Month: June 2021

Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India (RBI) has imposed, by an order dated June 21, 2021, a monetary penalty of ₹10 lakh (Rupees Ten lakh only) on Indapur Urban Cooperative Bank Ltd., Indapur (the bank) for contravention of the directions issued by the RBI on Exposure Norms and Statutory / Other Restrictions – UCBs and Know Your Customer (KYC) Directions. This penalty has been imposed in exercise of powers vested in the 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 directions issued by RBI.

This 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 (i) had not adhered to the aggregate ceiling on unsecured advances (ii) did not have process for periodical review of risk categorization of accounts and (iii) did not have a robust system in place to generate alerts whenever transactions were inconsistent with the risk categorization of customers. 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 directions.

After considering the bank’s reply to the notice, the RBI came to the conclusion that the aforesaid charges of non-compliance with the RBI directions were substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/406

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Reserve Bank of India – Tenders

Tenders

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College of Agricultural Banking (CAB), Reserve Bank of India, Pune-411016, hereinafter referred to as “CAB”, “College” or “the Bank”, invites E-tenders under Two – Bid system (Technical & Financial Bid) for the work, viz “Providing Integrated Facility Management Service (IFMS) at CAB and its premises (as detailed in Annex XIII)”. IFMS will comprise of Facility Management and Housekeeping, Maintenance of Plumbing and Sanitary, Electrical, Electro-mechanical and Carpentry Installations in the Premises, Horticultural works, Pest Control Treatment, OWC, and Catering services. The agreement shall be for provision of the said service for a period from August 01, 2021 to March 31, 2022, which shall be extendable up to two more years subject to mutual consent of both the parties and based on the satisfactory performance of the Service Provider/contractor and on the basis of increase in Consumer Prices Index for industrial workers. The price index for renewal will be considered before six-month index of the contract period.

Online tenders will be available for viewing /download from 03.00 PM on 21-06-2021 from the website www.mstcecommerce.com.

The tenderers should electronically submit their proposal, as per the instructions regarding E-Tender, along with all supporting documents complete in all respects on or before July 22, 2021 up to 02.00 PM. Tenderers shall submit tender proposal along with refundable EMD of ₹ 6.18 Lakh as prescribed in the tender. The technical bids (Part I) will be opened electronically on July 22, 2021 at 03.00 PM. In the event of any date indicated above being declared a Holiday, the next working day shall become operative for the respective purpose mentioned herein. Financial bid (Part II) of only those bidders who are found to be eligible on evaluation of their Part I documents will be opened on a later date, after intimating them.

Tender document can be downloaded from RBI website- www.rbi.org.in – and www.mstcecommerce.com. Any amendment(s) / corrigendum / clarifications with respect to this tender shall be uploaded on the website / e-portal only. The tenderer should check the above website / e-portal for any Amendment / Corrigendum / Clarification before submitting the bid. The Bank reserves the right to reject any or all the tenders without assigning any reason thereof.

The Chief General Manager & Principal
College of Agricultural Banking,
Reserve Bank of India,
University Road, Pune – 411016

SCHEDULE OF TENDER (SOT)

a. E-Tender no RBI/CAB Pune/773/20-21/ET/773
b. Tender name E- Tender for Providing Integrated Facility Management Services (IFMS) at College of Agricultural Banking (CAB), Reserve Bank of India, Pune-411016 and its premises
c. Mode of Tender e-Procurement System
(Online Part I – Pre-qualification criteria and Techno-Commercial Bid and Part-II-Price Bid through www.mstcecommerce.com/eprochome/rbi)
d. Date of NIT available to parties to download 3.00 PM of 21/06/2021
e. Pre-Bid Meeting 11.00 AM of 28/06/2021 off-line at Iravati Conference Room, CAB, Pune or online through WebEx.
f. Estimated cost of work ₹ 309 Lakh (Rupees Three Hundred and nine lakh) per annum inclusive of GST. However initial duration of tender will be up to 31.03.2022.
g. Earnest Money Deposit ₹ 6.18 Lakh (Rupees Five lakh and Eighty-four thousand) from each bidder.
h. Date of Starting of e-Tender for submission of on line Techno-Commercial Bid and price Bid at www.mstcecommerce.com/eprochome/rbi 4.00 PM of 01/07/2021
i. Due date of submission of EMD Up to 12.00 noon of 22/07/2021
j. Date of closing of online e-tender for submission of Techno-Commercial Bid & Price Bid. 02.00 PM of 22/07/2021
k. Date & time of opening of Tender Part-I Date & time of opening of Part II (Financial Bid) 03.00 PM of 22/07/2021
Opening of Financial Bid will be intimated to all the eligible bidders later
l. Transaction Fee Transaction fee is 0.05% of estimated cost subject to a maximum of ₹.15,000/- (Rupees Fifteen thousand only) Payment of Transaction fee is as mentioned in the MSTC portal through MSTC payment gateway through /NEFT/RTGS in favour of MSTC LIMITED.

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Reserve Bank of India – Press Releases

Press Releases

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Today, the Reserve Bank released its quarterly house price index (HPI)1 (base: 2010-11=100) for Q4:2020-21, based on transaction-level data received from housing registration authorities in ten major cities (viz., Ahmedabad, Bengaluru, Chennai, Delhi, Jaipur, Kanpur, Kochi, Kolkata, Lucknow and Mumbai). Time series data on all-India and city-wise HPIs are available at the Bank’s Database of Indian Economy (DBIE) portal (https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics > Real Sector > Price & Wages > Quarterly).

Highlights:

  • All-India HPI increased (y-o-y) by 2.7 per cent in Q4:2020-21 vis-a-vis 3.9 per cent growth a year ago; HPI growth showed large variation across major cities, from an increase of 15.7 per cent (Bengaluru) to a contraction of (-) 3.6 per cent (Jaipur).

  • On a sequential (q-o-q) basis, all-India HPI growth rate moderated to 0.2 per cent in Q4:2020-21; Delhi, Bengaluru, Kolkata and Jaipur recorded a sequential decline in HPI, whereas it increased for other cities.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/403

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FinMin allows small HFCs to take recourse to SARFAESI law

Banking & Finance

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The Finance Ministry has now allowed all housing finance companies with asset size of over ₹100 crore to use SARFAESI law to recover dues. This move is expected to be a shot in the arm for thousands of small HFCs, as it will facilitate quick recovery of dues and encourage these companies to lend more.

SARFAESI law, enacted in 2002, empowers lenders to attach the pledged assets of the borrowers in the event of non-payment of dues.

Till now, HFCs with assets over ₹500 crore and notified by the Finance Ministry, were allowed to use SARFAESI law to recover dues. Currently, there are nearly 100 HFCs that are registered with NHB. The top-10 HFCs account for 70-80 per cent of the assets of the housing finance industry.

“Allowing all HFCs with asset size of over ₹100 crore to have recourse to SARFAESI will bring stability to the sector and to the HFCs doing the lending. With this support they will be able to extend loans to more categories and little more freely,” RV Verma, former Chairman and Managing Director of National Housing Bank (NHB), told BusinessLine.

Srinath Sridharan, corporate advisor and independent markets commentator, said the latest move by the Department of Financial Services (DFS) will enable smaller HFCs with AUM between ₹100 crore and ₹500 crore to access the SARFAESI powers.

Risk matrix

Sridharan said that the latest Finance Ministry move will enable the smaller HFCs to improve their collections and develop better risk matrix for accessing wider consumer segments.

Currently, these smaller HFCs don’t have access to quicker resolution to defaulting accounts, he pointed out.

India’s home finance sector has an outstanding of over ₹20 lakh crore, and the banking system accounts for 65 per cent of these assets. The remaining is accounted for lending by the housing finance companies.

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RBI imposes Rs 23 lakh fine on 3 co-op banks, BFSI News, ET BFSI

Banking & Finance

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The RBI on Monday imposed penalties of Rs 23 lakh on three cooperative banks, including Mogaveera Co-operative Bank Limited, Mumbai, for contravention of various norms. A penalty of Rs 12 lakh has been imposed on Mogaveera Co-operative Bank Limited, Rs 10 lakh on Indapur Urban Cooperative Bank, and Rs 1 lakh on The Baramati Sahakari Bank Limited, Baramati.

Regarding Mogaveera Co-operative Bank, the RBI said the inspection report of the bank, based on its financial position as on March 31, 2019, revealed that it had not fully transferred unclaimed deposits to Depositor Education and Awareness (DEA) Fund and had not conducted annual review of inoperative accounts.

Inspection also found the lender had no system of periodic review of risk categorisation of accounts.

On Indapur Urban Cooperative Bank, the RBI said inspection report of the bank, based on its financial position as on March 31, 2019, revealed that it had not adhered to the aggregate ceiling on unsecured advances, and did not have process for periodical review of risk categorisation of accounts.

It also did not have a robust system in place to generate alerts whenever transactions were inconsistent with the risk categorisation of customers.

Inspection report of Baramati Sahakari Bank revealed the bank had exceeded prudential inter-bank (single bank) exposure limit.

In each case, the RBI added that penalty was imposed due to 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. N



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Chinese banks promise to step up cryptocurrency ban, BFSI News, ET BFSI

Personal Finance

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BEIJING: China‘s biggest banks promised Monday to refuse to help customers trade Bitcoin and other cryptocurrencies after the central bank said executives were told to step up enforcement of a government ban.

Regulators appear to worry that despite the 2013 ban on Chinese banks and other institutions handling cryptocurrencies, the state-run financial system might be indirectly exposed to risks. Beijing also worries users might evade efforts to monitor and control the financial system.

The four major state-owned commercial banks and payment service Alipay promised to step up monitoring of customers and block use of their accounts to buy or trade crypto-currencies.

“Customers are asked to be more aware of risks, safeguard bank accounts and not to use virtual currency-related transactions,” China Construction Bank Ltd. said on its website.

Similar promises were issued by Industrial and Commercial Bank of China Ltd., Bank of China Ltd., Agricultural Bank of China Ltd., Postal Savings Bank of China Ltd. and Alipay, operated by Ant Group.

Promoters of cryptocurrencies say they allow anonymity and flexibility, but Chinese regulators warn that might aid money-laundering or other crimes.

Bank executives were summoned to a meeting at which they were questioned about their activities and told to “maintain financial stability and security,” the central bank said in a statement.

It said cryptocurrency trading “disrupts normal economic and financial order” and can facilitate money laundering and other crime.

Regulators tightened prohibitions against handling cryptocurrencies in 2017 and publicly reminded banks about their potential risks in May, possibly reflecting concern cryptocurrency mining and trading was continuing.

Regulators in several Chinese regions have ordered cryptocurrency mining operations to shut down.

The Chinese central bank is developing an electronic version of the country’s yuan that could be tracked and controlled by Beijing.



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IIFL Home Finance files draft shelf prospectus to raise ₹5,000 crore via NCDs

Banking & Finance

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IIFL Home Finance Ltd (IIFLHFL) has filed a draft shelf prospectus with the bourses to raise ₹5,000 crore through a public issue of non-convertible debentures (NCDs).

The face value of each secured and unsecured NCD will be ₹1,000 each and will be issued in one or more tranches. The company has filed the prospectus with both the BSE and NSE.

The retail-focused and technology-driven housing finance company will use the proceeds for onward lending, financing, repayment of existing borrowings and general corporate purposes.

Edelweiss Financial Services Ltd, ICICI Securities Ltd, Trust Investment Advisors Pvt Ltd and Equirus Capital Pvt Ltd are the lead managers to the issue.

The proposed NCDs are rated AA/Stable by Crisil Ratings Ltd and BWR AA+/Negative (Assigned) by Brickwork Ratings India Pvt Ltd.

IIFLHFL’s main focus is to provide loans to the first-time homebuyers in the economically weaker section and lower-income segments in the suburbs of Tier-I, Tier-II and Tier-III cities.

Salaried and self-employed customers account for 44.37 per cent and 55.63 per cent of its ₹20,693.69 crore assets under management as of March 31, 2021, which has grown at a CAGR of 20.64 per cent over the last five fiscals.

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ICICI Bank launches cardless EMI facility

Banking & Finance

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Private sector lender ICICI Bank has introduced an instant cardless EMI facility for online purchases on e-commerce platforms. The facility is available to the bank’s pre-approved customers across 2,500 e-commerce brands.

“Customers can convert the transactions up to ₹5 lakh into easy monthly installments by entering their registered mobile number, PAN and OTP at the check-out section of the e-commerce website or app,” said ICICI Bank in a statement on Monday.

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Reserve Bank of India – Tenders

Tenders

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Reserve Bank of India, Thiruvananthapuram invites e-Tender for the captioned work from Bank’s empaneled vendors/contractors under the applicable category of the work costing between ₹ 25 Lakh and ₹ 50 lakh. The tendering would be done through the e-Tendering portal of MSTC Ltd (https://www.mstcecommerce.com/eprochome/rbi). All interested empaneled vendors /contractors must register themselves with MSTC Ltd through the above-mentioned website to participate in the tendering process. The Schedule of e-Tender is as follows:

a. Name of Work Renovation of 8 flats in ‘E’ Block of Officers’ Quarters at Belhaven Gardens-Kowdiar, Thiruvananthapuram
b. e-Tender no RBI/Thiruvananthapuram/Estate/520/20-21/ET/811
c. Estimated Cost ₹ 35.87 lakh (inclusive of all taxes).
d. Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through https://www.mstcecommerce.com/eprochome/rbi)
e. Earnest Money Deposit (EMD) ₹71,740/- (Seventy-one thousand Seven hundred and forty only) in the form of DD or BG, in favour of Reserve Bank of India, Thiruvananthapuram to be delivered in physical form at Estate Dept., Reserve Bank of India, Bakery Junction, Thiruvananthapuram – 695033
OR
Through NEFT
₹71,740/- (Seventy one thousand Seven hundred and forty only) towards
Beneficiary Name: ESTKWDR
Beneficiary Ac No: 8614038
IFSC Code: RBIS0THPA01(5th and 10th character: zero)
f. Date of NIT available to parties to download 17:00 hrs. on June 21, 2021 onwards
g. Date of Pre-Bid Meeting (Online in MSTC Portal) 11:00 hrs. on June 28, 2021
h. Date of starting of e-Tender for submission of Techno-Commercial Bid and price Bid in MSTC Portal 11:00 hrs. on June 29, 2021
i. Date of closing of online e-Tender for submission of Techno-Commercial Bid & Price Bid 14:00 hrs. on July 05, 2021
j. Last date of submission of EMD 13:00 hrs. on July 05, 2021
k. Date & time of opening of tender 15:00 hrs. on July 05, 2021
l. Transaction Fee As charged by MSTC Ltd.

Amendments / Corrigendum to the Tender, if any, issued in future will only be notified on the RBI Website and MSTC Website and will not be published in the newspaper.

Regional Director
(Kerala and Lakshadweep)

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PMC Bank’s rescue plan did have its own dilemma

Banking & Finance

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Centrum or nothing. This was probably the dilemma the Reserve Bank of India (RBI) faced before deciding to grant ‘in-principle’ approval to Centrum Financial Services (CFSL) to set up a small finance bank (SFB) so that it rescues the scam-hit Punjab & Maharashtra Co-operative (PMC) Bank.

While two other entities —UK-based Liberty Group and Ideal Group —also showed interest in taking over PMC Bank in response to its Expression of Interest (EOI) floated in November 2020, CFSL made the cut as it was the only player with experience in the financial services space.

RBI bet on CFSL notwithstanding the fact that its parent Centrum Capital’s consolidated net loss widened to ₹36 crore in the nine months-ended December 31, 2020, against ₹24 crore in the year ago period. The company made a net profit of ₹71.57 lakh in FY20.

Also read: PMC Bank’s resolution could become a template for rescuing other weak UCBs

Fintech company BharatPe, which is among the top UPI P2M players with an 8.8 per cent market share as in March 2021, will be CFSL’s equal partner in floating the SFB, which will acquire PMC Bank.

Banking expert V Viswanathan said RBI could have tried the “Swiss Challenge” method for the proposed amalgamation/merger of PMC Bank, giving an opportunity to other non-banking finance companies to better CFSL’s bid.

As per PMC Bank’s EOI, the investors can explore the option of restructuring a part of deposit liabilities into capital/capital instruments and the SFB may also approach the Deposit Insurance and Credit Guarantee Corporation (DICGC) for its support for payment up to ₹5 lakh (insured deposits) to depositors.

“No plan B”

“Probably there was no Plan B. So, they had to make Plan A (inviting bids and zeroing-in on the successful bidder) work as depositors were suffering for the last 20 months due to the deposit withdrawal cap amid the pandemic,” said a depositor.

Viswanathan said depositors with deposits up to ₹5 lakh are likely to get their money fast as DICGC may settle their claim first. For deposits of individuals above ₹5 lakh, there could be a phased withdrawal plan. For non-individuals, probably, a portion can be withdrawn in phases and another portion could be converted into tier-I/ tier-II capital.

Among non-individuals holding deposits with PMC Bank, there are urban co-operative banks, two RBI employees’ co-operative credit societies, housing societies, and Gurudwaras.

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