Category: Banking & Finance

Suryoday Small Finance Bank posts ₹1.92-crore loss in Q2

Banking & Finance

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Suryoday Small Finance Bank’s net loss narrowed to ₹1.92 crore in the second quarter ended September 30, 2021 against net loss of ₹47.72 crore in the first quarter. The small finance bank had reported a net profit of ₹27.24 crore in the year ago quarter.

Net interest income (difference between interest earned and expended) was up 34.4 per cent year-on-year to ₹147.2 crore (₹109.5 crore in the year-ago quarter).

Other income, including processing fees, profit on sale of investments, income on dealing in priority sector lending certificates, etc,,jumped 194.3 per cent y-o-y to ₹33.4 crore ( ₹11.3 crore).

While the operating profit was up 61.9 per cent y-o-y to ₹79.7 crore (₹51.1 crore), provisions and contingencies, up more than five times y-o-y to ₹97.3 crore (Rs ₹14.7 crore) weighed down the bottomline.

Gross NPAs rose to 10.2 per cent of gross advances vis-a-vis 9.5 per cent as at June-end 2021 and 2.3 per cent as at September-end 2020. Net NPAs were unchanged at 4.5 per cent of net advances quarter-on-quarter (QoQ) but up 0.4 per cent in the year ago period. Gross advances were up about 20 per cent y-o-y to ₹4,470 crore, disbursements jumped to ₹1,067 crore (₹360 crore in the preceding quarter).

Baskar Babu R, MD & CEO, said the increasing trend of repayment behaviour, which was witnessed in the first quarter, improved during the second quarter as the restrictions across States eased businesses resumed.

Further, during October 2021 as well, the bank disbursed ₹359 crore and reported collection efficiency of 83 per cent (one-EMI adjusted) and 104 per cent (overall).

Deposits declined a shade to Rs ₹3,129 crore against Rs ₹3,140 crore in the year-ago quarter. The proportion of retail deposits increased to 87.9 per cent from 70.5 per cent in the year ago period.

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Indiabulls Housing Finance Q2 profit down 11.4%

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Indiabulls Housing Finance registered an 11.4 per cent drop in its consolidated net profit for the second quarter of the fiscal at ₹286.34 crore compared to ₹323.2 crore a year ago.

Total revenue from operations fell 13.5 per cent to ₹2,232.79 crore for the quarter ended September 30 against ₹2,581 crore in the same period last fiscal.

Retail loan disbursal grows

Its loan book was at ₹64,062 crore, down 2.1 per cent from ₹65,438 crore as on June 30.

“With co-lending partnerships in place, retail disbursal growth has gained momentum in FY22.

The company disbursed retail loans of ₹325 crore through co-lending in the month of September. This will scale up to ₹500 crore by December 2021 and ₹800 crore by March 2022, Indiabulls Housing Finance said in a statement on Thursday.

It is on track to disburse ₹1,000 crore of retail loans through co-lending in the third quarter of the fiscal, it added.

Gross NPAs were at 2.69 per cent as on September 30 versus 2.86 per cent as on June 30 and 2.21 per cent as on September 30, 2020.

Net NPAs were at 1.53 per cent as on September 30 compared to 1.63 per cent a year ago.

Shoring up provisions

“The balance sheet has been strengthened by shoring up provisions to ₹3,153 crore, 4x times the regulatory requirement and equivalent to a healthy 4.9 per cent of our loan book and 152 per cent of gross NPAs,” the statement said.

The company restructured loans of ₹96.7 crore, equivalent to 0.15 per cent of its loan book, under the restructuring frameworks 1.0 and 2.0 combined.

Collection efficiency has now normalised to pre-Covid levels.

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Department of Posts, payments bank arm to sell Bajaj Allianz Life products

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Bajaj Allianz Life Insurance Company (BALIC) has entered into a strategic partnership with Department of Posts and India Post Payments Bank to offer two Point of Sale (PoS) products — a term product and an annuity product — through the postal department’s network of 1,36,000 banking access points and the payments bank’s 650 branches.

Through this alliance, BALIC has become the first private life insurer in the country to enter into a tie up with the Department of Posts for sale of PoS products.

Augment earlier offerings

Speaking to BusinessLine post the announcement of this partnership, Tarun Chugh, Managing Director & Chief Executive Officer, BALIC, said that Bajaj Allianz Life Smart Protect Goal and Bajaj Allianz Life Guaranteed Pension Goal will be available to customers in addition to DOP’s existing Postal Life Insurance and Rural Postal Insurance products.

Chugh said. While SPG is a term insurance product, GPG is an annuity product that aims to meet post retirement expenses as it offers guaranteed and fixed pension product. “It’s a guaranteed pension product”, Chugh said.

Expand access

This alliance will enable the lakhs of Gramieen Dak Sevaks to offer financial solutions in rural areas.

“We are confident that this partnership will play an integral role in increasing the adoption of life insurance across various customer segments.”, Chugh said.

It maybe recalled that BALIC had, in 2018, entered into corporate agency agreement with IPPB. Now, this arrangement is being expanded into a more comprehensive and expansive agreement with the inclusion of the Department of Posts (DoP). , according to Chugh.

Pawan Kumar Singh, DDG – FS & PBI, Department of Posts (DoP), said, “With this partnership, we will take financial inclusion forward. The Department of Posts is going to play a major role in ensuring financial inclusion in days to come,” he said.

Financial inclusion

Singh added that technology will play a major role in financial inclusion and highlighted that the entire network of 1.57 lakh post offices is seamlessly connected.

J Venkatramu, MD & CEO, India Post Payments Bank, said that IPPB already offers Pradhan Mantri Jeevan Jyoti Bima Yojana to its customers that aligns with Government’s mission of creating a universal social security net and making insurance affordable for the underprivileged and disadvantaged sections.

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Banks allowed to offer interest rate on FCNR (B) deposits linked to ARR

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The Reserve Bank of India has decided to permit banks to offer interest rates on FCNR (B) deposits using widely-accepted ‘Overnight Alternative Reference Rate (ARR) for the respective currency’ with an upward revision in the interest rates ceiling by 50 basis points (bps).

This comes in view of the impending discontinuance of LIBOR (London Inter-Bank Offered Rate) as a benchmark rate.

As a measure to handle the information asymmetry during the transition, the Foreign Exchange Dealers Association of India (FEDAI) may publish the ARR till such time the widely-accepted benchmark is established, the central bank said in a circular to banks.

The RBI said the interest rates ceiling on FCNR (B) deposits of 1 year to less than 3 years shall be overnight ARR for the respective currency / Swap plus 250 bps against LIBOR/ Swap plus 200 bps now.

Further, the interest rates ceiling on FCNR (B) deposits of 3 years and above up to and including 5 years shall be overnight ARR for the respective currency / Swap plus 350 bps against LIBOR/ Swap plus 300 bps now.

Foreign Currency (Non-Resident) Account (Banks) scheme allows non-resident Indians (NRIs) and Person of Indian Origin (PIO) to open a term deposit account (for terms not less than 1 year and not more than 5 years) in India in any permitted currency — that is a foreign currency which is freely convertible.

Such accounts may be held jointly in the names of two or more NRIs/ PIOs. NRIs/ PIOs can also hold such accounts jointly with a resident relative on ‘former or survivor’ basis (relative as defined in Companies Act, 2013).

The resident relative can operate the account as a Power of Attorney holder during the life time of the NRI/ PIO account holder.

RBI said the overnight ARR for the respective currency / Swap rates quoted/ displayed by FEDAI shall be used as the reference for arriving at the interest rates on FCNR (B) deposit.

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NPCI Bharat BillPay on-boards ICICI Prudential Life Insurance on ClickPay

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NPCI Bharat BillPay has tied up with ICICI Prudential Life Insurance to provide ClickPay to the insurer’s customers.

ICICI Prudential Life Insurance is the first insurance company to offer this facility of ClickPay to its customers empowering them to make renewal premium payments with ease.

“To offer an automated and valuable insurance premium payment experience, ICICI Prudential Life Insurance will generate the ClickPay link and share it with the customers which will redirect them to the payment page comprising payment details,” said a statement on Thursday.

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CredAble launches UpScale app – The Hindu BusinessLine

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AI-powered technology platform CredAble has launched UpScale,a credit and cash flow management app enabling growth for SMEs in the country.

“UpScale connects with the existing accounting software of the business, syncs in transaction details, connects with bank accounts and credit bureaus and gives instant access to working capital with the help of partnering financial institutions,” it said in a statement.

Nirav Choksi, Co-founder and CEO, CredAble said, “Due to broken financial management, only 16 per cent of MSMEs have access to formal credit, creating a gap of $ 350 billion. It is important that MSMEs manage their finances better and scale faster.”

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FinMin convenes stakeholders’ meeting for ensuring seamless flow of credit

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The Finance Ministry has convened a stakeholders’ conference, involving participation of chiefs of major lenders, secretaries of various central ministries/ departments, and industry associations, on November 17 and 18 for building synergy for seamless flow of credit into different sectors of the economy.

Secretaries representing various ministries/ departments of the Government of India are expected to provide insights to lenders pertaining to initiatives or projects in pipeline of their respective ministries/ departments that may require funding support.

Industry representatives too will be sharing their perspective on the evolving demand-supply situation in the economy and their credit requirements.

Also read: Credit offtake pickes up over the last two fortnights

This meeting comes in the backdrop of degrowth in corporate credit that lenders have witnessed on a year-on-year basis.

However, banks have built a robust pipeline of loan sanctions and they expect disbursals to pick up steam either towards the end of the current quarter or from the beginning of next quarter.

The chiefs of all public sector banks, top six private sector banks, six large non-banking finance companies, four all India financial institutions, and IIFCL and IFCI have been invited to participate in the meeting.

Message to banks

In his recent meeting with the chiefs of public sector banks and certain private sector banks, Shaktikanta Das, Governor, Reserve Bank of India (RBI), emphasised the need for banks to continue providing necessary support in the revival of economic activity.

Das had also advised the banks to remain vigilant to any emerging signs of vulnerabilities and take timely remedial measures to mitigate the risks and maintain the stability of not only the institutions themselves but also of the overall financial system.

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UCO Bank enters co-lending agreement with Aadhar Housing Finance, BFSI News, ET BFSI

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KOLKATA: Kolkata-based UCO Bank on Wednesday entered into a co-lending agreement with Aadhar Housing Finance to offer home loans at competitive rates, a bank spokesman said.

The partnership aims at providing easy and convenient home finance solutions to customers from the economically weaker sections of society, he said.

The co-lending framework of the Reserve Bank of India provides a tool for banks and non-banks to collaborate, leverage on their respective strengths to give an affordable solution to the unserved and underserved sections.

Speaking on the occasion, UCO Bank MD and CEO Atul Kumar Goel said, “Home loan penetration in India at around 10 per cent is one of the lowest globally.”

Pandemic induced demographic changes, initiatives taken by central and state governments such as Pradhan Mantri Awas Yojana, reduction in GST on affordable housing and stamp duty cuts are expected to give a fillip to the affordable housing sector especially in Tier-2 and smaller centres, he said.



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Lysto raises $3 m funding from BEENEXT, others

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NFT start-up Lysto on Thursday said it has raised $3 million (about ₹22.3 crore) from various entities, including BEENEXT, Better Capital and Cloud Capital.

The seed round saw participation from angel investors and entrepreneurs, including Binny Bansal (Flipkart co-founder), Sandeep Nailwal and Jaynti Kanani (Polygon co-founders), Pradyumna Agarwal (Temasek Managing Director), Nitish Mittersain (Nazara Games founder) and Kunal Shah (Cred founder).

Besides, Ashish Hemrajani and Parikshit Dhar (BookMyShow co-founders), Anupam Mittal (Shaadi.com), Ashish Gupta (Helion Ventures founder), Kumar Sudarsan (Qwikcilver founder) and others also participated in the funding round, according to a statement. The funding will help with product development and allow Lysto to invest in the expansion of team that will help achieve its mission of furthering and simplifying the adoption of NFTs, it added.

NFTs

An NFT (Non-fungible token) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore, not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.

In an increasingly digital world, businesses and consumers are turning to NFTs as a means of establishing unique ownership of digital assets on the blockchain.

Lysto, which was founded in 2021, has offices in Bengaluru and Singapore. It aims to take NFTs to more than 4 billion internet users through millions of use cases.

“NFTs are becoming an integral part of business and culture. With its applications across industries, it is a multi-billion dollar industry, which is largely restricted to digital art and collectibles currently.”

“As the market expands, we see that every e-commerce player, every production (entertainment, gaming, animation), and every brand would want to launch NFTs to raise funds and monetise their offerings,” Sadiq Ahamed, founder and CEO of Lysto, said.

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UPI AutoPay sees robust consumer acceptance

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The UPI AutoPay facility has seen widescale adoption by consumers as the norms for standing instructions for recurring payments of the Reserve Bank of India kicked in from October 1.

Data with the National Payments Corporation of India revealed that there were over 40.3 lakh mandate registrations on AutoPay in October with 39 remitter banks on the platform. A total of 1.33 crore mandates were executed on AutoPay last month.

Also read: UPI hits new record with ₹7.71-lakh crore worth of transactions in October

State Bank of India, HDFC Bank and Bank of Baroda are the top three banks in terms of registration of mandates in October with 13.8 lakh, 4.04 lakh and 3.56 lakh mandates registered respectively with them.

Mandate registration refers to the transaction when the consumer creates a recurring mandate for recurring payments. Execution refers to the transaction when the recurring debit is done on the remitting account.

Sharp uptick

In September too, UPI AutoPay saw a sharp uptick in customer adoption with a 31.43 lakh mandates registered with 35 banks. Over 70.9 lakh mandates were executed on AutoPay in September.

The transactions in October and September were a sharp jump from August when just 17.7 lakh mandates were registered and a total of 33.5 lakh mandates were executed.

The UPI AutoPay services was launched last year for recurring payments. Customers can enable recurring e-mandates on it for payments such as utility bills, entertainment subscriptions, EMI payments, insurance and mutual funds.

A number of merchants including PhonePe, Netflix, Paytm, Gaana, Disney Hotstar, Policybazaar are live on the platform.

Experts and banks had expected it to gain popularity amongst consumers and a surge in card and UPI-based mandates as many payment providers were still in the process of meeting the RBI’s recurring payment norms.

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