Bank accounts opened under PMJDY have swelled to 43.76 crore since its launch in August 2014.
“Progressing ahead with a mission to provide universal access to banking facilities for every adult citizen, 31.67 crore #RuPay debit cards with inbuilt accident insurance coverage issued to #PMJanDhan account holders till October 21,” Department of Financial Services under Ministry of Finance said in a tweet.
The Jan Dhan Yojana, which was announced by Prime Minister Narendra Modi in his Independence Day address in 2014, was launched on August 28 in the same year.
In 2018, the government launched PMJDY 2.0 with enhanced features and benefits. Under the new version, the government decided to shift focus from ‘Every Household’ to ‘Every Unbanked Adult’ and free accidental insurance cover on RuPay cards was doubled to Rs 2 lakh for PMJDY accounts opened after August 28, 2018.
“#PMJanDhan accounts have grown multi-fold (from 14.72 crores in Mar’15 to 43.76 crores in Oct’21). An exceptional journey of India’s #FinancialInclusion Program,” another tweet said.
About 55 per cent of the total account holders under PMJDY, a flagship scheme of the government to promote financial inclusion, are women.
The Jodhpur bench of the Rajasthan High Court has granted bail to former SBI chairman Pratip Chaudhuri in the Garh Rajwada case staying the Jaisalmer court’s arrest warrant issued in February 2020. Chaudhuri has been released on Tuesday and will fly to Delhi tommorrow, nine days after he was taken into custody, a person with direct knowledge of the matter said.
Meanwhile employees and other directors of Alchemist ARC including CEO Alok Dhir have got a stay against any action by the Rajasthan police in the case and will move the High Court to quash the order.
The Jodhpur bench on Tuesday granted stay of order dated and all consequential orders passed by the chief judicial magistrate of Jaisalmer in a hearing of the petition and directors. “The court has also observed that the case is of civil nature and that similar FIR has been quashed by the Supreme Court,” the person cited above said.
Chaudhuri will have to move a separate petition to quash any action against him in the case.
The Indian banking industry was shocked on November 1 after police from Jaisalmer arrested Chaudhuri following a complaint from a defaulter who lost his property during a resolution process. Chaudhuri was SBI chairman between April 7 2011 and September 30 2013.
The case refers to the ‘Garh Rajwada’ hotel project in Jaisalmer, financed by SBI in 2007. Since the project was not completed for three years and a key promoter passed away in April 2010, the account slipped into the non-performing asset (NPA) category in June 2010. Subsequently, the Rs. 25 crore loan was sold to Alchemist Asset Reconstruction Co (ARC) in 2014 of which Chaudhuri became a director on superannuation from the bank.
The promoter Harendra Singh Rathore had launched a protest petition in a Jaisalmer court alleging conflict of interest against Chaudhuri after the intital FIR filed in 2015 was closed after the Rajasthan police said it was a civil matter.
Subsequently, a Jaisalmer court had issued an arrest warrant against Alchemist directors including Chaudhuri and CEO Dhir.
The RBI had barred Diners Club from on-boarding new customers from May 1, through an order dated April 23. The ban followed the card network’s failure to comply with the central bank’s order/norms pertaining to data localisation.
Yavatmal: The Reserve Bank of India (RBI) has imposed various restrictions on Yavatmal-based Babuji Datey Mahila Cooperative Bank Ltd under section 35A read with section 56 of the Banking Regulations Act, 1949. The restrictions came into force from Tuesday, November 9.
The RBI restrictions state that the bank is allowed to let its savings account holders withdraw only Rs5,000 in the next six months. Besides, the bank is restricted from accepting any fresh deposits without the prior permission of RBI.
The directions add that considering the bank’s liquidity position o account holder can withdraw a sum exceeding Rs5,000 of the total balance across all savings bank or current accounts for the next six months. The bank has been in heavy losses and reported NPAs to the extent of over Rs200 crore.
There was heavy rush of concerned depositors at the bank on Tuesday itself. No senior officials or directors were present at the bank, which added to confusion among depositors.
Chief officer Sujata Mahajan later confirmed the RBI action and said there was failure in recovery of loans, which led to the RBI action. “We have expedited recovery proceedings and in next two months we shall recover the defaulted amount, and recoup the current situation,” she said, appealing to depositors not to panic as their money is safe.
Deputy registrar of cooperatives Ramesh Katke said he has limited control over cooperative banks as they are governed by RBI. “Today, I summoned a meeting of the Board of Directors and instructed them to act strictly by the rules, which they agreed to comply with hereafter,” Katke said and urged the public not to panic. Their deposits are safe and the current situation will be overcome within two months, he added.
Bank account holder Akhtar Firdos Mohd Razak had launched an indefinite hunger strike in front of the main branch of the bank from October 25 with his family. He claims to have incurred heavy losses due to faulty service of the bank, which made him a defaulter. He accused bank directors of giving loans to their favourites recklessly, which caused heavy loss to the bank.
The bank said Razak is angry because of recovery proceedings by the bank after he defaulted on his loan.
Yes Bank is understood to be planning legal action against the Gautam Buddh Nagar police order disallowing the private lender from dealing with or exercising rights over shares of DishTV. This is a part of the bank’s attempts to recover loans to the group.
According to legal experts, the bank can seek redressal from the Allahabad HC against the police order. The police have issued a notice under Section 102 of the Criminal Procedure Code, which gives them power to seize property that is allegedly stolen or there is reasonable suspicion. The notice was issued on a case based on a complaint by Subhash Chandra, chairman of Essel Group. The FIR is understood to have been lodged in September 2020.
The private bank, which is the largest shareholder in DishTV with a stake of over 24%, has sought to oust the management. The bank had acquired a stake in the broadcaster after invoking a pledge on shares that were offered by the Essel Group promoter. The pledges were invoked after the promoter defaulted on its loans. The Essel Group, which has come under stress, had managed to extract a standstill agreement from other lenders. Yes Bank has continued to pursue recovery and moved a resolution to sack CEO Jawahar Goel and other independent directors.
However, last Saturday, DishTV informed the stock exchanges that the UP Police have issued a notice to the bank asking it not to deal with DishTV shares or exercise any rights in respect of them.
Chaudhary’s bail plea was rejected, and after spending a day in jail, he was admitted to Jawahar Hospital in Jaipur last Wednesday due to restlessness.
The loan scam
In 2007, the state-owned bank had sanctioned a loan of Rs 24 crore to Godawan Group for a constructing a hotel in Jaisalmer. The properties were worth Rs 200 crore. The Group was unable to repay the loan as the project could not be completed and Dilip Singh Rathore, group owner, passed away in April 2010.
The loan was declared a non-performing asset in June 2010.
Chaudhary has been alleged to have “connived” with Alchemist Asset Reconstruction Company, and violated Reserve Bank of India norms to declare the loan an NPA, and sold company property for Rs 25 crore. Chaudhary retired as SBI chairman after a two-year term in September 2013.
Harendra Singh Rathore, son of Dilip Singh and current promoter of Godawan Group, pointed out that Chaudhury joined the board of Alchemist ARC in October 2014.
A complaint was registered with Rajasthan Police in 2015, which was closed after it was stated a “civil matter” between individuals.
However, following a protest petition filed by Harendra Rathore in 2016, which challenged the police action and investigation, Chaudhuri was arrested on last Sunday.
The order was issued on February 12, 2020, but execution was held up by the COVID-19 pandemic.
Chaudhary did not follow proper procedure in the auction of the properties and did it in a hurry, the court order said, adding that the entire process appears to be a “conspiracy”, hatched along with officials of Alchemist, to acquire the properties.
The properties were given away at a much lower price than the reserve price and Chaudhary misused his position, because the project was declared an NPA much before time, the order added.
Latest developments
Alok Dhir of Alchemist ARC, who is the other accused in the case, got transit anticipatory bail on Friday from the Delhi High Court. He will not be arrested till Tuesday.
Chaudhury has been charged under sections 420 (cheating and dishonesty including delivery of property), 409 (criminal breach of trust by public servant, or by banker, merchant, or agent) and 120B (criminal conspiracy) of the Indian Penal Code.
The bank, defending Chaudhary, said in a statement that the sale followed the laid-down process in line with the policy of the bank. SBI said it took various steps for completion of the project as well as recovery of dues but it did not yield the desired results. Hence, the dues were assigned to an ARC in March 2014.
The borrower was put through the Insolvency and Bankruptcy Code process by the ARC, and the asset was acquired by a non-banking financial company in December 2017, the bank had said in the statement.
The arrest of Pratip Chaudhary, former chairman of State Bank of India, has shocked the industry, since there was no notice or formal summons in the 14-year-old loan case of a hotel project in Jaisalmer, Rajasthan.
Rajnish Kumar, Chaudhary’s predecessor, had told the ET that the arrest was a “case of high handedness”. As of now, Chaudhary has been admitted to Jawahar Hospital, Jaipur, due to restlessness, and his bail plea had been rejected.
Over the years, many top bank officials have been arrested, some of which have been proven to be guilty. Here’s a lookback:
Sushil Muhnot, former chairman of Bank of Maharashtra, along with six persons, including Ravindra Marathe, who was the managing director and chief executive officer of the bank at the time, had been arrested in 2018 for allegedly misusing powers while extending loans to the fraud-accused DS Kulkarni group in violation of norms. Muhnot, in 2016, was abruptly removed as the chairman as he allegedly occupied two houses.
Rana Kapoor, founder of YES Bank and former CEO, was arrested last year in March over allegations of money laundering to the tune of Rs 4,300 crore. In the latest development, Kapoor has moved Bombay High Court challenging a special court’s order from August that had remanded him to police custody for a week.
Waryam Singh, former chairman of Punjab and Maharashtra Cooperative Bank, was arrested by the Economic Offences Wing of Mumbai Police last year, in connection with the alleged bank scam to the tune of Rs 4,355 crore. Joy Thomas, former managing director, was also held for his connection to the bank scam.
Sudhir Kumar Jain, former chairman and managing director of Syndicate Bank, was arrested in 2014 for an alleged bribery case of Rs 50 lakh. In 2018, Jain was dismissed from service.
5. Yogesh Aggarwal, IDBI Bank
Yogesh Aggarwal, former chairman and managing director of IDBI Bank, had been arrested in 2017 for having shown “undue favours” to the now-defunct Kingfisher Airlines, owned by Vijay Mallya.
Most global banks have signed Gfanz (the Glasgow Financial Alliance for Net Zero) at COP26 UN Climate Change Conference pledging to report annually on the carbon emissions linked to the projects they lend to.
Major signatories to the initiative, which aims to provide trillions of dollars in green finance, include Citi, Morgan Stanley and Bank of America. However, earlier efforts to promote green financing have not met with a serious response.
In 2019, the UN General Assembly exuberantly launched its principles of responsible banking (PRBs) where signatory banks agreed to work with their clients to encourage sustainable practices and to align their business strategy to the UN sustainable development goals and the Paris climate agreement.
Also, many of the biggest banks have not signed the PRBs, even though the principles have been the gold standard until now for committing to decarbonising lending.
Of the top ten banks (by market capitalisation), only Citi, Commercial Bank of China (ICBC), Bank of China and Agricultural Bank of China are signatories to PRBs. JPMorgan Chase, Bank of America, China Construction Bank, Wells Fargo, Morgan Stanley and China Merchants Bank are not on the list.
This is despite it being a limited commitment. Signatories have four years to comply with the principles, and signatories are not penalised or even named and shamed for failing to live up to the principles.
How banks fare
Among the major signatories to PRBs, Citi was the third-biggest fossil fuel lender in 2016-19 after the Paris Agreement and reached second place in 2020.
MUFG and ICBC, who are also signatories to the PRBs, both grew their fossil-fuel lending over the period. MUFG is also a Gfanz member, though neither ICBC nor any of the other Chinese banks are part of the new initiative.
Meanwhile, Wells Fargo and JP Morgan, which were not signatories to PRBs, reduced their total fossil fuels lending each year from 2018 to 2020, by 57% and 23% respectively.
Signatories to the PRBs are also supposed to carry out environmental-impact assessments and to measure the greenhouse gas emissions of projects. They are also supposed to ensure that loans go to projects that are carbon neutral. However, very little of this is happening on the ground at present.
While there is a need for a scheme that makes PRBs compulsory and binding, Gfanz does not tick the boxes. Under it, annual reporting requirements on carbon emissions are not mandatory either.
Experts say instead of forbidding lending to non-green projects now, loan books need to be treated as a portfolio of projects in different hues of green, with a defined trajectory towards greener – but it needs to be mandatory for signatories.
The brokerage firm has given a buy on Prism Johnson for gains of 17.30 percent considering the target price set at Rs. 160. The buy has been given for a period of 3 months, while its last closing price has been at Rs. 136.40 per share. Stop loss suggested for the trade is Rs. 121.
Prism Johnson Limited (Formerly Prism Cement Limited) is one of India’s leading integrated Building Materials Company, with a wide range of products including cement, ready-mixed concrete, tiles and bath products.
Technical observations:
1. Prism Johnson is in an intermediate uptrend as it has been making higher tops and higher bottoms for
the last several months.
After a period of consolidation, the stock broke out of its range on Monday owing to higher than average volumes.
2. Positive signals are being given out for the stock as the counter trades above the 20 day and 50 day SMA. Also weekly indicators like the 14-week RSI are in rising mode. This suggests of an upmove trend to sustain.
2. Dalmia Bharat: – Buy for potential upside of 22%
The company is bullish on the counter for up to 22 percent gains and has set a target price of Rs. 2600 to be realized in 3 months time frame. The stop loss recommended is Rs. 1950.
Dalmia Bharat is into cement business since the year 1939 and has a capacity of 3 3Mnt. The company is a pioneer in super speciality cement that is used by oil wells, railway sleepers and Air Strips.
Technical observations:
The stock has been seeing immediate uptrend and has been hitting higher tops and higher bottoms since last few months.
After hitting the intermediate lows of Rs. 1842 levels, the stock has been gaining ground and reversed its recent downtrend.
” Technical indicators are giving positive signals as the stock is trading above the 20 day and 50 day
SMA. Daily momentum indicators like the 14-day RSI have bounced back from oversold levels and are
in rising mode now. This augurs well for the uptrend to continue”, says HDFC securities report.
Disclaimer:
The above stocks are picked from the brokerage report of HDFC Securities. 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
Edelweiss Financial Services’ stake in the ARC is currently 60%, while CDPQ Private Equity Asia, part of Canada’s pension fund CDPQ, holds 20%.
Edelweiss Asset Reconstruction Company (EARC), currently India’s largest private asset reconstruction firm, is increasing its investment to acquire more stressed retail loans from banks and non-bank lenders. Sales of stressed loans from the retail segment are picking up with lenders looking to resolve the problem of growing non-performing assets (NPAs) on their retail loan books.
According to Edelweiss ARC MD & CEO RK Bansal, the company currently has around five lakh accounts under its retail portfolio and has already become the largest player in the retail ARC space. “Retail NPA sales are picking up and many banks and NBFCs are looking to resolve the retail NPAs,” Bansal told FE.
“Banks’ wholesale loan books have already seen huge NPAs and they are now in resolution mode for these stressed assets. New NPAs in wholesale are less. We are seeing a higher level of NPAs now in retail, whether it is housing loans, loans against property, MSME loans or unsecured loans like personal loans and credit cards,” he said.
For the quarter ended September, EARC’s assets under management (AUM) stood at Rs 42,800 crore against Rs 42,400 crore in the same period a year ago. At the end of the second quarter this fiscal, capital employed for wholesale assets was at Rs 5,000 crore compared to Rs 5,200 crore for the corresponding period last fiscal. Notably, capital employed for retail assets rose to Rs 500 crore from Rs 100 crore a year ago.
“We feel that retail will grow much faster, at least for the next two-three years till the wholesale cycle comes back. Because as of now, banks have not lent much in wholesale on the corporate side for the last two-three years. The lending has been less because banks have been struggling with NPAs. So once the lending picks up, capex cycle will pick up. The cycle will take about two-three years more for fresh NPAs on the corporate side,” Bansal said.
Edelweiss ARC started its retail bad loans management operations around three years ago. “Currently, the AUM for our retail portfolio is around Rs 2,000 crore. Slowly, AUM for retail will grow. Retail AUM does not grow that fast because retail loans are very small and repayment is much faster than wholesale. So AUM keeps on coming down faster in retail,” he said.
Asked whether the National Asset Reconstruction Company (NARCL), the so-called bad bank, will reduce the growth opportunity for existing ARCs, Bansal said, “The answer is no. Because anyway these cases (transfer of toxic assets by banks) were not such where ARCs were interested. Because these cases are under the 15:85 structure, while in the case of private sector ARCs typically banks are not selling nowadays under 15:85. They are selling it to government ARCs, because they also know that nobody will pay them cash for these assets.”
NARCL is expected to witness the transfer of the first batch of toxic assets worth about Rs 90,000 crore by January 2022.
For the second quarter this fiscal, Edelweiss ARC’s gross revenue grew 7.4% year-on-year to Rs 231 crore, while profit after tax soared by 52.25% y-o-y to Rs 70 crore. The company witnessed robust recoveries of around Rs 740 crore from the wholesale portfolio and around Rs 160 crore from the retail portfolio.
Edelweiss Financial Services’ stake in the ARC is currently 60%, while CDPQ Private Equity Asia, part of Canada’s pension fund CDPQ, holds 20%.
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