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E-tender no.: RBI/JAMMU/HRMD/65/20-21/ET630 With regard to the captioned e-tender, it has been decided to extend the timeline for submission and opening as mentioned below:
2. All other terms & conditions of the tender remain unchanged. 3. RBI reserves the right to make any further modifications to these dates. Please keep a watch on RBI website and MSTC Portal for any further updates. Regional Director Date: 02.04.2021 |
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Private sector lender HDFC Bank reported a 13.9 per cent growth in advances as on March 31, 2021 compared to a year ago and 16.3 per cent increase in deposits in the same period.
In a regulatory filing on Monday, the bank said its advances rose to ₹11.32 lakh crore as of March 31,2021 compared to ₹9.93 lakh crore in the same period a year ago. On a quarter on quarter basis, advances grew by 4.6 per cent over ₹10.82 lakh crore as of December 31, 2020.
“As per regulatory (Basel 2) segment classification, domestic retail loans as of March 31, 2021 grew by around 7.5 per cent over March 31, 2020 and around 5 per cent over December 31, 2020; domestic wholesale loans as of March 31, 2021 grew by around 21 per cent over March 31, 2020 and around 4.5 per cent over December 31, 2020,” HDFC Bank said.
Its deposits grew to about ₹13.35 lakh crore as of March 31, 2021 versus ₹11.47 lakh crore a year ago. It amounted to a grow of about five per cent on a quarterly basis compared to ₹12.71lakh crore as of December 31, 2020.
CASA deposits of the bank grew by 27 per cent to about ₹6.15 lakh crore as of March 31, 2020 compared to ₹4.84 lakh crore in the same period last fiscal.
HDFC Bank said its CASA ratio stood at around 46 per cent as of March 31, 2021 compared to 42.2 per cent a year ago.
During the quarter ended March 31, 2021, the Bank purchased loans aggregating ₹7,503 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited.
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The government notified that it has infused Rs 14,500 crore into four banks – Bank of India, Indian Overseas Bank, Central Bank of India and UCO Bank.
Indian Overseas Bank and Central Bank of India are reportedly among the four PSBs that are proposed to be privatised this year.
Zero-coupon bonds
A zero-coupon bond is a bond that pays no interest and trades at a discount to its face value.
Issued at a deep discount to the face value, these bonds are non-interest bearing, which means it is an investment that does not earn any returns, but depreciates in value over the years.
As these special bonds are non-interest bearing and issued at par to a bank, it would be an investment, which would not earn any return but rather depreciate with each passing year.
The bonds–with a tenure of 10-15 years–can be held by banks in the held-to-maturity category, insulating them from the impact of marked-to-market valuations.
Weak buffers
The agency said these long-tenure securities would be factored at par value rather than the discounted value in the banks’ balance sheet.
According to the agency, the four lenders have weak tangible buffers or a weaker ability to build and maintain capital buffers.
“Ind-Ra believes the intrinsic net worth of these instruments could be lower by more than 50% at the outset than similar maturity government papers in the market. The illiquid, non-trading nature of these securities could add to the discount,” it said in a release.
Tangible common equity is a measure of physical capital, used to evaluate banks’ ability to deal with losses. The long-tenor securities would be factored in at the face value and not the discounted value in the banks’ balance sheet.
Equity level
It said the proposed quantum of capital infusion varies between 11 per cent and 44 per cent of the tier-I capital of the respective PSBs as of the third quarter of the financial year 2020-21.
Equity level is an important factor in the banks’ ability to service Basel-III additional tier-I and tier-II bonds, it said.
“While the quantum of these instruments is limited in the total equity profile of most of these PSBs, the notching down for their tier-II bonds and additional tier-I bonds from the long-term issuer ratings and the standalone rating, respectively, could widen,” it said.
The first capital infusion through non-interest-bearing bonds was in Punjab and Sindh Bank (P&SB) in the third quarter of the financial year 2020-21.
The government has already allocated Rs 20,000 crore for equity infusion into PSBs in their Union Budget 2021-22.
The agency said it will continue to closely track these infusions and their impact on the banks’ franchise, adjusted networth and book value, it said.
The capital infusion
On Wednesday, the government infused Rs 4,800 crore into Central Bank of India, Rs 4,100 crore into Indian Overseas Bank, Rs 3,0000 crore into Bank of India, and Rs 2,600 crore into UCO Bank. The first such infusion was of Rs 5,500 crore in Punjab & Sind Bank in December.
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But after these small-time speculators banded together to drive up dozens of obscure stocks by hundreds or even thousands of percent — and in the process burned a few hedge-fund barons betting on declines — the movement appears to be petering out. An index that tracks 37 of the most popular meme stocks — 37 of the 50 that Robinhood Markets banned clients from trading during the height of the frenzy — is essentially unchanged over the past two months after soaring nearly 150% in January.
Talk to Wall Street veterans and they’ll tell you that this flat-lining is the beginning of what will be an inexorable move downward in these stocks.
It’s not so much about the poor fundamentals of the companies. At least not in the short term. The day-trading zealots have shown a surprising ability to ignore those facts. It’s more that as the pandemic slowly winds down and the economy starts to open up, many of them will leave their homes and start going back into offices and out to restaurants and embarking on trips near and far. And as they do, they may stop obsessing about their Robinhood accounts.
Their collective sway on the meme-stock universe, in other words, will wane.
Of course, the Wall Street set has, broadly speaking, misread the Reddit crowd for weeks earlier this quarter, and it’s possible their analysis is wrong again now. Preliminary data, though, suggests they’re right.
Recent reports suggest vaccinated Americans are planning long-awaited vacations with searches for “Google flights” reaching a peak popularity score of 100 this week, according to a Google Trends tracker. The opposite is being seen for terms like “stock trading” and “investing” which have plunged, Google Trends shows.
“The stimulus check impact on retail trading is waning,” said Edward Moya, senior market analyst at Oanda. “Many Americans are looking to go big on attending sporting events, traveling across the country, vacationing, visiting family and friends, and revamping wardrobes before going out to restaurants, pubs and returning to the office.”
Gamestop Juggernaut
Video-game retailer GameStop Corp. became the poster child for retail traders looking to rage against the hedge fund elite. However, the stock’s 2,460% roller coaster alongside other favorites touted on Reddit’s WallStreetBets thread caused as much pain as it did joy.
The stock’s more than 900% surge this year has drawn a wary eye from the Wall Street analysts that follow it. The average 12-month price target implies the stock will lose more than three-quarters of its value from current levels. Only Jefferies holds a price target near Thursday’s $191.45 close and that call came with the warning that shares are “subject to volatility beyond fundamentals.”
Given AMC Entertainment Holdings Inc.’s position as a movie theater many Americans went to at some point, it’s not a complete surprise as to why Reddit users rushed to the company’s aide. #SaveAMC trended on Twitter and amateur investors appeared more than happy to fight against Wall Street’s skeptics despite most movie theaters being closed due to the ongoing pandemic.
The chain’s latest rally came amid plans to continue reopening cinemas, however, Wall Street is skeptical. None of the nine analysts tracking the company rate it a buy and the average price target implies the stock will lose 63% of its value in the coming year.
The company’s rally has been fueled by recent moves to ride the Bitcoin wave alongside peers like Future FinTech Group Inc. and Ault Global Holdings Inc.
Zomedica Corp., a small-cap animal health company, has become a cult favorite among retail investors chasing stocks with low share prices. The Ann Arbor, Michigan-based company started the year worth less than a quarter, but had soared as high as $2.91.
Trading volume of the company has accelerated this year with an average of 174 million shares changing hands per session, more than four times the average over the course of 2020. A mention from Tiger King’s Carole Baskin helped it go viral in mid-January.
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As in the U.S., initial public offering activity out of Asia has had its strongest-ever start to a year. That frenzy for new shares is likely to taper off as demand falls back to earth in the next few months.
Asian companies, like their global peers, notched their best first quarter for listings ever, thanks to a flood of liquidity during the pandemic, super-low interest rates, and rallying stock markets. The firms raised $49.3 billion through first-time share sales at home and abroad — a 154% jump over the same period in 2020, data compiled by Bloomberg show.
IPOs globally raised an unprecedented $215 billion, with almost half of that haul coming from the record wave of issuance by special-purpose acquisition companies in the U.S.
Now, a global rotation out of highly-valued tech and health-care stocks that have dominated market activity, as well as fading excitement around SPACs in the U.S., is clouding the outlook for new deals.
“Inevitably, there is a mark to market of comparable valuations,” said William Smiley, co-head of equity capital markets at Goldman Sachs Group Inc. in Asia ex-Japan. “In terms of our pipeline, there hasn’t been any significant impact from the recent rotation, but opportunistic issuance may have decelerated.”
Asia’s IPO space faces an added challenge: the travails of Chinese tech firms, which dominate fundraising in the region. These companies are facing a crackdown against monopolistic practices at home and are also in focus as U.S.-China tensions keep rising. Last month, for instance, the U.S. moved forward with a law that could result in Chinese firms that don’t comply with U.S. auditing standards being kicked off American exchanges.
The red flags are already there, with the investor mania seen earlier this year for deals like the one by Chinese TikTok rival Kuaishou Technology starting to die down.
Chinese fintech company Bairong Inc., which raised $507 million, delivered the worst debut in three years among $500-million-plus Hong Kong IPOs when it fell 16% on Wednesday. U.S.-listed Chinese search giant Baidu Inc. and video-streaming service Bilibili Inc. raised a combined $5.7 billion through secondary listings in Hong Kong in March but had lackluster debuts.
In contrast, investors were seen scrambling for a piece of Kuaishou’s $6.2 billion Hong Kong IPO, the biggest listing globally so far this year, and Korean e-commerce giant Coupang Inc.’s $4.6 billion float.
Healthy Shakeout
That said, muted investor appetite for listings isn’t affecting the queue of hopefuls.
Online music company Tencent Music Entertainment Group, micro-blogging service Weibo Corp. and online travel service Trip.com Group Ltd. are among U.S.-traded Chinese companies seeking so-called “homecoming” listings in Hong Kong. These secondary listings, seen as a hedge against Sino-American tensions, raised $17 billion in Hong Kong last year and have amassed $6.4 billion so far in 2021.
“The secondary listing trend will continue but what should be interesting to see is whether new issuers who ultimately want to get to a dual listing, perhaps consider seeking a dual primary listing in Hong Kong and the U.S. from the start rather than doing a primary U.S. listing, waiting two years and then coming to Hong Kong for the secondary listing” said Francesco Lavatelli, head of equity capital markets for Asia Pacific at JPMorgan Chase & Co.
Tech and health-care firms make up the bulk of the listing pipeline in Asia, say bankers, even without the “homecoming” cohort, many of whom opted for U.S. listings because of the American investor base’s greater familiarity with new economy stocks. Among them: health-care startup WeDoctor, which is planning a multi-billion dollar Hong Kong IPO and China’s Uber-like startup Full Truck Alliance, which is looking into a $1 billion U.S. listing.
“The pipeline remains quite robust but is centered around tech and growth stocks, which are obviously seeing a little bit of a re-rating,” said Tucker Highfield, co-head of equity capital markets for Asia Pacific at Bank of America Corp. “The thesis of good companies being able to buck the trend of volatility will continue and there’s capital available.”
Ultimately, less frothy markets and a cooling of the IPO investor mania may actually be welcome.
“Entering a more balanced market environment isn’t a bad thing. It can extend the issuance cycle and work to keep excesses in check,” Smiley said. “If there is going to be correction, you want it to be fast – a prolonged downturn kills issuance.”
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Planning
oi-Sneha Kulkarni
Under the Stand Up India programme, the government has allocated Rs 25,586 crore to provide easy funding to Dalit and female entrepreneurs. There is a massive group of potential entrepreneurs, particularly women and Scheduled Caste (SC) and Scheduled Tribes (ST) people, who want to start their own business that will allow them to grow and thrive. Such entrepreneurs can be found all over the country, and they are brimming with ideas for what they can do for themselves and their families.
Ambitious young SC, ST, and female entrepreneurs are energised and enthusiastic, but they may face obstacles in making their dreams a reality. Acknowledging these issues, the Stand Up India Scheme was launched on April 5, 2016, with the goal of promoting entrepreneurship at the grassroots level with a focus on economic empowerment and job creation. This programme has been extended through 2025.
The goal of Stand-Up India is to facilitate growth among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by assisting ready and trainee borrowers in starting a greenfield enterprise in trading, manufacturing, and services sectors.
Stand-Up India’s mission is to:
Encourage SC & ST women to start businesses.
Provide loans to both ready and trainee borrowers for the establishment of greenfield enterprises in manufacturing, services, or trading, as well as activities related to agriculture.
Facilitate bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one woman borrower per Scheduled Commercial Bank branch.
The Stand-Up India scheme is based on an understanding of the difficulties faced by SC, ST, and women entrepreneurs in establishing businesses, acquiring loans, and other forms of support that may be required from time to time in order to run a successful business. As a result, the scheme aims to create an eco-system that facilitates and continues to provide a favourable business environment.
Borrowers will be able to get loans from bank branches to help them start their own business under the scheme. The scheme, which applies to all Scheduled Commercial Bank branches, can be accessed in three ways:
Who all are eligible for a loan under Stand Up India?
Since its inception, the Stand Up India Scheme has sanctioned Rs. 25,586 crore to over 1,14,322 accounts, totaling Rs. 25,586 crore.
GoodReturns.in
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However, online payments is a trend which is going to go up further, he added.
“Particularly within SBI Card, now, more than 53 per cent of the spends actually come from online payments which used to be around 44 per cent earlier. Almost 9 percentage points improvement is there mainly in terms of the categories like for groceries, apparel, utility bill payment, insurance premium, online education,” Amara told in an interview.
He added that for these kind of categories, suddenly the company has seen kind of an increase in spends online. “We believe (it) will remain online because once people get used to the comfort of it, they will continue with that. So, COVID or no-COVID, it will not impact that.”
However, he said the point of sale (PoS) locations have not opened that well, as and when the footfall increases, there will be a pick-up there also.
The pure-play card company is also seeing an emerging trend of securing more customers from non-metro locations. It is also banking on its parent company SBI’s huge customer base to expand further.
Maybe till 5-6 years ago, tier-I locations were contributing majorly to the credit card industry growth.
“But, if you look at our recent performance, around 58 per cent of our incremental sourcing is actually coming from non-tier cities that is tier II, III and IV.
“These are contributing more to our new credit card acquisitions, that is basically we have a piggyback of our parent bank (SBI) customer base,” he added.
The company’s card-in-force grew 15 per cent to 1.15 crore in the third quarter of the fiscal ended March 2021, against one crore in the year ago same period. The spends were higher by 8 per cent to Rs 37,797 crore from Rs 35,135 crore.
And, the new accounts volume increased 8 per cent to 9,18,000 accounts in the third quarter of 2020-21, compared with 8,48,000 in the third quarter of 2019-20.
Under the company’s pre-approved programme, wherein it looks towards the customer base of the parent bank and the cardable population, it has helped SBI Card immensely in terms of adding to the new card base, Amara added.
“It started around 2017, it has now reached a good volume. It contributes well but if you look at our disclosures, more than 50 per cent is coming from our bank channel which you essentially call kind of a SBI sourcing,” Rao said further.
He added that particularly, during the first and second quarters of FY21, when open market locations were closed and when sourcing were limited, the company’s banking channel helped it in terms of ramping up. “We were able to come back to almost 10,000 accounts per day, that was the usual run rate in best of the best times. So, we were able to get back to that trend by Q3.”
And, majorly, this growth has come from tier-II, -III and -IV cities, he added.
Amara also said the company will continue to work with its parent bank.
“If you look at the customer base of our parent bank, it is more than 400 million. We have hardly explored the base of around 20-22 per cent. So, there is a plenty of runway left,” Rao said.
However, he said the company will always look forward to forge new tie-ups and recently joined hands with Jio Payments also.
On the company’s tie-up with various airline companies, which were hit the most during the lockdown period and are running below the capacity off-take of passengers, Amara said the business has been impacted on that front, but exuded confidence that it will be back to track once things normalise.
In the nine-months ended December 2021, SBI Card witnessed a flat growth in its income at Rs 7,245 crore. And, the net profit was down by 30 per cent to Rs 809 crore during the April-December period of 2020-21.
Rao said the company had already reached to the pre-COVID-19 level business by third quarter and expects to post decent numbers for the overall fiscal.
The company is expected to declare the financial results for the fourth quarter of 2020-21 within the end of this month.
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Bank systems were clogged due to year-end system maintenance. Transactions were delayed for more than 24 hours, which otherwise would have been possible in a few seconds. Customers of top banks with large retail interfaces are said to have suffered the most.
This triggered a flood of complaints on Twitter even as National Payments Corporation of India (NPCI), an umbrella organisation of retail payments and settlements, issued a clarification. The latest outage was restricted to a few large banks and highlights the risks of 24×7 payments systems with more transactions moving online. An estimated 4.5 lakh transactions have been affected, say market experts.
“For both IMPS and UPI to function well, availability of the banks’ Core Banking Systems is mandatory,” said Dillip Asbe, MD and CEO at NPCI. “However, they were not functioning in full strength due to the financial year-end processing, which is carried out on April 1 every year. We acknowledged that on social media.”
On April 1, IMPS and UPI are estimated to have reported about 9.7 and 76 million transactions. The very next day, those numbers inched up to 10.8 million and 90 million. In those two days, volumes were broadly 5-15 percent lower than then an average usual day.
The financial year end closing had led to some UPI and IMPS transaction failures at a few banks,” NPCI tweeted on April 2 post noon. “We have observed that most of these bank systems are back to normal since last evening. Customers may avail uninterrupted IMPS and UPI services.”
Bankers said that the failure rate for transactions was much higher than normal on April 1 as the down time for core banking systems for some banks extended as they updated for the new financial year.
“It impacted some banks for a long period. If the core banking for bank ‘A’ does not respond it means transactions to and from that bank do not go through,” said a senior bank executive.
It seems there were more than one bank which was impacted but it was not a widespread systemic issue,” said the person.
To be sure, the estimated failure of transactions at 4.5 lakh were less than 4.5% of the average 10 to 12 million daily transactions managed by the NPCI. However, it is much higher than the less than 0.50% failure rates the system faces in normal courses.
“But don’t forget UPI and IMPS are 24×7 systems; so these issues can occur sometimes,” said another senior bank executive.
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Under the scheme, bank loans between Rs 10 lakh and Rs 1 crore are provided to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one woman borrower per bank branch of Scheduled Commercial Banks.
Started in April 5, 2016, the scheme has benefited 93,094 women entrepreneurs with outstanding loan of Rs 21,200 crore as of March 23.
This scheme, which has been extended up to 2025, covers SC/ST and/or women entrepreneurs, above 18 years of age, it said.
In case of non-individual enterprises, 51 per cent of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur and borrowers should not be in default to any bank/financial institution, it said.
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