BANKING - 2018 OCTOBER

October 1

SBI cuts daily ATM cash withdrawal limit to Rs 20,000 effective from October 31
In an attempt to address the growing incidence of ATM frauds and boost digital transactions, the country's largest lender has just halved its daily ATM withdrawal limit. The State Bank of India has lowered the limit on its Classic Debit Card to Rs 20,000 a day, from Rs 40,000 previously. The lower limit will be effective from October 31 and will impact many SBI customers since these cards constitute a sizeable chunk of the bank's card portfolio.

IMF, WB and WTO seek removal of barriers to service trade
The International Monetary Fund, the World Bank and the World Trade Organization collectively sought liberalization of the global service sector, asserting that the barriers to these services trade currently is roughly as high as those to trade in goods about a half century ago.
Services comprise some two-thirds of global GDP and employment. Yet the limited opening of service sectors to foreign competition impedes trade and productivity growth throughout the sector and the broader economy.

Paytm tops UPI payments with over 33% market share
Alibaba and SoftBank-backed Paytm registered over 137 million UPI transactions, becoming the leading contributor to Unified Payments Interface (UPI) payments with over 33 per cent of the overall market share.
One97 Communications Limited that owns the brand Paytm is enabling BHIM UPI for offline payments and over five million offline merchants, out of its 9.5 million merchant-bases, now accept Paytm UPI.
More than 20 per cent of all payments on Paytm are made using BHIM UPI for mobile recharge and payments, electricity and water bills and DTH recharges, among others.

October 2

RBI to infuse Rs. 36,000 crore to ease liquidity
The Reserve Bank of India (RBI) has decided to infuse Rs. 36,000 through open market purchase of bonds as liquidity has tightened due to an uptick in loan demand in the festive season.
Based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, RBI has decided to conduct purchase of Government securities under Open Market Operations (OMOs) for an aggregate amount of Rs. 360 billion.

October 3

SIDBI launches awareness campaign to promote entrepreneurship
The Small Industries Development Bank of India (SIDBI) has launched a national level entrepreneurship awareness campaign 'Udyam Abhilasha' to promote entrepreneurship in the 115 aspirational districts identified by NITI Aayog.
The campaign was launched on the birth anniversary of Mahatma Gandhi.
The SIDBI has partnered with CSC e-Governance Services India Limited, a special purpose vehicle, (CSC SPV) set up by the Ministry of Electronics and IT for implementing the campaign through their CSCs.

State Bank of Mauritius' India operations hit by cyber fraud
India operations of State Bank of Mauritius were hit by cyber fraud. No loss has been caused to customers and the Indian business operations would continue as normal.
The India operations of SBM Bank (Mauritius) Ltd were the subject of cyber fraud with a maximum potential loss of USD 14 million.
The SBM Group remains well capitalized and has sufficient liquidity to continue to finance its future plans.

MobiKwik's 'Boost' to offer instant loan in 90 seconds
MobiKwik announced the launch of its breakthrough product called ‘Boost’ that offers instant loan approval and disbursal to MobiKwik users.
This is the first-of-its-kind of credit disbursal product, wherein loans of upto Rs 60,000 are sanctioned as well as disbursed in a matter of 90 seconds. MobiKwik has partnered with a number of NBFCs to offer this service to its users. MobiKwik is the first wallet player to disburse loan amount in the user’s mobile wallet.

RBI clears setting up of 'Kerala Bank'; state expects Rs 650 billion in deposits
The Reserve Bank of India (RBI) gave its nod to start that Kerala Bank, a venture proposed by the Kerala government.
It will be Kerala Cooperative Bank, but will be referred to as Kerala Bank. It will have all the facilities of a commercial bank, including ATMs. It will be implemented fast.
Our Kerala Bank gets the green signal from Reserve Bank of India. It will be safe and reliable banking for everyone. That's our motto.
Kerala has consolidated the State Cooperative Bank and the 14 district cooperative banks in the state.

First Abu Dhabi Bank ties up with ToneTag for sound based payments
Sound-based payment services provider ToneTag has tied up with First Abu Dhabi Bank, the largest bank in the UAE to deploy sound based contactless payments. ToneTag is backed by Amazon, Mastercard and Reliance Capital.
FAB customers can pay using sound through the PayIt app. This technology allows PayIt app users to make cardless and cashless payments at merchant outlets from their mobile phones. With ToneTag, FAB is offering sound wave-based proximity payment solutions to their clients across all seven Emirates of UAE.

October 4

RBI Allows State-Owned Oil Companies To Borrow Long Term Working Capital
The Reserve Bank of India (RBI) has allowed state-owned oil companies to borrow long-term working capital from overseas.
 RBI relaxed the policy on borrowing up to 10 billion US dollar from the overseas by the state-owned fuel retailers. 
Till now oil marketing companies including Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd, were not allowed to raise External Commercial Borrowing (ECB) for working capital needs on a long-term basis.
SBI halves daily ATM withdrawal limit to Rs 20,000 to curb frauds
The State Bank of India has lowered the limit on its Classic Debit Card to Rs 20,000 a day, from Rs 40,000 previously.
The lower limit will be effective from October 31 and will impact many SBI customers since these cards constitute a sizeable chunk of the bank's card portfolio.

October 5

RBI keeps repo rate unchanged at 6.5%; Rupee breaches 74 mark against US dollar
The Monetary Policy Committee of Reserve Bank of India (RBI) changed its stance from 'neutral' to 'calibrated tightening'.
In an unexpected move, the Monetary Policy Committee of Reserve Bank of India (RBI) kept the repo rate unchanged at 6.5 per cent. The MPC changed the stance from 'neutral' to 'calibrated tightening'. Soon after the announcement, the Indian rupee tumbled to its all-time low of 74.10 against the US dollar.
In its Fourth Bi-monthly Monetary Policy Statement for 2018-19, according to the central bank ,the decision of the MPC is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent.

Categories
4th Bi-monthly in per cent
3rd Bi-monthly in per cent
CLR
4
4
SLR
19.5
19.5
Repo Rate
6.5
6.5
Reverse Repo Rate
6.25
6.25
MSF
6.75
6.75
Bank Rate

6.75
6.75

CRISIL Upgrades AU Bank's Long Term Debt Instruments Rating to AA- With Stable Outlook
AU Small Finance Bank, one the fastest growing new age banks, today received another upgrade for its long-term debt instruments from CRISIL. Its rating has moved up from CRISIL A+ to CRISIL AA- with stable outlook. The short term ratings on its deposits programme were reaffirmed at CRISIL A1+.
The rating upgrade is driven by the bank's demonstrated ability to build-up a significant deposit franchise, replace the legacy borrowings and its further strengthened capital position.
The rating factors in the recent capital infusion by Temasek Holdings that has supported the bank's scale of operations. The agency has also highlights that the bank has sustained above average asset quality over the past few years.

October 6

RBI clears setting up of 'Kerala Bank'; state expects Rs 650 billion in deposits
RBI approved the proposal of Kerala government for the formation of Kerala Bank.
The decision was taken by special task force headed by Chairman M.S. Sriram.
The bank will be formed by consolidating State Cooperative Bank and the 14 district cooperatives.
It will have a net deposit amount of Rs 650 billion.
It will provide modern facilities to the Primary Agricultural Cooperative Societies (PACS).
The unification will be completed by March 2019.

October 7

First Abu Dhabi Bank ties up with ToneTag for sound based payments
Sound-based payment services provider ToneTag has tied up with First Abu Dhabi Bank, the largest bank in the UAE to deploy sound based contactless payments. ToneTag is backed by Amazon, Mastercard and Reliance Capital.
FAB customers can pay using sound through the PayIt app. This technology allows PayIt app users to make cardless and cashless payments at merchant outlets from their mobile phones. With ToneTag, FAB is offering sound wave-based proximity payment solutions to their clients across all seven Emirates of UAE.

October 8

RBI issues norms for operating Electronic Trading Platforms
The Reserve Bank of India issued guidelines for operating Electronic Trading Platforms (ETPs) to transact in eligible instruments.
Trading on electronic platforms is being encouraged across the world as it enhances pricing transparency, processing efficiency and risk control.
It also enables better market surveillance and, therefore, discourages market abuse and unfair trading practices.
As per the norms issued by the central bank ETPs will mean any electronic system, other than a recognised stock exchange, on which transactions in eligible instruments.

World Bank: East Asia-Pacific to grow 6.3% in 2018
Developing countries of the East Asia and Pacific region will grow at 6.3 per centin 2018.
The outlook for the region remained positive despite a lower growth prospect than in 2017 owing to a moderation in China's growth.
The October 2018 edition of the World Bank East Asia and Pacific Economic Update also warned of uncertainty in the region owing to trade tensions, higher US interest rates, a stronger US dollar and financial market volatility in many emerging economies.

HDFC Bank launches instant vehicle insurance renewal
Private sector HDFC Bankannounced the launch of instant renewal of insurance for cars and two-wheelers.
The bank claimed that it is the first one to offer a bouquet of digital payment options for customers to renew their vehicle insurance in a few clicks.
Customers can now renew their vehicle insurance online instantly from the comfort of their homes or offices in three easy steps

October 9

RBI plans voluntary retention route to attract long-term overseas money
As a step to attract long-term overseas money in debt, the Reserve Bank of India will open “voluntary retention route” (VRR), giving Foreign Portfolio Investors (FPI) more flexibility in choice of instruments and leeway in regulatory provisions.
The investments through this route will be in addition to the existing investment avenue available to FPIs.
According to the RBI the minimum retention period will be three years, or as decided by the regulator for each auction. The allocation of the investment amount to each FPI (called committed portfolio size, or CPS) will be based on the retention period proposed by the FPI in the bid.

October 10

National Housing Bank increased refinancing limit towards eligible institutions
The National Housing Bank (NHB) has decided to increase the Refinance limit to Rs.30,000 crore. Now, eligible Housing Finance Companies & Other entities will have increased availability of funds.
National Housing Bank had set an inital limit to sanction Rs. 24,000 crore this year (July 2018 - June 2019) towards refinancing eligible institutions.
Till date, Rs.8835 crore has been sanctioned. This refinancing is a credit flow to Housing Finance Companies & other Institutions.
National Housing Bank (NHB) is the Principal Agency to promote Housing Finance Institutions, currently 97 in number, and to provide financial support to eligible institutions. As a regulator, National Housing Bank regularly monitors the liquidity position of Housing Finance Companies.

October 11

UP among top GDPI contributors for insurance industry: SBI Gen Insurance
Uttar Pradesh has been one of the top five contributors to the insurance sector in terms of gross direct premium income (GDPI) and the state has also played a major role in the "journey" of SBI General Insurance.
Uttar Pradesh has been one of the top five contributors (in terms of gross direct premium income) to the insurance industry in India. SBI General Insurance has seen a stable yet profitable growth since its inception and the state has played a significant role in this journey.
The state capital, Lucknow, is a leading centre for our retail as well as corporate policies and we will continue our endeavour of offering unique products to our customers in the region.

Sovereign Gold Bond Scheme 2018 - 2019
The government launched the Sovereign Gold Bond Scheme FY19.
The objective is to cut down gold imports and lower the current account deficit
A total of Rs. 5000 crore has been expected to be collected by the government through this scheme.
The bonds will be sold every month from October 2018 to February 2019 through banks, Stock Holding Corporation of India Ltd etc.
The tenor of the bond will be for a period of eight years with exit option in the fifth, sixth and seventh year.
Payment for the bonds will be allowed through cash payment upto a maximum of Rs. 20,000
It will also be allowed through demand draft, cheque and electronic banking.
The earlier offers of 2.5% interest rate and capital gains tax exemption on redemption have retained.
This scheme was re-introduced as an alternative to rising import duty on gold so as to avoid smuggling of gold.

October 12

RBI to inject Rs 12,000 crore into system on October 11 to manage liquidity
The Reserve Bank announced it will inject Rs 12,000 crore liquidity into the system through purchase of government bonds to meet the festival season demand for funds.
The government will purchase bonds with maturity ranging between 2020 to 2030.
The auction to purchase government bonds is a part of the Open Market Operations (OMO) to manage liquidity in the system which seems to be facing liquidity tightness.
As part of the OMOs, the purchase of government securities maturing will bear interest rate of: 8.27 per cent in 2020,8.15 per cent in 2022,7.35 per cent in 2024,8.15 per cent in 2026 and 7.61 per cent in 2030.

SBI signed MoU with Nepal’s National Banking Institute for human resource development
State Bank of India has signed an MoU with Kathmandu-based National Banking Institute (NBI) for the development of human resources of the latter.
SBI signed the three-year memorandum of understanding (MoU) with NBI to establish a mutually beneficial strategic alliance for development of NBI's human resources by imparting education, training and research.
Under the MoU, the strategic training unit of SBI will impart education, training and development to facilitate transformation of NBI's HR department.

October 13

Mahindra MF launches new rural fund
Mahindra Mutual Fund, a wholly owned subsidiary of Mahindra and Mahindra Financial Services Limited (MMFSL), launched new open ended equity scheme Mahindra Rural Bharat and ConsumptionYojana.
The scheme is aimed at investors seeking long-term capital appreciation by investing predominantly in equity and equity related instruments of entities engaged in and or expected to benefit from high growth of income and consumption in rural parts of the country, according to a company release.
The New Fund Offer, which will open on October 19 closes on November 2, will reopen for continuous sale and repurchase within 5 business days from the date of allotment.

October 14

World Bank approved USD 195 mn to Nepal for financial, energy sector reform
The World Bank has announced that it will provide around USD 195 million concessional loan to Nepal to reform the country's financial and energy sectors.
An agreement to this effect was reached during the ongoing annual meeting of the World Bank and International Monetary Fund (IMF) at Bali in Indonesia.
Chief of International Economic Cooperation Coordination Division (IECCD) at the Ministry of Finance, Krishna Nepal and the World Bank's Country Director for Nepal, Qimiao Fan inked the agreement on Wednesday in the presence of Finance Minister Yubaraj Khatiwada and Vice-Chairperson of the World Bank for South Asian region, Hartwig Schafer.
Finance Minister Khatiwada lauded the World Bank for lending support in various sectors of Nepal including infrastructure development, education, health and tourism development.

October 15

CA Institute’s nine-member group to study issues at IL&FS
Naveen Gupta, President, CA Institute, has constituted a nine-member High Power Group to study the systemic issues at debt-laden IL&FS Group.
This High Power Group will have Shivaji B Zaware as its convenor, and comprise, among others, two past presidents of the CA Institute – Ved Jain and Nilesh S Vikamsey.
It will also suggest remedial measures and improvement in the system. It may be recalled that the CA Institute had last week shot off notices to the statutory auditors of IL&FS Group on the heels of the government superseding the board of the infrastructure company to bring in a new board.
Following the ₹13,000-crore Nirav Modi-scam at Punjab National Bank, the CA Institute had set up a High Power Group; Zaware was the convenor of that group, too.

October 16

Your SBI net banking facility may get blocked if mobile number is not registered by December 1
If you are an Internet banking user of State Bank of India (SBI), you have to register your mobile number with the bank by December 1, 2018. If you do not register it before the deadline, you will not be able to access your net banking account after December 1, i.e., it will be blocked.
The bank has intimated its users on its Internet banking website 'onlinesbi' that they need to register their mobile number through the branch (unless already done) or else their Internet banking may be blocked.

October 17

Kreditech gets RBI license to operate as NBFC
Kreditech has been licensed by the RBI to operate as an NBFC with the first-of-its-kind licence in Indian financial history for digital lending business and app-based financing.
Kreditech's product suite for India will offer individualised direct-to-consumer loans as well as its Lending-as-a-Service Solution for vendors (LAAS), which allows partners to offer customised credit products to their customers.

October 18

RBI issues guidelines to allow payments among mobile wallets
The Reserve Bank of India (RBI) released guidelines to facilitate payments among different mobile wallets, a move aimed at promoting digital transactions.
As per the road-map laid down in 2017, interoperability of all KYC - compliant Prepaid Payment Instruments (PPIs) was to be enabled in three phases - interoperability of PPIs issued in the form of wallets through Unified Payments Interface (UPI), interoperability between wallets and bank accounts through UPI, and interoperability for PPIs issued in the form of cards through card networks.

October 20

RBI announces more steps to increase credit flow to NBFCs
The Reserve Bank of India announced more measures to increase liquidity flows to the non-banking financial companies.
The RBI permitted banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them, to be used to meet liquidity coverage ratio requirements.
The move will help provide liquidity to housing finance companies (HFCs) and non-banking finance companies (NBFCs) which have come under pressure following series of default by IL&FS group companies.

October 21

IFC launches $1 billion masala bond programme in the US and Europe
Taking advantage of tax sops, IFC, the World Bank’s lending arm, has launched its $1 billion masala bond programme in the US and Europe.
According to the IFC, the first tranche of $100 million under the programme opened on the London Stock Exchange.
It was sold to a range of investors, including asset managers, banks and a pension fund, in the US and Europe.
These bonds are aimed at funding the rapidly expanding investment activities of IFC in India.

October 22

State Bank of India launches Wealth Hub in Mangalore
State Bank of India has launched “SBI Wealth Hub” in Lalbhag Branch,Mangaluru.SBI is the first bank to introduce wealth business services for its customers.
The wealth hub was launched by SBI Chairman Rajnish Kumar. The bank has also launched Wealth Business services for NRIs and is in the process of setting of a state-of-the-art global e-Wealth centre at Kochi.

October 23

Paytm launches ‘PayPay’ mobile wallet in Japan in JV with SoftBank, Yahoo Japan
Paytm has launched a QR-based smartphone payment settlement service in Japan in collaboration with SoftBank and Yahoo Japan Corporation.
Paytm had formed a joint venture called ‘PayPay’ corporation with SoftBank and Yahoo Japan, and its first offering is a smartphone-based settlement service that allows users to store money from a bank account in their “PayPay” wallet and make payments with it.

October 24

Now, Fino Payments Bank can open new accounts as RBI lifts ban
The Reserve Bank of India (RBI) lifted its ban on adding new customers for Fino Payments Bank. The ban had been placed by the RBI in May because of non-compliance of operational guidelines, particularly certain accounts having deposits in excess of the allowed amount.
According to RBI's operating guidelines for payments banks , the aggregate limit for customer in his/her bank account shall not exceed Rs 100,000.

Syndicate Bank receives Rs 728 crore capital infusion
Public sector lender Syndicate Bank has received a capital infusion of Rs 728 crore from the Central government.
The bank informed the BSE in a regulatory filing that the capital infusion has been made towards contribution of the Central government in the preferential allotment of equity shares during financial year 2018-19.

Indian banks' profitability weaker than BRICS peers, to improve next fiscal: Moody's
According to Moody's Investors Service, the profitability of Indian banks is "distinctively weak" compared to those in BRICS nations, but it will improve from next fiscal as asset quality stabilises.
The "weakest" for Indian banks with a tangible common equity ratio of 8.7 per cent at the end of 2017.
System wide asset quality in India is weak due to stressed public sector banks, which dominate the sector. Government capital infusions will boost weak public sector banks' capital ratios.

October 25

Six - member panel set up to resolve stressed assets
The overseeing committee (OC) that is being set up under the inter-creditor agreement (ICA) for resolution of stressed assets will have six members, including Janki Ballabh (former Chairman, State Bank of India), MBN Rao (former Chairman & Managing Director, Canara Bank ), M Damodaran (former Chairman, SEBI) and HR Khan (former Deputy Governor, RBI).
The OC, which is being formed under the aegis of the Indian Banks’ Association (IBA), will approve resolution plans for stressed assets submitted by lead lenders.
The lead lenders will submit the resolution plan, along with the recommendations of the OC, to all lenders who have provided facilities to a borrower.
The OC also includes a senior Tata Group executive with expertise in the power sector and a Bombay High Court Judge. The banker indicated that the OC could be split into two panels for faster processing of resolution plans.

October 26

IDFC Bank to be renamed as IDFC First Bank
IDFC Bank has proposed to change its name to 'IDFC First Bank Ltd' as it is in the process of amalgamating non-banking financial company Capital First with itself. The Board of Directors of IDFC Bank at its meeting decided to seek approval of the Reserve Bank of India to rename the bank as 'IDFC First Bank Limited'.
The change of name would further require approvals of statutory/ regulatory authorities including the Registrar of Companies, Shareholders and other Stakeholders, as may be required.

October 27

KIIFB to issue 'Masala bonds' worth Rs 5,000 crore
The Kerala Infrastructure Investment Fund Board would issue 'masala bonds' worth Rs 5,000 crore to mobilise funds for various development works.
Rupee denominated overseas bonds are popularly known as masala bonds.
The KIIFB Chief Executive Officer has been entrusted the task of issuing the 'masala bonds'.
The bonds would be listed in the London and Singapore stock exchanges,adding bonds worth Rs 5,000 crore would be issued in the first phase.
The Reserve Bank of India had already given sanction for bonds worth Rs 2,647 crore.

October 28

RBI to inject Rs 40,000 crore into banking system via OMO
The Reserve Bank of India will inject Rs 40,000 crore in the banking system next month, a move that will help ease cash shortage in the system and stabilise debt market rates.
Based on an assessment of the durable liquidity needs going forward, RBI has decided to conduct purchase of government securities under open market operations for an aggregate amount of Rs 400 billion in the month of November 2018.
Open market operation (OMO) is an RBI mechanism to infuse or suck liquidity from the system.

October 29

SBI to issue and encash electoral bonds
State Bank of India, the country’s largest lender, was authorised to issue and encash electoral bonds with effect from October 1 to 10. These could be done at 29 of the bank’s authorised branches.
According to the provisions of the Electoral Bond scheme notified in January this year, these bonds could be purchased by a person who is a citizen of India or an entity incorporated or established in India.
An individual can buy electoral bonds either singly or jointly with other individuals. Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent of the votes polled in the previous Lok Sabha or Assembly election are eligible to receive the electoral bonds.

October 30

SBI, Hitachi Payments form Joint Venture For Digital Payment Platform

 Country's largest lender State Bank of India (SBI) and payments solution provider Hitachi Payment Services India has entered into an agreement to form a joint venture for establishing a card acceptance and digital payment platform.
 SBI will have a majority stake in the proposed joint venture. Hitachi Payment Services India is a wholly owned subsidiary of Hitachi Group, Japan.

The Reserve Bank of India (RBI) has announced to inject Rs 40,000 croreinto the system in November through the purchase of government 

The central bank had already injected Rs 36,000 crore into the system in October through open market operation (OMO).

October 31

New SBI ATM withdrawal limits to come into effect
The Country’s largest bank SBI has reduced the daily cash withdrawal limit for Classic and Maestro debit cards to Rs. 20,000 per day (earlier, Rs. 40,000).
New ATM cash withdrawal rules for SBI account holders will come into effect from 31 October.
There will be no changes in the daily withdrawal limits on other SBI debit cards.
6th tranche of electoral bonds announced; SBI the only issuing authority
 State Bank of India (SBI), has been authorised to issue and encash electoral bonds through its 29 authorised branches with effect from November 1 to 10.
 The 29 specified SBI branches are in cities like New Delhi, Gandhinagar, Chandigarh, Bengaluru, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Kolkata and Guwahati.


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