Tag: axis bank

Will banks clamp down on cryptocurrency transactions again?, BFSI News, ET BFSI

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Banks which had started processing cryptocurrency transactions after RBI clarification may be again shying away from virtual currencies.

The country’s largest lender, State Bank of India, has blocked the receipt of funds by crypto bourses on its UPI platform. The bank has told payment processors to disable SBI UPI for crypto merchants, according to a report.

With this, traders cannot buy Bitcoin or any cryptocurrency by transferring funds via UPI, as none of the processors which handle funds for

exchanges will be unable to receive money sent for crypto purchases on their SBI accounts.

The largest domestic crypto bourse, WazirX, has already been impacted by the decision, with the processing agency following the directive of SBI. Industry circles said payment processors may stop accepting payment for other exchanges as well, unless SBI does a rethink.

With UPI blocked, many traders on WazirX are using one of the e-wallet services to transact.

But due to wallet charges and limits on fund transfer, traders prefer UPI in the absence of other payment modes like credit and debit cards, NEFT (national electronic fund transfers) and net banking.

After SBI’s decision, many banks may be reluctant to onboard crypto merchants on their respective UPI platforms.

The RBI decision

After the Reserve Bank of India told banks that they no longer can use the regulator’s 2018 circular prohibiting dealings in virtual currencies, as the direction has been struck down by the Supreme Court, banks were allowing crypto transactions.

Lenders including HDFC Bank, ICICI Bank and Axis Bank are allowing transactions in virtual currencies through the UPI platform.

According to crypto exchanges, more banks are now warming up to them and several channels are available for customers to buy crypto assets.

Till June this year banks were sending official notices to many customers warning them of curbs, including permanent closure of accounts.

Lenders were asking customers to clarify the nature of transactions and warning credit card users that transactions of virtual currency will lead to suspension/cancellation of card.

While trading in cryptocurrency is not illegal as per existing Indian laws, individual institutions can enforce their terms based on their risk assessment.

A grey area

Despite the boom, cryptocurrencies are in a grey area in India, with the Reserve Bank hostile towards it and the government unsure about its prospects.

There is no legislation or regulatory code yet to govern the crypto ecosystem, leading to confusion among customers, businesses and financial institutions providing banking services.

In 2018, the Reserve Bank of India barred financial institutions from supporting crypto transactions, which the Supreme Court overturned in 2020. The government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.

The RBI asked banks not to cite its 2018 circular and clarified that banks can do their own KYC for crypto clients. With this, banks are now reassessing the situation, but several banks currently lack the technical expertise to make a supervisory assessment on these transactions.



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Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints, BFSI News, ET BFSI

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The retail and credit card business put on the block by Citibank India are best fit for Kotak Mahindra Bank and DBS Bank, while for HDFC Bank it is still a good asset though not a game-changer, according to CLSA.

The brokerage house had estimated the value of Citi‘s business in India at $2-2.5 billion.

HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank and DBS Bank have emerged as the top five contenders to take over Citi India’s retail business that includes, credit cards, mortgages, wealth management and deposits. The race will be narrowed down to three, with whom Citi would negotiate a higher value.

How they stack up

While IndusInd Bank has the size and valuation constraints to acquire such an asset, the operations can be a game changer for Kotak Mahindra Bank because it can add 20% to the bank’s current retail loans, it said. “For Kotak Bank, the business adds 20% to its current retail book and increases its card segment by 3x (times),” the brokerage said in a note. “It is also complementary to its affluent customer base and Kotak Bank’s premium valuation will aid it in a purchase.”

It said Citibank’s affluent retail business also fits well with DBS Bank India’s premium offerings and banking relationships. DBS Bank does not have a credit card business in India.

For HDFC Bank, the acquisition won’t be a game changer as it is only nearly 6% of the lender’s total book, it said, while for Axis it will be a valuable acquisition, but valuations would be constrained, it said.

What’s on offer?
Citi’s total assets In India at the end of FY20, including credit extended to Indian institutional clients from offshore Citi entities, stood at Rs 2.99 crore.

The consumer banking business, which includes cards and loans against property, would be around Rs 32,000 crore. It also has a huge amount of savings accounts built over the last few years, which has a lucrative liability book and also credit cards, in which it was the largest among foreign banks in India.

The bank also had Rs 27,911 crore of loans to agriculture, affordable housing renewable energy and micro, small and medium enterprises (MSMEs). Of this, Rs 4,975 crore was to weaker sections, as part of Citi India’s priority sector lending obligations, results released last year showed.

Citi Bank has 2.8 million retail customers, 1.2 million bank accounts and nearly 2.6 million credit cards as of June.

Citi’s consumer business contributes about a third to the overall India business in terms of profitability, while total India business contributes 1.5% of profits to the global book. Overall, Citibank’s India unit had a market share of advances and deposits of 0.6% and 1.1%, respectively.

Citi credit cards
Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints

Citi started retail operations in India in 1985 and was among the pioneers of credit cards in the country. However, its share of credit cards has dropped from 13% to 6% now. Despite being the sixth-largest player in the space, Citi has the highest average spend on its card touching close to 2 lakh per card. The average spends per card for Citi is 1.4 times higher than the industry average, making it a profitable business for the bank in India. The other four major players have had nearly the same steady growth in spend per card at 11-12%.

Citibank’s outstanding credit cards as of February stood at 2.65 million, the largest among foreign banks in India, ahead of 1.46 million by Standard Chartered and 1.56 million by Amex. Citi India had 2.9 million retail customers with 1.2 million bank accounts as of March 2020.

At the end of March 2020, Citibank served 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts.



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Freezing bank accounts could affect right to life, says Karnataka high court, BFSI News, ET BFSI

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BENGALURU: Freezing of bank accounts will affect the right to life under Article 21 of the Constitution, the high court has said.

Justice Mohammed Nawaz made this observation while allowing a petition filed by Narayana Yadav, a New Delhi-based businessman, and directed CEN police station at Yadgir to intimate banks to defreeze his accounts. The defreezing is subject to the businessman abiding by his commitment to give a bank guarantee for a sum of Rs 3.7 lakh, the court said. Yadav had challenged the June 22, 2020 notice issued by police, directing the manager of Axis Bank to freeze his account and linked account numbers, four in all.

The action was based on a complaint from Ludra Mary, a resident of Shahpur in Yadgir, who alleged that she received an email on May 27, 2020 stating that she had won Rs 48.5 lakh lottery. To get hold of the same, she had to log in to a website. She entered the password and the user name provided and filled up the information requested. In response, she was asked to deposit an amount to the account numbers provided. Until June 10, 2020, a total of Rs 3.7 lakh was deposited in those accounts, but Ludra did not get the money. Ludra approached police, who ordered the freezing of Yadav’s account on the ground that his Axis Bank account had received Rs 99,999 from her.

Yadav claimed he is not involved in the alleged crime and was surprised by the intimation about freezing of his accounts. He said he’s running electronics stores in Delhi and proceeds of his business were transferred to the company account that was maintained at Axis Bank, Dwarka Branch, Delhi, and all transactions are legitimate.

Police defended the action, saying it was necessary to freeze the accounts for probe and also to avoid the petitioner transacting further.



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CLSA, BFSI News, ET BFSI

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Mumbai: The sale of Citibank’s India retail business is a good opportunity for existing banks to strengthen their affluent customer bases, said CLSA.

IndusInd Bank has the size and valuation constraints to acquire such an asset, while for HDFC Bank it is not a game-changer in terms of size but it is still a good asset, the brokerage said.

Citibank’s India retail business is up for sale as part of a global restructuring. On the block is the $3.5 billion retail asset book with a 4-6% market share of card or spending, sizeable home loan book and an affluent deposit base.

Reports suggest five banks including HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank and DBS Bank have been shortlisted.

The brokerage said the size of Citi’s business is too large for IndusInd Bank and its valuation does not favour deal-making.

Valuations would be a constraint for Axis Bank as well although it would be a favourable acquisition.

Citi’s affluent retail business fits well with DBS Bank India’s premium offerings and banking relationships, said CLSA.

For HDFC Bank, the retail book size of Citibank is not a game-changer but for Kotak Mahindra Bank, the business adds 20% to its current retail book and increases its card segment by three times, said CLSA. It is also complementary to its affluent customer base and Kotak’s premium valuation will aid it in a purchase, said CLSA.



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Axis Bank lists $600 million Sustainable $AT1 notes on India INX and NSE IFSC at GIFT City

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Axis Bank on Thursday announced the listing of its $600 million Sustainable Additional Tier 1(AT1) notes on India INX and NSE IFSC exchanges.

“The AT1 notes are now being listed on Singapore, London and India INX and NSE IFSC exchanges,” it said in a statement.

Also read: Axis Bank completes pricing of overseas AT-1 bonds

The bank had last week announced issuance of these Sustainable AT1 notes in the overseas markets through its IBU branch at GIFT City.

Amitabh Chaudhry, Managing Director and CEO, Axis Bank said, “This is a landmark issuance, and it shows Axis Bank’s commitment to the government’s vision of developing GIFT City as an Internal Financial Centre of repute. We hope that it will encourage other market players to also look at GIFT City as a venue of choice for issuance and listing of their debt and equity products”.

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Axis Bk diversity charter to empower staff, clients, BFSI News, ET BFSI

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Mumbai: Axis Bank has taken several HR measures to bring equality to employees and customers from the LGBTQIA+ community as part of its strategy to promote diversity and inclusion.

The private lender on Monday announced a ‘ComeAsYouAre’ charter of policies and practices that will apply to those within the organisation and customers. The bank said that this charter is in keeping with the spirit of the Supreme Court verdict on September 6, 2018 on Section 377, which ruled that all sexual relationships between consenting adults in private should be decriminalised.

While multinational banks have already in place a diversity charter in keeping with their global practices, Axis Bank is the first among domestic lenders to publicly announce a charter. Under this charter, employees can list their partners for mediclaim benefits irrespective of gender, sex or marital status. Employees can dress following their gender or gender expression.

“We recognise that employees could have gender or gender expression that’s different from their sex assigned at birth. They can choose to dress in accordance with their gender/gender expression,” the bank said. Employees can also choose to use the restroom of their choice following their gender expression/gender identity.

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Axis Bank introduces policies for employees and customers from LGBTQIA+ community, BFSI News, ET BFSI

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Private lender Axis Bank on Monday announced a charter of policies and practices for their employees and customers from the LGBTQIA+ community.

Under this policy all employees can list their partners for mediclaim benefits irrespective of gender, sex or marital status. It has also put in place a Human Rights Policy that offers redressal to challenges faced by employees from this community.

“We recognize that employees could have a gender or gender expression that’s different from their sex assigned at birth,” the bank said in a statement. “They can choose to dress in accordance with their gender/ gender expression.”

Employees can also choose to use the restroom of their choice in accordance with their gender expression or identity.

Axis Bank customers can now also open a Joint Savings Bank Account or a Term Deposit with their same sex partner.

“At Axis, we have put our focus on diversity, equity and inclusion that respects and recognizes the importance of distinctive life journeys and several identities that extend beyond the paradigms of gender,” said Rajesh Dahiya, Executive Director, Axis Bank. “This for us is as much about the invisible markers as it is about the visible ones. It is our belief that it fosters a culture of innovation and leverages the multiple talent pools that exist in a rich demography like ours.”



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Axis Bank raises USD 600 mn via AT1 bonds, BFSI News, ET BFSI

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Axis Bank on Thursday said it has raised USD 600 million (around Rs 4,380 crore) through the sale of sustainability-focused AT1 bonds. The dollar-denominated, Basel III-compliant AT1 notes were finally priced at 4.10 per cent, 0.30 per cent lower than the initial price guidance, the bank said in a statement.

Under the Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

This is the maiden USD AT1 bond by an Indian issuer in a sustainable format and first time that the bank has accessed international bond markets after a 4-year hiatus.

The bank said the issue was oversubscribed 3.8 times ahead of the final pricing announcement and was well diversified across geographies and nearly half of the bonds were allotted to sustainability-focused investors.

The bank has set up a board-level ESG committee and has a sustainable financing framework, the statement said, adding that a second party opinion provider has graded it as ‘Credible & Impactful’.

“This successful transaction, which is also the largest single-tranche USD bond issuance ever for Axis Bank, reflects the faith and confidence that international investors have reposed in the bank’s franchise and robust credit and business model,” its group executive and head of treasury Neeraj Gambhir said.

The issue follows similar AT1 bond issuances by HDFC Bank (USD 1 billion) and SBI (Rs 4,000 crore) done over the last fortnight, which are seen as signs of interest revival in the instrument.

Merchant bankers had on Wednesday said that Bluebay, Blackrock, Fidelity and HSBC Asset Management Company were among the major investors in the issue.

The merchant bankers to the issue include Bank of America, BNP Paribas, HSBC, Citigroup and Standard Chartered Bank.



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RBI imposes ₹25 lakh penalty on Axis Bank

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The Reserve Bank of India on Wednesday imposed a monetary penalty of ₹25 lakh on private sector lender Axis Bank.

The penalty has been imposed for contravention of non-compliance with certain provisions of directions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016, the RBI said.

RBI conducted scrutiny during February 2020 and March 2020 in a customer account maintained with Axis Bank. It was observed that the bank had failed to comply with the KYC directions and had failed to monitor/carry out on-going due diligence in the account to ensure that the transactions were consistent with its knowledge about the customer, customer’s business and risk profile.

“In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for contravention of the said directions,” the RBI said.

After considering Axis Bank’s reply to the notice and oral submissions made during the personal hearing, RBI concluded that the charge of contravention of / non-compliance with the directions were substantiated and warranted imposition of monetary penalty, it further said.

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Axis Bank joins green finance rush with first ESG bonds in India, BFSI News, ET BFSI

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Axis Bank has raised $600 million from offshore investors by selling sustainable additional tier-1 (AT1) bonds at a coupon of 4.1 per cent said.

The bank will be using the proceeds towards eligible green and social project categories, as per the term sheet. The bonds will be listed on bourses, including NSE IFSC and India INX IFSC.

The lender launched the issue of the perpetual bonds earlier in the day with the initial pricing guidance at 4.4 per cent, looking to raise up to USD 1 billion.

Axis Bank raised USD 600 million from its GIFT City branch. The issue saw the order book peaking at USD 2.3 billion, as per the sources.

The major investors in the issue included Bluebay, Blackrock, Fidelity and HSBC Asset Management Company, they said.

This was only the third environment, social and governanc-themed bond issue by any lender globally and the first one in India.

The Axis Bank bonds were rated Baa3 (negative) by Moody’s Investors Service, BB+ (stable) by Standard & Poor’s and BB+ (negative) by Fitch Ratings.

HSBC deposits

Last month UK-based Hong Kong and Shanghai Banking Corp (HSBC) has raised $400 million of green deposits in India and identified financing opportunities to use those funds. Under its strategy, the bank first finds avenues to finance before raising the resources. The loans are extended for renewable projects, biodiversity linked initiatives, clean transportation and pollution control. Once the loans are sanctioned they are matched with deposits.

HDFC issue

HDFC, India’s largest private-sector mortgage financier, too announced last month the launch of a new green deposit plan to attract environmentally conscious depositors.

The company plans to raise these deposits from individuals to lend to projects by retail borrowers.

It plans to use these funds to lend to standalone homes which use environment-friendly practices, like putting up solar panels and water recycling, or even to women borrowers or self-help groups.

AT1 bonds

The bank is the third lender in quick succession to raise money from the AT1 route after HDFC Bank raised USD 1 billion from overseas investors last month, and SBI raised Rs 4,000 crore earlier in the day from domestic investors.
The AT1 capital instrument had received a setback after Yes Bank’s investors lost over Rs 8,400 crore of bets after a write-off in the RBI-led bailout.



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