🍒 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%..
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