Reserve Bank of India – Press Releases

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The Reserve Bank of India has today communicated that the applicable average base rate to be charged by Non-Banking Financial Company – Micro Finance Institutions (NBFC-MFIs) to their borrowers for the quarter beginning October 1, 2021 will be 7.95 per cent.

It may be recalled that the Reserve Bank had, in its circular dated February 7, 2014, issued to NBFC-MFIs regarding pricing of credit, stated that it will, on the last working day of every quarter, advise the average of the base rates of the five largest commercial banks for the purpose of arriving at the interest rates to be charged by NBFC-MFIs to their borrowers in the ensuing quarter.

Ajit Prasad
Director   

Press Release: 2021-2022/955

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Kamath, BFSI News, ET BFSI

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As the cryptocurrency craze keeps on growing around the world, Nikhil Kamath, Co-founder of Zerodha and True Beacon, has a piece of advice for the crypto-crazy millennials: it’s okay to diversify your portfolio, but don’t put in anything beyond 1-5 per cent of your net worth in it.

A battle between the central banks and private cryptocurrencies has been brewing for some time and now it seems we are getting closer to a climax,” said Kamath, the co-founder of India’s largest stock trading platform by volume.

“Developments in China and some of the other parts of the world show that to some extent, cryptos do take away powers from central banks and governments. So they are bound to fight back,.and when they come out and try to regulate it and change it in one way or another, it will be interesting to see what happens and which side wins,” he said.

The 35-year-old fintech disruptor says he would put his money on the side of central banks and the governments not allowing cryptos to thrive beyond a certain extent.

Kamath says one should not have too much allocation to any one asset class, and crypto is a fairly volatile asset class. “If one is looking to diversify one’s portfolio, then it’s okay to invest 1-2-5 per cent of one’s net worth in cryptos. But do so only after understanding what it entails,” he said.

On Wednesday, the global crypto market cap stood at $1.89 trillion, down 3.65 per cent from the previous day, amid choppy trading. The total crypto market volume over the last 24 hours stood at $97.32 billion, down 14.64 per cent.

Beijing last Friday issued a blanket ban on all crypto trading and mining and cryptocurrency exchanges and providers of crypto services are since scrambling to sever business ties with mainland Chinese clients. Ten powerful Chinese government bodies, including the central bank, said overseas exchanges are barred from providing services to mainland investors via the internet — a previously grey area -z and vowed to jointly root out “illegal” cryptocurrency activities.



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AU Small Finance Bank signs pact with NABARD to boost rural development projects in Rajasthan

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Private sector AU Small Finance Bank on Wednesday signed a pact with the National Bank for Rural and Development (NABARD) to boost ongoing rural development initiatives in Rajasthan.

According to a statement issued by the bank here, the Memorandum of Understanding (MoU) was signed in the presence of NABARD Chairman G R Chintala, Jaideep Srivastava, Chief General Manager, Rajasthan, and Sanjay Agarwal, Managing Director, AU Small Finance Bank.

Joint initiative

The memorandum envisages a joint initiative to benefit farmers, Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), rural artisans, agri-entrepreneurs, and agri-startups in the State.

“This MoU between NABARD and AU Bank will provide institutional credit support to the ongoing development schemes in the State, which will lead to further prosperity in the rural areas.

“This tie-up will give a boost to the process of lending in the state, especially in areas related to agriculture and rural development,” Agarwal said.

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Reserve Bank of India – Press Releases

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(Amount in ₹ crore, Rate in Per cent)

  Volume
(One Leg)
Weighted
Average Rate
Range
A. Overnight Segment (I+II+III+IV) 4,34,926.21 3.33 1.95-5.30
     I. Call Money 10,276.06 3.25 1.95-3.45
     II. Triparty Repo 3,36,904.05 3.34 3.00-3.36
     III. Market Repo 87,651.10 3.32 2.00-3.50
     IV. Repo in Corporate Bond 95.00 5.30 5.30-5.30
B. Term Segment      
     I. Notice Money** 85.25 3.27 2.75-3.60
     II. Term Money@@ 66.50 3.20-3.30
     III. Triparty Repo 340.00 3.19 3.15-3.20
     IV. Market Repo 90.00 2.93 2.75-3.15
     V. Repo in Corporate Bond 15.00 5.35 5.35-5.35
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Wed, 29/09/2021 1 Thu, 30/09/2021 2,89,707.00 3.35
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Wed, 29/09/2021 1 Thu, 30/09/2021 902.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*
      -2,88,805.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo          
    (iii) Special Reverse Repo~ Fri, 24/09/2021 14 Fri, 08/10/2021 6,999.00 3.75
    (iv) Special Reverse Repoψ Fri, 24/09/2021 14 Fri, 08/10/2021 2,712.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 24/09/2021 14 Fri, 08/10/2021 3,44,515.00 3.60
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo Tue, 28/09/2021 7 Tue, 05/10/2021 1,97,123.00 3.99
3. MSF          
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
  Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00
  Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00
  Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
  Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
  Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
  Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
  Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       25,395.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -4,40,661.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,29,466.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 29/09/2021 6,56,963.37  
     (ii) Average daily cash reserve requirement for the fortnight ending 08/10/2021 6,30,489.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 29/09/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 10/09/2021 11,83,556.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/954

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SBI exploring ways to back startups with debt financing, BFSI News, ET BFSI

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State Bank of India is trying to work out a way to debt finance startups as current rules allow banks to fund only profitable companies.

Startups raise equity funds to run their business. Promoters are forced to dilute stake as debt funding is not available to them because their companies are loss-making in the initial years, a senior SBI official said.

“We are struggling to debt fund startups. Bank norms and rules allow debt funding to only profitable ones. As initially startups are loss-making, they are to be funded based on the viability of the idea only. We are trying a way out,” Ashwini Kumar Tewari, managing director – international banking (technology and subsidiaries) at State Bank of India, said at the annual general meeting of The Bengal Chamber on Wednesday.

He said the bank was doing equity funding through SBI Ventures and recognised that the country needs to support the startup culture.

The number of government-recognised startups under the ‘Startup India’ initiative, launched by Prime Minister Narendra Modi in January 2016, has grown nearly 85 times. Their number has increased from 504 in 2016 to 42,733 in 2020, according to commerce ministry data.

Speaking about the economy, Tewari said despite a healthy recovery the country’s growth will be lower than 2019 due to the pandemic. “Large businesses are doing well. The problem is in the SMEs and the small sector. Large corporations are repaying more. Credit growth is driven by retail,” he said.

Referring to gold loans, he said that they are not popular in India but there are a lot of them which indicate the pain the normal people have suffered. “If gold loans are increasing, it is good for business but it is also a sign of the helplessness of normal people,” Tewari said.

The Bengal Chamber launched its Ease of Doing Business app during the day for industry stakeholders. Subscriber members as well as non-members can now make queries and take the benefit of experts of the chamber in diverse areas.



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Gold Rates Fell To $1725/oz, US Home Sales And Treasury Yield Rises, Dollar Gains

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Investment

oi-Kuntala Sarkar

|

Gold prices in the international markets failed to keep up a good hold since August 2021, and the same trend is being followed this month. Today, on September 30, the spot gold prices opened at $1726/oz, and staying only marginally above this range. Yesterday, both gold futures and spot gold prices have also fallen considerably at around $1730/oz. On the Comex gold December future, the price fell 0.63% and was quoted at $1726, and the spot gold ask price dropped by 0.42% and was quoted at $1727 as of 8.27 PM IST yesterday. Last traded Comex price stood at $1732, till yesterday. This $1725 range is a significant drop in international gold prices. Gold is a dollar-dominated asset class, hence the prices are correlated with the US dollar and US economic trends. Yesterday, the US dollar index too, gained marginally. Today is the last trading day of September, but gold traders are not very hopeful about the metal’s price range in the upcoming month, October.

Gold Rate Drops To $1725, US Home Sales And Treasury Yield Rises, Dollar Gains

US home sales rises, impact on gold

The reason behind the present downward trend is the gaining dollar index. US treasury yield rises, on the other hand, US home sales data is in an affirmative position. The National Association of Realtors (NAR) recently stated that the USA’s pending home sales index increased to 119.5 jumping 8.1% positively in August, following July’s drop of 1.8%. This data was 1.1% higher than expectations. US housing sales were up moderately after 2 months’ consecutive fall showing economic recovery. Hence, gold is now failing to hold even the $1740 level and lost this year’s psychological high of $1800 long ago.

Treasury yield increases

The USA’s economy is presently on a path of swift recovery and the trend is anticipated positively by economists, including the US Federal Reserve. The Wall Street Journal in a report mentioned, “New orders for durable goods in the US are expected to increase in August as business investment and consumer spending remain positive.” US Fed Chair Jerome Powell’s hawkish statement on the country’s economy has already hiked US treasury yield. According to experts, the US treasury yield curve steepening is driving the dollar index higher, at the same time dampening the demand for bullion.

Expectations on the PCE index

On the other hand, the US Core Personal Consumption Expenditure (PCE) index will be published. Regarding that, FXStreet stated, “Core CPI slipped from 4.3% to 4%, indicating a similar retreat in Core PCE – from 3.6% to a range of 3.2% to 3.4%. That would still leave underlying price pressures at high levels, supporting the case for a taper announcement in November.” Jerome Powell earlier indicated that they will announce a reduction in bond-buying in the next meeting. Tapering will again drag down gold rates globally. At present, gold is starting trading with marginal highs, but ultimately falling in the latter half of a trading day.

Impact in India

In India, MCX gold future rates also dropped by 0.39% and stood at Rs. 45,777/10 grams yesterday till last traded. Daily Indian gold prices too are not rising much, as the rates depend on international trends. However, it is a good sign for common buyers before the festive season in India. Gold is a long-term profitable asset and if the buyers can purchase the precious metal at low rates, it will certainly give better returns in the future.



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Bombay HC refuses interim relief to Yes Bank in a case against Asit Koticha, ASK Group, BFSI News, ET BFSI

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The Bombay High Court has refused to grant any interim relief to YES Bank in the ASK Group transaction involving founder Asit Koticha.

The bank wanted the court to direct Koticha to deposit about Rs 379 crore from the proceeds he is receiving after selling his stake in flagship group company ASK Investments to private equity major Blackstone.

In August, Singapore-based BCP Topco XII Pte Ltd, an investment vehicle of Blackstone, had entered into share purchase agreements with Koticha to acquire his majority shareholding in ASK Investment Managers Ltd.

“I have no manner of doubt that the balance of convenience is not with the plaintiff (Yes Bank),” observed the court in its 17-page order. “The prejudice that is likely to be caused to one or more of the many defendants far outweighs any possible prejudice to the plaintiff.”

Justice GS Patel, in his order of September 24, has now posted the hearing of the case to November 29

The genesis of the dispute lies in the credit facility of Rs 330 crore extended by Yes Bank in 2015 to Lily Realty Pvt Ltd, a company owned by Asit Koticha. At the time of securing the loan facility, Koticha had extended ‘Shortfall Security’ under which if the realty firm fails to pay its dues to the Yes Bank, he will pay the shortfall.

Later, Lily Realty was classified as NPA in February 2020.

Munaf Virjee, Managing Partner of law firm ABH Law that appeared for Asit Koticha, and Senior Advocate Ravi Kadam declined to comment.

A mailed query to Yes Bank did not elicit any response. Rohan Dakshini, partner at Rashmikant & Partners, who appeared along with Senior Advocate Dinyar Madon for the bank, also did not comment.

On August 30, 2021, Yes Bank issued a shortfall demand notice to Koticha asking it to fund the shortfall to the extent of over Rs 379 crore. When Koticha declined, the bank approached the court.

Koticha agreed to sell his majority stake to BCP Topco at Rs 707 a share, for a total consideration of over Rs 606 crore. However, from this amount about Rs 307 crore and Rs 145 crore would be paid to IIFL Wealth Prime and IDBI Trusteeship, respectively, under various debt obligations.

Lawyers for Yes Bank argued that whatever remains after paying both IIFL Wealth Prime and IDBI Trusteeship should be put in an escrow account or should be deposited in court.

However, countering this, Koticha, through his lawyers argued that this is nothing but a recovery suit.

“It cannot be that the attachment before judgment is obtained against Koticha here (High Court) and the final relief that is sought is to be obtained in the Debts Recovery Tribunal (DRT) against Lily Realty and possibly also against Koticha as a personal guarantor,” argued the counsel for Koticha.



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Banks to remain closed for 21 days, here’s the list, BFSI News, ET BFSI

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There are as many as 21 holidays days in October for both public and private sector banks. These holidays include seven weekends, one national holiday and 13 state-specific holidays.

Banks all over India will remain shut on October 2 on account of Gandhi Jayanti, and banks, except those in Imphal and Shimla, will remain shut on October 15 on account of Vijaya Dashmi.

Apart from this, banks will remain closed for state-specific holidays. Some such are – across Gangtok, banks will be closed on October 1 due to the half-yearly closing of bank accounts, in Agartala, Bengaluru, and Kolkata banks will be shut on October 6 on account of Mahalaya Amavasye. In Imphal, banks will be non-operative on October 7 on account of Mera Chaoren Houba of Lainingthou Sanamahi.

Here is the full list of bank holidays in October 2021

October 1 – Half Yearly Closing of Bank Accounts (Sikkim)

October 2 – Gandhi Jayanti (Pan India)

October 3 – Sunday (Weekly off)

October 6 – Mahalaya Amavasye (West Bengal, Tripura, Karnataka)

October 7 – Mera Chaoren Houba of Lainingthou Sanamahi (Tripura, West Bengal, Meghalaya)

October 9 – Second Saturday

October 10 – Sunday (Weekly off)

October 12 – Durga Puja or Maha Saptami (West Bengal, Tripura)

October 13 – Durga Puja or Maha Ashtami (West Bengal, Sikkim, Bihar, Jharkhand, Odisha, Manipur, Tripura, Assam)

October 14 – Durga Puja, Dussehra or Maha Navami, Ayutha Pooja (West Bengal, Uttar Pradesh, Tripura, Tamil Nadu, Sikkim, Puducherry, Odisha, Nagaland, Meghalaya, Kerala, Karnataka, Jharkhand, Bihar and Assam)

October 15 – Durga Puja, Dasara, Dussehra or Vijaya Dashmi (Pan India except for Manipur and Himachal Pradesh)

October 16 – Durga Puja or Dasain (Sikkim)

October 17 – Sunday (Weekly off)

October 18 – Kati Bihu (Assam)

October 19 – Eid-e-Milad, Eid-e-Miladunnabi, Milad-i-Sherif or Prophet Mohammad’s Birthday (Pan India except for Gujarat, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttarakhand, Andhra Pradesh, Telangana, Jammu, Kashmir, Uttar Pradesh, Kerala, Delhi, Chhattisgarh and Jharkhand)

October 20 – Maharishi Valmiki’s Birthday, Lakshmi Puja, Id-e-Milad (Tripura, Punjab, West Bengal, Karnataka, Haryana and Himachal Pradesh)

October 22 – Friday following Eid-e-Milad-un-Nabi (Jammu and Kashmir)

October 23 – Fourth Saturday

October 24 – Sunday (Weekly off)

October 26 – Accession Day (Jammu and Kashmir)

October 31 – Sunday (Weekly off)



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Kerala High Court asks Dhanlaxmi Bank to adjourn AGM

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The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

The order by Judge PB Suresh Kumar came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai (B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE. The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The HC interim order has upheld the importance of shareholders in appointing directors. The bank rejected applications without any valid reasons. The AGM is supreme for any company, including banking company. Some of the directors who came to that position with the votes of majority shareholders are now behaving as if they were made directors by some other authority, and not by shareholders. The interim order of HC is an eye opener for all who try to belittle importance of shareholders in the administration of any company,” PK Vijayakumar said.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

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Kerala High Court asks Dhanlaxmi Bank to adjourn AGM

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Dhanlaxmi BankThe petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

The Kerala High Court on Wednesday directed Dhanlaxmi Bank to refrain from concluding the annual general meeting scheduled for Wednesday (September 29). The single bench of the high court gave an interim order directing the bank to adjourn the AGM to a day after one month after transacting the businesses included in the agenda for the meeting.

The order by Judge PB Suresh Kumar came following a writ petition filed by KN Madhusoodanan, a shareholder of the company, P Mohanan and Prakash DL, seeking a direction to the respondents — the RBI and Dhanlaxmi bank — to discharge their statutory responsibilities under Section 160 of the Companies Act to inform the members about the candidature of the petitioners for the office of the director as mandated under Section 160(2) of the Companies Act.

The board of the bank arbitrarily rejected the applications of all five candidates, including prominent shareholder Ravi Pillai (B Ravindran Pillai) and former independent director PK Vijayakumar, filed under Section 160 of the Companies Act, a highly-placed source told FE. The petitioners had to move their candidature under Section 160 of the Companies Act after the board decided to defer their candidatures.

“The HC interim order has upheld the importance of shareholders in appointing directors. The bank rejected applications without any valid reasons. The AGM is supreme for any company, including banking company. Some of the directors who came to that position with the votes of majority shareholders are now behaving as if they were made directors by some other authority, and not by shareholders. The interim order of HC is an eye opener for all who try to belittle importance of shareholders in the administration of any company,” PK Vijayakumar said.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

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