Banking and Financial Awareness for October 24, 2021

 *Financial News Bulletin Dt. 24th October , 2021*

The RBI decided to extend Basel-III Capital framework to All India Financial Institutions (AIFIs) such as EXIM Bank, the NABARD, National Housing Bank (NHB) and the SIDBI. Basel-III standards mainly seek to raise the quality and level of capital to ensure that financial entities are better able to absorb losses on both a going concern and a gone concern basis.

-Business Line

RBI Governor Shaktikanta Das said the central bank needs to ensure that the nascent revival of economic activity shows signs of durability and sustainability. At the Monetary Policy Committee (MPC) meeting, held between October 6 and 8, 2021, Das referred to an ever evolving and dynamic environment, with the outlook overcast by several uncertainties including the fact that the pandemic is far from over. “At this critical juncture, our actions have to be gradual, calibrated, well-timed and well-telegraphed to avoid any undue surprises,” the Governor said.

-Business Line

ICICI Bank reported a 30% jump in its standalone net profit for the second quarter of the fiscal with robust growth in net interest income and lower provisions. The bank’s net profit was ₹5,510.95 crore for the quarter ended Sept 30, 2021 as against ₹4,251.33 crore in the same period last fiscal.

-Business Line

Fintech platform Razorpay has announced a new tokenisation solution for businesses in India to enable their end-customers to continue experiencing the convenience of saved card transactions, now with added security and in compliance with RBI guidelines. The solution termed ‘Razorpay TokenHQ’ is a multi- network Card- on-File (CoF) Tokenisation solution that will work across all major card networks including Mastercard, RuPay, and Visa.

-Business Line

The country's foreign exchange reserves rose by $1.492 billion to reach $641.008 billion in the week ended October 15, RBI data showed. In the previous week ended October 8, the reserves had increased by $2.039 billion to $639.516 billion. The reserves had touched a lifetime high of $642.453 billion in the week ended Sep 3, 2021.

-Business Standard

Petrol and diesel prices were hiked for the fourth consecutive day  today by 35 paise per litre, pushing the total increase in rates on petrol to ₹36 per litre and on diesel to ₹26.58 since early May 2020 when taxes on the two fuels were raised to record levels. Petrol in Delhi now costs ₹107.24 a litre and diesel comes for ₹95.97, according to a price notification of State-owned fuel retailers.

-Business Line

Banking and Financial Awareness for October 23, 2021

 23.10.2021 : Today's Banking / Financial News at a Glance

🍒 Bank of India opens first-ever branch in Ladakh : Bank of India on Friday extended its operations to the Union Territory of Ladakh by opening its first-ever branch here with its top official asserting that the bank is fully committed to extending its banking services to the people living in far-flung areas of the country. This was the 5,086th branch opened by a bank in the country and abroad, and is fully computerised and digitised with a facility of E-Gallery to provide 24x7 banking to the residents of Leh, a spokesperson of the Bank of India (BOI) said. He said BOI Managing Director and Chief Executive Officer A K Das opened the branch in the presence of Field General Manager A K Jain, Zonal Manager Vasudev, Branch Manager Sangeeta and various local dignitaries and customers. "The bank is fully committed to extending its banking services to the people living in the far-flung areas of the country. The opening of a branch here is an important step towards this goal," Das said.- Economic Times

🍒 Bank of Maharashtra Q2 net up 103% to Rs 264 cr on robust interest, income : Bank of Maharashtra (BoM) on Thursday reported an over two-fold jump in net profit on a year-on-year (YoY) basis in the quarter ended September 2021 (Q2FY22), helped by robust interest and fee income. The state-owned bank’s net profit rose 102.7 per cent YoY to Rs 264 crore from Rs 130 crore, a regulatory filing said. Its net interest income (NII) grew 33.84 per cent YoY to Rs 1,500 crore in Q2. The non-interest income was up 22.61 per cent to Rs 493 crore, which includes recoveries worth Rs 260 crore from exposure to DHFL. The bank’s deposits increased 14.47 per cent to Rs 1.81 trillion and gross advances grew 11.44 per cent to Rs 1.15 trillion on a YoY basis. - Economic Times

🍒 Federal Bank Q2 net profit up 49.6% : Federal Bank reported a 49.6 per cent jump in its standalone net profit at ₹460.26 crore in the second quarter of the fiscal from ₹307.62 crore in the corresponding period a year ago.  This was aided by higher net interest income and lower provisions. For the quarter-ended September 30, 2021, Federal Bank reported a net interest income growth of 7.2 per cent to ₹1,479.42 crore versus ₹1,379.85 crore a year ago. Other income marginally fell by 1 per cent on an annual basis to ₹444.46 crore in the second quarter of 2021-22. Net interest margin stood at 3.2 per cent as on September 30, 2021. - Business Line

🍒 South Indian Bank posts net loss of ₹187.06 crore in second quarter of FY22 : Thrissur-based South Indian Bank posted a net loss of ₹187.06 crore in the second quarter of FY22 against a net a profit of ₹65.09 crore during the corresponding period of FY21.  The operating profit stood at ₹111.91 crore as against ₹390.94 core for Q2FY21. As per the RBI direction, provision for depreciation on investments amounting to ₹175.56 crore for Q2FY22 has been shown under “other income” in the profit and loss account, which was originally classified under “provisions and contingencies. Further, amounts recovered from written-off accounts were reclassified under “provisions and contingencies” against previous year classification under “other income”. Excluding these amendments, operating profit would have been ₹346 crore, a press statement said. - Business Line.

🍒 YES Bank posts 74% jump in Q2 net profit : Private sector lender YES Bank’s standalone net profit surged by 74.3 per cent to ₹225.5 crore in the second quarter of the fiscal led by a sharp jump in non interest income and lower provisions.  The bank’s standalone net profit was ₹129.37 crore in the second quarter of last fiscal. For the quarter ended September 30, 2021, YES Bank however, reported a 23.4 per cent drop in its net interest income to ₹1,512 crore as against ₹1,973 crore a year ago. Net interest margin was at 2.2 per cent. - Business Line

🍒 Federal Bank opens 300,000 accounts with neo-bank partners : Federal Bank said on October 22 that it has opened more than 300,000 accounts with neo-banking partners. The bank has tied up with three neo-banking platforms; Jupiter, Fi & DGV. Federal Bank’s MD & CEO Shyam Srinivasan in a media call said investment focus around digital and fintech partnerships is showing results, and some of these fintech partnerships have led to opening up of over 300,000 bank accounts with neo-banking platforms. On the user-behaviour and cross-sell opportunity, Srinivasan said, “This is maybe too early to answer but conceptually this is what everybody is asking. It’s been three-four months only and we will have to wait and see how the seasoning happens.” - Moneycontrol.

🍒 KVGB disburses ₹44.28 cr loan at outreach programme : The Dharwad region of Karnataka Vikas Grameena Bank (KVGB) disbursed loans to the tune of ₹44.28 crore to nearly 725 beneficiaries under various heads at the customer outreach initiative organised under the aegis of state-level bankers’ committee (SLBC), according to P Gopi Krishna, Chairman of KVGB. He said the customers outreach initiative was organised on Thursday to boost credit in retail, agriculture and MSME sectors. - Business Line

🍒 HDFC Life Insurance Q2 net profit down 16% : HDFC Life Insurance registered a 15.9 per cent drop in its net profit to ₹274.16 crore in the second quarter of the fiscal as against ₹326.09 crore in the same period last fiscal. “Our profit after tax stands at ₹577 crore for the first half of 2021-22, which is 26 per cent lower than the first half of 2020-21, on the back of higher claims reserving warranted by the second wave of the pandemic,” said Vibha Padalkar, Managing Director and CEO, HDFC Life Insurance. - Business Line

🍒 RBI proposes stricter capital norms for Exim Bank, Nabard, NHB and Sidbi : The Reserve Bank of India has proposed minimum 11.5% capital for the four all India financial institutions (AIFI) in line with Basel III framework to raise their resilience in periods of stress. The stricter capital norms would be applicable to Exim Bank, National Bank for Agriculture & Rural Development, National Housing Bank and Small Industries Development Bank of India from the next fiscal. RBI said that these institutions should have minimum total capital at 9% from April 1 2022 along with minimum capital buffer at 2.5%. Minimum common equity tier 1 (CET1) capital would be 5.5% while minimum tier 1 capital requirement proposed at 7%. - Economic Times

🍒 LIC Housing Finance reports 69 per cent y-o-y decline in Q2 net profit at ₹248 crore : LIC Housing Finance (LIC HFL) reported a 69 per cent year-on-year (yoy) decline in second quarter net profit at ₹248 crore against ₹791 crore in the year-ago quarter due to increase in provisions on account of implementation of resolution plans, especially in the case of corporate entities. The housing finance company upped the provisions by ₹424.49 crore during the quarter in respect of 113 corporate entities. It had an exposure aggregating ₹4,629.46 crore to them before implementation of the resolution plans. - Business Line

🍒 RBI needs to ensure nascent revival of economic activity shows signs of durability: Governor Shaktikanta Das : Reserve Bank of India Governor Shaktikanta Das said the central bank needs to ensure that the nascent revival of economic activity shows signs of durability and sustainability. At the Monetary Policy Committee (MPC) meeting, held between October 6 and 8, 2021, Das referred to an ever evolving and dynamic environment, with the outlook overcast by several uncertainties including the fact that the pandemic is far from over. “At this critical juncture, our actions have to be gradual, calibrated, well-timed and well-telegraphed to avoid any undue surprises,” the Governor said. - Business Line

🍒 CrossTower offers ₹5,000 credit to Indian users to learn crypto trading ; CrossTower on Friday announced a unique feature by offering free credit of ₹5,000 to each Indian user's wallet for trading on cryptocurrency on its platform. “Due to cryptocurrencies' volatility, many users are still wary about investing in the crypto market,” it said in a statement, adding that CrossTower launched this feature to allow Indian users to learn crypto trading comfortably without investing a single rupee. - Business Line

🍒 Failure of any large NBFC may translate into a risk to its lenders: RBI Dy Governor M Rajeshwar Rao : The reputation of the non-banking financial sector has been dented in recent times by failure of certain entities due to idiosyncratic factors, said Reserve Bank of India Deputy Governor M Rajeshwar Rao.  The challenge, therefore, is to restore trust in the sector by ensuring that few entities or activities do not generate vulnerabilities which go undetected and create shocks and give rise to systemic risk through their interlinkages with the financial system. “Forestalling and where necessary, decisively resolving such episodes becomes a key focus of our regulatory and supervisory efforts,”Rao said at the CII NBFC Summit. - Business Line

🍒 Protection of customer interest non-negotiable: RBI Deputy Governor to NBFCs : Emphasising on the need to create a culture of responsible governance in the NBFC sector, RBI Deputy Governor M Rajeshwar Rao on Friday urged shadow banking players to give utmost importance to protection of customers as it is “non-negotiable”. Recalling incidents of the coercive recovery practice by some of the players, the Deputy Governor said, such developments spurred by purely commercial considerations have dented the credibility of the whole system which flourishes and thrives on trust. - Financial Express

🍒 Rajneesh Karnatak takes over as Union Bank of India Executive Director : State-run Union Bank of India on October 22 announced the appointment of Rajneesh Karnatak as Executive Director. The former chief general manager of Punjab National Bank has over 27 years of experience in banking services. Karnatak also served as a general manager in the erstwhile Oriental Bank of Commerce, where he headed large corporate credit branches and verticals such as credit monitoring, digital banking and mid-corporate credit, the bank said in a release. - Moneycontrol.

🍒 AU Small Finance Bank launches QR Sound Box to boost digital payments : With an aim to enhance its reach in digital payments, leading small finance bank -- AU Small Finance Bank (AU SFB) -- on October 22 announced the the launch of a QR Code Sound Box. The Jaipur-headquartered SFB said that the QR Sound Box will help small merchants to run their operations smoothly without the hassle of reading SMS every time when a customer makes a payment. So far the bank has deployed over two lakh QR Codes. - Moneycontrol.

🍒 Paytm gets SEBI's nod for Rs 16,600 crore IPO ; One97 Communications, the parent company of fintech platform Paytm, has received the nod from the Securities and Exchange Board of India (SEBI) for its Rs 16,600 crore initial public offering (IPO), according to sources privy to the matter. While Rs 8,300 crore will be primary share sale, Rs 8,300 crore will be an offer for sale (OFS), where existing investors can sell their shares. The company is planning for a mid-November listing. It had filed its draft in July. - Moneycontrol.

🍒 PhonePe starts charging processing fees on phone recharges above Rs 50 : Digital payments leader PhonePe has started charging processing fees of Re 1 to Rs 2 on phone recharges over Rs 50. This is being done on an experimental basis with a small number of users, a company spokesperson said. Recharges between Rs 51 and Rs 100 have a Re 1 charge and those above Rs 100 will be charged Rs 2. - Moneycontrol.

🍒 Rupee slips 3 paise to close at 74.90 : The rupee weakened by 3 paise to end at 74.90 against the US currency on Friday, weighed down by a muted trend in domestic equities and firm crude oil prices.  At the interbank foreign exchange market, the local currency opened at 74.82 and witnessed an intra-day high of 74.69 and a low of 74.94 against the US dollar in the day trade. The local unit finally settled at 74.90 a dollar, down 3 paise over its previous close.

🍒 Volatile Sensex, Nifty close weak, amid continued sell-off : The BSE Sensex closed at 60,821.62, down 101.88 points or 0.17 per cent. It hit an intraday high of 61,420.13 and a low of 60,551.15. The Nifty 50 closed at 18,114.90, down 63.20 points or 0.35 per cent. It recorded an intraday high of 18,314.25 and a low of 18,034.35.  The broader market also continued to witness steeper correction. However, the volatility index further softened 2.71 per cent to close below 18 at 17.55. HDFC, Bajaj Auto, Kotak Bank, Axis Bank and ONGC were the top gainers on the Nifty 50 today while Hindalco, Coal India, Tata Motors, ITC and Tata Consumer were the top laggards.

Banking and Financial Awareness for October 22, 2021

 22.10.2021 : Today's Banking / Financial News at a Glance

🍒 PSU banks likely to get capital support in Q4 to meet regulatory requirements : The government is likely to pump capital in public sector banks during the last quarter of the current financial year to meet the regulatory requirements. The government in the Budget 2021-22 has made an allocation of Rs 20,000 crore for the capital infusion in the state-owned banks. The capital position of banks would be reviewed in the next quarter, and depending on the requirement, the infusion will be made to meet the regulatory needs. In the current fiscal so far, all 12 public sector banks have posted a profit, which is being ploughed back to bolster the balance sheet of the banks, sources said. Going forward, they said, the rise in stressed assets would determine capital requirement. - Economic Times

🍒 ACC approves appointment of seven executive directors in various PSB : The Appointments Committee of the Cabinet (ACC) has given its nod for the elevation of seven chief general managers and general managers as Executive Directors (EDs) in various public sector banks (PSBs).  Rajneesh Karnatak, Chief General Manager, Punjab National Bank, has been appointed as Executive Director in Union Bank of India for a period of three years. Ashwani Kumar, Chief General Manager, Punjab National Bank, has been appointed as Executive Director in Indian Bank for a period of three years. - Business Line

 🍒Bank of Maharashtra net profit jumps ₹264 crore in Q2 : Bank of Maharashtra reported a 107 per cent year-on-year jump in second quarter net profit at ₹264 crore against ₹130 crore in the year ago quarter.  Net interest income in the reporting quarter rose 34 per cent yoy at ₹1499 crore. Other income was up 23 per cent yoy at ₹493 crore. Loan loss provisions jumped to ₹583 crore, including towards increase in provisions on account of implementation of resolution plans under RBI’s “Resolution Framework for COVID-19 related stress” (August 6, 2020 circular) against a write back of ₹4.55 crore in the year ago quarter. - Business Line

🍒 Banks may set up central repository to tackle gold loan frauds : Banks are exploring whether a centralised repository for reporting frauds in gold loans should be set up to tackle rising incidents of frauds amidst robust demand for these loans since the outbreak of Covid-19 pandemic.  The repository could help prevent/minimise gold loan frauds as lenders will be able to cross-check prospective borrowers’ record on the quality of gold they pledged for their earlier borrowings, said a senior public sector bank official. Loans against gold jewellery (LAGJ) portfolio of scheduled commercial banks (SCBs) soared by about 66 per cent year-on-yar (yoy) to ₹62,926 crore as at August 27, 2021, against ₹37,860 crore as at August 28, 2020, according to RBI data. SCBs LAGJ portfolio stood at ₹26,542 crore as at August 30, 2019. - Business Line

🍒 IDBI Bank Q2 net profit jumps 75% to ₹ 567 cr on NII growth : IDBI Bank on Thursday reported a 75 per cent jump in its standalone profit after tax to ₹ 567 crore in the second quarter ended September 30, on higher interest income.  The LIC-owned bank had reported a standalone profit after tax of ₹ 324 crore in the year-ago quarter. “Overall, there has been improvement in the bank's performance parameters. The cost of deposits has come down to 3.60 per cent as of September 30, 2021, from 4.41 per cent last year. Similarly, cost of funds has also declined from 4.73 per cent to 3.88 per cent,” the bank's Managing Director and CEO Rakesh Sharma told reporters. - Business Line

🍒 Subscription to sovereign gold bond to open on October 25 : The next tranche of Sovereign Gold Bonds 2021-22 will be open for subscription for five days from October 25, the finance ministry said in a statement on Thursday. The bonds under the 2021-22 series will be issued in four tranches during October 2021-March 2022, taking the total to 10. Under the series, bonds were issued in six tranches from May 2021 to September 2021. The subscription period for 2021-22 Series-VII will be October 25-October 29, and bonds will be issued on November 2, the finance ministry said in a statement. - Business Standard

🍒 Banks' microloan portfolio contracts 7% to Rs 2.36 trillion in June quarter : Micro loan portfolio of lenders shrunk by 7 per cent to Rs 2.36 trillion in the June quarter (Q1FY22) over Rs 2.53 trillion in Q4FY21 (on economic disruption owing to second wave of Covid-19 pandemic. The quarterly decline in gross loan portfolio (GLP) was seen across all lender types, including commercial banks, finance companies, according to CRIF Highmark. The credit information bureau in Q1 review said the microfinance sector was quick to recover to pre-pandemic level by Q4FY21. The enquiries for loans showed an upturn with month-on-month rise of 7 per cent in September 2021. - Business Standard

🍒 Kotak Mahindra Bank partners Pine Labs to expand point-of-sale services : Kotak Mahindra Bank has tied up with Pine Labs to expand its point-of-sale (PoS) services to more merchants, especially retailers. “Through this tie-up, merchants in India will now be able to get the advantage of Kotak Mahindra Bank’s PoS payment solutions bundled with Pine Labs’ technology stack to help grow their business,” it said in a statement on Thursday. Pine Labs has a network of over 2,45,000 merchants across Asia. Noting that retail and large merchants as well as customers are moving towards digital payments, Shanti Ekambaram, Group President – Consumer Banking, Kotak Mahindra Bank, said, “Pine Labs is a leading player with customised solutions for retailers and B2C service providers, and this collaboration with them opens up a significant market opportunity for Kotak to onboard new merchants and offer them an integrated PoS-plus suite of digital payments and banking products proposition.” - Business Line.

🍒 HDFC Bank, Mastercard, USAID and DFC launch $100 million credit facility for MSMEs in India : HDFC Bank, Mastercard, US International Development Finance Corporation (DFC), and US Agency for International Development (USAID) on Thursday launched a $100 million credit facility. This is aimed to promote and encourage small businesses in the country to digitise, while also helping Indian businesses, particularly those that are women-owned, to recover from the economic impacts of the pandemic. “The new credit facility aims to expand lending to small businesses that need financing to maintain and grow their operations, and enable recovery through digitisation, with an emphasis on supporting women-led businesses,” they said in a statement. - Business Standard

🍒 Trade credit insurance norms to kick in from Nov 1 : Companies are gearing up for trade credit insurance covers, for which the guidelines come into effect from November 1. This is expected to improve liquidity for micro, small and medium enterprises (MSMEs).  A number of insurance companies are said to be working on the draft agreements and products. “The new trade credit insurance (TCI) guidelines have come at the right time. The Factoring Regulation (Amendment) Act, 2021 allows NBFCs [non-banking financial companies] as factors. Once the RBI [Reserve Bank of India] amends the TReDS [trade receivables discounting system] guidelines to allow an NBFC as a financier on the platform, it will increase liquidity and financiers will have a risk-sharing partner,” said Ketan Gaikwad, Managing Director and CEO, Receivables Exchange Of India Limited (RXIL). - Business Line

🍒 Bitcoin edges off all-time high : Bitcoin fell slightly in Asian hours on Thursday, a day after marking an all-time high on optimism around the launch of the first US bitcoin futures ETF.  The world’s largest cryptocurrency was last down 1.3 per cent at $65,184 after hitting a record $67,016 on Wednesday, but still above a previous peak of $64,895 seen in April. “We think its going to go higher and we can get to 80,000 or 90,000 by the end of this year easy, but that won’t be without volatility,” said Matt Dibb, COO of Singapore-based Stack Funds. - Business Line

🍒 National Asset Reconstruction Company: First set of NPA transfer to bad bank likely by January : The National Asset Reconstruction Company (NARCL), or the so-called bad bank, is expected to witness the transfer of the first batch of toxic assets worth about Rs 90,000 crore by January 2022, banking sources told FE. Earlier this month, the NARCL got a licence from the central bank to start operations. “It’s (NARCL) in the process of forming its board. Large stressed assets have already been identified, so their transfer is unlikely to be delayed beyond late December or early January,” a top banker familiar with the development told FE. The asset transfer will be a decisive step towards the resolution of large stressed assets worth Rs 2 lakh crore in the banking system. - Financial Express

🍒 Mudra loan scheme for micro enterprises nears 100 percent disbursal rate : Credit disbursement under Pradhan Mantri Mudra Yojana (PMMY) has neared a 100 percent disbursement level in 7 months in the current fiscal. Non-banking financial companies (NBFCs), small finance banks and public and private lenders have disbursed Rs. 1.11 lakh crore out of the Rs. 1.17 lakh crore amount sanctioned.Thus, a little over the first half of the current fiscal, 95.19 percentf sanctioned amount has been disbursed. The disbursement rate under the previous fiscal stood at 94.7 percent, in FY20 it was  97.6 percent, 97 percent in FY19, 97.14 in FY18, 97.11 in FY17 and 96.73 in FY16. - Moneycontrol.

🍒 Bharti AXA Life Insurance signs bancassurance pact with Utkarsh Small Finance Bank : Bharti AXA Life Insurance on October 21 announced its bancassurance partnership with Utkarsh Small Finance Bank Limited (USFBL) for the distribution of life insurance products through the bank’s network of branches across the country. With this collaboration, Bharti AXA Life’s insurance plans including protection, health, savings and investment, will be available for purchase to over 3 million customers of the bank across its more than 600 branches in 202 districts spread across 19 states and 2 union territories in the country. - Moneycontrol.

🍒 Gold prices marginally dip to Rs 47,469/10 gm on global cues; silver touches Rs 65,000 a kg : Gold prices slightly eased by Rs 79 to Rs 47,469 per 10 gram in the Mumbai bullion market tracking muted global cues. The precious metal was also pressured by a firm dollar and US treasury yields soared above 1.67 percent.  The price of 10 gram, 22-carat gold in Mumbai was Rs 43,482 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,469 plus GST. The 18-carat gold quoted at Rs 35,602 plus GST in the retail market. Silver prices gained by Rs 4 to Rs 65,000 per kg against its closing price on October 19.

🍒 Sensex ends 336 points lower, Nifty below 18,200 as sell-off continues : The BSE Sensex closed at 60,923.50, down 336.46 points or 0.55 per cent. It hit an intraday high of 61,621.20 and a low of 60,485.65. The Nifty 50 closed at 18,178.10, down 88.50 points or 0.48 per cent. It hit an intraday high of 18,384.20 and a low of 18,048.00. Kotak Bank, Tata Motors, Grasim, HDFC and BPCL were the top gainers on the Nifty 50 while Asian Paints, Hindalco, Infosys, Reliance and TCS were the top losers.

🍒 Rupee ends flat at 74.87 vs USD ; The rupee settled just 1 paisa higher at 74.87 (provisional) against the US dollar on Thursday amid a muted trend in domestic equities. At the interbank forex market, the local unit opened at 74.86 against the greenback, and moved in a range of 74.69 to 74.89 during the session. It finally ended at 74.87, registering a rise of just 1 paisa over its previous close..

Banking and Financial Awareness for 21 October 2021

 

21.10.2021 : Today's Banking / Financial News at a Glance

🍒 RBI may be looking at changing its reserve management strategy : RBI may be internally exploring shedding its traditional approach to foreign exchange reserve management amidst falling global yields adding to the fiscal costs of managing the reserves. A research paper by RBI economists suggests that the central bank should be more active in its forex assets management including looking beyond SDR currencies and active management of its gold reserves. Global interest rates which have been on declining over the last four decades in advanced economies, touched their historic lows in 2020. "This low yield environment has made it an arduous task for the reserve managers to generate reasonable returns on their foreign assets" said a paper by Ashish Saurabh and Nitin Madan of RBI's department of External Investments and Operations. - Economic Times

🍒 Gross NPAs of banks may decline to 6.9% by March 2022: Report : Gross non-performing assets (NPAs) and net NPAs of banks are likely to decline to 6.9-7 per cent and 2.2-2.3 per cent, respectively, by the end of March 2022 as compared to 7.6 per cent and 2.5 per cent, respectively, as of March 31, 2021, according to a report by rating agency ICRA. GNPAs and NNPAs stood at 8.6 per cent and three per cent, respectively, as on March 31, 2020. "The GNPAs and NNPAs are expected to further decline to 6.9-7 per cent and 2.2-2.3 per cent by March 2022, which will continue to be a relief for the bottomline (profit) of lenders," the credit rating agency said in the report. - Economic Times

🍒 YES Bank showing remarkable progress; to take to two more years to stabilise: Former SBI chief : Crisis-hit YES Bank has shown remarkable progress after its management was taken by the clutch of investors led by State Bank of India (SBI) last year and may take two more years to stabilise, said former SBI chairman Rajnish Kumar. "The situation in which YES Bank was, you have to give three years time at least for it to stabilise... it has shown remarkable progress as the condition was very bad when SBI salvaged it," he told PTI while sharing a sneak peek of his memoir. In his book titled 'The Custodian of Trust', Kumar said that SBI was reluctant to play the lender of last resort role for the YES Bank but circumstances compelled it to rescue the country's fourth largest private sector lender. - Economic Times

🍒 Citi appoints Rajeev Mantri as CFO, Citi India and cluster finance head, south Asia : Citi has announced the appointment of Rajeev Mantri as chief financial officer (CFO), Citi India, and cluster finance head, south Asia, effective October 5, 2021, said a statement issued today. In this role, Mantri will be based in Mumbai, and responsible for the finance function, overseeing business planning and strategy, balance sheet management, financial controls, reporting and tax matters and will focus on delivering the financial plan, while working closely with key stakeholders on franchise-level matters in India. In addition, he will also provide governance and oversight on the finance function of Sri Lanka and Bangladesh. - Economic Times

🍒 Banks flag concerns over US rules on consumer data, seek govt guidance : India's banks have approached the government with their concerns over the mandatory sharing of customer details with US authorities under that country's expanded National Defense Authorization Act (NDAA), which took effect on January 1. A government official confirmed that the Indian Banks' Association (IBA) has sought government intervention and guidance on the issue. Banks have pointed out that the provision will raise costs and any compliance shortfall can have serious implications. - Economic Times

🍒 Insurers settle claims worth ₹20,859 cr : Insurers have so far settled claims worth ₹20,859 crore related to Covid-19. According to the latest data available with the industry, the settlement ratio stood at 88 per cent as on October 13, for ₹20,859.4 crore. Of the total claims of 25,96,072, 22,84,429 have been settled by insurers.  Insurers, however, are now seeing a dip in demand for Covid-specific policies. “We find that the demand for health cover is now shifting towards non-communicable diseases (NCDs) and critical illnesses,” Sanjay Datta, Head - Underwriting & Claims, ICICI Lombard General Insurance Company, told BusinessLine. - Business Line

🍒 L&T Finance Holdings’ Q2 net profit down 15.5% : L&T Finance Holdings reported a 15.5 per cent drop in its consolidated net profit for the second quarter of the fiscal. Its net profit stood at ₹224.03 crore for the quarter-ended September 30, 2021 as against ₹265.12 crore in the same period last fiscal. However, on a sequential basis, it posted a 26.5 per cent jump from its net profit of ₹177.02 crore in the June 2021 quarter. Its total revenue from operations increased by 10.5 per cent to ₹3,051.82 crore in the second quarter of the fiscal from ₹3,408.1 crore a year ago. However, other income declined by 18 per cent on a year-on-year basis to ₹82.64 crore in the July to September 2021 quarter. “In the second quarter of the fiscal, all L&T Finance Holdings businesses witnessed robust disbursement momentum,” it said in a statement on Wednesday. - Business Line

🍒 BNP Paribas keen to become ‘go to’ bank for India Inc’s overseas buys : BNP Paribas,which operates in over 70 countries, sees itself emerging as the “go to” investment bank for Indian corporates looking to expand their global footprint through the mergers & acquisitions (M&A) route, Aymar de Liedekerke Beaufort, Head of Territory, India, has said. “We do see several Indian corporates emerging as champions (at the global stage). We want to work with the top 100 Indian corporates and believe many of these will have specific acquisitions to do in Europe and this is where they may need a bank like us,” Beaufort told BusinessLine in an interview. - Business Line

🍒 NPCI launches NTS platform for card tokenisation : National Payments Corporation of India (NPCI) on Wednesday announced the launch of NPCI Tokenization system (NTS) to support tokenisation of cards as an alternate to storing card details with merchants. “The NPCI Tokenization System (NTS) will support the tokenisation of RuPay cards to further enhance the safety of customers and provide a seamless shopping experience to consumers,” it said in a statement. With NTS, acquiring banks, aggregators, merchants and others can get themselves certified with NPCI and can play the role of Token Requestor to help save the token reference number (Token Reference On File or TROF) against all card numbers saved, it further said. “All these businesses can maintain their RuPay consumer base utilising TROF for future transactions initiated by their respective RuPay consumers,” it said. - Business Line

🍒 RBI imposed a monetary penalty of ₹1 crore on Paytm Payments : The RBI has imposed a monetary penalty of ₹1 crore on Paytm Payments Bank (PPBL) and ₹27.78 lakh on Western Union Financial Services Inc (WUFSI). RBI said the monetary penalty on PPBL has been imposed for an offence under the Payment and Settlement Systems Act, 2007 (PSS Act). The penalty on WUFSI, a money transfer service – cross-border in-bound service (customer-to-customer only) operator – has been imposed for non-compliance with certain provisions of RBI’s directions contained in its Master Direction on Money Transfer Service Scheme (MTSS Directions), according to a central bank statement. - Business Line

🍒 EPFO adds 14.81 lakh members in August : The provisional payroll data of EPFO continued to show a growing trend consecutively for the last five months and added around 14.81 lakh net subscribers in August. The net subscriber addition has increased by 12.61 per cent as compared to July’s figures. Out of the total 14.81 lakh net subscribers, around 9.19 lakh workers are new members of the EPFO. Around 5.62 lakh workers exited but rejoined the EPFO by changing jobs. Workers in the age-group of 22-25 years registered highest number of net enrolments with 4.03 lakh additions during August, the Union Labour Ministry claimed in a release. - Business Line

🍒 RBI rule on recurring payments: Small businesses, start-ups feeling the heat : Small businesses and start-ups running on a subscription model are losing out on users and timely payments due to the Reserve Bank of India’s new rule on recurring payments.  For instance, the non-profit digital rights advocacy group, Internet Freedom Foundation (IFF), which runs on a monthly donorship model, lost nearly 70 per cent of its existing membership base of close to 423. Apar Gupta, Advocate and Executive Director, IFF, told BusinessLine: “It took us three years to build our member base. Most of our donors signed up using their debit and credit cards, which has been the primary mode of recurring online payments in India. After the RBI mandate came into being post-September 30, they weren’t able to sign up or make those payments. - Business Line

🍒 Govt to soon reach out to potential buyers of debt-laden IDBI Bank : The government will soon reach out to interested buyers of IDBI Bank and inform them about the broad contours of the strategic disinvestment, which is going to lay the groundwork for privatisation of public sector banks. The Centre, through its advisors, will share the strategic sale plan with investors, and how the deal is expected to be structured, an official said. The exercise would be undertaken before the government comes out with the preliminary information memorandum (PIM) and invites expression of interest (EoI) for the IDBI Bank sale, said an official. The investors’ interest would be gauged, and suitable structuring of the transaction would be done, he added. - Business Standard

🍒 Gold prices jump above Rs 47,500/10 gm on firm global trend, festive demand; Silver costlier by Rs 1,386 a kg : Gold prices rose by Rs 164 to Rs 47,548 per 10 gram in the Mumbai bullion market tracking firm global trend and festive demand. The precious metal upside was capped by sharp appreciation in rupee, firm dollar and rising Treasury yields. The price of 10 gram, 22-carat gold in Mumbai was Rs 43,554 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,548 plus GST. The 18-carat gold quoted at Rs 35,661 plus GST in the retail market. Silver prices surged by Rs 1,386 to Rs 64,496 per kg against its closing price on October 18. - Moneycotrol.

🍒 Sensex drops over 200 pts in early trade; Nifty slips below 18,400 : Equity benchmark Sensex tumbled over 200 points in opening trade on Wednesday, tracking losses in index majors TCS, Bajaj Finance and Axis Bank as market participants booked profits at higher levels.  The 30-share index was trading 209.46 points or 0.34 per cent lower at 61,506.59 in initial deals. Similarly, the Nifty dropped 85.45 points or 0.46 per cent to 18,333.30. Bajaj Finance was the top loser in the Sensex pack, shedding around 2 per cent, followed by IndusInd Bank, Bajaj Finserv, Bajaj Auto, Tata Steel and Axis Bank.  On the other hand, Nestle India, HUL, Bharti Airtel, Asian Paints and HCL Tech were among the gainers.

🍒 Rupee ends 47 paise higher against the dollar on Wednesday : The rupee ended 47 paise stronger on Wednesday due to dollar inflows in the backdrop of foreign portfolio investors eyeing investments in public offerings by Indian companies and due to the weakening of the greenback.  The Indian unit closed at 74.88 per dollar against the previous close of 75.35. In intraday trade, the rupee saw a high of 74.83 to the dollar and a low of 75.1350.

Banking and Financial Awareness for October 20, 2021

  20.10.2021 : Today's Banking / Financial News at a Glance

🍒 SBI board wanted letter of support from govt before approving Jet Airways resolution plan: Rajnish Kumar : SBI's board members were keen on a letter of support from the government before giving nod to the resolution plan of crisis-ridden Jet Airways, the bank's former chairman Rajnish Kumar has said. In his book titled 'The Custodian of Trust', Kumar said dealing with the Jet Airways issue was the one of the most difficult assignments that he had faced during his eventful term as the head of the country's largest lender. Most of the banks were extremely reluctant to support a resolution plan for Jet Airways, he wrote, while recalling the developments with regard to the resolution plan of the airline which unfortunately could not get through as promoters were not able to fulfil the required conditions in the stipulated time. "For me too, this was one of the most challenging cases with even the SBI board being uncomfortable in backing me on this issue, not because I did not enjoy their support or goodwill but because they felt that it posed a huge risk to the reputation of the bank.  - Economic Times

🍒 HDFC Bank suspends employees held for attempts of unauthorised withdrawal from high-value NRI account: HDFC Bank has suspended the employees who were arrested by the Delhi Police for alleged involvement in attempts of unauthorised withdrawal from high-value NRI account. "Basis the FIR, police has arrested suspects including bank staff. We have suspended bank staff pending outcome of the investigation," the bank said in a statement on Tuesday. "Our systems detected unauthorised and suspicious attempts to transact in certain accounts. Basis the system alerts, we reported the matter to law enforcement agencies for further and necessary investigation, and lodged an FIR," added the bank. - Economic Times

🍒 Axis Bank bets big on merchant acquiring : Private sector lender Axis Bank has outlined an ambitious strategy for merchant acquisition and onboarding and has begun small ticket lending to them. Axis Bank is now the third-largest point of sale (PoS) acquiring bank in the payments acceptance business in the country with an installed base of 7.09 lakh PoS devices. The bank processes around ₹20,000 crore of volumes per month as on August 31, 2021. Sanjeev Moghe, EVP and Head, Cards and Payments, Axis Bank said the bank has about 15 per cent market share in terminals and expects it to grow further. “Every terminal comes with a current account for the merchant and that means that at some ratio, we can lend to the merchant,” he said in an interaction with BusinessLine. - Business Line

🍒 Axis Bank to waive 12 EMIs on select home loans under festive offer : Private sector lender Axis Bank on Tuesday announced waiver of 12 EMIs on select home loan products, and discounts on various online purchases as part of its festival offer. Axis Bank is offering waivers of 12 EMIs on select home loan products and providing on-road finance without any processing fee for two-wheeler customers, it said in a release. For business owners, it will offer several benefits on term loans, equipment loan and commercial vehicle finance. Announcing the launch of 'Dil se Open Celebrations : kyunki Diwali roz roz nahi aati', the bank said it will offer deals and discounts on shopping in restaurants and other retail loan products on purchases made through Axis Bank debit and credit cards. - Economic Times

🍒 Banks hire for $93 billion India, Southeast Asia tech deal hunt : Investment banks are boosting their technology hiring in Southeast Asia and India as the region’s fast-growing consumer internet markets catch up with their peers, pushing deals to new heights. Global lenders Barclays Plc and Citigroup Inc. have created new senior roles, while regional and boutique players are staffing up to capture a surge of activity in mergers and acquisitions and initial public offerings. “Every single investment bank is looking to hire technology, media and telecommunications bankers,” said Anand Menon, managing director of Executive Principles, a head-hunting firm in India. “TMT is an animal producing multiple babies. We need new-age bankers who think like entrepreneurs to cover them with the same speed as these startups.” - Economic Times

🍒 Indian banks face rise in bad loans to 8-9% of lending: CRISIL : Indian banks are likely to see a rise in gross non-performing assets (NPA) to 8-9% of total lending at the end of this fiscal year from 7.5% last year, rating agency CRISIL said in a report on Tuesday. The rises will be led by retail clients and the micro, small and medium (MSME) segments, said Krishnan Sitaraman, senior director and deputy chief ratings officer, noting they represent 40% of total bank credit. "Stressed assets in these segments are seen rising to 4-5% and 17-18%, respectively, by this fiscal year-end (March 2022). The numbers would have trended even higher but for write-offs, primarily in the unsecured segment," Sitaraman said. - Economic Times

🍒 Moody's upgrades outlook for Indian banks : Global ratings firm Moody's has revised the outlook for the Indian banking system to stable from negative following its upgrade of India's sovereign outlook two weeks ago. Besides receding asset quality concerns since the onset of the pandemic, declining credit costs as a result of improving asset quality is expected to result in higher profitability. Also, capital will remain above pre-pandemic levels, the global rating firm said. - Economic Times

🍒 Govt sanctions ad hoc bonus to employees for FY21 : The government has sanctioned non-productivity linked or ad hoc bonus for central government employees for fiscal year 2020-21. In an office memorandum, the Department of Expenditure under the Finance Ministry said the employees of central para military forces and armed forces too would be eligible for the bonus. Employees who were in service as on March 31, 2021, and have rendered at least six months of continuous service during 2020-21 fiscal year would be eligible for this ad hoc bonus. - Economic Times

🍒 India ranks 40th out of 43 global pension systems, as per survey : India has ranked 40th out of 43 pension systems across the world in the 2021 Mercer CFS Global Pension Index survey, suggesting the need for strategic reforms in India to revamp the pension system so as to ensure adequate retirement income. India had stood at 34th position out of 39 pension systems rated in 2020.  According to the survey, India had an overall index value of 43.3 among the countries analysed, lower than the index value of 45.7 for 2020. Globally, Iceland was ranked highest with an overall index value of 84.2 while Thailand had the lowest overall index value at 40.6. - Economic Times

🍒 Financial stability taken care of under flexible inflation targeting regime: RBI research : Financial stability is well taken care of in the RBI's flexible inflation targeting regime and it need not be a separate explicit monetary policy goal, according to a research paper by RBI economists. The present flexible inflation targeting (FIT) regime in India envisages policy action to ensure price stability, ‘while being mindful of the growth objective’. "The empirical results show that through a proper co-ordination between monetary and macroprudential policies, the financial stability goals are implicitly met under the FIT regime without diluting the inflation targeting objective" said a research paper by RBI economists in the latest monthly bulletin. - Economic Times

🍒 Utkarsh Small Finance Bank forays into Tamil Nadu : Utkarsh Small Finance Bank on Tuesday announced the inauguration of its first branch at Chennai in Tamil Nadu.  The branch is located at Ashok Nagar in the city. “We are pleased to set our footprint in the state of Tamil Nadu with our first branch in the vibrant city of Chennai. The location augurs well and is of prime importance in the overall strategic plan of expansion and growth of the Bank. The city has been the hub of trade, manufacturing, and commerce and has numerous factors that contribute towards the growth of commerce and trade in the country,” Govind Singh, MD & CEO, Utkarsh Small Finance Bank said in a press release. - Business Line

🍒 PhonePe transactions grew 33.6% between July and September : During July to September 2021, PhonePe saw 33.6 per cent growth in transactions from the previous quarter at 526.5 crore, while the value of transactions grew 23.3 per cent to ₹9,21,674 crore. According to the Q3 (July-September) 2021 data released on PhonePe Pulse — an interactive website with digital payment data, insights and trends in India — money transfers with UPI and merchant payments clocked 221 crore and 231 crore transactions, respectively. Further, offline merchant payments grew faster than online, 65 per cent higher than the previous quarter, marking a period of recovery after the second wave of the pandemic and the rapid reopening of stores. - Business Line

🍒 Bitcoin investing could get boost from exchange-traded fund : ProShares said Monday it plans to launch the country’s first exchange-traded fund linked to Bitcoin. The ETF with the ticker symbol “BITO” is expected to begin trading Tuesday, barring any opposition from regulators. In a statement, ProShares CEO Michael Sapir compared the launch of a crypto-linked ETF to the 1993 launch of the first stocks ETF and the 2002 roll-out of the initial bond ETF. The US market for ETFs has grown to more than $5.4 trillion and they’re owned by roughly 9 per cent of all the nation’s households, according to the Investment Company Institute. - Business Line

🍒 Balasubramanian elected as Chairman of Association of Mutual Funds : Balasubramanian has been elected Chairman of Association of Mutual Funds in India, at the recently concluded board meeting of AMFI. Balasubramanian is Chief Executive Officer of Aditya Birla Sun Life Asset Management. He would take over from Nilesh Shah, Managing Director, Kotak Mutual Fund. - Business Line

🍒 RBI unions ask Guv Shaktikanta Das to break deadlock in wage talks : The United Forum of Reserve Bank of India’s Officers and Employees has written to Governor Shatikanta Das requesting him to break the impasse over wage revision negotiations between the unions and the central bank management which hit a roadblock during the final round of discussions. The revision of wages for all RBI staff is due since November 2017, but has been delayed due to the Coronavirus (Covid-19) pandemic. Discussions started at the end July virtually, but hit a roadblock in the last week of September. In a communication to Das, the United Forum, which represents four unions of RBI employees, said that the negotiations had started at a brisk pace, but were held up for ‘some unexplained reason’. - Business Standard

🍒 ICICI Bank seeks buyers for Rs 338-crore exposure to Soma Infrastructure : ICICI Bank on Monday sought expressions of interest (EoIs) from asset reconstruction companies (ARCs) for its Rs 338-crore exposure to Soma Infrastructure. The asset is being offered on a full-cash basis. Soma Infrastructure is a Hyderabad-based company that owes ICICI Bank over Rs 149 crore in principal dues, and another Rs 189 crore in accrued interest and other charges. In an order dated September 20, the Hyderabad ‘B’ bench of the Income Tax Appellate Tribunal had said that Soma Infrastructure was a subsidiary of Soma Enterprise. “…it is clear that assessee is a subsidiary company and assessee has diverted the funds sanctioned by ICICI Bank to the step down subsidiaries i.e. Beta Infratech P. Ltd. and Soma Jabalpur Rewa Tollway Pvt. Ltd.(SPV),” the tribunal observed in the order. - Financial Express

🍒 The Finance Ministry officially has started the process of preparing the Union Budget 2022-23 with meetings scheduled to firm up the revised estimates for this year and demands for next year. While policymakers in North Block are happy with the strong tax collections on the back of a sustained economic recovery, there is worry about the mounting expenditure burden as well. The Covid-19 relief measures announced in the past six and a half months could increase expenditure for the year by Rs 2.01 lakh crore. -Moneycontrol.com

🍒 Sensex turns choppy as investors book profits : Equity benchmark Sensex turned choppy after rallying past the 62,000-mark in opening trade on Tuesday as investors booked profits at higher levels.  Extending its record-setting run, the 30-share index soared nearly 400 points to touch an all-time high of 62,159.78 in opening deals. It, however, pared early gains in the morning session, as it traded 137.33 points or 0.22 per cent higher at 61,902.92. Similarly, the Nifty was quoting 20.75 points or 0.11 per cent at 18,497.80. It touched a new intra-day record of 18,604.45 in early deals. L&T was the top gainer in the Sensex pack, rising around 3 per cent, followed by HUL, Tech Mahindra, HCL Tech, Reliance Industries and Nestle India. - Business Line

🍒 Gold prices climb above Rs 47,500/10 gm on positive global trend, weaker dollar : Gold prices soared above Rs 47,500 per 10 gram on October 19 tracking firm global trend and feeble dollar. The precious metal is trading above $1,780/oz levels breaching the intraday resistance of $1,770-1,773 levels.  The domestic gold market is shut on account of the Eid Milad un Nabi holiday. The price of 10 gram, 22-carat gold in Mumbai settled yesterday at Rs 43,404 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,384 plus GST. The 18-carat gold quoted at Rs 35,538 plus GST in the retail market. Silver prices soared by Rs 1,705 to Rs 64,971 per kg in the evening trade. - Moneycontrol.

🍒 Sensex adds 10,000 points in 8 months to cross 62,000 as 53 stocks surge 100-400% : The run-up in the stock markets seems endless. The momentum continued for the eighth consecutive session on October 19, taking the BSE Sensex above the 62,000 mark and helping the Nifty 50 surpass 18,600, following positive global cues and strengthening economic sentiment. The fall in Covid-19 cases and better corporate earnings have also contributed to the current rally. The BSE Sensex surged 428.31 points to 62,193.90 and the Nifty 50 jumped 106.50 points to 18,583.50 at 12:31 hrs IST, taking the gains over eight sessions to over 5 percent. - Business Line.

Banking and Financial Awareness Bulletin for 19 October 2021

 

19.10.2021 : Today's Banking / Financial News at a Glance

🍒 SBI raises Rs 6,000 crore by issuing Basel III compliant bonds : The country's largest lender SBI on Monday said it has raised Rs 6,000 crore by issuing Basel III compliant bonds. In June, the bank had received approval from its central board for raising fresh additional tier 1 (AT 1) capital of up to Rs 14,000 crore. The committee of directors for capital raising at its meeting on October 18, 2021, accorded its approval to allot 6,000 Basel III compliant fully paid-up debt instruments in the nature of debentures qualifying as AT 1 capital of the bank to bond subscribers, SBI said in a regulatory filing. - Business Standard

🍒 Equitas Small Finance Bank to raise up to Rs 1,000 crore via QIP : Equitas Small Finance Bank (SFB) plans to raise up to Rs 1,000 crore in equity capital by issuing shares to institutional investors to meet minimum public shareholding (MPS) norms. The amount to be raised includes a premium on shares. The firm’s board has approved this raise, which is being done to fulfil requirements stipulated by Securities and Exchange Board of India (Sebi), by raising equity through qualified institutions placement (QIP), the firm informed the BSE. - Business Standard

🍒 RBI imposes penalty of Rs 1 crore on State Bank of India over non-compliance of directions : The Reserve Bank of India imposed a monetary penalty of Rs 1 crore on State Bank of India for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016. "This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949," read the Central Bank circular. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI release read. - Economic Times

🍒 RBI slaps penalty of Rs 1.95 crore on Standard Chartered Bank : The Reserve Bank of India on Monday imposed a monetary penalty of Rs 1.95 crore on Standard Chartered Bank - India for failing to comply with guidelines issued for customer protection, cyber security, credit card operations and creation of central repository for large exposures.  The RBI conducted a statutory inspection of bank’s books and it’s inspection report revealed that that Standard Chartered had failed to credit the amount involved in the unauthorised electronic transactions back to customer accounts. The regulator’s inspection also revealed that the bank was not reporting cyber security incidents within the prescribed time period. - Economic Times

🍒 Bitcoin hovers near six-month high on ETF hopes, inflation worries : Bitcoin hovered near a six-month high early on Monday on hopes that US regulators would soon allow cryptocurrency exchange-traded funds (ETF) to trade, while global inflation worries also provided some support. Bitcoin last stood at $62,359, near Friday's six-month high of $62,944 and not far from its all-time high of $64,895 hit in April. The US Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading this week, Bloomberg News reported on Thursday, a move likely to lead to wider investment in digital assets. - Economic Times

🍒 Paytm allots ₹100 crore to marketing campaigns during festival season : Digital payments platform Paytm on Monday announced that the company and its partners will allocate ₹100 crore for marketing activities during the festive season in a major push planned for the company and its partners. These campaigns will be aligned to promote digital payments in India and educate users about Paytm UPI for money transfers, Paytm Wallet and Paytm Postpaid (Buy Now, Pay Later) for spends, to drive financial inclusion across the country. - Business Line

🍒 RBL Bank working on Abacus 2.0 for digital engagement, customer acquisition : Private sector lender RBL Bank is working on a new digital platform that would help scale up customer acquisition over the next few years.  Called Abacus 2.0, it would enable the bank to provide products and services to new as well as existing customers digitally, said Surinder Chawla, Head, Branch Banking, RBL Bank, noting that more customers have switched to digital banking channels since the start of the pandemic. The bank has about 40 lakh customers in branch banking and credit card as of June 30, 2021 and it expects it to rise to about 1.2 crore to 1.4 crore product-agnostic customers over the next three to four years through Abacus 2.0, according to its investor presentation for the first quarter of the fiscal. - Business Line

🍒 APSEZ raises ₹1,000 crore via NCDs : Adani Ports and Special Economic Zone (APSEZ) on Monday said the company has raised ₹ 1,000 crore by allotment of secured, redeemable, and non-convertible debentures (NCD) on the private placement basis. APSEZ in a BSE filing said that NCDs will be listed on the Wholesale Debt Market segment of BSE Limited. - Business Line

🍒 KreditBee issues over 1 lakh cards within 60 days of launch : Digital lending platform KreditBee has issued over 1 lakh cards within 60 days of its launch.  It aims to expand its portfolio by issuing over 10 lakh ‘KreditBee Cards’ by March 2022, it said in a statement on Monday. KreditBee has provided these cards to all its customers. - Business Line

🍒 Kerala Bank seeks RBI nod to collect NRI deposits : Kerala Bank has sought the permission of the Reserve Bank of India to collect deposits from NRI’s, eyeing the ₹1,50,000,000 crore NRI deposits credited to various commercial and PSU and private sector banks in the State. V N Vasavan, the State Cooperation Minister, pointed out that a major share of this NRI deposit amount is being utilised for disbursing loans to big corporates outside the State and in speculative businesses in stock markets. Kerala Bank is aiming to utilise these NRI deposits for developing the basic infrastructure of the State. - Business Line

🍒 Franklin Templeton strengthens Emerging Markets Equity-India team with new hires : Franklin Templeton on Monday said it has appointed Ajay Argal and Venkatesh Sanjeevi as portfolio managers in a bid to strengthen its Emerging Markets Equity – India team.  Effective October 12, 2021, Argal and Sanjeevi have joined the firm as portfolio managers and both are based at the Franklin Templeton offices in Chennai, reporting to Anand Radhakrishnan who heads up the Emerging Markets  - Business Line

🍒 Nomura India Business Resumption Index rises to an all-time high : The Nomura India Business Resumption Index rose to an all-time high of 108.8 for the week ending October 17 from 105 in the prior week (pre-pandemic level=100), with a broad-based rise across most sub-components. Mobility indices rose sharply ahead of the festive season. The Apple driving index jumped 14.1 percentage points (pp) over the week, while Google workplace and retail & recreation indices rose by 2.7 pp and 3.1 pp, respectively. - Business Line

🍒 PNB Housing locked in lower circuit after it shelves stake sale plan : The shares of PNB Housing Finance Limited (PNBHFL) were locked in the 5 per cent lower circuit on Monday after the company's Board called off its proposed ₹4,000 crore share sale plan to Carlyle Group and other marquee investors, including General Atlantic and Ares SSG, citing protracted delays and uncertainty over regulatory approvals required for the preferential issue. On the BSE, the company's shares opened at ₹607.10, down ₹31.95 or 5.00 per cent as against the previous close of ₹639.05. The company's shares were locked in the 5 per cent lower circuit through the day.- Business Line

🍒 PhonePe reports 85% jump in revenue at ₹690 cr in FY21 : Digital payments company PhonePe has reported a revenue of ₹690 crore in FY 21, which is about an 85.5 per cent jump from ₹372 crore revenue reported in FY20, according to the company's recent regulatory filings. Majority of the company’s revenue has come from payments and allied services. PhonePe claims to have a 45 per cent market share in digital payments, and a 300 million user base. - Business Line

🍒 Edelweiss gets nod, divests stake in insurance broking business : Edelweiss Group on Monday announced the divestment of its majority stake in Edelweiss Gallagher Insurance Brokers Ltd (EGIBL) after approval from the Insurance Regulatory and Development Authority of India (IRDAI). On receipt of the necessary approvals, the company, has in the first tranche, transferred 61 per cent of the stake held by the company in EGIBL to Arthur J Gallagher and Company (AJG) on October 18, 2021, Edelweiss Group said in a stock exchange filing. - Business Line

🍒 SBI General Insurance expects 20% growth in FY22 : SBI General Insurance is expecting close to 20 per cent growth in business in FY22 backed by a steady demand for health insurance products and an improvement in motor insurance starting third quarter of this fiscal. In the first half (April-September), the non-life insurer had witnessed 14 per cent growth in gross direct premium underwritten to ₹4,129 crore, as compared with ₹3,620 crore in the same period last year, as per data available on the IRDAI website. - Business Line

🍒 More than 2 lakh crypto accounts blocked in India over 6 months : The past year or so has seen decentralised cryptocurrency slowly becoming part of the mainstream narrative. On the seamy side, the digital currency has also provided an avenue for online criminal activities involving tax evasion and other kinds of serious frauds. In the past six months, between April-September 2021, the top three cryptocurrency exchanges – WazirX, CoinSwitch Kuber and CoinDCX – have blocked over two lakh accounts citing malicious activities. - Business Line

🍒 Cash going to co-exist with central bank digital currency: Subbarao : Former RBI governor D Subbarao on Monday said there is a strong motivation for the central bank to launch a digital currency and cash is going to coexist with the new-age currency.Addressing an event virtually organised by economic think tank NCAER, Subbarao further said cybersecurity is also one of the downside risks of the Central Bank Digital Currency (CBDC)."There is a strong motivation for the RBI to launch CBDC... Cash is going to coexist with CBDC," he said.  - Business Standard

🍒 Average cost for state debt across states plunges 27 bps to 6.72% : The weighted average cost of borrowing across states has plunged 27 bps to 6.72 per cent from the previous week, but the weighted average yield of the most-traded 10-year debt was unchanged at 6.97 per cent. The 10-year-state loan yields are ruling at the highest level since mid-August and have been tracing the rise in G-Sec yields since late September, which have inched up on concerns over the rise in global energy prices and the uptick in US treasury yields, Care Rating chief economist Madan Sabnavis has said in a note. - Business Standard

🍒 Gold prices slip to Rs 47,384/10 gm as US bond yields rise; silver down Rs 180 a kg : Gold prices fell on October 18, down by Rs 741 to Rs 47,384 per 10 gram in the Mumbai bullion market tracking a sharp fall on Friday in the global market as the Indian market was shut on account of Dussehra and firm equity markets. The precious metal was also pressured by surging 10-year Treasury yield and strength in the dollar.  The price of 10 gram, 22-carat gold in Mumbai was Rs 43,404 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,384 plus GST. The 18-carat gold quoted at Rs 35,538 plus GST in the retail market. Silver prices dropped by Rs 180 to Rs 63,110 per kg against its closing price on October 14. - Moneycontrol.

Rupee trades almost flat at 75.28 against dollar in opening deals : The Indian rupee traded marginally lower by 2 paise at 75.28 against the US dollar in early trade on Monday, tracking stronger greenback against key rivals overseas. At the interbank forex market, the local unit opened on a steady note and traded cautiously between a high of 75.26 and a low of 75.29 against the American currency. 

🍒 Sensex ends near 62k, Nifty above 18,400 : The BSE Sensex which recorded a fresh all-time high of 61,963.07, closed at a record high of 61,765.59, up 459.64 points or 0.75 per cent. It hit an intraday low of 61,624.65. The Nifty50 closed at a record 18,477.05, up 138.50 points or 0.76 per cent, after witnessing a fresh all-time high of 18,543.15. It recorded an intraday low of 18,445.30. Hindalco, Infosys, Tech Mahindra, JSW Steel and Tata Motors were the top gainers on the Nifty 50 while Mahindra & Mahindra, HCL Tech, Dr Reddy, Asian Paints and Britannia were the top losers.

Banking and Financial Awareness update for 18 October 2021

 18.10.2021 : Today's Banking / Financial News at a Glance

🍒 Bank of India cuts home, vehicle loan rates : State-run Bank of India on Sunday announced a cut in its interest rates on home and vehicle loans by 35 basis point and 50 basis points, respectively. With this cut, the interest rate on home loans starts at 6.50 per cent against earlier 6.85 per cent, and at 6.85 per cent against 7.35 per cent prior on vehicle loans, the bank said in a release. This special rate, which is effective from October 18, 2021, till December 31, 2021, is available for customers applying for fresh loans and also for those seeking transfer of loans, it said. - Economic Times

🍒 Bank of Baroda launches centralised agri-loans processing units : Bank of Baroda (BoB) on Saturday launched centralised agri-loans processing units across 16 Zonal Offices. Christened as the Centre for Agriculture Marketing and Processing (CAMP), the unit is a dedicated credit delivery model with a focus on financing non-traditional agricultural products and handling agri-marketing activities, the public sector bank said in a statement. - Business Line

🍒 NARCL: Bad bank to soon bring more directors on board : The National Asset Reconstruction Company (NARCL) better known as bad bank will soon bring more directors on board for better corporate governance. The move aims to ensure fair representation of shareholders as well, sources close to the developments informed. In the beginning of this month, the Reserve Bank of India (RBI) had given licence to the ₹6,000 crore NARCL led by public sector banks with 51 per cent stake in the entity. There would be shareholders' representation from the private sector banks' side, which will have 49 per cent, sources said. Besides, the central bank of India has asked NARCL to submit details of the full board soon, sources added. - Live Mint

🍒 Sundaram Finance to look at co-lending to add more asset classes: MD Rajiv Lochan : Sundaram Finance that built a lending business by financing truck purchases is preparing for the next phase of growth by funding more asset classes amid a possible boom in rural incomes and the government's infrastructure projects, its chief executive said. While its traditional way of doing business like physical interaction and verification of customers' credit worthiness is unconventional, it would leverage digital, technology and data without compromising on its ethos of safety and customer orientation. - Economic Times

🍒 Gold imports jump multi-fold to USD 24 bn in Apr-Sep : Gold imports, which have a bearing on the current account deficit, zoomed to about USD 24 billion during April-September 2021 due to higher demand in the country, according to data from the Commerce Ministry. Imports of the yellow metal was USD 6.8 billion in the corresponding period last year, the data showed. Gold imports during September this year too rose to USD 5.11 billion as against USD 601.4 million in the same month last year. - Economic Times

🍒 Finance Ministry to seek Cabinet nod for setting up company to monetise land assets of privatisation-bound CPSEs : The finance ministry will soon move the Cabinet to seek approval for setting up a company for transfer and subsequent monetisation of land and non-core assets of privatisation-bound CPSEs, an official said. A special purpose vehicle (SPV) in the form of a company would be set up to hold these assets which would be monetised to fetch value to the exchequer, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said. - Economic Times

🍒 HDFC Bank Q2 net up 17.6% on robust interest income : Private sector lender HDFC Bank’s standalone net profit increased 17.6 per cent in the second quarter of the current fiscal supported by a robust growth in net interest income. For the quarter ended September 30, the bank reported net profit of ₹8,834.3 crore against ₹7,513.11 crore in the corresponding quarter last fiscal.Net interest income grew 12.1 per cent to ₹17,684.4 crore (₹15,776.4 crore). Core net interest margin was at 4.1 per cent. Other income was up 21.5 per cent at ₹7,400.8 crore (₹6,092.5 crore). Provisions and contingencies increased 6 per cent to ₹3,924.7 crore (₹3,703.5 crore). “Total provisions for the current quarter included contingent provisions of approximately ₹1,200 crore,” HDFC Bank said in a statement on Saturday. - Business Line

🍒 Bond yields trend higher despite softer inflation : Benchmark yield closed marginally higher this week despite positive inflation data even as rising crude prices, higher US treasury yields and domestic liquidity factor take precedence. During the monetary policy, the Reserve Bank of India (RBI) halted the G-SAP programme while saying it would increase the quantum of VRRR auctions to Rs6 lakh crore by December. The central bank last week conducted an 8-day Variable Rate Reverse Repo auction in which the cut-off yield came in at 3.9 per cent.  - Business Line

🍒 Outward remittances under LRS rose 31% : Outward remittances under the Liberalised Remittance Scheme (LRS) for individuals rose about 31 per cent year-on-year (yoy) in July 2021 to $1.31 billion, mainly on the back of increase in expenses towards studies and travel, according to Reserve Bank of India (RBI) data. The remittances were $995.16 million in the year ago period. - Business Line

🍒 Life insurance sees good growth, claims fall post second wave : The life insurance industry is slowly coming back to normal after facing a high claim burden in the first five months of the current fiscal following the second wave of the Covid-19 pandemic. “The industry is doing well. With every passing month, business is improving. Private sector life insurance companies are doing well and public sector bank-led banca companies are doing especially well,” said Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance. - Business Line

🍒 FPIs turn net sellers in capital markets in Oct so far, pull out net Rs 1,472 crore : Foreign portfolio investors (FPI) have turned net sellers in the capital markets in October so far, reversing the trend of net investments in the previous two months, due to depreciation in the rupee and global factors, experts said.  According to the depositories' data, FPIs have pulled out Rs 1,472 crore from capital markets on a net basis in the current month so far. A trend reversal was witnessed in the debt segment in October from the big buying in the previous two months when FPIs had invested Rs 13,363 crore in September and Rs 14,376.2 crore in August. In October so far, they pulled out Rs 1,698 crore. "This trend reversal in debt investment is due to the INR depreciation in October," said VK Vijayakumar, chief investment strategist at Geojit Financial Services. - Business Line

🍒 Gold ETFs attract Rs 446 crore in September : Gold exchange-traded funds (ETFs) attracted Rs 446 crore in September and inflow may continue in coming months due to strong demand on the back of festival season in the country.  The was sharply higher than the net inflow of ₹24 crore recorded in the previous month. In July, the category saw a net withdrawal of ₹61.5 crore,data with the Association of Mutual Funds in India (Amfi) showed. With this, gold ETF category has received a net inflow of ₹3,515 crore so far. The segment witnessed just one month of net outflows, which was in July. - Business Line

🍒 Mcap of eight of top-10 most valued firms jump over ₹ 1.52 lakh crore : Eight of the top-10 most valued companies together added ₹ 1,52,355.03 crore in market valuation last week, with HDFC Bank and State Bank of India emerging as the biggest gainers. Last week, the BSE benchmark Sensex rallied 1,246.89 points or 2.07 per cent. The benchmark went past the 61,000-mark for the first time ever on Thursday. Leading the gainers' chart, HDFC Bank's valuation jumped ₹ 46,348.47 crore to ₹ 9,33,559.01 crore. - Business Line.

Banking and Financial Awareness for Today 17, October 2021

 

 *Financial News Bulletin Dt. 17th October , 2021*

Private sector banks recorded higher loan growth compared to PSBs and foreign banks, with their share in total credit steadily increasing to 35.4% in March 2021 from 20.8% in March 2015, according to RBI.  This has been at the cost of PSBs, whose share in total credit has come down from 71.6% to 56.5% over the same period, said the central bank. As of March-end 2021, foreign banks had a 4% market share (4.9% as of March- end 2015); regional rural banks (3.1% vs 2.6%); and small finance banks/ SFBs (1%).  At the end of March 2021, gross outstanding credit of scheduled commercial banks amounted ₹1,10,78,050 crore (₹68,78,400 crore as of March-end 2015).

-Business Line

HDFC Bank’s standalone net profit rose by 17.6% for the second quarter of the fiscal, supported by a robust growth in net interest income. For the quarter ended Sept 30, 2021, the bank reported net profit of ₹8,834.3 crore, as against ₹7,513.11 crore in the corresponding quarter last fiscal. 

-Business Line

Bank of Baroda today launched centralised agri-loans processing units across 16 Zonal Offices. Christened as the Centre for Agriculture Marketing and Processing (CAMP), the unit is a dedicated credit delivery model with a focus on financing non-traditional agricultural products and handling agri-marketing activities, the bank said in a statement.

-Business Line

Karnataka Bank has received approval from the RBI to appoint Pradeep Kumar Panja, an Independent Director of the bank, as part-time non- executive Chairman with effect from Nov14, for a period of 3 years. He will succeed P Jayarama Bhat, who will complete his term on November 13.

-Business Line

Max Life Insurance has sought insurance regulator IRDAI’s approval to set up a subsidiary to undertake pension fund management business, said Prashant Tripathy, MD & CEO. Pension regulator PFRDA had recently granted approval to MLI to become a sponsor of a pension fund manager.

-Business Line

Petrol and diesel prices on Saturday were hiked again by 35 paise a litre to take retail rates across the country to new record highs. With this hike, petrol is now at the ₹100-a-litre mark or more in all State capitals, while diesel has touched the ₹100-level in a dozen States. Diesel is nearing the ₹100-a-litre mark in Goa and Bengaluru.

-Business Line

Daily General & Financial Awareness Update for 16 October 2021

16.10.2021 : Today's Banking / Financial Bulletin

🍒 ‘Higher loan growth for private banks’ : Private sector banks recorded higher loan growth compared to other bank groups (PSBs and foreign banks), with their share in total credit steadily increasing to 35.4 per cent in March 2021 from 20.8 per cent in March 2015, according to Reserve Bank of India (RBI). This has been at the cost of public sector banks, whose share in total credit has come down from 71.6 per cent to 56.5 per cent over the same period, said the central bank. - Business Line

🍒 PNB Housing shelves ₹ 4,000-cr share sale plan to Carlyle Group, other investors : PNB Housing Finance Limited (PNBHFL) has called off it’s proposed ₹ 4,000 crore share sale plan to Carlyle Group and other marquee investors including General Atlantic and Ares SSG, citing protracted delays and uncertainty over regulatory approvals required for the preferential issue.  At a Board meeting held on Thursday evening, PNBHFL decided not to proceed with the proposed preferential issue and therefore will now evaluate other alternatives to raise capital. Also, all the share subscription agreements executed with the proposed allottees have been terminated. - Business Line

🍒 Fintech firm Tala raises $145 m in Series-E round : Tala, a financial services company, has raised $145 million in Series E fundraise led by Upstart, taking the total funds raised to $350 million.  Stellar Development Foundation, Kindred Ventures and the J. Safra Group, IVP, Revolution Growth, Lowercase Capital, and PayPal Ventures also joined the round. Tala will use the investment to accelerate the rollout of its new financial account experience, which provides customers with fresh tools to borrow, save and manage their money, all through Tala’s top-rated consumer finance app,” a Tala statement has said. - Business Line

🍒 India's Forex reserves rise by $2.04 billion to $639.51 billion : The country's foreign exchange reserves rose by $2.039 billion to $639.516 billion in the week ended October 8, according to RBI data. In the previous week ended October 1, the reserves had dipped by $1.169 billion to $637.477 billion. The reserves had surged by $8.895 billion to a lifetime high of $642.453 billion in the week ended September 3. During the reporting week ended October 8, the rise in the reserves was on account of an increase in the Foreign Currency Assets (FCAs), Reserve Bank of India's (RBI) weekly data released on Friday showed. FCA rose by $1.55 billion to $577.001 billion in the reporting week, as per the data. - Economic Times

🍒 Bitcoin nears $60,000 as investors eye first US ETFs : Bitcoin hit a six-month high on Friday,approaching the record hit in April, as traders became increasingly confident that US regulators would approve the launch of an exchange-traded fund based on its futures contracts.  The world’s biggest cryptocurrency rose nearly 4 per cent to as high as $59,664, its highest since mid-April. It has doubled in value this year and is near April’s record high of $64,895. The US Securities and Exchange Commission (SEC) is poised to allow the first US bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday, citing people familiar with the matter. - Business Line

🍒 RBI Guv to IMF, World Bank: Will remain accommodative in monetary policy : India, which is experiencing robust economic recovery although uneven across sectors, has decided to remain accommodative in its monetary policy, the Reserve Bank of India Governor told the international community on Thursday. India is witnessing a very robust economic recovery, but there is still unevenness across sectors, RBI Governor Shaktikanta Das said in his address to the annual meeting of the International Monetary Fund and the World Bank. - Business Line

🍒 Karnataka Bank to get Centenary building : Foundation stone for the establishment of the centenary building of Karnataka Bank was laid in Mangaluru on Friday. Established in 1924, the bank will observe its Centenary Year during the financial year 2023-24.  To be constructed adjacent to the present Head Office premises of the bank in Mangaluru, the proposed new building will be of 2.41 lakh sq ft of area. Laying the foundation stone for the centenary building, Mahabaleshwara MS, Managing Director and Chief Executive Officer of Karnataka Bank, said the bank has always travelled ahead of time to cater to the varying demands of the customers from all walks of life. - Business Line

🍒 Unity Small Finance Bank plans to tap 100 million Payback users : Unity Small Finance Bank (SFB), promoted by the Centrum-BharatPe combine, is looking to target over 100 million members of Payback - a loyalty programme company BharatPe acquired in June - to become a digital bank. Jaspal Bindra, chairman of Centrum Capital, had said that the proposed business model is one of collaboration and open architecture, to deliver a seamless digital experience, and aspire to be India’s first digital bank. Elaborating on the bank's approach on a digital platform, Ashneer Grover, co-founder and managing director, BharatPe, said it would need all possible digital channels, including Payback's 100-million-plus customer base. "This will be done within what the regulatory framework allows us to do at arm's length. This (Payback) is an independent business,” said Grover. - Business Standard

🍒 Public insurers lost 30% motor segment business since FY18: Care Ratings : Even as the motor insurance segment, which had a massive decline in FY21, is returning to the growth path, public sector general insurers have been steadily losing ground to the private insurers overall and more so in the bread and butter motor segment, with pie crimping to 32.6 per cent in August, down from 36.6 per cent a year ago. As against this, the private sector has improved their market pie to 67.4 per cent in the reporting month from 63.4 per cent in the same period last year, shows an analysis of the monthly data by Care Ratings. - Business Standard

🍒 Sensex jumps 50% from last Dussehra to scale 61,000 mark. 169 stocks give multibagger returns : India’s equity markets have generated huge wealth for investors since Dussehra last year as the benchmark indices scaled new highs, even though there was a pause in April-May due to the second Covid-19 wave.  The BSE Sensex has rallied more than 50 percent since last Dussehra on October 25, 2020, to surpass the 61,000 milestone on October 14, a day before Dussehra celebrations across the country this year. - Moneycontrol.

🍒 The 4 largest US consumer banks posted another strong quarter this week as the rebounding economy allowed them to release more cash they had set aside for pandemic losses, while sizzling deals, equity financing and trading also boosted their bottom lines. JPMorgan Chase & Co, Citigroup, Well Fargo & Co and Bank of America Corp, seen by analysts and economists as bellwethers of the broader economy, reported a combined profit of $28.7 billion for the third quarter, beating analyst estimates. - Moneycontrol

🍒 Max Life seeks IRDAI nod to launch subsidiary ; Max Life Insurance (MLI) has sought insurance regulator IRDAI’s approval to set up a subsidiary to undertake pension fund management business, said Prashant Tripathy, Managing Director & CEO. Pension regulator PFRDA had recently granted approval to MLI to become a sponsor of a pension fund manager. - Business Line

🍒 RBI approves appointment of Pradeep Kumar Panja as Chairman of Karnataka Bank : Karnataka Bank Ltd has received approval from the Reserve Bank of India to appoint Pradeep Kumar Panja, an Independent Director of the bank, as part-time non-executive Chairman with effect from November 14, for a period of three years. He will succeed P Jayarama Bhat, who will complete his term on November 13. Pradeep Kumar Panja retired as Managing Director (Corporate Banking) of State Bank of India (SBI). Prior to this, he also held the post of Managing Director of State Bank of Travancore for about a year. - Business Line

🍒 IL&FS seeks NCLT approval to place Rs 4,000 crore of assets in InvIT : The IL&FS group has sought approval from the National Company Law Tribunal (NCLT) to move five highway assets of the beleaguered group to an infrastructure investment trust (InvIT). An independent assessment has valued the projects at Rs 4,000 crore, said a company spokesman while confirming the development. The valuation is a regulatory requirement under the Securities and Exchange Board of India (Sebi) rules. With the NCLT approval, a total of 11 projects would be ready for monetisation through the InvIT route. The first tranche of six projects valued at around Rs 9,200 crore already have the NCLT approval. - Business Standard.

Banking and Financial Awareness for 15 October 2021

Today's Banking / Financial News at a Glance

🍒 UCO Bank CEO Atul Kumar Goel appointed chairman of Indian Banks' Association : UCO Bank CEO Atul Kumar Goel has been appointed as chairman of the Indian Banks' Association (IBA) for 2021-22 succeeding Union Bank of India CEO Rajkiran Rai. Last month Goel was shortlisted by the Banks Board Bureau (BBB) to take over as Punjab National Bank (PNB) CEO from January 2022. In the managing committee meeting on Thursday, IBA members also elected State Bank of India chairman Dinesh Kumar Khara, Canara Bank CEO L V Prabhakar and IDBI Bank CEO Rakesh Sharma as deputy chairmen of the IBA. Madhav Nair, country head of Mashreq Bank was elected as honorary secretary of the association. - Economic Times

🍒 Atleast 50% of retail, MSME loans to move to digital lending: Union Bank MD : With digitization gaining pace, close to 50 per cent of retail and MSME loans offered by banks will shift to digital lending platforms over the next two to three years, Union Bank of India's Managing Director and CEO Rajkiran Rai G said on Thursday. Rai said digital lending is changing the banking landscape in a big way because of the availability of data and many ecosystem partners collaborating with banks. "I feel that at least 50 per cent of the loans under retail and MSME segments will move to the digital lending platforms, right from sourcing to documentation level, in two to three years," Rai said while speaking at Sibas 2021, an annual banking and finance conference. - Business Standard

🍒 RBI approves reappointment of Amitabh Chaudhry as MD & CEO of Axis Bank : The Reserve Bank on India (RBI) on October 14 approved the reappointment of Amitabh Chaudhry as the Managing Director and Chief Executive Officer of Axis Bank. The private sector lender, in a regulatory filing, confirmed that it has received the central bank's nod to reappoint Chaudhry as the MD and CEO for another three-year period. - Moneycontrol.

🍒 RBI withdraws restrictions on Hindu Cooperative Bank, Pathankot : The RBI on Thursday withdrew all restrictions imposed on Hindu Cooperative Bank Limited, Pathankot. The Reserve Bank had issued directions stipulating certain restrictions on the bank in March 2019. The directions were modified from time to time and were last extended up to October 24, 2021. "The Reserve Bank of India on being satisfied that in the public interest it is necessary to do so...hereby, withdraws with effect from close of business on October 14, 2021, the said directions so issued to Hindu Cooperative Bank Limited, Pathankot, Punjab," it said in a statement. - Economic Times

🍒 PMC Bank fraud case: HC rejects Rakesh Wadhawan's medical bail plea : The Bombay High Court on Thursday refused to grant bail on health grounds to jailed businessman Rakesh Wadhawan, accused of money laundering in the multi-crore Punjab and Maharashtra Co-operative (PMC) Bank fraud case. Wadhawan, founder of Housing Development Infrastructure Limited (HDIL), was arrested by the Enforcement Directorate in 2019 in the case. A single bench presided over by Justice Nitin Sambre said that Wadhawan's submission that he was immediately required to be released on temporary bail on medical ground, was "not justified". - Economic Times

🍒 Five banks may bid for Citi's India consumer businesses : Five top lenders, including HDFC Bank and Kotak Mahindra Bank, are expected to submit binding bids for the Citi India consumer businesses before the October 26 deadline, two officials aware of the development told ET. Axis Bank, IndusInd Bank and DBS India are also in contention for the businesses Citi is exiting in India. Although the US lender is seeking a valuation in excess of $2 billion, the bids could be more circumspect after Citi lost significant market share in its retail and credit card books, one of the executives cited above said. HDFC Bank and Kotak Mahindra Bank, two of India's top three most valued private sector lenders, are considered front-runners to win the business that generates about $1 billion in revenue. - Economic Times

🍒 PhonePe revenue up 85%, losses down 44% in FY21 : PhonePe, a digital payments platform backed by US-based retailer Walmart Inc and homegrown ecommerce entity Flipkart, has reported revenue from operations of Rs 690 crore in the previous financial year, a jump of 85%, according to its latest regulatory documents sourced by ET. PhonePe, which competes with Paytm, Google Pay and Amazon Pay, has reported marginally lower net loss of Rs 1,727 crore for the period. Excluding a one-time allocation for employee stock options, the loss is around Rs 884 crore, down around 44%. The narrowed losses is an outcome of PhonePe cutting operational costs. It has significantly reduced its marketing and promotional spends, by around 47%, to about Rs 535 crore from Rs 1,016 crore in FY20. - Economic Times

🍒 Capital account convertibility: India on the cusp of fundamental shifts, says RBI Dy Guv : India is on the cusp of fundamental shifts in the capital account convertibility space, with increased market integration in the offing and freer non-resident access to debt on the table, according to T Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI). In this regard, Sankar observed that there is an effort to liberalise foreign portfolio investment (FPI) debt flows further, with the introduction of the Fully Accessible Route (FAR), which places no limit on non-resident investment in specified benchmark securities. - Business Line

🍒 Securitisation volume more than doubled to Rs 50,000 cr in H1 FY22: Report ; Securitisation volume more than doubled to Rs 50,000 crore in the first half of the current fiscal year, Crisil Ratings said in a report. The volume zoomed to Rs 20,000 crore in September 2021, growing around 85 per cent year-on-year, marking a clear recovery from the subdued activity seen in the beginning of this fiscal due to the pandemic's second wave, the agency said in a report. It said the investors are getting reassured by the return to near normalcy across businesses and improvement in collection ratios in securitised pools and portfolios of originators. Crisil's senior director and deputy chief ratings officer Krishnan Sitaraman said market activity typically suffers in times of uncertainty like in the pandemic's wake. - Business Standard

🍒 Rupee gains 12 paise to 75.25 against US dollar in early trade : The Indian rupee appreciated 12 paise to 75.25 against the US dollar in opening trade on Thursday, buoyed by heavy buying in domestic equities and fresh foreign fund inflows. Weakness of the American currency in the overseas market also helped the domestic unit, forex dealers said. However, higher crude prices restrained the rupee to gain momentum, they added. At the interbank foreign exchange, the domestic unit opened strong at 75.27 against the US dollar, then gained further ground to 75.25, registering a rise of 12 paise against the previous close. - Business Line

🍒 Still strong bias for cash payment; need to reassess PSS Act: Report : The pandemic forced an inevitable shift to digital payments but Indians continue to have a strong bias for cash payments, a report said. Due to the emergence of disruptive technologies leading to technology led payment solutions, there is a need to reassess the Payment and Settlement Systems Act, 2007 (PSS), a key enabler for promoting digital transactions, the report by Vidhi Centre for Legal Policy said. The Act was enacted more than a decade back when the digital payments market in India was at its nascent stage and the law was primarily enacted to regulate payment systems from a systemic perspective and to confer the RBI with necessary powers to regulate these systems, it said. - Financial Express

🍒 PNB Housing terminates deal with Carlyle-led investor group ; The board of PNB Housing Finance Ltd has terminated a Rs 4,000-crore fund raising deal with a Carlyle-led group of investors citing pending legal issues which may delay regulatory approvals. Subsequently, Pluto Investments, a Carlyle entity will be initiating the process to withdraw an open offer made by them, the finance company said in a notice to stock exchanges. The Securities and Exchange Board of India had asked PNB Housing to halt a preferential allotment of shares and warrants to entities including Pluto investments, an affiliate of the Carlyle Group, General Atlantic, Salisbury Investments Private Ltd. and Alpha Investments to raise Rs 4,000 crore - Financial Express

🍒 Gold prices rise above Rs 48,000 per 10 gm ahead of Dussehra; silver soars Rs 1,154 a kg : Gold prices continued uptrend for the eighth consecutive day on October 14, up by Rs 638 to touch Rs 48,125 per 10 gram in the Mumbai bullion market a day before Dussehra, tracking sharp gains in the international market and weak dollar. The precious metal edged closer to $1,800/oz on rising inflation- boosted safe-haven appeal. The bullion soared Rs 1,145 or 2.44 percent in this holiday-shortened week in the domestic market. The price of 10 gram, 22-carat gold in Mumbai was Rs 44,083 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,125 plus GST. The 18-carat gold is quoted at Rs 36,094 plus GST in the retail market. Silver prices climbed by Rs 1,154 to Rs 63,290 per kg against its closing price on October 13.

🍒 RBI imposes monetary penalty on The Kurla Nagarik Sahakari Bank : The Reserve Bank of India (RBI) on October 14 imposed a monetary penalty of Rs one lakh on The Kurla Nagarik Sahakari Bank for violation of certain rules. "The penalty is for contravention of Section 26-A read with section 56 of the Banking Regulation Act, 1949 (the Act), the Depositor Education and Awareness Fund Scheme, 2014 (the Scheme) framed under section 26 A of the Act," the RBI said. - Moneycontrol

🍒 Sensex tops 61,000, Nifty moves past 18,300 as bulls take charge : The BSE Sensex, which recorded a fresh all-time high of 61,353.25 during the day, closed at a record high of 61,305.95, up 568.90 points or 0.94 per cent. It hit an intraday low of 60,978.04.  The Nifty 50 closed at 18,338.55, up 176.80 points or 0.97 per cent, after recording a fresh all-time high of 18,350.75. It recorded an intraday low of 18,248.70. Adani Ports, Wipro, Grasim, HDFC Bank and ITC were the top gainers on the Nifty 50, while Coal India, Tata Motors, Eicher Motor, HCL Tech and HDFC Life were the top losers.