Tag: bank of india

CBI books firm, CMD for Rs 1.5K cr bank fraud, BFSI News, ET BFSI

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Shimla: The Central Bureau of Investigation (CBI) has registered a case against a Delhi-based private company, which has its industrial unit in Himachal Pradesh, and others including its promoter & CMD; director/guarantor & two corporate guarantors; unknown public servant(s)/unknown others, for allegedly conspiring with each other to defraud banks, while causing a loss of around Rs 1,528.05 crore to the consortium of 16 banks led by Bank of India.

The consortium banks were – Bank of India, Union Bank of India, Andhra Bank, Punjab & Sind Bank, Indian Overseas Bank, State Bank of Hyderabad, Central Bank of India, Corporation Bank, HDFC Bank Limited, Oriental Bank of Commerce, Saraswat Co-operative Bank, State Bank of Patiala, UCO Bank, Allahabad Bank, Standard Chartered Bank & DBS.

The case has been registered against Indian Technomach Company Limited, its promoter & CMD Rakesh Kumar Sharma, director/guarantor Vinay Kumar Sharma, Gurupath Merchandise Limited (corporate guarantor), Kolkata, and Thunder Traders Limited (Corporate Guarantor), Kolkata, and unknown public servants/others.

CBI officials said searches were conducted on Wednesday at various premises, including at Kangra and Paonta Sahib in Sirmaur district, Himachal Pradesh.

It was alleged that the private company, engaged in manufacturing of ferrous and non-ferrous metal, obtained credit facilities/loans from the consortium of 16 nationalised/private banks from 2008 to 2013 with Bank of India as lead bank.

The accused had allegedly conspired with an intention to defraud the banks through said acts and diverted funds from the loan account, thus causing a loss of Rs 1528.05 crore to the said consortium of the banks.

The account was classified as NPA in the books of accounts of Bank of India with effect from March 31, 2014 due to overdue status of the account in line with IRAC guidelines. The account was red-flagged by Bank of India, as advised by RBI in May 2015 and was declared a fraud in February 2016.



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Here are top banks offering most affordable home loan rates, BFSI News, ET BFSI

Banking & Finance

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Home loans help people become property owners, and have ownership over secured assets. That is why it is so important for us to know where we can avail the loan from.

Tenure for home loans usually range from 15 years to 30 years, and is one of the most affordable loans available.

The cost effectiveness of a home loan depends on the bank you choose. Following are some top banks offering affordable home loans.

Bank Salaried Borrower Self Employed Borrower Women Others Effective Rate of Interest

(RBI Repo Rate : 4%)

Kotak Mahindra Bank – – – – 6.50%-7.1%
ICICI Bank 6.75%-7.4% 6.90%-7.5% – – 6.75%-7.55%
Bank of Baroda 6.75%-9.0% 7.00%-9.0% – – 6.75%-9.00%
Union Bank of India 6.80%-7.3% 6.85%-7.3% 6.80-7.30% 6.80-7.30% 6.80%-7.35%
State Bank of India 6.80%-7.1% +15 bps -5 bps – 6.80%- 7.15%
Axis Bank 6.90%-8.4% 7.00%-8.5% – – 6.90%-8.55%
Canara Bank – – 6.90%-8.85% 6.95%-8.90% 6.90%-8.90%

(Source:
Official Websites- Kotak Mahindra Bank, ICICI Bank, Union Bank of India, State Bank of India, Axis Bank, Canara Bank
BankBazaar.com- Bank of Baroda )

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Quality of banks’ retail loans dips, India Ratings projects total gross NPA at 8.6% for FY22, BFSI News, ET BFSI

Banking & Finance

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India Ratings & Research has estimated banks’ gross non-performing assets to rise to 8.6% by March 2022 while maintaining a stable outlook on the overall banking sector for the rest of FY22.

The rating company’s NPA estimate is much more benign than 9.8% projected by Reserve Bank of India’s Financial Stability Report even as it expressed concerns over significant stress on banks’ retail and MSME loan books. It projected overall stressed assets at 10.3% for FY22 expecting provisioning cost to rise to 1.9% from its earlier estimate of 1.5%.

The banking sector gross NPA was at 7.7% at the end of March 2022.

Retail loans, which have been considered as a safe bastion for lenders, are showing cracks as the pandemic drives higher delinquencies due to salary cuts and job losses. The rating firm estimated that the asset quality impact in the retail segment has been significantly higher for private banks, forcing them to restructure loans helping to defer immediate rise in slippages. Overall stressed assets in the segment are expected to increase to 5.8% by end-FY22 from 2.9% earlier.

The micro, small and medium enterprises sector has been under pressure with demonetisation, introduction of Goods & Services Tax and Real Estate Regulatory Authority (RERA), slowing down of large corporates and now COVID-19, India Ratings said.

Although the government support in form of liquidity under the Emergency Credit Line Guarantee Scheme (ECLGS) and permission to restructure loans comes as an immediate relief for the sector immediately, a part of this credit support could turn bad when moratorium ends beginning the third quarter this fiscal. The rating firm projected gross NPA from MSME to rise to 13.1% by FY22 from 9.9% in FY21. Stressed assets similarly would increase to 15.6% from 11.7%.

The stable outlook on large private banks indicated their continued market share gains both in assets and liabilities, while competing intensely with public sector banks. “Most have strengthened their capital buffers and proactively managed their portfolio. As growth revives, large private banks are likely to benefit from credit migration due to their superior product and service proposition,” the rating company said.

The stable outlook on public sector banks took into account the continued government support through large capital infusions leading to a significant boost in capital buffers over the minimum regulatory requirements, significant improvement in provision coverage. The government injected Rs 2.8 trillion over FY18-FY21 and has budgeted another Rs 20000 crore for this fiscal.

The outlook on non-banking finance companies is however mixed depending on the category of their businesses. The outlook on NBFCs engaged in commercial vehicle loans and loans against property is negative while the rating company maintained stable outlook for NBFCs engaged in housing finance as well as gold loans.



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BoI enters into co-lending tie-up with MAS Financial Services

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Bank of India (BoI) has entered into a co-lending arrangement for Micro, Small and Medium Enterprise (MSME) loans with Ahmedabad-based MAS Financial Services Ltd (MAS).

BoI will leverage the reach of MAS to build MSME portfolio, Atanu Kumar Das, Managing Director & CEO, BoI, said on the occasion of the public sector bank’s 116th Foundation Day.

Das observed that co-lending has been introduced by the Reserve Bank of India (RBI) to increase credit flow to the unserved and underserved sectors of the economy.

Under this arrangement, funds are made available to the ultimate beneficiary at an affordable cost, considering the lower cost of funds from banks and greater reach of the NBFCs.

MAS is a non-banking finance company offering loans to segments such as micro enterprises and SMEs. It also provides home loans; loans for purchase of commercial vehicles, two-wheelers and used cars.

The Bank also unveiled various schemes for farmers, including opening of 84 “Star Krishi Vikas Kendra” for quick processing of Kisan loans; “Krishi Ghar Special Scheme” for construction of farm houses; “Star Kisan Sahayata Loan” to mitigate Covid-19 stress; and a scheme for farm mechanisation.

On the technology front, BoI launched Digi Locker, Business WhatsApp and Web Module on its website for credit card customers.

For entrepreneurs, the Bank launched RuPay Select International Contactless Debit Card, an integrated UPI through BOI mobile app, UPI QR Code for both merchants and customers, among others.

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Bank of India ties-up with MAS Financial Services for co-lending, BFSI News, ET BFSI

Banking & Finance

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New Delhi, Sep 7 (PTI) State-owned Bank of India (BOI) on Tuesday said it has entered into a co-lending arrangement with MAS Financial Services for MSME loans. The tie-up comes on the occasion of the bank’s 116th Foundation Day.

Co-lending was introduced by the RBI to increase the credit flow to the unserved and underserved sector by utilising the nimble-footed NBFC coverage to the informal sector.

BOI will leverage the reach of NBFC to build an MSME portfolio, Atanu Kumar Das, Managing Director & CEO, Bank of India said in a release.

Celebrating Foundation Day across all its 10 national banking group (NBG) offices, 59 zonal offices, 5,084 domestic and 23 overseas branches, and 5,323 ATMs, Das expressed gratitude to all the stakeholders.

The bank marked the special occasion by celebrating ‘Azadi Ka Amrit Mahotsav’ and pledged to continue serving the nation and its citizens.

On the occasion, the bank unveiled various new schemes for farmers and undertook several initiatives, such as tree plantation, extending financial help to 8,718 girl children towards their education and customer outreach programmes, among others.



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Bidders make financial offers in the range of Rs 2,600-3,000 crore for Transco in UP, BFSI News, ET BFSI

Personal Finance

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Bidders have submitted financial offers in the range of Rs 2,600-3,000 crore for South East UP Power Transmission Company that is undergoing bankruptcy proceedings because of financial troubles of its majority shareholder, Madrid-based Grupo Isolux Corsan, according to sources..

All four offers will be taken up for negotiation simultaneously by lenders this week, according to the sources.

Four bidders—Tata Power, Adani, Power Grid Corporation of India and Sterlite—have submitted binding bids for the transmission company, ET had reported on August 23.

Tata Power has made a bid through its arm Resurgent Power Ventures.

The highest bidder amongst the contenders has submitted a conditional offer, which is why negotiations are being held with all the bidders, according to a person in the know. Typically, in bankruptcy cases, the creditors negotiate with the highest bidder, loosely termed H1 bidder, before talking to other contenders.

The lenders could recover upwards of 70% of their dues based on the range in which financial offers for the company have been made, the sources said.

Tata Power “doesn’t comment on specific projects or opportunities”, a spokesperson said. The company continues to explore and evaluate various growth opportunities including in the transmission space. “As indicated earlier, the Company is looking at both greenfield and M&A transmission opportunities directly as well as through its stressed asset platform, Resurgent Power Ventures Pte Ltd,” the spokesperson added.

Adani, Sterlite and Power Grid Corporation of India were yet to respond to ET’s emailed queries sent on Monday. Sterlite had declined to comment on whether they had bid for the company in response to a previous set of queries sent to them on August 20.

Grupo Isolux Corsan had won a 35 year concession to build a power transmission network in Uttar Pradesh in 2011. The company had taken on loans of around Rs 3,700 crore from local lenders to fund the construction of the transmission project. The construction stopped after GrupoIsolux Corsan filed for bankruptcy in Spain and the US.

The lenders left with few options, approached the National Company Law Tribunal to start bankruptcy proceedings against the Indian unit. Bank of India, Axis Bank, Power Finance Corporation and Rural Electrification Corporation are among the creditors of the transmission company.

As many as eight parties had shown interest in the preliminary bidding phase for the company. Torrent Power, Megha Engineering, REC Power Development and Consultancy Ltd (Recpdcl) and a sovereign wealth fund are also said to have submitted expressions of interest for the company in March. Not all of them finally made a bid.

The union government has earmarked electricity transmission lines amongst assets that it will monetize alongside ports, airports and sports stadiums in its budget announcements.

The private sector has been consistently demanding that more transmission lines be auctioned to them under the tariff-based competitive bidding process. So far, private players have only a 5% share in the power transmission sector. This contrasts sharply with the power generation sector where private players account for almost half of the capacity.



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Government extends the tenure of Canara Bank, Bank of India executive directors by two years, BFSI News, ET BFSI

Banking & Finance

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The government has extended the tenure of two executive directors of Canara Bank and Bank of India for two years, the state-run lenders said on Monday. Canara Bank in a regulatory filing said that the central government has extended the term of office of A Manimekhalai, Executive Director, for a period of two years beyond her currently notified terms that expires on 10 February 2022, or until further orders, whichever is earlier.

Bank of India in a separate filing said that the term of office of P R Rajagopal, Executive Director, has been extended for a period of two years, beyond his currently notified term or until further orders, whichever is earlier. His current term was to expire on February 28, 2022, the bank said.

The banks said the government informed them about the extension given to these executive directors through notifications on August 26, 2021.

The government last week extended the term of executive directors of various public sector banks. It also extended the terms of MD & CEOs of Punjab National Bank and Bank of Maharashtra.



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Govt extends tenure of Bank of India executive director PR Rajagopal by two years

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State-run Bank of India on Monday said the government has extended the term of its executive director PR Rajagopal by two years.

The central government vide notification dated August 26, 2021 extended the term of office of PR Rajagopal, Executive Director of the bank for a period of two years, beyond his currently notified term or until further orders, whichever is earlier, the bank said in a regulatory filing.

His current term was to expire on February 28, 2022.

The government last week extended the term of executive directors of various public sector banks. It also extended the terms of MD & CEOs of Punjab National Bank and Bank of Maharashtra.

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Bank of India approves Rs 3,000 cr QIP, sets floor price at Rs 66.19 per share, BFSI News, ET BFSI

Banking & Finance

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New Delhi: State-owned Bank of India on Wednesday approved the launch of QIP, aimed at raising Rs 3,000 crore equity capital to fund business growth and meet regulatory compliance. The capital issue committee of the bank at its meeting approved and adopted the preliminary placement document cum application form for the issue and authorised the opening of the issue on Wednesday (August 25, 2021), Bank of India said in a regulatory filing.

The lender has set the floor price for the qualified institutional placement (QIP) at Rs 66.19 per equity share.

It held a non-deal roadshow from August 10-23 to woo investors, in which as many as 26 entities participated, including Yes Bank, IDFC Bank, HDFC Treasury, ICICI Prudential Life, Edelweiss, SBI Life, Mirae, Kotak Life, Federal Bank, Marshal Wace and Polunin.

The bank said it may offer a discount of not more than 5 per cent on the floor price to the subscribers of the issue.

The next meeting of the capital issue committee of the bank will be held on August 30 to consider and determine the issue price of shares to be allotted under the QIP, the bank said.

The bank aims to fuel its regular business growth, apart from deploying capital for improving the technical platform, co-lending digital operations, tie-ups with fintech companies, and synchronization of tech platform with overseas and domestic operations.

Also, the government’s shareholding in the bank at present is in excess of 90 per cent. With the issuance of equity shares through the QIP, the promoter’s stake will come down to a substantial level.

This will help the bank meet the regulatory compliance with Sebi guidelines of maintaining minimum public shareholding will be ensured.

The scrip of the bank closed at Rs 64.90 apiece on BSE, up 2.04 per cent from the previous close.



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Bank of India plans to raise Rs 3,000 cr equity capital via QIP, BFSI News, ET BFSI

Banking & Finance

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New Delhi: Bank of India is planning to raise Rs 3,000 crore equity capital through a qualified institutional placement (QIP) offer to fuel business growth and meet regulatory compliance, sources said. “The bank is in the process of raising Rs 3,000 crore through QIP and seven book running lead managers have been appointed for the proposed issue,” sources privy to the development said.

A non-deal roadshow to woo investors concluded on Monday.

The management of the bank participated in one-on-one and group meetings for the roadshow during August 10-23, 2021, the bank said in a filing.

Total 26 investors participated in the roadshow including Yes Bank, IDFC Bank, HDFC Treasury, ICICI Prudential Life, Edelweiss, SBI Life, Mirae, Kotak Life, Federal Bank, Marshal Wace, Polunin among others, the bank said.

The purpose of the issue is not only to fuel regular business growth, but also to deploy capital for improving technical platform of the bank, co-lending digital operations, tie-ups with fintech companies, and syncronisation of tech platform with overseas and domestic operations, as per the sources.

The bank will also utilise the proceeds of the QIP for developing app based retail loan applications and offer electronic bill discounting facility, they added.

“Also, Government of India, our promoter is currently holding 90.34 per cent stake in the bank as of June 30, 2021. With the proposed QIP of Rs 3,000 crore, the promoter’s stake will come down to a substantial level and as a result, the compliance with Sebi guidelines of maintaining minimum public shareholding will be ensured,” a source said.

The bank’s asset quality has shown consistent improvement with gross non-performing assets (NPAs) falling to 13.5 per cent as of June 30, 2021 from 13.8 per cent at end-March 2021. The gross NPAs were at 14.8 per cent by end of March 2020 and 15.8 per cent by March 2019.

Besides, the bank has returned to profitability as against back-to-back losses in FY19 and FY20.

Bank of India earned a net profit of Rs 720 crore in June quarter 2021-22. In FY21, there was an overall profit of Rs 2,160 crore. The lender had suffered a net loss of Rs 2,960 crore in FY20 and of Rs 5,550 crore in FY19.

“Around 88 per cent of the gross advances are comprised of A rated and above as well as GGA (government guaranteed advances) segment advances. Most of the bank’s gross advances presently comprise secured and good rated assets.

“The bank’s focus going forward would be towards RAM (retail, agri, MSME) and GGA segments, particularly with the emphasis on the good rated and sovereign guaranteed advances, so that the bank can maintain asset quality in future,” said a source.

Further, the bank has identified total restructuring book of not more than Rs 11,500 crore. Out of this, the bank has restructured Rs 7,300 crore till June 2021 and the rest of the restructuring will be made before the threshold date of September 30, 2021.

“So, together with the restructuring and SMA (special mention accounts) 2 portfolios, the stress loan book stood at less than 3 per cent on gross advances (as on June 2021) and the same is significantly low, in comparison to other peer banks,” they said.



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