Month: August 2021

Tally Solutions and Cosmea Financial Holdings apply to RBI for SFB licence

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The Reserve Bank of India (RBI) on Monday said it received applications from Bengaluru-based Tally Solutions and Mumbai-based Cosmea Financial Holdings for ‘on tap’ license to operate as small finance banks.

Tally Solutions delivers business software for small and medium businesses (SMBs). Cosmea Financial Holdings is involved in activities auxiliary to financial intermediation, according to zaubacorp.com.

With these applications, the number of applicants wanting to set up small finance banks (SFB) has gone up to six.

In April 2021, the central bank had announced that four applicants — VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta and Dvara Kshetriya Gramin Financial Services — had applied to set up an SFB under the December 2019 Guidelines for ‘on tap’ licensing.

SFBs primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Guidelines

As per the guidelines for ‘on tap’ licensing of SFBs, the minimum paid-up voting equity capital/net worth requirement is ₹200 crore (₹100 crore earlier).

For urban co-operative banks (UCBs), desirous of voluntarily transiting into SFBs, the initial requirement of net worth is ₹100 crore, which will have to be increased to ₹200 crore within five years from the date of commencement of business.

Payments banks can apply for conversion into SFB after five years of operations, if they are otherwise eligible as per these guidelines.

Further, SFBs will be given scheduled bank status immediately upon commencement of operations and they will have general permission to open banking outlets from the date of commencement of operations.

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Tally Solutions and Cosmea Financial Holdings apply to RBI for SFB licence

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The Reserve Bank of India (RBI) on Monday said it received applications from Bengaluru-based Tally Solutions and Mumbai-based Cosmea Financial Holdings for ‘on tap’ license to operate as small finance banks.

Tally Solutions delivers business software for small and medium businesses (SMBs). Cosmea Financial Holdings is involved in activities auxiliary to financial intermediation, according to zaubacorp.com.

With these applications, the number of applicants wanting to set up small finance banks (SFB) has gone up to six.

In April 2021, the central bank had announced that four applicants — VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta and Dvara Kshetriya Gramin Financial Services — had applied to set up an SFB under the December 2019 Guidelines for ‘on tap’ licensing.

SFBs primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Guidelines

As per the guidelines for ‘on tap’ licensing of SFBs, the minimum paid-up voting equity capital/net worth requirement is ₹200 crore (₹100 crore earlier).

For urban co-operative banks (UCBs), desirous of voluntarily transiting into SFBs, the initial requirement of net worth is ₹100 crore, which will have to be increased to ₹200 crore within five years from the date of commencement of business.

Payments banks can apply for conversion into SFB after five years of operations, if they are otherwise eligible as per these guidelines.

Further, SFBs will be given scheduled bank status immediately upon commencement of operations and they will have general permission to open banking outlets from the date of commencement of operations.

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India Mortgage Guarantee Corporation partners Clix Housing Finance

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India Mortgage Guarantee Corporation (IMGC), the country’s first and only mortgage guarantee company, has entered into a partnership with Clix Housing Finance Limited (Clix HFL) to offer mortgage guarantee backed home loan products for salaried and non-salaried customers in the affordable housing segment.

Speaking on the partnership, Mahesh Misra, CEO, IMGC said in a statement “We are very pleased to partner and work with Clix in strategically identified segments and are confident that this will be a hugely successful partnership in the months to come. Over the years we have worked with our lender partners to create customer-centric products. We have a defined execution roadmap with emphasis on driving financial inclusion through this partnership with Clix”.

Gaurav Pawra, CEO, Clix Housing Finance, said, “With the rising demand in the affordable housing segment, this strategic partnership would support to fulfil ‘early home ownership’ dreams of the first-time homebuyers and enable Clix to enhance its penetration in the low & mid-market segment besides mitigating the credit risk in case of default”.

Affordable housing

Affordable housing is one of the most promising segments in the retail finance space and IMGC has been playing a crucial role in helping lender partners foray into this space with minimal risk and helping home buyers fulfil their dreams of owning a home through higher eligibility and lower EMIs.

Mortgage guarantee backed home loans will broaden Clix HFL’s coverage of home loan products and customer segments enabling more business while also supporting the flagship mission of Government of India of “Housing for All by 2022”

Also read: Tailwinds far outweigh turbulence in housing finance industry

Pawra said that Clix has been consistently working on making the loan process simpler and accessible for all since the company’s very inception. “With this partnership, we shall be able to tap a wider range of customers, improve conversion rates and offer higher loan amounts to customers. We are truly pleased to have IMGC on board with us on this journey towards building a more inclusive society, which has easy access to affordable housing loans,” he added.

IMGC is providing various surrogate products for self-employed customers like Banking Product, Low LTV Product, Assessed Income Product to cater to the needs of varied customers. IMGC has currently tie-ups with more than 18 lenders comprising of banks, housing finance companies and NBFCs and it has guaranteed home loans worth ₹12,000 crore to more than 60,000 home loan borrowers.

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Facebook, Xiaomi target India’s $1 trillion digital loan market

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India’s digital loan market is becoming a battleground for companies from Facebook Inc. to Xiaomi Corp., as they seek a foothold in what’s set to be a $1 trillion industry.

Facebook this month said India would be the first country where it rolls out its small business loan programme offering loans via a partner to firms that advertise on its platform. The loans will range from ₹500,000($6,720) to ₹5 million with interest rates of 17%-20%, potentially without collateral.

The social media giant’s foray into India coincides with Xiaomi’s, the Chinese maker of everything from rice cookers to gaming monitors, plans to offer loans, credit cards and insurance products in partnership with some of the nation’s biggest banks and start-up digital lenders, the Press Trust of India reported, citing local head Manu Jain.

Amazon.com also made its maiden investment in the country’s wealth management sector this month, participating in a $40 million round by fintech start-up Smallcase Technologies Pvt.

Also read: FB ties-up with Indifi for small business loans initiative

Alphabet Inc.’s Google is also upping its game. After offering wealth management products such as digital gold, mutual funds on its popular Google Pay platform, it’s now tied up with small Indian lenders for opening time deposits for its customers.

Digital lending growing

India’s digital payments market is drawing the attention of some of techs biggest names after online transactions surged during the pandemic and traditional lenders turned cautious following a rise in bad debt. Digital lending is expected to treble to $350 billion by 2023 and reach a total of $1 trillion in the five years since 2019, according to estimates from the Boston Consulting Group.

“The payment business hardly makes any money, but lending makes a lot of money,” said Saurabh Tripathi, Managing Director and senior partner at BCG’s financial institutions practice. “Indian consumers are waiting for more appropriately designed digital experiences and many players are jumping at this opportunity.”

While the potential of India’s loan market is significant, so too are its risks. The nation’s bad loan ratio is expected to rise to 11.3% by March making it the worst performer among major countries for a second consecutive year.

As well as addressing loan collections by digital firms, the Reserve Bank of India is also planning to regulate online lenders, which include more than 300 start-ups.

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Citibank Revises Interest Rates On Fixed Deposit: Check Latest Rates Here

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Citibank Time Deposit Interest rates

Below are the most recent interest rates on fixed deposits of Citibank for the general public based on deposit amounts of less than Rs 2 Cr.

In Days
P.A. Rate Annualised Yield
7-10 Days 1.85% –
11-14 Days 1.85% –
15-25 Days 1.90% –
26-35 Days 1.90% –
36-45 Days 2.55% –
46-60 Days 2.55% –
61-90 Days 2.55% –
91-120 Days 2.55% 2.55%
121-150 Days 2.55% 2.55%
151-180 Days 2.55% 2.56%
181-270 Days 2.60% 2.61%
271-364 Days 2.75% 2.77%
365-400 Days 2.75% 2.78%
401-540 Days 2.75% 2.78%
541-731 Days 3.00% 3.06%
732 – 1095 Days 3.50% 3.61%
>=1096 days 3.50% 3.67%
Source: Bank Website, W.e.f. August 31, 2021

Citibank Time Deposit Interest rates For Senior Citizens

Citibank Time Deposit Interest rates For Senior Citizens

For a deposit amount of less than Rs 2 Cr, senior citizens will get the following interest rates on their deposits. For senior citizens, the annualized yield is determined at the lower end of each tenure bucket.

Tenure P.A. Rate Yield
7-10 Days 2.35% –
11-14 Days 2.35% –
15-25 Days 2.40% –
26-35 Days 2.40% –
36-45 Days 3.05% –
46-60 Days 3.05% –
61-90 Days 3.05% –
91-120 Days 3.05% 3.05%
121-150 Days 3.05% 3.05%
151-180 Days 3.05% 3.06%
181-270 Days 3.10% 3.11%
271-364 Days 3.25% 3.28%
365-400 Days 3.25% 3.29%
401-540 Days 3.25% 3.30%
541-731 Days 3.50% 3.58%
732 – 1095 Days 4.00% 4.14%
>=1096 days 4.00% 4.23%
Source: Bank Website, W.e.f. August 31, 2021

Citibank Tax Saver Fixed Deposit

Citibank Tax Saver Fixed Deposit

Investors who want to seek tax benefits on their deposits can also open a Tax Saver Deposit account at Citibank. One can invest in the tax saver deposit scheme with a minimum amount of Rs 1000 with a maximum amount of up to Rs 1.5 lakhs for a lock-in period of 5 years. Under the tax saver deposit scheme of Citibank, both regular and senior citizens will get quarterly compounded interest / simple interest quarterly payout options.

Term deposits up to Rs 1,50,000 deposited for five years are eligible for tax benefits under Section 80C of the Income Tax Act, 1961, according to the Finance Act of 2006. Owing to the 5-year lock-in term for Tax Saving Deposits under the IT Act, no premature withdrawals are permitted, which investors should be aware of. Here are the interest rates on tax saver deposits of Citibank for both the general public and elderly people. You can contact your relationship manager or the nearest Citibank branch to know the interest rates on deposits of more than or equal to Rs 10 Crores.

Tenure in Days P.A. Rate Annualized Yield
5 Years 3.50% 3.81%
Source: Bank Website, W.e.f. August 31, 2021



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Clix HFL ties up with IMGC for Mortgage Guarantee Backed Home Loans, BFSI News, ET BFSI

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India Mortgage Guarantee Corporation (IMGC), on Tuesday announced its partnership with Clix Housing Finance Limited (Clix HFL). The partnership plans to offer innovative Mortgage Guarantee backed home loan products for salaried and non-salaried customers in the Affordable Housing segment.

Mortgage Guarantee backed home loans will broaden Clix HFL’s coverage of home loan products and customer segments enabling more business while also supporting the flagship mission of Government of India of “Housing for All by 2022”.

“With the rising demand in the affordable housing segment, this strategic partnership would support to fulfill “Early Home Ownership” dreams of the first-time homebuyers and enable Clix to enhance its penetration in the Low & Mid-market segment besides mitigating the credit risk in case of default,” said Gaurav Pawra, CEO, Clix Housing Finance.

The program between IMGC and Clix HF has been designed in a manner to address the needs of a wide range of customers through varied products like ‘Term Extension Product for Salaried Customers’ and Documented Income Product for Self Employed Customers. A regular home loan is typically given till retirement age however with this product, the tenure is extended to additional 10 to 15 years depending upon the borrower profile.

IMGC is providing various surrogate products for self-employed customers like Banking Product, Low LTV Product, Assessed Income Product to cater to the needs of varied customers.

Mahesh Misra, CEO, IMGC said,” We are very pleased to partner and work with Clix in strategically identified segments and are confident that this will be a hugely successful partnership in the months to come. We have a defined execution roadmap with emphasis on driving financial inclusion through this partnership with Clix”.



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Rupee inches 4 paise higher to 73.25 against dollar in early trade

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The Indian rupee appreciated 4 paise to 73.25 against the US dollar in opening trade on Tuesday, tracking a positive trend in domestic equities.

At the interbank foreign exchange, the rupee opened at 73.26 against the dollar, then inched higher to 73.25, up 4 paise over its previous close.

The Fed is fighting the last war on inflation

On Monday, the rupee had settled at 73.29 against the US dollar.

Nifty to top 16,600 on US Fed member’s conciliatory tone

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.12 per cent at 92.54.

A strong rally in the domestic equity markets and a weak American currency in the overseas markets also supported the rupee sentiment.

According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, the rupee, which has appreciated nearly 100 paise since Friday, has been gaining on bountiful corporate inflows.

“RBI has been present intermittently and equity inflows have also been aiding the rupee after Fed rhetoric on Friday,” he added.

The US Fed chief Jerome Powell’s speech at Jackson Hole Symposium was ‘dovish’ and expressed hope that the Fed will keep supporting the market with low interest rates, traders said.

Global oil benchmark Brent crude futures fell 0.48 per cent to $73.06 per barrel.

On the domestic equity market front, BSE Sensex was trading 87.09 points, or 0.15 per cent higher at 56,976.85, while the broader NSE Nifty advanced 21.55 points, or 0.13 per cent, to 16,952.60.

Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth ₹1,202.81 crore, as per exchange data.

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Depositors of stressed 23 cooperative banks including PMC to get up to Rs 5 lakh back, BFSI News, ET BFSI

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Depositors of stressed banks like Punjab & Maharashtra Cooperative (PMC) Bank are now set to get up to Rs 5 lakh back from November 30 as the government has notified the amendment to the DICGC Act.

Parliament earlier this month passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing moratorium on the banks.
The amount of Rs 5 lakh would be provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The government has notified September 1, 2021 as the date on which the provisions of the Act shall come into force, according to a gazette notification dated August 27, 2021.

“In exercise of the powers conferred by sub-section (2) of section 1 of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 (30 of 2021), the Central Government hereby appoints the 1st day of September, 2021, as the date on which the provisions of the said Act shall come into force,” it said.

Effective date

Consequently, 90 days from the effective date is November 30, 2021 for depositors to get their funds back.

The first 45 days are meant for the bank, which has come under stress, to collect all the details of the accounts where the claims will have to be made. This will then be forwarded to the insurance company, which in real-time will check it all up, and nearer the 90th day, depositors will get the money, Finance Minister Nirmala Sitharaman had said.
The benefit will also accrue to the depositors of 23 cooperative banks which are in financial stress and on which the Reserve Bank of India (RBI) has imposed certain restrictions.

DICGC, a wholly-owned subsidiary of the RBI, provides insurance cover on bank deposits. At present, it takes 8-10 years for the depositors of a stressed bank to get their insured money and other claims.

Cooperative bank failures

Though the RBI and the Centre keep monitoring the health of all banks, there have been numerous recent cases of lenders, especially cooperative banks, being unable to fulfil their obligations towards the depositors due to the imposition of a moratorium by the RBI.

Last year, the government increased the insurance cover on deposits by five times to Rs 5 lakh. The enhanced deposit insurance cover of Rs 5 lakh came into effect from February 4, 2020. Every bank used to pay 10 paise as an insurance premium per Rs 100 of deposit.



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Ami Organics IPO Opens Tomorrow: Should you Subscribe?

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Investment

oi-Roshni Agarwal

|

Ami Organic, a speciality chemicals firm will open its Rs. 570 crore IPO issue on Wednesday (September 1, 2021). In an exclusive interview, the company’s chief managing director said partly the proceeds from the IPO will be used to pay off the debt amounting to Rs. 140 crore.

Ami Organics IPO Opens Tomorrow: Should you Subscribe?

The IPO is a mix of both fresh share issuance as well as an Offer for sale by company’s promoters. The price band for the issuance is Rs. 603-610 per share.

Within a few months time, 3 specialty chemicals company, including the likes of Clean Science and Technology, Tatva Chintan Pharma Chem and Chemplast Sanmar hit the primary market. Nonetheless, Chemplast Sanmar failed to make a strong listing on the exchanges, unlike the two others.

Ami Organics is a R&D focused company engaged in manufacturing of specialty chemicals. The company manufactures varied types of advanced pharmaceutical intermediates and active pharmaceutical ingredients (API) for new chemical entities, and material for agrochemicals and fine chemicals.

Other aspects, the company is working to reduce its dependence on countries from where it is procuring raw material, say for instance from China.

Should you subscribe to Ami Organics IPO?

Ahead of the opening of the IPO issue, the GMP or grey market premium of the stock has soared immensely that as of signals good listing gains for the scrip as and when it hits or debuts on the stock exchanges. As per the markets who track the scrip in unlisted market see the stock trading at a premium of Rs. 60 as on August 30, 2021.

The prime consideration other than the grey market premium is the company has been posting robust financials and its revenue as well as profit has surged between 2019-2021.

Angel Broking views on the IPO of Ami Organics

Yash Gupta, Equity Research Analyst, Angel Broking Ltd, said, “Ami organics deal in different types of Advanced Pharmaceutical Intermediates and Active Pharmaceutical ingredients (API) and materials for agrochemical and fine chemicals. Ami Organics has 3 manufacturing facility with aggregate installed capacity of 6060 Mtpa. The company has developed over 450 pharma intermediates across 17 key therapeutic areas i.e. anti-retroviral, anti-inflammatory, anti-psychotic, anti-cancer, anti-Parkinson, anti-depressant, and anti-coagulant. The company sells its product in India as well as in the international market. Ami organic reported revenue growth of 41% in FY2021 at ₹342 crores and profit after tax growth of 96% in FY2021 at ₹54 crores. We have a neutral outlook for Ami organics IPO.”
This chemical manufacturing firm was born in 2004. The company is well known for holding multiple types of Advanced Pharmaceutical Intermediates and Active Pharmaceutical ingredients (API) in its diversified product portfolio. Apart from this, Ami Organics is known for exporting medicines to various countries like USA, China, Israel, Japan, Latin America, etc.

Story first published: Tuesday, August 31, 2021, 11:12 [IST]



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AU Small Finance Bank Makes Revision On FD Interest Rates: Check Latest Rates Here

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Investment

oi-Vipul Das

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AU Small Finance Bank offers fixed deposit schemes with a plethora of benefits such as flexible tenure ranges from 7 days to 120 months, higher interest rates than public and private sector banks, deposit insurance cover up to Rs 5 lakh provided by DICGC, additional interest rates for senior citizens, tax benefits and much more. The bank offers three types of term deposit schemes i.e. Regular Fixed Deposits, 5-Year Tax Saving Fixed Deposits, and Sweep-In Facility to both regular and senior citizens. The bank has recently revised interest rates on domestic & NRE/NRO retail fixed deposits which are in force from 25th August 2021. Check the most recent interest rates on fixed deposits of the bank here.

Interest Rates On Domestic & NRE/NRO Retail Fixed Deposits (for amounts less than INR 2 Crore)

Interest Rates On Domestic & NRE/NRO Retail Fixed Deposits (for amounts less than INR 2 Crore)

Tenure Bucket Interest Rates Interest Rates (Annualized)
7 Days to 1 Month 15 Days 3.50% –
1 Month 16 Days to 3 Months 4.00% –
3 Months 1 Day to 6 Months 4.35% 4.42%
6 Months 1 Day to 12 Months 4.85% 4.94%
12 Months 1 Day to 15 Months 5.85% 5.98%
15 Months 1 Day to 18 Months 5.75% 5.88%
18 Months 1 Day to 24 Months 5.75% 5.88%
24 Months 1 Day to 36 Months 6.00% 6.14%
36 Months 1 Day to 45 Months 5.75% 5.88%
45 Months 1 Day to 60 Months 5.75% 5.88%
60 Months 1 Day to 120 Months 6.00% 6.14%
Source: Bank Website, w.e.f. 25th August 2021

Non-callable rates for Retail Fixed Deposits of Rs >=1 Crore to < 2 Crore

Non-callable rates for Retail Fixed Deposits of Rs >=1 Crore to

Below listed interest rates are not applicable to Non-Resident Indians (NRI).

Tenure Bucket ROI Annualized Rate
12 Months 1 Day – 15 Months 5.95% 6.08%
15 Months 1 Day – 18 Months 5.85% 5.98%
18 Months 1 Day – 24 Months 5.85% 5.98%
24 Months 1 Day – 36 Months 6.10% 6.24%
Source: Bank Website, w.e.f. 25th August 2021

For Senior Citizens (for amounts less than INR 2 Crore)

For Senior Citizens (for amounts less than INR 2 Crore)

The rates shown below are only available to resident Indian Senior Citizen customers who have a banking relationship with AU Small Finance Bank.

Tenure Bucket Interest Rates Interest Rates (Annualized)
7 Days to 1 Month 15 Days 4.00% –
1 Month 16 Days to 3 Months 4.50% –
3 Months 1 Day to 6 Months 4.85% 4.94%
6 Months 1 Day to 12 Months 5.35% 5.46%
12 Months 1 Day to 15 Months 6.35% 6.50%
15 Months 1 Day to 18 Months 6.25% 6.40%
18 Months 1 Day to 24 Months 6.25% 6.40%
24 Months 1 Day to 36 Months 6.50% 6.66%
36 Months 1 Day to 45 Months 6.25% 6.40%
45 Months 1 Day to 60 Months 6.25% 6.40%
60 Months 1 Day to 120 Months 6.50% 6.66%
Source: Bank Website, w.e.f. 25th August 2021

For Domestic & NRE/NRO Retail Monthly Payout Fixed Deposits (for amounts less than INR 2 Crore)

For Domestic & NRE/NRO Retail Monthly Payout Fixed Deposits (for amounts less than INR 2 Crore)

Tenure Bucket Resident / NRE / NRO Interest Rates for Monthly payout p.a.(%) Senior Citizen Interest Rates for Monthly payout p.a.(%)
7 Days to 1 Month 15 Days – –
1 Month 16 Days to 3 Months – –
3 Month 1 Day to 6 Months 4.33% 4.83%
6 Months 1 Day to 12 Months 4.83% 5.33%
12 Months 1 Day to 15 Months 5.82% 6.32%
15 Months 1 Day to 18 Months 5.72% 6.22%
18 Months 1 Day to 24 Months 5.72% 6.22%
24 Months 1 Day to 36 Months 5.97% 6.47%
36 Months 1 Day to 45 Months 5.72% 6.22%
45 Months 1 Day to 60 Months 5.72% 6.22%
60 Months 1 Day to 120 Months 5.97% 6.47%
Source: Bank Website, w.e.f. 25th August 2021

Story first published: Tuesday, August 31, 2021, 10:37 [IST]



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