. Nonetheless, bounce rates of anything above 25% should continue to be a cause for concern as it would mean retail delinquencies remain well above pre-Covid levels. Of the 86.96 million debit requests for Rs 78,433 crore worth of payments made in November, 35.22 million requests for Rs 24,417 crore were declined. In other words, the bounce rate in value terms at 31.13% was a tad better than 32.27% a month ago. - financial express

🍒 Gold prices slide to Rs 49,191 per 10 gram on increased risk appetite : Gold prices dropped by 498 to Rs 49,191 per 10 gram in the Mumbai retail market on increasing risk appetite amid COVID-19 vaccine optimism. The precious metal traded under pressure as negotiations over further US fiscal stimulus dragged on and the dollar rose for a fourth straight session. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,059 plus 3 percent GST, while 24-carat 10 gram was Rs 49,191 plus GST. The 18-carat gold quoted at Rs 36,893 plus GST in the retail market. Silver prices declined Rs 792 to Rs 62,600 per kg from its closing on December 9.

🍒 Sensex snaps 5-day winning run, ends 144 points lower : The 30-share BSE index settled 143.62 points or 0.31 per cent lower at 45,959.88. The broader NSE Nifty fell 50.80 points or 0.38 per cent to 13,478.30. UltraTech Cement was the top loser in the Sensex pack, shedding around 3 per cent, followed by M&M, HDFC Bank, IndusInd Bank, Axis Bank and Reliance Industries. On the other hand, Nestle India, ITC, HUL and Kotak Bank were among the gainers.According to traders, profit-booking emerged at higher levels, dragging benchmark indices lower.UltraTech Cement was the top loser in the Sensex pack, shedding around 3 per cent, followed by M&M, HDFC Bank, IndusInd Bank, Axis Bank and Reliance Industries.On the other hand, Nestle India, ITC, HUL and Kotak Bank were among the gainers. According to traders, profit-booking emerged at higher levels, dragging benchmark indices lower.

🍒 Rupee settles 9 paise lower at 73.66 against US dollar : The rupee snapped its two-day winning streak to close 9 paise lower at 73.66 (provisional) against the US dollar on Thursday, tracking muted domestic equities and a rebound in the American currency. At the interbank forex market, the domestic unit opened at 73.68 against the US dollar and witnessed an intra-day high of 73.62 and a low of 73.77. The local unit finally closed at 73.66 against the American currency, registering a fall of 9 paise over its previous close..

10.12.2020: Today's Banking / Financial News

10.12.2020: Today's Banking / Financial News at a Glance

🍒 RBI lays down stringer dividend distribution formulae for NBFCs : The Reserve Bank of India has said that non-banking finance companies (NBFC) with minimum 15% capital adequacy and net non-performing assets (NPA) below 6% for three years will be eligible to declare dividend from this fiscal onwards. In a graded dividend payout format released on Wednesday, the regulator said that a better managed NBFC with less than 4% net NPA can still become eligible for dividend distribution even if the minimum capital and leverage norms are not met for the previous two years. These are part of a matrix where capital adequacy, leverage ratio, adjusted net worth and net NPA set the criteria for distributing the earnings with shareholders. Stronger entities can offer higher but with a cap of 50% of net profit for the accounting year for which the dividend is proposed. The dividend has to be paid only out of the current year's profit. "In order to infuse greater transparency and uniformity in practice, it has been decided to prescribe guidelines on distribution of dividend by NBFCs," RBI said. - economic times

🍒 ICICI opens new front with mobile app interoperability, other banks may follow : State Bank of India (SBI) will follow ICICI Bank's unprecedented move to open its mobile application to use by other bank's customers using the UPI platform, opening a new front in the battle for new customers and cheap deposits in the banking sector. ICICI on Monday announced that customers of any bank can link their bank account generate a UPI ID and start sending and receiving money to any bank account, payment app or digital wallet immediately. Moreover customers will also get instant access to the entire range of ICICI Bank’s banking services. Anup Bagchi, executive director, retail banking at ICICI said the bank hopes to benefit from new customer leads and ultimately deposits in the long run by allowing other bank customers to use its application. - economic times
 
🍒 Not viable to extend date of moratorium: RBI : The Reserve Bank of India (RBI), on Wednesday, told the Supreme Court that extending the date of the loan moratorium is “not viable”. Appearing before a three-Judge Bench, led by Justice Ashok Bhushan, the RBI, represented by senior advocate VGiri, referred to clause 3 of its August 6 circular for ‘Resolution Framework for Covid-19-related Stress’ to point out that lending institutions, guided by their respective board-approved policy, would prepare viable resolution plans for eligible borrowers. But lenders would also ensure that this resolution is provided only to borrowers stressed on account of Covid-19. - Businss Line

🍒 RBL Bank, ICICI Prudential join hands for bancassurance partnership : : RBL Bank and ICICI Prudential Life Insurance have joined hands under a bancassurance partnership to sell insurance policies to the bank's customers. As many as 398 RBL Bank branches across 28 states will distribute ICICI Prudential Life's protection and savings products, according to a joint press release issued on Wednesday. The alliance will enable over 8.7 million customers of RBL Bank to access and seamlessly purchase customer-centric protection and long-term savings products of the insurance company, it added. - economic times

🍒 SBI General, Mahindra Insurance in tie-up : SBI General Insurance has partnered with Mahindra Insurance Brokers to increase insurance penetration in rural areas. “This association will enable the company to provide health insurance cover to a significant number of people in tier 2 and 3 markets and generate employment,” said SBI General Insurance in a statement on Wednesday. SBI General is also associated with Mahindra Insurance Brokers Ltd (MIBL) for new cars, commercial vehicles, tractors and used cars, and provides vehicle Insurance with several add-ons. The two have also partnered in the digital space with PAYBIMA for affordable insurance solutions. - Businss Line

🍒 RTGS 24x7 to be launched on December 14 : The Reserve Bank of India (RBI), on Wednesday, said that RTGS (real-time gross settlement) 24x7x365 will be launched with effect from 00:30 hours on December 14. The central bank, in a statement, said India will become one of the few countries in the world to operate its RTGS system round-the-clock throughout the year. This comes within a year of operationalising NEFT (national electronic funds transfer) 24x7 by the Reserve Bank. The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ₹2 lakh with no upper or maximum ceiling. - Businss Line

🍒 Credit card: RBL Bank hopes to be back to pre-Covid levels on customer onboarding by Dec-Jan : Private sector lender RBL Bank hopes to continue with customer onboarding for its credit card division and touch pre-Covid levels by December or next month, but remains cautious about the segments it is acquiring new customers from. “On customer onboarding in credit cards, we will reach pre-Covid level either this month or latest by January,” said Harjeet Toor, Head -Retail, Inclusion and Rural Business, RBL Bank. The bank onboarded about 1.25 lakh new credit card customers last month against a monthly run rate of 1.3 lakh to 1.35 lakh customers before the Covid-19 pandemic. - Businss Line

🍒 Maruti Suzuki launches Smart Finance service for one-stop loan solutions : Maruti Suzuki India (MSIL), on Wednesday, has launched Smart Finance service for Nexa customers across 30 citiesfor seamless and faster solutions for customers. The Maruti Suzuki Smart Finance will offer comprehensive finance solutions online and aim to simplify and digitalise the customer’s car buying journey with a bouquet of financing options, the company said. The services include choosing the right finance partner, selecting the best suited loan product, completion of all finance-related formalities, and disbursal of the loan with just a few clicks. - Businss Line

🍒 Exim Bank, SIDBI to set up investment fund to provide loan support to SMEs : Export-Import Bank of India (Exim Bank) and Small Industries Development Bank of India (SIDBI) plan to jointly set up an Alternative Investment Fund (AIF) to provide equity and loan support to small and medium enterprises (SMEs), which could emerge as rising stars in the export firmament. The AIF is being floated to give effect to a scheme, announced in FY21 Union Budget, to be jointly anchored by the aforementioned government-owned financial institutions to extend support to SMEs in sectors such as pharmaceuticals, auto components and others for technology upgradation, research and development, and business strategy, among others. - Businss Line 

🍒 With conglomerates reluctant, PEs may be better source of capital for banks : It’s been two weeks since the Reserve Bank of India’s (RBI’s) internal working committee (IWC) report proposed the idea of allowing business conglomerates to own banks. Criticisms have far outweighed acceptance, even prompting the RBI governor to distance himself from the proposal recently. Amid the debate, it would be pertinent to ask if corporations would be willing to participate in the banking sector any longer. Barely one out of the 22 that had evinced interest when bank licensing opened up in 2016 seemed enthused today. At least part of the reason could be the more stringent scrutiny that a banking licence would entail. A finer reading of the IWC’s recommendation suggests that India may adopt norms similar to the US Federal Reserve model, which regulates conglomerate-led banks in the country. The US Bank Holding Companies Act, established in 1956, was designed to tightly regulate banks floated by industrial houses. Under these regulations, every other business or subsidiary other than the banking operations (which is directly monitored by Federal Reserve) also falls under the Fed’s supervision, and is subject to dual regulations and scrutiny. “The bedrock principle is that don’t let commerce into banking, but it’s okay to allow banking into commerce,” says Jeff Berman, partner, financial services regulatory group, Clifford Chance US LLP, a top-tier US law firm. US industrial houses have stayed away from the banking business ever since the law came into force. - Business Standard

🍒 New business premium of life insurers decline 26.93% YoY in November : After witnessing growth in new business premiums (NBP) for four straight months starting from July, life insurance companies saw their NBP decline almost 27 per cent in November, with state owned insurance behemoth Life Insurance Corporation (LIC) dragging the industry performance. In November, the NBP of the industry totaled Rs 19,159.31 crore, compared to Rs 26,221.24 crore in the same period last financial year (FY20). While private insurers saw their NBP decline 5.15 per cent to Rs 7,066.65 crore, LIC’s NBP declined more than 35 per cent to Rs 12,092.66 crore. In the same period last financial year, LIC had amassed NBP of Rs 18,770.56 crore. NBP is the premium acquired from new policies in a year. In the April – November period of FY21, NBP of life insurers declined by 1.5 per cent to Rs 1.66 trillion, as against Rs 1.69 trillion in the same period last financial year. LIC’s premium collection dropped 3.75 per cent to Rs 1.15 trillion from Rs 1.20 trillion in the same period but private insurers reported a growth of almost 4 per cent in NBP to Rs 51,004.23 crore, compared to Rs 49,078.27 crore. - Business Standard

🍒 HC seeks govt, RBI views on plea seeking regulation of Big Tech in finance : The Delhi High Court Wednesday sought response of the Centre, RBI, SEBI, IRDAI and National Payments Corporation of India (NPCI) on a PIL seeking a detailed legal framework for regulating operations of techfin companies such as Facebook, Google and Amazon in India's financial sector space. According to the petition filed by an economist, techfin entities are technology, telecommunications or e-commerce companies which have entered the financial sector to provide financial services and need to be regulated. A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the ministries of finance and law as also Reserve Bank of India (RBI), NPCI, Insurance Regulatory and Development Authority of India (IRDAI), Securities and Exchange Board of India (SEBI) and the Pension Fund Regulatory and Development Authority (PFRDA) seeking their stand on the plea by Resmi P Bhaskaran - Business Standard

🍒 RBL Bank and ICICI Prudential Life Insurance forge bancassurance partnership : RBL Bank and ICICI Prudential Life Insurance on Wednesday entered into a bancassurance partnership to offer an array of life insurance products to the Bank's customers. This alliance will enable more than 87 lakh customers of RBL Bank to access and seamlessly purchase customer-centric protection and long-term savings products of the Company and provide financial security to themselves and their families. RBL Bank will distribute ICICI Prudential Life's products through its network of 398 branches spread across 28 states besides it's internet and mobile banking touch-points. - Live Mint

🍒 ICICI bank fraud: Drivers, gardeners were directors in Deepak Kochhar and Dhoot’s companies. They didn’t know, says ED : A charge sheet filed by Enforcement Directorate (ED) last month in the ICICI Bank bribery scandal involving its former managing director Chanda Kochhar reveals how her husband Deepak Kochhar and Videocon Group chairman Venugopal Dhoot had appointed drivers, gardeners, office boys, and other junior employees as dummy directors in their companies. Statements of these employees, which are now part of the charge sheet, were recorded by the ED. Some of them have claimed that they never even heard about the companies in which they were made directors. HT has seen the charge sheet, filed on November 3. The ED charge sheet says Kesharmal Nensukhlal Gandhi, who worked as a cleaner at Dhoot’s bungalow in Ahmednagar since 1994, was director in IRCL (Indian Refrigerator Company Ltd). He told ED that he was “neither aware about the company IRCL, nor aware about his directorship in IRCL and others. He was also unaware about transactions carried out by the company”. Gandhi told ED he used to sign documents on the directions of Dhoot and hadn’t attended any board meetings of the company. - hindustantimes

🍒 Cabinet approves Rs 22,810 crore outlay for Atmanirbhar Bharat Rozgar Yojana : The Union Cabinet on Wednesday approved Rs 22,810 crore outlay for a new employment scheme that aims at encouraging businesses to do fresh hiring. Under the Atmanirbhar Bharat Rojgar Yojana, the government will for two years provide employee and employer contribution to the retirement fund for new hires by businesses and entities, Labour Minister Santosh Gangwar said. The scheme would till 2023 entail an outgo of Rs 22,810 crore and would benefit around 58.5 lakh employees. - moneycontrol.

🍒 Rupee settles 3 paise higher at 73.57 against US dollar : The rupee strengthened by 3 paise and settled for the day at 73.57 against the US dollar on Wednesday, supported by foreign fund inflows and heavy buying in domestic equities. Traders said weakening of the American currency in the overseas market also supported the local unit. At the interbank forex market, the domestic unit opened at 73.58 against the US dollar and witnessed an intra-day high of 73.49 and a low of 73.61. The local unit finally closed at 73.57 against the American currency, registering a rise of 3 paise over its previous close. 

🍒 Sensex hits new peak of 46,000 on FPI buying : Just three trading sessions after it hit 45,000-mark, the Sensex on Wednesday scaled a new peak of 46,000. Foreign portfolio investors kept up the momentum with net purchases of ₹3,564 crore.Sensex rose 1.09 per cent on Wednesday to close at 46,103. The broader index Nifty gained 1.02 per cent, or 136 points, at 13,529. Both the Sensex and Nifty have gained 80 per cent from the lows they hit in March due to the Covid crisis. 

🍒 Gold prices today fall sharply, silver rates tumble : Gold prices fell in Indian markets today as equity markets rallied across the world amid covid vaccine optimism. On MCX, February gold futures fell 0.8% to ₹49,691 per 10 gram while silver tumbled 1.4% to ₹64,251 per kg. Weighing on gold price is progress on vaccine front and weaker investor interest, say analysts. In the previous session, gold had ended 0.2% higher while silver had dipped 0.6%..

Thursday, 10 December 2020

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..