Month: May 2021

Premium pay for discount brokers

Banking & Finance

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Compensations are moving northwards and how! Surprisingly, in a pandemic hit year, the take-home pay of Nithin and Nikhil Kamath, co-founders of discount brokerage firm Zerodha, has edged up to the ₹100 crore per annum mark making them the highest-paid promoters in India. Nithin’s wife, Seema Patil, who has been elevated from director to a whole-time director in the company will also get ₹100 crore.

According to documents filed by the company with the Ministry of Corporate Affairs, accessed by BusinessLine from research platform Tofler, Zerodha’s board approved the revised salaries on May 10. The board also approved using the surplus funds of up to ₹1,500 crore for mergers and acquisition.

Nithin will get every month a basic salary of ₹4.16 crore plus ₹2 crore as house rent allowance, ₹1.6 crore as ‘other perquisites’ and ₹41 lakh as ‘other allowances’. In addition, he will get a variable pay and a bonus, as decided by the board depending on the performance and policies of the company. Nikhil and Seema, too, get identical packages.

Top bracket

The Kamaths now join the elite league of high-earning start up founders like Vijay Shekhar Sharma (Paytm), Deepinder Goyal (Zomato), and Harsh Jain (Dream 11), who earn a salaries ranging between ₹3 crore and ₹6 crore per annum.

By comparison, top honchos of traditional firms have lower salaries. TCS’ Chief Executive Officer and Managing Director Rajesh Gopinathan took home about ₹20.36 crore in FY21, and Tata Sons chairman N Chandrasekaran drew a pay packet of ₹58 crore in FY20. Reliance Industries’ Mukesh Ambani took home ₹15 crore in FY20 and decided to forgo his entire compensation for fiscal 2021.

Zerodha has been wresting business from traditional brokers in the retail broking segment, and commands 19-20 per cent market share. In FY20, the company had registered a 15 per cent growth in revenue at ₹1,093.64 crore, and

made a profit of ₹442.3 crore. With a wealth of ₹24,000 crore, Nithin and Nikhil had topped the list of India’s self-made richest under 40, compiled by IIFL Wealth and Hurun India last year.

Rewarding years

When contacted Nithin told BusinessLine that the last two years years had been really good and profitable. “We are probably the largest bootstrapped start-up out there, generating profits with no external investors. Most founders today sell a small amount of their stakes to someone else to make money. And, because we’re not looking at selling stakes in the business to anyone, we have to take it out as salaries or as dividends.” He also clarified, “ But the resolution is only a provision. It’s not that we have taken that salary.”

Nicolas Dumoulin, Managing Director, Michael Page India, said since Zerodha was not a listed company it was up to the founders to define remuneration for themselves.

“It’s his own money, and they are not a listed company. Technically, it has to be approved by the board, and they must have held the majority of the shares, so in that sense, it is up to them how they want to define remuneration for themselves. On the other hand, if they want to go public, there needs to be a value they bring to the table otherwise the investors would question the governance rules. If they were to sell their stocks, they would get much more than that and no one would say anything about it,” Dumoulin said.

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Indian Bank posts ₹1,709-cr net in Q4

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Indian Bank on Friday reported a standalone net profit of ₹1,709 crore for the fourth quarter of FY21 as opposed to a net loss of ₹1,641 crore posted in Q4 of FY20.

It is to be noted that Allahabad Bank was amalgamated with Indian Bank with effect from April 1, 2020 and all the figures for FY20 were arrived at by aggregating the audited numbers of the two banks.

“Despite all the challenges this year, the bank has emerged a very strong, steady and consistent good performer. The bank has not only moved in the right direction but also made significant improvements in all the key parameters,” Padmaja Chunduru, MD and CEO of Indian Bank, said at the virtual press conference to announce the financial results.

The bank’s operating profit on a year-on-year basis grew by 6 per cent to ₹2,548 crore (₹2,401 crore) in Q4FY21. Net revenues (net interest income plus other income) on a Y-o-Y basis grew by 1 per cent to ₹5,078 crore (₹5,038 crore) while the non-interest income rose marginally to ₹1,744 crore (₹1,728 crore) during this period. The net revenue for full FY21 increased by 16 per cent to ₹21,745 crore.

Net NPAs down

Gross non-performing assets (GNPA), as a percentage of gross advances, stood at 9.85 per cent as of March 2021 down from 11.39 per cent as of March 2020. Net NPA also came down 3.37 per cent (4.19 per cent) during this period.

The total business grew 8 per cent to ₹9.28-lakh crore as of March 2021 from ₹ 8.57-lakh crore in the previous fiscal. Total deposits, on a Y-o-Y basis, grew by 10 per cent to ₹5.38-lakh crore (₹4.88-lakh crore). CASA deposits accounted for 42 per cent of the total deposits as of March 2021, primarily driven by a 32 per cent increase Y-o-Y in current account deposits and 12 per cent growth in savings account deposits. “This is one major synergy and benefit that has accrued from the amalgamation,” Chunduru said.

Its total advances on a Y-o-Y basis grew by 6 per cent to ₹3.90-lakh crore (₹3.68-lakh crore) as of March 2021.

For FY21, the bank’s total Capital Adequacy Ratio was at 15.71 per cent. “The CAR at 15.71 per cent as on March 2021 gives a lot of strength to the balance-sheet of the bank. The capital has always been very strong for the Indian bank, and we are continuing that strength post amalgamation also,” Chunduru added.

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City Union Bank posts ₹111-cr net

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City Union Bank (CUB) on Friday reported net profit at ₹111.18 crore for the quarter ended March 31. The private sector lender had reported a net loss at ₹95.29 crore during corresponding quarter previous year.

Operating profit on a Y-o-Y basis dropped 15 per cent to ₹284.7 crore (₹335.08 crore) during Q4FY21. The total income of the bank grew marginally to ₹1,121.43 crore (₹1,220.98 crore) during the comparable quarters while interest income fell by 6 per cent to ₹976 crore (₹1,042 crore).

For the full year, the bank’s net profit grew by 24 per cent to ₹592.82 crore (₹476.31 crore). For the year ended March 31, total income stood at ₹4,839.45 crore (₹4,848.54 crore).

Gross non-performing assets (NPA) in percentage terms increased to 5.11 per cent of the advances during Q4FY21 as against 4.09 per cent in the year-ago quarter. Net NPA also increased to 2.97 per cent (2.29 per cent) during this period.

The bank’s capital adequacy ratio (Basel III) as of March 2021 stood at 19.52 per cent.

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Karur Vysya Bank posts 24% growth in Q4 net

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Karur Vysya Bank (KVB) on Friday reported a 24 per cent year-on-year growth in net profit for the fourth quarter of FY21 at ₹104 crore supported by lower provisions for bad loans and contingencies. The bank reported a net profit of ₹84 crore in the year-ago quarter.

The bank’s provisions (other than tax) and contingencies fell by 84 per cent to ₹71.45 crore (₹429.27 crore).

Operating profit of the bank, on a YoY basis, fell by 50 per cent to ₹249.78 crore (₹499.83 crore) after expending ₹62 crore towards arrears payable under XI Bi-partite settlement (BPS) and interest on interest reversal of ₹25 crore as per an order of the Supreme Court.

For the full year, the bank’s net profit grew 52.76 per cent to ₹359 crore (₹235 crore) while operating profit during the period fell to ₹1,429 crore (₹1,761 crore).

Operating profit hit

The bank, however, said that various factors affecting the operating profit include arrear payment under XI BPS and corresponding provisions for various staff retirement benefits amounting to ₹245 crore in all in addition to the interest-on-interest reversal of ₹25 crore mentioned above.

Total business of the bank as on March 31 stood at ₹1.16 lakh crore (₹1.07 lakh crore). While gross advances of the bank stood at ₹52,820 crore (₹48,516 crore) as of FY21, total deposits grew to ₹63,278 crore (₹59,075 crore) during the period.

“Credit growth resulted from improved off take in retail and business segments as well as higher growth witnessed in the jewel loan portfolio, backed by digital processing and improved sourcing of loans through various channels,” the bank said in a release.

Gross NPA of the bank, on a YoY basis, improved to 7.85 per cent (8.68 per cent) as of March while net NPA improved by 51 bps and dropped to 3.41 per cent (3.92 per cent) during this period.

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RBI devolves ₹7,436 crore worth 2030 G-Sec on PDs

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The Reserve Bank of India (RBI) devolved about 53 per cent of the notified amount of ₹14,000 crore on primary dealers (PDs) at the auction of the benchmark Government Security (G-Sec/GS) maturing in 2030.

However, the auction of the other two G-Secs (4.26 per cent GS 2023 and 6.76 per cent GS 2061) sailed through.

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, observed that RBI set relatively higher cut-off rate for additional competitive underwriting (ACU) commission for PDs for the 2030 G-Sec, indicating that market participants were not too keen on buying the paper.

The ACU commission was 13 paise for 2061 G-Sec and 0.42 paise for 2023 G-Sec.

RBI devolved ₹7,436.458 crore worth of the 2030 G-Sec (coupon rate: 5.85 per cent) on PDs. It accepted bids aggregating ₹6,563.542 crore for this paper.

The central bank set a cut-off price of ₹98.97 (yield: 5.9937 per cent) for this paper against its previous closing price of ₹99.015 (5.9873 per cent). Bond yield and price are inversely related and move in opposite directions.

In the secondary market, the 2030 G-Sec closed at ₹98.90 (6.0035 per cent).

RBI accepted bids aggregating ₹3,550 crore for the 2023 G-Sec (against the notified amount of ₹3,000 crore). It accepted bids aggregating to the notified amount of ₹9,000 crore in the case of the 2061 G-Sec.

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How To Find The Assets And Liabilities Of The Deceased?

Personal Finance

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Planning

oi-Roshni Agarwal

|

In this Covid-ravaged situation, when nearly every family in some or the other way has been hit severely due to the pandemic and even if you have until now come unscathed, here in the story below we will discuss on ways to know the assets and investments of the deceased.

How To Find The Assets And Liabilities Of The Deceased?

How To Find The Assets And Liabilities Of The Deceased?

1. For mandatory insurance covers such as PMJJBY and PMSBY and other personally taken life and other covers:

If the person who has met with an unfortunate death was covered under some or the other insurance plan, his or heir nominee or heirs may get some finacial coverage as sum assured value.

Say for instance as in case of making the claims against the various policies that have been government mandated for account holders PMJJBY and PMSBY, you can confirm on the policy being issued to the person by having a look at the subscriber’s bank account statement.

If there is a deduction of Rs. 330 or Rs. 12 for PMJJBY and PMSBY, respectively, then certainly it is an investment towards these insurance policies, which the nominees can go and make claim against.

For other assets and liabilities, an extensive scan of bank statement of the last 3 years shall provide you with sufficient information on the various financials of the concerned person. It is advised that you keep his or her phone active for a sufficient timeframe as financial institutions keep sending the different updates.

Also, if your kin happened to be working in the organized sector then the EDLI scheme as part of the Employee Provident Fund will also become applicable and you can claim a maximum sum of Rs. 7 lakh under it.

Other assets such as mutual funds, stocks:

For stocks, mutual fund related asset idea, primarily the best way out shall be to scan the e-mail of the concerned person. As both the depository with which you are dealing for the share transactions and the mutual funds shall send a CAS statement which is sent over by the depositories, NSDL or CDSL.

Liabilities

Liabilities if any need to be also serviced and in case the borrower dies in the interim of the loan tenure, the liability to pay the outstanding sum lies with the co-borrower or the person who gave a guarantee for it. Else the financial institution has the right to forfeit the collateral which can be anything hypothecated with the bank for the purpose.
In such a case, what comes as handy or serves the co-borrower is the home loan insurance in which case the maturity amount covers the outstanding loan amount.

GoodReturns.in



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Reserve Bank of India – Tenders

Tenders

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Please refer to the captioned RFP issued through MSTC e-commerce portal on May 17, 2021 (Event No. RBI/Central Office/DIT/21/20-21/ET/758) and notification published on the Bank’s website www.rbi.org.in on May 17, 2021 inviting application from eligible vendors for supply, installation, maintenance of Computer Hardware, Peripherals and Application Software Development at RBI 2021-23 through e-tender route. The Pre-Bid meeting was held over Webex on May 27, 2021.

2. In this regard, a corrigendum and the response to the Pre-Bid Queries raised by participants in the Pre-Bid Meeting are issued. The same have been uploaded on MSTC e-commerce web portal.

Chief General Manager
Department of Information Technology
Date: May 28, 2021

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Bank credit growth declines to 5.6 per cent in March

Banking & Finance

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Bank credit growth decelerated to 5.6 per cent in March 2021 from 6.4 per cent a year ago, the Reserve Bank said on Friday.

On the other hand, aggregate deposits growth accelerated to 12.3 per cent in March 2021 from 9.5 per cent in the same month of the previous year.

Lower growth in credit vis-a-vis deposits led to decline in the all-India credit-deposit (C-D) ratio to 71.5 per cent in March 2021 from 76 per cent a year ago.

Bank credit grows 5.33%; deposits rise 10.94%

Combined credit by bank branches in top six centres (Greater Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata) declined marginally during 2020-21. These six centres together accounted for over 46 per cent of total bank credit.

“Bank branches in urban, semi-urban and rural areas, on the other hand, recorded 9.4 per cent, 14.3 per cent and 14.5 per cent credit growth, respectively, during the year,” the RBI said while releasing the ‘Quarterly Statistics on Deposits and Credit of SCBs: March 2021’.

Public sector and private sector banks recorded 3.6 per cent and 9.1 per cent credit growth, respectively, whereas lending by foreign banks declined during 2020-21.

Metropolitan branches, which account for over half of total deposits, recorded nearly 15 per cent growth during 2020-21.

The share of current account and savings account (CASA) deposits in total deposits increased to 44.1 per cent in March 2021 from 42.1 per cent a year ago.

“The share of private sector banks in total deposits and credit by SCBs (Scheduled Commercial Banks) increased during 2020-21 at the cost of public sector banks,” it said.

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Private sector banks increased share in deposits, credit at the cost of PSBs in FY21: RBI

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Bank credit growth decelerated while aggregate deposit growth accelerated in March even as the share of private sector banks in total deposits and credit of scheduled commercial banks (SCBs) increased during 2020-21 at the cost of public sector banks, according to the Reserve Bank of India (RBI).

Bank credit growth decelerated to 5.6 per cent year-on-year (yoy) in March from 6.4 per cent a year ago, according to RBI’s ‘Quarterly Statistics on Deposits and Credit of SCBs: March 2021’.

Public sector and private sector banks credit growth slowed to 3.6 per cent (4.2 per cent in March 2020) and 9.1 per cent (9.3 per cent), respectively, during 2020-21. Lending by foreign banks contracted 3.3 per cent vs 7.2 per cent growth

Combined credit by bank branches in top six centres (Greater Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata, which together accounted for over 46 per cent of total bank credit) declined marginally during 2020-21, the RBI said.

Deposit growth picks up

According to RBI data, credit by bank branches in metropolitan areas (includes all centres with population of 10 lakh and above) declined to 1.7 per cent in March 2021 from 4.8 per cent in March 2020. Bank branches in urban, semi-urban and rural areas, on the other hand, recorded 9.4 per cent (8.8 per cent in March 2020), 14.3 per cent (8.4 per cent) and 14.5 per cent (11.5 per cent) credit growth, respectively, during the year.

Aggregate deposits growth accelerated to 12.3 per cent yoy in March 2021 from 9.5 per cent a year ago.

Metropolitan branches, which account for over half of total deposits, recorded nearly 15 per cent growth during 2020-21 from 6.9 per cent a year ago. However, aggregate deposits of branches in rural and semi-urban areas declined to 6.9 per cent (15.5 per cent) and 9.3 per cent (12.3 per cent), respectively.

Aggregate deposits of branches in urban areas increased to 11.4 per cent (10.5 per cent).

RBI said the share of current account and savings account (CASA) deposits in total deposits increased to 44.1 per cent in March from 42.1 per cent a year ago.

Lower growth in credit vis-à-vis deposits led to decline in the all-India credit-deposit (C-D) ratio to 71.5 per cent in March from 76.0 per cent a year ago.

The central bank did not specify the market share gained by private sector banks in deposits and credit.

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Reserve Bank of India – Tenders

Tenders

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Please refer to the captioned RFP issued through MSTC e-commerce portal on May 17, 2021 (Event No. RBI/Central Office/DIT/22/20-21/ET/759) and notification published on the Bank’s website www.rbi.org.in on May 18, 2021 inviting application from eligible vendors for renewal of Annual Maintenance Contract (AMC) and Facility Management Service (FMS) for Computer Hardware and other Peripherals at Reserve Bank of India through e-tender route. The Pre-Bid meeting was held over Webex on May 24, 2021.

2. In this regard, a corrigendum and the response to the Pre-Bid Queries raised by participants in the Pre-Bid Meeting are issued. The same have been uploaded on MSTC e-commerce web portal.

Chief General Manager
Department of Information Technology
Date: May 28, 2021

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