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Banking/Finance-Industry-Economic Times
"Banks led by State Bank of India had come in to support the reconstruction scheme. As per regulations, banks cannot remain invested in other banks," managing director and chief executive Prashant Kumar told ET in an exclusive interaction.
Published on: July 27, 2024
The Reserve Bank of India (RBI) governor Shaktikanta Das expressed his concerns about structural changes taking place in the financial sector as a faster pace of credit growth than deposit growth potentially exposes the banking system to structural liquidity issues, while speaking at a media event last week.
Published on: July 26, 2024
The bank grew its total loans by 15% on year to Rs 3.48 lakh crore. It grew only 1% sequentially as loan growth in the microfinance book fell by more than 5% while growth in credit cards was almost flat. Corporate loans were up 12.8% on year to Rs 1.57 lakh crore.
Published on: July 26, 2024
In February, the RBI had ordered the credit card company to stop using an unauthorised route to make some commercial payments, per a Reuters report. The central bank has aimed to tighten scrutiny of the processes followed by financial technology, or fintech, companies.
Published on: July 26, 2024
Ten banks, led by Bank of India, have received Rs 334 crore from accumulated toll collections of Pune Sholapur Road Development Co Ltd, previously owned by IL&FS. They are set to receive an additional Rs 87 crore as part of a restructuring deal with new owners, Roadstar Infra Investment Trust. The deal includes elongating the loan tenure to 2032 and issuing non-convertible debentures payable over 20 years. Banks are expected to book gains in the next quarter.
Published on: July 26, 2024
IDBI Bank sale: The divestment of IDBI Bank progressed, with private data to be available in August. Secretary Tuhin Kanta Pandey stated that the process aims to identify appropriate buyers and finalize the strategic sale within this fiscal year. The government plans a calibrated strategy to ensure value creation for state-run firms.
Published on: July 26, 2024
Finance Minister Nirmala Sitharaman has indicated a significant shift in India's economic policy by suggesting that private companies may soon be able to invest in all public sectors. This interview with The Economic Times echoes the Finance Bill 2021, which has already received cabinet approval.
Published on: July 26, 2024
Indian banks need new strategies to attract depositors despite the current level of low-cost deposits being comfortable. Financial services secretary Vivek Joshi highlighted that CASA deposits, which were at 41% of total deposits, have seen a decrease from 45% in previous years. Joshi confirmed the government's ongoing plan to privatize two state-run banks and one general insurer. Although state-owned insurers showed improvements, further capital support is deferred. The government is also working on in-house credit assessment capabilities for MSMEs by PSBs and exploring a new credit model. Additionally, the budget includes a 3% interest subvention on education loans of up to ₹10 lakh, benefitting 100,000 students annually.
Published on: July 25, 2024
India's GST structure is set to move towards three tax rate slabs, according to CBIC chairman Sanjay Kumar Agarwal. The GST Council will finalize the plan in its next meeting. Customs duty overhaul is also planned, aiming for simplification and fewer disputes. The online gaming sector’s GST contribution is growing.
Published on: July 25, 2024
Indian corporates found raising funds through offshore syndicated loans more affordable in 2024 due to increased global investor interest. The volume remained stable at $13.3 billion. HSBC emerged as the top bookrunner, followed by DBS Group, Mitsubishi UFJ Financial Group, and Taipei Fubon Commercial Bank. Firms like Union Bank, JSW Steel, and Hero Fincorp have utilized this route.
Published on: July 25, 2024
Private life insurers in India have strategized to adhere to new IRDAI regulations requiring surrender value from the first year on non-participating policies. Companies like HDFC Life, ICICI Prudential Life, and SBI Life are adjusting their commission structures and product mixes to protect margins and maintain growth despite the regulatory changes.
Published on: July 25, 2024
The merger will make HLF an NBFC, said KM Balaji, chief financial officer, Ashok Leyland. The current book value of HLF is Rs 3,200 crore-based on Ashok Leyland's holding rate of Rs 60 per share in the balance sheet but when it gets listed, it could be much higher, he said.
Published on: July 25, 2024
The RBI has proposed that banks assign an additional 5% run-off factor for retail deposits enabled with internet and mobile banking facilities (IMB). Stable retail deposits enabled with IMB shall have a 10 % run-off factor, and less stable deposits enabled with IMB shall have a 15% run-off factor.
Published on: July 25, 2024
NPS Chawla, co-founder of law firm Aekom Legal, in an interaction with ET highlighted the Insolvency & Bankruptcy Code (IBC) 2016’s progress, addressing methods to improve resolution rates, such as mediation and third-party litigation funding. The discussion also touched on enhancing the framework for real estate insolvency cases and emphasized the need for continued evolution of the IBC system.
Published on: July 25, 2024
Under the revamped scheme, NBFCs, microfinance institutions and small finance banks will be eligible to provide loans credit guarantee scheme while courses which are not aligned to the National Skills Qualification Framework (NSQF) will also be eligible for loan, allowing aspiring candidates to undergo skills training for high-end fee based courses.
Published on: July 25, 2024
LCR is a liquidity requirement for banks to maintain at all times a certain proportion of high-quality liquid assets (HQLA), including cash, reserves with central banks, and federal government bonds, which can easily be converted into cash.
Published on: July 25, 2024
The Indian government and LIC are selling a nearly 61% stake in IDBI Bank, including a 30.48% stake of the Government of India and 30.24% of LIC. Potential investors have received security clearance from the Home Ministry and a nod from the Reserve Bank is expected soon. The RBI has been examining details submitted by potential investors for over 1.5 years, missing the deadline for privatisation.
Published on: July 25, 2024
India's private banks, pressured by regulators to improve credit-deposit ratios, have started selling retail loan portfolios. HDFC Bank sold a $597 million loan portfolio in June, and IDFC First Bank sold retail loans to Citigroup. Several lenders are now exploring similar deals for better CD ratios.
Published on: July 25, 2024
In a post-budget interview to ET, Pandey said the government will follow a "calibrated disinvestment strategy" without any specific "big-bang target" and ensure state-run firms, whether they are disinvestment candidates or not, continue to create value for themselves.
Published on: July 24, 2024
In her budget speech on Tuesday, finance minister Nirmala Sitharaman proposed to hike the short-term capital gains tax on all listed equity instruments to 20% from 15%. Long-term capital gains on listed equity instruments and specified financial and non-financial assets have been hiked to 12.5% from 10%. Moreover, the indexation benefit has also been removed from all the assets for computing long-term capital gains which will disallow any inflation adjustment, increasing the tax outgo.
Published on: July 24, 2024
Axis Bank witnessed a sequential decline in asset quality metrics for the June quarter due to seasonal effects on agriculture business. Gross non-performing asset ratio rose to 1.54%. Net profit marginally increased to Rs 6,035 crore as provisions doubled compared to the previous year. Credit costs are expected to rise, especially in the unsecured portfolio.
Published on: July 24, 2024
A bench comprising Chief Justice D Y Chandrachud and Justices JB Pardiwala and Manoj Misra stayed the high court order and issued notices to Aum Capital, representing the investors, and others on separate appeals of the RBI and the DBS Bank against the HC judgement.
Published on: July 24, 2024
RBI cancelled the licence of The Mahabhairab Cooperative Urban Bank due to poor financial health, effective July 24, 2024. The bank can't continue operations and will be liquidated. Depositors will receive insurance claims up to Rs 5 lakh from the DICGC. As of June 13, 2024, DICGC has already paid Rs 20.03 crore in insured deposits.
Published on: July 24, 2024
The Supreme Court stayed a Madras High Court order directing the Reserve Bank of India to conduct a fresh valuation of Lakshmi Vilas Bank (LVB) and DBS Bank India (DBIL) in their 2020 merger. The High Court's order included reconsideration of tier-2 bond write-offs and addressing shareholders' and bondholders' grievances.
Published on: July 24, 2024
HDFC Bank raises fixed deposit rates for 35 and 55 month tenures, offering 7.35% and 7.4% interest respectively. Senior citizens will receive 7.85% and 7.9% rates. CEO expresses dissatisfaction with Q1 deposit figures, focusing on deposit growth amid faster advances. RBI flags credit-deposit gap as sector concern. CEO Jagdishan aims to address this, emphasising deposit growth in Q1FY25 earnings call.
Published on: July 24, 2024
India's Finance Minister, Nirmala Sitharaman, has emphasized the government's intention to promote the rupee as an international currency. She announced plans to simplify rules and regulations to encourage foreign direct investment and overseas investment in India. The Reserve Bank of India (RBI) has been working on internationalising the rupee for years, allowing persons resident outside India (PROIs) to open rupee accounts outside the country, allow bank lending to PROIs, and facilitate FDI and FPI intvestment through special non-resident rupee and vostro accounts.
Published on: July 23, 2024
Experts in the investment management industry and tax and legal professionals suggest that the introduction of variable capital companies (VCC) in India as announced in the union budget. This could boost private equity and venture capital investments, with potential to attract more fund managers and reduce compliance requirements. It will provide greater flexibility for pooling funds and accommodating investors with different needs, addressing limitations of current trust structures.
Published on: July 23, 2024
IIHL made the highest cash offer of Rs 9,661-crore in the auctions and secured as much as 99 per cent of the lender's votes. The bid also included the Rs 500-crore cash balance with Reliance Capital going to the lenders, taking the overall recovery to Rs 10,200 crore or about 65 per cent as against Rs 16,000 crore principal secured debt the crippled company owed to lenders.
Published on: July 23, 2024
Fintech firm One 97 Communications, Paytm's parent company, has teamed up with Axis Bank to provide point of sales solutions and card payment machines to banks and merchants. Paytm's EDC devices offer store management services like inventory management and CRM. The partnership aims to enhance transaction efficiency, store management, and customer engagement, benefiting both companies. Axis Bank sees this collaboration as a way to expand their merchant acquiring portfolio and offer more payment solutions.
Published on: July 23, 2024
Indian banks are increasingly resorting to short-term borrowing, utilizing certificates of deposit, to bridge a funding gap driven by strong loan growth and slower deposit accumulation. As a result, the outstanding amount of these certificates surged to 4.3 trillion rupees ($51.4 billion) in the fortnight through July 12. This marks the highest level since June 2012.
Published on: July 23, 2024
Indian lenders such as HDFC Bank, Kotak Mahindra Bank, RBL Bank, and Union Bank of India are experiencing a decline in asset quality, with increases in fresh slippages and gross NPAs. Factors like a heatwave, elections, and seasonal issues are contributing to the challenges faced by these financial institutions.
Published on: July 22, 2024
The outage, caused by a cyber incident involving CrowdStrike, is expected to have had a limited impact on insurance claims due to existing policy constraints. A majority of claims related to the outage fall under business interruption coverage, which typically includes a waiting period. This means for the initial few hours of disruption, coverage does not activate, restricting the overall impact of the event.
Published on: July 22, 2024
The bank stated that Krishnan Venkat Subramanian (KVS) will join the bank on September 23, 2024, a day after Shyam Srinivasan ends his term at the south-based bank. He served the bank as MD and CEO for 14 years. Manian resigned from Kotak Mahindra Bank on April 30 after serving the bank for 29 years.
Published on: July 22, 2024
The Reserve Bank of India has approved Krishnan Venkat Subramanian as Managing Director & Chief Executive Officer of Federal Bank. Subramanian, who previously served as the Joint Managing Director of Kotak Mahindra Bank Limited, will start his three-year term on September 23, 2024.
Published on: July 22, 2024
The pre-budget Economic Survey highlights the need for a liquid Non-Performing Assets (NPA) market to facilitate bank acquisitions and asset turnarounds. The survey highlights steps taken by the government, such as setting up a bad bank and improving the insolvency ecosystem, which have helped bring NPAs to a multi-year low.
Published on: July 22, 2024
While referring to financial products misselling, the survey said that misselling and misrepresentation need acknowledgment, with firms compensating for consequential losses. This practice is important for stockbroking, fund management, banking, and insurance firms, the survey said.
Published on: July 22, 2024
NARCL started operation in January 2022 and acquires bad loans from banks, by paying 15% of the amount in cash and the rest in security receipts (SRs) which are to be matched with recovery over time. These SRs are guaranteed by the government, valid for five years, to be invoked by banks in case of resolution or liquidation of the bad loan.
Published on: July 22, 2024
"Agriculture premiums will likely rise from 2024 onwards, with an average real premium growth of 2.5 per cent over the medium term, supported by improvements in insurance infrastructure such as mobile applications and remote sensing for crop loss monitoring," the survey said.
Published on: July 22, 2024
The Economic Survey 2023-24 calls for closing regulatory gaps in the fintech sector and aligning with global best practices. It emphasizes moving towards data-based lending instead of judgment-based lending, particularly for small businesses. The survey also suggests evolving a common approach for user data like KYC across regulators and highlights India's goal to become a 'fintech nation.'
Published on: July 22, 2024
Speaking at an event organised by domestic rating agency Careedge, Tewari said, "We have to look at various avenues for helping tide over the challenge posed by lower deposit growth", and specifically mentioned a request to get bank deposits at par with capital market investments while referring to CRR and SLR.
Published on: July 22, 2024
The Economic Survey 2023-24 indicates a promising outlook for India's financial sector while cautioning against over-financialisation. It highlights a crucial transformation with a growing role for capital markets and diminishing banking dominance. The survey emphasizes the need for regulatory vigilance to mitigate vulnerabilities and support sustainable growth. Additionally, it underscores the importance of expanding financial services to promote investment, support MSMEs, and enhance financial inclusion. The survey also envisions India's evolution into a leading fintech nation with robust digital infrastructure and advanced technologies like AI/ML.
Published on: July 22, 2024
The external balance has been pressured by subdued global demand for goods, but strong services exports largely counterbalanced this, it added. Noting that global output is now somewhat more resilient than in 2022, the pre-Budget document said inflationary pressures are shrinking, and trade is set to recover, should there be no further geo-political shocks or flare-ups.
Published on: July 22, 2024
Banks are having to respond to the changing landscape by employing various strategies to maintain and grow their deposit bases, even as customers increasingly shift their funds towards investment avenues.
Published on: July 22, 2024
HDFC Bank's MD, Sashidhar Jagdishan, expressed disappointment over deposit growth for the June quarter, attributing shortfalls to unexpected current account outflows. Despite deposits growing 24.4% YoY to Rs 23.79 lakh crore, gross advances surged 52.6%, causing a regulatory concern on credit-deposit imbalance. The bank aims to slow advance growth and reduce the credit-deposit ratio.
Published on: July 22, 2024
Kotak Mahindra Bank addresses the impact of RBI embargo on margins and unsecured loan business. Plans for branch expansion and deposit mobilization initiatives are in progress. Current accounts and savings share decreases while average deposits see an increase.
Published on: July 21, 2024
HDFC Bank MD expresses disappointment over deposit numbers in volatile quarter. Concerns raised over wide gap between credit and deposit growth. CASA deposits crucial for low-cost funds. Net profit up 35.3% YoY. Emphasis on day-to-day basics to avoid performance pressures.
Published on: July 21, 2024
“On the wholesale category, we have seen that credit demand is high but the rates are benign,” said chief financial officer Srinivasan Vaidyanathan. “The spread over government securities is thinner and competition pushes it even down. We want to be circumspect in how we price and choose (loans). In the retail segment, we are leaders on mortgages but on the unsecured side, we have seen regulators talking about being cautious of credit quality. We are cautious of the credit and calibrate accordingly.”
Published on: July 20, 2024
Kotak Mahindra Bank's first-quarter FY25 financial report shows a remarkable performance, with a PAT of Rs 6,250 crore, an 81% increase YoY, largely due to divesting its stake in Kotak General Insurance. Excluding this gain, PAT stands at Rs 3,520 crore. NII rose to Rs 6,842 crore, NIM at 5.02%, and fees income up by 23% YoY. Customer base, assets, and deposits all showed significant growth, with improved asset quality.
Published on: July 20, 2024
Kotak Mahindra Bank's Q1 FY25 profit surged nearly 80% due to Zurich Insurance's acquisition of a 70% stake in Kotak General Insurance. The deal, completed in June 2024 for Rs 4,095.8 crore, added Rs 3,013 crore to the bank's consolidated profit. Kotak now holds a 30% stake in the insurance venture.
Published on: July 20, 2024
The Employees' Provident Fund Officers' Association has urgently requested the Union Labour Minister's intervention to address severe deficiencies in the EPF information technology infrastructure. The EPFOA highlighted persistent issues with software instability, frequent outages, and system failures affecting service delivery. They emphasized the need for immediate action to overhaul the EPFO application software for enhanced operational efficiency.
Published on: July 20, 2024
