Month: July 2021

RBI announces Digital Payments Index, BFSI News, ET BFSI

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The Reserve Bank of India had earlier announced the construction of a composite Reserve Bank of India – Digital Payments Index (RBI-DPI) with March 2018 as base to capture the extent of digitisation of payments across the country.

The index for March 2021 stands at 270.59 as against 207.84 for March 2020, announced while launching the index on January 1, 2021.

The RBI-DPI comprises of 5 broad parameters that enable measurement of deepening and penetration of digital payments in the country over different time periods. These parameters are – (i) Payment Enablers (weight 25%), (ii) Payment Infrastructure – Demand-side factors (10%), (iii) Payment Infrastructure – Supply-side factors (15%), (iv) Payment Performance (45%) and (v) Consumer Centricity (5%). Each of these parameters have sub-parameters which, in turn, consist of various measurable indicators.

The RBI-DPI index has demonstrated significant growth in the index representing the rapid adoption and deepening of digital payments across the country in recent years.

The RBI-DPI has been constructed with March 2018 as the base period, i.e. DPI score for March 2018 is set at 100. The DPI for March 2019 and March 2020 work out to 153.47 and 207.84 respectively, indicating appreciable growth.

The index series since its inception is as under:

March 2018 (Base) : 100
March 2019 : 153.47
September 2019 : 173.49
March 2020: 207.84
September 2020: 217.74
March 2021: 270.59



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Yes Bank, Indiabulls Housing Finance sign co-lending agreement

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Yes Bank and Indiabulls Housing Finance have entered into a co-lending agreement for home loans.

“The partnership aims at synergising capabilities to provide an efficient and seamless experience to retail home loan customers,” said a joint statement on Wednesday, adding that the Reserve Bank of India’s co-lending framework provides a collaboration tool to benefit from the low-cost funding model of a bank and the cost-efficient sourcing and servicing capabilities of a non-bank.

Rajan Pental, Global Head, Retail Banking, Yes Bank said, “The partnership is in line with Yes Bank’s strategy of expanding its retail franchise through a mix of organic and partnership-led origination models. The bank is looking forward to further build a profitable and quality home loan portfolio through this partnership.”

Home loans constitute about 10 per cent of Yes Bank’s retail banking assets as on June 30, 2021.

Gagan Banga, Vice Chairman and CEO, Indiabulls Housing Finance said, “We can now leverage Yes Bank’s deposit-led franchise and complement that with our technology-led distribution to provide efficient solutions around home loans to a wide gamut of customers across geographies, ticket-sizes and yield spectrum, to give us balance-sheet light growth and profitability.”

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Worldline ties up with STAAH to offer seamless payment experience, BFSI News, ET BFSI

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Wordline has partnered with STAAH, to integrate its NextGen Payment Gateway solution to enhance the customer experience in India by offering comprehensive payment options for both domestic and international payment acceptance.

Worldline is incorporating its fully integrated payment product suite, Next Gen Payment Gateway to provide an end-to-end seamless payment experience to STAAH’s 12,000 partners.

Ramesh Narasimhan, Head – Digital Commerce, Worldline India, said “We are very proud to extend our partnership with STAAH, which is a clear sign of trust and appreciation. Our tailored payment offerings with comprehensive payment options for both domestic and international acceptance with the best success rate of our NextGen Payment Gateway will immensely benefit their customers. We look forward to continuing supporting STAAH with our 360-degree payment product suites for both online and offline payment acceptance in the future and to be their innovative and proactive partner for the accelerating digital transformation.”

Dhyey Sheth, Chief Business Development – India, STAAH said, “We are pleased to partner with a global leader, Worldline to avail tailored solutions to make payment experience seamless for our customers. The integration of NextGen Payment Gateway was a hassle-free process and we have observed a significant uptick in success rates. We look forward to working closely with team Worldline to further enhance our payment journey.”

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Yes Bank and Indiabulls Housing Finance enter into a co-lending partnership, BFSI News, ET BFSI

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YES BANK and Indiabulls Housing Finance Limited have entered into a strategic co-lending agreement to offer home loans to homebuyers at competitive interest rates.

The co-lending framework laid down by Reserve Bank of India provides a collaboration tool to benefit from the low-cost funding model of a bank and the cost-efficient sourcing and servicing capabilities of a non-bank.

Rajan Pental, Global Head – Retail Banking, YES BANK said, “We are pleased to partner with Indiabulls Housing Finance Limited. This is in line with YES BANK’s strategy of expanding its retail franchise through a mix of organic and partnership-led origination model. The Bank is looking forward to further build a profitable and quality home loan portfolio through this partnership.”

The partnership aims at synergizing capabilities to provide an efficient and seamless experience to retail home loan customers.

Gagan Banga, Vice Chairman & CEO, Indiabulls Housing Finance Limited said “We can now leverage YES BANK’s deposit-led franchise and complement that with our technology-led distribution to provide efficient solutions around home Loans to a wide gamut of customers across geographies, ticket-size and yield spectrum, to give us balance-sheet light growth and profitability.”



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Gold Rates Marginally Higher In Indian Cities, Check Rates For July 28

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Investment

oi-Sunil Fernandes

|

Gold rates in the city of Mumbai, Kolkata, Delhi, Chennai, Bangalore, Hyderabad and Kerala were all trading higher, ahead of the key US Federal Reserve statement.

The statement due later today, could lead to gold prices being volatile in the days ahead. Should the US Fed statement hint at an aggressive monetary policy or away from the quantitative easing programme, we might see gold prices fall.

Gold prices per 10 grams on June 28 in major Indian cities

City 22 karats gold 24 karats gold
Chennai Rs 45210 Rs 49320
Bangalore Rs 44800 Rs 48880
Mumbai Rs 46840 Rs 47840
Delhi Rs 46950 Rs 51220
Kolkata Rs 47250 Rs 49950
Hyderabad Rs 44800 Rs 48880
Kerala Rs 44800 Rs 48880
Pune Rs 46180 Rs 49450

Gold in the international markets were lower

Gold prices in the global markets were once again lower and managed to stay below the $1800 an ounce mark. Gold prices were last seen trading at $1799 an ounce, as bond prices rallied. The Prices have been moving between gains and narrow losses for the last few days.

Gold Rates Marginally Higher In Indian Cities, Check Rates For July 28

The US Fed’s policy statement, which is due later at 1800 GMT later in the day followed by a news conference by Chairman Jerome Powell, would be important for the movement of gold. Investors will look for cues on when the central bank will begin to taper its monetary support.

Meanwhile, on the MCX gold prices dropped marginally by Rs 6 and was last seen trading at Rs 47,544, down about Rs 6 from the previous levels. Gold rates on the MCX were up in early morning trade.

Physical demand for gold has not been too great, while Gold ETFs had flat purchases. In Q1 of 2021 gold demand (excluding OTC) was 815.7 trillion, virtually on a par with Q4 2020, but down 23% compared with Q1 2020, according to the World Gold Council. The demand for the second quarter too is unlikely to be great, because the Indian consumption would have declined as many states in India had imposed lockdowns.

However, gold price movement these days does not depend much on physical demand. In fact, according to the WGC inflation and interest rates would play a key role in the movement of the precious metal in the days to come. For the time being all eyes are on the US Fed’s statement today.

GoodReturns.in

Story first published: Wednesday, July 28, 2021, 15:41 [IST]



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Kotak Mahindra Bank launches emergency personal loans for Covid treatment

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Kotak Mahindra Bank is offering emergency personal loans for treatment of Covid-19. “The loan covers expenses incurred for medical treatment of Covid-19 for self as well as for family members,” it said in a statement on Wednesday, adding that both existing and new customers of the bank are eligible to apply for a loan.

Under the offer, borrowers can avail loans ranging from ₹1 lakh to ₹5 lakh, at an interest rate starting at 10 per cent per annum. The loan tenure can be between one and four years and a processing fee of one per cent of the loan amount will be levied.

Also read: Kotak Mahindra Bank Q1 net profit up 32%

Ambuj Chandna, President – Consumer Assets, Kotak Mahindra Bank said the lender has a holistic healthcare package for its customers to help them meet the healthcare needs of their entire family.

The bank has also tied up healthcare brands such as Tata 1MG and MediBuddy to provide a range of healthcare offers for its debit and credit cardholders.

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Investing in Physical Gold? Know Advantages and Disadvantages

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Advantages Of Owning Physical Gold: Liquidity

Gold can be liquidated and changed into cash with relative ease. This is something that can be done anywhere on the planet. When liquidated, the value is the same as it was when it was solid. As a result, it is the finest way to invest because you may convert it to cash anytime you need it. Unlike other investments, there is no guarantee that the gains you receive after liquidating will be the same. Gold is a very liquid metal. Gold will be recognized by almost any bullion dealer in the globe, and they will buy it from you. You can sell it to a coin store in your neighborhood, a private individual, or an online dealer. It’s always possible to sell it for cash or trade it for stuff. Liquidity refers to the ability to take gold with you literally anywhere in the globe and sell it for the amount you want right away.

Advantages of Investing in Physical Gold: Can’t Be Hacked

Advantages of Investing in Physical Gold: Can’t Be Hacked

How much of your wealth is now stored digitally? Physical metals can give diversity away from the internet if your online world comes crashing down, or even if you just want to diversify your portfolio. Physical metals are one of the few investable assets that can provide you with some privacy or anonymity.

You don’t need electricity or the internet to hold a gold Eagle in your hand… It can’t be hacked or deleted… and is more susceptible to the environment than your cellphone.

Advantages of Investing in Physical Gold: An Ideal Assets for Heirs

Advantages of Investing in Physical Gold: An Ideal Assets for Heirs

Physical metals can be a great commodity to leave to your heirs because they keep their worth through time and are tangible assets. When you invest in gold, you can easily pass it down to your children and grandchildren, as is customary in our country. As you can see, most individuals give gold ornaments to their children at weddings and other significant life events. This can also be a smart alternative if you wish to save money in gold so that you can put it aside for future requirements.

Easy way to save money

Investing in physical gold can help you save money for the future while also allowing you to earn significant returns in the long run. The best option is to purchase gold coins from banks, which come with a quality guarantee. Because it comes with a certificate of authenticity, you will have to pay a slightly higher price than the market rate for this item. When you buy gold from the market, this feature will not be available.

Gold Loan

Gold Loan

In the event of a financial emergency, a Gold Loan can be obtained. It’s a safe financial product that uses gold jewellery as collateral. The market value of gold is estimated using the per gram market rate on the day the loan application is submitted. The value is calculated using only the gold pieces; other metals, stones, and diamonds are not included in the computations.

Disadvantages Of Investing in Physical Gold: Storage

Disadvantages Of Investing in Physical Gold: Storage

In the event of a financial emergency, a Gold Loan can be obtained. It’s a safe financial product that uses gold jewellery as collateral. The market value of gold is estimated using the per gram market rate on the day the loan application is submitted. The value is calculated using only the gold pieces; other metals, stones, and diamonds are not included in the computations.

Disadvantages of Investing in Physical Gold: No Steady Income

Disadvantages of Investing in Physical Gold: No Steady Income

Investments, according to many financial experts, including Warren Buffet, should generate revenue. Gold does not fit this criterion because it does not create anything when it is owned. If you want to become wealthy, invest in an asset that will increase your fortune.

Purchasing gold jewellery as an investment

Purchasing gold jewellery as an investment is a huge mistake. When we acquire jewellery, we usually pay the jeweler’s making and wastage charges. The prices are increased based on the design. When producing jewellery, 22 karat is used, and the jeweller does not account for the making charge or wastage when selling.

Conclusion

Conclusion

Physical Gold is only appropriate for those who do not have access to or trust in the financial system. Gold is best viewed as a form of reserve currency. There are different forms of investment in Gold; Gold ETF, Gold Bonds, Gold funds. IF you are allocating a certain percentage in gold, you can also allocate in different forms of gold for better diversification.



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IDBI Bank net profit surges 318 per cent to ₹603 crore in Q1FY22

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IDBI Bank’s first-quarter standalone net profit soared 318 per cent year-on-year (y-o-y) to ₹603 crore on the back of healthy growth in net interest income and other income.

The bank had reported a net profit of ₹144 crore in the year ago quarter.

In the first quarter ended June 30, 2021, net interest income (NII) was up 41 per cent y-o-y to ₹2,506 crore (₹1,772 crore in the year ago quarter).

Other income, comprising income from activities such as commission, fees, earnings from foreign exchange and derivative transactions, profit and loss from the sale of investment and recoveries from written-off accounts, jumped 63 per cent y-o-y to ₹1,639 crore (₹1,005 crore).

IDBI Bank to explore avenues to grow corporate credit: Rakesh Sharma

Net interest margin rose to 4.06 per cent from 2.81 per cent in the year ago quarter.

Fresh slippages were lower at ₹1,332 crore (₹2,382 crore in the fourth quarter/Q4 of FY21). The increase in existing non-performing assets (NPAs) was at ₹245 crore (₹250 crore).

Gross NPAs edged up to 22.71 per cent of gross advances as at June-end 2021 against 22.37 per cent as at March-end 2021.

Net NPA position, however, improved to 1.67 per cent of net advances as at June-end 2021, against 1.97 per cent as at March-end, 2021.

Higher provisions towards NPAs

The bank made higher provisions towards NPAs (₹199 crore against a write-back of ₹1,120 crore in Q4FY21) and restructured assets (₹178 crore against ₹9 crore provision). However, provision towards standard assets declined to ₹353 crore (₹708 crore in Q4FY21).

During the reporting quarter, IDBI Bank made an additional provision of ₹447 crore over and above the income recognition and asset classification norms in respect of certain borrower accounts in view of the inherent risk and uncertainty of recovery in these identified accounts.

IDBI Bank has transformed into a retail bank: Samuel Joseph, Dy MD

Deposits nudged up about 1.37 per cent y-o-y to ₹2,22,381 crore. Advances declined about 2.29 per cent y-o-y to ₹1,22,994 crore.

The bank said it has made provision of ₹902 crore during the quarter ended June 30, 2021, towards the estimated shortfall in recoveries by the Stressed Assets Stabilisation Fund Trust.

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SIDBI Report, BFSI News, ET BFSI

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Findings from the latest edition of the SIDBI – TransUnion CIBIL MSME Pulse Report indicate that in FY 2021, loans worth 9.5 lakh crores were disbursed to MSMEs. This amount is much higher than the preceding year- FY 2020, when loans amounting to ₹6.8 lakh crores were disbursed. Government interventions like Emergency Credit Line Guarantee Scheme (ECLGS) under the AtmaNirbhar Bharat program was the major factor in driving this significant surge in credit disbursement to MSMEs MSME segment’s credit exposure stood at ₹20.21 lakh crores as of March ’21, showing YOY growth rate of 6.6%. This credit growth is observed across all the sub segments of MSME lending.

The insights on the key shift in MSME lending, this edition of MSME Pulse covers an analysis1 of borrower profiles of entities getting funded post-COVID wave-1 compared to entities getting funded pre-COVID wave-1. The analysis captures the payment behavior of MSMEs across their outstanding obligations. The analysis reveals that of the MSME that were given loans in the period of Jan to Mar ’21, 29% had missed more than one payment in the last three months and the MSMEs that were given loans during Jan to Mar’ 20, 21% had missed more than 1 payment in the preceding 3 months

MD & CEO of TransUnion CIBIL, Shri Rajesh Kumar said, “The belief in India’s growth story is reasserted with the significant surge in MSME credit demand post unlocks. This growth story has been supported from the supply side by credit institutions who have astutely implemented the government’s pro-growth initiatives like ECLGS and restructuring by using data analytics and solutions from financial intermediaries like TransUnion CIBIL. This commendable resilience and promising prospects of our country’s MSME sector signals strong resurgence potential and stands testimony to the stability and strength of our economy,”.

Shri Sivasubramanian Ramann, Chairman and Managing Director of SIDBI said, “The MSME credit data speaks volumes of the success of ECLGS scheme. The scheme has played a major role in 40% Y-o-Y growth in disbursements to the sector, thereby reviving the business sentiments among the MSMEs. The key highlight which signals the revival is credit to new-to-bank (NTB) which has returned back to pre-COVID levels, while credit to existing-to-bank (ETB) remains buoyant. The recent additional relief measures by the Government, especially in healthcare, travel and tourism, are expected to improve credit offtake in the MSME sector. Going forward, the lenders need to continuously monitor the health of credit portfolios, while sustaining credit growth to MSMEs.”



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Canara Bank restructures loans worth Rs 13,000 crore, MSME, retail worst hit, BFSI News, ET BFSI

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Public sector lender Canara Bank has restructured loans of over Rs 13,000 crore as MSME and retail loans took a beating due to the second Covid wave. Fresh slippages came at Rs 4,253 crore which fell sharply on a sequential basis, 19% of the slippages came from the retail segment and 56% came from MSMEs. The bank also restructured loans worth Rs 13,234 crore under the Covid 2.0 recast scheme, out of this Rs 7,610 crore worth of loans were recast from the retail sector while Rs 3,331 crore came from MSMEs. Special mention category loans or which are due beyond 0-90 days stood at Rs 23,985 crore.

“For the retail and MSMEs borrowers who we have assisted with the Covid recast scheme a part of them have started to pre-pay and we are hopeful that as business momentum recovers a large part of these accounts will normalise,” said L.V. Prabhakar, MD, Canara Bank. “As of June 30, our collection efficiency is 91%, which means instalments are coming. There was stress which was duly addressed by giving them recast benefit.”

Profits nearly tripled to Rs 1,177 crore at the end of the June quarter as fee income and treasury gains grew sharply. The lender had reported profits of Rs 406 crore in the corresponding period last year. Though it’s net interest income was flat at Rs 6,147 crore from Rs 6,096 crore in Q1FY21.

Non-Interest Income which includes fees and treasury gains was up by 67.47% to Rs 4,438 crore in the June quarter versus Rs 2,650 crore a year ago.

The bank reported improvement in asset quality metrics. It’s GNPA ratio came at 8.50% for the quarter under review from 8.84% a year ago. Net NPA ratio was at 3.46%.

Total provisions rose nearly 18% to Rs 4574 crore at the end of the June quarter versus Rs 3880 crore a year ago. This included a one time income tax provision of Rs 845 crores. The bank also holds Covid related provisions of Rs 842 crore.

It’s total loans grew by 5.94% to Rs 6.6 lakh crore, out of which retail loans grew at 9.57% while agriculture loans rose 17.03%. The bank said it is targeting an annual credit growth rate of 7-8%.

Net Interest Margin for the reporting quarter fell to 2.71 per cent for Q1FY22 as against 2.84 per cent for Q1FY21.

The bank’s asset quality profile improved with gross non-performing assets down to 8.5 per cent in June 2021 from 8.84 percent during Q1FY21. The net NPA also dipped to 3.46 per cent during the quarter from 3.95 per cent in June 2020.



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