22.12.2020: Today's Banking / Financial News

22.12.2020: Today's Banking / Financial News at a Glance

🍒 Central Bank of India launches Rupay Select Debit Card : Central Bank of India on Monday launched a variant of contactless Debit Card – ‘RuPay Select’. Launched in association with the National Payments Corporation of India on the occasion of the bank’s 110th foundation day, the RuPay Debit Select Card will focus on customers’ lifestyle, fitness, rejuvenation, nutrition and personal care, the public sector bank said in a statement. Pallav Mohapatra, MD and CEO, Central Bank of India, said: “Customers with select card will enjoy benefits such as complimentary health check-ups, and lounge access at selected centres besides accidental cover of ₹10 lakh at no extra cost.” They would also be entitled for discounted health check-ups with the this National Common Mobility Debit Card (NCMC) which also facilitates offline transactions in both transit and as well as retail purchases. The Bank also launched FASTAG (for electronic toll collection) in association with OSTA. “Customers using the bBank’s FASTAG will not lose any interest by transmitting the funds into FASTAG account, instead, the customer will cross the tToll pPlaza with Central Bank of India FASTAG based on recharge amount blocked in his Ssavings account and the account will be debited on next day of transaction unlike other players having such product where the fund is transferred to a wallet by debiting account of the customer,” Mohapatra said. - Business Line

🍒 Canara Bank has exposure of ₹678 crore to Transstroy : Canara Bank has clarified that it has an exposure of ₹678.28 crore to Transstroy India Ltd which allegedly committed a bank fraud and is under liquidation. In a notice to the BSE, Canara Bank said that it has already made 100 per cent provision for the account in its books. Transstroy, a construction company, and its directors were booked by the CBI last week for an alleged fraud of ₹7,926 crore affecting a consortium of banks led by Canara Bank. The company was declared as willful defaulter by Canara Bank in December 2018. Canara Bank’s exchange notification said that Transstroy was enjoying limits from various Banks under Multiple Banking Arrangement from 2001. Subsequently, a consortium with Canara Bank as leader with 13 other banks was formed in 2013 and the total limit sanctioned was ₹4,765.70 crore and the share of Canara Bank is ₹678.28 crore. The account was declared as fraud and reported to RBI on February 10 this year. - Business Line

🍒 HDFC, ICICI, and SBI top three banks of 2020, says report : The BFSI Movers and Shakers 2020 Report by Wizikey, a PR- SAAS start-up, highlighted the top 100 banks in India and emerging BFSI models such as Wallets and UPI, Neobanks, NBFCs, Small Finance Bank, Payments Banks, among others, that have found acceptance and their respective sectoral leaders this year. Beyond the banking counterparts, one of the most muted sectors – insurance – also saw a massive shift in gears this year, considering their rise in popularity due to the after-effects of the pandemic, the report noted. According to the report, HDFC, ICICI, and SBI were the top three banks of 2020 (mentioned according to rank). The three banks that transformed themselves almost overnight to serve the Indian consumers and have also trumped their newer counterparts including Axis and Kotak Mahindra in both quantity and quality of news are ICICI, HDFC, and SBI. - Business Line

🍒 SC stay on loan accounts: FinMin says tough to assess recap of banks : The Finance Ministry has said it is finding it difficult to finalise the recapitalisation programme for public sector banks due to the Supreme Court stay on classification of loan accounts as non-performing assets. “Any amount can be thought of, if there is estimation of NPA. On account of the Supreme Court’s interim order, it is not possible as of now,” a senior government official told BusinessLine. In its order dated September 3, the apex court had said that the accounts that were not declared NPA till August 31, 2020 shall not be declared NPA till further orders. The six months loan moratorium period ended on August 31, under which borrowers were given the option to defer their EMI (equated monthly instalment). - Business Line

🍒 Banks ramp up cross-selling, aim to gain bigger share of customer's wallet : What you sell matters; how you do it matters even more. More than 80 per cent of Axis Bank’s retail assets are sourced from existing customers. And yet, last year, the bank made a fresh start with “Aarambh”, to enhance product personalisation and cross-selling. “It’s a first-of-its-kind initiative that provides both existing and potential customers with customised products using in-house proprietary algorithms involving multiple data sources,” explains Praveen Bhatt, executive vice-president and head (retail liabilities and direct banking channel) at Axis Bank. The focus at State Bank of India (SBI), too, is to ensure that the products being sold are aligned with the appetites of customers. SBI Chairman Dinesh Khara explains: “The income from cross-selling has grown 30 per cent year-on-year for the last three years. There is a separate customer value enhancement unit for this activity. The potential is huge and the ramp-up is significant.” - Business Standard

🍒 Insolvency and bankruptcy code (IBC) suspension extended till March 31 : Suspension of the insolvency and bankruptcy code (IBC) is being extended till March 31, 2021, finance minister Nirmala Sitharaman said at the Bangalore Chamber of Industry and Commerce virtual conference Monday. “Even the suspension of the IBC has been postponed even further from 25th of December… we've moved to say that it can be up to 31st March 2021,” she said.Sitharaman backed the suspension of IBC for nearly the full year since every industry had gone through major stress because of the pandemic. “So the entire year has had the IBC suspended, and rightly so, because every industry has gone through major stress because of the pandemic and nobody could be drawn the words insolvency which may have occurred during the pandemic,” Sitharaman said at the session with the industry in the preparations to the Union Budget. - economic times

🍒 Paytm Payments Bank has best tech for UPI payments, confirms NPCI report : Paytm Payments Bank Ltd (PPBL) has once again outperformed all major banks in India in terms of the success rate of UPI transactions. According to the latest report by the National Payments Corporation of India (NPCI), PPBL has the lowest technical decline rate at 0.02 per cent among all UPI remitter banks and 0.04 per cent among all UPI beneficiary banks. All other major banks have a way higher technical decline rate of around 1 per cent. This confirms the superiority of the in-house technology-infrastructure at Paytm Payments Bank and has been the key reason for its success. - Business Line

🍒 Domestic money transfer: BCFI wants govt to do away with GST : The Business Correspondent Federation of India (BCFI) wants the government to do away with the Goods and Service Tax (GST) imposed on senders, predominantly migrant workers, when they make a domestic money transfer to a rural area through Business Correspondents (BCs). Currently, BCs charge the senders 1 per cent of the money to be transferred as transaction charge. This includes 18 per cent GST. Sunil Kulkarni, CEO & Head, BCFI, said on the one hand one segment of the population is fully banked, with the tech-savvy among them accessing online funds transfer services such as the National Electronic Funds Transfer (NEFT) free of charge, but on the other hand, migrant labour in cities/ urban areas have to pay GST for sending money through BCs to their families in rural areas. - Business Line

🍒 RIL, PFC are top overseas borrowers: RBI data : Lured by higher liquidity and lower rates, and with the RBI relaxing the norms, Indian corporates have increasingly turned to overseas borrowings. Reliance Industries Ltd (RIL) and its arms been at the forefront in raising external commercial borrowings (ECBs) over the past few years. According to RBI data, the oils-to-telecom group collectively raised about $23.48 billion through ECBs between FY17 and September FY21. Based on the RBI’s monthly USD-INR exchange rate at the end of the respective financial years, the total borrowing in rupee terms comes to about ₹1.65-lakh crore. Of the total borrowing by the group, the share of holding company RIL alone stood at $17.27 billion, followed by Reliance Jio Infocomm ($5.25 billion), Reliance Sibur ($669 million) and Reliance Utilities & Power ($300 million). - Business Line

🍒 Kapil Wadhwan tells DHFL administrator his offer is higher than revised bids : Kapil Wadhawan, the former promoter of Dewan Housing Finance Corporation Ltd (DHFL), has sent a fresh missive to the administrator of the troubled mortgage financier, underlining that his proposal to fully repay all creditors is the best compared to the revised bids submitted for the resolution, and that it should be considered. “My settlement proposal dated December 13, 2020 provides for repayment of ₹91,158 crore to all the lenders as opposed to the next highest bid of only a sum of ₹36,646 crore,” he has written in a December 19 letter to DHFL administrator R Subramaniakumar, pointing out that the objective of the Insolvency and Bankruptcy Code (IBC) is maximisation of value for all stakeholders. - Business Line

🍒 ICICI Pru MF to launch Business Cycle Fund NFO : ICICI Prudential Mutual Fund has launched a open-ended equity scheme Business Cycle Fund, which will invest in equity and equity-related securities, with a focus on riding business cycles through dynamic allocation across sectors and stocks. The New Fund Offer opens on December 29 and closes on January 12. The fund will follow a top down approach right from monitoring macro indicators (global and domestic), identifying business cycle followed by determining suitable sectors, and selecting the stocks within these sectors. An ongoing business cycle may extend or shorten depending on the macroeconomic conditions and the fiscal and monetary policy response by the government and central banks during a business cycle. Such times can often provide appropriate opportunities for investment. - Business Line

🍒 Fundraising via bonds hits a peak at ₹7.45-lakh crore : Riding on low-interest rates and policy reforms by the Reserve Bank of India (RBI), Indian corporates have raised the highest-ever sum of 7.45-lakh crore through rupee bonds this year. This is 8.3 per cent higher than ₹6.87-lakh crore raised in 2019. A total of 5.12 lakh crore raised in 2018. With another 10 days for the year to end, companies are expected to raise another ₹20,000-25,000 crore. “Covid-19 had an impact in March and April, when the companies had restrained from raising funds through bonds, but then there was a sharp recovery in May. The reasons included an ample liquidity in the system, lower interest rates and RBI’s introduction of Targeted Long-Term Repo Operations (TLTRO), which helped a lot in terms of corporates to issue more bonds,” said Ajay Manglunia, Managing Director and head institutional fixed income at JM Financial. - Business Line

🍒 ADB, Northern Arc sign $40-million loan pact : The Asian Development Bank (ADB) on Monday announced that it has signed a $40-million loan (in Indian rupee equivalent) with Northern Arc Capital (NACL) to support the livelihoods of microfinance borrowers and micro, small, and medium-sized enterprises (MSMEs) in India. In a press release, the Manila-headquartered multilateral funding agency said that the loan is disbursed to Northern Arc as part of its ongoing Covid-19 response. The Chennai-based NBFC will use the loan proceeds to on-lend and provide guarantees to financial institutions and individual borrowers. It will also on-lend to affordable housing finance companies, the statement said. - Business Line

🍒 Centrum-BharatPe, Liberty group in race for beleaguered PMC Bank : Steel baron Sanjeev Gupta’s Liberty Group of the UK, the Jaspal Singh Bindra-led Centrum group and BharatPe combine, and two business families from Mumbai and Hyderabad have expressed interest for beleaguered Punjab and Maharashtra Co-operative Bank (PMC Bank). This is the first time that corporates, non-banking financial companies, and high-net-worth individuals have shown eagerness in taking over an urban-cooperative bank (UCB). The development comes a month after a Reserve Bank of India’s Internal Working Group report made a case for corporate ownership of banks. The winner for PMC Bank will continue to run it as an UCB. Automatic conversion of the UCB licence to that of an universal bank is ruled out,” said a source. Suitors for the bank comes as a relief for its depositors. - Business Standard

🍒 The pandemic bill for banks: Severe credit losses, operation turbulence : The 10th edition of McKinsey’s Global Banking Annual Review says the pandemic will present a two-stage problem for banks — first, severe credit losses, likely through late 2021, which almost all banks and banking systems are expected to survive; then, amid a muted global recovery, banks will face a profound challenge to ongoing operations that may persist beyond 2024. Depending on the scenario, $1.5 trillion to $4.7 trillion in cumulative revenue could be forgone between 2020 and 2024. - Business Standard

🍒 CMS Info Systems plans to invest upto Rs 1,300 crore on ATM ramp-up : Baring Private Equity-backed CMS Info Systems (CMS), plans invest upto Rs 1,300 crore to scale up its managed ATM business and cash management business in India. Rajiv Kaul, vice-chairman and wholetime director, CMS Info System, said that starting with a capital expenditure of Rs 180-200 crore, the company expects to create 2,000 jobs. Out of them, 70 per cent of will be blue-collar job opportunities, and the balance 30 per cent white-collar ones. The investment will be funded through internal accrual and debt. The span for investment would be over seven years, Kaul said. For the time being, the firm does not envisage specific investment from its owner Baring for these plans, he added. Sion Investment Holdings, an affiliate of Baring Private Equity Asia, holds 100 per cent in the company. - Business Standard

🍒 Gold prices edge higher for fifth day to Rs 50,308 per 10 gm; silver jumps Rs 673 a kg : Gold prices continued their northward march for the fifth straight day by Rs 200 to Rs 50,308 per 10 gram in the Mumbai retail market on rupee depreciation and volatile global cues. The precious metal price pared earlier gains tracking rebounding dollar on safe-haven appeal as a new coronavirus strain in Britain led to sell-off in most assets class. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,082 plus 3 percent GST, while 24-carat 10 gram was Rs 50,308 plus GST. The 18-carat gold quoted at Rs 37,731 plus GST in the retail market. Silver prices climbed by Rs 673 to Rs 67,192 per kg from its closing on December 18.

🍒 Markets crash on mutant virus fears : News reports of a fast-spreading virus strain in the UK stopped the bulls in their tracks on Monday. In the last hour of the trading session, the Sensex fell by 1,406 points or 3 per cent to close at 45,553. The Nifty index declined by 432 points to close at 13,328. It was the worst crash in the indices in seven months. Reliance Industries, ICICI Bank, HDFC Bank and HDFC were the biggest drags on the Sensex that led the index to fall over 500 points. The Bank Nifty index fell by 1,258 points or 4.1 per cent at 29,456. 

🍒 Rupee slips 17 paise to 73.73 against US dollar : The rupee declined 17 paise to 73.73 against the US dollar in opening trade on Monday amid weak domestic equities and strengthening American currency in the overseas market. However, unabated foreign fund inflows and lower crude prices supported the rupee and restricted the fall, forex traders said. At the interbank forex market, the local unit opened sharply lower at 73.74 against the greenback. It was trading 17 paise down at 73.73 in early deals. In the previous session, the rupee strengthened by 3 paise to close at 73.56 against the US dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.46 per cent at 90.37.

21.12.2020: Today's Banking / Financial News

21.12.2020: Today's Banking / Financial News at a Glance

🍒 Bank of Baroda completes integration of erstwhile Dena, Vijaya banks with itself : State-run Bank of Baroda on Sunday said it has completed integration of 3,898 branches of erstwhile Vijaya Bank and Dena Bank with itself. In a first three-way amalgamation, Vijaya Bank and Dena Bank were merged with Bank of Baroda from April 1, 2019. The bank has completed the integration of 1,770 erstwhile Dena Bank branches in December 2020, and had earlier completed the integration of 2,128 erstwhile Vijaya Bank branches in September 2020, the lender said in a release. "We have successfully completed integration of erstwhile banks with Bank of Baroda amidst the challenges faced under the COVID environment. We are happy to once again welcome all our esteemed customers and request them to avail full suite of Bank of Baroda's products and digital solutions," the bank's managing director and CEO Sanjiv Chadha said in the release. - economic times

🍒 PSU banks to raise Rs 25,000 crore in next 3 months: DFS Secy : Public sector banks (PSBs) are planning to raise about Rs 25,000 crore through a mix of equity and debt in the next three months to support credit pick up and meet regulatory requirement. In the last few months lenders including State Bank of India, Canara Bank and Punjab National Bank (PNB) have raised about Rs 40,000 crore from the market, Financial Services Secretary Debasish Panda told in an interview. "Banks have been able to raise a lot of money from the markets. About Rs 40,000 crores have been raised by the public sector banks both in the form equity and also AT1 and Tier II bonds. We will expect another 20,000-25,000 during the remaining part of the financial year," he said. Earlier this month, Canara Bank raised Rs 2,000 crore while Punjab National Bank (PNB) raised Rs 3,788.04 crore through qualified institutional placement (QIP). RBI Governor Shaktikanta Das has been advising banks to proactively raise capital and not wait for a difficult situation to arise due to the ongoing COVID-19 crisis. - economic times

🍒 India needs multiple bad banks to clean balance sheets of lenders, get credit growth back : Industry body CII on Sunday said it has urged the government to consider creation of multiple bad banks to address the adverse impact of non-performing assets (NPAs) accumulated by public sector banks in the recent past, that got further accentuated during the pandemic. The Confederation of Indian Industry (CII) in its pre-budget memorandum recommended that the government consider enabling Foreign Portfolio Investors (FPIs) and Alternative Investment Funds (AIFs) to purchase NPAs. "In the aftermath of Covid, it is important to find a resolution mechanism through a market determined price discovery. With huge liquidity both globally and domestically, multiple bad banks can address this issue in a transparent manner and get the credit cycle back in action," CII President Uday Kotak said. - economic times

🍒 Gold imports dip 40% in Apr-Nov to $12.3 bn : Gold imports, which have a bearing on the current account deficit, fell 40 per cent to $12.3 billion during April-November due to fall in demand in the wake of the COVID-19 pandemic, according to data from the commerce ministry. Imports of the yellow metal stood at $20.6 billion in the corresponding period of 2019-20. The imports, however, recorded a year-on-year growth of 2.65 per cent in November to $3 billion. Silver imports during April-November 2020 too dipped 65.7 per cent to about $752 million. The decline in gold and silver imports has helped in narrowing the country's trade deficit, difference between imports and exports, to USD 42 billion during April-November 2020-21 as against USD 113.42 billion in the year-ago period. - economic times

🍒 FPIs invest Rs 54,980 cr in Indian equities in Dec so far : Foreign portfolio investors (FPI) pumped in Rs 54,980 crore in Indian markets in December so far amidst availability of excess liquidity in global markets and expectation of fresh stimulus package by various central banks, among others. As per the depositories' data, FPIs invested a net Rs 48,858 crore into equities and Rs 6,122 crore into debt segment between December 1 and 18.This took the total net investment to Rs 54,980 crore during the period under review.In November, the total net investment of FPIs stood at Rs 62,951 crore. Himanshu Srivastava, associate director - manager research, Morningstar India said, "availability of excess liquidity in global markets and low interest rates diverted foreign flows into emerging markets like India." - economic times

🍒 EPFO net new enrolments rises 56% to 11.55 lakh in October : Net new enrolments with retirement fund body EPFO rose by 56 per cent to 11.55 lakh in October compared to 7.39 lakh in the same month last year, according to its latest payroll data, providing a perspective on formal sector employment amid the coronavirus pandemic. The net payroll additions, however, have registered a slight dip in October compared to 14.19 lakh in September this year, according to a statement by the Labour Ministry. Provisional payroll data released by the EPFO last month had shown that net new enrolments stood at 14.9 lakh in September this year. - economic times

🍒 PayPal faces Rs 96 lakh penalty for violating India's anti-money laundering processes : American online payment gateway giant PayPal has been imposed a Rs 96 lakh penalty by the FIU for alleged contravention of the anti-money laundering law and accused of "concealing" suspect financial transactions and abetting "disintegration" of India's financial system. PayPal, which began India operations in November 2017, said it was fully committed to follow due processes and is "carefully reviewing the matter". The company has also been charged with "defeating and frustrating" the tenets of public interest and the provisions of the Prevention of Money Laundering Act (PMLA), which aims to keep the country's financial system safe from economic crimes, terrorist financing and black money transactions. Calling the contraventions as "deliberate and wilful", the Financial Intelligence Unit (FIU) in a scathing 27-page order issued on December 17 held the company guilty on three broad counts, the fundamental being its failure to register itself as a "reporting entity" with the federal agency as mandated under the PMLA.- economic times

🍒 Corporate Insolvency: IBBI may rein in engagement of third party consultants : Insolvency professionals appointed under the Insolvency and Bankruptcy Code (IBC) may not find it all that easy to contract out their duties to third party consultants or advisors (including non Insolvency Professional Entity) during corporate insolvency resolution process (CIRP) if the latest IBBI discussion paper is anything to go by. The Insolvency and Bankruptcy Board of India (IBBI), which has released the discussion paper on ‘Engagement of “professionals” in a corporate Insolvency Resolution Process’, has invited public comments on several questions including whether only a person having an authorisation from the regulator of a profession to practice the profession may be appointed as a “professional” by an IP in a CIRP. - Business Line

🍒 Pensioners can submit life certificates till February 28: Union Minister Jitendra Singh : In a major relief to central government pensioners amid the COVID-19 pandemic, the date for submission of life certificate has been extended up to February 28 next year, Union Minister Jitendra Singh said on Sunday. "This decision has been taken considering all the sensitivities to avoid pandemic risk emanating from gathering of crowds at the pension disbursing banks," said Singh, the Minister of State for Personnel. In addition to this, he said, the pensioners above the age of 80 years were given an exclusive window from October 1 onward to submit their life certificate so as to avoid rush likely to happen from the opening date of November 1. - financial express

🍒 M-cap of eight of top-10 most valued companies zoom, HDFC, TCS lead gainers : Eight of the top-10 most valued domestic companies together added Rs 1,25,229.25 crore in market valuation past week in-line with a bullish broader market trend, with HDFC, TCS and Bajaj Finance emerging as the biggest gainers. Over the past week, the BSE benchmark gained 861.68 points or 1.86 per cent. Only Reliance Industries Limited and Hindustan Unilever Limited witnessed erosion from their market valuation, rest eight companies including HDFC Bank and Infosys made gains. HDFC’s valuation zoomed Rs 32,992.86 crore to Rs 4,46,174.05 crore, making it the biggest gainer. The market capitalisation of Tata Consultancy Services (TCS) jumped Rs 29,700.13 crore to Rs 10,74,157.65 crore. Bajaj Finance added Rs 24,642.81 crore to Rs 3,16,481.88 crore to its valuation. - Business Line.

20.12.2020: Today's Banking / Financial News

 20.12.2020: Today's Banking / Financial News at a Glance

🍒 RBI Central Board meets to take stock of economy amid global challenges : The Central Board of the Reserve Bank of India (RBI) met on Friday to review the current economic situation in the backdrop of global and domestic challenges and various areas of operations of the central bank. The board reviewed customer education initiatives and resolution of customer complaints, and discussed the draft Report on Trend and Progress of Banking in India, the RBI said in a statement. “The board noted the change in the Bank’s financial year from July-June to April-March and the changes in the unit of presentation from millions/billions to lakhs/crores,” the statement said. - Business Standard

🍒 SBI-led consortium pursue UK bankruptcy order against Vijay Mallya : A consortium of Indian banks led by the State Bank of India (SBI) returned to the High Court in London for a bankruptcy application hearing against liquor tycoon Vijay Mallya, as they pursue the recovery of debt from loans paid out to his now-defunct Kingfisher Airlines. At a virtual hearing before Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs on Friday, both sides deposed retired Indian Supreme Court justices as expert witnesses on Indian law in support of their arguments for and against a bankruptcy order against Mallya in the UK. While the banks argued a right to waive their security over the Indian assets involved in the case in order to recover their debt in the UK, lawyers for the 65-year-old businessman argued that the funds in question involved public money held by state-owned banks in India which precluded them from such a security waiver. "As a commercial entity, a bank has a right to exercise its commercial wisdom to decide what it wants to do with its security, noted barrister Marcia Shekerdemian, arguing on behalf of SBI and others. - Business Standard

🍒 Government exploring setting up bad bank, all other options : The government is exploring all options, including setting up of a bad bank, to improve the health of the country's banking sector, Economic Affairs Secretary Tarun Bajaj said on Friday. He also said the government has recapitalised public sector banks and continue to pump in capital as per requirements. "We are looking at various options, including the option you mentioned (of bad bank), and it is still in the works... The RBI has been asking us, and we ourselves also feel that we need to recapitalise. We have recapitalised to a large extent and this year too, we have kept some money for recapitalisation so that commitment is there...," he said. - Live Mint

🍒 IIFL Home, ICICI Bank join hands for affordable housing, MSME loans : IIFL Finance on Saturday said its home loan subsidiary has tied up with ICICI Bank to provide affordable housing and MSME loans. "IIFL Home Finance Ltd...and ICICI Bank have entered into a sourcing and servicing arrangement to partner in extending credit to the affordable housing loans & MSME loans (loan against property)," IIFL Finance said in a regulatory filing. Under the tie-up, IFL Home will originate and service customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing and in turn, ICICI Bank will provide funding to these customers, it added. Definitive agreements for the arrangement, including the sourcing agent agreement and service provider agreement were executed between IIFL Home and ICICI Bank on December 18, the filing said. - economic times

🍒 Indian banks pursue UK bankruptcy order against Vijay Mallya : A consortium of Indian banks led by the State Bank of India (SBI) returned to the High Court in London for a bankruptcy application hearing against liquor tycoon Vijay Mallya, as they pursue the recovery of debt from loans paid out to his now-defunct Kingfisher Airlines. At a virtual hearing before Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs on Friday, both sides deposed retired Indian Supreme Court justices as expert witnesses on Indian law in support of their arguments for and against a bankruptcy order against Mallya in the UK. While the banks argued a right to waive their security over the Indian assets involved in the case in order to recover their debt in the UK, lawyers for the 65-year-old businessman argued that the funds in question involved public money held by state-owned banks in India which precluded them from such a security waiver. "As a commercial entity, a bank has a right to exercise its commercial wisdom to decide what it wants to do with its security,” noted barrister Marcia Shekerdemian, arguing on behalf of SBI and others. - economic times

🍒 Canara Bank exposure to Transstroy consortium lending at Rs 678 crore : State-run Canara Bank on December 19 said its exposure to Transstroy India Ltd is over Rs 678 crore under a consortium lending arrangement and the borrower was declared as a wilful defaulter earlier in 2018. The company is under the process of liquidation, it said. In a clarification, Canara Bank said the bank's exposure to the Transstroy India is of Rs 678.28 crore contrary to news claiming it to be an alleged fraud of Rs 7,926 crore. "In this regard, it is clarified that the company was enjoying limits from various banks under multiple banking arrangement from 2001. Subsequently, a consortium with Canara Bank as leader with 13 other banks was formed in 2013 and the total limit sanctioned was Rs 4,765.70 crore and the share of Canara Bank is only Rs 678.28 crore," it said in a regulatory filing. - moneycontrol.

🍒 IDBI Bank raises Rs 1,435 cr from 44 investors via issue of equity shares : IDBI Bank has raised Rs 1,435 crore through an issue of equity shares to 44 qualified institutional investors, according to a regulatory filing. The bank had targeted to raise Rs 2,000 crore (base size Rs 1,000 crore and green-shoe option of Rs 1,000 crore) through the QIP issue at a floor price of Rs 40.63 apiece.The QIP committee of the board of directors at its meeting held on December 19, 2020 approved the issue and allotment of 3,71,808,177 equity shares to 44 eligible qualified institutional buyers at the issue price of Rs 38.60 per share, IDBI Bank said in a regulatory filing. The shares were issued at a discount of 5 per cent to the floor price of Rs 40.63 apiece, it said. The QIP issue had opened on December 15 and closed on December 18, 2020. - Business Standard

🍒 PSBs may find it hard to raise money on asset quality, governance concerns : Public sector banks (PSBs) would find it difficult to raise capital from private investors owing to asset quality concerns and a delay in implementing governance reforms, say experts. While the banks have cleaned up books and the space has seen consolidation after the merger exercise, the impact of big-ticket frauds of the past and the bad-loan burden remain an issue. This is reflected in the less-than-enthusiastic response to the recent Qualified Institutional Placements (QIPs) of Punjab National Bank and IDBI Bank, say two executives with merchant banks involved in the capital raising plans. Technically, IDBI Bank is a private sector lender, but is considered a public sector entity for the purpose of assessment. - Business Line

🍒 CBI registers cases against Transstroy for alleged bank fraud, conducts raids : The Central Bureau of Investigation has registered a case against Hyderabad-based infrastructure company Transstroy (India) Ltd and its directors for alleged bank fraud estimated at more than ₹7,926 crore. Following a complaint by Canara Bank, which along with its consortium partners had extended credit facilities to the infra firm, the investigating agency has registered a case against the company and named its Chairman and MD, Cherukuri Sridhar, and additional directors, Rayapati Sambasiva Rao, former MP, and Akkineni Satish, in the case. - Business Line

🍒 Rising inflation is of concern: HDFC Chief Economist : Inflation has been rising and is at over 7 per cent as against the RBI mandated 6 per cent. This is a matter of concern as it has gone up substantially over the past three months, said Abheek Barua, Chief Economist, HDFC Bank. This means that if one is expecting more help from the RBI, it may become difficult to come by as there will be liquidity pressure, he said. “The fiscal deficit has gone for a toss. The government had set a target of 3.5 per cent of GDP for Centre and 3 per cent for the States. This is now at 6.5 per cent for the Centre and 4.5 per cent for States. Together it is at 11 per cent, which will be dangerous if not brought down,” he stated. - Business Line

🍒 Piramal, Oaktree slug it out as race for debt-laden DHFL intensifies : The race to acquire troubled mortgage financer DHFL intensified after Oaktree Capital and Piramal made detailed presentations to lenders through the day. Bank officials said they (bidders) had gone into exhaustive explanations, and the work might carry on into one more session before they finish work. SBI Caps, process advisor, also made a presentation. The valuers – JLL and IBSA – are likely to present assessments at the next session on Saturday. All the offers have been made with several conditions, and the lenders will have to take a call by considering their net present value. One banker privy to proceedings said the offers made by the bidders had many conditions attached. This needs to be put in simple terms to make the offers comparable for lenders to decide which of the two is better. Lenders are expected to vote next week. - Business Standard

🍒 Companies that undertook mergers are now stuck with tax credit issue : Several companies that had initiated mergers are now facing issues in recovering tax credits due to delays in getting necessary approvals and conclusion of the process after the lockdowns disrupted the timelines. Tax credits on the amount paid to revenue authorities when the process is on are getting stuck as the tax department undertakes a detailed scrutiny in merger cases which take long to conclude.For some of the larger companies, the amount stuck in tax credit runs into hundreds of crores, say insiders. People in the know said that hundreds of companies — both with external mergers or intra-group—have been affected by this delay. Tax credit is a refund that can be set off against future tax liabilities. - Business Line

🍒 Why shouldn’t all LVB merger petitions be transferred to Bombay HC: Supreme Court : The Supreme Court on Friday sought response from various shareholders and others on why all the petitions related to merger of Lakshmi Vilas Bank (LVB) with DBS Bank India, pending before different high courts, should not be transferred to the Bombay High Court. RBI has sought transfer of all the petitions to the Bombay HC to avoid multiplicity of proceedings and conflicting judgments. Justice MM Shantanagoudar issued notice to various shareholders including AUM Capital Markets and Indiabulls Housing Finance, among others. It posted the matter for further hearing in January. Currently five petitions challenging the LVB merger scheme with DBS Bank, issued by the central government on November 25, are being heard by four different HCs of Madras, Bombay, Karnataka and Delhi. The amalgamation scheme has already come into force from November 27. - financial express

🍒 Honda shuts 23-year-old Greater Noida car unit : Honda Cars India Ltd (HCIL) has decided to pull the plug on production at its Greater Noida plant in Uttar Pradesh, sources said on Saturday. The automaker, which is a wholly-owned subsidiary of Japanese Honda Motor Co, had set up the Greater Noida plant in 1997. Industry sources said the plant would, however, continue to house the company's corporate head office, spare parts division and research and development (R&D) centre among other functions. Meanwhile, the company declined to comment on the matter. - economic times

🍒 As Sensex rallies 800 points in a week, these 20 stocks in BSE500 index rose 10-40% : The record rally in the market continued this week as well. The Nifty50 closed above 13,700 levels while the S&P BSE Sensex had a touch-and-go-moment with 47,000. The S&P BSE Sensex rallied 861 points or 1.87 percent while the Nifty50 was up 1.83 percent for the week ended December 18 compared to 1.6 percent gain seen in the S&P BSE Midcap index and 1.2 percent rise in the BSE Smallcap index in the same period. Even though the broader market underperformed, there was plenty of action seen in individual stocks. There are about 20 stocks in the BSE500 index that rose 10-40 percent in just 5 trading sessions.

🍒 Gold prices jump nearly 2% this week to Rs 50,305/10 gm, bias bullish for short term : Gold prices edged lower to settle at Rs 50,305 per 10 gram on December 19 as participants trimmed their long position as seen by the open interest. The precious metal ended the week with a gain of Rs 980 or 1.99 percent for the week. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,899 plus 3 percent GST, while 24-carat 10 gram was Rs 50,108 plus GST. The 18-carat gold quoted at Rs 37,581 plus GST in the retail market. Silver prices gained Rs 50 to Rs 66,519 per kg from its closing on December 17..

19.12.2020: Today's Banking / Financial News

 19.12.2020: Today's Banking / Financial News at a Glance

🍒 Bank credit grows by 5.73%, deposits by 11.34% : Bank credit grew by 5.73 per cent to Rs 105.04 lakh crore while deposits increased by 11.34 per cent to Rs 145.92 lakh crore in the fortnight ended December 4, the RBI data showed. In the fortnight ended December 6, 2019, bank credit had stood at Rs 99.35 lakh crore and deposits at Rs 131.06 lakh crore. In the previous fortnight ended November 20, credit grew by 5.82 per cent to Rs 104.34 lakh crore and deposits by 10.89 per cent to Rs to Rs 143.70 lakh crore.In October, non-food credit growth decelerated to 5.6 per cent compared to a growth of 8.3 per cent in the same month of the previous year.Growth in loans to agriculture and allied activities accelerated to 7.4 per cent in the month from a growth rate of 7.1 per cent last year.Credit to industry contracted by 1.7 per cent in October 2020 as compared with 3.4 per cent growth in October 2019.Growth in loans to the services sector accelerated to 9.5 per cent in October 2020 from 6.5 per cent in the same month of the previous year. - economic times

🍒 PNB QIP issue falls short of target by 46 per cent : State-owned Punjab National Bank (PNB) has raised a little over 54 per cent of the targeted fund mop-up through QIP, which closed on Friday with Rs 3,788.04 crore in the kitty. Private sector IDBI Bank too closed its QIP without disclosing the amount raised. PNB had planned to raise up to Rs 7,000 crore through qualified institutional placement (QIP) that had opened on Tuesday (December 15). The capital raising committee of the board of directors of the bank has its meeting held on December 18, 2020, passed the resolution to declare the closure of the QIP today (December 18) pursuant to the receipt of applications from eligible qualified institutional buyers, PNB said in a regulatory filing. - Business Line

🍒 Govt exploring setting up bad bank, all other options: DEA Secretary : The government is exploring all options, including setting up of a bad bank, to improve the health of the country's banking sector, Economic Affairs Secretary Tarun Bajaj said on Friday. He also said the government has recapitalised public sector banks and continue to pump in c apital as per requirements. "We are looking at various options, including the option you mentioned (of bad bank), and it is still in the works... The RBI has been asking us, and we ourselves also feel that we need to recapitalise. We have recapitalised to a large extent and this year too, we have kept some money for recapitalisation so that commitment is there...," he said. - Business Standard

🍒 PMC Bank gets four investment proposals, says RBI : Punjab and Maharashtra Cooperative (PMC) Bank has received four investment proposals, the RBI said on Friday while extending the restrictions imposed on the crisis-hit lender to March 31 to enable it to finalise the reconstruction plan. In September 2019, the RBI had imposed restrictions on the fraud-hit multi-state urban cooperative bank, including on withdrawals by customers, following a scam. Depositors had held several protests demanding their money back. Last month, PMC had invited expression of interest (EoI) from potential investors for investment or equity participation in the bank for its reconstruction. The last date for submission of EoIs by potential investors was kept as December 15. - economic times

🍒 Bad loans set to rise in H2 of FY21 despite improving outlook: Axis Bank : Despite improving economic conditions, private sector lender Axis Bank sees bad loans rising and said it will continue to be conservative. “Collection efficiency has been in the range of 95-97 per cent. We saw payments bouncing in September (when the EMI moratorium came to an end) but since then, we have seen improvement month-on-month,” said Sumit Bali, president, retail lending and payments, Axis Bank. “While the stress is lower than projections, it would be higher than what we saw last year because of the pandemic. But it is getting better for us. However, Q3 and Q4 will see some slippages (in the retail book).” He said the bank has surpassed pre-Covid levels in secured loans. “The unsecured part of the business continues to at 60-70 per cent of pre-pandemic level. We are conservative on the unsecured part and would want to see some more series of data points before we start going back to the pre-pandemic level,” he added. - Business Standard

🍒 Too much fall in short term rates poses threat to financial stability: RBI minutes : The Monetary Policy Committee (MPC) that voted unanimously to keep interest rates to ensure economic revival has raised red flags on short-term interest rates falling below the desired levels raising the risk of financial instability. The MPC members also warned that rising pricing power of oligopolistic businesses and commodity prices could narrow the room available to continue with accommodative monetary policy even as concerns over the fragility of economic revival remain. “Liquidity, credit and monetary aggregates will need to be closely monitored with an eye on macro-financial stability that can be enervated when short-term borrowing costs fall below the operational policy rate. If this results in persistence of negative real rates for too long, it can adversely affect savings, lend support to mispricing of financial asset prices and encourage excessive leveraging,” said Mridul K Saggar.- economic times

🍒 Rising inflation is of concern: HDFC Chief Economist : ur Bureau Inflation has been rising and is at over 7 per cent as against the RBI mandated 6 per cent. This is a matter of concern as it has gone up substantially over the past three months, said Abheek Barua, Chief Economist, HDFC Bank. This means that if one is expecting more help from the RBI, it may become difficult to come by as there will be liquidity pressure, he said. “The fiscal deficit has gone for a toss. The government had set a target of 3.5 per cent of GDP for Centre and 3 per cent for the States. This is now at 6.5 per cent for the Centre and 4.5 per cent for States. Together it is at 11 per cent, which will be dangerous if not brought down,” he stated. - Business Line

🍒 PayU to offer Google Pay tokenised payment flow for merchants : PayU, an online payments solutions provider, has collaborated with Google Pay, a leading digital payments app, to introduce tokenised payments flow for merchants. With this collaboration, PayU’s merchants can offer Google Pay users the option to use their debit cards, credit cards, or Google Pay UPI to make repeated payments without having to physically share their card details. According to the joint official release, the card information is tokenised, and the digital token is linked to the phone, allowing Google Pay users to make repeat payments seamlessly and securely. It also added that during checkout, users can avail one-click payment experience as they do not have to re-enter the payment data. The OTP is read automatically, and the payment is processed instantaneously, without redirections to third party sites (3D secure). - Business Line

🍒 RBI central board reviews current economic situation : The central board of the Reserve Bank of India (RBI), on Friday, reviewed the current economic situation in the backdrop of global and domestic challenges and various areas of operations of the RBI, including the customer education initiatives and resolution of customer complaints. The board meeting, chaired by Governor Shaktikanta Das, noted the change in the bank’s Financial Year from July-June to April-March, and the changes in the unit of presentation from millions / billions to lakh / crore, the central bank said in a statement. - Business Line

🍒 CBI registers cases against Transstroy for alleged bank fraud, conducts raids : The Central Bureau of Investigation has registered a case against Hyderabad-based infrastructure company Transstroy (India) Ltd and its directors for alleged bank fraud estimated at more than ₹7,926 crore. Following a complaint by Canara Bank, which along with its consortium partners had extended credit facilities to the infra firm, the investigating agency has registered a case against the company and named its Chairman and MD, Cherukuri Sridhar, and additional directors, Rayapati Sambasiva Rao, former MP, and Akkineni Satish, in the case. - Business Line

🍒 Sipadan Investments (Mauritius) sells 2.17% stake in IDFC : After selling the shares in the open market, Sipadan holds 7.30 per cent stake in IDFC, as per the company’s regulatory filing. IDFC is registered with the Reserve Bank of India as an ‘non-banking finance company — investment company’. It mainly holds investment in IDFC Financial Holding Company Ltd, which is a non-operative financial holding company. IDFC FHCL in turn holds investments in IDFC FIRST Bank Ltd and IDFC Asset Management Company Ltd. As at September-end 2020, the government was the single largest shareholder in IDFC, with 16.37 per cent stake.- Business Line

🍒 Bids for DHFL still under evaluation : The Committee of Creditors (CoC) for the troubled Dewan Housing Finance Corporation Ltd (DHFL) on Friday evaluated the bids by Oaktree Capital, Piramal Capital and Housing Finance Ltd (PCHFL) and the Adani Group for buying the company. There was no word yet on the fate of the bids as the CoC meeting was in progress at the time of going to press. Voting on the corporate insolvency resolution process (CIRP) is expected to take place next week. Lenders are evaluating the bids based on four quantitative parameters — upfront cash recovery; net present value of the cash recovery; equity allotment; and infusion of funds in the corporate debtor; and two qualitative parameters — track record of the resolution applicant and key managerial personnel. Lenders are keen on ensuring a smooth resolution of the debt-ridden housing finance company. They want to iron out all wrinkles to ensure that the CIRP does not face last minute legal challenges like it did previously. - Business Line

🍒 Premature rollback of RBI policies could derail nascent growth: RBI Governor Shaktikanta Das : RBI Governor Shaktikanta Das voted for status quo at the last bi-monthly monetary policy review arguing that premature rollback of policies undertaken to mitigate the impact of the pandemic would be detrimental to nascent growth and recovery, minutes of the meeting showed on Friday. All members of the Monetary Policy Committee (MPC) — Shashanka Bhide, Ashima Goyal, Jayanth R Varma, Mridul K Saggar, Michael Debabrata Patra and Shaktikanta Das — had voted for maintaining status quo in the policy review announced on December 4. - financial express

🍒 Markets extend winning run to 6th session; Sensex ends at record high : After opening at its lifetime intra-day high of 47,026.02, the 30-share BSE index pared some gains to finish at 46,960.69, up 70.35 points or 0.15 per cent. Similarly, the broader NSE Nifty rose 19.85 points or 0.14 per cent to 13,760.55 -- its new closing record. Infosys was the top gainer in the Sensex pack, rising around 3 per cent, followed by Bajaj Auto, SBI, ICICI Bank, HCL Tech, Titan and Asian Paints. On the other hand, IndusInd Bank, ONGC, HDFC Bank, Maruti and Bajaj Finserv were among the laggards.

🍒 Rupee ends 3 paise up at 73.56 against US dollar : The rupee appreciated by 3 paise to close at 73.56 (provisional) against the US dollar on Friday amid sustained foreign fund inflows and positive domestic equities. Traders said weakness in the American currency in the overseas market supported the domestic unit. At the interbank forex market, the local unit opened at 73.55 against the greenback and witnessed an intra-day high of 73.49 and a low of 73.57.

🍒 India's forex reserves down by $778 million to $578.568 billion : The country's foreign exchange reserves declined by $778 million to $578.568 billion in the week to December 11, RBI data showed on December 18. In the previous week, the reserves had touched a lifetime high of $579.346 billion after increasing by $4.525 billion. In the reporting week, the reserves declined due to a fall in foreign currency assets (FCAs), a major component of the overall reserves. FCAs dropped by $1.042 billion to $536.344 billion, as per the weekly data by the Reserve Bank of India (RBI). 

🍒 Gold price rises for fourth day in a row to Rs 50,108 per 10 gram; silver up by Rs 50 a kg : Gold prices jumped for the fourth straight day by Rs 101 to Rs 50,108 per 10 gram in the Mumbai retail market on subdued global cues and a flat rupee. The precious metal price was supported by the weakness in dollar and expectation of a stimulus package for the US economy. The bullion metal ended the week with a gain of Rs 1,062 or 2.17 percent for the week. The rate of 10 gram 22-carat gold in Mumbai was Rs 45,899 plus 3 percent GST, while 24-carat 10 gram was Rs 50,108 plus GST. The 18-carat gold quoted at Rs 37,581 plus GST in the retail market. Silver prices gained Rs 50 to Rs 66,519 per kg from its closing on December 17..

17.12.2020: Today's Banking / Financial News

17.12.2020: Today's Banking / Financial News at a Glance

🍒 Disinvestment will now gain a lot of momentum: Finance Minister Sitharaman : Finance Minister Nirmala Sitharaman on Tuesday said the pace of disinvestment will now gain a lot of momentum, and those which have already found cabinet approval will be taken up with all earnestness.Speaking on Day 1 of ASSOCHAM Foundation Week, via video conferencing, Sitharaman said "Disinvestment will be happening, corporatisation of not just the defence, DRDO related labs *but also banks* - where I want them to run a lot more professional, they should also be able to raise money from the market," she said. Sitharaman said that the Union Budget for 2021-22 would emphasise on sustaining high public expenditure on infrastructure to revive the economy.. - Business Standard

🍒 Banks must focus on asset quality, capital for monetary policy impact: RBI : The credit channel of monetary policy transmission in India is robust, however, its effectiveness is hampered by asset quality of issues of banks, an RBI working paper on “asset quality and credit channel of monetary policy transmission in India” revealed. Hence, for monetary policy actions to have their full impact, banks need to strengthen their capital position and address quality issues.While asset quality issues have an impact on the credit growth of the economy, better capital position of banks can negate the effect. “Controlling asset quality, in the short-run, the credit channel of monetary transmission of public sector banks is stronger relative to that of private sector banks”, the RBI working paper said. - Business Standard

🍒 Regulatory Sandbox: RBI relaxes norms for applicantsRegulatory Sandbox: RBI relaxes norms for applicants : The Reserve Bank of India (RBI) has reduced the net worth requirement for applicants for entry to the Regulatory Sandbox (RS) to foster innovation in financial services. Further, the central bank has allowed partnership firms and Limited Liability Partnership (LLPs) to participate in RS. RS refers to the live testing of new products or services in a controlled/ test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing. As per the modified enabling framework, an entity seeking entry to RS shall have a minimum net worth of ₹10 lakh as per its latest audited balance sheet against the existing ₹25 lakh - Business Line

🍒 Union Bank of India raises Rs 500 cr by issuing Basel III compliant bonds : State-owned Union Bank of India on Tuesday said it has raised Rs 500 crore debt capital by issuing Basel III compliant bonds. The bank has allotted unsecured, subordinated, non-convertible taxable perpetual fully paid-up Basel III compliant debt instruments in the nature of debentures aggregating to Rs 500 crore on December 15, 2020, Union Bank of India said in a regulatory filing.To comply with Basel-III capital regulations, the banks need to improve and strengthen their capital planning processes.These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks. Shares of Union Bank of India on Tuesday closed 1.03 per cent lower at Rs 33.50 apiece on the BSE. - Business Standard

🍒 PNB QIP issue opens; to raise ₹7,000 crore : Punjab National Bank (PNB) has launched its Qualified Institutional Placement (QIP) issue on Tuesday, seeking to mop up about ₹7,000 crore. The capital-raising committee of the bank, which met on Tuesday, had approved the floor price of ₹37.35 per share for the QIP. The committee will next meet on Friday to consider and determine the issue price for the equity shares, including the discount, to be allotted to Qualified Institutional Buyers, said PNB in a filing with the stock exchanges. - Business Line

🍒 Stress predates Covid: Bankers tell Supreme Court : The Reserve Bank of India (RBI) on Wednesday said in the Supreme Court that there has not been a single case of Covid-related financial stress to which banks have shown an “apathetic” attitude. A three-judge Bench led by Justice Ashok Bhushan was hearing several pleas by industry and business sectors, including power and real estate, to extend the moratorium or even waive the interest on their debts due to losses incurred during the pandemic. The Indian Banks Association, represented by senior advocate Harish Salve, said the pleas extend beyond the financial stress caused by the pandemic. He asked whether some of these sectors have placed on record anything to reveal how wobbly they were even before the pandemic. The court will resume the hearing today. - Business Line

🍒 NPCI adds reloadable wallet feature in RuPay cards for offline transactions : RuPay contactless cards have been enabled with an offline feature for retail payments on a pilot basis to ensure seamless transactions in areas of low connectivity. The cards also have a reloadable wallet facility, whereby customers can store money and use that for day-to-day transit payments. The wallet feature, too, could be used to make payments despite facing connectivity issues at point-of-sale machines.This will boost the adoption of digital payments in the country, especially when the government has been pushing RuPay cards by nudging banks to promote these as the first option. In a statement on Wednesday, the National Payments Corporation of India (NPCI), the umbrella body for payments and settlement, said these features would augment the transaction experience for new RuPay contactless cardholders and revolutionise the card payments ecosystem. - Business Standard

🍒 Lakshmi Vilas Bank will finally delist from bourses on December 18 : Lakshmi Vilas Bank (LVB) has decided to delist. The Bank, which was amalgamated with DBS Bank India last month, said today that the trading in its equity shares will be withdrawn (delisted) with effect from December 18, 2020 pursuant to a gazette notification dated November 25, issued by Department of Financial Services, Ministry of Finance. It may be noted, the scheme of amalgamation (LVB with DBS Bank India) was implemented under the special powers of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949, India. After the Cabinet approval on November 25, the scheme was notified and came into effect on November 27. - Business Standard

🍒 IndusInd Bank promoters get 1 month extension to infuse remaining capital : Private lender IndusInd Bank on Wednesday said Sebi has granted one-month extension for its promoters to infuse residual capital in lieu of conversion of warrants, issued to them last year, worth over Rs 2,695 crore into equity. IndusInd Bank had issued convertible warrants to its promoters–IndusInd International Holdings ltd (IIHL) and its subsidiary IndusInd Ltd (IL) on July 6, 2019 under the composite scheme of arrangement for a total amount of Rs 2,695.26 crore for 1,57,70,985 share warrants. The promoters had paid Rs 673.82 crore towards warrant subscription for price — 25 per cent of the warrant price of Rs 1,709 per share. “An amount of Rs 2,021.44 crore was to fall due on January 5, 2021, for conversion of warrants into equity shares,” the bank said. In view of the present uncertain times due to disruption caused by the COVID-19 pandemic, the bank had, at the request of IIHL and IL, approached Sebi for extension in time for payment of balance amount, it added. - financial express

🍒 Axis Bank says report alleging Rs 44,000 crore exposure to SREI Group 'grossly inaccurate' : Axis Bank on December 15 said that it followed underwriting practices and approval processes while extending loans to Srei Equipment Finance Ltd and Srei Infra Finance Ltd. In a notice to the stock exchanges, the bank said that its outstanding exposure to Srei group is Rs 800 crore as opposed to Rs 44,000 crore alleged by web portal Scams Breaking. "The bank has complied with its underwriting practices and approval processes for any exposure taken in relation to SREI Equipment Finance Limited and SREI Infra Finance Limited. Axis Trustee Services Ltd acts in its fiduciary capacity as a trustee and/or custodian and charges registered by it is not a reflection of the exposure of Axis Bank Ltd," it said. - moneycontrol.

🍒 Cyber security, data protection must to promote financial inclusion, says RBI Governor Shaktikanta Das : Issues concerning cyber security and data protection must be addressed to gain confidence of the excluded section in use of technology, which is necessary for promoting financial inclusion, Reserve Bank Governor Shaktikanta Das said on Wednesday. “Technology, though being a great enabler, can also lead to exclusion of certain segments of society,” Das said in his keynote address at a webinar on ‘Investing in Investor Education in India: Priorities for Action’, organised by the NCAER. The RBI Governor added that it was imperative to build trust in formal financial services among the hitherto excluded population. - Business Standard

🍒 Credit bureaus, PCR to help improve credit flow: RBI Governor : Access to credit and cost of credit need to be addressed by lesser reliance on collateral security and greater cash-flow-based lending to improve the credit-to-GDP ratio, according to Reserve Bank of India Governor Shaktikanta Das. In this regard, Das observed that credit bureaus and the proposed Public Credit Registry (PCR) framework are expected to improve the flow of credit as well as credit culture. As per RBI data, scheduled commercial banks’ credit as a per cent of GDP came down to 50.99 per cent in FY20 from 51.51 per cent in FY19. “India, with a large section of population in the working age group, is already the third-largest economy in the world in terms of purchasing power parity and is aiming to become a $5-trillion economy. “...Among all the prerequisites for achieving demographic dividend and accelerated growth, quality of human resources, greater formalisation of economy, a higher credit-to-GDP ratio and greater financial inclusion are the differentiating factors that would elevate our economy to the desired level,” Das said at a webinar organised by the National Council of Applied Economic Research. - Business Line

🍒 Yes Bank could face significant asset quality stress in coming quarters: Macquarie : Private lender Yes Bank could face near term asset quality issues as the pandemic continues to ravage a large part of the formal and informal economy. A report issued by Macquarie Capital which recently met the Yes Bank management, states that the lender could see stress in its exposure to the real estate and hotel industry. “There is going to be a substantial increase in stress in the next 2 quarters as they have large exposure to the real estate and hotel industry where there are likely to be defaults,” said Suresh Ganapathy, associate director, Macquarie Capital. Despite the asset quality stress the management claimed that they had front loaded provisions and don’t see substantial dip in capital ratios. - economic times

🍒 Monetary policy transmission of PSU banks stronger than private lenders: RBI paper : The monetary policy transmission of state-owned banks in the short-run is stronger than their counterparts in the private sector, and can be improved further with capital infusion, said a RBI working paper. The credit channel of monetary policy transmission is robust in India and its efficacy can be reinforced by better capital position of banks, said the working paper on 'Asset Quality and Credit Channel of Monetary Policy Transmission in India: Some Evidence from Bank-level Data'. "Controlling for asset quality, in the short-run, the credit channel of monetary transmission of public sector banks is stronger relative to that of private sector banks," it said. The Reserve Bank of India said the views expressed in the paper are those of the authors and not of the central bank.- economic times

🍒 To revive scam-hit PMC Bank, 3 entities submit letter of intent : A Mumbai-based financial services group is among the three entities that are understood to have submitted letter of intent (LoI) to revive the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank. The last date for the submission of LoI to the bank’s Administrator was December 15. The Administrator, AK Dixit and his team, are weighing the pros and cons of the LoIs. Based on their recommendations, the Reserve Bank of India (RBI) will take a call on which entity is best placed to revive the bank and commence regular day-to-day operations. As the aforementioned process is expected to take a few months, the central bank is expected to extend the validity of its Directions, currently valid up to December 22, by three months. According to banking sources, the financial services group, which has submitted its LoI, is headed by the former India head of a foreign bank. - Business Line

🍒 NBFCs seek relaxation in eligibility to recover loans under SARFAESI Act : Non-banking financial companies (NBFCs) have sought relaxation in eligibility to recover loans under the SARFAESI Act from the government. In the pre-Budget meeting with Finance Minister Nirmala Sitharaman, the Finance Industry Development Council, a representative body for NBFCs, has suggested lowering the minimum ticket size of Rs 50 lakh for loans eligible to be recovered by NBFCs under SARFAESI Act. The request has been made considering the recovery of small-ticket loans given to MSMEs, and proposes to bring parity in recovery of soured loans by banks and non-bank lenders, said Raman Aggarwal, co-chairman of the industry body. - Business Standard

🍒 Insurance funds should invest in low-rated instruments: SBI chairman : To make the debt capital market more vibrant, the long-term liabilities with insurance and pension sector need to be channeled effectively by allowing them to invest in low-rated instruments rather than just AAA and AA papers, said State Bank of India (SBI) Chairman Dinesh Kumar Khara. Speaking at the CII Partnership Summit, Khara said, as of now such funds are only into AAA and AA papers. “But I think these funds can be made available to low grade papers also. This is perhaps the needs of the hour if we want to create infrastructure, we have to ensure this money has to flow into infrastructure, which we have seen happen across the globe,” he said. - Business Standard

🍒 EPFO settles 52 lakh COVID-19 claims, disburses Rs 13,300 cr: Gangwar : Retirement fund body EPFO has settled 52 lakh COVID-19 non-refundable advance claims, and disbursed Rs 13,300 crore so far, Labour Minister Santosh Gangwar said on Wednesday. In March, the government had allowed over 6 crore subscribes of EPFO to withdraw an amount not exceeding their three months basic pay and dearness allowance from their EPF account in view of the lockdown to fight the pandemic.Speaking at Assocham Foundation Week programme, Gangwar said EPFO has settled 52 lakh COVID-19 withdrawal claims and disbursed Rs 13,300 crore to subscribers during the pandemic.He noted that the country has faced the pandemic with brave face. The Centre had launched the Pradhan Mantri Garib Kalyan Yojana (PMGKY) on March 26 to help the economically weaker sections cope with the pandemic.- Business Standard

🍒 As bitcoin rally roars, Indian banks look to cash in on opportunities : Bitcoin’s rally in 2020, rising 1.5 times so far this year, has piqued investors’ and financial services providers’ interest. And Indian banks are taking note as the crypto currency nears its all-time high of $20,000. They are now option like providing finance to crypto exchanges, loans against bitcoin and so on, to cash in on this opportunity. The sharp bitcoin rally this year has been attributed to several developments in the past month. The most prominent among them is decision of PayPal, the largest payment company by market cap, to allow the transfer, purchase, sales and settlements of bitcoins on its platform. Following this announcement, PayPal’s market cap rose to $252 billion, higher than most major international banks. Only JP Morgan has a higher m-cap at $366 billion and its Chairman Jamie Dimon has reversed his stand on bitcoin and decided to serve crypto exchanges as banking clients. Other players, too, are looking to capture a slice of the pie. Singapore-based DBS bank has set up an integrated exchange for bitcoins. Institutional investors like hedge funds, too, have jumped on the bandwagon, with one such investor buying around $500 million worth of coins. Added to these factors is China’s decision to launch a pilot for its central bank backed digital yuan as its official crypto currency. - Business Standard

🍒 PNB share price plunges 8% a day after QIP opens : Shares of Punjab National Bank (PNB) plunged more than 8 percent in the morning trade on BSE on December 16, a day after the lender's qualified institutions placement (QIP) opened. PNB's QIP opened on December 15 with the floor price set at Rs 37.35 per share. The bank aims to raise Rs 7,000 crore through the offer.

🍒 Sensex, Nifty capture new heights on positive global cues : The BSE Sensex settled 403.29 points or 0.87 per cent higher at 46,666.46, while the NSE Nifty climbed 114.85 points or 0.85 per cent to 13,682.70 -- record closing for both the benchmarks. Both the indices also marked their all-time intra-day highs of 46,704.97 and 13,692.35, respectively. In the Sensex pack, HDFC, ONGC, Bharti Airtel, Titan, Asian Paints, Mahindra and Mahindra and TCS were the prominent gainers. On the other hand, ICICI Bank, IndusInd Bank, NTPC, UltraTech Cement, Tech Mahindra and SBI were among the major laggards. 

🍒 Rupee settles 5 paise higher at 73.58 against US dollar : The rupee appreciated 5 paise to close at 73.58 (provisional) against the US dollar on Wednesday, as sustained foreign fund inflows and strong domestic equities strengthened investor sentiment. At the interbank forex market, the rupee opened at 73.49 against the US dollar and witnessed an intra-day high of 73.48 and a low of 73.60. The local unit finally closed at 73.58 against the American currency, registering a gain of 5 paise over its previous close.

🍒 Gold prices today rise for second day in a row, silver rates edge higher : Gold and silver prices today edged higher in India following an overnight rally in global markets. Hopes of rollout of more US stimulus have supported the recent bounce in gold and silver. On MCX, February gold futures gained 0.26% to ₹49,571 while silver futures rose 0.6% to ₹65,230 per kg. In the previous session, gold had jumped ₹530 or 1.1% per 10 gram while silver had surged 2%..