Tag: canara bank

Canara Bank cuts MCLR by up to 15 basis points, BFSI News, ET BFSI

Banking & Finance

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State-owned Canara Bank on Tuesday announced an up to 15 basis points cut in its marginal cost of funds based lending rate (MCLR). The bank has decided to reduce the MCLR for one-year tenor by 10 basis points to 7.25 per cent effective from October 7, Canara Bank said in a regulatory filing.

Most of the consumer loans such as personal, auto and home are priced on the basis of the one-year MCLR.

The bank has lowered MCLR on overnight and one-month tenors by 0.15 per cent to 6.55 per cent.

Meanwhile, DCB Bank also reduced its MCLR by 0.05 per cent across tenors, effective from October 6.

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

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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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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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Canara Bank raises ₹2,500 crore through QIP issue

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Life Insurance Corporation of India (LIC), BNP Paribas Arbitrage, Societe Generale and Indian Bank are among the qualified institutional buyers (QIBs) allotted more than 5 per cent equity shares in Canara Bank’s qualified institutions placement (QIP) issue aggregating ₹2,500 crore.

As per the latest shareholding pattern, big bull Rakesh Jhunjhunwala has picked up 1.59 per cent stake in Canara Bank.

The public sector bank, in a regulatory filing, said the Sub-Committee of the Board — Capital Planning Process of its Board of Directors, at its meeting held on August 24, 2021, approved the allotment of about 16.73 crore equity shares to eligible QIBs at an issue price of ₹149.35 per equity share.

The QIP opened on August 17 and closed on August 23.

LIC accounted for 15.91 per cent of the total QIP issue size, followed by BNP Paribas Arbitrage (12.55 per cent), Societe Generale (7.97 per cent), Indian Bank and ICICI Prudential Life Insurance Company (6.37 per cent each), Morgan Stanley Asia (Singapore) Pte – ODI (6.16 per cent) and Volrado Venture Partners Fund II (6.05 per cent).

Following the QIP, the Central government’s stake in Canara Bank, as on August 24, 2021, has come down to 62.93 per cent stake (against 69.33 per cent in the quarter ending June 30, 2021).

The shareholding of LIC, which is single largest public shareholder, has gone up from 8.11 per cent to 8.83 per cent stake.

Canara Bank shares closed at ₹151.05 apiece, down 2.99 per cent over the previous close on BSE.

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Canara Bank allots over 16.73 cr shares in Rs 2,500 cr QIP, BFSI News, ET BFSI

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State-run Canara Bank on Tuesday said it has approved allotment of over 16.73 crore shares in the Rs 2,500 crore qualified institutions placement (QIP) that closed a day earlier. The QIP opened on August 17 and closed on August 23, 2021.

The sub-committee of the board, capital planning process of the board of directors of the bank, at its meeting held on August 24, 2021, approved the allotment of 16,73,92,032 equity shares to eligible qualified institutional buyers at an issue price of Rs 149.35 per equity share, aggregating up to Rs 2,500 crore, Canara Bank said in a regulatory filing.

With this, the paid-up equity share capital of the bank stands increased to Rs 1,814.13 crore from Rs 1,646.74 crore, it said.

A total of seven investors have been allotted more than 5 per cent of the equity offered in the QIP issue, said the Bengaluru-based lender.

LIC subscribed to 15.91 per cent; BNP Paribas Arbitrage 12.55 per cent; Societe Generale 7.97 per cent; Indian Bank and ICICI Prudential Life Insurance – 6.37 per cent each.

Morgan Stanley Asia (Singapore) Pte-ODI bought 6.16 per cent of the shares issued in QIP and Volrado Venture Partners Fund II 6.05 per cent.

Canara Bank stock traded at Rs 154.80 apiece on BSE, up by 1.31 per cent from its previous close. PTI KPM ANS ANS



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Canara Bank allots over 16.73 cr shares in ₹2,500 cr QIP

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State-run Canara Bank on Tuesday said it has approved allotment of over 16.73 crore shares in the ₹2,500 crore qualified institutions placement (QIP) that closed a day earlier.

The QIP opened on August 17 and closed on August 23, 2021.

The sub-committee of the board, capital planning process of the Board of Directors of the bank, at its meeting held on August 24, 2021, approved the allotment of 16,73,92,032 equity shares to eligible qualified institutional buyers at an issue price of ₹149.35 per equity share, aggregating up to ₹2,500 crore, Canara Bank said in a regulatory filing.

With this, the paid-up equity share capital of the bank stands increased to ₹1,814.13 crore from ₹1,646.74 crore, it said.

A total of seven investors have been allotted more than 5 per cent of the equity offered in the QIP issue, said the Bengaluru-based lender.

LIC subscribed to 15.91 per cent; BNP Paribas Arbitrage 12.55 per cent; Societe Generale 7.97 per cent; Indian Bank and ICICI Prudential Life Insurance – 6.37 per cent each.

Morgan Stanley Asia (Singapore) Pte-ODI bought 6.16 per cent of the shares issued in QIP and Volrado Venture Partners Fund II 6.05 per cent.

Canara Bank stock traded at ₹154.80 apiece on BSE, up by 1.31 per cent from its previous close.

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Honda Cars ties up with Canara Bank to offer finance options to customers

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Honda Cars India Ltd (HCIL) on Monday said it has joined hands with Canara Bank to offer retail finance schemes to customers.

The partnership facilitates HCIL customers to avail easy financing options and hassle free car loans from Canara Bank for purchase of models like Amaze, City, Jazz and WR-V, the company said in a statement.

Special schemes for the auspicious festivities have also been offered to make this buying season even more attractive and rewarding, it added.

The automaker said it has been partnering with multiple banks to offer such schemes across the country with a special focus on semi-urban to rural regions.

“The partnership with Canara Bank is an extension of our efforts towards enabling easy and convenient financing solutions for our customers. We always endeavour to enhance customer experience right from the point of purchase through years of car ownership.

“We are confident that the tie-up with Canara Bank will help us meet the diverse finance requirements of our customers, especially during the upcoming festive season,” HCIL Senior Vice President and Director (Marketing & Sales) Rajesh Goel said.

Canara Bank General Manager (Retail Vertical) RP Jaiswal said the financial benefits include attractive rate of interest, concession in rate of interest to women buyers, minimum processing charges and maximum loan quantum- up to 90 per cent of the total value of the car inclusive of registration, life tax, accessories, etc.

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Secondary loan market may help banks exit stressed loans, BFSI News, ET BFSI

Banking & Finance

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Ten lenders, including the State Bank of India and ICICI Bank, have set up a secondary loan market association to promote the growth of the secondary market for loans in India.

The Secondary Loan Market Association (SLMA) is a self-regulatory body that has been set up with the help of the Reserve Bank of India.

Such a body was recommended by the RBI’s task force on the development of the secondary market for corporate loans headed by Canara Bank chairman T N Manoharan.

The other members of SLMA are Canara Bank, Standard Chartered Bank, Kotak Mahindra Bank, Deutsche Bank, Bank of Baroda, Punjab National Bank, Axis Bank and HDFC Bank.

The SLMA role

The SLMA will facilitate, promote and set up an online system for the standardisation and simplification of primary loan documentation, and standardisation of documentation for the purchase and sale/assignment documentation and other trading mechanisms for the secondary loan market and its documentation.

Banks can sell specific loans which could open up more lending opportunities, manage asset-liability mismatches, reduce concentration risk and comply with the RBI’s large exposure framework. The market can provide lenders to exit stressed loans even before a default.

The RBI task force recommendations

The task force recommended that loan documentation be standardised, plus the setting up of a Central Loan Contract Registry (CLCR), an ecosystem for enabling virtual information-sharing with various repositories, and the development of an appropriate menu of benchmark rates to be commissioned by the SRB.

It proposed that, for each corporate account, the SRB stipulate a minimum ticket size for trading as a percentage of the loan outstanding.

The task force has flagged roadblocks and these need to be speedily removed. One is the glaring absence of a systemic loan sales platform, another is the lack of an ‘effective, reliable and diligent’ price discovery mechanism, and, not least, the reality of insufficient participants.

Other issues include stamp duty during due diligence and transfer, and regulatory restrictions too.

The bottom line is that an efficient secondary market for corporate loans would have clear-cut benefits for both borrowers and lenders and lead to an active corporate bond market as well.



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Pandemic lifts home loan demand, rise up to 14% despite restrictions, BFSI News, ET BFSI

Personal Finance

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As the pandemic raged, people took to the safety of homes, literally.

Banks home loan portfolios jumped up to 14% in the first quarter despite a rise in Covid cases and restrictions due to the pandemic.

The home loan portfolio of the State Bank of India increased 11 per cent to Rs 5,05,473 crore in the first quarter of the current fiscal ended June 30, 2021, compared with ₹4,55,443 crore in the year-ago period. It forms constituting 23 per cent of the bank’s total domestic advances.

Home loans at Canara Bank increased 13.15 per cent during the first quarter to Rs 65,136 crore. In the previous year, the growth in the portfolio was only 10.6 per cent. Punjab National Bank saw a 6.1 per cent growth in home loans.

Rising ticket size

HDFC saw its average loan size jump from Rs 27 lakh to Rs 29.5 lakh during the Covid pandemic as borrowers sought larger homes with many companies shifting to work-from-home mode.

Even as the average property value purchased by borrowers during the pandemic rose, the affordability of loans for borrowers improved to a 25-year high.

The affordability is measured as the number of years of income required to buy a house.

The affordability improved to 3.2 years of income as against 3.3 years in FY20 and 2.5 years in FY19. This was largely because the annual income of borrowers rose from Rs 15 lakh to Rs 16 lakh even as property values remained at FY18 levels. The average age of the borrower also dipped from 39 years to 38 years.

Growing competition

ICICI Home Finance has launched an on-the-spot home loan for workers and self-employed who do not have income tax returns (ITR) to show their earnings.

Under the ”Big Freedom Month”, ICICI Home Finance aims to assist home loan seekers who do not have income tax returns proof to buy their dream home, it said in a statement.

Carpenters, plumbers, electricians, tailors, painters, welders, auto mechanics, and auto taxi drivers, among others, can avail of the spot home loan by submitting PAN card, Aadhaar card and bank account statement of the past six months.

Prospective homebuyers can visit the ICICI HFC branch to get free consultation from experts.

SBI is also focusing on home loans. It announced a 100 per cent waiver on processing fees till August 31. Before the offer, the processing fee was 0.40 per cent.



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PSU banks report fourfold jump in MSME slippages in Q1, BFSI News, ET BFSI

Banking & Finance

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Public sector banks have reported sharp slippages in their micro, small, medium enterprises (MSME) loans during the first quarter when the Covid restrictions kept the economy subdued.

The fresh slippages of all public sector banks jumped more than four times to Rs 53,914 crore in Q1FY22 from Rs 13,188 crore in Q1FY21. SBI, PNB, Union Bank of India, Bank of Baroda and Canara Bank accounted for 75 per cent of the total slippages in the April-June quarter.

State Bank of India‘s fresh slippages rose more than four times to Rs 15,666 crore in the first quarter, of which 40%, or Rs 6,416 crore came from the MSME sector.

Nearly 59 per cent of Indian Bank’s fresh slippage in the first quarter at Rs 4,204 crore came from the MSME sector while for Canara Bank, they were 58 per cent of the total slippage of Rs 4,253 crore during the first quarter.

The Reserve Bank take

During the monetary policy review earlier this month, the Reserve Bank had allayed the fears of lenders about the rising delinquency levels among small business loan borrowers, who are hit hard by the Covid second wave, saying the numbers are not alarming yet. The government and the central bank push to support MSMEs during the pandemic through credit measures like the emergency credit line guarantee scheme (ESLGS) saw lending to them jumping to Rs 9.5 lakh crore in the pandemic-hit FY21 from Rs 6.8 lakh crore in FY20, while the asset quality deteriorated to 12.6 per cent as of March 2021 from 12 per cent in December 2020.

‘No crisis’

RBI Deputy Governor Mukesh Jain said there is no crisis now on this front, as the stress level among small business borrowers are not very high, even though slippages and loan restructuring are rising of late. The situation is not very bad as many accounts are going in for restructuring under the Covid package version 2 announced in May, which allowed crisis-ridden borrowers to opt for up to two years of the moratorium, he said. “Yes, there is a visible increase in slippages among MSME borrowers, but the quantum of slippages has not reached an alarming level” Jain said.

“We are constantly monitoring all the regulated entities, particularly banks and large NBFCs to check their asset quality. Our stress tests also prove that there is nothing alarming as of now,” he added. A July 28, 2021, report by Sidbi-Cibil said the NPA levels among MSME borrowers have surged to 12.6 per cent in the March 2021 quarter, from 12 per cent in December 2020, while loans to them have jumped to Rs 9.5 lakh crore in FY21 from Rs 6.8 lakh crore in FY20.



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