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☕🍔  31.08.2024 - Today's Banking / Financial News at a Glance 🙏

🍒               SBI has no intention of getting into a deposit rate war: Chairman CS Setty :  State Bank of India (SBI) chairman CS Setty has said that the nation's largest lender has no intention of getting into any "rate war" on deposits. Setty said that the bank's large deposit base is strong enough to fund its credit growth with some minor tweaks in rates. "We are anticipating a 14% to 16% credit growth this year. Even at 8% to 10% deposit growth at our large base the absolute number will be similar to the credit growth. Yes some amount of investable surplus is going to other asset classes but we are not getting into a rate war (for deposits) rather we will use our service quality and bank branches to get deposits," Setty said. He acknowledged that some amount of "tweaking" in deposit rates will happen especially in the one to two year bucket. "Competition for deposits is likely to continue for some time," he said while speaking on the third day of the Global Fintech Fest (GFF). - economic times.

🍒               YONO 2.0 pilot expected in November 2024, says SBI Chairman CS Setty : The pilot of YONO 2.0, the digital banking application of the country's largest bank, is expected to be out in November 2024, the lender’s chairman CS Setty said. “We have identified some of the frequently used consumer services and those will be moved into phase 1, hopefully sometime during November we will be able to launch under closed user groups and then eventually to the public,” Setty said at Global Fintech Fest in Mumbai on August 2024. etty also said that YONO 2.0 will see more robustness and scalability than YONO 1.0.  We are looking at a complete transformation of this app. It’s 5-6 years old, while design elements will remain, we are focussing more on the stability, scalability and robustness of the application,” he said. - moneycontrol.

🍒               RBI imposes Rs 2.68 cr on UCO Bank : Reserve Bank of India on Friday said it has imposed a penalty of Rs 2.68 crore on UCO Bank for contravention of certain provisions, including on opening of current accounts, interest rate on deposits and frauds classification. The RBI has also imposed a penalty of Rs 2.1 lakh on Cent Bank Home Finance Ltd for non-compliance with certain provisions of Know Your Customer (KYC) directions.  In both cases, the central bank said penalties are based on regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers. - economic times.

🍒               Banking liquidity has declined to Rs 0.95 lakh cr from a peak of Rs 2.86 lakh cr: Union Bank report : Liquidity in the Indian banking system has seen a significant decline this month says a research report by the Union Bank of India. It says the banking liquidity has fallen to Rs 0.95 lakh crore as on 28th August from a peak of Rs 2.86 lakh crore. The report highlights that the decline in liquidity continued throughout this month. At the beginning of the month, on August 2, 2024 banking liquidity was at Rs 2.56 lakh crore which has reduced to Rs 1.55 lakh crore on August 16th and now at Rs 0.95 lakh crore on August 28. The report stated, "As of 28th Aug, the system liquidity was in surplus, to the tune of Rs.0.95 lakh crore, easing from the peak of Rs.2.86 lakh crore earlier this month." - economic times.

🍒               HDFC Bank plans to sell $1.2 billion of loans via rare debt tool : India’s largest private lender HDFC Bank Ltd. plans to sell as much as Rs 10,000 ($1.2 billion) of loan portfolios using a rare debt instrument, as it seeks to cut exposure to certain sectors amid challenges in raising deposits, according to people familiar with the matter.  The bank is in talks with local asset managers including ICICI Prudential AMC, Nippon Life India Asset Management Ltd. and SBI Funds Management Pvt. to issue so-called pass through certificates, a route that has not been used in a decade by the bank, the people said, asking not to be identified as the discussions are private. - economic times.

🍒               HDFC Bank launches DigiPassBook to consolidate investments under one roof : HDFC Bank has launched DigiPassBook, a new feature on its SmartWealth app which allows users to consolidate all their investments under one roof.  t allows users to manage and view all their equity investments, ETFs and demat accounts in the app. DigiPassBook is supported by the account aggregator framework, which allows users to consolidate financial assets from different institutions. In the future, HDFC Bank plans to expand the DigiPassBook to include investments in insurance and bonds, marking a significant enhancement for the SmartWealth app. - Business Line.

🍒               Modi urges regulators to take bigger steps against cyber fraud : Prime Minister Narendra Modi has said that India’s financial sector regulators need to do more to curb cyber fraud and raise the level of digital literacy.  yber frauds should not become an impediment to the growth of India’s startups and fintech companies, Modi said at the third and final day of the Global Fintech Fest in Mumbai on Friday. Indians reported 1.1 million cases of cyber frauds worth ₹7,489 crore in 2023, showed data presented in the Lok Sabha in February. - Live Mint.

🍒               Banks will lose out if they don't partner fintechs: Axis Bank CEO : Banks will lose out if they do not collaborate with fintechs as they have a slew of technologies, products, and services lined up, which can make interaction with customers more fruitful, Amitabh Chaudhry, managing director (MD) & chief executive officer (CEO) of Axis Bank, said on Friday. “It would be a loss on our side if we were not working with them,” he said at the Global Fintech Fest. Chaudhry explained that taking some stakes in fintechs can result in us collaborating deeper and more than what we do typically in a partnership. He added that banks also want to look like fintechs in front of the customers who want to engage with them in a certain way and in many cases, they have realised that they don’t have much resources or the time to do that and fintechs can help the banks get there. e highlighted that as customers transact more digitally, the banks’ operating cost will come down.  e also added that the rising incidences of frauds has made people “worried” about undertaking banking transactions. - Business Standard

🍒               Karnataka Bank to offer personal loans on ONDC : Karnataka Bank has said that it will offer personal loans on ONDC (Open Network for Digital Commerce). This, according to a media statement, makes Karnataka Bank the first bank to offer such service. The bank will be offering personal loans through buyer apps on the ONDC network, which will initially be available for the bank’s existing customers. uoting Srikrishnan H, Managing Director (MD) and Chief Executive Officer (CEO) of Karnataka Bank: “This is yet another big step in democratising credit. Karnataka Bank is proud to be the first bank to integrate into ONDC’s rails and is excited to innovate and work closely with their ecosystem, evolve products and services and contribute to build India’s digital public infrastructure.” - Business Line.

🍒               Retail, services loans slow as RBI measures make banks cautious : The impact of Reserve Bank's regulatory measures cautioning and restricting banks on loans to NBFCs and unsecured lending is seen on lending patterns of commercial banks. While loans to services and retail which were holding on to the banking sector's loan book are slowing, it is lending to industry and agriculture that picked pace in July according to the data on sectoral deployment of bank credit released by the Reserve Bank on Friday.Credit growth to industry increased by 10.2 per cent (y-o-y) in July 2024 compared with 4.6 per cent in July 2023. Among major industries, credit to ‘chemicals and chemical products’, ‘food processing’, ‘petroleum, coal products and nuclear fuels’ and ‘infrastructure’ recorded a higher growth in July 2024 as compared to their growth a year ago, while credit to ‘basic metal and metal product’, and ‘textiles’ moderated. redit to agriculture and allied activities remained rose 18.1 per cent (y-o-y) in July 2024, compared with 16.7 per cent a year ago. - economic times.

🍒               Deposit and lending rates rise sequentially in July : In a likely impact of the nudge given by RBI to banks to focus on deposit growth, both deposit and lending rates increased sequentially in July according to the latest data on lending and deposit rates of commercial banks released by the Reserve Bank of India. The weighted average domestic term deposit rate (WADTDR) on fresh rupee term deposits of the commercial banks stood at 6.48 per cent in July 2024 as compared to 6.46 per cent in June 2024. The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits was at 6.92 per cent in July 2024 compared to 6.91 per cent in June 2024.  t may be recalled that on July 19, the RBI had met the commercial banks and nudged them to focus on mobilizing deposits at is the core source of funding loans than from borrowing from the market. In response, many banks raised their deposit rates in late July. - economic times.

🍒               Indian banks' body to seek easing of proposed norms for retail deposits, sources say : The Indian Banks' Association is likely to ask the central bank to reduce the amount of additional funds lenders will need to set aside against some retail deposits and also seek a delayed and gradual implementation of the proposal, seven sources told Reuters. The Reserve Bank of India in July proposed an additional 5% 'runoff' requirement on retail deposits enabled with internet and mobile banking facilities to bolster the liquidity resilience of banks. he RBI had sought feedback on the proposal until Aug. 31, after which it would finalise them for implementation from April 2025. - economci times.

🍒               Jio Financial to launch home loans soon : Jio Financial Limited (JFL), the financial services arm of Reliance Industries Ltd., is in the final stages of launching its home loan products, currently being rolled out in beta mode, according to the company's management at its first annual general meeting post-listing on the stock exchanges in August 2023. The non-banking financial company (NBFC) is also preparing to introduce loans against property and securities.  he company has already launched secured lending products, including supply chain financing, loans on mutual funds, and enterprise solutions for device financing. JFL's JioFinance app, which debuted in beta mode on May 30, 2024, has already surpassed 1 million downloads, the company informed. - economic times.

🍒               Future Generali India rolls out GenAI-enabled WhatsApp chatbot : Future Generali India Insurance (FGII) has launched its GenAI-enabled Chatbot ‘LEO’ on WhatsApp to enhance customer experience.  Built with advanced automation, artificial intelligence, and natural language processing (NLP), the LEO chatbot will offer personalised and real-time assistance throughout the entire policy cycle, providing an engaging and superior experience for customers. We are excited to introduce LEO, our GenAI-powered WhatsApp chatbot, which represents a significant leap forward in our digital transformation journey,’‘ Ruchika Malhan Varma, Chief Marketing, Customer and Impact Officer, Future Generali India Insurance, said.  - Business Line.

🍒               RBI introduces scheme for trading and settlement of sovereign green bonds in IFSC : The RBI on Thursday introduced a scheme for trading and settlement of sovereign green bonds (SGrBs) in the International Financial Services Centre (IFSC) in India. The scheme will apply to investments in SGrBs issued by the Government of India to eligible investors in the IFSC in India. nvestors can participate in the primary auctions of securities conducted by the Reserve Bank and transact in the secondary market for securities in the IFSC.  nder the scheme, investors are not permitted to repackage or write any derivative instrument on underlying securities held by them under the scheme. They also are not permitted to undertake repo transactions in such securities. - Business Line.

🍒               Private sector banks further gain market share in credit: RBI data : The share of public sector banks (PSBs) in total credit continued to decline and stood at 53.1 per cent in June 2024 (55.8 per cent a year ago) with concomitant rise for private sector banks (PvBs), per RBI’s quarterly BSR data. That PvBs are steadily gaining market share in credit is underscored by the fact that their share in total credit has risen to 46.9 per cent in June 2024 from 36.5 per cent in March 2021. n the deposits front, the share of deposits of scheduled commercial banks (SCBs), bearing 7 per cent and above interest rate, rose to 66.9 per cent in June 2024 from 45.4 per cent a year ago. - Business Line.

🍒               NPCI running pilot programme to identify mule accounts : In view of the rise in financial crimes and frauds, the National Payments Corporation of India (NPCI) is running a pilot programme for identification of mule accounts based on payment system data, said Ajay Kumar Choudhary, non-executive chairman and independent director. Terming the situation in India as ‘equally alarming’, he said cyber criminals have siphoned off more than Rs 1,750 crore in the first four months of the current calendar year.  Among multiple efforts at different organisations, a pilot is also being run on identification of mule accounts by NPCI, based on payment system data, and banks are now being sensitized on the outcome of these models,” Choudhary said at the Global Fintech Fest. - finacial express.

🍒               IBA likely to seek easing of proposed norms for retail deposits: Report : The Indian Banks' Association is likely to ask the central bank to reduce the amount of additional funds lenders will need to set aside against some retail deposits and also seek a delayed and gradual implementation of the proposal, seven sources told Reuters.  he Reserve Bank of India in July proposed an additional 5 per cent 'runoff' requirement on retail deposits enabled with internet and mobile banking facilities to bolster the liquidity resilience of banks. The RBI had sought feedback on the proposal until Aug 31, after which it would finalise them for implementation from April 2025. - Business Standard

🍒               City Union Bank stock jumps 4% amid heavy volumes, opens new branch in Trichy : Shares of City Union Bank rallied over 4 percent to day's high of Rs 175 apiece on August 30 amid heavy volumes. Recently, the Tamil Nadu-based lender opened a new branch in Trichy - taking the total number of branches count to 807. As much as 5.7 million equity shares were exchanged on both BSE and NSE on August 28 intra-day deals, significantly exceeding 1.9 million equity shares exchanged on a one-week average. o far this year, the stock of this private sector lender has jumped 15 percent, in-line with benchmark Nifty 50's 15 percent rise during the same period. Earlier this month, City Union Bank shares had hit 52-week high of Rs 176 apiece on August 1. - moneycontrol.

🍒               India's forex reserves hit record high of $681.69 billion : India's foreign exchange reserves, opens new tab rose for a second straight week and hit a record high of $681.69 billion as of Aug. 23, data from the central bank showed on Friday. The reserves rose $7 billion in the reporting week. They had risen $4.5 billion in the prior week. he Reserve Bank of India (RBI) intervenes in the foreign exchange market to curb excess volatility in the rupee.  hanges in foreign currency assets are caused by the RBI's intervention as well as the appreciation or depreciation of foreign assets held in the reserves. - Moneycontrol.

🍒               Nifty logs gains for record 12th straight session, Sensex up 230 pts as pharma, realty stocks rally : Benchmark indices Nifty and Sensex held steady in positive territory to end the day at record closing on August 30, driven by a sharp rally in realty and pharma stocks that boosted market sentiment. Notably, both indices touched fresh highs at the opening bell. Nifty 50 logged gains for the twelfth consecutive session in the longest-ever rally. t close, the Sensex was up 231 points or 0.28 percent at 82,365.77, and the Nifty was up 83.90 points or 0.33 percent at 25,235.90. About 2,115 shares advanced, 1,630 shares declined, and 117 shares unchanged. - moneycontrol.

🍒               Rupee rises 7 paise to 83.82 against US dollar in early trade : Rupee appreciated 7 paise to 83.82 against the US dollar in morning trade on Friday, supported by significant foreign fund inflows and a positive trend in domestic equities. At the interbank foreign exchange market, the local unit opened at 83.83, then gained ground to touch 83.82, registering a rise of 7 paise from its previous close. - Business Line.

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