With many getting payment reminders, confusion prevails among borrowers, term-plan investors and credit cardholders over the implementation of the three-month moratorium on all loan repayments amid disruptions caused by the coronavirus outbreak. As part of measures to alleviate hardships faced by people, the Reserve Bank of India, on March 27, announced a slew of steps, including a three-month moratorium on loan repayments.
Owing to the risk perception attached with the segment by banks, the residential realty segment has been increasingly relying on non-banking financial companies and housing finance companies to raise debt financing, reports Abhijit Lele.
The problem for the NBFC sector is the funding inertia by banks and not lack of funds.
In the June quarter of FY24, 51 per cent of consumers who took small-ticket personal loans already had more than four credit products at the time of accessing yet another new loan, compared with just 17 per cent in the June quarter of FY20, points out Tamal Bandyopadhyay.
Growing business opportunities fuelled by a robust economy and an increasing number of private equity investors are prompting investment bankers to quit their jobs and turn entrepreneurs.
The Securities and Exchange Board of India's (Sebi's) proposal to re-introduce "hard underwriting" is seen as step to boost India's moribund initial public offering (IPO) markets. The regulator has proposed that in case an IPO fails to garner full subscription, the investment banker or a third-party can buy the unsubscribed shares. This practice was common during fixed-price issues prior to 1999. However, under the new book building regime, underwriting is allowed only to the extent of shortfall due to technical rejection of bids - this is referred to as "soft underwriting" and is rarely invoked.
The success of recent IPOs and the stability in the secondary market are propelling many firms and investment bankers to remove their IPO plans.
Why do we need a bad bank, owned by the banks themselves when there are at least 28 ARCs around, asks Tamal Bandyopadhyay.
The RBI left the policy rates unchanged in Tuesday''s sixth bi-monthly monetary policy review.
'In their over-enthusiasm to clean up the system, both the banks and the regulator should not forget that the key to the insolvency law is revival of companies -- recovery of bank dues is an offshoot of that,' points out Tamal Bandyopadhyay.
These together account for 40 per cent of bad loans of around Rs 4 trillion.
Officials from 22 banks made representations before the minister and his panel about the industry expectations from the next financial budget.
Fuelled by the $57.8-billion merger of HDFC twins (HDFC Ltd and HDFC Bank), M&A (merger and acquisition) transactions in India touched a record high of $124.2 billion in the first half of 2022-23. Bankers said with several transactions, including the government's stake sale in IDBI Bank and Hindustan Zinc in the pipeline, the ongoing financial year will end up as the best year for M&A activity in the country. Apart from the HDFC transaction, the $6.5-billion acquisition of Holcim stake by the Adani family and L&T's $3.2-billion acquisition of Mindtree added to the record transactions in the first half of FY23.
There will be different ways of returning the money, depending on the profile of the depositors and the amount, predicts Tamal Bandyopadhyay.
Banks, led by State Bank of India, under special schemes offer home loans at lower interest (teaser) rates to the new customers for the first few years of the credit period, which has kicked up a storm in the industry.
As per the RBI Act, the central bank should have four deputy governors - two from within the ranks and one commercial banker and the fourth one an economist to head the monetary policy department.
The possibility of key policy rate cut is not bright as industrial output grew by 6.8 per cent in January against just 2.5 per cent in the previous month.
While law-abiding customers are harassed for KYC and have to comply with endless paperwork even to open and close accounts, DHFL could easily open nearly 260,000 fake home-loan accounts, reveals Debashis Basu.
Mired in corruption, politics and with a history of suicides by its hapless depositors, PMC Bank's revival is a challenge very different from Yes Bank and LVB, both for the regulator and the rescuer, observes Tamal Bandyopadhyay.
While bankers and experts expect the lending rate to fall by about one percentage point in the near-term, the Prime Minister's Economic Advisory Council has strongly pitched for rate cut by the RBI in its monetary policy review later in the month.
Bank unions said they will not participate in the 'Bharat Bandh' on Tuesday, even as they expressed solidarity with farmers protesting against the new farm laws. Farmer groups, camping at various Delhi border points for over a week, have called for a nationwide shutdown on Tuesday to protest against three recently enacted agriculture-related legislations.
Bankers on Thursday said the status quo in the monetary stance of the Reserve Bank is largely on expected lines taken after considering the tight liquidity situation and overall cooling inflation numbers.
National Thermal Power Corporation on Thursday said it has sought offers from global bankers for arranging a syndicated loan of $100 million to part finance its capital investment during the current fiscal.
RBI deputy governor N S Vishwanathan has said the new framework was in line with the Insolvency and Bankruptcy Code guidelines.
Nirma has roped in BCG and KPMG to advise it on the fundraising options for the acquisition. The company had earlier informed banks that it would raise Rs 5,000 crore to Rs 7,000 crore in the current financial year for the acquisition. Bankers said the company will rely on its funds and future GLS dividend to repay its debt for acquisition.
With the management of most State-owned banks hardly having time to concentrate on big-ticket business, growing the business of loan disbursals has been pushed down the priority order.
Eleven companies have launched their initial public offerings (IPOs) in December 2023, making this month the second-best December for public offerings since 1996. Collectively, they are raising Rs 8,182.7 crore this month. In December 2021, 11 companies raised Rs 9,534 crore. However, excluding December 2021, this month marks the best December for IPOs since 1996.
A day after the RBI put in public domain a draft scheme of merger of Lakshmi Vilas Bank (LVB) with subsidiary of Singapore-based DBS, public sector banks' officer union AIBOC on Wednesday said the amalgamation is not in the national interest and demanded the consolidation with any PSB. The proposed amalgamation of the cash-strapped LVB with DBS Bank India seems to be a ploy to provide entry of foreign banks into the country in a big way, All India Bank Officers' Confederation (AIBOC) president Sunil Kumar said. The Indian banking sector provides huge opportunity for growth, so the foreign banks have been looking at inorganic route to expand their presence for long, he said.
FM will meet public sector bankers tomorrow in a pre-budget meet to stress on credit targets and enhancing credits to minorities.
Is the RBI unable to accept with grace that beyond 55, one can have the ability to head the compliance functions in a bank, asks Tamal Bandyopadhyay.
The finance ministry on Friday asked state governments to accord priority to employees of banks and insurance companies for Covid-19 vaccination, saying they are exposed to high risks during these difficult times.
Debit card payments remained sluggish due to the surge in digital transactions after the pandemic, and the Unified Payments Interface (UPI) has emerged as the most popular mode of money transfer, particularly for small value transactions, according to RBI data. In July 2020, the total debit card spends stood at Rs 2.81 trillion, as compared to Rs 3.15 trillion in July 2023, reflecting a growth of 11.96 per cent. UPI spends have seen a whopping growth of 428 per cent, zooming from Rs 2.90 trillion to Rs 15.33 trillion during the same period, the data revealed.
India's outward Foreign Direct Investment (FDI) nosedived to $11.12 billion in January-June (H1 2023) from $23.57 billion in the same period last year, indicative of the slowdown in the global economy, according to the Reserve Bank of India (RBI) data. The outward FDI expressed as the total financial commitment, has three components, namely equity, loan and guarantees. The sharp contraction in the commitments (outward FDI) was prominent in the April-June 2023 period.
With a potential liability of Rs 750-800 crore, sources say Clix Capital's stand on the matter would be crucial in finalising the merger valuation.
With growth rate falling and with inflation continuing to be flat expects a rate cut
According to a legal expert, the clause of 'reasonable restriction' could still mean the government can make Aadhaar mandatory for monetary transactions and therefore, for banking.
It is difficult to say if the banking sector will see the worst behind it by March 2020, warns Tamal Bandyopadhyay.
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