For automakers, the festive season is about raking it in through ramped up sales and attractive consumer offers. However, despite the robust demand, what may spoil the party this year is a global shortage of semiconductors.
The need to maintain people's confidence in digital banking resulted in the action against HDFC Bank for service outages, RBI Governor Shaktikanta Das said on Friday and exhorted lenders to invest more on the technology front.
The Indian financial system's asset quality improved despite the pandemic, but it could be due to special dispensations by the regulator, and banks would likely see increased stress on their books once the schemes expire. According to the annual trend and progress report of the Reserve Bank of India (RBI) released on Tuesday, the data available for this financial year so far indicate that banks' bad debts have moderated while provision coverage ratios (PCRs), capital buffers as well as profitability indicators have improved relative to pre-pandemic levels.
In order to make it hassle-free, various start-up support groups such as TiE (The Indus Entrepreneur) and India Angel Network (IAN) are partnering with the digital NBFCs to extend debt finance to their member companies.
Reserve requirements, mandatory investment in G-secs under Companies Act may slow lending for HNI investment in IPOs.
While the bond market is relatively conservative about their interest rate expectations, the currency market seems to be projecting that interest rates should be much sharper
Asset quality of banks, which saw some improvement in the second half of 2020, is likely to worsen during the first six months of 2021, according to a survey. The findings are part of the 12th round of bankers' survey carried out by FICCI-IBA between July and December 2020. The survey was conducted on 20 banks, including public sector, private sector and foreign banks, representing about 59 per cent of the banking industry, as classified by asset size.
Banks are not allowed to lend to developers for purchasing land parcels.
Digital lending apps extend small amounts at exorbitant rates. Payment delays invite messages to customer or close family members, often with sensitive information such as Aadhaar and PAN Card scans.
The Nifty Bank index has come off 15 per cent from its peak in February, underperforming the benchmark Nifty which is down 6%.
Moody's Investors Service on Thursday said loans to retail customers, especially those to low-income borrowers, will remain most affected due to the shock caused by the coronavirus pandemic. Despite the pandemic challenges, asset quality at Indian banks has performed better than expected at the start of the outbreak, Moody's said. "Corporate loans, in particular, have performed well because banks prior to the pandemic had largely provisioned for legacy problem loans and tightened underwriting standards," Moody's vice president and senior credit officer Srikanth Vadlamani said. Addressing an online conference organised by Moody's and its affiliate Icra, Vadlamani said an increase in non-performing loans in both public and private sector banks is subdued.
The strict curbs, including a curfew from 8 pm till 7 am, and prohibitory orders during the daytime on weekdays came into force from Monday in the state.
Mahesh Nandurkar, executive director and India Strategist at CLSA, talks to Puneet Wadhwa ahead of their 21st India Forum on his interpretation of how the markets have played out over the past few months, the road ahead, and his sector preferences in this backdrop.
Troubled Vodafone Idea Ltd (VIL) has filed a review petition in the Supreme Court after the apex court recently dismissed its plea for rectification of the alleged errors in the calculation of adjusted gross revenues-related dues. In the petition, filed earlier this week, VIL has said it is "a travesty of justice" that the company is restrained from questioning the arithmetical errors/ omission which are going to cost it about Rs 25,000 crore (Rs 5,932 crore of principal plus interest, penalty and interest on penalty). VIL has said its contentions have been rejected by the order under review and added that this denial could result in the company going under and its about 27.3 crore subscribers being left "high and dry".
Risk aversion is currently a dominant depressant to economic recovery, points out Shankar Acharya, former chief economic advisor to the Government of India.
A user just needs to download any app floated by such fraudsters and apply for instant loans. These apps are mainly concentrated on Google Play considering the reach and popularity of Android systems.
The BJP member also sought to put the LVB-DBS merger on hold in order to facilitate a forensic audit of the takeover of the assets of both banks.
The government plans to bring down its stake to 26 per cent in these two banks, which are yet to be identified. This may not come in the way of getting investors for these banks, provided the government is willing to step back rather than run them the way it had been doing for over five decades since these banks were nationalised, points out Tamal Bandyopadhyay.
The RBI working group's proposal to allow corporate houses to set up banks is a 'good-looking' step in a 'bad direction' and may lead to crony capitalism and eventual financial instability, former chief economist of World Bank Kaushik Basu said on Thursday. Basu further said that there is a good reason why all successful economies have a clear dividing line between industries and corporations on the one hand, and banks and lending organisations on the other.
'The fact that housing units worth a whopping Rs 4.5 lakh crore in top seven cities are stuck under various stages of non-completion indicates that there is a dire need to create stress-asset fund which will help bail out lakhs of distressed homebuyers,' says Anuj Puri, Chairman, Anarock Property Consultants, a real estate services company.
Progress on the steps taken by Governor Shaktikanta Das' predecessor Urjit Patel to restore financial system integrity will be a key thing to assess any damage to the institution, Subramanian said.
Now, non-banking finance companies can give a loan up to 75 per cent of the gold value; the previous limit was 60 per cent.
The optimism stems from benign fuel prices, adequate and well distributed rainfall and the recent measures announced by the government to boost liquidity at banks and NBFCs.
'In times of recovery, we may see a rural-urban divide with the urban pockets affected more by COVID-19, but the MFI business model should encourage banks to handhold them in this hour of crisis,' notes Tamal Bandyopadhyay.
'Q1 is going to bear the brunt of the second wave, exposing full-year GDP forecasts to downward revisions, unless phase-3 of vaccination is executed quickly.'
After the NHB asked housing finance cos to desist from offering interest subvention schemes, disbursement of loans are likely to get delayed, points out Tinesh Bhasin.
'Slower-than-anticipated recovery can be a bigger risk this time than a liquidity-driven event -- at least for India.'
With the wedding season already in full swing, a few things to keep in minutes financially when tying the knot, advises Bindisha Sarang.
In advanced economies where the financial system is more matured, the form of shadow banking is more of risk transformation through securitisation.
'At this moment, investors should look for relative value within sectors and clear visibility (third-wave-or-not) on earnings delivery.'
A vast majority of borrowers are in the essential services' supply chain with tiny and micro businesses, and this has sprung back.
Given that there are hundreds of players in the shadow banking space, it's hard to make a credible estimate of potential NPAs. That creates more scope for panic, says Devangshu Datta.
Poor quality of education is one of the most important reasons for high unemployment in India, says Kavita Nigam.
'Companies with a strong business case and healthy balance-sheet should sail through and emerge more robust in the future.'
L&T Finance CEO interview.
The main objective is to determine whether among these companies there are NBFCs that ought to have registered with the RBI for carrying on their NBFI activities.
'It really doesn't matter that investors getting allotments sell their IPO stock holdings on listing day because a new set of investors are entering.' 'This explains the continued rise in stock prices even after the first day of listing.'
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.
Companies expect recovery in second half of fiscal as BS VI approaches, claim banks and NBFCs showing greater interest in financing.
The sale of the NPA account is to happen through e-auction on January 30, as per the bid invite.
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