Tag: punjab national bank

IIFL Home Finance signs pact with PNB for co-lending, BFSI News, ET BFSI

Personal Finance

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IIFL Home Finance on Friday signed an agreement with Punjab National Bank (PNB), the country’s second largest public sector bank, for co-lending.

IIFL Home Finance expects to grow their loan books by 25 per cent with this association. The loan sourcing and servicing will be managed by IIFL Home Finance and 80 per cent of the loan will be provided by PNB.

IIFL Home Finance will service customers through the entire loan cycle — from sourcing, documentation and collection to loan servicing.

This is the fourth agreement signed by IIFL Home Finance with banks. Earlier this year, it signed agreements with ICICI Bank, Central Bank of India and Standard Chartered Bank.

IIFL Home Finance has disbursed loans totalling Rs 170 crore under these arrangements so far.

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Punjab National Bank begins exit from Canara HSBC OBC Life Insurance

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Punjab National Bank, the country’s second largest public sector bank, has set the ball rolling for sale of if its entire stake in Canara HSBC OBC Life Insurance (CHOICE) by inviting bids for the appointment of a legal advisor for the proposed transaction.

After the three way amalgamation with Oriental Bank of Commerce and United Bank of India from April 1 last year, PNB had become a promoter shareholder, with 23 per cent stake in CHOICE. Prior to this amalgamation, OBC held 23 per cent stake in CHOICE.

Also see: Banks should embrace digitisation to ensure govt schemes reach needy: FM Nirmala Sitharaman

Canara Bank has a 51 per cent stake and HSBC Insurance (Asia Pacific) Holdings has 26 per cent stake in the life insurer, which is now an associate company of PNB.

It maybe recalled that PNB had, in May this year, said that PNB will divest stake in CHOICE at an “appropriate time, depending on market conditions and available options.”

IRDAI norm

The plan to exit CHOICE is in keeping with the insurance regulator IRDAI’s norm that a commercial bank should not hold more than 10 per cent stake in two life insurance ventures at the same time.

Post the OBC amalgamation, PNB had significant shareholding in two life insurance ventures — PNB MetLife insurance (30 per cent stake) and Canara HSBC OBC Life (23 per cent stake).

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Sensex, Nifty end lower today; banks, financials fall, ICICI Bank, SBI Life among top laggards, BFSI News, ET BFSI

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Domestic equity indices ended in the red on Monday, with BSE Sensex down 0.2% at 58,177 points and Nifty 50 down 0.08% at 17,355. Mid and smallcap stocks outperformed the market today, with BSE Midcap index closing 0.32% higher and the smallcap index ending with a gain of 0.80%.

Nifty Media, Nifty Metal and Nifty Realty were among the other indices rose today. The remaining sectoral indices fell, which includes Nifty Bank Index and Nifty Financial Services down 0.58% and 0.19%, respectively.

ICICI Bank, HDFC Bank and SBI Life Insurance were the top laggards among Sensex stocks. While Kotak Mahindra Bank, Bajaj Finserv, Chola Invest and Power Finance emerged were among the top gainers in the index.

Stock Talk

SBI Life Insurance Company:

Canada Pension Plan Investment Board has offloaded 2.3 crore equity shares in SBI Life at Rs 1,171.07 per equity share, while BNP Paribas Arbitrage bough 96,35,692 equity shares at Rs 1,171 per share on BSE, the bulk deals data showed.

Punjab National Bank:

The board has approved raising Rs 6,000 crore through issue of Basel III additional Tier-1 (AT-1) bonds or Tier II bonds or combination of both in one or more tranches.

Indiabulls Housing Finance:

The company has received approval from the Competition Commission of India to divest its mutual fund business and sell it to Groww for Rs 175 crore

Other key takeaways

SREI’s Rs 35,000-crore loan may be classified as NPA

Banks may classify Rs 35,000 crore loan given to SREI group as Non Performing Asset (NPA) by the end of this quarter after the National Company Law Tribunal (NCLT) set aside the previous order restraining banks from such classification.

According to analysts’ estimates, Indian Bank and Canara Bank have exposures of ₹2,000 crore and ₹1,200 crore, respectively, to Srei group, while ICICI Bank and Axis Bank have ₹800 crore each.

India’s inclusion in global bond index to attract $170-250 bln inflows

India could be included in the global bond index early 2022, which can attract $170-250 billion in bond inflows in the next decade, said Morgan Stanley in a recent note.

Investors have been staying away from the Indian bond market for the past few years, given the widening fiscal deficit, above-target inflation and gradual weakening currency. However, recent macroeconomic stability could change early next year, according to analysts at Morgan Stanley.

US Markets

Wall Street ended sharply lower on Friday as investors weighed signs of higher inflation. Shares of Apple Inc tumbled following an unfavorable court ruling related to its app store.

The Dow Jones Industrial Average index fell 0.78% to close at 34,607.72 points, while the S&P 500 lost 0.77% and closed at 4,458.58. The Nasdaq Composite dropped 0.87% to 15,115.49.

Gold prices subdued as firm dollar dims safe-haven appeal

Gold prices were subdued on Monday as the dollar held firm, while cautious investors awaited readings on U.S. consumer prices due this week that could be crucial to the Federal Reserve’s decision on when to exit its super-supportive policy. Spot gold was flat at $1,787.40 per ounce after having recorded a weekly decline of 2.1%.

Market Outlook for the week ahead

-Nifty has been in a narrow range for the last 5 days and any breakout above 17,450, with above average volumes, may take Nifty to 17,550 levels. According to experts, Traders are advised to book profits if Nifty gives a daily close below 17,250 level.

-The market is expected to turn stock specific, and the Nifty will undergo a healthy consolidation this week, making it prudent to stick to the buy on decline strategy to accumulate quality stocks.

-As Nifty is not expected to breach 16900 in its consolidation phase, dips towards psychological level of 17000 would offer incremental buying opportunity in this week

– Bank Nifty is expected to form a higher base above the upper band of the recent range breakout area (36200). Experts stick with a positive stance with Bank Nifty gradually heading towards 37700 levels in September. Any breather in the coming week would offer an incremental buying opportunity in quality banking stocks.



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Festival season to give boost to retail credit demand

Banking & Finance

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With the festival season now starting, lenders are expecting a further uptick in retail loan demand and many banks are now announcing special schemes.

“Credit demand from retail customers has been reviving. With Covid cases low in many parts of the country and the festival season starting, there is expectation of heightened interest in loans for items such as consumer durables as well as home and auto loans. Typically, this is the time when people invest in new homes and purchase vehicles,” noted an executive with a private bank.

Kotak Bank

Private sector lender Kotak Mahindra Bank has announced a 15-basis point reduction in home loan rates as a limited period festival season offer beginning September 10 and ending November 8.

State-run Punjab National Bank and Bank of India too have announced festival loan schemes and many other lenders are expected to announce special festival offers in coming weeks.

Fintech lenders have also reported rising demand for credit from retail customers.

“We are seeing improved demand for credit from the first quarter of 2021, supported by economic recovery and improving domestic market due to the reduced risk of Covid-19. We are currently disbursing loans worth ₹120-130 crore per month on a consistent basis since July 2021 which is nearly 70 per cent higher compared to a year ago,” said Yogi Sadana, CEO, CASHe, adding that with the festival season around the corner, he expects an uptick for loan demand for purposes specifically related to wedding, travel, house improvement and purchase of white goods.

Yezdi Lashkari, Founder and CEO, Flexmoney Technologies, said there has been over 4.5 times year on year growth in consumer credit disbursed through its network just this past quarter. “The main use of these loans is for the purchase of electronics and appliances, fashion and personal care, mobile, home and furnishing,” he noted.

In recent months, retail loans have been growing at a robust pace with most banks focussing on this book. According to RBI data, personal loans registered an accelerated growth of 11.2 per cent in July 2021 as compared to 9 per cent a year ago, primarily due to higher growth in ‘loans against gold jewellery’ and ‘vehicle loans’.

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Bank Board Bureau recommends Atul Kumar Goel for PNB MD post, BFSI News, ET BFSI

Banking & Finance

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Banks Board Bureau (BBB) on Wednesday recommended Atul Kumar Goel for the post of Managing Director of Punjab National Bank.

Currently, Goel heads UCO Bank, which was removed from Prompt Corrective Action (PCA) restrictions. He will succeed SS Mallikarjuna Rao, who was recently given an extension till January 2022.

BBB interviewed 11 candidates for the post of MD and CEO of PNB – the country’s second-largest public sector lender. BBB is headed by former secretary of the Department of Personnel and Training BP Sharma.

“Keeping in view their performance at the interface, their overall experience and the extant parameters, the Bureau recommends Atul Kumar Goel for the position of MD and CEO of PNB,” BBB said in a statement.

The incoming managing director and chief executive will hold office for a term of three years from the date of entering office.

The name of the selected candidate would go for final approval to the Appointments Committee of Cabinet (ACC), headed by the Prime Minister.

The secretary of the Department of Financial Services, secretary of Department of Public Enterprises and the RBI deputy governor in charge of banking are part of BBB.

In 2016, the government approved the constitution of BBB as a body of eminent professionals and officials to make recommendations for the appointment of whole-time directors as well as non-executive chairpersons of PSBs and state-owned financial institutions.



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

Banking & Finance

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

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

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

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

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

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

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

Reluctant banks

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

Lenders were asking customers to clarify the nature of transactions and warning credit card users that transactions of virtual currency will lead to suspension/cancellation of card.

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

A grey area

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

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

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

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



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

Personal Finance

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

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

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

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

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

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

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

Reluctant banks

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

Lenders were asking customers to clarify the nature of transactions and warning credit card users that transactions of virtual currency will lead to suspension/cancellation of card.

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

A grey area

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

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

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

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



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PNB waives service charge, processing fee on retail products, BFSI News, ET BFSI

Banking & Finance

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Punjab National Bank on Tuesday said it has waived all service charges and processing fee on retail products as part of its festival season offering. Punjab National Bank (PNB) has launched a festival bonanza offer to enhance the availability and affordability of credit to customers, it said in a release.

PNB now offers an attractive interest rate starting from 6.80 per cent on home loans and 7.15 per cent on car loans, it said.

In the festive offer, the bank will waive all service charges/processing fees and documentation charges on its retail products like home loans, vehicle loans, myProperty loans, personal loans, pension loans and gold loans, PNB said.

Besides, PNB is offering personal loans starting from 8.95 per cent, which is one of the lowest in the industry, it added.

It also announced offering home loan top-up at an attractive rate of interest. PNB said customers can avail these offers till December 31, 2021.

The Delhi-headquartered lender said it is confident of seeing an encouraging revival in overall consumer spending, which will help boost its credit portfolio.



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Government extends the tenure of Canara Bank, Bank of India executive directors by two years, BFSI News, ET BFSI

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The government has extended the tenure of two executive directors of Canara Bank and Bank of India for two years, the state-run lenders said on Monday. Canara Bank in a regulatory filing said that the central government has extended the term of office of A Manimekhalai, Executive Director, for a period of two years beyond her currently notified terms that expires on 10 February 2022, or until further orders, whichever is earlier.

Bank of India in a separate filing said that the term of office of P R Rajagopal, Executive Director, has been extended for a period of two years, beyond his currently notified term or until further orders, whichever is earlier. His current term was to expire on February 28, 2022, the bank said.

The banks said the government informed them about the extension given to these executive directors through notifications on August 26, 2021.

The government last week extended the term of executive directors of various public sector banks. It also extended the terms of MD & CEOs of Punjab National Bank and Bank of Maharashtra.



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Govt extends tenure of 4 public sector banks’ top officials, BFSI News, ET BFSI

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Four state-owned banks on Friday said the government has extended tenures of their top officials, including managing director and chief executive officers (MD and CEOs) of Punjab National Bank and Bank of Maharashtra.

Besides, the government has extended the tenures of executive directors of Punjab National Bank (PNB), Union Bank of India and Central Bank of India.

The government sent notifications to these banks on Thursday, informing them about the extensions given to the top-level officials.

“The Department of Financial Services, Ministry of Finance, vide its notification dated August 26, 2021, has extended the term of office of S S Mallikarjuna Rao, managing director and chief executive officer of the bank (PNB), for a period beyond September 18, 2021,” PNB said in a regulatory filing.

Rao’s current tenure was to come to an end on September 18, 2021, and the extension has been given till the date of his superannuation (January 31, 2022) or until further orders, whichever is earlier, PNB said.

The government has also extended the tenure of Bank of Maharashtra MD and CEO A S Rajeev for two years, the Pune-based lender said in a filing.

Rajeev’s current tenure was coming to an end on December 1, 2021.

In addition to this, two executive directors of PNB, two in Union Bank of India (UBI) and one in Central Bank of India have been given extension beyond their current tenures.

Sanjay Kumar and Vijay Dube, executive directors of PNB, have been given extensions till August 23, 2023 and November 30, 2022, respectively.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India said.



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