Good Morning All.... 🌻
☕ 09.09.2020: Today's Banking / Financial News at a Glance
🍒 Government pushes state-run banks to step up loans to street vendors, say sources: Banks in Madhya Pradesh are scrambling to boost lending to street vendors in a bid to bolster numbers ahead of a visit this week by Prime Minister Narendra Modi, according to sources and letters seen by Reuters. A scheme that is part of a coronavirus relief package launched this year offers collateral-free loans of 10,000 rupees ($136.13) to help an estimated 5 million street vendors, but state-run banks mired in bad debt have been hesitant to lend."All bank branches in the state need to immediately accept all applications submitted under the street vendor scheme and disburse loans without delay," the Bank of India told some senior employees in a letter, in light of Modi's visit.Reuters reviewed similar memorandums and emails sent by Central Bank of India and Punjab & Sind Bank to employees in Madhya Pradesh, ordering them to sanction and disburse loans by Tuesday.The prime minister's office, the finance ministry, the Bank of India, the Central Bank of India and the Punjab & Sind Bank did not immediately respond to requests for comment. Several branches of state-run banks were open on Sunday to distribute loans, according to one banker and an email seen by Reuters.Bankers have also been warned of penalties if targets are not met, said two sources who spoke on condition of anonymity. "There is so much pressure from the government and senior management to sanction these loans right now that the due diligence process has gone for a toss," said one banker at a state-run bank. - Economic Times
🍒 SBI planning to launch loan product 'SAFAL' for organic cotton growers : State Bank of India is planning to launch a loan product, SAFAL, primarily focussed on organic cotton growers who don't have any credit history, said a top official of the country's largest lender. The bank is using Artificial Intelligence (AI) and Machine Learning (ML) in a big way for generating business, SBI managing director C S Setty said speaking at a Fintech conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI). "We want to go beyond this so-called retail segment and reach out to... like farmers. Today I am not only giving crop loans. We are about to launch a product called Safe and Fast Agriculture Loan (SAFAL). There is a company which brought all the organic cotton growers and created a database on the basis of blockchain," Setty said. He further said that any buyer of this cotton across the world can check whether the farmer actually is growing the organic cotton. "We are just taking the data and providing the credit linkage to them because they don't have the credit history. They are not borrowers of crop loans but we have the ability to pick them up because the technology has brought them together and provided the market visibility to them," he added. Citing another example of use of AI and ML, Setty said the bank has done 1.7 million pre-approved loans and 21,000 crore businesses have been booked under this product during the lockdown.- Economic Times
🍒 Bank of India launches ‘Signature Visa Debit Card’ for HNIs : Bank of India (BoI) on Monday launched “Signature Visa Debit Card” for the affluent/high net worth individuals maintaining an average quarterly balance of ₹10 lakhs and above. The public sector bank, in a statement, said this international contactless debit card will be available in metal and plastic variants. “This card will have a spending limit of up to ₹5 lakhs on POS & e-commerce and ₹1 lakh on ATM. “Other features include complimentary lounge access (2 per quarter) and offers on travel, retail, dining, lifestyle, entertainment, luxury hotels, reward points for online usage etc. It will also provide Insurance against fraudulent transactions,” the statement said. - Business Line
🍒 72% loans affected due to Covid-19, economic recovery improving: K V Kamath : A day after the Reserve Bank of India appointed committee outlined parameters to deal with 26 sectors buffeted by Covid-19, chairman K V Kamath speaking to CNBC TV18 said that 72 per cent of the loans were affected in the quadrants presented. However, he added that the "economic recovery is better than what we imagined 12 weeks ago." Speaking to CNBC TV18, Kamath said, "There was pressure on industries even before the coronavirus pandemic hit and the GDP contraction of nearly 25 per cent was not a surprise. The last two quarters have been most impacted by Covid-19." Speaking about the loan restructuring, the chairman said that there will be complications, but "sure that bankers will take a considered decision to reach an equitable proposal." He further added, "I am not second-guessing what clients and banks will do. Banks will have to recast loans in such a way that payments happen." - Business Standard
🍒 More than 42 cr poor get Rs 68,820 cr financial aid under PM Garib Kalyan Yojana : The Finance Ministry on Tuesday said more than 42 crore people have received Rs 68,820-crore financial assistance under the government's Pradhan Mantri Garib Kalyan Yojana (PMGKP) to protect poor and vulnerable from the impact of COVID-19 crisis. As part of the Rs 1.70 lakh crore PMGKP, announced by Finance Minister Nirmala Sitharaman on March 26, the government announced free foodgrains and cash payment to women, poor senior citizens and farmers. - economic times
🍒 State-run lenders pin hopes on festive season to drive demand : Public sector banks, which have been losing market share to private sector peers, are expecting the pent-up demand to drive their business in the festive season even as the overall sentiment remained somber. Some of the lenders such as Indian Bank and Bank of Maharashtra have announced concessions on interest rates and processing fees to encourage consumers in the car and home loan segments although the traction is most visible in the gold loan business, two senior bank officials familiar with the matter said. “We are witnessing a gradual resumption of commercial & business activities. We expect the rural economy to gain further traction in the coming months which is very promising especially on the back of good monsoons. We are already experiencing monthly growth in the retail loan portfolio after unlocking the economy,” Bank of Maharashtra chief executive AS Rajeev told ET. - economic times
🍒 SBI raises ₹4,000 cr via additional tier 1 bonds : India’s largest lender State Bank of India (SBI) on Monday raised around ₹4,000 crore in perpetual bonds at a record-low coupon, a sign that investors are willing to invest in these securities once again after the Yes Bank episode, which saw the private lender’s perpetual bonds being written off under its rescue plan. SBI raised the additional tier 1 (AT1) bonds at a coupon of 7.74%. AT1 bonds are unsecured, perpetual, high-risk bonds that banks issue to shore up their core capital base to meet the Basel III norms. Banks can skip paying interest on these bonds if their capital ratios fall below certain threshold levels. The Reserve Bank of India (RBI) can also ask a bank that is teetering on the brink to cancel its outstanding AT1 bonds without consulting its investors. - Live Mint
🍒 Kamath committee recommends graded approach to restructuring of stressed accounts : The K.V. Kamath committee on Monday recommended a graded approach to restructuring of stressed accounts based on severity of the impact on the borrowers. The committee has allowed banks to classify the accounts into mild, moderate and severe as recommended by the committee. In line with the mandate given by the RBI, Kamath committee has identified four financial parameters including total outside liabilities to adjusted tangible networth, total debt to EBITDA, debt service coverage ratio (DSCR), average debt service coverage ratio (ADSCR). “The sector-specific thresholds (ceilings or floors, as the case may be) for each of the above key ratios that should be considered by the lending institutions in the resolution assumptions with respect to an eligible borrower," said the committee. - Live Mint
🍒 'Sufficient comfort': State-owned lenders back RBI loan restructuring norms : State-owned bank executives on Tuesday said that the loan restructuring parameters for corporate accounts announced by the Reserve Bank of India (RBI) will be favour\able to the financial sector as it will come to the aid of companies with strong financial background. Bank executives said that the financial parameters prescribed by the RBI are relaxed compared to what the lenders follow at the time of loan restructuring at present. “The RBI has announced relaxed ratios giving comfort to lenders to go for loan restructuring. In the normal circumstances, the range is higher. By and large, the recommendations are good and will be beneficial for accounts impacted by the COVID-19 pandemic,” a chief executive of a large state-owned bank said. - Business Standard
🍒 ESAF Bank announces fintech conclave : ESAF Small Finance Bank has announced its first fintech conclave providing fintech firms a platform to showcase their new digital banking solutions that facilitate last-mile financial inclusion. The conclave endorses entrepreneurship in the banking sector and is open for start-ups, established and growth-phase technology firms, social innovators and entrepreneurs having innovative solutions that align with ESAF’s core mission of providing responsive banking services to underserved and unserved populations. The competent finalist can eventually become a long-term strategic partner of the bank as the co-creator of new financial digital products that will be the latest enhancement in the banking sector, a press release said. - Business Line
🍒 ED slaps ₹100-crore fine on Standard Chartered for 2007 deal : India’s anti-money laundering agency fined Standard Chartered Plc ₹100 crore ($13.6 million) for breaking foreign exchange rules when it worked on the takeover of a local bank, marking one of the country’s biggest penalties imposed on an overseas lender. An eight-year probe found that Standard Chartered violated the so-called Foreign Exchange Management Act — which monitors offshore financial transactions — when it worked with a group of investors to buy a stake in Tamilnad Mercantile Bank Ltd in 2007, according to an August order from India’s enforcement agency that was seen by Bloomberg. Senior officials at Standard Chartered saw an investment in TMB shares as an opportunity that might ripen into an eventually larger ownership for the bank, Sushil Kumar, the enforcement agency’s special director, said in the order. - Business Line
🍒 LIC union protests Chidambaram’s disinvestment tweet : A trade union of Life Insurance Corporation (LIC) workers affiliated with the INTUC, the trade union of the Congress, has written to party’s former president Rahul Gandhi against a tweet by former finance minister P Chidambaram asking the Centre to accelerate disinvestment. The union has decided to write to all Congress MPs to oppose privatisation of public sector enterprises when Parliament meets next week for the Monsoon Session. General secretary of LIC Employees Union and national organising secretary of INTUC Deepak Sharma said in the letter that Chidambaram’s statement fogged Congress’s stand on the issue. A day after Chidambaram’s tweet, Rahul Gandhi tweeted on Tuesday that the Prime Minister “is selling country’s assets to solve problems created by himself,” he said and termed the move to sell LIC as “shameless.” - Business Line
🍒 Kamath panel better than CDR, but may delay identifying stress: Experts : The K V Kamath panel's loan recast recommendations are better than the erstwhile corporate debt restructuring (CDR) mechanism, but these may result in banks postponing recognition of stress through short-term relief, analysts said on Tuesday. In the absence of an economic revival and sector-specific packages to be introduced by the government, the new mechanism will be "challenging" and may also end up induce uncertainty in the credit markets as banks focus on working out the recast plans in the limited window, they said. The Reserve Bank of India (RBI) has operationalised the guidelines from Tuesday, which give relief to 26 listed sectors affected by the coronavirus pandemic and stress on banks factoring in leverage, liquidity and debt serviceability before admitting a case. - Business Standard
🍒 RBI sets debt recast rules for Covid-19-hit Indian companies : Lenders will have to consider financial parameters such as liquidity and debt-servicing ratios while preparing a restructuring plan for loan accounts that have turned bad due to the coronavirus pandemic, the Reserve Bank of India said following the recommendations of an external panel. The central bank identified 26 sectors affected by the pandemic such as auto, aviation and tourism, which can be offered a resolution subject to criteria including debt-coverage ratio, outstanding liabilities and net worth at pre-Covid levels. “The compliance in regard to meeting the agreed ratios must be monitored as financial covenants on an ongoing basis, and during subsequent credit reviews," the RBI said in a statement. “Any such breach not rectified within a reasonable period, in terms of the loan contract, will be considered as financial difficulty." - Live Mint
🍒 Bank of Maharashtra employee unions write to Finance Minister seeking clarity on privatisation :In the letter, written by All India Bank of Maharashtra Employees Federation (AIBOMEF) and Bank of Maharashtra Officers Association (BOMOA), the unions wrote that the said media report has created uncertainties in the minds of bank's employees and customers. wo employee unions of state-run Bank of Maharashtra (BoM) have written a letter to Finance Minister Nirmala Sitharaman seeking clarification on the government’s stand on privatisation of the Pune-based lender. Recently, there were media reports that the government wants to expedite privatisation of four state-run banks including Bank of Maharashtra and UCO Bank. - financial express
🍒 RBI broadly accepts Kamath panel recommendations; specifies parameters for loan restructuring : The Reserve Bank on Monday specified five financial ratios and sector-specific thresholds for resolution of COVID-19-related stressed assets in 26 sectors, including auto components, aviation and tourism. The Reserve Bank had on August 7 announced the constitution of a panel under the chairmanship of veteran banker K V Kamath to make recommendations on the required financial parameters to be factored in under the ‘Resolution Framework for Covid19-related Stress’ along with sector specific benchmark ranges. The circular issued by the Reserve Bank for resolution of the stressed assets is based on the recommendations of the K V Kamath committee, which submitted its report on September 4. “The recommendations of the Committee have been broadly accepted by the Reserve Bank,” the central bank said in a release.- financial express
🍒 Debt restructure: FIDC seeks waiver on 10% additional provisioning : Finance Industry Development Council (FIDC), the umbrella body for non-banking financial companies (NBFCs), has written to finance minister Nirmala Sitharaman, seeking a waiver on the additional 10% provisioning requirement for one-time restructuring of loans. The Reserve Bank of India (RBI) had earlier mandated banks and NBFCs to provide 10% extra capital for restructuring of loan accounts impacted by Covid-19. The regulator on August 6 had allowed restructuring of personal and corporate loans with strict barriers. The letter mentioned that NBFCs follow Indian accounting standard (IND AS) norms on provisioning for credit losses. “These provisions are much higher than RBI norms,” FIDC said. “IndAS norms require provisioning to be done for credit losses on historical average and own experience of respective lenders and therefore, all accounts are adequately provided for,” it added. - financial express
🍒 Financial protection: Max Life Insurance launches Covid one-year term rider : Max Life Insurance Company Ltd (Max Life), a private life insurer, has come up with a ‘Covid-19 One-Year Term Rider’ to help customers (18 to 65 years) looking to protect themselves against the pandemic. This is the life insurance industry’s first rider for Covid-19 and offers both diagnostics benefit (fixed lump sum of 20 per cent of rider sum assured) and also death cover due to Covid-19 (100 per cent of sum assured), V Viswanand, Deputy Managing Director, Max Life, told BusinessLine.The newly launched rider, which comes with an annualised premium of ₹320 ( including GST) for a sum assured of ₹ 1 lakh, can be attached to 12 of Max Life’s existing products ranging from term plans, savings and income plans to retirement plans. “For diagnosis we have kept it very simple. We look for Covid-19 report from authorised laboratories. No medical bills are required or no home quarantine proofs. Lump sum is provided upfront on diagnosis. This rider will not cover Covid-19 incident in the first 15 days, and will be valid for a period of one year,” he said. - Business Line
🍒 American Express launches initiative to help small merchants : American Express has announced a commitment of more than $200 million to help jumpstart spending at small merchants, many of whom were impacted by Covid-19. To encourage consumers to buy from small shops, American Express is offering a ₹300 cashback for the enrolled India Cardmembers after they spend ₹1,500 or more at any eligible small merchant when they shop in-store, up to five times beginning now till November 30.In India, the Shop Small campaign covers small and medium-sized merchants across Delhi, Mumbai and Bengaluru covering retail shops, healthcare services, restaurants and hotels. American Express has also made it easier for its Cardmembers to locate small merchants that are open for in-store purchases in their vicinity through a Shop Small Map. - Business Line
🍒 Gold prices rise marginally to touch Rs 51,075 per 10 gram; silver down by Rs 192 : Gold prices rose by Rs 57 to touch Rs 51,075 per 10 gram in the Mumbai market on rupee depreciation and lacklustre global cues. The yellow metal traded under pressure tracking firmness in the dollar index and uncertainty in US-China ties. The rate of 10 gram 22-carat gold in Mumbai was Rs 46,785 plus 3 percent GST, while 24-carat 10 gram was Rs 51,075 plus GST. The 18-carat gold quoted at Rs 38,306 plus GST in the retail marke. Silver prices declined by Rs 192 to Rs 64,825 per kg from its closing on September 7. - moneycontrol.
🍒 Sensex, Nifty edge lower in choppy session : The 30-share BSE benchmark Sensex opened firm at 38,498.07, touched an intraday high of 38,476.48, before settling at 38,365.35, down by 51.88 points from its previous close. It ended yesterday at 38,417.23. On the NSE, the Nifty slipped 37.70 points or 0.33 per cent to 11,317.35. While Metal, Telecom, Banking, Realty and Auto stocks met with losses, IT and Oil& Gas has achieved marginal gains today. Tata Steel was the top loser in the Sensex pack, shedding around 4.50 per cent, followed by Bharti Airtel, Axis Bank, ONGC, SBI and Sun Pharma.On the other hand, HCL Tech, Infosys, Reliance, Tech Mahindra and TCS were among the gainers.IT stocks gained after Citi's positive stance on the IT sector. IT stocks were led by gains in L&T Information Tech, TCS, Infosys and Wipro. The Nifty metal Index fell 3 percent dragged by the NALCO, SAIL and Tata Steel.
🍒 Rupee falls 29 paise to 73.64 in opening session : The rupee depreciated 29 paise to 73.64 against the US dollar in opening deals on Tuesday amid a rise in demand for the American currency from banks and importers. Forex traders said a strengthening American currency and foreign fund outflows weighed on the local unit. At the interbank forex market, the Indian currency started off on a tepid note at 73.63, then fell further to 73.64 against the greenback, down 29 paise over its previous close.
Have a Good day.."🌻
कोई टिप्पणी नहीं:
एक टिप्पणी भेजें