financial news 14-04-2019

 14.04.2019: Today's Banking / Financial News at a Glance

 RBI Governor says India's economy needs to grow even faster : India’s central bank chief said the expansion of the world’s fastest-growing major economy needs to pick up to around 8 percent to deal with poverty and other challenges. While the past few years’ average growth of around 7.5 percent was impressive, “the expectation is India can be better," Reserve Bank of India Governor Shaktikanta Das said at an International Monetary Fund event in Washington on Friday. He also said more structural reforms were needed in areas such as land and labor. India is expected to post real economic growth of 7.2 percent in the 2019-2020 fiscal year, and is seeing below-target inflation even as rising oil prices add an upside risk, the governor said. Still, he added that the inflationary impact from spikes in crude -- India’s biggest import -- can be exaggerated. “If there is a temporary spike of oil prices and again it comes down, then obviously the impact gets moderated," Das said. Any “sustained increase in crude prices will definitely have an impact on inflation, but we have to see how sustained it is.” - economic times

 IL&FS case: SFIO arrests Ramesh Bawa ; Serious Fraud Investigation Office (SFIO) on Saturday arrested Ramesh C Bawa, Ex-Managing Director and Chief Executive Officer of IL&FS Financial Services Ltd. (iFIN) in connection with the ongoing investigations into the affairs of IL&FS and its group entities. Bawa has been arrested on the grounds of abusing his powers in IFIN through his fraudulent conduct and in granting loans to entities which were not creditworthy and caused wrongful loss to the company and its creditors. It may be recalled that IL&FS Financial Services Ltd. had borrowings of around 17,500 crore from debt instruments and bank loans. Provident Funds, Pension Funds, Gratuity Funds, Mutual Funds, Public and Private Sector Banks, are among those who had invested in these debt instruments. - business line

‘ Pension, provident funds have ₹9,134-cr exposure to IL&FS’ : Pension and provident funds have an exposure of ₹9,134 crore to debt-ridden Infrastructure Leasing and Financial Services (IL&FS), but these cannot be repaid immediately as it will impact the IBC-led process. This disclosure was made by IL&FS to the National Appellate Company Law Tribunal in an affidavit, which will take up the matter for hearing on April 16. “Whilst the objective of payment to certain categories of creditors (provident funds and pension funds) is laudable, the Union of India and Respondent No 1 submit that the same is not feasible for the following reasons: any payment which is ad hoc in nature will be contrary to the Resolution Framework Report...and any payment which disregards the legal sanctity and priority of payments of creditors will destabilise the financial market and distort or disarray borrowings by corporates and lending by banks and financial institutions,” said IL&FS. - business line

 Unsecured lending categories grew at 31.3% in 2018, says CIBIL report : Unsecured lending categories like credit card loans, personal loans and consumer durable loans grew at 31.3 per cent in the fourth quarter of calendar year 2018 (Q4CY18), while secured lending — loan against property, auto loans and home loans — experienced a moderation in growth in the same period, according to a TransUnion CIBIL report on credit trends. In Q4CY18, loan against property, auto loans, and home loans grew 21.8 per cent, 17.4 per cent and 17.1 per cent, respectively. According to industry experts, the smaller base of unsecured lending helps it post a better growth rate, in percentage terms, than other loan segments. On the demand side, the link between income and expenditure is becoming weaker with rising aspirations especially among the younger working population, say experts. Hence, consumption spending is giving rise to unsecured shorter-term credit. - business standard

 Digital lender Branch Int’l upbeat about India growth : Mobile app-based lender Branch International has, within a month of its foray into the Indian market, witnessed a huge uptake in loan applications. We have, in the last 45-odd days, received close to 1.2-lakh loan applications,” Charishma Chotalia, General Manager, told BusinessLine. The San Francisco-based start-up received an NBFC licence in January this year. Though new to India, this company, which focuses on the micro-lending space through the mobile app, entered the African market almost two years back, where it remains the most downloaded app. Without sharing details on the amounts disbursed in India till date, Chotalia said she was awed by the response to the product offering, as it proved the business potential in the digital-lending space.“We will be adding additional finance products and not remain just a lending platform.” Asked if Branch could do without a brick-and mortar presence, she said: “We only focus on micro-lending, making access to finance possible for the billions still unreached by banks. “The power of technology is phenomenal. We’ve used data science to create a robust model to assess the applicant’s profile and a completely different model to underwrite the risk. - business line