Reserve bank is working with the govt to bring suitable amendments in the statutory provisions
RBI's exercise will take into account standards of governance, the viability of the payment bank (PB) business model, and changes, if any, if needed.
The National Company Law Appellate Tribunal on Friday issued notices to Zee Entertainment Enterprise Ltd (ZEEL) over the petitions filed by IDBI Bank and AXIS Finance against an NCLT order that approved the media company's merger with Culver Max Entertainment. However, a two-member NCLAT bench comprising chairman Justice Ashok Bhushan and Member Arun Baroka declined to grant any stay over the merger process during the pendency of the hearing. The appellate tribunal (NCLAT) has directed to list both petitions on January 8 for hearing, directing Zee Entertainment Enterprise Ltd to file a reply.
'We need to be far more careful given the fact that while this is group lending, it's essentially unsecured.'
The Reserve Bank on Thursday tightened norms for consumer credit as it asked banks and NBFCs to assign a higher risk weight for unsecured personal loans, a move aimed at making the lenders more cautious on such advances. The risk weight on unsecured consumer loans has been raised by 25 percentage points. The new regulations, however, will not be applicable on housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, the Reserve Bank said in a circular.
The top 50 exposures, amounting to Rs 7.8 trillion, of government-registered non-banking financial companies (G-NBFCs) constitute about 40 per cent of corporate credit within the NBFC sector, indicating concentration risk, according to the Reserve Bank of India's report "Trend and Progress of Banking in India 2022-23". Notably, all the 50 are tied to the power sector, a domain fraught with inherent challenges, the report said. The report highlighted recognising the escalating systemic importance of G-NBFCs, the Prompt Corrective Action (PCA) framework had been expanded to include G-NBFCs excluding those falling within the base layer.
In mid-March this year, the finance ministry asked state-run banks to review their gold loan portfolio for the two-year period between January 1, 2022, and January 31, 2024. This business had grown at a fast clip. Reserve Bank of India (RBI) data has it that it grew 15 per cent to Rs 1 trillion in FY24. Now, in recent times, any kind of exuberance in financial services has seen the authorities swoop down - be it pushing the lines on governance or unsecured credit.
The project, anchored by National Highways Authority of India in partnership with National Payments Corporation of India, is gaining momentum, with big banks such as ICICI and non-bank entities like Paytm have also entered the arena.
White labeled ATMs are set up by private non-bank companies that own and operate their own brand of ATMs.
Having successfully executed the merger with parent HDFC, HDFC Bank's managing director and chief executive Sashidhar Jagdishan on Saturday said the country's largest lender aims to double every four years. In a letter to the over 4,000 employees from HDFC who joined the bank's rolls on Saturday, Jagdishan said the future is bright, and the work on realising the potential of the merger starts now. "The runway for financial services and mortgage, which are so underserved and under penetrated, is going to be very large. HDFC Bank - the combined entity - with a large and growing distribution and customer franchise, more than adequate capital, healthy asset quality and profitability, will be best positioned to capture growth.
Why is the RBI harsh on Paytm Payments Bank? Why did it give Rana Kapoor of Yes Bank Ltd such a long rope?Often, it's a long investigation process, but the RBI doesn't discuss this openly since that can threaten financial sector stability, explains Tamal Bandyopadhyay.
Indian bonds remained volatile over the past week on uncertainties over the maiden offshore sovereign bonds issuance, according to a report by DBS Group Research.
P2P platforms do not have the safety net. Instead of playing the role of an intermediary, if they run their own balance sheets for safety and growth, it's a recipe for disaster, warns Tamal Bandyopadhyay.
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Stating that there are strong inter-linkages between banks, NBFCs and other deposit-taking entities, he said for monetary policy to be effective and financial markets to remain stable, they should be regulated by the central bank.
Longer-tenure FDs generally give higher returns. Nonetheless, going for a tenure higher than two to three years is not advisable.
Over 100,000 small and medium-sized businesses are non-compliant with e-invoicing norms under the goods and services tax (GST) regime, a mandatory requirement for businesses with an annual turnover of over Rs 5 crore. E-invoicing provides real-time access to invoices that are prepared by the supplier on the purchase of goods, allowing faster accessibility to input tax credit, thereby limiting the manipulation of fake credit as it has to be generated before the transaction. "The default has been reported mainly in businesses with a turnover between Rs 5 crore and Rs 20 crore," a senior official informed
The banking regulator was uncomfortable with the runaway pace at which consumer credit was growing.
For the time being, digital lending remains a grey area, notes Tamal Bandyopadhyay.
The Reserve Bank of India is likely to take a call on the relaxations sought by HDFC Bank in relation to the merger, as the date of merger draws closer, sources said. The HDFC twins, which announced their decision to merge in April last year, received National Company Law Tribunal's (NCLT's) approval recently - a key milestone to close the deal in due time. The management of both the entities had said that it will take 15-18 months for the merger.
Lenders of debt-ridden Reliance Capital have voted in favour of a resolution plan submitted by Hinduja Group firm IndusInd International Holdings Ltd (IIHL) which made the highest cash offer of Rs 9,661 crore in the second round of bidding. As much as 99 per cent votes were in favour of IIHL as lenders expected to recover cash upfront of Rs 9,661 crore from the Hinduja Group entity, sources said. Besides, sources said cash balance with Reliance Capital (RCAP) of over Rs 500 crore would also go to lenders. So, in all lenders are expected to receive about Rs 10,200 crore for distribution as against Rs 16,000 crore principal secured debt, resulting in 65 per cent recovery for the lenders, sources said.
'The India which was all about glamour and razzmatazz through which he could earn the trust of people of the other India, which was Bharat.'
HDFC chairman Deepak Parekh on Monday said harmonisation of rules between banks and non-banks which reduces the regulatory arbitrage was one of the key factors which influenced the decision for merger between the largest home financier and HDFC Bank. Parekh, who said the merger discussions have happened over the last three weeks, noted that requirements like non performing asset recognition being at par and size-based regulations for non-bank finance companies are among the changes in landscape. Addressing a press conference after the surprise announcement earlier in the day, Parekh said the last three years have seen harmonisation in the regulations which reduce the "regulatory arbitrage" of running a separate home finance company.
Lenders and shareholders of Reliance Industries Ltd (RIL) will meet on May 2 to demerge the firm's financial services business. This is expected to create a big player in segments including the NBFC (non-banking financial company) space with net worth of Rs 25,851 crore as of March 2022. According to the plan, RIL shareholders will get a share in the demerged entity for each one held in the company.
'Das is friendly, but he finally does what he does. The quality of engagement is very good.'
Kotak Mahindra Bank to have a 19.9% stake in the proposed banking venture.
The Reserve Bank of India (RBI) has given HDFC Bank six months to migrate HDFC's home loan customers to external benchmark linked lending rate (EBLR), top sources in the bank told Business Standard. Almost half of HDFC's 5.4 million customers are home loan customers. It is mandatory for banks to link retail loans and loans to micro, medium and small enterprises to an external benchmark. Non-banking financial companies do not have such a mandate.
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.
The Reserve Bank of India on Tuesday banned chartered accountant firm Haribhakti & Co LLP from undertaking any type of audit assignments for regulated entities for a period of two years starting April 1, 2022.
While the RBI's guidelines aim to streamline the loan closure process, borrowers must remain proactive.
India is an under-penetrated ATM market with only 98 ATMs for every 10 lakh of population.
India should become a middle-income country and then push to make INR (rupee) a hard currency, and till then, it must promote the settlement of global trade in the local currency, think tank GTRI said on Sunday. Global Trade Research Initiative (GTRI) said that transforming a currency into a hard currency is a complex process that hinges on several pivotal factors. Firstly, economic stability is paramount; a country must exhibit low and stable inflation, consistent growth, and a balanced trade environment.
'The focus needs to shift towards the ability to collect payments, particularly in tier-3 to tier-4 areas where acceptance is still lacking.'
Funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, declined by 11 per cent in 2022 to 3.42 billion Swiss francs (nearly Rs 30,000 crore), annual data from Switzerland's central bank showed on Thursday.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
Shelar demanded that Desai's death should not be treated just as a case of accidental death, but must be dealt with from a larger perspective.
'There will be partnerships between banks and fintech firms, but there will also be areas where they will be direct competitors.'
"We will raise Rs 300 crore via bonds of two-, three- and five-year tenures. This will be our maiden bond issuance and is part of our effort to widen funding sources," says Vimal Bhandari, executive vice-chairman and chief executive officer (CEO), Arka Fincap. The firm, a subsidiary of Kirloskar Oil, is only five years old and small (assets of around Rs 5,000 crore with an "AA" rating), but the response to this float will be closely watched: It would be the first by a non-banking finance company (NBFC) after Mint Road upped the risk weights on bank exposures to them by 25 percentage points. The move by the Reserve Bank of India (RBI) has caught NBFCs off guard even though the issue had been flagged by Governor Shaktikanta Das with their corner-room occupants (and that of banks) in July and August 2023 - on consumer credit and the dependency on bank borrowings.
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.
India has a huge untapped population which doesn't have facilities for financial aid and insurance, and it is perhaps plausible to look at the option of having niche players catering to smaller sectors akin to non-banks and microfinance institutions in lending, said Rakesh Joshi, member (Finance & Investment), Insurance Regulatory and Development Authority of India (Irdai). Speaking at the Business Standard BFSI Insight Summit, Joshi said, "Today, most of our insurance companies operate at a national level. There is arguably a case for having differentiated operations, which cater to niche sectors the same way we have non-banking financial companies (NBFC) and microfinance institutions in lending." "The capital requirement for niche players may not be as large as those having national ambitions. "Enabling these niche players, which require lower capital, will enhance the penetration in areas which hitherto had not seen traction from large players," he said.
In a bid to check fraud, the Reserve Bank on Friday decided to permit all banks to introduce card-less cash withdrawal through ATMs.
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