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☕ 02.06.2023 : Today's Banking / Financial News at a Glance 

🍒   CRISIL upgrades Central Bank rating on improvement in profitability : Rating agency CRISIL has upgraded the rating for Central Bank of India’s long term debt from “A+” to “AA-”, citing sustained improvement in profitability and improved asset quality. The Reserve Bank of India (RBI) took the state-owned Central Bank out of its prompt corrective action (PCA) in September 2022. A CRISIL statement said Central Bank has been profitable for eight consecutive quarters (since Q1 FY22). The lender’s profit after tax (PAT) increased to Rs 1,582 crore in FY23, from Rs 1,045 crore in FY22. Profitability should sustain due to lower credit cost, reduced incremental stress and focus remain on maintaining asset quality.  Central Bank’s slippages in FY23 were 2.4 per cent compared to 3.0 per cent in fiscal 2022. Reported gross non-performing assets (NPA) fell sharply to 8.4 per cent as on March 31, 2023, from 14.8 per cent a year earlier, supported mainly by write-offs and partly by recoveries. Net NPAs also declined to 1.8 per cent from 3.9 per cent a year ago. As on March 31, 2023, restructured advances accounted for 3.1 per cent of the portfolio (4.6 per cent a year earlier). - Business Standard

🍒   Canara Bank aims to improve profitability further with focus on loan growth : Canara Bank on Thursday said the bank aims to improve bottomline further with balanced thrust on retail, MSME and corporate advances, coupled with increased adoption of digitalization for efficiency improvement. The bank recorded an 87 per cent jump in net profit to Rs 10,604 crore in FY 2022-23 with operating profit growing by 20.04 per cent to Rs 27,716 crore compared to preceding financial year.The bank expects a substantial improvement in low-cost deposits base in FY 2023-24 by increasing customer base, rolling out innovative and customised products and by leveraging technology to provide best in the services to valued customers, Canara Bank managing director K Satyanarayana Raju said in his address to shareholders. - Business Standard

🍒   UPI trades at record high in May, breach 900 crore monthly transactions : Transactions undertaken on the UPI (Unified Payments Interface) network, touched a record high of ₹14.89 lakh crore in May, also crossing the milestone of 900 crore transactions per month. UPI transactions were higher by 6 per cent on month, both in terms of value and volumes. A total of 941 crore transactions were processed during the month, according to data by the National Payments Corporation of India (NPCI). The number of transactions was higher by 58 per cent on year, and the value of transactions was 43 per cent higher compared with May 2022. - Business Line

🍒   RBI, IIT Madras to launch voice-banking solution : Reserve Bank Innovation Hub (RBIH) has joined hands with IIT Madras Research Park (IITMRP) and IIT Madras Incubation Cell (IITMIC) to introduce voice-banking solutions to eliminate language barriers across the country, a report said. The initiative of RBI and IIT Madras aims at conducting basic banking transactions through voice-controls in Hindi, Tamil, Telugu and English, in the initial stage. Voice-banking will assist the illiterate and the visually impaired in their banking needs. State Bank of India (SBI), Axis Bank, Kotak Mahindra and IDFC First conducted a codefest on voice-banking called ‘Vaulter Voice’ at the IIT Madras Research Park. Young professionals, start-ups and students took part in the codefest to showcase the potential of voice-banking services. - Business Line.

🍒   PNB reduces FD interest rate on this tenure : Punjab National Bank (PNB) in a surprising move has reduced fixed deposit interest rate on single tenure for amounts below Rs 2 crore, according to the PNB website. The new rates are effective from June 1, 2023. Last month, PNB had increased interest rates of select fixed deposits (FDs) on certain tenures and had reduced rates on certain tenures. For general citizens, PNB offers FD interest rates between 3.05% to 7.25% for tenure ranging between 7 days to 10 years. The highest interest rate of 7.25% is offered on tenure of 444 days. For deposits maturing in 1 year, the bank has cut the interest rate by 5 bps from 6.80% to 6.75% for regular citizens. Last month, the bank decreased the interest rate on FDs maturing in 666 days to 7.05% from 7.25%. - economic times

🍒   PNB increases these loan interest rates by 10 bps: : Punjab National Bank (PNB) has increased its marginal cost of lending rates (MCLR)by 10 basis points (bps) on all tenures. The new interest rates are effective from June 1, 2023. According to the PNB website, “The MCLR should be revised monthly by considering some factors including the repo rate and other borrowing rates. Specifically the repo rate and other borrowing rates that were not explicitly considered under the base rate system.” - economic times 

🍒   Govt interviews candidates for RBI deputy governor position : The Union government on June 1 interviewed candidates for the post of Reserve Bank of India (RBI) deputy governor, who will replace M K Jain at the central bank. Jain's term is scheduled to end on June 22, 2023.The candidates who were interviewed included Srinivasan Varadarajan, Union Bank chairman; AS Rajeev, Bank of Maharashtra's managing director and CEO; Soma Sankara Prasad, MD and CEO of UCO Bank; S L Jain, MD and CEO of Indian Bank, and State Bank of India's Managing Director Swaminathan J, according to people in the know. A panel consisting of RBI Governor Shaktikanta Das, cabinet secretary, financial services secretary and the chief economic advisor interviewed the candidates. - moneycontrol.

🍒   Watch out for rising risk appetites among Indian banks, says Fitch : The rapid rise in loans and high exposure to certain asset classes may affect the risk profiles of Indian banks as it indicates a greater risk appetite, Fitch Ratings said in a note on Thursday. Not only banks, but even NBFCs have also shown a rising risk appetite.  Bank loans rose at 14.6 per cent in FY23 while credit growth in the last fiscal was the highest since FY12, when credit rose 17 per cent. This rise in risk appetite shows the importance of assessing individual banks’ ability to withstand both expected and unexpected balance-sheet stress as part of analysing their intrinsic creditworthiness, the rating agency said. - economic times

🍒   Gehlaut Trust, promoter group members cut stake in Indiabulls Housing Finance to 7.55% : The Sameer Gehlaut IBH Trust and promoter group members Sameer Gehlaut and lnuus lnfrastructure Private Ltd reduced their stake in Indiabulls Housing Finance Ltd (IHFL) to 7.55 per cent from 9.77 per cent, through sale of share on May 9-10.  The trust’s shareholding in IHFL declined to 1.52 per cent from 3.62 per cent, according to a regulatory filing. This shareholding is with respect to total share or voting capital, wherever applicable. Shareholding of Sameer Gehlaut and lnuus lnfrastructure Private Ltd declined to 6.03 per cent from 6.15 per cent, according to the filing.- Business Line

🍒   ₹2,000 banknote exchange: SC refuses urgent listing of plea challenging RBI decision : The Supreme Court on Thursday refused to list for urgent hearing a plea challenging the notifications enabling exchange of ₹2,000 denomination currency notes without any requisition slip and ID proof. A vacation bench of justices Sudhanshu Dhulia and K V Vishwanathan took note of the submissions for urgent hearing of lawyer Ashwini Updhyay, and said it will not be taking up such pleas during the summer vacation. “We are not taking up these kinds of cases during the summer vacation,” the bench said, adding the plea can be mentioned before a bench headed by the Chief Justice of India. - Business Line

🍒   NCSC to hold review meeting with 12 PSBs next week: Senior officials : The National Commission for Scheduled Castes will hold a review meeting next week with the twelve public sector banks that have come under its lens for non-implementation of central schemes, according to senior officials. The NCSC chief will chair the meeting and raise the issues of not filling vacant posts reserved for persons belonging to the SC category and difficulty for SCs in getting loans, a senior official said - Business Standard

🍒   Liquidity surplus crosses Rs 1.75 trillion-mark on higher govt spending : Liquidity surplus in the banking system zoomed past Rs 1.75 trillion on the last day of May on the back of higher government spending, latest data released by Reserve Bank of India showed. On Wednesday, the surplus liquidity in the banking system was around Rs 1.76 trillion, while it was approximately Rs 1.35 trillion on Tuesday. The surplus was over Rs 1 trillion in the past few days. “The improvement in liquidity conditions by May 31 is likely due to the pick-up in government expenditure, which is the usual pattern given that salary payments, etc. usually take place at month-end. Other factors that have helped ease liquidity pressures in May are reduction in currency leakage with currency in circulation falling by Rs 13,300 crore (May 26 over April 28),” said Gaura Sengupta, India economist, IDFC First Bank. - Business Standard

🍒   Google rolls out stricter loan app norms, players fear short-term disruptions : Digital lending players and fintech associations have cheered the new stricter norms rolled out by Google for applications on its Play Store, even as they fear a rise in their customer acquisition costs in the near term. Google has introduced a new policy for personal loans, wherein all players listed on its store will have to either furnish their lending licence as given by the RBI, or furnish details of their lending agreement if it is a third-party fintech in partnership with another lender. “The new Personal Loan Policy restricts digital lending apps from getting access to customers’ storage, contacts, location history, phone numbers, photographs or videos; thereby safeguarding the borrower’s privacy and promoting good financial practices,” said Mahesh Shukla, CEO and Founder of digital lender PayMe. “The move will create more a more level playing field for digital lenders who operate with transparency and fairness,” he added. - Business Line

🍒   Warbug Pincus investment to help Vistaar achieve AUM of Rs 5,000 crore: CEO : The $250-million investment by global PE Warburg Pincus in Vistaar will help the MSME-focussed NBFC grow to an AUM of Rs 5,000 crore in 18-24 months. As of March 2023, the AUM stood at Rs 3,150 crore. The total capital infusion, which concluded on Monday, includes contribution by newly appointed CEO Avijit Saha, who will hold around 1 per cent stake in the NBFC. Warbug Pincus holds around 95 per cent share. “The capital that we have got now will help us reach an AUM of Rs 5,000 crore. Our goal is to cross the Rs 5,000-crore mark in the next 18-24 months,” Saha told  - Business Line

🍒   Banks’ non-food credit rises to over Rs 138 trn : Scheduled commercial banks’ non-food credit grew 16.1% year-on-year (YoY) to Rs 138.36 trillion in April, sectoral credit data released by the Reserve Bank of India showed Wednesday. It is higher than 15.4% on-year growth registered in March.Credit to agriculture and allied activities rose 16.7% YoY to Rs 17.25 trillion while credit to industry segment rose 7% YoY to Rs 33.69 trillion. - Business Line

🍒   Suryoday SFB’s FY24 provision in line with RBI proposed model : Suryoday Small Finance Bank (SFB) will build 1%-1.5% of its total assets as contingency provisions during the current and next financial year to comply with expected credit loss (ECL) model of provisioning, MD & CEO R Baskar Babu told FE.“We are working on a sharpened model at this point in time. Irrespective of ECL coming in this year or in years to come, we are preparing ourselves to hold contingency provisions,” the MD said. “Starting this year, we will make 1%-1.5% of our assets…as contingency provisions and similar (contingency provisions) we will add next year, which as per our internal calculations will be much higher than what all will required through the ECL methodology,” he added. - financial express

🍒   Sensex and Nifty end lower in volatile trade as banking and metal stocks weigh : Falling for the second day in a row, the 30-share BSE Sensex declined 193.70 points or 0.31 per cent to settle at 62,428.54 even after a positive beginning. During the day, it fell 263.1 points or 0.42 per cent to 62,359.14. The NSE Nifty fell 46.65 points or 0.25 per cent to finish at 18,487.75.From the Sensex pack, Bharti Airtel fell 3.42 and Kotak Mahindra Bank declined 3.31 per cent. ICICI Bank, ITC, HDFC Bank, UltraTech Cement, HCL Technologies and Maruti were the other major laggards. Tata Motors, Hindustan Unilever, Asian Paints, Sun Pharma, Nestle, Tata Consultancy Services, Wipro, Bajaj Finance, Axis Bank and IndusInd Bank were among the gainers - Business Line

🍒   Rupee appreciates about 32 paise per Dollar : The Rupee appreciated sharply against the Dollar, recording its biggest single day gain in two months, on strong capital inflows even as the sentiment in the forex market was boosted by better-than-expected GDP growth data for FY23 and the likelihood of the US Fed eschewing a rate hike at its next meeting. The Indian unit, which opened stronger at 82.51, closed at 82.4050 per Dollar against the previous close of 82.7225, up about 32 paise. - Business Line

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