Tag: banking

To get RBI funds at 4%, can lend at up to 20%, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Last year it was fintech firms that got a boost from the digitisation wave in banking, this time small finance banks (SFBs) are getting a push.

The Rs 10,000-crore support from the Reserve Bank of India (RBI) as part of its pandemic relief measures announced on Monday is set to make small finance banks more competitive. The SFBs would get such funds at 4% for three years, which is significantly lower than their average cost of lending. The new facility would help them to get about 1-1.5% positive carry on the borrowed funds, even after investing the same amount into government securities as mandated by the central bank.

This window is an opportunity for SFBs with surplus g-secs to turn competitive as the lenders can deploy the available fund at a higher spread. Small banks generally lend at rates in the range of 10-20% depending on borrowers’ profile.

The banking system including small finance banks is sitting on a cash surplus of Rs 7.12 lakh crore.

Banks carrying surplus short-term securities could liquidate it and deploy the funds for lending.

SLTRO boost

Reserve Bank of India (RBI) has announced a special long-term repo operation (SLTRO) for small finance banks, amid the second wave of Covid cases in the country. The central bank will conduct the special operation of Rs 10,000 crore at repo rate, Das said.

“Small finance banks (SFBs) have been playing a prominent role by acting as a conduit for the last-mile supply of credit to individuals and small businesses,” Das said during an unscheduled address.

“To provide further support to small business units, micro and small industries, and other unorganised sector entities adversely affected during the current wave of the pandemic, it has been decided to conduct special three-year long-term repo operations of Rs 10,000 crore at repo rate for the SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower,” Das said, adding that the facility will remain open till October 31, 2021.

Priority loans

The RBI also has decided to allow the classification of priority sector lending for loans given by small finance banks (SFB) to micro-finance institutions (MFI) for on-lending to individuals.

The decision has been taken to address the liquidity issues of MFIs amid the severe Covid crisis.

RBI Governor Shaktikanta Das said: “In view of the fresh challenges brought on by the pandemic and to address the emergent liquidity position of smaller MFIs, SFBs are now being permitted to reckon fresh lending to smaller MFIs (with asset size of up to Rs 500 crore) for on-lending to individual borrowers as priority sector lending.” This facility will be available up to March 31, 2022.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

IDBI Bank: Divestment, transfer of management control approved

Banking & Finance

[ad_1]

Read More/Less


The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave its in-principle approval for strategic disinvestment along with the transfer of the management control in the IDBI Bank Ltd.

“The extent of respective shareholding to be divested by the Central government and the LIC would be decided at the time of structuring of transaction in consultation with the RBI,” an official release said.

‘Perfect timing’

The Central government and Life Insurance Corporation (LIC) together own more than 94 per cent of equity of the IDBI bank. While the Central government owns 45.48 per cent stake, the shareholding of LIC in the IDBI Bank is 49.24 per cent. LIC is currently the promoter of the IDBI bank with management control, while the Central government is the co-promoter.

Capital market observers noted that the timing of the CCEA decision was quite perfect with the IDBI bank now coming into black after a gap of five years. For the financial year ended March 31, 2021, IDBI Bank has reported a full year standalone net profit of ₹1,359 crore against net loss of ₹12,887 crore in the previous year. The bank had also come out of the RBI’s Prompt Corrective Action (PCA) framework on March 10. “This could boost the valuation of the lender when the government goes in for the strategic disinvestment,” they said.

Speaking to BusinessLine soon after the announcement of the CCEA decision, Rakesh Sharma, Managing Director & CEO, IDBI Bank said, “The bank has seen a turnaround and balance sheet has improved. It is for the owners – the government and the LIC – to decide on the quantum of stake sale, timing and price etc. Now that bank has turned around, it may help them in attracting investors at right valuation.”

It is still not clear whether the management control and majority equity holding will pass on to a foreign bank or any domestic acquirer. One thing is for sure is that the LIC would tag along with the Central government, which is looking to exit, when the transaction is put through – so that the valuation is maximised for both the selling shareholders.

“It is expected that the strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of the IDBI bank,” the release added.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

RBL Bank Q4 net profit down 34%

Banking & Finance

[ad_1]

Read More/Less


Private sector lender RBL Bank reported a 34 per cent drop in its net profit to ₹75 crore for the quarter-ended March 31, 2021 led by a sharp rise in provisions and lower interest income. Its net profit stood at ₹114 crore in the fourth quarter of 2019-20.

The bank’s net profit for fiscal year 2020-21 increased marginally to ₹508 crore from ₹506 crore in 2019-20.

“Net profit at ₹508 crore for 2020-21, similar to 2019-20, is down quarter-on-quarter due to accelerated/additional prudential provisioning,” RBL Bank said.

For the fourth quarter, net interest income declined by 11 per cent to ₹906 crore as against ₹1,021 crore in the same period in FY20. Net interest margin also fell to 4.17 per cent in the fourth quarter last fiscal as against 4.93 per cent a year ago.

However, other income grew by a robust 38 per cent to ₹688 crore in the fourth quarter in 2020-21 versus ₹501 crore a year ago. Provisions surged by 25.6 per cent to ₹766 crore in the fourth quarter last fiscal as against ₹610 crore a year ago.

Provision coverage ratio was at 72 per cent in the fourth quarter as against 68.8 per cent in the third quarter and 64 per cent in the fourth quarter in 2019-20.

NPAs rise

Gross non performing assets stood at 4.34 per cent of gross advances as on March 31, 2021 as against 3.62 per cent as on March 31, 2020. Net NPAs stood at 2.12 per cent of net advances as on March 31, 2021 versus 2.05 per cent a year ago.

Vishwavir Ahuja, Managing Director and CEO, RBL Bank said “We have dealt with the impact of the Covid pandemic fairly satisfactorily in as much as we have taken several steps to strengthen the franchise, by building strong capital buffers, deepening and expanding the deposit base, granularising and improving the quality of the balance sheet, maintaining net NPAs at satisfactory levels, similar to last year, while maintaining overall profitability.”

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

HDFC Bank unveils organisational changes to power future growth

Banking & Finance

[ad_1]

Read More/Less


The country’s largest private sector lender HDFC Bank on Friday unveiled organisational changes under ‘Project Future – Ready’ for its next wave of growth.

“The bank is reorganising itself into three clear areas of Business Verticals, Delivery Channels and Technology/ Digital to further build its execution muscle and be ready for the future,” it said in a statement, adding that the creation of focused business verticals and delivery channels will enable it to capitalise on the opportunities across customer segments in the time to come.

HDFC Bank will re-double its efforts on its business verticals that include corporate banking, retail banking, private banking, government and institutional banking, retail assets and payments as well as commercial banking or the MSME vertical, it further said.

‘Engines of growth’

“We are creating engines of growth with top tier talent backed by technology and digital transformation to capitalise on opportunities that will accrue in the coming time,” said Mr Sashi Jagdishan, MD, HDFC Bank

Kaizad Bharucha, Executive Director, will continue to drive the wholesale bank including corporate banking group, capital and commodities markets group and financial institutions, HDFC Bank said.

Rahul Shukla, Group Head, will now be responsible for commercial banking (MSME) and rural vertical while Rakesh Singh, Group Head – Investment Banking and Private Banking will also be responsible for marketing, retail liability products and managed programmes.

Parag Rao, Group Head – Payments Business, will now drive the technology transformation and digital agenda, the bank said, adding that he will continue to be responsible for the payments vertical. Ramesh Lakshminarayanan, Chief Information Officer and Mr Anjani Rathor, Chief Digital Officer will report to Rao, the bank said.

Ravi Santhanam, CMO, will now be also responsible for driving digital marketing as a stand-alone delivery channel. He will also be additionally responsible for the retail liability products and managed programmes.

Sampath Kumar, Group Head – NRI will now be in charge of all tele-service relationships, including VRM delivery channel of the Bank.

“The role of Credit, Risk, Control and enabling functions continue to be critical as we scale up further in size and reach,” HDFC Bank said, adding that the current leadership would continue in these roles and support in the transformation journey to realise the vision of ‘Project Future Ready’.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Banking is an essential service; allow vaccinations for bankers on priority, asks ICICI Bank, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


ICICI Bank on Thursday said it is “much better” prepared to restrict the impact of the second coronavirus wave on its operations because of last year’s experience but appealed for banks’ employees to be allowed to take vaccinations on a priority basis as they are rendering an essential service. The second largest lender warned that if banking services were to fail, it can have an adverse impact on the economic activity, and hence it is pertinent for ensuring that at least the branch staff is allowed to take vaccinations.

The comments come at a time when localised lockdowns are being announced across many pockets of the country in view of the rising COVID infections, which are breaching the 3 lakh mark daily and also resulting in over 2,000 officially counted deaths.

“We are an essential services… we are all exposed (to customers). We don’t have the luxury. But we are not allowed vaccinations, not allowed to board trains, not allowed to board buses. So, what kind of essential services we are? More push should be there,” its executive director Anup Bagchi told reporters.

He warned that if banking operations get affected, we may have to face an economic crisis as well after the ongoing health crisis, and cited the case of a single automated teller machine shutting down for seven days to illustrate his point.

There is a case for “higher sensitivity” when classifying essential services, Bagchi said, stressing that there are other essential services also and bankers exposed to customers in branches should be allowed to vaccinate because they are exposed to walking-in customers.

Starting May 1, the central government has allowed every adult the chance to get vaccinated. However, concerns are being raised about the efficacy of such a move because of lack of vaccine stocks.

Meanwhile, Bagchi said the bank is much better prepared to take on the second wave of the pandemic because it had a system in place to take care of the disruptions coming because of the lockdowns as compared to last year’s experience, where it had to overhaul things.

Bagchi said an end-to-end digital journey where there is no need for a physical touch at all is essential while extending banking services and after the announcement of the national lockdown last year, it had to work on ensuring the same.

Further to the same, the bank on Thursday launched a ‘merchant stack’ which will help deliver seamless banking services, including a zero-balance current account, instant credit, a digital store management, a loyalty programme and other value added services to the 2 crore merchants nationally.

Bagchi compared the new services akin to a master switch where the customers will not be forced to come to the bank repeatedly for newer services, and added that the bank has put in place a refined data analytics back-end which will take care of loan decisions based on dynamic data points such as the transactions happening at the merchant’s end, inventory before giving the working capital credit of over 6 months.

From a risk perspective, Bagchi said the bank has built a strong portfolio in the business banking side, where its ability to make use of the data it possesses has ensured that the credit costs are less than 1 per cent as against double-digit figures for some lenders.

Declining to give a target of the number of customer relationships they are looking at, Bagchi said the fintechs cannot offer an end-to-end service like banks can.

For ICICI Bank, revenues from the stack can flow from fees, interest on credit offtake, float on balances in the accounts and merchant discount rate, he said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

L&T Finance Holdings Q4 net profit down 31%

Banking & Finance

[ad_1]

Read More/Less


L&T Finance Holdings reported a 30.9 per cent decline in its consolidated net profit to ₹266.85 crore in the fourth quarter of the fiscal year as against ₹386.15 crore in the same period in the previous fiscal. For the full fiscal 2020-21, its consolidated net profit fell 42.9 per cent to ₹970.94 crore as compared to ₹1,700.17 crore in 2019-20.

For the quarter ended March 31, 2021, its profit before exceptional items and tax was much higher at ₹718.24 crore as against ₹455.94 crore. Its total revenue from operations increased by 1.8 per cent to ₹3,415.16 crore in the fourth quarter of 2020-21, from ₹3,353.7 crore a year ago.

“Highest quarterly net interest margin (NIM) and fees in 2020-21 reached 8.17 per cent in the fourth quarter led by a strong growth in rural. In 2020-21, NIMs and fee was at 6.95 per cent,” L&T Finance said in a statement on Thursday. It maintains a strong capital adequacy of 23.8 per cent. In the fourth quarter, it had raised about ₹3,000 crore through a rights issue.

“As a prudent measure, LTFH is carrying additional provisions of ₹1,033 crore (1.2 per cent of standard book) as of the fourth quarter 2020-21,” it further said.

Its total lending book however, dropped by four per cent to ₹94,013 crore in the fourth quarter of the fiscal versus ₹98,384 crore a year ago.

Dinanath Dubhashi, Managing Director and CEO, L&T Finance Holdings, said, “With normalcy returning in the latter half, our focused businesses have witnessed continued momentum in disbursements, with increased market share across desired businesses (15 per cent in farm and 11 per cent in two-wheeler finance).”

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Resolution to appoint Samit Ghosh as MD and CEO, Ujjivan Financial Services not approved

Banking & Finance

[ad_1]

Read More/Less


A special resolution to appoint Samit Ghosh as Managing Director and CEO of Ujjivan Financial Services was not approved by the required majority of shareholders.

According to data with BSE, the special resolution to approve the appointment of Ghosh as MD and CEO of the company for a three year period, effective May 1, 2021 was “not approved by the requisite majority”.

Only 70.527 per cent of the votes were polled in favour of the resolution while 29.473 per cent of the votes were polled against the proposal. Ghosh is currently the non-executive Chairman of the company.

“These being special resolutions in nature, required a minimum of 75 per cent of the votes polled in favour of the resolution or a minimum of three times of the votes polled against the resolution,” said a regulatory filing by Ujjivan Financial Services.

A career banker, Ghosh was the erstwhile founder of the Ujjivan Financial Services and has served as its MD and CEO until January 31, 2017. He then took charge as the MD and CEO of Ujjivan Small Finance Bank Limited effective from February 1, 2017 and retired on November 30, 2019 on attaining the age of 70 years.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

ICICI Bank launches digital banking service for retail merchants

Banking & Finance

[ad_1]

Read More/Less


Private sector lender ICICI Bank on Thursday announced the launch of a comprehensive digital banking service that aims to empower over two crore retail merchants in the country.

Called Merchant Stack, it provides a bouquet of banking solutions and value-added services in ‘one single place’ for the retailer ecosystem.

“The main pillars of the stack are a new account named Super Merchant Current Account; two instant credit facilities called Merchant Overdraft and Express Credit — both are based on POS transactions, Digital Store Management facility to help merchants take their business online; exclusive loyalty rewards programme and value added services like alliances with major e-commerce and digital marketing platforms for expansion of online presence,” ICICI Bank said in a statement.

10 lakh customers of other banks using ICICI Bank’s mobile app

On InstaBIZ

The facility will enable merchants — grocers, supermarkets, large retail store chains, online businesses and large e-commerce firms — to meet their banking requirements seamlessly so that they can continue to serve their customers in challenging times during the pandemic, ICICI Bank further said.

Retail merchants can avail of these contactless services without visiting the Bank’s branches, at a time when people are advised to stay home and maintain social distancing. They can avail of these facilities instantly, on InstaBIZ, the Bank’s mobile banking application for businesses.

Banks coming together for new umbrella entity for retail payments

“There are over two crore merchants in the country with approximately $780 billion in value of transactions in 2020. They are expected to grow rapidly in the coming years. Through these trying times of the pandemic, it is our endeavour to enable the merchants with a digital banking platform that will help them to continue to serve their customers,” said Anup Bagchi, Executive Director, ICICI Bank.

The Merchant Overdraft facility would enable pre-qualified merchants with a linked ICICI Bank POS machine to get upto ₹25 lakh digitally, instantly and in a completely online and paperless manner.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , , ,

Despite pandemic, TMB registers impressive performance in FY21

Banking & Finance

[ad_1]

Read More/Less


Tamilnad Mercantile Bank (TMB) has reported an impressive performance on many parameters in FY21 that include strong growth in net profit, good asset quality and higher business.

The Tuticorin-based bank’s net profit grew 48 per cent at ₹603 crore in 2020-21 as compared to ₹408 crore in 2019-20.

“While higher net interest income and other income, and lower provisions are major factors for profit growth, this performance is truly on account of the efforts of branches. Our strength lies in relationship banking and today if at all we are cut above the rest, it is because of field level staff and their connect with the customers,” said KV Rama Moorthy, Managing Director & CEO, TMB told Businessline.

Operating profit

The operating profit of the company grew 21 per cent at ₹1,202 crore in FY21 when compared with ₹995 crore in previous fiscal, on the back of 17 per cent growth in net interest income that stood at ₹1,538 crore as against ₹1,320 crore. The interest expenditure decreased to ₹2,072 crore from ₹2,147 crore.

TMB had a gross NPA of ₹1,085 crore as of March 31, 2021, up from ₹1,021 crore a year ago. Its gross NPA as a percentage of total advances reduced to 3.44 per cent in FY21 from 3.62 per cent in FY20. Net NPA was marginally up to 1.98 per cent from 1.80 per cent. NPA and restructured advances of the bank is only 3.93 per cent.

The bank has made additional Standard Asset Provision of ₹50 crore for the pandemic. Total advances grew 12 per cent to ₹31,541 crore from ₹28,236 crore. Total deposits stood at ₹40,970 crore from ₹36,825 crore. The company achieved its total business target of ₹72,500 crore at ₹72,511 crore, up 11 per cent from ₹65,061 crore in FY20.

Credit to MSME sector grew 18 per cent to ₹12,036 crore (₹10,170 crore in FY20).

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Strategy to ‘conserve, emerge stronger’ helped Karnataka Bank during pandemic: MD

Banking & Finance

[ad_1]

Read More/Less


Karnataka Bank Ltd (KBL) has said that its strategy to ‘conserve, consolidate and emerge stronger’ has done wonders during the Covid pandemic-driven crisis.

In a letter to the shareholders, Mahabaleshwara MS, Managing Director and Chief Executive Officer of KBL, said the resilience of KBL was well exhibited during the pandemic-driven crisis. The Covid-19 business prescription of KBL — ‘conserve, consolidate and emerge stronger’ — has done wonders, he said, adding the bank has been able to contain the expenditure significantly, improve the operational efficiency, realign the credit portfolio by focusing on retail and mid-corporates so as to ensue sustainability, and develop cost-lite deposit portfolio with CASA share of more than 31 per cent, etc.

The digital transactions of the bank stood at an all- time high exceeding 90 per cent. “Now, in terms of our digital capability, we are almost on par with any new generation banks,” he said.

 

Advances

On the advances portfolio realignment strategy, he said the bank has been eyeing to have its credit exposure of minimum of 50 per cent to retail, 35 per cent to mid-corporates and not more than 15 per cent to large corporates so as to minimise the concentration on large corporate borrowers and to ensure continued sustainability.

The bank has been moving towards this direction in a sustainable manner due to the continuous efforts made by it. The yield on the retail and mid-corporate advances has been better than the large corporates, and the risk is wide-spread across the portfolio than that of concentration in the case of large corporate exposure, he said.

Aatma Nirbhar Bharat Abhiyan

Stating that the bank actively participated in the stimulus schemes of the government under the Aatma Nirbhar Bharat Abhiyan, he said it acted swiftly in extending the moratorium benefits, sanctioning of guaranteed emergency credit line loans to the needy and eligible borrowers and also acted quickly on MSME restructuring exercise etc., in a war footing way.

Referring to the Supreme Court order which said that there shall not be any charge of interest on interest / compound interest / penal interest for the period during the moratorium (from March 1 2020 to August 31 2020) on the loans from any of the borrowers even above ₹2 crore, he said the bank had already made ex-gratia payment of difference between compound interest and simple interest for the above six months to the borrowers in specified loan accounts as per the communications received from the Government of India dated October 23 2020 and the RBI Circular dated October 26 2020.

“In the case of remaining accounts, compound interest / penal interest on interest charged on the borrower accounts may have to be refunded and adjusted towards next instalment due within a reasonable time from the date of Supreme Court order dated March 23 2021. Further, with the vacation of Stay Order, NPA marking has also resumed,” he said.

FY 2021-22

For 2021-22, the bank is planning to grow its business at a moderate 12 per cent to take the total business turnover to around ₹1,42,500 crore. With a healthy business growth, ’cost-lite’ liability portfolio, strengthened fundamentals etc., the year 2021-22 should be an ‘Year of Excellence’ for Karnataka Bank, he added.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,
1 … 17 18 19 20 21 … 24