Tag: ICICI Bank

ICICI Bank Q3 net up 19.1%

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Private sector lender ICICI Bank reported a 19.1 per cent increase in its standalone net profit in the third quarter of the fiscal at ₹4,939.59 crore. The bank had a net profit of ₹4,146.46 crore in the same period last fiscal.

For the quarter ended December 31, ICICI Bank’s net interest income increased by 16 per cent to ₹9,912 crore from ₹8,545 crore in the third quarter last fiscal.

The net interest margin was 3.67 per cent in the October to December compared to 3.57 per cent in the quarter ended September 30 and 3.77 per cent in the third quarter last fiscal.

Non-interest income, excluding treasury income, declined to ₹3,921 crore in the third quarter this fiscal compared to ₹4,043 crore a year ago.

Provisions increased by 31.6 per cent to ₹2,741.72 crore in the third quarter this fiscal from ₹2,083.2 crore a year ago.

“During the third quarter of 2020-21, the bank made contingency provision amounting to ₹3,012 crore for borrower accounts not classified as non-performing pursuant to the interim order of the Supreme Court. The Bank utilised ₹1,800 crore of Covid-19 related provisions made in the earlier periods,” ICICI Bank said in a statement on Saturday.

It further said that it has changed its provisioning policy on non-performing assets to make it more conservative in the third quarter.

“The contingency provision made on a prudent basis for loans overdue for more than 90 days at December 31, 2020 but not classified as non-performing pursuant to the Supreme Court’s interim order, also reflects the revised policy,” it said, adding that the change in policy resulted in higher provision on advances amounting to ₹2,096 crore during the third quarter for aligning provisions on the outstanding loans to the revised policy.

During the quarter, the gross additions to NPAs were ₹471 crore.

As on December 31, gross NPAs amounted to 4.72 per cent of gross advances as against 6.39 per cent a year ago. Net NPAs stood at 0.69 per cent at the end of the third quarter this fiscal versus 1.6 per cent a year ago.

Loans amounting to ₹8,280 crore, compared to ₹1,410 crore at September 30, 2020, were not classified as non-performing at December 31, pursuant to the Supreme Court’s interim order, ICICI Bank said.

On a proforma basis, the net NPA ratio was 1.26 per cent at December 31 compared to 1.12 per cent at September 30.

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Banks review services policy for WhatsApp, BFSI News, ET BFSI

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Banks, which were looking to integrate WhatsApp as a key channel for customers to transact on, are reviewing their policies in respect of the use of the messaging platform. This comes after general concerns among the public that have arisen over Facebook sharing user data among its group companies.

HDFC Bank, which was earlier offering customers the option to obtain bank account balances through WhatsApp banking, has discontinued the facility. Customers seeking balance inquiry are asked to use the bank’s mobile banking app, net banking or other offline methods. Others — ICICI Bank, IDBI Bank, Kotak Mahindra Bank and IndusInd Bank — continue to allow customers to check their balance.

According to an industry source, earlier the idea was to have deep integration with the bank’s systems and artificial intelligence chatbots so that customers can get their servicing requests and even transactions done in a straight-through manner. The idea was to facilitate the entire banking experience through the social media platform, where customers spend most of their time, without having to log into net banking.

Now there appears to be some caution in using WhatsApp banking as a channel. It is not clear whether HDFC Bank’s change in WhatsApp services is part of its ongoing back office overhaul or review of the WhatsApp policy.

Incidentally, all Whatsapp banking chats come with a label stating that while these are encrypted, the bank may use a service to store, read and respond to messages and calls. According to Rajshekhar Rajaharia, a researcher on internet security who pointed out the policy change, businesses and solution providers will use WhatsApp’s parent company, Facebook, to securely store messages and respond to customers.

While Facebook will not automatically use messages to determine the ads that you see, businesses will be able to use chats they receive for their own marketing purposes, which may include advertising on Facebook.An ICICI Bank spokesperson, responding to a query from TOI, said, “Messages to the ICICI Bank WhatsApp Banking service are secured with end-to-end encryption. This means that WhatsApp or third parties cannot read them. Further, the delivered chats are neither shared with Facebook nor saved in the servers of Facebook. Facebook has meanwhile integrated a Whatsapp button on the homepage of banks. Customers will have the option to chat with the bank clicking on the button. The button is also available on some advertisements.”According to WhatsApp’s privacy policy, “Facebook may use the way you interact with these ads to personalise the ads you see on Facebook.”

Experts say that WhatsApp messages, being encrypted, are more secure than SMSs, which are viewable to telecom companies and government agencies and can also be intercepted by hackers. However, the concerns are not about hacking but privacy with organisations using customer data to sell third-party products.



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ICICI bank makes its first interbank-money market transaction linked with SOFR

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ICICI Bank on Thursday said it has executed its first interbank-money market transaction linked with Secured Overnight Funding Rate (SOFR) through its Hong Kong branch.

This transaction is part of the bank’s Benchmark Transition Management plan to assess the preparedness towards a smooth transition to the new Alternative Reference Rates (ARRs), the Bank said in a statement.

SOFR has been identified as the replacement for USD (US Dollar) LIBOR (London Interbank Offered Rate).

Globally, there is a move to migrate from LIBOR to transactions linked to ARRs and it is expected that fresh transactions after December 2021 would not be referenced to LIBOR, the Bank said.

Sriram H. Iyer, Head-International Banking, ICICI Bank said, with these transactions, we are working towards building internal capabilities to transition to the new ARRs in line with various regulatory timelines.

Prasanna, Group Head – Global Markets, Sales, Trading and Research, ICICI Bank, said: “Transition from LIBOR to ARR is a critical event in financial markets…the transaction is part of the transition initiatives by the Bank.”

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ICICI Bank seeks buyers for Rs 193-cr exposure to road project

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“The project achieved provisional commercial operations date (PCOD) in April 2018. As against planned financial progress of 100.00%, actual financial progress is 95.20% as on September 2018,” the rating note said.

ICICI Bank is on the lookout for a buyer for its Rs 193-crore exposure to Srinagar Banihal Expressway (SBEL), a subsidiary of the listed Ramky Infrastructure. In January 2020, Indian Overseas Bank had moved the Hyderabad bench of the National Company Law Tribunal, seeking that insolvency proceedings be initiated against SBEL.

In a public notice, ICICI Bank said of its Rs 192.8-crore loan to the company, Rs 36.8 crore is senior debt and Rs 156 crore is subordinated debt. It has security over all assets/rights of the borrower under its project document and escrow account, by way of first ranking charge for the senior debt and second ranking charge for the subordinated debt, along with a corporate guarantee and sponsor support agreement from the promoter.

“Presently, the borrower is a non-performing asset with the bank/other lenders and is facing litigations initiated by other lenders viz. recovery suit with DRT,” the notice said. The asset is being offered on a cash-only basis.

According to a rating rationale dated January 14, 2020, issued by Icra, SBEL has outstanding borrowings of Rs 1,440 crore. Icra rated the company ‘D’ as it was not cooperating with the agency.

Ramky Infrastructure holds a 74% stake and Jiangsu Provincial Transportation Engineering Group Company holds 26% in SBEL, which was set up for construction, operation and maintenance of the four-laning of the Srinagar-Banihal section of National Highway –1A from km 187.00 to km 189.350 (Banihal bypass) and km 220.700 to km 286.110 (approximately 67.76 km) on a design, build, finance, operate and transfer (annuity) basis under the National Highways Development Project.

According to Icra, the total revised cost of the project is Rs 2,000 crore. The total concession period is 20 years, including the construction period of three years. SBEL will receive a fixed annuity payment of Rs 134.82 crore semi-annually for 17 years. The project is being funded by Rs 1,440-crore debt and Rs 360 crore of promoters’ contribution and one-time fund infusion of Rs 200 crore from the NHAI.

“The project achieved provisional commercial operations date (PCOD) in April 2018. As against planned financial progress of 100.00%, actual financial progress is 95.20% as on September 2018,” the rating note said.

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IIFL Home Finance, Standard Chartered enter into co-lending partnership, BFSI News, ET BFSI

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MUMBAI: Fairfax and CDC-backed IIFL Finance on Tuesday said its wholly-owned subsidiary IIFL Home Finance Ltd and Standard Chartered Bank have entered into a co-lending arrangement for extending MSME loans.

Under this partnership, IIFL Home Finance Ltd and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance Ltd will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing, IIFL Finance said in a regulatory filing.

“We believe this is one of the first co-lending partnerships after the RBI’s revised guidelines,” Monu Ratra, the CEO of IIFL Home Finance, said.

IIFL Home Finance in December partnered with ICICI Bank to provide affordable housing and MSME loans as a sourcing partner. In October CSB Bank had also partnered with IIFL Finance for sourcing and managing retail gold loan assets.

IIFL Finance is a retail-oriented non-banking finance companies (NBFC) with about 90 per cent of its Rs 41,000 crore loan book under the retail category.

In November last year, the Reserve Bank had came out with a Co-Lending Model (CLM) scheme under which banks can provide loans along with NBFCs to priority sector borrowers based on a prior agreement.

The CLM, an improvement over the co-origination of loan scheme announced by the RBI in September 2018, seeks to provide greater flexibility to the lending institutions.



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IIFL Finance, Standard Chartered enter into co-lending partnership, BFSI News, ET BFSI

Personal Finance

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Fairfax and CDC-backed IIFL Finance on Tuesday said its wholly-owned subsidiary IIFL Home Finance Ltd and Standard Chartered Bank have entered into a co-lending arrangement for extending MSME loans. Under this partnership, IIFL Home Finance Ltd and the Standard Chartered Bank will co-originate these loans and the IIFL Home Finance Ltd will service the customers through the entire loan life-cycle including sourcing, documentation, collection and loan servicing, IIFL Finance said in a regulatory filing.

“We believe this is one of the first co-lending partnerships after the RBI’s revised guidelines,” Monu Ratra, the CEO of IIFL Home Finance, said.

IIFL Home Finance in December partnered with ICICI Bank to provide affordable housing and MSME loans as a sourcing partner. In October CSB Bank had also partnered with IIFL Finance for sourcing and managing retail gold loan assets.

IIFL Finance is a retail-oriented non-banking finance companies (NBFC) with about 90 per cent of its Rs 41,000 crore loan book under the retail category.

In November last year, the Reserve Bank had came out with a Co-Lending Model (CLM) scheme under which banks can provide loans along with NBFCs to priority sector borrowers based on a prior agreement.

The CLM, an improvement over the co-origination of loan scheme announced by the RBI in September 2018, seeks to provide greater flexibility to the lending institutions. NKD MR



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RBI, BFSI News, ET BFSI

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The Reserve Bank of India (RBI) on Tuesday said state-owned SBI, along with private sector lenders ICICI Bank and HDFC Bank continue to be domestic systemically important banks (D-SIBs) or institutions which are ‘too big to fail’.

SIBs are subjected to higher levels of supervision so as to prevent disruption in financial services in the event of any failure.

The Reserve Bank had issued the framework for dealing with D-SIBs in July 2014.

The D-SIB framework requires the central to disclose the names of banks designated as D-SIBs starting from 2015 and place these lenders in appropriate buckets depending upon their Systemic Importance Scores (SISs).

“SBI, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs), under the same bucketing structure as in the 2018 list of D-SIBs,” RBI said in a statement.

The additional Common Equity Tier 1 (CET1) requirement for D-SIBs was phased-in from April 1, 2016 and became fully effective from April 1, 2019. The additional CET1 requirement will be in addition to the capital conservation buffer, the central bank said.

The additional CET1 requirement as a percentage of Risk Weighted Assets (RWAs) in case of the State Bank of India (SBI) is 0.6 per cent, while for the other two banks it is 0.2 per cent.

Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it.

In case a foreign bank having branch presence in India is a Global Systemically Important Bank (G-SIB), it has to maintain additional CET1 capital surcharge in the country as applicable, proportionate to its RWAs.

SIBs are seen as ‘too big to fail (TBTF)’, creating expectation of government support for them in times of financial distress. These banks also enjoy certain advantages in funding markets.



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Cops, BFSI News, ET BFSI

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Digging into the racket of procuring vehicle loan from the bank for ghost vehicles revealed that the fraudsters have duped at least three other banks apart from Yes Bank. Based on a complaint by Yes Bank officials, police have already booked 20 accused and arrested five on Saturday.

Senior police officials informed that the accused have adopted similar modus operandi to cheat ICICI Bank and an inquiry is underway. While police suspect that the gang had targeted two other private banks and their names will be declared only after investigation.

“From the preliminary investigation it was found that the accused have targeted Yes Bank, ICICI Bank and two other banks. The accused borrowed loans using forged papers and vehicle registration certificates (RC),” said police.

The accused have been booked for borrowing 53 loans amounting to a staggering Rs 8.64 crore from Yes Bank between 2016 to 2018. They initially paid instalments but after default in repayment of multiple loans the bank started an inquiry.

“With other banks the total amount of loan borrowed is less,” said an officer.

Manufacturer denied making of these vehicles
Investigation revealed that the accused got bus and trucks registered in Arunachal Pradesh (AP) using forged purchase and insurance papers. Later using these RCs, the accused borrowed loans from banks in Gujarat. Yes Bank officials contacted truck manufacturers TATA and Ashok Leyland for verification of the identification numbers, which they denied. “There could be involvement of bank officials as well when the loan was approved,” said police.

Financial frauds on cops’ radar
“We are doing a quick and in-depth investigation in financial frauds as these criminals siphon off a huge chunk of money in one attempt which is equal to the total value of thefts of loots reported in the city annually. We will immediately nail these crooks who target public money in banks or other victims,” said Ajay Tomar, city police commissioner.



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BharatPe raises Rs 139 crore debt from Alteria Capital, ICICI Bank

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Fintech company BharatPe on Sunday said it has raised Rs 139 crore (about USD 20 million) in debt from venture debt firm Alteria Capital and ICICI Bank that will be used to strengthen its lending business and provide credit to merchants.

Founded by Ashneer Grover and Shashvat Nakrani in 2018, BharatPe offers merchants a single interface for all UPI apps like Paytm, PhonePe, Google Pay, BHIM, Mobikwik, Freecharge and others. It also facilitates loan facility for its merchant partners.

Speaking to PTI, BharatPe co-founder and CEO Ashneer Grover said Rs 90 crore in debt came from Alteria Capital, while the remaining Rs 49 crore was from ICICI Bank.

 

“We have raised funds from ICICI Bank at a competitive interest rate of less than 9 per cent. We are aggressively building our lending vertical and our loan book is currently at Rs 400 crore.

“With this infusion, we can double down on our efforts and we expect the loan book to grow to Rs 700-750 crore by the end of March 2021,” he added.

Grover said BharatPe had set a target of disbursing Rs 1,000 crore of loans in 2020-21, of which Rs 800 crore has already been disbursed.

“The latest tranche of debt raised will help further build the lending business and enable credit for millions of businesses, across the length and breadth of India,” Grover said.

Last week, BharatPe raised Rs 60 crore in debt from Innoven Capital. With this, BharatPe has raised a total of Rs 199 crore (USD 28 million) in debt till date. It had said it plans to raise over Rs 5,000 crore in debt funding in the next two years to build its lending business.

“We have committed ourselves to provide USD 700 million of loans to small merchants and kirana store owners by March 2023 and are hoping to onboard more institutional debt partners in the near future,” he said.

Grover added that the company aims to become a digital bank that is the one-stop destination for merchants for all kinds of financial services and this tranche of funds will get things rolling.

Merchants are the top priority for the company and it is committed to solving the credit problem for them, he said.

“The institutional debt raised will help catapult our lending business. We intend to raise close to USD 700 million of debt capital over the next two years… By March 2023, our aim is to be present in 300 cities and have the lending product available in 200 cities,” he added.

Grover said the company has already disbursed loans to more than one lakh merchants and aims to scale this up by 8-10 times and enable credit for a million kirana store owners in 2021.

Currently, serving over 50 lakh merchants across 65 cities, the company has grown business 30 times in 2019 and processed over six crore UPI transactions a month (annualised transaction processed value of over USD 7 billion).

BharatPe has raised close to USD 171 million in equity and debt till date. The company’s investors include Beenext, Sequoia, SteadView Capital, Ribbit Capital, Coatue Management LLC, Insight Partners, and Amplo.

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ICICI Bank launches prepaid cards for MSME workers in collaboration with Niyo, BFSI News, ET BFSI

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Private lender ICICI Bank announced a tie-up with FinTech Niyo to issue prepaid cards to MSME workers. The lender said MSME blue-collar workers would be able to get the ‘ICICI Bank Niyo Bharat Payroll Card’ which Allowed customers to receive funds of upto Rs 1 lakh.

ICICI Bank in a statement said the card, thorugh which MSMEs could also disburse worker salaries, was in line with Niyo’s aim of reaching 5 million blue-collar workers in 5 years. Through the card, workers could withdraw funds at ATMs, make online transactions at e-commerce portals, and also make payments at POS terminals.

Sudipta Roy, Head – Unsecured Assets at ICICI Bank said “We at ICICI Bank constantly strive to introduce facilities that foster inclusivity and extend the reach of the formal banking ecosystem. In line with this, we are delighted to partner with Niyo for the ‘ICICI Bank Niyo Bharat Payroll Card’. This partnership is yet another initiative by us to make banking products easily accessible to the underbanked population,”

“We believe that armed with this card, workers of MSMEs will be able to enjoy the convenience and safety of digital banking,” he further added.

Niyo’s Co-founder and CEO Vinay Bagri further noted “The Niyo Bharat Digital Salary Solution has the potential to bring millions of blue collared salaried workforces into the formal economy and also support the nation’s successful march towards Digital India,” further adding “Our primary objective is to provide digital banking solutions for the blue-collar segment to not only foster financial inclusion but also inculcate a long-term saving habit among them.”



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