WEEKLY FINANCIAL SNIPPETS- 23/06/2018

  1. MICROFINANCE LOAN CAP RAISED TO Rs. 80,000 PER BORROWER: Microfinance lenders including private banks such as Axis Bank, RBL Bank etc. have raised their cumulative micro loan cap per borrower to Rs. 80,000 from Rs. 60,000, a clear hike of 33%. This is prompted by strong demand and rise in self-employment amid poor industrial sector.

 

  1. PUBLIC MONEY EXTREMELY SAFE IN PSU BANKS: Finance Minister Mr. Piyush Goyal has said that public money is extremely safe in state-owned banks. He was speaking against the backdrop of several recent fraud cases including the $ 2 billion PNB scam. He also said that the government is open to the question of giving more powers to RBI for effectively regulating the public sector banking.

 

  1. 18,000 BANK BRANCHES/POST OFFICES HAVE AADHAAR FACILITY NOW: In July 2017  the Unique Identification Authority of India (UIDAI) had asked private as well as public sector banks to set up Aadhaar updation centres in at least one out of ten branches. In less than one year, the banks and post offices have set up as many as 18,000 Aadhaar centres for enrolment and updation of the biometric ID at such locations.  Out of this, around 10,000 Aadhaar centres have been set up by banks and around 8,000 centres by post offices.

 

  1. RBI REVISES THE HOUSING LOAN LIMITS UNDER PRIORITY SECTOR: With a view to bring convergence of the Priority Sector lending guidelines for housing loans with Affordable Housing Schemes, and to give a fillip to low-cost housing for Economically Weaker Sections and Low Income Groups, the housing loan limit for eligibility under priority sector lending has been raised to Rs. 35 lakhs (earlier 30 lakhs) in metropolitan centres and 25 lakhs     (earlier Rs 20 lakhs) in other centres. However there is a condition that the overall cost of the dwelling unit in the metropolitan centre and other centres should not exceed Rs. 45 lakhs and Rs. 35 lakhs respectively.  In a further notification, the RBI has announced that the existing family income limit of Rs. 2 lakh per annum for loans to housing for Economically Weaker Section (EWS) and Low Income Groups (LIG) stands revised to Rs. 3 lakh and Rs. 6 lakh respectively.

 

  1. P2P LENDING COMPANIES CHANGE TRACK IN A BID TO BECOME NBFCs : Peer-to-Peer (P2P) lending companies are changing their business model as they intend to migrate to Non-Banking Finance Companies (NBFCs). After the RBI came out with new regulations for these companies, most of them had literally stopped lending. While mandating Rs. 20 million as minimum net worth, RBI had also imposed a Rs. 1 million cap for individual lending on such platforms. Now a couple of P2P companies have NBFC licence from RBI.

 

  1. PRIORITY SECTOR LOANS HAVE LOWEST WRITE-OFFs: Write-offs by banks for priority sector loans (agriculture, MSMEs and smaller home loans) account for just 25% of the total write-offs. Rest 75% relates to big companies like working capital and project loans. As per RBI guidelines banks must lend 40% of their total advances to priority sector lending and in this, 18% must go to agriculture. During 2016-17 banks have written off Rs. 24,682 in priority sector loans and Rs. 79,580 crore in other loans.

 

  1. INDIANS FACE 25% HIGHER RISK TO FINANCIAL FRAUDS: As per a report by Experian, a global financial information company, Indians are at a higher risk of online financial fraud. With more and more Indians becoming digitally more active the risk of frauds has increased as one in four customers becoming victims to these frauds. 24% of Indians have experienced frauds while transacting online.
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