Banking & Finance Current Affairs 2019 - Current Affairs Today

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  • RBI asked Banks to disclose IL&FS NPA details in results

    5 hours ago
    The Reserve Bank of India (RBI) has asked banks and financial institutions to disclose the non-performing assets (NPA) stemming from their exposure to troubled infrastructure conglomerate Infrastructure Leasing & Financial Services Limited (IL&FS) and its group entities in their upcoming results announcements. RBI said that the new directions are as per the order of the National Company Law Appellate Tribunal (NCLAT), which asked banks not to declare their loans to the company and group as NPAs. The banking regulator has, therefore, asked the lenders to disclose details such as the provisions required for such NPAs and also the actual provisions made, in their Notes to Accounts in the financial results. It has prescribed a disclosure format for this purpose. An account becomes non-performing if repayment is due for more than 90 days. Banks have to set aside capital as provisions for NPAs. Banks and financial institutions have to disclose the information in a particular format as prescribed by the banking regulator. NCLAT's order: No financial institution will declare the accounts of Infrastructure Leasing & Financial Services Limited or its entities as NPA without prior permission of this Appellate Tribunal.  

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    Karnam Sekar appointed as Indian Overseas Banks new MD & CEO

    5 hours ago
    Karnam Sekar, Dena Bank’s former Managing Director appointed as the new Managing Director (MD) and Chief Executive Officer (CEO) of Indian Overseas Bank. He would take up the position from July 1, 2019. He has been working as an officer on special duty and Whole Time Director in IOB (Indian Overseas Bank) from April 1 till the time of taking over charge from R Subramaniakumar who was the erstwhile CEO and MD. R Subramaniakumar had initiated measures to uplift IOB from loses due to high Non-Performing Assets.

    RBI became the first Asia-Pacific central bank to begin interest rate easing cycle

    8 hours ago
    According to Fitch Ratings - APAC (Asia-Pacific) sovereign credit overview report, the Reserve Bank of India (RBI) is the first central bank in the Asia Pacific region to begin an explicit interest rate easing cycle buoyed by benign food inflation and easier global financial condition. The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, cut rates in February and April citing prospects of benign inflation. In the four months of 2019, the RBI has cut policy interest rates twice by 0.25 per cent each to one-year low of 6 per cent. This is the first back-to-back rate cut since the MPC was formed in late 2016. Fitch has a 'BBB-', the lowest investment grade, rating on India, with a stable outlook. Fitch estimates India to grow at 6.8 per cent in current fiscal 2019 and 7.1 per cent in 2020. About Fitch Ratings: Fitch Ratings Inc. is one of the ‘Big Three credit rating agencies’, the other two being Moody's and Standard & Poor's. Fitch assign bond credit ratings of AAA, AA, A, BBB, BB, B, CCC, CC, C, D.

    HDFC got RBI approval for holding up to 9.9 percent stake in Bandhan Bank

    9 hours ago
    The Reserve Bank of India (RBI) has given its in-principle approval to Housing Development Finance Corporation (HDFC) Ltd for acquiring 9.9 per cent stake in Bandhan Bank following the Gruh Finance deal. Gruh Finance, the affordable housing finance arm of HDFC Ltd, was taken over by Bandhan Bank in a share-swap deal in January. After the deal was announced, HDFC made an application to the RBI for holding shares in Bandhan Bank. Recently RBI gave its approval to HDFC to acquire the shareholding of up to 9.9 per cent of the paid-up capital of Bandhan Bank upon the effective date of the scheme of amalgamation. The amalgamation scheme is awaiting approvals from the National Company Law Tribunal (NCLT) and the respective shareholders of Gruh Finance and Bandhan Bank. The Gruh Finance deal will reduce the stake of Bandhan Financial Holdings Ltd in Bandhan Bank to about 61% from the current 82%. The share swap ratio for the merger will be 568 shares of Bandhan Bank for every 1,000 shares of Gruh Finance. About Bandhan Bank: Founded: 23 August 2015 Headquarters: Kolkata Founder & CEO: Chandra Shekhar Ghosh

    RBI sells entire stake in NABARD, NHB to govt for Rs 1,470 crore

    9 hours ago
    The Reserve Bank of India (RBI) has exited the National Housing Bank (NHB) and the National Bank for Agriculture & Rural Development (NABARD), by selling its entire stakes to government for Rs 1,450 crore and Rs 20 crore, respectively, making them fully government-owned now. RBI has sold its stake in NHB on March 19, while it sold the stake in Nabard on February 26. With this, the government of India now holds 100% stake in both the financial institutions. Background: Divestment of RBI’s stake in NABARD and NHB has its basis in the recommendation of Narasimham Committee II and the Discussion Paper prepared by RBI on Harmonizing the Role and Operations of Development Financials Institutions and Banks. About NABARD: Full Form: National Bank for Agriculture & Rural Development Founded: 12 July 1982 Established on the recommendations of B.Sivaraman Committee (by Act 61, 1981 of Parliament) Headquarters: Mumbai Chairman: Harsh Kumar Bhanwala Purposes: Development aid, Poverty reduction It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). About NHB: Full Form: National Housing Bank Founded: 9 July 1988 Established under the National Housing Bank Act, 1987 Headquarters: New Delhi Managing Director: Shri Sriram Kalyanaraman Purpose: Financial institution for housing

    IndusInd Bank receives NCLT approval for merger with Bharat Financial Inclusion

    9 hours ago
    National Company Law Tribunal (NCLT) approved merger of private sector lender IndusInd Bank with Bharat Financial Inclusion (BFIL), a microfinance company.  Last year, IndusInd Bank received ‘No Objection’ from Reserve Bank of India, National Stock Exchange and Bombay Stock Exchange As per the report, the merger is expected to complete within 2-4 weeks.  Bharat Financial will become a subsidiary of the private lender. IndusInd Bank Ltd's share price is currently at Rs1,686.85, up by Rs32.25 or 1.95%, from its previous close of Rs1,654.60 on the BSE. The script opened at Rs 1,678 and has touched a high and low of Rs1,693.70 and Rs1,665, respectively.  So far, 21,19,368 (NSE+BSE) shares have been traded on the counter.  The current market cap of the company is Rs 99,750.17crores. About IndusInd Bank Industry: Banking, Financial services Founded:1994 (25 years ago) Founder:S. P. Hinduja Headquarters:Mumbai, Maharashtra, India. Key people: R. Seshasayee   

    Kotak Mahindra Bank becomes the first Destination Bank to launch debit card based e-mandates On NPCIs E-Mandate API Platform

    10 hours ago
    Kotak Mahindra Bank is the first debit card based authentication solution on NPCI’s (National Payments Corporation of India) e-Mandate (electronic mandate) API (Application Program Interface) platform first ever Destination Bank to go live with both Net Banking and Debit Card-based e-mandate authentication. The main objective of this initiative is to enable Kotak customers to create electronic mandates (similar to the former eNACH with Aadhaar + OTP) (eNACH- Electronic National Automated Clearing House; OTP- One Time Password) via both debit card and net banking provision. As API based e-mandates are customer-friendly, fast, frictionless and paperless, the initiative would help in making its customers’ lives hassle free for handling recurring payments. About Kotak Mahindra Bank Industry: Banking, financial service Founded: February 2003 Founders: Uday Kotak Headquarters: Mumbai, Maharashtra, India Key people: Prakash Apte (Chairman), Uday Kotak (MD & CEO)

    First Indian Platform for Wholesale Cryptocurrency Trading has introduced by BuyUcoin

    10 hours ago
    BuyUcoin, second oldest Cryptocurrency Exchange company in India introduced a new and unique platform for wholesale cryptocurrency trading.  This platform works on ‘free trading model’ which means it charges zero free on any trade.  This wholesale platform also known as OTC (Over-the-counter) Desk allows users to trade on a large scale with low price fluctuations. This new platform will help to improve the problem of liquidity of cryptocurrency in Indian market.  About BuyUCoin Type of business:Private Founded: June 2, 2016; 2 years ago Founders: Shivam Thakral, Devesh Aggrawal, Atulya Bhatt

    Govt. increased the authorised capital of Allahabad Bank

    1 day ago
    The government has increased the authorized capital for the State-owned Allahabad Bank stated by Rs 5,000 crore to Rs 8,000 crore. The central government after consultation with the Reserve Bank of India (RBI) increased the authorized capital of the bank. The increase in authorized capital will help enable the bank to raise further fund up to a maximum ceiling of Rs 8,000 crore. What is an Authorized Capital? It is the maximum amount of share that a company is authorized to have by its constitutional documents to issue to the shareholders. It is not necessary to issue the whole amount of the authorized capital, part of it can remain unissued. The amount of share that is issued to the shareholder is called the issued share capital of the company. To put in other words, authorized capital is the one which is the maximum amount of value of securities that a company can legally issue to the shareholders. The Authorized capital needs to be specified in the Memorandum of Association(MOA). Authorized capital is broadly divided into the: Issued capital Paid up capital Uncalled capital Allahabad Bank: Founded on: 24 April 1865 Founded in: Allahabad Headquarters: Kolkata, India MD & CEO: S.S.Mallikarjuna Rao  It is a nationalised bank Allahabad Bank has over 3245 branches across India

    Deposits in Jan Dhan accounts are set to cross Rs 1 lakh crore mark

    1 day ago
    The total balance in the Jan Dhan accounts, which has been steadily rising, was at Rs 97,665.66 crore as on April 3, as per the latest government data. The total number of Jan Dhan accounts have crossed 35.39 crore. The deposits stood at Rs 96,107.35 crore on March 27 and Rs 95,382.14 crore in the week before. More than 27.89 crore account holders have been issued the Rupay debit cards. Pradhan Mantri Jan Dhan Yojana (PMJDY): PMJDY was launched on August 28, 2014 with an aim to provide universal access to banking facilities to all households. The government enhanced the accident insurance cover to Rs 2 lakh from Rs 1 lakh for new accounts opened after August 28, 2018. The overdraft limit was also doubled to Rs 10,000.

    BofAML in report notifies that RBI has Rs.3 lakh crore (43$ million) in excess reserves

    1 day ago
    Bank of America Merrill Lynch (BofAML), the excess reserves that RBI holds could be up to Rs.3 lakh crore ($43 billion) or 1.5% of the GDP (Gross Domestic Product). This also includes the excess capital in contingency reserves and revaluation reserves. The Bimal Jalan committee on the appropriate capital reserves for RBI was likely to identify this excess buffer. The committee was set up in December-end with a 6-member panel headed by former RBI governor Jalan. Indranil Sen Gupta, chief India economist at BofAML notified that RBI maintains higher contingency reserves as a percentage of its total book compared to its peers in Brazil, Russia and South Africa, thus a lower cap will bring in more funds. The BofAML report stated that capping overall reserves at 20% from 25.5% will release Rs. 1.96 lakh crore and there is no specific hindrance which would deter RBI from transferring the money to government. As of September 2018, the excess capital with RBI was Rs.9.6 lakh crore. If the cap is halved to 3.25% from the present 6.5%, it will release Rs. 1.282( around Rs. 1.3 lakh crore) lakh crore. Along with revaluation gains ranging from Rs. 300 crore to Rs. 1.8 lakh crore, RBI would be able to transfer the excess reserves to the government which can be used to recapitalize the country’s struggling state-run banks.

    Income Tax Department Proposes New Rules To Tax MNCs And Digital Firms In India

    22 April 2019
    The income tax department altered the method for taxing multinational companies (MNCs) and digital firms with a permanent establishment in India by taking into account various factors like domestic sales, employee (manpower and wages) strength, assets and user base. In ‘Profit Attribution to Permanent Establishment (PE) in India’ report, the CBDT (Central Board of Direct Taxes) Committee stated that MNCs that are suffering global losses or a global profit margin of less than 2% and have their operations in India will be considered to have made a profit of 2% of Indian revenue and will be taxed accordingly. The committee has altered the system to protect India’s revenue interests. The CBDT invited comments from stakeholders on the report within 30 days. An MNC that has a fixed place of business in India is considered to have a Permanent Establishment (PE) in India and is taxed as per the domestic laws. The CBDT report suggested amendments to Rule 10 of income tax rules to provide that in case of an assessee, (is any individual who is liable to pay taxes to the government against any kind of income earned or any losses incurred by him for a particular assessment year) the income from a business that is attributable to the operations carried out in India and is considered to arise in India; when the individual or the business is not a resident of India but has a business connection in India and derives sales revenue from India, the income from such business shall be determined by distributing the profits derived from India by a 3 equally weighted factors of sales, employees and assets.

    Entrepreneur Sairee Chahal appointed to board of directors in Paytm Payments Bank

    22 April 2019
    Sairee Chahal having extensive experience of customer service ecosystem appointed to Board of Directors in Paytm Payments Bank (PPB). Sairee Chahal is the founder and CEO of Sheroes which is a community platform for women. PPB was incorporated in August 2016 and formally began its operations in 2017. The founder of Paytm, Vijay Shekhar Sharma holds 51% stake in PPB and One97 Communications holds the rest of the stakes. About Paytm Payments Bank Founder(s)‎: ‎Vijay Shekhar Sharma     Founded‎: ‎2010 Headquarters‎: ‎Noida, Uttar Pradesh, India     Revenue‎: ‎₹814 crore (US$110 million) (FY 2017)

    Airtel Payments Bank joined hands with Bharti AXA General Insurance for two-wheeler insurance

    22 April 2019
    Airtel Payments Bank joined hands with Bharti AXA General Insurance for a two-wheeler insurance product offering which is available on MyAirtel App and at over 40,000 Airtel Payments Bank points across India. They offer various benefits like 70 percent savings on an annual premium, personal accident cover, protection against third-party liabilities and inspection-free renewal through a paperless process.  Customers can avail towing services at no extra cost on claim intimation, at the time of insured vehicle breaks down. In India, approximately 75 percent two-wheelers are uninsured, despite being mandatory by the Supreme Court order in 2018 which is mandatory for individuals to buy five-year motor third party insurance while buying a new two-wheeler. About Airtel Payments Bank ♦ Founded: 2016 ♦ Headquarters: New Delhi ♦ CEO: Anubrata Biswas

    Bank of Maharashtra Joins M1X change TReDS Platform for MSME Bill Discounting

    20 April 2019
    Bank of Maharashtra (BoM) partnered with M1Xchange Trade Receivables Discounting System (TReDS) platform for MSME bill discounting. TReDS is a digital platform to support micro, small and medium enterprises (MSMEs) to get their bills financed at a competitive rate through an auction where multiple registered financiers can participate. Mynd Solutions is a technology management firm which runs the TReDS platform of M1Xchange. About Bank of Maharashtra Headquarters: Pune CEO: A. S. Rajeev (2 Dec 2018–) Capital ratio: 11.20% (2016) Founded: 1935

    Deutsche Bank appoints Kaushik Shaparia as CEO For India

    20 April 2019
    Deutsche Bank appointed Kaushik Shaparia as the chief executive officer for India He succeeds Ravneet Gill. Gill left the bank to head private lender YES Bank. Shaparia’s appointment will be effective from May 2019. About Deutsche Bank Total assets‎: ‎€1.348 trillion (2018)     Headquarters‎: Fr Number of employees‎: ‎91,700 (2018)   Operating income‎: ‎€1.330 billion

    Exim Bank funded projects worth USD 267 million in Rwanda

    20 April 2019
    India's Export Import Bank (Exim Bank) has provided soft loans of USD 266.60 million to Rwanda for various projects. The funding, done in three separate tranches to Rwanda, is to support: 1) agricultural projects, 2) development of special economic zones (SEZs) and 3) for financing road project in the African nation. According to the agreements, Exim Bank will provide 1) USD 100 million for financing the development of two SEZs (Special Economic Zones) and expansion of the Kigali SEZ in Rwanda; 2) USD 100 million for financing three agriculture project schemes -- Warufu Multipurpose Project, Mugesera Irrigation Project and Nyamukana Irrigation Project. 3) While USD 66.60 million will be funded for the Base-Butaro-Kidaho Road Project. All the three funding project agreements between Exim Bank and the Government of Rwanda have been put to effect from April 2, 2019. About Rwanda: Capital: Kigali Currency: Rwandan franc President: Paul Kagame Prime Minister: Édouard Ngirente

    Canara Bank became the first PSB to meet RBIs EMV Mandate

    19 April 2019
    ACI Worldwide, a global provider of real-time electronic payment and banking solutions, announced that Canara Bank has successfully rolled out major new functionality to support EMV card acquiring across its ATM network and Aadhaar Authentication, leveraging ACI’s UP Retail Payments solution to achieve market firsts. Canara Bank, with nearly 6,300 branches and a network of more than 10,000 ATMs, is the first public sector bank to shift to EMV chip and PIN for card present transactions across the country’s vast ATM network. What is EMV Chip? EMV stands for Europay, MasterCard, Visa, the three Organisations that developed and established EMV as the global standard for chip-based credit and debit transactions. The EMV standard helps to maximise security and global interoperability so that Visa cards can continue to be accepted around the world.

    IMF and World Bank Launched Learning Coin For In-House Purposes

    19 April 2019
    International Monetary Fund (IMF) and the World Bank have together launched a private blockchain with a pseudo-token. The new token, called “Learning Coin” accessible within the IMF and World Bank the main purpose to teach relevant individuals within the organizations about blockchain. Though the coin has no real value hence the description pseudo-token staff members who pass educational milestones will receive the tokens which can then be redeemed for certain rewards. About World Bank President: David Malpass, Headquarters: Washington DC, USA, Established in: 1944.

    Canara Bank Becomes The First Public Sector Bank In India To Meet RBIs EMV Mandate

    19 April 2019
    ACI Worldwide, a global provider of real-time electronic payment and banking solutions Canara Bank successfully rolled out major new functionality to support EMV card acquiring across its ATM network and Aadhaar Authentication, leveraging ACI’s UP Retail Payments solution to achieve market firsts. Canara Bank, with nearly 6,300 branches and a network of more than 10,000 ATMs About Canara Bank Industry: Banking, Financial services Founded: Canara Bank Hindu Permanent Fund Headquarters: Bangalore, Karnataka, India Key people: T. N. Manoharan 

    Bandhan Bank Gets CCI Nod For Merger With Gruh Finance

    19 April 2019
    Bandhan Bank received approval from the Competition Commission of India (CCI) for the proposed scheme of amalgamation of Gruh Finance with the bank. The approval has been made under sub-section (1) of Section 31 of the Competition Act, 2002. Bandhan Bank in January 2019, announced the merger of Gruh Finance with it. Type: Private Sector Bank Traded as BSE: 950041 Industry: Banking Founded:23 August 2015; 3 years ago Founders: Chandra Shekhar Ghosh Headquarters: Kolkata, West Bengal, India.

    IDRBT set up 5G Lab for Banking, Financial Sector

    18 April 2019
    Institute for Development and Research in Banking Technology (IDRBT) launched the 5G Use Cases Lab for banking and financial sector along with blockchain technology. IDRBT is an arm of Reserve Bank of India. It also released a white paper on 5G applications for banking and financial sector in India. The use of 5G will change a range of technologies and applications, including point of sale (PoS) machines in the banking sector, which are currently using 2G and are in the process of being phased out. Since India is now the biggest user of mobile data in the world and the rates of devices and services have been dropping aggressively, 5G holds immense potential for the country.

    IDBI Bank launched paperless account opening facility for NRIs

    18 April 2019
    IDBI Bank has launched the ‘NRI-Insta-Online’ account-opening process for NRIs residing in Financial Action Task Force (FATF) member countries. The person will not be required to furnish physical documents and KYC proofs for opening an account with the IDBI bank. About FATF: FATF- Financial Action Task Force FATF is an inter-governmental body which devices policy and sets standards to promote effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system. The body has 38 member countries, including the US, UK, India, Japan, China and France, among others. About IDBI Bank: IDBI Full form: Industrial Development Bank of India Established in: 1964 Headquarters: Mumbai Parent organization: Life Insurance Corporation

    ADB committed highest-ever USD 3 billion in sovereign loans to India

    17 April 2019
    Asian Development Bank (ADB) committed a total of USD 3.88 billion, including sovereign loans and co-financing to India during the year ended December 2018. This is the highest level of assistance since sovereign operations began in the country in 1986. Private sector operations reached USD 3.14 billion, a 37 per cent increase from 2017, which is 14.5 per cent of ADB's overall commitment. Projects Committed by ADB in India: ADB committed several projects in India, including in Bihar, Himachal Pradesh, Madhya Pradesh, Karnataka, Tamil Nadu, Assam and Odisha. In India, ADB provided a USD 100-million loan to Ostro Kutch Wind, a renewable energy company owned by investment funds under the management of Actis Capital, for constructing and operating a 250-megawatt wind power project in Gujarat. Among others, ADB also provided USD 30 million in equity and USD 20 million in debt security to Annapurna Finance, a microfinance company. In March 2018, ADB signed a cooperation arrangement with the International Solar Alliance, headquartered in India, to promote solar energy deployment across Asia and the Pacific, particularly in South Asia. Major objectives of the ‘International Solar Alliance’  include global deployment of over 1,000 gigawatt of solar generation capacity and investment of over USD 1 trillion into solar energy by 2030. About ADB: ADB - Asian Development Bank Established on: 19 December 1966 Purpose: Economic development Headquarters: Mandaluyong, Philippines President: Takehiko Nakao Membership: 68 countries

    India turns to net steel importer in Fiscal year 2018-2019

    17 April 2019
    India became a net importer of steel in the fiscal year 2018-2019 that ended on 31 March for the first time in 3 years, as the 25% import duty on steel products imposed by the US diverted supplementary supplies to India. India’s steel imports increased by 4.7% to 7.84 million tonnes in 2018-19 from 7.48 million tonnes a year earlier. Exports fell by 34% to 6.36 million tonnes from 9.62 million tonnes over. About India Steel Company The iron and steel industry is one of the most important industries in India. During 2014 through 2016, India was the third largest producer of raw steel and the largest producer of sponge iron in the world. The industry produced 91.46 million tons of total finished steel and 9.7 million tons of raw iron. Most iron and steel in India is produced from iron ore.  

    RBI puts into circulation Rs 50 banknotes signed by Governor Shaktikanta Das

    17 April 2019
    Reserve Bank of India put into circulation 50 rupees denomination banknotes signed by its Governor Shaktikanta Das. RBI in Mumbai approved the design of these notes is similar in all respects to 50 banknotes in Mahatma Gandhi new series. About Reserve Bank of India Headquarters: Mumbai Founder: British Raj Founded: 1 April 1935, Kolkata Reserve: 28.37 lakh crores INR (US$380 billion) Governor: Shaktikanta Das Subsidiary: National Housing Bank

    Rajesh Yaduvanshi is appointed as Executive Director of Punjab National Bank

    17 April 2019
    Punjab National Bank (PNB) appointed Rajesh Kumar Yaduvanshi as the Executive Director of the bank. Rajesh Kumar Yaduvanshi joined PNB as a management trainee in 1985. He is equipped with an experience of 34 years in the banking career and is a certified associate member of Indian Institute of Bankers. In the past, he had worked with Dena Bank in the capacity of the Executive Director. He holds a doctorate in science from Indian Agricultural Research Institute, (IARI) New Delhi. About Punjab National Bank Industry: Banking, Financial services Founded:19 May 1894; 124 years ago Founder: Dyal Singh Majithia, Lala Lajpat Rai Headquarters: New Delhi

    Fincare Small Finance Bank won the Celent Model Bank 2019 Award

    17 April 2019
    Fincare Small Finance Bank (SFB) honoured with the prestigious Celent Model Bank 2019 Award in Financial Inclusion category, for ‘Redesigning Lending to Reach Small Businesses’. The award recognizes LAP (Loans against Property) D.Lite, which is a tab-based solution designed and developed in-house by Fincare SFB for instant underwriting of loans against property targeted at micro and small enterprises. The Award was announced on its 12th anniversary in 2019 and was organized by Celent in New York. LAP D.Lite is one of the 22 initiatives from all over the world to receive this award, which featured 140 nominations from 80 institutions from 30 countries. The other banks to receive the award in other categories were Bank of America, CIBC, Fidor Bank, HSBC, Rabobank, and Santander. The award is for best practices of technology usage in different areas critical to success in banking.

    NBFCs, MFIs raised Rs.26,000 crore through Securitisation

    16 April 2019
    Non-banking finance companies (NBFCs) and microfinance companies (MFIs) raised about Rs.26,200 crore through securitisation in FY19, despite tight liquidity conditions. It is a growth of 170% over FY18. In FY18, NBFCs and MFIs raised Rs.9,700 crore through securitisation. The sectors faced tight liquidity conditions in FY19 after a series of defaults by Infrastructure Leasing and Finance Services (IL&FS). A report by rating agency Icra stated that their reliance on the securitisation route to raise funds increased to help meet their growth targets in FY19. In FY18 and H1FY19, securitisation contributed to only 18-20% of the overall disbursements. However, this number leapfrogged to 37% and an estimated 50% in the third and fourth quarters of FY19, respectively. Investors were also comfortable buying retail loan portfolios originated by these entities as opposed to taking direct on-balance sheet credit exposure, especially for small and medium sized entities. What is Securitisation? ♦ Pooling various types of contractual debt (such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs) ♦ Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing ♦ Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS)

    RBI permitted Reinsurance Brokers to open Foreign Currency Accounts

    15 April 2019
    Reinsurance brokers have been permitted to open non-interest bearing foreign currency accounts with banks for undertaking transactions. Foreign currency account refers to a bank account held or maintained in currency other than the currency of India or Nepal or Bhutan. Earlier, the Insurance Regulatory and Development Authority of India (IRDAI) had issued notification and then RBI issued Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 - Opening of Foreign Currency Accounts by Re-insurance and Composite Insurance brokers. About  Insurance Regulatory and Development Authority of India (IRDA): ♦ It is tasked with regulating and promoting the insurance and re-insurance industries in India. ♦ Founded: 1999 ♦ Headquarters: Hyderabad ♦ Chairperson: Subhash Chandra Khuntia

    RBI granted 12 years to LIC to bring down its stake in IDBI Bank

    15 April 2019
    The Reserve Bank of India (RBI), which classified IDBI as a private sector bank last month, has granted Life Insurance Corporation (LIC) with 12 years to cut its stake in the bank by 10 percent. RBI has stipulated that after 12 years LIC has to reduce stake in IDBI Bank by 10 per cent to 40 per cent. LIC is the major shareholder of IDBI Bank. It has a 51 per cent stake in the Bank. The government is the other major investor in IDBI Bank owning 46.46 per cent while the rest is with the public. As per the Insurance Regulatory and Development Authority (IRDAI), LIC can hold up to 15 percent stake in any bank which can go up to 30 percent as per the board approval. But the insurance regulator has allowed LIC to invest up to 51 percent in IDBI Bank last year. About Life Insurance Corporation: ♦ Headquarters:  Mumbai ♦ Owner:  Government of India ♦ Founder:  Government of India ♦ Founded:  1 September 1956 ♦ Interim chairman: Hemant Bhargava About Reserve Bank of India: ♦ Headquarters:  Mumbai ♦ Founder:  British Raj ♦ Founded:  1 April 1935, Kolkata ♦ Governor:  Shaktikanta Das ♦ Subsidiary: National Housing Bank (NHB) About IDBI Bank: ♦ IDBI Full Form- Industrial Development Bank of India ♦ Headquarters:  Mumbai ♦ Founded:  1 July 1964

    HDFC Bank tops Forbes' list of best Indian banks 2019

    15 April 2019
    Forbes has compiled a first-ever list of the World's Best Bank 2019 in terms of customer services and technological advancements. The private lender, HDFC Bank, was ranked at the top of the ‘Forbes Best Indian Banks 2019’ list. HDFC Bank claims to provide the best of its technological features to its 43 million customers. Another private lender ICICI Bank took the second spot, while DBS was at the third rank in Forbes list of Indian banks. Kotak Mahindra Bank and IDFC Bank had managed to gain the fourth and fifth spot respectively. Syndicate Bank, PNB, Allahabad Bank, Vijaya Bank and Axis Bank were ranked from sixth to tenth respectively. Forbes had partnered with Statista, a market research company, to measure the best banks in 23 countries. The survey compiled data from around 40,000 customers around the world for their opinions on their banking relationships. The banks were rated on the basis of 5 key attributes - trust, digital services, financial advice and fees. About HDFC bank: ♦ HDFC Bank is India’s largest private sector lender by assets. ♦ CEO: Aditya Puri ♦ Headquarters: Mumbai ♦ Founded: August 1994, India ♦ It has a presence in Bahrain, Hong Kong and Dubai.

    RBL Bank tied up with CreditVidya for improving customer experience

    14 April 2019
    Through this partnership, the private sector lender - RBL Bank will be able to gain significant insights into its customer base. RBL Bank will leverage CreditVidya's big data underwriting platform across its credit card and mobile banking apps. The bank had first partnered with CreditVidya in 2018 for instant and automated verification of employment details of salaried card applicants. Founded in 2012, CreditVidya helps lenders and wallets assess risk of customers. About RBL Bank: ♦ RBL/Ratnakar Bank Limited is a scheduled commercial bank. ♦ Headquarters: Mumbai ♦ Founded: August 1943

    PAISALO Digital Limited signed the first co-origination loan agreement SBI

    12 April 2019
    PAISALO Digital Limited signed the first co-origination loan agreement with State Bank of India (SBI). This is the first agreement of its kind in the country that State Bank of India has signed. The agreement was signed with a vision of empowering the AGRI, MSME segment and small businesses.  The loan ticket is designed at Rs.10,000 to 2 lakh. The company expects to disburse 200,000 loan applications in FY20.  PAISALO Digital Limited is a leading systemically important non-deposit taking NBFC. It is registered with the Reserve Bank of India, in operations since 1992. Co-origination loan agreement: ♦ This new framework seeks to bring the strengths of two sectors, that is, banks and micro-finance institutions (MFIs)/non-banking finance companies (NBFCs) together ♦ Under this framework, both a bank and an MFI/NBFC will join at each underwriting and loan level and share the loan amount at an agreed percentage with all other structures put in place ♦ It is expected that such a blending would not only increase the flow of credit to MSMEs but also bring down the cost of credit for the sector substantially.

    Govt retains interest rate for General Provident Fund at 8%

    11 April 2019
    Union government retained the interest rate for General Provident Fund (GPF), Contributory Provident Fund and other related schemes at 8 per cent for the first quarter of the current financial year 2019-2020. The interest rate on these funds was at 8 per cent in the January-March quarter of 2018-19 and government kept it unchanged for April to June for 2019-20.  The Department of Economic Affairs, in a notification, the mentioned interest rate will be applicable on provident funds of central government employees, railways and defence forces.  About General Provident Fund Founded: 4 March 1952 Headquarters: Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi, India Key people: Sunil Barthwal, Central Provident Fund Commissioner, Rajesh Bansal Additional Central Provident Fund Commissioner

    HDFC AMC Ranks 1st In Terms Of Assets: AMFI Report

    11 April 2019
    India’s asset management companies (AMCs) own assets under management (AUM) worth Rs24.46 trillion according to data released by the Association of Mutual Funds in India (Amfi). HDFC Asset Management Co. Ltd claimed the top spot with an average AUM of Rs3.42 trillion, overtaking ICICI Prudential Asset Management Co. Ltd with an average AUM of at Rs3.20 trillion. About HDFC Bank CEO: Aditya Puri (Sep 1994–) Headquarters: Mumbai Founded: August 1994, India Revenue: 95,461 crores INR (2018, US$13 billion) Subsidiaries: HDFC securities, HDB Financial Services.

    Emirates Islamic became world's first Islamic bank to launch banking via WhatsApp

    11 April 2019
    Dubai based Emirates Islamic has announced the launch of Chat Banking services for customers via WhatsApp, marking a global first in the Islamic banking sector. The Chat Banking solution allows customers to use features such as checking account balances and temporarily blocking or unblocking of an existing card. All messages on Emirates Islamic’s verified WhatsApp Business account are encrypted, ensuring confidentiality and security. About Emirates Islamic: ♦ Launched in: 2004 ♦ Located in: Dubai, United Arab Emirates

    Karnam Sekar to be appointed as MD, CEO of Indian Overseas Bank

    11 April 2019
    The Central Government made important management appointments to several public sector banks.  According to the Department of Personnel and Training, Appointments Committee of the Cabinet (ACC) approved the appointment of Karnam Sekar as MD and CEO in Indian Overseas Bank. Karnam Sekar is currently the CEO and MD of Dena bank.  The new designation will be effective from July 1, 2019. About Indian Overseas Bank  Headquarters: Chennai CEO: R. Subramania Kumar (5 May 2017) Founder: M. Ct. M. Chidambaram Chettyar Owner: Government of India

    SBI cut interest rate on home loans up to Rs 30 lakh by 10 bps

    10 April 2019
    India's largest lender, SBI has reduced the interest rate on housing loans of up to ₹30 lakh by 10 basis points to a range between 8.60% and 8.90% per annum, from existing rates of 8.70% to 9%. SBI also cut its benchmark lending rates by five basis points across all tenors. The one-year marginal cost of fund-based lending rate (MCLR) now stands at 8.50%, down from 8.55%. The move comes days after the Reserve Bank of India (RBI) cut its policy interest rate by 25 basis points to 6%, in a move to boost the economy. From May 1, the rates of large savings accounts (balances above ₹1 lakh) will get revised.Overdraft and other short-term loans will get cheaper. About SBI: ♦ Chairperson: Rajnish Kumar ♦ Headquarters: Mumbai ♦ Founded: 1 July 1955 ♦ SBI is ranked as 216th in the Fortune Global 500 list of the world's biggest corporations of 2018.

    RBI issues norms for banks to set up currency chests

    9 April 2019
    Reserve Bank of India(RBI) rolled out with guidelines for banks to set up new currency chests, which include the minimum area of 1,500 square feet for the strong room.  The new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. It added that for those situated in the hilly/ inaccessible places, capacity should be 2.1 lakh pieces of banknotes per day.

    HDFC Bank to raise up to Rs.50,000 crore by issuing bonds

    9 April 2019
    Private lender HDFC Bank said it is planning to raise up to Rs.50,000 crore this fiscal by issuing bonds on private placement basis.  It will raise funds by issuing perpetual debt instruments [part of additional tier I capital], tier II capital bonds and long-term bonds [financing of infrastructure and affordable housing] up to a total amount of Rs.50,000 crore in the period of next 12 months through private placement mode. The bank would consider the proposal on April 20.

    NPCI reduced UPI transaction charges up to Rs 1,000 by 60%

    8 April 2019
    The National Payments Corporation of India (NPCI), which runs the Unified Payments Interface (UPI) network, has slashed usage fees for small transactions to encourage banks and payment service providers (PSPs) to adopt the system. 1) Charges on transactions up to Rs 1,000 have been cut to 10 paise from 25 paise earlier, while keeping the charge for transactions above Rs 1,000 unchanged at 50 paise. 2) NPCI has reduced Incentive payments to a flat 10 paise per transaction. Incentive payments are charges banks or PSPs pay NPCI when they credit the user’s bank account with cashbacks. 3) Also Merchant transactions has reduced to flat 10 paise plus a 0.04% levy that will be split between the acquiring bank and the issuing bank. Merchant transactions up to Rs 1,000 earlier attracted at 25 paise fee, while those above Rs 1,000 were charged at 50 paise. About UPI: ♦ UPI - Unified Payments Interface ♦ It is an instant real-time payment system facilitating inter-bank transactions. ♦ It works by instantly transferring funds between two bank accounts on a mobile platform. ♦ Developed by: National Payments Corporation of India (NPCI) ♦ Regulated by: Reserve Bank of India (RBI) ♦ Introduced on: 11 April 2016

    Karnataka Bank signed MoU with Bharti AXA for Insurance Products

    7 April 2019
    Karnataka Bank has entered into a memorandum of understanding with Bharti AXA Life Insurance Company to distribute the latter’s life insurance products. This is the third similar tie-up by the Bank after with PNB Metlife India Insurance Company Ltd and LIC, both of whom continue to provide insurance solutions to the customers of Karnataka Bank. ♦ Karnataka Bank MD and CEO - Mahabaleshwara M S ♦ CEO and MD of Bharti Axa Life Insurance Company Ltd, - Vikas Seth

    Lakshmi Vilas Bank approves merger with Indiabulls Housing

    6 April 2019
    The board of Lakshmi Vilas Bank approved a share swap acquisition by housing finance firm Indiabulls Housing Finance. The merged entity, Indiabulls Lakshmi Vilas Bank, will be among the top eight private banks by size and profitability. The merger will need the approval of the Reserve Bank of India and other regulators. As per the share swap ratio for the merger, for every 100 shares of Lakshmi Vilas Bank shareholders will get 14 shares of Indiabulls Housing Finance. About Lakshmi Vilas Bank: Headquarters: Chennai CEO: Parthasarathi Mukherjee Founded: 1926  

    Paytm Money Receives SEBI Approval To Start Stock Broking Services

    6 April 2019
    Securities and Exchange Board of India (SEBI) given approval to Paytm Money the investment and wealth management platform of the mobile payments company to start offering booking services. It had applied for the licence in October 2018. Paytm Money also received membership of NSE and BSE. About Paytm  Founded: 2010 Headquarters: Noida, Uttar Pradesh, India Area served: India, Canada Founder(s): Vijay Shekhar Sharma

    Rupee plunged 76 paise to 69.17 against dollar

    5 April 2019
    The rupee plunged 76 paise on 4th March to close at 69.17 against the U.S. dollar after the RBI cut the interest rate but kept its monetary policy stance ‘neutral’. In its first bi-monthly policy review for this financial year, the central bank slashed the policy rate by 25 basis points for the second time in a row, following which the rupee and sovereign bond prices tumbled. At the Interbank foreign exchange (forex) market, the rupee opened lower at 68.56 and fell further to touch the day’s low of 69.21. It finally settled at 69.17, down 76 paise over its previous close. The rupee had surged by 33 paise to 68.41 against the dollar on 3rd March.

    RBI made changes in NPA disclosure norms

    5 April 2019
    The Bad loan divergence practice was mandated by RBI to improve the transparency in asset classification. Now RBI has brought changes to the bad loan divergence rule. The reason for this is that some banks, on account of low or negative net profit after tax were forced to disclose divergences even where the additional provisioning assessed by the RBI was small. This was contrary to the regulatory intent that only material divergences should be disclosed. Changes brought in by the RBI in NPA Disclosure Norms:-  1)Banks are required to disclose divergence when the additional provisioning for NPAs assessed by RBI exceeds 10% of the reported profit before provisions and contingencies for the reference period, instead of the earlier rule of 15% of the published net profits after tax.  2) The norms on divergence on gross non-performing assets (NPAs) continues to be a material divergence of 15% has left unchanged.

    IFINs GNPAs touched 90 percent says IL&FS

    4 April 2019
    IL&FS Financial Services Ltd. (IFIN), the non-banking finance arm of infrastructure conglomerate IL&FS, reported an increased gross non-performing asset (NPA) ratio of 90% as at end December 2018 against the gross NPAs of 5% in March 2018. The new management completed six months. It is unusual for any lender to report 90% gross NPAs and it is probably for the first time, in recent times, that a lender had reported such delinquency. IFIN’s total exposure as on March 31, 2019 was Rs.18,805 crore, of which external exposure was Rs.10,656 crore and exposure to the group, Rs. 6,949 crore. About Rs.1,300 crore is categorised as other assets.  

    RBI reduced repo rate for second consecutive time by 25 bps to 6 percent

    4 April 2019
    The RBI cut its repo rate by 25 basis points to 6% in its first bi-monthly policy review of 2019-20. The decision comes a week before the election starts on April 11. The central bank had reduced the benchmark lending rate by 25 basis points in February after an 18-month gap. The reverse repo rate, too, was lowered from 6% to 5.75%. The bank rate was fixed at 6.25%. What is Repo rate? Repo rate refers to the rate at which commercial banks borrow money from the Reserve Bank of India (RBI) in case of shortage of funds. Repo rate is short form of Repurchase Rate. What is reverse repo rate? The reverse repo rate is the rate at which the central bank borrows money from commercial banks, to control the money supply in the country. ♦ Present Governor of RBI: Shaktikanta Das (from 12 December 2018).

    One97 Communications-owned Paytm Money Gets SEBI Approval for Stock Broking

    4 April 2019
    One97 Communications-owned Paytm Money, the wealth management arm of Paytm got approval from the Securities and Exchange Board of India (SEBI) to start offering a stock broking service such as the ability to trade in equities and cash segments, derivatives, and exchange-traded funds (ETFs) among other exchange-traded products. About Paytm  CEO: Renu Satti (23 May 2017–) Founder: Vijay Shekhar Sharma Founded: 2010 Revenue: 814 crores INR (US$120 million, 2017) Parent organization: One97 Communications Subsidiaries: N.S. Mobile Technologies, Paytm Money Limited.

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