The draft digital personal data protection (DPDP) rules, which require banks to obtain explicit consent from their customers before using their data for purposes beyond the original intent, although is being followed in spirit, leaves no room for regulatory arbitrage, experts said. They said that the potential business impact is difficult to assess at this stage, but the formalisation of these rules will mean banks now need to establish clear data processing agreements with third-party entities to ensure compliance.
Shares of state-owned bank stocks were under pressure on Monday due to muted deposit and credit growth numbers reported by these lenders in the October-December quarter (Q3) of 2024-25 (FY25). The Nifty PSU Bank index was down 4 per cent, with Union Bank of India emerging as the biggest loser as its shares fell 7.5 per cent to close at Rs 114.7, followed by a 5.7 per cent drop in shares of Bank of Baroda (BoB) to Rs 228 and a 4.7 per cent slide in shares of Bank of India to Rs 99.8 on the National Stock Exchange.
'Health and motor insurance will continue to be our two most important segments'
In 2025 banks are in for challenges such as pressure on margins and slowing credit growth. With the likelihood of a repo rate cut in February or April, external benchmark-linked loans of banks will be repriced immediately. However, deposit rates are expected to adjust more gradually, which could impact the net interest margin (NIM) - a key measure of profitability for banks.
In 2025, Indian firms may face higher premiums for fire and engineering insurance covers as reinsurers are likely to revise rates due to rising claims from catastrophic events and higher loss ratios, according to people in the know.
'Challenge is basically near-term growth as the outlook has turned a bit adverse.'
'We have seen something do very well when the times are good but maybe not as well when the times are bad.'
Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday said the central bank has developed an innovative artificial intelligence and machine learning (AI/ML) based model MuleHunter.ai to address the growing issue of mule bank accounts that are often used for committing financial fraud. Developed by the Reserve Bank Innovation Hub, the new initiative is piloted with two public sector banks.
In FY24 alone, 1.34 million fraud cases were reported, amounting to losses of Rs 1,087 crore.
It is similar to top-up health insurance plan, but provides for one or more claims cumulatively crossing the threshold limit.
'Within India, people want high-quality, personalised banking services, and the demand for such services has exploded.'
Credit card spending reached Rs 2 trillion in October, a 14.5 per cent rise from September, largely driven by festival season purchases. However, the volume of outstanding credit cards increased only marginally during the same period. The spike in spending comes at a time when nearly all major credit card issuers are calibrating their growth in the segment due to visible signs of stress.
Life insurers shifted their focus to selling high-value policies in October as the transition to new surrender value norms, effective October 1, limited their ability to roll out all products in their portfolio. This led to a 40 per cent year-on-year (Y-o-Y) drop in the number of policies sold in October. Additionally, distributors engaged in a fire sale of policies in September due to uncertainty about the impact of the new norms on their commission structures.
State Bank of India (SBI), India's largest lender, is looking to raise Rs 10,000 crore through 15-year infrastructure bonds as early as next week, said multiple sources aware of the development. Market participants expect a coupon in the range of 7.15-7.18 per cent for SBI's upcoming infrastructure bond issuance. This comes as demand for longer-tenor papers has remained strong in recent domestic capital market offerings.
Even as the high inflation figure for October has ruled out any possibility of a rate cut by the Reserve Bank of India's (RBI's) monetary policy committee (MPC) in December, a rate cut in February also looks uncertain due to global uncertainties. Economists told Business Standard that unless domestic growth slows markedly, the outlook on rate cut remains unclear. India's headline inflation touched a 14-month high of 6.2 per cent in October, breaching the MPC's upper tolerance band of 6 per cent.
State-owned Life Insurance Corporation of India (LIC) has realigned its commission structures for its distributors in accordance with new surrender value norms but has no plans to introduce any "clawback", it said in a post-earnings analyst call on Friday. "It depends on our experience because the new products have been filed from October 1," said Siddhartha Mohanty, managing director and chief executive officer. The insurance regulator has revised the surrender value norms, and the revised ones came into effect on October 1.
Life insurance companies reported a 13.16 per cent year-on-year (Y-o-Y) growth in new business premium (NBP), totting up Rs 30,347 crore in October, even as the number of policies sold saw a sharp decline. The growth was largely driven by strong performance from private sector life insurers.
The government has invited applications for the post of deputy governor of the Reserve Bank of India (RBI) from interested candidates with at least 25 years of experience and below 60 years of age as on January 15, 2025. One of the deputy governors, Michael Patra's current term will end on 15 January. The last date of submission of applications is November 30, 2024.
Credit card spending in September recorded strong growth of 25 per cent year-on-year (Y-o-Y), marking the highest increase in six months. Even as many banks saw higher slippages during the July-September quarter of 2024-25, spending growth exceeded 20 per cent for the first time since February. According to the latest data released by the Reserve Bank of India (RBI), September spending reached Rs 1.76 trillion, compared to Rs 1.42 trillion in the same period a year ago. In August 2024, credit card spending was Rs 1.68 trillion.
'Margins will be an outcome of that. They will likely remain somewhat range-bound.'
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