Both the companies caused fraud in the nature of ‘diversion of funds’.
In the case of Capricorn Food Products, the amount involved is of Rs 22.36 crore, while in the case of Raj Events and Entertainment, the fraud amount involved is of Rs 10.97 crore.
Provision held against Capricorn Food as of September 30, 2021 stood at Rs 8.54 crore and of Rs 1.65 crore in the case of Raj Events and Entertainment, the bank said.
Indian Bank shares closed at Rs 142.75 apiece on BSE, down 0.94 per cent from the previous close.
Both the companies caused fraud in the nature of ‘diversion of funds’.
In the case of Capricorn Food Products, the amount involved is of Rs 22.36 crore, while in the case of Raj Events and Entertainment, the fraud amount involved is of Rs 10.97 crore.
Provision held against Capricorn Food as of September 30, 2021 stood at Rs 8.54 crore and of Rs 1.65 crore in the case of Raj Events and Entertainment, the bank said.
Indian Bank shares closed at Rs 142.75 apiece on BSE, down 0.94 per cent from the previous close.
New Delhi, The Central Bureau of Investigation has registered a case against seven accused, including private firms, for perpetrating a fraud at Punjab National Bank (PNB) and Allahabad Bank in credit facilities and term loans to the tune of nearly Rs 73 crore during 2013.
The accused were identified as S.R. Alcobev Pvt. Ltd, New Industrial Estate, Jagatpur, Cuttack, its Managing Director Ranjan Kumar Padhi and Director Saina Kar; Naina Devi Suppliers Pvt. Ltd, Sainagoue Street, Kolkata, West Bengal (Corporate Guarantor), Chandraghanta Iron and Steel Traders Pvt. Ltd., Shyam Bazar Street, Kolkata, West Bengal (Corporate Guarantor), Brewforce Technologies, East Patel Nagar, New Delhi or Dehradun, Uttarakhand (Supplier) and a civil contractor named Sukanta Kumar Lenka, a resident of Cuttack.
According to the CBI, there is involvement of unknown public servants of Punjab National Bank, among others.
“The accused committed a fraud at Punjab National Bank, main branch, Buxi Bazar, Cuttack and Allahabad Bank, Bhubaneswar branch, in a matter of credit facilities or term loans to the tune of around Rs 73 crore (Rs 40 crore by PNB and Rs 33 crore by Indian Bank, formerly Allahabad Bank) during 2013,” the probe agency said in a statement.
After disbursal of the loan proceeds, the borrowers and guarantors allegedly violated the terms and conditions of the sanction and they neither procured the machineries nor deposited the instalments in time and the account turned into a non-performing asset (NPA).
It was further alleged that the accused, including promoters, directors, guarantors and suppliers, had misappropriated and diverted the loan proceeds with the ulterior motive to defraud the banks to the tune of nearly Rs 140.48 crore (principal amount plus interest as on September 30, 2021).
The CBI conducted searches at the premises of the accused situated at Cuttack (Odisha) and Dehradun (Uttarakhand).
CARE Ratings has revised the ratings of AT I Bonds of four public sector banks including Canara Bank, Indian Bank, Punjab National Bank and Union Bank of India. It considered the strengthening in the overall credit profile of the banks including improvement in capital cushions over the minimum regulatory requirement, improvement in both profitabilities as well as the distributable reserves position.
While rating instruments are issued by public sector banks (PSB), CARE Ratings assigns high weightage to support from the Government of India (GoI) due to its majority shareholding and the systemic importance of these banks in the Indian financial system.
Considering the significant size and financial franchise of the banks, a default by a PSB would have material economic consequences for the government as well as regulators, hence, the importance of PSBs for GOI and the economy as a whole cannot be undermined. Additional Tier I (AT I) Bonds are perpetual debt instruments that banks are allowed to raise under the Basel III capital framework and form a part of Tier I capital for banks. These instruments have several unique features, which make them very different from other types of debt instruments and provide them equity.
The issuing bank has full discretion over coupon payments at all times on these instruments. Therefore, if a bank does not have sufficient distributable reserves to service the coupon on AT I Bonds, it may not pay the coupon. These bonds also have loss-absorption features through conversion/writedown/ write-off on breach of pre-specified trigger on capitalisation requirement or at the point of non-viability (PONV) which may be decided by the Reserve Bank of India (RBI).
As per CARE Ratings’ criteria for rating of hybrid instruments issued by banks, CARE Ratings has been notching down the AT I Bonds issued by the banks by one to several notches below the Tier II Bonds rating depending on the expected adequacy of eligible reserves, cushion over minimum regulatory capital and other credit risk assessment parameters of the individual bank to factor in the additional risk in these instruments on account of several unique features.
In the last few years, PSBs have received significant government as well as regulatory support. GOI has initiated consolidation of the sector by amalgamation of relatively weaker and smaller banks into anchor banks which have gained significant scale increasing their economic and systemic importance and has further recapitalised these banks.
“With the strengthening of the resolution of NPAs under the Insolvency and Bankruptcy Code (IBC) process, the banks have seen recoveries in some of the large NPAs. The banks also have made higher provisioning on bad assets and additional provisioning in anticipation of expected losses due to Covid-19 which has increased the provision coverage ratio (PCR) and provided strength to the balance sheets of these banks,” the rating agency said.
“Further, instances of GOI and regulatory support by way of broadening of the definition of distributable reserves to include more categories of reserves as distributable reserves and allowing accumulated losses to be set-off against the share premium account which has increased the ability of PSBs to service the coupons of AT I Bonds, reiterate that the stance to extend support even to hybrid instruments. PSBs are expected to receive capital support well in advance so that the coupon payment trigger is not breached in future,” it added.
The government is expected soon to clear a list of independent directors to be appointed on various public sector banks and financial institutions to meet regulatory norms of corporate governance. There have been vacancies at the independent director level across the public sector space, leading to regulatory non-compliance, sources said.
A list of eligible persons to be appointed as independent directors has gone to the Prime Minister’s Office and it will take a final call soon, the sources said.
Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi makes all high-level appointments, including that of independent directors.
As per the Companies Act 2013, every listed public company shall have at least one-third of the total number of directors as independent directors.
Since many listed public sector banks (PSBs) and some financial institutions (FIs) are short of the mandated number of directors, it is in violation of the Companies Act as well as listing norms of market regulator Securities and Exchange Board of India, the sources said.
Except for State Bank of India (SBI) and Bank of Baroda, the position of chairman in most of the state-owned banks is vacant. The posts of workman director and officer director, representing the employees and officers of the banks, respectively, have been vacant for the past 7 years.
There are 12 public sector banks, four public sector general insurance companies, and one life insurance firm. Besides, there are some specialised insurance players like Agriculture Insurance Company of India Ltd.
In addition, there are state-owned financial institutions like IFCI, IIFCL, ECGC Ltd and EXIM Bank.
The Boards of Directors of nationalised banks are guided by the provisions of Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and Nationalised Banks (Management and Miscellaneous Provisions ) Scheme, 1970. PTI DP ANZ BAL BAL
Mumbai, Mortgage financier Indiabulls Housing Finance on Thursday reported an 11 per cent dip in its net profit at Rs 286 crore in the quarter ended September due to a decline in its loan book. The lender’s profit after tax stood at Rs 323 crore in the same quarter of the previous fiscal.
Its deputy managing director Ashwini Kumar Hooda attributed the fall in profit to a 12 per cent decrease in the loan book in the second quarter of the financial year 2021-22 compared to the year-ago period.
It disbursed retail loans of Rs 325 crore in the month of September 2021 through its co-lending tie-ups, the lender said in a release.
This will scale up to Rs 500 crore of monthly disbursals by December 2021 and Rs 800 crore of monthly disbursals by March 2022, it said.
The company is on track to disburse Rs 1,000 crore of retail loans through co-lending in the third quarter of the financial year 2021-22. It has a total of seven co-lending partners- HDFC Ltd., Central Bank of India, Yes Bank, RBL Bank, Canara Bank, Punjab &Sind Bank, and Indian Bank.
Total loans disbursed as of September 30, 2021, under the Emergency Credit Line Guarantee Scheme (ECLGS) stood at Rs 176 crore, amounting to only 0.27 per cent of the loan book.
Gross NPAs have stood to 2.69 per cent in the second quarter of the financial year 2021-22 from 2.21 per cent in the previous quarter of the year-ago period.
“Balance sheet has been strengthened by shoring up provisions on the balance sheet to Rs 3,153 crore, which is 4x times of the regulatory requirement and equivalent to a healthy 4.9 per cent of our loan book and 152 per cent of Gross NPAs,” the release said.
Stage 3 provision coverage ratio stood at 43 per cent of gross NPAs (Non-performing assets).
The lender restructured loans of Rs 96.7 core, equivalent to 0.15 per cent of its loan book, under the Reserve Bank of India’s Restructuring Frameworks 1.0 and 2.0 combined.
In H1 of the financial year 2021-22, it has raised monies of Rs 12,186 crore across instruments and tenors. The company also raised Rs 792 crore through NCDs (non convertible debentures) in September 2021.
Hooda said the lender is looking to raise around Rs 10,000 crore through bank borrowings and NCDs during the second half of the current financial year.
The company’s scrip closed at Rs 237 apiece, down 3.42 per cent on BSE. PTI HV SHW SHW
Public sector Indian Bank on Tuesday said it has launched the Video KYC (know your customer) facility, which allows an applicant to open an account from anywhere by incorporating its Video-Based Customer Identification Process (VCIP) technology, on its web-based platforms. To begin with, Indian Bank, in a statement said the initiative would dispense with the need for a personal visit to any branch of the bank to complete the physical verification process in place, currently.
The Video KYC facility, developed in conjunction with Gieom Business Solutions, further simplifies the subsequent steps and would deliver the cheque book and ATM card to the registered address of a customer.
Customers can proceed to deposit the minimum balance through offline or online route and transact seamlessly using the ATM card and mobile banking after completing the initiation procedures.
“It is a momentous occasion for us at Indian Bank to launch our Video KYC facility that will be using the latest VCIP technology to enhance customer convenience and experience.”, the bank’s MD and CEO, Shanti Lal Jain said.
“We will extend this facility to all applicable services in a phased manner… additionally, this should help us extend our reach and significantly help us in driving financial inclusion… This is a step towards digitization,” he said.
The pre-requisites to avail the Video KYC facility are a valid mobile number, e-mail, PAN Card, Aadhaar number (linked with mobile number) and access to a computer equipped with camera and a microphone facility.
The process validates the applicant’s credentials from multiple sources like a bank representative initiated video-call, information from UIDAI, and OTP for registration of the mobile number, the statement added.
Public sector lender Indian Bank has reported ₹266.73 crore worth of fraud to the Reserve Bank of India (RBI), it said in a regulatory filing on Saturday.
The bank has reported three non-performing accounts as fraudulent.
It detailed the Non Performing Accounts (NPAs) as that have been declared as fraud and reported to RBI as per regulatory requirements, it said in the filing.
The nature of fraud for all three accounts has been specified as “Diversion of funds.”
The lender has declared M P Border Checkpost Development Co Ltd as fraud with an outstanding of ₹166.89 crore, Pune Sholapur Road Development with the amount involved totaling ₹72.76 crore and M/s SONAC with an amount of ₹27.08 crore.
The bank further specified that as on September 30, 2021, it has held provisions worth ₹12.58 crore against SONAC.
In the case of M P Border Checkpost Development Co and Pune Sholapur Road Development, the provisions held were equal to the entire exposure, respectively.
State-owned Indian Bank has classified two accounts of Srei Group, worth Rs 1,800 crore, as non-performing assets (NPAs) as on the September-ended quarter 2021. Its net profit has grown more than doubled at Rs 1,089 crore in the second quarter, as compared to Rs 412 crore in the same period last year.
Its MD & CEO Shanti Lal Jain said the profit was driven by growth in non-interest income, (other income), which grew by 26% YoY and 8% QoQ. “It stood at Rs 1,966 crore as against Rs 1,558 crore in the second quarter, on account of increase in recovery of bad debts and forex income,” Jain said.
However, the bank’s net interest income declined by 1% YoY and 2% QoQ to Rs 4,084 crore in the September quarter, 2021.
The public sector bank said we have recognized eight accounts as NPA (bad loans) worth Rs 1,900 crore, which are to be given to the National Asset Reconstruction Company (bad bank). He said “We have already made 50% of provisions for those eight accounts.”
Provisions and contingencies allocated to cover bad loans lowered to Rs 2,187 crore in this quarter, as against Rs 2,530 crore for the corresponding period last year, and Rs 2,234 crore sequentially.
Gross NPA ratio stood at 9.56% in September 2021, marginally lower from 9.89% in September, 2020. The net NPA ratio stood at 3.26%, higher from 2.96% in the same period.
The bank’s fresh slippages declined to Rs 3,952 crore compared to Rs 4,204 crore in the June quarter. Fresh slippage was high due to Corporate loans and crop loans.
On the asset quality front, the gross NPA decreased by 13 bps on q-o-q basis, net NPA reduced by 21 bps to 3.26 % from 3.47 % q-o-q. The capital adequacy ratio stood at 15.88%.
Chennai-based public sector lender Indian Bank on Thursday reported a 164% jump in its net profit at Rs 1,089 crore for the second quarter of FY22 as against Rs 412 crore in the year-ago period. Total income stood at Rs 11,440 crore as against Rs 11,616 crore, registering a marginal decline.
Shanti Lal Jain, MD & CEO, Indian Bank, told mediapersons that increase in other income and reduction in provisioning have helped the bank post profits in the second quarter.
On the asset quality front, the gross NPA decreased by 13 bps on q-o-q basis, net NPA reduced by 21 bps to 3.26 % from 3.47 % q-o-q. The capital adequacy ratio stood at 15.88%.
Jain said the fresh slippages were lesser at Rs 3, 952 crore as compared to Rs 4,204 crore in Q1FY22. Cash recovery was higher at Rs 831 crore and AUC (advance under collection) recovery was higher at Rs 775 crore compared to Q1. Fresh slippage as compared to y-o-y, was high due to corporate loans and crop loans.
Retail, agriculture and MSME (RAM) advances grew by 14%, 16% and 8%, respectively. RAM sector grew by 13%. Its contribution to domestic advances was at 60%, he said.
Net interest income (NII) declined by 1% y-o-y basis to Rs 4,084 crore from Rs 4,144 crore. However, on q-o-q sequential basis, it grew by 2%. The net interest margin (NIM) improved by 4 basis points (bps) on q-o-q sequential basis. It stood at 2.89% for Q2FY22 as against 3.06% for Q2FY21.
Non-interest income went up by 26% y-o-y and 8% q-o-q. It stood at Rs 1,966 crore as against Rs 1,558 crore in Q2FY21 on account of increase in recovery of bad debts (450%) and forex income (42%).
Advances grew by 5% to Rs 3, 85,730 crore from Rs 3,65,896 crore, primarily driven by growth in RAM sector (13%). RAM constitutes 60% of the total advances. The bank has focused on capital light growth in credit.
Total deposits grew by 10% to Rs 5, 51, 472 crore as against Rs 5, 01, 956 crore.
Current account savings account CASA deposits grew by 8% to Rs 2,25,309 crore. The share of CASA to total deposits stood at 41% while current account deposits grew by 14% and savings account deposits by 8%. Total business recorded a 8% growth, reaching the level of Rs 9, 37, 202 crore as against Rs 8,67,852 crore. On a sequential q-o-q basis, it increased by 1%.
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