☕ 12.12.2020: Today's Banking / Financial News at a Glance

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☕ 12.12.2020: Today's Banking / Financial News at a Glance

🍒 RBI eases norm for entities availing TLTRO funds to get guarantee : The Reserve Bank of India (RBI), on Friday, said the credit outstanding stipulation for availing credit guarantee under ECLGS (Emergency Credit Line Guarantee Scheme) 2.0 will not apply to funds availed under On Tap TLTRO (Targeted Long-Term Repo Operation). Currently, under ECLGS 2.0, only entities with credit outstanding between ₹50 crore and ₹500 crore are eligible for credit guarantee. The RBI’s latest move will increase liquidity availability and credit guarantee to those entities with credit outstanding below ₹50 crore and above ₹500 crore. Banks have been encouraged to synergise the two schemes – ECLGS 2.0 and On Tap TLTRO – by availing funds from the RBI under TLTRO and seek guarantee under ECLGS to provide credit support to stressed sectors (identified by the Kamath Committee). - Business Line

🍒 Banks sanction Rs 2.05 lakh cr to 81 lakh MSMEs under credit guarantee scheme : The Finance Ministry on Friday said banks have sanctioned loans worth Rs 2,05,563 crore to about 81 lakh accounts under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector that was impacted by disruptions caused due to the coronavirus pandemic. While, 40 lakh MSME accounts have received Rs 1,58,626 crore till December 4, the Finance Ministry said in a series of tweets. "Rs 3 lakh cr Collateral-Free Guaranteed Loans - Budgetary provision of Rs 4,000 crore made for the Scheme in First Supplementary Demand for Grants for FY 2020-21," a tweet said.Announcing Aatmanirbhar Bharat Package 3.0 last month, Finance Minister Nirmala Sitharaman had said that Rs 2.05 lakh crore sanctioned and Rs 1.52 lakh crore disbursed under ECLGS 1.0. "As part of the Aatmanirbhar Bharat Abhiyan 3.0 (announced on November 12), ECLGS Scheme has been extended through ECLGS 2.0 for the 26 stress sectors and health care sector with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 29, 2020," a tweet said. - economic times

🍒 Post-lockdown boost: Public-sector banks told to tap markets aggressively to help spur economic activities : The government has impressed upon public-sector banks (PSBs) to raise capital from the markets more aggressively, taking advantage of abundant liquidity, and ensure a sustained credit push to help spur economic activities, as lockdown curbs are all but lifted. At the same time, it is planning to finalise by late February or early March the distribution of the Rs 20,000-crore capital, approved in September, among various PSBs after assessing their financial performance in the third quarter as well as success in fund-raising, sources told FE. “The idea is to ensure that PSBs have adequate capital to not just meet regulatory requirement but also substantially boost lending. PSBs have lined up fund-raising plans, so that they don’t have to rely excessively on the government for more capital,” said a senior banker. - financial express

🍒 COVID crisis has brought an inflection point in banking system: Axis Bank chief : The pandemic due to COVID-19 has ushered in an inflection point in the entire banking system which is going to bring in radical changes in terms of lending parameters, MD and CEO of Axis Bank Amitabh Chaudhary said on Friday. Speaking at a session on financial system organised by XLRI, he said that the COVID crisis has created a huge disruption in the banking system in the country where individual banks are feeling its impact. He said that due to the pandemic, individuals ability to repay loans has reduced significantly while 90 per cent of the banks’ books is in moratorium. “The crisis has increased the health costs and the average individual household needs money while banks at the same time will have to be more cautious. A vicious negative cycle has set in while discretionary spending has hit an all time low”, Chaudhary said. - financial express

🍒 Finance Ministry gives progress report on Atmanirbhar package : The finance ministry on Friday provided details of the progress made under various schemes announced in the Atmanirbhar package. It noted that around 50% of the loans have been disbursed under the Rs 3-lakh crore collateral free guaranteed loan scheme for businesses, a part of the Atmanirbhar package announced in May 2020. “Loans worth Rs 2.05 lakh crore have been sanctioned to over 80 lakh accounts, of which Rs 1.58 lakh crore have been disbursed to over 40 lakh accounts,” it noted detailing the progress under the scheme. The scheme provides fully guaranteed and collateral-free loans for amounts up to 20% of outstanding loans to all business enterprises, individuals seeking credit for business purposes and MUDRA borrowers. - economic times

🍒 LIC allows online switching of Ulips : To help policyholders during the pandemic, the national life insurer LIC has allowed them to switch online funds under ulip policies through its portal. The facility will be available for those policyholders who are registered for its premier services, LIC said in a statement on Friday. This online switching of funds will be available for the new endowment plus (Plan 935), Nivesh plus (Plan 849) and the SIIP (Plan 852), it added. There is no fee for doing so. One switch is allowed per day per policy through an OTP-based authentication system, it added. The insurance behemoth has also launched a multilingual call centre by extending the support to Marathi, Tamil and Bengali. The corporation plans to add more regional languages in the near future. Call centre services were available only in English and Hindi since September 2018. BEN MR - economic times

🍒 I-T refunds worth Rs 1.45 lakh cr issued to 89 lakh taxpayers : The Finance Ministry on Friday said the Income Tax Department has issued refunds worth Rs 1.45 lakh crore to about 89 lakh taxpayers so far this fiscal. This includes personal income tax (PIT) refunds during this period. "CBDT issues refunds of over Rs 1,45,619 crore to more than 89.29 lakh taxpayers between 1st April, 2020, to 08th December, 2020," the Finance Ministry said in a tweet. - economic times

🍒 Lenders look to revive restructuring of JP Associates outside IBC : Lenders to Jaiprakash Associates Ltd are looking at a possible resolution outside the Insolvency and Bankruptcy Code. Sources close to the development confirmed that the consortium of lenders, led by ICICI Bank, are working on a proposal for restructuring under the RBI’s June 7 circular. The objective is to go in for timely restructuring so that lenders can get back some of their dues. Lenders are expected to submit the proposal to the RBI in the coming months as discussions are still on. “There have been previous instances also when similar discussions were started but did not fructify. Banks are now hoping that this will go through,” said a person familiar with the development, adding that public sector lenders are taking a keen interest. - Business Line

🍒 ATM moment of banking services is here as lenders make apps open for all : Long after automated teller machines (ATM) were made interoperable for bank customers, the whole gamut of banking is becoming membership agnostic. Earlier this week, ICICI Bank created some buzz by announcing its banking app — iMobile Pay — would be free for all to use. A customer need not be with the bank but can link her bank account with a Unified Payments Interface (UPI) ID with ICICI Bank and start using it for all kinds of payments across all platforms. Much like how Google Pay is being used for paying bills and purchases through UPI. iMobile Pay can also be used to get credit cards, instant loans, and, if needed, a savings bank account with the ICICI Bank. In the coming days, the bank plans to introduce products such as fixed deposits, recurring deposits, mutual funds and insurances through the app. - business standard

🍒 ICICI Prudential's assets under management cross Rs 2 trillion : ICICI Prudential Life, which is entering the 20th year of operations, on Friday said that its assets under management have crossed Rs 2 lakh crore. The company, the first in the industry to go public, started operations 20 years ago with the issuance of policies to seven underprivileged children and closed the first year of operations with an AUM of around Rs 100 crore (in FY01). The AUM grew to about Rs 50,000 crore in FY10 and subsequently the company was the first in the insurance industry to achieve an AUM of Rs 1 lakh crore in February 2015. As of September 2020, its total sum assured stood at Rs 18.06 lakh crore. "Achieving the Rs 2-lakh-crore assets milestone demonstrates the trust reposed in us by our customers," ICICI Prudential Life MD and chief executive NS Kannan said. "As one of the largest life insurers, it is our mission to protect and provide financial security to every citizen."- business standard

🍒 Kotak can’t pay dividend on preference shares, says RBI : The Reserve Bank of India (RBI) has barred Kotak Mahindra Bank from paying dividend on perpetual non-cumulative preference shares (PNCPS) worth ₹500 crore that it sold in 2018 to comply with a regulatory ceiling on promoter shareholding. The regulator first ordered banks and certain categories of non-banks on 4 December not to pay dividends from their profits in FY20 to conserve capital but clarified on Thursday that it applied to PNCPS as well in a letter to Kotak Mahindra Bank. - Live Mint

🍒 NBFCs AUM to grow at 5-6 per cent in FY22: Crisil : The asset under management (AUM) of non-banking finance companies, including housing finance companies, is likely to see a positive growth but will be muted at 5-6 per cent in the next financial year, according to Crisil Ratings. The turnaround will be led by larger entities with stronger parentage. In the current fiscal, NBFCs’ AUM is likely to de-grow for the first time in the last two decades, it said. “Navigating a raft of headwinds for over two fiscals – culminating in de-growth in the current fiscal – assets under management (AUM) of non-banking financial companies (NBFCs) is set to grow again – although at a relatively subdued 5-6 per cent next fiscal,” the agency said in a report. According to the agency’s president Gurpreet Chhatwal, despite an estimated GDP growth of 10 per cent next fiscal, overall NBFC sector growth is likely to be slower because access to funding remains a challenge due to concerns about the impact of the pandemic on asset quality. “Additionally, competition is expected to be more intense from banks – which are flush with low-cost deposits and better placed with improved capital buffer than in the previous years,” he said. - financial express

🍒 Gold eases to Rs 49,046 per 10 gram on a firm dollar, silver also falls : Gold prices fell Rs 145 to Rs 49,046 per 10 gram in the Mumbai retail market on a firm dollar and subdued global cues. The precious metal traded under pressure on optimism surrounding coronavirus vaccine after the USFDA approved Pfizer/BioNTech jab for emergency use. The metal has dropped Rs 270, or 0.55 percent, in the domestic market this week and traded lower in four of the five sessions. The rate of 10 gram 22-carat gold in Mumbai was Rs 44,926 plus 3 percent GST, while 24-carat 10 gram was Rs 49,046 plus GST. The 18-carat gold quoted at Rs 36,785 plus GST in the retail market. Silver slipped Rs 368 to Rs 62,232 per kg from its closing on December 10.

🍒 India's forex reserves surge by $4.525 billion to record $579.346 billion : The country's foreign exchange reserves surged by $4.525 billion to touch a record high of $579.346 billion in the week ended December 4, the RBI data showed. In the previous week ended November 27, the reserves had declined by $469 million to $574.821 billion. In the reporting week, the increase in reserves was on account of a rise in foreign currency assets (FCA), a major component of the overall reserves. FCA rose by $3.932 billion to $537.386 billion, the Reserve Bank of India's (RBI) weekly data showed. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. 

🍒 Rupee ends 2 paise higher at 73.64 against US dollar ; The rupee traded in a narrow range and settled for the day 2 paise higher at 73.64 against the US dollar on Friday, tracking recovery in doemstic equities towards the fag-end of the session. At the interbank forex market, the domestic unit opened at 73.65 against the US dollar and witnessed an intra-day high of 73.56 and a low of 73.71. 

🍒 Markets perch near all-time highs; bank, FMCG stocks shine : After touching its all-time intra-day high of 46,309.63, the 30-share BSE Sensex dipped into the negative zone in late-afternoon trade. However, it staged a comeback to end 139.13 points or 0.30 per cent higher at 46,099.01, just shy of its closing record. On similar lines, the broader NSE Nifty rose 35.55 points or 0.26 per cent to 13,513.85. It hit a lifetime high of 13,579.35 during the session.ONGC topped the Sensex gainers’ chart, rallying 5.68 per cent, followed by NTPC, Tata Steel, ITC, ICICI Bank, Titan, Bajaj Auto and SBI. On the other hand, Axis Bank, M&M, Tech Mahindra, HCL Tech, Bajaj Finserv and Infosys were among the laggards, skidding up to 2.19 per cent..

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