ICICI Bank to offer instant overdraft to sellers registered on Amazon India, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank has announced that it has partnered with Amazon India to offer overdraft (OD) facility upto Rs 25 lakh to individual sellers and small businesses registered on the e-commerce company’s online marketplace, instantaneously and digitally. Driven by API integration, the partnership enables sellers to avail an OD from the Bank in a process, from application to sanction to disbursement, that is digital. Customers of other banks can avail the facility from ICICI Bank, if they are registered as sellers with amazon.in.

ICICI Bank has developed this new facility that functions on the back of an industry-first scorecard to evaluate credit worthiness of sellers based on their financial profile including Credit Bureau scores.

The new credit assessment method offers convenience to the sellers as it does away with the paper-intensive bank statements or income tax returns for assessing credit worthiness. Further, it empowers small businesses and individual sellers who are ‘new-to-credit’ and ‘existing MSME borrowers’ to unlock the value of their digital transactions and get access to instant credit.

In a statement, Pankaj Gadgil, Head- Self Employed Segment, SME & Merchant Ecosystem, ICICI Bank said, “This process will help the sellers, who may otherwise not get access to adequate credit when assessed in the traditional way of using only balance sheets, bank statements and tax returns. This new proposition resonates our effort in developing innovations for MSME customers and will empower them with new avenues of business expansion.”
Benefits of InstaOD:

  • Online loan application: Sellers registered on amazon.in can apply for the OD instantly online through amazon.in.
  • Easy process: The Bank evaluates sellers making the loan approval process easy and quick. This is an improvement over the typical process which demands sellers to go through the tedious paper-intensive process of submitting income tax returns, bank statements and GST returns.
  • Instant sanction and disbursal: The approved OD amount is instantly sanctioned and disbursed into the seller’s current account
  • Pay for what you use: Sellers only need to pay interest on the amount of OD utilised by them
  • Auto-renewal facility: The OD is renewable on an annual basis, depending on the repayment track records of the seller

“We are prioritizing our efforts to help sellers on amazon.in bounce back from the disruption owing to COVID-19. We want to enable easy access to credit for sellers with transparent policies and at low costs” said Vikas Bansal, Director – Amazon Pay India, in a statement.



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4 Agriculture Stocks With High EPS With Dividend Yield To Consider In 2021

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Importance of EPS

A company’s earning per share, or EPS, is its net profit, or profit after tax (PAT), divided by the total number of outstanding shares. Although dividend payout is not directly tied to earnings per share, it is usual to notice that only companies with consistently stable or growing earnings per share pay dividends to their shareholders. Though dividends are very subjective, and many factors are taken into account before a dividend is paid, investors seeking dividend income should look at the company’s EPS before investing.

Analysts can use the EPS computation to undertake a fundamental examination of a company. A corporation with a greater earnings per share (EPS) is thought to be more prosperous and financially stable. Analysts use earnings per share (EPS) to assess a company’s financial health. It is frequently referred to as the value of a company’s bottom line.

Bharat Rasayan

Bharat Rasayan

Technical Grade Pesticides and Intermediates are manufactured by Bharat Rasayan Limited (BRL). BRL has production facilities in Rohtak, Haryana, and Dahej, Gujarat. The stock returned 92.28 percent over three years, compared to 61.01 percent for the Nifty Smallcap 100. The company’s EPS is 377.02, which is high and good for investors.

Bharat Rasayan has consistently generated good financial results, with a Net Profit growth rate of 40.8 percent CAGR over the last five years. In addition, the company boasts a great ROE of 31.9 percent for the year. Cost optimization and operational efficiency have also helped it increase its operating profit margins from 6% in 2010 to 19% in 2020. Given the company’s outstanding growth, it trades at a reasonable 27.5x P/E valuation.

Bayer Cropscience

Bayer Cropscience

In India, Bayer CropScience Limited manufactures, sells, and distributes insecticides, fungicides, herbicides, and other agrochemical products. The company has enough cash on hand to cover its contingent liabilities. In the fiscal year ending March 31, 2021, the company spent less than 1% of its operating revenues on interest charges and 8.5 percent on staff costs. Stock returned 21.52 percent over three years, compared to 70.22 percent for the Nifty Midcap 100.

On the financial front, the company has maintained a consistent performance, with a ROE of 19.1 percent in FY21. It has generated stable cash flows, with operational cash flows rising at a 27.24 percent CAGR from Rs. 206 crores in 2016 to Rs. 687 crores in 2021. Bayer is debt-free and has significant liquidity, having cash and cash equivalents of Rs. 1,210 crores at the end of FY21. The stock also has a P/E of 48.61x, which shows that the company is valued fairly.

PI Industries

PI Industries

The company’s yearly revenue growth rate of 37.67% surpassed its three-year CAGR of 25.94%. The stock returned 335.25 percent over three years, compared to 61.69 percent for the Nifty 100. PI Industries Ltd., founded in 1946, is a Large Cap business in the Pesticides/Agro Chemicals industry with a market cap of Rs 48,608.21 crore.

The domestic business is likely to improve over the medium term, thanks to a strong product line-up, a helpful policy environment, and a regular monsoon. Following the successful Rs. 2,000 crore equity injection via QIP method in July 2020, PI Industries now has a healthy financial risk profile and liquidity.

Gujarat Narmada Valley Fertilizers & Chemicals (GNFC)

Gujarat Narmada Valley Fertilizers & Chemicals (GNFC)

Gujarat Narmada Valley Fertilizers & Chemicals Ltd., founded in 1976, is a Small Cap business in the Fertilizers industry with a market cap of Rs 6,301.45 crore. The stock returned 11.77 percent over three years, compared to 70.22 percent for the Nifty Midcap 100. Over a three-year period, the stock returned 11.77 percent, compared to 85.52 percent for the S&P BSE Basic Materials index. The company has good EPS of 60.21.

4 Agriculture Stocks With High EPS In 2021

4 Agriculture Stocks With High EPS In 2021

Company Price in Rs EPS Div Yield
Bharat Rasayan 12,390 377.02 0.01%
Bayer Cropscience 5,302 110.16 0.47%
PI Industries 3,170 51.41 0.16%
GNFC 437 60.21% 1.87%.

Risk of investing in Agriculture Stocks

Risk of investing in Agriculture Stocks

The Indian weather has been notoriously fickle in the past, with erratic rains across the country. In the event that rainfall is lower for a given year, farming activities for a specific crop or state may be reduced, resulting in a lesser need for fertilizers and pesticides for that year. Increased input costs, higher interest rates, excessive borrowing, larger cash obligations, a lack of adequate cash or credit reserves, and adverse changes in exchange rates in the case of company imports can all contribute to financial hazards.

Agriculture is one of the most important sectors in the country, with plenty of space for increased consumption; the sector requires tried-and-true products like pesticides, tractors, and current irrigation systems, among other things.

Disclaimer

Disclaimer

The opinions and investment ideas offered by Greynium Information Technologies’ authors or employees should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should not make trading or investment decisions solely primarily on information given on GoodReturns.in. We are not a qualified financial counsellor, and the material provided here is not intended to be investment advice.



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Reserve Bank of India – Press Releases

Press Releases

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The Reserve Bank of India (RBI) has imposed, by an order dated September 23, 2021, a monetary penalty of ₹11.00 lakh on The Jammu & Kashmir State Co-operative Bank Limited, Srinagar (the bank) for contravention of section 23 read with section 56 of the Banking Regulation Act, 1949. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949.

This action is based on 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 of the bank was conducted by NABARD with reference to the bank’s financial position as on March 31, 2019 and the Inspection Report pertaining thereto, revealed, inter alia, contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 as the bank had opened branches without obtaining the prior permission of the RBI. Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for violation of the said directions.

After considering the bank’s reply, RBI came to the conclusion that the aforesaid charge of contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/934

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RBI revamps loan transfer and securtisation rules, BFSI News, ET BFSI

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The Reserve Bank has issued Master Direction on loan transfer, requiring banks and other lending institutions to have a comprehensive board-approved policy for such transactions.

Loan transfers are resorted to by lending institutions for various reasons, ranging from liquidity management, rebalancing their exposures or strategic sales. Also, a robust secondary market in loans will help in creating additional avenues for raising liquidity, the RBI said.

The provisions of the direction are applicable to banks, all non-banking finance companies (NBFCs), including housing finance companies (HFCs), NABARD, NHB, EXIM Bank, and SIDBI.

Minimum holding period

The Master Direction has also prescribed a minimum holding period for different categories of loans after which they shall become eligible for transfer.

“The lenders must put in place a comprehensive Board approved policy for transfer and acquisition of loan exposures under these guidelines.

“These guidelines must…lay down the minimum quantitative and qualitative standards relating to due diligence, valuation, requisite IT systems for capture, storage and management of data, risk management, periodic Board level oversight, etc,” said the Master Direction.

Draft guidelines on Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021, were released for public comments in June last year.

The final direction has been prepared to take into account inter alia the comments received. The direction, the RBI said came into effect immediately.

As per the direction, “a loan transfer should result in immediate separation of the transferor from the risks and rewards associated with loans to the extent that the economic interest has been transferred”.

In case of any retained economic interest in the exposure by the transferor, the loan transfer agreement should specify the distribution of the principal and interest income from the transferred loan between the transferor and the transferee(s), it added.

‘Transferor’ means the entity which transfers the economic interest in a loan exposure, while ‘transferee’ refers to the entity to which the economic interest in a loan exposure is transferred.

It further said a transferor “cannot re-acquire” a loan exposure, either fully or partially, that had been transferred by the entity previously, except as a part of a resolution plan.

Further, “the transferee(s) should have the unfettered right to transfer or otherwise dispose of the loans free of any restraining condition to the extent of economic interest transferred to them”.

Loans not in default

The master direction also provides a procedure for the transfer of loans that are not in default.

Meanwhile, the RBI also issued Master Direction on the securitisation of standard assets to facilitate their repackaging into tradable securities with different risk profiles.

Observing that complicated and opaque securitisation structures could be undesirable from the point of view of financial stability, the RBI said, “Prudentially structured securitisation transactions can be an important facilitator in a well-functioning financial market in that it improves risk distribution and liquidity of lenders in originating fresh loan exposures”.

In its ‘Master Direction – Reserve Bank of India (Securitisation of Standard Assets) Directions, 2021’, the central bank has specified the Minimum Retention Requirement (MRR) for different classes of assets.

For underlying loans with an original maturity of 24 months or less, the MRR shall be 5 per cent of the book value of the loans being securitised. It will be 10 per cent for loans with an original maturity of more than 24 months.

In the case of residential mortgage-backed securities, the MRR for the originator shall be 5 per cent of the book value of the loans being securitised, irrespective of the original maturity.



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2 Pharma Stocks To Buy For Medium Term As Suggested By HDFC Securities

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1. Amrutanjan Healthcare: Buy for a target price of Rs. 970

HDFC Securities has a ‘Buy’ rating on pharmaceuticals company, Amrutanjan Healthcare for a target price of Rs. 970, i.e. an upside of 15 percent from the last traded price of Rs. 844 per share.

HDFC Securities’ take on Amrutanjan Healthcare scrip:

The company is among the oldest ayurvedic and OTC Indian brand. Focus of the company is on establishing a niche for itself with a product portfolio of affordable healthcare, personal and hygiene care products. Other than its flagship brand ‘Amrutanjan Pain Balm’, the company is constantly strengthening its product range and adding pain management products such as aromatic balms, creams and sprays for headaches, body aches. In the premium range, it offers sub brand ‘Roll on’ and also has come up with brand ‘Relief’ that solves congestion-related issues. The company also offers sanitary napkins under the brand ‘Comfy’ that is positioned as an affordable alternative for larger user base.

The company is working on expanding its distribution network in both semi urban and rural areas. It also plans to widen its existence in the e-commerce space and increase its contribution to 1.3% from the current 0.5% of the total revenues. As per the Economic Times Brand Equity (Most Trusted Brands) 2018 Survey, Amrutanjan ranked 33 among top 50 brands in the “Health and Personal Care” segment.

Valuation & Recommendation: Amrutanjan’s earnings grew at a CAGR 17% FY17-21. Going forward, we are positive on the future growth prospects and expect the company to be ahead of the category performance mainly in the OTC segment, views the brokerage.

“The company’s revenue and PAT is likely to record a growth of 17.5% and 16.7% CAGR over FY21-23E. Along with this we expect the company to generate consistent FCF with consistent high ROEs. The Comfy brand is expected to be the key growth driver for AHCL. We expect, “Comfy” revenues to grow at CAGR 28% while other OTC products are expected to grow at CAGR 13.2% over FY21-23E. However we feel that there is a scope for some upward valuation re-rating in the stock currently”, notes the brokerage.

What can investors do?

Investors are suggested to buy the stock in the band of Rs. 820-830 and further add on dips at Rs. 732 (26x FY23E) for a base case fair value of Rs. 900 (32x FY23E) and bull case fair value of Rs. 970 (34/5x FY23E) for a time horizon of 2 quarters.

Advanced Enzymes Technologies: Buy for a target price of Rs. 458.5

Advanced Enzymes Technologies: Buy for a target price of Rs. 458.5

HDFC Securities is bullish on the stock of Advanced Enzymes Technologies and has set a target price of Rs. 458.5, an upside of 19.4 percent from the current market price of Rs. 384.

Brokerage’s take on the stock of Advanced Enzymes:

Advanced Enzymes Technologies is a leading player in enzymes and probiotics that play a crucial role in health and nutrition. Its products have applications in various other end-user industries as well. ‘Despite being a small player in a US$ 10bn+ industry, the company has more than 700 clients spread across 45 countries and a comprehensive product basket of 68 enzymes and probiotics and over 400 proprietary products’, notes the brokerage. The other players in the market include Novozymes, Danisco, DSM, BASF, etc. which together account for 75% of the market. The company has the highest market share in India and is among the 15 leading global enzyme companies globally.

“Demand for health and hygiene is on the rise and there is huge headroom for growth in Nutraceuticals, especially in USA. Enzymes are used across all food items, including bakery, dairy products etc. which are big segments”, says the brokerage.

“Largest product which is anti-inflammatory enzyme contributed to Rs 113cr, +10% YoY in FY21. Top-10 clients contributed to 38% of revenue in FY21. Despite losing its top client in the US which contributed US$ 5.5mn to revenue, US sales grew 12% YoY in FY21. Over the last five years, the company has enhanced fermentation capacity. Other than this, the company has superior R&D capabilities”, mentions the brokerage in its report.

Other key takeaways:

– Capital requirement over the next 2-3 years shall be minimal as the company currently operates at 60 percent capacity.

– The company holds a leadership position in the domestic healthcare and nutrition segments.

– The company lately revealed clinical breakthrough in the randomized controlled trials (RCTs) of systemic enzymes and probiotics to cater to the issue of ‘long covid’ fatigue symptoms.

– International sales account for around 54% of the revenue, with the US being a major contributor.

– “Enzymes industry has very high entry barriers on account of extensive R&D focus and long gestation period before getting registration approvals for products in USA and EU. Management said that the focus area continues to be on bio-catalysis for API, probiotics and also B2C business in nutraceuticals segment”, adds the brokerage firm.

– Advanced Enzyme acquired 51% stake in Sci-Tech specialties (SSPL) for a financial consideration of Rs 31.6cr in December 2020. The company plans to double its revenue over the next five years with operating margin in the broad range of 42-48%.

Valuation & Recommendation: The three future growth pillars of the company as suggested by the brokerage comprise of continued investment in R&D, expansion of its geographic presence and constant focus on inorganic growth opportunities. The brokerage estimates revenue/EBITDA/PAT CAGR of 16%/16%/17.3% over FY21- 23E. Company has net debt free Balance Sheet with cash & equivalents of around Rs 320cr as on Mar-2021. The company continues to look for inorganic growth opportunities impact of which is not included in our assumptions.

“We expect margins to remain more or less stable in the 45-47% range over FY21-23E. The enzyme industry is dominated by big MNCs like Novozymes, DSM Nutritional Products, BASF etc. However, at the same time smaller players like Advanced Enzyme are gaining ground in the segment helped by innovation and newer technologies.”, adds the brokerage report.

What should investors do?

The brokerage suggest buying the stock of Advanced Enzyme in the band of Rs 380-385 and add more on dips to Rs 332.5 for base case target of Rs 422.5 (23.5x FY23E EPS) and bull case target of Rs 458.5 (25.5x FY23E EPS) over the next two quarters.

Disclaimer:

Disclaimer:

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only.



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Akudo raises $4.2 m seed funding from Y Combinator, JAFCO Asia, others

Banking & Finance

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Akudo, a learning-focused neobank for teenagers in India, on Monday, said it has raised $4.2 million (about ₹31 crore) in funding, led by Y Combinator, JAFCO Asia, Incubate Fund India, and AET Fund.

The seed round also saw participation from Tribe Capital, Cabra Capital, and marquee angels like Lalit Keshre (Groww co-founder), Rohit Taneja (Decentro co-founder) and others, a statement said.

The start-up aims to utilise the funds to expand its team and further refine its product offering to reach millions of financially under-prepared and under-served teenagers in India, it added.

Transaction volume growth

Currently, the company has over one lakh registered customers and has recorded a 75 per cent week-on-week growth in transaction volumes, the statement said.

“We are deeply grateful to have such experienced and established investors join our journey as we craft India’s first learning-focused neobank for teenagers. This capital will help us hire the right team and build in-app intelligence and features which will make financial learning more enjoyable for teenagers,” Akudo co-founder Lavika Aggarwal said.

Akudo wants every teenager to own their Akudo card as soon as they turn 13 and learn crucial lessons early on, Aggarwal added.

“Akudo is also bound to positively impact families of teens who will undertake their first step towards financial literacy and ultimately towards true financial empowerment,” Aggarwal said.

Supriya Singh, Head of South Asia investments at JAFCO Asia, noted that personal finance for young users has largely been unaddressed.

Founded in August 2020 by Lavika Aggarwal, Sajal Khanna, and Jagveer Gandhi, Akudo provides personalised prepaid Visa cards to teens and promotes a financial first learning environment through features to build a healthy habit of saving at an early age. Teens are rewarded for their good financial behaviour through engaging gamified reward systems.

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Reserve Bank of India – Press Releases

Press Releases

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(Amount in ₹ crore, Rate in Per cent)
  Volume
(One Leg)		 Weighted
Average Rate 		Range
A. Overnight Segment (I+II+III+IV) 0.00 – –
     I. Call Money 0.00 – –
     II. Triparty Repo 0.00 – –
     III. Market Repo 0.00 – –
     IV. Repo in Corporate Bond 0.00 – –
B. Term Segment      
     I. Notice Money** 0.00 – –
     II. Term Money@@ 0.00 – –
     III. Triparty Repo 0.00 – –
     IV. Market Repo 0.00 – –
     V. Repo in Corporate Bond 0.00 – –
  Auction Date Tenor (Days) Maturity Date Amount Current Rate /
Cut off Rate
C. Liquidity Adjustment Facility (LAF) & Marginal Standing Facility (MSF)
I. Today’s Operations
1. Fixed Rate          
     (i) Repo          
    (ii) Reverse Repo Sun, 26/09/2021 1 Mon, 27/09/2021 3,470.00 3.35
    (iii) Special Reverse Repo~          
    (iv) Special Reverse Repoψ          
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo          
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo          
           
3. MSF Sun, 26/09/2021 1 Mon, 27/09/2021 428.00 4.25
4. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£          
5. Net liquidity injected from today’s operations
[injection (+)/absorption (-)]*		       -3,042.00  
II. Outstanding Operations
1. Fixed Rate          
    (i) Repo          
    (ii) Reverse Repo Sat, 25/09/2021 2 Mon, 27/09/2021 12,350.00 3.35
  Fri, 24/09/2021 3 Mon, 27/09/2021 3,38,748.00 3.35
    (iii) Special Reverse Repo~ Fri, 24/09/2021 14 Fri, 08/10/2021 6,999.00 3.75
    (iv) Special Reverse Repoψ Fri, 24/09/2021 14 Fri, 08/10/2021 2,712.00 3.75
2. Variable Rate&          
  (I) Main Operation          
     (a) Reverse Repo Fri, 24/09/2021 14 Fri, 08/10/2021 3,44,515.00 3.60
  (II) Fine Tuning Operations          
     (a) Repo          
     (b) Reverse Repo Fri, 24/09/2021 4 Tue, 28/09/2021 50,001.00 3.44
  Tue, 21/09/2021 7 Tue, 28/09/2021 1,00,001.00 3.42
3. MSF Sat, 25/09/2021 2 Mon, 27/09/2021 348.00 4.25
  Fri, 24/09/2021 3 Mon, 27/09/2021 152.00 4.25
4. Long-Term Repo Operations# Mon, 17/02/2020 1095 Thu, 16/02/2023 499.00 5.15
  Mon, 02/03/2020 1094 Wed, 01/03/2023 253.00 5.15
  Mon, 09/03/2020 1093 Tue, 07/03/2023 484.00 5.15
  Wed, 18/03/2020 1094 Fri, 17/03/2023 294.00 5.15
5. Targeted Long Term Repo Operations^ Fri, 27/03/2020 1092 Fri, 24/03/2023 12,236.00 4.40
  Fri, 03/04/2020 1095 Mon, 03/04/2023 16,925.00 4.40
  Thu, 09/04/2020 1093 Fri, 07/04/2023 18,042.00 4.40
  Fri, 17/04/2020 1091 Thu, 13/04/2023 20,399.00 4.40
6. Targeted Long Term Repo Operations 2.0^ Thu, 23/04/2020 1093 Fri, 21/04/2023 7,950.00 4.40
7. On Tap Targeted Long Term Repo Operations€ Mon, 22/03/2021 1095 Thu, 21/03/2024 5,000.00 4.00
  Mon, 14/06/2021 1096 Fri, 14/06/2024 320.00 4.00
  Mon, 30/08/2021 1095 Thu, 29/08/2024 50.00 4.00
  Mon, 13/09/2021 1095 Thu, 12/09/2024 200.00 4.00
8. Special Long-Term Repo Operations (SLTRO) for Small Finance Banks (SFBs)£ Mon, 17/05/2021 1095 Thu, 16/05/2024 400.00 4.00
Tue, 15/06/2021 1095 Fri, 14/06/2024 490.00 4.00
Thu, 15/07/2021 1093 Fri, 12/07/2024 750.00 4.00
Tue, 17/08/2021 1095 Fri, 16/08/2024 250.00 4.00
Wed, 15/09/2021 1094 Fri, 13/09/2024 150.00 4.00
D. Standing Liquidity Facility (SLF) Availed from RBI$       25,395.80  
E. Net liquidity injected from outstanding operations [injection (+)/absorption (-)]*     -7,44,738.20  
F. Net liquidity injected (outstanding including today’s operations) [injection (+)/absorption (-)]*     -7,47,780.20  
G. Cash Reserves Position of Scheduled Commercial Banks
     (i) Cash balances with RBI as on 26/09/2021 6,24,030.05  
  25/09/2021 6,26,849.89  
     (ii) Average daily cash reserve requirement for the fortnight ending 08/10/2021 6,30,489.00  
H. Government of India Surplus Cash Balance Reckoned for Auction as on¥ 24/09/2021 0.00  
I. Net durable liquidity [surplus (+)/deficit (-)] as on 10/09/2021 11,83,556.00  
@ Based on Reserve Bank of India (RBI) / Clearing Corporation of India Limited (CCIL).
– Not Applicable / No Transaction.
** Relates to uncollateralized transactions of 2 to 14 days tenor.
@@ Relates to uncollateralized transactions of 15 days to one year tenor.
$ Includes refinance facilities extended by RBI.
& As per the Press Release No. 2019-2020/1900 dated February 06, 2020.
* Net liquidity is calculated as Repo+MSF+SLF-Reverse Repo.
# As per the Press Release No. 2020-2021/287 dated September 04, 2020.
^ As per the Press Release No. 2020-2021/605 dated November 06, 2020.
€ As per the Press Release No. 2020-2021/520 dated October 21, 2020, Press Release No. 2020-2021/763 dated December 11, 2020, Press Release No. 2020-2021/1057 dated February 05, 2021 and Press Release No. 2021-2022/695 dated August 13, 2021.
¥ As per the Press Release No. 2014-2015/1971 dated March 19, 2015.
£ As per the Press Release No. 2021-2022/181 dated May 07, 2021.
~ As per the Press Release No. 2021-2022/177 dated May 07, 2021.
ψ As per the Press Release No. 2021-2022/323 dated June 04, 2021.
Ajit Prasad
Director   
Press Release: 2021-2022/933

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Bank officers union extends support to Bharath Bandh by farmers, BFSI News, ET BFSI

Banking & Finance

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Bank unions today have extended support to the Bharath Bandh called by farmers, demanding a roll back of the three farm laws.

The All India Bank Officers’ Confederation said that its affiliates and state units will also support the farmer protests.

The union questioned the government’s plan of doubling farmers’ income by 2022, citing the NSS Land and Livestock holdings of Households and Situation Assessment of Agricultural Households, 2018-19 report released earlier this month.

The report highlighted that the average outstanding loan per agricultural household has increased to Rs 74,121 in 2018 from Rs 47,000 in 2013. The growing indebtedness of agricultural households reflects deep farm distress, the union said.

The bandh will be held from 6am to 4pm, during which all government and private offices, educational and other institutions, shops, industries, commercial establishments, public events and functions will be closed across the country.

According to reports, some banks in the country will remain shut today – banks in Maharashtra and some banks in Bihar.

The Samyukt Kisan Morcha, the umbrella body of over 40 farm unions leading the protests, called for the Bharat Bandh today, the day their protests complete 10 months.



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Banks may sell Rs 1 lakh crore of fraud-hit loans to NARCL, ARCs, BFSI News, ET BFSI

Banking & Finance

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Banks may offload about Rs 1 lakh crore of accounts with fraudulent activities to National Asset Reconstruction Company Ltd (NARCL) and other ARCs with the Reserve Bank of India allowed lenders to sell such loans.

In the last three years, banks have declared loan frauds amounting to Rs 3.95 lakh crore.

The new rule is part of the RBIs final norms on the transfer of loan exposures.

The move has opened a new avenue for ARCs, which till now were allowed to take over non-performing assets as well as loans which are in default for 60 days.

This bad loans that ARCs can take over include loan exposures classified as fraud as on the date of transfer provided that the responsibilities of the transferor with respect to continuous reporting, monitoring, filing of complaints with law enforcement agencies and proceedings related to such complaints shall also be transferred to the ARC, the central bank said. The transfer of such loan exposures to an ARC, however, does not absolve the transferor from fixing the staff accountability as required under the extant instructions on frauds.

Banks have to make 100% provision in four quarters for accounts tagged in the fraud category. In the case of non-performing assets without delayed recovery, 100% provisioning effectively happens over eight quarters.

Swiss challenge

Banks may sell Rs 1 lakh crore of fraud-hit loans to NARCL, ARCs

The RBI has clarified on the called Swiss Challenge Method, applicable while transferring stressed loans by lenders. The RBI had proposed de-regulate price discovery by departing from Swiss Challenge auction method, where the highest bid in the first round or unsolicited bid received becomes the base for seeking counter offers.

The central bank said that in cases where the aggregate exposure of lenders to a borrower whose loan is being transferred is above 1 bln rupees, Swiss Challenge method must be followed. In all other cases, the bilateral negotiations shall be subject to the price discovery and value maximisation approaches adopted by the transferor as part of the board approved policy, which may also include Swiss Challenge method, it said However, in case of such transfers used as means for resolution under the RBI’s Jun 7, 2019 circular, Swiss Challenge method would be mandatory irrespective of the exposure threshold.

The RBI said that lenders must have a board-approved policy on the adoption of Swiss Challenge method. The policy could include parameters such as a tolerance limit on haircut required by the lenders in the base-bid and minimum mark-up for over the base for seeking counter offers, the RBI said. Such minimum mark-up, difference between the challenger and the base-bid expressed as a percentage of the base-bid, must not be less than 5% and not be more than 15%.

The bad bank

Banks may sell Rs 1 lakh crore of fraud-hit loans to NARCL, ARCs

Finance Minister Nirmala Sitharaman on Thursday announced a Rs 30,600 crore government guarantee for the National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets, paving the way for operationalisation of the bad bank.

The finance minister in Budget 2021-22 announced the setting up of a bad bank as part of the resolution of bad loans worth about Rs 2 lakh crore.

The bad bank or NARCL will pay up to 15 per cent of the agreed value for the loans in cash and the remaining 85 per cent would be government-guaranteed security receipts (SRs). The government guarantee would be invoked if there is a loss against the threshold value.



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Bank Holidays in October 2021, List of Bank Holidays in October in India: Banks to remain shut for up to 21 days in October; check full list here

Personal Finance

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Banks will not be closed for all 21 days for all states as these are state-specific holidays for different occasions

2021 Bank Holidays in October: Banks in India will remain closed for up to 21 days in October 2021, including second and fourth Saturdays, and Sundays. Apart from weekly offs, banks will remain shut in different states on account of different holidays. Banks will not be closed for all 21 days for all states as these are state-specific holidays for different occasions. On October 2, banks across the country will remain shut as it will be a gazetted holiday. The Reserve Bank of India has categorised holidays under three categories — Holiday under Negotiable Instruments Act; Holiday under Negotiable Instruments Act and Real-Time Gross Settlement Holiday; and Banks’ Closing of Accounts. The list of holidays given below has been notified by RBI.

Bank holidays in October 2021

1 October 2021 – Half Yearly Closing of Bank Accounts
2 October 2021 – Mahatma Gandhi Jayanti
6 October 2021 – Mahalaya Amavasye
7 October 2021 – Mera Chaoren Houba of Lainingthou Sanamahi
12 October 2021 – Durga Puja (Maha Saptami)
13 October 2021 – Durga Puja (Maha Ashtami)
14 October 2021 – Durga Puja/Dussehra (Maha Navami)/Ayutha Pooja
15 October 2021 – Durga Puja/Dasara/Dusshera (Vijaya Dashmi)
16 October 2021 – Durga Puja (Dasain)
18 October 2021 – Kati Bihu
19 October 2021 – Id-E-Milad/Eid-e-Miladunnabi/Milad-i-Sherif (Prophet Mohammad’s Birthday)/Baravafat
20 October 2021 – Maharishi Valmiki’s Birthday/Lakshmi Puja/Id-E-Milad
22 October 2021 – Friday following Eid-i-Milad-ul-Nabi
October 26 – Accession Day

Banks across Gangtok will remain closed on 1 October 2021, on account of half-yearly closing of bank accounts. On 6 October 2021, only banks Agartala, Bengaluru, and Kolkata will remain shut to observe Mahalaya Amavasye. Only banks in Imphal will observe a holiday on 7 October 2021, on account of Mera Chaoren Houba of Lainingthou Sanamahi. On 12 October 2021, banks in Agartala and Kolkata will remain shut due to Durga Puja (Maha Saptami). On the next day, banks in Agartala, Bhubaneswar, Gangtok, Guwahati, Imphal, Kolkata, Patna, and Ranchi will observe a holiday on account of Durga Puja (Maha Ashtami). On 14 October, banks across Agartala, Bengaluru, Chennai, Gangtok, Guwahati, Kanpur, Kochi, Kolkata, Lucknow, Patna, Ranchi, Shillong, and Thiruvananthapuram will be closed for Durga Puja/Dussehra (Maha Navami)/Ayutha Pooja.

On 15 October 2021, except for Imphal and Shimal, banks across the country will remain closed for Durga Puja/Dasara/Dusshera (Vijaya Dashmi). Only banks in Gangtok will remain closed on 16 October to observe Durga Puja (Dasain). On 18 October, banks in Guwahati will be closed; on 19 October, banks in Ahmedabad, Belapur, Bhopal, Chennai, Dehradun, Hyderabad, Imphal, Jammu, Kanpur, Kochi, Lucknow, Mumbai, Nagpur, New Delhi, Raipur, Ranchi, Srinagar, Thiruvananthapuram will remain shut for Id-E-Milad/Eid-e-Miladunnabi/Milad-i-Sherif. Banks in Agartala, Bengaluru, Chandigarh, Kolkata, Shimla, will be closed on 20 October for Maharishi Valmiki’s Birthday. On 22 and 26 October, banks in Jammu and Srinagar will remain closed for Eid-i-Milad-ul-Nabi, and Accession Day, respectively.

Weekend Bank Holidays in October 2021

3 October 2021 – Sunday
9 October 2021 – 2nd Saturday
10 October 2021 – Sunday
17 October 2021 – Sunday
23 October 2021 – 4th Saturday
24 October 2021 – Sunday
31 October 2021 – Sunday

All the private and public sector banks across the country remain shut on the second and fourth Saturdays of every month, along with a weekly holiday on Sunday. Even as banks will remain shut on the above-mentioned days, customers can avail online services. Moreover, mobile and internet banking will remain operational.

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