Author: root

Sebi relaxes minimum promoter lock-in norm for Ujjivan SFB, Ujjivan Fin Services for amalgamation, BFSI News, ET BFSI

Banking & Finance

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Markets regulator Sebi has provided relaxation with regard to the minimum promoter lock-in norm to Ujjivan Small Finance Bank (SFB) and its promoter Ujjivan Financial Services, for the purpose of their amalgamation. On October 30, the bank had approved the scheme of amalgamation between Ujjivan Financial Services (transferor company) and Ujjivan SFB (transferee company).

Following this, it had submitted a joint application on behalf of the transferor/promoter to Sebi, seeking relaxation of the three-year minimum promoter lock-in requirements.

Besides, it also sought approval to adopt the proposed scheme of amalgamation as a method to achieve the minimum public shareholding.

“…we hereby inform you that the Sebi, vide its letter dated December 2, 2021, has acceded to our request to relax the three-year minimum promoter lock-in requirements,” it said in a regulatory filing.

The exemption is subject to no-objection certificate (NOC) from the exchanges and final approval by the National Company Law Tribunal (NCLT).

“The exemption being granted from lock-in is only for the period commencing after approval of the proposed scheme of amalgamation by NCLT and till expiry of the lock-in period,” it said citing the Sebi letter.

However, the Sebi specified that the relaxation is granted to them for the “specific purpose of scheme of amalgamation” between Ujjivan Financial Services and Ujjivan SFB and “shall not be treated as a precedence”.

Further, as advised by Sebi, the bank will initiate necessary steps to ensure compliance with minimum public shareholding requirements through mode specified under Sebi circular dated February 22, 2018, it added.

Currently, Ujjivan Financial Services holds 83.32 per cent of the equity shareholding and 100 per cent of preference shareholding of Ujjivan SFB.

As per the minimum shareholding norms, the promoter’s minimum initial contribution in the SFB arm should be at least 40 per cent. If the promoter’s initial shareholding in the SFB is in excess of 40 per cent, it is to be brought down to 40 per cent within a period of five years from the date of commencement of operations of SFB.

This period of five years is expiring on January 31, 2022.



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RBI moots easier rules for investing overseas, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India (RBI) is batting for easier overseas investment norms for Indian tech entrepreneurs and angel investors, said people with direct knowledge of the matter. As per the current rules, if an Indian resident buys shares in an unlisted company abroad, the foreign company cannot create any more step-down subsidiaries. This has proved to be a hindrance for Indian entrepreneurs looking to invest in foreign startups since it restricts the scalability of such companies.
Now, the RBI has learnt to have given a recommendation to the finance ministry, saying if such step-down subsidiaries are being opened as part of genuine and ‘bona fide’ expansion plans of a company, the restriction should not be applied.

Consultations with Industry
Emails sent to the RBI and the finance ministry remained unanswered until press time.
“Indian tech entrepreneurs are constantly looking for acquisition opportunities especially in the other developing countries; however, current rules make it very difficult to make such investments,” said a person cited above. “These investments have potential to bring dollar money back into India if the business venture succeeds.”

The RBI has held extensive consultations with the industry and the recommendations are based on inputs so received, said people cited above. Overseas investments by Indian residents fall under the ambit of the Liberalised Remittance Scheme. “A natural outcome of growth is expansion and hence it is extremely important that the step-down subsidiaries restriction be reconsidered,” said Moin Ladha, partner, Khaitan & Co. “This will enable Indian investors to get the advantages associated with such diversification.”

Indian owns less than 10% equity in the company. Portfolio investments enjoy liberal rules since they are meant for investment purposes only.

Currently, if an Indian buys shares of an unlisted foreign company, the company is presumed to be a joint venture. For instance, say an Indian ‘A’ buys a few shares of ByteDance – the parent of TikTok and an unlisted startup. Indian regulators presume that ByteDance is a JV where ‘A’ exerts some sort of control. Accordingly, ‘A’ is required to meet the steep compliance norms under the RBI rules.

In contrast, if ‘A’ had invested in shares of a foreign listed company, say Microsoft, it would have been considered a portfolio investment and would have been exempt from the compliance norms.

“It is impractical for a minority shareholder to be able to procure information or influence decisions of an overseas entity where they hold investment,” said a person with direct knowledge of the matter. “However, the current regime treat seven a minority investment as setting up or acquiring a joint venture abroad.”

The industry is also learnt to have requested the RBI to reconsider several more regulations. Most important of them all was a request to increase the cap on the LRS route. Currently under LRS, an Indian can remit a maximum of $250,000per financial year. The industry suggested the same to be hiked to at least $350,000. However, the RBI has so far not actedon the input, people cited above said.

Until a few years ago, outward remittance rules used to be the policy domain of RBI under the Foreign Exchange and Management Act (Fema). In other words, RBI could tweak the rules on its own. However, in 2019 the Centre replaced the rules is in the hands of the finance ministry. The RBI has been assigned the role of administering the implementation of NDI rules.



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SC refuses to entertain bail plea of Rakesh Wadhawan, asks him to approach HC, BFSI News, ET BFSI

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New Delhi, The Supreme Court Friday refused to entertain the bail plea filed on health grounds by jailed businessman Rakesh Wadhawan, accused of money laundering in the multi-crore rupees Punjab and Maharashtra Co-operative (PMC) Bank fraud case, saying that he has been in hospital more than the jail. A bench comprising Chief Justice N V Ramana and Justices Surya Kant and Hima Kohli permitted senior advocate Mukul Rohatgi, appearing for Wadhawan, to withdraw the bail plea to approach the high court.

Rohatgi referred to the medical condition of the accused and said that he has been in jail for quite some time.

“I see, he has been in hospital more than in jail. Go to the high court,” the bench said prompting Rohatgi to say that it was the high court which refused the bail.

“File after some time. Not now. Alright permitted to withdraw to approach the high court,” the bench said.

The Bombay High Court on October 14 had refused to grant bail to Wadhawan.

Wadhawan, founder of Housing Development Infrastructure Limited (HDIL), was arrested by the Enforcement Directorate in 2019 in the case.

The high court had said that Wadhawan’s submission that he was immediately required to be released on temporary bail on medical grounds, was “not justified”.

It had said that denial of medical bail was in no way a breach of Wadhawan’s fundamental right to life since he had been provided adequate medical treatment by the state prison authorities whenever required.

Wadhawan, who had undergone a surgery for pacemaker implantation, had sought that he be released on bail so that he can seek discharge from the civic-run KEM Hospital in the city, where he is recuperating while in judicial custody, and shift to a private hospital while out on bail.

He had said in his plea that he suffered from severe comorbidities, that his immune system had been compromised after having contracted COVID-19 recently, and that he was susceptible to contracting infections and ailments while at the civic hospital due to the heavy footfall the hospital received.

He had also said that the KEM Hospital did not have an ICU facility specifically meant for those suffering from cardiac issues.

The fraud at PMC Bank came to light in September 2019 after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt Housing Development and Infrastructure Limited (HDIL).

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

Mumbai Police’s Economic Offences Wing and the ED had registered offences against senior bank officials and HDIL promoters.



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Reserve Bank of India – Tenders

Tenders

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GM(O-I-C), Reserve Bank of India, Ranchi invites e-Tender through MSTC Portal for Supply, Installation, Testing & Commissioning of 200 KVA Diesel Generator Set with AMF Panel and Acoustic Enclosure for Bank’s Additional Office Premises Located at Zila Parishad Bhavan, Ranchi. The e-Tender along with the detailed tender notice will be available on MSTC website ‘https://www.mstcecommerce.com/eprochome/rbi’ and on the Bank’s website https://www.rbi.org.in under the menu “Tenders” on December 07, 2021, 12:00 noon onwards.

2. All the interested bidders must register themselves with MSTC Portal through the above referred website to participate in the e-Tendering process.

3. The estimated cost of the work is ₹26,32,500 (approx. including GST), however the actual amount may vary.

4. The schedule for the e-Tendering process is as under:

Sl. No. Activity Tentative date
1. Date of Press-Web Advertisements and the Date of intimation for the publication of Tender notice in the next issue of India Trade Journal December 03, 2021
2. e-Tender No. : RBI/Ranchi/Estate/223/21-22/ET/297
3. Name of the Work: Supply, Installation, Testing & Commissioning of 200 KVA Diesel Generator Set with AMF Panel and Acoustic Enclosure for Bank’s Additional Office Premises Located at Zila Parishad Bhavan, Ranchi.
4. Mode of Tender: e-Procurement System, Online (Part I – Techno-Commercial Bid and Part II – Financial Bid) through the website https://www.mstcecommerce.com/eprochome/rbi
5. Date & time from which NIT (along with complete tender documents) will be available to the parties to download at website
https://www.mstcecommerce.com/eprochome/rbi : 		December 07, 2021, 12:00 noon onwards.
6. Date and venue of the Pre-Bid Meeting (offline) December 17, 2021 at 11:00 hrs.
Venue: – Estate Dept., Reserve Bank of India, R.R.D.A Building 4th Floor, Kutchery Chowk, Ranchi (Jharkhand)-834001.
7. Estimated cost of the work: ₹26,32,500/- (Rupees twenty-six lakh thirty-two thousand five hundred only) including GST.
8. Earnest Money Deposit (EMD): EMD of ₹52,650/- (Rupees fifty-two thousand six hundred and fifty only) shall be paid through NEFT, details of NEFT: Beneficiary name: Reserve Bank of India, Ranchi; IFSC: RBIS0RNPA01 (Numeric Zero at 5th and 10th place from left); A/c no.- 186003001. Proof of remittance with transaction number (scanned copy) shall be attached / uploaded. The bidders are also advised to send the proof of remittance with transaction details (scanned copy) to estateranchi@rbi.org.in before 14:00 hrs. on January 05, 2022. Please mention your company name in NEFT transaction remarks.
or
EMD shall be deposited in the form of an irrevocable Bank Guarantee issued by a scheduled bank in the Bank’s standard proforma which is available in the e-Tender form, needs to be submitted in person to Estate Dept. Reserve Bank of India, R.R.D.A Building, 4th Floor, Kutchery Chowk, Ranchi (Jharkhand)- 834001 before 14:00 hrs. on January 05, 2022.
9. Last date of submission of DD/ Bank Guarantee for EMD: Till 14:00 hrs., January 05, 2022.
10. Performance Bank Guarantee (PBG): 10% of Contract amount.
11. Time allowed for completion of the work which shall be reckoned from the 14th day of issue of the letter of acceptance of tender: 90 Days.
12. Bidding start date of Techno-commercial Bid and Financial Bid at https://www.mstcecommerce.com/eprochome/rbi : 11:00 hrs. onwards, December 27, 2021.
13. Date of closing of online e-Tender for submission of Techno-commercial Bid and Financial Bid: Till 14:00 hrs., January 05, 2022.
14. Date & Time of opening of Part-I (i.e., Techno-Commercial Bid): 15:00 hrs., January 05, 2022.
15. Date & Time of opening of Part- II (i.e., Financial Bid): Will be communicated to all the eligible bidders/contractors.
16. Transaction fees: Charges for participation in e-procurement will be made to M/s MSTC Ltd. through MSTC Gateway/NEFT/RTGS in favor of MSTC Limited or as advised by M/s MSTC Ltd.
17. Tender fees for download from portal: Nil.

5. The part II (price bid) of such bidders/contractors who are found eligible after scrutiny of their Part I of the tenders, will be opened on a subsequent working day which will be intimated to all the eligible bidders/contractors. The Bank reserves the right to accept or reject any or all e-tenders without assigning any reasons therefor.

Note: All the tenderers may please note that any addendum / corrigendum to the e-tender, if issued in future, will only be notified on the Bank’s website and MSTC Website as given above and will not be published in the newspaper.

GM(O-I-C)
Ranchi

December 03, 2021

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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) 579,220.84 3.26 1.00-5.20
     I. Call Money 8,849.76 3.26 2.20-3.50
     II. Triparty Repo 438,779.40 3.25 3.05-3.40
     III. Market Repo 131,546.68 3.29 1.00-3.50
     IV. Repo in Corporate Bond 45.00 5.20 5.20-5.20
B. Term Segment      
     I. Notice Money** 440.84 3.25 2.50-3.40
     II. Term Money@@ 83.00 – 3.20-3.65
     III. Triparty Repo 1,280.00 3.31 3.30-3.35
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 3,035.00 3.53 3.50-6.20
  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 Thu, 02/12/2021 1 Fri, 03/12/2021 268,334.00 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 Thu, 02/12/2021 1 Fri, 03/12/2021 100.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -268,234.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo          
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Thu, 18/11/2021 15 Fri, 03/12/2021 445,742.00 3.99
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo Tue, 30/11/2021 7 Tue, 07/12/2021 200,011.00 3.98
  Tue, 30/11/2021 28 Tue, 28/12/2021 50,005.00 3.97
3. MSF          
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
  Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00
  Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00
  Mon, 27/09/2021 1095 Thu, 26/09/2024 600.00 4.00
  Mon, 04/10/2021 1095 Thu, 03/10/2024 350.00 4.00
  Mon, 15/11/2021 1095 Thu, 14/11/2024 250.00 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
Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00
Mon, 15/11/2021 1095 Thu, 14/11/2024 105.00 4.00
Mon, 22/11/2021 1095 Thu, 21/11/2024 100.00 4.00
Mon, 29/11/2021 1095 Thu, 28/11/2024 305.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       20,001.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -589,354.2  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -857,588.2  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 02/12/2021 630,649.09  
     (ii) Average daily cash reserve requirement for the fortnight ending 03/12/2021 650,308.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 02/12/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 05/11/2021 1,123,716.00  
@ 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, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 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 and Press Release No. 2021-2022/1023 dated October 11, 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 (Communications)
Press Release: 2021-2022/1299

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3 IT Stocks To Buy For A Potential Upside of 16% Suggests IIFL Securities

Personal Finance

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Tech Mahindra Ltd

According to the brokerage, from its current market price of Rs. 1570-1620 the stock may hit a target price of Rs. 1850 in 1 year which results in a decent gain of 16%. The brokerage in its research report has said that “TechM has delivered broad-based growth in 1HFY22 and sees the momentum in its focus verticals continuing. 5G has started contributing meaningfully to its top line, with annualised revenue run rate of US$500mn in 2QFY22. Given the strong order book, pick up in hiring and focus on client mining, we forecast TECHM’s USD revenues to clock 14% CAGR over FY21-24ii. TechM has won over US$3bn of net new deals in the last 12 months, driven by its strategic focus on proactive deals, collaborative deals and dedicated squads. Management expects the deal momentum to continue going forward. Its success in large-deal wins over the last three quarters is visible in the quarterly average deal wins increasing by 3x in 1HFY22 vs. FY18.”

According to the brokerage’s call “TechM has restructured its large-deal team which has led to a 3x increase in the average quarterly deal-win TCV since FY18. TECHM is improving operational metrics like utilisation, offshoring and employee pyramid rationalisation, along with improving portfolio companies’ margins, have led to 360bps EBIT margin improvement from FY20 to 2QFY22. Management is confident of exceeding its FY22 guidance of double-digit organic revenue growth and sees room for further margin improvement. Thus, we recommend a buy with a target of Rs. 1,850 for a 12-month period.”

Persistent System Ltd.

Persistent System Ltd.

According to the brokerage, the stock may achieve a target price of Rs. 5,058 in a year, representing a 16 percent rise from its current market price of Rs. 4,320-4400. IIFL Securities in its research report has said that “Persistent Systems (PSYS) overall revenues were aided by continued strength in the Services segment (+10.1% QoQ), while the IP-led revenues rebounded (+4.2% QoQ). Among verticals, BFSI (+8.9%) and Healthcare (+13%) showed strong growth, helped by deal ramp-ups. Within geographies, Europe was soft due to the holiday season. We now forecast PSYS to deliver 29% Cagr in FY21-23ii (industry-leading), on strong deal ramp-ups. The company’s 2Q margins at 13.9% (-20bps QoQ) were above IIFL estimates (13.4%) despite full impact of wage hikes (~230bps) during the quarter. We forecast EBIT margins to expand by 290bps over FY21-24ii, driven by levers like pyramid rationalisation, lower sub-con costs and optimising IP margins.”

The brokerage has also claimed that “PSYS’ 2QFY22 revenue of USD182m grew a robust 9.3% QoQ (+34% YoY), above IIFL expectations of 8.2% QoQ growth. The Services unit delivered strong sequential growth of 10.1% QoQ (+40% YoY). Growth was likely aided by ramp-up of deals won earlier. The IP-led unit rebounded, to grow at 4.2% QoQ and 3.2% YoY, after two-quarters of decline. Among verticals, BFSI saw robust sequential growth of 8.9% QoQ (+28.9% YoY) on the back of 11.7% QoQ growth in 1Q; Healthcare too saw growth, of a staggering 13% QoQ (+47.1% YoY), on the back of 15.9% QoQ growth in 1Q. Tech & Emerging vertical grew 7.9% QoQ (+32% YoY). EBIT margins stood at 13.9% (-20bps QoQ), above IIFL expectations of 13.4%, despite the full impact of wage hikes during the quarter (~230bps).”

According to the brokerage’s call “In the past 4 quarters, PSYS has won deals worth 150% of FY21 revenues, executable in the next 12 months. Its headcount also grew, by 47% YoY in 2Q, and is a key leading indicator of growth for the coming 12 months. A combination of improved revenue visibility (29% Cagr in FY21-23ii) and steady margin improvement over the next two years will drive 39% EPS Cagr over FY21-23ii. Our EPS for FY23ii-24ii rises by up to 7%, on higher revenues, while getting cut by 4% for FY22ii, to incorporate the recently-announced acquisitions and ESOP plan. Hence, our 12-mth TP rises to Rs5,058 based on 35x 2YF P/E (unchanged). We continue to believe that PSYS has the highest potential for earnings upgrades, even though we are 5-13% above Bloomberg consensus EPS for FY22ii-24ii. PSYS remains our top pick in the mid-cap space, with further scope for rerating.”

MindTree (MTCL)

MindTree (MTCL)

The stock potentially hit a target price of Rs. 5,140 in a year, a rise of 16 percent from its current market price of Rs. 4,400-4,460, according to the brokerage. IIFL Securities in its research report has said that “MTCL’s revenue growth QoQ was led by Retail (+29.6%) and Travel (+14.4%); BFSI saw further uptick (+8.4%), while Tech grew 5.6% QoQ despite flat growth in the top client. The top 2-10 and non-top-10 clients grew at 16-18% QoQ, demonstrating the breadth of growth in the client buckets. Deal wins of US$360mn were healthy, with TTM book-to-bill ratio at 1.27x, giving reasonable visibility on growth despite a fairly strong 1H delivery. 2QFY22 EBIT margin stood at 18.2%, (+50bps QoQ), above IIFL estimate of 17%. EBITDA margin expanded 20bps QoQ. Margins saw tailwinds from strong revenue growth and operational efficiencies of 190bps, partially offset by headwinds of 140BPS from wage hikes and of 30bps from cross currency. Pricing for the quarter remained stable. Offshore effort mix further increased by 150bps QoQ to 85%, while utilisation was stable at 82.9% (-30bps QoQ). Headcount addition was again strong, at 2.5k net employee addition (+9% QoQ).”

According to the brokerage’s call “MTCL’s deal wins are improving and there is a sharp recovery in the top clients too now, driven by a rebound in their consumer facing verticals. Margin execution has been strong, despite strong hiring. The stock trades at 36x FY23ii P/E, at a premium to mid-cap peers but with a strong FY22 outlook. We maintain BUY with a target of Rs. 5,140 as we still expect the earnings upgrade to continue in the near term.”

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of IIFL Securities Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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RBL Bank Revises Interest Rates On Savings Account: Now Get Up To 6%

Personal Finance

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Investment

oi-Vipul Das

|

RBL Bank, one of India’s leading private sector banks has revised its interest rates on savings accounts. According to the bank’s official website, the new rates are in force from December 1, 2021, and savings account holders will now be eligible for interest rates of up to 6%. Apart from higher interest rates, RBL Bank provides a variety of benefits to its savings account customers, which include online banking, a virtual debit card for online shopping, bill payments, and more, 24*7 fund transfer facility via UPI, NEFT, IMPS, RTGS, no charges for non-maintenance of balances, and much more.

RBL Bank Revises Interest Rates On Savings Account: Now Get Up To 6%

RBL Bank Savings Account Interest Rates

With effect from December 1, 2021, the following interest rates on Savings Deposits (including NRE/NRO Savings) are in force.

Daily Balance Rate of Interest (p.a.) effective till November 30, 2021 Rate of Interest (p.a.) w.e.f. December 01, 2021
Upto Rs. 1 lakh 4.25% 4.25%
Above Rs. 1 lakh upto Rs. 10 lakh 5.75% 5.50%
Above Rs. 10 lakh and upto Rs. 3 Crore 6.00% 6.00%
Above Rs. 3 Crore upto Rs. 5 Crore 6.00% 6.00%
Source: Bank Website

RBL Bank Current Account & Saving Account Charges

The following changes to the Schedule of Charges for RBL Bank Savings Accounts (SA) and Current Accounts (CA) are in force from July 1, 2021.

Sr No Type Of Charges Account Type Present Structure Proposed Structure
1 Average Monthly Balance Special Institutions Account – Current and Savings Rs. 10,000 Rs. 50,000
2 Non-Maintenance Charges Special Institutions Account – Savings If Balance maintained is >50% then 5% of balance shortfall If Balance maintained is >50% then 5% of balance shortfall
If Balance maintained is If Balance maintained is
Maximum Rs. 500 per month Maximum Rs. 750 per month
3 Non-Maintenance Charges Special Institutions Account – Current If AMB is If AMB is
Balance If AMB is > 50% – Rs.100 If AMB is > 50% – Rs 500
All charges are exclusive of GST. Source: Bank Website

Story first published: Friday, December 3, 2021, 13:02 [IST]



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Time to convert fintech initiatives into revolution: PM Modi

Banking & Finance

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Prime Minister Narendra Modi on Friday urged the fintech industry in India to convert their Fintech initiatives into a Fintech revolution.

“Now it is time to convert these Fintech initiatives into a Fintech revolution. A revolution that helps to achieve financial empowerment of every single citizen of the country”, Modi said after virtually inaugurating the InFinity Forum, a leadership forum on Financial Technology, jointly hosted by the Gift City regulator IFSCA and Bloomberg.

Modi highlighted that the Fintech industry in India is already innovating to enhance access to finance and the formal credit system to every person in the country.

He also said that technology is making a big shift in finance, and mobile payments last year exceeded ATM cash withdrawals for the first time. Without any physical branch offices, fully digital banks are already a reality, and may become commonplace in less than a decade, Modi added.

The two-day summit will see participation from more than 70 nations, while Indonesia, South Africa and the United Kingdom are partner countries.

This InFinity Forum has brought together the leading minds of the world in business and technology to discuss how technology and innovation can be leveraged by the Fintech industry for inclusive growth and serving humanity at large.

Modi said that India has proved that it is second to none when it comes to adopting technology or innovating around it.

Issues that need attention

While noting that common Indian has shown immense trust in the Indian Fintech ecosystem by embracing digital payments and such technologies, Modi highlighted that this trust is a responsibility. “ Trust means that you need to ensure that the interest of people are secured. Fintech innovation will be incomplete without fintech security innovation”, he said.

Gift City

On Gift City in Gujarat, Modi said that it is not merely a premise, it represents the promise of India’s democratic values, demand, demography and diversity. “ It represents India’s openness to ideas, innovation and investment. Gift City is a gateway to the global Fintech world. IFSC at Gift City was born out of the vision that finance combined with technology would be an important part of India’s future development. Our aim is to provide the best international financial services not just for India but for the world”, Modi said.

Prime Minister said that finance is the lifeblood of an economy, and technology is its carrier. Both are equally important for achieving “Antyodaya and Sarvodaya”.

He said that the flagship infinity forum is part of the endeavour to bring together all key stakeholders of the global Fintech industry to explore the limitless future of the industry.

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“BUY” This Large Cap CDGS Stock With A Target Price of Rs. 2,370 Says Sharekhan

Personal Finance

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The brokerage’s take on Bata India Ltd.

According to Sharekhan “Bata India Limited (Bata) witnessed a consistent increase in footfalls across retail outlets and growth in sales through e-Commerce platforms in Q2FY2022 with business recovering to 95% of pre-COVID levels. The company expects sales to further improve on the backdrop of the ongoing festive season with cautious optimism. However, the likely emergence of third wave of COVID-19 would be a risk to the recovery in the near term. With strategic levers in place. The company has identified certain strategic levers, which will help the company achieve growth in FY2022 and thereon. The levers include maintaining a relevant portfolio, network expansion, becoming an aspirational brand for the youth, increasing digital footprint, creating an efficient supply chain, and bringing costs under control. Bata aims to focus on all these levers along with the right technology, process and talent, and responsibility towards the stakeholders of the company.”

The brokerage has also claimed in its research report that “Bata’s revenue is expected to deliver 29% CAGR over FY2021-24 to Rs. 3,655 crore on the back of its strategic levers supported by the network expansion strategy undertaken by the company. With cost efficiencies in place coupled with a better revenue mix. With cost efficiencies in place coupled with a better revenue mix, operating profit is expected to report 88% CAGR over FY2021-24 to Rs. 1,067 crore and OPM is expected to increase to 29.2% from 9.4% in FY2021. The company is expected to register a net profit of over Rs. 500 crore as against a loss reported in FY2021. ROE/ROCE to significantly improve to 22%/14% by FY2024.”

Buy Bata India Limited with a target price of Rs. 2,370

Buy Bata India Limited with a target price of Rs. 2,370

According to the brokerage’s research report “The company aims to build a portfolio focusing on casualisation. Bata launched 240 new lines across clusters in Q2FY2022, with a focus on an enhanced casual portfolio including Floatz and renewed range of North Star. The company also introduced Sneaker Studio as a pilot project in select stores, providing customers with a collection of nine brands under one roof. The company plans to expand the studios eventually. Casuals portfolio contributed 30% to the pre-COVID revenue and has risen to 40% currently.”

According to the brokerage’s call “Post the easing of the lockdown, Bata has started witnessing growth in footfalls in its stores. Improvement in mobility in the coming quarter augurs well for a faster recovery. Bata is focusing on expanding its presence through the e-Commerce/omni-channels and innovation in its product portfolio with new relevant variants to drive growth in the medium to long term. Under new leadership, growth is expected to improve with revamped strategies, backed by a strong liquidity position. The stock currently trades at 52.5x/45x its FY2023E/FY2024E EPS and 22.8x/19.6x its FY2023E/FY2024E EV/EBIDTA. We maintain Buy on the stock with an unchanged price target (PT) of Rs. 2,370. The emergence of third-wave and frequent lockdowns will impact the recovery momentum and will act as a key risk to our earnings estimates.

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of Sharekhan Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.



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Canara Bank raises ₹1,500 crore via AT1 bonds

Banking & Finance

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Public sector lender Canara Bank has mobilised ₹1,500 crore in Basel III-Compliant Additional Tier 1 (AT1) bonds Series II, at a coupon rate of 8.05% per annum.

The issue received an overwhelming response from investors, with bids for more than ₹4,699 crore against a base issue size of ₹500 crore. Based on the response, the Bank has decided to accept ₹1,500 crore at a coupon rate of 8.05% per annum, according to a statement.

The AT1 instrument is perpetual in nature. However, the issuer can call back after five years or any anniversary date thereafter.

The Bank’s AT1 bonds are rated AA+ by CRISIL and India Ratings & Research Ltd.

This is the Second AT1 bond issuance of the Bank post the new SEBI regulations, During October 2021 bank has raised Basel III Compliant Additional Tier I bonds of ₹1,500 crore.

The Bank’s CRAR stood at 14.37% as of September 30, 2021 as compared to 12.77% as of September 30, 2020. The Bank had raised QIP to the tune of ₹2,500 crore during Q2FY22.

Canara Bank had indicated that its capital raising plans for FY22 included ₹4,000 crore via AT1 bonds and ₹2,500 crore in Tier 2 bonds.

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