Flush with liquidity, banks are eager to lend. And, therein lies the problem, warns Tamal Bandyopadhyay.
The bank has 1.8 lakh customers with no-frills accounts, which provide basic banking services without the need to maintain a large minimum balance.
The country's second largest lender ICICI Bank on Tuesday said it has not raised home loan rates from August 1 and will take a view only if cost of funds goes up.
Morgan Stanley removed banking stocks from its model portfolio when it slashed its weighting on the sector by 500 basis points. Several foreign brokerages, such as UBS, JP Morgan, and Credit Suisse, of late, have also become less optimistic about banking stocks.
Credit Vidya helps lenders assess credit and fraud risk for thin-file and new-to-credit customers.
She also ordered increase in gold allocation for women beneficiaries and reducing the working hours of state-run liquor outlets.
The changes in the domestic and global economy following the outbreak of the Covid-19 pandemic are altering the corporate profit league table in India. Reliance Industries (RIL), which topped the India Inc profit chart for more than a decade, lost out to State Bank of India (SBI) in the 2023-24 (FY24) April-June quarter (first quarter, or Q1). India's biggest lender reported a consolidated net profit (adjusted for exceptional gains and losses) of Rs 66,860 crore during the trailing 12-month (TTM) ended in June this year, ahead of RIL's TTM adjusted net profit of Rs 64,758 crore in the quarter.
Shares of ICICI Bank may outperform those of HDFC Bank in the near-term, analysts said recently, after the Sandeep Bakhshi-led private sector lender reported a strong set of numbers for the July to September quarter (Q2) of financial year 2023-24 (FY24). The result, they said, reiterated that ICICI Bank is maintaining a sustainable and prudent growth led by tech-driven initiatives as against HDFC Bank, which is facing merger related challenges. According to analysts at Prabhudas Lilladher, ICICI Bank is valued at par with HDFC Bank at 2.2x/1.9x on FY25/26E core adjusted book value (ABV) basis.
Benefitting from the economic rebound, banks are expected to report a healthy bottom-line and asset quality profile in the quarter ended March 2023 (Q4FY23). The net profit of listed commercial banks is projected to grow by an average 43.6 per cent year-on-year (YoY) in Q4FY23 amid better net interest margins (NIMs) and declining credit costs. This is based on a combined assessment of analyst estimates for 17 banks on Bloomberg database.
We take a look at some of the reasons why you may not get a loan the next time you apply for one.
Use credit cards with discretion and try to generate a net monthly surplus to avoid falling into a debt trap
Longer-tenure FDs generally give higher returns. Nonetheless, going for a tenure higher than two to three years is not advisable.
Banking sources said the debt recast is actually 'Plan B' to help the nation's largest retailer stay afloat.
SBI Cards and Payment Services reported numbers that met Street expectations in the first quarter of the 2023-24 financial year (Q1FY24). The net profit came in at Rs 590 crore, while pre-provision operating profit grew 17 per cent year-on-year (YoY) (a little better than expectations). But provisions were hiked due to surprise stress from pre-Covid-19 period of 2018-19, and that dragged earnings.
During the period, the dependence of petroleum companies were less as they were compensated by the government for under-recoveries through direct subsidy for which it had made a provision in the Budget.
Gitanjali Gems is foraying into the business of providing gold loans and safe deposits vaults. The company has also acquired Trinity Watch Co and Renaissance Retail Ventures for undisclosed sums. It has also formed a subsidiary, Mohar Jewels. It will soon launch the fashion retail format through its retail subsidiary Gitanjali Lifestyle. The company has tied-up with three fashion designers to introduce fashion apparels and private labels and will also open exclusive stores.
A day after the Reserve Bank of India's monetary-tightening measures, banks on began raising interest rates, effecting the hike for the second time in a month.
Probably 35 bps. There could be even an encore in February 2023 to take the policy rate to 6.5% before the financial year ends, predicts Tamal Bandyopadhyay.
Exuding confidence in sustaining the tempo of credit growth, public sector bankers said on Wednesday that consolidation in the public sector bank (PSB) space has given them a robust base to scale. The privatisation of PSBs can be done through divestment of government stake to a wider base of investors without haste. There is nothing to worry about at this point (high credit offtake) as underwriting standards and risk management are much better.
Indians face COVID-19 with record debt, stalled income.
Bankers said fear of loan losses impairing their careers could make officers wary of sanctioning new loan proposals on their own.
Outstanding loans in the retail portfolio have sharply risen by over Rs one lakh crore (Rs 1 trillion) to Rs 3.76 lakh crore (Rs 3.76 trillion) as on March 2006, Rajya Sabha was informed on Tuesday.
Sell the property if bought for investment purpose.
Among index funds, the most popular products are funds tracking the Nifty 50 and Sensex, says Dwaipayan Bose, and explains the finer points of selecting the right index mutual fund.
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
It has been decided to reduce home loan rate by 20 basis points.
Union Bank, UTI Bank and HDFC Bank have the topped the list of banks that gave impressive returns to investors in 2004-05, according to a study by an industry chamber Assocham.
Believe it or not, the regulator is even stretching its arm to identify stressed borrowers and gauge the 'distance to default' as a measure of a particular bank's fragility, reveals Tamal Bandyopadhyay.
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.
Ultimately, the choice between no-cost EMI and BNPL depends on an individual's financial situation, preferences, and ability to manage repayments responsibly.
2014 sees slowest start to festival season in at least 7 years
Let's wait for the monetary policy on February 8 -- to see how it complements the fiscal commitments, points out Tamal Bandyopadhyay.
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.
Auto-debit payment bounces have gone up for the second consecutive month in May, emphasising the stress building up due to a halt in economic activities as authorities lock down various parts of the country to stop the spread of the virus in the second wave. According to the National Automated Clearing House (NACH) data, in May, of the 85.7 million transactions initiated, 35.91 per cent, or 30.8 million transactions, failed.
Private sector lender Axis Bank is close to acquiring Citigroup's retail banking business in India and a deal is likely to be announced soon, sources said on Wednesday. According to the sources, the deal, to be valued at $2.5 billion (about Rs 18,000 crore), will be subject to regulatory approvals. In April 2021, American banking major Citigroup announced its plan to exit from the consumer banking business in India as part of its global strategy. The business comprises credit cards, retail banking, home loans and wealth management.
Mukesh Ambani, the patriarch of Reliance Industries (RIL), and Gautam Adani, the chairman of Adani Group of companies, have secured the top positions on the Fortune India Rich List, created in partnership with Waterfield Advisors, with respective wealth of $99.7 billion and $63.71 billion. With a wealth of $34.6 billion, the Mistry family of Shapoorji Pallonji Group holds the third position on the list, while the Poonawalla family, owners of vaccine maker Serum Institute, with a wealth of $32.9 billion, stands fourth. Stockbroker and founder of D-Mart-branded grocery stores, Radhakishan Damani, claims the fifth spot on the India Rich List with a wealth of $23.4 billion
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.
An improvement in political relations, anchored in a restoration of peace and tranquillity at the border, could open up opportunities for expanded economic and commercial relations between them, suggests former foreign secretary Ambassador Shyam Saran.
The Reserve Bank on Tuesday increased a key statutory deposit ratio for banks to 25 per cent but the move is not expected to push interest rates up. RBI left other key policy rates and ratios unchanged. Due to this, it is unlikely that banks will banks hike their auto, home and education loan rates in the near term.
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