Month: February 2021

How To Save Income Tax in FY 2021-22

Personal Finance

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Investment

oi-Sunil Fernandes

By Mr. Ravi Singhal, Vice-chairman, Gcl Securities Limited

|

All of us want to save money as much as we can, provided it is legally correct. How to save Income Tax is probably one of the most searched phrases when it comes to saving money for taxpayers. All of us should always pay our income tax as it goes in nation-building and strengthening the economy. But, intelligent, planned and strategic investments can help us save some money to pave the way for a financially secure future. Here are some of the top options every taxpayer must explore in order to save some income tax:-

Avail maximum benefit of 80C:

If you are planning to save income tax, then you must avail the maximum benefit under 80C (Rs 1.5 lakhs per annum, as of now). One can freely choose saving instruments of their choice, like people not willing to take financial risk may go for 5-year Tax saver FD, Life insurance policies or other investment products offering fixed returns. Those who don’t shy from taking risks can invest in Mutual funds under ELSS categories. There is no difference in the performance of ELSS and a normal mutual fund, except for the fact that there is a lock-in period of 3 years in ELSS category funds.

Never ever ignore 80CCD:

One should also consider utilising maximum limit under 80CCD (Rs 50k as of now) to save Rs 15k by investing in NPS (National pension System) scheme or APY (Atal Pension Yojna). There is a myth that NPS gives very low returns as compared to other available products, which is absolutely wrong. You can compare the performance of all funds under this category and can choose the fund of your choice. 50% of your funds are deployed in these market-linked products and 50% in debt instruments like government bonds. This ratio is changed by fund manager every year and 100% of your funds parked in debt market till retirement. As assessee already saving 15,000 in tax so whatever you are earning is actually earning on 35,000, so your actual returns are much higher if you save under this category. However, the products under 80CCD are pension funds only, so there are some restrictions on withdrawal of funds, you must consider it before investing.

Triple benefit of home loan:

Owning a home offers the triple benefit of house rent saving, property appreciation in the long term and tax benefits. If you are staying on rental property, then your rental expense is going to increase every year, whereas your EMIs is almost fixed (if interest rates do not change) Finance minister Nirmala Sitaraman in her Budget 2021 has extended timeline for availing additional tax benefit of Rs 1.5 lakhs under section 80EEA. Under ‘Housing for All’, the government is giving tax deduction benefits of up to Rs 3.5 lakhs (Rs 2 lakhs under section 24), which cannot be ignored.

How To Save Income Tax in FY 2021-22

Moreover, you can save tax under multiple sections as per following schedule if you buy residential property:-

Section Maximum Tax Benefits Tax saving component Conditions
Section 24 Rs 2,00,000 Home Loan Interest Assessee or any family member should be living in that house, full interest can be claimed if house is on rent.
80EEA Rs 1,50,000 Home Loan Interest

“-Stamp duty value of property should be up to Rs 45 lakhsLoan Section date between 01st Apr 2021 to 31st Mar 2022

– Assessee own no residential property till section of loan.

– Not claiming any amount under income tax section 80EE.

– Loan from Financial Institution only.
80C Rs 1,50,000 Home Loan Principal

– Property should not be sold within 5 years of possession.

So If you claim all tax in all above components, you will be able to claim a maximum income tax deduction of Rs. 5 Lakhs

Moreover, let’s take a look at summary of other options to save income tax:-

Section Description Annual Deduction Limits (In Rs)
80C Following are the instruments comes under it 150000
80CCD Investment in National Pension System (NPS), Atal Pension Yojana (APY). 50000
80D” Premium paid for medical insurance for self, spouse and children. 25,000(50k if age is above 60)
Premium paid for medical insurance for parents. 25,000(50k if age is above 60)
80E Interest paid on education loan for self, spouse or children. Interest paid for a period of 8 years only. No Limits
80EE Interest for the first time home owner. Home value should be <=50Lac and Loan value <=35 Lac. 50000
80G Donations to various govt. approved charities, social and govt. organizations. (50% amount can be claimed for some organization) Max 10% of gross annual income.
80GG House rent paid, where individual not getting HRA and not owning any property. Rent paid minus 10% of total income, 25% of total income or 5000 /month whichever is lesser.



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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015





Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.





With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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NBFCs in India need to plan for effective IBOR transition: EY India

Banking & Finance

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Non-Banking Finance Companies (NBFCs) in India need to plan for an effective Inter Bank Offered Rate (IBOR) transition, as majority of LIBOR rates are likely to be phased out by the end of 2021, a new EY India report has suggested.

London Inter Bank Offered Rate (LIBOR) is one of the most common series of benchmark rates referenced by contracts measured in trillions of dollars across global currencies.

About $350 trillion worth of contracts across the globe are pegged to LIBOR, which is the key interest rate benchmark for several major currencies.

Some of the leading banks in India have also embarked on the journey to assess the impact of LIBOR cessation on their balance sheets and operations, according to EY India report, ‘Impact of IBOR transition on NBFCs in India’.

Key challenges

The report underpins the key challenges that will need to be addressed by NBFCs, banks and other institutions with respect to contract amendments, financial reporting, tax and other risks due to cessation of LIBOR rates after 2021.

NBFCs cannot remain detached from this transition as it is equally important for them to inventorise their LIBOR-linked borrowings and derivative exposures and develop a proactive roadmap to assess the impact on their financial statements, bottom line and their ability to raise overseas borrowings at a competitive rate.

Sandip Khetan, Partner and National Leader, Financial Accounting Advisory Services (FAAS), EY India, said in a statement: “This is an opportune time for NBFCs to develop LIBOR transition plans and proactively communicate with regulators, investors, lenders, customers and other counterparties. This will invariably enable NBFCs to proactively engage with their corporate clients who will also be impacted by LIBOR migration on account of their sizeable overseas borrowings and derivative exposures.”

NBFCs with exposures to interest rate derivatives and foreign currency borrowings linked to LIBOR need to be mindful of transition to Alternative Reference Rates (ARR), also known as Risk free rates (RFR). There is an estimated overseas foreign currency borrowings of $13 billion and notional derivative exposure covering forward rate agreements, interest rate swaps and cross currency swaps to the tune of $18 billion across the top 10 NBFCs.

It is imperative for NBFCs to understand what it means to link their forex borrowings and derivative transactions to Secured Overnight financing rate (SOFR), Sterling Overnight Interbank Average Rate (SONIA), or other comparable RFR benchmark interest rates.

MIFOR

Incidentally, the Mumbai Interbank Forward Offer Rate (MIFOR), widely used by banks in India for setting prices on forward rate agreement and derivatives, has USD LIBOR as its core component. This may now be linked with SOFR, the ARR used for US dollar denominated derivatives and loans.

NBFCs may need to examine their legacy contracts linked to LIBOR and understand hedging and other implications on new contracts that may be linked with SOFR or any other comparable benchmark rates.

An early impact assessment will help NBFCs understand the problem statement and respond ahead of time, if it means repapering the contracts or aligning its wider treasury and hedging objectives on foreign currency loans hedged with derivatives, according to the EY India report.

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Post Office FD vs Bank FDs: A Comparison For Your Personal Finance Space

Personal Finance

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Investment

oi-Vipul Das

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Leading banks of India namely State Bank of India (SBI), HDFC Bank, ICICI Bank, IDFC First Bank and small finance banks such as Jana Small Finance Bank, Utkarsh Small Finance Bank and Suryoday Small Finance Bank are currently providing higher interest rates on fixed deposits. Bank like fixed deposits called Post Office Time Deposit is also an alternative for long term investors who want to reap guaranteed returns against their deposits. The interest rates on these deposits are kept unchanged for the quarter of March 31, 2021. But when it comes to fixed deposit investment for both the general public and senior citizens which can be a good bet here. Let’s find out.

Post Office FD vs Bank FDs: A Comparison For Your Personal Finance Space

SBI FD Rates

SBI FD tenures range from 7 days to 10 years. For the general public SBI FD interest rates range from 2.9 percent and 5.4 percent w.e.f. January 8 2021.

IDFC First Bank FD Rates

The new FD interest rates of IDFC First Bank are valid as of September 15, 2020. IDFC First Bank provides short-term FDs of between seven days and one year and long-term FDs of between one and ten years. IDFC First Bank has a spread of 2.75% p.a. 5.75 percent p.a. For deposits with a period of between 7 days and 10 years. For the same tenure senior citizens will be provided an additional rate of 0.50 percent over and above the standard rates.

HDFC FD Rates

The current HDFC FD Rates are in effect from 13 Nov 2020. For the general public the deposit rates are capped between 2.5% to 5.5% for a tenure of 7 days to 10 years.

ICICI Bank FD Rates

ICICI Bank FD Rates for the general public and senior citizens are capped at 2.5% to 5.5% and 3% to 6.30%. The current rates with effect from Oct 21, 2020 are as follows:

5 Best Corporate FDs

Company fixed deposits, also at a slightly higher risk, are popular, but this may be a concern for investors who wish to achieve higher returns than bank fixed deposits. However, just like FDs, interest on corporate FDs is fully taxable according to the tax slab rate of the investor. Typically, we still say that it is possible to accept AA or AAA-rated FDs, which means that the standard of security in terms of maturity is strong.

Small Finance Bank FDs

Fixed deposits are a major stream of investments to get guaranteed returns. In general, interest rates on FDs vary depending on the capital deposited, maturity of the deposit, type of depositor and etc. As compared to commercial banks, small finance banks usually offer higher interest rates on fixed deposits. At present, some banks have interest rates on FDs ranging from 2.5 to 7.5 percent.

Jana Small Finance Bank FD

Jana Small Finance Bank supports an interest rate of between 2.5 percent and 7.50 percent on FDs ranging from 7 days to 10 years. An additional interest of 0.50 per cent is provided by the bank to senior citizens. This bank is now offering senior citizens an interest rate of 4 percent to 8 percent, respectively. The best interest rate on deposits maturing in two to three years is provided by Jana Small Finance Bank. The bank gives the general public and senior citizens an interest rate of 7.25 percent and 7.75 percent, respectively, for these deposits. The bank’s FD interest rates given below are valid as of Dec 22, 2020 and are valid for a deposit sum of Rs 2 Cr.

Utkarsh Small Finance Bank FD Rates

Utkarsh Small Finance Bank provides interest rates ranging from 3 percent to 7 percent to the general public and 3.50 percent to 7.50 percent to senior citizens on FDs maturing in 7 days to 10 years. The bank pays the best interest rate on deposits with a maturity period of 700 days. The bank pays a 7.0 per cent interest rate on these deposits. Senior citizens get an additional 50 basis points for these deposits. The interest rates listed below on Utkarsh Small Finance Bank’s FDs are effective from Oct-19.

Suryoday Small Finance Bank FD Rates

Suryoday Bank FD rate ranges from 4 per cent to 7.50 per cent for the general public. The bank pays the highest interest rate, i.e. 7.5 percent, on deposits maturing in 5 years. Suryoday Bank’s existing FD interest rates are valid as of September-19.

Post Office Time Deposit

Just like a standard fixed deposit scheme of a bank post office time deposits come with a tenure of 5 years. Across the tenure of the post office term deposit depositors earn guaranteed returns. For a one-year deposit to three years, the post office term deposit pays an interest rate of 5.5 percent. For a five-year time deposit account, the Post Office pays an interest rate of 6.7 per cent.

Our take

Fixed Deposits (FDs) are part of your personal finance space, and thus it is very important to consider guaranteed returns and deposit tenure first instead of higher interest rates. So it’s a smart strategy to invest in the post office time deposit scheme instead of the bank fixed deposit when it comes to deciding between bank deposits and post office deposit because the post office small savings schemes are 100% backed by the government. Whereas insurance cover for bank deposits is offered by DICGC, a subsidiary of the Reserve Bank of India. For both the principal and interest amount, each depositor in a bank is insured to a limit of Rs 5 lakh. From the above contrast, it is obvious that with Post Office FDs, you will have a high degree of safety if you wish to invest an amount of Rs 5 lakhs or above.



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Shriram Capital appoints K P Krishnan as Chairman of the board

Banking & Finance

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Shriram Capital Ltd (SCL), the holding company for the financial services and insurance entities of the Shriram Group, has announced the appointment of K P Krishnan as Chairman on the board of the company.

Krishnan, who had a long career in the IAS, has assumed his role as the Chairman of Shriram Capital effective February 19, 2021. He is currently the IEPF Chair Professor of Economics at the National Council of Applied Economic Research (NCAER) New Delhi.

Krishnan, who comes with a distinguished record and diverse experience of a little under four decades with the government, is also the Chairperson of various committees of the Ministry of Corporate Affairs and IFSCA of the Ministry of Finance.

Commenting on Krishnan’s appointment on the board, R. Thyagarajan, Founder, Shriram Group, said in a statement: ‘It gives me immense pleasure to welcome Dr. Krishnan on Shriram Capital’s board. We are very confident that his leadership will have a significant impact on the growth and direction of our businesses.”

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Implementation of Section 51A of UAPA, 1967: Updates to UNSC’s 1267/ 1989 ISIL (Da'esh) & Al-Qaida Sanctions List – Deletion of two entries

Notifications

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RBI/2020-21/101
DOR.AML.BC.No.42/14.06.001/2020-21  

February 22, 2021

The Chairpersons/ CEOs of all the Regulated Entities

Madam/Dear Sir,

Implementation of Section 51A of UAPA, 1967: Updates to UNSC’s 1267/ 1989 ISIL (Da’esh) & Al-Qaida Sanctions List – Deletion of two entries

Please refer to Section 51 of our Master Direction on Know Your Customer dated February 25, 2016 as amended on December 18, 2020, in terms of which “Regulated Entities (REs) shall ensure that in terms of Section 51A of the Unlawful Activities (Prevention) (UAPA) Act, 1967, they do not have any account in the name of individuals/entities appearing in the lists of individuals and entities, suspected of having terrorist links, which are approved by and periodically circulated by the United Nations Security Council (UNSC).”

2. In this regard, Ministry of External Affairs (MEA) has now forwarded the following Press Release issued by the United Nations Security Council (UNSC) Committee established pursuant to Resolutions 1267 (1999), 1989 (2011) and 2253 (2015) concerning ISIL (Da’esh), Al-Qaida, and associated individuals, groups, undertakings and entities regarding changes in the List of individuals and entities subject to the assets freeze, travel ban and arms embargo set out in paragraph 1 of UNSC resolution 2368 (2017), and adopted under Chapter VII of the Charter of the United Nations.

Note SC/14440 dated 19 February 2021 deleting two entries to list of individuals in UNSC’s 1267/ 1989 ISIL (Da’esh) & Al-Qaida Sanctions List viz. [QDi.138 Name: 1: SAID 2: BEN ABDELHAKIM 3: BEN OMAR 4: AL-CHERIF ] and [QDi.362 Name: 1: EMRAH 2: ERDOGAN 3: na 4: na]

The UNSC press release concerning amendments to the list is available at URL: https://www.un.org/securitycouncil/sanctions/1267/press-releases

3. Updated lists of individuals and entities linked to ISIL (Da’esh), Al-Qaida and Taliban are available at:

www.un.org/securitycouncil/sanctions/1267/aq_sanctions_list

https://www.un.org/securitycouncil/sanctions/1988/materials

4. The details of the sanctions measures and exemptions are available at the following URL: https://www.un.org/securitycouncil/sanctions/1267#further_information

5. As per the instructions from the Ministry of Home Affairs (MHA), any request for delisting received by any Regulated Entity (RE) is to be forwarded electronically to Joint Secretary (CTCR), MHA for consideration. Individuals, groups, undertakings or entities seeking to be removed from the Security Council’s ISIL (Da’esh) and Al-Qaida Sanctions List can submit their request for delisting to an independent and impartial Ombudsperson who has been appointed by the United Nations Secretary-General. More details are available at the following URL:

https://www.un.org/securitycouncil/ombudsperson/application

6. In view of the above, REs are advised to take note of the aforementioned UNSC communication and ensure meticulous compliance.

Yours faithfully,

(Vivek Srivastava)
General Manager

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 0.00 – –
     I. Call Money 0.00 – –
     II. Triparty Repo 0.00 – –
     III. Market Repo 0.00 – –
     IV. Repo in Corporate Bond 0.00 – –
B. Term Segment      
     I. Notice Money** 0.00 – –
     II. Term Money@@ 0.00 – –
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sun, 21/02/2021 1 Mon, 22/02/2021 1,193.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Sun, 21/02/2021 1 Mon, 22/02/2021 122.00 4.25
4. Long-Term Repo Operations –   –   –
5. Targeted Long Term Repo Operations – – – – –
6. Targeted Long Term Repo Operations 2.0 – – – – –
7. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -1,071.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sat, 20/02/2021 2 Mon, 22/02/2021 45,071.00 3.35
  Fri, 19/02/2021 3 Mon, 22/02/2021 8,899.00 3.35
  Thu, 18/02/2021 4 Mon, 22/02/2021 4,60,669.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 12/02/2021 14 Fri, 26/02/2021 2,00,017.00 3.52
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sat, 20/02/2021 2 Mon, 22/02/2021 1,775.00 4.25
  Fri, 19/02/2021 3 Mon, 22/02/2021 5,892.00 4.25
  Thu, 18/02/2021 4 Mon, 22/02/2021 21.00 4.25
4. Long-Term Repo Operations# Mon, 24/02/2020 365 Tue, 23/02/2021 15.00 5.15
  Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
D. Standing Liquidity Facility (SLF) Availed from RBI$       32,622.06  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -5,97,248.94  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -5,98,319.94  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 21/02/2021 4,38,516.37  
     (ii) Average daily cash reserve requirement for the fortnight ending 26/02/2021 4,49,962.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 18/02/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 29/01/2021 8,48,955.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
Ajit Prasad
Director   
Press Release : 2020-2021/1133

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 10,628.50 3.81 2.40-4.30
     I. Call Money 3,302.55 3.54 2.40-3.75
     II. Triparty Repo 7,325.95 3.93 3.40-4.30
     III. Market Repo 0.00   –
     IV. Repo in Corporate Bond 0.00   –
B. Term Segment      
     I. Notice Money** 21.00 2.67 2.60-2.70
     II. Term Money@@ 10.00 – 3.28-3.28
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sat, 20/02/2021 2 Mon, 22/02/2021 45,071.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Sat, 20/02/2021 2 Mon, 22/02/2021 1,775.00 4.25
4. Long-Term Repo Operations –   –   –
5. Targeted Long Term Repo Operations – – – – –
6. Targeted Long Term Repo Operations 2.0 – – – – –
7. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -43,296.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Fri, 19/02/2021 3 Mon, 22/02/2021 8,899.00 3.35
  Thu, 18/02/2021 4 Mon, 22/02/2021 4,60,669.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 12/02/2021 14 Fri, 26/02/2021 2,00,017.00 3.52
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Fri, 19/02/2021 3 Mon, 22/02/2021 5,892.00 4.25
  Thu, 18/02/2021 4 Mon, 22/02/2021 21.00 4.25
4. Long-Term Repo Operations# Mon, 24/02/2020 365 Tue, 23/02/2021 15.00 5.15
  Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
D. Standing Liquidity Facility (SLF) Availed from RBI$       32,622.06  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -5,53,952.94  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -5,97,248.94  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 20/02/2021 4,39,574.24  
  19/02/2021 4,99,898.15  
     (ii) Average daily cash reserve requirement for the fortnight ending 26/02/2021 4,49,962.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 18/02/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 29/01/2021 8,48,955.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
Ajit Prasad
Director   
Press Release : 2020-2021/1132

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Muthoot Homefin aims to disburse ₹700 crore of home loans in FY22

Banking & Finance

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Muthoot Homefin (India) Ltd, a wholly owned subsidiary of Muthoot Finance, is aiming to disburse ₹700 crore of home loans in FY2021-22.

“We are steadfastly progressing on taking the ‘Housing for All’ initiative of the government to the farthest Tier II and III locations in the country in order to support the affordable housing needs and aspirations of every Indian. As of now, we will be focussing on expanding our housing finance operations in the Southern States of the country. With the additional focus towards collections in FY2020-21, the company has been able to contain delinquencies on the portfolio during the pandemic and have now stabilised its collections,” said George Alexander Muthoot, Managing Director.

“With the recent credit rating upgrade of Muthoot Homefin to AA+ (stable) by CRISIL, we will be able to raise funds even more competitively and pass on the benefits to end-customers so that each Indian can own their dream home,” he added.

MHIL started its operations in 2016 as an Affordable Housing Finance Company catering to the needs of aspiring Indian home-owners. It is registered as a Housing Finance Company (HFC) with the National Housing Bank (NHB).

It has disbursed over ₹2,600 crore home loans since its inception. Currently, it has an AUM (assets under management) of ₹1,800 crore with operations in 16 States and Union Territories, serving more than 22,000 customers.

MHIL has transferred over ₹300 crore of loan subsidy under Pradhan Mantri Awas Yojana’s Credit Linked Subsidy Scheme from NHB. Muthoot Homefin has also received ₹225 crore of refinance from NHB, he added.

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Ind-Ra revises banking sector outlook for FY22 to Stable

Banking & Finance

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India Ratings and Research (Ind-Ra) has revised its outlook on the overall banking sector to stable for FY22 from negative.

The credit rating agency estimated that overall stressed assets (gross non-performing assets/GNPA + restructured) could increase 30 per cent for the banking system, with the increase being almost 1.7 times in the retail segment in the second half (October 2020 till March-end 2021) FY21.

Also read: States’ fiscal deficit to moderate to 4.3% of GDP in FY22: India Ratings & Research

The agency estimates gross non-performing assets (GNPAs) at 8.8 per cent in FY21 (FY22: 10.1 per cent) and stressed assets at 10.9 per cent (11.7 per cent).

Along with revision in outlook, Ind-Ra has upgraded its FY21 credit growth estimates to 6.9 per cent from 1.8 per cent and 8.9 per cent in FY22, with the improvement in the economic environment in 2H FY21 and the government of India’s (GoI) focus on higher spending, especially on infrastructure.

Referring to the revision in outlook, Ind-Ra observed that the substantial systemic measures have brought the system-wide Covid-19-linked stress to below expected levels.

Further, banks have also strengthened their financials by raising capital and building provision buffers.

According to its assessment, provisioning cost has fallen from the earlier estimate of 2.3 per cent for FY21 to 2.1 per cent (including Covid-19-linked provisions); it is estimated at 1.5 per cent for FY22.

Outlook for PSBs

Ind-Ra

revised the outlook on public sector banks (PSBs) to Stable for FY22 from Negative.

The agency reasoned that regulatory changes led to an improvement in the ability of PSBs to raise Additional Tier (AT) I capital, a high provision cover on legacy NPAs, overall systemic support resulting in lower-than-expected Covid-19 stress, and minimal surprises arising out of amalgamation of PSBs.

Also, the fact that the GoI has earmarked ₹34,500 crore for infusion in PSBs in 4Q (January-March) FY21d should suffice for their near-term growth needs.

Outlook for private banks

Ind-Ra

said the outlook remains Stable for private banks, which continue to gain market share, both in assets and liabilities, while competing intensely with PSBs.

“Most have strengthened their capital buffers and proactively managed their portfolios. As growth revives, large private banks would benefit from credit migration due to their superior product and service proposition,” the agency said in a note.

Stressed assets

According to Ind-Ra’s estimates, stressed assets will rise 30 per cent in 2HFY21 and 8 per cent in FY22.

The agency estimates that about 1.24 per cent of the total bank book is under incremental proforma NPA and about 1.75 per cent of the total book could be restructured by end-FY21.

“As a conservative measure, the agency has not adjusted for overlaps between those categories. This is the incremental stress purely on account of the Covid-19 pandemic and does not include the slippages that banks would witness in the normal course of business,” said the note.

Also read: Lenders remain risk averse to additional lending or alter lending terms: Ind-Ra

Ind-Ra estimated the stock of stressed retail assets for PSBs could increase to 2.9 per cent in FY22 from 2.1 per cent in FY21, while it could increase from 1.2 per cent to 4.3 per cent for private banks.

Provisions

Excluding Covid-19-linked stress, Ind-Ra expects the provision coverage ratio (excluding technical write-offs) for both PSBs and private banks to reach 75 per cent-80 per cent by end-FY21.

“If we consider the provision on proforma gross NPAs (still not considering Covid-19 provisions), the resultant provision cover could be about 70 per cent at end-FY21 and FY22, while the historic slippage rate will continue and banks would still have Covid-19 provisions as buffers.

“PSBs have 0.2 per cent-0.5 per cent provisions while private banks have 1 per cent-2 per cent Covid-19 provisions, most of which is unutilised,” the agency said.

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