BANKING - 2018 MAY

May 1

UPI money transactions cross 100-crore mark within two years
The number of transactions on the National Payment Corporation of India’s (NPCI) Unified Payment Interface (UPI), which is a mobile-only digital payment ecosystem, has crossed the 100-crore mark within two years of its launch.
The latest figures released by the NPCI show that the UPI ecosystem handled 19 crore transactions amounting to Rs. 27,021.85 crore in April alone.
Launched in August 2016, the cumulative number of UPI transactions since the beginning stood at 112 crore at the end of April.

May 2

High NPA ratio proves PSBs did not make enough provisions: RBI
Public sector banks did not make enough provisions as seen from their high net non-performing asset (NPA) ratio of 6.9 per cent (against 2.2 per cent and 0.6 per cent for private sector and foreign banks, respectively) at the end of March 2017.
The gross NPA ratio of public sector banks increased from 3.8 per cent at March-end 2013 to 5.4 per cent at March-end 2015 and further to 12.5 per cent at March-end 2017, while that of private sector banks increased from 1.9 per cent to 2.2 per cent to 3.5 per cent over the same period.

May 3

SBI consolidates advertising account with Rediffusion-Y&R
State Bank of India (SBI) has consolidated its advertising account for the first time, with the entire business going to WPP’s Rediffusion-Y&R.
The largest public sector bank earlier had a panel of seven agencies, including heavyweights like Adfactors Advertising, Interpub, DDB Mudra, RK Swamy, AdSyndicate, Crayons and Mode, handling its creative business.
Industry insiders estimate that SBI will spend around Rs 100 crore across print, television and digital advertising in 2018.

May 4

RBI allows FPIs to invest in treasury bills
Easing foreign investment rules, the Reserve Bank permitted FPIs to invest in treasury bills issued by the central government.
However, the foreign portfolio investors (FPIs) will have to ensure that their exposure in government securities as well as corporate bonds of less than one year maturity will remain below 20 per cent.
In a notification, the RBI also asked the FPIs to bring down their total exposure in debt instruments (G-secs, state development loans or, corporate bonds) with one-year maturity to below 20 per cent within six months.

May 6

RBI to banks: Share foreign exchange data with DRI
The Reserve Bank of India has asked banks authorised to deal in foreign exchange (Authorised Dealer-I Banks) to share data with the Directorate of Revenue Intelligence (DRI).
This directive comes in the wake of the government making rules (in December 2017) to exercise powers conferred by the relevant sections of the Customs Act, requiring a banking company to furnish, electronically, information relating to foreign exchange transactions made or received by any person to the receiving authority (DRI).

10-year bond rallies post RBI's Rs 10,000 crore debt purchase announcement
Reserve Bank of India (RBI) announced that, it will buy Rs 10,000 crore of government bonds through open market operation (OMO).
RBI made this decision after failing to sell all the debt it had offered to bidders. It was the third consecutive week when the RBI couldn’t sell everything on offer which lead to a spike in bond yields.
The decision is based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward.
This will infuse more liquidity into the system against the backdrop of persistently high bond yields.
The 10-year government bond yield increased to 7.75 percent from 7.74 percent before the auction result was announced. It had ended at 7.73 per cent on 3rd May 2018.
Eligible participants should submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

Growth in bank deposits falls to five-decade low
Bank deposit growth fell to a five-decade low in fiscal year ended March 2018 but attractive of other savings methods such as mutual funds and insurance reduced banking competitiveness.
A total deposit of Rs. 114 lakh crore was reported in the last fiscal. The data showed that cumulative deposits in the banking system grew a mere 6.7% in 2017-18, the lowest since fiscal 1963.
During November-December 2016, banks received Rs. 15.28 lakh crore as people deposited high denomination currency notes that were withdrawn from circulation. As a result, aggregate deposits in the fiscal ended March 2017 grew 15.8% to Rs. 108 lakh crore. This pace of growth has now come down by 6.7% with deposits aggregating Rs. 114 lakh crore.
Total mutual fund assets under management have increased 22% to Rs. 21.36 lakh crore in March 2018 from Rs. 17.55 lakh crore in March 2017.

May 8

SBI General Insurance net rises to Rs. 396 crore
SBI General Insurance has registered a 159 per cent increase in net profit at Rs. 396 crore in 2017-18 against Rs. 153 crore in the previous year.
This also includes an extraordinary income of Rs. 131 crore. It also secured underwriting profit of Rs. 32 crore in 2017-18 compared to an underwriting loss of Rs. 197 crore in 2016-17.
Its gross written premium increased by 36 per cent to Rs. 3,553 crore in 2017-18, and its solvency ratio improved to 2.54 per cent in the last fiscal.
The assets under management for 2017-18 increased to Rs. 5,292 crore against Rs. 4,362 crore in the previous fiscal.

May 9

YES Bank to launch water-security programme
YES Bank is all set to roll out a capacity building project with farmers in Haryana and Rajasthan under its ‘Livelihood and Water Security’.
Agriculture productivity has come under pressure during the last couple of years because of climate change and water security.
This initiative is aimed at improving farmers’ access to finance, ensuring effective use of digital banking resources, and imparting good agricultural practices.

May 11

United Bank of India seeks to raise Rs. 1,500 crore to expand
United Bank of India plans to raise Rs. 1,500 crore in one or more tranches through a qualified institutional placement (QIP), public issue or rights issue, to fund its growth needs during this fiscal.
The bank’s board approved raising of equity capital, and the proposal will be subject to shareholders’ approval in the ensuing annual general meeting.
The bank expects to grow by 12-14 per cent during the current fiscal, and the capital would be used to fund its growth needs.

May 12

Fino Payments Bank launches digital suite
In a bid to expand its footprint in the digital banking and payments space, Fino Payments Bank has launched a digital services suite.
The suite includes BPay app, which was launched in September 2017 for digital transition of customers from assisted to self-service mode.
In addition to BPay, the suite includes Unified Payment Interface (UPI), BHIM app, which has proved to be a game changer in peer-to-peer and merchant payments.
The suit also includes net banking facility, a Digi Savings Account which can be opened online only by providing Aadhaar number and PAN card and FasTag to make digital payments at national highway toll plazas.

May 13

RBI Restricts Dena Bank From Lending, Hiring
The Reserve Bank of India (RBI) has initiated prompt corrective action against public sector lender Dena Bank in view of high non-performing loans, restricting the bank from giving fresh credit and new hiring.
The public sector lender0020reported widening of its net loss to Rs 1,225.42 crore in the March quarter on mounting bad loans and higher provisioning to cover them.
The net loss stood at Rs 575.26 crore in the January-March quarter of 2016-17.
Sequentially, the loss widened from Rs 380.07 crore in December quarter of 2017-18.

May 14

Chinese state-run bank launches India-dedicated investment fund
A state-run Chinese bank has launched the country’s first India-dedicated publicly offered investment fund; the Indian market offers the best opportunity for Chinese investors due to the prospects of double-digit growth.
The fund, named the Industrial and Commercial Bank of China (ICBC) Credit Suisse India Market Fund, will “invest in exchange-traded funds listed on more than 20 exchanges in Europe and the U.S. that are based on the Indian market”.
It is China’s first publicly offered fund for investing in India, state-run Global Times reported.
The fund will invest in the future of the Indian economy and track the distribution of the industrial structure across the Indian market.
The move, regarded as significant by observers to boost investments in India, comes just about a fortnight after the first ever informal summit between Prime Minister Narendra Modi and Chinese President Xi Jinping at Wuhan.

May 15

RBI puts fresh lending restrictions on Allahabad Bank
After the Reserve Bank of India (RBI) debarred Dena Bank from fresh lending, it has placed additional restrictions on Kolkata-based Allahabad Bank, which is under prompt corrective action (PCA) since January this year. The regulator has debarred the bank from high-risk lending and raising high-cost deposits.
The RBI has advised the bank to restrict expansion of risk-weighted assets, reduce exposure to unrated and high-risk advances.
The RBI has also restricted the bank from creation of non-banking assets and has advised it to restrict from accessing or renewing wholesale or costly deposits or certificate of deposits.
World Bank agrees to a grant for Bangladesh
The World Bank (WB) is going to provide Bangladesh a grant to meet the basic needs of around one million Rohingyas who fled their homeland Myanmar.
The World Bank has agreed to provide Bangladesh the full fund as grant money at its spring meeting held in April in the US.
However, neither the government nor the WB could confirm the amount.
A WB team will be visiting Bangladesh to discuss the issue with the government.

Paytm introduces automatic recurring payments
Paytm introduced automatic recurring payments, a new feature that lets users configure the payments app to pay for periodic recurring expenses automatically.
Similar to standing instructions for bank accounts, the ‘My Payments’ feature can be used for high-value payments for a variety of cases.
Customers make regular recurring payments such as house rent, maid/driver’s salary, and milk or newspaper vendor payments online. This has led to a major surge in our bank transfer service.
They have simplified these payments with ‘My Payments’ and are expecting 6X growth owing to this rapid shift in consumer behaviour in favour of going cashless.
The company expects the feature to significantly boost bank-to-bank transactions on Paytm, which it sees crossing Rs60,000 crore a month by December.

YES Bank launches Agenda 25×25 for budding women entrepreneurs in India
Private sector bank, Yes Bank and its think tank YES Global Institute have launched ‘Agenda 25×25’, aimed at creating a synergetic startup environment for budding women entrepreneurs in India.
YES Global Institute Annual Startup Conclave hosted in partnership with NITI Aayog, Invest India, Startup India and Atal Innovation Mission.
’Agenda 25X25’ is geared towards ensuring that by 2025, at least 25% of all entrepreneurs in India are women.
A study by YES Bank-YES Global Institute, titled ‘Putting Women First: Building the Start-up Ecosystem Ground Up’ emphasised on the need to build a 10 Step Developmental Model focused on empowering women innovators, synergizing collaborations, catalyzing investments and increasing economic opportunities.

May 16

Karnataka Bank to sell part of stake in insurance co
Karnataka Bank will sell 8.26 % stake in Universal Sompo General Insurance to Dabur Investment Corporation and Sompo Japan.
This transaction is waiting for approval from Insurance Regulatory and Development Authority of India (IRDAI).
After this transaction, Karnataka Bank’s stake in the general insurance company will reduce to 6 percent from the current 14.26 percent.
Sompo Japan’s stake will increase to 34.61 percent from 28.42 percent and Dabur Investment Corporation’s stake will increase to 12.81 percent from 10.74 percent.

May 17

SBI Card base grows 20% in 8 months on small towns
Smaller towns are driving growth for SBI Cards (a subsidiary of State Bank of India) which has been increasing its card numbers at a compounded annual growth rate (CAGR) of 40%.
In terms of spending, Cardholders in centres outside the top 10 cities account for 45% of spending.
Primary reason behind this surge is the penetration of mobile-phone internet which accounts for 20% of spending from smaller towns.
SBI cards, the second-largest credit card issuer after HDFC Bank currently holds 16% market share (in terms of number of cards) and is the only stand-alone credit card company in India.

May 18

RBI tweaks norms for setting up of IFSC Banking Units
Modifying the norms for setting up IFSC Banking Units, the parent bank will be required to provide and maintain at all times a minimum capital of USD 20 million to its IBU.
In April 2015, the Reserve Bank had formulated a scheme for setting up of International Financial Services Centres (IFSC) Banking Units (IBUs) by banks in IFSCs.
Modification has been made based on suggestions from stakeholders to consider minimum prescribed regulatory capital at the parent level rather than at the IBU level.

RBI prescribes 100% net stable funding ratio for banks
RBI prescribes 100% net stable funding ratio for banks Reserve Bank of India (RBI) has released final guidelines prescribing 100 percent Net Stable Funding Ratio (NSFR) for banks aimed at maintaining adequate liquidity for more resilience.
NSFR is a long-term liquidity measurement included in the Basel III liquidity standards.
It is defined as the amount of Available Stable Funding (ASF) relative to the amount of required stable funding (RSF).
A portion of capital and liabilities which has been assessed to be reliable over a year is referred to as ASF, while RSF is bank’s liquidity position required to honour maturities of the various assets and other off-balance sheet exposures.
RBI’s 100 per cent NSFR guideline requires banks to fund their activities with more stable sources of funding on an ongoing basis.

May 19

NABARD Sanctions Solar street lighting system in Arunachal Pradesh
The National Bank for Agriculture and Rural Development (NABARD) has sanctioned LED Solar Street Lighting system for Arunachal Pradesh under its Rural Infrastructure Development Fund with a total grant of Rs 87.83 lakh.
The project would be implemented in the four districts of the state Tirap, Longding, Namsai and Tawang.
Chief Minister Pema Khandu launched the scheme in presence of NABARD Chairman Harsh Kumar Bhanwala.

May 20

World Bank extends $300 million credit to scale up energy efficiency program
The World Bank Board of Executive Directors approved a $220 million (Rs 1,496 crore) loan and an $80 million (Rs 544 crore) guarantee for the India Energy Efficiency Scale-Up Program.
The Program, to be implemented by the Energy Efficiency Services Limited (EESL), will help scale up the deployment of energy saving measures in residential and public sectors, strengthen EESL’s institutional capacity, and enhance its access to commercial financing.
India’s climate change commitments to reduce carbon intensity by 33-35 per cent by 2030 from 2005 level will require a significant focus on energy efficiency improvements.
The investments under the Program are expected to avoid lifetime greenhouse gas emissions of 170 million tonnes of CO2 and contribute to avoiding an estimated 10 GW of additional generation capacity.

May 21

World Bank extends $300 million credit to scale up energy efficiency program
The World Bank Board of Executive Directors approved a $220 million (Rs 1,496 crore) loan and an $80 million (Rs 544 crore) guarantee for the India Energy Efficiency Scale-Up Program.
The Program, to be implemented by the Energy Efficiency Services Limited (EESL), will help scale up the deployment of energy saving measures in residential and public sectors, strengthen EESL’s institutional capacity, and enhance its access to commercial financing.
India’s climate change commitments to reduce carbon intensity by 33-35 per cent by 2030 from 2005 level will require a significant focus on energy efficiency improvements.
The investments under the Program are expected to avoid lifetime greenhouse gas emissions of 170 million tonnes of CO2 and contribute to avoiding an estimated 10 GW of additional generation capacity.

May 22

Bank of Baroda locates major operations at GIFT City
Bank of Baroda has successfully located most of its operational activities at a shared service center (SSC) at the GIFT City near Ahmedabad.
The bank will offer its services including retail loan processing, deposit account opening, forex and call center from the SSC, which will have staff strength of 200.
The bank will thus become one of the largest employers in the Ahmedabad-Gandhinagar region.
The bank had taken 20,000 sq, ft of office space in GIFT City, making it the first Indian bank to move several key operations to the smart city.

May 23

Moody’s downgrades PNB’s deposit ratings
Moody’s Investors Service has downgraded the local and foreign currency deposit ratings of fraud-hit Punjab National Bank.
The global credit rating agency has also downgraded the bank’s baseline credit assessment (BCA) and Adjusted BCA to B1 from Ba3.
These actions complete Moody’s review of PNB’s ratings initiated, following the bank’s announcement of the discovery of some fraudulent and unauthorised transactions (Nirav Modi and Mehul Choksi-perpetrated fraud) amounting to Rs. 14,400 crore ($2.2 billion) in February and March 2018.

May 24

Bank credit grows 12.64%, deposits at 7.61%
Banks’ credit grew by 12.64 per cent year-on-year to Rs. 85, 51,099 crore in the fortnight ended May 11, 2018.
In the similar fortnight ended May 12, 2017, banks’ advances stood at Rs. 75,90,941 crore.
In the previous fortnight ended April 27, 2018, bank credit had increased by 12.61 per cent to Rs. 85,38,570 crore, from Rs. 75,82,391 crore in the period ended April 28, 2017.
Banks’ deposits grew by 7.61 per cent to Rs. 1,13,92,165 crore in the fortnight ended May 11, 2018, compared with Rs. 1,05,86,083 crore in the fortnight ended May 12, 2017, the data by Reserve Bank of India (RBI) showed.

May 25

Yes Bank empanelled as 'Settlement Bank' for NSE
Yes Bank has received approval from National Stock Exchange to be empanelled as 'Settlement Bank' for National Securities Clearing Corporation (NSCCL), a wholly owned subsidiary of NSE.
YES BANK will provide comprehensive Settlement & Clearing services suitable to the members by leveraging its state-of-the-art Technology platform coupled with superior service excellence and constant innovation.
The services will include Electronic Funds Transfer (ETF) facilities and 'anywhere' banking.
YES BANK will provide facilities including issuing bank guarantees, credit facilities and inter-bank funds transfer as well as free of cost funds transfer across centers for NSE' s members.

May 26

ICICI Bank's digital push: sets up innovation lab, enters fintech tie-ups
ICICI Bank is taking the digital route for growth, by partnering and investing in financial technology companies, as well as, setting up an innovation lab and a team to conceive digital solutions.
82 per cent of the bank’s transactions by savings account customers are currently digital, excluding ATM transactions.
The bank wants to ‘think like a tech company’. The bank has set up innovation labs in Mumbai and Hyderabad, with a team of 22 people, headed by Rohan Angrish, who was previously the Chief Technology Officer for digital lending firm Capital Float.

May 27

Paytm Bank to fan out 1 lakh ‘mobile bankers’ across India in a year
Financial services major Paytm may now be following a similar model.
The Paytm Payments Bank, India’s first bank providing zero balance accounts and zero charges on digital transactions, plans to train and fan out one lakh banking business correspondents, including women, in a year across India’s Tier-I and II towns, villages and remote areas.
They will function as ‘mobile banking agents’ to the unbanked people.

May 28

RBI asks Rupee Co-op Bank to continue restricted services for 3 more months
Pune-based Rupee Co-operative Bank has been asked by the Reserve Bank to continue giving its services with restrictions for three more months till August this year in view of its financial position.
The Reserve Bank of India (RBI) had first imposed restrictions on the bank from February 22, 2013, to August 21, 2013, and extended it on eight occasions six months each, and four occasions for three months each.
The co-operative bank was given its last extension for six months between November 22, 2017, and May 31, 2018.

May 29

India signs Loan Agreement with the World Bank for USD 21.7 Million for Strengthening the Public Financial Management in Rajasthan Project
An Agreement for IBRD Credit of USD 21.7 Million from World Bank for the Strengthening of Public Financial Management in Rajasthan Project was signed in New Delhi by Shri Sameer Kumar Khare, Joint Secretary (FB and ADB), Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Mr. Hisham Abdo, Acting Country Director, World Bank (India) on behalf of the World Bank.
The Implementing Entity Agreement was signed by the Secretary, Finance (Budget) on behalf of the Government of Rajasthan, and the Acting Country Director (India) on behalf of the World Bank.
The Project size is approximately USD 31 million, of which USD 21.7 million will be financed by the World Bank, and the remaining amount will be funded-out of the State Budget. The Project duration is 5 years.

May 30

SBI hikes fixed deposit interest rates for select tenures
The country's largest lender State Bank of India (SBI) has increased its fixed deposit interest rates on select tenures. The range of hike in the rates starts from 0.05 per cent (5 bps or basis points) to 0.25 per cent (25 bps). The new interest rates came into effect from May 28.
SBI, in its website, stated that it will offer 6.65 per cent interest on term deposits for one-to-two-year against 6.4 per cent earlier.
It also mentioned that deposits between two and three years will fetch 6.65 per cent instead of 6.60 per cent earlier. For senior citizens, one-to-two-year deposits will earn 7.15 per cent interest against 6.9 per cent. FDs between two and three years will also get 7.15 per cent.

May 31

FB set to launch WhatsApp Pay
Facebook is set to offer its WhatsApp payment services to the entire country as early as next week in an attempt to win market share, even though its partners aren’t all ready.
The messaging app will partner HDFC Bank, ICICI Bank and Axis Bank to process the transfers, and SBI will join once it has the necessary systems in place.
Facebook was aiming for a full rollout with four partners, but decided to go ahead with just three as its rivals were racing ahead.
The entry of Whatsapp into India’s payments space has been likened to WeChat, which reshaped payments in China when it expanded beyond messaging.
The pilot version of WhatsApp Pay started with 1 million users in February received rave reviews, threatening the market share of Google Tez and Alibaba-backed Paytm, which lack the benefits of a social network.


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