Author: root

83% of RBI’s MPC statements had net negative sentiment : Study

Banking & Finance

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Negative sentiment had dominated the statements of RBI’s Monetary Policy Committee (MPC) since its first meeting in October 2016 to the latest one in August 2021, according to a sentiment scoring analysis done by professors of Great Lakes Institute of Management, Chennai.

The communication sentiment study of RBI’s MPC statements, done by professors Vidya Mahambare and Jalaj Pathak, was based on analysis of 180 statements of MPC members related to 30 meetings (6 member statements per meeting) held between October 2016 and August 2021.

Negative sentiment

“An overwhelming majority over 83 per cent (149 out of 180 MPC member statements) have a net negative sentiment, reflecting up until 2019 the weak domestic economic environment and from March 2020 the adverse sentiment as a result of the Covid pandemic,” the analysis found.

The study used an improved sentiment analysis technique which assigns a positive or a negative net sentiment score for each statement which is then averaged for every meeting. A negative score can arise due to concerns related to lower domestic/global growth and/or higher inflation and inflation expectations, financial instability, and vice-a-versa for the positive score.

The researchers said that since communication sentiment is not directly quantifiable, researchers have begun to use text analysis techniques to convert the qualitative information contained in central banks’ communication such as monetary policy statements and central bankers’ speeches, into a quantitative indicator.

Also read: MPC Minutes: ‘Not for extended accommodative stance’

“However, there hasn’t been such sentiment analysis of the statements of the Monetary Policy Committee (MPC). This research note is the first attempt to quantify and compare net sentiment in statements of MPC members of India’s central bank, the RBI,” the authors noted.

Out of 30 MPC meetings held until August 2021, the average MPC communication sentiment is negative for 26 MPC meetings, marginally positive for 1 (October 2016), and nearly neutral for 3 meetings (December 2016, April 2018, and February 2021), the report found.

However, the report added that the longest consecutive worsening of the negative sentiment in six MPC meetings was in the pre-Covid period from August 2018 to June 2019.

“Before the pandemic hit, the communication sentiment had begun to improve but hit the lowest point in the statements of March -2020. Since October 2020 once again the sentiments expressed in the MPC statements had improved, before deteriorating again in April 2021 on the expectation of the second wave,” the report said.

“The average net sentiment in the MPC statements remained negative and marginally worsened in the latest August 2021 meeting,” the report concluded.

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 0.00 – –
     I. Call Money 0.00 – –
     II. Triparty Repo 0.00 – –
     III. Market Repo 0.00 – –
     IV. Repo in Corporate Bond 0.00 – –
B. Term Segment      
     I. Notice Money** 0.00 – –
     II. Term Money@@ 0.00 – –
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sun, 22/08/2021 1 Mon, 23/08/2021 4,743.00 3.35
     (iii) Special Reverse Repo~          
     (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sun, 22/08/2021 1 Mon, 23/08/2021 8.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -4,735.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
     (ii) Reverse Repo Sat, 21/08/2021 2 Mon, 23/08/2021 34,471.00 3.35
  Fri, 20/08/2021 3 Mon, 23/08/2021 5,39,812.00 3.35
     (iii) Special Reverse Repo~ Fri, 13/08/2021 14 Fri, 27/08/2021 4,481.00 3.75
     (iv) Special Reverse Repoψ Fri, 13/08/2021 14 Fri, 27/08/2021 352.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 13/08/2021 14 Fri, 27/08/2021 2,50,029.00 3.43
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sat, 21/08/2021 2 Mon, 23/08/2021 42.00 4.25
  Fri, 20/08/2021 3 Mon, 23/08/2021 0.00 4.25
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
  Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
  Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
  Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       23,295.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -7,21,515.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,26,250.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 22/08/2021 6,07,683.64  
     (ii) Average daily cash reserve requirement for the fortnight ending 27/08/2021 6,27,870.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 20/08/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 30/07/2021 10,95,060.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/727

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2 Stocks To Buy As Recommended By Motilal Oswal & Anand Rathi

Personal Finance

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Buy HPCL for a price target of Rs 306

Anand Rathi remains optimistic on the stock of HPCL and has a target price of Rs 306 on the stock as against Monday’s closing price of Rs 245.

HPCL recorded a Profit after Tax of Rs 20.04 billion compared to Rs 22.53 billion lower by 11.0 % for the same quarter last year due to a planned shutdown of the refinery, some on the industrial products which they directly supply from the refineries and an exchange rate loss.

According to Anand Rathi, HPCL commissioned another 142 new retail outlets were opened during the quarter taking the total retail outlet network to 18,776. CNG facilities were added to another 50 retail outlets. “With this, now 724 retail outlets have got CNG facilities. Almost 25% of total network is solarize, it works on solar power now, which is around more than 5,000 retail outlets. In order to provide multiple choices to the customers for their energy needs, HPCL has entered into a strategic partnership with Tata Power, India’s largest integrated power company, to provide EV charging at its petrol pumps in various cities and major highways,” the brokerage has said.

“We have a positive outlook on HPCL given its earnings growth visibility on the back of its capex plans and improvement marketing margin environment. Company also is doubling its existing capacity at Visakh and Mumbai refinery, this will drive the earnings for its refinery business. We value HPCL at 6X FY23 EPS and maintain our BUY rating on the stock with revised target price of Rs 306,” Anand Rathi has added.

Buy Deepak Nitrate, says Motilal Oswal

Buy Deepak Nitrate, says Motilal Oswal

Motilal Oswal has a buy on the stock of Deepak Nitrite, which is an intermediate chemical company, with a diversified business of Basic Chemicals, Fine and Specialty Chemicals, and Performance Products. It manufactures phenol, acetone and isopropyl alcohol (IPA)

through its subsidiary, Deepak Phenolics (DPL).

According to Motilal Oswal, Deepak Nitrate has the most lucrative profile in the entire Specialty Chemicals space. The management said it would facilitate import substitution, with further integration in current processes. The commissioning of IPA expansion and the captive power plant are expected by the end of 1HFY22.

“The captive power plant would increase competitiveness in this segment. A recovery in demand in OBA and DASDA (i.e. Performance Chemicals) is expected over FY22, while demand for Agrochemical and Personal Care products continue to remain robust.

Despite a capex plan of Rs 18 billion over the next three years, it is expected to turn net cash positive by FY23E, with an FCF generation of Rs 17.4 billion over FY22-24E. We maintain our Buy rating, with one of the best RoE profiles in our coverage universe,” the brokerage has said.

Disclaimer

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only and is picked from the brokerage reports of Anand Rathi and Motilal Oswal. Be careful while investing as the Sensex has now crossed 55,000 points. Investors can invest small amounts and avoid putting lumpsum.



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Deposit customers, alliances to lead HDFC Bank’s credit card comeback, BFSI News, ET BFSI

Banking & Finance

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HDFC Bank expects to increase its credit card issuance to half a million per month by February 2022 riding on its expanded liability base, new partnerships and wider product suite as it looks to make up for the lost nine months in which it was restricted in issuing new cards by the Reserve Bank of India (RBI).

Parag Rao, group head, payments, consumer finance, digital banking and IT, HDFC Bank said the bank expects to get to the pre-ban run rate of 300,000 per month in the next two months and increase it to 500,000 by February in largely driven by new deposit customers added to the bank’s franchise in the last nine months.

“Over the years our business has grown largely on the back of our liability customers and we expect that to continue. Over the last nine months we have added 400,000 accounts every month, this in addition to the 60 million customer base we have will be the main drivers of our growth and we have enough headroom to grow. We already have a pipeline of pre-approved cards based on customer profiles that have been monitored since the ban,” Rao said.

80% of the bank’s new cards are issued to new customers currently and Rao does not expect this ratio to drop much dispute new commercial partnerships the bank plans to launch.

On December 3 last year, RBI barred HDFC Bank from issuing new credit cards and introducing new digital products after multiple glitches linked to digital banking, cards and payments on the bank’s platform were reported in the past two years.

The ban was lifted on August 17 but not before impacting the bank’s market share as number of outstanding credit cards dropped from 15.4 million in November 2020 to 14.8 million in June 2021, even as its closest competitors gained at its expense.

Even as the credit card ban was lifted the RBI still has some restrictions on the bank for new launches of digital business generating activities planned under Digital 2.0. It is unclear how those restrictions will impact the bank.

Despite the loss of market share in credit cards, HDFC Bank remains the largest issuer of credit cards in India ahead of SBI Card (12 million) and ICICI Bank (11 million) latest available RBI data as of June 2021 showed.

Rao said the bank used the last nine months in relooking at its value proporsition, engaging with existing customers more deeply and building new strategic alliances which will be announced starting from the festive season next month.

HDFC Bank has lined 20 initiatives including co-branded cards with tie-ups with travel, fintech, consumption, hospitality and mobility companies among others. These alliances will be unveiled over the next nine months.

Rao said depsite the ban the bank has been able to retain its market share in terms of card spends and spends on its cards are still 1.5 times higher than the nearest competitor.

The bank will use more digital data for underwriting and is also in the process to create a multichannel social media and phone-based hub to address customer greviances.

The bank also plans to increase its footprint in merchant acquiring and point of sale businesses to 200 million from 2.3 million currently, Rao said.



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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 6,736.85 3.34 2.60-3.74
     I. Call Money 695.15 2.82 2.60-3.00
     II. Triparty Repo 6,041.70 3.40 3.16-3.74
     III. Market Repo 0.00   –
     IV. Repo in Corporate Bond 0.00   –
B. Term Segment      
     I. Notice Money** 11.20 2.75 2.75-2.75
     II. Term Money@@ 0.00 – –
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Sat, 21/08/2021 2 Mon, 23/08/2021 34,471.00 3.35
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Sat, 21/08/2021 2 Mon, 23/08/2021 42.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -34,429.00  
II. Outstanding Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Fri, 20/08/2021 3 Mon, 23/08/2021 5,39,812.00 3.35
    (iii) Special Reverse Repo~ Fri, 13/08/2021 14 Fri, 27/08/2021 4,481.00 3.75
    (iv) Special Reverse Repoψ Fri, 13/08/2021 14 Fri, 27/08/2021 352.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 13/08/2021 14 Fri, 27/08/2021 2,50,029.00 3.43
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
3. MSF Fri, 20/08/2021 3 Mon, 23/08/2021 0.00 4.25
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
  Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
  Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
  Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       23,295.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -6,87,086.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,21,515.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 21/08/2021 6,12,190.73  
     (ii) Average daily cash reserve requirement for the fortnight ending 27/08/2021 6,27,870.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 20/08/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 30/07/2021 10,95,060.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020 and Press Release No. 2020-2021/1057 dated February 05, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/726

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Canara Bank Revises Interest Rates On Fixed Deposit: Check New Rates Here

Personal Finance

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Canara Bank Regular Fixed Deposit Interest Rates

For term deposits maturing in 7 days to 45 days, 46 days to 90 days and 91 days to 179 days, Canara Bank is now offering an interest rate of 2.90%, 3.90% and 3.95% respectively. On FDs maturing in 180 days to less than 1 Year the public sector bank is providing an interest rate of 4.40%. The bank is now offering an interest rate of 5.10% on FDs maturing in 1 year to less than 3 years. The general public will get an interest rate of 5.25% on their deposits maturing in 3 years & above to less than 5 years.

Canara Bank also offers an “1111 Days” Retail Term Deposit Scheme with an additional 0.10 percent rate of interest over and above the deposit tenor rate. Depositors will receive a 5.35 percent interest rate under this scheme. After the most recent modification, the bank is providing an interest rate of 5.25 percent to the general public on FDs maturing in 5 years and above to 10 years.

Term Deposits (All Maturities) Rate of Interest (% p.a.) Annualised Interest yield (% p.a.)
7 days to 45 days* 2.90 2.93%
46 days to 90 days 3.90 3.96%
91 days to 179 days 3.95 4.01%
180 days to less than 1 Year 4.40 4.47%
1 year only 5.10 5.20%
Above 1 year to less than 2 years 5.10 5.20%
2 years & above to less than 3 years 5.10 5.20%
3 years & above to less than 5 years 5.25 5.35%
Canara Unique “1111 Days” 5.35 5.46%
5 years & above to 10 Years 5.25 5.35%
Source: Canara Bank, for deposits less than Rs.2 Crore, w.e.f. 09.08.2021

Canara Bank Fixed Deposit Interest Rates For Senior Citizens

Canara Bank Fixed Deposit Interest Rates For Senior Citizens

On their deposit amount of less than Rs 2 Cr, senior citizens will continue to get an additional rate of 0.50% than the applicable card rate for the general public. Here are the latest interest rates on fixed deposits provided by Canara Bank to senior citizens.

Term Deposits (All Maturities) Rate of Interest (% p.a.) Annualised Interest yield (% p.a.)
7 days to 45 days* 2.90 2.93%
46 days to 90 days 3.90 3.96%
91 days to 179 days 3.95 4.01%
180 days to less than 1 Year 4.90 4.99%
1 year only 5.60 5.72%
Above 1 year to less than 2 years 5.60 5.72%
2 years & above to less than 3 years 5.60 5.72%
3 years & above to less than 5 years 5.75 5.88%
Canara Unique “1111 Days” 5.85 5.98%
5 years & above to 10 Years 5.75 5.88%
Source: Canara Bank, for deposits less than Rs.2 Crore, w.e.f. 09.08.2021

Canara Bank Domestic Bulk Term Deposits

Canara Bank Domestic Bulk Term Deposits

For Deposits of Rs. 2 Crore & above to less than Rs. 10 Crore, Canara Bank is promising the following interest rates which are in force from 09.08.2021.

Term Deposits (All Maturities) Callable Non-Callable ++
Rate of Interest (% p.a.) Annualised Interest yield (% p.a.) Rate of Interest (% p.a.) Annualised Interest yield (% p.a.)
7 days to 45 days 2.9 2.93% – NA – @
46 days to 90 days 3.1 3.14% 3.1 3.14%
91 days to 179 days 3.25 3.29% 3.25 3.29%
180 days to less than 1 Year 3.25 3.29% 3.25 3.29%
1 year only 3.65 3.70% 3.65 3.70%
Above 1 year to less than 2 years 3.65 3.70% 3.65 3.70%
2 years & above to less than 3 years 3.65 3.70% 3.65 3.70%
3 years & above to less than 5 years 3.4 3.44 3.4 3.44%
5 years & above to 10 Years 3.4 3.44 No Quotes @
For Deposits Rs. 2 Crore & above to less than Rs. 10 Crore, w.e.f. 09.08.2021



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How Oppo, Xiaomi are leveraging huge customer base to become a financial one-stop shop, BFSI News, ET BFSI

Personal Finance

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It’s not just telecom service providers and social media companies that are looking to leverage their huge data trove to offer credit to customers.

Handset vendors such as Xiaomi and Oppo have entered the financial services market.

They are looking to leverage on their huge customer base who they can offer bundled in credit apps in handsets and via their own app stores.

Xiaomi plans

Xiaomi is bringing in offerings like gold loans, credit line cards and insurance products as it looks to provide the full spectrum of financial services across payment, lending and insurance in India. These financial services will be offered in partnership with organisations like Axis Bank, IDFC Bank, Aditya Birla Finance Ltd, Stashfin, Money View, Early Salary and Credit Vidya.

Mi Credit, a curated marketplace for personal loans of up to Rs 1 lakh, in 2019 witnessed a lot of euphoria, and more than one lakh loans have already been disbursed, Manu Jain, Xiaomi India head said.

However, as the pandemic hit, its lending partners took a backseat.

“Many quarters went into re-thinking about the future of Mi Credit or Mi Financial Services should look like. We are now back to growing this particular platform. Q1 2021 versus Q4 2020, we grew 95 per cent, and Q1 2021 versus Q1 2020, we saw 35 per cent growth,” he said.

Jain highlighted that the company is working on building a full spectrum platform with respect to overall financial services as well as credit perspective.

He said Xiaomi is adding insurance vertical to its platform as well as expanding lending category with the addition of offerings like gold loans and credit line cards.

Mi Credit will now offer a higher pre-approved loan of Rs 25 lakh (against Rs 1 lakh previously) and tenure of up to 60 months.

Besides, the company has started offering SME Loans and credit line cards as well.

Mi Credit, in partnership with Stashfin, has launched Credit Line cards.

“It is a unique product that comes with a proposition of Buy Now Pay Later combined with personal loan in order to enable the customer to utilise the offering across channels without any limitations,” Xiaomi India Financial Services Head Ashish Khandelwal said.

Gold loans

Another service that will be launched in the next few weeks is gold loan, he added.

Jain said 40 per cent of the company’s credit product users are self-employed and the remaining 60 per cent are salaried employees.

“In 2021, we are planning to further diversify and provide 20 per cent of the loans to MSMEs (micro, small and medium enterprises). We have launched business loan to meet the emerging needs of entrepreneurs and MSMEs,” he added.

Xiaomi’s Mi Pay service, which was launched in 2018, had touched 20 million registered users in a year’s time. This number has now crossed 50 million users.

Xiaomi has partnered with ICICI Lombard to curate a health insurance product.

This was piloted in July, and will continue to be offered.

Xiaomi also has a cyber insurance offering, and more than 25,000 customers have been covered so far.

Oppo
How Oppo, Xiaomi are leveraging huge customer base to become a financial one-stop shop

Chinese mobile communications company Oppo launched its financial services arm Oppo Kash in 2020. Oppo Kash aims to six offerings including payments, lending, savings, insurance, financial education and for the first time in India a financial well being score.

The company was aiming to have 10 million customers in the next five years with Assets Under Management (AUM) of Rs 50,000 crore.

Users of Oppo Kash will also be entitled to free credit reports, personal loans upto Rs 2 lakh, business loans upto Rs 2 crore and screen insurance.

Oppo Kash comes in the form of a mobile app and is available in Google Play Store and Oppo App Store. It will come pre-installed in all Oppo smartphones. The mobile company has partnered with 20 financial companies to power this platform.

The mobile communications firm has also set up a customer service team that would help users invest in mutual funds, take loans or solve any other queries.

The customer servicing team has been trained in multiple Indian languages to cater to India’s regional customer segment.

The firm’s financial arm was launched along side its new smartphone Oppo Reno 3 at the event.



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Paytm and HDFC Bank enter into strategic partnership

Banking & Finance

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IPO-bound Paytm, the country’s largest payments platform, and HDFC Bank, the largest private sector bank, have entered into a strategic partnership.

This brings together two market leaders who will drive innovative digital solutions for financial transformation in the country by combining their strengths in the banking, lending and digital payments space.

The fusion of HDFC Bank’s network, products and credit appraisal capabilities and Patym’s technological platform will accelerate digital transformation in semi urban and rural India while bringing more people into formal banking channels.

Partnership

Talking about the partnership, Bhavesh Gupta, CEO, Paytm Lending said in a statement, “Together we aim to provide innovative digital lending and payment solutions for consumers and merchants alike.This partnership will further strengthen financial services ecosystem by bringing together our technology and digital solutions and HDFC Bank’s retail and credit prowess.”

Renu Satti, COO, Offline Payments, said, “Paytm’s reach in the offline and online merchant space and HDFC Bank’s retail influence, will aim for dynamic growth in the payments space. Paytm has a history of launching innovative products that have made way for adoption of retail payments among various merchant partners. This partnership aims to bring innovative products focusing on affordability.”

Parag Rao, Group Head – Payments, Consumer Finance, Digital Banking & IT, HDFC Bank said, “As India’s largest issuing and acquiring bank, we have always endeavoured to personalise our offerings to customers-consumers, businesses and corporate houses. Through this partnership we will also be jointly delivering enhanced SmartHub solutions to the market. We believe that this is the start of a great partnership and the cumulative strength of both HDFC Bank and Paytm will help us strengthen our respective leadership positions”.

HDFC Bank SmartHub solutions is an integrated platform offering merchants a one stop solution shop for all their business needs-payments, banking, lending and segment specific business solutions.

Paytm , which has filed a draft offer document with SEBI for an Initial Public Offering (IPO), is India’s largest payments platform with 333 million users and 21 million merchants onboard

With over 50 million card customers (both credit and debit cards) HDFC Bank is a strong player in the payments ecosystem with leadership in both credit card issuing and acquiring businesses. It has a footprint of over two million merchant acceptance points and 48 per cent business market share on merchant acquiring volume.

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City Co-op Bank wants to emulate PMC Bank for reconstruction

Banking & Finance

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Mumbai-based The City Co-operative Bank (CCB) has decided to take a leaf out of the scam-hit Punjab and Maharashtra Co-operative Bank’s book and scout for investment/ equity participation for its reconstruction.

CCB has floated an Expression of Interest (EoI) to identify a suitable equity investor/ group of investors willing to take over management control to revive the bank and commence regular day-to-day operations.

The bank has dangled a carrot in front of prospective investor(s), whereby upon commencement of normal day-to-day operations, it will be open for the investor(s) to convert it into a Small Finance Bank (SFB).

V. T. Gokhale, a lawyer and former investment banker, said: “This is a new development coming close on the heels of the “in process” restructuring of PMC Bank.

“It is a sequel to the amendments carried out in the Banking Regulation Act, 1949, last year, which enables a cooperative bank, subject to RBI approval, to raise equity capital by way of public issue or private placement.”

RBI rejects CCB’s merger with MSC Bank

CCB has floated the EoI in the backdrop of the Reserve Bank of India (RBI) rejecting a proposal for its merger with the Maharashtra State Co-operative (MSC) Bank.

According to CCB’s website: “the Reserve Bank of India has shown (sic) its inability to consider the request submitted by Maharashtra State Co-operative Bank Ltd., to merge our Bank with them.”

Due to its poor financial position and negative net worth, the bank was placed under All Inclusive Directions among others, by RBI with effect from April 18, 2018.

Under the Directions, there are restrictions on deposit withdrawal, grant or renewal of any loans and advances, and making any investment.

PMC revival model

CCB said the Board of Directors, in its meeting held on 11th August 2021, decided to explore the possibility of inviting investment/ equity participation from potential investors for its reconstruction, ”as envisaged and successfully done by PMC Bank”.

The potential investors can be Financial Institutions, Banks, Non-Banking Finance Companies, Micro Finance Institutions, Resident Individuals, Professionals (singly or jointly), Companies, Societies, Trusts or other such entities.

CCB, which has ten branches in the Mumbai Metropolitan Region, had total deposits of ₹411.16 crore, advances of ₹204.90 crore and gross non-performing assets (NPA) of ₹194.59 crore as on 31st March, 2021, per the EOI.

The share capital of the bank is ₹10.41 crore. However, the bank registered a net loss of ₹15.08 crore during 2020-21 and has a negative net worth of ₹172.93 crore, the EoI said.

The bank said the investor(s) should ideally bring in the capital required for enabling the bank to achieve the minimum required capital to risk-weighted assets ratio (CRAR) of 9 per cent.

However, the investors may explore the option of restructuring a part of deposit liabilities into capital/ capital instruments, the EoI said.

The bank may also approach DICGC to support payment up to ₹5 lakh (insured deposits) to depositors.

After due evaluation, the viable proposal(s) will be forwarded to RBI for consideration for preparing a draft scheme of reconstruction and other consequential action under Banking Regulation Act, 1949.

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Govt considers operational changes in IBC following expert panel recommendations, BFSI News, ET BFSI

Banking & Finance

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India is considering several operational changes in the Insolvency and Bankruptcy Code (IBC), harnessing digital technology to help remove seemingly insurmountable obstacles of distance or time – and speed up the resolution of bad loans.

The Indian Institute of Insolvency Professional of ICAI (IIIPI), which constituted a study group, has recommended greater adoption of digital modes, such as holding virtual meetings of courts and CoC (committee of creditors) and deploying AI (Artificial Intelligence), even after eventual restoration of normality due to the time-saving benefits of digital technology.

Under the aegis of Insolvency and Bankruptcy Board of India (IBBI), IIIPI regulates insolvency professionals, who play a key role in the execution of bankruptcy resolution plans. It has submitted a set of recommendations made by the study group to the ministry of corporate affairs and IBBI.

The Ministry of Corporate Affairs did not respond to ET’s mailed query.

“In addition to sprucing up the infrastructure, the NCLT should consider continuing ‘virtual courts’ even after normalcy restores,” IIIPI said in a note viewed by ET. “In virtual courts, senior officials can participate without travelling from remote offices, which helps in fast decision making and reduces pendency.”

It is necessary to learn from every crisis, which is what the said report seems to be doing on recommending best practices.

Virtual meetings during Covid restrictions, according to IIIPI’s study, resulted in quick decision making as senior officials used to participate.

“This should be continued as a ‘best practice’ even after normalcy resumes,” said the note.

Dewan Housing Finance (DHFL) is a classic case in point. The troubled non-banking finance company, for which the government amended the law to bring it under the IBC, has finally been sold. The resolution process ended successfully, albeit after multiple litigations.

The study group report by the largest body of insolvency professionals also urged the authorities to nip in the bud the menace of frivolous cases, often intended to cause delays in resolutions.

Section 60(5)(a) of IBC gives NCLT the jurisdiction to entertain and dispose of any application or proceeding by or against the corporate debtor or corporate person.

This may be amended to restrict and specify the grounds on which any applicant can approach NCLT for rectifying grievances. IBBI is urged to take up the issue on priority, said one of the recommendations in the report.

DHFL received about 40-50 cases challenging decisions by either the central bank-appointed administrator or the CoC.

“Artificial Intelligence (AI) based facilities should be used for people tracing, asset tracing and transaction tracing,” it recommended.



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