10.07.2020: Today's Banking / Financial News at a Glance
🍒 Finance ministry asks states to ensure safety of bankers and stern action against unruly : The Finance Ministry has requested states to ensure safety and security of bank officials and stern action against perpetrators following incidences of attack on bankers in some parts of the country in the recent past. The Department of Financial Services in a letter to chief secretary of states said that incidences of unruly behaviour of anti-social elements against the bankers needs to be responded with stern action taken against such elements, sources said. Last month, a woman bank employee in Canara Bank (erstwhile Syndicate Bank) was attacked by a police constable at its Saroli branch in Surat. Following the incident, Finance Minister Nirmala Sitharaman had assured that the safety of all members of staff in banks is of importance. "Amid challenges, banks are extending all services to our people. Nothing should threaten their safety and dignity," she had said. Few incidents, including attack on Bank of India staff in Maharashtra, were reported after the Surat attack. Citing recent news reports and social media coverage, the letter said it has highlighted instances of anti-social elements behaving in an unruly manner with bankers within bank premises. "You would agree that such incidents need to be responded to proactively and with a firm hand, stern action taken against such elements with full force of law so that bankers are protected and the public assured of secured access to banking services," the letter dated July 7 said. - economic times
🍒 Punjab National Bank declares its Rs 3,688 crore exposure to DHFL as fraud : India’s second largest lender Punjab National Bank on Thursday declared its Rs 3688 crore exposure to bankrupt mortgage lender Dewan Housing Finance Limited (DHFL) as fraud. The state-run lender said the company was being reported as a fraudulent account to the Reserve Bank of India. Under the rules set by the banking regulator 100% provisioning is required in fraudulent accounts spread across a period of four quarters. The lender has so far made a provision of Rs 1246 crore in the account. “A fraud of Rs.3688.58 crore is being reported by Bank to RBI in the accounts of DHFL, bank has already made provisions amounting to Rs.1246.58 Crore, as per prescribed prudential norms,” the government owned bank said in an exchange filing. - economic times
🍒 PNB looks to raise up to ₹10,000 crore : The board of directors of Punjab National Bank (PNB), the country’s second largest bank, on Thursday gave its nod for the bank to undertake capital raising of up to ₹10,000 crore. This is proposed to be done through issue of equity shares and Basel-III compliant Tier-2 bonds by way of private placement, Qualified Institutional Placement, further public offering, Rights Issue or any other mode or through a combination of these modes, sources said.The Board also approved the opening balance sheet of the Amalgamated Bank as on April 1, 2020 i.e., post amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank. - Business Line
🍒 ED attaches over Rs 2,200 crore assets of Rana Kapoor, others in Yes Bank PMLA case : The Enforcement Directorate (ED) Thursday provisionally attached assets worth Rs.2203 crores in a money laundering case of alleged fraud caused to Yes Bank Ltd (YBL). The agency said while assets worth Rs.792 crore (present market value Rs 1400 Crore) owned by arrested YBL cofounder Rana Kapoor and entities related to him were provisionally attached, properties worth Rs.1411.90 crores of co-accused, Dewan Housing Finance Corporation Ltd (DHFL) promoters, Kapil and Dheeraj Wadhawan were also provisionally attached by the federal agency. As per section 5 of the Prevention of Money Laundering Act (PMLA), any property of any person involved in money laundering may be provisionally attached. The Adjudicating Authority after considering representation shall record a finding whether properties are involved in money laundering or not. According to the agency the present market value of these assets attached in the case (both in India and abroad) is more than Rs 2800 crores. In the case of Kapoor, the provisionally attached properties include properties in Mumbai- an independent residential building “Khursidabad”, three duplex flats at Napean Sea Road, residential flat in NCPA, Nariman Point; eight flats in Indiabulls Blu. Besides the Mumbai properties, a bungalow at 40 Amrita Shergill Marg in New Delhi having market value of Rs 685 crore have also been attached, the agency said in a statement. - economic times
🍒 Exempt current a/c held by traders from minimum balance norm, demands traders' body : A traders' body on Thursday asked the RBI to instruct banks to exempt current accounts held by small businesses from maintaining minimum balance in view of the hardships being faced by them due to the coronavirus pandemic. In a letter to RBI Governor Shaktikanta Das, the Federation of All India Vyapar Mandal (FAIVM) also demanded refund of the penalties imposed for breaching minimum balance charged by banks during the April-June period. The body further demanded that on the lines of Basic Savings Bank Deposit (BSBD) Account or 'no frills savings accounts, Basic Current Account with no criterion of minimum balance should also be introduced. FAIVM National General Secretary V K Bansal said there was no business in the lockdown period and economic activity was at the grassroots level. - economic times
🍒 Karur Vysya Bank partners with Tata Motors to offer car loans : Karur Vysya Bank (KVB) on Thursday entered into an arrangement with Tata Motors to fund buyers of Tata passenger vehicles. Both existing and new customers will be eligible to avail loans from KVB, which seeks to leverage the vast new car retail network of Tata Motors across India, even as the bank has a branch network of 779 across 22 States and union territories.KVB is offering a special product for buyers of Tata Motor passenger vehicles under which 100 percent on-road finance with a six-month holiday period is provided at attractive interest rates, a bank release said here. - Moneycontrol.com
🍒 PNB Housing Finance actively looking to sell down corporate assets and raise focus on mass housing segment : PNB Housing Finance is actively looking to sell down corporate assets and raising focus on the mass housing segment even as disbursement likely to shrink this financial year. The company said there are early signs of real estate sector bottoming out after seven years of muted performance.Housing finance business is improving month on month but on the overall basis the disbursements are expected to degrow during the year, the mortgage lender said, after its board okayed the revised business plan for FY21.In the mass housing segment, it plans to disburse loans to high yielding individual housing segment with average ticket size of around Rs 17 lakh. Unnati segment will account for 10-15% of the total disbursements planned for FY 2020-21.The lender has corporate loans worth Rs 14600 crore and is negotiating with banks to sell down part of it. To start with it is looking to offload about Rs 2000 crore, chief executive Neeraj Vyas had said last month. Retail loans contribute about 85% of its total assets. - economic times
🍒 Health insurers feel the brunt as Covid claim amounts triples to Rs 562 cr in a month " India’s health insurance sector is feeling the financial brunt of the coronavirus pandemic, with claimed amounts more than tripling to ₹562 crore in less than a month, led by Maharashtra and Delhi. The number of claims also tripled to 35,000 on July 3 from about 11,000 reported on June 8, according to data from the General Insurance Council, which ET accessed.The total amount claimed by policyholders on account of various treatment costs rose from ₹178 crore on June 8, the data showed. Almost 23,000 claims worth ₹184 crore were settled as of July 3, according to the data.Maharashtra, the state with the highest number of cases, alone reported 15,753 claims worth ₹195 crore, followed by Delhi, the worst-affected city, which submitted 5,909 claims worth ₹134 crore. Other states with a high number of claims include Tamil Nadu, Karnataka, Haryana and West Bengal. While the average claim amount increased to ₹1.64 lakh in July from ₹1.56 lakh in June, the average settlement reduced to ₹80,427 from ₹90,118, indicating that policyholders were getting lower pay-outs even after Covid-19 treatment costs increased. - economic times
🍒 Expect 50 bps rate cut by October: Bank of America : India's economy may contract by 3 to 5 per cent in FY'21, which may trigger a 50 to 150 bps points reduction in benchmark repo rate by the central bank during the year, according to a report by Bank of America Securities. In addition high real lending rate is also a concern. Assuming that the economy will open up fully by August the forecast is that of a 3 per cent contraction. This may go up to 5 per cent if the crisis prolongs. "It is difficult to forecast annual growth in such uncertain times" said Indranil Sengupta, chief India economist at Bank of America Merrill Lynch. "The April-May lockdown had a 150 bps a month. We are factoring in 100 bps impact a month in the partial lockdown. The extent of impact would depend on how much the crisis prolongs." A basis point is 0.01 percentage point. Economists' forecasts for India's FY'21 growth have varied between 3 per cent to over 7 per cent following the contraction in economic activity due to the COVID-19 induced nation-wide lockdown. The quantum of rate reduction would depend on the extent of contraction in the economy, Gupta said. Another trigger for the rate cut would be high real lending rates, the Bank of America report said. While nominal lending rate gas dipped 94 bps since March'19, real lending rates has risen by 94 bps as core WPI inflation has increased by 200 bps during the period. "Effectively, this is still monetary tightening" Gupta said.- economic times
🍒 Chinese PoS devices here to stay as cheaper options not on cards : The banking and payments sector may have to continue relying on ‘Made in China’ payment terminals or point of sale (PoS) machines, in the absence of cost-effective domestic or international alternatives. Amid growing demand for digital payments in India, these swipe machines are the key hardware to process credit and debit card-based transactions at malls and retail stores. Following the government’s directive to reduce dependence on Chinese goods, payments providers are looking at alternative options, but pricing and legacy challenges may prevent any immediate migration, multiple industry sources told ET. The deployment of these terminals in rural and semi-urban areas is central to the government's flagship Digital India initiative. The Reserve Bank of India had earmarked ₹250 crore in May to increases deployment of these payment terminals in rural areas, with a special focus on states in the Northeast. Currently, over 95% of POS terminal imports are from China, where the market is dominated by three global manufacturers — US-based Verifone, France-based Ingenico and Hong Kong-based Pax Technologies. . - economic times
🍒 Former RBI governor Rangarajan gets the first Mahalanobis award : The first Prof PC Mahalanobis National Award in Official Statistics for lifetime achievement was conferred on former RBI Governor C Rangarajan. In a press statement, the Ministry of Statistics and Programme Implementation (Field Operations Division) said the award was conferred on 14th National Statistics Day, which was celebrated virtually on June 29 in New Delhi. Known as father of Indian Statistics, Mahalanobis is the founder of Indian Statistical Institute (ISI). In recognition of his outstanding contribution in laying the foundation for holistic reforms in national statistical system., his birth anniversary is celebrated as the National Statistics Day every year. - Business Line
🍒 Mastercard commits ₹250 crore to support small businesses in India : Mastercard, a global technology company in the payments industry, on Thursday announced a commitment of ₹250 crore ($33 million) to help reboot Indian SMEs and enable business recovery. Their dependence on the cash-economy and supply chain disruptions have made India’s small and medium businesses amongst the hardest hit from the Covid-19 pandemic. As part of this commitment, Mastercard will roll out multiple initiatives to help small businesses by growing digital payments awareness and providing low-cost acceptance solutions – online and offline – that are simple, safe and secure; drive inclusive growth by enabling small merchants and kirana stores with access to credit, knowledge and tools that will drive operational efficiencies; and empower women entrepreneurs by increasing their business acumen. “Small businesses are the foundation of India’s economy, contributing nearly 35 per cent to the GDP. Mastercard will leverage its network, knowledge, technology and partnerships to help these enterprises sustain and grow their businesses. As a result of these initiatives, India’s small businesses and entrepreneurs will gain increased access to credit and build operational efficiencies through improved customer and inventory management, employee engagement and regulatory compliance,” Porush Singh, Division President, South Asia, Mastercard, said in a statement.- Business Line
🍒 Banks exceed digital transaction target set for 2019-20 : As many as 17 banks received an overall “good” rating for their performance on digital transactions in 2019-20, with private sector lender ICICI Bank topping the list of 56 banks and closed wallets that are scored by the government. ICICI Bank, with an overall score of 83, surpassed the target given to it at 11.58 per cent in 2019-20, which include transactions made through UPI, debit cards, net banking and PPIs.In the scorecard prepared by the Ministry of Electronics and Information Technology (MeitY), HDFC Bank came second and had met 10.95 per cent of the target for 2019-20 while YES Bank was third.The scorecard, which was seen by BusinessLine, revealed that amongst public sector lenders, Bank of Maharashtra came in at the sixth position, the merged Bank of Baroda was at ninth place and State Bank of India was 10th in 2019-20. Fino Payments Bank, at the fifth spot, was the only payments bank in the top 10. Paytm Payments Bank was ranked 17th with an overall rating of good, but it achieved only 82.95 per cent of the given target. - Business Line
🍒 NBFC loan sanctions fell 15% in Q4 FY20: FIDC : Loan sanctions by non-banking finance companies fell 15 per cent in the fourth quarter of 2019-20. Data released by the Finance Industry Development Council (FIDC) on Thursday revealed that sanctions by NBFCs amounted to ₹2,56,330.05 crore in the quarter ended March 31, 2020 as against ₹3,02,654.69 crore in the same period a year ago. “We must remember that in the fourth quarter of 2018-19 also there was a 31 per cent annual reduction in sanctions in the aftermath of IL&FS and so this reduction of 15 per cent is in spite of the base effect of low volumes and therefore, is actually very sharp,” said Mahesh Thakkar, Director General, FIDC. He added that most industrialised States such as Delhi, Maharashtra and Tamil Nadu showed a decline, while in Gujarat there was a flat trend. - Business Line
🍒 YES Bank FPO to open on July 15 : Private sector lender YES Bank follow on public offer will open on July 15 and close on July 17. It plans to raise as much as ₹15,000 crore, by way of a fresh issue of equity shares, including an employee reservation portion of up to ₹200 crore.“The bank has filed a red herring prospectus dated July 7, 2020, in connection with the Offer, with the Registrar of Companies, Maharashtra at Mumbai,” it said in a regulatory filing on Thursday.Anchor investors can bid on July 14.The capital raising committee (CRC) of the bank’s board will meet on July 10 to approve the price band and discount amongst other issuesEarlier this week, the CRC has approved the proposal to raise funds through the FPO.State Bank of India, which holds 48.21 per cent stake in YES Bank, may invest up to ₹1,760 crore in the offering. YES Bank scrip closed 2.11 per cent higher at ₹ 26.65 apiece on BSE. - Business Line
🍒 Maharashtra gives banking mandate to IDBI Bank, district co-op banks : The Maharashtra State Cabinet on Wednesday decided to give its banking mandate to IDBI Bank, regional rural bank and 15 district central cooperative banks in the state. The mandate is only for the partial handling of certain funds. A press statement issued by the Chief Minister’s Office said the decision to give the mandate to IDBI Bank was taken keeping in mind the fact that the Government of India and Life Insurance Corporation of India held 97.46 per cent of the share capital of the bank. IDBI Bank will handle excess funds of State Government public undertakings and corporations. It will not handle State Government employee salaries and pensions, the statement said. - Business Line
🍒 Cabinet clears ₹12,450-cr recap of three PSU insurers : The Union Cabinet on Wednesday approved capital infusion of ₹12,450 crore in three ailing state-owned general insurers — Oriental Insurance Company Ltd (OICL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL) — to bolster their precariously low solvency ratios. According to an official release, in the wake of the pandemic and critical financial position, the Centre has decided to drop its earlier plan to merge these three general insurers. Instead, it will now focus on their solvency and profitable growth, post capital infusion, it said. “This ₹12,450 crore is a programme of recapitalisation of these three insurance companies so that they become more stable,” said Prakash Javadekar, Union Information and Broadcasting Minister after the Cabinet meeting. - - Business Line
🍒 Central government staff can claim 80C benefits on NPS Tier-II contribution : Central government employees who wish to contribute to the National Pension System (NPS)-Tier II accounts will now be able to claim deductions under section 80C. The finance ministry has notified new tax rules applicable to NPS Tier-II accounts, which did not enjoy tax benefits so far. Even now, the benefit is extended only to central government employees who invest under NPS Tier-II Tax Saver Scheme, 2020. “This is an official notification of the scheme that was announced earlier. Central government employees can now contribute more to NPS and not suffer the long lock-in period,” says Archit Gupta, Founder and CEO, Cleartax. - moneycontrol.com
🍒 Gold hits record high of Rs 49,239 per 10 gram, silver zoom past Rs 51,000 per kg : Gold prices rose Rs 119 to Rs 49,239 per 10 gram, a record high in the Mumbai bullion market due to weakness in the dollar-rupee. The yellow metal prices gained on heightened risk sentiment on record coronavirus cases after Johns Hopkins University data showed the number of global cases topped 12 million as of July 9. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,929, Rs 45,103 and Rs 49,239 plus 3 percent GST. Silver prices rose Rs 1,080 to Rs 51,220 per kg from its closing on July 8.
🍒 Rupee gains 3 paise to close at 74.99 versus US dollar : The rupee appreciated 11 paise to 74.91 against the US dollar in early trade on Thursday tracking weakness in the greenback and gains in the domestic equity market. Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising Covid-19 cases weighed on investor sentiment. The rupee opened at 74.94 against the US dollar, then gained further ground and touched 74.91 against the US dollar, up 11 paise over its previous close. It had settled at 75.02 against the greenback on Wednesday. - Business Line
🍒 Online transactions of BSE’s mutual fund platform down 11% in June : The transactions processed on BSE StAR MF, the online platform for Mutual Funds distributor, was down 11 per cent in June at ₹22,667 crore against ₹25,540 crore logged in May as mutual funds started accepting forms for physical transactions besides opening their offices with state governments unlocking economic activities after the Covid lockdown. Mutual funds had stopped accepting physical forms during the Covid pandemic. - Business Line
🍒 China’s central bank sells stake in HDFC : People’s Bank of China (PBoC) has sold a part or all of its stake in Housing Development Finance Corporation Ltd (HDFC). As on June 30, 2020, PBoC does not figure in the list of foreign portfolio investors with over one per cent stake in HDFC. It could not be ascertained if PBoC continues to hold any stake in HDFC. Market sources indicated that the Chinese bank may have sold at least a part of its shares in the open market. PBoC had entered the exclusive club of foreign portfolio investors (FPIs) with over one per cent stake in HDFC as at March end 2020. - Business Line
🍒 Yes Bank share price jumps 5% on SBI's investment plan : The private lender Yes Bank share price added over 5 percent in the early trade on July 9, a day after the country's largest lender State Bank of India (SBI) said it will invest Rs 1,760 crore in the private lender. SBI told the exchanges on July 8 that it will invest up to Rs 1,760 crore in Yes Bank's follow-on public offer (FPO),
🍒 Banking, metal stocks drive Sensex higher by 400 points : After opening strong at 36,450.69, the BSE benchmark Sensex touched a high of 36,806.30, before settling higher by 408.68 points, or 1.12%, at 36,737.69. On the NSE, the Nifty was up 126.75 points, or 1.18 per cent, to 10,832.50.Public sector bank SBI was the top gainer in the Sensex pack today, rising over 4 per cent, followed by Bajaj Finance, HDFC, Tata Steel, HCL Tech and M&M.On the other hand, ONGC, Tech Mahindra, Hindustan UniLever, Maruti, Nestle were among the laggards.
🍒 Shares of Central Bank of India in Stock Market : 100% of moneycontrol users recommend buying Central Bank of India shares. In BSE shares closed at Rs.17.90 against Prev Close Rs.17.60. In NSE, shares closed at Rs.17.75 against Prev Close Rs.17.60..
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🍒 Finance ministry asks states to ensure safety of bankers and stern action against unruly : The Finance Ministry has requested states to ensure safety and security of bank officials and stern action against perpetrators following incidences of attack on bankers in some parts of the country in the recent past. The Department of Financial Services in a letter to chief secretary of states said that incidences of unruly behaviour of anti-social elements against the bankers needs to be responded with stern action taken against such elements, sources said. Last month, a woman bank employee in Canara Bank (erstwhile Syndicate Bank) was attacked by a police constable at its Saroli branch in Surat. Following the incident, Finance Minister Nirmala Sitharaman had assured that the safety of all members of staff in banks is of importance. "Amid challenges, banks are extending all services to our people. Nothing should threaten their safety and dignity," she had said. Few incidents, including attack on Bank of India staff in Maharashtra, were reported after the Surat attack. Citing recent news reports and social media coverage, the letter said it has highlighted instances of anti-social elements behaving in an unruly manner with bankers within bank premises. "You would agree that such incidents need to be responded to proactively and with a firm hand, stern action taken against such elements with full force of law so that bankers are protected and the public assured of secured access to banking services," the letter dated July 7 said. - economic times
🍒 Punjab National Bank declares its Rs 3,688 crore exposure to DHFL as fraud : India’s second largest lender Punjab National Bank on Thursday declared its Rs 3688 crore exposure to bankrupt mortgage lender Dewan Housing Finance Limited (DHFL) as fraud. The state-run lender said the company was being reported as a fraudulent account to the Reserve Bank of India. Under the rules set by the banking regulator 100% provisioning is required in fraudulent accounts spread across a period of four quarters. The lender has so far made a provision of Rs 1246 crore in the account. “A fraud of Rs.3688.58 crore is being reported by Bank to RBI in the accounts of DHFL, bank has already made provisions amounting to Rs.1246.58 Crore, as per prescribed prudential norms,” the government owned bank said in an exchange filing. - economic times
🍒 PNB looks to raise up to ₹10,000 crore : The board of directors of Punjab National Bank (PNB), the country’s second largest bank, on Thursday gave its nod for the bank to undertake capital raising of up to ₹10,000 crore. This is proposed to be done through issue of equity shares and Basel-III compliant Tier-2 bonds by way of private placement, Qualified Institutional Placement, further public offering, Rights Issue or any other mode or through a combination of these modes, sources said.The Board also approved the opening balance sheet of the Amalgamated Bank as on April 1, 2020 i.e., post amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank. - Business Line
🍒 ED attaches over Rs 2,200 crore assets of Rana Kapoor, others in Yes Bank PMLA case : The Enforcement Directorate (ED) Thursday provisionally attached assets worth Rs.2203 crores in a money laundering case of alleged fraud caused to Yes Bank Ltd (YBL). The agency said while assets worth Rs.792 crore (present market value Rs 1400 Crore) owned by arrested YBL cofounder Rana Kapoor and entities related to him were provisionally attached, properties worth Rs.1411.90 crores of co-accused, Dewan Housing Finance Corporation Ltd (DHFL) promoters, Kapil and Dheeraj Wadhawan were also provisionally attached by the federal agency. As per section 5 of the Prevention of Money Laundering Act (PMLA), any property of any person involved in money laundering may be provisionally attached. The Adjudicating Authority after considering representation shall record a finding whether properties are involved in money laundering or not. According to the agency the present market value of these assets attached in the case (both in India and abroad) is more than Rs 2800 crores. In the case of Kapoor, the provisionally attached properties include properties in Mumbai- an independent residential building “Khursidabad”, three duplex flats at Napean Sea Road, residential flat in NCPA, Nariman Point; eight flats in Indiabulls Blu. Besides the Mumbai properties, a bungalow at 40 Amrita Shergill Marg in New Delhi having market value of Rs 685 crore have also been attached, the agency said in a statement. - economic times
🍒 Exempt current a/c held by traders from minimum balance norm, demands traders' body : A traders' body on Thursday asked the RBI to instruct banks to exempt current accounts held by small businesses from maintaining minimum balance in view of the hardships being faced by them due to the coronavirus pandemic. In a letter to RBI Governor Shaktikanta Das, the Federation of All India Vyapar Mandal (FAIVM) also demanded refund of the penalties imposed for breaching minimum balance charged by banks during the April-June period. The body further demanded that on the lines of Basic Savings Bank Deposit (BSBD) Account or 'no frills savings accounts, Basic Current Account with no criterion of minimum balance should also be introduced. FAIVM National General Secretary V K Bansal said there was no business in the lockdown period and economic activity was at the grassroots level. - economic times
🍒 Karur Vysya Bank partners with Tata Motors to offer car loans : Karur Vysya Bank (KVB) on Thursday entered into an arrangement with Tata Motors to fund buyers of Tata passenger vehicles. Both existing and new customers will be eligible to avail loans from KVB, which seeks to leverage the vast new car retail network of Tata Motors across India, even as the bank has a branch network of 779 across 22 States and union territories.KVB is offering a special product for buyers of Tata Motor passenger vehicles under which 100 percent on-road finance with a six-month holiday period is provided at attractive interest rates, a bank release said here. - Moneycontrol.com
🍒 PNB Housing Finance actively looking to sell down corporate assets and raise focus on mass housing segment : PNB Housing Finance is actively looking to sell down corporate assets and raising focus on the mass housing segment even as disbursement likely to shrink this financial year. The company said there are early signs of real estate sector bottoming out after seven years of muted performance.Housing finance business is improving month on month but on the overall basis the disbursements are expected to degrow during the year, the mortgage lender said, after its board okayed the revised business plan for FY21.In the mass housing segment, it plans to disburse loans to high yielding individual housing segment with average ticket size of around Rs 17 lakh. Unnati segment will account for 10-15% of the total disbursements planned for FY 2020-21.The lender has corporate loans worth Rs 14600 crore and is negotiating with banks to sell down part of it. To start with it is looking to offload about Rs 2000 crore, chief executive Neeraj Vyas had said last month. Retail loans contribute about 85% of its total assets. - economic times
🍒 Health insurers feel the brunt as Covid claim amounts triples to Rs 562 cr in a month " India’s health insurance sector is feeling the financial brunt of the coronavirus pandemic, with claimed amounts more than tripling to ₹562 crore in less than a month, led by Maharashtra and Delhi. The number of claims also tripled to 35,000 on July 3 from about 11,000 reported on June 8, according to data from the General Insurance Council, which ET accessed.The total amount claimed by policyholders on account of various treatment costs rose from ₹178 crore on June 8, the data showed. Almost 23,000 claims worth ₹184 crore were settled as of July 3, according to the data.Maharashtra, the state with the highest number of cases, alone reported 15,753 claims worth ₹195 crore, followed by Delhi, the worst-affected city, which submitted 5,909 claims worth ₹134 crore. Other states with a high number of claims include Tamil Nadu, Karnataka, Haryana and West Bengal. While the average claim amount increased to ₹1.64 lakh in July from ₹1.56 lakh in June, the average settlement reduced to ₹80,427 from ₹90,118, indicating that policyholders were getting lower pay-outs even after Covid-19 treatment costs increased. - economic times
🍒 Expect 50 bps rate cut by October: Bank of America : India's economy may contract by 3 to 5 per cent in FY'21, which may trigger a 50 to 150 bps points reduction in benchmark repo rate by the central bank during the year, according to a report by Bank of America Securities. In addition high real lending rate is also a concern. Assuming that the economy will open up fully by August the forecast is that of a 3 per cent contraction. This may go up to 5 per cent if the crisis prolongs. "It is difficult to forecast annual growth in such uncertain times" said Indranil Sengupta, chief India economist at Bank of America Merrill Lynch. "The April-May lockdown had a 150 bps a month. We are factoring in 100 bps impact a month in the partial lockdown. The extent of impact would depend on how much the crisis prolongs." A basis point is 0.01 percentage point. Economists' forecasts for India's FY'21 growth have varied between 3 per cent to over 7 per cent following the contraction in economic activity due to the COVID-19 induced nation-wide lockdown. The quantum of rate reduction would depend on the extent of contraction in the economy, Gupta said. Another trigger for the rate cut would be high real lending rates, the Bank of America report said. While nominal lending rate gas dipped 94 bps since March'19, real lending rates has risen by 94 bps as core WPI inflation has increased by 200 bps during the period. "Effectively, this is still monetary tightening" Gupta said.- economic times
🍒 Chinese PoS devices here to stay as cheaper options not on cards : The banking and payments sector may have to continue relying on ‘Made in China’ payment terminals or point of sale (PoS) machines, in the absence of cost-effective domestic or international alternatives. Amid growing demand for digital payments in India, these swipe machines are the key hardware to process credit and debit card-based transactions at malls and retail stores. Following the government’s directive to reduce dependence on Chinese goods, payments providers are looking at alternative options, but pricing and legacy challenges may prevent any immediate migration, multiple industry sources told ET. The deployment of these terminals in rural and semi-urban areas is central to the government's flagship Digital India initiative. The Reserve Bank of India had earmarked ₹250 crore in May to increases deployment of these payment terminals in rural areas, with a special focus on states in the Northeast. Currently, over 95% of POS terminal imports are from China, where the market is dominated by three global manufacturers — US-based Verifone, France-based Ingenico and Hong Kong-based Pax Technologies. . - economic times
🍒 Former RBI governor Rangarajan gets the first Mahalanobis award : The first Prof PC Mahalanobis National Award in Official Statistics for lifetime achievement was conferred on former RBI Governor C Rangarajan. In a press statement, the Ministry of Statistics and Programme Implementation (Field Operations Division) said the award was conferred on 14th National Statistics Day, which was celebrated virtually on June 29 in New Delhi. Known as father of Indian Statistics, Mahalanobis is the founder of Indian Statistical Institute (ISI). In recognition of his outstanding contribution in laying the foundation for holistic reforms in national statistical system., his birth anniversary is celebrated as the National Statistics Day every year. - Business Line
🍒 Mastercard commits ₹250 crore to support small businesses in India : Mastercard, a global technology company in the payments industry, on Thursday announced a commitment of ₹250 crore ($33 million) to help reboot Indian SMEs and enable business recovery. Their dependence on the cash-economy and supply chain disruptions have made India’s small and medium businesses amongst the hardest hit from the Covid-19 pandemic. As part of this commitment, Mastercard will roll out multiple initiatives to help small businesses by growing digital payments awareness and providing low-cost acceptance solutions – online and offline – that are simple, safe and secure; drive inclusive growth by enabling small merchants and kirana stores with access to credit, knowledge and tools that will drive operational efficiencies; and empower women entrepreneurs by increasing their business acumen. “Small businesses are the foundation of India’s economy, contributing nearly 35 per cent to the GDP. Mastercard will leverage its network, knowledge, technology and partnerships to help these enterprises sustain and grow their businesses. As a result of these initiatives, India’s small businesses and entrepreneurs will gain increased access to credit and build operational efficiencies through improved customer and inventory management, employee engagement and regulatory compliance,” Porush Singh, Division President, South Asia, Mastercard, said in a statement.- Business Line
🍒 Banks exceed digital transaction target set for 2019-20 : As many as 17 banks received an overall “good” rating for their performance on digital transactions in 2019-20, with private sector lender ICICI Bank topping the list of 56 banks and closed wallets that are scored by the government. ICICI Bank, with an overall score of 83, surpassed the target given to it at 11.58 per cent in 2019-20, which include transactions made through UPI, debit cards, net banking and PPIs.In the scorecard prepared by the Ministry of Electronics and Information Technology (MeitY), HDFC Bank came second and had met 10.95 per cent of the target for 2019-20 while YES Bank was third.The scorecard, which was seen by BusinessLine, revealed that amongst public sector lenders, Bank of Maharashtra came in at the sixth position, the merged Bank of Baroda was at ninth place and State Bank of India was 10th in 2019-20. Fino Payments Bank, at the fifth spot, was the only payments bank in the top 10. Paytm Payments Bank was ranked 17th with an overall rating of good, but it achieved only 82.95 per cent of the given target. - Business Line
🍒 NBFC loan sanctions fell 15% in Q4 FY20: FIDC : Loan sanctions by non-banking finance companies fell 15 per cent in the fourth quarter of 2019-20. Data released by the Finance Industry Development Council (FIDC) on Thursday revealed that sanctions by NBFCs amounted to ₹2,56,330.05 crore in the quarter ended March 31, 2020 as against ₹3,02,654.69 crore in the same period a year ago. “We must remember that in the fourth quarter of 2018-19 also there was a 31 per cent annual reduction in sanctions in the aftermath of IL&FS and so this reduction of 15 per cent is in spite of the base effect of low volumes and therefore, is actually very sharp,” said Mahesh Thakkar, Director General, FIDC. He added that most industrialised States such as Delhi, Maharashtra and Tamil Nadu showed a decline, while in Gujarat there was a flat trend. - Business Line
🍒 YES Bank FPO to open on July 15 : Private sector lender YES Bank follow on public offer will open on July 15 and close on July 17. It plans to raise as much as ₹15,000 crore, by way of a fresh issue of equity shares, including an employee reservation portion of up to ₹200 crore.“The bank has filed a red herring prospectus dated July 7, 2020, in connection with the Offer, with the Registrar of Companies, Maharashtra at Mumbai,” it said in a regulatory filing on Thursday.Anchor investors can bid on July 14.The capital raising committee (CRC) of the bank’s board will meet on July 10 to approve the price band and discount amongst other issuesEarlier this week, the CRC has approved the proposal to raise funds through the FPO.State Bank of India, which holds 48.21 per cent stake in YES Bank, may invest up to ₹1,760 crore in the offering. YES Bank scrip closed 2.11 per cent higher at ₹ 26.65 apiece on BSE. - Business Line
🍒 Maharashtra gives banking mandate to IDBI Bank, district co-op banks : The Maharashtra State Cabinet on Wednesday decided to give its banking mandate to IDBI Bank, regional rural bank and 15 district central cooperative banks in the state. The mandate is only for the partial handling of certain funds. A press statement issued by the Chief Minister’s Office said the decision to give the mandate to IDBI Bank was taken keeping in mind the fact that the Government of India and Life Insurance Corporation of India held 97.46 per cent of the share capital of the bank. IDBI Bank will handle excess funds of State Government public undertakings and corporations. It will not handle State Government employee salaries and pensions, the statement said. - Business Line
🍒 Cabinet clears ₹12,450-cr recap of three PSU insurers : The Union Cabinet on Wednesday approved capital infusion of ₹12,450 crore in three ailing state-owned general insurers — Oriental Insurance Company Ltd (OICL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL) — to bolster their precariously low solvency ratios. According to an official release, in the wake of the pandemic and critical financial position, the Centre has decided to drop its earlier plan to merge these three general insurers. Instead, it will now focus on their solvency and profitable growth, post capital infusion, it said. “This ₹12,450 crore is a programme of recapitalisation of these three insurance companies so that they become more stable,” said Prakash Javadekar, Union Information and Broadcasting Minister after the Cabinet meeting. - - Business Line
🍒 Central government staff can claim 80C benefits on NPS Tier-II contribution : Central government employees who wish to contribute to the National Pension System (NPS)-Tier II accounts will now be able to claim deductions under section 80C. The finance ministry has notified new tax rules applicable to NPS Tier-II accounts, which did not enjoy tax benefits so far. Even now, the benefit is extended only to central government employees who invest under NPS Tier-II Tax Saver Scheme, 2020. “This is an official notification of the scheme that was announced earlier. Central government employees can now contribute more to NPS and not suffer the long lock-in period,” says Archit Gupta, Founder and CEO, Cleartax. - moneycontrol.com
🍒 Gold hits record high of Rs 49,239 per 10 gram, silver zoom past Rs 51,000 per kg : Gold prices rose Rs 119 to Rs 49,239 per 10 gram, a record high in the Mumbai bullion market due to weakness in the dollar-rupee. The yellow metal prices gained on heightened risk sentiment on record coronavirus cases after Johns Hopkins University data showed the number of global cases topped 12 million as of July 9. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,929, Rs 45,103 and Rs 49,239 plus 3 percent GST. Silver prices rose Rs 1,080 to Rs 51,220 per kg from its closing on July 8.
🍒 Rupee gains 3 paise to close at 74.99 versus US dollar : The rupee appreciated 11 paise to 74.91 against the US dollar in early trade on Thursday tracking weakness in the greenback and gains in the domestic equity market. Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising Covid-19 cases weighed on investor sentiment. The rupee opened at 74.94 against the US dollar, then gained further ground and touched 74.91 against the US dollar, up 11 paise over its previous close. It had settled at 75.02 against the greenback on Wednesday. - Business Line
🍒 Online transactions of BSE’s mutual fund platform down 11% in June : The transactions processed on BSE StAR MF, the online platform for Mutual Funds distributor, was down 11 per cent in June at ₹22,667 crore against ₹25,540 crore logged in May as mutual funds started accepting forms for physical transactions besides opening their offices with state governments unlocking economic activities after the Covid lockdown. Mutual funds had stopped accepting physical forms during the Covid pandemic. - Business Line
🍒 China’s central bank sells stake in HDFC : People’s Bank of China (PBoC) has sold a part or all of its stake in Housing Development Finance Corporation Ltd (HDFC). As on June 30, 2020, PBoC does not figure in the list of foreign portfolio investors with over one per cent stake in HDFC. It could not be ascertained if PBoC continues to hold any stake in HDFC. Market sources indicated that the Chinese bank may have sold at least a part of its shares in the open market. PBoC had entered the exclusive club of foreign portfolio investors (FPIs) with over one per cent stake in HDFC as at March end 2020. - Business Line
🍒 Yes Bank share price jumps 5% on SBI's investment plan : The private lender Yes Bank share price added over 5 percent in the early trade on July 9, a day after the country's largest lender State Bank of India (SBI) said it will invest Rs 1,760 crore in the private lender. SBI told the exchanges on July 8 that it will invest up to Rs 1,760 crore in Yes Bank's follow-on public offer (FPO),
🍒 Banking, metal stocks drive Sensex higher by 400 points : After opening strong at 36,450.69, the BSE benchmark Sensex touched a high of 36,806.30, before settling higher by 408.68 points, or 1.12%, at 36,737.69. On the NSE, the Nifty was up 126.75 points, or 1.18 per cent, to 10,832.50.Public sector bank SBI was the top gainer in the Sensex pack today, rising over 4 per cent, followed by Bajaj Finance, HDFC, Tata Steel, HCL Tech and M&M.On the other hand, ONGC, Tech Mahindra, Hindustan UniLever, Maruti, Nestle were among the laggards.
🍒 Shares of Central Bank of India in Stock Market : 100% of moneycontrol users recommend buying Central Bank of India shares. In BSE shares closed at Rs.17.90 against Prev Close Rs.17.60. In NSE, shares closed at Rs.17.75 against Prev Close Rs.17.60..
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