In the upcoming week starting November 1, all private and government banks will remain closed for five days next week amid festivals such as Diwali and Bhai Dooj.
Banks will be closed for up to 17 days in the entire month.
According to the RBI list of holidays of November 2021, all banks across the country, except those in Bengaluru, will remain closed on Diwali, which falls on November 4.
Leaves on the second and fourth Saturdays of the month, and on Sunday would be uniformly applicable to all banks across the country.
November 1 (Monday): Kannada Rajyostsava/Kut; banks in Karnataka and Manipur Kannada will be closed
November 3 (Wednesday): Naraka Chaturdashi; banks will be closed in Karnataka
November 4 (Thursday): Diwali Amavasaya (Laxmi Pujan)/Deepavali/Kali Puja; banks will be closed in all states except Karnataka
November 5 (Friday): Diwali (Bali Pratipada)/Vikram Samvant New Year Day/Govardhan Pooja; banks will be closed in Gujarat, Karnataka, Uttar Pradesh, Uttarakhand, Sikkim and Himachal Pradesh
November 6 (Saturday): Bhai Duj/Chitragupt Jayanti/Laxmi Puja/Deepawali/Ningol Chakkouba; banks will be closed in Sikkim, Manipur and Uttar Pradesh
November 10 (Wednesday): Chhath Puja//Surya Pashti Dala Chhath (Sayan ardhya); banks will be closed in Bihar and Jharkhand
November 11 (Thursday): Chhath Puja; banks will be closed in Bihar
November 12 (Friday): Wangala Festival; banks will be closed in Meghalaya
November 19 (Friday): Guru Nanak Jayanti/Karthika Purnima; banks will be closed in many states such as Maharashtra, Delhi, Uttar Pradesh, Jharkhand, Jammu and Kashmir and more
November 22 (Monday): Kanakadasa Jayanthi; banks will be closed in Karnataka
November 23 (Tuesday): Seng Kutsnem; banks will be closed in Meghalaya
During the period under review, the bank made an accelerated provision on NPA accounts of around Rs 1,500 crore. It also provided an additional standard assets provision amounting to Rs 2,100 crore and provision on restructured assets amounting to Rs 1,030 crore.
Private sector lender Bandhan Bank on Friday reported a whopping net loss of Rs 3,008.59 crore for the second quarter this fiscal, on the back of Rs 5,577.92-crore provisions as the lender saw a huge surge in bad loans.
In absolute terms, non-performing assets (NPAs) of the bank, which had posted a net profit of Rs 920 crore in the second quarter last fiscal, soared 10-fold year-on-year to Rs 8,763.60 crore in the second quarter this fiscal from Rs 873.97 crore in the year-ago period. On a quarter-on-quarter basis, NPAs grew 36% from Rs 6,440.38 crore in the first quarter.
During the period under review, the bank made an accelerated provision on NPA accounts of around Rs 1,500 crore. It also provided an additional standard assets provision amounting to Rs 2,100 crore and provision on restructured assets amounting to Rs 1,030 crore.
Addressing a virtual press meet, Bandhan Bank MD & CEO Chandra Shekhar Ghosh said, “It was a very critical quarter. But not just for us, everyone is undergoing the same. We recognised this reality and strengthen our balance sheet to be prepared for the future business. All stresses are assessed and finalised in this moment. And then, the bank made a one-time additional provision. This quarter total provisioning was Rs 5,578 crore. Due to such provisioning, the bank has reported a loss of around Rs 3,000 crore in this quarter…it is not a loss, it is like taking some break comfortably, so that from today, we can only focus on business growth and quality of the portfolio.”
Ghosh said the bank believed that this provisioning should be “sufficient” to take care of any previous asset quality issues on account of the ongoing pandemic as well as protect it against the disruptions caused by any potential third wave.
During the second quarter this fiscal, the bank’s gross NPAs as a percentage of total loans increased 964 basis points on year-on-year basis to 10.82% from 1.18% during the same quarter last fiscal. On a quarter-on-quarter basis, the gross NPA ratio soared 264 bps from 8.18% in Q1FY22.
Net interest income (NII) for the quarter stood at Rs 1,935.41 crore, against Rs 1,923.09 crore in the year-ago period. Net interest margin (NIM) stood at 7.6%, down 4 bps from 8% for Q2FY21.
Ghosh informed that collection efficiencies improved in the September quarter and credit growth came back to nearly the pre-Covid situation. Growth in loan and advances for the bank in this quarter was 7%.
“For the EEB segment (erstwhile microbanking segment), collection efficiency was 83% in June, and now it is 129%, which is a very strong message to the bank from the customers on how they are coming back to the pre-pandemic situation. In the EEB segment, around 9% of our customers had not paid any instalment in June, while in September this number was only 4%. Now, around 79% of our customers are paying full instalments, while the number was 62% in June. September onward, it will gradually improve. We hope that in the future it will be better for the bank. We remain hopeful that if things continue to improve in the country from here now, we would reach our pre-Covid efficiency in the next couple of quarters,” Ghosh added.
In case none of the lenders has at least 10% exposure of the banking system to the borrower, the bank having the highest exposure may open current accounts. Non-lending banks will not be permitted to open current accounts, the RBI said.
The Reserve Bank of India (RBI) on Friday announced a series of tweaks to its August 6, 2020, current accounts circular, exempting borrowers with less than Rs 5 crore of banking system exposure from its ambit. The regulator also exempted accounts opened under specific instructions of the central and state governments from meeting the restrictions under the circular.
FE had reported on September 4 that the Indian Banks’ Association (IBA) had requested the RBI to exempt accounts held by the government with various banks from the purview of the August 6 circular.
In a notification on its website, the central bank said that the changes to the circular were made on a review taking into account feedback received from the IBA and other stakeholders. “For borrowers, where the exposure of the banking system is less than Rs 5 crore, there is no restriction on opening of current accounts or on provision of CC/OD (cash credit/ overdraft) facility by banks, subject to obtaining an undertaking from such borrowers that they shall inform the bank(s), as and when the credit facilities availed by them from the banking system reaches Rs 5 crore or more,” the RBI said.
Borrowers to whom the exposure of the banking system is Rs 5 crore or more will be allowed to maintain current accounts with any one of the banks with which it has CC/OD facility, provided that the bank has at least 10% of the exposure of the banking system to that borrower. Further, other lending banks may open only collection accounts subject to the condition that funds deposited in such collection accounts will be remitted within two working days of receiving such funds, to the CC/OD account maintained with the bank maintaining current accounts for the borrower.
In case none of the lenders has at least 10% exposure of the banking system to the borrower, the bank having the highest exposure may open current accounts. Non-lending banks will not be permitted to open current accounts, the RBI said.
Three other categories of accounts will also be exempted from the restrictions under the circular. These include inter-bank accounts, accounts of all India financial institutions (AIFIs) EXIM Bank, NABARD, NHB and SIDBI, and accounts attached by orders of central or state governments, regulatory bodies, courts or investigating agencies where the customer cannot undertake any discretionary debits.
“…it is clarified that banks shall monitor all accounts regularly, at least on a half-yearly basis, specifically with respect to the exposure of the banking system to the borrower, and the bank’s share in that exposure, to ensure compliance with these instructions,” the RBI said. If there is a change in exposure of banks or aggregate exposure of the banking system to the borrower which warrants implementation of new banking arrangements, such changes shall be implemented within a period of three months from the date of such monitoring, the regulator added.
Banks may implement the necessary changes within one month, after which the RBI will review the compliance position thereon.
Total income stood at Rs 991 crore, against Rs 852 crore, an increase of 16%.
Equitas Small Finance Bank (Equitas SFB) on Friday reported a 60% decline in its net profit to Rs 41 crore for the second quarter, compared with Rs 103 crore in the corresponding quarter of the previous fiscal, mainly on account of provisions made on restructured accounts. Total income stood at Rs 991 crore, against Rs 852 crore, an increase of 16%.
The gross NPA was at 4.64% in Q2FY22, compared with 4.58% in the previous quarter and 2.39% in Q2FY21. Net NPA stood at 2.37% in the quarter under review, as against to 2.29% in Q1FY22 and 1.09% in Q2FY21, The provision coverage ratio was at 50.09%, said a release by the bank.
PN Vasudevan, MD & CEO, said, “With no lockdowns and spread of virus largely under control, the bank saw an improved performance. While the overall GNPA remained steady compared to the first quarter, there was improved collection efficiency, leading to reduction in overdue cases between one and 90 days.”
Advances as of Q2FY22 was at Rs 18,978 crore, a growth of 13% YoY and around 81.44% of advances were secured loans. Strong revival of credit demand witnessed across products. The bank had the highest quarterly disbursement of Rs 3,145 crore in Q2FY22, it said.
Total advances restructured stood at Rs 1,401 crore, which forms around 7% of gross advances, and the bank carried a provision of Rs 196 crore towards the restructured book.
Central Government has re-appointed Shri Shaktikanta Das as Governor, Reserve Bank of India for a further period of three years beyond the 10th day of December 2021, or until further orders, whichever is earlier.
The rate of interest on Government of India Floating Rate Bonds, 2034 (GOI FRB 2034) applicable for the half year October 30, 2021 to April 29, 2022 shall be 4.68 percent per annum.
It may be recalled that FRB, 2034 will carry a coupon, which will have a Base rate equivalent to the average of the Weighted Average Yield (WAY) of last 3 auctions of 182 Day T-Bills, plus a fixed spread (0.98%).
This 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 the bank with its customers.
Background
The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019, and the 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 (i) divergence between bank’s reported NPAs and NPAs assessed by the Inspection on account of failure to classify certain borrower accounts as NPA, (ii) failure to disclose material divergences relating to asset classification and provisioning identified by RBI, despite exceeding the defined threshold, in the Notes to Accounts and (iii) failure to report frauds as per RBI directions. 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 non-compliance with the RBI directions, as stated therein.
After considering the bank’s reply 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 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.
Welcome to the refurbished site of the Reserve Bank of India.
The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge.
With this makeover, we also take a small step into social media. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy.
The site can be accessed through most browsers and devices; it also meets accessibility standards.
Please save the url of the refurbished site in your favourites as we will give up the existing site shortly and register or re-register yourselves for receiving RSS feeds for uninterrupted alerts from the Reserve Bank.
Do feel free to give us your feedback by clicking on the feedback button on the right hand corner of the refurbished site.
Data on sectoral deployment of bank credit collected from select 33 scheduled commercial banks, accounting for about 90 per cent of the total non-food credit deployed by all scheduled commercial banks, for the month of September 2021, are set out in Statements I and II.
On a year-on-year (y-o-y) basis, non-food bank credit1 growth accelerated to 6.8 per cent in September 2021 as compared to 5.1 per cent in September 2020.
Highlights of the sectoral deployment of bank credit are given below:
Credit to agriculture and allied activities registered a higher growth of 9.9 per cent in September 2021 as compared to 6.2 per cent in September 2020.
Credit growth to industry picked up to 2.5 per cent in September 2021 from 0.4 per cent in September 2020. Size-wise, credit to medium industries registered a robust growth of 49.0 per cent in September 2021 as compared to 17.5 per cent last year. Credit to micro and small industries accelerated to 9.7 per cent in September 2021 from a contraction of 0.1 per cent a year ago. Credit to large industries continued to contract at 1.0 per cent in September 2021 as compared to a contraction of 0.2 per cent a year ago.
Within industry, credit growth to ‘all engineering’, ‘chemicals & chemical products’, ‘food processing’, ‘gems & jewellery’, ‘infrastructure’, ‘mining & quarrying’, ‘petroleum coal products & nuclear fuels’, ‘rubber, plastic & their products’, ‘textiles’ and ‘wood and wood products’ accelerated in September 2021 as compared to the corresponding month of the previous year. However, credit growth to ‘beverage & tobacco’, ‘basic metal & metal products’, ‘cement & cement products’, ‘construction’, ‘glass & glassware’, ‘leather & leather products’, ‘paper and paper products’ and ‘vehicles, vehicles parts & transport equipment’ decelerated/contracted.
Credit growth to the services sector decelerated to 0.8 per cent in September 2021 from 9.2 per cent in September 2020, mainly due to contraction/deceleration in credit growth to NBFCs, trade and commercial real estate.
Personal loans registered an accelerated growth of 12.1 per cent in September 2021 as compared to 8.4 per cent a year ago, primarily due to faster credit growth in housing, vehicle loans, and loans against gold jewellery.
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