Month: May 2021

RBI Annual Report: Number of frauds in private banks up 21% in FY21

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Overall, the number of frauds in the banking system declined 15% y-o-y by number and 25% y-o-y in terms of value during FY21.

Even as number of fraud cases have declined in the banking system during 2020-21 (FY21), instances of frauds have increased in the private banks, RBI said in its annual report on Thursday. While private banks reported a rise of 21% year-on-year (y-o-y) in the number of frauds during FY21, public sector banks (PSBs) have reported a decline of 34% y-o-y during the same period. In value terms, the private banks have reported a rise of 35% y-o-y in frauds during FY21, and PSBs have reported a decline of 45% y-o-y in the similar period. Overall, the number of frauds in the banking system declined 15% y-o-y by number and 25% y-o-y in terms of value during FY21.

If an account is declared as fraud, banks need to set aside 100% of the outstanding loans as provisions, either in one go or spread over four quarters, as per RBI norms. According to data shared by the central bank, 59.2% of the total value of frauds were reported by public sector banks, followed by private sector banks at 33.5% during 2020-21. Last year, 80% of the total value of frauds were reported by public sector banks and 18.4% by the private sector banks.

As per RBI’s annual report, the average time lag between the date of occurrence of frauds and the date of detection was 23 months for the frauds reported in 2020-21. However, in respect of large frauds of Rs 100 crore and above, the average lag was 57 months for the same period. “In terms of area of operations, frauds have been occurring predominantly in the loan portfolio (advances category), both in terms of number and value,” , RBI said.

Among the key things which tops the agenda of RBI in FY22, the central bank is aiming at enhancement of fraud risk management system, including improving efficacy of early warning signal (EWS) framework. The regulator also wants to strengthen fraud governance and response system. This includes augmenting the data analysis for monitoring of transactions, introduction of dedicated market intelligence (MI) unit for frauds and implementation of automated unique system generated number for each fraud.

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RBI Annual Report: Asset quality of banks needs to be closely monitored, warns RBI

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RBI also said that the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020 may also put stress on banks’ financial health.

The Reserve Bank of India (RBI) on Thursday said that asset quality of the banks would need close monitoring along with their preparedness for higher provisioning in coming quarters.

In its semi-annual financial stability report, RBI had earlier said that the bad loan ratio of banks could rise to 13.5% under the baseline stress scenario by September 2021. The regulator has cautioned banks as lenders will have to show true picture of bad loans after Supreme Court lifted interim stay on classifying non-performing assets (NPA) in March 2021. RBI also said that the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020 may also put stress on banks’ financial health.

Last year, RBI had announced a six-month moratorium for all term loan borrowers in the wake of Covid impact on borrowers. The Supreme Court had directed lenders to waive compound interest of the borrowers during the moratorium period. The regulator is of the view that banks are better positioned than before in managing stress in their balance sheets thanks to higher capital buffers, improvement in recoveries and a return to profitability. “Stress tests indicate that Indian banks have sufficient capital at the aggregate level even in a severe stress scenario. Bank-wise as well as system-wide supervisory stress testing provide clues for a forward-looking identification of vulnerable areas,” RBI said in its annual report 2020-21 released on Thursday.

The report, however, highlighted that gross NPA ratio of banks decreased to 6.8% by December 2020 from 8.2% in March 2020. Prudent provisioning by banks, even over and above regulatory prescriptions for accounts availing moratorium and undergoing restructuring, resulted in an improvement in the provision coverage ratio (PCR) of banks. Provision coverage ratio has improved to 75.5% at December-end 2020 from 66.6% in March 2020. Adjusting for write offs, the PCR was 88%, up from 81.3% in March 2020.

The capital to risk-weighted assets ratio (CRAR) of banks rose to 15.9% by end-December 2020 from 14.8% at end-March 2020. The capital adequacy ratio of banks was aided by capital raising from the market by public and private sector banks, and retention of profits.

The report also said that gross NPA ratio for non-banking financial institutions (NBFCs) improved to 5.7% in December 2020 from 6.8% in March 2020. Similarly, the capital adequacy ratio of NBFCs marginally improved to 24.8% in December 2020 from 23.7% during the same period last year.

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UCO Bank Q4 net jumps nearly fivefold to Rs 80 crore

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The bank, in a stock exchange filing, informed that its board of directors approved the proposal for raising of equity capital aggregating to Rs 3,000 crore through various modes such as FPO, QIP and preferential issue, subject to necessary regulatory approvals.

State-run UCO Bank on Thursday reported a nearly five-fold year-on-year jump in its net profit to Rs 80.03 crore for the fourth quarter of FY21, from Rs 16.78 crore in the same period previous fiscal, as its operating profit grew 26% y-o-y.

The lender, which is still under the Reserve Bank of India’s Prompt Corrective Action framework, showed significant improvement in its asset quality during Q4 as its NPAs in absolute terms fell 41% y-o-y to Rs 1,1351.97 crore. The NPA ratio stood at 9.59%, which was 718 basis points down y-o-y. The gross NPA ratio decreased 21 bps on a quarter-on-quarter basis from 9.80%.

The bank, in a stock exchange filing, informed that its board of directors approved the proposal for raising of equity capital aggregating to Rs 3,000 crore through various modes such as FPO, QIP and preferential issue, subject to necessary regulatory approvals. The capital adequacy ratio stood at 13.74% (under Basel III), with the common equity tier-I ratio at 11.14% as on March 31.

Talking to FE, MD & CEO AK Goel attributed the sharp rise in the net profit to significant rise in operating profit, interest income and non-interest income.

Operating profit stood at Rs 1,532.54 crore, against Rs 1,216.60 crore for the same period a year ago. Net interest income rose 12.6% y-o-y to Rs 1,412.60 crore, while non-interest income saw an over 78% y-o-y growth to Rs 1,370.43 crore.

Total advances stood at Rs 118,404.81 crore as on March 31, 2021, against Rs 114,961.44 crore as on March 31, 2020, registering a growth of 3%. At the end of Q4FY21, net interest margin stood at 2.70, 12 bps up from 2.58% in same period of FY20.

The provision coverage ratio increased to 88.40% as on March 31, from 85.46% in the year-ago period. The provision for NPAs declined by 29.33% y-o-y at Rs 769.81 crore, against Rs 1,089.26 crore during Q4FY20.

During Q4, the lender’s fresh slippages stood at around Rs 2,449 crore. “Fresh slippages came primarily from retail, agriculture, MSME and large corporate,” Goel said.

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RBI Annual Report: Worst seems to be over for loan growth

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As per RBI’s annual report, banks’ credit-deposit ratio moderated to 72.4% in 2020-21 from 76.4% a year ago, largely reflecting the subdued credit demand conditions in the economy.

After hitting a three-year low of 5.1% in the first half of FY21, the credit growth gained pace from November 2020 as the economy started opening up after pandemic-triggered lockdowns. In its annual report for the nine-months ended March 2021, the Reserve Bank of India (RBI) said the worst was over for the credit growth.

The positive momentum in credit offtake since November 2020 reflected recovery in economic activity, which was further supported by the cumulative reduction in the policy repo rate. Loan growth of banks was impacted during the first half of the fiscal 2021 (H1FY21) and remained at three-year low of 5.1% till October, 2020, but it improved to 5.6% on a year-on-year (y-o-y) basis till March 2021.

“A gradual pick-up in the economic activity during the second half of 2020-21 pulled up credit growth,” the RBI said on Thursday. Going forward, accommodative liquidity conditions and interest rates, several growth enhancing measures announced by the government and commencement of the mass vaccination drive are likely to nurture the recovery, which, in turn, is expected to have a favourable bearing on credit demand and supply, the report said.

Among bank groups, public sector banks registered a non-food credit growth of 3.1% in March 2021, compared to 3.4% a year ago. However, the credit extended by private sector banks grew by 9.6%, compared to 13.9% a year ago.

In line with RBI’s view, many lenders are expecting better credit growth in the current financial year (FY22) on the back of economic recovery forecasts. For instance, State Bank of India (SBI) hopes to grow its loan book by 10% in FY22, despite less than 5% credit growth in FY21. After declaring March quarter earnings, chairman Dinesh Kumar Khara said, “The bank may register a credit growth of around 10% in FY22 as the bank’s credit growth is normally 1% above India’s GDP.”

As per RBI’s annual report, banks’ credit-deposit ratio moderated to 72.4% in 2020-21 from 76.4% a year ago, largely reflecting the subdued credit demand conditions in the economy.

During FY21, the slowdown in banks’ credit growth was broad-based across all major sectors, except agriculture. According to data on the sectoral deployment of bank credit, the loan growth to agriculture and allied activities accelerated to 12.3% in March 2021, compared to 4.2% a year ago. Credit to industry decelerated marginally to 0.4%,compared to 0.7% a year ago.

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This Cryptocurrency Valued At Around Rs. 5 Can Be A Good Buy: Know All About It

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Investment

oi-Roshni Agarwal

|

Yes while the largest and most popular cryptocurrency Bitcoin is priced in lakhs (presently at over Rs. 29 lakhs), you can start your crypto investment journey by buying a lesser priced digital currency. Here we are talking about TRON (Symbol: TRX) which at 2:55 pm BST on May 27 is priced at Rs. 5.94.

This Cryptocurrency Valued At Around Rs. 5 Can Be A Good Buy: Know All About It

This Cryptocurrency Valued At Around Rs. 5 Can Be A Good Buy: Know All About It

How the TRON cryptocurrency came into existence?

The TRON digital token came into existence on implementation of Justin Sun ideas. With the ability of its developers to code in any of the high level language,TRON is gaining an edge over its competitors including Ethereum. Also, via the improved TPS, it is able to offer a higher throughput that even surpasses the likes of Bitcoin and Ethereum.

What is TRON cryptocurrency?

This is a decenralised blockchain ecosystem aiming to overhaul the entertainment and digital content sharing ecosystem. The native token of the system is TRX or Tronix.

Use cases of TRON

You are allowed to share content with others using the TRON ecosystem.

Also, you are offered compensation for the content and data that you create.

The functionality or the way in which TRON cryptocurrency monetizes user data is different from the method adopted by other social media sites including Facebook for that matter. In the case of TRON, you as a creator of content have full ownership of it and shall be compensated.

Now this TRON will lead what is precisely being referred to as Web 3.0 that will help people use internet- as a decentralized open network.

Price prediction TRON in INR

As per the platform digitalcoinprice.com, year by year price prediction of TRON in INR is as follows:
Year Tron price (INR)
2021 9.38
2022 10.5
2023 12.3
2024 14.5
2025 17.09
2026 21.75
2027 23.94
2028 26.44

So, given the current price of TRON of around Rs. 16, the prices are seen to double by 2022 i.e. in a 1-year time frame.

Another view is that as the chart suggest formation of a double-bottom, the TRON prices are to break out of its downward trend and can rally up to 40 percent if such a situation occurs. In the international markets, the sell-off in crypto which got triggered on May 19 sent the currency TRON to a low of $0.05.

Where and How to Buy TRON cryptocurrency in India?

Several of the renowned and safe cryptocurrency exchanges including the likes of Zebpay, WazirX and buyucoin among others allow you to buy TRON from their platform.

Supposing you have narrowed down on Zebpay to make your TRON purchase. Here are the steps:

1. Register for an account with Zebpay

2. You need to complete the KYC or Know your customer requirement with the exchange.

3. Link you bank account for making crypto purchase for the first time over the platform.

4. Cryptocurrency like bitcoin can also be purchased in fractions.

What makes TRON cryptocurrency a good buy?

Backed by the blockchain technology, the TRON cryptocurrency has the functionality which enables it to host multiple decentralised applications. Also, its future potential of leading the Web 3.0 referred above as well as its affordable pricing makes it a good buy.

GoodReturns.in



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First tranche of 2015 Sovereign Gold Bonds to be redeemed at ₹4,837 per unit against ₹2,684 issue price

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Investors in Sovereign Gold Bonds (SGB) 2015-16 Tranche I will get bumper returns, going by the redemption price set by the Reserve Bank of India.

The central bank on Thursday said the redemption price for the early redemption of SGB Tranche I, issued in November 2015, will be ₹4,837 per unit of SGB.

This translates into an appreciation of about 80 per cent over the issue price of ₹2,684 per unit of SGB.

The Centre had come up with the SGB scheme in 2015. It issued a Gazette Notification on it on October 30, 2015.

The RBI, in a statement, said the redemption price for the early redemption due on May 30 shall be ₹4,837 per unit of SGB and payable on May 29.

As per the terms and conditions of the issuance of Sovereign Gold Bonds, 2015-16, the bonds shall be repayable on the expiration of eight years from the date of issue.

Pre-mature redemption of the bond is allowed from fifth year of the date of issue on the interest payment dates.

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Reserve Bank of India – Press Releases

Press Releases

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The following State Governments have offered to sell securities by way of an auction, for an aggregate amount of ₹19,550 Cr. (Face Value).

Sr. No. State/ UT Amount to be raised
(₹ Cr)		 Additional Borrowing (Greenshoe) Option (₹ Cr) Tenure (Yrs) Type of Auction
1. Andhra Pradesh 1000 – 19 Yield
1000 – 20 Yield
2. Bihar 2000 – 6 Yield
3. Haryana 2000 500 12 Yield
4. Jammu & Kashmir 800 – 15 Yield
5. Kerala 1000 – 13 Yield
6. Maharashtra 1500 500 10 Yield
1000 – 11 Yield
7. Nagaland 250 – 10 Yield
8. Rajasthan 1000 – 10 Yield
500 – 20 Yield
500 – Re-issue of 7.03% Rajasthan SDL 2030 issued on February 12, 2020 Price
9. Tamil Nadu 1500 – 25 Yield
1500 – 30 Yield
10. Telangana 1000 – 20 Yield
11. West Bengal 3000 – 7 Yield
  Total 19550      

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 01, 2021 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on June 01, 2021 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.

In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.

For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at same/different rates of yield or prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield /minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹10,000.00 and multiples of ₹10,000.00 thereafter.

The results of the auction will be announced on June 01, 2021 (Tuesday) and payment by successful bidders will be made during banking hours on June 02, 2021 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. For the new securities, interest will be paid half yearly on December 02 and June 02 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Ajit Prasad
Director   

Press Release: 2021-2022/277

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Corrigendum – Empanelment of Tailoring Firms for stitching work at Reserve Bank of India, College of Agricultural Banking, University Road, Pune

Tenders

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Date of issue of the tender: March 31, 2021.

Your attention is invited to the following amendments in the schedule of the captioned tender:

Start Bid Date March 31, 2021 at 10:00 AM
Last date for obtaining applications June 04, 2021 till 05:00 PM
Last date for Submission of bids June 07, 2021 till 10.30 AM
Bid opening Date June 07, 2021 at 11.00 AM

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EPFO Unveils Electronic Facility For Principal Employers : Know All

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Personal Finance

oi-Roshni Agarwal

|

Employee Provident Fund Organisation has come up with a new feature for principal employers to keep a tab on the compliances of their employees that are in service through contractors.

EPFO Unveils Electronic Facility For Principal Employers : Know All

EPFO Unveils Electronic Facility For Principal Employers : Know All

All about the EPFO’s new service

Through this facility the employers that are employing employee via contractors can add the details of contractors together with contact employees at the organisation’s portal https://unifiedportal-emp.epfindia.gov.in/epfo/.

How will the facility help?

The move will enable principal employers to check the amount of wage on which the EPF money has been remitted by the contactor as against the wages as well as employer’s share paid as part of the contract to the contractor.

The central government run the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) and Atmanirbhar Bharat Rojgar Yojana (ABRY) schemes as part of which contractors can claim both the employee’s as well as employer’s share of EPF contribution from the centre.

Likewise, now principal employers have been extended this facility using which they can check the benefits claimed by their contractors from the centre for the contract employees as well as can oversee their payments to contractors.

GoodReturns.in

Story first published: Thursday, May 27, 2021, 19:12 [IST]



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Suryoday Small Finance Bank Q4 net loss widens to ₹43 crore

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Suryoday Small Finance Bank’s (SSFB) net loss widened to ₹43 crore in the fourth quarter ended March 31, 2021 against ₹15.5 crore in the year ago period.

Interest reversal on account of gross non-performing assets (GNPAs) and higher one-time floating provision are among the reasons for the widening of the loss.

Net interest income of the bank, which got listed on the NSE and BSE on March 26, 2021, was down 56 per cent year-on-year at ₹57 crore (₹130 crore in the year ago period).

However, other income jumped 46 per cent yoy to ₹35 crore (₹24 crore).

R Baskar Babu, MD & CEO, said: “We had interest reversal because of GNPAs. As an abundant caution, we maintained substantially higher liquidity.

“There is a negative carry on account of this excess liquidity. And we continue to maintain conservative provisions.”

Babu emphasised that post the end of the first wave of pandemic, business activity across states started moving towards normalcy, which is reflected in the bank’s highest ever quarterly disbursement of ₹1,058 crore in the reporting quarter.

“However, with the advent of the second wave of Covid, towards the fag end of the quarter and imposition of the lockdowns across multiple states, the business activity again came to halt in a very short span of time.

“With the pause on business activity across States, we expect the collection efficiency to remain volatile in the near term,” the SSFB chief said.

With the lifting of the interim stay on asset classification standstill by the Supreme Court, GNPAs jumped to 9.4 per cent of gross advances (₹394 crore in absolute terms) as at March-end 2021 against 2.79 per cent as at March-end 2020.

Net NPAs rose to 4.70 per cent of net advances against 0.57 per cent.

The bank restructured portfolio aggregating ₹136.2 crore in the year ended 31 March 2021, representing 3.3 per cent of advances.

Deposits were up 14 per cent yoy and stood at ₹3,256 crore as at March-end 2021. Gross Loan Portfolio increased 13 per cent yoy to ₹4,206 crore.

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