Maharashtra urban co-op banks concerned over rumours on their financial health

The Maharashtra Urban Co-operative Banks Federation has expressed concerns over the rumors circulated in the market with regard to the financial condition of urban cooperative banks, following the decision of the RBI decision to take total control of these institutions. Vidhyadhar Anaskar, chairman of the federation, said no restriction has been imposed against them. Source link

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Banks to be cautious despite gold loan LTV relaxation: Report

The increase on LTV ratio on gold loans is for banks and will be applicable up to March 31, 2021. Despite relaxation in loan-to-value (LTV) ratio on gold loans, banks are likely to be cautious in lending and will keep a buffer for any correction in the price of collaterals, says a report.  Last week, the Reserve Bank of India (RBI) had increased the permissible LTV ratio for loans against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent. The increase on LTV ratio on gold loans is for banks and will be […]

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RBI asks urban cooperative banks to implement system-based asset classification from June 2021

“UCBs which meet the (specified) criteria as at the end of the current or subsequent financial years shall implement system-based asset classification within a period of six months from the end of the financial year concerned,” the RBI said. The Reserve Bank has asked large urban cooperative banks (UCBs) to undertake the system-based asset classification from June 30, 2021, to improve efficiency and transparency. The UCBs having total assets of over Rs 2,000 crore as on March 31, 2020, will be required to implement the system-based asset classification from June 30, 2021, an RBI circular said. UCBs having total assets of […]

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Loan recast: NBFCs’ refinancing needs likely to increase, says report

A higher quantum of restructured assets would clearly reflect higher asset quality challenges for NBFCs and can restrict their ability to mobilise funds from banks and capital markets, it said. With the Reserve Bank allowing restructuring of loans that are facing stress due to the COVID-19 pandemic, non-banking finance companies are likely to see an increase in their refinancing requirements, says a report. Last week, RBI gave permission to lenders to go for one-time restructuring of corporate and personal loans facing stress due to the disruptions caused by coronavirus. “The Reserve Bank of India’s decision allowing lenders to restructure loans would […]

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Deutsche Bank infuses Rs 2,700 cr in India operations for expansion

The capital adequacy ratio for the bank, which has been present in India since 1980, stood at 14.93 per cent as of March 31, 2020, which will go up post the infusion. German lender Deutsche Bank on Wednesday announced a capital infusion of Rs 2,700 crore into its India operations for expansion across segments. This is the second time in less than two years that the bank has infused money into local operations consisting of 17 branches, after the Rs 3,800 crore investment in early 2019. Banks have to set aside capital for every new loan that they make and also […]

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Fortunes of troubled NBFCs turn; show signs of revival on stimulus amid pandemic fallout

A custom index of shares of 20 financial firms and other companies also improved. The fortunes of India’s shadow lenders are showing signs of turning, suggesting stimulus measures from policy makers will help the troubled sector weather some of the fallout from the pandemic. Premiums that investors seek to buy AAA rated five-year bonds of non-bank lenders over similar-maturity government notes narrowed the most last month since at least 2012, helping a gauge measuring bond spreads to strengthen. A custom index of shares of 20 financial firms and other companies also improved. The sound health of shadow banks is vital because […]

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IndusInd Bank sells part of pledged shares of Eveready Industries, McLeod Russel

The bank invoked the pledged shares for recovery of its dues from Seajuli. Private sector lender IndusInd Bank on Tuesday said it has sold 4.5% and 4.18% of invoked shares of battery manufacturer Eveready Industries and tea maker McLeod Russel, respectively. Eveready and McLeod Russel are group companies of financially stressed Williamson Magor group. After selling 32,71,608 equity shares of Eveready Industries and 55,00,000 equity shares of McLeod Russel on Monday, IndusInd Bank now holds 24,11,712 equity shares, comprising 3.32% of paid-up equity capital of the battery manufacturer, and 23,32,253 equity shares, comprising 2.23% of paid-up equity capital of tea maker, […]

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Bank debt restructuring to delay bad loans recognition: Fitch

Fitch believes that the scheme may be designed to give banks more time to raise capital to address the impact of the crisis on loan portfolios. The Reserve Bank of India’s (RBI) decision to allow restructuring of stressed assets will delay the recognition of bad loans in the banking system, but the conditions wired into the guidelines will help restrict the number of accounts qualifying for the recast window to about 5-8% of outstanding loans, analysts said. In a report on Monday, Fitch Ratings said the policy could open a window for banks to build capital buffers while putting off full […]

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Central Bank of India net profit rises 14.4% year-on-year as provisions fall

In absolute terms, GNPAs stood at Rs 31,946 crore, while net NPAs stood at Rs 10,469 crore at the end of Q1FY21. Public sector lender Central Bank of India on Tuesday reported a 14.4% year-on-year rise in net profit to Rs 135.43 crore in the June quarter of FY21. The profit came on the back of an improvement in net interest income (NII) and a drop in provisions. The bank reported a total income of Rs 6,727 crore, up 3.6% y-o-y. NII – the difference between interest earned and interest expended – stood at Rs 2,146 crore, up 20% y-o-y. Provisions […]

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Icra expects loan restructuring at 5-8% of overall banks loan book under new norms

Icra had earlier projected a slippage of 5-5.5 per cent for the banks during the current fiscal. With tighter debt recast norms announced by the Reserve Bank, the likely restructuring by banks will be around 5-8 per cent of their overall loan book, says a report. Last week, the RBI allowed banks to go for one-time restructuring of corporate and personal loans that are under stress due the COVID-19 pandemic. The central bank also laid out some norms for implementation of a resolution plan which included eligibility of only special mention accounts 0 (SMA-0) borrowers as on March 1, 2020, independent […]

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