28.06.2020: Today's Banking / Financial News at a Glance
🍒 President promulgates ordinance to bring co-operative banks under RBI : President Ram Nath Kovind has promulgated the Banking Regulation (Amendment) Ordinance, 2020 to bring all urban cooperative banks and multi-state cooperative banks under the supervision of the RBI in order to protect the interest of depositors. The Ordinance amends the Banking Regulation Act, 1949 as applicable to cooperative banks, an official statement said on Saturday."The Ordinance seeks to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to Co-operative Banks as well for sound banking regulation, and by ensuring professionalism and enabling their access to capital," it said. The amendments do not affect existing powers of the State Registrars of Co-operative Societies under state co-operative laws, it added. - Business Standard
🍒 SBI sanctions loans to over 400,000 MSMEs under credit guarantee scheme : State Bank of India (SBI) has sanctioned loans to over 400,000 accounts under the Rs 3 trillion Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, hit hard by the coronavirus-induced lockdown. On the occasion of International MSME Day, SBI managing director C S Shetty on Friday addressed MSME customers and employees across the nation video conference. SME products were highlighted to the customers to increase awareness and enable them to choose the right product for their business, SBI said in a statement. At the national level, the bank has sanctioned loans to over 400,000 customers under guaranteed emergency credit line (GECL) facility so far, a senior bank official said. About Rs 20,000 crore has been sanctioned to eligible MSME customers under the scheme which was launched on June 1. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the plan to October 31 or till an amount of Rs 3 trillion is sanctioned under the scheme, whichever is earlier. - Business Standard
🍒 SBI working on setting up e-commerce portal for MSMEs: Rajnish Kumar : State Bank of India is working on setting up an e-commerce portal for marketing of products manufactured by micro, small and medium enterprises (MSMEs) in the country, its chairman Rajnish Kumar said on Saturday. The portal called Bharat Craft would be jointly run by the bank and the government. "It is a work in progress. We have conceptualised how it should be done and the development work on this platform is going to commence soon," Kumar said at a webinar organised by CII."This is one of the things that MSME Minister Nitin Gadkari once mentioned about Bharat Craft where SBI will develop this platform. We are very much dwelling on the subject. It requires a lot of elements to be put together. It is definitely on our radar and we are going to do it," he said. He, however, did not elaborate on the contours of it and the timeline by which it should be operationalised. - economic times
🍒 ECLGS: Private banks will soon catch up with PSBs, says Uday Kotak : Private sector banks, which are seen to be lagging in the rollout of the ₹3 lakh crore 100 per cent Emergency Credit Line Guarantee Scheme (ECLGS) focused on supporting MSMEs in these tough Covid-19 times, will soon catch up with the public sector banks (PSBs) on this front, Uday Kotak, CII President, has said. “I do see that private sector banks in the case of the guaranteed scheme have taken a little longer than PSBs. They started a bit later. I do compliment the SBI Chairman and his team for moving at great speed. Having said that, just watch over the next 2-4 weeks, there will be a pick up in momentum from both private banks and PSBs in terms of sanctions and disbursements. It is about getting the house in better shape, and you will see the private banks catch up with PSBs,“ Kotak said at CII Virtual Dialogue on ‘ Strategising the Rollout of Economic Stimulus Package’ on the occasion of International MSME Day. Kotak, who is also MD & CEO of Kotak Mahindra Bank, was responding to a question from a CII member on why private sector banks are taking longer to sanction the MSME loans under the ECLGS and why the rate of interest charged are higher than PSBs - Business Line
🍒 COVID-19 disruption an opportunity for firms to re-strategise: UBI chief : The disruptions caused by the COVID-19 crisis also present an opportunity for businesses to re-strategise and re-invent themselves, Union Bank of India MD and CEO Rajkiran Rai G said. The banking industry is always there to support businesses but they will also have to innovate and look beyond convention, he said at a webinar organised by the PHD Chamber of Commerce and Industry on Friday. "The current disruption is an opportunity to re-strategise and re-invent. See for new geographies to serve, you can launch new products, see for strategic tie-ups wherever possible," he said.The Union Bank chief also said small and medium enterprises (SMEs) have real opportunities to plug into the global supply chain as more companies seek to diversify sourcing inputs.Pointing out that small businesses are mostly one-man shows, he said such companies should adopt digital means for banks to assess their creditworthiness faster and more effectively."There are many simple softwares available, please do that because for a banker data is very important. Now when you have authentic data, you can sumbit to me and then actually my processing becomes much simpler rather than a CA created balance sheet. "I would like to have account balance supported balance sheet where every debit and credit entry comes in and I can authenticate your balance sheet well and I can take a call on the limit (for loan)," Rai said. - economic times
🍒 SBI seeks new consolidated transaction review, forensic audit of Lavasa : State Bank of India has sought a new consolidated transaction review and forensic audit of Lavasa Corporation, the real estate subsidiary of HCC, to provide a clear picture of the company’s financial metrics on a consolidated basis. The new forensic audit was necessitated after the National Company Law Tribunal (NCLT) cleared a consolidated bankruptcy process of all Lavasa companies.Lavasa Corporation was sent for debt resolution in 2018 after the real estate company failed to repay Rs 7,700 crore. Among Lavasa’s creditors, Axis Bank claimed the highest amount of Rs 1,266 crore. Lavasa’s parent, HCC has also defaulted on bank loans.In the committee of creditors’ (CoC’s) meet held on June 9, SBI said there were several inter-connected transactions among Lavasa’s related parties, and individual transaction review audit (TRA) might not be able to provide a complete overview.Certain transactions, SBI said, are so complicated that it would be difficult for CoC to interpret the interlinkages based on individual TRA reports for each entity. SBI said a fresh audit would be in a position to capture such interlinkages through a consolidated TRA report for all entities. Reacting to the SBI’s demand, CoC Chairman Shailesh Verma said a TRA in respect of Lavasa Corporation and Warasgaon Assets Maintenance had already been conducted by their respective erstwhile resolution professionals and necessary applications had been filed with the NCLT. - Business Standard
🍒 RBI extends CRR relaxations till September 25 : The Reserve Bank of India (RBI) has extended the relaxation relating to maintenance of cash reserve ratio (CRR) by all scheduled banks for a further period of three months up to September 25, 2020. The central bank also extended the relaxation relating to enhanced borrowing limit for the aforementioned banks under the Marginal Standing Facility (MSF) scheme till September 30, 2020.When it comes to CRR relaxation, Banks can continue to maintain minimum daily CRR balance of 80 per cent with the RBI.CRR is the slice of deposits that banks have to maintain with the central bank. Currently, the CRR is at 3 per cent of a bank’s deposits. - Business Line
🍒 Yes Bank launches digital savings account : Private sector lender Yes Bank has launched a full service digital savings account which would ensure physical distancing and eliminate the need for a branch visit, physical documentation or any in-person interaction in times of the current pandemic. It will also help the lender to cater to a diverse customer base, especially in tier 1 and tier 2 cities, in line with the its strategy of building a transformed ‘Digital Bank’. “Yes Bank’s digital savings account comes with a virtual debit card, unlocking over 100 features on mobile through YES Mobile and web including transactions, fund transfers and online shopping using the virtual debit card,” it said in a release, adding that the account will offer six per cent interest.- Business Line
🍒 IDBI Bank’s board approves 27 per cent stake sale in IDBI Federal Life Insurance Company : IDBI Bank’s Board of Directors has approved sale of a portion of the Bank’s 48 per cent stake in IDBI Federal Life Insurance Company Limited (IFLI) to current joint venture partners Ageas Insurance International N.V. and Federal Bank at a combined value of about Rs.595 crore. Ageas and Federal Bank will increase their stake in IFLI by 23 per cent (to 49 per cent) and 4 per cent (to 30 per cent), respectively. Post-stake sale, IDBI Bank will have 21 per cent stake in IFLI.IDBI Bank’s board greenlighted the sale at its meeting held on June 26, 2020. The sale is subject to all regulatory approvals to be taken by all related parties and agreements which are yet to be finalised, the Bank said in a regulatory filing. - Business Line
🍒 Govt announces launch of 7-year floating rate savings bonds : The Government has announced the launch of seven-year Floating Rate Savings Bonds, 2020 (Taxable) scheme commencing from July 1. The coupon on January 1, 2021 will be paid at 7.15 per cent. This move comes a month after the Government pulled the plug on 7.75 per cent Savings (Taxable) Bonds, 2018 with effect from the close of banking business on Thursday, May 28, 2020. As per a Reserve Bank of India (RBI) notification, Floating Rate Savings Bonds (FRSBs) will enable person resident in India/Hindu Undivided Family (HUF) to invest in a taxable bond, without any monetary ceiling. - Business Line
🍒 IRDAI asks insurers to offer `Corona Kavach’ policy on or before July 10 : In the backdrop of surging Coronavirus (Covid-19) cases, the Insurance Regulatory and Development Authority of India (IRDAI) has brought in `Corona Kavach', a Covid Standard Health Policy. Significantly, it also said the home care treatment expenses should also be covered under Covid policies.All general and standalone health insurers have been directed to mandatorily offer the product on or before July 10, 2020.As per the guidelines, for general and standalone health insurers who will have to mandatorily offer the policy which covers 14 days of expenses incurred for home treatment. This is in addition to the hospitalisation expenses, which will also be covered. The hospitalisation expenses have also been broad-based and includes Intensive Care Unit (ICU) cost, among others. - Business Line
🍒 AINLIEF questions bid to list LIC in stock markets : The All India National Life Insurance Employees Federation, affiliated to the INTUC, said that it strongly opposes the move of the Centre to list LIC in the stock exchange and also the proposal to sell a part of the government holding through public offering. The Federation's working president Deepak Sharma said in a statement that the main focus of the Government is privatisation and disinvestment of government holdings in Public Sector Undertakings. “The move to list LIC in stock exchange and the proposal to sell a part of the government holding through public offering is not in favour of policy holders of the LIC. It will result in trust deficit by policy holders and may also lead to weakening of the Corporation,” Sharma said. “Experimenting with the structure of LIC will negatively impact the national economy also,” he added. - Business Line
🍒 SOLV partners with Standard Chartered Bank to launch credit card for MSMEs : SOLV, a B2B digital platform for Micro, Small and Medium Enterprises (MSMEs), has launched a credit card tailor-made for the MSME segment, in partnership with Standard Chartered Bank, India. SOLV, registered as Standard Chartered Research & Technology India Pvt. Ltd., is a fully-owned entity of the London-headquartered Standard Chartered Group.The digital platform, in a statement, said the SOLV MSME Credit Card provides business owners with a ready means to meet ongoing business expenses including supplier payments, fuel, logistics, purchase of raw material, utility payments and working capital outlays.Per the statement, the SOLV platform will help small businesses trade goods with each other and expand their customer base across India.The platform said MSMEs are not charged any credit card joining fee, and the card comes with cashback, including 5 per cent cashback on fuel transactions, and reward features. Nitin Mittal, CEO, SOLV, said, “This credit card will help small business owners’ tide over immediate crises such as paying for daily expenses and logistics costs with ready access to funds from a reputed, reliable partner at an affordable rate. ” - Business Line
… Have a Good day..
🍒 President promulgates ordinance to bring co-operative banks under RBI : President Ram Nath Kovind has promulgated the Banking Regulation (Amendment) Ordinance, 2020 to bring all urban cooperative banks and multi-state cooperative banks under the supervision of the RBI in order to protect the interest of depositors. The Ordinance amends the Banking Regulation Act, 1949 as applicable to cooperative banks, an official statement said on Saturday."The Ordinance seeks to protect the interests of depositors and strengthen cooperative banks by improving governance and oversight by extending powers already available with RBI in respect of other banks to Co-operative Banks as well for sound banking regulation, and by ensuring professionalism and enabling their access to capital," it said. The amendments do not affect existing powers of the State Registrars of Co-operative Societies under state co-operative laws, it added. - Business Standard
🍒 SBI sanctions loans to over 400,000 MSMEs under credit guarantee scheme : State Bank of India (SBI) has sanctioned loans to over 400,000 accounts under the Rs 3 trillion Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, hit hard by the coronavirus-induced lockdown. On the occasion of International MSME Day, SBI managing director C S Shetty on Friday addressed MSME customers and employees across the nation video conference. SME products were highlighted to the customers to increase awareness and enable them to choose the right product for their business, SBI said in a statement. At the national level, the bank has sanctioned loans to over 400,000 customers under guaranteed emergency credit line (GECL) facility so far, a senior bank official said. About Rs 20,000 crore has been sanctioned to eligible MSME customers under the scheme which was launched on June 1. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the plan to October 31 or till an amount of Rs 3 trillion is sanctioned under the scheme, whichever is earlier. - Business Standard
🍒 SBI working on setting up e-commerce portal for MSMEs: Rajnish Kumar : State Bank of India is working on setting up an e-commerce portal for marketing of products manufactured by micro, small and medium enterprises (MSMEs) in the country, its chairman Rajnish Kumar said on Saturday. The portal called Bharat Craft would be jointly run by the bank and the government. "It is a work in progress. We have conceptualised how it should be done and the development work on this platform is going to commence soon," Kumar said at a webinar organised by CII."This is one of the things that MSME Minister Nitin Gadkari once mentioned about Bharat Craft where SBI will develop this platform. We are very much dwelling on the subject. It requires a lot of elements to be put together. It is definitely on our radar and we are going to do it," he said. He, however, did not elaborate on the contours of it and the timeline by which it should be operationalised. - economic times
🍒 ECLGS: Private banks will soon catch up with PSBs, says Uday Kotak : Private sector banks, which are seen to be lagging in the rollout of the ₹3 lakh crore 100 per cent Emergency Credit Line Guarantee Scheme (ECLGS) focused on supporting MSMEs in these tough Covid-19 times, will soon catch up with the public sector banks (PSBs) on this front, Uday Kotak, CII President, has said. “I do see that private sector banks in the case of the guaranteed scheme have taken a little longer than PSBs. They started a bit later. I do compliment the SBI Chairman and his team for moving at great speed. Having said that, just watch over the next 2-4 weeks, there will be a pick up in momentum from both private banks and PSBs in terms of sanctions and disbursements. It is about getting the house in better shape, and you will see the private banks catch up with PSBs,“ Kotak said at CII Virtual Dialogue on ‘ Strategising the Rollout of Economic Stimulus Package’ on the occasion of International MSME Day. Kotak, who is also MD & CEO of Kotak Mahindra Bank, was responding to a question from a CII member on why private sector banks are taking longer to sanction the MSME loans under the ECLGS and why the rate of interest charged are higher than PSBs - Business Line
🍒 COVID-19 disruption an opportunity for firms to re-strategise: UBI chief : The disruptions caused by the COVID-19 crisis also present an opportunity for businesses to re-strategise and re-invent themselves, Union Bank of India MD and CEO Rajkiran Rai G said. The banking industry is always there to support businesses but they will also have to innovate and look beyond convention, he said at a webinar organised by the PHD Chamber of Commerce and Industry on Friday. "The current disruption is an opportunity to re-strategise and re-invent. See for new geographies to serve, you can launch new products, see for strategic tie-ups wherever possible," he said.The Union Bank chief also said small and medium enterprises (SMEs) have real opportunities to plug into the global supply chain as more companies seek to diversify sourcing inputs.Pointing out that small businesses are mostly one-man shows, he said such companies should adopt digital means for banks to assess their creditworthiness faster and more effectively."There are many simple softwares available, please do that because for a banker data is very important. Now when you have authentic data, you can sumbit to me and then actually my processing becomes much simpler rather than a CA created balance sheet. "I would like to have account balance supported balance sheet where every debit and credit entry comes in and I can authenticate your balance sheet well and I can take a call on the limit (for loan)," Rai said. - economic times
🍒 SBI seeks new consolidated transaction review, forensic audit of Lavasa : State Bank of India has sought a new consolidated transaction review and forensic audit of Lavasa Corporation, the real estate subsidiary of HCC, to provide a clear picture of the company’s financial metrics on a consolidated basis. The new forensic audit was necessitated after the National Company Law Tribunal (NCLT) cleared a consolidated bankruptcy process of all Lavasa companies.Lavasa Corporation was sent for debt resolution in 2018 after the real estate company failed to repay Rs 7,700 crore. Among Lavasa’s creditors, Axis Bank claimed the highest amount of Rs 1,266 crore. Lavasa’s parent, HCC has also defaulted on bank loans.In the committee of creditors’ (CoC’s) meet held on June 9, SBI said there were several inter-connected transactions among Lavasa’s related parties, and individual transaction review audit (TRA) might not be able to provide a complete overview.Certain transactions, SBI said, are so complicated that it would be difficult for CoC to interpret the interlinkages based on individual TRA reports for each entity. SBI said a fresh audit would be in a position to capture such interlinkages through a consolidated TRA report for all entities. Reacting to the SBI’s demand, CoC Chairman Shailesh Verma said a TRA in respect of Lavasa Corporation and Warasgaon Assets Maintenance had already been conducted by their respective erstwhile resolution professionals and necessary applications had been filed with the NCLT. - Business Standard
🍒 RBI extends CRR relaxations till September 25 : The Reserve Bank of India (RBI) has extended the relaxation relating to maintenance of cash reserve ratio (CRR) by all scheduled banks for a further period of three months up to September 25, 2020. The central bank also extended the relaxation relating to enhanced borrowing limit for the aforementioned banks under the Marginal Standing Facility (MSF) scheme till September 30, 2020.When it comes to CRR relaxation, Banks can continue to maintain minimum daily CRR balance of 80 per cent with the RBI.CRR is the slice of deposits that banks have to maintain with the central bank. Currently, the CRR is at 3 per cent of a bank’s deposits. - Business Line
🍒 Yes Bank launches digital savings account : Private sector lender Yes Bank has launched a full service digital savings account which would ensure physical distancing and eliminate the need for a branch visit, physical documentation or any in-person interaction in times of the current pandemic. It will also help the lender to cater to a diverse customer base, especially in tier 1 and tier 2 cities, in line with the its strategy of building a transformed ‘Digital Bank’. “Yes Bank’s digital savings account comes with a virtual debit card, unlocking over 100 features on mobile through YES Mobile and web including transactions, fund transfers and online shopping using the virtual debit card,” it said in a release, adding that the account will offer six per cent interest.- Business Line
🍒 IDBI Bank’s board approves 27 per cent stake sale in IDBI Federal Life Insurance Company : IDBI Bank’s Board of Directors has approved sale of a portion of the Bank’s 48 per cent stake in IDBI Federal Life Insurance Company Limited (IFLI) to current joint venture partners Ageas Insurance International N.V. and Federal Bank at a combined value of about Rs.595 crore. Ageas and Federal Bank will increase their stake in IFLI by 23 per cent (to 49 per cent) and 4 per cent (to 30 per cent), respectively. Post-stake sale, IDBI Bank will have 21 per cent stake in IFLI.IDBI Bank’s board greenlighted the sale at its meeting held on June 26, 2020. The sale is subject to all regulatory approvals to be taken by all related parties and agreements which are yet to be finalised, the Bank said in a regulatory filing. - Business Line
🍒 Govt announces launch of 7-year floating rate savings bonds : The Government has announced the launch of seven-year Floating Rate Savings Bonds, 2020 (Taxable) scheme commencing from July 1. The coupon on January 1, 2021 will be paid at 7.15 per cent. This move comes a month after the Government pulled the plug on 7.75 per cent Savings (Taxable) Bonds, 2018 with effect from the close of banking business on Thursday, May 28, 2020. As per a Reserve Bank of India (RBI) notification, Floating Rate Savings Bonds (FRSBs) will enable person resident in India/Hindu Undivided Family (HUF) to invest in a taxable bond, without any monetary ceiling. - Business Line
🍒 IRDAI asks insurers to offer `Corona Kavach’ policy on or before July 10 : In the backdrop of surging Coronavirus (Covid-19) cases, the Insurance Regulatory and Development Authority of India (IRDAI) has brought in `Corona Kavach', a Covid Standard Health Policy. Significantly, it also said the home care treatment expenses should also be covered under Covid policies.All general and standalone health insurers have been directed to mandatorily offer the product on or before July 10, 2020.As per the guidelines, for general and standalone health insurers who will have to mandatorily offer the policy which covers 14 days of expenses incurred for home treatment. This is in addition to the hospitalisation expenses, which will also be covered. The hospitalisation expenses have also been broad-based and includes Intensive Care Unit (ICU) cost, among others. - Business Line
🍒 AINLIEF questions bid to list LIC in stock markets : The All India National Life Insurance Employees Federation, affiliated to the INTUC, said that it strongly opposes the move of the Centre to list LIC in the stock exchange and also the proposal to sell a part of the government holding through public offering. The Federation's working president Deepak Sharma said in a statement that the main focus of the Government is privatisation and disinvestment of government holdings in Public Sector Undertakings. “The move to list LIC in stock exchange and the proposal to sell a part of the government holding through public offering is not in favour of policy holders of the LIC. It will result in trust deficit by policy holders and may also lead to weakening of the Corporation,” Sharma said. “Experimenting with the structure of LIC will negatively impact the national economy also,” he added. - Business Line
🍒 SOLV partners with Standard Chartered Bank to launch credit card for MSMEs : SOLV, a B2B digital platform for Micro, Small and Medium Enterprises (MSMEs), has launched a credit card tailor-made for the MSME segment, in partnership with Standard Chartered Bank, India. SOLV, registered as Standard Chartered Research & Technology India Pvt. Ltd., is a fully-owned entity of the London-headquartered Standard Chartered Group.The digital platform, in a statement, said the SOLV MSME Credit Card provides business owners with a ready means to meet ongoing business expenses including supplier payments, fuel, logistics, purchase of raw material, utility payments and working capital outlays.Per the statement, the SOLV platform will help small businesses trade goods with each other and expand their customer base across India.The platform said MSMEs are not charged any credit card joining fee, and the card comes with cashback, including 5 per cent cashback on fuel transactions, and reward features. Nitin Mittal, CEO, SOLV, said, “This credit card will help small business owners’ tide over immediate crises such as paying for daily expenses and logistics costs with ready access to funds from a reputed, reliable partner at an affordable rate. ” - Business Line
… Have a Good day..
