Government of India has announced the sale (re-issue) of Government Stock detailed below through auctions to be held on August 27, 2021.
As per the extant scheme of underwriting notified on November 14, 2007, the amounts of Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under Additional Competitive Underwriting (ACU) for the underwriting auction, applicable to each Primary Dealer (PD), are as under:
(₹ crore)
Security
Notified Amount
Minimum Underwriting Commitment (MUC) amount per PD
Minimum bidding commitment per PD under ACU auction
5.63% GS 2026
11,000
262
262
New GoI FRB 2034
3,000
72
72
6.64% GS 2035
10,000
239
239
6.67% GS 2050
7,000
167
167
The underwriting auction will be conducted through multiple price-based method on August 27, 2021 (Friday). PDs may submit their bids for ACU auction electronically through Core Banking Solution (E- Kuber) System between 09:00 A.M. and 09:30 A.M. on the date of underwriting auction.
The underwriting commission will be credited to the current account of the respective PDs with RBI on the date of issue of securities.
“The expansion in Tier 1 capital reinforces Barclays’ commitment to India, and will enable further growth of the bank’s corporate and investment banking and private clients businesses,” the statement said.
Jaideep Khanna, Head of Barclays, Asia Pacific, and Country CEO, India, said, “The capital infusion in the bank reflects the success and strong track record of our India franchise built over the last three decades.
“We have ambitious growth aspirations, and the investment will help accelerate that as we look to leverage the attractive opportunities that the present situation offers.”
Khanna observed that as economic activity gathers momentum, there is increased demand for capital from clients.
“We are well placed to support their objectives and remain committed to working closely with them,” he added.
Barclays Bank’s operations in the country comprises financing, advisory and risk management businesses within investment bank; corporate banking, including cash management and trade finance; private clients business for high and ultra high networth individuals and family offices.
As part of its expansion in the country, Barclays Bank PLC had inaugurated its International Banking Unit (IBU) branch at GIFT City in Gujarat in February 2021.
The Reserve Bank of India has appointed Shri Ajay Kumar as Executive Director (ED) with effect from August 20, 2021.
Prior to being promoted as ED, Shri Ajay Kumar was heading the New Delhi Regional Office of the Bank as Regional Director.
Shri Kumar has, over a span of three decades, served in foreign exchange, banking supervision, financial inclusion, currency management and other areas in the Reserve Bank.
As Executive Director, Shri Kumar will look after Department of Currency Management, Foreign Exchange Department and Premises Department.
Shri Kumar is Masters in Economics from Patna University, MS in Banking from ICFAI and Certified Bank Manager from Institute of Bank Management and Research, Hyderabad. He has undertaken Executive Management Programme from Kellogg School of Management, Chicago and holds other professional qualifications including Certified Associate of Indian Institute of Banking and Finance (CAIIB).
Tamanna Inamdar: How do you view the govt’s new asset monetisation plan in light of past experiences? Subhash Chandra Garg: Monetisation has two clearly stated objectives which are very worthwhile.
One, you have invested some money in road or airport or rail or whatever, and now you need more money to invest. Therefore, the asset which has been created is passed on to private entrepreneurs to operate it, and then take that capital back to invest into something new.
Two, better operation of an asset. A toll road operated by NHAI or an airport operated by AAI or an electricity distribution company run by a state entity gets better operated if it is operated by private entity.
There is immense sense in monetising operating assets. There is lot of confusion and unnecessary misinformation that monetisation is sale of assets, which it is not. And sale of asset is not a bad thing. I do not think the government should be defensive about it.
There is no need to be defensive about selling banks, insurance companies, BPCL etc. That is a different route which should be taken to its logical course. What can get appropriately sold should be sold and monetised. There is nothing wrong about it. It is a perfectly justifiable thing to do.
One concern is over who gets these assets. Can it create monopolies with these going into the hands of a few, like people fear? In India, operating of important assets is too much decentralised. There are actually too many operators. There is a necessity for large efficient players to run road assets or airport assets.
For example, buses and trucks in many states have single owners. They cannot invest, they cannot maintain those assets. Same is the case with the government. The Airport Authority of India has over 130 airports, but it cannot maintain them well.
There are 5 to 10 good operators in the country and three or four very good airport operators. Only about 20 airports are at best going to or have gone into private hands. So I think this concern over monopolies is completely misplaced.
India is a very large country with a huge number of entrepreneurs. We should only actually consolidate. Take example of telecom. There are three operators. Does it serve the country’s interest badly? Should there be 20-25 telecom operators?
The same thing applies to roads or rail. If we have 5, 10 or 20 strong players, I think we will be better off. This concern is overblown. I do not think it is in national interest to be worried about potential monopolies.
Similar plans in the past haven’t had roaring success. What is your take on this particular plan? That is where the main challenges lie. The government did very well in monetisation of six airports in 2019, but thereafter there hasn’t even been a single transaction.
In roads also, we have struggled. There have been only five packages so far of ToT. Two of them did not take off at all in last five years; we have only done three. There is not much success anywhere else.
Now, this particular plan which talks of Rs 6 lakh crore over four years — that is Rs 1,50,000 crore a year — is simply too ambitious. I do not think there is any likelihood of it getting done. The institutional mechanisms which we have created are also not at all conducive for this to happen.
I honestly think that the government will not be able to deliver on it. If it does even 20% of what it is saying, I would be very happy.
When the government comes up with these mega pipelines — infrastructure pipeline earlier, monetisation pipeline now — the numbers are staggering, very big. There is absolutely no capacity, no clarity of structure. The sheer inability and the record of the government in carrying out such transactions makes me very suspicious.
As I said, I do not see more than 20% of it being met. My estimate is that the government, in four years, will end up with only 10% of this pipeline being achieved.
After almost two harrowing years of the pandemic, bank chief executives are looking ahead for a period of stability and growth with predictions of an uptick in credit demand.
Sanjay Singh, Deputy CEO, BNP Paribas India
Sanjay Singh, Deputy CEO, BNP Paribas India
“All the factors are favouring the capex revival. Low interest rates, lower leverage, efficient ecosystem, and demand uptake. All are indicating that capex will resume in next six months,” Sanjay Singh, Deputy CEO, BNP Paribas India, said at the CEO Panel discussion BFSI Leaders: Unlocking Business Value at ETBFSI Summit.
Singh said his bank’s focus is to embrace the best of traditional banking and a mix of new-age technologies.
Rajeev Yadav, MD & CEO, Fincare Small Finance Bank
Rajeev Yadav, MD & CEO, Fincare Small Finance Bank
Focus on risks
Along with growth and revival, bankers are also focused on risks.
Risk taking in the post pandemic world is a very important factor for all. Retail lending is a safer bet than corporate, said Rajeev Yadav, MD & CEO, Fincare Small Finance Bank. “Being a retail bank, we are taking retail risk. Retail lending is stabilised and fear of incremental lending is no more there,” he said.
Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services
Sunil Prabhune, Chief Executive-Rural & Housing Finance and Group Head-Digital, IT & Analytics, L&T Financial Services said that the business metrics have changed and the vaccination of employees is now an integral factor.
“Liquidity is not a problem anymore. We are extra conscious about risks and are focusing on how to retain customer franchise by maintaining the relation without meeting the customer. The strategy is to use data intelligence rather than conventional wisdom or rule of thumb for decision making,” he said.
During the pandemic it’s okay to miss top-line success because survival is the major objective, Yadav of Fincare said. “Shouldn’t worry about any loss of GDP or growth. As compared to 2019 data we are doing better,” he said.
On growth
Bank CEOs see a lot of pent-up demand.
“On an average credit demand is muted but there are pockets where demand is thriving. Use of behavioral analytics, machine learning, tailoring asset strategy etc. has helped us to recover faster, said Prabhune of L&T Financial Services, adding that his company’s disbursement this quarter was 3-3.5 times of the last quarter.
Nitesh Ranjan, ED, Union Bank of India said credit demand is subdued right now but definitely recovering from what is seen in the last six months across the spectrum. “Push from the government will help. The demand is high in Agri, renewable energy, Infra and warehousing,” he said.
“In the new normal world, we look at data and decide business operations. We are a rural bank and our rural business is shaping up better than pre-Covid,” Yadav of Fincare said,
Covid didn’t have any impact on businesses that are part of essential services, i.e. agri, dairy, he said, adding that credit demand is reasonably strong.
Future trends
The focus is on the next 3-5 years, how to better leverage digital and data, how to build capacity to manage people and continuously invest in the right risk architecture, said Ranjan of Union Bank of India.
Can banks build their own super app since they have a large customer base, asked Anand Dalmia, Co-founder, Fisdom. “With a super app, banks can offer more service to customers,” he said.
Prabhune of L&T Financial Services said “Monitoring is not something when it’s going wrong. Our focus is to detect what is something like to happen rather than what has happened. Can we predict if a customer is going to delay his payment for a day?”
Yadav of Fincare wants to focus on basic banking objective which the bank missed due to the pandemic. “We would like to have in-house talent rather than depending on the others,” he said.
Learnings from Covid
Ranjan said the PSU bank merger was a major challenge along with Covid. “Overnight we doubled the size. But we are seeing a much better period than what we have seen. With vaccination, we will be in a better place and business continuity is also improving.”
All of us had plans for 3-5 years. Covid taught us to accelerate the plans to one year.
Dalmia of Fisdom said during the pandemic FinTechs gained a lot due to digital adoptions by banks. We focused on getting more partners onboard. “We have collaborated with 10 banks. Banks have many retail customers, which is beneficial for FinTechs.”
The coronavirus wave will lead to new problem loans in the retail and SME segments, but a severe asset quality decline is unlikely, according to Moody’s Investors Service.
Banks’ improved profitability, capital and loss buffers will help them absorb anticipated loan losses and maintain credit strength, the global credit agency said in a report.
Moody’s observed that India’s second coronavirus wave is increasing asset risks for banks, but the country’s economic recovery, a tightening of loan underwriting criteria and continued government support will prevent a sharp spike in problem loans.
Stable NPL ratio
The agency’s baseline expectation is that newly formed non-performing loans (NPLs) at public sector banks will increase nearly 50 per cent to about 1.5 per cent of gross loans annually in the next two years.
Nevertheless, banks’ average NPL ratios will remain broadly stable, driven by the resolution of legacy NPLs and acceleration of credit growth, the global credit rating agency said in a report.
“A severe deterioration of banks’ asset quality is unlikely, despite an expected rise in new loan impairments, particularly among individuals and small businesses that were hit hardest by the virus outbreak.
“This is because government initiatives like the emergency credit-linked guarantee scheme (ECLGS) have been effective in providing immediate liquidity for businesses,” Alka Anbarasu, a Moody’s Vice President and Senior Credit Officer, said.
In addition, accommodative interest rates and loan restructuring schemes will continue to mitigate asset risks, such that the coronavirus resurgence will delay but not derail the improvements in banks’ balance sheets that had begun before the pandemic.
Moody’s said the banks rated by it also have stronger loss-absorbing buffers, which will help them withstand the asset quality decline and maintain their credit strength.
Banks had reinforced these buffers in the past year through increases in capital, loan-loss reserves and profitability, it added.
E-Tenders are invited from eligible contractors / firms for the captioned work estimated to cost ₹17.44 lakh through the MSTC portal. The close bid date is 10.09.2021 at 1400 hrs.
Date of NIT (along with complete tender document) available to parties to download
12:00 Noon of 26.08.2021
5.
Date of Pre-bid meeting at Estate Department, RBI Main Building, Patna (offline)
12:30 Noon of 02.09.2021
6.
Earnest Money Deposit
₹ 34,888/-
7.
Start Bid date- Date of Starting of e-Tender for submission of online Techno-Commercial Bid and Price Bid at www.mstcecommerce.com/eprochome/rbi–
12:00 Noon of 26.08.2021
8.
Close Bid date- Date of closing of online e–tender for submission of Techno-Commercial Bid & Price Bid
1400 hrs of 10.09.2021
9.
Date & time of opening of Part–I (i.e. Techno-Commercial Bid) : Part–II (Price Bid) : Part–II (Price bid) shall be opened at a later date that will be intimated to vendors earlier.
15:00 hrs of 10.09.2021
10.
Transaction Fee
Payment of transaction fee through MSTC payment gateway/NEFT/RTGS in favour of MSTC LIMITED
Any amendments / corrigendum to the tender, if any, issued in future will only be notified on the RBI Website / MSTC Website and will not be published in the newspaper.
Life Insurance Corporation of India (LIC), BNP Paribas Arbitrage, Societe Generale and Indian Bank are among the qualified institutional buyers (QIBs) allotted more than 5 per cent equity shares in Canara Bank’s qualified institutions placement (QIP) issue aggregating ₹2,500 crore.
As per the latest shareholding pattern, big bull Rakesh Jhunjhunwala has picked up 1.59 per cent stake in Canara Bank.
The public sector bank, in a regulatory filing, said the Sub-Committee of the Board — Capital Planning Process of its Board of Directors, at its meeting held on August 24, 2021, approved the allotment of about 16.73 crore equity shares to eligible QIBs at an issue price of ₹149.35 per equity share.
The QIP opened on August 17 and closed on August 23.
LIC accounted for 15.91 per cent of the total QIP issue size, followed by BNP Paribas Arbitrage (12.55 per cent), Societe Generale (7.97 per cent), Indian Bank and ICICI Prudential Life Insurance Company (6.37 per cent each), Morgan Stanley Asia (Singapore) Pte – ODI (6.16 per cent) and Volrado Venture Partners Fund II (6.05 per cent).
Following the QIP, the Central government’s stake in Canara Bank, as on August 24, 2021, has come down to 62.93 per cent stake (against 69.33 per cent in the quarter ending June 30, 2021).
The shareholding of LIC, which is single largest public shareholder, has gone up from 8.11 per cent to 8.83 per cent stake.
Canara Bank shares closed at ₹151.05 apiece, down 2.99 per cent over the previous close on BSE.
Barclays Plc will invest more than Rs 3,000 crore ($403.99 million) in its India unit to expand operations, the British lender said on Thursday.
With the investment, Barclays Bank PLC India’s total invested capital in Asia’s third-largest economy will increase to more than Rs 8,300 crore.
Barclays said the investment would help grow its corporate and investment banking, and private clients businesses in the country.
“As economic activity gathers momentum, there is increased demand for capital from clients,” said Jaideep Khanna, head of Barclays, Asia Pacific and Country CEO, India.
Barclays Bank PLC had inaugurated its International Banking Unit branch at GIFT City in Gujarat in February.
NEW DELHI: Union Minister of State for Commerce and Industry Anupriya Patel on Monday said that India is expected to export USD 46 billion to ASEAN in the financial year 2022.
Patel on Monday inaugurated the “India-ASEAN Engineering Partnership Summit” organised by the Engineering Exports Promotion Council (EEPC) with support from the Ministry of External Affairs and the Department of Commerce.
While addressing the inaugural session, Patel said: “As one of the largest destinations for Indian exports, ASEAN will be an important region for India with an export target of USD 46 billion in meeting the global export target of USD 400 billion in the financial year 2021-22.”
“Both India and ASEAN have large share of skilled population, robust service and manufacturing sectors and there are many complementary sectors and products available for greater cooperation. With a combined economy of approx. USD 5.8 trillion, there is significant potential for enhancing trade and investment partnership between India and ASEAN.”
Patel further said that Prime Minister Narendra Modi has set a target of USD 400 billion of merchandise exports for fiscal 2021-22 and also envisioned a roadmap to achieve this milestone.
“As a part of the Atmanirbhar Bharat Abhiyaan, the Central government has recently approved the Production-Linked Incentive (PLI) Scheme worth USD 26 billion covering 13 sectors, including electronics, pharmaceuticals, solar modules, speciality steel, automobiles, and medical devices for attracting investment and enhancing India’s manufacturing capabilities,” she said.
Supported by the Ministry of Commerce and Industry and Ministry of External Affairs, the four-day India-ASEAN Engineering Partnership Summit is expected to see the participation of over 300 delegates from the Indian industry. A sizable number of delegates from ASEAN countries will also join the summit. The summit will also cover B2B meetings and interactions. The thematic sessions will cover a range of topics including country sessions, and emerging areas of cooperation like Industry 4.0, integration of MSME in the regional value chain. The Government of Tamil Nadu joined the event as “Partner State” while the Government of Haryana as the “Focus State”.
This year is special for both partners as it marks the 25thanniversary of the India-ASEAN dialogue partnership and 10 years of the Strategic Partnership.
An E-Book on India-ASEAN trade and investment emphasizing the engineering and MSME sector was also launched during the inaugural session. The book covers several important aspects of enhancing bilateral trade and investment and also provides exhaustive information on India and ten ASEAN nations.
