🙏 Good Morning All....
☕ 25.11.2020: Today's Banking / Financial News at a Glance
🍒 SBI raises ₹2,500 cr from Basel-lll compliant bonds to fund business growth : State Bank of India (SBI) on Tuesday said it has raised ₹2,500 crore from bonds to fund business growth. The committee of directors for capital raising at its meeting held on Tuesday accorded approval to allot 25,000 Basel-lll compliant non-convertible, taxable, perpetual, subordinated, unsecured, fully paid-up debt instruments in the nature of debentures qualifying as AT 1 capital of the bank to the subscribers, it said in a regulatory filing.The bonds of face value of ₹10 lakh each, at par, bearing a coupon of 7.73% per annum payable annually with call option after five years and on anniversary dates thereafter, aggregates to Rs, 2,500 crore, it said.Under call option, the bond issuer can call back the bonds before the maturity date by paying back the principal amount to investors.The Basel-III capital regulations are globally accepted banking norms under which banks need to improve and strengthen their capital planning processes.Basel-III norms are being implemented in phases since 2013 by Indian banks to mitigate concerns on potential stress on asset quality and consequential impact on performance and profitability of banks.Last month, SBI had raised ₹5,000 crore by issuing Basel-III compliant bonds. - Live Mint.
🍒 PNB customers complain TDS deduction on every cash withdrawal : Several depositors at Punjab National Bank were at their wits' end as the bank had deducted TDS (tax deducted at source) on every cash withdrawal they did. The incidents happened at the erstwhile United Bank of India branches, which saw complaints pouring right from the start of the banking hours Tuesday. "The bizarre development came to my notice last night," said Abhijit Sen, a resident of Salt Lake who withdrew Rs 30,000 from a branch in his locality on Monday morning. He got a message later in the day saying the bank deducted Rs 6,000 as TDS! ET found out that customers of several other branches (formerly UBI branches) faced a similar plight. "This happened due to wrong data entry when data cleaning was taking place," a senior PNB executive said. "There is no question of panic. All amounts will be refunded within 24 hours," he said. - economic times
🍒 Union Bank of India proposes to raise ₹1,000 crore from bonds : The Union Bank of India on Tuesday said it will raise up to ₹1,000 crore from bonds to fund business growth. "The bank is issuing Basel III compliant Tier II bonds in the nature of debentures aggregate issue size not exceeding ₹1,000 crore, with a base issue size of up to ₹500 crore and a Green Shoe option to retain over subscription up to ₹500 crore," the lender said in a BSE filing. The bonds of face value of ₹10 lakh each, bearing a coupon of 7.18% per annum, will have maturity of 15 years, it said. The bonds have fixed allotment date of 26 November, 2020. The Basel-III capital regulations are globally accepted banking norms under which banks need to improve and strengthen their capital planning processes. The state-owned bank reported a net profit at ₹517 crore for the quarter ended September, against a net loss of ₹1,194 crore in the year-ago period. - Live Mint
🍒 Central bank rejects Muthoot Finance proposal to acquire IDBI MF : Muthoot Finance on Tuesday said its plan to acquire IDBI Mutual Fund was not accepted by Reserve Bank of India. “We would like to inform that Muthoot Finance Limited’s request for a no objection certificate was not acceded to by the Reserve Bank of India on the ground that, ‘the activity of sponsoring a Mutual Fund or owning an Asset Management Company is not in consonance with the activity of an operating NBFC’,” it said in a regulatory filing. It has accordingly informed SEBI through a letter on November 23 that it would be unable to proceed with the proposed transaction. Muthoot Finance had, in November last year, entered into a share purchase agreement with IDBI Bank, IDBI Capital Markets and Securities, IDBI Asset Management and IDBI MF Trustee Company to acquire 100 per cent equity shares of IDBI Asset Management and IDBI MF Trustee Company. The deal was estimated at ₹215 crore and would have paved the way for Muthoot’s entry into mutual fund asset management space. - Business Line
🍒 AIBEA to join trade unions in nationwide general strike on Nov 26 : The All India Bank Employees' Association ( AIBEA) on Tuesday said it would be joining the one-day nationwide strike on November 26 called by central trade unions to protest against the government's anti-labour policies. Ten central trade unions, except Bharatiya Mazdoor Sangh, will observe a nationwide general strike on November 26. "Lok Sabha in its recently held session has passed three new labour enactments by dismantling existing 27 enactments in the name of 'Ease of Business', which are purely in the interest of corporates. In the process, 75 per cent of workers are being pushed out of the orbits of labour laws since they will have no legal protection under the new enactment," the AIBEA said in a release. - economic times
🍒 AIBEA threatens strike over RBI panel’s idea to give banking license to corporates : The All India Bank Employees Association (AIBEA) has termed a Reserve Bank of India (RBI) internal panel’s recommendation to give banking license to corporate houses as “most retrograde and unwarranted”. The Association threatened to unleash countrywide agitation and organise repeated strikes if the Government and RBI allow corporate houses to take over banks. - Business Line
🍒 Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P : Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is "masking" problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the proportion of Non-performing loans (NPL) to total loans declined consistently so far this year. "While financial institutions performed better than we expected in the second quarter, much of this is due to the six-month loan moratorium, as well as a Supreme Court ruling barring banks from classifying any borrower as a non performing asset," S&P Global Ratings credit analyst Deepali Seth-Chhabria said. - economic times
🍒 Half of NBFCs which qualify for bank licence are corporate-owned : Around half of the finance companies with assets of over Rs 50,000 crore that meet the RBI’s size criteria to get a bank licence are part of corporate groups, while two are already part of banking groups. Not many standalone non-banking financial companies (NBFCs) are likely to qualify for the bank licence norms. The RBI’s internal working group in its report had said that well-run NBFCs, with an asset size of above Rs 50,000 crore, including those which are owned by a corporate house, may be considered for conversion into banks. Among the top 10 finance companies in terms of assets under management, Aditya Birla Capital, Bajaj Finance, L&T Finance Holdings, Mahindra Finance, Piramal, and Tata Capital are part of a corporate group. Of the remaining NBFCs, HDFC is already a promoter of a bank, while the Life Insurance Corporation, promoter of LIC Housing Finance, owns IDBI Bank. PNB Housing Finance, another large NBFC, is owned by Punjab National Bank. The RBI has said that companies have to wait till laws are changed to give the central bank powers to supervise corporate groups before giving them a bank licence. - economic times
🍒 RBI’s supervisory purview may not enthuse corporates : The possibility of their other businesses coming under the Reserve Bank of India’s (RBI) supervisory purview may hold back large corporate/industrial houses from applying for a bank license, say experts. An RBI internal working group recently recommended that large corporate/industrial houses may be allowed as promoters of banks. They will be allowed entry into the banking space only after necessary amendments to the Banking Regulations Act, 1949. These amendments will deal with connected lending and exposures between the banks and other financial and non-financial group entities; and strengthening of the supervisory mechanism for large conglomerates, including consolidated supervision. - Business Line
🍒 Mercedes-Benz India, SBI in a retail marketing pact : In a first-of-its kind collaboration, the country’s top luxury car maker Mercedes-Benz India has entered into a retail marketing tie-up with State Bank of India (SBI), to access latter’s HNI (high net-worth individual) customer base for selling its premium cars. Mercedes-Benz’s collaboration with the SBI is a unique initiative to generate enquiries as well as provide online booking facility coupled with attractive benefits through the bank’s extensive national penetration to reach potential customers. SBI and Mercedes-Benz will promote the partnership over online and offline channels, including across branches and dealerships in order to reach the maximum number of customers. SBI’s HNI customers in all 17 circles pan India, will have access to the collaboration with Mercedes-Benz. - Business Line
🍒 AU Small Finance Bank sells Aavas Financiers' shares worth Rs 530 crore : AU Small Finance Bank (AU SFB) sold 3.5 million shares of Aavas Financiers on the BSE on Monday, according to bulk deals' data. The value of these shares, at Rs 1,515.2 apiece is Rs 530.3 crore, as per data from the exchange. Part of this, worth Rs 236.4 crore, was bought by Nomura India Investment Fund Mother Fund (Rs 136.4 crore) and SBI Life Insurance Company (Rs 100 crore). The stock of Aavas Financiers was up 2.3 per cent at Rs 1,527.05 on Monday, while AU SFB closed 1.22 per cent lower at Rs 869.20. According to exchange data, AU SFB held 3.582 million shares in Aavas Financiers as on end September 2020. - Business Standard
🍒 Good performance masks problem assets for Indian banks, says S&P : The forbearance – moratorium on repayments for six months-- is masking problem assets for Indian banks arising out of Covid-19. Financial institutions, including banks, are likely to have trouble maintaining momentum after the proportion of non-performing loans (NPL) to total loans declined consistently in 2020, according to Standard and Poor’s (S&P). Rating agency S&P, in a statement, said while financial institutions performed better than we expected in the second quarter, much of this is due to the six-month loan moratorium, as well as a Supreme Court ruling barring banks from classifying any borrower as a non-performing asset. It released a report "The Stress Fractures In Indian Financial Institutions." The loan repayment moratorium ended on August 31, 2020. The non-performing loans in the banking sector will likely shoot up to 10-11 per cent of gross loans in the next 12-18 months, from 8 per cent on June 30, 2020. - Business Line
🍒 RBI rejects Muthoot Finance's plan to buy IDBI AMC over lack of consonance : The Reserve Bank of India has rejected Kerala-based Muthoot Finance's proposal to acquire IDBI AMC. Muthoot Finance today said that its request for a no-objection certificate was not acceded to by RBI on the ground that, “the activity of sponsoring a Mutual Fund or owning an AMC is not in consonance with the activity of an operating NBFC. Consequently, Muthoot informed Sebi that it is unable to proceed with the proposed transaction. Muthoot Finance Limited (MFIN), a Kerala-based gold loan NBFC, had signed a share purchase agreement to acquire IDBI Asset Management Limited and IDBI MF Trustee Company Limited in November 2019, for a consideration of around Rs 215 crore. Through this acquisition MFIN was planning to enter the Mutual Fund Asset Management space. - Business Standard
🍒 Retail loans pull credit growth back from brink : Outstanding non-food credit grew for the first time on a year-to-date basis in FY21, aided by the demand for retail loans during the festive season, according to data released by the Reserve Bank of India (RBI). In the fortnight ended 6 November, outstanding non-food credit stood at ₹103.2 trillion, slightly more than ₹103.1 trillion reported by banks as on 27 March. On an absolute basis, outstanding credit has grown ₹5,804 crore. Credit data is released by the central bank every fortnight, with details on outstanding bank loans, net of repayments made by borrowers. Credit growth is still languishing in the 5-6% range on a year-on-year (y-o-y) basis, but the festive season offered some respite when people spent more than earlier, bankers said. - Live Mint
🍒 Muthoot Finance ties up with Bajaj Allianz : Muthoot Finance said on Monday that it has has tied up with Bajaj Allianz General Insurance to provide insurance on gold jewellery as part of their new initiative. Known as ‘Muthoot Gold Shield’,the policy provides insurance coverage of gold jewellery for individuals at the time of closure of gold loan and release of gold ornaments. It will provide insurance coverage to the customers of Muthoot Finance as a loyalty product. The policy covers burglary, robbery, theft from insured person’s home,loss-intransit and 13 other disasters - financial express
🍒 Taking banking services to last mile: Women self-help groups driving financial inclusion in India : India’s policy towards financial inclusion as a propeller of economic growth is at the forefront of the Government’s considerations for some time now. In January 2020, the Reserve Bank of India published the National Strategy for Financial Inclusion 2019-2024 in a bid to integrate the country’s existing 190 million unbanked population into the financial mainstream. As part of the strategic objectives identified, the RBI laid out certain milestones, the foremost of which is to provide banking access to every village. Easier said than done for a country as vast and populous as India. To achieve this objective, the more effective model that has been identified and being adopted is the Banking or Business Correspondent model. While this model’s merit was acknowledged way back in 2007, its complex economics and logistics require the support of the Federal Government, the Banking System, and the States. While India’s banking sector is witnessing a paradigm shift led by technological evolution, infrastructure remains a veritable constraint, which limits access to financial services for poor people living in remote areas. - financial express
🍒 NBFCs cautious on RBI working group proposals on banking entry : Non-banking finance companies (NBFCs) are highly cautious in responding to the recent proposals from an RBI-working group on the conversion of large NBFCs into banks. One of the recommendations of the RBI working group was that well-run large NBFCs, with an asset size of Rs50,000 crore and above, including those which are owned by a corporate house, may be considered for conversion into banks. This should be subject to completion of 10 years of operations and meeting due diligence criteria and compliance with additional conditions specified in this regard, the working group said. To be sure, these are suggestions. The regulator will take a final call based on the report proposals. “There are already on-tap licensing norms existing in India,” said George Alexander Muthoot, Managing Director of Gold-loan NBFC, Muthoot Finance. “The RBI working group is only giving some modifications to the existing guidelines. And these are only suggestions. We will study when the final guidelines come,” said Muthoot. - moneycontrol.
🍒 Muthoottu Mini Financiers targets ₹1,000-cr business this fiscal : Muthoottu Mini Financiers Ltd, the Kerala-based NBFC, is aiming to achieve a business growth of ₹1,000 crore in the current fiscal through its expansion and restructuring strategy. The company has opened a zonal office in Vijayawada and 13 new branches in Andhra Pradesh as part of its expansion plan. The new branches were inaugurated digitally by Mathew Muthoottu, Managing Director of the company, from its Kochi head office. With the inclusion of these new branches and the zonal office, the company will now have 806 branches across 10 States. The company also plans to spread its network to Gujarat, Maharashtra, Delhi, Haryana, Telengana, and a few more branches in Andhra Pradesh, in the coming years, he said. - Business Line
🍒 Gold price plunges by Rs 1,049 to Rs 48,569 per 10 gram; silver price tumbles by Rs 1,588 to Rs 59,301 per kg : Gold prices plunged by Rs 1,049 to Rs 48,569 per 10 gram in the national capital on Tuesday following weak global cues and rupee appreciation, according to HDFC Securities. In the previous trade, the precious metal had closed at Rs 49,618 per 10 gram. Silver also faced selling pressure as it tumbled by Rs 1,588 to Rs 59,301 per kg from Rs 60,889 per kg in the previous trade. In the international market, gold was quoting lower at USD 1,830 per ounce and silver was flat at USD 23.42 per ounce. - moneycontrol.
🍒 Rupee settles 10 paise higher at 74.01 against US dollar : The rupee appreciated by 10 paise to close at 74.01 against the US dollar on Tuesday on sustained foreign fund inflows and positive development over coronavirus vaccine. Traders said investor risk sentiment improved amid growing hopes of an early rollout and efficacy of COVID-19 vaccines. Besides, strong domestic equities, sustained foreign fund inflows and weak American currency also supported the local unit.
🍒 NSE declares Karvy Stock Broking a defaulter; expels from membership : The National Stock Exchange (NSE) has declared Karvy Stock Broking as a defaulter for non-compliance with the regulatory provisions of the bourse. In addition, Karvy Stock Broking has been expelled from the membership of the exchange, the NSE said in a circular. The move, effective from November 23, was taken as the broker failed to comply with NSE’s guidelines, it added.
🍒 Lakshmi Vilas Bank stock tanks over 53 per cent in 6 days : Shares of Lakshmi Vilas Bank continued to face selling pressure for the sixth consecutive day and have tanked over 53 per cent during the period amid negative reports around the company. On Tuesday, the stock plunged 9.88 per cent to Rs 7.30 -- its lower circuit limit as well as one year low -- on BSE. At NSE, it plummeted 9.88 per cent to Rs 7.30 -- its lowest trading permissible limit for the day. Since last Tuesday (November 17), the stock has tanked 53.35 per cent on the BSE.
🍒 Bank stocks drive Nifty above 13,000; Sensex at a new high : The benchmark indices ended at record highs on November 24, with Nifty going past 13,000 for the first time. At the close, the Sensex was up 445.87 points, or 1.01%, at 44,523.02, and the Nifty ended 128.70 points, or 1%, higher at 13,055.20..
🙏 “All the Best… Have a Good n safe day.
No comments:
Post a Comment