Operating margins have been the primary driver of corporate earnings in India in recent quarters, despite revenue growth suffering from weak consumer demand. Companies across sectors have reported a sharp improvement in earnings before interest, tax, depreciation, and amortisation (Ebitda) margins over the past two years, benefiting from lower commodity and energy prices. Higher margins more than compensated for slower revenue growth, resulting in double-digit growth in net profit for five consecutive quarters.
The government would be ironing out issues related to the controversial 'bail-in' clause in the earlier Bill, explore hiking the deposit insurance cover of customers, and decide whether the resolution framework should apply to public sector banks.
'Given the emerging trends, it may be time for India to embrace digital banking,' notes Pradipta Bagchi.
The issue will comprise a secondary share sale worth Rs 600 crore by private equity major Everstone Capital and fresh fundraising worth Rs 400 crore.
The interest rate offered by PSBs like SBI, BoB and BoI hover around 8.9 per cent-10.50 per cent. For private banks, the range is between 10.49 per cent and 12 per cent.
The finance ministry has put out a revised draft in public domain.
Homegrown e-Commerce major Snapdeal on Tuesday launched a new initiative to help sellers on its platform get easy access to working capital to help them expand their business further.
The current episode highlights the structural vulnerabilities in the liquidity management practices of Indian NBFIs
Large retailers are allegedly importing apparel made of Chinese fabric from Bangladesh at nil duty, under our free trade agreement with the latter country. However, the same agreement does not permit duty-free export from here.
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
DHFL has been generating funds through various means and has exited from its subsidiary units to tide over the current financial crunch.
Bad loans, however, continued to rise in the micro, small and medium enterprises category
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.
Goldman Sachs wanted the govt to give it a blanket approval for any further investment in non-banking financial activities in India.
Banks have started refunding borrowers the compound interest charged on specified loan accounts during the moratorium period. Last week, the Reserve Bank of India (RBI) had asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by November 5.
Nominating Das, the Banker magazine, which announced the award, said India's banks have faced a series of challenges, from non-performing loans to issues around fraud. Faced with these challenges, Shaktikanta Das has taken steps to bring banking in India up to standard via a restrained approach to governance.
The average time lag between the date of occurrence of a fraud and its detection is 23 months; for large frauds (Rs 100 crore and above), it was 57 months.
After two years of a record low interest-rate regime, Indian corporate houses are experiencing a sharp and abrupt increase in funding costs. With the Reserve Bank of India last month making an unequivocal turn towards policy tightening amid high inflation, firms looking to tap the capital markets for funds are ending up shelling out more. The yield on the benchmark triple-A-rated corporate bonds maturing in three years has climbed 98 basis points (bps) since the policy rate hike in May. It was last at 7.47 per cent, Bloomberg data showed.
With economic growth slowing to a six-year low, IMF Chief Economist Gita Gopinath says the government should undertake structural reforms such as bank clean-up and labour reforms to address the slowdown in domestic demand. She rooted for government policies focusing on managing a slowdown in domestic demand, and on boosting productivity growth and supporting employment creation in the medium term.
India will require a total investment of $10.1 trillion to achieve net-zero emissions by 2070, while the nation could face a shortfall of $3.5 trillion, a study by CEEW Centre for Energy Finance (CEEW-CEF) said. At the recently concluded COP26, Prime Minister Narendra Modi announced India's aim to achieve net-zero emissions by 2070. "India would need cumulative investments of $10.1 trillion to achieve net-zero emissions by 2070, according to an independent study released today by the CEEW Centre for Energy Finance (CEEW-CEF)," a statement said.
Reserve Bank of India on Thursday said 15 large NBFCs, including LIC Housing Finance, Bajaj Finance, Shriram Finance and Tata Sons, will be subject to enhanced regulatory requirements. The central bank has categorised NBFCs into Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL) and Top Layer (NBFC-TL). A list of 15 large Non Banking Finance Companies (NBFCs) falling in the Upper Layer category has been released.
Kolkata tops the list with 617 cancellations, New Delhi stands second with 203, followed by Mumbai at 190.
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.
India's services sector activities touched the highest mark since April 2011 amid ongoing improvements in demand conditions, even as cost pressures in the service economy remained stubbornly high, a monthly survey said on Tuesday. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 58.9 in May to 59.2 in June -- its highest mark since April 2011. For the eleventh straight month, the services sector witnessed an expansion in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
Combined net profit up 7.4% over a year ago, versus 11.2% in Q2.
The companies that have seen sharp erosion of market wealth include YES Bank, Indiabulls Housing Finance, Zee Entertainment, Vodafone Idea, and Bharat Heavy Electricals.
The problem for the NBFC sector is the funding inertia by banks and not lack of funds.
They are small town boys who went on to make it big in global financial powerhouses.
Besides low interest rates, a reduction in active Covid cases and strong high-frequency macro data have lifted the sentiment of both corporate India and the stock markets.
Reserve bank is working with the govt to bring suitable amendments in the statutory provisions
Reserve Bank Governor Shaktikanta Das on Wednesday said underlying economic activity in India continues to be strong, but external factors will cause some "dent" to the economy. Speaking at the BFSI Insight Summit 2022 organised by Business Standard, Das said the RBI tracks 70 fast moving indicators and most of them are in the "green box". It is the external sector, mired by a fear of recession or clear visibility about slowing growth in a large part of the world, where the challenges lie, he said, adding that the impact of external demand will "dent" the economy.
The bi-annual financial stability report noted that failure of an NBFC with the maximum capacity to cause solvency losses to the banking system will lead to a loss of 2.5 per cent of the total tier-I capital of the banking system.
'The aim is also to probe how the ministry and testing agencies made negligence in examining these OEMs, so that such negligence is avoided in the future.'
The broader NSE Nifty too fell over 150 points to crack below the 10,400-mark as financials, IT and energy stocks declined.
Though the fund houses have garnered over Rs 1,500 billion from investors, only 8-10 would declare their monthly FMP portfolios till a few months ago. Instead, they gave 'indicative portfolios' and 'indicative returns' to the potential investor. This month, all fund houses declared the portfolios of their schemes because of the half-yearly results. And, to the horror of many investors, the real portfolios were 80-90 per cent different from the 'indicative portfolios.'
Non-banking finance companies face renewed asset quality and liquidity risks amid a second wave of COVID-19, Fitch Ratings said on Thursday. These challenges are likely to increase if recent restrictions to contain the pandemic are expanded or prolonged, leading to greater economic and operational disruption, it added. The rating agency further said that an increase in the rate of infections and broadening of social distancing restrictions pose downside risks to its 12.8 per cent growth projection for the current fiscal.
Move to improve transparency but make liquidity more difficult to come by
Draft guidelines for Small Banks and Payments Banks were issued by the RBI in July and comments were invited till August 28.
Credit growth in the industrial sector has slowed down due to sluggish economic growth.
Bhattacharya is now more optimistic than before regarding the adoption of newer technologies, even though she acknowledges there could be short-term challenges owing to the pandemic. Salesforce is among the first global employers to take the 'no lay-off' pledge, pertaining to COVID-19.
