🍒 5% of total bank loans could be restructured due to Covid: CARE Ratings : CARE Ratings has estimated that 5% of banking systems loans could be recast under the one-time restructuring (OTR) scheme available to companies impacted by the pandemic. An earlier estimate by India Ratings had estimated that up to 7.7% or Rs 8.4 lakh crore of the total bank credit could get restructured or if they do not qualify for restructuring, may slip into bad loans. CARE also said that the OTR scheme is expected to dilute Covid-19’s impact on the asset quality of banks. “As per trends in reduction of moratorium over Phase I & II, moratorium levels could reduce even further and a few companies would not need to have their debt restructured as they would be able to service their debt obligations due to the opening up of the economy,” the rating agency noted in a report. “Approximately, 4% - 5% of overall bank credit outstanding would be restructured under the OTR scheme.” The impact of restructuring could be lesser also because specific segments like NBFCs have been kept out the ambit of scheme along with not allowing loans classified as SMA 1 and SMA 2 under this bracket. - economic times
🍒 Banks need Artificial Intelligence for corporate lending: Krishnamurthy Subramanian, Chief Economic Advisor : Indian banking sector needs to use emerging technologies such as Artificial Intelligence (AI) and machine learning for corporate loans for quality lending, Chief Economic Advisor Krishnamurthy Subramanian said on Thursday. Speaking at a virtual summit organised by Intel and Indian School of Business, he said lending to MSMEs (Micro, Small and Medium Enterprises) in the country has remained stagnant for the last 15 years indicating that banks have not developed models to actively lend to the sector. "So, the Indian banking sector can really benefit from implementing this (AI and machine learning) especially in the context of corporate lending...And evidence shows that when the better models are employed, banks that employ such models are able to grow their balance-sheets in a very robust manner without suffering quality issues. This is a very important opportunity," he said.- economic times
🍒 Disbursed Rs 5,500-crore retail credit via YONO in Sept quarter: SBI chief : State Bank of India (SBI) witnessed an 83% year-on-year (Y-o-Y) growth in disbursement of retail credit through its digital platform YONO (you only need one) during the September quarter. In an interview with CNBC TV18, SBI chairman Dinesh Kumar Khara said the lender disbursed Rs 5,500-crore retail credit through YONO during the September quarter, compared with Rs 3,000 crore disbursed in the same period last year. Khara also said SBI was not looking to help Lakshmi Vilas Bank in any manner. The Chennai-based private sector bank was jolted on September 25 when its shareholders voted out seven directors on its board, including chief executive officer S Sundar and promoters KR Pradeep and N Saiprasad. Following this, the Reserve Bank of India (RBI) appointed a three-member team to run the bank under Meeta Makhan as chairperson and Shakti Sinha and Satish Kumar Kalra as members. - Financial Express
🍒 No recast for accounts that cured 30-day default after March 1: RBI : Loan accounts that were in default for over 30 days as on March 1 will not be eligible for restructuring under the Covid resolution scheme even if they cleared their dues thereafter, the Reserve Bank of India (RBI) said in a set of frequently asked questions (FAQs). Sectors for which no eligibility ratios have been laid out by the central bank will be able to avail of recast in accordance with banks’ assessments, the FAQs said. Also, the actual debt that may be considered for resolution will be the outstanding as on the date of invocation. “Such accounts (which were more than 30 DPD on March 1, 2020, but subsequently got regularised through receipt of overdue) are ineligible for resolution under the Resolution Frame work as the Resolution Framework is applicable only for eligible borrowers which were classified as standard, but not in default for more than 30 days as on March 1, 2020. However, such accounts may still be resolved under the Prudential Framework dated June 7, 2019,” the RBI said. - financial express
🍒 Indian Bank inks MoU with Ministry, SIDBI for street vendors : Public sector Indian Bank has signed a memorandum of understanding (MoU) with the Ministry of Housing and Urban Affairs and with Small Industries Development Bank of India (SIDBI) for payment of subsidy to street vendors under the Centre's SVANidhi Scheme. Indian Bank MD and CEO Padmaja Chunduru said it is a privilege for the bank to associate with the scheme which is the flagship scheme of the government in line with Atmanirbhar Bharat. The Centre introduced the Prime Minister Street Vendor's AtmaNirbhar Nidhi (SVANidhi Scheme) to provide loans to the vendors and hawkers, among others. "Indian Bank has developed an integrated online system to make payments of interest subvention and cash incentives to all street vendor-beneficiaries across the country through the Direct Benefit Transfer," Chunduru said.- economic times
🍒 Indian Bank follows SBI, sets up portal to restructure retail loans : Indian Bank has put in place a digital platform for restructuring all retail loans, allowing the borrowers to submit recast requests on the portal and check eligibility criteria. The portal which became active from October 5 allows borrowers to submit the requests for restructuring their personal loans like home loans, education and vehicle loans among others. “The requests will be registered with a unique reference number and through SMS, customers will be informed to visit their respective Indian Bank Branches with required documents for completion of restructuring process,” the public sector lender said in a statement. Country’s largest lender State Bank of India had last month announced a similar online portal to restructure retail loans.- economic times
🍒 Indian Bank to pay subsidy, cash back to street vendors under PM SVANidhi : Indian Bank on Thursday signed a Memorandum of Understanding (MoU) with the Ministry of Housing and Urban Affairs (MoHUA), and Small Industries Development Bank of India (Sidbi) for payment of subsidy and cash incentives to street vendors under PM SVANidhi Scheme. Padmaja Chunduru, MD & CEO, Indian Bank said street vendors are a very important constituent in the urban economy and offer varied services to the public. They are engaged in productive activities for their livelihood. - Business Standard
🍒 Indian Bank launches e-facility for restructuring of personal loans : State-run Indian Bank on Thursday said it has launched a facility on its website for its personal loan borrowers to submit the requests for restructuring of their loans under the Reserve Bank of India's one-time loan recast norms. In August this year, the RBI had announced a one-time restructuring scheme for personal loan and corporate borrowers affected by COVID-19 stress. The bank said the requests for restructuring from retail borrowers be registered with a unique reference number. The lender will inform customers through SMS to visit their respective branches with required documents for completion of restructuring process, the release said. Retail borrowers who have not applied online can also visit their branch along with the required documents for considering the restructuring of their personal loan accounts, the lender said. Last month, State Bank of India (SBI) had launched a facility on its website to help retail customers check their eligibility for one-time loan restructuring. - Business Standard
🍒 ICICI Bank customers can create FD, pay utility bills on WhatsApp : Private sector lender ICICI Bank on Thursday announced the launch of services that would enable its customers to create fixed deposits, pay utility bills and access details of trade finance instantly on WhatsApp. “Services like opening FDs and paying utility bills are available for customers. The trade finance services are being piloted with some select corporates; they will be available for all in next few days,” it said in a statement, adding that the service for recharge of prepaid mobile phones will also be available shortly on WhatsApp. Retail customers will be able to create FDs, pay bills for electricity, cooking gas and postpaid mobile phones through WhatsApp while corporates and owners of MSMEs can check trade finance related services like customer ID, Import Export (IE) code, limit availability of all credit facilities availed from the bank, status of pending inward remittances and history of inward remittances. - Business Line
🍒 Pension assets under management cross ₹5 lakh crore mark: PFRDA chief : Pension assets under management (AUM) have crossed the ₹5-lakh crore mark to touch ₹5.05-lakh crore now, PFRDA Chairman Supratim Bandyopadhyay said on Thursday. “This is a small milestone we have achieved. We have to cross many such milestones before we can really provide old age security to people at large. Pension as a concept is still at a nascent stage in India,” Bandyopadhyay told a virtual press conference. He also said that the overall AUM could touch close to ₹6-lakh crore by end March next year. For the current fiscal, Bandyopadhyay expects the AUM to continue clocking at least 30 per cent compounded growth as was seen in recent years. Bandyopadhyay said there has been steady inflows into NPS across all segments including government, private corporates, retail. The returns generated over long period of time besides the income tax benefits has made NPS an “unbeatable” product. - Business Line
🍒 Lakshmi Vilas Bank gets board's nod to raise Rs 500 crore via rights issue : Cash-strapped Lakshmi Vilas Bank on Thursday said its board has approved plans to raise up to Rs 500 crore through a rights issue. The board at its meeting held on October 15, 2020, has considered and approved the raising of funds by issuance and allotment of equity shares or such other eligible securities for an aggregate amount of up to Rs 500 crore by way of a rights issue, LVB said in a regulatory filing. Last week, the private sector lender had informed about receiving a non-binding offer from Aion-backed non-banking finance firm Clix Group for a merger. The old-generation Chennai-based private sector bank, which has been on the lookout for an investor and capital for long, had to face a blow in late September when its shareholders voted out seven directors of its board, including CEO S Sundar and promoters K R Pradeep and N Saiprasad. Business Standard
🍒 Equitas Small Finance Bank fixes IPO price band at Rs 32-33 per share : Equitas Small Finance Bank, the subsidiary of Equitas Holdings, has fixed the price band at Rs 32-33 per shares for its forthcoming initial public offering. The IPO is going to open for subscription on October 20 and close on October 22. The issue for anchor invetors will open for a day on October 19, a day before the issue opening for public. One can bid for a minimum of 450 equity shares and in multiples of 450 shares thereafter. The public issue consists a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by Equitas Holdings (which valued at Rs 237.6 crore at upper price band), hence the total issue size stood at Rs 517.6 crore. - Financial Express
🍒 Indian banks log the worst total returns in Q3 2020; Bangladeshi lenders shine : Smaller banks from Bangladesh, Pakistan and China emerged as the best-performing banking stocks in Q3 2020, while its Indian peers logged the worst total returns, according to data by S&P Markets Intelligence. According to the analysis, 16 of the 20 largest banks in the Asia-Pacific region saw declines in their market capitalisation in Q3. "Indian bank stocks have been on a declining trend in 2020, with major lenders falling between 12 percent to more than 50 percent between January 1 and August 31," the report said. - moneycontrol.
🍒 LIC Housing Finance expects Q3 sales in high double-digits : On the back of "a much-more-than-expected recovery in demand since the past two months", India's second-largest pureplay mortgage lender LIC Housing Finance expects a bumper festival season as it eyes loan growth to be in double-digits, a top company official has said. The LIC arm reported positive numbers even in the June 2020 quarter which was a washout for the entire economy, with a net income of Rs 817.48 crore, up 34 percent y-o-y, even though its net interest income rose only 3 percent to Rs 1,220.61 crore and the loan sales grew 6 percent. - moneycontrol.
🍒 Banks can restructure loans to COVID-19-impacted real estate firms on the basis of project rather than developer : The Reserve Bank of India (RBI) giving the go-ahead to banks to restructure the loans of real estate firms at the project level rather than developer level is expected to benefit both homebuyers as well as real estate developers. The move may ease liquidity and enable construction to recommence in projects that were stuck due to the impact of the COVID-19 pandemic. “Both buyers and developers will stand to gain when stuck projects will eventually see the light of the day. From a buyers' standpoint, they will no longer have to wait for an indefinite period for their homes," said Anuj Puri, chairman - ANAROCK Property Consultants. - moneycontrol.com
🍒 Supreme Court's stay on NPA classification will give shocker for banks in Q3 and Q4. Here’s why : The Supreme Court’s interim stay on banks from classifying borrowal accounts that are standard as on August 31 as non-performing assets (NPAs) till a final order could mean a major bad loan shocker for the industry in the third and fourth quarters, analysts and banking sector experts said. This will have implications since banks need to set aside money for bad loans under the Reserve Bank of India (RBI) norms. The Supreme Court’s September 3 interim order has already been used by one of the banks—Karnataka Bank—which announced its second-quarter results early this week. The lender has shown a declining NPA trend presumably because it has not tagged any accounts NPA that are standard on its books as on August 31. Other banks are also likely to do this, showing lower NPA numbers in the second quarter. The next hearing of the Supreme Court is on November 2. This means, at least till that date, the interim directive of the SC will continue. "NPAs are likely to go up given the economic situation and job losses,” said RK Bansal, Managing Director and CEO of Edelweiss Asset Reconstruction Company. “There are two main variables here. The SC order and the one-time loan recast (OTR). Those accounts which are not eligible for OTR and are not able to pay after moratorium will reflect as bad loans on the books of banks in Q3 and Q4. In Q2, banks cannot disclose these accounts as NPAs till the SC passes final orders” said Bansal. - moneycontrol
🍒 Will exceed guidance of 15% growth in FY21: Muthoot Finance : NBFC Muthoot Finance is confident of exceeding its guidance of 15% growth for the current fiscal year with demand for gold loan appearing to be robust. Muthoot Finance managing director George Alexander Muthoot told FE that business had achieved the pre-Covid level. “First quarter business was not good, but the second quarter business is extremely good for gold loans. Last year, our total business grew by 22% and this year we will grow more than 15 %,” he added. The gold loan company with more than four thousand branches was closed till April 23 due to the Covid-induced nationwide lockdown. “Demand for credit is good because people are thinking of re-starting business. Gold loan is easy and quick funding for small traders and MSME .In the long-run they manage to get other loans from the banks. Our average ticket size of gold loan has also increased from Rs 35,000 to Rs 48,000 because gold prices have gone up,” he said. - financial express
🍒 An Odisha-based micro lender at the centre of a ₹251 crore loan fraud : A fraud of ₹251 crore unearthed at a small Odisha-based non-banking financial company (NBFC) micro-finance institution (MFI) has put the spotlight on “bogus accounts" as the modus operandi for fund diversions. Sambandh Finserve Private Limited (SFPL) has disclosed to a rating agency that it has defaulted on its repayments because of a fraud in its books. The company with debt of ₹433 crore is undergoing an internal investigation as ordered by its board. In a letter to the board on 7 October, four senior company executives detailed how the actual assets under management (AUM) is approximately ₹140 crore as against the reported figure of ₹391 crore as on 30 September. “The reported AUM is inflated and non-existent. The gap is approximately ₹251 crore," the letter alleged, a copy of which has been reviewed by Mint. - Live Mint
🍒 Saral Jeevan Bima will provide financial security to lower-income families : Saral Jeevan Bima, the upcoming new standard life insurance policy, will add to the financial security of the commoners and families with lower incomes. In addition, it also addresses the long-felt need for a simple policy without the complication of trying to understand the terminology of a policy document. Even for an educated person, the wordings of an insurance policy are difficult to understand, as there are many term products in the market with varying terms and conditions. - Business Line
🍒 All life insurers must offer standard term policy: IRDAI : Buying life cover will soon be easier as the insurance regulator has mandated all life insurers to offer a standard individual term life insurance product. The standard plan, ‘Saral Jeevan Bima’, will have to be offered by all insurers from January 1, 2021, the Insurance Regulatory and Development Authority of India (IRDAI) said in a circular issued today. “There are many term products in the market with varying terms and conditions. Customers who cannot devote adequate time and energy to make informed choices find it difficult to select the right product and products may not be available for the intended sum assured,’’ the regulator said.- Business Line
🍒 DBS Bank India sees V-shaped recovery for Indian economy : DBS Bank India, a wholly-owned subsidiary of Singapore-headquartered DBS Bank, will continue to adopt a ‘phygital’ — a mix of physical and digital outreach — approach to expand in the Indian market even as it redoubles efforts on digitally led fulfilment mode of doing business, said a top official said. “We realise that a certain amount of physical nearness is also essential if we have to expand and address the SME client base in the country. SME is where the future is and growth will come from,” Niraj Mittal, MD and Country Head - Institutional Banking Group, DBS Bank India, told BusinessLine in an interview. - Business Line
🍒 Digital adoption will improve return on equity for Indian banks: Morgan Stanley : Increased digital adoption by Indian lenders would lead to higher return ratios in the next few years. In its forecast Morgan Stanley has said that banks could see a rise of atleast 20 basis points in their return on equity, if the digital drive continues at the current pace. The forecast reflects faster growth in retail and SME segments, increased cross-sell and faster product delivery and better risk-adjusted returns given greater data availability. Morgan Stanley believes that the stronger Indian banks are well placed to manage the increasing competition from the fintechs. “We forecast digitalisation will further add 20bps to Indian banks' ROE by 2025, with a gap of nearly 400bps between the digital leaders and the slow adopters,” Morgan Stanley said in a report. “Cost ratios for India are much higher relative to the region, and a faster pace of digitalisation can further help improve productivity.” - financial express
🍒 Gold prices steady at Rs 50,663 per 10 gram, silver declines by Rs 571 per kg : Gold prices were steady at Rs 50,663 per 10 gram in the Mumbai retail market on a weaker rupee and subdued global cues. The precious metal continues to trade lower on a firm dollar and doubts over US fiscal stimulus before November 3 election. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,407 plus 3 percent GST, while 24-carat 10 gram was Rs 50,663 plus GST. The 18-carat gold quoted at Rs 37,997 plus GST in the retail market. Silver prices dropped by Rs 571 to Rs 60,159 per kg from its closing on October 14.
🍒 Cut-off time restored to 3 pm for buying/selling MF units : SEBI has restored the cut-off timing for buying and selling of mutual fund units to 3 pm, effective Monday. In a tweet Nilesh Shah, Chairman, Association of Mutual Funds in India, said cut-off timing for both subscription and redemption for all schemes other than those categorised as debt schemes and conservative hybrid fund is being restored to original cut-off timing of 3 pm, effective, October 19.
🍒 Sensex plunges over 1,000 points amid global sell-off : The US elections in November and the absence of major announcements by the government on the economic front have affected the stock market sentiment. Analysts, despite Thursday’s sharp fall in key benchmark indices , are of the view that no major fall is in the offing. The BSE Sensex fell 2.61 per cent, or 1,066 points, to close at 39,729. The NSE Nifty was down 2.43 per cent, or 290 points, at 11,680. The small- and mid-cap indices have been flat for nearly two weeks now. “Thursday’s fall in stock markets was more technical. The Nifty index touched 12,000 levels for the first time after Covid-19 fall and it was a crowded street with long positions. It is likely that Nifty may slip back to 11,500 or nearby levels if the fall continues for a day or two. But it does not seem that a market correction could go beyond that,” said Rohit Srivastava, chief strategist, Indiacharts
🍒 Rupee settles 5 paise lower at 73.36 against dollar : The rupee pared its initial gains and settled 5 paise lower at 73.36 (provisional) against the US dollar on Thursday tracking heavy selling in domestic equities and strengthening American currency. At the interbank forex market, the rupee opened at 73.32 against the greenback, and after witnessing a volatile trading session closed at 73.36, lower by 5 paise from its previous c
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