Banking current affairs may

22 may

🍒   RBI Governor to address PSU banks' board members on governance and ethics today : Reserve Bank Governor Shaktikanta Das is scheduled to meet the board of directors of all public sector banks on Monday to discuss issues related to governance and ethics. The one-day meeting organised by the Department of Supervision of the Reserve Bank of India is to be held tomorrow in Delhi, sources said. Das will address the directors — both whole time and independent — on issues related to governance, ethics, and the role of the boards in assurance functionalities of the banks, besides highlighting the supervisory expectations. Besides the governor, deputy governors, executive directors from its Department of Regulation as well as Supervision will be addressing the meeting. The one-day event is designed to be an interactive one where directors, including the bank chairman, and nominee directors both from the central bank and the government, will be invited to interact with the entire RBI top brass. -Moneycontrol.

🍒   SBI slow in procurement from GeM portal; lags behind smaller counterparts in 2022-23 : India's largest lender SBI was quite slow in procuring goods and services from government-owned GeM portal in 2022-23 and lagged behind smaller counterparts, including Canara Bank and Punjab National Bank, according to the government data. Canara Bank emerged as the largest buyer among the state-owned lenders in 2022-23, making total purchases of Rs 592.82 crore from the portal, the data showed. Punjab National Bank (Rs 164.57 crore) was the second largest, followed by Indian Overseas Bank (Rs 159.82 crore), State Bank of India (Rs 158.22 crore), Indian Bank (Rs 111.59 crore), Bank of India (Rs 63.81 crore), Bank of Baroda (Rs 48.63 crore), Union Bank of India (Rs 37.03 crore), Bank of Maharashtra (Rs 10.26 crore), Punjab and Sind Bank (Rs 9.98 crore), UCO Bank (Rs 5.30 crore) and Central Bank of India (Rs 4.54 crore) in 2022-23. The SBI did not respond to an email query on the subject. - Economic Times

🍒   Public sector banks' total profit crosses Rs 1 lakh crore-mark in FY23 : Public sector banks' cumulative profit crossed the Rs 1 lakh crore-mark in the financial year ended March 2023, with market leader State Bank of India (SBI) accounting for nearly half of the total earnings. From posting a total net loss of Rs 85,390 crore in 2017-18, the Public Sector Banks (PSBs) have come a long way as their profit touched Rs 1,04,649 crore in 2022-23, according to an analysis of their financial results. These 12 PSBs witnessed 57 per cent increase in total profit compared to Rs 66,539.98 crore earned in 2021-22. - eonomic times.

🍒   Rush to change Rs 2,000 notes spills on to many routes : Some, in a Pavlovian response, rushed to buy gold; others spent the weekend pondering over the task at hand. Those who panicked never showed it, and almost everyone agreed that a visit to the bank was a bad idea. These are people with undisclosed ₹2,000 bills - the cash they have to wash and hide in the next four months.In Mumbai's gold bazaar, some jewellers were charging a premium on the precious metal for accepting the currency note that will soon go out of circulation. On Saturday afternoon, gold was sold in the unofficial market for around ₹67,000 (per 10 grams) when paid for with ₹2,000 notes, compared with the official rate of ₹63,800 (including GST). "It's a knee-jerk reaction. The premium has gone up since Friday evening when the announcement came, but I think it will come down in the next few days. People would try out other ways. There's time," said a source in the market. - economic times

🍒   Federal Bank eyes up to $486 million fundraising : Federal Bank Ltd., the Indian bank backed by the International Finance Corp., plans to raise as much as 40 billion rupees ($486 million) in the next few months to support its expansion. The fundraising could be via debt or equity, or a combination of the two, with the final structure still under consideration, the bank’s Chief Executive Officer Shyam Srinivasan said in an interview. The capital will fund growth as Federal Bank pushes further into retail banking with plans to open about 100 branches this year, and seeks to buy a microfinance company, he added. - economic times

🍒   FPIs bring in Rs 30,945 cr in May on strong economic fundamentals : Foreign investors have put in Rs 30,945 crore in the Indian equities in May so far, driven by strong macroeconomic fundamentals, prospect of reducing interest rates, positive earnings outlook and falling valuations of stocks. With this, net inflows by Foreign Portfolio Investors (FPIs) reached Rs 16,365 crore in 2023 so far, data available with the depositories showed. Going forward, FPI investment in India is expected to continue since the prospects for the Indian economy and corporate earnings growth appear bright now, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. - economic times

🍒   Federal Bank eyes up to $486 million fundraising : Federal Bank Ltd plans to raise as much as 40 billion rupees ($486 million) in the next few months to support its expansion. The fundraising could be via debt or equity, or a combination of the two, with the final structure still under consideration, the bank’s Chief Executive Officer Shyam Srinivasan said in an interview. The capital will fund growth as Federal Bank pushes further into retail banking with plans to open about 100 branches this year, and seeks to buy a microfinance company, he added. The bank expects to grow its balance sheet by 18% to 20% this year, consistent with gains in previous years, Srinivasan said, adding he intends to focus on unsecured retail and commercial loans. The planned fundraising, which has gotten approval from shareholders, may be at one go or in several tranches, he said. - financial express.

🍒   ‘Small-ticket loans could give payments bank model a boost’ : Payments banks touch the lives of more than 100 million consumers each month, and enabling such players to offer small-ticket micro loans from their own balance sheets could significantly boost the viability of the model and enable more financial inclusion, Airtel Payments Bank managing director and chief executive officer Anubrata Biswas told fe on Friday. “Today, if the payment bank industry is touching more than 100 million views, if we as an industry are allowed to offer small-ticket micro loans, then imagine the impact of financial inclusion which we will suddenly have where we bring millions of people into formal credit…,” the MD said, adding that such banks could be “much more prudent and pragmatic” in underwriting loans as they have a better last-mile connect with customers. - financial express

🍒   Kotak Bank to grow affordable housing portfolio : Kotak Mahindra Bank is focusing on increasing its affordable housing portfolio, Ambuj Chandna, president – consumer assets, said. “We believe affordable housing represents a segment of homebuyers that are under-served by the banking ecosystem. We would like to develop capabilities to lend in that segment,” he said. “We started that business a couple of years of back and we are making good progress. We believe we will continue to grow largely because of the fact that historically we have not been tapping it too well.” - financial express

🍒   Deposit rates have not peaked yet: Bankers : Even as the Reserve Bank of India has paused its rate-hiking cycle in April, bankers say there is still room for deposit rates to go higher. “We have to take care of depositor interest also. Keeping that in mind, in some of the buckets of term deposits, we have raised the interest rate in the last six months or so, and I think that will be our strategy going forward also,” State Bank of India (SBI) chairman Dinesh Kumar Khara said in a post-earnings call on Thursday. Banks may further hike interest rates on fixed deposits to meet the demand for credit, at a time when systemic liquidity has considerably eased. However, the quantum of the hike is expected to be minimal as the repo rate hike cycle is near its peak, bankers said. - financial express

🍒   No ID proof required for Rs2,000 note exchange : No identity proof will be demanded by banks for exchange of ₹2000 bank notes and there is no cap on the number of times one could get this done in a day, an official informed about the procedure banks will follow said. Banks will start the facility of exchange of ₹2000 notes from Tuesday as mandated by the RBI last week. The person quoted above said citing an instruction issued by a state-owned bank to its local head offices that no identity proof is required to be submitted by the tenderer at the time of the exchange. "No form or slip of any nature has been prescribed by the RBI or banks for exchange of ₹2000 notes, which is one time, upto ₹20,000... There is no restriction on the tenderer on the number of times he can stand in the queue," said the person, explaining that the limit of exchanging ten bank notes at a time was meant to manage crowds at banks. No requisitions slips are required and the bank's instructions are clear, the person said. - Live Mint

🍒   Withdrawal of ₹2,000 notes: Banks plans to step up vigil on Jan Dhan Yojana accounts : Banks will be closely monitoring Jan Dhan Yojana (JDY)/ Basic Saving Bank Deposit (BSBD) accounts for any unusual deposits during the entire period -- May 23, 2023, to September-end 2023 -- when ₹2,000 banknotes will be withdrawn from circulation.  The vigil on JDY/BSBD accounts is in view of the possibility that these account holders could be used to receive and transfer fraudulent funds. During the 2016 demonetisation of ₹500 and ₹1,000 denomination bank notes, a significant amount of these SBNs (specified bank notes) flowed into the following special types of accounts: Basic Saving Bank Deposit Account (BSBDA); PMJDY Accounts; Kisan Credit Card (KCC); dormant or inoperative accounts; co-operative banks’ accounts with Scheduled Commercial Banks; bullion trader/jewellers’ accounts; and loan accounts, according to a 2017 RBI report.- financial express

🍒   KVG Bank achieves impressive growth in FY23, introduces innovative recovery strategies : Karnataka Vikas Grameena Bank (KVGB) registered a net profit of ₹40.25 crore in 2022-23, against a net profit of ₹31.9 crore in 2021-22, recording a growth of 26.18 per cent. Shreekant M Bhandiwad, Chairman of KVGB, said the bank has strengthened its balance sheet by making suitable provisions and by giving importance for recovery. Stating that the bank has initiated various innovative recovery strategies to curtail fresh addition of NPAs (non-performing assets) and reduce the existing NPAs during 2022-23, he said the bank’s gross NPAs came down from 9.37 per cent in 2021-22 to 6.96 per cent in 2022-23. Net NPAs came down from 5.90 per cent in 2021-22 to 4.64 per cent in 2022-23, with an outstanding cash recovery of ₹1,240.81 crore during 2022-23. - Buiness Line

🍒   RBI quizzes banks on business models  : The Reserve Bank of India has undertaken an exercise to understand the business models of banks in its ongoing annual inspection as the banking sector has not seen much disruption in the loan growth trends even with the increase in interest rates. Every year to make the routine annual inspection of banks interesting, the RBI picks up a certain aspect and quizzes banks. For FY23, the theme is the sustainability of business models. It is learnt from highly placed sources that the banking regulator is closely understanding and questioning banks about their business models in the ongoing annual inspection. This is particularly so for the top ten banks of the country. - Business Line

🍒   BankEdge Academy aims to place 30,000 students in 3 years : BankEdge Academy, a specialised banking and finance training company, targets to find placement for 30,000 graduates in three years on back of huge demand in the banking and allied financial sectors. Over the last nine years, the academy has effectively trained and placed over 30,000 young graduates in entry-level positions in the Retail Branch Banking and backend operations divisions of private sector banks and other financial institutions. The company has partnered with various NBFCs to provide student loans with 0 per cent interest rates and with extended repayment periods, ensuring convenient fee payment options for students. - Business Line

🍒   Mcap of 6 of top 10 valued firms erodes by ₹70,486.95 crore; Reliance, TCS biggest laggards : Six of the 10 most valued firms faced a combined erosion of ₹70,486.95 crore in their market valuation last week, with Reliance Industries and Tata Consultancy Services (TCS) taking the biggest hit following a weak trend in equities. Reliance Industries continued to rule the top 10 most valued firms chart, followed by TCS, HDFC Bank, ICICI Bank, Hindustan Unilever, Infosys, ITC, State Bank of India, HDFC and Bharti Airtel. While Reliance Industries, TCS, HDFC Bank, ITC, State Bank of India and HDFC were the laggards from the top 10 pack, ICICI Bank, Hindustan Unilever, Infosys and Bharti Airtel were the gainers. Last week, the BSE Sensex declined 298.22 points or 0.48 per cent. - Busines Line

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