🍒 Bank credit may grow 7% YoY in Q2; NBFC disbursals to pick up QoQ : Banks may register around 7% credit growth year on year (YoY) in the quarter ended September and non-banking financial companies (NBFCs) may see a pick-up in disbursements, said analysts. Asset quality is expected to remain stable as the moratorium, in effect through much of the quarter, would have saved stressed accounts from turning bad. The Supreme Court being standstill on non-performing asset (NPA) classification will also keep a lid on lenders’ bad-loan numbers. “We expect banks/NBFCs within our coverage to report credit growth of 7.3/5.8% YoY vs. 8.2/7.1% in 1QFY21,” HDFC Securities said in a recent note, adding, “Deposit growth is likely to have exceeded credit growth for our coverage banks, and we expect large private banks within our coverage to have fared particularly well on this front.” Analysts at the broking firm said they would watch disbursals under the credit guarantee scheme, collection efficiency trends and early-bucket delinquencies. Bank-level commentary on the utilisation of the Covid-related stress resolution framework and additional provisions related to the pandemic will also be closely tracked. Besides bank announcements, the markets are waiting for judicial outcomes related to the classification of accounts as NPA and the levy of compound interest in case of accounts under moratorium. - financial express
🍒 Gross NPAs of banks may jump to 11.5% by end of this fiscal, says rating agency CARE : Indian banks are likely to restructure around 4-5 percent of the overall bank credit outstanding while the Gross NPA (non-performing assets) ratio is likely to be 11-11.5 percent by end of FY21, CARE Rating said in a note on Tuesday. Restructuring refers to relaxing the repayment terms of borrowers. This is done either by cutting interest rates, providing a loan moratorium or extending the repayment period. Banks need to set aside a higher amount as provisions for restructured loans. This will impact their profitability. “Further, the asset quality data post the Covid-19 lockdown is uncertain due to a developing regulatory scenario; multiple stakeholder objectives and moratorium computation with various firms have varying ways of computing moratorium,” said the rating agency in the note. The GNPA ratio of SCBs stood at 8.2 percent in Q1FY21 against 9.5 percent in Q1FY20. Scheduled Commercial Banks’ asset quality has seen some improvement (GNPA reduction) due to recoveries and higher write-offs.-moneycontrol
🍒 BoB may consider 50:50 split between staff at branches, WFH employees : State-owned Bank of Baroda (BoB) may consider adopting a model in the next few years where it will deploy 50 per cent of its employees at the branches and the balance would work from home, its Managing Director and CEO Sanjiv Chadha said. "I think it is quite possible that over the next 4-5 years, BoB is looking at having a workforce, only 50 per cent of which may be fully full-time employed at branches and the balance would be working from home," Chadha said at an HR conclave organised by the Indian Banks' Association (IBA). Currently, 80 per cent of the bank's staff is deployed at the branches. In July, State Bank of India's then chairman Rajnish Kumar said the lender would institute 'work-from-anywhere (WFA)' at the bank. The bank expects to save Rs 1,000 crore from it. Chadha further said that currently, not all customers are coming to the bank branches. - Business standard
🍒 SBI Card kick-starts festive season offers with cashback, discounts across various brands : SBI Card on Tuesday said it has kick-started festive season offers in line with the changing shopping trends and customers will be offered discounts as well as cashback across a host of brands. With over 1,000 offers across 2,000 cities, SBI Card endeavors to bring customers a rewarding shopping experience on their festive season purchases, it said in a release. The festive offers that star
ted from October 1, will run till November 15, 2020. "This year we have curated over 1,000 offers, with national and local merchants, both in store and online, across 2,000 cities, to enable our cardholders great benefits across all the categories. "In addition, to make festive purchases more affordable, SBI Card customers can avail EMI purchase facility at over 1.3 lakh stores," said Ashwini Kumar Tewari, MD & CEO, SBI Card.. - economic times
🍒 SBI’s core banking operations hit by connectivity issues : State Bank of India (SBI) on Tuesday said all delivery channels (except ATMs and POS machines) will be affected as intermittent connectivity issues have delayed making its Core Banking System (CBS) available to its customers. SBI has a multi-channel delivery model, which includes digital, mobile, ATM, internet, branches and business correspondent (BC) outlets. CBS is an IT platform that networks all the operations of a bank, including branches, ATMs, POS, etc., enabling a customer to transact from any branch of the bank or seamlessly transact digitally. “We regret the inconvenience caused and request you to bear with us. Normal service will resume soon,” SBI said. - Business Line
🍒 Karnataka Bank Q2 net rises to ?119 crore : Karnataka Bank registered a net profit of ?119.35 crore in the second quarter of FY21 against a profit of ?105.91 crore in the corresponding period of FY20, recording a growth of 12.69 per cent during the period. The net interest income of the bank increased to ?574.87 crore in the second quarter of FY21 against ?498.72 in Q2 of FY20. The fee-based income of the bank stood at ?174.63 crore (?233.45 crore) during the period. Speaking to BusinessLine after the meeting of the board of directors of the bank, which was conducted through videoconferencing to approve the financial results for Q2 on Tuesday, Mahabaleshwara MS, Managing Director and CEOof the bank, said the lender was able to effectively navigate the Covid-affected first half of FY21 by mainly focusing on containing the interest expenses - Business Line
🍒 RBI’s ?1-lakh crore long-term repo operation will push credit growth, say analysts : The ‘on-tap’ targeted long-term repo operation (TLTRO), which the Reserve Bank of India (RBI) will conduct, for a total amount of up to ?1-lakh crore can help push up credit growth, according to experts. As exposure under the scheme is exempt from LEF (large exposure framework) norms, this will open up more investment opportunities for banks, according to State Bank of India’s research report “Ecowrap”. “The ?1-lakh crore on-tap TLTRO window is a good measure by RBI, especially ahead of festival season...The previous TLTROs were intended to remove mismatches in liquidity or their (non-banking finance companies and microfinance institutions) asset liability, whereas this window will open avenues for lending and help create demand in the festival season,” said CH SS Mallikarjuna Rao, MD & CEO, Punjab National Bank. - Business Line
🍒 Deepak Kochhar produced before PMLA court, remanded to ED's custody till Oct 17 : Seeking further custody of businessman Deepak Kochhar in a money laundering case, the Enforcement Directorate (ED) Tuesday produced him before the special Prevention of Money Laundering Act (PMLA) court here. The couple- Deepak and wife Chanda, the former ICICI Bank chief executive and Videocon Group chairman, Venugopal Dhoot are accused in a money-laundering case registered more than a year and half ago by the ED. Defence counsel, Vijay Aggarwal, argued that the federal agency cannot seek Kochhar's custody as he still requires post-discharge care after being hospitalised for Covid-19. - economic times
🍒 Mastercard partners Indian start-up Signzy for global rollout of Video KYC : Mastercard, a global technology company in the payments industry, has partnered with Signzy, a RegTech startup based in India, for global rollout of Signzy’s video-based KYC (Know Your Customer) solution for its banking customers. With this partnership, Mastercard customers will benefit from a completely paperless, remote and secure onboarding solution for end-users. It maybe recalled that Reserve Bank of India (RBI) had in January this year amended its KYC norms allowing banks and other lending institutions regulated by it to use Video based Customer Identification Process (V-CIP), a move which will help them onboard customers. Signzy’s Video KYC solution will enable end-users to complete and submit their KYC application from the safety and security of their homes. This would be 99 per cent faster than the traditional paper-based KYC process. Signzy is an Artificial Intelligence-powered Robotic Process Automation platform for financial services.. - Business Line
🍒 With more innovations, ATM networks may see rebound in FY22 : Amid rise in digital payments, the number of ATMs in the country may continue to decline until the end of this fiscal due to the consolidation of public sector banks and macro factors, including the economic slowdown, but could resurface with more functionalities in FY22. ATM operators also remain hopeful of an increase in interchange fees, which, they believe, will be a boost to the sector. “If the government and RBI want ATM infrastructure, especially in the rural areas, they will have to consider a hike in interchange fees,” noted a spokesperson of industry body Confederation of ATM Industry (CATMi), adding that there is sufficient infrastructure in urban areas, along with digital payments. Anurag Nigam, Head of ATM-managed services, India and Philippines, FIS, also said an increase in interchange fee will act as natural incentive for some banks to deploy ATMs and will also help white-label ATM operators. “Bank amalgamation cameinto effect this year and there are economies of scale, which will lead to some reduction in the number of ATMs. Also, there is some amount of pure play involved as many industries have closed down, so there will be some impact,” he noted. - Business Line
🍒 With PMFBY scheme being optional for farmers, crop insurance premium de-grows in Sept : Crop insurance premium declined in September this year after recording positive growth in the previous months, possibly due to the lesser number of States participating in PMFBY, the scheme being optional for farmers, and a long delay in claims. The gross direct premium for Agricultural Insurance Corporation of India de-grew by 19.3 per cent in September when compared to a year ago.Data from IRDAI revealed that gross direct premium for AIC stood at ?2,569.64 crore in September 2020against ?3,187.57 crore in September 2019. However, between April and September 2020, AIC registered a 10.63 per cent growth in gross direct premium to ?7,250.80 crore against ?6,554.36 crore in the same period a year ago. - Business Line
🍒 Karnataka Bank appoints new Additional Director : Karnataka Bank has appointed Uma Shankar as Additional Director (non-executive, independent) at its board meeting on October 13. The appointment will be effective from November 1. A press release by the bank said on Tuesday that Uma Shankar is a former Executive Director of Reserve Bank of India (RBI). She was with the RBI for over 37 years in different capacities. Her core competence is in the financial sector supervision, but she has also been responsible for currency management, foreign exchange and internal accounting and administration. - Business Line
🍒 ‘Small-ticket advances to go fully digital’ : The pandemic has led to the evolution of straight through processing (STP) of loans, with banks pushing pre-approved loans to the micro, small and medium enterprise (MSME) segment and small-ticket advances going fully digital, according to Rajkiran Rai G, Deputy Chairman, Indian Banks’ Association (IBA). “For example, in the case of MSMEs, we have a back-office for processing loans. We pushed SMS to the customer that he has a pre-approved loan. “So, the number of visits he is required to make to the branch, which would otherwise have been 5 to 6, has come down to only one visit for documentation. And in some of the cases, even that is being done away with,” said Rai at IBA’s 3rd Annual Banking HR Conclave. - Business Line
🍒 Covid-specific insurance can be renewed till March 2021 with portability: IRDAI : The Insurance Regulatory and Development Authority of India (IRDAI) has permitted renewability, migration and portability of Covid-specific standard health policies, Corona Kavach and Corona Rakshak.In a circular issued on Tuesday, the insurance regulator said these policies of any tenure may be renewed for further terms of three and half months, six and half months or nine and a half months as per the option exercised by the policyholder.orona Kavach and Corona Rakshak polices are permitted to be renewed till March 31, 2021. “Renewal, if any, may be done before the expiry of the existing policy contract. There will be no imposition of any additional waiting period of 15 days and the coverage should be continued seamlessly,” the IRDAI said. The change in sum insurance can be opted by the policyholder during the renewal period.- Business Line
🍒 Capital Float reaches 1 million customers; Rs 9,000 cr loans disbursed : Digital financial services provider Capital Float on Tuesday said it has crossed the one million customers milestone and has disbursed over USD 1.2 billion (Rs 9,000 crore) till date to small businesses and retail borrowers. Capital Float has crossed 'one million lifetime customers' as more Indians find value in the company's credit services, it said in a release. Since the onset of COVID-19, the company has seen demand surge for its small-ticket digital credit facilities, particularly for making purchases online. It is now adding approximately 150,000 new customers per month, and is on track to double its existing customer base by the end of the year, it added. The company has disbursed over USD 1.2 billion (Rs 9,000 crore) till date to its MSME and retail customers spread across 300 cities in India. - Business Standard
🍒 How City Union Bank, Federal Bank have sustained investor interest : The underpinning similarity between Federal Bank and City Union Bank (CUB) is their years of establishment as banks which span over several decades. Despite their regulatory classification as old private sector banks, despite the disagreement between bank chiefs over it, the other similarity lies in their ability to chart a strong trajectory and to harvest their deep rooted connection with the small and medium enterprise (SMEs). It is probably because of this that despite their regional peers such as Lakshmi Vilas Bank and Dhanlaxmi Bank running into serious trouble, stocks of Federal Bank and CUB have remained outliers with gains of 10 per cent and 7.7 per cent, respectively, since September 24, when trouble started brewing for their two peers. But the similarities end here. Whether in terms of size of business, the manner of diversification or even in terms of market capitalisation, both banks are poles apart. - Business Standard
🍒 Gold prices steady at Rs 51,147/10 gm on subdued global cues : Gold prices were steady at Rs 51,147 per 10 gram in the Mumbai retail market on a weaker rupee and lacklustre global cues. The precious metal traded flat in today’s session on rebound dollar after hitting a session low of $1,915/oz. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,851 plus 3 percent GST, while 24-carat 10 gram was Rs 51,147 plus GST. The 18-carat gold quoted at Rs 38,360 plus GST in the retail market. Silver prices declined Rs 418 to Rs 62,188 per kg from its closing on October 12.
🍒 Sensex, Nifty end marginally higher after choppy trade; IT stocks shine : Rising for the ninth session in a row, the 30-share BSE Sensex ended 31.71 points or 0.08 per cent higher at 40,625.51. The broader NSE Nifty inched up 3.55 points or 0.03 per cent to 11,934.50. HCL Tech was the top gainer in the Sensex pack, rising around 4 per cent, followed by Kotak Bank, Infosys, Reliance Industries, UltraTech Cement and Tech Mahindra.On the other hand, Titan, Sun Pharma, ICICI Bank, Axis Bank, SBI and Bajaj Finance were among the main laggards.According to analysts, the recent recovery in the mark
et was led by expectations of fiscal stimulus from the government, which has failed to cheer investor sentiment. IT stocks continued to gain momentum ahead of crucial Q2 results and better earnings visibility, they added.
🍒 Rupee open: INR slips 13 paise to 73.41 against USD : The rupee depreciated 13 paise to 73.41 against the US dollar in opening trade on Tuesday tracking strengthening American currency. The Indian currency opened at 73.41 against the US dollar at the interbank forex market, down 13 paise over its previous close.
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