Banking and Financial Update for October 19, 2021

19.10.2021 : Today's Banking / Financial News at a Glance

🍒 SBI raises Rs 6,000 crore by issuing Basel III compliant bonds : The country's largest lender SBI on Monday said it has raised Rs 6,000 crore by issuing Basel III compliant bonds. In June, the bank had received approval from its central board for raising fresh additional tier 1 (AT 1) capital of up to Rs 14,000 crore. The committee of directors for capital raising at its meeting on October 18, 2021, accorded its approval to allot 6,000 Basel III compliant fully paid-up debt instruments in the nature of debentures qualifying as AT 1 capital of the bank to bond subscribers, SBI said in a regulatory filing. - Business Standard

🍒 Equitas Small Finance Bank to raise up to Rs 1,000 crore via QIP : Equitas Small Finance Bank (SFB) plans to raise up to Rs 1,000 crore in equity capital by issuing shares to institutional investors to meet minimum public shareholding (MPS) norms. The amount to be raised includes a premium on shares. The firm’s board has approved this raise, which is being done to fulfil requirements stipulated by Securities and Exchange Board of India (Sebi), by raising equity through qualified institutions placement (QIP), the firm informed the BSE. - Business Standard

🍒 RBI imposes penalty of Rs 1 crore on State Bank of India over non-compliance of directions : The Reserve Bank of India imposed a monetary penalty of Rs 1 crore on State Bank of India for non-compliance with the directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016. "This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1) (c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949," read the Central Bank circular. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, the RBI release read. - Economic Times

🍒 RBI slaps penalty of Rs 1.95 crore on Standard Chartered Bank : The Reserve Bank of India on Monday imposed a monetary penalty of Rs 1.95 crore on Standard Chartered Bank - India for failing to comply with guidelines issued for customer protection, cyber security, credit card operations and creation of central repository for large exposures.  The RBI conducted a statutory inspection of bank’s books and it’s inspection report revealed that that Standard Chartered had failed to credit the amount involved in the unauthorised electronic transactions back to customer accounts. The regulator’s inspection also revealed that the bank was not reporting cyber security incidents within the prescribed time period. - Economic Times

🍒 Bitcoin hovers near six-month high on ETF hopes, inflation worries : Bitcoin hovered near a six-month high early on Monday on hopes that US regulators would soon allow cryptocurrency exchange-traded funds (ETF) to trade, while global inflation worries also provided some support. Bitcoin last stood at $62,359, near Friday's six-month high of $62,944 and not far from its all-time high of $64,895 hit in April. The US Securities and Exchange Commission (SEC) is set to allow the first American bitcoin futures ETF to begin trading this week, Bloomberg News reported on Thursday, a move likely to lead to wider investment in digital assets. - Economic Times

🍒 Paytm allots ₹100 crore to marketing campaigns during festival season : Digital payments platform Paytm on Monday announced that the company and its partners will allocate ₹100 crore for marketing activities during the festive season in a major push planned for the company and its partners. These campaigns will be aligned to promote digital payments in India and educate users about Paytm UPI for money transfers, Paytm Wallet and Paytm Postpaid (Buy Now, Pay Later) for spends, to drive financial inclusion across the country. - Business Line

🍒 RBL Bank working on Abacus 2.0 for digital engagement, customer acquisition : Private sector lender RBL Bank is working on a new digital platform that would help scale up customer acquisition over the next few years.  Called Abacus 2.0, it would enable the bank to provide products and services to new as well as existing customers digitally, said Surinder Chawla, Head, Branch Banking, RBL Bank, noting that more customers have switched to digital banking channels since the start of the pandemic. The bank has about 40 lakh customers in branch banking and credit card as of June 30, 2021 and it expects it to rise to about 1.2 crore to 1.4 crore product-agnostic customers over the next three to four years through Abacus 2.0, according to its investor presentation for the first quarter of the fiscal. - Business Line

🍒 APSEZ raises ₹1,000 crore via NCDs : Adani Ports and Special Economic Zone (APSEZ) on Monday said the company has raised ₹ 1,000 crore by allotment of secured, redeemable, and non-convertible debentures (NCD) on the private placement basis. APSEZ in a BSE filing said that NCDs will be listed on the Wholesale Debt Market segment of BSE Limited. - Business Line

🍒 KreditBee issues over 1 lakh cards within 60 days of launch : Digital lending platform KreditBee has issued over 1 lakh cards within 60 days of its launch.  It aims to expand its portfolio by issuing over 10 lakh ‘KreditBee Cards’ by March 2022, it said in a statement on Monday. KreditBee has provided these cards to all its customers. - Business Line

🍒 Kerala Bank seeks RBI nod to collect NRI deposits : Kerala Bank has sought the permission of the Reserve Bank of India to collect deposits from NRI’s, eyeing the ₹1,50,000,000 crore NRI deposits credited to various commercial and PSU and private sector banks in the State. V N Vasavan, the State Cooperation Minister, pointed out that a major share of this NRI deposit amount is being utilised for disbursing loans to big corporates outside the State and in speculative businesses in stock markets. Kerala Bank is aiming to utilise these NRI deposits for developing the basic infrastructure of the State. - Business Line

🍒 Franklin Templeton strengthens Emerging Markets Equity-India team with new hires : Franklin Templeton on Monday said it has appointed Ajay Argal and Venkatesh Sanjeevi as portfolio managers in a bid to strengthen its Emerging Markets Equity – India team.  Effective October 12, 2021, Argal and Sanjeevi have joined the firm as portfolio managers and both are based at the Franklin Templeton offices in Chennai, reporting to Anand Radhakrishnan who heads up the Emerging Markets  - Business Line

🍒 Nomura India Business Resumption Index rises to an all-time high : The Nomura India Business Resumption Index rose to an all-time high of 108.8 for the week ending October 17 from 105 in the prior week (pre-pandemic level=100), with a broad-based rise across most sub-components. Mobility indices rose sharply ahead of the festive season. The Apple driving index jumped 14.1 percentage points (pp) over the week, while Google workplace and retail & recreation indices rose by 2.7 pp and 3.1 pp, respectively. - Business Line

🍒 PNB Housing locked in lower circuit after it shelves stake sale plan : The shares of PNB Housing Finance Limited (PNBHFL) were locked in the 5 per cent lower circuit on Monday after the company's Board called off its proposed ₹4,000 crore share sale plan to Carlyle Group and other marquee investors, including General Atlantic and Ares SSG, citing protracted delays and uncertainty over regulatory approvals required for the preferential issue. On the BSE, the company's shares opened at ₹607.10, down ₹31.95 or 5.00 per cent as against the previous close of ₹639.05. The company's shares were locked in the 5 per cent lower circuit through the day.- Business Line

🍒 PhonePe reports 85% jump in revenue at ₹690 cr in FY21 : Digital payments company PhonePe has reported a revenue of ₹690 crore in FY 21, which is about an 85.5 per cent jump from ₹372 crore revenue reported in FY20, according to the company's recent regulatory filings. Majority of the company’s revenue has come from payments and allied services. PhonePe claims to have a 45 per cent market share in digital payments, and a 300 million user base. - Business Line

🍒 Edelweiss gets nod, divests stake in insurance broking business : Edelweiss Group on Monday announced the divestment of its majority stake in Edelweiss Gallagher Insurance Brokers Ltd (EGIBL) after approval from the Insurance Regulatory and Development Authority of India (IRDAI). On receipt of the necessary approvals, the company, has in the first tranche, transferred 61 per cent of the stake held by the company in EGIBL to Arthur J Gallagher and Company (AJG) on October 18, 2021, Edelweiss Group said in a stock exchange filing. - Business Line

🍒 SBI General Insurance expects 20% growth in FY22 : SBI General Insurance is expecting close to 20 per cent growth in business in FY22 backed by a steady demand for health insurance products and an improvement in motor insurance starting third quarter of this fiscal. In the first half (April-September), the non-life insurer had witnessed 14 per cent growth in gross direct premium underwritten to ₹4,129 crore, as compared with ₹3,620 crore in the same period last year, as per data available on the IRDAI website. - Business Line

🍒 More than 2 lakh crypto accounts blocked in India over 6 months : The past year or so has seen decentralised cryptocurrency slowly becoming part of the mainstream narrative. On the seamy side, the digital currency has also provided an avenue for online criminal activities involving tax evasion and other kinds of serious frauds. In the past six months, between April-September 2021, the top three cryptocurrency exchanges – WazirX, CoinSwitch Kuber and CoinDCX – have blocked over two lakh accounts citing malicious activities. - Business Line

🍒 Cash going to co-exist with central bank digital currency: Subbarao : Former RBI governor D Subbarao on Monday said there is a strong motivation for the central bank to launch a digital currency and cash is going to coexist with the new-age currency.Addressing an event virtually organised by economic think tank NCAER, Subbarao further said cybersecurity is also one of the downside risks of the Central Bank Digital Currency (CBDC)."There is a strong motivation for the RBI to launch CBDC... Cash is going to coexist with CBDC," he said.  - Business Standard

🍒 Average cost for state debt across states plunges 27 bps to 6.72% : The weighted average cost of borrowing across states has plunged 27 bps to 6.72 per cent from the previous week, but the weighted average yield of the most-traded 10-year debt was unchanged at 6.97 per cent. The 10-year-state loan yields are ruling at the highest level since mid-August and have been tracing the rise in G-Sec yields since late September, which have inched up on concerns over the rise in global energy prices and the uptick in US treasury yields, Care Rating chief economist Madan Sabnavis has said in a note. - Business Standard

🍒 Gold prices slip to Rs 47,384/10 gm as US bond yields rise; silver down Rs 180 a kg : Gold prices fell on October 18, down by Rs 741 to Rs 47,384 per 10 gram in the Mumbai bullion market tracking a sharp fall on Friday in the global market as the Indian market was shut on account of Dussehra and firm equity markets. The precious metal was also pressured by surging 10-year Treasury yield and strength in the dollar.  The price of 10 gram, 22-carat gold in Mumbai was Rs 43,404 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,384 plus GST. The 18-carat gold quoted at Rs 35,538 plus GST in the retail market. Silver prices dropped by Rs 180 to Rs 63,110 per kg against its closing price on October 14. - Moneycontrol.

Rupee trades almost flat at 75.28 against dollar in opening deals : The Indian rupee traded marginally lower by 2 paise at 75.28 against the US dollar in early trade on Monday, tracking stronger greenback against key rivals overseas. At the interbank forex market, the local unit opened on a steady note and traded cautiously between a high of 75.26 and a low of 75.29 against the American currency. 

🍒 Sensex ends near 62k, Nifty above 18,400 : The BSE Sensex which recorded a fresh all-time high of 61,963.07, closed at a record high of 61,765.59, up 459.64 points or 0.75 per cent. It hit an intraday low of 61,624.65. The Nifty50 closed at a record 18,477.05, up 138.50 points or 0.76 per cent, after witnessing a fresh all-time high of 18,543.15. It recorded an intraday low of 18,445.30. Hindalco, Infosys, Tech Mahindra, JSW Steel and Tata Motors were the top gainers on the Nifty 50 while Mahindra & Mahindra, HCL Tech, Dr Reddy, Asian Paints and Britannia were the top losers.

Banking and Financial News Update For 15 September 2021

☕ 15.09.2021 : Today's Banking / Financial News at a Glance

🍒 SBI to cut base rate by 5 bps to 7.45% from Sept 15 : India's largest bank, State Bank of India (SBI) on September 14 has decided to cut the base rate by 5 bps to 7.45 percent from Wednesday. SBI will also cut the prime lending rate by 5 bps to 12.20 percent.Previously in April 2021, SBI had reduced home loans  rates to 6.70 per cent and a special concession of 5 bps to women borrowers.Base rate is the minimum rate of interest set by the Reserve Bank of India and is taken as standard rate by all banks. Banks are not permitted to lend at a rate below the base rate once set by the central bank. The current base rate set by central bank is 7.30-8.80 percent. - moneycontrol.

🍒 Union Bank of India inks its first sustainability-linked overseas loan : Union Bank of India, through its international banking division, has secured a sustainability-linked loan aggregating to total syndicated facility of $1.5 billion with one of the leading trading corporates globally, the state-owned bank said on Tuesday.  Under the facility, Union Bank of India will include three key performance indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals and growing renewable power portfolio. The sustainability-linked KPIs will have to be tested annually and verified by a third-party expert. Under this structure, the interest rate paid by the borrower on the credit facilities will decrease or increase based on the group’s progress on three key performance indicators (KPIs), the bank said in a statement. - Live Mint

🍒 UCO Bank sees ‘improved investor appetite’ : UCO Bank, which recently came out of the purview of the Reserve Bank’s Prompt Corrective Action, is expecting an “improved investor appetite”, which is likely to help its proposed capital raising plan. The bank had recently received the board approval to raise close to ₹3,000 crore capital in 2021-22. The fundraise can take place through various modes, such as follow-on public offer, qualified institutional placement and preferential issue, subject to necessary approvals, it had said in a regulatory notification to stock exchanges. - Business Line

🍒 Punjab National Bank begins exit from Canara HSBC OBC Life Insurance : Punjab National Bank, the country’s second largest public sector bank, has set the ball rolling for sale of if its entire stake in Canara HSBC OBC Life Insurance (CHOICE) by inviting bids for the appointment of a legal advisor for the proposed transaction.  After the three way amalgamation with Oriental Bank of Commerce and United Bank of India from April 1 last year, PNB had become a promoter shareholder, with 23 per cent stake in CHOICE. Prior to this amalgamation, OBC held 23 per cent stake in CHOICE. - Business Line

🍒 Co-lending: Punjab & Sind Bank ties up with Indiabulls : Punjab & Sind Bank (PSB), a public sector bank, has entered into a strategic co-lending alliance with Indiabulls Commercial Credit and Indiabulls Housing Finance (IHFL) for MSME and Priority Sector Housing Loans respectively.  Commenting on the partnership, S Krishnan, MD & CEO of PSB said that the co-lending model will improve the flow of credit to the unserved and underserved sector of the economy and make available funds to the ultimate beneficiary at an affordable cost, considering the lower cost of funds from banks and greater reach of the NBFCs/ HFLs. - Business Line

🍒 Escorts ties up with IndusInd Bank for finance to farmers : To make its range of tractors and farm equipment more accessible, Escorts Ltd has partnered with IndusInd Bank to provide financial solutions to farmers.  IndusInd Bank will offer farmers easy access to financial assistance in the form of loans in a seamless manner, Escorts said in a statement on Tuesday. Given its deep understanding of rural markets and wider penetration, IndusInd Bank will bring forth better accessibility to innovative financial solutions which, in turn, will help Escorts attain its larger goal of fostering the dreams of farmers, the company said. - Business Line

🍒 ICICI Bank leases 25,000 sq ft in Connaught Place : ICICI Bank Ltd. has leased 25,000 sq ft at Delhi's Dr. Gopal Dass Bhawan, Barakhamba Road, two people aware of the development said. The deal was facilitated by NCR-based brokerage firm Realistic Realtors. “Our goal is to assist businesses in locating elevated properties in prime locations that provide unparalleled access to all of the facilities that will benefit the buyer during the leasing process. Our area of expertise has demonstrated that we can deliver the finest service and consultancy to our clientele across a multitude of sectors,” said Ankit Gupta, Regional Director, Realistic Realtors. - economic times

🍒 ARCs may hunt MSME, retail assets as ground shifts: Crisil : Asset reconstruction companies (ARCs) are expected to circle stressed accounts in the micro, small and medium enterprises (MSME) and retail segments in the near-to-medium term, given the twin challenges of inadequate funding access and intensifying competition once the proposed bad bank materialises, rating agency Crisil said on Monday. ARCs have been facing headwinds in the past two fiscals, with assets under management (AUM) – as measured by security receipts (SRs) outstanding – contracting after a strong run-up in the previous five, as per it’s analysis. - economic times

🍒 NBFCs resent current account move by banks, flag reconciliation issues : Non-bank lenders have made a representation to the Indian Banks’ Association (IBA), asking it to advise lenders that the restriction on current accounts laid down by the banking regulator is not applicable to them, as multiple such accounts are required across geographies for collection purposes. While non-bank lenders (NBFCs) have proposed converting all collection accounts into cash credit facilities, they say banks are insisting on depositing cash or cheques in the centralised accounts, which has led to reconciliation issues. They say several such accounts have been closed by banks in recent months to meet with RBI rules on current accounts. “We request IBA to advise banks that the restriction on current accounts is not applicable to NBFCs, as already confirmed by RBI in their guidelines, insofar as they are required for collection,” NBFC lobby body FIDC said in a letter to IBA, seen by ET. - economic times

🍒 India, Singapore launch project to link UPI and PayNow for instant fund transfers : India and Singapore will link their respective fast payment systems -- Unified Payments Interface (UPI) and PayNow -- to enable users to make instant, low-cost fund transfers on a reciprocal basis, the Reserve Bank said on Tuesday. The Reserve Bank of India (RBI) and the Monetary Authority of Singapore (MAS) announced the project to link the fast payment systems. The linkage is targeted for operationalisation by July 2022, the RBI said in a statement. "The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system," it said. - economic times

🍒 Bad loans of banks may cross Rs 10 lakh crore by end of this fiscal, says study : Banks' bad loans might cross Rs 10 lakh crore by the end of this fiscal, mainly on account of slippages in retail and MSME sectors, a study said on Tuesday. "NPAs are expected to rise to 8.5-9 per cent by March 2022, driven by slippages in retail, Micro, Small and Medium Enterprise (MSME) accounts, besides some restructured assets," the study by industry body Assocham and ratings firm Crisil said. The study titled 'Reinforcing the Code' said the Gross Non-Performing Assets (GNPAs) of banks are expected to cross Rs 10 lakh crore by March 2022. - economic times

🍒 Credit demand back to normal for NBFCs : Demand for loans to purchase trucks and construction equipment is gathering steam and back to the pre-Covid levels on rising infrastructure spending by governments and capital expenditure by private companies. The demand for retail credit too is back on track, shrugging off the economic cost of the pandemic. - economic times

🍒 ToneTag completes RBI’s first cohort of voice-based retail payments : ToneTag has successfully completed the Reserve Bank of India’s first cohort for voice-based retail payments. It has executed offline voice-based payments via feature phones and smartphones in areas with inconsistent internet connectivity, with people who are digitally not savvy or find it difficult to use apps for banking or payments, making digital payments a reality for all, it said in a statement on Tuesday. - Business Line

🍒 Tata Capital launches LAMF scheme : Tata Capital has launched ‘Loan Against Mutual Funds’ (LAMF), whereby customers can digitally avail loans ranging from ₹5 lakh and ₹2 crore. The non-banking finance company, in a statement, said the end-to-end (onboarding to disbursement) digital loan offering, which is quick and hassle free, is provided against a wide range of equity and debt schemes across mutual funds. - Business Line

🍒 Hexahealth raises ₹33 crore from Omidyar, others : Healthcare startup Hexahealth on Tuesday said it has raised ₹33 crore in funding led by impact investor Omidyar Network and Chiratae Ventures. The seed funding round, which aims to transform surgery experience for patients, also saw participation from 3one4 Capital, while healthcare professionals like Viren Shetty, Rohit MA and Rehan Khan of Merck India have come in as angel investors, as per a statement. - Business Line

🍒 Madras High Court withdraws order on bumper-to-bumper insurance : The Madras High Court has withdrawn its order on bumper-to-bumper insurance following submissions made by counsels of Insurance Regulatory and Development Authority of India (IRDAI), General Insurance Corporation of India (GIC) and the Society of Indian Automobile Manufacturers (SIAM) that the Court’s direction may not be conducive and suitable for implementation in the current situation. - Business Line

🍒 Trust between govt and industry critical, says FM Nirmala Sitharaman : Highlighting the importance of trust between the government and industry, Union Finance Minister Nirmala Sitharaman said on Monday that it was essential to leverage opportunities thrown up by the Covid-19 pandemic and take the country one generation ahead. The trust between the two sides was reflected in the government’s actions, Sitharaman said while addressing members of the Conf - Business Line

🍒 Microfinance loan portfolio rises 4.2% to Rs 2,37,369 cr as of June-end : The microfinance industry's gross loan portfolio (GLP) rose 4.2 per cent to Rs 2,37,369 crore as of June 30, 2021, compared with Rs 2,27,727 crore as of June 30, 2020, according to a report by Microfinance Institutions Network (MFIN). Microfinance loan disbursals during the first quarter of the financial year 2021-22 improved significantly to Rs 25,503 crore, compared with Rs 6,186 crore in the corresponding quarter last year.MFIN is an industry association comprising 58 NBFC-MFIs and 39 associates including banks, small finance banks (SFBs) and non-banking financial companies (NBFCs). It released the Micrometer report for the April-June 2021 quarter on Tuesday. - Business Standard

🍒 Reserve Bank penalises Spice Money, Kuppam Co-op Town Bank : The Reserve Bank on Tuesday said it has imposed a penalty of Rs 2.44 lakh on Spice Money Limited for contravention of certain norms. The RBI also imposed a fine of Rs 5 lakh on The Kuppam Co-operative Town Bank, Kuppam, Chittoor district (Andhra Pradesh) for deficiencies in regulatory compliance. Regarding Spice Money, RBI said it was observed that the entity was non-compliant with directions issued by the central bank on maintenance of escrow account balance. - Business Standard

🍒 Bad bank meets RBI capital norms through rights issue : Shareholders of India’s bad bank put in an additional ₹74.6 crore through a rights issue to meet minimum capital norms, enabling it to apply for a Reserve Bank of India (RBI) licence, showed documents available with the registrar of companies (RoC).  Under a rights issue, a company allows only existing shareholders to participate in the fundraise. - Live Mint

🍒 Rupee closes flat at 73.68 against US dollar : The rupee settled flat at 73.68(provisional) against the US currency on Tuesday in tandem with the muted trend in domestic equities. At the interbank foreign exchange market, the local currency opened at 73.62 and witnessed a low of 73.70 and an intra-day high of 73.57 in the day trade. The domestic unit finally settled at 73.68 against the greenback, unchanged from its previous close. - Moneycontrol

🍒 Gold prices hover near Rs 47,000 per 10 gm on muted global trend; silver declines by Rs 70 a kg : Gold prices fell for the fourth straight day by Rs 42 to Rs 47,017 per 10 gram in the Mumbai retail market on muted global trends. Investors were cautious ahead of US August Inflation data to be released later in the day which could offer hints on the Federal Reserve’s decision to taper stimulus.  The price of 10 gram, 22-carat gold in Mumbai was Rs 43,068 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,017 plus GST. The 18-carat gold is quoted at Rs 35,263 plus GST in the retail market. Silver prices modestly slide by Rs 70 to Rs 62,806 per kg against its closing price on September 13.

🍒 Sensex, Nifty end flat with a positive bias : The BSE Sensex closed at 58,247.09, up 69.33 or 0.12 per cent. It hit an intraday high of 58,482.62 and a low of 58,214.29. The Nifty 50 closed at 17,380.00, up 24.70 points or 0.14 per cent. It hit an intraday high of 17,438.55 and a low of 17,367.05. IndusInd Bank, HCL Tech, Hero Motocorp, Adani Ports and Tata Motors were the top gainers on the Nifty 50 while UltraTech Cement, HDFC, BPCL, Nestle India and Tata Steel were the top laggards..

Delhi High Court gives interim relief to Indiabulls Housing Finance

A division bench of the Delhi High court on Wednesday stayed an interi order of a single-judge bench that has prohibited coercive action against mortgage lender Indiabulls Houisng Finance Ltd (IHFL) for failing to pay its dues to non-covertible debentures ( NCD ) holders.

The two - judge bench of the Delhi High Court has listed case for final arguments on May 4, 2020

Also Read : Is Indiabulls Housing Finance worth investing now