Coins worth Rs 11 crore go missing from SBI branch, BFSI News, ET BFSI

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JAIPUR: State Bank of India (SBI) officials of Mehandipur Bajalji town in Karauli district were shocked after learning about embezzlement of coins worth Rs 11 crore.

Bank authorities have lodged a case at Todabhim police station and have also asked police to probe the role of bank officials who worked in this branch five years ago.

According to police, complianant Hargovind Meena, manager of Mehandipur Bajalji branch, in an FIR lodged on August 16 said coins worth Rs 13,62,11,275 were deposited according to bank records, but only Rs 1.39 crore were found.

“The embezzlement came to light when the bank management awarded a tender to a private firm for counting the coins on August 10. After this, the manager of the bank intimated higher authorities and later it was decided to lodge an FIR. We have registered an FIR and have initiated an investigation,” said a police officer.

It was also been mentioned in the FIR that about 15 armed miscreants threatened one of the employee of the firm not to count the coins on August 11. “The manager has also demanded an inquiry into the employees working in the bank in the last 5 years,” the officer added.

In the complaint, it was also alleged that the former manager of the bank and other employees had connived in this embezzlement. “We have registered an FIR and an assistant sub-inspector rank officer is been assigned the task to investigate the matter. We will visit the bank and if needed will call upon the former employees,” the officer added.

Police said there are two possibilities in this embezzlement. “Either the coins sent to the firm for counting were less or there might have been the involvement of the firm which was assigned to count the coins. We will probe into every angle of this,” said an officer.



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Indonesia revamps banking rules to spur digital transformations, BFSI News, ET BFSI

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JAKARTA, – Indonesia has revised banking regulations to push lenders to speed their digital transformations, the financial regulator said on Friday, as digital banking booms in Southeast Asia’s largest economy.

The regulations unveiled on Thursday will take effect at the end of October and set out requirements for digital banks, ranging from data protection for customers to employing executives versed in technology.

However, there were no additional rules for digital banks to follow as compared with regular banks, a step the regulator said was intended to speed up digital adoption.

“The pandemic has made digital transformation in the banking sector into an inevitability,” Heru Kristiyana, the top banking supervisor of Indonesia’s Financial Services Authority (OJK), said in a statement.

“The OJK does not dichotomise banks with existing digital services, incumbent banks that have transformed into digital banks, and new, full digital banks. After all, a bank is a bank.”

In a document accompanying the new rules that provided answers to frequently asked questions, the regulator commented on acquisitions of existing banks by tech firms in order to transform them into digital banks.

Such acquisitions will support the regulator’s efforts to drive consolidation in the banking industry, it added.

Investors can also set up a new digital bank from scratch as long as they meet the rules, it said, including a new minimum capital requirement of 10 trillion rupiah ($692.76 million), or more than three times the old figure.

Competition is heating up among Indonesia’s digital banks as stay-at-home orders against the coronavirus pandemic drive more customers to the internet.

Transaction value using banks’ digital channels jumped 53% to 3,411 trillion rupiah ($236 billion) in the year to July, central bank data shows.

The biggest lenders, Bank Central Asia and Bank Rakyat Indonesia, are gearing up to launch digital arms this year, while tech firm Gojek’s Bank Jago and Singapore-based Sea Group‘s SeaBank Indonesia have already launched. ($1=14,435.0000 rupiah) (Reporting by Gayatri Suroyo; Additional reporting by Fanny Potkin; Editing by Clarence Fernandez)



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Report, BFSI News, ET BFSI

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SoftBank Group Corp sold 11.4 million shares of food delivery company DoorDash Inc, marketed via Goldman Sachs Group Inc, a source familiar with the matter said on Thursday.

They were priced at around $182.95 each, a Bloomberg report said, valuing the sale at around $2.2 billion. Shares of DoorDash were last down around 5.3%.

The share sale comes a week after DoorDash, in its quarterly earnings report, predicted a seasonal decline in order rates and new customer addition in the current quarter.

The company had reported a bigger loss in the second quarter than expected as it spent heavily to expand internationally and into a crowded market for grocery during the pandemic.

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Bank of Maharashtra waives loan processing fees under special offer, BFSI News, ET BFSI

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State-owned Bank of Maharashtra (BoM) has announced a slew of offers, including concessional interest rates and a 100 per cent waiver on processing fees on retail loans. The bank under ‘Retail Bonanza-Monsoon Dhamaka’ waived the processing fee for its gold, housing and car loan and the offer is valid till September 30, 2021, BoM said in a statement on Friday.

The bank offers housing and car loans with interest rates starting from 6.90 per cent and 7.30 per cent, respectively.

The retail products are backed by several lucrative features like two free EMIs on regular repayment in the home loan; loan facility up to 90 per cent in the car and housing loans; and no pre-payment/pre-closure/part payment charges etc., it said.

Commenting on the special offer, BoM executive director Hemant Tamta said, “We intend to gift our customers an attractive proposition for availing gold, housing and car loans, who will be benefited from lower rates and waiver of processing fee offer”.

The Pune-based lender has also revamped its gold loan scheme, offering loans up to Rs 20 lakh at a 7.10 per cent interest rate, with zero processing fee up to Rs 1 lakh.

The bank has ‘Gold Loan Point‘, a dedicated counter in its select branches to facilitate gold loans within 15 minutes, it said.

Last month, the country’s largest lender State Bank of India (SBI) had announced waiving processing fees on home loans till August-end.



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Neobanks are crucial for SME, MSE and retail customers., BFSI News, ET BFSI

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Today Neo-banks are disrupting the banking system with their customer-centric digital offerings across retail and Small-to-Medium Enterprise (SME) banking, remittances, money transfers, utility payments and personal finance. They focus on applying design thinking approach to a particular banking area and tailor their products, services and processes in a manner that makes banking simpler and convenient. This has provided a differentiated experience to the end user, resulting in higher client adoption rates.

Globally, top neo-banks have captured the attention of investors, which is reflected in their high valuations. Neo-banks are able to attract funding due to their disruptive capabilities and innovative approach to the way financial services are offered. For example:

  • A U.K.-based neo-bank is now the most valuable fintech firm at ~USD30 billion as of 2021 as it raised USD750+ million for product development and expansion.
  • A U.S.-based startup that delivers mobile banking services (like savings account and VISA debit cards) was valued at USD14+ billion in 2020.
  • An e-commerce giant, a multinational technology company and a multinational financial services corporation are separately eyeing a stake in a neo-bank, which is looking to raise ~USD100+ million. If it does manage to raise the amount, its valuation is likely to jump three times to around USD600+ million.

The global neo-banking market size is expected to reach USD333.4 billion by 2026, a market growth of 47.1 per cent CAGR over the next five years.Countries like the U.S. and Australia have licensed neo-banks, whereas in India, these are not licensed banks. Neo-banks collaborate with commercial banks to provide better adoptable solutions across business segments with the use of technology like open banking APIs, artificial intelligence, machine learning and data science. This dual combination creates value as the neo-bank handles technology and innovation while the licensed bank handles trust, franchise, risk, underwriting and collections. Low-cost operations of neo-banks result in better offerings and promotes business. However, the key value addition that neo-banks provide is a seamless and integrated customer experience while managing their financing and business banking needs. This is done through providing an integrated platform for automated transaction banking, payments, tax compliance, accounting services, investment needs, etc.

Case Study -1 – Building Current Account Balance with SME Focus

A Neo-bank offers a business banking platform over current accounts that helps SMEs automate and run their finances effectively. This platform seeks to integrate banking into an SME’s business workflow through APIs, instant receipts and payments gateway, real time cashflow monitoring, automated accounting and bookkeeping, payroll management, and vendor management. The platform is estimated to process USD10-15 billions in transactions annually with its multiple bank tie-up.

Case Study -2 – Enhance retail customer experience of traditional bank

While attempting to provide better customer experience, traditional banks face challenges of seamlessly integrating different platforms that run processing, card controls, authentication, rewards, etc. A Neo- bank helps such banks by providing a single integrated, modular, cloud-native, mobile first, banking platform that enables financial institutions to provide next-gen banking experiences to customers, thereby increasing customer engagement, retention and revenue. The customer gets a high degree of personalisation through value-added features like faster account opening, simplified money tracking, smart reporting, low cost international payments and money transfers, better interest rates on loans and deposits, globally accessible debit cards, etc. These measures result in higher adoption rates.

In India, banks and neo-banks have struck a collaborative partnership. While banks remain the money custodian, neo-banks are emerging as the crucial data and technology via medium for empowering the customer. However, this can also be seen as a roadblock for the neo-banks as they might never be allowed to operate independently, and the rising number of emerging fintech companies are making the environment highly competitive. Although neo-banks are scaling up their presence, there is a lack of regulations as the 100 per cent digital bank model has not been permitted in India yet.

In summary, as the regulatory landscape evolves, neo-banks can play an important role to address SME, Midsize Enterprise (MSE) and retail individual customer requirements beyond traditional banking in a seamless and integrated environment.

Written By- Sanjay Doshi (Partner and Head – Financial Services Advisory, KPMG in India) and
Amit Wagh ( Partner and Leader – Financial Services Business Consulting, KPMG in India)

DISCLAIMER: The views expressed are solely of the author and ETBFSI.com does not necessarily subscribe to it. ETBFSI.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.



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NPCI global arm ties up with Mashreq Bank for UPI payments in UAE, BFSI News, ET BFSI

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NPCI‘s global arm NPCI International Payments Ltd (NIPL) has partnered with UAE-based Mashreq Bank to provide its mobile-based real-time payment system UPI in the gulf nation. This strategic partnership will be a significant game-changer in the digital payment ecosystem in the UAE, a release said on Friday.

With this tie-up, more than 2 million (20 lakh) Indians travelling to the UAE are expected to benefit from Unified Payments Interface (UPI) enabled mobile applications to pay for their purchases in a shop or merchant establishment across the country.

Developed by National Payments Corporation of India, UPI facilitates inter-bank transactions.

Mashreq said the tie-up is very timely with growing appetite for mobile-based payments and the bank has witnessed 20 per cent month-on-month growth in pick-up rate.

The implementation of UPI also opens a whole new world of opportunities for enterprises in the UAE and allows them to compete with much larger retailers, it said.

The partnership with Mashreq Bank will enable consumers from India to transact seamlessly using NPCI’s world-renowned UPI platform and deliver a seamless user experience, said Ritesh Shukla, Chief Executive Officer, NIPL.

UPI is one of the most successful real-time payments technology globally that offers secure and simple person to person (P2P) and person to merchant (P2M) transactions.

In 2020, UPI allowed transactions worth USD 457 billion, which is equivalent to approximately 15 per cent of India’s GDP.



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Religare Finvest: Lenders likely to give the final approval for debt restructuring soon

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The much-anticipated ₹4,000-crore debt restructuring plan (DRP) of Religare Finvest Limited, the NBFC arm of Religare Enterprises, has moved a step closer towards lenders’ final approval, with two credit rating agencies giving investment grade rating for it.

This has significantly bolstered the chances of DRP getting final approval from the sanctioning committee of the banks led by State Bank of India (SBI), said sources close to the development.

Rating mandatory

For banks to approve any debt restructuring plan, the rating from two rating agencies is mandatory, and both Crisil and CARE have given ‘investment grade’ ratings, it is learnt. Getting a rating is the most important milestone before the plan can be scrutinised by the sanctioning committee of the bank for final approval. SBI’s sanction is expected next week, followed by other banks in the next couple of weeks, they added.

“We are confident of getting RFL lender’s final approval on debt restructuring plan by September and, in fact, RFL is already preparing itself internally to resume lending from next quarter.

“Religare Enterprises also raised necessary funds in July for capital infusion in RFL as part of proposed DRP. Religare is well on course on its growth journey,” said Rashmi Saluja, Managing Director & Chairperson, Religare Finvest, and Executive Chairperson, Religare Enterprise.

On a turnaround path

REL, which is on a turnaround path under new management, had paid back the dues of RFL to the tune of about ₹6,800 crore in last three years after the latter shut down. The balance debt of ₹4,000 crore is now sought to be restructured.

Lenders are expected to realise upfront cash of ₹500 crore whenever the DRP gets implemented. The DRP will also lead to ₹2,000 crore of additional credit line getting sanctioned to RFL.

As part of the DRP, REL is to infuse ₹411-crore capital into equity of RFL and this capital has already been raised by REL. In July, REL raised ₹570 crore through preferential issue of shares to existing shareholders, including Burman family & Ares SSG Capital, and new marquee investors.

Recovery of FD

Meanwhile, sources said that RFL is also committed to the recovery of fixed deposits of ₹750 crore that was parked with Lakshmi Vilas Bank (now DBS Bank). RFL is confident the recovery will happen very soon, they added.

Religare Finvest had a 2018 pending suit against LVB, alleging misappropriation of its fixed deposits of ₹750 crore.

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Shanti Lal Jain appointed MD and CEO of Indian Bank

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Shanti Lal Jain has been appointed Managing Director and Chief Executive Officer of Indian Bank for three years, a Personnel Ministry order issued on Thursday said. Jain is currently Executive Director (ED), Bank of Baroda.

The Appointments Committee of the Cabinet (ACC) has approved the proposal of the Department of Financial Services for appointment of Jain as Managing Director & Chief Executive Officer in lndian Bank for a period of three years with effect from the date of assumption of office on or after September 1, 2021, it said.

Jain’s appointment is extendable based on his performance by upto two years, or till attaining the age of superannuation (i.e.January 31, 2024), the order said.

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PhonePe to use $50 million Tencent funding for overseas acquisition

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PhonePe plans to use the $50 million funding received from Chinese conglomerate Tencent for its overseas acquisition and to support its Singapore office operations, according to a source close to the development. While all PhonePe employees are based in India, the company has a small team in Singapore looking after legal and M&A proceedings, the source added.

Tencent has acquired a minority (1.8 per cent) stake in PhonePe as part of the company’s $700 million funding round which was announced in December 2020. PhonePe has been in talks to acquire content and app discovery platform Indus OS (registered name – OSLabs) for $60 million since May 2021. However, the deal could not be completed because of the objection raised by existing investors, Affle Global and Ventureast. The existing investors value Indus OS at $90 million, while PhonePe had offered to acquire about 90 per cent stake in the company for $60 million. Since then the deal has been in a legal tussle.

“The case is expected to be closed in a few months. Companies had a court hearing a few months back and they both also participated in an extraordinary general meeting (EGM) in July, which was mandated by the Singapore High Court,” the source told BusinessLine. In July 2021, Affle Global claimed to have gotten a favourable ruling from Singapore HC. However, PhonePe refuted the claim at that time and said that no final ruling has come out yet.

“In addition to IndusOS, PhonePe had also acquired MapMyIndia in the past. This acquisition is being used to power the PhonePe store feature which helps users discover nearby stores. It is similar to Google Maps but it is built for the local audience,” the source added.

Synergies

Indus OS has built Indus App Bazaar which has a portfolio of 4 lakh localised Indian apps, making it an Indian alternative to platforms like Google PlayStore and AppStore. PhonePe is looking to integrate the Indus App Bazaar in PhonePe Switch, which hosts m-sites (mobile sites) for a variety of apps like Myntra, Zivame, Grofers, Netmeds etc.

The Indus OS acquisition can potentially strengthen the super app ambitions of PhonePe. Currently, PhonePe has expanded into a majority of verticals encompassing all things money. It allows users to send and receive money, recharge mobile, DTH, data cards, pay at stores, make utility payments, buy gold and make investments. PhonePe forayed into financial services in 2017 with the launch of Gold, which enabled users to buy 24-karat gold on its platform.

Since then, the company has launched several mutual funds and insurance products like tax-saving funds, liquid funds, international travel insurance, and Corona Care, a dedicated insurance product for the Covid-19 pandemic among others. PhonePe also launched its Switch platform in 2018, enabling users to place orders on 600 apps directly from within the PhonePe mobile app. PhonePe claims to be accessible at 20 million merchant outlets across 12,000 towns and 4,000 talukas nationally.

PhonePe is also the market leader in terms of UPI transactions. The NPCI data for the month of July 2021 showed that the company holds about 46% per cent of the market share by transaction volume. Media reports have claimed that PhonePe’s Indian competitor Paytm is also planning to launch its super app by the end of this year.

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Depositors of PMC Bank still await clarity on withdrawals

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Nearly two years since it was placed under directions by the Reserve Bank of India, depositors of Punjab and Maharashtra Cooperative Bank (PMC Bank) continue to face uncertainties over when they will access their savings.

Depositors are waiting for more clarity on when they would withdraw more funds after the DICGC Bill’s passage and want to know how they will be repaid amidst plans for the formation of a small finance bank.

About 1 lakh depositors of PMC Bank are expected to benefit from the amendments to the Deposit Insurance and Credit Guarantee Corporation Act under which account holders will get up to ₹5 lakh within 90 days of the RBI imposing a moratorium on the bank.

Plight of high-value depositors

However, it is estimated that about 43,000 high-value depositors will still be unable to withdraw their full savings, with many of them being senior citizens.

These high-value depositors account for about 85 per cent of the deposits in the bank.

“We believe that the amendment has been passed, but there is not any information on when we can withdraw funds. So, there is no real benefit to account holders at present,” said Revadhar Tiwari, an account holder with PMC Bank.

Many are planning to visit their bank branches to understand when they can withdraw more funds.

According to sources, the issue is also being discussed on Whatsapp groups of PMC Bank depositors, and many have also been raising the question on social media like Twitter.

The issue of full repayment of savings is the main concern.

“Depositors are eager and awaiting the modality of the payments as how the RBI will give them their hard-earned money. We want a clear formula on how the depositors above ₹5 lakh would be paid. We expect that the savings of all the depositors along with the accrued interest will be returned and urge the RBI Governor to announce that each and every retail depositor’s money would be protected,” said Chander Purswani, President, PMC Depositors Forum.

RBI had, on June 18, 2021, granted “in-principle” approval, valid for 120 days, to Centrum Financial Services Ltd to set up a small finance bank. Once the SFB is floated, PMC Bank would be merged into it.

The bank has been under All Inclusive Directions of the RBI from the close of its business on September 23, 2019, which has been extended till December 31, 2021. At present, the deposit withdrawal limit for PMC Bank has been capped at ₹1 lakh.

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