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☕🥯 10.01.2024: Today's Banking / Financial News at a Glance 

🍒         India & Sri Lanka discuss early launch of UPI payment system : Six months after it was announced by the prime ministers of both countries, India has discussed the early launch of the UPI payment system with Sri Lanka and reiterated its support in the cash-strapped island nation’s debt restructuring process. In July 2023, Prime Minister Narendra Modi and Sri Lanka President Ranil Wickremesinghe signed an agreement on Unified Payments Interface (UPI) acceptance in Sri Lanka during Wickremesinghe’s two-day visit to India. The latest discussion took place on Monday during a meeting between the High Commissioner of India Santosh Jha with the Governor of the Central Bank of Sri Lanka (CBSL), Dr Nandalal Weerasinghe. - Business Line.

🍒         Kotak Bank’s commercial banking to grow more than industry : Kotak Mahindra Bank expects its commercial banking business to grow more than industry during the current financial year. The private lender is also hopeful of growing its commercial vehicles, construction equipment, microfinance and gold loan segments faster compared with the respective industries. “Banking credit will grow faster and we will continue to grow faster than the industry. Whether it is commercial vehicles, construction equipment, microfinance or gold loans, we will grow faster than their respective industries in all these business verticals,” Manish Kothari, president and head, commercial banking, Kotak Mahindra Bank, told FE. - financial express.

🍒         ICICI Bank Ltd is planning 30 new hires this year on the expectation that fundraising by companies will hit a record high this year and next.  : The country's second-largest private lender aims for 15 new hires in its investment banking division to beef up its mergers and acquisitions, private equity and fundraising practices, and another 15 in sales, trading, and research, Ajay Saraf, head of investment banking and institutional equities at the lender’s ICICI Securities Ltd. unit told Bloomberg news agency. The job profiles range from associate to executive vice president level, Saraf told Bloomberg News.ICICI Bank anticipates record high fundraising, plans 30 new hires - Live Mint.

🍒         Bandhan Bank issues clarification on audit, says loan claims under audit by govt agency : In a stock exchange filing, private lender Bandhan Bank said that the National Credit Guarantee Trustee Company is undertaking an audit of the loan claims filed by the bank under a guarantee scheme. However, the bank clarified that the regulator has not initiated an audit of the bank, but only the CGFMU claim pertaining to the portfolio. Following the clarification, Bandhan Bank's stock price rose by as much as 3.17 per cent before giving up part of those gains. Shares dipped 7.39 per cent on Monday due to media coverage of the audit. - economic times.

🍒         NDA 2.0 nears end but wait for privatisation of PSBs, general insurance companies continues : As Modi Government 2.0 close-to-completes its constitutional obligation of presenting budgets, one major announcement related to privatisation of two public sector banks and a general insurance company is yet to see the light. Additionally, the privatisation of IDBI Bank is expected to be completed by the new government later this year. At the end of the fiscal year 2022-23, while all the 12 public sector banks are in black, three out of four general insurance companies are in red. While announcing the Union Budget for fiscal fear 2021-22, Finance Minister Nirmala Sitharaman had said, “Other than IDBI Bank, we propose to take up the privatisation of two public sector banks and one general insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this session itself.” - Business Line.

🍒         LIC to pick up to 10% equity stake in NHB promoted ‘RMBS’ entity : Insurance behemoth Life Insurance Corporation of India (LIC) is planning to acquire up to 10 percent equity stake in a company promoted by the National Housing Bank (NHB). The Board of Directors of LIC on Monday gave their approval to the proposal to invest in the NHB promoted entity that would focus on residential mortgage-backed securities (RMBS), according to a regulatory filing by LIC with the stock exchanges. RMBS are basically debt-based assets backed by the interest paid on residential loans. RMBS are bonds which are secured against a large pool of residential mortgages (home loans). RMBS are generally considered to be a safer investment than some other asset types. - businessline

🍒         Loan growth, fees to lift bank profits in Q3, higher deposit costs to pinch : Banking profitability is likely to be hit by lower net interest margins (NIMs) as the increasing cost of deposits could not be totally offset by a corresponding rise in lending rates during the December quarter. However, strong loan growth, stable asset quality and fee income will help banks still report an increase in profits year-on-year. NIM, or the difference between the yield earned on advances and that paid for deposits, is considered a key metric of banking profitability. Banks have been forced to raise deposit rates sharply this fiscal to keep pace with strong credit demand. Term deposit rates have increased between 70 and 120 basis points, mostly in the third quarter. Analysts say that the margin compression could hence be severe, particularly year on year, as banks have lost most benefits from the rise in interest rates in their bid to garner funds. One basis point is 0.01 percentage point. - economic times

🍒         NCGTC to conduct detailed audit of claims submitted by Bandhan Bank against non-performing loans : The National Credit Guarantee Trustee Company (NCGTC) will conduct a detailed audit of claims submitted by Bandhan Bank against non-performing loans extended by the lender under a government guarantee scheme. The private sector lender claimed twice from the credit guarantee fund for the micro units (CGFMU). After receiving the first tranche, it had applied for second tranche of CGFMU claim amounting to nearly Rs 1290 crore. NCGTC had done a preliminary sample audit on the application, and further decided to conduct a detailed audit for the CGFMU portfolio of FY 2020-21, the bank said Tuesday in a regulatory filing to stock exchanges. - economic times

🍒         Varthana Finance to raise Rs 116 crore from Swiss investor Blue Earth Capital : ChrysCapital-backed school financier Varthana Finance is in the process of raising Rs 116 crore debt from Swiss impact investor Blue Earth Capital while it plans to raise Rs 350 crore equity next fiscal to expand business. The debt fund will be raised at 12.85% all-embedded cost including hedging cost, Varthana co-founder and executive director Steve Hardgrave told ET. The fund is raised for 48 months. The firm's average cost of borrowing was a little over 13%. The company said it will use the fresh fund to finance classroom infrastructure in private schools. - economic times

🍒         PFC gets Reserve Bank nod to set up finance company in GIFT City : Power Finance Corporation (PFC) on Tuesday received approval from the Reserve Bank of India (RBI) to set up a wholly-owned finance company in the GIFT City in Gujarat. The entity at the International Financial Services Centre (IFSC) will present new business opportunities for PFC and contribute to the growth of the country's power sector, PFC Chairman and Managing Director Parminder Chopra said in a statement. According to a regulatory filing, PFC is in receipt of the no objection letter from the RBI for setting up a finance company as a wholly-owned subsidiary in the GIFT City. - economic times

🍒         HDFC Securities appoints Neetika Bhatia as chief HR officer : Investment services provider HDFC Securities has appointed Neetika Bhatia as its chief human resource officer (CHRO). Bhatia, who will be heading human resources, learning and development and administration and infrastructure functions, has more than 17 years of experience, with expertise in talent and leadership development, rewards and change management.  She has previously worked with companies like Citibank, Atos Origin, and Trica. Bhatia has an MBA in Human Resources from Management Development Institute (MDI), Gurgaon. - economic times

🍒         TATA AIG General Insurance excludes Red Sea route, others raise premiums : Tata AIG General Insurance has excluded the Red Sea shipping route from standard marine insurance after rebel attacks on vessels in the area, while other insurers are raising premiums for cargo being carried through the vulnerable water channel that helps slash the maritime distance between continental Europe and Asia. Cancellation notices in relation to war, terrorism, and piracy risks in the surrounding areas of the Indian Ocean, the Gulf of Aden and the Southern Red Sea have been sent out effective January 6. - economic times

🍒         Group health policies lead the way as medical inflation, retail premiums bite : As medical inflation surges along with rising health insurance premiums, employer group insurance has emerged as the fastest-growing segment of health insurance, according to the industry information provided in the draft red herring prospectus of Medi Assist, India's largest insurance third-party administrator (TPA) that is gearing up for its IPO. As per the 'Independent Market Assessment of Health Benefits Administrators in Indian Health Insurance Industry' report by Frost & Sullivan commissioned by Medi Assist, there has been a 31% jump in insurance penetration post-Covid aided by a significant jump in insurance penetration in group policies during the pandemic. - economic times

🍒         India bonds set to be included in the Bloomberg emerging market index : India government’s Fully Accessible Route (FAR) bonds is set to be included in the Bloomberg Emerging Market (EM) Local Currency Index. This will be phased in over a 5-month period starting in September 2024. As a result, the Indian FAR bonds will be included in the EM Local Currency indices with an initial weight of 20 per cent of their full market value in September 2024. The weight of FAR bonds will be increased in increments of 20 per cent of their full market value every month over the 5-month period ending in January 2025, at which point they will be weighted at their full market value (100 per cent) in the indices. - Business Line.

🍒         Fuel credit cards top in tier 2-3 cities; demand for travel and e-commerce cards rises : Fuel credit cards were the most in demand in Tier 2 and Tier 3 cities in 2023 due to rising fuel prices, whereas demand for travel and e-commerce credit saw a substantial increase during the year. “Due to rising fuel expenses, fuel credit cards have gained popularity in Tier-2 and Tier-3 cities and remained in maximum demand, witnessing 17 per cent y-o-y growth in 2023,” as per a consumer study by fintech platform ZET. These cards typically provide cashbacks, rewards points, or discounts on fuel purchases, making them attractive to a wide range of consumers, including those residing in smaller cities and towns, the report said, adding that BPCL SBI, Indian Oil Kotak, and IDFC HPCL were the three most popular credit cards in this category. - Business Line.

🍒         G-Sec prices end a shade higher on expectation of more foreign investments due to proposed bond index inclusion : Government Security (G-Sec) prices ended a shade higher on Tuesday as Bloomberg Index Services’ proposal to include Indian bonds, which are under the ‘Fully Accessible Route’ (FAR), to be part of its Emerging Market (EM) local currency index from September 2024 could attract foreign investments.  The aforementioned proposal comes about three months after JP Morgan’s announcement on India’s inclusion, starting June 28, 2024, in its widely tracked Government Bond Index-Emerging Markets (GBI-EM). - Business Line

🍒         Securitisation volumes on path to cross ₹2-lakh crore in FY24: CARE : The securitisation market is expected to touch a record of ₹2-lakh crore in FY24 led by significant expansion in credit growth, which is expected to boost securitisation volumes in Q4 FY24, according to CARE Ratings. Quarterly securitisation market volume has remained in the range of ₹42,000-45,000 crore so far in the three quarters of FY24,  with total securitisation volumes reaching ₹1.01-lakh crore in H1 FY24, excluding erstwhile HDFC. For the nine-month period ended December 2023, volumes were at ₹1.44-lakh crore, registering a growth of 27 per cent yoy. Excluding HDFC, this implies a growth rate of 52 per cent for originators other than HDFC, CARE said. - Business Line.

🍒         NCLAT sets aside insolvency proceedings against Asian Hotels West : The National Company Law Appellate Tribunal (NCLAT) on Tuesday set aside insolvency proceedings against Asian Hotels (West), which operates Hyatt Regency, Mumbai. The appellate insolvency tribunal has also accepted the proposal submitted by former promoters and directors of the company under Section 12A of the Insolvency & Bankruptcy Code. NCLAT said the decision of lenders of Asian Hotels (West) was "arbitrary in not approving 12A Proposal", which offered to pay the entire debt of financial creditors as well as all other creditors. "The Proposal under 12A submitted by the Appellant (former promoters) dated August 11, 2023 as revised on October 4, 2023 is accepted. The CIRP (Corporate Insolvency Resolution Process) is closed," said the NCLAT order. The NCLAT order further said the order passed by the New Delhi Bench of the National Company Law Tribunal (NCLT) "dated September 16, 2022, admitting Section 7 application is set aside." - moneycontrol

🍒         Sensex, Nifty end marginally higher; Adani stocks gain, ZEEL tumbles : Sensex, Nifty updates on 09 January 2024| After gaining nearly 0.9%, equity benchmarks BSE Sensex and NSE Nifty had lost the momentum to end the session with marginal gains. While BSE Sensex gained 30.99 points or 0.04% to end at 71,386.21, NSE Nifty advanced 39.30 points or 0.18% to 21,552.30. Zee Entertainment Enterprises tumbled over 10% during the day on the reports related to Zee-Sony merger deal. However, the company has clarified that the media reports are factually incorrect and it is working towards the completion of the deal. Within the Nifty pack, Hero MotoCorp, Adani Ports, SBI Life and Adani Enterprises were the top gainers, while Nestle India, Britannia Industries and Asian Paints were the major laggards. - Business Line.

🍒         Rupee rises 6 paise to 83.08 against US dollar in early trade : The rupee stayed on upward track for the third straight session and rose 6 paise to 83.08 against the US dollar in early trade on Tuesday amid a weak American currency and favourable crude oil prices. At the interbank foreign exchange, the domestic currency opened strong at 83.07 and rose to the level of 83.04 against dollar in initial deals. The local unit then traded at 83.08 against the greenback, registering a rise of 6 paise from its previous close. - Business Line.

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