Reserve Bank of India – Tenders
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(S.M.N Swamy) December 03, 2021 |
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Author: root
Reserve Bank of India – Tenders
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The captioned Meeting was held at 11.00 am on December 2, 2021 in the Video Conference Room on the third floor of the Bank’s Main Office Building at Bakery Junction, Thiruvananthapuram. (a) List of Bank’s Officials who attended the meeting
(b) List of Firm’s representative who attended the meeting
2. Shri Thanikkachalem, Assistant Manager invited queries from the prospective bidders regarding the captioned tender. The details of queries raised by the firm and clarifications / comments of the Bank are tabulated below:
3. The meeting concluded at 11:30 am. Officer-in-Charge |
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Reserve Bank of India – Press Releases
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Reserve Bank of India announces the auction of Government of India Treasury Bills as per the following details:
The sale will be subject to the terms and conditions specified in the General Notification F.No.4(2)-W&M/2018 dated March 27, 2018 along with the Amendment Notification No.F.4(2)-W&M/2018 dated April 05, 2018, issued by Government of India, as amended from time to time. State Governments, eligible Provident Funds in India, designated Foreign Central Banks and any person or institution specified by the Bank in this regard, can participate on non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the notified amount. The auction will be Price based using multiple price method. Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, December 08, 2021, during the below given timings:
Results will be announced on the day of the auction. Payment by successful bidders to be made on Thursday, December 09, 2021. Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125). Ajit Prasad Press Release: 2021-2022/1305 |
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Reserve Bank of India – Press Releases
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The following State Governments have offered to sell securities by way of auction, for an aggregate amount of ₹8,000 Cr. (Face Value).
| Sr. No. | State/UT | Amount to be raised (₹ Cr) |
Additional Borrowing (Greenshoe) Option (₹ Cr) |
Tenure (Yrs) |
Type of Auction |
| 1 | Assam | 500 | – | 5 | Yield |
| 500 | – | 10 | Yield | ||
| 2 | Bihar | 2000 | – | 9 | Yield |
| 3 | Jammu & Kashmir | 500 | – | 15 | Yield |
| 4 | Karnataka | 1000 | – | 10 | Yield |
| 1000 | – | 11 | Yield | ||
| 5 | Tamil Nadu | 1000 | – | 8 | Yield |
| 6 | Telangana | 1500 | – | 24 | Yield |
| TOTAL | 8000 |
The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on December 07, 2021 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility.
Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on December 07, 2021 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.
In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.
For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).
Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.
The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at same/different rates of yield or prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.
The Reserve Bank of India will determine the maximum yield /minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹10,000.00 and multiples of ₹10,000.00 thereafter.
The results of the auction will be announced on December 07, 2021 (Tuesday) and payment by successful bidders will be made during banking hours on December 08, 2021 (Wednesday) at Mumbai and at respective Regional Offices of RBI.
The State Government Stocks will bear interest at the rates determined by RBI at the auctions. For the new securities, interest will be paid half yearly on June 08 and December 08 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.
The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.
Ajit Prasad
Director (Communications)
Press Release: 2021-2022/1304
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Reserve Bank of India – Press Releases
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Ajit Prasad Press Release: 2021-2022/1303 |
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Tata AIA Life Insurance bets on 40% growth over next 3 years
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Tata AIA Life Insurance expects a 30-40 per cent growth in business over the next three years backed by a strong push to protection and pension plans, ramping up of distribution network and with renewed emphasis on branding.
According to Naveen Tahilyani, MD and Chief Executive Officer, Tata AIA Life Insurance, pension as a category is currently a small part of their total portfolio. But the company plans to launch new products starting this month to tap into the potential growth in the segment.
The company will also continue its focus on protection plans, which currently accounts for nearly 25 per cent of its product mix.
“We grew by nearly 30 per cent in H1 and in Q2 of this fiscal. Our growth has been close to 40 per cent. We have had strong numbers in November. We are hopeful of 30-40 per cent growth over the next three years,” Tahilyani told BusinessLine.
In FY21, the total premium income grew by 34 per cent to ₹11,105 crore, compared with ₹8,308 crore in FY-20. The total renewal premium income also witnessed a 37 per cent growth at ₹6,961 crore (₹5,066 crore). Its 13th month persistency remained at 88.28 per cent despite the adverse impact of Covid-19 pandemic while the claim settlement ratio stands at around 98.05 per cent. The company claims to have registered 35 per cent CAGR in the retail protection business over the last two years.
Ramping up distribution
The company is looking to ramp up its distribution network both by opening new branches and entering into partnerships with health tech and fintech companies for ramping up sales.
As on March 2021, the company had around 215 branches. It has already added 100 branches so far this year and plans to add another 100 over the next six months taking the total to around 415 by June 2022.
The company has a strong presence in Maharashtra, Gujarat, West Bengal, Delhi NCR, Punjab and Haryana. It plans to ramp up presence in the southern markets by setting up new branches.
Distribution through agency network accounts for nearly 30 per cent of its total sales, while the remaining 70 per cent comes from non-agency network including bancassurance, broking partners and new age digital companies.
Branding and marketing
Tata AIA Life Insurance has on-boarded Olympic gold medallist Neeraj Chopra as its brand ambassador in a multi-year deal with a focus on enhancing its brand image. The move would help promote health and wellness among policyholders and penetrate deeper into the Tier-II and Tier-III markets.
“So far, we have been reasonably quiet on branding front. Now, we think it is time to invest in branding. The Neeraj Chopra campaign would be initially rolled out on the digital platform,” Tahilyani said.
The company plans to lay emphasis on the omni-channel network with the digital channel serving more as a feeder to the physical network.
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Indian banks behind the curve on payments: Uday Kotak
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Banks have been “short sighted” in the last three years on the payments business which is now monopolised by two or three payment companies, said veteran banker Uday Kotak, and urged them to “wake up”.
“Indian banks are behind the curve. Indian banks have allowed the growth of UPI payments that have been essentially monopolised by two players — Google Pay and PhonePe — which have 85 per cent of the market share,” said Kotak, Managing Director and CEO, Kotak Mahindra Bank on Friday.
Wake-up call
Addressing the InFinity Forum organised by IFSCA and Bloomberg, Kotak added that this is a wake up call for Indian banking.
“Wake up or you will see large parts of traditional financial systems move out,” he said.
Also see: Fintech risk landscape
Noting that bankers had been short-sighted over the last three years, Kotak said their standard response was that there is no money in payments.
He, however, stressed that consumer protection has to be the key priority when fintech companies grow.
Legal boundaries
Consumer tech companies have revenue models which are outside finance — such as advertising and e-commerce — while banks legally can not enter non-financial businesses, Kotak noted.
“So, there are serious issues of how to draw lines and, simultaneously, there are issues on financial stability,” he said.
Keep trust
While underlining that he is not against competition, Kotak said that we need to make sure that competitive service mustn’t lead to systemic and stability challenge.
Also see: Digital payments remain strong, marginal decline in November
“We must ask the question of who runs the risk when raising the deposit — is it the consumer tech company which is facing customers and raising deposits who runs the risk of the underlying asset? As we grow fintech, we must make sure that we do not betray trust,” he added.
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Reserve Bank of India – Press Releases
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Ajit Prasad Press Release: 2021-2022/1302 |
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Deposit growth in alternative fortnights a contrarian trend: SBI Ecowrap
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The abrupt increase and subsequent slump in deposits of all scheduled commercial banks (ASCBs) in the fortnight ended November 5, and the preceding fortnight ended November 19, respectively, are contrarian trends, according to the State Bank of India’s economic research report, Ecowrap.
“While it may be exactly difficult to decipher the increase and subsequent decline, it does pose questions on liquidity management, financial stability, or a shift in behavioural trend in customer payment habits through digitisation and hence, lower currency leakage and concomitant deposit bulge or both,” said Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI.
Also see: NBFC NPAs could increase by a third due to tightening of norms: Ind-Ra
Referring to an increase of ₹3.3-lakh crore in deposits in the fortnight ended November 5, Ghosh observed that this has never happened during a Diwali week as there is always a currency leakage and concomitant deposit decline. This is also the fifth largest increase in any fortnight in the last 24 years, he added.
Looking back
The report noted that such huge incremental addition has happened only a few times, with higher deposits accretion (than the current year’s fortnight) occurring during the fortnight ended November 25, 2016 (₹4.16-lakh crore), September 30, 2016 (₹3.55-lakh crore), March 29, 2019 ( ₹3.46-lakh crore), and April 1, 2016 (₹3.41-lakh crore).
However, the increase in November 2016 was because of demonetisation and the March and April fortnightly increases could be attributed to seasonal year-end bulge. In this respect, the current deposit bulge requires a detailed explanation, Ghosh said.
Deposit build-up and market rally
Referring to ₹2.70-lakh crore slump in deposits during the fortnight ended November 19, 2021, Ghosh believes that it is possible there was a large influx of deposits into the banking system for the fortnight ended November 5, 2021, in anticipation of a buildup in stock market rally post primary issuances of new age companies and others.
Also see: FIDC seeks relaxation on IRACP norms
However, when such rally did not materialise, the bulge in banking deposits slumped and almost 80 per cent of the deposit bulge was withdrawn.
Ghosh said interestingly, the amount of money parked in fixed reverse repo window jumped from ₹0.45-lakh crore on October 19 this year to ₹2.4-lakh crore on November 17, and has remained at such level till December 1. However, the significant jump in digital transactions has also resulted in lower usage of cash in current fiscal, and ideally could also have resulted in a surge in deposits for the Diwali week.
Growth in deposits
The report said though the deposits growth remained the same in Q2 (2.6 per cent) as compared to Q1 (2.5 per cent), sequentially at all-India level, apart from Metro regions, it has decelerated quarter over quarter (q-o-q), particularly in rural areas, indicating the current economic recovery is mostly urban-led and rural economy is still recouping.
Meanwhile, the ASCB’s credit has increased by ₹1.18-lakh crore (7.1 per cent y-o-y) during the fortnight ended November 5, which may be due to festive demands.
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NBFC NPAs could increase by a third due to tightening of norms: India Ratings
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The Reserve Bank of India’s clarification accounting of non-performing advances is likely to increase non-banking finance companies’ (NBFCs) non-performing assets (NPAs) by around a third, according to India Ratings (Ind-Ra).
NBFCs would also have to invest in systems and processes to comply with daily stamping requirements.
Ind-Ra noted that NBFCs have asked the RBI to privide a transition period on this requirement.
Limited impact on provisioning
However, the impact on provisioning could be modest, because NBFCs use Ind-AS (Indian Accounting Standards) and higher rated NBFCs have a more conservative provision policy than IRAC (income recognition and asset classification) requirements.
All arrears to be cleared
The credit rating agency observed that the RBI clarification would allow stage 3 (credit impaired) assets to become standard only when all overdues and arrears (including interest) are cleared.
Earlier, NBFCs would classify an account as Stage 3 when there is a payment overdue for more than 90 days. Typically, for monthly payments, this would be when there are 3 or more instalments overdue on any account.
Also see: Deposit growth in alternative fortnights a contrarian trend: SBI Ecowrap
However, when the borrower makes a part payment such that the total amount due is less than three instalments, the account is removed from NPA classification and classified as a standard asset. It remains in the overdue category if not all dues are cleared.
Now, RBI has restricted movement from Stage 3 to Standard category.
NBFC borrowers are generally a weak class of borrowers and have volatile cash flows so once an account has been classified as NPA, it could remain there for a considerable period, said Pankaj Naik, Associate Director, Ind-Ra.
Accelerated pace of NPA recognition
Referring to an RBI circular requiring daily stamping of accounts instead of a monthly or quarterly one to count the number of overdue days, Ind-Ra opined that this would result in an accelerated pace of NPA recognition for accounts.
“Where there is cash collection, NBFC borrowers typically pay their overdues with some delays. Accounts can now get into NPA category for just a day’s delay in payment and once categorised as NPA will not be able to become standard unless all arrears are cleared.
Also see: Time to convert fintech initiatives into revolution: PM Modi
“So, in other words, accounts would get categorised as NPAs at a faster pace and would remain sticky in that category for a longer period of time. Both these accounting treatments would result into higher headline number for NBFCs,” said Naik.
He noted that it may so happen that NBFCs would disclose NPA numbers as per IRAC norms and Stage 3 numbers as per Ind-AS separately in their disclosures.
Varied performance across segments
The agency assessed that borrowers in the earn-and-pay model such as commercial vehicle finance, small ticket business loans, and personal loans to self-employed customers are vulnerable with volatile cash flows.
They are generally not in a position to clear all dues in one go and so the headline numbers would look elevated.
On the other hand, home loan and salaried personal loans could exhibit a better performance.
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