BANKING - 2017 February

February 1

Indian Bank revises interest rates for FCNR (B) deposits.
Public sector Indian Bank has revised its rates for foreign currency interest rates (banking) on term deposits with immediate effect.
As per the revised interest rate for FCNR (B) deposits, in USD terms, the revised interest rate has been fixed at 2.26 per cent for deposits of one year and above but less than two years from the existing 2.20 per cent.
For deposits of two years and above but less than three years, the interest rates were revised to 2.52 per cent from 2.48 per cent.

February 2

India signs Financing Agreement with World Bank for USD 201.50 Million.
Aiming to enhance quality and improve efficiency of the Engineering Education System, a Financing Agreement for IDA credit of USD 201.50 Million was signed with World Bank for the ‘Third Technical Education Quality Improvement Programme’ (TEQIP III).
The Agreement was signed by Raj Kumar, Joint Secretary, Department of Economic Affairs, on behalf of the Government of India and Junaid Kamal Ahmad, Country Director, World Bank (India) on behalf of World Bank.
The objective of the agreement is to improve the Engineering Education sector in Uttarakhand, Himachal Pradesh, Bihar, Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Rajasthan, along with eight North Eastern States and Andaman and Nicobar Islands.
The project has been designed as a disbursement linked one to the effect that the loan will be handed over only on completion of certain fixed outcomes. The closing date of TEQIP III is March 31, 2022 (ANI).

Airtel Payments Bank opens over 1 lakh accounts in Uttar Pradesh.
Airtel Payments Bank opened over 1 lakh savings accounts in Uttar Pradesh within the first two weeks of its launch in the state.
Airtel Payments Bank has opened one lakh savings accounts in the first two weeks. Approximately 60 per cent of these accounts have been opened in rural areas, underlining the massive scope for serving customers, particularly in unbanked and under banked pockets of the state.
In Uttar Pradesh over 12,000 neighborhood Airtel retail stores will also function as banking points and customers will be able to open savings accounts, deposit and withdraw cash across any of these banking points.
Airtel Payments Bank MD and CEO: Shashi Arora
SBI to hike stake in two credit card joint ventures.
State Bank of India, the country’s biggest lender, is seeking to increase its stake in its two credit-card joint ventures with diversified American conglomerate General Electric, as demonetisation increasingly drives consumers to spend online or through cards.
The Mumbai-based lender, which is also India’s biggest government-owned bank by market capitalisation, wants to increase its stake to at least 51% from 40% in the back office and technology arm GE Capital Business Process Management Services, and to 74% from 60% in SBI Cards and Payments, which markets and distribute credit cards.
SBI’s move to enhance its stake in the credit-card ventures dovetails into US industrial major General Electric’s global strategy to exit financial services, a line of business the Boston-based maker of ultrasound equipment and artificial-lift machinery considers non-core.

February 3

ICICI Bank allows UPI transactions through Flipkart’s PhonePe.
After weeks of confusion and a near-verbal spat between Flipkart’s e-wallet PhonePe and ICICI Bank, the private sector lender has finally allowed UPI-based transactions on the payments app.
The merchant has now adhered to the NPCI guidelines on interoperability by making the necessary corrections in its app.
PhonePe suspended all unified payments interface (UPI)-based options after ICICI raised issues with its security. ICICI Bank and the National Payments Corporation of India (NPCI) had alleged that the Flipkart-owned wallet did not adhere to interoperability norms.

11,86,000 bank accounts opened for textile workers: Smriti Irani.
Government has launched a special drive for opening of bank accounts and promotion of digital payments in the textiles sector, by organizing special camps.
A total of 11,86,203 bank accounts have been opened and activated for textile workers, which includes 17,245 jute workers. For weavers and artisans of handloom and handicraft sectors, 1,912 camps were organized up to 20.01.2017.
A total of 6,28,215 bank accounts have been opened/ mobile apps downloaded by the participants of these camps. Banks have provided micro-ATM facilities at weaving clusters.
The above information was given by the Union Textiles Minister, Smt. Smriti Zubin Irani.

PSBs gross NPA hits 9.83% in FY16; rises to 11.82% by September 2016.
Bad loans of public sector banks stood as high as 9.83 per cent of gross advances in previous fiscal, while that of private sector banks were restricted to 2.70 per cent.
For fiscal 2015-16, public sector banks had gross advances of Rs. 51,04,915 crore, of which Rs. 5,02,068 crore (9.83 per cent) was categorised as gross non-performing assets (GNPA).
Gross NPAs of private sector banks were Rs 48,380 crore, meaning just 2.70 per cent of gross advances of Rs. 17, 91,681 crore during the fiscal 2015-16.

Reserve Bank of India allows NRIs access to currency derivatives market.
The Reserve Bank of India (RBI) has permitted non-residents Indians (NRIs) access to the exchange traded currency derivatives (ETCD) market to hedge currency risk arising out of their investments in India.
Under current regulations, NRIs are permitted to hedge their rupee currency risk through over the counter (OTC) transactions with banks authorised to deal in foreign exchange.
NRIs may take positions in the currency futures/ exchange traded options market to hedge the currency risk on the market value of their permissible (under FEMA, 1999) rupee investments in debt and equity and dividend due and balances held in NRE accounts.

February 4

RBI proposes to waive off bank transactions charges and low interest rate for credit cards.
RBI has deregulated interest rates on credit card dues. Interest rates are determined by banks with the approval of their respective Board of Directors subject to regulatory guidelines on interest rate on advances issued by RBI from time to time. RBI does not maintain information on the rate of commission charged.
National Bank for Agriculture and Rural Development (NABARD) has approved a scheme for giving 0.5 per cent incentive on payments made through the Aadhaar Enabled Payment System (AEPS) to merchants.
With regards to debit card transactions on PoS devices, between January 1 and March 31, 2017, Merchant Discount Rate (MDR) has been capped at 0.25 per cent for transaction value up to Rs. 1,000, and for debit card transactions value between Rs. 1,000 and Rs. 2,000, MDR has been capped at 0.5 per cent.

HDFC Bank increases cash transaction fees on savings accounts.
Country’s second largest private sector lender HDFC Bank has decided to steeply increase the fees for savings account holders on a slew of activities involving cash.
The move assumes significance as the government post demonetisation has been encouraging people to shift to a cash-less or less-cash regime and use digital mode for transactions.
HDFC Bank has decided to steeply raise the charges on certain transactions, capping cash component in others and also introducing charges on certain transactions from 1 March.

February 5

RBI should cut rates by 75 bps; ensure banks pass on benefit, says Assocham.
The Reserve Bank should cut interest rate by 0.5-0.75 per cent in view of dismal credit growth as well as subdued demand and, along with government, nudge banks to pass them on at a time when demonetisation has led to ''windfall gains''.
As the RBI Monetary Policy Committee meets on February 7-8 for next bi-monthly credit policy, Assocham has impressed upon the central bank and the Finance Ministry ''to ensure adequate transmission of cuts in the interest rates''.
The industry is expecting at least 50-75 basis points reduction in the policy interest rates and the banks should pass on the entire benefit to the borrowers.

February 6

Bank of Maharashtra signs corporate agency agreement with Cigna TTK Health.
Public sector lender Bank of Maharashtra has partnered with insurance company Cigna TTK Health to market the insurer’s products in the bank's branches across the entire country.
Under the agreement, the bank will offer the all of Cigna TTK's superior health insurance products to its 2 crore customers through its network of over 1,896 branches, its 14,000 bank employees across the country as well as through its digital platforms.
BoM's tie-up with Cigna TTK will bolster penetration of health insurance in the country, which is currently between 5-7 per cent. Additionally, the World Health Organization’s (WHO) Sustainable Development Goals 2030 include ensuring healthy lives and promoting well-being for all at all ages, with a specific focus on India.

Axis Bank ties up with Earthport.
India's third largest private bank, Axis Bank, has tied up with Earthport Plc, a cross-border payment network, to enable faster outbound cross-border payments for its customers through Earthport’s state-of-the-art global payments network.
Axis Bank has become the first bank in India to connect with Earthport’s global payments network, which spans over 60 countries.
The Bank joins a growing number of major banks across the globe that can, through a single connection with Earthport, send payments seamlessly to almost any bank account in the world on behalf of their clients, while delivering a faster, more efficient and cost-effective service.

Ujjivan begins operations as small finance bank; opens five pilot branches in Bengaluru.
The UK's CDC Group-backed Ujjivan Small Finance Bank is going to open its first set of branches for public transaction and start rolling out branch network across India from next fiscal.
According to Ujjivan Managing Director Samit Ghosh the bank will test all the technical and connectivity issues over the next one month as a preparation before going full throttle.
The company, which raised Rs. 887 crore in IPO last year, has planned a soft launch with five branches in Bangalore as a pilot. There would be just about 14 branches by March.

February 7

IDBI Bank cuts MCLR by up to 35 bps.
IDBI Bank reduced lending marginal cost of funds based lending rates (MCLR) by up to 35 bps two days ahead of the RBI monetary policy review.
The government-owned bank reduced MCLR by 30 bps-35 bps across various tenors with revised rates effective from February 1, 2017. A basis point (bp) is one hundredth of a percentage point.
The bank’s one-year MCLR now stands at 8.20 per cent, while one-year loans will be charged an interest rate of 8.80 per cent, as against 9.15 per cent earlier. The three-year loans will be offered at a minimum rate of 8.95 per cent.
The reduction in MCLR is expected to positively impact loan growth; both in the retail consumer segment and corporate sector lending, thereby supporting the growth impulses in the economy.

PNB Housing Finance limited signs MOU with CREDAI to train construction workers in West Bengal.
Addressing the need of pacing up constructions with skilled labour that would result in quicker delivery and hand overs, PNB Housing Finance Limited (PNBHFL) has signed an MOU with CREDAI West Bengal to train 1000 construction workers in Kolkata and nearby villages.
CREDAI - Bengal would also be setting up permanent (off-site) skill development centres in Medinipur and Murshidabad - places with huge concentration of construction labour.
50 per cent of the training cost is to be borne by the West Bengal State Government and PNBHFL, while the remaining 50 per cent while would be borne by the developer at the construction site from where workers would be trained.

IDFC Bank, IndiaLends tie-up for loan services to 1st timers.
Private sector lender IDFC Bank has collaborated with fintech startup IndiaLends to enable 1st time borrowers who do not have a credit history to take loans.
It is a differentiated personal loan solution which will offer instant loans approvals through a completely digitised process to first time borrowers.
Loan requests by salaried applicants without credit history will now be processed on a real time basis. The unique solution is being offered through a tie-up with IndiaLends, a financial technology startup.
At present, borrowers with no established credit history find it difficult and time consuming to secure a loan. IDFC Bank’s unique personal loan solution will enable this segment to access funds more easily.

HDFC Bank, KMB go live with Bharat Bill Payment System.
Private sector lenders HDFC Bank and Kotak Mahindra Banks are live with the Bharat Bill Payment System (BBPS) that is aimed at easing utility and other repetitive bill payments for consumers.
The BBPS is a centralised system created by the National Payments Corporation, involving banks and non-banks and allows agents to access bill payments services in an interoperable manner.
A customer can pay multiple bills from a single platform without the hassle of visiting multiple websites or issuing individual cheques, or also registering billers with her bank for standard instructions for debit.
BBPS introduced by NPCI is a seamless payment platform that offers speed and convenience to pay all types of bills, adding the service will soon be made available for non-bank customers as well.

February 8

RBI stuns all by keeping repo rate unchanged.
On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) decided to Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth.

Punjab National Bank posts 306 per cent rise in Q3 net profit; bad loans up marginally.
Punjab National Bank missed the estimates of its financial result for the quarter ended on December 31. The bank reported a net profit of Rs. 207.1 crore, a jump of 306 per cent as against Rs. 51 crore during the same period last year.
The amount of gross Non-performing assets (NPAs) stood at Rs. 55627.51 crore as on December 31, 2016 as against Rs. 34338.22 crore during December 31,2015. The percent of Gross NPAs in Q3FY17 stood at 13.70 per cent as against 8.47 per cent in Q3FY16 and 13.63 per cent in Q2FY17.
The Net NPAs stood at Rs. 34993.53 crore as on December 31, 2016 as compared to Rs. 22983.40 crore on December 31,2017. The percent of Net NPAs in Q3FY17 stood at 9.09 per cent as compared to 9.10 per cent on Q2FY17 and 5.86 per cent on Q3FY16.
The total income increased to Rs. 14497.6 crore in Q3FY17 from Rs. 13891.2 crore in Q3FY16. At 1225 hours the shares of the company were trading at Rs. 152.45 per piece, up 1.87 per cent or Rs. 2.80 on BSE.

RBI Raises Weekly Cash Withdrawal Limit To Rs. 50,000 From February 20, From March 13, no curbs on cash withdrawal.
The Reserve Bank of India is set to lift completely from March 13 the cash withdrawal limits imposed in the wake of the November 8 demonetisation of high-value currency notes.
From February 20, cash withdrawal limits for savings account holders will increase to Rs. 50,000 a week from the existing Rs. 24,000.
This would mean savings account holders can withdraw Rs. 50,000 from automated teller machines in one go, if their banks allow it. Banks typically set daily limits for their customers for withdrawal from ATMs.

Federal Bank, Commodity Online in pact for agri loans.
Federal Bank Limited has partnered with leading online data and information portal Commodity Online for the distribution of loans against warehouse receipts and collateral management services across the country.
Commodity Online will roll out an agri-commodity financing platform through its flagship portal where farmers and traders can track commodity markets and warehouses online and get financing for their commodities quickly.
According to Mohan K, Deputy General Manager (SME & Agri), Federal Bank, the bank’s partnership with the portal enables it to aggressively get into the online space to provide financing for agri-commodities with collateral management across India.

IFFCO partners BoB to issue co-branded debit card for farmers.
In a novel initiative that would push digitalisation and cashless economy, Bank of Baroda (BOB) has tied up with IFFCO, a cooperative, to provide co-branded debit cards with inbuilt overdraft facilities to the farmers.
In this regard, a memorandum of understanding (MoU) was signed between G.B.Panda, General Manager (government relationship) BOB and Yogendra Kumar, General Manager (Marketing) IFFCO.
Under this MOU, two lakh co-branded debit cards will be issued to the farmers beginning with the state of Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh. Subsequently more cards will be issued across rest of India.
These co-branded debit cards will be exclusively used for the purchase of IFFCO products only. BOB has agreed to issue the co-branded debit cards to the farmers with an overdraft limit of Rs. 2,500 per cardholder.
BOB will also provide 2.500 PoS machines initially at the various locations across India recommended by IFFCO at mutually agreed terms and conditions.

IDBI Bank posts Rs. 2,255 crore loss in Q3.
Higher provision towards bad loans and depreciation on investments widened IDBI Bank’s net loss in the third quarter. It reported a net loss of Rs. 2,255 crore in the reporting quarter ended December 31, 2016, as against Rs. 2,184 crore in the year-ago period.
Net interest income (the difference between interest earned and interest paid) was down 45 per cent in the reporting quarter at Rs. 850 crore (Rs. 1,556 crore in the year-ago quarter).
Non-interest income was down 5 per cent to Rs. 551 crore (Rs. 578 crore).
In the reporting quarter, provision towards bad loans rose to Rs. 2,357 crore (Rs. 1,715 crore). Provision towards depreciation in investments jumped to Rs. 496 crore (Rs. 71 crore).

February 9

Bank of America opens branches without employees.
Bank of America has opened three completely automated branches over the past month, where customers can use ATMs and have video conferences with employees at other branches.
Bank of America has been reducing its overall branch count to cut costs even as it opens new branches in select markets. New branches are typically smaller, employ more technology, and are aimed at selling mortgages, credit cards and auto loans rather than simple transactions such as cashing checks.
There is one completely automated branch in Minneapolis and one in Denver, both of which are relatively new markets for the bank's consumer business. They are about a quarter of the size of a typical branch.

RBI to set up in-house enforcement cell.
The Reserve Bank of India has decided to set up an enforcement department to speed up regulatory compliance.
The department, to be operational from the next financial year, will mainly deal with the penalties imposed on banks for violation of norms. Currently, the penalties are decided by the banking and non-banking supervision departments.
With a view to developing a sound framework and process for enforcement action, it has been decided to establish a separate Enforcement Department. Necessary steps have been initiated in this regard and the new department will start functioning from April 1, 2017.