Commercial banks have turned cautious in lending to smaller microfinance institutions (MFIs), which has compelled the latter to borrow from non-banking financial companies (NBFCs) at much higher rates. Recently Reserve Bank of India (RBI) Deputy Governor M Rajeshwar Rao slammed micro lenders for increasing their margins "disproportionately" and said these lenders were quick to pass on the increased cost to the borrowers but reluctant to pass on the benefits under the new regime, where margins are not capped.
'Other sectors that manage the savings pools of Indians are giving tough competition to life insurance companies.'
New players show up after 3 years; northern states take lead in loan growth.
The Reserve Bank of India (RBI) has barred four non-banking finance companies (NBFCs), including two microfinance institutions (MFIs), from sanctioning and disbursing loans for charging exorbitant interest rates to the borrowers. These four entities are Asirvad Microfinance, Arohan Financial Services (also an MFI), DMI Finance, which provides personal, consumption, and micro, small and medium enterprises loans, and Flipkart co-founder Sachin Bansal's Navi Finserv, which offers home and personal loans. The ban will take effect on October 21 to "facilitate closure of transactions in the pipeline", the regulator said in a statement.
Mint Road, on December 21, 2023, flagged the role of self-regulatory organisations (SROs) in strengthening the compliance culture in regulated entities (REs) and providing a consultative platform for policymaking. It also decided to issue an omnibus framework for SROs.
UPI has catapulted India into the forefront on the global digital payments landscape. Working hand in hand, the AePS payments system is making life easy for rural folks, notes Tamal Bandyopadhyay.
Micro-finance institutions (MFIs) are planning to take legal action against YES Bank's move to recall a part of its loans to them.
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.
ICICI Prudential Life Insurance (IPRU) disappointed the market even though some analysts said the Q3FY25 results were in line. Most analysts cut margin estimates. The insurer reported M9FY25 growth of 8.5 per cent year-on-year (Y-o-Y) in value of new business (VNB) premium to Rs 1,575 crore, while total annual premium equivalent (APE) grew 27.2 per cent to Rs 6,910 crore.
'We need to be far more careful given the fact that while this is group lending, it's essentially unsecured.'
In December 2016, RBI had granted additional 60 days for repayment of certain loans
Industry experts estimate that demand for loans from the sector outstrips supply by more than $80 billion.
MUDRA bank will help microfinancing firms to lend more.
One of the factors behind the rise in securitisation deals was State Bank of India's (SBI) decision to buy portfolio worth Rs 45,000 crore from NBFCs
Industry fears waiver of interest on interest would distort credit culture, may encourage borrowers who can pay to defer repayment.
Race for Asia's No. 1 MFI spot: Bandhan now closes in on Grameen Bank
Even today, many MFIs already distribute pension and micro insurance products to low-income households.
For smaller MFIs, resuming operations is more difficult because they haven't got any fresh bank credit sanctioned from their lenders.
These banks are finding it hard to pick up seasoned bankers at the pay they are offering
A vast majority of borrowers are in the essential services' supply chain with tiny and micro businesses, and this has sprung back.
India's biggest non-bank finance company, Bajaj Finance (BAF), is set to raise capital after a gap of four years. On October 5, the board of directors will meet to approve the fund raise by way of preferential issue and/or qualified institutional placement (QIP) subject to regulatory and shareholder approvals. The move, analysts said, comes ahead of expectations, and could be in the wake of simmering competition in the consumer lending space, especially with the launch of Jio Financial Services (Jio Fin). "While we still do not have finer details on the game-plan of Jio Financial, it has plans to initially foray into consumer and merchant lending.
The two-wheeler sector has been underperforming its peers on the volumes front for over five quarters now. Even in the March quarter, Bajaj Auto and Hero MotoCorp posted a 17-24 per cent YoY decline in volumes, the sharpest in the listed auto universe. The ongoing impact of frequent price hikes, all-time high fuel prices, and muted rural sentiment has led to the lacklustre showing by two-wheeler makers. What has aggravated the situation for two-wheeler companies, which get almost all their sales from the internal combustion engine or ICE-based units, is the traction for electric two-wheelers (EV).
While the total disbursement of housing loans by PSBs as well as HFCs witnessed a deceleration in 2016-17, there was significant growth for the lower slabs
'The focus needs to shift towards the ability to collect payments, particularly in tier-3 to tier-4 areas where acceptance is still lacking.'
In 2012, Akula quit as chairman of Bharat Financial Inclusion (formerly SKS Microfinance), which he'd founded and led to a successful initial public offering
The niche banks - small finance and payments banks -have been set up to further the regulator's objective of deepening financial inclusion.
A bunch of CEOs in their mid-30s and early 40s are trying to rectify the scenario where shady lending applications trap hapless borrowers with astronomically high interest rates and even bodily harm if the money was repaid. Anup Roy reports.
Some believe the shift to mobile-based transactions will be seamless considering that the urban tele-density is 148%. In rural areas, it is touching 51%. But smartphone penetration in India is a mere 12%. Growth of mobile money has been extremely slow: It is currently 1%.
Upcoming payment banks will lift lower income groups in distant villages.
The first stage of the inclusion strategy was focussed on opening bank accounts, logically seen as creating the last-mile channels for financial access.
Invests $50 mn in 11 entities in just over a year, commits $25 mn more; prefers putting money in firms trying to solve India-specific problems
Pushpal Shinde now earns some Rs 50,000 a month.
Two key depts in ministry cold to rationale for one; postal dept says it's more eligible than IDFC or Bandhan, feels 'strong lobby' scuttling its plans.
Tamal Bandyopadhyay offers some unsolicited advice for a government wh,ich came to power, with brute majority and the nation's pragmatic chief money man.
Ajay Banga, the 55-year-old CEO of MasterCard, is on a roll.
India Inc has few leaders who are likely to grab headlines in 2015.
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