Tag: finance and banking

Indian Bank launches video KYC facility enabled by VCIP technology, BFSI News, ET BFSI

Banking & Finance

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Public sector Indian Bank on Tuesday said it has launched the Video KYC (know your customer) facility, which allows an applicant to open an account from anywhere by incorporating its Video-Based Customer Identification Process (VCIP) technology, on its web-based platforms. To begin with, Indian Bank, in a statement said the initiative would dispense with the need for a personal visit to any branch of the bank to complete the physical verification process in place, currently.

The Video KYC facility, developed in conjunction with Gieom Business Solutions, further simplifies the subsequent steps and would deliver the cheque book and ATM card to the registered address of a customer.

Customers can proceed to deposit the minimum balance through offline or online route and transact seamlessly using the ATM card and mobile banking after completing the initiation procedures.

“It is a momentous occasion for us at Indian Bank to launch our Video KYC facility that will be using the latest VCIP technology to enhance customer convenience and experience.”, the bank’s MD and CEO, Shanti Lal Jain said.

“We will extend this facility to all applicable services in a phased manner… additionally, this should help us extend our reach and significantly help us in driving financial inclusion… This is a step towards digitization,” he said.

The pre-requisites to avail the Video KYC facility are a valid mobile number, e-mail, PAN Card, Aadhaar number (linked with mobile number) and access to a computer equipped with camera and a microphone facility.

The process validates the applicant’s credentials from multiple sources like a bank representative initiated video-call, information from UIDAI, and OTP for registration of the mobile number, the statement added.



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Tata Motors partners up with Bank of India; new vehicle financing means for customers, BFSI News, ET BFSI

Personal Finance

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Tata Motors on Tuesday said it has partnered with Bank of India (BOI) to offer finance options to all its passenger vehicle customers. Under the partnership, BOI will provide loans to Tata Motors’ customers at an interest rate starting from as low as 6.85%, the company said in a statement.

Moreover, the scheme will offer a maximum of 90% financing on the total cost of the vehicle, which includes insurance and registration, it added.

Customers can also opt for EMI starting with Rs 1,502 per lakh on a 7-year repayment period, the company said.

“This partnership is in line with our #FinancEasy Festival, wherein we are collaborating with multiple finance partners across India to make ownership of cars accessible, as well as a hassle-free process for the customers and thereby adding to the celebrations of this festive season,” Tata Motors Vice President, Sales, Marketing & Customer Care, Passenger Vehicle Business Unit Rajan Amba said.

BOI General Manager – Retail Business Rajesh Ingle said Bank of India has reoriented the banking services with retail customer as focal point by designing products that are aligned to customer needs.

“Our vehicle loan products with lowest rate of interest is one such product. Bank’s tie-up with Tata Motors will be win-win for customers in the sense that they can access best in class personal mobility solution with the best finance option from Bank of India,” he added.

The offers through the partnership will be applicable on the New Forever range of conventional cars and SUVs as well as on EVs for personal segment buyers across the country, the statement said.



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Finmin to soon start process for appointment of MD, DMDs of Rs 20,000 cr NaBFID, BFSI News, ET BFSI

Banking & Finance

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The finance ministry will soon start the process for the appointment of managing director (MD) and deputy managing directors (DMDs) of the newly set up Rs 20,000 crore development finance institution NaBFID, to catalyse investment in the fund-starved infrastructure sector.

Last month, the government appointed veteran banker K V Kamath as the chairperson of the National Bank for Financing Infrastructure and Development (NaBFID) for three years.

According to sources, the finance ministry will soon intimate the Banks Board Bureau (BBB) about the appointment of MD and DMDs of NaBFID.

The Bureau will issue advertisements and undertake a selection process, sources said.

The BBB is the headhunter for state-owned banks and financial institutions.

The MD, DMDs and whole-time directors would not hold office after attaining the age of 65 years and 62 years respectively.

As per the National Bank for Financing Infrastructure and Development (NaBFID) Act 2021, the institution would have one MD and not more than three DMDs.

The government has committed Rs 5,000 crore grant over and above Rs 20,000 crore equity capital.

The central government will provide grants by the end of the first financial year. The government will also provide guarantee at a concessional rate of up to 0.1 per cent for borrowing from multilateral institutions, sovereign wealth funds, and other foreign funds.

The development finance institution (DFI) has been established as a statutory body to address market failures that stem from long-term, low margin and risky nature of infrastructure financing.

The DFI, therefore, has both developmental and financial objectives. To begin with, the institution will be 100 per cent government owned.

It will help fund about 7,000 infra projects under the National Infrastructure Pipeline (NIP) which envisages an investment of Rs 111 lakh crore by 2024-25.

The DFI will remain outside the purview of CAG, CVC and CBI, a move aimed at enabling faster decision-making.

The government expects the DFI to leverage this fund to raise up to Rs 3 lakh crore in the next few years.

During the pre-liberalised era, India had DFIs which were primarily engaged in the development of industry.

ICICI and IDBI, in their previous avatars, were DFIs. Even the country’s oldest financial institution IFCI Ltd functioned as a DFI.

In India, the first DFI was operationalised in 1948, with the setting up of the Industrial Finance Corporation of India (IFCI).

Subsequently, the Industrial Credit and Investment Corporation of India (ICICI) was set up with the backing of the World Bank in 1955.

The Industrial Development Bank of India (IDBI) came into existence in 1964, to promote long-term financing for infrastructure projects and industry.



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Report, BFSI News, ET BFSI

Banking & Finance

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-By Ishwari Chavan

The Indian banking sector is likely to witness a fresh phase of consolidation over the medium term, between FY22 and FY24, primarily driven by large private sector banks, according to a report by Acuite Ratings and Research.

Given the current buoyancy in equity markets, there is now a significant opportunity for large Indian private banks for inorganic growth through acquisition of smaller private banks that continue to face headwinds or even public sector banks where the government is considering a disinvestment, the report said.

The banking sector saw its first phase of consolidation involving public sector banks over the period 2017-20, with an intent to enhance their competitiveness, capital position and operational efficiency. Post this, there are twelve PSBs, including seven large ones and five smaller ones against 27 in 2017.

Market share

While PSBs have been enjoying a dominant market share since nationalisation of banks in 1969, they have witnessed a steady drop in both credit and deposit market share over the last one decade, the report said.

This was further accelerated over the last five years, with the impact of the Asset Quality Review (AQR) and the subsequent spike in NPAs in the banking sector.


Share of Public Vs Private Sector Banks in Outstanding Credit
Source: Acuite Ratings and Research

Over the last five years, the market share of state-owned banks has dropped by around 10% in both deposits and advances due to asset quality, resultant profitability and capital challenges.

This market share has been largely taken over by private banks, who have cemented their market position through easier access to capital, along with technological initiatives.


Share of Public Vs Private Sector Banks in Outstanding Deposits
Source: Acuite Ratings and Research

Domination of large private banks

Given investors’ confidence, large as well as some select mid-sized private banks have been able to raise funds through capital markets.

Despite repercussions from COVID, larger and few mid-sized private banks have been able to raise capital through equity (QIP) snd Tier I/II bonds in FY21 and H1FY22.

Large banks have been reporting double-digit growth rates on an average over the last five years due to a comfortable capital cushion, which can shield them from any asset quality stress.

Despite some improvement in profitability during FY21, small-size private banks continue to have low return on assets, reflecting their vulnerability in a challenging environment. These banks have also been facing difficulties in raising capital.

Furthermore, their ability to bring about a structural improvement in their lending and deposit profile is uncertain due to limitations in their geographical franchise, the report said.


Size Wise ROAA Trend of PVBs
Source: Acuite Ratings and Research



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BSE joins hand with HDFC Bank to promote startup, SME listing, BFSI News, ET BFSI

Banking & Finance

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New Delhi, Leading stock exchange BSE on Tuesday said it has collaborated with private sector lender HDFC Bank to further encourage and promote the listing of startups and small and medium enterprises (SMEs) across India. Through this pact, HDFC Bank and BSE will evaluate banking and lending solutions for startups, undergoing listing process on startups and SME platform, the exchange said in a statement.

HDFC Bank will identify potential startups as well as SMEs and help them to partner with intermediaries like merchant bankers, chartered accountants and lawyers to list on BSE.

Both the parties have agreed to conduct and participate in joint outreach activities and contribute to each other’s publications on the startup ecosystem in India.

“Through this MoU (Memorandum of Understanding), we aim to resolve funding constraints for startups and SMEs in India. BSE along with HDFC Bank shall work together to create a sustainable ecosystem for startups and SMEs,” Ajay Thakur, Head, BSE SME and startups, said.

“Startups are reimagining and reshaping the world we live in. At HDFC Bank, we are committed to developing, strengthening and collaborating with the startup community and ecosystem in the country,” said Iqbal Singh Guilani, SVP, Retail Branch Banking, HDFC Bank.

BSE became the first stock exchange to get approval from markets regulator Sebi and had launched its SME platform in March 2012.

So far, 353 companies listed on the BSE SME Platform have raised Rs 3,732 crore from the market, and the total market capitalisation of such firms stood at Rs 38,538 crore. Out of 353 companies, 117 have migrated to BSE Main Board.

BSE is the market leader in this segment, with a market share of 61 per cent.



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Financiers line up green deposits as investors ready as ESG concerns trump yield chase, BFSI News, ET BFSI

Personal Finance

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As investors become environmentally conscious and look to put their money in green projects, financiers are rising to the cause.

They are offering green deposits to customers which will be used to fund environmentally friendly projects.

UK-based Hong Kong and Shanghai Banking Corp (HSBC) has raised $400 million of green deposits in India and identified financing opportunities to use those funds.

Under its strategy, the bank first finds avenues to finance before raising the resources. The loans are extended for renewable projects, biodiversity linked initiatives, clean transportation and pollution control.

Once the loans are sanctioned they are matched with deposits.

While HSBC will offer deposits and lend the money raised to companies, HDFC plans to raise these funds through retail depositors.

HSBC has opened these deposits only for corporate clients currently, but there is no differentiation in interest rates with normal deposits. The bank is currently offering a tenure ranging from 90 days to five years.

HDFC bonds

Last week, India’s largest private-sector mortgage financier announced the launch of a new green deposit plan to attract environmentally conscious depositors.

The company plans to raise these deposits from individuals to lend to projects by retail borrowers.

It plans to use these funds to lend to standalone homes which use environment-friendly practices, like putting up solar panels and water recycling, or even to women borrowers or self-help groups.

These deposits to be raised from retail and HNI investors will carry interest rates up to 6.55 per cent, while the maturity period would vary from three to five years.

Senior citizens (60 years+) will be eligible for an additional 0.25 per cent per annum on deposits up to Rs 2 crore.

HDFC Chairman Deepak Parekh said, “Today, sustainability is no longer about doing less harm, but about doing more good.” HDFC anticipates growing demand for green solutions and has launched green and sustainable deposits offering for our customers who can grow their wealth while they contribute to serving the needs of a changing world, he said, adding that HDFC is committed to supporting India’s efforts for a sustainable and green low-carbon economy.

At present, HDFC has a total deposit base of Rs 1.54 lakh crore as of June end and even 1% of this the new fundraising will amount to over Rs 1,500 crore.



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