Tag: sbi

SBI General Insurance ties up with Google Pay for health insurance

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SBI General Insurance on Wednesday announced its technological collaboration with Google Pay that will enable users to buy SBI General’s health insurance on the Google Pay app.

“This is in line with SBI General’s vision to consistently expand its distribution of general insurance solutions through digital channels,” it said in a statement, adding that the collaboration also marks Google Pay’s first such alliance with an insurer in the country and will make health insurance available to customers.

Users will be able to buy both individual and family plans under Arogya Sanjeevani policy through Google Pay Spot.

“The pandemic has boosted the usage of digital platforms for various needs, and expectations from financial solutions have also matured. This collaboration is yet another endeavour to address this growing need for health insurance, thereby, bringing a larger number of people under the insurance fold,” said Prakash Chandra Kandpal, Managing Director and CEO, SBI General Insurance.

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‘RBI should’ve acted on YES Bank 5 months earlier’, BFSI News, ET BFSI

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MUMBAI: Former State Bank of India chairman Rajnish Kumar has said in his book that the Reserve Bank of India should have sacked the Yes Bank board five months earlier in November 2019 as the bank was already losing deposits and defaulting on reserve requirements.

In his book, ‘The Custodian of Trust’, the former SBI chairman has provided some behind-the-scenes glimpses of what went into resolving something that appeared as a Lehman Brothers moment for India. It was during his tenure that the financial sector was hit by the triple failure of IL&FS, DHFL and Yes Bank.

Giving a hint of the workings of Yes Bank, Kumar reveals how the private lender stepped in to help GVK attain financial closure for its Navi Mumbai project. The Rana Kapoor-promoted bank had charged a high upfront fee even when SBI — which was several times bigger and facing pressure from various authorities — was reluctant given the group’s stressed situation. He has also questioned the delay in deciding on the reappointment of Kapoor, which left the RBI with no choice but to offer a three-month extension up to January for Kapoor.

Pointing out that Yes Bank’s plan to raise capital was not well thought out and the board had not applied its mind to a revival plan, Kumar said, “The action that the RBI took as late as March 2020 could probably have been taken as early as November 2019. But everyone is wiser in retrospect.”

Kumar has also dwelt extensively on the Jet Airways collapse. According to him, the SBI board was wary of backing Kumar on a resolution plan for the airline without a letter of comfort from the finance or aviation ministries. The airline’s fate was finally sealed after Etihad rejected the resolution plan.

According to Kumar, the negotiations with Etihad had turned ugly with both Jet promoter Naresh Goyal and SBI coming around to the view that Etihad was only interested in the Jet Privilege programme where it held stake and wanted to open this to other airlines. When this was mentioned to Etihad CEO Tony Douglas in a meeting by SBI MD Arijit Basu, the Etihad chief moved menacingly towards Basu and was stopped by Kumar’s intervention.

Kumar, whose tenure coincided with the great bad loan clean-up in Indian banks, also exposes some bitterness in banks taking the fall for a collective failure among stakeholders. “Attributing non-performing loans entirely to crony capitalism or zombie lending only highlights the lack of an in-depth analysis of the situation, in turn causing resentment among bankers,” he said.

The book, which is published by Penguin, is dedicated to the late Arun Jaitley who Kumar says guided him in crucial decisions. It was Jaitley who supported SBI’s decision to bite the bullet and provide for bad loans with a wry statement in Hindi: “Aur kya kar sakte hain, Rajnishji? (What else can be done?)”

Another interesting fact is that the reclusive former governor Urjit Patel, who was earlier on the SBI board, met Kumar only once during his tenure and closed the doors for all communication with banks.



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RBI slaps penalty on SBI, StanChart

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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.95 crore on Standard Chartered Bank (StanChart)-India and ₹1 crore on State Bank of India (SBI).

In the case of StanChart, RBI has imposed the monetary penalty for non-compliance with its directions on ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’, ‘Cyber Security Framework in Banks’, ‘Credit Card Operations of banks’ and ‘Creation of a Central Repository of Large Common Exposures – Across Banks’ .

Non-compliance

In the case of SBI, the central bank has imposed the monetary penalty for non-compliance with its directions contained in ‘Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016’.

RBI had conducted a Statutory Inspection for Supervisory Evaluation (ISE) of StanChart with reference to its financial position as on March 31, 2020. The central bank, in a statement, observed that examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, non-compliance with the above-mentioned directions to the extent of: failure to credit (shadow reversal) the amount involved in the unauthorised electronic transactions; and not reporting cyber security incident within the prescribed time period.

Further, RBI found non-compliance with directions relating to authorising the direct sales agents (outsourced third party) to conduct KYC (know your customer) verification; and failure to ensure integrity and quality of data submitted in Central Repository of Information on Large Credits (CRILC).

RBI said, in furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of / non-compliance with the aforesaid directions, as stated therein.

“After considering the bank’s replies to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of / non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions,” per the central bank.

In the case of SBI, RBI had carried out a scrutiny in a customer account maintained with SBI and the examination of the scrutiny report and all related correspondence pertaining to the same, revealed, inter alia, non-compliance with the aforesaid directions to the extent of delay in reporting of fraud in the said account to RBI.

In furtherance to the same, a notice was issued to the bank advising it to show cause why penalty should not be imposed on it for such non-compliance with the said directions.

“After considering the bank’s reply to the notice and oral submissions made by the bank in the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions,” the statement said.

In the case of both the banks, RBI said its action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.

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SBI General Insurance expects 20% growth in FY22

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SBI General Insurance is expecting close to 20 per cent growth in business in FY22 backed by a steady demand for health insurance products and an improvement in motor insurance starting third quarter of this fiscal.

In the first half (April-September), the non-life insurer had witnessed 14 per cent growth in gross direct premium underwritten to ₹4,129 crore, as compared with ₹3,620 crore in the same period last year, as per data available on the IRDAI website.

According to Prakash Chandra Kandpal, MD & CEO, SBI General, the non-life industry has come back to the pre-Covid level and has clocked a growth of around 13 per cent in the first half of this fiscal. “The industry is estimated to grow by around 15 per cent during the current fiscal driven mainly by health and motor. Though there may be some challenge for motor due to chip issue, Q3 should be good for motor insurance. We (at SBI General) expect to grow by around 20 per cent. The key areas of focus for us will be health, motor, SME and rural,” Kandpal told BusinessLine.

The second half of the fiscal is usually considered to be busy season and with the economy opening and with vaccination gaining pace, the insurer is hopeful of clocking a good growth.

Motor insurance accounts for nearly 25 per cent of SBI General’s total business; crop around 25-30 per cent; health close to 20 per cent; fire 15 per cent and others account for remaining 10-12 per cent.

Growing demand

Health insurance, which had been witnessing traction on the back of government initiatives such as Ayushman Bharat, came to the fore due to Covid related hospitalisation and the rise in medical cost. With the kind of effort given by the government in creating medical infrastructure in the country, the total health insurance industry is expected to double in the next three-to-four years.

“After the second wave we saw an increased interest in both retail as well as group health cover. Companies doubled the coverage for their employees. We are seeing a 40-50 per cent growth in health insurance industry portfolio and this trend is expected to continue moving forward as the uninsured population in India is still high,” he said.

This apart, a majority of the people who have health insurance, are not “adequately covered”. Most consumers in India have an average health cover of ₹ 3-5 lakh. However, the recent spike in hospitalisation and the increased medical cost is pushing more and more people to go in for a higher cover.

‘Claims spike’

On the claims side, the non-life insurers had witnessed a sudden spike in claims in Q1 of this fiscal due to the second wave. However, with the increase in vaccination and with people becoming more aware and paying more attention to health and fitness, the claims could be more manageable for insurers.

“The spike in claims was mainly because of the non-standardised protocol being followed by the medical industry. Moving forward we may see that the number of claims may increase but the average claims might be lower,” he said.

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SBI to hold e-auction of mortgage properties of defaulters, BFSI News, ET BFSI

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The State Bank of India (SBI) will hold an e-auction of the mortgage properties, like residential properties and commercial properties, of defaulters to recover the bank dues. The auction will be held on October 25, 2021.

Details of such properties put up for e-auctions can be accessed through the links provided on the official website. There is also a designated contact person for auction at the branches, whom prospective buyers can approach for any clarification.

Requirements for participating in e-auction

> EMD for the particular property as mentioned in the e-auction notice.

> KYC Documents – to be submitted to the concerned Branch.

> Valid Digital Signature -Bidders may approach e-auctioneers or any other authorised agency to obtain digital signature.

> Login ID and Password– Will be sent to the email id of the bidders by e-auctioneers after the deposit of EMD and submission of KYC documents to the concerned branch.

> Bidders to login and bid during the auction hours on the date of e-Auction as per auction rules.



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Four Indian banks rise in Asian rankings on stock market boom, BFSI News, ET BFSI

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Four Indian banks have featured among the 20 largest banks in the Asia-Pacific region in terms of market capitalisation in the third quarter of 2021, according to S&P Global Market Intelligence.

HDFC Bank was ranked seventh with a market cap of $119 billion, a quarter on quarter increase of 6.7 per cent while the next was ICICI Bank at 12th spot, with its market cap rising 11.2 per cent quarter on quarter to $65.5 billion.

The State Bank of India rose two spots to 17th on the list as its market cap rose 8.1 per cent to $54.5 billion. Kotak Mahindra Bank‘s market capitalisation rose 17.5%, the highest on the list.

S&P Global’s banking outlook

The global banking sector will continue to slowly stabilize as the economic rebound gains momentum and as support is gradually withdrawn. Should a re-intensification of risks occur, more support from authorities for the real economy would be required. This in turn would help banks maintain a stabilizing trajectory. Strategies and tactics to combat Covid vary enormously across banking jurisdictions. This includes the progress with vaccination campaigns that affects a range of factors, particularly trade and travel.

Corporate default rates will fall from their COVID-19 peak. However, problematic corporate lending and other exposure will likely continue to strain banks’ asset quality metrics, it said.

Some corporate sectors have experienced no credit deterioration, such as grocery and essential retail, and technology software, while other corporate sectors are recovering sooner than previously expected. Still other sectors, however, such as autos, hotels and airlines won’t likely recover until 2023 or beyond, S&P Global said.

With debt levels at or near record highs, some corporates and governments remain vulnerable to credit deterioration and defaults if income recovers more slowly than expected. This is especially if interest rates rise, S&P Global added.

Indian banks’ outlook

Banks are likely to post over 20 per cent jump in profit in the second quarter with analysts expecting a decent sequential improvement in almost all indicators from loan growth to gross bad loan ratios.

According to Bloomberg estimates, for the 19 lenders — five public sector and 14 private banks – profit would grow 21.7 per cent to Rs 32,075 crore in Q2 year on year.

Private banks are likely to report PPoP growth of 9% YoY (3.8% QoQ) and net profit growth of 14% YoY (17.3% QoQ). Earnings are likely to pick up, led by a recovery in business growth / fee income and a gradual reduction in credit costs.

“Loan growth would pick up, led by revival in economic activity and the opening up of the economy. Demand going into the festive season and commentary around the FY22 outlook would be key monitorables. Retail and SME segment is likely to show strong recovery; though growth in the Corporate segment is likely to remain soft and recovery within this segment would be another monitorable,” according to Motilal Oswal Securities.



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Sensex, Nifty on a choppy note; bank stocks decline, BFSI News, ET BFSI

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Equity benchmarks Sensex and Nifty opened on a choppy note on Tuesday, tracking weakness in index heavyweights Infosys, ICICI Bank and HCL Tech amid a negative trend in global markets.

After swinging over 200 points in the opening session, the 30-share Sensex was trading 34.62 points or 0.06 per cent lower at 60,101.16. Similarly, the Nifty slipped 2.45 points or 0.01 per cent to 17,943.50.

HCL Tech was the top loser in the Sensex pack, shedding over 2 per cent, followed by M&M, Infosys, Tech Mahindra, ICICI Bank, Bajaj Finance and IndusInd Bank.

On the other hand, Bajaj Auto, Titan, Dr Reddy’s, SBI and ITC were among the gainers.

In the previous session, the 30-share index closed 76.72 points or 0.13 per cent higher at 60,135.78, and Nifty rose 50.75 points or 0.28 per cent at its all-time closing high of 17,945.95.

Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 1,303.22 crore on Monday, as per exchange data.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the resilience of the market in general, and the momentum in the broader market in particular, can be explained only by one factor – the exuberance and dominance of the newbie retail investors.

Institutional selling is easily getting absorbed by retail investors who are not concerned about valuations, he noted.

Weakness in IT and strength in banking which expectedly played out in the previous session need not become a trend. Results of Infosys, Wipro and HCL Tech may not disappoint the market like TCS, he said, adding that results of TCS were good – only fell short of market expectations.

“Now, INR at 75.35 to the dollar is becoming a major tailwind for IT. So, investors should remain invested in IT and even buy on declines since the demand environment for the sector remains robust. Crude at $84 and its potential inflation fall out are areas of concern,” he stated.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with losses in mid-session deals.

Stock exchanges in the US too ended on a negative note in the overnight session.

Meanwhile, international oil benchmark Brent crude fell 0.07 per cent to $83.59 per barrel.



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Sensex, Nifty capture new heights; auto, banking shares shine, BFSI News, ET BFSI

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Mumbai, Equity benchmarks Sensex and Nifty on Monday scaled new peaks by continuing their winning run to the third session in a row, propelled by gains in mainly auto, power and banking shares.

After scaling a new intraday high of 60,476.13 during the session, the 30-share Sensex closed 76.72 points or 0.13 per cent higher at 60,135.78 – marking its new closing high as well.

Similarly, the Nifty rose 50.75 points or 0.28 per cent to its all-time closing high of 17,945.95. Intraday, the NSE gauge touched a new peak of 18,041.95.

Maruti was the top gainer in the Sensex pack, rallying nearly 4 per cent, followed by PowerGrid, ITC, NTPC, SBI, M&M, Kotak Bank and HDFC Bank.

On the other hand, TCS was the top loser on the Sensex, shedding over 6 per cent, after the company’s Q2 earnings missed street expectations.

According to an Emkay Global note, TCS Q2 operating performance missed expectations, reporting lower-than-expected revenue and earnings before interest, taxes and corporate overhead or management (EBITM).

The company on Friday reported a 14.1 per cent rise in consolidated net profit at Rs 9,624 crore in the September 2021 quarter.

Following suit, Tech Mahindra, Infosys, HCL Tech and Reliance Industries fell up to 2.76 per cent.

Sectorally, BSE utilities, power, auto, metal, realty and bankex rose up to 2.80 per cent, while IT, teck, telecom and energy fell up to 2.87 per cent.

Broader midcap and smallcap indices rose up to 0.60 per cent.

Indian markets started on a positive note following positive Asian market cues as investors took comfort on news of opening up more vaccinated travel lanes in 8 countries as COVID cases declines, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.

“During the afternoon session, markets continue to trade handsomely as broad gains in rate sensitive counters, viz, auto, realty and utility. Traders also took support as data showed country’s exports growing at a healthy rate. Exports have touched USD 197 billion during April-September this fiscal.

“Additional optimism came in as foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 1,997 crore so far in October,” he added.

Elsewhere in Asia, bourses in Hong Kong and Tokyo ended with gains, while Shanghai was in the red.

Stock exchanges in Europe were largely trading with losses in mid-session deals.

Meanwhile, international oil benchmark Brent crude rose 2.12 per cent to USD 84.14 per barrel.

The Indian rupee ended 37 paise lower at 75.36 against the US dollar on Monday. PTI ANS MKJ



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Advisory fees of investment bankers drops to 3-year low at $761 million, BFSI News, ET BFSI

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Advisory fees of investment bankers have fallen $761.5 million, the lowest in three years, said a report by Refinitiv, an entity owned by the London Stock Exchange.

During the first nine months of 2021, SBI Caps led the underwriting fees league table with 8.6 percent wallet share or $65.7 million. Morgan Stanley comes next with 6.3 percent with $48.1 million, followed by JPMorgan at 6.2 percent with $47.5 million.

Goldman Sachs stood at fourth with $46.7 million or 6.1 percent of the market pie. Axis Bank got $46.7 million or 6.1 percent share, while ICICI Bank had $40.4 million, 5.3 percent.

BofA Securities got $33.5 million for a 4.4 percent deal share, Kotak Mahindra Bank at $32.8 million, 4.3 percent, Citi at USD 29.1 million, 3.8 per cent, and Avendus Capital stood at the 10th place with $23.3 million for a 3.1 percent deal share.

ICICI Bank leads with $2.5 billion, 11.3 percent of the market share in ECM league table.

Since the deal making process is online, the i-banking fees have dropped as merchant bankers are charging less from their clients. Another reason for the drop is the higher average deal value size of $105 million, which was up 14.4 percent year-on-year with 17 deals topping the $1-billion mark and totalling $38.8 billion, compared with 12 deals above $1 billion worth a total of $30.1 billion on a year-on-year basis.



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M-cap of 8 of top-10 most valued cos jump Rs 2.32 lakh cr; Reliance Industries lead gainer, BFSI News, ET BFSI

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Eight of the top-10 most valued companies together added a whopping Rs 2,32,800.35 crore in market valuation last week in-tandem with rally in the broader market, with Reliance Industries and Tata Consultancy Services emerging as the biggest gainers. Last week, the 30-share BSE benchmark rallied 1,293.48 points or 2.20 per cent. The benchmark soared past the 60,000 level on Friday.

The market valuation of Reliance Industries zoomed Rs 93,823.76 crore to reach Rs 16,93,170.17 crore.

Tata Consultancy Services added Rs 76,200.46 crore taking its valuation to Rs 14,55,687.69 crore.

The valuation of Infosys jumped Rs 24,857.35 crore to Rs 7,31,107.12 crore and that of Bajaj Finance gained Rs 12,913.91 crore to Rs 4,66,940.59 crore.

The market capitalisation (m-cap) of HDFC Bank rallied Rs 10,881.09 crore to Rs 8,87,210.54 crore.

ICICI Bank added Rs 7,403.24 crore to Rs 4,87,388.37 crore in its valuation.

The valuation of State Bank of India jumped Rs 5,310.14 crore to Rs 4,08,479.47 crore and that of HDFC gained Rs 1,410.4 crore to Rs 4,91,841.14 crore.

In contrast, the valuation of Hindustan Unilever Limited diminished by Rs 14,614.46 crore to Rs 6,20,362.58 crore.

Kotak Mahindra Bank’s market valuation also tumbled Rs 11,697.38 crore to Rs 3,83,866.29 crore.

Reliance Industries was leading the chart of the top-10 most valued companies list followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, HDFC, ICICI Bank, Bajaj Finance, State Bank of India and Kotak Mahindra Bank. PTI SUM ANS ANS



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