Tag: Covid-19

Covid-19 impact: Federal Bank provides about 400 part-time jobs in Kerala

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Federal Bank on Saturday said it has provided 400-odd part-time jobs with a monthly salary of Rs 18,000 at its branches in Kerala so far, in a bid to help those who lost their employment due to the Covid-19 pandemic.

Designated as ‘Covid Wardens’, these people were hired to manage crowds, provide masks and sanitiser to the public visiting the branches in the State, it said.

The livelihood enhancement project was started as part of its corporate social responsibility (CSR) initiative in August 2020 and is continuing even now.

Federal Bank Chief Human Resource Officer Ajith Kumar K K said, “This is a part-time job given to tide over the situation, not a full-time employment.” The bank hired these people at a monthly salary of Rs 18,000 per month. About Rs 6 crore has been spent towards salary in the last 10 months, he said.

Since many had lost jobs due to the pandemic in the State there were requests for creating part-time jobs from several agencies and organisations.

“We thought of finding a way to provide livelihood to people who lost jobs due to the pandemic and help them tide over the economic hardship. That’s why we decided to hire such people,” he added.

Kumar further said crowd management at branches had become a big issue during the pandemic as the Kerala government has restricted entry of not more than five people at a particular time.

“Therefore, we thought hiring part-time ‘Covid Wardens’ will be helpful to both. We provided jobs to about 400-odd people in Kerala,” he said.

Hiring was done in Kerala because the State was having many positive cases at that time and moreover the footfall in branches were also high.

Whereas in other states, ‘Covid Wardens’ were not hired as there were security guards managing the crowd at bank branches, Kumar added.

Asked if the initiative will continue, Kumar said the bank will discontinue if the Covid-19 positivity rate falls below five per cent in a particular locality.

“We are keeping a close watch on positivity rate in the state,” he said.

Kumar also mentioned that the needy people were hired irrespective of their education qualification through reputed agencies and organisations, and the salary is being paid through these agencies.

Although there is a jobless situation in many sectors due to the pandemic, the bank however cannot take care of all jobless people, Kumar said. He added, “We are playing our small part under our CSR initiative.”

The Kochi-based Federal Bank said it spent the entire allocated CSR funds of Rs 35 crore during the 2020-21 fiscal. The bank expects the CSR budget for the current year would be around Rs 40 crore.

The bank has been implementing CSR initiatives for the last 10 years through the Federal Bank Hormis Memorial Foundation.

Among other CSR initiatives, the bank has spent Rs 4 crore on setting up a separate 100-bed ward with ICU facility in a hospital in Kochi. It is operating an outreach programme ‘Sanjivini Vehicle’ in five districts to create awareness about vaccination.

Besides, the bank provides scholarships for higher studies to 150 students, supplies to select health institutions, equipment required for treatment of neurological disabilities besides running skill academies to train local youth.

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Kerala government seeks moratorium on repayment of loans, BFSI News, ET BFSI

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The Kerala government has approached the Centre to put in place a moratorium on repayment of loans till December 31 in order to provide relief to individuals in the unorganised sector, MSMEs, agriculture and others adversely affected by COVID-19 pandemic and the subsequent lockdown.

Kerala has sought a moratorium of loans without accrual of interest and penal interest during the moratorium period.

Kerala Finance Minister K N Balagopal, in a letter to Union Finance Minister Nirmala Sitharaman, said the impact of the second wave induced lockdown has adversely affected the economic and social well-being of all sectors of the society.

“…it is felt that the burden of repayment of the loans taken by individuals, especially those in the unorganised sector, MSMEs and agriculturalists is particularly onerous at this time, and these sections need some relief by way of moratorium on the repayment of loans at least till December 31, 2021,” Balagopal said in a letter dated June 16.

He said the state government has taken all steps to ameliorate the hardships faced by the people, especially the vulnerable sections.

“I request your kind intervention to put in place a moratorium on repayment of loans at least till December 31, 2021 without accrual of interest and penal interest during the moratorium period,” he said in the letter.

The Finance Minister pointed out that the economy of Kerala has been under considerable stress since 2018 due to successive natural disasters including the massive floods which lashed the state wreaking havoc in most of the districts.

The outbreak of COVID-19 in early 2020 further exacerbated the stress on the economy, he added.



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Muthoot Capital Services net profit declines to Rs 8.9 crore in Q4 of FY21

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Muthoot Capital Services Ltd has posted a net profit of Rs 8.9 crore in Q4 of FY21 as against Rs 13.6 crore in the same quarter last year. The net profit for the whole year was Rs 52.2 crore against Rs 60.2 crore of previous year.

The total income for the quarter touched Rs 109.6 crore. With things slowly starting to return back to normal, the company while continuing to adopt a conservative approach disbursed total loans amounting to Rs 290.9 crore during the quarter.

The total AUM reached Rs 2088.5 crore at the end of the quarter, including the assigned portfolio of Rs 16.6 crore.

Thomas George Muthoot, Managing Director, Muthoot Capital Services Ltd, said, “While we saw some improvement, the challenging period for business is still continuing in view of the second wave that the country is witnessing. While the business is expected to do well going forward due to various requirements of social distancing, need for your own personal vehicle, the trends seen during the last festive season etc, it could be a month or so more before we start moving towards normalcy. The pre-Covid levels could be a quarter away. While we are hopeful of volumes to return based on the festivals in the locations that we are doing business in, it is the pent-up demand and the postponed demand/ volume that we are confident of driving our volumes in the next 3 quarters.”

Madhu Alexiouse, Chief Operating Officer said, “During the last two quarters of FY 21 we were seeing increased demand and while in March there was a pause in growth, the other months were excellent. But with the second wave coming up in the second half of the current year, things did stop for a while.

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Rakesh Mohan, BFSI News, ET BFSI

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The second wave of COVID-19 may worsen stressed assets in the banking system, adding pressure on the financial stability, said former RBI deputy governor Rakesh Mohan. He said the Indian banking system has been reeling under the pressure of non-performing assets (NPAs) since 2015.

Various resolution measures including Insolvency and Bankruptcy Code were undertaken to bring down NPAs and then COVID-19 hit in 2020 impacting the growth process, he said during a virtual conference organised by India International Centre and Research & Information System for Developing Countries.

Mohan, who served as deputy governor of the Reserve Bank of India (RBI) twice between 2002 and 2009, said “we have more difficult task than other countries because we had a legacy of bad debt before COVID-19”.

As per the Financial Stability Report of December 2020 by RBI, NPA could go up to 13.5 per cent in the later part of this year, he said, adding, “I would imagine that this would be worse because of the second wave…So this is a real challenge for RBI to maintain financial system’s resilience.”

According to a report titled ‘The Response of the Reserve Bank of India to COVID-19: Do Whatever it Takes’ authored by Mohan, despite all the measures implemented to promote the flow of credit to all segments of the market, credit growth has continued to be sluggish except for a significant increase to the SME sector.

“Hence there is a mismatch between the performance of the real sector and financial markets. This could potentially lead to enhanced stresses experienced by both lenders and borrowers, leading to potential financial instability,” the report released earlier this week by the Centre for Social and Economic Progress said.

Thus, he said, financial stability challenges remain for the Indian financial system and its regulator in the months to come.

Mohan’s views come days before RBI’s release of bi-annual Financial Stability Report, which will give investors a clearer picture about the state of India’s banking sector and the outlook.

RBI is slated to come out with the report towards the end of this month.

As per the Financial Stability Report, NPAs of the banking sector were projected to surge to 13.5 per cent of advances by September 2021, from 7.5 per cent in September 2020, under the baseline scenario.

The report had warned that if the macroeconomic environment worsens into a severe stress scenario, the NPA ratio may escalate to 14.8 per cent.

Earlier this year, another former deputy governor H R Khan had observed that non-performing assets (NPAs) or bad loans of public sector banks could cross 18 per cent if there is deterioration in economic activity due to the pandemic.

Mohan further said RBI has been very active before and after COVID-19 and has taken a number of actions to protect financial system from the ravages of the pandemic.

He expressed concern that the number of professionals at RBI in 2020-21 is lower than that in 2007-08.

Compared to any other significant country, he said, the number of professionals at RBI is really small.

There is a need to increase the number of professionals in the central bank in the light of expansion of financial system and transformation of financial space in the last 12-13 years, he observed.



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RBI has taken steps to smoothen impact of second COVID wave, says Deputy Governor Jain, BFSI News, ET BFSI

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Asserting that the second wave of COVID-19 has posed some challenges, RBI Deputy Governor M K Jain on Friday said both the central bank and the government have taken steps to mitigate its impact. He also said the domestic banking system is strong, as per the preliminary data for the quarter ended March 2021.

“I am happy to inform that the banking sector was in strong position when COVID-19 hit…the preliminary data suggest that in terms of CRAR that has been improved upon, the profitability has been improved upon, provision coverage ratio that has also been improved over the previous year, and the gross NPA as well as net NPA has come down,” he said.

Jain was addressing a virtual conference organised by the India International Centre (IIC) and Research & Information System for Developing Countries (RIS).

Observing that the COVID-19 second wave has some challenging aspects, he said both the RBI and the government are dealing with this and taking steps to smoothen the impact on the financial system.

The central bank has announced a slew of measures in the last two months to help flow of credit to the desired sectors and maintain adequate level of liquidity in the system.

Earlier this month, RBI kept its benchmark interest rate unchanged in view of elevated level of retail inflation.

Jain said the RBI strives to ensure financial resilience of banks and NBFCs by prescribing a set of micro prudential norms like minimum capital requirements.

To maintain resilience, he said, the RBI has asked financial entities to undertake stress tests at regular intervals and accordingly take risk mitigation measures.

Jain further said the financial system, both in India and overseas, is witnessing rapid shifts in the operating environment due to changing competitive landscape, automation and increasing regulatory supervisory expectations.

The Reserve Bank of India has put in place various regulations to improve the governance in banks and make them more resilient, he emphasised.

“In addition, banks have also made improvements in the risk management capacities. Yet, the changing operating and risk environment requires banks to be vigilant, strong and agile so as to identify risks early and absorb the shocks and be able to adapt to the newer ground realities.

“I am hopeful that banks and other financial institutions in India will rise to the challenge, continue to demonstrate the resilience and be able to contribute to a USD 5 trillion economy and beyond,” he said.

Talking about the link between financial system and climate resilience, Jain said while insurance companies directly face the climate risk, banks are also required to take into account such risks more seriously.

In addition to mitigating operational risk arising out of climate extremes, he said there is a need for the financial system to move towards green financing, keeping in mind the development requirement of the country.

“While as of now RBI has not come out with any regulatory prescriptions, but we are evaluating all those aspects and then at the appropriate time after evaluating all the things a call may be taken,” he said.



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India’s consumer credit market to grow at a higher rate than global economies: Report

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Driven by a shift in demography, a burgeoning affluent middle class ramping up private consumption and growth in rural population, India’s consumer credit market is projected to grow at a higher rate than most major global economies.

According to the Experian-Invest India Credit Ecosystem Review report, the factors supporting the consumer credit market would be all catalysed by technology.

Experian is a global information services company, and Invest India is an Indian agency for investment and facilitation.

V-shaped recovery

The report, which tracks India’s credit ecosystem from March 2017 to February 2021, highlights a ‘V’-shaped recovery across Indian markets, with a gradual and steady improvement in sourcing trends.

Neeraj Dhawan, Managing Director of Experian India, said: “The behavioural shift in Indian population has been tremendous just over the last five years. Consumerism has been growing in the previously untapped semi-urban and rural regions as millennials become the main driving force of the mass market. Technological adaption is steep which has, in turn, created acceptance for new financial tools”.

“The biggest beneficiary of this change is the credit market, which is evolving into a self-generating and self-sustaining one. In line with this trend, the risk appetite of traditionally conservative lenders is growing as the horizon of creditworthiness expands. With its array of innovative solutions that help businesses in credit evaluation, smarter lending decisions and safeguarding themselves and their customers from fraud, Experian is at the forefront and one of the main enablers of this shift,” he added.

Domestic credit growth

The country’s domestic credit growth has averaged 15.1 per cent from March 2000 to March 2021, primarily driven by retail loans and increasing penetration of credit cards. The consumer credit market continues to expand at a rate higher than most other major economies globally, with 22 million Indians applying for new credits every month.

The recovery of personal loans has been high in both low (less than Rs 1 lakh) and high (higher than Rs 5 lakh) ticket-size segments, while the recovery in higher ticket-size loans is also improving steadily.

The credit portfolio has been resilient in February 2021, and growth stood at 8 per cent year-on-year for the portfolio of key products, lower than the 13 per cent observed for March 2020. However, the pace of growth slowed down for all products with unsecured products experiencing a faster year-on-year growth rate compared to secured loans.

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Bharti AXA General Insurance back in black in FY21; reports ₹120 crore PAT

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Bharti AXA General Insurance recorded a net profit of ₹120 crore on a gross written premium of ₹3,183 crore during financial year 2020-21.

The private general insurer had recorded a net loss of ₹243.63 crore on a gross written premium of ₹3,157 crore in FY20.

Bharti AXA General Insurance achieved a lower combined ratio at 110.5 per cent during FY21 compared to 120.7 per cent in FY20 on account of improved profitability. Market ranking of the company in the private General Insurance sector also improved to 10th from 11th position in previous year despite the pandemic.

Sanjeev Srinivasan, Managing Director and CEO, Bharti AXA General Insurance, said in a statement, “Owing to the Covid-19 pandemic, FY21 has been a challenging year for the industry and especially for us at Bharti AXA General Insurance.

While the overall demand for goods and services across the economy has been relatively low, consumers felt an evident need of insurance on the back of the uncertainty the pandemic has brought.This changing consumer behaviour helped us respond with required solutions and agility through tech advancements. Further, the year demanded realignment with focus on the health and commercial lines segment, and we managed to drive growth in these lines of business on account of increased awareness and launch of new products.”

While the health segment saw a 11 per cent growth at ₹457 crore in FY2020-21 against ₹410 crore last year, Retail health grew by 48 per cent driven by launch of new products and increased awareness due to the pandemic.

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Black fungus fully covered under health covers: Star Health MD

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Claims for black fungus or mucormycosis are fully covered under health insurance covers, said S Prakash, Managing Director, Star Health and Allied Insurance.

“Black fungus has to be 100 per cent settled by insurance. Insurance has to pay for any infection, bet it viral, bacterial or fungal and such claims have to be fully approved by all insurance companies and all policies,” Prakash said, adding that the insurer is honouring all such claims.

Mucormycosis has emerged as one of the significant complications of Covid-19, although it happens in other cases too.

The medical costs for treating the disease are high and there is also need for prolonged hospitalisation.

Also read: Indians already ravaged by virus now slammed with medical debt

Prakash said, insurers are now trying to track Covid-19 complications based on the International Classification of Disease or ICD code.

“We have created a separate ICD code, WHO has also given an ICD code for Covid complications. With this, we should be able to track more and more complications related to Covid in days to come,” he told BusinessLine in an interaction.

The standalone health insurer has incurred Covid related claims of ₹1,530 crore in 2020-21 and worth ₹990 crore this fiscal.

Rising demand

Prakash said that the demand for health insurance is increasing but families now prefer to take a comprehensive cover rather than opt for the Covid specific Corona Rakshak or Corona Kavach policies.

“Star Health is still offering Corona Rakshak and Corona Kavach policies. But these were designed with the expectation that the pandemic would be contained in a few months. Now people are preferring to buy a standard mediclaim cover, as they feel that short term covers are not enough or really meaningful,” he said.

The average sum insured for families has also increased to ₹5 lakh, he noted.

He also said the insurer is not differentiating amongst customers who have had Covid-19 for medical insurance policies.

“Star is not imposing any specific guidelines for people who have recovered from Covid-19. No questions are being asked, they will be considered like any common person without exclusions or loading of premium,” he said.

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MD, BFSI News, ET BFSI

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Private sector IDFC FIRST Bank is offering compensation equivalent to four times of the CTC as well as continuation of salary for two years to the families of the employees who lost their lives due to the coronavirus infection.

Among others, the bank is also offering loan waivers of such employees so that their families do not feel pressured due to the economic burden.

“The bank’s employees are usually young people. Their families will be taken by shock. So we put together a composite programme covering all angles. We are giving four times the annual CTC as compensation plus continuing the salary for two more years so that the family can get the time to economically recover,” V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, told PTI.

The bank is taking initiative to contact the families of those deceased and informing them about what the bank has to offer to them, he added.

“Among others, as part of this scheme we are waiving employee loans as families will have to bear the burden otherwise. If an employee has taken a personal loan, car loan, two-wheeler loan or education loan, etc, that is 100 per cent waived by the bank. Housing loan waiver is up to Rs 25 lakh (before June 30, 2021),” Vaidyanathan said.

Suppose, if an employee had taken Rs 30 lakh loan, IDFC FIRST will waive Rs 25 lakh and residual loan will become 5 lakh, he explained.

“The family can pay the reduced EMI from the salary credits we will make to them for 2 years. We are asking employees to insure their loans going forward (after June),” he said.

Vaidyanathan said around 20 employees of the bank have lost their lives to Covid.

“We are reaching out to the families of the deceased employees and telling them that you are entitled to this. We will give employment to the spouse if they are eligible on merit, if not then we will give them Rs 2 lakh for skilling them,” he said.

The compensation is applicable retrospectively and will continue as long as the pandemic remains.

Among others under this ‘Employee Covid Care Scheme 2021’, the lender has made provision of scholarship of Rs 10,000 monthly to two children up to graduation, funeral expenses up to Rs 30,000, relocation assistance of Rs 50,000 as well as pro-rata bonus payout for the period served this year by the deceased employee.

Apart from this, Vaidyanathan said the bank employees have taken an initiative on their own to help the needy customers belonging to the low income group by generating a corpus from their salaries.

Under this employee funded Ghar Ghar Ration programme, the bank employees will supply ration kits to 50,000 low income customers whose livelihood has been impacted by the pandemic.

Employees are procuring ration kits comprising 10 kg rice/flour, 2 kg lentils, 1 kg sugar and salt, 1 kg cooking oil, 5 packets of spices, tea, biscuits and other essentials, he said, adding employees have contributed one day to one month’s salary for this.

He said as many as 16,000 benefits have reached across Rajasthan, MP, Maharashtra, Odisha, Gujarat, Karnataka, Haryana, Tamil Nadu, Andhra Pradesh and Chhattisgarh under this programme launched recently.

The lender has also identified 250 vulnerable families who have lost an earning member of their family to Covid-19 with a cash relief support of Rs 10,000 in a partnership with ‘Give India’.



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Covid-19: SC refuses to pass direction on plea to redress borrower hardship

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Press Trust of India The Supreme Court on Friday refused to pass direction on a plea seeking measures to redress the financial hardship faced by borrowers during the second wave of Covid-19 pandemic, saying it is in the realm of policy decision.

“The government has many things to do. They have to spend money on vaccine, on migrant labourers,” the apex court said, adding that it is for the Centre and the RBI to consider the issue.

“These are issues having financial implications and we are not the experts,” a bench of Justices Ashok Bhushan and MR Shah told advocate Vishal Tiwari, who has filed the petition.

The top court was hearing the plea which sought directions to the Centre and the Reserve Bank of India (RBI) to take remedial measures to redress the financial stress faced by borrowers during the second wave of the Covid-19 pandemic.

During the hearing, Tiwari referred to the reports on how the second wave of the pandemic has affected the economy.

“The petitioner submits that the circular does not address the hardship of the borrowers. Be that as it may, the financial relief and other measures are in the domain of the government,” the bench said in its order.

“We are of the view that no direction be passed. We observe that all the issues which are raised are policy matters and it is for the Union of India and the Reserve Bank of India to take appropriate decision,” the apex court said.

The bench said it had dealt with similar aspects in a writ petition which was filed last year.

The plea had sought directions to the Centre and the RBI to permit the lending institutions to grant interest free moratorium period for term loan and defer the payment of loan instalments for a period of six months or till the situation from Covid-19 normalises.

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