banking | Business Upturn

IDFC First Bank pays Rs 645 crore to clients in Chandigarh branch incident, Rs 55 crore above initial estimate

Business Desk — Tue, 10 Mar 2026 03:40:12 +0000

IDFC First Bank has paid a net principal amount of ₹645 crore to clients affected by an incident at its Chandigarh branch, ₹55 crore more than the initial estimate of ₹590 crore disclosed earlier. The bank confirmed that all claims pertain to the same incident and are linked to the same branch, with no other pending claims as of 10 March 2026.

The bank has completed reconciliation of all relevant accounts at the Chandigarh branch and reported no further discrepancies. No additional claims have been received from any other entity across the country since 25 February 2026. The bank stated it will continue pursuing actions against the perpetrators to recover the dues.

Despite the incident, IDFC First Bank’s total deposit balance remained stable at ₹2,92,381 crore as of 28 February 2026, compared to ₹2,91,133 crore as of 31 December 2025. The bank characterised the matter as an isolated incident and thanked customers for their understanding.

The average Liquidity Coverage Ratio (LCR) for the ongoing quarter until 28 February 2026 stood at a comfortable 114 per cent. The bank anticipates growth in deposits and loans going forward, broadly in line with past trends.

Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).

DCB Bank appoints Pushan Mahapatra as Additional and Non-Executive Independent Director

Business Desk — Mon, 09 Mar 2026 15:17:15 +0000

DCB Bank’s Board of Directors has approved the appointment of Pushan Mahapatra as an Additional and Non-Executive Independent Director, effective March 10, 2026, for a three-year term, subject to shareholder approval.

The Board has also recommended Mahapatra’s candidature for the position of Non-Executive Part Time Chairman and authorised the bank to apply to the Reserve Bank of India for approval of this appointment. The bank will seek shareholder approval for his directorship within the prescribed timeframe under the Companies Act, 2013 and SEBI Listing Regulations.

Mahapatra is a career banker with over 40 years of experience, including 35 years with the SBI group. He has held senior leadership roles across Retail & Corporate Banking, Technology, and Internal Audit. He previously served as Managing Director and Chief Executive Officer of SBI General Insurance for nearly five years, where he scaled the company to become one of India’s leading private sector general insurance players. Following his superannuation, he joined the Zurich Insurance Group and has served as a Non-Executive Director with Zurich Kotak General Insurance since June 2024. He also serves as an Independent Director on the Board of Angel One Trustee Limited.

Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).

This article is written by Business Desk and reviewed by Aman Shukla before publication.

City Union Bank appoints Venkataramanan Srinivasan in key role

Finance Desk — Sat, 07 Mar 2026 14:52:07 +0000

City Union Bank Limited has announced the appointment of Venkataramanan Srinivasan to a significant position within the organisation. The decision was formalised on 7th March 2026, as indicated by the digital signature on the official document.

Venkataramanan Srinivasan, whose credentials include a strong background in the banking sector, has been recognised for his contributions and expertise. His appointment is expected to bolster the bank’s strategic initiatives and enhance its operational efficiency. The bank, headquartered in Tamil Nadu, continues to focus on expanding its reach and improving customer service across India.

City Union Bank has been actively pursuing growth opportunities and strengthening its leadership team to navigate the evolving financial landscape. The addition of Srinivasan is seen as a strategic move to align with the bank’s long-term goals and objectives.

Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).

Banking sector stocks today: Kotak Mahindra Bank falls 0.56%, ICICI Bank down 0.44%, SBI edges up 0.06%%

Aman Shukla — Mon, 12 Jan 2026 04:34:23 +0000

The Indian banking sector showed mixed movements in early trading on January 12, 2026. The Nifty Bank index traded around 59,035.55, reflecting a decline of approximately 0.36%.

The provided data lists NSE prices and percentage changes for various banking stocks at around 10 AM. Overall, the sector exhibited modest declines in many large private banks, while some small finance banks and select others showed slight gains or limited losses.

Key Observations from NSE Prices (as of 10 AM):

Major Private Banks:
- HDFC Bank: 935.40 (-0.38%)
- ICICI Bank: 1,398.10 (-0.44%)
- Kotak Mahindra Bank: 2,114.80 (-0.56%)
- Axis Bank: 1,271.00 (-0.08%)
Public Sector Banks:
- State Bank of India (SBI): 1,001.10 (+0.06%)
- Bank of Baroda: 299.70 (-0.32%)
- Indian Bank: 823.15 (-1.17%)
- PNB: 122.50 (-0.33%)
Small Finance Banks (mixed performance):
- AU Small Finance Bank: 1,002.65 (+0.35%)
- CSB Bank: 514.65 (+1.77%)
- Equitas Small Finance Bank: 66.49 (-0.57%)
- Ujjivan Small Finance Bank: 58.76 (-0.98%)
Other Notable:
- IndusInd Bank: 890.35 (+0.92%) — one of the stronger performers.
- Bandhan Bank: 143.03 (-0.69%)
- IDFC First Bank: 85.40 (-0.70%)
- Yes Bank: 22.70 (-0.61%)

Many stocks traded with declines under 1%, while a few like CSB Bank and IndusInd Bank posted positive changes.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.

Indian government considers relaxing retirement age for PSB and LIC Chiefs

Vanshika Lodhi — Sun, 27 Aug 2023 21:54:38 +0000

Dinesh Khara, the current Chairman of the State Bank of India (SBI), may have his tenure extended as the government is contemplating increasing the retirement age for heads of all public sector banks and LIC. A proposal to raise the retirement age limit for managing directors of public sector banks (PSBs) from 60 to 62 years is also under consideration, according to a senior government official.

Khara, a veteran banker, took over as the chairman of SBI in October 2020 for a three-year term. As per existing norms, the SBI chairman can hold the post until the age of 63 years. Khara will turn 63 in August next year.

A senior government official stated that discussions are underway to increase the age limit for retirement of chiefs of PSBs and Life Insurance Corp (LIC). Simultaneously, talks are also being held to raise the superannuation age for managing directors of PSBs to 62 years from 60 years. However, a final decision is yet to be taken on the retirement age for heads of PSBs and LIC.

Currently, the retirement age of LIC chairman is 62 years. If the proposal is approved, it could result in longer tenures for chiefs and managing directors of PSBs and LIC.

This development has garnered significant attention and has been widely reported in the media. It remains to be seen what decision the government will take and how it will impact the banking and insurance sectors in India.

IBPS RRB notification 2023 released: registration for PO clerk recruitment begins tomorrow at ibps.in

Viditha Ganji — Wed, 31 May 2023 14:50:41 +0000

The Institute of Banking Personnel Selection (IBPS) has announced the commencement of the IBPS Clerk PO Recruitment 2023, inviting applications from eligible candidates. Starting from July 1st to July 21st, 2023, interested candidates can apply for the recruitment through the official website ibps.in. The Common Recruitment Process for Regional Rural Banks (CRP RRBs XII) aims to fill positions for Group A-Officers and Group B-Office Assistant (Multipurpose) through online examinations, tentatively scheduled for August and September 2023. The interviews for Group A-Officers are expected to take place in November 2023.

The IBPS has released a notification for the IBPS Clerk PO Recruitment 2023, signaling a significant opportunity for candidates seeking a career in the banking sector. Eligible individuals who wish to apply can do so starting tomorrow by visiting the official website at ibps.in.

According to the IBPS short notice, the online examinations for the CRP RRBs XII will be conducted for the recruitment of Group A-Officers (Scale-I, II & III) and Group B-Office Assistant (Multipurpose). The interviews for Group A-Officers (Scale-I, II & III) will be organized by the Nodal Regional Rural Banks, in collaboration with NABARD and IBPS, tentatively in November 2023.

To apply for IBPS RB PO 2023, candidates can follow these steps:

Step 1: Visit the official website at ibps.in
Step 2: Click on the RB PO Clerk application link on the homepage
Step 3: Complete the registration process and fill out the application form
Step 4: Upload all the necessary documents and make the required fee payment
Step 5: Review the application details and submit the form
Step 6: Download and print the application form for future reference

Prospective candidates are advised to carefully go through the official notification and follow the application process accordingly. It is crucial to meet the specified deadlines and ensure accurate and complete submission of the application materials.

The IBPS Clerk PO Recruitment 2023 presents a valuable opportunity for individuals aspiring to pursue a rewarding career in the banking sector. With the official notification now released, interested candidates can gear up to embark on the application process and prepare themselves for the forthcoming online examinations.

Candidates are encouraged to stay updated with the official IBPS website and regularly check for any further announcements or changes related to the recruitment process. Aspiring candidates are urged to make the most of this opportunity and showcase their potential to secure a promising position in the banking industry.

Banks to remain closed on these days in October 2022; Check out full list of holidays here

Aryan Jakhar — Sat, 01 Oct 2022 05:28:16 +0000

List of bank holidays for the month of October has been made public by the Reserve Bank of India (RBI). The RBI holiday calendar indicates that there will be a total of 21 days this month when banks are closed. All Sundays and the second and fourth Saturdays of each month fall under this category.

The RBI creates a list of holidays for each month. It is announced under three headings: Real Time Gross Settlement Holiday, Negotiable Instruments Act Holiday, and Banks’ Closing of Accounts.

Several regional holidays, like as Deepawali, Karva Chauth, and Durga Puja, will also see banks closed.

Due to regional holidays, banks won’t be open for 15 days in October, per the RBI holiday calendar. It is therefore recommended that you schedule your tasks linked to banks accordingly. Although the branches will be closed during these holidays, services like online banking and UPI won’t be impacted.

The complete list of bank holidays for October 2022 is provided below:

October 2: First Sunday

October 8: Second Saturday

October 9: Second Sunday

October 16: Third Sunday

October 22: Fourth Saturday

October 23: Fourth Sunday

October 30: Fifth Sunday

National and Regional Holidays:

October 1: Half Yearly Closing of Bank Accounts – Gangtok

October 3: Durga Puja (Maha Ashtami) – Agartala, Bhubaneswar, Guwahati, Imphal, Kolkata, Patna, and Ranchi.

October 4: Durga Puja/Dussehra (Maha Navami)/Ayudha pooja/Janmotsav of Srimanta Sankardeva – Agartala, Bengaluru, Bhubaneswar, Chennai, Gangtok, Guwahati, Kanpur, Kochi, Kolkata, Patna, Ranchi, Shillong, and Thiruvananthapuram.

October 5: Durga Puja/Dussehra (Vijaya Dashmi)/Janmotsav of Srimanta Sankardeva – All except Imphal.

October 6: Durga Puja (Dasain) – Gangtok

October 7: Durga Puja (Dasain) – Gangtok

October 8: Milad-i-Sherif/Eid-i-Milad-ul-Nabi (Birthday of Prophet Muhammed) – Bhopal, Jammu, Kochi, Srinagar, and Thiruvananthapuram.

October 13: Karva Chauth – Shimla

October 14: Friday following Eid-i-Milad-ul-Nabi – Jammu and Srinagar.

October 18: Kati Bihu – Guwahati.

October 24: Kali Puja/Deepavali/Diwali (Laxmi Pujan)/Naraka Chaturdashi – All except Gangtok, Hyderabad, and Imphal.

October 25: Laxmi Puja/Deepawali/Govardhan Pooja – Gangtok, Hyderabad, Imphal, and Jaipur.

October 26: Govardhan Pooja/Vikram Samvant New Year Day/Bhai Bij/Bhai Duj/Diwali (Bali Pratipada)/Laxmi Puja/Accession Day – Ahmedabad, Belapur, Bengaluru, Dehradun, Gangtok, Jammu, Kanpur, Lucknow, Mumbai, Nagpur, Shimla, and Srinagar.

October 27: Bhaidooj/Chitragupt Jayanti/Laxmi Puja/Deepawali/Ningol Chakkouba – Gangtok, Imphal, Kanpur, and Lucknow.

October 31: Sardar Vallabhbhai Patel’s Birthday/Surya Pashti Dala Chhath (Morning ardhya)/Chhath Puja – Ahmedabad, Patna, and Ranchi.

EMIs would increase after a 50 bps lending rate increase by HDFC

Aryan Jakhar — Fri, 30 Sep 2022 13:15:05 +0000

In response to the Reserve Bank of India (RBI) raising the policy repo rate by 50 basis points (bps) to 5.9% during its Monetary Policy Committee (MPC) meeting on Friday, leading housing finance provider HDFC Ltd. increased its lending rate by 50 basis points on Saturday. HDFC has undertaken a total of seven rate increases during the previous five months.

“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 50 basis points, with effect from October 1, 2022,” the company said in a statement.

HDFC Limited offers house loans with interest rates beginning at 8.10% p.a. Loans for new home purchases, balance transfers, home renovations, and home additions are all subject to this interest rate. The interest rates for the aforementioned home loans are variable throughout the loan’s life and are based on HDFC’s benchmark rate (“RPLR”). Due to the firm raising its key lending rate, both new and existing borrowers will now be forced to make EMI payments that are 0.50% higher.

The repo rate was raised by 50 basis points on September 30 by the Reserve Bank of India (RBI), marking the fourth hike since May. The repo rate will shortly increase the cost of funding for banks and financial institutions, and additional banks and financial institutions are likely to follow. Meanwhile, because it will now cost banks and lending organisations more to borrow money as a result of the increase in the repo rate, both present and new loan borrowers will be obliged to make higher equivalent monthly instalments (EMIs) for their vehicle and home loans.

Savings bank deposits drop while FDs increase in banks

Aryan Jakhar — Sat, 24 Sep 2022 11:33:27 +0000

Even as loan growth accelerates, banks are observing a shift in deposits from savings accounts to fixed deposits.

All scheduled banks reported total deposit accretion of ₹62,196.47 crore for the reporting fortnight that ended on September 9, 2022. This increase is most likely attributable to depositors shifting funds from savings accounts to fixed deposits (FDs) and the formation of new FDs.

According to the most recent data from the RBI, saving bank deposits at banks decreased by ₹54,021.77 crore over the course of a fortnight while FDs increased by ₹1,16,218.25 crore.

This occurs as banks raise interest rates against the backdrop of the steady drying up of systemic liquidity, while FDs are yielding relatively greater returns.

The expansion of incremental credit kept outpacing the rise of deposits. In contrast to deposit increase of ₹62,196.47 crore, banks reported credit growth of ₹95,751.7 crore in the reporting week.

India Ratings increases FY23 bank credit growth projection to 13% while maintaining outlook

Aryan Jakhar — Mon, 19 Sep 2022 08:00:38 +0000

As the banking industry’s health continues to be at its best in decades, India Ratings and Research (Ind-Ra) announced on Monday that it has kept the outlook banks at improving for the remainder of 2022–2033.

Additionally, India Ratings increased its prediction for loan growth in FY23 from 10% to 13%. There are numerous factors influencing this upward revision, it stated. Given the accumulation of macrouncertainties, the demand for working capital is expected to increase even as capex is likely to moderate somewhat. With the adverse interest rate cycle, there is also a noticeable shift from capital markets to the banking system for longer-term funding, and the recovery in credit demand from the corporate segment is better than anticipated.

The report stated that the major financial measures are projected to keep getting better during the remainder of FY23, supported by strengthening balance sheets and an improving prognosis for loan demand, particularly for working capital.

According to the rating agency, the banks’ stable rating outlook for FY23 reflects their diminishing legacy asset quality difficulties, strengthening balance sheets, controllable covid-19 impact, and forecasts for increased profitability across the banking industry.

“Within the banking universe, private sector banks are likely to continue to gain market share, though the pace of gains is likely to moderate as public sector banks (PSBs) expand the loan portfolio faster, supported by strong balance sheets and supportive credit demand in the system,” it said.

The agency anticipates that PSB and private sector bank lending costs would converge and trend lower, which might counteract the banks’ anticipated rise in deposit costs. However, as competition for deposits increases, private sector banks are likely to pick up speed on deposit growth, underpinned by the provision of stronger returns, it said.

Face authentication-based eKYC is made available by Kotak Mahindra Bank

Aryan Jakhar — Tue, 06 Sep 2022 14:29:54 +0000

On Tuesday, Kotak Mahindra Bank Limited (KMBL) announced that it had made facial authentication-based Aadhaar e-KYC available for client onboarding. “Kotak is one of the first banks to go live with enabling client onboarding via face authentication-based e-KYC,” the bank said in its official statement.

Through a mobile application created by UIDAI, authentication is performed. The authentication won’t involve the use of any additional hardware. The bank claimed that because the full authentication process may be finished in only a few minutes, this option offers the convenience of significant time savings.

“Kotak Mahindra Bank believes in using the latest technology to bring in new and improved digital banking solutions to our customers. We would like to thank UIDAI for introducing the face authentication app through which we can offer this seamless digital onboarding to our customers,” said Puneet Kapoor, President-Products, Alternative Channels and Customer Experience Delivery, Kotak Mahindra Bank.

On Kotak Bank Digital Savings Accounts, the face authentication method based on Aadhaar is employed as an alternative to the present fingerprint authentication method.

Customers can authorise the completion of their KYC using Aadhaar-based authentication when they visit the bank branch. “They will be authenticated using the Aadhaar authentication process as prescribed in the bank regulations,” Kotak bank said. A successful face authentication checks the identity of the person and confirms that the physical face being scanned for verification matches the one that was taken at the time of enrolling in the Aadhaar number.

By using this approach, the bank will be able to onboard customers at a lower cost because the expense of purchasing and maintaining a fingerprint device will no longer be necessary. “This modality will also provide resolution to fading fingerprint miniature capture issues and related failures, especially for sourcing in the rural areas where farmer fingerprints change over the period of time,” the bank said in its statement.

HDFC Bank brings in new SMS banking facility

Pranay Maniar — Tue, 06 Sep 2022 08:21:18 +0000

For its customers, the private sector bank HDFC Bank has launched a new SMS banking feature. The bank asserts that users can now access a variety of banking services 24 hours a day. 365 days a year, wherever they may be. Customers may now check account balances and summaries, apply for loans, manage credit cards, obtain chequebooks, and more with the new SMS banking feature.

The HDFC Bank’s new SMS service incorporates AI technology, customers no longer need to memorise or write long pre-defined keywords to conduct SMS banking. Instead, individuals can text according to their preferences and the AI will comprehend what they mean, enabling them to converse freely and conveniently.

HDFC Bank has said via a Tweet that “Banking services are now a text away! #BankOnUs and access a wide range of banking services from wherever you are, round-the-clock. 24/7 x 365! To get started, SMS “Register” “Last 4 digits of customer ID” “Last 4 digits of account number” to 7308080808.”

Banking services are now a text away!#BankOnUs and access a wide range of banking services from wherever you are, round-the-clock. 24/7 x 365!

To get started, SMS “Register” “Last 4 digits of customer ID” “Last 4 digits of account number” to 7308080808 pic.twitter.com/SWSCyY678m

— HDFC Bank (@HDFC_Bank) August 25, 2022

In order to get started with the new SMS banking facility of HDFC Bank, patrons are required to complete the registration process. For the same, they need to SMS “Register” “Last 4 digits of customer ID” “Last 4 digits of account number” and then sent it to 7308080808 from their registered mobile number. HDFC Bank has mentioned on its website that “If you register through by sending an SMS on 7308080808, you will be able to access SMS Banking instantly. If you fill in the application form to register for SMS Banking, it will take 4 working days to complete the registration process from the time you submit your application form.”

After you register for SMS Banking, you will get the following SMS from the bank on the mobile number you provided. “Successfully registered!~Your account no. ending with ‘xxxx’ is set as default account for HDFC Bank SMS Banking services.Check our Terms and Conditions – hdfcbk.io/k/DUvOddFMOtz for further details.~To get your account balance, SMS your query to 7308080808.~Please call on 1860-267-6161 for further assistance.”

The new SMS banking is Currently available only in the English Language, and it is available 24/7 and with zero charges. Customers can conduct SMS Banking operations from anywhere in India or overseas if they have national or international roaming enabled on their mobile device. “With SMS Banking you can access your account on your mobile wherever you are. Access your bank account, make banking transactions, and monitor your accounts and fixed deposits on your mobile. We are the only bank to offer query based SMS Banking service for 18 transaction,” stated HDFC Bank on its website.

Can I sign up via ATM for SMS Banking?

Customers of HDFC Bank can also sign up for new SMS banking at a branch ATM. They can successfully execute the identical assignment by following the below-listed steps.

Visit your nearest HDFC Bank ATM
Insert your debit-cum ATM card and enter the PIN
Go to ‘More Options’ on the home page and enter your registered mobile number for SMS banking registration.
Tap ‘Confirm’ on the menu and you will receive a successful message on the mobile number you provided.

HDFC Bank SMS Banking Transactions & Services

Customers can conduct the transactions and services listed below after registering for the new AI-enabled SMS banking service, according to HDFC Bank’s website.

Account Services:

Balance Enquiry

Cheque Book Request

Account Statement Request

Recent 7 Days Transactions

FD Summary

Debit Card Dispute

Loans:

Personal Loan

Auto Loan

Business Loan

Consumer Durable Loan

Credit Card:

View Reward Points

Convert Big Spends To EMI

Credit Card Dispute

Others:

FastTag Registration

Open Fixed Deposits

Insurance – LI & GI

Punjab & Sindh Bank hikes up interest rates on fixed deposits less than Rs 2 Crore

Pranay Maniar — Sun, 21 Aug 2022 10:55:00 +0000

Public sector bank, Punjab and Sindh Bank (PSB) has raised its interest rates on fixed deposits which are less than Rs 2 Crore. According to the bank’s website, the hiked-up rates will be in effect on 22^nd August 2022.

The bank has upraised the interest on FDs with terms spanning from 31 days to 10 years as a result of this new arrangement.

The bank will continue to provide an interest rate of 2.80% on fixed deposits maturing in 7 days to 30 days, but it has increased that rate by 20 basis points to 3.00% from 2.80% on fixed deposits maturing in 31 to 45 days.

Fixed deposits with maturities between 46 and 90 days will receive an interest rate of 3.80%, up from 3.70% before, a 10 basis points increase. Fixed deposits with maturities between 91 and 120 days will now offer an interest rate of 3.95%, up from 3.90% previously.

The interest rate on fixed deposits that mature in 121 to 179 days has been upped by 10 basis points, or from 3.90% to 4.00%.

On fixed deposits maturing in 180–269 days, Punjab & Sind Bank will now give an interest rate of 4.50% which is up from 4.45%, while on fixed deposits maturing in 270–364 days, the bank will now offer an interest rate of 4.65% (up from 4.50%, a 15 basis point increase).

Fixed deposits with maturities between one and two years will now get an interest rate of 5.65%, up from 5.25%—a 40 basis point increase—and those with maturities between two and three years will now offer an interest rate of 5.80%, up from 5.35%—a 45 basis point increase.

Interest Rates on “PSB FIXED DEPOSIT TAX SAVER SCHEME” for 5 years will be 5.75% p.a. for the general public, 6.25%p.a. for senior citizens and 6.75% p.a. for staff members and ex-staff members / ex-staff members (Sr. Citizen).

RBL Bank shares plummet 19% after appointment of new CEO & MD

News Desk — Mon, 13 Jun 2022 09:49:18 +0000

RBL Bank Limited shares hit a new low of Rs 92.75 per share after falling more than 18% on the BSE intraday during Monday’s trading session. After R Subramaniakumar was named Managing Director and CEO of the bank on Saturday for a three-year term.

The position of MD and CEO has been posted nearly six months. After Vishwavir Ahuja resigned due to intervention by the Reserve Bank of India. RBL Bank was investigated by the RBI in December 2021, after which the regulator appointed its CGM Yogesh Dayal as an additional director on the bank’s board for a two-year term.

CLSA, a global brokerage firm, sees leadership uncertainty and liability headwinds for RBL Bank, adding that the company’s CEO appointment raises several questions. The brokerage reduced the rating from Buy to Outperform. With a target price of Rs 130 per share (15 percent upside).

Path of recovery still uncertain

Kotak Institutional Equities stated that the path of recovery for the bank is still uncertain. The appointment of MD & CEO addressed one concern, but issues on the bank’s strategy given its reliance on high-yielding product segments, employee retention, and recovery in return ratios and growth remain unclear.

It kept the bank’s RS rating. Because it has yet to gain clarity on the new team’s thought process. And does not expect the management to make any major announcements in the near term. The stock is cheap. But it lacks the re-rating trigger that could propel it higher from current levels. According to the company.

There are several mid-cap banks that are slightly more expensive than RBL, but Covid’s recovery appears to be better and more cyclically well-positioned. Kotak Institutional was also added.

In the last six months, the stock has corrected by more than 51%. While the BSE Sensex has fallen by more than 9%. At around 11 a.m., the scrip is trading nearly 16% lower at Rs 95 per share. Compared to a 2.6 percent drop in the benchmark index.

RBI hikes repo rate by 50 bps to 4.90%

News Desk — Wed, 08 Jun 2022 05:30:32 +0000

In its fight against soaring inflation, the Reserve Bank of India (RBI) raised the repo rate by 50 basis points to 4.90 percent on Wednesday. As widely expected. The rate increase follows an out-of-cycle increase last month. The RBI slashed the repo rate in March 2020 to mitigate the impact of a covid-induced lockdown, and kept the benchmark interest rate unchanged for nearly two years before raising it on May 4, 2022.

RBI expected to change inflation forecast

“We do expect the RBI to change its inflation forecast by 70-80bps. From 5.7% earlier citing the change in global and domestic price pressures. Although the growth forecast is expected to be kept unchanged at 7.2% for FY23″.: HDFC Bank Treasury Research Team

“Not an easy job for the central banker. Recently released GDP data showed a sliding y-o-y growth for private consumption expenditure. An indication that economic activity remains slow. On the other hand, the inflation surprise has brought to the fore the need for the RBI to tighten monetary policy. The government has also joined the RBI in an attempt to contain inflationary pressures in the economy. We see the RBI extending its 40bps repo hike of May with a 35bps increase in June, followed by 25bps each in August and September,” said Indranil Pan, chief economist at Yes Bank.

State Bank of India shares fall ahead of dividend date

News Desk — Wed, 25 May 2022 09:11:51 +0000

State Bank of India (SBI) shares fell more than 1% to 457 on the BSE. As the stock went ex-dividend in Wednesday’s trades, a day before the dividend’s record date. For stocks, the ex-dividend date is normally one business day before the record date.

SBI’s board declared a dividend of 7.10 per equity share (710 percent) for the fiscal year ended March 31, 2022. While announcing its Q4FY22 results. The record date for the aforementioned dividend is set for Thursday, May 26, 2022. The bank has set Friday, June 10 as the date for dividend payment, and the dividend will be distributed prior to that date.

SBI reported a boost in Profits

India’s biggest bank reported a 41% boost in standalone net profit at 9,113.5 crores. For the quarter ended March 2022, its highest quarterly profit ever. But fell short of analysts’ assumptions as bad loan provisions expanded sequentially.

SBI’s net interest income (NII), which is the difference between interest earned. And interest expended, increased by 15% to 31,198 crore in Q4FY22 from 27,067 crore the previous year (YoY).

SBI shares are up about 10% year on year, but the bank’s stock is down more than 3% year to date (YTD), compared to a 9% drop in the benchmark Sensex during the same period.

Cash circulation increased by 16.7% as compared to cash flow in 2020: RBI data

News Desk — Thu, 23 Dec 2021 15:04:41 +0000

Despite a surge in the use of Unified Payments Interface (UPI) transactions across the country in the last four years, cash still rules India as people may be holding as much as Rs 3.3 lakh crore cash for various emergency purposes due to the outbreak of COVID-19 in the country, estimates a State Bank of India report.

“Our estimate shows that because of the outbreak of COVID-19, people may have held as much as Rs 3.3 lakh crores in cash for emergency purposes beginning FY21,” said SBI Research Desk’s report titled: A Guide to the formalisation of Economy since FY18.

The report further adds, “If we adjust for such current transactions, the currency to GDP ratio for pure payment purposes may have actually declined in FY21 as compared to the previous years.”

Data from the Reserve Bank of India showed that India has nearly touched Rs 29 lakh crore. The total value of cash in circulation has touched from Rs 28,26,863 crore to Rs 24,20,975 crore in 2020, a value increase of 16.7 per cent has been registered.

However, “the circulation of currency has decelerated sharply to 7.9 per cent in November 2021 from pandemic which influenced the cash surge of 22 per cent a year,” said MoS for Finance Pankaj Chaudhary.

IT Minister encourages banks to create digital platform for credit availability

Aviyukta Adlakha — Sun, 05 Dec 2021 13:09:10 +0000

IT Minister Ashwini Vaishnaw encouraged the banking industry to create an innovative digital platform like UPI for providing quick and easy credit to MSMEs, small businessmen, and others at the bottom of the aggregate in the coming three months.

He emphasized that the basic features required to create such a platform as the ecosystem of Aadhaar, mobile phones, UPI platform, and Digi locker are already available.

Vaishnaw spoke at the ‘Digital payment Utsav’ which was part of a week-long showcase of India’s achievements in digital space titled ‘Azadi ka Digital Mahotsav’ held in Delhi.

“You have today a good ecosystem of Aadhaar, mobile phones, UPI platform, Digi locker, practically everything you need to create this ecosystem is today available.

He added at the event that the idea is to ensure that easy credit at good terms, through a flawless process can be made available to people at bottom of the pyramid especially for micro and small industries, small businesses, street vendors amongst others.

#AzadiKaDigitalMahotsav #AmritMahotsav

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'Digital Payments Utsav' – A day to celebrate & showcase India’s might in digital space.

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Bank unions call for nationwide strike on 16-17 December

News Desk — Thu, 02 Dec 2021 14:39:56 +0000

A two-day nationwide walkout has been announced by the United Forum of Bank Unions, an umbrella group of nine unions, in protest of the government’s proposal to privatise public sector banks on December 16 and 17. In the Winter Session of Parliament, the national government will introduce the Banking Laws (Amendment) Bill 2021.

The Bill’s goal is to privatise two public sector banks, and adjustments to the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, as well as incidental amendments to the Banking Regulation Act of 1949, are required.

While presenting the Budget for 2021-22, Finance Minister Nirmala Sitharaman announced the privatisation of PSBs as part of a disinvestment campaign to raise $1.75 lakh crore. Mahesh Mishra, the convener of the United Forum of Bank Unions, said on Thursday that the government hopes to approve the Banking Reforms Bill in this session of Parliament, clearing the way for privatisation.

In a statement, he added that as part of the action, the United Forum will organise a sit-in against the Bill commencing on Friday (December 3), and a two-day nationwide strike will be held on December 16 and 17 in protest of the Bill.
Bank unions, according to Mishra, favour policies that promote the country’s economic development, as well as employee and customer-friendly banking policies, but not bank privatisation.

RBI refines standards for upgrading accounts classified under NPAs

Ayisha Farah — Fri, 12 Nov 2021 17:55:13 +0000

On Friday, the Reserve Bank of India refined that lenders should reclassify a non-performing asset to a “standard” asset only when the borrower pays the complete arrears of interest and principal.

The regulator has remarked that some lending organisations promoted accounts listed as non-performing assets (NPAs) to the ‘standard’ asset classification upon fee of only interest overdue, partial overdue, etc.

“It has been observed that some lending institutions upgrade accounts classified as NPAs to ‘standard’ asset category upon payment of only interest overdue, partial overdue, etc. To avoid any ambiguity in this regard, it is clarified that loan accounts classified as NPAs may be upgraded as ‘standard’ assets only if the borrower pays entire arrears of interest and principal,” the RBI said.

It has also directed lenders to specify particular due dates for payment of loans, compensation frequency, break up between principal and interest, and examples of SMA/NPA classification dates in the loan agreements.

The standards currently say that an amount will be treated as ‘overdue’ if not paid on the due date fixed by the bank. The central has witnessed that the due dates for repayments are seldom not explicitly considered in the loan agreements. Instead, a classification of due dates is mentioned, leaving scope for different versions.

“Henceforth, the exact due dates for repayment of a loan, frequency of repayment, break up between principal and interest, examples of SMA/NPA classification dates, etc. shall be clearly specified in the loan agreement, and the borrower shall be apprised of the same at the time of loan sanction and also at the time of subsequent changes, if any, to the sanction terms/loan agreement till full repayment of the loan”, the RBI said.

Also, the regulator said that the accounts that have availed of the interim facility and the specific date of origin of payment should also be defined in the loan agreements. The RBI has said the lenders have to follow these instructions by December 31, 2021, as new loans are affected, but in the case of enduring loans, these directions should be followed as and when such loans become due for renewal/review.

Federal Bank introduces credit card variants for digital payments through Visa

Sneha Sengupta — Sun, 05 Sep 2021 09:09:09 +0000

On September 5, the Federal Bank proclaimed the launch of its credit card to facilitate digital payments through Visa. The financial company said in an official statement that, the launch was aligned with the bank’s strategy to improve unsecured and high yielding books. “The cards will have three variants—named Celesta, Imperio and Signet– designed to cater to the needs of different customer segments and would be offered to customers with a range of powerful offers,” stated the official statement.

Commenting on the specifications MD & CEO of Federal Bank Shyam Srinivasan said, Card issuances will be “digital-first” through a “three-click” instant credit card approach and the cards will be immediately available for use in the bank’s mobile app FedMobile.

TR Ramachandran, Group Country Manager of India and South Asia at Visa averred, “With the number of credit cards currently far lower than credit eligible customers in India, we see great potential in such partnerships.”

The offers granted by the bank are Amazon Gift vouchers with reward points, BOGO (buy one get one) at INOX movie theatre, membership schemes, a percent of fuel surcharge waiver, 15 percent dining discounts, and special lounge access at airports across India. The federal Bank is on the verge to introduce credit cards for its users in accordance with the National Payments Corporation of India’s (NPCI) RuPay.

RBI to make changes in ATM withdrawal, salary, EMI, others from August 1

Abhinay Talkhedkar — Sat, 31 Jul 2021 06:22:57 +0000

RBI is about to clear the way for banks to execute transitions from revision to ATM interchange fee hikes in the overall banking assessments. These changes will be implemented from 1 August 2021.

From the beginning of August 2021, a ripple of novice novelties to your banking system will occur. It is going to affect the entire economy and not just personal finance.

According to the reports of News18, here are some modifications you need to look into in the coming days:

Revised charges of ICICI bank

One of the biggest moneylenders will release updated limits for their cash transactions. ATM interchange and cheque book credits for its internal savings account holders will be in revised form. 1st August is the date of implementation. For financial and non-financial transactions in the metro cities of India (New Delhi, Chennai, Mumbai, Kolkata, Hyderabad & Bengaluru) first three transactions will be free. If someone crosses the limits of doing transactions, then they will have to pay a charge of Rs 20 on financial transactions and Rs 8.50 on non-financial ones. Cardholders of Gold, Magnum, Silver, Titanium, etc. will undergo the effects from next month.

ATM cash withdrawal charges to be augmented

There were more changes interjected in June that would see the interchange fee for cash withdrawals at ATM as per the mandate of the Reserve Bank of India. With the latest modifications to the rules, Revised interchange fees will be Rs 17. The hike of Rs 2 has been done to cope up with the maintenance charges of the machines. For non-financial transactions fees will just increase by Rs 1. The interchange fee applies to those who withdraw money from ATMs of other banks.

Changes in Salary, EMI, Premium Payment

The National Automated Clearing House (NACH) amenities will be open and operational daily. National Payments Corp. of India (NPCI) operates NACH. Payment of dividend, salary, and pension, interest will be the facilities provided. Payments of electricity, telephone, gas, insurance premiums, installments of loans, mutual funds will be the amenities.

Doorstep Service Charges by IPPB

An announcement has been done by The India Post Payments Bank (IPPB) that from August 1, each doorstep service that individual requests for, will be charged. 20 Rs and GST charges will be incurred on each doorstep delivery. As per the reports, if more people want to utilize the IPPB doorstep delivery service then, it will be classified as a DSB delivery and charges will be more for such delivery

The implementation of Doorstep service charges, changes in salary, EMI, increased cash withdrawal charges and updated charges of ICICI bank is a considerably big change and one to look forward to.

Things you might not know about your PPF Account!

Govindraj Muttepawar — Sat, 03 Apr 2021 06:48:21 +0000

Due to the Sovereign guarantee and the tax advantages, The Public Provident Fund(PPF) is not a prominent debt investment for people. The guidelines which are covering the PPF accounts, are very rigid, and people must remain conscious about them to gain complete benefits of the PPF. If these regulations are not followed by them, the government may mark the account as irregular. The account may be closed, the contributions may be halted or returned, and interest payouts may be halted if the PPF account becomes irregular. After that, it will take a long time to get your PPF account in force.

Important Features of PPF one should know: –

Interest rates: The PPF(Public Provident Fund) interest rate is fixed by the Finance Ministry every quarter. The current PPF interest rate is 7.9%. And, though the interest is calculated every month, it gets credited to your account on 31st March every year. Also, the PPF interest is calculated on the minimum balance between the fifth and the last day of the month.

Lock-in period: The minimum lock-in period of a Public Provident Fund(PPF) investment is 15 years. You can withdraw your entire corpus at the end of the 15th year. But if you wish to stay invested for a longer period, you can continue to do so. You can apply for extensions in 5 year blocks.

How to Reactivate a irregular PPF account??

To re-activate an inactive PPF account you have to submit a written document to the bank branch or post office where you have that account maintained. A penalty of Rs 50 impost for each financial year that your account has been inactive for, which must be paid a re-activation charges. You must also pay the Rs 500 minimum deposit for each year your account has been dormant. Your PPF account will be reactivated once the approval process is completed by your concerned post office or bank.

HDFC Q3 Results: 65% decline in net profit to Rs 2,925.8 crore, revenue falls 42%

Devanshu Singla — Tue, 02 Feb 2021 09:59:28 +0000

Housing Development Finance Corp reported a 65 per cent year-on-year decline in net profit to Rs 2,925.8 crore for the quarter ended December 2020. The company’s total revenues went down by 42.3 per cent to Rs 11,707 crore.

However, HDFC said that earnings for the December quarter was not comparable with the previous quarter as it included the earnings of Gruh Finance and on a like-to-like basis, the company’s net profit was at Rs 3,694 crore as against Rs 2,908 crore in the year-ago quarter.

At the end of the December quarter, the loans on an assets under management basis stood at Rs 5.52 lakh crore as against Rs 5.05 lakh crore same time a year ago, the company said.

The company witnessed a 26% year-on-year growth in individual loan disbursements during the quarter. The company assigned loans worth Rs 7,076 crore to HDFC Bank as compared to Rs 4,258 crore in the corresponding quarter of the previous year.

HDFC has shown improvement in overall collection efficiency ratios for individual loans. The collection efficiency for individual loans in December 2020 stood at 97.6% compared to 96.3% in September 2020.

The company reported non-performing loans in individual loans portfolio at 0.79 per cent. However, the non-bank lender said that not accounting for the Supreme Court’s standstill, the non-performing loans would be at 0.98 per cent in individual loan portfolio.

HDFC’s gross non-performing loans stood at 1.67 per cent at the end of the December quarter. The provisions of the company stood at Rs 12,342 crore at the end of December.

Shares of the company were trading 3.7 per cent higher at Rs 2,678.65 on the BSE.

National Bank likely to be part of Budget 2021 & may have authorised sum of Rs 1 lakh crore

Arnav Dogra — Mon, 25 Jan 2021 07:09:46 +0000

An important development has come into notice as sources claim that Finance Minister Nirmala Sitharaman may announce a National Bank as a part of Union Budget 2021 on February 1, Moneycontrol reported.

A bill with the name – the National Bank for Financing Infrastructure and Development Bill, 2020 has reportedly been drafted by the Ministry of Finance to make the process of obtaining low-cost funds for big infrastructure projects.

The proposed bank may have an authorised sum of Rs 1 lakh crore, apart from an initial paid-up capital of Rs 20 thousand crore.

The new bank may be incorporated by enacting a new law in the Parliament.

Some features of this bank will be:

This bank is expected take the place of India Infrastructure Finance Company Limited (llFCL) and the government may make it mandatory for Provident Fund, Pension and Insurance Funds to put a certain amount in the proposed bank.
Direct access to the bank line from the Reserve Bank of India (RBI) may also be allowed. Some amendments in the RBI Act and the Banking Regulation Act may be proposed.
The bank will be launched using a tax-free fund to touch the required capital limit.
As compared to NBFCs, the capital adequacy requirements will be set lower, and the borrowing limits will be higher.
The primary motive of the bank is to support the project of National Infrastructure Pipeline.
Some of its main functions will be like providing an easier and long-term method financing. Also, the bank will be involved in the monetization of the project and regular monitoring for a timely meeting of the deadlines.

Yes Bank’s Q3 Net Profit rises by 16.5% to ₹151 crore

Devanshu Singla — Fri, 22 Jan 2021 12:04:19 +0000

Yes Bank on Friday posted a 16.5% quarter-on-year increase in net profit to ₹151 crore for the quarter ended on 31 December. The bank recorded a net profit of ₹129.37 crore for the quarter ended 30 September. The private lender posted a net loss of ₹18,560 core for the corresponding quarter last year.

The private banking company’s net interest income, the difference between interest earned and interest expended 29% quarter-on-quarter to ₹2,560 crore in the quarter under review. It was ₹1,973 crore during the September quarter.

The Bank’s non-interest income for Q3FY21 saw an increase of 69.4% quarter-on-quarter to 1,197 crore due to significant increase in the retail fees.

“Total step up in provisioning of ₹2,935 crore; consists of additional ₹765 crores towards COVID-19 related provisioning (aggregate at ₹2,683 crore) and balance majorly towards increasing PCR of both NPA and NPI,” the lender said in the regulatory filing.

Yes Bank’s gross non-performing assets (NPAs) stood at 15.4% as against 16.9% in September quarter. Its net NPAs came in at 4%, compared with 4.7% in the September quarter.

The private lender’s operating profit declined 13.1% year-on-year to ₹1,472 crore. Net advances at ₹1,69,721 crore grew 1.7% quarter-on-quarter, with strong pickup in retail and SME disbursements, the bank said.

The Reserve Bank of India placed the crisis-hit Yes Bank under a moratorium on 5 March, 2020. The RBI took control of the YES Bank board and imposed a withdrawal limit from the bank accounts till 3 April.

According to RBI-backed rescue for the troubled lender, State Bank of India acquired up to 49% stake in Yes Bank. HDFC and ICICI Bank infused ₹1,000 crore each, Axis Bank ₹600 crore and Kotak Mahindra Bank (KMB) Ltd ₹500 crore into Yes Bank. RBI appointed Prashant Kumar as CEO & MD of Yes Bank.

SBI Life Insurance Q3 net profit drops by 40.2% to ₹233 crore

Devanshu Singla — Fri, 22 Jan 2021 10:31:39 +0000

SBI Life Insurance reported a 40.2 per cent year-on-year (YoY) decrease in its profit in the December quarter (Q3) at ₹232.85 crore on rising in expenses and Coronavirus-linked provisions.

The insurer reported 68.27 per cent growth YoY in revenues in the December-20 quarter at ₹26,552 crore and a sharp growth. The net premium income rose to ₹13,766.49 crore in Q3 as against ₹11,694.51 crore in the year-ago period.

The company said that it has evaluated the overall impact of this pandemic on its business and finances, including valuation of assets, policy liabilities and solvency for the quarter ended December 31, 2020.

Based on the evaluation, the company has kept an additional reserve of ₹70.38 crore for COVID-19 pandemic over and above the policy level liabilities calculated based on prescribed IRDAI regulations.

SBI Life added that it will continue to closely monitor any future developments relating to COVID-19 which may have any impact on its business and financial position.

For nine-months ended December 31 (9MFY21), the value of new business (VoNB) margin (using effective tax rate) for SBI Life stood at 20.8 per cent as against 20.5 per cent a year ago.

Effective tax rate assumes that a proportion of the projected profits are tax-exempt on account of tax deductions available on income from dividends and tax-free bonds.

The annualised premium equivalent (APE) which is 100 per cent of regular premiums and 10 per cent of single premiums rose to ₹7,480 crore for 9MFY21 which was a 7 per cent YoY decline.

Yes Bank launches Yes MSME with tempting offers

Ushma Ghosh — Wed, 20 Jan 2021 09:20:54 +0000

The Yes Bank approved for Yes MSME (Micro, Small and Medium Enterprises) to strengthen the Indian economy with speedy and easy access to funds. The bank will provide ‘curated offerings to address both business and individual needs of MSMEs’.

The Yes MSME is considered as the backbone of the economy that focuses on supporting MSMEs in expanding their business, sustaining momentum and accelerating growth through solutions across lending, deposits, insurance, customized and segmented digital solutions for retail, manufacturing, wholesale, trade and service providers. This also includes special current account offerings for the self-employed segment.

The Yes BizConnect, a collaborative solution to build strong market linkages involving over 700 industry associations will also be offered and Yes Spark, offers collateral-free funding up to five crores for start-ups, along with consultancy and enterprise resource planning. They are the key characteristics of the Yes MSME plan.

“The MSME sector is the backbone of the Indian economy and accounts for 30 per cent of the economy creating 11 crore jobs so far. Investment in the sector is the need of the hour and we are hopeful that concerted efforts by the industry and the Government will help expand it. I congratulate Yes Bank for this new addition under their MSME sector initiative and the long-term plan to strengthen the ecosystem. My best wishes to Shri Prashant Kumar, MD & CEO, Yes Bank and team on the efforts to contribute to the larger vision of making India a USD 5 trillion economy by 2024,” said Nitin Gadkari, Union Minister for MSMEs and Road Transport and Highways.

ICICI collaborates with Niyo to issue prepaid cards to MSMEs

Devanshu Singla — Thu, 14 Jan 2021 07:14:02 +0000

ICICI Bank and Niyo, a new age fintech have partnered to issue prepaid cards to workers of Micro, Small & Medium Enterprises (MSMEs). MSMEs can receive ‘ICICI Bank Niyo Bharat Payroll Card’ powered by Visa, for their blue-collar workers, who are mostly under-banked.

With this, employers can tranfer the salaries of their workers on the card, which the workers can then utilise as per their need. The ‘ICICI Bank Niyo Bharat Payroll Card’ allows an individual to receive funds up to ₹1 lakh into the card account. It offers convenience and safety of digital banking to the blue-collar workforce while providing a state-of-the-art salary disbursement solution to the employers.

Any MSME can partner with Niyo to avail the prepaid card. After the tie-up, cards are issued to the workers at their workplace itself after their KYC verification is done simultaneously using a biometric device. Once activated, workers can use the card to withdraw funds at ATMs, make online transactions on e-commerce portals and make payment by swiping the card at Point of Sale (PoS) machines.

To further facilitate the cardholders, Niyo offers a multilingual app called ‘Niyo Bharat Mobile app’. Workers can download this app from Google Play Store and register themselves. Workers can transfer funds, pay bills or do recharges online through the Niyo App. It also allows them to block/unblock the card which provides them control of their card security. The cardholders also get a free accidental death insurance cover.

Infosys bags Mongolian XacBank’s contact to provide digital solutions

Sarthak Yadav — Tue, 24 Nov 2020 09:12:40 +0000

Mongolia-based XacBank has allotted a contract to Infosys’ wholly-owned subsidiary EdgeVerve Systems. It will use Infosys Finacle’s core banking, treasury, and corporate banking solution to drive digital transformation.

Financial details of the deal were not disclosed.

Infosys reported, “The Finacle solution suite will enable the bank to drive all-round business transformation to improve customer engagement, operational excellence, and the flexibility to launch tailored offerings on-demand, for continuous innovation and growth.”

XacBank is expected to set up an open platform to establish a strong digital presence and evolve its offerings in sync with market dynamics with the help of Finacle digital core banking suite.

The broad suite of enterprise products comprises of deposits, loans, limits and collaterals, payments, trade finance etc will enable XacBank to standardize business processes and simplify enterprise architecture to offer tailored services, Infosys said.

Finacle Treasury Solution is a unified platform capable of enabling trading, risk management, and processing across multiple cross-asset classes.

Tsevegjav Gumenjav, chief executive officer, XacBank stated “To power our leadership position into the future, in an increasingly competitive environment, we felt the need for a modern platform. Given its growing deployment base in Mongolia, Finacle is a proven solution for our needs.”

Finacle solution suite is aimed at helping the bank accelerate its digitalization and automation journey across the enterprise, resulting in improved customer experience and lower costs of operation.

XacBank provides integrated banking and financial solutions to consumers and enterprises (MSMEs) throughout its 80 branches serving approximately 800,000 customers.

Raghuram Rajan & Viral Acharya criticize RBI’s move to allow corporates in banking

Sarthak Yadav — Tue, 24 Nov 2020 07:44:32 +0000

The new policy made by the Internal Working Group of RBI to allow corporates in banking is tagged as ‘bombshell’ by former Reserve Bank Of India governor Raghuram Rajan and deputy governor Viral Acharya. Both the experts strongly criticized the proposal to open up bank licences for corporates. Even other central bankers and S&P Global ratings cautioned against the move stating that it is fraught with risks.

Out of five, one member from the Internal Working Group were against the idea of corporate/industrial houses promoting banks. The group had no issues in corporate-owned financial houses turning into banks but on the contrary, the group had opposed corporate promoters as prevailing corporate governance culture in corporate houses is not up to the international standard.

Both the experts have questioned the timing of the move stating that nothing has changed to warrant a change in the stance of the RBI to deny bank licenses to corporate houses. They also cited the Yes Bank crisis as a limitation of the central bank to gather information on loans.

Former Governor and Deputy Governor expressed in a note that “How can a bank make good loans when it is owned by the borrower? Even an independent committed regulator, with all the information in the world, finds it difficult to be in every nook and corner of the financial system to stop poor lending. Information on loan performances is rarely timely or accurate.” If sound regulation and supervision could be addressed through legislation, India would not be having the bad loan problem that it is facing today, they added.

The former central bankers also said that allowing corporates into banking to increase the bidders for public sector banks was a bad idea.

“It would be a mistake, as we have said in an earlier paper, to sell a public sector bank to an untested industrial house. Far better to professionalize public sector bank governance, and sell stakes to the broader public,” they pointed out.

The proposed policy for allowing corporates to enter banking, through the small finance bank route is also criticized by Rajan and Acharya, “A second possibility is that an industrial house holding a payment bank license wants to transform into a bank. One recommendation of the IWG that is equally hard to understand is to shorten the time for such transformation from five to three years, so perhaps the surprising recommendations have to be read together.”

RBI’s Internal Working Group provides permit to corporate entities into banking

Sarthak Yadav — Mon, 23 Nov 2020 08:47:05 +0000

The established Internal Working Group of the Reserve Bank of India provides permit to corporates into banking. This allows large NBFCs to convert into banks which could have implications for a wide range of entities. Brokerages believe that while it may take time for corporate-promoted banks to be set up, some of the other proposals could take effect relatively sooner.

In a capital-starved economy like India, RBI’s working group feels that allowing corporate to promote banks can be an important source of capital. These corporates are capable of adding attributes like “management expertise, experience, and strategic direction to banking”. The group also noted that internationally, “there are very few jurisdictions which explicitly disallow large corporate houses”. One of the major reason behind RBI’s age old disagreement for corporate intrusion in the banking sector was the matter of ‘Conflict Of Interest.’

” The corporate governance in Indian companies isn’t up to international standards and “it will be difficult to ring-fence the non-financial activities of the promoters,” according to an expert. There will also be a risk of promoters giving loans to selves. Before the bank nationalization happened in 1969, some of the private banks were owned by large corporates and these big industrialists used to give loans to themselves.

“Internal procedures… vest large discretionary powers in the boards of directors who have often acted as sources of patronage in deciding credit matters.” V.A. Pai Panandiker, an advisor in finance ministry, wrote in August 1967. A survey also revealed that 188 individuals served as directors on boards of 20 leading banks held 1,452 directorships of other firms.

In March 2018, the domestic bad loans of Indian banks peaked at ₹9.62 trillion. Of this, around 73.2% or ₹7.04 trillion, were defaults made by the industry.

Aiming at underbanked users in India, True Balance, South Korean startup raises $28 million

Divya Joyce — Thu, 19 Nov 2020 07:57:42 +0000

True Balance, a South Korean startup that runs an eponymous financial service appraised $28 million in a new financing round as it aims at tens of millions of users in small cities and towns in India.

True Balance began as an app to help users easily find their mobile balance, or top up pre-pay mobile credit. But in its five-year journey, the startup has added a range of financial services including online lending and the ability to pay utility bills. Online lending is its core business today.

In an interview with TechCrunch, Charlie Lee, founder, and chief executive of True Balance, said the startup has disbursed over $13.5 million in small loans to over 6.7 million consumers. The size of these loans vary from $6.75 to $675, he said. SoftBank Ventures Asia, Naver, BonAngels, Daesung Private Equity, and Shinhan Capital financed the five-year-old startup’s Series D financing round. The startup, which has headquarters in Seoul and Gurgaon, has raised about $90 million to date.

Its customers don’t have a credit score, which makes it complicated for them to get a loan from financial institutions such as banks. Scores of startups in India and Southeast Asia are experimenting with alternative data such as a phone a consumer owns and the transactions she makes and hundreds of other data points to determine these users’ creditworthiness.

Lee did not reveal how many users it has lent money to have returned the amount but said the figure was so high that the startup is open to engaging with other firms who are looking to make use of alternative data but don’t have the tech stack.

Last year the startup was nearing profitability — a milestone it now hopes to reach by the second quarter of next year. Lee said the Coronavirus, which has severely impacted the financial services sector, also hurt True Balance’s business.

“Before the coronavirus, our business was growing very fast,” said Lee. “The coronavirus and moratorium (enforced by the nation’s central bank) hit us. We utilized this time to improve our collection process and other aspects of the business.”

“We will continue focusing on non-online payment users, non-credit score users, people who deserve our help, but need a way to get to it,” he said. The fresh capital will be deployed to make the startup reach the break-even point and then profitability, he added. True Balance is also working to reach more underbanked users in India.

LVB depositors’ money is safe, RBI’s appointed administrator guarantees

Divya Joyce — Wed, 18 Nov 2020 12:51:20 +0000

RBI-appointed administrator for Lakshmi Vilas Bank T.N. Manoharan on Wednesday said the bank has enough liquidity to pay back depositors and assured them that their money is safe. Lakshmi Vilas Bank has ₹20,000 crores in deposits and ₹17,000 crores in advances, he added.

The RBI on Tuesday had imposed a 30-day moratorium on struggling lenders, restricting cash withdrawals at ₹25,000 per depositor and announced a draft scheme for the amalgamation of the bank with DBS Bank India, a subsidiary of DBS of Singapore. The moratorium will be effective up to December 16, 2020, the central bank said in its statement.

The step was taken on the advice of the Reserve Bank because of the private sector bank’s deteriorating financial health.

He said post-merger, all LVB employees will retain their jobs at the same remuneration. “Will try to ensure there is no shortage of cash at any bank branches,” said Manoharan while adding that there has been no run on deposits in the bank.

The Reserve Bank also superseded the board of Lakshmi Vilas Bank (LVB) and appointed Manoharan, former non-executive chairman of Canara Bank, as its administrator for 30 days. The RBI placed in the public domain a draft scheme of amalgamation of LVB with DBS Bank India Ltd (DBIL).

DBS Bank India, in a statement, said the proposed amalgamation will provide stability and better prospects to LVB’s depositors, customers and employees.
“To support the amalgamation, DBS will inject ₹2,500 crores (SGD 463 million) into DBIL if the scheme is approved. This will be fully funded from DBS’ existing resources,” it said.
“DBS’ capital infusion aimed at triggering credit growth at LVB,” said Manoharan. RBI will issue the final merger draft on November 20.

Lakshmi Vilas Bank reported a net loss of Rs 397 crore in Q2 of FY21

Shravan Kanade — Sat, 07 Nov 2020 15:00:54 +0000

Commercial banking company Lakshmi Vilas bank released its results for the second quarter of the FY21. The bank reported a net loss of Rs 397 crore against Rs 357 crore for the same quarter last year. While reporting a YoY net loss of Rs 46.8 crores the bank’s Net Interest Income was down by 27.5 percent at Rs 79.5 crore for the quarter.

However, the bank performed well in the Gross NPA that decreased by o.95 percent. The bank reported the Gross NPA at Rs 4,063.3 crore vs Rs 4,142 crores. The Net NPA for the quarter was Rs 946.7 crore which was Rs 351.5 less than that reported in Q2 of FY20. The Net percentage of NPA was decreased by 2.63 percent which reported at 7.01 percent vs 9.64 percent.

On the other hand, the Capital-starved Lakshmi Vilas Bank (LVB) is expected to decide on the proposed merger with Clix Capital and its affiliates on November 7. When its board would meet to declare the September quarter results, “Both parties are keen on a merger, though they differ on valuation.” The Clix team was in hard bargaining and wanted to make full provisions against contingent liability of Rs 720 crore related to transactions involving former Religare promoters Malvinder and Shivinder Singh. The team pointed out that the bank would have to return the money if it loses the case against RFL.

Loan Moratorium Case: SC schedules next hearing on November 18

Shravan Kanade — Thu, 05 Nov 2020 08:57:56 +0000

A bench headed by Justice Ashok Bhushan has adjourned the hearing of the Loan Moratorium Case to November 18. The bench heard the batch of pleas related to charging of interest on interest by banks on EMIs not paid by the borrowers under the RBI loan moratorium scheme from March 1 to August 31.

However, the Finance Ministry of India and the Reserve Bank of India have already stated that the banks and other financial institutions will take “necessary actions” to credit into the accounts of eligible borrowers by November 5. The Loan Moratorium Scheme is applicable on loans of up to ₹2 crores. The government said that the lending institutions will credit this amount in the accounts of borrowers for the 6-month loan moratorium period.

The pleas sought that no interest should be charged during the moratorium as citizens were facing “extreme hardship, whereby business and work have come to a halt and the entire market has crashed.” It also sought the RBI to “appropriately consider extending the moratorium period for a certain period so as to enable millions of persons, who may get unemployed due to COVID-19 health emergency for some time even after lockdown”.

The apex court told the centre to implement the scheme as soon as possible due to the upcoming festival Diwali and the implementation will benefit the common man.

In the wake of COVID-19 and the consequences of lockdown, the Reserve Bank of India issued a circular on March 27 that allowed financial institutions to grant a moratorium on payment of instalments of term loans falling due between March 1, 2020, and May 31, 2020, for three months, but as the lockdown extended so the RBI had extended the moratorium till August 2020.

Lakshmi Vilas Bank share prices spike over the news of deal with Clix Group

Aditi Swarup — Wed, 16 Sep 2020 11:54:34 +0000

At closing on Tuesday, the shares of Lakshmi Vilas Bank closed at Rs 20.35 but the stock rose 9.83% today.

This change took place after the bank announced that amalgamation with Clix Group was close to being locked.

In a communication exchange, the bank said, “We wish to inform that the mutual due diligence is substantially complete, and the parties are in discussions on the next steps. The Bank will continue to share any further information as and when they materialise.”

As of now, the share prices of the bank stand at 22.40 INR.