BANKING

Kotak Mahindra Bank is heavily investing in technology to meet RBI expectations and enhance competitiveness. CEO Ashok Vaswani aims for the bank to become a top three private sector player by 2030. The bank will look at both organic and inorganic growth opportunities, focusing especially on technology and profitable growth.

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BANKING

The Reserve Bank of India has voiced concerns about small finance banks' over-reliance on high-cost term deposits and potential defaults due to inadequate credit underwriting. RBI also highlighted cyber threats, poor customer service, and high charges, stressing the need for robust underwriting to mitigate risks.

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BANKING

Deposit growth is currently outpacing credit expansion. Although a policy rate cut is expected in the second half of the fiscal year, bank deposit rates are likely to stay high for now. This is due to the slow pace of deposit mobilisation and the need for capital to fund private capital expenditure, which is on the rise.

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BANKING

Credit and debit cards offering discounts on travel, experiences, and lifestyle are gaining popularity among affluent and young customers. Banks like Bank of Baroda, HDFC Bank, and HSBC are partnering with travel companies to provide exclusive offers. The trend is driven by rising demand for unique experiences and live events.

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BANKING

India's smaller towns and rural areas are seeing a rise in credit-driven consumption due to increased consumer financing and new bank accounts under the Pradhan Mantri Jan Dhan Yojana. This trend is evident in the purchase of two-wheelers, electronics, and smartphones, with finance companies expanding their reach into these markets.

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BANKING

The Ministry of Women and Child Development will soon launch a revamped portal under the Vatsalya Mission, integrating various child protection services. This initiative aims to streamline emergency responses and improve coordination. The national child helpline has also been integrated with emergency services, enhancing response times. Specialized institutions for children with disabilities are being supported, along with mental health training for government officers.

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BANKING

The State Bank of India (SBI) plans to introduce innovative financial products, including a mix of recurring deposits and Systematic Investment Plans (SIP), to attract more depositors. SBI's Chairman, C S Setty, emphasized the need to meet evolving customer needs and highlighted the bank's focus on balanced interest rates and superior customer service.

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BANKING

Bank of America has placed two bankers in India on administrative leave amid an internal investigation following a whistleblower complaint. The complaint alleges that the bankers tipped off certain investors about upcoming secondary offerings, allowing them to profit from non-public information. The investigation focuses on a $200-million stock sale for Sun Life in March.

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BANKING

Many Asian countries, including India, are moving away from older payment methods like ACH in favor of real-time systems such as UPI. JP Morgan Chase is investing in distributed ledger technology and partnering with ONDC to support this shift and enhance e-commerce and financial services.

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BANKING

HDFC Life Insurance plans to raise Rs 1,500 crore through non-convertible debentures after board approval. The NCDs will carry an 8.05% coupon rate and a 10-year term, with allotment set for October 9. This move follows a drop in the company's solvency ratio and aims to bolster financial stability.

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BANKING

Axis Bank has launched a Corporate Credit Card Suite for startups under its New Economy Group. The cards aim to streamline travel, official expenses, and vendor payments. The suite includes an executive corporate credit card for founders and a purchase reward credit card for expense management. Axis Bank also announced a partnership with the Tech Entrepreneurs Association of Mumbai.

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BANKING

India is poised to become one of Citi's top three markets within 5-7 years, driven by the expansion of its services business and increasing global investments by domestic firms. Currently the fourth largest market, India shows significant growth potential in manufacturing, exports, and digital payments.

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BANKING

Banking system deposit growth has surpassed credit growth over the past 8 months, with deposits increasing by Rs. 14.7 lakh crore to Rs. 215.5 lakh crore and credit expanding by Rs. 10.9 lakh crore to Rs. 170.5 lakh crore as of September 6, 2024. Personal loans and MSME demand have supported credit growth.

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BANKING

Indian banks have shown strong asset quality metrics in the June quarter of 2024. Gross non-performing loans fell by 15.2% year-on-year to Rs 4.57 lakh crore, with the GNPA ratio reducing to 2.8%. Public sector banks led the improvement, while private sector banks saw a rise in bad loans due to a merger and seasonal factors.

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BANKING

InCred Financial, backed by KKR, has appointed Gaurav Maheshwari as its new chief financial officer. Maheshwari, previously with Standard Chartered Bank and Altico Capital, brings over 27 years of experience. This move aligns with InCred's plans to strengthen its leadership team. The company offers retail, MSME, and education loans and became a unicorn in late 2023.

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BANKING

A 70-year-old retiree faces a dilemma over renewing his ₹73,000 health insurance policy or relying on the government's Ayushman Bharat scheme, which offers ₹5 lakh free coverage for seniors. There are many such cases. Rising private insurance premiums and limitations of government schemes are troubling many senior citizens across India.

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BANKING

The Enforcement Directorate is investigating employee stock options issued to Religare executive chairperson Rashmi Saluja and other officials for potential illegality. The probe focuses on Esops acquired at lower prices, allegedly resulting in unlawful gains. Saluja denies the charges, asserting compliance with company policies.

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BANKING

HDFC Bank, India's largest private sector lender, may see its loan growth dip below 10% in the September quarter due to plans to sell Rs 70,000 crore of loans and the base effect from its merger with HDFC Corporation. The bank is also focusing on reducing its loan to deposit ratio and improving margins.

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BANKING

Default rates in credit cards and unsecured loans are rising, with losses in credit cards nearing 6%. Young millennials are reportedly defaulting without revolving the loan. The RBI has flagged risks in the unsecured segment and taken measures to curb growth. Asset quality concerns also persist in the MFI space.

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BANKING

In an interview with ET, Jamie Dimon, CEO of JPMorgan, emphasized that geopolitics will shape the global economy more than finance. He highlighted the resilience of the US dollar and discussed interest rate movements in the US and Japan. Dimon also addressed geopolitical risks, oil prices, and India's economic progress under PM Modi's leadership.

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BANKING

Spandana Sphoorty Financial has sold stressed loans worth Rs 304.41 crore to an asset reconstruction firm for Rs 16.74 crore. The sale, approved by the board, includes written-off loans and was conducted through an open bid method. The company's gross non-performing assets ratio rose to 2.6% as of June-end, impacting its net profit.

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BANKING

Data from TransUnion CIBIL indicates an improvement in credit culture, with the share of prime-rated borrowers rising to 55% by June 2024. However, retail credit growth has moderated as banks and NBFCs tighten credit supply. Home loans and credit cards saw significant contractions, while personal loans grew modestly.

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BANKING

REC Ltd has successfully raised $500 million through a five-year bond, priced at 4.78%, attracting global investors. This could pave the way for more Indian companies to enter the bond market. Shriram Finance is also expected to raise a similar amount soon. The transaction was managed by several international banks.

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BANKING

L&T Finance's CEO Sudipta Roy discusses the company's cautious approach amid rising delinquencies in microfinance and unsecured loans. Despite challenges, L&T Finance aims for a ₹2 lakh crore balance sheet by 2024 and focuses on diversifying liabilities and improving customer acquisition. The company has no current plans to become a bank.

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BANKING

A study by RBI economists reveals that priority sector lending (PSL) improves banks' asset quality, especially after the asset quality review. The research, covering data from March 2006 to March 2023, highlights that PSL growth does not deteriorate asset quality and emphasizes the role of PSLCs in enhancing niche sector lending.

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BANKING

The performance of NBFCs has seen improvement since 2022 after the implementation of scale-based regulations. A study by RBI economists highlights the need for vigilance in cyber-security and climate risks. Gross NPAs have declined, and profitability indicators have improved. The sector remains resilient with double-digit credit growth and adequate capital.

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BANKING

The Finance Ministry has urged banks to implement effective monitoring and oversight mechanisms for managing pending cases in Debt Recovery Tribunals (DRTs). During a meeting, best practices were discussed to optimize recovery. Banks are advised to define policies for small and high-value cases and adopt the new DRT Regulations 2024 for more efficient processes.

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BANKING

The Union Finance Ministry reports a significant surge in digital payments, reaching Rs 1,669 lakh crore in the first five months of FY 2024-25. The volume of transactions hit 8,659 crore. UPI remains central to this growth, with its transaction value rising dramatically. India's digital payment systems are also expanding globally.

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BANKING

The Reserve Bank of India has advised banks to seek legal remedies in disputes with the CBI over fraud cases. This follows the Supreme Court's ruling that borrowers must be given a hearing before being classified as fraud. Banks argue this ruling should not apply retrospectively, while the CBI seeks clarity from the Supreme Court.

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BANKING

The Reserve Bank of India has extended the tenure of IDFC First Bank's Managing Director V Vaidyanathan for another three years, effective from December 19, 2024, to December 18, 2027. The bank's board had earlier approved his re-appointment following the expiry of his current term in December 2024. Vaidyanathan has been leading the bank since December 2018.

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BANKING

Finance Minister Nirmala Sitharaman emphasised the potential of Indian banks leveraging UPI's digital footprints to expand their balance sheets. She highlighted UPI's global reach and its significant role in digital payments. Sitharaman also urged banks to adopt technology for risk mitigation, customer service, credit assessment, and fraud detection.

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BANKING

Customer data from India's largest health insurer, Star Health, has been leaked and is accessible via Telegram chatbots. The data includes sensitive information such as medical reports and personal details. Star Health has reported the breach to authorities and claims that sensitive customer data remains secure despite the incident.

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BANKING

HDFC Bank, India's largest private lender, aims to finalize a sale of loans worth over 90 billion rupees by the end of September. The bank is issuing pass through certificates backed by car loans, with provisional AAA(SO) ratings from India Ratings. The sale will help manage the bank's loan growth and deposit pressures.

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BANKING

PTCs are issued across three tranches- with series A1 having an issue size of Rs 3,500 crore and maturing in 24 months, series A2 of Rs 1,800 crore and maturing in 34 months and series A3 of Rs 3762 crore for 60 months.

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BANKING

Godrej Capital, the financial services arm of the Godrej Group, plans to enter the affordable housing loan segment and aims to grow its assets under management to Rs 17,000 crore by 2024. The company targets Rs 30,000 crore by March 2026 and Rs 50,000 crore by March 2028.

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BANKING

BNP Paribas India has opened a new dormitory for female residents at Adhar, an NGO that supports intellectually disabled adults. The facility will accommodate over 55 women and 18 staff members, enhancing Adhar's mission of providing comprehensive care. This initiative reflects BNP Paribas India's commitment to improving lives.

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BANKING

HDFC Bank is seeking fintech partnerships to develop tech solutions for loans, payments, customer service, and small business banking. This strategy aims to leverage the strengths of both entities to scale its business. Successful collaborations include PayzApp and Vyapaar platforms created with Zeta and Mintoak.

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BANKING

The Reserve Bank of India's Governor has sparked debate by questioning whether deposits or advances come first in banking. The discussion centers on the impact of personal savings flowing into the stock market, affecting bank deposit growth. Experts argue that loans create deposits but not liquidity, emphasizing the need for stable deposits for credit growth.

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BANKING

State Bank of India chairman CS Setty emphasised the importance of consistent performance for stakeholders, with technology driving growth. Despite fluctuations in profit growth, SBI aims to ensure stability and reliability. Setty highlighted the role of customer service, reach, and convenience in attracting deposits, beyond just competitive rates.

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BANKING

The government is considering amending the SARFAESI Act, 2002, to allow banks to hold security interest in shipping vessels, removing special exemptions for fishing vessels. This change aims to fast-track loan recovery processes and address ambiguities that delay recoveries. Other debt recovery laws are also under review for quicker resolution of non-performing loans.

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BANKING

Challa Sreenivasulu Setty, the new chairman of State Bank of India, is aiming to leverage the bank's extensive network and brand to attract more deposits while managing risks in infrastructure financing. He emphasises technology, customer service, and cyber security as key priorities to enhance productivity and maintain consistent performance.

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BANKING

HDFC Bank has implemented ESG-based risk assessment for wholesale banking loans to promote sustainable finance. Loans exceeding Rs 100 crore undergo detailed environmental and social assessments. The bank aims to increase income for marginal farmers and become climate-neutral by 2032, while also raising green deposits aligned with RBI guidelines.

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BANKING

Chief Economic Advisor V Anantha Nageswaran emphasized the need for banks to adapt to changing customer preferences and market dynamics. Speaking at an event by Indian Bank, he highlighted agriculture's role in economic growth and praised the bank's MSME Prerana programme. Indian Bank CEO S L Jain appreciated Nageswaran's insights on the economy and banking sector.

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BANKING

Mahindra & Mahindra Financial Services plans to expand its mortgage loan business, offering housing finance, top-up loans, and home improvement loans. The Mumbai-based NBFC will also join the government's affordable housing schemes. The company aims to invest 200-300 million rupees over the next year for this expansion.

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BANKING

The NCLAT has issued a notice to IndusInd International Holdings Ltd over a plea by Reliance Capital's lenders seeking interest on delayed payments. The lenders want modifications to an earlier order and are asking for interest on the upfront cash amount until August 2024. IIHL must respond within two weeks.

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BANKING

Reserve Bank of India Governor Shaktikanta Das, speaking at the Bretton Woods Committee’s Future of Finance Forum in Singapore, expressed concerns about banks with significant commercial real estate exposure, noting that they could become targets for short sellers.

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BANKING

In March 2020, a State Bank of India-led consortium bailed out Yes Bank by infusing Rs 10,000 crore-a move primarily aimed at protecting depositors. SBI, which acquired a 49% stake with a three-year lock-in, now holds 24% after Yes Bank raised money through a follow-on public issue and the preferential issue of shares to private equity investors Carlyle and Advent International.

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BANKING

The National Bank for Financing Infrastructure and Development (NaBFID) may offer partial credit enhancement and first loss default guarantees to infrastructure companies. This could improve credit ratings and attract long-term investors. NaBFID is also considering offering credit default swaps to boost investor confidence, especially in foreign markets.

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BANKING

HDFC Bank, India's largest private sector lender, is negotiating with global banks like Barclays, Citigroup, and JPMorgan to sell up to $1 billion in loans. This move aims to align its credit book with deposits amid regulatory pressure. The bank's credit to deposit ratio has risen significantly following its merger with Housing Development Finance Corp.

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BANKING

Paytm's Vijay Shekar Sharma announced during the company's Annual General Meet that they will reapply for a payment aggregator license to RBI. The fintech firm received approval from the finance ministry to invest in its payment services business, allowing them to resubmit their application for the license.

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BANKING

Several small finance banks have increased their fixed deposit rates to over 8% for two-year tenures, competing with major banks like SBI and HDFC Bank. This move comes as alternative investment options grow, drawing funds away from traditional deposits. Some finance companies are also offering competitive rates above 8% on fixed deposits.

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BANKING

The Reserve Bank of India plans to maintain a 5% run-off factor on digitally linked deposits, despite industry requests for a lower buffer. This move aims to manage risks from quick withdrawals via internet or mobile banking, potentially impacting banks' liquidity and increasing demand for government bonds.

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BANKING

LGT Wealth India has appointed Poonam Mirchandani as the managing director of its wealth planning & family solutions division, effective August 2024. She will focus on advising family business owners, promoters, and high-net-worth individuals, expanding the firm's offerings in succession and estate planning, international wealth management, global mobility, and philanthropy.

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BANKING

NaBFID is in talks with the RBI to reduce capital requirements for financial institutions offering credit enhancement. This move aims to make the product more attractive and accessible for corporates. NaBFID also plans to develop securitisation of infrastructure assets and create a data repository for the sector.

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BANKING

Analjit Singh's family office has repaid debts worth ₹5,500-6,000 crore taken from KKR & Co a decade ago for investments in property and hospitality ventures. The final tranche of ₹1,200 crore was cleared last week using funds from a 3.2% stake sale in Max Financial, reducing the family's holding to 3.2%.

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BANKING

Carlyle, Premji Invest, and Mizuho are vying to acquire a controlling stake in Avendus Capital from KKR. The investment bank, valued at Rs 5,500-6,000 crore, is known for its strong presence in M&As and public market transactions. Final offers are expected soon.

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BANKING

The life insurance industry experienced significant growth in new business income in August, driven by the state-run Life Insurance Corporation. The industry collected ₹32,644 crore in total premiums, marking a 22% increase from the previous year. Private insurers also saw growth, although new rules on surrender value and agent commissions may impact future sales.

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BANKING

Iffco Tokio General Insurance Company has appointed Subrata Mondal as its new managing director and CEO. Mondal, who has been with the company since 2001, replaces H O Suri. With over 36 years of experience in the insurance industry, Mondal aims to continue providing customer-centric insurance solutions while embracing new opportunities and challenges.

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BANKING

A leaked letter from Union Minister Nitin Gadkari to Finance Minister Nirmala Sitharaman has sparked discussions on removing GST from insurance premiums. The GST Council, chaired by Sitharaman, will meet today to discuss this and other topics like rate rationalisation and online gaming. Gadkari argues that taxing life insurance premiums is unfair and deters growth in the sector. However, several states oppose the proposal due to potential revenue losses. The meeting will explore options to balance consumer benefits and state revenues.

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BANKING

RBL Bank has launched the 'Xtra Credit Card' in partnership with Indian Oil Corporation, offering customers up to 8.5% savings on fuel purchases. The bank expects a moderate growth of 12-15% in its credit card portfolio this fiscal year. The card will be issued via the Mastercard network and offers significant fuel points for every ₹100 spent.

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BANKING

Jio Financial Services and BlackRock Advisors Singapore have formed a joint venture named Jio BlackRock Investment Advisers Private Limited. Jio Financial will invest Rs. 3 crore in the venture. The company has received approval to increase foreign investment to 49%. This move aims to expand its fintech operations in India.

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BANKING

The Deposit Insurance and Credit Guarantee Corporation (DICGC) has introduced Daava Soochak, an online tool for depositors to track their claim status. This tool allows users to check claims by entering their registered mobile number. The initiative is part of DICGC's efforts to enhance services for depositors of failed banks.

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BANKING

Education loans for overseas courses are set to grow rapidly for non-banking financial companies (NBFCs) due to increasing demand for higher education. Crisil Ratings projects a 40-45% rise in assets under management, reaching over Rs 60,000 crore this fiscal. Despite country-specific concerns, asset quality remains stable.

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BANKING

The GST Council is set to discuss reducing the high GST on health and life insurance policies. While there's consensus on lowering the tax for life insurance, concerns remain about health insurance. States worry that insurers may not pass on the savings to consumers, and there's no active anti-profiteering body to ensure this happens.

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BANKING

AU Small Finance Bank and United India Insurance Company have announced a strategic partnership to offer general insurance solutions to the bank's customers. This collaboration aims to provide reliable and affordable insurance options across various categories, leveraging UIIC's extensive network and AU SFB's expanding infrastructure, covering 21 states and 4 union territories.

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BANKING

India aims to achieve a $30 trillion GDP by 2047, requiring significant growth in the financial services sector, especially banks. A report by BCG, FICCI, and Indian Banks’ Association highlights the need for $4 trillion in bank capital and emphasizes financial inclusion, digitization, and emerging technologies as key drivers for this growth.

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BANKING

“A large number of people are breaking out of the real poverty trap, so they’re able to start focusing on providing for the future,” Sanlam Chief Executive Officer Paul Hanratty said in an interview Thursday. “India is really at that point where a huge chunk of the population are now able to save and invest for the future.”

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BANKING

Kotak Mutual Fund CEO Nilesh Shah suggests that bank deposits could grow faster if the government parks short-term funds with commercial banks instead of the Reserve Bank of India. Currently, government funds with the RBI earn no interest and do not enter the banking system until spent by the government.

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BANKING

Banks in India are offering higher interest rates on deposits to attract savers, with more than two-thirds of deposits earning 7% or above by June 2024. This shift is driven by the need to meet rising credit demand, which continues to outpace deposit growth.

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BANKING

The committee is not in favour of a blanket GST exemption on life and health insurance premiums, said people aware of deliberations. It's likely to give a detailed report on the revenue impact under different rate scenarios for insurance products to the GST Council, which is scheduled to meet on September 9.

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BANKING

The number of credit cards in India is projected to reach 200 million by FY28-29, growing at a CAGR of 15%, according to a PwC report. The credit card industry has doubled its issuance over the past five years and is expected to continue this trend. However, debit card usage has declined due to the rising popularity of UPI and less attractive reward programs.

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BANKING

Banks have an advantage because of CASA, but CASA comes with the requirement of CRR and SLR. So it ends up balancing itself. Banks have stable sources of retail money and large deposits and it's also cheaper, but the cost to raise it (retail money) is large. In HFCs we have wholesale money, which may be expensive but the cost of raising it also lower. We also have ‘Bajaj’ brand advantage as compared to other HFCs, says Sanjiv Bajaj, Chairman, Bajaj Housing Finance.

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BANKING

"The issue was discussed at a meeting (last month) with the Advisory Board for Banking and Financial Frauds (ABBFF), and it was decided that it will be made mandatory for the lenders to check this list before dealing with such entities and further update it on a real-time basis," a senior bank executive told ET.

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BANKING

The Competition Commission of India has approved Ontario Teachers Pension Plan Board's acquisition of additional units in Highway Infrastructure Trust and Citrine Inclusion's stake in Utkarsh CoreInvest Ltd. These approvals are necessary for deals exceeding certain thresholds to ensure fair competition and prevent unfair business practices.

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BANKING

Bajaj Finserv chairman Sanjiv Bajaj aims to establish Bajaj Housing Finance as a leading mortgage company, akin to HDFC, following HDFC's merger with its bank subsidiary. The company plans a Rs 6,560 crore IPO to expand and meet RBI's listing mandate. Focus areas include retail home loans, developer financing, and tech-enabled customer ease.

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BANKING

Russia's trade with India is thriving, with Sberbank handling up to 70% of Russian exports to the country. Trade between the two nations nearly doubled to $65 billion in 2023. Despite Western sanctions affecting other markets, Sberbank has faced no operational issues in India. The bank is actively using Indian payment systems and sees no rupee surplus problems, thanks to increased Indian exports to Russia.

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BANKING

In recent feedback to the RBI, banks have suggested that the regulator impose an additional "run-off factor" of 2% to 2.25% as against the 5% increase prescribed in a recent draft guideline, sources aware of the development told ET. "Some banks have also proposed a gradual increase of three years in maintaining the liquid stocks under the new LCR (Liquidity Coverage Ratio) norms. They have requested a similar proportion of requests for other categories," a banker said on condition of anonymity.

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BANKING

Marc-Andre Blanchard, EVP and global head of sustainability at CDPQ, emphasized the importance of sustainability in driving profits and building businesses. CDPQ, with $452 billion in assets, focuses on sustainable investing to generate returns and foster economic development, particularly in low-carbon sectors, while actively engaging with portfolio companies and stakeholders.

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BANKING

PNB Housing Finance, backed by Carlyle, aims to grow its affordable loan book to ₹15,000 crore by FY27. Currently, the affordable housing sector contributes ₹2,500 crore. The lender plans to shift focus to high-yielding segments and expects its overall loan book to grow by 18% in the next three years.

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BANKING

Lenders to debt-laden Reliance Capital have accused Hinduja Group's IIHL of delaying the resolution plan approved by NCLT for Rs 9,861 crore. IIHL awaits approval from India's DIPP. NCLT has directed RBI and DIPP to expedite this process, with a hearing set for September 19, 2024.

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