18.06.2020: Today's Banking / Financial News at a Glance
🍒 DFS asks banks to follow economy measures, defer avoidable expenses : In the backdrop of Covid-19 pandemic, the Department of Financial Services (DFS) has asked banks to follow “economy measures” in their spends while ensuring productive use of their financial resources for core business activities. Public sector bank chiefs have been asked to defer avoidable expenditure on purchase of staff cars, except where unavoidable; refurbishment of guest houses and expenditure on decorative, non-financial items for the interiors in non customer facing premises like administrative offices and back offices, said a DFS advisory to SBI Chairman and chief executives of PSBs. Also, banks have been directed to economise on expenses to the tune of 20 per cent year-on-year or more on entertainment, publicity and travel. The management committee of banks have been asked to review the composition of the existing fleet of vehicles engaged on hire, while taking into account the profitability and cost to income of the bank’s operations; and the occupancy level of guest houses. Banks have also been asked to defer revision of entitlements and perquisites, sources said. - Business Line
🍒 RBI proposes to double the minimum net owned funds requirement for HFCs : The Reserve Bank of India (RBI) proposes to double the minimum net owned funds requirement for housing finance companies (HFCs) to ₹20 crore. Further, it may prescribe that not less than 50 per cent of net assets are in the nature of ‘qualifying assets’ for HFCs.The qualifying assets include loans to individuals or group of individuals including co-operative societies for construction/purchase of new dwelling units; loans to individuals for purchase of old dwelling units; and lending to builders for construction of residential dwelling units. Out of which at least 75 per cent should be towards individual housing loans, as per the proposed changed to the extant regulatory framework for HFCs. - Business Line
🍒 RBI eases norms for deployment of ATMs by non-bank entities: Report : The Reserve Bank of India (RBI) has eased norms related to the deployment of white-label ATMs or ATMs that are set up and operated by non-banking entities. The central bank is in favour of setting a manageable annual target for the number of white-label ATMs deployed, according to a Business Standard report. Moneycontrol could not independently verify the story.Seven years after they began operations, only 23,597 WLATMs have been deployed, Business Standard reported. If the annual target had been maintained, as many as 2 lakh WLATMs could have been deployed by now, industry sources told the publication. White-label companies have been told that they will be evaluated on an annual basis, with manageable targets and the kind of cities (from tier-I to tier-VI) in which ATMs are deployed, the report said. The targets are confidential and specific to each company, the report added. "The earlier targets were hard to meet. We also miscalculated as it is a capital-guzzling business and private equity may not continue to support us as in the past," said the chief executive officer of a white-label deployer told the paper. - Moneycontrol.com
🍒 Large PSBs ramp up lateral hiring in specialist positions on govt nudge : Large public sector banks (PSBs), especially those which have undergone mergers of late, are going for lateral hires in specialist positions at the senior level. This comes as the government has been nudging them in this direction, sources told FE. The government is understood to be of the view that some positions in PSBs which demand a specialist’s perspective should be filled as such. On Tuesday, State Bank of India (SBI) announced an opening for a data protection officer, along with that for a chief financial officer (CFO). Bank of Baroda (BoB) advertised four vacancies for the position of chief manager — IT security. Earlier, Punjab National Bank (PNB) had said it was looking for an external chief risk officer (CRO). “There is some recognition, especially in the merged entities, and there is also a push from the ministry (of finance) to evaluate the key managerial personnel (KMPs). So now that we have seven large and five smaller PSBs and the focus is on the seven large ones, they want to ensure that at least the management bandwidth is complete,” one of the sources said, adding that the Prime Minister’s Office, too, has been closely supervising the merger process. - financial express
🍒 PSU bank amalgamation has proved beneficial, says Canara HSBC OBC Life CEO : Private life insurer Canara HSBC OBC Life Insurance which posted a 7 percent year-on-year (YoY) increase in its individual new business premium in FY20 to Rs 975 crore has benefited from the state-owned bank consolidation. In an interaction with Moneycontrol, Anuj Mathur, Managing Director & Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance said the company has seen advantages of the amalgamation.Canara HSBC OBC Life sells primarily through its bancassurance channels. Mathur said after the public sector bank consolidation, the company has benefited. The insurer is a joint venture between Canara Bank, HSBC and Oriental Bank of Commerce (now merged with Punjab National Bank). “We are a beneficiary of the PSU bank amalgamation. We have got access to 4,000 plus branches of Syndicate Bank (now merged with Canara Bank). We also continue to sell products through the 2,000 plus branches of Oriental Bank of Commerce,” he added. - Moneycontrol.com
🍒 Corporates moving to large banks in search of safety: Report : Companies in India are following consumers to large banks at a time when the Covid-19 outbreak has complicated the legacy problems in the banking system, a report by rating agency Crisil and data analytics provider Greenwich Associates said. The banks that stand to benefit most from the trend are State Bank of India (SBI), ICICI Bank and HDFC Bank, the report added. “Amid a national lockdown and fears of a liquidity crisis, companies in India are joining consumers in shifting business to the largest and presumably safest banks,” the report stated. On top of the list, according to the report, is SBI, which may be in the strongest position to weather the crisis and even gain ground during this period of disruption. “SBI is viewed as a safe haven in the midst of heightened bank risks triggered by the Yes Bank collapse and the resulting crisis of confidence in smaller private sector banks,” the report said. Even more than before, the bank is now well-positioned to leverage its stronger balance sheet and lower costs of funding to woo companies hungry for liquidity. - Financial Express
🍒 Maha Bank to increase lending to corporates, lends Rs 1,500 cr in Apr-May : After completing more than a one year out of the Prompt Corrective Action (PCA) regime, public sector lender Bank of Maharashtra (Maha Bank) will step up exposure to corporates through low risk loans. It has already disbursed about Rs 1,500 crore in two months of the current fiscal (FY21), mostly companies with government backing. Reserve Bank of India had placed curbs on incremental lending to corporate sector after bank was put under PCA regime over deterioration in its financial and credit profile. The Pune-based lender plans to grow total loan book by 12-13 per cent in FY21. However, this target is subject to review every two months due to uncertainty over the fallout of Covid-19 pandemic. A S Rajeev, managing director and chief executive, Maha Bank, said that while lending to corporates bank would focus on entities which have guarantees from state government, the diligence on such exposures would remain stringent. He said that the guarantees reduced asset quality risks. The bank's credit portfolio grew by 1.52 per cent to Rs 94,889 crore in March, 2020. The corporate and allied portfolio shrank by 11.54 per cent to Rs 40,530 crore in March 2020. The retail advances grew by 21.30 per cent to Rs 22,810 crore and the MSME advances grew by 25.04 per cent to Rs 17,164 crore.- Business Standard
🍒 SBI plans Rs 20,000 crore capital mop-up by March 2021; to seek shareholders’ nod in July : The country’s largest lender SBI on Tuesday said it will seek shareholders’ approval in mid-July to raise up to Rs 20,000 crore equity capital through various means in the current fiscal. “We advise that a general Meeting of the shareholders of State Bank of lndia will be held on Tuesday, the 14th July, 2O2O at the State Bank Auditorium, State Bank Bhavan Complex, Madame Cama Road, Mumbai. “lf the conditions are not conducive and the local authorities do not permit to hold physical general meeting, the meeting will be held through Video Conferencing (VC)/ Other Audio Visual Means (OAVM) facility to transact business,” SBI said in a regulatory filing. The lender said it will seek shareholders’ nod in the meeting “to create, offer, issue and allot, such number of equity shares of Re 1 each, for an amount not exceeding Rs 20,000 crore or such amount as approved by government and RBI subject to the condition that the Government of India shareholding in equity share capital of the bank does not fall below 52 per cent at any point of time”. The shares are to be allotted by way of public issue (follow-on-public offer) or private placement, including Qualified Institutional Placement (QIP) /Global Depository Receipt (GDRs) /American Depository Receipt (ADRs) and/or any other mode(s) or a combination(s) thereof, it said. - financial express
🍒 Consumer loans disbursement back to pre-Covid level: HDFC Bank : India’s largest private sector lender HDFC Bank on Wednesday said its consumer finance loans are growing and the amount disbursed has got back to the pre-Covid levels of Rs 1,000 crore a month. The city-headquartered lender’s country head for consumer finance Parag Rao said changes in lifestyle due to aspects like lockdowns and work from home has created additional demand for items such as television sets, laptops, Wi-Fi routers and even vacuum cleaners, which the bank is funding at present. It can be noted that driving consumption demand in the economy has been one of the toughest challenges which policymakers are grappling with, and economists have expressed concerns about the same. Acknowledging that a part of the traction being witnessed by the bank is pent-up demand, Rao said there is a “set of consumer appliances where demand is going up”. - moneycontrol.com
🍒 Interest rate waivers for loans during moratorium to harm depositors: AIBDA : Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors' Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said. It further added that historically, the sovereign covered the loan interest waivers, but in the current situation, a shortfall in revenues both at the Centre and state level will not permit the same. - Business Standard
🍒 HSBC revives plan to axe 35,000 jobs : HSBC is resuming a massive redundancy plan it had put on ice after the coronavirus outbreak and will cut 35,000 jobs over the medium term, a memo seen by Reuters on Wednesday showed. The bank will also maintain a freeze on almost all external recruitment, Chief Executive Noel Quinn said in the memo sent to the bank's 235,000 staff worldwide. “We could not pause the job losses indefinitely - it was always a question of 'not if, but when',” Quinn said. A bank spokeswoman confirmed the contents of the memo. In March, HSBC had postponed the job cuts, part of a broader restructuring to cut costs, saying the extraordinary circumstances of the COVID-19 pandemic meant it would have been wrong to push staff out. - Business Line
🍒 Interest waiver on loan moratorium: Apex court defers the matter to August : The Supreme Court on Wednesday deferred the plea to consider waiver of interest on interest for loan EMI (Equated Monthly Instalment) during six months moratorium period. However, it has asked the Centre and Reserve Bank of India to consider the matter. A bench led by Justice Ashok Bhushan heard the plea seeking relief and then listed the matter for next hearing in August. It has sought clarity on whether banks can come up with new guidelines on this matter. As a part of Covid-19 regulatory package, the RBI on March 27 announced deferment of instalments and interest/EMIs on Term Loans falling due from March 1 to May 31. Later, on May 23, the moratorium was extended for another three months falling due from June 1 to August 31. Accordingly, banks acted on that and offered moratorium but also cautioned that interest would continue to accrue on the outstanding portion of the term loan during the moratorium period. - Business Line
🍒 Muthoot Finance posts 59% growth in Q4 net profit : Gold loan lender Muthoot Finance has posted a 59 per cent growth in net profit in Q4 of FY20 at ₹815 crore, compared to ₹512 crore in the corresponding period of the previous fiscal. The net profit for the whole year posted a 53 per cent growth at ₹3,018 crore in FY20 against ₹1,972 crore in the previous year. Loan assets stood at ₹41,611 crore as of March 31 against ₹34,246 crore in the previous year. During the quarter, gold loan assets increased by ₹3,113 crore. “We are glad to announce that consolidated loan assets of the group grew by 22 per cent at ₹46,871 crore during FY20 against last year’s ₹38,304 crore. Consolidated profit increased by 51 per cent at ₹3,169 crore against last year’s ₹2,103 crore. During the quarter, gold loan portfolio increased by ₹3,113 crore to ₹41,611 crore. Standalone profit for the year ended March 31increased by 53 per cent at ₹3,018 crore,” said MG George Muthoot, Chairman. - Business Line
🍒 KVB's special offer for buyers of Maruti car : Karur Vysya Bank (KVB) is offering a special product for buyers of Maruti Suzuki vehicles (except Omni and EECO) which include 100 per cent on-road finance with a 6 month holiday period. The loan can be availed by self-employed and salaried persons, the bank said in a release. “The in-principle loan sanction would take 15 minutes and existing customers of the bank can get the loan disbursed the same day,” J Natarajan, President and COO, KVB said. Commenting on the tie-up with KVB, Shashank Srivastava , Executive Director (M&S), Maruti Suzuki India said that such customer focused partnerships would pave the way for greater access to financing options, usher finance flexibility and ease of owning a new car. - Business Line
🍒 Karnataka Bank launches Covid-19 health cover : Karnataka Bank has launched a health insurance policy to cover the uncertainties posed by the Covid-19 pandemic. Quoting Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, a press release said on Wednesday that with the objective of providing insurance cover to individuals against Covid-19-related expenses, the bank, in association with Universal Sompo General Insurance Company Ltd, has launched this health policy. At a premium of ₹399 (inclusive of all taxes), one can avail health cover for Covid-19 under this policy. This policy will cover in-patient hospital expenses up to ₹3 lakh, outpatient treatment expenses of ₹3,000, and also provide a sum of ₹1,000 a day for expenses incurred towards 14 days of quarantine at a government or military hospital. - Business Line
🍒 Finance Ministry releases Rs 15,187 crore to states as rural local bodies grant : The finance ministry on Wednesday released Rs 15,187 crore to 28 states as grants to rural local bodies to help them restart economic activity. "Based on the recommendations of the 15th Finance Commission, @FinMinIndia today (Wednesday) released Rs 15,187.50 crore to 28 states as the 1st instalment of Rural Local Bodies Basic (Untied) Grants for 2020-21," the Office of Finance Minister Nirmala Sitharaman tweeted. This amount would enable the rural local bodies to fight the coronavirus pandemic and restart economic activities, it added. - Moneycontrol.com
🍒 Canara HSBC OBC Life eyes 99% claim settlement ratio for individual policies this fiscal: CEO Anuj Mathur : Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited (CanaraHSBCOBCLife) is eyeing claim settlement ratio of 99 per cent on individual policies this fiscal, a top official said. This will be higher than the 2018-19 level of 98.12 per cent, which was more than four percentage point jump to claim settlement ratio of 94 per cent in 2017-18, Anuj Mathur, Managing Director & CEO, told BusinessLine in an interview. "With this healthy claim settlement ratio of 98.12 per cent, we are now in top quartile. Our overall claim settlement ratio (which includes group insurance) is already 99 per cent. I am very confident this fiscal we will improve to 99 per cent on the individual front too", he said.- Business Line
🍒 Moratorium on loans taken by NBFCs will offer material liquidity support: Crisil : With debt repayments remaining high in the near term, especially in June 2020, the availability of a moratorium on loans non-banking finance companies (NBFCs) had taken from banks will offer them material liquidity support, according to Crisil. The credit rating agency underscored that June is crucial with nearly ₹1.25-lakh crore of repayments, which is half of the ₹2.50-lakh crore due through August.Factoring the lumpiness of repayments in June and potential impact on collections due to the extension of moratorium, Crisil said support from banks will be crucial for a number of entities. As per Crisil’s analysis of the NBFCs it rates, their liquidity covers have not depleted significantly over the past two months. However, fund-raising continues to be a challenge for most NBFCs because investors remain risk-averse- Business Line
🍒 Low automobile sales in May hit insurers' premium income : ow automobile sales and disruptions in crop premium collections meant that general insurers’ premium income remained subdued for the second straight month in May even as segments such as health and fire insurance showed encouraging signs of revival for players, insurance regulator’s monthly data showed. The premium collection for non-life insurers dropped 9% in May and 10% for the two months of the fiscal, largely on the back of a 23% decline in the motor premiums and 48% decline in crop premiums collected by the industry in May, data from IRDAI showed. - economic times
🍒 Sensex, Nifty end in red in a rangebound trade; Media shares shine : The equity indices Sensex and Nifty were broadly flat on Wednesday as escalating border tensions with China, and a spike in coronavirus cases both at home and abroad quelled hope of a continuation of the past month's recovery. The Nifty 50 index ended down 0.33 per cent at 9,881.15 while the Sensex edged 0.29 per cent lower to 33,507.92. The small and midcap indices gained 0.5 per cent and 0.11 per cent respectively. The India Volatility Index was up 1.53 per cent to 33.47.All the sectoral indices ended with both positive and negative bias, except Media index (up 1.71 per cent) and Realty index (up 0.76 per cent). Maruti Suzuki was up 4.05 per cent and ended the top Nifty gainer while the laggard was Bharti Infratel, losing 4.49 per cent.
🍒 Rupee recoups losses, settles 4 paise higher at 76.16 against US dollar : The rupee pared early losses and provisionally settled 4 paise higher at 76.16 against the US dollar on Wednesday tracking gains in the domestic equity market and weakening US dollar. The rupee opened weak at 76.21 at the interbank forex market, but recouped the losses and closed at 76.16 against US dollar, higher by 4 paise over its last close. It had settled at 76.20 against the US dollar on Tuesday.
🍒 Gold prices down Rs 163 at Rs 47,377 per 10 gram, silver gains : Gold prices eased Rs 163 to Rs 47,377 per 10 gram in the Mumbai bullion market on the back of an appreciating rupee versus the dollar. The precious metal eased after US data showed stronger than expected retail sales for May and optimism over a potential coronavirus drug. The rate of 10 gram 18-, 22- and 24-carat gold in Mumbai was Rs 35,533, Rs 43,397 and Rs 47,377 plus 3 percent GST. Silver prices rose Rs 320 to Rs 48,190 per kg from its closing on June 16.
🍒 Shares of Central Bank of India in Stock Market : 75% of moneycontrol users recommend buying Central Bank of India Shares. In BSE, shares closed at Rs.16.28 against rs.16.51. In NSE, shares closed at Rs.16.20 against Rs.16.50...
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🍒 DFS asks banks to follow economy measures, defer avoidable expenses : In the backdrop of Covid-19 pandemic, the Department of Financial Services (DFS) has asked banks to follow “economy measures” in their spends while ensuring productive use of their financial resources for core business activities. Public sector bank chiefs have been asked to defer avoidable expenditure on purchase of staff cars, except where unavoidable; refurbishment of guest houses and expenditure on decorative, non-financial items for the interiors in non customer facing premises like administrative offices and back offices, said a DFS advisory to SBI Chairman and chief executives of PSBs. Also, banks have been directed to economise on expenses to the tune of 20 per cent year-on-year or more on entertainment, publicity and travel. The management committee of banks have been asked to review the composition of the existing fleet of vehicles engaged on hire, while taking into account the profitability and cost to income of the bank’s operations; and the occupancy level of guest houses. Banks have also been asked to defer revision of entitlements and perquisites, sources said. - Business Line
🍒 RBI proposes to double the minimum net owned funds requirement for HFCs : The Reserve Bank of India (RBI) proposes to double the minimum net owned funds requirement for housing finance companies (HFCs) to ₹20 crore. Further, it may prescribe that not less than 50 per cent of net assets are in the nature of ‘qualifying assets’ for HFCs.The qualifying assets include loans to individuals or group of individuals including co-operative societies for construction/purchase of new dwelling units; loans to individuals for purchase of old dwelling units; and lending to builders for construction of residential dwelling units. Out of which at least 75 per cent should be towards individual housing loans, as per the proposed changed to the extant regulatory framework for HFCs. - Business Line
🍒 RBI eases norms for deployment of ATMs by non-bank entities: Report : The Reserve Bank of India (RBI) has eased norms related to the deployment of white-label ATMs or ATMs that are set up and operated by non-banking entities. The central bank is in favour of setting a manageable annual target for the number of white-label ATMs deployed, according to a Business Standard report. Moneycontrol could not independently verify the story.Seven years after they began operations, only 23,597 WLATMs have been deployed, Business Standard reported. If the annual target had been maintained, as many as 2 lakh WLATMs could have been deployed by now, industry sources told the publication. White-label companies have been told that they will be evaluated on an annual basis, with manageable targets and the kind of cities (from tier-I to tier-VI) in which ATMs are deployed, the report said. The targets are confidential and specific to each company, the report added. "The earlier targets were hard to meet. We also miscalculated as it is a capital-guzzling business and private equity may not continue to support us as in the past," said the chief executive officer of a white-label deployer told the paper. - Moneycontrol.com
🍒 Large PSBs ramp up lateral hiring in specialist positions on govt nudge : Large public sector banks (PSBs), especially those which have undergone mergers of late, are going for lateral hires in specialist positions at the senior level. This comes as the government has been nudging them in this direction, sources told FE. The government is understood to be of the view that some positions in PSBs which demand a specialist’s perspective should be filled as such. On Tuesday, State Bank of India (SBI) announced an opening for a data protection officer, along with that for a chief financial officer (CFO). Bank of Baroda (BoB) advertised four vacancies for the position of chief manager — IT security. Earlier, Punjab National Bank (PNB) had said it was looking for an external chief risk officer (CRO). “There is some recognition, especially in the merged entities, and there is also a push from the ministry (of finance) to evaluate the key managerial personnel (KMPs). So now that we have seven large and five smaller PSBs and the focus is on the seven large ones, they want to ensure that at least the management bandwidth is complete,” one of the sources said, adding that the Prime Minister’s Office, too, has been closely supervising the merger process. - financial express
🍒 PSU bank amalgamation has proved beneficial, says Canara HSBC OBC Life CEO : Private life insurer Canara HSBC OBC Life Insurance which posted a 7 percent year-on-year (YoY) increase in its individual new business premium in FY20 to Rs 975 crore has benefited from the state-owned bank consolidation. In an interaction with Moneycontrol, Anuj Mathur, Managing Director & Chief Executive Officer, Canara HSBC Oriental Bank of Commerce Life Insurance said the company has seen advantages of the amalgamation.Canara HSBC OBC Life sells primarily through its bancassurance channels. Mathur said after the public sector bank consolidation, the company has benefited. The insurer is a joint venture between Canara Bank, HSBC and Oriental Bank of Commerce (now merged with Punjab National Bank). “We are a beneficiary of the PSU bank amalgamation. We have got access to 4,000 plus branches of Syndicate Bank (now merged with Canara Bank). We also continue to sell products through the 2,000 plus branches of Oriental Bank of Commerce,” he added. - Moneycontrol.com
🍒 Corporates moving to large banks in search of safety: Report : Companies in India are following consumers to large banks at a time when the Covid-19 outbreak has complicated the legacy problems in the banking system, a report by rating agency Crisil and data analytics provider Greenwich Associates said. The banks that stand to benefit most from the trend are State Bank of India (SBI), ICICI Bank and HDFC Bank, the report added. “Amid a national lockdown and fears of a liquidity crisis, companies in India are joining consumers in shifting business to the largest and presumably safest banks,” the report stated. On top of the list, according to the report, is SBI, which may be in the strongest position to weather the crisis and even gain ground during this period of disruption. “SBI is viewed as a safe haven in the midst of heightened bank risks triggered by the Yes Bank collapse and the resulting crisis of confidence in smaller private sector banks,” the report said. Even more than before, the bank is now well-positioned to leverage its stronger balance sheet and lower costs of funding to woo companies hungry for liquidity. - Financial Express
🍒 Maha Bank to increase lending to corporates, lends Rs 1,500 cr in Apr-May : After completing more than a one year out of the Prompt Corrective Action (PCA) regime, public sector lender Bank of Maharashtra (Maha Bank) will step up exposure to corporates through low risk loans. It has already disbursed about Rs 1,500 crore in two months of the current fiscal (FY21), mostly companies with government backing. Reserve Bank of India had placed curbs on incremental lending to corporate sector after bank was put under PCA regime over deterioration in its financial and credit profile. The Pune-based lender plans to grow total loan book by 12-13 per cent in FY21. However, this target is subject to review every two months due to uncertainty over the fallout of Covid-19 pandemic. A S Rajeev, managing director and chief executive, Maha Bank, said that while lending to corporates bank would focus on entities which have guarantees from state government, the diligence on such exposures would remain stringent. He said that the guarantees reduced asset quality risks. The bank's credit portfolio grew by 1.52 per cent to Rs 94,889 crore in March, 2020. The corporate and allied portfolio shrank by 11.54 per cent to Rs 40,530 crore in March 2020. The retail advances grew by 21.30 per cent to Rs 22,810 crore and the MSME advances grew by 25.04 per cent to Rs 17,164 crore.- Business Standard
🍒 SBI plans Rs 20,000 crore capital mop-up by March 2021; to seek shareholders’ nod in July : The country’s largest lender SBI on Tuesday said it will seek shareholders’ approval in mid-July to raise up to Rs 20,000 crore equity capital through various means in the current fiscal. “We advise that a general Meeting of the shareholders of State Bank of lndia will be held on Tuesday, the 14th July, 2O2O at the State Bank Auditorium, State Bank Bhavan Complex, Madame Cama Road, Mumbai. “lf the conditions are not conducive and the local authorities do not permit to hold physical general meeting, the meeting will be held through Video Conferencing (VC)/ Other Audio Visual Means (OAVM) facility to transact business,” SBI said in a regulatory filing. The lender said it will seek shareholders’ nod in the meeting “to create, offer, issue and allot, such number of equity shares of Re 1 each, for an amount not exceeding Rs 20,000 crore or such amount as approved by government and RBI subject to the condition that the Government of India shareholding in equity share capital of the bank does not fall below 52 per cent at any point of time”. The shares are to be allotted by way of public issue (follow-on-public offer) or private placement, including Qualified Institutional Placement (QIP) /Global Depository Receipt (GDRs) /American Depository Receipt (ADRs) and/or any other mode(s) or a combination(s) thereof, it said. - financial express
🍒 Consumer loans disbursement back to pre-Covid level: HDFC Bank : India’s largest private sector lender HDFC Bank on Wednesday said its consumer finance loans are growing and the amount disbursed has got back to the pre-Covid levels of Rs 1,000 crore a month. The city-headquartered lender’s country head for consumer finance Parag Rao said changes in lifestyle due to aspects like lockdowns and work from home has created additional demand for items such as television sets, laptops, Wi-Fi routers and even vacuum cleaners, which the bank is funding at present. It can be noted that driving consumption demand in the economy has been one of the toughest challenges which policymakers are grappling with, and economists have expressed concerns about the same. Acknowledging that a part of the traction being witnessed by the bank is pent-up demand, Rao said there is a “set of consumer appliances where demand is going up”. - moneycontrol.com
🍒 Interest rate waivers for loans during moratorium to harm depositors: AIBDA : Interest rate waivers for bank loans during moratorium will harm the depositors, the All India Bank Depositors' Association (AIBDA) has said adding that interest waiver of any kind will dent the credit culture and also impact the financial health of banks. Bank depositors will be "severely hit" if a waiver on interest rates is allowed, as banks would inevitably seek to cover their potential or actual loss of interest income through further cutbacks in the deposit interest rates, it said. It further added that historically, the sovereign covered the loan interest waivers, but in the current situation, a shortfall in revenues both at the Centre and state level will not permit the same. - Business Standard
🍒 HSBC revives plan to axe 35,000 jobs : HSBC is resuming a massive redundancy plan it had put on ice after the coronavirus outbreak and will cut 35,000 jobs over the medium term, a memo seen by Reuters on Wednesday showed. The bank will also maintain a freeze on almost all external recruitment, Chief Executive Noel Quinn said in the memo sent to the bank's 235,000 staff worldwide. “We could not pause the job losses indefinitely - it was always a question of 'not if, but when',” Quinn said. A bank spokeswoman confirmed the contents of the memo. In March, HSBC had postponed the job cuts, part of a broader restructuring to cut costs, saying the extraordinary circumstances of the COVID-19 pandemic meant it would have been wrong to push staff out. - Business Line
🍒 Interest waiver on loan moratorium: Apex court defers the matter to August : The Supreme Court on Wednesday deferred the plea to consider waiver of interest on interest for loan EMI (Equated Monthly Instalment) during six months moratorium period. However, it has asked the Centre and Reserve Bank of India to consider the matter. A bench led by Justice Ashok Bhushan heard the plea seeking relief and then listed the matter for next hearing in August. It has sought clarity on whether banks can come up with new guidelines on this matter. As a part of Covid-19 regulatory package, the RBI on March 27 announced deferment of instalments and interest/EMIs on Term Loans falling due from March 1 to May 31. Later, on May 23, the moratorium was extended for another three months falling due from June 1 to August 31. Accordingly, banks acted on that and offered moratorium but also cautioned that interest would continue to accrue on the outstanding portion of the term loan during the moratorium period. - Business Line
🍒 Muthoot Finance posts 59% growth in Q4 net profit : Gold loan lender Muthoot Finance has posted a 59 per cent growth in net profit in Q4 of FY20 at ₹815 crore, compared to ₹512 crore in the corresponding period of the previous fiscal. The net profit for the whole year posted a 53 per cent growth at ₹3,018 crore in FY20 against ₹1,972 crore in the previous year. Loan assets stood at ₹41,611 crore as of March 31 against ₹34,246 crore in the previous year. During the quarter, gold loan assets increased by ₹3,113 crore. “We are glad to announce that consolidated loan assets of the group grew by 22 per cent at ₹46,871 crore during FY20 against last year’s ₹38,304 crore. Consolidated profit increased by 51 per cent at ₹3,169 crore against last year’s ₹2,103 crore. During the quarter, gold loan portfolio increased by ₹3,113 crore to ₹41,611 crore. Standalone profit for the year ended March 31increased by 53 per cent at ₹3,018 crore,” said MG George Muthoot, Chairman. - Business Line
🍒 KVB's special offer for buyers of Maruti car : Karur Vysya Bank (KVB) is offering a special product for buyers of Maruti Suzuki vehicles (except Omni and EECO) which include 100 per cent on-road finance with a 6 month holiday period. The loan can be availed by self-employed and salaried persons, the bank said in a release. “The in-principle loan sanction would take 15 minutes and existing customers of the bank can get the loan disbursed the same day,” J Natarajan, President and COO, KVB said. Commenting on the tie-up with KVB, Shashank Srivastava , Executive Director (M&S), Maruti Suzuki India said that such customer focused partnerships would pave the way for greater access to financing options, usher finance flexibility and ease of owning a new car. - Business Line
🍒 Karnataka Bank launches Covid-19 health cover : Karnataka Bank has launched a health insurance policy to cover the uncertainties posed by the Covid-19 pandemic. Quoting Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, a press release said on Wednesday that with the objective of providing insurance cover to individuals against Covid-19-related expenses, the bank, in association with Universal Sompo General Insurance Company Ltd, has launched this health policy. At a premium of ₹399 (inclusive of all taxes), one can avail health cover for Covid-19 under this policy. This policy will cover in-patient hospital expenses up to ₹3 lakh, outpatient treatment expenses of ₹3,000, and also provide a sum of ₹1,000 a day for expenses incurred towards 14 days of quarantine at a government or military hospital. - Business Line
🍒 Finance Ministry releases Rs 15,187 crore to states as rural local bodies grant : The finance ministry on Wednesday released Rs 15,187 crore to 28 states as grants to rural local bodies to help them restart economic activity. "Based on the recommendations of the 15th Finance Commission, @FinMinIndia today (Wednesday) released Rs 15,187.50 crore to 28 states as the 1st instalment of Rural Local Bodies Basic (Untied) Grants for 2020-21," the Office of Finance Minister Nirmala Sitharaman tweeted. This amount would enable the rural local bodies to fight the coronavirus pandemic and restart economic activities, it added. - Moneycontrol.com
🍒 Canara HSBC OBC Life eyes 99% claim settlement ratio for individual policies this fiscal: CEO Anuj Mathur : Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited (CanaraHSBCOBCLife) is eyeing claim settlement ratio of 99 per cent on individual policies this fiscal, a top official said. This will be higher than the 2018-19 level of 98.12 per cent, which was more than four percentage point jump to claim settlement ratio of 94 per cent in 2017-18, Anuj Mathur, Managing Director & CEO, told BusinessLine in an interview. "With this healthy claim settlement ratio of 98.12 per cent, we are now in top quartile. Our overall claim settlement ratio (which includes group insurance) is already 99 per cent. I am very confident this fiscal we will improve to 99 per cent on the individual front too", he said.- Business Line
🍒 Moratorium on loans taken by NBFCs will offer material liquidity support: Crisil : With debt repayments remaining high in the near term, especially in June 2020, the availability of a moratorium on loans non-banking finance companies (NBFCs) had taken from banks will offer them material liquidity support, according to Crisil. The credit rating agency underscored that June is crucial with nearly ₹1.25-lakh crore of repayments, which is half of the ₹2.50-lakh crore due through August.Factoring the lumpiness of repayments in June and potential impact on collections due to the extension of moratorium, Crisil said support from banks will be crucial for a number of entities. As per Crisil’s analysis of the NBFCs it rates, their liquidity covers have not depleted significantly over the past two months. However, fund-raising continues to be a challenge for most NBFCs because investors remain risk-averse- Business Line
🍒 Low automobile sales in May hit insurers' premium income : ow automobile sales and disruptions in crop premium collections meant that general insurers’ premium income remained subdued for the second straight month in May even as segments such as health and fire insurance showed encouraging signs of revival for players, insurance regulator’s monthly data showed. The premium collection for non-life insurers dropped 9% in May and 10% for the two months of the fiscal, largely on the back of a 23% decline in the motor premiums and 48% decline in crop premiums collected by the industry in May, data from IRDAI showed. - economic times
🍒 Sensex, Nifty end in red in a rangebound trade; Media shares shine : The equity indices Sensex and Nifty were broadly flat on Wednesday as escalating border tensions with China, and a spike in coronavirus cases both at home and abroad quelled hope of a continuation of the past month's recovery. The Nifty 50 index ended down 0.33 per cent at 9,881.15 while the Sensex edged 0.29 per cent lower to 33,507.92. The small and midcap indices gained 0.5 per cent and 0.11 per cent respectively. The India Volatility Index was up 1.53 per cent to 33.47.All the sectoral indices ended with both positive and negative bias, except Media index (up 1.71 per cent) and Realty index (up 0.76 per cent). Maruti Suzuki was up 4.05 per cent and ended the top Nifty gainer while the laggard was Bharti Infratel, losing 4.49 per cent.
🍒 Rupee recoups losses, settles 4 paise higher at 76.16 against US dollar : The rupee pared early losses and provisionally settled 4 paise higher at 76.16 against the US dollar on Wednesday tracking gains in the domestic equity market and weakening US dollar. The rupee opened weak at 76.21 at the interbank forex market, but recouped the losses and closed at 76.16 against US dollar, higher by 4 paise over its last close. It had settled at 76.20 against the US dollar on Tuesday.
🍒 Gold prices down Rs 163 at Rs 47,377 per 10 gram, silver gains : Gold prices eased Rs 163 to Rs 47,377 per 10 gram in the Mumbai bullion market on the back of an appreciating rupee versus the dollar. The precious metal eased after US data showed stronger than expected retail sales for May and optimism over a potential coronavirus drug. The rate of 10 gram 18-, 22- and 24-carat gold in Mumbai was Rs 35,533, Rs 43,397 and Rs 47,377 plus 3 percent GST. Silver prices rose Rs 320 to Rs 48,190 per kg from its closing on June 16.
🍒 Shares of Central Bank of India in Stock Market : 75% of moneycontrol users recommend buying Central Bank of India Shares. In BSE, shares closed at Rs.16.28 against rs.16.51. In NSE, shares closed at Rs.16.20 against Rs.16.50...
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