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☕ 10.05.2020: Today's Banking / Financial News at a Glance
🍒 SBI complains to CBI after Rs 411 crore loan defaulters flee country : Three promoters of Ram Dev International, recently booked by the CBI for allegedly cheating a consortium of six banks to the tune of Rs 411 crore, have already fled the country before the State Bank of India reached the agency with the complaint, officials said on Saturday. The CBI had recently booked the company engaged in export of Basmati rice to the West Asian and European countries and its directors Naresh Kumar, Suresh Kumar and Sangita on the basis of complaint from the State Bank of India ( SBI), which suffered the loss of more than Rs 173 crore, they said. The company had three rice milling plants, besides eight sorting and grading units in Karnal district with offices in Saudi Arabia and Dubai for trading purposes, the SBI complaint said. Besides SBI, other members of consortium are Canara Bank, Union Bank of India, IDBI, Central Bank of India and Corporation Bank, they said. The Central Bureau of Investigation (CBI) did not carry out any searches in the matter because of the coronavirus-induced lockdown, the officials said. The agency will start the process of summoning the accused, incase they do not join the investigation, appropriate legal action will be initiated, they said. According to the complaint filed by SBI, the account had become non-performing asset (NPA) on January 27, 2016. The banks conducted a joint inspection of properties in August and October, nearly 7-9 months later only to find Haryana Police security guards deployed there, they said. "On inquiry, it has come to notice that borrowers are absconding and have left the country," according to the complaint filed on February 25, 2020, over four years after the account had become NPA. The complaint alleged that borrowers had removed entire machinery from old plant and fudged the balance sheets in order to unlawfully gain at the cost of banks' funds, it said. - Economic Times
🍒 FM to review credit flow by PSBs on May 11 : On Monday(May 11), Finance Minister Nirmala Sitharaman will hold a meeting with chief executives of Public Sector banks ( PSBs) and Chairman of State Bank of India to review the flow of credit into the economy from these banks. This meeting, which comes amidst a nationwide lockdown due to Covid-19, will review the credit sanction and disbursements since March 1 this year. It will also look at Covid-19 related sanctioned/pre-approved emergency credit and reassessment based additional working capital, it is learnt. Also on the agenda is review of the support given to NBFCs ( credit as well as TLTRO) along with details of the number of NBFCs supported and assistance to micro finance institutions. The crucial issues of credit support to MSMEs, interest rate transmission to borrowers and progress under TLTRO ( availment as well as deployment) and state of moratorium will be discussed at the meeting. - Business Line
🍒 Working capital loan sanctions doubled in 2 days: Nirmala Sitharaman : A day after suggesting that Indian economy is "poised to recover" as indicated by high levels of loan sanctions by banks over last two months, Finance Minister Nirmala Sitharaman on Saturday pointed out that banks are leaving no stone unturned to ensure that the current coronavirus situation does not result in liquidity crisis for businesses. In a tweet by Nirmala Sitharaman's office, it said that almost all eligible borrowers for emergency credit lines and working capital have been contacted by banks and sanctions have picked up pace in last couple of days. "PSBs contacted more than 95% of borrowers eligible for emergency credit lines & working capital enhancements between March 20 - May 6. The amount sanctioned jumped to Rs 54,544 crore, more than double the amount 2 days ago. Number of cases covered more than tripled," Sitharaman's office tweeted. - economic times
🍒 Q4 results: ICICI Bank net profit up 26% to ₹1,221.36 crore : Private sector lender ICICI Bank registered a 26 per cent jump in its net profit in the fourth quarter of the fiscal 2019-20 to ₹1,221.36 crore as against ₹969.06 crore a year ago. The bank’s total income grew by 12.1 per cent to ₹23,443.66 crore in the quarter ended March 30, 2020 from ₹20,913.82 crore a year ago. The net interest income grew by 17 per cent to ₹8,927 crore in the fourth quarter, from ₹7,620 crore a year ago. “Excluding the interest on income tax refund, NII grew by 24 per cent year on year in the fourth quarter of 2019-20,” ICICI Bank said in a statement on Saturday. - Business Line
🍒 ICICI Bank’s mobile ATM services at doorstep of Coimbatore residents : ICICI Bank’s mobile ATM has been stationed at Perianaickenpalayam and Vadavalli areas in the city. The vans have been deployed to take key banking services to the doorstep of the residents, as people have been advised to stay at home in the wake of Coronavirus outbreak. According to a release, the mobile ATM would be stationed for 10 days in the city. It would move to other areas such as Thudiyalur, Saravanampatti, Vellakinar among others in consultation with the authorities. Apart from cash withdrawals, key services which can be availed by the residents include fund transfer to registered payee, change of PIN, recharge pre-paid mobile and acceptance of fixed deposits. Customers would be able to do cardless cash withdrawal from this mobile ATM. - Business Line
🍒 ICICI Bank tags $100 mn Singapore Hin Leong exposure as NPA, makes provisions : ICICI Bank has classified its exposure to Singapore-based fraud-hit oil trader Hin Leong Trading Pte as NPAs (non-performing asset) and has made provisions to cover the likely losses against this exposure, said the bank’s management in a conference call on Saturday. The bank has also tagged exposure to one healthcare firm in West Asia as NPA. This exposure too has been provided for. “Our exposure to both these accounts have been classified as NPA and substantially provided for in this quarter. Going forward, we do not expect any impact on the P&L from these accounts,” said Sandeep Batra, President, ICICI Bank. The bank reported a 26 percent year-on-year growth in standalone profit at Rs 1,221.36 crore in quarter ended March 2020, missing analysts estimates due to higher COVID-19 related provisions. Asset quality improved with gross non-performing assets as a percentage of gross advances falling 42 basis points sequentially to 5.53 percent and net NPAs dropped 8 basis points to 1.41 percent in quarter ended March 2020. - moneycontrol.com
🍒 Reliance Capital posts ₹2,179-cr net loss in Q4 : Reliance Capital reported a consolidated net loss of ₹2,179 crore for the fourth quarter of fiscal FY20 against a net loss of ₹2,304 crore a year ago. Its total income fell 31.4 per cent to ₹356 crore in the quarter ended March 31, 2020, from ₹519 crore a year ago. Reliance Capital said it is hopeful of implementation of the resolution plans for Reliance Commercial Finance and Reliance Home Finance. “The company has exposure by way of loans, investments (including interest accrued thereon) and guarantees in Reliance Commercial Finance Limited (RCF) and Reliance Home Finance Limited (RHF) aggregating ₹4,935 crore outstanding as on March 31, 2020,” said Reliance Capital as part of its quarterly results, adding that the lenders have entered into Inter-Creditor Agreement (ICA) for the resolution of their exposure. “Both the entities are progressing on implementing their Resolution Plans under ICA, which is valid till June 30, 2020,” it said, adding that on a conservative basis, it has made an adequate impairment provision of ₹742 crore against the exposure. - Business Line
🍒 Tax relief to stranded NRIs, prolonged stay in India due to lockdown to be discounted : The Finance Ministry on Friday allowed discounting of prolonged stay period in India for the purpose of determining residency status from the taxation point of view. This will help an individual to maintain Non-Resident Indian (NRI)Status. The law said that any individual staying in India for 182 days or more in a financial year or 60 days or more and at least 365 days during the past full financial year will be called tax resident of India. Accordingly, his income earned globally will be taxed here. Now, problem is many of such individual have to spend longer period because of lockdown and suspension of international flights. New Finance Ministry circular aims to help these people. According to the Ministry, as the lockdown continues during the financial year 2020-21 and it is not yet clear as to when international flight operations would resume, a circular excluding the period of stay of these individuals up to the date of normalisation of international flight operations, for determination of the residential status for the financial year 2020-21 shall be issued after flights resume.- Business Line
🍒 Centre to borrow ₹4.20-lakh crore more; fiscal deficit may widen to 5.4% : The government on Friday announced raising its borrowing by over 50 per cent of Budget Estimate during the current fiscal. Additional borrowing means fiscal deficit during the current fiscal could go up by 200 basis points (100 basis points is equal to 1 percentage point). “The estimated gross market borrowing in 2020-21 will be ₹12 lakh crore in place of ₹7.80 lakh crore as per BE 2020-21,” the Economic Affairs Department, under the Finance Ministry, said. It said the above revision in borrowings has been necessitated on account of the Covid-19 pandemic. The borrowing is used to bridge the deficit between income and expenditure of the government. The government has also revised the borrowing calendar for the first half period (April-September) and raised it to ₹6 lakh crore, from ₹4.88 lakh crore. - Business Line
🍒 RBI moratorium: SC agrees to hear plea seeking interest waiver on loans during lockdown : The Supreme Court on Friday agreed to hear a plea seeking interest waiver on outstanding loan payments for the period of the nationwide lockdown and to widen the Reserve Bank of India's (RBI) March 27 circular. Consequently, the apex court has issued a notice to the central government and to RBI seeking a reply within two weeks. According to the circular, RBI is allowing financial institutions to allow customers a moratorium on loan installments that fall between March 1 and May 31. However, under the RBI circular, the interest chargeable during the moratorium period of three months, would be added to the loan installments that fall after the prescribed period. It is this interest burden that is being contest in the plea. The plea argued that the aim of the moratorium circular was to provide relief on account of a loss of livelihood and income during the nationwide lockdown. The petition said if those suffering from loss of income are unable to pay the monthly equated monthly installments (EMIs), they surely can’t be expected to be able to pay the interest dues.- cnbctv18
🍒 Yes Bank Moratorium: Credit firms can keep Ratings pat for borrowers : The Reserve Bank of India has allowed credit ratings firms and credit bureaus to retain the ratings for borrowers whose payments were delayed due to a two-week moratorium it had imposed on Yes Bank in March. The non-state lender on its part is not reporting such customers to these institutions. The relaxation given by the central bank covers corporate, MSME and retail clients.“Anyone who has not been able to pay because of the moratorium, we have taken care to not report them to rating agencies,” Yes Bank managing director Prashant Kumar said. “Customers cannot be penalised for that.”Credit ratings firms and credit bureaus have also received an intimation from Yes Bank.“We will not be downgrading those borrowers who missed payments due to the moratorium imposed on Yes Bank by the RBI. We have received intimation about this from the banks and have already factored those in our future ratings actions,” a senior official at a ratings company said. The RBI had imposed the moratorium on March 5, restricting withdrawals to Rs 50,000 per depositor, after a surge in withdrawals and bad loans wiped out a chunk of the lender’s capital. The curbs were withdrawn on March 18. - economic times
🍒 China regulator issues rules on online bank lending to curb risks : China's banking and insurance regulator on Saturday issued draft rules on commercial banks' online lending business, banning the use of such loans for riskier investments and capping banks' online consumer credit, in a move to rein in financial risks. The regulations are the first that specifically target banks' online lending business, which has been expanded aggressively under the development of financial technology, that has led to the misuse of banks' consumer credit and higher household leverage. Bank loans issued online cannot be used to purchase property, stocks, bonds, futures, financial derivatives and asset management products and make other riskier investments, the China Banking and Insurance Regulatory Commission said in a statement. - Moneycontrol.com..
… Have a Good day..
☕ 10.05.2020: Today's Banking / Financial News at a Glance
🍒 SBI complains to CBI after Rs 411 crore loan defaulters flee country : Three promoters of Ram Dev International, recently booked by the CBI for allegedly cheating a consortium of six banks to the tune of Rs 411 crore, have already fled the country before the State Bank of India reached the agency with the complaint, officials said on Saturday. The CBI had recently booked the company engaged in export of Basmati rice to the West Asian and European countries and its directors Naresh Kumar, Suresh Kumar and Sangita on the basis of complaint from the State Bank of India ( SBI), which suffered the loss of more than Rs 173 crore, they said. The company had three rice milling plants, besides eight sorting and grading units in Karnal district with offices in Saudi Arabia and Dubai for trading purposes, the SBI complaint said. Besides SBI, other members of consortium are Canara Bank, Union Bank of India, IDBI, Central Bank of India and Corporation Bank, they said. The Central Bureau of Investigation (CBI) did not carry out any searches in the matter because of the coronavirus-induced lockdown, the officials said. The agency will start the process of summoning the accused, incase they do not join the investigation, appropriate legal action will be initiated, they said. According to the complaint filed by SBI, the account had become non-performing asset (NPA) on January 27, 2016. The banks conducted a joint inspection of properties in August and October, nearly 7-9 months later only to find Haryana Police security guards deployed there, they said. "On inquiry, it has come to notice that borrowers are absconding and have left the country," according to the complaint filed on February 25, 2020, over four years after the account had become NPA. The complaint alleged that borrowers had removed entire machinery from old plant and fudged the balance sheets in order to unlawfully gain at the cost of banks' funds, it said. - Economic Times
🍒 FM to review credit flow by PSBs on May 11 : On Monday(May 11), Finance Minister Nirmala Sitharaman will hold a meeting with chief executives of Public Sector banks ( PSBs) and Chairman of State Bank of India to review the flow of credit into the economy from these banks. This meeting, which comes amidst a nationwide lockdown due to Covid-19, will review the credit sanction and disbursements since March 1 this year. It will also look at Covid-19 related sanctioned/pre-approved emergency credit and reassessment based additional working capital, it is learnt. Also on the agenda is review of the support given to NBFCs ( credit as well as TLTRO) along with details of the number of NBFCs supported and assistance to micro finance institutions. The crucial issues of credit support to MSMEs, interest rate transmission to borrowers and progress under TLTRO ( availment as well as deployment) and state of moratorium will be discussed at the meeting. - Business Line
🍒 Working capital loan sanctions doubled in 2 days: Nirmala Sitharaman : A day after suggesting that Indian economy is "poised to recover" as indicated by high levels of loan sanctions by banks over last two months, Finance Minister Nirmala Sitharaman on Saturday pointed out that banks are leaving no stone unturned to ensure that the current coronavirus situation does not result in liquidity crisis for businesses. In a tweet by Nirmala Sitharaman's office, it said that almost all eligible borrowers for emergency credit lines and working capital have been contacted by banks and sanctions have picked up pace in last couple of days. "PSBs contacted more than 95% of borrowers eligible for emergency credit lines & working capital enhancements between March 20 - May 6. The amount sanctioned jumped to Rs 54,544 crore, more than double the amount 2 days ago. Number of cases covered more than tripled," Sitharaman's office tweeted. - economic times
🍒 Q4 results: ICICI Bank net profit up 26% to ₹1,221.36 crore : Private sector lender ICICI Bank registered a 26 per cent jump in its net profit in the fourth quarter of the fiscal 2019-20 to ₹1,221.36 crore as against ₹969.06 crore a year ago. The bank’s total income grew by 12.1 per cent to ₹23,443.66 crore in the quarter ended March 30, 2020 from ₹20,913.82 crore a year ago. The net interest income grew by 17 per cent to ₹8,927 crore in the fourth quarter, from ₹7,620 crore a year ago. “Excluding the interest on income tax refund, NII grew by 24 per cent year on year in the fourth quarter of 2019-20,” ICICI Bank said in a statement on Saturday. - Business Line
🍒 ICICI Bank’s mobile ATM services at doorstep of Coimbatore residents : ICICI Bank’s mobile ATM has been stationed at Perianaickenpalayam and Vadavalli areas in the city. The vans have been deployed to take key banking services to the doorstep of the residents, as people have been advised to stay at home in the wake of Coronavirus outbreak. According to a release, the mobile ATM would be stationed for 10 days in the city. It would move to other areas such as Thudiyalur, Saravanampatti, Vellakinar among others in consultation with the authorities. Apart from cash withdrawals, key services which can be availed by the residents include fund transfer to registered payee, change of PIN, recharge pre-paid mobile and acceptance of fixed deposits. Customers would be able to do cardless cash withdrawal from this mobile ATM. - Business Line
🍒 ICICI Bank tags $100 mn Singapore Hin Leong exposure as NPA, makes provisions : ICICI Bank has classified its exposure to Singapore-based fraud-hit oil trader Hin Leong Trading Pte as NPAs (non-performing asset) and has made provisions to cover the likely losses against this exposure, said the bank’s management in a conference call on Saturday. The bank has also tagged exposure to one healthcare firm in West Asia as NPA. This exposure too has been provided for. “Our exposure to both these accounts have been classified as NPA and substantially provided for in this quarter. Going forward, we do not expect any impact on the P&L from these accounts,” said Sandeep Batra, President, ICICI Bank. The bank reported a 26 percent year-on-year growth in standalone profit at Rs 1,221.36 crore in quarter ended March 2020, missing analysts estimates due to higher COVID-19 related provisions. Asset quality improved with gross non-performing assets as a percentage of gross advances falling 42 basis points sequentially to 5.53 percent and net NPAs dropped 8 basis points to 1.41 percent in quarter ended March 2020. - moneycontrol.com
🍒 Reliance Capital posts ₹2,179-cr net loss in Q4 : Reliance Capital reported a consolidated net loss of ₹2,179 crore for the fourth quarter of fiscal FY20 against a net loss of ₹2,304 crore a year ago. Its total income fell 31.4 per cent to ₹356 crore in the quarter ended March 31, 2020, from ₹519 crore a year ago. Reliance Capital said it is hopeful of implementation of the resolution plans for Reliance Commercial Finance and Reliance Home Finance. “The company has exposure by way of loans, investments (including interest accrued thereon) and guarantees in Reliance Commercial Finance Limited (RCF) and Reliance Home Finance Limited (RHF) aggregating ₹4,935 crore outstanding as on March 31, 2020,” said Reliance Capital as part of its quarterly results, adding that the lenders have entered into Inter-Creditor Agreement (ICA) for the resolution of their exposure. “Both the entities are progressing on implementing their Resolution Plans under ICA, which is valid till June 30, 2020,” it said, adding that on a conservative basis, it has made an adequate impairment provision of ₹742 crore against the exposure. - Business Line
🍒 Tax relief to stranded NRIs, prolonged stay in India due to lockdown to be discounted : The Finance Ministry on Friday allowed discounting of prolonged stay period in India for the purpose of determining residency status from the taxation point of view. This will help an individual to maintain Non-Resident Indian (NRI)Status. The law said that any individual staying in India for 182 days or more in a financial year or 60 days or more and at least 365 days during the past full financial year will be called tax resident of India. Accordingly, his income earned globally will be taxed here. Now, problem is many of such individual have to spend longer period because of lockdown and suspension of international flights. New Finance Ministry circular aims to help these people. According to the Ministry, as the lockdown continues during the financial year 2020-21 and it is not yet clear as to when international flight operations would resume, a circular excluding the period of stay of these individuals up to the date of normalisation of international flight operations, for determination of the residential status for the financial year 2020-21 shall be issued after flights resume.- Business Line
🍒 Centre to borrow ₹4.20-lakh crore more; fiscal deficit may widen to 5.4% : The government on Friday announced raising its borrowing by over 50 per cent of Budget Estimate during the current fiscal. Additional borrowing means fiscal deficit during the current fiscal could go up by 200 basis points (100 basis points is equal to 1 percentage point). “The estimated gross market borrowing in 2020-21 will be ₹12 lakh crore in place of ₹7.80 lakh crore as per BE 2020-21,” the Economic Affairs Department, under the Finance Ministry, said. It said the above revision in borrowings has been necessitated on account of the Covid-19 pandemic. The borrowing is used to bridge the deficit between income and expenditure of the government. The government has also revised the borrowing calendar for the first half period (April-September) and raised it to ₹6 lakh crore, from ₹4.88 lakh crore. - Business Line
🍒 RBI moratorium: SC agrees to hear plea seeking interest waiver on loans during lockdown : The Supreme Court on Friday agreed to hear a plea seeking interest waiver on outstanding loan payments for the period of the nationwide lockdown and to widen the Reserve Bank of India's (RBI) March 27 circular. Consequently, the apex court has issued a notice to the central government and to RBI seeking a reply within two weeks. According to the circular, RBI is allowing financial institutions to allow customers a moratorium on loan installments that fall between March 1 and May 31. However, under the RBI circular, the interest chargeable during the moratorium period of three months, would be added to the loan installments that fall after the prescribed period. It is this interest burden that is being contest in the plea. The plea argued that the aim of the moratorium circular was to provide relief on account of a loss of livelihood and income during the nationwide lockdown. The petition said if those suffering from loss of income are unable to pay the monthly equated monthly installments (EMIs), they surely can’t be expected to be able to pay the interest dues.- cnbctv18
🍒 Yes Bank Moratorium: Credit firms can keep Ratings pat for borrowers : The Reserve Bank of India has allowed credit ratings firms and credit bureaus to retain the ratings for borrowers whose payments were delayed due to a two-week moratorium it had imposed on Yes Bank in March. The non-state lender on its part is not reporting such customers to these institutions. The relaxation given by the central bank covers corporate, MSME and retail clients.“Anyone who has not been able to pay because of the moratorium, we have taken care to not report them to rating agencies,” Yes Bank managing director Prashant Kumar said. “Customers cannot be penalised for that.”Credit ratings firms and credit bureaus have also received an intimation from Yes Bank.“We will not be downgrading those borrowers who missed payments due to the moratorium imposed on Yes Bank by the RBI. We have received intimation about this from the banks and have already factored those in our future ratings actions,” a senior official at a ratings company said. The RBI had imposed the moratorium on March 5, restricting withdrawals to Rs 50,000 per depositor, after a surge in withdrawals and bad loans wiped out a chunk of the lender’s capital. The curbs were withdrawn on March 18. - economic times
🍒 China regulator issues rules on online bank lending to curb risks : China's banking and insurance regulator on Saturday issued draft rules on commercial banks' online lending business, banning the use of such loans for riskier investments and capping banks' online consumer credit, in a move to rein in financial risks. The regulations are the first that specifically target banks' online lending business, which has been expanded aggressively under the development of financial technology, that has led to the misuse of banks' consumer credit and higher household leverage. Bank loans issued online cannot be used to purchase property, stocks, bonds, futures, financial derivatives and asset management products and make other riskier investments, the China Banking and Insurance Regulatory Commission said in a statement. - Moneycontrol.com..
… Have a Good day..
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