Category: Banking & Finance

Trifecta Capital sees top-level exits

Banking & Finance

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Trifecta Capital, which provides loans to some of India’s biggest startups, has seen top-level exits in the last one year, and the company has allegedly not settled employees’ dues.

With no favourable response from the company, a few employees are now exploring legal options to reclaim their dues.

Some of the company’s noted exits include Aakash Goel, who was a partner with Trifecta for three years, financial controllers Ajay Kumar and Pankaj Kwatra, Director (Investments) Ankit Sharma and Senior Associate (Investments) Sunil Sampath.

In an email response to BusinessLine, Rahul Khanna, co-founder and Managing Partner, Trifecta Capital, said the company has always made sure that those who leave the firm depart on a positive note but equally, it expects all employees to adhere to the highest levels of integrity and abide by their employment agreements.

In recent months, an employee who quit the organisation explained that the company abruptly terminated the services of a finance controller serving his notice period and withheld his final settlement including the government dues of TDS and PF.

Without delving on individual case, Khanna said all employees are governed by their employment agreements and are expected to serve their notice period.

Raising concern on transparency in investments made, an employee said Trifecta invested in Wooplr Technologies Pvt Ltd in which Khanna was an equity shareholder and it turned out to be a bad debt within six months of investment.

Khanna said any investment committee members deemed to be an interested party, cannot participate in the decision-making process.

“We have always ensured that there is no conflict of interest in our decision-making process… but the nature of investment management business is such that a few investments may not deliver to their goals,” he said.

To date, Trifecta Capital has invested across over 70 companies and deployed about ₹2,000 crore supported many category-leading startups over these years, he added.

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Interest rates on education loans see a decline, BFSI News, ET BFSI

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The Covid-19 pandemic and rising fee structure of education has made it difficult for parents to fund their children’s higher studies.

As the Reserve Bank of India (RBI) slashed repo rates by 75 basis points in March and 40 basis points in May last year, the banks have cut down on loan rates across categories.

Public sector banks contribute over 70% of total education loans along with NBFCs. Public sector banks including Union Bank of India are offering the cheapest loans, with rates starting at as low as 6.80% for a Rs 20-lakh loan with a tenure of seven years.

Central Bank of India, Bank of India, Bank of Baroda, State bank of India offer education loan at 6.85%. Whereas, Punjab National Bank, IDBI bank, Canara Bank charge 6.85% Interest on Education Loan.

Bank of Maharashtra and Indian Bank charge 7.05% and 7.15% interest respectively on education loans.

State Bank of India’s (SBI) rates have dropped marginally by 5 basis points over the last two months.

In the recent announcement the Union government informed Parliament that Nearly 9.55% of education loans extended by public sector banks were categorized as non-performing assets (NPAs) as on 31 December.

Out of total education loans disbursed, 366,260 accounts worth ₹8,587 crore have turned bad, the govt said.



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CSB Bank aims at branch expansion of 30%, BFSI News, ET BFSI

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Private lender CSB Bank has outlined its plan to strengthen its branch expansion rate to 30% on a yearly basis, after scoping out the expansion of 101 branches during the FY21 fiscal. The movement followers the lender also developing its own application, named “CSB Wink”, that enables customers to open accounts instantly and remotely.

Narendra Dixit, Retail Head of CSB Bank, said “We are increasing our pan India distribution, which will complement our significant distribution strength in Kerala and South and help us in offering seamless services across the country to our valued customers.“

“We have significant distribution in deeper geography and now, we are leveraging that to build a strong agri and financial inclusion model in these markets. Also, in order to enhance our existing retail and franchise offerings, we have created digital on-boarding facilities, via CSB Wink that offers digital account opening, e-wallet facilities, online FD services, virtual debit cards and will aid in higher deposit centers to provide an evenly distributed footprint,“ he further added.

CSB Bank has 474 branches and 309 ATMs spread across 18 states and two UTs. The lender said the expansion of its branches would allow the expansion of offerings including Agriculture, SME, Corporate and NRI Banking services to customers, in an efficient manner.



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SBI widens scope of compassionate appointment scheme to cover the deceased employees’ dependents

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State Bank of India (SBI) has enlarged the scope of its scheme for compassionate appointment to support the dependents of the deceased employees.

This will help the dependent tide over the sudden crisis due to death/premature retirement of the sole bread earner of the family.

The Bank’s revised scheme for compassionate appointment will cover a dependent family member of a permanent employee who dies while in service or retires on medical grounds due to incapacitation before reaching the age of 55 years.

The “Revised Scheme for Compassionate Appointment” will also cover the death due to Covid-19 with retrospective effect from March 24, 2020 (the date of announcement of first nationwide lockdown).

The benefit of retrospective implementation will be extended only to the dependents of employees who expired due to Covid-19.

Ex-gratia or appointment option

The dependents of the deceased employee can exercise option to choose between “Revised Scheme for Compassionate Appointment” or “Scheme for payment of Ex-gratia in lieu of Compassionate Appointment” at their choice subject to fulfilling the eligibility criteria.

If the dependent family members of some of the deceased employees, who died due to Covid-19, on or after March 24, 2020, have received ex-gratia under “Scheme for payment of Ex-gratia in lieu of Compassionate Appointment” but wanted to opt for the “Revised Scheme for Compassionate Appointment”, they will have to refund the entire ex-gratia amount received, subject to his /her application for appointment being approved.

KS Krishna, General Secretary, All India State Bank of India Employees’ Association (AISBIEA), said: “The Scheme of Compassionate Appointment is a great solace and security for the employees and officers.

“We humbly request (the management) that the effective date of the new scheme be synchronised with the IBA-GoI approved scheme — August 05, 2014 — so that the distressed family of the departed employees since then are also rendered justice.”

The compassionate appointment is in the clerical and sub-staff cadre only. Such appointments will be sanctioned to the dependents of the deceased/premature retired employee where the monthly income of the family is less than 75 per cent of the last drawn gross salary.

In case an application is rejected under the “Revised Scheme for Compassionate Appointment”, the same may be considered under the “Scheme for payment of Ex-gratia in lieu of Compassionate Appointment”.

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Seven private banks see big rise in stressed retail loans during pandemic; PSBs escape, BFSI News, ET BFSI

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Seven private banks, including the top ones, saw an increase in their ratio of stressed retail loans rise during March and December 2020 as borrowers battled the pandemic-led slowdown.

The highest rise was of Karur Vysya Bank, which saw its stressed retail assets rato rise 280 bps to 5% in the March-December 2020 period while DCB Bank’s stressed assets grew 180 bps to 3.7% from 1.9%.

The retail stressed asset ratio at HDFC Bank rose 70 bps to 1.4% from 0.7%, IDBI Bank 120 bps to 2.5% from 1.3%, IndusInd Bank 170 bps to 4.2% from 2.5%, IDFC First Bank 50 bps to 2.3% from 1.8%, and at Kotak Mahindra Bank 60 bps to 2.6% from 2%. The stressed advances include gross non-performing assets and restructured standard advances.

On the other hand, most public sector banks saw their stressed retail advances ratio either falling or remaining flat during the period under review.

Among the public sector banks, only Punjab & Sind Bank saw the ratio shoot up 380 bps, higher than the private banks, and Bank of Baroda saw it rising 50 bps.

Private banks typically lend to salaried class and self-employed people, who have been hit hardest during the pandemic.

Unsecured loans

The Reserve Bank of India‘s moratorium on repayment of loans has delayed the stress in the segment where delinquencies have not yet stabilised and higher loan losses are expected to materialise in FY22, India Ratings has said.

“The performance of unsecured asset classes, such as microfinance loans, unsecured business loans and consumer loans, is worsening, given the borrower’s depleted financial cushions and the nature of these loans,” according to a report by India Ratings and Research.

Moratorium aid

The Reserve Bank of India’s moratorium on repayment of loans has delayed the stress in these segments where delinquencies have not yet stabilised and higher loan losses are expected to materialise in FY22, it said.

The report also said the severity of the impact of the pandemic on their income as well as the impact of the moratorium and fiscal measures on their credit behaviour is varied.

“Thus, the effectiveness and inclusiveness of government support schemes to improve the financial position of the end-borrowers is crucial and is a key monitorable,” it said.



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Rupee rises 9 paise against US dollar in early trade

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The rupee appreciated by 9 paise to 72.46 against the US dollar in opening trade on Thursday, supported by positive domestic equity markets and easing crude prices.

However, a strong US dollar against major currencies overseas restricted the rupee’s rise, forex dealers said.

At the interbank forex market, the local unit opened at 72.48 against the US dollar, then inched higher to 72.46, registering a rise of 9 paise over its previous close.

On Wednesday, the rupee had settled at 72.55 against the American currency.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 292.68 points higher at 50,094.30, and the broader NSE Nifty rose 90.50 points to 14,811.80.

After its two-day policy meeting, the US Fed reassured investors that it expects to keep its key interest rate near zero through 2023.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, surged 0.10 per cent to 91.53.

Brent crude futures, the global oil benchmark, fell 0.69 per cent to $67.53 per barrel.

Foreign institutional investors remained net buyers in the capital market as they bought shares worth ₹2,625.82 crore on Wednesday, according to exchange data.

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Morgan Stanley becomes first major U.S. bank to offer clients access to bitcoin funds, BFSI News, ET BFSI

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Morgan Stanley has become the first big U.S. bank to offer its wealth management clients access to bitcoin funds, CNBC reported on Wednesday.

In an internal memo, the bank told its financial advisers it would launch access to three funds allowing ownership of bitcoin, CNBC reported, citing people with direct knowledge of the matter. (https://cnb.cx/3vwOjou)

The decision was taken after the bank’s clients demanded exposure to the cryptocurrency, according the report.

Morgan Stanley did not immediately respond to a Reuters request for comment.

Bitcoin surged to a record high of $61,781.83 on Saturday, but has since fallen as investors consolidated gains and on news of plans by India to ban cryptocurrencies.

The cryptocurrency has been gaining mainstream acceptance lately, with Elon Musk’s Tesla Inc and Square Inc betting on it.

Last month, Bank of NY Mellon Corp formed a new unit to help clients hold, transfer and issue digital assets.

Access to the funds will only be allowed to people who have at least $2 million in assets held by the bank. Investment firms with at least $5 million at the bank will also be eligible. In both cases, the accounts have to be at least six months old, according to the report.

The bank will limit investments to 2.5% of total net worth even for investors with enough assets to qualify, the people said.

The two funds that will be offered are from Galaxy Digital, crypto firm founded by Michael Novogratz. The third fund is a joint effort from asset manager FS Investments and bitcoin company NYDIG. Clients could start investing in these funds next month, the report said.



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PNB sets-up subsidiary to manage credit card business, BFSI News, ET BFSI

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State-run Punjab National Bank (PNB) has set up a wholly-owned subsidiary to manage its credit card business, the bank said on Wednesday. A wholly-owned subsidiary of the bank namely PNB Cards & Services Ltd has been incorporated on March 16, 2021, by the Registrar of Companies, Delhi, it said in a regulatory filing. The subsidiary will undertake the non-financial support services related to credit card business of the bank.

The authorised capital of the company is Rs 25 crore and the paid-up capital is Rs 15 crore, PNB said.

The number of outstanding credit cards at the end of December 2020 of PNB stood at over 4.3 crore (43,402,879), according to the RBI data.

The value of transactions through credit cards was Rs 137.55 crore (Rs 13,755 lakh) at the point of sale (PoS) and Rs 1.17 crore (Rs 117 lakh) at the ATMs during the month.

The number of transactions at PoS were 5,79,244 while at the ATMs the number of transactions through credit cards were 3,871 in December 2020.



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Indian national sentenced to three years in US federal prison for call centre fraud

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An Indian national from Gurugram has been sentenced to three years in federal imprisonment on charges of call centre fraud that intended to cheat Americans of millions of dollars, a US attorney said.

Sahil Narang, 29, who was in the United States illegally at the time of his arrest in May 2019, is described in court documents as a key participant in a sophisticated so-called Tech Fraud and Refund Fraud online telemarketing schemes that targeted technologically unsophisticated computer users, usually senior citizens.

Narang had pleaded guilty on December 11, 2020, to conspiracy to commit wire fraud and 10 counts of wire fraud. He was sentenced on Wednesday to 36 months in federal prison to be followed by three years of supervised release, said the Acting United States Attorney Richard B Myrus.

According to federal prosecutors, Internet pop-up advertisements were used in the Tech Fraud scheme to deceive computer users into believing that they needed computer protection services.

The pop-up ads provided a telephone number to call and when the victims dialled the number, they were routed to call centre operators who perpetuated the lie that malware had been detected on the victims’ computers. They offered the victims supposed computer protection services at exaggerated prices.

In the Refund Fraud scheme, call centre operators telephoned those who had fallen prey to the Tech Fraud and offered to refund the sum previously paid.

Through manipulation that usually involved the display of false bank account balances on the customers’ computer screens, the operators convinced the victims that sums far in excess of the refund amount had accidentally been deposited into the victims’ accounts.

As the victims had not in fact received any money, those who “returned” money were actually sending more of their own money to the fraudsters, federal prosecutors said.

According to information presented to the court, Narang and others worked together to manipulate thousands of callers employing the Tech Fraud scheme, seeking to obtain from them an estimated $1.5 million to $3 million.

An FBI investigation determined that over a nine-month period Narang routed on average more than 70 calls to call centres every day. It is also estimated that Narang’s Tech Fraud scheme was successful 30 per cent of the time.

In round two of the scheme, the Refund Fraud scheme, executed during the same nine-month period, Narang and others associated with call centres sought to obtain from their victims cumulatively $560,900.

The FBI investigation identified at least nine individuals who fell victim to the Tech Fraud Scheme at a total loss of $110,900, which the FBI was able to intercept and return to the victims. During the investigation, the FBI interceded and prevented loss when a tenth victim was on the verge of losing up to $450,000 to the fraudsters.

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Deposit base growing 5-7% consistently for last 6 months: Airtel Payments Bank MD

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Active users are the people who transact with the payment bank or people who keep money with it.

Airtel Payments Bank has been witnessing roughly 5-7% month-on-month growth in its deposit base consistently for the last six months, its MD & CEO Anubrata Biswas said on Wednesday.

Currently, the bank has two crore active savings accounts. “During the pandemic our savings account customer base has increased, mainly in rural areas. Today, we are present in one lakh tier-VI villages. During Covid times people have really found value in this deep rural distribution,” Biswas told FE.

“We have seen roughly 5-7% month-on-month growth in deposit base consistently for the last six months,” he informed. Payments bank cannot undertake lending activities. These banks are allowed to invest minimum 75% of the customer deposits in government securities or treasury bills, and maximum 25% in current and time or fixed deposits with other scheduled commercial banks for operational purposes and liquidity management, according to the RBI’s guidelines for licensing of payment banks.

“The return from the government securities and the rates they offer will definitely be the future revenue driver for us,” Biswas said. Airtel Payments Bank is India’s first Payments Bank that launched in January, 2017. It became an associate of Bharti Airtel with effect from November 1, 2018.

The bank’s active user base has been growing around 60-65% on year-on-year basis. Active users are the people who transact with the payment bank or people who keep money with it.

“Currently we have an active user base of five crores. Especially, during Covid we have grown a lot in terms of active customer base, volume of transactions and revenues, among others. Our business correspondent network has really grown in size and scale. So, that business has grown. And, a lot of companies have realised that during this time they can use the technology and network that we provide for services. So, that business has also grown,” the MD said.
According to Biswas, the bank’s total revenues grew substantially as Covid has led to rise in digital transactions, growth in institutional services and healthy growth in business.

“The increase in business is built on principle of access. We are running the largest banking network in the country today. We have 340,000 monthly active banking points. In terms of banking points, we are running roughly double the formal banking size across the country,” he informed, adding on institutional services segment the bank was offering cash services and cash management, and it would be the largest micro-cash services player in the country.
After it introduced “Safe Pay” security feature in January this year to protect its customers from growing incidents of online payment fraud, around 2.5 lakh customers are using the product, which is optional. “Initially a lot of our existing customers switch it on. Then, new customers are coming everyday,” Biswas informed.

“This product is the first time in the country. A telecom company and a bank have come together to offer a solution, where the telecom network and the SIM of the users are linked to flash a message on the phone screen before the transaction is processed in the bank account,” he added.

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