BANKING NEWS UPDATE

Banks’ recovery up fivefold to Rs. 1.15 crore: Banks recovered a total of Rs 1.15 lakh crore in FY15, an increase of nearly 5 times from the amount recovered in the previous fiscal, RBI data revealed. The primary reason for such a rise was a six-times jump in the number of cases filed and the total amount claimed rose almost five times to Rs 4.70 lakh crore. (FE)  New lending norms: banks will need to tackle loan-deposit mismatches more diligently: With RBI issuing guidelines for banks to calculate the base rate based on the marginal cost of funds, commercial banks will have to work harder on their ALM. According to the new guidelines, all loans sanctioned after April 1, 2016, will be priced with reference to the marginal cost of funds-based lending rate (MCLR). (BL)  Credit growth continues to remain muted: Despite RBI’s expectations that bank credit will improve by September-October, credit in the banking system has continued to remain lacklusture the entire year. According to the December 11 RBI data, bank credit grew 11 per cent against the year-ago period. (BS)  Financial inclusion Government’s key focus Rs. 50000 crore given under MUDRA: Underlining that financial inclusion is the government's core focus, Prime Minister Narendra Modi today said banks have given loans worth Rs 50,000 crore to small entrepreneurs under the MUDRA Yojana. (FE)  Corporate bond issuances till November rise 40.62%: Corporate bond issuances in the first eight months of this fiscal year have risen by 40.62% compared to the same period last fiscal, data from the Securities and Exchange Board of India showed. (FE)  Global sovereign, pension funds to invest in NIIF: Finance Minister said on Tuesday that several sovereign funds and pension funds from Russia, Singapore, UK and UAE were willing to participate in the Rs 40,000-crore National Investment and Infrastructure Fund (NIIF). (BS)  CARE Ratings signs MoU with Japan Credit Agency: CARE Ratings informed the exchanges that it had signed a MoU with Japan Credit Rating Agency Ltd. (JCR). This MoU is to collaborate with each other as strategic business partners. (BS)  Paytm learning payments bank biz from Alibaba: It is at Alibaba's boot camp in China that the top brass of Indian digital wallet-turned-e-commerce firm Paytm is learning the finer points of how to set up and run a successful payments bank. Ant Financial Services, an affiliate of Alibaba Group, runs MYbank, an online bank in China. (BS)  HDFC Bank cuts base rate by 5 bps: HDFC Bank Ltd on Tuesday reduced its base rate, or minimum lending rate, by five basis points (bps) to 9.3 per cent, making it on a par with that of State Bank of India. (BS)  IDBI Bank gets Rs. 2229 crore capital infusion from centre: Public sector lender IDBI Bank on Tuesday said the government has infusedRs. 2,229 crore into the bank in lieu of preferential allotment of shares. It said the said amount has been received on the account of IDBI Bank today. (BL)  Barclays in $ 13.75 settlement in US: Barclays Plc is going to be paying more than $ 13.75 million for settling regulatory charges in US because it allowed its retail brokerage customers make some unsuitable transactions related to mutual funds including 6100+ fund switches over a period of 5 years. (BL)  Foreign reinsurers worried over Irdai proposal: Foreign reinsurers have written to the government seeking relaxation on the proposal to give Indian reinsurers first preference in premium ceding. They have also submitted their views to IRDAI and this is likely to be discussed at its next board meeting. (BS)  Insurers negotiate with hospitals to bring down rates: Even as healthcare costs keep rising year after year, health insurers have managed to bring down medical inflation rates by half on policies settled via the cashless route. It has achieved this through negotiating predefined rates with hospitals on major surgical procedures. (BL)

banking news updates

RBI to soon come up with vision document on payment systems: RBI will soon be releasing a new vision document for the development of payment systems in the country, which will spell out the broader direction of regulation, its Deputy Governor said. (BS) § Public sector banks losing market share: Brickwork: Private sector banks are gradually gaining market share at the expense of PSBs, according to Bengaluru-based credit rating agency Brickwork Ratings. The agency, in its first Bank Book, estimated that PSBs have lost market share by about two per cent and the same has been gained by private sector banks in FY15. (BL) § A robust insolvency resolution system can speed up loan recovery for banks: Banks can now hope to recover more from their bad loans, if the Bill to consolidate and amend all laws relating to insolvency resolution is passed in the Lok Sabha. Currently, banks take as long as 15 years in certain cases to recover their money, which substantially erodes the value of the assets. (BL) § RBI Governor heeded advisory panel members on rate pause: RBI Governor heeded the consensus of the technical advisory committee on monetary policy to keep policy rates unchanged in the central bank’s fifth bi-monthly monetary policy on December 1, edited minutes of the consultation with external members, which happened through emails, showed. (BS) § December policy: RBI Governor went with majority view for status quo: By keeping the policy repo rate unchanged at 6.75 per cent in the fifth bi-monthly monetary policy statement, Reserve Bank of India Governor Raghuram Rajan heeded the advice of a central bank panel that the rising inflation itself should warrant no change in financial accommodation. (BL) § RBI: No deadline for resolving complaints by banking ombudsman: There is no time limit for resolution of complaints under Banking Ombudsman scheme, aimed at seeking redressal of customers' common complaints against banks, RBI has said. (FE) § CEA for wider tax base, better quality spending in FY17: Nominal GDP growth in the next fiscal “might not be significantly greater” than the sharply reduced estimate of 8.2% for the current year, the government’s chief economic adviser, Arvind Subramanian, told. (FE) § India's Q2 current account deficit narrows to $8.2 bn: India’s CAD narrowed to $8.2 billion (1.6% of GDP) in the September 2015 quarter from $10.9 billion (2.2% of GDP) in the year-ago quarter. However, CAD was up on a sequential basis from $6.2 billion (1.2% of GDP) in the June 2015 quarter. (BS) § ‘Falling exports no cause for panic’: The Centre has said that the continuous fall in exports in the first eight months of the current fiscal is no cause for panic as the decline is largely in the area of petroleum products and has not increased the country’s CAD or impacted the value of the rupee. (BL) § EPFO plans marginal hike in interest rates this fiscal: The Employees’ Provident Fund Organisation is considering a marginal hike in the interest rate on provident fund deposits to about 8.9 per cent this fiscal from the return of 8.75 per cent in 2014-15. (BL) § IDBI Bank may be first on the block when strategic sale process is ready: The government’s disinvestment programme appears to have come undone due to lacklustre market conditions and the reluctance of the bureaucracy to push strategic sale of public sector units for fear of enquiry. (BL) § Life insurers may face restriction on opening new offices if expenses of management exceeded: IRDAI said there could be restrictions on performance incentive to MD, CEO, whole-time directors and key management persons if a life insurance company does not comply with the expenses of management guidelines. (BS)