☕ 25.06.2020: Today's Banking / Financial News at a Glance
🍒 Nothing should threaten safety, dignity of bank employees: FM on banker assault : A day after an assault on a female staff within bank premises in Surat, Finance Minister Nirmala Sitharaman on Wednesday said nothing should threaten the safety and dignity of bank employees and that she will closely follow the matter. Taking to twitter, Sitharaman said her office has spoken to Commissioner of Police, Surat City, R B Brahmbhatt, who has assured her that the accused constable shall be suspended immediately.A short video went viral on Twitter on Tuesday which showed a person manhandling a female banker, following which #ShameSuratPolice started trending on the social media platform.“Will be closely following this matter. Wish to assure that the safety of all members of staff in banks is of importance for us. Amid challenges, banks are extending all services to our people. Nothing should threaten their safety and dignity,” Sitharaman said.She further said that she has spoken to Surat Collector Dhaval Patel on the incident. “Although currently on leave, he assured me that timely action will be taken on the FIR filed late night,” she said. “My office spoke to the Commissioner of Police... He has assured us that he himself will visit the branch and assure the staff of their safety. Also he assured that the accused constable shall be suspended immediately,” Sitharaman added. - economic times
🍒 Govt okays Ordinance to give more teeth to RBI over co-operative banks : The Union government on Wednesday decided to take the Ordinance route to give more powers to the Reserve Bank of India to supervise co-operative banks, akin to commercial banks. The RBI will get more auditory and managerial powers over 1,482 urban co-operative banks and 58 multi-state co-operative banks after the Ordinance is approved by the President to become a law. The Ordinance will, however, need an approval from Parliament within six months of becoming a law. “The urban co-operative and multi-state co-operative banks will come under the supervisory control of the RBI. The supervisory norms which apply to commercial banks will also be applicable to them. The move will help keep the depositors’ money safe,” Information and Broadcasting Minister Prakash Javadekar said in a press briefing. - Business Standard
🍒 Canara Bank's net loss widens to Rs 3,259 cr in Q4 on back of provisioning : State-owned Canara Bank on Wednesday reported widening of its standalone net loss to Rs 3,259.33 crore for the fourth quarter ended March 2020. The bank had registered a net loss of Rs 551.53 crore during the corresponding January-March 2019 quarter. However, income on a standalone basis during January-March rose to Rs 14,222.39 crore, compared with Rs 14,000.43 crore in the year-ago period, Canara Bank said in a regulatory filing. The lender made a huge provisioning of Rs 5,375.38 crore for the March 2020 quarter, even as it was lower than the Rs 5,523.50 crore parked aside for corresponding period of 2018-19. - Business Standard
🍒 RBI pulls up banks, NBFCs for non-transparency in digital loans : The Reserve Bank of India (RBI) on Wednesday said digital lending platforms must disclose to the customers which bank or non-bank financial company (NBFC) these platforms are working for so that customers availing so called ‘hassle free’ loans are not harassed later. Mounting a sharp critique on banks and NBFCs, the central bank noted that these digital platforms, of which many have emerged now, claim to offer hassle free loans to retail individuals, small traders, and other borrowers, but don’t disclose who they are associated with. Banks and NBFCs are either direct floaters of these platforms, some of whom are also registered with the RBI as ‘digital only’ lenders, or the financial institutions have outsourced the platform to a third party. “Of late, there are several complaints against the lending platforms which primarily relate to exorbitant interest rates, non-transparent methods to calculate interest, harsh recovery measures, unauthorised use of personal data and bad behavior,” the RBI said. - Business Standard
🍒 Karur Vysya Bank Q4 net profit up 40% at Rs 83.7 crore : Karur Vysya Bank on Wednesday reported 39.5 percent jump in net profit at Rs 83.70 crore for the quarter ended March 2020 on higher income from other sources, even as provisioning went up substantially. The private sector lender had posted a net profit of Rs 60.02 crore during the corresponding January-March quarter period of preceding fiscal year 2018-19. The bank's provisioning for bad loans and contingencies during March quarter of FY20 were raised to Rs 429.27 crore as against Rs 352.34 crore in the year-ago period, Karur Vysya Bank said in a regulatory filing. - moneycontrol.com
🍒 IDBI Bank don't see any 'material impact of Covid-19' on future results : LIC-owned IDBI Bank on Wednesday said despite challenges arising out of the Covid-19 pandemic, it does not see any material impact on its financial results going ahead. The implementation of lockdown and extensions has resulted in disruptions of business and common life, the lender said in a filing to the exchanges. The major identified challenges for bank borrowers across various industry sectors is expected to arise from eroding cash flows and elongated working capital cycles, it said. "Despite these events and conditions, our results in future are not expected to be materially adverse nor would have any significant impact on the going concern assumption," the lender said. - Business Standard
🍒 Google Pay says all UPI transactions on its platform are fully protected : Google Pay on Wednesday said it works with banks to allow payments via UPI, and all transactions made through its platform are fully protected by redressal processes laid out by guidelines of RBI and NPCI. The clarification came after a buzz on social media that issues arising while transferring money through Google Pay are not protected by law as the app is unauthorised. "Some quotes on social media, wrongly attributed to the RBI, claim that issues arising while transferring money through Google Pay are not protected by the law, since the app is unauthorised. This is incorrect and can be verified on NPCI's website," a Google spokesperson said. The spokesperson added that RBI has stated no such thing either in the court hearing or in its written response to the High Court. - Business Standard
🍒 Tamilnad Mercantile Bank net profit grows 57.7% to Rs 408 cr in FY20 : Tamilnad Mercantile Bank Limited (TMB) has posted 57.7 per cent growth in net profit at Rs 407.69 crore in 2019-20 from Rs 258.58 crore the previous year. Total business grew 4.7 per cent to Rs 65,061 crore from Rs 62,154.67 crore. Gross NPAs of the bank came down 12.6 per cent to Rs 1,020.98 crore, or 3.62 per cent of gross advances, from Rs 1168.11 crore (4.32 per cent) the previous year. Net NPAs were down 21.85 per cent to Rs 497.47 crore (1.80 per cent) in FY 20, as compared to Rs 636.54 crore (2.40 per cent). The bank has been giving continued thrust on advances to priority sectors like agriculture, MSME, education and Housing, constituting 68.49 per cent of its Adjusted Net Bank Credit (ANBC), above the regulatory requirement of 40 per cent. Its deposits rose to Rs 36,825.03 crore (Rs 35,136.23 crore the previous year) up 4.81 per cent.- Business Standard
🍒 Cooperative banks to be supervised by RBI; govt to bring an ordinance : The Union government has decided to bring 1,482 urban cooperative banks and 58 multi-state cooperative banks, under the supervisory powers of the Reserve Bank of India, said I&B minister Prakash Javadekar after a meeting of the Union Cabinet earlier today. The RBI's powers as they apply to the scheduled banks will also apply to cooperative banks, said the minister. Union government will bring an ordinance to put cooperative banks under RBI supervision, announced the I&B minister. The decision to bring 1,540 cooperative banks under RBI's supervision will give an assurance to more than 86 million depositors in these banks that their money amounting to Rs 4.84 trillion will stay safe, he added. - Business Standard
🍒 DHFL auditor reports fair value loss of ₹18,853 cr, mismatch of ₹3,018 cr, ICD dues of ₹3,786.24 cr : According to the recent auditing report of Dewan House Finance Corporation (DHFL), a company which is under a moratorium, DHFL has a fair value loss of Rs 18,853 crore as of March 2020, mismatch of Rs 3,018 crore. The auditor further noted that the recoverability of inter-corporate deposits (ICDs) of Rs 3,786.24 crore “is yet to be ascertained,” Indian Express reported. According to the auditor, KK Mankeshwar & Co, DHFL’s wholesale loan portfolio aggregating Rs 49,585 crore (after classification of this portfolio to “held for sale” in the previous year ended March 2019) has been “fair valued” as of March 2020 at Rs 30,732 crore, which reflects the fair value loss of Rs 18,853 crore. “Out of this, fair value loss aggregating to Rs 5,986 crore has been accounted up to December 2019 and balance loss of Rs 12,867 crore has been charged to the statement of profit and loss for the quarter ended March 2020,” it said. - Business Line
🍒 Outsourcing of financial services: RBI raises concerns over non-transparency in digital transactions : The Reserve Bank of India (RBI) has raised concerns regarding non-transparency in transactions and violation of extant guidelines on outsourcing of financial services and Fair Practices Code vis-a-vis digital delivery in credit intermediation by banks and non-banking finance companies (NBFCs). In this regard, the RBI has directed banks and NBFCs that have engaged digital lending platforms as their agents to follow its instructions, including disclosing the names of the platforms engaged as agents on their websites, and ask the agents to disclose upfront to the customer the name of the bank/ NBFC on whose behalf they are interacting with him. - Business Line
🍒 RBI asks banks, NBFCs to disclose digital lending agents upfront : To make digital lending more transparent, the Reserve Bank on Wednesday directed banks, NBFCs and digital lending platforms to disclose full information upfront on their websites to customers. The direction comes against the backdrop of several complaints relating to exorbitant interest rates and harsh recovery measures, among others, against lending platforms. While the banks and non-banking finance companies (NBFCs) are being directed to disclose the names of agents engaged by on their websites, digital lending platforms have been asked to tell their customers upfront the names of the bank/ NBFC on whose behalf they are disbursing loans. "...outsourcing of any activity by banks/ NBFCs does not diminish their obligations, as the onus of compliance with regulatory instructions rests solely with them," the RBI said in a communication to the scheduled commercial banks and NBFCs. - economic times
🍒 GIC Q4 net profit surges to ₹1,197 crore : State-run GIC Re saw its net profit nearly double to ₹1,197.41 crore in the fourth quarter of 2019-20 as against ₹603.37 crore in the same period a year ago. In the January to March 2020 quarter, gross premium increased nearly 14 per cent to ₹9,217.84 crore as against ₹8,089.35 crore a year ago.GIC had an underwriting loss of ₹463.58 crore in the fourth quarter last fiscal versus an underwriting profit of ₹101.16 crore a year ago.However, in fiscal year 2019-20, it registered a net loss of ₹359.09 crore compared to a net profit of ₹2,224.31 crore in 2018-19. - Business Line
🍒 NBFC-MFIs to begin fresh lending only after expiry of moratorium : A majority of non-banking finance companies-microfinance institutions (NBFC-MFIs) are planning to resume fresh lending in September, while the weak liquidity situation may impede the lending capacity of small and medium firms, Microfinance Institutions Network (MFIN) said. At present, some of these lenders are lending to merely a small fraction of borrowers who have started paying back dues after a two-month pause. The industry body believes that about 60-70 percent MFIs would gear up only after the expiry of the Reserve Bank of India-guided moratorium of loan repayment. But the sector would take more time to restore normalcy. The total estimated collective disbursements by NBFC-MFIs up to September could merely be Rs 2,884 crore, Microfinance Institutions Network (MFIN) said in a report. This is significantly less than the average disbursements of around Rs 6,600 crore per month seen in FY20. “The weak liquidity situation of NBFC-MFIs has restricted their ability to disburse loans to their customers. The focus of the NBFC-MFIs would be to preserve liquidity but at the same time they will have to start re-lending in a gradual manner to their clients so that they are able to restart their livelihoods,” MFIN said, after doing a study on the impact of Covid relief measures. Around 45 MFIs out of 54 MFIN members have responded to the study, which has been reviewed by ET. - Economic times
🍒 Lenders prepare for rise in gold loan demand in FY21 : Demand for loans against gold is likely to increase this fiscal as easy approvals, surging value of gold and risk aversion by lenders push people to pledge their precious metal in exchange for cash. Lenders are already seeing an increase in demand for these loans and some have started new gold loan verticals with expectations that it will become the fastest growing segment this fiscal. "There is a new class of customers looking to generate cash by pledging gold because banks are now wary of extending unsecured loans like credit cards and personal loans because of the post Covid slowdown. Gold loans are a quick way for people to access cash when other avenues are not open," said CVR Rajendran, CEO at CSB Bank. - economic times
🍒 Short-term Covid-19 policy: Pricing, unpredictability key challenges for insurers : The decision of the insurance regulator to permit specific, short-term health insurance products for Covid-19 treatment is timely. It will go a long way in providing relief to scores of people who are now worried over the financial implications of the dreaded virus. The Insurance Regulatory and Development Authority of India (IRDAI) had on Tuesday framed guidelines for short-term health insurance products for Covid-19. According to the guidelines, insurers can now offer cover against Covid-19 for a minimum period of three months to a maximum of 11 months. Optional covers that enhance health insurance coverage are permitted to be offered for the same duration, but no separate add-ons are allowed. - Business Line
🍒 Govt to provide 2% interest subsidy to 'Shishu' borrowers under Mudra Yojna : The government on Wednesday decided to provide 2 per cent interest subvention to borrowers under the 'Shishu' category of the flagship Pradhan Mantri MUDRA Yojana (PMMY). Under the Shishu category, collateral free loans of up to ₹50,000 are given to beneficiaries. The Union Cabinet approved the scheme for interest subvention of 2 per cent to Shishu loan category borrowers under PMMY, outstanding as on March 31, 2020, for a period of 12 months to eligible borrowers, Information and Broadcasting Minister Prakash Javadekar said. - Live Mint
🍒 Banks look to raise funds as uncertainty prevails : Lenders are making a beeline to raise capital and prepare for adversities in a year of expected low credit growth amid the uncertainties over how the covid-19 situation will unfold and affect asset quality. Banks said they will raise capital by tapping the equity markets or through debt instruments. Private sector lender HDFC Bank said on 20 June that it has received board approval to raise up to ₹50,000 crore in the next 12 months by issuing debt securities, while State Bank of India (SBI) said on 16 June that it plans to raise ₹20,000 crore of equity capital in FY21. There is a surge in the number of banks and other financial institutions hitting the market for capital, but institutional investors are seeking additional safeguards, said a person, requesting anonymity. “There is a lot of uncertainty in the market and investors are willing to wait before committing funds. This will, however, not be a problem for large banks with better asset quality." - Live Mint.
🍒 HDFC Bank well placed to ride out Covid-19 storm: Aditya Puri : Aditya Puri, MD and CEO of HDFC Bank, believes the lender is well placed to ride out the Covid-19 storm and will continue to focus on priorities such as re-imagining the branch channel, increasing its semi-urban and rural footprint, payments business and digital transformation. It will also focus on virtual relationship management as well as its subsidiary businesses. “We intend to continue to innovate, adapt, and disrupt to remain trailblazers…We will continue to invest ahead in technology, computing and artificial intelligence to provide hyper-personalised offerings and experiences to our customers to become a digital first bank where every customer interaction at any touchpoint is intuitive, seamless, contextual and predictive,” Puri said in the bank’s Integrated Annual Report for 2019-20. - Business Line
🍒 Indiabulls Group's employees personal details leaked on the dark web: Cyble : Personal details of Indiabulls Group employees were leaked on the dark web on Wednesday by ransomware attackers, according to US-based cyber security firm Cyble. The leak follows the threat by Clop ransomware attackers who had threatened to release details on Tuesday if the group failed to make a payment within 24 hours.Contrary to the group’s claim on Tuesday, the data leaked on Wednesday consists of sensitive personal information like employee names, Aadhar cards, Pan Cards, phone numbers, passport, driving license and personal addresses. The documents have been reviewed by ET. - Economic Times
🍒 Navi launches lending app for instant personal loans : Sachin Bansal co-founded Navi has launched Navi Lending App for instant personal loans up to ₹5 lakh. “Aimed at Indians in the middle-income segment who are comfortable with smartphones and technology, the Navi app provides instant loans of up to ₹5 lakh with tenures of up to 36 months, via a completely digital and contactless process for customers,” the company said in a release on Wednesday. It is available for download on the Google Play store and customers can check their eligibility, select the loan and EMI amount, and enter their PAN and Aadhaar number to receive the loan amount in their bank account. The process is paperless and does not require uploading of any documents like pay slips or bank statements, it further said. - Business Line
🍒 Aye Finance raises ₹210 crore in Series E round led by CapitalG : aw participation from Aye’s existing investors LGT Lightstone, Falcon Edge Capital, A91 Partners and MAJ Invest. With this investment, Aye’s total equity funding since inception exceeds ₹690 crore, the company said in a statement. “Difficult times are a true test of a good lender and we have already started showing significant improvements in customer repayments in the past months. Our loans are underwritten with cluster insights and this continues to assure good repayment behaviour in our portfolio,” Sanjay Sharma, Managing Director at Aye Finance, said. - Business Line
🍒 Ability of DHFL to remain a ‘going concern’ depends on outcome of resolution process: Auditor : The ability of troubled Dewan Housing Finance Corporation (DHFL) to remain a ‘going concern’ will depend on the resolution process, its auditor has noted. It has also reported a mismatch of ₹3,018 crore and said the recoverability of inter-corporate deposits of over ₹3,786.24 crore is “yet to be ascertained”. These comments form part of the auditor’s note of the housing finance company’s results for the fourth quarter of FY20. The auditors – KK Mankeshwar and Co – have also flagged a fair value loss of ₹18,853.30 crore in the wholesale loan portfolio. “Out of this fair value, loss aggregating to ₹5,986.06 crore has been accounted up to December 31, 2019, and balance loss of ₹12,867.24 crore has been charged to the Statement of Profit and Loss for the quarter ended March 31, 2020,” it further said. - BusinessLine
🍒 After rating downgrade on bonds, Yes Bank assures it has adequate liquidity : A day after Icra and Care Ratings downgraded upper tier II bonds of Yes Bank to default, the lender said on Wednesday it has adequate liquidity to meet its obligations. “For Basel II, upper tier II bonds, the specific features of the instrument require debt servicing to be linked to the bank meeting regulatory norms on capital adequacy," Yes Bank said in a regulatory filing on Wednesday. - Live Mint
🍒 Nitin Gadkari launches scheme to provide Rs 20,000 crore guarantee cover to MSMEs : Union Minister Nitin Gadkari on Wednesday launched the Credit Guarantee Scheme for Sub-ordinate Debt to provide Rs 20,000 crore of guarantee cover to two lakh micro, small and medium enterprises. The funding scheme to help the distressed MSME sector entails a sub-debt facility to the promoters of those operational MSMEs that are distressed or non-performing assets (NPAs). It is also called the 'Distressed Assets Fund — Sub-ordinate Debt for MSMEs'. According to the scheme, the guarantee cover worth Rs 20,000 crore will be provided to the promoters who can take debt from the banks to further invest in their stressed MSME units as equity. - moneycontrol.com
🍒 Gold at fresh high, Axis Securities sees yellow metal at Rs 50,000/10 gm soon : Gold prices climbed Rs 455 to 48,575 per 10 gram to hit a fresh high in the Mumbai bullion market on the back of a weakening rupee versus the dollar and strong global cues. The precious metal jumped to an eight year high in the international market on rising coronavirus cases globally and expectation of further stimulus from global central banks. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,431, Rs 44,495 and Rs 48,575 plus 3 percent GST. Silver prices gained Rs 65 to Rs 48,505 per kg from its closing on June 23.
🍒 Markets updates: Sensex snaps 4-day winning run, plunges 561 points as financial stocks tank : Snapping its four-day rising streak, equity benchmark Sensex surrendered all early gains to plunge 561 points on Wednesday, tracking a sell-off in financial stocks and weak cues from global markets. The 30-share index settled 561.45 points, or 1.58 per cent, lower at 34,868.98. It hit an intra-day high of 35,706.55 and a low of 34,794.93.Similarly, the NSE Nifty fell 165.70 points, or 1.58 per cent, to 10,305.30. During the day, it touched a peak of 10,553.15 and a low of 10,281.95.IndusInd Bank was the top laggard in the Sensex pack, tanking over 7 per cent, followed by ICICI Bank, PowerGrid, Axis Bank, SBI and Bharti Airtel.On the other hand, Asian Paints, ITC, Nestle India and Reliance Industries were among the gainers.
🍒 Rupee settles 6 paise lower at 75.72 against US dollar : The rupee pared its early gains to settle down by 6 paise at 75.72 against the US currency due to concerns over fresh trade tensions between the EU and the US and rising COVID-19 cases. The rupee opened at 75.61 against the US dollar, but lost ground and closed at 75.72, registering a fall of 6 paise over its previous close. It had settled at 75.66 against the greenback on Tuesday.
🍒 Shares of Central Bank of India in Stock Market : 95% of moneycontrol users recommend buying Central Bank of India. In Bse, stocks quoted at Rs.17.44 against Prev Close Rs.17.38. In NSE, shares traded at Rs.17.40 against Prev Close Rs.17.40....
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