BANKING - 2018 SEPTEMBER

August 1

Bandhan Bank surpasses YES Bank market cap; becomes 7th most valued bank.
Bandhan Bank has surpassed YES Bank's market capitalisation (market cap) to become the sixth most valuable private sector bank and seventh most valued listed lender.
With market capitalisation (m-cap) of Rs. 840 billion Bandhan Bank, was stood ahead of YES Bank, which has m-cap of Rs. 838 billion.
The stock of Bandhan Bank had hit an intra-day high of Rs 719, its highest level. Post listing, the stock outperformed the market by surging 76% as compared to 13% rise in the S&P BSE Sensex. It gained 92% over the issue price of Rs 375.

RBI asks Paytm, Fino payments banks to stop enrolling new customers.
Launched in 2015 with great fanfare, India’s payments banking ecosystem has taken a serious hit as the Reserve Bank of India (RBI) has halted two of the three existing payments bank from enrolling new customers.
Concerns over the eKYC, or electronically done know your customer process, as well as cases of more than Rs. 100,000 being deposited in accounts, have caused the RBI to ask Paytm Payments Bank as well as Fino Payments Bank to halt inducting new customers for the time being.
Airtel Payments Bank, which was earlier asked by the nodal agency not to enrol new customers, got permission to resume the process last month.

August 2

Vikas Bonanza 456: a new deposit scheme launched by Karnataka Vikas Grameena Bank (KVGB).
Karnataka Vikas Grameena Bank (KVGB) launched a new deposit scheme Vikas Bonanza 456. Launching the new deposit scheme in Dharwad, S. Ravindran, Chairman of KVGB and the scheme is of a tenure of 456 days with interest rate of 7.10 per cent for public and 7.60 per cent for senior citizens.
A minimum of Rs. 10,000 and maximum of ₹1 crore can be deposited under this scheme. The scheme is open for a limited period. Many senior citizens have expressed happiness over the rise in interest rate.
A press release here that the bank has a network of 636 branches with total business of Rs. 23,686 crore. This includes deposits of Rs. 13,096 crore.

August 3

HDFC Life inks pact with Vijaya Bank to sell insurance products.
HDFC Life Insurance Company inked an agreement with Vijaya Bank to tap customers of the state-owned lender.
The tie-up between the insurer and the lender will ensure a greater reach and penetration through 2,129 branches of the bank spread across the country.
Vijaya Bank's network of 2,129 branches across the country will further strengthen HDFC Life's presence, thereby enabling the insurer to reach out to a wider and diverse section of the population with need-based life insurance solutions.
The partnership promises to improve the overall business of both the organizations. For Vijaya Bank, the main products are deposits and loans and now the choice of Life Insurance products will be a value addition to our customers.

Edelweiss Tokio Life Insurance ties up with Fincare Small Finance Bank.
Edelweiss Tokio Life insurance and Fincare Small Finance Bank (SFB) have announced a bancassurance partnership. The stated aim is to push life insurance to the rural population.
For now, the latter will market its Point-of-Sale (PoS) ‘Saral Navesh’ endowment life insurance plan to Fincare’s customers, providing term solutions in the form of individual and group policies. The PoS product offers a sum assured from Rs. 50,000 to Rs. 1 million, with premium payments from Rs. 5,000 to Rs. 100,000 (annually) for a policy term of 10-20 years.
The PoS product may be purchased for either a death benefit or maturity benefit. Edelweiss Tokio Life will, over time, offer savings, term protection and group protection insurance products as well to Fincare SFB’s customers.

August 4

PM Modi to inaugurate India Post Payments Bank on August 21.
Prime Minister Narendra Modi will launch long-awaited India Post Payments Bank (IPPB) that will have at least one branch in every district and focus on financial services in rural areas.
The Prime Minister has given time on August 21 to launch IPPB. Two branches of the bank are already operational. Rest of the 648 branches will be launched across country in every district.
IPPB will leverage reach of 1.55 lakh post office branches to provide banking and financial service to people in rural area. This will create the country's largest banking network with direct presence at village level.
IPPB CEO Suresh Sethi, that IPPB will go live with 650 branches in addition to 3,250 access points co-located at post offices and around 11,000 postmen both in rural and urban area will provide doorstep banking services.

'Umbrella Organisation' to revive Urban Co-op Banking.
India’s co-operative banking sector is set to undergo a transformation with the concept of Umbrella Organisation (UO) of Urban Co-operative Banks (UCBs) seen as an answer to issues plaguing the sector.
The Reserve Bank of India (RBI) has allowed non-fund-based umbrella organisations at State levels, where respective State federations will take the lead. A working group, constituted by the RBI, felt it was necessary to facilitate the emergence of a UO to enhance public confidence in co-operative banking.
Gujarat is the first State in the country to have an UO for the UCB sector. The Centre for Banking Research Development & Excellence (CBRDE) was inaugurated in 2014, and has been conducting non-fund activities in the areas of training, capacity building and IT infrastructure and research.

August 5

Banks collect Rs 5,000 crore from customers in FY18 for breaching min balance.
As many as 21 public sector banks and three major private sector lenders collected a whopping Rs 5,000 crore from customers for non-maintenance of minimum balance in their accounts in 2017-18.
India's largest lender State Bank of India, which suffered a staggering net loss of Rs 6,547 crore during 2017-18, led the pack in penalising its customers for not maintaining minimum account balance.
The government-owned SBI, which re-introduced the penalty on deposits going below monthly average balance basis from April 2017, collected nearly half the amount raised by the 24 banks put together (Rs 4,989.55 crore).
But for the additional income of Rs 2,433.87 crore under this head, SBI's losses would have soared further. HDFC Bank charged its customers Rs 590.84 crore, which is lower than Rs 619.39 crore in 2016-17.
Axis Bank collected Rs 530.12 crore in the last fiscal while ICICI Bank charged Rs 317.6 crore.

August 6

HDFC Bank raises fixed deposit rates by up to 0.6 per cent.
The Reserve Bank of India hiked the benchmark repo rate, HDFC Bank increased fixed deposit rates on various maturities by up to 0.6 per cent.
The bank has raised the interest rate on term deposits with maturity ranging between 6 months and one day to 5 years. Deposits of a maturity of 6-9 months would earn 6.75 per cent, 40 basis points higher than the previous rate.
RBI increased the benchmark short-term lending rate (repo rate) at which it lends to other banks by 0.25 per cent to 6.5 per cent on inflationary concerns. Retail inflation, which is factored in by the central bank’s Monetary Policy Committee.

August 7

Banks lost Rs. 32,000 crore to frauds in FY2017-18.
There has been a jump in the quantum of funds involved in frauds in banks and other financial institutions during the year 2017-18.
As per data submitted by the Reserve Bank of India (RBI) to the Centre, the amount increased to Rs. 32,048 crore in the last financial year against Rs. 23,930 crore in the previous year.
For public sector banks, it had gone up significantly from Rs. 19,529 crore to Rs. 29,246 crore. Nationalised banks witnessed a steep increase in this regard.
For SBI, there was a decrease in the amount involved, though the number of reported frauds had gone up. It came down to Rs. 254,198 lakh from Rs. 303,642 lakh in the previous year.

IFC plans to invest Rs. 160 crore in Mahindra Rural Housing Finance.
IFC, a member of the World Bank Group, will invest Rs. 160 crore ($25 million) in Mahindra Rural Housing Finance (MRHFL), which is focussed on rural housing. MRHFL will use the proceeds to extend loans to low-income borrowers in villages.
MRHFL has 85 per cent of its portfolio in rural areas with an average loan size of $1,200. Its customers include farmers, micro-entrepreneurs and salaried workers in the unorganised sector, who do not have any documentary evidence of income and proven credit history.
In recent times, IFC has made available nearly $2 billion, including mobilisation, for purchase and construction of affordable homes.

August 8

Provisioning continues to hit PNB earnings.
Punjab National Bank was among the five public sector banks that recently received capital from the Centre. Large haircuts, and higher provisioning on accounts under the IBC and the RBI’s February circular forcing banks to accelerate the NPA recognition exercise, have led to steep losses for banks, leading to fresh infusion of capital by the Centre.
But for a large state-owned bank such as PNB, counted among the stronger banks last year, having to knock on the Centre’s door is worrisome. The bank barely met its Tier 1 capital ratio requirement of 7 per cent in the March quarter, which had been a cause for concern.
After the bank’s disastrous performance in the March quarter when it posted a steep Rs. 13,417-crore loss, the bank continues to be in the red. PNB reported a loss of Rs. 940 crore in the June quarter.
The bank’s NPA provisioning ballooned to Rs. 16,200 crore in the March quarter, owing to huge slippages as fallout of the RBI’s diktat. PNB’s gross non-performing assets ratio is now a steep 18.26 per cent of loans.

AU Small Finance Bank net rises 24% at Rs. 77 crore.
Jaipur-headquartered AU Small Finance Bank reported a 24 per cent increase in first quarter net profit at Rs. 77 crore against Rs. 62 crore in the year-ago quarter.
Net interest income jumped 56 per cent year-on-year (y-o-y) at Rs. 286 crore ( Rs. 183.50 crore in the year-ago quarter). Other income soared 87 per cent y-o-y at Rs. 103 crore ( Rs. 55 crore).
The bank received Rs. 43.28 crore from the sale of priority sector lending certificates (PSLCs) during the quarter. Of this, Rs. 10.82 crore has been recognised as income during the current quarter.
GNPAs increased by about Rs. 64 crore to Rs. 333.50 crore as of June-end 2018. GNPAs nudged up to 2.17 per cent of gross advances as of June-end 2018, against 2.01 per cent as of March-end 2018.

August 9

PayPal, HDFC Bank partner to offer seamless payment experiences to consumers.
PayPal, a global technology platform and digital payments leader, has announced its strategic partnership with and HDFC Bank to offer safer, faster and convenient payment experiences for the bank's card holders.
To initiate incremental digital spend, the HDFC cards will be presented as a payment option during enrollment and subsequent payments, with the ability for consumers to easily open PayPal accounts and set it as their preferred payment method.
The partnership will create a number of joint growth opportunities that will advance PayPal and HDFC Bank's shared vision of offering consumers greater choice and flexibility in managing their money.
Through this partnership, we're enabling HDFC Bank to provide its customers with the ability to shop how, where and when they choose, by leveraging the power, safety and convenience of PayPal.

HSBC launches online platform MyDeal to raise funds via capital markets.
HSBC has launched a new digital platform to simplify capital raising process through capital markets by providing real-time access to information such as investors' feedback, profiles, client orders and deal pricing.
The platform MyDeal, contains all the information relating to a client's capital markets transaction, and is updated on real time basis.
In its pilot phase, MyDeal has raised over USD 25 billion in the first seven months through over 30 transactions globally.
The platform, which HSBC's bankers can access on a tablet or desktop, uses application programming interface (API) technology to centralise data from multiple channels and presents it using custom-made graphs and visuals.

August 10

Bajaj Allianz General, Vijaya Bank enter bancassurance tie-up.
Bajaj Allianz General Insurance has entered into a bancassurance deal with Vijaya Bank. This corporate agency agreement will enable distribution of Bajaj Allianz General Insurance products through the bank’s network of 2,129 branches across the country.
Under this strategic tie-up, Bajaj Allianz General Insurance will offer personal lines of insurance products such as health, personal accident, home, motor and travel along with a commercial line of insurance products.
The main products are deposits and loans and now their customers will have the choice of general insurance products.
The partnership will strengthen the distribution network of Bajaj Allianz General Insurance in southern India as Vijaya Bank has a strong foothold in South India.

Axis Bank introduces iris authentication for Aadhaar-based transactions.
Axis Bank has become the first bank in the country to introduce Iris Scan Authentication feature for Aadhaar-based transactions through its micro ATM tablets.
This service, which requires a customer to scan their iris on a tablet, will boost the bank's financial inclusion efforts by making Aadhaar authentication process hassle-free and offering easier access to digital banking for consumers especially in the rural parts of the country.
Micro ATMs completely eliminate the requirement of debit cards, passwords, PINs, and user IDs, and empower consumers to avail banking services using only their Aadhaar numbers and biometrics (iris scan/fingerprint scan).
Iris scan technology is completely contactless and provides up to 98.2 per cent authentication success rate (as per study conducted by the International Centre for Biometric Research) and offers an edge over other prevalent biometric modes.

August 11

RBI to pay Rs 50,000 cr dividend to govt for FY18, in line with Budget estimate.
The RBI decided to pay Rs 50,000 crore as dividend to government in line with the Union Budget provisions, helping the Centre stick to its fiscal roadmap.
The Reserve Bank, which follows July-June financial year, has paid about 63 per cent higher dividend than previous year (2016-17). The Central Board of Directors of the RBI approved the transfer of surplus amounting to Rs 500 billion (Rs 50,000 crore) to the Government of India.
Earlier in March, the RBI paid interim dividend of Rs 10,000 crore at the insistence of the government to support fiscal position. The government projected to collect Rs 54,817.25 crore as dividend or Surplus of Reserve Bank of India, Nationalised Banks and Financial Institutions.
It is to be noted that the RBI transferred a surplus of Rs 30,659 crore as dividend to the government for the year ended June 30, 2017, which was less than half of what it paid in the previous year (Rs 65,876 crore).

Urban co-op lender SVC Bank partners with DHFL Pramerica Life, Aditya Birla Health.
Insurers DHFL Pramerica Life Insurance and Aditya Birla Health Insurance Co announced their partnership with old generation urban co-operative lender SVC Bank to sell their policies through the bank.
DHFL Pramerica Life Insurance recently entered a Bancassurance partnership with SVC Co-operative Bank Limited for the distribution of specialised products to its customers.
The objective of this partnership is to offer easy access to simple life insurance products, thereby improving the insurance protection gap and strengthening the distribution network of DHFL Pramerica Life Insurance.
Aditya Birla Health Insurance will market its retail and group products with innovative features to suit the needs of SVC Bank customers from all socio-economic segments across the country.

August 12

Exim Bank signs MoU with BRICS development banks.
Exim Bank of India has signed a multilateral cooperation agreement with member development banks of BRICS to undertake “collaborative research” in distributed ledger/blockchain technology.
The MoU - signed by Exim Bank Managing Director David Rasquinha - was an outcome of the discussions the member development banks had during their annual meeting, with the objective of strengthening the cooperation under the BRICS Interbank Cooperation Mechanism.
The BRICS grouping comprises Brazil, Russia, India, China and South Africa. Under this umbrella agreement, the signatories have agreed to constitute a joint research working group which will formulate the research agenda and targeted outcome.
Exim Bank of India is the nominated member development bank under the BRICS Interbank Cooperation Mechanism.

August 13

Moody’s assigns GB1 grade to Axis Bank’s green bond issue.
Moody's Investors Service (Moody's) has assigned Green Bond Assessment of GB1 (Excellent) to Axis Bank Ltd's debut $500-million green bond issued in June 2016.
The senior, unsecured bond was priced at a coupon of 2.875 per cent and maturity of five years. Notably, the transaction was the first green bond issued by an Indian entity to receive Climate Bonds Initiative certification, and the first US dollar bond priced by an Asian bank certified by Climate Bonds Initiative.
Axis Bank's offering represented a significant milestone for India's green bond market. The bank's excellent organisation and oversight structure and track record of timely impact reporting underscore the assignment of GB1 assessment.

Banks’ outlook negative till capital position improves: Fitch.
The outlook on Indian banks will stay negative due to weak core capitalisation, expectation of elevated credit costs, and poor earnings.
This poses (a) downside risk for banks’ standalone credit profiles unless capital is replenished – be it through the State, capital markets, or asset sales.
Private sector lender ICICI Bank posted its first-ever quarterly loss of Rs. 120 crore in the April-June quarter, while State Bank of India registered a net loss of Rs. 4,876 crore in the same period.
As per Fitch banks need about $40-$55 billion in capital to meet Basel-III capital standards by the end of the fiscal and also to sustain credit growth, while meeting a loan-loss cover of 65-75 per cent. The Centre’s plan to inject $1.7-billion of fresh capital in five State banks will provide a short-term reprieve.

August 14

ICICI Bank hikes fixed deposit interest rates.
ICICI Banks hikes fixed deposit (FD) interest rates for both general and senior citizens. FD interest rates in ICICI Bank range from 4.00 per cent per annum to 6.50 per cent per annum. Short term ICICI Bank FD rates for senior citizens range from 4.50 per cent to 7.00 per cent per annum.
ICICI Bank offers best FD rate of 7.75 per cent on term deposits for tenure of 2 years 1 day to 5 years. The bank offers special interest rate on FD for senior citizens.
ICICI Bank FD interest rates for long term deposits with tenure of 5 years 1 day to 10 years offer good returns. ICICI Bank fixed deposit rates for deposits with a tenure of 10 years is 7.00 per cent. Senior citizen are offered deposit rates of 7.50 per cent per annum for long termed FDs.
ICICI Bank 5 years tax saver fixed deposit (FD) rates (Max upto Rs 1.50 lac) offers 7.25 for general and for senior citizens 7.75 per cent.

IDBI Bank loss widens to Rs. 2,410 crore in Q1.
IDBI Bank’s net loss widened to Rs. 2,410 crore in the first quarter against Rs. 853 crore in the year-ago quarter due to a huge jump in loan loss provisions. The net loss in the reporting quarter, however, is lower than the preceding quarter’s Rs. 5,663 crore.
The public sector bank, which has been placed under the RBI’s prompt corrective action (PAC) framework to nurse it back to health, saw its gross non-performing assets (GNPAs) rise to 30.78 per cent of gross advances as of June-end 2018 against 27.95 per cent as of March-end 2018.
Operating profit was up 28 per cent y-o-y at Rs. 1,081 crore (Rs. 843 crore). Net interest margin improved to 2.17 per cent in the reporting quarter from 1.72 per cent in the year-ago quarter.

Egon to help BBB in PSB leadership programmes
The Indian Banks’ Association has appointed Egon Zehnder International as a ‘Knowledge Partner’ to the Banks Board Bureau to design, implements and institutionalise a flagship leadership development strategy for public sector banks in India.
Hay Consultants Private Limited (part of the Korn Ferry Group) will assist the bureau in assessing leadership competencies and potential capabilities of candidates appearing in the process for appointment as wholetime directors of public sector banks.

August 15

IDBI hikes marginal cost of funds based lending rate by up to 0.10%.
State-owned IDBI Bank has increased the marginal cost of funds based lending rate (MCLR) by up to 0.10 per cent for various tenors. One month tenor loans, the MCLR are increased by 0.05 per cent each to 8 per cent and 8.25 per cent respectively.
For three and six months of tenor, the new MCLR will be 8.45 per cent and 8.60 per cent. The one year loan will be priced at 8.85 per cent, two year and three year tenors will be priced at 8.90 per cent each.

Larger UCBs surprised at not being allowed to spread provisioning for G-Sec MTM losses.
The Reserve Bank of India’s move to restrict the option of spreading provisioning for mark-to-market losses on government securities to smaller urban co-operative banks (UCBs) has stumped the larger players in this segment.
The central bank had initially given this option of spreading provisioning for mark-to-market losses (MTM) that arose due to the systemic impact of sharp increase in the yields on Government Securities only to scheduled commercial banks and small finance banks.
When co-operative banks raised questions about being denied this benefit, the RBI extended it to UCBs, but only to those with deposits of less than Rs. 100 crore.
As per the RBI data, about 39 per cent of the 1,562 UCBs in the country had deposits of Rs. 100 crore and above as on March-end 2017. These banks accounted for about 91 per cent of the total deposits of Rs. 4,43,470 crore with UCBs.

August 16

Bharti Axa ties up with Airtel Payments Bank to offer Jeevan Jyoti Bima.
Bharti Axa Life Insurance and Airtel Payments Bank entered into an alliance to offer the ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’ (PMJJBY), a government-backed life insurance scheme.
The alliance will leverage Airtel Payments Bank’s vast network to reach deep rural pockets and serve the under-insured. With this, Airtel Payments Bank also becomes the first payments bank in India to offer the Government of India-backed life insurance scheme.
The product (PMJJBY) provided by Bharti Axa Life Insurance offers Rs 2 lakh life insurance cover for a nominal premium of Rs 330 per annum and can be purchased by all existing or new Airtel Payments Bank savings bank account holders between the ages of 18-50.
Airtel Payments Bank’s unique distribution network allows financial inclusion to reach the 190 million under-insured Indians. This association with Bharti Axa Life Insurance is one important step of many.

Andhra Bank raises MCLR by 0.15% for various tenors.
State-owned Andhra Bank has increased the marginal cost of funds based lending rate (MCLR) by 0.15 per cent to up to 8.70 per cent for various tenors.
The MCLR for overnight, 1 month, 3 month, 6 month and one year tenors has been raised by 0.15 per cent each to 8.15 per cent, 8.20 per cent, 8.40 per cent, 8.55 per cent and 8.70 per cent, respectively.
The move will make consumer loans such as auto, car and home loans costlier for buyers. In June, too, Andhra Bank had increased the MCLR by 0.05 per cent to up to 8.55 per cent for various tenors.
Earlier this month, the Reserve Bank of India for the second time raised its benchmark interest rate by 25 basis points on inflationary concerns. RBI increased repo rate, at which it lends to other banks, to 6.5 per cent.

With the launch of UPI 2.0, digital payments to get a boost in India.
The National Payments Corporation of India (NPCI) launched Unified Payments Interface (UPI) 2.0, which allows customers to link their overdraft account to UPI, create one-time mandates and pre-authorise transactions for payment at a later date, and check the invoice sent by the merchant prior to making a payment.
UPI is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing and merchant payments under one hood.
It also caters to the peer-to-peer collect request, which can be scheduled and paid as per requirement and convenience. NPCI is an umbrella organisation for all retail payments in India. UPI version 1 was launched in April 2016.
With the launch of UPI 2.0 we hope to touch new milestones by expanding UPI’s presence especially in the person-to-merchant payment space.

August 17

Sarvatra launches 450th cooperative bank.
Sarvatra Technologies announced that they have started ‘Sevalia Urban Co-operative Bank’ as their 450th cooperative bank on National Financial Switch (NFS).
The company has enabled many co-operative banks on digital payment platform by making them inter-operable with large banks.
Dilip Asbe, MD and CEO of National Payments Corporation of India, Sarvatra started with NFS, providing RuPay Debit and Kissan Credit Cards issuance and enabling transactions on ATMs, POS and eCommerce.
They are bringing sub-member banks on other NPCI platforms like IMPS, UPI, AePS and Bharat BillPay. Sarvatra not only on boards UCBs but also SCBs and DCCBs which is helping in financial inclusion.
Mandar Agashe, founder and vice chairman, Sarvatra Technologies, Sarvatra has done a pioneering role in bringing latest digital payment technologies to India’s ‘underbanked’ population.

Canara Bank plans to raise Rs. 7,000 crore this fiscal: Chairman.
Canara Bank aims to complete capital raising of Rs. 7,000 crore this fiscal itself.
It may be recalled that Canara Bank’s board had, given its nod for raising equity share capital up to Rs. 7,000 crore (including premium) by way of qualified institutional placement/ rights issue/ ESPS during 2018-19, subject to market conditions.
Before Manoharan became Chairman, Canara Bank had a three-tier structure – head office, 47 circles and 5,600 branches.
During his tenure, Canara Bank has transformed into a four-tier structure – head office, 21 circles, 118 regional offices and 6,200 branches.
In the first quarter this fiscal, Canara Bank recorded a net profit of Rs. 281 crore, up 11.5 per cent on a year-on-year basis.

August 18

Investment in P-notes hits 9-year low at Rs 80,341 crore since 2009.
Investments through participatory notes into Indian capital markets plunged to over nine-year low of Rs 80,341 crore till July-end amid stringent norms put in place by the watchdog SEBI to check misuse of these instruments P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly.
Total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to a low of Rs 80,341 crore till July-end from Rs 83,688 crore clocked by June-end. Prior to that, in May the figure was Rs 93,497 crore.
This is the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore. Of the total investments made last month, P-note holdings in equities were at Rs 60,550 crore and the remaining in debt and derivatives markets.
Besides, the quantum of FPI investments via P-notes dropped to 2.4 per cent during the period under review from 2.6 per cent in the preceding month.

August 20

IDFC Bank, Capital First merger on track.
The merger of Capital First with IDFC Bank is on track, with the shareholders of the two institutions expected to approve the transaction next month.
Mainly the shareholder votes are left. IDFC Bank shareholders are likely to vote on September 3, and shareholders of Capital First will also vote later in the month.
The focus will continue to be on smaller entreprenuers and consumers, although it will also lend to large corporates and other firms as part of the banking system.
The more important thing is that as the Indian economy begins to grow over the next few years, the opportunity is very big, reporters on the sidelines of FIBAC.

Mamata Banerjee asks co-op banks to fund MSMEs.
West Bengal Chief Minister Mamata Banerjee has called for greater financial assistance to the MSME (micro, small & medium enterprises) sector and asked the State cooperative banks to look for ways to increase lending to them.
Demonetization and the GST rollout have depleted the working capital of the MSMEs. It has also become more difficult to obtain bank credits.
Nearly Rs. 1.74 lakh crore worth of bank credit has already been extended to the sector over the last seven years. State cooperative banks, who already provide loans through Kisan Credit Cards, could explore similar options for MSMEs.
Bengal currently has 53 lakh MSME units, employing about 1.1 crore people. Nearly 28,000 new MSMEs are set up every year in the State.

August 21

From next year, no ATM refilling post 9 pm in cities, 6 pm in rural areas.
No ATM will be replenished with cash after 9 pm in cities and 6 pm in rural areas from next year even as two armed guards will accompany crisp notes in transit as per a new directive issued by the Home Ministry.
The deadline for putting money in the ATMs located in Naxal-hit areas is 4 pm while private cash handling agencies must collect money from the banks in the first half of the day and transport notes only in armoured vehicles.
No cash loading of the ATMs or cash transportation activities shall be done after 9 pm in urban areas, after 6 pm in rural areas and before 9 am or after 4 pm in the districts notified by the central government as Left Wing Extremism affected areas come into effect from February 8, 2019.
There are over 8,000 privately owned cash vans plying across the country, operated by non-bank private agencies, and they handle over Rs 150 billion daily on behalf of banks.

Govt aid will give capital relief to banks, but stress will remain: Moody’s.
Moody’s Investors Service the government’s plan to provide more capital support to public sector banks in the current fiscal will restore capital adequacy and improve loan-loss coverage at many loss-making banks, but stress would persist.
The government plans to provide Rs 65,000 crore of new capital to public sector banks (PSBs) in the year ending March 2019 (fiscal 2019), after infusing Rs 90,000 crore in the prior year. Of the Rs 65,000 crore, the government allocated Rs 11,300 crore to five banks in July.
PSBs’ external capital needs will not grow much further after fiscal 2019 because the banks’ profitability will gradually improve as credit costs moderate in tandem with progress in an ongoing balance-sheet clean-up.
Our analysis shows that the capital injections will only be enough to enable all the banks to achieve Common Equity Tier-1 (CET1) ratios of at least 8 per cent by March 2019, satisfying the 2.5 per cent conservation buffer on top of the 5.5 per cent minimum under Basel III norms in India.

HDFC acquires 25 per cent stake in Good Host for Rs 70 crore.
Mortgage lender HDFC Ltd has acquired over 25 per cent stake in Good Host, a company engaged in the business of managing student housing facilities, for Rs 69.5 crore.
HDFC is acquiring 30,52,469 equity shares of Good Host for a consideration of Rs 69,50,00,000 representing 25.01 per cent of its share capital from Manipal Integrated Services Pvt Ltd.
Good Host operates and manages hostel facilities for educational/training institutions in Jaipur and Udupi. The company reported a turnover of Rs 53.1 crore for 2017-18. In 2016-17, the turnover stood at Rs 8.6 crore and that in 2015-16 it was Rs 6.5 crore.
Shares of HDFC closed at Rs 0.38 per cent down at Rs 1,912.70 on BSE.

August 22

Recapitalisation plan will boost PSBs, but stress may persist.
Moody’s Investor Service, the government plan to provide capital support to state-owned banks will improve their capital position but the stress will continue.
The large-scale recapitalisation plan, which was meant to improve capital buffers and loan-loss reserves and also support sufficiently strong loan growth, will now be just enough to shore up capital ratios above regulatory requirements because the banks’ capital shortfalls have grown larger than the government’s initial projection.
The Centre plans to provide Rs. 65,000 crore to public sector banks this fiscal, of which it has already allocated Rs. 11,300 crore to five lenders in July. This capital infusion comes after the capital support of Rs. 90,000 crore last fiscal.

PayPal expands India presence with 1.65 lakh sq ft Bengaluru facility.
PayPal, the US-based digital payments giant, has leased 1.65 lakh square feet space in Bengaluru’s RGA Tech Park as it looks to penetrate deeper into the fast-growing Indian market. The new premises, spread over three floors, can accommodate up to 2,000 employees.
PayPal has technology centres in Chennai and Bengaluru, spread over 4 lakh sq ft each, employing more than 1,700 engineers. This latest facility of 163,547 sq ft is spread over three floors of the building. PayPal already occupies the first three floors spread over 132,287 sq ft, which was leased in September 2017.
The tech park also houses IT giant Unisys, which occupies an entire building of over 5 lakh sq ft, besides tech companies such as Hike and UTC Eco. PayPal will pay a rent of Rs. 55 per sq ft, which is slightly lower than the prevailing rate because this is an SEZ project, Seetharaman added. PayPal’s rental outgo will be around Rs. 90 lakh a month.

August 23

ICICI Bank announces partnership with Manchester United.
ICICI Bank, India’s private sector bank, has agreed to a multi-year partnership with Manchester United, bringing a range of competitive co-branded credit and debit card to the club’s 35 million Indian followers.
The Bank will be offering fans of the club two types of credit card – Manchester United Platinum Credit Card and Signature Credit Card.
Each card will come with competitive rates, as well as qualifying for a wide range of exclusive privileges and discounts on merchandise from Manchester United online store and other affiliated partners in India.
Privileges included are fully paid trips to Old Trafford to watch a game, the chance to observe a first team training session, signed merchandise as well as a Manchester United welcome gift for each new customer.

August 24

Ujjivan Small Finance Bank launches overdraft facility for micro, small enterprises.
Ujjivan Small Finance Bank, a wholly-owned subsidiary of Ujjivan Financial Services Ltd, has launched overdraft (OD) facility for micro and small enterprise (MSE) customers across its branches nationally. The facility is an add-on product to the existing MSE term loans offered by the bank.
The OD facility is offered to all MSEs with a turnover of Rs 50 lakh or more, at a competitive rate of interest. This interest rate is for one year, with a credit limit between a minimum of Rs 11 lakh to a maximum of Rs 50 lakh, which can be renewed annually.
A key feature of the facility is that it allows MSE customers to pay EMI only on the utilised amount and repay the amount at any time during the tenure of the OD facility, to replenish the credit limit back to its original amount.
The special feature empowers MSE customers availing of the credit limit to manage their cash flows smartly and more efficiently and is designed keeping in mind that loans to this segment are better left flexible, considering their dynamic and variable funding requirements.

August 25

Only 23 per cent of rural income from farming, reveals NABARD 2016-17.
Agriculture Generates not even a quarter of rural household incomes in India. Even for so-called agricultural households, just over 43 per cent of their average income comes from cultivation of crops and rearing of animals.
The reinforces a trend that has gathered momentum since the start of this century of an increasingly less ‘Krishi’ in ‘Bharat’. While agriculture may, by definition, be largely rural, the converse, though, isn’t true.
The NABARD survey estimates the total number of rural households in India for 2016-17 at 21.17 crore. The definition of “rural” is a broad one, covering revenue villages and semi-urban centres with a population of less than 50,000.
Out of the 21.17 crore rural households, 10.07 crore, or under 48 per cent, are “agricultural” those with at least one member self-employed in farming and reporting annual value of produce at more than Rs 5,000. The remaining 11.10 crore households or 52 per cent are “non-agricultural”.

The World Bank Just Issued a Bond That Relies On Blockchain Technology From Start to Finish.
The World Bank has launched a blockchain-only bond. The so-called bond-I for “blockchain operated new debt instrument” and perhaps also for Sydney’s famous Bondi Beach is a two-year bond that was arranged by Commonwealth Bank of Australia and raised 110 million Australian dollars ($80 million.)
Investors included several Australian banks and state treasuries. Arunma Oteh, the World Bank treasurer, mentioned in a statement the additional help of King & Wood Mallesons, Mark-it, Microsoft and Toronto Dominion Securities.
The World Bank, the bond was the first in the world to be created, allocated, transferred and managed through its life cycle using distributed ledger technology.
Some small companies have already issued bonds using cryptocurrency and the public Ethereum blockchain as an experiment in the U.K., and the Russian telecoms firm MTS privately placed bonds on a blockchain with buyer Sberbank in May.

August 27

Current account deficit to hit 2.8% of GDP in FY19: SBI.
The country’s current account deficit (CAD) is likely to touch 2.8 per cent of GDP in the current financial year on surge in crude oil prices and moderate growth in exports.
The merchandise trade imbalance is also expected to rise to USD 188 billion in FY19, compared with USD 160 billion in FY18.
Against the backdrop of rising oil price and lukewarm export growth, current account deficit is expected to reach 2.8 per cent of GDP (USD 75 billion) in FY19. The trade deficit jumped to USD 18 billion in July 2018 on account of lukewarm export performance amidst higher import bill.
Oil imports registered an annual growth of 57.4 per cent to USD 12.4 billion, from USD 7.8 billion in July 2017, and the report attributed the rise in the import bill to increase in oil price and rise in quantity of oil imported.

Axis Securities launches commodity trading.
Axis Securities has launched commodity broking services through its membership with MCX and become the first bank subsidiary to enter the commodity broking business.
All existing Axis Direct customers can now trade in 29 commodity futures and five options contracts, covering bullion, industrial metals, energy and agricultural segments, simply through a one-time online registration process.
Within 48 hours of online request, customers will get rights to trade in commodity derivatives and use the same login credentials of Axis Direct to access the commodities platform with real-time market information.
With this launch, Axis Direct has expanded its overall investment product bouquet, which includes equities, mutual funds, initial public offerings, derivatives, bonds, debentures, exchange traded funds, company fixed deposits and overseas trading.

August 28

Centre, EESL in $300 million deal with World Bank.
The Government of India, the Energy Efficiency Services Limited (EESL) and the World Bank signed a $220 million Loan Agreement and an $80 million Guarantee Agreement for the India Energy Efficiency Scale-Up Program.
The programme, to be implemented by 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.
The investments under the programme are expected to avoid lifetime greenhouse gas emissions of 170 million tons of carbon dioxide and contribute to avoiding an estimated 10 GW of additional generation capacity.
This would be over 50 percent of the National Mission for Enhanced Energy Efficiency target of 19.6 GW indicated in India’s Nationally Determined Contributions (NDCs) under the Paris Accord.

World Bank to provide $250 million loan to Rajasthan to improve power distribution.
The World Bank will provide a $250 million loan facility to Rajasthan for improving the performance of its electricity distribution sector.
An agreement was signed here among the Government of India, the Government of Rajasthan and the World Bank.
The Second Programmatic Electricity Distribution Reform Development Policy Loan for Rajasthan is the second in the series of two operations planned for a comprehensive turnaround of Rajasthan's electricity distribution sector.
The first loan closed in March 2017. Electricity distribution utilities (DISCOMs) in Rajasthan provide electricity to about 9.5 million customers.

August 29

As per RBI 99.3% demonetised notes were returned; major points from central bank's annual report.
The Reserve Bank of India in its annual report has Rs 15.31 lakh crore out of the total Rs 15.41 lakh crore demonetised currency have returned to the banking system. While 0.7 per cent notes worth Rs 10,720 crore couldn't be traced. PM Modi had scrapped Rs 500 and Rs 1,000 notes in a surprise announcement on November 8, 2016.
The value of banknotes in circulation increased by 37.7 per cent over the year to Rs 18.03 lakh crore at end-March 2018. The volume of banknotes, increased by 2.1 per cent. This is in sharp contrast to the government's push for digitisation and a less-cash economy.
In value terms, the share of Rs 500 and Rs 2,000 banknotes, which together accounted for 72.7 per cent of the total value of banknotes in circulation in March-end 2017, increased to 80.2 per cent in March-end 2018.
The after-effects of demonetisation continued in 2017-18 as well. The RBI indent for 2017-18 was higher by 9.1 per cent as compared to last year. The supply of banknotes was lower than the previous year.

ADB okays $620 million loan for Madhya Pradesh, West Bengal.
Asian Development Bank (ADB) has approved USD 620 million loan to boost irrigation projects in Madhya Pradesh and supply clean water in West Bengal.
ADB inked USD 375 million loan agreement with the Madhya Pradesh government that will be used to contribute to double farming income by expanding irrigation networks and system efficiency.
Separately, the board of directors of ADB approved a financing package of USD 245 million to provide safe, sustainable, and inclusive drinking water service in West Bengal. This is expected to benefit about 1.65 million people in three districts of West Bengal affected by arsenic, fluoride and salinity.
The Madhya Pradesh Irrigation Efficiency Improvement Project will develop 1,25,000 hectares (ha) of new, highly efficient and climate resilient irrigation networks, and improve water use efficiency in more than 400 villages, benefiting over 8 lakh people in the state.

August 30

Germany to provide euro 120 million soft loan for Clean Ganga Mission: Envoy.
In an effort to clean the Ganges, Germany is providing a soft loan of euro 120 million (Rs 990 crore approximately) to India to strengthen sewage water treatment infrastructure in Uttarakhand.
Elaborating on the work done by the German Embassy, the project would focus on extension and replacement of sewerage system (around 360 kilometres) including complete house connection, construction of sewage treatment plants of around 15 million litres per day (mld).
The initiative also includes construction of 13 sewage pumping stations.
In 2015, the German government to India committed an interest subsidised loan of up to euro 120 million through German Development Bank KfW for financing investments such as construction of sewerage network and sewage treatment plants.

ADB to lend $375 million for irrigation projects in MP.
India signed a $375 million loan agreement with the Asian Development Bank (ADB) for expanding irrigation networks and system efficiency in Madhya Pradesh.
The project will support the efforts of government of Madhya Pradesh for irrigation expansion and modernisation plan by maximising irrigation efficiency and water productivity.
As per the government, Madhya Pradesh Irrigation Efficiency Improvement Project will develop 125,000 hectares of new, highly efficient and climate resilient irrigation networks and improve water use efficiency in more than 400 villages, benefiting over 800,000 people in the state.
Deputy Country Director of ADB's India Resident Mission the funds will be used to develop a large-scale pressurised and automated irrigation system for boosting irrigation efficiency.

August 31

Government of India and ADB Sign $346 Million Loan to Improve State Highways in Karnataka.
The Asian Development Bank (ADB) and the Government of lndia signed a $346 million loan to finance improvement of over 400 kilometers of state highways that will enhance connectivity and access to economic centers across 12 districts in Kamataka.
State highways provide a crucial link to population and economic centers, and support for the development of the state highway network in Karnataka through this project will promote economic activities and foster inclusiveness.
An ongoing road improvement project financed by ADB with a loan of $315 million is under implementation, which involves upgradation of about 615 kilometers of state roads.
The new loan will continue ADB support to the Government of Karnataka's state-wide road improvement program, and will also help stabilize and deepen institutional capacity, and improve road safety.


<--Back