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Reserve Bank of India governor Shaktikanta Das’s decision to put an end to the consumer credit party took its toll on share prices of retail lenders as markets evaluated the capital required by these institutions. Financials experienced significant losses, contributing to the downturn in major indices. Ratings agency S&P and an SBI report have said that the capital requirement for banks would go up by 60 basis points (100 basis points equals 1 percentage point).from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/p42BoIw
Shares of bank and non-banking financial companies (NBFCs) dropped by up to 7% in morning trade due to heavy selling pressure after the Reserve Bank of India (RBI) tightened norms for consumer credit. The RBI has increased the risk weight for unsecured personal loans, requiring banks and NBFCs to set aside more funds as a safety net for such advances. The new regulations do not apply to housing loans, education loans, vehicle loans, and loans secured by gold and gold jewellery.
Shares of Indian lenders, including SBI Cards & Payment Services and Bajaj Finance, dropped by at least 3% each after the Reserve Bank of India (RBI) announced measures to increase buffers on consumer loans. The NSE Nifty Bank Index fell by 1.3%, with SBI Cards declining by 6.8%. The RBI's move aims to control the surge in unsecured debt, and banks may raise rates and tighten lending norms as a result. RBI governor Shaktikanta Das has been urging banks to enhance internal controls.
Following up on its earlier caution, RBI decided to act on the looming threat of unbridled growth in unsecured and personal loans metastasising into a bigger problem. Ever since RBI governor Shaktikanta Das publicly flagged high growth in personal loans and credit card outstanding, banks have been seeking to play down the concerns, arguing that their unsecured book forms a very small portion of loan portfolio, and it was the NBFCs and fintech players that were undertaking that business.
According to a Reserve Bank Bulletin, retail inflation in India has decreased due to monetary policy action and supply side interventions. However, the article warns that the global economy is showing signs of slowing down, with manufacturing languishing and services sector activity reaching its post-pandemic expansion limit. The article also mentions that India's GDP is expected to increase in the third quarter of 2023-24, driven by festival demand and resilient investment demand.
Japanese brewer Asahi Group Holdings has announced that shareholders plan to sell $1.3 billion worth of stock to overseas investors, as part of the ongoing trend of unwinding cross-shareholdings among Japanese firms. Eight Japanese banks, including Nomura Holdings and Sumitomo Mitsui Financial Group, will sell a total of 33.5 million shares in Asahi through a secondary offering in overseas markets. The move is aimed at increasing liquidity in Asahi's shares and revitalizing capital markets.
Kolkata-based UCO Bank has temporarily suspended online Immediate Payment System (IMPS) transfers after experiencing issues where funds from transactions initiated by customers from other banks were credited to UCO Bank's account holders without the bank actually receiving the money. The incidents occurred between November 10 and November 13. The bank has made the IMPS channel offline and is working to resolve the issue, with law enforcement agencies involved. There is no confirmation on when services will be restored. The financial impact is yet to be determined.
The Reserve Bank of India (RBI) has ordered Bajaj Finance to stop issuing loans through its 'eCOM' and 'Insta EMI Card' due to non-compliance with the digital lending guidelines. This action comes as a result of concerns over the disclosure of fees, charges, and recovery practices. Bajaj Finance has stated that it is already issuing key fact statements (KFS) for loans under these products and will review and make necessary corrections. This is the latest instance of the RBI taking action against lenders for non-compliance.
Nine stocks, including private lender IndusInd Bank Ltd. and wind-turbine maker Suzlon Energy Ltd., will be added to MSCI’s global standard gauge on Nov. 30, according to the latest re-balancing announced by the index manager.
The Asian Development Bank (ADB) has approved a $100 million loan to enhance urban services and tourism facilities in Tripura. The project will focus on improving water supply systems, stormwater drains, and urban roads. Additionally, tourist destinations such as temples and palaces will be upgraded to make them more visitor-friendly. The project will also include the development of a tourism business plan and the updating of the state's tourism policy. The ADB aims to support Tripura as a gateway to the northeast region and promote urban governance and financial sustainability.
Wholesale price inflation in India remained in negative territory for the seventh consecutive month in October. The wholesale price index (WPI) fell 0.5% in October, with the negative inflation primarily due to falling prices of chemicals, electricity, textiles, and food products. Vegetable prices fell by 21% during the month, while onion prices continued to rise. Experts expect the Reserve Bank of India to start cutting interest rates by August next year, depending on the inflation trajectory.
With so many credit card options available, it's important to choose the right one that suits your needs. Consider your spending patterns and preferences when selecting a card. Understand how the rewards system works and explore the reward catalogue to ensure it aligns with your interests. Keep an eye on special offers and promotions from your bank to take advantage of additional benefits. Finally, explore the various payment options offered by your credit card, such as EMI and financing programs.
The Securities and Exchange Board of India (Sebi) has given approval to four companies to raise funds through initial public offerings (IPOs). Fedbank Financial Services, Indian Renewable Energy Development Agency, EPACK Durable, and Suraj Estate Developers received observation letters from Sebi. The IPO of Fedbank Financial Services consists of a fresh issue of equity shares and an offer for sale by the promoter and existing shareholder. The equity shares of these companies will be listed on the BSE and NSE.
The Indian government has signed a $400 million loan agreement with the Asian Development Bank (ADB) to support its urban reform agenda. The loan will be used to create high-quality urban infrastructure, improve service delivery, and promote efficient governance systems. The program aims to make cities livable and centers of economic growth through inclusive and sustainable infrastructure. It will support the implementation of Atal Mission for Rejuvenation and Urban Transformation (Amrut) 2.0.
The cyber hack of Industrial and Commercial Bank of China's US broker-dealer caused extensive damage, including a blackout of corporate email and temporary inability to pay BNY Mellon $9 billion, a sum much larger than its net capital. ICBC received a cash injection from its Chinese parent and manually processed trades with BNY Mellon's assistance. ICBC expects to resume normal business by Monday after setting up secure systems with cybersecurity firm MoxFive.
