Public sector Indian Overseas Bank has elevated Ajay Kumar Srivastava as its managing director and chief executive officer with effect from January 1, the bank said on Saturday. Prior to taking up the new role, Srivastava was serving the city-headquartered bank as its executive director.
Credit to industry continued to register a strong pick-up, with total loans accelerating to 13.1%, while personal loans expanded at 19.7% in November, largely driven by housing and vehicle loans.
RFL, an NBFC arm of Religare Enterprises Ltd, owed about Rs 5,300 crore to the consortium of lenders led by the State Bank of India (SBI). Other lenders include the Bank of Baroda, Union Bank of India, Canara Bank, Punjab National Bank, Bank of India, IDBI Bank, Punjab & Sind Bank, and Bank of Maharashtra.
Indian shadow lender Shriram Finance Ltd said on Friday it had secured a five-year loan worth $100 million from the Asian Development Bank to provide credit to its customers towards purchase of new and used vehicles across India.
"The government wants that banks proactively encourage traders to use this mechanism, and ensure their departments concerned are fully aware of the framework," said a senior executive of a bank who is aware of the development. According to the executive, banks have already had discussions with their counterparts from Russia, Cuba, Luxembourg, Sudan, and Tajikistan.
The Reserve Bank of India's push for priority sector lending is accelerating with the PSL Certificates trading gaining traction at more than Rs. 6 lakh crores. This opens up new vistas of credit for the rural households as well as MSMEs through NBFCs and Housing Finance Companies.
Banks is the primary and dominant option for stable funding for mid-sized NBFCs. The increase in bank funding to non-banks is also because these entities have demonstrated a reasonably satisfactory performance during the COVID-19 period.
In the private sector banking space, consolidation remained the flavour, with parent HDFC Ltd deciding to merge with HDFC Bank, and Axis Bank announcing the takeover of the retail portfolio of global giant Citibank. These two deals are expected to be completed in 2023.
The digital revolution in the banking and financial sector met the need for convenient services, altering customers' expectations of their banks. The question that lies ahead is, what will fuel the next cycle of innovation and expectations?
Focus shifts from home and vehicle finance, the traditional mainstays, to unsecured and MSME loans in quest for returns. Now, stronger balance sheets with higher provisioning and lower leverage, receding asset-quality concerns, and steadily normalising funding access provide NBFCs a strong foundation to boost growth as credit demand piggybacks the ongoing economic rebound.
The unified payments interface (UPI) transactions in India witnessed a drastic growth in 2022. A robust growth of 650 per cent was recorded at the semi-urban and rural stores in India. A growth of nearly 25 per cent and 14 per cent in value and volume, respectively, in assisted financial transactions across semi-urban and rural retail counters in the country in 2022.
From vanilla debt products to complex, new structures, storied UK bank takes new issuers, co-led around $5 billion on loans for PEs in last 24 months.
"Going forward, we will only focus on organic growth in our current and proposed line of business. We will continue to build a strong retail franchise in consumer and MSME financing. We are already doing ₹1,200 crore of organic business per month," said Adar Poonawalla.
"Empirical evidence suggests that a build-up of concentration in retail loans may become a source of systemic risk," the RBI said in its trends and progress in banking report for FY22.
Shares of the bank closed at Rs 106.60 apiece on BSE, up by 0.95 per cent from previous close.
“Based on the date of occurrence of frauds, advances-related frauds formed the biggest category prior to 2019-2020,” the RBI said. “In terms of number of frauds, the modus operandi shifted to card or internet based transactions. Additionally, cash frauds are also on the rise.”
During a meeting to create awareness about COVID-19 last week, sources said, the regulator also stressed that insurers should offer incentives to policyholders on getting RT-PCR tests done through their wellness network.
RFL, an NBFC arm of Religare Enterprises Ltd, owed about Rs 5,300 crore to the consortium of lenders led by State Bank of India (SBI). As part of the proposed OTS, the company in June 2022 deposited Rs 220 crore earnest money with the lead lender demonstrating its commitment towards RFL revival.
The Aon analysis also showed that overall attrition in the banking segment is 24.7% between January and September, with domestic banks showing 30.6% attrition and foreign banks 16.3%. Fintech players also contributed to high attrition levels of 27.4%. Wealth management players, too, saw a significantly high number of employee departures at 26.4%, while investment banks saw exits at 21.8%. The lowest exits in the BFSI space were recorded with asset management companies at 16.3%.
The board of directors considered and approved to raise capital through an issuance of non-convertible redeemable unsecured Basel III compliant tier II bonds for amount up to Rs 1,500 crore, the bank said in a regulatory filing.
Though it will be difficult for the government to give out too many tax sops, ET Wealth believes there are some areas that need fixing. For instance, the Rs.1.5 lakh deduction limit under Section 80C was last revised more than eight years ago in 2014. For many Indians, tax saving is a key driver of investments. But the stagnant Section 80C deduction limit means they have not seen any reason to save more.
Though more tax efficient than dividends, buyback offers do not entirely exempt stockholders from the tax axe.
Sudhir Kaushik of Taxspanner.com tells readers how they can optimise their tax by rejigging their income and investments.
Chanda Kochhar and her husband Deepak Kochhar were arrested by the Central Bureau of Investigation (CBI) last week in connection with alleged cheating and irregularities in loans sanctioned by ICICI Bank to Videocon Group companies. A special court in Mumbai on Saturday remanded both of them to CBI custody until December 26.
"We emphasise in case of small tariffs, the traditional understanding of tariffs as protecting domestic industry fails. We request particular attention to parts of PCBA (printed circuit board assembly), connectors, and particularly camera modules," it said. To increase localisation of manufacturing, the association has recommended removal or a reduction in smaller "nuisance" tariffs of 2.75% on input components.
"Going forward, we expect card expenditure to moderate further over the next couple of months due to the end of festive season and inflationary impact on consumer spending," said Bunty Chawla, analyst, IDBI Capital.
The proposed amendments suggest that the minimum paid up capital be specified by the Insurance Regulatory and Development Authority of India (IRDAI) considering the size and scale of operations, class or sub-class of insurance business and the category or type of insurer. Currently, solvency ratio is pegged at 150 per cent while paid up capital is Rs 100 crore as per the existing law.
Chanda Kochhar, who is facing a probe over alleged irregularities in sanctioning loans to the Videocon Group, has been booked under certain sections of the Prevention of Corruption Act, along with charges of cheating and criminal conspiracy under the Indian Penal Code. Under the anti-corruption Act, prosecution needs the approval of a competent authority.
Chanda Kochhar, who was arrested for a cash-for-loan scam on Friday, was once a powerful banker and instrumental in making ICICI Bank the country's biggest private sector lender.
The winning bidder, Swan Energy - Hazel Mercantile team, offered a staggered payment of ₹2,040 crore, while on the net present value (NPV) basis it was ₹1,218 crore. Of the ₹2,040 crore offered by the duo, a sum of ₹1,640 crore will be paid over the next five years, and the remaining payment will be made from the recovery of certain pending dues. Naveen Jindal owned Jindal Steel and Power was also in the fray to acquire RNEL.
Large PSU banks like State Bank of India, Bank of Baroda, Canara Bank are already trading at close to 1 price to book value. Peak valuations for these banks had hit a high of around 1.5 times book around fiscal year 2012 and 2014. Mid-sized and small banks are currently trading at 0.5-0.7 time price to book and had touched a high of 1 times book around 2014. Bank Nifty has gained around 28% whereas PSU banks were up 74% in the last six months (as of December 21, 2022), ICICI Securities said in a report.
Additionally, the lending framework will set rigorous standards for green buildings, allowing HDFC to boost a quality green housing pipeline while channelling funds to this segment. IFC's financing package is also aimed at enabling HDFC to on-lend to people ensuring they can afford such housing.
Mail sent to Hinduja Group did not elicit response till filing of the story. Earlier this week, the Ahmedabad-based Torrent group emerged the highest bidder by putting a bid of Rs 8,640 crore to acquire Anil Ambani group's NBFC entity.
And, as demand for M&A has grown, particularly in the rapidly expanding mid-market, the firms have filled a market void by initially focusing on mid- and small-sized deals with lower fees and higher volume - and then, in the last four years, going after larger deals.
Banks have approached the government, saying that since accounts are seeded with Aadhaar, there is no need for PAN as well. "We have received representations in this regard, and they are being examined," said an official aware of the matter.
As per the data in the report, a total of 26,54,001 health insurance claims were settled. Irdai said insurance companies settled over 2.25 lakh death claims on account the pandemic and paid Rs 17,269 crore towards claims up to March 31, 2022.
IDBI Bank is 95% owned by Life Insurance Corp of India (LIC) and the government, but the Reserve Bank of India (RBI) has classified it as a private lender.
Hinduja Group made the second-highest offer, of Rs 8,110 crore, for the core investment company that houses 20 financial services entities, ranging from insurance to broking, the people said.
"Banks had taken board approvals to raise capital this fiscal and they are now tanking up as the busy season approaches. This is probably the last tranche of Tier 1 issues by public sector banks for this fiscal and this keeps them ready for the likely increase in loan demand in the fourth quarter," said a banker aware of the transactions.
Reliance Capital is the third large NBFC against which RBI has initiated bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC). The other two were Srei Group NBFC and Dewan Housing Finance Corporation (DHFL).
MoS Finance Bhagwat Karad said that the total number of wilful defaulters each having outstanding loan of Rs 25 lakh and above in public sector banks was 8,045 as on June 30, 2017 and 12,439 as on June 30, 2022. In case of private sector banks, it was 1,616 as on June 30, 2017 and 2,447 as on June 30, 2022.
Neobank partnerships driving hyper-personalised financial products, AI-driven efficiency in digital lending services and wealth tech for everyone. These three trends will enable fintech innovation in India and retain its position as the global fintech leader in 2023.
The bank had moved the dedicated bankruptcy court against the company's insolvency resolution professional's decision to reject the claim and not include the bank in the committee of creditors (CoC). Yes Bank, in its December 2021 response to a query from the resolution professional, had stated that the developer had not defaulted in repayment of its loan and the bank had not invoked the corporate guarantee provided by the corporate guarantor
The planned e-auction for RCL, as approved by the committee of creditors (CoC), is scheduled to be held on December 21, and the exit of the highest bidder on the eve of the auction has come as a big jolt to the lenders.
The bank has launched a step-down subsidiary Axis Pension Fund Management through its subsidiary Axis Asset Management Company, which marks its foray into the retirement business, the statement added. Axis Bank's chief executive and managing director Amitabh Chaudhry said Axis Pension Fund will capitalise on the investment management capabilities and distribution strength of the group and aims to be the preferred retirement solutions provider.
The rating agency expects gross direct premium of general insurance companies to grow by 12% to 15% in the medium term with private insurers continuing to outperform government owned insurers.
To transmit assets to the legal heir, Nomination is the simplest and most effective way. Read to know more
"As per RBI data, public sector banks (PSBs) and scheduled commercial banks (SCBs) wrote off an aggregate amount of Rs 8,16,421 crore and Rs 11,17,883 crore respectively during the last six financial years," Minister of State for Finance Bhagwat Karad said. With regard to the list, including names of write-offs/defaulters who have defaulted more than Rs 1 crore to the public sector banks, RBI has informed that borrower-wise information on written off loan accounts is not maintained by it, he said.
The federal finance ministry is looking to relax a tax clause, which would require the buyer of IDBI Bank to pay additional tax if the share price rises post the final bid, one of the officials said. Share prices tend to increase after financial bids are invited by the government, the official said, noting that it would be "unfair" to ask the new buyer to pay tax on an increase in price from the time bids are placed to the closure of transaction.
Earlier this month NARCL had matched Gujarat-based NBFC Raj Radhe Finance's ₹130 crore challenge to its ₹100 crore offer to take over the ₹2,623 crore outstanding dues of the company, ET reported in its December 5 edition. It is now learnt that the offer is on a full cash basis.