Tag: state bank of india

Ex-SBI chairman Chaudhury’s bail plea rejected in loan scam case, BFSI News, ET BFSI

Banking & Finance

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The Chief Judicial Magistrate of Jaisalmer Court on Monday rejected the bail application of former SBI chairman Pratip Chaudhury, arrested in the Jaisalmer hotel loan fraud case, and sent him to judicial custody till November 15.

The former SBI chairman will now have to spend his Diwali behind bars, said sources.

He will be in judicial custody for 15 days till November 15, they added.

Pratip Chaudhury was arrested from Delhi on Sunday and brought to Jaisalmer on Monday.

After that he was produced in the court of Chief Judicial Magistrate, his lawyer moved the bail application, but CJM Hanuman Sahai Jat after hearing rejected the bail application of Pratip Chaudhury and ordered to send him to judicial custody till November 15, following which he was was taken to jail.

The case relates to a hotel group in Jaisalmer which took a loan of Rs 24 crore from SBI in 2008. When the hotel group did not pay full instalments of the loan, the bank allegedly went against the RBI rules and declared it NPA after confiscating the property. It is alleged that later the property was also sold in a wrong manner. At present, the value of this property is being said to be around Rs 200 crore.

The SBI in a statement said that all the facts of the case were not presented before the court properly and SBI was not made a party to the case.

“‘Garh Rajwada’ was a hotel project in Jaisalmer, financed by the Bank in 2007. The project remained incomplete for over 3 years and the key promoter passed away in April 2010. The account slipped into NPA in June 2010. Various steps taken by the Bank for completion of the project as well as recovery of dues didn’t yield desired results. Hence as part of Bank’s recovery efforts, the dues were assigned to an ARC for recovery in March 2014. This sale to ARC by the Bank was done through a laid down process as per the policy of the Bank. “We further understand that the borrower was subjected to IBC process by the said ARC and the asset has been acquired by an NBFC in December 2017, again through due process under the orders of NCLT, Delhi,” the statement said.

“As recovery efforts failed, approvals for sale to ARC were taken in Jan 2014, the assignment to ARC was completed in March 2014. It transpires now that the borrower had initially filed an FIR with the State Police against the sale of asset to ARC. Aggrieved against the negative closure report filed by Police authorities, the borrower had filed a ‘Protest petition’ before the Hon’ble CJM Court. Incidentally SBI was not made a party to this case. All the directors of that ARC including Chaudhuri, who joined their Board in October 2014, have been named in the said case. Incidentally, Chaudhuri retired from Bank’s service in September 2013.

“It appears from the copies of the proceedings now accessed by us that the Hon’ble Court does not appear to have been briefed correctly on the sequence of events. In as much as SBI was not a party to this case, there was no occasion for the views of SBI being heard as part of this proceedings. SBI would like to reiterate that all due process were followed while making the said sale to ARC. The Bank has already offered its cooperation to the Law Enforcement and Judicial authorities and will provide further information, if any that may be called for from their side,” the SBI statement added further.



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Here’s what top banks are offering this festive season, BFSI News, ET BFSI

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While the COVID-19 and the resultant lockdown affected the celebrations last year, the festive season finally seems to be getting back on track.

The country is celebrating Diwali this week, giving an opportunity to companies and banks to incentivise their business by offering discounts on a range of items from jewellery to smartphones.

The lockdown was heavy on most, and affected the finances of several families. However, to ensure that these temporary setbacks do not come in the way of Diwali shopping and celebrations, a number of festive offers are up for grabs this year.

State Bank of India- #KhushiyonKaSwagat

This Diwali, if a customer of State Bank of India (SBI) applies for a car loan through YONO app, then they can get an interest rate concession of up to 0.5%, with zero processing fees, the bank said in a tweet.

Customers can get cash back offers up to Rs 2,500 on every purchase on e-commerce sites such as Flipkart and Amazon. Besides, one can get instant loan approval now.

The bank is offering car loans from 7.25%, gold loans from 7.50%, personal loans from 9.60%.

Additionally, the home loan offer which was started in September is still there. SBI currently offers home loans at only 6.7% for any amount and any tenure without any processing fees.

ICICI Bank- #FestiveBonanza

ICICI Bank launched ‘Festive Bonanza’ with a complete range of offers, heavy discounts and cash back available on a range of products, including luxury items from premium brands and leading e-commerce platforms.

As part of the ‘Festive Bonanza’, the bank is offering up to 20% cash back and discount on every purchase on Amazon, Myntra, Flipkart, Jiomart, Reliance Digital, among other platforms.

Besides, benefits are there for retail and business customers on various banking products and services such as home loan, car loan, overdraft facility and others.

Diwali 2021: Here's what top banks are offering this festive season

HDFC Bank- #FestiveTreats

HDFC bank has partnered with over 10,000 merchants across more than 100 locations to offer special deals specifically created for their personal and business needs in this Diwali time.

Benefits offered to customers include cash backs and no-cost EMIs on premium mobile phones, up to 22.5% cash back and no-cost EMI on electronics and consumer goods such as washing machines and refrigerators on shopping platform Amazon by using HDFC Bank’s credit and debit cards.

Personal loans starting at 10.25% interest with instant disbursal in account are also there. Customers can avail car loans starting at 7.50% with zero foreclosure charges and funding of up to 100% on two-wheeler loans and 4% less on interest rates, the bank said

BOI- #BOIUtsav

Bank of India has announced a 35 basis-point cut in its home loan interest rates and 50 basis-point reduction in vehicle loan interest rates. The minimum rate now starts at 6.50% against 6.85% on home loans and 6.85% against 7.35% earlier on vehicle loans.

This special rate, which was effective from October 18 till December 31, is available for customers applying for fresh loans, and for those seeking transfer of loans. Processing charges have also been waived for both the loans till 2022.

Axis Bank- #DilSeOpenCelebrations

Axis Bank is offering waivers of 12 EMIs on select home loan products in this festive season and providing on-road finance without any processing fees for two-wheelers customers.

To boost local retailers during this season, Axis Bank has roped in more than 2,500 local stores across 50 cities. The bank customers will get discounts up to 20% on shopping from these stores. Besides, one can get 10% or more cash back when purchasing on popular e-commerce platforms such as Flipkart and Amazon.

BOB- #KhushiyonKaTyohaar

Bank of Baroda also extended Diwali offers. This bank has slashed interest rates on both home car loans that start from 6.5% and 7% respectively. Processing charges are also waived for both the loans.



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Mcap of five of top-10 most valued firms down by over Rs 1.42 lakh cr; HUL, RIL most hit, BFSI News, ET BFSI

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New Delhi, The combined market valuation of five of the top-10 most valued companies eroded by Rs 1,42,880.11 crore last week, with Hindustan Unilever, Reliance Industries and Tata Consultancy Services emerging as major laggards. Last week, the 30-share BSE benchmark Sensex declined by 484.33 points or 0.79 per cent. Market benchmarks — Sensex and Nifty — declined for the fourth consecutive session on Friday.

The market valuation of Hindustan Unilever Ltd (HUL) tumbled Rs 45,523.33 crore to reach Rs 5,76,836.40 crore.

Reliance Industries Ltd (RIL) valuation eroded by Rs 45,126.6 crore to Rs 16,66,427.95 crore and Tata Consultancy Services (TCS) market worth tanked by Rs 41,151.94 crore to Rs 12,94,686.48 crore.

The market capitalisation (Mcap) of Bajaj Finance plunged Rs 8,890.95 crore to Rs 4,65,576.46 crore and that of HDFC Bank Ltd fell by Rs 2,187.29 crore to Rs 9,31,371.72 crore.

In contrast, Kotak Mahindra Bank added Rs 30,747.78 crore taking its valuation to Rs 4,30,558.09 crore.

ICICI Bank‘s market valuation zoomed by Rs 22,248.14 crore to reach Rs 5,26,497.27 crore.

The valuation of HDFC jumped Rs 17,015.22 crore to Rs 5,24,877.06 crore and that of State Bank of India gained Rs 11,111.14 crore to Rs 4,48,863.34 crore.

Infosys added Rs 1,717.96 crore taking its valuation to Rs 7,29,410.37 crore.



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NARCL may get first bad loans tranche of Rs 90,000 crore by January, BFSI News, ET BFSI

Banking & Finance

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The National Asset Reconstruction Company (NARCL), or bad bank, is likely to get the first tranche of bad assets worth about Rs 90,000 crore by January 2022, according to a report. In the first phase, fully-provisioned toxic assets will be transferred.

Finance Minister Nirmala Sitharaman in the budget for 2021-22 had announced that an asset reconstruction company or a bad bank would be set up to consolidate and take over existing stressed assets of lenders and undertake their resolution. A bad bank refers to a financial institution that takes over bad assets of lenders and undertakes resolution.

Last month, the Cabinet had approved a proposal to offer sovereign guarantee on the security receipts (SRs) issued by the NARCL, It is estimated to cost the govenrment Rs 30,600 crore over five years.

Recovery hopes

The bad bank hopes to recover between Rs 50,000 crore and Rs 64,000 crore through the resolution of bad loans amounting to Rs 2 lakh crore.

NARCL may get first bad loans tranche of Rs 90,000 crore by January

The lowest recovery is seen at 25 per cent or Rs 50,000 crore, while the highest recovery rate is pegged at 32 per cent, or Rs 64,000 crore. The most likely recovery has been pegged at 28 per cent or Rs 56,000 crore.

The NARCL will buy the assets around Rs 36,000 crore or, about 18 per cent of the book value of Rs 2 lakh crore assets. About 15 per cent of Rs 36,000 crore would be paid by NARCL to banks in cash and the remaining 85 per cent via security receipts guaranteed by the Centre.

Close to liquidation

Though banks have made 100% provision for these assets, Rajkiran Rai, MD & CEO of Union Bank of India, does not expect more than 20-25 per cent recovery from these legacy accounts, he told a television channel.

The State Bank of India has identified NPAs with Rs 17,000-18,000 crore outstanding to be transferred to the NARCL, while Punjab National Bank has identified Rs 8,000 crore worth of NPAs, Union Bank of India Rs 7,800 crore of NPAs to be transferred to the National ARC. The Bank of India has identified about Rs 5,500 crores of assets for transfer while Indian Bank about Rs 1,900 crore.

Assets

NARCL may get first bad loans tranche of Rs 90,000 crore by January

Banks have identified Rs 82,496 crores worth of bad loans that could be transferred to the NARCL, which has names like Videocon’s VOVL (Rs 22,532 crores total exposure), Reliance Naval and Engineering Ltd (Rs 8,934 crore), Amtek Auto (Rs 9,014 crore), Jaypee Infratech (Rs 7,950 crore, Castex Technologies (Rs 6,337 crore), GTL Ltd (Rs 4,866 crore), Visa Steel (Rs 3,394 crore), Wind World India Ltd (Rs 3,161 crore), Lavasa Corporation (Rs 1,424 crore), Consolidated Construction Consortium Ltd (Rs 1,353 crores).

Several assets such as Videocon have seen realisable value close to liquidation value in NCLT proceedings. Many big-ticket resolutions at IBC have seen haircuts over 90%. With most of the NPAs proposed to be transferred to the bad bank being old legacy NPAs, there has been an erosion in value, making them more likely to head to liquidation.

Lavasa Corporation has got bids worth Rs 700 crore for loan claims of over Rs 8,000 crore at NCLT.



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ICICI Bank seeks buyers for Rs 338-crore exposure to Soma Infrastructure

Banking & Finance

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In an order dated September 20, the Hyderabad ‘B’ bench of the Income Tax Appellate Tribunal had said that Soma Infrastructure was a subsidiary of Soma Enterprise.

ICICI Bank on Monday sought expressions of interest (EoIs) from asset reconstruction companies (ARCs) for its Rs 338-crore exposure to Soma Infrastructure. The asset is being offered on a full-cash basis. Soma Infrastructure is a Hyderabad-based company that owes ICICI Bank over Rs 149 crore in principal dues, and another Rs 189 crore in accrued interest and other charges.

In an order dated September 20, the Hyderabad ‘B’ bench of the Income Tax Appellate Tribunal had said that Soma Infrastructure was a subsidiary of Soma Enterprise. “…it is clear that assessee is a subsidiary company and assessee has diverted the funds sanctioned by ICICI Bank to the step down subsidiaries i.e. Beta Infratech P. Ltd. and Soma Jabalpur Rewa Tollway Pvt. Ltd.(SPV),” the tribunal observed in the order.

The tribunal further said that Soma Infrastructure is a company incorporated and active in providing consultancy services to its parent company and has no other business connections with the other step-down subsidiaries of Soma Enterprise, except related concern. “The assessee was utilised by the parent company to source the funds from the bank after giving the required bank guarantee. “The funds were utilised by the step down companies and we notice that assessee has advanced to M/s Beta Infratech as long term unsecured loan,” the order said. The funds were utilised in the business for the purpose of making payments for fixed assets and capital work-in-progress. At the same time, Soma Jabalpur Rewa Tollway received the loan from Soma Infrastructure and diverted it to the holding company, the appellate tribunal said.

In February this year, lenders to the parent company Soma Enterprise, led by State Bank of India, had also initiated the process for selling their loans. The loans to this company stood at Rs 2,099 crore as on March 31, 2020, while investments in it were to the tune of Rs 1,345 crore.

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

Banking & Finance

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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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Bank FD to fetch negative real interest with elevated inflation, BFSI News, ET BFSI

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New Delhi, Oct 12 (PTI) Senior citizens and others depending upon income from bank fixed deposit (FD) schemes will be at the receiving end with the retail inflation exceeding the interest rates. The Reserve Bank of India (RBI) in its latest monetary policy review has projected retail inflation at 5.3 per cent for the current financial year.

Last week, the RBI said that the Consumer Price Index (CPI)-based inflation is now projected to be at 5.3 per cent for 2021-22 with risks evenly balanced.

At this level, the fixed deposit for one year with the country’s largest lender State Bank of India (SBI) would rather earn negative interest. The real interest rate would be (-) 0.3 per cent for the saver.

Real rate of interest is card rate minus inflation rate. The retail inflation for August stood at 5.3 per cent.

Even for higher tenure 2-3 years, the interest rate earned is 5.10 per cent lower than expected inflation for the current fiscal.

In the private sector, the market leader HDFC Bank offers 4.90 per cent interest rate for 1-2 year fixed deposits while 5.15 per cent for 2-3 years.

However, small savings schemes run by the government offers better return compared to fixed deposit rates of banks. For term deposits 1-3 years, the interest rate offered is 5.5 per cent higher than inflation target.

There is natural advantage of moving money from bank FD to government saving schemes as rates are slightly higher. Thus, the real rate of interest is in the positive territory.

Experts said that it is a usual phenomenon that real returns are negative in a crisis and post-recovery world, given the way fiscal stimulus to overcome difficulty.

India is no exception and in fact, new asset allocation patterns would need to emerge, with more allocation to real assets from financial assets.

Real rates are going to be negative for a while, given that the post crisis repairs may take some time and it is imperative that financial literacy initiatives guide people into making the right investment choices, Grant Thornton Bharat partner Vivek Iyer said.

“A negative rate of interest, for savers on bank deposits, these days, is a reality, which the depositors have to face because of a complex set of factors.

“The present average savings deposit rate offered by banks which is around 3.5 per cent and less than five per cent rate on one year deposit indicates a negative return, not even covering the expected inflation rate,” Resurgent India Managing Director Jyoti Prakash Gadia said.

The impact of negative interest on bank savings deposits is obvious, with lower growth of such deposits and the public now seeking alternatives like mutual funds and equity for better returns.

The options although involving more risk have shown phenomenal growth which is likely to continue till inflation is tamed or bank deposit rates are substantially increased, Gadia added. PTI DP CS HRS hrs



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Banks set for a sharp earnings rise in Q2, may face asset quality jitters, BFSI News, ET BFSI

Banking & Finance

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Indian banks’ earnings are likely to pick up in the September quarter, led by a recovery in business growth, fee income and a gradual reduction in credit costs.

However, they may be tempered by higher provisioning in the retail and small and medium enterprises (SME) loan segments that have seen higher delinquencies.

Earnings growth

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 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.

Banks are likely to report earnings growth of 41% in the fiscal year 2021-22, it said.

PSBs to report improved operating performance, supported by modest business growth and a gradual reduction in provisions. Opex is likely to remain elevated on account of the revised guidelines on pension provisions.

SBI NPAs may decline

As per analyst estimates, State Bank of India could post a further decline in bad loans and could see a moderation in credit costs. Private lender ICICI Bank appears firmly placed to deliver healthy sustainable growth, led by its focus on core operating performance. It may utilise higher buffers in case of a possible asset quality impact.

Exchange filings have shown HDFC Bank has posted strong credit growth in the September quarter and after the embargo being lifted on sanctioning credit cards, the bank is poised for a healthy revival in retail loans.

Estimates suggest that ICICI Bank could deliver 16.6% year-on-year loan growth, while Axis Bank and Kotak Mahindra Bank could grow over 9% each.

For state-run banks, operating expense is likely to remain elevated on account of the revised guidelines on pension provisions.

Asset quality

Asset quality could pose challenges with near-term slippages expected in the retail, SME and microfinance segments. Though analysts said there could be a decline over the June quarter.

Slippages would remain elevated, led by the Retail and SME segment; however, the quantum is likely to moderate, keeping asset quality in check – barring mid-sized banks, which could see marginal deterioration. Corporate slippages could see an uptick due to the downgrade of SREI Infra which is likely to get offset by the recoveries from DHFL resolution



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North Delhi Municipal corpn inks pact with SBI for digital payment, BFSI News, ET BFSI

Banking & Finance

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North Delhi Municipal Corporation has signed a Memorandum of Understanding (MoU) with State Bank of India (SBI)to boost online digital payment collection for municipal services.

SBI e-Pay is the payment aggregator service wing of the bank, which will facilitate online payment of municipal taxes and other fees by citizens.

One can pay taxes and dues of online municipal services such as registration of birth and death, property tax and e-mutation, health trade, general trade, veterinary trade and factory licence application services, for booking parks and community halls, renewal of tehbazari, hawking and hackney carriage through SBI ePay Gateway, said a north corporation official.

Commissioner Sanjay Goel said that the SBI e-Pay is the payment aggregator service wing of the bank, which will facilitate online payment of municipal taxes/fees.

“It provides digital access and to make e-governance services available to the citizens. The initiative is a step towards the Digital India Programme and to provide municipal services to the citizens of North Delhi in a digital way,” he said.



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