Banking news

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☕🍔  09.01.2024 : Today's Banking / Financial News at a Glance 

🍒        Wage revision: SBI to provide for additional Rs 11,000 crore : State Bank of India (SBI) will likely make additional provisions of Rs 11,000 crore in H2FY24 to meet requirements for the 17% wage hike following the pact signed between the bank unions and the Indian Banks’ Association (IBA) on December 17, two senior bank officials told FE. “As per our estimation, a total of Rs 20,000 crore of provision is needed to meet a 17% wage hike for employees and pensioners. We have made about Rs 9,000 crore of provisions till Q2FY24 and will make another Rs 11,000 crore in H2FY24,” a senior official said. - financial express

🍒        PNB hikes MCLR, Union Bank withdraws festive discount on vehicle loans : Reflecting a rise in the cost of deposits, Delhi-based public sector lender Punjab National Bank has hiked the Marginal Cost of Funds Based Lending Rate (MCLR) by five basis points across different tenors from 1 January 2024. One-year MCLR is now 8.7 per cent. Meanwhile, Bank of Baroda, a Mumbai-based public sector lender, has hiked the home loan rate from 8.7 per cent to 8.8 per cent from the start of the month. Rate revision comes after the end of its festive period offer. A PNB executive said there is intense competition for mobilising resources for which banks have and are raising deposit rates, increasing the cost of funds. MCLR revision is the outcome of that which will mostly impact business customers. As for the change in interest rates on retail loans, they have to take into account competition, which remains strong. Another Mumbai-based lender, Union Bank of India, has withdrawn festival discounts (25-30 basis points) offered on vehicle loans. While the bank did see good traction in terms of building a loan book during the festive season, there is also an element of protecting Net Interest Margin (NIM). This weighed on the decision to discontinue sops offered during the festival period, a senior bank executive said. - Business Standard

🍒        Indian Bank bars staff from conclaves, seminars, and felicitations till Mar 31 : Public sector lender Indian Bank has instructed its senior employees across circles not to conduct any business conclaves, seminars, or felicitation functions till March 31. "It is directed by the top management that no level campaigns with any of our channel partners are to be conducted till March 31, 2023. All focus to be diverted on business parameters of the bank, "said an internal circular of January 5, that Moneycontrol has reviewed. "It is directed by the top management that no local training programmes be conducted/attended of channel partners by any of our filed personnel till March 31, 2024," said the circular. "All are to strictly comply with the directions, any deviation from the said directives will be viewed with extreme seriousness by the top management, "the directive added. - moneycontrol.

🍒        Fino Payments Bank applies for small finance bank license from RBI : Fino Payments Bank walked the talk and has applied for a small finance bank license. The bank has been preparing itself for an upgrade in terms of banking activity for quite some time. Fino management had earlier told ET that it would apply for the license by the end of 2023. RBI allows payments banks without corporate lineage to apply for a small finance bank license after completing five years of business. The business opportunity for payments banks is limited in the sense that while they accept deposits from low-income households and migrant labourers and offer payment services to them, they are not allowed to lend. Small finance banks, on the other hand, are allowed to operate both in the asset and liability sides of the business. Fino has around Rs 600 crore of net worth while the minimum capital requirement for small finance banks is Rs 200 crore at present. - economic times

🍒        RBI levies Rs 7 lakh penalty on Navsarjan Industrial Co-operative Bank for non-compliance : The Reserve Bank of India (RBI) has taken an action against Navsarjan Industrial Co-operative Bank Ltd., situated in Ankleshwar, District Bharuch, Gujarat, by imposing a monetary penalty of Rs 7.00 lakh. According to RBI, this penalty, enacted through an order dated December 14, 2023, has been imposed due to the bank's non-compliance with RBI directives on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs),' 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016,' and the contravention of 'Section 26A (2) read with Section 56 of the Banking Regulation Act, 1949 (BR Act).' - economic times

🍒        JC Flowers ARC, Acre, Edelweiss among bidders for Yes Bank's ₹4,200-cr NPA pile : JC Flowers ARC, Ares-backed Acre ARC, and Edelweiss ARC are among the eight investors bidding for ₹4,200 crore of bad loans offered by Yes Bank, involving both corporate and retail segments, sources told ET. Other ARCs participating include Omkara ARC and ARCIL. The corporate portfolio includes eight accounts that turned non-performing after 2019. These include Prometheon Enterprises with a debt of ₹1,496 crore, Malvern Travels, UK, with a debt of ₹537 crore, and Katerra India with ₹521 crore. Yes Bank's soured corporate loan pool is ₹3,091 crore, while the retail portfolio amounts to ₹1,142 crore. - economic times.

🍒        Angel One hires ex-Yes Bank CISO Anuprita Daga : Fintech company Angel One on Monday announced the appointment of Anuprita Daga as its group CISO (chief information security officer). As the former CISO of Yes Bank, Daga was pivotal in driving security practices across digital banking channels and products to provide secured banking services. She has about 25 years of domain expertise in spearheading security transformation, establishing and implementing security strategy, managing data privacy, and ensuring adoption and compliance of regulatory and global standards in the banking and finance industry, according to a statement from Angel One. - economic times

🍒        Hitachi Payment Services completes acquisition of Writer Corporation’s Cash Management Business : Hitachi Payment Services on Monday said it has completed the acquisition of Writer Corporation’s cash management business and renamed it as Hitachi Cash Management Services in line with the Japanese company’s single brand identity. Industry veteran Anup Neogi will be the new managing director and chief executive officer of Hitachi Cash Management Services, the company said in a statement on Monday. - economic times.

🍒        NCLAT rejects Authum plea on SREI; NARCL completes payments : The National Company Law Appellate Tribunal (NCLAT) has dismissed Authum Investment & Infrastructure's appeal against the takeover of the twin Srei non-banking financial companies by the National Asset Reconstruction Co Ltd (NARCL), clearing the roadblocks for the smooth takeover of the companies. In 42 page order order a two-judge bench of NCLAT chairman Ashok Bhushan and Barun Mitra said they did not find any errors in the NCLT order rejecting Authum Investment & Infrastructure's plan in August 2023 and that there were no grounds in the appeal. - economic times

🍒        REC launching Yen bonds this week to raise Rs 2500 crore : REC, one of the largest state-sponsored infrastructure financiers, will launch an offering of Yen bonds this week to raise at least Rs 2,500 crore, according to people aware of the matter. It has filed offering details with stock exchanges in Tokyo, London, Singapore and New York. REC has opted for a Regulation S offering which will make it compliant with US laws without the need for the company to register with the stock market regulator there. The offering will be open to multiple investors who invest in Yen-denominated securities based in and outside Japan. - economic times

🍒        Encore ARC acquires IndoStar Capital's distressed loan book of Rs 292 crore : Brookfield and Everstone-backed IndoStar Capital Finance sold Rs 292 crore worth of stressed asset portfolio to Encore Asset Reconstruction Company (ARC) in a deal which involved a senior-junior arrangement between the buyer and the seller, said people with knowledge of the matter. The senior-junior structure is rarely used between an ARC and a seller (banks or finance companies), since regulators have discouraged such transactions undertaken by alternate investment funds (AIFs). - economic times

🍒        5 NBFCs line up NCD issuances aggregating ₹2,750 crore : A host of non-banking finance companies (NBFCs) have lined up their non-convertible debenture (NCD) issuances in the run up to the financial year end amid liquidity tightness in the banking system and good demand for loans. NBFCs such as Kosamattam Finance, Muthoot Finance, Edelweiss Financial Services, 360 ONE Prime Limited (formerly known as IIFL Wealth Prime Limited) and Muthoot Fincorp will be collectively raising up to ₹2,750 crore via NCDs this month, per their regulatory filings. - Business Line.

🍒        Standalone health insurers sizzle in December 2023 : Standalone Health Insurers (SAHI) have recorded 26 per cent growth in retail annual premium equivalent (APE) in December 2023 at ₹2900 crore (₹2,300 crore). For the year ended December 2023, retail APE was up 25 per cent at ₹22,500 crore (₹17,900 crore), official IRDAI and General Insurance Council data showed. All the five standalone health insurers—Star Health, Care Insurance, Niva Bupa, Aditya Birla Health Insurance and ManipalCigna-recorded double digit growth for both December 2023 and year-to-date as of December 2023. - Business Line.

🍒        Banks' net profit likely to grow by 16.7% in Q3 due to high credit offtake ; Gaining from high credit off-take and lower credit costs, banks are likely to post 16.7 per cent year-on-year (Y-o-Y) growth in net profit during the third quarter of the financial year ended December 2023 (Q3 FY24).   However, sequentially, net profit may shrink by 2.4 per cent over the second quarter ended September 2023 (Q2), according to Bloomberg’s estimates. Private sector lenders as well as public sector banks could witness sequential contraction in net profits. Sanjay Agarwal, director, CARE Ratings, said banks are benefiting from the high volume of loan off-take. “Hence, the growth in the bottom line is steady (Y-o-Y basis) even while net interest margins (NIMs) are under pressure. The impact of margin pressure is visible on profits on a sequential basis,” he said.  - Business Stanard

🍒        CP issuances to rise after RBI expands issuer eligibility : The issuance of commercial papers (CPs) is expected to rise, with the Reserve Bank of India (RBI) expanding the list of eligible issuers for these debt instruments. The RBI has recently allowed infrastructure investment trusts (InvITs), real estate investment trusts (REITs), cooperative societies and limited liability partnerships to raise funds via CPs. The new directives will take effect from April. “The RBI has expanded the list of eligible CP issuers through these guidelines,” Suman Chowdhury, chief economist and head of research, Acuite Ratings & Research, told FE. “Some REITs and InvITs which raise funds from bond market may tap the CP market for funds. There will be some increase in issuances. To what extent, we need to see.” - financial express

🍒        LIC to pick up 10% stake in NHB-promoted company : Life Insurance Corporation of India (LIC) on Monday said its board has approved acquiring up to 10 per cent in a company promoted by the National Housing Bank (NHB). In a regulatory filing, LIC said the board has cleared the proposal to invest in a new company, promoted by the NHB, for residential mortgage-backed securities, through equity contribution up to 10 per cent of the share capital. The investment is to be made in one or more tranches, it added. Details about the company were not disclosed. Details about the company were not disclosed. LIC has a housing finance subsidiary — LIC Housing Finance Ltd — that was incorporated in 1989. This company went public in 1994 and since then its stocks have been listed on the National Stock Exchange (NSE) and Bombay Stock Exchange Limited (BSE). - Moneycontrol.

🍒        Sensex sheds 671 pts, Nifty closes around 21,500 : Sensex, Nifty updates on 08 January 2024: Notwithstanding initial gains, equity benchmarks BSE Sensex and NSE Nifty declined around 0.9% each on Monday. While the Sensex lost 670.93 points or 0.93% to 71,355.22, Nifty dropped 0.91% or 197.80 points to 21,513, per provisional data. - Business Line.

🍒        Rupee rises 9 paise to 83.06 against US dollar in early trade : The rupee appreciated 9 paise to 83.06 against the US dollar in early trade on Monday on the back of positive domestic equity markets and inflow of foreign fund. However, forex traders said a strong American currency and volatile crude oil prices weighed on the domestic currency. At the interbank foreign exchange, the rupee opened at 83.09, touched the level of 83.04 before trading at 83.06 against the greenback in initial deals, registering a rise of 9 paise from its previous close. - Business Line..

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