27.12.2020 : Today's Banking / Financial News

27.12.2020 : Today's Banking / Financial News at a Glance

🍒 Bad debt fear keeps private banks away from street vendor loans : Last week, a branch manager of a leading state-run bank in Madhya Pradesh wrote to the municipal commissioner seeking “cooperation” as several of the 160 street vendors, who were given loans under the PM SVANidhi scheme, had not paid a single instalment, turning them into non-performing assets (NPAs). While executives in the branch described it as routine communication, several bankers point to it to argue that their worst fears are coming true at a time when several state government officers are pushing for rapid disbursement of loans. Although banks have been reluctant to push the Rs 10,000-loan to street vendors, the finance ministry, which controls the fate of state-run bank chiefs, has got them to dole out loans. Not surprisingly, public sector players have disbursed 92% of the loans so far with private banks being less obliging. - economic times

🍒 Bounce rate of auto debit transactions remains high amid lenders’ claims of improved collection efficiencies : Is there rising financial stress amongst small and retail borrowers after the end of the loan moratorium, despite banks and NBFCs reporting collection efficiencies at about 90 per cent of pre-Covid levels? Anecdotal evidence as well as a quick search of social media indicate that many borrowers indeed continue to face headwinds due to job losses and salary cuts amid the ongoing Covid-led economic uncertainty. This also seems to be corroborated by data from the National Payments Corporation of India from its National Automated Clearing House (NACH) platform, which reflects the elevated number of unsuccessful auto debit requests. The bounce rate of auto debit transactions has been hovering over 40 per cent since June as against 31 per cent at the start of 2020 before the pandemic. In November, of the 8.69 crore auto debit transactions recorded on the NACH platform, 3.52 crore were unsuccessful. In comparison, just 2.4 crore transactions out of 7.77 crore requests were returned in January. - Business Line

🍒 SEBI names Krishnamurthy as ‘observer’ for Franklin e-voting : Market regulator SEBI on Saturday announced the appointment of TS Krishnamurthy as the observer for ‘e-voting’ on winding-up of six debt schemes of Franklin Templeton Mutual Fund (FTMF). SEBI’s announcement came several hours after the e-voting had commenced on Saturday morning. On December 9, the Supreme Court had directed SEBI to appoint an observer.

Krishnamurthy, age 76, is the former chief election commissioner of India and the ex-chairman of share depository company CDSL where he worked till 2019. SEBI said it had appointed the observer on December 18. But the announcement was made on Saturday after the Chennai Financial Markets and Accountability (CFMA), an investor lobby group, approached the Supreme Court seeking clarity over the observer. - Business Line

🍒 Dhanlaxmi Bank may appoint former SBI official J K Shivan as its MD & CEO : Dhanlaxmi Bank Limited is planning to appoint J K Shivan as the Managing Director & CEO of the Bank. Shareholders of Kerala-based Dhanlaxmi Bank had voted against former managing director and CEO Sunil Gurbaxani on September 30. He, however, alleged that directors put pressure on him to quit after he raised various governance issues. The Board of Directors of the bank recommended a panel of candidates to Reserve Bank of India for appointment as Managing Director & CEO. One of the candidates recommended by the Board was Shivan. The banking regulator has directed the Bank to submit a proposal before it after the appointment of Shivan is approved by the shareholders. Therefore, the Board of Directors have placed the proposal for the consent of the shareholders authorising the bank to appoint Shivan as Managing Director & CEO. Shivan has over 37 years of experience in SBI. - Business Standard

🍒 Gold prices fell 0.46% this week to Rs 50,064/10 gm, bias remains bullish for short term : Gold prices declined to settle at Rs 50,064 per 10 gram on December 24 as participants trimmed their position as seen by the open interest. The precious metal ended the week with a loss of Rs 231 or 0.46 percent. The yellow metal traded in the positive territory for two out of four sessions in a holiday-shortened week as markets were shut on Friday for Christmas and thin volume, but manage to close above the key psychological barrier of Rs 50,000/10 grams for second successive weeks tracking the general weakness in dollar and EU and the UK clinched a narrow Brexit deal. In the retail market, the bullion metal closed at Rs 49,995 per gram on Thursday up 0.29 percent on a weaker dollar and subdued global cues..

26.12.2020 : Today's Banking / Financial News

26.12.2020 : Today's Banking / Financial News at a Glance

🍒 Loan restructuring, other measures announced by govt to cushion PSBs from shock: DFS Secy : Loan restructuring and other measures announced by the government to help the industry hit by the coronavirus pandemic may save public sector banks from "shock" in the next year, a top finance ministry official said. Despite the pandemic, the lockdown and the consequent damage done to the economy, there are quick signs of recovery, Financial Services Secretary Debasish Panda told in an interview. "There is a steady uptick in the credit growth. Retail, home and agriculture loans are doing well, and MSMEs again, with the intervention of the government through the ECLGS and other similar schemes, have also picked up," he said. Panda added that with the window for restructuring now made available by the RBI through the COVID-19 resolution plan, which offers resolution for all kinds of loans, the impact may not be that severe as had been projected earlier. However, it is difficult to exactly predict the numbers, he said. - economic times

🍒 YES BANK retail loan process to become easier and faster as it joins hands with Salesforce : YES BANK has joined hands with Salesforce, a global leader in customer relationship management, to build a next generation technology platform to smoothen its retail lending business. The private lender is the first bank in the country to collaborate with Salesforce for loan origination and processing. This collaboration aims to engage customers with a unified experience and drive aggressive retail led growth for the lender, the bank said in a statement. The Salesforce loan origination system for retail banking will help the bank to provide "personalised solutions and connected banking experiences for consumers across segments". YES BANK's capacity to process higher volumes of loan applications through enhanced automation and progressive API integrations will be bolstered. The new system will be faster and easier than manual loan sanctioning process. The turnaround time for a loan application will be improved, the bank said. It will also enable the bank to launch a new range of innovative products and services to support the evolving needs of customers faster than before. - Live Mint

🍒 Forex reserves up by USD 2.56 bn to record USD 581.131 bn : The country's foreign exchange reserves surged by USD 2.563 billion to touch a record high of USD 581.131 billion in the week to December 18, RBI data showed. In the previous week, the reserves had declined by USD 778 million to USD 578.568 billion. In the reporting week, the increase in reserves was due to a rise in foreign currency assets (FCAs), a major component of the overall reserves. FCAs rose by USD 1.382 billion to USD 537.727 billion, the Reserve Bank of India's (RBI) weekly data showed. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. The gold reserves increased by USD 1.008 billion in the reporting week to USD 37.020 billion in the week ended December 18, the data showed. - economic times

🍒 Aavas Financiers to raise ?100 crore through NCDs : The Executive Committee of the Board of Jaipur-headquartered Aavas Financiers Ltd on Thursday approved the issuance of Non-Convertible Debentures (NCDs) aggregating up to an amount of ?100 crore on a private placement basis. The NCDs, having a face value of ?10 lakh each, are rated, listed, senior, secured, and redeemable, the company said in a regulatory filing. Aavas Financiers (formerly known as Au Housing Finance) is primarily engaged in providing housing loans to customers belonging to low and middle-income segments in semi-urban and rural areas. - Business Line

🍒 Chinese national kingpin in instant loan app fraud : A Singapore-based Chinese national is a mastermind behind the instant loan application fraud that lured several people in Telangana and elsewhere. The app firms are charging high-interest rates (up to 35 per cent) as they disbursed short-tenure loans. If a customer fails in repayment on time, they would harass them by sending messages to all. The Cyberabad police have so far registered eight cases in connection with the fraud. The Cyberabad police, who have deputed teams to different cities to investigate the fraud, have raided a call centre Cubevo Technology Private Limited in Hyderabad. The call centre is headed by a Chinese national, Zixia Zhang, who is currently absconding, Cyberabad Police Commissioner V C Sajjanar has said. - Business Line

🍒 Fintech: Digital payments got a Covid boost in 2020 : In contrast to the gloom cast by the Covid-19 pandemic and lockdown across the economy, digital payments and fintech was one sector, which witnessed record highs in 2020 as a large number of people preferred to stay at home and maintain social distancing. With concerns over contracting novel coronavirus infection from visiting bank branches and using currency notes, many people — not only in metros but also in smaller towns — have started using their smartphones for making payments and even taking loans for smooth banking services. Digital payments touched a record high in 2020 with all channels from the Unified Payments Interface to the Aadhar-enabled Payment System (AePS) registering stellar growth. - Business Line

🍒 3.97 crore ITRs filed for 2019-20 fiscal till December 24 : As many as 3.97 crore taxpayers have already filed their income tax returns for assessment year (AY) 2020-21 (fiscal year 2019-20) till December 24, the Income Tax Department said on Friday. "Over 3.97 crore Income Tax Returns have already been filed till 24th of December, 2020. Have you filed yours as yet? If not, please do it TODAY! File your Return of Income Tax & ....Relax!," the department tweeted. This includes 2.27 crore taxpayers filing ITR-1, 85.20 lakh filing ITR-4, 46.78 lakh ITR-3 and 28.74 lakh filing ITR-2. The deadline to file I-T returns by individual taxpayers for the 2019-20 fiscal (AY 2020-21) ends on December 31, 2020, while the same for taxpayers whose accounts require to be audited is January 31, 2021. The due date has been extended from July 31 and October 31, 2020, respectively in view of the COVID pandemic. - moneycontrol.

25.12.2020 : Today's Banking / Financial News

25.12.2020 : Today's Banking / Financial News at a Glance

🍒 Central Bank of India to exit housing finance business; to sell JV stake for Rs 160 crore : State-owned Central Bank of India will exit housing finance joint venture by selling its entire stake of over 64 per cent to Centrum Housing Finance for Rs 160 crore. "This is to inform that the bank has entered into a binding agreement to divest its entire equity stake of 64.40 per cent i.e. 1,61,00,000 shares of face value of Rs 10 each in Cent Bank Home Finance Ltd (CBHFL), to Centrum Housing Finance, subject to approvals from regulatory authorities," Central Bank of India said in a BSE filing. According to a separate filing by Centrum Capital, the parent of Centrum Housing, the cost of acquisition is about Rs 160 crore on cash basis. "The company's subsidiary, Centrum Housing Finance has entered into a share purchase agreement with Central Bank of India for acquisition of bank's entire equity stake in CBHFL constituting 64.40 per cent of the share capital of CBHFL on a fully diluted basis, " Centrum Capital said in the filing. The target entity is in the same line of business as the subsidiary, hence this is a strategic acquisition, it added. - economic times

🍒 Banks will focus on cash flow-based lending in future: UCO Bank's Ajay Vyas : Moving on from ratings criteria for grant of loans, banks are likely to focus on cash flow-based lending in times to come, a top executive of UCO Bank has said. "Banks will focus on cash flow based lending in times to come and this has already been started by SBI," Ajay Vyas, Executive Director, UCO Bank said at a virtual panel discussion on Redefining Corporate Financing in New Normal organized by PHD Chamber on December 23, 2020. Various SBI officials have advocated for cash flow-based lending models over the traditional asset-based or ratings-based ones. In cash flow lending, a financial institution grants a loan that is backed by the recipient's past and future cash flows. Vyas further noted that the turn around time (TAT) for grant of loans need to come down and emphasized that it is important to move on from ratings criteria for grant of loans. According to Vyas, Artificial Intelligence, algorithms, prediction analysis are the future of lending norms for banks to follow.- economic times

🍒 RBI unlikely to extend Dec 31 loan rejig deadline : The December 31 deadline for banks to accept restructuring requests from Covid-hit businesses is unlikely to be extended. This was indicated by RBI governor Shaktikanta Das in his meeting with bankers. The governor on Wednesday concluded a two-day meeting with public sector and private sector banks, held through video conference. Days before banks closed their books for the third quarter, Das asked them to make enough provisions should loans go bad. He also asked banks to raise more capital to grow loans. In his meeting, the governor asked bank chiefs to remain vigilant and to take proactive measures to strengthen their resilience and lending capacity. He also sought an update from banks on the progress in the implementation of a resolution framework for Covid-related stressed assets. - economic times

🍒 Banks expect to recover Rs 12K cr from sale of Videocon's oil blocks in Brazil : Bankers are expecting to recover as much as Rs 12,000 crore or $1.6 billion from the sale of Videocon’s Brazil oil blocks after a spurt in oil prices resulted in a boost in the valuation of the assets, according to people in the know. This is at least 60% higher than what they had originally planned to recover from the sale of the assets when expressions of interest were first invited from potential bidders in September, according to these people. The revised valuation was discussed at a recent meeting of the bankers where they also accepted a request from potential bidders to extend the deadline for bids to the first week of January, these people said. The bidders sought an extension of the timeline to conduct physical due diligence in Brazil. “Oil prices are inching towards $50 a barrel. That changes the valuation of the assets because exploration has started. We expect to recover at least 50% of our dues now,” an executive familiar with deliberations between the bankers said. At least five bidders - US’s Murphy Oil, European oil giant Wintershall DEA (owned by BASF), PetroRio, Vedanta and a local consortium comprising Indian businessman - are amongst potential bidders for the stake, ET reported on September 21. - economic times

🍒 RBI cancels licence of Subhadra Local Area Bank, Kolhapur : The RBI on Thursday said it has cancelled the licence of Subhadra Local Area Bank, Kolhapur, as its affairs were conducted in a "manner detrimental" to the interests of its present and future depositors. The bank had breached the minimum net worth requirement for two quarters in the financial year 2019-20, the RBI said in a statement. However, Subhadra Local Area Bank has enough liquidity to pay all its depositors, it added. "Public interest would be adversely affected if it is allowed to continue to do the business in the manner in which it is functioning", the RBI said, adding that the general character of the management is considered prejudicial to the interest of the present and future depositors. The licence issued to Subhadra Local Area Bank stands cancelled to carry out banking business from the close of business on December 24, 2020.- economic times

🍒 Focus on raising cash: Das to banks : Reserve Bank of India (RBI) governor Shaktikanta Das asked top executives of commercial banks to raise capital to help strengthen their lending capacity and proactively set aside money to cover loan losses. “Most banks said that stress is under control," a banker who attended the meeting said. During the two-day meeting, governor Das, along with his deputy governors, discussed the economic situation with bank chiefs and emphasized the role of the banking sector in supporting the ongoing revival in economic activity. Das recounted the measures taken by RBI since the onset of the pandemic to stabilize the economy. - Live Mint

🍒 Credit-deposit ratio takes a hit in 2020: Loans disbursed by Indian banks as a percentage of deposits have constantly declined in 2020, underscoring the effects of excess liquidity and lack of credit demand. In calendar year 2020, the credit-deposit (CD) ratio has consistently declined from 75% levels in January to 71.3% on 4 December, with the hit becoming evident in the first months of the covid-19 pandemic as credit growth slumped. The fall in CD ratio is a consequence of the constant inflow of deposits, which have outpaced credit growth in the last several quarters as demand dropped along with lenders’ appetite for riskier assets. Under Reserve Bank of India rules, banks have to set aside 3% of deposits as cash reserve ratio (CRR) and another 18% in statutory liquidity ratio (SLR) compliant holdings. The rest, along with other resources, can be used for lending. - Live Mint

🍒 Axis MF changes multicap fund to flexicap : Axis Mutual Fund has renamed existing multi cap fund to the newly formed Flexi Cap category keeping in line with its current product positioning. The open ended dynamic equity scheme invests across large, mid, and small cap stocks to facilitate capital appreciation over medium to long term. The change in name will be effective from January 30, said the fund house. As part of scheme categorisationand make it true to label, Sebi had insisted that multicap funds should invest 25 per cent each in small, mid and large cap stocks. This has unsettled most multicap schemes as their învestments were tilted towards large cap stocks. - Business Line

🍒 RBI to conduct simultaneous purchase and sale of G-Secs on December 30 : The Reserve Bank of India on Thursday said it will conduct simultaneous purchase and sale of government securities (G-Secs) under Open Market Operations (OMO) for an aggregate amount of ₹10,000 crores each on December 30. The decision to conduct simultaneous purchase and sale of G-Secs under OMO was taken after a review of current liquidity and financial conditions, RBI said in a statement.- Business Line

🍒 All Central co-operative banks and States co-operative banks will follow new set of regulations as prescribed under Banking Regulations Amendment Act with effect from April 1, 2021. With this, the RBI will have more power to deal with State and Central co-operative banks. These regulations include issuance of shares and bonds, beside others. The Finance Ministry has issued a notification stating that from April 1, the provisions of Section 4 of the said Act shall come into force for State co-operative banks and Central co-operative banks. The new Act was assented on September 29, which replaced the ordinance promulgated on June 26. Section 4 is about amending Section 56 of original act of 1949, which deals with co-operative societies.- Business Line

🍒 Banking system liquidity on the slide due to advance tax outflow : The banking system liquidity has fallen substantially in recent weeks, but experts say that is largely because of advanced tax outflow and is not sudden activism on the part of the central bank even as it might have carefully started to drain the system without flustering the bond markets. As of Monday, the banking system liquidity was at a surplus of Rs 4.95 trillion, as against Rs 6.13 trillion a week earlier, on the eve of the deadline for the third instalment of advance tax. In both cases, however, the overall system liquidity was Rs 8.22 trillion. The overall system liquidity takes into account the banking system liquidity plus the government cash balances with the RBI. The liquidity overhang had figured in the discussions of the monetary policy committee (MPC), the minutes showed. The MPC discussed how huge liquidity could generalise the inflation in the coming days, and how the low interest rates could be benefiting only a few "oligopolistic" firms. New code for co-ops to kick in from April : Business Standard

🍒 Former PNB chief manager, two associates held in Delhi for loan fraud : A former chief manager of a public sector bank and his two associates were arrested in Delhi for allegedly misappropriating funds through a loan fraud, police said on Wednesday. The accused have been identified as Shailendra Kumar (63), a resident of Dwarka Sector-10, Ankit Sangwan (29), a resident of Vikaspuri and Sunil Sarki (31), a resident of Vikas Nagar, they said.Police said a complaint was made by the Punjab National Bank alleging that one Sarki Trading Company through its proprietor Sunil Sarki obtained a cash credit (CC) limit of Rs 2.50 crore on the basis of false credentials and documents in 2013. The company was shown having the business of clothes and garments. To secure the CC limit, forged documents of a property were mortgaged with the bank. The addresses of the borrower and the guarantor were not traceable and the account turned into a non-performing asset (NPA) in 2014, a senior police officer said. - Business Standard

🍒 S&P affirms Indian Bank's 'BBB-' rating, removes from CreditWatch : Rating agency Standard and Poor’s (S&P) has affirmed ratings for Indian Bank at “BBB-” on expectation of ability to absorb a moderate deterioration in its asset quality over the next 12 months. The Chennai-based public sector lender is expected to benefit from faster-than-expected economic recovery in India.Rating agency removed the ratings from CreditWatch, where they were placed with negative implications on June 26, 2020. Another public sector lender Allahabad Bank was merged with Indian Bank on April 01, 2020. Outlook on financial instrument is negative due to asset quality and capital risks. It reflects the view that the bank's capital and asset quality could deteriorate due to the Covid-19 fallout over the next 12-18 months. - Business Standard

🍒 Bankers' sentiment on lending improves; loan demand to rise: RBI survey : After a severe impact of the Coronavirus (Covid-19) pandemic during April-June 2020, bankers’ sentiments on lending conditions have shown a broad-based improvement. The demand for loans is expected to become better, according to RBI’s bank lending survey. Responses suggest that perceptions on retail/personal loans, which were most severely hit during the period, have bounced back. There is lower optimism for the infrastructure, mining and quarrying sectors when compared to other major sectors. The survey is part of RBI's December 2020 bulletin. The Covid-19 pandemic and the related lockdown led to significant contraction in loan demand across all sectors during April-June 2020, which severely dampened the sentiment among Indian lenders. - Business Line

🍒 SBI Life acquires 9% stake in Paisalo Digital for Rs 186.20 cr : SBI Life Insurance Company on Thursday said it has acquired nearly 9 per cent stake in non-banking finance company Paisalo Digital for about Rs 186.20 crore through the open market. SBI Life has acquired a total of38,00,000 equity shares equivalent to 8.99 per cent at Rs489.99 per share for a cash consideration as an ordinary course of business on the stock exchange on December 24, it said in a regulatory filing.It is not a related party transaction, the insurer added.Paisalo Digital has a market capitalisation of Rs 2,204.69 crore as on December 24, 2020. The company's turnover as of March 31, 2020, was Rs337.45 crore. - Business Line

🍒 Fintechs show interest in becoming SFBs, but transitions involve risks : On Wednesday, the Reserve Bank of India (RBI) said digital lending platforms used on behalf of banks and non-banking finance companies (NBFCs) should disclose the names of such lenders to customers. This may be the first sign of a tightening regulatory regime for digital, or fintech, companies. Perhaps in anticipation of a faster compression in the regulatory arbitrage between payments banks (the most popular fintech model) and traditional ones, the RBI’s internal working committee suggested that the term of conversion to small finance banks (SFBs) be reduced from five to three years for payments banks (that is, banks that can accept deposits but cannot lend or issue credit cards), and such SFBs must be listed within six years of conversion against three years specified earlier. - Business Standard

🍒 Sensex soars 529 points as RIL, HDFC twins shine : The 30-share BSE Sensex surged 529.36 points or 1.14 per cent to close at 46,973.54. The broader NSE Nifty zoomed 148.15 points or 1.09 per cent to 13,749.25. Axis Bank topped the Sensex gainers chart, spurting 3.04 per cent, followed by Sun Pharma, ONGC, Reliance Industries (RIL), HDFC, ICICI Bank, Bharti Airtel, Bajaj Finance and Kotak Bank.Index heavyweights RIL, HDFC and HDFC Bank accounted for over half of the Sensex''s gains.On the other hand, Infosys, Nestle India, IndusInd Bank, Dr Reddy's, HCL Tech and Bajaj Finserv were among the main laggards, dropping up to 1.32 per cent.

🍒 Rupee rallies 21 paise to 73.55 per US dollar : Climbing for the second straight session, the rupee darted up 21 paise to end at 73.55 against the US dollar on Thursday amid sustained foreign fund inflows and positive domestic equities. At the interbank forex market, the rupee opened at 73.66 against the US dollar and witnessed an intra-day high of 73.54 and a low of 73.66. The domestic unit finally finished at 73.55, registering a rise of 21 paise over its previous close.

🍒 Gold prices fall for third consecutive day : Gold prices edged lower in Indian markets today, while silver prices went up. On MCX, February gold futures edged 0.16% lower to ₹50,070 per 10 gram. The yellow metal declined for the fourth time in the last five days. Silver is up 0.1% to ₹67,641 per kg. Though gold has recovered from lows of below ₹48,000, it remains significantly lower than the August highs of ₹56,200. Similarly, silver had also almost touched ₹80,000 per kg in the same month. Gold closed at ₹50,149 and silver closed at ₹67,576 on Wednesday on MCX. - Live Mint

24.12.2020: Today's Banking / Financial News

Economic Times:

1) Overseas corporate bond sales, which nearly halved through 2020 despite global yields slumping to the floor, could revive next year as Indian companies regain sufficient confidence in the broader reconstruction to seek debt capital at global financial hubs that are facing a liquidity glut.

2) The pandemic has led to a surge in the adoption of cash withdrawals through Aadhaar enabled Payment Systems (AePS) that have doubled since last year, replacing the age-old dependence on teller machines where transactions halved in the same period.In November, 68.4 million withdrawals worth ₹18,820 crore were processed through AePS channels against 39 million worth ₹9,778 crore in the same period last year.

3) DEBT RESOLUTION:IL&FS to Sell China Road JV to PingAn for ₹2,074 cr.The group has also received approval from Supreme Court Justice (Retd) DK Jain to sell its Chinese JV Road Asset Chongqing Yuhe Expressway Co Ltd (CYEC) to PingAn.

4)RBI Wednesday issued a note of caution to the public against the use of “unauthorized” lending apps, citing recent media reports on unethical collection practices at some financiers and the arbitrary interest rates being levied by a section of these lenders.

Financial Express:

1) The governor of RBI held meetings with the chiefs of public sector banks and some private banks on Tuesday and Wednesday, respectively, through video conference.At the meetings, governor asked banks to strengthen their capital and provisioning positions, as also their ability to lend and contribute to financial stability.

2) A consortium of lenders led by Union Bank of India sought bids to replace the concessionaire in the four-laning of a road project in Maharashtra.The current concessionaire is Supreme Manor Wada Bhiwandi Infrastructure, which has defaulted on loans worth Rs 164 crore to UBI.

3) HDFC, which on Wednesday signed a pact with the Indian Green Building Council (IGBC), said its green housing retail loan book has crossed the Rs 14,000-crore-mark across 310 certified green buildings.

4) State Bank of India is offering trade finance solutions and services to Israeli corporates to help them tap business potential arising out of recent Abraham accords leading to normalisation of ties between Israel and Arab states.

BusinessLine:

1) RBI’s latest draft on the declaration of dividends by NBFCs may help them in strengthening their balance sheet by improving leverage ratios and creating a buffer and surplus for fresh lending. RBI’s move will also help NBFCs in creating better provisioning against the delinquent assets.

2) Race for DHFL heats up.While Oaktree Capital’s bid of about ₹36,700 crore seems to be higher in terms of net present value, Piramal Capital and Housing Finance Ltd is offering higher upfront cash of ₹13,000 crore.

3) Retro tax flare-up: India loses Cairn case.FinMin says all options against $1.2-b arbitration award to be considered.

4) NHA to take a relook at health packages under Ayushman Bharat programme.It is studying ways to extend affordable health insurance to the middle income group.

BusinessStandard:

1) The confidence level of chief financial officers over the overall financial and macro-economic conditions in the country reached an all-time low for the October-December quarter, says a report.

2) Direct tax professionals have sought extension for tax audit report, income tax returns for audit cases and time limit for AGMs in the wake of the ongoing pandemic scenario.

3) Union Minister Nitin Gadkari will on Thursday inaugurate and lay foundation stones for highway projects worth Rs 8,341 crore in Rajasthan.These projects are for a total length of 1,127 kms.

4) Demand for retail credit makes a comeback in November: CIBIL report.Although year-on-year growth across key metrics has yet to reach pre-pandemic levels, there has been positive momentum for credit demand.

Live Mint:

1) Banking system liquidity on the slide due to advance tax outflow.As of Monday, the banking system liquidity was at a surplus of Rs 4.95 trillion, as against Rs 6.13 trillion a week earlier, on the eve of the deadline for the third instalment of advance tax.

2) India has proposed to help the World Food Programme (WFP) replenish its foodgrain stock from overflowing state-owned granaries to assist the organization’s efforts in providing food to the most vulnerable global population.

3) Lenders to Future group have agreed to recast its loans under the RBI’s one-time restructuring scheme as the deal with Reliance Industries Ltd remains mired in a legal spat.The lenders led by SBI have already invoked the debt recast scheme well within 31 Dec.

4) Govt to release next deposits of PM-KISAN on 25 December amid farmers' protest.The govt will transfer more than ₹18,000 crores to over 9 crores beneficiary farmer families on 25 December

23.12.2020: Today's Banking / Financial News

23.12.2020: Today's Banking / Financial News at a Glance

🍒 Indian Army, Bank of Baroda sign MoU for ‘Baroda Military Salary Package’ : Indian Army and Bank of Baroda have entered into a Memorandum of Understanding (MoU) for ‘Baroda Military Salary Package’. The MoU was signed by Lt Gen Ravin Khosla, DG(MP&PS) and Vikramaditya Singh Khichi, Executive Director, Bank of Baroda in presence of Lt Gen Harsha Gupta, Adjutant General, Indian Army who also chaired the meeting. The MoU lays don the basis on which banking services would be provided by Bank of Baroda to serving and retired personnel of Indian Army. Services under ‘Baroda Military Salary Package’ will be offered to serving and retired personnel of Indian Army through the Bank’s network of over 8,200 domestic branches and around 20,000 business correspondent touchpoints, an official release said. - Business Line

🍒 ICICI Bank launches online platform for foreign companies setting up shop in India : Private sector lender ICICI Bank has launched an online platform for foreign companies that plan to set up business in the country. “Called ‘Infinite India’, the platform offers them banking solutions as well as value-added services such as incorporation of a business entity, corporate filings, licences and registrations, HR services, compliances and taxation among others,” ICICI Bank said in a statement on Tuesday. This will help foreign companies, as it eliminates the need for coordinating with multiple touchpoints, leading to a hassle-free experience of doing business in India, it added. - Business Line

🍒 ICICI Bank seeks to gain market share in MNC banking : ICICI Bank is opening a new comprehensive online window for multinational companies (MNCs) wanting to establish or expand in India as it seeks to take advantage of the country's potential as an alternative to China and benefit from the challenges foreign banks face after the Reserve Bank of India's (RBI) recent restrictions on opening of current accounts. Executive director Vishakha Mulye said strong foreign direct investment (FDI) into India, the nation's young demographic profile and government measures to push India as an attractive destination for foreign investment will help the bank gain market share from foreign banks. "India along with China is one of the fastest growing markets in the world but recently the attractiveness of China has been going down. Added to that is the digital ecosystem that has been developed in India which will help improve governance and standards in the long run," Mulye said. - economic times

🍒 SBI Life and Apollo join the race for RCap assets : Reliance Capital's (RCAP) expression of interest (EOI) for asset monetisation garnered mega response with 60 bids being received. SBI Life and Apollo are among the 10 new bidders who have submitted expressions of interest for Reliance Capital's assets, taking the total number of bids to 60. December 1 was earlier the deadline for the submission of EOIs. Over 60 different bids have been received with SBI Capital Markets Limited and JM Financial Services Limited, the advisors to the lenders. Later the date for submitting the bids was extended to December 17. Over eight bidders have bid for entire RCAP assets on as-is-where-is basis. The prominent among them are Oaktree, J.C. Flower and multiple ARCs. - economic times

🍒 Industry bodies to press for holding back new wage definition in meeting with govt on Dec 24 : Representatives of industry bodies, including from CII and FICCI, will hold a meeting with the labour ministry top brass on Thursday to make a case for holding back implementation of new definition of wages, which would increase social security deductions and reduce take-home pay of workers. "The representatives of CII and FICCI among other industry bodies would meet union labour ministry top brass on December 24, 2020 to discuss the new definition of wages which is likely to be implemented by April 1, 2021," an industry source said. The new definition provides that the allowance of an employee cannot be more than 50 per cent of the total salary. This would increase the social security deductions like provident fund. - economic times

🍒 Distress funds are betting on rise in NPAs in India in the coming months due to Covid pandemic : Non performing assets (NPA) in the banking system is set to see a jump in the coming months and some of the distress funds or special purpose funds are betting big on that. Most banks have managed to keep their NPA under control as companies availed moratoriums or were allowed to delay repaying loans for some months due to Covid pandemic. Industry trackers now expect that this number will jump in the coming months. Some of the funds that bet on distressed companies are hoping that they could invest in these in the coming months. These funds had put their investments on hold even as the government postponed the IBC (Insolvency and Bankruptcy Code) process. - economic times

🍒 Covid claims: Insurers paying 100-150% more than the premium collected : Insurance companies have already paid claims that are 100-150 per cent more than the premium they received on corona-specific policies, according to industry experts. As mandated by the Insurance Regulatory and Development Authority of India (IRDAI), there are two corona-specific policies — Corona Kavach and Corona Rakshak. These policies have been brought in as standard covers, while the pandemic was at its fastest spread early this year. “Most of the companies have paid much more than what they had received. For Corona Kavach, we have paid 150 per cent than what we have received,’’ S Prakash, Managing Director, Star Health & Allied Insurance told BusinessLine. - Business Line

🍒 PhonePe introduces voice notification feature for Business app : India-based fintech platform PhonePe on Tuesday announced the launch of its new voice notification feature in vernacular languages on the PhonePe for Business app. The platform has introduced voice notifications in over nine vernacular languages on the PhonePe for Business app. “The voice confirmation helps merchants during peak business hours with a voice message announcing the amount received from a customer without the merchant having to check the customer’s phone screen, or waiting for a bank SMS,” PhonePe explained in an official release. - Business Line

🍒 Reliance Capital: 10 more bids submitted : Another 10 bids have been submitted for the assets of Reliance Capital. Sources said these include a bid by Apollo, which has submitted an expression of interest for Reliance Capital on an as is where is basis. SBI Life Insurance is also understood to have submitted a bid for Reliance Nippon Life Insurance. The Committee of Debenture Holders of Reliance Capital had on December 7 decided to extend the deadline for bids for certain subsidiaries of the debt ridden group to December 17. Reliance Capital had floated an expression of interest for selling stake in its subsidiaries as part of the process to pay off its dues to creditors. The initial deadline had been set as December 1. - Business Line

🍒 IOB loan fraud : ED says accused who defrauded Indian Overseas Bank paid managers' flight, hotel bills : Probing a Rs 299-crore Indian Overseas Bank loan fraud case, similar to the alleged USD 2 billion worth PNB swindle, the Enforcement Directorate has found that the accused "paid" for the air travel and hotel stay of a senior bank manager and his family as kickbacks. The central probe agency said "lapses" were also detected on the part of at least three managers — Anil Kumar, P C Rana and N Chokalingam — of the IOB branch in Chandigarh, "as well as the concurrent auditors." The ED case is related to its criminal money laundering investigation "in a case related to buyers credit fraud of Rs 299.14 crore at the IOB, Chandigarh". The agency took congnisance of an FIR filed by the Central Bureau of Investigation (CBI), to file a case under various sections of the Prevention of Money Laundering Act (PMLA) against IOB Assistant Manager Ashu Mehra, properitor of heights international company Amanpreet Singh Sodhi, owner of vision procon company Dinesh Kumar and directors of a firm saibhakti impex Pvt ltd — Gaurav Kirpal and Aman Kirpal. - moneycontrol.

🍒 Securitisation volumes to get back on growth track in FY22: Icra : The securitisation volumes especially in retail loans of finance companies and mortgage lenders will see healthy growth in 2021-22 (FY22), after experiencing contraction in Fy21 so far, according to Icra. Also, the credit quality of the rated pass-through certificates (PTCs) should remain ‘Stable’ during FY2022. Even though collections may not have reached pre-Covid levels, the credit enhancement available in the transactions has further built-up on amortisation of the pools supporting their credit quality. The rating agency said increase in securitisation volumes for the rest of FY21 an in FY2022 would be supported mainly by growing investor confidence in asset quality due to improving collections. Higher funding requirement of originators on account of rising disbursements and improving business activity post end of lockdown and moratorium period would give a push to activity. “Collections across all asset classes have bounced back sharply since the dip in April 2020 following the nationwide lockdown," said Abhishek Dafria, Vice President and Group Head - Structured Finance Ratings at Icra. - Business Line

🍒 Govt has received 120-130 FDI proposals from China since April: Report : The government has received over 120 foreign direct investment (FDI) proposals worth about Rs 12,000 crore from China since April, when it was made mandatory for a company from countries sharing land border with India to invest in any sector only after getting government approval, sources said. As per that decision, FDI proposals from China need government approval for investments in India in any sector.An inter-ministerial committee has been formed by the government to scrutinise these proposals, they said adding most of the investments are for brownfield projects (means in existing Indian companies). In April this year, the Department for Promotion of Industry and Internal Trade (DPIIT) came out with a press note stating that a company or an individual from a country that shares land border with India can invest in any sector here only after getting government approval. The decision was taken to curb opportunistic takeovers or acquisitions of domestic firms due to the current COVID-19 pandemic. - Business Standard

🍒 Banks line up ARC sales as 2020 draws to close : The distressed asset market, which had gone into a deep freeze after the outbreak of Covid-19, has started to recover in Q3. Large banks have lined up a string of legacy non-performing assets (NPAs) for sale to asset reconstruction companies (ARCs). The deterioration of household incomes has also led banks to consider the ARC route for retail assets and the activity in this segment is now 30-40% higher than pre-pandemic levels. On Monday, State Bank of India (SBI) and ICICI Bank put out notices for the sale of their exposures to Action Ispat & Power (Rs 540 crore) and Gammon India, respectively. A consortium of lenders to Jindal India Thermal Power (JITPL), led by Punjab National Bank (PNB), has also sought bids for the project. Earlier, Bank of Baroda (BoB), Axis Bank and IDBI Bank have also run processes for NPA sales, according to sources. - financial express

🍒 Govt plans to set up a development finance institution in 3-4 months: DFS Secy : The government plans to set up a Development Finance Institution (DFI) in the next three to four months with a view to mobilise Rs 111 lakh crore required for funding of the ambitious national infrastructure pipeline, according to Financial Services Secretary Debasish Panda. “We need a development financial institution as infra financing needs patient capital, and banks are currently not suited for lending for long term projects which do not generate any cash for years,” he told PTI in an interview. Even deepening the bond market with regard to infrastructure financing is a matter which is receiving attention of the government and there is a need to do something more in order to have a robust bond market for infrastructure financing, he said. “To provide funding, to enhance credit rating of projects, a DFI is needed, and we are actively working on it, and soon such an institution will be in place. We are in the process of finalising details such as shareholding of the government and whether such a body will be formed through a statute. - financial express

🍒 SBI Card raises Rs 450 crore through non-convertible debentures : SBI Cards and Payment Services Ltd (SBI Card) has raised Rs 450 crore by issuing bonds on a private placement basis, the company said on Tuesday. The stakeholder relationship committee of the company has approved the allotment of 4,500 fixed rate, unsecured, rated, taxable, redeemable, senior, non-convertible debentures (NCDs) of the face value of Rs 10 lakh each aggregating to Rs 450 crore on a private placement basis, SBI Card said in a regulatory filing.The tenure of the debt instruments is five years with the date of maturity as December 22, 2025.The bonds bear coupon rate of 6 percent per annum, SBI Card said.The bonds will be listed on the Wholesale Debt Market Segment of BSE. Stock of SBI Card closed at Rs 822 apiece on BSE, up 0.78 percent over previous close. - moneycontrol.

🍒 Manappuram Finance raises Rs 400 crore via by issuing bonds : Manappuram Finance on Tuesday said it has raised Rs 400 crore by issuing bonds on private placement basis. The Financial Resources and Management Committee of the board of directors of the company has approved the allotment of 4,000 rated, secured, redeemable non-convertible debentures aggregating to Rs 400 crore, Manappuram Finance said in a regulatory filing. These bonds will mature in three years and carry a coupon rate of 7.45 percent per annum. Shares of Manappuram Finance were trading 1.79 percent lower at Rs 159.25 apiece on the BSE. - Business Line

🍒 Paytm Payments Bank outperforms all important banks in terms of UPI payments: NPCI report : Paytm Payments Bank (PPBL) outperformed all important banks in India in terms of the success rate of UPI transactions yet again. PPBL has the lowest technical decline rate at 0.02 percent among all UPI remitter banks and 0.04 percent among all UPI beneficiary banks, according to the latest report by the National Payments Corporation of India (NPCI). The technical decline rate is around 1 percent for all other major banks. “Our performance in the latest NPCI report is a testament of the hard work that the team puts in to provide the best technology infrastructure in the global banking space. We are well ahead of others when it comes to leveraging AI and Big Data to offer innovative products & services to our customers across the country. Our tech team which comprises of the best minds in the business, work round the clock to provide a seamless and efficient experience. This has helped us build a trusted & long-lasting relationship with our partners (sic)" Satish Gupta, MD & CEO of Paytm Payments Bank Ltd, said in a statement. - moneycontrol.

🍒 Rs 7,000-crore fraud: Ex-MP faked companies in name of maids, drivers, says CBI : The Central Bureau of Investigation (CBI) has said that Hyderabad-based Transstroy India Private Limited, which is embroiled in one of the biggest banking frauds in the country worth Rs 7,296 crore, had created fictitious companies in the name of maids, sweepers and drivers and made them directors to divert funds. Transstroy is owned by former TDP MP Rayapati Sambasiva Rao. In its FIR, CBI alleged that Padmavati Enterprises, Unique Engineers, Balaji Enterprises and Ruthwik Associates swindled Rs 6,643 crore. “Nine are non-existing companies, which have been created to run fraudulent operations with the assistance of employees,” the CBI alleged. A KPMG forensic audit revealed that the accused had borrowed Rs 9,394 crore from Canara Bank and 13 other banks. - Times of India.

🍒 Rupee widens losses by 5 paise at 73.84 against dollar : The rupee furthered its losses by another 5 paise to close at 73.84 against the US dollar on Tuesday in line with weaker Asian peers amid concerns over a new coronavirus strain. At the interbank forex market, the domestic unit opened at 73.95 against the US dollar and witnessed an intra-day high of 73.82 and a low of 73.95. The local unit finally closed at 73.84 against the American currency, registering a fall of 5 paise over its previous close.

🍒 Sensex, Nifty rebound : Nifty IT index gained over 3 per cent to 23,611 points India's benchmark stock indices Sensex and Nifty bounced back by more than 1 per cent in Tuesday's trading sessions after an over 3 per cent fall on Monday. Sensex rose by 452 points or 1 per cent to close at 46,006. The Nifty index gained 137 points or 1.03 per cent at 13,466 points.

🍒 Gold prices today fall for second time in three days, silver rates drop : Gold and silver prices edged lower in Indian markets mirroring similar trend in international markets. On MCX, gold futures edged 0.5% lower to ₹50,180 per 10 gram in second decline in three days while silver fell 2% to ₹67,660 per kg. In the previous session, gold prices had edged 0.2% higher while silver rose 1.5%. Though gold has recovered from lows of below ₹48,000, it remains significantly lower than the August highs of ₹56,200. Similarly, silver had also almost touched ₹80,000 per kg in the same month..