- RBI OUTLINES ITS VISION DOCUMENT ON PAYMENTS & SETTLEMENT SYSTEMS FOR 2019-21: The Reserve bank of Indiahas outlined a three year vision for payments & settlements system which will offer huge business opportunities for technology-enabled Fintech players. It will enable merchant acquisitions of non-banks, participation of private entities in retail payments which will open fresh business avenues. This vision document is a pursuit towards less cash society accompanied by a less-card India.The endeavour is to serve segments of society which is untouched by the payments system as RBI is trying to smoothen the digital payments in rural areas by pushing its feature – phone-based digital payments where the transaction can take place without internet connection. It is also a customer-centric approach to ensure prevention of frauds through digital channels.
- INSOLVENCY PROFESSIONAL MAY REQUIRE A CERTIFICATE OF PRACTICE TO BE ABLE TO WORK: Insolvency Professionals (IPs) may soon require to obtain a Certificate of practice (CoP) to be able to work as resolution professionals or liquidators. Insolvency regulator IBBI proposes to amend the existing IP regulations so as to introduce the concept of CoP for Insolvency Professionals. This CoP needs to be renewed every year for the IPs to remain in practice.
- BANKS SET ASIDE Rs. 50,000 CRORE PROVISIONS DUE TO JET AIRWAYS AND IL&FS COLLAPSE: Stung by the collapse of Jet airways and IL&FS as many as 13 banks have made a provision of Rs 50,000 crore in the fourth quarter of FY 2019. How much of this would be written off and how much would be recovered is very difficult to predict for the banks. Loan loss provisions across 13 Public Sector Banks stood at Rs 52,739 crore for the fourth quarter of FY 2019 which is sharply higher that the figure (29,626 crore) in the corresponding period of previous year. Most of the banks have reported huge losses for March’19 quarter.
- NBFCs TIEUP WITH BANKS UNDER RBI’S LOAN CO-ORIGINATION SCHEME: An increasing number of Non-Banking Finance Companies (NBFCs) are partnering with banks under the RBI’s loan co-origination scheme. Due to liquidity crunch prevailing in the market, the NBFCs are forced to look for cheaper routes to raise funds. It is envisaged that loans worth between Rs. 5,000 to Rs. 10,000 crore may have been sanctioned under the scheme since its inception in August last year.
- RBI TELLS BIGGER NBFCs TO APPOINT CHIEF RISK OFFICER:The Reserve Bank of India has instructed Non-Banking Finance Companies (NBFCs) with an asset size of over Rs. 5,000 crore to appoint a Chief Risk Officer to improve standards of their risk management. RBI said that with increasing role of NBFCs in credit intermediation, there is a need for these NBFCs to augment risk management practices. RBI directive comes ata time when most of these NBFCs are facing liquidity crisis as some of the firms are burdened with over-leveraging and mismatch between assets and liabilities. And if theNBFC is listed then it has to report the appointment and incumbency of any Credit Risk Officer to the stock exchanges.
- ICICI BANK MOVES TO ROLE-BASED DESIGNATIONS OF ITS TOP EXECUTIVES: In a major HR shift, ICICI Bank has shocked its top management by getting rid of all grades of Deputy General Manager(DGM) and above. These top management executives will be now known by their role and there will be no grade-based benefits. The bank has also got rid of hierarchy as no longer can anyone guess an executive’s seniority based on the size of his car or access to executive dining room. So much so that earlier even the internet bandwidth was depending on the seniority. This move will affect 400 executives. ICICI Bank has moved from grade-based designations to role-based designations.
- PUNJAB NATIONAL BANK TERMINATES AGREEMENT TO SELL ITS STAKE IN HOUSING FINANCE ARM: Punjab National Bank has terminated the agreement to sell its stake in PNB Housing Finance with General Atlantic Group and Varde Partners. The bank said it strongly believes in the growth story of housing finance and hence it will continue to support the housing finance arm in its growth plans.