The Reserve Bank on Thursday asked card companies not to issue unsolicited credit cards or upgrade an existing card without the explicit consent of the customer, failing which they will have to pay double the billed amount as penalty. It also asked card issuers and third-party agents not to resort to intimidation or harassment during recovery of dues from customers. In its master directions on credit card and debit card issuance, the RBI said "the issue of unsolicited cards/upgradation is strictly prohibited".
'Even where we are now today, the growth rates are very good, but we need to get to 8-9 per cent growth in the years to come.'
With funds more readily available, Fitch expects a portion of stalled housing projects to resume construction, and this will feed into its forecasts for India's buildings sector growth in the short term.
The company also expects to benefit in its proposed banking foray through partnership with Japan's Sumitomo Mitsui Trust Bank and Nippon Life Insurance
The RBI's decision to tighten norms for unsecured personal loans is credit positive because lenders will need to allocate higher capital for such loans, thus improving their loss-absorbing buffers, Moody's Investors Service said on Monday. The Reserve Bank last week raised risk weights on unsecured retail loans, credit cards and lending to non-banking finance companies (NBFCs) by 25 percentage points. Moody's said unsecured loans have been growing rapidly in the past few years, exposing financial institutions to a potential spike in credit costs in case of sudden economic or interest rate shocks.
Based on a feedback, the exchange could cap a sector's weight at 25 per cent, or align with the broader market.
The financial services sector, including NBFCs and housing finance companies (HFCs), have historically been the largest borrowers from MFs.
While the government has infused huge capital into PSBs, the same has largely been used to mitigate losses and has failed to contribute meaningfully to credit growth.
Gujarat and Karnataka have been ranked as the best performers in developing startup ecosystem for budding entrepreneurs, according to the ranking of states and Union territories by the Department for Promotion of Industry and Internal Trade (DPIIT). Among smaller states having population of less than one crore, Meghalaya has been adjudged as the best performer. The rankings are based on the initiatives taken to develop the startup ecosystem for promoting budding entrepreneurs.
'Das is friendly, but he finally does what he does. The quality of engagement is very good.'
GE Commercial Finance, which has an asset base of more than $230 billion globally, is planning to increase its exposure in the Indian market.
Noted banker Uday Kotak said the country's financial system is currently in a Darwinian mode as only the fittest lenders are able to survive. Kotak also said that historically, whenever there has been a problem with a private sector lender, it has been merged with a state-run bank.
The combined profit before tax of 748 companies, which have declared their results for Q1FY21, is down 46 per cent YoY. Their net sales went down by a quarter as the Covid-19 lockdown led to a sharp fall in economic activity.
In 2009, the UPA government, had announced a slew of measures to boost liquidity in NBFCs. These included a scheme for providing liquidity support to NBFCs having assets size of over Rs 100 crore through a SPV.
The bottom lines of several private sector banks have taken a hit following the recent guidelines released by the Reserve Bank of India (RBI) on alternate investment fund (AIF) investments. Last month, the RBI announced that regulated entities, such as banks, non-bank lenders, and home financiers, cannot invest in AIFs that have directly or indirectly invested in companies that have borrowed money from the lenders. In case an entity had already made such an investment, they must liquidate the investment or make 100 per cent provision, RBI had said.
Companies don't have to be in the field to nudge people to return money they owe lenders.
Industry players believe the new DFI model will be initially risk capital, which will then be used to mobilise additional resources from development agencies such as World Bank.
'FDs should hold your emergency funds, equivalent to around 6-12 times your monthly expenses.'
Religare has engaged McKinsey to help it build an emerging market investment bank.
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.
The protocol aims to "democratise" lending, reduce costs of credit, and ensure accessibility of credit to small companies and street vendors, according to Nandan Nilekani.
In January, Visa's chief executive officer, Al Kelly, said during an earnings call that "there's been a burst of the balloon in valuations in the fintech world". Noting that the trend of lower valuations "is a helpful characteristic of the current environment", he added: "We will look for capabilities and management teams that will bring more value to Visa than we can bring ourselves." Data from KPMG's Pulse of Fintech H2'22 shows that global fintech investment - via mergers and acquisitions (M&As), private equity (PE) and venture capital (VC) firms - at $164.1 billion in 2022, was down 31 per cent over the year before. Indian fintechs held up better during this timeframe, attracting $6 billion, or a fall of 24 per cent.
'There is still scope for selective stockpicking.'
'The shadow banks are currently facing a liquidity and solvency crisis.' 'The danger is that it could potentially engulf the entire financial system because shadow banks have borrowed huge amount of money from banks, mutual funds, pension funds, and insurance companies.'
the three investors that have submitted their final bids are not commercial banks. Among the three, one is a non-banking financial company. Another distinctive feature of the revival is that PMC may lose its cooperative bank characteristic after its reconstruction.
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.
Invest only if you wish to go overweight on the sector.
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.
The legislation is being implemented by the Corporate Affairs Ministry. Many provisions of the new law came into effect from April 1.
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.
With liquidity crunch hitting operations, many finance companies have put the brakes on sanctions in the third quarter in the aftermath of the IL&FS crisis.
Going by the current pace, IT firms are likely to exceed the manufacturing sector in salary payouts over the next five years.
Banks, through the Indian Banks' Association, have urged RBI and credit information companies to maintain a database of wilful defaulters.
Keep regular track of financials, including cash flow and management changes
'Banks, fund managers, NBFCs, rating agencies, those buying into debt funds -- all of them will have to watch their step as India's financial system enters a new phase,' warns T N Ninan.
Shares of Motilal Oswal Financial Services, Edelweiss Financial Services and IIFL Holdings have all doubled in the past one year against the Sensex's 23 per cent gain.
'The ship has been stabilised.' 'For the last 6-7 quarters, profitability is stable around Rs 250-Rs 300 crore.'
In India, economic activity slowed substantially in 2019, with the deceleration most pronounced in the manufacturing and agriculture sectors, whereas government-related services sub-sectors received significant support from public spending, the Bank said.
'In the short-term, the markets may be affected' by the review but 'it will help address what they are worried about which is why we need transparency,' says former chief economic advisor.
Anil Ambani Dhirubhai Group company Reliance Capital Ltd on Tuesday posted over a three-fold rise in net profit after tax at Rs 94.53 crore (Rs 945.3 million) for the quarter ended June 30.
