Month: October 2021

Banks step up credit card sales, offers in festive season as BNPL threatens, BFSI News, ET BFSI

Banking & Finance

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With the Covid pandemic weakening and consumer confidence rising, banks are betting on credit card spends this festive season. Lenders have launched a slew of new credit cards and offers to solidify their positions and grab a bigger share of the market.

The credit card push comes at a time when buy now-pay later (BNPL) products have become popular with consumers. BNPL essentially offers around 15 days of interest-free funds to small borrowers and are seen as competitors of credit cards.

SBI offering

Banks step up credit card sales, offers in festive season as BNPL threatens

SBI Card is luring consumers with 10% cashback up to Rs 10,000 across mobiles, consumer durables, laptops, kitchen appliances, home décor & furnishing, and fashion & lifestyle purchases, done at leading domestic e-commerce shopping sites. The offerings are not restricted to just one or two e-commerce portals

However, the offer will not be applicable on online spending in some categories such as insurance, travel, wallet, jewellery, education, healthcare, and utility merchants.

HDFC Bank

Banks step up credit card sales, offers in festive season as BNPL threatens

HDFC Bank and digital payments firm Paytm will launch a range of credit cards powered by Visa this month. The partnership aims to provide one of the widest range of offerings across customer segments, with special focus on millennials, business owners and merchants. Under the partnership announced in August, the two will build comprehensive solutions across payments gateway, point of sale machines, and credit products.

The cards announced today will be customised to meet the distinct needs of retail customers, from new-to-credit users to affluent users and offer rewards and cashback for users. The new cards offering will also facilitate small business owners.

Federal Bank cards

Banks step up credit card sales, offers in festive season as BNPL threatens

Kochi-based private lender Federal Bank entered the credit card business in September in association with card network Visa. The bank has partnered with National Payments Corp of India to launch ‘Federal Bank RuPay Signet Contactless Credit Card,’ according to a press release.

The card’s annual percentage rate starts from 5.88% per annum. Cardholders will gain access to a wide range of offers and deals across categories including travel, food, among others, the bank said. The card is currently being offered to existing customers of Federal Bank.

According to the Reserve Bank of India (RBI), the total number of credit cards stood at 63.4 million at the end of July.



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RBI appoints advisory committee to assist administrator of 2 Srei group firms, BFSI News, ET BFSI

Banking & Finance

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After superseding the boards of Srei Infrastructure Finance Limited (SIFL) and Srei Equipment Finance Limited (SEFL) on Monday, the RBI has appointed a three-member Advisory Committee to assist the administrator of the two crisis-ridden firms. The Reserve Bank of India (RBI) superseded the board of directors of SIFL and SEFL and appointed Rajneesh Sharma, ex-chief general manager, Bank of Baroda, as the administrator.

“The Reserve Bank…has constituted a three-member Advisory Committee to assist the Administrator in discharge of his duties,” the central bank said in a statement.

The members of the Advisory Committee are — R Subramaniakumar (former MD and CEO, Indian Overseas Bank), T T Srinivasaraghavan (former managing director, Sundaram Finance Limited), and Farokh N Subedar (former chief operating officer and company secretary, Tata Sons Limited).

The Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 provide for the concerned financial sector regulator appointing a Committee of Advisors to advise the administrator in the operations of the financial service provider during the corporate insolvency resolution process.

Srei group, which mainly caters to the MSME and infrastructure sectors, owes around Rs 18,000 crore to around 15 lenders, including Axis Bank, UCO Bank and State Bank of India, and another nearly Rs 10,000 crore of external commercial borrowings and bonds. PTI NKD ABM ABM



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IBA CEO, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank on Monday gave licence to the Rs 6,000 crore National Asset Reconstruction Company Ltd (NARCL), a move that will help kickstart operations of the bad bank. NARCL was incorporated in July in Mumbai following registration with the Registrar of Companies (RoC).

“Happy to share #RBI has given License to #NARCL on 4.10.2021. The approval has been accorded under Section 3 of #SARFAESI Act 2002,” Indian Banks’ Association (IBA) CEO Sunil Mehta tweeted.

IBA, entrusted with the task of setting up the bad bank, has put a preliminary board for NARCL in place.

The company has hired P M Nair, a stressed assets expert from State Bank of India (SBI), as the managing director.

The other directors on the board are IBA CEO Mehta, SBI Deputy Managing Director S S Nair and Canara Bank’s Chief General Manager Ajit Krishnan Nair.

Finance Minister Nirmala Sitharaman had in Budget 2021-22 said that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up bank books.

“An Asset Reconstruction Company Limited and Asset Management Company would be set up to consolidate and take over the existing stressed debt,” she had said in the Budget speech.

It will manage and dispose of the assets to alternative investment funds and other potential investors for eventual value realisation, she had said.

Last month, the Cabinet cleared a proposal to provide government guarantee worth Rs 30,600 crore to security receipts issued by NARCL.

NARCL will pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

It will be 51 per cent owned by PSBs and the remaining by private sector lenders.

Last week, SBI, Union Bank of India, Indian Bank picked up 13.27 per cent stake each in the NARCL, while Punjab National Bank acquired about 12 per cent stake.

NARCL will take over identified bad loans of lenders.

The lead bank with an offer in the hand of NARCL will go for a ‘Swiss Challenge’, wherein other asset reconstruction players will be invited to better the offer made by a chosen bidder for finding a higher valuation of a non-performing asset on sale.

The company will pick up those assets that are 100 per cent provided for by the lenders. Banks have identified around 22 bad loans worth Rs 90,000 crore to be transferred to NARCL in the initial phase.



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Delhi govt asks banks to integrate their vehicle loan data with VAHAN portal, BFSI News, ET BFSI

Banking & Finance

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Delhiites who have taken loans on their vehicles need not visit a bank or the transport department‘s office after October as the city government has asked the banks, financial institutions and NBFCs to integrate their vehicle loan data with the VAHAN portal of the Ministry of Road Transport and Highways. Any applicant who has taken a vehicle loan from any financial institution need not visit the bank or physically submit any document, according to a statement issued by the transport department on Monday.

“No physical documents needed for hypothecation of vehicles in Delhi after October 31,” it said.

Hypothecation is the process whereby the ownership of a vehicle taken on loan and held as collateral by a bank or a lending agency is restored to its buyer.

“We had, in the last month set a strict deadline to take all banks on board for integrating their data with VAHAN to allow termination on hypothecation services and I am happy to see that the process has picked pace and is nearly complete,” Delhi Transport Minister Kailash Gahlot was quoted as saying in the statement.

With this circular, the “no-objection certificate” (NOC) for hypothecation termination from banks and other financial institutions will be received only in the digital format at the VAHAN platform of the National Informatics Centre (NIC), the statement said.

Hypothecation services, including addition, continuation and termination on vehicle loans, are one of the most availed services of the transport department under its “Faceless Services” initiative launched in August.

Private banks HDFC and ICICI together account for 70-80 per cent of all the vehicle loans in Delhi and have already integrated their loan-related data with the VAHAN portal, according to the statement.

Delhiites need not visit a bank for the NOC as they can directly apply for hypothecation removal on the transport department’s website under “Faceless Services”.

Earlier, after the foreclosure of a loan, an applicant had to apply for termination of hypothecation and submit Form 35 and an NOC from the bank within 90 days.

The circular says from November 1, the banks or financial institutions that fail to integrate the data with the VAHAN portal would not be allowed to enter their data of hypothecation into the transport department’s database. PTI VIT RC



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Reserve Bank supersedes boards of Srei Infrastructure, Srei Equipment Finance, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India said on Monday it has superseded the board of directors of non-banking financial companies Srei Infrastructure Finance Ltd and Srei Equipment Finance Limited due to governance concerns and defaults, adding that it will initiate bankruptcy proceedings against them.

Rajneesh Sharma, the former Chief General Manager of the Bank of Baroda, has been appointed the administrator.

Last week, a consortium of lenders led by UCO Bank sought central bank directions on pursuing recovery of dues from the Srei Group after loans worth about Rs 30,000 crore to the Kolkata-based financier officially qualified to be moved to the list of non-performing assets (NPA) this quarter.

Srei Infrastructure, and its subsidiary Srei Equipment Finance, together owe lenders and debenture holders a total of Rs 30,000 crore. Kolkata-based UCO Bank is the lead lender, with more than Rs 2,000 crore of exposure. State Bank of India (SBI)’s exposure to the group is also more than Rs 2,000 crore.

The bank loans have turned non-performing assets after the end of the September quarter, two senior bank executives told ET.

The company had earlier announced that Arena Investors, Makara Capital and others had evinced interest to invest in the company to the tune of Rs 2,200 crore. The company had formed a strategic coordination committee to coordinate, negotiate and conclude discussions with the investors.

Till date, it received expressions of interest from 11 investors and has signed non-disclosure agreements with nine of them. Two Investors — Makara and Arena — had submitted non-binding term sheets indicating their intent for investment.

Srei Infrastructure, which is a listed entity, reported a net loss of Rs 971 crore in the June quarter as against Rs 23 crore net profit in the year ago period as provisions on loans rose nearly seven times to Rs 439 crore over the same period as repayment collections were hit due to the impact of the Covid 19 pandemic.

with inputs from Atmadip Ray



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Reserve Bank of India – Tenders

Tenders

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Event No. RBI/Mumbai/Estate/79/21-22/ET/108:

Minutes of Pre-Bid meeting held on October 1st, 2021.

Prebid meeting for the above tender is conducted as per schedule on October 1st, 2021 at 11:00 AM online through Cisco WebEx platform and following vendors participated in the meeting,

  • M/s Solgen Greentech LLP, Shri. Amit Shah

  • M/s Vijay Engineering and Machinery Company, Shri.Manoj Kande

The participants were welcomed by Estate Cell, BKC, Mumbai and from Bank’s side Shri. B Dhal, GM (Tech.), Shri. I B Khobragade, DGM (Tech.), Shri. Ajit Bobhate, Manager (Tech.), Shri Y R Sonawane, AM(Elect.), Shri.Randeep Sangwan, JE(Elect.), Shri Navin Kumar, JE (Elect.), Smt. Soniya Gangurde, Manager (Adm.), Shri. Suraj Singh, AM(Adm.) and Shri. Aman Mishra, Assistant have attended the said online meeting. The meeting took place in conducive manner and general discussion on the tender took place.

2. Vendors enquired, whether they have to supply and install instrumentation, measurement and monitoring instruments per solar power plant at each site?

* It is clarified that vendor shall supply and install instrumentation, measurement and monitoring instruments for each site i.e. Byculla Office, BKC Officer Quarters, Kailash Officer Quarters, Bhandup Staff Colony and Chembur Staff Colony.

3. Vendors enquired about necessity of obtaining certification of SPV structure & foundation from a recognized Govt. Engineering College viz IIT / NIT etc. or by a reputed structural consultant.

* It is clarified that SPV structure & foundation shall be certified / vetted by a recognized Govt.Engineering College viz IIT / NIT etc. or by a reputed structural consultant or the consultant enlisted with MCGM or any statutory body and same shall be acceptable.

4. All other terms and conditions of the tender shall remain unchanged.

The meeting was ended with thanks to all participants.

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2 Best Performing Dynamic Bond Funds To Invest In 2021

Personal Finance

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IDFC Dynamic Bond Fund Direct-Growth

This fund has been ranked “No.1” by CRISIL, 4 star by Value Research and 5 star by Morningstar which is pretty decent in terms of fund performance in different economic behaviour. According to Value Research, the IDFC Dynamic Bond Fund Direct-1-year Growth’s returns were 4.96 percent, and it has generated 9.33 percent average annual returns since its debut. The expense ratio for this medium-sized product in its category is 0.72 percent, which is higher than most other Dynamic Bond funds. The fund’s cash holdings are 57.8% and its debt holdings are 42.2 percent. As of 1st October 2021, the fund has a Net Asset Value (NAV) of Rs 29.81 and the Asset Under Management (AUM) of the fund is Rs 3,832.96 Cr. The fund has no exit load and one can start SIP in this fund with Rs 1000.

DSP Strategic Bond Direct Plan-Growth

DSP Strategic Bond Direct Plan-Growth

The recent one-year returns on DSP Strategic Bond Direct Plan-Growth were 5.21 percent, and it has provided an average annual return of 8.76 percent since its debut. GOI, Food Corporation of India, Rural Electrification Corporation of India, and Housing Development Finance Corporation of India are among the fund’s top holdings. The expense ratio of this medium-sized Dynamic Bond fund is 0.52 percent, which is comparable to the expense ratio of most other Dynamic Bond funds. The consistency of returns generated by the DSP Strategic Bond Direct Plan-Growth plan is identical to those of other funds in its category and it has a fair potential to limit deficits in a bear market. The fund has a cash holding of 26.9% and a debt exposure of 73.2 percent. The fund’s Net Asset Value (NAV) is Rs 2,791.73 crore, and its Asset Under Management (AUM) is Rs 709.09 crore as of October 1, 2021. There is no exit load on this fund, and you may start investing in it with as little as Rs 500.

Best Dynamic Bond Funds To Invest In 2021

Best Dynamic Bond Funds To Invest In 2021

Based on CRISIL’s rating “No.1″and past performance, here are the two best Dynamic Bond Funds that you may invest in 2021.

Funds 1 mth returns 6 mth returns 1 Yr returns 3 Yr returns 5 Yr returns
IDFC Dynamic Bond Fund Direct-Growth 0.17% 3.43% 4.96% 10.74% 8.51%
DSP Strategic Bond Direct Plan-Growth 0.57% 3.56% 5.21% 10.41% 7.50%
Source: Groww

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in



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Reserve Bank of India – Tenders

Tenders

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Reserve Bank Staff College, Chennai invites e-tenders from the empaneled vendors (under the categories 1. Civil, Interior, Fabrication, Painting works above 10 lakhs and up to 25 lakhs and 2. Supply, Installation and Maintenance of Modular Furniture and Compactors above 10 lakhs and up to 25 lakhs) of Reserve Bank of India, Chennai for the work ‘Providing Modular Built in Wardrobes in Old Hostel Building Rooms at Reserve Bank Staff College, Chennai – 600018’. The work is estimated to cost ₹13.19 lakh and is to be completed within 45 days from the 10th day of issue of written order to commence the work.

E-Tenders comprising duly filled in details of both Part-I and Part II specifications of the tender should be uploaded in MSTC website under RBI portal not later than the date and time as indicated in the Schedule of Tender. Tenderers shall submit tender proposal complete in all aspects. The tenderers shall pay as Earnest Money a sum of ₹26,380/- (Rupees Twenty-six thousand three hundred and eighty only). The technical bids and price bids will be opened electronically on October 25, 2021 at 04:00 P.M. In the event of any date indicated above being declared a Holiday, the next working day shall become operative for the respective purpose mentioned herein.

Tender document can be downloaded from RBI website – www.rbi.org.in and www.mstcecommerce.com. Any amendment(s) / corrigendum / clarifications with respect to this tender shall be uploaded on the website / e-portal only. The tenderer should check the above website / e-portal for any Amendment / Corrigendum / Clarification before submitting the bid. The Employer is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The College reserves the right to reject any or all the tenders without assigning any reason thereof.

SCHEDULE OF TENDER (SOT)

a. E-tender No. RBI/RBSC//189//21-22/ET/189
b. Name of work Providing Modular Built in wardrobes in Old Hostel Building Rooms at Reserve Bank Staff College, Chennai – 600018.
c. Mode of Tender e-Procurement System (Online Part I – Techno-Commercial Bid and Part II – Price Bid through
www.mstcecommerce.com/eprochome/rbi)
Guidelines for e-tender has been provided as Annexure – I.
d. Date of NIT available to parties to download 03:00 P.M. on October 04, 2021.
e. Earnest Money Deposit ₹26,380/- from each bidder.
f. Last date of submission of EMD. 01:00 P.M. on October 25, 2021.
g. Pre-bid Meeting 11:30 A.M. on October 11, 2021 at Seminar Hall, Reserve Bank Staff College, 359, Anna Salai, Teynampet, Chennai – 600018.
h. Date of starting of e-Tender for submission of on-line Techno-Commercial Bid and price Bid at
www.mstcecommerce.com/eprochome/rbi		 03:00 P.M. on October 13, 2021.
i. Date of closing of online e-tender for submission of Techno-Commercial Bid & Price Bid. 03:00 P.M. on October 25, 2021.
j. Date & time of opening of Tender 04:00 P.M. on October 25, 2021.
k. Transaction Fee Transaction fee is 0.05 % of estimated cost subject to a maximum of Rs. 15,000/-Payment of Transaction fee is as mentioned in the MSTC portal through MSTC payment gateway through /NEFT/RTGS in favour of MSTC LIMITED.

Chief General Manager/Principal
Reserve Bank Staff College
359 Anna Salai, Teynampet
Chennai – 600 018

October 04, 2021

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Basel III Capital Regulations – Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital – Eligible Limit for Instruments Denominated in Foreign Currency/Rupee Denominated Bonds Overseas

Notifications

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RBI/2021-22/106
DOR.CAP.REC.No.56/21.06.201/2021-22

October 4, 2021

All Scheduled Commercial Banks (Excluding RRBs)

Dear Sir/ Madam,

Basel III Capital Regulations – Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital – Eligible Limit for Instruments Denominated in Foreign Currency/Rupee Denominated Bonds Overseas

Please refer to paragraph 1.16 of Annex 4 (Criteria for Inclusion of Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital) to the Master Circular Ref DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’ and the circular Ref. DBR.BP.BC.No.28/21.06.001/2016-17 dated November 3, 2016 on Issue of Rupee Denominated Bonds Overseas.

2. Several banks have approached us to clarify the amount of capital funds that can be raised overseas. The issue has been examined and it is clarified that the “eligible amount” for purpose of issue of PDIs in foreign currency as per para 1.16 (ii) of Annex 4 to the Master Circular dated July 1, 2015 referred to above, would mean the higher of:

(a) 1.5% of Risk Weighted Assets (RWAs) and

(b) Total Additional Tier 1 capital

as on March 31 of the previous financial year.

Not more than 49% of the “eligible amount” as above can be issued in foreign currency and/or in rupee denominated bonds overseas.

3. Accordingly, the sub para (ii) of paragraph 1.16 of Annex 4 to the Master Circular dated July 1, 2015 referred to above is amended as indicated in Annex 1 enclosed herewith. An illustration is enclosed in Annex 2 for greater clarity.

4. All the other terms of the Master Circular on Basel III Capital Regulations dated July 1, 2015, referred to above, as amended from time to time, shall remain unchanged. The issuances as above shall be subject to all applicable prudential norms and FEMA guidelines.

Yours faithfully

(Neeraj Nigam)
Chief General Manager-in-Charge

Annex 1

Amendment to sub para (ii) of paragraph 1.16 of Annex 4 to Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’

1.16 (ii) Not more than 49% of the eligible amount can be issued in foreign currency* and/or in rupee denominated bonds overseas.

“Eligible amount” in this context shall mean the higher of:

(a) 1.5% of RWA and

(b) Total Additional Tier 1 capital

as on March 31 of the previous financial year.

*Not applicable to foreign banks’ branches

Annex 2

Illustration on the “eligible amount” that can be raised as per Paragraph 1.16 (ii) of Annex 4 to Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’

We consider the RWAs of the bank as on March 31 of previous financial year as ₹ 1000 crore.

  Scenario Maximum amount of AT1 bonds that can be raised overseas (in foreign currency and/or in rupee denominated bonds overseas)
Case I The bank had AT1 capital of less than or equal to 1.5% of RWAs as on March 31 of the previous financial year.
Illustratively, the bank did not have any AT1 capital as on March 31 of the previous financial year.		 Equals ₹ 7.35 crore (49% of 1.5% of RWAs).
Case II The bank had AT1 capital more than 1.5% of RWAs as on March 31 of previous financial year.
Illustratively, the bank had AT1 capital of ₹ 50 crore as on March 31 of the previous financial year.		 Equals 49% of ₹ 50 crore i.e. ₹ 24.5 crore (49% of total AT1 capital as it is more than 1.5% of RWAs).

Note: The amount of AT1 capital recognised for inclusion in Tier 1 capital will be subject to the limits mentioned in para 4.2.2 of the Basel III Master Circular dated July 1, 2015 and para 1.3 of Annex 4 to the Master Circular ibid.

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Reserve Bank of India – Notifications

Notifications

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RBI/2021-22/105
DOR.ACC.REC.57/21.04.018/2021-22

October 4, 2021

All Member Banks of the Indian Banks’ Association
covered under the 11th Bipartite Settlement
and Joint Note dated November 11, 2020

Madam / Sir,

Enhancement in family pension of employees of banks –
Treatment of additional liability

The Indian Banks’ Association (IBA) has approached us for the amortisation of the increased expenditure resulting from the revision in family pension for employees of its member banks covered under the 11th Bipartite Settlement and Joint Note dated November 11, 2020.

2. The additional liability on account of revision in family pension consequent to the aforementioned settlement should be fully recognised and charged to the Profit and Loss Account in the current financial year. However, IBA has expressed that it would be difficult for some banks to absorb the large amount involved in a single year.

3. We have examined the issues from a regulatory perspective, and as an exceptional case, it has been decided that banks covered by the aforementioned settlement may take the following course of action in the matter:

a. The liability for enhancement of family pension shall be fully recognised as per applicable accounting standards.

b. The expenditure, as indicated in paragraph 2 above, may, if not fully charged to the Profit and Loss Account during the financial year 2021-22, be amortised over a period not exceeding five years beginning with the financial year ending March 31, 2022, subject to a minimum of 1/5th of the total amount involved being expensed every year.

c. Appropriate disclosures of the accounting policy followed in this regard shall be made in the ‘Notes to Accounts’ to the financial statements. The Notes to Accounts shall also disclose the amount of unamortised expenditure and the consequential net profit if the unamortised expenditure had been fully recognised in the Profit & Loss Account.

4. The Reserve Bank of India (Financial Statements – Presentation and Disclosures) Directions, 2021 shall be accordingly updated.

Yours faithfully,

(Neeraj Nigam)
Chief General Manager-in-Charge

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