28.10.2020: Today's Banking / Financial News

28.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI asks lenders to implement compound interest waiver scheme : The Reserve Bank on Tuesday asked all lending institutions, including NBFCs, to implement the waiver of interest on interest for loans up to ₹2 crore for the six months moratorium period beginning March 1, 2020. On October 23, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts. The scheme mandates ex-gratia payment to certain categories of borrowers by way of crediting the difference between simple interest and compound interest for the period between March 1, 2020 to August 31, 2020 by respective lending institutions.- Business Line

🍒 RBI: Difficult years ahead for States, and federalism : The next few years are going to be challenging for States due to the impact of the Covid-19 pandemic, which could also leave lasting scars on federalism, the Reserve Bank of India has cautioned. With States in the frontline of the battle against Covid, their fiscal arithmetic for 2020-21 is likely to suffer, the central bank said in its report, State Finances — A Study of Budgets of 2020-21. According to the report, States’ combined GFD (Gross Fiscal Deficit) is projected to widen beyond 4 per cent of GDP in the baseline scenario, higher than the budgeted 2.8 per cent of GDP for 2020-21.- Business Line

🍒 Centre initiates groundwork for IDBI Bank stake sale : The Centre is initiating plans to sell stake in IDBI Bank, though the exact modalities for the transaction are likely to be finalised later. The Finance Ministry is likely to seek Cabinet approval over the next few weeks for selling its stake in IDBI Bank, sources close to the development said, but added that this would be the first step and that the transaction could take place towards the end of the fiscal year or early next fiscal.The Centre currently holds a 47.11 per cent stake in IDBI Bank, and may consider selling stake in two to three tranches.State-owned Life Insurance Corporation of India, which owns a 51 per cent stake in the bank, has also been alerted on the proposal, but it is unclear whether it will divest stake in the bank as of now. The insurer may choose to prune its stake in the bank at a later time when valuations are more attractive. “As of now, work has begun on the initial proposal,” said a person familiar with the development.- Business Line

🍒 PMJDY usage more frequent in areas prone to crime: SBI report : Usage of the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts increases over time in regions that are more prone to theft, according to State Bank of India’s economic research report ‘Ecowrap’. The report underscored that empirical research suggests that PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption, increased spending on healthcare and most importantly the usage is more frequent in areas that are more crime prone. Acknowledging that the genesis of crime can also be traced to interplay of various social, economic, demographic, local and institutional factors, apart from putting more money in accounts at the lower strata of society, there is evidence of PMJDY accounts having some impact on crime, the report said .- Business Line

🍒 Atal Pension Yojana: PFRDA enables online on-boarding through banks’ own portal : Savings bank customers may soon get another channel for online on-boarding to the Atal Pension Yojana (APY) — a government-backed pension scheme targeted at the unorganised sector — without having to use Net banking or a mobile App. Pension regulator PFRDA has now allowed APY-Points of Presence (PoPs) to introduce an alternate channel for online on-boarding of their existing Savings account of customers through the bank’s own web portal. Currently, some banks are providing online APY account opening through Net Banking or mobile app. However, a large number of bank customers who are eligible are not using either of the facilities. In such cases, these bank customers are not able to open an APY account through online/digital mode. To solve this issue, PFRDA has enabled the facility of ‘Online Paperless On-boarding of Subscribers using the Web Portal’, sources said. - Business Line

🍒 SIDBI's 'Standup Mitra' portal records over 96,000 loan sanctions : The Small Industries Development Bank of India (Sidbi) on Tuesday said its 'Standup Mitra' portal has recorded over 96,000 loan sanctions worth over Rs 21,000 crore as of September end. The portal, developed by Sidbi, was launched in April 2016 to extend online financial assistance to the unserved and underserved segment of the society without the need of visiting any bank branch, and apply for loan online under the Stand-Up India scheme. The Standup Mitra portal "has successfully recorded more than 96,000 loan sanctions worth more than Rs 21,000 crore as on September 30, 2020," Sidbi said in a release. - Business Standard

🍒 Massive jump in Jan Dhan accounts during pandemic; labour remittances touch pre-Covid levels : The coronavirus pandemic has led to a massive surge in PM Jan Dhan Yojana accounts since the beginning of the ongoing financial year. The total number of PMJDY accounts stood at 41.05 crores with a total balance of Rs 1.31 lakh crore, said the SBI Ecowrap report. Since 1 April, around 3 crore accounts were opened, with a total rise in deposits of Rs 11,060 crore in those accounts. The pandemic has led to a 60 per cent increase in the opening of new Jan Dhan accounts, the report added. PMJDY accounts work as a primary vehicle for labour remittances, apart from increased lending, smoothing consumption, and increased spending on healthcare. The research further stated that there was a significant reduction in remittances due to lockdown and it touched the lowest level in April. However, it increased in June and July, and in the month of September, it has just crossed the pre-COVID level as witnessed in February. Thus, it seems migrant labourers are coming back in adequate numbers to workplaces for livelihood and that too much before Diwali as was largely expected, the report added. - financial express

🍒 RBI asks Lakshmi Vilas Bank to reconsider names proposed for new MD & CEO : The Reserve Bank of India has asked Lakshmi Vilas Bank (LVB), which is in the midst of a merger process with Clix group, to reconsider the names proposed for the post of new MD & CEO, a senior official said on Tuesday. In September, shareholders of the cash-strapped private sector lender had voted out seven board members, including MD & CEO S Sundar, at the annual general meeting. Subsequently, RBI appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra. “In the first round, we had done interviews of three candidates and sent the names to RBI. But the Reserve Bank has come back to us saying that we have to reconsider. So, we have started the process again. Now, we are broadening our search with more candidates,” Shakti Sinha told PTI. He noted that appointing a new MD & CEO is a complex and long process, and right now, the process of merger with Clix group assumes more significance. - financial express

🍒 CSB Bank, IIFL Finance join hands to offer gold loans in untapped locations : Private sector lender CSB Bank has tied up with IIFL Finance to offer gold loans in untapped locations, including rural areas. Under the partnership, IIFL, a non-banking financial company, will act as a business correspondent of CSB Bank and will source new business from markets where CSB Bank does not have adequate branch network. IIFL, with its vast branch network, would help CSB Bank penetrate the lower strata of customers and rural areas, where the bank currently does not have adequate reach. This arrangement would result in scaling up of the customer base, a joint statement said. - moneycontrol.

🍒 Paytm Money launches ETFs starting ₹16 in equity, ₹44 in gold and ₹120 for NIFTY : Paytm Money, a wholly-owned subsidiary of digital financial services platform Paytm, has launched Exchange-Traded Funds (ETFs) on its platform, post-approval from the Securities and Exchange Board of India (SEBI). These are passive funds that are listed on NSE/BSE and traded like regular equity shares proving the merits of mutual funds along with the return potential of stocks. Paytm Money said that it believes that ETF is an essential part of an investor’s portfolio and all Indians must invest in it. Therefore, the company has made it convenient for new investors by facilitating ETF investments for as low as ₹ 16 in Equity, ₹ 44 in Gold and ₹ 120 for NIFTY. .- Business Line 

🍒 BharatPe launches digital gold on its platform : BharatPe, a leading merchant payment network, has announced the launch of digital gold on its platform. The launch of this new category of fintech product is in line with the company’s commitment to offer the entire gamut of financial products to Small and Medium Enterprises (SMEs). Through this latest offering, BharatPe’s merchants will be able to buy and sell 99.5 per cent pure24-carat gold. Merchants can choose to buy in rupees or grams, any time of the day and from anywhere, by using the BharatPe app. - Business Line

🍒 Banks relieved as government notifies reimbursement of compound interest : Banks are relieved at the government notification waiving off only compounded interest as it will restrict their losses without burdening the fisc much. On Tuesday, the Reserve Bank of India (RBI) issued a notification directing banks to follow the government order reimbursing small borrowers with loans up Rs 2 crore that have paid compounded interest on their loans between March 1 and August 31. Bankers said the government's clarity and its notification committing to bear the difference between the rates have lifted a major over hang over banks. "This issue has now been taken care off. The fact that the government has given a timeline for crediting the losses to banks is very positive because at one time we were not sure of what the court would say and whether we will have to bear the burden," said a bank CEO. - economic times

🍒 Yes Bank starts physical takeover of Anil Ambani’s Reliance Group HQ in Mumbai : Yes Bank has started the process for obtaining physical possession of Reliance Centre, the headquarters of Anil Ambani’s Reliance Group in Mumbai. The bank is seeking to either sell the property to realise its dues, or may move its headquarters there. In July, the private lender had taken symbolic possession of the sprawling complex situated off the Western Express Highway and overlooking the Mumbai airport. The action was taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act to recover dues of Rs 2,892 crore from Reliance Infrastructure. In terms of the act, the bank has to give a two-month notice before taking possession, which the bank had done in May. - economic times

🍒 MSMEs suffered 'triple whammy' during COVID lockdown; reverse migration added to woes : India’s micro small and medium enterprises (MSMEs) suffered a ‘triple whammy’ because of the COVID lockdown in India. Along with other factors, massive reverse migration too took a toll on the MSMEs, said the central bank in a report. “The lockdown was a triple whammy for the MSME sector in India – supply disruption; domestic demand shock; and external demand decline,” said the RBI.India has 63.4 million MSMEs which contribute significantly to the country’s economy. The sector accounts for 45 per cent of manufacturing output, more than 40 per cent of exports and employs about 120 million people. “MSMEs have taken a bigger hit than other sectors, particularly because of the spatial distribution of the pandemic that is skewed towards states with a higher share of MSMEs, more so micro and small enterprises,” RBI said in the report.- moneycontrol.

🍒 Gold prices slip marginally to Rs 51,043/10 gm, silver rises by Rs 285/kg : Gold prices fell marginally by Rs 195 to Rs 51,043 per 10 gram in the Mumbai retail market on a stronger rupee and lacklustre global cues. The precious metal steadied around $1,900 per troy ounce as investors weighed fading prospects of financial aid before next week’s US presidential elections. The rate of a 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,282, Rs 46,755 and Rs 51,043, respectively, plus 3 percent GST. Silver prices rose Rs 285 to Rs 61,991 per kg from its closing on October 26.

🍒 Rupee settles 13 paise higher at 73.71 against US dollar : The rupee pared early losses and settled 13 paise higher at 73.71 against the US dollar on Tuesday, tracking positive domestic equities. At the interbank forex market, the domestic unit opened on a weak note at 73.94 against the greenback, but soon recovered the lost ground and finally closed at 73.71, registering a gain of 13 paise over its previous close of 73.84 against the US currency. During the session, the domestic unit witnessed an intra-day high of 73.71 and a low of 73.94 against the greenback.

🍒 JM Financial clocks 7.31 per cent rise in Q2 net profit : Diversified financial services firm JM Financial has posted a 7.31 per cent rise in net profit of ₹139.06 crore in the second quarter ended September 30, riding mainly on its investment banking, Wealth Management and Securities (IWS) business. “Despite a tough business environment, our investment banking, wealth management and securities businesses remained resilient by demonstrating strong performance. We continue to maintain liquidity buffers and healthy leverage ratios,” JM Financial Group Managing Director Vishal Kampani said. - Business Line

🍒 Angel Broking records highest ever quarterly PAT at ₹74.6 crore in Q2 : Angel Broking, which recently got listed on the bourses, has reported its highest ever quarterly profit after tax (PAT) at ₹74.6 crore for the second quarter ended September 30, 2020. This is substantially higher than the net profit of ₹48.3 crore recorded in the first quarter this fiscal and ₹18.9 crore in the second quarter of last fiscal. Total income for the quarter under review stood at ₹317.9 crore, up 29 per cent over total income of ₹246.6 crore in the previous quarter. The board of directors has recommended a second interim dividend of ₹4.15 per equity share of ₹10 each. - Business Line

🍒 Sensex rallies 376 points higher led by banking, financials stocks : The BSE benchmark Sensex ended higher by 376.60 points, or 0.94%, at 40,522.10. The benchmark had touched a low of 39,978.39 in the opening trading session, but steadily improved on buying support.On the NSE, the Nifty too rebounded from an initial low of 11,723, and touched a high of 11,899.05 before settling at 11,889.40, gaining 121.65 points over its previous close of 11,767.75. Indices were led by gains in index-heavyweights such as Kotak Bank, NTPC, Nestle, Asian Paint, Bajaj Auto, UltraCem Co, L&T and Tech Mahindra amid negative trend in other Asian markets.- Business Line.

27.10.2020: Today's Banking / Financial News

27.10.2020: Today's Banking / Financial News at a Glance

🍒 SBI raises Rs 5,000 cr by issuing Basel-III compliant bonds : The State Bank of India (SBI) on Monday said it has raised Rs 5,000 crore by issuing Basel-III compliant bonds. The committee of directors of capital raising met on Monday and accorded its approval to allot 50,000 Basel-III compliant non-convertible, taxable debt instruments, SBI said in a regulatory filing. The debentures qualifying as tier II capital of the bank of face value of Rs 10 lakh each, at par, bearing a coupon of 5.83 per cent aggregating to Rs 5,000 crore were allotted to bond subscribers on October 26, 2020, it said. - financial express

🍒 IDBI Bank Consolidated September 2020 Net Interest Income (NII) at Rs 1,703.20 crore, up 3.85% Y-o-Y : Net Interest Income (NII) at Rs 1,703.20 crore in September 2020 up 3.85% from Rs. 1640.1 crore in September 2019. Quarterly Net Profit at Rs. 332.63 crore in September 2020 up 109.64% from Rs. 3,448.88 crore in September 2019. Operating Profit stands at Rs. 1,269.00 crore in September 2020 up 23.07% from Rs. 1,031.10 crore in September 2019. IDBI Bank EPS has increased to Rs. 0.32 in September 2020 from Rs. 4.46 in September 2019. IDBI Bank shares closed at 39.75 on October 23, 2020 (NSE) and has given 89.29% returns over the last 6 months and 28.64% over the last 12 months. - Moneycontrol.

🍒 Indian Bank Standalone September 2020 Net Interest Income (NII) at Rs 4,144.04 crore, up 122.43% Y-o-Y : Net Interest Income (NII) at Rs 4,144.04 crore in September 2020 up 122.43% from Rs. 1863.0391 crore in September 2019. Quarterly Net Profit at Rs. 412.28 crore in September 2020 up 14.98% from Rs. 358.56 crore in September 2019. Operating Profit stands at Rs. 2,994.95 crore in September 2020 up 99.43% from Rs. 1,501.77 crore in September 2019.Indian Bank EPS has decreased to Rs. 3.65 in September 2020 from Rs. 7.29 in September 2019. Indian Bank shares closed at 61.25 on October 23, 2020 (NSE) and has given 25.64% returns over the last 6 months and -51.52% over the last 12 months. - Moneycontrol.

🍒 UCO Bank Standalone September 2020 Net Interest Income (NII) at Rs 1,393.15 crore, up 10.03% Y-o-Y : Net Interest Income (NII) at Rs 1,393.15 crore in September 2020 up 10.03% from Rs. 1266.21 crore in September 2019. Quarterly Net Profit at Rs. 30.12 crore in September 2020 up 103.38% from Rs. 891.98 crore in September 2019. Operating Profit stands at Rs. 1,330.32 crore in September 2020 up 10.21% from Rs. 1,207.04 crore in September 2019. UCO Bank EPS has increased to Rs. 0.03 in September 2020 from Rs. 1.21 in September 2019. UCO Bank shares closed at 12.55 on October 23, 2020 (NSE) and has given 3.29% returns over the last 6 months and 6.36% over the last 12 months. - Moneycontrol.

🍒 Yes Bank Standalone September 2020 Net Interest Income (NII) at Rs 1,973.37 crore, down 9.72% Y-o-Y : Net Interest Income (NII) at Rs 1,973.37 crore in September 2020 down 9.72% from Rs. 2185.91 crore in September 2019. Quarterly Net Profit at Rs. 129.37 crore in September 2020 up 121.56% from Rs. 600.08 crore in September 2019. Operating Profit stands at Rs. 1,360.03 crore in September 2020 down 6.75% from Rs. 1,458.44 crore in September 2019. Yes Bank EPS has increased to Rs. 0.06 in September 2020 from Rs. 2.46 in September 2019. Yes Bank shares closed at 13.30 on October 23, 2020 (NSE) and has given -50.83% returns over the last 6 months and -75.71% over the last 12 months. - Moneycontrol.

🍒 Rs 3,600 crore recovered from Vijay Mallya, SBI-led consortium of banks tells Supreme Court : The State Bank of India (SBI)-led consortium of banks told the Supreme Court on October 26 that around Rs 3,600 crore had been recovered from fugitive businessman Vijay Mallya so far. Senior Advocate Mukul Rohatgi, representing the SBI-led banks consortium, also informed the apex court that Rs 11,000 crore were still needed to be recovered from Mallya, The Times of India reported. The top court dismissed a petition filed by Mallya's United Breweries Holdings Limited (UBHL) challenging a Karnataka High Court order upholding the closing of the company for recovery of dues payable by Kingfisher Airlines Ltd, news reports suggest.- Moneycontrol.

🍒 Interest waiver to be credited by 5 Nov : Lenders will have to pay up by 5 November the interest on interest charged on loans of up to ₹2 crore for the six-month repayment moratorium period, the government said, 10 days after being pulled up by the Supreme Court. The finance ministry announced the waiver on interest on interest on Saturday, along with details of implementation. To be sure, borrowers will still have to pay the simple interest on their loans. The scheme for “grant of ex-gratia payment" is applicable for the six-month period of 1 March to 31 August. The money will be routed through lending institutions, the ministry said in a circular for banks and other lending institutions. The lender has to credit the amount to the borrower’s account before 5 November, the deadline set by the Supreme Court for giving relief to consumers ahead of Diwali. Thereafter, lenders will have to claim reimbursement from the government by 15 December. - Live Mint

🍒 75% of borrowers to benefit from interest waiver: Crisil : Over 40 per cent of system credit and 75 per cent of borrowers will benefit from interest-on-interest concession under the recently announced government scheme, according to Crisil Ratings. This will cost the exchequer about ₹7,500 crore. The cost to exchequer would have halved if waiver was allowed only where moratorium was availed of, as per the credit rating agency’s analysis. “From a borrower’s perspective, the benefit would be relatively higher for those who had availed of higher-yielding loans. “Consequently, borrowers of unsecured, micro and gold loans will benefit more than those who had taken home loans,” the credit rating agency said. - Business Line

🍒 Yes Bank to trim branches, ATMs and office spaces to lower costs : Yes Bank has chalked out a plan to close non-performing branches and ATMs, reduce office space by moving to a revolving desk layout and renegotiate contracts with vendors, landlords and contractors, as it seeks to cut costs and save up to Rs 600 crore this year. The cost savings will directly go into the bank's bottom line and make profit more sustainable, chief executive Prashant Kumar told ET in an interview. In the quarter ended September, the bank converted 35 rural branches into low-cost business correspondent centres which together with other measures like digitisation and renegotiating contracts with vendors helped in reducing total operating expenses by 21%, contributing to its profit. Kumar said such measures will continue. - economic times

🍒 RBI encourages investment in sovereign bonds as part of liquidity measures : The Reserve Bank of India is making longer-tenor sovereign bonds attractive again. Quantum Mutual Fund has moved to the 10-14 year segment after staying in duration of up to three years in August in its 691 million rupees ($9.4 million) Dynamic Bond Fund. UTI Asset Management Co. has turned overweight on bonds maturing in up to 15 years, after cutting duration two months ago. The strategy change was prompted by a series of liquidity measures announced by the Reserve Bank of India earlier this month, including doubling the size of open market operations. That’s spurred expectations that the central bank would intervene regularly to keep yields anchored. Confidence over RBI support has even outweighed concern over the government’s plan to increase debt sales. - Business Standard.

🍒 RBI's debt restructuring scheme sees few takers in corporate world: Banks : The Reserve Bank of India’s (RBI’s) loan restructuring scheme for Covid-19-affected borrowers has seen few takers in the corporate world so far, according to bank executives who have seen very little interest in it from their corporate accounts. Under the scheme, borrowers’ accounts will not be downgraded as sub-standard or ‘non-performing’ if their loans are restructured. Rather, they will retain their ‘standard’ status. But the fear of a negative impact on their credit rating is holding companies back. “There is not much interest among corporates to go for restructuring since the biggest fear is the impact of credit ratings on firms. We have received only four to five enquiries, which haven’t been confirmed, for accounts with exposure in the range of Rs 100-1,000 crore,” said the managing director (MD) and chief executive officer (CEO) of a large state-owned bank. - Business standard

🍒 Kotak Mahindra Bank Q2 profit up 27% : Private sector lender Kotak Mahindra Bank reported a 26.7 per cent increase in standalone net profit to ₹2,184.84 crore from ₹1,724.48 crore in the second quarter this fiscal, led by a sharp rise in its income and lower provisions. Total income increased by 3.8 per cent to ₹8,288.08 crore in the July to September 2020 quarter from ₹7.986.01 crore a year ago. Net interest income for the quarter ended September 30, 2020, increased 17 per cent to ₹3,913 crore from ₹3,350 crore a year ago. Net interest margin for the second quarter was at 4.52 per cent. Other income shot up by 18.6 per cent to ₹1,452.03 crore in the quarter under review. - Business Line

🍒 Sashidhar Jagdishan to take charge as MD & CEO of HDFC Bank : HDFC Bank, the country’s largest private sector lender, will have a new chief from October 27 when Sashidhar Jagdishan takes charge as Managing Director and CEO. “Aditya Puri has retired as the Managing Director of the bank at the end of business hours on October 26 upon reaching 70 years of age, in accordance with the tenure approved by the Reserve Bank of India,” the lender said in a regulatory filing, adding that the board places on record its deep and sincere appreciation for the exceptional contribution made by Puri. Puri was the bank’s MD since its inception in 1994. Jagdishan too joined HDFC Bank in 1996. - Business Line

🍒 PNB scam case: UK court rejects Nirav Modi’s latest bail attempt : A UK court on Monday rejected the latest bail plea of fugitive diamond merchant Nirav Modi, who has been lodged in a London prison since his arrest on an extradition warrant in March last year. The application was reportedly made on the basis of “new evidence”, but the Westminster Magistrates’ Court District Judge Samuel Goozee was not convinced to reverse previous bail rejections in Modi’s case. The 49-year-old jeweller, fighting extradition to India on charges of fraud and money laundering in the estimated $2-billion Punjab National Bank (PNB) scam case, has made around six previous attempts at bail — at the magistrates’ court as well as at the High Court level.- Business Line

🍒 SBI Life Q2 net profit rises to ₹300 crore : SBI Life Insurance net profit more than doubled to ₹299.73 crore in the second quarter of the fiscal from ₹129.84 crore a year ago. The private sector life insurer registered a robust 27.2 per cent in net premium income to ₹12,857.95 crore for the quarter ended September 30, 2020, from ₹10,111.51 crore in the same period last fiscal. In statement on Monday, SBI Life Insurance said its new business premium has increased by 15 per cent to ₹9,000 crore from ₹7,820 crore in the first half of the fiscal year 2020-21. - Business Line

🍒 Mahindra Finance Q2 net profit up 34% : Mahindra and Mahindra Financial Services reported a 33.7 per cent increase in consolidated net profit at ₹352.5 crore in the second quarter of the fiscal against ₹263.6 crore a year ago. Its total income increased by 4.6 per cent to ₹3,070.5 crore in the quarter ended September 30, 2020, against ₹2,936.48 crore during the corresponding quarter of last year. In a statement on Monday, Mahindra Finance said it has considered an additional charge of ₹433 crore during the second quarter this fiscal and ₹910 crore in the first half of the fiscal due to a management overlay, to reflect deterioration in the macroeconomic outlook. “As of September 30,2020, the cumulative amount of management overlay provisions stood at ₹1,484 crore,” it said. - Business Line

🍒 Small HFCs may be unable to comply with RBI’s minimum fund norms: Report : The top 20 or so housing finance companies (HFCs), which hold over 70 per cent of the market share, already comply with the minimum net owned fund (NOF) requirement of ₹20 crore prescribed by the Reserve Bank of India (RBI) in its revised regulatory framework for HFCs. However, smaller HFCs may face issues while raising the capital and may choose to be reclassified in other categories of NBFCs (non-banking finance companies) or exit the segment, CARE Ratings said in a report. Currently, around 100 HFCs are registered with the National Housing Bank (NHB). - Business Line

🍒 DHFL lenders set October 30 deadline for revised offers, flay Wadhawan : Lenders of Dewan Housing Finance (DHFL) have asked for revised offers with no “conditional plans” from the four existing bidders, who will have to submit the new plans to own the troubled non-banking finance company and its different assets by Friday evening, a new deadline set. The committee of creditors (CoC) met Monday analysing the bids it had received from Oaktree, SC Lowy, Adani Capital and Piramal Group. It will likely meet on Saturday to take a call on revised bids, three people with knowledge of the matter told ET. Lenders are in favour of negotiating hard with bidders as they aim to maximise value of assets. - economic times

🍒 Customer spending getting back to pre-COVID levels: AU Small Finance Bank : AU Small Finance Bank on Monday said customer spending is getting back to pre-COVID levels and its festive season offer has witnessed 23 per cent rise in per day debit card spends. The 'AU Shopping Dhamaka' was launched on September 21 and will go on till November 22. AU Small Finance Bank is experiencing an increase of 23 per cent in per day debit card spends. Overall, point-of-sale (PoS) and e-commerce transactions witnessed a surge of 16 per cent since the launch of the festive offers, it said in a release. The bank is already witnessing a bounce back in spending to pre-COVID levels, it added. - economic times

🍒 Kotak Mahindra denies takeover talks with IndusInd, but says its open for M&A opportunities : Kotak Mahindra Bank on Monday denied takeover talks with IndusInd Bank but said they were open to M&A opportunities. News agency Bloomberg had reported that Kotak Mahindra Bank is exploring a takeover of smaller rival IndusInd Bank to create the nation’s eighth-largest financial firm by assets. “Not saying no to any of those growth avenues but certainly not on this one,” said Jaimin Bhatt, group CFO, Kotak Mahindra Bank. “When we raised capital in the first quarter of this year, we did talk about the fact that we will look at acquisitions, whether it is companies or assets.” The bank which raised more than Rs 7500 crore through a QIP route in May this year said it has enough capital cushion to explore inorganic opportunities. “Right now, that is cushion of capital. We will have to get into, whether it is right opportunities, whether it is growing on the organic track,” Bhatt added. “As we see green-shoots coming in, we will be open to growing advances book also. We have all the building blocks ready to be growing. Having capital is cushion but we will use it judiciously.” - economic times

🍒 IndusInd Bank denies takeover talks with Kotak Mahindra Bank : Private lender IndusInd Bank denied having any exploratory takeover talks with peer Kotak Mahindra Bank and said the former has unstinted support from its promoters, the Hinduja family. Earlier in the day news agency Bloomberg had reported that Kotak Mahindra Bank is exploring a takeover of smaller rival IndusInd Bank to create the nation’s eighth-largest financial firm by assets. “IndusInd Bank categorically denies any such developments, its malicious and incorrect,” the bank said in an email response. “The Promoter of IndusInd Bank, IndusInd International Holdings Limited (IIHL), reiterate their full support to the IndusInd Bank, now and always.” - economic times

🍒 Rival ICICI Bank expresses gratitude towards Aditya Puri for his contribution to banking : Showing its gratitude towards one of the doyens of India's banking industry, rival ICICI Bank thanked Aditya Puri, the outgoing HDFC Bank boss, for his contribution towards the sector. In a tweet, the ICICI Bank said, " #ICICIBank thanks you, Mr. Aditya Puri, for your contribution to the Indian banking industry. Throughout your illustrious career spanning decades, you have been an inspiration to many. We wish you the very best for your future endeavours." HDFC has named Sashidhar Jagdishan as the next CEO who will replace Aditya Puri who is set to retire today after a glorious 25 years at the helm. Jagdishan will assume the position of the CEO from tomorrow. - economic times

🍒 Gold loan company Muthoot Finance to raise upto Rs 2,000 cr via debentures : Gold loan company Muthoot Finance Ltd plans to raise upto Rs 2,000 crore through public offering of Secured Redeemable Non-Convertible Debentures (NCDs) to deploy funds in lending business.

🍒 The proposed debenture issue will have a base issue size of Rs 100 crore with an option to retain oversubscription upto Rs 1,900 crores aggregating upto tranche limit of Rs 2,000 crore. The issue opens on October 27, 2020 and closes on November 20, 2020 with an option to close at an early date or extend the date to be decided by the Board of Directors or NCD committee. The Secured NCDs proposed to be issued under this Issue have been rated “AA” by CRISIL and “AA” by ICRA. These ratings indicate “high degree of safety regarding timely servicing of financial obligations”. - Business Stnadard

🍒 SAT clearing more cases now than before Covid-19 pandemic, shows data : The Securities Appellate Tribunal (SAT), which hears appeals against decisions by major financial regulators, had 560 pending appeals as of September end, according to information obtained by Business Standard through an application filed under the Right to Information Act. Additional data shared by the tribunal showed that this is largely because of appeals filed in the past two months. August and September each saw over 80 appeals to the SAT. However, the disposal of cases by the tribunal has also gone up over the past two months, owing to the multiple steps it has taken to ease the caseload amidst the Covid-19 pandemic. - Business Standard

🍒 Oaktree, Piramal ahead in race to acquire DHFL : US-based Oaktree Capital and Piramal Enterprise are ahead in the race to acquire the stressed DHFL. According to documents reviewed by BusinessLine, Oaktree has made an offer for the entire portfolio at about ₹28,103 crore. It will pay ₹10,357 crore as upfront cash recovery amount to settle the admitted financial creditor claims through existing cash and cash equivalent available with the corporate debtor and infusion of fresh equity or debt. Additionally, it will issue ₹15,800 crore to the financial creditors as non-convertible debentures with a quarterly coupon of 6.5 per cent with a seven-year tenure. It has also proposed to pay towards admitted employee claims. - Business Line

🍒 Gold rates flat at Rs 51,238 per 10 gm; price could reach Rs 67,000 in next 12 months, says Motilal Oswal : Gold prices were steady at Rs 51,238 per 10 gram in the Mumbai retail market on a weaker rupee and muted global cues. The precious metal had gained 0.62 percent last week in the domestic market. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,934 plus 3 percent GST, while 24-carat 10 gram was Rs 51,238 plus GST. The 18-carat gold quoted at Rs 38,429 plus GST in the retail market. Silver prices dropped by Rs 839 to Rs 61,706 per kg from its closing on October 23.

🍒 Rupee settles 23 paise lower at 73.84 against US dollar : The rupee depreciated 23 paise and settled at 73.84 (provisional) against the US dollar on Monday as muted domestic equities and strong American currency weighed on investor sentiment. The local unit opened at 73.77 at the interbank forex market, then lost further ground and finally settled at 73.84 against the greenback, registering a decline of 23 paise over its previous closing price of 73.61.

🍒 Sensex, Nifty drop 1.35%; Metals, Auto stocks fall sharply : The Sensex ended at 40,145.50, down by 540.00 points, or 1.33%, from its previous close of 40,685.50. Similary, the NSE Nifty has lost 177.70 points or 1.36 per cent to 11,767.75. Among the major losers which pulled the markets down were Bajaj Auto, Tata Steel, Reliance, Bajaj Finance, Asian Paint, M&M, ICICI Bank, HDFC Bank and Kotak Bank and Tech Mahindra. Stocks that bucked the weak market were IndusInd Bank, Nestle, Kotak Mahindra Bank, PowerGrid, TCS, L&T and Hindustan Unilever

26.10.2020: Today's Banking / Financial News

 26.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI Governor tests positive for Covid-19 : The Reserve Bank of India Governor Shaktikanta Das has tested positive for Covid-19 but is asymptomatic. “I have tested Covid-19 positive. Asymptomatic. Feeling very much alright. Have alerted those who came in contact in recent days. “Will continue to work from isolation. Work in RBI will go on normally. I am in touch with all Deputy Governors and other officers through VC and telephone,” the Governor said in a tweet. In his statement in the minutes of the monetary policy committee meeting, Das emphasised that monetary policy has to provide adequate support to ensure a robust revival of the economy from the devastating effects of Covid-19, while at the same time ensuring that any persistence of elevated inflation does not lead to an unanchoring of inflation expectations. “With the supply side disruptions seen to drive the current inflationary pressures likely to be transient and expected to wane out in the months ahead as the economy normalises, there is merit in looking through the current high levels of inflation and persevere with the accommodative stance for monetary policy as long as necessary to revive growth on a durable basis,” said the Governor, who is leading RBI’s fightback against the impact of Covid on the economy. - economic times

🍒 Yes Bank lacked cost control; aim to cut operational expenses by 20% in FY21: CEO Prashant Kumar : Yes Bank lacked a culture of cost control, and under the new management, the lender is targeting to reduce operational expenses by 20 per cent in FY21 by rationalizing branches and ATMs, giving up unwanted leased spaces and renegotiating rents, a top official has said. The city-based lender is experiencing delays in loan recovery efforts as big defaulters are approaching courts, its new chief executive and managing director Prashant Kumar told PTI. Kumar was asked to lead Yes Bank in March after its rescue by a SBI-led consortium of lenders after alleged governance lapses under co-founder and chief executive Rana Kapoor. The bank reported a 21 per cent reduction in operating expenses in September quarter. "Unfortunately, there was no control on costs," Kumar said, adding that a global consultant has charted out a step-by-step agenda to reduce spending through which it aims to save 20 per cent on operating expenses in FY21 over FY20. - economic times

🍒 DHFL Committee of Creditors to discuss four offers on Monday : The Committee of Creditors (CoC) to the beleaguered DHFL will Monday begin discussing the four offers that lenders have received for the debt laden housing finance company (HFC). There will be a presentation on the offers made during the bidding process that ended on Saturday, sources said. Lenders will get to know who has bid what and the conditionalities, they said. It may be recalled that Oaktree Capital, which offered the highest recovery to lenders, has offered Rs 28,000 crore for the entire company. The others in the fray are Adani Group, which is learnt to have offered about Rs 1,600 crore for the wholesale portfolio and slum redevelopment asset; Piramal Enterprises, which has offered about Rs 15,000 crore for the retail portfolio; and Hong Kong’s private banking firm SC Lowy. It may take another fortnight before the winning bidder is selected, banking industry sources said. - Business Line

🍒 Prashant Kumar, tasked to lead YES Bank's revival, braces for Covid impact : The chief executive officer of Yes Bank Ltd., who helped the lender emerge from India’s biggest-ever bailout, is girding for fallout from the pandemic. The coronavirus outbreak has “created a problem” on the loan book, even as progress has been made on fixing key drawbacks such as weak governance, fund-raising challenges and declining deposits, Prashant Kumar said in a phone interview Saturday. It’s “very, very difficult to estimate the impact,” Kumar said. “With the fundamental issues taken care of, we want to control costs and increase profit to deal with any adverse impact on the credit due to the pandemic.” Yes Bank returned to profit in the quarter ended September and Kumar made provisions for potential covid-related losses. When regulators seized the lender in March, its depositors had been fleeing and the bank was struggling to attract investors. State Bank of India bought a stake in Yes Bank and Kumar was plucked from the government-controlled lender to lead the turn around. His predecessor, Rana Kapoor, who co-founded Yes Bank in 2003 and built it into India’s fastest-growing lender, was forced out by the central bank in 2018 amid a dispute over reporting of bad debts. “The market wasn’t even sure how much rot was still in the loan book,” Kumar said. - Business Standard

🍒 Bitcoin rallies to reach highest level in over a year with PayPal support : Bitcoin has breached the $13,000-mark for the first time since July 2019 after online payments company PayPal decided to allow the customers to buy, sell and hold this and other virtual coins using its online wallets. PayPal customers will also be able to use cryptocurrencies to shop at the 26 million merchants on its network starting in early 2021. The Calfornia-headquartered company plans to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first. The service will be available to PayPal account holders in the US in the coming weeks. The company plans to expand the features to Venmo and select international markets in the first half of 2021. The move has been welcomed by cryptocurrency experts and enthusiasts in India as well. "PayPal offering services to its customers to buy or sell cryptocurrencies is a positive sign for the overall ecosystem. Given the strong distribution and reach of PayPal, the huge user base of over 346 million globally, and many merchants around the world, with this service, it has given direct access to cryptocurrencies to numerous users," said Sumit Gupta, CEO and co-founder, CoinDCX, a Bain Capital-backed cryptocurrency exchange. "Although the users can't redeem their Bitcoin outside PayPal, I believe it is a good starting step and it is likely that other major global payment players will follow the lead." - Business Standard

🍒 LIC IPO may spill over to next fiscal : The mega initial public offering of Life Insurance Corp (LIC) may spill over to the next fiscal as the government will first look at the independent actuarial valuation of the country''s largest insurer, a top official has said. Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said the pre-IPO work of LIC is going on at four stages -- appointment of advisors for ensuring compliance, legislative amendment, LIC''s internal software changes to come out with its ''embedded value'' and appointing an actuary for vetting LIC's actuarial valuation. The government plans to amend the Act under which the state-run LIC was set up to prepare for the sale. A stake sale in LIC is crucial for meeting a record Rs 2.1 lakh crore disinvestment target set for the current fiscal ending March 31, 2021. - moneycontrol.com

🍒 IRDAI proposes changes in insurance advertisement regulations : In a bid to protect consumers, regulator IRDAI has proposed to prohibit insurers from issuing advertisements that make claims which are beyond reasonable expectations of performance. The unfair and misleading advertisements will include those which fail to clearly identify the product as insurance and describe benefits that do not match the policy provisions, the regulator said in the draft Insurance Regulatory and Development Authority of India (Insurance Advertisements and Disclosure) Regulations, 2020. The Insurance Regulatory and Development Authority of India (IRDAI) is seeking to come out with new advertisement regulations and has invited comments from stakeholders on the exposure draft by November 10.- moneycontrol.com

🍒 LTC cash voucher scheme: How government employees can avail benefits : Central government employees can submit multiple bills of goods and services purchased in their own name to avail the benefit of the LTC (Leave Travel Concession) cash voucher scheme, according to the Finance Ministry. The Expenditure Department, under the Ministry, has issued a set of FAQs (Frequently Asked Questions) on LTC cash voucher scheme, clarifying that an employee can also avail the scheme utilising the applicable LTC fare without leave encashment. The government on October 12 announced the LTC cash voucher scheme under which central government employees can purchase any goods or services with GST rate of 12 per cent or above to avail the benefit. Till now, employees got LTC benefits only on travels made, or had to forgo the amount.- moneycontrol.com

🍒 FPIs remain net buyers in October so far amid better than expected financial results : Foreign portfolio investors (FPI) remained net buyers in Indian markets in October so far, pumping in a net ₹17,749 crore in the month as better than expected quarterly results, the opening of the economy, and resumption of business activities kept investors’ interest intact. In equities, FPIs invested a net sum of ₹15,642 crore and the debt segment saw an inflow of ₹2,107 crore during October 1-23, the depositories data showed. The total net investment during the period under review stood at ₹17,749 crore. - Business Line

🍒 Franklin Templeton to move Supreme Court against HC order to wind up six debt schemes : Franklin Templeton India plans to move the Supreme Court against the Karnataka High Court order making it mandatory to seek investors approval for winding up the six debt schemes even while upholding Trustees decision to close down the scheme. In a note to investors, Sanjay Sapre, President, Franklin Templeton Asset Management (India) said on basis of initial review the fund house believes it may be necessary to appeal aspects of the order in the Supreme Court even while the fund house is still in the process of studying the order. - Business Line

🍒 Six of top 10 most valued firms add Rs 86,684 crore in m-cap : Six of the top 10 most valued Indian firms added a cumulative Rs 86,683.71 crore in market valuation last week, with HDFC twins emerging as the biggest gainers. On the top 10 chart, HDFC Bank, HDFC, ICICI Bank, Kotak Mahindra Bank, Bharti Airtel and HCL Technologies were gainers. While, Reliance Industries Ltd (RIL), Tata Consultancy Services (TCS), Hindustan Unilever Ltd (HUL) and Infosys saw erosion in their market valuation. HDFC Bank, India’s biggest private sector lender, witnessed its valuation soar by Rs 20,198.59 crore to stand at Rs 6,80,092.72 crore. - Business Line.

25.10.2020: Today's Banking / Financial News

25.10.2020: Today's Banking / Financial News at a Glance

🍒 Credit outstanding of banks up ₹74,734 cr : 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) data 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. It may be pertinent to mention here that the RBI Governor Shaktikanta Das, on Wednesday, said that the country is almost at the doorstep of revival process. However, since the beginning of the current financial year, the scheduled banks’ credit outstanding is down by ₹30,069 crore. - Businesss Line.

🍒 ICICI Bank shuts down operations in Sri Lanka : ICICI Bank on Saturday said it has shut down operations in Sri Lanka after getting approval from the Sri Lankan monetary authority. The Monetary Board of the Central Bank of Sri Lanka, having considered the request made by ICICI Bank, has granted approval to close down business operation of the bank in Sri Lanka and cancel the licence issued to it, ICICI Bank said in a regulatory filing. “The Director of Bank Supervision being satisfied with the bank complying with the terms and conditions imposed by the Monetary Board, the licence issued to the bank to carry on banking business in Sri Lanka is cancelled with effect from October 23, 2020,” the private sector lender said.- Businesss Line.

🍒 Covid relief: No interest on interest for any loan up to Rs 2 crore : Bringing financial relief to millions of borrowers from financial system, the Department of Financial Services in the Finance Ministry has finally rolled out a much anticipated scheme that will provide interest compounding relief for the six month moratorium extended to mitigate COVID19 effect. The relief will come to borrowers in the form of grant of ex-gratia payment of difference between compound interest and simple interest for six months (from March 1 to August 30). This scheme has been rolled out after the Supreme Court directed the Centre to implement the relief as soon as possible and ahead of upcoming Diwali. Put simply, borrowers will need to pay interest only on simple basis for their outstanding borrowing (only those with aggregate borrowing upto ₹ 2 crore) during the six months COVID-19 induced lockdown period. The compounding effect will be made good by the government reimbursing the lending institutions. - Busines Line

🍒 Loan moratorium: Finance ministry issues guidelines to implement interest waiver : The finance ministry on Saturday announced the details of the implementation of the waiver of ‘interest on interest’ on loans of up to ₹2 crore for the six-month moratorium that was rolled out to mitigate the hardship of borrowers hit by the coronavirus pandemic. The Centre approved the scheme for ‘grant of ex-gratia payment of difference between compound and simple interest to borrowers of specified loan accounts’ from March 1-August 31. The ‘ex-gratia payment’ or the benefit will have to be routed through lending institutions, the ministry said in a circular addressed to banks and other lending institutions on October 23. The lender has to credit the amount to the account of the borrower on or before 5 November, giving relief to borrowers ahead of Diwali. Thereafter, lenders will have to claim reimbursement from the government by December 15. - Live Mint

🍒 NBFCs ask RBI again to open TLTRO window to access funds : Nonbank finance companies (NBFCs) have again called on the Reserve Bank of India (RBI) to give them access to the on-tap TLTRO (targeted long term repo operations) window, which provides long-term funds to banks at the policy rate. Despite the RBI introducing several tools to prop up bank funding to non-banks, the latter have been complaining of a persistent lack of liquidity, especially the smaller ones. The Finance Industry Development Council (FIDC), the NBFC lobby group, has urged RBI governor Shaktikanta Das to direct banks to lend to NBFCs under this scheme to ensure benefits reach a wider segment of borrowers. “We sincerely appeal to kindly consider our request to carve out a part of the on-tap TLTRO funds for the NBFCs including small NBFCs to avail of loans from banks under the aforesaid scheme for the purposes of on-lending to the desired sectors only,” FIDC said in a letter, a copy of which ET has seen. “We note that while sections including agriculture, MSME and retail are covered, NBFCs have not been included as a sector which could avail of the facility.” - economic times

🍒 Need cautious approach in further IBC suspension extension beyond December 25: SBI MD : State Bank of India (SBI), the country’s largest commercial bank, has advised a cautious approach in taking crucial decisions such as any extension of insolvency and bankruptcy code (IBC) suspension beyond December 25, stating that one would have to weigh pros and cons in continuing a relaxed environment.“RBI and government have rightfully (in the current Covid-19 times) given a relaxed environment till the months of September or October. Taking this beyond will actually give an impression that the borrowers are fundamentally weak and banks are likely to go back to square one where we are seen as promoting ever-greening etc. If that were to come as perception in the minds of investors, that would be a major negative for our economy,” Arijit Basu, Managing Director, SBI said at an international conference on IBC, organised by the Indian Institute of Insolvency Professionals of ICAI. - Business Line

🍒 Franklin Templeton can’t wind up 6 MF schemes without consent from unitholders: Karnataka High Court : In a big victory to investors, the High Court of Karnataka on Saturday said that the Franklin Templeton Trustees Services (FT Trustees) Pvt Ltd cannot implement its decision of prematurely winding-up six open ended debt oriented Mutual Fund (MF) schemes without obtaining the consent of the unitholders in the form of a simple majority. The consent of unitholders is mandatory as per Regulation 18(15)(a) of the Security Exchange Board of India (Mutual Funds) Regulations, 1996 when the majority of the trustees decide to wind up or prematurely redeem the units, the HCK said while declining to interfere with the FT Trustees’ April 20, 2020 decision to prematurely wind-up the six schemes. A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Ashok S Kinagi delivered the verdict while disposing of the petitions filed by unitholders, who had challenged the decision of the FT Trustees to wind-up the schemes without duly following the MF regulations.- Business Line

🍒 YES Bank: Gradual improvement in metrics...but a long road to recovery : Bolstered by the capital raised (nearly ₹15,000 crore) through the further public offering (FPO) in July, YES Bank has certainly eased concerns on the bank’s ability to continue as a going concern, with key capital and liquidity ratios (which were in breach in the March quarter) moving above the RBI’s regulatory requirement. But even as the bank’s earnings have moved into the black over the past two quarters and asset quality has remained stable, there are several risks that need a close watch. As such, most metrics indicate a long road to recovery for the beleaguered bank. In the latest September quarter, YES Bank reported a profit of ₹129 croreagainst a profit of ₹45 crore in the June quarter. A marginal improvement in core net interest income (3 per cent sequential growth) and fall in operating expenses (by 4.5 per cent QoQ) have aided earnings. Gross NPAs remained stable at ₹32,344 crore in the September quarter (₹32,703 crore in the June quarter). Advances saw a slight uptick (1.5 per cent QoQ), while deposits have grown 15 per cent sequentially. The bank’s Tier I capital ratio stood at 13.6 per cent (above the regulatory requirement of 8.875 per cent) thanks to the capital infusion through the FPO. Liquidity coverage ratio, too, has moved up to 107 per cent from about 40 per cent in the March quarter. - Business Line

🍒 Risk averse banks continue to lend with caution; bank credit up marginally, deposit growth stable : Bank credit grew marginally during the fortnight ending October 9 when compared to the previous 14 days that ended September 25, hinting at risk aversion in the banking industry. Total bank credit at the end of October 9 stood at Rs 103 lakh crore, compared to Rs 102.7 lakh crore at the end of September 25, data sourced by Care Ratings shows. When compared to the previous year, credit growth registered an increase of 5.7% on-year. On the other hand, deposits growth was at 10.5% on-year basis and remained largely stable from the previous fortnight. While bank credit might have grown marginally the growth levels registered during the same period last year were higher. “The credit growth decelerated to 5.1% and 5.7% during the last two fortnights, compared to last year’s level of 8.8% and 8.9% respectively reflecting weak demand and risk aversion in the banking system due to COVID-19 pandemic,” the report said. Asset quality concerns have kept commercial banks on the edge during the pandemic. Despite the slow credit growth, disbursements for medium, micro and small enterprises (MSME) continued to be strong under the Emergency Credit Line Guarantee Scheme. Over half the amount under the scheme has been sanctioned so far. - financial express.

24.10.2020: Today's Banking / Financial News

24.10.2020: Today's Banking / Financial News at a Glance

🍒 RBI’s first OMO purchase of state development loans sees good response : In a bid to sooth bond market concerns over large state borrowings in the second half of the fiscal, the RBI announced open market operations (OMO) purchase of State Development Loans (SDLs) for the first time, as a special case, in its October policy. The first auction of ₹10,000 crore of SDLs on October 22, not only received good response, but experts also believe that future auctions could help narrow the spreads between SDLs and equivalent government securities in certain tenures. Against the notified amount of ₹10,000 crore, RBI received bids to the tune of ₹15,475 crore, implying a bid-to-cover-ratio (amount of bids received relative to the amount announced) of 1.5:1 times. Top OMO purchases (by amount) included ₹1,505 crore of 7.78 per cent Maharashtra SDL 2029 at a cut-off yield of about 6.5 per cent, ₹1,199 crore of 7.17 per cent Karnataka SDL 2029 at again 6.5 per cent, ₹1,136 crore of 7.2 per cent Karnataka SDL 2029 at 6.47 per cent and ₹950 crore 7.18 per cent Gujarat SDL 2030 at 6.5 per cent. - Business Line

🍒 RBI board holds review meet to take stock of economic situation, other challenges : Amid the uncertainties created by the coronavirus pandemic, the Reserve Bank’s central board on Friday held a meeting to discuss, among other things, the economic situation and other challenges. The meeting, which was held through video conferencing, also deliberated on the issues concerning financial stability in the present context. "The board reviewed the current economic situation, continued global and domestic challenges and various areas of operations of the Reserve Bank. The board also discussed the working of sub-committees of the central board and the local boards and deliberated on the aspects related to financial stability in the present milieu,” the RBI said in a release. - moneycontrol.

🍒 RBI issues guidelines to set up self-regulatory organisation for PSOs : The Reserve Bank on Thursday issued final guidelines, including the framework, to set up a self-regulatory organisation for payment system operators as part of its payment and settlement systems vision. The framework will enable the central bank to recognise a self-regulatory organisation (SRO) for payment system operators (PSOs). The plan was announced in February 2020 monetary policy. "Interested groups/association of PSOs (banks as well as non-banks) seeking recognition to be an SRO may apply to the chief general manager, department of payment and settlement systems at the RBI," the regulatory circular said. An SRO is a non-governmental organisation that sets and enforces rules and standards relating to the conduct of its members to help protect customers and promote ethical and professional standards. - Business Standard

🍒 Punjab and Sind Bank reports account of IL&FS Financial Services (IFIN) as fraud account to RBI : Punjab and Sind Bank on Friday said it has reported to the Reserve Bank of India (RBI) the account of IL&FS Financial Services (IFIN) as fraud with outstanding dues of over Rs 561 crore. The NPA account, IL&FS Financial Services, with outstanding dues of Rs 561.13 crore has been declared as fraud and reported to the RBI as per the regulatory requirement, the bank said in a regulatory filing. "Further, the bank has already made 100 per cent provisioning as per the prescribed prudential norms and the account is technically written off," it added. The scam at the IL&FS group came to light in September 2018 after several group entities defaulted on repayments due to severe liquidity problems. Later, the government superseded the board of directors to revive the ailing group. - economic times

🍒 IDBI Bank posts ₹324-crore profit in Q2 : IDBI Bank reported a net profit of ₹324 crore in the second quarter ended September 30, 2020 against a net loss of ₹3,459 crore in the year ago period. Net profit in the reporting (Q2) quarter jumped 125 percent.