Category: Banking & Finance

JM Financial consolidated Q4 net rises 35.35 per cent

Banking & Finance

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JM Financial has posted a 35.35 per cent rise in consolidated net profit of ₹176.71 crore for the fourth quarter ended March 31, 2021, compared with ₹130.56 crore recorded during the same period a year ago. The rise was led by continued momentum in its investment banking, wealth management and securities business (IWS) in the quarter.

During the quarter under review, the diversified financial services firm recorded a total income of ₹841.13 crore, marginally up from the ₹840.58 crore recorded during the three-month period of the last financial year, it said in a statement.

Vishal Kampani, Managing Director, JM Financial Group, said, “FY20-21 has been one of the most challenging years amidst uncertainties on account of Covid-19. In spite of the economic volatility during the year, the capital markets remained strong on the back of strong liquidity”.

“We are pleased to report that we have concluded the financial year on a positive note, banking on our diversified and resilient business model, with strong performance across our business segments. Our investment banking, wealth and securities businesses have done exceedingly well and our pipeline for these businesses is extremely healthy. Despite the challenges from Covid-19, we had strong recoveries in our distressed credit business in FY2020-21,” he added.

For the full year ended March 31, the firm’s consolidated net profit rose 8.29 per cent to ₹590.14 crore from ₹544.98 crore recorded during the same year-ago period. Its total income fell 6.57 per cent to ₹3,226.63 crore, as against ₹3,453.55 crore posted in FY20.

JM Financial’s board also recommended a dividend of ₹0.50 per share.

The firm’s consolidated net worth stood at ₹6,947 crore, while its consolidated loan book stood at ₹10,854 crore (₹11,531 crore) as of March 31, 2020. The company said it has made additional gross provisions of ₹208 crore on account of the uncertainties around Covid-19 for the year ended March 31, thereby taking the total provisions to ₹383 crore.

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IDBI Bank: Divestment, transfer of management control approved

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The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave its in-principle approval for strategic disinvestment along with the transfer of the management control in the IDBI Bank Ltd.

“The extent of respective shareholding to be divested by the Central government and the LIC would be decided at the time of structuring of transaction in consultation with the RBI,” an official release said.

‘Perfect timing’

The Central government and Life Insurance Corporation (LIC) together own more than 94 per cent of equity of the IDBI bank. While the Central government owns 45.48 per cent stake, the shareholding of LIC in the IDBI Bank is 49.24 per cent. LIC is currently the promoter of the IDBI bank with management control, while the Central government is the co-promoter.

Capital market observers noted that the timing of the CCEA decision was quite perfect with the IDBI bank now coming into black after a gap of five years. For the financial year ended March 31, 2021, IDBI Bank has reported a full year standalone net profit of ₹1,359 crore against net loss of ₹12,887 crore in the previous year. The bank had also come out of the RBI’s Prompt Corrective Action (PCA) framework on March 10. “This could boost the valuation of the lender when the government goes in for the strategic disinvestment,” they said.

Speaking to BusinessLine soon after the announcement of the CCEA decision, Rakesh Sharma, Managing Director & CEO, IDBI Bank said, “The bank has seen a turnaround and balance sheet has improved. It is for the owners – the government and the LIC – to decide on the quantum of stake sale, timing and price etc. Now that bank has turned around, it may help them in attracting investors at right valuation.”

It is still not clear whether the management control and majority equity holding will pass on to a foreign bank or any domestic acquirer. One thing is for sure is that the LIC would tag along with the Central government, which is looking to exit, when the transaction is put through – so that the valuation is maximised for both the selling shareholders.

“It is expected that the strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of the IDBI bank,” the release added.

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Fino Payments Bank goes live with enhanced deposit limit of Rs 2 lakh for MSMEs, small traders, others

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Fino Payments Bank has 410 branches and more than 25,000 banking points. (Image: Fino Payments Bank)

Fino Payments Bank on Wednesday announced increasing its end-of-the-day account balance limit to Rs 2 lakh for customers including MSMEs, small traders, and retail customers. The bank, which became profitable in the fourth quarter of FY20, went live with the enhanced limit effective May 1, 2021. The move was in line with the Reserve Bank of India’s (RBI) announcement last month to increase the maximum balance limit at the end of the day for payments banks to Rs 2 lakh from Rs 1 lakh earlier in order to boost financial inclusion. “After reviewing the performance of payments banks and to encourage their efforts for financial inclusion it was decided to enhance the limit of maximum balance at end of the day from Rs 1 lakh to Rs 2 lakh per individual customer,” a notification by RBI on April 7 had said.

“The increased deposit limit allows our customers to save more money in their account. Further, our existing sweep account mechanism continues with our partner bank wherein customers can save funds in excess of Rs 2 lakh,” said Ashish Ahuja, COO, Fino Payments Bank. Up to Rs 2 lakh in the Fino account, the existing savings interest rate will be applicable while funds in the sweep account will get interest rates as set by its partner bank Suryoday Small Finance Bank.

Also read: RBI’s relief measures for MSMEs: 4 key takeaways from Shaktikanta Das speech; experts opine mixed bag

Fino Payments Bank’s micro ATM and AePS enabled financial services distribution network including 410 branches and more than 25,000 banking points allow people to open a new bank account, get debit cards, do deposit, withdrawal, or money transfer transactions, pay utility bills, loan EMIs, and buy health, life and motor insurance. Unlike regular banks, payments banks are not allowed to lend money to their customers, they can’t open Fixed deposits or recurring deposits, and also can’t allow a balance of more than Rs 1 lakh in any account. Currently there are five other RBI-approved payments banks operating in the country viz., Airtel Payments Bank, India Post Payments Bank, Paytm Payments Bank, Jio Payments Bank, and NSDL Payments Bank.

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Kotak Mahindra Bank selected as digital payments partner by eNAM

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Kotak Mahindra Bank on Wednesday announced that it has been selected as a digital payments partner by the National Agriculture Market (eNAM). “Kotak Mahindra Bank will enable and facilitate online transactions for all stakeholders on the eNam platform, including farmers, traders and farmer producer organisations (FPOs),” it said in a statement.

As part of this initiative, the bank will provide payment, clearing and settlement services on the eNAM platform to facilitate trade between a buyer and seller of an agri produce. “Kotak has integrated its payment system and portal directly with the payment interface of the eNAM platform to enable quick and safe transactions for agri participants,” it said.

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Fino Payments Bank goes live with enhanced deposit limit of ₹2 lakh

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Fino Payments Bank has increased the end of the day account balance limit to ₹ 2 lakh for its customers. The move is in line with the revised guidelines announced by the Reserve Bank of India. The bank, which became profitable in the fourth quarter of 2020-21, went live with the enhanced limit effective May 1, 2021..

“The increased deposit limit allows our customers to save more money in their account. Further, our existing sweep account mechanism continues with our partner bank wherein customers can save funds in excess of ₹ 2 lakh,” said Ashish Ahuja, COO, Fino Payments Bank.

Existing savings interest rate will be applicable up to ₹2 lakh in Fino account. Funds in sweep account will get interest rates as set by Suryoday Small Finance Bank, the partner bank.

The bank deposits are insured under the Deposit Insurance and Credit Guarantee Corporation.

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CCEA clears strategic disinvestment of IDBI Bank, BFSI News, ET BFSI

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The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd. The extent of respective shareholdings to be divested by the Government of India and the Life Insurance Corporation of India (LIC) will be determined at the time of structuring of transaction consultation with RBI.

Government of India (GoI) and LIC together own more than 94% of equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter

The LIC Board of Directors have passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd by divesting its stake in conjunction with a strategic stake sale proposed by the government, with the goal of relinquishing management control and considering price, market outlook, statutory requirements, and policyholder interests.

It is expected that strategic buyer will infuse capital, new technologies, and best management practises for the optimal development business potential and growth of IDBI Bank Ltd.’s and will generate more business without relying on LIC or government assistance/funds.



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KCCI seeks extension of NPA classification period

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The Kanara Chamber of Commerce and Industry (KCCI) has sought several measures, including lenient NPA norms, to save MSMEs (micro, small and medium enterprises) affected by Covid pandemic.

Reacting to the measures announced by RBI on Wednesday to alleviate finance constraints of various stakeholders, Isaac Vas, President of KCCI, told BusinessLine that MSMEs are in critical condition because of the decline in business for the past one year due to Covid pandemic.

He said NPA classification period should be doubled to 180 days. This will help MSMEs to manage their finances better without pressure, he said.

Seeking the immediate implementation of Stressed Asset Restructure Scheme, he said the last date should be extended till March 31, 2022. RBI should ease norms of applicability to cover more MSMEs with NPA and monitor implementation of the scheme, he said.

In respect of working capital facilities sanctioned in the form of cash credit/overdraft (CC/OD), lending institutions were permitted to defer till March 31 2021. “This has put MSMEs under pressure because of continued pandemic effect. We request RBI to extend the repayment due date till March 31 2022,” he said.

Stating that lockdown and restrictions on trade have aggravated the conditions, he said this would put immense economic burden on manufacturers and would potentially lead to closures and loss of jobs. “It is our estimate that thousands of units across India would be directly impacted leading to loss of jobs,” he said.

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Kotak Mahindra Bank to facilitate digital transactions on eNAM platform, BFSI News, ET BFSI

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Kotak Mahindra Bank announced that it has been selected as a digital payments partner by the National Agriculture Market (eNAM), a pan-India electronic trading portal for farm produce. All stakeholders on the eNAM network, including farmers, traders, and farmer producer organisations (FPOs), will be able to facilitate online transactions through Kotak Mahindra Bank.

Kotak will facilitate trade between a buyer and seller of agricultural produce by providing payment, clearing, and settlement services on the eNAM platform. To allow fast and secure transactions for agri participants who have joined the eNAM platform, Kotak has integrated its payment system and portal directly with the eNAM platform’s payment interface.

BS Sivakumar, President & Key Leadership Team member, Kotak Mahindra Bank said, “Farmers will have more control over pricing decisions, more transparency, and more financial support thanks to the eNAM online ecosystem. We are ecstatic to be one of the first banks to join eNAM as an online payments and transactions partner, and to contribute to the country’s agricultural sector’s digital transformation.”



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IDBI Bank: CCEA approves strategic disinvestment and transfer of management control

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The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank.

 

The extent of respective shareholding to be divested by Central government and LIC would be decided at the time of structuring of the transaction in consultation with the RBI, an official release said.

IDBI Bank’s ownership

The Central government and LIC together own more than 94 per cent of equity in IDBI Bank. While the government owns 45.48 per cent stake, the shareholding of LIC in IDBI Bank stands at 49.24 per cent.

LIC is currently the promoter of IDBI bank with management control while the Central government is the co-promoter.

LIC’s Board has passed a resolution to the effect that the insurer may reduce shareholding in IDBI Bank through divesting its stake along with strategic stake sale as envisaged by the government with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulations and interest of policyholders.

The decision of LIC‘s Board is also consistent with the regulatory mandate to reduce its stake in the bank. It is expected that the strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank and shall generate more business without any dependence on LIC and government assistance/funds, the release added.

Resources through strategic disinvestment of government equity from the transaction would be used to finance developmental programmes of the government benefiting the citizens, the release added.

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