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.

Banking and Financial News for October 14, 2021

14.10.2021 : Today's Banking / Financial News at a Glance

🍒 PNB reduces gold loan interest rates: : Punjab National Bank (PNB) has announced that it has reduced interest rates on loans against gold jewellery and Sovereign Gold Bond (SGB) by 145 basis points (bps); this is part of its festive season offerings. According to a press release issued by PNB, the bank is now offering loans against Sovereign Gold Bond (SGB) at 7.20% and loans against gold jewellery at 7.30%. "Additionally, PNB has slashed the home loan rate which now starts from 6.60%, while customers can avail car loans starting from 7.15% and personal loans from 8.95%," stated the release. - Economic Times

🍒 Dish TV board cites rules, rejects YES Bank's demands to hold EGM : The board of Dish TV Ltd (DTL) rejected on Wednesday, YES Bank's demand to hold an extraordinary general meeting (EGM) to consider resolutions, citing regulatory limitations and absence of prior approvals from the government and lenders. Private lender YES Bank, which holds 25.93 per cent stake stake in DTL, had sought the removal of DTL directors Jawahar Lal Goel and others, and appointment of the bank's own nominees. - Business Standard.

🍒 Shivalik Small Finance Bank partners with Go Digit Insurance : Shivalik Small Finance Bank on Tuesday announced a strategic partnership with Bengaluru-based insurtech company, Go Digit General Insurance, to provide an array of instant, easy-to-understand insurance products through the bank’s network of branches across India. This will include health insurance plans, motor insurance, and home and shop insurance. This partnership will enable over 4.5 lakh customers of Shivalik Small Finance Bank to instantly access and purchase from Digit’s list of offerings, through paperless processes, in real time. - Business Line

🍒 Government announces conversion of two G-Secs into six FRBs : The government on Wednesday announced the conversion or switch of two Government Securities (G-Secs), both maturing in 2022 and aggregating ₹36,000 crore (face value) into six floating rate bonds (FRBs) maturing between 2028 and 2034. Thus, the government does not have to redeem the aforementioned G-Secs on their maturity dates — April 13, 2022 (for the security carrying 5.09 per cent coupon rate) and August 02, 2022 (for the security carrying 8.08 per cent coupon rate). Redemption pressure on the government is alleviated to the extent of the face value of the securities being converted or switched. - Business Line

🍒 Mobikwik sees ‘BNPL’ as its fastest growing business segment : IPO-bound One Mobikwik Systems (Mobikwik) sees it’s ‘Buy Now Pay Later’ product — which enjoys higher margins — as a major growth driver and it’s fastest growing business segment in the days to come, said Co-founder Upasana Taku. This digital financial services firm is also aiming to launch its ₹1,900 crore initial public offering (IPO) by this month end, Taku told BusinessLine in an interview. - Business LIne

🍒 PhonePe and NBBL partner to launch ClickPay : Digital payment platform PhonePe has, in association with NPCI Bharat BillPay Ltd (NBBL), launched ClickPay for its customers. ClickPay is a unique payment link that enables customers to make recurring online bill payments (electricity, water, gas, loan, etc) and removes the need to remember tedious account details associated with each biller or service. This link sent by the biller will lead the customer directly to the payment page, fetching the bill amount instantly. - Business Line

🍒 Shriram Housing gets ₹300-cr equity capital from parent firm : Shriram Housing Finance Ltd (SHFL) on Wednesday said it has received the second round of equity capital infusion of ₹300 crore from parent company, Shriram City Union Finance (Shriram City). With this round, the total equity infusion in FY22 stands at ₹500 crore, SHFL said in a statement. The current infusion will increase Shriram City’s holding in SHFL from 81 per cent to 85.02 per cent. SHFL is an affordable housing finance company with Assets Under Management (AUM) of about ₹4,000 crore as of June 2021. - Business Line

🍒 U GRO Capital and Kinara Capital enter into strategic co-origination partnership : U GRO Capital and Kinara Capital have entered into a strategic co-origination partnership to offer collateral-free business loans to small business entrepreneurs in India. Together, both companies plan to disburse ₹100 crores by the end of FY22 to MSMEs in manufacturing, trading and services sectors, per a joint statement. “Available financing for MSMEs will range from ₹1 lakh to ₹30 lakh with tenure ranging from 12–60 months. “Financing can be availed for working capital and asset purchase directly from Kinara Capital, and women-led businesses receive an automatic, upfront discount with the HerVikas program,” according to the statement. - Business Line

🍒 RBI imposes monetary penalty on The Sahyadri Sahakari Bank : The Reserve Bank of India (RBI) on October 13 imposed a monetary penalty of Rs 3 lakh on Mumbai-based The Sahyadri Sahakari Bank Limited over non-compliance with RBI directions on Frauds - Classification and Reporting, the central bank said in a release. The inspection report of the bank with the bank's position as of March 31, 2019, revealed the bank had not transferred unclaimed amounts in accounts for more than ten years to Depositor Education and Awareness Fund (DEA Fund). Further, the bank had reported frauds to RBI with an inordinate delay. - Moneycontrol.

🍒 Banks' loan growth picks up pace at 3-5%, asset quality stress to remain elevated in Q2 : As the economy revives post deadly second wave of COVID-19, backed by festive demand and season, banks have started seeing growth in their loan disbursals.  In the second quarter of FY22, data released by lenders reveal the loan growth has been around 3-5 percent on a sequential basis. India’s largest private sector bank, HDFC Bank, saw a 4.4 percent sequential growth in its loans and advances. Its outstanding advances were at Rs 11,98,500 crore in the September quarter as compared to Rs 11,47,700 crore in the June quarter of FY22. - Moneycontrol.

🍒 Rupee recovers 15 paise to close at 75.37 against US dollar : The rupee on Wednesday rebounded by 15 paise to close at 75.37 (provisional) against the US dollar following a rally in domestic equities and weak American currency in the overseas markets. In addition, lower crude prices also supported the rupee sentiment, forex deals said. At the interbank forex market, the rupee opened strong at 75.29 against the greenback. During the session, the domestic unit swung between 75.19 and 75.51. On Tuesday, the rupee had closed at 75.52 against the dollar

🍒 M-cap of BSE-listed companies at fresh record high of over Rs 270.73 lakh crore ; Helped by the ongoing rally in equities, the market capitalisation of BSE-listed companies has reached a fresh record high of Rs 2,70,73,296.03 crore on Wednesday. Rallying for the fifth straight session on Wednesday, the 30-share BSE benchmark jumped 452.74 points or 0.75 per cent to settle at its all-time closing high of 60,737.05. During the day, it rallied 552.32 points to its intra-day all-time high of 60,836.63. In five trading days, the BSE benchmark index has gained 1,547.32 points. - Moneycontrol.

🍒 Sensex, Nifty up nearly 1% after fresh highs, Nifty tops 18,100 : At 1 pm, the BSE Sensex was trading at 60,748.56, up 464.25 points or 0.77 per cent, near its new all-time high of 60,755.70. It recorded an intraday low of 60,452.29. The Nifty 50, after recording a fresh high of 18,162.90, was trading at 18,156.85, up 164.90 points or 0.92 per cent. It recorded an intraday low of 18,050.75. Tata Motors, Mahindra & Mahindra, Titan, Powergrid and Tata Consumer were the top gainers on the Nifty 50 while Maruti, ONGC, Hindustan Unilever, Coal India and Eicher Motor were the top laggards.