Month: May 2021

HDFC Q4 net profit surges 42 per cent

Banking & Finance

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Housing Development Finance Corporation (HDFC) Ltd reported a 42.4 per cent jump in its standalone net profit at ₹3,179.83 crore for the fourth quarter of 2020-21.

Its standalone net profit was ₹2,232.53 crore in the fourth quarter of 2019-20.

For the full fiscal 2020-21, HDFC’s net profit however, declined 32.3 per cent to ₹12,027.3 crore versus ₹17,769.65 crore in 2019-20.

Also read: HDFC Bank unveils organisational changes to power future growth

“The profit numbers for the year ended March 31, 2021 are not comparable with that of the previous year. In the previous year, the corporation had recorded a fair value gain consequent to the merger of GRUH Finance with Bandhan Bank amounting to ₹9,020 crore,” HDFC said in a statement on Friday.

For the quarter ended March 31, 2021, HDFC reported a net interest income of ₹4,065 crore, which was 14 per cent higher compared to ₹3,564 crore in the previous year.

Net interest margin for the year ended March 31, 2021 stood at 3.5 per cent.

As at March 31, 2021, ₹4,479 crore is being restructured under the RBI’s Resolution Framework for Covid-19 related stress, amounting to 0.8 per cent of the assets under management.

Of the loans being restructured, 27 per cent are individual loans and 73 per cent non-individual loans.

Gross non-performing loans as at March 31, 2021 stood at ₹ 9,759 crore or 1.98 per cent of the loan portfolio.

During the quarter ended March 31, 2021, individual loan disbursements grew by 60 per cent over a year ago.

“The month of March 2021 witnessed the highest levels in terms individual receipts, approvals and disbursements. Growth in home loans was seen in both, the affordable housing segment as well as high-end properties,” HDFC said.

The board recommended a dividend of ₹23 per equity share of face value of ₹2 each for the financial year 2020-21.

It also approved the re-appointment of Keki Mistry as the Managing Director (designated as Vice Chairman and Chief Executive Officer) of HDFC for a period of three years with effect from May 7, 2021, subject to approval of the members at the ensuing AGM.

Further, the board approved issuance of Redeemable Non-Convertible Debentures (secured or unsecured) and any other hybrid instruments (not in nature of equity shares) up to ₹1.25 lakh crore during a one year period.

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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015





Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.





With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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Public sector banks losing market share in loans to private sector rivals

Banking & Finance

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The proposed privatisation of two public sector banks (PSBs) in FY22 could accentuate the already declining market share of PSBs in loans, with the share of private sector banks (PvSBs) expected to go up further.

A realignment of market share in loans has been happening in the banking space over the last four years.

PSBs’ (or state-owned Banks) market share in loans declined to around 59 per cent (of all scheduled commercial banks’ outstanding credit) in December 2020 against around 65 per cent in December 2017.

However, during this period, PvSBs market share rose to around 36 per cent from around 30 per cent, going by Reserve Bank of India data.

The aforementioned development comes in the backdrop of PSBs turning cautious on loan growth in the face of stress in their balance sheets and IDBI Bank getting classified as a PvSB following the Life Insurance Corporation of India becoming its promoter with management control in January 2019.

Consolidation exercise

PSBs loan growth also slackened as some of them focussed their energies on streamlining operations following mega-mergers within the grouping.

Dena Bank and Vijaya Bank got amalgamated with Bank of Baroda with effect from April 1, 2019.

The aforementioned consolidation exercise was followed by mega-mergers in PSB space in FY20-21.

With effect from April 1, 2020, Oriental Bank of Commerce and United Bank of India merged with Punjab National Bank; Syndicate Bank merged with Canara Bank; Andhra Bank and Corporation Bank merged with Union Bank of India; and Allahabad Bank merged with Indian Bank.

During the last four years, PvSBs pressed ahead with loan growth. Many larger and mid-sized PvSBs were neither constrained by capital nor weighed down too much by bad loans.

Realignment & privatisation

Now, if the Government makes good on its Budget announcement of privatising two PSBs in FY22, the market share of State-owned banks could shrink further by about 3-4 percentage points, with the share of PvSBs correspondingly going up.

In 2018, Uday Kotak, Managing Director & CEO, Kotak Mahindra Bank, observed that private sector banks’ market share will go up significantly and be on a par with that of public sector banks in the next five years.

“…This major mega trend in the redefinition of the industry structure is something which is playing out as we talk,” Kotak then said.

Banking expert V Viswanathan assessed that PvSBs are focussing on credit to small and medium enterprises (which offer collateral), wholesale trade, home loans and related top-up loans, loan against property, auto loans and personal loans, among others, in a big way.

Meanwhile, small finance banks have grown their market share in loans to about 1 per cent in December 2020 from about 0.22 per cent in December 2017. Foreign banks’ share came down to 3.98 per cent from 4.44 per cent.

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To get RBI funds at 4%, can lend at up to 20%, BFSI News, ET BFSI

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Last year it was fintech firms that got a boost from the digitisation wave in banking, this time small finance banks (SFBs) are getting a push.

The Rs 10,000-crore support from the Reserve Bank of India (RBI) as part of its pandemic relief measures announced on Monday is set to make small finance banks more competitive. The SFBs would get such funds at 4% for three years, which is significantly lower than their average cost of lending. The new facility would help them to get about 1-1.5% positive carry on the borrowed funds, even after investing the same amount into government securities as mandated by the central bank.

This window is an opportunity for SFBs with surplus g-secs to turn competitive as the lenders can deploy the available fund at a higher spread. Small banks generally lend at rates in the range of 10-20% depending on borrowers’ profile.

The banking system including small finance banks is sitting on a cash surplus of Rs 7.12 lakh crore.

Banks carrying surplus short-term securities could liquidate it and deploy the funds for lending.

SLTRO boost

Reserve Bank of India (RBI) has announced a special long-term repo operation (SLTRO) for small finance banks, amid the second wave of Covid cases in the country. The central bank will conduct the special operation of Rs 10,000 crore at repo rate, Das said.

“Small finance banks (SFBs) have been playing a prominent role by acting as a conduit for the last-mile supply of credit to individuals and small businesses,” Das said during an unscheduled address.

“To provide further support to small business units, micro and small industries, and other unorganised sector entities adversely affected during the current wave of the pandemic, it has been decided to conduct special three-year long-term repo operations of Rs 10,000 crore at repo rate for the SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower,” Das said, adding that the facility will remain open till October 31, 2021.

Priority loans

The RBI also has decided to allow the classification of priority sector lending for loans given by small finance banks (SFB) to micro-finance institutions (MFI) for on-lending to individuals.

The decision has been taken to address the liquidity issues of MFIs amid the severe Covid crisis.

RBI Governor Shaktikanta Das said: “In view of the fresh challenges brought on by the pandemic and to address the emergent liquidity position of smaller MFIs, SFBs are now being permitted to reckon fresh lending to smaller MFIs (with asset size of up to Rs 500 crore) for on-lending to individual borrowers as priority sector lending.” This facility will be available up to March 31, 2022.



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Multibagger Stock Ideas To Buy In India 2021

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Personal Finance

oi-Roshni Agarwal

|

Over the last one-year after markets witnessed bloodbath due to the pandemic crisis, there have been stupendous gains with Nifty scaling new high of 15431.75 on February 16, 2021. Now as the markets are still 5% down from peak, here we suggest few of the stocks that have or have the potential to turn into multi-baggers, meaning reaping huge returns and enabling you to generate good enough wealth, by holding them for some meaningful time.

What are multibaggers stocks?

In numeric terms which hold far more relevance in today’s world, multi-bagger stocks are those that can generate over 100% return or just double in price. And there are several triggers that aid in a stock to double in price.

Triggers for a stock to turn into a multi-bagger stock/ How To Identify A Stock To Turn Out to be A Multibagger?.

There could be a host of factors aiding the rise of a particular share.

1. Industry headwinds say in the pandemic times after a steep correction pharma shares witnessed a good buying and hence traction in their share price.

2. On potential growth, MFs and other foreign portfolio investors (FPIs) and foreign institutional stocks (FIIs) upping the stake in the counter.

3. Low or no debt for a company is also a plus

4. Then there is earnings and valuation that also come into play for determining the stock’s possible rally.

5. Sound management and strategy for the company’s growth has also its part to play.

6. Economic moat i.e. any entry barrier that prevents competition into the space that gives the company the authority on product pricing and hence not suffer in adverse times.

7. Stocks with High return ratios typically return on equity (RoE) that point to efficient deployment of capital should also be chosen. But remember here that such companies should have low equity base that triggers the stock to become a multi-bagger.

Choosing multi-bagger stocks from Charts

Choosing multi-bagger stocks from Charts

Based on the charts the stock pick for multi-bagger returns can be done basis the Dow Theory and here what is aimed at is those stocks which after bottoming out ( Say as in the recent past of March 2020 correction ) have recovered swiftly on a month basis.

Now coming to multibagger stocks or stocks with potential to turn into multibaggers:

Multibagger stocks to buy in India in 2021

Multibagger stocks to buy in India in 2021

1. Reliance Industries- (Potential to scale to Rs. 10,000 in 2-3 years time)

This is one heavyweight that you definitely be picking at any steep correction as after the steep bottoming out for the reversal to happen on the Nifty , RIL contributed a big 1000 points and now from current levels of around Rs. 1940 it has the potential to scale to Rs. 10000 in 2-3 years time, making 5 times surge in stock price.

2. Bajaj Finance:

2. Bajaj Finance:

Actually, when looking at a multibagger stock, brands of importance which need no introduction work. For a stock like Bajaj Finance which has over the years established its brand equity it is being cited by experts that as the stock is trading over Rs. 5000, the journey to Rs. 10000, i.e. the next 5000 journey shall not be very difficult and in fact will be highly rapid. Further, the stock of Bajaj Finance is seen to be the next ‘MRF’ stock. So ‘higher low’ can be sought for a stock to get into it. And another factor that can be looked at is for the upstrending stock as is the case with Bajaj Finance.

3. Divis Labs:

3. Divis Labs:

Pharma pack is expected to outperform all other sectors in the next 3-4 years. And as this stock hasn’t given any significant correction over time, this can be another good pick.

4. Infosys:

4. Infosys:

This is one HDFC Securities top pick for 2021 and has been performing overwhelmingly. Now due to increased demand to go digital, cloud technology etc. the company is betting on huge deal wins. Furthermore what comes in its favour is the company’s debt free balance sheet as well as potential to generate healthy cash flow.

5. SBI Life Insurance:

5. SBI Life Insurance:

The life insurance industry amid the pandemic is booming and this private life insurer commands the highest distribution reach which enables it to tap a broader market base. The other positives for the company are high agent productivity as well as SBI Banca association. There is forecasted Cagr of 11% over FY20-22E. New Premium income for the FY22 period is expected to surge to Rs. 54,424.

The stock has showed patterns of continuous uptrend to be a good pick.

GoodReturns.in



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Reserve Bank of India – Press Releases

Press Releases

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April 14, 2015





Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.





With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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Reserve Bank of India – Tenders

Tenders

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Estate Cell, BKC, Reserve Bank of India has invited open e-tender for “Design, Supply, Installation, Testing and Commissioning (DSITC) of Server Gateway Architecture based IP PABX system at Bank’s Office Building, Bandra Kurla Complex in Mumbai” through MSTC portal (www.mstcecommerce.com/eprochome/rbi) and Bank’s website.

2. However, due to the prevailing extra ordinary circumstances in the wake of Corona virus outbreak, the schedule of tender activities for the captioned work has been further revised as under:

a. Name of the work : Design, Supply, Installation, Testing and Commissioning (DSITC) of Server Gateway Architecture based IP PABX system at Bank’s Office Building, Bandra Kurla Complex in Mumbai
b. E-tender Number : RBI/Mumbai/Estate/422/20-21/ET/659
c. Last date of submission of Pre-qualification papers : May 20, 2021 till 05.00 PM
d. Pre–bid meeting : Offline May 31, 2021 at 11.00 AM at Estate Cell, Bandra Kurla Complex, C-7, 3rd floor, BKC, Mumbai-400051
e. Last date of Submission of EMD : June 08, 2021 till 5.00 PM
f. Close Bid date and time : June 10, 2021 at 2.00 PM
g. TOE start time (Opening of Part I – Technical Bid) : June 10, 2021 at 3.30 PM onwards

3. All the other terms and conditions mentioned in the tender remain unchanged.

Regional Director
RBI, Maharashtra & Goa

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Reserve Bank of India – Press Releases

Press Releases

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In the underwriting auctions conducted on May 07, 2021 for Additional Competitive Underwriting (ACU) of the undernoted Government securities, the Reserve Bank of India has set the cut-off rates for underwriting commission payable to Primary Dealers as given below:

(₹ crore)
Nomenclature of the Security Notified Amount Minimum Underwriting Commitment (MUC) Amount Additional Competitive Underwriting Amount Accepted Total Amount underwritten ACU Commission Cut-off rate
(paise per ₹ 100)
5.63% GS 2026 11,000 5,502 5,498 11,000 3.37
GoI FRB 2033 4,000 2,016 1,984 4,000 4.50
6.64% GS 2035 10,000 5,019 4,981 10,000 4.75
6.67% GS 2050 7,000 3,507 3,493 7,000 13.40
Auction for the sale of securities will be held on May 07, 2021.

Ajit Prasad
Director   

Press Release: 2021-2022/175

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Muthoot Finance ties up with NIRA to offer personal loans

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Muthoot Finance Limited has announced its collaboration with fintech NIRA as part of its strategy to strengthen its digital footprint.

Through this partnership, salaried customers can avail a personal loan of up to ₹1 lakh from Muthoot by downloading the NIRA app from Google’s Play store.

NIRA is a Bengaluru-based fintech offering small ticket personal loans to salaried workers from India’s middle class. They offer loans to borrowers starting at incomes as low as ₹12,000 per month. This partnership will help Muthoot Finance build its unsecured lending book.

Pradeep, Head – Personal Loan, Muthoot Finance said, “We are excited to have this tie-up to enhance our personal loan growth with quality. Muthoot Finance is also aggressively moving towards an end-to-end digital process, and this tie-up is one of the initiatives in the same direction.”

Rohit Sen, CEO and co-founder at NIRA, said: “Muthoot is a trusted brand Pan-India, and trust is a vital ingredient in the provision of financial services. This partnership bolsters our ability to continue our mission of providing accessible formal credit at affordable rates and in a timely manner to India’s mass market.”

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PF Withdrawal For Property Investment; Is It A Wise Choice?

Personal Finance

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How much will EPFO pay?

Reason for PF Withdrawal Limit Withdrawal
Buying a plot Basic salary of 24 months and DA
Constructing a house Basic salary of 36 months and DA
Buying a house Basic salary of 36 months and DA
Home improvement/renovation Basic salary of 12 months and DA
Repayment of housing loan Basic salary of 36 months and DA

PF withdrawal for construction of a house

PF withdrawal for construction of a house

Individuals who have been a member of the EPFO for five years are entitled to take a portion of their PPF money to build their houses. The house must be declared in the name of the member or his or her spouse before the money can be withdrawn. Your provident fund deposit will be used to fund the building of your home on a previously owned estate. This bid, however, is only valid if your construction starts within the first six months of withdrawal and is completed within a year.

The lowest of their basic salary and dearness allowances for 24 months, or the actual cost towards the purchase of a plot and building, or the total of employer and employee contribution along with the interest, will be taken into account to calculate the amount for those who want to withdraw money from the PPF to build a home.

PF withdrawal for repaying Home Loan

PF withdrawal for repaying Home Loan

You can also withdraw a limit of three years of your annual compensation balance from your provident fund deposit to pay off an unpaid home loan in your or your spouse’s name. To withdraw the money, however, you must have completed at least three years of service. If the house is registered in his or her name or kept jointly, the PF member is allowed to withdraw up to 90% of the corpus to repay the unpaid home loan.

The provident fund scheme allows you to withdraw funds for any of the above purposes, including repaying the outstanding balance of a home loan taken out by you or your spouse. The total sum cannot be more than 36 months’ basic salary plus DA.

PF withdrawal for renovating and reconstructing a house

PF withdrawal for renovating and reconstructing a house

Employees will take money out of their EPF accounts to renovate and rebuild their homes. Furthermore, even if you want to renovate a pre-owned home, you can take money out of your provident fund account. However, the maximum sum that can be taken out for a property upgrade cannot exceed one year’s income, and you can only take another withdrawal after ten years.

Even if you haven’t taken advantage of the withdrawal facility for the purchase or construction of your home, you can use it to upgrade it. The sum you will withdraw for improvements or additions to your current home is limited to 12 months’ minimum salary and DA, according to the expense of the improvements.

Should you withdraw PF money to purchase a home?

Should you withdraw PF money to purchase a home?

Although it is possible to withdraw PF funds to purchase a home, experts believe that this is not a wise decision. This fund’s main aim is to provide some financial security during your retirement years, and it’s best if it’s kept that way. Compounding works in your favor over the working years if you keep adding to this corpus and do not withdraw money in the interim. That means you’ll have a sizable sum in your hands when you retire if you don’t use it for anything else. Begin saving money for a down payment over three to five years. If home prices rise or your investments do not perform as intended, you may want to postpone your home purchase for a year or two. Once you’ve made the down payment, apply for a home loan, but better not to touch your EPF funds unless you don’t have any other option.



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