🍒 Five of 12 PSU bank stocks trade near face value : Five out of 12 public sector banks are trading near the face value of their equity shares on bourses regardless of a rally in stock benchmark indices, according to an analysis. Shares of state-run Indian Overseas Bank are even trading below the face value of Rs 10 per share. On the BSE, the stock closed at Rs 9.27 on Friday when the benchmark index Sensex closed at 40,509. The Chennai-based bank tapped the market first in September 2000 offloading part of the government’s stake at par or at the face value of Rs 10 per share. Remaining four public sector banks of Bank of Maharashtra, UCO Bank, Punjab & Sind Bank and Central Bank of India are trading near the face value of Rs 10 per share. Shares of Punjab & Sind Bank closed at Rs 10.81 per unit, Bank of Maharashtra’s at 11.29 per unit on Friday. Mumbai-based Central Bank of India is slightly better positioned with closing price of Rs 12.45 per share followed by Kolkata-based UCO Bank at 12.14 per unit. Religare Broking Ltd Chief Operating Officer Gurpreet Sidana said, “We’ve witnessed a remarkable recovery in the benchmark in the last few months but the PSU banking pack is still struggling. After the initial rebound, mostly PSU banking stocks are again hovering closer to their 52-week lows.” There are multiple overhangs on the sectors including asset quality concerns, subdued business environment and low credit offtake causing deterioration in stock prices, he said. Central Bank of India plans to mop up Rs 5,000 crore of equity capital through various modes, including follow on public offer and rights issue, to maintain its capital adequacy ratio. As per Basel III regulations, banks are required to maintain minimum common equity tier-1 (CET 1) ratio of 5.50 per cent plus capital conservation buffer (CCB) of 2.50 per cent in the form of equity capital, tier-1 ratio of 9.50 per cent and overall CRAR of 11.50 per cent. - financial express
🍒 Rajan, Acharya may be off mark: PSU banks need strategy and focus to survive, not privatisation as remedy : It is interesting that two of India's biggest brand-name economists, former Reserve Bank governor Raghuram Rajan and former deputy governor Viral Acharya, have spoken for the "re-privatisation" of public sector banks even as the nation debates a controversial couple of agriculture reform bills splitting the political class. As we shall see, the twain may well be inter-linked. As it happens, the rockstar economists (Acharya literally wields the guitar as well as an amateur musician) are officially ensconced back in their chairs in US academia. They may well be far removed from both India and its political economy though they do have their logic. They are speaking more from the orthodoxy of market economics in full-employment economies and its implicit ideological baggage in saying what they did. No doubt, in a globally integrated economy such as India with a substantial market to maintain, their words ought to carry weight. Reports on the paper the two economists have authored says a "select" few PSU banks may be privatised. It is not clear if they intend this only as part of a structured solution with a focus on ownership — which is not a bad idea — or whether they want a situation where all state-run banks are intended to be privatised. - first post
🍒 Digital payments soar manifold in 5 years to FY20: RBI : Concerted efforts by the Reserve Bank to move to a non/less-cash economy by pushing digital payments have begun to pay rich dividends as the volume of such payments has jumped manifold in the past five years, the latest data from the central bank showed. Between 2015-16 and 2019-20, digital payments have grown at a compounded annual growth rate of 55.1 per cent - from 593.61 crore in the year to March 2016 to 3,434.56 crore in the year to March 2020. In absolute terms, value has grown from Rs 920.38 lakh crore to Rs 1,623.05 lakh crore during this period, clipping at an annual compounded rate of 15.2 per cent. Giving a year-wise data, in 2016-17 digital payments jumped to 969.12 crore from 593.61 crore in the previous year in volume terms, while in value the same rose to Rs 1,120.99 lakh crore. - economic times
🍒 Govt may consider allowing GST deposit on cash basis: PwC report : The government may consider allowing India Inc to deposit GST on cash basis to help them tide over the liquidity woes during the COVID-19 pandemic, a PwC report said. It said while formalising its support strategy for the industry in the next phase, the government could also consider suspending GST payments for select sectors during the COVID-19 period. In its report titled 'Reimagining GST@3', PwC said cash liquidity support schemes that advance business continuity are the need of the hour. "The government has announced a timely budgetary support scheme in line with the relief packages of various developed nations. Despite these steps, much ground remains to be covered," it said. - economic times
🍒 RBI to move to next generation treasury application for managing forex, gold reserves : In a bid to improve its functioning, the Reserve Bank has decided to move to the Next Generation Treasury Application (NGTA) for managing the country's foreign exchange and gold reserves. The NGTA, according to the RBI, would be a web-based application providing scalability, maneuverability and flexibility to introduce new products and securities, besides supporting multi-currency transactions and settlements. The NGTA, for which the RBI has invited bids from eligible vendors, would be supporting various transactions in asset classes like Fixed Income (FI), Forex (FX), Money Market (MM) and Gold. "RBI proposes to implement the NGTA which would be used for managing the foreign exchange reserves in a more efficient way, mitigate risk, achieve operational efficiencies, dealing in various asset classes and reporting," the bid document said.- economic times
🍒 Registered Valuers Organisations: IBBI standardises meeting norms of Disciplinary Committee and Appellate Panel : Insolvency regulator IBBI has clamped down on varying practices in the conduct of meetings of the Disciplinary Committee (DC) and the Appellate Panel (AP) of the Registered Valuers Organisations (RVO), which are the frontline organisations for the development and regulation of valuation profession. It has come up with series of directions to be followed by the DC and AP of the RVO while conducting their meetings including stipulation that meetings be held only if there is an agenda and preferably through a video conferencing facility, keeping in view the current pandemic. Accordingly, the meeting of the DC will be held for considering the issue or disposal of a show cause notice to a member, said an IBBI circular. The meeting of an AP would be held to consider the issues raised in the appeal filed by the aggrieved against the order passed by the DC, the circular added. - Business Line
🍒 'Banks, NBFCs to witness increased polarisation,' says HDFC Securities. Here are the top picks : Despite an uptick in real economic activity and fresh disbursals, there has been a slower year-on-year credit growth. "Disclosures by select lenders and trends in non-food credit growth suggest this too. We expect banks/NBFCs with our coverage to report credit growth of 7.3/5.8% YoY vs. 8.2/7.1% in 1QFY21," says a report by HDFC Securities. The broker's report on banks and NBFCs state that the deposit growth is likely to have exceeded credit growth for their coverage banks, and they expect large private banks to have fared particularly well on this front. HDFC Securities expect the space to witness increased polarisation in the space. "Consequently, larger banks with sufficient capital, strong granular liability franchises, and a good asset quality track record are expected to emerge stronger," says the report by HDFC Securities. ICICI Bank (SoTP of ₹496), Axis Bank (SoTP of ₹619), and City Union Bank (TP of ₹196) are HDFC Securities top picks among the banks. CIFC (TP of ₹289) is their top pick in the NBFC space. - Live Mint
🍒 Irdai panel for lower entry-level capital for micro-insurance companies : An Irdai committee has suggested reduction in entry-level capital requirement for standalone micro-insurance companies to Rs 20 crore from the current Rs 100 crore with a view to accelerate expansion of this segment of insurance market in the country. The committee set up by the Insurance Regulatory and Development Authority of India (Irdai) to suggest steps to promote micro-insurance said that like other nations India too will need to attract multiple players if it wants to substantially increase insurance penetration. “This is all the more urgent in the current context of the COVID-19 pandemic when millions of Indians, especially in the informal sector, have lost their livelihoods, are now leading more insecure lives and are falling back into poverty,” the report of the committee said. It noted that for low-income families, calamities such as illnesses, accidents, death or the loss of assets often have very grave financial consequences. Such events can push these families deeper into poverty as their meagre resources get depleted. Many get drawn into debt traps as they borrow beyond their means, sell productive assets, take children out of school or put them to work, compromise on food, or leave sickness untreated, it said. - financial express
🍒 FPIs pump in net Rs 1,086 crore so far in October : Foreign portfolio investors (FPI) have invested Rs 1,086 crore on a net basis so far in October in Indian markets, tracking encouraging factors including improved GST collection, acceleration in economic activity and positive global cues. According to the depositories data, overseas investors pumped in a net Rs 5,245 crore into equities and withdrew Rs 4,159 crore from the debt market during October 1-9. This translated into a total net inflow of Rs 1,086 crore. In September, FPIs were net sellers at Rs 3,419 crore. - moneycontrol.com
🍒 Sensex, Nifty jump 4% last week; will the rally sustain? Here's what 10 top analysts say ; Market benchmarks logged gains for the seventh consecutive day in a row on October 9, the longest winning streak seen so far in 2020. The S&P BSE Sensex reclaimed mount 40K, while Nifty50 closed above 11900 levels and is on track to retest record highs by December 2020.For the week, the action was limited to benchmark indices as broader markets saw profit booking. The S&P BSE Sensex rose 4.6 percent while the Nifty50 was up 4.3 percent for the week ended October 9 compared to a 0.3 percent fall seen in the S&P BSE Midcap index, and a flat closing seen in the S&P BSE Small-cap index for the same period. The market is teeming with positivity. However, in-between profit-booking cannot be ruled out, experts believe. - moneycontrol.com
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