02.02.2024 : Today’s Banking / Financial News at a Glance
🍒 PNB expects FY25 recoveries to be double of slippages : Punjab National Bank (PNB) is expecting recoveries from bad loans to double the slippages amount in the next financial year. The higher recovery target comes amid encouraging recoveries made by the lender in the current fiscal. The bank managed to recover Rs 15,881 crore from bad loans for the first nine months of FY24, which is over three times of slippages. Total slippages were at Rs 4,551 crore during the period. “For the next financial year, we will set a target that whatever will be the slippages, recovery should be double that amount because we are having so much of stock – Rs 60,000 crore is gross NPA,” said Atul Kumar Goel, MD and CEO, in an earnings call. – financial express.
🍒 Govt to receive Rs 1.02 lakh cr as dividend from RBI, PSBs in FY25 : The government on Thursday projected a dividend income of Rs 1.02 lakh crore from the RBI and public sector financial institutions in the next financial year. The government is set to earn a higher dividend of Rs 1.04 lakh crore in the current fiscal against the Budget Estimate of Rs 48,000 crore. The current financial year estimate exceeded the Budget Estimate as RBI paid a dividend of Rs 87,416 crore in May last year. In the previous financial year, the government mobilised Rs 39,961 crore from RBI and public sector financial institutions. – economic times
🍒 Bandhan Bank appoints Santosh Nair as its consumer lending and mortgages head : Bandhan Bank has appointed Santosh Nair, chief executive of HDFC Sales Private Limited, as the head of its consumer lending and mortgages. Nair, a veteran with over three decades of experience in banks and financial services companies, will drive Bandhan Bank’s housing finance portfolio and also the retail lending franchise and distribution. He will partly fill the remits handled by retail banking head Shantanu Sengupta, who has decided to pursue opportunities outside the bank within one-and-a-half year of his joining it. The liability side of retail banking will be spearheaded by branch banking head after Sengupta’s exit, managing director Chandra Shekhar Ghosh said. – economic times
🍒 RBI imposes monetary penalty on 4 co-operative banks for violating rules : The Reserve Bank of India (RBI) on February 1 said it imposed monetary penalties on four cooperative banks for violating rules. Shirpur Peoples Co-operative Bank, Janata Sahakari Bank, Nagrik Sahakari Bank Maryadit and Nashik Zilha Sarkari & Parishad Karmachari Sahakari Bank Niyamit were penalised for deficiencies in regulatory compliance. “The penalty has been imposed for non-compliance with directions issued on exposure norms and statutory other restrictions…,” the central bank said while talking about Rs 2 lakh penalty on Shirpur Peoples Co-operative Bank Janata Sahakari Bank was fine Rs 1 lakh “for non-compliance with directions issued by RBI on Exposure Norms”, it said Nagrik Sahakari Bank Maryadit was penalised a similar amount for non-compliance with the know your customer (KYC) norms. Janata Sahakari Bank Limited was fined Rs 50,000.- moneycontrol.
🍒 RBI says 97.50% Rs 2,000 notes back in the system : The Reserve Bank of India (RBI) on February 1 said that 97.50 percent of the Rs 2,000 currency notes in circulation as of May 19, 2023, have returned to the banking system. The total value of such banknotes in circulation declined to Rs 8,897 crore at the close of business on January 31, 2024, from Rs 3.56 lakh crore at the close of business on May 19, 2023, when the government announced to withdraw the Rs 2,000 bills, the RBI said in a statement. The central bank announced the withdrawal of the high-value denomination banknotes from circulation as part of its clean note policy. – moneycontrol.
🍒 Govt to withdraw 1.1 crore small tax demands totalling Rs 3,500 crore: Revenue Secretary : The government will withdraw as many as 1.11 crore disputed tax demands totalling Rs 3,500 crore for the five-year period till 2014-15 under a Budget proposal that aims to end hardships for small taxpayers, an official said on Thursday. Revenue Secretary Sanjay Malhotra said these pending demands are in respect of income, wealth and gift taxes, some even dating back to 1962. In all, 2.68 crore tax demands aggregating Rs 35 lakh crore are being disputed at various foras. He said out of the 2.68 crore demands, there are 2.1 crore demands which are valued at less than Rs 25,000. Out of the 2.1 crore demands, about 58 lakh pertain to FY2009-10 and another 53 lakh entries from 2010-11 and 2014-15. – economic times.
🍒 Budget 2024: Healthcare cover under Ayushman Bharat to be extended to ASHA, anganwadi workers : Healthcare cover under the Ayushman Bharat insurance scheme will be extended to all Accredited Social Health Activist (ASHA) and anganwadi workers and helpers, Finance Minister Nirmala Sitharaman said while presenting the interim Budget for 2024-2025 on Thursday. Sitharaman also said the government plans to set up more medical colleges by utilising existing hospital infrastructure and will form a committee to examine the matter. – economic times
🍒 EOW again files closure report in Rs 25,000-crore Maharashtra cooperative bank ‘scam’ : The Mumbai police’s Economic Offence Wing (EOW) has filed a closure report — its second one since 2020 — in a court here in the alleged Rs 25,000-crore scam at the Maharashtra State Cooperative Bank (MSCB) involving Deputy Chief Minister Ajit Pawar and others, a government lawyer said on Wednesday. The EOW, while filing the closure report, said nothing incriminating was found during its second probe. It has been almost one-and-a-half years since the probe agency informed the court it was re-investigating the case. The EOW had filed its first first closure report in September 2020, which was accepted by the court. However, in October 2022, the probe agency had informed the special court dealing with cases against MPs/MLAs that it was conducting further investigation into the matter based on points raised by the protest petitioners (complainants) and the Enforcement Directorate (ED). – economic times
🍒 Budget 2024: 43 crore loans worth Rs 22.5 lakh crore extended under PM Mudra Yojana, says FM Sitharaman : Interim Budget 2024: Finance Minister Nirmala Sitharaman on Thursday announced that 43 crore loans amounting to Rs 22.5 lakh crore were extended under the PM Mudra Yojana. FM Sitharaman in her pre-election Budget, which is technically a vote on account and is popularly termed an interim Budget, said direct benefit transfer of Rs 34 lakh crore through Jan Dhan accounts have resulted in savings of Rs 2.7 lakh crore. The finance minister also said 30 crore Mudra Yojana loans have been given to women in the last 10 years. “Saturation approach of covering all eligible people is true and comprehensive achievement of social justice and this is secularism in action,” she said. – economic times
🍒 Banks’ credit growth slows to 20 per cent in December : Banks’ non-food credit grew 20.1% year-on-year (y-o-y) to Rs 159.18 trillion as of December 29, lower than 21% in November, RBI’s sectoral deployment of credit data showed. Excluding the merger impact of HDFC twins, credit offtake was up 16%. Bank credit to agriculture and allied activities was up nearly 20% y-o-y to Rs 19.94 trillion in December, higher than 12% a year ago, while credit to industry segment rose 9% y-o-y to Rs 36.64 trillion. Within the industry segment, credit to large corporates rose 7% y-o-y to Rs 26.70 trillion. – financial express
🍒 SBI, PNB, other PSU Bank stocks gain in dull market after Budget announcement. : Public sector banks saw an upward trajectory in trading subsequent to the budget’s disclosure of a borrowing programme that was lower than initially projected, coupled with a concurrent decrease in bond yields. The Nifty PSU Bank index surged by more than 3 percent, reflecting a positive trend in the PSU segment. Notable gains were observed among PSU stocks, with Indian Overseas Bank (IOB) registering a significant increase of 5 percent. UCO Bank saw a rise of 4.3 percent, Union Bank of India advanced by 4.2 percent, Canara Bank experienced a 4 percent uptick, Bank of Baroda recorded a 3.7 percent increase, Punjab National Bank gained 3 percent and State Bank of India (SBI) saw a rise of 1.4 percent. According to analysts PSU banks hold a greater proportion of government bonds compared to private sector banks, leading to increased Mark-to-Market (MTM) gains as yields decline and bond prices rise.- moneycontrol.
🍒 Day after RBI order, Paytm says it will ‘accelerate’ work with other banks : A day after the Reserve Bank of India (RBI) barred Paytm Payments Bank from accepting fresh deposits from February 29, the company’s parent, One 97 Communications Limited (OCL), said that it is already working with other banks and will accelerate its plans and completely move to third-party partners. In a regulatory filing, the company said, “OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products.” “We now will accelerate the plans and completely move to other bank partners. Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited. The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnerships with other banks,” it added. The company added that it expects this action to have an impact of Rs 300 to 500 crore on its annual EBITDA.- Business Standard
🍒 paytm to pause lending for few weeks, pegs annual EBITDA hit at ₹300-500 crore : One 97 Communications will pause on new loans for a few weeks till the resolution of operational issues, and till partner banks are confident of continuing their association with the company given the material governance concerns. Meanwhile, the impact of RBI’s directives on associate company Paytm Payments Bank (PPBL) is expected to be around ₹300-500 crore on the annual EBITDA “in a worst case scenario”. “There is an impression that Paytm Payments Bank and paytm are one but by structure, but it is not. It is an associate company. For Paytm Payments Bank, there is independent compliance, risk team and other requirement,” President and Group CFO Madhur Deora said in an analyst call, adding that financial services such as loan distribution, insurance distribution and equity broking are not related to PPBL. – Business Line.
🍒 Indian Indices turn choppy post Budget presentation; media, metal stocks drag; banking, auto stocks shine : Sensex, Nifty updates on 1 February 2024: The Indian stock market experienced heightened volatility following the presentation of the interim Budget. The BSE Sensex fell 106.81 pts or 0.15% to close at 71,645.30 and the NSE Nifty fell 28.25 pts or 0.13% to settle at 21,697.45. Finance Minister Nirmala Sitharaman emphasized the positive transformation of the Indian economy in the last decade. Proactive inflation management contributed to keeping inflation within a manageable range. GST collections for January surged 10.4% to over Rs 1.72 lakh crore, indicating buoyant economic activity. Global markets displayed mixed trends, with US markets ending lower on Wednesday. – Business Line.
🍒 Rupee rises 8 paise to settle at 82.96 after FM Nirmala Sitharaman’s presentation : The rupee appreciated by 8 paise to close at 82.96 against the US dollar on Thursday after the government hinted at faster fiscal consolidation and lower borrowings in its interim Budget for 2024-25. However, a strong greenback against major rivals overseas and subdued domestic equity markets restricted the sharp gain in the domestic unit, forex traders said. Finance Minister Nirmala Sitharaman on Thursday hiked capital expenditure by 11 per cent for the next fiscal to sustain a world-beating economic growth rate while trimming the deficit in a reform-oriented interim budget. At the interbank foreign exchange, the rupee opened at 83.02 against the dollar. During the session, the local unit touched a high of 82.93 and a low of 83.03. – Business Line..
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