Private lender, RBL Bank has tied-up with Tide India, a UK-based bankingfintech, to provide banking infrastructure for Tide’s India platform focused on the SME segment.
This collaboration will enable Tide to bring its platform to the Indian markets with a full-fledged launch. Under the tie-up, businesses, especially small and medium-sized enterprises have an option to open current and savings accounts at RBL Bank through Tide’s business platform.
Depending on customer requirements, the Bank can also integrate its payment APIs. Tide plans to acquire 25,000 customers in the next financial year and scale up to two million customers in the next five years.
Apart from supporting the organised SME sector, Tide will also focus on serving the unregistered and unorganised sector, helping bring these SMEs into the mainstream by providing them access to RBL Bank’s plethora of business banking products and services.
Surinder Chawla, Head Branch Banking, RBL Bank said, “RBL Bank has agile technological capabilities and compelling customer offerings to help Tide build a strong foundation in the country and scale up its business. Together, we are passionate about delivering innovative and integrated services that will improve the overall banking experience for the SME segment.”
Oliver Prill, Tide CEO said, “RBL Bank offers industry leading banking, payments and security technology, giving Tide the foundations that will enable us to build the best possible service to help SME owners save time and money through its digital banking capabilities.
Prill added, “With this partnership, we are ready to begin initial testing of Tide India, before entering into similar partnerships with other leading fintech providers to build our platform during the course of 2021”
Private sector lender RBL Bank on Tuesday said it will provide banking infrastructure for Tide’s India platform, which is focussed on small and medium enterprises.
“This collaboration will enable Tide to bring its platform to the Indian markets with a full-fledged launch,” it said in a statement on the tie-up with Tide India, which is a part of business banking fintech Tide UK.
“Under the tie-up, businesses — especially small- and medium-sized enterprises — have an option to open current and savings accounts at RBL Bank through Tide’s business platform. Depending on customer requirements, the bank can also integrate its payment APIs (application programming interfaces) to enable Tide users to make seamless transactions from Tide’s platform,” it further said.
Apart from supporting the organised SME sector, Tide will also focus on serving companies in the unregistered and unorganised sector. It plans to acquire 25,000 customers in the next financial year and scale up to 20 lakh customers in the next five years.
“With this partnership, we are ready to begin initial testing of Tide India, before entering into similar partnerships with other leading fintech providers to build our platform during the course of 2021,” said Oliver Prill, Tide CEO.
Surinder Chawla, Head – Branch Banking, RBL Bank, said: “RBL Bank has agile technological capabilities and compelling customer offerings to help Tide build a strong foundation in the country and scale up its business.”
Private lender HDFC Bank’s netbanking and mobile banking platforms suffered an outage on Tuesday, leading to customers of the bank complaining on various social media platforms. The outage comes amidst the lender being under scrutiny of the Reserve Bank of India (RBI) for repeated digital outages, for which the regulator had barred HDFC Bank from the issuance of new credit cards as well as digital business activities.
HDFC Bank in a tweet confirmed the outage, saying “Some customers are facing intermittent issues accessing our NetBanking/MobileBanking App. We are looking into it on priority for resolution,” The lender further added “We apologize for the inconvenience and request you to try again after sometime. Thank you.”
Some customers are facing intermittent issues accessing our NetBanking/MobileBanking App. We are looking into it on… https://t.co/awNg03csei
— HDFC Bank Cares (@HDFCBank_Cares) 1617089320000
Customers of the bank expressed their anguish with the outage on the lender’s platforms through various social media posts.
@HDFC_Bank Whats going on? One simple address update taking more than 2 weeks, now site is down !!!!… https://t.co/WWg2YJCLSm
The RBI had in December asked HDFC Bank to stop all digital launches, as well as source new credit card customers. The order came in light of numerous outages across the lender’s electronic banking services, for which the regulator had asked the management to examine lapses. Between 2018 and 2020, HDFC Bank suffered three outages across its platforms, with the most recent outage, attributed to a power outage at the lender’s primary data centre, taking place in November 2020.
HDFC Bank in February 2021 had submitted a plan to the RBI to stop its glitches across its technology platforms, according to a report by The Economic Times (ET). The plan included various short term and long term measures – which would take upto three months to implement.
The forced liquidation of more than $20 billion in holdings linked to Bill Hwang’s investment arm is drawing attention to the covert financial instruments he used to build large stakes in companies.
Much of the leverage used by Hwang’s Archegos Capital Management was provided by banks including Nomura Holdings and Credit Suisse Group through swaps or so-called contracts-fordierence (CFDs), according to people with direct knowledge of the deals. It means Archegos may never actually have owned most of the underlying securities — if any at all.
Archegos troubles
While investors who build a stake of more than 5 per cent in a US-listed company usually have to disclose their position and future transactions, that’s not the case with stakes built through the type of derivatives apparently used by Archegos. The products, which are made to exchanges, allow managers like Hwang to amass stakes in publicly traded companies without having to declare their holdings.
The swift unwinding of Archegos has reverberated across the globe, after banks such as Goldman Sachs Group and Morgan Stanley forced Hwang’s arm to sell billions of dollars in investments accumulated through highly leveraged bets. The selloff roiled stocks from Baidu to ViacomCBS, and prompted Nomura and Credit Suisse to disclose that they face potentially significant losses on their exposure. One reason for the widening fallout is the borrowed funds that investors use to magnify their bets: a margin call occurs when the market goes against a large, leveraged position, forcing the hedge fund to deposit more cash or securities with its broker to cover any losses. Archegos was probably required to deposit only a small percentage of the total value of trades. Massive unwinding
The chain of events set off by this massive unwinding is yet another reminder of the role that hedge funds play in the global capital markets. A hedge fund short squeeze during a Reddit-fueled frenzy for Gamestop Corp. shares earlier this year spurred a $6 billion loss for Gabe Plotkin’s Melvin Capital and sparked scrutiny from US regulators and politicians.
The idea that one firm can quietly amass outsized positions through the use of derivatives could set o another wave of criticism directed against loosely regulated firms that have the power to destabilize markets. While the margin calls on Friday triggered losses of as much as 40 per cent in some shares, there was no sign of contagion in markets broadly on Monday. Rescues galore
Contrast that with 2008, when Ireland’s then-richest man used derivatives to build a position so large in Anglo Irish Bank it eventually contributed to the country’s international bailout. In 2015, New York-based FXCM Inc. needed rescuing because of losses at its UK ailiate resulting from the unexpected depegging of the Swiss franc. Much about Hwang’s trades remains unclear, but market participants estimate his assets had grown to anywhere from $5 billion to $10 billion in recent years and total positions may have topped $50 billion.
CFDs and swaps are among bespoke derivatives that investors trade privately between themselves, or over-the-counter, instead of through public exchanges. Such opacity helped to worsen the 2008 financial crisis and regulators have introduced a vast new body of rules governing the assets since then.
Eight PSU Banks namely Vijaya Bank, Corporation Bank, Andhra Bank, Syndicate Bank, Oriental Bank of Commerce, United Bank of India,Allahabad Bank and Dena Bank will see merger coming into effect from April 1, 2021. Customers of any of the above listed banks should know about the following changes and the steps they will have to take for the same.
1. Account number: In case of the past bank mergers there was no change in the account number for the bank customers say for in the case of Union Bank of India, only the IFSC code changed. Also, there have been known instances where the bank has checked with the entity with which you have set the electronic clearing settlement (ECS) such as for SIP, utility bill payment etc. for change in the ECS i.e. matched their ECS for the old ECS.
The transition in the case of Bank of Baroda has resulted in a change in the account number for customers. What you need to do in respect of bank account number, IFSC and MICR: Here the onus shall be on the bank customer to modify or update previously given ECS mandates and also update such details with various entities including tax department, EPFO, insurers or brokers for that matter.
2. Cheque books: From 1 April, the cheque books of the banks getting merged will not be valid. New cheque books from the anchor banks will be provided. For example, the cheque books of Oriental Bank of Commerce and United Bank of India will be valid only until 31 March. The two banks are merged with Punjab National Bank.
Some banks could also offer more time to customers as the RBI has allowed some banks to continue with the old cheque books for another quarter or two. For example, Syndicate Bank customers can use their cheque books until 30 June. Customers will need to track their banks’ developments to know when they can continue using the cheque books.
3. Fixed Deposits & Loans: These deposits are in fact contracts for some predefined period and any change in structure of the bank will not result in any interest change for you. Likewise, you can continue with the deposit until maturity at the same rate, irrespective of whether the deposit rate at the merged entity is lower or higher.
Similar to FD contracts, home loan is also an agreement between the borrower and lender and in the event of bank merger there shall be no change on the previously stipulated terms. Over the past one year, the rates of the merging bank and the anchor bank have converged to a common ‘external benchmark lending rate’ (EBLR). In case there is a review clause in loan term then the rate of interest of the acquiring or anchor bank may apply.
4. Money transfer: The Indian Financial System Code (IFSC) and Magnetic Ink Character Recognition Code (MICR) will change for some banks and will remain the same for others. For instance, Union Bank of India, the account number has not changed Only the IFSC code has changed. Every bank migration is different.
Customers will again need to check with their bank on what has changed and what has not. Accordingly, they will need to change their ECS instructions for loans and other payments such as life insurance and mutual fund investments
GIC Housing Finance on Tuesday said it has raised ₹195 crore through issuance of non-convertible debentures (NCDs) to Aditya Birla Sun Life Mutual Fund on private placement basis.
“…Pursuant to the authority accorded by our board… 1,950 numbers of NCDs, having a face value of ₹10,00,000 each at par for an aggregate amount of ₹195 crore, issued on private placement basis,” GIC Housing Finance said in a regulatory filing.
The NCDs have been allotted to Aditya Birla Sun Life Mutual Fund and carry an interest rate of 6.94 per cent per annum.
GIC Housing Finance said the NCDs are proposed to be listed on the BSE.
Shares of GIC Housing Finance were trading 1.21 per cent higher at ₹117.15 apiece on the BSE.
The Finance Industry Development Council (FIDC) on Tuesday announced the appointment of TT Srinivasaraghavan, Managing Director, Sundaram Finance, as its Chairman Emeritus.
It also announced Sanjay Chamria, Vice-Chairman and Managing Director, Magma Fincorp, and Umesh Revankar, Managing Director, Shriram Transport Finance Co, as its Co-Chairmen.
The appointments are with effect from April 1, 2021, FIDC said in a statement.
The All-India IDBI Officers’ Association has cautioned that any move by the Life Insurance Corporation (LIC) of India to offload the stake held in IDBI Bank could hurt the interests of policyholders of LIC. The public sector life insurer was permitted to acquire up to 51 per cent equity in IDBI Bank, breaching the cap of 15 per cent originally stipulated for such transactions.
In a letter to the Chairman, Insurance Regulatory and Development Authority of India (IRDAI), Vithal Koteswara Rao AV, General Secretary of the Association, said that various reports in the media have suggested that LIC has been making repeated efforts to offload the stake it holds in IDBI Bank.
Any loss that the LIC incurs in the transaction will, in turn, be distributed among the policyholders while declaring bonuses. The stake it holds in the bank was purchased at an average price per share of about ₹60 in 2019 whereas the current market price of the IDBI Bank share is at ₹40, Rao said.
The LIC of India holds 529,41,02,939 shares of IDBI Bank currently. When seen in absolute terms, the deal, if allowed to go through, will cause a loss that could runs into several thousands of crores, Rao said in the letter. It will only force the policyholders of the LIC to bear the brunt of this humongous loss.
“As most of our members are also policyholders of the LIC, we are obliged to make this request on behalf of our members to arrange to initiate suitable measures to see that none of the policyholders is subjected to any financial loss when the LIC seeks to pare the stake it now holds in IDBI Bank,” the letter said.
Series of worrying events
The Association expressed its worry over a series of events initiated with the acquisition of 51 per cent of stake in IDBI Bank in January 2019, followed by an announcement by the Reserve Bank in March that year that the status of IDBI Bank stands changed from a public sector bank to a private bank.
The next was the unilateral modification of service conditions of IDBI Bank officers by the management linking their performance with prospective termination, which the Association feels has been made with a clear intention of subjecting them to victimisation ‘as per the whims and fancies of the management’.
The Union Finance Minister’s observation that interests of the workforce of any public sector bank being privatised would be protected, attracts interest. But the ground reality prevailing at the bank versus the Finance Minister’s pronouncement are contradictory, the Association says.
According to the Reserve Bank of India (RBI), most states will observe holidays on Good Friday, Dr. Babasaheb Ambedkar Jayanti and Ram Navami. Image: Reuters
Banks in India will remain closed for over 10 days in April 2021, including weekends and festivals. In the first four days of April, banks will remain shut for three days due to the closing of accounts on April 1, Good Friday on April 2, and Sunday on April 4. Apart from these 10 holidays, there are five more state-specific and region-specific holidays. It may be noted that only gazetted holidays are observed by banks all over the country. While planning bank-related work, people are advised to check the holiday date in their respective states. According to the Reserve Bank of India (RBI), most states will observe holidays on Good Friday, Dr. Babasaheb Ambedkar Jayanti and Ram Navami. The list of holidays given below has been notified by RBI under the Negotiable Instruments Act.
List of holidays in April 2021
01 April 2021- To enable banks to close their yearly accounts 02 April 2021- Good Friday 04 April 2021- Weekly off (Sunday) 10 April 2021- Second Saturday 11 April 2021- Weekly off (Sunday) 14 April 2021- Dr. Babasaheb Ambedkar Jayanti/Tamil New Year’s Day/Vishu/Biju Festival/Cheiraoba/Bohag Bihu 18 April 2021- Weekly off (Sunday) 21 April 2021- Shree Ram Navmi (Chaite Dashain)/Garia Puja 24 April 2021- Fourth Saturday 25 April 2021- Weekly off (Sunday)
According to the Reserve Bank of India (RBI), banks will remain operational on April 1, 2021, in Aizawl and Shillong. Also, banks across Agartala, Ahmedabad, Chandigarh, Guwahati, Jaipur, Jammu, Shimla, and Srinagar will not observe holiday on April 2, 2021. On April 14, 2021, banks in states such as Aizawl, Bhopal, Chandigarh, New Delhi, Raipur, Shillong and Shimla will remain functional. Similarly, on Ram Navmi, banks in Aizawl, Bengaluru, Chandigarh, Chennai, Guwahati, Imphal, Jammu, Kochi, Kolkata, New Delhi, Panaji, Raipur, Shilong, Srinagar and Thiruvananthapuram will remain open.
Other state-specific holidays in April 2021
05 April 2021- Babu Jagjivan Ram’s Birthday (Hyderabad) 06 April 2021- General Elections to Tamil Nadu Legislative Assembly 2021 (Chennai) 13 April 2021- Gudhi Padwa/Telugu New Year’s Day/Ugadi Festival/Sajibu Nongmapanba/1st Navratra/Baisakhi 15 April 2021- Himachal Day/Bengali New Year’s Day/Bohag Bihu/Sarhul 16 April 2021- Bohag Bihu (Guwahati)
Only Hyderabad will observe a bank holiday on April 5, 2021, on account of the birthday of Babu Jagjivan Ram. While on April 6, 2021, only Chennai will observe a bank holiday due to the assembly poll election in Tamil Nadu. Similarly, banks in Guwahati will remain shut for Bohag Bihu. Only banks in states such as Belapur, Bengaluru, Chennai, Hyderabad, Imphal, Jammu, Mumbai, Nagpur, Panaji and Srinagar, will observe a holiday on April 13, 2021. Similarly, on April 15, banks in only five states — Agartala, Guwahati, Kolkata, Ranchi and Shimla will remain closed.
Even as banks will remain shut on the above mentioned days, customers can avail online services. Moreover, mobile and internet banking will remain operational.
After its exit from Reserve Bank’s stringent prompt corrective action (PCA) framework, IDBI Bank is looking to return to the growth league as the government looks to sell it to a strategic investor and current promoter LIC seeks attractive valuations in its upcoming IPO.
The bank’s capital adequacy ratio is 14.77 per cent and has earned profit continuously for the last five quarters while its other ratios such as liquidity coverage ratio are much above the RBI’s norms.
Under PCA
Under the PCA imposed by RBI in 2017, the bank’s balance-sheet shrank as it could not extend loans to corporates and was not allowed to open branches.
It used the four years of PCA to restructure its business, cut exposure to large loans and bulk deposits and create verticals for various lending businesses to speed up turnaround time.
The bank has worked for the last four years on various parameters, done recoveries and raised its provision coverage ratio to 97%.
The lender is looking at Rs 4,000 crore of recoveries in the next fiscal. Retail loans
The share of corporate loans, which was about 67% four years back when it went under PCR, has shrunk to 40% now with 60% loans being retail. The bank is now targeting 55% loan book as retail and rest corporate. It wants to maintain low costs retail deposits at 48% of total deposits.
As a result, the institution has transformed from a project financier to a retail lender.
The company is looking to target the mid-corporate segment and will now avoid overexposure to certain industries and grow the business in a calibrated manner.
It sees over 12% growth in retail loans and 8-10% rise in corporate loans.
Growth
IDBI Bank plans to ramp up growth, regain lost corporate customers and sell stakes in its insurance, capital markets and technology arms. The lender plans to grow the loan book at 8-10% in the next fiscal and raise net interest margin beyond 3%.
The bank will focus on lending to manufacturing and maintain selective exposure to infrastructure.
The lender is looking to bring down the cost to income ratio to below 50% by pushing up income. Stake sales
It willing to sell a 25% stake in Ageas Federal Life to the foreign partner if they wanted to acquire the stake after the increase in foreign direct investment (FDI) is allowed and also in other subsidiaries.
IDBI Fintech is a 100% subsidiary of the bank, which provides end-to-end IT services to IDBI Bank, its group companies, its ultimate parent company LIC, as well as other external clients in the BFSI sector. The company was currently in the process of appointing merchant bankers to help identify a strategic joint venture partner. IDBI Capital Markets is the merchant banking arm of IDBI Bank and the lender is looking for a strategic partner in this company as well. Borrowings
Earlier this month, IDBI Bank’s board approved borrowing up to Rs 8,000 crore through rupee-denominated bonds in one or two tranches for FY2021-22.
Of the total, the bank will borrow up to Rs 3,000 crore via additional tier-I (AT1) bonds in one or more tranches, and up to Rs 1,000 crore in senior/infrastructure bonds by way of private placement.
Financial Express is now on Telegram.