Month: June 2021

Big Update: SBI Customers Need To Do This On Or Before June 30

Personal Finance

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Steps to link PAN with Aadhaar card

Visit the e-filing portal of the Income Tax Department and click on the ‘Link Aadhaar’ section.

Now enter your PAN number, Aadhaar number and name.

Now enter the CAPTCHA code and click on the ‘Link Aadhaar’ option to complete the process.

The income tax department will cross-check your name, date of birth, and gender against your Aadhaar records before linking it with PAN.

Upon successful linking, a pop-up message will appear on your device screen stating that your Aadhaar has been successfully linked to your PAN.

Steps to link PAN with Aadhaar through SMS

By sending an SMS, you can link your PAN to your Aadhaar number. The steps listed below must be followed for the same:

  • Type UIDPAN and send it to 67678 or 56161.
  • Upon successful authentication of both documents, you will get a confirmation message on your registered mobile number.
  • To use the SMS facility to link Aadhaar with PAN your mobile number should be registered with Aadhaar Card.

Steps to check the status of PAN-Aadhaar link

Steps to check the status of PAN-Aadhaar link

  • Visit www.incometaxindiaefiling.gov.in and click on the ‘Link Aadhaar’ option under the Quick Links section.
  • Now you will be redirected to a new page where you need to click on “Click here to view the status if you have already submitted link Aadhaar request”. The status of your Aadhaar-PAN will be displayed on the website once you click this link.
  • If you can’t locate the result, you can use the form on the same page to link your PAN and Aadhaar card.

Steps to check status via SMS

You can also check the status of PAN-Aadhaar linking via SMS, to do must have your Aadhaar-registered mobile number.

  • Type 12-digit Aadhaar number, space, and enter the 10-digit PAN number and send it to 567678 or 56161 from your registered mobile number.
  • Upon successful authentication, you will receive the result via SMS on your mobile number.

What if you don’t link your PAN with Aadhaar on or before June 30, 2021?

What if you don’t link your PAN with Aadhaar on or before June 30, 2021?

PAN is required for a variety of financial operations, such as the establishment of bank accounts, cash deposits, Demat account establishment, real estate transactions, investing in mutual funds or stocks and so on. The tax department would be able to maintain track of taxable transactions by linking Aadhaar and PAN cards. As a result, the department will have a complete database of all financial transactions that will be subject to taxation for a particular individual. Another rationale for linking PAN and Aadhaar is to limit the number of people or companies that apply for duplicate PAN cards. By successful Aadhaar-PAN linking, the Income Tax Department would be able to identify an individual’s identity through his or her Aadhaar card, and then have records of all financial transactions performed through the associated PAN card. The tax department would be able to discover and take remedial action if there are multiple PAN cards issued under the same name or if one fails to connect your PAN card with your Aadhaar card by June 30, 2021. As a result, you may face a penalty from the Income Tax Department. Not only will you face a penalty of up to Rs 1,000, but your PAN will also be revoked, which may lead to unwanted interruptions in activities made using your bank account.



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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 0.00 – –
     I. Call Money 0.00 – –
     II. Triparty Repo 0.00 – –
     III. Market Repo 0.00 – –
     IV. Repo in Corporate Bond 0.00 – –
B. Term Segment      
     I. Notice Money** 0.00 – –
     II. Term Money@@ 0.00 – –
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sun, 06/06/2021 1 Mon, 07/06/2021 999.00 3.35
     (iii) Special Reverse Repo~          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Sun, 06/06/2021 1 Mon, 07/06/2021 38.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -961.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sat, 05/06/2021 2 Mon, 07/06/2021 35,574.00 3.35
  Fri, 04/06/2021 3 Mon, 07/06/2021 3,58,822.00 3.35
     (iii) Special Reverse Repo~ Fri, 04/06/2021 14 Fri, 18/06/2021 150.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 04/06/2021 14 Fri, 18/06/2021 2,00,029.00 3.46
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sat, 05/06/2021 2 Mon, 07/06/2021 1,021.00 4.25
  Fri, 04/06/2021 3 Mon, 07/06/2021 0.00 4.25
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       1,662.00  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -5,09,410.00  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -5,10,371.00  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 06/06/2021 6,08,763.95  
     (ii) Average daily cash reserve requirement for the fortnight ending 18/06/2021 6,11,914.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 04/06/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 21/05/2021 8,43,197.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/329

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China banks are flush with dollars, and that’s a worry

Banking & Finance

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A mountain of dollars on deposit in China has grown so large that banks are struggling to loan the currency and traders say it poses a risk to official efforts to control a fast-rising yuan.

Investment flows

Boosted by surging export receipts and investment flows, the value of foreign cash deposits in China’s banks leapt above $1trillion for the first time in April, official data show.

A previous jump, late in 2017, preceded heavy dollar selling, which turbo-charged a steep yuan rally in early 2018.

Market participants say the size of the even bigger hoard this time raises that risk, and leaves policymakers’ efforts to restrain the yuan vulnerable to the whims of the exporters and foreign investors who own the cash.

“This positioning in particular, in our view, is susceptible to a capitulation if the broad dollar downtrend were to continue,” said UBS’ Asia currency strategist Rohit Arora, especially if the yuan gains past 6.25 or 6.2 per dollar. “We think a break of these levels … has the ability to affect market psyche,” he said, since they represent, roughly,the yuan’s 2018 peak and its top before a devaluation in 2015, and trigger selling from local corporations in particular.

The heavily managed yuan is at three-year highs, havingr allied through major resistance at 6.4 per dollar, and it clocked its best month since November in May.

Also read: Govt blocks China’s bid to enter Indian ports sector

Concerned this rapid rise could unleash huge conversion of the deposits into yuan, the People’s Bank of China (PBOC) said on Monday that from mid-June, banks must set aside more reserves against them to discourage further accumulation.

State restraint

The central bank’s stance marked a shift towards confronting a trend that gathered steam while the bank had, publicly at least, kept to the sidelines.

Since 2017, the PBOC has largely left the yuan to marketforces, keeping its currency reserves just above the $3-trillion mark, while behind the scenes the state-bank andprivate sectors stepped in.

Over the 16 months to April, dollar deposits rose by $242.2 billion, PBOC data show, a rise equal to about 1.8 per cent of gross domestic product and bigger than the much-vaunted inflows into China’s bond market, which totalled about $220 billion for the period.

Even as the country’s trade surplus ballooned during the pandemic and the banking system converted $254 billion into yuan for clients, the People’s Bank of China drained just $90.2 billion from the financial system over those months.

“The private sector has overtaken the central bank to absorb excess US dollar liquidity generated by the corporates and foreign investment inflows,” said HSBC’s global FX strategists, led by Paul Mackel, in a note published on Monday.

That could also reflect the private sector’s view that theyuan is near a peak, or that it is preparing for future paymentssuch as dividends and overseas investment, they added.

Current account surplus

Raw economics can explain the accumulation: China is running the world’s largest current account surplus, and government data show about half the dollar deposits are held by local companies that have boomed with demand for their exports.

The same outperformance has attracted global capital, which has poured into a stockmarket riding on the pandemic recovery and credit markets paying better yields than other big economies because policy settings have begun to tighten.

Little guarantee

Yet these factors provide little guarantee of the cashpile’s longevity, especially as they meet with a fearsome shif tin the dollar/yuan exchange rate, which has fallen 11 per cent in a year.

To be sure, plenty of currency traders think that makes sustained further dollar drops unlikely.

UBS’ Arora and HSBC’s Mackel both reckon a drop to 6.25 per dollar is possible, but that a recovery follows – to around current levels of 6.38 by year’s end for Arora and for Mackel to around 6.60 by end 2021.

Most also reckon the central bank will not tolerate further gains and cite jaw boning from officials to cool the rally and the move to tamp down on dollar liquidity, by raising banks’ reserves ratio, as evidence of its resolve.

Onshore banking sources said that demand for new dollarloans was dire, even at rock-bottom rates – and data shows thevalue of deposits overhauling loans in December.

“How this has changed over the past few years has been quite phenomenal,” said Patrick Law, head of north Asia local markets and Asia non-deliverable forwards at Bank of America in Hong Kong.

“Last year was the first in over a decade or more, that there were more foreign currency deposits than foreign currency loans and that imbalance has grown in 2021,” he said.

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Reserve Bank of India – Tenders

Tenders

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Regional Director, Reserve Bank of India, Bengaluru invites e-Tender through MSTC for Renovation of Community Hall at RBI Osborne Road Staff Quarters, Bengaluru. The e-Tender along with the detailed tender notice is available at MSTC website https://www.mstcecommerce.com/eprochome/rbi and the website of the RBI at https://www.rbi.org.in under the menu “Tenders”.

2. All empanelled bidders must register themselves with MSTC through the above referred website to participate in the e-Tendering process.

3. The estimated cost of the work is ₹24.73 lakh (approx.), however the actual amount may vary.

4. The schedule for the e-Tendering process is as under:

A E-Tender No. RBI/Bengaluru/Estate/506/2020-21/ET/786
B Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through www.mstcecommerce.com/eprochome/rbi)
C Date of NIT available to parties to download 10.00 am of June 07, 2021
D Earnest Money Deposit Rs.49,460/- from each bidder in the from Demand Draft / Bank Guarantee / NEFT to the Bank (details under para “bidding in e-tender)
E Start Bid Date 11.00 am on June 07, 2021
F Last Date for submission of the tender 3.00 pm on July 08, 2021
G Date of opening of Part I (Technical Bid) of tender 3.30 pm on July 08, 2021

5. The Part-II i.e. price bid will be opened on the same day or at a later date as intimated by the Bank in respect of only those contractors/bidders who satisfies all criteria stipulated in Part-I. The Bank reserves the right to accept or reject any or all e-Tenders without assigning any reasons thereof.

Note: All the tenderers may please note that any amendments / corrigendum to the e-Tender, if issued in future, will only be notified on the RBI and MSTC Website as given above and will not be published in the newspaper.

Regional Director
Bangalore

June 07, 2021

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More clarity needed to crack the crypto code

Banking & Finance

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The Reserve Bank of India’s recent notification on ‘Customer Due Diligence for Transactions in Virtual Currencies (VC)’ has sent a wave of cheer across cryptocurrency investors in the country, as it has kindled hopes that it will ensure smoother banking transactionsand further growth and innovation in the industry.

Though this notification has cleared the air regarding transactions in this new asset class to some extent, there continues to be confusion in terms of regulations.

Banks will be complying with the aforementioned RBI directive to not send advisories citing the 2018 circular. But how each of them proceeds in terms of enabling cryptocurrency transactions is still unclear.

Also read: Cybercriminals go after cryptocurrency: Report

The RBI had, on May 31, asked regulated entities to not cite its April 2018 circular on ‘Prohibition on Dealing in Virtual Currencies’ as it is no longer valid following the Supreme Court setting it aside.

Due diligence

The central bank also asked them to continue to carry out customer due diligence processes in line with the governing standards for Know Your Customer, Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under the Prevention of Money Laundering Act, 2002.

Significantly, at the June 4 post monetary policy press conference, the RBI Governor Shaktikanta Das said there is no change in the central bank’s position.

“The RBI’s position is that we have major concerns around cryptocurrency, which we have conveyed to the government,” he said, adding that the central bank’s latest directive sets the record straight that the 2018 circular has been set aside and that it is not correct to refer to it.

Regulation

Apart from the Supreme Court ruling of March 2020, there is no clear guidance on the sector. While the larger debate on the legality of cryptocurrencies continues, key issues that also need to be resolved include those related to licensing and investor grievances, taxation and banking.

The only word that has come till now is from the Ministry of Corporate Affairs, when it asked companies to disclose in their annual financial statements the amount of cryptocurrencies held as on the reporting date.

However, many countries are now making their stance clear. The US, Japan and South Korea have come out with regulations for cryptocurrencies. Others like China have warned citizens not to deal in cryptocurrencies.

Pointing out that there have been instances of banks using RBI’s 2018 circular to raise objections to cryptocurrency transactions, Ramalingam Subramanian, Head of Brand and Communication, CoinDCX, said the new RBI notification gives clarity and clears the air.

However, he noted: “Regulations are needed not just for clarity, but also on issues such as investor protection, who can create a token and licensing of exchanges.”

Code of conduct

Meanwhile, the Blockchain and Crypto Assets Council, which is part of the Internet and Mobile Association of India (IAMAI), has decided to set up a board to oversee the implementation of a self-regulatory code of conduct by its member crypto exchanges to comply with AML/CFT and other laws.

Veena Sivaramakrishnan, Partner, Shardul Amarchand Mangaldas & Co, also pointed out that quite a few countries have legalised cryptocurrencies, but in Indiathe government has been negative about it.

“With the RBI notification, it seems that there is some change in stance…But there is still no legality to cryptocurrencies and there is a regulatory vacuum. So, there is need for regulation. The expectation is that the new cryptocurrency Bill will help the sector as it will not completely ban private cryptocurrencies but regulate them,” she said.

But despite the strong adoption of cryptocurrencies and robust investor interest, experts point out that its speculative nature and volatility in prices cannot be wished away.

Another key concern that has become a topic of debate is the energy consumption involved in mining cryptocurrencies and the carbon footprint of the entire ecosystem, pointed out a recent report by Cyril Amarchand Mangaldas. “As per an analysis undertaken by the Cambridge Centre for Alternate Finance, Bitcoin’s electricity consumption is at approximately 110 Terawatt hours per year, or 0.55 per cent of the global electricity production,” it said.

Digital currency

Many central banks, including the RBI, are now looking at the option of a Central Bank Digital Currency.

“The prospect of competition from cryptocurrencies has prodded central banks to design their own digital currencies, which will be backed/controlled by the central banks,” noted a recent Treasury report by HDFC Bank.

Citing global experience, the report pointed out that the Bahamas rolled out a CBDC in October 2020, while Sweden has completed a technical pilot and China is conducting real-world trials for its digital yuan in cities including Shenzhen and Suzhou.

“European officials want to launch a digital euro by 2025 while the UK government has launched a ‘Britcoin’ task force, and the US is carrying out research to test the credibility of CBDCs programme,” it noted.

In its report on Currency and Finance, 2020-21, the RBI had said that a “CBDC can be designed to monitor transactions, promote financial inclusion by direct fiscal transfer, pumping central bank ‘helicopter money’, even direct public consumption to a select basket of goods and services to increase aggregate demand and social welfare.”

“We think it is just a matter of time before Indian investors have legal access to crypto plays,” the HDFC Bank report noted.

With the booming crypto trade in the country and subsequent investments, as well as the potential of blockchain technology, there is widespread expectation that the Finance Ministry will do a re-think on the proposed cryptocurrency Bill that was to be tabled in Parliament. Instead of a full-fledged ban, experts are hopeful that the proposed legislation would call for regulation.

But until such a development takes place, the woes of crypto investors may not go away completely.

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We are well prepared compared to the first wave: South Indian Bank CEO

Banking & Finance

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The Thrissur-based South Indian Bank is looking at a credit growth of about 10 per cent in FY22, assuming the economy revives in the second half of the current fiscal. We have laid down plans for the growth of about 18-20 per cent in the coming years, says Murali Ramakrishnan, Managing Director and CEO. We are continuously monitoring the impact of Covid and recovery of the economy and will keep on calibrating our growth plans accordingly, he adds. Excerpts:

What are the plans for the current fiscal year?

It is the decision of the bank to rejig the existing portfolio, with the focus to diversify the risk both in assets and liabilities. We are replacing the bulk deposit with retail deposit and the lumpy corporate exposures with diversified retail exposures.

The bank has been following a branch structure where asset and liability business were managed by branches. To facilitate this, we had a closer look at the structure of the bank. Post our assessment, a dedicated vertical asset structure was formed for all retail assets in businesses, in which the branches would act as one more channel for sourcing new leads from the existing customers and walk-in potential customers.

Similarly, MSME and the corporate banking vertical has been formed with a dedicated sales structure across the country.

I am happy to share that the new vertical structure is in place with dedicated teams. Wherever we felt that the internal talents are not available, especially in the retail asset vertical, we have recruited a few experts laterally to drive those businesses.

Apart from this, we have set up a separate data science division tohelp us do analytics in the area of assets, liability, collection. We have also set up separate operations divisions to take care of back-end fulfillment of asset and liabilities transactions.

What would be the impact of Covid-19 on the business?

Compared to the first wave we are well prepared, and the government has also not resorted to the complete lockdown. Also, we now have vaccines. We are closely assessing the impact of the second wave on our borrowers and wherever we feel there is a genuine need, we are extending full support with restructuring as per regulation.

We had extended moratorium benefits to all borrowers, in line with other banks. We were witnessing improvement in business activities till March, which was impacted by the second wave.

What has been its impact on NRI remittances?

Owing to the pandemic, most people, including NRIs, keep a buffer in their bank accounts for emergencies. Further, there are several restrictions placed in many countries, which have resulted in increased remittances for meeting the financial needs back at home.

South Indian Bank posts net profit of nearly ₹7 crore in Q4

The rupee had appreciated against the dollar in FY21, which has led to an increase in remittances. Overall, we experience moderate growth in remittances during FY21.

Can you specify your plans in raising equity capital?

As part of the Vision 2024 strategy, the bank has worked out the equity capital requirement, based on the business projections for the next three years. The recent equity capital raising of ₹240 crore through marquee domestic institutional investors was in line with our stated strategy.

The envisaged equity capital will be used to strengthen the balance sheet and build a buffer against the pandemic. We intend to raise the balance tranche of equity capital of ₹510 crore by December 2021.

The bank’s share price is low, which is not giving much gain to investors. Will they reflect deeper troubles?

We are completely cognizant of the pain our existing loyal investors have suffered over the past few years in terms of subdued share price performance. However, with key initiatives by new management, the market has appreciated the efforts, which are reflected in the share price performance of the bank in the last six months.

South Indian Bank mulls multi-pronged approach to return to profitability

We are happy to say that even after fresh equity capital, our overall market capitalisation has improved without an impact of revised valuation multiple. Further, given the revised book value of ₹27.7 per share against the market price of about ₹10, we believe there is inherent value in the stock and it deserves timely appreciation.

How are you preparing to tackle the Covid-19 virus? Are your employees fully vaccinated?

With the outbreak of the pandemic, the bank had, from the beginning of the calendar year 2020, initiated several proactive measures to safeguard the safety and security of employees. Through periodic instructions and continuous monitoring, it was ensured that all offices of the bank funtion strictly following Covid protocols.

The bank has initiated a few new employee benefits such as medical insurance for treatment of Covid and life insurance in the unfortunate event of the death of an employee. Further, the bank will be reimbursing the vaccination cost for all employees and their dependent family members.

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 4,331.00 2.59 0.25-3.45
     I. Call Money 531.95 2.85 2.70-3.05
     II. Triparty Repo 1,265.05 0.84 0.25-3.30
     III. Market Repo 0.00   –
     IV. Repo in Corporate Bond 2,534.00 3.42 3.40-3.45
B. Term Segment      
     I. Notice Money** 8,168.81 3.15 1.90-3.65
     II. Term Money@@ 618.50 – 3.15-3.55
     III. Triparty Repo 243,579.55 3.24 3.20-3.40
     IV. Market Repo 114,734.17 3.30 1.75-3.45
     V. Repo in Corporate Bond 323.00 3.64 3.50-5.35
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Fri, 04/06/2021 3 Mon, 07/06/2021 358,822.00 3.35
     (iii) Special Reverse Repo~ Fri, 04/06/2021 14 Fri, 18/06/2021 150.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 04/06/2021 14 Fri, 18/06/2021 200,029.00 3.46
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo – – – – –
3. MSF Fri, 04/06/2021 3 Mon, 07/06/2021  0.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -559,001.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo          
     (iii) Special Reverse Repo~          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF          
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       1,662.00  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     84,144.00  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -474,857.00  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 04/06/2021 665,049.48  
     (ii) Average daily cash reserve requirement for the fortnight ending 04/06/2021 614,682.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 04/06/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 21/05/2021 843,197.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/327

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DSP MF moves court to secure ₹100 cr investment in Sintex NCD

Banking & Finance

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DSP Investment Managers has filed an intervention application with National Company Law and Tribunal (NCLT) to secure its investment of ₹100 crore in the non-convertible debentures issued by Sintex BAPL.

The move follows after Axis Bank declaratory suit claiming first charge over the proceeds from sale of assets by Sintex BAPL. DSP Investment Managers is the asset management company of DSP Mutual Fund.

DSP Credit Risk Fund had invested about ₹100 crore in the non-convertible debentures of Sintex BAPL in 2017. Subsequently, the company defaulted on its payment obligation and the fund house had written down the investment to ₹20 crore as of April-end.

Files case

DSP Investment along with other debenture holders had filed a petition before the Civil Court in Ahmedabad and was instrumental in getting the permission of Debenture Trustee Vistra ITCL (India) to sell the overseas business.

However, Axis Bank recently filed a fresh declaratory suit claiming first charge over the sale proceeds on the basis of an undertaking executed by Sintex in its favour.

In response, DSP Investment Managers has filed an intervention application opposing the grant of any relief to Axis Bank.

Further, the debenture holders claimed that Sintex must prepay the Debenture Holders out of the sale proceeds and the same were to be deposited in the Specified Bank Account (as defined under the Debenture Trust Deed) over which the Debenture Holders have first ranking exclusive charge.

Necessary documents were executed in favour of Debenture Trustee including making it exclusive signatory over the offshore account where sale proceeds are presently lying, sources said.

Earlier, an operational creditor had dragged Sintex Plastics Technology, the parent of Sintex BAPL, to NCLT over payment default. The company recently sold its step-down overseas subsidiary Sintex NP SAS for about ₹1,000 crore.

Sintex Plastics Technology filed an application in NCLT to withdraw insolvency proceedings. Following this, the asset management company filed an intervention petition opposing the move.

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List Of Govt Banks Likely To Be PrivatisedIn India

Personal Finance

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Why is the government looking for Privitisation of Banks?

Privatization of banks simply means that the central government is less engaged and direct in the day-to-day operations of the banks. In effect, the federal government’s majority interest in the PSB will be offloaded in favour of private investors. For banks, this means increased market competition and reduced to minimal financial reliance on government assistance. For a long time, it has been widely reported that some state-owned banks are not working to their full potential due to a variety of factors, and are largely reliant on financial assistance from the central government.

Instead of continuing to put pressure on banks to re-capitalize them at regular intervals, the central government could better use those funds for poverty alleviation and other public programmes if it pursued a privatisation campaign.

List of Govt banks likely to be privitised

List of Govt banks likely to be privitised

According to sources close to the situation, the Bank of Maharashtra and the Central Bank are the top two possibilities for privatisation, though the Indian Overseas Bank may also be considered this year or later.

Furthermore, United India Insurance, which has a superior solvency ratio than the other two general insurers, may be picked as a candidate for privatisation, according to sources. However, financial sector experts argue that Oriental Insurance, which has the lowest solvency ratio of the three, maybe preferred because it has no international activities and may find it easier to attract a private investor.

NITI Aayog had targeted the six state-run lenders that were not involved in the merger attempt a few years ago.

Only six banks are eligible for privatisation:

  1. UCO
  2. IOB
  3. Central Bank
  4. Bank of Maharastra
  5. Punjab and Sind Bank
  6. Bank of India.

This list was used to make the decision. According to sources close to the situation, the Bank of Maharashtra and the Central Bank are the top two possibilities for privatisation, though the Indian Overseas Bank may also be considered this year or later.

It was of the opinion, however, that the better-off entities would attract more interest, resulting in IOB and Central Bank being shortlisted. The two companies are worth roughly Rs 44,000 crore based on current share prices.

These two names have been nominated for privatisation by the government’s think tank, NITI Aayog. According to the Times of India, the Bank of India (BoI) could potentially be a prospective sale target.

When it comes to privatisation, the terms Bank of India (BoI), IOB, Bank of Maharashtra, and Central Bank come up frequently. We will have to wait for the official announcement to find out which banks will be privatised.

What happens after privatization of Public Sector Banks (PSBs)?

What happens after privatization of Public Sector Banks (PSBs)?

The new administration of the private firm after privatisation is typically believed to be profit-oriented. In addition, once privatised, management will work to eliminate nonperforming assets (NPAs). There is a possibility that banks would be pushed to rethink their retail business. The danger is that once privatised, there will be opportunities to keep lucrative branches while eliminating others that are suffering. This may necessitate a full re-evaluation of the bank’s personnel resources. Customers can expect a privatised bank’s baking services to improve as a result of competition from other private sector banks.



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Cashfree raises funds from SBI

Banking & Finance

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Bengaluru-based Cashfree, a digital payments and banking technology company, has raised an undisclosed amount from State Bank of India (SBI).

Cashfree provides a full-stack payments solutions platform, enabling over 1 lakh businesses in India and across the globe to accept and disburse payments online through a single integration.

Currently ranked among the leading payment service providers in India, Cashfree processes transactions worth $20 billion annually. Apart from India, Cashfree’s products are used in 8 other countries, including the US, Canada, and the UAE.

Cashfree secures $35.3 million as part of Series B raise

Akash Sinha, Co-Founder and CEO, Cashfree, said: “The investment from India’s largest bank shows its trust in Cashfree’s innovation and the way we are rapidly scaling up the payments business. This also underscores Cashfree’s role towards building a payments ecosystem that enables the fastest and easiest way to collect payments and make payouts for growing businesses. As we work towards digitising the economy, we remain committed to bringing uniformity, transparency and a reduced turnaround time to digital transactions among Indian businesses. The investment fits perfectly with our growth strategy as we continue to focus on customer experience and product innovation”.

Incubated by PayPal, Cashfree is backed by Apis Partners, Smilegate and Y Combinator. Cashfree is used by Zomato, CRED, Nykaa, Delhivery, Acko, and Shell, among others, for various business payment needs such as e-commerce payment collection, vendor payments, and marketplace settlements.

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