Month: August 2021

Karur Vysya Bank reports marginal growth in Q1 net profit at Rs 109 crore

Banking & Finance

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The cost of deposits has improved by 84 basis points (bps) to 4.53% in the quarter as compared to 5.37% in the same period previous year, KVB said in a release.

Karur Vysya Bank (KVB) on Wednesday registered marginal growth in net profit at Rs 109 crore for the first quarter of FY22 as against Rs 106 crore in the corresponding quarter of the previous financial year.

The bank’s total income was slightly lower at Rs 1,596 crore in the quarter under review as compared to Rs 1,693 crore in the same period last year.Its net interest income improved 14% to Rs 638 crore as against Rs 562 crore while net interest margin (NIM) stood at 3.55%.

The cost of deposits has improved by 84 basis points (bps) to 4.53% in the quarter as compared to 5.37% in the same period previous year, KVB said in a release. The non-interest income (including treasury profit) dropped to Rs 220 crore in Q1FY22 as compared to Rs 317 crore in Q1FY21, when there was a higher treasury profit of Rs 178 crore earned, as compared to Rs 35 crore during the current period.

Commission- and fee-based income have improved by Rs 26 crore to Rs 147 crore from Rs 121 crore while operating expenses stood at Rs 429 crore as compared to Rs 405 crore. KVB said its total business was at Rs 1,16,713 crore, registering 7.4% growth. Credit portfolio grew 8% and gross advances stood at Rs 52,315 crore, up from Rs 48,617 crore. Improved credit off-take in retail and business segment as well as jewel loan portfolio, backed by digital processing and improved sourcing of loans through various channels aided credit growth.

Jewel loan portfolio registered growth of Rs 3,258 crore (32.8%) and was at Rs 13,206 crore. Total deposits grew Rs 4,333 crore (7%) to `64,398 crore, up from Rs 60,065 crore. Growth was routed through sustained improvement in CASA portfolio and retail-term deposits, it said. Gross NPA has declined to 7.97% as compared to 8.34% while net NPA inched up to 3.69% as against 3.44%. Provision coverage stood at 72.40%.

On the capital adequacy front, the bank said the Basel III CRAR was at 19.06% (with CET1 ratio of 17.04%), up from 18.14%.

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SBI reports 55% jump in profits in Q1; retail asset quality worsens across segments as Covid second wave hits collections

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SBI has seen a pullback of about Rs 4,700 crore of slippages in the last one and half months, he added.

State Bank of India’s (SBI) standalone net profit rose 55% year-on-year (y-o-y) to Rs 6,504 crore in Q1FY22 on the back of a 48% jump in non-interest income. However, the bank reported a deterioration in asset quality across segments of retail credit as collections were hit by the second wave of Covid-19.

In the June quarter, slippages fell 29% sequentially to Rs 15,666 crore. Of the total slippages, Rs 6,416 crore came from the small and medium enterprises (SME) segment and Rs 5,268 crore from retail. The ratio of gross non-performing assets (NPAs) in the retail segment was 1.28%. The bank reported an NPA ratio of 2.24% in its gold loan book and 1.39% in its home loan book.

Half of SBI’s home loans are to the non-salaried segment and some of them are linked to SME borrowers, said Dinesh Khara, chairman, SBI. He attributed the high NPA ratio in gold loans to the inability of collection staff to reach borrowers amid mobility restrictions.

Khara said after the second wave receded, the bank has seen a decent pullback in home loans and the other retail segments. “The SME sector is a little more sticky and we are seeing better traction for debt restructuring from this sector,” Khara said, adding that of the Rs 7,300 crore of recast requests, about Rs 1,400 crore has come from the SME sector. Recasts for SME accounts worth Rs 1,100 crore have been carried out.

“Going forward, the lockdowns are absent and revival of economic activity is being seen and these are some of the positives. The slippages came under unusual circumstances on account of lockdowns and once economic activity comes back, slippages would also be in a position to be pulled back,” Khara said.

SBI has seen a pullback of about Rs 4,700 crore of slippages in the last one and half months, he added. The bank’s overall asset quality suffered, with the gross NPA ratio rising 34 bps sequentially to 5.32% and the net NPA ratio rising 27 bps to 1.77%.

SBI’s net interest income (NII), or the difference between interest earned and expended, rose 3.7% y-o-y to Rs 27,638 crore. The domestic net interest margin (NIM) rose 4 basis points (bps) sequentially to 3.15%. Khara said as credit offtake improves, the bank expects an improvement in NIMs. He guided for a credit growth of around 9% in FY22.

The bank’s gross advances grew 5.8% y-o-y to Rs 25.23 lakh crore as on June 30, 2021. Retail loans grew 16.5% y-o-y, while the corporate loan book shrank 2.33%. The chairman added that SBI has seen an improvement in utilisations in the mid-corporate segment in FY22. “We are seeing that in certain sectors like iron and steel, there is an improvement in activities. We saw an under-utilisation of about 30% last time when we met, but this time in the commercial client group, it is 25%, a slight improvement,” he said.

SBI will remain focused on the home loan market and it sees no reason to reorient its strategy there. “When it comes to home loans, the market potential is huge and there is no reason for us to slow down. We have mastered how to ensure right appraisals and timely distribution and would like to continue doing well,” Khara said.

Deposits grew 8.8% y-o-y to Rs 37.21 lakh crore as on June 30, with the current account savings account (CASA) ratio up 63 bps y-o-y to 45.97%.

SBI’s shares ended 2.37% higher than their previous close on the BSE at Rs 457.05 on Wednesday.

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Rajya Sabha nod: DICGC Bill to help small depositors, says FM Nirmala Sitharaman

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The Bill proposes to give customers access to their deposits up to Rs 5 lakh within just 90 days if their stressed banks are placed under moratorium.

The Deposit Insurance Credit Guarantee Corporation (DICGC) Amendment Bill, which was approved by the Rajya Sabha on Wednesday amid Opposition uproar, will help small depositors, including those of the crisis-ridden PMC Bank, finance minister Nirmala Sitharaman said.

The Bill proposes to give customers access to their deposits up to Rs 5 lakh within just 90 days if their stressed banks are placed under moratorium. The Bill covers all banks, including co-operative banks.

Similarly, the Upper House also cleared the Limited Liability Partnership (Amendment) Bill 2021, which seeks to decriminalise a dozen offences and enable such entities to enjoy the same benefits as large companies. Hundreds of start-ups, chartered accountant firms and others that are registered as LLPs are expected benefit from this move.

The DICGC (amendment) Bill will cover 98.3% of depositors and 50.9% of deposit value in the banking system, way above the global level of 80% and 20-30%, respectively, Sitharaman had said last week.

Also, as per the extant system, customers of a fallen bank could lay their hands on the insured deposit amount only after the bank’s liquidation, which would take even 8-10 years. So, the amendments were brought in to ensure that customers, especially the small ones, have time-bound access to the insured amount to meet financial exigency. Last year, the government had raised the limit of bank deposits insured under the DICGC Act to Rs 5 lakh from Rs 1 lakh.

The DICGC is a wholly-owned arm of the Reserve Bank of India (RBI), which offers deposit insurance. If a customer’s deposit amount crosses Rs 5 lakh in a single bank, only up to Rs 5 lakh, including the principal and interest, will be paid by the DICGC if the bank turns bankrupt.

Before the hike last year, the government had kept the deposit cover unchanged at Rs 1 lakh since May 1993, when it was raised from Rs 30,000 after the security scam in 1992 had led to the liquidation of Bank of Karad in Maharashtra.

As for decriminalising certain offences, once the LLP (amendment) Bill is cleared by both the houses of Parliament, only 22 penal provisions, seven compoundable offences and non-compoundable offences will remain.

After the Cabinet approval to this Bill last week, Sitharaman said: “Between large companies that are well-regulated and small proprietorships, LLPs did not have benefit of either simplified regulation or ease of practice under proprietorship. With Wednesday’s Cabinet decision, we are bridging the gap and making LLPs more attractive, easy to handle.”

The corporate affairs ministry has said that the objective of this move is to remove criminality of offences from business laws where no mala-fide intentions are involved.

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RBI New Rule- Be Extra Careful When Issuing Cheque For Payment Or Else Bear Penalty

Personal Finance

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Planning

oi-Roshni Agarwal

|

As per the RBI rules, NACH or National Automated Clearing House has been made available on all days from August 1, 2021. Consequently, NACH will be available on all 7 days of the week.

RBI New Rule: Be Careful When Issuing Cheque Or Else Bear Penalty

The central bank on June 4 said, “In order to further, enhance customer convenience, and leverage the 24×7 availability of RTGS, NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021”

What is NACH?

NACH is the National Payments Corporation of India (NPCI) initiative for banks, financial entities, corporates and government for enabling interbank, high-volume, digital transactions that are repetitive as well as periodic in nature. The system can be used both ways i.e. for making bulk payments such as dividend, salary, pension etc. as well as for bulk transactions that involve collection of funds against telephone bill, investment in mutual funds, insurance premium etc.

National Automated Clearing House (NACH) is a centralised system, launched with an aim to consolidate multiple ECS systems running across the country and provides a framework for the harmonization of standard & practices and removes local barriers/inhibitors. NACH system will provide a national footprint and is expected to cover the entire core banking enabled bank branches spread across the geography of the country irrespective of the location of the bank branch.

What you should note or be mindful about in view of the new NACH rules?

Now as NACH shall be running or will be available on all days, you need to be extra careful when making a payment via cheque as it can go for clearing and get encashed even on non-working days and holidays. So, here in the care that is needed from your end is that you need to ensure that the bank account has sufficient balance especially when the cheque is being deposited for payment. If the cheque bounces, you will be charged a penalty amount.

Notably, NACH in the current pandemic time has enabled transfer of government subsidies in a transparent and timely manner. Also it is the most adopted and prominent method in the DBT or direct benefit transfer scheme.

GoodReturns.in

Story first published: Wednesday, August 4, 2021, 22:27 [IST]



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Sharekhan Has A “Buy” On These 2 Stocks For A Decent Upside

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Inox Leisure: Buy The Stock, as fresh content to bring hope

Sharekhan believes that the stock of Inox Leisure can rally to levels of Rs 400, as fresh content offers hope.

Current market price Rs 314
Target price Rs 400

“We expect meaningful recovery in box-office collections during 2HFY2022 given strong content pipeline, higher pace of vaccination, and closure of some single screens,” the brokerage has said.

According to it, big-budget movie producers will start announcing the release dates of their movies in the coming weeks as they have been waiting to release their movies in theatres post reopening.

Inox Leisure: Price target of Rs 400 on the stock

Inox Leisure: Price target of Rs 400 on the stock

Inox Leisure has indicated that it will be resuming operations at 113 properties having 459 screens in the coming days in a staggered manner.

“We expect the state governments of Maharashtra and Tamil Nadu would allow to reopen cinema halls soon as COVID vaccination gains pace. We believe Inox Leisure has done a commendable job in keeping fixed expenses under control during Q1FY2022. Given the strong content pipeline across languages, announcement of release date of fresh big-budget content, robust consumer demand, and higher pace of vaccinations, we expect a meaningful recovery in Indian multiplex industry in the second half of FY2022,” the brokerage has said.

Carborundum Universal

Carborundum Universal

Sharekhan also has a buy call on the stock of Carborundum Universal with a target price of Rs 854 on the stock.

Current market price Rs 706
Target price Rs 854

The company says that the strong domestic operations led by core user industries along with improving overseas operations aided by capacity expansion, success of new products, and being an alternative global supplier are likely to aid domestic and exports growth.

“Strong balance sheet, healthy return ratios and consistent dividend paying record are key salient features,” the brokerage says.

Carborundum Universal: To benefit from multiple factors

Carborundum Universal: To benefit from multiple factors

According to Sharekhan the company stands to benefit from multiple factors such as a broad-based recovery in industrial capex, China +1 strategy, strong initiatives of the Government of India to support domestic manufacturing and healthy demand prospects for regular and specialty products.

“The company is currently trading at a price to earnings multiple of 30 times and 27 times on FY2023E/FY2024E earnings, which we believe is reasonable, considering its strong earnings growth outlook and robust balance sheet. Hence, we recommend a Buy on Carborundum Universal with a revised target price of Rs 854,” the brokerage has said.

Disclaimer

Disclaimer

The above stocks are based on the report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.



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Reserve Bank of India – Notifications

Bank Jobs

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April 14, 2015




Dear All




Welcome to the refurbished site of the Reserve Bank of India.





The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.




With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.




The site can be accessed through most browsers and devices; it also meets accessibility standards.



Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.



Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.



Thank you for your continued support.




Department of Communication

Reserve Bank of India


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RBI approves re-appointment of Prakash Chandra as Non-Executive Chairman of RBL Bank

Banking & Finance

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The Reserve Bank of India has approved the re-appointment of Prakash Chandra as Non-Executive (Part Time) Chairman of RBL Bank with effect from August three for a three-year period.

“Chandra’s reappointment and revision in his remuneration had also been approved by the Board of Directors pursuant to the recommendation of the Nomination and Remuneration Committee of the Board, which shall be placed for the approval of the Members of the Bank at the ensuing Annual General Meeting,” RBL Bank said in a stock exchange filing on Wednesday.

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PNB Housing Finance Q1 net zooms 91% sequentially to ₹243 crore

Banking & Finance

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PNB Housing Finance Ltd (PNBHFL) on Wednesday reported a consolidated net profit of ₹243 crore for the first quarter ended June 30, 2021. This was a 91.34 per cent increase over net profit of ₹127 crore in the previous March 2021 quarter.

However, on a year-on-year basis, bottomline fell marginally in first quarter this fiscal when compared to net profit of ₹257 crore recorded in same quarter last fiscal.

Total income down

Total income for the quarter under review decreased to ₹1,693 crore from ₹1,834 crore in the March quarter. In June quarter last fiscal, total income stood at ₹1,872 crore.

Also read: CCI green signals Carlyle Group-led ₹4,000 cr investment in PNB Housing

Commenting on the Q1 financial performance, Hardayal Prasad, Managing Director & CEO, said in a statement, “The second wave of Covid-19 impacted the business performance of the company as compared to last quarter. Despite this, the company recorded healthy profits and margins during the quarter. The company continues to focus on increasing its digital footprints, grow retail business with efficient underwriting and collection models and optimise costs in order to create value for all its stakeholders.”

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New DICGC Bill will take care of PMC depositors’ woe: FM

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The Rajya Sabha passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill on Wednesday. The Bill was passed without any major debate as the Opposition members were on the Well of the House demanding a discussion on the Pegasus spyware issue.

Piloting the Bill, Union Finance Minister Nirmala Sitharaman said the Bill is aimed at protecting small depositors. She also cited the example of Punjab and Maharashtra Cooperative (PMC) Bank and said the provisions in the Bill will also help the depositors in the bank. Depositors in PMC Bank have been fighting to get their deposits back as RBI imposed restrictions on the bank’s operations for about two years.

Sitharaman proposed an amendment to Section 15 to enable the Deposit Insurance and Credit Guarantee Corporation to raise the ceiling on the premium amount with the previous approval of the RBI. The Bill also has a new section 18A to enable interim payment to be made by the Corporation to depositors in those banks for whom any direction or prohibition or order or scheme under any of the provisions of the Banking Regulation Act, 1949 has been issued, imposing restrictions on depositors in the banks from accessing their deposits.

Sitharaman said the new Bill will help depositors of 23 cooperative banks which are under stress. “PMC Bank depositors will also benefit from this bill,” she said. Sitharaman, in her 2020 Budget Speech, had permitted the Corporation to increase deposit insurance coverage for a depositor from ₹1 lakh to ₹5 lakh per depositor per bank.

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