Tag: ICICI Bank

Sensex, Nifty on a choppy note; bank stocks decline, BFSI News, ET BFSI

Personal Finance

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Equity benchmarks Sensex and Nifty opened on a choppy note on Tuesday, tracking weakness in index heavyweights Infosys, ICICI Bank and HCL Tech amid a negative trend in global markets.

After swinging over 200 points in the opening session, the 30-share Sensex was trading 34.62 points or 0.06 per cent lower at 60,101.16. Similarly, the Nifty slipped 2.45 points or 0.01 per cent to 17,943.50.

HCL Tech was the top loser in the Sensex pack, shedding over 2 per cent, followed by M&M, Infosys, Tech Mahindra, ICICI Bank, Bajaj Finance and IndusInd Bank.

On the other hand, Bajaj Auto, Titan, Dr Reddy’s, SBI and ITC were among the gainers.

In the previous session, the 30-share index closed 76.72 points or 0.13 per cent higher at 60,135.78, and Nifty rose 50.75 points or 0.28 per cent at its all-time closing high of 17,945.95.

Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 1,303.22 crore on Monday, as per exchange data.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the resilience of the market in general, and the momentum in the broader market in particular, can be explained only by one factor – the exuberance and dominance of the newbie retail investors.

Institutional selling is easily getting absorbed by retail investors who are not concerned about valuations, he noted.

Weakness in IT and strength in banking which expectedly played out in the previous session need not become a trend. Results of Infosys, Wipro and HCL Tech may not disappoint the market like TCS, he said, adding that results of TCS were good – only fell short of market expectations.

“Now, INR at 75.35 to the dollar is becoming a major tailwind for IT. So, investors should remain invested in IT and even buy on declines since the demand environment for the sector remains robust. Crude at $84 and its potential inflation fall out are areas of concern,” he stated.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with losses in mid-session deals.

Stock exchanges in the US too ended on a negative note in the overnight session.

Meanwhile, international oil benchmark Brent crude fell 0.07 per cent to $83.59 per barrel.



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Advisory fees of investment bankers drops to 3-year low at $761 million, BFSI News, ET BFSI

Banking & Finance

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Advisory fees of investment bankers have fallen $761.5 million, the lowest in three years, said a report by Refinitiv, an entity owned by the London Stock Exchange.

During the first nine months of 2021, SBI Caps led the underwriting fees league table with 8.6 percent wallet share or $65.7 million. Morgan Stanley comes next with 6.3 percent with $48.1 million, followed by JPMorgan at 6.2 percent with $47.5 million.

Goldman Sachs stood at fourth with $46.7 million or 6.1 percent of the market pie. Axis Bank got $46.7 million or 6.1 percent share, while ICICI Bank had $40.4 million, 5.3 percent.

BofA Securities got $33.5 million for a 4.4 percent deal share, Kotak Mahindra Bank at $32.8 million, 4.3 percent, Citi at USD 29.1 million, 3.8 per cent, and Avendus Capital stood at the 10th place with $23.3 million for a 3.1 percent deal share.

ICICI Bank leads with $2.5 billion, 11.3 percent of the market share in ECM league table.

Since the deal making process is online, the i-banking fees have dropped as merchant bankers are charging less from their clients. Another reason for the drop is the higher average deal value size of $105 million, which was up 14.4 percent year-on-year with 17 deals topping the $1-billion mark and totalling $38.8 billion, compared with 12 deals above $1 billion worth a total of $30.1 billion on a year-on-year basis.



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Banks set for a sharp earnings rise in Q2, may face asset quality jitters, BFSI News, ET BFSI

Banking & Finance

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Indian banks’ earnings are likely to pick up in the September quarter, led by a recovery in business growth, fee income and a gradual reduction in credit costs.

However, they may be tempered by higher provisioning in the retail and small and medium enterprises (SME) loan segments that have seen higher delinquencies.

Earnings growth

Private banks are likely to report PPoP growth of 9% YoY (3.8% QoQ) and net profit growth of 14% YoY (17.3% QoQ). Earnings are likely to pick up, led by recovery in business growth / fee income and a gradual reduction in credit costs.

“Loan growth would pick up, led by revival in economic activity and the opening up of the economy. Demand going into the festive season and commentary around the FY22 outlook would be key monitorables. Retail and SME segment is likely to show strong recovery; though growth in the Corporate segment is likely to remain soft and recovery within this segment would be another monitorable,” according to Motilal Oswal Securities.

Banks are likely to report earnings growth of 41% in the fiscal year 2021-22, it said.

PSBs to report improved operating performance, supported by modest business growth and a gradual reduction in provisions. Opex is likely to remain elevated on account of the revised guidelines on pension provisions.

SBI NPAs may decline

As per analyst estimates, State Bank of India could post a further decline in bad loans and could see a moderation in credit costs. Private lender ICICI Bank appears firmly placed to deliver healthy sustainable growth, led by its focus on core operating performance. It may utilise higher buffers in case of a possible asset quality impact.

Exchange filings have shown HDFC Bank has posted strong credit growth in the September quarter and after the embargo being lifted on sanctioning credit cards, the bank is poised for a healthy revival in retail loans.

Estimates suggest that ICICI Bank could deliver 16.6% year-on-year loan growth, while Axis Bank and Kotak Mahindra Bank could grow over 9% each.

For state-run banks, operating expense is likely to remain elevated on account of the revised guidelines on pension provisions.

Asset quality

Asset quality could pose challenges with near-term slippages expected in the retail, SME and microfinance segments. Though analysts said there could be a decline over the June quarter.

Slippages would remain elevated, led by the Retail and SME segment; however, the quantum is likely to moderate, keeping asset quality in check – barring mid-sized banks, which could see marginal deterioration. Corporate slippages could see an uptick due to the downgrade of SREI Infra which is likely to get offset by the recoveries from DHFL resolution



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M-cap of 8 of top-10 most valued cos jump Rs 2.32 lakh cr; Reliance Industries lead gainer, BFSI News, ET BFSI

Personal Finance

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Eight of the top-10 most valued companies together added a whopping Rs 2,32,800.35 crore in market valuation last week in-tandem with rally in the broader market, with Reliance Industries and Tata Consultancy Services emerging as the biggest gainers. Last week, the 30-share BSE benchmark rallied 1,293.48 points or 2.20 per cent. The benchmark soared past the 60,000 level on Friday.

The market valuation of Reliance Industries zoomed Rs 93,823.76 crore to reach Rs 16,93,170.17 crore.

Tata Consultancy Services added Rs 76,200.46 crore taking its valuation to Rs 14,55,687.69 crore.

The valuation of Infosys jumped Rs 24,857.35 crore to Rs 7,31,107.12 crore and that of Bajaj Finance gained Rs 12,913.91 crore to Rs 4,66,940.59 crore.

The market capitalisation (m-cap) of HDFC Bank rallied Rs 10,881.09 crore to Rs 8,87,210.54 crore.

ICICI Bank added Rs 7,403.24 crore to Rs 4,87,388.37 crore in its valuation.

The valuation of State Bank of India jumped Rs 5,310.14 crore to Rs 4,08,479.47 crore and that of HDFC gained Rs 1,410.4 crore to Rs 4,91,841.14 crore.

In contrast, the valuation of Hindustan Unilever Limited diminished by Rs 14,614.46 crore to Rs 6,20,362.58 crore.

Kotak Mahindra Bank’s market valuation also tumbled Rs 11,697.38 crore to Rs 3,83,866.29 crore.

Reliance Industries was leading the chart of the top-10 most valued companies list followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, HDFC, ICICI Bank, Bajaj Finance, State Bank of India and Kotak Mahindra Bank. PTI SUM ANS ANS



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ICICI Bank launches contactless payment service via iMobile Pay app, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank, in partnership with Visa and Comviva, has launched a contactless payment service through its banking app, iMobile Pay.

The service enables customers to tap their smartphones to pay at POS (Point of Sale) machines of merchant outlets without carrying their cards for payments at retail stores.

Based on the Near Field Communications (NFC) technology, the payment service enables customers to create digital versions of their physical ICICI Bank debit and credit cards on the iMobile Pay app. Using the digital cards, customers can initiate electronic payments at merchant outlets from NFC enabled Android smartphones by waving their phone near a contactless POS device.

Customer’s card details are not shared during the transaction process and are stored virtually in the Bank’s secure cloud server.

The facility of ‘Tap to Pay’ through iMobile Pay is currently available on Visa cards and will be activated on Mastercard cards too.

Customers can follow below given steps to avail the service:

1. One time activation:

> The customer has to login to iMobile Pay app and click on ‘Tap to Pay’ icon on the login page or ‘Shop’ section.

> Then the customer needs to select registered debit and credit cards to make a digital version and then click on ‘I Agree’ to accept the terms & conditions.

> The customers can create virtual cards against each of their ICICI Bank Visa credit and debit cards

2. Making a payment:

> Log in to iMobile Pay app and click on ‘Tap to Pay’ on login page or ‘Shop’ section

> Select a virtual Visa card to make the payment and wave or tap the phone near the NFC enabled POS device

> A message of ‘Payment initiated successfully’ appears on the phone confirming the transaction



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Ahead of festive season, banks slash interest rate on home loans. Get the details here, BFSI News, ET BFSI

Banking & Finance

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Festive season has commenced and banks as well as non-banking financial institutions have already rolled out a plethora of festival offers like lower interest rates on loans and waiver of processing fees.

Ahead of the festive season, many top banks have announced offers and discounts on home loans.

State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank are among the banks offering home loans at attractive rates.

The offer is for a limited time period.

Bank Women Others Effective Rate of Interest Offer valid upto
SBI – – 6.70% onwards –
ICICI Bank – – 6.70% onwards –
Yes Bank 6.65% onwards (salaried) – 6.70% onwards 1-Oct to 31 Dec 2021
Kotak Mahindra Bank – – 6.50% onwards 10-Sep to 8-Nov-21
Punjab National Bank – – 6.60% onwards

Source: Official Websites

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Ahead of festive season, banks slash interest rate on home loans. Get the details here, BFSI News, ET BFSI

Banking & Finance

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Festive season has commenced and banks as well as non-banking financial institutions have already rolled out a plethora of festival offers like lower interest rates on loans and waiver of processing fees.

Ahead of the festive season, many top banks have announced offers and discounts on home loans.

State Bank of India (SBI), ICICI Bank, Punjab National Bank (PNB), Kotak Mahindra, Bank of Baroda (BoB) and Yes Bank are among the banks offering home loans at attractive rates.

The offer is for a limited time period.

Bank Women Others Effective Rate of Interest
SBI – – 6.70% onwards
ICICI Bank – – 6.70% onwards
Yes Bank 6.65% onwards (salaried) – 6.70% onwards
Kotak Mahindra Bank – – 6.50% onwards
Punjab National Bank – – 6.60% onwards

Source: Official Websites

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ICICI Bank 2nd in card spends, ahead of SBI, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank has overtaken SBI in credit card spends in August taking the number two spot after HDFC Bank. According to RBI data, ICICI Bank had a market share of 19.6% in August 2020 up from 15.8% in August 2020. SBI Card’s market share in spends, slipped to 18.7% in August 2021 from 20% in the previous year.

In absolute terms, total spending through credit cards in August 2021 was Rs 77,733 crore, up 54% from Rs 50,319 crore in August 2020. The overall number of cards in force has increased from 5.8 crore to 6.4 crore in the same period.

“Looking at total spends, since November 2020, ICICI has gained around 510 basis points market share, while HDFC Bank and SBI cards have lost around 285bps and 90bps market share, respectively. ICICI Bank’s total spends for July 2021 was equal to that of SBI cards despite ICICI Bank’s market share (based on outstanding cards) being lower than that of SBI Cards. We believe, ICICI’s co-branded card with Amazon (1.6 millon as of March 2021), which forms more than 50% of incremental card additions, has helped it to scale up its credit card business in a significant way,” said Suresh Ganapathy, an analyst with Macquarie research.

To boost credit card spending, HDFC Bank on Tuesday launched its Festive Treats 3.0 campaign, which will provide offers on cards, loans and EMIs. The bank has partnered with over 10,000 merchants across 100 locations as it expects customers to return to offline shopping following a dip in Covid cases and increased pace of vaccinations. “This year we have come out with more offline offers including hyperlocal merchants. We will use our ATM platform to inform customers about the offers around their location,” said Parag Rao, group head (payments, consumer finance, digital banking and IT).

HDFC Bank continues to be the market leader with 26.5% of total credit card spending in India. However, the bank’s share has fallen from August 2021, when it accounted for 28.7% of the total spend. Sequentially, HDFC Bank had seen a dip in credit cards in force as the RBI ban was still in force for most of the month. Since the ban was lifted the bank had added four lakh credit cards to its base of 1.47 crore cards as of August 2021.

The biggest loser in terms of share of spending is Citibank, which led the ranking in terms of card spend for many years. The multinational, which had a 7.8% share of spends in 2020 now accounts for 4.9% of spending. IDFC First Bank, a relatively late entrant, has managed to make a dent by increasing its share of card spend to over 1%. American Express is the only multinational bank to grow its share of spending from a year-ago period. However, the US issuer also faces an embargo on issuing new cards until it complies with data localization norms, which is likely to hit growth.



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Top banks face up to Rs 800 crore hit on GST on FD insurance premiums, BFSI News, ET BFSI

Banking & Finance

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Major banks face increased costs of Rs 250 to Rs 800 crore on input tax credit on insurance paid to Deposit Insurance and Credit Guarantee Corporation (DICGC) by them on fixed deposits after the hike in insurance of deposits to Rs 5 lakh from Rs 1 lakh

The indirect tax department is questioning banks on the status of input tax credit (ITC) on the insurance paid to the DICGC.

All banks are required to insure this amount with the DICGC and pay a premium on that sum, for which an 18% GST rate is applicable.

Most banks consider GST as a cost and add it towards the available input tax credit.

Input tax credit

Input tax credit is GST paid on input services or raw materials that can be set off against a certain kind of future tax liability.

The indirect tax department is contesting the availability of input tax credit on insurance premiums.

Banks may have to shell out not only higher premiums and also incur higher tax costs due to credit disputes.

The indirect tax department claims the insurance premium paid by banks is not towards taxable output services and so they cannot input tax credit. As per the GST framework, banks can only avail half of the input tax credit available to them. The tax department claims the insurance premium is not towards the “core” function of banks.

Services free

Since most services provided by banks to fixed deposit holders are free, the tax credit cannot be used against any outgoing GST as well, it says.

SBI, Bank of Baroda, Punjab National Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank are the major banks that may be affected.

Under the existing tax laws, there is an ongoing debate as to whether any cost that a company or a financial institution incurs due to a regulatory requirement should be considered crucial, and whether input tax credit hould be available on that.



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Only 60% banks ready with new auto debit system, customers to face inconvenience, BFSI News, ET BFSI

Banking & Finance

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Bank customers are set to face disruptions in their auto debits after new RBI norms kicked in on Friday as only about 60% of banks are ready with the new system.

Private sector lenders, including HDFC Bank, ICICI Bank, Citibank, Axis Bank, IDFC Bank are ready with the new systems. IndusInd Bank, Bank of Baroda, RBL Bank and YES Bank are also set to meet the deadline.

However, public sector banks are still working on putting the new system in place.

Dashing messages

Banks are sending communications to customers saying that they will not process the recurring payments and customers will have to make payments directly to merchants. Below are some text messages received by customers:

> “Attention! From 1st Oct’21, as per RBI guidelines on e-Mandate on cards, we will decline Non Compliant recurring txn at Merchant Web/App on your Credit/Debit Card. Alternate Solution – Retry regular payment on Merchant Web/App authenticated via OTP or Pay via AutoPay in BillPay on our NetBanking for your Electricity /Water/Gas/ Landline/Postpaid mobile/Broadband/Insurance billers,” said a message to customers by HDFC Bank.

> “In compliance with the regulatory requirements, we are currently building a solution to seamlessly manage all your domestic standing instructions for recurring payments. This solution will be available soon for you. Starting October 1, any existing standing instruction for domestic and international recurring transactions on your card account will not be processed. We request you to make these payments directly to the service providers to avoid any interruptions,” American Express said in a recent message to customers.

How does the new system work?

Under the proposed system, as a risk mitigating and customer facilitation measure, the card-issuing bank will have to send a pre-transaction notification to the cardholder, at least 24 hours before the actual charge or debit to the card. While registering e-mandate on the card, the cardholder shall be given the facility to choose a mode among available options (SMS, email, etc.) for receiving the pre-transaction notification from the issuer. On receipt of the pre-transaction notification, the cardholder shall have the facility to opt-out of the particular transaction or the e-mandate. For transactions above Rs 5,000, banks will also be required to send one time passwords to customers.

What is a standing instruction?

A standing instruction is a service offered to customers of a bank, wherein regular transactions that the customer wants to make are processed as a matter of course instead of initiating specific transactions each time.

This service relates to transactions like renewing subscription to OTT platforms, newspapers and magazines, and utility bill payments.

The issue

Large lenders and payment entities including State Bank of India, ICICI, Citi, HDFC, Axis, HSBC, Visa and Mastercard had asked the Reserve Bank of India (RBI) to postpone the deadline for putting in place a new system to alert customers on ‘standing instruction’ transactions.

The banks were asked to set up the system by March 31, 2021.

The lenders also wanted RBI to exclude transactions against pre-existing standing instructions and those with international merchants from the new conditions for e-mandates on cards for recurring transactions.



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