🍒 RBI allows banks to issue pre-paid payment instruments for commuters to pay for public transport : The Reserve Bank of India (RBI) on Friday amended the Master Direction on Prepaid Payment Instruments (PPI), where it has allowed authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems. The apex bank noted that, across India, public transport systems cater to a multitude of commuters on a daily basis. “To provide convenience, speed, affordability, and safety of digital modes of payment to commuters for transit services, it has been decided to permit authorised bank and non-bank PPI issuers to issue PPIs for making payments across various public transport systems,” the RBI said in a notification. – economic times.
🍒 RBI takes more actions on Paytm Payments Bank; Check details if you have @Paytm UPI handle : Given the Paytm Payments Bank will not be able to accept further credits into customer accounts and wallets after March 15, 2024, the Reserve Bank of India on Friday took more steps to ensure seamless digital payments by UPI customers using @paytm handle. RBI has asked NPCI to examine the request to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app. These measures will be applicable only to customers and merchants that currently have an @paytm UPI handle. If you have an UPI address that is other than @paytm, no action needs to be taken. – economic times.
🍒 RBI is pushing UPI-like credit platform for farmers, MSMEs : The Reserve Bank of India is pushing for the wider adoption of an open-source credit disbursal platform similar to the Unified Payments Interface for digital payments, to make it easier for farmers and owners of small businesses to access credit. While disbursal of consumer loans through a digital interface has become common, farmers and people who run small businesses still need to queue up at their local bank branches and the land records department for days to access agriculture loans and take Kisan credit cards. – economic times.
🍒 RBI announces more steps on Paytm, asks NPCI to examine request to become Third-Party ApplicationThe Reserve Bank of India (RBI) on February 23 said it has advised National Payments Corporation of India (NPCI) to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app. The central bank further advised that in the event of NPCI granting TPAP status to OCL, it may be stipulated that ‘@paytm’ handles are to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption. “No new users are to be added by the said TPAP until all the existing users are migrated satisfactorily to a new handle,” RBI said. – moneycontrol.
🍒 After Axis Bank, HDFC and Yes Bank submit TPAP application for Paytm UPI business : One97 Communications, which runs the Paytm brand, and private sector lenders HDFC Bank and Yes Bank have jointly applied to be a third-party application provider (TPAP) with the National Payments Corporation of India (NPCI) on February 22 for running the mobile payments platform Unified Payments Interface (UPI). Early this week, Moneycontrol reported that Axis Bank and Paytm had submitted a joint application with NPCI to be a TPAP. All three banks have been in discussions with NPCI, the entity overseeing and regulating UPI, over the past few days. NPCI is expected to expedite the process to ensure that customers do not encounter any difficulties using the Paytm app for UPI payments. – moneycontrol.
🍒 IDBI Bank looks to sell Rs 280-crore MSME loans : IDBI Bank has come out with a portfolio of micro, small and medium enterprises (MSME) loans for sale. It has put Rs 280-crore of MSME loans up for sale and received interest from seven asset reconstruction companies, including JC Flowers ARC, ARCIL, Omkara and ACRE. Other banks like Indian Overseas Bank (IOB) and RBL Bank have sold their MSME loans in the last quarter. MSME loans given during the Covid-19 had turned into non-performing assets (NPAs) and are now up for sale. – economic times.
🍒 India’s forex reserves dip by $1.13 bn to $616.1 bn as of Feb 16 : India’s foreign exchange reserves dipped by of $1.13 billion to $616.1 billion for the week ending on February 16, latest data by Reserve Bank of India (RBI) showed on Friday. According to the Weekly Statistical Supplement released by the RBI, Foreign currency assets (FCAs) dropped by $740 million to $545.78 billion. Expressed in dollar terms, the FCAs include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Gold reserves fell by $362 million to $47.38 billion, whereas SDRs decreased by $28 million to $18.11 billion. – economic times
🍒 Unsecured retail loans building up stress in financial system : Indian banks in general may have reported strong earnings growth and a drop in gross bad loans, but the numbers hide the building stress in the unsecured credit portfolio of banks such as IndusInd Bank, Bandhan Bank and Yes Bank, among others. The rise in bad loans that will come as a consequence of the rise in unsecured loans will be seen in the coming quarters. Lenders such as IndusInd Bank, Bandhan Bank and Yes Bank have reported a higher-than-expected rise in bad loans due to stress from the rising unsecured retail segment. – economic times.
🍒 Zurich Insurance to buy 70% Kotak General stake via single deal of ₹5,560 crore : Zurich Insurance will acquire 70 per cent stake in Kotak Mahindra General Insurance for ₹5,560 crore, by way of a single deal including primary and secondary trades. “The parties to the aforesaid transaction, viz., the Bank, Zurich and Kotak General have mutually agreed that Zurich will acquire 70% stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche,” Kotak Mahindra Bank notified the exchanges. – Business Line.
🍒 Companies should also disclose technical defaults, says Krishnamurthy V Subramanian, Executive Director-India, IMF : Companies should not only disclose payment defaults to the bourses but also technical defaults such as those relating to breach of non-financial conditions in loan agreements so that investors and lenders are protected, said Krishnamurthy V Subramanian, Executive Director-India, IMF. Global practise on disclosure of default by companies actually goes beyond missing payment obligations to also cover technical default, Krishnamurthy said in his address at ASSOCHAM’s national summit on stressed assets. He emphasised that such disclosure needs to be made fully to the bourses and the regulator, irrespective of whether a company has raised resources from investors via equity or debt. – Business Line.
🍒 Secondary Loan Market Association’s trading platform logs loan transactions aggregating about ₹6,000 crore : The Secondary Loan Market Association’s loan trading platform has seen inter-bank bilateral transactions of loan accounts aggregating about ₹6,000 crore since inception in August 2021. Sunil Mehta, Chief Executive, Indian Banks’ Association, observed that inter-bank bilateral transactions of loans helps banks that have hit sectoral exposure limits create headroom through sale of loans. Once headroom is created, banks can take fresh exposure in sectors where they had earlier reached exposure limits. It helps banks in rebalancing their sectoral exposure. – Business Line.
🍒 Goldman Sachs downgrades SBI, ICICI Bank, YES Bank; cites multiple challenges to earnings : Global research firm Goldman Sachs on Friday downgraded its rating on State Bank of India, ICICI Bank and YES Bank citing the end of the “Goldilocks period” for financial sector entities. It downgraded SBI and ICICI Bank from ‘buy’ to ‘neutral’ basis a 4 per cent downside and 3 per cent upside, respectively. Further, it downgraded YES Bank from ‘neutral’ to ‘sell’ attributing the call to a 37 per cent downside on the stock, but reiterated the ‘buy’ rating on HDFC Bank. “We believe the proverbial Goldilocks period (strong growth and strong/visible profitability) is over for the financial sector in the near-term as headwinds are increasing,” it said in a report. – Business Line.
🍒 Pension funds ride high on equity bull run, 1-year returns surge to 28.66% : Roaring bull markets in equities have helped Pension Funds continue registering a sizzling performance with an average annual return of nearly 30 per cent from their equity investments, the latest PFRDA data showed. This average annual return of 28.66 per cent in equities — as of February 16, 2024 —is more than triple the return of about 8.17 per cent seen in Corporate Bonds. It is also much higher than the 9.91 per cent in the government securities and about 11.60 per cent in Central and 11.56 per cent in State government schemes, data showed. – Business Line.
🍒 Central Economic Intelligence Bureau launches “automated search portal” for public sector banks : The Central Economic Intelligence Bureau (CEIB) has launched an “Automated Search Portal” to help public sector banks (PSBs) with antecedent verification of prospective borrowers and non-performing assets (NPAs). The portal, which has been developed by the Bureau in collaboration with the State Bank of India (SBI), will help PSBs obtain mandatory intelligence clearance from CEIB in a prompt manner, which in turn will facilitate timely disbursement of funds, per Indian Banks’ Association’s statement. “This is a welcome move by C.E.I.B which is aimed at equipping banks with quick access to information for taking timely decisions,” the Association said. – Business Line.
🍒 IT and select banking stocks drag Sensex and Nifty down : Sensex, Nifty updates on 23 February 2024: During Friday’s trading session, India’s benchmark stock indices, Sensex and Nifty, went through a volatile phase and ended lower due to selling pressure in IT and select banking stocks. The BSE Sensex closed at 73,142.80, slipping 15.44 points, with 17 components in the red and 13 in the green. Although it opened higher, profit-taking activities led to losses later in the day, with the index fluctuating between 73,413.93 and 73,022. The broader Nifty of NSE also closed lower at 22,212.70, down 4.75 points. While FMCG, pharma, and financial shares gained, losses in IT and private bank shares offset these gains. On the global front, markets were mostly higher, following impressive quarterly results by Nvidia that led to strong gains in US markets. – Business Line.
🍒 Rupee turns flat against US dollar in early trade : The rupee traded on a flat note at 82.85 against the US dollar in early trade on Friday amid outflow of foreign funds and volatile crude oil prices in the overseas market. Positive equity market sentiment and a weak American currency, however, provided support to the domestic unit, forex traders said. At the interbank foreign exchange, the domestic currency opened at 82.87 and inched up further to trade at Thursday’s closing level of 82.85 against the greenback. – Business Line..
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