Tag: IDFC

IDFC First Bank partners up with HPCL to facilitate fuel payments using FASTag, BFSI News, ET BFSI

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IDFC First Bank has partnered Hindustan Petroleum Corporation Ltd (HPCL) to facilitate fuel payments at their retail outlets using the bank’s FASTags. In addition, IDFC First Bank’s FASTags can now also be bought, recharged and replaced by passenger vehicle users at select HPCL retail outlets.

This tie-up makes the purchase and use of tags convenient for about five million motorists, it said in a statement. “As a digital-first bank, our effort is to make all transit-related payments simpler. IDFC First Bank has issued close to five million FASTags and these tags are used actively by motorists across toll plazas with transactions averaging two million a day,” said B Madhivanan, chief operating officer, IDFC First Bank.

The company said motorists will now have the convenience of a single form factor and single balance for payments related to road travel in the form of FASTag.

So far, FASTags have only been used to pay for toll charges. Last year, IDFC First Bank was the first to introduce fuel payments using FASTag balances for commercial vehicles users at HPCL retail outlets. Now, it is being extended to personal vehicle users as well.

“We were the first to introduce FASTag based fueling at HPCL retail outlets in the last financial year, by way of acceptance of IDFC First Bank FASTags through our fleet loyalty program“DriveTrack Plus”. We are now introducing payment through IDFC BANK FASTag on “HP Pay” mobile app. We are also starting a FASTag marketing arrangement with IDFC FIRST Bank at select retail outlets, which is also the first of its kind,” Sai Kumar Suri, ED-Retail of HPCL said, in a statement.

The FASTag program was jointly launched by the National Highway Authority of India (NHAI), Indian Highways Management Company Ltd (IHMCL) and National Payments Corporation of India (NPCI) as a medium to accept toll fare across all National Highway plazas. Banks act as issuers and acquirers in this ecosystem which processes close to seven million transactions a day.



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Former CAG Vinod Rai fails to secure second term at IDFC

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In its special business Item No.5 of the 24th AGM notice, the company said, “the item 5 has not got requisite majority and hence is not passed”. Out of the six resolutions mentioned in the notice “five stand passed”, the company said in a filing to the stock exchanges. (File image)

Vinod Rai, former Comptroller and Auditor General (CAG) whose name was proposed for the post of non-executive and non-independent director on the board of directors of IDFC, has failed to secure the place as 62.8% votes were cast against the resolution.

The nomination for the position of non-executive director was for the period till May 22, 2023.

In its special business Item No.5 of the 24th AGM notice, the company said, “the item 5 has not got requisite majority and hence is not passed”. Out of the six resolutions mentioned in the notice “five stand passed”, the company said in a filing to the stock exchanges.

The shareholders passed resolutions approving financial statement for 2020-21, appointing statutory auditor and their remuneration and appointment of two independent directors — Jaimini Bhagwati and Anil Singhvi. They also passed the proposal for payment of commission to non-executive director. Bhagwati has been appointed an independent director with 63.088% votes in favour, while Singhvi has been appointed independent director with 97% favourable votes. The ordinary resolution needs 50% +1 votes for it to pass.

Infrastructure Development Finance Company (IDFC) had sought shareholders’ nod for the appointment of Rai as non-executive and non-independent director, since he was an independent director for two terms and could not be appointed for the third term. Rai had resigned as IDFC’s independent director before his second term could end. He was reappointed by IDFC as a non-independent director on the board on May 25.

IDFC shares closed 2.02% higher at Rs 55.65 per share on the BSE.

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IDFC’s reverse merger with bank faces hurdles, BFSI News, ET BFSI

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Mumbai: IDFC Ltd, the parent of IDFC Bank, on Tuesday indicated to investors that it faced challenges in pursuing a reverse merger with IDFC First Bank.

According to analyst present in the meeting the management said that the parent company’s holds stake in IDFC Mutual Fund and two ventures one with the Delhi government and one with Karnataka Government would need to be exited and there are challenges in exiting these two firms. Shares of IDFC was down 3%, while shares of IDFC First Bank rose 2% following the analyst meet. Although neither had announced merger plans in the past, the same has often been speculated by analyts. There expectation of the holding company merging into the bank got a boost after the Reserve Bank of India in July clarified that IDFC can exit as the promoter of IDFC First Bank.

The central bank had also allowed small finances banks, which came under a holding company structure to reverse merge with their parent. Following this a couple of SFBs merged with the parent.

For IDFC shareholders the merger with the bank is beneficial considering that there have been reports that the company is selling its mutual fund arm. If post-sale the proceeds are distributed to shareholders it would be very tax inefficient as IDFC would be paying capital gains as well as dividend distribution tax. In the event of a merger the sale proceeds need not be distributed but can be infused into the bank as capital. As the bank’s equity is trading at higher multiples compared to the parent there is an upside for IDFC shareholders if there is a merger. However, IDFC First Bank already has enough capital and may not be able to deploy the fund immediately.

During the call IDFC’s non-executive chairman Vinod Rai said that there were challenges in unwinding the complex corporate structure of IDFC. He also said that the corporation had initiated the process of divesting stake in non-core subsidiaries.

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IDFC First Bank logs Rs 630 crore loss in Q1 on Covid provisioning, BFSI News, ET BFSI

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Private lender IDFC First Bank on Saturday reported a net loss of Rs 630 crore in the April-June quarter due to provisioning measures for cushioning the impact of the second wave of the Covid-19 pandemic. The bank had posted a net profit of Rs 93.55 crore in the year-ago quarter ended in June 2020 and that of Rs 127.81 crore in the previous quarter ended in March 2021.

“Net loss of Rs 630 crore for Q1FY22 is because of prudent provisions for Covid wave 2.0. Covid provision pool increased from Rs 375 crore to Rs 725 crore during the current quarter on a prudent basis to act as a cushion for Covid impact,” IDFC First Bank said in a release.

The bank expects to collect a reasonable proportion of these dues in due course, it added.

Total income (net of interest expense) grew by 36 per cent year-on-year to Rs 3,034 crore in Q1FY22, driven by the growth in NII and fee income, the bank said. Its total income during Q1FY21 stood at Rs 2,229 crore in June 2020 quarter.

The bank said its net interest margin (NIM) — the difference of interest earned and expended — was the highest ever at 5.51 per cent during the reported quarter. The NIM was 4.86 per cent in year ago quarter.

The net interest income (NII) rose by 25 per cent year-on-year to Rs 2,185 crore.

On the asset front, bank’s gross and net non-performing assets (NPAs) were at 4.61 per cent and 2.32 per cent respectively as of June 30, 2021.

The NPA ratios were up from 1.99 per cent and 0.51 per cent respectively, from year ago period.

“The GNPA and NNPA include impact of 84 bps (basis points, which is one hundredth of a percentage) and 71 bps respectively on account of one Mumbai based infra toll account which slipped during the quarter. The bank expects no material economic loss in this account eventually as this is an operating toll road and is only delayed.”

Bank deposits were up by 36 per cent to Rs 84,893 crore. The retail loan book of the lender increased to Rs 72,766 crore as on June 30, 2021 from Rs 56,043 crore.

The year-on-year growth of the retail loan book was 27 per cent excluding Emergency Credit Guarantee Line loan book of Rs 1,645 crore. However, it declined by 1.2 per cent on a sequential basis. The wholesale loan book fell by 15 per cent to Rs 34,232 crore from Rs 40,275 crore.

Capital adequacy ratio stood at 15.56 per cent with CET-1 (common equity tier-1) ratio at 14.86 per cent. Average liquidity coverage ratio (LCR) was at 166 per cent for Q1FY22.

“Within just two years we have made tremendous progress at the bank. Our CASA (current account savings account) ratio is high at 50.86 per cent despite reducing savings account interest rates by 200 bps recently, which points to the trust customers have in our bank and service levels.

“Because of our low cost CASA, we can now participate in prime home loans business, which is a large business opportunity,” V Vaidyanathan, Managing Director and CEO, IDFC First Bank, said. Regarding the loss during the quarter, he said the bank has made prudent provisions for Covid second wave.

“We expect provisions to reduce for the rest of the three quarters in FY22. We guide for achieving pre-Covid level gross and net NPA, with targeted credit loss of only 2 per cent on our retail book by Q4FY 22 and onwards, assuming no further lockdowns,” he said further.



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IDFC says can exit as promoter of IDFC First Bank since five-year lock-in period over

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IDFC said it can exit as the promoter of IDFC First Bank since the five year lock-in period has ended. This is based on the communication with the Reserve Bank of India.

“… the RBI vide its letter …dated July 20, 2021, clarified that after the expiry of lock‐in period of five years, IDFC Limited can exit as the promoter of IDFC First Bank,” it said in a stock exchange filing on Wednesday.

Under RBI rules, the shareholding of the non-operative financial holding company, which is the promoter of the bank, will be locked in for a period of five years from the date of commencement of the business of the bank. IDFC Bank was set up in 2015. This means that the five year lock-in period is now completed.

As on June 30, 2021, IDFC Financial Holding Company held 36.56 per cent stake in IDFC First Bank.

IDFC First Bank was founded by the merger of IDFC Bank and Capital First on December 18, 2018.

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MD, BFSI News, ET BFSI

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Private sector IDFC FIRST Bank is offering compensation equivalent to four times of the CTC as well as continuation of salary for two years to the families of the employees who lost their lives due to the coronavirus infection.

Among others, the bank is also offering loan waivers of such employees so that their families do not feel pressured due to the economic burden.

“The bank’s employees are usually young people. Their families will be taken by shock. So we put together a composite programme covering all angles. We are giving four times the annual CTC as compensation plus continuing the salary for two more years so that the family can get the time to economically recover,” V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, told PTI.

The bank is taking initiative to contact the families of those deceased and informing them about what the bank has to offer to them, he added.

“Among others, as part of this scheme we are waiving employee loans as families will have to bear the burden otherwise. If an employee has taken a personal loan, car loan, two-wheeler loan or education loan, etc, that is 100 per cent waived by the bank. Housing loan waiver is up to Rs 25 lakh (before June 30, 2021),” Vaidyanathan said.

Suppose, if an employee had taken Rs 30 lakh loan, IDFC FIRST will waive Rs 25 lakh and residual loan will become 5 lakh, he explained.

“The family can pay the reduced EMI from the salary credits we will make to them for 2 years. We are asking employees to insure their loans going forward (after June),” he said.

Vaidyanathan said around 20 employees of the bank have lost their lives to Covid.

“We are reaching out to the families of the deceased employees and telling them that you are entitled to this. We will give employment to the spouse if they are eligible on merit, if not then we will give them Rs 2 lakh for skilling them,” he said.

The compensation is applicable retrospectively and will continue as long as the pandemic remains.

Among others under this ‘Employee Covid Care Scheme 2021’, the lender has made provision of scholarship of Rs 10,000 monthly to two children up to graduation, funeral expenses up to Rs 30,000, relocation assistance of Rs 50,000 as well as pro-rata bonus payout for the period served this year by the deceased employee.

Apart from this, Vaidyanathan said the bank employees have taken an initiative on their own to help the needy customers belonging to the low income group by generating a corpus from their salaries.

Under this employee funded Ghar Ghar Ration programme, the bank employees will supply ration kits to 50,000 low income customers whose livelihood has been impacted by the pandemic.

Employees are procuring ration kits comprising 10 kg rice/flour, 2 kg lentils, 1 kg sugar and salt, 1 kg cooking oil, 5 packets of spices, tea, biscuits and other essentials, he said, adding employees have contributed one day to one month’s salary for this.

He said as many as 16,000 benefits have reached across Rajasthan, MP, Maharashtra, Odisha, Gujarat, Karnataka, Haryana, Tamil Nadu, Andhra Pradesh and Chhattisgarh under this programme launched recently.

The lender has also identified 250 vulnerable families who have lost an earning member of their family to Covid-19 with a cash relief support of Rs 10,000 in a partnership with ‘Give India’.



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