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.
India is much better placed today to deal with future waves of the pandemic relative to the first wave, RBI deputy governor Michael Patra said.
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.
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 future of cryptocurrencies in India appears uncertain but that has not deterred young Indians from embracing the so-called 'fourth industrial revolution' world, where interconnectivity and smart automation, much of it relying on blockchain technology, drive human civilisation. Reserve Bank of India (RBI) Governor Shaktikanta Das has repeatedly warned of macroeconomic instability and even "serious consequences" if cryptocurrencies turn mainstream. The country's monetary authority wants a China-like total ban on crypto, not even allowing these currencies to be treated as investments. Though Parliament's website had listed the Cryptocurrency and Regulation of Official Digital Currency Bill as one seeking a total ban of cryptocurrencies in the country, it was not presented in the Winter Session. India now has the highest number of cryptocurrency investors in the world.
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 Indian financial system's asset quality improved despite the pandemic, but it could be due to special dispensations by the regulator, and banks would likely see increased stress on their books once the schemes expire. According to the annual trend and progress report of the Reserve Bank of India (RBI) released on Tuesday, the data available for this financial year so far indicate that banks' bad debts have moderated while provision coverage ratios (PCRs), capital buffers as well as profitability indicators have improved relative to pre-pandemic levels.
'The ship has been stabilised.' 'For the last 6-7 quarters, profitability is stable around Rs 250-Rs 300 crore.'
Reserve Bank of India (RBI) deputy governor M Rajeshwar Rao on Wednesday defended the central bank's decision of not allowing industrial houses to float banks, and said more deliberations are needed before RBI changes its stance on this issue agreed back in 2001. An internal working group (IWG) of the RBI had recommended allowing industrial groups into banking, but late last month the RBI said it kept on hold the two recommendations of allowing industrial houses and large non-banks to float banks. However, RBI had accepted 21 of the 33 recommendations of the group that submitted its report a year ago.
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.
The draft amalgamation scheme of Punjab and Maharashtra Co-operative (PMC) Bank with Unity Small Finance Bank (SFB) allowed quick relief to depositors with savings of up to Rs 5 lakh, but a long wait for those who had their nest egg with the scam-tainted bank. If the scheme gets approved, 96 per cent (or 880,000 of 924,000) depositors will get their full money straightaway after PMC is merged with Unity SFB. According to the draft scheme, retail investors may get up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) instantly, and then some more in phases till they can recall their full deposits after 10 years.
The Reserve Bank of India's retail direct scheme is off to a good start but the central bank itself sees it as an additional avenue and not an alternative to the existing one. Still, a reasonable expectation is to have at least 100,000 investors within a month of it being operational, and that could be well under way, if the latest trend is to sustain. The registration in the retail direct platform has crossed 35,000.
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.'
The Reserve Bank of India (RBI) unions have decided to intensify their stir demanding revision of wages, pending since November 2017, and have called for mass casual leave of employees at the central bank on November 30. However, several sources in the RBI told Business Standard that the unions may not have to go on agitation, as the new contours of the wage pact have been almost finalised and could be announced any time. An email sent to the RBI was not answered. The United Forum of Reserve Bank Officers and Employees had deferred its agitation earlier after it was told that RBI Governor Shaktikanta Das was to hold talks with the human resource management department (HRMD).
'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.
'There will be partnerships between banks and fintech firms, but there will also be areas where they will be direct competitors.'
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