Month: March 2021

SBI to contribute ₹11 cr to PM Cares Fund to help fight Covid-19

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State Bank of India (SBI) has decided to contribute ₹11 crore to the PM CARES Fund to support the Government’s Covid-19 vaccination drive.

Dinesh Khara, Chairman, SBI, in a statement, said, “The fight against the pandemic is not yet over, and as a responsible Corporate Citizen, we consider it our duty to support the government’s efforts to vaccinate all.”

Early last year, SBI committed 0.25 per cent of its annual profit to support the fight against Covid-19. Additionally, SBI employees had contributed ₹107 crore to the Fund, said the statement.

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SoftBank’s internet business to invest $4.7 bn in tech over five years

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SoftBank’s internet arm Z Holdings is targeting sales of 2 trillion yen and operating income of 225 billion yen by 2023

SoftBank’s internet subsidiary Z Holdings on Monday outlined plans to invest 500 billion yen ($4.7 billion) in technology over five years with a focus on artificial intelligence.

The announcement follows the completion of the merger of its internet business Yahoo Japan with chat app operator Line creating a $30-billion internet heavyweight.

Also read: SoftBank-backed robotics firm Berkshire Grey to go public via $2.7 billion SPAC deal

Z Holdings is targeting sales of 2 trillion yen and operating income of 225 billion yen by 2023, the firm said in a statement.

Published on


March 01, 2021

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IEX: A Good Investment Idea That Can Fetch Decent Returns

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Investment

oi-Sunil Fernandes

|

Motilal Oswal Retail Research in its latest report has come-up with an investment idea in the stock of Indian Energy Exchange (IEX). This is an electricity exchange that offers a transparent and efficient platform for the Short-Term trading of power.

Huge growth potential:

The report has noted that India’s Electricity market is dominated by long-term power purchases (LT PPAs), which account for 90% of electricity generated.

“The need for a Short-Term (ST) market (10% share) is currently driven by supply disruption, load variations and price arbitrage opportunities. However, as LT PPAs slowly get utilized and market reforms pan out, the power market could evolve and shift toward ST. Thus, the long term potential for IEX remains huge, with just 4-5% market share for exchanges in India’s power generation (v/s 40% for the two largest exchanges in Europe),” the report has stated.

New product launches to aid market share gains:

“We expect market share gains for IEX to continue with: 1) its entry into the Real Time Market (RTM), facilitated by higher renewable penetration and peak power management, 2) the launch of Longer Duration Contracts (LDCs), and 3) continued opportunities for Open Access (OA) consumers, supported by an oversupplied market. Expect IEX’s share within ST to increase to 53% in FY23 from 39% in FY20,” Motilal Oswal Retail Research has stated.

Low operating cost structure aids profitability and cash generation:

It also believes that a 16% CAGR in volumes over FY21-23 would drive a 16% CAGR in revenues.

“The cost structure is lean, with an EBITDA margin of 80%. Given the company’s lean operating structure, we expect the EBITDA margin to increase 140bps, led by a sharp uptick in volumes, resulting in a 17% CAGR in EBITDA and 16% CAGR in PAT over FY21-23. Furthermore, with an insignificant capex requirement and negative working capital, FCF generation would remain high and broadly mimic growth in profitability.

IEX: A Good Investment Idea That Can Fetch Decent Returns

Growth in the gas exchange platform could provide upside: IEX is trying to rope in multiple players as strategic partners in its wholly owned subsidiary – Indian Gas Exchange (IGX) which is India’s first gas exchange. It has already attracted investment from Adani Total Gas, Torrent Gas and Gail and is in talks with NSE. India is targeting rapid growth in natural gas’ share in the overall energy basket from 6% now to 15% by 2030. This creates a need for a transparent and market-driven pricing mechanism and IGX is a step towards achieving that goal,” the report has stated.

Valuation & view:

The launch of newer products such as RTM and Green Term-Ahead Market (G-TAM) has provided a fillip. In particular, RTM exceeded >1BU for Dec and contributed ~14% to IEX’s electricity volumes for 3Q. There is massive long-term potential for IEX given the nascent market share for exchanges in India’s power generation. With new product launches, a continued oversupplied market, and IEX’s competitive positioning, we expect volumes/PAT for IEX to increase at a 16% CAGR over FY21-23. Given the strong growth and high return profile (RoEs of 45-50%), the stock trades attractively at 33x FY23E EPS.

Key risks

The report has noted the key risks as below:

(i) transaction fee cuts, (ii) increased competition intensity, (iii) stagnant share in the ST market, (iv) a change in market design and (v) implementation of market coupling.



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Federal Bank to launch credit cards in next few months

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Federal Bank is set to launch credit cards in coming months and remains bullish about growth opportunities on the retail portfolio.

“We are in the process of getting into credit cards. In a couple of months from now, we will be there,” said Shalini Warrier, Executive Director, Federal Bank.

The bank has tied up with Mastercard and will initially start issuances for its own customers. It has also tied up with Fiserv to enable the digitisation of the end-to-end card issuance and processing cycle.

“We have a very good customer base. Once we have made enough inroads into our existing customers, at some point we will start new to bank business,” Warrier told BusinessLine, adding that between personal loans and credit cards, the portfolio will grow and that will help contribute to the return on assets.

Noting that the bank offers personal loans only to existing customers, Warrier said the portfolio is small and it will never be a very big portion. “But clearly, there is a need to increase that a little bit,” she said.

Personal loans is at about ₹1,800 crore for the bank.

Meanwhile, Warrier is also very optimistic about the retail portfolio and said the momentum for credit demand continues.

“Our momentum is higher than January 2020. It was higher in January 2021, and is continuing in February,” she said, adding that there is a high level of confidence in the market.

The bank expects the retail portfolio to grow at about 13 per cent to 15 per cent.

Federal Bank’s retail advances grew by 16 per cent in the third quarter of the fiscal and contributes 54 per cent of the loan book, as against 46 per cent from the wholesale business.

Inward remittances

According to Warrier, the lender’s inward remittance business has also grown despite the pandemic.

“The reason why we have not seen a decline in our remittance business was because we’ve been gaining market share. The overall pool may have come down a little bit, the fact remains that our pool has actually been increasing,” she said.

As on December 31, 2020, the banks market share in personal inward remittance business increased to 17.5 per cent. It has also processed over $ 1 trillion inward remittances processed in calendar year 2020.

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SBI slashes home loan rates to 6.70%, BFSI News, ET BFSI

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India’s largest lender, State Bank of India (SBI) has cut home loan rates by 70 bps to 6.70% for a limited period offer which will be ending on 31st March 2021.

Further the lender is also giving 100% waiver on processing fees. The lender said, ” The interest concession are based on loan amount and CIBIL score of the borrower. SBI believes that it is important to extend better rates to customers who maintain good repayment history.”

SBI Home loan interest rates are linked to CIBIL score and start from 6.70% for loans upto Rs. 75 lakh and 6.75% for loans above Rs. 75 lakhs. Customers can also apply from the ease of their home via YONO App to get additional interest concession of 5 bps. On the eve of International Women’s day, a special 5 bps concession is being made available to the women borrowers.

Saloni Narayan, DMD (Retail Business), SBI said, “Our customers have complete trust in us because of our total transparency. The reduced interest rates are one of the best interest rates in Home Loans anyone can wish for.”

Last month SBI had achieved the mark of Rs 5 trillion in its home loan business and is projecting touching Rs 7 trillion mark by 2024.

Back then, Dinesh Kumar Khara, Chairman at State Bank of India said, “We are the cheapest home loan provider and we have the best quality loan profile with very less NPAs. We hope to continue the same growth.”

Khara added, “We have always treated home loans as a growth driver for the nation and not just as mere transactions. We, at SBI, will continue focusing on enhancing customer delight that will in-turn enable the bank to scale newer heights.”



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SBI Has Waived The Processing Fee On Home Loans Until March: Know All

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Home loans under Pradhan Mantri Awas Yojana (PMAY)

Until December 2020, the State Bank of India has provided nearly two lakh home loans under the PMAY project. SBI is now the only bank appointed as the Central Nodal Agency for handling Pradhan Mantri Awas Yojana (PMAY) subsidy by the Ministry of Housing and Urban Development. SBI stated in a release said that it has been steadily diversifying home loans under PMAY and has approved 1,94,582 home loans as of December 2020 to endorse the government’s flagship initiative of “Housing for All by 2022.” “The Ministry of Housing and Urban Development has appointed SBI as the Central Nodal Agency (CNA) for administering the Pradhan Mantri Awas Yojana (PMAY) subsidy. SBI has been consistently expanding home loans under PMAY to endorse the government’s flagship scheme of “Housing for Everyone by 2022,” and has approved 1,94,582 home loans as of December 2020″ as per the bank.

SBI Home Loan Interest Rates

SBI Home Loan Interest Rates

SBI is currently offering home loans with interest rates as low as 6.80 per cent per year. The current rates on various types of SBI home loan schemes are listed below.

Home Loan Schemes ROI for salaried individuals ROI for self-employed individuals
SBI Home Loan (Term Loan) 6.80% – 7.55% 7.10% – 7.70%
SBI Home Loan (MaxGain) 7.30% – 7.65% 7.45% – 7.80%
SBI Realty Home Loan 7.65% – 8.05% 7.65% – 8.05%
SBI Home Loan Top Up (Term Loan) 7.50% – 9.65% 7.65% – 9.80%
SBI Home Loan Top Up (Overdraft) 8.40% – 8.75% 8.65% – 8.90%
SBI Bridge Home Loan “1st Year: 9.50%
2nd Year: 10.50%”
SBI Smart Home Top Up Loan (Term Loan) 8.50% 8.55%
SBI Smart Home Top Up Loan (Overdraft) 8.55% 9.05%
Insta Home Top Up Loan 8.20% 8.20%
SBI Earnest Money Deposit 10.45% onwards –
SBI Tribal Plus Scheme 7.05% onwards 7.05% onwards

SBI Home Loan Eligibility

SBI Home Loan Eligibility

SBI offers a variety of home loan initiatives, each with its own set of eligibility requirements. Customers interested in applying for an SBI Home Loan should review the eligibility requirements to avoid loan disapproval. The following are the basic SBI Home Loan eligibility criteria:

  • He or she must be an Indian resident, NRI, or Persons of Indian Origin
  • He or she must be a salaried or self-employed individual
  • He or she must be between the age cap of 18 to 75 years
  • He or she must have a minimum credit rating of 750 or above
  • He or she must have a valid and stable income source

SBI Home Loan Charges

SBI Home Loan Charges

The State Bank of India provides home loans with competitive interest rates beginning at 6.80 per cent per annum. The loan term will be extended up to 30 years, making for a more flexible repayment plan. These loans have a processing fee of 0.35 per cent of the loan amount (minimum Rs.2,000, gross Rs.10,000) plus related taxes. On SBI Home Loans, women borrowers get a 0.05 per cent interest rate cut. These are among the most common housing loan options in the nation because there are no hidden costs and no prepayment charges.

Documents required for SBI home loans

Documents required for SBI home loans

Below are the required documents for both salaried and self-employed individuals:

Loan application form

Proof of Identity: PAN, passport, Aadhaar Card, Driving license, Voter ID Card, passport size photographs

Proof of residence: Aadhaar card, driving license, utility bills

Proof of property: Construction approval paper, occupancy proof, payment slips and so on.

Income proof for salaried individuals: Salary slip for the last 3 months, Form 16 or copy of IT returns, Employer Identity Card, bank account statement for the 6 months

Income proof for non-salaried individuals: IT returns for the last 3 years, Balance Sheet & Profit & Loss statement for the last 3 years, TDS Certificate (Form 16A, if any), Certificate of qualification (for C.A./ Doctor, etc), business address proof.

SBI Home Loan Customer Care

SBI Home Loan Customer Care

The toll-free number for SBI home loan customer service is 1800 112 211/1800 425 3800. Customers can also reach SBI home loan customer care via email or mail, as detailed below:

Email ID: homeloan.complaints@sbi.co.in

Postal address: Real Estate and Housing Business Unit,

State Bank of India, Corporate Center,

Madame Cama Road,

State Bank Bhavan, Nariman Point,

Mumbai-400021, Maharashtra



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Reserve Bank of India – Tenders

Tenders

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“Reserve Bank of India, hereby, invites tender for Diesel Generator Set Operator Services for Bank’s office premises. The tender shall be submitted in two covers in accordance with the procedure detailed below. Specified documents shall be sealed in envelopes of appropriate size each of which shall be sealed. The Tender shall be prepared and submitted in two parts, viz, Part I and Part II, separately in sealed envelopes, clearly indicating on the covers, “Part I – Tender for Diesel Generator Set Operator Services – Technical Bid” and “Part II – Tender for Diesel Generator Set Operator Services – Commercial Bid”, respectively.

These two envelopes containing Part-I (Technical Bid) and Part-II (Commercial Bid) should be properly sealed in a third envelope of adequate size. This envelope shall be superscribed as “Tenders for Diesel Generator Set Operator Services for Bank’s office premises” and addressed to The General Manager (O-i-C), Reserve Bank of India, Ranchi and should reach the office not later than 15:00 hours on March 26, 2021.” Tenders submitted through Telegraphic, Fax and E-mail mode will not be accepted. The full name, postal address, e-mail address and telefax/ telephone number of the tenderer shall be written on the bottom left corner of the sealed envelope. Insertions, post scripts, additions and alterations shall not be valid unless confirmed by the tenderers signature. All copies of the tenders should be complete in all respects with all attachments/ enclosures/ annexures.

The technical Bid would be opened first and only those firms, who fulfil the terms and conditions will be eligible for participating in the Commercial Bid. The Technical Bids shall be opened at 16:00 hours on March 26, 2021 at Reserve Bank of India, RRDA Building, 4th floor, Pragati Sadan, Kutchhery Chowk, Ranchi – 834001. The bidders should be present at the time of opening of bids.

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Citi may shutter consumer banking biz in India, BFSI News, ET BFSI

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Citibank NA, the largest foreign bank in India, may be closing down its consumer banking division, joining a host of overseas lenders to have shut shop in India over the last few years.

Earlier this month, Bloomberg had reported that the bank is looking to divest some units in retail banking in the Asia-Pacific region, including those in South Korea, Thailand, the Philippines, and Australia.

Reports now say it may look at hiving off its consumer banking unit in India too. The move comes when there is stress in retail portfolios due to pandemic and business is undergoing a slowdown.

Interestingly, this development comes when HSBC recently reported hitting $1 billion profit in India.

In September 2020, Citibanks’s head of consumer banking in the country, Shinjini Kumar, has stepped down after three years at the helm, the American lender said on Wednesday.

Kumar, 53, had joined the bank in 2017 from Paytm Payments Bank, where she was the chief executive.

Recent bank exits

Last year BNP Paribas had shut down its wealth management business in India, while JP Morgan had surrendered one of its NBFC licences in 2019. Barclays and FirstRand Bank have shuttered retail operations in India. HSBC had closed its private banking business in 2015, while UBS has stuttered its banking operations in 2013.

What Citi says

“As our incoming CEO Jane Fraser said in January, we are undertaking a dispassionate and thorough review of our strategy, including our mix of businesses and how they fit together. As you would expect, many different options are being considered and we will take the right amount of time before making any decisions,” Citigroup had said last month.

India operations

In India, Citi has 2.9 million retail customers, with 1.2 million bank accounts and 2.2 million credit card accounts.

It has about 6% share in credit card spends. The lender ins the largest foreign bank in India in terms of balance-sheet. the lender holds a 5.87% market share in digital payments. About 26% of foreign portfolio investment comes through Citibank India. It has over 19,000 employees with 35 branches in the country.



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Matam Venkata Rao appointed MD & CEO of Central Bank

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Public sector lender Canara Bank on Monday said its Executive Director Matam Venkata Rao has been appointed as the new MD & CEO of Central Bank of India.

The central government through a gazette notification on February 26, 2021 has appointed Matam Venkata Rao, Executive Director, Canara Bank, as Managing Director and Chief Executive Officer in Central Bank of India for a period of three years, Canara Bank said in a regulatory filing.

Rao’s appointment in the Central Bank of India will be effective from the date of assumption of office on or after March 1, 2021, or until further orders, whichever is earlier, said the lender.

“He ceases to be the Executive Director of Canara Bank with effect from March 1, 2021,” Canara Bank said.

In May last year, the Banks Board Bureau had recommended Rao to be the new MD & CEO of Central Bank of India.

Rao’s appointment is in lieu of M D Pallav Mohapatra, who retired as the MD & CEO of Central Bank of India on February 28, 2021.

Stocks of Canara Bank were trading at ₹ 155.60 apiece on BSE, down 0.89 per cent. The Central Bank of India scrip was trading at ₹ 18.70, down 2.81 per cent on BSE.

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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, 28/02/2021 1 Mon, 01/03/2021 6,346.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Sun, 28/02/2021 1 Mon, 01/03/2021 100.00 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 (-)]*		       -6,246.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sat, 27/02/2021 2 Mon, 01/03/2021 9,414.00 3.35
  Fri, 26/02/2021 3 Mon, 01/03/2021 5,09,556.00 3.35
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 26/02/2021 14 Fri, 12/03/2021 2,00,010.00 3.50
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sat, 27/02/2021 2 Mon, 01/03/2021 4.00 4.25
  Fri, 26/02/2021 3 Mon, 01/03/2021 58.00 4.25
4. Long-Term Repo Operations# 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$       32,842.06  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -6,08,993.94  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -6,15,239.94  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 28/02/2021 4,46,196.44  
  27/02/2021 4,52,485.03  
     (ii) Average daily cash reserve requirement for the fortnight ending 12/03/2021 4,49,720.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 26/02/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 12/02/2021 8,49,099.00  
@ 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 : 2020-2021/1175

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