businessfortnight

India’s central bank warned that an expected doubling of bad loans and soaring financial markets in the nation’s weakened economy threaten financial stability. The non-performing asset ratio is forecast to rise to 13.5% by the end of September from 7.5% a year ago, the Reserve Bank of India said in its semiannual Financial Stability Report published Monday. If the number holds through the fiscal year ending March 2022, it would be the worst since 1999. “Domestically, corporate funding has been cushioned by policy measures and the loan moratorium announced in the face of the pandemic, but stresses would be visible with a lag,” the Reserve Bank said. “This has implications for the banking sector as corporate and banking sector vulnerabilities are interlinked.” Like their global peers, Indian lenders have been hit hard by the coronavirus outbreak, which triggered an unprecedented economic slump hurting borrowers’ ability to repay debts. Banks came into the year already weakened by a two-y

Mumbai, January 8, 2021: Raising the bar with newer offerings for the customers in the New Year, India’s largest fuel retailer, IndianOil, has now teamed up with State Bank of India (SBI) India’s largest bank, to launch the IndianOil – SBI co-branded RuPay Debit Card. The IndianOil – SBI co-branded RuPay Debit Card was launched by Mr. Shrikant Madhav Vaidya, Chairman, IndianOil; and Mr. Dinesh Kumar Khara, Chairman, SBI, in a virtual ceremony held today. The features of the card are: ·         6X Reward Points for every Rs. 200/- spent at IndianOil fuel stations ·         Fuel benefits – Cardholder earns loyalty points worth 0.75% against purchase of fuel at IndianOil fuel stations ·         Pay with a tap (contactless card) for a single transaction of upto Rs. 5000/- ·         Earn Reward Points on spends on dining, movies, grocery, and utility bills ·         Redeem Reward Points for dining, movies, grocery and paying utility bills ·         No monthly limit for purchasing fuel ·   

Banks have provided $1.7 trillion of finance to 40 companies in the plastics supply chain without imposing any requirements to tackle plastic pollution pouring into the world’s rivers and oceans, according to a report published on Thursday. With European and U.S. banks increasingly spurning the most polluting fossil fuel projects to help slow climate change, campaigners want lenders to take a similar approach to plastics by making loans conditional on measures to boost recycling. “What the financial sector needs now is someone to step forward and say ‘okay, we’re going to take a look at plastics,’ and then others will follow,” said Robin Smale, director of Vivid Economics, a consultancy, which audited the report. Compiled by https://portfolio.earth, a research network, the report ranked Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co as the three biggest financiers of plastics between January 2015 and September 2019. Each bank provided from $144 billion to $172 billion

India’s economy is estimated to contract by 9.6 per cent in the fiscal year 2020-21, reflecting a sharp drop in household spending and private investment, and the growth is expected to recover to 5.4 per cent in 2021, the World Bank said on Tuesday. In its Global Economic Prospects report, the World Bank said that the informal sector, which accounts for four-fifths of employment, has been subject to severe income losses during the COVID-19 pandemic. “In India, the pandemic hit the economy at a time when growth was already decelerating. The output is estimated to contract by 9.6 per cent in Fiscal Year 2020/21, reflecting a sharp drop in household spending and private investment,” it said. “In India, growth is expected to recover to 5.4 per cent in 2021, as the rebound from a low base is offset by muted private investment growth given financial sector weaknesses,” the bank said. The informal sector, which accounts for four-fifths of employment, has also been subject to severe income los

The credit growth of banks increased marginally compared to the last fortnight, amid an increase in retail loans along with a recorded marginal uptick in corporate loans. According to a recent research report released by CARE Ratings, the credit growth, however, remained low as compared to the corresponding period a year ago, reflecting a subdued demand and risk aversion in the banking system especially towards the corporate segment. Whereas, deposits growth remained flat at 11.3 per cent, as of December 18, 2020, as compared to the last fortnight. Deposits growth increased on a year-on-year basis, as it stood at 10.1 per cent as of December 20, 2019. However, in value terms, the bank deposits have declined as compared with the previous fortnight, specifically, declined by around Rs.1 lakh crore. A similar trend was observed in the last few years wherein deposits (value) decreased during the last fortnight of December. Furthermore, as of December 18, 2020, the liquidity surplus in the

Suryoday Small Finance Bank has received the go-ahead from the markets regulator Securities and Exchanges Board of India (SEBI) to float its initial public offering (IPO). The small lender’s shares are likely to be listed on both, the BSE Sensex and NSE Nifty, joining its listed peers Ujjivan SFB, AU Small Finance Bank and Equitas SFB. The IPO will comprise of a fresh issue of 1,15,95,000 shares and an offer for sale of up to 84,66,796 shares by the existing shareholders, according to the draft papers filed with SEBI. International Financial Corporation (IFC), Gaja Capital, HDFC Holdings, IDFC First Bank, Kotak Mahindra Life Insurance Company, DWM (International) Mauritius and and Americorp Ventures will offer shares through the offer for sale route. The bank had filed its IPO preliminary papers in October.

HDFC Bank, the country’s largest private sector lender, currently offers 5.50 per cent interest on fixed deposit account below ₹ 5 crore with tenure of 5 years 1 day – 10 years, according to HDFC Bank website https://www.hdfcbank.com. The bank offers additional 0.50 per cent interest across tenors to senior citizens. The maturity period for fixed deposits offered by the HDFC Bank starts from seven days and go on for 10 years. HDFC Bank revised its interest rates on fixed deposits with effect from November 13, 2020. This year, the Reserve Bank of India (RBI) has reduced the repo rate – or the key interest rate at which it lends money to banks – by a total of 115 basis points since February, on top of 135 basis points last year. This has also forced banks to lower their FD rates.

Here is a list of bank holidays falling in the month of January 2021. New Year’s Day: January 1 New Year’s Celebration: January 2 Makar Sankranti/Pongal/Maghe Sankranti: January 14 Thiruvalluvar Day/Magh Bihu and Tusu Puja: January 15 Uzhavar Thirunal: January 16 Birthday of Netaji Subhas Chandra Bose: January 23 Imoinu Iratpa: January 25 Republic Day/Gaan-Ngai: January 26 Holidays of the mentioned days will be observed in various regions according to the state declared holidays, however for the gazetted holidays, banks will be closed all over the country.

The Reserve Bank of India (RBI) on Wednesday cautioned individuals and small businesses against falling prey to growing number of unauthorised digital lending platforms and mobile apps on promises of getting loans in quick and hassle-free manner. These platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers. “Members of public are hereby cautioned not to fall prey to such unscrupulous activities and verify the antecedents of the company/firm offering loans online or through mobile apps,” said the central bank.

The Reserve Bank of India will continue to respond to global spillovers to secure domestic stability with its liquidity management operations, Governor Shaktikanta Das said earlier this month. The RBI will use its various instruments “at the appropriate time” to ensure ample liquidity in the system, the Governor said at the latest policy review meeting, according to minutes of the meeting released on minutes of the meeting released on Friday

If it weren’t for a cricket accident that almost killed him, Uday Kotak probably wouldn’t be the world’s richest banker. A ball that hit him in the head and led to an emergency surgery pushed a 20-year-old Mr Kotak to abandon his dream of becoming a professional player. After a brief stint at the family’s cotton-trading business, he went on to pursue his MBA at the prestigious Jamnalal Bajaj Institute of Management Studies in Mumbai before starting out in finance in 1985 at the age of 26. Mr Kotak, now 61, has a fortune estimated at $16 billion, according to the Bloomberg Billionaires Index. While India has been grappling with a shadow-lending crisis, his Kotak Mahindra Bank has been able to rise through the crowd, gaining investors’ trust by starting to slow lending to riskier sectors more than two years ago and keeping good corporate governance. When the coronavirus pandemic added to the industry’s problems by eroding borrowers’ ability to repay, the firm was one of the first to rais

The Federal Reserve on Wednesday vowed to keep funneling cash into financial markets until the U.S. economic recovery is secure, a promise of long-term help that fell short of hopes of an immediate move to shore up a recent pandemic-related slide. Following a policy meeting that took stock of both the short-term risks to the economy and the new promise of a coronavirus vaccine, Fed Chair Jerome Powell acknowledged the U.S. central bank’s suite of tools is not well-suited to the most pressing needs faced by households and businesses today. “The parts of the economy that are weak are the service-sector businesses that involve close contact,” such as restaurants and the travel industry, Powell said in a news conference following the two-day meeting. “Those are not being held back by financial conditions, but rather by the spread of the virus” that is now intensifying across the country, he said. Unemployed households or struggling businesses are more in need of immediate cash, Powell adde

The Reserve Bank of India on Monday approved re-appointment of Kotak Mahindra Bank’s founder Uday Kotak as managing director and chief executive officer of the bank for a period of three years with effect from January 1, 2021, Kotak Mahindra Bank said in a stock exchange filing. The central bank has also approved re-appointment of Prakash Apte as part -time chairman and Dipak Gupta as joint managing director. “Kotak Mahindra Bank’s board of directors had on approved the re-appointments, subject to the approval of the RBI, at their respective meetings held on 13th May 2020 and 18th August 2020,” the bank said in the statement. Following the RBI’s approval, Kotak Mahindra Bank’s shares rose as much as 0.48 per cent to hit an intraday high of ₹ 1,949. However, due to weakness in overall market, the stock gave up gains and was down 0.4 per cent at ₹ 1,932.

The domestic stock markets are likely to open in the negative, after extending a record-breaking rally for the third straight session on Monday, going by indications from SGX Nifty trading. Trends on SGX Nifty indicate a negative opening for the index in India, with a loss of 48 points. At 8:00 am, the Nifty futures were trading at 13,406, lower by 48.50 points or 0.36 per cent on the Singapore Stock Exchange. Axis Bank:  Axis Bank shares are likely to be in the limelight as the credit rating agency Fitch Ratings has re-affirmed the Long-Term Issuer Default Rating (IDR) of the private sector bank as BB+ with negative outlook and its viability rating (VR) at ”bb”. Canara Bank shares may witness buying interest after the state-owned lender set a floor price of ₹ 103.50 per share for its qualified institutional placement (QIP). The bank had received shareholders’ nod at its annual general meeting held in August for raising up to ₹ 2,000 crore through QIP. NBCC National Buildings Construct

The bank credit growth remained flat over the last fourteen days and was restricted from declining further as customers had started purchasing due to the festive season leading to retail demand along with various online shopping portals offering Diwali sale offers, according to a recent research report released by CARE Ratings. According to data complied by the report, the credit growth of banks declined to 5.7 per cent and 5.8 per cent during the last two fortnights, as compared to last year’s level of 8.1 per cent and 8.0 per cent, respectively ((as of November 08, 2019 and November 22, 2019) reflecting a subdued demand and risk aversion in the banking system towards the corporate segment. Banks such as Axis Bank, HDFC Bank, ICICI Bank, and others had announced various offers to push the retail credit. Additionally, the bank credit growth was also supported by disbursements under the emergency credit line guarantee scheme (ECLGS) which has been extended further till March 31, 2021.

ICICI Bank, the country’s second largest private sector bank, currently offers 17 maturity options with varied interest rates on fixed deposits up to ₹ 2 crore with an option of pre-mature withdrawal. The maturity period for fixed deposits offered by the ICICI Bank starts from seven days and go on for 10 years. ICICI Bank offers 2.5 per cent interest rate on fixed deposit for maturity period of 7-14 days. The bank offers additional 0.5 per cent interest to senior citizens.

The Delhi High Court has asked for a response from DBS Bank India Ltd (DBSIL) on a plea by Religare Finvest Ltd seeking to make the bank a party in its ongoing suit against Lakshmi Vilas Bank as it has been merged with DBSIL. Religare Finvest Ltd (RFL) has a 2018 pending suit against LVB alleging misappropriation of its fixed deposits of ₹ 750 crore. The merger of LVB with DBSIL came into effect from November 27. Justice Rajiv Shakdher issued notice to DBSIL on the RFL application seeking to substitute the bank with LVB following the merger. In its December 1 order, the high court said the response must be filed to the application within five weeks and listed the matter for further hearing on February 25, 2021. “In view of these recent developments it has now become imperative that LVB, that is, the transferor bank as per the scheme and the present defendant be substituted by the transferee bank, that is, DBS and the amended memo of parties be taken on record,” the plea said. In the ma

The Reserve Bank of India (RBI) has barred HDFC Bank from adding new credit card customers or launching digital businesses after its digital payment services were hit by technical outages last month. In an order dated December 2, 2020, the central bank also took note of the most recent outage on November 21, which occurred due to a power failure in the primary data centre of the country’s largest lender by market value. The RBI has asked HDFC Bank’s board to examine the lapses and fix accountability, the private sector lender said in a regulator filing on Thursday On November 21, HDFC Bank’s digital payments business was down for more than 12 hours, following a power outage in its primary data centre. The RBI has advised the bank to temporarily stop all launches of its digital business-generating activities planned under Digital 2.0 and halt the sourcing of new credit card customers. “The above measures shall be considered for lifting, upon satisfactory compliance with the major critic

ICICI Lombard General Insurance Company, owned by ICICI Bank, has received an in-principle approval from the Insurance Regulatory and Development Authority of India (IRDA) to the draft scheme of arrangement between itself and and Bharti AXA General Insurance Company. The deal will create India’s third largest non-life insurance company, with a combined annual premium of ₹ 16,447 crore and a market share of nearly 8.7 per cent. “We would like to inform you that the Insurance Regulatory and Development Authority of India (‘IRDAI’) has granted in-principle approval under Section 35 to 37 of the Insurance Act, 1938….with respect to the said transaction,” ICICI Lombard General Insurance Company said in a regulatory filing to the stock exchanges. The board of ICICI Lombard had approved the scheme of arrangement at its meeting held on August 21, 2020. Bharti Enterprises currently owns 51 per cent and French insurance company AXA has a 49 per cent stake in Bharti AXA General Insurance. The sha

State Bank of India (SBI) – the country’s largest lender by assets – currently provides eight maturity options for retail fixed deposits, or fixed deposits up to ₹ 2 crore. Also known as lock-in period, the maturity period starts at seven days and extends to as long as 10 years. Currently, SBI provides interest rates to the tune of 3.4-6.2 per cent to senior citizens, and 2.9-5.4 per cent to other depositors, on retail FDs. Commercial banks such as SBI revise interest rates applicable to fixed deposits from time to time, to align them with benchmark rates.