IndusInd Bank on Tuesday said it has been empanelled by the Reserve Bank of India (RBI) to act as an ‘Agency Bank‘ to facilitate transactions related to government businesses. It will strengthen the bank’s presence within the government domain, IndusInd Bank said.
The announcement comes close on the heels of a recent RBI guideline that authorises scheduled private sector banks as agency banks of the regulator for the conduct of government business.
With this, IndusInd Bank joins ranks with few other private banks of the country to carry out general banking business on behalf of the central and state government, while also offering customers – the convenience of undertaking routine financial transactions through its banking platform, the bank said in a release.
“We are honoured to be appointed by the RBI to facilitate transactions pertaining to all kinds of government-led businesses.
“Given IndusInd Bank’s exclusive suite of services comprising innovative and cost-effective solutions, coupled with our state-of-the-art technology platforms, we are confident of being a ‘partner of choice’ for the government, its enterprises, as well as all other stakeholders in fulfilling their financial aspirations in the most seamless manner,” said Soumitra Sen, Head – Consumer Bank, IndusInd Bank.
As an empanelled ‘Agency Bank’, IndusInd Bank can now be authorised to handle transactions pertaining to revenue receipts under CBDT, CCBIC and GST on behalf of the state/central government.
It can also make transactions for pension payments on behalf of state/central government, work related to Small Savings Schemes (SSS), collection of stamp duty charges, and collection of stamp duty from citizens for the franking of documents.
Besides, it can also undertake the collection of state taxes such as professional tax, VAT, state excise etc. on behalf of various state governments, IndusInd Bank said.
New Delhi, Jul 27 () Private sector lender IndusInd Bank on Tuesday reported doubling of its consolidated net profit to Rs 1,016.11 crore in the June 2021 quarter, aided by healthy growth in retail loans and lower NPA provisioning. The bank had posted a net profit of Rs 510.39 crore in the corresponding quarter of the previous financial year.
Its total income during April-June 2021 rose to Rs 9,362.76 crore from Rs 8,682.17 crore in the year-ago period, according to a regulatory filing by IndusInd Bank.
Interest income was up at Rs 7,574.70 crore, against Rs 7,161.73 crore a year ago.
Income from retail banking rose nearly 22 per cent to Rs 5,685.53 crore in the June 2021 quarter, from Rs 4,674.06 crore in the year-ago quarter.
The bank’s asset quality showed little impairment on a gross level, as the non-performing assets (NPAs) rose slightly to 2.88 per cent of the gross advances as of June 2021, as against 2.53 per cent by the year-ago period.
Net NPAs or bad loans, however, came down to 0.84 per cent from 0.86 per cent a year ago.
Provisioning for bad loans and contingencies for the reported quarter came down to Rs 1,844.02 crore, from the Rs 2,258.88 crore parked aside for same quarter of 2020-21.
On a standalone basis, the lender’s net profit jumped over two times to Rs 974.95 crore in the June 2021 quarter, compared with Rs 460.64 crore in the year-ago period.
Income rose to Rs 9,355.77 crore, from Rs 8,680.92 crore a year ago, the bank said.
The bank’s shares on Tuesday closed 0.58 per cent lower at Rs 975.65 apiece on the BSE. KPM HRS hrs
Private sector lender IndusInd Bank’s standalone net profit more than doubled and surged by 111.7 per cent in the first quarter of 2021-22 led by lower provisions and robust growth in net interest income.
For the quarter ended June 30, 2021, the lender reported standalone net profit of ₹ 974.95 crore as compared to ₹ 460.64 crore in the corresponding quarter of last fiscal.
Total income grew by 7.8 per cent in the first quarter of the fiscal to ₹ 9,355.77 crore as against ₹ 8,680.92 crore a year ago.
Net interest income also increased by a similar 7.7 per cent to ₹3,563.71 crore in the April to June 2021 quarter from ₹ 3,309.19 crore in the same period last fiscal.
Net interest margin was lower at 4.06 per cent as on June 30, 2021 from 4.28 per cent a year ago. In a statement on Tuesday, the bank said this was due to lower credit offtake and surplus liquidity placed under repo with RBI
Other income jumped up by 17.2 per cent on a year-on-year basis to ₹ 1,781.07 crore during the quarter.
The bank’s provisions declined by 18.4 per cent to ₹ 1,844.02 crore in the first quarter of the fiscal from ₹ 2,258.88 crore a year ago.
However, asset quality deteriorated amidst the second wave of the Covid-19 pandemic.
Gross non-performing assets rose to ₹ 6,185.76 crore or 2.88 per cent of gross advances as on June 30, 2021 from 2.53 per cent a year ago and 2.67 per cent as on March 31, 2021.
Net NPAs were at almost the same level at 0.84 per cent of net advances as on June 30, 2021 from 0.86 per cent a year ago. However, on a sequential basis it was much higher compared to 0.69 per cent as on March 31, 2021.
Restructured book was 2.7 per cent as on June 30, 2021.
Private sector lender IndusInd Bank plans to raise up to ₹30,000 crore through debt and equity.
“Raising funds through debt securities or equity instruments or convertible debt securities in any permitted mode…for an aggregate amount not exceeding ₹30,000 crore…,” it said in a stock exchange filing on Saturday.
The permitted modes of fundraising include through Qualified Institutions Placement, American Depository Receipts, Global Depository Receipts programme, or combinations on a private placement basis thereof as may be decided by the board.
The bank will be raising ₹30,000 crore or its equivalent amount in such foreign currencies as may be necessary, subject to approval of the shareholders of the bank and receipt of other governmental / regulatory / statutory approvals, as per the filing.
The proposal was cleared by the bank’s board in its meeting on July 24. It will also seek approval from shareholders for this.
New Delhi: Tata Motors in collaboration with IndusInd Bank has rolled out new financing offers for its passenger vehicle customers. The offers will be available on the company’s ‘Forever Range‘ of cars Tata Altroz, Tata Nexon and Tata Harrier, the company said on Friday.
As part of this partnership, the automaker will provide a ‘Step Up’ scheme where the customers can choose and buy from its range of passenger cars in the country, with a special low EMI option scheme for the first 3-6 months.
Ramesh Dorairajan, head network management and trade finance, passenger vehicle business unit, said, “The recent Covid-19 upsurge has impacted everyone, and to help our passenger car family in these challenging moments, we are delighted to be partnering with IndusInd Bank to roll out special finance schemes. This is in alignment with our constant effort to fasttrack the availability of safe personal mobility solutions to individuals and families at pocket-friendly rates.”
T A Rajagoppalan, executive vice president, passenger vehicles, IndusInd Bank, said, “These innovative financial schemes aim at not only reducing the burden on the customer’s wallet during these tough times but also allow them to prioritise commuting in a hygienic, safe and comfortable environment. We take pride in joining hands with Tata Motors to roll out these schemes.”
Under the ‘Step Up’ scheme, customers can now avail EMI options lowered by 60%, starting from INR 834 per lakh per month, depending on the scheme and the products at an attractive interest rate.
As per the scheme, the EMI payments will remain lower for 3-6 months depending on the convenience of the buyer. This will be provided with non-income proof funding and flexible tenor options ranging from 1 to 7 years, depending on the product and variant, Tata Motors said in a media release.
The banks were also called out on not adhering to restrictions and provisions on loans as well as advances and reporting to the central database on large exposures.
The Reserve Bank of India (RBI) has penalised 14 banks including State Bank of India, IndusInd Bank, Bandhan Bank and Bank of Baroda for non-compliance of various lending norms. RBI found that these lenders were non-compliant with certain provisions of directions that the regulator had issued on lending to Non-Banking Financial Companies (NBFCs). The banks were also called out on not adhering to restrictions and provisions on loans as well as advances and reporting to the central database on large exposures.
In view of this, RBI levied a penalty of Rs 2 crore on Bank of Baroda. For Central Bank of India, IndusInd Bank, Credit Suisse AG, Bandhan Bank, Indian Bank, Bank of Maharashtra, Utkarsh Small Finance Bank, Karur Vysya Bank, Karnataka Bank, South Indian Bank, Punjab and Sind Bank, and Jammu & Kashmir Bank, the regulator has levied a fine of Rs 1 crore. State Bank of India, on the other hand will have to pay a penalty of Rs 50 lakh.
“A scrutiny in the accounts of the companies of a Group was carried out by RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by RBI and/or contravened provisions of the Banking Regulation Act, 1949,” RBI said in a statement. The regulator said it had issued notices to these banks seeking show cause as to why RBI should not impose penalty on them for non-compliance.
After examining the replies received from the banks along with oral submissions made in the personal hearings, RBI concluded the imposition of monetary penalty on these banks.
“The penalties have been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) and 51 (1), of the Banking Regulation Act, 1949, as applicable. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers,” RBI added.
IndusInd Bank today, launched the ‘IndusEasyCredit’, a fully digital end to end platform leveraging India’s public digital infrastructure- ‘Indiastack’ to offer personal loans and credit cards in a paperless and cashless manner.
The stack leverages more than 35 interfaces to digitally verify KYC and employment information as well as analyse bank statements. It then uses advanced analytics and machine learning based models to assess eligibility in real time. Post this, the customer can conduct Video KYC and get the loan disbursed into his or her account after executing the agreement digitally.
“Over the past few months, we have been constantly working towards creating a comprehensive solution that enables customers with easy access to credit from the comfort and safety of their homes. ‘IndusEasyCredit’ is a testament to that effort which provides customers with the flexibility to avail a personal loan or a credit card on a single platform, in a completely seamless, paperless, and digital manner.” said Charu Mathur, Chief Digital Officer & Head-Business Strategy, IndusInd Bank in a statement.
Existing as well as non-IndusInd Bank customers can avail an instant personal loan by following the below mentioned steps:
Complete e-KYC and provide basic details to check eligibility (only applicable for non-IndusInd Bank customers)
Select the amount from the pre-approved loan offer as required. Accept the auto populated interest rate, processing fee and EMI amount.
Complete Video KYC (only applicable for non-IndusInd Bank customers).
Authenticate the request for enabling instant money credit into their account, after digitally signing the agreement.
The money gets transferred to the customer’s account instantly on completion of this procedure.
In order to avail credit card, customers can simply follow the below steps:
Complete e-KYC and provide basic details to check eligibility (only applicable for non-IndusInd Bank customers).
Customers will get the pre-approved offer.
They can then select the desired IndusInd Bank Credit Card product.
Complete Video KYC (only applicable for non-IndusInd customers).
On completion of Video KYC, the said card is dispatched to the customer.
Currently, customers can only apply for the ‘IndusEasyCredit’ facility through the Bank’s website. It will also be made available shortly on IndusMobile, the Bank’s mobile banking application, according to the statement.
Private sector lender IndusInd Bank on Thursday announced a comprehensive digital lending platform where its existing customers as well as customers of other banks can avail personal loans or credit cards.
“IndusEasyCredit offers a fully digital end to end process that leverages the power of India’s public digital infrastructure – Indiastack to offer personal loans and credit cards in a paperless, presence less and cashless manner,” the bank said in a statement.
The stack leverages more than 35 interfaces to digitally verify KYC and employment information as well as analyse bank statements, it further said, adding that it then leverages advanced analytics and machine learning based models to assess eligibility in real time.
The customer can then conduct Video KYC and get the loan disbursed into his or her account after executing the agreement digitally; without having to visit a branch or do any lengthy documentation. The stack will also be leveraged by various partners of the bank.
“IndusEasyCredit provides customers with the flexibility to avail a personal loan or a credit card on a single platform, in a completely seamless, paperless, and digital manner. We believe that this proposition will offer customers a differentiated banking experience,” said Charu Mathur, Chief Digital Officer and Head-Business Strategy, IndusInd Bank.
Digital payments platform Google Pay has announced further expansion in the footprint of bank partners offering cards tokenisation on the Google Pay app.
Tokenisation is a feature that enables users to make debit or credit card payments through a secure digital token attached to their phone without having to physically share their credit or debit card details.
The platform had earlier rolled out tokenisation with Kotak Mahindra Bank, SBI Cards and Axis Bank. It has now added debit cards by SBI, IndusInd Bank and Federal Bank and Credit cards by IndusInd Bank and HSBC India to its slate.
The feature also works with online merchants. With tokenisation, Google Pay users can use Near-field communication (NFC) capable devices/phones to make contactless payments at over 2.5 million Visa merchant locations. They can scan and pay at more than 1.5 million Bharat QR enabled merchants as well as pay bills and recharges from within their Google Pay app using their credit card, Google said.
Sajith Sivanandan, Business Head- Google Pay and NBU – APAC said, “We are committed to offer the most secure payments experience to our growing base of users, and tokenisation helps to replace sensitive data such as credit and debit card numbers with tokens, eliminating any chances of fraud.”
Further expansion
“We are hopeful that the tokenisation feature will further encourage users to transact securely and safely in the current times and expand merchant transactions both online and offline. The addition of SBI and Federal debit cards, IndusInd Bank debit and credit cards and HSBC credit cards helps extend this offering to millions of card users on the Visa network. We are working closely with other banking partners to further expand the adoption of card-based payments with tokenisation in India,” added Sivanandan.
In order to enable the tap and pay feature using the smartphone phone, users will have to do a one-time set up by entering their card details and follow it by entering the OTP they get from the bank to add their card to the Google Pay app.
Once the registration is done, users can use the feature to make payments at NFC-enabled terminals. Cards can also be used to make purchases at large online merchants such as Myntra, Yatra, Dunzo and others.
Maintaining the cost of acquiring customers digitally is not easy as multiple banks & Fintechs are targeting the same set of customer base segment as compared to the physical branch led model where the costs are fixed.
Organisations acquiring customers digitally have often been at the mercy of aggregators and big search engines and so is the case similar with banks trying to funnel in customers through digital marketing and other platforms.
Ritesh Saxena, Head – Direct Banking at IndusInd Bank in a conversation with ETBFSI talks about the strategy at IndusInd Bank with digital acquisition, how digital marketing plays a role, important metrics and the partnership model. Edited Excerpts:
Ritesh Saxena, Head – Direct Banking, IndusInd Bank
Q. What is the strategy for digital business at IndusInd Bank?
The banking service is digital in nature with cash being the only physical aspect. To a large extent digital business in banking is evolving as compared to 3-4 years back when a lot of digital enablement was in nature of servicing only and not a way of doing business.
As a challenger bank, we had to be aggressive. Digital business evolved in two stages, one organic and inorganic – website, social media presence, ATMs which are web-enabled, mobile applications are now transformed into customer acquisition channels whereas previously functioned more from servicing point. Regulations and public infrastructure like Aadhar has helped a lot, we brought onboarding platforms on our web to acquire for both our asset & deposit customers.
KYC is just one part of onboarding, the customer does not give any business till he transacts or passes credit worthiness test. Getting these journeys completely digital, frictionless and seamless is important to ensure prospective customers don’t drop off.
Investments have gone beyond technology infrastructure, like – analytics, evolving credit models, partnerships with payment service providers. These internal and external parts come together to funnel the customer in and service them. The loss in physical onboarding through branches was off-set by digital acquisition channel through digital marketing with seamless onboarding to ensure there was no blip to business.
Q. How is digital marketing leveraged for direct digital business?Digital marketing is the other area of evolution which is core to digital business. While we create the digital platforms, we need to have a digital plan to work with platforms like Google and Facebook to get the right economics of acquiring customers. All Fintechs, start-ups have realised that creating a product, simple user journey is perhaps the easier part given all the tech evolution is happening, but getting the customer economics in (cost of customer acquisition) which does not kill you is tough. Reality is these Big Tech platforms don’t let you do digital marketing in a cost-friendly manner. That is the sad story which a lot of start-ups face and burn a lot of cash.
We banks don’t have investors (VC) funds to burn to get customers as it’s a P&L involved decision of optimising your cost of acquisition through various digital marketing initiatives like SEO, Redirecting advertisements and a lot of other initiatives.
Getting a customer and is he really worth following as few might funnel but not all are worth following. These are things that take time to perfect and eventually get the right implemental economics.
Digital marketing led acquisition is a different ball game as physical acquisition costs are fixed and given. Also, important to note banks are eyeing for the same pie of the business on the same medium for the same customer, unit economics really matters here.
Fintechs have mono-product lines as compared to banks that have multiple products, if a customer funnels in and may not have qualified for a credit card; we can pitch him a credit card against his FD so he gets serviced by some other product.
Most customers are price sensitive and everything is price led, it allows you to optimise the investments to get the customer by ensuring if he is not satisfied with one product you are able to get him another product and it’s a win-win.
Q. How does it work with the existing customer base?
Existing customers have been traditionally covered by RMs or through branches or contact centers for cross-sell or upgrading. The new digital platforms backed by analytics have allowed us to run it centrally without the need of assisted channels as a start point.
The bank has invested in a very Deep Artificial Intelligence led engine which runs across products and client databases from different segments like deposit to credit card to vehicle finance. I have that same universe within the bank. All we need is to create an ability similar to what aggregators (like Paisabazaar, Bank Bazaar) created for the open market.
A lot of good work and actual business has happened on the asset cross sell which is personal loan and credit card offerings to customers who keep their salary account or deposit account with us. More than 50% of our retail lending, deposit and even wealth business happens through digital channels and not just through open market but through a lot of analytics led, direct to customer, app based, email based and if required even tele-assisted follow-up for closure and a lot of these businesses have moved out of branches.
This is the next version of retail banking in India, if IndusInd Bank has 2000 branches in India which do an X business, for it to go 2X do we need 2X branches? or can I move all of the next X business to digital platforms without having to put a brick and mortar branch. That’s essentially the go-to. Physical channels will continue but a lot of the assisted business is moving to the sky RM models (digital).
Q. How are the metrics around digital marketing?
We doubled and tripled the investments in the digital marketing front across products and services not because we wanted to offset the dip in branch led business but because more customers were reaching out through these digital platforms. Pull-based business opportunities like health insurance were also in demand; a lot of digital marketing initiatives got fast tracked.
Video KYC changed the economics and at a fraction of physical cost we can do the physical KYC and do multiple business with him or would’ve been only one business of deposit before video-KYC where the customer wasn’t verified face-to-face.
On vectors being measured, earlier things were not straight through; most of our digital marketing arrangement partners were on the basis of cost per lead which captured mobile number either paid on per lead or impressions. Now the straight through journey changed the equation on this, earlier you were at the mercy of the aggregators and what would be the quality of the lead as banks make money on conversion of that lead.
The equation has moved from paying per lead to paying per converted customer and some of those have helped focus to target better and ensure that the same lead is not going to dozens of banks and see sub-optimal conversion.
Digital business is not only about aggregator arrangements it’s also on the payment side where merchant aggregators which are country wide operating in the payment gateway space and non-digital merchant led aggregators like old-age Pine Labs and similar players and how they’ve metamorphosed and deeply integrated with banks through APIs.
These payment partners get merchant customers to bank equivalent to current account journeys which have been created with more control as entity verification is bigger science than individual verification. For entities, you’ve to check their registrations, office, etc. all these risk parameters have been added to the onboarding mechanism and we have been among the first ones to launch a digital current account onboarding.
Financial Express is now on Telegram.