MUMBAI: Payments banks promoted by corporates will not be eligible to seek a transition to a small finance bank with the Reserve Bank of India not accepting the internal working group proposal on bank licenses for corporates.
Of the payments banks that are already licensed, Airtel Payments Bank and Jio Payments Banks are promoted by corporates. These are the only two payments banks of the 11 that were granted approval that continue to function. Aditya Birla Payments Bank had surrendered its licence in 2019 others including Sun Pharma’s Dilip Shanghvi had dropped their plans earlier.
This would mean that small finance banks would have to come from the NBFC microfinance segment or cooperative banks that choose to convert themselves into small finance banks. Most of the small finance banks operating today were largely converted from microfinance companies or non-banking finance companies engaged in small loans.
Among the non-corporate promoted payments banks, Paytm PB and Fino PB have indicated that they would pursue an SFB licence if the opportunity arises.
RBI’s internal working group on bank ownership had said that small finance banks would be considered for transitioning into a universal bank provided they meet the minimum paid-up capital and net worth requirement applicable to universal banks.
SFBs are considered to have a better business model compared to payments banks as they can lend and issue credit cards. They also do not face any geographic or size restrictions, unlike cooperative banks. However, they do face restrictions in extending large loans to corporate houses.
Tamil Nadu Transport Development Finance Corporation Fixed Deposits Interest Rates (Non senior citizens, regular interest income)
Period
Monthly
Quarterly
Annually
24 months
–
7.25%
–
36-months
7.75%
7.75%
7.98%
60-months
8.00%
8.00%
8.24%
Tamil Nadu Transport Development Finance Corporation Fixed Deposits Interest Rates (senior citizens, regular interest income)
Period
Monthly
Quarterly
Annually
24 months
–
7.25%
–
36-months
8.25%
8.25%
8.51%
60-months
8.50%
8.50%
8.77%
The interest rates are as on December 3, 2021. This is a government of Tamil Nadu backed enterprise and hence the deposits are very safe. The deposits are also available under the cumulative scheme, where the interest rate is more or less the same, but, the yields could go higher because of compounding.
Other details of the Tamil Nadu Transport Development Finance Corporation Fixed Deposits
The deposits cannot be opened online and one may have to visit the office or courier the fixed deposit forms, duly filled-in with the KYC requirements. Under the money multiplier scheme the deposits are compounded quarterly. The company is a good profit making enterprise that has been generating profits since 1975.
These deposits are relatively safe, but, the only problem right now is that there is no online facility. Therefore, it would be beneficial for those staying in Tamil Nadu and who can visit the office and open the fixed deposits. For other set of investors the task maybe a little more painful.
However, with the interest rates going as high as 8.77% and if you have a big amount, even travelling to Tamil Nadu to open the deposits maybe worth.
Invest in these deposits for the long-term
It is unlikely that interest rates in the economy would rally higher any time soon. It is therefore imperative to block money at higher interest rates for a longer term tenure. For example, senior citizens can get as high as 8.77% on the 5-year deposit. It is therefore advisable to go for the 5 year tenure period. We believe that in an era where even the Senior Citizens Savings Scheme is able to offer only 7.4% interest for senior citizens this is not a bad option at all. Apart from this the Tamil Nadu Transport Development Finance Corporation is a wholly owned company of the government of Tamil Nadu.
There is another company called the Tamil Nadu Power and Infra Finance company, where the fixed deposit interest rate offered is as high as 8.5%. This company interestingly has online facilities and investors can open their fixed deposits online. Those who are long term investors should apply for these deposits. The Reserve Bank of India is unlikely to hike interest rates anytime soon and the current rates being offered of upto 8.5 to 8.77 per cent is not bad at all. It’s hard to get returns on fixed deposits these days.
The country’s largest lender State Bank of India (SBI) saw its yield on domestic advances fall 71 basis points on a year-on-year basis in Q2FY22 to 7.51%.
By Piyush Shukla
Yields on advances by banks have fallen between 54-166 basis points (bps) in the September quarter (Q2FY22) compared to the same period last year, due to interest rate competition from capital markets and lower credit offtake.
The country’s largest lender State Bank of India (SBI) saw its yield on domestic advances fall 71 basis points on a year-on-year basis in Q2FY22 to 7.51%. Its total domestic advances, as on September end, rose 4.6% year on year to Rs 21.56 lakh crore. ICICI Bank, on the other hand, saw its yield on advances fall to 8.34% in Q2FY22 from 8.88% a year ago. The private lender’s total loan book, as on September end stood at Rs 7.65 lakh crore, up 17.2% on year.
“Credit offtake in the system remains weak at around 6%-6.5%. On the capital markets side, the borrowing rates are very fine so some part of the borrowing is moving toward the capital market and thus banks are also passing on the benefit of lower cost of funds to borrowers and which is why you see the yield coming down,” said Karan Gupta, director – financial institutions, India Ratings and Research.
Gupta added that presently banks are not witnessing a significant impact on their net interest margins (NIMs) despite lower yields because of lower cost of funds. For SBI, the cost of deposit has fell from 4.35% in Q2FY21 to 3.84% as on September end. Similarly, private sector banks including ICICI Bank and IDBI Bank saw their cost of deposits fall to 3.53% and 3.66% in Q2FY22 from 4.22% and 4.53% a year ago, respectively. But while not visible yet, NIMs may be impacted going ahead due to any significant increase in concerns on asset quality deterioration resulting in interest income reversals, Gupta said. In July-September, Bank of Baroda’s global NIM fell 19-bps quarter-on-quarter to 2.85% due to interest income reversal pertaining to a non-banking finance company account, as per an Edelweiss Securities report.
“…If we were to look at the net of one offs, including interest reversals on account where there was a stay, our net interest margins would be broadly unchanged between last quarter and this quarter,” said Sanjiv Chadha, MD and CEO at Bank of Baroda in a post earnings analyst call.
N Kamakodi, MD & CEO of CUB, recently said during an analysts’ call that when the growth of other credit increases, correspondingly the growth of gold loan would also decrease.
South India-based private sector lender City Union Bank (CUB) has said it will start pushing growth in non-gold loan advances by the end of the current financial year. During the last few quarters, due to the Covid pandemic and in the absence of other avenues for growth, the bank had given thrust to improve gold loans, which were increased by 73% from Rs 4,537 crore in Q2 FY21 to Rs 7,849 crore in Q2 FY 22.
N Kamakodi, MD & CEO of CUB, recently said during an analysts’ call that when the growth of other credit increases, correspondingly the growth of gold loan would also decrease.
“We have not pushed our growth pedal in non-gold loan credit. We should be probably starting that from the end of the financial year if everything goes well. When the growth of other credit increases, correspondingly the growth of gold loan will also decrease, this is how we have managed growth in the past,” he said.
Currently, all the rural and semi-urban branches of the bank have gold loan as a product. As regards to metro branches, may be only 10% of the branches will have gold loan products. Out of a total 700, 350 to 400 branches may have gold loan products, he said.
On the recovery front, Kamakodi said in the first half of FY22, the bank had recorded a total recovery of Rs 290 crore comprising about Rs 210 crore from live accounts and about Rs 80 crore from technically written-off accounts, compared to Rs 108 crore comprising Rs 72 crore of live account and Rs 36 crore from technically written-off accounts in H1 of FY21.
In Q2 of FY22, it recorded a total recovery of Rs 189 crore comprising Rs 128 crore from live accounts and Rs 61 crore from the technically written off accounts. “The current quarter recovery is the highest in the recent years, but still has to improve from here. The recovery will determine the ROA over the next couple of years, so we are taking all our steps under our command to improve this going forward,” he said.
The total provisions made during Q2 of FY22 and H1 of FY22 was at Rs 223 crore and Rs 433 crore against Rs 227 crore and Rs 429 crore in Q2 of FY21 and H1 of FY21 respectively.
He said that post Covid, only 4% to 5% of the transactions has been happening through the branches creating a huge capacity once the growth pace picks up. On the network expansion plans, he said the bank every year used to keep plans for about 50 branches. “We opened only 3 branches or so in the financial year 2021 and this year probably we may open about 25 branches. That is what we are planning if everything goes well and we may initiate around 75 branches getting opened in the next year,” he said.
Kamakodi said the bank will also be looking at the co-lending space, underlining that it will do it on its own our terms by identifying a proper partner, going through small portfolio, testing the behaviour through cycles before expanding it and taking it as one of the main avenues of growth.
“What I can definitely say is that for the next three years, we would have definitely started co-lending, but it will not be a very significant proportion of our overall book even three years down the line. Once we get the total comfort and grip over how that segment is performing and what amount of control we have on that portfolio, we will take further call on that,” he said.
However, NBFCs would have to invest in systems and processes to comply with daily stamping requirements, India Ratings said, adding that it understands that NBFCs have presented to the RBI for providing a transition period on this requirement.
Non-banking finance companies (NBFCs) will likely see around one-third rise in their non-performing assets (NPAs) after the Reserve Bank of India’s (RBI) latest clarification on upgradation of non-performing non performing assets (NPAs) kicks in.
On November 12, the central bank said loan accounts classified as NPAs may be upgraded to ‘standard’ assets only if the entire arrears of interest and principal are paid by the borrower. The rule will apply to both banks and NBFCs.
India Ratings said NBFCs will likely have modest impact on provisioning because of the clarification as such lenders are using Indian Accounting Standard (IND-As), and generally for higher-rated NBFCs, provision policy is more conservative than income recognition, asset classification (IRAC) requirements. However, NBFCs would have to invest in systems and processes to comply with daily stamping requirements, India Ratings said, adding that it understands that NBFCs have presented to the RBI for providing a transition period on this requirement.
“Accounts can get into NPA category just for a day’s delay in paying the instalments and once it gets categorised as NPA it will not be able to become standard unless all the arrears are cleared. So, in other words, accounts would get categorised as NPAs at a faster pace and would remain sticky in that category for a longer period of time. Both these accounting treatments would result into higher headline number for NBFCs. It may so happen that NBFCs would disclose NPA numbers as per IRAC norms and stage 3 numbers as per Ind-As separately in their disclosures,” India Ratings said.
EMD in the form of Demand Draft drawn in favour of Reserve Bank of India, of a Scheduled Bank or Bank Guarantee as per proforma annexed hereto shall be deposited in original at the office of tender inviting authority on or before 2:00 PM of 22.12.2021.
EMD can also be remitted to Reserve Bank of India Account on or before 2:00 PM of 22.12.2021. The account details for NEFT transactions are as under: Beneficiary Name- Reserve Bank of India IFSC: RBIS0COD001 Account No: 41869163273
Proof of remittance indicating transaction number and other details shall be uploaded on Bank’s approved e-tender portal along with other tender documents
g.
Bid Start date– Date of Starting of e-Tender for submission of on line Techno-Commercial Bid and price Bid at www.mstcecommerce.com/eprochome/rbi
10:00 AM of 15.12.2021
h.
Bid close date– Date of closing of online e-tender for submission of Techno-Commercial Bid & Price Bid.
2:00 PM of 22.12.2021
i.
a. Tender open Date:-
Date & time of opening of Part –I (i.e. Techno – Commercial Bid)
b. Part –II Price Bid: – Date of opening of part II (i.e. price bid shall be informed separately.)
a. 3.00 PM of 22.12.2021
b. shall be informed separately to the bidders eligible for Part II of the tender
Note: The firms have to pay the mandated transaction fee to MSTC payment gateway in favor of MSTC LIMITED
Record date for the interim dividend pay-out for Fy 2022
For the announced dividend, the company has also decided the record date and fixed it as Wednesday the 15th December 2021. The record date is the date when the company finds out or determines the eligibility of the shareholders who will be entitled to receive this dividend pay-out. On this record date, you or a shareholder must be having shares of this company in his demat account for the dividend payment to be credited against these shares in due time.
Rs. 9.01/share dividend pay-out soon by this company
If you could not still make it out, the company we are talking about is NMDC or NationalNational Mineral Development Corporation. The divestment in this PSU major kicked off in July this year via the OFS or auction route. In the stake sale, the centre looked at selling 7.49 percent stake in the firm.
To know about other companies to pay-out dividend soon read here.
About NMDC and its dividend history
Incorporated in 1958 as a Government of India fully-owned public enterprise, NMDC is under the administrative control of the Ministry of Steel. Since inception, the company is into the exploration of an array of minerals including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach sands etc. The company is the country’s single largest iron ore producer. Talking about its scrip, the company commands a share price of Rs. 145.95 and has a market capitalisation of Rs. 42,772 crore.
The company has been consistently making dividend pay-outs and considering the last fiscal year’s dividend of 7.76 per share, the dividend yield turns out to be 5.32 percent which is quite impressive.
Disclaimer:
Note we are just putting before readers a stock that has announced a dividend, nonetheless readers should not misread it as a call for investment into the scrip.
1. Reserve Bank of India – Liabilities and Assets*
(₹ Crore)
Item
2020
2021
Variation
Nov. 27
Nov. 19
Nov. 26
Week
Year
1
2
3
4
5
4 Loans and Advances
4.1 Central Government
0
0
0
0
0
4.2 State Governments
2112
8631
460
-8171
-1652
* Data are provisional.
2. Foreign Exchange Reserves
Item
As on November 26, 2021
Variation over
Week
End-March 2021
Year
₹ Cr.
US$ Mn.
₹ Cr.
US$ Mn.
₹ Cr.
US$ Mn.
₹ Cr.
US$ Mn.
1
2
3
4
5
6
7
8
1 Total Reserves
4776057
637687
18576
-2713
557104
60704
518799
62867
1.1 Foreign Currency Assets
4304119
574664
27141
-1048
379951
37971
353113
41209
1.2 Gold
290793
38825
-9272
-1566
43070
4945
30141
3633
1.3 SDRs
142576
19036
606
-74
131712
17550
131507
17542
1.4 Reserve Position in the IMF
38569
5162
100
-25
2371
238
4037
483
*Difference, if any, is due to rounding off
4. Scheduled Commercial Banks – Business in India
(₹ Crore)
Item
Outstanding as on Nov. 19, 2021
Variation over
Fortnight
Financial year so far
Year-on-year
2020-21
2021-22
2020
2021
1
2
3
4
5
6
2 Liabilities to Others
2.1 Aggregate Deposits
15779059
-267693
802942
665547
1411961
1408625
2.1a Growth (Per cent)
–1.7
5.9
4.4
10.9
9.8
2.1.1 Demand
1820881
-152239
-105487
-40311
179776
309365
2.1.2 Time
13958178
-115454
908430
705858
1232185
1099260
2.2 Borrowings
260319
2742
-45417
16294
-58149
-3703
2.3 Other Demand and Time Liabilities
615238
-20282
32900
-41369
128804
-21337
7 Bank Credit
11162247
1157
64020
212738
574578
727366
7.1a Growth (Per cent)
0.0
0.6
1.9
5.8
7.0
7a.1 Food Credit
82415
5549
37192
21161
-2349
-6541
7a.2 Non-food credit
11079831
-4392
26828
191577
576926
733907
6. Money Stock: Components and Sources
(₹ Crore)
Item
Outstanding as on
Variation over
2021
Fortnight
Financial Year so far
Year-on-Year
2020-21
2021-22
2020
2021
Mar. 31
Nov. 19
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
1
2
3
4
5
6
7
8
9
10
11
12
M3
18844578
19646589
-268109
-1.3
1137975
6.8
802012
4.3
1992190
12.5
1708651
9.5
1 Components (1.1.+1.2+1.3+1.4)
1.1 Currency with the Public
2751828
2878178
-1080
0
323786
13.8
126349
4.6
501046
23.1
204644
7.7
1.2 Demand Deposits with Banks
1995120
1957011
-152768
-7.2
-104755
-6.0
-38109
–1.9
184977
12.8
324073
19.8
1.3 Time Deposits with Banks
14050278
14763539
-114241
-0.8
915548
7.2
713261
5.1
1296575
10.5
1173976
8.6
1.4 ‘Other’ Deposits with Reserve Bank
47351
47861
-21
0
3396
8.8
511
1.1
9592
29.7
5958
14.2
2 Sources (2.1+2.2+2.3+2.4-2.5)
2.1 Net Bank Credit to Government
5850374
6075969
-94934
-1.5
731152
14.7
225595
3.9
800672
16.4
384455
6.8
2.1.1 Reserve Bank
1099686
1193964
7158
0.6
31755
94278
58509
170017
2.1.2 Other Banks
4750689
4882005
-102092
-2.0
699397
17.6
131316
2.8
742163
18.9
214438
4.6
2.2 Bank Credit to Commercial Sector
11668466
11870266
-3881
0
53740
0.5
201800
1.7
624115
6.0
777882
7.0
2.2.1 Reserve Bank
8709
4634
2494
116.5
-993
-4075
5029
-7539
2.2.2 Other Banks
11659757
11865632
-6375
-0.1
54733
0.5
205875
1.8
619086
5.9
785420
7.1
8. Liquidity Operations by RBI
(₹ Crore)
Date
Liquidity Adjustment Facility
MSF*
Standing Liquidity Facilities
Market Stabilisation Scheme
OMO (Outright)
Long Term Repo Opera tions&
Targeted Long Term Repo Opera tions#
Special Long- Term Repo Operations for Small Finance Banks
Special Reverse Repo£
Net Injection (+)/ Absorption (-) (1+3+5+ 6+9+10+ 11+12-2- 4-7-8-13)
Repo
Reverse Repo*
Variable Rate Repo
Variable Rate Reverse Repo
Sale
Purc hase
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Nov. 22, 2021
–
113246
–
–
40
–4194
–
445
–
–
–
100
–
-117745
Nov. 23, 2021
–
156814
–
148073
0
–
–
–
–
–
–
–
–
-304887
Nov. 24, 2021
–
177454
–
–
0
–
–
720
–
–
–
–
–
-178174
Nov. 25, 2021
–
191837
–
–
0
–
–
135
–
–
–
–
–
-191972
Nov. 26, 2021
–
196144
–
–
65
–
–
530
–
–
–
–
–
-196609
Nov. 27, 2021
–
3450
–
–
159
–
–
–
–
–
–
–
–
-3291
Nov. 28, 2021
–
2458
–
–
14
–
–
–
–
–
–
–
–
-2444
* Includes additional Reverse Repo and additional MSF operations (for the period December 16, 2019 to February 13, 2020). # Includes Targeted Long Term Repo Operations (TLTRO) and Targeted Long Term Repo Operations 2.0 (TLTRO 2.0) and On Tap Targeted Long Term Repo Operations. Negative (-) sign indicates repayments done by Banks. & Negative (-) sign indicates repayments done by Banks. £ As per Press Release No. 2021-2022/177 dated May 07, 2021. From June 18, 2021, the data also includes the amount absorbed as per the Press Release No. 2021-2022/323 dated June 04, 2021.
The captioned Meeting was held at 11.00 am on December 2, 2021 in the Video Conference Room on the third floor of the Bank’s Main Office Building at Bakery Junction, Thiruvananthapuram.
(a) List of Bank’s Officials who attended the meeting
1
Shri Thanikkachalem M
Assistant Manager
2
Shri K V P Shiva Priyanth
Assistant Manager
(b) List of Firm’s representative who attended the meeting
Name of Representative
Name of Firm
1
Shri Ajmal M
M/s Excel Interiors
2
Shri Jayachandran G
Jayachandran G
3
Shri Sunil Kumar P
Jayachandran G
4
Shri Renjith G P
M/s Baby Constructions
5
Shri Sreeraj V M
M/s Cochin Timbers
6
Shri Vishnu
M/s Drishti Infrastructure Services
7
Shri Nitheesh K V
M/s K R Builders and Interiors
2. Shri Thanikkachalem, Assistant Manager invited queries from the prospective bidders regarding the captioned tender. The details of queries raised by the firm and clarifications / comments of the Bank are tabulated below:
Sl. No.
Query
Clarification
1
Colour, Pattern and type of Granite to be used
It was informed that Basic rate of granite is mentioned in the Schedule of quantities in tender. L1 bidder has to submit the sample of granite for Banks’s approval before execution of the work. Colour and pattern of granite will be similar to flooring in 2nd floor corridor.
2
Whether granite is to be purchased from any specific shop/dealer.
Bank does not insist on purchasing granite from any shop/ dealer. However, quality as per tender specification should be ensured.
3
Whether part payments are allowed
It was informed that the interim value of work done towards running bill is ₹ 7 lakh as indicated in the tender.
4
Whether there will be hindrance in carrying out work during office hours.
It was clarified that dismantling works etc. may be carried out during holidays and weekends. Other activities may be carried out with least inconvenience to the functioning of office.
5
Where should the debris be stacked
It was informed that debris needs to be removed on regular basis. In case of any unavoidable circumstances, debris can be stacked at location identified by the Bank.
Note: Bidders shall note that above clarifications along with details indicated in tender shall form part of the contract.
Tender for Design, supply, installation, testing and commissioning (DSITC) of 9.9 KWp Grid Interactive Solar power plant in Bank’s staff quarters at Besant Nagar, Chennai.
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