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☕ 26.07.2020: Today's Banking / Financial News at a Glance
🍒 No need to privatise PSBs, get govt share down to 26%: RBI Board member Satish Marathe : Public sector banks should not be privatised given the country’s developmental needs but the government can look at reducing its shareholding to 26 per cent by selling a larger portion of its stake to common Indians, RBI’s board member Satish Marathe said on Saturday. Marathe, who started out working in a state-run bank before getting associated with the cooperative banks sector, however, said that public sector banks need an overhaul of their systems, processes and staff attitudes to be relevant and effective in the future. He made the remarks during an online seminar held to commemorate the 51st anniversary of bank nationalisation. “Ownership of PSBs has to go to common people in a big way. Government shareholding should remain, I would say it should be above 26 per cent from where they (banks) get statutory provisions,” he said, adding that individual shareholding caps and other statutes will ensure that no single entity or group can exert excessive control at such lenders. He said unwinding the infrastructure created over the last 51 years will be a “greater loss” and pitched for changes in systems including giving shares to the top management to ensure it has a skin in the game. - financial express
🍒 Banks' gross NPA ratio may rise to 12.5% by March 2021, says RBI : Sounding alarm bells for the economy, the Reserve Bank of India (RBI) has said the problem of bad loans plaguing the Indian banking sector could worsen towards the end of the ongoing fiscal year. The central bank said the gross non-performing assets (GNPA) ratio of the country's scheduled commercial banks (SCBs) may increase from 8.5 percent in March 2020 to 12.5 percent by the same period next year, under the baseline scenario. This ratio could, however, soar to 14.7 percent under severe economic stress. In its Financial Stability Report, the RBI highlighted that the gross NPA ratio fell from 9.3 percent in September 2019 to 8.5 percent by the end of FY20. However, the COVID-19 pandemic and the economic and financial disruption that followed halted the slow improvement that had been achieved in reducing the overhang of stressed assets. "The regulatory dispensations that the pandemic has necessitated in terms of the moratorium on loan instalments and deferment of interest payments may have implications for the financial health of SCBs, going forward," the central bank noted. - Moneycontrol.com
🍒 Concentration of risk averse investors in debt mutual funds has created a logjam: RBI : The concentration of risk averse investors in debt mutual funds has narrowed the exit route and created the recent logjam in the industry. The RBI's Financial Stability Report released on Friday said corporate 'fleet footedness' in terms of exit can be diversified by ensuring that no single investor contributes a disproportionate share of investments to any scheme of an asset management company.Regulations specify single investor concentration norms for diversifying the investor base. However, when the investor profile is dominated by risk averse investors, as is the case in money market/ debt mutual funds, there is a strong possibility of a few corporates distributing their surplus over four/five fund houses and blocking exits during times of stress. The debt fund management industry is extremely competitive and portfolio performance plays an important role in incremental fund flows, said the report. Such behaviour typically masks the illiquidity premium as excess returns. - Business Line
🍒 Indian Bank trims interest rate on gold loans for farmers to seven per cent : Indian Bank has slashed its interest rate on gold loans offered to farmers to 7 per cent. The state-owned lender has reduced interest rate on its short-term gold loan scheme -- Bumper Agri Jewel. Earlier, interest rate on the product was 7.5 per cent.The reduction has been done considering the present pandemic situation and also to provide easy credit to the needy farmers at a cheaper cost, a release said.“With effect from July 22, 2020, Agricultural Jewel Loans are sanctioned at 7 per cent fixed which means it is only Rs 583 per lakh per month,” the bank said. Under this Bumper Agri Jewel loan scheme, the bank is giving 85 per cent of the ornament value as loan. The loan is repayable in six months. - economic times
🍒 ICICI Bank Q1: Sharp rise in Covid provisions lends comfort, but asset quality risk persists : For ICICI Bank that has been weighed down by asset quality woes in recent years, the steep rise in Covid related provisions in the June quarter and a steady addition to the bank’s BB and below rated loan book, indicates huge uncertainty around its asset quality and earnings in the coming quarters. Much like its peers, the bank made substantial Covid-related provisions in the March quarter. The spike in such provisions in the June quarter (unlike the trend seen in peers such as HDFC Bank and Axis Bank), though prudent, hints at likely more pain on the bank’s bad loan front. ICICI Bank made an additional provisioning to the tune of Rs 5,550 crore in the latest June quarter (after the sizeable Rs 2,725 crore in the March quarter), to cushion the impact of Covid-19. But despite the sharp rise in provisions, the bank managed to deliver 36 per cent growth in profit after tax in the June quarter, thanks to Rs 3,036 crore of profit on sale of some stake in its insurance subsidiaries --- ICICI Lombard General Insurance and ICICI Prudential Life Insurance. Lower tax also aided earnings. - Business Line
🍒 Bad loans to spike, banks may fall short of capital by March : The Reserve Bank of India has warned of a spike in bad loans and a decline in the capital-to-risk-weighted assets ratio (CRAR) for scheduled commercial banks (SCBs), which are bracing for the full impact of the Covid-19 pandemic, amid deterioration in the macroeconomic and financial environment. According to the Financial Stability Report (FSR), released by the RBI on Friday, the gross non-performing assets (GNPAs) of SCBs could spike to 12.5 per cent (under baseline scenario) and to 14.7 per cent (in a very severe stress scenario) of the gross advances by end-March 2021, from 8.5 per cent as of end-March 2020. Significantly, GNPAs of SCBs had declined to 8.5 per cent of gross advances as of March-end 2020 from 9.3 per cent as of September-end 2019. Simultaneously, the system-level CRAR is projected to drop from 14.6 per cent in March to 13.3 per cent in March 2021 under the baseline scenario and to 11.8 per cent under the very severe stress scenario. - Business Line
🍒 Banks need to raise and conserve capital in COVID time: Former RBI deputy governor : Commercial banks of the country are required to raise capital at this juncture even if it is not needed as the COVID-19 pandemic has made the future uncertain, former deputy governor of RBI N S Vishwanathan said. He said that raising resources at the moment is essential as it might not be available or become exorbitant when actually needed."Banks are required to raise capital at the moment. They need to raise and conserve capital. This is because when it is needed, capital may not be available or become highly expensive," Vishwanathan said while speaking at a webinar organised by Enqube Collaboration.According to him, both the government and RBI have announced a slew of measures to limit the debilitating effect of COVID-19. "However, the future is uncertain and the contraction of the economy is sure to happen," he said. - economic times
🍒 Audit firms examine NFRA order in ILFS case, to plan for future implications : National Financial Reporting Authority’s(NFRA) debarment of Deloitte’s Udayan Sen has sent alarm bells ringing across the audit firms currently under investigation by the regulator. The audit firms and their lawyers are currently poring over the detailed 88 page order to understand the regulator's observations and get a sense of which way the NFRA might swing in their case.The NFRA report has again put a spotlight on the confusion on what services can be provided by an auditor to its audit clients. Experts say that it's an old issue arising out of Section 144 of the Companies Act 2013 that says that ‘management services’ are not permitted to the auditors. - economic times
🍒 Sale of under-construction houses takes a hit : A nation-wide ebbing of consumer confidence has triggered a preference for purchase of completed houses, which has adversely affected the sale of under-construction houses, according to the Reserve Bank of India’s Financial Stability Report. As new house launches plunged, the stock of unsold houses shrank (to about 7.30 lakh units in the January to March quarter against about 7.80 lakh units in the preceding quarter) and the inventory overhang (average number of months required to sell a house) dropped. Under-construction projects constitute 70- 80 per cent of the unsold inventory. “House price growth remained contained in most cities in FY20. With the suspension of construction activities across the country from mid-March, completion of under-construction projects is likely to be delayed, constraining new demand,” the report said. - Business Line
🍒 Loan moratorium may have substantial impact on private NBFCs, HFCs: RBI ; The loan moratorium could have a significant impact on private non-banking finance companies and housing finance companies, the Reserve Bank of India has noted in its Financial Stability Report. “The impact of the moratorium on private NBFCs and HFCs can be substantial, with proportion of assets under the moratorium for NBFCs averaged between 39 per cent and 65 per cent based on underlying assets, with approximately 50 per cent of the aggregate assets under moratorium as on April-end,” the RBI report released on Friday noted. Based on the disclosures made by NBFCs and HFCs, the assets under moratorium are dominated by wholesale customers and real-estate developers, although retail portfolios in the micro-loans and auto loan segments have also been affected, the report further said, adding that access of NBFCs and HFCs to capital markets, both debt and equity, is of significant importance to the sector. - Business Line
🍒 Declining long-term market funding for NBFCs a concern, says RBI : The unfavorable market condition has resulted in declining share of long-term market debt in the liability profile of shadow banks, and the gap has been filled by bank funding. The declining market funding for non-banking financial companies (NBFCs) is a cause for concern as it has the potential to heighten the liquidity risks the sector is already facing after the IL&FS debacle, the Financial Stability Report (FSR) of the Reserve Bank of India (RBI) said. While market funding for the sector as a whole has reduced, the sufferers because of this have been smaller NBFCs. Smaller, mid-sized NBFCs, which are AA or below rated, as well as unrated entities have been shunned by the banks and markets, accentuating the liquidity tension faced by NBFCs, which was also reflected in the lacklusture response to targeted long-term repo operations (TLTRO 2.0). Only half of the money on offer by the RBI was taken by banks in the auction that was supposed to provide liquidity to NBFCs at cheaper rates. - Business Standard
🍒 Axis Bank hires i-banks for ₹12k crore share sale : Axis Bank Ltd has hired investment banks UBS, Credit Suisse and BNP Paribas and its in-house unit Axis Capital to manage its proposed share sale, which could see the private lender raise as much as ₹12,000 crore, three people aware of the development said. The proposed share sale is likely to be launched as early as next month, they said, requesting anonymity. “Capital will be raised through a mix of private equity investors and capital markets investors. It could either be through a mix of preferential allotment to PE funds and a qualified institutional placement (QIP) or it will just be a QIP," one of the three people said, requesting anonymity. UBS, Credit Suisse and BNP declined to comment. An email sent to Axis Bank didn’t elicit a response. - Live Mint
🍒 Focus is on long-term stability, says RBI governor Sha ktikanta Das : India’s financial system remains strong but extreme risk aversion could turn out to be counterproductive in the current scenario, Reserve Bank of India (RBI) governor Shaktikanta Das said. In his foreword to the central bank’s bi-annual Financial Stability Report (FSR) released on Friday, Das said financial intermediaries like banks and other financial institutions should augment capital and improve resilience as a top priority.Preserving long-term financial stability is critical to ensure recovery from the pandemic, Das said, adding that post-pandemic, the focus would be on “calibrated unwinding of regulatory and other dispensations". “Financial sector stability is a prerequisite for giving confidence to businesses, investors and consumers. We need to remain extremely watchful and focused," Das said in the foreword. - Live Mint
🍒 PM Modi reviews micro credit scheme for street vendors : Prime Minister Narendra Modi on Saturday reviewed the implementation of a special micro-credit facility for street vendors, stressing that it should not be seen from the perspective of extending loans to them but as part of an outreach for their holistic development and economic uplift. The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) aims at facilitating a collateral free working capital loan of up to Rs 10,000 of one-year tenure, to help street vendors resume their businesses post lockdown. Prime Minister Narendra Modi on Saturday reviewed the implementation of a special micro-credit facility for street vendors, stressing that it should not be seen from the perspective of extending loans to them but as part of an outreach for their holistic development and economic uplift. The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) aims at facilitating a collateral free working capital loan of up to Rs 10,000 of one-year tenure, to help street vendors resume their businesses post lockdown. - Financial Express
🍒 Cost of borrowing lowest in a decade as liquidity remains abundant : The cost of borrowing for Indian companies through the financial markets have never been so cheap in the last 10 years, the Reserve Bank of India (RBI) said in its Financial Stability Report (FSR) on Friday. “Borrowing costs in financial markets have dropped to their lowest in a decade on the back of abundant liquidity," it said.Interest rates on three-month commercial papers or CPs for non-banking financial companies (NBFCs), three-month CPs (non-NBFC) and three-month certificate of deposit (CD) have softened by around 320 basis points (bps), 365 bps and 472 bps, respectively between 23 March and 30 June. One basis point is one-hundredth of a percentage point. “The spread of three-year AAA-rated corporate bond over similar tenor government securities has decreased from 320 bps on 26 March 2020 to 114 bps on 26 June 2020 for NBFCs. Lower borrowing costs, coupled with deployment of TLTRO funds, have led to record primary issuance of corporate bonds of ₹2.09 trillion in the first quarter of 2020-21," it said. - Live Mint.
Have a Good day..
☕ 26.07.2020: Today's Banking / Financial News at a Glance
🍒 No need to privatise PSBs, get govt share down to 26%: RBI Board member Satish Marathe : Public sector banks should not be privatised given the country’s developmental needs but the government can look at reducing its shareholding to 26 per cent by selling a larger portion of its stake to common Indians, RBI’s board member Satish Marathe said on Saturday. Marathe, who started out working in a state-run bank before getting associated with the cooperative banks sector, however, said that public sector banks need an overhaul of their systems, processes and staff attitudes to be relevant and effective in the future. He made the remarks during an online seminar held to commemorate the 51st anniversary of bank nationalisation. “Ownership of PSBs has to go to common people in a big way. Government shareholding should remain, I would say it should be above 26 per cent from where they (banks) get statutory provisions,” he said, adding that individual shareholding caps and other statutes will ensure that no single entity or group can exert excessive control at such lenders. He said unwinding the infrastructure created over the last 51 years will be a “greater loss” and pitched for changes in systems including giving shares to the top management to ensure it has a skin in the game. - financial express
🍒 Banks' gross NPA ratio may rise to 12.5% by March 2021, says RBI : Sounding alarm bells for the economy, the Reserve Bank of India (RBI) has said the problem of bad loans plaguing the Indian banking sector could worsen towards the end of the ongoing fiscal year. The central bank said the gross non-performing assets (GNPA) ratio of the country's scheduled commercial banks (SCBs) may increase from 8.5 percent in March 2020 to 12.5 percent by the same period next year, under the baseline scenario. This ratio could, however, soar to 14.7 percent under severe economic stress. In its Financial Stability Report, the RBI highlighted that the gross NPA ratio fell from 9.3 percent in September 2019 to 8.5 percent by the end of FY20. However, the COVID-19 pandemic and the economic and financial disruption that followed halted the slow improvement that had been achieved in reducing the overhang of stressed assets. "The regulatory dispensations that the pandemic has necessitated in terms of the moratorium on loan instalments and deferment of interest payments may have implications for the financial health of SCBs, going forward," the central bank noted. - Moneycontrol.com
🍒 Concentration of risk averse investors in debt mutual funds has created a logjam: RBI : The concentration of risk averse investors in debt mutual funds has narrowed the exit route and created the recent logjam in the industry. The RBI's Financial Stability Report released on Friday said corporate 'fleet footedness' in terms of exit can be diversified by ensuring that no single investor contributes a disproportionate share of investments to any scheme of an asset management company.Regulations specify single investor concentration norms for diversifying the investor base. However, when the investor profile is dominated by risk averse investors, as is the case in money market/ debt mutual funds, there is a strong possibility of a few corporates distributing their surplus over four/five fund houses and blocking exits during times of stress. The debt fund management industry is extremely competitive and portfolio performance plays an important role in incremental fund flows, said the report. Such behaviour typically masks the illiquidity premium as excess returns. - Business Line
🍒 Indian Bank trims interest rate on gold loans for farmers to seven per cent : Indian Bank has slashed its interest rate on gold loans offered to farmers to 7 per cent. The state-owned lender has reduced interest rate on its short-term gold loan scheme -- Bumper Agri Jewel. Earlier, interest rate on the product was 7.5 per cent.The reduction has been done considering the present pandemic situation and also to provide easy credit to the needy farmers at a cheaper cost, a release said.“With effect from July 22, 2020, Agricultural Jewel Loans are sanctioned at 7 per cent fixed which means it is only Rs 583 per lakh per month,” the bank said. Under this Bumper Agri Jewel loan scheme, the bank is giving 85 per cent of the ornament value as loan. The loan is repayable in six months. - economic times
🍒 ICICI Bank Q1: Sharp rise in Covid provisions lends comfort, but asset quality risk persists : For ICICI Bank that has been weighed down by asset quality woes in recent years, the steep rise in Covid related provisions in the June quarter and a steady addition to the bank’s BB and below rated loan book, indicates huge uncertainty around its asset quality and earnings in the coming quarters. Much like its peers, the bank made substantial Covid-related provisions in the March quarter. The spike in such provisions in the June quarter (unlike the trend seen in peers such as HDFC Bank and Axis Bank), though prudent, hints at likely more pain on the bank’s bad loan front. ICICI Bank made an additional provisioning to the tune of Rs 5,550 crore in the latest June quarter (after the sizeable Rs 2,725 crore in the March quarter), to cushion the impact of Covid-19. But despite the sharp rise in provisions, the bank managed to deliver 36 per cent growth in profit after tax in the June quarter, thanks to Rs 3,036 crore of profit on sale of some stake in its insurance subsidiaries --- ICICI Lombard General Insurance and ICICI Prudential Life Insurance. Lower tax also aided earnings. - Business Line
🍒 Bad loans to spike, banks may fall short of capital by March : The Reserve Bank of India has warned of a spike in bad loans and a decline in the capital-to-risk-weighted assets ratio (CRAR) for scheduled commercial banks (SCBs), which are bracing for the full impact of the Covid-19 pandemic, amid deterioration in the macroeconomic and financial environment. According to the Financial Stability Report (FSR), released by the RBI on Friday, the gross non-performing assets (GNPAs) of SCBs could spike to 12.5 per cent (under baseline scenario) and to 14.7 per cent (in a very severe stress scenario) of the gross advances by end-March 2021, from 8.5 per cent as of end-March 2020. Significantly, GNPAs of SCBs had declined to 8.5 per cent of gross advances as of March-end 2020 from 9.3 per cent as of September-end 2019. Simultaneously, the system-level CRAR is projected to drop from 14.6 per cent in March to 13.3 per cent in March 2021 under the baseline scenario and to 11.8 per cent under the very severe stress scenario. - Business Line
🍒 Banks need to raise and conserve capital in COVID time: Former RBI deputy governor : Commercial banks of the country are required to raise capital at this juncture even if it is not needed as the COVID-19 pandemic has made the future uncertain, former deputy governor of RBI N S Vishwanathan said. He said that raising resources at the moment is essential as it might not be available or become exorbitant when actually needed."Banks are required to raise capital at the moment. They need to raise and conserve capital. This is because when it is needed, capital may not be available or become highly expensive," Vishwanathan said while speaking at a webinar organised by Enqube Collaboration.According to him, both the government and RBI have announced a slew of measures to limit the debilitating effect of COVID-19. "However, the future is uncertain and the contraction of the economy is sure to happen," he said. - economic times
🍒 Audit firms examine NFRA order in ILFS case, to plan for future implications : National Financial Reporting Authority’s(NFRA) debarment of Deloitte’s Udayan Sen has sent alarm bells ringing across the audit firms currently under investigation by the regulator. The audit firms and their lawyers are currently poring over the detailed 88 page order to understand the regulator's observations and get a sense of which way the NFRA might swing in their case.The NFRA report has again put a spotlight on the confusion on what services can be provided by an auditor to its audit clients. Experts say that it's an old issue arising out of Section 144 of the Companies Act 2013 that says that ‘management services’ are not permitted to the auditors. - economic times
🍒 Sale of under-construction houses takes a hit : A nation-wide ebbing of consumer confidence has triggered a preference for purchase of completed houses, which has adversely affected the sale of under-construction houses, according to the Reserve Bank of India’s Financial Stability Report. As new house launches plunged, the stock of unsold houses shrank (to about 7.30 lakh units in the January to March quarter against about 7.80 lakh units in the preceding quarter) and the inventory overhang (average number of months required to sell a house) dropped. Under-construction projects constitute 70- 80 per cent of the unsold inventory. “House price growth remained contained in most cities in FY20. With the suspension of construction activities across the country from mid-March, completion of under-construction projects is likely to be delayed, constraining new demand,” the report said. - Business Line
🍒 Loan moratorium may have substantial impact on private NBFCs, HFCs: RBI ; The loan moratorium could have a significant impact on private non-banking finance companies and housing finance companies, the Reserve Bank of India has noted in its Financial Stability Report. “The impact of the moratorium on private NBFCs and HFCs can be substantial, with proportion of assets under the moratorium for NBFCs averaged between 39 per cent and 65 per cent based on underlying assets, with approximately 50 per cent of the aggregate assets under moratorium as on April-end,” the RBI report released on Friday noted. Based on the disclosures made by NBFCs and HFCs, the assets under moratorium are dominated by wholesale customers and real-estate developers, although retail portfolios in the micro-loans and auto loan segments have also been affected, the report further said, adding that access of NBFCs and HFCs to capital markets, both debt and equity, is of significant importance to the sector. - Business Line
🍒 Declining long-term market funding for NBFCs a concern, says RBI : The unfavorable market condition has resulted in declining share of long-term market debt in the liability profile of shadow banks, and the gap has been filled by bank funding. The declining market funding for non-banking financial companies (NBFCs) is a cause for concern as it has the potential to heighten the liquidity risks the sector is already facing after the IL&FS debacle, the Financial Stability Report (FSR) of the Reserve Bank of India (RBI) said. While market funding for the sector as a whole has reduced, the sufferers because of this have been smaller NBFCs. Smaller, mid-sized NBFCs, which are AA or below rated, as well as unrated entities have been shunned by the banks and markets, accentuating the liquidity tension faced by NBFCs, which was also reflected in the lacklusture response to targeted long-term repo operations (TLTRO 2.0). Only half of the money on offer by the RBI was taken by banks in the auction that was supposed to provide liquidity to NBFCs at cheaper rates. - Business Standard
🍒 Axis Bank hires i-banks for ₹12k crore share sale : Axis Bank Ltd has hired investment banks UBS, Credit Suisse and BNP Paribas and its in-house unit Axis Capital to manage its proposed share sale, which could see the private lender raise as much as ₹12,000 crore, three people aware of the development said. The proposed share sale is likely to be launched as early as next month, they said, requesting anonymity. “Capital will be raised through a mix of private equity investors and capital markets investors. It could either be through a mix of preferential allotment to PE funds and a qualified institutional placement (QIP) or it will just be a QIP," one of the three people said, requesting anonymity. UBS, Credit Suisse and BNP declined to comment. An email sent to Axis Bank didn’t elicit a response. - Live Mint
🍒 Focus is on long-term stability, says RBI governor Sha ktikanta Das : India’s financial system remains strong but extreme risk aversion could turn out to be counterproductive in the current scenario, Reserve Bank of India (RBI) governor Shaktikanta Das said. In his foreword to the central bank’s bi-annual Financial Stability Report (FSR) released on Friday, Das said financial intermediaries like banks and other financial institutions should augment capital and improve resilience as a top priority.Preserving long-term financial stability is critical to ensure recovery from the pandemic, Das said, adding that post-pandemic, the focus would be on “calibrated unwinding of regulatory and other dispensations". “Financial sector stability is a prerequisite for giving confidence to businesses, investors and consumers. We need to remain extremely watchful and focused," Das said in the foreword. - Live Mint
🍒 PM Modi reviews micro credit scheme for street vendors : Prime Minister Narendra Modi on Saturday reviewed the implementation of a special micro-credit facility for street vendors, stressing that it should not be seen from the perspective of extending loans to them but as part of an outreach for their holistic development and economic uplift. The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) aims at facilitating a collateral free working capital loan of up to Rs 10,000 of one-year tenure, to help street vendors resume their businesses post lockdown. Prime Minister Narendra Modi on Saturday reviewed the implementation of a special micro-credit facility for street vendors, stressing that it should not be seen from the perspective of extending loans to them but as part of an outreach for their holistic development and economic uplift. The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) aims at facilitating a collateral free working capital loan of up to Rs 10,000 of one-year tenure, to help street vendors resume their businesses post lockdown. - Financial Express
🍒 Cost of borrowing lowest in a decade as liquidity remains abundant : The cost of borrowing for Indian companies through the financial markets have never been so cheap in the last 10 years, the Reserve Bank of India (RBI) said in its Financial Stability Report (FSR) on Friday. “Borrowing costs in financial markets have dropped to their lowest in a decade on the back of abundant liquidity," it said.Interest rates on three-month commercial papers or CPs for non-banking financial companies (NBFCs), three-month CPs (non-NBFC) and three-month certificate of deposit (CD) have softened by around 320 basis points (bps), 365 bps and 472 bps, respectively between 23 March and 30 June. One basis point is one-hundredth of a percentage point. “The spread of three-year AAA-rated corporate bond over similar tenor government securities has decreased from 320 bps on 26 March 2020 to 114 bps on 26 June 2020 for NBFCs. Lower borrowing costs, coupled with deployment of TLTRO funds, have led to record primary issuance of corporate bonds of ₹2.09 trillion in the first quarter of 2020-21," it said. - Live Mint.
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