Category: Banking & Finance

Niva Bupa aims ₹5,000 cr gross written premium by 2023-24

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Niva Bupa Health Insurance Company Ltd (Niva Bupa), a standalone health insurer, on Monday said it aims to achieve a gross written premium (GWP) of ₹5,000 crore by 2023-24.

This timeline is now one year ahead of the FY 24-25 period earlier indicated – for achieving the ₹5,000 crore GWP milestone – by the senior management in an interaction with BusinessLine in July this year.

Given the strong growth seen in the last 24 months, the company is now looking to close the current fiscal with GWP of ₹2,700 crore against the earlier projected level of ₹2,500 crore.

Niva Bupa, which was formerly known as Max Bupa Health Insurance, also said on Monday that it wants to bring as many as 10 million people of the country under the ambit of health insurance by the end of FY23-24.

Targets covering more people

This standalone health insurer’s MD & CEO, Krishnan Ramachandran, had in July indicated to bring 10 million people under health insurance by 2024-25.

Niva Bupa, which is currently having a presence in 350 cities, will further increase its presence to over 600 cities by FY23-24, it said on Monday.

“We are overwhelmed with the growth seen in the last 24 months. We are aggressively expanding our direct and digital partnership with massive regional expansion helping us to maintain rapid growth. We are fully committed to accelerating the adoption of health insurance across the country, making quality healthcare more accessible to the people,” Krishnan Ramachandran, MD&CEO, Niva Bupa said.

Niva Bupa is a joint venture between Fettle Tone LLP (an affiliate of True North Fund VI LLP), a private equity firm, and the Bupa Group, an international healthcare company. True North owns 55 per cent shareholding in Niva Bupa, while Bupa owns 44 per cent equity stake. This standalone health insurer is increasing its footprint pan India through its bancassurance partnerships with 15 banks.

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Spandana Sphoorty appoints Shalabh Saxena as new MD and CEO

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The country’s second-largest microfinance institution, Spandana Sphoorty, on Monday announced the appointment of Shalabh Saxena as its new Managing Director and CEO, and Ashish Damani as the President and Chief Financial Officer.

While Saxena is currently serving as the MD and CEO of Bharat Financial Inclusion Ltd (BFIL), Damani has nearly two decades of experience at BFIL and is currently serving as its Chief Financial Officer, Spandana said in a statement.

“Both Saxena and Damani will join Spandana soon,” it further said. In a stock exchange filing, Spandana said the board has approved the appointment of Saxena for five years from the date of joining.

The Board has also appointed Abanti Mitra, an independent director with Spandana since 2011, as non-executive Chairperson of the Board with immediate effect. “Outgoing Chairman, Deepak Vaidya, will continue to serve on the Board as an independent director,” it said.

Spandana has been in the spotlight after its founder and erstwhile Managing Director Padmaja Reddy stepped down over concerns over a plan to sell the company to Axis Bank. It had on November 2 announced a change in its leadership structure, following the resignation of Reddy and had confirmed the hiring of an eminent industry veteran as its new MD and CEO.

In its statement on Monday, Spandana said the Management Committee of the board is fully engaged in supporting day-to-day operations. The company has also hired independent third-party firms Alvarez & Marsal, PwC and CAM to provide support and conduct special review exercises during the leadership transition, and they are already fully engaged.

Transition

The Management Committee is also in the process of addressing gaps in the transition of services after Reddy stepped down.

“Shortly prior to her resignation, Reddy had transferred the company’s IT systems to a new IT vendor and outsourced its management to that vendor,” Spandana said, adding that there has been no meaningful impact on the day-to-day business operations of the company from this.

It is engaging with the new vendor appropriately and has also made good progress on creating a parallel IT environment.

Additionally, some potential concerns have been brought to the board’s notice regarding certain gold loan branches of Spandana’s subsidiary, Criss Financial Limited. It is currently in the process of confirming the status of the same, the company said.

The matter relates to its branches with a combined portfolio of less than one per cent of Spandana’s consolidated AUM, and therefore would not have a material financial impact on the company.

Business update

Spandana’s business demonstrated healthy performance in the quarter that ended September 30, 2021 (unaudited basis), with standalone collection efficiency for the entire quarter of 105 per cent and 113 per cent for September, including pre-payments, the company said.

The standalone disbursal volumes are also healthy at over ₹1,150 crore for the quarter ended September 30, 2021, it further said.

It has resumed the audit of the financial results for the quarter ended September 30, 2021, following a brief transition-related hiatus and expects to announce results in the next few weeks.

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Nomura business index hits new high of 114

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The Nomura India Business Resumption Index (NIBRI) has risen to yet another high of 114 for the week ending November 21 from 110.3 in the prior week, suggesting the business resumption index is 14 percentage points (pp) above pre-pandemic levels (i.e., 100).

Google workplace mobility rose sharply by 18.1 pp, while retail and recreation fell by 3.3 pp and the Apple driving index rose by 3.6 pp. The labour participation rate remained tepid at 39.8 per cent, while power demand rose by 0.2 per cent w-o-w, as payback from the 5.5 per cent rose in the prior week.

“A mix of supply-side headwinds and demand-side tailwinds continue to obscure the growth outlook. On the demand side, there is evidence of strong festival demand among consumers, an uptick in credit growth and robust core imports in October. Low infection rates and reopenings are also boosting mobility and services activity,” Nomura said.

“However, October auto sales have been lacklustre, reflecting not only semiconductor shortages but also the impact of weak rural demand on two-wheeler sales. The energy crunch seems to be easing, with a rise in coal stocks at power plants. Overall, we maintain our GDP growth outlook of 9.2 per cent for FY22, with a downside risk of ~1 pp due to supply issues,” Nomura added.

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PMC Bank depositors invested over ₹5 lakh to get their money back over 10-year period

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Depositors of the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank with deposits over ₹5 lakh will get their money back in a piecemeal manner over an extended 10-year period, per the draft scheme of amalgamation of PMC Bank with Unity Small Finance Bank (Unity SFB).

Also, no further interest will be payable on the interest-bearing deposits of the transferor bank for five years from the appointed date

The aforementioned clauses are unlikely to go down well with depositors (having deposits over ₹5 lakh), especially senior citizens, who struggled to make ends meet amid the pandemic due to the ₹1 lakh per depositor cap on withdrawal during the entire two-year period their bank has been under directions.

Modalities

As per the scheme, Unity SFB (transferee bank) will pay the amount received from the Deposit Insurance and Credit Guarantee Corporation to all the eligible depositors of PMC Bank (transferor bank), which would be an amount equal to the balance in their deposit accounts or ₹5 lakh, whichever is less;

At the end of two years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹50,000, whichever is less, on-demand only to the retail depositors of the transferor bank.

The appointed date is the date when the undertaking of the transferor bank will stand transferred to, and vest in the transferee bank.

At the end of three years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹1 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

At the end of four years from the appointed date,over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹3 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

At the end of five years from the appointed date, over and above the payment already made, Unity SFB will pay an additional amount equal to the balance in their deposit account or ₹5.50 lakh, whichever is less, on-demand only to the retail depositors of the transferor bank.

The entire remaining amount of deposits (after the payments over five years) will be paid in the accounts of the retail depositors of transferor bank after 10 years from the appointed date, on demand.

Interest at the rate of 2.75 per cent per annum shall be paid on the retail deposits of the transferor bank which shall be remaining outstanding after the said period of five years from the appointed date. This interest will be payable from the date after five years from the appointed date.

The transferee bank will have time up to 20 years from the appointed date, to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments.

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‘Co-op Societies not authorised to conduct banking biz’

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The Reserve Bank of India (RBI), in an advisory to the members of the public, said co-operative societies have neither been issued any licence under Banking Regulation (BR) Act, 1949 nor are they authorised for doing banking business.

Further, insurance cover from the Deposit Insurance and Credit Guarantee Corporation (DICGC) is also not available for deposits placed with these societies.

“Members of the public are advised to exercise caution and carry out due diligence of such co-operative societies if they claim to be a bank, and look for banking licence issued by RBI before dealing with them,” the central bank said in a statement.

Forbidden word

Simultaneously, RBI asked co-operative societies to desist from using the words “bank”, “banker” or “banking” as a part of their names, except as permitted under the provisions of BR Act, 1949 or by the Central bank.

RBI has noticed some co-operative societies are using the word “Bank” in their names in violation of Section 7 of the BR Act, 1949 (As Applicable to Co-operative Societies) (the BR Act, 1949).

“It has also come to the notice of RBI that some co-operative societies are accepting deposits from non-members/ nominal members/ associate members which tantamount to conducting banking business in violation of the provisions of the BR Act, 1949,” the Central bank said.

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Shriram City crosses 1-crore milestone in two-wheeler financing

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Shriram City Union Finance Ltd (SCUF) on Monday announced that it has crossed the milestone of one crore two-wheeler financing, coinciding with the 2021 festive season.

Two-wheeler loans currently account for about 22 per cent of the NBFC’s ₹30,000 crore assets under management.

Shriram City Union Finance posts 10% growth in Q2 net profit

YS Chakravarti, MD & CEO, SCUF, said: “The festive cheer, pent-up demand, and a good monsoon have aided rural demand. At Shriram City, our goal is to help consumers earn a livelihood, with 65 per cent of our borrowers being self-employed and using the two-wheeler as part of their business.”

Impact of pandemic

The company, in a statement, noted that it financed the first 50 lakh two-wheelers over 15 years, beginning 2002, whereas the next 50 lakh customers were added in under four years.

No festive cheer for two-wheeler industry

The statement underscored that 2021 saw two-wheelers gain momentum as a mode of transport, with the need for mobility gaining importance amid the Covid pandemic. The demand for two-wheelers has been the highest when compared to other motorised modes, it added.

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Some Chinese banks told to issue more loans for property projects

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BEIJING, – Some Chinese banks have been told by financial regulators to issue more loans to property firms for project development, two banking sources with direct knowledge of the situation told Reuters on Monday, in efforts to marginally ease liquidity strains across the industry.

Chinese authorities have yet to publicly give any signal that they will relax the “three red lines” – financial requirements introduced by the central bank last year that developers must meet to get new bank loans.

But lenders have recently adjusted their lending practices to reflect the latest central bank guidance of “meeting the normal financing needs” of the sector.

The marginal relaxation of loan policies to developers will still stick to the major principle that “homes are for living in, not for speculation,” said the sources, one from a city commercial bank and the other from a big bank, who received the guidance from regulators.

Financial regulators have told the banks to specifically accelerate approval of loans to develop projects, and to ensure that outstanding loans to project development show positive growth in their loan books in November compared with October, the two sources said.

Both sources declined to be named due to the sensitivity of the matter.

The People’s Bank of China (PBOC) and the China Banking and Insurance Regulatory Commission (CBIRC) did not immediately respond to requests for comment.

As of end-September, banks’ outstanding loans to project development stood at 12.16 trillion yuan ($1.91 trillion), up by 0.02% from a year earlier, central bank data showed.

Quarterly growth of this loan type slowed further from the second quarter by 2.8 percentage points, the data showed.

The real estate sub-index of the Chinese mainland’s blue chip index jumped nearly 5% on Friday following market rumours about potential relaxation of property loans.

The sub-index ended down 4% on Monday.

China will stand firm on policies https://www.reuters.com/business/china-property-financing-tweaks-fall-short-investor-expectations-2021-11-11 to curb excess borrowing by property developers even as it makes financial tweaks to help home buyers and meet reasonable demand, bankers told Reuters previously.

Some banks have accelerated disbursement of approved home loans in some cities, the bankers said.

Last month, central bank official Zou Lan said there had been “misunderstanding” among lenders about the PBOC’s debt-control policies, causing financial strains for some developers.

“Banks should have supported new projects reasonably after (developers) have repaid existing loans,” Zou said. ($1 = 6.3819 Chinese yuan) (Reporting by Xiangming Hou, Kevin Huang and Ryan Woo; Writing by Cheng Leng; Additional reporting by Jason Xue; Editing by Jacqueline Wong)



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Poonawalla Fincorp, CARS24 in strategic pact for consumer financing

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Poonawalla Fincorp and CARS24 on Monday announced their strategic partnership for quick and seamless consumer financing on vehicles bought from CARS24.

CARS24 raises $450 million funding in Series F round

“In this partnership, Poonawalla Fincorp will fulfil consumer loans originating through CARS24. Additionally, both parties will partake in the risk and rewards,” they said in a statement.

‘Huge market opportunity’

Vijay Deshwal, Group Chief Executive officer, Poonawalla Fincorp Ltd, said, “With technology at its core, we at Poonawalla Fincorp aim to create a digitally-enabled consumer lending platform and this partnership with CARS24 is a step in that direction. We are optimistic that this will be a great partnership and will provide hassle-free experience to customers in fulfilling their dream of owning a car.”

Cars24 eyes 20% share of the used car market in 5 years

Ruchit Agarwal, Co-founder and CFO, CARS24, said, “With only 20 per cent consumer financing penetration in the used cars industry, we feel that there is a huge market opportunity waiting to be tapped.”

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Asset quality pains for banks ease, focus on growth likely in H2

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Asset quality pains for banks have largely eased after the second quarter and they are now likely to focus on growth, believe analysts.

A report by ICICI Securities noted that overall the quarter ended September 30, 2021 saw improvement in broad business parameters and management commentaries have been positive suggesting better traction in the second half of the fiscal.

“We believe profitability should see a boost in coming quarters with better top-line growth and lower provisions. Loan growth is to be largely driven by retail and MSME segment while corporate segment should witness gradual pick up in working capital utilisation,” it said.

Also read: NPAs of NBFCs, HFCs may rise for 3-4 quarters due to tweak in norms

Asset quality performance was better than previous quarter with less slippages and better recoveries, the report said.

Slippages were mostly at about 1- 1.4 per cent compared to 2-2.5 per cent quarter-on-quarter while gross non performing assets declined by 30 to 70 basis points, except for a few banks.

With the opening up of the economy and normalisation of business activities, most banks have reported better collection efficiencies as well as higher credit demand.

“The asset quality pain for most banks is largely behind and the focus now is on the growth acceleration. The one-off gains helped public sector banks to maintain a strong profitability; whereas the private banks’ performance was a shade better than the first quarter,” said a report by Emkay Global Financial Services.

The second quarter of the fiscal was marked by sequential moderation in stress formation, mainly led by retail, and more so for large private and public sector banks, the report said, adding that it expects non performing asset ratios to moderate due to lower slippages and higher recovery and write offs as most banks, barring a few small private banks, sit on a comfortable provision cover.

Motilal Oswal in a report also said that the asset quality outlook for public sector banks is improving gradually after a prolonged corporate NPL cycle – GNPA ratios had reached the peak of about 15 per cent in 2017-18.

A recent report by CARE Ratings had also noted that the NPA situation of the Indian banking system as represented by 23 banks – 9 PSBs and 14 private sector lenders, indicates a gradual improvement in the NPA ratio in September 2021.

The NPA ratio for these 23 banks was 6.97 per cent as on September 30, 2021 compared to 7.36 per cent as on September 30, 2020.

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SBI warns against fraudulent customer care numbers, gives instructions to avoid getting scammed, BFSI News, ET BFSI

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If you are a State Bank of India (SBI) account holder, then it is important for you to check the correct customer care number to avoid getting scammed.

“Beware of fraudulent customer care numbers. Please refer to the official website of SBI for correct customer care numbers. Refrain from sharing confidential banking information with anyone,” said the bank via a tweet on its official Twitter handle.

This is not the first time that the bank has issued such advice to its customers. Earlier, there have been instances where customers have been conned by calling the customer care number mentioned on a google search for the bank, on food delivery apps etc.Along with the tweet, the bank has also posted an instructional video online, guiding customers on how they can avoid getting conned.

As per the video, while calling the customer care centre, the account holder should not share personal details i.e. bank account number, debit card details, CVV, One-time password (OTP), ATM PIN etc. The bank also sends SMS to its customers reminding them that SBI never asks for confidential information such as PIN and OTP from customers. Any such calls can be made only by a fraudster. Please do not share personal info.

Further, the customer care numbers should be verified from the bank’s official website before making a call.

If you have received such calls or emails, then such frauds can be reported to the bank by sending an email at report.phishing@sbi.co.in or by calling the cybercrime helpline number.



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