Tag: finance

NBFC Agriwise Finserv partners Central Bank of India for agri loan disbursals

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Agriwise Finserv Limited, an agri-focussed NBFC, has entered into a co-lending agreement with Central Bank of India for agri-loan disbursal.

Cash credit for agri sector should be brought on par with other biz: SBI Ecowrap

The co-lending agreement will ensure that the farmer, agri and allied community get finance at affordable rates in a simple, transparent and speedy manner. The loan will be disbursed at a blended interest rate, as per the RBI directive on co-lending of loans, the company said in a statement.

Agriwise to enlarge portfolio

Kalpesh Ojha, Chief Financial Officer, Agriwise, said, “It is a matter of great pride and prestige to partner with Central Bank of India in our journey towards sustainable financial solutions in rural India. We are committed to enlarging our portfolio to under-served and un-served rural customer segments and increasing our offerings to our current customers. We wish to leverage partnerships that bring together our strength of reach and customer insights with the banks lower cost of funds. In parallel, our strong technology backbone is helping us capture unique customer insights to deliver our product and solutions in a seamless, transparent and fair manner.”

Bank of Baroda launches centralised agri-loans processing units

Central Bank of India focus

Rajeev Puri, Executive Director, Central Bank of India, said, “We are focussed on lending to the agriculture sector as priority sector lending is a key goal to empower our farmer community. With this tie-up, we wish to reach a larger and deeper set of customers in the rural and agri-sector. Agriwise, with its specialised knowledge and experience in dealing with agri and allied sectors, will enable us to serve a broader set of customers.”

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Star Health raises Rs 3,217 cr from anchor investors ahead of IPO, BFSI News, ET BFSI

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New Delhi, Star Health and Allied Insurance Company on Monday said it has raised a little over Rs 3,217 crore from anchor investors ahead of its IPO on Tuesday. The company has decided to allocate a total of 3,57,45,901 equity shares to 62 anchor investors at Rs 900 apiece, aggregating to Rs 3,217.13 crore, according to a circular uploaded on BSE website.

Monetary Authority of Singapore, Government of Singapore, Abu Dhabi Investment Authority, Morgan Stanley Asia (Singapore) Pte, Goldman Sachs (Singapore) Pte, BNP Paribas Arbitrage and Societe Generale are among the anchor investors.

In addition, SBI Life Insurance Company, HDFC Life Insurance Company and Edelweiss Mutual Fund have been allocated shares.

The initial public offering (IPO) comprises fresh issue of equity shares worth Rs 2,000 crore and an offer for sale of up to 58,324,225 equity shares by promoters and existing shareholders.

Those offering shares through the offer for sale are promoter and promoter group — Safecrop Investments India LLP, Konark Trust, MMPL Trust— and existing investors Apis Growth 6 Ltd, Mio IV Star, University of Notre Dame Du Lac, Mio Star, ROC Capital Pty Ltd, Venkatasamy Jagannathan, Sai Satish and Berjis Minoo Desai.

The public offer includes a reservation of shares worth Rs 100 crore for employees.

The issue, with a price band of Rs 870-900 a share will open for public subscription between November 30 and December 2.

At the upper end of the price band, the initial share-sale is expected to fetch Rs 7,249.18 crore.

Proceeds from the fresh issue would be used to augment the company’s capital base.

About 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

Investors can bid for a minimum of 16 equity shares and in multiples thereof.

Star Health, leading private health insurer in the country, is owned by a consortium of investors like Westbridge Capital and Rakesh Jhunjhunwala.

At present, SBI Life Insurance Company, HDFC Life Insurance Company, ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company are the few insurance companies which are listed on the stock exchanges.

Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, Citigroup Global Markets India, ICICI Securities, CLSA India, Credit Suisse Securities (India) Private Limited, Jefferies India, Ambit, DAM Capital Advisors and IIFL Securities are the merchant bankers to the issue.

The equity shares of the company will be listed on the BSE and NSE.



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CAG flags treatment of bank recap expenditure in FY18-19, BFSI News, ET BFSI

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The Comptroller and Audit General (CAG) has raised its concerns over treatment of expenditure of bank recapitalisation during 2017-18 and 2018-19, stating that it was against the provisions of the fiscal responsibility and Budget Management (FRBM) Act.

For recapitalisation of state-run banks, the government provided ₹80,000 crore in 2017-18 and of ₹1.06 lakh crore in 2018-19 respectively.

The CAG has flagged in the expenditure budget the above mentioned expenditure on recapitalisation of the PSBs, had been netted against receipts from issue of special securities, while in the receipt budget, receipts from the securities have been netted against expenditure on recapitalisation.

It said that during the two financial years, funds for these investments were raised by the government through issue of non-transferable special securities to the same PSBs.

According to CAG, the finance ministry had stated that bank recapitalisation was not fiscally neutral but cash neutral, as issue of securities would get reflected in the total government debt and coupon payments for the special securities when made would be reflected in the deficit of the relevant year.

The concept of recapitalisation bonds was first introduced in 2017. Earlier, the capital infusion was to done by the government to a bank through cash outgo from the Consolidated Fund of India led to fiscal pressure.In 2017, the government had introduced recap bonds.

Under this, the government issues recapitalisation bonds to a public sector bank which needs capital. In turn, banks subscribe to the bond against which the government receives the money. Now the money received goes as equity capital of the bank. So the government doesn’t have to pay anything from its pocket.

The national auditor also pointed out the deficit in operation of the National Small Savings Fund (NSSF), which comprises all collections of small saving schemes.

“The balances under NSSF do not explicitly disclose the substantial accumulated deficit in the fund, which would have to be made good by the government in the future. There is also inadequate disclosure that significant amounts were being provided from NSSF for funding revenue expenditure of the government which would have to be serviced through budgetary support. It also raised concerns over inadequacies in disclosure under the FRBM rules.

The CAG pulled up the union government for adopting an erroneous process of devolution of Integrated Goods and Services Tax to states and short-transfer of cesses to reserve funds, which resulted in under-reporting of deficit figures for the 2017-18 and 2018-19 fiscals. The IGST, which is levied on inter-state sale of goods and services, is shared between the Centre and states in the 50:50 ratio.

In its report on the union government accounts tabled in Parliament, the Comptroller and Auditor General of India (CAG) found that ₹13,944 crore was left unapportioned and retained in the Consolidated Fund of India (CFI) in 2018-19, even though the amended IGST Act now provides for a process for ad-hoc apportionment of IGST.



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YES Bank | Dish TV: Freeze on Yes Bank’s 25.6% stake in Dish TV spooks private lenders, BFSI News, ET BFSI

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Private credit lenders who often provide finance against pledge of shares are rattled that they will not be able to exercise their rights as lenders, if a police move freezing Yes Bank’s 25.6% stake in Dish TV sets a precedent.

On Tuesday, the Supreme Court will hear Yes Bank’s appeal against an Allahabad High Court order that dismissed the lender’s plea seeking to lift the freeze on its voting rights in Dish TV, which is operated by Subhash Chandra’s Essel Group. At the high court, Yes Bank had challenged a move by Uttar Pradesh’s Gautam Buddh Nagar crime branch last week to freeze its voting rights in Dish TV.

Dish TV has scheduled an annual general meeting on Tuesday (November 30) to seek shareholders’ consent to its Rs 1,000 crore rights issue – a move that is opposed by Yes Bank, the largest shareholder. “The private lender will not be able to exercise its voting rights if the Supreme Court does not restore it,” said one of the lenders.

The court is likely to hear the matter in the first half of the day, while the AGM is scheduled at 3.00 pm.

Yes Bank on September 3 had suggested reconstitution of Dish TV’s board and opposed the proposed rights issue as it would dilute its holding in the company.

Private equity lenders say equity pledge is one of the most liquid collateral and freezing it is a major setback.

“The courts in India might eventually resolve this issue. However, if the police interfere and even cause a few months delay in enforcing security, then the value of the debt gets significantly eroded,” said one of the lenders, who did not want to be named.

Private credit providers are also rattled that a police complaint was filed when there are well-established procedures for dispute resolution, such as the National Company Law Tribunal. Further, the case was registered at the crime branch in Uttar Pradesh when both Yes Bank and Dish TV have their registered offices in Mumbai.

One of the lawyers present at the Allahabad High Court said Yes Bank’s senior counsel, Abhishek Manu Singhvi, pointed out that “the UP sub-inspector will become supreme and can tomorrow attach paintings in Kerala and homes in Mumbai based on frivolous complaints filed by defaulting borrowers”.

The UP crime branch order follows a complaint by Subhash Chandra against the bank, accusing its former chief executive, Rana Kapoor, of fraud in brokering a merger between Videocon D2H and Dish TV. Kapoor is facing allegations of financial irregularities at the bank and is currently in jail.

Yes Bank had provided a Rs 5,270 crore loan to Essel group of companies against the pledge of Dish TV shares in 2016. After the group companies of Essel started defaulting, Yes Bank invoked the shares in June 2020 and recalled the loan the following month. IndusInd Bank, L&T Finance, housing finance company, HDFC Ltd and Clix Capital are among other lenders to have invoked the share pledge of Dish TV.

Subhash Chandra first filed an FIR against Yes Bank at Greater Noida in September 2020 and initiated a civil proceeding against the bank at Delhi’s Saket District Court for invocation of shares. The Saket court initially restrained Yes Bank from selling the shares but withdrew the proceedings in August 2021.

On November 6, Dish TV informed the stock exchange that it has received orders from the UP-crime branch to restrict Yes Bank from the dealing with 445.3 million shares (amounting to a 25.6% stake) of Dish TV until the investigation is completed or further order. On November 7, Dish TV informed the exchanges about the proposed EGM on November 30.



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Govt sells Central Electronics to Nandal Finance and Leasing for Rs 210 cr, BFSI News, ET BFSI

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The government on Monday approved sale of Central Electronics Ltd to Nandal Finance and Leasing for Rs 210 crore. This is the second strategic stake sale by the government after Air India.

“The Alternative Mechanism … has approved the highest price bid of M/s Nandal Finance and Leasing Pvt Ltd for sale of 100% equity shareholding of GoI in Central Electronics Ltd (CEL) – a CPSE under the Department of Scientific and Industrial Research (DSIR). The winning bid is for Rs 210,00,60000,” an official statement said.

The Alternative Mechanism (AM) on strategic disinvestment comprises Road Transport Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Minister of State for Science and Technology Jitendra Singh.

Two bidders had put in financial bids for CEL — Nandal Finance and Leasing Pvt Ltd for Rs 210 crore and JPM Industries Ltd bid for Rs 190 crore.

The higher of the two price bids, submitted by M/s Nandal Finance and Leasing Pvt Ltd, was found to be above the reserve price, the statement added.



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RBI imposes Rs 1 cr penalty on Union Bank of India, BFSI News, ET BFSI

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Mumbai, The Reserve Bank of India (RBI) on Monday said it has imposed a penalty of Rs 1 crore on Union Bank of India for deficiencies in regulatory compliance. The penalty was imposed by an order dated November 25 for non-compliance with the certain provisions of directions issued by the RBI contained in “Reserve Bank of India (Fraud – Classification and Reporting by commercial banks and select FIs) Directions 2016” and “Guidelines on Sale of Stressed Assets by Banks”.

Giving details, the RBI in a statement said the statutory inspection for supervisory evaluation (ISE) of the bank was conducted by it with reference to its financial position as of March 31, 2019.

Examination of the risk assessment report, inspection report and all the related correspondences revealed, inter alia, non-compliance with certain directions to the extent of failure to classify an account as a Red Flag Account despite the presence of early warning signals and failure to disclose ageing of and provisioning for security receipts (SRs) in its annual report, the RBI said.

The central bank, however, added that the penalty is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.



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IndusInd Bank micro fin arm’s CEO, ED exit, BFSI News, ET BFSI

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Mumbai: IndusInd Bank on Monday said that two senior executives of its microfinance institution (MFI) arm Bharat Financial Inclusion — MD & CEO Shalabh Saxena, and ED & CFO Ashish Damani — have resigned. The bank has appointed an executive director and another senior executive to hold fort until a new management is in place.

The announcement appears to indicate a resolution of the row between the bank and Spandana Sphoorty Financial Services. Last week, the bank had said that Saxena and Damani were not relieved from their positions and they needed to continue in order to be part of a review of certain transactions. The announcement was in response to Spandana Sphoorty Financial declaring the appointments of Saxena and Damani. On Monday, IndusInd Bank said that both the executives had tendered their resignations to the chairman of the board. The bank also said that they have offered their assistance in the ongoing review of transactions related to Bharat Financial, for which the bank has appointed a “renowned international audit firm” to conduct independent review and ascertain the veracity of the anonymous complaints.

Shares of IndusInd Bank rose in early trade but closed marginally in the red, ending at Rs 895 on Monday. Last weekend, the RBI announced that it would allow promoters of private banks to hold up to 26%. It added that it would permit those promoters who have already diluted stake to increase it up to the new limit. “We eagerly await the operating guidelines as it gives the promoters an opportunity to inject capital to increase stake up to 26%,” Ashok Hinduja, chairman of IIHL, Mauritius, promoter entity of IndusInd Bank, had said.

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Get the full list here, BFSI News, ET BFSI

Banking & Finance

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With upcoming festivities like Christmas and New Year’s celebrations, a total of seven holidays, apart from Sundays and second and fourth Saturdays, have been announced for next month. Shillong has as many as four holidays, apart from weekend leaves.

The Reserve Bank of India has issued the list of holidays for 2021 in its annual list. Accordingly, all public and private sector banks across India will remain closed for up to 12 days in December, including weekend leaves.

Here is the full list of holidays for the month of December 2021:

December 3: Feast of St. Francis Xavier — Goa

December 18: Death Anniversary of U SoSo Tham — Shillong

December 24: Christmas Festival (Christmas Eve) — Aizawl, Shillong

December 25: Christmas — Guwahati, Hyderabad, Imphal, Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Panaji, Patna, Raipur, Ranchi, Shillong, Shimla, Srinagar, Thiruvananthapuram

December 27: Christmas Celebration — Aizawl

December 30: U Kiang Nangbah — Shillong

December 31: New Year’s Eve — Aizawl

Apart from this list of leaves as per the Holiday Under Negotiable Instruments Act, banks will also remain closed on some of the days of the weekends. These are mentioned below:

December 5: Sunday

December 11: Second Saturday of the month

December 12: Sunday

December 19: Sunday

December 25: Fourth Saturday of the month and Christmas

December 26: Sunday



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SBI enters co-lending agreement with Capri Global Capital Ltd, BFSI News, ET BFSI

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State Bank of India has entered into a co-lending agreement with Capri Global Capital Ltd (CGCL) to boost MSME lending. The two parties have signed a Memorandum of Understanding to create multiple co-lending opportunities for the financial empowerment of the MSMEs, which aims to provide further impetus to financial inclusion in the country, the bank said in a release.

Dinesh Khara, Chairman, SBI said, “To improve the credit to the underserved and unserved, we are happy to associate with Capri Global Capital. We believe this collaboration will provide the nimble footedness of NBFC and quality credit to the right set of the population which will further deepen lending to MSMEs through the last mile connect.”

RBI had issued guidelines on the co-lending scheme for banks and NBFCs for priority sector lending to improve the flow of credit to unserved and underserved sectors of the economy, and make funds available to borrowers at an affordable cost.

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Axis Bank’s Thapar, BFSI News, ET BFSI

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Misconfiguration is one of the key risks to cyber attacks, said Rajesh Thapar, the chief information security officer of Axis Bank. Banks may bring in the best tool or technology but if it isn’t configured right, you are opening doors to cyber risks, he added.

Banks are facing an unprecedented surge in cyber attacks, and the nature of these attacks are constantly evolving the complex theft landscape.

While ransomware attacks, Denial of Service (DOS) attacks, phishing are common, with more digitalisation, the nature of such attacks is changing.

“Cyber risk is now becoming a business risk. Earlier cyber risk was a cyber risk from infrastructure perspective but today, with all the digitalisation happening, cyber risks are more becoming a business risk as it can impact a customer’s confidentiality which can lead to customer distrust. It can impact regulations, the company can be non compliant to some of the legislations and get penalties for it “, added Thapar.

Balancing customer experience alongwith security in an organisation is necessary yet complicated. Now, there is a huge pool of data, which needs to be protected and this data is the first target for hackers.

Manish Sinha, director sales engineering, India and SAARC at McAfee Enterprise, said “The risk is not just hackers attacking these data threads, the threat is them selling it away to third parties, which is more harmful to the organisation in all ways. Data leakage is a serious concern. To battle it what’s required is a unified approach for data protection in a holistic manner across the banking platforms.”

Misconfiguration a key risk to cyber attacks: Axis Bank's Thapar

Cyber attackers and hackers are being very sophisticated now in their attacks. The average dwell time of these hackers in the network, before being discovered, is increasing. More the dwell time, greater the damage, making time a very critical factor of the extent of cyber attacks.

“Security operation models are evolving. The identification and prevention of cyber threats and attacks were in a periodic cycle of assessments but now it will be in a continuous cycle of assessments. Attacks are happening all the time so organisations will need to carry out the continuous assessment model to beat cyber threats and attacks”, said Thapar.

Talking about the future model to control cyber attacks, Sinha said that the bigger challenge for the next generation cyber security teams is to prioritise the threats after identifying it. “This should come from alot of AI based engines or algorithms, which are running, and also from global threat intelligence, which can relate to the threat actors from the banking space globally, and finally look out to the regional advisories,” he said.



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