Ujjivan Small Finance Bank's initial public offering attracted heavy investor demand on the final day of bidding on Wednesday as the issue was subscribed a whopping 126.36 times.
New players show up after 3 years; northern states take lead in loan growth.
One of the hurdles for MFIs towards becoming banks is an unsecured loan portfolio.
Since Sanjay Malhotra took office as governor in December, the Reserve Bank of India (RBI) has adopted a more accommodative stance, which bodes well for banking and the economy as they navigate a growth slowdown, according to analysts.
Brokerages expect a further slowdown in Indian firms' revenue and earnings growth in Q4FY25, following low single-digit growth in the preceding three quarters, as factors like weak consumer demand and credit growth linger on.
The new regulations by the Reserve Bank of India (RBI) on microfinance have prompted MFIs to go for a makeover, in order to cope with the new limitations imposed on them.
Towards the end of February, the Reserve Bank of India (RBI) restored the risk weighting on banks loans to non-banking financial companies (NBFCs; including to microfinance institutions, or MFIs) to 100 - back to its November 2023 position - from 125. It is only a partial relief though. "Higher risk weighting on unsecured lending continues to be in place while the same on bank funding to NBFCs has been done away with. "This is a positive step by RBI," says Rajiv Sabharwal, managing director (MD) and chief executive officer (CEO), Tata Capital.
Engineering and construction major Larsen & Toubro (L&T) reported a 25 per cent rise in net profit attributable to the owners of the company for the January-March quarter of 2024-25, owing to higher revenues and an exceptional gain. For the quarter under review, L&T posted a consolidated net profit of Rs 5,497.3 crore, while revenue rose 10.9 per cent year-on-year (Y-o-Y) to Rs 74,392.28 crore.
'Women' as a political constituency appears to be an idea that has come of age. It is changing India in ways that we only dimly understand, asserts Aditi Phadnis.
'The Casa ratio is at 33.4 per cent, which has to keep improving. Right now, there is a bit of liquidity pressure in the market.'
The Reserve Bank of India on Wednesday decided to keep the policy rate unchanged for the tenth time in a row but changed its stance to 'neutral' that may lead to a cut in the forthcoming policies. RBI maintained status quo despite the US Federal Reserve lowering the benchmark rates by 50 basis points last month.
A Rs 525-crore contingency provision during the July-September period led to a 19 per cent fall in IndusInd Bank's share price on Friday (October 25). Contingency provisions are generally made when a lender expects more bad loans in the coming quarters. Shares of the bank on Tuesday (October 29) declined 1.53 per cent to settle at Rs 1,038.2 apiece on the BSE.
The origin of the challenge is the so-called "fresh start" process. Many in the MFI industry apprehend that such a law in India will encourage small unsecured borrowers to default and destroy the credit culture. So, while'Fresh start' is a welcome step as it will free up the debtors from the archaic laws of the colonial era, debtors need handholding and counselling to prevent any misuse, says Tamal Bandyopadhyay.
Do these events call for serious introspection about these buzz terms?
In the Union Budget for Financial Year 2023-24 (FY24), Finance Minister Nirmala Sitharaman had held forth on the need for better governance and investor protection in the banking sector. She had proposed certain amendments to the Reserve Bank of India Act (RBI Act), 1934; the Banking Regulation Act (BR Act), 1949; and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
The sharp pullback in mid and smallcap stocks signals a cooling-off period in segments that previously attracted considerable investor interest.
'I think today RBI supervision is much sharper than what it was earlier.'
Regulations have sought to address several key concerns.
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.
The Reserve Bank of India's (RBI's) State of the Economy report for October acknowledged a slowdown in some high-frequency indicators but expressed confidence in a recovery, aided by consumption demand during the festival season. "In India, aggregate demand is poised to shrug off the temporary slowdown in momentum in the second quarter of 2024-25 as festival demand picks up pace and consumer confidence improves," said the report released on Monday.
India's leading microfinance firm, SKS Microfinance, made a decent debut on the Bombay Stock Exchange at Rs 1.036, up 5.17 per cent over its issue price.
With these four, the strength of the members -- all equivalent to ministers -- in the interim government's advisory council rose to 21.
'We have seen something do very well when the times are good but maybe not as well when the times are bad.'
Trumponomics, poor growth, and high valuation certainly don't make a bullish recipe for Indian markets, warns Debashis Basu.
A week after SKS Microfinance was listed on BSE, many of the employees are finding themselves in the league of millionaires.
Activists created a climate of opinion against MFIs, while politicians capitalised on the frenzy.
Bansal has picked up a majority stake in Chaitanya Rural Intermediation Development Services, a company which runs microfinance institution Chaitanya India Fin Credit.
Corporate bond issuances fell by around 22 per cent in August, despite easing yields as issuers delayed raising funds awaiting the US Federal Reserve to start cutting interest rates from this month. Corporates and financial institutions expect yields to fall further and borrowing costs to become cheaper, said market participants. The US Fed is widely expected to cut interest rates by 25 bps in the 17-18 September meeting, marking the start of a downward interest rate cycle.
Finance Minister Nirmala Sitharaman on Tuesday announced the doubling of the upper limit of Mudra loans to Rs 20 lakh to promote entrepreneurship in the country. "The limit of Mudra loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the 'Tarun category', she said while presenting the Budget in the Lok Sabha.
Life has come full circle for Nobel laureate Professor Mohammad Yunus, who faced persecution during Sheikh Hasina's regime for embezzlement, is now all set to head of the interim government in Bangladesh after she resigned and fled the country.
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.
'The focus needs to shift towards the ability to collect payments, particularly in tier-3 to tier-4 areas where acceptance is still lacking.'
'We need to be far more careful given the fact that while this is group lending, it's essentially unsecured.'
The April-June quarter (Q1) of the current financial year (FY25) may be soft for banks with loan growth moderation, net interest margin (NIM) pressures, and higher staff and credit costs inching up, according to analysts. Credit growth could ease due to the lagged impact of the Reserve Bank of India (RBI) tightening and deposit growth has weakened, and the current account and savings account (CASA) ratio has declined 10-370 basis points (bps) quarter-on-quarter (Q-o-Q) for many banks.
'There will be 200 ITIs developed as hubs, while 800 will be developed as spoke, connected with five National Skill Training Institutes.'
The top 50 exposures, amounting to Rs 7.8 trillion, of government-registered non-banking financial companies (G-NBFCs) constitute about 40 per cent of corporate credit within the NBFC sector, indicating concentration risk, according to the Reserve Bank of India's report "Trend and Progress of Banking in India 2022-23". Notably, all the 50 are tied to the power sector, a domain fraught with inherent challenges, the report said. The report highlighted recognising the escalating systemic importance of G-NBFCs, the Prompt Corrective Action (PCA) framework had been expanded to include G-NBFCs excluding those falling within the base layer.
Microsoft co-founder Bill Gates on Tuesday met Reserve Bank of India Governor Shaktikanta Das and discussed various issues including financial inclusion, payment systems, microfinance and digital lending among others. "Mr.@BillGates visited RBI Mumbai today and held wide ranging discussions with Governor @DasShaktikanta #RBI #rbitoday #rbigovernor #shaktikantadas #BillGates," RBI said in a tweet. Gates Foundation pursues a lot of activity in India including promotion of financial inclusion, health sector and climate change.
More than half a dozen companies will hit the market with their initial public offerings (IPOs) between now and the end of next week. The cumulative amount raised from these IPOs is expected to be around Rs 8,000 crore. Stationery products firm DOMS Industries and home financier India Shelter Finance's IPOs - of Rs 1,200 crore each - got off to a flying start on Wednesday (December 13), with the former garnering over six times the subscription and the latter getting 1.5 times subscribed.
The Reserve Bank on Monday barred IIFL Finance Ltd from disbursing gold loans, with immediate effect following multiple supervisory concerns, including serious deviations in assaying and certifying the purity of the yellow metal. A leading financial services provider, IIFL Finance offers a range of loans and mortgages. The latest directions from the Reserve Bank of India (RBI) pertain to only the gold loan business.
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