🍒 PNB completes IT integration of all branches of Oriental Bank of Commerce and United Bank of India ; State-owned Punjab National Bank (PNB) on Monday said it has completed IT integration of all branches of erstwhile United Bank of India with itself. This is in continuation to the IT integration of all branches of erstwhile Oriental Bank of Commerce undertaken last month, PNB said in a statement. The amalgamation of Oriental Bank of Commerce and United Bank of India into PNB came into effect from April 1, 2020. “With this PNB has concluded the integration and migration of databases of both banks, which brings all the customers on the common platform and enable them to transact seamlessly across bank’s network as well as use PNB’s digital Banking platforms like Internet Banking and Mobile Banking,” it said. The entire migration has been completed without effecting any change in customer account numbers, debit cards or net banking credentials, the bank added. - financial express
🍒 Bank of Baroda launches digital lending platform : Bank of Baroda (BoB) has launched its Digital Lending Platform (DLP), which will allow prospective retail loan seekers to get loans digitally through a paperless process The Platform provides ‘in-principle approval’ for home, car and personal loans in 30 minutes without human intervention, the public sector bank said in a statement. The bank will also offer ‘Online Loan against Fixed Deposits’ via DLP. Prospective loan seekers can avail the DLP facility through multiple channels — website, mobile banking, internet banking and social media as well, it added. With the launch of DLP, BoB said personal loan disbursements will be completely digitised first, followed by MSME (micro, small and medium enterprises) and agriculture disbursements. The bank envisages that the digital share of disbursement in retail lending will grow to 74 per cent over five years. - Business LIne
🍒 SBI, PNB, other Indian banks see sharp fall in NPAs; these reasons to thank for improved asset quality : India’s largest PSU banks — State bank of India (SBI) and Punjab national bank (PNB) — saw a significant fall in non-performing assets in the fiscal’s second quarter. SBI, which accounts for the highest share of PSU Banks’ GNPAs at 20 per cent, reported the highest asset quality improvement in the second quarter. Its GNPA ratio fell to 5.3 per cent in September 2020, compared to 7.2 per cent in the same month last year. Another large PSU bank, PNB that accounts for 16 per cent share in overall PSU banks’ GNPAs, saw a fall in NPAs at 13.4 per cent in September 2020, compared to 16.8 per cent in the last year. The improvement in asset quality has majorly been due to recoveries and higher write-offs by the multiple banks. SBI alone had recoveries to the tune of Rs 4,038 crores and has written off loans worth Rs 5,617 crores, according to Care Ratings. Among other PSU banks, NPAs of Bank of India fell from 16.31 per cent to 13.79 per cent on year in Q2; Bank of Maharashtra (16.86 per cent to 8.81 per cent); Indian Overseas Bank (20 per cent to 13.04 per cent); and NPAs fof UCO Bank fell from 21.87 per cent to 11.62 per cent on-year in Q2. - financial express
🍒 Gross NPAs of banks may rise to 10.1-10.6% by March 2021: Icra : Banks' gross non-performing assets (NPAs) and net NPAs are expected to rise to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021, Icra said Monday. The agency also expects net NPA to decline to 2.4-2.6 per cent by March 2022. "As moratorium on loan repayments is over and though we await the Honourable Supreme Court directive on asset classification, the GNPAs and NNPAs for banks are likely to rise in near term to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021 from 7.9 per cent and 2.2 per cent, respectively as of September 2020," the rating agency said in a report. - economic times
🍒 2021 will witness lot of regulatory efforts channelled towards virtual assets: SBI official : The use of crowdfunding websites create additional risk and the year 2021 will see a lot of regulatory effort channelled towards virtual assets, a senior SBI official said on Monday. Addressing a virtual 'AML/CFT Conference 2020', Sujit Kumar Varma, SBI's Deputy Managing Director (Corporate Accounts Group) said that the trade-based money laundering remains a significant risk. " The use of crowdfunding websites, although not entirely new, create an additional risk as these are specially designed to solicit funding and can be misused for terror financing," he said. Varma also noted that crypto currencies and its potential means to finance terrorism is a significant threat especially when is anonymous in nature. "The year 2021 will see a lot of regulatory effort channelled towards virtual assets. The year 2021 will also likely witness the introduction of more rules and regulations for virtual assets service providers," he said. - economic times
🍒 Axis Bank prunes overseas presence as it consolidates local business : Axis Bank is pruning its overseas operation as part of a strategy of focusing Indian market. It closed branches in Shanghai and Colombo last month while it is in the process of winding up Hong Kong Branch, senior bank officials said. It is also looking to surrender its UK banking subsidiary license and close operations by April 2021. India’s third largest private sector lender is looking to optimize overseas operations in line with the overall corporate strategy. The plan is to consolidate the services related to corporate banking, trade finance, treasury and risk management solutions through its Dubai, Singapore and GIFT city branches. Axis also has representative offices in Dhaka, Abu Dhabi and Sharjah. Axis’ group executive for wholesale banking Ganesh Sankaran said that the bank is closing down branches where it does not have corresponding business opportunities. “We will only continue with our overseas branches and offices in a well thought manner where they have deep synergies with Indian operations and business goals," he said. - economic times
🍒 Break-even year for bleeding PSU banks : The economy has shrunk 15.7% in the first half, jobs have been lost, incomes have contracted and uncertainty hangs over high-contact services with the survival of many in doubt. India has the second-highest ratio of net non-performing assets (NPAs) among the G-20 nations. And this is expected to go up when the Supreme Court stay on NPA classification gets lifted. Given this setting, it may seem highly incongruous to expect NPAs in Indian banks to bottom out in the fourth quarter of 2020-21. Yet, this is what is likely to happen. It now appears that not only have banks dodged an explosion of bad loans, but they also solved some historical problems. For instance, NBFCs were facing a huge credit crunch in March and there were fears that they might default. The targeted long-term repo operations and other schemes enabled them to refinance loans that were coming up for repayment in the current fiscal. While none of the RBI or government relief measures were available for companies that had defaulted, these bad loans have been addressed through provisions. “After six years of losses, FY2021-22 may be the break-even year for public sector banks. This year, there is a possibility that they will make a loss if the stress will materialise according to our estimates,” said Anil Gupta, Icra VP and sector head. - economic times
🍒 PMC Bank money laundering case: ED summons Sanjay Raut's wife for questioning on December 29 : The ED has summoned Varsha Raut, wife of Shiv Sena MP Sanjay Raut, for questioning in the PMC Bank money laundering case on December 29, officials said on Sunday. Varsha Raut has been asked to appear before the federal agency in Mumbai. This is the third summons issued to her after she skipped the earlier two on health grounds, they said. The summons for questioning has been issued to her under the provisions of the Prevention of Money Laundering Act (PMLA). The ED wants to question Varsha Raut with regard to "receipt" of some funds that were allegedly siphoned from the bank, official sources claimed. The ED had filed a PMLA case to probe the alleged loan fraud in the Punjab and Maharashtra Co-operative (PMC) Bank in October last year against the Housing Development Infrastructure Ltd (HDIL), its promoters Rakesh Kumar Wadhawan and his son Sarang Wadhawan, its former chairman Waryam Singh and ex-managing director Joy Thomas.- economic times
🍒 Govt to soon initiate Bank Investment Company : The government is likely to set in motion the process of establishing a Bank Investment Company (BIC) to hold its stake in public sector banks (PSBs) following substantial consolidation in the public sector banking space and clean-up of banks’ balance sheet in the last couple of years. With the banking space seeing fast-paced changes vis-a-vis business models and technology, top bankers feel now is the right time to set up a BIC so that decisions can be taken quickly without the fear of the 3Cs — Central Vigilance Commission, Comptroller and Auditor General and Central Bureau of Investigation. BIC was mooted in 2014 by the Reserve Bank of India’s (RBI) PJ Nayak Committee Report to review governance of boards of banks. - Business Line
🍒 Flexible inflation targeting: “If it ain’t broke, don’t fix it”, say RBI officials : Maintaining the inflation target at 4 per cent is appropriate for India in the backdrop of the steady decline in trend inflation to 4.1- 4.3 per cent since 2014, according to Reserve Bank of India (RBI) working paper. The aforementioned observation assumes significance given that the flexible inflation targeting/ FIT (formally instituted in June 2016), which commits the RBI to a consumer price inflation (CPI) target of 4 per cent with an upper and lower tolerance band of +/- 2 per cent, has to be reviewed by end-March 2021. The paper’s authors — Harendra Kumar Behera, Director, and Michael Debabrata Patra, Deputy Governor, RBI — underscored that: “The credibility bonus accruing to monetary policy warrants smaller policy actions to achieve the target (FIT). This points to maintaining the inflation target at 4 per cent into the medium-term. If it ain’t broke, don’t fix it.” - Business Line
🍒 AU Small Finance, ICICI Pru Life tie up to offer life insurance solutions : AU Small Finance Bank on Monday announced a strategic partnership with ICICI Prudential Life Insurance to offer life insurance solutions. AU Banks said the tie-up aims to deliver "paperless, secure, and hassle-free life insurance" to over 1.8 million customers through digital platforms across 700 banking touchpoints in 13 states and 2 Union territories. “AU Bank has always worked with the core Dharma of ‘customer centricity’. Expanding our bouquet of financial services and customer value proposition, we wanted to associate with an additional life insurance partner to add value to our existing range of products & services while helping our customers to plan for better financial security," said Uttam Tibrewal, executive director of AU Small Finance Bank. - Business Standard
🍒 Asset quality pressure on banks to moderate by FY22-end, says Icra : Asset quality pressure on banks in India is likely to moderate with net non-performing assets (NPAs) declining to 2.5 per cent by March 2022 (FY22) from an estimated 3.1 per cent in March 2021, according to rating agency Icra. The loan restructuring volume is likely to be lower at 2.5-4.5 per cent of advances than initial estimates of 5-8 per cent of advances, it added. Icra said in a statement that moratorium on loan repayments is over, though the Supreme Court directive on asset classification is awaited. In this backdrop, the Gross NPAs are likely to rise to 10.1-10.6 per cent by March 2021 from 7.9 per cent in September 2020. The Net NPAs would also move up to 3.1-3.2 respectively by March 2021 from 2.2 per cent as of September 2020 on elevated credit provisions during H2FY21 as well. - Business Standard
🍒 Airlines seek easier Kamath panel's parameters on loan restructuring : Indian airlines, struggling with a pandemic-related demand slump, have sought from banks and the Reserve Bank of India (RBI) relaxations in the K V Kamath panel’s parameters on loan restructuring. Bank executives have said while they are sensitive to the requirements of the aviation sector, unless there are relaxations at a regulatory level, airlines may not find success in recasting loans. Sources said SpiceJet, GoAir, Vistara, and regional airline TruJet had approached lenders for restructuring their loans. SpiceJet and GoAir have also approached banks for fresh loans as working capital. Executives of private airlines have said while they have asked for relaxations in their negotiations with lenders, it has been conveyed to the RBI through the Ministry of Civil Aviation that the cash flow of airlines may remain under pressure for some more time and the eligibility criteria will be difficult to meet. They also want banks to be more amenable to giving fresh credit lines. “In our communication with lenders, we have pointed out that airlines will require at least one more year to come back to profitability. While the government has allowed opening up almost 80 per cent operations, this lean quarter of the post-holiday season (January-March) will stress profitability as there will be more capacity but fewer passengers,” said an executive of a private airline. - Business Standard
🍒 CAG writes to RBI on banks' status post-recap over the past 5 years : The Comptroller and Auditor General of India (CAG) has written to the Reserve Bank of India (RBI), seeking details of the performance of state-run banks after their recapitalisation (recap) over the past five years. The CAG has also requested it to share the details of a study, if any, with the government. “This (development) should be seen in the context of the opportunity cost of state-run banks’ recap, given the limited fiscal space available,” said a source, adding, “It’s probably part of the steps towards sizing the true value of these banks ahead of privatisation and bringing uniformity in the standards for recap.” The CAG’s communiqué to the RBI ahead of the 2021-22 Budget also puts the spotlight on the latter’s supervisory architecture. This is because of its linkage with the health of state-run banks, more so after the central bank’s asset quality reviews undertaken in recent years. As articulated by former RBI governor, Urjit Patel, the banking regulator holds that it has relatively less say in the governance of state-run banks. The CAG’s message to the RBI comes within a year of its Report on Trend and Progress of Banking in India (T&P: 2018-19), which noted that “the financial health of state-run banks should be assessed by their ability to access the capital markets rather than looking at the government as a recapitaliser of the first and last resort”. - Business Standard
🍒 Maintaining 4% inflation appropriate for India: RBI paper : Maintaining 4 per cent inflation is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy, said a Reserve Bank paper. Under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side. The paper, authored by RBI Deputy Governor Michael Debabrata Patra and another official Harendra Kumar Behera, has found a steady decline in trend inflation to 4.1-4.3 per cent since 2014. "A target set too below the trend imparts a deflationary bias to monetary policy because it will go into overkill relative to what the economy can intrinsically bear in order to achieve the target. - Live Mint
🍒 Debt recasts by banks to be lower than estimated at 2.5-4.5% of loans: Icra : Indian banks are expected to restructure loans of fewer borrowers than was originally estimated, with 2.5-4.5% of advances now likely to get recast, rating agency Icra said on Monday. It said that loan recast requests are much lower than previously estimated, supported by sharper-than-expected improvement in economic activities as well as liquidity support through emergency credit line guarantee scheme. Accordingly, Icra has revised the estimate downward to 2.5-4.5% of advances as against 5-8%, estimated earlier. Anil Gupta, sector head – financial sector ratings, Icra said, with expectations of sustained collections and lower restructuring, the asset quality is expected to improve further with net non-performing asset (NPA) declining to 2.4-2.6% by March 2022. “This will lead to lower credit provisions and better profitability in FY2022," said Gupta.- Live Mint
🍒 Lenders look to give mobile apps a facelift : Banks are upgrading their mobile applications to make it easier for customers to complete most transactions without having to visit branches with the apps emerging as the most preferred customer-interface for lenders after the pandemic. The Reserve Bank of India (RBI) has repeatedly nudged banks to strengthen their information technology infrastructure and recently took the unprecedented step of asking India’s largest private lender, HDFC Bank Ltd, to halt new digital banking initiatives till it fixes problems that have caused three outages in its e-banking services since 2018. State-run Bank of Baroda (BoB), for instance, is looking to redesign its mobile app, which had 11.43 million downloads on Google Play Store at the end of March. The bank is hiring an agency to identify the difficulties faced by customers before redesigning the app. - Live Mint
🍒 Take shareholders’ nod before appointing Shivan as MD & CEO, RBI tells Dhanlaxmi Bank : The Reserve Bank of India (RBI) has asked the Dhanlaxmi Bank Board to get shareholders’ approval before appointing JK Shivan as the next managing director and CEO of the bank. The move is considered somewhat unusual since typically, the board appoints the candidate recommended by the regulator as additional director and then seeks the shareholders approval at the next AGM . The board of Dhanlaxmi had sent a list of five candidates to RBI for its approval after the incumbent Sunil Gurbaxani was voted out by majority of shareholders. An independent director the bank told FE the RBI must be concerned that the shareholders voted out a person nominated by the RBI. Gurbaxani was voted out from the post of MD and CEO by more than 90% of the shareholders on October 1 at the first AGM held after he was appointed in February 2020. - financial express
🍒 Suryoday Small Finance Bank gets SEBI nod to float IPO : Markets regulator Securities and Exchanges Board of India (SEBI) has granted the go-ahead to small lender Suryoday Small Finance Bank to float its Initial Public Offering (IPO). This IPO comprises fresh issuance of 1,15,95,000 equity shares and an offer for sale of up to 84,66,796 equity scrips by existing shareholders, according to the draft papers filed with the regulator, PTI reported. Those offering shares through the Offer for sale (OFS) route include International Financial Corporation (IFC), Gaja Capital, HDFC Holdings, IDFC First Bank, Kotak Mahindra Life Insurance Company, DWM (International) Mauritius Ltd and Americorp Ventures. After filing its preliminary papers in October, the small lender got SEBI's observation on December 23, per an update on the regulator's portal. - moneycontrol.
🍒 ICICI Bank and Google Pay collaborate to bring digital registration of FASTag : ICICI Bank has announced that it is collaborating with Google to issue FASTag. It has become the first bank to join hands with Google Pay for the issuance of FASTag. Customers will now be able to order, track and recharge ICICI Bank FASTag via the Google Pay app. Sajith Sivanandan, Business Head, Google Pay said, “NETC FASTag is an important milestone in bringing the efficiencies of digital payments into transit and making interstate travel frictionless. We are very pleased to be joining hands with ICICI Bank to extend the facility of NETC FASTag purchase to millions of users across India through Google Pay. This is a great example of an entire ecosystem working in concert to bring ease and convenience to the lives of users in a very tangible way.” - moneycontrol.
🍒 Sensex, Nifty scale new heights on positive global cues : The BSE benchmark Sensex settled up by 380.21 points or 0.81 per cent at its all-time closing high of 47,353.75. The index also scaled its fresh record intra-day peak of 47,406.72. The NSE Nifty ended 123.95 points or 0.90 per cent up at new closing high of 13,873.20. It also touched its all-time intra-day high of 13,885.30. On the Sensex chart, Titan, SBI, L&T, IndusInd Bank, Ultratech Cement, HDFC Bank and Asian Paints were top gainers. While, HUL, Sun Pharma, Dr Reddy and Bajaj FinServ closed with losses. Of the Sensex constituents, 26 stocks settled with gains and 4 with losses.
🍒 Rupee ends 6 paise higher at 73.49 against US dollar : The rupee appreciated by 6 paise to close at 73.49 (provisional) against the US dollar on Monday, tracking weakness in the American currency and positive domestic equities. The sustained foreign fund inflows also supported the rupee, traders said. At the interbank forex market, the domestic unit opened at 73.52 against the US dollar and witnessed an intra-day high of 73.47 and a low of 73.61. The local unit finally settled at 73.49 against the American currency, registering a rise of 6 paise over its previous close.
🍒 Gold price rises by 1%, silver rate surges 3% : Gold and silver prices surged today in Indian markets tracking firm international prices. On MCX, February gold futures rose by 0.97% to ₹50,561 per 10 grams and silver prices went up by 3.14% to ₹69,578. 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 ₹50,073 on Thursday and silver closed at ₹67,509 on Wednesday on MCX..
