Before joining Avail Finance, John was Chief Risk Officer at Avanti Financial Services, a fintech company founded by Ratan Tata and Nandan Nilekani. Prior to Avanti, he was Business Head for the micro and small business lending segment at Jana Bank.
With over 24 years of professional experience, John has held a number of senior leadership roles spanning business, risk, strategy across the banking and ITeS spectrum.
His vast experience is expected to help the company build up business volumes and increase profitability while balancing risk and reward.
Ankush Aggarwal, Founder and CEO, Avail Finance, said, “I am pleased to welcome Alex to the Avail Finance family. His experience across diverse roles will be a huge positive as Avail gets ready to scale up significantly.”
Alexander John, Chief Business Officer, Avail Finance, said, “I am thrilled to start my new role at Avail Finance alongside some really talented professionals.”
“Neo banks are the future of the finance industry and with the nature of the audience that Avail Finance services, there is massive potential of growth for the brand. Avail has become a trusted name in a very short time and I look forward to growing the business volumes and increasing profitability,” John added.
Avail Finance is aggressively building up its leadership team with a good mix across MNCs and fast paced startups. The company plans to grow its tech, product and business talent pools by 2x in 6-8 months, according to a statement.
SoftBank Group Corp. can invest $5 billion to $10 billion in India next year if it finds valuations attractive, said Rajeev Misra, chief executive officer of SoftBank Investment Advisers.
“If we find the right companies, we could invest $5 billion to $10 billion in 2022,” Misra said on Thursday at the Bloomberg India Economic Forum. “If we find the right opportunities at the right valuation.”
So far, investments in India haven’t disappointed the Japanese giant with its portfolio of startups in the country sitting atop sizable gains in valuations. SoftBank is planning to raise the stakes in India — having invested $3 billion in 2021 — just as global firms grow more wary of bets in China with tighter regulations across a number of industries hurting deals there.
India has been a bright spot for SoftBank, whose Vision Fund reported a record loss of 825.1 billion yen ($7.2 billion) for the quarter ended in September, on the decline in value of public holdings such as the Korean e-commerce giant Coupang Inc. and the Chinese ride-hailing giant Didi Global Inc. The Japanese company invested early in the Indian market, taking a stake in ride-hailing giant Ola and e-commerce leader Flipkart, before its acquisition by Walmart Inc.
MUMBAI: The share of personal loans in bank credit has for the first time overtaken overall loans to the industry sector during the second quarter of the current financial year. This has happened with loans to industry as of end-September 2021 shrinking by Rs 66,239 crore over March 2021 levels, while loans to individuals grew Rs 73,011 crore during the period.
According to data released by the Reserve Bank of India, bank credit outstanding on the last Friday of September was Rs 109.5 lakh crore. Of this, the share of loans to industry dropped to 26% (Rs 28.3 lakh crore) from 27% a year earlier. Personal loans, which were a quarter of all bank loans in September 2020, increased to 27% (Rs 29.2 lakh crore) by end-September 2021.
The drop in bank credit to the industry segment was largely due to companies in core industries deleveraging. Loans to iron and steel industries dropped by Rs 39,249 crore and loans to chemicals (which includes fertilisers, drugs and petrochemicals) shrunk by Rs 10,146 crore in the six months ended September. The few sectors which saw growth in credit were roads, ports and power. However, even this was not enough to show positive credit growth in the infrastructure segment.
Overall credit outstanding to large industry shrunk by 5% in the first six months of the fiscal. This has pulled down industrial loan growth to 2.3% despite credit to small and medium businesses rising.
In the personal segment, banks added Rs 20,096 crore of home loans to their portfolio in the last six months. They also increased their auto loan and gold loan book by Rs 3,000 crore each. Other personal loans were up by Rs 45,000 crore. Overall loans outstanding in the personal loan segment grew by Rs 73,000 crore in the six months ended September 2021. This has expanded the personal loan portfolio to Rs 29.18 lakh crore.
The data appears to indicate that banks have wrested market share from finance companies in the credit market. Typically, NBFCs borrow from banks and debt markets and lend. Bank credit to NBFCs, which is the largest component in loans to services sector, shrunk by Rs 61,124 crore in the last six months. This has resulted in the share of credit to NBFCs dropping from 9% (Rs 9.4 lakh crore) on end March 2021 to 8% (Rs 8.8 lakh crore) as of end September 2021. This has resulted in outstanding bank credit to the services sector declining by 3% since March 2021.
According to bankers, the decline in bank credit to large companies could be attributed to their deleveraging coupled with shifting to the debt market where cheaper money is available through commercial paper. Some businesses are seeing better cash realisations and do not feel the need to borrow.
In the NBFC segment, the classification of a large borrower as a non-performing asset by banks could have added to the decline in the segment. The home loan portfolio displays more consistency and does not occasionally shrink like other segments because home loans are long term and fresh disbursements have a compounding impact on the size of the portfolio.
There is also going to be one long weekend in states where banks are closed for Guru Nanak birthday on 19 November 2021.
2021 Bank Holidays in November: Banks will be closed for up to 17 days across the country in November 2021. The banks remain open on the first and third Saturdays every month and close on the second and fourth. There is also going to be one long weekend in states where banks are closed for Guru Nanak’s birthday on 19 November 2021. Except for Bengaluru, all the banks will observe a holiday on Diwali Amavasya (Laxmi Pujan). It may be noted that apart from the weekly offs, banks will not be closed for all 17 days for all states as these are state-specific holidays for different occasions.
Bank holidays in November 2021
1 November 2021: Kannada Rajyostsava/Kut 3 November 2021: Naraka Chaturdashi 4 November 2021: Diwali Amavasaya (Laxmi Pujan)/Deepavali/Kali Puja 5 November 2021: Diwali (Bali Pratipada)/Vikram Samvant New Year Day/Govardhan Pooja 6 November 2021: Bhai Duj/Chitragupt Jayanti/Laxmi Puja/Deepawali/Ningol Chakkouba 10 November 2021: Chhath Puja//Surya Pashti Dala Chhath (Sayan ardhya) 11 November 2021: Chhath Puja 12 November 2021: Wangala Festival 19 November 2021: Guru Nanak Jayanti/Karthika Purnima 22 November 2021: Kanakadasa Jayanthi 23 November 2021: Seng Kutsnem
On 1 November, banks in Karnataka and Manipur Kannada will be closed. Banks in Karnataka will be closed on 3 November. On Deepawali Pujan day, banks will be closed in all states except Karnataka. On Bali Pratipada, banks will be closed in Gujarat, Karnataka, Uttar Pradesh, Uttarakhand, Sikkim and Himachal Pradesh. While on Bhai Duj, banks in Sikkim, Manipur, and Uttar Pradesh will be closed.
Banks in Bihar will observe a holiday on account of Chhath Puja on 10 November and 11 November 2021. While banks in Meghalaya will remain on 12 November 2021. On Guru Nanak Jayanti, banks will be closed in states such as Maharashtra, Delhi, Uttar Pradesh, Jharkhand, Jammu and Kashmir, among others. Bank in Karnataka will remain closed on 22 November and those in Meghalaya will remain closed on 23 November.
Weekend Bank Holidays in November 2021
07 November 2021: Sunday 13 November 2021: Second Saturday 14 November 2021: Sunday 21 November 2021: Sunday 27 November 2021: Fourth Saturday 28 November 2021: Sunday
Even as banks will remain shut on the above-mentioned days, customers can avail online services. Moreover, mobile and internet banking will remain operational. The Reserve Bank of India (RBI) has categorised holidays under three categories — Holiday under Negotiable Instruments Act; Holiday under Negotiable Instruments Act and Real-Time Gross Settlement Holiday; and Banks’ Closing of Accounts. The list of holidays given below has been notified by RBI.
LONDON: Banks are demanding much stricter environmental criteria when financing shipping companies as investor pressure grows on the sector to accelerate going greener, according to Boston Consulting Group (BCG).
Shipping, which transports about 90% of world trade, accounts for nearly 3% of the world’s CO2 emissions and BCG forecast the industry will need $2.4 trillion to achieve net-zero emissions by 2050.
“ESG-driven requests are already prompting more action from banks. Shipping is already feeling it and they (shipping companies) are under pressure now,” said Peter Jameson, partner with BCG, which are consultants for the COP26 UN climate summit that starts on Oct. 31.
Standard Chartered has already provided loans linked to sustainability targets for drilling group Odfjell and the shipping division of Oman’s Asyad Group, the bank has said.
“When looking at lending on new assets, banks are going to create a bigger conduit for CO2 reductions through their policies,” Jameson told Reuters.
“The banks are also seeing insurance companies feeling shareholder pressure and this is also causing big pension funds to reassess.”
Leading shipping financiers currently provide close to $300 billion of lending to the industry annually, analysts estimate.
Of the $2.4 trillion that BCG estimates will be needed to achieve net-zero emissions by 2050, Jameson said $500 billion would be required between now and 2030 with the remaining $1.9 trillion between 2030-2050.
The bulk of the total amount – around $1.7 trillion – would go towards developing future fuels.
“Funding sources are already becoming available, yet plenty more are still required,” Jameson said.
ESG-related assets under management are estimated to represent up to 80% of total lending to shipping by 2030, BCG said.
UN shipping agency the International Maritime Organization (IMO) has said it aims to reduce overall greenhouse gas (GHG) emissions from ships by 50% from 2008 levels by 2050, but industry groups are calling for more progress from governments.
“The risks to balance sheets will start to force more questions being asked to the IMO,” said Ulrik Sanders, managing director at BCG, adding that this would “prompt more action towards decarbonisation”.
The Rupee Cooperative Bank has notified the scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) to refund account holders up to Rs 5 lakh.
The administrator of the Rupee Cooperative Bank, CA Sudhir Pandit, met Union minister for state for finance & banking Bhagwat Karad, urging him to intervene to resolve issues being faced by the bank.
According to Pandit, although 99% depositors will get a refund of their entire deposits as per the amended Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, high-value depositors with deposits of more than Rs 5 lakh will lose 65% of their deposits if the bank goes into liquidation. “A majority of these depositors are senior citizens and entire liquidity of around Rs 800 crore will be exhausted once deposits below Rs 5 lakh are fully refunded,” he explained. If the bank’s liquidity is exhausted, no other bank will come forward for a merger, he pointed out.
“A resolution plan or revival will ensure that larger depositors do not lose most of their money, because if the bank is liquidated, large depositors may collectively lose Rs 375 crore,” said Pandit.
Significantly, the Reserve Bank of India (RBI) has refused to sanction the merger of the Rupee Cooperative Bank with the Maharashtra State Cooperative Bank (MSSB). The proposal of merger with the MSCB was submitted in view of the latter’s wish to diversify into the retail business. MSCB is the apex cooperative bank that lends money mostly for agriculture and agri-businesses.
The Rupee Cooperative Bank has notified the scheme of the Deposit Insurance and Credit Guarantee Corporation (DICGC) to refund account holders up to Rs 5 lakh. Rupee Cooperative Bank administrators said they will forward all claims made under the scheme to DICGC by October 15, 2021, after which approved claims will be settled by the DICGC within a period of 90 days.
“The DICGC told us to maintain expenses to run the bank for the next six months, within which hopefully there will be a resolution plan for the bank whether it is a merger with a larger bank, or its revival. We even met Union finance minister Nirmala Sitharaman,” he said.
Mumbai: HDFC Bank has said that as a practice it levies processing fees on customers attempting to avail loans with discrepant or suspect documents. However, it has denied reports that these cases are not reported on the bank’s fraud reporting system.
“The bank does not waive the processing costs from customers who come forward in such discrepant/suspicious cases. The processing fee is charged towards defraying the cost of efforts of the bank for additional due diligence and verification and not for closing the cases,” HDFC Bank said.
Responding to reports that frauds are not reported by the bank, the private lender said that in all cases, the bank updates its internal database to prevent any future application from the customer and also updates industry data to prevents such borrowers from indulging in similar practises with other banks, NBFCs & financial institutions. “Collection or non-collection of processing fees has no bearing on reporting to the internal & Hunter (industry) database or attempts to report to the police authorities,” the bank said.
MUMBAI: The government plans to return bank guarantees worth Rs 14,000 crore to Vodafone Idea (Vi) and Rs 8,000 crore to Bharti Airtel if they opt for a four-year moratorium on payment of spectrum dues, a person aware of the development said.
The development is expected to drastically reduce Vodafone Idea’s non-fund exposure to banks that have been hesitant to furnish fresh bank guarantees (BGs) to the loss-making telco due to its precarious financial position.
“BGs in deferred annual instalment against spectrum bought in earlier auction will be returned to telcos opting for moratorium,” the source told ET. “Vi stands to get about Rs 14,000 crore and Airtel about Rs 8,000 crore.”
Bharti Airtel chairman Sunil Bharti Mittal on Thursday said the telco will opt for the moratorium while cash-strapped Vodafone Idea too is widely expected to opt for it.
Experts said return of bank guarantees will allow banks more leeway to lend to Vodafone Idea in the future.
“A large part of our exposure (to Vi) is towards bank guarantees to the DoT (Department of Telecommunications),” a lender said on the condition of anonymity. “If those are returned, it gets cancelled and our exposure towards Vodafone Idea will drop significantly.”
Re-rating of the company could also lead to refinancing of existing loans at lower rates.
“We will have to see how this evolves, but in all likelihood, when the operating metrics of the telco improves, we will be able to offer them lower rates and rework loan covenants depending on how the cash flow situation improves,” the lender said.
Banks have a total exposure of a little over Rs 35,000 crore to the company, of which funded exposure is close to Rs 13,800 crore while the remaining is non-funded.
Vodafone Idea had a gross debt of Rs 1.9 lakh crore at June end – mostly in obligations to the government towards deferred spectrum charges and adjusted gross revenues (AGR)-related dues – while its cash and cash equivalents are only Rs 920 crore.
The government on Wednesday rolled out a four-year moratorium on the statutory dues of telcos and opened up the automatic route for 100% foreign direct investment in the sector, which is expected to help attract global investors.
Bank guarantees have long been a bone of contention between telcos and DoT.
Airtel’s Mittal has been propagating scrapping the practice of taking BGs. “Bank guarantee is something which the DoT must reconsider because those are from historical times,” he had told ET in a recent interview. “Now that you have exposure of tens of thousands of crores of spectrum payments to these operators without any such instruments, why bother about these small bank guarantees?”
Mittal also pointed out that the Reserve Bank of India (RBI) norms mandate provisioning of that much capital allocation, thus reducing the capital pool, and the cost of bank guarantee has quadrupled.
The government had on Wednesday cut bank guarantee requirements against statutory dues such as licensee fees to 20% from 100%, and said the financial instrument won’t be required anymore to secure instalment payments in upcoming auctions.
This was over and above a four-year moratorium on AGR and spectrum payments, approved redefining AGR to exclude ‘non-telecom’ items and cut the spectrum usage charge (SUC) to zero — both prospectively — as part of wide-ranging reforms to improve the health of the debt-laden sector and make sure the market has at least three private players.
Vi stock has jumped about 30% in two days to close at Rs 11.25 on the BSE on Thursday.
Govt can also turn part of dues into equity after four-year period.
MUMBAI: Banks led by State Bank of India (SBI) have called on the Indian government to give debt-laden Vodafone Idea more time to clear its tax dues and spectrum fees, two bankers and a government official familiar with the matter said.
An Indian court last year ordered the mobile carrier, a joint venture between the Indian unit of Britain’s Vodafone Group and Aditya Birla Group’s Idea Cellular, to pay just over $8 billion to the government to settle long-standing dues. Vodafone has a stake of about 44% in the company and Aditya Birla owns nearly 27%.
In June, Vodafone Idea’s then non-executive chairman Kumar Mangalam Birla warned that without a government reprieve the Indian mobile carrier’s “financial situation will drive its operations to an irretrievable point of collapse”.
Vodafone Idea’s gross debt as of June 30 was 1.9 trillion rupees, comprising of deferred spectrum payment obligations of 1.06 trillion rupees and an adjusted gross revenue liability of 621.8 billion rupees, its latest stock exchange filing in June showed.
The adjusted gross revenue is the usage and licensing fee that telecom operators are charged by the Indian government.
The mobile operator also reported that it owes 234 billion Indian rupees ($3.18 billion) to financial institutions.
Senior SBI officials and representatives of the Indian Banks’ Association (IBA) met finance and telecom department officials this month and proposed an immediate breather on the repayment of spectrum dues, the two bankers and the government official, who requested anonymity, told Reuters.
“We’ve had these discussions with the banks but the issue is the finance ministry needs to be comfortable with the measures,” the government official said.
SBI, IBA, and the finance and telecom departments did not respond to Reuters requests seeking comment.
The government is also evaluating whether to take a small stake in financially struggling Vodafone Idea, in order to allay investor concerns regarding the future of the telco.
The company is facing a repayment of 5-10 billion rupees of non-convertible debentures around January, one of the bankers said.
Vodafone Idea declined to comment. Vodafone Group did not immediately reply to an email seeking comment. An Aditya Birla Group spokesman declined to comment.
Vodafone Idea had cash and cash equivalents of 9.2 billion rupees at the end of June, a transcript of a company conference call published on its website said.
“All eyes are on New Delhi right now as banks are getting increasingly nervous,” another banker with exposure to Vodafone Idea said.
The bankers have also proposed providing some relief to Vodafone by restructuring its dues, one government official and two bankers said.
Birla stepped down as chairman early last month after appealing for the government bailout.
The government has been considering a broader package to help a telecom industry disrupted by the 2016 entry of Mukesh Ambani-controlled Reliance Jio, which shook up the market with its free voice and cut-price data plans.
The NUE license shall be granted by RBI according to the power of authorization of payment operations conferred under Section 4 of the Payment & Settlement Systems Act (‘PSSA’), 2007.
By Trisha Shreyashi
In a bid to boost the Retail Payment System (‘RPS’), Reserve Bank of India (‘RBI’) had come up with the proposal of “New Umbrella Entities” (‘NUE’), similar to Unified Payments Interface (UPI). While NUEs promote private participation, it became pertinent to ensure that consumer data is secured. Further, it is essential that sustainable financial principles are followed so that the motto of de-risking payments ecosystem is achieved in essence. NUE is seen as an alternative mechanism to India’s flagship processor, the National Payments Corporation of India (NPCI).
The NUE license shall be granted by RBI according to the power of authorization of payment operations conferred under Section 4 of the Payment & Settlement Systems Act (‘PSSA’), 2007. In consonance, RBI announced a draft framework to authorise pan-India NUE for RPSs. It mandates a minimum of INR 300Cr. be maintained as reserves at all times. These NUEs shall be duly registered under the Companies Act, 2013. Further, only entities owned and controlled by Indian residents staying in India in preceding financial year for more than 182 days, shall be eligible to apply as promoter/promoter group. This indicates the intention to limit the role of foreign entities, while allowing foreign investment under diktat. It is also subject to corporate governance norms and RBI retains the right to approve/appoint Directors to the Board.
These NUEs would be primarily responsible in developing new payment systems, standards and technologies, clearing and settlement mechanisms, while monitoring, addressing and preventing relevant risks and frauds. It would diversify easy payment options beside boosting transaction volumes with tremendous expansion of e-commerce. Thus, NUE could also become instrumental in furthering financial inclusion and promotion of fintech.
However, the NUE authorization has been shelved citing data storage and localization issues despite being proposed with a view to minimize concentration risks in RPS. A five member committee under the chairmanship of P. Vasudevan, Chief General Manager, RBI has been directed to review license applications, analyse macroeconomic impact and security risks in light of the proposed framework. Announced about a week ago, it shall also put forth recommendations to address the concerns thus arising.
Other impediments must also be considered to evaluate the adverse impact, if any, on the banking ecosystem. For instance: Capital, infrastructural costs, technology requirements in deploying products, settlement management & operations, rise in risks due to reconciliation & security issues, liquidity costs to support free flow of funds by customers etc. It also seems prudent to examine the impact on smaller banks. Forced to deploy additional payment instruments modeled on zero pricing strategy, they’d end up bleeding more.
Commercial banks had vehemently opposed the NUE proposal. They had urged rather to strengthen the domestic NPCI. While the idea of NUE is to expand the competitive landscape of RPS, the issue of data transfer and security involving foreign entities is indeed a bonafide objection. Moreover, the array of events that unfolded in the recent past make it prudent to notice that the concerns are not unfounded. For instance:- Failure by Mastercard, Amex & Diners Club in furnishing audit reports certifying compliance with Indian norms in regard to data storage rules.
To address the concerns, RBI announced extensive guidelines that are mandatory for all entities involved in payments & settlements to follow, to protect and prevent breach or misuse of the customer details in their database. The Personal Data Protection (PDP) Bill, under review before the Joint Parliamentary Committee, might prove to be a game changer in building a robust data storage & processing system. For the time being, India could subscribe to Global Data Protection Regulation (GDPR) to strike a balance between consumer woes and commercial interests, until a germane data protection framework for fintech is enacted.
Disclaimer: The author is a legal professional. Views expressed are personal and not necessarily that of Financial Express Online
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