For now, the concerns over bad loans have taken a back seat; a bigger challenge for the banking community is credit growth, explains Tamal Bandyopadhyay.
Isn't it time to review the 'fit and proper' criteria for banking licence, particularly with reference to individuals applying for it, asks Tamal Bandyopadhyay?
Foreign banks set the template in consumer banking in its infancy, but have almost vacated this booming space.
The federal agency issued a statement, saying it has attached fresh assets worth more than Rs 35 crore that are "beneficially-owned and controlled" by the PFI "in the name of various trusts, companies and individuals" as part of its ongoing probe against the outfit and entities linked to it.
The government is considering a fresh stimulus of around Rs 20,000 crore for manufacturing companies and non-banking finance companies routed through the Stressed Asset Stabilisation Fund (SASF) Trust that is currently mandated to deal with bad and doubtful debts of IDBI Bank.
Without bringing sound governance and technical capabilities into the RBI's work, injecting new money sets the stage for a next wave of bad behaviour by banks, warns Ajay Shah.
At the heart of Paytm's slide lies the abject failure of its Super App strategy, notes Indrajit Gupta.
IDFC First Bank delivered good results in the first quarter of this financial year (Q1FY24), but some analysts are concerned the bank is fully-valued. So, there has been profit-booking after a price rise. Growth went side-by-side with a focus on cutting interest costs and exposure to high non-performing infrastructure loans. The mortgage book is 28 per cent, of which 24 per cent is home loans and loans against property.
JM Financial on Wednesday said it had a "careful and detailed review" of the Reserve Bank's order imposing restrictions on the company's financing business and asserted that there was "no material deficiencies" in its loan sanctioning process. The Reserve Bank on Tuesday imposed restrictions on JM Financial Products Ltd after it found the company indulged in various manipulations, including repeatedly helping a group of its customers to bid for various IPOs (initial public offerings) by using loaned funds. "After careful and detailed review of the order issued by the RBI on the action against JM Financial Products Ltd, we strongly believe that there have been no material deficiencies in our loan sanctioning process.
The decision by the Reserve Bank of India to introduce a unified regulatory framework on connected lending for all the regulated entities (RE) is expected to reduce the influence of business conglomerates in the Indian lending space, said bankers and experts. "Connected lending pertains to lending to related parties within the same business group. "While the RBI might appear more agreeable to allowing business conglomerates to own banking licenses, it deems it crucial to bolster regulations that would prevent conglomerate-owned banks from gaming the system," said Shivaji Thapliyal, head of research and lead analyst, YES Securities.
The facility will be available at four of Future Group's Big Bazaar outlets in Mumbai. Cleartrip will soon extend this tie-up to other Big Bazaar outlets in the city as well as other metros.
They have cited higher capital for bad-loan provisioning, pending legislative amendments, and delay in finalising rules by the Reserve Bank of India (RBI) as some of the reasons.
The country's most valuable lender HDFC Bank can perhaps no longer claim to be a favourite of foreign portfolio investors (FPIs). Two data indicators, both somewhat interconnected, point to this - the diminishing premium of HDFC Bank's American depositary receipts (ADRs) compared to local shares, and the ample investment opportunities available to FPIs in the domestic market. The ADR premium has shrunk to below 5 per cent, down from over 30 per cent in March 2021, and even lower than recent levels.
For the first time in our economic history a government has thought about more than 50 per cent of our economic activity instead of the five per cent represented by the Sensex companies, observes IIM-B professor R Vaidyanathan.
The Central Board of Direct Taxes is considering a proposal to widen the ambit of the Annual Information Return to cover cash cards issued by non-banking financing companies in the country, official sources said. The AIR currently covers seven kinds of transactions, including cash deposits in savings bank accounts of over Rs 10 lakh in a year, credit card billing of over Rs 200,000 a year and purchase of property over Rs 30 lakhs (Rs 3 million).
The finance minister asked lenders to identify eligible borrowers and reach out to them and urged for quick implementation of a sustained resolution plan for the revival of every viable business.
If the policy is extended to NBFCs and co-operative banks, they will have to disclose divergence in asset classification and provisioning during RBI inspections in their audited financial reports. Till now, these entities have been exempted from this. At present, there are more than 98,000 co-operative banks and 10,000 NBFCs. Sources said the RBI would concentrate on the top 50 co-operative banks and NBFCs.
Collateral stocks sold at huge losses as defaults mount.
According to the Central Bureau of Investigation, Gutte is one of the directors of Gangakhed Sugar and Energy Limited.
Alternative investment funds (AIFs) have not seen any significant redemptions from financial institutions even though the 30-day timeline provided by the Reserve Bank of India (RBI) to liquidate their holdings or make full provisions ends recently. Sources said the industry is awaiting certain relaxations or extensions based on the recommendations submitted to the banking regulator. On December 19, the RBI restricted financial institutions and banks from investing in AIFs where there is any downstream link or exposure to a debtor firm.
Banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years, finance minister Nirmala Sitharaman informed Parliament on Tuesday. The non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off, she said in a reply to Rajya Sabha. "Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their boards.
'Despite rising inflows, many NRIs lack awareness about NRO and NRE accounts and mistakenly use family accounts or invest in a relative's name.' 'Many are unaware of tax implications.'
Feature for feature, bank FDs are indeed better than debt funds today, mainly thanks to Ms Sitharaman, notes Debashis Basu.
The mutual fund (MF) industry has seen a fair number of new entrants in the last 10 years but none of them have proved to be much of a challenge for the larger players. The list of top 20 fund houses, which manage over 90 per cent of the industry's total assets, continues to be dominated by players who have been in the business for more than a decade. Bajaj Finserv MF may change that, say experts.
S&P Global Ratings on Monday expressed scepticism over allowing corporate ownership in banks given India's weak corporate governance amid large corporate defaults over the past few years. It also said that the Reserve Bank of India (RBI) will face challenges in supervising non-financial sector entities at a time when the health of financial sector is weak. Last week, a RBI panel had proposed that large corporate may be permitted to promote banks, as well as raising the cap on promoters' stake in private sector banks to 26 per cent, from15 per cent at present.
Religare has engaged McKinsey to help it build an emerging market investment bank.
GE Money India is looking for a strategic partner to drive scale just as it did with the State Bank of India (SBI) for its card business. It is trying to replicate its card model in its joint venture with Wizard Home Loans, a non-banking finance company from Australia.
For Indian parents, sending a child abroad for a three-year degree could deplete 48% of their retirement savings, while a four-year degree may consume up to 64%.
The governor made it clear that the RBI is aware of what's happening and acts accordingly, but doesn't make a noise about that, points out Tamal Bandyopadhyay.
A senior official with Muthoot Finance said the group would also want to apply for a universal licence.
Most NBFCs will have to slow down their loan growth. Some of the most leveraged will have to sell a part of their assets (or loan book) to banks to raise incremental capital. Others may have to knock on the door of their deep-pocketed parents.
The stock market may be at a new high this month, but there isn't much reason to cheer if the "early bird" financial results of companies are anything to go by.
DE Shaw, a global private equity (PE) and hedge fund company, is close to acquiring a 14.2 per cent stake in New Delhi Television (NDTV) for Rs 70 crore (Rs 700 million).
Discussions are on in government about how to make the process simpler for the poor and more cost-effective for telecom operators, says Subhomoy Bhattacharjee.
Many developers are facing financial challenges after the IL&FS defaults, after which non-banking finance companies - the major financiers to real estate firms - slowed disbursals.
