RRB employees to observe one-day strike on September 27 against govt’s divestment plan, BFSI News, ET BFSI

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The regional rural bank (RRB) employees are going to observe a one-day strike on September 27 opposing the government’s plan to divest its 50% share in each of the rural banks in favour of their respective sponsor banks.

The employee unions are instead demanding formation of a national rural regional bank and delinking of it with any sponsor bank. The union flag bearers are of the view that there has always been conflicts of interest between mainstream commercial banks and the RRBs they sponsor.

India has 43 RRBs with a network of around 22,000 branches mostly in the hinterlands to ensure banking facilities for farmers and artisans. These banks collectively employ one lakh people.

The central government holds 50% in each of the RRBs while their respective sponsor banks hold 35%. The balance 15% in RRBs is held by the respective state governments according to their areas of operation. For example, West Bengal has three RRBs within its boundary and the state holds 15% in each of these banks.

The All India Regional Rural Bank Employees Association, a coordinating body of National Federation of RRB Officers & National Federation of RRB Employees, said that relinquishing central government share would eventually lead to privatisation and that’s why they are opposing it.

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5 things investors should know, BFSI News, ET BFSI

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1. Banking and PSU debt funds are mutual fund schemes that invest debt and money market instruments issued by banks and PSUs and public financial institutions.

2. At least 80% of the corpus of the scheme needs to be in instruments issued by banks and PSUs, and PFIs.

3. All these entities are either backed, regulated or controlled by the government which reduces default risk and hence the scheme is supposed to have low credit risk.

4. Fund manager takes the call on whether to be in the short-term instruments or long-term debt instruments and hence the scheme carries interest rate risk.

5. These funds may give higher returns than Bank FDs of similar duration.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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Loan recovery improving, says Ujjivan Small Finance Bank, BFSI News, ET BFSI

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Ujjivan Small Finance Bank, which is going through a management level crisis, declared that its loan recovery from ground improved and portfolio at risk reduced in August.

The bank said its action plan aiming to improve asset quality started yielding results. The portfolio at risk (PAR) reduced to 21.7% from 30.8% in June with Rs 725 crore loan recovery. PAR was 25.2% in July. The lender’s collection efficiency improved to 95% in August from 93% in July, according to a regulatory filing to stock exchanges..

Chief executive Nitin Chugh resigned on August 18 after the bank’s holding company Ujjivan Financial Services raised alarms over his alleged mishandling of asset quality and human resource. The bank saw a series of exits from senior and mid-management level. Several board members also resigned before their scheduled term over the past one year.

The gross non-performing asset ratio rose further to 11.9% at the end of August from 10.8% a month back.

The bank said it is following a 100-day action plan for each business vertical with focus on PAR reduction and bad loan recovery with periodic monitoring and corrective action. The focus is on initial buckets and vintage of accounts for reducing PAR and further strengthening collection team and legal recovery for small enterprise loans and affordable housing loan portfolio.

Its gross loan portfolio rose marginally to Rs 14334 crore by the end of August from Rs 14, 137 crore a month back. Gross loan was at Rs 15,140 crore at the end of March. The unsecured microfinance loans contribute 67% of its total portfolio.

The bank’s restructured portfolio rose to Rs 1,405 crore from Rs 769 crore at the end of June.



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Loan recovery improving, says Ujjivan Small Finance Bank, BFSI News, ET BFSI

Banking & Finance

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Ujjivan Small Finance Bank, which is going through a management level crisis, declared that its loan recovery from ground improved and portfolio at risk reduced in August.

The bank said its action plan aiming to improve asset quality started yielding results. The portfolio at risk (PAR) reduced to 21.7% from 30.8% in June with Rs 725 crore loan recovery. PAR was 25.2% in July. The lender’s collection efficiency improved to 95% in August from 93% in July, according to a regulatory filing to stock exchanges..

Chief executive Nitin Chugh resigned on August 18 after the bank’s holding company Ujjivan Financial Services raised alarms over his alleged mishandling of asset quality and human resource. The bank saw a series of exits from senior and mid-management level. Several board members also resigned before their scheduled term over the past one year.

The gross non-performing asset ratio rose further to 11.9% at the end of August from 10.8% a month back.

The bank said it is following a 100-day action plan for each business vertical with focus on PAR reduction and bad loan recovery with periodic monitoring and corrective action. The focus is on initial buckets and vintage of accounts for reducing PAR and further strengthening collection team and legal recovery for small enterprise loans and affordable housing loan portfolio.

Its gross loan portfolio rose marginally to Rs 14334 crore by the end of August from Rs 14, 137 crore a month back. Gross loan was at Rs 15,140 crore at the end of March. The unsecured microfinance loans contribute 67% of its total portfolio.

The bank’s restructured portfolio rose to Rs 1,405 crore from Rs 769 crore at the end of June.



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Why Indian Gold Investors Looking Forward To International Prices Next Week

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Personal Finance

oi-Kuntala Sarkar

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Gold prices are not expecting much gain in the upcoming quarter, as anticipated by experts. Additionally, the gold markets globally can face a real test in the next week. The upcoming week is going to be a busy data week, as US durable goods orders, GDP Q2 report, and Personal Consumption Expenditures (PCE) price index will be published. The PCE price index is preferred by the US Fed to measure inflation, and this will again influence US Federal Reserve Chair Jerome Powell to decide the tapering timeline, before their next November meeting.

Why Indian Gold Investors Looking Forward To International Prices Next Week

OANDA senior market analyst Edward Moya commented, “The $1,700 level held up for all of this year, except for a brief moment when it dropped towards $1,680 a few times but managed to quickly recover.” Analysts are also thinking, “This will be critical for the precious metal, which has stayed largely above that level for all of 2021”. Gold prices are now staying around $1750, approximately, and lost the $1800 levels. Indian gold rates depend on international markets as the country exports gold from foreign markets. So, Indian gold investors are looking forward to international gold prices for the next week.

Today, on September 25, Saturday in India, 22 carat gold price is quoted at Rs. 45,240 and 24 carat gold is quoted at Rs. 46,240 per 10 grams, same as yesterday. The Comex gold future gained by 0.11% at $1751, while the spot gold market gained by 0.42% at $1751/oz, till last traded yesterday, on Friday. On the other hand, the US dollar index in the spot market did not drop today. But in India, the Mumbai MCX gold in October future fell by 0.13% at Rs. 45995/10 grams till last traded yesterday.

In the upcoming week, the focus of international investors might shift to the debt ceiling debate. The US Treasury Secretary Janet Yellen and Fed Chair Powell are also quite concerned with this matter. Along with this, the progress around the infrastructure package will also be another lookout. At present, gold rates in the international markets are quite subdued because of an anticipation of gradual tapering by the US Fed at the end of this year, as Chair Powell indicated recently. Tapering will influence investors towards government bonds rather than gold. Hence, this will again pull down gold rates globally. In India, a similar gold price trend will be followed.

Gold rates in different Indian cities are quoted differently, daily. Today’s gold rates in major Indian cities follow:

City 22 carat (INR/10 Grams) 24 carat (INR/10 Grams)
Mumbai 45,240/- 46,240/-
Delhi 45,350/- 49,480/-
Bangalore 43,200/- 47,130/-
Hyderabad 43,200/- 47,130/-
Chennai 43,570/- 47,530/-
Kerala 43,200/- 47,130/-
Kolkata 45,900/- 48,600/-

A report noted, “The current trading pattern sees gold first rallying on some new risk event but then giving up all of its gains as tensions ease.” Edward Moya added, “If Treasury yields continue to move higher, that has been kryptonite for gold.” However, the gold market in the next week will show a pathway for the future price trend, as investors are now looking forward to the US tapering timeline.



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This Bank Offers You 1% Cashback Every Time You Use Your Debit Card

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Planning

oi-Vipul Das

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Among the leading private sector banks of India, IDFC First Bank is offering a 1% cashback on offline and online purchase transactions done through IDFC FIRST Bank Debit Card. With IDFC FIRST Bank Debit Cards, customers can earn up to Rs 10,000 in cashback on POS and online purchases with no minimum spend requirements. The offer is valid for the period of 17th September and 4th November 2021. The offering excludes ATM withdrawals, wallet uploads, DC EMI transactions, and fund transfers. If a customer or account holder has more than one Debit Card seeded to the same Customer ID, the total transaction on all of the Debit Cards during the offer period will be considered to determine the overall cashback amount which will be credited to the customer’s account within 48 hours.

Benefits of IDFC First Bank Visa Signature Debit Card

Benefits of IDFC First Bank Visa Signature Debit Card

The IDFC FIRST Bank Visa Signature Debit Card comes with a plethora of perks which are as follows.

  • Enhanced ATM Withdrawal and POS Purchase limits for minor account
  • Complimentary Airport Lounge Access
  • Amazing cashback offer on BookMyShow.
  • Complimentary Insurance Coverage
  • Early Activation cashback offers
  • You can configure cash withdrawal and purchase restrictions with the IDFC Visa Signature Debit Card. By signing in to your net banking or mobile banking account you can specify an upper limit depending on the type of signature debit card you hold.
  • With the IDFC Visa Signature Debit Card you can make daily ATM withdrawals of Rs 2,00,000 and daily purchases of Rs. 6,00,000.
  • The IDFC Visa Signature Debit Card issued to Minor savings’ account has a daily cash withdrawal limit at ATM of Rs 10,000, and a maximum daily purchase limit of Rs Rs 10,000. For Signature Debit Cards issued to minors, only standard domestic restrictions will be applied. By signing on to online banking or mobile banking application, individuals can specify their personalized restrictions within the specified limits of the bank.

IDFC Visa Signature Debit Card Activation Offer

IDFC Visa Signature Debit Card Activation Offer

  • This debit card comes with an exciting offer of 10% cashback, up to a maximum of Rs. 250 on your first spend of Rs. 1000.
  • The card also comes with IDFC VISA Signature BookMyShow cashback offer of Rs 250 and the offer is valid until 30th September 2021.
  • Get a complimentary airport lounge access of up to 2 times per calendar quarter across 25+ domestic and international airports. For each entrance into the airport lounge, a nominal fee of Rs. 2 will be billed against your card.
  • Get complimentary insurance coverage benefits on Lost Card Liability up to Rs. 6,00,000, Personal Accident Insurance up to Rs. 35,00,000, Air Accident Insurance up to Rs. 1,00,00,000, and Purchase Protection up to Rs. 1,00,000 on your IDFC FIRST Bank Visa Signature Debit Card.
  • Get a waiver of 2.5% fuel surcharge on your fuel bills across petrol pumps in India.
  • Get amazing offers on food & beverages, spa & gym subscriptions, pharmacies, etc.

How to apply for IDFC Visa Signature Debit Card?

How to apply for IDFC Visa Signature Debit Card?

By opening a savings account at IDFC First Bank you can enjoy all the benefits and offers using the IDFC Visa Signature Debit Card. To get compound interest on your savings account, follow the steps below:

  • Visit https://www.idfcfirstbank.com/content/idfcsecure/en/open-savings-account-online.html and enter your full name, mobile number, and email address.
  • Now proceed further and complete the KYC process.
  • Upon successful opening of your account you need to maintain current balance more than minimum balance to be eligible for the ongoing exciting offers.
  • Rewards worth up to Rs 3,000/- for Signature Card Savings Accounts and up to Rs 1,500/- for Classic Card Savings Accounts are applicable.

Story first published: Saturday, September 25, 2021, 16:04 [IST]



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5 things investors should know, BFSI News, ET BFSI

Banking & Finance

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1. Banking and PSU debt funds are mutual fund schemes that invest debt and money market instruments issued by banks and PSUs and public financial institutions.

2. At least 80% of the corpus of the scheme needs to be in instruments issued by banks and PSUs, and PFIs.

3. All these entities are either backed, regulated or controlled by the government which reduces default risk and hence the scheme is supposed to have low credit risk.

4. Fund manager takes the call on whether to be in the short-term instruments or long-term debt instruments and hence the scheme carries interest rate risk.

5. These funds may give higher returns than Bank FDs of similar duration.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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A six-step strategy for every company to develop a supply chain finance plan, BFSI News, ET BFSI

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To thrive in any economy businesses must create new offerings, optimize existing processes and invest in employees’ upskilling. For this, cash is king, and a strong working capital management strategy is central to growth. However, managing liquidity effectively and strengthening balance sheets is a struggle that businesses face. The ongoing pandemic has only intensified these challenges.

Traditionally, corporates have been following a singular strategy – maintaining a high credit periods (or DPO – Days Payable Outstanding), where they negotiate longer time to pay creditors and in the interim use any excess available cash for short-term activities. Now, while higher DPO and longer credit period may be seen as beneficial, the pandemic is forcing many corporates to expedite payments to vendors in order to keep them afloat.

According to the PwC research of the largest global listed companies in the last five years, GBP 1.2tr excess working capital is tied on global balance sheets and for two consecutive years a decrease of 3.8% in DPO has been witnessed. This indicates that use of DPO may not be a sustainable approach in the long term. This makes it difficult for cash-strapped buyers who don’t have any ready cash available to pay and hence need a long credit period. The only way to solve this is corporates need to re-look at their entire working capital strategy and cash cycles. .

Supply Chain Financing – An Underutilized Lever
Supply Chain Finance (SCF) is an underappreciated lever to optimize working capital strategies. SCF isn’t a new concept. It’s been around and practiced for more than two decades now. While some corporates have been able to modernize and automate their SCF operations, it still has a a one-size-fits-all approach. This method does not address issues around the lack of liquidity. However, other real challenges such as high transaction costs along with structural barriers such as paper invoices, lack of an integrated data flow that can provide real-time visibility on the end-to-end cash conversion cycle and lack of organizational guidelines are rarely addressed either.

So, while most business leaders understand the value delivered by SCF, the depth of it remains unexplored. Research says that a Fortune 100 company can potentially generate $2 billion in additional cash by simply optimizing working capital management, at par with the performance of top companies in the sector.

To achieve results such as these, every SCF program must align with unique business objectives that doesn’t just ensure business continuity and production planning but also plays a key role in uplifting sales and earning risk free high returns as well.

The key advantages of a well-defined SCF strategy are aplenty. It can speed up sales by injecting capital to the distributors, can create direct bottom line benefit and stretch working capital by extending longer credit periods to vendors who have the capacity to bear the extension, while paying struggling vendors before time. To enable these benefits, corporates need to have a unified supply chain and working capital strategy that is fully aligned with evolving business objectives; and look to modernize practices to achieve scale operations in SCF.

A six-step plan for a holistic SCF strategy

  1. Set up a 5-year working capital goal that will form the bedrock of the strategy. The goal needs to have a dual lens – profitability for the corporate, and health, resilience and ability to grow for the vendors.
  2. It’s critical for the corporate to understand their supply chain end-to-end and identify where exactly working capital is trapped and how much is trapped. Often, this occurs in multiple places – delayed payments by customers, early or excess capital made available to vendors, or simply, a slow-moving inventory – a harsh reality of the ongoing pandemic.
  3. Calculate potential material gains across each of these places, and cumulatively for the organization as a whole. This will help prioritize action areas with immediacy.
  4. Corporates need to undertake in-depth risk modelling – for this, one needs to deep dive into vendor specifics such as – how many vendors is the corporate working with? Of these, how many are financially strong and how many need support immediately or in the near future. This should also cover vendors and dealers in the second and third tier of network.
  5. They need to create a data-driven scenario analysis by looking into vendors’ past business performance and relationship with the company, and then create a customized vendor financing program that’s a win-win for both, the corporate and the vendor. Similarly, this needs to be done for all vendors. Here, corporates also need to model the plan in a way that there is flexibility of funding sources, allowing a corporate to dynamically switch between internal and external funds as needed, ensuring overall profitability for the corporate.
  6. Corporates need to have a contingency plan in plan and periodically assess and re-strategize their approach to suit all. After all, an entire strategy can never be locked into a single course of action – as a corporate’s goals evolve, so must the supply chain financing model.

(The writer is Founder and CEO, CashFlo)



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2 Top Rated Multi Asset Allocation Funds By Value Research To Start SIP In 2021

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What are multi-asset allocation funds?

Multi asset allocation Funds are hybrid funds with a mandate to invest 10 percent in at least 3 of the asset classes. Typically, these funds have exposure in a mix of assets including equity, debt and one additional asset class say gold, real estate etc.

Benefits of Multi Asset Allocation funds

• Less riskier than most other hybrid funds as the corpus is spread across several asset classes and hence risk of concentration is minimal

• These funds are also known to offer steady returns over a period of time.

Who should invest in Multi Asset Allocation funds?

Investors with an investment horizon of at least 3 years or more and not willing to take on higher risk can consider investing in multi asset allocation funds for consistent returns over the period of their investment. The equity allocation in the long run helps to realize capital gains while at the same time if you are looking to diversify your portfolio, multi-asset allocation fund could be the right bet for you.

1. Axis Triple Advantage Fund:

1. Axis Triple Advantage Fund:

This multi-asset allocation fund from the house of Axis Mutual fund was launched in the year 2010 and since inception has offered a return of 10.74 percent. The fund as on August 31, 2021 manages an AUM of Rs. 1180 crore and its expense ratio is 2.15 percent. Benchmark of the fund is NIFTY 50 TRI (65), NIFTY Composite Debt Index (20), Domestic Price of Gold (15).

The fund’s corpus is largely allocated across equities, debt and commodities. Within the equity space, where it has maximum allocation, the fund is more concentrated into sectors such as financial, technology, chemicals and services among others. Top equity holdings of the fund include TCS, Infosys, ICICI Bank, HDFC Bank etc.

Likewise, top debt holdings of the fund are 7.9% LIC housing finance bond, state development loans, GOI securities and Bonds/NCDs etc.

Monthly SIP of Rs. 10000 started 5 years ago is now worth Rs. 9.48 lakh, providing gains of Rs. 3.48 lakhs, while the lump sum investment of Rs. 1 lakh over the same period has grown in value to Rs. 1.84 lakhs.

2. SBI Multi Asset Allocation Fund:

2. SBI Multi Asset Allocation Fund:

This hybrid fund from the stable of SBI Mutual fund was launched in December 2005 and since then has offered return of 8.67 percent. As of August 31, 2021, the fund’s AUM stands at Rs. 439 crore, while its expense ratio is at 1.74 percent. For the different asset classes, the fund’s benchmark are CRISIL 10-Year Gilt (45), NIFTY 50 TRI (40), Domestic Price of Gold (15).

Here are the funds are distributed across equity, debt, commodities and cash and cash equivalent. Within the equity space, the fund has maximum exposure in energy, followed by FMCG, healthcare, financial and services among others.

Top equity holdings comprise Bharat 22 ETF, CPSE ETF, SPDR Gold Trust, Info Edge, Apollo Hospitals among others.

Rs. 10000 monthly SIP started in SBI Multi Asset Allocation Fund has grown in value to Rs. 8.2 lakh, providing gains of Rs. 2.2 lakh.

2 Top Rated Multi Asset Allocation Funds By Value Research To Invest In 2021

2 Top Rated Multi Asset Allocation Funds By Value Research To Invest In 2021

Multi-asset allocation funds Rating by Value Research Minimum SIP amount SIP Annualised 1- year return SIP Annualised 3- year return SIP Annualised 5- year return
Axis Triple Advantage 5- star Rs. 1000 43.78% 26.71% 18.58%
SBI Multi Asset Allocation 5- star Rs. 500 22.93% 16.48% 12.35%

Disclaimer:

Disclaimer:

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature.



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DoP Introduces Charges For ATM transactions On ATM Outlets of lndia Post

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Investment

oi-Vipul Das

|

The Department of Posts under the Ministry of Communications has introduced various charges for ATM transactions on ATM outlets of lndia Post as well as other banks. According to the various transaction types, the applicable charges are as follows as on the implementation date 01.10.2021.

DoP Introduces Charges For ATM transactions On ATM Outlets of lndia Post

Debit Card Replacement Charges: Rs 300/- + GST

Duplicate PIN/Regeneration of PIN through Branch: Rs 50/- + GST

ATM/POU transaction technical declines attributable to the customer (i.e. lack of balance in account): Rs 20/- + GST.

AT PoS Cash withdrawals for DoP Debit cards (On-branch transactions): 1% of the transaction value subject to a maximum of Rs 5/- per transaction.

Charges for Withdrawal at ATM:

  • Financial Transactions at other ATMs – Beyond 3 free transactions- (ln Met Cities) and 5 free transactions in No Metro Cities Rs 20/- + GST.
  • Financial Transactions at branch ATMs – Beyond 5 free transactions- Rs 10/- + GST.
  • Non-Financial Transactions at other ATMs- Beyond 3 free transactions- (ln Metro Cities) and 5 free transactions in Non-Metro Cities – Rs 8/- + GST.
  • Non-Financial Transactions at branch ATMs- Beyond 5 free transactional Rs 5/- + GST.
  • ATM/Debit Card Annual Maintenance Charges: Rs 25/- + GST. This charge is applicable on cycles of 01.10.2021 to 30.09.2022 and subsequent cycles. Chargers to be collected at the end of the cycle i.e. on 30.09.2022.
  • SMS alert charges per annum for debit card holders: Rs 12/- + GST. This charge is applicable on cycles of 01.10.2021 to 30.09.2022 and subsequent cycles. Chargers to be collected at the end of the cycle i.e. on 30.09.2022.

Currently, India Post Payments Bank (IPPB), a division of Indian Post governed by the Department of Post, under the Ministry of Communications of the Indian government does not charge ATM monthly transactions at IndiaPost ATMs, and Punjab National Bank’s ATMs for all account variants. IPPB allows 3 free transactions at other bank’s ATMs across metro cities and 5 free transactions at other bank’s ATMs across non-metros.

Additional financial transactions at other bank’s ATMs will be charged Rs 20 and non-financial transactions will be charged Rs 8. These charges are applicable on Regular Savings Account – Safal Account, Basic Savings Bank Deposit Account (BSBDA) – Sugam Account, and BSBDA-Small Account – Saral Account. For regular savings accounts – Safal Account and Basic Savings Bank Deposit Account (BSBDA) – Sugam Account, IPPB allows a maximum ATM withdrawal per transaction of Rs 10,000 and maximum ATM withdrawal per day of Rs 25,000.

For the same account holders, IPPB allows maximum cumulative spend at POS outlets and e-commerce sites per day of Rs 65,000. Whereas for BSBDA-Small Account – Saral Account, IPPB allows INR 10,000 per month in aggregate by way of withdrawals through withdrawal slips at Branch, ATM, POS Outlets, and E-Commerce Transactions.

Story first published: Saturday, September 25, 2021, 13:38 [IST]



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