1:10 PM
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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.
7:10 AM
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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.
6:10 AM
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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.
6:10 AM
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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.
6:10 AM
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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.
6:10 AM
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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.
6:10 AM
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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.
8:10 PM
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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.
12:10 PM
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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.
10:10 AM
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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.
4:10 AM
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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.
12:10 PM
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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.
5:10 AM
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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.
4:10 AM
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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.
5:10 PM
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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.
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