WEEKLY FINANCIAL SNIPPETS – 26/08/2017

1. NPA RESOLUTION NOT TO LIQUIDATE THE COMPOANY BUT TO HELP SAVE THEM: Finance Minister Mr. Arun Jaitly has said that the new insolvency law has significantly reversed the defaulting debtor-creditor relationship. He has assured the stressed firms that the key objective of NPA resolution is not to liquidate their business but to save them. The main objective is not to liquidate their assets but to save their businesses and make sure that these valuable assets are preserved.

2. INCOME TAX DEPARTMENT PLANS TO PURSUE PROPERTY HOLDERS WHO HAVE NEVER FILED INCOME TAX RETURNS:The Income tax Department has said that the government has collected vast data from various sources on the investments in property by people who have never filed tax returns. This information will be verified to ascertain the source of income used by these people for purchase of the properties and to see if these are being held by benami owners. The exercise is part of government’s crackdown on black money.

3. MUTUAL FUNDS PIP FOREIGN INSTITUTIONAL INVESTORS: As per August 17th data Mutual Funds  (MFs)  have surpassed Foreign Investment Investors (FIIs) in net investments in Indian Stocks. MFs have accelerated their investments in stocks since April this year on a surge in subscriptions in equity schemes.

4. NPA RESOLUTION= RBI CHIEF CALLS FOR RECAPITALISATION OF BANKS AT THE EARLIEST: Reserve Bank of India Chairman Sri Urjit Patel has called for recapitalisation of state run Banks to help them resolve the NPA issue in a time bound manner. State run Banks gross NPA has reached 9.6% of the total loans disbursed and stressed advances ratio at 12% as of March 2017,which is very much alarming.

5. CABINET APPROVES PLANS TO MERGE STATE RUN BANKS:India’s federal cabinet has given an in-principle approval for the consolidation of state-run banks by merging some of the PSU The cabinet has decided to set up a commission and the commission will submit a report within 12 weeks.

6. Rs 200 NOTES NOTIFIED, LIKELY TO BE RELEASED SOON: Rs 200 notes could make their debut in to Indian economy in the last week of August as the government has notified the new currency note. Experts say that the Rs 200 notes will significantly ease transactions.

7. SBI CHIEF SAYS MERGER OF BANKS CAN REDUCE BANKS’ NEED FOR GOVERNMENT CAPITAL: State Bank of India Chairperson Ms Arundhati Bhattacharya has called for more consolidation of state run PSU banks as this could reduce their dependence on government for capital. According to Ms Bhattacharya, the merger of state run banks should open up more capital generation avenues, both internally and from the market.

8. PSBs TO GET FIRST TRANCHE OF FUNDS FROM THE GOVERNMENT BY SEPTEMBER END: State run banks are likely to get the first tranche of government funds for recapitalisation by the end of September 2017. The government has earlier announced that the funds will be released in three tranches before March 2018.

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WEEKLY FINANCIAL SNIPPETS- 19/08/2017

1. 9,000 WILFUL DEFAULTERS OWE Rs 92,000 CRORE TO PSBs’: Public Sector banks have reported 20% jump in the outstanding loans by wilful defaults. Nearly 9,000 wilful defaulters collectively owe an amount of Rs 92,000 crore to these banks as on 31/03/2017. There has been an increase of 10% in the number of loan defaulters over the year.

2. BAD LOAN RECOVERIES BY BANKS: It was a mixed bag for bad loan recoveries by public sector banks in the June quarter of the present financial year. While SBI has reported higher recovery, banks like Punjab National Bank, Canara Bank and Union Bank of India have shown a dip in recoveries. Whereas most of the Private sector banks have shown healthy growth in recoveries of bad loans. Axis Bank’s recoveries and up gradation has doubled in quarter one of the present financial year.

3.KARUR VAISYA BANK IS THE FIRST PRIVATE SECTOR BANK TO START AADHAAR ENROLMENT CENTRE:Following the directives given by UIDAIlast MONTH, Karur Vaisya Bank  has unveiled its first Aadhaar enrolment centre in one of its branch, thus becoming the first private sector bank to start a Aadhaar enrolment centre. The bank official said that once the required documents are submitted, the enrolment or any updation can be completed within 15 minutes.

4. UNUSUAL DEPOSITS WORTH Rs 1.7 LAKH CRORE DURING DEMONETIZATION: Unusual cash deposits totalling to Rs 1.6 to 1.7 lakh crore were made during the demonetization period says a research paper posted by RBI. This will be dealt firmly by the tax department.

5. DIGITAL WALLET COMPANIES WAIT FOR RBI NORMS: The Digital wallet industry is eagerly waiting for the latest release of fresh guidelines by RBI for the Prepaid Payment Instruments (PPIs). While the Central Bank is expected to open up fresh applications for PPI licences, the industry is also keeping an eye open for Know-Your-Customer (KYC) norms and cyber insurance for wallets. The top executives of the wallet industry have met the regulator and have voiced their suggestions and are now waiting for the final move from RBI.

6. RBI PLANS TO EXTEND CYBER AUDIT TO ALL THE BANKS: The Reserve Bank of India is planning to conduct cyber-audit of all the banks in the country instead of just a few bigger banks as it did in the past, a policy shift in the wake of an increase in cyber-attacks. RBI had created a cyber-cell under the department of banking supervision and used to conduct a separate IT audit for three banks, which was increased to 30 banks last year and this year RBI is covering all the banks for separate cyber-security and IT audit.

7. RBI ASKS BANKS TO ENABLE ACCOUNT NUMBER PORTABILIYTY AT THE EARLIEST: RBI Deputy Governor Mr. S SMundra has asked banks to enable account number portability among banks at the earliest which will be a far reaching step towards enhancing competition and improving customer service. By enabling number portability a scenario will emerge wherein the unsatisfied customers would be able to walk out of the bank silently and thus banks will be compelled to provide better customer services.

WEEKLY FINANCIAL SNIPPETS- 12/08/2017

1. AADHAAR MAY BECOME MANDATORY FOR FINANCIAL MARKET: Aadhaar number may soon become mandatory for buying shares and mutual funds. The government and SEBI are planning to link Aadhaar to financial market transactions which will help the government to plug taxes and curb black money. The government has already mandated that Aadhaar be linked to PAN, Bank Account and Mobile phone numbers.

2. GOVERNMENT TO INITIATE BANK MERGERS AFTER QUARTER-1 RESULTS: The Finance Ministry is expected to initiate the process of consolidation of public sector banks once the first quarter financial results of the current fiscal have been announced. There are factors like regional balance, geographical reach, financial burden and smooth human resource transition that are to be considered before taking the final decision.This is going to be a complex exercise for the Finance Ministry.

3. OVER 11.44 LAKH PAN CARDS DEACTIVATED: As per the rules it is “ One Person One PAN” which is the guiding principle for allotment of PAN. More than 11.44 lakh Permanent Account Numbers (PAN) have been deleted or de-activated in cases where multiple PANs were allotted to one person.

4. RBI INSTRUCTS BANKS TO ENSURE SAFETY OF CUSTOMERS’ LOCKERS: The Reserve Bank of India has asked banks to ensure customers’ lockers remain safe and there is no negligence that could render banks liable to claims by locker holders. The banks have been advised by RBI that it would be the responsibility of the banks to ensure safety of lockers and there is no negligence in the matter of safeguarding the lockers.

5. MERGER OF SMALL BANKS MAY HURT MSME SECTOR: Merger of smaller banks into big will hurt credit sourcing for MSMEs (Micro,Small& Medium Enterprises). The large banks will be reluctant to lend to these MSMEs as they are less keen on small sized loans. Their services will be less personalised and there will be more fees attached. This is as per the report from financial services firm- Resurgent India.   MSME sector, which provides bulk of employment, accounts for 45% of India’s manufacturing, and nearly 8% of the country’s GDP.

6. RBI TELLS BANKS TO GO FOR PERIODIC VULNERABILITY TEST FOR CYBER SECURITY: Cyber security preparedness is a continuous process and the RBI has asked banks to periodically conduct vulnerability test. This is the result of the recent cyber-attacks and as India is gearing up for cashless economy, the cyber security plays an important role.

7. MONEY FLOW INTO FINANCIAL MARKETS INCREASED, POST DEMONETIZATION: Post demonetization, there has been visible channelizing of money towards financial assets like mutual funds, capital market and insurance. This was observed and stated by Mr.Viral Acharya, Deputy Governor of RBI. Mr. Acharya in his observations said that something has changed as black money transactions are not easy now and the money is flowing towards financial market, which is a positive sign.

8. AHEAD OF FESTIVE SEASON, ICICI BANK INTRODUCES INSTANT CREDIT CARD: Considering the demand due to the forthcoming festive season, ICICI Bank has introduced an instant credit card which can be availed online by its customers and start shopping on e-commerce sites even before the card is delivered to him/her.