News from banking

•

Basel panel may push banks to hike capital ahead of interest rate changes: Banks are set to face tougher international rules on the capital, they must have on hand to cope with a change in interest rates, amid regulators concerns that current standards may be to flimsy to fully capture the risks. (BL)

•

Banks get freedom to take 51% stake in defaulting firms: In a significant move to provide a more flexible process for lenders to recover bad loans, RBI allowed banks to acquire 51% or more stake in companies defaulting after restructuring of their loans. The move, amid a rise in slippages from restructured assets, is aimed at resolving stress in the banking system. (BS)

•

Banks should share blame for Ponzi schemes: RBI Deputy Governor Mr. S S Mundra stressed on the need for a stronger regulatory framework to deal with the menace of Ponzi schemes across the country. He agreed the system also needs to shoulder the blame for such fraudulent investment schemes. (BS)

•

ICRA sees NPAs soaring by up to 150 bps to 5.9% in FY16: Domestic rating agency ICRA said gross NPAs in the system might jump to 5.9% this financial year from 4.4% in FY15, despite economic growth because of lagged recognition of bad assets, which has resulted in slippage of more restructured accounts into dud loans.

•

Another Rs. 9500 cr. recast under 5/25: Lenders to Udupi Power Corporation and Krishnapatnam Port have refinanced a combined Rs 9,500 crore using RBI 5/25 scheme, bankers familiar with the development told FE. In the case of Krishnapatnam Port, repayment terms for Rs 4,600 crore have been tweaked while for Udupi Power, these have been reworked for loans of Rs 4,900 crore. (FE)

•

Weak monsoon to be credit negative for India: Moody's: A weak monsoon is likely to be credit-negative for India as it is expected to push up food inflation as well as government deficits, global rating agency Moody’s said. IMD has revised its monsoon forecast for 2015 from ‘below normal’ to ‘deficit’. (BS)

•

Banks tightening lending norms for Gems, Jewellery companies: Banks are tightening financing norms for the gems andjewellery industry after being forced to write off loans of more than Rs 10,000 crore. Domestic lenders are tying up with global banks such as ABN Amro Bank and KBC Group NV to get information on their clients' businesses overseas. Banks that do not have partnerships with foreign players are hiring auditors to monitor client books for diversion of funds and stock positions. (ET)

•

Samll housing finance companies yet to lower lending rates: RBI is pushing lenders to make loans cheaper, a huge number of home loan applicants, who borrowed money from smaller housing finance companies, are yet to get the benefit of softer monetary policy. Smaller lenders are holding on to their rates because they said their cost of borrowing has not dipped much in the last six months, as RBI's 75 bps repo rate cut since January did not transmit into the system fully. (ET)

•

Tata Comm partners FINO PayTech to set up rural ATMs: White label operator Tata Communications Payment Solutions has partnered with FINO PayTech, a payment technology provider, to set up more ATM services in rural unbanked regions. (BL)

•

HDFC to raise Rs. 5k cr. via NCD, warrants: HDFC, the largest mortgage lender in the country, said its board of directors has approved fund-raising worth Rs 5,000 crore simultaneously by secured redeemable non-convertible debentures (NCDs) and warrants. The lender will seek its shareholders’ approval at AGM meeting scheduled for July 28. (BS)

•

Indian Bank cut base rate to 9.95%: Indian Bank has informed BSE that it have reduced the base rate from 10.25% to 9.95% and BPLR by 30 bps from 14.50% to 14.20% with effect from 08 June. (BS)

•

Federal Bank cuts base rate: Federal Bank on Monday cut the base rate, or the minimum lending rate, by 0.25 per cent to 9.95 per cent. The new rates will be effective from June 18, 2015, the bank said in a filing to the BSE.  (BL)

•

Irdai likely to ask banks to tie up with more than one insurer: Once banks start submitting their business proposals withbancassurance plans, IRDAI may insist on them tying up with more than one insurer. The regulator has done away with an earlier proposal on capping insurance business from one insurer by a bank. (BS)