SBI, Bank of Baroda gets encouraging response for digital rupee

Banking / Financial News at a Glance 

🍒       SBI, Bank of Baroda gets encouraging response for digital rupee : Public sector lenders State Bank of India (SBI) and Bank of Baroda has received encouraging response from customers for the Central Bank Digital Currency (CBDC) or digital rupee. Country’s largest lender has recorded over 900,000 transactions from 400,000 lakh users since December 1 last year. The number of CBDC users for Bank of Baroda has reached 250,000. “The pilot of CBDC has been successful. We have 900,000 plus transactions from December 1 last year and have onboard over 40,000 merchants,” Balaji Rajagopalan, Chief Technology Officer, SBI said on the sidelines of banking conference FIBAC 2023 organised by FICCI. - financial express.

🍒       UPI can be moved to cloud network, says SBI MD : The Unified Payments Interface (UPI) application can be moved to public cloud network considering volume of UPI payments that are processed by the systems of banks, says State Bank of India (SBI) managing director CS Setty. “UPI is the biggest use case that can go to cloud. I personally believe this is one application that can definitely be moved to cloud considering the scalability,” he said at a panel discussion organised by the Federation of Indian Chambers of Commerce and Industry on Thursday. - Financial Express

🍒       Bank of Baroda aiming for 10 lakh active CBDC users by FY24-end: ED Joydeep Dutta Roy : Bank of Baroda is aiming to increase the number of active CBDC users to 10 lakh by the end of the current financial year from 2.5 lakh users at present, Executive Director Joydeep Dutta Roy said on the sidelines of FIBAC 2023, organised jointly by FICCI and the Indian Banks’ Association (IBA). RBI has assigned individual targets to every bank and Bank of Baroda is on track to achieve these targets, Roy said without quantifying the targets. As the ecosystem grows and more users understand the usage and different features of CBDC, customer on-boarding will gather pace, he added. RBI had earlier said it is aiming for 10 lakh retail CBDC transactions per day by the end of 2023. The central bank will be meeting banks on November 24 for a periodic review of progress on CBDC. - Business Line.

🍒       Bank of Baroda plans ₹5,000 crore infrastructure bonds : Bank of Baroda (BoB) has decided to issue, in first tranche, Infrastructure Bonds aggregating up to ₹5,000 crore for a tenor between 7 to 10 years. The bond issue will comprise a base issue of ₹1,000 crore and green shoe option of up to ₹4,000 crore. The public sector bank, in a regulatory filing, referred to its disclosure last week regarding its intention to raise Infrastructure Bonds of up to ₹10,000 crore (base issue of ₹2,000 crore and green shoe option of ₹8,000 crore) for a tenor of up to 7 years. - Business Line.

🍒       Profitability to improve on easing cost-to-income ratio: Fedbank Financial MD : Aided by improving operating leverage and efficiencies, Fedbank Financial Services (FedFina) is focussing on improving its cost-to-income ratio, which in turn should boost profitability over a period of time, according to MD and CEO Anil Kothuri. “We are looking to drive operating leverage in our business, which means that the large number of branches we have opened will keep adding AUM,” Kothuri told businessline. “The AUM per branch will increase with each passing quarter, so our revenues will increase but our costs will not increase in the same proportion. Therefore, our business is biased to be more profitable on a quarter-by-quarter basis.” - Business Line.

🍒       Credit card spends surge on festival spending to record high of ₹1.8 lakh crore : Credit card spends surge on festival spending to record high of ₹1.8 lakh crore. Card spending increased by 25.47 per cent month, after dipping by 4.23 per cent in September. The previous high was seen in August at ₹1.48 lakh crore. Most major issuers registered a double-digit increase in spending during the month with spending for the top four issuers rising 16-42 per cent. SBI Card saw the highest increase at 42 per cent followed by ICICI Bank at 35 per cent. - Business Line.

🍒       RBI slaps penalties totalling Rs 10.34 cr on Citibank, Bank of Baroda, IOB : The Reserve Bank on Friday imposed penalties totalling Rs 10.34 crore on Citibank, Bank of Baroda, and Indian Overseas Bank for contravention of various regulatory norms. The highest penalty of Rs 5 crore has been imposed on Citibank NA for non-compliance of norms related to depositor education and awareness fund scheme, and code of conduct on outsourcing of financial services, the RBI said in a statement.  A fine of Rs 4.34 core was imposed on the state-owned Bank of Baroda for violation of certain directions related to the creation of a central repository of large common exposures, and others, another release said. - economic times.

🍒       RBI's vigilance: New consumer credit norms to bolster India's financial stability amidst surging loan growth : In a proactive move aimed at mitigating potential systemic risks associated with the rapid growth of consumer credit, the Reserve Bank of India (RBI) has implemented stringent measures, impacting both banks and non-bank financial institutions (NBFIs). Fitch Ratings has provided insights into the repercussions of these regulatory adjustments on the financial sector. The central focus of the regulatory adjustments is to mandate banks and NBFIs to allocate more capital against unsecured consumer credit. - economic times.

🍒       RBI’s list of 75 unauthorized forex trading platforms : The Reserve Bank of India (RBI) has released another 'Alert List' including the names of organisations that are not permitted to trade in foreign exchange under the Foreign Exchange Management Act (FEMA), 1999 or to conduct foreign exchange transactions through electronic trading. The Alert List contains names of entities which are neither authorised to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) nor authorised to operate electronic trading platform (ETP) for forex transactions under the Electronic Trading Platforms (Reserve Bank) Directions, 2018. The Alert List also contains names of entities/platforms/websites which appear to be promoting unauthorised entities/ETPs, including through advertisements of such unauthorised entities or claiming to be providing training/advisory services. -economic times.

🍒       RBI supersedes Abhudaya Co-operative Bank Board : The Reserve Bank of India has superseded the board of directors of Mumbai head quartered Abhyudaya Co-Op Bank for lapses in governance standards and appointed SP Pathak, former State Bank of India executive to run the bank for 12 months. But unlike in the case of PMC Bank, there are no restrictions on the bank and customers can transact normally. “ The Reserve Bank has today superseded the Board of Directors of Abhyudaya Cooperative Bank Ltd., for a period of 12 months” said the banking regulator in a release on Friday. “The above action is necessitated due to certain material concerns emanating from poor governance standards observed in the bank. No business restrictions have been placed by RBI and the bank shall continue to carry on its normal banking activities as is hitherto, under the guidance of the Administrator” it said. - economic times.

🍒       IndusInd Bank joins Indraprastha Gas for Digital Rupee dealings in Delhi NCR : Private sector lender IndusInd Bank on November 24 announced its association with Indraprastha Gas Limited (IGL) to help in the acceptance of the digital rupee, the Central Bank Digital Currency (CBDC) launched by the Reserve Bank of India (RBI) last year. The bank in its regulatory filing said that this collaboration will enable customers at select IGL stations in Delhi NCR to make payments using the digital rupee, fostering the use and acceptance of India’s own digital currency. - moneycontrol.

🍒       Warren Buffet’s Berkshire Hathaway exits Paytm : Legendary investor Warren Buffet-owned Berkshire Hathaway has sold its entire stake in One97 Communications Ltd, which owns brand Paytm, in a large block deal, exchange data showed on Friday.  As many as 1.56 crore shares of Paytm or 2.5 per cent equity worth nearly ₹ 1,370 crore were sold by BH International on Friday at ₹877.29 a share. The buyers include Copthall Mauritius Investment and Ghisallo Master Fund, which purchased 1.19% and 0.67% stake, respectively. - Business Line.

🍒       India's forex reserves up by $5.08 bn to $595.4 bn ; India's foreign exchange reserves increased by $5.077 billion to $595.397 billion for the week ending November 17, the latest data by the Reserve Bank of India (RBI) showed on Friday.  Previously, forex reserves witnessed a drop of $462 million to $590.32 billion for the week ending on November 10. According to the Weekly Statistical Supplement released by the RBI, Foreign currency assets (FCAs) were up by $4.39 billion to $526.39 billion. Expressed in dollar terms, the FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. - economic time.

🍒       Centrum ropes in EY to find buyers for its stake in housing arm : The Centrum Group has roped in EY to find a buyer for its stake in housing loan subsidiary Centrum Housing Finance. The Jaspal Bindra-led group plans to either exit the housing finance business fully or pare stake to become a minority shareholder. "If we get a good value, we can look at divesting the business or monetise it," Bindra told ET. "It's still at an exploratory stage. We have told EY to look at the various options."  Centrum holds about 60% in the mortgage lending arm while Morgan Stanley has 25% interest. The balance is held by employees and other investors. - economic times.

🍒       Svatantra Microfin completes acquisition of Chaitanya India Fin Credit : Ananya Birla-led Svatantra Microfin has on Friday completed the acquisition of Sachin Bansal's Navi Group's subsidiary Chaitanya India Fin Credit. "It’s official!! This is the moment we formally completed the acquisition of Chaitanya. Today marks a huge step as we welcome Chaitanya formally into the Svatantra family," Ananya Birla said in her X handle Friday evening. This made Svatantra the second largest NBFC-MFI with assets under management of Rs 13000 crore, after CreditAccess Grameen. - economic times.

🍒       Dark patterns in digital loans: Warning about customers being tricked into taking high-cost loans : "Dark pattern", a dreaded term in digital parlance, is in news again following a cautionary note about such patterns being noticed in the mis-selling of digital loans. RBI Deputy Governor M Rajeshwar Rao has issued a warning about the presence of 'dark patterns' in the mis-selling of digital loans, where customers are misled into taking high-cost loans. He highlighted that mis-selling has transformed into a digital format involving deceptive design interfaces and tactics, tricking users into taking high-cost, short-term consumer credit by posing as instant loans. - economic time.

🍒       PNB Housing to raise Rs 3,500 crore via NCDs : PNB Housing Finance on Friday said its board has approved a proposal to raise Rs 3,500 crore via non-convertible debentures (NCDs) to fund business growth.  The NCD will be raised on a private placement basis, PNB Housing Finance said in a regulatory filing. The fund will be raised in tranches over the next six months, it said. - moneycontrol.

🍒       PSU insurers on a tear; LIC, General Insurance and New India Assurance gain up to 20% : Shares of public sector insurance companies Life Insurance Corporation of India (LIC), General Insurance Corporation (GIC-Re) and the New India Assurance Company (NIACL) jumped up to 20 percent on November 24 morning. Analysts tracking the sector believe that there are no fundamental reasons for the rally in the PSU insurance space. In fact, the financial results for the September quarter were largely disappointing, but there are other ancillary factors which may be responsive for the up move in these stocks, they told CNBC-TV18 - moneycontrol.

🍒       Investors pour $40 bn into stocks in two weeks as markets surge: BofA : Investors have poured $40 billion into stocks since Oct. 9, the biggest two-week inflow since February 2022, as equities rallied, Bank of America said on Friday.  In the four trading sessions to Tuesday, investors put $16.5 billion into stock funds, BofA said in its weekly Flow Shows research note, citing figures from financial data provider EPFR.  Global stocks have surged since the end of October as data has shown U.S. inflation is cooling faster than expected. That has raised hopes among investors that central banks might start cutting interest rates by the middle of 2024.   - Business Standard

🍒       NPS adoption by govt employees hit 6-month high in September: NSO data : The adoption of the National Pension System (NPS) by government employees rose for a third consecutive month to a six-month high in September, signalling acceleration in fresh formal hirings in the public sector. According to the data released by the National Statistical Office (NSO) on Friday, the number of new monthly subscribers under the central and state government components of the NPS collectively increased by 7.8 per cent to 61,897 in September from 57,399 in August. In March, 85,586 government employees had joined the NPS. - Business Standard.

🍒       Barclays working on $1.25 bn cost plan, could cut up to 2,000 jobs: Report : Barclays is working on plans to save up to 1 billion pounds ($1.25 billion), which could involve cutting as many as 2,000 jobs, mainly in the British bank's back office, a person with direct knowledge of the proposals told Reuters.  Managers at Barclays, led by Chief Executive C.S. Venkatakrishnan who is known within the bank as Venkat, are reviewing proposals aimed at boosting profitability. As part of these, 1,500 to 2,000 jobs could be cut if the plans are implemented in full, the person said. - Business Standard.

🍒       Indices trade flat, Nifty settles below 19,800 : Sensex, Nifty updates on 24th November 2023: Indian equity markets settled marginally lower on Friday. The NSE Nifty was down by 0.04 per cent or 7.30 points at 19,794, while the BSE Sensex was at 65,970, down by 0.07 per cent or 47.77 points at 3:30 pm on Friday. Adani Enterprises, Cipla, and Divis Lab emerged as Nifty50’s top gainers. Wipro, Apollo Hospitals, and HCL Tech were the top losers. - Business Line.

🍒       Rupee declines to record closing low, tad down on week : The Indian rupee ended at a record closing low on Friday, weighed down by weakness in its Asian peers and dollar demand from foreign banks. The rupee ended at 83.3675 against the US dollar, lower by 0.03 per cent compared with its close at 83.3425 in the previous session. The rupee hovered in a narrow range of 83.3450 to 83.38 during the day's session and fell 0.1 per cent this week.- Business Line..