Tag: loan

Regional bank loan growth could hint at healthier supply chains, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


NEW YORK: If regional banks show signs of accelerating loan growth when they report earnings in the week ahead, it could signal an easing of the supply chain bottlenecks that have weighed down the U.S. economic recovery from the pandemic, analysts and investors said.

Overall, small banks accounted for 63% of the approximately $520 billion in loans through the federal Paycheck Protection Program launched in response to the pandemic. The program allowed small businesses to take loans that either could be forgiven or would have a 1% interest rate, according to the U.S. Small Business Administration

Increasing demands for new loans at higher interest rates could signal that small businesses are securing inventory and expanding, said Dave Ellison, a portfolio manager at Hennessy Funds.

“It seems like everybody else has benefited from the economy reopening but the banks because you’ve seen very little loan growth” on account of the Paycheck Protection Program, Ellison said. “The pandemic has disproportionably hurt small businesses, and those are the customers of regional banks,” he said.

As of June 30th, small banks held 15% of total banking industry loans but an outsized share of Paycheck Protection Program loans, holding 31%, according to the Federal Deposit Insurance Corp.

Overall, commercial loan growth fell 12% in September from a year earlier after bottoming out with a 16.3%% decline in annual loan growth in May, according to data from the Federal Reserve and Oppenheimer. Yet rising inventories at auto suppliers and retailers should bolster loan growth in the year ahead, said Chris Kotowski, an analyst at Oppenheimer.

“It seems likely to us that the next significant move is up – not down – for the simple reason that it can’t possibly come down as much as it already has,” said Chris Kotowski, an analyst at Oppenheimer.

A healthy increase in new loans at regional banks would be a strong signal that supply chain issues are moderating, said Steven Comery, an analyst at Gabelli Funds.

“If clients can’t get products to market because of the supply chain they aren’t going to be borrowing to build their inventory,” he said. “If we see signals that supply chain issues aren’t going away then that’s going to impact earnings estimates through 2023.”

The four largest U.S. banks reported mixed loan growth when reporting their earnings results Oct. 14, with J&P Morgan said loans were up 5% compared to the prior year while Bank of America and Wells Fargo reported declines.

Companies including First Community Bancshares Inc, First Midwest Bancorp Inc, and Zions Bancorp are expected to report earnings on Monday, while Fifth Third Bancorp O> and United Community Banks Inc are among those expected to report on Tuesday.

On Wednesday, Oct. 13, shares of First Republic Bank gained 1.5% after the regional bank originated approximately $15 billion in new loans and reported that its average Paycheck Protection Program loan balance was down 39% over the quarter. Those gains in new loans will make it likely that the bank will raise its guidance in the coming quarters, noted Casey Haire, an analyst at Jefferies.

Concerns over loan growth by regional banks comes at a time when the sector’s shares are trading near record highs. Regional banks in the S&P 500 are up nearly 37% for the year to date and are just below the high they reached on Oct. 8, according to Refinitiv data.

Despite those gains, regional banks continue to look attractive based on valuations, Ellison said.

Regional banks in the S&P 500 trade at a forward price to earnings ratio of 13.5, well below the 21.2 of the broad S&P 500, according to Refinitiv data. Valuations will likely rise alongside the yield of the benchmark 10-year Treasury, which is used to set rates for loans including mortgages, Ellison said.

“Valuation is not a problem for future gains,” he said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Shriram Housing gets ₹300-cr equity capital from parent firm

Banking & Finance

[ad_1]

Read More/Less


Shriram Housing Finance Ltd (SHFL) on Wednesday said it has received the second round of equity capital infusion of ₹300 crore from parent company, Shriram City Union Finance (Shriram City).

With this round, the total equity infusion in FY22 stands at ₹500 crore, SHFL said in a statement.

The current infusion will increase Shriram City’s holding in SHFL from 81 per cent to 85.02 per cent. SHFL is an affordable housing finance company with Assets Under Management (AUM) of about ₹4,000 crore as of June 2021.

Referring to the affordable housing and mid-market segment witnessing strong demand in tier-2 and tier-3 cities, SHFL underscored that the capital infusion will be utilised to fund the rising demand for home loans.

The company plans to expand its distribution with primary focus on cross sell through the Shriram Group network to Shriram customers in Andhra Pradesh and Telengana. The capital will also be utilised to fund the expansion plans in the targeted regions, the statement said.

Ravi Subramanian, MD & CEO, SHFL, said: “Our parent’s capital infusion will help us expand our footprint and enhance our growth potential. This is also a reinforcement of the groups’ faith in our transformed business model.

“The market has seen latent demand for housing increase significantly, especially from the low income households where sources of employment remain largely informal.”

With the latest round of capital infusion, SHFL’s net worth, which was at ₹788 crore as of June 30, 2021, has risen to ₹1,088 crore.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

IndusInd Bank records 10% loan growth in September

Banking & Finance

[ad_1]

Read More/Less


Private sector lender IndusInd Bank on Tuesday said it has posted a 10 per cent growth in advances at ₹2,21,821 crore for the second quarter ended September 30.

Net advances stood at ₹2,01,247 crore at the end of the second quarter of the last financial year, IndusInd Bank said in a regulatory filing.

The bank’s deposits also rose by 21 per cent (year-on-year) to ₹2,75,486 crore in the quarter under review, from ₹2,28,279 crore in the same period a year ago, it said.

IndusInd Bank’s low-cost deposits — current account and saving deposits (CASA) — stood at 42.1 per cent of the total liabilities during the quarter.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Terms and conditions, eligibility, charges, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


To help those borrowers who have been finding it difficult to pay back loans, the Reserve Bank of India (RBI) had lent a helping hand in the form of loan restructuring.

In 2020, the RBI had announced a loan restructuring program. And then in May 2021, due to the second wave of Covid-19, it announced a second resolution framework for many borrowers including individual borrowers.

Various banks have announced the terms and conditions for availing their loan restructuring 2.0.

Here is a look at the FAQs of HDFC Bank‘s loan restructuring policy 2.0 as per the lender’s website.

  1. What is the restructuring 2.0 scheme approved by RBI?
    RBI has provided a framework to banks & lending institutions for implementation of resolution plans for addressing the economic fallout due to the COVID-19 pandemic which has led to significant financial stress for customers. Basis the framework and regulatory guidelines, your bank has framed its policy for the restructuring of the loan/s of individuals and entities that have been impacted due to the COVID-19 pandemic.
  2. Who is eligible for restructuring?
    a) Individuals and Entities that are classified as Standard with the bank as on April 1, 2021. b) The customer has to be impacted financially by COVID-19 pandemic in the form of reduction/ loss of income or cash flows. c) Only those accounts, which are on the bank’s book as on April 1, 2021 will be eligible. c) The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents / information provided which does show the drop in cash flow due to the COVID-19 impact. The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring. Apart from the viability calculations, the repayment track record of the customer, credit bureau records, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision.
  3. Which are the products covered under the regulatory restructuring relief package.
    * Credit Card receivables* Auto Loans and Two-wheeler Loans * Personal Loans (both for personal use and for business / commercial purposes)* Personal Loans to professionals * Education Loans* Loans given for creation/ enhancement of immovable assets (e.g., housing loans)* MSME loans with Udyam certificate (The borrower should be classified as a MSME on March 31, 2021 in terms of Gazette Notification S.O. 2119 (E) dated June 26, 2020)
  4. What type of loans are not eligible for restructuring?
    Loans to the following entities/individuals are not eligible for restructuring: -* individuals/entities for agricultural purposes and classified as agricultural loans by the bank * agricultural credit societies * financial service providers* Central, State and local government bodies * HDFC Bank employees* Exposures to housing finance companies which have already been rescheduled* Loans which have been already restructured once
  5. How do I avail the restructuring benefit on my loan?
    You may visit the bank’s website for the application link, fill the application form and submit the relevant details.Login to the application form with your Loan Account Number / Credit Card Number / Email ID registered with the bank and the OTP sent on your registered mobile number/ Email. If you have changed your number, please give a written request for change in number at the nearest branch, and apply post the number has changed on system.Alternatively, you may contact your Relationship Manager (RM).
  6. Can I apply multiple times?
    No. You can apply for restructuring only once.
  7. What are the restructuring options that are available to me?
    The balance tenure of the loan can be extended by a further period of maximum 24 months, including the moratorium period at the bank’s discretion to ease your monthly EMI repayment burden.
  8. Do I need to submit any documents to avail of the restructuring benefit?
    The bank will require you to submit documents giving details about the current status of your employment or business. For salaried borrowers:* Salary slips for the month of March 2021 and latest salary slip for last 2 months* A declaration of estimated salary/income immediately after the end of the desired restructuring period (Maximum 24 months).* Letter of discharge from job (in case of job loss)* Bank account statements of the account where salary is credited in case of salaried employees from Oct 2020 to date For self-employed borrowers/ entities:* Current / CC account bank statement from 1st April 2020 till date * GST returns Oct-2020 till date * Income tax returns for FY-19 & FY-20 and FY-21 (if filed) * Profit and loss statement / Balance sheet for the last 2 years* Udyam certificate * Declaration by self-employed professionals/ businessmen declaring that their business is affected by Covid-19.Please do keep these documents ready before you apply on the link, as incomplete applications are unlikely to be processed.
  9. Will opting for the restructuring package have an impact on my credit bureau report?
    As per regulatory guidelines, your loan/credit facility will be reported to the credit bureau as “Restructured”.
  10. I hold multiple loans/credit facilities with the bank. Do I have to apply separately for each of these loans?
    The restructuring application form shall have the option to apply for one or all the loans by a single application on the bank’s website. The bank shall assess the application on regulatory guidelines, on the COVID-19 impact and the viability of the repayment plan before decisioning the same.
  11. I have a credit card with EMI plans within my credit limit. Can I opt for restructuring of only the card outstanding and not the EMI plans?
    The entire credit card balance including the loans within the credit limit will be restructured and converted into a separate loan account.
  12. I have a Jumbo Loan facility on my credit card. Is it mandatory to convert the Jumbo Loan if I choose to restructure the credit card?
    You may choose to restructure either the card balance or the Jumbo Loan or both the facilities.
  13. Will my credit card be blocked or deactivated if I avail of the restructuring scheme?
    Your credit card will be deactivated without any further notice once the restructuring is approved for any of the loans / credit cards you have with the bank. The bank may choose to reinstate fresh limits at its discretion on the card after 12 months basis the repayment behaviour on the loan EMIs.
  14. Is there a minimum outstanding requirement for availing the restructuring facility?v
    Minimum outstanding balance required to convert the card/loan outstanding is Rs. 25,000.
  15. I am self-employed/ entity having my small-scale unit. Am I eligible for relief?
    Self-employed individuals/entities are eligible for relief for both under the MSME category as well as the Non-MSME category. The Bank would request its self-employed customers to register themselves as MSME through the Udyam portal of the Government wherever applicable. Udyam portal link: https://udyamregistration.gov.in/Government-of-India/Ministry-of-MSME/online-registration.htm
  16. Can I apply for restructuring now as I was not able to apply for moratorium before?
    The scheme for restructuring is open to all customers of the bank irrespective of the moratorium applied status subject to the borrower meeting the regulatory guidelines of restructuring.
  17. I have already availed of restructuring. Can I avail this once again?
    If you have already availed restructuring, you are not eligible for restructuring under this scheme. However if you have not availed of the full benefit of 24 month tenor extension in the earlier scheme which ended on 31st Dec, the bank can evaluate and provide relief to the extent of overall tenor extension of 24 months.
  18. My loan was taken along with a co-borrower/s. Will all the co-borrowers of the original Loan agreement be required to sign the revised restructuring agreement?
    As per regulatory and legal requirements, all borrowers/co-borrowers of the original loan need to agree and sign on any changes in the loan structure including the restructuring agreement.
  19. What is the last date of making applications through the portal.
    The link on the portal will be live till 20th September 2021 for customers with single loan or overall exposure less than 25 Lacs.
  20. How much time will it take for me to know the status of the restructuring application.
    The bank will process and communicate the status of the application to the customers in 10 to 14 working days.
  21. How will I get the approval and communication for acceptance?
    The bank will communicate the status of the restructuring request vide text message or email on the registered phone number or email address.
  22. Will I need to do further documentation for restructuring?
    For all loans, you would have to sign the restructuring agreement post approval for the bank to effect restructuring. If you are sole borrower, bank will provide digital options for signing the agreements. In case there are two or more applicants on the loan structure, then all applicants will be required to accept the terms by putting physical signatures on the application and revised agreement, and this agreement will need to be submitted at the nearest customer service desk. The customer will get a copy of the revised terms and amort schedule on their registered mail id / by regular post.

Follow and connect with us on , Facebook, Linkedin



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

How a youngster can build a balanced portfolio for life needs

Personal Finance

[ad_1]

Read More/Less


Arun is 27 years old. He started working about four years back.

His parents do well financially and are not dependent on him. Both are in government sector and have pensionable jobs.

He wants to contribute ₹5 lakh towards his sister’s wedding that is scheduled after six months. Additionally, he wants to set aside ₹5 lakh for own wedding that he expects to happen in the next 3-5 years. Any excess can go towards retirement.

Arun has bought life cover for ₹1 crore and a private health insurance plan of ₹10 lakh. His parents and sister are covered under separate plans.

His only savings are ₹8 lakh in EPF and ₹15 lakhs in bank fixed deposits. Of this, he has set aside ₹10 lakh towards emergency corpus. This can cover 12-15 months of his expenses.

Further, every month, ₹20,000 goes towards EPF. He can invest another ₹80,000 per month.

He knows he can invest aggressively given his age and income profile, but he is not clear about whether he will be comfortable with portfolio ups and downs.

Recommendations

Arun has got his insurance covered. He must, however, revisit the insurance portfolio once he gets married or assumes a financial liability such as loan. The emergency fund of ₹10 lakhs is robust too.

For his sister’s wedding, he can set aside ₹5 lakh from his fixed deposits. The wedding is too soon to take any investment risk.

For his wedding, he has just given a ballpark. Additionally, the timing is also not very certain. Assuming we have four years to save for his wedding, he will need to invest about ₹11,500 per month to accumulate his wedding fund. He can put this money in a bank recurring deposit or a debt mutual fund.

The rest of the amount (around ₹68,000) can go towards his long-term goals, including retirement. He is already contributing to EPF. Given his age, he must consider allocating money to growth assets such as equities.

At this life stage, it is important not to get bogged down with retirement planning calculations. Many life milestones are yet to come, and the best earning years are ahead of him. His time and energy are better spent on enhancing career and income prospects. From an investment perspective, he just needs to continue investing regularly.

He is new to risky investments and is unsure about his risk appetite. There are a few things that you can learn only through experience. Risk appetite is one such thing. While his age ensures this risk-taking ability is high,behavioural DNA defines his risk appetite otherwise. He wouldn’t know his true risk appetite unless he experiences market ups and downs first-hand.

Two approaches

There are two approaches he can take.

1. Not take any risk. Stick with EPF, PPF and bank fixed deposits. Given his age, such a conservative portfolio is not warranted. Moreover, he would never discover his risk appetite.

2. Take risk but reduce portfolio volatility. This is a better approach.

He can work with an asset allocation approach. From the incremental investments, he can route 50 per cent of the money towards equity and the remaining towards fixed income. He can start with a small allocation and inch up to 50-60 per cent in the equity investments.

After saving for his marriage expenses he can invest another ₹88,500 for long-term savings, out of which ₹20,000 already goes towards EPF. Assuming he wants to go with 50:50 allocation, ₹44,000 from his monthly savings can be in equity products.

For equity investments, he can

1. Start with a large-cap or a multi-cap fund. A simple large-cap index fund will do. Or

2. Pick a dynamic asset allocation fund or a balanced advantage fund. Or

3. Pick a single asset allocation fund that invests in domestic stocks, international stocks, and gold. Or

4. Pick a large-cap index fund, an international stock fund and a gold ETF/mutual funds. This replicates the third approach but is cumbersome to invest for a new investor.

The first approach is simple since picking up an index fund is an easy decision. For the second and third approach, he will have to pick up an actively managed fund and choosing one can be tricky. However, the second and third approaches are likely to be less volatile and easy to stick with. This is just the initial choice. As he gets more comfortable with equity investments, he can add different types of funds in the portfolio.

In the fixed income portfolio, he is already contributing to EPF. He can also invest in PPF. Beyond these two products, he can consider bank fixed deposits or a good credit quality and low duration debt mutual fund. For his income profile, debt MFs will be more tax efficient than bank FDs. However, debt funds carry higher risk than bank FDs.

The writer is a SEBI-registered investment advisor and founder of www.PersonalFinancePlan.in

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , , , , , , , , , , , , , , , , , , ,

Loan recovery improving, says Ujjivan Small Finance Bank, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Ujjivan Small Finance Bank, which is going through a management level crisis, declared that its loan recovery from ground improved and portfolio at risk reduced in August.

The bank said its action plan aiming to improve asset quality started yielding results. The portfolio at risk (PAR) reduced to 21.7% from 30.8% in June with Rs 725 crore loan recovery. PAR was 25.2% in July. The lender’s collection efficiency improved to 95% in August from 93% in July, according to a regulatory filing to stock exchanges..

Chief executive Nitin Chugh resigned on August 18 after the bank’s holding company Ujjivan Financial Services raised alarms over his alleged mishandling of asset quality and human resource. The bank saw a series of exits from senior and mid-management level. Several board members also resigned before their scheduled term over the past one year.

The gross non-performing asset ratio rose further to 11.9% at the end of August from 10.8% a month back.

The bank said it is following a 100-day action plan for each business vertical with focus on PAR reduction and bad loan recovery with periodic monitoring and corrective action. The focus is on initial buckets and vintage of accounts for reducing PAR and further strengthening collection team and legal recovery for small enterprise loans and affordable housing loan portfolio.

Its gross loan portfolio rose marginally to Rs 14334 crore by the end of August from Rs 14, 137 crore a month back. Gross loan was at Rs 15,140 crore at the end of March. The unsecured microfinance loans contribute 67% of its total portfolio.

The bank’s restructured portfolio rose to Rs 1,405 crore from Rs 769 crore at the end of June.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Bank loans do not reflect credit risk adequately as RBI chases growth, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


The period of extended surplus liquidity is already witnessing fierce pricing wars across banks, some of which may not reflect credit risk adequately.

“However there is the risk of an Asset Liability mismatch if the liquidity is withdrawn quickly. As of now, the inflation numbers may not warrant such a decision from RBI, but if core inflation persists in the current range of 6% or above, that might act as a hindrance to continued liquidity abundance,” according to the State Bank of India’s economic research report Ecowrap.

The industry is replacing its long-term debts by very low-priced CP/working capital demand loan (ECDL) and this will obviously act as an enabler once the investment cycle revives

Margin pressure

Banks are now facing significant margin pressures despite surfeit of liquidity in the banking system, it said.

A back of envelope estimate suggests that the core funding cost of the banking system that includes cost of deposits, negative carry on Statutory Liquidity Ration (SLR) and Cash Reserve Ratio (CRR) and Return on Assets is currently at 6 per cent, while the reverse repo rate is at 3.35 per cent. Additionally, if the cost of provisions is added to the core funding cost, the total cost comes to around 12 per cent, the report said.

Credit risk

The report cited the example of 15 years loans, which are being priced at even lower than 6 per cent, linking with repo / treasury bill rates. It said that 10-year Government Security (G-Sec) is currently trading at 6.2 per cent and by the current pricing trends this could even gravitate towards 6 per cent again.

This anomaly not only negates the concept of tenor premium but may create a material risk with regard to sustainability of such rates in long term, on which borrowers and banks are basing their financial calculations, it said, adding that the only good thing is that such pricing war is mostly restricted to AAA borrowers.

According to the report, three year term loans are being quoted at close to 4 per cent repo rate and seven year term loans for borrowers below AAA are also quoting a risk premium of 15-20 basis points over the 10 year rates. Working Capital Loans (WCL) are currently being quoted at a notch above reverse repo rate at 3.35 per cent.

The report said that the concept of normally permitted lending limit (NPLL) for specified borrowers, meant to nudge them to move towards corporate bonds market, may lose its importance.

CP market

Ghosh observed that the commercial paper (CP) market is also witnessing significant churn with banks now almost absent.

Non-Banking participants like mutual funds who do not have access to RBI Reverse Repo window are creating pricing pressure in CP market as they are sometimes quoting below RBI reverse repo rate.

The CP market reflects the huge pricing gap between better and lower rated borrowers, it said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , ,

Tata Capital launches LAMF scheme

Banking & Finance

[ad_1]

Read More/Less


Tata Capital has launched ‘Loan Against Mutual Funds’ (LAMF), whereby customers can digitally avail loans ranging from ₹5 lakh and ₹2 crore.

The non-banking finance company, in a statement, said the end-to-end (onboarding to disbursement) digital loan offering, which is quick and hassle free, is provided against a wide range of equity and debt schemes across mutual funds.

Customers can avail the loan as an overdraft facility or as a term loan by marking a line on the mutual fund units, which are managed by various asset management companies, it added.

“Auto renewal facility available for tenure exceeding one year (subject to review of the mutual fund portfolio)…Service portal comprises features for disbursement, drawdown, additional pledging and de-pledging,” Tata Capital said.

Backed by technology and analytics, LAMF is a personalised product to meet the personal or business funding requirements of the customer, according to the statement.

The loan amount is customised based on the value of the units in the mutual fund folio and tenure.

Referring to the more than two-fold increase of the mutual fund industry’s assets under management (AUM) in a span of five years, the NBFC emphasised that the customer continues to hold the mutual funds portfolio and can enjoy its benefits (of growth and dividend received from the MF portfolio).

Abonty Banerjee, Chief Digital Officer, Tata Capital said, “…Our latest digital product gives customers an opportunity to easily meet their fund needs in a seamless manner, even while retaining control over their portfolio.”

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

Retail banking a growth story whose potential hasn’t been unearthed fully: IDBI Bank

Banking & Finance

[ad_1]

Read More/Less


IDBI Bank is readying an “API (Application Programming Interface)-Banking” platform that will act as a bridge between third party entities such as account aggregators, payment service providers and fintechs, and its core banking solution platform to create a connected ecosystem, enhance customer experience and open up new revenue streams, according to Suresh Khatanhar, Deputy Managing Director (DMD).

In an interaction with BusinessLine, Khatanhar emphasised that retail banking is a growth story whose potential has not been unearthed fully. Excerpts:

Now that you are out of the prompt corrective action (PCA), will your bank re-balance its advances portfolio?

We came into difficulty because of the high provisioning arising from the Asset Quality Review (AQR) exercise (initiated by the Reserve Bank of India for banks in 2015). This had an impact on our capital. We had a little extra problem because of our Development Finance Institution (DFI) status in the past, whereby we had chunky exposure to infrastructure and core sectors. We addressed this by taking a few measures. Firstly, by de-risking the loan portfolio. Secondly, we revisited our risk management policies. Thirdly, we worked on the risk appetite framework, whereby we adopted a capital light business, so that we are future-ready.

Tumultuous journey of a development bank

Actually, during the PCA period (from early May 2017 till early March 2021), we could deep-dive into our process, products, risk management policies and also re-balance the portfolio. We were skewed in favour of corporate banking, where the risk is concentrated. Though we were not allowed to lend to corporates under PCA, we saw in it an opportunity to grow retail advances. So, our corporate to retail loans ratio is today at 38:62 (57:43 when PCA was imposed).

The portfolio composition shift happened because we were not doing corporate loans. But now that we have started doing corporate loans, this ratio, in all probability, will shift. But then this year, I don’t think retail advances go below 60 per cent (of total advances). We have decided that we will not go below 55 per cent in retail.

IDBI Bank net profit soars 318% to ₹603 crore in Q1 FY22

And then we had a lot of high-cost borrowing. Bulk term deposits were at about 36 per cent of total deposits. This has come down to about 8 per cent. Our CASA (current account, savings account) was about 32 per cent of total deposits. This is now at 52 per cent. So, this has helped us to improve our cost of funds and cost of deposits.

We would like to further consolidate and strengthen our balance sheet, which we have been doing for the last two-three years, and grow. It is now time to grow the loan book from here on.

Stress seems to be building up in banks’ retail portfolio. Isn’t retail lending becoming a bit risky?

Having decided to become a retail bank, we put in place a reorganised structure…And today, we have separate verticals for structured retail assets, micro, small and medium enterprises, agriculture, and recovery as well as collection. We have separate processing centres. We have centralised operations. All these are very progressive steps, ensuring that risk is properly addressed…So, this way our operations have been segregated. And more importantly, this business model is a scalable one because retail is a volume game.

The retail banking story is a growth story. I don’t think the potential has been unearthed fully. It is a growing market. Today, the service sector is growing. People working in the sector want car loan, housing loan, personal loan, place deposits, make investments, and want various services…So, retail banking has the potential to grow.

Now in such a severe pandemic, which comes once in a century, anything under the sun can come under stress.

Our bank’s retail portfolio composition is a little different from other banks. We are not into unsecured loans and 93 per cent of our retail loan book is mortgage book, which is secured. Ninety per cent of the borrowers are salaried employees with credit score of above 700. While stress is there because of the pandemic, given this kind of borrower composition, revival is very much possible and easy. And today, even after the second wave of Covid, our collection efficiency is at pre-Covid level, which is 94-94.5 per cent….So, our retail banking model is well set and we have a committed sales force.

You mentioned being future-ready. Can you throw some light on this?

As soon as economic activity improves further, we would like to do more business, give more services to our customers…But simultaneously, our focus this year will be on digital penetration. We are working on various digital products. So, having made our balance sheet strong and robust, we would also like to make our infrastructure robust.

Now our API-Banking is also getting ready. This will help us integrate lot many apps so that we can onboard many fintechs, going forward.

API-banking will be integrated with our core banking solution platform. This will enable us to connect a lot of applications for cross-selling third party products, paying utility bills and credit card issuance, among others.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

How to convert purchase via SBI Debit card into EMI, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


If you are a State Bank of India (SBI) debit card holder, then you have the option of making big-ticket purchases via EMI. As per the bank’s press release, “SBI offers EMI facility for its customers using SBI debit card in order to purchase consumer durables from merchant stores by swiping their cards at POS (Point of sale). They can also avail this facility while buying online via e-commerce portals such as Amazon & Flipkart through SBI debit card.”

Eligibility
Before availing the EMI facility, customers must confirm the amount they are eligible to claim. This can be checked by sending SMS from the mobile number that is registered with the bank.

The SMS must be sent in the following format: DCEMI to 567676 from the registered mobile no. with the bank.

Steps for availing EMI facility with SBI debit card
Here’s how SBI debit card holders can avail EMI via debit card.

If the debit card EMI is being availed at merchant store:
a. Swipe SBI Debit Card on POS Machine at merchant store
b. Select > Brand EMI > Bank EMI
c. Enter > Amount > Repayment tenor
d. Enter PIN and press OK after the POS machine has checked the eligibility
e. Loan amount is booked after successful transaction
f. Charge slip containing Terms & Conditions of Loan is printed and the customer has to sign on the same

If the EMI is being availed for purchases made on an e-commerce website:
a. Login on Amazon or Flipkart from the mobile no. registered with the bank
b. Select the required brand, article and proceed for payment
c. Select the Easy EMI option from different payment options that appear and then select SBI
d. The amount is auto fetched, enter the tenor and click on proceed
e. SBI Login page appears, enter the internet banking or Debit Card credentials
f. Loan is booked, terms & conditions (T&C) are displayed, if accepted, the order is booked

Loan amount and interest rate:
As per the bank, customers can avail of the loan ranging from Rs. 8,000 to Rs. 1 lakh at an effective interest rate of 2-year MCLR + 7.50% which is 14.70% currently. The loan is available with flexible tenure options of 6/9/12/18 months.

Other benefits:
As per the bank’s press release, there are several other benefits offered on making an EMI purchase via an SBI debit card. These are as follows:

  • Zero processing fee
  • Zero documentation & instant disbursal
  • No blocking of Savings account balance
  • A Standing Instruction equivalent to the monthly instalment amount will be set up on customers’ savings bank account automatically upon availing this facility.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,
1 2 3 4 … 6