08.10.2020: Today's Banking / Financial News

 08.10.2020: Today's Banking / Financial News at a Glance

🍒 Govt appoints M Rajeshwar Rao as new deputy governor of RBI : The Centre late Wednesday appointed M Rajeshwar Rao as the new deputy governor of the Reserve Bank of India. He is currently an executive director at the banking regulator. The Appointments Committee of the Cabinet approved the appointment as the search for the incumbent was on since August.The Financial Sector Regulatory Appointment Search Committee (FSRASC), which had included the cabinet secretary, RBI governor and the financial services secretary, interviewed candidates on August 21.RBI executive directors M Rajeshwar Rao and Lily Vadera were the top contenders to succeed NS Vishwanathan as the central bank's fourth deputy governor, ET reported on August 25. Rao, a career central banker, has spent 36 years at the RBI across various departments including regulation and supervision and different regional offices of the regulator. - economic times

🍒 State Bank of India's new chief, Dinesh Khara, says top priority to maintain loan book quality : India's largest lender, State Bank of India's newly appointed chairman said that his focus areas as he takes over will be maintaining the quality of the loan book while ensuring that provisioning requirements are met. At a time when the Indian banking system is hamstrung by the pandemic, SBI is witnessing credit growth of around 6-7% while business is "70-80% back to pre COVID-19 levels," for the bank, Dinesh Kumar Khara, Chairman, SBI said in a press briefing after taking over the reins on Wednesday. Before taking over as chairman, Khara was a managing director at the bank and was responsible for overseeing global markets and subsidiaries of SBI. Khara has been appointed as chairman for a three-year term. Though concerns for SBI in certain segments remain due to the economic disruption caused by the pandemic, overall the stress in loan books is not a cause of worry yet, added Khara. - economic times

🍒 Indian Overseas Bank, Another PSB to Write Off Rs41,392 Crore in 8 Years; Recovers Just 17% : Indian Overseas Bank (IOB) is the latest to join other big banks that have written off bad loans worth thousands of crores of rupees and recovered paltry amounts from defaulters. Strangely though, IOB refused to share this information under the Right to Information (RTI) Act and instead asked the applicant to check its annual reports. Data shared by Pune-based RTI activist Vivek Velankar shows that IOB has written off a massive Rs41,392 crore as technical write-offs in the past eight-year period from FY12-13 to FY19-20. As against these write-offs, the recovery was just 17% or Rs7,253 crore. - moneylife.in

🍒 Banks say government's interest waiver will add to costs, spark litigation : Indian bankers fear the government's decision to waive some interest payments on loans under a COVID-19 support plan will create unnecessary work for lenders and lead to more litigation, without providing much of a boost for the sagging economy. In an Oct. 2 filing with India's Supreme Court, seen by Reuters, the government said it is amending a controversial clause in a relief plan that allowed distressed borrowers to skip repayments for six months but then charged them "interest-on-interest" on the delayed payments, putting them deeper in debt. The change will waive the compounded interest component on small business loans and some personal debts from March to August. The government will bear the cost, which could be as high as $1 billion, according to analysts. - economic times

🍒 HDFC to give instant loans up to Rs 40 lakh for customers' medical bills at Apollo Hospitals : HDFC Bank on Wednesday announced a tie-up with Apollo Hospitals through which its customers can avail unsecured loans of up to Rs 40 lakh to pay for medical expenses incurred at the healthcare chain. The loans will be disbursed almost instantly as and when a need for money arises, and the hospital patients who are customers of HDFC Bank will also receive preferential treatment, its Chief Executive Officer and Managing Director Aditya Puri told reporters. Apollo Executive Vice-Chairperson Shobana Kamineni said HDFC Bank has 65 million customers who can take advantage of this facility. She stressed that while availing health insurance is necessary, it does not cover all the aspects despite providing cashless facilities and hence, such a tie-up will help. - economic times

🍒 Interest subvention for MSMEs: Govt to include Co-operative Banks as Eligible Lending Institutions : The Government of India has decided to include Co-operative Banks as Eligible Lending Institutions whereby their MSMEs (micro, small and medium enterprises) borrowers can get interest subvention with effect from March 3, 2020. The Government had announced the ‘Interest Subvention Scheme for MSMEs 2018’ on November 2, 2018, for Scheduled Commercial Banks. The scheme provides for an interest relief of 2 per cent per annum to eligible MSMEs on their outstanding new/incremental term loan/working capital during the period of its validity, the RBI said in a notification issued to Primary (Urban) Co-operative Banks, State Co-operative Banks and District Central Co-operative Banks. The coverage of the scheme is limited to all term loans/working capital to the extent of ₹1 crore. - Business Line

🍒 PM SVANidhi-SBI integration to ease processing of loan applications : The Ministry of Housing and Urban Affairs (MoHUA), on Wednesday, launched the Application Programming Interface (API) integration between the Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) and the State Bank of India’s eMudra portal to ease the process of receiving and processing of loan applications. The aim of this integration is to provide benefits to street vendors seeking working capital loans under the PM SVANidhi scheme. Besides SBI, MoHUA also plans to explore similar integration with the other banks in the days to come. - Business Line

🍒 At 41 million real-time transactions a day, India leads the world: Report : Thanks to the pandemic, the country has become the global leader in real-time financial transactions with 41 million transactions per day, which is more than double that of the last year, says an international report. The Covid-19 pandemic has seen India doubling its every day real-time transactions at 41 million, says the latest report from FIS, which is a leading provider of technology solutions for merchants, banks and capital markets firms globally. According to the report released on Wednesday, six other countries also saw more than doubling of their real-time payment transactions year-over-year, while four saw at least a twofold increase in transaction value. - Business Line

🍒 Bandhan Bank's collection efficiency improves in September : Bandhan Bank's average collection efficiency has improved 92% at the end of September from 76% three months back, while it has seen its loan book grow 20% year-on-year. Liquidity coverage ratio was at comfortable 157% as against the current regulatory stipulation of 90%, the bank said. Collection efficiency for microfinance loans was 89% while it was 98% for mortgage loans, according to provisional data submitted to the stock exchanges. Loans and advances including off-balance sheet loans and loans under Reserve Bank of India's targeted long term repo operation (TLTRO) stood at Rs 76724 crore from Rs 64186 crore a year back. - economic times

🍒 Jammu & Kashmir Bank extends CMD’s term by six months : Jammu & Kashmir Bank, on Wednesday, said the Reserve Bank of India (RBI) has extended the term of RK Chhibber, Chairman and Managing Director of the bank, by a further period of six months. In a regulatory filing, the bank said the extension is with effect from October 10or till the appointment of MD and CEO, whichever is earlier. The bank informed the exchanges on July 7 that the term of Chhibber has been extended by a further period of three months with effect from July 10,or till the appointment of MD and CEO, whichever is earlier.. - Business Line

🍒 SEBI move on AT-1 bonds: Marginal impact expected on banks’ fund-raising plans : Retail investors will be safeguarded, but the fund-raising plans of some PSBscould be marginally impacted by the decision of the Securities and Exchange Board of India (SEBI) to tighten the regulations for additional Tier-1 or AT-1 bonds. Retail investors do not invest significantly in these bonds. Experts said that at least ₹90,000 crore of such AT-1 bonds are outstanding as on date, and private sector banks are unlikely to tap this source, given the developments at YES Bank, where it wrote back such bonds worth ₹8,415 crore, makingretail investors more cautious. However, the quantum of bonds already invested in by retail investors is difficult to assess. - Business Line

🍒 Barclays to enter new European private banking markets in 2021 : Barclays plans to enter four new European private banking markets in 2021, its regional manager for the business told Reuters. Gerald Mathieu, who in September became Barclays’ private banking head for Europe outside Britain, said the British bank was looking to start up the business in France, Italy, Spain and Germany next year. “These are the countries where we see a lot of opportunities, also because we have a very strong footprint of corporate and investment banking locally,” Mathieu said in an interview. “The idea is to have a capital-light approach and work in very close collaboration with the investment bank locally, targeting family offices, ultra high net worth individuals, and some qausi-corporate or institutional clients.” The bank said it was too early to disclose hiring plans. - Business Line

🍒 Indian banks face tough operating environment in near term: Fitch : Fitch Ratings on Tuesday said Indian banks face a tough operating environment in the near term as stressed loans and write-offs increase due to the economic fallout from the coronavirus pandemic. It said limited room for fiscal support, fragilities in the financial system and a continuing rise in COVID-19 cases are hampering normalisation of activity. "Indian banks face a tough operating environment in the near term, as stressed loans and write-offs increase as a result of the economic fallout from the coronavirus pandemic, but a swift economic recovery will be critical to limiting loan losses in what is likely to be a protracted period of weakness in the asset-quality cycle," Fitch Ratings said in a statement. - Business Standard

🍒 Indian banks say govt interest waiver will add to costs, spark litigation : Indian bankers fear the government's decision to waive some interest payments on loans under a COVID-19 support plan will create unnecessary work for lenders and lead to more litigation, without providing much of a boost for the sagging economy. In an Oct. 2 filing with the Supreme Court, seen by Reuters, the government said it is amending a controversial clause in a relief plan that allowed distressed borrowers to skip repayments for six months but then charged them "interest-on-interest" on the delayed payments, putting them deeper in debt. The change will waive the compounded interest component on small business loans and some personal debts from March to August. The government will bear the cost, which could be as high as $1 billion, according to analysts - Business Standard

🍒 SBI is future-ready and in Dinesh Khara's safe hands: Rajnish Kumar : Former State Bank of India (SBI) chairman Rajnish Kumar said in his farewell message that he had made the bank ‘future-ready’ and that the lender is in safe hands with Dinesh Khara as the new chairman. Kumar’s last day in office was on October 6. He had been in the bank as chairman for three years and in total served the bank in various capacities for almost 40 years. “I am happy that I am leaving the bank ‘future-ready’ for the next Chairman--Mr Dinesh Khara--to take it further ahead. Future is all about possibilities and I believe that the best is yet to come. I wish all the best for his new assignment. I can say with no hesitation that I am leaving SBI in safe hands,” Kumar said in his farewell message to SBI employees. - Business Standard

🍒 IndusInd Bank Q2 deposits grow 10.26% : Private lender IndusInd Bank registered a 10.26% year-on-year increase in its deposits and a 2% rise in its net advances during September quarter. However, the bank’s current account savings account (CASA) ratio in the September quarter declined 100 basis points year-on-year to 40.4%. In a provisional data released on exchanges, the bank said that its deposits grew by 10.26% to Rs 2.28 lakh crore, compared to Rs 2.07 lakh crore in the same period last year. - financial express

🍒 Bandhan Bank says advances up 3% since June quarter : Kolkata-based private sector lender Bandhan Bank on October 7 said its total advances grew 3 percent in the second quarter while deposits were up 9 percent. Total advances grew to Rs 76,724 crore as on September 30 compared with Rs 74,331 crore as on June 30, the bank said in a stock exchange update. Deposits grew to Rs 66,153 crore from Rs 60,610 crore during the period - Moneycontrol.com

🍒 ICICI Prudential Life Insurance to raise up to Rs 1,200 crore via NCDs : ICICI Prudential Life Insurance on Wednesday said it will raise up to Rs 1,200 crore by issuing non-convertible debentures (NCDs) on private placement basis. "The Board of Directors has at their meeting held on October 7, 2020 approved raising capital by issuance of subordinated debt instruments in the nature of rated, listed, redeemable, unsecured, fully paid-up, non-cumulative, non-convertible debentures (NCDs) up to Rs 12 billion,” ICICI Prudential Life Insurance Company said in a regulatory filing.- Moneycontrol.com

🍒 Interest subvention on MSME loans extended until end of March 2021: RBI : The two percent interest subvention scheme for micro, small and medium enterprises (MSMEs) on loans extended by co-operative banks has been extended till March 31 next year, the Reserve Bank of India said on October 7. The terms of the scheme have also been tweaked. The government had announced the 'Interest Subvention Scheme for MSMEs 2018' in November 2018 for scheduled commercial banks for two financial years 2018-19 and 2019-20. It has been extended for the financial year 2020-21. Co-operative banks also became as eligible lending institutions effective from March 3, 2020.- Moneycontrol.com

🍒 Govt recognises need for further stimulus at an appropriate time: Sanjeev Sanyal : Principal Economic Adviser Sanjeev Sanyal on Wednesday said the government recognises the need for further stimulus at an appropriate time to perk up demand in the economy, hit by COVID-19. Addressing the 115th AGM of PHD Chamber of Commerce and Industry, he said there was space on the monetary and fiscal side to implement further stimulus. With the outbreak of COVID-19 pandemic, the government announced Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Yojana, followed by the unveiling of Rs 20.97 lakh crore Aatmanirbhar Bharat Abhiyan package, which many analysts said fell short of addressing demand concern. “However, we recognise that there is a need for providing further stimulus to the economy at some point in time as may be appropriate,” he said. This is not something that is new, he said, adding that Finance Minister Nirmala Sitharaman recently mentioned this. - financial express

🍒 ‘Atmanirbhar Bharat’ should not result in protectionism: Raghuram Rajan : Former Reserve Bank governor Raghuram Rajan on Wednesday said the ‘Atmanirbhar Bharat’ campaign of the government should not result in protectionism, adding that such policies had not worked in the past. Observing that it is not yet clear to him what the government means by ‘Atmanirbhar Bharat’, Rajan said if it is about creating an environment for production, then it is a re-branding of the Make in India initiative. “If it is about protectionism, unfortunately India has raised tariffs recently, (then) it does not make any sense to my mind to go that way because we tried that before. “We had a licence permit raj earlier…that protectionism was problematic, it enriched a few corporations but basically was a source of poverty for many of us,” he said. Rajan was addressing a virtual event organised by economic think tank ICRIER. - financial express

🍒 Gold prices fall sharply to Rs 50,287/10 gm, silver tanks Rs 2,240/kg : Gold prices tanked Rs 757 to Rs 50,287 per 10 gram in the Mumbai retail market on rupee appreciation against the dollar and strength in equity markets. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 37,715, Rs 46,063 and Rs 50,287, respectively, plus 3 percent GST. Spot gold was trading up $10.10 at $1,888.23 an ounce at 12:05 GMT in London trading.Silver prices plunged Rs 2,240 to Rs 58,872 per kg from its closing on October 6.

🍒 TCS reports 6.45% profit in Q2; to buyback up to Rs 16,000 cr in shares : TCS has delivered a broad-based performance, signalling a fast-track recovery in its growth as clients increasingly rely on technology to overcome economic stress created by the ongoing pandemic. India’s largest software exporter posted a net profit of ₹7,504 crore for the September-ended quarter, a 6.45 per cent growth compared to the ₹7,049 crore posted in the June-ended quarter. However, on a year-on-year basis, profits dipped 6.8 per cent compared to ₹8,058 crore in the corresponding period last year. “We are not out of the woods as yet due to the economy and Covid-19, but the underlying demand recovery seen in our clients can be sustained,” said Rajesh Gopinathan, Chief Executive Officer and Managing Director, TCS. - Business Line

🍒 Sensex surges for 5th day on RIL boost; TCS results eyed : After opening on a weak note, the 30-share BSE Sensex gained ground to end 304.38 points or 0.77 per cent higher at 39,878.95.Similarly, the broader NSE Nifty jumped 76.45 points or 0.66 per cent to close at 11,738.85.The Sensex has now gained 1,905.73 points in five sessions, while the Nifty has advanced 516.45 points. Index heavyweight Reliance Industries spurted 2.13 per cent a day after its retail arm raised Rs 5,512.50 crore from Abu Dhabi Investment Authority (ADIA) for a 1.20 per cent stake.Bajaj Auto, Maruti, UltraTech Cement, and ONGC were among the other prominent gainers.IT major TCS inched up 0.78 per cent ahead of its quarterly results. On the other hand, Bajaj Finance, PowerGrid, Sun Pharma, Tata Steel, NTPC and Bajaj Finserv were among the laggards, skidding up to 4.12 per cent.

🍒 Rupee recovers by 13 paise; ends 2-day losing streak : Snapping its two-day losing streak, the rupee strengthened by 13 paise to settle at 73.33 against the US dollar on Wednesday helped by positive domestic equities and foreign fund inflows. At the interbank forex market, the domestic unit opened at 73.53 against the US dollar, but gained ground during the day and finally settled at 73.33, registering a rise of 13 paise over its last close of 73.46.

07.10.2020: Today's Banking / Financial News

07.10.2020: Today's Banking / Financial News at a Glance

🍒 FM launches Indian Bank’s business mentoring programme for MSMEs : Public sector lender Indian Bank has come out with ‘MSME Prerana’, an online Business Mentoring Programme for MSMEs. The bank says it is the first-of-its-kind initiative by a bank in the country for the (MSME) sector. . The initiative was formally launched by Union Minister of Finance & Corporate Affairs, Nirmala Sitharaman, at the bank’s headquarters in Chennai on Tuesday. To empower entrepreneurs MSME Prerana is for empowering entrepreneurs through skill development and capacity building workshops in the local language. The programme is in collaboration with Poornatha & Co, a firm that designs Entrepreneurial Development Programmes in vernacular using online web-based interactive sessions and case studies, according to a statement. - Business Line

🍒 RBI to announce monetary policy on October 9 : The Reserve Bank of India will announce monetary policy on October 9. "The next meeting of the Monetary Policy Committee (MPC) is scheduled during October 7 to October 9, 2020," the RBI said in a release. The government on Monday had appointed three eminent economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide as members of the rate-setting Monetary Policy Committee of the RBI. Live Mint

🍒 Government names Dinesh Khara as the new SBI chief : The government today gave its nod to the Banks Board Bureau’s recommendation, thereby appointing Dinesh Khara as the chairman of SBI- country’s largest public sector bank .The term of Rajnish Kumar, who was appointed for a period of three years comes to an end on Tuesday. With Khara’s elevation, one of the four MD positions will also fall vacant. A few weeks later, at the end of October, another MD - Arijit Basu - is also set to complete his term. This would leave two positions vacant by the month-end. The senior-most of the three Managing Directors (MDs) at the public lender was picked by the BBB on August 28 for the vacancy. - economic times

🍒 Govt appoints Shashank Bhide, Ashima Goyal and Jayant Verma as new MPC members : The government has appointed economists Shashank Bhide, Ashima Goyal and Jayanth R Varma as independent members to the Monetary Policy Committee. The finance ministry issued a notification to this effect late Monday. Shashank Bhide is currently a senior advisor at the New Delhi-based think tank National Council for Applied Economic Research, while Goyal is a professor at the Indira Gandhi Institute of Development Research in Mumbai. Jayant R Varma is currently a professor at the Indian Institute of Management, Ahmedabad.- economic times

🍒 Bank of Baroda launches festive offers for home, car loans : Ahead of the festive season, state-run Bank of Baroda (BOB) on Tuesday said it has rolled out offers for home and car loan borrowers. The lender said it is offering a waiver of 0.25 per cent in the existing applicable rates for Baroda Home Loans (under take over cases only) and Baroda Car Loans. “With the introduction of these retail loan offers for this festive season, we intend to gift the existing loyal customers and also offer new-to-bank customers an attractive proposition for availing car loans or shifting their home loans who will be benefited from lower rates and waiver of processing fee on offer,” the bank's head and general manager (mortgage and other assets) H T Solanki said in a release. - economic times

🍒 Indian Bank launches its first Customer Acquisition & Processing Centre in Chennai : Chennai-headquartered public sector lender Indian Bank on Monday opened its first centralised Customer Acquisition & Processing Centre (CAPC) in Chennai. Its branches in Tamil Nadu and Puducherry will be brought under CAPC before December 2020 and other branches across the country will be brought under the CAPCs in a phased manner, said Executive Director of the Bank MK Bhattacharya, who inaugurated the CAPC, here. Over the next 30 days, 40 branches in Chennai will be brought under CAPC. He said

the account opening process at branch is a very critical, sensitive and time bound exercise. Regulators expect banks to have a consolidated view of customers and their transactions across businesses and jurisdictions. - Business Line

🍒 HDFC Bank’s loans grow 16% in Q2, deposits 20% : HDFC Bank on Monday said that its advances for the second quarter rose 16% over the previous year, while deposits increased by 20%. The growth is much higher than the banking sector, which recorded a 12% year-on-year growth in deposits and 5.3% in advances until September 11. According to the bank’s statement to the stock exchanges, its deposits at the end of September stood at Rs 12.3 lakh crore as compared to Rs 10.2 lakh crore a year ago. Advances rose to Rs 10.4 lakh crore from Rs 9 lakh crore. The country’s largest private sector bank said the share of current and savings accounts in its deposits rose to 42% in September 2020 from 39% a year ago. During the quarter, the bank purchased home loans worth Rs 3,026 crore (against Rs 7,016 crore in the previous year) from its parent HDFC. - economic times

🍒 Centre 'may disinvest 5% stake' in LIC : The government may sell just five per cent stake in state-owned Life Insurance Corporation of India, which could help it raise upwards of ₹50,000 crore. Sources close to the development said the government is hoping to go ahead with the proposed disinvestment in LIC, and wants to list it by February next year. However, instead of a 10 per cent disinvestment, it may consider a small stake sale, given the expectation of its high valuation. A formal plan is yet to be finalised and is still under discussion. “This will depend on the valuation arrived at and the market conditions and investor appetite at the time. A straight listing process in the domestic bourses may be an easier exercise at present,” noted a person familiar with the development. “Inter-ministerial discussions are on, and it is expected to be a key priority going ahead,” said the source, adding that the Finance Ministry will move necessary amendments to the LIC Act in the Winter Session of the Parliament. - Business Line

🍒 HDFC Bank assures employees that jobs, bonuses are safe : Private sector lender HDFC Bank’s Managing Director and CEO Aditya Puri has assured employees that their jobs and bonuses are safe. His comments come amid the Covid-19 pandemic and economic uncertainty that has resulted in job losses and salary cuts at many companies. “Not only are your jobs secure, your increment is secure. Your bonus and your promotion is secure,” he told the bank’s employees in a video message last week. He also assured them that the bank remains well capitalised and that its portfolio is not under any strain. He also hinted that the lender may post robust performance in the second quarter and in the quarters coming ahead. “The bank is doing well. We have all the capital that we need. Our portfolio is not under strain,” said Puri, who retires at the end of the month. - Business Line

🍒 SBI looking to hive off Yono into separate subsidiary: Chairman Rajnish Kumar : The country's largest lender State Bank of India is actively looking to hive off its digital platform Yono into a separate subsidiary, its chairman Rajnish Kumar said. Yono or You Only Need One App is the lender's integrated banking platform. "We are in discussions with all our partners to hive it (Yono) off as a separate subsidiary," Kumar said at an annual banking and finance conference - Sibos 2020, organised by the Society for Worldwide Interbank Financial Telecommunications (SWIFT). Recently, Kumar had said that Yono's valuation could be around USD 40 billion. "The statement (on valuation of Yono) which I made was that if I look at valuations of all start-ups and compare, then definitely Yono should not be less than USD 40 billion. As of now, we have not done any valuation exercise but that is what I believe is the potential," Kumar clarified.- economic times

🍒 Axis Bank joins top private lenders to offer pay hikes; salaries to be raised by up to 12% : India’s third-largest private lender is joining its larger rivals in offering pay hikes to staff even as the economic fall out of the coronavirus pandemic threatens profit growth. Axis Bank Ltd. will increase staff salaries between 4% and 12% from Oct. 1 based on performance, according to people with knowledge of the plans. The Mumbai-based lender, which has about 76,000 employees, also paid bonuses to its staff, the people said, asking not to be identified because the matter is private. HDFC Bank Ltd., the country’s largest private lender by assets, boosted salaries in April based on performance and also paid bonuses, other people with knowledge of the matter said. ICICI Bank Ltd., the second-biggest privately-held lender, gave about 80% of its 100,000 employees a bonus and pay rise from July, according to different people aware of the plans.- economic times

🍒 Axis Bank, Vistara launch co-branded forex card : Vistara and Axis Bank on Tuesday launched a co-branded forex card that can load up to 16 currencies. The card has locked-in exchange rates and the card holder will accrue 3 award points on Club Vistara for every USD 5 or an equivalent value spent, the airline said in a press release. Club Vistara (CV) is the airline's frequent flyer program. "Customers also get awarded 500 CV Points as a Welcome Bonus on signing up (for the forex card)," it said. - economic times

🍒 DHFL case: Auditor reports fraudulent transactions worth Rs 2,150 crore : Debt-ridden mortgage lender DHFL on Tuesday said that fraudulent transactions worth Rs 2,150.84 crore by way of undervaluing the company's insurance subsidiary have been detected by transaction auditor Grant Thornton. DHFL is undergoing resolution process under the Insolvency and Bankruptcy Code. Earlier this year, the company's administrator roped in Grant Thornton to conduct an investigation into the affairs of the mortgage firm. According to the auditor's report, the Rs 2,150.84 crore-fraud was in relation to the undervalued and fraudulent nature of certain agreements entered into by the DHFL when the company sold its stake in Pramerica Life Insurance Ltd to DHFL Investments Ltd (DIL), as per a regulatory filing. - economic times

🍒 Airtel Payments Bank eases transactions for merchants : Merchants associated with Airtel Payments Bank can receive payments by smartphone acting as a point-of-sale (POS) machine at zero commission charges. Airtel, on Tuesday, upgraded the app with “Smart ePOS” and “On-Demand Settlement” features. Merchants can select the Smart ePOS option in the Airtel Payments app, and a QR code will appear on the mobile screen for the payments to be made. The amount will get credited immediately to the merchant bank account linked to the app. “This eliminates the need to have a physical QR code or the need to carry an additional device to receive payments for home deliveries,” the company said. - economic times

🍒 ICICI Bank launches debit card for customers availing loan against securities : Private sector lender ICICI Bank has introduced a debit card facility for customers availing themselves of Loan Against Securities (LAS). The card is available on the Visa platform and can be used across all domestic merchant establishments to make POS and online transactions like payments on e-commerce portals among others, using the sanctioned LAS amount. “The debit card will be issued to new customers who avail themselves of LAS and will be automatically renewed upon renewal of the LAS account. Customers get a digital debit card within one business day of availing LAS and will get the physical card within seven business days. Existing customers of LAS will also get this card shortly,” ICICI Bank said in a statement on Tuesday. The card offers a maximum daily transaction limit of ₹3 lakh each for POS and online transactions. - Business Line

🍒 India’s first B2B Crypto trading exchange DigitX launched : DigitX, country’s first Business-to-Business (B2B) Crypto trading exchange has commenced its trading operations. In a highly potential yet challenging market, DigitX aims to deliv

er transparency and security with its Platform armed with features to bring about a much-needed trust and confidence for the investors and traders of Crypto. This crypto trading exchange brings along a network of pre-verified, trained and closely monitored Trusted Links(members) to ensure a secure Crypto trading ecosystem. - Business Line

🍒 Moody’s sees NPLs doubling across 14 APAC economies by 2022, led by India, Thailand : Moody’s Investors Service, problem loans, non-performing loans (NPLs), economic conditions, credit rating agency, pandemic, return on tangible assets (ROTAs), coronavirus, tangible common equity (TCE) Moody’s Investors Service has projected that problem loans or non-performing loans (NPLs) will double on average across the 14 APAC (Asia-Pacific) economies by 2022, led by India and Thailand as economic conditions severely worsen. Banks in India and Thailand expect to see the largest increases in NPLs due to the greater severity of economic shocks to their economies and the historically poor performance of certain loan types, as per the global credit rating agency’s assessment. - Business Line

🍒 ED files rejoinder in SC opposing bail to DHFL promoters : The Enforcement Directorate (ED) has filed a rejoinder affidavit in the Supreme Court opposing the Bombay High Court’s order granting bail to Kapil Wadhawan and Dheeraj Wadhawan, promoters of Dewan Housing Finance Corporation Ltd, in a case related to money laundering charges linked to YES Bank The ED has dismissed the Wadhawans’ claims that the complaint was filed late. In the affidavit, the ED said that the complaint was filed well within the time frame stipulated under law. It said that the complaint was filed via email initailly due to the ongoing pandemic-related issues. BusinessLine has seen the rejoinder filed by ED. - Business Line

🍒 Rajnish Kumar bids adieu as SBI boss after 40-year stint with bank : Rajnish Kumar, 62, will bid farewell to State Bank of India this evening, after having served the institution for 40 years, the last three of those as Chairman. Kumar is hanging his boots at a time when the banking sector as a whole is facing an unprecedented crisis. Credit growth is at 40-year lows, reflecting the problems of an economy in the midst of a slowdown. Public sector banks’ stressed assets ratios have been in double digits for the last seven years, and Reserve Bank estimates bank NPAs may rise to the highest level in 20 years by March next year due to the pandemic-induced stress. Under Rajnish Kumar, the bank’s gross bad loans reduced by a third from Rs 1,86,115 crores in Q2 FY18 to Rs 1,29,661 crores in Q1 FY21. During the same period, the ratio of gross NPAs fell from 9.97 percent to 5.44 percent, and provision coverage ratio improved significantly from 65.1 percent to 86.3 percent. For FY20, the bank posted a historic high profit of almost Rs 14,500 crores, another feather in the Chairman’s cap. Kumar leaves the bank a lot more resilient than when he took charge on October 7, 2017. His biggest achievement, perhaps, is the swift and sure turnaround of the troubled Yes Bank, which was executed under Kumar’s chairmanship. The bank saw unprecedented support from the entire banking industry, helmed by State Bank of India, which pumped in the capital in the bank to take a majority stake, and brought much-needed comfort to investors and depositors alike. - cnbctv18

🍒 LIC Housing Finance disburses Rs 2,115 crore subsidy to over 1 lakh CLSS customers : Leading mortgage lender LIC Housing Finance has disbursed Rs 2,115 crore worth of subsidies to its customers under the credit-linked subsidy scheme (CLSS) as part of PM Awas Yojana since its inception in 2017, a top company official said. Under this scheme, the second-largest mortgage player has disbursed more than Rs 12,000 crore of affordable housing loans to 1,01,521 borrowers till September-end, Siddhartha Mohanty, the managing director and chief executive of LIC Housing Finance, told PTI. - financial express

🍒 Credit Wise Capital raises $6 million from family offices, angels : Credit Wise Capital (CWC), a consumer finance NBFC, has raised $6 million in a seed-funding round, which saw participation from marquee angel investors. The company intends to use these funds to grow its dealer network, increase geographical expansion, improve collection technology and underwriting models. The round witnessed investments from Ajay Goel, Stanford Business School alum and serial investor, Anuj Golecha, founder of Venture Catalysts, Gaurav Gandhi, director at EssGee group, Anup Agarwal, director of Shanti Group and Gaurav Singhvi among others.- Business Line

🍒 Private equity investments hit record high of $28.66 billion in 2020 : Private equity investments in India hit a record high of $28.66 billion till September end this calendar year, significantly over the $16.27 billion invested in entire 2019. In 2018, PE investments stood at $10.8 billion. Although PE investments in volume terms have seen a huge surge so far in 2020, there has been a drop in the number of deals, which came in at 560 so far this year as against 663 in entire 2019, data available with Refinitiv, a global provider of financial markets data, showed. In the last four years including 2020, the total PE investments have touched nearly $70 billion. - Business Line

🍒 September gold imports fall 59% YoY to 4-month low : India's gold imports in September fell 59% from a year earlier to the lowest level in four months, a government source said on Tuesday, as a drop in prices from a record high failed to lure buyers, which were postponing purchases anticipating more significant drop. The world's second-biggest consumer of the precious metal imported around 11 tonnes of gold in September, down from 27 tonnes a year ago, the source said. Business Line

🍒 Gold back above Rs 51,000 per 10 gram after 14 days, silver crosses Rs 61,000/kg : Gold prices rose by Rs 546 to Rs 51,044 per 10 gram in the Mumbai retail market on rupee depreciation and subdued global cues. The precious metal is trading flat, tracking a weak dollar and on worries over a global economic recovery. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,283, Rs 46,756 and Rs 51,044, respectively, plus 3 percent GST. Silver prices surged Rs 1,001 to Rs 61,112 per kg from its closing on October 5.

🍒 Over 300 stocks hit upper circuit as market surges on global cues : Bears have yet again been caught on the wrong foot. Benchmark indices Sensex and Nifty have staged a sharp recovery in line with improved global sentiments since September. Mirroring global sentiments, the Nifty rose 1.38 per cent, or 159 points, to 11,662. The Sensex gained 1.54 per cent, or 600 points, at 39,574. Over 300 stocks hit their upper circuit and 153 rose to new 52-week highs.

🍒 Rupee settles 17 paise lower at 73.46 against US dollar : The rupee pared its initial gains and settled 17 paise lower at 73.46 (provisional) against the US dollar on Tuesday. At the interbank forex market, the domestic unit opened at 73.17 tracking positive domestic equities and a weak greenback, but soon pared the gains and finally closed at 73.46, down 17 paise over its previous close of 73.29.

06.10.2020: Today's Banking / Financial

06.10.2020: Today's Banking / Financial News at a Glance

🍒 Bank Board recommends names for two SBI MDs : The Banks Board Bureau (BBB) Monday recommended the candidatures of Swaminathan Janakiraman and Ashwini Kumar Tewari for the two vacant managing director posts at the State Bank of India. While Janakiraman is now the deputy managing director – finance at SBI, Tewari heads the SBI Cards and Payment Services. Janakiraman had joined the country's largest lender in 1988 as a probationary officer and worked across the verticals both in India and New York. Similarly, Tewari was appointed as MD and CEO at the SBI Cards a few months ago as the incumbent Hardayal Prasad opted for voluntary retirement. In his previous role, Tewari was the country head of the US operations of SBI since April 2017. The BBB interfaced with 16 candidates from various nationalised banks and State Bank of India on October 5, for vacancies of Managing Director in SBI, the bureau said. Two other candidates including Prakash Chandra Kandpal and Alok Kumar Choudhary have been put on the reserve list for the vacancies. - economic times

🍒 SC asks Centre, RBI to file Kamath panel suggestions, their decisions on loan moratorium : The apex court's direction came after the Finance Ministry decided to grant relief to individual borrowers as well as medium and small industries by agreeing to waive compound interest (interest on interest) charged on loans of up to Rs 2 crores for a six-month moratorium period announced due to the pandemic. The Supreme Court asked the Centre and the RBI on Monday to place on record the K V Kamath committee recommendations on debt restructuring in view of COVID-19 related stress on various sectors as well as the notifications and circulars issued so far on loan moratorium. The apex court’s direction came after the Finance Ministry decision to grant relief to individual borrowers as well as medium and small industries by agreeing to waive compound interest (interest on interest) charged on loans of up to Rs 2 crores for a six-month moratorium period announced due to the pandemic. A bench comprising Justices Ashok Bhushan, R Subhash Reddy and M R Shah took up the pleas alleging that banks have decided to charge interest on the EMIs which have not been paid by borrowers from March 1 to August 31, taking benefit of the RBI’s loan moratorium scheme. - financial express

🍒 Bandhan Bank plans giant leap into retail lending as part of its evolution as universal bank : Private sector Bandhan Bank plans a giant leap into retail lending as part of its evolution as a universal bank with a five-year business plan. The predominantly microfinance lender would now go all out with car, two-wheeler, consumer durable loans to raise its profile with urban and semi-urban middle class borrowers, managing director Chandra Shekhar Ghosh told ET. The Kolkata-based lender recently hired Tata Capital's former retail asset head, Vineet Tripathi, to drive the new business lines. Tripathi’s social media profile showed he joined the bank in August. Ghosh said the bank would now energise its 1045 branches to push retail loan products, unlike in the past, when branches were used only to grow liability businesses. - economic times

🍒 Banks relieved as govt will foot bill for interest waiver : The government’s proposal to pick up the tab for the waiver of 'interest on interest' on loans of up to Rs 2 crore clears the uncertainty over bank earnings for the quarter, giving them room to offer liberal loan-rejig terms to stressed borrowers. The relief is likely to cost the Centre Rs 5,000-5,500 crore, according to the finance ministry’s initial estimates. Rating agency ICRA has pegged the cost at Rs 5,000-7,000 crore. Even those eligible borrowers who had not availed of the moratorium will get some relief, possibly through a partial waiver of interest on the principal during the moratorium period. The Supreme Court will on Monday take up the Centre’s affidavit on interest relief submitted on October 3. The government will seek parliament’s nod for the additional expenditure on this count. “It would cost about Rs 5,000-5,500 crore,” a government source told ET. This spending will be over and above Covid-related support of Rs 3.7 lakh crore to micro, small and medium enterprises (MSMEs) as well as Rs 70,000 crore assistance on home loans extended through the Garib Kalyan Yojana besides the Atmanirbhar package announced earlier.- economic times

🍒 September sees strongest recovery since pandemic broke out: HDFC : The Indian economy may be slowly returning to strength with the month of September marking the strongest turnaround since the pandemic broke out, India’s largest mortgage lender indicated on Monday. The lender added that business levels had surpassed those done same time last year. Citing its September quarter numbers HDFC said trends were indicative that business was reverting to pre-Covid levels. “The month of September 2020 has seen the strongest recovery since the outbreak of the pandemic and the levels have exceeded the levels in the corresponding month of the previous year,” HDFC said in an exchange notification. - economic times

🍒 Centre's Interest Waiver Plan Fails To Deal With "Many Issues": Top Court : The Supreme Court today said the centre's affidavit on waiving "interest on interest" on loans up to ₹ 2 crore, frozen during a six-month moratorium granted because of the coronavirus crisis, was not satisfactory and asked for a do-over in a week. The affidavit "fails to deal with several issues raised by petitioners", the court said. The central government has been asked to consider the concerns of the real estate and power producers in fresh affidavits. The Supreme Court also noted that "no consequential orders or circulars" were issued by the government or RBI on enforcing the centre's decisions. The top court was hearing petitions on a waiver of interest on deferred EMIs - or interest on interest - to help small borrowers during the coronavirus pandemic. - ndtv.

🍒 Accumulated loss of 17 RRBs surge to ₹6,467 crore : The three major stakeholders of Regional Rural Banks (RRBs) – Central government, sponsor public sector banks (PSBs) and the government of the State in which they operate – may have to worry about the future of 17 RRBs whose collective accumulated loss soared to ₹6,467 crore as of March-end 2020. Accumulated loss As of March-end 2019, 11 RRBs had a collective accumulated loss of ₹2,887 crore. The Central government has a 50 per cent shareholding in every RRB, with the sponsor public sector bank (PSB)/ commercial bank and the State government holding 35 per cent and 15 per cent stake, respectively. The RRBs with huge accumulated losses as of March-end 2020 include: Bangiya GVB (₹1,048 crore), Odisha GB (₹1,026 crore), Utkal GB (₹963 crore), Madhya Pradesh GB (₹656 crore), Madhyanchal GB (₹548 crore), Uttar Bihar GB (₹377 crore) and Assam GVB (₹372 crore), according to data compiled by the National Bank for Agriculture and Rural Development (NABARD). - Business Line

🍒 YES Bank registers gradual rise in Q2 deposit base : Private sector lender YES Bank has registered a gradual rise in deposit base in the second quarter of the fiscal as it focusses on normalcy and stability under the new management. According to provisional data released by the bank to the stock exchanges for the quarter ended September 30, 2020, its deposits have increased by 15.7 per cent to ₹1,35,815 crore from ₹1,17,360 crore as on June 30, 2020. It also marks a 28.9 per cent rise since March 31when total deposits were down at ₹1,05,364 crore. YES Bank had a new management and Managing Director and CEO in March after the Reserve Bank of India and the government worked out a reconstruction scheme for the troubled lender. The bank’s deposit base had witnessed a gradual erosion over the past few quarters. - Business Line

🍒 IndusInd Bank Q2: Deposits up 10%, net advances rise 2% : Private sector lender IndusInd Bank registered a 10 per cent increase in its deposits and a two per cent rise in its net advances as on September 30, 2020 compared to a year ago. In provisional data for the second quarter of the fiscal reported to the stock exchanges, the bank said its deposits grew by 10 per cent to ₹2.28 lakh crore as against ₹2.07 lakh crore as on September 30, 2019. Its deposits stood at ₹2.11 lakh crore at the end of the first quarter this fiscal. “Retail deposits and deposits from small business customers amounted to ₹75,610 crore as of September 30, 2020 as compared to ₹67,318 crore as of June 30, 2020,” it said. Net advances grew by two per cent to ₹2-lakh crore as on September 30, 2019 versus ₹1.97-lakh crore a year ago and ₹1.98-lakh crore as on June 30, 2020. CASA ratio was at 40.4 per cent at the end of the second quarter this fiscal compared to 41.4 per cent as on September 30, 2019. - Business Line

🍒 HDFC Bank advances up 16%, deposits rise 20% in Q2 : Private sector lender HDFC Bank registered a 16 per cent increase in advances, along with a 20 per cent growth in deposits in the second quarter of this fiscal.According to a regulatory filing on Monday with provisional numbers for the quarter ended September 30, 2020, the bank said its deposits were up at ₹10.3-lakh crore with a growth of around 16 per cent when compared to ₹8.97-lakh crore as of September 30, 2019. On a quarterly basis, deposits grew by nearly three per cent when compared to ₹10.03-lakh crore as of June 30, 2020. Its deposits amounted to about ₹12.29-lakh crore as of September 30, 2020, a growth of around 20 per cent when compared to ₹10.21-lakh crore as of September 30, 2019, and a growth of around 3 per cent when compared to ₹11.89-lakh crore as of June 30, 2020. - Business Line

🍒 PFRDA plans to rope in consultant for hiving off NPS Trust, structural rejig : Pension regulator PFRDA plans to engage a strategic management consultant to study and make recommendations in critical areas including organisational structure and segregation of roles and responsibilities of NPS Trust. Human resource and technological requirements are also areas that the proposed management consultant will be required to make recommendations, according to the Expression of Interest (EoI) invited from consultants. It maybe recalled that Pension Fund Regulatory and Development Authority (PFRDA) had undertaken the exercise of organisational restructuring in 2017 itself. However, with the proposed changes in the legal framework governing the functions of PFRDA (a Bill is expected in the next session), it has been decided to re-assess the organisational structure in terms of its suitability, effectiveness and its role in meeting the mandate given by the PFRDA Act, 2013. - Business Line

🍒 BFSL, ICSI launch co-branded credit card for Company Secretaries : BOB Financial Solutions Ltd (BFSL), a wholly-owned subsidiary of Bank of Baroda (BoB), and the Institute of Company Secretaries of India (ICSI), have launched an exclusive co-branded credit card for Company Secretaries (CS). The BoB-ICSI Diamond credit card will bring exclusive benefits and conveniences to Company Secretaries, who are influencers and opinion leaders in their own right, and are contributing in building a modern and Atmanirbhar (self-reliant) India, BFSL said in a statement. - Business Line

🍒 3,066 bank employees in Odisha test positive for COVID-19, SBI records largest numbers : More than 3,000 bank employees in Odisha have tested positive for COVID-19 till September 30 and 14 have died, as per the State Level Bankers' Committee (SLBC). Of the 3,066 bank employees who tested positive, a majority – 968 infected and one dead are staff of the State Bank of India (SBI). Among private banks, Axis Bank had 390 staff test positive; private banks on the whole have not seen any employee deaths. Details are as per a letter by SLBC Convenor Arupananda Jena on October 04, ANI reported. The Odisha Gramya Bank has recorded three employee deaths – the highest in a single bank - moneycontrol.

🍒 PNB To lead consortium of banks lending to UP's Gorakhpur Link Expressway : Punjab National Bank (PNB) will lead the consortium of banks that are providing financial assistance to the 91-kilometre-long Gorakhpur Link Expressway project in Uttar Pradesh. The UP cabinet has approved a proposal in this regard. PNB is providing a Rs 750 crore loan for the expressway project. The state government will borrow Rs 2,250 crore in all to complete the project. According to Chief Executive Officer (CEO) of UP Industrial and Expressways Authority (UPIEDA), Awaneesh Awasthi, Union Bank of India, Canara Bank, Indian Bank, Uco Bank, Bank of India and Bank of Maharashtra will be part of the consortium led by PNB. He said work is going on full swing on the expressway and till date 13.47 per cent land filling and 73.56 per cent CNG work has been done. - Business Standard

🍒 Managing people will be key to success for SBI's CFO Charanjit Singh Attra : The appointment of Charanjit Singh Attra as chief financial officer (CFO) of State Bank of India — the first c-suite hire through the lateral route at the public sector bank (PSB) — could open the gate for similar CXO-level appointments in other state-owned lenders. How the 49-year-old chartered accountant handles people-related issues in the country’s largest public sector bank would be keenly watched, both internally and by external stakeholders and peers, say experts from the sector. The PSB has so far only relied on internal talent to fill the position of CFO. Attra’s peers say two things seem to have worked in his favour in getting the coveted job. The 12-odd years spent in a private banking institution — ICICI Bank group — in the early part of his career. - Business Standard

🍒 SBI chairman Rajnish Kumar's YONO app target isn't overblown: Experts : A few weeks back when Rajnish Kumar, chairman, State Bank of India (SBI), said the bank’s YONO app must be valued at $40 billion and subsequently proposed that it be hived off into a separate subsidiary like SBI Cards & Payment Services, critics were doubting the efficacy of the strategy. The answer lies in understanding how the banking landscape has changed globally, and how India is progressing. ICBC, China Construction Bank, HSBC, and JPMorgan Chase ruled the charts in terms of market capitalisation in the US a decade ago. Now, they have made way for Visa, MasterCard, and PayPal, indicating the traditional lending ecosystem may not guarantee business relevance and market ranking for banks. SBI’s YONO, ICICI Bank’s Fino Payments, HDFC Bank’s PayZapp, and Axis Banks’s Freecharge, to name a few, show how Indian banks, too, have grasped this change. A report by Blume Ventures indicates Indian banks spend $11 billion annually towards technology, mostly to digitalise internal systems. - Business Standard

🍒 Gold prices rise to Rs 50,498 per 10 gram on weaker rupee; silver climbs Rs 847 per kg : Gold prices rose by Rs 85 to Rs 50,498 per 10 gram in the Mumbai retail market on rupee depreciation and tepid global cues on October 5. The precious metal is trading flat tracking weak US Dollar amid the signs of progress in US President Donald Trump’s health. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,256 plus 3 percent GST, while 24-carat 10 gram was Rs 50,498 plus GST. The 18-carat gold quoted at Rs 37,874 plus GST in the retail market. Silver prices soared Rs 847 to Rs 60,111 per kg from its closing on October 1.

🍒 Sensex rises 277 points; TCS zooms over 7 per cent : Rising for the third straight session, market benchmark Sensex finished 277 points higher on Monday, propelled by IT and banking counters. Starting off on a high note, the 30-share BSE gauge zoomed to the day’s peak at 39,263.85, before ceding some ground to settle at 38,973.70, up 276.65 points or 0.71 per cent.Likewise, the broader NSE Nifty rose 86.40 points or 0.76 per cent to close at 11,503.35.On the Sensex chart, IT major TCS rose the most, gaining over 7 per cent.In the process, the IT giant became the second Indian firm after Reliance Industries to cross the Rs 10 lakh crore market valuation mark.Other prominent gainers included Tata Steel, Sun Pharma, Infosys, Tech Mahindra, IndusInd Bank, HCL Tech, ICICI Bank, HUL and HDFC Bank. On the other hand, Bajaj Finserv, Bajaj Finance, Bharti Airtel, Bajaj Auto, PowerGrid and ITC were among the major laggards.

🍒 Rupee settles 16 paise lower at 73.29 against US dollar : The rupee depreciated by 16 paise to close at 73.29 (provisional) against the US dollar on Monday even as the domestic equity market was trading with significant gains. The Indian currency opened at 73.16 at the interbank forex market and touched an intra-day high of 73.08 and a low of 73.41 against the greenback.

05.10.2020: Today's Banking / Financial News

05.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI may consider ICICI Bank, Kotak Mahindra to bail out Lakshmi Vilas Bank, says experts : Will the Reserve Bank of India (RBI) rely on the mergers & acquisition (M&A) experience of private sector banks such as ICICI Bank and Kotak Mahindra Bank (KMB) to mount a rescue plan for the troubled Lakshmi Vilas Bank (LVB)? Financial market experts feel that if the proposed amalgamation of the ‘Clix Group’ with LVB, which could lead to surplus capital of about ₹1,500 crore from Clix Capital becoming available to the bank on merger, does not materialise then the latter’s merger with either ICICI Bank or Kotak Mahindra Bank may be the best option. They feel the regulator could possibly offer some regulatory dispensation to the acquiring banks to encourage a takeover. ICICI Bank has vast M&A experience, having acquired Bank of Madura (2000), Sangli Bank (2007) and Bank of Rajasthan (2013). KMB had acquired ING Vysya Bank in 2015. Moreover, ICICI Bank and KMB have raised capital in the last few months. ICICI Bank mopped up ₹15,000 crore via allotment to eligible qualified institutional buyers in August 2020. KMB raised ₹7,442.50 crore via a Qualified Institutional Placement (QIP) of equity shares in May 2020. The resources raised by these two banks could come in handy if they make up their mind on acquiring LVB. - Business Line

🍒 Regional rural banks incur net loss of Rs 2,206 crore in FY20: Nabard : Regional rural banks (RRBs) as a group reported net loss of Rs 2,206 crore in the fiscal year ended March 31, 2020, as against Rs 652-crore net loss in FY19, according to data published by Nabard. During FY 2019-20, 26 RRBs earned profit of Rs 2,203 crore, while 19 incurred losses of Rs 4,409 crore, the data showed.The data on RRBs, recently published by the National Bank for Agriculture and Rural Development (Nabard), is based on the data uploaded by the RRBs in the Ensure portal.As on March 31, 2020, there were 45 RRBs functioning in 685 districts of 26 states and three union territories (UTs). These RRBs were sponsored by 15 commercial banks and operating through a network of 21,850 branches.Gross non-performing assets as a percentage of gross loans outstanding of RRBs marginally declined to 10.4 per cent as on March 31, 2020, from 10.8 per cent as on March 31, 2019, the data showed.Share of standard, sub-standard, doubtful and loss assets stood at 89.6 per cent, 3.6 per cent, 6.5 per cent and 0.3 per cent, respectively, as of end March 2020.Eighteen of the 45 RRBs (as against 20 out of 53 RRBs as on March 31, 2019) had GNPA above 10 per cent as on March 31, 2020.RRBs, at aggregated level, achieved a growth of 8.6 per cent in their business in FY20 compared to a growth of 9.5 per cent in the previous year, according to the data.Total business of RRBs stood at Rs 7.77 lakh crore as on March 31, 2020. Deposits and advances of RRBs increased by 10.2 per cent and 9.5 per cent, respectively during FY2019-20. - Business Standard

🍒 Federal Bank Q2: Total deposits up 12 per cent, gross advances rise 6 per cent yoy : Private sector lender Federal Bank has reported a 12 per cent increase in its total deposits in the second quarter of the fiscal along with a six per cent jump in gross advances. According to provisional numbers reported by Federal Bank for the quarter ended September 30, 2020 in a regulatory filing, its total deposits amounted to Rs 1,56,747 crore as against Rs 1,39,547 crore a year ago.Gross advances stood at Rs 1,25,202 at the end of the second quarter this fiscal compared to Rs 1,17,622 crore a year ago. On a sequential basis too, the lender reported an increase in deposits as well as gross advances compared to the first quarter this fiscal. Customer deposits increased 13 per cent to Rs 152025 at the end of the second quarter from a year ago though certificates of deposits declined by 36 per cent to Rs 1,840 crore at the end of the second quarter from a year ago. CASA ratio was at 33.68 per cent as on September 30, 2020 versus 31.55 per cent a year ago.- Business Line

🍒 HDFC Bank's Ravi Santhanam in Forbes list of world's most influential CMOs : Ravi Santhanam, Chief Marketing Officer (CMO), HDFC Bank has been recognized in the Forbes list of 'The World's Most Influential CMOs'. Ranked at Number 39, he is the only CMO of an Indian company to be featured in the illustrious list which includes marketing heads of Apple, BMW, Lego, Adobe, Microsoft, P&G among others. This is the eighth edition of this annual list released by Forbes with research partners Sprinklr and LinkedIn. This year, 427 global CMOs were eligible for consideration. It is generated using data from news reports, websites, and social networks to measure influence. - economic times

🍒 Religare funds scam: Delhi court dismisses bail plea of former Laxmi Vilas Bank Vice President : A Delhi court has dismissed the bail plea of former Laxmi Vilas Bank Vice President Pradeep Kumar in a case related to alleged misappropriation of funds at Religare Finvest Ltd. Additional Chief Metropolitan Magistrate Vijeta Singh Rawat said as per the charge sheet there was prima facie incriminating material against Kumar. During the period of the alleged offence committed in 2019, Kumar was the Vice President and Relationship Head of North Regional Office (Delhi), of Laxmi Vilas Bank (LVB). Kumar was chargesheeted in the case by the Economic Offences Wing of the Delhi police for allegedly abusing his position and conspiring with the then management of RFL, RHC Holding Ltd, and Ranchem Ltd, to misappropriate a sum of Rs 791 crore. - economic times

🍒 Interest waiver: Those with home loans and personal loans to benefit the most : In a bid to handhold small borrowers and ensure that the burden of waving off compounding interest on loans for the six-month moratorium period does not fall on banks, the Centre, in an affidavit filed in the Supreme Court, has stated that it would bear the cost of the waiver relief. By capping the relief to only loans upto ₹2 crore and to the compound interest component (interest on interest), the Centre has limited its outgo to ₹5,000-6,000 crore. This is assuming that all borrowers are offered the relief — whether they opted for the moratorium or not. Interestingly, the RBI data (interest rate and credit limit-wise loans) as of March 2020, suggests that over 75 per cent of loans upto ₹2 crore are charged 6-12 per cent interest rates. Hence, nearly half of the ₹6,000-odd crore of interest on interest waiver will pertain to such loans that are currently charged 6-12 per cent. Loans that are charged over 20 per cent would also constitute over 15-18 per cent of the Centre’s proposed waiver relief. - Business Line

🍒 Former Union Bank of India official convicted in fraud case : The Special Judge for CBI Cases, Chennai, on Thursday sentenced R Kannan, former Chief Manager of Union Bank of India in Chennai’s Mount Road branch, to three years rigorous imprisonment with a fine of ₹2 lakh in connection with a bank fraud case involving top officials of Chennai-based National Medicines Private Ltd. In a press release, the Central investigating agency said it has registered a case on the allegations that between 2006 and 2007, the Directors of National Medicines conspired with Kannan and Parvathi Ramakrishnan, the then manager of Standard Chartered Bank, Chennai, with an intention to cheat the Union Bank of India. The CBI said that the bankers and the directors of the company have fraudulently availed enhanced cash credit (CC) facility from the bank by submitting disputed property as collateral security and diverted the sanctioned loan amount. “A loss to the tune of ₹6.19 crore was caused to Union Bank of India,” the release said. - Business Line

🍒 Loan Moratorium: Centre tells SC it will waive compound interest on specified loans of up to Rs 2 crore : Most individual borrowers of housing, educational and personal loans as well a sizeable section of MSMEs will benefit, as the government on Saturday agreed in the Supreme Court to waive compound interest on their loans of up to Rs 2 crore for the six-month (March-August) moratorium period. The waiver of interest on interest will also be given to all such loans by such categories of borrowers, whether or not they availed themselves of the moratorium facility. Bankers say while a precise estimate of the cost to exchequer of the move is hard to put out now, it could be anywhere between Rs 10,000 crore and Rs 20,000 crore, depending on the guidelines for implementation.However, the government argued strongly against extending such relief “for all types of loans for all categories of borrowers”, saying “such a blanket decision would cause a huge burden of Rs 6 lakh crore on banks, likely wiping out a major part of their net worth and even rendering most of them unviable”. - financial express

🍒 FPIs pull out Rs 3,419 crore in September : Snapping their three-month buying spree, overseas investors turned net sellers in Indian markets in September due to uncertainty ahead of the US presidential polls and surging coronavirus cases. Foreign investors withdrew ₹3,419 crore on net basis from Indian markets in September, according to depositories data. A net of ₹7,783 crore was withdrawn from equities while the debt segment saw inflows of ₹4,364 crore. Foreign portfolio investors (FPI) adopted a cautious stance ahead of the US presidential election and renewed fears due to rising Covid-19 cases, among others, experts said. - Business Line

🍒 Worst is behind, likely to complete RFL debt restructuring by December: Religare Enterprises chairperson : Having paid Rs 6,500 crore to lenders since the change of management in 2018, Religare Finvest Ltd (RFL) is likely to complete its debt restructuring by December and start new business from next financial year, Religare Enterprises Chairperson Rashmi Saluja said. RFL, a NBFC arm of Religare Enterprises Ltd, has been barred from undertaking fresh business as it is under corrective action plan (CAP) of the Reserve Bank of India (RBI) since January 2018 due to its weak financial health. The company has been in financial distress, primarily due to alleged misappropriation of funds by erstwhile promoters Shivinder Singh and his brother Malvinder Singh. “Worst is behind…while all other business are performing, RFL is slowly getting out of woods. Two years ago, all four wheels (of RFL) were in the ditch and the wheels were stuck. Now the wheels are on the ground and we are refuelling for a take off,” Saluja told PTI in an interview. - financial express

🍒 Market cap of 8 of 10 most valued firms zooms Rs 1.45 lakh crore; TCS biggest gainer : Eight of the 10 most valued companies added Rs 1,45,194.57 crore in their total market valuation last week with Tata Consultancy Services and HDFC Bank emerging as leading gainers. During the holiday-truncated week, the Sensex advanced 1,308.39 points or 3.49 percent. The market valuation of Tata Consultancy Services (TCS) zoomed Rs 37,692.7 crore to Rs 9,46,632.85 crore, emerging as the biggest gainer among the top 10 firms. HDFC Bank''s valuation jumped Rs 34,425.67 crore to Rs 6,09,039.90 crore. The market capitalisation of HDFC gained Rs 25,091.57 crore to Rs 3,21,430.66 crore. Reliance Industries Limited (RIL) added Rs 15,789.36 crore to Rs 15,04,587.18 crore and the valuation of ICICI Bank rose by Rs 14,244.15 crore to reach Rs 2,54,574.08 crore. - moneycontrol.

03.10.2020: Today's Banking / Financial News

 03.10.2020: Today's Banking / Financial News at a Glance

🍒 Banks sanctions Rs 1.86 lakh crore to 50 lakh MSMEs under credit guarantee scheme : The Finance Ministry on Thursday said banks have sanctioned loans of about Rs 1.86 lakh crore to 50 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, impacted by slowdown due to the coronavirus pandemic. Over 27 lakh MSME units have received about Rs 1,32,246 crore till September 29. The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package, announced by Finance Minister Nirmala Sitharaman in May to mitigate the distress caused by the lockdown due to COVID-19 by providing credit to different sectors, especially micro, small and medium enterprises (MSMEs). "As reported on 29.09.2020, by 12 Public Sector Banks, top 24 Private Sector Banks & 31 NBFCs, the total amount sanctioned to Non-Individual & individuals, under the 100 per cent Emergency Credit Line Guarantee Scheme stands at Rs 1,86,469 crore, of which Rs 1,32,246 crore has already been disbursed to 27,09,027 borrowers," a Finance Ministry statement said. - economic times

🍒 SBI appoints former EY Partner Charanjit Attra as new CFO : State Bank of India on Thursday announced the appointment of Charanjit Attra as its new chief financial officer, the lender said in an exchange filing. Attra is one of SBI’s latest lateral hires and will report to J Swaminathan, deputy managing director of the finance department. Prior to joining SBI, Attra worked as a partner at global consulting firm EY. In one of his earlier roles he served as the CFO of 3i Infotech and ICICI Securities. Attra will be responsible for overseeing statutory audit functions in the bank besides coordinating with the banking regulator and the National Financial Reporting Authority on auditor related issues. ET had reported in June that the state-owned lender had invited applications to laterally hire a chief financial officer on contract, offering to pay the candidate up to Rs 1 crore a year – significantly more than the standard salary of the bank’s chairman. - economic times

🍒 RBI approves appointment of CoD to run Dhanlaxmi Bank till appointment of CEO : Dhanlaxmi Bank on Thursday said that the RBI has approved a three-member interim committee of directors, headed by G Subramonia Iyer, to run the private sector bank after the shareholders voted out its MD and CEO Sunil Gurbaxani. The shareholders rejected the resolution for appointment of Gurbaxani as MD and CEO at the 93rd Annual General Meeting of the bank held on September 30. "Consequent to this, please note that Reserve Bank of India has, as requested by the Board of Directors, approved an interim arrangement for formation of a Committee of Directors to exercise the powers of Managing Director & CEO till such time a new MD & CEO takes charge," Dhanlaxmi Bank said in a regulatory filing. - economic times

🍒 Suryoday SFB to launch IPO of 2 crore equity shares : Suryoday Small Finance Bank (SSFB) is planning to launch an initial public offering of about 2 crore equity shares, comprising a fresh issue of about 1.16 crore shares and offer for sale (OFS) of about 84 lakh shares by the selling shareholders. As per small finance bank (SFB) licensing and operating guidelines, SSFB’s equity shares are required to be listed on the stock exchanges within three years from the date of reaching a net worth (that is tier I capital as defined by the RBI) of ?500 crore (which in SSFB’s case was November 30, 2017). So, the SFB has to list on or prior to November 29, 2020. - Business Line

🍒 Insurers welcome plan for standard term insurance product : Consumers looking to buy a term insurance product may soon have the option of a standard product. Coming in the backdrop of the Covid-19 pandemic that has led to rising demand for protection products in the life insurance segment, the regulator’s plan for a standard term product has also been welcomed by insurers. IRDAI Chairman Subhash Chandra Khuntia had recently said the regulator plans to introduce a standard term insurance product which would be introduced by all insurers. “It becomes much easier for policyholders to buy such products,” he had said, but he did not give further details.- Business Line

🍒 NBFCs reduce overseas borrowing, turn towards domestic banks : A strong rupee, abysmally low interest rate and abundant liquidity in the overseas market offers a perfect recipe for strong overseas borrowing. This along with growing risk aversion among the domestic lenders should have ideally pushed more Indian corporates to borrow abroad. But that was not the case. On the contrary, external commercial borrowings (ECBs) of India Inc, which was rapidly growing over the last few years, plunged to an 11-quarter low of $3.51 billion during the first quarter of the current fiscal as compared to $12 billion for the same quarter last year. This is a sharp drop from the quarterly high of $19 billion in Q4 FY20.- Business Line

🍒 Nabard launches sanitation literacy campaign : The National Bank for Agriculture and Rural Development (Nabard) on Friday launched a nationwide ‘Sanitation Literacy Campaign’. The development bank, which promotes sustainable and equitable agriculture and rural development, said an additional credit line opened with the financial institutions will improve sanitation infrastructure in the country. The objective of the campaign, which was launched on the occasion of the 151st birth anniversary of Mahatma Gandhi, is to create awareness to sustain behavioural change of the rural populace towards adopting good hygiene and sanitation practices. G R Chintala, Chairman, Nabard said, “The Covid-19 pandemic has reinforced the need for greater awareness for better water, sanitisation and hygiene infrastructure and enhanced the significance of the Swachh Bharat Mission. “This campaign will help engage with vulnerable communities that lack the right sanitation facilities and identify further funding requirements.” The campaign would continue till January 26, 2021.- Business Line

🍒 Guru Raghavendra Sahakara Bank depositors face an uncertain future : A former employee of an auto parts company, KV Madhusudan, 70 faces a strange dilemma. So do over 40,000-odd depositors of Guru Raghavendra Sahakara Bank which in January was banned from carrying out its operations after allegations of embezzlement came to the surface. Following the ban, the bank a few months later allowed the depositors to withdraw up to ₹35,000 and later increased the limit up to ₹1 lakh. However, the bank is only allowing depositors to either withdraw money from their savings bank (SB) account or pre-close their fixed deposit (FD) account to withdraw up to ₹1 lakh. After withdrawal, the balance amount (over and above ₹1 lakh) will lie in their respective SB accounts, and can only be withdrawn when RBI raises the limit. The depositors of the bank, consisting mostly of senior citizens, now wait impatiently for clarity on their life savings which are in the form of FD certificates. “This limit of ₹1 lakh set by RBI has put senior citizens like me in a quandary. After unlocking the FD, the amount will be in SB account earning no interest then why should we close the FD,” asks Madhusudan.- Business Line

🍒 After SBI, HDFC Bank may join race to set up NPCI rival : HDFC Bank, the country’s largest private lender by assets, may join the race to set up an umbrella entity for retail payments, sources aware of the matter told FE. The bank is still at a preliminary stage of work on this. It is the second bank after the State Bank of India (SBI) to explore the possibility of setting up a payments body, envisaged as a rival to the National Payments Corporation of India (NPCI). “The matter is still in the preliminary stages, but HDFC Bank is certainly considering the NUE option as a possibility,” said a person close to the development. Apart from the two banking majors, Jio, Paytm, BSE and the National Stock Exchange (NSE) are known to be contemplating the setting up of their own umbrella entities. Industry executive Naveen Surya, who earlier headed ItzCash and is currently chairman emeritus of the Payments Council of India (PCI), may also apply for an NUE licence in his individual capacity. - Financial Express

🍒 BharatPe aims Rs 1,000 cr loan disbursal to merchants this fiscal : Merchant payment facilitating network BharatPe on Friday said it has disbursed Rs 80 crore loan in September, and targets Rs 1,000 crore disbursal in 2020-21. BharatPe has recorded disbursal of over Rs 80 crore in September 2020 and facilitated loan disbursals to the tune of Rs 150 crore through its partners in the September quarter, it said in a release. “BharatPe has ambitious plans of increasing the number of loan disbursals by 7x this year and would disburse loans worth Rs 1,000 crore in FY21,” the release added. At a time when collateral-free business loans are difficult to avail from other financial institutions, BharatPe’s success in lending has been fuelled by its sachet-sized daily repayment mechanism that it enables through its UPI QR codes, the company said. Existing merchants can avail collateral-free loans of up to Rs 7 lakhs at low-interest rates and with minimal paperwork.The company said its newly launched BharatLoan product has received an unprecedented response from the merchant community.- Financial Express

🍒 Europe’s central bank moves toward introducing digital euro : With consumers increasingly using cashless ways to buy things, the European Central Bank on Friday took a step closer to issuing a digital version of the euro currency shared by 19 countries, saying it had to be ready to launch digital money if a changing world requires it. The central bank issued a comprehensive report outlining the reasons why it might need to take the step. The ECB also said it would hold public consultations on the idea with citizens, academics and bankers. It said no decision has been made, and that any digital euro would complement cash, not replace it. The consultations will start Oct. 12. “The euro belongs to Europeans and our mission is to be its guardian,” said Christine Lagarde, ECB President. “Europeans are increasingly turning to digital in the ways they spend, save and invest. Our role is to secure trust in money. This means making sure the euro is fit for the digital age. We should be prepared to issue a digital euro, should the need arise.” - Financial Express

🍒 Nirav Modi case: Fresh CBI charge sheet against retired PNB official for disproportionate assets : The CBI has filed a fresh charge sheet against Gokulnath Shetty, the Punjab National Bank Deputy Manager who allegedly helped Nirav Modi and Mehul Choksi perpetrate Rs 13000-crore fraud, and his wife for amassing disproportionate assets worth Rs 2.63 crore, officials said Friday. The agency has charged Shetty and his wife Asha Latha Shetty, a clerk in Indian Bank, under corruption charges for amassing assets worth over Rs 4.28 crore during the period 2011-17 when the scam was being perpetrated at the Brady House branch of PNB in Mumbai where he was posted, they said. Of the total assets, the CBI alleged they could not provide satisfactory explanation for assets worth Rs 2.63 crore, which were 2.38 times disproportionate to their known sources of income. The CBI looked into the relationship between Shetty and Modi-Choksi during which it dug into the assets amassed by the retired deputy manager, they said.- Financial Express

🍒 Insolvency & Bankruptcy Code: Successful resolution applicants can’t be permitted to withdraw offer, says NCLAT : The NCLAT has said once a resolution plan for a debt-ridden company is approved by the lenders, then the successful bidder cannot be permitted to withdraw its offer. A three-member NCLAT bench said the sanctity of resolution process has to be maintained and such withdrawal by a successful bidder “frustrate” the entire exercise of Corporate Insolvency Resolution Process (CIRP). Moreover, there is also no express provision in the Insolvency & Bankruptcy Code to allow any successful resolution applicant to “stage a U-turn”, it added. “We are of the considered opinion that the sanctity of resolution process has to be maintained and the resolution applicant whose resolution plan has been approved by Committee of Creditors cannot be permitted to withdraw its Resolution Plan,” said the bench headed by Acting Chairman Justice B L Bhat.- Financial Express

🍒 Franklin Templeton MF's 6 shut schemes generate Rs 8,262 crore since closure : Franklin Templeton Mutual Fund on October 2 said its six shut schemes have received Rs 8,262 crore from maturities, pre-payments and coupon payments since closing down in April. The schemes have received Rs 1,078 crore during September 1-15. This takes the total cash flows received till date since April 24 to Rs 8,262 crore, Franklin Templeton MF said in a statement. Franklin Templeton shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market. - Moneycontrol.

🍒 Sensex, Nifty drop 1% in September; 236 stocks in BSE 500 rise : September did not augur well for equity benchmarks Sensex and Nifty as both closed the month with losses. Lacklustre global cues, rising cases of COVID across the globe, caution ahead of approaching US elections, uncertainty over the stimulus package, and talks of another lockdown in several parts of the world kept investors' sentiment subdued. Sensex fell by 1.45 percent and Nifty dropped 1.23 percent in September. On the other hand, BSE Midcap inched up by 0.3 percent but the BSE Smallcap index logged strong gains of 3.71 percent. Among the sectoral indices, BSE IT rose 10.66 percent followed by Pharma, Consumer Durables and Teck indices.