Tag: IDFC First Bank

IDFC FIRST Bank debuts FIRST Private Infinite Card, India’s first standalone metal debit card, BFSI News, ET BFSI

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Mumbai (Maharashtra) [India], December 1 : IDFC FIRST Bank today announced the launch of FIRST Private Infinite, the country’s first-ever standalone metal debit card, in partnership with Visa, the global leader in digital payments.

FIRST Private Infinite is a lifetime free card designed specifically for customers who are part of the Bank’s FIRST Private program, a premium savings and wealth offering. The FIRST Private program offers an unrivalled banking and investment experience to customers and comes with a range of exceptional investment, banking, lifestyle and wellness benefits.

A statement black card, FIRST Private Infinite is crafted from hybrid metal with details etched in silver, created to deliver an exclusive payment experience. True to its top-of-the-line proposition, the benefits of FIRST Private Infinite debit card are specifically curated for premium cardholders and include complimentary domestic and international lounge access for cardholders and companions, unparalleled insurance coverage, a road assistance program and access to golf courses across the country.

Amit Kumar, Head – Retail Liabilities, IDFC FIRST Bank, said, “Metal cards are preferred by customers given their distinctive look and feel. Our FIRST Private Infinite debit card adds luxury and style to our customers’ payments experience. It is crafted to stand out fresh and aligns with the exclusivity of the FIRST Private program. As the industry’s first metal debit card, FIRST Private Infinite takes our cards portfolio to the next level of quality and excellence.”

T R Ramachandran, Group Country Manager, India and South Asia, Visa said, “At Visa, we are delighted to partner with IDFC FIRST Bank on their affluent debit proposition – the FIRST Private Metal debit card. A set of carefully curated benefits and experiences across travel, health & insurance, dining, entertainment and lifestyle, coupled with the power and promise of the Visa network and brand, is sure to resonate with affluent Indian consumers and households. We eagerly look forward to the launch and scale-up of this innovative card offering.”

IDFC FIRST Bank offers a comprehensive digital savings account solution that includes a seamless online account opening process, video KYC and a new age digital platform for mobile and netbanking with easy-to-navigate user interface. The Bank’s digital wealth management solutions are available to customers on the mobile app and netbanking platform which offer unique features such as a ‘Consolidated Investment Dashboard’.

Created in 2018 by the merger of renowned infrastructure financing institution IDFC Ltd. and leading technology NBFC, Capital First, IDFC FIRST Bank, with a balance sheet of Rs. 1,72,502 crore, has provided over 30 million loans in its combined history and serves customers in over 60,000 villages, cities and towns across the length and breadth of the country. In a short time, the Bank has expanded to 599 branches, 185 asset service centres, 720 ATMs including 99 recyclers and 630 rural business correspondent centres across the country, a next-generation net and mobile banking platform and 24/7 Customer Care services, and is incrementally growing digitally. IDFC FIRST Bank is committed to bring high-quality banking at affordable rates to India. The Bank also offers technology-enabled corporate banking solutions.



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Emkay Global, BFSI News, ET BFSI

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The recent Reserve Bank of India clarification on banks’ promoter holdings is likely to benefit IndusInd Bank, if the central bank does not have any issues related to the promoters, Emkay Global said in a report.

In IndusInd Bank, the Hinduja brothers hold a 16.5 percent stake. The increase in promoter stake will boost the bank’s financial strength, and their clients will be protected.

The RBI had recently clarified that the promoters who have recently reduced their holdings to below 26% and want to increase it back, can approach the central bank. The promoter will have a choice to bring down the promoter holding to below 26% after the initial locking period is over.

The RBI retained the norm to maintain a minimum (floor) of 40% of paid-up voting equity share capital by the promoter for the first five years, but there is no cap on the promoters’ holdings in the initial five years, Emkay highlighted. That said, the cap on the promoter’s stake over 15 years has been raised from 15% to 26%, which was implemented in the case of Kotak Mahindra Bank.

Non-promoter shareholding will be capped at 10% of the paid-up voting equity share capital of the bank for natural persons and non-financial institutions and at 15% for all categories of financial institutions, supranational institutions, public sector undertaking or government. If this is allowed, then possibly HDFC may not had to bring its stake in Bandhan to 10%, Emkay said.

In the case of invoking pledged shares of a bank, the pledgee’s voting rights will be restricted to 5% till the time the pledgee obtains permission from the RBI for the regularisation of the acquisition of these shares.

The RBI has retained non-operative financial holding company (NOFHC) as the preferred structure for all new licences to be issued for universal b anks, but it will be mandatory only in cases where the individual promoters, promoting entities or converting entities have other group entities, the report said. However, banks currently under NOFHC, such as IDFC First Bank and Bandhan Bank, may be allowed to exit such a structure if they do not have any other group entities in their fold.

The RBI has given in-principle approval to IDFC First Bank-Bandhan Bank, but IDFC will have to first divest stake in its MF/tech businesses for a reverse merger with IDFC First Bank, while Bandhan Bank is not keen on diluting the structure as of now, the report said.

Furthermore, on the relaxation of the listing norms for future small finance banks (SFBs), existing SFBs in queue, including Utkarsh, Fincare, Jana, ESAF, and even the recently-formed Unity SFB, may not get any relief. However, Unity SFB, which is a venture between BharatPe and Centrum, could have different terms, given the potential acquisition of beleaguered PMC Bank.

Small finance banks can now list within eight years from the date of commencement of operations against the earlier condition of within three years of reaching a net worth of Rs 5 billion, and against the demand for 10 years. For universal banks, the listing requirement remains the same, that is after six years of commencement of operations.



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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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IDFC First Bank leases Citibank’s erstwhile HQ tower in Mumbai’s BKC from Mindspace REIT, BFSI News, ET BFSI

Banking & Finance

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Mindspace Business Parks REIT has leased out an entire commercial building–Citibank India’s erstwhile headquarters in Mumbai’s business district Bandra-Kurla Complex (BKC)–to IDFC First Bank for a nine-year term, people aware of the development said.

K Raheja Corp and Blackstone Group-backed listed Mindspace REIT had acquired the building, The Square BKC, a marquee structure, from Citibank in 2019 for around Rs 400 crore.

IDFC First Bank has leased the 10-storey property spread over nearly 1.30 lakh sq ft at a monthly rental of Rs 280 per sq ft, taking the annual payout to Rs 44 crore. The agreement includes a rental rest clause with 15% escalation every three years, taking the total lease value to over Rs 450 crore over the nine-year term.

“The Square BKC (the erstwhile Citibank building) now stands fully leased,” Mindspace REIT said in its July-September earnings statement on Friday.

The deal is another sign of the recovery in office leasing, not only in peripheral but also in prime business districts following the aggressive vaccinations and the gradual return of employees to offices.

“We continue to witness strong leasing activity across our portfolio with over 2.1 million sq ft leased in the first half of this financial year,” said Vinod Rohira, CEO of Mindspace Business Parks REIT. “We remain increasingly confident of the commercial market outlook, buoyed by record tech hiring and growth trends, improved GCC prospects, vaccination coverage in our gateway cities as employees return to office. We are excited about the robust demand cycle re-emerging.”

However, he declined to elaborate on the BKC lease transaction.

ET’s email query to IDFC First Bank remained unanswered.

The REIT has recorded a robust gross leasing of 9 lakh sq ft, with an average rent of Rs 88 per sq ft a month across 11 deals concluded during the quarter. It has also concluded another build-to-suit lease of 5 lakh sq ft at Mindspace Juinagar in Mumbai Region. Over the last two quarters, it has leased 2.1 million sq ft in total.

Mindspace REIT has continued to collect over 99% of its gross contracted rentals and has reported net operating income of Rs 359.2 crore, up by 6.7% from a year ago.

The REIT has declared distribution of Rs 272.8 crore or Rs 4.60 per unit for the quarter, taking its annualised distribution yield to 6.7% on the issue price of Rs 275 per unit.

The record date for the distribution is November 18, payment of the distribution will be processed on or before November 27.

The REIT has raised around Rs 400 crore through issue of debentures at project level at 6.1%, helping the reduction in average cost of debt further by 15 basis points to 6.9% as on September-end.

The July-September quarter has already witnessed a sharp uptick in absorption of office spaces, led by leasing activity in the information technology and IT-enabled services sectors.

Lease transactions for large office spaces are being registered across key property markets, led by steady economic recovery, an aggressive vaccination drive across the country, and increasing number of corporates planning return of their workforce to office.

The IT, ITeS sectors are among the prime drivers of overall leasing activity in the top cities, and bulk hiring by these firms is expected to influence the demand for large quality office spaces.



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IDFC First Bank Q2 net profit surges 50%

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Private sector lender IDFC First Bank reported a near 50 per cent jump in its standalone net profit in the second quarter of this fiscal year, driven by growth in core operating income and lower net credit losses. The bank’s standalone net profit rose by 49.6 per cent to ₹152 crore in the second quarter of the fiscal from ₹101 crore in the second quarter of last fiscal.

Net interest income grew by 27 per cent year on year to ₹2,272 crore in the quarter ended September 30, up from ₹1,784 crore in the second quarter of last fiscal. Net interest margin improved to 5.76 per cent for the second quarter of the fiscal from 4.91 per cent as on September 30, 2020, and 5.51 per cent as on June 30, 2021.

“The NIM expansion was primarily driven by the gradual improvement in the cost of funds, mainly the cost of deposits,” IDFC First Bank said in a statement on Saturday.

Also see: IOB stays on strong profit curve

Other income surged to ₹779.70 crore for the second quarter of the fiscal from ₹166 crore a year ago.

The bank said fee income growth was contributed to primarily by the fees related to retail loans, transaction fees, distribution and wealth management fees.

Provisions double

Provisions however, more than doubled and increased by 122.5 per cent to ₹474.94 crore in the July to September 2021 quarter from ₹213.4 crore a year ago. But on a sequential basis, they dropped sharply from ₹1872.3 crore in the firs quarter of the current fiscal.

“The bank utilised ₹560 crore of Covid provision in the second quarter of the fiscal and carrying forward ₹165 crore of provision for future. The bank expects the net credit loss for the retail loan segment to normalise from here on assuming there is no further disruption in the economy due to a new wave of Covid-19,” IDFC First Bank said.

Asset quality remained under pressure although non performing loans declined on a sequential basis.

NPAs fall sequentially

Gross non performing assets rose to ₹4,485.52 crore as on September 30, 2021, amounting to 4.27 per cent of gross advances. This was lower than 4.61 per cent as on June 30, 2021 but significantly higher than 1.62 per cent a year ago.

Net NPAs also rose to 2.09 per cent of net advances as on September 30, 2021 compared to 0.43 per cent a year ago. But it was lower than 2.32 per cent at the end of the first quarter.

The bank said the impact of the second wave of the pandemic is gradually diminishing and this improvement is showing in the improvement in asset quality.

One infrastructure loan (Mumbai Toll Road account) had become NPA during the last quarter.

Also see: Automobile sales in the slow lane

On the overall bank level but for this one infrastructure account, which it hopes to cure in due course, the GNPA and NNPA would have been 3.47 per cent and 1.42 per cent respectively as of September 30, 2021.

Restructuring for the overall portfolio stood at 2.9 per cent of the total funded assets as of September 30, 2021.

V Vaidyanathan, Managing Director and CEO, IDFC First Bank, said, “We are seeing strong revival of the economy and strong demand for home loans, loan against property, MSME and consumer loans. The retail loan book is now highly diversified across over 10 lines of business and millions of customers.”

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Bank, NBFCs report spurt in Q2 advances as lending recovery picks up, BFSI News, ET BFSI

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Most banks and non-banking finance companies reported a jump in disbursal of advances in the quarter ended September in a sign that credit uptake is rising.

HDFC Bank saw its advances book grow by around 15.4% year on year at the end of the September quarter, proforma numbers released by the private sector lender showed. Its total loans aggregated to Rs 11.98 lakh crore at the end of September, up 4.4% sequentially. Its total loans were at Rs 10.38 lakh crore at the end of September 2020.

As per the bank’s internal business classification, retail loans during the September quarter grew by around 13% year on year and 5.5% over June quarter. Commercial and rural banking loans grew by around 27.5% y-o-y while other wholesale loans grew by around 6%.

Mortgage lender HDFC assigned loans amounting to Rs 7,132 crore at the end of the September quarter versus Rs 3,026 crore a year earlier. It sold loans

worth Rs 27,199 crore in the preceding 12 months versus Rs 14,138 crore in the previous year, regulatory filings show.

Private sector lender

IndusInd Bank

IndusInd Bank reported better-than-expected credit growth of 10% with total loans at Rs 2.2 lakh crore at the end of the September quarter, preliminary numbers filed with stock exchanges showed.

IDFC First Bank posted 9.75% growth in advances at Rs 1,17,243 crore for the second quarter ended September.

Private lender Yes Bank posted a 3.6% rise in its advances to Rs 1.72 lakh crore, though retail disbursements grew at a faster rate and grew by 126.6% over last

year to Rs 8531 crore at the end of the September quarter as against Rs 3764 crore a year ago.

NBFCs

Leading non-bank lender Bajaj Finance reported it had booked 6.3 million new loans at the end of the September quarter versus 3.6 million a year ago. It’s

assets under management (AUM) stood at Rs 1.66 lakh crore for the quarter under review as against Rs 1.37 lakh crore a year earlier.

Non-bank lender Mahindra & Mahindra Financial Services posted a 60% year-on-year growth in disbursements at Rs 6,450 crore at the end of the September

quarter. With further improvement in mobility during September, the collection efficiency for the NBFC was reported at 100% for September 2021.

Subject to improvement in auto supply chain, the company is hopeful of a good Q3 FY22 ahead, supported by festival season and harvest cash flow.” M&M Finance said.

AU Small Finance Bank

AU Small Finance Bank Ltd’s total deposits were up 45% on year at Rs 39,030 crore as of September 30, according to provisional data from the bank. Gross advances rose 32% on year to Rs 36,405 crore. Of the total gross advances, the small finance bank restructured 800 accounts worth Rs 800 crore in July-September. Disbursements rose 57% on year and 171% on quarter to Rs 5135 crore. It also made disbursements worth 530 mln rupees under the Reserve Bank of India’s targeted long-term repo operations.

RBL Bank’s total deposits rose 17% on year as of Sep 30, according to provisional data from the bank. Deposits stood at 755.9 bln rupees, up 1% on quarter. The bank’s gross advances rose 1% on year to Rs 58,046 crore as on September 30. Of the gross advances, 55% comprised retail advances while the remaining 45% is in the wholesale category.



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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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RBI approves re-appointment of Vaidyanathan as IDFC FIRST Bank chief

Banking & Finance

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The Reserve Bank of India (RBI) has granted its approval for the re-appointment of V. Vaidyanathan as the Managing Director & Chief Executive Officer of IDFC FIRST Bank.

The Bank, in a regulatory filing, said Vaidyanathan’s re-appointment as MD & CEO is for three years, effective from December 19, 2021.

Further, the aforesaid re-appointment is subject to shareholders’ approval at the ensuing Annual General Meeting of the Bank scheduled to be held on September 15, 2021.

Vaidyanathan took over as the MD & CEO of IDFC FIRST Bank in December 2018 after Capital First and IDFC Bank merger.

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Indian banks facilitate cryptocurrency transactions amid a fresh boom, BFSI News, ET BFSI

Banking & Finance

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As Indians flock to the cryptocurrency market with renewed enthusiasm, banks are joining the party.

They are again allowing the purchase of Bitcoin and other cryptocurrencies through their channels, easing curbs that they had imposed on such services.

Lenders including HDFC Bank, ICICI Bank and Axis Bank are allowing transactions in virtual currencies through the UPI platform.

Crypto exchange WazirX has listed the net banking facilities of Punjab National Bank, Union Bank of India, IDBI, IDFC First Bank, Federal Bank and Deutsche Bank to make payments for crypto purchases.

According to crypto exchanges, more banks are now warming up to them and several channels are available for customers to buy crypto assets.

The change in stance happened after the Reserve Bank of India told banks that they no longer can use the regulator’s 2018 circular prohibiting dealings in virtual currencies, as the direction has been struck down by the Supreme Court, said people in the know.

Banks have also reopened accounts with crypto exchanges after conducting due diligence, in absence of any specific regulation. This comes at a time when Indians are flocking back to cryptocurrencies.

Reluctant banks

As early as June banks were sending official notices to many customers warning them of curbs, including permanent closure of accounts.

Lenders were 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.

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

A grey area

Despite the boom, cryptocurrencies are in a grey area in India, with the Reserve Bank hostile towards it and the government unsure about its prospects.

There is no legislation or regulatory code yet to govern the crypto ecosystem, leading to confusion among customers, businesses and financial institutions providing banking services.

In 2018, the Reserve Bank of India barred financial institutions from supporting crypto transactions, which the Supreme Court overturned in 2020. The government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.

Last month, the RBI asked banks not to cite its 2018 circular and clarified that banks can do their own KYC for crypto clients. With this, banks are now reassessing the situation, but several banks currently lack the technical expertise to make a supervisory assessment on these transactions.



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Indian banks facilitate cryptocurrency transactions amid a fresh boom, BFSI News, ET BFSI

Personal Finance

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As Indians flock to the cryptocurrency market with renewed enthusiasm, banks are joining the party.

They are again allowing the purchase of Bitcoin and other cryptocurrencies through their channels, easing curbs that they had imposed on such services.

Lenders including HDFC Bank, ICICI Bank and Axis Bank are allowing transactions in virtual currencies through the UPI platform.

Crypto exchange WazirX has listed the net banking facilities of Punjab National Bank, Union Bank of India, IDBI, IDFC First Bank, Federal Bank and Deutsche Bank to make payments for crypto purchases.

According to crypto exchanges, more banks are now warming up to them and several channels are available for customers to buy crypto assets.

The change in stance happened after the Reserve Bank of India told banks that they no longer can use the regulator’s 2018 circular prohibiting dealings in virtual currencies, as the direction has been struck down by the Supreme Court, said people in the know.

Banks have also reopened accounts with crypto exchanges after conducting due diligence, in absence of any specific regulation. This comes at a time when Indians are flocking back to cryptocurrencies.

Reluctant banks

As early as June banks were sending official notices to many customers warning them of curbs, including permanent closure of accounts.

Lenders were 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.

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

A grey area

Despite the boom, cryptocurrencies are in a grey area in India, with the Reserve Bank hostile towards it and the government unsure about its prospects.

There is no legislation or regulatory code yet to govern the crypto ecosystem, leading to confusion among customers, businesses and financial institutions providing banking services.

In 2018, the Reserve Bank of India barred financial institutions from supporting crypto transactions, which the Supreme Court overturned in 2020. The government has circulated a draft bill outlawing all cryptocurrency activities, which has been under discussion since 2019.

Last month, the RBI asked banks not to cite its 2018 circular and clarified that banks can do their own KYC for crypto clients. With this, banks are now reassessing the situation, but several banks currently lack the technical expertise to make a supervisory assessment on these transactions.



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