Category: Banking & Finance

PhonePe in talks with Indus OS founders and Samsung Ventures for majority stake

Banking & Finance

[ad_1]

Read More/Less


PhonePe is in talks with the founders of Indus OS to buy out their 20 per cent stake in the startup as part of a plan to increase its shareholding to 92 per cent. PhonePe currently owns 32 per cent in Indus OS and wants to take full control. PhonePe is also in talks with Samsung Ventures to acquire a part of the 20 per cent stake it holds in Indus OS.

“As per the initial conversations, Samsung Ventures is likely to continue as a stakeholder and investor in the startup, but might be diluting its stake,” a source in the know told BusinessLine seeking anonymity.

Investor dissent

This comes even as mobile marketing company Affle Global, which owns 25 per cent stake in Indus OS’ parent firm OSLabs, has objected to the low valuation being offered by PhonePe to acquire controlling stake.

Affle recently said it has won a legal case at a Singapore court, which ordered Indus OS’ parent OSLabs to hold an extraordinary general meeting (EGM) with all the existing investors.

The source cited above mentioned that the term sheet floated by PhonePe in March 2021 valuing Indus OS at $60 million was agreed upon by all the investors including Affle Global which then held 8 per cent and venture capital firm Ventureast having 15 per cent stake. “All the investors selling their stake had shared “written resolutions as they couldn’t hold a face-to-face EGM due to lockdown,” said the source.

Affle Global, however, said that the deal was taking place at a reduced valuation and Indus OS’ valuation stood at over $90 million instead.

“Affle is hoping that at the EGM, some investors would change their minds and decide in their favour,” the source said

According to Affle’s statement on June 26, It had “achieved the SIAC emergency arbitration interim order on May 15, 2021, that restricted OSLabs, its founders and key shareholders from transferring approx. 20% equity ownership to PhonePe until the Right Of First Refusal is duly offered to the existing shareholders of OSLabs.”

Why is Indus OS lucrative?

Founded in 2015 by IIT Bombay alumni Rakesh Deshmukh, Akash Dongre and Sudhir B, Indus OS’ key offering is its vernacular app store called Indus App Bazaar, which reportedly has over 100 million users in the Tier-2 and Tier-3 towns and beyond. Its app store has more than 4,00,000 apps and AI capabilities to offer many languages beyond the 12 vernacular languages it offers today in India.

“Indus OS powers Samsung Galaxy App Store. The whole mission of trying to create an alternative app store is a big thing. PhonePe is just the company acquiring it. The real people behind them are Flipkart and Walmart,” said a second source.

“Focus of Indus OS was always on localisation for India. They are not pushing any and every app. They are trying to bring relevance to the apps that are offered on their app store, based on the user’s requirements. That’s where they primarily differentiate. This in turn also helps the developers reach the right target consumers. Today, app makers spend around ₹15-40 per installation. If that is not done with the right customer, you don’t just lose money but the entire lifetime value of recall. That’s why Samsung has been investing in the company,” Faisal Kawoosa, Founder and Chief Analyst, Techarc told BusinessLine.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Bank Holidays in July 2021, List of Bank Holidays in India: Banks to remain shut for up to 15 days next month; check full list here

Banking & Finance

[ad_1]

Read More/Less


On July 21, banks in most of the states will observe a holiday on account of Bakri Id.

Bank Holidays in July 2021: Banks in India will remain closed for up to 15 days in July 2021, including second and fourth Saturdays, and Sundays. Apart from six weekly offs, banks will remain shut in different states on account of different holidays. Banks will not be closed for all nine days for all states as these are state-specific holidays for different occasions. On July 21, banks in most of the states will observe a holiday on account of Bakri Id. Only the gazetted holidays are observed by banks all over the country. The Reserve Bank of India has categorised holidays under three categories — Holiday under Negotiable Instruments Act; Holiday under Negotiable Instruments Act and Real-Time Gross Settlement Holiday; and Banks’ Closing of Accounts. The list of holidays given below has been notified by RBI.

Bank Holidays in July 2021

12 July 2021: Kang (Rathajatra)/Ratha Yatra
13 July 2021: Bhanu Jayanti
14 July 2021: Drukpa Tshechi
16 July 2021: Harela
17 July 2021: U Tirot Sing Day/Kharchi Puja
19 July 2021: Guru Rimpoche’s Thungkar Tshechu
20 July 2021: Bakrid
21 July 2021: Bakri Id (Id-Ul-Zuha) (Eid-UI-Adha)
31 July 2021: Ker Puja

Banks across Bhubaneswar and Imphal will remain closed on July 12, on account of Kang (Rathajatra)/Ratha Yatra. On July 13-14, 2021, only banks in Gangtok will remain shut to observe Bhanu Jayanti and Drukpa Tshechi, respectively. On July 16, banks in Dehradun will be closed on account of the Harela festival. Banks in Agartala and Shillong will observe a holiday on July 17 because of U Tirot Sing Day/Kharchi Puja. Only banks in Gangtok will remain closed on July 19 on account of Guru Rimpoche’s Thungkar Tshechu. On July 20, 2021, banks in Jammu, Srinagar, Kochi and Thiruvananthapuram will observe a holiday. On account of Id-Ul-Zuha, banks in most of the states across the country will remain shut on July 21, except in Aizawl, Bhubaneswar, Gangtok, Kochi and Thiruvananthapuram.

Weekend holidays in July 2021

04 July 2021 – Weekly off (Sunday)
10 July 2021 – Second Saturday
11 July 2021 – Weekly off (Sunday)
18 July 2021 – Weekly off (Sunday)
24 July 2021 – Fourth Saturday
25 July 2021 – Weekly off (Sunday)

All the private and public sector banks across the country remain shut on the second and fourth Saturdays of every month, along with a weekly holiday on Sunday. Even as banks will remain shut on the above-mentioned days, customers can avail online services. Moreover, mobile and internet banking will remain operational.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , ,

Jet Airways lenders face 95% haircut, but get 9.5% stake, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Financial creditors to Jet Airways will take around 95 per cent haircut with the bidder Jalan-Kalrock consortium pay Rs 385 crore against the total claim of Rs 7,807.74 crore.

The new owner will pay Rs 185 crore within 180 days after the start of operations of the company and the rest Rs 195 crore through issuance of zero-coupon bonds of Rs 1,000 face value after two years, according to a report.

The consortium would also give 9.5 per cent stake to the lenders in Jet Airways and 7.5 per cent in the loyalty program Jet Privilege Private Limited.

The claims

The total creditor claims of Jet Airways in NCLT are Rs 40,259.12 crore.

The total admitted claims are Rs 22,167.23 crore including Rs 7,807 crore from financial creditors. The domestic lenders owe Rs 5,776.71 crore to the airline. State Bank of India has claims of Rs 1,636.22 crore, YES Bank with Rs 1,084.44 crore, Punjab National Bank Rs 754.11 crore, IDBI Bank Rs 594.42 crore, Canara Bank Rs 543.61 crore, ICICI Bank Rs 519.08 crore, Bank of India Rs 263.57 crore, Indian Overseas Bank Rs 158.24 crore, Syndicate Bank Rs 169.73 crore, PNB Hong Kong Rs 42.98 crore, ICICI Bank ECB Loan Rs 9.86 crore.

Foreign lenders including UAE based Mashreq bank, France’s Natixis SA owe Rs 563 crore.

Operational creditors will get a maximum of Rs 15,000 each irrespective of the claim amount.

The company’s plans

The new promoters will infuse Rs 1,375 crore over the next two years into the company, of which around Rs 975 crore will be used for capital expenditure and working capital expenses.

However, National Company Law Tribunal has denied the earlier Jet Airways slots at airports saying the airline cannot claim historicity to obtain airport slots belonging to the airline as it didn’t have any operating slots on the day of the commencement of the insolvency process.

The insolvency

Jet Airways was admitted for insolvency on June 20, 2019, after all the attempts by the lenders to sell the defunct airline failed. The National Company Law Tribunal last month allowed the resolution professional for Jet Airways, to extend the corporate insolvency resolution process of the grounded airline by 90 days.

After Jet Airways went bust, the government temporarily allotted the hundreds of airport slots owned by it to other carriers to contain soaring airfares in the peak holiday season.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Malaysia digital banking lures dozens of firms as fintechs expand in Asia, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Southeast Asian ride-hailing-to-fintech group Grab and budget airline AirAsia were among more than a dozen bidders involving over 50 companies that are vying for digital banking licences in Malaysia, people familiar with the matter said.

Others who submitted bids by Wednesday’s deadline included telecoms operator Axiata and a consortium backed by Chinese tech firm Tencent, said the sources.

They have been drawn in by relatively low financial entry barriers and the promise of a growing army of young smartphone users in a country with a population of more than 32 million.

Malaysia’s move to open up its banking sector comes as Asian markets such as Hong Kong, Singapore and the Philippines are ushering in new players, mostly fintech firms, who are taking on incumbents with their low-cost and newer services.

The Malaysian central bank https://www.bnm.gov.my/-/policy-document-on-licensing-framework-for-digital-banks has said it will issue up to five licences by early 2022.

“Malaysia has many of the characteristics digital banking players are looking for, with a sizeable population, large smartphone penetration and young population eager to try out new services,” said Shankar Kanabiran, financial services consulting partner at EY.

Malaysia requires only 300 million ringgit ($72 million) of capital funds for digital banks, which has drawn interest from fintechs to money remittance companies to co-operatives representing banks and housing sectors.

In contrast, Singapore needed license applicants to have S$1.5 billion ($1.1 billion) in paid-up capital for fully functioning digital banks or S$100 million for digital wholesale banks.

Sources said that most of the applicants for Malaysia’s online-only banks were likely to be local, with only a handful of foreign names such as Southeast Asian internet platform Sea , Grab, and Tencent-backed Linklogis.

Sea, which won a full digital banking licence in Singapore, is partnering with Malaysian conglomerate YTL Corp Bhd , they added.

A joint venture of Grab and Singtel, which also won a full digital banking licence in Singapore, has applied with a consortium of other investors, Singtel said on Thursday.

AirAsia has tied up with a consortium for the application through its fintech unit BigPay, sources said. Axiata has teamed up with RHB Bank.

Sea and BigPay declined to comment while there was no response to a query sent to YTL. The sources declined to be identified as they were not authorised to speak to the media.

At a news conference last month, Axiata Digital CEO Khairil Abdullah said that a lack of access to credit for a big chunk of Malaysia’s population had created a “very sizeable underserved segment” for the company to tap into.

Maybank, CIMB Group Holdings and Public Bank Bhd dominate Malaysia’s banking sector.

Nomura analysts said in a June report that the entry of digital banks would intensify competition in segments such as deposit pricing, fees, and later, loan pricing where there might be some overlap with conventional banks.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Personal loans keep banks afloat in FY21 as industrial credit demand sinks, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns, RBI data showed on Tuesday. However, “personal loans continued to grow at a robust pace and recorded 13.5 per cent growth (Y-oY) in March 2021; industrial loan growth, on the other hand, remained negative during all quarters of 2020-21.”

The RBI further said working capital loans in the form of cash credit, overdraft and demand loans, which accounted for a third of total credit, contracted during 2020-21, indicating the impact of the coronavirus pandemic.

Private banks

The data further revealed that private sector banks recorded higher loan growth when compared to public sector lenders. Their share in total credit increased to 36.5 per cent in March 2021 from 35.4 per cent a year ago and 24.8 per cent five years ago, it said.

However, the private sector banks’ loan growth slowed to 9.1 per cent in FY21, from 9.3 per cent in FY20. Public sector loans grew 3.6 per cent in FY21, down from 4.2 per cent in FY20. The lending by foreign banks shrunk by 3.3 per cent during 2020-21 as against a growth of 7.2 per cent a year ago.

Credit to the household sector rose by 10.9 per cent (Y-o-Y) and its share in total credit increased to 52.6 per cent in March 2021 from 49.8 per cent a year ago, as per the ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), March 2021’, released by the central bank.

Industrial credit

Growth in credit to the private corporate sector, however, declined for the sixth successive quarter and its share in total credit stood at 28.3 per cent. RBI said the weighted average lending rate (WALR) on outstanding credit has moderated by 91 basis points during 2020-21, including a decline of 21 basis points in Q4.

It also said bank branches in urban, semi-urban and rural areas recorded double-digit credit growth (Y-o-Y) in March 2021, whereas metropolitan branches, which accounted for 63 per cent of bank credit, logged 1.4 per cent growth.

Overall credit growth in India slowed down in FY21 to 5.6 per cent from 6.4 per cent in FY20 as the economy was hit hard by Covid. and subsequent lockdowns.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Non-food credit growth of banks slackens to 5.9% in May

Banking & Finance

[ad_1]

Read More/Less


Non-food credit growth of scheduled commercial banks (SCBs) slackened to 5.9 per cent in May 2021 compared to 6.1 per cent in May 2020 due to deceleration in credit growth to industry and services sector.

Per the Reserve Bank of India’s statement on sectoral deployment of bank credit for May 2021, credit to agriculture and allied activities continued to perform well, registering an accelerated growth of 10.3 per cent in May 2021 as compared to 5.2 per cent in May 2020.

Credit growth to industry decelerated to 0.8 per cent in May 2021 from 1.7 per cent in May 2020, the central bank said.

Size-wise, credit to medium industries registered a robust growth of 45.8 per cent in May 2021 as compared to a contraction of 5.3 per cent a year ago.

Credit growth to micro and small industries accelerated to 5 per cent in May 2021 as compared to a contraction of 3.4 per cent a year ago, while credit to large industries contracted by 1.7 per cent in May 2021 as compared to a growth of 2.8 per cent a year ago.

Credit growth to the services sector decelerated to 1.9 per cent in May 2021 from 10.3 per cent in May 2020, mainly due to deceleration in credit growth to NBFCs, transport operators and commercial real estate, RBI said.

However, credit to the trade segment continued to perform well, registering accelerated growth of 12.4 per cent in May 2021 as compared to 7.7 per cent a year ago.

The central bank said personal loans registered an accelerated growth of 12.4 per cent in May 2021 as compared to 10.6 per cent a year ago, primarily due to accelerated growth in vehicle loans and credit card outstanding.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Union Bank board gives nod for fund-raising

Banking & Finance

[ad_1]

Read More/Less


Union Bank of India’s board of directors on Wednesday approved fund raising, including via equity and bonds, of up to ₹9,700 crore.

Within the overall limit of ₹9,700 crore, the public sector bank is planning to raise up to ₹3,500 crore via equity and up to ₹6,200 crore via bonds (Additional Tier 1 and/or Tier 2), according to a regulatory filing.

The raising of equity capital will be through one or more routes, including follow-on public offer, rights issue, private placement (including Qualified Institutions Placement) and preferential allotment to the Government of India and/or other institutions, as per the filing.

The bank will be obtaining shareholders’ approval for the capital plan at the 19th Annual General Meeting (AGM) on August 10.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Govt to borrow 47% less in Q2

Banking & Finance

[ad_1]

Read More/Less


The Government will be borrowing about 47 per cent less at ₹2.21 lakh crore in the second quarter of FY22 against ₹4.68 lakh crore in the first quarter via weekly Treasury Bill auctions.

The central bank, in a statement, said: “After reviewing the cash position of the Central Government, Government of India, in consultation with the Reserve Bank of India, has decided to notify the amounts for the issuance of Treasury Bills for the quarter ending September 2021.”

As per the calendar, the Government will be borrowing about 53 per cent of the total amount via 91-days T-Bill auctions; 24 per cent via 182-days T-Bills and 23 per cent via 364-days T-Bills.

Market experts say since more than 50 per cent of the total Government borrowing in Q2 is via 91-days T-Bills, RBI probably wants the yields at the short-end to go up.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

CAD widens to $8.1 billion in Q4FY21 over higher trade deficit, lower net invisible receipts

Banking & Finance

[ad_1]

Read More/Less


India’s current account deficit widened to $8.1 billion in Q4FY21 from $2.2 billion in the preceding quarter, primarily on account of a higher trade deficit and lower net invisible receipts.

The country’s current account balance recorded a surplus of $0.6 billion in the year ago quarter.

Current account deficit arises when the value of imports is greater than the value of exports. Current account surplus arises when the value of imports is less than the value of exports.

As a percentage of GDP, the current account deficit in Q4FY21 was at 1 per cent against a surplus of 0.1 per cent in the year-ago period and a deficit of 0.3 per cent in the preceding quarter.

Current account surplus in FY21

The current account balance recorded a surplus of 0.9 per cent of GDP in 2020-21 (or $24 billion) as against a deficit of 0.9 per cent in 2019-20 (or -$24.6 billion).

This came on the back of a sharp contraction in the trade deficit to $102.2 billion from $157.5 billion in 2019-20, the RBI said.

Also read: RBI imposes monetary penalty on 4 co-operative banks

In FY21, net foreign direct investment (FDI) inflows were at $44 billion ($43 billion in FY20); net foreign portfolio investments (FPI) increased by $36.1 billion ($1.4 billion); and external commercial borrowings to India recorded an inflow of $0.2 billion ($21.7 billion), RBI said in its “Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2020-21” report.

Aditi Nayar, Chief Economist at ICRA, said: “A normalisation in import demand as well as a surge in gold imports contributed to the widening of the current account deficit…, in spite of the massive increase in exports in March 2021.”

“The size of the current account deficit in Q4FY21 exceeded our forecasts, led by a lower than anticipated surplus of secondary income and services trade, whereas the outflow of primary income was also modestly higher than projected.”

Nayar observed that with the widening State level restrictions shrinking the domestic demand for fuels and gold in May 2021, the current account is expected to revert to a small, transient surplus in the ongoing quarter.

Rahul Bajoria, Chief India Economist at Barclays Securities (India) assessed that with activity continuing to normalise and with higher commodity prices, the current account deficit is likely to widen in the coming quarters.

In the current fiscal year, Bajoria expects India to post a current account deficit of $35 billion (1.1 per cent of GDP), although robust capital flows will ensure a Balance of Payments surplus of $50 billion.

“Despite the rising vaccine costs, we expect the central bank to continue its strategy of accumulating foreign exchange (FX) reserves. We expect the RBI’s FX reserves to increase to $645 billion by March 2022,” he said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Indian banks to feel the effect of Covid second wave long after infections fade: S&P Global

Banking & Finance

[ad_1]

Read More/Less


The second wave of pandemic is likely to impact the performance of Indian financial institutions during the first half of the current fiscal, S&P Global Ratings said on Tuesday. Talking about banks in particular, it said that lenders face systemic risk as the country sorts through the aftermath of the Covid second wave.

“The second wave has front-ended weakness in asset quality,” Deepali Seth Chhabria, Credit Analyst with S&P Global Ratings said. Further, she mentioned that financial institutions face a strained first half amid weak collections and poor disbursements. The agency feels that finance companies will likely be more impacted than banks.

Also read: NBFC-MFIs: Sector sees nearly 25% decline in FY21

S&P further said that banks have much to digest in the quarter ahead. Disbursements slowed considerably in April and May. The credit that banks extended, fell by about 1 per cent in the first two months of this fiscal. The drop was largely seasonal—there were similar declines in the same period for fiscals 2018 and 2019. “That said, strains on finance companies can go beyond this seasonal effect. For example, Bajaj Finance in its mid-quarter update said sales volumes for its consumer durables and auto finance businesses in May were just 40 per cent of what the management expected. We believe credit growth in India started improving in June, and will continue to do so,” it said.

Affected sectors

The ratings agency also mentioned that the collection efficiency for a number of finance companies fell by up to 5-15 per cent in April and May, largely due to lockdowns. Lenders catering to prime borrowers were generally less affected. SME borrowers, who comprise about 17 per cent of total loans, and low-income households have been most affected.

Tourism and recreation related sectors, commercial real estate, and unsecured retail loans may contribute to higher non-performing loans (NPLs or NPA). However, “the banking system’s exposure to many of these segments is moderate and should have only a limited effect. Housing finance (excluding affordable housing) and gold loans will likely be less affected compared with financing for micro enterprises or commercial vehicles,” the agency said.

It further noted that banks are better prepared to bounce back from the second wave than they were during the last downcycle. Institutions have continued to raise capital from the equity markets and the government.

Bounce-back

Private sector banks such ICICI Bank and Axis Bank raised equity capital in the last fiscal year, and public sector banks have jumped on this bandwagon. IDBI Bank raised ₹14.4 billion in equity in December 2020. Indian Bank also raised ₹16.5 billion in equity in June. Many other banks have also announced plans to raise capital, including hybrid capital.

The agency said that banks have already created Covid-related provisions of 0.5-1.5 per cent of loans. Additionally, the central bank has allowed banks to use all other floating and counter-cyclical provisions to address NPLs. “The next six months should be defined by the effectiveness of policies to contain long simmering bank-sector strains, with much potential for Covid-related flare-ups,” Geeta Chugh, Credit Analyst with S&P Global Ratings said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,
1 … 277 278 279 280 281 … 540