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FS Weekly Digest: 6th August

India

  1. On black money, Swiss authorities says that Indian laws adequate for auto sharing banking info
  2. As many as 12 public sector banks including PNB, Bank of India and Indian Bank have lined up plans for raising funds from markets to shore up their capital base to meet global risk norm, Basel III.
  3. PNB has now brought down the threshold for charges applicable for cash deposit at non-base branch bank in same city from 25K to 5K. Min charges at 25 / txn or 1 Re per 1000 whichever is maximum
  4. Government planning to revamp/ modernize the currency printing systems & processes primarily after the challenges in the current process efficiency came into fore post demonetization
  5. SEBI is in process of appointing advisor to beef up the cyber security policy framework/ system firewalls etc
  6. Indian Bank saw gross NPA rising from 6.97 to 7.21% in June quarter but expects gross NPA to be brought down to 5% from current 7% by Mar 2018
  7. Syndicate Bank posts Rs 263 cr Q1 loss; gross NPAs rise to 9.96%
  8. PNB has launched a onetime settlement scheme for loans up to 5 cr INR.
  9. Capital market regulator Securities and Exchange Board of India (Sebi) on Friday made it compulsory for listed companies to make a disclosure to stock exchanges if they default on interest or principal payment obligations to banks (BS)
  10. The services & the manufacturing sector contracted in July with GST being held as the main culprit in the Nikkei India PMI Index. The report though is more positive on appreciation by year end because of GST impact
  11. Mobikwik tied up with Bajaj consumer finance, where the later can leverage the Mobikwik app/ platform to offer its products while Mobikwik got 225 cr in investment
  12. Lendingkart Finance Ltd said on Thursday it has raised $10 million (₹67 crore) in debt from Kotak Mahindra Bank, Aditya Birla Financial Services and other financial institutions
  13. RBI reduced the rates by 25 bps hoping that transmission will happen to credit interest rates as well
  14. UCO Bank’s loss widened by 50 per cent to ₹663 crore in the April-June quarter of this fiscal. The net NPA, however, saw a marginal improvement of less than one per cent
  15. Airtel payment bank enters into an agreement with HPCL, which will allow the earlier to leverage the 14K fuel outlets of the later to be used as banking points for opening of account, cash deposit & withdrawal etc
  16. RBI is planning to conduct a cyber audit of all banks and not just a limited few. This probably signifies the increasing risk of cyber fraud in digital space.
  17. Mandatory rest period for auditors have been raised to 6 years for banks by RBI. This would now push banks to go beyond the fab 4
  18. Ministry of Electronics & Information Technology has formed a committee under former Justine BN Srikrishna to suggest a draft data protection bill. This is in line with an earlier survey which pointed out increasing risk of data theft & cyber frauds in today’s era of digital

International

  1. A FT report talks of fresh headwinds for UK’s Challenger banks. For uninitiated, ‘Challenger banks’ is a loosely coined term for a vibrant group of banking businesses not part of the recognized high street banks (e.g. HSBC, RBS etc). These may include supermarkert banks (Tesco etc) or digital banks or mid-market banks etc. There is a growing concern on lending rates on pressure with higher risk & lower margin and declining housing loans. There is also a view that with time, this segment will see some consolidation or merger.
  2. Wells Fargo in its filing to SEC has reported that its internal review points to significant increase in the identified number of potentially unauthorized accounts. Earlier it had paid penalties for 2 million unauthorized consumer deposit & credit card accounts
  3. ‘Safety and high returns’; the two seemingly opposite virtues of investments seem to be back again together through the new class of investments called ‘CLO’. CLO are Collateralized Loan Obligations where risky low grade loans are packaged into attractive investments which are then rated high by credit rating agencies.

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