- RBI COMES TO THE RESCUE OF NBFCs, ALLOWS BANKS TO LEND MORE: Reserve Bank of India relaxed liquidity norms to ease liquidity crunch prevailing in the financial market and allowed banks to lend more to Non-Banking Finance Companies (NBFCs), which are facing Asset-Liability mismatches. RBI said now banks are permitted to raise their exposure to a single NBFC borrower (Only to those NBFCs which do not finance infrastructure) to 15% of its capital. Earlier it was 10%. This move could free as much as Rs. 50,000 crore for lending to NBFC sector. The Asset-Liability mismatch refers to the imbalance between short-term borrowings and long-term investments (lending).
- NBFCs LIQUIDITY CRUNCH TO HIT HOME LOAN SALES: As per a report by Japanese brokerage firm- Nomura, the on-going liquidity crunch faced by Non-Banking Finance Companies (NBFCs) will slow down home loan disbursements by these NBFCs. Banks can utilise this opportunity to increase their market share in housing loans. The real estate developers, which are already reeling under the pressure due to the lack lustre market, will also face further troubles owing NBFCs inability to lend.
- FOREIGN INVESTORS LEAVING INDIAN MARKETS: After 2 years of good Foreign Portfolio Investments (FPI) inflows, the Indian Markets are now witnessing a reversal in the trend as this year the net foreign outflow is $13.7 billion so far as against a net foreign inflow of $ 15.3 billion a year ago. There are several factors that led to FPI outflows—from rising crude oil price to widening of current account deficit.
- MUTUAL FUND COLLECTION VIA SIP INCRESED BY 40%: As per a report by Association of Mutual Fund in India (AMFI), Systematic Investment Plan (SIP) continues to be the preferred route of retail investors to invest in Mutual Fund as it helps them to reduce market risks. Mutual Fund Industry has collected Rs. 7,727 Crore through SIPs in September 2018, as the SIP contribution for the first half of the current fiscal rose to Rs. 44,487 Crore compared to Rs 29,266 Crore in the corresponding period last year, which is a 40% increase.
- DEBIT CARD POS TRANSACTIONS OF AIRTEL, PAYTM AND FINO PAYMENTS BANKS BEAT THOSE OF MID SIZED BANKS: The Point-of-Sale (POS) based transactions reported by the three Payment banks – Airtel, Paytm and Fino has touched a whopping 2.1 million debit card transactions which is higher than those made by debit card holders of some of the mid-sized Public Sector banks. This is as per a data from Reserve bank of India.
- RBI ISSUES e-WALLET INTEROPERABILITY ADVICES: The Reserve Bank of India has issued guidelines for enabling all phases to prepare E-wallets for better interoperability. RBI has clarified that all types of wallet interoperability will happen through Unified Payments Interface (UPI) and cards through interoperable card network. But for security reasons RBI has mandated PPI issuers to adhere to all security guidelines laid down by National Payments Corporation of India (NPCI) for UPI and card networks. However, interoperability will be made available to fully KYC wallets only.
- PUNJAB NATIONAL BANK PLANS TO SELL NON-CORE ASSETS WORTH Rs. 8,600 CRORE: Punjab National Bank, the country’s second largest Public Sector bank has identified various non-bank core assets amounting to Rs. 8,600 crore which it plans to sell during this year. This includes its housing finance arm—PNB Housing Finance Co. The bank has already sold some assets worth Rs 400 crore.
- MAHARASHTRA STATE CO-OPERATIVE BANK TO ENTER FRETAIL BANKING: The Maharashtra State Co-operative Bank, the apex lender in the state’s three tier cooperative banking sector, plans to enter retail banking sector and compete with private sector banking. It has already submitted a proposal to merge Urban Co-operative Banks. The proposal is yet to be cleared by RBI.
This post first appeared on IMPACT OF DEMONITIZATION OF CURRENCY IN INDIA IN 2016, please read the originial post: here
