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Wednesday, September 16, 2020

Today's Banking / Financial News at a Glance 17.09.2020

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☕ 17.09.2020: Today's Banking / Financial News at a Glance

🍒 Lok Sabha passes legislation to bring cooperative banks under RBI's supervision : The Lok Sabha on Wednesday passed the Banking Regulation (Amendment) Bill, 2020 which seeks to bring cooperative banks under the supervision of the Reserve Bank of India (RBI) to improve their governance and protect depositors’ money while empowering the banking regulator to prepare a restructuring or amalgamation scheme for a struggling bank without first placing it under a moratorium. The bill replaces the ordinance that was promulgated on June 26.Replying to the debate on the bill in the house, finance minister Nirmala Sitharaman said the legislation was for depositors’ safety and not for undermining the powers of the Registrar of Cooperative Societies. “We have brought this amendment to protect the depositors," said Sitharaman. She said the government was compelled to come out with an ordinance during the lockdown as the condition of the cooperative banks was “grave”. “Absolutely there was a need for an ordinance. Several members have highlighted that because of Covid, one wasn't sure when the next session of Parliament would be and in the meanwhile the protection of depositors was of critical importance,” she said. - economic times

🍒 State Bank of India's digital startup, YONO, could be a $40 billion goldmine : he country’s largest lender State Bank of India (SBI) could be sitting on a goldmine when it comes to its digital startup YONO (You only need one). The super-app could be valued at $40 billion with the lender considering long term plans to hive it off as a separate entity once it assumes a certain size. “The companies which are making losses are valued at $10 billion - $20 billion, YONO which is such a versatile platform has been making good amount of profits, using that benchmark YONO should be valued at $40 billion, but we haven’t commissioned any independent agency to value the platform,” Rajnish Kumar, chairman, SBI told ET. SBI had launched the YONO platform in 2017 and within three years of inception, notional profit and loss statements created by the bank suggests that its profits could be running in a few hundred crores. Bank is booking profits basis earnings of fee income, savings on net interest income, productivity gains and reduction in costs due to its digital only nature. - economic times

🍒 Union Bank of India issues Basel-III compliant Tier-II bonds : Union Bank of India on Wednesday said it has issued and allotted “unsecured, redeemable, non-convertible, taxable, Basel-III compliant Tier-II bonds” aggregating ₹1,000 crore. The bonds, with face value of ₹10 lakh per bond, carry a coupon rate of 7.42 per cent. They have a tenor of 120 months from the deemed date of allotment (September 16, 2020), according to the public sector bank’s regulatory filing. The Bank can exercise call option with prior approval of the Reserve Bank of India (RBI), subject to conditions mentioned in the Term Sheet on fifth anniversary from the deemed date of allotment or any allotment anniversary thereafter. The Bonds will be listed on the National Stock Exchange of India Limited. - Business Line

🍒 Worries as NPAs under Mudra scheme rise to 5% for public sector banks : The non-performing assets for loans disbursed by state-owned banks under the Pradhan Mantri Mudra Yojana (PMMY) are on a rising trajectory and soared to around 5 per cent of the total loans disbursed in 2019-20, Minister of State for Finance Anurag Thakur informed the Parliament earlier this week. The NPAs of public sector banks (PSBs) under the Mudra scheme stood at 4.9 per cent in 2019-20 – a big jump from 3.7 per cent in 2018-19 and 3.4 per cent in 2017-18. Thakur informed the Lok Sabha in a written response on Monday that NPAs of PSBs under the PMMY scheme rose to Rs 18,836 crore in 2019-20, compared to Rs 11,483 crore in 2018-19 and Rs 7,277 crore in 2017-18. This corresponded to Rs 3.82 trillion worth loans disbursed by the state-owned banks in 2019-20, compared to Rs 3.05 trillion in 2018-19 under the scheme. - Business Standard

🍒 Titan ties up with SBI to launch contactless payment watches : Titan on Wednesday, in collaboration with State Bank of India (SBI), introduced ‘Titan Pay’, powered by YONO SBI. “Through this partnership, Titan and SBI are launching a range of stylish new watches with contactless payment functionality for the first time in India,” Titan said in an official release. In a first in India, SBI account holders can now make payments through these Titan Pay watches on contactless MasterCard-enabled point-of-sale (POS) machines without a card. - Business Line

🍒 Reserve Bank to offer employees option to switch from CPF scheme to pension scheme  :  The Reserve Bank of India has agreed to offer its employees an option to switch over to pension facility from the contributory provident fund (CPF). It was a long-standing demand by the central bank employees. “This will be the last such option given to eligible serving/retired employee/ family members of deceased employees to switch over from CPF scheme to pension scheme and no further option will be given in future,” RBI said in an internal note. The decision has been taken in consultation with the government. All existing employees who joined RBI before January 1, 2012 will get this benefit. For retirees, the cut-off date is November 1, 1990, the date of introduction of the pension scheme at RBI. The switch over option will be available till November 15. - economic times

🍒 India's fraud-hit PMC Bank asked other major banks for a merger, says administrator : India's fraud-hit PMC Bank has approached other banks over a possible merger even as its efforts to recover funds from a big borrower have been disrupted by the coronavirus pandemic, the bank's administrator said in a court filing seen by Reuters. Authorities started investigating Punjab and Maharashtra Co-operative Bank (PMC) for fraud last year and the Reserve Bank of India (RBI) took control of it after detecting financial irregularities. Thousands of PMC depositors have been unable to access their deposits for a year as the RBI has capped withdrawals at 100,000 rupees ($1,359). PMC has "tried to engage with the major banks of the country to request for a merger", the bank's administrator said in a Sept. 10 filing at the Delhi High Court, without identifying the banks or giving other details. - economic times

🍒 Bandhan Bank appoints Kumar Ashish to head Emerging Entrepreneurs Business vertical : Bandhan Bank has recreated a broader vertical called "emerging entrepreneurs business" which includes its microbanking division, micro home loan and micro enterprise loans. The bank on Wednesday announced the appointment of Kumar Ashish as the head of this new division. Prior to joining Bandhan Bank, Ashish was group director at Airtel Money in Africa (a division of Airtel Africa), which runs mobile money operations across 14 countries in sub-Saharan Africa. Before that, he had spent about two decades at ICICI Bank. "In line with the capability requirements, the bank has been focussing on capacity building both through training and upskilling of existing employees, and through lateral hiring," Bandhan Bank managing director Chandra Shekhar Ghosh said. - economic times

🍒 Digital payments to recover by year end: MobiKwik CEO : Homegrown fintech player MobiKwik, which is looking to list by 2022, will continue to focus on its digital credit card business and work on profitability. “We are the only fintech company in the country which has demonstrated profitability. We have been steadily cutting down our losses,” said Bipin Preet Singh, co-founder and CEO, MobiKwik. “We are confident that in 18 to 24 months, we will be ready for an initial public offering,” he told BusinessLine. - Business Line

🍒 LIC expects good growth this fiscal : LIC expects a good growth in business during the current fiscal, backed by increasing awareness for the need for insurance among customers and a strong digital push. According to Raj Kumar, Managing Director, LIC of India, as on August 31, 2020, the insurer is at par with last years’ levels in terms of new business premiums and has witnessed close to 13 per cent growth in renewal premiums. “As on August 31 we are at last years’ level and from here on it could be a take-off (in terms of growth),” Kumar said at a webinar organised by the Merchants’ Chamber of Commerce and Industry here on Wednesday. - Business Line

🍒 ‘Economic recovery likely to be gradual’ : India’s recovery is likely to be gradual as efforts towards reopening the economy are confronted with rising infections, said Reserve Bank of India (RBI) Governor Shaktikanta Das. “The August-end press release of the National Statistics Office (NSO) was a telling reflection of the ravages of Covid-19. “Nevertheless, high frequency indicators of agricultural activity, the purchasing managers’ index (PMI) for manufacturing, and private estimates for unemployment point to some stabilisation of economic activity in Q2 (July-September), while contractions in several sectors are also easing,” said Das in his address to members of industry body FICCI. - Business Line

🍒 RBI’s loan restructuring was to strike a balance between depositors’ interest and maintain financial stability  : The rationale and philosophy behind the one-time restructuring scheme (framework for resolution of Covid-19-related stress) is to strike a balance between the depositors’ interest and maintain financial stability, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. The Governor underscored that the central bank took a careful and balanced call/ decision on the framework for resolution of Covid-19-related stress. Under the RBI’s framework for resolution of Covid-19-related stress, only those borrowers that were classified as standard and with arrears less than 30 days as of March 1are eligible for resolution.- Business Line

🍒 Debt restructuring scheme may soften blow of Covid-19 on books of PSBs : The debt restructuring scheme is expected to soften the blow of the Covid-19 pandemic on books of public sector banks (PSBs). With years of capital infusion, consolidation and enhancement in monitoring risk management, PSBs are relatively better placed to face challenges. Yet, some of them are likely to need some capital support from the government, in order to absorb shocks, meet regulatory norms, and support business growth. Except for a few, most PSBs face major challenges in raising capital from the market, given the low premium. The governm­ent’s recap­italisation programme may give them a back-stop facility in case of capital support. - Business Standard

🍒 RBI says protection of depositors should be banks' primary concern : The primary concern for any bank should be the protection of the depositors' interest, the Reserve Bank of India governor Shaktikanta Das said on Wednesday, while addressing a webinar organised by FICCI. "Ultimately, it is the depositors' money. The number of depositors could run into crores whereas the number of borrowers could be in lakhs. There are small depositors, there are middle class depositors, there are retired people who depend on bank deposits. So the interest of depositors had to be protected while allowing restructuring," Das said - Live Mint

🍒 Vulnerability of NBFC sector still a concern: RBI governor : Reserve Bank of India governor Shaktikanta Das on Wednesday said the vulnerability of non-banking finance companies (NBFC) sector continues to remain a concern. Addressing the FICCI National Executive Committee Meeting, the RBI chief said the regulation of NBFCs is not on a par with banks and the central bank is committed to ensuring that no large shadow lender fails.According to Das, RBI has increased regulatory restrictions on NBFCs since the collapse of Infrastructure Leasing and Financial Services Ltd (IL&FS) last year. These include introduction of liquidity coverage, and appointment of chief risk officers in these companies. “Vulnerability of NBFCs remains a concern. NBFCs are not at par with banks in terms of regulations. We don’t want a repeat of the crisis in another NBFC. In April 2019 MPC, I had said it will be our endeavour to ensure that no large NBFC fails. Thereafter, we have been extensively monitoring the top 100 NBFCs," he added. - Live Mint

🍒 Nabard to take up short term skill development programmes for reverse migrant workers : National Bank for Agriculture And Rural Development (Nabard) will soon start a short-term skill development programme for reverse migrants that will help them to get re-employed at the earliest. The board has initially sanctioned programmes for Uttar Pradesh, Bihar and Jharkhand and seeks to work with the National Skill Development Corporation accredited national skill development centres. CU Bhaskar, Nabard’s chief general manager in Mumbai told Financial Express the programme would be implemented on a large scale and majority of the funding would be done by Nabard. “But the entire process would be complicated since it would involve identifying efficient skill development centres and the real needy, who would require training to get back to work. The details of the programme are yet to be worked out,” Bhaskar said. - financial express

🍒 DBS Bank India unveils online loan platform for SMEs, offers credit up to Rs 20 crore : DBS Bank India on Wednesday launched an online platform for making loans available to small and mid size businesses in a hassle-free manner, with credit facility up to Rs 20 crore. Driven by its constant focus on building seamless, intuitive and hassle-free banking solutions for customers, DBS Bank India has unveiled its online credit solutions platform – DBS Digital Business Loans for SMEs, the bank said in a release. This segment-flagship platform from DBS improves the ease of accessing business credit for the entire spectrum of micro, small and medium-sized enterprises, offering credit up to Rs 20 crore, it said. The private sector lender said that customers can avail the loan through a simple online process by uploading bank statements, and I-T returns (for loans above Rs 5 crore). - financial express

🍒 Tax refunds worth over Rs 1.06 lakh crore issued to 30.92 lakh taxpayers till September 15: CBDT : The income tax department on Wednesday said it has issued refunds of over Rs 1.06 lakh crore to more than 30 lakh taxpayers between April 1 to September 15. This includes personal income tax (PIT) refunds amounting to Rs 31,741 crore issued to 29.17 lakh taxpayers and corporate tax refunds worth Rs 74,729 crore to over 1.74 lakh taxpayers."CBDT issues refunds of over Rs 1,06,470 crore to more than 30.92 lakh taxpayers between 1st April, 2020 to 15th September, 2020." "Income tax refunds of Rs 31,741 crore have been issued in 29,17,169 cases & corporate tax refunds of Rs 74,729 crore have been issued in 1,74,633 cases,” the Central Board of Direct Taxes tweeted.

🍒 Gold prices slip marginally to Rs 51,797 per 10 gram, silver down Rs 875 per kg : Gold prices slipped by Rs 96 to Rs 51,797 per 10 gram in the Mumbai market on a rally in the stock market, and rupee appreciation. Participants await the US Federal Reserve's policy statement tonight. The rate of 10 gram 22-carat gold in Mumbai was Rs 47,446 plus 3 percent GST, while 24-carat 10 gram was Rs 51,797 plus GST. The 18-carat gold quoted at Rs 38,840 plus GST in the retail market. Silver prices fell Rs 875 to Rs 65,883 per kg from its closing on September 15.

🍒 Rupee gains 12 paise to 73.52 on weak dollar : The rupee strengthened by 12 paise to settle at 73.52 against the US dollar on Wednesday supported by buoyant domestic equities and weak American currency. At the interbank forex market, the local unit witnessed high volatility against the US dollar ahead of the US Federal Reserve’s policy statement that will be released later in the day. During the session, the domestic unit touched an intra-day high of 73.48 and a low of 73.78 against the greenback.

🍒 Equities rally for third day in a row; Sensex up 258 points led by IT, Healthcare : After opening higher by 116 points, the 30-share BSE index witnessed some choppy moves intraday before closing higher by 258.50 points, or 0.66 per cent, at 39,302.85 On the NSE, the Nifty rose 82.75 points or 0.72 per cent to 11,604.55.M&M was the top gainer in the Sensex pack, rising around 4 per cent, followed by Bajaj Auto, Sun Pharma, HDFC Bank, Infosys, L&T, Nestle, UltraTech Cement and ICICI Bank. On the other hand, IndusInd Bank, NTPC, sbi, ONGC, Bharti Airtel, Axis Bank, ICICI Bank, ITC and PowerGrid were among the laggards.

🍒 Shares of Central Bank of India in Stock Market : 50% of moneycontrol users recommend *buying* Central Bank of India shares. In BSE, shares closed at Rs.16.35 against Prev Close Rs.16.45. In NSE, shares closed at Rs.16.40 against Prev Close Rs.16.50.

 … Have a Good day..

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