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☕🍔 05.01.2024 : Today's Banking / Financial News at a Glance

🍒        SBI not worried about unsecured loans, says Dinesh Khara : The State Bank of India (SBI) has nothing to worry about its unsecured loans which remain under control, chairman Dinesh Khara has said, a few weeks after the Reserve Bank of India tightened norms for credit cards and personal loans. The total unsecured loans of India’s largest bank were at Rs 2 lakh crore against the total book size of Rs 35 lakh crore, Khara told CNBC-TV18 on January 4. This is 5.7 percent of the total loan book of the lender. “We have no concern on asset quality with respect to unsecured book,” Khara said. He also said that cost of funds has increased by five basis points (bps) due to higher risk weight assets for unsecured loans and non-banking financial companies (NBFCs). - moneycontrol.

🍒        RBI penalises five Gujarat-based cooperative banks : The Reserve Bank has penalised five Gujarat-based cooperative banks for various lapses in complying with its regulations, with penalties varying from Rs 50,000 to Rs 5 lakh on each of them over the past one month. The regulator in separate statements on Thursday said in an order dated December 13, 2023, it imposed a Rs 5 lakh penalty on the Vadodara-based Shree Bharat Co-operative Bank for non-compliance with its directions on the placement of deposits with other banks by urban primary cooperative banks and flouting its norms on interest rate on deposits directions of 2016.  The monetary penalty on each of these five banks is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by the bank with its customers, the central bank said. - economic times

🍒        Central Bank of India’s Q3 FY24 gross advances up 14.91% y-o-y : Central Bank of India (CBoI) has reported a 14.91 per cent year-on-year (y-o-y) growth in gross advances and 9.52 per cent y-o-y growth in total deposits in the third quarter ended December 31, 2023. As at December-end 2023, the public sector bank’s gross advances and total deposits stood at ₹2,40,066 crore and ₹3,77,684 crore, respectively, per the Bank’s quarter-end business update. CASA (current account, savings account) deposits declined to 49 per cent of total deposits against 51.22 per cent as at December-end 2022. The credit-deposit ratio increased to 63.72 per cent in the third quarter against 62.43 per cent in the second quarter and 60.77 per cent in the year-ago quarter. - Business Line.

🍒        REC, Bank of Baroda join hands to finance power, infrastructure, logistics projects : State-owned REC Ltd has inked an initial pact with Bank of Baroda to jointly offer loans for power, infrastructure and logistics projects in India over the next three years. By pooling resources and expertise, both entities endeavour to champion initiatives that will invigorate economic development and enhance accessibility to essential services nationwide, a power ministry statement said. According to the statement, REC has signed a Memorandum of Understanding (MoU) with Bank of Baroda to facilitate joint sanctions of loans to fund power, infrastructure and logistics projects in the country over the next three years. The MoU was signed on Wednesday in the presence of Vivek Kumar Dewangan, Chairperson and Managing Director of REC, and Debadatta Chand, Managing Director & CEO of Bank of Baroda, along with Lalit Tyagi, Executive Director at Bank of Baroda. -  moneycontrol.

🍒        Union Bank to credit staff benefit claims to CBDC wallets, instead of salary accounts : Public sector lender Union Bank of India (UBI) plans to provide credit for various employee benefit claim amounts directly to CBDC (Central Bank Digital Currency) Wallet, instead of salary drawing account over a period, according to the bank's internal circular that Moneycontrol reviewed.  CBDC is a digital form of paper currency. The legal tender is backed by the RBI and is called Digital Rupee. "In order to promote digital rupee, the bank is planning to provide credit of various employee benefits claim amounts directly to CBDC wallet, instead of employee salary drawing account over a period. The necessary system changes are already under progress," a December 26 circular said.  The circular added that on a pilot basis, UBI has decided to credit the newspaper allowance in advance for December 2023 directly to the CBDC wallet of eligible employees. - Moneycontrol.

🍒        Large merchants may have to pay reasonable fee on UPI payments: NPCI chief : Large merchants transacting on Unified Payments Interface (UPI) may incur a ‘reasonable’ fee on related-transactions in the next three years, Dilip Asbe, managing director (MD) and chief executive officer (CEO), National Payments Corporation of India (NPCI) said.   “From the long-term perspective, a reasonable charge, not on the small merchants but the larger ones, will come. I don’t know when it will come. It may be one, two, or three years down the line,” he said, while speaking at an event organised by the Bombay Chartered Accountants’ Society (BCAS) in Mumbai.  -  Business Standard

🍒        AU Small Finance Bank reports 20% credit growth, 31% deposit growth :  AU Small Finance Bank on Thursday reported a 20% year-on-year growth in advances while its deposit mobilisation grew 31% at the end of December, outpacing credit growth. The largest small finance bank saw its advance portfolio rising to Rs 67624 crore while gross deposits were at Rs 80120 crore. The bank securitized loan portfolio of Rs 2,738 crore during the quarter to diversify funding profile and optimise cost, according to the provisional quarterly data filed with the stock exchanges.  The macro environment during the third quarter continued to warrant caution and prudence amidst tight liquidity, higher interest rate and persistent competitive landscape for deposits, the bank said. - economic times.

🍒        Bandhan Bank’s credit in Q3 grows 18.6 per cent to Rs 1.16 lakh crore ; Private lender Bandhan Bank reported a growth of 18.6 per cent in its loans and advances during the third quarter ending December 31 at Rs 1,15,964 crore.  In a regulatory filing on Thursday, the Kolkata-based bank said the figure stood at Rs 97,787 crore during the year-ago period. Total deposits increased 14.8 per cent to Rs 1,17,422 crore during the quarter under review, it said. While retail deposits, including CASA (current account savings account), rose by 19 per cent to Rs 84,563 crore, bulk deposits grew by 5.2 per cent to Rs 32,859 crore, it added. The total collection efficiency ratio of the bank at the end of the quarter stood at 98 per cent.  - financial express

🍒        Ujjivan SFB jumps 4% on 27% increase in loan book; records 29% growth in deposits : Shares of Ujjivan Small Finance Bank (SFB) jumped more than 4 percent in early trade on January 4, post registering a solid 27 percent increase in loan book on a year-on-year basis to Rs 27,791 crores. At 9:24 am the Ujjivan Small Finance Bank stock was trading at Rs 59.95 on NSE. Ujjivan Small Finance Bank has shown robust performance in the quarter ending December FY24. Total deposits saw a strong 29 percent year-on-year growth, reaching Rs 29,869 crore. The gross loan book also exhibited a commendable 27 percent YoY increase, totaling Rs 27,791 crore for the quarter. On a sequential basis, deposits and the gross loan book grew by 3 percent and 5 percent, respectively - moneycontrol.

🍒        IndusInd Bank trades higher as Q3 advances grow 20% : Shares of IndusInd Bank rose nearly a percent in early trade on January 4 after the private sector lender reported a 20 percent growth in the third quarter advances and a 13 percent surge in deposits. At 9.15 am the IndusInd Bank stock was trading at Rs 1611.24 on NSE. Induslnd Bank saw a 13 percent year-on-year increase in deposits, which grew to Rs 3.69 lakh crore, which was also 3 percent higher from the previous quarter. Advances at Rs 3.27 lakh crore were up 4 percent sequentially and 20 percent year-on-year, the bank said in a business update on January 2. - moneycontrol.

🍒        Future enterprises' lenders appoint PwC as sale advisor : Lenders to Future Enterprises (FEL) have approved the appointment of consultancy firm PwC as an advisor to resolution professional Avil Menezes as they seek bids for the debt-laden company for the second time, after having scrapped last month the first such attempt due to lower valuations. This time around, lenders are seeking separate bids for the company's insurance stakes, its interests in a couple of textile mills and other residual investments including some manufacturing units. Lenders are hoping that the separate bids for different assets will help to maximise value."PwC's job will be to help the RP market the assets and maximise valuations. PwC was selected among four such consultancy firms that had applied. Lenders have set January 16 as the last date to receive expressions of interest (EOIs) from prospective bidders in this second attempt," said a person familiar with the process. - economic times

🍒        Gold prices eye Rs 70,000 per 10 gm, silver to shine at Rs 85,000 per kg in 2024 : Gold price may touch Rs 70,000 per 10 gm and silver Rs 85,000 per kg this year, according to a commodity outlook report released by ICICIDirect on Thursday. It said that gold prices are likely to rise further on the back of weak dollar and a decline in US treasury yields. Dollar and yields nosedive on anticipation that the US Fed will start cutting rates as soon as March 2024. Concerns over slower global economic growth and escalating geopolitical tensions in Middle East may continue to make gold valuable as a hedge against uncertainties. Additionally, central banks are likely to continue with their buying spree, diversifying their reserves - economic times

🍒        Banks, NBFCs post double digit loan growth in Q3 : Banks, both public sector and private, continued to post robust double-digit loan growth of 11-23 per cent y-o-y in Q3 FY24, as per provisional figures declared by the lenders for the quarter. Credit growth for banks such as YES Bank, South Indian Bank and Dhanlaxmi Bank was at the lower end of 11-12 per cent whereas for lenders such as IndusInd Bank, Bank of Maharashtra and CSB Bank was at the higher end of 20-23 per cent. Growth for small finance banks was over 20 per cent given their small base with Suryoday SFB posting loan growth of 41 per cent on year.  NBFCs such as Bajaj Finance and Mahindra Finance too posted strong credit growth for the quarter, with their assets under management rising by 35 per cent and 25 per cent, respectively, on year. Poonawalla Fincorp, with a smaller asset base, posted a growth of 57 per cent y-o-y. - Business Line.

🍒        Paytm signs MoU with Ayodhya Nagar Nigam : One97 Communications Ltd (OCL), which owns the brand Paytm, has signed an MoU with Ayodhya Nagar Nigam to enable mobile payments in Ayodhya using the Paytm-pioneered QR code, Soundbox, and card machines.  This is aimed at providing seamless mobile payment services during the much-anticipated inauguration of Ram Mandir in the city on January 22. With this, the company will enable mobile payments at various departments in collaboration with Ayodhya Nagar Nigam. Through this MoU, the company will also deploy Paytm card machines at cash collection centres under State Nagar Nigam departments.  - Business Line.

🍒        Bajaj Finance’s AUM surges 35% Y-o-Y to ₹3.11 lakh crore in December quarter : Bajaj Finance Ltd, a leading non-banking finance company, reported a 35 per cent increase in assets under management (AUM) to ₹3.11 lakh crore in the December-ending quarter as compared to ₹2.3 lakh crore in the year-ago period, according to the business update filed with the stock exchanges. This is the first time the company’s AUM had surpassed the ₹3-lakh-crore mark. The latest 35 per cent year-on-year jump was better than the 33 per cent rise, which itself was a four-year high, seen in the September-ending quarter at ₹2.9 lakh crore. The AUM in Q3 FY24 grew by about ₹20,700 crore, Bajaj Finance said. - Business Line.

🍒        LIC gets demand notice for Rs 663 crore for short payment of GST : Life Insurance Corporation of India (LIC) on Wednesday said the tax authorities have slapped a demand notice of about Rs 663.45 crore on it for short payment of Goods and Services Tax (GST). The corporation received a communication/ demand order for interest and penalty from the Office of the Commissioner of CGST & Central Excise, Chennai North Commissionerate, on January 1, LIC said in a regulatory filing. The demand pertains to wrong availment of Input Tax Credit (ITC) and non-payment of tax on turnover wrongly declared as non-GST supply in GSTR-1 for 2017-18, and 2018-19, it said. The corporation will file an appeal before the Commissioner (Appeals), Chennai against the said order, it said. - Business Line.

🍒        Commercial paper, NCD issuers should disclose information relating to payment default on their website  : The Reserve Bank of India wants issuers of Commercial Papers (CPs) and Non-Convertible Debentures (NCDs) to disclose information on any payment default through various channels, including publicly disseminating such information through their websites. These requirements form part of the revised Master Direction on CPs and NCDs of original or initial maturity up to one year, and are aimed at improving the transparency and safety of money markets. An issuer who has defaulted on the repayment of a coupon/ redemption, partially or in full, of a CP and/ or NCD has to provide details of the same to the IPA (Issuing and Paying Agent) before 5 pm on the date of the default. - Business Line.

🍒        Bank lending to aviation sector surges 65% as airlines borrow more to fund lease contracts, hirings : Indian banks have significantly ramped up lending to the country's booming aviation sector over the last 12 months to fund lease contracts and hirings, according to the Reserve Bank of India (RBI) data. On a year-on-year basis, bank lending to the aviation industry surged 65.4 percent at end-November 2023 compared with a contraction of 8.7 percent in the preceding comparable period, the latest sectoral credit data with the RBI showed.  At least four bank executives and airline company executives Moneycontrol spoke to attributed the higher credit demand to a jump in lease contracts and more hirings and a positive outlook towards the medium-to-long-term growth in the aviation sector. Bankers said that they are looking at long-term lending as they are positive on the medium-to-long-term growth of the segment and are eying to lend to some airlines. “We are looking at lending to some airlines and we have a small portfolio of around Rs 100 crore for now. Our goal is to look at long-term lending,” said a chief executive officer of a private bank who did not wish to be named. - moneycontrol.

🍒        RBI to conduct 7-day Variable Rate Repo auction on January 5 : The Reserve Bank of India (RBI) on January 4 said it will conduct a seven-day variable rate repo (VRR) auction for a notified amount of Rs 1 lakh crore on January 5. The auction will be held between 10:30 AM and 11:00 AM, and reversal of these funds will take place on January 12. “On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo auction on January 5,” RBI said in a release. This comes when liquidity in the banking system is in a huge deficit of around Rs 1.19 lakh crore. - moneycontrol.

🍒        Sensex, Nifty break 2-day losing streak, Bank Nifty gains 1%; buying across markets ahead of results : The domestic benchmark indices — S&P BSE Sensex and Nifty 50 — broke a two-day lull and edged higher on January 4 as investors shopped across large-caps, mid- and small-caps. This buying behaviour comes ahead of India Inc's announcement of October-December (Q3FY24) quarter performance, wherein the Street is expecting strong results to support underlying fundamentals. On January 4, the S&P BSE Sensex and NSE Nifty 50 gained up to 0.7 percent to 71,889 and 21,658, respectively. Broader indices — Nifty Midcap 100 and Nifty Smallcap 100, on the other hand, gained over 1 percent each. - moneycontrol.

🍒        Rupee rises 7 paise to close at 83.23 against US dollar : The rupee appreciated 7 paise to close at 83.23 against the US dollar on Thursday, helped by a bullish trend in domestic equities and weakness of the American currency in the overseas market. However, rising crude oil prices capped sharp gains for the local unit, forex traders said.  At the interbank foreign exchange market, the local unit opened flat at 83.30 against the greenback.The rupee oscillated between an intra-day low of 83.32 and a high of 83.21 against the greenback and finally settled at 83.23 against the dollar, higher by 7 paise from its previous close.  - Business Line..

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