Reserve Bank of India – Press Releases
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Kerala Financial Corporation announces special loans for MSMEs
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Kerala Financial Corporation (KFC), a leading State-level financial institution, has launched a special loan product to the Micro, Small and Medium Enterprise (MSME) sector, aiming to assist them execute work orders and also discount pending bills.
Under the scheme, 75 per cent of the cost of work received from government departments/agencies/PSUs will be provided as a loan, a spokesman for the corporation said.
Duration of work
Repayment will depend on the duration of work and expected receipt of funds from the work-awarding authority. The rate of interest will be linked to the credit rating score of the MSME, starting at eight per cent.
Considering the Covid-19 situation, the credit rating of the MSME will be based on analysis of the balance sheet during the pre-Covid period, the spokesman said.
Once the work awarding authority accepts the bill, MSMEs can immediately get up to 90 per cent of the bill amount through discounting. For final bills, the discounting can be done without security also.
Discounting facility
MSMEs play an important role in the economic growth of the country. But they continue to face constraints in obtaining adequate finance, particularly in terms of sourcing funds required to execute work orders or convert bill receivables into liquid funds. The new scheme from Corporation will be appropriate to address such issues during this pandemic period, the spokesman said.
The applicant should be MSME Udyam registered to become eligible for the scheme. GST registration and the latest audited balance sheet are also mandatory. However, GST registration will not apply to MSMEs exempt from registration.
An audited balance sheet may not be insisted with respect to MSMEs with annual turnover of up to ₹2 crore, paying income tax on a presumptive basis.
The loan will be sanctioned as a Line of Credit (LoC) for a five-year period during when MSMEs can avail facilities such as guarantees, work execution loans, bill discounting, government promissory note discounting and equipment finance.
Maximum assistance
Maximum assistance will be ₹20 crore for companies/registered cooperative societies and ₹8 crore for others. However, the limit for guarantees and discounting of government promissory notes will be up to ₹50 crore for all entities.
The validity of the LoC is for five years. Once the customers execute the loan agreement, they can avail all facilities throughout the five-year period with minimum formalities. The scheme will be reviewed on the basis of feedback from the MSMEs.
Kerala Financial Corporation targets to disburse at least ₹500 crore under this scheme during the current financial year itself, the spokesman added.
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Fino Payments Bank IPO subscribed 87% on Day 2 of offer, BFSI News, ET BFSI
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The initial public offer of Fino Payments Bank Limited was subscribed 87 per cent on the second day of subscription on Monday. The IPO received bids for 99,90,600 shares against 1,14,64,664 shares on offer, according to exchanges data.
The retail individual investors (RIIs) category was subscribed 4.65 times and that of non-institutional investors 10 per cent.
The initial public offer (IPO) comprises a fresh issue of up to Rs 300 crore and an offer for sale of up to 1,56,02,999 equity shares.
The price range for the offer is Rs 560-577 per share.
Fino Payments Bank had on Thursday said it has garnered Rs 539 crore from anchor investors.
At the upper end of the price band, the initial share sale is expected to fetch Rs 1,200.3 crore.
Proceeds from the fresh issue would be used towards augmenting the bank’s Tier-1 capital base to meet its future capital requirements.
Fino Payments Bank or FPBL is a scheduled commercial bank serving the emerging Indian market with its digital-based financial services.
The company is a fully-owned subsidiary of Fino Paytech, a pioneer in technology-enabled financial inclusion solutions.
Fino Paytech is backed by investors like Blackstone, ICICI Group, Bharat Petroleum and International Finance Corporation (IFC).
Axis Capital, CLSA India, ICICI Securities and Nomura Financial Advisory and Securities are the managers of the offer. PTI SUM BAL BAL
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Shiba Inu passes Dogecoin as top “dog” in cryptocurrency, BFSI News, ET BFSI
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SILVER SPRING, Md. – Cryptocurrency has officially gone to the dogs.
The recent trading frenzy over a digital token called Shiba Inu – commonly billed as a “meme” or joke coin – has vaulted the canine-themed cryptocurrency into the top ten most valuable digital assets by market value, hitting $40 billion and surpassing its cousin and apparent inspiration, Dogecoin.
Shiba was up another 10% at midday on Monday and has doubled in value in the past week. Most of that gain came in a flurry of trading last Wednesday, when it gained a whopping 66%.
Even with its recent meteoric rise – it’s up about 900% in the past month – each Shiba coin costs just a tiny fraction of one cent. If you bought $1,000 worth of Shiba in late September, your 20 million coins would now be worth around $9,000.
Like most cryptocurrencies, Shiba is not commonly used for commercial transactions and is considered by most experts and investors to be a high-risk, speculative bet due to the broader volatility of the crypto market. Experts warn that investors need to be cautious about putting money into something with anonymous leadership that appears to have little functional use.
Lee Reiners, an outspoken crypto skeptic, teaches fintech and cryptocurrency courses at Duke University School of Law. Reiners said he’s not surprised by Shiba’s recent spike.
“This is what happens when you have massive speculation in assets with no intrinsic value,” Reiners said.
Investors might be thinking this story sounds familiar. Bitcoin has doubled in value twice this year – with a rapid plunge in between – and now sells for more than $60,000 per coin. Among stocks, GameStop had a surge that rivals Shiba’s, rocketing from about $17 per share in early January to $483 later that month. Lately, it’s consistently traded around $180.
While Shiba is the current white-hot cryptocurrency, you can’t trade it through more traditional brokers – yet. A petition with more than 450,000 signatures on Change.org is pushing for the mobile trading app Robinhood to start allowing Shiba trades. Robinhood currently allows trading of Dogecoin and other cryptocurrencies. Its CEO Vladimir Tenev told investors last week that the company would “carefully evaluate whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements.”
Stronger regulation of the crypto markets seems inevitable, but it’s unclear when it might happen. The chair of the U.S. Securities and Exchange Commission, Gary Gensler, said in August that the world of crypto doesn’t have enough investor protection and compared it to “the Wild West.”
Whether that lack of regulation is driving the recent spikes in Shiba and other digital assets is not clear. What seems apparent though, is that retail investors – the little guys – are leading the way.
Kyle Waters, a research analyst at the blockchain data and analytics firm Coin Metrics, said the median trade size of Shiba on that busy Wednesday was $115. That’s “highly suggestive” that the typical Shiba trader on Coinbase is a small retail trader, Water said.
Shiba’s rise is similar to Dogecoin’s ascent in the spring, when it caught fire and rose jumped from around 5 cents to 57 cents between April 7 and May 7.
Like many other crypto currencies, Shiba is shrouded in mystery. According to its white paper – or “Woof Paper,” in this case – the token was started in 2020 by an anonymous person or group named “Ryoshi.” The paper, which describes how Shiba and its progeny works, is also peppered with soaring-but-vague platitudes about community, freedom, revolution and destroying traditional paradigms.
A person with limited background knowledge of technology and blockchain vernacular would be hard pressed to decipher much of the technical wording in the white paper.
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Income Tax Department Unveils New Annual Information Statement: Details Inside
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Taxes
oi-Vipul Das
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The Income Tax Department yesterday on 1st November 2021 has rolled out the new Annual Information Statement (AIS) on the Compliance Portal which provides a comprehensive view of information to a taxpayer with a facility to capture online feedback. The new AIS can be accessed by clicking on the link “Annual Information Statement (AIS)” under the “Services” tab on the new Income tax e-filing portal (https://www.incometax.gov.in) The display of Form 26AS on the TRACES portal will also continue in parallel till the new AIS is validated and completely operational, claimed Central Board of Direct Taxes in a statement yesterday under the Ministry of Finance and Department of Revenue.
The new AIS includes additional information relating to interest, dividend, securities transactions, mutual fund transactions, foreign remittance information, etc. The reported information has been processed to remove duplicate information. A taxpayer will be able to download AIS information in PDF, JSON, CSV formats, according to the department.
A facility has been established for the taxpayer to submit online feedback if they consider the information is erroneous, refers to another person/year, or is duplicate. Feedback can also be provided in bulk by submitting multiple pieces of information. Taxpayers can also use an AIS Utility to monitor AIS and input feedback in an offline mode. In the AIS, the reported value and the value following feedback will be displayed individually. If the information is changed or rejected, the source of the information may be addressed for clarification and confirmation.
A simplified Taxpayer Information Summary (TIS) has also been generated for each taxpayer which shows the aggregated value for the taxpayer for ease of filing return. TIS shows the processed value (i.e. the value generated after deduplication of information based on pre-defined rules) and derived value (i.e. the value derived after considering the taxpayer feedback and processed value). If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real-time. The derived information in TIS will be used for pre-filing of Returns (pre-filling will be enabled in a phased manner).
Taxpayers should remember that the Annual Information Statement (AIS) includes information presently available with the Income Tax Department. There may be other transactions relating to the taxpayer which are not presently displayed in the Annual Information Statement (AIS). Taxpayers should check all related information and report complete and accurate information in the Income Tax Return, said Income Tax Department.
Taxpayers are asked to review the information in the Annual Information Statement (AIS) and provide feedback if any of it needs to be changed. When submitting the ITR, the value stated in the Taxpayer Information Summary (TIS) may be taken into account. If the ITR has already been submitted and some information has been left out, the return may be updated to add the missing information.
Income Tax Dept rolls out the new Annual Information Statement(AIS) on the Compliance Portal. It provides a comprehensive view of information to taxpayer, with facility to capture online feedback. Click on link ‘AIS’ under the ‘Services’ tab on https://t.co/GYvO3n9wMf to access. pic.twitter.com/Ub4EAgmkLq
— Income Tax India (@IncomeTaxIndia) November 1, 2021
In case there is a variation between the TDS/TCS information or the details of tax paid as displayed in Form 26AS on the TRACES portal and the TDS/TCS information or the information relating to tax payment as displayed in AIS on Compliance Portal, the taxpayer may rely on the information displayed on TRACES portal for the purpose of filing of ITR and for other tax compliance purposes. Taxpayers may refer to the AIS documents (AIS Handbook, Presentation, User Guide, and FAQs) provided in the “Resources” section or connect with the helpdesk for any queries through the “Help” section on the AIS Homepage. the department further clarified.
Story first published: Tuesday, November 2, 2021, 8:26 [IST]
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Rs 45,000 crore IPOs set to fuel India Inc’s capex plans, BFSI News, ET BFSI
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The huge fundraise by companies and start-ups through initial public offerings is set to drive the capex engine of India Inc. With abundant liquidity and a rise in stock market fortunes, companies are rushing to raise money via the primary route.
At the forefront of the fundraising are start-ups, which are flocking the stock markets with astronomical valuations, though many such as Zomato are yet to turn a profit. Investors are eager to buy into these IPOs, banking on growth opportunities that digital reach has afforded to these nascent companies.
The startups being listed are joining the broader India Inc, which is on cusp of a burgeoning investment capex cycle as several indicators show.
While a chunk of the IPO money is going as returns to early investors who had bet on the potential of these companies, such as Ant Financial and Softbank offloading stakes through offer for sale in the Paytm IPO, huge capital is being available for further growth initiatives.
IPO rush
At least 30 companies are looking to collectively raise over Rs 45,000 crore through IPOs during October-November. Of the total fundraising, a large chunk would be garnered by technology-driven companies, including FinTechs.
The firms that are expected to raise funds through their IPOs during October-November include Policybazaar (Rs 5,710 crore), Emcure Pharmaceuticals (Rs 4,500 crore) Nykaa (Rs 4,000 crore), CMS Info Systems (Rs 2,000 crore), MobiKwik Systems (Rs 1,900 crore). In addition, Northern Arc Capital (Rs 1,800 crore), Ixigo (Rs 1,600 crore), Sapphire Foods (Rs 1,500 crore), Fincare Small Finance Bank (Rs 1,330 crore), Sterlite Power (Rs 1,250 crore) RateGain Travel Technologies (Rs 1,200 crore) and Supriya Lifescience (Rs 1,200 crore) may float their IPOs during the period under review.~
Fund deployment
While Nykaa has said that it will use the IPO proceeds to set up new retail stores, fund capital spending and repay debts, PolicyBazaar plans to use Rs 1,600 crore of the proceeds to enhance visibility and awareness of its brands including Policybazaar and Paisabazaar, Rs 375 crore will be used for new opportunities to expand growth initiatives to increase its consumer base including offline presence, Rs 600 crore for funding strategic investments and acquisitions and Rs 375 crore for expanding its presence outside India. Keventer Agro will use the proceeds of Rs 155 crore will be used to repay debt and Rs 110.76 crore will be used for funding capital expenditure requirements. Start-up fundraising
The funds raised by Indian unlisted startups have crossed the $10 billion mark spread across 347 deals, according to PwC India. This was twice the amount of funding received in Q3CY20 and was up about 41% over the second-quarter figure.
The increase in funding activity was noted across all sectors, both by value and volume.
Fintech, Edtech and SaaS were the top three hot investment sectors in CY21, together accounting for about 47 per cent of the total funding activity. The fintech sector saw a four-fold increase in funds raised in the first three-quarters of CY21, over the first three-quarters of CY20. Six fintech companies reached unicorn status.
Editors View is a weekly column written by Amol Dethe, Editor, ETCFO. Click here to read his previous columns.
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Ex-SBI chairman Chaudhury’s bail plea rejected in loan scam case, BFSI News, ET BFSI
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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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Banks with 95% cards implement RBI order on recurring payments, BFSI News, ET BFSI
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A month after the RBI’s fresh rules on mandates for recurring card payments kicked in, banks accounting for over 95% of credit cards in the market are compliant with the new system. Over 20 lakh e-mandates have been registered by cardholders with a host of merchants.
According to payment industry sources, the banks whose credit cards are eligible for new standing payment mandate include SBI, Axis Bank, HDFC Bank, Yes Bank, American Express, Bank of India, Bank of Baroda, ICICI Bank, HSBC, RBL Bank, IndusInd Bank and Kotak Mahindra Bank. Several banks have enabled the mandate for both debit cards as well as credit cards.
Automatic recurring payments also require the merchant to be on-boarded to the new e-mandate framework. The compliant businesses include most of the OTT (over-the-top) streaming platforms, private life & general insurance companies, global IT giants like Google, Facebook, Microsoft and McAfee, as well as some edtech companies.
Interestingly, Indian cardholders who have registered with overseas service providers, having payment gateways abroad, are not subject to the new rules. This is because the RBI has no jurisdiction to impose second-factor authentication in those markets. It is up to the customer to disable international transactions on their cards.
What has facilitated the fast on-boarding of merchants is IT solutions like SI Hub developed by BillDesk and Mandate HQ developed by Razorpay. However, some domestic banks like Canara Bank & Punjab National Bank and Standard Chartered Bank were until last week in the process of making the necessary system changes.
According to the sources, card-based recurring transactions are 2.5% in terms of the number of transactions and 1.5% in terms of the value of the total card payments done in the country. On average, approximately 75% of domestic recurring transactions are of values of up to Rs 5,000. The corresponding figure for cross-border recurring transactions is approximately 85%.
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Banks face pressure on NIM as they lower rates to outsmart rivals, BFSI News, ET BFSI
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An intense price war in retail loans ahead of the festive season has led to a pronounced fall in interest income for banks, putting pressure on their key profitability parameter: Net interest margins (NIM).
Five of the seven state-owned banks that have announced their quarterly earnings so far have reported lower NIM for the September quarter. These banks, however, managed to report a rise in net profit largely on account of bad loan recovery and write-back of provision made in earlier quarters.
Captains in the banking industry said that they would rely on credit growth to boost NIM in the next two quarters since lending rates would likely remain soft until the monetary policy authority continues its accommodative stance to support economic recovery.
The banking sector’s weighted average lending rates dropped 31 basis points in September to 7.20%, the biggest monthly fall since November 2016. Public-sector banks led the race in slashing loan costs. Lending rates were already low as banks followed regulatory signal on softer interest rate regime over the past two years.
Room for further deposit rate cuts is not available for lenders as real interest rate is already negative, keeping the NIM sticky below 3% for most of them.
Punjab National Bank reported the steepest 25% drop in net interest income among state-owned lenders that have announced their quarterly earnings so far. Canara Bank and Indian Bank have lower NII and NIM for the quarter under review.
The market became too competitive with all large banks lowering interest rates, leading to a fall in NIM, said Indian Overseas Bank chief executive Partha Pratim Sengupta last week. IOB, however, clocked 4.6% higher net interest income even as its NIM fell to 2.51% for the quarter ending September 30 from 2.57% in the year-ago period.
Punjab & Sind Bank has had a marginal rise in NII while its NIM dropped. Bank of Maharashtra and Uco Bank, on the other hand, reported a rise in both NII and NIM.
Indian Bank chief executive Shanti Lal Jain expects interest income to rise in the next two quarters with higher credit off-take, in line with expected economic recovery. Uco Bank’s AK Goel shared a similar view.
Public sector banks, however, would likely face a challenge in terms of credit growth from their private sector peers, which are typically more aggressive in retail lending.
Over the last five years, public sector banks’ market share has dropped by around 10% in both deposits and advances. “Clearly, asset quality and the resultant profitability, as well as capital challenges, have been the key factor in the slowdown of the public sector banks,” Acuite Ratings & Research said in a note.
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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.
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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