WEEKLY FINANCIAL SNIPPETS-16/12/2017

  1. ATMs NOT TO BE REPLENISHED WITH CASH AFTER 9 PM: The government has proposed some changes for replenishment of cash in ATMs. Cash Transportation agencies must collect cash from the bank in the first half of the day and NO cash loading of the ATMs or any cash movement should be done after 9 pm. These Standard Operating Procedures (SOPs) have been prepared after a spurt in attacks, hijacking and looting of cash vans.

 

  1. RBI INVOKES PROMPT CORRECTIVE ACTION ON CORPORATION BANK: Reserve Bank of India has invoked Prompt Corrective Action (PCA) on Corporation Bank as the Bank’s bad loans have increased sharply. This makes Corporation bank 8th bank to face restriction in a span of 10 months. A statement issued by Corporation Bank said, this action will not have any material impact on the performance of the bank and will contribute to the improvement in internal control of the bank in its activities.

 

  1. INSOLVENCY AND BANKRUPTCY BOARD TO DECIDE ON THE FATE OF THE LOAN GUARANTORS: The governing body of Insolvency & Bankruptcy Board of India (IBBI) is expected to finalise broad guidelines for dealing with personal guarantors & third party guarantors of defaulting loan accounts. This is seen as an additional tool to punish truant promoters and a strong recovery mode.

 

  1. YOUR SOCIAL MEDIA POSTS MAY DECIDE WHETHER YOU WILL GET A LOAN OR NOT: Many Private Sector Banks are spending more time in reading your ( the prospective customer’s) Facebook posts, SMS’s and payment data available on Mobile phone to decide whether to sanction a loan , rather than relying solely on credit ratings. As banks sharpen their internal assessment of risk before lending, they are investing in Data Analytics ( which is gathering data of social media) which captures the borrowing behaviour of a customer.

 

  1. BANKS HIRE EX-RBI MEN TO AVOID SLIP-UPS: Tighter regulations, closer scrutiny and higher possibility of fines by RBI has increased the importance of compliance for banks in recent years. As a result, former officials from RBI’s Banking Supervision Department are being hired by banks and are in charge of this key functioning department. Many Private banks, small banks and recently launched Paytm Payments Bank have former RBI officials heading their compliance department.

 

  1. CENTRE EXTENDS DEADLINE FOR LINKING OF AADHAAR TO BANK ACCOUNTS: The government has extended the deadline for mandatory quoting of Aadhaar number for certain financial transactions (like bank accounts, mutual funds) and linking of Aadhaar to Mobile numbers. Earlier the deadline was December 31st 2017, but now as per the gazette notification the extended date is till 31st march 2018.

 

  1. ICICI BANK LAUNCHES “SMART VAULT”: ICICI bank has launched its technology driven “Smart Vault”, most advanced and first-of-its-kind locker service in India. The Smart Vault is powered by revolutionary robotic technology which minimises human intervention while operating the bank locker. The advanced Radio Frequency Identification (RFID) enabled mechanism scans your request and retrieves your locker using robotic arm and your locker is made available to you conveniently at a kiosk. After your work with locker is over, the robotic arm retracts your locker back to the locker room. Smart Vault is equipped with the most evolved and intelligent security system.
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WEEKLY FINANCIAL SNIPPETS- 09/12/2017

  1. SBI TO REDESIGN ENVELOPS FOR DISPATCHING INCOME TAX CHEQUES: State Bank of India will “redesign” the envelops which it uses to dispatch tax refund cheques of customers. This is to conceal their PAN No and contact numbers after an active customer raised objection that the crucial information like PAN No and contact numbers are visible in the earlier envelops which may result in misuse by some miscreants. The customer had complained to both RBI and SBI stating that SBI is violating RBI’s directions on protection of customer information. Accordingly now SBI has responded positively by agreeing to redesign the envelops.

 

  1. SEBI CLARIFIES NORMS FOR NEW MUTUAL FUND CLASSIFICATION: The Securities and Exchange Board of India (SEBI) has amended its October 6, 2017 circular and has modified certain norms for mutual fund classification that will make compliance easier for asset managers. In the reworked circular the SEBI has clarified on market capitalization norms for equity funds, while allowing certain other fund categories to invest in a wider range of securities.

 

  1. PUBLIC SECTOR BANKS LOOK TO FRAME COMMON RULES TO VALUE STRESSED ASSETS: The Finance ministry along with the state run banks is working to frame a common set of rules for valuation of stressed assets for faster resolution of loans extended by consortia of banks. It is observed that under cases of joint lending, banks are unable to arrive at a common valuation, which stalls the resolution process. Further individual banks also fear that if they agree to a certain haircut, it may not stand the scrutiny of vigilance agencies. The new norms will address such problems.

 

  1. PAYTM BANK AIMS FOR OVER 1 LAKH ATM BANKING OUTLETS: The newly launched Paytm Payments Bank is all set to add over I lakh ATMs pan India. These are called “Paytm Ka ATM”. The Paytm Ka ATM outlets  is a step by Paytm  towards ensuring that every Indian  has access to banking facilities. These ATMs will be neighbourhood shops, which would act as business correspondents for Paytm and offer services like opening of SB accounts, Cash Deposits and withdrawals.

 

  1. RBI RINGS ALARM ON BITCOINS, CAUTIONS CUSTOMERS : Bitcoin is a cryptocurrency which    can be purchased and stored online in a digital wallet from any of the Bitcoin exchange service provider that is active in India. You can later convert them into local currency. Reserve Bank of India is not impressed with the cryptocurrency— Bitcoin. Bitcoin is all set to touch a record $12,000 but RBI has cautioned Bitcoin players that they face potential risks, including financial, legal and those related to customer protection. In a statement RBI has clarified that it has not given any licence or authorisation to any entity to operate schemes or deal with Bitcoin or any other cryptocurrency.

 

  1. RBI REDUCES FEES ON DEBIT CARD PAYMENT FOR SMALL SHOPS : RBI has decided to reduce the Merchant Discount Rate (MDR) for debit card transactions. Under the new rules there are different slabs depending on the turnover of the business. For small business (with a turnover of Rs 20 lakh or less), the MDR cap would be @ 0.4% or Rs 200/- whichever is lower. For other merchants, the MDR cap would be 0.9% or Rs. 1,000 per transaction whichever is lower. But payment gateways are crying foul stating that with no equitable distribution of MDR, the slashing of rates will only add to their pain.

WEEKLY FINANCIAL SNIPPETS – 02/12/2017

  1. GOVERNMENT PLANS GST SOPS FOR DIGITAL PAYMENTS: The Centre has proposed a 2% discount in the GST for consumers who make digital payments. The proposal is likely to be taken up in the next GST council meeting in January. The move if approved will boost the government’s efforts for cashless economy.

 

  1. CRISIL SAYS NBFCs WILL EAT INTO BANKS’ CORPORATE CREDIT SHARE: Non-Banking Financial Companies have become aggressive in lending to mid-sized companies linked in real estate and infrastructure. The share of NBFCs in such loans in Indian credit market has increased by 3% and presently it is 19%. CRISIL has predicted that the next three years also the NBFCs will continue aggressive lending and this would eat up Banks’ share.

 

  1. I-T NOTICES TO 1.16 LAKH INDIVIDUALS FOR CASH DEPOSIT OF OVER Rs 25 LAKH: The Income Tax Department has issued notices to 1.16 lakh individuals and firms who made cash deposits of more than Rs.25 lakhs in bank accounts post note ban but have failed to file tax returns by the due date. Besides this the I-T Department is scrutinising those individuals and firms who have deposited large sum of cash but have filed their tax returns in time.

 

  1. AFTER GST CHANGES ROLLLED OUT, CENTRE ALLOWS FIRMS TO PASTE NEW MRP STICKERS: Following the changes being put in effect on GST rates for about 200 items, Government is allowing firms to paste stickers on packed products to reflect the new MRP. This will be allowed till December 31, 2017.

 

  1. I-T DEPARTMENT MAY TAX UNSOLD REALTY INVENTORIES TO CURB HOARDERS: The Income Tax Department may levy fresh tax on the unsold inventories in the real estate sector from the next financial year. This is to check hoarding. Unsold flats have been lying with many developers for more than a year and this may be taxed from next year. This is a move to curb strategy of hoarding constructed property by developers in anticipation of price escalation in future.

 

  1. INDIA BECOMES 8TH BIGGEST EQUITY MARKET IN THE WORLD: India has surpassed Canada to become the 8th biggest equity market in the world. India’s market cap has swelled by 46.4% in 2017, faster than most of its emerging market peers.

 

  1. GOVERNMENT’S NEW PROPOSAL “BAIL-IN” FACES LOT OF OPPOSITION FROM ALL QUARTERS: The Centre’s proposed Financial Resolution & Deposit Insurance Bill ( FRDI) , which is aimed at plugging bankruptcies in the financial service sector, includes a special provision (“BAIL-IN”) which by definition allows the affected banks to use depositors’ money to absolve some of the losses. The bill has suggested the use of “Bail-in” provision, which may result in cancellation of a liability, which could include bank deposits or could lead to modification of the terms of contract or changing the form of asset class (SB amount converting to FD for a fixed term). The provision would be last in the line for payments in case of liquidation. The present Deposit Insurance Scheme will be subsumed by the new bill, but the Rs 1 lakh deposit insurance will not change. But the plan has generated lot of heat and opposition from all quarters like political parties and bank unions who have criticised the move. Now the government has hinted at reworking the provision. It says no commercial bank has been allowed to sink in the last 70 years and that implicit sovereign guarantee continues even with this new bill. So in our opinion the question arises as to  how safe is our Bank Deposits?

WEEKLY FINANCIAL SNIPPETS-25/11/2017

  • SPENDING ON INFORMATION-TECHNOLOGY BY BANKS AND SECURITY FIRMS TO TOUCH $9 BILLION: Information Technology (IT) spending in Indian Banking and Securities firms is expected to touch USD $ 9.1 Billion, an increase of around 11.7% over last year. This is because the transition of Indian Banking sector to a cashless society is creating many opportunities of technology investments into digital payments infrastructure.

 

  • SBI TO USE BLOCKCHAIN FOR SMART CONTRACTS AND KYC BY NEXT MONTH: . State Bank of India will roll out beta launches of Blockchain – enabled smart contracts. By next month SBI will also launch Blockchain enabled Know Your Customer (KYC) application. These two applications are part of BankChain, a community of 27 banks, which have joined hands to explore and build Blockchain solutions in India. The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.

 

  • NOW GET REWARED FOR PAYING INCOME TAX PROMPTLY: The Income Tax Department has proposed monetary rewards for honest taxpayers depending on the tax paid. The reward will be for taxpayers who are consistent in filing returns and have no outstanding tax liabilities. However if a tax payer defaults in the future, the tax department will deduct the monetary reward thus paid from his refund with interest.

 

  • GST RATE ON RESTAURANTS SLASHED TO 5%: The GST council has slashed the tax on restaurants to 5% for all restaurants, both AC and Non AC. Earlier a 12% and 18% GST was levied on Non AC and AC restaurants respectively.

 

  • CBDT DIRECTS IT DEPARTMENT TO REDRESS TAXPAYERS GRIEVENCES ON PRIORITY: Central Board of Direct taxes (CBDT) has asked the Income Tax department to take prompt steps and address the taxpayers’ grievances, especially those related to refunds and PAN related issues. The CBDT chairman has written to all the principal chief commissioners of the department in the country, underlying the high pendency of such complaints and has asked them to resolve them at the earliest.

 

  • GOVERNMENT SEEKS SPECIAL DIVIDEND FROM RBI FOR BANK RECAPITALISATION: The government has sought a special dividend from the RBI to fund a part of its Rs 2.11 lakh crore plan to recapitalise the public sector banks. The RBI has been asked to pay a

special dividend apart from the yearly surplus that it pays to the government. This dividend if agreed by the RBI will be used only for bank recapitalisation.

 

  • MOODY’S UPGRADES INDIA’S CREDIT RATING FOR FIRST TIME IN 13 YEARS: US based Moody’s has upgraded India’s sovereign credit rating by a notch to “ Baa2” with a stable outlook citing improved growth prospects driven by economic and institutional reforms. The rating upgrade comes after a gap of 13 years.

 

  • PRESIDENT APPROVES ORDINANCE TO AMEND BANKRUPTCY CODE: The government has amended the Insolvency and Bankruptcy Code to prevent wilful defaulters from bidding for stressed assets. The President has given approval for the said amendment which will be followed by cabinet approval.

WEEKLY FINANCIAL SNIPPETS- 18/11/2017

  • RBI INSTRUCTS BANKS TO PROVIDE DOORSTEP BANKING TO SENIOR CITIZEN ABOVE 70 YEARS & DIFFERENTLY –ABLED : Reserve Bank of India has instructed all banks to provide doorstep banking facilities to senior citizens of more than 70 years of age and differently-abled persons by December 2017. This is a very positive move by RBI and senior citizens and differently-abled persons can look forward to availing basic banking services right from the comfort of their homes.

 

  • HDFC BANK LAUNCHES SMART-UP ZONE IN ODISHA: HDFC Bank has rolled out SmartUp zone in Odisha at its Bhubaneswar Branch. The first SmartUp zone was launched by HDFC Bank in Delhi in October. SmartUp zone is an exclusive area of the branch dedicated to start ups. Through this zone, specially trained bank staff will offer tailor made banking and advisory solutions to entrepreneurs.

 

  • WILFUL DEFAULTERS WILL NOT BE ALLOWED TO BID FOR STRESSED ASSETS: SBI chairman Mr. Rajnish Kumar has said that banks will block efforts by wilful defaulters to bid for distressed assets in insolvency proceedings. He said that there is no place for wilful defaulters or people who have diverted funds as proved in the forensic audit. However he said that legally even the promoters were within their rights to bid for the stressed assets but banks would put some pre-conditions so that the wilful defaulters/promoters will not be able to bid for the said stressed assets.

 

  • BANKS RECAPITALISATION TIED TO REFORMS: The government which has announced the recapitalisation of state owned banks has said that the recapitalisation does not come on its own as it is followed and preceded by a whole lot of plans and reforms. Everything is linked to the reforms which each bank board will consider within a time frame and have to come out with plan of action. The reforms also include bank boards taking a stand and coming up with a clear plan on consolidation.

 

  • RBI REJECTS ISLAMIC BANKING IN INDIA: In a major move, the Reserve Bank of India has decided not to pursue a proposal for introduction of Islamic banking in India. The Reserve Bank said the decision was taken after considering the wider and equal opportunities available to all citizens to access banking facilities.

 

  • GOOGLE LAUNCHES “TEZ” APP: Google has officially launched a free mobile wallet in India and has named it “TEZ”. TEZ is a free mobile wallet that will let its users to link up their phones to their bank accounts for making online payments. TEZ App comes with a new technology- Audio QR ( AQR) which uses ultrasonic sounds to let you exchange money.

 

  • DEBIT/CREDIT CARDS AND ATMs WILL BE REDUNDANT IN FOUR YEARS : Niti Aayog CEO Mr.Amitabh Kant has said that debit cards, credit cards and ATMs will be redundant in next 4 years of time. People will start using their mobile phones for doing their financial transactions. He said that 72% of Indian population is averaging below 32 years of age and this young generation will prefer to use mobiles in future for all their financial transactions.

WEEKLY FINANCIAL SNIPPETS-11/11/2017

1. LINKING AADHAAR WITH INSURANCE POLICY MANDATORY: Insurance Regulatory & Development authority (IRDAI) has said that linkage of Aadhaar number with insurance policies is mandatory and asked insurers to comply with the statutory norms. The linkage of Aadhaar to Insurance policies is made mandatory under the prevention of Money-laundering Amendment Rules, 2017. Hence IRDAI has communicated to all Life and general Insurance companies to implement the linkage without waiting for further instructions.

2. SBI NET PROFIT DOWN BY 38% ON HIGHER PROVISIONING: State Bank of India’s standalone net profit declined by 37.9% to Rs. 1,581 Crores in the second quarter of FY 2018. This is because of higher provisioning. There was robust growth in other incomes and hence the Bank’s operating profit grew by 11.4% but due to higher provisioning the net profit was down by 38%.

3. HDFC BANK MAKES RTGS/NEFT TRANSACTIONS FREE: Private sector lender HDFC Bank has made online RTGS/NEFT transactions  free of cost from November 1, with an aim to promote digital economy. However, any RTGS/NEFT transactions carried out at the branch level will be chargeable. On the other hand, various charges like cheque–related transactions as well as request for additional cheque leaves will get costlier.

4. SBI EXPECTS MOST CASES FROM RBI SECOND LIST OF NPAs TO GO TO NCLT: State Bank of India expects most of the cases from RBI’s second list of large Non-Performing Assets (NPAs) to be referred to the National Company Law Tribunal (NCLT) for resolution under the Insolvency and bankruptcy Code (IBC). The country’s largest bank has an exposure of Rs. 26,636 crore to 27 of 30 such accounts listed by RBI.

5. DEMONETIZATION IMPACTS PEOPLE’S CURRENCY HOLDING HABITS : One year after the note ban, there is a significant drop in demand for currency due to a sharp rise in payments through digital means, digitization and changes in currency holding habits, according to a study by RBI. It is estimated that the total Currency In Circulation (CIC) has declined by around Rs 9 lakh crore between November 4, 2016 and January 6, 2017.

6. RBI INSTRUCTS BANKS’ TO HAVE IT EXPERTISE AT BANKS’ BOARD LEVEL: With cyber threats emerging as a major risk for the financial sector, the Reserve Bank of India has said banks need to have a an IT expert on board to ensure speedy implementation of measures to address this challenge. Reserve Bank’s Executive Director Meena Hemachandra said that with banking becoming more technology driven, IT expertise at the board level has become a necessity.

 

WEEKLY FINANCIAL SNIPPETS – 21/10/2017

1. BANKING SECTOR STARES AT AN ADDITIONAL Rs 40,000 CRORE NPA: The RBI has directed certain reclassification in the private sector banks’ asset classification and provisioning as on 31/03/2017, subsequent to the annual Risk Board Supervision (RBS) exercise conducted by them. As a result of this, more than Rs 40,000 crore of bad loans will be added to banking sector NPAs. Axis Bank alone has reclassified 9 standard accounts to NPA category, of which 8 accounts are part of consortium finance.

2. INDUSIND BANK TO TAKE OVER BHARAT FINANCIAL: Indusind Bank and the second largest micro lender Bharat Financial Inclusion (BFIL) announced the largest merger in the MFI space. With this merger Indusind will add additional 6.8 million customers to its existing 10 million customer base. This merger will help Indusind Bank in rural lending and also help reduce its cost of funds by 3–4 %. The entire balance sheet of BFIL will move into Indusind Bank, while its operation team will continue as a wholly owned subsidiary and work as business correspondents.

3. RESERVE BANK OF INDIA SETS UP TASK FORCE ON PUBLIC CREDIT REGISTRY: Reserve Bank of India has set up a high level task force on a Public Credit Registry (PCR) with an aim to improve ease of doing business and control delinquencies. The 10 member panel will be headed by Mr. Y. M.Deosythalee, former CMD of L&T Finance Holdings. The PCR would help in enhancing efficiency of the credit market, increase financial inclusion, improve ease of doing business and help control delinquencies.

4. BANKING INDUSTRY WAGE PACT UNLIKELY BY MONTH END: The term of existing wage agreement of PSU Banks ends on October 31st. The discussions and negotiations for the fresh wage revision started 4 months ago. The prospects of arriving at a wage pact between bank managements under the aegis of Indian Banks’ Association (IBA) and trade unions by the end of this month looks very grim.

5. RBI SAYS LINKING OF AADHAAR TO BANK ACCOUNTS A MUST:The Reserve Bank of India has said that linking of Aadhaar number to the bank accounts is mandatory. This was in reply to a query raised under Right To Information (RTI) application, which suggested that the apex bank has not issued any order for mandatory Aadhaar linkage with bank accounts.

6. ONLY 2,300 BANK BRANCHES OPEN AADHAAR ENROLMENT CENTRES: Only 2,300 branches of private and public sector banks have opened Aadhaar enrolment and updation centres within their branch premises as against the targeted 15,300 branches by this month end. The September 30th deadline that was given to the banks had been extended by one month to October 31st.

7. INDIA’S FOREX RESERVES RISE BY $ 1.5 BILLION: India’s Foreign Exchange reserves (Forex) kitty increased by $ 1.5 billion as on October 13th The overall Forex Reserves rose to $ 400.29 billion. India’s Forex Reserves comprise of Foreign Currency Assets (FCAs), gold reserves, Special Drawing Rights( SDRs) and RBI’s position with the International Monetary Fund(IMF).

WEEKLY FINANCIAL SNIPPETS-30/09/2017

1. LENDING RATE CUTS IS THE KEY TO ECONOMIC RECOVERY:Lending rate cuts are the only way to economic recovery as it would perk up demand and push investments. This is as per one economic survey report. The report said that structural reforms take longer time of 5-10 years to reflect in growth rate. Lending rate cuts would push demand, put idle factories to work and spark off investment.

2. SBI SAYS FINE FROM MINIMUM BALANCE DEFAULTS TO AMOUNT TO Rs 2,000 CRORE: SBI expects to realise over Rs 2,000 crore from Savings Bank account holders as penalty for not maintaining minimum balance in their account. Till June quarter end the Bank has recovered Rs 235 crore. The sum thus collected will be used to partly cover the costs incurred on linking of accounts with Aadhaar which is a very costly affair. Other than this, the cost of maintaining ATMs and business correspondents is also very high.

3. BANKING SECTOR’S CREDIT DEMAND TO GET BOOST FROM GOVERNMENT PROJECTS: State bank of India Chairperson Ms Arundhati Bhattacharya said that the banking industry is poised for a recovery in the credit demand as it stands to gain from the number of projects announced by the government. We just saw the declaration of bullet trains and various other corridors which are expected to come up soon and these projects will give a boost to the credit and investment cycle.

4. NPA RESOLUTION- BANK UNIONS ARE SCEPTICAL OF BANKRUPTCY CODE: Bank unions have claimed the bankruptcy process initiated by various lenders for NPA resolution will not help in bringing the money back. The Union press releasesaid the bankruptcy process is not going to yield desired results in terms of NPA recoveryas the recovery process is going to be very slow and there is no guarantee of banks getting back the entire dues. Banks will incur further loss on account of these accounts.

5. CARD PAYMENTS DRIVE MAY LAND BANKS WITH Rs.3,800 CRORE ANNUAL HOLE: As per a SBI research report, The government’s digital payments push, mainly online card payments through PoS machines may bleed the banks by a whopping Rs 3,800crore annually. The number of PoS terminals post –demonetization has increased from 13.8 lakh in March 2016 to 28.4 lakh as of July 2017.There is a huge cost involved in maintaining these PoS machines and the net loss would be a whopping Rs 3,800 crore annually. (This is all banks put together).

6. ALLAHABAD BANK TO INTRODUCE 2-TIER SAVINGS BANK INTEREST RATE FROM OCTOBER 1st: Following in the footsteps of some of the PSU banks which have already reduced the interest rate on Savings bank deposit, Allahabad Bank is going to introduce 2-tier savings interest rate from October 1st. It will be 3.5% interest for accounts having less than Rs.40 lakhs balance and 4% for accounts having balance of Rs.40 lakh and above.

7. NO COUNTING MACHINES BUT SOPHISTICATED CURRENCY VERIFICATION UNITS BEING USED FOR SCRAPPED NOTES: The Reserve Bank of India is not using counting machines for tallying the scrapped demonetized notes but it is using sophisticated Currency verification and Processing Machines (CVPS) for checking the numerical accuracy and geniuses of currency notes in all its offices.

WEEKLY FINANCIAL SNIPPETS – 23/09/2017

1. PEER-TO-PEER LENDING TO BE TREATED AS NBFCs: After a year or more of due diligence and analysis, RBI has notified that peer-to-peer (P2P) lending platforms need to be regulated and treated on par with Non-Banking Financial Companies (NBFCs).While final guidelines are awaited, the P2P lenders have welcomed this move as they feel these regulations would help bring credibility and trust in to the business. This will also bring in a lot of legal clarity as the P2P lenders will have the rights to take legal action against the defaulters.

2. YES BANK TRIMS ITS STAFF STTRENGTH BY NEARLY 2,500: Yes Bank Ltd has gone in for “Rationalisation” of workforce as it has reduced its workforce by nearly 2,500. YesBank report said that digital transformation has created certain redundancies which require rationalisation of the workforce.

3. PRIVATE BANKS’ SHARE IN CREDIT WILL TOUCH 40% BY 2020: As per a report from credit rating agency ICRA, Indian Banking is going through a transition, with both Private and public sector banks ( PSBs) facing different challenges. PSBs are plagued with poor asset quality issues, leading to higher credit costs and losses. Due to this fact the share of private sector banks in banking sector advances will reach a level of around 40% by 2020. As of March 2017 private sector banks’ share in total advances was 27.5%.

4. CHEQUE BOOKS, IFS CODES OF 6 MERGED SUBSIDIARY BANKS WILL BE INVALID FROM SEPTEMBER 30th :State Bank of India has notified its customers that cheque books and IFS codes of six of its merged subsidiary banks would be invalid from September 30th and has asked them to submit new applications for fresh cheque books.

5. AIRTEL PAYMENT BANK ROLLS OUTUPI-ENABLED DIGITAL PAYMENTS: Airtel Payments Bank has become the first payments bank in India to integrate Unified Payments Interface (UPI) on its digital platform. This will enable Airtel Payments Bank customer to make secure digital payments to online/offline merchants and making instant money transfers to any bank account in India. They will also be able to link their accounts on BHIM app and make UPI payments.

6. INDIAN BANKS NEED $ 65 BILLION CAPITAL TO MEET BASEL-III NORMS BY MARCH 2019: As per a report from Fitch Ratings, Indian Banks will need an additional capital of $ 65 billion       (approximately Rs 4,16,000 crores) to meet global Basel-III banking norms by March 2019. Whereas the government has budgetedan $ 11 billion (Rs 70,000 crores) capital infusion into state-run lenders till March 2019, the state-run banks have limited options to raise the required capital.

7. CENTRE CLEARS BILL TO INCREASE TAX FREE GRATUITY LIMIT TO Rs 20 LAKH: The Centre has approved an amendment Bill that increases the limit of tax free gratuity up to Rs 20 lakh for employees belonging to public as well as private sector. Once this bill is passed, all employees that are not covered under the Central Civil Service (Pension) Rules will be able to avail the tax free gratuity of up to Rs.20 lakh.

WEEKLY FINANCIAL SNIPPETS- 16/09/2017

1. CREDIT GROWTH OF BANKS SLOWED DOWN TO 8.1% IN 2016-17: As per Bradstreet Report, the credit growth of all banks slowed down to 8.1% in 2016-17, down from 10.9% in the previous year. Aggregate deposits improved to 15.9% in the same period compared to 9.3% in the previous year. The deposit growth can be attributed to the massive inflow of funds in to the banking system after demonetization. Nevertheless the banks’rising NPAs(Non-Performing Assets) is a big headache for the PSU Banks.

2. IT MAY TAKE ATMs 3 MONTHS TO DISPENSE Rs.200/- NOTES: While RBI has already launched Rs. 200 currency notes in the system a week ago, it may take up to 3 months for ATMs to dispense the new currency as it will involve huge exercise of recalibration. The banks have not yet got the supply of Rs. 200 currency but some banks have asked the ATM companies to begin testing the new note for the recalibration. It is yet to be seen whether all the 2.2 lakh ATM machines across the country would be recalibrated for dispensing the new note.

3. SBI CARDS TO START CONTACTLESS PAYMENTS SOON: SBI Cards has doubled its base in three years to over 50 lakhs cards. SBI Cards is updating its mobile application and all its customers could soon make payments merely by tapping their smartphone on a swipe machine. Some card holders are already using this cardless payment facility on the Samsung Pay Platform. The bank plans to launch its own proprietary application which enables virtualisation of the card and any smartphone subscriber can pay by just tapping his mobile phone if he is a SBI card holder.

4. NBFCs’ SHARE IN LOANS REACH AN ALL TIME HIGH:Non-BankingFinance Companies (NBFCs) are on a roll as their share in retails lending in India has reached an all-time high of 36% at the end of March 2017. They continue to grow faster than both private and public sector banks. NBFCs have shown a growth of 17% over the previous yearas against a growth of 15% as reported by private sector banks and 2.5% decline in retail loans by PSU banks.

5. GOVERNMENT MUST PUMP IN MORE CAPITAL IN TO PSU BANKS FOR EFFECTIVE NPA RESOLUTION: Fitch Ratings has said that weak capital position of PSU banks have a major negative influence on Indian Banks viability reports and these banks will come under more pressure if the problem is not addressed. The report says the government has to pump in additional capital in to PSU banks to make them tackle the NPA menace effectively and raise their loan growth.

6. HDFC BANK’S “EVA” BECOMES INDIA’S SMARTEST CHATBOT: HDFC Bank, in collaboration with Bangaluru based company Senseforth has launched “EVA”( Electronic Virtual Assistant) in March this year on its website. Since then EVA has interacted with over 5, 30,000 unique users, holding 1.2 million conversations and has addressed 2.7 million customer queries to become India’s largest banking “Chatbot”.

7. BANKS WITHOUT AADHAAR ENROLLMENT CENTRES TO FACE FINE FROM OCTOBER: The UIDAI has given banks one month time to open Aadhaar enrolment centres in a stipulated 10% of branches and if this is not implemented, a fine of Rs. 20,000 per uncovered branch will be imposed after September 30th.

8. SBI TOO LAUNCHES ITS OWN AI-POWERED “CHATBOT”: State Bank of India too has launched its own chatbot to handle customer queries and guide them through range of retail products and services. The chatbot is named “SBI Intelligent Assistant” (SIA) and is currently undergoing beta testing.