Expect some PSBs to come out of PCA framework after half yearly closing

 Expect some PSBs to come out of PCA framework this fiscal, says DFS Secy : Asserting that the fundamentals of many public sector banks (PSBs) have improved in recent months, Rajiv Kumar, Secretary, Department of Financial Services (DFS), on Thursday said he expects some of them to come out of the RBI’s Prompt Corrective Action (PCA) framework this fiscal. As on date, as many as 11 out of 21 banks are under the central bank’s PCA framework. The PCA framework was issued by the RBI to encourage banks to eschew certain riskier activities, improve operational efficiency, and focus on conserving capital to strengthen the banks. Kumar was speaking to reporters after inaugurating Canara Bank’s digital banking branch Candi in the Capital. Earlier, during his address at the event, Kumar said that the worst is over for public sector banks, and their asset quality has “improved transparently” in recent months. - Business Line

☕ Govt wants higher dividend from RBI, asks central bank to review rules : Last week the Reserve Bank of India (RBI) agreed to pay a dividend of Rs 50,000 crore to the government for the previous fiscal, including the interim dividend paid out in March. The payout has shot up 63% year-on-year, but the finance ministry is not happy. The government believes that the payout ought to be higher so it has reportedly asked the apex bank to review its dividend and capital conservation rules. According to The Economic Times, the FinMin has also urged the RBI to look at some of its decisions with a broader economic perspective, especially liquidity management and issues related to banks. - Business Today

☕ Worst over for public sector banks, Q1 performance much better: Government : The worst was over for state-run banks, with improvements in recovery, operating profits and bad debt ratio compared with the previous quarter, the finance ministry said on Thursday. “Resurgent PSBs (public sector banks) — Nation’s growth engines, after cleaning put worst behind,” Department of Financial Services Secretary Rajiv Kumar wrote on micro-blogging site Twitter. State-run banks put together made a total recovery of Rs 36,551 crore in the first quarter of 2018-19, nearly half of the entire 2017-18. Further, on a quarter-on-quarter basis, operating profits of banks rose 11.5% and losses fell 73.5%, Kumar wrote. - Live Mint

☕ Bank credit grows 12.7% in the fortnight to August 3: RBI : Bank credit grew 12.70 per cent to Rs 86,79,741 crore in the fortnight to August 3, according to the latest RBI data. In the the year-ago fortnight, bank advances was at Rs 77,01,926 crore. The increase in advances in the reporting fortnight was higher than the growth registered in the previous fortnight ending July 20 when it had risen by 12.44 per cent to Rs 86,13,164 crore. During the reporting fortnight, bank deposits grew by 8.21 per cent to Rs 1,15,83,058 crore from Rs 1,07,04,112 crore in the period ending August 4, 2017, as per the data. In June, the non-food credit rose 11.1 per cent as against 4.8 per cent in the same month last year. Loans to agriculture and allied activities slowed to 6.5 per cent in June from 7.5 per cent a year ago. - Economic Times

☕ 88 per cent rural households have savings account: Nabard survey : The financial inclusion drive has resulted in proliferation of bank accounts in rural areas with 88.1 per cent of households having savings accounts, said a survey by Nabard. Incidence of Indebtedness (IOI), which is a proportion of households having outstanding debt on the date of the survey, was 52.5 per cent and 42.8 per cent for agricultural and non-agricultural households, respectively. All India IOI taking rural households together stood at 47.4 per cent, as per the Nabard All India Financial Inclusion Survey (NAFIS) released today. "While 88.1 per cent rural households and 55 per cent agricultural households reported having a bank account, average savings per annum per household was Rs 17,488," it said. - Economic Times

☕ Uday Kotak will have to cut stake in bank to 20% by year-end : Uday Kotak will have to dilute equity in Kotak Mahindra Bank to 20% by December 2018 with the Reserve Bank of India (RBI) refusing to recognise issue of preference shares for capital dilution. “The RBI has communicated to us that our perpetual non-cumulative preference shares (PNCPS) issuance does not meet the promoter holding dilution requirement of the regulator,” the private lender said in a regulatory filing on Tuesday. - Times of India

☕ Bharti AXA, Airtel Payments Bank team up to offer Pradhan Mantri Jeevan Jyoti Bima Yojana : Bharti AXA Life Insurance and Airtel Payments Bank have teamed up to offer the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a government-backed life insurance scheme aimed at increasing penetration of life insurance products among the underinsured masses and boosting financial inclusion. The product, ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’ (PMJJBY) provided by Bharti AXA Life Insurance offers Rs 2 lakh life insurance cover for an annual premium of Rs 330 and can be purchased by all existing or new Airtel Payments Bank savings bank account holders between ages 18-50. Initially, PMJJBY will be available at 1 lakh Airtel Payments Bank banking points across India. Airtel Payments Bank will scale up availability to over 5 lakh banking points to enable the product to reach the country's remotest corners. “Airtel Payments Bank’s distribution network allows financial inclusion to reach the 190 million underinsured Indians,”Anubrata Biswas, Managing Director, Airtel Payments Bank , said in a media statement Thursday. - Economic Times

🍒 Kotak Mahindra Bank to open over 100 branches in FY 19 : Kotak Mahindra Bank plans to open over 100 branches to take the network to 1,500 from the existing 1,391 by the end of the current fiscal, a senior official said here today. The bank's senior executive president, Puneet Kapoor said they are in the process of setting up a branch in Dubai International Financial Centre. "We have now 1,391 branches as of June 2018 and supported by 2,231 ATMs... by March 2019-end we should be closer to 1,500 branches. In the current network of branches we have 45 per cent in metros, 21 per cent in urban and 34 per cent in semi-urban and rural," he told PTI. - Economic Times

🍒 Sebi cuts listing time for public issue of debt securities : Markets regulator Sebi today drastically cut the timeline for listing of debt securities to six days from 12 days at present, in order to make the existing process of issuance of such securities simpler and cost effective. Besides, the Securities and Exchange Board of India (Sebi) has made ASBA (Application Supported by Blocked Amount) mandatory for all the investors for making payment while applying in a public issue of debt securities. The mandatory ASBA facility would reduce the time taken for collecting banks to commence clearing of payment instruments, forwarding application forms along with bank schedules to registrar and undertaking of technical rejection test. The new rule would be applicable for all public issues of debt securities from October 1, 2018, the Securities and Exchange Board of India (Sebi) said in a circular. - Economic Times

🍒 Nearly a third of ATMs in the country run on old operating systems : The fraud of over Rs 94 crore at Pune-based Cosmos Co-operative Bank, involving the breach of the firewall in servers that authorise ATM transactions, has brought the focus back on the banks’ tardiness in bolstering control measures at ATMs. Despite the RBI’s constant prodding on upgrading ATMs and strengthening security measures, about 30 per cent of the 2 lakh-odd ATMs in the country still operate on Windows XP and other unsupported operating systems. In its June 2018 circular, the RBI had highlighted the vulnerability arising from bank ATMs operating on an unsupported versions of operating systems and non-implementation of other security measures. It had also set specific timelines for tightening the control measures, failure of which would lead to stringent supervisory action. - Business Line

🍒 Canara Bank to roll out Candi in each of its 21 circles: Chairman : Canara Bank plans to open its newly conceptualised digital banking branch Candi in each of the 21 circles of the bank across the country, according to its Chairman TN Manoharan. This public sector lender, which opened its fourth Candi branch in the country in New Delhi on Thursday, would strive to achieve this national roll-out before the end of March this fiscal, Manoharan told BusinessLine. Canara Bank’s operations are spread across 21 circles in the country. “Canara Bank is future ready in terms of adoption and implementation of latest digital initiatives. The bank is fully committed to the agenda of the Government of India for pushing digital transactions,” he said. The most-attractive feature of Candi is a humanoid robot to answer the basic queries of customers on banking products and services. - Business Line

🍒 UPI 2.0 to be launched today : After a delay of several months, an upgraded version of the Unified Payments Interface (UPI), UPI 2.0 is being launched on Thursday. The launch is taking place in Mumbai with select members from National Payments Corp. of India (NPCI), banks and the Reserve Bank of India(RBI), said a person familiar with the development. RBI governor Urjit Patel, State Bank of India (SBI) chairman Rajnish Kumar and Nandan Nilekani, the non-executive chairman of Infosys, are expected to formally launch the product. NPCI is the umbrella organization for all retail payments in the country. It also manages the UPI platform that facilitates instant fund transfer between two bank accounts on a mobile platform without requiring details of the beneficiary’s bank account. - Live Mint

🍒 IDBI Bank may face capital shortfall in FY19 says CEO : State-run lender IDBI Bank, which is set to be taken over by the Life Insurance Corporation of India, may face a capital shortfall in the current financial year, its chief executive officer and managing director B. Sriram said in an address to the employees. “While we have met the capital requirements for 2017-18, we are confronted with the possibility of shortfall in capital requirements in 2018-19,” he said in a communication, which has been reviewed by The Hindu. - the Hindu

🍒 SC: Banks can invoke personal guarantees : Spelling trouble for industrialists whose personal guarantees helped corporate entities owned by them get huge loans only to later default, the Supreme Court has ruled that banks can act against guarantors even as proceedings under the Insolvency and Bankruptcy Code are on. A bench of Justices Rohinton F Nariman and Indu Malhotra allowed an appeal filed by the State Bank of India, which challenged concurrent findings of the National Company Law Tribunal and the National Company Law Appellate Tribunal withholding banks from moving against guarantors. - Times of India

🍒 Andhra Bank raises MCLR by 0.15% for various tenors : State-owned Andhra Bank has increased the marginal cost of funds based lending rate (MCLR) by 0.15 per cent to up to 8.70 per cent for various tenors. "The bank has increased its MCLR with effect from August 16, 2018," Andhra Bank said in a BSE filing. The MCLR for overnight, 1 month, 3 month, 6 month and one year tenors has been raised by 0.15 per cent each to 8.15 per cent, 8.20 per cent, 8.40 per cent, 8.55 per cent and 8.70 per cent, respectively, the bank said. The move will make consumer loans such as auto, car and home loans costlier for buyers. In June, too, Andhra Bank had increased the MCLR by 0.05 per cent to up to 8.55 per cent for various tenors. - Business Standard

🍒 Debit cards: Paytm rules the roost in the virtual world but lags in real life : Given how every depositor gets a digital debit card, Paytm Payments Bank has in less than a year of its launch notched up a large outstanding debit card user base. Reserve Bank of India (RBI) data show the mobile wallet-to-payments bank entity had 39.12 million outstanding debit cards at the end of May. For perspective, private-sector majors HDFC Bank and Axis Bank had 24.94 million and 23.15 million debit cards in circulation at the end of May. To be sure, most of these these are physical debit cards. While Paytm’s debit card base tops that of some large banks, their usage is far more limited. In May 2018, Paytm’s debit cards were used to make just 1.2 million transactions at point-of-sale (PoS) terminals; the ATM transaction count was even lower at 0.57 million. - Financial Express

🍒 Cosmos Bank cyber attack: Pune Police forms SIT to probe Rs 94-crore fraud : The Pune Police has formed a special investigation team (SIT) to probe the cyber fraud in Cosmos Bank, in which hackers allegedly siphoned off over Rs 94 crore through a malware attack on the bank’s server in two days, a top police official said. The police are getting the transaction details from the bank and the primary focus right now will be to probe the domestic transactions, in which Rs 2.5 crore were withdrawn from ATM machines. Cross-border investigation depends on the co-operation and help from the respective countries, Jyotipriya Singh, deputy commissioner of police (cyber and economic offences wing), Pune Police, told PTI. - Financial Express

🍒 LIC’s ‘cancer cover’ policies a big hit : Life Insurance Corporation of India’s Western Zone has sold 60,182 ‘cancer cover’ policies since the launch of the product nine months back. Vipin Anand, Zonal Manager, LIC, said the zone collected ₹29.16 crore as premium by selling the cancer cover policy. The average sum insured of the policies sold was ₹50 lakh. The Western Zone comprises three States – Maharashtra, Gujarat and Goa, and two Union Territories – Dadra and Nagar Haveli and Daman and Diu. - Business Line

🍒 Insurers to cover mental illness : In a step towards reducing myths and stigma associated with mental illness, the insurance regulator today asked insurers to cover mental illness under medical insurance policy, treating it at par with physical illness. In a circular, the Insurance Regulatory and Development Authority today asked insurers to make provision for medical insurance for treatment of mental illness from immediate effect. Insurers today exclude mental illness from medical policies. However, globally companies cover mental illness after initial waiting period of two-three years. - Economic Times

🍒 Rupee hits record low of 70.40 as trade deficit widens to over 5-year high of $18.02 billion : The rupee dropped to a record low of 70.40 with investor sentiment affected by a widening trade deficit on the domestic front and the broad rise in the US dollar versus other Asian peers.

🍒 Gold tumbles to Rs 30,340; silver drops by Rs 715 per kg : Gold prices tumbled Rs 290 to Rs 30,340 per 10 grams at the bullion market due to weak global cues amid fall in demand from local jewellers. Silver followed suit and dropped by Rs 715 to Rs 38,000 per kg due to poor offtake by industrial units and coin makers.