Indian Banks | Business Upturn

PSU Banks are adapting to new digital means owing EASE reforms

Dipankar Ray — Sun, 18 Sep 2022 13:03:49 +0000

Public sector banks are quickly embracing digital technologies, clearing digital lending of 83,091 crores in the fiscal year ending in March 2022. As part of the EASE 4.0 reforms, the state-owned banks were tasked with concentrating on digital lending, co-lending with non-banking businesses, farm finance, and technical resilience for 24×7 banking.

Public sector banks (PSBs) are financial institutions where the government has a majority stake in the shares. The financial standards for these institutions are regulated by the government. Because public sector banks are owned by the government, the majority of depositors think that their money is safer there.

Currently, the EASE program along with Indian Banks Association(IBA) has stressed the need for data analytics, automation and digitization. The EASE programme, introduced in 2018, focuses on new tech streamlined and collaborative banking, and Finance Minister Nirmala Sitharaman recognised top-performing institutions on several metrics, according to a release from the IBA.

For the reforms implemented in all Public Sector Banks, in relation to the EASE Agenda 4.0, Bank of Baroda won first place, followed by State Bank of India and Canara Bank in that order. Among all PSBs, Indian Bank emerged as the “Top Improver.” As part of the EASE reforms, banks completed 6,597 crores in co-lending through collaborations with NBFCs during FY’22. 9.4 crore clients were added to mobile banking systems, and 79% of all financial transactions were done using mobile and internet banking platforms.

In this aspect, the Minister of Finance unveiled the fifth edition of the EASE program which is known as the EASENext Program which would be furthering the digital footprint and introducing the three-year Strategic Program.

CEO of Union Bank of India: restructures loans worth Rs 13,000 crore, follows resolution framework by RBI

Aayushi Singh — Thu, 29 Jul 2021 15:15:15 +0000

On July 29, the Union Bank of India, which is the fourth-largest public sector bank in the country, had said that it had so far restructured the loans worth Rs 15,927 crore under the two resolution frameworks announced by the Reserve Bank of India.

Rajkiran Rai G, MD, and CEO of the Union Bank said that a large piece of the restructured accounts was from the retail segment. He added on saying that under the resolution framework 1.0, the lender had restructured accounts worth Rs 11,965 crores, out of which Rs 3,702 crore were from the personal loans segment, Rs 2,427 crore were from the micro, small and medium enterprises segment and Rs 5,836 crore were from the large corporates.

Till June 30, 2021, the total recast amount was Rs 3,962 crore under the resolution framework. The scheme would be open for three more months. In the second round of the recast, the personal loans accounted for Rs 2,855 crore, and from the MSME’s over Rs 954 crore came, the rest came from agriculture. Under the resolution framework, 2.0 announced on May 5, 2021, large corporates were not eligible for the recast.

Rajkiran Rai said that they have expected that retail and MSME would be put together, and restructuring worth Rs 2,000 crore might occur in the second quarter.

On August 6, 2020, the first resolution framework was issued and was applied to all the categories of borrowers affected by the COVID-related stress.

Slippages worth Rs 7,049 crore were reported by Union Bank in Q1FY22, out of which 45 per cent was from the MSME segment. 15 per cent of the total slippages were from Retail which was worth Rs 1,078 crores. Mr. Rai said that the stress was mainly due to COVID-19 as the EMI payments had been affected, and the stress in retail was already covered in the June quarter and there was not much in the September quarter.

The CEO had mentioned that the bank was confident that stress would get lower with the aid of restructuring and the facilities extended under the emergency credit line guarantee scheme (ECLGS). In FY22, the Union Bank has expected recoveries and upgrades worth Rs 13,000 crore. The recoveries and upgrades in Q1 were over Rs 4,300 crore.

Higher interest rates on FDs if you are vaccinated, says Central Bank of India

Govindraj Muttepawar — Tue, 13 Apr 2021 06:42:01 +0000

COVID-19 vaccination seems to have more perks than just having the protection against coronavirus, as it also spans over to your bank deposit scheme.

Central Bank of India has launched a very unique product to encourage people for COVID-19 vaccinations. Central Bank of India has launched a special deposit scheme called the Immune India Deposit Scheme wherein the bank is offering an additional interest rate of 25 basis points (bps) above the applicable card rate for those who get vaccinated. The limited period Immune India Deposit Scheme has a maturity of 1,111 days. Senior citizens are eligible 50 bps extra interest rates.

“To encourage Vaccination under COVID 19, Central Bank of India launches Special Deposit Product “Immune India Deposit Scheme” for 1111 days at an attractive extra Interest rate of 25 basis points above the applicable card rate for Citizens who got Vaccinated,” a Central Bank of India tweet said.

To encourage Vaccination under COVID 19, Central Bank of India launches Special Deposit Product “Immune India Deposit Scheme” for 1111 days at an attractive extra Interest rate of 25 basis points above the applicable card rate for Citizens who got Vaccinated.#Unite2FightCorona pic.twitter.com/MKEJaHgMpE

— Central Bank of India (@centralbank_in) April 12, 2021

Fixed deposits or term deposits are extremely popular in our country because of the assured returns they provide. They’re also extremely easy to invest in, are available in multiple terms and involve high liquidity. However, 10% TDS is deducted by a bank if the interest income across all the FDs with it exceeds Rs 40,000 in a year. This threshold is Rs 50,000 for senior citizens.

That said, a 20% TDS is applicable if you don’t submit your PAN card details to the bank. But no TDS is applicable if the total annual income of the investor is less than the minimum taxable amount of Rs 2.5 lakh, which can be waived by submitting Form 15H (if you’re a senior citizen) or 15G (if you’re not a senior citizen) to the bank, according to BankBazaar.

Indian Bank raises Rs 1048 crores via AT-1 bond at 8.44%

Akanksha Yadav — Mon, 07 Dec 2020 09:46:39 +0000

In Monday’s bidding, Indian Bank raised Rs 1,048 crores out of the offered Rs 1,500 crores of AT-1 bond at 8.44 percent coupon rate. The bond is a perpetual one with a five-year-call. The closed and uniform bid took place from 11 am to 1 pm today and the pay-in is on 8th December.

Indian Bank had earlier said that it would raise about Rs 1,500-Rs 2,000 crores via Additional Tier-1 (AT-1) bonds in the December quarter to mobilise their resources at a much competitive rate. This was subject to the improvement of the market conditions. Earlier this year, the state-owned bank had scrapped an AT-1 bond issue since the investors were seeking higher coupon than what they had anticipated.

Chief Executive Padmaja Chunduru said, “Indian Bank had no desperation to raise capital as it had enough cushion with a capital adequacy ratio at 13.45%, well over the regulatory minimum of 10.875%.”

“We will raise up to Rs 2,000 crore this year through a combination of Tier-1 and Tier-2 capital, depending upon how credit growth takes place and restructuring of debt happens,” she said and added that the details would be worked outpost second quarter’s end.

“The need for capital has to be reassessed much more periodically now because the conditions are changing every day,” Chunduru added.