Month: October 2021

Bank of Maharashtra net profit jumps 103 % to Rs 264 cr in Sept quarter, BFSI News, ET BFSI

Banking & Finance

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(Eds: Adding details) Mumbai, State-owned Bank of Maharashtra on Thursday reported a 103 per cent jump in its standalone net profit to Rs 264 crore in the September 2021 quarter, helped by healthy growth in net interest income.

The lender had reported a standalone profit after tax of Rs 130 crore in the same quarter of the previous fiscal.

The bank’s performance in the July-September 2021 period was good despite the pandemic, the bank’s Managing Director and CEO A S Rajeev said.

“One major reason for higher profit is growth of 34 per cent in NII (net interest income). Our core performance has improved,” he told reporters.

The bank’s recovery from written-off accounts stood at Rs 340 crore, including Rs 258 from the DHFL resolution, in the quarter, and this also resulted in higher profit.

During the April-September period of this fiscal, the bank reported a 104.11 per cent jump in the net profit at Rs 472 crore as against Rs 231 crore for HYFY21.

In Q2 FY2022, NII grew 33.84 per cent on a year-on-year basis to Rs 1,500 crore as against Rs 1,120 crore in the year-ago quarter.

Non-interest income rose 22.61 per cent to Rs 493 crore.

Net interest margin (NIM) improved to 3.27 per cent as on September 30, 2021.

Gross non-performing accounts (NPA) declined to 5.56 per cent from 8.81 per cent in the corresponding quarter of the previous fiscal. Net NPA also reduced to 1.73 per cent as against 3.30 per cent.

Provision coverage ratio improved to 92.38 per cent as against 87.15 per cent. It holds a cumulative COVID-19 provision of Rs 973 crore as of September-end.

Banks‘ recovery and up-gradation stood at Rs 645 crore from Rs 556 crore in the year-ago period.

Fresh slippages in the quarter were Rs 553 crore.

The lender said Srei Infrastructure, where it has an exposure of Rs 550 crore, was identified as an NPA in the quarter and the account is fully provided for.

Total basel-III capital adequacy ratio improved to 14.67 per cent with common equity tier-1 ratio of 11.38 per cent for Q2 FY22.

Gross advances increased 11.44 per cent to Rs 115,235 crore and total deposits were up by 14.47 per cent to Rs 181,572 crore.

Rajeev said the bank expects 14-15 per cent credit growth during the current fiscal.

The bank’s scrip was trading at Rs 21.90 apiece, up 4.53 per cent on the BSE. PTI HV HRS hrs



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HDFC Bank, Mastercard, 2 others launch $100-mln credit facility for MSMEs, BFSI News, ET BFSI

Banking & Finance

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HDFC Bank, Mastercard USAID, and DFC today announced a $100-million credit facility for micro, small and medium enterprises, which will help promote small businesses in India to digitise and recover from the economic impacts of the pandemic, Mastercard said in a statement.

“HDFC Bank is proud to join hands with Mastercard, USAID, and DFC in the endeavor to support small businesses in India”, said Rahul Shukla, Group Head, HDFC Bank.

HDFC Bank will reach beyond its current customer base to make at least 50% of this credit facility available to new small business borrowers and women entrepreneurs, while Mastercard will provide skills training and education on digitisation options, and DFC and USAID will facilitate the extension of the credit facility by de-risking HDFC Bank’s lending to small business owners.

Furthermore, the credit facility will be made available exclusively to new credit customers, with a goal of at least 50% being women entrepreneurs.

“At USAID, we believe gender equality and women’s empowerment are not just a part of development but are its core”, said Veena Reddy, mission director, USAID India.

The new credit facility aims to expand lending to small businesses that need financing to maintain and expand their operations, and enable recovery through digitisation. It also aims to support women-led businesses.



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Banks may set up central repository to tackle gold loan frauds

Banking & Finance

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Banks are exploring whether a centralised repository for reporting frauds in gold loans should be set up to tackle rising incidents of frauds amidst robust demand for these loans since the outbreak of Covid-19 pandemic.

The repository could help prevent/minimise gold loan frauds as lenders will be able to cross-check prospective borrowers’ record on the quality of gold they pledged for their earlier borrowings, said a senior public sector bank official.

Rise in gold loans

Loans against gold jewellery (LAGJ) portfolio of scheduled commercial banks (SCBs) soared by about 66 per cent year-on-yar (yoy) to ₹62,926 crore as at August 27, 2021, against ₹37,860 crore as at August 28, 2020, according to RBI data. SCBs LAGJ portfolio stood at ₹26,542 crore as at August 30, 2019.

Both internal and external frauds in gold loan business are the biggest risks, per an ICICI Securities report on gold loan.

“Banks are witnessing cases of these frauds in their gold loan portfolio in recent times.

“While specialised gold loan non-banking financial companies (NBFCs) are also seeing fraud cases in recent times, they are better placed in protecting themselves against such frauds,” said ICICI Securities Research Analysts’ Ansuman Deb, Kunal Shah and Vishal Singh.

The Analysts’ observed that internal fraud takes place when the company or bank’s own employees indulge in committing fraud. External fraud is a situation when a customer commits fraud by pledging fake collateral etc.

Banking expert V Viswanathan underscored that gold loan fraud can take place due to pledge of fake ornaments; and gold appraisers/valuers (either singly or in collusion with branch staff) getting their accomplices to take gold loans. Then there are cases of stolen ornaments being pledged.

“Aggressive expansion targets in gold loans puts pressure on branch officials. This leads to reliance on middle men to bring in borrowers or high dependence on appraisers or local staff. Accomplices are brought in by appraisers,” he said.

Further, if the appraiser/valuer knows that staff in a particular branch is not skilled in dealing with gold loans, word gets around fast locally, resulting in frauds.

Viswanathan noted that top performing branches get preferential treatment at head office or controlling office, resulting in fewer inspections. So, local staff are tempted to commit fraud.

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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India will conduct a Variable Rate Reverse Repo auction on October 22, 2021, Friday, as under:

Sl. No. Notified Amount
(₹ crore)		 Tenor
(day)		 Window Timing Date of Reversal
1 4,50,000 12
(November 4 & 5, 2021 being holidays)		 10:30 AM to 11:00 AM November 03, 2021
(Wednesday)

2. The operational guidelines for the auction as given in the Reserve Bank’s Press Release 2019-2020/1947 dated February 13, 2020 will remain the same.

Ajit Prasad
Director   

Press Release: 2021-2022/1072

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ACC approves appointment of seven executive directors in various PSBs

Banking & Finance

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The Appointments Committee of the Cabinet (ACC) has given its nod for the elevation of seven chief general managers and general managers as Executive Directors (EDs) in various public sector banks (PSBs).

Rajneesh Karnatak, Chief General Manager, Punjab National Bank, has been appointed as Executive Director in Union Bank of India for a period of three years. Ashwani Kumar, Chief General Manager, Punjab National Bank, has been appointed as Executive Director in Indian Bank for a period of three years.

Also see: RBI approves appointment of Pradeep Kumar Panja as Chairman of Karnataka Bank

Meanwhile, Kalyan Kumar, Chief General Manager, Union Bank of India, has been appointed as Executive Director in Punjab National Bank for a period of three years. Asheesh Pandey, Chief General Manager, Union Bank of India as Executive Director in Bank of Maharashtra for a period of three years with effect from the date of assumption of office on or after December 31, 2021.

The ACC has also appointed Yadav Ramjass, Chief General Manager, Bank of Baroda, has been appointed as Executive Director in Punjab and Sind Bank. Roy Joydeep Datta, Chief General Manager, Bank of Baroda, has been appointed as Executive Director in Bank of Baroda for period of three years.

Nidhu Saxena, General Manager, UCO Bank, has been appointed as Executive Director in Union Bank of India for a period of three years from the date of assumption of office on or after February 1, 2022, an official order issued by the Department of Personnel & Training (DoPT) said.

All the seven appointees are eligible for extension of their term of office, after a review of their performance, by two years, according to the DoPT order.

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IDBI Bank Q2 profit surges 75% to Rs 567 crore, BFSI News, ET BFSI

Banking & Finance

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New Delhi, IDBI Bank on Thursday reported a 75 per cent jump in net profit to Rs 567 crore for the second quarter ended September 30. The LIC-controlled bank had earned a net profit of Rs 324 crore in the same period (July-September) of the last fiscal.

The net interest income grew 9 per cent to Rs 1,854 crore during the reported quarter against Rs 1,695 crore a year ago. Net Interest Margin (NIM) improved by 32 basis points to 3.02 per cent, compared to 2.70 per cent in the second quarter last fiscal, IDBI Bank said.

The lender’s stressed assets ratio also improved, with gross non-performing assets (NPAs) declining to 20.92 per cent of gross loans as of September 30, 2021, against 25.08 per cent a year ago. Net NPAs improved to 1.62 per cent from 2.67 per cent.
Provisions for bad loans and contingencies rose to Rs 434.47 crore for the September quarter from Rs 389.44 crore in the year-ago period.

Staff costs fell 12 per cent to Rs 698 crore in September 2021 from Rs 789 crore a year earlier while tax expenses fell 39 per cent to Rs 208 crore from Rs 341 crore a year earlier.

“As of September 30, 2021, the bank had COVID-19 related provisions of Rs 863 crore (other than provisions held for restructuring under COVID-19 norms). The provision made by the bank is more than minimum required as per the RBI guidelines,” the lender said.

The provision coverage ratio, including technical write-offs, stood at 97.27 per cent as of September 30, 2021.



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PSU banks likely to get capital support in Q4 to meet regulatory requirements, BFSI News, ET BFSI

Banking & Finance

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New Delhi, The government is likely to pump capital in public sector banks during the last quarter of the current financial year to meet the regulatory requirements. The government in the Budget 2021-22 has made an allocation of Rs 20,000 crore for the capital infusion in the state-owned banks.

bank

In the current fiscal so far, all 12 public sector banks have posted a profit, which is being ploughed back to bolster the balance sheet of the banks, sources said.

Going forward, they said, the rise in stressed assets would determine capital requirement.

If numbers are anything to go by, the sources said, the financial health of public sector banks are showing gradual signs of improvement across the spectrum.

Last month, the Reserve Bank removed UCO Bank and Indian Overseas Bank from prompt corrective action framework (PCAF), following improvement in various parameters and a written commitment that the state-owned lender will comply with the minimum capital norms.

However, the only public sector lender left under the PCA framework is Central Bank of India. PCA is triggered when banks breach certain regulatory requirements such as return on asset, minimum capital, and quantum of the non-performing asset.

PCA restrictions disable the bank in several ways to lend freely and force it to operate under a restrictive environment that turns out to be a hurdle to growth.

Last financial year, the government infused Rs 20,000 crore in the five public sector banks. Out of this, Rs 11,500 crore had gone to three banks under the PCA — UCO Bank, Indian Overseas Bank, and Central Bank of India.

The government infused Rs 4,800 crore in Central Bank of India, Rs 4,100 crore in Indian Overseas Bank and Kolkata-based UCO Bank got Rs 2,600 crore.

The government has infused over Rs 3.15 lakh crore into public sector banks (PSBs) in the 11 years through 2018-19. In 2019-20, the government infused Rs 70,000 crore capital into PSBs to boost credit for a strong impetus to the economy.



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PNB Housing Finance plans fund raising up to ₹2,000 crore via NCDs

Banking & Finance

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PNB Housing Finance Limited (PNBHFL) proposes to go in for a fund raise of up to ₹2,000 crore through non convertible debentures (NCD) route. This proposal will be taken up at the upcoming board meeting of PNBHFL on November 2, sources said.

This plan to go in for fund raising via NCD route — in tranches — on private placement basis comes on the heels of the PNBHFL Board deciding not to proceed with the ₹4,000 crore preferential allotment deal with Carlyle Group and other marquee investors.

Preferential allotment deal falls through

It may be recalled that the PNBHFL-Carlyle Group deal had hit a roadblock after a proxy advisory firm had red flagged the preferential allotment on the pricing front, contending that it was not in the interest of the promoter (PNB) as well as the minority shareholders of PNBHFL.

Market regulator SEBI had soon after this intervened and asked PNBHFL not to go ahead with the planned preferential issue until the valuation of the shares is done by an independent registered valuer.

Also see: PNB Housing locked in lower circuit after it shelves stake sale plan

PNBHFL had fixed the preferential allotment price at ₹390 per share, lower than the stock price prevailing at that time. The company had preferred an appeal before the securities appellate tribunal (SAT) on the SEBI letter.

A two-member bench of the SAT on August 9 gave a split verdict and directed that its interim order of June 21 will continue till further orders. SAT also restrained PNB Housing Finance from disclosing the voting results (of shareholders) on the fund raise plan.

Post the SAT’s split verdict, SEBI had filed an appeal at the Supreme Court against this verdict.

SC dismisses SEBI appeal

Meanwhile, the Supreme Court on Wednesday dismissed the SEBI appeal against the SAT’s order in the PNBHFL’s ₹4,000 crore capital raising deal with Carlyle Group and other investors, stating that the appeal has become infructuous due to subsequent developments.

A bench headed by Justice L Nageswara Rao was informed by the counsel for PNBHFL that the housing finance company had decided not to proceed with the preferential allotment of shares and warrants to Carlyle Group and that an application has also been moved before SAT for withdrawal of its appeal against a SEBI directive.

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Indian Gold Rates Down Marginally Before Diwali, On Oct 21, IBJA Keeps Prices Controlled To Increase Demand

Personal Finance

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Personal Finance

oi-Kuntala Sarkar

|

Gold prices in India again dropped marginally today, although the prices in the international markets gained. Indian gold rates dropped by Rs. 20, today on October 21. So, 22 carat gold rates are quoted at Rs. 46,470/10 grams and 24 carat gold rates are quoted at Rs. 47,470/10 grams.

Indian Gold Rates Down Marginally Before Diwali, On Oct 21, To Increase Demand

However, the Comex gold futures today gained by 0.08% and were quoted at $1786.4, while the spot gold prices hiked by 0.21% and were quoted at $1787.00/oz till 2.44 PM IST. On the other hand, the US dollar index in the spot market also gained marginally by 0.03% and stood at 93.64 at the same time. In India, the Mumbai MCX gold in October future gained only by 0.01% today till 2.44 PM IST and was quoted at Rs. 47,505/10 grams.

Recently, the World Gold Council (WGC) has published a report on Indian gold demand that has mentioned that the demand for the precious metal has fallen lastly. However, the demand for gold jewelleries has again started to rally, and to keep up the pace intact, the Indian Bullion Jewellers Association (IBJA) is trying to keep the gold rates moderate.

WGC in its report mentions, “Econometric analysis shows that rising income is the most powerful driver of Indian gold demand in the long term. This bodes well for gold demand as the economy is set to benefit from a demographic dividend: the IMF forecasts per capita GDP growth of 23% between 2022 and 2026.1 But while India is the second-largest consumer of gold, its per capita consumption is low. And demand faces challenges in the short term: from declining household savings rate and agricultural wages.” At present, the Indian economy is still under pressure and the per capita income is not quite good. For the common people, it will be tough to buy gold at high rates. So, to increase gold demands before Diwali, IBJA is trying to keep the rates moderate. Although in some major cities, the gold rates have gained marginally.

Gold rates in different Indian cities are quoted differently, daily. Today’s gold rates in major Indian cities follow:

City 22 carat (INR/10 Grams) 24 carat (INR/10 Grams)
Mumbai 46,470/- 47,470/-
Delhi 46,700/- 50,950/-
Bangalore 44,550/- 48,600/-
Hyderabad 44,550/- 48,600/-
Chennai 44,840/- 48,920/-
Kerala 44,550/- 48,600/-
Kolkata 46,900/- 49,600/-

Story first published: Thursday, October 21, 2021, 14:57 [IST]



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Reserve Bank of India – Tenders

Tenders

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Regional Director, Reserve Bank of India, Bengaluru invites e-Tender through MSTC for Empanelment of vendors and award of work for Annual Maintenance Contract (AMC) and Facility Management Service (FMS) of Computer Hardware, Software and Peripherals at RBI, Bengaluru. The e-Tender along with the detailed tender notice is available at MSTC website https://www.mstcecommerce.com/eprochome/rbi and the website of the RBI at https://www.rbi.org.in under the menu “Tenders”.

2. All interested bidders must register themselves with MSTC through the above referred website to participate in the e-Tendering process.

3. The estimated cost of the work is ₹23.00 lakh (approx.), however the actual amount may vary.

4. The schedule for the e-Tendering process is as under:

A E-Tender No. RBI/Bengaluru/Estate/168/21-22/ET/227
B Mode of Tender e-Procurement System
(Online Part I – Techno-Commercial Bid and Part II – Price Bid through www.mstcecommerce.com/eprochome/rbi)
C Date of NIT available to parties to download October 21, 2021 after 11.00 Hrs.
D Earnest Money Deposit Rs.46,000 from all the bidders in the form Demand Draft / Bank Guarantee / NEFT to the Bank (Please refer “Schedule of Tender” in e-tender)
E Last date of submission of EMD November 19, 2021 at 12:00 Hrs
F Start Bid Date October 21, 2021 after 11.00 Hrs
G Date of Pre-Bid Meeting All bid related queries shall be sent by Bidders through email at ditbangalore@rbi.org.in on or before 12.00 p.m. November 10, 2021. Pre-Bid Meeting will be conducted on November 10, 2021 at 15:00 hrs.
H Last date for submission of DD/NEFT November 19, 2021 at 12:00 Hrs
I Last Date for submission of the tender November 19, 2021 at 15:00 Hrs
J Date of opening of Part I (Technical Bid) of tender November 19, 2021 at 16:00 Hrs

5. The Part-II i.e. price bid will be opened on the same day or at a later date as intimated by the Bank in respect of only those contractors/bidders who satisfies all criteria stipulated in Part-I. The Bank reserves the right to accept or reject any or all e-Tenders without assigning any reasons thereof.

Note: All the tenderers may please note that any amendments / corrigendum to the e-Tender, if issued in future, will only be notified on the RBI and MSTC Website as given above and will not be published in the newspaper.

Regional Director
Bangalore

October 21, 2021

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