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☕ 03.07.2020: Today's Banking / Financial News at a Glance
🍒 Bank credit grows 6.18%, deposits 11%: RBI data : Bank credit and deposits grew 6.18 per cent and 11 per cent to Rs 102.45 lakh crore and Rs 138.67 lakh crore, respectively, in the fortnight ended June 19, according to the RBI. In the fortnight ended June 21, 2019, bank credit had stood at Rs 96.48 lakh crore and deposits at Rs 124.92 lakh crore. In the previous fortnight that ended on June 5 this year, advances had grown 6.24 per cent and deposits by 11.28 per cent.Rating agency Crisil in a recent report said bank credit growth is likely to nosedive to a multi-decadal low of 0-1 per cent in 2020-21 as economic activity is sharply impacted by the COVID-19 pandemic.For May, the non-food credit growth decelerated to 6.8 per cent year-on-year from 11.4 per cent in the corresponding period of the previous year, RBI data had shown.The outstanding incremental non-food credit stood at Rs 90.3 lakh crore as of May 22, 2020, against Rs 84.51 lakh crore on May 24, 2019.Bank loan growth to industry decelerated to 1.7 per cent in May from 6.4 per cent in the corresponding month last year.Loan growth to the services sector slowed down to 11.2 per cent in May, compared with 14.8 per cent a year ago. Personal loans growth decelerated to 10.6 per cent in May 2020, against 16.9 per cent in May 2019, RBI data showed. - economic times
🍒 RBI asks banks to reclassify MSMEs as per revised criteria : The RBI has asked banks, financial institutions and NBFCs to reclassify micro, small and medium enterprises on the basis of the new criteria. Last month, the government notified new criteria for classification of micro, small and medium enterprises (MSMEs) on the basis of turnover and investment in plant and machinery. "We advise you to initiate necessary action for reclassification of enterprises as per the new definition w.e.f July 1, 2020 and issue necessary instructions to your branches/controlling offices in this regard, at the earliest,” RBI said in a communication to banks, financial institutions and non banking financial companies (NBFCs). - Moneycontrol.com
🍒 Banking Act amendment is credit positive for depositors, says Moody's : The Indian government's amendment to the Banking Regulation Act, which allows the Reserve Bank of India (RBI) to initiate resolution of a weak bank by reconstructing its capital or merging it with another bank without putting it under moratorium is credit positive for the country's depositors, rating agency Moody's said in a report. Before the amendment, banks which were on the brink of collapse had to be compulsorily be put under moratorium with restrictions on both its depositors and creditors.Yes Bank was the latest to be put under moratorium on March 5 after it failed to raise capital in time. Depositors could not withdraw more than Rs 50,000 from their accounts. Also, electronic transactions to and from Yes Bank accounts were frozen, causing some borrowers to miss their monthly payments.Moody's said the new amendments will help depositor confidence. "The amended resolution process is credit positive because it will help preserve depositor confidence and avoid deposit flight from a weak bank as the risk of a moratorium is reduced. The amendments are also credit positive for the bank's depositors and creditors because their ability to obtain full and timely repayments during the resolution process are unaffected," the rating agency said.- economic times
🍒 HDFC Bank launches instant auto loan product : HDFC Bank on Thursday announced its plans to offer instant auto loans called ZipDrive to its customers in 1,000 cities. “The offering is now being extended to Tier 2 and 3 cities, such as Bhimavaram in Andhra Pradesh, Hardoi in Uttar Pradesh, Thalassery in Kerala, and Balasore in Odisha among other places, across India,” the bank said in a release. The move comes amidst demand for entry-level cars as people try to avoid public transport. Under the scheme, HDFC Bank customers are given pre-approved loan offers using the bank’s proprietary algorithm and analytics. Customers can select car model, dealer, loan amount within eligible limits and tenure online, the lender said, adding that they can also opt for on-road funding as much as 100 per cent of the value. - Business Line
🍒 Bribery case: Yes Bank founder Rana Kapoor gets interim protection till July 11 : A special court here on Thursday granted interim protection from arrest till July 11 to Yes Bank founder Rana Kapoor in a case registered against him by the CBI for allegedly obtaining illegal gratification from a realty firm. He was booked by the central investigating agency in March this year for allegedly obtaining Rs 307 crore bribe in the purchase of a Lutyen’s zone bungalow in New Delhi from Avantha Group to go easy on around Rs 1,900 crore bank loans to the seller’s group companies. Kapoor had moved an anticipatory bail application before a special CBI court here. He was granted interim protection from arrest till July 11 as the central probe agency was yet to file its reply in the matter, his lawyer said. The CBI is also probing Kapoor in connection with the alleged scam at the Yes Bank. Kapoor is currently lodged in jail after being arrested by the Enforcement Directorate (ED) in a case related to Yes Bank. - Financial Express
🍒 Kotak Mahindra Bank, Innoviti tie up to offer EMIs : Kotak Mahindra Bank and Innoviti Payment Solutions on Thursday announced that they have collaborated to offer equated monthly instalments (EMI) billing options on Kotak debit cards swiped on Innoviti POS terminals. The facility will allow over 1 crore Kotak customers to pay for their purchases in instalments by using the EMIs on debit cards facility at over 70,000 Innoviti POS terminals across more than 1,000 cities. “Importantly, with over half of Innoviti’s POS terminals installed in 350 smaller cities and towns in India with a population of less than 20 lakh, this arrangement will help consumers particularly in tier 2 and 3 cities access credit conveniently through their Kotak debit cards,” Kotak Mahindra Bank said in a statement.- Business Line
🍒 Credit to MSMEs shrinks up to 7.6% between March & May : Credit to micro, small and medium enterprises (MSMEs) shrank up to 7.6% between March and May 2020 as the rapid rise in the number of Covid-positive cases and the lockdown brought economic activity to a halt. Loans outstanding to individuals fell 3% during the same period as consumption took a hit, showed data released by the Reserve Bank of India (RBI). In the same period a year ago, credit outstanding to MSMEs had fallen up to 2.7% and that to retail had grown 0.9%. Loans to micro and small units shrunk the most, with the total amount outstanding in this segment falling to Rs 3.53 lakh crore on May 22 from Rs 3.82 lakh crore as on March 27. - Financial Express
🍒 Axis Bank to raise ₹15,000 crore as capital : Private sector lender Axis Bank will raise ₹15,000 crore as capital through various instruments. The decision was taken at a meeting of the bank’s board of directors on Thursday. “The board, at its meeting held today, has approved the proposal relating to raising of funds not exceeding ₹15,000 crore through issue of equity shares, depository receipts and, or any other instruments or securities representing either equity shares and, or convertible securities linked to equity shares, including through Qualified Institution Placement, American Depository Receipts, Global Depository Receipts programme, preferential allotment or such other permissible mode or combinations…,” it said in a regulatory filing after the meeting. The bank’s board had, in April, approved a proposal to raise up to ₹35,000 crore. - Business Line
🍒 Axis Bank to shut down UK operations : Axis Bank has decided to shut down operations in the United Kingdom as part of its plans to focus on the Indian market. In a statement issued to the stock exchanges, the bank said that it has been reviewing its international strategy and, as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there. “ In line with the said objective, the bank has taken a decision to fully wind down and close the operations of Axis Bank UK Limited, a subsidiary of the bank, and surrender the banking licence by the end of April 2021,” the bank said in a statement. - Business Line
🍒 OMO purchase of G-Secs: RBI received bids amounting to seven times the notified amount of ₹10,000 crore : The Reserve Bank of India (RBI), on Thursday, received bids amounting to seven times the notified amount of ₹10,000 crore at the open market operation (OMO) purchase of four government securities (G-Secs). Simultaneously, the central bank received bids aggregating three times the notified amount of ₹10,000 crore at the OMO sale of four Treasury bills. - Business Line
🍒 Chinese banks go slow on large loans : Top Chinese banks in India, Industrial and Commercial Bank of China (ICBC) and the China Development Bank (CDB), have considerably slowed their large-ticket term-loan advances in the country after bad loans surged in their portfolios that had included advances to the subsequently distressed companies such as IL&FS Transportation and Aircel. So, these global financial powerhouses have since changed their strategy and are now largely engaged in bill discounting and bond investments after having to stomach brutal haircuts on exposures to Reliance Communications, IL&FS Transportation, Aircel and its subsidiary Dishnet Wireless, and Alok Industries.Data with the central bank showed that ICBC is steadily moving away from term loans. Charge filings with the Ministry of Corporate Affairs, compiled by data intelligence provider Propstack, show that ICBC and CDB have not disbursed any large-ticket term loan in India since 2018. - economic times
🍒 Only 25 percent of NBFCs sought moratorium, says CARE study : They made headlines nationally that high-street lenders were not giving them the benefit of the repayments standstill. But in reality, just about a fourth of the 96 non-bank lenders analysed by CARE Ratings approached the banks for a moratorium. More than four-fifths of the housing finance companies (HFCs) did not approach lenders for this relief. But more than 70% MFIs — and about a quarter of the realty-focused wholesale and retail NBFCs — sought relief, the research showed. “HFCs are supported by relatively robust collections. Under moratorium also, many small and mid-sized HFCs are highly capitalised with high liquidity buffers, aiding them in the current scenario,” said the report. “The majority of microfinance companies have approached their lenders for relief given the meagre collections.” The banking regulator has allowed all lending institutions to allow a moratorium of six months on payments of instalments in respect of all term loans. - economic times
🍒 HFCs better placed than other NBFCs in terms of asset quality: Report : Housing finance companies or HFCs are better placed in terms of asset quality than other NBFCs as their NPAs would be far less than other NBFCs in FY'21 following the economic impact on account of the nation-wide lockdown, post COVID-19 pandemic. Also HFCs have much fewer assets under moratorium, according to a report by ratings firm Icra. HFCs could see non-performing assets (NPAs) sore to 3.4-4.8 per cent by March'21. But other NBFCs asset quality is likely to be more impacted than FCs, with the segmental NPA touching 7.0-9.5% by March 2021, Icra said. “Portfolio under moratorium for some large NBFCs is as high as 70- 80%, with the sectoral average of about 52%, while for HFCs the average is about 28% " said A M Karthik, Vice President and Sector Head, Financial Sector Ratings ICRA "The additional covid-19 -related provision carried by NBFCs is about 0.7% (of the AUM), while for HFCs is about 0.2%." - economic times
🍒 Niti Aayog plans to hire chief economist : Niti Aayog is planning to hire a chief economist at the think-tank under its flexi pool and has sought applications for the coveted post to be responsible for scrutiny of all finance ministry related matters and those of other financial institutions including the Reserve Bank of India. India already has a post of chief economic advisor under the finance ministry and another Bibek Debroy-led Economic Advisory Council to the PM is headquartered at the Aayog itself.The post could be filled either through a contract or on deputation and will attract remuneration of up to Rs 3,30,000 a month. The appointment would initially be up to three years, and can be extended up to 5 years, depending on the requirements or till the age of 60 years, whichever is earlier. “NITI Aayog is looking for an experienced, talented, innovative, and dynamic professional who desires to be a part of the team that is scripting the exciting transformation story which is unfolding in India today,” it has said in its post. - economic times
🍒 UPI payments hit all-time high of 1.34 bn transactions in June : Payments on Unified Payments Interface (UPI) in June hit an all-time high of 1.34 billion in terms of volume with transactions worth nearly Rs 2.62 lakh crore, as per National Payments Corporation of India (NPCI) data. On a month-on-month basis it registered a 8.94 per cent growth from 1.23 billion in May.UPI payments had fell to 999.57 million in terms of volume with transactions worth Rs 1.51 lakh crore in April, following the coronavirus-induced lockdown that halted almost all services, except essentials.Online payments slowly gathered pace from May, with staggered opening of the economy. In May, the number of UPI transactions stood at 1.23 billion valued at Rs 2.18 lakh crore, showed the NPCI data.In June, the volume in terms of transactions touched the highest level so far, as per the data available, with the first set of data dating back to April 2016 -- with nil transaction. - economic times
🍒 Axis Bank to wind down UK subsidiary : Axis Bank on Thursday said it has decided to wind down its UK subsidiary and the move will not have any material impact on its financial position. The lender has been reviewing its international strategy and as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there, it said in a regulatory filing. "In line with the said objective, the bank has taken a decision to fully wind down and close the operations of Axis Bank UK Ltd, a subsidiary of the bank and targeting for surrendering of the banking licence by end of April 2021, which has been reviewed with the UK regulators viz. both the Prudential Regulation Authority and the Financial Conduct Authority," it said. - economic times
🍒 Ex-ICICI Bank executive Murali Ramakrishnan likely to be named as CEO of South Indian Bank : Days after the announcement of ex-Axis Bank ED Pralay Mondal joining Thrissur-headquartered CSB Bank ( formerly Catholic Syrian Bank), another top level rejig is on the cards in Kerala’s banking capital. Murali Ramakrishnan , a former senior executive at ICICI Bank, who was the chief executive of the private sector lender’s operations in North Asia, Middle East, Sri Lanka & Africa , has emerged as a front-runner to become the next Managing Director & Chief Executive Officer of South Indian Bank (SIB), sources told Moneycontrol. - Moneycontrol.com
🍒 Release Sishu loan interest subvention amounts to borrowers, SIDBI tells banks : The Small Industries Development Bank of India (SIDBI) has asked banks and other member lending institutions (MLIs) to ensure release of interest subvention amounts to the borrowers. All MLIs should also inform their borrowers about the interest subvention scheme and its benefits, it said in a circular.The Centre had earlier announced interest subvention of 2 per cent for a period of 12 months as part of the ‘Atmanirbhar Bharat Abhiyan’ economic relief package in wake of the Covid-19 pandemic. The Department of Financial Services, Ministry of Finance, has designated SIDBI as the Nodal Agency for implementation of the scheme. - Business Line
🍒 Pandemic, loan moratorium hits third-party recovery agencies : The Reserve Bank of India’s (RBI) relief on loan repayments might have helped a lot of borrowers during the coronavirus outbreak, but the moratorium, coupled with banks going slow on recoveries has hit the business of third-party recovery agencies. These businesses solely depend on lenders for recovery assignments. These agencies are engaged by both banks and non-bank financiers to recover loans from delinquent borrowers. Four agencies, which Mint spoke to said, as banks have stopped giving any business since the lockdown began, their revenues have dropped more than 90%. - Live Mint
🍒 Corona Impact: Worried bankers want to function at 50% strength : A steady rise in the number of bankers becoming infected with Covid-19 and nearly 25 deaths is worrying the banking community. All India Bank Employees’ Association (AIBEA) has written to the chief secretary of Maharashtra, and Indian Banks’ Association (IBA) to allow banks to function at 50% strength. The letter says: “The state level bankers’ committee (SLBC) Maharashtra has issued their compunction that banks should functional normally and with 100% of the staff. Requiring 100% of staff to attend is neither a physical possibility nor it is advisable given the SOP on social distancing requirements, etc.” - Financial Express
🍒 CBI books GVK Group chief, others for siphoning off ₹705 cr from MIAL : The CBI has booked Venkata Krishna Reddy Gunupati, the chairman of the GVK Group of Companies and his son G V Sanjay Reddy, Managing Director of Mumbai International Airport Ltd among others for alleged irregularities to the tune of ₹705 crore in running of the airport, officials said on Wednesday. Airport Authority of India Ltd had formed a Joint venture with GVK Airports Holdings Limited, promoted by GVK group under public-private partnership firm Mumbai International Airport Ltd for upgradation and maintenance of Mumbai Airport. - Business Line
🍒 Gold price slump to Rs 48,886 per 10 gram, silver down Rs 1,075 per kg : Gold prices declined Rs 578 to Rs 48,886 per 10 gram in the Mumbai bullion market on rupee appreciation versus the dollar and rally in equity markets. Globally too, the rally has lost steam and failed to sustain above the $1,800/oz level. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,231, Rs 44,250 and Rs 48,308 plus 3 percent GST, respectively. Silver prices declined Rs 1,075 to Rs 48,580 per kg from its closing on July 1.
🍒 Rupee jumps 56 paise to settle at 75.04 against US dollar : The rupee appreciated 56 paise to settle at 75.04 (provisional) against the US dollar on Thursday tracking weakness in the greenback and gains in the domestic equity market. The rupee opened at 75.51 against the US dollar, gained further ground and finally closed for the day at 75.04 against the US dollar, up 56 paise over its previous close.
🍒 Sensex rallies 429 points; Nifty tops 10,550 level : Equity benchmark BSE Sensex rallied 429 points on Thursday on widespread buying amid a broad upmove in global markets following encouraging Covid-19 vaccine trials. After soaring 600 points during the session, the 30-share index settled 429.25 points, or 1.21 per cent, higher at 35,843.70.The NSE Nifty surged 121.65 points, or 1.17 per cent, to close at 10,551.70. M&M was the top gainer in the Sensex pack, jumping around 6 per cent, followed by Titan, HCL Tech, Tata Steel, Infosys and TCS. On the other hand, Axis Bank, HUL, Kotak Bank and Bharti Airtel were among the laggards.
I
… Have a Good day..
☕ 03.07.2020: Today's Banking / Financial News at a Glance
🍒 Bank credit grows 6.18%, deposits 11%: RBI data : Bank credit and deposits grew 6.18 per cent and 11 per cent to Rs 102.45 lakh crore and Rs 138.67 lakh crore, respectively, in the fortnight ended June 19, according to the RBI. In the fortnight ended June 21, 2019, bank credit had stood at Rs 96.48 lakh crore and deposits at Rs 124.92 lakh crore. In the previous fortnight that ended on June 5 this year, advances had grown 6.24 per cent and deposits by 11.28 per cent.Rating agency Crisil in a recent report said bank credit growth is likely to nosedive to a multi-decadal low of 0-1 per cent in 2020-21 as economic activity is sharply impacted by the COVID-19 pandemic.For May, the non-food credit growth decelerated to 6.8 per cent year-on-year from 11.4 per cent in the corresponding period of the previous year, RBI data had shown.The outstanding incremental non-food credit stood at Rs 90.3 lakh crore as of May 22, 2020, against Rs 84.51 lakh crore on May 24, 2019.Bank loan growth to industry decelerated to 1.7 per cent in May from 6.4 per cent in the corresponding month last year.Loan growth to the services sector slowed down to 11.2 per cent in May, compared with 14.8 per cent a year ago. Personal loans growth decelerated to 10.6 per cent in May 2020, against 16.9 per cent in May 2019, RBI data showed. - economic times
🍒 RBI asks banks to reclassify MSMEs as per revised criteria : The RBI has asked banks, financial institutions and NBFCs to reclassify micro, small and medium enterprises on the basis of the new criteria. Last month, the government notified new criteria for classification of micro, small and medium enterprises (MSMEs) on the basis of turnover and investment in plant and machinery. "We advise you to initiate necessary action for reclassification of enterprises as per the new definition w.e.f July 1, 2020 and issue necessary instructions to your branches/controlling offices in this regard, at the earliest,” RBI said in a communication to banks, financial institutions and non banking financial companies (NBFCs). - Moneycontrol.com
🍒 Banking Act amendment is credit positive for depositors, says Moody's : The Indian government's amendment to the Banking Regulation Act, which allows the Reserve Bank of India (RBI) to initiate resolution of a weak bank by reconstructing its capital or merging it with another bank without putting it under moratorium is credit positive for the country's depositors, rating agency Moody's said in a report. Before the amendment, banks which were on the brink of collapse had to be compulsorily be put under moratorium with restrictions on both its depositors and creditors.Yes Bank was the latest to be put under moratorium on March 5 after it failed to raise capital in time. Depositors could not withdraw more than Rs 50,000 from their accounts. Also, electronic transactions to and from Yes Bank accounts were frozen, causing some borrowers to miss their monthly payments.Moody's said the new amendments will help depositor confidence. "The amended resolution process is credit positive because it will help preserve depositor confidence and avoid deposit flight from a weak bank as the risk of a moratorium is reduced. The amendments are also credit positive for the bank's depositors and creditors because their ability to obtain full and timely repayments during the resolution process are unaffected," the rating agency said.- economic times
🍒 HDFC Bank launches instant auto loan product : HDFC Bank on Thursday announced its plans to offer instant auto loans called ZipDrive to its customers in 1,000 cities. “The offering is now being extended to Tier 2 and 3 cities, such as Bhimavaram in Andhra Pradesh, Hardoi in Uttar Pradesh, Thalassery in Kerala, and Balasore in Odisha among other places, across India,” the bank said in a release. The move comes amidst demand for entry-level cars as people try to avoid public transport. Under the scheme, HDFC Bank customers are given pre-approved loan offers using the bank’s proprietary algorithm and analytics. Customers can select car model, dealer, loan amount within eligible limits and tenure online, the lender said, adding that they can also opt for on-road funding as much as 100 per cent of the value. - Business Line
🍒 Bribery case: Yes Bank founder Rana Kapoor gets interim protection till July 11 : A special court here on Thursday granted interim protection from arrest till July 11 to Yes Bank founder Rana Kapoor in a case registered against him by the CBI for allegedly obtaining illegal gratification from a realty firm. He was booked by the central investigating agency in March this year for allegedly obtaining Rs 307 crore bribe in the purchase of a Lutyen’s zone bungalow in New Delhi from Avantha Group to go easy on around Rs 1,900 crore bank loans to the seller’s group companies. Kapoor had moved an anticipatory bail application before a special CBI court here. He was granted interim protection from arrest till July 11 as the central probe agency was yet to file its reply in the matter, his lawyer said. The CBI is also probing Kapoor in connection with the alleged scam at the Yes Bank. Kapoor is currently lodged in jail after being arrested by the Enforcement Directorate (ED) in a case related to Yes Bank. - Financial Express
🍒 Kotak Mahindra Bank, Innoviti tie up to offer EMIs : Kotak Mahindra Bank and Innoviti Payment Solutions on Thursday announced that they have collaborated to offer equated monthly instalments (EMI) billing options on Kotak debit cards swiped on Innoviti POS terminals. The facility will allow over 1 crore Kotak customers to pay for their purchases in instalments by using the EMIs on debit cards facility at over 70,000 Innoviti POS terminals across more than 1,000 cities. “Importantly, with over half of Innoviti’s POS terminals installed in 350 smaller cities and towns in India with a population of less than 20 lakh, this arrangement will help consumers particularly in tier 2 and 3 cities access credit conveniently through their Kotak debit cards,” Kotak Mahindra Bank said in a statement.- Business Line
🍒 Credit to MSMEs shrinks up to 7.6% between March & May : Credit to micro, small and medium enterprises (MSMEs) shrank up to 7.6% between March and May 2020 as the rapid rise in the number of Covid-positive cases and the lockdown brought economic activity to a halt. Loans outstanding to individuals fell 3% during the same period as consumption took a hit, showed data released by the Reserve Bank of India (RBI). In the same period a year ago, credit outstanding to MSMEs had fallen up to 2.7% and that to retail had grown 0.9%. Loans to micro and small units shrunk the most, with the total amount outstanding in this segment falling to Rs 3.53 lakh crore on May 22 from Rs 3.82 lakh crore as on March 27. - Financial Express
🍒 Axis Bank to raise ₹15,000 crore as capital : Private sector lender Axis Bank will raise ₹15,000 crore as capital through various instruments. The decision was taken at a meeting of the bank’s board of directors on Thursday. “The board, at its meeting held today, has approved the proposal relating to raising of funds not exceeding ₹15,000 crore through issue of equity shares, depository receipts and, or any other instruments or securities representing either equity shares and, or convertible securities linked to equity shares, including through Qualified Institution Placement, American Depository Receipts, Global Depository Receipts programme, preferential allotment or such other permissible mode or combinations…,” it said in a regulatory filing after the meeting. The bank’s board had, in April, approved a proposal to raise up to ₹35,000 crore. - Business Line
🍒 Axis Bank to shut down UK operations : Axis Bank has decided to shut down operations in the United Kingdom as part of its plans to focus on the Indian market. In a statement issued to the stock exchanges, the bank said that it has been reviewing its international strategy and, as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there. “ In line with the said objective, the bank has taken a decision to fully wind down and close the operations of Axis Bank UK Limited, a subsidiary of the bank, and surrender the banking licence by the end of April 2021,” the bank said in a statement. - Business Line
🍒 OMO purchase of G-Secs: RBI received bids amounting to seven times the notified amount of ₹10,000 crore : The Reserve Bank of India (RBI), on Thursday, received bids amounting to seven times the notified amount of ₹10,000 crore at the open market operation (OMO) purchase of four government securities (G-Secs). Simultaneously, the central bank received bids aggregating three times the notified amount of ₹10,000 crore at the OMO sale of four Treasury bills. - Business Line
🍒 Chinese banks go slow on large loans : Top Chinese banks in India, Industrial and Commercial Bank of China (ICBC) and the China Development Bank (CDB), have considerably slowed their large-ticket term-loan advances in the country after bad loans surged in their portfolios that had included advances to the subsequently distressed companies such as IL&FS Transportation and Aircel. So, these global financial powerhouses have since changed their strategy and are now largely engaged in bill discounting and bond investments after having to stomach brutal haircuts on exposures to Reliance Communications, IL&FS Transportation, Aircel and its subsidiary Dishnet Wireless, and Alok Industries.Data with the central bank showed that ICBC is steadily moving away from term loans. Charge filings with the Ministry of Corporate Affairs, compiled by data intelligence provider Propstack, show that ICBC and CDB have not disbursed any large-ticket term loan in India since 2018. - economic times
🍒 Only 25 percent of NBFCs sought moratorium, says CARE study : They made headlines nationally that high-street lenders were not giving them the benefit of the repayments standstill. But in reality, just about a fourth of the 96 non-bank lenders analysed by CARE Ratings approached the banks for a moratorium. More than four-fifths of the housing finance companies (HFCs) did not approach lenders for this relief. But more than 70% MFIs — and about a quarter of the realty-focused wholesale and retail NBFCs — sought relief, the research showed. “HFCs are supported by relatively robust collections. Under moratorium also, many small and mid-sized HFCs are highly capitalised with high liquidity buffers, aiding them in the current scenario,” said the report. “The majority of microfinance companies have approached their lenders for relief given the meagre collections.” The banking regulator has allowed all lending institutions to allow a moratorium of six months on payments of instalments in respect of all term loans. - economic times
🍒 HFCs better placed than other NBFCs in terms of asset quality: Report : Housing finance companies or HFCs are better placed in terms of asset quality than other NBFCs as their NPAs would be far less than other NBFCs in FY'21 following the economic impact on account of the nation-wide lockdown, post COVID-19 pandemic. Also HFCs have much fewer assets under moratorium, according to a report by ratings firm Icra. HFCs could see non-performing assets (NPAs) sore to 3.4-4.8 per cent by March'21. But other NBFCs asset quality is likely to be more impacted than FCs, with the segmental NPA touching 7.0-9.5% by March 2021, Icra said. “Portfolio under moratorium for some large NBFCs is as high as 70- 80%, with the sectoral average of about 52%, while for HFCs the average is about 28% " said A M Karthik, Vice President and Sector Head, Financial Sector Ratings ICRA "The additional covid-19 -related provision carried by NBFCs is about 0.7% (of the AUM), while for HFCs is about 0.2%." - economic times
🍒 Niti Aayog plans to hire chief economist : Niti Aayog is planning to hire a chief economist at the think-tank under its flexi pool and has sought applications for the coveted post to be responsible for scrutiny of all finance ministry related matters and those of other financial institutions including the Reserve Bank of India. India already has a post of chief economic advisor under the finance ministry and another Bibek Debroy-led Economic Advisory Council to the PM is headquartered at the Aayog itself.The post could be filled either through a contract or on deputation and will attract remuneration of up to Rs 3,30,000 a month. The appointment would initially be up to three years, and can be extended up to 5 years, depending on the requirements or till the age of 60 years, whichever is earlier. “NITI Aayog is looking for an experienced, talented, innovative, and dynamic professional who desires to be a part of the team that is scripting the exciting transformation story which is unfolding in India today,” it has said in its post. - economic times
🍒 UPI payments hit all-time high of 1.34 bn transactions in June : Payments on Unified Payments Interface (UPI) in June hit an all-time high of 1.34 billion in terms of volume with transactions worth nearly Rs 2.62 lakh crore, as per National Payments Corporation of India (NPCI) data. On a month-on-month basis it registered a 8.94 per cent growth from 1.23 billion in May.UPI payments had fell to 999.57 million in terms of volume with transactions worth Rs 1.51 lakh crore in April, following the coronavirus-induced lockdown that halted almost all services, except essentials.Online payments slowly gathered pace from May, with staggered opening of the economy. In May, the number of UPI transactions stood at 1.23 billion valued at Rs 2.18 lakh crore, showed the NPCI data.In June, the volume in terms of transactions touched the highest level so far, as per the data available, with the first set of data dating back to April 2016 -- with nil transaction. - economic times
🍒 Axis Bank to wind down UK subsidiary : Axis Bank on Thursday said it has decided to wind down its UK subsidiary and the move will not have any material impact on its financial position. The lender has been reviewing its international strategy and as part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential there, it said in a regulatory filing. "In line with the said objective, the bank has taken a decision to fully wind down and close the operations of Axis Bank UK Ltd, a subsidiary of the bank and targeting for surrendering of the banking licence by end of April 2021, which has been reviewed with the UK regulators viz. both the Prudential Regulation Authority and the Financial Conduct Authority," it said. - economic times
🍒 Ex-ICICI Bank executive Murali Ramakrishnan likely to be named as CEO of South Indian Bank : Days after the announcement of ex-Axis Bank ED Pralay Mondal joining Thrissur-headquartered CSB Bank ( formerly Catholic Syrian Bank), another top level rejig is on the cards in Kerala’s banking capital. Murali Ramakrishnan , a former senior executive at ICICI Bank, who was the chief executive of the private sector lender’s operations in North Asia, Middle East, Sri Lanka & Africa , has emerged as a front-runner to become the next Managing Director & Chief Executive Officer of South Indian Bank (SIB), sources told Moneycontrol. - Moneycontrol.com
🍒 Release Sishu loan interest subvention amounts to borrowers, SIDBI tells banks : The Small Industries Development Bank of India (SIDBI) has asked banks and other member lending institutions (MLIs) to ensure release of interest subvention amounts to the borrowers. All MLIs should also inform their borrowers about the interest subvention scheme and its benefits, it said in a circular.The Centre had earlier announced interest subvention of 2 per cent for a period of 12 months as part of the ‘Atmanirbhar Bharat Abhiyan’ economic relief package in wake of the Covid-19 pandemic. The Department of Financial Services, Ministry of Finance, has designated SIDBI as the Nodal Agency for implementation of the scheme. - Business Line
🍒 Pandemic, loan moratorium hits third-party recovery agencies : The Reserve Bank of India’s (RBI) relief on loan repayments might have helped a lot of borrowers during the coronavirus outbreak, but the moratorium, coupled with banks going slow on recoveries has hit the business of third-party recovery agencies. These businesses solely depend on lenders for recovery assignments. These agencies are engaged by both banks and non-bank financiers to recover loans from delinquent borrowers. Four agencies, which Mint spoke to said, as banks have stopped giving any business since the lockdown began, their revenues have dropped more than 90%. - Live Mint
🍒 Corona Impact: Worried bankers want to function at 50% strength : A steady rise in the number of bankers becoming infected with Covid-19 and nearly 25 deaths is worrying the banking community. All India Bank Employees’ Association (AIBEA) has written to the chief secretary of Maharashtra, and Indian Banks’ Association (IBA) to allow banks to function at 50% strength. The letter says: “The state level bankers’ committee (SLBC) Maharashtra has issued their compunction that banks should functional normally and with 100% of the staff. Requiring 100% of staff to attend is neither a physical possibility nor it is advisable given the SOP on social distancing requirements, etc.” - Financial Express
🍒 CBI books GVK Group chief, others for siphoning off ₹705 cr from MIAL : The CBI has booked Venkata Krishna Reddy Gunupati, the chairman of the GVK Group of Companies and his son G V Sanjay Reddy, Managing Director of Mumbai International Airport Ltd among others for alleged irregularities to the tune of ₹705 crore in running of the airport, officials said on Wednesday. Airport Authority of India Ltd had formed a Joint venture with GVK Airports Holdings Limited, promoted by GVK group under public-private partnership firm Mumbai International Airport Ltd for upgradation and maintenance of Mumbai Airport. - Business Line
🍒 Gold price slump to Rs 48,886 per 10 gram, silver down Rs 1,075 per kg : Gold prices declined Rs 578 to Rs 48,886 per 10 gram in the Mumbai bullion market on rupee appreciation versus the dollar and rally in equity markets. Globally too, the rally has lost steam and failed to sustain above the $1,800/oz level. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,231, Rs 44,250 and Rs 48,308 plus 3 percent GST, respectively. Silver prices declined Rs 1,075 to Rs 48,580 per kg from its closing on July 1.
🍒 Rupee jumps 56 paise to settle at 75.04 against US dollar : The rupee appreciated 56 paise to settle at 75.04 (provisional) against the US dollar on Thursday tracking weakness in the greenback and gains in the domestic equity market. The rupee opened at 75.51 against the US dollar, gained further ground and finally closed for the day at 75.04 against the US dollar, up 56 paise over its previous close.
🍒 Sensex rallies 429 points; Nifty tops 10,550 level : Equity benchmark BSE Sensex rallied 429 points on Thursday on widespread buying amid a broad upmove in global markets following encouraging Covid-19 vaccine trials. After soaring 600 points during the session, the 30-share index settled 429.25 points, or 1.21 per cent, higher at 35,843.70.The NSE Nifty surged 121.65 points, or 1.17 per cent, to close at 10,551.70. M&M was the top gainer in the Sensex pack, jumping around 6 per cent, followed by Titan, HCL Tech, Tata Steel, Infosys and TCS. On the other hand, Axis Bank, HUL, Kotak Bank and Bharti Airtel were among the laggards.
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