Bank of Baroda board to finalize tranche of debt instruments for affordable housing

🍒     Bank of Baroda board to finalize tranche of debt instruments for affordable housing; stock trades flat : Shares of Bank of Baroda Limited traded flat, gaining a marginal 0.2 percent to Rs 198 in morning trade on November 16, extending gains for the seventh trading session in a row on the bourses. The company declared that the lender's capital raising committee will discuss and approve the issuance of debt instruments to raise tier I and tier II capital.  "The meeting of the capital raising committee of our bank is scheduled to be held on November 18 to discuss and finalize the issuance of Tier I and Tier II debt capital instruments and long-term bonds for the financing of infrastructure and affordable housing within the board-approved capital raising plan", the bank said in an exchange filing on November 15. - Moneycontrol.

🍒     UCO Bank seeks CBI help in Rs 820 crore money transfer mess : State-run UCO bank has sought the intervention of the apex probe agency, the Central Bureau of Investigation (CBI), in the Rs 820 crore money transfer case, where valid transfers were erroneously rejected yet the money was credited to both the sender and the recipient, said a top official to Moneycontrol. "We have approached the CBI, and very soon we will  hear from them on this matter,” the official said on condition of anonymity. “We are seeking their help in the matter, where the bank erroneously  rejected valid transfers from customers of 6-7 other banks, and credited the money both to the sender and the recipient. The bank has not been able to recover the full amount," added the official. An email sent to CBI seeking its response on the matter remained unanswered till the filing of this story. - Moneycontrol.

🍒      UCO Bank IMPS issue: Bank says 79% amount recovered from recipients’ accounts : State-owned UCO Bank on Thursday said the bank has blocked the recipients’ accounts and has been able to retain and recover around Rs 649 crores out of Rs 820 crores which is about 79 per cent of the amount. The bank further said that it has initiated necessary actions to recover the balance amount of Rs 171 crore. This comes after the bank of Wednesday temporarily disabled its IMPS (Immediate Payment Service channel) services due to a technical issue. This step was taken as a precaution after transactions from holders of other banks led to the crediting of UCO Bank account holders without the actual receipt of money from those banks. - economic times

🍒      RBI slaps fines on Axis Bank, Manappuram Finance : The Reserve Bank on Thursday imposed a monetary penalty of Rs 90.92 lakh on Axis Bank and Rs 42.78 lakh on gold loan firm Manappuram Finance for violation of certain directions of the banking sector regulator. The fine has been imposed for non-compliance with certain directions issued by the RBI on 'Reserve Bank of India (KYC) Directions, 2016', 'Loans and Advances - Statutory and Other Restrictions', 'Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks', and 'Code of Conduct for Opening and Operating Current Accounts', the central bank said in a statement. The Reserve Bank of India (RBI) by an order dated November 02, 2023, imposed a monetary penalty of Rs 90.92 lakh on Axis Bank Ltd for non-compliance with certain directions. - economic times

🍒      UPI adds a billion transactions in two months, hits 11 bn mark amid festive season: RBI : The Unified Payments Interface (UPI) added another billion to reach 11 billion transactions in a short span of two months—the quickest addition of a billion—to date, the Reserve Bank said on Thursday in its monthly bulletin. The apex bank said that buoyed by the festival season, digital payments witnessed a strong expansion in October 2023, with growth (y-o-y) under major payment modes outpacing the increase in the previous month.  “The Initial Public Offering (IPO) facility through UPI exhibited robust adoption, with the number of mandates nearly doubling in October 2023 over the corresponding month in 2022," the RBI monthly bulletin added. - Live Mine.

🍒      RBI tightens norms for consumer loans amid rise in unsecured lending : The Reserve Bank of India has asked institutions to increase the risk weights with respect to consumer credit exposure of commercial banks by 25 per cent to 125 per cent, merely a month after flagging the high growth in certain components of consumer credit and asking NBFCS, banks to strengthen internal surveillance mechanisms.  This hike includes personal loans but excludes housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery. - economic times.

🍒      RBI increases risk weights in attempt to slow down consumer loan growth : The Reserve Bank of India (RBI) has put the brakes on the unbridled growth in unsecured loans by increasing the capital requirements for such loans and mandating that boards come up with a policy on retail loans and monitor it strictly. The central bank has increased risk weights on consumer loans from banks as well as non banking finance companies (NBFCs) and also credit cards, making it more expensive for lenders to offer loans in these segments and which could likely mean higher interest rates for borrowers. Moreover, lending from banks to NBFCs will also become more expensive as risks weights for these loans have also been increased above a threshold. - economic times

🍒      RBI gives approval to appoint Isha Ambani, two others as directors of Jio Financial : Jio Financial Services on Thursday said the Reserve Bank has granted prior approval to appoint Isha Mukesh Ambani and two others as directors of the Reliance Industries' NBFC firm. "We wish to inform you that the RBI vide letter dated November 15, 2023, has accorded its approval for the appointment of Isha Mukesh Ambani, Anshuman Thakur and Hitesh Kumar Sethia as directors of the company," Jio Financial said in a regulatory filing. The company received the RBI approval letter on November 15, 2023, it said. - economic times

🍒     RBI to conduct Rs 50,000 crore 14-day VRRR on November 17 : The Reserve Bank of India (RBI) on November 16 said it will conduct 14-day variable rate reverse repo (VRRR) auction for a notified amount of Rs 50,000 crore on November 17. The auction will take place between 10:30 am and 11:00 am, while the reversal of these funds will take place on December 1, RBI said. This was announced despite the liquidity in the banking system being in a deficit of around Rs 43,925.23 crore. Money market dealers said the announcement came as there is a reversal of the 14-day VRRR conducted by the central bank on November 3. In the auction, banks have parked Rs 20,482 crore at a 6.49 percent cut-off rate. - Moneycontrol.

🍒      Two Japanese banks set to start operations in GIFT City: IFSCA chief : Two more Japanese banks are set to join 10 foreign and 16 local banks in the tax-free GIFT City, where more than 550 businesses with assets worth USD 47 billion have registered and begun operations, an official said.. This marks a significant expansion of the GIFT City's financial sector, which is expected to play a key role in India's economic growth, International Financial Services Centres Authority (IFSCA) chairman K Rajaraman said here. "We also want Indian origin funds and businesses that are located in tax-free jurisdictions to return home and be part of the growing GIFT City hub," said Rajaraman, giving this update on the Ahmedabad-based city free trade zone, where ease of doing business procedures, processes and laws have become a benchmark for international standards. IFSCA is the regulatory body for the Indian special economic zones such as the GIFT City. - economic times

🍒      India doesn't expect to complete sale of IDBI Bank this fiscal year : The Indian government does not expect to conclude the sale of IDBI Bank by the end of the financial year on March 31, 2024, a top finance ministry official told reporters. The federal government, which owns 45.48% of IDBI Bank, and state-owned Life Insurance Corp of India, which holds 49.24%, together plan to sell 60.7% of the lender. Kotak Mahindra Bank, Canadian billionaire Prem Watsa-backed CSB Bank and Emirates NBD have submitted initial bids for a majority stake in IDBI Bank and the Reserve Bank of India (RBI) has been vetting bidders since April. - economic times

🍒      Indian banks’ NPAs to drop to 3.5%, net interest margin to 2.9% by FY25: S&P Global : Indian banks’ weak loans (better known as non-performing assets or NPAs) is projected to drop to 4.5 per cent at the end of Fiscal Year 2023-24, and to 3.5 per cent at the end of Fiscal Year 2024-25, S&P Global said on Thursday. It does not expect interest rates to rise much in the near future. NPA refers to a loan account whose principal or interest is due for a period of three months or more. “We project the banking sector’s weak loans will decline to 3-3.5 per cent of gross loans by March 31, 2025, on the back of a structural improvement, including healthy corporate balance sheets, tighter underwriting standards, and improved risk-management practices,” S&P Global Ratings said in its report on Global Banks’ Country-By-Country Outlook 2024 titled ‘Forewarned is Forearmed.’ The bank assumes that slower global growth and external demand will weigh on economic activity and could fuel further inflation. However, “given that India is domestically oriented, we expect economic growth to be less affected,” it said. - Business Line.

🍒      Lenders look to derisk promoter guarantees, implementing negative liens to safeguard assets : Indian lenders will now insist that a negative lien is created on the assets underlying personal guarantees given by promoters of companies raising bank loans, said people at advisory firms. The move is aimed at preventing them from transferring these personal assets to a special trust, which may be bankruptcy remote.  This move by banks follows the recent landmark Supreme Court order that upheld the constitutional validity of recovery provisions against personal guarantors under the Insolvency and Bankruptcy Code (IBC). In practice, lenders insist on personal guarantees from promoters of small and medium companies while large borrowers, leveraging their heft, have stopped providing these guarantees long ago. - economic times

🍒      Jaiprakash's lenders taken 'unawares' by ICICI move on company debt : ICICI Bank's invocation of pledged Jaiprakash Associates (JAL) shares to settle a part of the company's debt appears to have caught other lenders unawares. These lenders, in the 32-bank consortium, have written to ICICI Bank, the lead lender, seeking to know how the bank can go ahead and settle a part of its debt when others in the consortium are awaiting a resolution. JAL owes a group of 32 lenders a total of ₹29,272 crore. The company was among the 26 defaulters that the RBI had directed to be taken to the bankruptcy process in 2017 following which ICICI had filed an insolvency petition against the company before Allahabad Bench of the National Company Law Tribunal in 2018. That petition is yet to be admitted. - economic times

🍒      Covering climate change risks poses a major challenge for insurance industry : Growing risks associated with climate change is fast emerging as the biggest challenge for the insurance industry.  Right from loss of life due to cyclones to covering the damages of private property induced by flash floods and other natural calamities, insurance companies are gearing up to manage risks associated with climate change. Climate change will significantly impact the insurance industry with higher severity of catastrophic losses, inadequacy of property coverages, and higher business interruption losses, said MR Kumar, former Chairman, LIC of India. - Business Line.

🍒      NBFC-MFIs’ portfolio quality improving, NPAs fall in FY23: MFIN report : Portfolio at Risk (PAR) for NBFC-MFIs (microfinance institutions) has gradually improved post-pandemic, with over 30-day PAR falling from a peak of 22.44 per cent in June 2021 to 10.5 per cent in March 2023. MFIs gross NPA fell to 2.7 per cent in FY23 from 5.6 per cent in FY22 and 5.2 per cent in FY21, according to Microfinance Industry Network (MFIN)’s India Microfinance Review for FY23 titled ‘Micro Matters: Macro View’. “A look at the profitability ratios shows that Covid-related dent on profitability has been overcome. Apart from the resumption of business at full scale after Covid, change in regulations has also played its role in bringing sustainability and profitability back on track,” the report said. - Business Line.

🍒     Govt extends benefits of Kisan Credit Card to fishermen : Union Minister of Fisheries, Animal Husbandry and Dairying Parshottam Rupala announced on November 16 that the benefits of the Kisan Credit Card scheme have been extended to fishermen. Previously limited to farmers, this scheme provides financial support through credit cards tailored to agricultural needs. By extending this scheme to fishermen, the government aims to provide similar financial assistance and support, recognising the significant contribution of individuals engaged in the fishing sector to the country's economy. - Moneycontrol.

🍒      Sensex gains 307 pts, Nifty closes above 19,750; IT stocks shine : Sensex, Nifty updates on 16 November 2023: Benchmark equity indices ended with gains on Thursday as sentiments turned buoyant amid fresh foreign inflows and buying in IT counters. Softer-than-expected US inflation data and easing bond yields have bought optimism in equities. Rising for the second session in a row, the 30-share BSE Sensex climbed 306.55 points or 0.47 per cent to settle at 65,982.48. During the day, it jumped 682.44 points or 1 per cent to 66,358.37. The Nifty gained 89.75 points or 0.46 per cent to 19,765.20. - Business Line.

🍒      Rupee falls by 14 paise to 83.23 against US dollar : The rupee declined by 14 paise to settle at 83.23 (provisional) against the US dollar on Thursday due to foreign fund outflows and a firm greenback in the overseas markets. Losses in crude oil prices, however, helped the rupee restrict the fall, forex dealers said. At the interbank foreign exchange market, the rupee opened lower at 83.18 against the US currency. The local unit remained under pressure in the day trade moving in a range of 83.17 to 83.25. - Business Line.