‘AltiFi, stands for both “Alternative Financial Investments” and “Alternative Fixed Income”. Investors will get access to debt capital markets and a range of debt instruments across bonds, securitised instruments and alternative investment funds’ units.
Investors can invest as low as Rs. 10,000 in debt papers.
Northern Arc said, it targets to bridge the gap of access to alternative investment assets and enable individual investors across the country to make direct debt investments at the click of a button.
Currently, individual investors have limited avenues to invest directly in debt instruments of small and mid-sized institutions. Northern Arc said it will bring together its 12 years of experience and well-tested proprietary risk models to create curated and pre-screened assets on the platform. It will also deploy AI and data analytics at scale to gather market intelligence and help investors make the most profitable and risk-adjusted investment calls.
Bama Balakrishnan, COO, Northern Arc said, “AltiFi is our attempt to offer unique debt investment opportunities to individual investors and family offices. Through AltiFi, investors will have access to a diverse range of debt products, in emerging sectors, that were hitherto available only to institutions so far. In India, debt investment opportunities are not accessible like the way listed equity is, and many investors who can potentially subscribe to these debt papers are either not aware of it or don’t know where to buy it from. We aim to change that with AltiFi.”
Banks in the European Union must have a 10-year plan spelling out how they will deal with environmental, social and governance (ESG) risks to their bottom line, the bloc’s banking watchdog said on Wednesday.
Increasing volumes of money are going into climate-friendly investments and regulators want investors to have a reliable snapshot of a company’s green credentials.
A report from the European Banking Authority (EBA) on Wednesday set out recommendations for banks and their supervisors for approaching ESG risks and help the EU meet its goals of cutting carbon emissions by 2050.
Banks should plan strategically over a period of at least 10 years to show their resilience to different scenarios, disclose strategic ESG objectives, and assess the need to develop sustainable products, EBA said.
Climate risks can include “physical” or weather-related events like floods, and “transition” risks from sudden changes in asset values.
The EBA report looks at the second pillar of core banking rules that assess how risks at a lender are managed.
It is expected to set out detailed guidance for the third pillar relating to disclosures of risks later in the year. Work on pillar one or whether actual capital requirements need changing to reflect ESG risks, is expected at a later date.
The report builds on existing EU initiatives such as a taxonomy that defines a sustainable product, and disclosure rules for all types of companies.
The European Central Bank which regulates top euro zone lenders will use the report from the end of 2022 for updating its annual “SREP” review of whether banks hold enough capital to cover risks on their books.
All EU banking supervisors will be required to apply the report or explain any gaps.
“We are putting an initial emphasis on climate-related risks as data is more advanced, but banks should also advance their identification and understanding of social and governance risks,” said Fabien Le Tennier, a policy expert in EBA’s ESG Risks unit.
Banks typically plan strategically for up to five years ahead at present.
“Most of our recommendations will not come as a surprise for banks, but there will probably be a challenge for banks to meet all of them, at least in the near term,” Le Tennier said.
Central bankdigital currencies can offer “finality, liquidity and integrity”, and could provide strong data governance as well as privacy standards based on digital identities, the Bank for International Settlements (BIS) said on Wednesday. The backing for such currencies by the Switzerland-headquartered BIS, which is also known as the central bank of all central banks, also comes at a time when there are ongoing intense discussions in India and many other countries on crypto currencies.
Noting that central banks stand at the centre of a rapid transformation of the financial sector and the payment system, BIS said Central Bank Digital Currencies (CBDCs) represent a unique opportunity to design a technologically advanced representation of central bank money, one that offers the unique features of finality, liquidity and integrity.
“Innovations such as crypto currencies, stable coins and the walled garden ecosystems of big techs all tend to work against the public good element that underpins the payment system.
“The DNA (Data-Network-Activities) loop, which should encourage a virtuous circle of greater access, lower costs and better services, is also capable of fomenting a vicious circle of entrenched market power and data concentration. The eventual outcome will depend not only on technology but on the underlying market structure and data governance framework,” BIS said.
On Wednesday, BIS released a chapter titled ‘CBDCs: an opportunity for the monetary system’ that is part of its Annual Economic Report 2021.
To realise the full potential of CBDCs for more efficient cross-border payments, BIS said international collaboration will be paramount.
“Cooperation on CBDC designs will also open up new ways for central banks to counter foreign currency substitution and strengthen monetary sovereignty,” it
A few countries, including China, are working on CBDCs.
An analysis BIS found that CBDCs would best function as part of a two-tier system where the central bank and the private sector work together to do what each does well.
From a practical perspective, the BIS said the most promising CBDC design would be one tied to a digital identity, requiring users to identify themselves to access funds. A careful design would balance protecting users against the abuse of personal data with protecting the payment system against money laundering and financial crime, it added.
The penalty on Excellent Co-operative Bank was imposed for contravention of the directions issued by RBI on ‘Maintenance of Deposit Accounts’ and ‘Know Your Customer (KYC)’.
Janseva Sahakari Bank was fined for contravention of the direction issued by on KYC.
The central bank said the penalty on The Ajara Urban Co-operative Bank has been imposed for contravention of direction on ‘Maintenance of Deposit Accounts’.
The RBI said the penalty was imposed on the three lenders based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.
This new age bank has been given a ‘Buy’ rating by Axis Direct in its report dated June 15 at a price of Rs. 355.
The RBI released a consultative paper for the regularisation of norms for the microfinance sector with the primary focus being on (i) Avoiding over-indebtedness and multiple lending and (ii) Issues related to the pricing of microfinance loans for players. The emerging dynamics in the microfinance sector as well as the concerns of customer protection called for a review of the regulations for all the regulated entities (REs) engaged in microfinance. The recommendations attempt to ensure a level playing field between all the regulated microfinance entities., said the brokerage.
Further the brokerage iterated that it was viewed that the harmonization of guidelines for all microfinance entities would cap the margin at 10 percent plus the cost of funds for banks which would negatively impact their NIMs or net interest margin. But such a limit has not been specified for banks or SFBs. Nonetheless it augurs well for microfinance entities as they will be able to stick to healthy spreads thus boosting their return ratios. Surprisingly, the RBI has tweaked the pricing norms for NBFC-MFIs and proposed to align their pricing with other NBFCs, thus withdrawing the margin capping, added the report.
Also, there was seen a possibility of 2-lender cap to be levied on banks or SFBs, nonetheless the non-applicability of such norms work in the favour of Bandhan Bank and others MFIs in the industry.
ICICI Securities has also placed a ‘Buy’ call on the scrip with the target price of Rs. 465 to be realized in a 1-year period. This is a nearly 40% upside from the last closing price of the stock.
The scrip of Bandhan Bank on June 23, 2021 closed over 2% lower at Rs. 333.15 per share on the NSE.
M-cap of the stock is Rs. 53,659 crore, above industry median.
2. RBL Bank:
Emkay Research has placed a ‘Buy’ recommendation for the bank with a target price of Rs 255 for a duration of 12 months.
The brokerage believes RBL has emerged stronger from the deposit scare in FY20, and it has largely dealt with high risk & vulnerable corporate/retail portfolio in FY20/FY21. However, near-term asset quality risk remains with the onset of the second Covid-19 wave, leading to gradual moderation in credit cost in FY22 and going forward, added Emkay Research. Emkay Research takes comfort in the bank’s healthy capital position, improvement in liability profile and gradual uptick in its RoA/RoE to 1.4 per cent/8-13 per cent over FY22-24E from a low of 0.5 per cent/4 per cent in FY21.
The scrip of RBL Bank last traded at Rs. 208.35.
M-cap – Rs. 12,468 crore.
3. Bank of Baroda:
Brokerage firm ICICI Direct has a buy call on the public sector lender for a target price of Rs. 102 in the short term of 3-months. It has seen a gradual build-up of open interest in the last couple of months with the recent price performance. However, there is ample room for further increase in price. We expect further long additions in the stock once it sustains above Rs. 85 levels, said the brokerage.
The stock witnessed noteworthy delivery volume activity in January and May. Fresh delivery based buying was seen around Rs. 70-76. Hence, any declines in the stock can be utilised as a fresh buying opportunity The stock made a 52-week high near Rs. 100 in February 2021. Since then, it has corrected towards its medium term support of Rs. 64 levels. Currently, it has been largely range bound hovering around Rs. 78 and Rs. 86. It failed to sustain above Rs. 85 despite many attempts in the past trading sessions. However, recently, the stock has taken support at lower band level of Rs. 78 and is now witnessing fresh buying momentum.
A substantial part of the assets in question was held in the name of dummy entities, trusts, third persons or relatives of these accused and these entities were their proxies for holding the properties.
The Enforcement Directorate (ED) on Wednesday said it had transferred to public-sector banks and the Central government assets worth `9,371 crore belonging to fugitive economic offenders Vijay Mallya, Nirav Modi and Mehul Choksi.
The agency has attached/seized assets worth a total of Rs 18,170 crore, constituting over 80% of the losses of Rs 22,586 crore incurred by banks due to the alleged frauds committed by these three businessmen. These also include properties worth Rs 969 crore located abroad.
Of these, assets worth about Rs 329.67 crore have been confiscated and those amounting to Rs 9,041.5 crore have been handed over to the PSBs (taking the total to Rs 9,371 crore), the ED said.
Meanwhile, Nirav Modi has lost the first stage of his extradition appeal in the London high court, just over two months after his extradition to India was ordered by UK home secretary Priti Patel in the PNB scam case.
Analysts said the move to attach assets was made substantially easier by the enactment of the Fugitive Economic Offenders Act, 2018. The law empowers authorities to attach assets of such offenders who flee India to escape the reach of law even without a conviction.
Also, this law provides for the attachment of all the assets of the offenders, irrespective of whether these are the proceeds of crime or not. It covers offences with a value of Rs 100 crore or more.
The ED said it had recently transferred attached shares worth Rs 6,600 crore to a State Bank of India (SBI)-led consortium following an order of the PMLA Special Court, Mumbai. On Wednesday, the Debt Recovery Tribunal, on behalf of the consortium, sold the shares of United Breweries for Rs 5,824.50 crore. Further realisation of close to Rs 800 crore through share sale is expected by June 25. With its help, state-run banks had earlier recovered Rs 1,357 crore by selling the attached shares, the agency added.
After the cases were registered by the CBI, the ED unearthed “myriad web of domestic and international transactions and stashing of assets abroad”. “Investigation has also irrevocably proved that these three accused persons used dummy entities controlled by them for rotation and siphoning off the funds provided by the banks,” the ED said.
A substantial part of the assets in question was held in the name of dummy entities, trusts, third persons or relatives of these accused and these entities were their proxies for holding the properties.
Complaints were filed against all the three accused after the investigation under the Prevention of Money Laundering Act was completed. Extradition requests were sent for them to the UK (for Mallya and Nirav Modi) and Antigua and Barbuda (for Choksi).
Already, the extradition of Mallya has been ordered by the Westminster Magistrates Court, which has been confirmed by the UK High Court. Since Mallya has been denied permission to file an appeal in the Supreme Court of the UK, his extradition to India is almost final, the agency said.
Choksi, who was recently discovered in Dominica after he disappeared from Antigua, is also facing extradition proceedings.
In May 2021, the company raised $15-million loan from WorldBusiness Capital, based in Hartford, Connecticut.
Asirvad Microfinance, a subsidiary of Manappuram Finance, said on Wednesday it has securitised microfinance loans worth Rs 262 crore in a deal with a public sector bank.
Raja Vaidyanathan, MD of Asirvad Microfinance, said, “This deal, closely on the heels of an ECB transaction with US-based WorldBusiness Capital, reaffirms the confidence leading lending institutions have in India’s microfinance sector and its prospects for growth.”
In May 2021, the company raised $15-million loan from WorldBusiness Capital, based in Hartford, Connecticut.
Proceeds from the loan availed will enable Asirvad to expand its business of providing small loans to low-income women business owners in rural areas to start and expand their busineses, he added.
The Reserve Bank of India (RBI) has imposed, by an order dated June 23, 2021, a monetary penalty of ₹ 2 lakh (Rupees Two lakh only) on Janseva Sahakari Bank Limited, Pune (the bank) for contravention of the direction issued by RBI on Know Your Customer (KYC). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid direction issued by the RBI.
The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
The inspection report of the bank based on its financial position as on March 31, 2019, revealed that the bank had not introduced system of periodic review of risk categorization of accounts. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the direction.
After considering the bank’s reply to the Notice and oral submissions made during the personal hearing, the RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.
The Reserve Bank of India (RBI) has asked banks to provide jewellery exporters/ domestic manufacturers of gold jewellery an option to repay a part of the Gold (Metal) Loan (GML) in physical gold in lots of one kg or more.
Currently, these loans are repaid in Rupees, equivalent to the value of gold borrowed, on the relevant date/s.
The option to the borrower to repay a part of the GML in physical gold in lots of one kg or more can be given, subject to conditions that the GML has been extended out of locally sourced/ GMS (Gold Monetisation Scheme)-linked gold; and repayment is made using locally sourced IGDS (India Good Delivery Standard)/ LGDS (LBMA’s Good Delivery Standards) gold.
The other conditions that have been prescribed are that the gold is delivered on behalf of the borrower to the bank directly by the refiner or a Central agency, acceptable to the bank, without the borrower’s involvement; the loan agreement contains details of the option to be exercised by the borrower, acceptable standards and manner of delivery of gold for repayment; and the borrower is apprised upfront, in a transparent manner, of the implications of exercising the option.
The Central bank asked banks to suitably incorporate the above aspects into the board-approved policy governing GML along with concomitant risk management measures. The banks shall continue to monitor the end-use of funds lent under GML.
As per the extant instructions, nominated banks authorised to import gold and designated banks participating in Gold Monetization Scheme, 2015 (GMS) can extend Gold (Metal) Loans (GML) to jewellery exporters or domestic manufacturers of gold jewellery.
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