Category: Banking & Finance

Govt extends tenure of 4 public sector banks’ top officials, BFSI News, ET BFSI

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Four state-owned banks on Friday said the government has extended tenures of their top officials, including managing director and chief executive officers (MD and CEOs) of Punjab National Bank and Bank of Maharashtra.

Besides, the government has extended the tenures of executive directors of Punjab National Bank (PNB), Union Bank of India and Central Bank of India.

The government sent notifications to these banks on Thursday, informing them about the extensions given to the top-level officials.

“The Department of Financial Services, Ministry of Finance, vide its notification dated August 26, 2021, has extended the term of office of S S Mallikarjuna Rao, managing director and chief executive officer of the bank (PNB), for a period beyond September 18, 2021,” PNB said in a regulatory filing.

Rao’s current tenure was to come to an end on September 18, 2021, and the extension has been given till the date of his superannuation (January 31, 2022) or until further orders, whichever is earlier, PNB said.

The government has also extended the tenure of Bank of Maharashtra MD and CEO A S Rajeev for two years, the Pune-based lender said in a filing.

Rajeev’s current tenure was coming to an end on December 1, 2021.

In addition to this, two executive directors of PNB, two in Union Bank of India (UBI) and one in Central Bank of India have been given extension beyond their current tenures.

Sanjay Kumar and Vijay Dube, executive directors of PNB, have been given extensions till August 23, 2023 and November 30, 2022, respectively.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India said.



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Govt extends tenure of 4 public sector banks’ top officials, BFSI News, ET BFSI

Banking & Finance

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Four state-owned banks on Friday said the government has extended tenures of their top officials, including managing director and chief executive officers (MD and CEOs) of Punjab National Bank and Bank of Maharashtra.

Besides, the government has extended the tenures of executive directors of Punjab National Bank (PNB), Union Bank of India and Central Bank of India.

The government sent notifications to these banks on Thursday, informing them about the extensions given to the top-level officials.

“The Department of Financial Services, Ministry of Finance, vide its notification dated August 26, 2021, has extended the term of office of S S Mallikarjuna Rao, managing director and chief executive officer of the bank (PNB), for a period beyond September 18, 2021,” PNB said in a regulatory filing.

Rao’s current tenure was to come to an end on September 18, 2021, and the extension has been given till the date of his superannuation (January 31, 2022) or until further orders, whichever is earlier, PNB said.

The government has also extended the tenure of Bank of Maharashtra MD and CEO A S Rajeev for two years, the Pune-based lender said in a filing.

Rajeev’s current tenure was coming to an end on December 1, 2021.

In addition to this, two executive directors of PNB, two in Union Bank of India (UBI) and one in Central Bank of India have been given extension beyond their current tenures.

Sanjay Kumar and Vijay Dube, executive directors of PNB, have been given extensions till August 23, 2023 and November 30, 2022, respectively.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India said.



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10 banks selected to manage LIC IPO, BFSI News, ET BFSI

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The central government has selected 10 investment banks to handle the initial public offering of Life Insurance Corp of India planned for this fiscal year.

They include Goldman Sachs, Citigroup, Kotak Mahindra and SBI Caps, Reuters quoted government sources as saying.

Sixteen banks, including seven global banks and nine domestic bank, were in the race.

Other selected lenders include JM Financial Ltd, Axis Capital, Nomura, BofA Securities, J.P. Morgan India Pvt Ltd, ICICI Securities, according to the report.

In July, the cabinet committee on economic affairs, or CCEA, gave its in-principle approval to list LIC.

A 10% stake sale in the insurer could fetch around Rs 1-1.5 lakh crore as per industry estimates. A ministerial panel, called the Alternative Mechanism on strategic Divestment, is expected to decide soon on the size of the stake to be sold. It could be around 10%, sold in two tranches, the sources said.

“The potential size of the IPO is expected to be far larger than any precedent in Indian markets,” one of the sources said, adding that roadshows would be held in coming months in all major global financial centres to attract investors.

LIC, India’s biggest insurance company with assets of over Rs 34 lakh crore ($461.4 billion), has a subsidiary in Singapore and joint ventures in Bahrain, Kenya, Sri Lanka, Nepal, Saudi Arabia and Bangladesh.

The government is simultaneously pursuing strategic disinvestment in companies such as Air India and BPCL.

The government is also looking to complete at least three public sector disinvestment transactions before rolling out the mega IPO of the national insurer.



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RBI discusses a host of issues with small finance banks, BFSI News, ET BFSI

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The Reserve Bank on Friday discussed with the heads of the small finance banks (SFBs) the stress build-up due to the COVID-19 pandemic and other related issues. The round-table discussion of RBI Deputy Governors M K jain and M Rajeshwar Rao with managing directors and chief exceutives of small finance banks was held through video conference.

The discussion, according to an RBI release, focused on a range of issues including evolution of the business models of SFBs; enhancing board oversight and professionalism; further improvements in assurance functions, compliance; internal control and risk management; and need to build up their IT infrastructure both for enhanced customer experience and for cyber security resilience.

“…the stress build-up due to COVID-19 and the mitigation measures for continued resilience of books of SFBs also formed part of the discussion,” it said.

Challenges and the way forward were also deliberated upon to enable the SFBs to play their role in the Indian financial intermediation space and contribute to financial inclusion, the RBI said.

The deputy governors recognised also the contribution of SFBs towards financial inclusion by extending credit and reaching out to the underserved sections of society.

“Fruitful discussion was held in which the MDs and CEOs shared their experiences and ideas on the need to work together so that stated objective is achieved for which differentiated licences were issued,” the release said.

Other senior RBI officials, including executive directors too participated in the meeting.



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Indo-Nepal Remittance Facility: RBI enhances transaction ceiling 4-fold to ₹2 lakh

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The Reserve Bank of India has made enhancements to the Indo-Nepal Remittance Facility Scheme, whereby the ceiling per transaction has been increased four-fold to ₹2 lakh and the cap of 12 remittances in a year per remitter has been removed.

Theenhancements, which come into effect from October 1, 2021, have been announced to boost trade payments between the two countries, as also to facilitate person-to-person remittances electronically to Nepal, RBI said in a circular to all banks participating in the National Electronic Funds Transfer facility.

Under the scheme, the beneficiary receives funds in Nepalese Rupees through credit to her / his bank account maintained with the subsidiary of State Bank of India (SBI) in Nepal, — Nepal SBI Bank Ltd (NSBL) or through an agency arrangement.

RBI said hitherto, banks shall accept remittances by way of cash from walk-in customers or non-customers. The ceiling of ₹50,000 per remittance with a maximum of 12 remittances in a year shall, however, continue to apply for such remittances.

The central bank asked banks to put in place suitable velocity checks and other risk mitigation procedures.

RBI emphasised that “the enhancements are also expected to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.”

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LIC launches Ananda mobile app for agents, intermediaries

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Life Insurance Corporation of India (LIC) has launched Ananda mobile app.

“Atma Nirbhar Agents New Business Digital Application, the digital paperless solution for new business processes in LIC has now been provided a new dimension with the launch of Ananda mobile app,” LIC said in a statement.

Built on paperless KYC process using Aadhaar based e-authentication of the life proposed, the digital application is a tool for the on boarding process to get the life insurance policy through a paperless module with the help of the agent or intermediary, it further said

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Govt extends tenures of UBI, Central Bank of India’s executive directors, BFSI News, ET BFSI

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Public sector lenders Union Bank of India (UBI) and Central Bank of India on Friday said the government has extended tenures of their executive directors.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended vide a notification dated August 26, the lender said in a regulatory filing.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India added.



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5-year bumper-to-bumper insurance must for new vehicles in TN: Madras HC

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The Madras High Court has directed the Tamil Nadu Transport Secretary to ensure that new motor vehicles sold in the State from September 1 get bumper-to-bumper insurance cover, along with coverage for driver, owner, passengers and third parties, for five years.

Justice S Vaidyanathan, in an order on Wednesday, said it is mandatory for any new vehicle sold after September 1 to have bumper-to-bumper insurance every year, in addition to covering the driver, passengers and owner of the vehicle, for five years.

Thereafter, the owner of the vehicle must safeguard the interest of driver, passengers, third parties and himself or herself to avoid unnecessary liability, as there is no provision to extend the bumper-to-bumper policy beyond five years.

The order comes on an appeal filed by New India Assurance challenging a December 7, 2019, award by the Motor Accident Claims Tribunal, Special District Judge, Erode, directing the appellant/insurance company to pay the claimants ₹14.65 lakh as compensation for the death of Sadayappan alias Dhanapal due to an accident on August 3, 2016. The tribunal awarded the compensation on the grounds that the entire policy conditions had not been produced by the insurance company.

Justice Vaidyanathan said that it is saddening that when a vehicle is sold, the buyer is not clearly informed about the terms of policy and its importance. Similarly, the buyer, too, is not interested in understanding the terms and conditions of the policy, focusing more on the vehicle’s performance. When a buyer is ready to pay a huge amount for the vehicle, it is shocking they are not interested in spending a paltry sum for a policy to safeguard himself or herself and others, the order observed.

The order shall be circulated by the Transport Secretary to all insurance companies and the ‘said Officer’ must ensure it is followed scrupulously.

The matter has been listed for reporting compliance on September 30, the order said.

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PSBs may have to provide for over Rs 21,000 crore annually for family pension revision, BFSI News, ET BFSI

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Public sector banks will have to make an additional provision of over Rs 21,300 crore annually on account of a hike in family pension and higher contribution toward the National Pension System (NPS), according to a report.

A special dispensation will be sought from the Reserve Bank of India (RBI) to allow provisions over the next five years, it said.

The plan

Acknowledging that family pension for bank employees is at a paltry level, the government this week had announced that it would raise the same to 30% of the last drawn salary.

Earlier, kin of a deceased PSB employee used to get a maximum of Rs 9,284 per month as a family pension, said Department of Financial Services Secretary Debasish Panda.

“The cap has been completely removed and a uniform slab of 30% at the last-drawn salary will be entitled as family pension,” Panda told reporters here, admitting that the earlier levels were “paltry”.

NPS hike

Similarly, the ministry has also decided to increase the employer’s contribution to the New Pension Scheme (NPS) to 14% of the salary from the current 10%, he said.

Finance Minister Nirmala Sitharaman expressed her satisfaction at public sector banks’ performance in the past few years and appreciated that many of them have come out of the RBI’s prompt corrective action framework.

Panda said a dozen PSBs have become leaner and started delivering profits which have upped the investor confidence in them and made them self-dependent for capital raising.

He said that since last year, the banks have collectively raised over Rs 69,000 crore, including Rs 10,000 crore in equity, and are in the process of raising another Rs 12,000 crore at present.

As on March 31, the total number of pensioners stood at around 5.66 lakh and family pensioners at over 1.55 lakh.



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Industry welcomes RBI’s move to extend scope of tokenisation to all consumer devices

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Industry associations representing consumer tech startups and payment companies have welcomed RBI’s move to extend the scope of tokenisation from mobile phones and tablets to include all consumer devices (such as laptops, desktops, wearables, and IoTs etc).

This update comes in the background of an RBI norm that prohibits payment gateways and payment aggregators from storing customer card details. The central bank has given a deadline of January 2022 for stakeholders to comply with this norm and has worried consumer tech start-ups about its impact on consumer’s ease of payments.

Commenting on the new RBI update, IndiaTech, which is an industry association of Indian start-ups including Ola, hike, Makemytrip, and Nykaa among others, welcome the extension of tokenisation to all consumer devices.

However, Rameesh Kailasam, CEO of IndiaTech added that there will continue to be challenges should banks not extend timely support. “Such a regulation should be made mandatory for all banks, it should not be optional as is the case presently. Device tokenization does not support recurring use cases, while COF (card on file) tokens, if allowed, provides strong “merchant cardholder binding” security. Banks should ideally be mandated to do COF tokens. We also look forward to PCI DSS Level 1 (Payment Card Industry Data Security Standard) certified entities being allowed to store card data,” he said.

Further, Vishwas Patel, Chairman of Payment Council of India (PCI), which represents payment companies in India said “we welcome this initiative as facilitation in payments will have to be medium agnostic to enhance customer experience. RBI after due review has permitted this customer experience enhancing measure.”

PCI claims to be closely working with RBI on charting a roadmap of the possible solutions that would not require the industry to enter their card details every time they want to make an online purchase. PCI added that these solutions will adhere to the security checks, controls and frameworks prescribed by RBI.

The central bank’s motive to bring these rules was to guard customer data against the frequent data breach cases in tech companies. Cybercrime cases in India have grown exponentially since the pandemic. As per the data shared by Union minister of State for Home G Kishan Reddy with the Lok Sabha in March, between August 30, 2019 and February 28, 2021, 3.17 lakh cybercrime incidents were registered on National Cyber Crime Reporting Portal in India.

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