SBI lowers lending rate by up to 15 bps; 10th cut in current fiscal

Overnight and one-month MCLRs have been reduced by 15 basis points to 7.45 per cent each. Three-month MCLR has been revised to 7.50 per cent from 7.65 per cent

The country’s largest lender State Bank of India (SBI) on Wednesday said it has reduced its marginal cost of fund-based lending rate (MCLR) by up to 15 basis points across various tenors, effective March 10. The bank has reduced its one-year MCLR by 10 basis points to 7.75 per cent from 7.85 per cent earlier, the SBI said.

This is 10th consecutive cut in MCLR by the bank in the current fiscal. Overnight and one-month MCLRs have been reduced by 15 basis points to 7.45 per cent each. Three-month MCLR has been revised to 7.50 per cent from 7.65 per cent. The new two-year and three-year MCLRs stand reduced by 10 basis points to 7.95 per cent and 8.05 per cent, respectively.

On Monday, another state-run lender Union Bank of India had announced cut in its MCLR by 10 basis points across all tenors, effective March 11. This is the ninth consecutive rate cut announced by the Mumbai-based bank, since July 2019. The bank has cut its one-year MCLR to 8 per cent from 8.10 per cent. The overnight MCLR has been revised to 7.55 per cent, while the new one month rate stands at 7.60 per cent, the bank had said.

Here’s how you can avail of a loan despite having a poor credit score

The following tips and suggestions will help you avail loan to deal with financial exigencies or unavoidable life-events, despite your poor credit score.

BUSINESS STANDARD – Banks and NBFCs use credit scores to evaluate the creditworthiness of loan and credit card applicant. Credit score of 750 and above are considered as good and hence, those not making the cut have very low chances of loan or credit card approval or pay higher rates for them. While there are time-tested methods of improving your credit score, those take time and patience. The following tips and suggestions will help you avail loan to deal with financial exigencies or unavoidable life-events, despite your poor credit score:

Opt for secured loan:

Secured loans are those in which the loan applicant has to pledge asset(s) as security or collateral against the loan amount. Loan against property, loans against fixed deposits, loan against securities, gold loan are some of the most popular variants of secured loans. As the lenders have the option to sell your collateral in the event of a loan default, they may ignore or relax the requirement of a good credit score while evaluating your creditworthiness.|BS

For borrowers with similar credit profiles, secured loans usually have a lower interest rate than the unsecured loans. Given that those with lower credit score might have to pay a higher interest rate on an unsecured loan, opting for a secured loan might help in reducing your interest cost.

Approach NBFCs and housing finance companies (HFCs):

NBFCs and HFCs usually have less stringent loan evaluation processes than banks. NBFCs and HFCs usually target borrowers avoided by banks. Hence, those with lower credit score may have higher chances of loan approval from NBFCs than banks…Read More

At Rs 9.4 bn, PNB posts straight quarterly loss on fraud-related provisions

PNB, the fourth-biggest bank by assets among all of India’s lenders, in February said it had been defrauded by two jewellery groups

Scam-hit Punjab National Bank incurred a net loss for the second consecutive quarter. It reported a loss of Rs 9.4 billion for the first quarter of the current financial year, compared to Rs 134 billion in the fourth quarter of the previous financial year. It had earned a net profit of Rs 3.4 billion in the year-ago period.

However, the bank earned an operating profit of Rs 41 billion in Q1 against the operating loss of Rs 4.5 billion in the previous quarter. It had earned an operating profit of Rs 32 billion in Q1 of FY18.

One reason why losses came down was the decrease in provisioning made by the bank in Q1 of FY19 compared to Q4 of FY18. PNB made a provisioning of only 12 per cent, at Rs 18.4 billion, in the last quarter. It had provided for half the amount of losses in Q4. So, total provisioning stood at 12 per cent till June 2018. It is yet to make a provisioning of Rs 53.4 billion.

The bank recovered Rs 84 billion of its bad loans in the first quarter of FY19 against Rs 56 billion recovered in all of FY2018.

“We are looking at a recovery of Rs 200 billion in the first half of this financial year,” PNB MD and CEO Sunil Mehta said.

News Source : BS

Who will succeed CEO Shikha Sharma? Axis Bank shortlists three candidates

Axis Bank will be submitting its application in respect of the recommendations relating to the said appointment, for the approval of the RBI

 

Axis Bank on Tuesday said it has shortlisted three candidates to succeed the MD & CEO Shikha Sharma, whose term is due to expire in December this year.

The bank, however, did not disclose names of the candidates shortlisted for the post.

In terms of extant RBI norms and the succession planning process of the bank, the Board of Directors of the bank at its meeting held on July 9, 2018, has recommended the names of three candidates, in order of preference, for the approval of the RBI, Axis Bank said in a regulatory filing.(CLICK HERE : AXIS BANK SHARE PRICE)

“The candidate as approved by the RBI, will succeed Shikha Sharma, whose term as the Managing Director & CEO of the Bank, is due to expire on 31st December 2018,” the bank said.

Axis Bank will be submitting its application in respect of the recommendations relating to the said appointment, for the approval of the RBI, it added further.

Earlier in April, the bank CEO had wanted her new term to be reduced to seven months from three-year tenure, which was accepted by the bank board subsequently.

Sharma had completed her third term as MD and CEO of Axis Bank on May 31. However, she had not intimated the reason for an early exit from the bank.

The bank board had decided to reappoint her as the MD&CEO for a period of three years with effect from June 1, 2018.

Stock of the bank closed 1.70 per cent up at Rs 532.55 on BSE.

News Source : BS

IndusInd Bank Q1 up by 24% at Rs 10.36 billion, asset quality falls

CASA (Current Accounts-Savings Accounts) Ratio improved to 43.42 per cent against 37.78 per cent in June 30, 2017

 

Private sector IndusInd Bank on Tuesday posted a 23.8 per cent rise in its net profit at Rs 10.35 billion for the quarter ended June 2018 on higher income mainly from interest. This was against a net profit of Rs 8.36 billion in the corresponding period of previous year.

Total income during the quarter rose to Rs 63.69 billion, up by 20 per cent as against Rs 53 billion in the same quarter of last year.

Net interest income was Rs 21.2 billion in June quarter, up by 20 per cent from Rs 17.74 billion earned in the same period a year ago.

Net interest margin fell to 3.92 per cent in June, from 3.97 in previous March quarter. The bank has a NIM outlook of 3.9 – 4 per cent for the year.

Other income rose to Rs 13 billion for the quarter under review, from Rs 11.67 billion in the corresponding period a year ago.

IndusInd bank share price

However, there was a slight deterioration in bank’s asset quality with the gross non-performing assets(NPA), as a per cent of the gross advances, standing at 1.15 per cent as on June 2018, as against 1.09 per cent a year earlier. However, it was an improvement over the previous quarter’s gross NPA ratio of 1.17.

CASA (Current Accounts-Savings Accounts) Ratio improved to 43.42 per cent against 37.78 per cent in June 30, 2017.

Total Advances as on June 2018 grew 29 per cent to Rs. 1.506 trillion while total deposits grew by 19 per cent to Rs 1.588 trillion over year-ago quarter.

The bank has no plans to raise capital in the near future and placed a timeline of three months for merger with Bharat Financial.

Article Source : BS

Nirav Modi scam: PNB Ex-MD knew it all, could have averted Rs 130-bn fraud

In its 12,000-page charge sheet, CBI claims that Usha Ananthasubramanian and some other senior bank officials were aware about Nirav Modi's fraudulent dealings, but kept misleading RBI

Former Punjab National Bank (PNB) managing director and chief executing Usha Ananthasubramanian and other senior bank officials had been aware of diamond merchant Nirav Modi's "fraudulent" dealings but kept "misleading" the Reserve Bank of India (RBI), the Central Bureau of Investigation (CBI) has alleged in its 12,000-page charge sheet.

A special CBI court took cognizance of the charge sheet on Monday and permitted the investigating agency to issue fresh non-bailable warrants against Nirav Modi, his brother Nishal and Subhash Parab, an executive of the Nirav Modi Group.

In its charge sheet into the nearly Rs 130-billion scam, the CBI said the RBI had since October 2016 sent several questionnaires to the PNB, seeking to know what procedures or measures the bank follows before issuing Letters of Understandings and Letters of Credit.

"This was duly dealt by accused Ananthasubramanian and the bank's Executive Directors - K V Brahmaji Rao, Sanjiv Sharan and Nehal Ahad and instead of replying to the queries in true spirit and facts, Ahad and the general manager of the International Banking Division of the bank's headquarters prepared a misleading reply and sent it to the RBI after getting the same approved from Sharan," the CBI said.

The 12,000-page charge sheet further claimed that a similar fraud was detected in 2016 following which the RBI took up the issue and issued circulars to all banks.

"The accused PNB officials, including Ananthasubramanian and others, were aware of this fraud involving PNB Dubai and the Indian Overseas Bank Chandigarh and yet they did not take any corrective action and remained silent spectators. This facilitated continuance of the fraud resulting in wrongful loss to the PNB," it said.

From August 2015 to May 2017, when Ananthasubramanian was the MD and CEO of the PNB, relevant circulars, caution notices and urgent questionnaires issued by the RBI were brought to her notice and she dealt with the same, the CBI said.

"Inspite of her knowledge about the modus operandi in these frauds, she (Ananthasubramanian) did not take any meaningful corrective measures in her capacity as the executive head of the bank and had unauthorizedly delegated the RBI guidelines work to her subordinates without any follow up action," the charge sheet said.

The CBI has further claimed that senior officers from the Nirav Modi Group including accused Vipul Ambani were constantly meeting Ananthasubramanian in order to continue with the credit facilities to the group.

"This indicated clearly that she (Ananthasubramanian) was aware of the facilities extended to the various group entities of Modi," it said.

The agency said the accused bank officials held supervisory roles in the bank and had through their acts facilitated the issuance of the fraudulent LOUs.

"The fact that bank official Gokulnath Shetty continued to issue fraudulent LOUs with impunity despite issuance of several RBI circulars indicates an environment of protection he enjoyed in the form of lack of reconciliation and absence of bank visits by seniors," the CBI said.

The patronage extended by the senior officials of the bank to the accused persons working in the PNB Brady House branch of Mumbai resulted in a huge wrongful loss to the bank and wrongful gain to the accused persons, it said.

"MD and CEO Usha Ananthasubramanian and other senior bank officials by failing to take any precautions or preventive steps to prevent the fraud perpetrated by firms controlled by Nirav Modi thereby committed criminal misconduct in conspiracy with the other accused persons," CBI alleged.

Read Full Source: Nirav Modi Scam At PNB

80% of Indians now have a bank account. So why is financial inclusion low?

No more than 1% of PMJDY account holders-3.1 million beneficiaries-use overdraft facilities available to them, and 17% of PMJDY accounts are 'zero-balance'

Up to 80% of Indians now have a bank account, the same proportion that have a mobile phone, but financial inclusion levels are still among the world’s worst, lower than sub-Saharan Africa on some counts, according to a new report.

Despite the availability of mobile-banking services and the narrowing of gender, wealth and education gaps in account ownership, few account holders are using facilities available to them, raising doubts around improvements for financial inclusion, according to the latest Global Findex 

Survey released by the World Bank in April 2018.

India’s unbanked population has been the target of the government’s flagship Pradhan Mantri Jan Dhan Yojana (PMJDY), or the Prime Minister’s People’s Wealth Programme, launched in 2014. It has been largely responsible for the rapid increase in opened accounts, the Global Findex report said.

No more than 1% of PMJDY account holders–3.1 million beneficiaries–use overdraft facilities available to them, and 17% of PMJDY accounts are “zero-balance”, meaning they are not used, 

recent data show, although that is down from 25% in 2016 and 75% in 2014.

There is no marked improvement in access to formal credit, and 38% of Indian accounts are inactive–meaning, there were no withdrawals or deposits over the course of a year–suggesting that many Indians are still not integrated into the formal banking system.

Participation in and effective use of financial services can help drive development goals by aiding investment in education and health, helping to manage financial emergencies and reduce dependency on cash, the report said.

India not yet benefitting from mobile banking

The proportion of the Indian population accessing financial institution accounts from their phones or the Internet, making digital payments or using mobile money wallets is significantly lower than in other developing economies.

In 2017, 5% of Indians accessed a financial institution account from their phone or the Internet, and 2% of the population owned a mobile money account, the Global Findex data show.

Compare this to sub-Saharan Africa, where 21% of adults had a mobile money account in 2017, the highest anywhere in the world and a 50% increase since 2014. Digital payments are also more widespread, with 97% of adults in Kenya making a digital payment in 2017 and 60% in South Africa, compared to 29% in India.(Read More)

Bitcoin tumbles as PBOC declares initial coin offerings illegal

Bitcoin tumbled as much as 11.%, the most since July, to $4,326.75

Bitcoin tumbled the most since July after China’s central bank said initial coin offerings are illegal and asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.

The People’s Bank of China said on its website Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalising legal violations in ones already completed. The regulator said that those who have already raised money must provide refunds, though it didn’t specify how the money would be paid back to investors.

It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings.

“This is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions —the short story is we all know regulations are coming,” said Jehan Chu, managing partner at Kenetic Capital in Hong Kong, which invests in and advises on token sales. “China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action.”

Bitcoin tumbled as much as 11.4 percent, the most since July, to $4,326.75. The ethereum cryptocurrency was down more than 16 per cent Monday, according to data from Coindesk.

ICOs are digital token sales that have seen unchecked growth over the past year, raising $1.6 billion. They have been deemed a threat to China’s financial market stability as authorities struggle to tame financing channels that sprawl beyond the traditional banking system.

Reasons why RBI is introducing Rs 200 notes

The decision to introduce the new note was taken by RBI board in March

The Reserve Bank of India (RBI) will issue Rs 200 notes soon, possibly at the end of August itself, filling the missing link between Rs 100 and Rs 500, and thus facilitating ease of exchange for common public.

The finance ministry on Wednesday notified the introduction of the new notes. The decision to introduce the new Rs 200 note was taken by RBI board in March.

Introduction of currency notes is done by any central bank based on an assessment of inflation, economic growth, replacement of soiled banknotes, reserve stock requirements, needing to combat counterfeiting but most importantly, to facilitate ease of transactions for the common man.

The optimal system of denominations of currency is worked out on the basis of minimising the number of denominations needed for offering the exact change. There are actually some renowned international research works behind determining the optimal mix of currency notes.(read more)

Banks can deposit banned Rs 500, Rs 1,000 notes with RBI by July 20: Govt

This is the second window the government has provided to banks, post offices and cooperative banks

The government has permitted banks and post offices to deposit junked Rs 500 and Rs 1,000 notes with the Reserve Bank by July 20.|economy news  

This is the second window the government has provided to banks, post offices and cooperative banks for depositing the junked notes with RBI.

The earlier window was open till December 31, a day after the 50-day period of demonetisation of high value currency.

"Such specified bank notes may be deposited by such bank, post office or district central cooperative bank, as the case may be, in any office of the Reserve Bank, within a period of 30 days from the commencement of these rules," said a government notification.

It further said that they should get the exchange value by credit to the account of such subject to the satisfaction of the RBI of the conditions specified.|economy policy

RBI will accept deposits collected by any bank or post office by December 30, 2016 or by any District Central Cooperative Bank from November 10-14, 2016 should be deposited within 30 days, the notification said.

They should also cite valid reasons for non-deposit of the specified bank notes within the period, it said.

 

Upcoming bank and government exams in 2017

The candidate should be careful while filling out the application

More than 1.5 crores candidates took up the bank exams of IBPS (Institute of Banking Personnel Selection) in the last three years and vacancies in the Indian banks equaling 68000 were occupied.

When it comes to making a career choice that promises security and financial stability, bank jobs in India have always been roped in first. Public sector banks are getting a tough competition from private banks. As a result, they are reaching out to rural and semi-urban areas. Despite the rise of Information Technology, millions of people still prefer bank jobs and apply for various positions in public sector banks.

Here’s the list of upcoming bank exams and jobs in 2017. It also features other government exams.

Listed are the important details regarding the bank exams and jobs for the year 2017-18: | Read More

57 defaulters owe banks a whopping Rs 85,000 cr: RBI to SC

Only 57 borrowers have defaulted on bank loans worth a whopping Rs 85,000 crore.

The Supreme Court said this after perusing a report submitted by the Reserve Bank of India (RBI) about persons who have taken loans worth over Rs 500 crore and defaulted and asked the central bank why their names should not be made public.

"Who are these people who have borrowed money and are not paying back? Why this fact that the person has borrowed money and not paying back be not known to public," asked a bench headed by Chief Justice T S Thakur.

The bench, also comprising Justices D Y Chandrachud and L Nageswara Rao, said if the bar was lowered below Rs 500 crore, then the default amount would cross over Rs one lakh crore.

Observing that if people file an RTI query, they must know who the defaulters are, the bench asked the Reserve Bank of India (RBI) why the information on defaulters should be withheld.

"People should know how much money a person has borrowed and how much money he needs to pay back. The amount payable should be known to public. Why should you withhold the information," the bench said.