Finance minister asks PSBs to back stressed small businesses
The finance minister has asked state-run banks to provide special packages for small and medium enterprises. According to the govt such enterprises are critical to jobs and thus they must have easy access to finance and market. Finance minister Arun Jaitley had told banks at a conclave last year- "One of the focus areas banks have taken up is to support MSMEs because the sector creating jobs and giving boost to the economy has no access to international finance or the bond market." Banks will also synergise their lending through Mudra Yojana, Stand Up India and Start-Up India to the MSME sector. The govt will also initiate a drive to put MSME products on government e-Marketplace. It has also registered all major suppliers on the Trade Receivables e-Discounting System (TReDS).
Low base lifts banks' credit growth to 10.65% in December
As per the data released by the Reserve Bank of India, the credit growth has grown in and reached to double digits after a long gap due to the base effect. "The credit growth is mainly because of the base effect. Due to the demonetisation last year, the base figures are getting revised and so that is where you are seeing the growth," State Bank of India's Managing Director (retail and digital banking) P K Gutpa said. According to a financial Stability report released recently, the credit growth of scheduled commercial banks increased from 4.4 percent to 6.2 percent. The credit growth of public sector banks increased from 0.7 percent to 2.2 percent.
1,463 bad loan accounts owe PSU banks more than Rs 1 billion
The finance ministry has registered 1,463 entities account for bad loans of Rs 1 billion in 21 public sector banks. SBI alone holds 265 accounts for bad loans of a total of Rs 775.38 billion. PNB topped the list of nationalised banks with 143 NPA accounts. PNB was followed by Canara Bank. Among smaller PSUs, Union bank had 79 accounts, oriental bank had 68 and UCO bank has 62. The RBI has issued directions to certain banks for referring 12 accounts to initiate insolvency process under the Insolvency and Bankruptcy Code, 2016. In order to strengthen banks, govt has introduced a 2.12 trillion recapitalisation plan.
About Rs 5,000 crore spent on printing of new 500 notes
According to the information given by the central government in the Lok Sabha, about Rs. 5,000 crore was spent on printing of new 500 notes post demonetisation. P Radhakrishnan, minister of state for finance has said that as many as 1,695.7 crore pieces of Rs 500 denomination note were printed till December 8. The total amount spent on the production of Rs. 500 notes was Rs. 4,968.84 crore. The minister also informed that printing of Rs 2000 and Rs 200 notes costed Rs. 1,293.6 crore and Rs 522.83 crore respectively. The RBI had transfered Rs 65,876 crore as surplus to the government in 2015-16. The amount reduced to Rs 30,659 crore in 2016-17. "New design notes in the denomination of Rs 50, 200, 500 and 2,000 have been introduced after demonetisation," the minister said.
Car loans up 30%, average ticket sizes also growing
As greater number of Indians are now borrowing to purchase cars and thus the loan ticket sizes are also growing. The outstanding loan portfolio for passenger cars grew 30 per cent over the year. The average loan size has also grown by over 2015 in the last 3 years. As per the reports 31 lakh cars got financed in the year 2016-17 and 17 lakh cars would be financed in the next six months. The Rs 5-10 lakh portfolio is becoming the most popular ticket size with 41% of the loan portfolio falling in this bracket, it said. However loans in the Rs 2-5 lakh bracket have come down to 40%. When looked at from a geographical spread perspective, Maharashtra leads the most active car loan market by the amount disbursed, while Telangana leads on the average ticket size.
Gross NPAs of banks cross Rs 8.50 lakh crore in first half: MoS
Gross NPAs of banks crossed Rs. 8.50 lakh crore at the end of September 2017 as the State for Finance minister Shiv Pratap Shukla informed the Lok Sabha. According to RBI the growth in provisions for NPAs of state lenders in the first half of the current financial year was 9.5%. RBI has issued circulators to certain banks for referring 12 accounts with fund and non-fund based outstanding amount greater than Rs 5,000 crore and with 60 per cent or more classified as non-performing as of March 31, 2016, to start insolvency process under the Insolvency and Bankruptcy Code, 2016, said the minister. The 12 accounts constitute about 25 percent of the gross NPAs. RBI has also issued directions to resolve few other accounts within six months.
Capital infusion for Public lenders may begin by February
According to a senior finance ministry official, the first round of the capital infusion for state-run banks that was announced recently may happen soon. The government may raise around Rs. 70,000 crores by February 2018. The official also said that the demand has been raised through the second batch of supplementary demands for grants. "It was already stated that most of the amount will be front loaded so as to pass on the maximum benefit to the lenders," he said. In order to encourage lending and boost investment, the government in October has announced a Rs, 2.11 lakh crore capital infusion plan for all the state-owned banks. "The government will directly issue these bonds and the impact on the fiscal will be discounted given the increase in credit growth and subsequent pickup of the economy," the official said.
HDFC Bank issues 3 lakh instant credit cards in a year of launching
India’s second most valuable private lender HDFC Bank has issued 3 lakh credit cards just in a year of its launch. InstaCard was launched in January this year. The bank said in a statement that these cards were delivered to customers within an hour of applying for a credit card. With the help of these cards, customers can do transactions online on e-commerce websites immediately on receipt of the InstaCard. The physical cards are delivered to the customers within a few days. InstaCards are popularly known as digital credit card and is issued using a combination of credit bureau information, pre-qualification algorithm and checks in the application form as per the banks
Corporation Bank slashed overnight MCLR by 0.1 per cent
Corporation bank has said in a statement that it has reduced its MCLR by 0.01 percentage point for overnight loan maturities. The new rate now stands at 7.80 percent. The MCLR which is for all rupee loans and advances including renewal will be effective from December 15. For rest of the tenors, the MCLR is kept unchanged. The current MCLR of the bank for one month and three months loan maturities stands at 7.90 percent and 8.20 percent respectively. For six months MCLR is at 8.60 percent and for one year maturity, the MCLR is at 8.65 percent. The MCLR was introduced in April 2016 as an alternative to the base rate mechanism.
HDFC Bank stock hits a new high on proposal for raising of funds
Private lender HDFC Bank hits a high of Rs. 1,887, up 2.7% on BSE after the announcement of the board meeting on Wednesday, December 20, 2017, for considering a proposal on fund raising. The stock even surpassed its previous high of Rs. 1,876.95. A meeting comprising the board of directors of the bank will be held on 20th December. The team will consider a proposal for raising funds by issue of equity shares/ depository receipts and other securities. This fund raising may require the approval of the regulatory and also the approval of the shareholders of the bank. HDFC Bank in February 2015, has raised Rs. 9,800 crore through both foreign and domestic offerings.
SBI changed IFSC code for its 1,300 branches across the country
Country’s biggest lender State Bank of India has changed the IFSC codes and names of 1,300 branches after the merger of its five associates. The bank has changed the names and IFSC codes of branches located in major cities such as Mumbai, New Delhi, Bengaluru, Chennai, Hyderabad, Kolkata and Lucknow. IFSC is an 11-digit-alpha-numeric code used to identify all bank branches participating in RBI’s regulated fund transfer system. IFSC code is a must to transfer fund from one account to another through RTGS, NEFT or IMPS method. The bank has put up the list of branches with old and new names and changed IFSC codes on its website.
After Paytm, PhonePe Partners With SafeGold to Sell Digital Gold
Flipkart-owned digital payments platform PhonePe has forged a partnership with SafeGold to launch a digital gold product. As per the official statement, users will now be able to buy and sell certified 24-karat gold via the PhonePe app. commenting on the development, Subrat Udgata, Vice-President of IDBI Trusteeship Services stated “Gold has always been a prized possession in India. We are delighted that an innovative company like PhonePe in partnership with Safe Gold, is offering customers a convenient and secure way to buy or accumulate the best quality Gold. It is noteworthy that there are independent entities in this partnership protecting the customer’s interest at all stages. We are actively supporting such innovative digital business models as Trustees and the SafeGold-PhonePe partnership is an example of that effort.” Gold purchased on PhonePe is physically deposited in a high-security Brink’s vault and is fully insured at all times. If a customer needs the physical gold, she/he can ask for it to be delivered to their doorstep.
Industrial production and increased infra spending will support 2018 property market
Industrial warehousing and affordable housing are expected to grow much faster compared to office and premium residential space, says Colliers Research. Alongside that, improved industrial production and increased infrastructure spending are expected to support the property market in 2018. The Indian economy, as measured by growth in Gross Domestic Product (GDP), accelerated by 6.3 percent (Q3 2017), an improvement from 5.7 percent (Q2 2017). The growth is likely to exceed 6.7 percent (FY2017) and 6.9 percent to 7.4 percent for the next three years, driven by improvement in industrial production, the spurt in consumption levels and increased infrastructure spending, it notes. Gagan Randev, National Director, Capital Markets & Investment Sales, Colliers International India said “India is in a sweet spot as a destination for foreign investments. While there has always been very keen interest for Grade ‘A’ commercial assets where cap rates continue to become increasingly aggressive, there is a huge demand in the warehousing and logistics space as well as in the affordable housing side. With land prices correcting for residential and RERA giving confidence to investors, foreign investors are starting to look at residential too albeit selectively”.
From solid gold to liquid cash: the alchemy of ‘gold loans’
The WGC report states that gold loans offered by institutional players will continue to hold a substantial market share in India, given the government’s policy efforts to nudge consumers towards the formal sector. Currently, that sector accounts for only 25 per cent of the gold loan market; within that segment, one half is accounted for by banks, while the two NBFCs—Muthoot and Manappuram—account for much of the other half, experts reckon. A recent report by rating agency Crisil stated that the profitability of large gold loan financiers surged back to the peak levels seen before the regulatory tightening, which started in 2012. Krishnan Sitaraman, Senior Director, CRISIL Ratings, said, “Periodic interest collection has ensured the loan-to-value ratio remains intact and gold price declines do not result in interest loss, which was a key reason for reduced profitability in the preceding few years. It also reduces the chances of delinquency as the borrower’s equity in the pledged gold does not fall.”
SBI updates IFSC codes and names of 1300+ branches
After the merger of the five SBI associate banks into SBI recently, State Bank of India (SBI) has now updated the names of branches and IFSC codes of 1300 branches nationally. The IFSC code and branch name changes have been made to SBI locations across major metros including Delhi, Bangalore, Hyderabad and Bombay. “Some of our old associate branches are getting merged with SBI branches. When that merger happens, the IFSC codes get changed” said Praveen Gupta, SBI’s MD for Retail and Digital Banking. He also said “Even if some payment comes based on the old IFSC codes, it will get mapped with the new codes. It will not cause any problem to any customer”. IFSC (Indian Financial System Code) is a 11-digit alpha-numeric code that identifies bank branches. IFSC codes are used by customers to facilitate inter-account money transfers using RTGS, NEFT and IMPS methods. SBI customers have been informed about the change and any use of old codes will not have impact on funds.
Moody's says loan against property segment may rise in 2018
The report states lenders are more wary of extending LAPs as small and medium enterprises (SME) are seeing a subdued environment. LAP segment may increase next year, but it may not hurt lenders greatly, said a Moody’s Investors Service report on Tuesday. It also said “Many SMEs in India have traditionally operated outside the auspices of tax authorities. With the implementation of GST and demonetisation, many more SMEs will come under the ambit of tax authorities and will have to pay tax for the first time, in addition to bearing associated compliance costs”. According to the Moody’s report, “Although property prices have continued to increase, year-on-year growth rates have moderated from the higher levels of 2015 and 2016 and this has also led lenders to tighten underwriting standards over the past year. As noted, we expect property prices to remain steady at around current levels in 2018.
No cheap housing, car loans for now as RBI keeps interest rates on hold
The Reserve Bank of India (RBI) on Wednesday maintained a status quo on key interest rates but raised inflation forecast for the remaining period of the current fiscal and cautioned that the recent duty roll back on petrol and diesel and GST rate cuts could result in a fiscal slippage.RBI Governor Urjit Patel decided to keep the repo rate unchanged at 6%, the reverse repo at 5.57% after inflation rose to a seven-month high in October. It raised the inflation forecast to 4.3%-4.7% for the period till March 31, 2018. However, the economic growth forecast was kept unchanged at 6.7% for the financial year 2017-18. Wednesday's decision was more or less on the expected lines as almost all macro-economic indicators leading to the monetary policy review â€“ crude oil and commodity prices, retail inflation and the government's fiscal situation -- pointed towards a negative. Economists said, the RBI may go in for a pause in rates in the foreseeable future as November and December inflation rates were seen inching up on the back of farm loan waiver and the upward revision in HRA impact. The recent GST rate cuts on several items were also seen inflationary.
Government on Friday on extended the deadline to link Aadhar with PAN from Dec 31, 2017 to March 31, 2018
The Central government on Friday on extended the deadline to link Aadhar with PAN from December 31, 2017 to March 31, 2018. The Supreme Court on Thursday was informed by the Centre about the extension of the last date with Attorney General K K Venugopal telling a bench comprising Chief Justice of India Dipak Misra, Justices A M Khanwilkar and D Y Chandrachud that the government will come out with a notification to this effect on December 8. “People should instead verify their bank accounts, investment accounts, SIM cards, etc. as per the current laws and deadlines as early as possible to avoid any inconvenience.” Confirming that most of the schemes and services, deadline to link Aadhaar remains December 31, the release added, “All notifications for requiring Aadhaar for various welfare programmes, verifying bank account, PAN card and SIM card with Aadhaar stand valid and lawful.” The authority has also advised people not to get misled by an outdated video, which was widely being circulated on WhatsApp and social media platforms.
Moody’s Says, No Increase Likely In Home Loan Defaults In 2018
The country's auto asset-backed securities (ABS) backed by commercial vehicle loans issued in 2018 will have positive credit characteristics that, along with healthy economic growth, will support the performance of these deals," Moody's said in a report today."We expect delinquency rates for commercial vehicle loans backing outstanding auto ABS will remain stable at around 5.4 per cent for loans on new vehicles and 6.8 per cent for loans on used vehicles in 2018, supported by healthy economic growth," the report said. The majority of mortgage borrowers in the country are salaried employees with steady earnings and mainly use these loans to buy properties for self-occupation, which signifies that such borrowers have a good credit profile, it said. The report, however, said delinquency rates in ABS deals backed by loans against property (LAP) to small and medium enterprises (SMEs) would increase in 2018 because of the tougher operating environment."The introduction of the Goods and Services Tax in July this year and the government's demonetization policy have placed stress on the SME sector," the report said. However, the credit quality of new Indian ABS backed by LAP to SMEs will benefit from more stringent underwriting standards applied by lenders over the past year.
Payment processor MasterCard Inc (MA.N) to repurchase up to $4 billion of its shares
MasterCard Said “The new share repurchase program will be effective at the completion of the company’s previously announced $4 billion share repurchase program.” The company said it also increased its quarterly cash dividend to 25 cents per share, a 14 percent increase over the previous dividend of 22 cents a share.
Payment processor MasterCard Inc (MA.N) to repurchase up to $4 billion of its shares
RuPay Credit Cards has launched by Corporation bank, which will be accepted at all all RuPay-enabled – around 1.5 million – PoS terminals and 80,000 plus eCommerce merchants in India and all ICS partner acceptance points (POS, e-commerce merchants) globally, Bank Said. Jai Kumar Garg, MD and CEO of the bank, launched the card at the bank’s headquarters in Mangaluru and said the RuPay credit cards will boost digital payment system and will be beneficial in creating a ‘less cash society’. The two cards – RuPay Select credit card and RuPay Platinum credit card – offer personal accident insurance of Rs10 lakh and Rs2 lakh respectively, the press statement added.
RBI to rationalise charges on debit card transactions
The Reserve Bank of India has decided to rationalise charges on debit card transactions based on category of merchants with a view to giving “further fillip” to digital payments. In its 'Statement on Developmental and Regulatory Policies', released along with the resolution of Monetary Policy Committee (MPC), the RBI said that in recent times debit card transactions at 'Point of Sales' have shown significant growth. It also said "With a view to giving further fillip to acceptance of debit card payments for purchase of goods and services across a wider network of merchants, it has been decided to rationalise the framework for Merchant Discount Rate (MDR) applicable on debit card transactions based on the category of merchants”. Meanwhile, the RBI also decided to permit overseas branches and subsidiaries of Indian banks to refinance External Commercial Borrowings of AAA rated corporate as well as Navratna and Maharatna PSUs, by raising fresh ECBs.
RBI caps charges on debit card transactions at Rs 200 for small traders
In order to promote digital payments, the Reserve Bank on Wednesday came out with differentiated merchant discount rates (MDR) for debit card transactions, prescribing separate caps for small and large traders. (MDR is the rate charged to a merchant by a bank for providing debit and credit card services). According to the latest notification, MDR charges for small merchants with an annual turnover of up to Rs 20 lakh has been fixed at 0.40 per cent with a cap of Rs 200 per transaction by debit cards through Point of Sale (PoS) machines or online transactions. For transactions above Rs 1,000 and up to Rs 2,000, it was capped at 0.5 per cent of the transaction value. Before that, the MDR was capped 0.75 per cent for transaction up to Rs 2,000 and not exceeding 1 per cent for payments above Rs 2,000. Commenting on RBI's move, Ashwani Kumar, Chairman and Managing Director of Dena Bank, said introduction of differentiated MDR and a cap on the absolute amount is expected to increase acceptance of debit card usage and "will also bring down the cost of transactions for small merchants".
IndoStar Capital calls off deal to buy ICICI Home Finance: CEO R. Sridhar says
Mumbai IndoStar Capital Finance Ltd has called off a deal to acquire ICICI Home Finance Co. Ltd owing to synergy issues, IndoStar’s chief executive officer (CEO) R. Sridhar said. R. Sridhar said, “There was a problem of alignment of objectives when it came to the acquisition of ICICI Home Finance”. Also “We are open to acquiring portfolios, but we are currently ramping up our presence”. Indostar had been looking to buy a 67% stake in ICICI Home Finance for Rs2,000 crore. In an earlier role as senior advisor to TPG Capital, he had tried to seal a deal with ICICI Bank to buy the home finance unit but due to the transaction failed as other firms like True North and Baring PE Asia offered a higher price. The NBFC is looking to open branches across 15 states in the next three years, which will be used to sell vehicle and housing loans to middle income customers. R. Sridhar also said “We are looking to grow the retail loan business much faster than the corporate loan book. Our aim is to grow the assets under management by five times to Rs25,000 crore by 2021”.
DHFL Officially Forecasted Growth of 30% in Home Loans for this Fiscal
DHFL (Dewan Housing Finance Limited) has officially forecasted growth of 30% in home loans for this present fiscal. DHFL feels that most of this growth in home loans will be majorly spurred by the smaller towns and cities in India. The Central Government has given a strong push to affordable housing through a slew of measures like infrastructure status, input credit for developers and interest subsidies under the PMAY (Pradhan Mantri Awas Yojana). The company remains positive about achieving 30% growth and this is an indicator of the strong demand for affordable housing in India. DHFL posted net profits of 26.1% for the quarter ending in September 2017. Net profits stood at Rs.293.3 crore with AUM (assets under management) witnessing the growth of 25.1%, touching Rs. 94, 089 crore for the quarter.
Zero minimum balance, no online transaction fees & other key features launched by Paytm Payments Banks
Paytm's Payments Bank is officially official now. Union Finance Minister Arun Jaitley inaugurated the service at an event in New Delhi on Tuesday. Paytm Payments Bank is notably India's mobile-first bank with which you will be able to make online transactions at zero cost. Here you have benefits of no online transaction fees, Zero minimum balance and other important feature. You also need not keep a minimum balance to maintain a Paytm Payments Bank account, unlike most of the other bank accounts. The key motto of launching the Paytm Payments Bank is to build a new business model in the banking industry, notes Paytm. By launching the payments bank, Paytm is mainly focusing on bringing financial services to hundreds of millions of un-served or underserved consumers across the country, claims the company. Paytm is also looking forward to investing around $500 million in KYC operations. The company is in the process of setting up KYC centers across India to complete KYC for customers and make them eligible for a Payments Bank account.
Paytm Aims to Become World’s Largest Full Service Digital Bank – Alibaba
Paytm Payments Bank aims to create the world’s largest digital bank with 500 million accounts, envisioning an online financial services provider of everything from wealth management to credit cards and stock market trading. The bank, backed by the country’s largest digital wallet of the same name, launched formally Tuesday and is targeting people who don’t have access to professional financial services. That aligns with Prime Minister Narendra Modi’s ambition to broaden access for the under-banked in the nation of 1.3 billion people. “We are unveiling our money market fund, launching our debit card and we’ll have the capabilities to allow enterprises to open business accounts,” Paytm founder Vijay Shekhar Sharma said in a phone interview that coincided with a formal inauguration in New Delhi attended by Finance Minister Arun Jaitley. “Digital payments was our entry point, we want to become a vertically-integrated financial services company.” India’s government is supporting financial technology with incentives and a string of initiatives such as digital lockers and user-authentication based on its digital identity program, Aadhaar. Paytm was one of fewer than a dozen entities that secured permits to start payments banks, which can accept deposits and remittances but cannot lend. It said it will operate a mobile-first bank with zero fees on online transactions and no minimum balance. Paytm Payments Bank is majority-owned by Sharma. One97 Communications, which operates Paytm and is backed by Alibaba Group Holding Ltd. and Jack Ma’s Ant Financial, holds the remaining 49 percent. The bank grew out of Paytm’s digital wallet, which amassed over a hundred million customers after India took high-denomination bills -- or nearly 90 percent of the value of cash -- out of circulation last November. Sharma may have found a way around the regulatory hurdles that bar lending. One97 Communications will introduce a charge card and offer monthly installment-based loans, he said. “We will launch share trading and insurance products very soon,” he added. “We want to become an internet-age financial services company.”
PNB to offload 6% in PNB Housing Fin to raise Rs1,324cr
Punjab National Bank looks to raise over Rs1,324cr by diluting 6% holding in subsidiary firm PNB Housing Finance in an offer for sale (OFS) that starts today. The floor price of the OFS is Rs1,325 per share. PNB proposes to sell upto 99,94,000 equity shares on November 28 for non-retail investors only and for retail investors and non-retail investors who choose to carry forward their bids on November 29. This is a good number for any bank. PNB Housing is a unit of PNB which owns 38.86% stake in PNB Housing. The company to witness improvement in net interest margins going ahead.
Bajaj Finserv Offers Unique Proposition on Personal Loans
Pune, Maharashtra, India Bajaj Finserv offers a unique proposition - Personal Line of credit to its customer that allots a specific amount that can be withdrawn and used for any financial requirements for any purpose you can easily withdraw money. Personal Line of Credit is a personal loan that allows the consumer to use any amount within the assigned limit and pay interest on the amount withdrawn. This is a special loan provide by Bajaj Finserv where the user only pays the interest amount as EMI. Consumer opting for Line of credit pay up to 45% lowers EMIs every month. Benefits of Personal Line of Credit by Bajaj Finserv 1. Lower instalments 2. Flexibility 3. No collateral 4. No hidden costs
Small rise in auto & home loan default in 2 years
MUMBAI Auto and home loans have seen a marginal increase in the ratio of offending accounts—failure to make timely payment—over the last two years. However, gold loans and two-wheeler loans have witnessed a reduction in delinquencies. A report by credit information bureau TransUnion Cibil (TUCIBIL) has shown that the overall delinquency rates in retail have been stable while variation in delinquencies among different segments have come down. For NBFCs (non-banking finance companies) and private banks, while the overall portfolio delinquency is showing a downward trajectory, it should be noted that these institutions also displayed the most increase in disbursements over the last few periods that could suppress the delinquency ratios," said Harshala Chandorkar, chief operating officer, TUCIBIL. "The availability of bureau data is enabling far reaching changes in broader credit infrastructure in India. This includes the adoption of digitisation of processes, instant credit decisioning and digital workflows, and enhanced early warning systems. Lowering of costs of credit is yet another advantage achieved with extensive usage of bureau data and solutions," said Chandorkar.
Modi is waiving rup 6 lakh cr of corporate loans: Rahul Gandhi
AHMEDABAD Congress vice president Rahul Gandhi claimed that the Narendra Modi government will soon waice rup 6 lakh crore owed by 10-15 corporate houses in an aggressively resuming his election campaign. He also said in earlier phase the NDA government has already waived rup 1.20 lakh crore of big industrialists and is now going to waive another rup 6 lakh crore.“During the last 22 years of BJP rule, only 10-15 big industrialists had access to the corridors of power. And they marketed Modi. The State government took away your land for their benefits. They polluted the environment and the coast, forcing you to sail into the deeper sea to catch fish,” Rahul Gandhi said. Gujarat at present has 50 lakh jobless youths, said Rahul. “He also gave away all the ports in Gujarat to a friend of his,” he added without naming anyone. Based on the Gujarat results, the party is likely to recalibrate its strategy for eight Assembly elections in 2018 and the Lok Sabha election in 2019, sources said.
RBL Bank Selects 10 Startup Winners in The Big Pitch 2.0 Finale
RBL Bank, one of India’s fastest-growing private sector banks, announced 10 winners at the grand finale of The Big Pitch 2.0 — a major startup incubation and funding contest held at Amity University, Noida. The Top 10 finalists; FullTank Technologies, LittlePixi, SocioGraph Solutions, Team Rentezee, Tnine, GalaxyCard, ilove9months, NDAX, Loktra and Veda Labs were selected for funding and incubation opportunities. These companies demonstrated innovative solutions such as unique business models like Use of artificial intelligence in improving sales, app based credit cards and blockchain based asset exchange. Surinder Chawla, Head – Geography, Branch and Business Banking, RBL Bank, said, “At RBL Bank, we have been committed and focused on serving the dynamic needs of the start-up ecosystem right from ‘seed and development’ to ‘maturity’. The Big Pitch 2.0 – a one-of-a-kind start-up incubation event that was held for the second year in succession, gave potential startups a robust platform to seek advice from professionals, articulate ideas behind their business models and gain access to funding for their proposed ventures. I am delighted that RBL Bank’s The Big Pitch 2.0 and India startup Club (ISC) has been catalytic in introducing startups to reputed mentors and encouraging them to achieve their entrepreneurial goals.”
Report Says: NBFC and HFCs credit share to increase to 19% by 2020
The share of non-banks, comprising non-banking finance companies, or NBFCs, and housing finance companies, or HFCs in India’s credit pie is seen rising 300 basis points (bps) to 19% over the next three years through fiscal 2020, mostly on loans against property, says a research report. This is a magical number for finance history. Gurpreet Chhatwal, President of CRISIL Ratings, says, “The opportunity in reality and the structured credit space has increased materially after the implementation of RERA and rising demand for mid-corporate promoter financing." Krishnan Sitaraman, Senior Director of CRISIL Ratings Said “The growth of fintechs is an opportunity for collaboration – and not competition – for NBFCs on the origination side. The benefits will stem from better quality and lower cost of origination, stronger underwriting norms, more focused identification of customers, and expansion of the target market segment. However, NBFCs’ collections architecture will be predominantly offline given the importance of close customer engagement”.
SBI's first comprehensive digital service platform: SBI’s New App YONO
Finance Minister Arun Jaitley is all set to launch State Bank of India’s (SBI) first comprehensive digital service platform, YONO, which stands for 'You Only Need One' application on Friday. YOMO is a one-stop solution for all digital services including banking, ticket booking, insurance, mutual fund buying and online shopping, SBI targets to achieve mass download on the very first day of its launch. You can also open a savings account, apply loans and online shopping with the help of this app. Some of the key e-commerce partners are Amazon, Uber, Ola, Myntra, Jabong, Shoppers Stop, Cox & Kings, Thomas Cook, Yatra, Airbnb, Swiggy and Byjus along with numerous others. "Customers will be able to seamlessly access lifestyle offerings and financial services with a single user id and password. The portal has been designed to offer maximum customer convenience where each journey has been designed with minimum possible clicks with easy to understand descriptions," said chairman SBI, Rajnish Kumar.
Bajaj Finserv Offers Lowest Interest Rate of 8.30 percent on Home Loans
Bajaj Finance Ltd. has announced the lowest ever interest rates of 8.30% on Home Loans & Home Loan Balance Transfer in its limited period offer. Home buyers can now avail a loan at 8.30% for a loan value above Rs. 30 lakh. It’s limited period offer so hurry. Currently, it is one of the lowest interests offered by any financial institution in the country. Bajaj Finserv is also offering the highest top-up value of Rs. 50 lakh of applicants opting for balance transfer at a minimal interest rate. The top-up amount can be used for different purposes like wedding or holiday expenditure, new home decoration and improvement or second home investment through a very simple process. The Home loan offer is open to all customers applying for new loans and ones seeking home loan balance transfer between November 23 to November 29, 2017. Home loans from Bajaj Finserv come bundled with other added advantages like instant approval, 3 EMI Holiday, speedy disbursal and much more.
Ryots urged to form farmer clubs, NABARD promises to help achieve self reliance
It’s an official announcement of the National bank of Agriculture and Rural Development (NABARD) said the bank was willing to assist farmers financially if they manage themselves into smaller groups and form farmer clubs, to grow as a community. NABARD Deputy Managing Director H. R. Dave said “We will assist you in marketing your agriculture produce, and also produce from allied activities”. He also said “When a village becomes one unit and sets up cattle hostels (like in Gujarat), growth exceeds estimates and makes communities stronger”. The officials (NABARD) interacted with the villagers. They inaugurated card swiping services for farmers and disbursed Rupay-Kisan Credit Cards to eligible persons.
Yes Bank has raised $400 million syndicated loans from Japan, Taiwan
Yes Bank has raised $400 million in syndicated loans from lenders in Taiwan and Japan for on-lending to clients. A statement said It exercised a greenshoe option to raise $250 million in a 5 year commercial loan from 17 Taiwanese banks. Also In Japan, it raised JPY 16.5 billion or $150 million from eight lenders in a one-year loan in a maiden transaction. This borrowing will be used for on-lending through its international branch at GIFT City Ahmedabad. Its overall foreign asset book had stood at $1.4 billion as of September. Director and chief executive Rana Kapoor said “Our maiden samurai transaction in Japan and strategic syndications in Taiwan demonstrate the Bank’s ability to tap varied resource pools at competitive prices”. This the second time the bank has raised money from Taiwan, after a $130 million loan from 10 banks last year, it said, adding that this year it had commitments of $355 million. The bank scrip was trading 0.94 per cent up at Rs 316.15 a piece on the BSE at 1343 hrs, as against 0.66 percent gain on the benchmark.
From ICICI to Kotak Mahindra, banks looking to steal a march on wallets
The 811 — touted to be the first-of-its-kind digital bank — has helped mid-sized private lender Kotak Mahindra Bank take its deposit base to 10.5 million from 8 million within the first six months of the launch. Ambuj Chandna, senior EVP, KMB, said 98% of those using 811 were new customers for the bank. “We’ve basically launched this product for only new customers. While we also made 811 a good experience for existing customers since there was a huge demand, that’s a very small segment, only about 2-3% of the total number of users”. That is the first digital bank which has a good user experience. He also explained about “We are getting a significantly strong proportion of people with good Cibil scores. So, we are building a stack of innovations which will help us cross-sell deeper into space”. Late last week, ICICI Bank said it was teaming up with PayTm to offer short-term instant digital credits on the latter’s e-commerce platform. Änup Bagchi, ED, ICICI Bank, said this was the first time a lender was assessing credit real time. “We are using financial data but we are also using behavioural data of the customers to help us with our credit scoring,” Bagchi said.
Good News, State govt. can waive off farm loan
Good news! The Union Ministry of Home Affairs has now given the cabinet its consent to waive off loans taken from co-operative society. The Ministry led by V. Narayanasamy, in its first Cabinet meeting, had taken a decision to waive off loans to the tune of Rs. 22 crore taken from Primary Agriculture Co-operative Societies (PACS) by raising additional resources. That is the joint decision with the union finance ministry and the Lt Governor, Sudir Kumar Raj Director, MHA said “The proposal has been examined and it is informed that no financial assistance from the Centre shall be available for waiver of any kind of agricultural loans.” “Hence, the scheme for waiver of loans taken from the commercial banks is not agreed to. Also, the government may waive off the agricultural loans availed from co-operative institutions but no financial assistance from the Centre would be availed for the same.”
Haryana fixes rate of interest on various loans & advances to employees for financial year 2017-18
A spokesman for the Finance Department on Monday said it had been decided to charge interest at the rate of 7.8% for first advance and 8.8% for the second advance for house building, motor car, scooter, motorcycle, moped, cycle, computer and marriage loans for the financial year 2017-18. In this financial year interest rate would be 7.8% for various loans including a personal loan for some sections. He said 9.8 percent rate of interest would be charged for the third advance for marriage loan. He said it has also been decided to fix the interest rate of 7.8% per annum on deposits in the General Provident Fund and other similar funds with effect from October 1 to December 31, 2017. That will be the good news for Haryana employees for this financial year.
Now days cards used more for real time, face to face shopping than online purchases: Visa
Post demonetisation of Rs 500 & 1000 notes on Nov 16, consumers have transitioned from cash to digital to settle payments transactions. The usage of digital modes like cards for shopping face to face or real time is much higher than for online purchases during this year. Top cities with the highest growth in card spend for face to face spend during this year Diwali was Delhi (97%), Chandigarh(76%), Coimbatore( 73%), Pune ( 67%) and Ahmedabad (59%). These 5 cities together accounted for 57% of total face to face card spend during the festival. This days digital payment goes viral every one looking for digital payment. Spending on Jewellery was high highest and was 2.7 times the normal weekly spending by cards that is the good news for digital India, followed by spending buying electronics and apparel and accessories. While spending in Delhi, Mumbai and Bengaluru were the highest for jewellery purchases, in Chennai face to face card spend was more for apparel and accessories and in Hyderabad cars were used for electronics purchases.
Report Says: Card transactions soar 84% in Sep 2017 to Rs 74,090 cr
Mumbai Card transactions (debit and credit both) have jumped to Rs 74090 crore in September this year which is the great news for digital India, up a hefty 84 percent as compared to the same month last year when it stood at Rs 40130 crore thanks to the government push for non-cash payments (Digital India) says a study. In September 2016 the number stood at 203 million, it added. Chief executive of Worldline South Asia & Middle East Deepak Chandnani told “With demonetisation, people were pushed to use non- cash modes of payment for everyday expenses. Even after the cash is back to the pre-demonetisation levels, there is a visible growth in card transactions". All India survey said increase cards usage started with the Prime Minister Jan Dhan Yojana (PMJDY) in Aug 2014. The total number of cards as of September 2017 stood at 853 million. Of this 33.3 million were credit cards and 819.8 million were debit cards that are a good amount of card history. Total growth of credit cards from 2016 to 2017 has been 24% which is higher than the average growth but consistent with the trend of the past few years. In between 2011 and 2016 credit cards have seen a steady 9% increase.
Retail digital payments: Most modes grew in volume during Aug-Sept period
As per released data by the Reserve Bank of India (RBI) digital payment grew in volume between August & September with credit and debit cards and prepaid payment instruments ( PPIs ) or wallets being the laggards. Unified Payments Interface (UPI) grew the fastest on a month-on-month (m-o-m) basis in September in terms of volume of transactions which is likely good number. While the volume rose 85.4% over August to 30.8 million, the value of transactions on the channel grew 28% to Rs 5,293.48 crore in September. This is rapidly increasing month by month basis. It was followed by Immediate Payment Service (IMPS) transactions, which rose 9.5% m-o-m to 82.85 million and the aggregate transaction value rose 10% to Rs 71,760 crore. The volume of transactions via the National Electronic Fund Transfer (NEFT) mode rose 2.3% m-o-m to 151.61 million in August, while the value of transactions increased 4% to Rs 12.5 lakh crore between July and August.
Chola looking to ramp up home loan portfolio: MD
N Srinivasan said we have started pure home loans and the current portfolio size is ?600-700 crore. Recently appointed executive vice-chairman and managing director, N Srinivasan discussed the company’s growth prospects and new initiatives which will help to company growth. With ?35,000 crore, Murugappa Group’s NBFC Cholamandalam Investment and Finance Company has emerged as one of the dominant players in vehicle finance business.
You should know about the changes in PMAY for Middle Income Group
NEW DELHI with the idea of "Housing for All", the government has been making changes in the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (Urban). Before, it had extended the interest subsidy (up to Rs 2.60 lakh) on home loans for the Middle Income Group (MIG) beneficiary till March 2019. Honourable Prime Minister Narendra Modi, approved the increase in the carpet area of houses eligible for interest subsidy under the CLSS also for the MIG beneficiaries, a government notification stated. All changes will be effective from January 1, 2017, which is the date when the CLSS for MIG had become effective, the notification added. The carpet area is divided into two categories, MIG-I & MIG-II. Under the MIG-I category, the area of the houses has been enhanced "up to 120 square meters" from exiting 90 square meters. For MIG-II category, the area has been increased "up to 150 square meters" from the current 110.
Dena Bank to offer cheapest home loan at 8.25% to 9 %
New Delhi Dena Bank on Wednesday announced to offer cheapest home loan at 8.25%, leaving behind SBI in term of the cheapest home loan rate. Earlier SBI announced to give home loan at 8.3%, which was the lowest home rate provide by any bank. Dena Bank's offer 'Dena Retail Loan Carnival’ is a part of the retail loan carnival and stretches till the end of this calendar year. They offer loans in the range of 8.25% - 9% from Nov 16, 2017, to Dec 31, 2017. This carnival is happening for promoting housing & vehicle loans. It will offer home loans up to Rs 75 lakh at 8.25% per annum and car loans at 9% per annum.
Paytm, ICICI Bank jointly launch ‘Paytm-ICICI Bank Postpaid’ offer short-term digital loans up to Rs 20,000 for 45 days
Paytm has partnered with ICICI Bank, offering interest-free short-term digital loans up to Rs 20,000 for a maximum of 45 days, get access to instant credit for everyday use-cases ranging from movies to bill payments to flights to physical goods. If you go beyond 45 days, the bank will charge a penalty of approx 50 rs and interest rate of 3% per month. This offer only for common customers of Paytm & ICICI banks, for now, will not be available to Paytm Payment Banks or ICICI banks wallet pocket’s customer. According to bank statement “This new offering will enable millions of Paytm customers to get access to instant credit for the first time for everyday use-cases ranging from movies to bill payments to flights to physical goods”. Anup Bagchi, Executive Director, ICICI Bank said, "This can be looked at as a private credit card, there are a lot of impulse purchases that take place. In general, when people purchase, it is by way of existing money or credit. From the credit they choose, a large of it may get paid but there would be some portfolio, which may get rolled over and that’s where we make money. That’s the game."
Non-banking finance company Repco Home Finance Q2 rises 24%
Repco Home Finance on Monday reported that its Q2 profit rose 24% to Rs 55.9 crore from Rs 45.2 crore. Total income grew 6% to Rs 281 crore from Rs 265.8 crore, while net interest income grew 14% to Rs 109.3 crore that is the good amount of any non-banking finance company. "The second quarter results were as per expected lines where we centred on retaining pricing discipline and handling costs to unlock shareholder value. The operating environment has shown meaningful improvement in scope for further improvement is there. Heading forward, accelerating the rate of asset book progress and increasing the asset quality will form the bedrock of our initiatives, “said R Varadarajan, CEO, Repco Home Finance. The home finance lender increased loan disbursement by 37% to Rs 752.5 crore. Net interest margin expanded to 4. 8%, while the cost to income ratio declined to 15. 0%. While the overall loan book rose 10% to Rs 9,321.2 crore at the end of Sep 2017, individual home loan book increased 12%. Lending options to the self- employed segment made up 60 percent of the outstanding loan book and loans against property accounted for 19.4% of the same.
Bank of Baroda net falls 36% to Rs 355cr as bad loan provisions spike 26%
Bank of Baroda today reported a 36 % plunge in net profit at Rs 355 crore in the quarter to September, driven down by higher requirements for bad loans. A total number of provisions rose 25.68 % to Rs 2,687 crore in the quarter as against Rs 2,138 crore a year ago, while provisions for non-performing loans rose 13 % to Rs 1,847 crore from Rs 1,630 crore. Managing director PS Jayakumar told reporters “We feel positive about our ability to grow the balance sheet as far as NPA is concerned. We are working very hard and we feel that the NPA ratios will improve here onwards. We've to contain NPAs. A lot depends upon how the NCLT cases pan out". Also "We need to do more on recoveries asap". In the run-up to the announcement, the BoB counter ended the day up 1.5% at Rs 174.40 on the BSE whose main gauge ended the day 0.28 percent down. Bank's total business rose by 5.30%to Rs 9, 70,514 crores from Rs 9, 21,681 crores. Total deposits stood at Rs 5, 83,212 crore as against Rs 5, 67,531 crore.
Farmers continue protest against stoppage in loan waiver process
With all the state government still to implement debt waiver, seven farm organizations have made a decision to resume protests in support of their with regard to complete loan waiver for farmers. The protests would be placed in front of the deputy commissioner offices across the state on Dec12. Earlier on Oct 16, talks between the state government and the farm organizations had failed to make any progress on the issue and the following meeting between both sides scheduled for November 10 could hardly take place. Meeting of the representatives of the farm; BKU Ekta Ugrahan, BKU Dakonda, Kirti Kisan Union, Krantikari Kisan union, Kisan sangharsh committee, BKU (Krantikari) and Kisan sangharsh committee (Azaad), which was held on Saturday at Moga, where it was decided to resume protests. Earlier, the farm organisations had held 5-day protest outside Patiala from September 22 to 26. BKU Ekta Ugrahan general secretary Sukhdev Singh Kokri said "We want complete loan waiver without any bar of Rs 2 lakh as was promised by the Congress before elections. For it, we will hold protests on December 13 across the state,"
Right here is the impact of Goods and Services Tax on home loan customers
For anyone who is willing to get a home loan in the foreseeable future, it is extremely important to understand the effect of the Goods and Services Tax (GST) that came up into effect on one particular July 2017 in India. GST is a specific indirect tax levied on the consumption, sale and fabrication coming from all types of goods and services at the domestic level. That is the India's most significant tax reform since independence. The GST Council has been formed to provide the system. The four tax brackets have recently been fixed at 5%, 12%, 18% and 28% for various types of products and services. The new tax system has a direct effect on home loan seekers and the complete real estate industry in India.
SBI offers lowest interest rate on home loans at 8.30%.
Were you scouting for the best offers on home loan for your dream home? In a huge relief to customers, the country's major lender State Bank of India (SBI) has reduced lending rate on the home loan to 8.30%. With this reduction, SBI's offering in the home loan segment has become the lowest on the market. On November 1, your bank reduced its one-year MCLR by 5 basis take into account 7.95% against 8 every cent earlier. Home loans lending rates are pegged over and above one-year MCLR rate. While for the salaried men the spread stands at 40 most basic points, women borrowers have to pay 35 most basic points over and above MCLR for a property loan. The bank has reduced auto loan rates too. The lending rate now stands reduced to 9.2% from 9.25% earlier after the lower in MCLR. The women loan borrowers can avail the same at 9.15% due to a reduced spread of MCLR applicable to them. ICICI Bank has an MCLR rate of 8. 20 percent for one year which has been last reduced in January 2017. An additional one more private sector bank, Axis Bank has additionally reduced their MCLR to 8.25% in January this year. Bank of India (BoI) tinkered with its MCLR in The month of September, this year, in order to reduce its rate from 8.40% to 8.30%. According to experts, other banks will be required to reduce MCLR rate due to a reduction in incremental expense of borrowing.
Personal loans, credit cards spike among stumbling bank credit growth
Indians are living off credit more than ever. While industrial segments are showing a meagre or poor growth, the buyers are progressively relying upon credit to address their issues. While net bank credit developed only 4.2% year on year in September, slower than the 6.2% in the previous month, credit cards and personal loans have revealed a twofold digit ascend, as indicated by the sectoral bank credit development figures discharged by Reserve Bank of India (RBI). Soumya Kanti Ghosh, chief economist with State Bank India (SBI), said, "The industrial segments are stagnating for a considerable period of time. It is bound to hit the consumer finance segments. The growth in credit cards and personal loan segments shows that consumer indebtedness in India is growing."
Tata Housing offers home loan rate of 3.99 pc to new purchasers
Tata Housing today said it has joined with Indiabulls Housing Finance to offer home loans at 3.99 percent interest rate to those who buy apartments in its ongoing 11 projects. Tata Housing today launched its 'Monetize India' campaign in partnership with IndiaBulls Home Loans. The campaign which is running by Tata housing gives home purchasers the opportunity to own a property "at a special, one-time home loan rate of 3.99 percent", that would be valid for the first five years, the company said in an announcement. Tata Housing Head - Marketing and Sales Tarun Mehrotra said, "It has been an eventful year for the sector in India which is standing on the threshold of change...We hope that this will stimulate fence sitters to act on their need or wish to invest in real estate, as it continues to be one of the best forms of security and wealth generating assets."
Indiabulls' NBFC unit to tap bank customers for personal loans
Indiabulls Ventures is getting into buyer back with a major push on individual personal loan by tapping the current clients of banks. It would subsidize the individuals who are not on the rundown for pre-endorsed credits at moneylenders like HDFC BankBSE - 0.62 % and State Bank of IndiaBSE - 0.86 %, and go out on a limb on its books. Gagan Banga, vice chairman, Indiabulls Housing Finance, told ET, "If banks partner with someone like us, they will get two things -their savings account base will go up and tomorrow they can even potentially buy these loans off us," "Most banks give pre-approved personal loans to over 15 percent of their total customers and the balance go through a typical paper process to avail of any loan. That is a very long process to follow. Considering that they already have a very large (portfolio of) personal loan and credit card outstanding, no risk management principle will allow (them) to grow this loan book at a pace which is faster than their overall balance sheet," he said. With the app, the personal loan can be disbursed in just three minutes.
HDFC Bank reduces MCLR rate by 5 basis points
HDFC bank has reduced its MCLR by 5 basis points across all tenures. One basis point is 0.01 percentage point. That means a total reduction is 0.05 percentage point. One year MCLR now stands at 8.10% while the MCLR for six months is now 7.90%, a bank spokesperson said. The new rates will be effective from November 7, 2017. HDFC bank follows its competitor in reducing MCLR after a reduction in their deposit rates.
Punjab National Bank to close down or shift up to 300 loss-making branches in a year
PNB Bank is planning to shut down, merge or relocate about 200-300 of its loss making branches over the next 12 months under its consolidation plan. “We have closed 2 or 3 branches so far. One of our departments is working on it. We have identified about 200-300 loss-making branches. So, either we will prepare a plan for revamping them, or merger, closure or reopening them at other locations.” Sunil Mehta, Managing Director and Chief Executive of PNB said. The bank added nine branches from April 2017 to June 2017 but has closed a total of six branches in the second quarter. Mehta said they want to turn loss-making branches into profit-making units by tweaking their business strategy. PNB also closed down 928 ATMs in six months from 10,681 as on March end to 9,753 as on September end 2017.
HDFC Bank to set up SmartUp zones in 30 cities for startups
HDFC bank has decided to launch SmartUp zones in over 65 branches in 30 cities across the Country. The specially trained bank staff will offer tailor-made banking to entrepreneurs. The branches include those in tier-2 and tier-3 cities that are emerging as start-up hubs," the country's second-largest private-sector bank said in a release. A SmartUp zone was today inaugurated at one of the branches in Lucknow to cater to the needs of start-ups and to encourage entrepreneurship. "At HDFC Bank, we believe that startups need partners, who will be with them from the start of their entrepreneurial journey, creating solutions that evolve as the company grows," HDFC Bank's regional head, UP, Sanjeev Kumar said on the occasion.
Punjab & Sind Bank cuts MCLR by up to 0.10% for select tenors
Punjab and Sind Bank has slashed its MCLR by 0.10 percent for select maturities from today. "As per the guidelines of Reserve Bank, our bank has reviewed the MCLR for different tenors," PSB said in a regulatory filing. These rates will be effective from November 7, 2017. The one-month, one-year and three-year tenor of loans have been reduced by 0.05 percent each to 8 percent, 8.40 percent and 8.85 percent, respectively. The three month tenor, rates are 8.10 percent and for the overnight and six-month tenor MCLRs are unchanged at 8 percent and 8.20 percent, respectively.
HDFC Bank makes RTGS, NEFT online transactions free, cheques to cost more
In an aim to promote digital economy, Private sector bank HDFC has made online transactions through RTGS and NEFT free of costs. However, the charges for cheque related transactions will get costlier from early next month. As per the revised charges for savings and salary accounts, the customer will not have to pay any charge for doing online transactions through RTGS and NEFT from November 1, 2017. Earlier, customers have levied Rs 25 each for Rs 2-5 lakh online transaction via RTGS and Rs 50 each for such money transfers over Rs 5 lakh. Online NEFT transactions attracted a fee of Rs 2.5 for less than Rs 10,000, Rs 5 for Rs 10,001-1 lakh and Rs 15 for above Rs 1 lakh to Rs 2 lakh. "The revision in NEFT/RTGS online charges is applicable across all retail savings, salary and non-resident customers effective November 1, 2017," HDFC Bank said in a notice to customers. HDFC bank also said that a customer can avail one chequebook of 25 leaves free only once in a year. A cheque returned due to insufficient funds will attract a penalty of Rs 500 each. In cases where cheques deposited are returned unpaid, the charge has been raised to Rs 200 per instance.
Bank of Maharashtra cuts MCLR by 0.5% for all tenors
Bank of Maharashtra has reduced its marginal costs of funds based lending rates (MCLR) by 0.05 percent for all the tenors up to one year. The new rates will be effective from 7 November 2017. "The bank has reviewed its marginal cost of funds based lending rates (MCLR) with effect from November 7, 2017," it said in regulatory filing. For all the tenors overnight, one month, three months, six months and one year, the bank had cut the MCLR by 0.05 percent each to 8.10 percent, 8.15 percent, 8.20 percent, 8.55 percent and 8.65 percent each. However, the bank has kept its base rate unchanged at 9.60 per cent. From April 2016, banks migrated to MCLR system for new loans and review it on monthly basis. The bank may choose to keep it unchanged to revise it downward or upward depending on the market conditions.
Over 1.5 crore GSTR-3B returns filed till September
As per a notification from the Central Board of Excise & Customs, as many as 1.5 crore GSTR-3B returns have been filed between July and September. While 56.8 lakh returns were filed in July and 54 lakh in August, the number came down to 47.4 lakh in September. The last date for filing of GSTR-3 for the month of July 2017 was extended from November 10 to December 11. The last date for filing GSTR-2 for the month of July 2017 was also extended to November 30.
Bihar government will not deposit or transact with banks not giving loans
Deputy Chief Minister of Bihar Sushil Kumar Modi has said that the government will not deposit the money in those banks which will not provide a loan to the people. "In days to come, we will be reviewing as which banks have been hesitant in giving loans (to the beneficiaries). The government will neither deposit its money nor carry out any transaction with banks which have been hesitant in giving loans," the deputy chief minister, who also holds charge of the Finance and Commercial Taxes department, said. By the end of December, the state government will fix the parameters in order to prepare the "ranking and grading" of the banks, he said adding that the government money would be deposited in banks which would be ranked high on the "parameters" fixed by the government. Rural Development Minister Shravan Kumar, Chief Secretary Anjani Kumar Singh, Development Commissioner Shishir Kumar Sinha, senior officials of RBI, NABARD and other banks also attended the meeting. Stating that the state government has received huge numbers of complaints regarding corruption in banks especially on lower levels, Sushil Modi asked the bank officials to act against such erring officials.
Dividend-paying banks most likely to receive recap funds
Under the government recapitalisation programme, the funds will be allocated largely to those lenders that will pay large dividends. The recapitalisation is in the form of a book entry with banks buying bonds from the government and the latter pushing the money back into the lender's’ balance sheet by subscribing to equity capital. According to CEO of a PSB, the government has already sounded out some lenders that the ability to pay a dividend will be criteria in the allocation of capital. Last week, the government announced a Rs 2.11-lakh crore recapitalisation plan for PSBs over two years. After the recapitalisation announcement, SBI chief economist Soumya Kanti Ghosh pointed out in a research report that its burden on the fisc would be very limited, going by the experience in the 1990s. “During 1986 till 2001, interest paid by the government to the nationalised banks on recap bonds works out to 0.07% of GDP per annum on average. According to Nomura economist Sonal Varma, the funds allocated by the government are not just for cleaning up books but also include growth capital.
RBI asks large borrowers to obtain unique code from banks
RBI has now made it mandatory for the corporate borrowers having exposure of Rs 5 crore and above to obtain 20 digits legal Entity Identifier (LEI) from banks in a move to improve risk management. The RBI said borrowers with the fund and non-fund exposure of Rs 1,000 crore and above will have to get the unique code by March 31, 2018. While those having exposure between Rs 500 crore and Rs 1,000 crore have to obtain the code by June 30 and those having between Rs 100 crore and Rs 500 crore by March 31, 2019. "It has been decided that the banks shall advise their existing large corporate borrowers having total exposures of Rs 50 crore and above to obtain LEI," the RBI said in a notification. A separate roadmap for borrowers having exposure between Rs 5 crore and up to Rs 50 crore would be issued in due course, it added. The bank also said that the borrowers who will not obtain LE as per the schedule are not to be granted renewal/enhancement of credit facilities.
SBI rate cut: Home loans now at lowest in industry at 8.30 pct
SBI on Thursday has said that all home loans up to Rs 30 lakh to eligible salaried borrowers can be availed at an interest rate of 8.3% which was earlier 8.35%-8.4%. Car loans will now be priced between 8.7% and 9.2%, as against 8.75%-9.25% earlier. Country’s biggest lender has reduced the MCLR by 5 basis points on Tuesday, taking the one year MCLR to 7.95%. Last month, rating agency Crisil had written that demand for residential property is unlikely to revive in the next 12-18 months. “Though capital values have been under pressure over the past few quarters, a significant chunk of supply in many micro markets remains unaffordable, “analysts at CRISIL Research had said.
UPI clocks almost 77 million transactions in October
RBI promoted instant payment mechanism UPI has shown a more than 100% growth for the month of October. October showed 76.9 million transactions against 30.9 million last month as per the data revealed by the NPCI. Even in terms of the amount transferred through UPI the value stood at Rs 7057 crore against Rs 5325 crore last year with a 32.5% jump. UPI has emerged has the game changer in digital payment space post demonetisation. The government even launched its own application named BHIM to work on its UPI platform since the beginning of the financial year, UPI transaction volume rose 380% to 77 million in October from 3.8 million in April this year, mainly driven by BHIM and Flipkart’s payment arm PhonePe. Also with the addition of Google’s Tez payment application, there has been a significant jump in P2P payments on the UPI platform.
Syndicate Bank Q2 profit up 28%
State-owned Syndicate Bank today reported 27.68 percent jump in its July-September quarter profit to Rs 105.24 crore on annual basis, notwithstanding rising in bad loans. The bank has reportedly posted a profit of Rs 82.42 crore in the same quarter of the previous fiscal year. The total was income was Rs 6,419.21 in the second quarter of the fiscal. However, the bank reported a deterioration as its gross NPA increased. The net NPA too increased to 5.76 percent. Referring to the RBI advised initiation of insolvency resolution process in respect of 12 accounts under the provisions of Insolvency and Bankruptcy Code, Syndicate Bank said it has made pro rata provisions of Rs 172.60 crore during the current quarter.
HDFC Bank to expand SmartUp zones in Bengaluru
After a year of launching dedicated startup zones, HDFC bank is expanding its SmartUp zones across niche branches in the IT capital following in the footsteps of RBL and SBI who launched dedicated branches last year. HDFC bank has said that more than 35% of all the startup accounts opened after SmartUp launch. It will also be launching the service in 65 branches across 30 cities including states like Bihar, UP and in the North-East region. These zones will cater to start up requirements and will speed up the overall process.
SBI slashed MCLR by 5 bps
SBI on Tuesday reduced its MCLR for the first time in 10 months by 5 basis points across tenures. The one-year MCLR at the bank now stands at 7.95%. The overnight rate was reduced to 7.7%, the one-month rate to 7.8%, the three-month rate to 7.85%, the six-month rate of 7.9%, the two-year rate to 8.05% and the three-year rate to 8.1%. The revised rates will be effective from Wednesday. SBI’s one year MCLR are lowest in the system compared to HDFC and ICICI banks with 8.15% MCLR and 8.2% MCLR respectively. On July 31, SBI had reduced its savings rate for accounts with balances of up to Rs 1 crore by 50 bps to 3.5%. Allahabad Bank cuts MCLR by 15 bps Allahabad Bank said it has cut its MCLR across all tenures by 15 basis points with effect from November 1. “As a result, interest rates on home, car and other retail loans are set to become one of the finest in the market,” the bank said. The loans with two-year tenure will have a reduced MCLR at 8.5% from 8.65%.
IDFC Bank, Shriram set to call off merger talks
IDFC bank and Shriram Capital have finally decided to call off the merger talks as both sides have failed to arrive at an acceptable valuation after four months of negotiations and regulatory misgivings. "Shareholders were unhappy, the regulator was unhappy... Nothing was going right for it," said one of the persons. "It was a complex deal. One or two frustrated minority holders were putting a spoke in the process." In the first week of July, the two financial groups have announced talks to combine their business. Post getting license in 2014, IDFC bank was trying to settle its feet in the fast evolving technology is driven banking industry. While Shriram group, lead by billionaire Ajay Piramal, was keen to expand his business by entering in the banking industry. All operating businesses of the two groups were to come together under IDFC Ltd, the companies said on July 8.
Govt sets up Arun Jaitley-panel to oversee PSU bank mergers
In a move to revive PSU banks affected by bad loans, the government on Monday set up a ministerial panel, led by finance minister Arun Jaitley, to consider and oversee mergers among the country’s 21 state-run banks. “Govt walks the talk on banking reforms; constitutes Alternative Mechanism for PSBs consolidation; Finance Minister to head,” financial services secretary Rajiv Kumar said in a tweet on Monday. The decision has come after the government announced a Rs. 2.11 trillion bank recapitalisation plan for public sector lenders. While announcing the capital infusion roadmap for public sector banks last week, Jaitley had said the move will be accompanied by a series of banking reforms over next few months. The idea of bank mergers has been around since at least 1991, when former Reserve Bank of India (RBI) governor M. Narasimham recommended the government merge banks into a three-tiered structure, with three large banks with an international presence at the top. Consolidation is also likely to help them deal better with their credit portfolio, including stressed assets. Consolidation prevents a multiplicity of resources being spent in the same area and strengthens banks to deal with shocks, Jaitley had said in August.
A year after demonetisation RBI says still verifying returned notes
Nearly a year after Prime Minister Narendra Modi announced Demonetisation, the Rs 500 and Rs 1,000 bills returned to banks are still being “processed in all earnest” through a sophisticated currency verification system, the RBI has said. “Specified Bank Notes are being processed in all earnest in a double shift on all available machines (sophisticated counting machines),” the Reserve Bank of India (RBI) said in reply to the RTI query filed by a PTI correspondent. On a question on providing the deadline on completing the counting process, it said, “The verification of notes withdrawn from the circulation is an ongoing process”. As per RBI, at least 66 Sophisticated Currency Verification and Processing (CVPS) machines were being used for counting of junked Rs 500 and Rs 1,000 notes that were deposited with various banks post demonetisation. RBI has earlier said in its annual report for 2016-17 than 99 percent of the demonetised notes have returned to the banking system. “Subject to future corrections based on verification process when completed, the estimated value of specified bank notes received as on June 30, 2017, is Rs 15.28 trillion,” RBI had said in the report.
Axis Bank-backed TReDS platform clocks invoices worth Rs 100cr
Online platform for financing micro, small & medium enterprises which was backed by Axis bank has clocked Rs 100 cr worth of invoices within first 100 days of operations. Invoicemart, a digital invoice discounting TReDS (Trade Receivable Discounting System) platform, was launched in July by A.TREDS, a joint venture of Axis Bank and B2B e-commerce company junction services. "The platform's maiden transaction was completed on July 10, 2017, and over the past 100 days, over 3,000 invoices worth more than Rs 100 crore have been discounted and settled on it. Significantly, it has on-boarded over 100 MSMEs since its launch," A.TREDS said in a statement today. TReDS was launched by RBI with an aim to increase the availability of funds for MSMEs. "The total PSU procurement from micro and small enterprises in 2013-14 was over Rs 12,000 crore or 15 percent of the total procurement. The Public Procurement Policy states that 20 percent of all procurement by PSUs is to be made from MSEs," A.TREDS managing director and CEO Kalyan Basu said. On October 24, the government made it mandatory for all major public sector units to register on TReDS within 90 days of the announcement. This is expected to give a major boost to the MSME sector with transparent price discovery mechanism and an additional avenue for getting their receivables funded.
Narendra Modi Government releases Rs 8,698 crore as GST compensation to states
The central government has released Rs 8,698 crore to states to compensate them for revenue loss post GST implementation. All states barring Rajasthan and Arunachal Pradesh have been given compensation for the first two months (July-August) after Goods and Services Tax rollout. “Rs 8,698 crore has been paid to states as compensation for July and August. This is 58 percent of the total cess revenue of Rs 15,060 crore in the two months,” Bihar Deputy Chief Minister Sushil Modi said. However, compensation was not paid to Arunachal Pradesh and Rajasthan because the states couldn’t file any claim. Under GST law, a cess is levied on top of 28 percent tax on luxury cars, demerit and sin Goods like aerated drink and tobacco to collect revenue to compensate states for any revenue loss on account of GST implementation.
34 sick PSUs suggested for strategic divestment: Niti Aayog CEO Amitabh Kant
Niti Aayog which is considered as the think tank of the central government has recommended strategic disinvestment of 34 sick public sector units so far, CEO Amitabh Kant said today. The Prime Minister's Office had asked the think- tank to look into the viability of sick state-run companies. "We have recommended 34 sick PSUs for strategic disinvestment," Kant said at Crisil India Infrastructure Conclave here. In the current fiscal, the government has aimed to raise Rs 72,000 crore through stake sale in the PSUs. This includes Rs 46,500 crore from minority stake sale, Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from a listing of PSU insurance companies.
ICICI Bank Q2 profit down 34% to Rs 2,058 crore, bad loans stable
ICICI bank on Friday reported a huge decline in September quarter net profit because of a smaller one time gain and said that it is expecting a lower bad loan addition in the current fiscal year. Net profit in the quarter fell 33.7% from a year ago to Rs 2,058.19 crore from Rs 3,102.27 crore. The bank had been expected to post a profit of Rs 2,570.10 crore. In the year-ago quarter, the lender had gained Rs 5,682.03 crore by selling a stake in its life insurance arm. Unlike its rivals Axis Bank and Yes Bank, ICICI bank did not report high bad loans in the three months. Kochhar said ICICI Bank retains its earlier guidance that additions to non-performing assets (NPAs) this fiscal year will be lower than previous years. She forecast domestic loan growth in the financial year to be about 15%, led by as much as a 20% rise in retail loans. At ICICI Bank, gross NPA additions declined to Rs 4,674 crore in the fiscal second quarter from Rs 4,976 crore a quarter ago and Rs8,029 crore a year ago. Gross bad loans rose up by 36.7% at the end of September. The bank said that it has exposure to 18 accounts that are part of the second list of defaulters compiled by RBI.
Bank recapitalisation plan praised by SIDBI, SMERA
SIDBI has welcomed this week's announcement of the plan to recapitalise public sector banks to relieve the burden of their accumulated bad loans and said that this will improve credit disbursement. "These measures augur well for the banking system and point to the resolve of the government to make the system overcome the challenges being faced by it because of the huge non-performing assets (NPAs) and constrained capital adequacy ratio," SIDBI Chairman Mohammad Mustafa said in a statement here. In aiming to boost economic growth, the Union Cabinet has approved a Rs. 2.11 lakh crore recapitalisation plan for state run banks. "This large recapitalisation plan would be positive for the credit quality of these bonds and serve to reinforce the expectation of strong government support for these banks," said Sankar Chakraborti, Chief Executive SMERA, which was created by SIDBI.
Recap will need follow up with structural changes at PSBs: UBS
The recapitalisation programme for public sector banks is likely to boost equity market sentiment as it fuels growth recovery hopes, but should be followed up with structural changes at such banks for better results, says a UBS report. As per the global financial services, the recapitalisation amount may support the growth but may not drive by itself. The government on October 24 unveiled a Rs 2.11-lakh crore two-year roadmap to strengthen NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution. "We think this capital infusion can ease Ind AS adoption for state-owned-enterprise (SOE) banks and accelerate non- performing loan (NPL) clean-up," UBS said in the research note. The report however noted that "this one-time bailout would be wasted if it is not followed up with structural changes at SOE banks (in terms of HR practices, incentive structures and independent boards)". "While bank recapitalisation will be neutral for GDP growth in the short term, we think it may meaningfully improve productivity dynamics and lay the foundation for stronger medium-term growth," the UBS report said.
IDFC Bank launches 100th branch at Honnali, Karnataka
IDFC bank has just launched its 100th branch at Honnali, Karnataka and is now planning to expand its network in the metros in the next year. "We've been working with a focused passion for digital inclusion, designed to bridge the growing divide between rural and urban ways of banking. A 100-branch build-out in two years reflects the bank's sense of purpose and commitment to improving customer experience across the full range of retail customer segments," Dr Rajiv Lall, Founder MD and CEO, IDFC Bank said in a statement. Out of its 100 branches, only 17 are in the metro cities. The bank is planning its expansion in the metros as well to balance their presence in metro, urban and rural geographies.
PNB Housing Q2 Net Up 51% year-on-year
PNB housing finance has reported a 51% year over year increase in net profit of second quarter. For the second quarter ended September 30, the company said profit stood at Rs 208 crore compared with Rs 138 crore a year ago. During the quarter, the company paid a final dividend at the rate of Rs 6 per share. Net interest income grew 69% from a year ago while loan assets registered a growth of 51%. The gross NPAs, as on September 30, stood at 0.34% as against 0.26% a year ago. Net NPAs of the company stood at 0.26% of the loan assets compared with 0.18% a year ago.
RBI imposes Rs 6 crore penalty on Yes Bank, Rs 2 crore on IDFC Bank
RBI has slapped Yes bank and IDFC bank with a penalty of Rs 6 crore and Rs 2 crore respectively for violating regulations issued by the regulator. Yes Bank has been fined for non-compliance with the directions issued by RBI on Income Recognition Asset Classification (IRAC) norms and delayed reporting of information security incident involving ATMs of the bank. "The Reserve Bank of India has imposed on October 23, 2017, a monetary penalty of Rs 6 crore on Yes Bank for non-compliance with the directions issued by RBI on Income Recognition Asset Classification (IRAC) norms and delayed reporting of information security incident involving ATMs of the bank," RBI said in a statement. “After considering the bank’s replies, oral submissions made in the personal hearings, as also the additional information and documents furnished, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty,” the regulator said. The regulator also fined IDFC bank for violating rules as the status report of the bank revealed non-adherence with certain directions pertaining to sanction and renewal of loans.
Bajaj Finance to give new clients loans for mobile phone buys
Bajaj Finance is now raising its risk profile by funding purchase of mobile phones and consumer durables to new customers other than its existing customer base after the segments like furniture and loan against property slowed down. “It (company’s share of mobile phone lending) ought to be bigger than the size of the consumer electronics market,” said Rajeev Jain, MD Bajaj Finance. “People change their phones and tablets faster than they change their television. For the two different segments, the consumer behaviour is very different.” The company, which does Rs 1,551 crore of digital financing, has seen a 63% jump in this segment in the second quarter. “We have taken four and a half years to crack this business segment (mobile product financing),” said Jain. “We are comfortable managing the credit risk of the mobile financing market. You would see it growing very healthy.”
Indiabulls Housing Finance Q2 net rises 26% to Rs 861 crore
IBHFL reported a net profit of Rs 861 crore during the July-September quarter and rises 26% up. "We will see continued growth in home loan business driven by affordable housing. Affordable housing is likely to see a growth of over 35% for IBHFL," said Ashwini Kumar Hooda, deputy managing director. "40% of our affordable housing loans fall under the credit-linked subsidy scheme. Our average ticket size for affordable housing is Rs 25 lakh," Hooda said. The HFC's gross non-performing assets stood at 0.78%, down from 0.83% a year ago. "We will continue to see the asset quality get better as we are seeing a sharp growth in our low-risk retail assets," Hooda said. IBHFL's capital adequacy stood at 21.72% during the quarter, up from 20.91%. Its average loan to value is 71%. "We expect our loan book to grow by Rs 30,000 crore during the year," said Hooda.
Maharashtra: Banks to use own funds for loan waiver, says government
The Maharashtra government has asked the banks to use their own funds to waive farmers’ loan under its ambitious Rs 34,000 crore farm loan waiver scheme. The government has also promised them a reimbursement but has not specified any timeline for it. The state cooperation department has received several queries from the banks seeking clarity on the issue. The cooperation department, in a letter on October 13, asked the banks to use their own capital for settling the loans of eligible farmers and close their loan accounts. Banks should then submit a consolidated report to the government and the government will reimburse them as soon as possible, said the letter. The government will provide the banks with a list of loan accounts of farmers who have been found eligible for a waiver. "As long as the government doesn't reimburse the banks, a huge amount of funds will be stuck and the banks are not going to earn any interest over delayed payment by the government. Banks are highly suspicious about this mode of implementation," said the government official. "We cannot use our entire capital for the implementation of loan waiver scheme which is being executed in phases. Once we get reimbursed for the first phase, we will go for the next one," said a senior official from the banking sector. CM Devendra Fadnavis has said that around 89 lakh farmers will benefit from the scheme.
Kotak General opens to acquisitions to add clients
Kotak general insurance is open to organic opportunities in order to expand its customer base. CEO Mahesh Balasubramanium said an acquisition for the Kotak Mahindra Bank-subsidiary will depend on price and the return that it generates. "We are open to all inorganic opportunities if it will help us acquire customers," said Balasubramanium. "There are both fresh proposals and existing insurance companies or a possible deal," said Balasubramanium. Kotak General Insurance’s premium income grew to Rs 78 crore at the end of September 2017 compared with Rs 82 crore in 2016-17. It sells products through the branches of Kotak Mahindra Bank and Kotak Prime. It has opened 12 branches since inception. "We will look to break even in the fourth or the fifth year of operation," said Balasubramaium. The general insurance market in India is growing at the rate of 15% with 1 lakh crore premiums every year. The company has Rs 175 crore capitals, of which Rs 40 crore was infused this year by its promoters. "Next year, we may need another Rs 40 crore, based on our growth plans as of now," said Balasubramaium.
New petition in SC challenges RBI order for linking Aadhaar with bank account
A writ has questioned the validity of RBI’s decision in the Supreme Court to make its linkage with Aadhaar mandatory. "The government has issued a gazette notification GSR 538(E) dated 1 June 2017 regarding Prevention of Money Laundering (Maintenance of Records) Second Amendment Rules, 2017, inter alia, making furnishing of Aadhaar (for those individuals who are eligible to be enrolled for Aadhaar) and permanent number (PAN) mandatory for opening a bank account," the central bank said. The new petition by Kalyani Menon Shah an activist also challenged the validity of the March 23 circular issued by the department of telecommunication making it mandatory for citizens to link their mobile phones with Aadhaar. As per Menon, both the decisions violated the right to privacy and are unconstitutional. A nine-judge Constitution bench of the SC had in August ruled unanimously that the "right to privacy is an integral part of the right to life and personal liberty guaranteed by Article 21 of the Constitution". The petitioner said, "Building a database dependent on Aadhaar and information linked there constitutes an unreasonable risk to financial autonomy and privacy of account holders, banks and financial sovereignty of the nation." The petitioner said "A citizen's right to privacy is a fundamental right that is constitutionally protected. The right to privacy in the context of these two circulars (linking Aadhaar with bank accounts and mobile phones) has violated a citizen's complete right over ownership and control of his core biometric information to the exclusion of all others, including the State."
Finance Ministry may finalise capital infusion plan for PSBs by December
The finance ministry is working on capital infusion strategy for the public sector banks (PSBs) and is expected to be finalised by December, according to official sources. There are various factors which the ministry is looking at for capital infusion such as NPA ratio, credit growth, insolvency proceedings etc. As per the officials, the final output is likely by December. Last week, Finance Minister Arun Jaitley said the government has faced with a 'catch-22 situation' over the issue of non-performing assets and is now working on a plan to rebuild the capacity of India's banking sector in order to support growth. Banks are facings bad loans of Rs 8 lakh crore out of which Rs 6 lakh crore are only from the PSBs. Last year, the ministry provided capital to banks in two tranches. 13 public sector banks together got Rs 22,915 crore in the first tranche announced in July 2016. In the budget speech on February 1, Finance Minister Arun Jaitley announced capital infusion of Rs 10,000 crore for the current fiscal.
RBI refuses to share details on clean India mission logo on new currency notes
RBI has refused to share details of the decision of putting the logo of PM Narendra Modi’s clean India project on currency notes of Rs 500 and Rs 2,000. Replying to an RTI query, the central bank also did not give a copy of the guidelines on the printing of advertisement. "The information on form, material, design and security features of banknotes, other than available in public domain, is exempt from disclosure in terms of Section 8 (1) (a) of the Right to Information (RTI) Act, 2005," the RBI said in response to the RTI application filed by a PTI correspondent. The central bank was asked to give a copy of the order, communication, and a letter or note sheet in which a decision regarding the printing of Swachh Bharat or clean India missions logo on Rs 500 and Rs 2,000 currency notes. "Indian bank notes contain design elements such as guilloche, flora pattern, motifs and security features," the central bank said. The RTI query was filed with the Department of Economic Affairs which forwarded the application to the RBI for a response.
Odisha government signs MOU with SBI
The Directorate of Treasuries of Odisha’s government and the State Bank of India has signed an MOU for integration of SBI e-Pay with the cyber treasury. An official said that this MOU is an initiative by the state government to facilitate revenue collection from citizens through digital banking. The SBI e-Pay is the payment aggregator service wing of the bank which will facilitate online payment of government dues by the customers of any public/ private sector banks by using the payment gateway of SBI. Users can use any modes like a debit card, credit card, mobile banking, net banking besides cash deposit facility at any SBI branch across the country. It will promote hassle-free digital transaction and one noble initiative to enhance digital penetration by the state's finance department and SBI, Bhubaneswar Circle, the official said. The MOU has been signed by Bhabani Prasad Nanda, Director, Treasuries & Inspection and Goutam Roy, DGM, SBI on behalf of Odisha government and SBI respectively.
Banks need to have stronger bank balance sheets to tackle NPAs- RBI deputy governor N S Vishwanathan
RBI deputy governor N S Vishwanathan has said that the banks have to strengthen their balance sheets to deal with stressed assets. "Stressed assets of the banks are a matter of serious concern, particularly with the public-sector banks. There is a need to make the balance sheets of banks stronger," Vishwanathan said at an interaction organised by the Merchants' Chamber of Commerce and Industry here. "As on March 2017, gross NPAs of the banks was 10 percent of the total exposure, mostly in the public sector. Strong balance sheets help deal with stressed assets," he said. The governor also said that a strong regime would help banks in improving their credit rating. As per Vishwanathan, India is having its own provisioning mechanism in addition to the LCR. Banks are required to maintain both SLR and LCR. In case of borrowings by large corporate, the present global practice is to raise 50 percent of the funds from the market, the RBI official added.
NCLT route cannot be used effectively in all NPA cases: SBI MD P K Gupta
According to SBI Managing Director P K Gupta Today said that banks should use the best mechanism in order to recover bad loans and the NCLT route cannot be used in cases of NPAs. "A lot of resolution mechanisms already are there -- the RBI scheme, an oversight committee," Gupta told reporters on the sidelines of a conference organised by the PFRDA here. "The banks have to use what is the best mechanism in each particular case. The NCLT cannot be the solution for all cases." Those banks which find it tough to recover loans from the borrower can transfer these cases to NCLT. A number of banks, including State Bank of India, Punjab National Bank, Bank of Baroda and IDBI Bank, have initiated proceedings against defaulters by moving the NCLT to recover their dues. The Reserve Bank of India (RBI) has identified 12 large NPA accounts constituting 25 per cent or about Rs 2 lakh crore of the total pie. Essar Steel, Bhushan Steel, Bhushan Steel and Power, Electro steel, Lanco Infratech, Alok Industries, Jyoti Structures and Jaypee Infratech are among the big names that are facing NCLT cases.
Here is how some banks are leaving borrowers hog-tied after every RBI rate cut
All the home loan and vehicle loan borrowers were rejoicing when the RBI cuts lending rates. But unfortunately, the customers still did not get any benefit as the banks don’t effectively transfer the cut to the borrowers. The practice came in light recently when a panel of RBI exposed the banks which "deviated in an ad hoc manner from the specified methodologies" that determine lending rates. "We think that the internal benchmarks like the base rate or the MCLR, based on data, seem to give banks a very high amount of discretion lot of factors that are flexible for them to ensure that lending rates can be kept high even when monetary policy rates are going down an accommodative path," RBI deputy governor Viral Acharya said after the report. Berating such banks, RBI has said that they have undermined the integrity of the interest rate setting process. The base rate and MCLR were also not in sync with global practices on the pricing of loans. According to RBI data banks’ base rates only reduced by 0.61% while policy rate was reduced by 1.75%. Banks were also slow to pass the reduction in MCLR. "Of the 12 banks whose spreads widened, six banks took up to six months to pass on the benefit of lower MCLRs to their lending rates; the remaining six banks passed on the benefit of their lower MCLRs, but only partially even after six months. This is intriguing as changes in MCLRs are expected to be passed on to at least fresh borrowers immediately," the report said.
Banks may probably need Rs 3.3 lakh crore as NPA provisioning in FY18
According to a Crisil report, banks will have to set aside nearly 3.3 lakh crore this fiscal as provisioning for large NPA. "Our estimates show that banks would need to set aside close to Rs 3.3 lakh crore this fiscal, or 50 percent more than Rs 2.2 lakh crore they provided for NPAs last fiscal," Crisil said in the report released. This provisioning quantum was arrived after accounting by account analysis of the economic values of assets underlying large corporate NPAs. "It could lead to a net loss of nearly Rs 60,000 crore for the banking sector this fiscal with public sector banks (PSBs) bearing the brunt of the increase in provisions and the resultant impact on profitability because of their higher stock of NPAs," the report said. As per the rating agency, the potential write-downs may be in the range of 25-75 percent. "Pressure on the earnings profiles of banks would reduce from next fiscal if banks increase provisioning on large corporate NPAs this fiscal," the rating agency's senior director (ratings) Krishnan Sitaraman said.
HDFC Bank experiments voice-activated banking with Amazon’s Alexa
HDFC customers will now be able to handle their finances through voice-operated personal assistant Alexa for Amazon devices. HDFC bank customers who own an Alexa-enabled device can check balances, and pay bills through Amazon’s virtual assistant. “Alexa is a device that is meant to function as a concierge for customers. As of now what we have is a simplistic version of fetching information for customers, that is then converted to voice and begins a conversation. The same concept can get expanded in terms of carrying out a transaction. It will recognize your voice, which becomes the mode of secure authentication; it will then give an alert on your mobile and maybe then you can ask the device to make a bill payment,” explains Nitin Chugh, Country Head – Digital Banking, HDFC Bank. “Alexa’s appeal is in making it easier for users to perform tasks or access information. The same thing could be on a dashboard of a car or on a television set that could be a gesture or remote enabled. We are not only trying to make sense of everything that is coming around but also looking at what technology solution is the most practical and helpful for consumers. We don’t want to it to be a gimmick. If you notice whatever we are trying to do, it is really about a much-differentiated experience for customers dealing with the bank. It is no longer about saying that it is convenient,” says Chugh. It is certainly an interesting move for the customers and will offer the customer to use their voice to get information and even handle transactions.
As per SBI report India may delay implementation of Basel III norms
According to SBI report, India could possibly delay the implementation of global risk norms Basel III and the banking sector is under stress post demonetisation and the rollout of the GST. "We believe that Indian banking sector needs some time to assimilate the impact of past three structural changes (demonetisation, GST implementation and RERA) before facing the new ones," said the SBI Ecowrap in the report - 'Timing Future Reforms in India'. "Even as we acknowledge the positive impact of such reforms, we are convinced that perhaps the Indian banking sector deserves a small interregnum so as to meaningfully concentrate on issues related to financial inclusion, asset quality and credit growth," it said. As per the direction of RBI, the Basel III capital regulation is being implemented in phases from 1st April 2003 and will be fully adopted till March 31, 2019. India has seen three major structural reforms which are impacting Indian economies such as GST, demonetisation and RERA. Country’s banking sector is currently going through tough times due to low credit growth, low profitability and also deterioration in asset quality.
SBI to set up country's largest innovation centre at Mumbai
The country’s largest lender is setting up a 15,000 sq ft innovation centre in Navi Mumbai with Rs 100 crore investments. The centre, to be built at its Global IT Centre in Belapur in Navi Mumbai, is going to be the largest innovation centre by any financial services company in the country, as claimed by the official. "We feel it is very essential to make the bank ready for the future for which we are building the innovation centre," SBI's innovation head Sidon Baraokar told said. He also said that the centre will have 40 dedicated zones for each technology such as blockchain, artificial intelligence, and machine learning etc. The centre is a part of Rs 200 crore allocations where Rs 50 crore is allocated for procurements from innovative start-ups and taking equity stakes in new companies, while the remaining Rs 50 crore is for other needs like software procurements etc, Baraokar said. SBI has decided to allocate 5% of its IT budget for innovation. "The bank chain is a forum of banks to collaboratively work on financial technologies and blockchain solutions," he said. The bank chain has partnered with a Pune-based startup called Prime chain for the initiative.
IMPS, debit cards push digital payments to 75.6 million transactions in August
Bank-to-bank transfers and debit card payments at the point of sales terminals push digital payments for August with a 9.5% and 3.5% month-on-month growth, respectively. According to the transaction data released by RBI, IMPS which includes UPI and BHIM reached 75.6 million transactions in August against 69 million in July and 65.8 million in June. Card swipes at ATMs and PoS terminals reached almost 1.1 billion in August. However, there was a slight fall in the transaction through mobile wallet. There was a 4.2% fall in mobile wallet payments. According to an industry observer, August shows greater transactions because of the festival and discounts offers run by merchants for various occasions including the Independence Day. The RBI data also showed the steady growth of debit cards in circulation in the country. The volumes rose from 793 million to 810 million, while credit cards hovered around 32 million from June to August. The number of PoS terminals also saw a growth post demonetisation.
Bandhan Bank slashes micro loan lending rates to 18.4 per cent
Bandhan bank has slashed the lending rates by 12 basis points to 18.4 percent a year. Microloan constitutes around 90% portfolio of the bank. The bank has also cut deposits rates by 10 basis for maturities over six months. The new rates will be effective from October 10. The new deposit rates for one year and less than two years are now at 7.15%, which is the highest offering by the bank. While State Bank of India’s one-year deposit rate is 6.50%. Ghosh said the bank's deposit base grew to around Rs 25000 crore and advances to Rs 22000 crore. Bandhan bank which started two years ago has a customer base of 1.1 crores across 33 Indian states with around 850 branches and 2,500 doorstep service centres.
RIL-SBI payments bank yet to finish regulatory requirements
RIL and SBI promoted payments banks is still in process of finishing regulatory requirements and have not fixed any timeline for starting operations. "We have not really yet finalised (the launch date). It is not a question of time, there are regulatory requirements, and we will have to complete that. When that is over, we will start," a bank official said. The payments bank is joint venture between RIL and public lender SBI. "There is a regulatory process. So, we have to complete that process. Permits of certain things are required and then the RBI will give approval," the official added. "The Subscription and Shareholders' Agreement was signed by RIL as a promoter with a 70 percent equity contribution and SBI as a joint venture with a 30 percent equity contribution on June 30, 2016," RIL had said in 2016. Three license holders out of the 11 have surrendered their license in 2016 while Airtel and Paytm have already executed their operations. Payments bank typically offers services such as remittances and deposits but are not allowed to tender loans.
Government searches candidates among public sector banks for consolidation
The central government has started an internal exercise to establish merger candidates from among the public sector banks (PSBs). The move comes as state-run lenders are yet to approach the finance ministry with their consolidation plans. A senior government official said that the final decision will be taken by the banks after commercial consideration. “We are just looking at all the options and their viability. If banks ask us, we will suggest to them what our findings have been but it is for the banks to initiate the process,” he said. Under the Bank Nationalisation Act 1969, there are certain provisions which allow such kind of mergers. However, these decisions must be approved by the parliament. The government in August has announced an alternative mechanism to speed up the process, which comprises of the panel of ministers. “There have been some informal discussions but no bank has yet shared any concrete plans,” said a finance ministry official. The government has exempted the consolidation from the scrutiny of the Competition Commission of India. The exemption will be available for a period of 10 years and will cover all cases of reconstitution. Geographical spread, branch numbers, capital adequacy, technology platform on which the banks are operating, and bad loans on the lender's’ book, are some of the factors the government is considering while making its own assessment. “It is imperative that the new merged entity has a new name because it has been seen in the past that the employees of the bank, whose identities are lost, are short-changed in the long run,” said a senior bank executive.
RBI all set to launch financial literacy drive in 9 states
The Reserve Bank is going to launch a financial literacy drive in 80 blocks in 9 states on pilot basis to educate people about e-transactions, formal sector borrowings and insurance purchases. Six NGOs that are registered with CRISIL Foundation, Dhan Foundation, Swadhaar Fin Access, Indian School of Micro Finance for Women (ISMW), Samarpit and the PACE Foundation have been selected to execute this project in collaboration with banks. "The Reserve Bank is initiating a pilot project on financial literacy at the block level to explore innovative and participatory approaches to financial literacy," RBI said. The pilot project will be commissioned in 9 states of Maharashtra, Chhattisgarh, Bihar, Odisha, Karnataka, Telangana, Andhra Pradesh, Haryana and Uttar Pradesh. The cost of this project over a three year period is going to be Rs. 18.40 crore. The aim of the CFL is to encourage transactions in savings accounts, and active saving by depositing in banks through fixed deposits and recurring deposits. It will also "encourage e-transactions through electronic means viz NEFT, RTGS, IMPS, Internet Banking, Mobile Banking, UPI (Unified Payment Interface) etc", the document said. The NGO will make people aware to buy life insurance and banking projects.
RBI imposes restrictions on banking activities of Oriental Bank of Commerce
The RBI has imposed some restrictions on banking business of public sector bank Oriental Bank of Commerce. The bank has recently suffered huge losses due to a bad loan. The bank has now become the 7th bank to be placed under such restrictions since March. Bank will face restrictions in terms of opening new branches, hiring staff and lending to sub-investment grade companies, however, it can continue to accept deposits and give small ticket loans. The RBI initiated prompt corrective action (PCA) on October 5 in view of high non-performing assets, the banks said. The bank has said, “This action will not have any material impact on the performance of the bank and will contribute to an overall improvement in its risk management, asset quality, profitability and efficiency.” Earlier RBI has placed restrictions on six banks namely, Dena Bank, Central Bank of India, IDBI Bank, Indian Overseas Bank, Bank of Maharashtra and UCO Bank. RBI has clarified that the banks are placed under PCA to facilitate them to take corrective measures to restore their financial health.
Next boss of India's SBI says bad debt numbers 'will look better'
Interesting credit growth and resolution of stressed assets will be the topmost priority of Rajnish Kumar, the newly appointed chairman of SBI who will take charge from October 7. Speaking to media, Kumar said, "There are challenges so far as corporate credit growth is concerned." The bank has set credit growth target of 6-7% for this economic year. "As far as project pipeline is disturbed, that is a cause of concern and I hope going forward we will have better project pipeline," he said. He indicated that the credit growth will be mainly be driven by retail credit. In order to make better credit, he said that SBI is looking at "more feet on the street, more people doing credit appraisal and it will be actively looking for good corporate credit and SBI has the capability to increase its portfolio." On stressed loans, he said that each case is different. "All these cases have their own complexity. This is a dynamic situation and if we feel any course correction is required we will decide," he said. SBI’s share of bad loans stood at 9.97% as on June 2017. The newly appointed chairman also said that the bank is undergoing digital transformation and revamping its HR. "SBI is a system driven bank and the change in incumbency mean that we will be reviewing all the action plans already happening in the bank. This is time to pause and see what is working, not working, where a course correction is required. Then we will have a blueprint for the next 36 months with short-term and long-term goals clearly delineated," he mentioned.
Crisil: Farm loan waiver could cost the credit union upto Rs 2.5 lakhs crore or 0.5% of GDP
If all affected states also announce farm loan waivers the Uttar Pradesh, Maharashtra, Karnataka and Punjab did, then the total cost the credit union could be up to Rs 2.5 lakhs crore or 0.5% of Gross Domestic Product (GDP) per year, assuming the waiver gets equally spread out over three years, estimates rating firm Crisil Terming farm loan waivers as a "paradox" in a year of normal monsoon. The rating firm has said that the cost could be significantly high for Tamil Nadu, which has the highest outstanding agricultural loans among states. Kerala, Madhya Pradesh and Rajasthan, too, could feel some pressure. The pain points for the farmers are all too visible. And unless measures to lower this pain are planned and implemented carefully, and soon, there could be a gaping hole in the credit union as well, adding more it said that despite, pockets of stress, Kharif production is expected to be healthy.The government's first advance estimates suggest Kharif production could be 2.8% lower on-year for food grains and as much as 7.7% lower for oilseeds. But the decline is also because last year had seen a sharp increase in the area under coverage and production for most crops. Compared with the normal or the typical average for the period, sowing is higher and production as per trend. The flipside to good monsoon and abundant crop of last year, however, is that price for most food grains have fallen and therefore reduced farmer profits. For pulses and oilseeds, prices fell even below their minimum support prices (MSPs) and cost of cultivation, resulting in a loss on the margins, Crisil said. "For several crops, prices and profit margins have continued to decline in recent months", it added.
More than 20 lakhs business due to file final GST returns in 6 days
As the deadline for filing the final returns for the first month of GST nears, the Sushil Modi led Group of Ministers has asked the IT backbone provider GST Network to send reminder text messages to 20 lakhs businesses which are yet to submit the tax forms. In its second meeting, the Group of Ministers (GoM) asked the GST-Network to support for the rush of last-minute filers.The last date for filing of final sales returns for July in GSTR-1 form is October 10, while the date for uploading of purchase returns in GSTR-2 is October 31.The final GSTR-3, matching GSTR-1 and 2, is to be filed by November 10."So far 33 lakhs businesses have filed GSTR-1 for July, while 53 lakhs had filed the initial GSTR-3B returns. So 20 lakhs more businesses have to file in the next 6 days," GoM Chairman and Bihar Deputy CM Sushil Modi said."We appeal to people to file the returns on time. Infosys has prepared a list of businesses who are yet to file returns. "GSTR-2 filing load is the second big challenge and we have alerted Infosys to be prepared," he further added. He said GSTN has accepted initial returns for August in GSTR-3B without any major problem being reported and so far over 43.58 lakhs businesses have filed it for August."We are satisfied with the performance of GSTN. Since the formation of GoM, a lot of issues have been resolved, still some issues remain for which Infosys has been given a timeline to resolve," he said. A group of ministers under Sushil Modi was constituted last month to monitor and resolve technological challenges faced during GST return filing.
Shortly, make payment from one e-wallet to another
The RBI has decided to allow payments from one e-wallet operator to another by helping inter-operability within six months. The central bank, however, has incorporated a rider that the facility will be allowed only for KYC compliant users, which is a small proportion of the overall user base. The RBI is expected to revise its rule for inter-operability by October 11.The development comes at a time when digital payments in India are moving towards payments platforms like unified payments interface (UPI) where money need not be locked in a wallet.UPI enables transfers directly from a bank account. The RBI measure is not seen to be providing a major support to wallet players. "First, the base of KYC compliant users even for the largest player like Paytm would not be more than five million which includes the merchants as well. Second, the wallet users are changing their loyalty based on the amount of discount. So this new move might not have a huge impact on the ecosystem," said Arnav Gupta, an analyst at Forrester Research. Digital wallets, backed by venture capital money, have been offering discounts cashback to users to open accounts with them. Alibaba-backed Paytm has been leading the front in this space on the back of funding from Alibaba and SoftBank. Companies like Mobikwik and Freecharge too have taken a similar approach for customer acquisition.
Your home and personal loans may soon be based on market rates
Those who are willing for home and personal loans their interest rates on loans across the board would soon be benchmarked to external market rates as the banking regulator aims to put an end to the opacity of loan pricing by banks. RBI committee head Dr Janak Raj has suggested that interest rate on loans be fixed to any one of the 3 benchmark rates such as T-bill, certificate of deposit rate or the RBI's repo rate rather than leaving it to the judgment of each bank. It also suggested a ban on banks charging a conversion fee whenever the bank resets the rate of interest."Arbitrariness in calculating the base rate and MCLR and spreads charged over them has undermined the integrity of the interest rate setting process,'' RBI said. Data from the RBI shows that, between December 2014 and October 2016, a month before the demonetisation of Rs 500 and Rs 1,000 notes, banks' Base Rate on an average reduced 0.61 percent when the policy rate was lowered by 1.75 percentage point. The report also suggested that interest rates reset which is now set at annual frequency creating potentially a one year delay in the transmission that these are changed on floating rate loans to quarterly resets. This is done to ensure that the transmission will be much faster. As on now, banks have adopted a marginal cost of lending rate formula where rates are linked to cost of their funds and are reset in different internals such as one month, six months to one year.
Rajnish Kumar frontrunner to be the next SBI chairman
Rajnish Kumar is said to be the frontrunner among runners to head State Bank of India, the country's biggest bank, as Arundhati Bhattacharya's term comes to an end this week. If Kumar selected then he will get a four-year term as chairman and managing director (CMD), according to two senior officials."A formal notification is expected shortly," said one of the officials. Before becoming MD, the national banking group, in 2015, Kumar was heading the merchant banking arm of the bank, SBI Capital Markets, as managing director and CEO. Bhattacharya was chairman of SBI Caps before being appointed the chairman and managing director of SBI. Kumar, currently a managing director with the bank, joined SBI as a probationary officer in 1980 and has worked in various departments. He could not be immediately reached for comment. Kumar posses a master's degree in physics, is an ardent traveller and a good badminton player, according to the SBI website. The new head of the bank will have to lead it through the ongoing resolution of bad loans while ensuring that it supports growth by moving up lending. Bad loans are seen as a fundamental risk while credit growth is a key element of India's economic recovery plan.
Reserve Bank of India set off branch in Dehradun
The Reserve Bank of India today opened a branch in the city to make transactions and business communications of the state government more convenient. Launching the RBI's branch here, Uttarakhand Chief Minister Trivendra Singh Rawat said it was an important step which will speed up the economic development of the state as well as making financial transactions of the government more useful. At the earlier time, the state government had to do financial transactions through the Kanpur branch of the RBI, an official release here mentioned. RBI's Principal Chief General Manager S Ramaswamy guaranteed the state government of all support in its development activities saying a separate branch in the state will ensure smooth disposal of financial works of the state government through better coordination between the treasuries and the banks. This step will enhance the convenience in the state government’s financial and banking works. It will also bringing about a rise in the speed of economic progress in the State.
Demonetization: Urban co-op bank's deposits arrive Rs 50,000 crore
Deposits with urban cooperative banks in the state have climbed to cross Rs 50,000 crore, mainly due to the rush to deposit leftover notes of Rs 500 and Rs 1,000 with banks because of demonetization. According to Gujarat Urban Co-Operative Banks Federation (GUJFED), increasing deposits of 220 urban cooperative banks in the state arrived Rs 50,715 crore at the end of March 2017. "The deposits of urban cooperative banks touched Rs 50,000 crore for the first time ever. Deposits rose by 26 percent from Rs 40,183 crore at the end of the previous financial year," told Jyotindra Mehta, chairman of Gujarat Urban Co-Operative Banks Federation. This was followed by lakhs of people line up at banks to either deposit or to exchange the leftover notes for valid currency. As compared to 26% growth in deposits of UCBs, overall bank deposits in the state grew by just under 16% during the monetary. Bankers say that urban co-op banking sector, which passed through a difficult phase for several years through the 2001 Madhavpura Mercantile Cooperative Bank(MMCB) scam, has strongly put the scam behind it. "People's faith in UCBs was shaken after the scam. However, the growth in recent years, in all parameters, shows that we have been able to win back people's trust," said Mehta. Entire bank credit increased from Rs 4.31 lakhs crore in March 2015 to Rs 4.60 lakhs crore in March 2017.Representatives said that the number of branches of cooperative banks crossed 1,000 for the first time during the financial year, while the depositor base crossed 1 crore.
India going digital, paper clearing at banks falls
The RBI data shows the value of paper-clearing transactions fell a fifth from Rs 100 lakh crore in 2012-13 to Rs 80.9 lakh crore at the end of 2016-17.In the same period, the volume of such transactions fell to 120.6 crores from 131.3 crores. Between 2016 and 2017, the volume of cheque transactions fell by over 11 crores. Paper clearing transactions, which accounted for 82% value of total retail payments in 2011-12, dropped to 37% in 2016-17. "Paper-clearing transactions have gone down because other modes like NEFT, RTGS, IMPS have climbed up significantly," told Mrityunjay Mahapatra, DMD, SBI. Paper clearing consists of cheque truncation system, MICR clearing and non-MICR clearing. The RBI data shows that even before demonetisation, digital transactions had been gradually replacing cheque-based transactions."We have seen demand for cheque payments going up, especially in the SME sector. With GST, cash transactions have come down and been replaced by cheques or demand drafts. However, given the fact that digital transactions are growing phenomenally, cheques as a payment method would gradually come down over a period of time," said Virat Diwanji, head branch banking and acquisition, Kotak Mahindra Bank. Leading the pack was Unified Payments Interface (UPI), which the central bank and the government are pushing to drive retail digital payments. UPI controlled 16.6 million transactions in August against 11.4 million the previous month. The 45% month-on-month increase is the highest so far for UPI since demonetisation. Besides UPI, the growth has been continuous by card swipes at the point of sales terminals for merchant payments.
Banks raining offers on retail borrowers as corporate demand drop
It is raining offers from banks for retail borrowers. The record low corporate demand is forcing banks to serve offers this festive season to attract home to the automobile to iPhone buyers. From EMI waivers to home loan cash backs, interest rate cuts and waiver of processing fees, banks are trying every trick in the book to expand retail growth. State Bank of India, Bank of Baroda and Andhra Bank have lowered their base rate just a week ahead of RBI economic policy announcement, offering benefits to their existing customers as well. SBI cut its base rate by 5 basis points to 8.95% from 9% while Bank of Baroda cut its base rate to 9.15% from 9.50% and Andhra Bank also cut its base rate to 9.70% from 9.55% with effect from October 1st.The bank has also floated Hamara Ghar scheme that offers a fixed rate of 8.35% for the first two years for home loans up to Rs 30 lakhs. "We expect that in this festive season our volumes will increase substantially," said Vaijinath M G, chief general manager at SBI. "We have already brought down our interest rate which is the lowest in the industry and now we have also waived processing fee." Private sector lender Axis Bank recently announced a new product Shubh Aarambh home loans that is extending the benefit of lower interest rates."The size of this opportunity is tremendous and in a year's time, this product itself should be in the vicinity of around Rs 4,000 crore," said Rajiv Anand, executive director at Axis Bank.ICICI Bank, too, announced a new home loan scheme that offers borrowers the benefit of 1% cashback on every EMI, for a minimum loan tenure of 15 years and maximum tenure of 30 years
Govt sees RBI to cut rate amid slowdown
The government expects a helping hand from the RBI in the form of an interest rate cut in the next economy policy review on Wednesday to increase growth which fell to a three-year low of 5.7 percent in the June quarter. According to an SBI report, the RBI is likely to maintain status quo on the key lending rate in its October 4 policy decision as it is "stuck in a puzzle" of low growth and global uncertainties. It said that against the background of flexible inflation targeting, the clear question that arises is choosing between the move towards the 4 percent inflation target quickly or staying in the inflation band. "We expect the RBI to stay on hold at the upcoming meeting as rising incoming inflation and projections of further acceleration in inflation ahead will mean that there would be limited space for further easing," Morgan Stanley said in the research note.A top finance ministry official said there is scope for a RBI rate cut at the next policy review as retail inflation continues to be low. Though, retail inflation rose to a five-month high of 3.36 percent in August due to costlier vegetables and fruits. The consumer price index-based inflation was 2.36 percent in July. Assocham has written to the Reserve Bank of India and the Monetary Policy Committee to cut the interest rates at least by 25 basis points, given the challenges being faced by the economy which needs immediate measures for revival of growth. "At least 50 bps elbow room can be taken with regard to 3.2 percent fiscal deficit for the current and the next financial year," the chamber said.
Oriental Bank of Commerce cuts base rate 9.45%
The nation's leading financial institution and public lender Oriental Bank of Commerce (OBC) today announced a reduction of 0.05 percent in its base rate, to 9.45 percent with effect from October 3. OBC cuts base rate by 5 basis points or minimum lending rate."This is to notify that the bank has revised the base rate from 9.50 percent per annum to 9.45 percent per annum with effect from 3rd of October 2017," Oriental Bank of Commerce said in a regulatory filing with the stock exchanges. The stock was dealing at Rs 120.50 on the BSE today, up 0.54 percent from its previous close. The base rate is the interest rate below which a bank cannot lend. OBC had last cut its base rate in April this year when it brought down its base rate to 9.5 percent.
Axis Bank launch 'cashback' home loans
Banking on excess liquidity, leading private sector lender namely Axis Bank has launched 'cashback' home loan schemes for its borrowers. On Thursday, Axis bank disclosed a 1 percent cash back scheme for its home loan borrowers on their monthly instalment payment or every EMI. The product can help a borrower get up to 11 percent of the principal amount in a 30 year loan period. The bank has launched two more schemes a 20 percent cash back for spends by its debit and credit card customers up to a maximum of Rs 10,000, and a 20 percent step-up repayment which can be additional benefits, executive director Anup Bagchi said. Along these offers, the focus is on ensuring that the borrower pays regularly through the loan contract period and there is no pre-payment. The minimum loan tenure to avail of the product has been fixed at 15-30 years and a customer has the option either to adjust the cashback against principal outstanding or, get it as a direct credit in her bank account. The cashback will start adding from the first EMI itself, but will first get credited to the customer after completion of 36th EMI and then on a yearly basis.
Buyers ignoring free offers while looking at properties
A variety of reasons, including simplicity and reasonably price of projects, are attracting consumers looking for buying properties this festive season rather than the traditional free offers and schemes, experts say. "Traditionally, the festive season has been considered an auspicious time for buying properties. Developers used this time to launch schemes and offers, around their projects, to attract the end-user to increase sales," CBRE South Asia Head, Residential Services India AS Sivaramakrishnan said."After the implementation of RERA, the customer confidence has improved and they are now looking for projects that maintain the highest level of transparency. Right pricing, right location and transparency will drive their decisions this festive season. We will witness the highest sales in this period," Puranik Builders MD Shailesh Puranik said. Owing to the ongoing transformation, developers have been offering attractive rates and payment plans to draw potential buyers, House of Hiranandani Chairman and MD Surendra Hiranandani said. "So, for consumers, this seems to be an ideal time to secure great deals, especially on ready to move-in projects. The demand is also expected to pick up because of the reduced availability of under construction homes owing to pending RERA registrations," he said. Apart from buyers, the festive season will also be an opportunity for an investor who has been shying off from investing in the real estate sector.
Government keep hold on interest rate on small savings for October-December
Prior to monetary policy review, the government today kept unchanged the interest rates on small savings schemes like public provident fund(PPF), Kisan Vikas Patra(KVP) and Sukanya Samriddhi for October-December quarter."The rates of interest on many small savings scheme for the third quarter of the financial year 2017-18 starting October 1 shall remain unchanged from those notified for the second quarter of 2017-18," the Finance Ministry said in a release. The RBI is scheduled to start monetary policy review on October 4. Investments in the PPF scheme will get an annual rate of 7.8% while KVP investments will profit 7.5% and complete in 115 months. The one for girl child savings, Sukanya Samriddhi Account Scheme will offer 8.3% annually. Similarly, the investment on 5-year Senior Citizens Savings Scheme will profit 8.3%. The interest rate on the senior citizen's scheme is paid quarterly. While announcing the quarterly setting of interest rates, the ministry had said the rates of small saving schemes would be linked to government bond yields. The move is expected to encourage banks to lower the deposit rate in line with the small savings rate as offered by the government.
DBS Bank pulls GST Council and government to court
Singapore-based DBS Bank has pulled the Indian government and GST council to the Delhi High Court after it was asked to pay integrated goods and services tax (IGST) on banking services provided to its head office in Singapore. The Court admitted a court order request filed by DBS Bank challenging certain sections of the IGST and issued notices to the government and the GST council to file appropriate replies in the matter. The case has been posted for hearing on November 7. The request has been admitted by the division bench including Justice S Muralidhar and Pratibha Singh. DBS has hired senior lawyers Abhishek A Rastogi and Rashmi Deshpande to appear on its behalf. An email query sent to Central Board of Excise and Customs and the revenue secretary on Thursday afternoon did not bring out any response till the time of going to press. When contacted, DBS Bank refused to comment. Many foreign banks have started paying 18% GST on all the services they provide to their head offices outside India said people familiar with the matter. "Unlike under the service tax regime, all foreign banks are now burdened with an 18% IGST on various services rendered to their head offices outside India when the place of provision of the services is outside of India," said Rastogi. Industry trackers said that the government may have to come out with a clarification to sort out this issue.
SBI, BoB and Andhra Bank slashes base rate
Banks led by the State Bank of India and Bank of Baroda have lowered their Base Rate that would benefit to the huge existing customers who have not migrated to the latest Reserve Bank of India prescribed Marginal Cost Based Lending Rates(MCLR). SBI has cut base rate by 5 basis points to 8.95%. A move that is likely to benefit a substantial number of bank’s borrower. The new rates will be applicable from October 1. SBI, BoB and Andhra Bank have lowered base rate just a week ahead of the Reserve Bank of India monetary policy announcement. While more than half of State Bank of India’s borrowers have migrated to MCLR. A benchmark lending rate system that was introduced since April 2016, the remaining are still charged on the basis of Base Rate. A large number of retail borrowers have their home and education loans linked to base rate. Andhra Bank has reduced base rate to 9.55% from 9.70% while Bank of Baroda has reduced base rate from 9.50% to 9.15%. While this is not a hint of overall interest rates falling, it shows that banks are willing to compromise on their productivity for the benefit of customers. None of the banks have announced a reduction in MCLR rates. SBI is knocked to review its MCLR rates in the first week of October. Its MCLR stands at 8% for one year.
Card payments push may land banks with a Rs 3,800 crore annual hole
The government's digital payments push, mainly online card payments through point-of-sale (PoS) machines, may land banks with a Rs 3,800 crore annual loss, alert a report. After the note-ban in November, the Narendra Modi government has pushed the banks to deploy millions of PoS machines to support online payment. At that time banks have doubled their PoS machines from 13.8 lakhs in March 2016 to 28.4 lakhs as of July 2017 and the consequences were it increases the debit and credit cards transactions from Rs 51,900 crore in October 2016 to Rs 68,500 crore in July 2017."The overall loss of around Rs 3,800 crore per year is quite substantial and hence the sustainability of the card business depends on a number of factors like MDR, low card usage, poor telecom infrastructure, lack of incentives to merchants to accept cards and insufficient awareness about the costs associated with use of cash," the report said. A better telecom infrastructure is needed to drive the digital payments agenda successfully and this can be achieved by ensuring dedicated spectrum for financial transactions alone, as there is the insufficient quantum of spectrum for the infrastructure to take the extra load. The report said the current huge PoS infrastructure that banks have developed have to be supported openly. "Though the government has proposed various measures to support PoS infrastructure and banks are installing PoS terminals, in the long-run, the business would be possible, only if the transactions at PoS exceed ATM transactions, a desirable task indeed," the report concluded.
Syndicate Bank reduces savings account interest rate by 0.5%
Public sector Syndicate Bank has reduced the savings account interest rate by 0.50 percent to 3.50 percent for deposits up to Rs 25 Lakhs. "The bank has revised rate of interest on savings bank deposits with effect from October 10 to 3.50 percent from 4 percent existing rate," the bank said in a regulatory notice. For the deposits above Rs 25 Lakhs, the interest rate is unchanged at 4 percent. With this, Syndicate Bank has joined over two-dozen banks, both from the public sector and private sector, who have cut the interest rate on deposits in various quantum. Shares of Syndicate Bank today closed 2.78 per cent down at Rs 62.85 on Bombay Stock Exchange.
YES BANK first to bring Mastercard's World Elite platform to India; Also launches customized Yes Private Banking programme
YES BANK, India's fifth largest private sector bank, has introduced the uber-exclusive, by invitation only Yes Private Credit Card on the most premium Mastercard World Elite platform which is focused on ultra HNI consumers. It is being launched in India for the first time, in a joint venture with YES BANK. This card provides best-in-class global rights across Travel, Lifestyle, Hospitality, Dining, Entertainment and Wellness for the ultra HNI, global Indian and it comes with a top-of-the-line unique customer value plan of priceless experiences offered by Mastercard. This, strictly by-invitation-only lifestyle card, shall be issued to select 2500 customers only, making it a high desiring product. CEO of YES BANK Rana Kapoor said, "The launch of Yes Private Credit Card is highly momentous for YES BANK. We are proud to be the first bank in India to launch Mastercard's top of the line World Elite platform. More significantly, we are delighted to launch the Yes Private Wealth program, which will cater to ultra HNIs and will significantly help in building YES BANK as the preferred bank for this high premium and discerning segment of customers. This comprehensive banking and wealth management program will be positioned at the highest level, above the existing YES First program for HNIs and YES Prosperity program for Retail consumers." Shares of YES BANK LTD. was last trading in BSE at Rs.353.35 as compared to the previous close of Rs. 360.35.
Performing PSU banks possible to get capital push
The government's approach to giving “growth capital” to performing state-run banks as it looks to support credit disbursement for private investment."Banks have said they are aiming to achieve around 8% increase in their lending books, based on their size and operations," said by the unknown officer. While the government has the only fund of Rs 20,000 crore for bank capital infusion till 2018-19, it is looking at all options to increase this amount. "Various options including capital bonds are being looked at to provide this extra support," the official said. As per the latest Reserve Bank of India data, gross lending by all commercial banks stood at more than Rs 69.45 Lakh crore in July 2017, a growth of just 4.7% over the previous year. Finance minister Arun Jaitley had said at the 70th annual general meeting of Indian Bank's Association that improving the lending capacity of banks and encouraging private sector investments are the two biggest challenges of India."We are looking at both consolidation and strengthening," Jaitley had said, adding the government would rather have strong banks merging with strong banks than weak banks merging with weak banks. A finance ministry officer said that non-performing lenders will be further pushed to consolidate their business, increase improvement and finally look for a merger with other banks. The government has wanted details from banks on their non-core resources and the other steps that they are taking to raise capital from the markets.
SCB begins Good Life platform in India providing dining offers to its debit/credit card base
The Good Life is an international platform where Standard Chartered Bank showcases offers and special promotions to its debit and credit cardholders. Standard Chartered Bank in a gala event launched and made the offers platform live for its India card base and leading the way to tapping the right target group to make sure maximum utilization and customer satisfaction. Alliances Galore with its expertise of over 10 years has organized the offers for the privileged customers of SCB. A vision was seen by Standard Chartered Bank and brought to life by Alliances Galore, the most wanted dining partners in the country. The future for the program is going to look for many more attractive and required offers and promotions ranging from Dining Festivals, promotional offers to Fine Dining Experiences. Co-Founder of Alliances Galore, Vikul Chander said, "Our association with Standard Chartered runs deep. We are proud to be plugging offers on The Good Life platform. Alliances Galore has even been associated with Standard Chartered in Singapore to give curate offers to their customer base". It has also incorporated the reservation system for the SCB card base and make the dining experience a delightful and memorable moment. With the widespread experience and market studies, Alliances Galore is in process of launching a digital platform for the Hospitality Industry to make the entire process of loyalty and offers a faultless flow and connect a larger base of customers to experience the platform.
ICICI Bank- ICICI Bank launches 1% 'cashback' Home Loans
India’s largest private sector lender ICICI Bank announced a new home loan scheme that offers borrowers the benefit of 1% cashback on every EMI, for the entire tenure of the loan. The offer will be valid for home loans with a minimum tenure of 15 years to both residents as well as NRI borrowers and a maximum tenure of 30 years. Though, the cashback will receive only after a period of 3 years of EMI. ICICI bank declared, "This new home loan empowers borrowers to select their preferred mode of cashback. They can choose to utilise the cashback to prepay the principal outstanding of their home loan or take credit in their bank account."Interest rates of ICICI Bank home loan offer 8.35% for women and 8.40% for rest of the borrowers. Anup Bagchi, Executive Director, ICICI Bank said, "ICICI Bank catalysed the growth of retail lending in the country by making a home, auto and other retail loans widely accessible and affordable. We foresee that a combination of young population and rapid urbanisation will lead to the emergence of growing demand for housing in the country." This new home loans offering flexible cashback accruals methods for the customers. Customers can choose to adjust the cashback against principal outstanding of their home loan. Or, they can get it as direct credit in their bank account. The cashback will start to add from the first EMI itself. It will first get credited to the customer after completion of the 36th EMI. Subsequently, after every 12th EMI, it will get credited to the customer. So if the customer takes a loan of Rs 30 lakhs for a tenure of 30 years and decides to use the 1% cash back to prepay principal outstanding amount then the savings would be Rs 3,24,801. This new offer is also available for other mortgage products like a loan against property, lease-rental discounting and top-ups on existing mortgage loans.
Yes Bank claims credit card book has grown to over Rs 250 crore, with 2 lakh users
Private sector lender Yes Bank has claimed that its credit card portfolio crosses Rs 250 crore within one year with 2 lakh customers. "We are running ahead of time in achieving milestones which we had set for ourselves. Our focus is on building the user-base right now and we have 2 lakh cards now," its retail head Pralay Mondal said. He also said that the bank will be fastest to achieve the 1 million credit cards mark. Mondal said the bank, which launched a new card today which will be sold to select millionaires by invitation, will be next launching a commercial banking credit card for a business' needs by December. It now offers 10 products. The card which is the maiden bank tie-up by MasterCard will select 250 millionaires who will be invited to use the offering. According to Mondal, the card is the pre-cursor the launch of a private banking programme for the ultra-rich.
Govt collects Rs 90,669 crore in GST?in second month ever since rollout
The government has collected Rs 90,669 crore in Goods and Services Tax (GST) for August, the second month of the GST rollout. “The total revenue of GST paid under different heads (up to September 25, 2017) is Rs 90,669 crore,” an official statement said, adding these figures do not include GST paid by 10.24 lakh assessees who have opted for composition scheme. Out of which Rs 14,402 crore has come in from the Central GST, Rs 21,067 crore from State GST, Rs 47,377 crore from Integrated GST and Rs 7,823 crore from compensation cess levied on demerit and luxury goods. The last date for payment of GST as well as the filing of GSTR 3B return for the month of August was September 20, 2017. However many assessees have not filed their GST either for July or August 2017. In July, the GST collection was Rs 92,283 crore from 64.42 percent of the total taxpayer base. While many assessees are filing the return for July 2017 belatedly.
GST waiver for under-construction properties attracts customer this Navratri
Offers like white free gold coins and white goods as free gifts by developers this festive season is already attracting the customers but it is the GST waiver that has caught the fancy of real estate developers during this Navratri. Most of the developers in Delhi NCR are luring buyers by offering 12 percent discount by agreeing to absorb the GST. Supertech Limited is giving assured gifts on every new booking. Customers can avail a GST waiver for any ongoing and ready to move in flats across 50 locations. Sikka Group is also offering a GST waiver and a fully furnished flat for its project Sikka Kimaantra Greens, Sikka Kaamna Greens and Sikka Karnam Greens. Gaurs Group is also offering a 100 percent GST benefit for under-construction units besides the usual free maintenance for a year, free car parking, free club membership. However, GST can only be offered for under construction and buyers should not fall for any offer for ready properties. “Builders offering to bear GST (of an under-construction property) is an interesting marketing tactic. The builder is anyway going to receive input set-offs on this GST so the actual discount would be minuscule. It would be interesting to see if developers are, in addition to bearing the GST, also willing to convey the GST input set-offs to buyers. That would be a real discount,” says Ankur Srivastava of GenReal Advisers. Further, Home loan interest rates are at their lowest in the last 10 years, and will remain in that territory owing to the generous liquidity prevalent in the market post demonetisation has put home buyers in a sweet spot.
Government to start promotions of Mudra Yojana on September 27
The government is going to launch promotions campaigns for its flagship programme Mudra Yojana, starting September 27. Pradhan Mantri Mudra Yojana (PMMY) which was launched in 2015, by the Prime Minister aims to provide access of financial facilities to non-corporate, small businesses. According to a government notification, 50 promotion campaigns are to be organized in a different part of the countries. The campaign will start in Varanasi where the union minister, Piyush Goyal will participate. Similarly, a function will be held in Gandhinagar, Gujarat, on October 2, where union minister Nitin Gadkari will be present. The promotion campaigns will be launched by the department of financial services and state level banking committee (SLBC) of different states will actively participate and coordinate all these campaigns. Till August 13, under PMMY around Rs 8.70 crore loans were disbursed out of which Rs 6.56 crore was given to a woman. Mudra promotions will be held in cities like Patna, Shimla, Chandigarh, Chennai, Srinagar, Indore, Ludhiana, Meerut Jodhpur, Bhubaneswar, Hyderabad, Bengaluru and Lucknow among others.
Indian Bank Raises Rs 2000 Crore for providing Infrastructure & Affordable Home Loans in the country
Indian bank on September 22, declared that it has raised Rs. 2000 crore to finance the infrastructure and affordable housing. This amount which was raised through issuing long-term bonds is part of the bank’s Rs 5,000 crore fundraiser plan to finance infrastructure and affordable housing across the country. “The board of directors of the bank on September 21, 2017, accorded approval for issuance of 7-year long-term bonds amounting to Rs 2,000 crore in tranches out of the Rs 5,000 crore,” the bank said in a regulatory filing. Earlier this year, the bank has informed about board approval to raise Rs. 5,000 crore for the purpose. Housing for All by 2022? – is one of the ambitious projects of the government, and to provide affordable housing to all is a dream project of our government. Boosting infrastructure is another key area that has been accorded key priority, Indian Bank had said.
Banks rush to set up Aadhaar centres as UIDAI's Sept 30 deadline draws close
UIDAI has asked all banks to set up Aadhaar enrollment and update centres by Sep 30. The banks need to have at least one centre for every 10 branches they are operating. UIADI in a circular said that it is will charge a penalty of Rs 20,000 per month for every single centre not opened before the deadline. Earlier the UIDAI has asked to start centres by August 30 but banks urged that they will require more time as the process of sourcing biometric device is still in progress. The Centre is trying to step up Aadhaar service centres as every account holder is required to submit the Aadhaar number to banks by December 31. Canara Bank said that is opening 1040 Aadhaar centres across the country. The centres will work inside the branches and will provide Aadhaar enrollment and update to the general public. "We will provide the infrastructure and the centres will be run by authorised agencies," bank General Manager MM Chiniwar said. "We are ready with the infrastructure. The Aadhaar agencies have to set up theirs," he added.
SBI to train bankers from South East Asian countries
State bank of India is planning to open a personal training institute for employees of other banks including Indian banks and other banks of South East Asian countries. The institute will provide leadership training to people in the mid-management level and above. The main focus will be on action based and result in oriented research, Chairman Arundhati Bhattacharya said. "Plans are getting off the table with a number of infrastructure projects being tendered out. Growth should come in a quarter or two," Bhattacharya said. "Government now needs to do some heavy lifting,” she said at the launch of SBI's sixth training centre in Rajarhat near Kolkata. “I think we have enough strength to raise the capital that is required,” Bhattacharya said. She also said that the merger of SBI and its associate banks is a deep structural reform and the bank will surely deliver positive results in the upcoming quarters.
Assured Interest free home loans Singareni workers in Telangana
K Kavitha, MP of Nizamabad and president of Telangana Boggu Gani Karmika Sangham (TBGKS) said that Chief Minister K Chandrashekhar is keen on providing interest-free home loans to the singareni workers. “The State government was keen on expanding SCCL operations and provide more jobs. New mines have been proposed for opening in Yellandu area of SCCL which will provide more jobs. It can be possible only if TBGKS wins the recognised union elections,” she said. “In the present scenario, only the Chief Minister is committed to workers’ welfare and only he can deliver their wishes,” she added. Announcing the election manifesto she promised to resolve the issue of dual jobs under aliases with the one-time settlement. The TBGKS would fight for filling backlog posts of SC and ST workers, childcare leave for women, age and qualification relaxations for experienced employees in promotions, increment against fitment benefit, incentives and charge allowances for mining staff
Reliance Home Finance ended 5% up on its debut at stock market
Reliance Home Finance Ltd, the entity of Reliance Capital Ltd, made a positive debut on the stock exchanges on Friday, rising on the first day of trading. During the day it hit the upper circuit by 5% at Rs 109.20. RHFL is looking to ramp up its affordable housing loan portfolio by tapping the growth potential offered by the housing market and support from the government in the form of subsidies. Ravindra Sudhalkar, executive director and chief executive of RHFL, said the firm expects assets under management to touch Rs 50, 000 crore by 2020. He said the firm had grown at a compound annual rate of 50% in the last three years. RHFL’s gross non-performing assets make up 0.8% of its loan assets. “We will look to build strong retail assets in the home loan segment,” Sudhakar said.
Vijaya Bank, Dena Bank planning of a merger
While higher recapitalization for PSU banks is still in talks, the government is also not dropping ball on an issue like consolidation in the banking space. Vijaya Bank and Dena bank are discussing the synergies and pros and cons related to it. The alliance would be based on geographical outreach of both the banks. The board of both Vijaya bank and Dena bank are looking at each other’s balance sheet and discussing future liabilities. Vijaya Bank reported 57% jump in Q1 profits to 255 crore rupees while Dena bank narrowed losses to 133 crore rupees and rose to 17.37% as of June 2017. Dean bank is currently looking at improving profitability. Thus, capital requirement post-merger will increase in light of Dena Bank’s high NPA. If blessed by the govt, merger could be completed by end of this fiscal
Bajaj Finserv slashes interest rates for personal loan to 11.99 pct
India’s most diversified financial services company, Bajaj Finserv has decided to reduce the interest rates on the personal loan. They will offer this special interest rates on a loan value of Rs 12 lakh and above. Loan amount ranging from Rs 8 lakhs to Rs 11.99 lakhs can be availed at 13.49 percent interest rate while loans between Rs. 5 lakh and Rs. 7.99 lakhs can be availed at an interest rate of 13.99 percent. The limited offer is valid only till September 25, 2017. In this limited period, the NBFC will also fastest approval and same day disbursal to its existing as well as new customers.
Government is going all out to boost BharatQR and BHIM usage
The government is planning to expand the use of two mobile payment applications BharatQR and BHIM to achieve its target of 25 billion transactions by March 2018. In order to promote cashless transactions, the government is looking for ways to make digital payments cheaper than cash. “We plan to create BHIM as the best-in-class payment application and also promote BharatQR for all forms of payments at merchant locations,” said Ajay Kumar, additional secretary, the ministry of electronics and information technology. The government is also planning to make BharatQR available even to the merchants who don’t have a current account. All major banks are working to be technologically equipped so that they can roll out BharatQR based payments on a larger scale. Banks are also working to install 20 lakhs Aadhaar Pay enabled PoS terminals to promote digital payments.
Indian Bank raises Rs 2000 crore to finance infrastructure and affordable housing
Public sector lender Indian Bank today announced that it has raised Rs 2,000 crore to finance infrastructure and affordable home loans. The amount raised through the issuance of long-term bonds is part of the bank's Rs 5,000 crore fundraiser plan to support infrastructure and affordable housing in the country. On 21st September 2017, “The board of directors has given approval for proceeding of 7 years long term bond amounting to Rs 2,000 crore in tranches out of the Rs 5,000 crore”, It is said in a regulatory report. At an earlier time of May this year, Indian Bank had informed about board's approval to raise Rs 5,000 crore for the proposed plan. Providing affordable housing is one of the ambitious projects of the government, 'Housing for All by 2022'. Boosting infrastructure is another key area that has been granted key priority, Indian Bank had expressed. The stock of the bank on Thursday closed 1.16 percent lower at Rs 281.15 respectively on Bombay Stock Exchange (BSE).
SBI Card to offer pre-approved cards to SBI customers
SBI Card, the second leading credit card selling company after HDFC Bank, is all set to offer pre-approved cards to SBI customers. SBI card is also aggressively aiming to double its cad base in the next couple of the years. SBI card is a joint venture between the SBI and GE capital, which is set to exit as a part of the American Giant global business group revamp. The card issuer is also in discussion with a couple of banks to explore the co-branding chances. It has co-branded with 7 banks including an Oriental bank of commerce, Bank of Maharashtra, and private sector south Indian banks as well as with Indian railway ticketing portal IRCTC. "We source about 12-15% of our customers through co-branding," SBI card CEO Vijay Jasuja said. "All the necessary approvals for the deal should be in place by the end of October," he added. If SBI gets the permission, it will hold 74% in both the marketing and processing entities with the stability of 26% will be held by the Carlyle Group. There are also plans to merge these two entities later.
1,000 branches have opened Aadhaar updation and enrolment centres in their premises
The UIDAI has said today that over 1,000 bank branches of nearly 42 public and private sector banks have opened Aadhaar enrolment and update centres within their premises. The Aadhaar opening body also said that it has received a commitment for the opening of centres in 15,000 branches. "Bank Aadhaar Kendras are being established with a view to making the Aadhaar verification process of bank accounts convenient for the people as it has become mandatory under amended Prevention of Money Laundering Rules to verify bank accounts with Aadhaar by December 31, 2017," Ajay Bhushan Pandey, CEO of UIDAI said. The UIDAI in July has asked public as well as private banks to open Aadhaar enrolment facility and the initial deadline so was in August end. "The enrollment and updation facilities are now being made available on the premises of branches of all scheduled and commercial Banks as UIDAI has directed them to open these Bank Aadhaar Kendras by September 30, 2017, for the convenience of the people," said the UIDAI.
Banks expected to reject Essar Steel's demand for working cap loans
Banks are expecting to reject bankruptcy-facing Essar Steel demand for Rs 1,000 crore of working capital loans as the lenders are reliving the other economy restrictions they charged on the company to safeguard their interests, said two people familiar with the developments. Banks have decided to do away with the so-called Rs tagging' of Essar Steel's account which has resulted in a restricted flow of funds to the company from its businesses, said by an unknown person. The move, though its losses of fresh loans to the struggling steelmaker, it could release as much Rs 3,120 crore of additional fund annually which may be sufficient to keep the plants running as the company works its way out of the bankruptcy. According to the lenders, as per the new recovery law, the Bankruptcy Code, banks are not allowed to mark an account. This is one of the reasons why banks are unwilling to give additional loan even as the RBI has allowed banks to classify the fresh loan as standard assets, said a bank official. Lenders will soon meet Satish Gupta, who represents consulting firm Alvarez and Marsal to convey this and also discuss debt recast plan. Professional has invited claims from creditors and has also given order for valuation of the company. Essar Steel is among 12 large companies that the Reserve Bank of India directed banks to refer to the National Company Law Tribunal for resolution.
SBI Card targets to double credit card customers in next 2 years
SBI Card, the joint project between State Bank of India and GE Capital, is looking to double its credit card purchase and improve its market share in the next two years. According to Vijay Jasuja, Chief Executive Officer, SBI Card, the company has worked out a strategy for doubling its credit card customers on an incremental basis month-on-month, by tapping the bank’s own customer base. The company’s card sales increased 26% year-on-year to 45.6 lakh as on March 31. The company is looking to grow its card sales 25-30% this economy. "We have entered into a triple agreement with SBI and CIBIL to offer pre-approved cards to eligible customers. "SBI has a 45-50-crore customer base; even if we can get 1% of that, it will make us market leaders in the segment," he added. The share of SBI’s own customers has been gradually increasing from 33% a year ago to 38% at present. The company also launched 'Unnati' card targeted at Jan Dhan account holders with a savings bank balance of 25 thousand. "This is one segment that we are looking at. We expect demand to pick up moving forward," Jasuja said.SBI Card is also giving online offerings on this festival season. It has tied up with Flipkart for its flagship Big Billion Days sale between September 20 and 24 and also providing EMI-based offerings for the purchase of mobile phones. Under the tie-up, the bank will offer up to 10% cashback on all purchases. Apart from that, it is also tying up with offline stores such as Croma and Reliance Fresh and travel portal Yatra.com and looking to partner large jeweler for increasing spending on the card.
On this festive season Bajaj Finserv offers lowest interest rates on home loan and bonus on personal loan
Bajaj Finance Ltd, this festive season will offer the lowest interest rate of 8.35% on a home loan of Rs.75lakhs and above. The company is also going to give a bonus for personal loan applicants with Amazon vouchers ranging between Rs. 1000 to Rs. 5000. Applicants deciding for a home loan amount of Rs. 50lakhs to 74.99lakhs will get benefits of the reduced interest rate of 8.45%. Loan amount of Rs. 50lakhs can be gained at 8.50%. These rates are available for applicants who are choosing for balance transfer and top-up as well. The company will offer these rates between 12th to 18th September 2017.For personal loan seekers, the company has announced gift vouchers for different loan amounts. Loan applicants who wish to take loan amount of Rs. 12lakhs and above will be rewarded with Rs. 5000 Amazon voucher and a loan amount of Rs. 8lakh to 11.99lakh and Rs. 5lakh to 7.99lakh will be rewarded with Rs. 2000 and Rs. 1000 vouchers respectively. Whereas Bajaj Finserv’s home loan application process is transparent and convenient, the applicant can check their eligibility online and calculate their EMI using home loan EMI calculator. It offers doorstep service for collecting customer documents and it also allows least document submission.
NPAs to reach 10.5% by March as banks aware of entire pressure
Ratings today said banks have only recognized two-thirds of their stressed loans as nonperforming resources and estimated the bad loan ratio to increase by 1% point to 10.5% by March 2018. The 9.5% NPA form for March 2017 includes only two-thirds of the overall stressed resources, it said. The agency said it estimates the total amount of stressed loans, which includes NPAs and standard resources that are under pressure currently and could depreciate into NPAs, to be at Rs 11.5 trillion or 14% of the system. "Gross NPAs will be 10.5% of progress by March 2018, up from 9.5% in March 2017," it said adding that infrastructure, power, engineering, and construction sectors contribute the bulk of the stressed assets. Faster resolution of stressed accounts through the economic failure and Bankruptcy Code and various structuring schemes is critical to improving the benefits of banks, the agency added. "With the majority of stressed assets now recognized as NPAs, rest of the corporate loan portfolio of banks can be expected to perform better over the medium-term," Crisil president Gurpreet Chhatwal said. He said there will be the quality drop in loans to small businesses and farmers, which are affected due to the introduction of the goods and services tax and demonetization, and debt rejection, correspondingly. "In the past couple of years, recoveries have been poor and the bulk of the reduction in gross NPAs has been because of higher write-offs," senior director Krishnan Sitaraman said. He answerable slow growth continued stress in some sectors and slow place of resolution proceedings as the factors hampering the recovery efforts.
NPA resolution: Bank unions doubtful of bankruptcy process
Bank unions today declared the bankruptcy process started by different lenders for NPA resolution will not help in bringing the money back. The bankruptcy process is not going to produced desired results in terms of NPA resolution as recovery is expected to be very low, All India Bank Employees Association (AIBEA) General Secretary C H Vekatchalam said. RBI just identified 12 accounts with non-performing assets (NPAs) of about Rs 2.5lakh crore and asked various banks to initiate bankruptcy process against these firms. He added that United Forum of Bank Unions (UFBU) will hold a protest march here tomorrow against various government policies, including privatization of PSU banks. Effective measures are to be taken to recover the huge bad loans and banks should not be consolidated, amalgamated or merged, said All India Bank Officers Confederation (AIBOC) Joint General Secretary Ravinder Gupta. The protest march will begin from Ram Leela Maidan and end at Sansad Marg police station, he added. "Poor people, students, and farmers are being harassed for non-repayment of loans but big corporates are enjoying all concessions. This is anti-people," he said.
Housing loans emergency: Home loan growth expected to be lower in 16-18 % range in FY17
Housing loans had been one of the major operators to push the retail portfolio of most banks, who are still trying to push home loans among retail customers. The depressing part is that yet there are not too many takers for home loans. As per the latest data released by the Reserve Bank of India (RBI), the growth rate of home loans looks to be going down. For the quarter 21 July 2017, the home loan growth rate was 0.4% compared to 4.7% during the same period last year. The low growth rate also means that there is still time before the real estate sector will see better days. The Pradhan Mantri Awas Yojana (PMAY) is gradually making the improvement. Until now, over 26 lakh houses have been sanctioned with an investment of Rs 1.40 lakh crore. The states of Andhra Pradesh, Tamil Nadu and Madhya Pradesh are placed to first, second and third, respectively under PMAY. On the infrastructure side, Pune city is going to become India 'first Smart City. Pune has covered six modules of the said project. The modules deal with the area like traffic management, feedback from citizens, emergency alert systems, hi-tech command and control center, Surveillance of the city through CCTV, water and electricity supply and death & birth registration. Apart from Pune, other cities like Nagpur, Kakinada, Naya Nagpur and Bhopal are expecting these changes too.
50% of women choose to deposit their money in formal banks: Survey says
As per current situation, occupation is the single largest element of how frequently household use bank accounts or have zero-balance accounts. "Women are the important mediator of change when it comes to engaging with formal banking channels. Nearly 48 per cent of women preferred depositing money in formal banks and 72 per cent in rural banking institutions compared to men who preferred to keep their money at home," according to the survey titled 'Decoding bank account usage by low-income segments Placing reality in digital ecosystem'. It was released today by Grameen Foundation India, J P Morgan and the Institute of Rural Management Anand (IRMA). When women access financial services, investments in child education and health move to rise; households save more and handle better during times of trouble, said J P Morgan head (global philanthropy), Maneesha Chadha. "This was especially true in rural areas, where 57 per cent of women mentioned that they are in search of updates outside usual banking transactions such as withdrawals and deposits, but only 40 per cent of men did so." The conclusion showed about those unemployed and individuals self-employed in agricultural labour were three times as likely to select for a regular savings account. In general, more than two-thirds of the primary earners of village households have a bank account. But their product choices sometimes act against completing their economic needs, the survey said. It said digital financial services have the capability to overcome some of the biggest obstacles to financial involvement, including limited financial knowledge, transaction charges and access to financial services.
Reserve Bank involvement required on SBI rules for account holders
The employee's group of the Reserve Bank of India (RBI) required the central bank's involvement in some decisions taken by the State Bank of India about their account holders. "We are being constrained to draw your kind attention to certain recent business decisions of the country's largest bank SBI like withdraw cash only three times a month free of charge and fine failure to maintain balance," All India Reserve Bank Employees Association general secretary Samir Ghosh said in a letter to Governor Urjit Patel. "We urge that Section 35A of Banking Regulation Act, 1949 to empower Reserve Bank to give directions "to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors," he mentioned in the letter. As per the reports, SBI in the Q1 phase (April-June) has earned Rs 235 crore from such fines. The employee's group highlighted the lack of interest of the small depositors in their letter. For accounts held in metro branches, the balance required is Rs 5,000, if the amount falls below Rs 3,750 a fine of Rs 100 plus service tax is compulsory. The charges and minimum account balance change across metro, urban, semi-urban and rural areas. SBI has a network of about 24,000 branches (post merger with SBI associates) and more than 40 crore customers of which there are 31 crore savings accounts
Indian banks to face $65 bn capital shortage by FY19, says Fitch
Indian Banks will need about USD 65 billion in additional capital, lower than estimated earlier, to meet the Basel III capital sufficiency rule by March 2019 and push loan growth, Fitch Ratings said today. Weak capital positions have a major negative effect on the bank's capability ratings which will come under more pressure if the problem is not addressed, it added. State-owned banks which account for 95 percent of the estimated shortage have limited options to increase the capital they still require, it said."Prospects for internal capital generation are weak and low investor confidence impedes access to the equity capital market," Fitch said, adding that they are likely to be dependent on the state to meet core capital requirements. The government is committed to investing only another USD 3 billion in fresh justice for 21 public sector banks (PSBs) over the current and the next financial, having already provided most of the originally budgeted USD 11 billion."Fitch believes the government will have to pump in more than double, even on a bare minimum basis, if it is to raise loan growth, address weak provision cover, and aid in effective NPL resolution," it said. The gross non-performing loan (NPL) ratio reached 9.7 percent in 2016-17, up from 7.8 percent in 2015-16.Additionally, "State banks are unlikely to be freed from their current gridlock unless NPL resolution is accompanied by additional capital," Fitch said.
White Label ATM hopes for better days after talks to RBI for next evolution
The white-label ATM (WLA) industry is betting on the latest central bank guidelines to end a period of extended status brought about by the pricing of transactions and supply of cash. In its annual report published last week, the Reserve Bank of India (RBI) spoke that it would systematically review the WLA plan, mainly the deployment goals. Operators of the machines have not even reached the goals set for them, with only 14,000 ATMs running at present. The central bank is likely to investigate the reasons behind the slow speed of ATM deployment. "If they are talking about deployment goals not being met, it would help if they found out the reasons behind the slow speed of the industry. One of the major reasons is the low interchange fees for ATM transactions," said Sanjeev Patel, chief executive officer of Tata Communications Payment System that runs the Indicash brand of terminals. The WLA industry was considered to allow non-banking groups to deploy ATMs in rural areas to help achieve financial involvement. While eight groups were licensed to operate as WLAs, industry executives say they paused majorly after interchange fees for financial transactions were reduced to Rs 15 from Rs 18. The interchange fee is the amount paid by the bank whose card is being used at the ATM operator. "Cash availability is still a major problem for us, especially in rural areas where most of our terminals are deployed," said Antony, managing director of Hitachi. While the RBI had allowed these groups to source cash from retail outlets and not depends entirely on banks in the coming decision, business is still to recover for the WLA industry.
Here you can get the debit cards with Feluda Illustrations
Here's your chance to shop with Feluda, Feluda is a fictional detective character created by the well known Indian film director and writer Satyajit Ray. Feluda was very popular in Bengali children's magazine, He is the icon of youth and intelligence in Bengal. United Bank of India (UBI), the Kolkata-based state lender, has taken permission from Sandip Ray, son of the talented Satyajit Ray and a film director himself, to provide eight Feluda illustrations for its new debit card offering. The Kolkata-based state lender has just disclosed the card with the option to design it with a photograph of customer's choice or with illustrations from the preloaded gallery. The illustrations are a fraction of the series of Bengali novels and short stories on of the fictional detective character Feluda. The bank said the card is the first ever such customised card built on India's original payment brand, RuPay. It will also help in reducing the possibility of frauds, the bank added.
SBI Launches Unnati Credit Card at no cost
It was reported that the government owned corporation State Bank of India (SBI), has introduced a new credit card-Unnati Credit Card. SBI has stated that Unnati Credit Card will be free and no annual fees will be charged from its customers for first four years. It will also offer rewards point only on purchase made through the SBI and many milestone rewards like Rs.500 cash back will be offered to the SBI’s Unnati credit card holder on spends of Rs. 50,000 or more in a year. SBI’s Unnati credit card is a secured credit card. It will be issued with a security on cardholder’s fixed deposit. The State Bank of India has announced that the amount of fixed deposit with has been fixed to a minimum of Rs 25,000.The SBI also tweeted on Twitter that "Everyone can now avail of a free credit card! Presenting 'Unnati' from SBI". It was reported that 1 reward point will be added to the consumer’s account on per Rs. 100 spent on the credit card. Additionally, The SBI Unnati credit card holder will be able to transfer the reward points against a wide array of gifts mentioned in the reward record.
IndusInd Bank in talk with Bharat Financial to follow mergers
Private sector lender IndusInd Bank and India’s second largest Microfinance Company Bharat Financial, formerly known as SKS Microfinance Limited have signed a confidentiality agreement for the planned merger between them. The Hinduja Group controlled bank has informed the exchanges about an exclusivity agreement with the micro lender to explore merger or expansion plans by the end of September. The deal between the two companies may decide after the due activity, authoritative documentation and their shareholders, regulatory, National Company Law Tribunal (NCLT) and other third-party approvals, as applicable. IndusInd Bank has a market value of about $16 billion while Bharat Financial is valued at more than $2 billion as well as shares of both the companies increased 1-2% in early Monday trades as investors expecting the deal to happen soon . Experts close to the deal said Bharat Financial will be run as a branch of IndusInd Bank for a year and then it may be merged with the bank.
Aadhaar Pay: Lenders doubt mechanism’s affect in big cities, alert of privacy debate
A payment system where customers put their finger impression on a device to shop and withdraw cash instead of swiping credit or debit cards. Last week, senior officials of the leading banks met in Mumbai to discuss the problems and effectiveness of the Aadhaar-enabled payment mechanism.The questions that arise are-Would city consumers, who have multiple payment options like cards and wallets, share their biometric data to shop? Does it make any sense to invest huge amount of money to upgrade and secure millions of point of sale (PoS) devices with scanners that capture fingerprint? Other key questions are- Isn’t Aadhaar better suited for rural markets? Will merchants drive Aadhaar based payment instead of credit cards that has a tendency to push up sales? The lenders also wonder whether the merchants will make Aadhaar-based payment instead of credit cards that tend to push up sales. Bankers know they cannot ignore the government order, but they accept that the industry is in no position to meet the November 30 deadline to install Aadhaar-driven PoS machines. Under the circumstances, Indian Banks Association will explain its views to Reserve Bank of India, although most fear that the regulator may be unwilling to take a position due to the political allegations of the Aadhaar debate. Critics of Aadhaar, who are opposing to link it with mobile numbers and bank accounts, are hoping that some of these rules may change after the order of Supreme Court. Bankers, still, has a fear with an ordinary question-Does it make business sense?"
PNB customers to pay charges after 5 free ATM transactions from October
"The number of free transactions and the charges beyond these free transactions for PNB customers on PNB ATMs has been changed. The modified charges will be effective from October 1, 2017," PNB said in a notice to customers. The bank said savings fund/current/overdraft account holders would all charges at Rs 10 per transaction beyond a limit of five times a month even if the PNB card holder makes the transaction at PNB ATM only. Therefore, customers will be charged beyond free limits for doing a financial transaction like cash withdrawal and non-financial transaction for the issue of mini-statement. But, PNB said there will not be any charge for other non-financial transactions like balance enquiry, fund transfer or green pin request where a secret pin code is sent on a mobile phone to make money transactions like for an online purchase, money transfer via phone and so on. While for other bank ATM transactions, banks were allowed to reduce the number of free transactions from five to three a month in six metro cities- Delhi, Mumbai, Chennai, Kolkata, Bengaluru, and Hyderabad. For own bank ATM transactions, RBI had advised banks to give at least five free transactions (financial and non- financial) a month on savings accounts at all locations."Beyond this, banks may put in place appropriate Board approved policy relating to charges for customers for use of own bank ATMs," RBI had said. Apart from that country's largest lender SBI charges from Rs 5-20 while private lender Yes Bank gives ATM transaction free to its customers for any number of transactions in a month and ICICI bank charges Rs 20 per financial transaction and Rs 8.50 per non- financial transaction beyond the free transactions in a month.
PNB, BSNL collaborate for mobile wallet Speedpay rollout
Punjab National Bank and state-run firm BSNL has teamed up to roll out an open mobile wallet Speedpay across 10 states in the country. PNB’s speed way will operate like any other mobile wallet. It can be used for paying bills as well as to deposit and withdraw money from retail outlets. "India is now second largest market in the world with 120 crore mobile users. Congratulating BSNL, Punjab National Bank and the technology partners in helping India moving towards less cash economy," Telecom minister Manoj Sinha said at an event to mark the agreement signing ceremony between BSNL and PNB. "The reach of SpeedPay service under this partnership will increase to northern and eastern states. SpeedPay is also an ideal medium for government's direct benefit transfer programme, to ensure quick and direct payment of subsidies to the citizens," BSNL Chairman and Managing Director Anupam Shrivastava said.
United Bank of India waives off retail loan processing fees up to 100 per cent
Banks are going all out to utilize the festive seasons why providing their customers with exciting offers. Following the footsteps of the market leader, State-run lender United Bank of India has too decided to waive processing fees for home loans, car loans and two-wheeler loans to woo customers. The home loan market is considered to be the driver of retail loan growth when they don’t get corporate and large project loans. UBI's home loans are available at 8.55 per cent rate irrespective of loan size and tenure, a senior official said. The bank will also be offering 50% waiver on a processing fees mortgage loan, personal loan and gold loan and will be available till the month of December.
HDFC Bank’s EVA becomes India's largest banking Chatbot
India’s first AI-based banking chatbot, EVA, built for HDFC Bank by Senseforth AI Research Pvt Ltd has successfully addressed over 2.7 million customer queries in just six months. With this EVA has officially become India’s largest banking chatbot. In March 2017, HDFC joined hands with senseforth and launched EVA. Since then EVA has addressed over 2.7 million queries while interacting with 530,000 unique users. EVA, which stands for Electronic Virtual Assistant, is a chatbot built using the latest NLP and AI technologies. Eva currently handles 50,000 plus semantic variations for thousands of banking related intents. Eva tracks and analyses everyday customer issues and gains a deeper understanding of their behavior patterns.” said Mr. Shridhar Marri, CEO, and Co-Founder, Senseforth. “Eva’s everyday interactions with users go through a conceptual banking knowledge framework which in turn enhances her ability to field more questions accurately. Eva never sleeps and her learning never stops!” Shridhar added. EVA is faster than all other modes of interaction as it provides information in a matter of seconds which usually takes an average of 8-10 minutes. With an accuracy level of over 85% and uptime of 99.9%, EVA is making purposeful strides towards her goal of revolutionizing the customer interactions through conversational interfaces.
RBI sends 2nd list of large NPAs for resolution, backed IBC
RBI is going to send a new list of stressed accounts to banks for resolution. Confirming this, the Deputy Governor Viral Acharya said the insolvency code has changed "rules of the game" and asked lenders to use it "extensively" for resolving the stress. "The Reserve Bank has now advised banks to resolve some of the other accounts by December 2017; if banks fail to put in place a viable resolution plan within the timelines, these cases also will be referred for resolution under the Insolvency and Bankruptcy Code (IBC)," he said. However, he did not disclose the number of accounts. According to a media report, RBI has handed over a list of 40 accounts including 12 large accounts marked for resolution. "The IAC recommended that the Reserve Bank should initially focus on stressed assets which are large, material and aged, in that they have eluded a viable resolution plan despite being classified as NPAs for a significant amount of time," said Acharya. Acharya said the banks will have to set aside more money as provisions for cases referred under IBC but said the pain is necessary to improve the provision coverage ratios and protect them against losses.
SBI to bet the ranch to capitalise on reviving home loan demand
As the country’s biggest lender is battling the lack of any major project lending plans, it is now planning to capitalize on the reviving demand for home loans and is piling on the festive season to drive its mortgage business which is already accelerating. To increase its market share, SBI has waived off processing fees for all home loans and will deploy 7,500 specialized ‘feet on street’ to market its home loans. We expect that in this festive season our volumes will increase substantially, we have already brought down our interest rate which is the lowest in the industry and now we have also waived the processing fee,” said Vaijinath MG, chief general manager, State Bank of India. “We have an exclusive offer for loans up to `30 lakh where the interest rate is 8.35%. We are also offering top-up loans where rates are comparable to our home loan interest rate and we have waived processing fee on that as well.” SBI has also launched a new scheme campaign ‘Hamara Ghar’ which offers a fixed rate of interest for two years up to a loan amount of 30 lakh. The bank posted a growth of 13.92% in its home loan book at the end of June 2017.
Funds given by banks can’t have lesser priority: IDBI
IDBI Bank has filed an application with the Supreme Court on Thursday claiming that the funds that banks and other financial creditors provide to developer Jaypee Infratech are also public money and cannot be considered any less than those provided by other creditors. A three-member bench headed by Chief Justice of India Dipak Misra asked IDBI Bank to file an application and scheduled the next hearing on the matter for September 11. The application was a follow up to IDBI Bank urging the apex court on to lift a stay on insolvency resolution proceedings against the builder. “Homebuyers may have had a grievance if they were not considered as a stakeholder by the IRP (interim resolution professional) or if the resolution plan does not protect the legitimate rights of the home buyers,” bank said in the application. Jaypee had defaulted on a Rs 526-crore loan from the bank.
Bank of India slashes lending rates by 0.05-0.10%
Bank of India has cut MCLR rates by 0.05-0.10 per cent. The new rates will come will be effective from September 10. "Bank of India has reduced its marginal cost based lending rates (MCLRs). The revised marginal cost based lending rate for one-year now stands at 8.30 per cent," the bank said in a statement. Among others, the overnight and 1-month MCLR have been cut by 0.10 per cent each to 7.90 per cent and 8 per cent, respectively. While loan of 3-month tenor will bear an interest rate of 8.10 per cent, down 0.05 percent from current MCLR. The RBI in its last monetary policy said that that it will review the MCLR method as banks were not passing on the benefit of repo rate reduction to the customer.
RBI decided to relook into their guidelines for white label ATMs
The RBI in its annual report published last week said that it has been decided to review the WLA guidelines comprehensively, particularly from the perspective of WLA deployment targets. “If they are talking about deployment targets not being met, it would help if they found out the reasons behind the slow pace of the industry and one of the major reasons is the low interchange fees for ATM transactions,” said Sanjeev Patel, chief executive officer of Tata Communications Payment System. “There are few major issues which we have highlighted to the central bank time and again, though at present we do not know what the regulator plans to do with the sector, it will be extremely helpful if few of our demands are listened to by RBI,” said Loney Antony, managing director of Hitachi Payment Services. There is also a need to relook into the number of entities that had been licensed by the central bank. The statement by the Reserve Bank in its annual report indicates the amount of seriousness with which they are looking at the sector.
SBI taps own user base to sell credit cards
Country’s largest lender State Bank of India, which saw the fastest growth in its card business post demonetization, is now looking at tapping its own customer base to sell cards. The number of credit transactions of the bank rose by more than four times since demonetization, from 41 lakh transactions in November’16 to 1.7 lakh transactions in July’17, according to RBI data. With a card base of close to 49 lakh, SBI Cards is the second largest issuer of credit cards after HDFC Bank and holds the second place in terms of a number of transactions and value of spends. But unlike its competitors, cards sale to SBI’s own customers’ account to 35% of its total sale. SBI Cards has entered into a tripartite agreement with State Bank of India and CIBIL to offer pre-approved credit cards to eligible SBI customers. “Pre-approved cards will be given to SBI customers based on their risk profile analysis through various risk models we have developed,” said Vijay Jasuja, CEO, SBI Cards.
GST collected Rs 94,000 crore from 44 lakh business for the month of July
As six lakh more businesses have filed returns, the maiden revenue collection from GST went up to Rs 94,000 crore. Finance Minister Arun Jaitley had last week stated that 38.38 lakh businesses had filed their returns and paid Rs 92,283 crore in taxes for the month of July - the first month of implementation of independent India's biggest tax reform, the GST. The collection so far is from 74 percent of the total tax payer. Revenue Secretary Hasmukh Adhia at an event here said 11 lakh businesses have not yet completed registration for the GST. He said 72.5 lakh people have migrated into the GST regime but only 44 lakh have so far filed returns. Earlier this week, the central government has extended the time for business to file returns. The revenue is likely to go up further when all the taxpayers file returns.
UIDAI extends the time limit for banks to set up enrollment centres
The Unique Identification Authority of India (UIDAI) declared on Tuesday that on demand of the banks, it has extended the time limit till September 30, 2017. Public sector and private banks have got a month of extension to establish Aadhaar enrollment centres within their premises. The extension has rolled up with the condition of "financial discouragement for every uncovered branch per month" if the banks don’t meet the criteria of establishing Aadhaar centres in at least 10% of their branches. The CEO of UIDAI, Ajay Bhushan Pandey said that for ensuring compliance with the directives issued by UIDAI on 14th July 2017 and in accordance with the Aadhaar (Enrollment & Update) Regulations 2016, a financial disincentive of Rs 20,000 per uncovered branch shall be levied on the bank for failing to adhere to the target of setting up of enrolment and update centres in 10% of its branches by September 30, 2017. He clarifies that for any noncompliance to the directions, "banks shall be legally responsible for action under Section 42 of the Aadhaar Act, 2016." In simple words, if a bank has 100 branches, and Aadhaar updating centres are not established it at least 10 branches by September, the bank will have to pay a penalty of Rs 20,000 per branch. If the centre was supposed to be set up in at least 10 branches and has been established in only five branches, then the penalty would be Rs 20,000 each for five remaining branches.
IDBI knocks Supreme Court’s door against Jaypee Infratech
The Supreme Court will hear IDBI Bank’s plea against the stay of insolvency proceedings against the real estate firm Jaypee Infratech. A bench comprising Chief Justice Dipak Misra and Justice Amitava Roy and A M Khanwilkar considered the submission of the bank that staying the order of the National Company Law Tribunal (NCLT) in Allahabad had reversed the position and, as a consequence, the company had gone back to defaulting promoters. Senior advocate A M Singhvi, appearing for the bank, said the Jaypee group was in charge of the company again because of yesterday's apex court order. The bank's money is also public money and we are seeking modification of that order, he said. While senior advocate Ajit Sinha, appearing for one of the home buyers opposed the contention of the bank and said home buyers were happy with the order of the court. The top court had yesterday stayed insolvency proceedings against Jaypee Infratech. One of the pleas filed by some home buyers said. The buyers had contended that around Rs 25,000 crore worth of money of flat buyers and others had been at stake and the insolvency proceedings were initiated "for a petty sum of Rs 500 crore". Around 32,000 buyers have booked their homes in 27 different housing projects of Jaypee Infratech and they have been "left in the lurch as the insolvency proceedings have been started against it", the plea said.
DBS Bank gets RBI’s approval to operate wholly-owned subsidiary in India
DBS Bank, Singapore’s largest lender has received in principle approval from Reserve Bank of India (RBI) to start a local banking subsidiary in the country that will allow them to open more branches and expand its market. According to DBS group CEO, Piyush Gupta, the bank is waiting to get a final approval in the next six to nine months which will allow it to expand the present 12 branches to at least 75 branches in the coming years. “We have domestic franchises in China, Taiwan, Hong Kong and Indonesia, so in that sense, a local subsidiary is in the bank’s DNA. Physical points of presence will help us get into new businesses like supply chain financing, SME lending, transaction banking and consumer finance which require points of presence across the country,” Gupta said. Under guidelines released in November 2013, RBI promised to treat foreign banks opening local subsidiaries on an equal footing with local lenders, giving them the freedom to open branches and allowing them to acquire local banks on a later date.
Bajaj Finserv reduces personal loan interest rate to 12.49 per cent
One of India’s biggest NBFCs of India, is offering personal loan at 12.49% for a loan value of Rs. 12 lakhs and above in its festive season offer. Application availing loan amount of Rs. 8 lakhs to Rs. 11.99 lakhs will be offered at an interest rate of 13.49% and a loan amount of Rs. 6 lakhs to 7.99 lakhs at 13.99%. Bajaj Finserv will offer the special interest rates from 5th to 11th September 2017. Bajaj Finserv also offers a Line of Credit for a specific amount, where the amount is assigned the customer is free to withdraw and use any amount of money within the allowed time and will only pay interest on the withdrawn amount.
Conditions apply! If you need mergers: Bank orders to government
The senior members of prominent state-run banks like Punjab National Bank, Canara Bank and Bank of Baroda, which are positioned as purchase banks, have set certain preconditions to purchase smaller banks if they have to fulfill the government's plan of consolidation. Some of the key conditions for taking over the banks are that the target bank is a profit making and the current management is given at least 3 years duration after the merger to ensure that the changes are smooth. In addition, the purchasing banks also demanded capital from the government, even if the target bank is well- capitalized. Two senior bank officials said that these conditions were set down when financial ministry officials had a casual meeting with the top management of large PSU banks to determine their views on consolidation."We have put forward our suggestions which include demand for capital, longer term for management and inability to take over weak banks", said another senior official. He also added that "Government will heed to these terms if they are true to their words that merger should be board driven". In the last week of August, the Government said that the boards of the bank will have initiate mergers while a panel of ministers would be set up to analyze and give in general approval to the consolidation plan. The government is eager on reducing the number of PSU banks from 21 to 15 through consolidation so that they achieve economies of scale. Analysts fear that consolidation will take a break with more than a dozen banks expected to report losses this revenue due to the sudden condition they need to make on loans of companies that are referred to bankruptcy court.
PSBs told to move towards alternative mechanism to fast-track mergers for corporate restructuring
Public Sector Banking is going to approach alternative mechanism of Fast Track Merger once they informed the stock exchanged about these strategies. "This will ensure that all issues related to consolidation from the government, the promoter, and regulator RBI are addressed from the beginning," a senior government official said, adding that the decision about mergers would be only based on commercial considerations. The alternative mechanism will consist of a panel of ministers and it will give hypothetical approvals to proposals for schemes of amalgamation and oversee the complete process. The former banking secretary said that "There will be a pain in a merger in the short term, bigger challenges would be managing the unions, technology, internal processes and managing the manpower but this will bring lots of benefits too." The finance minister, meanwhile, requires a temporary halt on the selection process of heads of state-run banks as it looks to push lenders towards consolidation. They will also review the performance of bank managing directors and inform those who don't perform well to get better or quit.
ATMs will take three months to dispense Rs 200 notes
While RBI might have launched the 200 rupee note a week ago but, it may take up to three months for all the ATMs across the country to start dispensing the new currency. ATMs will have to undergo a huge exercise of recalibration. Some banks have even asked the ATM companies to begin testing the new note for recalibration of the machines. ATM manufacturing companies said that they have not received any directive from the RBI regarding the recalibration of ATMs for the new Rs 200 note. Ravi B Goyal, Chairman, and Managing Director, AGS Transact Technologies Limited, said, "The process of recalibration will begin once we receive the directive from the RBI. The size of the new notes is different from the existing ones and so, once we receive the new notes, we will have to understand its dimensions and accordingly re-configure the ATM cassettes. Next, we will have to check if the supply of notes is good enough to run the cassettes at full capacity." The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon. "The production of these (Rs 200) notes is being ramped up by the currency printing presses and over time, as more notes are printed, it will be distributed across the country through the banking channels and will be available for the public in adequate quantity," the RBI had said in a statement. State bank of India and Punjab national bank has reported receiving the new Rs 200 note. The 200 note is currently being printed only by the presses governed by RBI.
Bajaj Finserv offering assured vouchers for personal loan customers
Bajaj Finserv, one of the diversified and trusted companies in India, is all set to offer prepaid vouchers to its customers, who wish to avail personal loan from 1ST to 4th September 2017. The customers will get an assured voucher worth Rs 14000 on a loan amount of Rs. 12 Lakhs & above. For all the customers who are availing loans between Rs 8 lakhs to Rs, 11 lakhs will be eligible for a gift voucher of Rs 10,000. And for a loan amount of Rs. 6 lakhs to 7.99 lakhs, the applicant will get a voucher of Rs 6000. Bajaj Finserv also offers a Line of Credit for a specific amount, where the amount is assigned the customer is free to withdraw and use any amount of money within the allowed time and will only pay interest on the withdrawn amount.
Fincare Small Finance Bank focusing on 300 branches in a year
Already 26 full-service branches have started and running in states like Gujarat, Tamilnadu, Karnataka and Andhra Pradesh, the new competitor small finance bank (SFB) Fincare is aiming over 300 outlets in next one year. Rajeev Yadav, MD & CEO of Fincare SFB specified that the bank's offering of fixed deposits in the range of 4-9 % depending on duration and savings accounts at 7 %, is one of the top industry. "The public response to our deposit products is extremely encouraging. Our instant account opening process and the digital banking solutions have been a delight for our customers," said Yadav. On the positive side, the bank has been busy in providing micro loans to women groups since 2007. In addition, the bank will focus on growing the secured portfolio, comprising of Loans Against Property (LAP) and Loans Against Gold (LAG). As per the Yadav statement, Fincare aims to grow share of secured loans over the next few years. Moving forward, the bank is expected to have an appearance across 500 outlets by the end of the current financial year. "These would be spread across ten states including Delhi, Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh and Rajasthan. With this network in place, primarily in semi-urban locations, the bank will diversify from being a rural lender to a 'rurban' bank," said Yadav. The bank targeting to be a digitally driven, rural and semi-urban bank, focused on the retail mass and Micro & Small Enterprises (MSE) client sectors.
SBI launches chatbot to assist customers
Country’s largest lender State Bank of India (SBI) has enabled a chatbot on its website to field queries of visitors on bank related products. The chatbot which has been named SBI Intelligent Assistant (SIA), responds to customer inquiries on home loans, education loans, car loans, personal loans, recurring deposits and term deposits. Chatbots are digital robots that can carry on a conversation through audio or text. Mrutyunjay Mahapatra, deputy MD and chief information officer at SBI, said that the decision to introduce a chatbot was taken as it was felt that navigating the website could be a bit of a task for a customer. “Most of the time, customer touch points with the bank are for three things — sales, service, and enquiry,” Mahapatra said, adding, “We found that for enquiry and navigation, a customer has to navigate quite a bit or go to call centres, where the agent may not be fully knowledgeable.” The chatbot was developed by Allincall, a start-up backed by IIT Bombay, and uses machine learning and bot experience to respond to customer queries.
Union Bank, Dena Bank reduce MCLR rates
State-run lenders Union Bank and Dena Bank have reduced its marginal cost of lending rates across various tenors. Union Bank has cut its MCLR by 20 basis points across all tenors. Union Bank has cut its MCLR by 20 basis points across all tenors. The new one-year MCLR has been set at 8.20 per cent as against 8.40 per cent earlier, Union Bank said in a statement. Six-month MCLR has been cut to 8.05 per cent while two and three years lending rates have been reduced to 8.25 per cent and 8.30 per cent, respectively. Along with Union Bank, Dena Bank has also reduced MCLR by 15 basis points across one year, six months, three months and one month. It has fixed its one-year MCLR rate at 8.40 per cent from 8.55 per cent, the bank said. It has also revised downwards its overnight MCLR at 8.20 per cent while the one-month period rate has been fixed at 8.20 per cent. For three months period, MCLR has been fixed at 8.30 per cent.
Canara Bank slashes interest rates on saving bank accounts
Public sector lender Canara Bank has reduced its interest rates on savings account by 50 basis points to 3.5 per cent on deposits of up to Rs 50 lakh. The bank will continue to pay 4 per cent interest on deposit of above Rs 50 lakh. "The bank has decided to revise the rate of interest on savings bank deposits with effect from today," Canara Bank said in a regulatory filing. On July 31, SBI slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below. Other lenders, including private ones such as HDFC and Axis bank, have followed suit. Earlier this month, Axis bank has also reduced interest rates on savings account followed by Bank of Baroda, Bank of India and Karnataka Bank.
RBI has directed resolution of 12 accounts by December: Axis Bank
RBI has asked Axis bank to finalize the resolution plan for 12 accounts by December 13, failing which insolvency proceedings will have to be initiated against them. In a regulatory filing, the private sector lender said it has a total exposure of Rs 2,492 crore in these 12 accounts. “The Reserve Bank of India has issued directions in their communication dated August 28 advising banks to finalise and implement viable resolution plan in select accounts by December 13, 2017, failing which, insolvency proceedings should be initiated in all the accounts mentioned and accordingly mandated provisions should be made by March 31, 2018,” Axis Bank said. However, the bank does not disclose the name of these companies. It said around 75 per cent of the outstanding was secured and the provision held for this outstanding was Rs 862 crore.
RBI chief Urjit Patel says loan waiver is quick-fix, warns of negative impact
Farm loan waivers are just a short term remedy for farmer’s distress and cannot be considered as a long term solution for the problems in Indian agriculture according to a top RBI official. Deputy Governor Viral Acharya said a sustainable and long-term solution for issues in the farm sector in India requires concerted and urgent reforms in the areas of agricultural marketing, pricing, credit and extension systems, and an open trading regime. "Even if loan waiver is accommodated within budgetary provisions, it will force cutbacks in other heads of expenditure. Experience has shown that the most vulnerable category is capital expenditure. In turn, this will entail deterioration in the quality of expenditure and inter alia lead to adverse implications for productivity as an asset forming investment, including for the sector itself - e.g., irrigation works, cold storage chains etc., - is foregone," Patel said. Farm loan waivers returned to the spotlight after the Uttar Pradesh government announced Rs 36,359-crore waiver followed by Tamil Nadu, Maharashtra, and Punjab.
PSB chiefs' selection may be put on hold amid merger push
The Government has put a temporary hold on the selection of chiefs of the state-run banks and may also review the performance of bank managing directors with those who don’t score too well being asked to improve or quit, said a finance ministry official. “It has been clarified that there will be no loss of jobs at any level. If two banks merge, the existing managing director of one of the PSBs (public sector banks) will stand eligible for a similar vacancy in another bank,” the ministry official said. The decision to create the alternate mechanism of a group of ministers rather than the entire cabinet “would facilitate consolidation among the nationalized banks to create strong and competitive banks,” the government had said in a statement. The finance ministry, however, said, “If that bank has no plans to merge, or is not a possible candidate for acquisition, we may appoint an MD and CEO.” “We are also closely watching the performance of the top executives of these lenders and those who fall short on performance will be held accountable,” said the official.
Punjab National Bank to Cut Minimum Lending Rate From September
Punjab National Bank has cut its MCLR rate by up to 0.25% for select maturities will be effective from 1st September. The bank has also slashed its base rate by 0.20%. "The bank has reduced the marginal cost of funds based lending rate (MCLR) by 20-25 basis points with effect from September 1, 2017," PNB said in a regulatory filing. It has trimmed the MCLR by 0.25 per cent each for overnight to 7.75 per cent. It had reduced the MCLR by 0.20 per cent on one-month, three-month and six months maturities to 7.90 per cent, 8 percent, and 8.10 per cent respectively. It has also reduced the MCLR by 0.20 per cent on one-year, three years and five years maturities to 8.15 per cent, 8.30 per cent and 8.45 per cent respectively. After the directive by RBI, banks have adopted MCLR from April 2016. However, some banks still follow the base rate formula to charge interest on several loans.
Grameen Bank model has reached 300 million people worldwide: Mohd Yunus
As per Bangladeshi Nobel Laureate and the founder of Grameen Bank Mohd Yunus, his Grameen Bank model has now reached nearly 300 million borrowers across the world. "After changing lives of over 9 million people in Bangladesh and generating 100,000 dollars in the US, our Grameen Bank experiment has been able to benefit an estimated 300 million borrowers across the world including Brazil", Yunus said. To a question, if people in West Bengal were not ready to take risk taking ventures as entrepreneurs, he said "I don't look at it that way. The mentality to start own ventures is there, everywhere in the world including Bengal. But you have to be with them (the young unemployed)." However, he refused to comment on GST and demonetization issue. "I am not familiar with the situation in India with regard to these two issues," he said.
Consolidation among public sector banks exempted from scrutiny
The central government has exempted the consolidation of public sector banks from the scrutiny of the competition authority. The exemption will cover all cases of reconstitution, transfer of the whole or any part of nationalized banks and will be available for a period of 10 years. The union cabinet had last week given in-principle approval for public sector banks to amalgamate through an alternative mechanism. A panel of ministers will decide on merger proposals. “The decision would facilitate consolidation among the nationalized banks to create strong and competitive banks,” the government had said in a statement. The government is expected to nudge state-run bank to come with merger and consolidation proposals to the alternate mechanism.
Merger of PSU banks still a work in progress
Prime Minister Narendra Modi’s Cabinet has given a go ahead to banks to come up with plans by themselves to consolidate the 21 entities based on the needs of individual banks. As matters stand, the government has said it wouldn't force the hands of banks. The first casualty of any merger is the top management of one of the banks. There's no hard and fast rule on these mergers. But there are broad parameters that banks may take up. "After a decade of banks' public listing, there is a prevailing sense that the purpose of being listed got defeated as most of the banks do not have the ability to raise resources of their own," said former Union Bank of India chairman Debabrata Sarkar. In the Indian context, the outcome of mergers has been bitter. "Consolidation should be done keeping in mind the interest of minority shareholders and bring in greater autonomy for banks," said former RBI governor Duvvuri Subbarao. "The weaker banks are losing market share (and) that is a good thing," RBI governor Urjit Patel had said in a speech. While no one from either the government or the regulator has said how to go about it, investors, analysts, credit rating companies have all thrown their ideas on how to proceed. The ones that have the financial strength, like Canara Bank and Bank of Baroda, should go ahead and buy based on their geographical needs. "You should let certain banks die, you should have the boldness to cut the flab, reduce staff and branches," said former governor Subbarao.
Top 50 defaulters in the dock, RBI readies second list
After sending 12 companies to the National Company Law Tribunal for faster resolution of non-performing assets, the central bank is all set to release its second list with 30-40 names of top defaulters including Videocon Industries, JSPL, Uttam Galva, Visa Steel and Castex Technologies. The second lists of the companies are expected to be in steel, power, infrastructure and commodity sector. The companies that would be listed by RBI soon would owe Rs 3,000 crore to Rs 50,000 crore each to banks and most of the firms have already been listed under SMA1 and SMA2 by various banks. The Banking Regulation (Amendment) Ordinance promulgated on May 4 and later ratified by the Parliament, empowered the RBI to direct banks to initiate insolvency proceedings. The RBI was quick enough and listed 12 top defaulters to be taken to NCLT.
Bank of Baroda customers wrongly debited with NEFT and RTGS fees
Over 8000 customers of public lender Bank of Baroda found current and savings account debited with NEFT and RTGS transaction charges. “Approximately 8300 accounts were also impacted on August 19, 2017, on account of the erroneous debt of service charges that were not due from the customers,” the bank said in a statement on its website dated August 22. “These charges have since been reversed and impacted customers have been duly informed via SMS on August 20, 2017.” The bank is migrating its core banking technology platform to the latest Finacle version 10.x that is aimed to provide enhancement in services to its customers. “Considering the massive scale and magnitude of the up gradation, there have been some glitches in the NEFT/ RTGS and Outward clearing related transactions, which have been addressed by our team on a war footing basis around the clock and have largely been fixed ever since,” the statement said. “Intermittently, there have been challenges such as the speed of the systems, which we are currently addressing; we expect this process to be completed during the course of this week.”
SBI all set for expected surge in demands for affordable housing loan segment
SBI, the country’s largest lender is gearing up for the expected rise in demand for the affordable home loans by deploying additional resources and a quick approval process. “If you go by PMAY (Pradhan Mantri Awas Yojana) eligibility, we feel that more action is expected in smaller cities. In that direction, we are training our people across the country, on explaining the scheme and how the bank can create awareness and tap potential customers,” said Vaijinath M.G., chief general manager real estate and housing business unit. With uncertainty related to the implementation of Real Estate Regulatory Authority (RERA) Act behind it, coupled with the usual festive season demand, the bank is expecting a rise in loan demand mainly from first-time buyers, Vaijinath said. Since the interest rate subvention scheme for middle-income groups under the PMAY housing scheme is valid until 31 December, there is an added incentive for home buyers to seek loans. The affordable segment, or properties priced below Rs 25 lakh, made up around 17% of overall housing sales in the June quarter. According to Vaijinath, the demand from smaller cities is also growing along with the demands from top cities. SBI’s reach across the length and breadth of the country is the key differentiator, and the fact that its book is already aligned to the affordable segment gives it an edge over other lenders. SBI’s average home loan is Rs24 lakh and its customers are mainly salaried. Vaijinath said that for the current fiscal, SBI is targeting around 15% growth in the home loan book in fiscal 2018. At the end of June, the home loan book stood at Rs2.88 trillion with 33% market share. SBI claims to have a home a loan average turnaround time—the period between application and disbursement—of around 11-13 days, a tad better than the industry average of a fortnight.
HSBC India’s investment banking head Sunil Sanghai quits the bank
British lender HSBC India’s vice chairman and investment banking head Sunil Sanghai has quit the banking firm today and joined hands with the Dinesh Kanabar promoted tax and regulatory firm Dhruva advisors to start a division of merchant banking. The veteran i-banker and Dhruva today announced a joint venture which will be offering investment banking solutions, a statement said. Sources said Sanghai, who has been occupying the current position since March 2016 and with HSBC since 2010, quit the bank earlier during the day. An email sent to HSBC India spokesperson for a confirmation was not immediately answered. A spokesperson for Dhruva said the joint venture will commence by the end of next month. Earlier Sanghai has worked with Goldman Sachs’ as a managing director and co-head of investment banking and h as had terms with Morgan Stanley and JM Financial. The statement from Dhruva said Sanghai and Kanabar's experience will be a "key differentiator" for the venture. Dhruva's tax structuring expertise and Sanghai's ability to execute complex mergers and acquisitions make the JV "an extraordinary platform", it added. The statement from Dhruva said Sanghai and Kanabar's experience will be a "key differentiator" for the venture. Dhruva's tax structuring expertise and Sanghai's ability to execute complex mergers and acquisitions make the JV "an extraordinary platform", it added.
GST to have a positive impact on state government finances
Implementation of goods and services tax (GST) will have a positive impact on state governments’ finances in the medium to long term, according to a report by rating firm India Ratings. GST is being criticized for its impact on inflation. Implementation of goods and services tax (GST) will have a positive impact on state governments’ finances in the medium to long term, according to a report by rating firm India Ratings. However, taxes on income, property and capital transactions, petroleum products, state excise, and electricity duty are not part of GST. At an aggregate level, the state taxes that are subsumed in GST accounted for 55% of states’ own tax revenue and grew at 14.0% during FY12-FY17, the report said. The picture at the individual state level differs; eight states namely Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Madhya Pradesh, Odisha, Punjab and Tamil Nadu would need compensation from the central government for any revenue loss. Ind-Ra's calculation shows that the growth of GST component of states’ own tax revenue for all states in such a case would drop to 15.5% in FY18. Like the state VAT which was rolled out from April 2005 to January 2008, implementation of GST will also bring in some efficiency gains. To absorb the positive impact of GST state will have to vigil the buoyancy on taxes outside GST.
PSU banks take recovery action against 5,954 wilful defaulters
All the public sector banks have taken loan recovery action under sarfaesi law against 5,954 wilful defaulters who owe about Rs 70,000 crore to lenders. At the end of March 31, 2017, 21 banks together have taken action against 5,954 wilful defaulters under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, as per data collated by the Finance Ministry. SBI, country’s largest lender has taken action against 1,444 such defaulters. Remaining 20 banks have taken action against 4,510 defaulters. Total outstanding loans due to public sector banks by wilful defaulters amounted to Rs 92,376 crore, according to the finance ministry data. At the same time, there has been close to 10 per cent increase in the number of wilful defaulters on annual basis. A wilful default occurs when a borrower does not honor an obligation despite having the capacity to pay or siphons off funds by disposing of assets without the knowledge of the bank, according to RBI. RBI has allowed banks to name and shame wilful defaulters by publishing their photographs.
Don't waste any more time, Aadhaar-PAN linking deadline unlikely to be extended
The Income tax department is unlikely to extend the date for linking PAN and Aadhaar. Earlier this month, the tax department had extended the deadline till August 31, but cautioned that returns would not be processed until the “linkage of Aadhaar with PAN is done”. The deadline was extended as there were complaints that taxpayers were unable to link the Aadhaar number with PAN because of different names in the two databases. Ajay Bhushan Pandey, CEO of Unique Identification Authority of India, the entity that handles Aadhaar, has been quoted as saying that taxpayers will have to link PAN and Aadhaar by August 31 as the SC ruling is unlikely to have any impact on the process of linking the two databases as of now. The government views the linking of PAN and Aadhaar as an “effective anti-evasion measure“ and is part of its strategy to fight black money.
Government mulling 2 per cent relief on GST for digital payments
The government is looking at giving a 2% incentive over the applicable GST tax rate in case of digital payments where the bill is up to Rs 2,000, in a move aimed at discouraging cash payments. "The idea is to incentivize all kinds of digital payments, especially smaller transactions, in line with the government's plan of making India a less-cash economy," a source said. A recent meeting analyzed digital payment transactions post demonetization last November. It was attended by IT minister Ravi Shankar Prasad and senior officials from other wings of the government. The source said the relief is being mooted for "smaller transactions" as these are large in numbers and are mostly preferred through the cash mode. "There will be new measures that will be announced on this front in the coming time to strengthen the government's resolve on the electronics payment front," the source said. As per the RBI, the number of electronic transactions went up from 67 crores in November last year to a peak of 89 crores in March this year.
Union Bank of India uses in-house app for targeted loan recovery
India’s fifth largest bank Union Bank of India has come up with an in-house app for its loan recovery. The app has launched two weeks ago and will help the recovery team of the bank to nab the defaulters and will also provide the team a better chance of involving directly with the customers and ensuring that the loan does not become a non-performing asset. While the app will help the bank with a targeted focus on recovery of the loan up to Rs 5 crore, a separate difficult assets recovery team (DART) set up will focus on mid-sized loans of Rs 50 crore and above, said Rajkiran Rai G, managing director and CEO of the Bank. The advantage of the app, Rai said is that it offers a built in compromise scheme for the borrower and the recovery team is able to offer the same and go ahead with closure once the payment is done. The bank has also decided to procure 1.50-lakh Aadhaar enabled pay machines and will be deployed across the country.
Government ready to provide capital support for PSU banks' merger
As per official sources, the finance ministry is ready with open arms to provide capital support for facilitating consolidation among state owned banks, which are reeling under bad loans. The Union cabinet has approved the setting up of an alternative mechanism to decide on consolidation proposals for state-run banks. On receiving a proposal from stressed banks, if the ministerial panel finds that the merger is going to create a strong bank, it will not let it go for want of fund shortage, the sources said, adding that acquisition will come at a cost. "If the Alternative Mechanism finds the match viable, the finance ministry could provide capital support to the acquiring bank if there is a shortfall," said a source. Finance Minister Arun Jaitley, after the Cabinet decision last week, had said that the government has not set any target for consolidation. An official source said
RBI to give details of fake notes deposited post demonetisation next week
The Reserve Bank of India's annual report likely to be released next week would throw light on the amount of counterfeit currency notes that have found their way into the banking system. The lingering question is that whether banks have to bear the costs or will it be borne by the RBI, or the government may be in focus as the demonetisation event was forced on the banks by the government. In normal practice, banks bear the cost of counterfeit notes and the RBI even imposes penalty on banks for being lax in detecting them. According to RBI data, total value of counterfeit notes comprising all denomination notes amounted to Rs 30 crore as of end June' 16. "It remains to be seen how it will impact RBI's and banks' balance sheet," said SK Ghosh, group chief economist, SBI. Counterfeit currency detected ends up lowering the amount of currency in circulation. If amount of counterfeit is huge then the government, banks and RBI may have to decide on how to share liability.
State Cooperative Bank launches Credit Card facility for farmers
The Jammu and Kashmir State Cooperative bank has launched RuPay Kisan Credit Cards for its customers on Friday. A high level meeting was held at corporate office of bank which was presided over by Managing Director Muhammad Lateif Dar and was directed to achieve 100% coverage by September 15th. Stressing on the need to propagate cashless –banking products, Lateif held that RuPay Credit Cards are a tool to empower farmers. Farmers will now be able to make farm related purchases directly from dealers in cashless mode which will make the transactions easy and risk free. Lateif directed the concerned officers to hold live demonstrations particularly for illiterate farmers and ensure that they are made fully aware of the technical, financial and operational aspects of the card usage. Pertinently, implementation of RuPay KCC has been major initiative pushed by government under the supervision of NABARD and is part of the plan to double farmers` income by 2020
AIBOC opposes govt's decision to set up alternative mechanism
Bank officers' union AIBOC has condemned the government move to setup ministerial panel to expedite consolidation among public sector banks. "We have time and again criticised forced mergers and we will continue to protest such ill conceived plans of merger of PSBs by government, Niti Aayog and RBI which can wreck havoc on India's financial mainstay," All India Bank Officers Confederation (AIBOC) said in a statement. Citing example of SBI, AIBOC General Secretary D T Franco said when the bank declared its results on May 19, analysts discovered, to their horror, that the path to global greatness lay through a minefield of subsidiaries' losses, estimated at Rs 5,792 crore in the quarter ended March 2017 and Rs 10,243 crore for the full year. "We can well understand the fact that the merger of public sector banks is a part of the government's broader plan to privatise the public enterprises to attract foreign investment," Franco said. Yesterday, the Union Cabinet decided to set up an Alternative Mechanism to fast track consolidation among PSBs to create strong lenders.
Bank of India slashes interest to 3.5% for deposits up to Rs 50 lakh
Public lender Bank of India has reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent on deposits of up to Rs 50 lakh. "The bank is introducing two tier saving bank rate with effect from today," Bank of India said in a regulatory filing today. However the bank will continue to pay percent interest on deposits above 50 lakh. "The bank is introducing two tier saving bank rate with effect from 24th August," Bank of India said in a regulatory filing. On July 31, SBI slashed interest rate on savings account deposits by 50 basis points to 3.5 per cent on balance of Rs 1 crore and below. Other lenders, including private ones such as HDFC bank and Axis bank, have followed suit. Earlier this month, Axis Bank had reduced interest rate on savings bank accounts by 50 basis points to 3.5 per cent for deposits up to Rs 50 lakh. Another PSU lender, Bank of Baroda had slashed the rate to 3.5 per cent on deposits of up to Rs 50 lakh. Karnataka Bank too has tweaked the rate on savings bank accounts.
Cabinet has given a green flag to merge some state-run banks
The central government has finally decided to set up an Alternate Mechanism to oversee the proposals for consolidation of public sector banks with a vision of creating fewer but stronger lenders. The Alternative Mechanism will be decided by Prime Minister Narendra Modi, Finance Minister Arun Jaitley said after the Union Cabinet meeting. The Cabinet gave in-principle nod to the constitution of the mechanism which will clear proposals of banks for mergers and amalgamation, he said. The government aims to create strong and competitive banks in public sector space to meet the credit needs of the growing economy, absorb shocks and have the capacity to raise resources without depending on the state exchequer, he said. He further added that the decision would be solely based on commercial considerations. After the in-principle approval, the final scheme will be notified by the central government in consultation with the Reserve Bank.
GST could increase cost benefits by 5% in 3 years: Retailers
According to the Retailers Association of India (RAI), the implementation of GST could possibly increase overall benefits for retailers by up to 5 per cent over the next three years. "GST could increase the overall cost benefit of retailers by up to 5 per cent over three years," Kumar Rajagopalan, chief executive officer of RAI, said. "The single window tax will increase the ability to grow sales. Besides, any item can be shipped to any part of the country without the cascading impact of tax. This will in turn ensure availability of items to customers," he explained. Transition to GST for us has been good. We have held workshops to create awareness among suppliers and manufacturers. We didn't have any disturbances with our business continuity," S Kannan, chief financial officer of Arvind Lifestyle Brands, said. Retailers can avail of input credits with the effective GST tax rate that factors in all benefits. There is up to 25 per cent increase in logistics and delivery lead time. Retailers also expressed their concerns on the factors like transition period of six months to offload stocks. According to them the period may not be enough for some sectors like jewellery and furniture.
Indian microfinance loans grew 26% in first Quarter
The business of Indian Non-Banking Finance Companies-Microfinance Institutions (NBFCs-MFIs) has generated 26 per cent growth during the first quarter of the current fiscal year as per a latest industry report. NBFCs-MFIs have registered 26 per cent growth year-on-year in the first quarter (Q1) of financial year (FY) 2017-18," the Microfinance Institutions Network (MFIN) -- the self-regulatory body of the Reserve Bank-regulated NBFCs-MFIs -- said in a statement here on Tuesday, releasing its latest Micrometer report on the industry. The report also said that there has been a decline of debt funding by 20 per cent year-on-year. "The increase in loan amount disbursed registered 21 per cent growth year-on-year," MFIN Chief Executive Ratna Vishwanathan said. However, the report stated that due to delay in repayments after the demonetisation of high-value currency, there was a sudden deterioration in portfolio quality. NBFC-MFIs witnessed a growth of 19 per cent in number of clients, which stands at 2.08 crore towards the end of the first quarter of this fiscal, MFIN said. Over half the total disbursements during the quarter in question came from five states namely Karnataka, Bihar, Maharashtra, Odisha and West Bengal, it added.
Banking operations hit by state-run banks staff strike
Banking services were hit across the country as 10 lakh employees of private sector banks went to protest against the government’s proposed move of consolidation, among other issues. Since several branches were closed, cash transactions could not be carried out and government’s treasury transactions too were hit due to this protest. Foreign exchange transactions and import and export bill transactions were also affected. Several banks had already informed customers that functioning of branches and offices might take a hit due to the strike. The strike was called by unions under the aegis of the United Forum of Bank Unions (UFBU). Among the 17-point charter of demands, the main demands are relating to the government’s denial of adequate capital to public sector banks, thus creating conditions for privatisation,” said CH Venkatachalam, chief of the All India Bank Employees’ Association. However, services at private sector banks were not affected.
Government gets Rs 42,000 crore tax so far in first filing under GST
The Central government has received Rs. 42, 000 crore as taxes so far in the first monthly filing under the new Goods and Services Tax (GST) and the revenues are expected to swell further as the filing cycle closes this later this week. A senior official said that about Rs 15,000 crore has come in as Integrated-GST, which is levied on inter-state movement of goods, and another Rs 5,000 crore by way of cess on demerit goods like cars and tobacco. The remaining Rs 22,000 crore has come in as Central-GST and State-GST. Under the GST business are expected to file the monthly tax return. GST unifies more than a dozen central and state levies including excise duty, service tax and VAT, and the revenue generated is to be split equally between the Centre and states. In July last year, Rs 31,782 crore of excise duty was collected and Rs 19,600 crore of service tax. A total of 60 lakh businesses are expected to file returns and pay taxes for July, the official added. The collections from customs duty and IGST from imports post-implementation of GST have almost doubled to Rs 30,000 crore in July.
Ahead of festive season, these banks provide great offers on home, car, and gold loans
With Ganesh Chaturthi arriving soon, it is going to be a good time for the borrowers as several banks has announced various deals as part of their festive season bonanza. For home loan borrowers it’s time to rejoice as Private lender banks like Axis Bank is offering a waiver of 12 EMIs on home loans up to Rs 30 lakh under its Shubh Aarambh Home Loans. However, this offer is only valid for first-time borrowers and even one single missed EMI can disqualify you from this offer. After disappointing its customers by reducing saving interest rate, the State Bank of India (SBI) is all set to impress its customers by waiving off 100% processing fee on car loans. The offer is valid till December 31, 2017. Punjab National Bank too has waived off its processing fee and documentation charges on its car loans till September-end. Similarly, State Bank of India (SBI) has also waived 50 percent of the processing fee on personal gold loans. Personal loan borrowers can also gain benefit in this season as SBI has waived processing fee on its Xpress Credit - a personal loan by it till 30 September, 2017. Similarly, ICICI Bank has come out with instant credit cards through which customers who can shop online immediately.
Bank of India is also considering reduction in SB rate
Bank of India is considering reducing the savings bank account rates and also the interest rates on deposits following the footsteps of SBI. "A cut on both the SB rate and interest on deposits are on the cards. Savings Bank account rate cut may not happen immediately but it is under consideration," BOI Executive Director R S Sankaranarayanan, told reporters here. With Rs 88 crore profits in the first quarter of this fiscal, the Bank expected to do good business this year, he said. Stating that BOI would lay focus on the retail, rural, housing and SME sectors, the official said that thrust would also be laid on recovering and controlling slippages. Shankaranarayanan said the bank's one year MCLR (Marginal Cost of funds-based Lending Rate) was 8.40 per cent and it had effected 135 BPs (Basis Point) recently.
Banks to pay 3% IGST on gold imports
The central government will now be imposing 3 per cent tax under the GST on Banks importing gold and precious metals. The Central Board of Excise and Customs on issues related to GST on gems and jewellery through Frequently Asked Questions (FAQs) said banks did not pay any VAT on import of precious metals previously. They only paid customs duty. It also said banks would be liable to pay IGST on such imports and not any overseas supplier in which ownership is vested during movement of gold or silver. "Ownership is not material for determining whether an import has taken place. Banks, being registered entities, would be liable to pay IGST on such imports but not the overseas entities since they are not affecting the import," the FAQ said. The CBEC also clarified on levy of GST where the total value of a gold ornament is Rs 30,000, including Rs 2,000 as making charge saying, "GST is payable at the rate of 3 per cent of the total transaction value of jewellery, whether the making charge is shown separately or not".
Dena Bank reduces savings rate by 0.5% on deposits up to Rs 25 lakh
Public sector bank Dena Bank today has cut the interest rates on savings account deposits up to Rs 25 lakh by 0.5 percent. The new interest rate has come down to 3.50 percent. Those having deposits over Rs 25 lakh in their savings bank accounts will continue to get the existing interest of 4 per cent. "Dena Bank has reduced the interest rate on savings bank account for balance up to Rs 25 lakh to 3.50 per cent per annum from the existing rate of 4 per cent per annum," Dena Bank said in a statement. For deposits above Rs 25 lakh, the interest rate will remain unchanged at 4 per cent per annum, it said. With this step, Dena Bank has joined a host of peer banks after the industry leader SBI started paying less on certain savings deposits.
SBI offers up to 100% waiver on processing fee on various loans
Market leader State Bank of India today announced waiver of up to 100 per cent processing fee on car, gold and personal loans. "To bring more smiles to customers and their dear ones, bank has waived 100 per cent processing fee on car loans till December 31, 2017," SBI said. SBI has also waived 50% of the processing fee on personal gold loans till 31 October, 2017. This waiver is in addition to the existing waiver on processing fee on takeover of home loans, SBI said in a release. Customer can also avail 50 percent waiver on processing fee on Xpress Credit which is a personal loan offering by the bank. SBI's share closed at Rs 274.65 a piece, down 1.44 per cent, on BSE.
Defaulters owe 27% of total amount to SBI alone, PNB next
Country’s largest public sector lender accounts for over 27% of the total amount owed to public sector banks by defaulters. 1,762 wilful defaulters owe Rs 25,104 crore to State Bank of India. Punjab National Bank is next on the list with 1,120 wilful defaulters having outstanding non-performing assets (NPAs) or bad loans of Rs 12,278 crore. These two banks collectively accounts for Rs 37,382 crore or 40 per cent of the total outstanding loans. There has been a 10 percent increase in the number of wilful defaulters on annual basis. During 2016-17, 27 public sector banks, including SBI and its five associates had written off Rs 81,683 crore, the highest in the last five fiscals. RBI has tightened its norms in order to check all the incidences related to the wilful default. A wilful default occurs when a borrower doesn't honour an obligation despite having the capacity to pay or siphons off funds by disposing of assets without the knowledge of the bank, according to RBI.
Govt to speed up the public sector banking mergers
In order to push consolidation in the public sector banking space, the government is looking forward to set up a new mechanism to speed up the decision of the merger of the public sector lenders. “We are discussing various combinations for merger in public sector banks. The basic premise remains the same, that is to put the process on a fast track,” said a government official aware of the deliberations, adding that this option may also be explored for the IDBI Bank stake sale. The government announced its intention of reducing its stake in IDBI Bank to below 51 per cent last year. Finance minister Arun Jaitley said in June that the government was “actively working” toward consolidation but did not share any details, stating this was price-sensitive information. According to another government, the idea is under deliberation. Cabinet approval won’t be needed at every stage with this mechanism in place, making the process faster. The cabinet committee on economic affairs (CCEA) on Wednesday expanded the scope of the alternative mechanism for pursuing the government’s strategic sale disinvestment programme.
Banks stare at union strike on Tuesday, services may be hit
As unions under UFBU have threatened to go on strike on Tuesday against the government's proposed consolidation move, Services at public sector banks may take a hit. Most banks have already informed their customers that functioning of branches and offices will be impacted if the strike takes off. The United Forum of Bank Unions (UFBU) is an umbrella body of nine unions, including All India Bank Officers' Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers (NOBW). "As the conciliation meeting before the Chief Labour Commissioner failed, unions are left with no other option but to go on strike. There was no assurance from the government and the management of banks," AIBOC General Secretary DT Franco said. Other demands include no write-off policy for non- performing assets (NPAs) of corporate loans, declaring wilful default of loans as criminal offence and implementation of recommendations of Parliamentary Committee on recovery of NPAs, AIBEA General Secretary C H Venkatchalam said. UFBU, which claims membership of nearly 10 lakh across banks, also requested the government for cost reimbursement of demonetisation to banks.
Regional rural banks' merger gets exemption from CCI ambit
The mergers of regional rural banks that are ordered by the government are now exempt from seeking CCI approval, according to a notification. The Competition Commission of India (CCI) keeps a tab on unfair business practices across sectors. There are 56 RRBs till date. The exemption has been granted for a period of five years. Karan Singh Chandhiok, partner at law firm Chandhiok & Associates, said the ministry has given a five-year exemption for such mergers from requiring the CCI clearance. "The banking sector in India is stressed and if the government wishes to amalgamate certain regional rural banks in the public interest, then regulatory approvals should be kept at the minimum. Under the RRB Act, 50 per cent stake in a RRB would be with the central government, 15 per cent with the state government concerned and the remaining with the sponsor bank.
PNB, HDFC Bank and ICICI Bank cut interest rate on savings account by 0.5%
Leading lenders PNB, HDFC Bank today slashed interest rate on savings bank accounts by 50 basis points to 3.5 per cent on deposits up to Rs 50 lakh. ICICI bank has also cut the interest rate on deposits below Rs. 50 lakh to 3.5%. Besides, Punjab National Bank has also reduced interest rates on fixed deposits of less than Rs 1 crore by 15-40 basis points on select maturities. HDFC Bank became the fifth while PNB sixth lender after SBI to cut interest rate on savings bank account. ICICI, HDFC and PNB joins peers SBI, Bank of Baroda, Axis Bank, Yes Bank among others which have reduced their rate on savings account deposits. "Post revision, customers maintaining savings bank account balance of Rs 50 lakh and above will continue to earn interest at 4 per cent per annum. Customers maintaining account balance of below Rs 50 lakh will earn interest at 3.5 per cent per annum," HDFC Bank said in a statement. The new interest rates of all the three banks will be effective from August 19.
Axis Bank Set to Waive off 12 EMIs for Home Loans up to Rs 30 Lakhs @8.35% p.a.
The Axis Bank has come up with EMI waiver scheme for home loan customers to widen its home loan portfolio. With the Shubh Aarambh Home Loan – as the bank has named it, axis bank has announced to waive 4 EMIs every 4 Years exclusively for home loans from Rs 1 Lakh up to Rs 30 Lakhs. As per this scheme, a customer can save up to Rs 3.09 Lakhs on a Home Loan of Rs 30 Lakhs taken for 20 years tenure @8.35% interest per annum. The bank will waive off these 4 EMIs at the end of the 4th, 8th & 12th year of the total loan tenure. Furthermore, according to the bank website part-payments can still be made for the Home Loan however that must not reduce the total loan tenure to less than 4 Years. With Shubh Aarambh, Axis bank aims to bring good Credit behavior of customers while making them stick to longer home loan tenure.
Third-party ATM use up as banks install few machines
Customer all across the country are now being forced to use other banks’ ATMs more often than before. The main reason is that the banks have slammed brakes on deployment of new ATMs. According to data from the Reserve Bank of India and the National Payments Corporation (NPCI), the trend has been picking up over the past six months. An average 40% of the customers used other banks’ ATMs for cash withdrawal before demonetization, which has shot up to almost 55%. Another reason for this rise could be that less number of ATMs are functional now as compared with the pre-demonetization days, forcing customers to be less choosy about ATMs. An analysis of the figures shared by RBI and NPCI shows that the mix of 'off us' and 'on us' transactions has reversed after demonetization. “Post demonetization there has been a sudden spurt in off-us transactions on ATMs. Previously 60% of the customers would use their own banks' ATMs, now the share has changed, “said Loney Antony, managing director of Hitachi Payments. “Currently we are hovering close to 50-50.”
Farmers to get crop loans at subsidized 7%, must link Aadhaar cards
RBI today said farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidized interest rate of 7 per cent that could go down to 4 per cent on prompt repayment. "To ensure hassle-free benefits to farmers under the Interest Subvention Scheme, the banks are advised to make Aadhaar linkage mandatory for availing of short-term crop loans in 2017-18," the RBI said in a notification to banks. In order to provide short term loans to farmers, it has been decided to offer interest subvention of 2 per cent to banks in respect of loans given by their rural and semi-urban branches only on use of their own resources. An additional interest subvention of 3 per cent per annum will be available to "prompt payee farmers". To provide relief to farmers affected by natural calamities, an interest subvention of 2 per cent per annum will be made available to banks for the first year on the restructured loan, RBI said. Earlier in June, the Cabinet headed by Prime Minister Narendra Modi had approved the interest subvention scheme for 2017-18.
Karur Vysya bank opens its first Aadhaar enrollment centre
Karur Vysya bank opened an Aadhaar Enrollment Centre at its Nelson Manickam Road Branch in Chennai. KVB is the first private sector bank to provide this service in India. UIDAI had advised all commercial banks to provide Aadhaar enrollment and updation facility at their branches. KVB immediately implemented this. Customers have to bring with them any of the approved documents as proofs of residence and identity. The process can be completed in about 15 minutes. The bank is planning to make this service at its 75 more branches across the country. In a separate notification to the Bombay Stock Exchange the bank said that it has appointed PR Seshadri as its new chief executive officer.
DigiLend secures Rs 2 crore from InCred Finance and Fullerton India
DigiLend, a fin-tech startup based out of Mumbai, has raised Rs 2 crore in its new funding round from two non-banking financial services companies. The startup has risen funding from Mumbai-based InCred Finance and Temasek-owned Fullerton India Credit Company Ltd. DigiLend will now be using the newly infused funds to pilot its product in the personal loan segment. The company provides personal loans up to Rs 5 lakh with an annual interest ranging from 12-30% and for a period of 6 to 36 months. The start-up enables individuals to avail of unsecured personal loans for education, travel, holidays, wedding, home improvement, debt consolidation, emergency needs, etc. InCred, which invested in DigiLend, has acquired peer-to-peer lending platform Instapaisa after investing in the start-ups last year. The firm has also invested in several fin-tech start-ups for around 10-15 percent stake, said founder Bhupinder Singh.
Digital wallet companies wait for RBI norms
RBI is expected to release the new guidelines for the prepaid payments instruments (PPIs) or digital wallets in a week or two. The RBI had last issued a draft master circular on March 20. Top executives of the payments industry met the regulator and voiced their responses to the suggestions and are now waiting for the final move from the regulator. “We have already voiced our concerns and explained our stand on the draft norms,“ said a top executive with a payment company. “A full KYC for all wallet holders will be a difficult proposition for payments companies as it would drive up their costs since the wallet balance limit is low they could consider partial KYC, “said another chief executive of a wallet company. While there was no direct mention of insurance cover for wallets, the industry executives are also keeping an eye out for any such references.
Retail, agri & MSME loans to deepen banks' stress
The first result of this fiscal year has opened a can of new worms- retail, agriculture and MSME bad loans. After the Reserve Bank of India’s regulatory dispensation of three months and farm loan waivers announced in five states, banks witnessed defaults emerging from these new segments. Over 30 banks, have recorded an increase of nearly Rs 45,000 crore in their gross non-performing assets. “Retail is the only book which is growing so banks will continue to lend in the secured retail i.e. mortgage loans or other home loans. But under the garb of retail loans, public sector banks (PSBs) have extended walk-in loans to a lot of SMEs. There is a difference in the way they approach loans (as compared to private banks). Here is the need to go on the ground and assess the inventory or equipment they are building. So, there could be some lacunae we suspect. So it needs to be seen, how much it will help the PSBs to move beyond their core strengths,” said Abhishek Bhattacharya, Director, Financial Institutions at India Ratings and Research. At the end of the June quarter, SBI reported its total bad loans at Rs 1.88 lakh crore, accounting for nearly 10 percent of the bank’s total loan book. Similarly, Bank of Baroda said of nearly Rs 4,200 crore slippages, Rs 868 crore came from agriculture, Rs 1,050 crore came from MSME and Rs 369 crore came from retail portfolio. Top private banks also saw a rise in agriculture loans with HDFC Bank’s 60 percent and half of Axis Bank’s rise in its incremental NPAs coming from the agriculture sector. Other public sector banks including Union Bank of India, UCO Bank also reported delinquencies in their loan repayments resulting in higher NPAs due to the farm waivers.
Bank told to pay family over Rs 7 lakh student loan row
The state consumer commission on Wednesday booked Central bank of India for refusing to hand over deeds of a house to a family despite having repaid in lump-sum a student loan of Rs 7 lakh. The bank's legal notice shocked the complainant's wife and she suffered a paralysis attack and died. The bank will now pay the family around Rs 25,000 as costs of the appeal. A loan of 12.5 lakh was taken by Harpahelsingh Bhansingh in 2001 for a five-year term, to send his daughter abroad to study. For security against the loan, he mortgaged his house in Kopri colony, Thane. However, his daughter failed to obtain a work permit and returned to India, after which the bank deemed the loan a non-performing asset and demanded a one-time settlement of 7 lakh. The bank failed to return the title deed of the mortgaged property and a no-dues certificate to the family. Bhansingh moved the district forum, which deemed the fresh notice illegal and demanded return of the title deeds of the property. The commission dismissed bank’s appeal. The bank should have been "ever vigilant" to protect the consumer's interests, the commission said, ordering it to compensate Bhansingh's family.
Majority union in SBI gains membership after associate banks' merger
The merger of State Bank of India's associate banks with SBI has resulted in sizeable membership gain for the majority union. The AISBISF may have gained but the gain cannot be quantified. "Around 28,000 members of AIBEA in the erstwhile associate banks have joined our union post-merger. Prior to the merger membership strength in SBI was around 170,000 and now we expect the membership number to touch 200, 000," Sanjeev Kumar Bandlish, General Secretary of AISBISF, told IANS over phone from Chandigarh. The AIBEA has the biggest share in the associate banks. However, AISBISF was the majority union in SBI. "It is true that some AIBEA members in erstwhile associate banks have joined AISBISF after the merger with SBI. But the numbers are not alarming. Unless the check off system is implemented in SBI, we may not know how many of our members have joined the rival union or vice versa," Venkatachalam said.
Saving deposit rate cuts to lead to lower lending rates: Report
Reduction in saving deposit rates by three large banks over the past fortnight may set the ball rolling for lower lending rates and stoke greater competition among lenders. State Bank had on July 31 slashed the pricing for under Rs 1 crore saving deposits by 0.50 per cent followed by Bank of Baroda and Axis Bank. "With the interest rate cycle reaching the bottom, downward reprising of existing liabilities can facilitate a further reduction in the rates. A few large banks cutting savings deposit rates over the past few weeks is a move in that direction," the India Ratings agency said in a report. Public sector banks have more room than private banks to percolate savings banks rate cut into reduction in MCLR because of a large base and sticky saving accounts. According to the report, this could intensify competition between large lenders with strong savings deposit franchise and capitalization towards gaining credit market share. "An improvement in demand growth rather than lower interest rates will have a greater positive impact on the credit profiles of over leveraged entities," the report concluded.
HFCs to face intense competition from banks above Rs 30 lakh home loan segment
Housing finance companies are likely to face some tough competition in the mid-to-large ticket housing segment of above Rs 30 lakh. According to the India Ratings and Research agency (Ind-Ra) HFCs may find it challenging to expand their portfolio in the large ticket housing segment. "HFCs will face a margin contraction in this segment, limiting the spreads to absorb all the costs, while trying to generate reasonable returns," Ind-Ra said in a report. "This space is characterised by limited competition from banks and hence offers reasonable risk adjusted returns," it said. Ind-Ra estimates just about one-fifth of the total HFCs’ portfolio accounts for ticket size higher than Rs 50 lakh.
Indian bank to offer 2-tier interest rate for savings account
PSU lender Indian Bank today said it will offer interest rate of 4 per cent per annum on savings account with incremental balance of over Rs 50 lakh and 3.50 per cent per annum for deposit up to Rs 50 lakh. The lender in a statement said “it has introduced two tier interest rate structures for saving bank accounts and will offer 4 per cent interest per annum for incremental balance over Rs 50 lakh and 3.50 per cent per annum for balance up to Rs 50 lakh.” The bank said that the new interest rates will be effective from August 16, 2017. Recently SBI has slashed interest rates on saving account deposits by 50 basis points. However, it continues to offer 4 percent interest rates on savings account balance of Rs 1 crore and above.
SBI hopeful of bouncing back despite rise in the bad loans
SBI’s June quarter earnings fell 20 percent on a non-comparable basis but if the number of merged entities were taken into account it rose more than four times. But, its overall financials continued to deteriorate. Along with the bad loans, the sudden surge in the retail lending portfolio of the banks affected the bank’s earning. Profit on the consolidated banks’ accounts rose 435% rise to Rs 2006 crore, from Rs 374 crore net a year earlier, Chairman Arundhati Bhattacharya told reporters. “You cannot compare merged entity with the solo because there is an alignment of books that is going on," Bhattacharya told reporters. "This one quarter we have only spent to getting our house in order whether it is data merger, people transfers, whether it is reorganisation of the branches, so all of that has happened.” The merger took a toll on bank’s recovery. But the bank admitted to the mess the merger has created and is confident it could bounce back.
Banks waive loan switch-over costs from base rate to MCLR
Customers are now getting a waiver on their charges on transfer of housing, auto and personal loans to marginal cost based lending rate (MCLR). Lenders like state bank of India and HDFC are asking customers to transfer their base rate to MCLR to get the benefit of lower EMIs. However, switching from base rate to MCLR or transfer from one bank to the other is a cost incurred by the bank and is passed on the borrowers in the form of processing fee, legal charges and others. N.S. Venkatesh, Executive Director, Lakshmi Vilas Bank, said, "Most banks have a huge chunk on base rate. So, the movement to MCLR will have to happen for customers to get lower rates. With RBI also reviewing the base rate to be tweaked to ensure lower rates are transmitted, we too are looking at waivers if and whenever there is a requirement. It is always a relationship-based pricing based on the loyalty, repayment track record and their credit scores." Banks usually hire channel agents to facilitate transfer of loans while the switching from base rate to MCLR is avoided by the banks. N.S. Venkatesh, Executive Director, Lakshmi Vilas Bank, said, "Most banks have a huge chunk on base rate. So, the movement to MCLR will have to happen for customers to get lower rates. With RBI also reviewing the base rate to be tweaked to ensure lower rates are transmitted, we too are looking at waivers if and whenever there is a requirement. It is always a relationship-based pricing based on the loyalty, repayment track record and their credit scores."
Now, an insurance cover for insolvency professionals
ICICI Lombard, HDFC Ergo, New India Assurance and National Insurance are among the insurers who will offer a tailored insurance cover soon for insolvency professionals. These are to be available only for company’s top executive and board of directors. However, it wouldn't cover an insolvency professional who would take charge of running a company during bankruptcy proceedings. "As of now, the normal professional indemnity cover can protect them," Said Sanjay Datta, chief underwriting and claims, a t ICICI Lombard differs. "Later on as market need increases we can develop a specialised cover for them." "We will surely be interested in providing cover. First, we need to understand the nuances of the product because to design the product we need to understand the responsibilities and liabilities the IP will have," said G Srinivasan, managing director of New India Assurance. The IP has discretionary power to take decisions on day to day running of the company.
Reserve Bank of India dividend to government halves to Rs 30,659 crore
The demonetisation has come with a cost to the government. The RBI will be transferring only Rs 30,659 crore less than half the amount- Rs 65876 crore it transferred to last year. This reduction could be due to a number of factors including higher cost of printing new currency notes and cost of managing excess liquidity generated from phasing out of Rs 500 and Rs 1000 notes, though it is difficult to identify exact reasons at this stage. “(During the year) foreign currency reserves of RBI were fetching less return because most of the foreign countries were giving negative returns or very low returns. Also, throughout the year the reverse repo has been high that means that RBI has to pay to banks. The whole of last year there was surplus liquidity and RBI had to pay more interest to the banks” said former RBI deputy governor R Gandhi. The RBI from 2014 onwards transfers its entire profit to the government. “The lower amount will be a concern since the government’s non-tax receipts will be affected,” said Mdan Sabnavis, chief economist at Care Ratings.
Bank of India to shore up Rs 8000 crore capital this year, says MD
Bank of India may have just turned around and is planning to raise Rs 8,000 crore in capital to be ready to buy a bank as and when the government sets in motion the consolidation process. Bank reported a net profit for the June and accretion of bad loans also slowed. "Bank is poised for growth from here onwards if there are no big surprises," chief executive Dinabandhu Mohapatra told reporters. Recovery from bad loans aided the profit as the June quarter net profit was at Rs. 87.7 crore. The bank has sought Rs 2,500 crore capitals from the government this fiscal and plans to raise the remaining from the market.
ICICI Bank Launches Instant Credit Card Service
ICICI bank on Wednesday has announced the launch of Instant Credit Card Service, which will help its savings account customers to get a credit card instantly. This is the first-of-its-kind offering in the Indian banking industry, the private sector lender said in a press release. "The facility significantly improves customer experience as it allows choosing from a suite of credit cards and creating a credit card instantly," ICICI Bank said. Through the Instant Credit Card Service, which is available round-the-clock and on all days, a customer can get a credit card instantly with a credit limit of up to Rs. 4 lakh based on pre-checked bureau scores. To apply for an instant credit card is available through the Bank’s internet banking account where they will be given option for availing a credit card.
Banks to go for vulnerability test asked by RBI government
Cyber security preparedness is a continuous constant activity and the RBI has asked banks to periodically conduct vulnerability test, the finance ministry said today. In a written response to the Rajya Sabha state Minister of Finance Santosh Kumar Gangwar said the RBI has furnished Cyber Security framework in Bank to help them with any future cyber-attacks. According to the Reserve Bank, ’Wanna Cry’ ransomware attacks were announced from Banks throughout May and June this year and few computers in two Bank branches and one ATM unit were clashed “though no data loss was reported”. “The RBI had issued advisories to banks in relation to ransomware attacks, regarding application of relevant patches in and update of antivirus software for all systems,” the minister said.
PSBs preferred for branches, private banks for websites
Public-sector banks are still not seen as cyber savvy as private banks even when most of them offer online services. When it comes to doing routine transactions, 37% of urban internet users go to websites of public-sector banks while 44% prefer websites of private banks. However, urban user prefer going to public sector branches rather than private sector branches. 14% like to do routine transactions at branches of public-sector banks while only 4% go to branches of private-sector banks. Urban internet users find branches of public-sector banks more convenient and with better customer service than those of private banks. In case of customer service, 23% find it the best at public-sector bank branches while the number for private-sector branches is 18%. When it comes to convenience of using various banking channels 9% urban internet users find branches of public-sector banks convenient while the number for private-sector branches is just 4%. For convenience and customer service in case of websites, urban users prefer private sector banks.
HDFC Bank all set to increase its term financing exposure riding on demand
India’s most valuable private sector bank is slowly increasing its term financing exposure riding on demand for financing from road and transmission sector as it seeks to diversify its balance sheet. Though working capital will still dominate the balance sheet, it is considering looking refinancing of the opportunities as said by executive director Kaizad Bharucha. Loans to companies made up 46% of the loan book as of June 2017. The bank’s total advances stood at 5.80 Lakh crore out of which 30% were term loans. HDFC Bank is looking at opportunities especially in the road projects under the hybrid annuity model. HDFC bank was ranked number 1 by an annual survey of US based Greenwich associates on the basis of interviews with CFOs and treasurers of 500 and middle market and large companies.
Income Tax returns up 24% as more individuals declare income
The government's demonetisation drive and the subsequent “Operation Clean Money“ seems to have been resulting in a massive jump in the number of returns filed this year as well as individuals paying taxes. The income tax department said on Monday there was a 24% rise in the number of returns filed until August 5, the deadline, one of the highest growth rates in recent years. In the case of individuals, the increase was 25.1%, with the number of returns filed estimated at 2.79 crore. “This clearly shows that a substantial number of new taxpayer has been brought into the tax net subsequent to demonetisation, “the I-T department said. “This clearly shows that a substantial number of new taxpayers has been brought into the tax net subsequent to demonetisation, “the I-T department said. Within five months of demonetisation, the government had managed to get 91 lakh new tax assesses. While several people had responded to the query posted in their online tax accounts, those who did not respond face action.
RBI asks banks to ensure the safety of the customers’ lockers
The RBI has asked branches to ensure safety of the customers’ lockers in such a way that no negligence can render the banks responsible for any loss. In a reply to the Rajya Sabha the Corporate Affairs Minister Arun Jaitley said that there is no specific circular by Department of Financial services asking banks to compensate for the theft for the loss caused to the customers. The Competition Council of India in May received a complaint alleging cartelisation among the banks in respect of providing security to the locker holders. A disclosure by RTI mentioned that RBI and 19 PSU banks in June had said that they were not liable for the theft caused to the lockers as the burglary caused was beyond their control. The government, the RBI and the banking industry cannot wash off their hands from their responsibility and expect rent for providing services, as said by Bejon Misra, Founder of Consumer Online Foundation.
All-India Strike on August 22 called by Bank Unions
Employees of bank unions have called for a national level strike on August 22 to dissent against privatisation and merger of public sector banks, among other demands, a union leader said. The all India Bank Employees Association (AIBEA), which represents nine bank unions and employees of public and private sector banks, on august 22 called for nation-wide strike to press for various demands, its general secretary C H Venkatachalam said. Around 10 lac employees would participate at this strike to protest against privatisation of public sector banks, merger and consolidation of banks and other demands including not to diminish non-performing assets (NPAs) in banks, as said by Venkatachalam in statement. Some of the other demands put outside through the unions involve declaring wilful default of bank loans as criminal offence, execution of the recommendations of Parliamentary Committee on recovery of NPAs.
Bank of India all set to raise Rs.600 crore by selling stake in finance company
Bank of India plans to raise Rs 626 crore by selling 30% stake in STCI Finance a move aimed to raise capital to grow its balance sheet. The bank which is government owned has put to sale its stake and the last date for bidding on it is August 22. The move is said to overcome the losses which the bank has faced in the past 2 years. The STCI is a finance company which Bank of India had acquired from the Reserve Bank of India. A number of PSUs own a stake of 78% in the company with Bank of India as its major stakeholder at 30%. Dinabandhu Mohapatra M.D. of Bank of India said that as of now they are good on the capital front but for growth currently they are focussing on the maximisation of capital.
SBI-SBH merger cause delay in approving loan to differently-abled
The differently-abled people have been waiting for over six months to get the loans they have applied for. It may be mentioned here that to set up business unit, the government gives a grant of Rs 50,000 and the banks give another Rs 50,000 as loan. But, since January the applicant have been waiting for the banks to release the money. A 28-year-old differently-abled, Syed Yousuf said, “I wanted to set up a tailoring shop with the loan amount; but for the past six months, the bank has not released the loan and the bank employees and the manager did not respond to my request.” Disabled Welfare Officer D Sudarshan has taken up the issue with the bank officials and assured the amount would be release at the earliest. The bank official said, “It has been two months since the State Bank of Hyderabad (SBH) has been merged with the State Bank of India (SBI) and hence there is a delay in the approval of loans.”
Savers are as important as borrowers holding high saving accounts rates: Kotak Mahindra Bank
Mumbai- The day after the top lender SBI cuts down its savings account interest rate by 0.5% due to surplus liquidity, mid-size lender Kotak Mahindra Bank (KMB) this day said it will continue with its raised offerings. The City-headquartered private lender said it will carry on with offering 5 % per annum for deposits of up to Rs.1 lac and 6% for those above it but up to Rs.1 crore. “We feel this is the right time to build a retail franchise and the higher savings bank rates have helped us significantly over the last three to four years,” president of consumer banking Shanti Ekambaram told PTI. The only alteration bank has done is a reduction in savings account by 5% between Rs.1 crore and Rs.5 crore to 5.5% but Ekambaram was fast to add the rates for 99.9% of KMB customers are remained the same.
Magma Fincorp, in order to grow its home loan business, is all set to shift its focus towards affordable segment
Kolkata based Magma Fincorp to shift its focus from the loan against property segment. Instead it will focus on the affordable segment to grow its home loan business. According to Manish Jaiswal, M.D and C.E.O, while loan against property is targeted at the SME it is all the more risky. The total housing loan book also includes loan against property which is approximately Rs.2972 crores. “At present the share of home loan is close to 30% while loan against property is 70% of this total business. We intend to reverse this mix in the near future” as said by Jaiswal. During the current fiscal, Magma’s focus would be on bringing down the cost of the funds and managing asset quality even if that comes on the back of lower growth in business. ‘’Growth is secondary to the quality of the portfolio and profitability’’, as said by Kaushik Banerjee, CEO, Asset Finance, Magma.
Borrowers to benefit from RBI’s slashing of the repo rate
RBI has decided to cut the repo rate by 0.25% and borrowers especially with home loans will get the benefit of decline in EMIs. This benefit can be felt only when the reset date of loan interest rate comes up. The spread which the banks are allowed to levy over and above the MCLR also impacts the actual interest outgo of borrowers. Despite the reduction in the MCLR borrowers also need to look at other factors when taking a loan such as the reset-period, prepayment conditions, foreclosure and switching to another lender with no penalties. After the 0.25 percent cut in the repo rate by the Reserve Bank of India (RBI), the cost of funds for the banking system is expected to come down. The home loan borrowers should, therefore, get the advantage of lower EMI's. In a highly expected move, the Reserve Bank of India (RBI) has cut the repo rate by 0.25 percent in its monetary policy review on August 2, 2017.
RBI urges states for single-window nod to affordable housing
Mumbai- The governor Urjit Patel today asked for a separate single window mechanism for clearance of affordable housing projects as many are stuck at state government bodies. He said that affordable housing requires greater attention and has strong multiplier effect on the growth. Under the Pradhan Mantri Awas Yojna, government is targeting at housing for all by 2022. “We have mentioned that we could have stronger growth performance if some of these things are taken forward in particular removing infra bottlenecks, finding measures to reinvigorate private investment and provide thrust to affordable housing initiative of the government, which has a potential for very strong multiplier effects,” Urjit Patel the governor of RBI said at press conference post announcement of the bi-monthly monetary policy. “Fair number of pieces of the jigsaw is already in places.”
Resolution of bad loans to start soon, RBI soon to take up more cases: FM Arun Jaitley
The resolution of bad loans is soon to start as said by FM Arun Jaitley in the Lok Sabha. The RBI has already identified 12 loan defaulters and will take up more cases in the future. The Banking Regulation bill seeks to amend the Banking Regulation Act and replace Banking Regulation Ordinance. Winding up the bill Jaitley said that some of the laws of the bill were outdated. The RBI had identified 12 loan defaulters which accounted for 25% of the total bad loans of the banking sector. Jaitley said the loans were given during the boom period i.e. before the global financial crises of 2008 and the present government is trying to find a solution to the non-performing loans.
Cost of credit along with positioning has restricting banks to cut MCLR: SBI
Mumbai- The SBI on Thursday said that though the Marginal Cost of Funds-based Lending Rate (MCLR) is believed to be one after the other with the policy rates, banks are hesitant to reduce it due to cost of credit and deposits and NPAs positioning. The Reserve Bank of India on Wednesday slashed down the essential lending rates by 15 basis points (BPS). “As far as the MCLR is concerned, it is a function of multiple components. It is intended that the MCLR is in tandem with policy rates,” State Bank of India (SBI) Managing Director and Chief Executive Officer Dinesh Khara told BTVI in an Interview. “But other factors like the cost of deposit and cost of credit- which are a critical determinant of MCLR- and also non-performing assets (NPAs) positioning, are restricting banks from cutting the MCLR, the policy rates are critical component but not the only component affecting the MCLR,” he said.
Flipkart is offering EMIs on debit cards for big ticket purchases
Flipkart is offering its customers to avail monthly EMIs through their debit cards during its annual Big Billion Days sale. So far, EMIs have been limited to purchases made using credit cards across all big e-commerce sites. The company has created a white list of users who will be given this option. Flipkart is working with State Bank of India and Axis bank to test this new service which will start with large appliances and will be rolled out for mid to high value product later. "Based on past purchases and other data points we have a set of customers who we can offer EMIs through their debit cards. We saw that this population of buyers was not being able to shop for high value products as they did not have credit cards. With this plan about to be introduced they can opt for higher priced items which shall push our overall sales volumes up," said Snadeep Karwa, head of large appliances for Flipkart. Since the number of debit cards outnumbered credit card in India, retailers are thinking about introducing this option. Over the last one year, Flipkart has been pushing consumer finance programmes to boost sales.
A group of banks led by SBI has ordered forensic report of Videocon’s accounts as a precursor of debt recast
An SBI led group of banks has ordered a forensic audit of the Videocon industries account to find out whether the company has foundered because of the financial mismanagement or adverse business conditions. The action is preliminary as Videocon has defaulted for loans worth Rs.43000 crore. The audit will be conducted by KMPG, one of the big four audit firms. Indian banks have become wary of taking of decisions based on the discretion of the management after the arrest of five IDBI officials and also the higher authorities of the Kingfisher airlines in a loan default case. The company will go with will meet its obligations but it required more time. Punjab National Bank and Central Bank have classified Videocon as bad and the SBI might do it when they announce the results on August 11. A forensic report will give a clear idea of the liquidity position of the company.
Direct Tax collection grows by 21%
The government has collected over 1.80 lakh as direct tax till July 15, an increase of 21.4 percent year-on-year. "The current growth rate is higher than the target rate of 15.32 required achieving the Estimated Budget," Minister of State for Finance Santosh Kumar Gangwar said in a written reply in the Rajya Sabha. The government is aiming to collect Rs.9.8 lakh crore through direct taxes in 2017-18. The current growth rate in direct tax collections is "quite healthy, belying any apprehension of reduction" in the level of economic or commercial activities, said the minister. Gangwar said that the number of cyber crimes shows a marginal increase of 4.4 percent. He later told that the RBI has mandated the banks to place a cyber security policy to cover the risk threads.
Indicate scope for rationalisation of rates under GST by Finance Minister Arun Jaitley
New Delhi- There is chance for scope to rationalise goods and services tax and rolling 12 per cent and 18 per cent into one as execution of the county’s inclusive indirect tax reforms progress. “I do concede that as it (GST) moves forward, there will be scope for rationalising the rates. There, probably, will be scope that the two standard rates of 12% and 18%, after some time, could be clubbed into one. That is a fair possibility and a suggestion,” as said by Jaitley replying to debate on the two bills related to GST in J&K. Central Goods and Service Tax (Extension to Jammu and Kashmir) Bill, 2017 included Goods and Services Tax (Extension to Jammu and Kashmir) Bill, 2017 were later passed by a voice vote.
RBI says it is comfortable with the currency in circulation
The Reserve Bank of India said it is okay with the currency which is currently in circulation reaffirming the contention that the notes won’t get back to pre demonetisation levels. The currency which is currently in circulation is showing signs of normalisation as said by deputy governor Viral Acharya. Total currency in circulation was Rs 15.41 Lakh crore on July 28 according to Central Bank data about 86% of the amount which was in circulation last year on November. The currency in circulation is about 9% of the GDP down from more than 12% previously. This typically ranges between 5% and 8% of GDP in developed nations. It is also believed that the lesser the currency the lower the chances of corruption as high value notes are used to pay bribes. The pace of re monetisation has slowed down since June. While the seasonality suggests a fall in pace of the weekly currency in circulation around July-August the recent fall which could be due to the increase in the printing of Rs.200 notes and the termination of the printing of Rs.2000 notes.
Festive offers, lower home loan, car loan EMIs are on their way as RBI cut repo rate
RBI’s decision to cut its repo rate by 25 basis points to 6 percent is likely to lead to a further cut in the lending rates, especially home and car loans. “Home loan rates could come down to around 8.2% per annum on an average. So, the new borrowers can expect EMIs to come down and which would also cut down the interest outgo over the loan tenure. Banks may come also up with promotional offers till festival season to attract more customers,” Rishi Mehra, CEO of Wishfin.com said. Mehra also said that the old borrowers under the MCLR regime have to wait for the next reset period to get the rate reset while the base rate customers can shift to MCLR regime to take advantage of the lower rates.
The RBI governor Urjit Patel, in his post monetary policy press conference, has said that the transmission of previous rate cut has been strong in the home loan and personal loan segment. The RBI governor hoped that similar transmission of lending rate cuts are made effective in other loan segments too.
Axis all set to raise $500 million from medium term notes
Axis Bank has raised $500 million in bonds as a part of its $5 billion global medium term note program. The bank has managed to obtain a finer pricing as it offered about 25 basis points less than what it had planned earlier. The dollar denominated bonds yielded about 3.11% as it added a spread or a mark up of 130 basis points over and above the 5 year treasury yields. Institutional investors from Africa, Asia and Europe invested in the paper said an investment banker familiar with the matter. Shashikant Rathi the head treasury of the Axis Bank said that they have received an overwhelming investor response across the regions with more than 150 of them showing interest. The bank has garnered an order book going up to $1.80 million since the beginning of the sales process. But the over subscription part got rejected.
Loan amount of Rs.2.04 Lakh crore restructure by Corporate Banks in FY17
New Delhi- The amount of corporate loans restructured by lenders has notice a reduce in the previous three years, as mentioned in the data table of Finance Minister Arun Jaitley in the Rajya Sabha today. Banks redesigned loans which were approved for companies, of worth Rs.3, 70, 279 crore in FY 2014-15 and Rs. 2, 99, 111 crore in 2015-16. According to the amount of restructured corporate loans moved down to Rs. 2, 04, 884 in the previous year. The Finance Minister was answering to a question obtaining names of companies whose loans have been restructured and at what basis. “Any restructuring is to be carried out in accordance with detailed guidelines issued by RBI on restructuring like joint Lender’ Forum (JLF), strategic Debt Restructuring (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4A),”as said by Arun Jaitley.
RBI planning to conduct a cyber audit of all the other banks
The RBI is planning to implement a cyber audit of all the other banks in place of just a few big banks. The banks which do not have security checks in place as per the rules prescribed by the RBI will be given time to comply with the same failing which action will be taken against the defaulting bank as said by the officials. A separate cyber cell was created by the RBI. The department which conducted the audit for 3 banks and covered 30 banks last year whereas this year they are planning to cover each and every bank for separate cyber security and IT audit, as said by an RBI official. RBI is also expected to do a gap analysis and also ask the banks to bridge the gaps if any. Since last year, the bank has been carrying out IT examination of the banks separately by conducting cyber audits of the banks randomly and suggesting remedial actions. As per the Indian Computer Emergency Response Team (CERT) India witnessed more than 27000 cyber security threat incident in the first half of 2017.
Cut in savings rate to boost SBI’s NIM by 14bps
According to a foreign brokerage report, SBI deposit rate cut will lead more lenders to follow suits and help widen the net profit by 0.15%. "We expect most other banks to follow as well; the benefit (NIMs) could be 0.05-0.15 per cent," Morgan Stanley said in a note released a day after the largest lender offered rate cutting. The American brokerage said it will revisit its earnings estimates after the June quarter Explaining SBI's decision for the rate cut, it said the bank was left with only two options after the aggressive marginal cost of funding based lending rate (MCLR) cut in January and the subsequent outflow of 60 per cent of the over Rs 1.5 trillion of the demonetisation-linked deposits. The country's biggest lender had cut the rates by 50 bps to 3.5 per cent-the first time in over six years yesterday, citing "muted credit demand and very high real interest rates".
RBI’s holding of US treasuries is at all-time high, at $127.3 billion
The Reserve Bank of India’s holdings of US Treasury Bonds moved to high, probably considering the Central bank's view that US rate increases may not be quick, but moderate. At $127.3 billion in May, India was the sixth largest Asian bearer of the safest financial instrument on the basis of data from the US Department of the Treasury. Globally, the country was ranked 12th, after Saudi Arabia, which invested in Treasury bonds worth $134 billion. “RBI may have used its huge pile of Xerox reserves to buy US Treasuries, the safest bet for any emerging country,” as said Soumya Ghosh, chief economist at State Bank of India. The US benchmark yield was high as 2.63% during March among Federal Reserve rate increase hopes. The yield now is about 2.30%, almost similar to the level in May.
Ghatkopar collapse survivor worried about housing loan EMI
Most residents of sai-darshan society in Ghatkopar, which collapsed on July 25, are still counting their losses. One of the residents of the society Mr. Vinod Thak is faced with repaying the housing loan he took to buy a flat in the same building. Mr. Thak has taken a loan of 50 lakh seven months ago to buy a flat on the third floor. After losing his mother and sister-in-law, in the collapse, he is still struggling to deal with the situation. “I am completely torn apart. I don’t know what to do. I’m supposed to pay the EMI on Tuesday, but why and how should I pay? I have lost my property,” he said. “I’m going to meet the bank executives and I hope they will give me some relief on humanitarian grounds. I need to hear their side too. I will file my submission for relief.” Srinivas Chaudhary, a relative, demanded the government expedite the process of rehabilitating survivors. “I heard that Modiji has announced monetary relief. While this is welcome, we want our home back as soon as possible. So far, survivors are living with relatives.” Shiv Sena worker Sunil Shitap was arrested last week in connection with the building collapse.
Housing for All Mission will gain an upward thrust in the affordable housing segment
Housing has been a perennial problem for the policy makers. Approximately there is a shortage of 18 million housing units in the urban areas. However, providing the required number of houses will not help in solving the problem. 90% of the houseless people are the ones who cannot afford to buy a house in the urban area. The facts have come to light after the announcement of the Pradhan Mantri Yojana in May 2015 which aims to build 20 million houses for the urban poor by May 2022. A person who already owns a home can also apply for the scheme if he/she wants to expand the area of the existing house. To promote this scheme it was given a special status in the Union Budget 2017. The prices in the Affordable Housing segment are likely to dip in the near future. Considering this all the stakeholders should take advantage of the Housing for all by 2022 mission and make it a grand success.
Interest rate on savings account deposits cuts down by SBI
SBI has cut down its interest rates on saving accounts to 3.5% from 4% on balance of Rs.1 crore and below the biggest public sector informed to stock exchanges on Monday. Around 90% of SBI’s saving accounts have balances under Rs.1 crore. “The declines in the rate of inflation and high real interest rates are the primary considerations warning a revision in the rate of interest on saving bank deposit,” stated by SBI. The change in the system is fruitful instantly and also marks the launch of a new two-tier savings account interest rate system as balance of over Rs.1 crore will continue to attract the earlier 4% rate. Market and analyst notice the bank's progress as a positive effect and believe the 0.5% cut in savings bank deposits will support in boosting SBIs margin. SBI regularly leads the rate cut cycle with other bank following suit. Analysts await the same to happen with Monday’s interest rate cut.
Debit and credit card spends at point of low sale with cashback in system
At closed to the amount of 74, 000, debit and credit card spending at point of sale interval may have harmonised at levels that are about 40% higher than they were pre-demonetisation, suggests data from the Reserve Bank India (RBI) website. The amount spend by cards in May added up to Rs. 73, 649 crore, up 42% from Rs. 51, 884 crore in October, and 25% higher than Rs. 58, 734 crore in November. However, none of the months up till now has seen a spending close to the December peak of Rs. 89, 180 crore. Besides that ticket sizes are shifting down, suggesting cards are being used for smaller transactions too; from Rs. 2, 261 in October, at the present time they are at Rs. 1, 924. In spite of that, they are above December lows of Rs. 1, 678. For undetermined reason cards aren’t being used to pay for groceries or even at restaurants, except may be at high-end restaurants or cafes. Even at the time when the cash shortage was acute, the average ticket size was Rs. 1, 500.
Infosys and Yes bank became most active stocks in terms of value
Shares of Larsen & Toubro followed by Infosys, YES Bank, LIC Housing Finance and HDFC were among the most active stocks in terms of value on NSE in Monday's trade. L&T reported a 46 percent rise in consolidated net profit for the June quarter. Benchmark indices remained firm after registering a cautious start on account of mixed cues from global markets.
Major metal, auto and banking stocks were trading up. In the Nifty 50 pack, 23 stocks were trading in green, while 19 stocks were in red. Benchmark Nifty 50 index was 25 points up at 10,039, while the 30-share Sensex was 85 points up at 32,395 around 10.05 am (IST).
RBI likely to cut down rates on August 2 as inflation slows down
With retail inflation going down day by day RBI is all set to reduce lending rate by 0.25% in its third by monthly review on Wednesday as said by expert bankers. The expectation is of rate cut of minimum 25 basis points as inflation has eased and also as the industrial growth has continued to remain low. A rate cut will give a push to the slow growth in the market as said by the Bank of Maharashtra M.D, R.P. Marathe. The RBI may not touch the CRR or the Statutory Liquidity ratio as there is sufficient liquidity in the market. The Global Research firm Bank of America a Merrill Lynch too expects the MPC to cut rates by 25 basis points. The retail inflation, which the RBI considered in while deciding the interest rate has declined to a low of 1.54% in June. The governor of the RBI, Urjit Patel has argued that this is a premature policy action and that they should wait for more data in the same context.
Kotak launched instant Aadhaar based forex remittance
Private sector lender has partnered with India and launched an Aadhaar based instant forex remittance solution. Named as ‘Kotak Remit’, the solution will assist the customers and non-customers in sending the money overseas online through a dedicated portal. “The transaction can be completed instantly. We use Aadhaar-based authentication, which eliminates the need for another leg in the transaction,” said Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank. The bank is currently targeting the outward remittance market. With the help of this service, the customer would be able to initiate the process within their net banking services and those who are not the customers of the bank can access the portal from bank’s pre-login web page.
NPCI’s Bharat Bill Payment system is being implemented by Indian Overseas bank.
The Bharat Bill Payment system introduced by the National Payments Corporation of India (NPCI), Public Sector lender Indian Overseas Bank has started implementing with the same. Bharat Bill Payment System (BBPS) is a unique segregated bill payment service that enables interoperable online bill payments to the users.” BBPS offers several services, namely online payments of electricity, telecommunication, DTH, water and gas bills,” said by the bank. Separately from Bank of Baroda and Union Bank of India, Indian Overseas Bank is the third public sector banks have to obtain the assent from the Reserve Bank of India (RBI) for providing the services. “The certification with NPCI has been completed and the BBPS system has been implemented for customers and to the billers.” The bank added. National Payments Corporation of India (NPCI) currently received the final nod from RBI to operate as the Bharat Bill Payment Central Unit (BBPCU) and functionalise the Bharat Bill Payment System (BBPS).
Government will consider extending July 31 deadline for income tax return
There is a possibility of enlarging July 31 deadline for filing income tax return, a senior bureaucrat in the finance ministry told ET Now. If a decision is taken to extend the deadline, it is unexpected to inform the public till the last day as the taxman does not want to assess to get unenthusiastic.” Taxpayers this year have been facing many new difficulties, so prima facie there is a genuine case to extend the deadline”, as said by the Government officials. Illustration this, Chartered Accountants are burden with extra work and have been busy with the transition to the Goods and Services tax. “Chartered Accountants’ immediate priority has been to help their business clients’ transition for GST, and not filing personal income tax returns,” said the sources.
No update on withdrawal of Rs.2000 note, Rs.200 note to be issued soon as said by Ministry of State – Santosh Gangwar
With rumours of the scrapping of Rs.2000 note doing the rounds the Minister of State for Finance Santosh Kumar Gangwar has made it clear that there is nothing of that sort which is about to happen. However Rs.200 note will be soon brought into circulation. According to media reports the further printing of Rs.2000 notes has been stopped. Industry experts claim that the ministry has decided to limit the circulation of higher denomination Rs.2000 note however it would remain a legal tender but the soon to be introduced Rs.200 note would be used on a larger scale as compared to the former Rs.2000 note. The new Rs200 note would be introduced in the month of August as said by a top government official. Post demonetisation people were finding it difficult to use the Rs.2000 notes as the smaller denominations. The economy is now close to complete re monetisation as the new currency has reached 84% of the extinguished one on July 7.
RBI chief Urjit Patel met Arun Jaitley before monetary policy review
Ahead of next monetary review in August First week, RBI governor Urjit Patel, called on Finance minister Arun Jaitley and discussed about various micro-economic issues. Patel also met the newly appointed Economic Affairs Secretary Subhash Chandra Garg. The monetary policy committee headed by Patel will meet on August 1-2 for third bi-monthly policy statement. Chief Economic Advisor Arvind Subramanian had earlier this month said there had been a "paradigm shift" in inflation trajectory which has been "missed by all". His comments came as a reference to the decision of the MPC of keeping the key policy rate unchanged.
Marui Suzuki’s net profit affected by higher input costs and GST
The country’s largest car maker reported a 4.4% increase in net profit for the first quarter ended June. Growth in company’s net profit took a hit on account of higher deferred tax provision of Rs 185 crore, more than four times the amount it had expended last year. Maruti Suzuki sales though remained strong and increased by 13.2%. Total income of the company went up by 17%. “Growth in volumes, favourable product mix, higher non-operating income and cost reduction efforts contributed to increase in profits,” Maruti Suzuki said. During the quarter dealers were affected at the time of transition to GST and the compensation was given to them for the loss incurred. Bharat Gianani, research analyst, Sharekhan, said, “Healthy double-digit top line growth backed by strong volume and better mix was offset by drop in the margins. Higher raw material costs coupled with one-time GST compensation to dealers led to a mid-single digit profit growth. Given the waiting period on about 35-40% of its portfolio coupled with fast tracking of capacity addition would drive earnings growth going ahead.”
Will microfinance companies be your next bet among market cheerfulness?
Mumbai- Microfinance could always be your next big merchant even as investors try to find out their next step after the broader index Nifty hit a record high on Wednesday. Shares of Ujjivan Finance, Equitas Holdings and Satin Credit care have not taken part in the latest rally, eroding shareholders’ increased value by 1.5 per cent in the previous two days as they are still to recover from the effects of last November’s demonetisation. Those stocks which are available on low valuation may increase your investment returns in the coming three years between the government’s operates for financial inclusion, a central to the country’s much enjoyed double digit economic growth. In the last three trading sessions, the broader index Nifty 50 hit a record high, crossing the figure of 10,000. On Thursday, it closed at 10, 020. Between Tuesday and Thursday this week Ujjivan and Equitas shares fell 1.3 to 1.5 per cent while the large sector index Nifty Bank rose by 1.63 per cent.
According to market YES Bank and ICICI Bank are now most active in terms of value
On NSE shares of YES Bank (Rs. 412.79 crore) became as the most active stock in terms of value on Thursday’s trade after it reported a 32 per cent growth in net profit to Rs. 966 crore in the quarter by June, driven by powerful loan demand. It was followed by IT firm HCL Technologies (0.12 crore) which reported on this present day a 10.7 per cent sequential fall in net profit at Rs. 2, 210 crore for the June quarter. Other important stocks such as ICICI Bank (Rs. 102.22 crore), HDFC (Rs.85.80 crore), Maruti Suzuki (Rs. 64.22 crore), Reliance industries (Rs. 58.03 crore), ITC (Rs. 49.86 crore), Titan (Rs. 43.97 crore), State Bank of India (Rs.41.20 crore), Infosys (Rs. 40.36 crore), Axis Bank (Rs. 34.76 crore), and Vedanta ( Rs. 34.14 crore), were also in pack.
Bajaj Finance and Bajaj Finserv: Plays an important role in financial services
Bajaj Finserv and Bajaj Finserv have been excited on the stock market and may remain so in the next leg of the re-form as its businesses from lending to insurance are showing strong growth. Both the stocks are at high on a day when the Nifty ends above 10, 000 reflects their acceptance among investors plays an important role in the field of financial sector. Bajaj Finserv is the holding company of Bajaj Finance. Bajaj Allianz life insurance and Bajaj Allianz General Insurance provides multiple exposures to investors in the fast run growing businesses. “We stay positive on Bajaj Finserv due to sustained healthy performance of Bajaj Finance, strong growth in general insurance business and gradual traction in individual new business premium,” said by ICICI Director in a report. It has targeted Rs.5, 170 per share, which was closed at Rs. 4, 951 on Wednesday. 22 per cent increase in consolidated net profit at Rs. 655 crore during the first quarter ended June 30, aided by growth in NBFC and general insurance business.
DHFL has raised Rs 125 crore by allotting NCDs
Home loan firm Dewan Housing Finance has raised Rs. 125 crore by issuing non-convertible Debentures (NCDs). The company has announced earlier that it is going to issue secured redeemable NCDs amounting to Rs 100 crore. "The Members of the Finance Committee of the Board of Directors have at their meeting held today allotted 1,250 secured, redeemable, non-convertible debentures of face value Rs 10 lakh each ('NCDs'), aggregating to Rs 125 crore," the lender said in a BSE filing. The housing firm last week reported a 29% rise in net profit for the quarter ended June and reported a 27% rise in net profit for the entire 2016-17 compared to the previous financial year.
ICICI bank reporting Q1 results today. Here is what the experts are saying
ICICI bank is expected to report a 7-8 percent rise in net profit for June quarter. The lender is seen reporting 8-10 percent net interest income. The brokerage expects the pace of incremental slippages to decline. The brokerage Centrum Broking expects the bank to report a 7.2 per cent rise in net profit at Rs 2,392.50 crore. “We expect ICICI Bank to report 9.8 per cent growth in NII led by 6 per cent growth in loans and further improvement in margins to 3 per cent. Loan growth would continue to be driven by strong traction in its retail portfolio,” the brokerage said. Gross NPA may drop for the quarter, “given the resolution of one of the largest stressed account. It could also release some provisions and a reduction in watch list exposure,” it said. The brokerage sees growth in loan segment around 8-9 percent but net income margin will decline due to high NPLs.
Axis Bank net profit dips by 16% on higher provisioning
The third largest private sector lender Axis Bank reported a 16.07 drop in the net profit ended June 30, 2017 on the back of non-performing assets. The gross slippages were Rs.3519 Crore of which Rs.2317 Crore from the corporate book and the remaining from the retail loans. Jairam Sridharan, the chief financial officer of the bank said that they have increased their standard asset provisions higher than the regulatory requirements from 0.4% to 1% as a matter of caution. The stock closed 1.94% higher at Rs.544.65 on the BSE. Management expects corporate loan growth to produce double digits over the upcoming years. The total advances of the bank grew slower than its private sector partners. The corporate demand came from working capital demand from companies and is expected to stay that way for a few more quarters. Axis bank has relatively reported a higher growth in bottom line in the first quarter of 2018 by a strong growth in other income and relatively lower expenses.
Fincare Small Finance Bank plans to construct strong SME, self-employed base
Karnataka based company Fincare is looking to build a strong SME and self-employed base for both assets and liabilities. “Overall we want to have a strong SME and self-employed base for lending as well as deposit over a period of time,” said Rajeev Yadav. The bank is spread over seven states. The bank is looking for an opportunity to build a secured loan book in order to minimize risk. In the next 2-3 years this will comprise 50% of total asset book. Currently, 93% of their book comprise of microfinance loans. “The path to become more secured book has accelerated for all institutions among secured portfolio, 30% will comprise of loan against property and rest will be loan against gold, affordable housing etc.” said Rajeev Yadav.
JM financial group Net escalated to 49% to Rs 128.2 crore
Leading brokerage and non-banking financial service provider JM group reported a jump of 48.90 percent in its net profit to Rs 128.19 crore. JM Financial Group managing director Vishal Kampani attributed the numbers to healthy growth in the company's credit business arm. "Our fund-based businesses continue to gain traction. We remain selective and are focused on asset quality in our lending business. Our ARC business remains focused on resolution of the acquired assets and selectively adding new assets," said Kampani.
The lending book of JM Financial Products rose to Rs 6,216 crore and the lending book of JM Financial Credit Solutions rose to Rs 5,678 crore.
Kampani also said that the company closed five deals consisting of 32 accounts and the quarter too saw recovery from both restructured account as well as settlement accounts.
GSTN portal begins invoice uploading for businesses
New Delhi- The GST network has started receiving uploading sale and purchase invoices of businesses generated post Goods and Services Tax launched on July 1. GST network is the company handling the IT backbone for the new Tax regime. The uploaded invoice data can be saved at the portal and GST system operated by GSTN will auto populate the invoice data of the respective buyers, said by the company in statement. The GST is come into existence on July 1 and so far, the Goods and Services network has been facilitating registration of businesses. “If the taxpayer has limited number of invoices, he can directly enter the details at the GST portal. However this would not be practical if the number of invoices is in hundreds or thousands,” it said. In respect to help Taxpayers GSTN has developed a tool which can be downloaded from the portal and installed on the taxpayer’s systems to prepare the return in GSTR-1 it can be formatted without connecting to internet.
Indiabulls Housing Finance net profit rises to 25%
Indiabulls housing Finance reported a 25% year-on-year rise in its consolidated net profit. The net profit stood at 734 crore. “The home loan book has grown to around Rs 54,000 crore, an increase of 43% year-on-year. Almost 76% of our home loans are of Rs 30 lakh or below,” said, Ashwini Kumar Hooda, deputy managing director of Indiabulls. He added that he expects to sustain a loan growth of 30% and plans to raise Rs 35,000 crore through bonds. The lender said its loan disbursals grew to Rs 6,799 crore, up by 29%. “Disbursal growth is propelled by growth in mid-income affordable housing segment. According to recent data from National Housing Bank on home loan disbursals for FY17, disbursements of home loans of less than Rs 25 lakh in value — the segment IBHFL caters to — grew 33% over the previous year, pushing growth in overall home loan disbursals to 23%,” Indiabulls said in a statement.
Proposal made to refund Central GST on the goods made in Excise free zones to help Pharma, FMCG and auto companies.
A proposal to refund GST on goods made in excise free zones in North East, Himachal Pradesh and Uttarakhand is all set to be presented in the cabinet. This will be a benefit for the companies such as Cipla, TVS Motors, Dabur and Dr.Reddy that invested in those areas because of the tax break. Such exemptions have largely been scrapped under GST so as to create an equal market across the nation with very few interstate variations as possible. The EPC has approved the decision and it is said to benefit the automobile and the FMCG goods companies in that area. Many big names have their plants in the excise free area, such as Cipla, Dabur, Dr. Reddy, Johnson and Johnson and Wockhardt. The plan offers to refund 58% of the central GST paid by the manufacturers in the erstwhile excise free zones. Companies have to pay GST by the 20th of August and they can claim refunds later according to the guidelines put forward by the new scheme. Tax benefits are a matter of concern for the tax payers for the said mechanism. Companies which will be benefited with the new mechanism are eager for its implementation. GST was put in place on the 1st of July replacing 17 central and state taxes.
Jewelry designer loses 40k to a bank telecaller on sharing details of bank account
A jewellery designer aged 32 lost Rs.40000 to a bank telecaller after she disclosed all her bank account details. The telecaller lured her with a promise of providing a reward point gift of Rs.9999 on purchase on her credit card of the private bank. As the asked the caller to credit the reward points to her credit card account the telecaller said that the transaction could not be done and it would require another bank account. The woman then asked the telecaller to cancel the process of transferring the credit card points to which the caller said that stopping the process would penalise her with an amount of Rs.18000 so she gave the telecaller the details of her bank account. The woman said she received 6 OTPs and money from her bank account was transferred. A case of cheating has been lodged against the unidentified caller.
Kotak Mahindra Bank’s loan growth makes up for the loss of profit
The growth in the loan sector of the Kotak Mahindra Bank is sure to make up the minds of the investors who were disappointed on the lender for missing the Street Estimates of the profit. It reported a profit of Rs 912 Crore, which is a 23% growth from a year ago period. The core income of the bank grew at a sedate pace of 17% Rs.2246 Crore although the growth in the loan sector is 18% higher in the second consecutive quarter. The comments of the management on the outlook for loan growth and asset quality are reassuring as well. The gross non-performing assets also rose to 2.6% for the quarter and this is a sign of caution, which is easily recognizable. Much of the troubled assets emerge from the ING VYSYA book and the bank management of Kotak Mahindra explained that the lender has exposure 4 troubled accounts listed by RBI for quick resolution. With the exposure to these accounts, the bank also needs to keep a check on its asset quality to justify its valuation.
ICICI offers personal loans up to Rs. 15 lakh via ATMs
ICICI bank is selling personal loans of up to Rs. 15 lakh through its ATMs. The lender will per-qualify select customers for personal loans. Such customers will get a message on the ATM screen after completing a transaction. If a customer chooses to go in for the loan, they can avail a five-year personal loan of up to Rs 15 lakh and the amount will be credited instantly into their account. The customer will be informed about the details like, interest rates, processing fee and EMIs before completion of the transaction. "We believe this is a compelling proposition as it is a completely paperless procedure and instant disbursal of funds through the ATM," ICICI Bank executive director Anup Bagchi said. This will help the customers receive money more conveniently.
DHFL reported a rise in profit by 29% in the first quarter.
Dewan Housing Finance Corporation reported a rise in profit by 29% in the first quarter of the year ended 30th June, 2017 as against Rs.201 crore during the same period last year. The total income from operations also increased to Rs.2407 crore in the June quarter from Rs.1955 Crore in June last year as said in a Bombay Stock Exchange. Home loan sanctioned by the company during the June quarter which also increased by 23% to Rs.10862 crore against Rs.8800 crore in the same period last year. Disbursement also increased to 33% to Rs.8236 Crore. The company has also reported an increase in net profit by 27%. It increased to Rs.927 Crore for the year 2016-17 compared to Rs.729 Crore in the previous financial year. It claimed an income of Rs.8857 Crore for the last financial year compared to Rs.7300 a year ago.
Carlyle to Invest in State Bank of India’s Credit Card Ventures
Global private equity firm Carlyle Group will buy 26% stake in State Bank of India’s credit card ventures since GE capital decided to exit the companies. Currently SBI has two credit cards joint ventures, SBI Cards & Payments Services Pvt. Ltd and GE Capital Business Process Management Services Ltd. India’s largest lender has now increased its stake to 74% in both ventures, and Carlyle is acquiring the remaining stake.
Dinesh Kumar Khara, managing director in charge of associates and subsidiaries at SBI, said the cards JVs are looking to capitalise on the growing opportunities in India as cashless transactions increase. Carlyle is investing in SBI Cards through affiliate Carlyle Asia Partners IV, its fourth Asia buyout fund. This is Carlyle’s second venture in India. It had earlier acquired a 49% stake in PNB housing finance. Meanwhile GE is more focused on its high-value industrial business.
April-June net profit of Bajaj Finserv grows by 22%
The holding company for various financial services businesses under the Bajaj group, Bajaj Finserv on Wednesday claimed that its net profit grew 21.9% in the first quarter of 17-18 on the basis of good performance in its insurance and financing business. Bajaj Allianz General Insurance increased 61.4% to Rs 213 Crore and Bajaj Allianz Life Insurance stood at Rs196 Crore. Rahul Bajaj, chairman of Bajaj Finserv said that there will be no change in the insurance joint ventures with Allianz SE. Bajaj Finserv holds 74% stake in Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company holds 57.8% stake in Bajaj Finance. Shares of Bajaj Finserv ended at Rs 4579 on Wednesday. Bajaj has said that the two partners share a healthy relationship and will continue to be with the Indian Management.
Canara bank is hoping for an enduring springs in 2017-18
Canara bank’s gross non-performing assets ratio has climbed to 1.56% during net NPA ratio increased to 7.09% from 6.33% in the previous quarter. The bank cannot blame for its optimism because most of the lenders are now left with doubtful thread of hope after bad loans damaged their books for the past two years. The Bengaluru-based public sector lender reported a net profit of Rs.251 crore for the quarter ended June. For Canara Bank 2017-18 supposed to be year of recovery and growth, it says in its results presentation to analyst and investors. The growth in net interest income has improved to 17.59% in the June quarter from little over 14% in the previous quarter should also comfort investors. It come simultaneously improved loan growth of 6.7% especially in slow moving quarter. Canara Bank believes that some digging on its assets quality should obliged, before investors begin to bet on the recovery. The headline bad loan ratios on a gross and net basis are likely to show that the lender’s troubles have increased.
Merger of big banks may not appear to be a cure for weakness in banks
Government is looking for merger of 21 public sector banks to convert into 10 to 12 in the medium term.
The government is working on creating a handful of big global banks, more efficient banking universe consisting of only 3 or 4 entities. However bank union feel that this will not help in strengthen the balance sheets of the beleaguered public sector banks. According to CH Venkatachalam, generally Secretary of all India Bank Employees’ Association (AIBEA),”what purpose will it serve? What kinds of banks are being looked at for the merger? There are many questions. The weakness in the banks is due to bad loans. The solution is by resolving those and getting recovery”. Reports show that a government is looking at merging of 21 public sector banks into 10 to 12 banks. Probably large public sectors banks like Punjab national, Bank of Baroda, Canara Bank and Bank of India could absorb other smaller banks. The reason behind this is the growing number of banks.
Reliance Home Finance June Quarter PBT rises to 45 Crore
New Delhi- Reliance Home Finance has claimed that its profit has risen by 50% to 45 Crore for the June quarter of the current fiscal year. In the previous year the company’s profit before tax was Rs.30 Crore. It was said in a release that the total income for the quarter rose by 58% to Rs.374 Crore. The 100% fully owned subsidiary of Reliance Capital said it is on track to be independently listed on the stock exchange within a couple of months. “We expect robust changes in the loan book this year driven by affordable housing and loan against property segments our distribution capabilities through presence in more than 100 locations as said by Ravindra Sudhalkar ED and CEO, Reliance Home Finance PTI KPM ABM.
Older customers are adopting digital payments way faster
According to a report by PACE-FIS older consumers make 63 more digital transactions in FY17, compared to 46 transactions in FY16 which is high as compared to youngsters. Gen Y made 60 transaction online compared to 50 in the year-ago. Gen-X seems to have been the slowest as the number of transactions increased to 59 digital transactions from 53 earlier. More Indians preferred credit cards for necessities and aspirational buying over mobile banking, the survey showed. Many preferred paying using their credit card when it comes to utility bills, travel and online shopping. People are going towards financial management apps with about 56% using such apps to pay bills on time; while 51% used such apps to track their spending; while another 48% used the app to plan their budget and maximise savings.
Reports also stated that Indians prefer either avoiding the credit cards or to have multiple cards. "Only 18% of respondents use only the credit card used by their primary banker. The other 37% use credit cards issued by all. While the majority 42% don't use credit cards at all," said the report.
SBI launches a reality website to provide assistance to home buyers
SBI has taken yet another step towards the boosting of the home loans as a step towards encouraging those lenders who are facing billions of corporate bad loans. The bank has launched SBI Realty a one stop integrated website for home buyers which provides operational ease over almost all processes and helps the lenders to expand the home loan credit. SBI realty will provide customers with an opportunity to choose from 3000 approved SBI projects across the nation covering 13 states which include 30 cities. There are approximately 9.5lakh home units available on the website the customers can compare them to their previous trends. The highest demand comes from houses ranging from 15lakh to 50-60lakh. The SBI reality websites showcases all the projects approved by SBI.
Bhopal: After a number of farmers commit suicide, government reads the act against moneylenders.
The Hoshangabad division commissioner Umakant Umrao has stated that anyone can be freed from the clutches of the money lenders on the orders of the administrative orders. All this has come after a horde of farmers have committed suicide. While addressing a meeting with the MP moneylenders he said that any licensed money lender if found guilty of violating the rules will be penalised under the Act and fined with an amount which may extend up to Rs.2000. Any person who is a victim of the atrocities of the money lender can lodge a complaint at the tehsil level control rooms which are established for the same purpose. He also stated that once such an application is received the authorities should investigate what have been the principal amount of the loan, the tenure of the loan, the rate of interest and also the outstanding amount along with the economic status of the farmer and if the money lender is not licensed the money need not be returned. Also the interest rate need should not exceed the principal amount. The authorised money lenders should get the resolution approved by the Gram Sabha and then register themselves. After registration gives a loan to any person he needs to issue a slip stating the amount, details of movable and immovable property, rate of interest etc. SDMs should also keep an eye on the registration of the property and probe whether it is an attempt to grab the property if it is registered after 5-6 years.
Online Mini Cash Loan launched by Home Credit
Bringing a transformation in the small size personal loan business by increasing access to credit for technology savvy and mobile population, Home Credit India Finance Pvt Ltd is one of the India’s fastest growing Non-banking financial companies (NBFC) and it has launched an innovative and one of its kind online Mini Cash loan across the country. Targeting customers who need to fulfill their urgent or small requirements or products which are there in shopping list, the Mini Cash is available to applicants ranging from Rs.1, 000 to Rs.10, 000. A transform feature of this loan is that you can sanctioned within 10 minutes of completing online application and without advice of your loan agent or visiting to a branch, no physical signature is required. The loan amount is directly transferred to borrower’s account within a day through RTGS and NEFT electronic payment system. The only document is required is Adhar card as identity proof. Only in case if current residential address is different from the one mentioned in Adhar card then applicant need to submit proof of address. These small size loan designed keeping in mind the ease of application and quick acceptance. From the time it have been launched around 58, 000 registrations for the Mini Cash Loans.
Changing the pattern of lending business
Mumbai- We Indians are on second number when it comes to big fat and royal wedding. Wastage of resources is now taken to next level. For those who desire for destination wedding or stunning dress and makeup by celebrity designer’s, or gourmet food for visitors Tata capital offers its first kind of ‘wedding loans’ to make wedding day extraordinary and memorable. Applicant can borrow up to Rs.10 lakh at a steep interest and at convenience. There is no difference between personal loans and wedding loans but Tata capital is targeting customers in late 20s and early 30s. “Borrowers are people who can afford to get married, but are looking for a lifetime experience to make the wedding special”. As per the company’s internal studies and the mind-sets were changing and as the wedding experience lasts for lifetime, customers were open to indulging a bit more, provided there’s liquidity. These are unsecured loans therefore conventional banks are not comfortable with providing loans to them who do not own a bank account with them, but the Tata capital neglected to expand business. NBFCs started in year 2007 it developed as full service non-banking lender with an asset book with access of Rs. 52,000 crore within a decade.
Essar Verdict can shatter Urjit Patel’s war against loan defaulters
The Governor of RBI Urjit Patel can rejoice as his most audacious plan for cleaning $19 million bad-debt passed a legal hurdle on Monday. The judgement of Gujarat high court in Essar Steel India Ltd. vs RBI is so unflattering that Patel is now wondering that the victory is worth celebrating or not. RBI in June asked Indian lenders to initiate bankruptcy proceedings against 12 large corporate accounts but Essar Steel, objected to its inclusion in that list of the distressed dozen, and termed the central bank's directive as "hostile, arbitrary and unreasonable."
The court dismissed Essar Plea but came hard on RBI too for asking the tribunal to accord priority to the top 12 cases. “The banking regulator has no business offering "advice, guidelines or directions to judicial or quasi-judicial authorities in any manner whatsoever. It would be appropriate for RBI to see that the benefit of all its schemes is equally offered and extended to all without any discrimination." The order said. The sentence has the power to allow debtors to hang on to their assets indefinitely. Patel will not find it easier to save capitalism from capitalists.
Landmark bankruptcy ruling: wealth of personal loan defaulters can be now auctioned
Mumbai- Promoters cannot control the liquidation of personal assets by simply filing for liquidation that indemnified the firm against all legal proceedings will have rich promoters potential problems, an order passed by bankruptcy court. Orders passed by court for lenders to go after the personal properties of M/s Schweitzer Systemtek India however the voluntary bankruptcy proceedings were brought by the company to protect the promoter’s private property from liquidation. While acknowledging the case under the insolvency and Bankruptcy Code (IBC) the court noticed that personal assets of the promoters were ledged with the borrower and were not part of the corporate debt and hence external side of ambit of a moratorium. Under IBC, once the company is registered, all legal course of action against the company under different jurisdiction and courts come to a stop until a resolution process is completed by maximum 270 days. The ruling set an earlier event for many rich borrowers who may go for IBC to prevent the liquidation of their personal with pledged with lenders. The judge MK Shrawat observed,” Sarfaesi Act (Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act) may come within the ambits of ‘moratorium’ if an action is to foreclose or to recover or to create any interest in respect of the property that belonged to or was owned by a corporate debtor's, otherwise not”.
How do we avail SBI loan against mutual fund units?
The biggest lender of India, SBI has come up with the facility of providing loans against mutual funds. In emergency you can leverage your investment in mutual funds and also get a loan against it. The loan can be availed without having to liquidate your investment. The borrowers have to pledge their mutual funds to the lenders and they cannot redeem these funds during the tenure of the loan. Details of SBI loan against mutual funds
Only 7 per cent increase in transactions through cards after demonetisation
New Delhi- As a result of demonetisation there is increase in transactions through debit and credit cards by 7 per cent, as against a sudden upward movement of over 23 per cent in overall digital transactions, top government officials said to the parliamentary panel. Administrations from different kind of ministries gave a presentation to the parliamentary standing Committee on Finance on ‘Demonetisation and Transformation towards Digital’. The Digital transactions in all manners increased by 23 per cent to 27.5 million in May 2017 from 22.4 million in November 2016, according to the presentation given, a copy of which is present with PTI. A highest jump was observed in transactions through UPI, from one million per day in November 2016 to 30 million in May 2017. Unified Payment Interface (UPI) is a format that powers number of bank accounts into a single mobile application for smooth and continuous fund routing and merchant payments into one hood. Transactions through IMPS doubled 2.2 million from 1.2 million during the period under purview, as stated data shared by the government administration. The significance increase in digital transactions was witnessed in the case of plastic cards, as the increase was only 7 per cent from 6.8 million in November 2016 to 7.3 million in May this year.
NBFCs all set to report best Q1 performance after many years
The non banking finance companies are all set to generate 15%-30% rise in earnings boosted by a rise in mortgage lending and an increase in demand in farm equipment. The regular monsoons and farm loan waivers have lifted the expectations of the rural economy. The first quarter is expected to be driven by high growth induced by retail housing, strong collections from farm sector etc. The housing finance companies report for a profit about 17% to 20% due to a low cost of borrowing. However analysts have reckoned that there will be a decline in the cost of funds driven by extreme liquidity. While HDFC is expected to expand in the commercial sector LIC is likely to tap into the developer and loan against property. After demonetisation analysts see improving trends in growth across product segments in NBFCs. Bajaj Finance is expected to deliver 36% growth. All NBFCs excluding Bharat Financial are expected to show a healthy growth rate as said by Motilal Oswal.
Yes bank all set to digitize the business of Retail loans using AI power bots
Yes bank India’s fourth largest private sector bank is all set to digitize its retail loans and thus go paperless. This will help the bank in process automation and thus reduce the overall cost of the bank. Earlier the process of availing the retail loans involved the submission of the documents and the credit bureau’s approval but and the entire process would take around 7-10days but with digitization the entire process would take about 30 minutes and with digitized operations the customer experience will be enhanced with the help of AI Chatbot. The bot will enable the retail operations to work in a flow thus enabling the bank officials to connect to their customers with the shortest possible turnaround time with the help of devices like mobile and popular messaging app. The Chatbot helps the customers to complete the loan agreement with an e-signature and thus enable the customers to have an end to end digital journey. This will cater to the needs of the approximately 2.5lakh customers by this end. In a world where the operations of the banks are continuously being digitized, Yes bank has constantly strived to make processes simpler for customers as said by Pralay Mondal, Senior Group President, Retail and Business banking, Yes Bank.
YES Bank chase for global partnership to grow fintech landscape
Mumbai- YES bank which runs start-up programmes to develop more quickly called YES Fintech is now completely looking for global exchange partnerships to help Indian start-ups gain access to developed markets in terms of business and investments. The Malaysian government has taken initiative to tie up Bank with MAGIC (Malaysian Global Innovation & creativity centre). It is also similarly focusing for partnership with the U.S, Sweden, Norway, Singapore, the UK and Israel over the next few years. MAGIC plans to invest in some of the Indian fintech start-ups. The Bank’s MD and CEO Rana Kapoor said
Robot Lawyer to Fight Landlords, Credit Card Fraud
The “world’s first robot lawyer” will now be able to tackle legal disputes related to landlords, credit card fraud and harassment at work places all free of cost. The online tool which was developed by British student Joshua Browder has been upgraded to fight legal disputes in 1,000 different areas. These include fighting landlords over security and house repairs and also report fraud to their credit card agency. "There's so much exploitation going on where landlords aren't behaving properly. I'm really excited about how it can help people, I really hope it will help people stand up for their rights for free and instantly," said Browder. Users need to type their problems into the ‘DoNotPay’ website to get robot advice. The tool can fight parking tickets in just 30 seconds. At current, robot lawyer can only solve problems that involve a single document such as filling out a form or writing a letter. Browder is now planning to develop the tool to handle more complicated process.
Necessary precautions to be taken before availing a Reverse Mortgage Loan
The Reverse Mortgage Loan was introduced in India about 10 years ago for the betterment of the lives of the senior citizens who own a house. RML will help these citizens to fix their food, medicine and repair of the house. The minimum age to apply for an RML is 60 years and the age limit for spouse in case of a joint loan is 55 years. The applicant must have his property to avail an RML. But to avail this facility one needs to be aware, smart and cautious while dealing with loan providers. There are usually 2 types of RML available one which is the normal one and the other one is RMLeA (Reverse Mortgage Loan enabled Annuity). Usually banks offer 40-50% of the market value of the property, in case the lender is making a promise to provide more you should think twice before applying for the same. There are no restrictions regarding the repayment of the loans the borrower can pay the loan as and when possible. However without selling of the property it can be released by the legal heirs of the borrower by paying accumulated interest and principal amount. The government has exempted the RML under the Finance Act, 2008. The Reverse Mortgage Loan is an excellent option for the retirees who are in search of a regular source of income.
Central government to make an appeal to the public sector banks to promote housing loan scheme for urban poor
New Delhi- The Union housing and urban affairs is unhappy with public sector bank’s high interest subsidy scheme for urban poor. The ministry has ordered financial services department to direct these banks to aggressively promote the initiative.
Under credit Linked Subsidy Scheme (CLSS), 75% were serviced by the housing finance companies whereas public sector contributed only 12% of the total beneficiaries. Under PM Awas Yojna for urban, out of the 21 lakh affordable houses sanctioned till now, 43,166 beneficiaries from economically weaker section and low income group have been disbursed interest subsidy of Rs. 824 crore.
This came up while review meeting chaired by housing Urban affairs secretary Durga Shanker Mishra on Tuesday. Under the CLSS, this was made applicable to middle income sections from January 2017 informed by officials to secretary, 250 beneficiaries were given interest subsidy of over Rs 5 crore.” Another 10,000 applicants are under process for disbursal of the interest subsidy,” said by officials.
Secretary suggested that RBI may be requested to earmark specific share of priority sector lending for affordable housing. As per the norms, PSBc have to ensure 40% of total lending to priority sector,” an official said.
Medical loans: An alternative financing option for healthcare
The rising cost of medical treatment and widespread proliferation of diseases has lead to the budget of the household to go haywire. The need to finance these issues requires us to avail medical loans which are unsecured and these loans can be availed on the submission of income proof. As there are a number of lower and middle class families in the country these people have the tendency to apply for personal loans from the bank. These loans come with heavy interest rates whereas the medical loans come range from Rs. 20000 to Rs. 500000 and have tenure of 6 months to 1 year which can be availed at 0% interest. NBFCs and fintech firm provide medical loans in 2-3 days which requires the depositor to deposit 2 EMIs and the balance amount in 10 instalments. A salaried person who wants to avail a medical loan should have a salary of Rs. 20000 and should submit documents like pan card, Aadhar card, salary slip and bank statements. The Cibil score in this regard also plays an important role.
RBI may cut Interest rates on Home, car loans
RBI’s next monetary Policy Committee meet on August 2 may bring some good news for the consumers. It was reported that retail inflation has come down to 1.54 percent in June and may prompt the RBI to go for a rate cut next month. This will allow banks to offer loans to consumer at lower interest that will increase the market demand. "The last time we saw such inflation -according to slightly different CPI (IW) - was in 1999 and before that in August 1978," Chief Economic advisor Arvind Subramanian said. Inflation in the previous month -May this year- was 2.18 per cent.
Rate cut will help consumers in many certain ways
Rs. 2000 Crore of loan disbursed by Square Yards’ digital lending platform
Real estate transaction is earning massive fruits in online lending business. The firm’s digital lending platform square capital has facilitated more than Rs. 2000 crore of loan disbursement. Square capital which contributes around 10% of square yards’ revenue currently facilitates about $30 to 40 Mn.
"Eventually we will bring property developers onto the same platform and offer seamless real estate and mortgage services to all players in the ecosystem including customers, banks and property developers," said Tanuj Shori, Founder & CEO of Square Yards. Square capital was initially launched to capture home loan business originating from square yards’ but is now capturing the organized market share in tech enabled lending distribution. Shori is expecting square capital to reach a monthly loan disbursement target of Rs 500 crore by the end of financial year 2018.
Rupay credit cards are already in operation: NPCI chief A. P. Hota
Managing director and CEO of National Payments Corporation of India, Mr. A P Hota said that Rupay credit cards are already in operation since June 15. “Rupay cards have already been launched for all practical purpose 10 banks currently are issuing these credit cards”, Hota said.
Eight public sector bank, one private sector bank and one co-operative bank are issuing Rupay credit cards. "We are not focusing more on the formal launch, but focusing more on technically enabling more and more banks in credit cards," Hota said.
"Our officials are visiting the banks to technically enable them to issue Rupay credit Cards. We are making them aware of its benefits, and how better they are compared to Visa and MasterCard," he added.
Each bank has issued between 50 and 100 Rupay cards but will increase numbers according to the requests that may come their way.
Hinduja Leyland Finance all set to raise Rs200 crore from the shareholders
Hinduja Leyland Finance backed by Ever stone capital is planning to raise about 150-200 crore capital from the shareholders in the next 3 quarters as said by Sachin Pillai, Chief Executive of the Hinduja Leyland. It was said by Pillai that the shareholders will be infusing money towards the growth of the firm according to their proportionate holding. Various Hinduja Group companies hold about 86% shares of which 57% include Ashok Leyland while private equity firm has 14% interest. The non bank firm which is Chennai based Rs 14000 Crore loan assets of which 81% is contributed by vehicle financing, 10% contributed by loans against property and 9% is built by buying portfolios from another company. The firm has brought loans worth Rs 107 crore from smaller financial companies in a single pooled loan issuance. It has been said by Pillai that the lender would like to have 80% of the portfolio from vehicle financing in the future and 40% from the commercial vehicle financing. SEBI had given an affirmative reply to the IPO planned in June last year however it was withdrawn by the company 12 days after the deadline. The board of directors on June 16th withdrew the Draft Red Herring Prospectus from SEBI as said by the company in a stock exchange filing.
Wells Fargo cuts down auto loans as market becomes stable, risks can be avoided
Wells Fargo which seems to be No. 2 U.S provider in the sector of auto loans less than a year ago, has already slashed down its quarterly rates by 30 percent over the nine months leading into March 31, as stated in May 11 company presentation.
New work- Wells Fargo and company is reducing and remolding its auto lending in response to growing stress in the market. Banks also push for more centralized risk controls.
Wells Fargo which seems to be No. 2 U.S provider in the sector of auto loans less than a year ago, has already slashed down its quarterly rates by 30 percent over the nine months leading into March 31, as stated in May 11 company presentation.
Wells Fargo began curtailing its auto exposure beginning last year. It cut the share of subprime loans in the auto portfolio to over 8 percent in the first quarter from over 11 percent a year earlier, according to a company presentation.
Wells Fargo and some lenders for achieving growth began to embrace borrowers with unstable credit. However in 2015 auto default rates began rising above other types of consumer debt, according to data gathered by Cox Automotive forcing some of the lenders to tighten standards and move away from the market. Wells Fargo began reducing its expenses since last year. It also reduced the share of auto portfolio from 11% to 8%.
ICICI Bank launches its branch at Jehangir Chowk.
On Tuesday ICICI Bank opened its branch at Jehangir Chowk, Srinagar and was inaugurated by the Deputy Commissioner Farooq Ahmed Lone. The bank officials said that the bank offers a wide range of banking products and services. There are around 37 bank branches in Jammu and Kashmir which are well equipped with technology without the need of further improvement. The ICICI bank was the first one to launch the debit card. The ICICI bank is an Indian multinational and financial service provider with its headquarters in Mumbai. The regional head of the bank says that the bank provides retail loans which include credit loan, auto loan, vehicle loan, credit card, gold loan which provides good rates in areas of business and personal loans. The bank has a good range of services for investment and they are digitally very active.
Specialist lenders attracted by education loans
Education- Educations loans lend by banks have grown by few 2.7% in FY17 as much as the half of the growth rate of all loan. Specialist lenders are developing very quickly and private players are looking for the same segment. Education specialist like HDFC Credila and Avance have perceived growth rates from 40% to 70% in disbursement even as new age lenders like In-cred Finance are showing the interest in the same sector. Co-founder and CEO of HDFC Credila, says that there is great demand. The shift of government interest to private schooling has resulted in private sectors focus towards the tertiary education. The cost of attendance, fees and other charges are rapidly increasing on global level which in out of the budget of middle class.
HDFC Credila has disbursed Rs.1300 crore which is quite low compared to Rs.1800 crore for the education loan portfolio of banks.
According to PSU bank officials the main two reasons for defaults are engineering and management institutions increased rapidly but the quality of education provided by them is not up to the mark. Number of students after their graduation they turn into NPA. “A lot of education loans are probably camouflaged as personal their loans or loans against property”.
Tata Capital Chatbot increases lead generation by 600%
Tata capital is seeking competitive advantage from the IT industry in a very good manner. The launch of the “my loan” app using digital, social and financial data along with machine learning has been brought great success to the TATA Group. Tata capital has also entered the online car loan segment which not only helps to find the right car but also the appropriate car loan. The recently launched Tata Capital Chatbot provides financial assistance to all those who have queries about the financial products. It can handle over 70% of the queries of the customers including sales and after sales services. Before the launch of Chatbot there were major challenges like not available 24*7, re-recruitment and retraining ensuring that agents manage the chat well. The Tata Capital Chatbot has added speed and quality to the business operations which has been reflected in the satisfaction score which is 75%. About 3 weeks ago, Automatic Robotic App which is focussed on Personal loans products and helps the customers to input the data in a chat based format. In a short span of time the app has led to an increase in customer service by 5X to 6X increase in customer response. “We have has seen a 600 % increase in the lead generation after the launch of the robotic automation bot,” as said by Veetika Deoras, COO of Tata Capital. With an increase in the number of initiatives the company is striving to be the cloud first company. The machine learning, Robotic process automation, AI, OCR and facial recognition technologies are the next missions of Tata Capital.
Canadians to gear up for higher borrowing rate after cheap years of debt
Canadians are being warned about the rise in interest rates, which may go up for the first time in seven years if the Bank of Canada decides to increase the rate of interest. All this is happening when the economy is experiencing inflation and also the renegotiation with the North American Free Trade Agreement. With the economy and labor markets growing, Canada is expecting a second hike by the end of the year. C$1.67 is owed by every Canadian for an income of one dollar and more than 70000 consumers would struggle with even a quarter point hikes in interest rates. ’’20 years ago an average person asking help would owe C$12000 where as today even C$100000 loan without security is uncommon ’’ as said by the president of credit counseling society, Scott Hannah. The 5 year yield has soared more than 50 basis points as per the comments of the Bank of Canada officials. The situation of the households is likely to change said Frances Donald and even if Bank of Canada holds on the interest rates may rise. The question that arises here is that whether the Bank of Canada plans to stop after two hikes in rates of interest. The tightening cycle will remain for several years and will have an impact on homebuyers, general households and business investors. For those who were ahead of the situation and paying debts the interest rates will be more bearable.
Golden Walking Stick- The home loans available for senior citizens.
Old age is mostly about loneliness and difficult times. Far more difficult problem is when the prices of medical claim rise and insurance cover fails to reimburse it and all this happens when there is absence of regular income. To address this problem NHB (National Housing Bank) in 2008 has initiated a new home loan product known as the “Golden Walking Stick” which provides home loans to the senior citizens above 60 years. It involves pledging the house you live in the bank and in return you receive an amount from the bank without having to part with your house. The maximum tenure of the loan is 20 years and the monthly income on this basis is Rs.50000. Larger amount can be withdrawn owing to medical or house repair reasons. Bank has to bear the risk of declining prices of property and even the borrower has to maintain the house. However it is difficult for senior citizens to surrender their property to the bank also the complexity makes it difficult for them to agree to the terms and conditions of the bank. So this project is yet to take off. Determining the amount of loan on the basis of the property is an international norm. In Canada reverse mortgages are done at 55%, in United States it is done at 50-60% and in Australia it is done at 40%. There are a very few banks which prefer reverse mortgages and rarely sanction more than 15-20% of the value of the property. Keeping in mind the new social scenario it's time government takes positive steps towards needs of the senior citizens.
Man and woman held for duping loan seekers
A man and woman held for duping people for lakhs of rupees in the pretext of providing them with loans without any security. The fraud came to notice when one of the residents of Vijayawada lodged a complaint. The accused identified as Patnam Surendra Baba and Swathi Priya were operating the racket with 3 others by giving advertisements in the vernacular newspapers. After seeing an advertisement in the paper the victim Naidu Ravi Varma contacted Surendra Baba and he promised Ravi Varma to get him a loan at a subsidised interest rate, believing which Varma deposited Rs.45.50 lakh on May 16 for a loan amount of Rs 2.8 crore. A few days later Varma realised that he was cheated by the gang. A cheating case has been registered against the gang and they will be produced in the Vijayawada court. The cops have investigated that the gang has also cheated two others from Nellore for Rs.4 lakh. The accused would be produced in Vijayawada court.
SBI Saving Account: Have to Pay Hefty Amount for Checkbooks, ATM Withdrawal and Buddy App
Now customers need to pay more to banks for banking services such as debit cards, on issuing of chequebooks, cash handling charges and SMS alerts would attract higher tax rates under GST regime.
The Narendra Modi government launched new tax GST system under which all financial will be taxed 18 percent against a service tax rate which was earlier 15 percent.
What does GST mean to SBI customers?
State Bank of India has revised its services charges on ATM withdrawal for users who use app ‘state bank buddy’ effective from 1 July, according to NDTV.
SBI has mentioned that Rs.25 plus GST will be for withdrawals money from an ATM from state bank app. If you transferring your funds through SBI buddy app to saving account then you need to pay 3 percent and plus taxes, said by public sector lenders in a release.
NHB Glance Less Anxious on Loan Rule
New Delhi, July 9, Housing finance regulator NHB is scrutinizing the issue of extending the non-performing assets classification tenure from the current 90- day window, and the main aim to benefit borrowers as well as lenders.
All the advantages and disadvantages being considered before reaching a decision, National Housing Bank (NHB) Managing Director S Kalyanaraman said.
“We are looking to relax the NPA classification window. Whether it is beneficial or will lead to more chaos in the system is being examined. Will they able to pay EMIs in one shot if the repayment is postponed by six months?”
“I can relax but where do I stop. Do I stop at 120 or 180 days? While we want to do something, there is a little bit of a challenge as what is the right thing to do. There are other practical problems which we need to consider. But yes, we are at it,” he said.
If it is not serviced within 90 days it will result into non-performing assets or bad loan.
Mortgage lenders of Hong Kong experiences a thriving in their business
When Horan Fu decided to buy a 500-sq-foot apartment for HK$7.4 million, the developer’s offer of 85% financing was the biggest draw.
“The interest rate could be a lot higher after three years, but there’s also a chance that the interest would still be cheap because finance companies are competing fiercely,” said Fu who works financial services industry.
“There’s risk but there’s also an upside. It’s good investment opportunity”.
Homebuyers like Fu are looking for non-bank lenders at the time when property prices are at a high record and many of the financing arms of developers to get on the boom. According to industry financial and official documents, interest rates do not exceed 60 percent p.a.
The system is acting as a lifesaver for those who find it harder to secure loans, specially mortgages, due to restrictions imposed by the central bank to decrease home prices, which are up 137 percent in the start of the financial crisis in 2008.
This also puts the broader system into risk if the property prices change and the borrowers start to default since many of these lenders, which have been borrowing from bigger lenders for the purpose of raising finance.
“Enforcement action will be taken by the police if there is evidence implementing any money lender engaged in illegal practices,” it said in a statement.
18% GST not to be generated on Credit Card Bills before June 30
On this Friday, Hasmukh Adhia, the Revenue Secretary stated that GST will not be applicable on credit card bill payments before June 30 even if the due date of payment is in July be it a credit card bill or mobile telephone bill. It was further stated that one will have to pay only 15% service tax for bills generated before July and also for traders or vendors of manufacturers who have received their orders and also the bill of the same in June. ‘If the vendor is paying in the month of July for the invoices created in June then those taxes will be applicable which existed in the pre GST period’ as said by Mr. Adhia. Adhia chaired the first GST Master Class which is a series of sessions aimed to assist the taxpayers and traders adopt the new tax regime. He also stated that confusion regarding the interstate trade has to be resolved by stating where the goods are coming from instead to which state their going. He clarified that aggregators like Uber, Ola and electronic commerce operators should register themselves by their companies and not by the individual employees. The process of registration can be done using the PAN card and only one registration number will be provided against one pan card. However this rule has 2 exceptions one is that if the business has a specific markets and second that if the operations are domestic and in specific economic zones. Any changes pertaining to the business details or partnership can be made by the tax authorities as said by Hasmukh Adhia.
World Bank Launches Loan Schemes For Business women
World Bank on Saturday has launched a public-private loan programme to support women entrepreneurs around the globe. This initiative is campaigned by US President Donald Trump's daughter Ivanka Trump. The programme is especially designed to boost the women entrepreneurs in the developing country to fight the norms like uneven access to loans and shaky property rights. The bank announced that it has raised $325 for the projects from numerous countries including $50 million funding from US and other countries like Germany, Saudi Arabia, the UAE, Japan, China, the UK, South Korea, and the Netherlands.
The programme faces numerous challenges in spite of the support of world leaders. There have been several programmes that aimed to help women to grow their business but not have taken off the World Bank’s way.
The programme will work with governments “to improve laws and regulations that are stifling women entrepreneurs,” pushing financial institutions to provide equity to the companies they create, the bank said.
NRI loans bring India a step closer
The NRIs now have a reason to celebrate as their dreams are on the verge of getting a concrete shape, all thanks to the NRI loans. As India is a hub for be it education, business or any other aspect availing an NRI loan that suits their needs in India is just as easy as a click. Speaking of education most of the reputed banks in India offer loans to NRIs for education and not only education but availing loans for business purposes is also tackled with ease. For availing an NRI loan a basic criteria has to be fulfilled and these loans can be used for the purpose of construction, repairing of any kind, buying of plots for residential or commercial purpose etc. With an income of Rs10000 and above any NRI can apply for a loan and the most attractive feature of the NRI loans in India is that the loan can be availed by self and can be made available to others through him/her. A maximum loan of Rs 20 lakhs can be expected by the NRIs in this regard which can be made available through 2 ways either by way of demand or by overdraft. In the former case, the amount is transferred by way of demand to the applicant’s account and in the latter case, the applicant is required to open an account in the loan providing bank. When it comes to repayment of the home loans, the banks do not want the borrowers to feel the burden even for a second. Flexible repayment options are available for the repayment of the loans. Home loans are available at the doorstep of the borrowers these days and their dreams can be fulfilled easily without making them feel the burden of repayment. All this is possible even when the real estate prices are touching the sky.
Yes Bank to offer AI to directly benefit students with small loans
Anytime loans, FRS Labs and Redcarpetup to partner with Yes Bank to acquire technology based solutions for various business such as lending, antifraud and simpler customer onboarding processes. Out of 10, there are 3 startups which are at various levels of working with the Yes Bank. “Partnership is the best way to go forward when it comes to innovative technological advances in banking, While we can bring in scale, these entities can bring in latest technology," said a Yes Bank spokesperson.
Redcarpetup will permit the banks to provide the students with loans and has shortlisted 100 national capital regions that underwrites applicants based on their educational background, social circle etc. The students are provided with products they cannot buy instead of cash and can repay the amount in one to nine months tenure through their internship earnings as said by the co founder of Redcarpetup Sandeep Srinivas.
Anytime loans is lending platform that uses AI to read facial expressions of the students in order to detect the propensity to default. In the last 30 months, over 68 crores have been disbursed to 38700 entities.
“A commitment of 16 crores has been made by AnyTime Loans and with the integration of Yes Bank it has an additional commitment of 6 crores for both personal loans and MSME’s”, as said by KK Jain.
FRS Labs is allowing its customers to open bank accounts and for the same person it is using the face detectors wherein the liveliness of the person is determined to match it with the databases to detect fraudulent applicants. A pipeline for future can be created using these partnerships and also the customer base can be improved as said by the Yes Bank spokesperson.
IDFC merging with Shriram Group is just the right move in the financial Services
Banking firm IDFC group and south based financial service Shriram group are in a process of heading towards a merger. With combined entity covering assets of over 2 lakh crore, there are several qualitative factors that will give stimulation to the business of the combined entity. Here are five reasons to strongly justify the merger.
- The merger is going to grant IDFC bank access to a well-established network in the entire region of south.
- Since Shriram group is all into retail assets, IDFC with this merger will get a huge portfolio of retail assets especially micro loans, two wheeler, personal loans, loan against gold etc.
- This merger will provide the bank huge access to branches and will help building retail deposits, as the bank’s current and saving account is less than 10 percent of the total assets.
- As retail portfolio is growing at over 25 per cent for the industry, which in a way is compensating for the lower growth in the corporate book for many banks, IDFC does not have this luxury because of lower retail liabilities, this merger will act as a balancing act.
- The merger will also bring two insurance subsidiaries and the mutual fund business of Shriram into IDFC fold.
Home loan Agencies demand a Lock in Period on Balance Transfer
Several big home loan lenders have introduced a proposal for two or three years lock-in period on grounds that it is causing undue stirring in their portfolio. Since the home loan interest rates have dropped over the last six years, customers have opted to transfer their principal amount at lower rates offered by competing lenders. However, the restrictions will not be imposed in cases where the prepayment is done with own funds. The beneficiaries of this restriction are mainly the brokers and the agents who earn a fee on the same. Those who are against this move are arguing that that the introduction of a lock-in period is like going back to reintroducing prepayment penalty for customers, which will make the market inefficient and customers will not benefit from the decline interest rates.
A senior official with another leading housing finance company said, “Balance transfers in quick times are an unproductive aspect of the industry. While it does not lead to an increase in the size of loan book for the industry, it only ends up benefiting the agents and brokers who earn fee on such churns,”
Why GST needed to be implemented much earlier?
The effect of GST can be seen in positive light as the founder of beer cafe, Rahul Singh is happy with the introduction of GST, the impact, though for his business, is minimal since 75% of his sales is in liquor which is exempted from the new tax regime.
Restaurants and cafe owner have many several reasons to cheer up for introduction of new GST regime implemented on 1st of july 2017. While the food has been taken into consideration in the new unified tax, liquor remained uncounted by the policy setters.
According to Rahul, GST should have been implemented much earlier “The restaurant industry is the only industry which is paying sales as well as service tax. Thankfully, GST brings it down to only 18 percent, which will bring prices down. The only issue for me is unlike other restaurants, where liquor sale is 10-20 percent; the beer cafes sales are 75 per cent liquor, which is not included in GST. So unfortunately, i have to do double compliance”, Singh says.
Being a big supporter of robust technology driven businesses, Singh said, “After GST the filing of tax will be very easy as everything will now be computerized and the best part of GST is that it will be run by the professionals of Infosys”, he added.
Talking about the obstacles in his business, Singh said, “For us there are two major challenges, finding good quality space and facing high rents in the market. The third paradox is if everything goes well, the government steps in and creates a new surprise for us”. The brand is also planning to introduce its service on international level.
Restrictions on bill payments using Credit Card to be discharged
The restrictions on cash dealings of Rs 2 lakh and above using credit payments have been exempted and will not apply on business correspondents appointed by issuers of prepaid instruments and credit card bill payments as said by the revenue department. Cash transactions of Rs 2 lakh and above was banned by the Finance Act ,2017 however some exceptions were made to this regard. The Income Tax Department has exempted 5 entities from the scope of this section which include receipts from an institution or a company issuing credit cards in respect of bills of other credit cards, receipts issued by a banking correspondent in respect of a banking company or a co-operative society, receipts issued by a white label ATM operator,receipt by an issuer of prepaid payment instruments from an agent and receipt which is not included in the total income under the clause (17A) of section 10 of the Income Tax Act, 1961, have been excluded from the scope of the Section 269 ST. The notification will come into effect from 1st April, 2017 as said by the Revenue department. This move will provide relief to the banking sector as well as the rural sector and also get rid of the hardships faced by these genuine cases as said by the Nangia and Co director Shailesh Kumar. Earlier it was said that the 2 lakh restriction would not be applicable to receipts by government, post office savings banks and cooperative banks. The contravention of the 269 ST would attract a 100% penalty on the receiver of the amount. This move is aimed to curtail the circulation of black money and promote digital economy.
Credit Suisse depicted growth for Bajaj Finance; worried about rising risk too
The global research firm Credit Suisse said that Bajaj Finance is going to experience a strong growth which will be accompanied by rising risk portfolio without proportionate marginal cushion. The firm also said that that with riskier portfolio pushing loan growth, multiple expansion is difficult to justify.
“Risk is also rising within secured products—share of commercial loan against property (LAP) is rising (now 70%) vs residential while spreads fall,” the firm said in its report.
The brokerage firm said that the objective was to grow a loan mix and provides a cost benefit. While this is quite a sensible goal to aspire, the number shows that the progression of the company has been in the opposite direction and the share of unsecured loans has actually grown in last 3-4 years. The brokerage house also stated that even with in-house sourcing and tech adaption, we have not seen any benefits in the last three years.
Now direct selling home loan agents will be under watch in home loan cases
To check if there any case of mis-selling, the housing finance regulator NHB is observing data on home loan transfer and issuing guidelines for direct selling agents in the interest of borrowers, said by top officials.
“We are looking at it (home loan transfer) closely because some of the complaint seems to be emanating from mis-selling. We are also looking at balance transfers, whether it is genuine customer transfers or agents are playing game on it. We have asked for some data which credit bureau will share. One we have it, it will help us to take a call,”NHB managing Directors S Kalyanaraman told PTI.
Overall goal of the National Housing Bank (NHB) is to bring a set of well trained home loan agents who can guide in buying home which is one time investment, he said.
“We want data before, we decide whether it is a systematic risk or we need to do something. There has to be right balance between the customers choice and the balance transfer. The goal is that customers should have the free choice of the institutions. So our goal is not to take that freedom away from customers.”he said. The direct selling agents should not forced borrowers to shift their running loan to another bank for their personal benefit, he said.
“At an industry level, shifting of housing loan from one player's balance sheet to another does not tantamount to growth in the overall housing market. The overriding objective must always be funding incremental housing”. He added further.
Britain’s largest Payment Processor, Worldpay all set to recommend a takeover from Vantiv-US based credit card tech firm.
Worldpay, the largest payment processor of Britain is very close to recommending a takeover proposal from the US based credit card technology firm Vantiv as reported by Sky News. It was reported by Worldpay that it has received rival bids from JP Morgan Chase Bank as well as Vantiv which is boosted the value of its shares.Vantiv and JP Morgan did not immediately react to the emails and even Worldpay did not comment on the same when contacted by Reuters. A deal of 85 billion pounds will be announced by Worldpay with Vantiv on Wednesday as reported by Sky News.A bid was revealed to Worldpay by JPMorgan as said by a media report. The Stock of Worldpay rose by 27.7% has further risen by 4.8% at 428 pence at 1000 GMT leading to a market valuation of 8.6 billion pounds, of the firm, reported by Thomson Reuters. (1$=0.7745 pounds)
Is it mandatory to pay GST Twice for using Credit Card? Know the facts
Hasmukh Adhia, the architect of GST rollout and also the Revenue Secretary took to twitter to get rid of the myths pertaining to the new tax regime and also the belief that a person will be paying GST twice if he/she will be using the credit card to make payments.The Revenue Secretary has clarified the said belief to be completely fake and also made a request to the public to avoid circulating such unrealistic messages without confirming its authenticity. GST has been brought into practice since 1st of July 2017 and has absorbed a number central and state taxes including excise and sales tax. Even in the pre GST period the service tax was not levied on payments made by credit cards, in fact a discount was given by the utility providers if credit cards were used for the payments. Under the GST regime the 15% bracket was increased to 18% for the banking and financial services as for home, auto and personal loan EMIs will not rise. One time costs such as prepayment ,foreclosure charges along with loans taken from credit cards will rise nominally. If the payment is made on time using the credit card then there will be no service tax charged but if the payment is made on a later date then penalty will be charged by the bank which will attract 18% tax under GST and will also increase the overall credit card dues.
Growth in professional loan segment witnessed by bajaj finance
Bajaj finance ltd one of the fastest growing financial company reported a 55 percent dynamic growth in its doctor loans segment. Being an arm of its professional loan portfolio the segment has witnessed the considerable development of Rs 148 crore in march 2017 from rupees 95 crore in september 2016.
Online disbursal of bajaj finance ltd which accounts for 25 percent of its total disbursement also doubled from Rs.8 65 crore to Rs.16.47 in the six month period. The doctor loan segment which is valued at Rs.500 crore of which bajaj finance ltd relish an impressive 35 percent of the total market share.
Bajaj finance ltd which is a subsidiary company of bajaj finserv ltd is now aiming growth of 70 percent in the doctor loan segment FY 17-18.
Bajaj finance ltd has registered a growth of 56% as against the previous year having been able to disburse in the fourth quarter of 2017 a total amount of Rs424 crore.
Say Hello to 7th Pay Commission With Better Investment Ways For Your Revised Salary
Since the Union Cabinet has given a nod for the implementation of the much awaited 7th pay commission, the central government employees will receive the revised salary from July along with an increased HRA. The government has increased the minimum wage from Rs 7000 p.m to Rs 18000 p.m. Central Government employees are advised with different investment schemes post 7th pay commission which will be effective from January 1, 2016. Employees should first think about their needs rather than their wants and should consider spending the amount on paying off the debts and try to close personal loans, car loans, credit cards dues if any.
“People should focus on clearing loans with higher interest rates, typically personal loans and credit to overspend, else you may risk losing the benefits of a salary hike”, Adhil Shetty, CEO of Bankbazaar.com, said.
Employees are asked to relook their tax planning as now they may need to pay higher taxes. People in their late 40s can invest this money in their retirement corpus and can split it into debt and equity mutual funds. If you are a parent, start saving funds for your children’s education in the form of SIP. Invest your money in mutual funds to get tax benefits instead of letting it sit ideal in FDs.
Indostar Capital is all set to acquire ICICI Home Finance
ICICI bank is all set to sell a majority stake in the company for Rs.2000 crore to Indostar Capital merely two years after putting its entirely owned subsidiary ICICI Home Finance on the block, as said by two people who are aware of this development.For a 67% stake in the company Indostar is supposed to pay Rs.2000 crores while the private sector lender will continue to be a minority shareholder in the company with 33% stake under its name.The deal will mark the end of the long selling process of the ICICI home finance which was close to being sold twice but did not succeed due to last minute disagreements.Some of the other interested contenders for ICICI home finance were India Value Fund Advisors, Baring Private Equity Asia and PE funds TPG. As reported by Mint last year, ICICI bank had almost finalised the deal with TPG for a 100% stake and the amount for the same being Rs2200 crore but at the same time IVFA and Bearing PE Asia also offered a higher price of Rs2400 crore. The deal will be done by December end. ICICI Home Finance reported a profit of Rs 183 Crore against Rs 180 Crore last year along with a loan book of Rs 9282 Crore. Indostar which is mostly into loan against property and corporate finance for the SMES is all set to broaden its scope through its subsidiary Indostar Home Finance as reported by Economic Times. The deal will fetch attractive valuation as the regulations are in favour of the bank raising long term borrowing for lending to housing as said by a banking analyst for Reliance Industries.
The effects of GST: Buyers may now prefer only ready for possession properties
With real estate developers are busy preparing and fine-tuning their system to align with new tax system, builders as well as brokers are expecting that real estate sales to remain slack for some time because consumers are appealing for more clarity on exact tax obligation on their transactions.
In last few days builders and brokers are continuously getting queries from their existing and prospective customers related how would they resale of under-construction property and it will be treated under GST and customers also want to know about the if their any reimbursement or future payment adjustments are possible from developers’ input tax credit.
“ Customers will be in discovery mode for a while, trying to analyse and follow a secure investment pattern for themselves. And we are talking about an industry which is just about to recover from the side effects of demonetization” said prakkash.
Since real estate agents think that ready to move in property are out of the GST circle so they are most preferred by the home buyers.
Developers have to bear the tax burden for ready-to-move in property as are kept out of the GST ambit” said surendra Hiranandani.
Last week government announced that the goods and services tax (GST) for construction of real estate is 18% which was earlier 12%.
Rs. 16,770 Crore Lost in Banking Frauds Last Year: 72% rise over Last Five Years
The Indian financial sector has registered a loss of 16,770 crore in banking frauds. RBI in the biannual Financial Stability Report (FSR) has said, “During the last Five financial years, frauds have increased both in volume and value terms. During this term the volume of frauds has increased by 19.6%”. The value frauds has increased by 72% and has reached to a number of 16,770 crore. According to the report of FSR, 86% of the frauds recorded in the year 2016-17 were frauds in advances or loan portfolio. Almost all the loan frauds are declared as NPAs for 2-3 years before getting reported as frauds. RBI pointed out the security of the entire ecosystem which is a challenging task to ensure. Taking a serious step towards cyber security, RBI has proposed to adopt risk based approach by offsite assessment of key risk indicators and has provided a comprehensive IT examination of major banks to assess their cyber risk resilience.
Linking of Aadhaar and Pan Card. How do we do it?
The Income tax department has started a drive which requires the assessees to link their Aadhaar and Permanent Account Number that is the PAN card. The process has not only been simplified by the taxman but also a number of facilities have been linked to carry out the process. The Budget of 2017 has mentioned the need to link the Aadhaar and the Pan card so that the individuals do not use multiple pan numbers to escape the taxes. The rule will become mandatory for all the taxpayers from July 1, 2017 as said by the Department of Revenue. The government has made quoting of Aadhar or enrolment ID a must while applying for PAN card. More than 2.07 crore taxpayers have linked their Aadhaar numbers with the PAN cards. The procedure for the same is as follows-
- Once you are on the incometaxIndiafiling.gov.in website click on the link Aadhar card option.
- Enter the name on the Aadhaar Card.
- Proceed by clicking on the Link Aadhaar number.
- An OTP will be sent to the mobile number mentioned on the Aadhaar card.
- Once the OTP is received it has to be entered and the submit button should be clicked. A thank you message will be received .The procedure of linking the Aadhaar card with PAN card is done.
Midnight Roll-out Of GST: Impacts on Everyone’s life
The midnight launch of the GST on Friday, June 30, by Prime Minister Narendra Modi will unify 29 states and 1.2 billion population of the country into a single vast market. GST will impact people life in many ways some of them will be visible right after the launching. Some of the visible impacts seen are as follows-
- If you enter a restaurant at 11 pm on Friday and leave after midnight, you will have to bear the new GST instead of the usual service tax.
- Taking a taxi on Friday and paying for it after midnight will leave you paying GST instead of VAT.
- Customers will be levied with GST on hotel bills settled any time after July 1.
- The new tax regime will apply on online shopping after midnight.
- As GST will make economy class air travel cheaper and is going to increase the tax on business class, buyers are advised to buy economy tickets after midnight and business class tickets before midnight.
GST Impact on Vehicles: Maruti Suzuki Reduces Prices of Vehicle by 3%
New Delhi which is popularly known as a market of car production for Maruti Suzuki India limited the news came out after GST introduction that the company is reducing 3% on prices of its vehicles.“The Ex-showroom have reduces the prices of Maruti Suzuki vehicles by 3%, imposed of new tax and levy under GST and the rate of reduction varies across locations depending on the VAT rates which is applicable prior to GST” said by company. Kenichi Ayukawa MD and CEO of Maruti Suzuki said “government of India and all policy makers deserve big congratulations on the successful introduction of GST. This is a truly epoch making reform. While GST will directly improve efficiencies and ease of business, its significance goes much beyond that. It is powerful example of India’s commitment to reform, and how all stakeholders can come together to resolve complex issues in the interest of growth and development of the country”.
Unkempt Subprime Auto Loans – A Tale of Misery for Car Makers
Auto loan business has been on the forefront since its invention, but in the past few years the lending standards have become remiss. One of the biggest subprime auto lenders, Santander consumer USA holdings has double checked income for just 8% of the borrowers of the loans they bundled into bonds. It is an unusually low verification rates as compare to the other bigger auto lenders. According to moody’s investor’s service, the Santander’s pool has a high proportion of loans, but with risky terms, poor borrower credit and no income verification. Loan level information was made available for first time and all thanks to the new reporting requirements under regulation AB-II. Along with Santander’s, dozens of other in dependable lenders were also involved in some questionable practices.
Before the worst ever financial crisis of 2008, lenders use to allow consumers pack on more mortgage debt that they could possibly expect to payback. These loose auto lending standards resulted in a greater loss than expected, and has put auto manufactures in a bigger crisis. In order to overcome this crisis lending arms and financing firms should and must stop lending to less credit-worthy consumers or they will have to bear bigger losses in the near future. Ever since the electric and self-driving cars have taken over the US market, the automakers are seeing a change in their industry. This decline is much deeper than expected and is not going to resolve any time soon,
Delightful Days for Home Buyers Ahead of 2017 to Buy Affordable Housing in Thane, Navi Mumbai
According to the experts of the real estate sector, year 2017 is going to be a boon year for home buyers looking for an affordable housing residing in area such as Thane, Navi Mumbai, Panvel, Kalyan, Greater Noida west, NH24 bypass, and Rajnagar. The declining bank home loan interests’ rates and the governments announcing new reforms and policies in the real estate sector such as Real Estate Regulation Act (RERA) and GST to bring transparency, collectively making the year an extremely good span for buying affordable homes.
On May this year, SBI has announced a rate cut up to 25 basis points to 8.35% PA for the loan amount up to 30 lakh. Following the footsteps of SBI, other banks and NBFC have also announced a slash in their interests’ rates further boosting the real estate sector. LIC has announced a new product griha siddhi with interest rate 8.40% on loan amount up to 25 lakh. NBFC LIC housing finance offers interests’ rate of 8.35% for women borrowers, HDFC on May 15 has lowered mortgage pricing for new low cost home loans to 8.35% from 8.50% for women borrowers and for others to 8.40%. Similarly, ICICI has slashed their rates by 30 basis points.
As the stay order imposed by high court on construction of open ground will be resolved and will ensure that the next few months will be adequate for buyers to look for better options such as ready to move in or under construction property at an affordable price.
Billionaire Piramal Is All Set to Gamble on Rs 84 Lakh Crore Housing Bonanzas
Billionaire ajay piramal is always in a search for opportunities to rebuild and expand his business. This time he has stepped in to the financial services and wants to sell mortgages and built affordable homes with Rs 84 lakh crore housing investment boom. PM Narendra modi is so keen on giving a great emphasis on affordable housing to propel job creation and economic growth and thus giving a boost to the financial services.
Closely-held Piramal Realty Pvt Ltd is considering affordable housing projects while the other listed piramal is awaiting a licence so that they can offer home loans to home buyers at an affordable price. As a rise in income and a government push to house nation’s 1.2 billion populations will require 60 million new homes by 2024 and unloose investment of rs 84 lakh crore over the next seven years.
There will be an enormous growth which will be clearly visible in the near future in the housing finance sector since this market in India is very far from its saturation point. More than 16 mortgage financiers started operating in the country in two years of span and took the total to 75. HDFC dominated the sector and became the largest mortgage lender with illustrious loans of nearly Rs 3 lakh crore. Apart from all these facts the Mortgage penetration in South Asian countries stands at nine percent of nominal GDP, which is still low as compared to global standards with 32 percent in Malaysia, 56% in Singapore, and 68% in the US. This mortgage Push by Piramal is an effort in the line to establish their financial service business as Indian lenders. As piramal said ‘there is a space for a company who is ready to play it on a larger panorama, since we have the funding and the track record of the company is way too good, we will be able to come in that space’.
Flipkart to Refund Payments Against Returned Purchases Instantly with the Help of Visa
Indian e-commerce leader Flipkart on 30th March announced instant refund against return of products purchased using VISA debit Cards. Ina joint statements the leading debit and credit card brand VISA and e-commerce market place Flipkart said, the move is aimed to ensure timely refund of money to the shoppers, the move is also aimed to drive process efficiencies and provide a hassle-free experience to the customers. Earlier the same process used to take 2-8 working days’ post acceptance of a return request by the shopper. VISA direct debit card customers of State Bank of India, ICICI Bank, SCB, Bank of Maharashtra, IDBI Bank, Federal Bank, The South Indian Bank and other are eligible to receive the funds against returned purchases instantly.
Mobile App Samsung Pay Supports Credit Cards, Debit Cards and Digital Wallets
Samsung the second largest mobile phone manufacturer has launched “Samsung Pay” in India, it’s a mobile payment service. The app Samsung Pay is available in all the major smart phones of Samsung Including Galaxy S7, Galaxy A5 (2016),Galaxy Note 5, Galaxy S7 edge, Galaxy A5 (2017), Galaxy S6 edge+,Galaxy A7 (2017), Galaxy A7 (2016), Gear S3 and others. Samsung has signed up a partnership with several banks and payment getways in India including HDFC Bank,, SBI, SCB, Citibank, American Express, ICICI Bank, Visa, MasterCard. Samsung has also tied up with mobile wallet PayTM for payments now, and will be adding UPIs support via Axis Bank in coming weeks. The idea of Samsung Pay is to put everything as part of a consumer’ssmart phone, a debit cards, a Credit Cards and Mobile wallets.
As HS Hong, president of President and CEO of Samsung Electronics SouthwestAsia, said we have always supported Make in India program of the India Governmentand with Samsung Pay we are doing meaningful innovation in India and adding value to the system. Samsung becomes the first company to launch a mobile payment service in India, ahead of its competitors Apple Pay and Android Pay. However, the service is still limited to a select few Galaxy smartphones, and we’ll have to wait, and see how soon it is rolled out to other devices
Credit Card Customers to be charged 2% by PayTM
PayTM the largest mobile wallet company in the country announced recently, all the customers using their Credit Card to recharge their PayTM wallet will be now charged 2.00% of the recharge amount. PayTM has observed that all its tech savvy wallet customers been misusing the 0% fees structure. We will be aggressively blocking users and cards misusing our services. PayTM is paying a fee for using banks Credit card networks, and we wanted to lower transaction costs within our network. But when users transfer money to their bank account at 0% bank fee, PayTM loses money. Our revenue comes from users spending within our network and we make money from the margins on various products and services that we offer," said Vijay Shekhar Sharma, CEO, PayTM.PayTM also clarified that there will be no additional fee, while shopping on PayTM or paying for utilities using credit card. Using credit cards on partner apps like UBER, Swiggy also will not attract charges and will continue to remain free of cost
Yes Bank- Exclusive Banking Services for Telugu NRIs
Yes Bank one of the largest Private Sector Bank and lender in association with Andhra Pradesh Non-Resident Telugu (APNRT) Society will soon offer exclusive banking services to all Telugu-speaking NRIs in the state. APNRT is a society created by state Chief Minister N Chandra Babu Naidu and non-resident IT Minister Palle Raghunatha Reddy, an NRI himself. Under its Global Indian Banking (GIB) programme, Yes Bank will offer financial services to Telugu-speaking NRIs across the world, a company statement said.
25,000 People to Be Trained By HDFC Bank in Cashless Transactions
After demonetization, there has been a search in demands of cashless transactions.HDFC Bank is providing training to 15000 customers and 10000 businessmen on how to effectively use digital payments on a daily basis they have organized "Digital Literacy Camps" in 275 places in Madhya Pradesh. They are providing this service across an urban, semi-urban and rural area in around 130 branches.
DHFL Expects 30% Disbursement Growth in Andhra Pradesh, Telangana
Dewan Housing Finance Limited (DHFL) is expecting an increase of 30% in home loan requirements in Andhra Pradesh and Telangana owing to initiatives like ‘Housing for All by 2022’ and Smart City projects. With rapid urbanization, DHFL expects to increase its loan book size by 30%, which currently accounts for Rs. 16,000 crore of the market in Andhra Pradesh and Telangana. The loan size averages at 13.92 lakh for Telangana and Rs 11.85 lakh for Andhra Pradesh.
Banks to change to Capitalize on Digitization
Digitization has hit India in a big way with the smallest vendors and businessmen getting technology savvy. Fin-tech like Payton and others have been able to capitalize on this situation because of their agile processes. It’s time banks caught up to this to stay relevant and maintain their dominance in the financial sector. Using big data, social media, email marketing, interactive websites, etc. not only help keep the consumer engaged but also help in determining consumer patterns.
Airtel Invests Rs. 3000 Crore in Its’ Payment Banks
Airtel is making waves with its Payment Banks. It has already launched its services across all 29 states via 2,50,000 banking points. It plans to register 100 million Indians from its telecom customer base for Airtel Payment Bank accounts. As one of the first telecom giants to enter this space, Airtel hopes to capture the market before other entrants compete for the same product. Airtel will invest Rs. 3000 crore in Payment Banks for a wider reach with good customer experience.
0.75% Cash Back for Card Payments at Petrol Pumps
Indian consumers can now enjoy 0.75% cash back when paying for their fuel using plastic money. The government has asked Indian banks to send text messages to all customers swiping their cards at petrol pumps. The message will inform customers that cash back of 0.75% will be credited to their bank accounts in three working days. The cost of the cash back will be borne by oil marketing companies.
SBI: Post Demonetization Sees Increase in Credit Card Applications
SBI sees a massive increase in new credit card users post the demonetization era. In December 2016, SBI issued over 1.15 lakh credit cards. This brings their subtotal to 47.5 lakh credit cards issued until date. Additionally, people are spending more using their credit cards post demonetization. This increase averages around 25 - 30%. Other players like HDFC, ICICI, and Axis Bank have also reported an upsurge in applications as well as average monthly spend.
PSB Fund Infusion of Rs. 25,000 Crore Planned by Finance Ministry
With a rise in bad loans, Public Sector Banks (PSBs) have requested for capital infusion. The capital infusion would be to the tune of Rs. 25,000 crore or more as announced in the Budget. 75% of this amount has been released to the PSBs, which will allow them to raise more money by improving their lending systems. This is part of a 4-year plan announced by the Government of India.
Citi and Syndicate Bank Slash MCLR Rates
Lending rates are on the decline as more banks join in on reducing their MCLR post demonetization. Syndicate Bank and Citi India have slashed their rates substantially. The MCLR of Syndicate Bank and Citi India stand at 8.30 – 8.75% and 8 – 8.10% respectively. The MCLR rate controls the interest rates of car and home loans. Hence, 2017 may well be the year when borrowing for cars and homes becomes more affordable.
Axis Bank Reduced Interest Rate in Home Loan
Post announcing the reduction in its MCLR Axis Bank has announced interest rate cut on its different category of home loans. Axis Bank Current rate of interest are as following
Axis Bank Home Loans, Personal Loans to Get Cheaper as cuts MCLR by up to 0.70%
Axis Bank has reduced its MCLR up to 0.70%, now the MCLR for 1-year tenure which serve as the benchmark for Home Loans, Loan Against property and others, will be 8.25% down by 65 bps. Axis Banks overnight MCLR has come down by 0.65% to 7.90% and the highest cut of 0.70% is applicable for 3 month and 6 months MCLR which has been revised to 8.05% and 8.15% respectively. Axis Bank Home Loan, Axis Bank Personals are expected to get cheaper in coming days.
Axis Bank Q3 Profit Drops As Bad Loans Jumps
The 3rd largest private sector bank and loan provider in India Axis banks has reported a 73% drop in its profits on account of provisioning for bad loans. Net profit of the bank fell to Rs. 580 Cr for 3 months ended 31st Dec 17, from 2175 a year earlier for the same period. Percentage of gross bad loans jumped by 5.22% from 4.17% in the previous quarter and 1.68% compared to the same period last year. Provisioning including bad loans moved up by more than 5 times from a year earlier to Rs. 3,796 Cr. Axis Bank is one of the biggest private sector lender for Home Loans, Affordable Home Loans, Personal Loans, Car Loans and others in India.
Axis Bank MCLR Down by 70 bps
The new home Loan rate of Axis Bank is 8.25%, which has been reduced by 0.6%. These new rates have been effective from January 18, 2017. On November 8 when the government banned the Rs. 500 and 1000 notes, Axis Bank reduced the rates of its deposit offerings by 0.75-1%. The new rates stand at 0.65% for 3 months and 7.90% for the 6 months MCLR.
Currency Circulation Increases For the First Time after Demonetization
After the note banned on November 8, 2016, the end of the week on January 13, 2017, has shown growth. The money in circulation has increased by Rs 52,790 crore in this week. The total money in circulation as of January 13, 2017, was Rs 9.5 lakh crore. This growth is seeing for the first time in 10 weeks since demonetization. 80% of the extinguished notes are expected to be back in circulation by the end of February 2017, according to Soumya Kanti Ghosh, group chief economic advisor, State Bank of India.
Yes Bank Emerging as a Leading private Sector Lender in Country
Yes Bank is growing its loan book with faster growth rate than larger private sector lenders like Axis Bank, HDFC Bank and according to the data for the fortnight ended December 23, In each of the past six quarters, Yes Bank recorded over 20% year on Year growth in advances and NII compare to the industry growing at 5.1%. Yes Bank is emerging quickly as a leading lender for home loans, personal loans, car loans and credit card issuance.
HDFC Bank Reduced Interest Rates on Bulk Deposits
The largest private sector bank of India HDFC Bank has reduced deposit rates on amounts higher to 5 Crores with a maturity of one year and more by 125 basis points to 5%, effective from 6th January 17. On account of increased deposit in Bank post demonetisation number of banks have already reduced the deposit rates. According to the data released be RBI, banks have received deposit exceeding 12.5Lacs Crore.
HDFC Bank Cuts Loan Rates
HDFC Bank one of the largest lenders in India has reduced its marginal cost of funds based lending rate (MCLR) by 0.75% to 0.90% effective from 7th January 2017. HDFC Bank 1-year rate has been reduced to 8.15% from 8.90%, the overnight lending rate reduced to 7.85% from 8.65%. In coming few days expect the news of HDFC Bank reducing the rate of interest on Personal Loans, Car Loans, Business Loans. State Bank of India, ICICI Bank, PNB, Union Bank of India, Kotak Mahindra Bank, Andhra Bank, Dena Bank, Bank of India has already reduced MCLR.
HDFC Bank has Over 1 lakh Merchants on Mobile Expenses
HDFC bank one of the largest consumer loan private sector lender in the country, is onboarding more than 1,000 merchants every day on its digital payment platform PayZapp, as of now it has over 1, 00, 000 total merchants. With the launch of HDFC Bank SmartHub app for merchants, all the physical merchants of the bank will get activated as UPI merchants. Additionally, every new merchant is being trained on UPI to ensure the adequate promotion of the newly launched offerings.
HDFC Bank MCLR- Effective
The revised MCLR of HDFC Bank effective from 7th January 2017 is as given below in the table. Lending rate of HDFC bank including rates for Home Loan, Personal Loan, car Loan and all the other types of loan are based on MCLR.
|Tenor||Overnight||1 Mon||3 Mon||6 Mon||1 Yrs||2 Yrs||3 Yrs|
* Mon=Month & Yrs=Year
Indiabulls Housing Finance to Take on SBI, ICICI, HDFC Banks With Home Loan Rate Cut
Leading Housing finance company Indiabulls Housing Finance Limited has cut its retail home loan rates by 40-45 basis points after two leading lenders of the country SBI and ICICI Bank slashed the lending rates. Now Indiabulls will offer an interest rate of 8.70% for Home Loans up to 75 Lacs, Indiabulls Housing finance has cut the rates considering its borrowing rates have reduced from Banks and money market.
Yes Bank, Launch Chatbot for Quick Online Information on Loans
Yes Bank, launched banking chatbot ‘YES mPower’ that instantly gives information about Yeas Bank Loan products – Yes Bank Home Loan, Yes Bank Personal Loan, Yes Bank Car Loan and others. YES mPower is available through Facebook Messenger and is powered and driven using artificial intelligence. Conversation between the loan provider and consumers on YES mPower is expected to create a seamless and better customer experience and reducing the cost for the bank. With ‘YES mPower’, customers can get information on loan products like personal loans, auto loans, gold loans and loan against securities while products like used car loans, loan against properties and home loans are expected to be added soon. Yes Bank introduced chatbot-based banking in 2016 that allows customers to perform banking transactions on various social messengers. Yes Bank has partnered with Silicon Valley-based bot platform Gupshup to create and manage Yes mPower platform.
ICICI Bank & Twitter Tie up to Help Customers
Customer experience takes top priority at ICICI Bank, as they collaborate with Twitter to allow customers to easily get in touch with their support team. This move helps in providing quick support to the technically-savvy customer base in one of the most convenient ways. ICICI has added a message button, support indicator, and ease of moving a conversation to private mode.
Home Loan Rates Slashed: Lowest in 6 Years
State Bank of India along with other banks like Union Bank of India and the Punjab National Bank have slashed their home loan rates. SBI’s home loan rates are down from 9.10% to 8.6%. other private sector banks are expected to announce their reduced rates soon. SBI’s MCLR, which influences home loan interest rates, has been reduced from 8.9% to 8%.
PSU Banks Reduced Home Loan Rates
Three largest PSU banks of the country the State Bank Of India (SBI), Punjab National Bank (PNB) and Union Bank of India has cut their lending rates 90 bps, 70pbs and 65-90 bps respectively. Other Banks National side, as well as private, have to follow the suit to remain competitive. This will, in turn, benefit the retail loan borrowers like home loan, Car loan, Personal loan and other loans, as the rates will see a cut of 0.60% to 0.80% soon. Now you can expect Home loan at 8.25%.
State Bank Of India (SBI) New MCLR Rate
The largest bank of the country SBI has cut the rate of interest by 0.90% in their lending rates Home loan rates to go as low as 8.20% to 8.25%. Below is the table showing current and old MCLR rates of SBI offer different tenure of loans
Punjab National bank (PNB) cuts the Lending rate by 0.70%
Punjab National Bank has reduced its Marginal Cost of Lending Rate (MCLR) by 0.70% to 8.20% with effect from 1st january2017. Clearly, the steepest cut in MCLR by 70 bps from 1st January 17 comes as result of surge in deposits into PNB post November 8th demonetisation announcement. Home Loans, Personal Loans, Car loan and other loans from ONB to get cheaper anytime soon, but the announcement from PNB is yet to come.
State Bank Of India (SBI) Cuts MCLR by 90BPS
Flushed with liquidity and low-cost deposit post-Demonetization the largest lender and Bank of the country the State Bank of India has cut its marginal cost of lending rate or MCLR by 90 basis points across all the tenures of lending. Due to this cut in MCLR rate of interest in Home loan is expected to touch 8.25% anytime soon, But SBI is yet to announce the rate cut on Home Loan, Car Loan, Personal Loans and other products.
PM Shri Narendra Modi launch Mobile Payment App
PM Shri Narendra Modi, launched a new mobile payment application named as BHIM (Bharat Interface for Money), to push the government’s initiative of digital payment and make country cashless. The app is named as BHIM in respect of Dr. Bhimrao Ambedkar. The mobile app has the maximum limit of Rs. 10000/- per transaction and Rs. 20000 within 24 hours. To launch the app PM Shri Modi transferred the payment to Khadi Gramodyog using the BHIM App against the purchase of a shawl and a napkin.
You Can Withdraw up to Rs. 4500/- From ATMs
From 1st Jan 2017, you can withdraw up to Rs. 4500/- from your ATM. Indian Central Bank, Reserve Bank of India has directed banks to increase the daily withdrawal limit at ATMs from Rs. 2, 500/- to Rs. 4, 500/-. The dispensed amount should predominantly be dispensed in new notes of Rs. 500. The weekly withdrawal limit is still Rs. 24, 000/-.
How to use governments Mobile Payment App BHIM?
BHIM (Bharat Interface for Money), launched by PM Shri Narendra Modi on 30th December 2016, is a mobile payment application that supports 30 plus banks with compatibility with all android phones. BHIM users can link their Unified Payments Account with a bank account or create a new Unified Payment Interface (UPI) account with their phone number as the username. BHIM provide options to send and request money digitally or scan receiver’s QR code.
Home Loan & Personal Loan To Get Cheaper
IDBI bank has cut the MCLR by 0.40 basis points on Friday. Now the borrowers taking a home loan, a personal loan will get a cheaper rate from the IDBI Bank. Now a 3 years loan will be charged 9.30% and a six-month loan will be charged 8.90% down by 40 bps and 35 bps respectively. Other competing banks like State bank of India, ICICI Bank, Axis Bank, HDFC Bank are expected to follow the rate cut. Home Loan, Personal Loan, and another loan will see a downward movement in coming months.
If You Are an NRI You Can Swap Demonetised Notes
The finance ministry of India has announced that all the non-resident Indians(NRIs) can exchange the demonetised Rs. 500/- and Rs. 1000/- notes till June 30th, 2017. The notes can be deposited at specified RBI offices. This is announced post-President Shri Pranab Mukherjee cleared an ordinance which criminalize possession of scraped demonetised notes amounting over Rs. 10, 000. Under the new ordinance holding, transferring and receiving demonetised is illegal and a punishable offense.
Steady Slow down of Loan Appeal
Loans taken in all industries have dropped considerably. Here’s the breakdown as of October 2016 of reduction in loans
RBI Deputy Governor to be Viral Acharya
The much-coveted role of RBI Deputy Governor has been assigned to NYU-Stern, C V Starr Professor Viral V Acharya, who specializes in Economics in the Department of Finance. With expertise in analyzing the origin and regulation of risks on the financial sector that are caused by regulations/ rules/ movements made by the Government, he comes in at the crucial post-demonetization era.
Government Doubles Financial Aid for Train Victims
The Railways Act of 1989 has been amended by the Government to double the compensation provided to train accident victims. The Railway Accidents and Untoward Incidents (Compensation) Amendment Rules, 2016, states that in a case of death or disability, the victim or their family will be compensated by an amount of Rs. 8 lakh, as opposed to the Rs. 4 lakh compensated earlier.
40% Tax may be Levied on FPIs Investing in India
A tax of 10%-20% may be levied on Foreign Portfolio Investors (FPIs) investing in long-terms capital gains. Additionally, 30%-40% tax may be levied on short-term capital gains. This speculation comes in after the announcement that an indirect transfer of funds of an organization outside India will be taxed if 50% of their shares held by funds exceed Rs. 10 crore INR in value.
NBFC Au Financiers Now a Small Finance Bank
Reserve Bank of India has given permission for Au Financiers to start operating as a Small Finance Bank. This approval comes in light after a year of in-principle approval given by RBI to Au Financiers among nine other entities across India. Sanjay Agarwal, MD believes that SFBs can help reach a wider audience, especially those situated in rural India.
Global Forces Push Gold Rates Up by Rs. 139
As of 28 December 28, 2016, gold rates have seen a surge of Rs. 139 (0.51%). This growth has been attributed to a firming trend seen across the globe. The current gold rate stands at Rs 27,309 per 10 grams. In New York, the gold rate has increased by 0.28%, surmounting to $1,141.509, which roughly converts to Rs 77852.63.
Expect Subdued Growth in FY 17: Banks
With slowing down of loan applications, the fourth quarter has not seen much demand from customers with growth reducing to 5.8%. This unexpected lowering of demand lies in stark comparison to the otherwise flourishing last quarter seen in earlier times. Banks are expecting this trend to continue well into 2017.
ICICI Bank launched a Single Mobile App
In its efforts towards making digital payments more efficient for its customers, India's leading bank ICICI Bank has launched a single mobile application- Eazy Pay. EazyPay will consolidate all modes of digital payments- digital wallets, unified payment interface(UPI), QR code, credit and debit card. EazyPay is designed for business and allows multiple users to connect to the same account. It can be used for cash on delivery as well.
Ratnakar Bank Ltd (RBL) Reduces MCLR
RBL has reduced its Marginal cost of fund based lending rate by 0.30% to 0.45% for various tenures of loans, applicable from 22nd December 16. Loans up to 1-month tenure will have an interest rate of 9.70%, 9.75% of 3 months, 9.80% for 6 months. For loans 1, 2 and 3 the lending rate will be charged 9.85%, 9.95%, and 10.05% respectively.
Affordable Housing Finance Picking Up Fast
Affordable housing finance book of banks a growing faster than expected, leading players for affordable housing are Axis Bank, which does 150 Crore plus disbursal every month under affordable housing product Asha, DHFL Does around 300 Crores, PNB Housing Finance 250 plus crores, other significant players under affordable housing are SBI, DCB, Yes Bank etc.
Top-Up on Your Existing Home Loan for a Wedding
If the value of your property is higher than your outstanding home loan amount, you can leverage the property value & take a top up loan. Total loan amount can be up to 70% of current market valuation. Financers like Axis Bank, HSBC, etc. will offer you the same interest rate on Top up loan as your home loan if the top-up loan amount is within the outstanding home loan amount. Rates start @ 9.10%
HDFC Bank Gets Central Bank Nod to Raise 3000Cr
HDFC Limited, the one of the largest Home Loan and Mortgage Loan Lender in India has confirmed that the Reserve Bank of India has granted it a permission to raise another Rs. 3000 crore from the masala bonds. CEO & VC of HDFC Limited Keki Mistry said “ we have approved from the RBI to raise more money. I think we have an approval for 2k crore, but we will wait and watch, he further said the company has already raised 5k crore through this route earlier.
Axis Bank Reduces MCLR by 0.1% to 0.15%
The new loan in Axis Bank will be charged at MCLR ranging 8.55% to 9%. Up to one month tenor, MCLR has come down to 8.55%, up to 3 months 8.75% up to 6 months 8.85% and up to one year, it will be 8.90%. for 2 years 8.95% and 3 years 9.0%. Home, Personal and other retail loan rates from Axis Bank should reduce soon.
HDFC Bank Partners Chandigarh Administration to Promote Digital Banking
The leading private sector bank of India, HDFC Bank, has partnered with Chandigarh civic body to promote Digital Banking in the city. To promote digital banking transaction and to create an awareness about the benefit of going cashless in the city HDFC Bank is working closely with educational institutes, various government departments, employees, students, teachers, traders and others. As per the initiative, HDFC Bank will work with 100 schools and colleges.
Canara Bank Cuts Lending Rate, Expect Other To Follow
PSU Canara Bank, has taken a lead to cut the lending rates, expect the leading lenders of the country State Bank India, ICICI, HDFC Bank, PNB and others to follow the same. Home Loan, Personal Loans, Car loans and other consumer loan rates are expected to move further down. Canara Bank has cut its 1 years MCLR by 15 bps to 9.15% from 9.30%.
HDFC Limited Cut Home Loan Rate By 0.15%
Joining the rate cut war, HDFC the biggest home loan lender in the country cut the home loan rate by 0.15% today. Home Loan up to Rs. 75Lakh for women borrowers will now be available at 9.15% and for others it will be 9.20%.Since the credit growth of the corporate sector in the country is slow, the banks are focussing on retail loans.
IndiaBulls Housing Finance Reduces Home Loan Rate to 9.15%
IndiaBulls, a leading housing finance company in the country has revised its home loan rates to 9.15%, a reduction of 0.15%, effective from 4th November 16. An interest rate of 9.15% for a loan amount up to Rs. 28 Lakh, and 9.20% for a loan amount between Rs. 28 Lakh & 75Lakh will be applicable. For women borrowers, the rate will be 9.15%.
As Banks Focus Moves to Retail, Share of Personal Loans Increases
The Reserve Bank of India said as the focus of lenders/banks moved to retail loans, the share of personal loans in the banking system increased from 17.9% in March2016to 19.3% in June 2016. As per the RBI, the credit to industry grew at a slow pace of 5.2%, and its share in total credit system increased from 40.4% to 41.6%.
Home Loans Rate of Interest 7%- May Soon Become a Reality
The central government may soon announce a scheme under which a home loan can take at a rate of interest of 6-7%. The scheme may use the money collected from the demonetization drive. The new Housing scheme may be announced in the Union Budget 2017. Under the scheme, a rate of interest of 6-7% will be offered to a first time borrower for a loan amount up to Rs.50 Lakh.
Loan and properties to become cheaper soon
Indian borrowers and property buyers have a reason to cheer. As one of the effects of demonetization, property prices across the country are expected to reduce by 25-30% of the current prices. At the same time, since banks have collected huge deposits, they will be forced to reduce the rate of interest on Home and other loans. India borrowers will get the benefit of falling prices as well as rate of interest.
SBI Reduces Home Loan Rate To Lowest In 6 Years
Effective from November 1st 16, SBI the largest bank in the country has revised the home loan rate of interest to 9.10% per annum for women borrowers, which was earlier 9.25%. For other borrowers the rates have been revised from 9.30% to 9.15%. These rates are effective for a loan amount up to Rs. 75Lacs.
Axis Bank RevisesMCLR by 0.15%-0.20%
Axis Bank, one of the most active private sector lender has cut its MCLR(Marginal cost of fund based lending rate) by 0.15% to 0.20%. It reduces MCLR by 0.15% for any tenure between 1 years and 20 years.
Personal Loans Car Loan, Housing Loan Borrowers
To Get 60 days relief for Repayment from RBI. 28th November 16, Since borrowers are going through a cash crunch due to demonetization, RBI today has extended the repayment period by 60 days for repayment of Housing Loans, Car Loans, Personal Loans up to Rs. 1crore. This is applicable for loans payable between 1st November and 31st December 2016.
Ratnakar Bank Ltd(RBL) Launches Aadhaar Based Loan Disbursement
Indian private sector bank RBL has launched Aadhaar Payment Bridge System (APBS) for small ticket micro-finance loan disbursement. RBL has successfully disbursed cashless disbursement of micro-loans to various borrowers across the country.
Indiabulls Housing Finance Ups its Growth Target Post Demonetization
Post Demonetization Indiabulls has revised its growth target upward by 1-3 percentage point to 23-38%, following the government’s move to demonetise old Rs. 500 and Rs 1,000 bank notes, which is like to increase demand for home loans and other retails consumer loans. The housing loan demand is expected from non-metro cities where the property rates are still stable and have not increased much.
Axis Bank Launches Buzz Credit Card For Online Shoppers
For online shoppers, one of the India’s leading bank Axis Bank in partnership with Flipkart has launched a contactless credit card named “Buzz Credit Card”. Through this credit card, Axis Bank will offer a gift voucher of Rs. 1000 as a welcome benefit, a discount of 5% throughout the first year of the purchase at Flipkart and accelerated reward points. Additionally, card users will be entitled to get Flipkart voucher of up to Rs. 7000, linked to purchases made using the card. The card will also offer 15% discount at 5000 plus restaurants across India.
Indiabulls Housing Finance Launched Smart City Home Loans
Indiabulls Housing Finance Limited has launched “ Smart City Home Loans” in tier II and tier III cities. Under Smart City Home Loans Indiabulls does a home loan with an average ticket size of 15 lacs and maximum home loan amount up to 40 lacs. Indiabulls Housing Finance also announced an interest rate cut of 5 basis points with a prime loan at 9.3%.
Indiabulls Housing Finance Net Up 23% in Q2 to Rs 684 Cr
Indiabulls Housing Finance, One of the largest consumer finance NBFC of the country, reported recently a rise of 23.2% in its Net Profit at Rs. 684.31 cars for the second quarter ending Sep 2016. Indiabulls housing finance net profit same quarter of the previous financial year was 555.54 Cr. Its total income has increased to Rs. 2874.95 Crore for the quarter ended Sep 30th 2016. For Indiabulls Housing Finance the core home loan business is the growth driver as it carries the lowest risk weight.Indiabulls further added its sub 28 Lacs home loan have the highest demand.
Indiabulls Housing Finance To Raise Rs. 7, 000 Crore
Indiabulls Housing Finance is planning to raise up to Rs 7,000 Crore from now- convertible debentures to fund its business expansion. The bond issue committee of Indiabulls Housing Finance has approved the issue and allotment of the secured not- convertible debentures and unsecured redeemable non-convertible debentures of face value if Rs 1,000 each, to base issue of Rs 3, 500 crores with an over- subscription up to Rs 3,500 crores for the issuance of additional NCDs aggregating up to Rs 7,000 crores.
HDFC Bank Personal Loan in 10 Seconds
About a year ago HDFC Bank has launched 10 seconds instant personal loan paperless platform for its existing banking customers, as per the HDFC Bank, it has disbursed more than 3, 500 crores of personal loans under this scheme and platform. The bank further confirmed that the scheme was designed for the customers whose profile and banking behavior was already known to the HDFC Bank. The scheme was not only a hit in larger cities but was also a hit in smaller towns among existing HDFC bank customers.
YES BANK Launches Affordable Home Loans YES KHUSHI
Yes Bank, the fifth largest private sector bank of the country has announced the launch of YES KHUSHI- affordable home loan aimed at fulfilling the common man’s dream of owning a house. In the first phase Yes Khushi will be launched in 32 cities of the country managed by 350 plus Yes Bank Branches and targeting 8000 plus households and to reach up to 50, 000 plus customer base by 2020. YES BANK is also empanelled with National Housing Bank (NHB) for the dispensation of the housing loan subsidy under the Pradhan Mantri Awas Yojana (PMAY) scheme to eligible customers as per norms. The YES KHUSHI Affordable Home Loans product suite has been designed to address the gap in the market, keeping in mind the unique home loan requirements of Salaried and Self Employed segments of the population in the EWS(Economically Weaker Section) /LIG (Low Income Group) segments. YES BANK will be catering EWS/LIG segment having formal, semi-formal and informal income documents through various surrogate programs within a strong risk management framework. The YES KHUSHI Affordable Home Loans product suite has been designed to address the gap in the market, keeping in mind the unique home loan requirements of Salaried and Self Employed segments of the population in the EWS (Economically Weaker Section) /LIG (Low Income Group) segments. YES BANK will be catering EWS/LIG segment having formal, semi-formal and informal income documents through various surrogate programs within a strong risk management framework. Some of the key features of YES-KHUSHI Affordable Home Loans are
Syndicate Bank to reduce home loan, personal and other loan rates
Syndicate Bank cut its MCLR (Marginal cost of funds based lending rate across all the tenors of loans and the base rate of lending by 10 bps to 9.60%.
Allahabad Bank MCLR Reduces to 8.60%
Following the post demonetization MCLR cut, Allahabad Bank reduces its MCLR by 0.85%. The current MCLR stands between 8.15% - 8.60%. Car and home loan rates associated with MCLR will also see a drop. As of June 2016, MCLR has been established as the benchmark rate by the RBI to make the system more transparent.
Indiabulls Housing Finance Signed Up with HDFC Life
Indiabulls Housing Finance limited has signed up as a corporate agency with HDFC Life the leading private sector insurer of the country to distribute individual insurance products. Under this new tie up Indiabulls will distribute HDFC Life’s health and pension plan products to its customers across India.
Axis Bank Cut Lending Rates
A week after RBIs 25 basis point rate cut, Axis bank has reduced its MCLR by 15 basis point across tenures. It is likely to trigger a rate cut war among India lender including ICICI, HDFC, PSU Banks and others. Lending rates are already started to trend lower by 10-15 basis points with banks moving from base Rate to MCLR.
Home Loans Will Be Cheaper Now
EMIs will fall by Rs. 350-345 for those who are taking a home loan of Rs. 50Lakh for a tenure of 15 years Largest bank of India state Bank of India has cut its Home Loan rate to 9.40% with effect from April 1st, 2016. Loan rates will be based on MCLR (Marginal Cost of Lending Rates)
HDFC Bank is The largest insurer of Credit Cards in India
The largets private sector bank and lender of the country, HDFC Bank is also the largest credit card issuer in India. It has managed to grab more than 50% of share in terms of the credit card bool size of the country. The total outstanding as of the end of the year 2015 was more than 40, 000 Crore, the bank had 6.72 million outstanding cards, it's the closest competitor ICICI Bank has about 3.42 million cards. HDFC bank is also one of the largest Personal Loan, Car Loan and Home loan lender in the country.
HDFC Bank Offer Cash Withdrawals Services with the Help of Retailers
HDFC bank, has confirmed offering cash withdrawal services in over 50 large stores in metro cities, where HDFC account holders, as well as other bank account holders, will be able to swipe their debit cards and withdraw up to Rs. 2, 000 from the point of sale machines. To execute the plan successfully HDFC Bank has partnered with the Federation of Retail Traders Welfare Association( a Trade body representing retailers).
Axis Banks Now Offers Block Chain Solutions
Following ICICI Banks and Yes Bank, Axis Banks becomes the third bank to offer block chain services in India. Block chain services will simplify cross-border banking. Blockchain technology will reduce transaction time as well as increase transparency, which is both the need of the hour in terms of international remittances. Fintech Ripple has collaborated with Axis Bank to provide block chain services.