Sunday 20 December 2020

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..

No comments:

Post a Comment