Month: November 2021

Spandana Sphoorty appoints Shalabh Saxena as new MD and CEO

Banking & Finance

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The country’s second-largest microfinance institution, Spandana Sphoorty, on Monday announced the appointment of Shalabh Saxena as its new Managing Director and CEO, and Ashish Damani as the President and Chief Financial Officer.

While Saxena is currently serving as the MD and CEO of Bharat Financial Inclusion Ltd (BFIL), Damani has nearly two decades of experience at BFIL and is currently serving as its Chief Financial Officer, Spandana said in a statement.

“Both Saxena and Damani will join Spandana soon,” it further said. In a stock exchange filing, Spandana said the board has approved the appointment of Saxena for five years from the date of joining.

The Board has also appointed Abanti Mitra, an independent director with Spandana since 2011, as non-executive Chairperson of the Board with immediate effect. “Outgoing Chairman, Deepak Vaidya, will continue to serve on the Board as an independent director,” it said.

Spandana has been in the spotlight after its founder and erstwhile Managing Director Padmaja Reddy stepped down over concerns over a plan to sell the company to Axis Bank. It had on November 2 announced a change in its leadership structure, following the resignation of Reddy and had confirmed the hiring of an eminent industry veteran as its new MD and CEO.

In its statement on Monday, Spandana said the Management Committee of the board is fully engaged in supporting day-to-day operations. The company has also hired independent third-party firms Alvarez & Marsal, PwC and CAM to provide support and conduct special review exercises during the leadership transition, and they are already fully engaged.

Transition

The Management Committee is also in the process of addressing gaps in the transition of services after Reddy stepped down.

“Shortly prior to her resignation, Reddy had transferred the company’s IT systems to a new IT vendor and outsourced its management to that vendor,” Spandana said, adding that there has been no meaningful impact on the day-to-day business operations of the company from this.

It is engaging with the new vendor appropriately and has also made good progress on creating a parallel IT environment.

Additionally, some potential concerns have been brought to the board’s notice regarding certain gold loan branches of Spandana’s subsidiary, Criss Financial Limited. It is currently in the process of confirming the status of the same, the company said.

The matter relates to its branches with a combined portfolio of less than one per cent of Spandana’s consolidated AUM, and therefore would not have a material financial impact on the company.

Business update

Spandana’s business demonstrated healthy performance in the quarter that ended September 30, 2021 (unaudited basis), with standalone collection efficiency for the entire quarter of 105 per cent and 113 per cent for September, including pre-payments, the company said.

The standalone disbursal volumes are also healthy at over ₹1,150 crore for the quarter ended September 30, 2021, it further said.

It has resumed the audit of the financial results for the quarter ended September 30, 2021, following a brief transition-related hiatus and expects to announce results in the next few weeks.

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Reserve Bank of India – Tenders

Tenders

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A reference is invited to the captioned e-tender no. RBI/Jaipur/Estate/166/21-22/ET/225 which was placed on October 20, 2021 under the “Tenders” link of RBI website (www.rbi.org.in) and MSTC portal (www.mstcecommerce.com).

2. In continuation to this, it is notified that the last date for submission of tender has been extended to December 06, 2021, 02:00 PM.

Regional Director
Jaipur

Date: 22.11.2021

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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 November 23, 2021, Tuesday, as under:

Sl. No. Notified Amount
(₹ crore)		 Tenor
(day)		 Window Timing Date of Reversal
1 2,00,000 7 10:30 AM to 11:00 AM November 30, 2021
(Tuesday)

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 (Communications)

Press Release: 2021-2022/1232

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Nomura business index hits new high of 114

Banking & Finance

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The Nomura India Business Resumption Index (NIBRI) has risen to yet another high of 114 for the week ending November 21 from 110.3 in the prior week, suggesting the business resumption index is 14 percentage points (pp) above pre-pandemic levels (i.e., 100).

Google workplace mobility rose sharply by 18.1 pp, while retail and recreation fell by 3.3 pp and the Apple driving index rose by 3.6 pp. The labour participation rate remained tepid at 39.8 per cent, while power demand rose by 0.2 per cent w-o-w, as payback from the 5.5 per cent rose in the prior week.

“A mix of supply-side headwinds and demand-side tailwinds continue to obscure the growth outlook. On the demand side, there is evidence of strong festival demand among consumers, an uptick in credit growth and robust core imports in October. Low infection rates and reopenings are also boosting mobility and services activity,” Nomura said.

“However, October auto sales have been lacklustre, reflecting not only semiconductor shortages but also the impact of weak rural demand on two-wheeler sales. The energy crunch seems to be easing, with a rise in coal stocks at power plants. Overall, we maintain our GDP growth outlook of 9.2 per cent for FY22, with a downside risk of ~1 pp due to supply issues,” Nomura added.

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PMC Bank depositors invested over ₹5 lakh to get their money back over 10-year period

Banking & Finance

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Depositors of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank with deposits over ₹5 lakh will get their money back in a piecemeal manner over an extended 10-year period, per the draft scheme of amalgamation of PMC Bank with Unity Small Finance Bank (Unity SFB).

Also, no further interest will be payable on the interest-bearing deposits of the transferor bank for five years from the appointed date

The aforementioned clauses are unlikely to go down well with depositors (having deposits over ₹5 lakh), especially senior citizens, who struggled to make ends meet amid the pandemic due to the ₹1 lakh per depositor cap on withdrawal during the entire two-year period their bank has been under directions.

Modalities

As per the scheme, Unity SFB (transferee bank) will pay the amount received from the Deposit Insurance and Credit Guarantee Corporation to all the eligible depositors of PMC Bank (transferor bank), which would be an amount equal to the balance in their deposit accounts or ₹5 lakh, whichever is less;

At the end of two years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹50,000, whichever is less, on-demand only to the retail depositors of the transferor bank.

The appointed date is the date when the undertaking of the transferor bank will stand transferred to, and vest in the transferee bank.

At the end of three years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹1 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

At the end of four years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹3 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

At the end of five years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹5.50 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

The entire remaining amount of deposits (after the payments over five years) will be paid in the accounts of the retail depositors of transferor bank after 10 years from the appointed date, on demand.

Interest at the rate of 2.75 per cent per annum shall be paid on the retail deposits of the transferor bank which shall be remaining outstanding after the said period of five years from the appointed date. This interest will be payable from the date after five years from the appointed date.

The transferee bank will have time up to 20 years from the appointed date, to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments.

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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India has today placed in public domain a draft scheme of amalgamation of The Punjab and Maharashtra Cooperative (PMC) Bank with Unity Small Finance Bank Ltd. (USFB), a banking company incorporated in India under Companies Act, 2013, and having its Registered Office in New Delhi. USFB has commenced operations with effect from November 1, 2021.

PMC Bank Limited, Mumbai, Maharashtra, a Multi-State Urban Cooperative Bank, was placed under All-Inclusive Directions under Sub-section (1) of Section 35-A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on September 23, 2019 vide Directive DCBS.CO.BSD-I/D-1/12.22.183/2019-20 dated September 23, 2019 on account of fraud which led to steep deterioration in the net-worth of the bank. The directions were last extended vide Directive dated June 25, 2021 up to December 31, 2021. Given the financial condition of the PMC Bank and in the absence of proposals for capital infusion, the bank was not viable on its own. In that event, the only course of action could have been cancellation of its licence and taking it for liquidation, wherein, depositors would have received payment up to the insurance ceiling of ₹5 lakh.

The draft scheme of amalgamation published today, envisages takeover of the assets and liabilities of PMC Bank including deposits, by the USFB in terms of the provisions of the scheme giving a greater degree of protection for the depositors. It may be seen that USFB is being set up with capital of about ₹1,100 crore as against regulatory requirement of ₹200 crore for setting up of a Small Finance bank under the Guidelines for on-tap licensing of Small Finance bank in Private Sector dated December 5, 2019, with provision for further infusion of capital at a future date after amalgamation.

The Reserve Bank invites suggestions and objections, if any, from members, depositors and other creditors of transferor bank (PMC) and transferee bank (USFB), on the draft scheme, which may be sent to the address mentioned in the “Notice”. The draft scheme has also been sent to transferor bank and transferee bank for their suggestions and objections. The suggestions and objections will be received by Reserve Bank up to 5.00 PM on December 10, 2021. The Reserve Bank will take a final view thereafter.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/1231

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‘Co-op Societies not authorised to conduct banking biz’

Banking & Finance

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The Reserve Bank of India (RBI), in an advisory to the members of the public, said co-operative societies have neither been issued any licence under Banking Regulation (BR) Act, 1949 nor are they authorised for doing banking business.

Further, insurance cover from the Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with these societies.

“Members of the public are advised to exercise caution and carry out due diligence of such co-operative societies if they claim to be a bank, and look for banking licence issued by RBI before dealing with them,” the central bank said in a statement.

Forbidden word

Simultaneously, RBI asked co-operative societies to desist from using the words “bank”, “banker” or “banking” as a part of their names, except as permitted under the provisions of BR Act, 1949 or by the Central bank.

RBI has noticed some co-operative societies are using the word “Bank” in their names in violation of Section 7 of the BR Act, 1949 (As Applicable to Co-operative Societies) (the BR Act, 1949).

“It has also come to the notice of RBI that some co-operative societies are accepting deposits from non-members/ nominal members/ associate members which tantamount to conducting banking business in violation of the provisions of the BR Act, 1949,” the Central bank said.

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Reserve Bank of India – Notifications

Notifications

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RBI/2021-22/133
DOR.Rur.REC.70/31.04.002/2021-22

November 22, 2021

All Regional Rural Banks

Madam/Sir,

Inclusion in/exclusion from the Second Schedule to the Reserve Bank of India Act, 1934 – Regional Rural Banks (RRBs)

We advise that the name of Baroda UP Bank has been included to and names of three erstwhile Regional Rural Banks (RRBs) have been excluded from the Second Schedule to the Reserve Bank of India Act, 1934, by notification DOR.Rur.S1765/31.04.002/2021-22 dated October 12, 2021 published in the Extraordinary Gazette of India (Part III – Section 4) dated November 12, 2021.

2. Copy of the above notification DOR.Rur.S1765/31.04.002/2021-22 dated October 12, 2021 is enclosed.

Yours faithfully,

(Neeraj Nigam)
Chief General Manager-in-Charge
Encl: as above

DOR.Rur.S1765/31.04.002/2021-22

October 12, 2021

NOTIFICATION

In exercise of the powers conferred under clauses (a) and (b) of sub-section (6) of section 42 of the Reserve Bank of India Act, 1934 (hereinafter referred to as “the RBI Act”), the Reserve Bank of India, hereby, directs the exclusion of the Regional Rural Banks indicated below at column no. [A] from the second schedule of the RBI Act and the inclusion of the Regional Rural Bank indicated below at column no. [B] in the second schedule of the RBI Act.

Name of the erstwhile Regional Rural Banks
[A]		 Name of new Regional Rural Bank
[B]
Baroda Uttar Pradesh Gramin Bank Baroda UP Bank, Gorakhpur, Uttar Pradesh
Kashi Gomti Samyut Gramin Bank
Purvanchal Bank

(Jayant Kumar Dash)
Executive Director

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Top 5 Private Sector Banks With Highest Interest Rates On Savings Accounts

Personal Finance

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DCB Bank

DCB Bank’s resident, NRE, and NRO Savings Bank Account interest rates are listed below (with effect from October 1, 2021).

Balance Range (INR) Rate of Interest p.a. W.E.F October 1, 2021
On balances up to 1 lakh in the account 2.75%
On balances above 1 lakh to less than 25 lakh in the account 5.00%
On balances from 25 lakh to less than 50 lakh in the account 6.00%
On balances from 50 lakh to less than 2 crore in the account 6.50%
On balances from 2 crore to less than 50 crore in the account 5.50%
On balances from 50 crore and above 5.00%
Source: Bank Website

RBL Bank

RBL Bank

Below are the interest rates on savings deposits including NRE/NRO Savings of RBL Bank which are in force from September 01, 2021.

Daily balance Rate of Interest (p.a.)
Upto Rs. 1 lakh 4.25%
Above Rs. 1 lakh upto Rs. 10 lakh 5.75%
Above Rs. 10 lakh and upto Rs. 3 Crore 6.00%
Above Rs. 3 Crore upto Rs. 5 Crore 6.00%
Source: Bank Website

Bandhan Bank

Bandhan Bank

Bandhan Bank’s Domestic / Non-Resident Rupee Savings Deposit interest rates, effective from November 1, 2021, are listed below.

Daily balance In Rs Rate p.a
Daily Balance up to 1 lakh 3.00%
Daily Balance above 1 lakh to 10 lakh 5.00%
Daily Balance above 10 lakh to 2 crore 6.00%
Daily Balance above 2 crore to 10 crore 5.00%
Source: Bank Website

Yes Bank

Yes Bank

With the introduction from May 13, 2021, the interest rates on savings accounts of Yes Bank for resident and non-resident customers are stated below.

Daily Balance in the Savings Account (INR) Applicable Interest Rates (p.a.)
4%
>1 Lac to 4.50%
>=10 lacs to 5.25%
Source: Bank Website

IDFC First Bank

IDFC First Bank

Here are the most recent interest rates on savings accounts of IDFC First Bank which are in force from 01/05/2021.

On Balances (in Rs) Rate of Interest (% p.a.)
4.00%
>1lac 4.50%
>10lac 5.00%
>2Cr 4.00%
>10Cr 3.50%
>100 Cr 3.00%
Source: Bank Website



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Buy This Engineering & Construction Company Stock For 32% Upside: ICICI Direct

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Techno Electric Q2FY22 results:

The company has logged 193 bps increase YoY in margins which came in at 31 percent, offsetting just 6.4 percent YoY revenue growth at Rs 2.7bn. Because of covid, “EPC revenue reported flat YoY growth of Rs. 2.2 billion in Q2FY22 and was below expectations. EPC margins contracted 220bps YoY to 18.3%. Energy segment booked healthy 42% YoY revenue growth to Rs481mn. The management guided for Rs12bn of revenue from EPC segment for FY22E with a

margin of 15%”, said the report.

Strong order intake outlook:

Strong order intake outlook:

In the first half of the Fy22, the company’s order book totalled to Rs. 5.7 billion. The company’s order book is seen to expand going forward in H2FY22 and the management forecasts for order intake worth Rs. 20 billion, of which Rs. 12 billion order will be by FGD, Rs5 billion from transmission and Rs.2 billion from

smart meters.

Rationale for a ‘Buy' on Techno Electric:

Rationale for a ‘Buy’ on Techno Electric:

ICICI Direct maintains BUY on the scrip of Techno Electric on healthy cashflow with cash and equivalents of Rs.8 billion, and benign valuation. “Despite challenges, the company is confident of maintaining margins at 15%. Given healthy growth outlook

and cashflow, we maintain BUY with revised SoTP-based target price of Rs332. We believe the foray into data centre business will be positive in the long run as it gives an avenue to utilise the wind power efficiently and provides the company a foothold in a promising growth segment. Using the SoTP methodology, we value the standalone EPC business at Rs211 (20x FY23E earnings), discounted cashflow from wind

assets at Rs.44, transmission assets at Rs.10 per share and cash and equivalents at Rs. 66 per share”, says the brokerage.

Disclaimer:

Disclaimer:

The stock has been picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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