HDFC's Parekh expects regulatory response to merger to be fair, judicious

 Says India can double home loans in 5 years to $600 billion

Deepak Parekh, chairman of HDFC Ltd, the largest mortgage financier of the country said he expects the regulator’s view on the proposed merger with HDFC Bank to be fair and judicious while asking the stakeholders to be patient. In his address to the shareholders in the annual report, the HDFC patriarch said after 45 glorious years of providing homes to millions of customers, the time is right for HDFC to find a new home.

In April, the HDFC and HDFC Bank announced a plan for an all-stock deal merger, for which all the regulatory approvals are expected in 15-18 months. HDFC Bank has requested the Reserve Bank of India for more time to meet several regulatory requirements like cash reserve ratio, statutory liquidity ratio and priority sector lending targets.

“At this juncture, we are awaiting regulatory guidance on the path forward. We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level,” Parekh said in the note to the shareholders of HDFC. “My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support,” he said….Read More

HDFC-HDFC Bank mega merger: 45 years on, the homemakers check in

 Fifty-five years ago, Hasmukh Thakordas Parekh set up HDFC Ltd, which went on to become a marquee name in India Inc

“After 45 years of housing finance and nine million homes provided to Indians, we had to find a home for ourselves. We have found it within our own family and in our own bank,” said Deepak Parekh, chairman-HDFC Ltd while announcing the long speculated merger with its offspring, the 28-year-old HDFC Bank.

The “we” that Parekh referred to is a many-million-strong family, and includes the housing finance company’s employees, shareholders, and customers. It’s said that anything more than two is a crowd, but a lack of togetherness will not be an issue, Parekh made that clear upfront: “This is a merger of equals.”

It must truly have been an emotional moment for Parekh. Fifty-five years ago, Hasmukh Thakordas Parekh set up HDFC Ltd, which went on to become a marquee name in India Inc. His nephew — the Parekh of our times — had the foresight to set up HDFC Bank when the first set of private bank licences were issued in the early 1990s.

RBI cuts repo rate by 40bps to 4%, sees contraction in FY21 GDP growth

Catch all the market updates here

Indian markets declined on Friday even as the Reserve Bank of India (RBI) slashed repo rate by 40 basis points (bps) to 4 per cent and maintained the stance ‘accomodative’. Consequently, reverse repo rate now stands at 3.35 per cent from 3.75 per cent earlier. Moreover, RBI Governor Shaktikanta Das said that the GDP growth in FY21 is expected to be in negative territory. READ MORE

Among headline indices, the S&P BSE Sensex slipped 290 points to around 30,630 levels and the Nifty50 index slipped below the 9,050 level. Infosys gained 2 per cent after the class action lawsuit filed against the company in the US was dismissed. Reliance Industries gained 1 per cent after the conglomerate said that KKR would invest Rs 11,367 crore into Jio Platforms for 2.32 per cent equity stake. READ MORE

The trends among Nifty sectoral indices was mixed. Nifty PSU Bank index, up 1.8 per cent, gained the most.

Results today: A total of 25 companies including Alembic Pharmaceuticals, IDFC First Bank, and UPL, are scheduled to announce their March quarter earnings later in the day.

COMMENT :: VK Vijayakumar, chief investment strategist, Geojit Financial Services

RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models. Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue..Read More

Covid-19 relief: You can defer 3 EMIs but that may be a very costly option

SBI informed customers that in some cases, deferring 3 EMIs on a home loan may force the borrower to pay 8 more EMIs

After RBI allowed commercial banks to provide their customers a moratorium of three months for repayment of term loans, public sector banks have sprung into action. Public sector banks have informed their customers about deferment of EMIs and interest dues to help soften the blow due the coronavirus crisis. The deferment may come at a price though.

The country’s largest lender State Bank of India on Wednesday warned borrowers that deferment of equated monthly instalments (EMIs) offered under the RBI’s relief package on account of COVID-19 could put an additional cost on them. The lender also advised borrowers to repay their loans if they are in a position to do the same. SBI said on its website that deferring the EMIs for a home loan of Rs 30 lakhs with a remaining maturity of 15 years, the net additional interest would be approximately Rs 2.34 lakhs, which is equal to eight EMIs. In other words, if customers defers three EMIs then they will end up paying 8 EMIs more.

Last week, the Reserve Bank of India (RBI) gave a relief package for retail borrowers and businesses, by way of announcing a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020.The dispensation is aimed to mitigate the burden of debt servicing brought about by disruptions on account of COVID 19 pandemic and to ensure the continuity of viable businesses. “In terms of RBI COVID-19 regulatory package, SBI has initiated steps to defer the instalments and interest/EMIs on term loans falling due between March 1, 2020 to May 31, 2020 and extended the repaymentperiod by 3 months. The interest on working capital facilities for the period March 1, 2020 to May 31, 2020 is also deferred to June 30, 2020,” country”s largest lender SBI said.

HDFC Bank is the most valued brand in India, LIC takes second spot: Survey

The top rung is unchanged but overall brand value growth slows to 6% in 2019 from 34% in the previous year: BrandZ

HDFC Bank beat the crowds to top the list of 75 most valued brands in India, keeping its position intact from the previous year. At second and third spots, too, the old order held its grip. Public sector insurer Life Insurance Corporation of India (LIC) and IT major Tata Consultancy Services (TCS) retained their second and third ranks in the list of most valued Indian brands.

The big change, however, has been in the overall growth of brand values in the BrandZ 2019 Most Valuable Indian Brands, a report by WPP and Kantar Millward Brown. The total value of the top 75 brands increased to $228.2 billion, growing at a moderate 6 per cent over 2018, far slower than 34 per cent recorded the previous year. The report calculates valuations and ranking by combining companies’ financial data with consumer insight and opinion.

While brands grappled with many challenges this year, a few managed to push valuations up significantly. With a 34 per cent jump in brand valuations, Jio led the band of top risers, a diverse set of brands on the list. Preeti Reddy, CEO South Asia, Insights Division, Kantar, said, “They (Reliance Jio) have built an entire ecosystem around Jio which is feeding into each other and they continue to be disruptive.” Among the other brands that increased their valuations at a significant clip are Infosys, TCS, Maggi, Ola, and others….

Planning to withdraw cash on your credit card? Watch out for the expenses

You could end up paying not just a steep rate of interest but a hefty cash advance fee as well. In several cases the cost of the loans exceeds 36% on an annualised basis

Rahul, 24, landed himself a new job in Delhi at a multinational company. He had just shifted to the new city from Mumbai, but was soon soon hit a cash crunch brought about by a variety of reasons.

The money he got from his parents was exhausted, pay day was still very far away and, to make matters worse, his landlord began pestering him for some more money for the house he’d already paid advance rent and deposit.

All this meant that he needed some quick cash that he was finding really difficult to raise. So he decided to use his new credit card to sort out everything. Just go to the ATM, insert your card, punch in the PIN number and amount and bingo! You get the money you want so badly.

It was only a few weeks later that he realised that easy liquidity comes with some unpleasant side effects. When Rahul received his monthly credit card bill, he was shocked to see the charges — interest and processing fee — that the card issuer had bunged him with.

Here are some of the charges such loans attract:

Cash advance fee: This fee is charged every time a credit card is used to withdraw cash and typically varies from 2.5% to 3% of the withdrawn amount, subject to a minimum amount of Rs 300 to Rs 500.

Finance charges:

You will also have to pay a finance charge on cash advance fee at a rate similar to that charged on the withdrawn amount. It will be levied from the date of withdrawal till the amount is paid back in full.

Interest:

This is charged at the monthly percentage rate and will be levied from the date of transaction till the repayment is made in full.

Article Source : BS

Rising food cost may push August retail inflation to 5-month high: Reuters poll

 But rising price to complicate RBI's policy path as economic growth cooled to a three-year low in Q2

 

India's retail inflation is expected to have picked up to a five-month high in August, largely driven by higher food costs, a Reuters poll showed, easing pressure on the Reserve Bank of India (RBI) to cut interest rates again after poor growth data.

Consumer prices were forecast up at 3.20 per cent in August from a year ago, jumping from July's 2.36 per cent, according to the poll taken September 5-8 of nearly 40 economists.

Forecasts for the data, scheduled to be released on September 12 at 1200 GMT, ranged from 2.50 per cent to 3.55 per cent.(economy news)

If the consensus is met, it would be the highest since April, but below the RBI's medium-term target of 4.0 per cent for the tenth consecutive month.

Tushar Arora, economist at HDFC Bank, said food prices continue to rise in August, mainly driven up by "unfavorable weather conditions and supply chain constraints."

Food and beverage inflation, which accounts for nearly 50 per cent of the consumer price index basket was expected to have rebounded in August after prices fell in the three previous months .

Monsoon rains this year have caused damages to crops of some perishable food items and hindered movement of goods.

The resulting hit from a shortage of production and supply of vegetables such as tomatoes and onions - which are basic ingredients in Indian kitchens - suggests inflation will be elevated in coming months....READ MORE

Free withdrawal days are over: ICICI, Axis, HDFC Bank restore cash charges

The new charges would apply to savings as well as salary accounts effective from today

Some banks, including HDFC BANK have begun charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.

The new charges would apply to savings as well as salary accounts effective from today, leading private sector pla  yer HDFC Bank said in a circular.

The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn effective today, the circular added.

In the case of several banks, including ICICI Bank and Axis Bank, these charges came into effect early in January and are same as they were before the demonetisation move announced on November 8, while there is an increase in such fees in case of some others, including HDFC Bank, today onwards.

These charges are for cash transactions in the branches, and not through ATMs.

The move was seen in some quarters as aimed at discouraging cash transactions and furthering the digital payment drive.

For the basic no-frills accounts, maximum four cash withdrawals would continue to remain free and there would be no fees for cash deposits.

According to details on ICICI Bank website, there will be no charge for first four transactions a month at branches in home city while Rs 5 per thousand rupees would be charged thereafter subject to a minimum of Rs 150 in the same month.

The third party limit would be Rs 50,000 per day.

For non-home branches, ICICI Bank would not charge anything for first cash withdrawal of a calendar month and Rs 5 per thousand rupees thereafter subject to a minimum of Rs 150.

For anywhere cash deposit, ICICI Bank would charge Rs 5 per thousand rupees (subject to a minimum of 150) at branches, while deposit at Cash Acceptance Machine would be free of charge for first cash deposit of a calendar month and Rs 5 per thousand thereafter

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Pay Rs 150 after 4 cash transactions in a month at HDFC Bank, ICICI, Axis

The bank would also cap the third party cash transactions at Rs 25,000 per day

 

Banks including HDFC Bank, ICICI Bank and Axis Bank today began charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.

The charges would apply to savings as well as salary accounts effective from today, leading private sector player HDFC Bank said in a circular.

The bank would also cap the third party cash transactions at Rs 25,000 per day, while cash handling charges would be withdrawn effective today, the circular added.

The move was seen in some quarters as aimed at discouraging cash transactions and furthering the digital payment drive.

For the basic no-frills accounts, maximum four cash withdrawals would continue to remain free and there would be no fees for cash deposits.

The third party limit would be Rs 50,000 per day.

For non-home branches, ICICI Bank would not charge anything for first cash withdrawal of a calendar month and Rs 5 per thousand rupees thereafter subject to a minimum of Rs 150.

For anywhere cash deposit, ICICI Bank would charge Rs 5 per thousand rupees (subject to a minimum of 150) at branches, while deposit at Cash Acceptance Machine would be free of charge for first cash deposit of a calendar month and Rs 5 per thousand thereafter.

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