The World of Finance: Week of November 24th to November 30th 2014

the-world-of-finance-week-2014-Dec-01

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India: RBI

  • RBI released the final guidelines for licensing of Payments and Small Banks.
  • According to RBI’s guidelines, Payments Banks can open small savings accounts and accept deposits of up to Rs.1 lakh per individual customer, and provide remittance services. These banks are allowed to issue ATM or debit cards but are not allowed to issue credit cards or lend in any form
  • RBI’s final rules on Payments Banks prohibit telecom operators from leveraging their nationwide retailer networks and channels if they enter the new business
  • RBI can give banks more flexibility to restructure distressed loans in a bid to steer funding towards cash-strapped infrastructure projects

India: SEBI

  • SEBI fined Rs. 1 crore to six investment banks SBI, ICICI, Kotak Mahindra, IDBI, DSP Merrill Lynch and Edelweiss for suppressing key information while selling the maiden equity issue of credit rating agency CARE
  • SEBI has allowed as many as 123 entities to set up Alternative Investment Funds

India: Finance Ministry

  • Mauritius is again emerging as the largest source of foreign direct investment (FDI) in India, accounting for an inflow of $ 4.19 Bn in the April-September period
  • Jayant Sinha, Minister of State for Finance said in Lok Sabha that the main reasons for increase in NPAs of banks are sluggishness in the domestic growth during the recent past, slowdown in recovery in the global economy, uncertainty in the global markets, delay in environmental permits
  • The government plans to raise about $14.4 Bn by reducing its stakes in state-run banks to 52%
  • Government raises account opening target to 10 crore by 26 Jan under PMJDY. 7.64 crore bank accounts have been already opened under PMJDY till November 18

India: Banking Development

  • Anywhere, anytime bill payment — currently available to only a section of Indians with access to net banking and that, too, restricted to a handful of utilities — will soon be available for all citizens for all utilities under the Bharat Bill Payment System (BBPS)
  • RBI Governor Raghuram Rajan lauded SBI’s next generation banking initiative INTOUCH which offers multiple services like instant account opening, instant issuance of debit card, live interaction with experts, opportunity to buy financial products among others, under one roof

India: Banking Expansion

  • Bhartiya Mahila Bank eyes Rs 1,000-crore deposits, Rs 800-crore loan book by March-end. At present, the bank’s deposit stands at over Rs 300 crore and loans at Rs 500 crore
  • Non-performing assets (NPA) of public sector banks rose sharply to 5.33 % of total advances in September 2014
  • Pradhan Mantri Jan-Dhan Yojana can double ATM network in 2 years
  • Bank credit growth rises 11% to Rs 62,52,937 crore

India: General banking

  • A panel headed by RBI Governor Raghuram Rajan has shortlisted 10 Executive Directors for the post of CMD in eight public sector banks
  • Crisil says that telecom companies are best suited to start payment banks due to their high user base and strong distribution network
  • The Australia and New Zealand Banking Group (ANZ Bank) appointed Sanjeev Bajaj as Chief Executive Officer of its India franchise in place of Subhas DeGamia who has been elevated to a global role
  • SBI will launch an Islamic equity fund next month aimed mainly at attracting investments from the country’s 170 million Muslims
  • Govt banks get autonomy to appoint auditor

India: Frauds

  • The Enforcement Directorate has registered case against officials from Dena Bank, Oriental Bank of Commerce, Bank of India, Vijaya Bank and UCO Bank under the Prevention of Money Laundering Act (PMLA). ED has alleged that these officials misused cash credit facilities and laundered the proceeds to Dubai via Hawala route

India: They said it

  • Pranab Mukherjee, President, India: India will soon attain an 8-9% annual growth rate and become a $3-trillion economy
  • Raghuram Rajan, RBI Governor: The amount written off by banks as bad debts in the last five years would have been enough to fund the education of 15 lakh of the poorest children in the top private universities of the country, all expenses paid. only Rs 30,590 crore of bad debt was recovered by banks through the debt recovery tribunals in FY14 from the Rs 2,36,600 crore claimed even as cases keep piling up
  • Uday Kotak, Chief of Kotak Mahindra bank: Consolidation key for Indian banking industry’s growth and to meet financing needs of the country
  • KV Kamath, ICICI Bank Chairman: The RBI’s new norms for payments banks and small finance banks are a positive step
  • Pramit Jhaveri , CEO, Citi India: Many global multinational clients of Citibank have evinced interest in having a larger footprint in India and to invest more here, which gives it a significant opportunity to participate in the Government’s Make in India programme

India: Forex reserve

  • India’s foreign exchange reserves fell by $672.4 Mn to $314.87 Bn for the week ended Nov 21

International:

  • The Philippine government has mandated Deutsche Bank and HSBC as joint global coordinators for an offshore offering of US dollar bonds
  • Eurozone banks’ corporate lending faces nine-year stagnation