Norms for digital lending, BNPL likely in this month; circular could be released next week

The Reserve Bank of India (RBI) is set to release guidelines for buy now, pay later (BNPL) and digital lending later this month, said two people in the know. A circular could be out as early as next week, one of them said. On June 20, the regulator wrote to non-bank prepaid payment instrument (PPI) issuers clarifying that such instruments cannot be loaded using credit lines. The communication was seen as a precursor to the release of norms on digital lending and BNPL. Quite a few BNPL players had been using the prepaid card route for lending to customers. The guidelines may take note of certain dominant trends in the BNPL segment, one of the people said. A report by Dvara Research based on a...

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HDFC merger may not need CRR-SLR forbearance: Experts

HDFC Bank is well prepared to meet reserve ratio requirements post its merger with its parent and it may not need regulatory forbearance on that count, according to banking sector experts. Housing Development Finance Corporation (HDFC) carried an average liquidity of Rs 46,000 crore through the year ended March 2022. According to some estimates, HDFC Bank currently holds government securities worth 29% of its deposit base, against the statutory liquidity ratio (SLR) requirement of 18%. Even though HDFC Bank has asked for relaxation on SLR compliance, it may not really need it, said R Gandhi, former deputy governor, Reserve Bank of India (RBI). “Their G-Sec investments are roughly 29% as a share...

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Kotak bank acquires agriculture, healthcare finance portfolio from DLL India subsidiary

Private sector lender Kotak Mahindra Bank on Friday said it has acquired agriculture and healthcare equipment financing portfolio of the Indian subsidiary of global asset finance company De Lage Landen International BV (DLL). With this, the bank has secured 25,000 customers with a total credit outstanding of around Rs 582 crore. The bank has also received an outstanding non-performing assets portfolio of around Rs 69 crore. Launched in September 2021, the bank’s healthcare finance division provides funds of up to Rs 10 crore to hospitals, laboratories, diagnostic centres, nursing homes and clinics. It also finances tractor purchases, crop loans, working capital loans for SMEs. “Kotak Mahindra...

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RBI imposes restrictions, withdrawal caps on 4 co-op banks

The Reserve Bank on Friday imposed several restrictions, including a cap on withdrawals for the depositors, on four cooperative banks for six months given their deteriorating financial positions. from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/NRrj8...

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Evidence of negative relationship between banks’ holdings of G-Secs and loan growth: RBI study

Though G-Sec holdings impart liquidity and stability to the banking system, they can crowd out the private sector investment by reducing the pool of the lendable funds available with the banks from The HinduBusinessLine - Money & Banking https://ift.tt/6Ukhz...

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FM Nirmala Sitharaman directs PSBs to onboard accounts aggregator system

Finance minister Nirmala Sitharaman on Thursday asked chiefs of state-run banks to onboard the accounts aggregator system, which was introduced in September last year, by the end of this month. In a meeting with chiefs of various public-sector banks (PSBs) and regional rural banks (RRBs) here, the minister also asked sponsor banks to “formulate a clear road map in a time-bound manner to further strengthen the RRBs and support the post pandemic economic recovery”, according to a finance ministry statement. The account aggregator network is a data-sharing system, which was aimed at heralding the era of open banking in India, and empowering millions of customers to digitally access and share their...

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Only 40% street vendors repay working capital loan given during Covid-19

The scheme was initiated in July 2020 to help street vendors hit by Covid-19. Under the scheme, street vendors were offered loans in three tranches: '10,000, '20,000 and '50,000. from Banking/Finance-Industry-Economic Times https://ift.tt/QLxPM...

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Re deposits more attractive for banks despite measures from RBI

In FY14, banks had raised a record $27 billion through the FCNR(B) route after the RBI removed interest rate caps and also offered banks a 3.5% interest rate subsidy to prevent the rupee's rout. from Banking/Finance-Industry-Economic Times https://ift.tt/ZuFNi...

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We would like to be present in 1,000 towns and cities: Jairam Sridharan, Managing Director, Piramal Finance

Piramal Finance is looking at an 800-strong branch network as it expands to small-town India, managing director Jairam Sridharan tells Shritama Bose in an interview. Interest rates have remained unchanged for that customer segment so far, but they will rise over the next nine months, he adds. Excerpts: Who is your target customer?Our target customer is a small-wallet customer from either tier-II, tier-III towns or the outskirts of the tier-I towns. The customer usually would have a monthly income of Rs 15,000-16,000 to Rs 60,000-70,000. A little over half of our customers are self-employed. They could be small shop-owners or have a small factory or trading unit in a small town. They tend to...

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Spike in bond yields: Treasury losses to hurt banks’ income, profitability in Q1

Treasury losses could hurt banks’ earnings for the quarter ended June and erode operating profits by up to 25% on a year-on-year basis, according to analysts tracking the sector. Banks, especially those in the public sector, are set to book mark-to-market (MTM) losses on their securities portfolios in the first quarter of FY23 as a result of a spike in bond yields. While public sector banks (PSBs) have requested the Reserve Bank of India (RBI) to let them spread the required provisioning against such losses through the four quarters of the current fiscal, the regulator is yet to accede to the request. Even as lenders book treasury losses, the outlook is not altogether dim for them. Kotak Institutional...

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Banks working with CEIB on data sharing to curb frauds

"We will have a uniform format for obtention of information and further aim towards digitisation of the whole information network, so that banks have real-time information," he said, adding that earlier this year the Reserve Bank had also given its nod on the Standard Operating Procedure (SOP) that the banks had proposed for submission of information or documents with the CEIB. from Banking/Finance-Industry-Economic Times https://ift.tt/VGCQv...

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RBI cancels license of Pune-based Shri Anand Co-operative Bank

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has been asked to issue an order for winding up the bank and appoint a liquidator for the bank. from Banking/Finance-Industry-Economic Times https://ift.tt/WJsaR...

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Chip woes slow vehicle loan growth in May

By Shashank Didmishe The growth in vehicle loans issued by the banks continued on a downward trajectory in May as semiconductor shortages weighed on production which also impacted sales. Banks’ vehicle loans outstanding as on May 31 was at Rs 4.2 trillion, which was up by 1.2% month-on-month. The growth in the vehicle segment has slowed for two consecutive months, according to the latest Reserve Bank of India (RBI) data. In April, vehicle credit outstanding grew by 2.7% on month. In contrast, banks’ vehicle loan portfolio improved by a robust 22.2% on-month in March and 17.1% in February. “The semiconductor shortage still persists and has impacted the original equipment manufacturers’ (OEM)...

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Indian Overseas Bank seeks buyers for 344 bad loans

Aban Holdings has outstanding loans of ₹1,271 crore, the largest account on the list. Two Essar companies are Essar Oil & Gas Exploration with ₹77.8 crore outstanding, and Essar Power Gujarat with ₹148 crore. Other big-ticket accounts include Rotomac Global with loans of ₹750 crore, Frost International with ₹839 crore, Era Infrastructure (₹567 crore) and Vadraj Cement (₹521 crore). from Banking/Finance-Industry-Economic Times https://ift.tt/TDW2V...

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Bajaj Finance books 7.4 million loans in Q1

Non-banking financial company Bajaj Finance on Wednesday said it had recorded the highest-ever quarterly increase in its customer franchise at 2.7 million during Q1FY23. The NBFC’s customer franchise as of June 30 stood at 60.3 million compared to 50.5 million a year ago. New loans booked by the company during Q1FY23 were 7.4 million compared to 4.6 million in Q1FY22. Core assets under management (AUM) grew 31% year-on-year to Rs 2,04,000 crore as of June 2022 compared to Rs 1,56,115 crore as of June 30. Core AUM in Q1FY23 grew by Rs 11,900 crore, the company said in a regulatory filing on its provisional first-quarter performance. Bajaj Finance said its liquidity position remained strong with...

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Fintech companies, NBFCs funded by Chinese money generated Rs 950-cr slush funds in India: ED

The Enforcement Directorate (ED), therefore, recently attached Rs 86.65 crore worth funds lying in a total of 155 bank and payment gateway accounts of NBFCs like Kudos Finance and Investments Private Limited, Acemoney (India) Limited, Rhino Finance Private Limited and Pioneer Financial and Management Services Private Limited and their linked fintech companies. from Banking/Finance-Industry-Economic Times https://ift.tt/Uzw9r...

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RBI announces measures to boost forex inflows

Growth prospects strong and all capital flows barring portfolio investments remain stable, said RBI from The HinduBusinessLine - Money & Banking https://ift.tt/I0ptw...

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RCap resolution: Bidders prefer consortium approach

Large number of subsidiaries turning out to be a challenge for bidders as many want to acquire only the insurance arm from The HinduBusinessLine - Money & Banking https://ift.tt/QpzMo...

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Irdai permits general insurers to issue sophisticated add-ons for motor insurance

"The Concept of Motor Insurance is constantly evolving. The advent of technology has created a relentless pace for the insurance fraternity to rise up to interesting yet challenging demands of the millennials. The general insurance sector needs to keep pace with and adapt to the changing needs of the policyholders," Irdai said in a statement. from Banking/Finance-Industry-Economic Times https://ift.tt/h1zxs...

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Crypto lender Nexo to acquire Vauld

The completion of this transaction is pending due diligence from The HinduBusinessLine - Money & Banking https://ift.tt/6YAif...

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Poonawalla Fincorp Q1 disbursements jump 98 per cent YoY

Company’s disbursements during the first quarter of 2022-23 surpassed the fourth quarter of 2021-22 from The HinduBusinessLine - Money & Banking https://ift.tt/ab5RS...

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Yes Bank advances rise 14%, RBL Bank’s up 7% in June quarter

Yes Bank on Tuesday said its loans and advances grew 14% year on year (YoY) on a provisional basis to Rs 1.87 trillion as on June 30, 2022. In a similar business update, RBL Bank said its gross advances grew 7% YoY, slower than its peers, to Rs 62,095 crore, while South Indian Bank’s loan book grew 11% YoY to Rs 64,760 crore. Yes Bank’s deposits grew 18.3% YoY to Rs 1.93 trillion as on June 30, 2022. However, the lender saw its deposit base shrinking 2% on a sequential basis. Its low-cost current account savings account (CASA) ratio improved to 31.6% from 28.1% a year ago. “With respect to deposits, daily average deposit balances in Q1FY23 have sequentially grown by 4.4% on the back of sequential...

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Payment operators need RBI nod for M&A

The RBI has said that non-bank payment system operators (PSOs) will need prior permission before a takeover of any company or transfer of payment activity. from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/EteH6...

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HDFC merger gets RBI nod, will up pvt banks’ mkt share

from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/mfjEY...

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Private banks report strong loan growth in Q1FY23

A clutch of private banks reported strong provisional loan growth numbers for the quarter ended June. HDFC Bank, Federal Bank, IndusInd Bank, CSB Bank and AU Small Finance Bank (SFB) reported double-digit loan growth in Q1FY23. Deposits grew slower than loans for most banks during the quarter. HDFC Bank’s advances grew 21.5% year on year (YoY) to Rs 13.95 trillion as on June 30, 2022. Gross of transfers through inter-bank participation certificates and bills rediscounted, the bank’s advances grew 22.5% over June 30, 2021. Retail loans at the country’s largest private lender grew 21.5% YoY in Q1, commercial and rural banking loans grew 29%, and corporate and other wholesale loans grew 15.5%. During...

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RBI slaps Rs 1-crore penalty each on KMB, IndusInd

The Reserve Bank of India (RBI) on Monday said it has imposed monetary penalties on Kotak Mahindra Bank and IndusInd Bank for failing to comply with various regulations. Kotak Mahindra Bank was fined Rs 1.05 crore for non-compliance with directions on limiting liability of customers in unauthorised electronic banking transactions, and statutory and other restrictions governing loans and advances. The RBI imposed the fine on the bank after conducting statutory inspection with reference to its financial positions as on March 31, 2018 and March 31, 2019. The examination revealed that in certain instances of unauthorised transactions, the bank had failed to credit the eligible amount to the depositor...

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RBI move on lending rate to spur NBFC-MFIs profitability: Crisil

Enhanced flexibility to set lending rates for microfinance borrowers will be one of the drivers of revival in profitability for non-banking financial company-microfinance institutions (NBFC-MFIs) this fiscal, rating agency Crisil Ratings said on Monday. This emanates from the Reserve Bank of India’s removal of the interest margin cap on lending rate under its new regulatory framework for microfinanciers. The other factors that will support an improvement in profitability include reduction in credit cost and increase in permissible household income limit according to the new framework, the agency said in a release. “These, in turn, will help enlarge the market in terms of target borrowers and...

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RBI gives green signal to HDFC, HDFC Bank merger proposal

HDFC Bank on Monday said it has got banking sector regulator RBI's nod for the merger proposal of its parent HDFC Ltd with itself. Touted as the biggest transaction in India's corporate history, HDFC Bank on April 4 agreed to take over the biggest domestic mortgage lender in a deal valued at about $40 billion, creating a financial services titan. from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/DrWZR...

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RBI approves merger of HDFC Bank with parent HDFC Corp

“HDFC Bank has received a letter dated July 04, 2022 from the Reserve Bank of India whereby the RBI has accorded it’s ‘no objection’ for the Scheme, subject to certain conditions as mentioned therein,” the bank said in an exchange filing. Earlier HDFC Bank had stated that it has applied to the RBI seeking leeway to meet certain regulatory conditions. from Banking/Finance-Industry-Economic Times https://ift.tt/BGjUH...

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RBI's deposit insurance arm to pay depositors of two co-operative banks in August

Eligible depositors of Shankarrao Pujari Nutan Sahakari Bank will get the payment on August 10, and those of Harihareshwar Sahakari Bank on August 28, according to a DICGC circular.The Reserve Bank of India (RBI) had imposed several restrictions, including on withdrawals by depositors, on these two banks in May in the wake of their deteriorating financial positions. from Banking/Finance-Industry-Economic Times https://ift.tt/cBd8E...

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Banking frauds of over ₹100 crore declined in FY22

In terms of cumulative amount, it has come down to ₹28,000 cr from ₹65,900 cr in FY21 for PSBs from The HinduBusinessLine - Money & Banking https://ift.tt/MbDXe...

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Banking frauds of over Rs 100 cr see significant decline in FY’22

Frauds in the banking sector involving sums of over Rs 100 crore have declined significantly, with banks reporting cases worth Rs 41,000 crore in 2021-22 compared to Rs 1.05 lakh crore in the previous year. According to official data, the number of fraud cases in private as well as public sector banks dropped to 118 in FY22 from 265 in 2020-21. In the case of public sector banks (PSBs), the total number of fraud cases of over Rs 100 crore declined to 80 from 167 in FY’21, while for private sector lenders such cases reduced to 38 in FY’22 from 98 earlier, as per the data. In terms of cumulative amount, it has come down to Rs 28,000 crore from Rs 65,900 crore in FY’21 for PSBs. For private sector...

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HDFC Ltd receives observation letters from BSE, NSE for proposed merger

No adverse observations from BSE, no objection from NSE from The HinduBusinessLine - Money & Banking https://ift.tt/JQGnS...

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Banking frauds of over Rs 100 cr see significant decline in FY'22

In a bid to check frauds, the RBI has been taking several steps including improving efficacy of Early Warning System (EWS) framework, strengthening fraud governance and response system, augmenting data analysis for monitoring of transactions and introduction of dedicated Market Intelligence (MI) Unit for frauds. from Banking/Finance-Industry-Economic Times https://ift.tt/WPgX9...

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Financial Services Institutions Bureau: FSIB to be much more than just a headhunter

The Financial Services Institutions Bureau (FSIB), which will replace the Banks Board Bureau (BBB), will be much more than a mere headhunter to fill in key posts at state-run banks, insurers and other financial institutions (FIs). According to an official order, reviewed by FE, the FSIB will advise the government on a suitable performance appraisal system for whole-time directors and non-executive chairmen of the state-run financial services institutions. It will build a data bank relating to the performance of public-sector banks (PSBs), FIs and insurance companies. It will advise the government on “formulation and enforcement of a code of conduct and ethics for whole-time directors” in these...

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