Tag: economic times

IndusInd Bank shares tank after report of loan evergreening allegation at unit, BFSI News, ET BFSI

Banking & Finance

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BENGALURU – Shares of IndusInd Bank slid as much as 11.45% on Monday after a report said whistleblowers had alleged loan evergreening at the private sector lender’s micro finance arm.

On Friday, the Economic Times reported that whistleblowers had alerted the Reserve Bank of India (RBI) and the IndusInd board that Bharat Financial Inclusion (BFIL) had evergreened some loans – a practice where new loans are given to stressed borrowers to enable them to repay existing loans.

IndusInd denied the allegation in an exchange filing on Nov. 6 and said the report was “grossly inaccurate and baseless”.

However, it said nearly 84,000 loans were disbursed in May without customer consent due to a technical glitch and that the issue was rectified expeditiously.

IndusInd did not immediately respond to a Reuters request for comment.

On Monday, shares of the private sector lender were the top percentage losers on the Nifty private bank index and on track for their worst session since April 2020.

Due to pandemic-related restrictions, some loans had to be disbursed via cash at BFIL, and as of September-end, only 26,073 clients out of 84,000 were active with loan outstanding at 340 million rupees ($4.58 million), IndusInd said.

In multiple emails to the RBI and the IndusInd board in October, a whistleblower group that included BFIL officials alleged that the unit had evergreened loans, inflated revenues and under-reported non-performing assets, the report said.

The report also cited two people familiar with the developments saying there was a separate whistleblower complaint from an outsider on Oct. 14 that suggestions to set up risk management and audit committees for BFIL were ignored.

In its exchange filing, IndusInd said an independent review had been initiated by the bank to see if there was any process lapse or accounting failure at BFIL.

($1 = 74.1900 Indian rupees)

(Reporting by Chandini Monnappa in Bengaluru; Editing by Subhranshu Sahu)



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Acute shortage of crypto experts leads to hike in remuneration in India’s blockchain industry, BFSI News, ET BFSI

Personal Finance

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The number of active job openings in India’s blockchain industry has increased by 50 per cent since last year with 12,000 vacancies, according to Xpheno’s report, an Indian specialist talent solutions company.

The annual salary in the crypto industry has shot up to Rs 80 lakhs for crypto experts with 8 to 10 years of experience, according to the Xpheno report.

Kamal Karanth, the co-founder of Xpheno said that the mainstream visibility and talent-related progress of the crypto industry is still in its nascent stages, despite the industry being 12 years old.

The reason for such a sharp hike in remuneration is attributed to the shortage of a crypto talent base in India and abroad.

It is pushing up the salaries in Indian companies engaged with the global and domestic blockchain industry, the Economic Times reported.

Some other important findings about India’s crypto talent deficit in the Xpheno report are:

* Companies in the blockchain industry mostly search for employees having knowledge and experience in blockchain, machine learning, security solutions, Ripplex solutions, data analysis and front and back-end skills.

According to the Xpheno report, there is a 30 to 60 per cent shortage of skill-set with these specialisations.

* In niche skill areas such as data science and cybersecurity, the shortage is as high as 50 to 70 per cent.

* Karanth has predicted that the shortage of crypto-skilled workforce and the competition in wages will persist for the next two years.

In another report prepared by Nasscom, chamber of commerce of the trade industry in India and WazirX, the Indian crypto exchange, the following findings emerged about job vacancies in the crypto industry:

* Around 50,000 professionals are employed in India’s crypto industry currently.

* According to Sangeeta Gupta, senior vice president at Nasscom, a 30 percent increase in new jobs is expected in the coming months if the sector continues to grow at the current rate.

Since the cryptocurrency domain is still young,, there is a huge gap between the talent and available vacancies. Indian IT companies that are providing services to global clients, fintech start-ups, and consulting firms have been competing for experts in the crypto domain.



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Bank employees’ pension pay-out hiked to 30% of last-drawn pay, BFSI News, ET BFSI

Personal Finance

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Finance minister Nirmala Sitharaman detailed the way ahead for India’s public sector banks as part of her government’s EASE 4.0 policy. EASE 4.0 or Enhanced Access and Service Excellence is the Centre’s reform agenda of public banks aimed at institutionalising clean and smart banking.

Sitharaman met heads of PSBs to review financial performance of the lenders and progress made by them to support the economy battered by COVID-19 pandemic.

At the presser post launch in Mumbai, Finance Secretary Debashish Panda announced changes to the pension pay-outs of Public Sector Banks.

The changes instituted are set to increase the pension pay-out to bank employees, with all of them set to get an even 30% of their pay. The Centre has also asked banks to increase the employer contribution to the pension corpus to 14%, from the current 10%.

“Pension pay-outs to bank employees could increase to Rs 30,000-Rs 35,000 from the earlier cap of Rs 9284,” Panda said.

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Study, BFSI News, ET BFSI

Personal Finance

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Housing loan borrowers are making the most of the current record-low interest rate regime as indicated by a 42% on-year surge in demand for Balance Transfers (BT) and 26% rise for home loans in the first half of 2021, showed a Magicbricks Home Loans Consumer Study.

The demand for Loan Against Property (LAP) during this period has also witnessed a 20% rise. The soaring demand is largely attributed to the Reserve Bank of India’s decision to keep the repo rate unchanged at a constant 4%.

This has allowed many banks to offer home loans at interest rates lower than 7%, which has also been a key driver in augmenting the demand for home buying.

Magicbricks Home Loans Consumer Study also reveals that the most frequently searched home loan amount across tier-1 cities during this period was Rs 36 lakh, while that for BT and LAP were Rs 26 lakh and Rs 32 lakh, respectively. For tier-2 cities, it was Rs 26 lakh for home loans, Rs 23 lakh for LAP and Rs 18 lakh for BT.

“The rising demand for home loans is in line with the increasing demand for residential real estate across key markets of India. Several initiatives by the government, such as keeping the repo rate constant and reduced stamp duty rates, are steps in the right direction. These measures have been instrumental in boosting the overall consumer sentiment, making almost 50% of the borrowers opt for tenures less than 15 years,” said Sudhir Pai, CEO, Magicbricks.

With factors like low interest rates, stable prices, and attractive payment plans, he hopes the pent-up demand would soon translate into sales.”

With Work from Home (WFH) becoming a norm, home buyers are now looking to buy or upgrade to large configuration houses, and thus the demand is mostly in the mid and above segments, said the report.

Hyderabad, Pune, Ahmedabad, Mumbai, and Delhi are the top five tier-I cities witnessing maximum demand for home loans. A similar trend has been recorded in tier-II cities like Lucknow, Patna, Indore, Jaipur, and Agra.

In terms of the demand for Balance Transfers, New Delhi, Bangalore, Mumbai, Pune, and Hyderabad were the top five tier I cities, and Ghaziabad, Mohali, Noida, Indore, and Visakhapatnam the top five tier II cities.

For LAP, Bangalore, Hyderabad, Chennai, New Delhi, and Pune saw the most demand across tier I cities and Gurgaon, Jamshedpur, Patna, Faridabad, and Lucknow for tier II cities.

According to the report, Bank of Baroda, Indian Bank, SBI, HDFC and ICICI Bank are the most searched lenders on Magicbricks’ Home Loans platform.

Magicbricks is a part of Bennett, Coleman & Co, which published The Economic Times.



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