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The results of the auctions of 5.63% Government Stock 2026 (Re-Issue), GoI FRB 2033 (Re-Issue), 6.64% Government Stock 2035 (Re-Issue) and 6.67% Government Stock 2050 (Re-issue) held on July 16, 2021 are:
Ajit Prasad Press Release: 2021-2022/545 |
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Small Industries Development Bank of India (SIDBI) reported a 3.6 per cent increase in FY21 net profit at ₹2,398 crore against ₹2,315 crore in FY20 on the back of lower interest and finance charges as well as operating expenses.
Net Interest Income (difference between interest earned and interest expended) grew 11.5 per cent year-on-year (YoY) to ₹3,678 crore in FY21 against ₹3,299 crore in FY20, the Development Financial Institution (DFI) said in a statement.
Non-interest income declined 12 per cent YoY to ₹944 crore in FY21 against ₹1,069 crore in FY20.
Interest & finance charges were down about 15 per cent YoY to ₹6,543 crore (₹7,722 crore). Operating declined about 8 per cent YoY to ₹560 crore (₹607 crore).
Net interest margin increased by 10 basis points (bps) to 2.04 per cent as on March 31, 2021 from 1.94 per cent as on March 31, 2020, the DFI said.
Total advances of the DFI, which is engaged in creating an integrated credit and development support ecosystem for Indian Micro, Small and Medium Enterprises (MSME), declined about 6 per cent YoY to ₹1,56,233 crore as of March 31, 2021, from ₹1,65,422 crore as of March 31, 2020.
However, investments jumped 72 per cent YoY to ₹19,153 crore from ₹11,118 crore.
Gross Non-Performing Assets (GNPA) ratio decreased by 45 basis points (bps) from 0.63 per cent to 0.18 per cent, and Net NPA (NNPA) ratio decreased by 28 bps from 0.40 per cent to 0.12 per cent, as on March 31, 2021.
SIDBI said Provision Coverage Ratio (PCR) rose to 93.24 per cent as on March-end 2021 from 78.35 per cent as on March-end level.
There are 23 shareholders in the DFI including State Bank of India (16.73 per cent stake), Government of India (15.4 per cent), Life Insurance Corporation of India (14.25 per cent), National Bank for Agriculture & Rural Development (10 per cent), Punjab National Bank (6.37 per cent) and Bank of Baroda (5.43 per cent).
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E-tender no: RBI/Shillong/Estate/6/21-22/ET/6 The online pre-bid meeting for the captioned tender was held at 12:00 noon on July 12, 2021 through Cisco Webex platform. The meeting was attended by RBI officials and one prospective bidder. The list of participants given below. 2. The meeting began with taking on the queries by the bidder and were suitably clarified by RBI officials. Following queries were clarified during the meeting:
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On July 22, the RBI will purchase four government securities of different maturities through a multi-security auction using the multiple price method.
The central bank said it reserves the right to decide on the quantum of purchase of individual securities, and purchase marginally higher/lower than the aggregate amount due to rounding-off.
The result of the auctions will be announced on the same day, it added.
The first purchase under G-SAP 2.0 aggregating to Rs 20,000 crore was conducted on July 8.
The RBI had conducted an open market purchase of government securities of Rs 1 lakh crore under the G-SAP 1.0 in the first quarter of 2021-22.
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Investment
oi-Vipul Das
Investors are seeking fixed-income instruments in the debt category right now since the stock market is at an all-time high. Talking about fixed-income instruments, bank fixed deposits are the safest investment alternatives in the debt category. The rationale for this is that fixed deposits offer guaranteed returns over a specified investment term, as well as tax benefits if you invest for at least 5 years. Fixed deposits, as is generally known, generate higher interest rates over time, but what if you want to receive the best rates for a short period, maybe in a year?
For both regular and senior citizen depositors having a short-term goal of 1-year, here we have compiled the top 5 banks which not only provide the best rates in the market but ensure the safety of your deposits as they fall under the insurance guidelines of DICGC.
For deposits less than Rs 2 Cr, Ujjivan small finance bank is the only bank that provides the highest interest rates on fixed deposits for a tenure of 1 year. With effect from 5 March 2021, the following interest rates are in force.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 Days to 29 Days | 3.05% | 3.55% |
| 30 Days to 89 Days | 4.05% | 4.55% |
| 90 Days to 179 Days | 4.80% | 5.30% |
| 180 Days to 364 Days | 5.20% | 5.70% |
| 1 Year to 2 Years | 6.50% | 7.00% |
| 2 Years and 1 Day to 3 years | 6.75% | 7.25% |
| 3 Years and 1 Day to 5 Years | 6.75% | 7.25% |
| 5 Years and 1 Day to 10 Years | 5.80% | 6.30% |
| Source: Bank Website |
Utkarsh small finance bank offers the highest interest rates on fixed deposits with a term of one year for deposits under Rs 2 crore. The following interest rates are in effect from July 1, 2021.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 Days to 45 Days | 3.00% | 3.50% |
| 46 Days to 90 Days | 3.25% | 3.75% |
| 91 Days to 180 Days | 4.00% | 4.50% |
| 181 Days to 364 Days | 5.75% | 6.25% |
| 365 Days to 699 Days | 6.25% | 6.75% |
| 700 Days | 6.75% | 7.25% |
| 701 Days to 3652 Days | 6.00% | 6.50% |
| Source: Bank Website |
With effect from May 2, 2021, the interest rates of ESAF small finance bank fixed deposits are in force. Check the most recent rates of the bank below, for deposits of less than Rs 2 Cr.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 days to 14 days | 4.00% | 4.50% |
| 15 days to 59 days | 4.50% | 5.00% |
| 60 days to 90 days | 5.25% | 5.75% |
| 91 days to 181 days | 5.50% | 6.00% |
| 182 days | 5.00% | 5.50% |
| 183 days to 363 days | 6.00% | 6.50% |
| 364 days | 5.25% | 5.75% |
| 365 days & 366 days | 6.50% | 7.00% |
| 367 days to 545 days | 6.25% | 6.75% |
| 546 days | 5.00% | 5.50% |
| 547 days to 727 days | 6.25% | 6.75% |
| 728 days | 5.25% | 5.75% |
| 729 days to 909 days | 6.00% | 6.50% |
| 910 days | 5.25% | 5.75% |
| 911 days to 1091 days | 6.00% | 6.50% |
| 1092 days | 5.25% | 5.75% |
| 1093 days to 1273 days | 5.75% | 6.25% |
| 1275 -1455 days | 5.25% | 5.75% |
| 1275 days -1455 days | 5.75% | 6.25% |
| 1456 days | 5.25% | 5.75% |
| 1457 days-1637 days | 5.75% | 6.25% |
| 1638 days | 5.25% | 5.75% |
| 1639 days-1819 days | 5.75% | 6.25% |
| 1820 days | 5.25% | 5.75% |
| 1821 days to 3653 days | 5.25% | 5.75% |
| Source: Bank Website |
Here are the most recent fixed deposit rates of Suryoday Small Finance Bank which are in force from June 21, 2021 for deposits less than Rs 2 Cr.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 days to 14 days | 3.25% | 3.25% |
| 15 days to 45 days | 3.25% | 3.25% |
| 46 days to 90 days | 4.25% | 4.25% |
| 91 days to 6 months | 4.75% | 4.75% |
| Above 6 months to 9 months | 5.25% | 5.25% |
| Above 9 months to less than 1 Year | 5.75% | 5.75% |
| 1 Year to 1 Year 6 Months | 6.50% | 6.75% |
| Above 1 Year 6 Months to 2 Years | 6.50% | 6.50% |
| Above 2 Years to 3 Years | 6.25% | 6.50% |
| Above 3 Years to less than 5 Years | 6.75% | 6.75% |
| 5 Years | 6.25% | 6.50% |
| Above 5 years to 10 years | 6.00% | 6.00% |
| Source: Bank Website |
For both regular and senior citizens, Equitas small finance bank is promising the best rates on both short-term and long-term deposits. Below are the most recent fixed deposit interest rates of the bank which are in force from 1st June 2021 for deposits less than Rs 2 Cr.
| Tenure | Regular FD Rates | Senior Citizen FD Rates |
|---|---|---|
| 7 – 14 days | 3.50% | 4.00% |
| 15 – 29 days | 3.50% | 4.00% |
| 30 – 45 days | 3.50% | 4.00% |
| 46 – 62 days | 4.00% | 4.50% |
| 63 – 90 days | 4.00% | 4.50% |
| 91 – 120 days | 4.75% | 5.25% |
| 121 – 180 days | 4.75% | 5.25% |
| 181 – 210 days | 5.25% | 5.75% |
| 211 – 270 days | 5.25% | 5.75% |
| 271 – 364 days | 5.25% | 5.75% |
| 1 year to 18 months | 6.35% | 6.85% |
| 18 months 1 day to 2 years | 6.25% | 6.75% |
| 2 years 1 day to 887 days | 6.35% | 6.85% |
| 888 days | 6.50% | 7.00% |
| 889 days to 3 years | 6.35% | 6.85% |
| 3 years 1 day to 4 years | 6.25% | 6.75% |
| 4 years 1 day to 5 years | 6.25% | 6.75% |
| 5 years 1 day to 10 years | 6.50% | 7.00% |
| Source: Bank Website |
Story first published: Friday, July 16, 2021, 16:31 [IST]
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These shares were handed over by the Enforcement Directorate (ED) to the consortium of banks.
Earlier SBI led consortium had realized Rs. 7181.50 crore by liquidating assets handed over to SBI led consortium by ED, the agency said in a press statement on Friday.
In addition, Rs. 1060 crore worth asset has been allowed to the banks by Fugitive Economic Offense Court in PNB/ Nirav Modi Case & Rs. 329.67 Crore has been confiscated by ED under provisions of Fugitive Economic Offenders Act, the agency added.
On July 1 Purvi Modi (sister of Nirav Modi) transferred Rs. 17.25 crore from proceeds of Crime from her foreign bank account to ED.
Few days back, ED has further handed over assets worth Rs. 3728.64 Crore to the SBI led consortium including shares of Rs. 3644.74 Crore, Demand Draft of Rs. 54.33 Crore and immovable properties worth Rs. 29.57 Crore.
The statement issued by the agency further added that Vijay Mallya, Nirav Modi and Mehul Choksi have defrauded Public Sector Banks by siphoning off the funds through their companies which resulted in total loss of Rs.22,585.83 Crore to the banks.
Till date ED has transferred assets worth Rs. 12,762.25 Crore to the Public Sector Banks and confiscated assets of Rs. 329.67 Crore. ED had also recovered Rs. 17.25 Crore from Purvi Modi. As on date, assets worth 58% of total loss to the banks have been handed over to Banks/confiscated to government of India.
The agency claimed that till date it has attached/seized assets of Rs. 18,217.27 Crore under the provision of Prevention of Money Laundering Act (PMLA).
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The demand for housing is back after the second Covid wave and overall tailwinds are positive, believes Ravi Subramanian, Managing Director and CEO, Shriram Housing Finance. In an interview with BusinessLine, he said the company is looking at faster growth after the performance in June. Housing finance companies should be allowed to charge prepayment penalty in initial years, he further said. Edited excerpts:
How is the demand for housing post the second Covid wave?
Demand is back. In June, we did 80 per cent of our regular disbursals. Collections were back on track and we collected from almost 99 per cent of the customers we had originated in the last three years. It has improved further in July. The cheque bounce rates have reduced and in July were the lowest in the last 12 months. People are now reconciled to Covid, business is getting back on track. If we get another two months, business will be back roaring across the country.
Which are the segments where there is demand?
We are seeing a lot of demand in Tier 2 and Tier 3 towns. People are expanding their houses. Self-construction is giving us good volumes. Smaller and affordable housing projects are seeing a fair bit of traction. There is a lot of demand in the Rs 20 lakh to Rs 25 lakh segment, and the higher end of the spectrum, which is absolute ultra luxury. Our NPAs are well under control. NPAs had deteriorated by about 20 basis points in April, May and June. But given that our collections have picked up and bounce rates have come down, I expect September to be a far better quarter.
What kind of growth are you targeting?
Last year, the Covid impact stayed till the end of the first quarter. We started disbursing at the end of July and early August. Despite that, we grew our disbursals by about 90 per cent last year. This year, disbursals have started in June. If I get a clear runway from now on till the end of the year without a third wave, then disbursals could increase by at least 60 per cent to 70 per cent. Last year, we did about Rs 2,100 crore and this year we will do at least Rs 3,000 crore provided we get a clear runway from now till March. We will end up with assets under management of about Rs 5,500 crore to Rs 5,700 crore. June has brought the growth agenda back on the table.
How do you perceive competition from banks that offer low interest rates?
HFCs should be allowed to charge a prepayment penalty in case the customer moves in the first two-and-a-half to three years. The low interest rates are not much of an issue. There are many critera and not many customers meet it. It is a headline rate. My attrition last year for balance transfers was 9.5 per cent. We have a fairly aggressive retention process where every customer who wants a foreclosure letter is spoken to, their needs are assessed and we try and retain the customer.
How much restructuring have you done?
We did Rs 58 crore of restructuring in the first round on a Rs 4,000 crore AUM. About Rs 26 crore to Rs 27 crore were from customers who were current and not delinquent. In round two, we did a similar number of Rs 58 crore to Rs 60 crore of restructuring. So my total restructuring is about about 2.6 per cent of my total book.
Are you looking at any acquisitions?
We were interested in an HFC buyout earlier this year but the target company pulled out at the last stage. We will be happy to look at acquisition opportunities for an HFC with an AUM of over Rs 1,500 crore. If we don’t get a good acquisition opportunity, we will build it.
What is your strategy for expansion?
We are looking at faster growth now. Last year, we opened 26 branches of Shriram Housing co-located with Shriram City Union Finance in Andhra Pradhesh and Telangana. This year, we had initially planned to get to 100 branches from 26 branches this year. But after our experience in June, we have decided to fast-track it to all branches of Shriram City Union Finance in the two states by September.
Have you become more careful in underwriting customers?
Caution can never be wished away in the lending business. We do not want to do large value loans. We will do restricted LTV. We will not do new to credit customers. There was a time when our new to credit customers were 25 per cent to 30 per cent. Now, it is at about eight per cent to nine per cent. About 80 per cent of our customers have a credit score of more than 700.
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Department of Supervision (NBFC), Reserve Bank of India, Hyderabad invites e-tender for the publication of advertisements in newspapers regarding ‘Cancellation of Non-Deposit taking NBFC license and Cancellation of CoRs during August 2020 – June 2021’. The tendering process shall be done through the e-tendering portal of MSTC Ltd (http://mstcecommerce.com/eprochome/rbi) as per the terms & conditions. 2. All empanelled advertisement agencies shall submit their quotations through the above referred MSTC portal to participate in the e-tendering process. 3. The estimated budget for the advertisements is Rs.8 lakh (approx.) 4. The schedule for the e-tendering process is as under:
5. Quotations received other than through MSTC portal will not be considered. 6. Amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website and MSTC Website as given above and will not be published in newspapers. Officer-in-Charge |
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Now, that the second wave is almost over– what is your assessment, how large, how deep has been the impact of the second wave on the economy?
My sense is that post second week of June onwards, we are certainly seeing the economic activity coming back, but yes, of course, from middle of April till mid of June things were pretty bad. I would say that the silver lining is that from 16th onwards, things have started looking up and we have seen the situation where unlock has started happening and also the vaccination numbers have started going up. So, that is slowly helping in people to regain the confidence and the economy to recover back. To that extent, it is certainly a very welcome situation.
Has the economic activity gone back to March 2021, not March 2020, I am talking about the time when the first wave had finished and the second wave had not started which is May and April 2021?
In certain areas, yes, but may not be in all areas, for instance, when it comes to the commodity sector, certainly it is moving and there we are very much near to what it was in March 2021 or may be from January to March 2021. When it comes to the consumer demand it is inching towards that, not yet at that level but yes, of course, it is inching. I would say that every subsequent day when the vaccine numbers are improving the confidence is going up. We are inching towards that kind of a normalcy.
In terms of the impact of the second wave, what was the preparedness of SBI?
Well, there was a huge difference particularly during the period of the first wave, it was more like a whole lot of uncertainty which people were grappling with. Well, of course, when the second wave came, it is also attributed to the fact that some of the citizens had lowered their guards and probably partly because of the Covid fatigue also- they were not taking all the precautions, but the redeeming feature is that the vaccine is available during the second wave and people have started getting vaccinated. So, I would say that though the intensity of the second wave was very high but the only thing is that as the vaccine is available and it is now being done at a much faster pace to that extent it has helped people to recover as far as their fear psychosis is concerned.
Are you now concerned about inflation, for the moment we can use the word supply side constraints, but with commodity prices coming back and demand also normalising, could inflation be a real concern?
To my mind, inflation is essentially on account of the supply side factors which is partly attributed to the imbalance in the supply chain side of the corporates. So, I think with the unlock happening, the supply chain imbalance will get addressed and perhaps it will address the supply side challenges also which will certainly help in reducing the inflation. That is how I look at it.
Now, everyone is curious to understand the real impact on NPAs for SBI because of the second wave. First wave moratorium was there but this time around at least on the retail side there is no moratorium. What is your understanding on how this second wave could have impact on NPAs?
Well, of course, some kind of a temporary disruptions were there because the cash flows for the SMEs were certainly affected. But, I would say that the timely announcement of the resolution framework by the RBI, by coming out with the resolution framework for up to 50 crore worth of exposure for SME that has come very handy and it has helped in extending the repayment period and giving the required relief to the SME sector. As far as the housing loans were concerned, there also people are in a position to avail the resolution framework and also have the relief. So, I would say that moratorium may not be there but yes, of course, relief was extended by RBI for resolution, so that has come very handy.
Where do you see credit growth will settle because historically, you have always managed to grow at a credit growth rate which is about a percent, percent-and-a-half higher than the industry?
I would get guided by the projections given by RBI which are indicating some kind of a 7.9% kind of growth and we have generally seen in the past that we have been growing at least 1% over and above what the RBI expect the GDP to grow or maybe for that matter the actual growth of the GDP in the economy. So, if at all the economy grows at about 8%, we expect to grow our loan book at about 9%.
So, when do you see growth coming back both for term loans and for working capital because they are important components to understand which end of the economy is picking up?
I think it would be universally distributed.
What about the retail end of the business? SBI has a very large retail book, given that the number of people affected in the second wave was very large, do you think that end of the business could slow down significantly?
If at all the early indications which I have about the first quarter, it may not be probably as strong for the retail as it was in the last quarter of the previous financial year. So, that is partly attributed to the fact that there was whole lot of challenges of health and hygiene for people and naturally at that point of time, they might not have thought in terms of scaling up their demand for the retail. Going forward, once the economy comes back and once the jobs also restored, perhaps a shortfall which was there in the first quarter would be made up this.
Can I say that for the moment SBI is not worried about delinquencies in the retail book?
Whatever little stress we are seeing, that should be possible for us to pull back because we have seen— for out of 90 days about 60 days was the time when there was no mobility for people, so reaching out to the borrowers was always a challenge. So, I think after 16th of June the mobility has improved and our pace of pulling back any such assets has also improved significantly. As of now, it does not look to be as much of a challenge.
SBI NPAs or NPA cycle is at a five-year low. Can I also say that the second wave is unlikely to change the trajectory because the trajectory has been declining, will the trajectory go slightly off the mark because of the second wave?
As I invariably say, that as far as SBI is concerned, it is proxy to the Indian economy and the shape of Indian economy, the health of Indian economy eventually shows up in the book also. But we do have the capability to manage the book to some extent and that I think we will be ensuring, we will continue to do our bit in terms of ensuring that the asset quality is maintained to be the best in the given situations and circumstances.
In the last three, four years SBI has really unlocked their subsidiaries, it was SBI Life, then last it was SBI Cards. In FY22 will SBI MF go public?
No, it is a joint venture between a French partner Amundi. We are in touch with them and we have to have a unanimous decision on this subject and once we will come to a stage where we would be in a position to announce, we would be more than happy to share that with all of you.
Paytm is planning to go public and their valuations could be anywhere between 20 to 22 billion dollars. Are you somewhere tempted to take Yono public?
I believe that even if we go for any kind of an IPO or any kind of a listing, my objective would be that since the entity would have the SBI names attached to it, the stakeholders should have long term value coming out of it. So, I think temptation is certainly not there and our intention is always to create value for our stakeholders.
SBI has managed to in a sense stand apart in the Covid environment where a lot of banks were struggling with technology, you have managed to keep your technology backbone very solid. That is very impressive, how did you achieve it?
I would attribute it to the urge of the team to achieve the excellence and I think this is something which is more like a value nurtured into the cadre over the years, so eventually that shows up into this kind of a performance.
Would SBI Cards be open to any inorganic acquisition because the Citi Wealth Management and the credit card business is on the block, would you be interested in buying that?
I think when it comes to the question of acquisition, the pricing always matters, so all such decisions have to weigh the pricing and also the opportunity. This will be the guiding factor for any such decision.
There are two interesting trends we spoke about fintech and the other one is consolidation in the PSU banking space, what are your thoughts on both? Fintech is disruptive and the way PSU banking industry is consolidating also could be disruptive and very favourable for large players?In fact, fintechs are as of now operating in a very niche segment, so they are not into a full scale banking operation. To that extent, I would say that it offers an opportunity for the full scale bank like us to collaborate. We are quite open and we are very happy to look at their ideas and incorporate their thoughts and we value whatever incremental value creation they are doing by virtue of having a focus on the customer experience and also a focus leveraging analytics etc. We are happy to incorporate all those into our system and wherever required we are quite happy to collaborate with these fintechs also.
Yes, consolidation is happening and perhaps if I really look at it we continue to have a deposit market share which is around 23% and our loan book market share is somewhere around 20% plus. So, that way I think we feel that we are quite well placed. But having said that, we are quite cognisant of the opportunities which are available and we would like to scale up our market share even further by leveraging technology, analytics and by collaborating with the fintechs.
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