Page 37 - Banks

Banks to set up portal with real-time information to handle digital frauds

The portal will help lenders connect, and stop and trace funds being transferred from one account to multiple accounts

Govt calls meeting of states, bank officials on 'PM Vishwakarma' on Monday

The government has called a meeting of senior officials from states, public sector banks and State Level Bankers Committee (SLBC) on Monday, to discuss the implementation of the Rs 13,000 crore 'PM Vishwakarma' scheme, which seeks to support traditional artisans and craftsman. The scheme, which would be launched on September 17, would be implemented by three ministries -- MSME, Skill Development and Finance. The target is to enrol as many as 3 lakh beneficiaries in the current fiscal, an official said. "The Skill Ministry has called a meeting on August 28, in which principal secretaries of states, managing directors of banks, and SLBC representatives have been invited. "The meeting will discuss the roadmap for implementation of the scheme and process of identification of beneficiaries of PM Vishwakarma scheme," the official said. Under the scheme, the skilled workmen will be given training for 4-5 days to upgrade their skill, following which they will become eligible for loan. "Ou

Indian banks' dividend to rise to at least 7-year high in FY24: S&P report

MUMBAI (Reuters) - Indian banks' aggregate dividend payout to shareholders is set to rise to its highest level in at least seven years in 2023-2024, helped by strong business metrics and healthy credit growth, a report from S&P Global Market Intelligence showed.

First time in 4 years, MFIs overtake banks in microlending with 40% share

After a gap of four years, standalone MFIs overtook banks in microlending in 2022-23 with a 40 per cent share of loans in the country, up from 35 per cent in the last year, according to an analysis. On the back of recovery after being hit hard during the pandemic when collections and disbursals plunged, MFIs have clawed back from 32 per cent share in FY20, which declined further to 31 per cent in FY21 before improving to 35 per cent in FY22. As of March 2023, MFIs held a 40 per cent share of the overall microfinance loans, registering a 37 per cent growth, compared to banks' 34 per cent, down 600 bps from the previous fiscal, Care Ratings said in a note on Wednesday. Almost all banks have an MFI book as part of meeting their priority lending targets. Banks controlled 34 per cent of the industry's Assets Under Management (AUM) in FY23 -- down from 40 per cent in FY20 and FY22. Their share had peaked at 44 per cent in FY21. The microfinance industry grew by 37 per cent in FY23 due t

Liquidity continues to be in deficit, banks expect RBI repo auction

Liquidity in system went into deficit mode on Tuesday for the first time in this Financial Year

India Post Payments Bank plans to double income in FY24: MD Venkatramu

India Post Payments Bank (IPPB) reported a net profit of 200 million rupees in 2022/23, Venkatramu said, as compared with a loss of 1.6 billion rupees in the previous year

UBS poised to keep Credit Suisse's domestic bank business, drop brand

The Zurich-based lender has set a target of winding down the Credit Suisse brand in the country, people familiar with the matter said

Banks, finance companies expect robust festive season credit offtake

Little room for rate-cut wars; tight screening to stay

Most corruption complaints against railways, bank officials in 2022: CVC

The highest number of corruption complaints last year were against employees of the Union home ministry, followed by those working for the railways and in banks, according to the Central Vigilance Commission's latest annual report. In total, 1,15,203 such complaints were received for all categories of officers and employees across central government departments and organisations in 2022, it stated. Of these, according to the report, 85,437 were disposed of and 29,766 were pending -- 22,034 for more than three months. The Central Vigilance Commission (CVC) has prescribed a time-limit of three months for chief vigilance officers, who act as a distant arm of the probity watchdog, to examine complaints, an official said. While the home ministry received 46,643 complaints against its employees last year, 10,580 were received by the railways and 8,129 by banks, according to the report. Out of the total complaints against home ministry employees, 23,919 were disposed of and 22,724 were ..

Give fixed rate option on EMI-based loans while resetting rates: RBI

The RBI on Friday directed banks to allow individual borrowers paying loans through EMIs to opt for fixed interest rate system or extension of loan tenor, a move aimed at preventing loanees from falling into the trap of negative amortisation, in wake of rising interest rate. The interest rates have moved northward since May 2022 after the central bank started raising the benchmark lending rate (repo) in a bid to check inflation following the outbreak of the Russia-Ukraine war. As a result of 250 basis points increase in the repo rate, a large number of borrowers faced negative amortisation, wherein the Equated Monthly Instalment (EMI) works out to be less than the interest obligation, resulting in persistent increase of the principal amount. RBI said that at the time of sanction of EMI-based floating rate personal loans, banks and NBFCs should take into account the repayment capacity of borrowers to ensure that adequate headroom is available for elongation of tenor and/ or increase

Provide borrowers option to switch to fixed interest rates: RBI to banks

The Reserve Bank on Friday asked banks and other lenders to provide individual borrowers an option of switching over to a fixed rate at the time of reset of interest rates. In a notification, it said in respect of EMI-based floating rate personal loans, in the wake of rising interest rates, several consumer grievances related to elongation of loan tenor and/or increase in EMI amount, without proper communication with and/or consent of borrowers have been received. In order to address these concerns, RBI asked entities regulated by it to put in place an appropriate policy framework. "At the time of sanction, REs shall clearly communicate to the borrowers about the possible impact of change in benchmark interest rate on the loan leading to changes in EMI and/or tenor or both. Subsequently, any increase in the EMI/ tenor or both on account of the above shall be communicated to the borrower immediately through appropriate channels," RBI said. It further said that at the time of reset o

Banks' lending to NBFCs soars 35% to Rs 14.2 trn in June: Care ratings

Banks' lending to non-banking finance companies (NBFCs) rose by 35.1 per cent to Rs 14.2 lakh crore in June, a report said. Credit exposure of banks to NBFCs rose by a robust 35.1 per cent on-year to Rs 14.2 lakh crore in June, indicating non-banking finance firms' decreased reliance on international borrowings. This also pushed up NBFCs' share in overall credit from 8.5 per cent in June 2022 to 9.9 per cent in the reporting month, according to Sanjay Agarwal, a senior director with Care Ratings. However, the report noted that the merger of HDFC with HDFC Bank, effective July 1, will lead to a reduction in the share and also the exposure of banks to NBFCs, as HDFC's bank borrowings will undergo a temporary reclassification, resulting in a shift of exposure to HDFC Bank. Meanwhile, mutual funds' debt exposure to NBFCs, including through commercial papers (CPs) and corporate debt, also increased 14.5 per cent to Rs 1.62 lakh crore in June, it said. According to the report, MF exposur

In fresh blow to China, shadow bank misses payments of investment products

Zhongrong International Trust has short-term liquidity troubles, the company's chief compliance officer Wang Qiang told dozens of investors at the company's headquarters in Beijing

Margin trends

Bank profits will moderate in coming quarters

Indian banks' operating environment strengthens as Covid risks ebb: Fitch

With banks shoring up their capital buffers and cleaning up their balance sheets following the pandemic, their gross non-performing asset ratio has fallen to a 10-year low of 3.9% as of March 2023

'Bad bank' sees loan transfers dwindle on valuation, liability woes: Report

NARCL, which started in July 2021 to buy 2 trillion rupees in bad loans, has bought 213.5 billion rupees of such loans as of July 17, according to a government statement to parliament

UBS ends Swiss govt's rescue packages that aided Credit Suisse takeover

UBS said Friday it has shut down rescue packages agreed with Swiss authorities that made available up to 200 billion Swiss francs (about USD 230 billion) to help shepherd through its takeover of ailing rival Credit Suisse and avert an international banking crisis. The Zurich-based banking giant, which completed the takeover on June 12, said it had moved to voluntarily terminate" rescue programmes that aimed to help mop up billions of losses and provide liquidity to the banks as they moved forward on the complex deal. UBS said it had repaid 50 billion francs in loans from the Swiss National Bank and 100 billion francs in liquidity support from the Swiss government, while ending a 9 billion franc loss protection agreement with the government. In total, UBS also paid some 730 million francs in commitment fees and risk premiums to Swiss authorities, comprised of 200 million to the government and 530 million to the national bank. Swiss authorities and UBS announced the hastily arranged

10% incremental CRR temporary, will drain out Rs 1 trn from system: RBI

Short-term rates on money market instruments like call money rates, treasury bills and commercial paper are likely to increase by 15-20 bps in the near term: ICRA

RBI to introduce framework to switch from floating to fixed interest rates

The Reserve Bank on Thursday said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate, a move that would provide relief to borrowers of home, auto and other loans reeling under the impact of high interest rate. Unveiling the bi-monthly monetary policy, Reserve Bank Governor Shaktikanta Das said under the framework, to be put in place shortly, the lenders will have to clearly communicate with the borrowers about tenor and EMI. "The supervisory reviews undertaken by the Reserve Bank and the feedback and references from members of public have revealed several instances of unreasonable elongation of tenor of floating rate loans by lenders without proper consent and communication to the borrowers," he said. To address the issue, it is proposed to put in place a proper conduct framework to be implemented by all Regulated entities to address the issues faced by borrowers, he said. "The framework envisages that lenders should ..

Banks to maintain 10% additional CRR from Aug 12 as temporary measure: RBI

Action is part of central bank's efforts to reduce surplus liquidity, it says after monetary policy announcement