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☕ 17.07.2020: Today's Banking / Financial News at a Glance
🍒 Central Bank of India to raise up to ₹5,000 cr equity capital : State-owned Central Bank of India will raise up to ₹5,000 crore of equity capital through various modes, including follow on public offer and rights issue, to maintain its capital adequacy ratio. The bank said it plans to raise capital through follow on public offer (FPO), rights issue or qualified institutional placement (QIP), and will seek approval from shareholders in the upcoming annual general meeting to be held on August 7, 2020.As per Basel III regulations, the bank is required to maintain minimum common equity tier-1 (CET 1) ratio of 5.50 per cent plus capital conservation buffer (CCB) of 2.50 per cent in the form of equity capital, tier-1 ratio of 9.50 per cent and overall CRAR of 11.50 per cent, Central Bank of India said in its annual report for 2019-20.“The bank will be requiring capital to meet the prescribed capital adequacy ratio (CRAR). Therefore, the bank directors have decided to raise equity capital up to ₹5,000 crore through various modes such as - Follow-on-Public Issue, Rights Issue, Qualified Institutions Placements,” the bank said in the annual report.The enhanced capital will be utilised for general business purposes of the bank, it said.In his message to shareholders, bank’s chairman Tapan Ray underlined the unprecedented disruptions across the world due to the Covid-19 pandemic, leading to considerable adverse impact on global economy.Government’s recapitalisation of public sector banks in 2019 and various measures are to strengthen the banking system, Ray said.“Banks have now moved towards risk based pricing, creation of stressed asset verticals, cash-flow ring fencing, etc. with a view to improve efficiency. Such measures would inevitably strengthen the efficacy of the banking system and increase credit flow in the economy.“To ensure better transmission of policy rates to the real economy, the banks have linked their various products to external benchmarks. This move would further enhance the efficiency gains for the economy as a whole,” he said.The bank’s managing director and chief executive officer Pallav Mohapatra said high frequency data indicates that the COVID-19 pandemic adversely impacted the economy in Q1 of financial year 2020-21.Asset quality continued to be the major concern of the banking industry in general, and particularly in the bank for last 3-4 years, Mohapatra said.Cash recovery, including sale of non-performing assets (NPAs), fell to ₹3,326 crore in FY20 against ₹ 5,161 crore in the preceding fiscal, while recovery in written off accounts rose to ₹693 crore from ₹557 crore, he said. Central Bank of India narrowed its net loss to ₹1,121 crore in the fiscal ended March 2020 from ₹5,641 crore loss in FY19. - Business Line
🍒 Banks sanction about Rs 1.23 lakh crore loans to MSMEs under credit guarantee scheme : The finance ministry on Thursday said banks have sanctioned loans of about Rs 1.23 lakh crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, reeling under the economic slowdown caused by COVID-19 pandemic. However, disbursements against this stood at Rs 68,311 crore till July 15 under the 100 per cent ECLGS for micro, small and medium enterprises (MSMEs).The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May. The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 22 private sector banks and 21 non-banking financial companies (NBFCs). “As of 15 July 2020, the total amount sanctioned under the 100 per cent Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,23,345.16 crore, of which Rs 68,311.55 crore has already been disbursed,” the finance minister said in a tweet. Under the ECLGS, the loan amounts sanctioned by PSBs increased to Rs 69,135.19 crore, of which Rs 41,819 crore has been disbursed as of July 15, she said. At the same time, private sector banks have sanctioned Rs 54,209.97 crore and disbursed Rs 26,492 crore. - Financial Express
🍒 SBI Card MD & CEO Hardayal Prasad resigns : SBI Cards and Payment Services (SBI Card) on Thursday said its MD & CEO Hardayal Prasad has resigned pursuant to voluntary retirement from SBI -- the promoter of the company. “We wish to inform that the Board of Directors of the company at its meeting held on Wednesday, July 15, 2020 approved resignation of Hardayal Prasad, Managing Director & CEO (nominated by State Bank of India) of the company who has tendered his resignation from directorship of the company,” SBI Card said in a regulatory filing. He took over as MD & CEO of SBI Card in February 2018.Prasad’s resignation comes into effect from the close of business hours of July 31, 2020, owing to his voluntary retirement from SBI , it said.“He will also cease to be the MD &CEO of the company from the said date,” SBI Card added. The board also appointed Ashwini Kumar Tewari as Managing Director & CEO (nominated by SBI) of the company with effect from August 1, 2020 for a period of two years, the filing said.Tewari’s appointment is subject to all the requisite approvals including approval of the shareholders at the ensuing Annual General Meeting. “This is to further confirm that Tewari is not related to any of the directors of the company,” SBI Card added. - Business Line
🍒 SBI sends BPSL promoters notice to call them wilful defaulters : State Bank of India (SBI) has initiated proceedings to declare Bhushan Power & Steel (BPSL) promoters as willful defaulters. In a show cause notice to Sanjay Singal and his wife Aarti Singal the bank asked them to be personally present in front of its wilfull defaulter identification committee to put forth their point of view. Singal and his wife have challenged the notice in the Delhi High Court on the grounds that not enough information was provided by the bank with the notice."Without providing any relevant details of material documents to the petitioners in support of the purported allegations made against the petitioners in the impugned letter dated 07.06.2019, and while the ongoing Covid-19 pandemic, the respondent bank issued yet another letter dated 02.07.2020 (received on 07.07.2020) to the petitioners calling the petitioners for a personal hearing on 17.07.2020 at the office of the respondent," the petition, a copy of which is with ET, said. "The wilful defaulter identification committee of the bank is pleased to offer you an opportunity for personal hearing to make your submissions before the committee. Accordingly, if you would like to avail, the said opportunity you may remain present in person at the venue State Bank of India, Corporate Centre, State Bank Bhavan, Mumbai or make your submissions through video conferencing arranged at State Bank of India, stressed assets management Branch-1, office New Delhi," the SBI notice says. - economic times
🍒 Adopt fair practices to prevent illicit debt recovery methods: RBI to ARCs : The Reserve Bank of India on Thursday asked asset reconstruction companies (ARCs) to adopt a board-approved 'Fair Practices Code', which, among other things, should prohibit the use of uncivilised, unlawful and questionable behaviour for recovery of loans. The Code, the central bank said, should also ensure transparency and fairness in operation. ARCs buy bad loans from banks to turn them around."In order to achieve the highest standards of transparency and fairness in dealing with stakeholders, asset reconstruction companies are advised to put in place Fair Practices Code (FPC) duly approved by their board," the RBI said.It has prescribed the minimum regulatory expectation, while each ARC's board is free to enhance its scope and coverage.The FPC must be followed in right earnest, and the board must involve itself in its evolution and proper implementation at all times, it added. "ARC shall follow transparent and non-discriminatory practices in acquisition of assets. It shall maintain arm's length distance in the pursuit of transparency," it said while asking them that FPC should be placed in public domain for information of all stakeholders. - Business Standard
🍒 ETMONEY corners 28% market share of mutual fund industry's net equity flows in June 2020 : Global economic uncertainties have triggered a 95% slump in equity mutual fund sales, according to key data released by the Association of Mutual Fund in India (AMFI). Beating the trends though, ETMONEY, a wealth management app, continued to generate higher value by driving 28% of equity mutual fund sales of the industry in June ‘20, reaffirming its position as the country’s go-to wealth management app. According to the latest data released by the Association of Mutual Fund in India (AMFI), net inflows in equity mutual funds in the month of June 2020 fell by almost 95% to Rs. 240 crore from Rs.5,256 crore in May. Yet still, ETMONEY witnessed a surge and contributed a major chunk of net sales of mutual funds. - economic times
🍒 Liquidity woes: Small and medium NBFCs seek funding support from Centre : Small and medium NBFCs, which account for 90 per cent of such entities registered with the RBI, have knocked the Centre’s door seeking funding support, stating that the measures taken so far have provided only a limited relief to them. Most of the money (from government and RBI interventions) has flowed into a smaller number of large NBCs, which are highly rated, said the Finance Industry Development Council ( FIDC) Co-Chairman Raman Aggarwal in a letter to Finance Minister Nirmala Sitharaman. Despite the steps taken, the situation of small- and medium-sized NBFCs has not changed significantly, and these companies continue to face difficulties in raising funds, according to the FIDC. FIDC is of the view that the lower translation of benefits to mid- and small-sized NBFCs through TLTRO, Partial Credit Guarantee and other similar interventions seem to be stemming from the tighter evaluation criteria adopted by the banks related to the profit and loss account, such as interest coverage ratio, credit losses, and consequently the profitability. - Business Line
🍒 Govt announces conversion of five G-Secs via July 20 auction : The government, on Thursday, announced the conversion/ switch of five government securities (G-Secs), maturing in 2021 and 2022, for an aggregate amount of ₹30,000 crore (face value), into five securities maturing between 2031 and 2060 through an auction on July 20. This coversion/ switch will help the government postpone the redemption pressure at a time when it is set to borrow ₹4.20-lakh crore more in FY21 as the pandemic-related expenses for the health and social sectors mount.According to a Reserve Bank of India (RBI) statement, the 7.80 per cent (coupon rate) G-Sec maturing in 2021 aggregating ₹4,000 crore will be converted/ switched into a floating rate bond (FRB) maturing in 2033.The 7.94 per cent G-Sec maturing in 2021 aggregating ₹3,000 crore will be converted/ switched into 6.68 per cent G-Sec maturing in 2031. - Business Line
🍒 Private banks stare at washed-out Q1; moratorium, Covid-19 provisions eyed : The nearly washed-out June quarter of financial year 2020-21 (Q1FY21) amid disrupted business activity due to Covid-19 outbreak, along with a seasonally weak period, is expected to polarise private banks’ earnings, analysts say. While business growth may remain weak across the board, profitability will be impacted due to divergent provisioning.“Larger banks with sufficient capital, strong granular liability franchises and a reasonable asset quality track record are expected to emerge stronger. However, elevated provisions are likely to persist for some lenders as they may have chosen to fortify their balance sheets,” analysts at HDFC Institutional Equities said in a results preview note. For Edelweiss Securities, the April-June, 2020 quarter earnings are unlikely to bring forth any big reveal on asset quality, margins or loan growth for lenders. While the moratorium option will ensure nearly invariant asset quality, loan disbursements are likely to be muted, it said in a result expectation report. Analysts at ICICI Securities, for instance, expect private banks to report a divergence in performance with adequate contingent provisioning, low moratoriums, and secured retail loans reporting steady operating performance. - Business Standard
🍒 ‘Covid-19 a key trigger for digitally savvy urban Indians to buy term insurance’ : Max Life Insurance Company will, in the next couple of months, come up with a “refined” term insurance product as it rides on increased preference for term insurance among customers in these Covid-19 times, said a top official. Term insurance is now the most preferred life insurance category during the Covid-19 pandemic and the focus of Max Life will be on product categories that are most relevant for customers, Prashant Tripathy, Managing Director and CEO, told BusinessLine. Also on the anvil is a corona rider (filed with the regulator) that can be used with various products in the company’s portfolio. Already, Max Life has two term products in its portfolio. (Riders are additional benefits added to policy that require an additional premium payment.) - Business Line
🍒 L&T Finance Holdings Q1 net profit down at ₹148 crore on higher provisions : L&T Finance Holdings reported a 73 per cent drop in consolidated net profit for the first quarter of the fiscal on the back of higher provisions. For the quarter ended June 30, it posted a net profit of ₹148 crore against ₹549 crore a year ago.“Adjusted for incremental provisions, the profit after tax for the first quarter stood at ₹580 crore,” it said in a statement on Thursday, adding that profitability for the quarter was largely impacted due to interest cost on enhanced liquidity, lower fee income and, most importantly, incremental provisions taken to strengthen the balance sheet against the after effect of the pandemic. “Incremental provisions of ₹577 crore in the first quarter of the fiscal to strengthen balance sheet. Credit cost in the first quarter is shown at ₹896 crore versus ₹595 crore a year ago,” it said, adding that the Covid-19 provision was ₹277 crore in the first quarter this fiscal. - Business Line
🍒 IndiaFirst Life Insurance upbeat on revival in sales : Private sector IndiaFirst Life Insurance Company is confident of a revival in sales and is working out new ways to reach out to customers digitally in the wake of the pandemic.. “Things are limping back to normalcy and unless there is a big second wave of Covid, we will see this continue as a trend. I don’t expect a dramatic improvement,” said Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance, adding that people are more keen on buying insurance due to worries about the pandemic. - Business Line
🍒 Point-of-sale terminals yet to fire despite repeated nudges by RBI : Imagine walking into a store near you and getting cash using your debit card on the ubiquitous point-of-sale (PoS) terminal. The idea behind the Reserve Bank of India’s (RBI’s) August 2009 initiative was to reduce the reliance on automated teller machines (ATMs) for small-ticket cashouts. This also signalled that cash will continue to linger despite digital modes of payments making strides. Despite repeated central bank reminders, cash-out at PoS has not fired.In FY09, we had 470,237 PoS terminals and 44,857 ATMs; in FY20, it reads 5.13 million and 234,357, respectively. The share of private banks in the deployed PoS terminals is 69 per cent with state-run banks at 27 per cent. The top deployers are RBL Bank with a 25 per cent market share followed by HDFC Bank (17 per cent) and State Bank of India (13 per cent). And to that extent, it’s the commercially savvy private banks which have the lion’s share of deployments. This appears to suggest that the scheme needs a big tweak. Think about it in another way: As of FY20, there were 828.56 million debit cards and only 57.74 million credit cards. The whole idea of increasing the usage of debit cards stands turned on its head — cashout PoS is a critical part of the direct benefits transfer (DBT). - Business Line
🍒 Yes Bank’s ₹15,000 crore FPO sees 53% subscription on second day : The ₹15,000 crore follow-on public offer (FPO) of Yes Bank was subscribed 53% on the second day of the public offer. The portion set aside for qualified institutional buyers was subscribed 1.44 times and that of non-institutional investors was subscribed 11%, while the subscriptions for the reserved portion of retail investors and employees stood at 21% and 12%, respectively. On the first day of the offering, on Wednesday, the FPO was subscribed 24%. The FPO, which will close on Friday, has a price band of ₹12-13 per equity share. On Tuesday, the lender informed stock exchanges that it had allotted 3.41 billion shares worth ₹4,098 crore to anchor investors a day before its follow-on public offering. The shares were allocated to the anchor investors at ₹12 per share. - Live Mint
🍒 Indian banks are in for a ₹20-trillion hole : Unlike many central bank governors who have tried hard to stay tight-lipped during the pandemic, Shaktikanta Das, the governor of the Reserve Bank of India (RBI), did not beat around the bush in his latest speech. At a banking conclave last weekend, he said: “The economic impact of the pandemic… may result in higher non-performing assets (NPAs) and capital erosion of banks. A recapitalization plan for public sector banks (PSBs) and private banks has, therefore, become necessary." If one-twentieth of the loans which are likely to be under a moratorium as of 31 August are defaulted on, the overall quantum of bad loans in the Indian banking system would be close to ₹12 trillion. If one-fifth of them default once the moratorium is lifted, the quantum of bad loans would touch a dizzying ₹20 trillion, more than double the current level. These are extremely conservative estimates, of course. Not surprisingly, former RBI governor Raghuram Rajan said recently: “The levels of NPA will be unprecedented six months from now." With increased defaults, banks will need to be recapitalized, that is, more money will have to be invested in them to keep them going. In fact, there is already enough evidence of increased pressure in the banking system in the days ahead and of the impending storm. - Live Mint
🍒 Capital infusion in 3 state-owned insurers 'credit positive', says Moody's : Moody's Investors Service said on July 16 that the Rs 12,450-crore capital injection in three state-run insurance companies is 'credit positive' as their capital had been significantly depleted over the last few years. Last week, the Union Cabinet had decided to put on hold the merger of National Insurance, The Oriental Insurance and United India Insurance and approved a Rs 12,450 crore capital infusion into these three general insurers. "The capital infusion is credit positive for the insurers, which are among the largest non-life companies in India's insurance market, because their capital has been significantly depleted by several loss-making underwriting years and significant top-line growth," Moody's said in a statement. - Moneycontrol.com
🍒 Global debt hits record high of 331% of GDP in first quarter: IIF : Global debt surged to a record $258 trillion in the first quarter of 2020 as economies around the world shut down to contain the coronavirus pandemic, and debt levels are continuing to rise, the Institute for International Finance said on Thursday in a report. The IIF, which represents global banks and financial institutions, said the first-quarter debt-to-GDP ratio jumped by over 10 percentage points, the largest quarterly surge on record, to reach a record 331 percent. - Moneycontrol.com
🍒 SEBI slaps Rs 5 lakh on Edelweiss Financial Services' compliance officer : Markets regulator Sebi on Thursday imposed a penalty of Rs 5 lakh on Edelweiss Financial Services' compliance officer B Renganathan for failing to close the trading window during the existence of the unpublished price-sensitive information. Sebi, upon receipt of the examination report from the National Stock Exchange (NSE), conducted investigation in the dealings in the scrip of Edelweiss Financial Services Ltd (EFSL) to examine the possible violations of the PIT (Prohibition of Insider Trading) Regulations for the period between January 2017 and April 2017. Renganathan was the compliance officer and company secretary of EFSL during the investigation period, according to the Sebi order. - Moneycontrol.com
🍒 Gold prices steady at Rs 49,267 per 10 gram, silver slips Rs 110 per kg : Gold prices were steady at Rs 49,267 per 10 gram in the Mumbai bullion market on rupee depreciation versus the dollar and lacklustre global cues. The precious metal continues to trade over $1,800 per troy ounce due to ongoing concerns over rising coronavirus cases, while mounting tensions between US and China kept the risk premium high and countered optimism over-promising early results on a potential COVID-19 vaccine. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,950, Rs 45,129 and Rs 49,267 plus 3 percent GST. Silver prices fell Rs 110 to Rs 52,085 per kg from its closing on July 15.
🍒 Rupee slips 3 paise to 75.18 against US dollar : The rupee settled 3 paise lower at 75.18 against the US dollar on Thursday, tracking a strengthening American currency amid worries over mounting Covid-19 cases. At the interbank forex market, the rupee opened at 75.23 and swung between a high of 75.15 and low of 75.29 against the US dollar. It finally settled at 75.18, registering a loss of 3 paise over its previous close. The rupee had ended at 75.15 against the US dollar on Wednesday.
🍒 Sensex rallies 420 points; Infosys soars 10 per cent : Equity benchmark Sensex rallied 420 points on Thursday, led by stellar gains in Infosys, even as global markets faced selling pressure amid spiking coronavirus cases. After a highly volatile session, the 30-share BSE Sensex settled 419.87 points, or 1.16 per cent, higher at 36,471.68.Similarly, the NSE Nifty surged 121.75 points, or 1.15 per cent, to 10,739.95.Infosys rallied around 10 per cent after the IT major posted a stronger-than-expected 12.4 per cent rise in the first quarter consolidated net profit to Rs 4,272 crore, helped by large deals, and said its FY21 revenue is likely to grow by up to 2 per cent.M&M, Nestle India, IndusInd Bank, Kotak Bank, HCL Tech and Axis Bank were the other gainers.On the other hand, Tech Mahindra, ITC, NPTC, PowerGrid, Titan and ONGC finished with losses.
🍒 Shares of Central Bank of India in Stock Market : 67% of moneycontrol users recommend buying Central Bank of India Shares. In BSE, Shares closed at Rs.16.10 against Prev Close Rs.16.35. In NSE, shares closed at Rs.16.20 against Prev Close Rs.16.35.
All the Best… Have a Good day..
#sbi #covid19 #shares #nse #ongc
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☕ 17.07.2020: Today's Banking / Financial News at a Glance
🍒 Central Bank of India to raise up to ₹5,000 cr equity capital : State-owned Central Bank of India will raise up to ₹5,000 crore of equity capital through various modes, including follow on public offer and rights issue, to maintain its capital adequacy ratio. The bank said it plans to raise capital through follow on public offer (FPO), rights issue or qualified institutional placement (QIP), and will seek approval from shareholders in the upcoming annual general meeting to be held on August 7, 2020.As per Basel III regulations, the bank is required to maintain minimum common equity tier-1 (CET 1) ratio of 5.50 per cent plus capital conservation buffer (CCB) of 2.50 per cent in the form of equity capital, tier-1 ratio of 9.50 per cent and overall CRAR of 11.50 per cent, Central Bank of India said in its annual report for 2019-20.“The bank will be requiring capital to meet the prescribed capital adequacy ratio (CRAR). Therefore, the bank directors have decided to raise equity capital up to ₹5,000 crore through various modes such as - Follow-on-Public Issue, Rights Issue, Qualified Institutions Placements,” the bank said in the annual report.The enhanced capital will be utilised for general business purposes of the bank, it said.In his message to shareholders, bank’s chairman Tapan Ray underlined the unprecedented disruptions across the world due to the Covid-19 pandemic, leading to considerable adverse impact on global economy.Government’s recapitalisation of public sector banks in 2019 and various measures are to strengthen the banking system, Ray said.“Banks have now moved towards risk based pricing, creation of stressed asset verticals, cash-flow ring fencing, etc. with a view to improve efficiency. Such measures would inevitably strengthen the efficacy of the banking system and increase credit flow in the economy.“To ensure better transmission of policy rates to the real economy, the banks have linked their various products to external benchmarks. This move would further enhance the efficiency gains for the economy as a whole,” he said.The bank’s managing director and chief executive officer Pallav Mohapatra said high frequency data indicates that the COVID-19 pandemic adversely impacted the economy in Q1 of financial year 2020-21.Asset quality continued to be the major concern of the banking industry in general, and particularly in the bank for last 3-4 years, Mohapatra said.Cash recovery, including sale of non-performing assets (NPAs), fell to ₹3,326 crore in FY20 against ₹ 5,161 crore in the preceding fiscal, while recovery in written off accounts rose to ₹693 crore from ₹557 crore, he said. Central Bank of India narrowed its net loss to ₹1,121 crore in the fiscal ended March 2020 from ₹5,641 crore loss in FY19. - Business Line
🍒 Banks sanction about Rs 1.23 lakh crore loans to MSMEs under credit guarantee scheme : The finance ministry on Thursday said banks have sanctioned loans of about Rs 1.23 lakh crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, reeling under the economic slowdown caused by COVID-19 pandemic. However, disbursements against this stood at Rs 68,311 crore till July 15 under the 100 per cent ECLGS for micro, small and medium enterprises (MSMEs).The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May. The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 22 private sector banks and 21 non-banking financial companies (NBFCs). “As of 15 July 2020, the total amount sanctioned under the 100 per cent Emergency Credit Line Guarantee Scheme by #PSBs and private banks stands at Rs 1,23,345.16 crore, of which Rs 68,311.55 crore has already been disbursed,” the finance minister said in a tweet. Under the ECLGS, the loan amounts sanctioned by PSBs increased to Rs 69,135.19 crore, of which Rs 41,819 crore has been disbursed as of July 15, she said. At the same time, private sector banks have sanctioned Rs 54,209.97 crore and disbursed Rs 26,492 crore. - Financial Express
🍒 SBI Card MD & CEO Hardayal Prasad resigns : SBI Cards and Payment Services (SBI Card) on Thursday said its MD & CEO Hardayal Prasad has resigned pursuant to voluntary retirement from SBI -- the promoter of the company. “We wish to inform that the Board of Directors of the company at its meeting held on Wednesday, July 15, 2020 approved resignation of Hardayal Prasad, Managing Director & CEO (nominated by State Bank of India) of the company who has tendered his resignation from directorship of the company,” SBI Card said in a regulatory filing. He took over as MD & CEO of SBI Card in February 2018.Prasad’s resignation comes into effect from the close of business hours of July 31, 2020, owing to his voluntary retirement from SBI , it said.“He will also cease to be the MD &CEO of the company from the said date,” SBI Card added. The board also appointed Ashwini Kumar Tewari as Managing Director & CEO (nominated by SBI) of the company with effect from August 1, 2020 for a period of two years, the filing said.Tewari’s appointment is subject to all the requisite approvals including approval of the shareholders at the ensuing Annual General Meeting. “This is to further confirm that Tewari is not related to any of the directors of the company,” SBI Card added. - Business Line
🍒 SBI sends BPSL promoters notice to call them wilful defaulters : State Bank of India (SBI) has initiated proceedings to declare Bhushan Power & Steel (BPSL) promoters as willful defaulters. In a show cause notice to Sanjay Singal and his wife Aarti Singal the bank asked them to be personally present in front of its wilfull defaulter identification committee to put forth their point of view. Singal and his wife have challenged the notice in the Delhi High Court on the grounds that not enough information was provided by the bank with the notice."Without providing any relevant details of material documents to the petitioners in support of the purported allegations made against the petitioners in the impugned letter dated 07.06.2019, and while the ongoing Covid-19 pandemic, the respondent bank issued yet another letter dated 02.07.2020 (received on 07.07.2020) to the petitioners calling the petitioners for a personal hearing on 17.07.2020 at the office of the respondent," the petition, a copy of which is with ET, said. "The wilful defaulter identification committee of the bank is pleased to offer you an opportunity for personal hearing to make your submissions before the committee. Accordingly, if you would like to avail, the said opportunity you may remain present in person at the venue State Bank of India, Corporate Centre, State Bank Bhavan, Mumbai or make your submissions through video conferencing arranged at State Bank of India, stressed assets management Branch-1, office New Delhi," the SBI notice says. - economic times
🍒 Adopt fair practices to prevent illicit debt recovery methods: RBI to ARCs : The Reserve Bank of India on Thursday asked asset reconstruction companies (ARCs) to adopt a board-approved 'Fair Practices Code', which, among other things, should prohibit the use of uncivilised, unlawful and questionable behaviour for recovery of loans. The Code, the central bank said, should also ensure transparency and fairness in operation. ARCs buy bad loans from banks to turn them around."In order to achieve the highest standards of transparency and fairness in dealing with stakeholders, asset reconstruction companies are advised to put in place Fair Practices Code (FPC) duly approved by their board," the RBI said.It has prescribed the minimum regulatory expectation, while each ARC's board is free to enhance its scope and coverage.The FPC must be followed in right earnest, and the board must involve itself in its evolution and proper implementation at all times, it added. "ARC shall follow transparent and non-discriminatory practices in acquisition of assets. It shall maintain arm's length distance in the pursuit of transparency," it said while asking them that FPC should be placed in public domain for information of all stakeholders. - Business Standard
🍒 ETMONEY corners 28% market share of mutual fund industry's net equity flows in June 2020 : Global economic uncertainties have triggered a 95% slump in equity mutual fund sales, according to key data released by the Association of Mutual Fund in India (AMFI). Beating the trends though, ETMONEY, a wealth management app, continued to generate higher value by driving 28% of equity mutual fund sales of the industry in June ‘20, reaffirming its position as the country’s go-to wealth management app. According to the latest data released by the Association of Mutual Fund in India (AMFI), net inflows in equity mutual funds in the month of June 2020 fell by almost 95% to Rs. 240 crore from Rs.5,256 crore in May. Yet still, ETMONEY witnessed a surge and contributed a major chunk of net sales of mutual funds. - economic times
🍒 Liquidity woes: Small and medium NBFCs seek funding support from Centre : Small and medium NBFCs, which account for 90 per cent of such entities registered with the RBI, have knocked the Centre’s door seeking funding support, stating that the measures taken so far have provided only a limited relief to them. Most of the money (from government and RBI interventions) has flowed into a smaller number of large NBCs, which are highly rated, said the Finance Industry Development Council ( FIDC) Co-Chairman Raman Aggarwal in a letter to Finance Minister Nirmala Sitharaman. Despite the steps taken, the situation of small- and medium-sized NBFCs has not changed significantly, and these companies continue to face difficulties in raising funds, according to the FIDC. FIDC is of the view that the lower translation of benefits to mid- and small-sized NBFCs through TLTRO, Partial Credit Guarantee and other similar interventions seem to be stemming from the tighter evaluation criteria adopted by the banks related to the profit and loss account, such as interest coverage ratio, credit losses, and consequently the profitability. - Business Line
🍒 Govt announces conversion of five G-Secs via July 20 auction : The government, on Thursday, announced the conversion/ switch of five government securities (G-Secs), maturing in 2021 and 2022, for an aggregate amount of ₹30,000 crore (face value), into five securities maturing between 2031 and 2060 through an auction on July 20. This coversion/ switch will help the government postpone the redemption pressure at a time when it is set to borrow ₹4.20-lakh crore more in FY21 as the pandemic-related expenses for the health and social sectors mount.According to a Reserve Bank of India (RBI) statement, the 7.80 per cent (coupon rate) G-Sec maturing in 2021 aggregating ₹4,000 crore will be converted/ switched into a floating rate bond (FRB) maturing in 2033.The 7.94 per cent G-Sec maturing in 2021 aggregating ₹3,000 crore will be converted/ switched into 6.68 per cent G-Sec maturing in 2031. - Business Line
🍒 Private banks stare at washed-out Q1; moratorium, Covid-19 provisions eyed : The nearly washed-out June quarter of financial year 2020-21 (Q1FY21) amid disrupted business activity due to Covid-19 outbreak, along with a seasonally weak period, is expected to polarise private banks’ earnings, analysts say. While business growth may remain weak across the board, profitability will be impacted due to divergent provisioning.“Larger banks with sufficient capital, strong granular liability franchises and a reasonable asset quality track record are expected to emerge stronger. However, elevated provisions are likely to persist for some lenders as they may have chosen to fortify their balance sheets,” analysts at HDFC Institutional Equities said in a results preview note. For Edelweiss Securities, the April-June, 2020 quarter earnings are unlikely to bring forth any big reveal on asset quality, margins or loan growth for lenders. While the moratorium option will ensure nearly invariant asset quality, loan disbursements are likely to be muted, it said in a result expectation report. Analysts at ICICI Securities, for instance, expect private banks to report a divergence in performance with adequate contingent provisioning, low moratoriums, and secured retail loans reporting steady operating performance. - Business Standard
🍒 ‘Covid-19 a key trigger for digitally savvy urban Indians to buy term insurance’ : Max Life Insurance Company will, in the next couple of months, come up with a “refined” term insurance product as it rides on increased preference for term insurance among customers in these Covid-19 times, said a top official. Term insurance is now the most preferred life insurance category during the Covid-19 pandemic and the focus of Max Life will be on product categories that are most relevant for customers, Prashant Tripathy, Managing Director and CEO, told BusinessLine. Also on the anvil is a corona rider (filed with the regulator) that can be used with various products in the company’s portfolio. Already, Max Life has two term products in its portfolio. (Riders are additional benefits added to policy that require an additional premium payment.) - Business Line
🍒 L&T Finance Holdings Q1 net profit down at ₹148 crore on higher provisions : L&T Finance Holdings reported a 73 per cent drop in consolidated net profit for the first quarter of the fiscal on the back of higher provisions. For the quarter ended June 30, it posted a net profit of ₹148 crore against ₹549 crore a year ago.“Adjusted for incremental provisions, the profit after tax for the first quarter stood at ₹580 crore,” it said in a statement on Thursday, adding that profitability for the quarter was largely impacted due to interest cost on enhanced liquidity, lower fee income and, most importantly, incremental provisions taken to strengthen the balance sheet against the after effect of the pandemic. “Incremental provisions of ₹577 crore in the first quarter of the fiscal to strengthen balance sheet. Credit cost in the first quarter is shown at ₹896 crore versus ₹595 crore a year ago,” it said, adding that the Covid-19 provision was ₹277 crore in the first quarter this fiscal. - Business Line
🍒 IndiaFirst Life Insurance upbeat on revival in sales : Private sector IndiaFirst Life Insurance Company is confident of a revival in sales and is working out new ways to reach out to customers digitally in the wake of the pandemic.. “Things are limping back to normalcy and unless there is a big second wave of Covid, we will see this continue as a trend. I don’t expect a dramatic improvement,” said Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance, adding that people are more keen on buying insurance due to worries about the pandemic. - Business Line
🍒 Point-of-sale terminals yet to fire despite repeated nudges by RBI : Imagine walking into a store near you and getting cash using your debit card on the ubiquitous point-of-sale (PoS) terminal. The idea behind the Reserve Bank of India’s (RBI’s) August 2009 initiative was to reduce the reliance on automated teller machines (ATMs) for small-ticket cashouts. This also signalled that cash will continue to linger despite digital modes of payments making strides. Despite repeated central bank reminders, cash-out at PoS has not fired.In FY09, we had 470,237 PoS terminals and 44,857 ATMs; in FY20, it reads 5.13 million and 234,357, respectively. The share of private banks in the deployed PoS terminals is 69 per cent with state-run banks at 27 per cent. The top deployers are RBL Bank with a 25 per cent market share followed by HDFC Bank (17 per cent) and State Bank of India (13 per cent). And to that extent, it’s the commercially savvy private banks which have the lion’s share of deployments. This appears to suggest that the scheme needs a big tweak. Think about it in another way: As of FY20, there were 828.56 million debit cards and only 57.74 million credit cards. The whole idea of increasing the usage of debit cards stands turned on its head — cashout PoS is a critical part of the direct benefits transfer (DBT). - Business Line
🍒 Yes Bank’s ₹15,000 crore FPO sees 53% subscription on second day : The ₹15,000 crore follow-on public offer (FPO) of Yes Bank was subscribed 53% on the second day of the public offer. The portion set aside for qualified institutional buyers was subscribed 1.44 times and that of non-institutional investors was subscribed 11%, while the subscriptions for the reserved portion of retail investors and employees stood at 21% and 12%, respectively. On the first day of the offering, on Wednesday, the FPO was subscribed 24%. The FPO, which will close on Friday, has a price band of ₹12-13 per equity share. On Tuesday, the lender informed stock exchanges that it had allotted 3.41 billion shares worth ₹4,098 crore to anchor investors a day before its follow-on public offering. The shares were allocated to the anchor investors at ₹12 per share. - Live Mint
🍒 Indian banks are in for a ₹20-trillion hole : Unlike many central bank governors who have tried hard to stay tight-lipped during the pandemic, Shaktikanta Das, the governor of the Reserve Bank of India (RBI), did not beat around the bush in his latest speech. At a banking conclave last weekend, he said: “The economic impact of the pandemic… may result in higher non-performing assets (NPAs) and capital erosion of banks. A recapitalization plan for public sector banks (PSBs) and private banks has, therefore, become necessary." If one-twentieth of the loans which are likely to be under a moratorium as of 31 August are defaulted on, the overall quantum of bad loans in the Indian banking system would be close to ₹12 trillion. If one-fifth of them default once the moratorium is lifted, the quantum of bad loans would touch a dizzying ₹20 trillion, more than double the current level. These are extremely conservative estimates, of course. Not surprisingly, former RBI governor Raghuram Rajan said recently: “The levels of NPA will be unprecedented six months from now." With increased defaults, banks will need to be recapitalized, that is, more money will have to be invested in them to keep them going. In fact, there is already enough evidence of increased pressure in the banking system in the days ahead and of the impending storm. - Live Mint
🍒 Capital infusion in 3 state-owned insurers 'credit positive', says Moody's : Moody's Investors Service said on July 16 that the Rs 12,450-crore capital injection in three state-run insurance companies is 'credit positive' as their capital had been significantly depleted over the last few years. Last week, the Union Cabinet had decided to put on hold the merger of National Insurance, The Oriental Insurance and United India Insurance and approved a Rs 12,450 crore capital infusion into these three general insurers. "The capital infusion is credit positive for the insurers, which are among the largest non-life companies in India's insurance market, because their capital has been significantly depleted by several loss-making underwriting years and significant top-line growth," Moody's said in a statement. - Moneycontrol.com
🍒 Global debt hits record high of 331% of GDP in first quarter: IIF : Global debt surged to a record $258 trillion in the first quarter of 2020 as economies around the world shut down to contain the coronavirus pandemic, and debt levels are continuing to rise, the Institute for International Finance said on Thursday in a report. The IIF, which represents global banks and financial institutions, said the first-quarter debt-to-GDP ratio jumped by over 10 percentage points, the largest quarterly surge on record, to reach a record 331 percent. - Moneycontrol.com
🍒 SEBI slaps Rs 5 lakh on Edelweiss Financial Services' compliance officer : Markets regulator Sebi on Thursday imposed a penalty of Rs 5 lakh on Edelweiss Financial Services' compliance officer B Renganathan for failing to close the trading window during the existence of the unpublished price-sensitive information. Sebi, upon receipt of the examination report from the National Stock Exchange (NSE), conducted investigation in the dealings in the scrip of Edelweiss Financial Services Ltd (EFSL) to examine the possible violations of the PIT (Prohibition of Insider Trading) Regulations for the period between January 2017 and April 2017. Renganathan was the compliance officer and company secretary of EFSL during the investigation period, according to the Sebi order. - Moneycontrol.com
🍒 Gold prices steady at Rs 49,267 per 10 gram, silver slips Rs 110 per kg : Gold prices were steady at Rs 49,267 per 10 gram in the Mumbai bullion market on rupee depreciation versus the dollar and lacklustre global cues. The precious metal continues to trade over $1,800 per troy ounce due to ongoing concerns over rising coronavirus cases, while mounting tensions between US and China kept the risk premium high and countered optimism over-promising early results on a potential COVID-19 vaccine. The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,950, Rs 45,129 and Rs 49,267 plus 3 percent GST. Silver prices fell Rs 110 to Rs 52,085 per kg from its closing on July 15.
🍒 Rupee slips 3 paise to 75.18 against US dollar : The rupee settled 3 paise lower at 75.18 against the US dollar on Thursday, tracking a strengthening American currency amid worries over mounting Covid-19 cases. At the interbank forex market, the rupee opened at 75.23 and swung between a high of 75.15 and low of 75.29 against the US dollar. It finally settled at 75.18, registering a loss of 3 paise over its previous close. The rupee had ended at 75.15 against the US dollar on Wednesday.
🍒 Sensex rallies 420 points; Infosys soars 10 per cent : Equity benchmark Sensex rallied 420 points on Thursday, led by stellar gains in Infosys, even as global markets faced selling pressure amid spiking coronavirus cases. After a highly volatile session, the 30-share BSE Sensex settled 419.87 points, or 1.16 per cent, higher at 36,471.68.Similarly, the NSE Nifty surged 121.75 points, or 1.15 per cent, to 10,739.95.Infosys rallied around 10 per cent after the IT major posted a stronger-than-expected 12.4 per cent rise in the first quarter consolidated net profit to Rs 4,272 crore, helped by large deals, and said its FY21 revenue is likely to grow by up to 2 per cent.M&M, Nestle India, IndusInd Bank, Kotak Bank, HCL Tech and Axis Bank were the other gainers.On the other hand, Tech Mahindra, ITC, NPTC, PowerGrid, Titan and ONGC finished with losses.
🍒 Shares of Central Bank of India in Stock Market : 67% of moneycontrol users recommend buying Central Bank of India Shares. In BSE, Shares closed at Rs.16.10 against Prev Close Rs.16.35. In NSE, shares closed at Rs.16.20 against Prev Close Rs.16.35.
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