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☕ 08.06.2023 : Today's Banking / Financial News at a Glance 

🍒   Bank of Maharashtra raises Rs 1,000 crore via QIP, LIC picks up biggest chunk : State-run Bank of Maharashtra closed its Qualified Institutional Placement (QIP) issue through which it has raised Rs 1,000 crore. For the QIP, the board approved the allotment of 35.1 crore shares to institutional buyers at its meeting on June 6. The shares were allotted at an issue price of Rs 28.5 per equity share, which is a 4.94 percent discount to the floor price of Rs 29.94 per share that was set at the time of the QIP launch on June 1. The issue price is also at a 6.25 percent discount to the closing price of Bank of Maharashtra shares on Tuesday. - moneycontrol.

🍒   RBI panel recommends penalties for banks if they lose your property documents : The BP Kanungo committee, established by the Reserve Bank of India (RBI), has proposed that banks and lenders who provide home loans should compensate borrowers and pay a monetary fine if they lose the borrowers' property documents. Typically, banks and lenders request original property documents and retain possession of them until the loans are fully repaid. These recommendations were included in a committee report released on June 5th, which outlined various suggestions for enhancing customer service standards in regulated entities. In May 2022, the RBI formed a six-member committee, chaired by BP Kanungo, with the objective of examining and reviewing customer services in regulated entities to safeguard customer interests. - moneycontrol.

🍒   RBI committee proposes guidelines on gold loan recovery in case of borrower’s death : The Reserve Bank of India (RBI) may soon issue guidelines for gold loan companies on settling the outstanding debt in case of death of the borrower, communicating terms and conditions in local languages, process to refund surplus from the auction of gold and more. “We work with multiple lenders and adhere to the diverse policies they have in place. The recent report from the BP Kanungo committee on customer service standards is a commendable step toward establishing uniformity and clarity across the industry, ensuring a consistent policy that safeguards the interests of customers and the one that instils trust and confidence for all stakeholders involved," says a spokesperson from Rupeek, gold finance company. - moneycontrol.

🍒   RBI's gold reserve up over 40% in five years : The Reserve Bank of India’s gold reserves is up more than 40 percent since it resumed purchase of the yellow metal over five years ago, even as it seldom sells unlike other central banks. IT implies that gold has emerged as a strong hedge against inflation and also helped reduce dollar dependence to an extent. India's official gold reserves is up from 17.9 million troy ounce in December 2017 to 25.55 million troy ounce in April this year according to the latest RBI data. This roughly translates to 795 metric tonnes of gold. - economic times

🍒   HDFC Bank introduces Millennia Credit Card : HDFC Bank has introduced a new credit card — Millennia — offering cashback. The card comes with contactless technology allowing customers to ‘tap and pay’ via POS machine. The HDFC Millennia Credit card offers cashback and reward points on Amazon, Flipkart, and other e-commerce platforms. In addition, the card also offers 1 per cent cashback on offline purchases, smart EMI, and lounge access for free, among others. Millennia credit card can be used for Amazon, Flipkart, BookMyShow, Cult.fit, and Myntra, to earn 5 per cent cashback points. In every billing, a maximum reward of ₹1000 would be offered. - Business Line

🍒   HDFC Bank hikes these loan interest rates by up to 15 bps: EMIs to go up : HDFC Bank has increased the benchmark marginal cost of funds-based lending rates (MCLR) by up to 15 basis points. The new rates are effective from June 7, 2023, according to the HDFC Bank website. The bank’s overnight MCLR is raised by 15 bps to 8.10%The one-month MCLR of HDFC Bank has increased by 10 bps to 8.20%. The three-month MCLR is also at 8.50%, up 10 basis points from the previous 8.40%.  The six-month MCLR, however, only increased by a far more modest 5 bps from the prior 8.80% to 8.85%. However, MCLRs for tenures longer than one year remain unchanged. In May, HDFC Bank has raised Marginal Cost Based Lending Rate (MCLR) by up to 15 basis points (bps) on select tenors. - Economic Times

🍒   Yes Bank aims to expand margins by 100 bps in next 3 years - MD : Yes Bank sees scope to expand its net interest margin by 100 basis points over the next three years by raising more low-cost deposits and lending to higher-yield clients, its managing director and CEO told Reuters on Wednesday. The push to improve net interest margins (NIM), together with lower loan-loss provisions, is part of an effort to boost profitability at the lender, which was rescued by a consortium of state-owned entities and private banks in 2020 after a dramatic rise in toxic assets. - Economic Times

🍒   Axis Bank becomes the fifth Indian lender to cross Rs 3 trillion market-cap : Axis Bank Ltd became the fifth Indian lender to cross Rs 3 trillion market capitalisation after its shares hit a fresh record high. The stock gained for ten out of eleven sessions and rose nearly 7 percent during this period. The stock hit a record high of Rs 981.25 on BSE and rose as much as 1.2 percent intraday with its market cap hitting at Rs 3.01 trillion. At 12.30 pm, Axis Bank was trading at Rs 978 on BSE, up 1 percent from its previous close. Year to date, Axis Bank gained nearly 5 percent.Earlier, HDFC Bank Ltd, ICICI Bank Ltd, State Bank of India and Kotak Mahindra Bank have touched this milestone.- moneycontrol.

🍒   Jaiprakash Associates defaults on Rs 3,961 crore loans on May 31 : Crisis-hit Jaypee Group's flagship firm Jaiprakash Associates has defaulted on loans worth Rs 3,961 crore, including principal and interest amount. In a regulatory filing, Jaiprakash Associates Ltd (JAL) informed that the company on May 31 defaulted on repayments of a principal amount of Rs 1,600 crore and interest of Rs 2,361 crore. The loans pertained to various banks, and the nature of the obligation is fund-based working capital, non-fund-based working capital, term loans and FCCB (foreign currency convertible bonds). "The total borrowing (including interest) of the company is Rs 29,429 crore, repayable by 2037, against which only Rs 3,961 crore is overdue as on May 31, 2023," JAL said. - - moneycontrol.

🍒   PhonePe introduces account aggregator services : PhonePe has introduced Account Aggregator (AA) services following the receipt of Reserve Bank of India (RBI) Non-Banking Finance Companies (NBFC) licence, as per Inc42, Business Today. The move aims at providing secure and easy sharing of financial data between customers and financial bodies.  Account Aggregator service will help customers to share their financial data such as bank statements, insurance policies, and others, for services like loans, new insurance, and other banking services. Customers can request, pause or cancel any ongoing financial services directly from the PhonePe app. PhonePe Group has partnered with financial institutions like Yes Bank, AU Small Finance Bank, ICICI Bank, and, Axis Bank. - Business Line

🍒   KVG Bank bags award for Atal Pension Yojana enrolment : Karnataka Vikas Grameena Bank (KVGB) has bagged the national award for significant enrolment under Atal Pension Yojana (APY) from the Pension Fund Regulatory and Development Authority (PFRDA), New Delhi. Shreekant M Bhandiwad, Chairman of KVGB, received the award from Vivek Joshi, Secretary, Department of Financial Services, Government of India, and Deepak Mohanty, Chairman of PFRDA, in New Delhi on Wednesday. Bhandiwad took charge as the Chairman in April 2023. Expressing happiness over receiving the award, Bhandiwad said APY is a safety net for workers in the informal sector for getting pre-defined pension after 60 years. The bank has enrolled 3,42,852 (cumulative) accounts under APY. During 2022-23, the bank enrolled 76,569 accounts against the target of 50,320 and achieved the target well before the time frame. - Business Line

🍒   Authorised Dealer Category-I banks operating IBUs can offer non-deliverable derivative contracts involving Rupee: RBI : The Reserve Bank of India has allowed Authorised Dealer (AD) Category-I banks operating International Financial Services Centre (IFSC) Banking Units (IBUs) to offer non-deliverable derivative contracts (NDDCs) involving Indian Rupee (INR) to resident non-retail users for hedging. The Central bank said such transactions shall be cash settled in INR. It also gave the flexibility of cash settlement of NDDCs transactions between two AD Category-I banks, and between an AD Category-I bank and a person residing outside India in INR or any foreign currency. The aforementioned measures are aimed at developing the onshore INR NDDC market and providing residents the flexibility to efficiently design their hedging programmes. - Business Line

🍒   Odisha train tragedy: ICICI Prudential Life Insurance relaxes claims settlement process for victims : ICICI Prudential Life Insurance (ICICI Pru Life) has relaxed the claim settlement process for families impacted by the Odisha train accident.  The company will also expedite the claim settlement to provide financial relief to those affected by the tragedy. The processing of death and health claims including those covered under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), will be done on the basis of just three basic documents. Documents required to settle claims are bank account details; a death certificate from municipal authorities; if a death certificate is not available, a list of deceased passengers issued by hospitals, government authorities, or the police, and a copy of valid address proof of the nominee. - Business Line

🍒   Bank bond issuances likely to decline below ₹90,000 cr in FY24: ICRA : Bank bond issuances are likely to decline below ₹90,000 crore in FY24 from the previous year’s all-time high of ₹1.1-lakh crore as liquidity could ease to an extent, ICRA said. “Overall credit growth momentum remains strong in relation to deposits in year-to-date FY24. As a result, the credit-to-deposit (CD) ratio of the banking system is expected to firm up. “However, stronger foreign institutional investor (FII)/foreign portfolio investment (FPI) inflows, as seen recently, in addition to the derecognition of the ₹2,000 currency note and an anticipated dividend by the Reserve Bank of India (RBI) could ease liquidity conditions in the interim,” the rating agency said. - Business Line.

🍒   LIC increases stake in Tech Mahindra to 8.88% : Insurance behemoth Life Insurance Corporation of India (LIC) has increased its equity shareholding in IT services provider Tech Mahindra via open market transactions in the last more than a six-month period. "Corporation’s shareholding in Tech Mahindra has increased from 6.69 crore to 8.65 crore equity shares, raising its shareholding from 6.869 percent to 8.884 percent," LIC said in its filing to exchanges.There is an increase of 2.01 percent in holding during the period from November 21, 2022, to June 6, 2023, it added. The average buying price for these shares stood at Rs 1,050.77 per share. As of March 2023, LIC held 8.07 percent stake or 7.86 crore equity shares in Tech Mahindra.  - moneycontrol.

🍒   RBI’s VRRR auction gets tepid response, again : Banks have shown a distinct preference for conserving liquidity, deploying funds much lower than the notified amount at the last four variable rate reverse repo (VRRR) auctions conducted by the Reserve Bank of India. While RBI’s monetary policy stance remains as “withdrawal of accommodation”, banks, fearing sudden liquidity mismatches, seem to be holding back on deploying funds in the auctions. Banks offered funds aggregating only ₹1,850 crore at the 2-day VRRR that RBI conducted on Wednesday against the notified amount of ₹75,000 crore. The central bank accepted the funds at a weighted average rate of 6.49 per cent. - Business Line

🍒   Six months since launch, surety bonds see no takers so far : It has been nearly six months since the first surety bond product was launched, and there are still no takers for the product, owing to several operational challenges, delays in policy changes and absence of standardised processes. Touted as an alternative to bank guarantees (BGs), surety bonds offer the benefit of performance or execution-linked cover and waiving off collateral in exchange for a premium, thus freeing up customer assets. But, in their current form, surety bonds offer minimal benefits over regular BGs. “There is an issue with certain approvals. Demand is high, insurers have been getting calls and want to sell the product, but there are challenges. Product is available, it has been launched, people can buy it. That entire system is in place,” an industry official said, adding that the well-defined process and comfort of using BGs compared with the complexity and conditions in surety bonds also act as deterrents. - Business Line

🍒   Markets climb for 4th day; Sensex rallies 350 pts to reclaim 63,000-mark : Rising for the fourth straight session, the 30-share BSE Sensex climbed 350.08 points or 0.56 per cent to settle at 63,142.96. During the day, it jumped 403.55 points or 0.64 per cent to 63,196.43.  The NSE Nifty advanced 127.40 points or 0.68 per cent to end at 18,726.40. From the Sensex pack, Nestle, Tata Steel, Tata Motors, Bharti Airtel, Larsen & Toubro, Power Grid, NTPC, Tata Consultancy Services, Tech Mahindra, Infosys, and Axis Bank were the major gainers. Kotak Mahindra Bank, Maruti, Bajaj Finance, Mahindra & Mahindra, and ICICI Bank were the laggards.- Business Line

🍒   Rupee rises 5 paise to close at 82.55 against US dollar : The rupee gained 5 paise to settle at 82.55 against the US dollar on foreign fund inflows and risk-on sentiments ahead of the Reserve Bank of India's monetary policy decision on Thursday. At the interbank foreign exchange market, the local unit opened at 82.56 against the US dollar and settled at 82.55 (provisional), up 5 paise over its previous close. During the day, the domestic unit witnessed an intra-day high of 82.46 and a low of 82.57. On Tuesday, the rupee closed at 82.60 against the US currency. The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.10 per cent to 104.02.- Business Line.

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