Mumbai: The finance ministry will meet chief executives of public sector banks on November 20 to take stock of the progress made under the Prime Minister’s Jan Dhan Yojana (PMJDY). There will also be a review of the performance of the lenders. Hasmukh Adhia, the newly appointed secretary of financial services, who took charge on November 8, will chair the meeting. Adhia, a Gujarat-cadre IAS officer of the 1981 batch, succeeded Gurdial Singh Sandhu, who has been appointed as the chairman of the National Authority for Chemical Weapons Convention. The Prime Minister and the finance minister were scheduled to meet the bankers on 5 November to discuss the same issues but that interaction was cancelled at the last minute. According to latest government data, close to 72.5 million accounts have been opened under the PMJDY till November 10 with on average half-a-million accounts every day. However, 54.8 million or over 75 per cent accounts have no balance in them. The remaining 25 per cent garnered Rs ,600 crore since the scheme was launched in August 28. While the target was to open 75 million accounts by January 26, it now seems that the target will be achieved well in advance. http://www.business-standard.com/article/finance/banking-secy-adhia-to-meet-govt-bank-cmds-on-nov-20-114111500024_1.html
FINMIN NOTIFIES LIBERALISED DEPOSITORY SCHEME
New Delhi: The Finance Ministry has notified a liberalised Depository Receipts Scheme, which will help unlisted companies to mobilise money abroad and private equity holders to encash their holdings. The scheme will come into effect from December 15. However, there is no clarity on the tax treatment. A depository receipt refers to foreign currency denominated instrument backed by permitted securities such as equity, debt paper or mutual fund units as against current provision of equity only. These can be listed at international exchanges or remain unlisted. These receipts can be issued in 34 countries including US, UK, Germany, France, Australia, Japan, and Italy beside others. Receipts could be sponsored or unsponsored. Unsponsored depository receipts are instruments issued without specific approval of the issuer of the underlying securities. The notification says that any listed or unlisted company in public or private sector, any other issuer of permissible securities and any person holding such securities will be eligible to transfer securities to a foreign depository. These will be deposited with a domestic custodian. These securities will also include those issued to people outside India. The foreign depositories will issue receipts abroad either through public offering or private placement. However, companies or individuals, who have been debarred from accessing capital market, will not be allowed to be part of new scheme, the notification says. http://www.thehindubusinessline.com/todays-paper/tp-news/finmin-notifies-liberalised-depository-scheme/article6600872.ece
WHOLESALE INFLATION EASES TO FIVE-YEAR LOW IN OCTOBER, BUT RBI UNLIKELY TO CUT RATES
New Delhi: Wholesale inflation dipped to a five-year low in October, bringing more cheer to the economy, but economists do not expect it to result in a rate cut when the Reserve Bank of India reviews its monetary policy on December 2. The annual rate of inflation, based on the monthly Wholesale Price Index (WPI), stood at 1.77 per cent for October against 2.38 per cent in September and 7.24 per cent during the same month last year. The rate of inflation implies the rate of price increase, a lower rate means that price increase was moderate. This is the third positive data in the past couple of days. On Wednesday, factory output registered a growth of 2.5 per cent in September, against 0.4 in August. Retail inflation rate too hit a new low of 5.52 per cent in October on the back softening food prices. The WPI is lower due to the continuing fall in food prices, including vegetables, and fuel. Food inflation, which has been on a decline since May, fell to a nearly two-and-half year low of 2.7 per cent. http://www.thehindubusinessline.com/todays-paper/wholesale-inflation-eases-to-fiveyear-low-in-october-but-rbi-unlikely-to-cut-rates/article6600845.ece
NEW DEPOSITORY SCHEME FROM DECEMBER 15
New Delhi: Indian corporates, both listed and unlisted, would be able to raise money through depository receipts in 34 foreign jurisdictions from December 15. Notifying the scheme, the finance ministry said any domestic company, both listed and unlisted, and any issuer of permissible securities would be allowed to raise money through depositories. “The aggregate of permissible securities which may be issued or transferred to foreign depositories for issue of depository receipts, along with permissible securities already held by persons resident outside lndia, shall not exceed the limit on foreign holding of such permissible securities under FEMA,” the ministry said. Under the “Depository Receipts Scheme, 2014”, Indian entities can raise money in 34 jurisdictions including Argentina, Australia, Brazil, China, Finland, France, Greece, Iceland, Ireland and ltaly. http://www.business-standard.com/article/finance/new-depository-scheme-from-december-15-114111500026_1.html
RUPEE FALLS TO NEARLY 1-MONTH LOW
Mumbai: The rupee on Friday fell for the second day and depreciated 17 paise to end at nearly one-month low of 61.72 against the greenback on sustained dollar demand even as local stock indices surged to new highs. The rupee resumed lower at 61.61 per dollar against Thursday’s closing level of 61.55 at forex market. Later, it slipped further to 61.83, before concluding the day at 61.72 to the dollar, reporting a loss of 17 paise or 0.28 per cent. This is its lowest close since ending at 61.83 per dollar on October 16, 2014. On Friday, it moved in a range of 61.60 and 61.83 to the dollar during the session. http://www.business-standard.com/article/finance/rupee-falls-to-nearly-1-month-low-114111500025_1.html
SBI Q2 NET RISES 30.5% AS OTHER INCOME JUMPS
Mumbai: Robust growth in other income coupled with tight control on operating expenses helped State Bank of India log 30.54 per cent growth in net profit for the second quarter ended September 30. In the reporting quarter, India’s largest bank, which has a business size (deposits plus advances) of Rs. 26.13-lakh crore, recorded a net profit of Rs. 3,100 crore ( Rs. 2,375 crore in the year-ago period). The profitability comes despite a 52 per cent jump in loan loss provisioning at Rs. 4,028 crore ( Rs. 2,645 crore). Net interest income, the difference between interest earned and expended, grew 8 per cent to Rs. 13,275 crore ( Rs. 12,251 crore). Other income, also known as non-interest income, comprising fee income, profit on sale of investments, forex income, dividend and recovery from written-off accounts, rose 39 per cent to Rs. 4,571 crore ( Rs. 3,278 crore). According to Chairperson Arundhati Bhattacharya, “Net profit is basically coming from both net interest income and non-interest income. http://www.thehindubusinessline.com/todays-paper/tp-news/sbi-q2-net-rises-305-as-other-income-jumps/article6600868.ece
SBI TO LAUNCH ‘DYNAMIC RATING’ TO CURB BAD LOANS
Mumbai: To nip bad loans in the bud, State Bank of India (SBI) has ushered in “dynamic rating” so that events affecting a corporate or the segment in which it is operating in are taken into account. This will help it to adjust loan pricing and risk appetite accordingly. This is in sharp contrast to the bank’s internal rating model, whereby rating of a corporate is done once a year or if any loan proposal comes during the course of the year. “Now what we are saying is that if there is any trigger/ event whatsoever (and we have identified a number triggers) that impacts the company or sector, then the ratings will get checked immediately. “This is to see whether there is a fall in the rating or not and accordingly we will be able to adjust not only our pricing but our appetite for doing whatever we need to do in that account,” said Arundhati Bhattacharya, Chairman, SBI. http://www.thehindubusinessline.com/todays-paper/tp-news/sbi-to-launch-dynamic-rating-to-curb-bad-loans/article6600867.ece
SBI TO IMPROVE ATM SERVICES
Mumbai: Having started to charge customers for excess usage of automated teller machines (ATM), the country largest lender State Bank of India (SBI) has decided to improve its services and appoint a single vendor for maintenance of its ATMs. Recently, the Reserve Bank of India (RBI) allowed banks to charge their customers after the first five free transactions, starting from November 1. “There are multiple vendors who are responsible for keeping up the maintenance of the ATMs, like one is responsible for air-conditioning, one for cleaning, one for running it, etc. This is becoming an issue. We have decided to appoint a single vendor who will be responsible for all the functions,” said SBI chairman Arundhati Bhattacharya in a press meet to discuss the bank’s second-quarter earnings. She said a tender will be floated in December to approve the agency. SBI has the largest network of ATMs in India – 45,000 as of June, according to RBI data. SBI, like many other banks, has imposed charges for ATM transactions over a certain limit. http://www.business-standard.com/article/finance/sbi-to-improve-atm-services-114111401632_1.html
CANARA BANK CONTEST FOR STUDENTS
Thiruvananthapuram: Canara Bank conducted a painting competition for children here at the Government Higher Secondary School for Girls, Cotton Hill, on the occasion of Children’s Day. The theme was sustainable ecotourism development in Kuttanad. General Manager, Kerala Circle, U Ramesh Kumar, exhorted students to actively pursue their academic career and offered Canara Bank’s support in funding their requirements. Deputy General Manager K Kishore Kumar advised students to cultivate the habit of thrift and open accounts with the bank which has tailor-made schemes suitable for different age groups. http://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/canara-bank-contest-for-students/article6600933.ece
ANDHRA BANK’S SCHEMES FOR CHILDREN, TEENAGERS
The Andhra Bank here launched two schemes on Friday to encourage saving among children from an early age. On the occasion of launch here to mark Children’s Day, East Godavari district Educational Officer K V Srinivasa Reddy said the bank has taken a great initiative by launching the scheme and it will also create awareness among children about savings. Kakinada zonal manager S Seshagiri Rao said ‘AB Little Stars’ scheme has been launched for children in age group of 10-15 years and their parents stands as guardians while ‘AB Teens’ is targeted for teenagers between 15-18 years. http://www.business-standard.com/article/finance/andhra-bank-s-schemes-for-children-teenagers-114111500028_1.html
HDFC BANK’S PROPOSAL TO HIKE FOREIGN HOLDING TO 74% APPROVED
New Delhi: The Foreign Investment Promotion Board (FIPB) has cleared HDFC Bank’s proposal to increase foreign holding in the bank to 74 per cent from 49 per cent, after the lender revised its proposal. The board had, last year, rejected HDFC Bank’s proposal for increasing foreign holding to 67.55 per cent. This was done as the board was of the view that HDFC Bank’s parent HDFC Ltd’s 22 per cent stake in the bank was also FDI and adding FII investments and foreign investments through ADR and GDR would increase total foreign holding to 73.39 per cent, an official said. The FDI proposals of Sun Pharma and Sanofi were also cleared by FIPB. So was Punj Lloyd’s proposal for FDI in a defence project, the official added. http://www.thehindubusinessline.com/todays-paper/hdfc-banks-proposal-to-hike-foreign-holding-to-74-approved/article6600841.ece
AXIS BANK SEES SHARP RISE IN GROWTH OF ONLINE BANKING
Ahmedabad: With increasing penetration of smart phones, data connectivity and Internet facilities in urban areas, bank transactions are rapidly shifting from ATMs to the digital platform, said a top official of Axis Bank. Rajiv Anand, Group Executive & Head – Retail Banking, Axis Bank, informed that online transactions are increasing rapidly. “Till a few years back, ATMs had majority share in overall cash transactions, but now it has reduced to 50 per cent. Digital — mobile and Net banking — has increased its share from 15 per cent to 30 per cent now. Only 20 per cent cash transactions happen through branches,” said Anand, who inaugurated the bank’s 2,500{+t}{+h}branch in Ahmedabad on Thursday. Anand said in a few months, transactions via mobile phones at Axis Bank have increased sharply and stands at over Rs. 1,000 crore now. http://www.thehindubusinessline.com/todays-paper/tp-news/axis-bank-sees-sharp-rise-in-growth-of-online-banking/article6600884.ece
AXIS BANK’S RS 6,000 CR INFRA BOND ISSUE LIKELY TO BE PLACED NEXT WEEK
Mumbai: Axis Bank, India’s third largest private sector lender, is planning to raise Rs 6,000 crore by way of infrastructure bonds and the issue is likely to be placed next week. According to sources, the tenure of the bonds will be 10 years and the likely coupon rate is 8.85 per cent. The bank has also contacted prospective investors who happen to be primarily insurers. “The issue might happen next week. They want to raise the money before the Reserve Bank of India (RBI) monetary policy to be held on December 2,” said a senior official of an insurance company who was contacted by the bank. The official also added they were waiting for the final pricing, based on which insurance companies will take a decision. The rush to raise money via these long-term bonds had picked up after RBI, earlier this year, had announced that long-term bonds (tenor of more than seven years) will be exempt from cash and statutory reserve requirements, if the proceeds were used to fund new long-term infrastructure projects and affordable housing. http://www.business-standard.com/article/finance/axis-bank-s-rs-6-000-cr-infra-bond-issue-likely-to-be-placed-next-week-114111401454_1.html
KEEP AN EYE ON FINANCIAL FIRMS: HC
MADURAI: Quashing a RBI communication, the Madras high court bench here on Friday said the apex bank cannot wash off its hand of the responsibility of regulating interest rates charged by non-banking financial companies (NBFCs) and asked it to look into the matter in terms of fair practice code as well as circulars issued by it. A division bench comprising Chief Justice Sanjay Kishan Kaul and V Dhanapalan made the observations while disposing of a public interest litigation (PIL) seeking a direction to quash the May 3, 2012 Reserve Bank of India communication which stated that it was “not regulating the rate of interest being collected by NBFCs”. Petitioner A R Jeyarhuthran, an advocate, had also sought to restrain NBFCs Muthoot Finance Company and Manapuram Finance from collecting exorbitant rate of interest. “RBI cannot wash off its hand of such responsibility as time and again it has issued some circulars to regulate interest charged by the NBFCs,” the court held. The court also directed the Centre to look into the issue which had already received the attention of its authorities. Observing that charging exorbitant interest was a violation, the court said the RBI should have checked, periodically, if the NBFCs were complying with its circular regarding fair interest charged by them. http://timesofindia.indiatimes.com/city/madurai/Keep-an-eye-on-financial-firms-HC/articleshow/45155085.cms
DEBT MUTUAL FUNDS ASK FOR BANK GUARANTEES, EQUITY SHARES AS COLLATERAL
Mumbai: Easy liquidity and a rising appetite for risk have made mutual fund (MF) managers take on larger bets in lower-rated corporate paper. They’re asking for bank guarantees and equity shares as collateral. In the past two to three months, sector officials said a pursuit of higher yields, brought on by expectation of improving corporate earnings, had seen a higher incidence of AA-rated and even A-rated papers in debt schemes. The trend of asking for collateral had almost died, as appetite for lower rated paper was minimal with the earlier poor sentiment. There has been a revival following the improvement in economic outlook, according to sector officials Business Standard spoke with. For listed companies, the trend is for MF schemes to take a cover of equity shares. For instance, in the form of preference shares, where the collateral is two to three times the funds raised, said managers. In case of a default, these will be liquidated in favour of the investors. http://www.business-standard.com/article/pf/debt-mfs-ask-for-bank-guarantees-equity-shares-as-collateral-114111401226_1.html
SEBI RECOVERS RS 2.48 CR FROM INDIVIDUAL, DEFREEZES ACCOUNTS
Mumbai: Sebi today ordered defreezing of bank and securities demat accounts of an individual after the capital market regulator successfully recovered dues worth nearly Rs 2.50 crore from him. Securities and Exchange Board of India (Sebi) had in January this year ordered attachment of bank and demat accounts of one Dhaval Mehta to recover penalties imposed on him with respect to IPO fraud case of Suzlon and IDFC. Mehta had made unlawful gains in this fraud. In an order today, the market regulator said that Mehta had paid an amount of Rs 2.48 crore “towards satisfaction of demand raised in the…Recovery certificates”. Accordingly Sebi has asked the banks and the depositories — NSDL and CDSL — “to release the bank accounts/lockers and demat accounts of the defaulter (Mehta) attached, if any pursuant to the above said notice/s of attachment”. Sebi has been given direct powers by the parliament to freeze bank accounts, attach properties, conduct search and seizure and initiate recovery proceedings. http://www.business-standard.com/article/pti-stories/sebi-recovers-rs-2-48-cr-from-individual-defreezes-accounts-114111401623_1.html
