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FS Daily Bytes: 27th June

India

  1. Questions are being raised on whether BBB (Banks Board Bureau) could bring in the change in governance & transparency that it was supposed to deliver. The lack of role clarity of BBB, senior bureaucrats fears off losing power that they enjoyed till date, part time role of members, BBB cognizance of the changing times & many such issues are leading to a point of no return where most likely one will see BBB being dismantled and going back to old system
  2. Banks, SBI & other private sector banks, are warming up to hackathons where young people work on new technology ideas which not only provides good brainstorming but also provides banks a good platform to seed innovation. SBIs ‘Code for Bank’ is one such which just concluded.
  3. FinMomenta, Singapore based fintech start-up offering peer to peer lending service in India under brand name ‘TachyLoans’ is planning to raise $2-5 million to fund its expansion. Primarily it provides a platform for a 2-way bidding process allowing lenders & borrowers to negotiate the amount, rate & tenure. It is interesting to note that this is yet to be regulated and RBI had released a consulting paper earlier. Wedding, education, short tenure loans are some of the areas TachyLoan focuses
  4. SBI Chief has ruled out any significant impact of the increased provisioning for the 12 large loans that have been referred to the NCLT.
  5. Banks have appointed insolvency professionals for seven large accounts out of 12 referred to NCLT
  6. BofA-ML expects credit off take to grow by 15% with demonetization impact subsiding
  7. Adoption of new accounting standards (IndAS) may impact the quantum of loans doled out by banks to companies. The new standard will result a change in the debt-equity ratios due to reclassification of the capital structures and financial instruments. Sectors such as power, infra, real estate may be worse affected

 

International

  1. Visa is buying a stake in the major Swedish fintech player Klarna as both companies look to expand outside their core market. Klarna has recently got full service banking license as well
  2. Co-op Bank board meets to finalise £700m rescue package. Read 26th Daily Bytes to have more updates on this or can refer to FT for more details
  3. CNBC quoted Fed Governor Yellen saying the banking system is “very much stronger” due to Fed supervision and higher capital levels and do not expect another financial crisis in lifetime
  4. Wary of rapid growth in consumer credit, the UK banking regulator (Bank of England) has asked banks to control it or else face higher capital requirements. It also reinstated the countercyclical buffer
  5. Consolidation in banking sector has gained pace in Spain with state controlled Bankia agreeing to take over another state controlled lender BMN. This is just on the back of the buying out of Banco Popular by Banco Santander

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