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The penalty on Janalaxmi Co-operative Bank has been imposed for non-compliance with directions issued by RBI on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks’ and ‘Membership of Credit Information Companies (CICs)’.
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The sale of assets to ARCs, banks, non-banking finance companies and financial institutions will be on ‘as is where is and as is what is basis’ and without recourse basis to IDBI Bank.
IDBI Bank has invited bids from non-banking finance companies, asset reconstruction companies (ARC), banks and financial institutions to sell non-performing assets (NPAs) of Sew Infrastructure by August 20. The company owes Rs 80.53 crore to IDBI Bank and the reserve price for the NPAs has been set at Rs 25 crore by the lender.
Interested bidders have to submit their expressions of interest by August 5 and complete the due diligence exercise by August 19. Submission of bids has to be completed by 3 pm on August 20, while opening of bids will take place at 5 pm on the same day. The sale of assets to ARCs, banks, non-banking finance companies and financial institutions will be on ‘as is where is and as is what is basis’ and without recourse basis to IDBI Bank.
Hyderabad-based SEW Infrastructure offers services to civil engineering construction projects, such as tunnels, power transmission, public health engineering, commercial buildings, property development, dams, barrages, industrial structures and ports.
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Through this partnership, SBI General will provide a bouquet of non-life insurance solutions to SahiPay customers, the insurer said in a release.
The tie-up is a right fit to support the company’s endeavour to maximise its reach to rural segments, Pushan Mahapatra, President – Strategic Investments & Head – Open Market, SBI General Insurance said.
SBI General is continuously strengthening its distribution footprints in the country, and this tie-up is a step in that direction, the insurer said.
“SBI General Insurance will help us provide comprehensive and accessible set of insurance offerings to our customers,” Kamaljeet Rastogi, CEO, Manipal Business Solutions said.
India is predominantly rural with over 65 per cent of the population residing in rural areas and to make the rural population aware about the benefits of insurance, affordable and technology based products that provide adequate cover are required, he said. PTI KPM MR MR
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Operations of thousands of small businesses across the country were disrupted after their current accounts were closed on Monday, as banks rushed to comply with the Reserve Bank of India’s directive on the opening of such accounts by borrowers aimed at preventing diversion of funds.
As per the RBI’s directive issued in August 2020, no bank can open current accounts for customers who have availed of credit facilities in the form of cash credit (CC)/overdraft (OD) from the banking system. While the central bank had given banks time until end-July to implement the new rules, many account holders were caught unaware.
Rajiv Podar, President of IMC Chamber of Commerce & Industry, said borrowers across corporate as well as non-corporate structures did not receive any intimation from the banks and were surprised to find all the current accounts frozen, leading to complete operational disruption.
“For example, project accounts are frozen, plant-wise current accounts are frozen, banks have withdrawn current account products without any intimation, which is against the spirit of banking. How will the companies pay salaries in August and even all other statutory dues?,” Podar asked.
Besides maintaining a cash credit/overdraft account with the lead bank in the consortium of banks, businesses with pan-India operations also have relationships with other banks with either a strong presence in specific geographical locations or offering superior product and service capabilities or both. But concerned about the diversion of funds by borrowers via accounts outside the consortium, the RBI had imposed restrictions on the opening of CC/OD accounts by borrowers.
Banks are now forcing companies to route all their transactions only through the bank which had extended cash credit and overdraft facilities. While MSMEs are allowed to open as many current accounts as possible for receiving credits, all debits have to happen only through the bank which has an exposure of over 10 per cent of the borrower.
Chandrakant Salunkhe, President, SME Chamber of India, said many small units are struggling to meet their payment commitments even after having the required money in the bank as their accounts are frozen and attempt to release the funds would take 15 days to one month.
Meanwhile, the RBI, on Monday, took stock of the compliance status of banks with its directive. Banks are believed to have largely complied with the RBI’s directive.
To alleviate the suffering of borrowers, Podar sought a breather of six months for implementing the guidelines in a modified manner, with proper guidelines to banks and clients.
“Lead banks should be allowed to hold multiple shadow current accounts to meet borrower requirements such as salary, contract-specific, location-specific, purpose-specific, etc. Each shadow account shall have a unique number and a standalone bank statement,” the IMC President said.
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Salem-headquartered Tamil Nadu Grama Bank, regional rural bank sponsored by Indian Bank, has reported a net profit of ₹185 crore for the year ended March 31, 2021 when compared with ₹150 crore in FY20, registering a growth of 23 per cent.
Interest income of the bank, which is now an amalgamated entity of Pallavan Grama Bank and Pandyan Grama Bank, was higher at ₹1,544.88 crore when compared with ₹1,434.30 crore in FY20. Total income of the bank stood at ₹1,824.37 crore (₹1,713.33 crore). Provisions and contingencies were lower at ₹278.25 crore (₹288.80 crore). Total expenditure stood at ₹1,639.86 crore (₹1,563.71 crore).
“Even in this adverse pandemic situation, the bank booked an operating profit of ₹462.76 crore, which is an increase of 5.55% over previous year, according to a statement.
Total business of the bank grew by ₹5,829.36 crore to ₹30,578.05 crore for FY21. Deposits stood at ₹14,858.82 crore and gross advances were at ₹15,719.23 crore when compared with ₹12,463,38 and ₹11,749.18 crore respectively in FY20.
CRAR of the bank stood at 12.21% as of March 31, 2021. Priority sector advances stood at ₹15,033.11 crore, constituting 95.64% of the total advances.
Net NPA fell to 0.57 % to the total loan outstanding in FY21 from 0.87% of previous year.
“TNGB undertakes various measures for delivering the benefit of various government schemes to the rural population of Tamil Nadu in addition to normal banking services,” S Selvaraj, Chairman of the bank said in the statement.
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e-RUPI, a cashless and contactless instrument for digital payment developed by the National Payment Corporation of India (NPCI), Health Ministry, National Health Authority and Department of Financial Services was launched by Prime Minister Narendra Modi on Monday.
This one-time payment mechanism allows users to redeem the voucher without a card or any digital payment app or internet banking. Based on the Unified Payment System, the Reserve Bank of India-approved e-RUPI is an e-voucher issued to the beneficiary through SMS or QR code on his or her mobile number. With the help of this, the service provider gets the payment directly into his account. Any government agency or corporate can generate e-RUPI through their partner banks.
Speaking at the launch of this digital tool, Modi said the e-RUPI voucher will play a big role in making direct benefit transfer more effective. Modi said with time its utility will also change. For instance, the e-RUPI will be helpful to give treatment, say for TB, or provide food for the needy. It is not only person-specific, but also purpose-specific.
“Any person who is desirous of giving vaccination to poor people in private hospitals can do so with the help of eRUPI. eRUPI will ensure that the e-voucher is used for the purpose of vaccination only and for any other work,” Modi said.
“It can also be used for delivering services under schemes meant for providing drugs and nutritional support under Mother and Child welfare schemes, TB eradication programmes, drugs & diagnostics under schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertiliser subsidies, etc. Even the private sector can leverage these digital vouchers as part of their employee welfare and corporate social responsibility programmes,” the official release said.
e-RUPI connects the sponsors of the services with the beneficiaries and service providers in a digital manner without any physical interface. It also ensures that the payment to the service provider is made only after the transaction is completed. Being pre-paid in nature, it assures timely payment to the service provider without involvement of any intermediary, it added.
RS Sharma, Chief Executive Officer of the National Health Authority, said, “e-RUPI can be used in the areas of Health, Agriculture, nutrition and education. It will also be used in India’s National Digital Mission. We are fortunate to be the first user of this tool in the health ministry.”
TV Narendran, President, CII, while endorsing the tool, said that “the voucher system will enable all beneficiaries, including feature phone-users, to benefit through this mechanism. It will also be an excellent tool for the corporates, through which they can extend employee and community welfare schemes”.
According to Uday Shankar, President, FICCI, “The e-RUPI system will not only ensure that there are no leakages in the delivery of government services but also offer a much-needed ease and convenience to the people who are the recipient of such services. This can be a revolutionary concept and alter the paradigm of governance…FICCI will also encourage its members to consider using this platform for offering benefits to their employees and other stakeholders.”
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Aided by lower provisioning for non-performing assets and tight control on operating expenses, Punjab National Bank (PNB) on Monday reported a 75 per cent growth in standalone net profit for the first quarter ended June 30 at ₹1,023.46 crore against ₹586.33 crore in the March quarter.
On a year-on-year basis, its net profit grew a whopping 231.81 per cent compared to ₹308.45 crore in the same quarter last year.
It maybe recalled that the three way amalgamation of Punjab National Bank, United Bank of India and Oriental Bank of Commerce had come into effect from April 1 last year. This is the first time when a like-to-like comparison of Q1 of the banking behemoth (amalgamated bank) is available, say some banking industry observers.
For the quarter under review, PNB’s total income for the quarter under review stood at ₹22,515 crore, slightly lower than total income of ₹22,532 crore recorded in the previous quarter. In the first quarter last fiscal, it had registered total income of ₹ 24,293 crore.
Also read: PNB moves court seeking restoration of assets of Nirav Modi’s firms seized by ED
Operating profit increased to ₹6,098.65 crore from ₹5,634.31 crore in the March quarter. Its operating profit in June quarter last year was ₹5,280 crore.
Operating expenses of the bank fell sharply in the first quarter ended June 30 this year at ₹4,722 crore as against ₹5,045 crore in the March quarter. In the June quarter last year, operating expenses had come in at ₹5,156 crore.
Provision for NPAs for the quarter under review stood at ₹3,248 crore against ₹5,294 crore in the March quarter this year and ₹4,836 crore in the June quarter last year.
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The Lok Sabha on Monday approved amendments to General Insurance Business (Nationalisation) Act, 1972. This will help the government shed its shareholding in public sector general insurance companies.
Meanwhile, Finance Minister Nirmala Sitharaman has assured that the amended Bill will not take away the rights of anybody. This remark is in response to the allegation that the government is privatising insurance companies that will be against the interest of employees and policyholders.
Also read: Govt moves to shed stake in a general insurance co
“All these allegations are baseless. The government is not taking away rights of anyone. Private sector insurance companies are raising money from public and with the help of that, providing insurance products at lower premium,” she said while responding to allegations on the Bill from the opposition bench. Later the Bill got passed with voice vote.
Earlier on July 30, while introducing the Bill, Sitharaman had categorically said that apprehensions mentioned by the members are not well-founded at all. “What we are trying to in this is not to privatise. We are bringing some enabling provision so that the government can bring in public participation, Indian citizens, the common people’s participation in the general insurance companies,” she had said.
The amendment is a follow-up to the Budget announcement in which Sitharaman proposed ‘privatisation’ of one general Insurance company in the current financial year. On July 30, she said a public-private participation in general insurance industry will help get more resources which will bring in better technology infusion and also enable faster growth of such companies.
The Bill proposes three amendments. First one aims “to omit the proviso to section 10B of the Act so as to remove the requirement that the Central Government holds not less than 51 per cent. of the equity capital in a specified insurer”. The second one will insert a new section 24B “providing for cessation of application of the Act to such specified insurer on and from the date on which the Central Government ceases to have control over it.”
And the third one will insert “a new section 31A providing for liability of a director of specified insurer, who is not a whole-time director, in respect of such acts of omission or commission of the specified insurer which has been committed with his knowledge and with his consent.”
“With a view to providing for greater private participation in the public sector insurance companies and to enhance insurance penetration and social protection and better secure the interests of policy holders and contribute to faster growth of the economy, it has become necessary to amend certain provisions of the Act,” statement of objects and reasons of the Bill said.
As on date, there are four general insurance companies in the public sector – National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited. Now, Besides these, there is one re-insurer, General Insurance Corporation and one specialised one for agriculture insurance.
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To access to the new version of YONO and YONO Lite with enhanced security features, as per the press release, users will have to update their mobile app and complete the one-time registration process on these apps. The registration process verifies the SIM of the registered mobile number (RMN) with the bank in order to complete the registration.
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Housing Development Finance Corporation (HDFC) Ltd reported a 1.7 per cent drop in its net profit in the first quarter of the fiscal at ₹3,000.67 crore. Its net profit was ₹3,051.52 crore in the quarter ended June 30, 2020.
In a statement on Monday, HDFC Ltd said the profit numbers for the quarter ended June 30, 2021, however, are not directly comparable with that of the previous year. This is due to lower profit on sale of investments, lower dividend, higher charge for employee stock options and the effective tax rate of 23.1 per cent in 2021-22 as against 15.4 per cent last fiscal.
“In the previous year, the tax on capital gains on the sale of equity shares was low on account of grandfathering provisions as per the Income Tax Act, 1961,” it said.
HDFC provided ₹903.9 crore for tax in the quarter ended June 30, 2021 as against ₹555.31 crore a year ago.
However, shrugging off the impact of the second Covid wave, its net interest income surged by 22 per cent for the quarter ended June 30, 2021 to ₹4,147 crore compared to ₹3,392 crore in the previous year. Net interest margin was 3.7 per cent for the first quarter of the fiscal as against 3.1 per cent a year ago.
The country’s largest mortgage financier also saw robust growth in individual loan disbursements at 181 per cent year on year in the first quarter of the fiscal.
“Business has reverted back to normal in June and July was an extremely strong month for us. July 2021 disbursements were the highest ever in a non-quarter end month. July 2021 was the third highest in the history of HDFC,” said Keki Mistry, Vice-Chairman and Chief Executive Officer, HDFC Ltd.
The gross non-performing loans as of June 30, 2021 stood at ₹11,120 crore or 2.24 per cent of the loan portfolio. This was higher compared to 1.98 per cent as on March 31, 2021 and 1.87 per cent as on June 30, 2020.
As per regulatory norms, HDFC is required to carry a total provision of ₹5,778 crore. Its expected credit loss for the quarter ended June 30, 2021 was at ₹686 crore compared to ₹1,199 crore a year ago.
As at June 30, 2021, ₹4,482 crore has been restructured under the RBI’s Resolution Framework for Covid-19 related stress, which amounts to 0.9 per cent of the loan book.
Of the loans restructured, 38 per cent are individual loans and 62 per cent non-individual loans, HDFC said, adding that of the total restructured loans, 62 per cent is in respect of just one account.
The overall collection efficiency ratio for individual loans has improved during the month of June 21 to pre-Covid levels. The collection efficiency for individual loans on a cumulative basis in June 2021 stood at 98.3 per cent compared to 98 per cent in March 2021.
The assets under management grew 8.1 per cent to ₹5,74,136 crore as of June 30, 2021 from ₹5,31,186 crore in the previous year.
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