Tag: ICICI Bank

20 lakh customers of other banks log in to ICICI Bank mobile app

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Over 20 lakh customers of other banks are now using ICICI Bank’s revamped mobile banking app.

“The bank has paced to the milestone in a span of just five months after making iMobile Pay open to all, including customers of other banks,” ICICI Bank said in a statement on Tuesday.

Also read: 10 lakh customers of other banks using ICICI Bank’s mobile app

Trends reveal that customers are using features such as pay to contact, bill payments and scan to pay.

ICICI Bank had opened its mobile banking platform to customers of all banks in December last year.

“The bank has transformed the app and renamed it ‘iMobile Pay’ five months ago to offer interoperability so that anyone, including customers of other banks, can experience the benefits of hassle-free payments and digital banking of ICICI Bank through this app. This was made possible by leveraging NPCI’s interoperable infrastructure,” said Bijith Bhaskar, Head – Digital Channels and Partnership, ICICI Bank.

Also read: ICICI Bank revamps app to offer services of any bank

The app has seen an encouraging response from metro cities and leading state capitals including New Delhi, Bengaluru, Chennai, Hyderabad, Lucknow, Patna, Jaipur, Ahmedabad, among others.

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Banks discourage crypto customers with account suspension warnings, BFSI News, ET BFSI

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After putting curbs on crypto exchanges banks have trained guns on their customers crypto transactions.

Banks including HDFC Bank and State Bank of India have sent official notices to many customers warning them of curbs, including permanent closure of accounts.

Lenders are asking customers to clarify the nature of transactions and warning credit card users that transactions of virtual currency will lead to suspension/cancellation of card.

Though there is no order by the RBI, lenders are opting to tread on the side of caution.

While trading in cryptocurrency is not illegal as per existing Indian laws, individual institutions can enforce their terms based on their risk assessment.

Exchanges evaluating options

Crypto exchanges are currently evaluating their options and are hoping to resolve the matter with a dialogue instead of raising the matter in court again.

Last week, the Blockchain and Crypto Assets Council also sent representation to various government stakeholders to put forward the industry’s case for banking access, according to a person privy to the matter.

Indian crypto exchanges, which have seen record-breaking transaction volume and customer sign-ups in recent months, are evaluating their options, including ways to seek clarification from the court and asking for additional supplemental material based on the verdict.

In May 2020, the co-founder of crypto exchange Unocoin had filed an RTI query questioning whether the RBI had prohibited banks from providing accounts to crypto exchange companies or crypto traders.

There is no prohibition on banks providing accounts to traders dealing with virtual currencies, the Reserve Bank of India told cryptocurrency exchange Unocoin then.

The crackdown

Since early May, leading banks, notably private sector lenders ICICI Bank and IndusInd Bank, have asked payment gateway partners to stop processing such transactions.

Axis Bank, Kotak Mahindra Bank, Citibank, and others are limiting their exposure to the cryptocurrency market.

Banks, the industry sources said, have stopped issuing merchant IDs to payment gateways, and have asked these intermediaries to tighten scrutiny while dealing with cryptocurrency exchanges in India.

The issue started in late February and according to experts, the recent surge in the market, dogecoin frenzy and advertisements by crypto exchanges during IPL led to a fresh clampdown on the cryptocurrency.

Regulator against it

According to reports, the Reserve Bank of India is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry.

The guidance comes as the Indian government is drafting a law to ban cryptocurrencies and penalise anyone dealing in them, which would be among the most sweeping crackdowns on the new investing fad in the world. But with the Covid crisis engulfing the country, no one is sure when such a bill may be passed, adding to investors` confusion.

The Reserve Bank of India (RBI) in 2018 had forbidden banks from dealing in all transactions related to bitcoin and other such assets. That diktat was challenged by the crypto exchanges and in March 2020, India`s top court overturned the RBI ban and allowed lenders to extend banking facilities to them.



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ICICI Bank launches facility to link UPI ID with digital wallet

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Private sector lender ICICI Bank has launched a facility for linking a Unified Payments Interface (UPI) ID with its digital wallet, ‘Pockets’.

The facility is a departure from the current practice under which UPI IDs can be linked with a savings bank account.

“This initiative enables users to undertake small-value daily transactions directly from their Pockets wallet using UPI in a safe and secure manner,” said ICICI Bank in a statement on Wednesday, adding that it would help them streamline the number of transactions being undertaken daily from their savings account and, thus, de-clutter their savings account statement of multiple entries.

“Further, it expands the convenient usage of UPI to young adults like college students, who may not have a savings account,” it said.

10 lakh customers of other banks using ICICI Bank’s mobile app

New users, including those who are not customers of ICICI Bank, can now instantly get a UPI ID, which is automatically linked to Pockets, while customers who already have a UPI ID will get a new ID when they log on to the Pockets app.

Ties up with NPCI

The bank has collaborated with National Payments Corporation of India to link its ‘Pockets’ digital wallet to the UPI network.

“Our research suggests that users are keen to link their UPI ID with their digital wallet, so that they can directly use the balance in the wallet for smaller transactions while using their savings account only for the larger ones. We believe the facility will provide immense convenience and the advantage of secured UPI payments to customers using Pockets wallet,” said Bijith Bhaskar, Head, Digital Channels and Partnership, ICICI Bank.

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ICICI Bank links UPI ID facility to its ‘Pockets’ digital wallet, BFSI News, ET BFSI

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ICICI Bank announced the launch of a facility of linking a UPI (Unified Payments Interface) ID to its digital wallet ’Pockets’, marking a departure from the current practice that demands such IDs be linked with a savings bank account. The Bank has collaborated with NPCI to link its ‘Pockets’ digital wallet to the UPI network. This initiative allows users to conduct small-value daily transactions using UPI directly from their ‘Pockets’ wallet in a safe and secure manner.

Customers who use ‘Pockets’ can now send and receive money directly from and to their ‘Pockets’ wallet balance without using their savings bank account. The UPI ID can be used by users of the ‘Pockets’ digital wallet to make person-to-person (P2P) payments, such as sending money to any Individual’s bank account or paying to a contact. They can also undertake person to merchant (P2M) payments like paying online at merchant sites or paying by scanning QR codes.

Bijith Bhaskar, Head- Digital Channels & Partnership, ICICI Bank said, “Our research suggests that users are keen to link their UPI ID with their digital wallet, so that they can directly use the balance in the wallet for smaller transactions while using their savings account only for the larger ones. Armed with this insight, we are delighted to have worked closely with NPCI to introduce this unique innovative solution in digital banking.”

Praveena Rai, COO, NPCI said, “This initiative will further democratize access to UPI and make it ubiquitous with digital payments by allowing consumers to directly pay through their digital wallets, in addition to the facility of paying from their bank accounts. UPI is a one-stop solution to payments of all kinds, both P2M and P2P, and this facility will provide an impetus to the burgeoning digital ecosystem in India.”



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Bad bank to kick off with 80 NPAs worth Rs 2 lakh crore, BFSI News, ET BFSI

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Banks are likely to transfer about 80 large NPA accounts for the resolution to National Asset Recons­tru­ct­ion Com­pany (NARCL), which is expected to be operational by next month.

NARCL is the name coined for the bad bank announced in the Budget 2021-22. A bad bank refers to a financial institution that takes over the bad assets of lenders and undertakes resolution.

Finance Minister Nirmala Sitharaman in the Budget 2021-22 announced that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books. “An Asset Recon­struction Company Limited and Asset Management Com­pany would be set up to consolidate and take over the existing stressed debt,” she had said in the Budget speech.

Last year, the Indian Banks’ Association (IBA) had made a proposal for the creation of a bad bank for swift resolution of non-performing assets (NPAs). The government accepted the proposal and decided to go for ARC and asset management company (AMC) model for this.

The process

The size of each of these NPAs accounts is over Rs 500 crore and the banks have identified about 70-80 such accounts to be transferred to the proposed bad bank, sources said. It is expected that NPAs over Rs 2 lakh crore will move out of the books of the banks to the bad bank.

The company will pick up those assets that are 100 per cent provided for by the lenders. It will then manage and dispose of the assets to alternate investment funds and other potential investors for eventual value realisation.

NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

The government guarantee would be invoked if there is a loss against the threshold value.

The loans identified by the Indian Banks’ Association include NPAs in a variety of industries — including oil, steel, cement and roads, with many admitted under the insolvency process. These loans are almost fully provided for over the years and they exclude the ones where there is fraud involved or those currently under liquidation. About 75% of the lenders by value need to approve to transfer the loans to an ARC.

No fraud loans

The Reserve Bank of India (RBI) has said that loans classified as fraud cannot be sold to NARCL. As per the annual report of the RBI, about 1.9 lakh crore of loans have been classified as fraud as of March 2020.

To facilitate the smooth functioning of asset reconstruction companies, the RBI last month decided to set up a panel to undertake a comprehensive review of the working of such institutions.

After enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 2002, regulatory guidelines for ARCs were issued in 2003 to enable the development of this sector and to facilitate the smooth functioning of these companies.

Since then, while ARCs have grown in number and size, their potential for resolving stressed assets is yet to be realised fully.

The bad bank

Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans. Two other state-run financiers of power projects will also own stock in the bad bank.

Canara Bank, Union Bank of India and Bank of India will join their larger state-run peers as investors in the bad bank. ICICI Bank, Axis Bank and Life Insurance Corp of India-owned IDBI Bank are also among the shareholders. State-owned Power Finance Corp and Rural Electrification Corp will also be equal shareholders in the new company.



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Power finance companies likely to be promoters of the bad bank, BFSI News, ET BFSI

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The National Asset Reconstruction Company (NARC), or the bad bank, is likely to be promoted by Power Finance Corporation and Rural Electrification Corporation.

While all major public sector banks will invest in the NARC, they will be holding a stake of below 10%. The power finance companies will hold more than 10%

The Reserve Bank of India is reluctant to allow banks to float another ARC to which they will sell their bad loans.

Padmakumar M Nair, Chief General Manager of Stressed Assets Resolution Group at SBI, will head the National Asset Reconstruction Company Ltd, the proposed bad bank for taking over stressed assets of lenders.

Nair has been picked up for the CEO post of the proposed bad bank NARCL as he has a long exposure of handling resolution of stressed assets. He will be joining the company on a deputation basis for the moment. Finance Minister Nirmala Sitharaman in the budget for 2021-22 had announced that an asset reconstruction company or a bad bank would be set up to consolidate and take over existing stressed assets of lenders and undertake their resolution. A bad bank refers to a financial institution that takes over the bad assets of lenders and undertakes resolution.

Most of the large public sector banks in India have a stake in an existing ARC. SBI is the largest shareholder in Arcil with IDBI Bank, ICICI Bank and Punjab National Bank holding a significant stake. Another firm Asrec is owned by Indian Bank, Bank of India, Union Bank and LIC.

The bad bank

Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans. Two other state-run financiers of power projects will also own stock in the bad bank.

Canara Bank, Union Bank of India and Bank of India will join their larger state-run peers as investors in the bad bank. ICICI Bank, Axis Bank and Life Insurance Corp of India-owned IDBI Bank are also among the shareholders. State-owned Power Finance Corp and Rural Electrification Corp will also be equal shareholders in the new company.

The asset transfer

The Indian Banks’ Association (IBA) has identified 102 corporate bad loans, totalling to Rs 2 lakh crore, where the amount outstanding in each is over Rs 500 crore that can be transferred to the proposed National Asset Reconstruction company (NARC) or bad bank.

It has asked its member banks asked members to identify large loans where they are lead bankers and get approval from co-lenders so that these loans can be sold to a National Asset Reconstruction company.

The loans identified by IBA include NPAs in a variety of industries — including oil, steel, cement and roads, with many admitted under the insolvency process. These loans are almost fully provided for over the years and they exclude the ones where there is fraud involved or those currently under liquidation. About 75% of the lenders by value need to approve to transfer the loans to an ARC.



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Have IPL ads led to a fresh clampdown on Indian crypto exchanges?, BFSI News, ET BFSI

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When dogecoin turned to be the new sensation on the crypto street, many Indian investors could just marvel at the image of the dog on the coin, but not buy it.

The reason was their purchases are not going through as some banks have directed payment gateways not to process cryptocurrency­related transactions.

Since early this month, leading banks, notably private sector lenders ICICI Bank and IndusInd Bank, have asked payment gateway partners to stop processing such transactions.

Axis Bank, Kotak Mahindra Bank, Citibank, and others are limiting their exposure to the cryptocurrency market.

Banks, the industry sources said, have stopped issuing merchant IDs to payment gateways, and have asked these intermediaries to tighten scrutiny while dealing with cryptocurrency exchanges in India.

The issue started in late February and according to experts, the recent surge in the market, dogecoin frenzy and advertisements by crypto exchanges during IPL led to a fresh clampdown on the cryptocurrency.

The aggressive marketing push by crypto exchanges on TV during the IPL, OTT channels and through social media influencers has caused the regulator to clamp down as the industry is not licensed in India.

Dogecoin trading volumes from India have more than trebled since April and platforms have witnessed record-breaking transaction volumes.

Regulator against it

According to reports, the Reserve Bank of India, is informally urging lenders to cut ties with cryptocurrency exchanges and traders as the highly speculative market booms, despite a Supreme Court ruling that banks can work with the industry.

The guidance comes as the Indian government is drafting a law to ban cryptocurrencies and penalise anyone dealing in them, which would be among the most sweeping crackdowns on the new investing fad in the world. But with the COVID-19 crisis engulfing the country, no one is sure when such a bill may be passed, adding to investors` confusion.

The Reserve Bank of India (RBI) in 2018 had forbidden banks from dealing in all transactions related to bitcoin and other such assets. That diktat was challenged by the crypto exchanges and in March 2020, India`s top court overturned the RBI ban and allowed lenders to extend banking facilities to them.

With investors continuing to rush into the hot new asset class, however, regulators appear to be gearing up for another try.

Earlier this year, RBI Governor Shaktikanta Das said that they have “major concerns (around crypto) from the financial stability angle.”.

Growing frenzy

Thousands of new users are piling into the system every day at a time when the prices of major digital currencies have been on the rise. There are over 10 million crypto investors in India with total holdings of over Rs 10,000 crore, according to industry estimates. No official data is available.

Crypto platforms, for their part, are in the process of sending a communication to all major banks about the Supreme Court ruling of February 2020 that revoked the banking ban and declared that the central bank cannot issue any formal guidelines or directly regulate these exchanges.



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HDFC Bank retail loan recasts highest among private banks last year, BFSI News, ET BFSI

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The Reserve Bank of India‘s restructuring of loans announcement seems to have come at the right time for small borrowers, going by such recasts last year.

Retail or small borrowers have benefited the most from the restructuring scheme announced by the RBI last year as part of its pandemic relief measures, according to the results put out banks so far.

The total restructured accounts for HDFC Bank were 3.36 lakh accounts, involving loans of Rs 6,508.37 crore, of which 2.87 lakh accounts were for retail loans amounting to Rs 5,456 crore.

About Rs 82.38 crore retail loans of Kotak Mahindra Bank were restructured while the total recast loans were worth Rs 121.5 crore.

The restructured loans of Axis Bank were Rs 844.6 crore, of which retail loans accounted for Rs 503.71 crore.

ICICI Bank saw loan recasts for 1,624 accounts, of which 1,586 were retail accounts and the rest corporate. but the corporate loans recasts were higher at Rs 1,323.28 crore against Rs 643.19 crore for retail loans. Yes Bank saw loan recasts of Rs 1,112.21 crore where corporate loans accounted for Rs 940.11 crore spread 352 accounts.

Restructuring 2.0

Earlier this month, Reserve Bank announced a slew of measures including loan restructuring for individual and small businesses hit hard by the fresh Covid wave.

Borrowers that are individuals and micro, small and medium enterprises (MSMEs) having aggregate exposure of up to Rs 25 crore would be considered for the new scheme.

This would be for those who have not availed restructuring under any of the earlier frameworks, including the Resolution Framework 1.0 of RBI dated August 6, 2020, and who are classified as standard as on March 31, 2021, shall be eligible for the Resolution Framework 2.0, he said.

Under the proposed framework, the bank may be invoked up to September 30, and shall have to be implemented within 90 days after the invocation, he added.

Frame policies

The RBI has asked lenders to frame Board approved policies within a month to implement viable resolution plans for stressed advances of individuals and small businesses under the “Resolution Framework – 2.0” relating to Covid related stress. RBI also announced rationalisation of certain components of the extent know-your-customer (KYC) norms for enhancing customer convenience.

These include extending the scope to video KYC known as video-based customer identification process.

Further, keeping in view the Covid related restrictions in various parts of the country, RBI regulated entities have been asked that for the customer accounts where periodic KYC updating is new or pending, “no punitive restriction on the operation of customer accounts” will be imposed till December 31, 2021, unless warranted, due to any other reason.



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Private banks cut unsecured loans, stay safe in Covid storm, BFSI News, ET BFSI

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Wondering why pesky calls offering personal loans have reduced during the last few months?

After the pandemic started, most private sector banks have scaled down their unsecured loan business and relied on home and government-guaranteed loans.

Lenders are going slow once again on micro nance loans, credit cards and personal loans, as they see these unsecured loans to have become riskier amid the second wave of the pandemic.

The prudence has helped them in reducing the risk of defaults during the second wave.

The banks now cater to small business loans that are guarantee by the government under the Emergency Credit Line Guarantee Scheme. They have also focused on home loans that are secured by a mortgage. SBI last year hit Rs 5 lakh crore home loans target and set a stiff target for the segment.

Portfolio shrinks

Kotak Mahindra has reduced its unsecured portfolio to 5.8% of the total assets in FY21 from 7.5% earlier.

While ICICI bank grew its home loans by 21% year on year, its loan book grew in single digits. The bank also brought down its loan against shares and other securities by 8% and shrunk its two-wheeler loans by 4%.

Axis Bank has cut its share of unsecured loans to small businesses to 11% in FY21 from 15% in FY20.The bank has made 100% provisions for restructured unsecured loans.

IndusInd Bank too remains cautious on unsecured lending and limit the segment to 5% of total loans and go slow on three-wheeler loans.

Cautious stance

Personal loans in the banking industry grew at a slower pace of 10.2 per cent in the last fiscal year ended March 31, compared with more than 15 per cent the preceding year. Consumer durable loans were the worst hit and contracted by more than 21 per cent between March 2020 and 2021 against 47.6 per cent growth in the prior year.

Credit card outstanding totalled Rs 1.16 lakh crore at the end of March, a 7.8 per cent increase in a year against more than 22.5 per cent growth in fiscal 2020.

The growth in home and government-guaranteed loans has helped lenders expand the balance sheet even as they shied away from unsecured loans. By making 100% provisions for unsecured loans, private banks would not have to take a major hit in the first quarter despite the second wave of the pandemic buffeting the economy.



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Bandhan, Yes Bank shine as FPIs lap up stakes in private lenders, BFSI News, ET BFSI

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Foreign portfolio investors have tanked up on stakes in Bandhan Bank and YES Bank as they invested heavily in Indian private sectors lenders but eschewed the public sector ones.

FPI holdings in Bandhan grew over 2.5 times to 34.91 per cent in March 2021 from 13.05 per cent in March 2020.

Bandhan Bank’s promoter company Bandhan Financial Holdings had to dilute a 21% stake to be compliant with RBI’s licensing condition. The promoters bought down their stake from 60.95 per cent in March 2020 to 40 per cent, which was mostly bought by the FPIs.

PSU and other lenders, led by State Bank of India, had bailed out YES Bank by buying its stake in early 2020. Many banks involved in the rescue act offloaded their part stake in Yes Bank via a follow-on public offer, which was bought by FPIs.

Yes Bank

The second-highest increase of FPI stake was in Yes Bank at 13.77 per cent in March 2021 (1.86 per cent).

According to experts, Yes Bank’s solution of legacy issues, known stress levels and non-performing assets, strong management give confidence to investors, who are expecting the lender to turn around in the medium term.

Also, equity mutual funds that have huge holdings in these banks offloaded their stakes due to redemption pressure, which were bought by FPIs.

Strong growth prospects, lower-than-expected NPAs, return ratios, operational efficiencies, decent earnings are attracting FPIs to private banks.

Among other private banks, FPIs increased stake in Axis Bank (5.94%), ICICI Bank (4.08%), Kotak Mahindra Bank (5.06%), RBL Bank (6.32 per cent), HDFC Bank (3.11 per cent), while they have cut stake in Federal Bank (-8.0 per cent), IndusIndBank (-2.67 per cent) and IDFC First Bank (-1.68 per cent).

PSU banks

However, FPI stakes in public sector banks were static during the last fiscal. The FPI stake in Bank of Baroda and Canara Bank rose 2.32 per cent and 1.28 per cent respectively, while it went up just 0.35% in State Bank of India, the country’s largest lender.

They have cut stake in Indian Overseas Bank (-0.11 per cent), Union Bank of India(-0.63 per cent) and Indian Bank (-1.33 per cent) while increased it by (0.76 per cent) in Punjab National Bank,

Experts say PSBs were hamstrung by wobbly balance sheets and inadequate capital. Also, the likely stress due to the pandemic is keeping foreign investor away.



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