Month: September 2021

Reserve Bank of India – Press Releases

Press Releases

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To enable institutional and retail investors to plan their investments efficiently and provide transparency and stability to the Government securities market, an indicative calendar for issuance of Government dated securities for the second half of the fiscal year 2021-22 (October 01, 2021 to March 31, 2022) has been prepared in consultation with the Government of India.

The second half borrowing programme of the Government of India is expected to be completed by February 2022.

The issuance calendar is as under:

Calendar for Issuance of Government of India Dated Securities
(October 01, 2021 to March 31, 2022)
Sr. No. Auction Week Amount in
(₹ Crore)		 Security-wise Allocation
1 September 27-October 01, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
2 October 04-08, 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
3 October 11-14, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
4 October 18-22, 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
5 October 25-29, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
6 November 08-12, 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
7 November 15-18, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
8 November 22-26, 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
9 November 29-December 03, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
10 December 06-10, 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
11 December 13-17, 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
12 December 20-24 2021 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
13 December 27-31 2021 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
14 January 03-07, 2022 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
15 January 10-14, 2022 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
16 January 17-21, 2022 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
17 January 24-28, 2022 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
18 January 31-February 04, 2022 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
19 February 07-11, 2022 24,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹7,000 crore
20 February 14-18, 2022 24,000 i) 02 Years for ₹2,000 crore
ii) 05 Years for ₹6,000 crore
iii) 14 Years for ₹9,000 crore
iv) 30 Years for ₹7,000 crore
21 February 21-25, 2022 23,000 i) 10 Years for ₹13,000 crore
ii) FRB ₹4,000 crore
iii) 40 Years for ₹6,000 crore
Total 5,03,000  

2. As hitherto, all the auctions covered by the calendar will have the facility of non-competitive bidding scheme under which 5 per cent of the notified amount will be reserved for the specified retail investors.

3. Like in the past, the Reserve Bank of India in consultation with the Government of India, will continue to have the flexibility to bring about modifications in the above calendar in terms of notified amount, issuance period, maturities, etc. and to issue different types of instruments, including instruments having non-standard maturity and floating rate bonds (FRBs), including CPI linked inflation linked bonds, depending upon the requirement of the Government of India, evolving market conditions and other relevant factors, after giving due notice to the market. The calendar is subject to change, if circumstances so warrant, including for reasons such as intervening holidays. Such changes shall be communicated through Press Releases.

4. The Reserve Bank of India in consultation with the Government of India, reserves the right to exercise the green-shoe option to retain additional subscription up to ₹2000 crore each against one or more security/ies indicated in the auction notification.

5. RBI will also be conducting switches of dated securities through auction on every third Monday of the month or at more frequent intervals. In case third Monday is a holiday, switch auction will be conducted on fourth Monday of the month.

6. The auction of dated securities will be subject to the terms and conditions specified in the General Notification No. F.4(2)-W&M/2018 dated March 27, 2018 issued by the Government of India, as amended from time to time.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/937

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RBI imposes a monetary penalty of ₹2 crore on RBL Bank

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The Reserve Bank of India has imposed a monetary penalty of ₹2 crore on RBL Bank.

The penalty, imposed by an order dated September 27, is for contravention of section 28 (h) of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and for non-compliance with the provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949 and also for non-compliance with the provisions of section 10 A (2) (b) of the Act.

“This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Act,” the RBI said on Monday.

The RBI conducted the Statutory Inspection for Supervisory Evaluation of RBL Bank for its financial position on March 31, 2019 (ISE 2019).

The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, RBI letter dated October 27, 2020 and related correspondence revealed contravention of the regulatory directions and non-compliance with the provisions of the Act in terms of opening of five savings deposit accounts in the name of a co-operative bank and failure to comply with the provisions of section 10A(2)(b) of the Act relating to the composition of the board of directors.

A notice was then issued to the bank advising it to show cause as to why the penalty should not be imposed for contravention and non-compliance.

“After considering the bank’s reply to the show-cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of / non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank,” it said.

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Insurance cos hope for a hike in PMJJBY premium

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Life insurance companies have pitched for a re-pricing of the government’s flagship Pradhan Mantri Jeevan Jyoti Beema Yojana.

According to calculations, the premium would have to be fixed at a little over ₹400 per annum per policy from the current ₹330.

Launched in 2015, the PMJJBY scheme provides a life cover of ₹2 lakh to people in the age group of 18 to 50 years (life cover up to age 55) having a savings bank account. The scheme is available for one year, stretching from June 1 to May 31 and is renewable every year.

The government had chosen to keep the premium rate low to enable more people to take life cover and get social security.

However, insurers point out that the premium for the life insurance cover was fixed a long time ago and needs to be reviewed. Further, there has also been a rise in claims under the scheme following the Covid-19 pandemic.

“It is very, very important that the premiums for the scheme increase. It has not been hiked even once since the scheme was launched. It is not sustainable at the moment,” said an official with a life insurance company.

“We are hoping that the premium is reviewed. A large number of people have joined the scheme, especially in the last two years. Claim ratio has also increased since the pandemic,” said another insurer.

On a cumulative basis, there were 10.34 crore persons enrolled under the scheme with a total of 2.6 lakh claims by May this year.

The government is also looking to bring more people under the scheme. The Finance Ministry had recently said it would try and bring the 43.04 crore eligible account holders of the Pradhan Mantri Jan Dhan Yojana announced under PMJJBY and Pradhan Mantri Suraksha Bima Yojana. Banks have already been communicated on the issue, it had said.

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Reserve Bank of India – Press Releases

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(For the Quarter ending December 2021)

After reviewing the cash position of the Central Government, the Reserve Bank of India, in consultation with the Government of India, has decided to notify the amounts for the issuance of Treasury Bills for the quarter ending December 2021 as under:

Notified Amount for Auction of Treasury Bills
(October 01, 2021 to December 31, 2021)
(₹ Crore)
Date of Auction Issue Date 91 Days 182 Days 364 Days Total
October 6, 2021 October 7, 2021 10,000 3,000 7,000 20,000
October 13, 2021 October 14, 2021 10,000 3,000 7,000 20,000
October 20, 2021 October 21, 2021 10,000 3,000 7,000 20,000
October 27, 2021 October 28, 2021 10,000 3,000 7,000 20,000
November 2, 2021 November 3, 2021 10,000 3,000 7,000 20,000
November 10, 2021 November 11, 2021 10,000 3,000 7,000 20,000
November 17, 2021 November 18, 2021 10,000 3,000 7,000 20,000
November 24, 2021 November 25, 2021 10,000 3,000 7,000 20,000
December 1, 2021 December 2, 2021 10,000 3,000 7,000 20,000
December 8, 2021 December 9, 2021 10,000 3,000 7,000 20,000
December 15, 2021 December 16, 2021 10,000 3,000 7,000 20,000
December 22, 2021 December 23, 2021 10,000 3,000 7,000 20,000
December 29, 2021 December 30, 2021 10,000 3,000 7,000 20,000
Total 1,30,000 39,000 91,000 2,60,000

2. Reserve Bank of India, in consultation with the Government of India, will have the flexibility to modify the notified amount and timing for auction of Treasury Bills, depending upon the requirements of the Government of India, evolving market conditions and other relevant factors, after giving due notice to the market. Thus, the calendar is subject to change, if circumstances so warrant, including for reasons such as intervening holidays. Such changes, if any, will be communicated through Press Releases.

3. The auction of Treasury Bills will be subject to the terms and conditions specified in the General Notification No. F.4(2)-W&M/2018 dated March 27, 2018 issued by the Government of India, as amended from time to time.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/938

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Reserve Bank of India – Press Releases

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It has been decided, in consultation with the Government of India, that the limit for Ways and Means Advances (WMA) for the second half of the financial year 2021-22 (October 2021 to March 2022) be fixed at ₹50,000 crore.

The Reserve Bank may trigger fresh floatation of market loans when the Government of India utilises 75 per cent of the WMA limit.

The Reserve Bank retains the flexibility to revise the limit at any time, in consultation with the Government of India, taking into consideration the prevailing circumstances.

The interest rate on WMA/overdraft will be:

  1. WMA: Repo Rate

  2. Overdraft: Two percent above the Repo Rate

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/939

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Reserve Bank of India – Press Releases

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The Reserve Bank of India (RBI) has, by an order dated September 27, 2021, imposed a monetary penalty of ₹2.00 crore (Rupees Two Crore only) on RBL Bank Limited (the bank) for contravention of section 28 (h) of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and for non-compliance with the provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949 (the Act). For the non-compliance with the provisions of section 10 A (2) (b) of the Act, penalty is also imposed for the period during which the contravention or default continued. This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Act.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019). The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, RBI letter dated October 27, 2020 and related correspondence in the matter, revealed, inter alia, contravention of the regulatory directions and non-compliance with the provisions of the Act, to the extent of (i) opening of five savings deposit accounts in the name of a co-operative bank and (ii) failure to comply with the provisions of section 10A(2)(b) of the Act relating to composition of Board of Directors. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of / non-compliance with the provisions of the directions/Act, as stated therein.

After considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of / non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/936

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Federal Bank partners with NPCI for RuPay credit card

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Federal Bank has partnered with the National Payments Corporation of India (NPCI) to launch the Federal Bank RuPay Signet Contactless Credit Card.

“One of the major highlights of this card is, it comes with the lowest Annual Percentage Rate (APR) starting from just 5.88 per cent per annum,” the private sector lender said in a statement on Monday.

At present, the card is offered to existing customers of the bank.

The bank has adopted a ‘Digital First’ and the card immediately made available for use in FedMobile. The physical card will be delivered to the customer in due course.

Federal Bank had launched credit cards for existing customers in June this year and had an exclusive tie-up with Mastercard. This had got impacted after the Reserve Bank of India barred Mastercard from acquiring new customers.

Shalini Warrier, Executive Director, Federal Bank had said in July that the bank would restart issuance of credit cards within two months and was in talks with both Visa and RuPay.

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RBI imposes Rs 2 crore penalty on RBL Bank for offending regulatory orders, BFSI News, ET BFSI

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The Reserve Bank of India has imposed a penalty of Rs 2 crore on RBL Bank for offending regulatory directions, and being non-compliant with the provisions of the Banking Regulation Act, 1949.

The penalty has been imposed because of contravention of directions on interest rate and deposits, and failure of compliance with the provisions of the Act, pertaining to the extent of opening five savings accounts in the name of co-operative banks, and composition of the bank’s board.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the central bank said in a press release.

The decision came after the central bank conducted a Statutory Inspection for Supervisory Evaluation in 2019, and a Risk Assessment Report and Inspection Report based on the ISE.

The RBI has issued a notice to the bank, asking for reasons why the penalty should not be imposed.

The fine comes right after nearly 100% of RBL Bank’s shareholders approved the reappointment of Vishwavir Ahuja as the MD and CEO for the fourth term, starting June 1.

Though the board had approved his fourth 3-year term, the RBI in June had only cleared his reappointment only for one year.



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Securitisation pool collections improve as restrictions ease: Crisil Ratings

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With the gradual phasing out of social restrictions, there has been an improvement in the monthly collection ratios of securitised pools rated by Crisil Ratings.

These had declined between April and June 2021 following the second wave of the Covid-19 pandemic.

“The trend in improving collection efficiencies has been seen across asset classes and in a number of segments, the levels are quite close to pre-pandemic levels. Collection ratios in mortgage-backed securitisation (MBS) pools have rebounded to near-100 per cent―their pre-pandemic normal ― in the pay-out months of July and August 2021,” Crisil Ratings said on Monday.

MBS pools, with home-or property-backed loans as underlying, have shown extremely high resilience across economic cycles.

Says Krishnan Sitaraman, Senior Director and Deputy Chief Ratings Officer, Crisil Ratings, “In asset-backed securitisation (ABS) pools, collection ratios are set to reach January-March 2021 pay-out levels after dipping to 84 per cent in the first quarter this fiscal.”

Median collection

Median collection ratios for vehicle loan pools for August pay-out reached 100 per cent, just a tad short of the March collection ratio of 101 per cent, he further said.

Similarly, in the case of two-wheelers and small and medium enterprise (SME) loan pools, collection ratios have risen to 98 per cent and 90 per cent in August from 95 per cent and 78 per cent respectively, for June pay-out.

“The government’s focus on rural areas and agriculture, and launch of schemes for SMEs have helped here,” Crisil said.

Rohit Inamdar, Senior Director, Crisil Ratings, said, “Securitisation volume after the second wave remains a pale shadow of what it was before the pandemic began. What’s encouraging, however, is the limited decline in collections after the second wave. The ongoing recovery should improve investor confidence and increase interest in securitisation transactions.”

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HDFC plans to raise Rs 6,000 crore via bonds, BFSI News, ET BFSI

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The country’s largest mortgage lender Housing Development Finance Corporation (HDFC) will raise up to Rs 6,000 crore by issuing bonds on a private placement basis to augment its long term resources. The bonds in the nature of secured redeemable non-convertible debentures (NCDs) have a base issue size of Rs 3,000 crore with the option to retain oversubscription up to Rs 3,000 crore, HDFC said in a regulatory filing on Monday.

“The object of the issue is to augment the long-term resources of the Corporation. The proceeds of the present issue would be utilised for financing/refinancing the housing finance business requirements of the Corporation,” it said.

The three-year tenor bonds rated ‘AAA‘ by Crisil and Icra will be up for redemption on September 30, 2024.

The bids for subscription will open on September 29, 2021, and close on the same day.

HDFC said the coupon rate on the bonds would be payable at a fixed spread of 80 basis points (0.80 per cent) over the benchmark that will be reset on a quarterly basis.

The benchmark will be a three-month T-bill (treasury bill) as published by FBIL and sourced from Bloomberg, it added. If Bloomberg data is not available, the simple average of FBIL 3-months T-bills closing rate, as published by Financial Benchmarks India Pvt Ltd (FBIL) may be recognised with certain parameters.

The first such quarterly setting of the coupon rate for September 30, 2021, would be 4.13 per cent per annum, HDFC said. Shares of HDFC closed flat at Rs 2841.10 apiece on BSE. PTI KPM BAL BAL



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