This is following revival of demand from the corporate sector and small and medium enterprises (SMEs), even as a nascent economic recovery is taking shape. Credit growth of scheduled commercial banks had accelerated to 9.2 per cent year-on-year (YoY) by the end of December 2021 after breaching the 7 per cent-mark in November, for the first time since April 2020.
Initial public offering (IPO)-bound Life Insurance Corporation (LIC) of India's assets under management (AUM) increased to Rs 38 trillion as of September 2021, compared with Rs 37 trillion as of March 2021, said sources in the know. Its AUM is almost 3x the AUM of all the private life insurers in the country and over 15x more than the AUM of the second largest life insurer, SBI Life, as of September 2021. SBI Life's AUM was approximately Rs 2.4 trillion as of September 2021, said sources.
In the quarter gone by (Q3 of FY22), private lender HDFC Bank issued around 950,000 credit cards, its highest ever credit card issuance in any single quarter. Since the Reserve Bank of India (RBI) revoked the embargo on it in August 2021 to issue new credit cards, the lender has issued 1.37 million credit cards. This is according to a senior bank executive, who was present in an analysts' call after the lender's Q3 earnings. In Q3, we achieved the highest ever issuance, with 950,000 card issuances.
Banks and companies in India are taking a cautious approach towards Sri Lanka, which, reeling from a financial crisis, has sought a $1-billion loan from the country to import essential commodities. A senior State Bank of India (SBI) executive said the bank was committed (to Sri Lanka) for the long term. "As far as exposures (are concerned), the bank will be cautious on its dollar exposure to Sri Lankan entities till the situation improves," he said.
With Covid-19 cases across the country rising rapidly once again, demand for health insurance products has spiked. Insurers are seeing an uptick in inquiries for such products and underwriting more premiums in the segment. Already, health insurance was growing at a rapid pace since the onset of the pandemic as awareness around risk had heightened among consumers. But the country recorded more than 600,000 Covid-19 cases in the past week, which is almost a six-fold rise than the previous week. Owing to this, the spike in demand for health insurance products is inevitable, experts said.
2.75 million of the 3 million Covid-related health claims were settled.
The Reserve Bank of India (RBI) will stay away from changing key rates - including the reverse repo rate - this fiscal in the backdrop of Omicron. However, it will continue to shape the rate movements through liquidity market operations. Soumya Kanti Ghosh, group chief economic advisor, State Bank of India, said whether Omicron surge or not, there is not going to be any hike this year. However, the central bank may continue to shape rates through market operations.
At a closed-door meeting with global investors, the largest asset manager in the country boasted of its nearly Rs 37 trillion assets under management (AUM) - 16.6 times that managed by the second-largest insurer SBI Life. The numbers are as of March 31, 2021. The assets of LIC are 1.2 times the net assets of the entire Indian mutual fund industry, which had AUM of Rs 31.43 trillion as of March 31, 2021 (about Rs 37.3 trillion until November this year). The standalone assets that LIC manages are equal to 18.7 per cent of India's GDP and worth more than gross domestic product (GDP) of the UAE, Bangladesh, Malaysia, Singapore, Hong Kong, South Africa, New Zealand, and Pakistan.
They straddle many different (non-financial) lines of business with sometimes opaque overarching governance structures.
The asset quality of non-banking financial companies (NBFCs) deteriorated in April-September 2021 (H1FY22) owing to the second wave of the pandemic. Their gross non-performing assets (NPAs) rose to 6.8 per cent in September 2021 from 6 per cent in March 2021. The Reserve Bank of India's (RBI's) annual Trend and Progress report (FY21) said the sector might have to grapple with higher delinquencies as and when policy measures unwound. The pandemic posed significant challenges to NBFCs during the first wave (2020) also.
'The ship has been stabilised.' 'For the last 6-7 quarters, profitability is stable around Rs 250-Rs 300 crore.'
RBL Bank's interim chief executive officer (CEO) and managing director (MD) Rajeev Ahuja on Sunday tried to allay concerns around the health of the bank. He said events during the weekend are not linked to RBL's asset quality. The bank said Vishwavir Ahuja, its managing director (MD) and chief executive officer (CEO), had on Saturday proceeded on leave with immediate effect on medical grounds.
For the first time in 21 years, the Reserve Bank of India (RBI) will revise norms for investment portfolios of commercial banks to reflect changes in global standards on valuation and measurement, and progress in the domestic market. This could pave the way for banks to transition to the new accounting standards (Ind-AS). The outstanding investment portfolio of commercial banks was at Rs 45.84 trillion as of November 19 this year.
Life insurers' new business premium (NBP) reported stellar performance in November after a poor showing in October, on the back of strong growth in group single premiums for both private insurers and Life Insurance Corporation (LIC) of India. In November, 24 life insurers, including LIC, reported NBP to the tune of Rs 27,177 crore, up 42 per cent year-on-year (YoY) from the year-ago period. Private insurers' NBP rose 58.63 per cent YoY to Rs 11,209.75 crore as group single premiums more than doubled during this period.
Reliance Power (RPower) has defaulted on payment of interest worth Rs 1.17 crore to DBS Bank India and Rs 44 lakh to IDBI Bank. It failed to pay up interest on October 30, 2021. The firm, part of the Anil Ambani-promoted Reliance group, in filing with BSE, said it has term loans and working capital arrangements with three lenders - YES Bank, IDBI Bank and DBS. Its stock closed 1.41 per cent lower at Rs 12.6 per share on the BSE on December 1. About exposure of YES Bank, there is a 'standstill' applicable till December 26, 2021.
Banks are set to sell dud-loans worth Rs 90,000 crore of 22 firms in the first tranche to the National Asset Reconstruction Company (NARCL). It's reason for cheer given that such sales to asset reconstruction companies (ARCs) have been poor in recent times. In fiscal 2020, their assets under management (AUM) contracted by 4 per cent; and in fiscal 2021, it fell by another 100 basis points to Rs 1.07 trillion. So, why are we where we are?
Life insurers, on the prodding of global reinsurers, are set to hike premiums on term plans because rising mortality after the second wave of the pandemic has led to an increase in the number of settlements. Some will do so next month while others may wait till January. Global reinsurer Munich Re had nudged its insurance partners on the hike in September and insurers have been engaged in negotiations with the reinsurer on the amount of the increase. Term plan prices in India were among the lowest in the world for a long period but in the past couple of years, they have been increased a few times.
'I hope the trend is sustainable and that economic activity accelerates going forward.'
'Last year (FY21), we had about 1 million intimated claims for Covid.' 'This year (FY22), in six months, we got about 1.6 million claims.'
Rapid strides in digital payments notwithstanding, the Indian economy will likely remain cash-dependent for many years to come, at least that's what the automated teller machine makers and cash logistics companies are betting on. After growing at over 20 per cent for most of 2020, currency in circulation growth fell to 8.5 per cent as of October 29 this year, shows data from the Reserve Bank of India (RBI). The reason for the steep rise in currency last year was the uncertainties related to the Coronavirus (Covid-19) pandemic, where people preferred to hoard cash to meet exigencies.
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