Reserve Bank of India – Press Releases
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Author: root
Reserve Bank of India – Tenders
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SCHEDULE OF TENDER (SOT)
Note: The firms shall pay the mandated transaction fee to MSTC payment gateway in favour of MSTC LIMITED |
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Sebi proposes new norms for MFs’ ESG investments, BFSI News, ET BFSI
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Mumbai: The Securities and Exchange Board of India (Sebi) has proposed to revise the investment norms for mutual fund schemes that invest as per the ESG (Environment, Sustainability and Governance) philosophy.
The markets regulator has proposed that from October 1, 2022, asset management companies should only invest in securities with Business Responsibility and Sustainability Report (BRSR) disclosures.
The existing investments in the schemes for which there are no BRSR disclosures would be grandfathered by Sebi until September 30, 2023. In ESG investing, a fund manager picks companies whose operations are considered socially responsible.
Schemes, which invest in overseas securities, could choose any global equivalent of the BRSR specified by the Association of Mutual Funds in India (AMFI), Sebi said in a discussion paper on Tuesday.
Currently, these schemes fall under the thematic sub-category. A minimum of 80% of the total assets of the scheme are mandated to be invested in securities following the ESG theme. Hence, these guidelines would apply only to the portion of investment towards the ESG theme, Sebi said.
Asset management companies should endeavour to have a higher proportion of the assets under the ESG theme and make suitable disclosures, said Sebi said.
Globally, the concept of ESG investments is gaining popularity but there are no universalorms and standards.
Standard-setting bodies like IOSCO (International Organization of Securities Commissions) and FSB (Financial Stability Board) are working towards standardised disclosures for ESG funds.
“While such standards are yet to emerge, in the meanwhile, there is a need to introduce disclosure norms for domestic ESG Mutual Fund schemes considering the increased activity in this area,” Sebi said. “It is understood that these disclosure norms would further evolve and undergo changes based on learnings and experience, both on the domestic and international front.”
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PNB net up 78 per cent in Q2
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Punjab National Bank (PNB), the country’s second-largest public sector bank, on Wednesday, reported a 78 per cent increase in standalone net profit for the quarter ended September 30 at ₹ 1105 crore as compared to net profit of ₹ 621 crore in same quarter last fiscal.
The public sector bank had registered a net profit of ₹ 1024 crore in the previous quarter ended June 30 this year.
The bottomline for the quarter under review was bolstered by a tax provision write-back of ₹ 345 crore.
For the six months ended September 30, PNB’s standalone net profit grew 129 per cent to ₹ 2129 crore ( ₹ 929 crore). This half-yearly bottomline performance was higher than the entire fiscal 2020-21 net profit of ₹ 2022 crore.
Total income for the second quarter ended September 30 this fiscal stood at ₹ 21,262 crore, lower than the total income of ₹23,280 crore in the same quarter last year.
The provision towards non performing assets saw a substantial reduction for the quarter under review at ₹ 2,693 crore against ₹ 3,811 crore in the same quarter last fiscal year.
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Poonawalla Fincorp: Consolidated PBT up 151% YoY
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The board of Poonawalla Fincorp Limited (PFL) today announced its unaudited results for the quarter ended September 30, 2021 (Q2FY22).
PFL reported that assets under management grew by ~6 per cent QoQ to ₹15,275 crore, while NIM increased by 104 bps YoY to 9.1 per cent in Q2 of this fiscal (eight per cent in Q2 of FY21), driven largely by a reduction in interest expenses.
“Consolidated PBT was up 151 per cent YoY, increasing from ₹50 crore in Q2FY21 to ₹126 crore in Q2FY22, driven largely by a reduction in interest expenses and credit costs. Collections showed an improving trend from 93.1 per cent in June 21 to 98 per cent in July 21 and further to 99.9 per cent in September 21.
Consequent to improvement in collections in Q2of FY22, gross stage 3 and net stage 3 assets decreased from 5.4 per cent and 2.7 per cent, respectively, as at June 21 to 4.1 per cent and 2.0 per cent, respectively as at September 21 on a consolidated basis. The company has one of the best provision coverage ratios across all three stages. The standard asset coverage ratio as at September 21 stands at 3.4 per cent (3.0 per cent in September 20); Stage 3 asset coverage ratio stands at 52 per cent (38 per cent in September 20).
Liquidity and cost of borrowings
The company continues to maintain a strong liquidity position with around ₹1,700 crore of surplus liquidity, with additional term loan sanctions in the hand of ₹1,750 crore. A significant amount of existing loans were repriced in Q2FY22, with a reduction of over 120 bps. New sanctions received at sub-6.5 per cent. The company’s long-term rating was upgraded by two notches to ‘AA+; Stable’ by Care Ratings following its review process. The short-term rating was retained at the highest level of ‘A1+’.
Revised product focus
Pursuant to the capital infusion and rebranding, the Company launched new products like Personal loans, Loans to Professionals, and SME LAP. Other products at an advanced stage of roll-out are medical equipment loans, small ticket LAP, and co-lending/fintech partnerships.
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Gold in RBI’s forex reserves rise 11% to 744 tonnes
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The Reserve Bank of India’s holding of gold in foreign exchange reserves went up about 11 per cent year-on-year (y-o-y) to 743.84 metric tonnes as on September-end 2021 against 668.25 metric tonnes as on September-end 2020.
However, in value terms, the share of gold in the reserves declined to about 5.88 per cent against about 6.69 per cent in the year-ago period, as per the RBI’s half yearly report – Management of Foreign Exchange Reserves: April-September 2021.
Compared to September-end 2020 share of gold in the reserves (in value terms) at 5.87 per cent, the share rose marginally as on September-end 2021.
While 451.54 metric tonnes (366.91 metric tonnes as on September-end 2020) of gold is held overseas in safe custody with the Bank of England and the Bank for International Settlements (BIS), 292.30 metric tonnes (unchanged) of gold is held domestically.
Import cover
According to the report, at the end of June 2021, the foreign exchange reserves cover of imports decreased to 15.8 months from 17.4 months at March-end 2021. At the end of June 2020, the foreign exchange reserves cover of imports stood at 14.8 months.
The ratio of short-term debt (original maturity) to reserves, which was 17.5 per cent at end-March 2021, declined to 16.8 per cent at June-end 2021. This ratio stood at 20.8 per cent at June-end 2020.
The ratio of volatile capital flows (including cumulative foreign portfolio inflows and outstanding short-term debt) to reserves declined from 69 per cent at March-end 2021 to 65.5 per cent at June-end 2021. This ratio stood at 72.1 per cent at June-end 2020.
As on September-end 2021, of the total foreign currency assets (FCA) – comprising multi-currency assets that are held in multi-asset portfolios – of $573.60 billion ($502.16 billion as on September-end 2020), $383.74 billion ($370.59 billion) was invested in securities, $147.86 billion ($124.16 billion) was deposited with other central banks and the BIS and the balance $42 billion ($7.44 billion) comprised deposits with commercial banks overseas.
During the half-year period under review, reserves increased from $576.98 billion as on March-end 2021 to $635.36 billion as on September-end 2021.
On a balance of payments basis (that is excluding valuation effects), foreign exchange reserves increased by $31.9 billion during April-June 2021 as compared with $19.8 billion during April-June 2020.
Foreign exchange reserves in nominal terms (including valuation effects) increased by $34.1 billion during April-June 2021 as compared with $27.9 billion in the corresponding period of 2020-21.
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ADB, India sign USD 100 million loan for agribusiness development in Maharashtra, BFSI News, ET BFSI
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The Asian Development Bank (ADB) and the Government of India on Wednesday signed a USD 100 million loan to promote the agribusiness network to boost farm incomes and reduce food losses in the state of Maharashtra.
Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs in the Ministry of Finance signed for the Government of India, the agreement for the Maharashtra Agribusiness Network (MAGNET) Project, while Takeo Konishi, Country Director of ADB’s India Resident Mission signed for ADB.
After the signing of the loan agreement, Mishra stated that the project supports agribusiness development in Maharashtra with holistic support to on-farm improvement in productivity, up-gradation of post-harvest facilities and establishing efficient marketing structures to benefit horticulture producers.
“The project will help small and marginal farmers in Maharashtra improve their post-harvest and marketing capacity, reduce food losses, and increase incomes through access to finance, capacity building, and horticulture value chain infrastructure development,” said Konishi.
“The project interventions also align with ADB’s ongoing support to rural sector transformation in the state through mutually complementary projects for improving irrigation efficiency through rural electrification and for enhancing rural connectivity,” he added.
Though Maharashtra produces 11 per cent and 6 per cent of India’s fruit and vegetable production, respectively, and accounts for about 8 per cent of the country’s floriculture exports, most smallholder farmers lack the capital to scale up and do not have direct access to emerging high-value markets. The ADB loan will help provide financing opportunities for farmer producer organizations (FPOs) and value chain operators (VCOs) through matching grants and financial intermediation loans to support 300 subprojects.
The project will upgrade 16 existing post-harvest facilities and construct three new ones to provide individual farmers and FPOs clean, accessible, and sustainable crop storage and processing facilities. It will also build the capacity of FPOs and VCOs on value chain acceleration and post-harvest handling and management, especially those owned and led by women. The project is expected to benefit 200,000 farmers.
ADB will provide a $500,000 technical assistance (TA) grant from its Technical Assistance Special Fund and USD 2 million from the Japan Fund for Poverty Reduction on a grant basis to improve market linkages for FPOs. The TA will establish crop-based centers of excellence networks, promote innovative technologies in agribusiness and agriculture value chains, and support capacity building, including the asset and financial management capabilities of the MAGNET Society and the Maharashtra State Agriculture Marketing Board.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members–49 from the region. (ANI)
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IOB stays on strong profit curve
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Public sector lender Indian Overseas Bank (IOB), which came out of RBI’s PCA framework last month, continues to maintain its profitable growth curve and is working out mid-term plans for branch-cum-manpower expansion
“Since the bank is now allowed to resume its expansion activities, IOB is likely to hire 100 officers and 70 clerks. We are redrawing our manpower policy based on the digitalisation policy. The bank may open 30-40 new branches next fiscal even as we would continue with branch rationalisation exercise. We will come out with our mid-term plan soon,” said Partha Pratim Sengupta, MD & CEO of the bank.
Doubled net profit
Meanwhile, the bank more than doubled its net profit to ₹376 crore for the quarter ended September 30 against ₹148 crore in the same period a year ago, helped by lower provisions.
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The bank’s operating profit grew 5 per cent to ₹1,419 crore against ₹1,346 crore on account of reduction in interest expenditure and higher non-interest income.
Falling interest income
Total income stood at ₹5,376 crore against to ₹5,431 crore. Interest income fell to ₹4,254 crore from ₹4,363 crore while non-interest income was higher at ₹1,121 crore (₹1,068 crore). Net interest margin was lower at 2.43 per cent (2.57 per cent).
“The industry has become more competitive. Almost all bigger banks have reduced their interest rates. So, in this competitive scenario, we need to match the same level. However, our strategy will now be to boost other income to make up for the above,” said Sengupta.
Lower provisions
Total provisions were lower at ₹1,036 crore (₹1,193 crore). Slippages were at about ₹1,400 crore, of which three accounts — including an NBFC — contributed 60–70 per cent.
Also see: Cash is still ‘King’ as digital divide between Bharat and India continues
“These three accounts were known to us and booked as NPA two quarters ago. But, because of the stay in the Court none of the banks could do it. The stay was vacated during the September quarter and we have booked it as NPA. It will not impact the balance sheet as we started doing the provisions right from the day, we identified the stress. As on date, we have provided almost 80 per cent for that account,” he added.
Lower NPA ratios
Gross NPA ratio fell to 10.66 per cent from 13.04 per cent in the same quarter a year ago and 11.48 in the preceding quarter. Net NPA ratio stood at 2.77 per cent, down from 4.30 per cent in Q2FY21 and 3.15 per cent in Q1FY22. Its provision coverage ratio improved to 92 per cent from 91.56 per cent in the preceding quarter.
Deposits increased to ₹250,890 crore in Q2FY22 against ₹242,941 crore in the year-ago quarter while gross advances stood at ₹1,46,940 crore (₹1,35,469 crore).
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Indians paid Rs 9,700 crore in hidden forex fees, BFSI News, ET BFSI
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Indians paid nearly Rs 9,700 crore in the form of fees hidden in inflated exchange rates while making remittances in 2020. This is more than a third (36%) of the total fees of Rs 26,300 crore that Indians paid for sending money across their country’s borders.
The fees reflect a lack of transparency and high charges applied by banks on remittances. Banks have been reducing the fees on foreign remittances and their income under this head fell from Rs 15,017 crore in 2016 to Rs 12,142 crore in 2019. However, they have protected themselves by recovering Rs 4,422 crore through exchange mark-up in 2020, which was up from Rs 2,505 crore in 2016.
These figures were from independent research carried out by Capital Economics in August 2021, which aimed to estimate the scale of foreign exchange transaction fees in India. The study was released by Wise, the technology company that was founded with the objective of reducing cross-border remittance costs.
Overseas workers sending money into India are also losing money. Over the past five years, money lost to exchange rate margins on inward remittances has grown from Rs 4,200 crore to Rs 7,900 crore. Meanwhile, fees paid to transaction costs have grown from Rs 10,200 crore in 2016 to Rs 14,000 crore in 2020.
“A significant portion of these fees paid on remittances to India come from people in Gulf countries where most are employed in blue-collared jobs to support their families back home in India,” a statement issued by Wise said. Of the share of total fees paid on inward remittances to India in 2020, Saudi Arabia ranked first at 24%, followed by the US (18%), the UK (15%), Qatar (8%), Canada (6%), Oman (5%), UAE (5%), Kuwait (5%), and Australia (4%).
“While technology and internet have eased some of the issues related to the convenience and speed of foreign funds transfers, the age-old practice of hiding fees in the exchange rate results in people spending too much on hidden foreign currency fees — money which should rightfully stay in their pockets,” said Wise India country manager Rashmi Satpute. Indian consumers spending abroad paid Rs 1,441 crore as transactions fees, of which Rs 1,303 crore was hidden charges in the form of exchange mark-up.
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Wipro bags tech transformation engagement from Kerala State Co-op Bank, BFSI News, ET BFSI
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New Delhi, Oct 27 (PTI) IT firm Wipro on Wednesday said it has secured a multi-year contract from Kerala State Co-operative Bank (also known as Kerala Bank). Kerala Bank currently runs 15 different core banking environments with five core banking solutions.
“As part of this multi-million-dollar strategic engagement, Wipro will implement a consolidated, common core banking system for the bank, provide over 20 allied solutions, aimed at streamlining technology adoption and enabling a superior customer experience,” a statement said.
Wipro will also set up a Data Centre, Disaster Recovery Centre, Near DR (Disaster Recovery) and command centre, implement the latest Reserve Bank of India cybersecurity frameworks, and provide facility management services for five years, it added.
“We see IT modernisation as the key driver for achieving business transformation and growth. An integrated IT landscape comprising of best-in-class Core Banking and allied solutions will not only enable seamless information flow but will also help achieve high performance and scalability in our operations,” Rajesh AR, GM (IT and Digital Banking) at Kerala Bank, said.
Wipro is currently engaged with over 100 DCCBs across 12 states in India. Wipro has consolidated its position across all Banking segments in India, including Schedule Commercial Banks, Regional Rural Banks, Co-operative Banks and the latest Small Finance and Payment Banks.
“Wipro has been engaged with Kerala Bank and is providing core banking services to multiple District Co-operative Central Banks (DCCB) for many years. This extensive experience uniquely positions us to deliver this complex programme, which redefines customer experience while ensuring security for clients of Kerala Bank,” Wipro Head – BFSI India (SRE) Sanjay Jaireth said.
In a separate statement, Wipro said it is partnering with Micro Focus to launch the Legacy Migration and Modernisation Lab, collaborating with Amazon Web Services (AWS).
This lab, hosted at Wipro’s AWS Launchpad in Parramatta, Australia, will allow companies in Australia and New Zealand to experience a hands-on demonstration of tools and accelerators that can help optimise mainframe application capabilities for the cloud, it added.
The lab combines the strengths and technical expertise of Wipro, Micro Focus, and AWS to help customers become agile, reduce operational costs and mitigate application-modernisation risks to enable a cloud-ready IT ecosystem, the statement said.
These advanced capabilities will also help companies innovate faster and drive better business results, it added.
In addition, the lab will serve as a training ground for testing mainframe app-modernisation scenarios, allowing businesses to conduct training, and demonstrate proof of concepts in real-time. PTI SR BAL BAL
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