October 2021 – Page 11 – IFSCCodeof.in

Reserve Bank of India – Press Releases

October 28, 2021 root Press Releases

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The following State Governments have offered to sell securities by way of auction, for an aggregate amount of ₹ 13,700 Cr. (Face Value).

Sr. No.	State/UT	Amount to be raised (₹ Cr)	Additional Borrowing (Greenshoe) Option (₹ Cr)	Tenure (Yrs)	Type of Auction
1	Andhra Pradesh	500	–	14	Yield
1	Andhra Pradesh	500	–	19	Yield
2	Bihar	2000	–	9	Yield
3	Goa	100	–	10	Yield
4	Jammu and Kashmir	400	–	12	Yield
5	Madhya Pradesh	2000	–	Re-issue of 6.85% Madhya Pradesh SDL 2031 Issued on September 15, 2021	Price
6	Maharashtra	3000	–	Re-issue of 6.91% Maharashtra SDL 2033 Issued on September 15, 2021	Price
7	Manipur	200	–	10	Yield
8	Rajasthan	1000	500	10	Yield
9	Tamil Nadu	1000	–	10	Yield
10	Telangana	2000	–	21	Yield
11	West Bengal	1000	–	10	Yield
	TOTAL	13700

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on November 01, 2021 (Monday). The Government Stock up to 10% of the notified amount of the sale of each stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility.

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on November 01, 2021 (Monday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.

In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.

For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at same/different rates of yield or prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield /minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹10,000.00 and multiples of ₹10,000.00 thereafter.

The results of the auction will be announced on November 01, 2021 (Monday) and payment by successful bidders will be made during banking hours on November 02, 2021 (Tuesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. For the new securities, interest will be paid half yearly on May 02 and November 02 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Ajit Prasad
Director

Press Release: 2021-2022/1110

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‘RBI should allow the rupee to appreciate’

October 28, 2021 root Banking & Finance

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Considering higher domestic inflation as supply disruptions mount, it will not do any harm for RBI to lean with the wind and let the rupee appreciate, as it can lead to reduced imported inflation when metal and oil prices are rising, and clear the liquidity overhang to some extent, according to Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.

“With CAD [current account deficit] at a comfortable situation and an extremely unlikely devastating third Covid (wave), the Indian rupee is going to handle any taper news with relative calm,” Ghosh said in the latest edition of SBI’s Ecowrap report.

“If we look at the current rupee trajectory, the rupee saw a tumultuous 2020, with the news of Covid-19 pushing the exchange rate down rapidly. However, it started gaining strength as India saw a current account surplus and foreign investors maintained faith in the economy by pouring in capital. RBI has continuously made forex purchases. In FY21, RBI purchased Rs 5.1 trillion worth of forex and its forex reserves swelled by $103.72 billion. Despite the second wave of Covid-19, the rupee gained strength and even went below 73 per dollar,” Ghosh added.

Dollar higher on upbeat US data but set for weekly losses

However, recently, the Indian unit has dropped from 73.09 per dollar as on September 1 to a low of 75.52 per dollar on October 12. It has again started appreciating and is currently at around 75. If we look at the turnover in the forex market, there has been excess supply of dollars at $2.2 billion in August 2021. This clearly shows that the appreciating bias on rupee remains.

The September 2021 merchandise trade deficit at $22.59 billion is quite high and has the closest counterpart in October 2012, when India recorded a merchandise trade deficit of $20.21 billion. But it needs to be remembered that trade data shows seasonality and it is fairly common to see a jump in imports as well as exports every quarter end month, Ghosh said.

So far, India’s exports have been doing quite well. India’s merchandise exports in April-September 2021 were $197.9 billion, a robust increase of 24.3 per cent over $159.2 billion in April-September 2019. In composition terms, engineering goods are the most valued. India has also seen considerable increase in products such as cereal preparations, cotton, electronics. drugs and pharma and chemicals are also performing well.

“Thus, achieving the target of $400 billion is not a pipe dream and this will provide a strong cushion to the current account balance, even if the oil import bills rise rapidly. Taking everything into account, our CAD projections stand at (-)1.4 per cent. India is also witnessing robust FDI inflows, even if the FPI flows are showing some volatility,” Ghosh added.

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S&P upgrades credit ratings of Manappuram Finance

October 28, 2021 root Banking & Finance

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International rating agency S&P has upgraded the long term issuer credit rating of Manappuram Finance Limited from “B+” to “BB-” with stable outlook. The rating agency also affirmed the ‘B’ short-term issuer credit rating on the company.

According to the Rating Rationale released by S&P, the gold-based lending business of the company has proved to be an effective counterbalance to weakness in India’s micro finance segment. Manappuram Finance is expected to continue to outperform its non-gold NBFC peers over the next 12 months in terms of asset quality and profitability, which would be reflected in the company’s lower credit costs, above-average profitability and strong capitalisation.

Also see: ‘Microfinance lenders should not put profit above social objectives’

V P Nandakumar, MD & CEO, Manappuram Finance, said, “The upgrade reflects the overall recovery in the economy and better prospects for growth. With the unorganised sector also getting back on its feet, we expect improved growth in gold loans and micro finance, as well as our other business verticals.”

High stress likely

S&P also noted that Manappuram’s gold-based lending model with a three-month tenor allows it to recognise asset quality stress early. However, stress will likely remain high in Manappuram’s non-gold portfolio, especially in the micro finance business. Manappuram’s funding profile is also improving with a shift towards longer tenor debt though material exposure to short-term wholesale funding remains.

The agency expects Manappuram’s risk-adjusted capital ratio to stay above 30 per cent over the next 12 months, one of the highest among its rated peers. Core earnings are likely to remain at more than 5 per cent of its average managed assets during this period.

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Consolidated PAT rises 14% YoY to Rs 1,122 cr, misses estimate, BFSI News, ET BFSI

October 28, 2021 root Personal Finance

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MUMBAI: Bajaj Finserv on Thursday reported a 14 per cent year-on-year (YoY) rise in consolidated net profit at Rs 1,122.1 crore for the quarter ended September, which was below analysts’ expectations.

The non-bank lender reported a 19.7 per cent on-year increase in its consolidated revenue from operations to Rs 18,008.2 crore for the reported quarter.

Bajaj Finserv said after the disruption caused by the second wave of the pandemic, recovery in the business gathered momentum on the back of reopening of the economy in most states, rapid vaccinations and policy support.

The non-bank lender said the business has now shifted focus to growth and remains “cautiously optimistic” about its prospects for the remainder of the current financial year.

The company’s subsidiary Bajaj Allianz General Insurance reported a 28 per cent YoY rise in net profit to Rs 425 crore in the reported quarter. The business’ gross written premium jumped 21 per cent on-year to Rs 5,034 crore in the quarter.

Bajaj Allianz Life Insurance also reported a solid quarter of earnings as new business premium rose 62 per cent on-year to Rs 2,227 crore in the quarter. Renewal premium in the quarter was up 22 per cent whereas, gross written premium climbed 42 per cent.

The net profit of Bajaj Allianz Life grew to Rs 104 crore in the reported quarter from Rs 98 crore in the year ago period, Bajaj Finserv said.

Shares of Bajaj Finserv were down 0.2 per cent at Rs. 17,986 on the National Stock Exchange.

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Unions in IDBI Bank request it be re-classified as PSB

October 28, 2021 root Banking & Finance

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Four unions in IDBI Bank have written to the Finance Minister requesting that the proposed sale of their bank to private players by the government and LIC of India be stopped and the bank be re-classified as a public sector bank.

This comes in the wake of the Department of Investment & Public Asset Management (DIPAM), on behalf of GoI, moving to engage legal advisor and transaction Advisor for facilitating/ assisting it in the process of strategic disinvestment of IDBI Bank along with transfer of management control.

The four unions — All India IDBI Officers’ Association, IDBI Officers’ Organisation, All India IDBI Employees’ Association and IDBI Karmachari Sangh — emphasised that all the staff had secured job in IDBI Bank through All India competitive exam.

“Many officers left their previous job with public sector banks and the Central government to join IDBI Bank,” per a joint statement.

Risk to employment

The unions feared that in case of sale of IDBI Bank to private players, as proposed by the government and LIC, the fate of around 17,000 families supported by direct employment and around 20,000 families supported by indirect employment with IDBI Bank will be at risk.

According to the statement, around 50 per cent of staff working in IDBI Bank under direct or indirect employment are female employees. More than 100 officers under direct employment are either physically challenged or visually impaired.

Serve the common man

AV Vithal Koteswara Rao, General Secretary, AIIDBIOA, underscored that IDBI Bank, being majority owned by LIC (promoter with management control) and GoI (co-promoter), is catering to the needs of the common man with zero balance Savings Bank accounts and offering aggressively various Government products and schemes.

So, if IDBI Bank is sold to a strategic buyer, various products and schemes of GoI which are meant for the common man and general public cannot be offered through a Bank owned by private entities, he added.

“India needs more government banks to improve financial inclusion parameters/aspects. Reduction in the number of government banks leads to less competition which is nothing but monopoly. This is totally against the interest of the common man and general public,” Rao said.

Possible amalgamation

He felt that the government should explore the possibility of amalgamation of IDBI Bank with either State Bank of India, Bank of India, Central Bank of India or Bank of Maharashtra so that the Government’s cause of financial inclusion, credit outreach to MSMEs and agriculture, and support to the ₹100-lakh crore ‘PM Gati Shakti Master Plan’ for developing holistic infrastructure is better served.

The Cabinet Committee on Economic Affairs had given its in-principle approval in May 2021 for strategic disinvestment along with transfer of management control in IDBI Bank.

The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with RBI, per a CCEA statement.

GoI and LIC together own more than 94 per cent of equity of IDBI Bank (GoI at 45.48 per cent, LIC at 49.24 per cent). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.

The government intends to come out with expression of interest for strategic disinvestment of IDBI Bank by December.

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Morgan Stanley downgrades India to equal-weight, BFSI News, ET BFSI

October 28, 2021 root Personal Finance

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Morgan Stanley has downgraded India and Brazil equities to equal-weight while upgrading the Indonesian market to overweight position.

Morgan Stanley said it expects a structural multi-year earnings recovery in India, but at 24 times forward price to earnings it will look for some consolidation ahead of US Federal Reserve‘s tapering, an RBI hike in February and higher energy costs.

“We move tactically equalweight on India equities after strong relative gains – we expect a structural multi-year earnings recovery, but at 24 times forward price to earnings, we look for some consolidation ahead of Fed tapering, an RBI (rate) hike in February and higher energy costs,” said Morgan Stanley.

MSCI India has gained 26% in the last 6 months, outpacing the MSCI Emerging Markets index by 30% over the same period. Morgan Stanley said this strong outperformance is partly due to bullish consensus earnings expectations and a favourable reform agenda.

Morgan Stanley in a recent note had said that early signs of capital expenditure, supportive government policy for higher corporate profit share in GDP and a robust global growth outlook will help India enter a new profit cycle, which may result in earnings compounding at over 20% per annum for the next three to four years.

However, the financial services firm said that valuations are increasingly constraining returns over the next three to six months.

“Notwithstanding the already-sharply upgraded consensus earnings through 2021, India’s 12-month forward P/E ratio has moved to an all-time high of 24.1 times. As a result, India is the most expensive market in our model on EM-relative 5-year trailing z-score of P/B and P/E,” said Morgan Stanley. Indices may take a breather from here and look for some consolidation, said Morgan Stanley, adding that it prefers consumer discretionary and financials while avoiding the technology and healthcare sectors.

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PayU launches tokenisation solution ‘PayU Token Hub’, BFSI News, ET BFSI

October 28, 2021 root Personal Finance

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PayU today launched its tokenisation solution ‘PayU Token Hub‘, which allows issuing banks to generate their own tokens. This solution is built by PayU and Wibmo, in partnership with Visa, MasterCard and leading banks.

“We welcome the new RBI guidelines. PayU Token Hub is fully interoperable, providing best of network and issuer tokens for card-on-file use cases extensible to device tap-and-pay.” said Manas Mishra, chief product officer.

‘PayU Token Hub’ will enable businesses to comply with RBI’s latest guidelines on online card data storage, and will soon expand to enable businesses to safely store and create tokens across other popular payment modes like UPI and Net Banking.

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Corrigendum – Supply, Installation, Testing and Commissioning (SITC) of 120 Nos. Sealed Maintenance Free (SMF), Valve regulated Lead Acid batteries (12 V, 150 AH) having Fire retardant casing at Bank’s Office Building at Bandra Kurla Complex in Mumbai

October 28, 2021 root Tenders

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A reference is invited to the event no: RBI/Mumbai/Estate/78/21-22/ET/107 for the captioned tender. In this context, please note the date of pre-bid meeting as mentioned below:

a.	Pre–bid meeting	:	November 02, 2021 at 11:00 AM via webEx mode
b.	Last date of Submission of EMD	:	November 16, 2021 till 3:00 PM
c.	Close Bid date and time	:	November 16, 2021 till 3:00 PM
d.	TOE start time (Opening of Part I – Technical Bid)	:	November 16, 2021 at 3:30 PM onwards

2. All the other terms and conditions mentioned in the tender remain unchanged.

Regional Director

RBI, Maharashtra & Goa

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