Tag: sbi

RBI sets up advisory group to assist Regulatory Review Authority

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The Reserve Bank of India’s Regulations Review Authority (RRA 2.0) has constituted a six-member Advisory Group headed by S Janakiraman, Managing Director, State Bank of India, to support it in reviewing the central bank’s regulations and compliance procedures with a view to streamlining/ rationalising them to make them more effective.

The Authority has been set up initially for a period of one year from May 1, 2021. M. Rajeshwar Rao, Deputy Governor, RBI was appointed as the Regulations Review Authority last month.

“The Group will assist the RRA by identifying areas/ regulations/ guidelines/ returns which can be rationalised and submit reports periodically to RRA containing the recommendations/ suggestions,” RBI said in a statement on Friday.

The other members of the Group are — TT Srinivasaraghavan, Former MD and Non-Executive Director, Sundaram Finance; Gautam Thakur, Chairman, Saraswat Co-operative Bank; Subir Saha, Group Chief Compliance Officer, ICICI Bank; Ravi Duvvuru, President and CCO, Jana Small Finance Bank; and Abadaan Viccaji, Chief Compliance Officer, HSBC India.

The Group has decided to invite feedback and suggestions from all regulated entities, industry bodies and other stakeholders. Suggestions and feedback can be e-mailed to the Group latest by June 15, 2021.

Terms of Reference

The terms of reference of RRA 2.0 include making regulatory and supervisory instructions more effective by removing redundancies and duplications, if any; and to obtain feedback from regulated entities on simplification of procedures and enhancement of ease of compliance. The authority will seek to reduce compliance burden on regulated entities by streamlining the reporting mechanism; revoking obsolete instructions if necessary and obviating paper-based submission of returns, wherever possible.

The RRA will examine and suggest the changes required in dissemination process of RBI circulars/ instructions.

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SBI MD, BFSI News, ET BFSI

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State-run lenders will take a lead in creation of the bad bank, but the sick asset resolution platform needs the support of private banks and other lenders to be successful, State Bank of India Managing Director Swaminathan J said on Thursday. If all lenders come on board, the National Asset Reconstruction Company (NARC) announced in the budget will be able to aggregate 100 per cent of a sick company’s outstanding loans, which shall ultimately lead to better resolution of the asset quality stress for all.

The government is yet to announce the specific contours of the NARC or the bad bank and has also only said that it is willing to provide some sovereign guarantee to help the platform.

“For this model to succeed, it cannot just be mostly for public sector banks. Yes, they will take a lead role in this but as we understand at this point of time, NARC will be all encompassing. It will take into account PSBs, private sector banks and for that matter any financial institution which has an exposure to the identified account,” Swaminathan said, speaking at an online seminar.

The present set of over two dozen ARCs have not been able to achieve decent numbers on debt aggregation and get stuck under 40 per cent in many cases, which has a bearing on the final resolution as well, he said.

“This ARC (the bad bank), since it is mandated and backed by the government, it is going to be a smoother affair in terms of all the banks deciding together to transfer the entire asset. Which means that the aggregation is going to be near 100 pc and there is going to be an AMC structure. So, together, we expect this to be a winning formula,” the confident SBI executive said.

“We are ‘very close’ for the bad bank to be a reality” and added that the dual structure of being both an asset reconstruction company as well as an asset management company will be of help, he said.

At present, financial industry stakeholders are being reached out to gauge their interest and one of the entities will take the lead once the potential shareholders are in place.

The lead bank or financier will have a stake of over 100 per cent, and apply to the RBI for licence to operate as an ARC, he said, stressing that funding or capital is not a problem for the bad bank.

The bad bank will operate on the prevalent 15:85 structure, where only 15 per cent will be paid as cash and the rest would be security receipts, he said, adding that this model will ensure that the fund initial fund requirements are not very high.

He said there is a group within the country’s largest lender working out a slew of modalities, including the potential assets which can be transferred to the NARC, capital required etc.

One of the unanswered aspects which will eventually get solved is the ways to put a value to the government guarantee which will ride alongside the security receipts.

Explaining the ways of working, he said NARC will offer a specific price for an asset to the banks and await the nod from the joint lenders forum to go ahead with a resolution. Once the amount is quoted, the lenders can reach out to other ARCs in the system and NARC will have the opportunity to revise its bid as well, he said, adding that there is a scope for price discovery.

A majority of lenders will have to be on board before the asset is transferred to NARC, he said, adding that the definition of ‘majority’ is likely to be the one as done by the Insolvency and Bankruptcy Code.



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No freezing a/c for KYC, digital proof can be final, BFSI News, ET BFSI

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The RBI on Wednesday relaxed KYC (know-your-customer) norms to enable the process to be completed remotely and prevent banks from freezing accounts in which such data has not been updated.

“In respect of customer accounts where periodic updation of KYC is due and pending as on date, no restrictions on operations shall be imposed till December 31, 2021, for this reason alone, unless warranted under instructions of any regulator/ enforcement agency/ court of law,” the RBI said in a circular. Earlier, SBI had given similar instructions to its branches after a directive from the finance minister through a tweet.

While the central bank’s directive gives relief to customers of all RBI-regulated entities, a larger reform is the enabling of digital KYC. Currently, banks are completing the KYC process for individuals remotely using video-based customer identification (V-CIP). This process has been extended for businesses including proprietorship firms, authorised signatories and beneficial owners of legal entities.

Earlier, accounts opened using Aadhaar-based e-KYC were treated as ‘limited KYC’ accounts. These will now be treated as fully compliant accounts. Entities looking to complete the KYC process can now use KYC Identifier of Centralised KYC Registry (CKYCR) for V-CIP.



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SBI allocates Rs 71 crore for Covid-19 relief, BFSI News, ET BFSI

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The State Bank of India (SBI) has allocated Rs.71 crore for various support initiatives to aid the country in combating COVID-19’s second wave. The Bank has set aside Rs. 30 crores to set up ,1000 bed makeshift hospitals, 250 bed ICU facilities and 1,000 bed isolation facilities across some of the worst-hit states. These facilities would be set up in collaboration with government hospitals and Municipal Corporations of the respective cities. The Bank will also contribute Rs. 10 Crore for genome-sequencing equipment / lab and vaccine research equipment / lab to the Government.

Additionally, SBI has allocated Rs.21 crore to all its 17 Local Head Offices to meet citizens’ urgent medical needs, such as procuring life-saving healthcare equipment and improving hospital oxygen supplies. PPE kits, gloves, rations, and cooked meals will be provided by the Bank on a continuous basis. The Bank will spend Rs.10 crore in partnering with NGOs to undertake community-based testing, boosting vaccination campaigns, establishing a helpline for COVID-19-related issues, providing oxygen, and other essential activities.

SBI has also partnered with several hospitals to get its staff vaccinated. In addition, the Bank has decided to cover the cost of vaccinations for its employees and their dependent family members. 60 of the Bank’s training centres throughout the country have been transformed into isolation/quarantine centres for affected employees and their families.

Dinesh Khara, Chairman, SBI said, “We are committed to contribute funds and resources, and reach out to Indian citizens and join in the government’s efforts to combat the virus. I urge everyone to help those in need in every way they can and contribute towards making the country COVID-19 free.”



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Merchants payments is next battleground for SBI, HDFC Bank and ICICI Bank, BFSI News, ET BFSI

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State Bank of India, HDFC Bank and ICICI Bank have lined up a slew of plans to capture the payments and settlement market as they ramp up their digitisation initiatives.

ICICI Bank, India’s second-largest private sector lender by assets is eyeing a large share of the potential Rs 31 lakh crore of payments and settlement market to more than 2 crores small, big, offline and online businesses by fiscal 2022 by offering these wholesalers and retailers payment systems bundled with cash management and credit facilities.

The bank is targeting income from fee, credit and savings due to use of technology by offering these services to these large and small establishments spread across the country. As per RBI data the market for merchant services is Rs 2.32 lakh crore or about Rs 24 lakh to Rs 25 lakh crore in fiscal 2020 and is expected to increase 45% to Rs 31 lakh crore by fiscal 2022.

The merchant stack will provide “seamless banking services” to over 2 crore retail merchants in the country.

The bank also expects to extend other services like short term loans of tenure between six months to 1 year.

HDFC Bank

HDFC Bank, the country’s largest private sector lender, has set an ambitious target to expand its merchant base by ten-fold

in the next three years, eyeing a sizable share of India’s rapidly growing digital payments market.

The lender is planning to reach out to more than 20 million small and medium merchants and also professional services like doctors,

pharmacies, salons and laundry services across metro, semi urban and rural India in the next 3 years. HDFC Bank has about two

million merchants on its network as of FY20. The lender on Wednesday launched a new banking and payment solution for its merchant called SmartHub Merchant Solution 3.0. This will allow merchants and self-employed professionals to instantly open a current account and start accepting payments both through physical and digital channels.

It has tied up with global card network Visa to enable some of the payment solutions. The features would also be digitizing Khata, enabling collection reminders, inventory management, billing software and lending to merchants’ basis their banking history.

HDFC Bank processes about 48% of the overall card transactions at the merchant level in terms of volumes and about a fourth of the Unified Payments Interface (UPI) volumes.

State Bank of India

SBI Payments, a subsidiary of India’s largest lender State Bank of India, will launch YONO Merchant App to provide low-cost digital payments infrastructure to merchants.

YONO Merchant App will expand digitization of merchant payments in the country, SBI said in a release.

Aiming to enable millions of merchants through mobile-led technology to accept digital payments, SBI plan to deploy low-cost acceptance infrastructure across India over the next two years targeting 20 million potential merchants across India in retail and enterprise segment. This will help boost digital payments acceptance infrastructure in tier 3, 4 as well as north eastern cities.

YONO SBI Merchant will act as a soft PoS (point of sale) solution for which it has partnered with global payments technology major Visa to enable Tap to Phone feature. The partnerships aim to give the necessary boost to scale up acceptance infrastructure across the country,

Bank launched YONO Platform three years ago, YONO, has 35.8 million registered users.

In the next 2-3 years, SBI is aiming to digitize millions of merchants by upgrading their mobile phones into a PoS device accepting all form factors, accessing Value Added Services such as loyalty, GST invoicing, inventory management, among others and connecting into an interface to avail other banking products at a click of a button. The bank is aiming to grow our merchant touch points multi-fold crossing 5-10 million within 2-3 years.



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SBI chief, BFSI News, ET BFSI

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State Bank of India (SBI) will try to keep the interest rates benign as long as possible with a view to supporting the economic growth, its chairman Dinesh Kumar Khara has said.

On the impact of the second wave of COVID-19 on non-performing assets of the bank, the SBI chief said that as the lockdown was not pan-India, one will have to wait and watch to assess its impact on the banking sector.

Observing that multiple variables including inflation have a bearing on the interest rates, he said, “our effort is to support the growth initiatives. To really ensure that happens, we will try to keep the soft interest rate regime for as long as possible.”

In an interview to PTI, Khara said it is too early to give any colour to likely scenario of NPAs because of local restrictions.

The impact of lockdown differ from states to states as it is not uniform, he said, adding, “so, probably we can wait and watch for some more time before making any comment on impact on economy and NPA situation.”

Speaking about various initiatives of the country’s largest lender, Khara said, SBI has decided to set up makeshift hospitals with ICU facilities for COVID-19 patients in some of the worst affected states.

The bank has already earmarked Rs 30 crore and is engaging with non-governmental organisations (NGOs) and hospital management for setting up medical facilities on an emergency basis for the treatment of COVID-19 patients.

He said the bank intends to put in place 1,000 beds with 50 ICU facilities in the states that are the worst affected.

SBI is also collaborating with hospitals and NGOs to provide oxygen concentrators for patients.

“We have put in place an action plan. We have earmarked Rs 70 crore plus out of which we are giving Rs 21 crore to 17 circles for COVID-19 related initiatives,” he said.

For the safety of employees and their families, he said, the bank has tied up with hospitals across the country to facilitate treatment of those who have fallen sick on a priority basis.

About 70,000 employees out of 2.5 lakh strong staff strength have already got vaccinated. The bank has decided to bear the cost of vaccination for its employees and their dependent family members.



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SBI cuts minimum interest rate on home loans up to ₹30 lakh to 6.70 per cent

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State Bank of India (SBI) has cut the minimum interest rate at which its home loans up to ₹30 lakh will start from 6.95 per cent to 6.70 per cent.

The new interest rate is effective from May 1, 2021.

The home loan rate cut comes exactly a month after the bank hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent.

For home loans above ₹30 lakh and up to ₹75 lakh, the interest rate will start at 6.95 per cent. For big-ticket home loans above ₹75 lakh, the interest rate will be 7.05 per cent, India’s largest bank said in a statement.

SBI said women borrowers will get a special concession of 5 basis points (bps). Further, a 5 bps concession is being offered as a digital incentive to customers applying for home loans via YONO digital banking platform. One basis point is equal to one-hundredth of a percentage point.

CS Setty, MD (Retail & Digital Banking) said, “The affordability for the consumer increases immensely with the present home loan interest rate offerings, which reduce the EMI (equated monthly installment) amounts substantially. I am sure these measures will give a fillip to the real estate industry too.”

SBI had hiked the minimum interest rate on home loans by 25 basis points (bps) from 6.70 per cent to 6.95 per cent with effect from April 1, 2021.

After SBI upped the minimum interest rate at which it will offer home loans last month, Kotak Mahindra Bank, in a statement issued on April 12, 2021, said it will continue its special interest rate on home loans of 6.65 per cent per annum.

“In the interest of consumers and on the back of strong demand trends, Kotak continues to offer possibly the lowest home loan interest rate in the market,” it said the statement, adding that the rate is applicable across all loan amounts.

“Both fresh home loan applicants and balance transfer cases are eligible for interest rates beginning at 6.65 per cent per annum. Interest rates are linked to borrowers’ credit score and the Loan to Value ratio,” Kotak Mahindra Bank further said.

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Lenders to approve the transfer of 30-40 loans by next week, BFSI News, ET BFSI

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The Indian Banks’ Association (IBA) has identified 102 corporate bad loans, totalling to Rs 2 lakh crore, where the amount outstanding in each is over Rs 500 crore that can be transferred to the proposed National Asset Reconstruction company (NARC) or bad bank.

It has asked its member banks asked members to identify large loans where they are lead bankers and get approval from co-lenders so that these loans can be sold to a National Asset Reconstruction company.

The loans identified by IBA include NPAs in a variety of industries — including oil, steel, cement and roads, with many admitted under the insolvency process. These loans are almost fully provided for over the years and they exclude the ones where there is fraud involved or those currently under liquidation. About 75% of the lenders by value need to approve to transfer the loans to an ARC.

The process

In the first phase, lenders are expected to approve the transfer of 30-40 loans by next week for transferring the loans from the books of banks is already in place.

Once the lenders decide on selling the loan, the NARC will make them an offer based on the scope of recovery. With the NARC’s offer on hand, the lenders will hold a ‘Swiss Challenge’, where rivals are allowed to better the offer made by a chosen bidder.

While rival in the private sector will be given an option to bid, it is unlikely they will succeed. This is because the security receipts issued by the NARC for 85% of the value of the loans would be guaranteed by the government. Since private companies do not have a government guarantee, they can only hope to win if they can provide cash. The Swiss Challenge will enable the public sector banks to comply with RBI’s norms that require banks to sell loans through a price-discovery process rather than doing a one-to-one deal.

The NARC will pay up to 15% of the agreed value for the loans in cash. The bad bank is also expected to do a good job in recovery as it will create a trust that will assign the task to an asset management company (AMC) in the private sector.

Each corporate nonperforming asset (NPA) will be converted into a special purpose vehicle, which will be sold by the AMC.

The bad bank

Nine banks and two non-bank lenders, including the State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), are coming together to jointly invest Rs 7,000 crore of initial capital in a proposed bad bank that aims to help extract funds stuck in bad loans. Two other state-run financiers of power projects will also own stock in the bad bank.

Canara Bank, Union Bank of India and Bank of India will join their larger state-run peers as investors in the bad bank. ICICI Bank, Axis Bank and Life Insurance Corp of India-owned IDBI Bank are also among the shareholders. State-owned Power Finance Corp and Rural Electrification Corp will also be equal shareholders in the new company.

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SBI to consider raising $2 billion via bonds, BFSI News, ET BFSI

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NEW DELHI: The country’s largest lender State Bank of India (SBI) on Tuesday said a committee of its central board will consider raising up to USD 2 billion (around Rs 14,942 crore) through bonds in this fiscal year. The Executive Committee of the Central Board is scheduled to have a meeting on April 28, 2021, the bank said in a BSE filing.

The committee will examine “the status and decide on long term fund raising in single / multiple tranches up to USD 2 billion through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2021 – 22”, the filing said.

SBI shares ended at Rs 352.9, up by 2.5 per cent, on BSE.

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SBI to recruit 6,344 junior associates

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Here’s some good news for job-seekers in the current pandemic-ravaged times. State Bank of India (SBI) has just announced vacancies for recruiting 6,344 Junior Associates (Customer Support & Sales).

This recruitment drive comes in the backdrop of the possibility of companies slowing hiring due to the adverse impact of Covid-19 on their operations as well as demand for goods & services. So, there is likely to be fierce competition for the vacancies.

Though under the essential academic qualifications, India’s largest bank has prescribed “graduation in any discipline from a recognised University or any equivalent qualification recognised as such by Central Government”, it is likely that many with professional qualifications, including engineering, law, management, among others, will have a shot at the exam.

This time around the number of vacancies, including regular, backlog and special recruitment drive, advertised are about 35 per cent less vis-a-vis last year.

The age criteria for the general candidates to take the exam is “not below 20 years and not above 28 years” as on April 1, 2021. For the other categories, there is relaxation in the upper age limit.

The starting Basic Pay for Junior Associate is now higher at ₹19,900 against ₹13,075 earlier.

This hike in Basic Pay follows the signing of the industry-wide 11th Bipartite Wage settlement in November 2020, whereby bank employees — officers, staff and sub-staff — got a 15 per cent hike in the payslip component.

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As per SBI’s recrutiment advertisement, the total starting emoluments of a Clerical Cadre employee payable in a metro like Mumbai will be around ₹29,000 per month (₹26,000 earlier).

This is inclusive of Dearness Allowance, other allowances at the current rate and two additional increments for newly recruited graduate junior associates. Allowances may vary depending upon the place of posting.

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According to the bank, the new recruits will be on probation for a minimum period of 6 months. They will be required to complete e-lessons during the probation, for getting confirmed in the bank, failing which their probation will be extended till completion of the same.

Further, before the probation period comes to an end, their performance will be evaluated and the probation period of those employees whose performance fails to meet the bank’s expectation, may be extended.

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