07.02.2024 : Today’s Banking / Financial News at a Glance
? Four PSBs may get approval to raise funds in H1 of FY25 : India may allow at least four state-owned banks to raise funds or expand their public float in the first half of the next fiscal year to accelerate their lending business and improve public participation, said people familiar with the development. The four lenders include Punjab National Bank (PNB), which is targeting a follow-on public offer (FPO) by September, and Central Bank of India, which is seeking approval for an offer for sale (OFS) to expand public float, the people said. An official and one of the persons cited above told ET that the government had received a proposal from the Central Bank of India to launch an offer for sale. The government currently holds a 93.08% stake in the state-owned lender. – economic times.
? Finance Ministry aims to transfer stressed assets worth ₹1 lakh crore to NARCL by March 2024, says DFS Secretary Vivek Joshi : Finance Ministry is targeting stressed assets transfer of ₹1 lakh crore to the National Asset Reconstruction Company Ltd (NARCL), colloquially referred to as Bad Bank, from State-owned banks by the end of March 2024, Vivek Joshi, Secretary, Department of Financial Services has said. “ There has been lot of progress since then (FM’s Review Meeting). We are targeting ₹1 lakh crore assets transfer mark by March this year”, Joshi told businessline in an interview. When the bad bank started operations, the initial aim was to get as much as ₹2 lakh crore of stressed assets transferred from the public sector banks. – Business Line.
? India expects $1.8 billion in dividends from state-run banks in 2024/25: Finance Ministry official : Rising profits at India’s state-run banks could produce nearly $2 billion in dividends for the government in the next fiscal year starting in April, a solid jump from this year, a top finance ministry official said. Since taking charge in 2014, Prime Minister Narendra Modi has taken steps to strengthen state banks including merging weaker banks with stronger ones and a bankruptcy law to recover money from defaulters, while channeling more than Rs 3.3 trillion ($39.7 billion) to recapitalise stressed banks. The government expects to receive at least Rs 150 billion ($1.8 billion) in dividends from state banks in 2024/25, up 8.7% or more from an expected Rs 138 billion in the current fiscal year ending in March, Vivek Joshi, India’s financial services secretary, said late on Monday. – economic times.
? RBI grants nod to HDFC Bank entities to acquire up to 9.5% stake in Yes Bank, IndusInd Bank and four others : The RBI has granted HDFC Bank’s entities approval to acquire aggregate holding of up to 9.5 per cent in six banks including Axis Bank, Suryoday Small Finance Bank, ICICI Bank, Bandhan Bank, Yes Bank and IndusInd Bank, the private lender informed in a stock exchange filing on Tuesday. “The Reserve Bank of India (“RBI”) vide its letters dated February 05, 2024, has given its approval to HDFC Bank Limited ( which includes its group entities viz HDFC Mutual Fund, HDFC Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited and others) to acquire “aggregate holding” of up to 9.50 per cent of the share capital or voting rights The respective banks have separately issued stock exchange intimations. – economci times.
? HDFC Bank talking to Paytm; waiting and watching as events unfold: Executive : HDFC Bank is “talking” to its longstanding partner Paytm as the fintech tries to find a way out of the current restrictions placed by RBI, a senior executive at the largest private sector lender said on Tuesday. Stressing that the bank would have been conversing with the fintech even otherwise given its partnership in the acceptance and aggregator space, HDFC Bank’s country head for payments Parag Rao said it is in a “wait and watch” mode. Rao was replying to a question on reports about Paytm reaching out to large banks for support. “Paytm has been a partner over the years for our acceptance business, for our aggregator business. Under the current circumstances, we don’t know too much about what is happening but we are talking, we are waiting and watching to see how events develop. That is all I can say right now,” Rao said. – economic times
? Retail lending credit growth slowed down across all products in September quarter : Indias’ retail lending credit growth slowed down across all loan products, while the home loan segment remained stagnant in the quarter ended September 2023, said a report by TransUnion Cibil. Credit performance improved across most products except for credit cards and personal loans. The volume of low value home loans, with value less than Rs. 35 lakhs, are 76% of the originations have dropped by 4%, impacting the overall home loan growth. Overall, home loans have shown a 9% growth in value in Q2 of this fiscal. There has been a shift in home loan ticket sizes because of the rise in property prices this year. “Home loans of Rs. 75 lakhs and above in value, which form 7% of the overall origination volume, have shown a significant 23% growth in the September quarter, as compared to last year”, said Rajesh Kumar, MD and CEO of TransUnion Cibil. – economic times.
? RBI cancels licence of Jai Prakash Narayan Nagari Sahakari Bank : The RBI has cancelled the licence of Jai Prakash Narayan Nagari Sahakari Bank Basmathnagar, Maharashtra, as the lender, with its present financial position, would be unable to pay its present depositors in full. The Commissioner for Co-operation and Registrar of Cooperative Societies, Maharashtra, has been requested to issue an order for winding up the bank and appoint a liquidator, the RBI said in a statement on Tuesday. On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC). As per the data submitted by the bank, about 99.78 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC, the Reserve Bank said. – economic times
? UPI payments failing amid server outages; multiple banks affected : UPI users across the nation are facing difficulties because of problems with digital payments, reports said on February 6. This disruption, affecting various banking services and UPI-enabled applications such as Google Pay, PhonePe, and BHIM, has reportedly caused widespread inconvenience. Reports from users on platforms like X indicate a substantial outage in UPI functionality, persisting for several hours. Users have experienced an inability to complete transactions or transfer funds through popular UPI platforms, including Google Pay, PhonePe, BHIM, and even Paytm. – economic times.
? Vijay Shekhar Sharma meets FM Sitharaman amid Paytm Payments Bank crisis: Sources : Vijay Shekhar Sharma, the founder and chief executive officer of Paytm, on February 6 met Finance Minister Nirmala Sitharaman amid the ongoing crisis involving the company’s banking arm, reports said, citing sources. The stock of One97 Communications, the payment services firm’s parent arm, faced a steep decline ever since the Reserve Bank of India (RBI) imposed major business restrictions against the Paytm Payments Bank Ltd (PPBL). Earlier in the day, Reuters had reported that Sharma and a few Paytm officials had met the Reserve Bank of India (RBI) on February 5 to discuss regulatory concerns. – moneycontrol.
? Jana Small Finance Bank garners Rs 167 cr from anchor investors ahead of IPO : Jana Small Finance Bank mobilised Rs 166.95 crore from marquee institutional investors on February 6, a day prior to the public issue opening. “…..has finalised allocation of 40,32,588 equity shares to anchor investors at a price of Rs 414 per equity share,” the Bengaluru-based small finance bank said in its BSE filing. A total of 17 institutional investors participated in the anchor book as per the data published on exchanges, including East Bridge Capital Master Fund and SBI Life Insurance Company, which were the biggest investors among them, buying Rs 24.99 crore worth of shares each. Turnaround Opportunity Fund, HDFC Life Insurance Company, SBI General Insurance Company, and Kotak Iconic Fund were other big anchor investors, picking Rs 58 crore worth of shares in the small finance bank. – Moneycontrol.
? Insurance premiums: Parliamentary panel calls for lowering GST on insurance : A parliamentary committee headed by former minister of state for finance Jayant Sinha has recommended that there is a need to rationalise the Goods & Services Tax (GST) on insurance products, especially health and term insurance. It also suggested that the Reserve Bank of India, on behalf of the government, may issue ‘on-tap’ bonds to meet the capital requirements of the insurance industry, which are pegged at Rs 40–50,000 crore. The committee, in its recommendations, observed that the high rate of GST results in a high premium burden, which acts as a deterrent to getting insurance policies. The current GST rate is 18%. – economic times.
? Tata AIA Life Insurance appoints Venkatachalam H as new CEO & MD : Tata AIA Life Insurance Co Tuesday said its board has appointed Venkatachalam H as the new CEO & MD, subject to regulatory approval from the Insurance Regulatory and Development Authority of India (IRDAI). Venkatachalam will take over from Naveen Tahilyani, who moves to another role in the Tata group. Tahilyani has also been elevated as a non-executive director of Tata AIA Life Insurance. Venkatachalam, Venky as he is known, has over 27 years of experience spanning life insurance, asset management and custodial services. He has expertise in sales & distribution, strategy, business & process development and key account management. – economic times.
? ADB appoints Mio Oka as country director for India : Asian Development Bank (ADB) on Monday appointed Mio Oka as its country director for India. She will succeed Takeo Konishi who has been promoted as ADB Director General for South Asia at the Manila headquarters. Oka will take charge of steering ADB operations in India and fostering relations with the government and the country’s other development partners, ADB said in a statement. She will lead the implementation of ADB’s country partnership strategy, 2023-2027 that is designed to catalyse robust, climate-resilient, and inclusive private sector-led growth in India, it said. – economic times.
? Paytm denies speculations on Jio Financial’s acquisition of Paytm Wallet : In response to recent speculations surrounding the potential acquisition of Paytm Wallet by Jio Financial, Paytm has refuted these claims. The company, in an official release, stated that the news item suggesting such an acquisition is speculative, baseless, and factually incorrect. Paytm clarified that no negotiations have taken place in this regard. The clarification from Paytm extends to its associate company, Paytm Payments Bank Limited, as well. According to the release, the payments bank has also not engaged in any negotiations related to the speculated acquisition by Mukesh Ambani. – economic times.
? RBI fines Power Finance Corporation for non-compliance with liquidity risk management norms : The Reserve Bank of India has fined state-owned Power Finance Corporation Rs 8.80 lakh for failure to maintain the mandated quantum of Liquidity Coverage Ratio (LCR) in accordance with central bank norms on liquidity risk management for non-banking financial companies. “The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2022 and examination of the Risk Assessment Report, Inspection Report, supervisory letter and all related correspondence pertaining to the same revealed, inter alia, that the company had not maintained the prescribed Liquidity Coverage Ratio of 60% as on March 31, 2022,” the central bank said on Tuesday. – economic times.
? RBI conducts two one-day VRRR auctions to drain out liquidity : In a surprise move, the Reserve Bank of India (RBI) on Tuesday conducted two one-day variable rate reverse repo (VRRR) auctions to drain out liquidity from the banking system and re-anchor overnight money market rates at a higher level. Market players said this is probably the first instance of two VRRR auctions being conducted on the same day. In the first VRRR auction, the RBI received offers from banks to deploy funds for a day aggregating ₹27,538 crore, against the notified amount of ₹75,000 crore. The central bank absorbed these funds at a weighted average rate of 6.49 per cent. Later, the RBI came up with a second VRRR auction announcement to suck out ₹50,000 crore (notified amount). At this auction, banks offered to park ₹41,804 crore. The RBI accepted these offers at a weighted average rate of 6.49 per cent. – Business Line.
? SBI MF aims to garner ₹4,000 crore via energy opportunities NFO : SBI Mutual Fund targets to raise about ₹4,000 crore from the new fund offer of Energy Opportunities Fund which will open for subscription on Tuesday. The one-of-its-kind thematic fund will invest in energy sector in an optimal mix of domestic and/or overseas companies engaging in activities such exploration, production, distribution, transportation and processing of traditional and new energy including but not limited to sectors such as oil & gas, utilities and power. Shamsher Singh, Managing Director & Chief Executive Officer, SBI Funds Management said the energy sector is a multi-decade Atmanirbhar Bharat story as the country aims to move from being energy deficient to self-sufficient. – Business Line.
? Banks hesitant to house Paytm nodal accounts : With less than a month left to migrate nodal accounts of One97 Communications Ltd and Paytm Payments Services Ltd from Paytm Payments Bank, a fresh layer of difficulty seems to have hit One97 Communications, which houses the Paytm brand and its group entities. According to sources, several allegations of regulatory non-compliances have surfaced against Paytm and its group entities in the recent days causing banks to turn cautious about housing Paytm’s nodal accounts. Opening a fresh nodal account with a bank would require the customer to comply with KYC or know your customer norms. In case of Paytm which is a corporate entity, banks would also run tests on whether any anti-money laundering (AML) related issues have surfaced in the entity as part of KYC checks. – Business Line.
? Multibagger Central Bank of India breaks out from a Flag & Pole pattern; time to buy? : Central Bank of India, part of the public sector banking space, has more than doubled investors’ wealth in the last six months and is on track to hit fresh 52-week highs. Short-term traders can look to buy the stock now or on marginal dips as the momentum remains strong which could take the stock towards 80 in the next 3 months, suggest experts. The public sector banking stock has risen over 25% in a week, over 30% in a month, over 50% in the last 3 months and over 100% in the last 6 months, Trendlyne data showed. The momentum helped the PSU stock to break out from a Flag and Pole pattern on the monthly charts which has opened room for further upside, suggest experts. The neckline of the pattern was placed above 50. If the momentum continues, a close above 74 levels could propel the stock to a fresh 52-week high above 80, they say. – economic times.
? Sensex gains 455 pts, Nifty closes above 21,900 : Sensex, Nifty, Share Prices Highlights: The NSE Nifty 50 index added 0.72 per cent at 21,929.40, while the S&P BSE Sensex edged up 0.63 per cent to 72,186.09. The NSE Nifty 50 index climbed 0.67% to 21,917.25, while the S&P BSE Sensex rose 0.56% to 72,136.25 by 3 p.m. The IT index surged 2.75% to 38,183.85. Stocks advanced on BSE at 3 p.m. were 2,292 against 1,538 stocks that declined; 101 stocks remain unchanged. Total stocks traded were 3,931. The number of stocks that recorded a 52-week high was 452, and those that hit a 52-week low was 37. Technical analysis suggests caution in the Indian market due to a potential trend reversal and the formation of a ‘Double Top’ pattern, urging traders to stay vigilant. – Business Line.
? Rupee settles 2 paise lower at 83.05 against US dollar : The rupee declined 2 paise to close at 83.05 (provisional) against the US dollar on Tuesday, amid a firm American currency against major currencies overseas. However, positive sentiment in the domestic equity markets and lower global crude prices supported the domestic unit, forex analysts said. Investors were cautious as the Reserve Bank’s monetary policy committee (MPC), the six-member rate-setting panel, began the deliberation on Tuesday. The central bank will announce the key interest rate decision on Thursday. – Business Line.
.
?…
