23.10.2020: Today's Banking / Financial News

23.10.2020: Today's Banking / Financial News at a Glance

🍒 Bank credit up 5.66 percent, deposits rise 10.55 percent: RBI data : Bank credit grew by 5.66 per cent to Rs 103.44 lakh crore, while deposits increased by 10.55 per cent to Rs 143.02 lakh crore in the fortnight ended October 9, according to RBI data. In the fortnight ended October 11, 2019, bank credit had stood at Rs 97.89 lakh crore and deposits at Rs 129.38 lakh crore. In the previous fortnight ended September 25, 2020, bank credit had grown by 5.15 per cent to Rs 102.72 lakh crore and deposits rose by 10.51 per cent to Rs 142.64 lakh crore. On a year-on-year basis, non-food bank credit growth decelerated to 6 per cent in August as against 9.8 per cent in the same month last year, central bank data showed. Growth in loans to agriculture and allied activities rose 4.9 per cent in the reporting month, as compared to a growth of 6.8 per cent in August last year. - economic times

🍒 Fill up Non-Executive Director posts: PSBs to Finance Ministry : Public sector banks (PSBs) have requested the Finance Ministry to fill up Non-Executive Director positions to ensure adherence to corporate governance norms and constitution of board-level committees. Some of these positions have been vacant for almost seven years. Currently, there are vacancies in the category of Non-Executive Chairman, Workmen Employee Director, Officer Employee Director, and Director (under the Chartered Accountant category), and Part-time Non-official Directors, among others. With six PSBs getting merged into four PSBs with effect from April 1, there are now 12 state-owned banks in the country. Non-Executive Director vacancies exist in a majority of these banks. “All 12 PSBs have unfilled vacancies of Officer and Workmen Director positions. It is a purely political decision. “If the positions are vacant, the bank is free to do and undo things as per the select few on the board. Hence, (bad loan) write-offs are going on unchecked,” said S Nagarajan, General Secretary, All-India Bank Officers’ Association. He underscored that a PSB board without an Employee and Workmen Director can steamroll its decisions without any opposition.- Business Line

🍒 ‘UCO Bank yet to come out of RBI’s PCA framework’ : Despite complying with all key regulatory parameters for three subsequent quarters, UCO Bank is yet to come out of the Prompt Corrective Action (PCA) measure of the Reserve Bank of India. The bank has been posting a sequential growth in net profits for the last three quarters, and has also been able to consistently improve its asset quality by bringing down both gross and net non-performing assets (NPA). PCA is triggered when banks breach certain regulatory requirements such as minimum capital, return on asset, and quantum of non-performing asset. According to Atul Kumar Goel, MD and CEO, UCO Bank, while the bank has been able to adhere to all the four parameters required to come out of PCA, the regulator (RBI) might want to wait and assess the impact of the pandemic and the moratorium on asset quality in the next one or two quarters. “We have managed to adhere to all four parameters required to come out of PCA in the March, June and now in the September quarter. The call has to be now taken by the regulator. The impact of moratorium, if any, would be only seen in the December and March quarters. So, they may want to see our performance during these quarters,” Goel told newspersons in a virtual conference on Thursday. - Business Line

🍒 Indian Bank Q2 net profit rises 15 per cent to Rs 412 cr : State-owned Indian Bank on Thursday reported a 15 per cent rise in net profit at Rs 412.28 crore for the second quarter ended September, despite increase in provisions for bad loans. The bank’s net profit in July-September quarter of 2019-20 stood at Rs 358.56 crore. The results are not strictly comparable with that of previous year’s as Kolkata-based Allahabad Bank merged with Indian Bank on April 1, 2020. Indian Bank’s total income rose to Rs 11,669.11 crore during September quarter this year from Rs 6,045.32 crore in the same period of the previous fiscal. - Business Line

🍒 SBI Cards Q2 results: Net profit dips 46% to Rs 206 crore as NPA provisions rise : SBI Cards and Payment Services Ltd (SBI Card) the credit card arm of State Bank of India (SBI) reported a 46% drop in net profit in the quarter ended September 2020 to Rs 206 crore from Rs 381 crore a year earlier due to a rise in provisions as non perfoming assets (NPAs) spiked. Total provisions for NPAs and stressed loans more than doubled to Rs 862 crore from Rs 329 crore a year earlier, including an additional Rs 268 crore provision made in the second quarter, SBI Card said in a press release. Gross NPAs spiked sharply to 4.29% from 1.2% in June 2020 and was higher than the 2.33% reported a year earlier even as the company flagged uncertianties due to the economic disruption caused by the Covid 19 pandemic. - economic times

🍒 Payment operators must shift to interoperable QR code by March 2022: RBI : The Reserve Bank of India (RBI), on Thursday, said the Payment System Operators (PSOs) that use proprietary Quick Response (QR) codes have to shift to one or more interoperable QR codes by March 31, 2022. The two interoperable QR codes in existence – UPI QR and Bharat QR – will continue as it is at present, it added. No new proprietary QR codes shall henceforth be launched by any PSO for any payment transaction, the central bank said in a notification to all Authorised PSOs (banks and non-banks). The payment system operators ecosystem includes Cards Payment Networks; ATM Networks; entities issuing Pre-paid Payment Instruments; White Label ATM Operators; and Bharat Bill Payment Operating Units; among others. “QR Code is a type of a two-dimensional bar code. It consists of black squares arranged in a square grid on a white background. Imaging devices such as smartphone cameras can be used to read and interpret these codes. “...One can simply scan a QR code to pay utility bills, fuel, grocery, food, travel, and several other categories,” according to the Report of the Committee on the Analysis of QR Code.The RBI Committee was headed by DB Pathak, Professor Emeritus, IIT Bombay. - Business Line

🍒 Kotak Bank cuts interest rate on home loans by another 10 bps : Private sector Kotak Mahindra Bank, on Thursday, announced a further 10 basis points cut in the interest rate for its home loan products. “Kotak Mahindra Bank announced that it has reduced its rate on home loans by a further 10 basis points to 6.9 per cent per annum with effect from October 21, ,” it said in a statement. Consumers can avail Kotak’s festive season bonanza with home loans and balance transfer loans starting at 6.9 per cent per annum, it further said. Significantly, a day before, State Bank of India had also announced concession in home loan rates by as high as 25 basis points. SBI is also now offering interest rates starting as low as 6.9 per cent for a home loan of up to ?30 lakh and 7 per cent for above ?30 lakh.- Business Line

🍒 HDFC AMC Q2 PAT falls 8 per cent to Rs 338 cr : HDFC Asset Management Company (AMC) on Thursday reported a 8 per cent decline in profit after tax (PAT) at Rs 338.06 crore for the three months ended September 30, 2020. The company had posted a PAT of Rs 368.24 crore in the year-ago period, HDFC AMC said in a regulatory filing to the stock exchanges. Total income rose to Rs 569.95 crore in the quarter from Rs 549.07 crore in the corresponding quarter a year ago. The company’s average asset under management (AAUM) stood at Rs 3.75 lakh crore as of September 30, 2020 as against Rs 3.76 lakh crore on September 30, 2019.- Business Line

🍒 Pandemic beats DeMon: Jan Dhan accounts surge, by numbers and balance, in April-Oct : The no-frill bank accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) have crossed the 41-crore mark, thanks mainly to the surge in new joinees during the lockdown. As on October 14, the total number of Jan Dhan accounts stood at 41.05 crore with a total balance of ₹1,30,741 crore. Since April 1, when the number stood at 38 crore, 3.05 crore accounts were added. During the same period in 2019, the number of accounts went up from 35.39 crore to 37 crore, or a rise of 1.6 crore. Thus, the pandemic led to a 100 per cent increase in the opening of new Jan Dhan accounts. The rise in balance reveals a similar trend. From ₹11,000 crore on April 1, it jumped to ₹1,30,741 crore on October 14.- Business Line

🍒 ‘HFCs should have 60% of total assets towards housing finance’ : The Reserve Bank of India (RBI) has prescribed a transition path for registered housing finance companies (HFCs), whereby they should have at least 60 per cent of total assets towards housing finance by March 31, 2024. Further, as per the review of regulatory framework for HFCs, the central bank has specified ?20 crore as the minimum net owned funds (NOF) requirement for a company to commence housing finance as its principal business or carry on the business of housing finance as its principal business. According to the framework, HFCs shall maintain a liquidity buffer in terms of Liquidity Coverage Ratio (LCR), which will promote their resilience to potential liquidity disruptions by ensuring that they have sufficient High Quality Liquid Asset (HQLA) to survive any acute liquidity stress scenario lasting for 30 days. - Business Line

🍒 L&T Finance Q2 profit up 52% : L&T Finance Holdings registered a 52.2 per cent increase in consolidated net profit at ?265.12 crore in the second quarter of the fiscal against ?174.2 crore in the same period a year ago. Its total income, however, fell by 5.5 per cent in the July to September 2020 quarter to ?3,508.91 crore against ?3,711.85 crore a year ago. “With normalcy returning, net interest margins and fees have reached the desired range of 6.5 per cent to seven per cent, despite carrying a negative carry of ?64 crore on additional liquidity,” L&T Finance Holdings said in a statement on Thursday. - Business Line

🍒 RBI pegs minimum NOF for housing finance companies at Rs 25 crore : The Reserve Bank of India (RBI) on Thursday fixed the minimum Net Owned Fund (NOF) size for housing finance companies at Rs 25 crore. The housing finance companies (HFCs) holding a Certificate of Registration (CoR) and having an NOF of less than Rs 25 crore will be required to achieve NOF of Rs 15 crore by March 31, 2022 and Rs 25 crore by March 31, 2023, the Reserve Bank said in a notification. The RBI has issued the revised regulatory framework for HFCs. The RBI further said that it would be incumbent upon such HFCs whose NOF currently stands below Rs 20 crore to submit a statutory auditor's certificate to the central bank within a month evidencing compliance with the prescribed levels. "HFCs failing to achieve the prescribed level within the stipulated period shall not be eligible to hold the Certificate of Registration (CoR) as HFCs and registration for such HFCs shall be liable to be cancelled," the RBI said, adding such companies will be required to approach the RBI for conversion of their CoR from HFC to NBFC-Investment and Credit Companies.

🍒 Banks’ overall credit outstanding goes up by ?74,734 crore : Scheduled banks probably saw the highest fortnightly offtake of credit in the current financial year so far, with their overall credit outstanding going up by ?74,734 crore. Deposits of scheduled banks during the reporting fortnight ended October 9 lagged credit growth for the first time in the current financial year, growing ?43,893 crore in the reporting fortnight, according to the Reserve Bank of India’s (RBI) daa on scheduled bank’s statement of position in India. The revival in credit growth comes in the backdrop of the economy entering the so- called “busy season” for credit offtake amid the raging pandemic. - Business Line

🍒 BCFI moves to become self-regulatory organisation : The board of the Business Correspondent Federation of India (BCFI) has approved the formation of a self-regulatory organisation (SRO), subject to approval from the Reserve Bank of India. It has also appointed Sunil Kulkarni as the new head of BCFI and CEO (designate) for the SRO. “The team at BCFI will improvise upon the code of conduct and grievance redressal mechanism developed last year, and implement them in earnest among its members with key focus towards ensuring customer protection and betterment of service standards,” the BCFI said in a statement on Thursday. - Business Line

🍒 Gold prices steady at Rs 51,350 per 10 gram; silver falls Rs 484 a kg : Gold prices were steady at Rs 51,350 per 10 gram in the Mumbai retail market on rupee appreciation and negative global cues. The precious metal declined in the international market, weighed down by firm dollar and stalemate over the US stimulus package before November 3 vote. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,037 plus 3 percent GST, while 24-carat 10 gram was Rs 51,350 plus GST. The 18-carat gold quoted at Rs 38,513 plus GST in the retail market. Silver prices declined Rs 484 to Rs 62,779 per kg from its closing on October 21. 

🍒 Equitas SFB issue subscribed twice : The IPO of Equitas Small Finance Bank was subscribed 1.95 times on the last day of bidding on Thursday. It received bids for 22.58 crore shares against 11.58 crore on offer, according to data available with the NSE. The portion reserved for qualified institutional buyers was subscribed 3.91 times while HNIs by just 0.22 times. Retail investors portion got subscribed by two times and employees by 1.84 times. The IPO, which comprises a fresh issue of 280 crore and an offer-for-sale of 7.20 crore shares, has came out with a price band of ?32-33. Equitas SFB had raised ?139.68 crore from anchor investors. - Business Line

🍒 Sensex snaps four-session winning run, ends 149 points lower : he 30-share BSE index settled 148.82 points or 0.37 per cent lower at 40,558.49. The broader NSE Nifty slipped 41.20 points or 0.35 per cent to 11,896.45. IndusInd Bank was the top laggard in the Sensex pack, shedding around 3 per cent, followed by ICICI Bank, Titan, Infosys, HDFC Bank, Nestle India, Sun Pharma and Reliance Industries. On the other hand, NTPC, Bharti Airtel, Bajaj Finance and Axis Bank were among the gainers.- Business Line

🍒 Rupee settles 4 paise higher at 73.54 against US dollar : The rupee appreciated by 4 paise to close at 73.54 against the US dollar on Thursday, as sustained foreign fund inflows strengthened investor sentiment. However, a strong dollar against major currencies overseas restricted the rupee’s gain, forex dealers said. At the interbank forex market, the rupee opened lower at 73.77, but pared all its losses to finally settle at 73.54, registering a rise of 4 paise..

22.10.2020: Today's Banking / Financial News

22.10.2020: Today's Banking / Financial News at a Glance

🍒 Banks can deploy on-tap TLTRO funds in agriculture, retail and MSMEs: RBI : The Reserve Bank of India on Wednesday said that banks can deploy money drawn from Rs 1 trillion on-tap targeted long term repo operations (on-tap TLTRO) in six sectors - agriculture, agri-infrastructure, secured retail, MSMEs, and drugs, pharmaceuticals and healthcare. Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial paper and non-convertible debentures issued by the entities in specific sectors. Liquidity availed under the scheme can also be used to extend loans and advances to these sectors, the RBI said in guidelines issued for the scheme. On tap TLTROs are intended to enable banks to conduct their operations smoothly and seamlessly without being hindered by illiquidity frictions. This was done in view of the borrowing requirements of the Centre and states in the second half of 2020-21 and the likely pick-up in demand for credit as the recovery gathers strength, RBI had said in early this month. - Business Standard

🍒 India at doorstep of economic revival, says RBI Governor : Reserve Bank Governor Shaktikanta Das on Wednesday said the country is at the doorstep of economic revival on the back of accommodative monetary and fiscal policies being pursued by the central bank and the government.Shaktikanta Das was speaking at the launch of the book ‘Portraits of Power: Half a Century of Being at Ringside’, written by former bureaucrat and current chairman of the Finance Commission N K Singh. “We are almost at the doorstep of revival process and it’s very important that the financial entities have adequate capital (to support growth),” he said. - Business Line

🍒 Festival season offer: SBI announces concession in home loan rates : State Bank of India on Wednesday announced concession in home loan rates of up to 25 basis points (bps) as part of its festival season offer. The country’s largest bank, in a statement, said home loan customers would get an interest concession of 20 bps for buying homes of above ₹75 lakh based on CIBIL (Credit Bureau) score. Additionally, 5 bps concession will be offered for home loans if applied through YONO, SBI’s digital banking platform. One basis point is equal to one-hundredth of a percentage point. SBI also said it is offering credit score based concessions of up to 20 bps, up from 10 bps earlier, for a home loan of above ₹30 lakh to ₹2 crore across India. This concession would also be applicable for home loan customers for a loan amount of up to ₹3 crore in eight metro cities, it added. An additional 5 bps concession for all home loans is given if applied through YONO, the statement said. - Business Line

🍒 YES Bank offers discounts on credit card; loans at competitive rates : Yes Bank on Wednesday introduced festival season offers with discounts on processing fee on loans, low-cost EMIs, gift vouchers, cashbacks as well as various consumer loans at competitive interest rates. Unveiling the 'Khushiyon Ki Karein Zimmedari Se Tayyari' campaign, Yes Bank said customers can avail hassle-free loans personal and business loans, two-wheeler and auto loans up to 100 per cent of on-road prices at competitive interest rates, topped up with tailored options and flexible payment plans. In addition to these offerings on easy loans, customers can enjoy benefit of over 100 attractive deals on Yes Bank credit cards with rewards, Yes Bank said in a release. Under the various offers available, the lender said it will offer car loans beginning from 7.99 per cent with up to 100 per cent on-road prices, besides longer tenor option of up to 8 years. - Business Stndard

🍒 HSBC to cut up to 300 jobs in UK commercial banking overhaul: Sources : HSBC has launched a restructuring of its commercial banking business in Britain, a source familiar with the matter told Reuters on Wednesday, resulting in around 300 job losses. "In line with the Group strategy announced in February, we continue to restructure and review the roles required to transform the bank," a spokesman for HSBC said. Europe's biggest bank in June resumed plans to cut around 35,000 jobs it had put on ice after the coronavirus outbreak, as Europe's biggest bank grapples with the impact on its already falling profits. Chief Executive Noel Quinn has said the moves are necessary to improve the banks profits, as economic forecasts point to a challenging time ahead for the Asia-focused lender. - economic times

🍒 Surging UPI failure rates worry banks : The record surge in online payments since the onset of the pandemic is testing the digital infrastructure of public sector banks beset by sharp spikes in failed transactions, data from the National Payments Corporation of India (NPCI) shows. Ten of the top 30 banks using the country’s unified payment interface ( UPI) network recorded failure rates of over 3% for the month of September, latest data showed, nine of these ten banks are state-owned. United Bank of India recorded the highest rate of technical decline at 12.4% followed by Canara Bank at 5.9% and State Bank of India at 5.3% in September. In comparison, before July, the technical decline rates for most of the top thirty banks stood at less than 1% according to NPCI data. - economic times

🍒 Mudra loans surpass FY20 target by 5% at ₹3.37-lakh cr : Small business loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) have exceeded the target set for the financial year ended March 31, 2020, at ₹3,37,495 crore. The target set by the Government of India under PMMY for FY20 was ₹3.25-lakh crore, which was distributed across various lending institutions, banks, MFIs and NBFCs based on their outreach and presence in various parts of the country. According to the latest data available, sanctions in FY20 registered a 5 per cent growth over the previous year, which registered loan sanctions worth ₹3,21,721 crore. - Business Line

🍒 Rates on small savings way higher than they should be under the ‘committed formula’ : Small savings schemes offered by the post office have always found favour with savers, as they offer notably higher rates than bank deposits. While this anomaly was intended to be set right by aligning rates on small savings to market rates from April 2016, latest data suggests that the wide disparity still persists. According to the RBI’s monetary policy report, the existing rates (for the October-December quarter) offered by various small savings schemes are higher by 83-203 bps than the rates based on the ‘committed formula’. For instance, while the formula-based rate for the popular public provident fund (PPF) is 6.27 per cent (based on corresponding G-Sec yield and spread), the scheme currently offers 7.1 per cent. Similarly, the five-year NSC offers 6.8 per cent currently, as against the formula-based rate of 5.65 per cent. The senior citizen savings scheme (SCSS) offers 7.4 per cent, 111 bps higher than what it should be according to the formula. - Business Line

🍒 Aatmanirbhar Bharat: Raghuram Rajan cautions against import substitution by erecting tariffs : India would do well not to focus on import substitution by erecting tariffs under the Aatmanirbhar Bharat package, said Raghuram Rajan, former Governor of the RBI on Wednesday. “If the focus under Aatmanirbhar is on import substitution by erecting tariffs – which we have done lot in the last few years – it is a direction we tried before and failed. I would caution against going that direction,” said Rajan at a webinar on ‘India’s Third Pillar – The Way Forward’, organised by the Centre for Financial Studies at Bhavan’s SPJIMR. - Business Line

🍒 IRDAI to tighten insurance advertising norms : Insurers will soon have to be more cautious in their advertisements as the insurance regulator is in the process of bringing out comprehensive regulation. As per the draft Insurance Regulatory and Disclosure Regulations 2020, released by the IRDAI, advertisements that make claims beyond the ability of the policy and describe benefits that do not match policy provisions will be treated as “unfair and misleading” advertisements. They also cannot use terms or phrases that convey a fabricated sense of security, the draft regulations said. “All insurance advertisements should ensure that communications are clear, fair and not misleading, and they should use material and design to present information legibly and in an accessible manner,” the draft said. - Business Line

🍒 Bajaj Finserv Q2 profit falls 18% : Bajaj Finserv Ltd (BFS) reported an 18 per cent drop in consolidated net profit at ₹986 crore in the second quarter ended September-end 2020 against ₹1,204 crore in the year-ago period. BFS is the holding company for the various financial services businesses under the Bajaj Group. The holding company’s bottomline was weighed down as Bajaj Finance Ltd (BFL) reported a 36 per cent year-on-year (yoy) decline in consolidated net profit at ₹965 crore and Bajaj Allianz Life Insurance Company Ltd (BALIC) reported a 53 per cent yoy drop in shareholders’ net profit at ₹98 crore. - Business Line

🍒 IRDAI moots basic standard cover against cyber attacks : The Insurance Regulatory and Development Authority of India (IRDAI) has formed a working group to examine the need for standard cyber liability insurance products, chaired by P Umesh, Consultant-Liability Insurance. Observing that cyber attacks are on the rise with a number of high-profile data breaches amid the Covid-19 pandemic, the regulator said cyber security is the “most important need” for all sectors today to address the numerous risks posed by cyber attacks. The general liability policies do not cover cyber risks, and cyber cover products currently available are highly customised for clients. - Business Line

🍒 Hasten claim settlements in flood-hit States: IRDAI : The insurance regulator has directed all general and standalone health insurers to take immediate action for quick registration and disposal of claims arising out of floods in parts of Telangana, Andhra Pradesh and neighbouring States. “The recent floods (October 2020) have caused immense loss to property in parts of Telangana, Andhra Pradesh and neighbouring States. There is an urgent need for the insurance industry to take immediate steps to mitigate the hardships of the affected insured population,” said Yegnapriya Bharath, Chief General Manager (Non-Life), Insurance Regulatory and Development Authority of India (IRDAI), in a circular.- Business Line

🍒 Australia’s Westpac selling stake in buy-now-pay-later firm Zip : Westpac Banking Corp said on Wednesday it would sell its 10.7 per cent stake in buy-now-pay-later firm Zip Co Ltd in a deal valued at about A$368 million ($260 million), as it aims to trim its portfolio and improve its capital position. Australia’s second-largest lender, whose capital has been eroded by a record lawsuit settlement and surge in bad-debt provisions due to the coronavirus outbreak, said the sale will add around 8 basis points to its common equity tier 1 capital ratio. - Business Line

🍒 Your name should not mislead about your role: AMFI tells MF distributors : The Association of Mutual Funds in India (AMFI) has released a list of 39 permissible and 52 non-permissible names for mutual fund distributors (MFDs). It has directed distributors follow the SEBI diktat banning the use of nomenclature such as ‘independent financial advisor’ (IFA) and ‘wealth advisor’, unless registered with SEBI as such. SEBI has amended the Investment Advisor Regulations, prohibiting the use of words such as advisor, IFA, wealth advisor and ‘similar names’ by MFDs from October. The amendment was proposed in February and enacted in July. However, the implementation of the amendment was deferred to October at the request of MFDs. - Business Line

🍒 Central govt employees not covered under PLB scheme to get upto Rs 7,000 as monthly ad-hoc bonus : Central government employees not covered by any productivity-linked bonus scheme will get upto Rs 7,000 in monthly ad-hoc bonus for emoluments in the last fiscal, according to a finance ministry memorandum on Wednesday. The festive bonus will be applicable to employees of the central para military forces and the armed forces as well as some Union Territory (UT) administration employees, the memorandum said. The grant of non productivity-linked bonus (non-PLB) or ad-hoc will be applicable only to those employees who were in service on March 30, 2020 and worked for six continuous months in the previous fiscal, the ministry said.. - Business Line

🍒 Cabinet to soon consider new PSE policy: DEA Secretary : The Union Cabinet will soon consider a new public sector enterprises policy that will define strategic sectors which would have not more than four state-owned firms, Economic Affairs Secretary Tarun Bajaj said on Wednesday. As part of the 'Aatmanirbhar Bharat Abhiyan' package, the government in May had announced that there will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised. Under the policy, a list of strategic sectors will be notified where there will be at least one and a maximum of four public sector enterprise, apart from private sector companies. - economic times

🍒 Govt plans to extend PLI scheme to 7-8 more sectors to promote manufacturing: DEA Secretary : Enthused by initial response of industry with regard to the production-linked incentive (PLI) scheme, Economic Affairs Secretary Tarun Bajaj on Wednesday said the government is considering an extension of the scheme to 7-8 more sectors to promote domestic manufacturing. With the view to make India a manufacturing hub, the government recently announced the PLI scheme for mobile phones, pharma products and medical equipment sectors. "I have a lot of confidence and hope on the PLI scheme that we have brought out for mobile phones, pharma products and medical equipment, and in the offing are about 7-8 sectors where the PLI scheme would be extended," Bajaj said while addressing a virtual CII conference. - economic times

🍒 Gold prices climb to highest level since September 18, at Rs 51,366/10 gm; silver gains Rs 1,085/kg : Gold prices climbed Rs 390 to Rs 51,366 per 10 gram in the Mumbai retail market on a weaker rupee and positive global cues. The precious metal settled at the highest level since September 18 in India amid growing optimism over the US stimulus package before the election. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,051 plus 3 percent GST, while 24-carat 10 gram was Rs 51,366 plus GST. The 18-carat gold quoted at Rs 38,525 plus GST in the retail market. Silver prices jumped Rs 1,085 to Rs 63,263 per kg from its closing on October 20.

🍒 SEBI slaps fines on Kirloskar brothers for insider trading; levies ₹32-crore penalty : The promoters of Pune-based Kirloskar Brothers have been penalised by SEBI in a decade-old insider-trading case. The regulator has asked Rahul and Atul Kirloskar to pay up ₹31.21 crore in 45 days. They have also been banned from dealing in the markets for six months. - Business Line

🍒 Sensex rises 163 points; Nifty tops 11,900 level : Extending its gains for the fourth session, equity benchmark Sensex ended 163 points higher on Wednesday, led by index majors HDFC twins and ICICI Bank. After gyrating 825.54 points in a highly volatile session, the 30-share BSE index ended 162.94 points or 0.40 per cent higher at 40,707.31.Similarly, the broader NSE Nifty rose 40.85 points or 0.34 per cent to finish at 11,937.65. It touched an intradday high of 12,018.35.PowerGrid was the top gainer in the Sensex pack, surging over 4 per cent, followed by Bharti Airtel, Tata Steel, NTPC, HDFC Bank, UltraTech Cement and Kotak Bank. On the other hand, TCS, Nestle India, Reliance Industries and HCL Tech were among the laggards.

🍒 Rupee pares early gains, settles 9 paise lower at 73.58 against US dollar : The rupee pared its initial gains and depreciated 9 paise to settle at 73.58 (provisional) against the US dollar on Wednesday, as heavy selling in domestic equities weighed on investor sentiment. At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.39, pared the gains and finally closed at 73.58 against the greenback, registering a decline of 9 paise over its previous close of 73.49.

21.10.2020: Today's Banking / Financial News

21.10.2020: Today's Banking / Financial News at a Glance

🍒 Bank of Baroda ties up with Toyota Kirloskar Motor : Bank of Baroda (BoB) has entered into a tie-up with Toyota Kirloskar Motor (TKM), whereby the bank will be one of the preferred financiers for the entire range of vehicles sold by the latter. India’s third-largest public sector bank, in a statement, said that under the tie-up, customers can avail customised solutions such as high on-road funding of 90 per cent, long repayment period of 84 months, no prepayment or foreclosure charges. On the other hand, TKM dealers will benefit from ‘digitised supply chain finance’ with competitive interest rates.Murali Ramaswami, Executive Director, BoB, said: “This alliance gives us an opportunity to penetrate deep into the relationship with automobile dealers and augment our dealer finance portfolio through our branches spread across the country. “Given the huge potential to cross-sell our other products to these dealers, we are hopeful that this agreement would give us mutual synergies by way of strengthening our presence in supply chain financing segments on one hand and increased market penetration for TKM on the other hand.” - Business Line

🍒 Indian Bank launches credit scheme for start-ups in pact with IITMIC : Public sector lender Indian Bank has introduced an initiative for funding start-ups, ‘IND Spring Board’, in collaboration with the IIT-Madras Incubation Cell (IITMIC). The Chennai-headquartered bank seeks to bridge the gap in funding for start-ups through this collaboration with IITMIC. Under the deal, IITMIC will refer start-ups with proven technology and established cash flows to the bank and also extend advisory to the bank on the business model. The bank will extend loans of up to ₹50 crore to these start-ups for their working capital requirements or purchase of machinery, equipment. “It is a known fact that banks find it difficult to fund start-ups, as they do not meet the requirements under traditional models of financing. The business models involving high technology, the lack of visibility of cash flows, credit history, the high burn rate, the high failure rate among start-ups make the process of due diligence for assessing viability by banks difficult. Resultantly, this segment has been almost completely funded by seed capital, or private equity from India/ abroad,” said Padmaja Chunduru, MD and CEO of Indian Bank.- Business Line

🍒 Bank of Baroda completes IT integration of former Vijaya Bank branches : Within one-and-a-half years of bringing Vijaya Bank under its fold, state-run Bank of Baroda (BoB) on Monday said it has completed the technical integration of over 1,900 branches of erstwhile Bengaluru-headquartered lender. With the completion of this migration, around 21 million customers from all Vijaya Bank branches have been seamlessly migrated to BoB, a release said. In a first three-way amalgamation, Vijaya Bank and Dena Bank were merged with Bank of Baroda from April 1, 2019. The bank's technology partner for IT integration is Accenture. The migration of erstwhile Vijaya Bank was executed remotely during the ongoing pandemic with no impact on business continuity, the bank said. The integrated technology architecture gives former Vijaya Bank customers the ability to opt for Bank of Baroda's entire suite of offerings, while continuing to use their existing payment instruments until further notice, the bank's chief technology officer Sharad Saxena said in the release. Accenture is now helping align former Dena Bank's IT systems with BoB, the release said. - Businessstandard

🍒 Festival offerings: Axis Bank offers discount on debit, credit card purchases : Kick-starting its festival season offerings, Axis Bank on Tuesday announced a host of discounts on various consumer platforms, as well as loans at special rates. Under the 'Dil se Open Celebrations' that will offer deals and discounts on more than 1 lakh branded products on purchase through Axis Bank credit and debit cards, the lender said it has partnered with some top brands for the festival season offer. The bank is also offering some key benefits to customers who are in need of loan, offering home loans starting at 6.90 per cent as well as car loans at 7.99 per cent and up to 100 per cent road funding. In the offer, retail and corporate customers can avail benefits from Axis Bank as well as its subsidiary companies Axis Finance and Axis Direct, it said in a release. - economic times

🍒 Banks introduce convenience fee for cash deposits in machines : Private banks have started charging a convenience fee for cash deposits by customers in cash recyclers during non-business hours and bank holidays. While Axis Bank had already started levying the charge earlier this year, ICICI Bank, too, plans to levy it from November. “Effective November 1, 2020, a convenience fee of ₹50 per transaction, will be levied on cash deposited in the cash acceptor or recycler machines on bank holidays and between 6:00 pm and 8:00 am on working days,” ICICI Bank said in a recent communication. - Business Line

🍒 HDB Financial Services plans launch of new products, eyes higher growth : HDFC Bank’s non-banking finance subsidiary, HDB Financial Services, saw loan growth of just 2.3 per cent in the second quarter of the fiscal, but is now looking at rolling out new products and is confident of higher growth. “They have a lot of new products...the prospects are bright. They have gone into gold loans micro finance, two-wheeler loans, second-hand car loans, and they are looking at a few new products. Growth will come back there as well,” said HDFC Bank’s Managing Director and CEO Aditya Puri in an analyst call after the second quarter results on October 17. - Business Line

🍒 CBI books former PNB official in bribery case : The CBI has booked retired deputy manager Gokulnath Shetty, the main accused in the ₹13,000-crore Punjab National Bank fraud allegedly perpetrated by Mehul Choksi and Nirav Modi, in a fresh case of receiving a bribe of ₹1.08 crore from Rishika Financials that arranged bank guarantees for Gitanjali Gems, officials said. It is alleged that the owner of Rishika Financials, Debajyoti Dutta, was in the business of arranging quotes of Letters of Undertaking (LoUs) from foreign funding banks, they said on Monday.- Business Line

🍒 Jana Small Finance Bank plans 600 branches by March next year : Small finance lender Jana Small Finance Bank on Tuesday opened its 500th branch in Amruthahalli, Bangalore and said it will convert its remaining asset centres into bank branches to have over 600 branches by March next year. The lender caters to 40 lakh customers through its 500 bank branches and over 100 asset centres/ outlets. "Even during COVID times, the passion of our bankers has allowed us to open new bank branches. All the new branches have a digitised environment and products, which help serve the underserved," the bank's managing director and CEO Ajay Kanwal said at the launch of the 500th branch. The bank serves underbanked customers through various products, including zero balance savings accounts, fixed deposits with attractive interest rates, collateral-free loans and affordable housing loan schemes. It offers loans to MSMEs, agriculture, individuals, affordable housing and two-wheeler buyers. The bank also provides gold loans to customers. - economic times

🍒 KVG Bank opens Aadhaar enrolment centre : Karnataka Vikas Grameen Bank (KVGB), a regional rural bank sponsored by Canara Bank, has opened its 63rd Aadhaar enrolment centre in the premises of its head office branch in Dharwad on Tuesday. Inaugurating the centre, P Gopi Krishna, Chairman of the bank, said Aadhaar is an integral part of people’s lives and is the cornerstone of all facilities. The bank will provide Aadhaar enrolment and updation facilities to the public, including all its customers, at this centre. Customers have to bring any of the approved documents as proofs of residence and identity with them. The process can be completed in about 10-15 minutes, he said. - Business Line

🍒 Equitas Small Finance Bank finalises allocation of 4-crore equity shares to anchor investors : The Listing Committee of the Board of Directors of Equitas Small Finance Bank (ESFB) has finalised the allocation of about 4.23 crore equity shares to 35 anchor investors at the price of ₹33 per equity share (including a premium of ₹23 per equity share), aggregating ₹139.68 crore. The large anchor investors include ICICI Prudential Life Insurance Company; ITPL-Invesco India Contra Fund Reg-RCF; SBI Life Insurance Company; Franklin India Smaller Companies Fund; Mirae Asset Large Cap Fund; IIFL Special Opportunities Fund-Series 4. These investors invested 8.95 per cent each in the anchor investor portion. - Business Line

🍒 Personal Guarantors’ insolvency: IBBI seeks to transfer pending petitions to Supreme Court : Insolvency regulator IBBI has moved the Supreme Court, seeking transfer of batch of pending petitions before various High Courts on the challenge of IBC provisions related to insolvency of ‘personal guarantors’. The apex court bench of Justices L Nageswara Rao, Hemant Gupta and Ajay Rastogi will hear the IBBI plea on October 28, official sources said. It may be recalled that various writ petitions werefiled in more than one High Court, which raise substantial questions of law of general importance. All these pending writ petitions challenge the constitutional validity of Part III ( deals with insolvency resolution for individuals and partnership firms) of the Insolvency and Bankruptcy Code. - Business Line

🍒 PMC Bank to close down 15 branches in Mumbai : Scam-hit Punjab and Maharashtra Co-operative (PMC) Bank has decided to close down 15 branches in the Mumbai Metropolitan Region (MMR) and shift their business to nine other branches in a bid to save on rental outgo and other operating expenses. This consolidation of branches comes in the wake of PMC Bank deciding to shift its main branch located at Bhandup Station Road (West) to another branch in the same suburb late last month. PMC Bank also plansto sell its owned assets in Palghar and Nanded branches (both in Maharashtra). - Business Line

🍒 Gehlot urges PM to annul cooperative-related amendments of banking law : Terming some amendments in the Banking Regulation Act contrary to the basic spirit of states' cooperative banks, Rajasthan Chief Minister Ashok Gehlot has urged Prime Minister Narendra Modi to restore the original cooperative-related provisions of the banking law. Gehlot has written to the chief minister making his request, an official statement said on Tuesday. Through Bill No 56 recently passed in Parliament, sections 10 and 10A of the Banking Regulation Act have been made effective for cooperative banks, the chief minister wrote to the PM n his letter. - Business Standard

🍒 S&P Global Ratings: HDFC Bank will continue to outperform : In a thumbs up to the country’s largest private sector lender, S&P Global Ratings on Tuesday said that HDFC Bank has sufficient financial headroom to withstand downside risks from tough operating conditions in India. The bank’s results for the first half of fiscal 2021 (ending March 31, 2021) were resilient and in line with expectations, it further said. HDFC Bank posted an 18.4 per cent growth in its net profit in the second quarter of the fiscal year. “We expect HDFC Bank’s growth and earnings to significantly outperform peers’,” S& P Global Ratings said, adding that the bank’s loan book grew a robust 16 per cent year-on-year in the first half of fiscal 2021 driven by wholesale loans. - Business Line

🍒 EPFO records 10.05 lakh new enrolments in August : Net new enrolments with retirement fund body EPFO rose to 10.05 lakh in August from 7.48 lakh in July 2020, according to its latest payroll data, providing a perspective on employment in the formal sector amid the coronavirus pandemic. Provisional payroll data released by the EPFO last month had shown that net new enrolments stood at 8.45 lakh in July this year. The figure has now been revised down to 7.48 lakh. The net enrolments with the Employees' Provident Fund Organisation ( EPFO) had dropped to 5.72 lakh in March 2020 from 10.21 lakh in February, according to the payroll data released in May. - Business Line

🍒 HC restrains Canara Bank from taking coercive action against a MSME : The Delhi High Court has passed an interim order restraining Canara Bank from taking any coercive action against an MSME whose accounts were declared as Non- Performing Assets (NPA) last year. The case of the petitioner MSME is that RBI issued guidelines dated 1 January 2019 relating to restructuring of MSME Accounts that had become stressed, thereby allowing one-time restructuring of existing loans. Vide communication dated 31 December 2019, a Sanction Memorandum was executed by Canara Bank whereby it restructured the credit facilities extended to the petitioner. On 13 July 2020, Canara Bank informed the petitioners that it was not eligible for OTR scheme for advances and that the restructuring scheme given on 31 December 2019 stands recalled. - Live Mint

🍒 FDI up 16% to $27.1 billion in April-August: Govt data : Foreign direct investment (FDI) in India has increased by 16 percent year-on-year to $27.1 billion during April-August this year, the Commerce and Industry Ministry said on October 20. During April-August last year, India had received FDI worth $23.35 billion. The ministry said that the total FDI, which includes reinvested earnings, grew by 13 percent to $35.73 billion. "It is the highest ever for the first 5 months of a financial year and 13 percent higher as compared to the first five months of 2019-20 ($31.60 billion)," it added. - Business Line

🍒 Gold prices fall marginally to Rs 50,976 per 10 gram, silver drops Rs 362 a kg : Gold prices fell marginally by 47 to Rs 50,976 per 10 gram in the Mumbai retail market tracking weak global cues despite a weaker dollar. The precious metal continues to trade in a narrow range amidst the caution set in ahead of the deadline to reach an agreement on a new US coronavirus, diminishing the metal’s appeal. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,694 plus 3 percent GST, while 24-carat 10 gram was Rs 50,976 plus GST. The 18-carat gold quoted at Rs 38,232 plus GST in the retail market. Silver prices dropped Rs 362 to Rs 62,178 per kg from its closing on October 19.

🍒 Sensex ends 113 points higher; HCL Tech spurts 4 per cent : The 30-share BSE index settled 112.77 points or 0.28 per cent higher at 40,544.37. The broader NSE Nifty rose 23.75 points or 0.20 per cent to 11,896.80. HCL Tech was the top gainer in the Sensex pack, rallying over 4 per cent, followed by Tech Mahindra, Asian Paints, Bharti Airtel, HDFC Bank, L&T, TCS, M&M, Nestle India and Infosys. On the other hand, ONGC, PowerGrid, NTPC, Reliance Industries, ICICI Bank, Tata Steel, HDFC and SBI were among the laggards. According to traders, the domestic stock market was broadly driven by buying sentiment in index-heavyweights HDFC Bank, HCL Tech, Infosys and TCS.

🍒 Rupee settles 12 paise lower at 73.49 against US dollar : The rupee depreciated by 12 paise and settled for the day at 73.49 (provisional) against the US dollar on Tuesday. However, capital inflows and strong domestic equities limited the local currency’s fall to some extent. The Indian currency opened at 73.36 at the interbank forex market and, after witnessing a volatile trading session, closed at 73.49 against the American currency, down 12 paise over its previous closing price.

*🙏🏻 Forwarded as received🙏🏻*

20.10.2020: Today's Banking / Financial News

20.10.2020: Today's Banking / Financial News at a Glance

🍒 New privatization policy ready; Cabinet to discuss note on 'strategic sectors' soon: After months of inter-government discussions, the proposal to define ‘strategic sectors’ is slated to be taken up by the Union Cabinet within the next few weeks, Moneycontrol has learnt from senior government sources. “The cabinet note was circulated to 49 central ministries and departments. There were a lot of inputs, but the note is now ready,” said a top government official, who spoke on the condition of anonymity. The person added that the note could be up for consideration within 10-15 days. “Banking and insurance will be designated as strategic sectors,” the officials said. - Moneycontrol.

🍒 Centre may have no stake in public sector banks after privatisation : The government is veering towards the view that exiting a public sector bank should be total when it is privatised. To make the sale attractive, however, the government wants the Reserve Bank of India (RBI) to relax the rules on ownership in private-sector banks. A top government source said there had been intense discussion among the Prime Minister’s Office (PMO), the finance ministry, and the RBI on what level of stake should be retained. There have also been talks with specialists outside the government this financial year, particularly since July, when the PMO had asked the officers concerned for a thorough debate on the subject, spread over two days. Since then, after several iterations, government officials have come round to the view not to retain any shareholding in a bank which has to be divested. It will be impossible to make a strategic partner believe the government will stay off board decisions “even if it has only 10 per cent shareholding in a bank”, the source said. For instance, under the Indian Companies Act, a shareholder with 10 per cent of the company’s paid-up share capital, by a written notice, may requisition the board to convene an extraordinary general meeting. There are other ways in which the government will assert its presence and this tension with the new management will not help the bank grow. Business Standard.

🍒 Transmission lower at weakly-capitalised banks during easing cycle, says RBI report : Banks with higher capital ratios transmit monetary policy actions more smoothly than banks with lower capital base. Given that the chunk of the banking sector lending pertains to public sector banks and they do not have excess capital, it is difficult for them to extend credit without improving their capital position during the downturn of the current business cycle. Despite the RBI’s easing policy since 2014 (except for two intermittent rate hikes in 2018), credit growth has not picked up in the past few years, signalling weakening of bank lending channel of monetary policy transmission. These are some of the findings of a recent study by the RBI in its working paper titled ‘Bank Capital and Monetary Policy Transmission in India’.- Business Line

🍒 Banks sanction Rs 1.35 lakh cr concessional loans to 1.5 cr KCC card holder farmers : The Finance Ministry on Thursday said banks have covered 1.5 crore farmers under the Kisan Credit Card (KCC) scheme to sanction credit limit of Rs 1.35 lakh crore to help them meet financial requirements during the COVID-19 crisis. As part of the Aatmanirbhar Bharat Package, the government has announced to cover 2.5 crore farmers under the KCC scheme with a credit boost of Rs 2 lakh crore through a special saturation drive. "As a result of concerted and sustained efforts by the banks and other stakeholders in the direction of providing access to concessional credit by the farmers, including fishermen and dairy farmers, a major milestone target of covering more than 1.5 crore farmers under KCC, with sanctioned credit limit of Rs.1.35 lakh crore has been achieved," an official statement said. - Economic Times

🍒 Bank of Baroda, Accenture complete technology integration of former Vijaya Bank's branches :  Accenture and Bank of Baroda have successfully completed the technology integration of the former Vijaya Banks branches with Bank of Baroda part of the post-merger integration of the three-way merger of public sector banks in India. Accenture is now helping align former Dena Banks IT systems with Bank of Baroda, a joint statement said on Monday. The merger of Vijaya Bank and Dena Bank with Bank of Baroda in 2019 created the country's third largest public sector bank. Upon completion, the combined technology architecture will help the merged entity seamlessly integrate its India- wide customer service and business operations network of nearly 9,000 bank branches and more than 12,000 ATMs, it said.- Economic Times

🍒 Bank of Maharashtra posts 13% rise in Q2 net profit : Bank of Maharashtra (BoM) reported a 13 per cent increase in net profit at ₹130 crore in the second quarter ended September 30, 2020, against ₹115 crore in the year-ago quarter. The Pune-headquartered public sector bank’s net interest income edged up 4 per cent year-on-year (yoy) to ₹1,120 crore (₹1,073 crore in the year-ago quarter). Other income rose 14 per cent yoy to ₹451 crore (₹396 crore). AS Rajeev, MD and CEO, BoM, said only ₹1,000 crore to ₹1,500 crore (or 1-2 per cent of the total advances) of the Covid-19- related stressed accounts will need restructuring. Of this, the bank has so far restructured small accounts, including retail and micro, small and medium enterprise (MSME), aggregating about Rs 42 crore. - Business Line

🍒 CSB Bank Q2 profit jumps to Rs 69 crore : CSB Bank on Monday reported over two-fold jump in net profit at Rs 68.9 crore for the quarter ended September 30, 2020. It had posted a net profit of Rs 24.6 crore in the second quarter of 2019-20. The bank’s half-yearly profit after tax is at a record high of Rs 122.50 crore with Return on Assets or RoA (annualised) of 1.13 per cent despite having made a healthy provision of Rs 58.2 crore for COVID-19 during April-September, CSB Bank said in a regulatory filing. Total income grew to Rs 567.55 crore during September quarter of 2020-21 as against Rs 431.07 crore in the year-ago period. The bank registered a rise in gross non-performing assets (NPAs) to 3.04 per cent of gross advances at September-end 2020 from 2.86 per cent by the same period of 2019. - financial express

🍒 Centre to ensure interest waiver benefits to small borrowers by Nov 2 : The Union government is set to pass on the benefits of the compound interest waiver to small borrowers before November 2. Banks, on the other hand, have started making additional provisioning based on their own judgment of the loan books in balance sheet for the second quarter following the Supreme Court’s standstill order on classifying loans as non-performing assets (NPA). “We are putting all our efforts to ensure that we pass on compound interest waiver to borrowers before the SC deadline,” a top government official said, requesting anonymity. Both state-owned and private lenders will be asked to refund the compound interest waiver sum to all borrowers, with loans up to Rs 2 crore, before November 2 and file a claim with the government subsequently. However, the government is likely to frame a scheme that will spell out the modalities to be followed by lenders. It will be applicable to all borrowers — irrespective of whether they availed moratorium or not but the calculation of computing waiver by banks may vary according to the type of loan. - Business Standard.

🍒 India must not neglect bank recapitalisation despite pandemic, says Viral Acharya : India is neglecting bank recapitalisation as it focuses on debt moratoriums and interest waivers for borrowers amid the COVID-19 pandemic, a former central bank official told Reuters on Monday. Indian banks are saddled with over $120 billion in bad debt, and in severely stressed conditions the bad-loan ratio could nearly double by March, according to Reserve Bank of India projections. Restoring banks' capital is critical for aiding a meaningful recovery, but there has been little focus on the matter, former RBI Deputy Governor Viral Acharya said. "This lack of focus is tantamount to kicking the can down the road and jettisoning financial stability for short-term gains," said Acharya, who recently wrote a book titled the "Quest for Restoring Financial Stability in India". "This repeated mistake has prevented India from recovering well from adverse shocks," Acharya said. His comments came weeks after India offered to waive the compounded interest component on all loans up to 20 million rupees following a legal challenge to the terms of a six-month moratorium.- Economic Times

🍒 Accumulated losses vs share premium a/c balances: PSB proposal will improve ability to service AT-I bonds: ICRA : The recent proposal by some public sector banks (PSB) to set-off their accumulated losses against the share premium account balances could improve the ability of these PSBs to service their AT (Additional Tier)-I bonds, according to ICRA. Four PSBs – Bank of India (BoI), Bank of Maharashtra (BoM), Punjab National Bank (PNB) and Union Bank of India (Union) – recently secured shareholders’ approval to set-off their accumulated losses against the share premium account balances and await regulatory approval. - Business Line

🍒 NCLT approves JSW Steel’s resolution plan for Asian Colour Coated Ispat Ltd : The Delhi Bench of National Company Law Tribunal on Monday approved the resolution plan submitted by JSW Steel to acquire bankrupt steel company Asian Colour Coated Ispat Ltd (ACCIL) for Rs 1,550 crore. “JSW Steel Coated Products, wholly owned subsidiary of JSW Steel, to acquire Asian Colour Coated with certain modification in the resolution plan approved by the lenders,” JSW Steel said in a statement. The written order is awaited. In 2018, ACCIL was included in the Reserve Bank of India’s second list of defaulters on which banks were asked to take corrective action. State Bank of India, Punjab National Bank and JM Financial are among the lenders to Asian Colour Coated Ispat.- Economic Times

🍒 Fino Payments Bank to add 300 more points at BPCL outlets in Tamil Nadu :  Fino Payments Bank is planning to add another 300 points at BPCL outlets to its existing 1,075 in Tamil Nadu, to help truck drivers to get fleet cards recharged by paying equivalent cash, without any hassles, a top official said on Monday. Recharging the Bharat Petroleum (BPCL) SmartFleet cards that are used to pay for fuel has been a challenge to truck drivers for quite some time and in order to ease this discomfort, Fino with BPCL has started such facilities, its State head, Dhanasekaran said. The digitised cash in the form of prepaid fleet cards allows drivers to make payments for fuel at BPCL outlets, which also completely frees BPCL from handling the cash given by the drivers, Dhanasekaran told reporters here after inaugurating a facility at Perundurai in Erode district.- Economic Times

🍒 Urban unemployment fell to 8.4% in July-September 2019: Government : Unemployment in urban areas fell to 8.4% in July- September 2019 from 8.9% in the June quarter last year, data released by the Ministry of Statistics and Programme Implementation (MoSPI) in the quarterly bulletin of the Periodic Labour Force Survey (PLFS) showed. Urban unemployment in the age group 15-29 years was 20.6%. Among states, urban unemployment was higher than the national average in Kerala, Uttar Pradesh, Rajasthan, Andhra Pradesh, Delhi, Bihar, Chhattisgarh, Madhya Pradesh and Telangana, among others. The rate of urban joblessness in the quarter ended September 30, 2018 was 9.7%. Urban unemployment declined in the three quarters spanning January till September 2019. - Economic Times

🍒 IBA move on officers’ wage revision: Bank unions to embark on action programmes : Bank officers, owing allegiance to four unions, have decided to embark on action programmes, including withdrawal of extra cooperation, work only till 6 pm and not work on Sundays and holidays, after the Indian Banks’ Association (IBA) informed their them of its inability to conclude and ink the joint note pertaining to officers’ wage revision. The four officers unions that have decided to retaliate with agitational programmes in a phased manner are: the All-India Bank Officers’ Confederation (AIBOC), the All-India Bank Officers’ Association (AIBOA), the Indian National Bank Officers’ Congress (INBOC), and the National Organisation of Bank Officers (NOBO). A memorandum of understanding was signed on July 22, where an amount of ₹7,898 crore was allocated representing 15 per cent hike in wages with effect from November 1, 2017, in the banking industry, the unions said in a joint statement. - Business Line

🍒 Paytm aims to issue 20 lakh co-branded credit cards in next 12-18 months : Homegrown digital financial services platform Paytm plans to issue 20 lakh co-branded credit cards over the next 12 to 18 months for which it will partner with various card issuers. In a statement on Monday, Paytm said it is working to democratise access to a formal credit system for the masses and is building the country’s ‘next generation credit cards’. “The company is aiming to transform the credit market by enabling ‘new to credit’ users to join the digital economy,” it said, adding that it is designing an innovative digital experience on its app allowing users to manage their overall spends and have full control over the card usage.- Business Line

🍒 HDFC Life Insurance Q2 net profit up 5.6% : Private sector HDFC Life Insurance registered a 5.6 per cent increase in net profit for the quarter ended September 30, 2020, at ₹326.09 crore. Its net profit amounted to ₹308.69 crore in the same period a year ago. It registered a 34.8 per cent increase in its net premium income to ₹10,045.44 crore in the July to September quarter this fiscal, compared to ₹7,453.68 crore a year ago. In a statement on Monday, HDFC Life said its private market share within the group and overall new business segment stood at 27.4 per cent and 23.3 per cent, respectively, in the first half of this fiscal. - Business Line

🍒 Vineet Nayyar resigns as Executive Vice-Chairman of IL&FS Group : Vineet Nayyar has resigned as Executive Vice-Chairman of IL&FS Group citing medical reasons. “The board of IL&FS Group today announced the resignation of Vineet Nayyar as the Executive Vice-Chairman of IL&FS Group. Nayyarhas requested the board to relieve him of his duties as Executive Vice-Chairman of IL&FS with effect from October 31on grounds of indifferent health,” said a statement from IL&FS  - Business Line

🍒 Transfer pricing: CBDT notifies tolerance range for AY 2020-21 : The Central Board of Direct Taxes (CBDT) has notified the “tolerance range” of transfer price for the assessment year 2020-21. It has re-notified the prevailing 1 per cent tolerance range for wholesale trading and the 3 per cent range for all other transactions undertaken during the financial year ending March 31, 2020. The notified tolerance range has been consistently at 1 per cent and 3 per cent in the recent years. If the CBDT had been bit magnanimous, it could have expanded it and provided more comfort to MNCs, claimed tax experts. “This is an opportunity lost as the CBDT could have used this to give more comfort to the multinational companies in the current Covid-19 times,” said Amit Agarwal, Partner, Nangia & Co. - Business Line

🍒 Edelweiss Asset Management raises ₹6,600 crore in ESOF III : Edelweiss Alternative Asset Advisors (EAAA) on Monday announced the final close of its ₹6,600-crore alternative investment fund, ESOF III. “This fund raise, amidst the subdued economic climate, is a strong endorsement of the opportunities in the Indian alternative asset management space, as well as the robust and unique private debt platform of Edelweiss Asset Management (EAM),” Edelweiss Financial Services said in a statement. The ESOF III strategy has generated strong investor interest and has received commitments from marquee global institutional investors, which include recent investments by the Canadian Ontario Teachers’ Pension Plan Board, Florida’s State Board of Administration, Swedish Pension Fund-AP4 and a European Insurance Investor, among others, it further said. - Business Line

🍒 As realty sector revives, LIC Housing aims for double-digit growth in FY21 : LIC Housing Finance sees bright prospects to record double-digit growth this fiscal, supported by the return of home loan growth to pre-Covid-19 levels, government push, revival in affordable housing segment, and its new products and support measures. “As of now, sentiments are improving day by day. We expect a positive rub-off in the realty space, with the overall economy opening in phases. A big chunk of an upwardly mobile middle-class segment, urbanisation rates, and the emerging concept of work from home will be able to sustain the demand. At the current rate, we can look forward to a double-digit growth towards the end of the current financial year,” Siddhartha Mohanty, MD and CEO of LIC Housing Finance, told BusinessLine. - Business Line

🍒 Kapil Wadhwan offers to settle all claims of DHFL; alleges 'outside forces trying to depress DHFL asset value’ : In what could throw a spanner in the ongoing debt resolution process of scam-hit Dewan Housing Finance Corporation Ltd, its former promoter Kapil Wadhwan has written to the RBI-appointed administrator of DHFL, claiming attempts by “outside forces” to depress the value of the assets. Pegging the total estimated profit from about 10 projects of DHFL at close to ₹44,000 crore, Wadhawan, who is currently lodged in a Mumbai jail, has alleged an attempt to suppress the true value. The letter was written from inside Taloja Jail on October 17, which was the last day for submission of bids for the debt-laden housing finance company under the insolvency process.  - Business Line

🍒 Experts moot widening microinsurance sector on the lines of SFBs : A committee of experts on insurance has recommended to IRDAI amendments in the current regulatory framework and relaxing the entry-level rules for standalone microinsurance entities, including co-operatives. In the backdrop of the pandemic, experts have underlined the immediate need to expand the coverage of microinsurance sector on the lines of what small finance bank have done for financial inclusion – catering to the underprivileged low-income groups. The Insurance Regulatory and Development Authority of India (IRDAI), in February, appointed an expert committee to come up with recommendations on feasibility of standalone microinsurance through co-operatives, mutual or companies. - Business Line

🍒 No more extension of BPCL privatisation bid deadline: DIPAM Secy : BPCL privatisation bid deadline will not be extended for the fifth time, as the government’s strategic disinvestment programme that was hit by the pandemic is back on track, DIPAM Secretary said Monday. The government had on four occasions extended the date of putting in the preliminary expression of interest for buying out the majority stake in Bharat Petroleum Corp Ltd (BPCL). The current deadline is November 16. “We had a serious COVID impact on strategic disinvestment, investors asked for time, particularly with respect to key transactions. I hope that further extensions may not be there, especially in BPCL where the current date is November 16.?So hopefully, we will be able to move through,” Tuhin Kanta Pandey, Secretary in the Department of Investment and Public Asset Management (DIPAM), told PTI. - financial express

🍒 Gold prices today fall for second day, silver rates drop sharply : Gold and silver prices in India edged lower today, tracking muted global rates. On MCX, December gold futures fell for the second day as prices slipped 0.22% to ₹50437 per 10 gram while silver futures fell 0.7% to ₹61,250 per kg. In the previous session, gold had settled 0.3% lower while silver had edged up 0.2%. In India, gold prices have lost momentum since hitting a record high of ₹56,200 in August, following the same trajectory as that of global rates. 

🍒 Sensex rallies 449 pts; Nifty tops 11,850 : Equity benchmark Sensex rallied 449 points on Monday, led by heavy buying in banking and financial counters amid largely positive cues from global markets. The 30-share BSE index ended 448.62 points or 1.12 per cent higher at 40,431.60. The broader NSE Nifty surged 110.60 points or 0.94 per cent to 11,873.05. ICICI Bank was the top gainer in the Sensex pack, jumping over 5 per cent, followed by Axis Bank, Nestle India, SBI, HDFC, ONGC and Kotak Bank. On the other hand, Bajaj Auto, TCS, Bharti Airtel, M&M and Maruti were among the laggards.

🍒 Rupee falls 2 paise to 73.37 against US dollar : The rupee settled on a flat note and fell 2 paise to 73.37 against the American currency on Monday even as the domestic equity market was trading with significant gains. The local unit opened at 73.38 against the US dollar at the interbank forex market and finally finished the day at 73.37 against the greenback, down by just 2 paise over its previous close of 73.35.

19.10.2020: Today's Banking / Financial News

19.10.2020: Today's Banking / Financial News at a Glance

🍒 Higher NPAs hinder monetary policy transmission: RBI paper : High incidence of non-performing assets (NPAs) in banks acts as a major roadblock in transmission of monetary policy actions of the Reserve Bank, a working paper prepared by the officials of the central bank said. The working paper also made a strong case for capital injection in state-owned banks, arguing that such a move would increase the credit flow to the real sector in addition to ensuing smoother transmission of monetary policy. "Presence of non-performing assets in a bank also weakens monetary policy transmission and lowers the loan growth rate," said the working paper co-authored by Silu Muduli and Harendra Behera, Department of Economic and Policy Research (DEPR), RBI. The RBI said the views expressed in the paper are those of authors and not of the Reserve Bank of India. - economic times

🍒 Retail cheque payments down to a trickle in FY20 to 2.96 per cent: RBI data : The aggressive push to a digital payments and settlement system has paid rich dividend to the Reserve Bank as the share of paper clearing in retail payments has come to trickle in FY2020, show the latest RBI data. In FY2020, the share of paper clearing in total retail payments plunged to just 2.96 per cent in terms of volume and to 20.08 per cent in terms of value, the data showed. In FY2016, when the central bank began to push digital payments aggressively on the back of the contentious note-ban, paper/cheque clearings accounted for a high of 15.81 per cent in volume and nearly half in terms of value at 46.08 per cent of the total retail payments. That the efforts towards digitization have been very successful is clear from the steady fall in the share of paper clearing. From 15.81 per cent in volume and 46.08 per cent in terms of value in FY2016, the same shrunk to 11.18 per cent and 36.79 per cent, respectively, in FY2017. - Business Line

🍒 Women beneficiaries comprise maximum number of a/c holders under PMJDY at 55% : More than half of bank accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) are held by women beneficiaries, according to an RTI reply. However, there is no gender-wise data when it comes to amount held by women and men account holders. The number of accounts till September 9, 2020, under PMJDY was 40.63 crore, of which 22.44 crore accounts were held by women and 18.19 crore by men, said the RTI reply to Madhya Pradesh-based activist Chandra Shekhar Gaur. The deposits in these PMJDY accounts witnessed an 8.5 per cent rise till early September of the current fiscal year to nearly Rs 1.30 lakh crore, according to the information provided by the finance ministry. The total balance under the PMJDY accounts on April 1, 2020, was Rs 119,680.86 crore, which grew by 8.5 per cent to Rs 129,811.06 crore by September 9, 2020, the government said in the Right to Information (RTI) query. - economic times

🍒 Shriram Housing Finance looking at 50-60% increase in loan disbursement in FY21 : Mortgage lender Shriram Housing Finance is looking at around 50-60 per cent increase in loan disbursement to Rs 1,800 crore in the current financial year, a top company official said. The company, promoted by Shriram City Union Finance, had disbursed Rs 1,127 crore in the fiscal ended March 31, 2020. In the first quarter, we didn’t do much business. Despite that, in FY21, we will do about 50-60 per cent more business than what we did in FY20. We will end this year with a disbursement of Rs 1,800 crore, the company’s managing director and CEO Ravi Subramanian told PTI. In the first quarter of the current fiscal, the housing financier disbursed Rs 77.4 crore, a decline of 68.1 per cent year-on-year, owing to the nationwide lockdown imposed to contain the spread of the coronavirus. In the second quarter of FY21, it disbursed around Rs 520 crore, which was 20-25 per cent more than what it disburses in every quarter, he said. The biggest tumbling block was COVID-19 in Q1, but we have come back on trajectory. Growth in Q3 is more than Q2, and growth in Q4 will be more than Q3, he said. - financial express

🍒 DHFL lenders staring at ₹65,000-crore haircut : Lenders to Dewan Housing Finance Corporation Ltd (DHFL) may have to take a ₹50,000-65,000 crore haircut, with none of the four bidders offering more than ₹20,000 crore to acquire the debt-laden housing finance company (HFC) under the Insolvency and Bankruptcy Code (IBC). The bidding process ended on Saturday with offers submitted by Adani Group, Piramal Enterprise, US-based distressed asset fund Oaktree Capital and Hong Kong’s private banking firm SC Lowy. - Business Line

🍒 DLF raises Rs 2,400 crore from SBI to refinance debt, fund ongoing commercial projects : Realty major DLF's rental arm DCCDL has raised Rs 2,400 crore debt from India's largest lender SBI to refinance its existing debt and fund future expansion plans, a senior company official said. In an interview with PTI, DLF's group chief financial officer (CFO) Vivek Anand said the debt has been raised at a very attractive interest rate of 7.35 percent, enabling the company to reduce interest cost. DLF Cyber City Developers Ltd (DCCDL), the joint venture between DLF and Singapore sovereign fund GIC, has 33 million sq ft of office and retail properties generating an annual rental income of Rs 3,500 crore. DLF holds 66.66 percent stake in DCCDL while GIC has the rest. "DCCDL has secured funding of Rs 2,400 crore from India's largest public sector bank SBI. It sets a benchmark for lease rental discounting (LRD) in the country," Anand told PTI. - moneycontrol

🍒 Gems, jewellery exports may dip 20-25%; growth expected by FY22: GJEPC : The gems and jewellery export is expected to decline by 20-25 per cent this fiscal year compared to 2019-20 due to the disruptions caused by the COVID-19 pandemic, GJEPC said on Saturday. During 2019-20, the exports stood at Rs 2,52,249.46 crore, according to data provided by the Gem and Jewellery Export Promotion Council of India (GJEPC). “We expect the exports to witness a decline of 20 25 per cent in 2020-21, compared with last year. With demand improving gradually, we should be at our 2019-20 levels next year. Growth will come back only maybe by 2021-22,” GJEPC chairman Colin Shah said at the virtual press conference about the closing of 5-day Virtual India International Jewellery Show (IIJS).- moneycontrol

🍒 Gold discount shrinks sharply in local markets amid festive demand : Amid signs of rising festive and wedding demand for gold jewellery, the bullion discount to the landed price in the key cities of Mumbai and Ahmedabad plummeted to $1 an ounce (31.1 gms appx) on Friday from a steep $44 early last month, industry sources said. Further, net bullion imports, which plunged 95% year on year to 11.6 tonnes in the June quarter, are expected to be much higher in Q3 , said jewellery retailer Kumar Jain of UT Zaveri in Mumbai's famous Zaveri Bazaar gold market. The pandemic-induced lockdown dragged down Q2 demand , but with restrictions easing steadily since then and many weddings deferred to the fourth quarter, jewellery demand is expected to improve in Q3 and Q4. Kumar Jain said that sales at his store are estimated to be 60-70% of the previous festive year , corresponding to the December quarter. - economic times

🍒 6 of top-10 most valued firms' combined market valuation tumble over Rs 1 lakh crore : The combined market valuation of six of the country’s top-10 most valued firms declined by Rs 1,02,779.4 crore last week, with Reliance Industries (RIL)taking the biggest hit. Over the past week, the Sensex lost 526.51 points or 1.29 per cent. Reliance Industries Limited (RIL), Tata Consultancy Services (TCS), HDFC Bank, ICICI Bank, HCL Technologies and Bharti Airtel suffered losses in their market capitalisation during the week, while Hindustan Unilever Limited, Infosys, HDFC and Kotak Mahindra Bank were the gainers. The valuation of RIL tumbled Rs 39,355.06 crore to reach Rs 14,71,081.28 crore.- moneycontrol.