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☕ 01.06.2023 : Today's Banking / Financial News at a Glance 

🍒     Bank boards should ensure business models, strategy and operations are effective: RBI Deputy Governor Jain :Bank boards must ensure that the business model, strategy, and operations are sustainable and create long-term value for all stakeholders, according to RBI Deputy Governor M.K. Jain. “Effective risk management, governance, and compliance practices are essential to safeguard the bank’s reputation, financial stability, and long-term viability.“...the board must remain vigilant, adaptive, and continuously assess the bank’s performance, risks, and opportunities, and take timely and informed decisions,” Jain said in a recent speech delivered at the conference of directors of banks.The Deputy Governor reiterated that the role of the board of directors in ensuring sustainable growth and stability of the banking sector cannot be overstated. - Business Line

🍒     Government appoints Ashwani Kumar as MD of UCO Bank : The government on Wednesday appointed Ashwani Kumar as managing director of UCO Bank in place of Soma Sankara Prasad whose terms comes to an end. Kumar is currently an executive director of Indian Bank and prior to this, he served as Chief General Manager of Punjab National Bank. The central government appoints Ashwani Kumar as managing director and chief executive officer in UCO Bank for a period of three years, the Finance Ministry said in a notification. The appointment comes into effect from the date of assumption of office on or after June 1, 2023 or until further orders, it said. - economic times

🍒     Indian banks report higher number of frauds, total amount declines : Indian banks reported a total of 13,530 frauds in FY23, sharply higher than 9,097 reported in FY22, according to the Reserve Bank of India’s annual report. In value terms, however, the amount involved in frauds reduced to Rs 30,252 crore from Rs 59,819 crore in the previous fiscal. “An assessment of bank group-wise fraud cases over the past three years indicates that while private sector banks reported maximum number of frauds, public sector banks continued to contribute the maximum to the fraud amount during 2022-23,” the report said. - Financial Express

🍒     RBI's 250 bps rate hike helped ease inflation by 90 bps : RBI seems to have done well in managing inflation at a time 52 per cent of the recent inflation is due to supply side factors on which the central bank has little control. Its 250 bps hike in repo rate between May 2022 and February 2023 helped ease inflation by 90 basis points.  Even as future inflation trajectory has upside risks due to supply side factors as weak monsoons on account of El Nino factors could impact food production and supplies which in turn could hit food inflation. But the central bank forecast easing of inflation at 5.2 for 2023-24 on account of its monetary measures that help manage demand side factors. Inflation is estimated to have eased by more than 50 bps on account of the 250 basis points hike in repo rates as compared to a rise in inflation of about 90 bps if the repo rate was left unchanged at 4 per cent, the central bank staff research shows. - economic times

🍒     Bank loans to most sectors rise in April, industry demand muted : Bank lending continued to rise in April as credit demand picked up across sectors barring industry. Non-food credit rose 16.1% in April from 11.4% a year ago, according to the latest data on sectoral deployment of bank credit released by the Reserve Bank of India on Wednesday. Credit growth to the services sector accelerated to 21.6% during the month from 11.2% a year ago primarily driven by higher lending to non-banking financial companies which rose 29% year-on-year and trade at 18%. - economic times

🍒     12 PSU banks come under National SC Commission's lens : Twelve public sector banks have come under the National Commission for Scheduled Castes' scanner for non-implementation of central schemes, low loan disbursal and not filling vacant posts reserved for persons belonging to SC category. NCSC has decided to review banks' performance in June to highlight the issues that directly impact economic empowerment of the socially backward SC communities. It has found that banks lack a mechanism to collate and report data on the implementation of central schemes and job vacancies.- economic times

🍒     FDI plans by China, Pakistan, others in limbo as India keeps permission pending : A significant number of foreign direct investment (FDI) proposals are pending with the government for approval, reports released on Tuesday showed. News agency PTI cited official sources to report that about 40-50 (FDI)proposals from countries sharing land border with India are pending under the provisions of Press Note 3. It is worth mentioning here that under Press Note 3, prior approval mandatory is compulsory for foreign investments from China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan — countries that share land border with India. - economic times

🍒     Bank lending remains buoyant in April too : Bank lending continued to rise in April ago as lending across sectors except industry picked up. On a year-on-year (y-o-y) basis, non-food bank credit rose 16.1 per cent in April 2023 as compared with 11.4 per cent a year ago according to latest data on sectoral deployment of bank credit released by the Reserve Bank of India on Wednesday. Credit growth to the services sector accelerated to 21.6 per cent (y-o-y) in April 2023 from 11.2 per cent a year ago mainly due to higher lending to ‘Non-Banking Financial Companies (NBFCs)’ and ‘trade’ which rose 29 percent and 18 percent respectively. - economic times

🍒     Counterfeit notes of ₹500 denomination rose 14% in FY23: RBI report : Counterfeit currency notes of ₹500 denomination detected in the banking system rose by 14.4 per cent in FY23, while those of ₹20 denomination saw an increase of 8.4 per cent the Reserve Bank of India said in its annual report for 2022-23. Of the total fake currency notes detected, 4.6 per cent were detected at the RBI and 95.4 per cent at other banks. Counterfeit notes of ₹10 denomination declined by 11.6 per cent, ₹100 declined by 14.7 per cent and ₹2,000 by 27.9 per cent. - Business Line

🍒     Karnataka Vikas Grameena Bank opens Retail Loan Processing Cell : Karnataka Vikas Grameena Bank (KVGB) opened a Retail Loan Processing Cell (RLPC) at Dharwad on Wednesday. Inaugurating the cell, Shreekant M Bhandiwad, Chairman of the bank, said the RLPC will cater to the needs of the city branches of Dharwad region in processing and sanctioning retail loan products such as housing loans, mortgage loans, vehicle loans and education loans. The branches collect the required documents and send them to this hub for processing and for speedy sanctions. RLPC will accelerate appraisal, sanction and disbursal of retail loans, and will reduce response time drastically. He said the bank plans to set up more number of RLPCs across its area of operation in the days to come. - Business Line

🍒     Non-food bank credit registers robust 16.1% y-o-y growth in April 2023 : Non-food bank credit registered a robust growth of 16.1 per cent in April 2023 as compared with 11.4 per cent a year ago on the back of strong growth in credit to the services sector, personal segment, and agriculture and allied activities, per RBI data. Credit growth to services sector accelerated to 21.6 per cent (y-o-y) in April 2023 from 11.2 per cent a year ago, primarily due to the improved credit offtake to ‘Non-Banking Financial Companies (NBFCs)’ and ‘trade’, according to data on sectoral deployment of bank credit for the month of April 2023.Personal loans growth registered a growth of 19.4 per cent (y-o-y) in April 2023 vis-a-vis 14.4 per cent a year ago, mainly driven by ‘housing loans’ and ‘vehicle loans’. - Business lIne

🍒     e-Rupee yet to take off in a big way : After five months since the launch of central bank digital currency – retail (CBDC – retail) popularly referred to as e-Rupee retail, the retail digital currency in circulation stood at a meagre ₹5.7 crore, according to the Reserve Bank of India’s annual report for FY23. The total e-Rupee wholesale in circulation stood at ₹10.69 crore as on March 31, 2023. Together, the digital currencies account for ₹16.39 crore, which is not even 0.0001 per cent of the total bank notes in circulation. - Business Line

🍒     Credit Suisse aborts China bank plan to avoid regulatory conflict under UBS : Credit Suisse has scrapped plans to set up a locally incorporated bank in China to avoid a potential regulatory conflict arising as a result of its merger with UBS, said two sources with direct knowledge of the matter. Credit Suisse had been planning over the last few years to set up a wholly owned local bank in China that would have boosted its presence in the country by allowing it to set up its own branch network to draw deposits and expand wealth management business onshore. - Financial Express

🍒     IIT Madras Research Park, RBI’s innovation centre working on voice-banking technologies : IIT Madras Research Park (IITMRP) and IIT Madras Incubation Cell (IITMIC) have joined hands with Reserve Bank Innovation Hub (RBIH) to work on creating voice-driven banking solutions. The objective is to address the language barriers, a key challenge in financial inclusion for millions of Indians. The voice-based banking solution aims at performing basic banking transactions through voice-commands in the Indian languages of Hindi, Tamil and Telugu to start with, in addition to English. The innovation will assist people who are illiterate and visually impaired, in their banking services and help the underbanked population in overcoming language barriers during their banking activities.   - finacnial express

🍒     YES Bank brand makeover: Spending on advertising activities to surge 30% : With a refreshed brand identity, private sector lender YES Bank will increase spending on advertising activities by 30 per cent in the current financial year (FY24) to enhance visibility. ipun Kaushal, chief marketing officer (CMO), said the bank was resorting to “tactical” spending in advertising for the last two years during festive seasons and campaigns. Its spending would be 30 per cent higher in FY24abhi over the previous year. He, however, did not share details on expenditure in FY23 and plans in FY24.  The lender was focused on getting its house in order after it was bailed out by peers led by State Bank of India (SBI) in 2020.- Business Standard

🍒     Sensex, Nifty trip over profit taking in banking, energy shares; snap 4-day winning run : Snapping its four-day rally, the 30-share BSE Sensex fell 346.89 points or 0.55 per cent to settle at 62,622.24. During the day, it tumbled 568.11 points or 0.90 per cent to 62,401.02.  The NSE Nifty declined 99.45 points or 0.53 per cent to end at 18,534.40. In the four-day rally to Tuesday, Sensex advanced by 1,195 points or 2 per cent while Nifty rose by 348 points or 2.26 per cent.  - Business Line

🍒     Rupee falls 7 paise to close at 82.74 against US dollar : Falling for the third straight session, the rupee declined by 7 paise to 82.74 (provisional) against the US dollar on Wednesday, as intense selling pressure in domestic equities and a strong greenback overseas dented the sentiment. At the interbank foreign exchange, the domestic unit opened weak at 82.71 against the dollar. The currency touched an intraday low of 82.75 and a high of 82.64. The unit finally settled at 82.74 (provisional) against the dollar, registering a fall of 7 paise over its previous close. - Business Line.

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