Month: April 2021

Axis Bank Q4 net profit surges to Rs 2,677 crore

Banking & Finance

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Private sector lender Axis Bank reported a sharp rise in its net profit for the quarter ended March 31, 2021 with robust loan growth.

Back in the black, Axis Bank’s net profit stood at Rs 2,677.06 crore in the January to March 2021 quarter as against a net loss of Rs 1,387.78 crore in the same period a year ago. On a sequential basis, its profits grew 140 per cent from Rs 1,116.60 crore in the quarter ended December 31, 2020.

For the full fiscal 2020-21, Axis Bank’s net profit surged 305 per cent to Rs 4,961.28 crore versus Rs 1,627.22 crore in 2019-20.

For the quarter ended March 31, 2021, the private sector lender registered an 11 per cent growth in its net interest income to Rs 7,555 crore from Rs 6,808 crore a year ago. The net interest margin stood at 3.56 per cent in the fourth quarter last fiscal as against 3.55 per cent a year ago.

Other income grew 17.1 per cent to Rs 4,668.3 crore in the quarter under review.

For the fourth quarter of 2020-21, the bank’s provisions fell 57.4 per cent to Rs 3,294.98 crore from Rs 7,730.02 crore a year ago.

“The bank held cumulative provisions (standard + additional other than NPA) of Rs 12,010 crore at the end of the fourth quarter of 2020-21. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations,” Axis Bank said in a statement on Tuesday.

Asset quality has improved. Gross non-performing assets stood at Rs 25,314.84 crore as on March 31, 2021 or 3.7 per cent as against 4.86 per cent a year ago. Net NPAs amounted to 1.05 per cent as on March 31, 2021,versus 1.56 per cent a year ago.

The board of directors of the bank have considered it prudent to not propose any dividend for the year ended March 31, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates, Axis Bank further said.

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Reserve Bank of India – Press Releases

Press Releases

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The Result of the auction of State Development Loan for One State Government held on April 27, 2021.

Table
(₹ in crore)
  MANIPUR 2031 Total
Notified Amount 200 200
Underwriting Notified Amount NIL  
Tenure 10  
Competitive Bids Received    
(i) No. 44 44
(ii) Amount 2020 2020
Cut-off Yield (%) 6.78  
Competitive Bids Accepted    
(i) No. 2 2
(ii) Amount 191.987 191.987
Partial Allotment Percentage of Competitive Bids    
(i) Percentage 91.4224  
(ii) No. (2 bids)  
Non – Competitive Bids Received    
(i) No. 7 7
(ii) Amount 8.013 8.013
Non-Competitive Price 100  
Non-Competitive Bids Accepted    
(i) No. 7 7
(ii) Amount 8.013 8.013
Partial Allotment Percentage of Non-Competitive Bids    
(i) Percentage –  
(ii) No. –  
Weighted Average Yield (%) 6.78  
Amount of Underwriting Accepted from Primary Dealers NIL  
Devolvement on Primary Dealers NIL  
Total Allotment Amount 200 200

Rupambara
Director    

Press Release: 2021-2022/117

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‘Q1 is a cautious phase as customers are on wait-and-watch mode’

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The first quarter of the fiscal year 2021-22 will be a cautious phase with customers on a wait-and-watch mode amid localised lockdowns and surging Covid-19 cases, believes Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra Finance.

“Customers have money but they want to wait for a month to see how things pan out. Up to mid-May one would be on the wait-and-watch situation and if things were to come under control, there would be a sudden spurt of demand. The pent-up demand will get capitalised. Customers are not averse to buying but they want to wait for some time,” he said.

In an interaction with BusinessLine, Iyer said he expects growth in segments like vehicle sales to revive in coming quarters.

“Going forward, trend will be a growth curve but it may not be the first quarter. At least April and May will not be so. Last one week has been tough. We will have to wait till May 15,” he said, adding that the festival season, post-monsoon, would see a substantial growth potential.

In terms of disbursements, Iyer said Mahindra Finance will focus on areas which are less impacted by Covid infections.

“We have mapped across the country pockets which are least, moderately and severely impacted. So, in the severely impacted pockets, we will focus on collection efficiency and asset quality while the least and moderately impacted ones will be an opportunity for us,” he said.

The NBFC has also added about 150 branches in the last quarter and it is mapped on the basis of new economic activity and agri support in the current scenario.

“We said it even last year that when there are unknowns around, it is better to be cautious and finance people who genuinely want to use the vehicle and not use it as an opportunity. In difficult times, they can’t survive. We need experienced operators,” Iyer said.

However, in terms of collection efficiency, the fourth quarter of 2020-21 was even better than the fourth quarter of 2019-20 for Mahindra Finance. Collection efficiency was at 110 per cent.

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SBI to consider raising $2 billion via bonds, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: The country’s largest lender State Bank of India (SBI) on Tuesday said a committee of its central board will consider raising up to USD 2 billion (around Rs 14,942 crore) through bonds in this fiscal year. The Executive Committee of the Central Board is scheduled to have a meeting on April 28, 2021, the bank said in a BSE filing.

The committee will examine “the status and decide on long term fund raising in single / multiple tranches up to USD 2 billion through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2021 – 22”, the filing said.

SBI shares ended at Rs 352.9, up by 2.5 per cent, on BSE.

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FIDC seeks relief measures in wake of second Covid wave

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Concerned about the impact of the second wave of Covid-19 infections, Finance Industry Development Council has sought relief measures including restructuring for retail and individual borrowers of non banking financial companies (NBFCs).

In a representation to Reserve Bank of India Governor Shaktikanta Das, FIDC has asked that borrower accounts, irrespective of whether or not they had been restructured earlier and if they are standard accounts as on March 31, 2021, may be allowed restructuring without any downgrade in asset classification, subject however to the lending NBFCs undertaking fresh credit assessment of the borrowing entity.

“We wish to bring to your kind notice that the second wave of Covid- 19 has already started impacting the industry, more so the above self- employed segment of customers having little or nothing to fall back upon,” FIDC said in the letter.

NBFCs under pressure

It also pointed out that with many states like Maharashtra, Chhattisgarh, Madhya Pradesh, Karnataka, Rajasthan, Tamil Nadu and NCR already under lockdown or lockdown-like strict conditions, which has resulted in closure of NBFC branches. It is becoming increasingly difficult to reach customers for collections as their business has come to standstill and their livelihoods are under threat, it further said.

“It will not be long before the NBFC industry starts reeling under pressure of increased NPAs and at the same time, handling demand of moratorium and/or restructuring from its existing and deserving customers,” FIDC said.

Loan restructuring

It has also asked the RBI to allow standstill on buckets for restructured accounts for the first quarter of the current fiscal.

FIDC has also sought restructuring of loans taken by small NBFCs (having asset size of less than ₹500 crore) from banks and FIs and to avoid ALM mismatch arising out of restructuring of their customers’ accounts.

It has also asked the RBI for liquidity support to small NBFCs for on lending to micro, small and medium enterprises.

“We urge the RBI to increase the overall support outlay to AIFIs from ₹50,000 crore to at least ₹75,000 crore,” FIDC said, adding that benefit of PSL classification for lending by banks to

NBFCs for on-lending may please be regularised as part of the overall PSL policy.

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How To Open A Recurring Deposit (RD) Account In SBI?

Personal Finance

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SBI RD Interest Rates

Here’re the latest RD rates of SBI for a deposit of less than Rs 2 Cr.

Tenure General RD rates Senior Citizen RD rates
1 year – 1 year 364 days 5.00% 5.50%
2 years – 2 years 364 days 5.10% 5.60%
3 years – 4 years 364 days 5.30% 5.80%
5 years – 10 years 5.40% 6.20%

Key takeaways of SBI RD

Key takeaways of SBI RD

  • One can make a minimum deposit of Rs. 100/- per month (thereafter in multiples of Rs. 10/-) with no upper limit.
  • One can make deposits for a minimum period of 12 months to 120 months.
  • Senior citizens are eligible for a 0.50 per cent additional interest rate compared to the regular rates for non-senior citizens.
  • The bank imposes a penalty in the event of late payments which is Rs. 1.50 per Rs. 100/- per month for an account with a maturity period of 5 years and less and Rs. 2.00 per Rs. 100/- per month for an account with a maturity period of more than 5 years.
  • On Recurring Deposit accounts paid out on or after the maturity date, where three or more consecutive instalments have been missed and the account has not been normalised, a service fee of Rs. 10/- will be imposed. If six consecutive instalments are not issued, the account will be closed prematurely and the remaining balance will be credited to the account holder.
  • The nomination facility is also available for the customers.
  • On the successful opening of the account, the account holder is issued with a universal passbook.
  • SBI provides the option of taking a loan against a deposit; the loan amount can be taken up to 90% of the RD balance.
  • One can easily transfer his or her RD account from one SBI branch to the other.
  • Customers of SBI have the option of withdrawing their RD amount prematurely. A penalty will be charged by the bank if the amount is withdrawn before maturity.

Types of SBI RD schemes

Types of SBI RD schemes

The regular recurring deposit, the SBI holiday savings account, and the SBI Flexi Deposit Scheme are the three forms of recurring deposits that SBI currently provides. Let’s discuss each of them.

SBI Regular Recurring Deposit: This basic RD account can be opened by depositing a minimum amount of Rs 100 for a tenure of 1 year to 10 years respectively. A nominee can be appointed, and a loan of up to 90% of one’s RD account can be taken out.

SBI Holiday Savings Account: This scheme allows you to save money for your holiday through Thomas Cook. While travelling, you can select a Thomas Cook Holiday savings account package and the balance will be divided into 13 EMIs. The EMI amount can be deposited into an SBI Holiday Savings Account on a monthly basis for a period of 12 months, and Thomas Cook will provide the 13th EMI after factoring in the applicable interest rate. This account requires a minimum deposit of Rs100 to open.

Eligibility criteria

Eligibility criteria

Individuals must meet the following eligibility requirements in order to open an RD with SBI:

  • A recurring deposit account can only be opened by Indian citizens or members of a Hindu Undivided Family.
  • The individual must have a savings account with SBI to open an RD account.
  • He or she must have a stable income source
  • NRIs can also open the RD account through NRO and NRE accounts.

Documents required to open an RD account

Documents required to open an RD account

To open an SBI RD account, you need to keep the following documents handy:

Proof of identity: Aadhaar Card, Voter ID Card, PAN Card, Senior Citizen ID Card, Ration Card

Proof of address: Driving License, Utility Bills, Bank account statement

How to open an RD account?

SBI offers two options to open a recurring deposit account: online and offline. To open an RD account offline, go to the nearest SBI branch physically fill out the application form and submit it along with the required documents. To open an RD account online, just log in to SBI net banking account and follow the instructions to create an e-RD. You must first generate an SBI savings account if you do not have one.

TDS on SBI RD

TDS on SBI RD

The interest you receive on your recurring deposit is subject to a 10% TDS (Tax Deducted at Source). If the interest you receive on your recurring deposit is less than Rs. 10,000, no TDS is withheld. If you do not provide the bank with your PAN number, the TDS would be 20%. You need to submit Form 15G if you want to avoid TDS on RD. You will be given Form 16A by the bank regardless of whether you are eligible for TDS on your income. Also, please remember that Form 15G is only available to citizens under the age of 60. Whereas Form 15H is for senior citizens who are above 60 years old.



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SBI to recruit 6,344 junior associates

Banking & Finance

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Here’s some good news for job-seekers in the current pandemic-ravaged times. State Bank of India (SBI) has just announced vacancies for recruiting 6,344 Junior Associates (Customer Support & Sales).

This recruitment drive comes in the backdrop of the possibility of companies slowing hiring due to the adverse impact of Covid-19 on their operations as well as demand for goods & services. So, there is likely to be fierce competition for the vacancies.

Though under the essential academic qualifications, India’s largest bank has prescribed “graduation in any discipline from a recognised University or any equivalent qualification recognised as such by Central Government”, it is likely that many with professional qualifications, including engineering, law, management, among others, will have a shot at the exam.

This time around the number of vacancies, including regular, backlog and special recruitment drive, advertised are about 35 per cent less vis-a-vis last year.

The age criteria for the general candidates to take the exam is “not below 20 years and not above 28 years” as on April 1, 2021. For the other categories, there is relaxation in the upper age limit.

The starting Basic Pay for Junior Associate is now higher at ₹19,900 against ₹13,075 earlier.

This hike in Basic Pay follows the signing of the industry-wide 11th Bipartite Wage settlement in November 2020, whereby bank employees — officers, staff and sub-staff — got a 15 per cent hike in the payslip component.

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As per SBI’s recrutiment advertisement, the total starting emoluments of a Clerical Cadre employee payable in a metro like Mumbai will be around ₹29,000 per month (₹26,000 earlier).

This is inclusive of Dearness Allowance, other allowances at the current rate and two additional increments for newly recruited graduate junior associates. Allowances may vary depending upon the place of posting.

Women Business Correspondents: Agents of change in India’s financial inclusion

According to the bank, the new recruits will be on probation for a minimum period of 6 months. They will be required to complete e-lessons during the probation, for getting confirmed in the bank, failing which their probation will be extended till completion of the same.

Further, before the probation period comes to an end, their performance will be evaluated and the probation period of those employees whose performance fails to meet the bank’s expectation, may be extended.

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RIL Shares Gain Close To 5% In 2 Days; Jefferies Gives Buy With A TP Of Rs. 2600

Personal Finance

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Investment

oi-Roshni Agarwal

|

Shares of Reliance Industries amid strong market momentum when Nifty has strengthened again to 14600 levels is up in trade by over 2.35 percent. And at the day’s high price, the scrip of RIL has jumped to Rs. 1990 per share on the NSE.

RIL Shares Gain Close To 5% In 2 Days; Jefferies Gives Buy With A TP Of Rs. 2600

RIL Shares Gain Close To 5% In 2 Days; Jefferies Gives Buy With A TP Of Rs. 2600

On April 26, 2021, the oil to telecom conglomerate and BP announced that it has begun the start of production from the Satellite Cluster gas field, in block KG-D6, ahead of schedule. The second of the three deep-water gas developments, planned jointly, was expected to start production in mid-2021.

Now amid positive news surrounding the company, global brokerage firm Jefferies has recommended a buy on RIL with a target price of Rs. 2600. It says that the overseas investors are more constructive on Reliance Industries at this point in time compared to the domestic peers.

A number of investors believe that Reliance is emerging as a local champion with the right to win in retail and telecom.

Some investors believe that event-driven triggers are behind, but Jefferies believes that there are few more triggers left for the stock to re-rate.
– One is the launch of affordable smartphone
– The Future Group deal
– O2C stake sale over the next 12 months.

There is a belief that oil to chemical monetization as well as possible demerger listing would be another triggers for the stock of RIL stock Also, the tariff hike could enable the rerating of the entire Jio platform. But the near-term trigger would be monetisation of the oil to chemicals.

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SBI Cards Q4 spends point to a worsening Covid impact, BFSI News, ET BFSI

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SBI Cards and Payment Services Ltd’s showing a slowdown in business in the fourth quarter, when the new Covid wave was not prominent in India.

The company reported a weak fourth quarter, with a sequential decline in receivables/spending.

The spends

While overall spends rose 11% year on year (YoY) they logged a 5% decline sequentially, within which retail spends were up 13% YoY (-4% QoQ), while corporate spends declined 10% QoQ (flat YoY).

Retail spends remained higher than pre-Covid levels, while corporate spends reached pre-COVID levels – on the back of new use cases making up for the loss in travel spends. Online retail spends form ~52% of the total retail spends.

This development comes when a major rival HDFC Bank is hamstrung as RBI has barred it from issuing new credit cards.

According to the management, spends across categories, barring travel and entertainment, have reached pre-Covid levels. Corporate spends have also reached pre-Covid levels, while corporate travel remains impacted. New use cases across corporates have been making up for the loss in travel spends.

However, the YoY growth is far lower than the pre-pandemic growth trend, which remains a worry.

Also, the gross non-performing assets (GNPA) ratio increased to 4.96% (versus proforma 4.51% in the December quarter), while the NNPA ratio declined to 1.15% (versus 1.58% in the third quarter of FY21).

Total receivables

Total receivables grew 4% YoY (2.5% QoQ decline) to Rs 25110 crore. The receivables mix indicated a marginal increase in the number of transactors and decline in revolvers – resulting in moderation in yields and an impact on the margins. Receivables per card continued to decline, reaching Rs 21,000 crore in the fourth quarter.

With the spends towards essentials are small in size than discretionary, the second wave of the pandemic poses significant risks to growth for SBI Card.

SBI Cards results

SBI Cards reported net profit growth of 110% YoY to Rs 175 crore, which was below analyst estimates. It was affected by a 21% YoY/8% sequential decline in interest income and modest fee income. Although, lower opex supported pre-provision operating profit (PPoP). For FY21, NII (net interest income)/PPOP was up 9.7%/9.6% YoY, while PAT declined ~21% YoY. NII declined 18.3% YoY, with margins down 130bp QoQ to 13.2%. Income from fees and services was stable QoQ at INR11.1b (+16% YoY) as overall spends declined ~5% QoQ. Thus, total income grew 2% YoY to INR22.2b, while opex declined 4.6% QoQ, resulting in stable PPoP (9% miss).

Cards in force grew 12% YoY to 11.8 million. New account sourcing for the fourth quarter stood at 93% of 4QFY20 levels. SBI contributed ~54% to new cards sourced, which accounts for ~44% of the overall card base.

For the financial year ended March 31, total income was at Rs 9,714 crore for FY21 vs Rs 9,752 crore for FY20. The profit after tax came at Rs 985 crore for FY21 versus Rs 1,245 crore in the previous fiscal.

The total balance sheet size as of March 31, 2021, was Rs 27,013 crore as against Rs 25,307 crore as on the same date of last year.



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