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Indian Overseas Bank introduces savings account portability online for customers, making account transfer more efficient and easier. Customers can initiate the transfer by logging into the bank's website and providing their account number. A one-time password is sent to the registered mobile number for verification. Customers can specify the desired branch for the transfer of funds. The successful transfer is confirmed with the account number and destination branch code.from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/qbgQox4
While Reliance Industries, HDFC Bank, ICICI Bank, Hindustan Unilever, Bharti Airtel, ITC, State Bank of India and Life Insurance Corporation of India (LIC) were the gainers, Tata Consultancy Services (TCS) and Infosys were the laggards. The market valuation of HDFC Bank jumped Rs 29,828.84 crore to Rs 12,97,972.04 crore. Reliance Industries continued to retain the title of the most valued firm, followed by TCS, HDFC Bank, ICICI Bank, Infosys, Hindustan Unilever, Bharti Airtel, ITC, State Bank of India and LIC.
India's foreign exchange reserves reached a 21-month high of $620.441 billion in the week ending December 22, 2023, with the Reserve Bank of India adding about $58 billion to its foreign exchange kitty in 2023. The country's foreign currency assets rose to $549.747 billion, while gold reserves declined to $474.74 billion. The decline in forex reserves since October 2021 can be attributed to a rise in imported goods' cost in 2022 and RBI's intervention to defend the rupee against the US dollar's surge.
The Reserve Bank of India (RBI) has directed banks to create a 'service availability web page' or SEWA dashboard. This dashboard will provide customers with real-time information on the availability of digital payment channels and services offered by different lenders.
RBI deputy governor Swaminathan J emphasized the need for banks to invest in IT and IT security to ensure smooth disaster recovery and support all channels. He highlighted the importance of integrated business continuity plans and real-time mirroring of applications. Swaminathan also acknowledged the representation from banks regarding exemption from cash reserve ratio for green deposits and priority sector status for green lending, but emphasized the need for careful consideration to avoid unintended consequences. Additionally, he mentioned that RBI tightened regulations for bank lending to NBFCs due to the rapid growth of credit in this segment.
The RBI has increased the capital requirements for SBI and HDFC Bank under its guidelines for systemically important banks as it sees higher contagion risks. The need for a higher capital buffer comes at a time when the central bank analysed how problems in one bank could affect others in its financial stability report. The report shows that if the most critical bank were to fail, it would now affect 3.6% of all banks’ tier-1 capital, up from 2.2% in March 2023.
The RBI report expresses concern over the dependence of finance companies on banks for funding and highlights the need for broad-basing their funding sources. It also raises concerns over banks' lending to borrowers who can influence the lender's decision, leading to compromise in pricing and credit management. The report states that the asset quality of Indian banks is at a decadal high, with gross non-performing assets falling to 3.2% at the end of September. The consolidated balance sheet of banks grew by 12.2% in 2022-23, and the share of PSBs declined while private banks gained a share.
Sensex and Nifty hit new all-time highs driven by strong foreign fund buying. Sensex touched 72,120 points, closing just below that mark at 72,038, up 702 points. Nifty reached 21,676 points and closed at 21,655, up 213 points. Foreign portfolio investors (FPIs) had a net buying figure of Rs 2,926 crore, while domestic funds were net sellers at Rs 192 crore. The market capitalization of BSE is now at Rs 368 lakh crore. HDFC Bank and Infosys contributed the most to the index's gain, while Nifty also followed similar trajectory.
SBI has raised interest rates on short-term fixed deposits by 50 basis points, marking its largest increase in recent months. The bank now offers 3.5% return on deposits between 1 week and 45 days, and 4% for senior citizens. SBI's 400-day Amrit Kalash scheme provides 7.1% interest (7.6% for senior citizens) until March 31, 2024. The bank has also increased rates for deposits between 180 to 210 days by half a percentage point. Other banks are expected to follow suit as liquidity in the system decreases.
The government has asked banks to be prepared for the risk of deepfake clips, where voices are cloned to deceive people. Banks need to include cyber risks in stress tests to assess their vulnerability. This is already being done by banks in Europe and Singapore. Financial services secretary Vivek Joshi emphasized the importance of upgrading tools to protect against emerging threats. He also highlighted the need for a new cycle of private investment. Joshi believes that the rupee will be the least volatile major currency in 2023.
Kotak Mahindra Bank announced today that the Reserve Bank of India (RBI) has approved the appointment of C S Rajan, Independent Director of the Bank, as the Part-time Chairman. The approval is effective from 1st January 2024, marking a two-year tenure. Rajan has over 40 years of experience in various government portfolios. He assumed the role of Independent Director on the Bank's Board on 22nd October 2022. A retired IAS officer of the 1978 batch. He is also chairman of the government appointed board of the IL&FS.
SBI FD rates hiked: The State Bank of India (SBI) has announced an increase in interest rates on certain fixed deposits (FDs) for deposits below Rs 2 crore.
India's central bank has imposed new rules barring lenders from investing in alternative investment funds (AIFs) that hold stakes in their borrowers. The move aims to prevent an unstable build-up of assets in the financial system. However, lawyers and analysts argue that the rules will increase costs for AIF managers and make it harder to raise cash in the future. The top seven shadow lenders in the country had invested around $1.35 billion in these AIFs, according to their annual reports.
A pilot project has been launched in Panchmahal and Banaskantha districts of Gujarat to expand the reach and capacity of rural cooperative banks. Bank accounts of all the members of cooperative societies are being opened in the District Central Cooperative Banks and Rupay Kisan Credit Cards are being distributed. The success of this model will be replicated in all districts to increase the footprint of rural cooperative banks. The pilot project has led to an increase in the flow of funds and number of transactions through Rupay Kisan Credit Cards.
CBDT has released the new ITR forms - ITR-1 and ITR-4 - for FY 2023-24 early this year. These forms are applicable for filing income tax return for AY 2024-25 with the last date of July 31, 2024, unless extended.
Small banks face challenges in appointing new CEOs due to financial constraints, salary and banking experience constraints set by RBI. North East Small Finance Bank and Kerala-based Dhanlaxmi Bank are struggling to find suitable candidates. Equitas Small Finance Bank's founder P N Vasudevan accepted the board's request to continue leading the company after an unsuccessful CEO search. RBI guidelines discourage disproportionate salaries in relation to profits, making it difficult for small banks to attract top-tier candidates.
The Reserve Bank of India (RBI) will no longer have a director on the board of RBL Bank as the central bank-appointed additional director completes his two-year term. The absence of an RBI director on the board is seen as a positive sign, indicating confidence in the stability of RBL Bank. RBI chief general manager Yogesh Dayal, appointed in December 2021 during a period of uncertainty, concluded his two-year term on the board. Subsequently, in July 2022, R Subramaniakumar was appointed as the managing director and CEO of RBL Bank for a three-year term, with the approval of the RBI.
Green shoots in the investment cycle are becoming visible due to government spending in the infrastructure sector, according to Shanti Ekambaram, the whole-time director of Kotak Mahindra Bank. The government's focus on infrastructure development has created opportunities for private sector capital expenditure. The RBI has tightened norms for unsecured consumer credit, urging caution in the financial sector. Last month, the RBI revised norms for risk weights on certain consumer loans, increasing the capital buffer required for unsecured personal loans and potentially impacting banks' capital adequacy ratio.
The finance ministry has directed heads of public sector banks to closely monitor and review the top 20 cases under the Insolvency and Bankruptcy Code (IBC) as part of their strategy for managing bad assets. During a meeting with the managing directors and CEOs of these banks, financial services secretary Vivek Joshi emphasized the monthly review of these cases for resolution. Additionally, the ministry urged banks to oversee cases that have been pending for admission and resolution under the IBC.
The Reserve Bank of India (RBI) has introduced a draft framework for self-regulatory organizations (SROs) among entities it regulates. The framework emphasizes the importance of SROs fostering consumer protection, fair competition, transparency, and innovation. To qualify as an SRO, an entity must have sufficient authority to set and enforce ethical, professional, and governance standards. Jatinder Handoo, CEO of the Digital Lenders Association of India, acknowledges that the RBI has outlined a comprehensive framework covering critical aspects.
A paper by the finance ministry's economic division calls for reform in the credit rating process of global agencies like Moody's, Fitch, and Standard & Poor's. The paper highlights the opaqueness and disadvantage faced by developing countries due to the rating methodologies. It criticizes the weighting of foreign ownership of banks and the lack of transparency in selecting experts. The review of the credit rating methodologies of the officials showed that there was considerable reliance on qualitative variables to capture 'willingness to pay'.
The Centre is set to miss its privatisation target for state-run companies this year due to stalled progress and limited appetite before elections. Roadblocks, including bureaucratic sloth, have hindered the process, affecting big-ticket enterprises like IDBI Bank. Stake sales in state-run banks and an insurance company recommended for privatisation by NITI Aayog have not moved forward. The privatisation of Pawan Hans has been scrapped, and the large public sector policy has not taken off. The disinvestment process is now awaiting the new government for a fresh start.
The S&P BSE Sensex surged by more than 900 points from its intra-day low of 69,920, while the Nifty climbed by 300 points to reach a high of 21,288. HDFC Bank and RIL were the top contributors to the index, followed by Infosys.
Italy's benchmark bond yield hits lowest level in 15 months despite central bank officials' attempts to rein in the exuberance. Yields have tumbled due to falling inflation and expectations of interest rate cuts from the ECB and the US Federal Reserve. Investors anticipate more than 150 bps worth of rate cuts next year. Italy's borrowing costs have benefited from lower interest rate expectations. The gap between Italy and Germany's bond yields narrows to 160 bps. Shorter-dated yields also fall. ECB officials caution against excessive optimism.
The IMF criticizes the Reserve Bank of India's intervention in the foreign exchange market, but the central bank dismisses the charge. The IMF's report shows a divergence of views on the exchange rate and foreign exchange intervention between the IMF and Indian authorities. The IMF notes that the rupee-dollar exchange rate remained stable, suggesting excessive forex intervention. In response, the RBI states that the exchange rate is market determined and it intervenes only to prevent excessive volatility.
The finance ministry plans to review insolvency cases that are stuck in bankruptcy tribunals. The government aims to address concerns about the slow progress of these cases, which were initially identified by the Reserve Bank of India and the government. The review will help identify pain points for creditors and improve the functioning of the tribunals. Authorities are also examining the roles of bankers and resolution professionals to make the process more transparent and efficient.
In a representation to the RBI earlier this month, lenders argued that penal interest rates contribute to better credit discipline. They also stated that they require additional time to reconfigure their internal systems.
States are adopting a 'just in time release' of funds to improve efficiency and reduce borrowing. The Centre's move to rework fund release saved around Rs 10,000 crore last year and is expected to save more this year. However, banks that relied on government cash flow are now affected. The Centre implemented a Treasury Single Account and two other accounts to reduce fragmented banking arrangements. The new system releases funds promptly, tracks transactions in real-time, and improves delivery efficiency.
Remittances to India are estimated to rise over 11% to $125 billion in 2023, helping it retain the top spot ahead of Mexico and China. Flows to South Asia are estimated to have grown 7.2% in 2023 to reach $189 billion. Remittances from highly skilled Indians in the US, the UK, and Singapore account for 36% of total remittance flows to India. The UAE is the second-largest source of remittances to India after the US, accounting for 18% of the total.
Goldman Sachs plans to expand its credit business in India, targeting the nation's wealthy diaspora as global investors shift focus to the fastest-growing major economy. The investment bank aims to broaden its range of loans through its shadow banking unit and obtain a license to scale up currency trading. Indian markets have benefited from the shift of emerging market equity flows from China. Goldman Sachs is also looking to serve Indian entrepreneurs who have moved abroad during the pandemic from offices in Singapore, London, and Dubai.
The appellate tribunal on Friday declined to stay the merger of Zee and Sony Pictures (renamed Culver Max Entertainment) while hearing a petition filed by two lenders. The National Company Law Appellate Tribunal (NCLAT) directed Zee to file its response to IDBI Bank and Axis Finance's pleas and listed the case for hearing on January 8. IDBI and Axis had filed loan recovery petitions against Zee and its promoters, the Goenka family. According to IDBI, Siti Networks, a company promoted by the Goenkas, defaulted on a Rs 149-crore loan, for which Zee stood as a guarantor.
AU Small Finance Bank expects to close the year with Rs 1 lakh crore of deposits should the announced merger with Fincare Small Finance Bank go through. The Jaipur-based lender expects to achieve deposits of Rs 2 lakh crore by March 2027 - its 10th year of operations, founder, MD & CEO Sanjay Agarwal said. Agarwal told TOI that while the model continues to be lending to retail, the bank may apply for a universal bank licence as this recognition would help bring down the cost of funds.
The sensex capped a strong winning week with a 970-point rally on Friday to close above the 71,000-mark for the first time in history. It closed at 71,484 points as software exporters led the rally. The US central bank's announcement late Wednesday that it could start cutting interest rates in 2024 in the world's largest market led to a global rally which continued Friday. In the domestic market, foreign funds remained net buyers with a Rs 9,239-crore net inflow Friday that took the month's tally to about Rs 52,000cr.
The State Bank of India (SBI) has announced an increase in its marginal cost of funds-based lending rate (MCLR) and base rate. The new rates, which came into effect on December 15, 2023.
Oil prices rose as bullish forecast on oil demand for next year from the International Energy Agency (IEA) and a weaker dollar boosted prices. Brent futures reached USD 76.70 per barrel while US West Texas Intermediate (WTI) crude climbed to USD 71.68. The US Federal Reserve's mid-week announcement of likely borrowing cost cuts next year further lifted prices. The dollar fell to a four-month low after indications that interest rate hikes have likely ended. The European Central Bank reaffirmed record high borrowing costs despite lower inflation expectations.
US Federal Reserve chief Jerome Powell indicated that it could soon start cutting interest rates in 2024, leading to a rally in global stock markets. In India, the sensex and Nifty closed at new highs due to the Fed's dovish narrative and other factors such as the fall in US 10-year bond yield, positive GDP growth rate revision by RBI, and robust earnings growth expectations. The rally was driven by foreign funds, with Infosys, ICICI Bank, and HDFC Bank contributing the most to the gains. The market capitalization of BSE also increased significantly.
Capri Global, Varun Beverages, Grindwell Norton, ICICI Bank, and Adani Enterprises have been identified as consistent wealth creators during the period of 2018-2023, according to the Motilal Oswal Wealth Creation Study. Lloyds Metals emerged as the fastest wealth creator and Reliance Industries as the biggest wealth creator.
The Asian Development Bank has revised India's growth forecast for the current financial year to 6.7%, citing stronger-than-expected second-quarter performance. The RBI also revised its growth estimate last week, raising it to 7% from the earlier projection of 6.5% for FY24. This alignment in growth projections by two influential financial institutions underscores a positive outlook for India's economic trajectory. Looking ahead to the next financial year, FY25, the ADB maintains its growth forecast for India at 6.7%.
Gold prices reach one-week high after US Federal Reserve signals lower borrowing costs in 2024, causing dollar and Treasury yields to tumble; Spot gold up 0.2 per cent at USD 2,031.28 per ounce; US gold futures jump 2.4 per cent to USD 2,045.50; Fed's dovish pivot supports gold prices, weakens US dollar; Fed officials project lower policy rate by end of 2024; Dollar falls to two-week low, making gold cheaper for other currency holders; Markets price in 73 per cent chance of rate cut in March; Other central bank decisions awaited.
Odisha had the highest retail inflation rate in November at 7.7%, followed by Rajasthan at nearly 7% and Haryana at 6.8%. Delhi had the lowest inflation rate at 3.1%, followed by Chhattisgarh at 3.6% and Jammu & Kashmir at 3.8%. Karnataka and Punjab recorded 6.5% each. The overall inflation rate in November rose to 5.6%, led by a surge in vegetable and some food prices. The Reserve Bank of India expects the inflation rate to moderate in the coming months.
The State Bank of India (SBI) will sign a Euro 70 million Line of Credit with KfW (German Development Bank) for supporting solar photovoltaic projects in India. The signing ceremony will be held at IFSC Gift City Branch, Ahmedabad. This development assumes importance as countries have reached a deal at the COP 28 summit, calling for a reduction in greenhouse gas emissions and transitioning away from fossil fuels in the energy system.
India's employment outlook between October 2023 and March 2024 shows workforce expansion and increased hiring in various industries, according to an employment outlook report released by staffing conglomerate TeamLease. The report, based on data collected from 1820 companies across 14 cities, highlights the resurgence of consumer and retail companies in Q4 and cautious moves from banks and NBFCs due to increased regulatory pressure. The surge in workforce expansion is attributed to government policies and initiatives promoting entrepreneurship. High workforce expansion is projected in the healthcare, pharmaceuticals, and electric vehicles and infrastructure sectors.
To promote ease of doing business, capital markets regulator Sebi on Tuesday tweaked the framework requiring stock brokers or clearing members to upstream clients' funds to clearing corporations. This came after Sebi received representations from various stakeholders -- stock brokers, and brokers' associations citing certain operational difficulties in implementation of the framework. Stock brokers are required to maintain designated client bank account to receive funds from their clients. The clients can request SBs/CMs to release funds at any time during the day.
India's retail inflation rose to 5.55% in November from 4.87% in October due to higher food prices, according to government data. The figures are within the Reserve Bank of India's comfort zone. Inflation had been declining since August. The rate of price rise in the food basket was 8.7% in November. The RBI projected the CPI inflation at 5.4% for 2023-24. The inflation had peaked at 7.44% in July this year amid soaring prices of vegetables during the monsoon season. Since then, it has steadily declined.
The Reserve Bank of India (RBI) has released a warning statement concerning deceptive advertisements that lure borrowers with assurances of loan forgiveness. This advisory is in reaction to the ongoing promotion of such initiatives by various entities via print and social media. These unauthorized entities, without any legitimate authority, impose service or legal fees for the issuance of 'debt waiver certificates.' Bankers have reported instances where agents promise defaulting borrowers a 'settlement' with banks, aiming to reduce the borrower's debt liability.
Bank of America promoted 334 employees to managing directors, including 75 investment bankers and 64 trading division employees. The cohort is 8% smaller than the previous year, but over half are women and people of color. Goldman Sachs will promote 608 executives to managing directors next year, fewer than two years ago. Bank of America CEO Brian Moynihan expects the bank to outperform rivals in investment banking fees for Q4. The industry-wide investment banking fee pool is expected to decline by 10% to 15%.
The RBI announced an increase in the UPI transaction limit for hospitals and education services to Rs 5 lakh. The limit for recurring digital payments without second-factor authentication was enhanced to Rs 1 lakh for mutual fund subscription, insurance premium, and card bills. Consumers can opt-out anytime. The RBI also plans to create a repository for fintechs to store important information. The Reserve Bank Innovation Hub aims to make the repository operational by April 2024.
RBI governor Shaktikanta Das has said that the recent pre-emptive measures taken by the Reserve Bank in respect of Banks and NBFCs were geared towards addressing potential risks and preserving the resilience of the financial sector.
