Guwahati, Union Minister of State for Finance Bhagwat Kishanrao Karad on Wednesday said 57 new bank branches will be set up in Assam by March next year to bring more people under the ambit of banking. At an event to launch a ‘credit outreach programme’ here, Karad said the central government is taking all possible steps to expedite the economic development of the Northeastern region.
“By March 31, 2022, we will have 57 new branches of various banks. This step has been taken as Assam has less number of branches against its population as per the standard norm and people are facing difficulties because of this,” he added.
Considering the problems of the people, Prime Minister Narendra Modi has taken various initiatives to accelerate the economic growth of the northeast and Jammu and Kashmir, he said.
Karad said, “I have come to visit Assam, Manipur, and Tripura to assess the economic issues faced by the common man. We will try to solve the problems of these states.”
He expressed happiness over Assam achieving satisfactory results in implementing various financial schemes such as Mudra Loan and Kishan Credit Card among others.
“The state’s economic growth is directly related to financial literacy. If people are literate about financial aspects, only then overall economic growth will be achieved,” Karad said. PTI TR
The Mumbai-bench of the National Company Law Tribunal (NCLT) on Wednesday allowed Dish TV time till November 15 to file its response in a petition filed by Yes Bank, the company’s largest shareholder.
Yes Bank had sought NCLT’s direction to the company’s board to call for an extraordinary general meeting (EGM) of the shareholders to vote on removal of MD & CEO Jawahar Goel and four other directors.
In May last year, Yes Bank invoked promoters’ pledged shares in Dish TV to own 25.63% stake in the DTH company.
On September 3rd, the bank sent a requisition notice to the company’s board to convene a special meeting of the shareholders to reconstitute the board and sought the removal of Goel from the company and induction of seven new directors.
Chandra’s Zee Entertainment Enterprises is currently fighting a similar takeover battle in the NCLT and the Bombay high court against its largest shareholder Invesco.
Meanwhile, after Dish TV board declined the requisition for EGM, Yes Bank moved to the tribunal seeking a special shareholders meeting.
Appearing for Dish TV, senior counsel Navroz Seervai sought time to file the reply in the matter, stating that the company wanted to respond on “merit, jurisdiction and maintainability”.
Referring to the Bombay high court order in the ZEE Vs Invesco matter, he said, “Yesterday, in a similar matter the Bombay High Court has passed an order. We also want to put that on record. The order clarified that NCLT has no jurisdiction to entertain this kind of plea.”
The bench, headed by Suchitra Kanuparthi and Anuradha Bhatia allowed Dish TV time till November 15 to file its response in the matter and has posted the case for further hearing to November 23.
Senior counsels Darius Khambata and JP Sen, representing Yes Bank in the case, also sought time to file their rejoinder to the Dish TV reply.
The tribunal also allowed the lender to file a response to Dish TV’s reply before the next date of hearing.
The private lender has sought tribunal’s intervention to direct the company to either provide shareholder details – so it can call the meeting on its own – or instruct it to set a date for an EGM.
“Owing to YBL (Yes Bank) being a banking company and its shareholding in the Company (Dish TV) being a consequence of invocation of pledges, there are certain embargos under the provisions of the Banking Regulation Act, 1949 read with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, because of which the said resolutions cannot be placed before the shareholders,” said Dish TV in its exchange filing on October 13, at the time of rejecting the requisition request of the bank.
ET, in its September 24 report stated that the dispute between Goel and Yes Bank over corporate governance and fund-raising plans was escalating and was reaching the courts.
The bank wants to dissolve the entire board and removal of the promoter family, as it believes that the board is functioning in cahoots with the minority shareholders (that is the promoters), who should not have representation on the board.
Dish TV, which has been trying to raise funds since some time, had decided to go ahead with a Rs 1,000 crore rights issue to be able to invest for acquiring new customers, in set-top-boxes (STBs) and on marketing and promotions.
Indian Overseas Bank (IOB), which recently came out of the prompt corrective action (PCA) by the RBI, says it will chalk out strategies to accelerate growth. Partha Pratim Sengupta, MD & CEO, says since some earlier curbs have been done away with, the bank will be looking at expanding branches or restructuring some of them. Excerpts from his virtual interaction with the media:
What are the bank’s plans post exiting the PCA?
After being in PCA for almost six years, we are now looking for a fresh start to grow more in the coming quarters and definitely the bank would be much stronger in future. Since the restrictions on branch opening, recruitment of human resources and CSR activities have been removed, we will look at taking actions on those fronts. There has been no recruitment in the past six years, and the bank’s staff strength came down to around 22,000 from 28,000. In a couple of months, we will be revamping our branch expansion and recruitment policies.
What were the factors that contributed to the good performance in the second quarter?
It has been an overall growth, I won’t say a particular segment has given growth. It has been equitably distributed among retail, agri, MSME and corporate segments. If you look at the performances of the past quarters, we have been steadily growing. Due to the Covid-19 impact, the economic growth of the country got muted and hence there was no scope for credit growth on the bank side. But post the vaccination drive, we are seeing positive outlook on the economic front. Your net interest margin (NIM) declined during this quarter.
NIM, on a q-o-q basis has gone up, but yes, on a y-o-y basis, it has declined to 2.43% from 2.57. In the June quarter, our NIM was at 2.34%. If you look at the interest rates, almost all the bigger banks have reduced the interest rates.
What were the slippages during the second quarter? Any plans to raise capital?
We had a slippage of Rs 1,400 crore, contributed by two to three companies. Out of it, 60 to 70% was borne out of an NBFC. The bank had made around 80% provisions on these accounts. The bank is not anticipating any major slippages in the coming quarters, whatever slippages had happened were from the watch list. On the capital front, the bank would be raising up to Rs 1,000 crore during Q4 to meet tier-II capital norms.
Banks and card networks have received nearly two million auto-debit mandates after the Reserve Bank of India (RBI) made it mandatory from October 1 to take prior consent of a customer before debiting their accounts.
Most of the recurring payments are linked to credit cards, while such a facility is not available in most places for debit cards.
In August, total credit card transactions stood at 19 million, and debit card transactions at 358.5 million. In value terms, credit cards were at Rs 77,732.94 crore and debit cards at Rs 64,351.52 crore.
The readiness
State Bank of India, Axis Bank, HDFC Bank, Yes Bank, American Express, Bank of India, Bank of Baroda, ICICI Bank, HSBC, RBL Bank, IndusInd Bank and Kotak Mahindra Bank have implemented the recurring payment framework for their customers.
Service providers such as Razorpay, Billdesk, PayU have come up with solutions to help card issuers, customers, and merchants to register their mandates on their customised platforms. BillDesk has set up SI Hub, PayU has created Zion while Razorpay has set up MandateHQ.
RBI’s auto-debit rule
Under the new auto-debit rules that kicked in on October 1, there are no automatic recurring payments for services like recharge, utility bill as the additional factor of authentication (AFA) has now become mandatory.
To ensure safety and security of card transactions, the central bank had, in December last year, directed all banks that processing of recurring transactions (domestic or cross-border) using cards or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) under arrangements/practices not compliant with AFA would not be continued beyond March 31, 2021.
However, non-readiness of some of the players had forced the RBI to extend the deadline on recurring payment till September 30. The rule is applicable to all types of recurring payments like utility bills, phone recharge, DTH and OTT, among others.
As per the guidelines, banks will send a one-time password (OTP) to customers for payments above Rs 5,000.
Provisions were down 13% YoY to Rs 1,703 crore. The management attributed the jump in profit to NII and fee growth.
IndusInd Bank’s net profit rose 72% year on year (YoY) to Rs 1,113.53 crore in the September quarter on the back of higher income and lower provisions.
The bank’s net interest income (NII) increased 11.6% YoY to Rs 3,658 crore, other income was up 18% to Rs 1,837 crore and the net interest margin (NIM) rose one basis point (bps) sequentially to 4.07%. Provisions were down 13% YoY to Rs 1,703 crore. The management attributed the jump in profit to NII and fee growth.
Managing director and CEO Sumant Kathpalia said Q2 witnessed an acceleration in growth momentum. “The strong disbursements in the retail segment, coupled with reinvigorated corporate franchise, provides us comfort on continued loan growth and NII acceleration. The pre-provision operating margins have grown and if you look at our fee, we have grown across all fee vectors,” he said.
The advances book rose 9.72% on a y-o-y basis to Rs 2.21 lakh crore as on September 30, 2021, and total deposits rose 21% YoY to Rs 2.75 lakh crore. Current account savings account (CASA) deposits comprised 42% of total deposits as on September 30, 2021, up from 40% a year ago.
Restructured advances constituted 3.6% of the bank’s loan book. “If you look at our conservative simulation of credit costs from the restructured pool, I think we are well provided to take care of any provisions which will come from the restructured book,” Kathpalia said.
Slippages were to the tune of Rs 2,658 crore in Q2FY22, down from Rs 2,762 crore in the previous quarter. The bank made recoveries worth Rs 1,024 crore and upgrades worth Rs 1,141 crore during the quarter. Gross non-performing assets (GNPAs) stood at 2.77% of advances as on September 30, 2021, down from 2.88% as on June 30, 2021. The net NPA ratio stood at 0.8% as on September 30, 2021, down from 0.84% on June 30, 2021.
IndusInd Bank’s shares closed at Rs 1,141.85 on Wednesday on the BSE, down 1.11% from their previous close. The results were declared after the close of trade.
The regulator has been saying that you should have just one QR code which is interoperable.
Fino Payments Bank will take a call on converting to a small finance bank once it completes five years of operations next year, MD & CEO Rishi Gupta tells Shritama Bose. The bank will retain its focus on the middle 50% of India’s population, offering assisted digital services with a physical presence, he added.Edited excerpts:
Competition has intensified in recent years in the payments space. What is going to make you stand out?
We look at India in a very different way. One solution for everybody will not work. There have to be multiple players, unlike in Western countries. The internet giants, banks, fintechs and big payment companies are focusing on the top 25% of the population, who are on smartphones, have bank accounts with money in them, and are digitised. The next 50% of the population, which is emerging India, comprises people who need a different kind of solution.
They have money, but maybe not in the bank account. They may be earning and spending in cash. Some of them may have smartphones, but they are not comfortable using them for banking transactions. Others may not have smartphones at all. These are the people we are focusing on, with incomes between `2 and 6 lakh. There we have phygital solutions, marrying physical with assisted digital to make it a digital journey for the customer over the next 10 years.
There’s fierce competition for QRs at storefronts. Do you see it coming down to a few players eventually?
The regulator has been saying that you should have just one QR code which is interoperable. That battle for having your QR code versus someone else’s will continue for some time till it moves to a customer-acquiring model rather than a merchant-acquiring model. At least in the bigger cities, the QR penetration is already quite high. In rural areas, it’s not QR codes (that matter), but the ability of a person to pay on a mobile phone and to scan and pay digitally. For that, they need to have money in their bank accounts and they must be able to make that transaction digitally. That won’t be an overnight journey. Being the first-mover with a presence on the ground and providing both the physical and digital legs of the service, we have an edge over the others.
Payments businesses in India eventually turn to credit. Do you intend to turn into an SFB?
So, two things — one is that it’s important to focus on the core business. Our core business is quite robust and sustainable as of now. The cream on the cake is coming from cross-sell and other businesses. We are already offering credit through partnerships with NBFCs and banks. Having said that, the option of converting into an SFB is there with us after we complete five years, which is the middle of next year. At that point, we will take a view on whether to go into credit products or to add more partners on the credit side. There’s too much money chasing a few merchants and customers. We want to be a little more cautious on that side.
What is your revenue mix like? Would you like to change it?
Of our revenues, 30%-odd is remittances. Another 30-35% is the cash withdrawal product, which is micro ATM and AePS (Aadhaar enabled payment system). BC (business correspondent) banking is about 20%. About 8% is current account savings account (CASA) and 4% is the CMS (cash management service) business.
The mix will change marginally because we are entering new products, especially on the cross-sell. They will not significantly change the revenue mix, but the profitability mix will definitely change. On the topline, our CASA offering and our CMS offering will become sizeable, and maybe double, over the next few years.
MDR on UPI and RuPay are gone. With the proliferation of players, is the compensation in the payments market tilting downwards?
Zero-MDR on UPI and RuPay are government decisions. As a business entity, we would obviously like to recover that cost upfront. Specific to our own business in AePS and micro ATMs, the charge (per transaction) has not gone up, unlike in the ATM business. Representations have been made to change that. Remittances anyway is a very affordable product, as compared to the other options with the customer, with a less than 1% fee. In our business since there are multiple angles involved — being a third party, having cash digitisation, cash storage and other costs, I don’t see the transaction remuneration going down for us. It is holding up and, in fact, for some, it has also gone up. We increased our charges for savings accounts from Rs 399 to Rs 449, but we didn’t see a major impact of that on customer on-boarding.
The bank has made required provisioning in advances in specific accounts so as to improve net NPA.
Indian Overseas Bank (IOB) on Wednesday reported a 154% jump in its net profit to Rs 376 crore for the second quarter, compared with Rs 148 crore in the corresponding quarter of the previous fiscal. The bank, which has just exited the prompt corrective action framework, has attributed the good set of numbers to strong performance in all relevant parameters.
Partha Pratim Sengupta, MD & CEO, said there has been a marked reduction in bad assets. Net NPA stood at 2.77% which was within the prescribed RBI guidelines, while gross NPA reduced by Rs 286 crore. The gross NPA ratios improved to 10.66% from 13.64% QoQ. The provision coverage ratio improved to 92%, against 91.56% in the previous quarter. The bank has made required provisioning in advances in specific accounts so as to improve net NPA.
Sengupta said the bank had total cash recovery of Rs 831.77 crore which includes recovery from tech write off of Rs 428.61 crore, against Rs 751.97 crore (including recovery from tech write off of Rs 233.74 crore) in June 2021.
The CASA improved to 42.57% , against 40.26% in the same period last year. Total CASA increased from Rs 92,436 crore to Rs 1, 06,806 crore while savings bank registered a 11.48% Y-o-Y growth.
Interest income stood at Rs 4, 254 crore for the quarter, against Rs 4,363 crore. The bank recorded a lower net interest margin (NIM) of 2.43% as against 2.57% in the corresponding quarter of the last fiscal.
Total business stood at Rs 4,90.408 crore, compared with Rs 4,78,365 crore in the year-ago period. Total deposits stood at Rs 2,50,890 crore, against Rs 2,42,941 crore as on June 30, 2021.
Gross advances stood at Rs 1,46,940 crore during the latest quarter, compared with Rs 1,38,944 crore as on June 30, 2021. The bank increased its exposure to the retail and agri sectors and rebalanced advances by consciously reducing the stressed sector in the corporate segment.
When it comes to your personal finances, the first step is opening a savings account for your short-term needs and to meet your regular expenses. The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures your deposits up to Rs. 5 lakh, so it’s a safe bet to put your money in a savings account. You’ll also get enticing perks like cashback or reward points on your ATM or debit card transactions, good interest rates for keeping a monthly average balance with a sweep in, passbook, net banking, and cheque book options, and more.
Savings account interest rates are low when compared to fixed deposit interest rates, but some banks can offer higher savings account interest rates than fixed deposit interest rates. Despite leading banks such as HDFC, State Bank of India (SBI), Axis Bank, ICICI Bank, and others promise savings account interest rates from 2.75 percent to 3.50 percent, certain small finance banks may provide savings account interest rates as high as 7%, which is something that you can’t ignore. As a result, here are our selected top 5 small finance banks that are now offering an interest rate of up to 7% on savings accounts including deposit safety of DICGC.
Ujjivan Small Finance Bank
Ujjivan Small Finance Bank is currently giving the highest interest rate of 7% on domestic deposits with balances ranging from Rs1 lakh to Rs 25 lakhs. From March 6, 2021, the bank is promising the following interest rates on savings accounts.
Amount
Interest Rate (p.a.)
Up to 1 lakh
4.00%
> 1 Lakh to 25 Lakhs
7.00%
> 25 lakhs to 10 Crores
6.00%
> 10 crores
6.75%
Source: Bank Website
Equitas Small Finance Bank
Equitas Small Finance Bank provides a 7% interest rate on a daily closing balance of over Rs 1 lakh and up to Rs 1 crore, with a minimum average monthly balance of Rs 10,000 and no maintenance charges. The following savings account interest rates are effective as of August 16, 2021.
Daily Closing Balance
Rate Slab
Up to Rs 1 lakh
3.50%
Above Rs 1 lakh and upto Rs 1 cr
7.00%
Above Rs 1 cr
6.00%
Source: Bank Website
Utkarsh Small Finance Bank
Utkarsh Small Finance Bank provides a 7% interest rate on an incremental balance of above Rs 25 lakh up to Rs 10 crores, as well as free unlimited domestic transactions at any ATM and free NEFT/RTGS transactions. From October 1, 2021, the following rates of interest are in force.
Balance In Rs
Rate of Interest w.e.f October 1, 2021
Balance Upto 1 Lakh
3.75% p.a.
Incremental balance above 1 Lakh upto 25 Lakh
6.00% p.a.
Incremental Balance above 25 Lakh upto 10 Crores
7.00% p.a.
Incremental Balance above 10 Crores
6.75% p.a.
Source: Bank Website
AU Small Finance Bank
AU Small Finance Bank is promising a 7% interest rate on Domestic / NRE / NRO Savings Account balances of Rs 25 Lacs to Rs 1 Crore. The following are the current applicable interest rates on savings bank deposits as of October 5, 2021.
Savings Account Incremental Amount slab
Rate of Interest Applicable (per annum)
Balances less than INR 1 Lac
3.50%
Balances from INR 1 Lac to less than INR 10 Lacs
5.00%
Balances from INR 10 Lacs to less than INR 25 Lacs
6.00%
Balances from INR 25 Lacs to less than INR 1 Crore
7.00%
Balances from INR 1 Crore to less than INR 10 Crores
6.00%
Source: Bank Website
Fincare Small Finance Bank
This small finance bank is also offering an interest rate of up to 7% on savings account balances ranging from Rs 1 lakh to Rs 50 Cr or above. With effect from 1st July 2021, Fincare Small Finance Bank is promising the following rates on savings accounts.
Savings Account Slab In Rs
Interest Rates In % (p.a.)
Up to and including Rs 1 lakh
4.50%
Above 1 lakh & including 5 lakh
6.00%
Above 5 lakh & including 1 Cr
7.00%
Above 1 Cr & including 2 Cr
6.00%
Above 2 Cr & including 5 Cr
5.75%
Above 5 Cr & including 15 Cr
4.50%
Above 15 Cr & including 20 Cr
4.00%
Above 20 Cr & including 30 Cr
3.25%
Above 30 Cr & including 50 Cr
3.00%
Above 50 Cr
3.00%
Source: Bank Website
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Story first published: Wednesday, October 27, 2021, 22:43 [IST]
The position of foreign exchange reserves as on October 15, 2021 is as under:
US $ Billion
Foreign Exchange Reserves (i+ii+iii+iv)
641.01
i. Foreign Currency Assets (FCA)
577.95
ii. Gold
38.58
iii. Special Drawing Rights (SDRs)
19.25
iv. Reserve Tranche Position (RTP)
5.23
* Difference, if any, is due to rounding-off.
It may be recalled that in February 2004, the Reserve Bank had started a process of compiling half yearly reports and placing them in the public domain for bringing about more transparency and enhancing the level of disclosure in relation to management of the country’s foreign exchange reserves.
Welcome to the refurbished site of the Reserve Bank of India.
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