Today's Banking / Financial News at a Glance 20.05.2020

☕ 20.05.2020: Today's Banking / Financial News at a Glance

🍒 Rs 6.45 lakh crore worth loans sanctioned by PSBs during March 1-May 15 : State-owned banks have sanctioned about Rs 6.45 lakh crore worth loans to various sectors including MSME, agriculture and retail between March 1 and May 15 when businesses were reeling under the impact of COVID-19 crisis. Loans sanctioned at the end of May 8 stood at Rs 5.95 lakh crore."Loans worth over Rs 6.45 lakh crore were sanctioned by PSBs during March 1 – May 15 for 54.96 lakh accounts from MSME, Retail, Agriculture & Corporate sectors; A notable increase compared to the Rs 5.95 lakh crore sanctioned as of May 8," Finance Minister Nirmala Sitharaman said in a tweet."Public Sector Banks sanctioned over Rs 1.03 lakh crore as emergency credit lines & working capital enhancements in the period March 20 to May 15, which is a substantial increase over the Rs 65,879 crore that had been sanctioned up to May 8," she said. State-owned banks launched an emergency credit line to provide funds to its existing MSME and corporate borrowers in the last week of March, soon after the lockdown was announced. - economic times

🍒 BoB seeks to recover $250 mn loans from NMC founder BR Shetty: Reporter : Bank of Baroda is seeking to recover loans worth more than $250 million from NMC founder BR Shetty and his companies, as a court in Bengaluru barred him and his wife from selling or transferring some properties while it hears the case, a court document showed. The 16 properties in several Indian cities including Bengaluru were among guarantees put up by Shetty and his wife against the Rs 19.13 billion ($253 million) in loans, according to a May 16 court order seen by Reuters. The court in Bengalaru set the next hearing in the case for June 8.NMC, the largest private healthcare provider in the United Arab Emirates, was placed under administration in April after months of turmoil. It disclosed in March it had debts of $6.6 billion, well above earlier estimates of $2.1 billion. Finablr, in which Shetty has a controlling stake, said in April it may have nearly $1 billion more in debt than previously reported. - Business Standard

🍒 Canara Bank launches special gold loan biz vertical : Identifying an emerging financial need in these times of the Covid-19-led pandemic, Bengaluru-based public sector lender Canara Bank, has launched a special gold loan business vertical. The pandemic is seeing the country’s socio-economic order undergo a change; managing day-to-day expenses, business continuity, health and family care are becoming challenges. The bank’s latest business vertical is aimed at helping resolve these issues and support livelihoods in the current challenging times.The business vertical is expected to address these needs and to provide hassle-free credit. The gold loan products are designed keeping in mind the need for a quick, hassle-free experience for customers, and at low interest cost. The loans are expected to help the customers with much-needed liquidity to revive their business activities, and bring normalcy back to their lives. With this objective, Canara Bank has launched this special gold loan campaign till June 30 with interest rate as low as 7.85 per cent per annum. The low turnaround time (TAT) ? time taken from applying for the loan till the loan is disbursed ? and high flexibility of the loan, are the highlights of the product. The loans, which come with flexible repayment options, are payable within one to three years.  - Business Line

🍒 SBI proposes uniform inter-creditor agreement norms for faster loan restructuring: Report : State Bank of India (SBI) has recommended a uniform inter-creditor agreement (ICA) framework among lenders to fast track loan restructuring process. A uniform agreement will essentially specify broad guidelines for restructuring loans to be followed by all banks. This is being considered given many borrowers affected by the coronavirus crisis may ask banks to restructure their loans, and lenders need to arrive at a consensus for at least a year-and-a-half, according to an Economic Times report. - Moneycontrol.com

🍒 Govt to further revise criteria for classifying 'medium' enterprises under MSME definition: Gadkari : Days after changing the definition of MSMEs, the government has decided to further revise the criteria for medium units by enhancing the investment and turnover limits to up to Rs 50 crore and Rs 200 crore respectively, Union Minister Nitin Gadkari said on Tuesday. Unveiling the contours of the Rs 20 lakh crore stimulus package, Finance Minister Nirmala Sitharaman had last last week announced a change in the definition of micro, small and medium enterprises (MSMEs).As per the revised definition, any firm with investment up to Rs 1 crore and turnover under Rs 5 crore will be classified as "micro". A company with investment up to Rs 10 crore and turnover up to Rs 50 crore will be classified as "small" and a firm with investment up to Rs 20 crore and turnover under Rs 100 crore will be classified as "medium".The previous criteria for classifying enterprises in the "medium" category was investment up to Rs 10 crore and turnover of up to Rs 5 crore. "We have taken a decision to raise the up to Rs 20 crore investment (criteria) to up to 50 crore and turnover (limit) to up to Rs 200 crore. So we will issue an order for that," Gadkari said. - economic times

🍒 SBI employees contribute additional ?8 crore to PM CARES : State Bank of India (SBI) on Tuesday said its employees have decided to contribute an additional ?7.95 crore to the Prime Minister's Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund. The total donation made by the bank’s employees by letting go of one day’s salary and a day’s leave encashment now amounts to ?107.95 crore, SBI said in a statement.In March 2020, around 2.56 lakh employees of SBI had donated ?100 crore to PM CARES, which has been created to fight the pandemic.SBI said it has also committed 0.25 per cent of the annual profit for FY20, as a part of its CSR activities, to fight Covid-19. - Business Line

🍒 Bajaj Finance posts 19% drop in Q4 profit : Bajaj Finance posted a 19.38 per cent decline in consolidated net profit at ?948.1 crore in the fourth quarter of FY20 when compared to ?1,176.06 crore a year ago. “Adjusted for contingency provision of ?900 crore for Covid-19, profit for the quarter was up by 38 per cent at ?1,622 crore,” it said in a statement on Tuesday, adding that loan losses and provisions (expected credit loss) for the fourth quarter was ?1,954 crore, against ?409 crore a year ago. Its net interest income grew 38 per cent to ?4,684 in the quarter ended March 31, 2020, crore from ?3,385 crore a year ago. New loans increased by three per cent during the quarter. “Due to the Covid-19 pandemic and consequent lockdown, the company lost 10 productive days in the fourth quarter, resulting in lower acquisition of nearly 10 lakh loan accounts and lower AUM of approximately ?4,500 crore,” it further said. - Business Line

🍒 NBFCs see opportunities opening up, prepare to give fresh loans in June : Top non-banking finance companies are set to resume sanctioning fresh loans in June with sentiment boosted by the government stimulus and easing of the lockdown, even as they tread cautiously, aware that repayment capacities may have weakened with job losses and income declines. The Edelweiss Group, Mahindra Finance, IIFL Finance and Shriram Transport Finance have started disbursing loans with their clients demanding to draw down the limits sanctioned in March. Companies expect double-digit loan growth in the September quarter or early in the December quarter. Microfinance firms have also started disbursing emergency loans to help grassroots borrowers tide over the immediate crisis. “We will resume our new loan sanctions beginning June,” said Umesh Revankar, chief executive officer at Shriram Transport Finance. “We see opportunities opening up in rural and semi-urban areas that are not hard hit by Covid-19. Truck movements are going to rise, aided by the government’s stimulus package and easing of the lockdown.” The economy had come to a standstill following a nationwide lockdown that started on March 25. Shriram funds purchases of second-hand vehicles and expects overall loan expansion at below 5%, although the pace is expected to pick up with double-digit credit growth in the September quarter. Closure of regional transport offices during first two phases of the lockdown brought Shriram’s business activities to a halt. - economic times

🍒 Banks bat for bad loan breather : The Indian Banks’ Association has asked the Reserve Bank of India to ease bad loan recognition norms to 180 days from the current 90 days, three people familiar with the matter said. Bankers led by the IBA have also asked the regulator to extend a moratorium on loans and the standstill on stressed accounts by at least one more quarter, one of the people said.Banks have sought that loans extended to overdue accounts be considered under the standard category, or classified as standard restructured asset, which would lead to lower provisioning.They have also sought a one-time restructuring of all loans and a specific term loan package for sectors that are under stress due to the Covid-19 pandemic.“A lot of these issues were discussed with the RBI governor in a meeting he held with banks. Talks are on at individual banks and IBA level. We are all working together to see the best way out of this crisis,” said a banker involved in the discussions. “The services sector has been the worst hit. We are discussing a corporate term-loan package for industries which are worst affected due to Covid-19. A one-time restructuring request has also been made,” the banker added. - Economic Times

🍒 Lenders see a payment recover as economy restarts :  Lenders are seeing a slow but sure recovery in loan repayments as customers are increasingly choosing not to exercise the Reserve Bank of India provided option of moratorium on payments to avoid paying higher compounded interest. Small entrepenuers who had earlier opted for a moratorium on repayments are now paying a portion of their dues as the cash flow begins to improve for them with businesses opening up slowly, said bankers. Even salaried credit card borrowers are opting to pay installements as they seek to use their cards more often which is not possible if they opt for a moratorium. "Our repayments have improved to 40% so far in May from 20% in April. Small entrepenuers with loans upto Rs 25 lakhs which make more than 80% of our loan book are increasingly looking to repay as economic activity is picking up. At this rate we could be surprised to see the repayments by the end of May," said Sanjay Agarwal, CEO AU Small Finance Bank. - Economic Times

🍒 Nine NBFCs surrender certificate of registration :  Nine NBFCs, including Reliance Net and Nischaya Finvest Private Limited, have surrendered their certificate of registration, the Reserve Bank of India said on Tuesday. Penrose Mercantiles Ltd, Manohar Finance India Ltd, Chandelier Tracon Pvt Ltd, and Sanghi Hire Purchase Ltd are among the NBFCs which have surrendered their certificates. The certificate of registration is granted by the RBI. With surrendering the certificates, the companies cannot transact the business of a non-banking financial institution. In another statement, the central bank said it has cancelled the certificate of registration of 14 non-banking financial companies (NBFCs). - Economic Times

🍒 Future Generali India settles Rs 276 crore of Pradhan Mantri Fasal Bima Yojana claims : Private general insurance company Future Generali India Insurance Company Ltd (FGII) has settled ?276 crore of Pradhan Mantri Fasal Bima Yojana claims during the lockdown period. The company has paid PMFBY claims in Karnataka (Belagavi, Chamrajnagar, Bagalkote, Raichur, Ramnagar, Tumkur, Yadgir districts), Rajasthan (Ajmer, Kota, Sawai Madhopur, Jaipur, Pali, Pratapgargh districts) and Maharashtra (Ahmednagar, Buldana, Nanded, Satara, Yavatmal districts).The claim amount has benefited 1,64,917 loanee farmers & 85,460 non-loanee farmers in 19 districts of these three States. A total of 38,928 female farmers received claims amounting to ?44.32 crore via direct beneficiary transfer, the company said in a statement. “Shortage of labour force and breakdown in supply chains has left many farmers struggling to sell their crops. In these testing times, we at Future Generali India Insurance fast-tracked our settlement process which benefited more than 2.5 lakh farmers so far,” Anup Rau, Managing Director and Chief Executive Officer, Future Generali India Insurance Company said. - Business Line

🍒 Get ready to pay EMIs of loans, cards from next month : If you are among those who have opted for EMI moratorium on loans or credit card payments, be prepared to resume repayments from next month. As part of the Pradhan Mantri Garib Kalyan Yojana announced in the wake of Covid-19 pandemic in April, banks had offered EMI deferment facility on all term loans between March 1 and May 31.From June, customers will have to ensure adequate balance in their accounts for deduction of loans. Banks have already started communicating to the customers about the upcoming instalments.“We are already sending SMS to customers, alerting them about the need to pay EMIs from next month,” a senior official with State Bank of India told Business Line on Tuesday. Alerts will also be kept prominently on the portals of the banks, said a functionary with a private sector bank. - Business Line

🍒 Economic package to ease asset risks for financial sector only partially: Moody’s : Moody’s Investors Service on Tuesday said the measures announced by the government for financial institutions as part of ?20 lakh crore-economic package will help ease their asset risk, but will not fully offset the negative impact from the Covid-19 outbreak. The government last week announced a support package of ?3.70 lakh crore for micro, small and medium enterprises (MSME) sector, ?75,000 crore for non-banking financial companies (NBFCs) and ?90,000 crore for power distribution companies. This is part of the overall economic package announced by the government over last week to mitigate the impact of coronavirus crisis. While these measures will help ease asset risks for the financial sector, they will not fully offset the negative impact from the coronavirus outbreak, Moody’s said in a commentary titled ‘Financial Institutions - India: Support measures to provide relief to the financial system, but will not solve all issues’ - Business Line

🍒 Bankers’ meet express concern over poor implementation of govt schemes : A meeting of bankers has expressed concern over the poor participation of some private sector banks in the implementation of various government schemes. The Member of Parliament from Dakshina Kannada, Nalin Kumar Kateel, presided over the meeting in Mangaluru on Monday. Referring to the poor implementation of schemes related to MSMEs (micro, small and medium enterprises), PMEGP (Prime Minister’s Employment Generation Programme) and other such programmes, he asked the Chief Executive Officer of Dakshina Kannada Zilla Panchayat, R Selvamani, to withdraw bulk deposits of the government departments from such banks. Stating that the shortcomings on the part of such banks cannot be tolerated, he said that these programmes of the Union government play a crucial role in delivering the relief measures to the people affected by the pandemic. - Business Line

🍒 FSS launches eFinclusiv AEPS 2.0 : Digital payments player FSS (Financial Software and Systems) on Tuesday announced the launch of eFinclusiv AEPS 2.0, which is expected to strengthen last-mile banking services. “Amidst the transforming dynamics of the global pandemic, FSS eFinclusiv AEPS 2.0 is aimed at enabling digital financial service providers offer secure, low-cost financial tools that expand the usage of digital banking products across diverse customer groups, and moderate and low-income segments in particular,” it said in a statement. The move comes amidst significant growth in transactions through Aadhaar-enabled payment system with the government releasing cash subsidy to help beneficiaries in the lockdown. - Business Line

🍒 MoneyGram sees 81% increase in online remittances in April : With the coronavirus pandemic and lockdown impacting mobility of workers across the world, payment services firm MoneyGram saw an 81 per cent increase in its online remittances in April this year compared to a year ago and now plans to focus more on digital initiatives to help its customers. “As the Covid-19 crisis hit us, our digital business has grown substantially. In April 2020, digital business grew by 81 per cent year on year. People are unable to go to a branch so they prefer to either use bank account credit facility or use MoneyGram online,” said Anil Kapur, Head, Asia-Pacific and South Asia, MoneyGram International.In an interaction with BusinessLine, Kapur said that the company will continue to explore digital opportunities in this environment and is working on multiple ways to reach out to customers and service them better. “The situation will progress positively as the lockdown opens up but it’s very difficult to predict what will happen in the future. We are finding ways to reach out to our customers in this environment and how the agent can go to them,” he said. - Business Line

🍒 IFSC bank units to report all OTC forex deals to CCIL platform from June 1: RBI : IFSC banking units will report all over-the-counter (OTC) foreign exchange, interest rate and credit derivative transactions undertaken by them to CCIL’s reporting platform from June 1, the Reserve Bank has said. The Reserve Bank has mandated that all OTC foreign exchange, interest rate and credit derivative transactions, both inter-bank and client, will be reported to CCIL’s trade reporting platform, according to a notification. The matter has been further discussed with banks operating IFSC banking units (IBU) and the Clearing Corporation of India (CCIL), the RBI said in a circular. “Accordingly, it has been decided that IBUs shall report all OTC foreign exchange, interest rate and credit derivative transactions – both interbank and client transactions – undertaken by them to CCIL’s reporting platform with effect from June 1, 2020,” it said. Additionally, as a one-time measure to ensure completeness of data, all matured and outstanding transactions as on May 31, 2020, shall be reported by July 31, 2020. Banks operating IBUs have been permitted, with effect from June 1, 2020, to offer non-deliverable derivative contracts (NDDCs) involving the rupee, or otherwise, to persons not resident in India. - financial express

🍒 Banks cling to restructuring hopes in tough year for recoveries : With the insolvency law remaining out of bounds for a year, banks are pinning their hopes on a regulatory dispensation for restructuring stressed assets. An existing restructuring scheme for micro, small and medium enterprises (MSMEs) could also come in handy in a year that will have little to offer in terms of recoveries, bankers said. Unfazed by the absence of any mention of restructuring in the five rounds of briefings held by the finance ministry, industry executives expect the Reserve Bank of India (RBI) to accede to their request for allowing a one-time restructuring of stressed assets without classifying them as bad loans. Sunil Mehta, chief executive officer, Indian Banks’ Association, said loan restructuring and asset classification fall within the domain of the RBI and there is still scope for a relaxation on that front. At the same time, he said, the extension of the Insolvency and Bankruptcy Code (IBC)’s applicability by a year is certainly a setback for recoveries. “A one-year moratorium on the IBC will definitely affect recoveries from those accounts, which are yet to be admitted as they will now not be admitted for one year. That will definitely impact recovery,” he said. - financial express

🍒 Gold slips Rs 1,032 per 10 gram, silver down Rs 1,320 per kg : Gold prices slipped Rs 1,032 to Rs 46,829 per 10 gram in the Mumbai bullion market on the back of a stronger dollar-rupee. The yellow metal was under pressure after drug maker Moderna reported promising results of its experimental novel coronavirus, or COVID-19, vaccine in an early-stage trials. This development prompted investors to book profits in gold, which has already risen by over 17 percent in 2020 till date (December 2019 close to high of 2020). The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 35,122, Rs 42,895 and Rs 46,829, respectively, plus 3 percent GST. Silver prices fell Rs 1,320 to Rs 46,800 per kg from its closing on May 18.

🍒 Rupee settles 25 paise higher at 75.66 against US dollar : The rupee appreciated 25 paise to settle at 75.66 (provisional) against the US dollar on Tuesday as reports of initial success in COVID-19 vaccine trial boosted investor sentiment world over.
Forex traders said besides the encouraging results in COVID-19 vaccine trial, higher opening of domestic equities and a weak greenback in overseas market supported the local unit.

🍒 Market updates: Sensex ends 160 higher, Nifty around 8,900 : BSE Sensex rose to 167.19 points to end at 30,196.17. Meanwhile, NSE Nifty advanced 55.85 points to 8,879.10. The two indices were in green territory throughout the day, but trimmed gains in post-noon session. Auto, Media and Metal ended in green, whereas Banks, Pharma, Realty stopped in red. Bharti Airtel, ONGC were the top gainers, whereas UPL, Hindustan Unilever were the top laggards.

🍒 Shares of Central Bank of India in Stock Market : 56% of moneycontrol users recommend selling Central Bank of India shares. In BSE, shares closed at Rs.13.80 against Rs.14.20. In NSE, shares closed Rs.13.75 against Rs.14.15...

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