Capital A, a venture fund for seed to early-stage start-ups, on Thursday said it has invested in Bengaluru-based B2B logistics-Tech startup RoaDo, its maiden investment from its proprietary corpus of $25 million (about ₹186.2 crore).
It, however, did not disclose the amount invested.
Every year, Capital A plans to invest in 8-10 companies with a ticket size of $50,000 to $500,000 and will participate in follow-on rounds as well, a statement said.
Firm’s services
RoaDo is a cloud-based platform aiming to optimise visibility, real-time control and efficiency in the supply chains. The platform also allows tracking and tracing of consignments without any need for GPS or sophisticated hardware, offers AI-enabled exceptions and alerts with actionable insights, and automated customer updates.
“Logistics is considered to be the backbone of any country’s economy… There is a need for a new generation of service providers who integrate infrastructure, technology and innovation to create solutions that help customers reduce operational costs and increase service efficiency,” Capital A founder Ankit Kedia said.
He added that Capital A’s strategic involvement with RoaDo is a step towards its mission to invest in diversified and high potential sectors.
“India is one of the biggest and fastest growing logistics markets in the world, and the potential is immense.
However, there is a lack of digitisation and optimisation of processes, RoaDo founder and CEO Murugan Manoj Kumar J said.
The early-stage support (pre-series A funding) from Capital A will help the company further expedite the development of its platform and take it to the markets in a more streamlined and impactful manner, he added.
She clinched the bronze medal in the women’s boxing (69kg), and received the Arjuna Award in August this year. The brand has set up a microsite displaying snippets that narrate the story of Borgohain’s preparedness to win a medal for the country at the Tokyo Olympics 2020. The microsite also allows users to click an augmented reality selfie with the Olympic medallist.
“For each long-term financial goal to achieve fruition, there is a need for astute planning, appropriate product selection and commitment to stay invested,” said Manish Dubey, chief marketing officer of the company.
The campaign has been rolled out digitally and across various social media platforms, to drive reach, visibility and engagement with customers.
Time period given by analyst is one year when Ujjivan Small Finance Bank Ltd. price can reach defined target. Ujjivan Small Finance Bank Ltd., incorporated in the year 2016, is a banking company (having a market cap of Rs 3638.10 Crore).
Ujjivan Small Finance Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2021.
Financials For the quarter ended 30-09-2021, the company reported a Standalone Total Income of Rs 691.93 Crore, down -3.40 % from last quarter Total Income of Rs 716.29 Crore and down -15.41 % from last year same quarter Total Income of Rs 818.01 Crore. The bank reported net profit after tax of Rs -273.79 Crore in latest quarter.
Investment Rationale Ujjivan SFB reported yet another quarter of loss at INR2.74bn as the stressed pool remained persistently elevated. While the aggregate stress pool (PAR>0) declined sequentially from 31% to 19%, the excessive stress suggests normalisation would be delayed beyond FY22. Restructured book increased from 5.5% to 10.2% sequentially, with loan loss coverage at 75% (including INR0.25bn of COVID provisions), driven by accelerated provisioning at ~10.4% of gross advances. Business momentum was revived with disbursals of INR31.2bn (near pre-COVID levels) and a declining share of MFI loans (70%). With limited visibility of RoA reflation and a stubborn stress pool, it downgrades Ujjivan SFB from ADD to REDUCE with a revised TP of INR20 (earlier INR34) and downgrade Ujjivan Financial Services from BUY to ADD with a revised TP of INR189 (earlier INR322).
Promoter/FII Holdings Promoters held 83.32 per cent stake in the company as of 30-Sep-2021, while FIIs owned 0.56 per cent, DIIs 0.76 per cent.
The world may be going crazy over digital currencies, but tiny Singapore is swimming against the tide.
The central bank has decided against offering a paperless version of the city-State’s legal tender — at least for now. Not because an electronic version of cash may flop, but because it’ll most likely be a hit. That could have consequences for the island’s financial stability and conduct of monetary policy. Even if those risks are manageable with in-built safeguards, why rock the boat?
In a paper detailing the economic case for a central bank digital currency, the monetary authority concludes that “there is no pressing need for a retail CBDC in Singapore at this point in time.” However, it will keep adding to its capability to issue one, just in case the private sector in the future hooks consumers to a particular payment mode only to shortchange them by abusing its monopoly power.
This is a pragmatic approach. Start-ups might welcome an online medium of exchange that’s widely available to the public, and not tied to a large competitor. Then they won’t need to invest in proprietary e-money systems to compete. The problem is that Singapore’s triple-A-rated sovereign has historically accumulated fiscal surpluses and is not known to cheapen its exchange rate to gain an export advantage. That makes its currency an attractive store of wealth. In fact, a digital version may be perceived as superior since paper cash is costly to store.
In a low-interest-rate environment, a Singapore digital dollar could thus walk away with all-important bank deposits, which account for 92 per cent of money supply and all of the online payments by households and firms. It would be a direct liability of the monetary authority and hence devoid of credit risk. The central bank could, however, tamp demand for its CBDC by putting limits on how much can be stored in a wallet. It could also restrict use only to residents and tourists, keeping it out of reach of global investors.
These checks may be crucial. The small, open Asian economy doesn’t set local interest rates. It guides financial conditions by tweaking the exchange rate of the Singapore dollar against a basket of trading partners’ currencies. Sacrificing monetary control to fit in with the zeitgeist of giving 5.5 million people a brand-new payment instrument is not a great trade-off. A digital Singapore dollar can wait.
But that doesn’t mean that the financial centre should stop gaining expertise. Even if the payment market stays sufficiently competitive to prevent consumers from being exploited, public-sector knowledge could come in handy should other emerging forms of electronic money — such as privately-issued Singapore dollar-denominated stablecoins — choose to utilise the technology. But why should Singapore bless private tokens when larger central banks such as the US Federal Reserve are deeply suspicious of them?
“Susceptible to runs”
Should the Fed decide to take the dollar digital, preempting the rise of China’s official e-CNY with its 140 million users (so far) may only be a secondary consideration. The immediate motivation could be to issue a safe andofficial alternative to increasingly popular stablecoins like Tether and USD Coin that peg their value 1:1 to the dollar. In its twice-yearly financial stability report this week, the Fed said that these digital tokens were “susceptible to runs” if people who invested in them decide to cash out simultaneously.
Without its own paperless currency, how will Singapore’s highly digital economy protect itself from global stablecoins? The Singapore dollar “could be vulnerable to being displaced by a widely used foreign digital currency,” the monetary authoritynotes,especially if it’s backed by a powerful e-commerce or social media network. The legal-tender nature of the home currency won’t save it from substitution because merchants aren’t bound to accept it as payment.
For example, it’ll be perfectly above board — if unlikely — for a local coffee shop to only take Diem, the soon-to-be-launched stablecoin backed by Meta Platforms Inc., formerly Facebook Inc. To take on foreign coins, it might make sense for Singapore to permit its homegrown banks to offer synthetic versions of the digital Singapore dollar. Rival Asian financial centre Hong Kong, which entrusts paper money to commercial issuers, has floated a similar idea. The proposed retail e-HKD would technically be a private liability of financial institutions, yet couldperform the role of tokenised public money. The Hong Kong Monetary Authority could let society benefit from online payments innovation without having to reinvent itself as a consumer-facing institution, a makeover that may be hard for any central bank to achieve.
Such a radical transformation may not even be desirable. If the digital Singapore dollar takes off as an alternative to bank deposits, lending can’t remain unaffected. As the monetary authority notes, in extremis, the introduction of a retail CBDC could lead to a greater role in the allocation of credit for the central bank. No central bank wishesto be pulled in that direction. While most other governments worry about whether anyone actually wants their paperless cash, Singapore’s problem is the opposite: A wildly successful digital currency may be too much of a good thing.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.
Mumbai: Bank of Baroda reported a 24 per cent growth in standalone net profit mainly due to a 23 per cent increase in other income which includes fees and bad loan recoveries and helped by a fall in provisions as bad loans decreased year on year.
Net Profit of Rs 2,088 crore in the quarter ended September 2021 from Rs 1,679 crore a year earlier. Other income increased to Rs 3,579 crore from Rs 2910 crore last year.
The rise in other income made up for the tepid growth in net interest income (NII) which is the main income the bank earns by giving loans. NII increased 2 per cent to Rs 7566 crore largely as the cost of deposits fell to 3.52 per cent in September 2021 from 3.99 per cent a year ago and covered up for a 6 per cent fall in total interest earned.
A 2 per cent year-on-year fall in provisions also helped the bank’s bottom line. Provisions fell to Rs 2754 crore from Rs 2811 crore a year ago and was lower than the Rs 4005 crore reported in June 2021.
Gross NPA ratio improved to 8.11 per cent in September 2021 from 9.14 per cent a year ago.
CEO Sanjiv Chadha said the worst of slippages was over and asset quality trends will only become better.
“We had guided for credit costs of 1.5% to 2% with likely trends on the lower of the range as we are sticking to our guidance this year … credit costs have come down, recoveries have improved and margins have been steady,” Chadha said.
Recoveries increased to 3,246 crore including 1,246 crore from written-off accounts and higher than the total recoveries of 1,981 crore reported in the same quarter last year. As with other major banks, BoB was helped by a 877-crore recovery from DHFL.
Total loan book increased 2% to 7.34 lakh crore from 7.19 lakh crore a year earlier mainly due to a 10% rise in retail loans led by a 33% growth in personal loans and a 23% growth in auto loans. Corporate loan book remained flat after a 10% drop in the first quarter ended June.
Chadha said though the corporate growth has been tepid for more than a year, he expects some demand to come in the second half of the fiscal as sectors like cement, steel, green energy and electric vehicles expand capacities.
Retail mortgages make up 64% of the bank’s 1.35 lakh total retail loans with high growth businesses like personal loans making less than 5% of the book.
Chadha expects the bank’s loan growth to be close to double digits this year led by growth in retail loans and the bank will continue to grow the high-risk auto and personal loan businesses with caution using credit appraisals, and will have a preference for its own customers than outsiders.
Kotak Mahindra Bank on Wednesday said it has completed the acquisition of a nearly 10 per cent stake in KFin Technologies for around Rs 310 crore. In September, the bank had informed about subscribing to 1,67,25,100 equity shares in KFin Technologies Pvt Ltd for a consideration of approximately Rs 310 crore, translating into an equity shareholding of 9.98 per cent.
“We would like to inform you that the bank has completed the said transaction on November 10, 2021,” Kotak said in a regulatory filing.
General Atlantic-backed KFin Technologies is an investor and issuer serving platform that provides financial technology solutions across asset classes like mutual funds, alternatives, insurance, and pension.
It serves 25 mutual funds and has a 35 per cent share in equity assets under management.
Kotak stock closed at Rs 2,076.80 apiece on BSE, down 0.97 per cent from the previous close. PTI KPM BAL BAL
The global rating company provided a new grade of B2, a notch higher than its previous level B3.
The bank, which was once counted among top rated private sector lenders, remains in the high-yield category that has higher funding costs compared to lenders in the investment grade.
The rating company changed Yes Bank’s outlook to ‘positive’ from ‘stable’ earlier.
“Moody’s has upgraded Yes Bank’s issuer rating to B2 from B3 because its funding and liquidity have substantially improved in the past year, which have strengthened depositor and credit confidence in the bank,” it said late Tuesday.
It also promoted Yes Bank’s Baseline Credit Assessment (BCA) and Adjusted BCA to b3 from caa2, a two-notch improvement.
The outlook change reflected Moody’s expectations of further improvement to the bank’s credit profile, driven by a clean-up of legacy stressed assets and/or improvements to its capital and profitability.
“The rating action also reflects the fact that despite the significant economic challenges since the onset of the pandemic, Yes Bank’s asset quality has deteriorated only modestly while its capital has remained stable,” the rating agency said.
About one and a half years ago, Moody’s Investors Service downgraded Yes Bank’s rating following the Reserve Bank of India imposing a 30-day moratorium that prevented the lender from making payments to its creditors.
The bank had also gone through a management change with former co-founder Rana Kapoor now facing several legal charges.
Yes Bank’s deposits increased over 65% between 30 September 2021 and 31 March 2020, after Indian regulators rescued the bank. Its deposit quality has also improved; current and savings account and retail term deposits represent 45% of total funding as of 30 September 2021, compared with just 31% as of 31 March 2020.
The bank has reduced its share of market funding, while its average liquidity coverage ratio (LCR)improved to 118% as of 30 September 2021 from 40% as of 31 March 2020.
Yes Bank’s asset quality remains weak and continues to pose risks to its profitability and capital, Moody’s said.
Yes Bank shares were a tad lower to close at Rs 13.03 on BSE Tuesday.
The Reserve Bank of India has set up a big data centre that can access data from banks’ systems, according to a report. The data centre will help prevent scams like PMC Bank, where data was masked by using dummy accounts. DHFL too had used a similar method to hide borrower accounts and stress.
The RBI is currently working with commercial banks and plans to extend it to urban cooperative banks.
The RBI plans to deploy more analytical functionalities on data from supervised entities to improve the overall functioning of the sector and improve data sanctity, the report said.
The expanded RBI data centre with new functionalities was to be completed in 2020 but was delayed due to Covid, which has now been completed and testing of system-to-system integration has been done with some banks.
PMC Bank scam
A total of 44 ‘borrowal accounts in the Punjab and Maharashtra Co-operative Bank, belonging to HDIL and its affiliates, had been ‘masked,’ with a view to hide these from the core banking system of the bank, the EOW has learnt.
Due to this, the loan default scam perpetrated in the bank over the years went unnoticed during successive audits.
Though access to the other accounts (saving, current or loan) was available to the employees of the bank as well as auditors, access to the aforesaid 44 accounts was masked by using special encrypted passwords.
The masking was done to hide the huge non-refunded personal loans allotted to HDIL promoters, Rakesh and Sarang Wadhwan. The outstanding borrowals in two personal accounts belonging to Rakesh and Sarang Wadhwan amounted to Rs 2008.62 crore and Rs 137.16 crore, respectively.
During the reporting quarter, Bank of Baroda’s global gross advances rose 2.10% on year to Rs 7.34 lakh crore. Retail loans, that accounted for Rs 1.23 lakh crore of total loans, grew 10.3% on year, while corporate loans amounting to 2.73 lakh crore grew 0.3%.
State-owned Bank of Baroda on Wednesday reported a 24.4% year-on-year rise in net profit for the quarter ended 30 September to `2,088 crore, backed by higher other income. The lender had reported a net profit of Rs 1,209 crore in the June quarter.
The lender’s other income, which includes fees from third party products, treasury income and others, rose 23% on year to Rs 3,579 crore. During the reporting quarter, Bank of Baroda’s global gross advances rose 2.10% on year to Rs 7.34 lakh crore. Retail loans, that accounted for Rs 1.23 lakh crore of total loans, grew 10.3% on year, while corporate loans amounting to 2.73 lakh crore grew 0.3%.
In a post earnings conference, managing director and chief executive officer Sanjiv Chadha said since big businesses are returning to normalcy and companies are starting to make maximum capacity utilisation, the outlook for corporate credit growth looks positive. Chadha said the bank’s credit growth will likely be in the range of 7 to10% in the current financial year, in line with the industry.
On the liabilities side, the bank’s total deposits stood at Rs 9.59 lakh crore as on September-end, higher 0.5% on year. Global low-cost current account and savings account (CASA) ratio stood at 41.70% as on September 30, higher than 36.71% a year ago.
As a result of sluggish loan growth, BoB’s net interest income—difference between interest earned and expended—grew 2.1% on year to Rs 7,566 crore in the reporting quarter. Global net interest margin, on the other hand, grew to 2.85% in the reporting quarter from 2.78% in the corresponding period a year ago. The lender’s asset quality improved in the reporting quarter with the gross non-performing assets (NPAs) falling to Rs 59,504 crore as on September-end from Rs 65,698 crore a year ago. The bank saw fresh slippages of Rs 5,223 crore in the reporting quarter.
In percentage terms, Bank of Baroda’s gross NPA ratio improved to 8.11% as on September-end from 9.14% last year. Net NPA ratio, however, rose 32 basis points on a yearly basis to 2.83% as on September 30.
The bank’s management stated that its total restructured loan book stood at Rs 20,500 crore as on September-end and that only 20% of these accounts were under the doubtful special mention account-1 and special mention account-2 category.
The provision coverage ratio, including technically written off accounts, stood at 83.42% as on September-end, lower than 85.35% a year ago. Further, the bank’s credit cost, as on September-end, stood at 1.46%. The bank has maintained 1.5%-2% credit cost guidance for the current financial year. Bank of Baroda’s capital adequacy ratio stood at 15.55%.
The company currently receives over 60% of its collections via digital mode where customers can pay via digital wallets or a company-generated hyperlink.
By Piyush Shukla
The Covid-19 pandemic has accelerated the pace of customer acquisition through digital channels by non-banking finance companies (NBFCs). Several non-bank lenders have focused on digital channels for loan applications and even the approval process, which helped with business continuity.
“Digital platforms not only enabled business continuity during the lockdown, but has also helped us process larger volumes with greater speed and efficiency. Our increased focus on online loan processing during the lockdown coupled with our quick response helped our services stay seamless and uninterrupted,” Renu Sud Karnad, managing director (MD) at Housing Development Finance Corp (HDFC), told FE.
Karnad said by September-end, HDFC received 89% of new loan applications through the digital channels, a substantial increase than below 20% pre-pandemic. The non-bank lender has witnessed 16.44% average traffic spike on its website post March 2020, while there has been a 35.58% hike in online generated leads. As on September 30, HDFC’s outstanding loan book, after sell down of loans, stood at Rs 5.21 lakh crore, up 10% year on year.
Mid-sized non-banking finance company Shriram City Union Finance is also focusing higher on digital means to increase loan and deposit business. The company currently receives over 60% of its collections via digital mode where customers can pay via digital wallets or a company-generated hyperlink.
Speaking to FE, Shriram City Union Finance MD and CEO YS Chakravarti said the NBFC’s fixed deposit programme, launched nine months earlier, has enabled it to garner Rs 20 crore of deposits every month consistently for the last three months. The NBFC is now targeting Rs 100 crore of deposits each month by the next year. The fixed deposit programme is a totally digital and paperless journey for the customer, Chakravarti said.
On the asset side, currently, Shriram City Union Finance is generating 20,000-22,000 loan applications online per month, which is significantly higher than than 2,000 applications received digitally before March 2020. Chakravarti said the company expects 25% of overall loan volume over the next 12-18 months to come from the digital mode.
The NBFC’s website presently witnesses more than 3 lakh clicks each month, over 10 times higher than 20,000-30,000 clicks it received before the pandemic hit India. As on September-end, Shriram City Union Finance’s total assets under management stood at Rs 30,425 crore, up 10.5% on year.“We are making in-roads on the digital front, with a focus on digitising the post disbursal service where we have automated a host of self-service features for our customers,” Chakravarti said.
To ensure social distancing and safe contact with customers during the pandemic, gold loan financier Muthoot Finance launched its ‘Loan @ Home’ mobile application in July 2020, and, to date, it recorded about 10,000 downloads. The NBFC’s gross loan assets under management, as on September-end, stood at Rs 55,146.8 crore, up 17% on year.
According to most non-banks, they are tailoring tech products according to customers’ needs and to reach newer geographies. “We integrated disruptive technologies such as Natural Language Processing (NLP) and Machine Learning (ML). This integration has enabled us in offering seamless services through our website chatbot by understanding and analysing user intent, effectively respond to user interaction and there by deliver an enhanced user experience,” Karnad said.
Further, HDFC also launched ‘HDFC Now’ – a completely digital top-up loan for existing customers and started offering content on its website in six regional languages, including Hindi, Marathi, Tamil, Telugu, Malayalam and Kannada. While digital lending enables faster disbursements, there are also concerns that need tackling to safeguards customers’ interest.
In a speech on October 22, Reserve Bank of India deputy governor M Rajeshwar Rao said, “We were and are inundated with the complaints of harsh recovery practices, breach of data privacy, increasing fraudulent transactions, cybercrime, excessive interest rates and harassment.”
He added that governance is more of a cultural issue than a regulatory issue. Therefore, NBFCs must create a culture of responsible governance where every employee feels responsible towards the customer, organisation and society. “Good governance is key to long-term resilience, efficiency and might I add, survival of the entities,” he said.
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