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 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 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

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.

Abbreviation Updates Dated 18th December 2014

1. MOM - Mass Orbiter Mission
2. KVIC - Khadi & Village Industries Corporation
3. SAARC - The South Asian Association for Regional Cooperation
4. CBS - Core Banking Solution
5. ADB - Asian Development Bank
6. AGM - Annual General Meeting
7. CP - Commercial Paper
8. CRAR - Capital to Risk Weighted Asset Ratio
9. CRR - Cash Reserve Ratio
10. CAD - Capital Account Defecit
11. DD - Demand Draft
13. EXIM - Bank Export Import Bank of India
14. FCA - Foreign Currency Assets
16. FCCB Foreign Currency Convertible Bond
17. FCNR - Foreign Currency Non-resident
18. FDI - Foreign Direct Investment
19. FII - Foreign Institutional Investor
20. SEZ - Special Economic Zone

Special General Awareness Package for RBI Assistant Exam 2014 ( 9/10 )

1. Commonwealth games held in GLASGOW
2. DIRHAM is the currency of UAE
3. Recently Navratna Status has been given to public sector companies - EIL, CONCOR & NBCC
4. Full form of NDC - NATIONAL DEVELOPMENT COUNCIL
5. Currency of MYANMAR - KYAT
6. BANK RATE is rate at which RBI discounts bill of exchange
7. ASIA LARGEST SOLAR POWER PLANT has been recently set up in NEEMUCH in MP of 130 MW
8. Currency of Bahrain - DINAR
9. EXAMPLE OF CASH CROP Tobbacco, Cotton, Coffee and Tea
10. SBI INTOUCH is the new generation and digital branch of SBI
11. Amnesty International HQ in LONDON
12. ASEAN HQ in JAKARTA
13. Total number of members in EU IS 28
14. IPL champion KKR
15. INDIA becomes 3rd largest crude oil Importer

Abbreviations I Date 7 September 2014

1. SAARC : South Asian association for Regional Co operation
2. ASEAN : Association of Southeast Asian Nations
3. NPCI : National Payment Corporation of India
4. CASA : Current and Savings Account
5. ASBA : Application supported by blocked amount
6. BBPS : Bharat Bill Payment Services
7. FII : Foreign Institutional Investors
8. FDI : Foreign Direct Investment
9. FCCB : Foreign Currency Convertible Bonds
10. GDR : Global Depository Receipt
11. IDR : Indian Depository receipt