IPO-bound India1 Payments installs 10,000 white-label ATMs

The IPO-bound India1 Payments, promoted by the Banktech Group of Australia and formerly known as BTI Payments, has said that it has crossed a milestone of deploying 10,000-white-lable ATMs which are labelled as India1ATMs, making it the largest player in the segment. The company has installed these machines mostly in semi urban and rural areas across 14 states and union territories, and this milestone makes India1 ATM the second largest white label ATM (WLA) brand in the semi-urban and rural areas across 14 states and union territories, and this milestone makes India1 ATM the second largest white label ATM (WLA) brand in the semi-urban and rural areas.

According to the latest data from the RBI as of September, there were 2.4 lakh ATMs in the country, of them around 28,00 are white-label machines.

The company has grown over 15 per cent over last year and account for more than 50 per cent of incremental ATMs deployed in this period.

India1ATM services over 72 million customer transactions and facilitates a gross transaction value of over Rs 13,600 crore every quarter on an average. It began operations in 2014 and since then it has installed more than a third of the WLAs.

In September, the Bengaluru-based company filed draft papers with Sebi for IPO and which is mix of fresh issues and offer for sale by promoters. The issue comprises a fresh issue of equity shares worth Rs 150 crore and an offer for sale of up to 10.31 million shares by existing shareholders and promoters.

K Srinivas, managing director and chief executive of India1 Payments, said "despite the pandemic, we have leveraged our network with an average deployment of over 300 ATMs per month for the previous four months".

Source :Economic Times

RBI appoints P N Raghunath as additional director of Ujjivan Small Finance Bank

Ujjivan Small Finance Bank (SFB) on Monday said RBI has appointed P N Raghunath as an additional director on the board of the bank.

"The Reserve Bank of India vide its letter dated November 29, 2021 has appointed P N Raghunath, General Manager, Reserve Bank of India, Bengaluru, Regional Offic ..

Regional Office as an Additional Director on the board of the bank for a period of 2 years with effect from November 29, 2021 to November 28, 2023 on till further orders, whichever is earlier," Ujjivan SFB said in a regulatory filing.

Stock of the bank closed at Rs 17.80 apiece on BSE, down 4.56 per cent over previous close.

Source :Economic Times

IndusInd Bank's subsidiary defers review of decision to relieve top 2 execs

Private sector lender IndusInd Bank on Monday said two of the top executives of its subsidiary, Bharat Financial Inclusion (BFIL), have tendered their resignation but have offered their assistance in the ongoing review of certain transactions that happened at the company, which resulted in the bank appointing an international audit firm to conduct an independent review.

Having said that, the bank informed the stock exchanges that the board of BFIL has put off the consideration of the decision to relieve these two executives off their positions until the ongoing review of certain transactions at Bharat Financial Inclusion is completed.

In an exchange filing, the bank said, “Mr Shalabh Saxena and Mr Ashish Damani, currently employed with BFIL in the capacity of the Managing Director & CEO and the Executive Director & CFO, respectively, have tendered their resignations pursuant to emails addressed to the Chairman of the Board of BFIL on November 25, 2021.”

Saxena and Damani have been appointed as the MD & CEO and President & CFO of Spandana Sphoorty, respectively.

“Both the employees have offered their assistance in the ongoing review of transactions related to BFIL, for which the bank has appointed a renowned international audit firm to conduct independent review and ascertain veracity of the anonymous complaints. The board of BFIL has deferred consideration of the decision to relieve them until the completion of the ongoing review,” the lender said.

Last week, the bank had said that the two top executives of BFIL cannot be relieved from their positions until the review of certain transactions at the company is completed. Earlier this month, the bank had said that BFIL had disbursed nearly 84,000 loans without customer consent in May due to a technical bug. The bank said an independent review has been initiated to see if there was any process lapse or accounting failure at BFIL.

According to the terms of their employment agreement with BFIL, Saxena and Damani are prohibited from accepting employment at a competitor such as SSFL, unless approved in writing by the board of BFIL.

Meanwhile, the lender has nominated J Sridharan, who has over two decades of experience in managing finance, governance and MIS functions at the bank, as Executive Director on the board of BFIL and Srinivas Bonam to oversee the day-to-day functioning of BFIL. It has also appointed KV Rao, former Chief Operating Of!icer and Head Member Services for 11 years at BFIL, as an advisor for strengthening the field processes.

Source :Business Standard

Industry bodies urge RBI to scrap daily loan asset classification norm

Top industry bodies are seeking the scrapping of the Reserve Bank of India's direction on loan asset classification by non-banking finance companies (NBFCs) on a daily basis as the rule could cripple the small and medium enterprises segment that is just limping back to normalcy after the Covid impact.

The Confederation of Indian Industries (CII) and the Associated Chambers of Commerce and Industry of India (Assocham) are writing to the regulator to review the norm which asks NFBCs to classify loans based on daily repayments.

In their letter to the RBI the industry bodies have argued that the strict day-to-day payments based classification would be hard to implement for the borrowers serviced by them as their cash flows and supplies are haphazard. These borrowers make lump sum payments.

"Our main point is that we mostly serve small borrowers, truck drivers, light commercial vehicles owners or even farmers. These people do not have a steady income stream like salaried people," said a person familiar with the development. "As a result, payments do not often come on or before the due date, so we give them some leeway, like paying before the end of the month. The strict classification on par with banks will derail this system and could put many borrowers in trouble."

In a clarification earlier this month, RBI said loan accounts have to be classified as NPAs unless the entire arrears of interest and principal are paid by the borrower. NBFCs have also been asked to specifically mention the exact due date of loan accounts and the break-up of the principal as well as interest. These norms have now brought loan classification by NBFCs on par with banks and is yet another step by the RBI to tighten regulations on NBFCs although they serve a different set of client .The changes will be effective from next fiscal year.

Crisil said that the impact of the new RBI norms on unsecured loan NPA is expected to be in the range of 1.5% to 3%, for MSME finance it is expected to be in the range of 1% to 3%, and 1% to 2% for vehicle finance.

Industry leaders are hoping that the central bank will at least give them some more time or introduce the new norms in a gradual or phased manner.

Source : Economic Times

The unraveling of Reliance Capital shows why RBI hates big business in banking

The crisis of confidence that erupted in India’s shadow banking industry in 2018 has claimed its most high-profile casualty yet. In a surprise announcement Monday evening, the central bank said that it had superseded the board of a financier controlled by Anil Ambani, the younger brother of India’s richest man, appointed an administrator, and would soon be sending the firm to the bankruptcy tribunal.

The unraveling of Reliance Capital Ltd. shows why the Reserve Bank of India remains reluctant to allow big business groups into mom-and-pop banking, despite facing huge pressure to allow a wave of corporate capital into the industry and reignite credit growth. The financiers’ potential to do harm is lethal even without access to insured deposits.

Shares of BT Group Plc jumped as much as 9.5% in London after the Economic Times reported that the Indian tycoon was considering an unsolicited bid for Britain’s largest phone company. Reliance said the article was “completely speculative.”

Anil Ambani’s misery couldn’t be more real, though. Creditors, including the government, are scrambling to recover the 758 billion rupees ($10 billion) owed to them by his Reliance Communications Ltd., which shuttered its mobile service four years ago. Last year, the 62-year-old former billionaire was ordered by a London judge to pay more than $700 million to a trio of Chinese banks that had lent money to RCom against personal guarantees by Ambani. Reliance Naval & Engineering Ltd., which had a contract to build patrolling vessels for the Indian Navy, is also in insolvency. Creditors are looking at 80%-90% haircuts, BloombergQuint reported in September.

Now that Reliance Capital joins his other group businesses in the bankruptcy slaughterhouse, investors will get a clearer assessment of why their firm, which was once worth more than $3 billion, is most likely headed for a complete wipeout of the $64 million in shareholder value that still remains. The “serious governance concerns,” which the Reserve Bank of India says the board failed to address effectively, need to come out in the open. That won’t improve the outcome for Reliance Capital shareholders, but it will hopefully prevent similar blowups in the future.

It will also inform the debate on whether large business houses can be trusted with banking licenses. “It has always been our ambition to create a world-class bank,” Anil Ambani said at the annual general meeting of Reliance Capital back in 2010, when the RBI had just floated a discussion paper on allowing some new lenders into the system. Luckily, those ambitions never received regulatory blessings. Otherwise, the RBI today might be grappling with the far messier task of making individual depositors whole.

Not that the resolution of Reliance Capital is going to be a cakewalk. With nearly $9 billion in assets, according to the financier’s latest annual report, meeting a $2.9 billion liability to creditors at the end of October shouldn’t have been this hard. But for more than two years now, various orders by courts and debt recovery tribunals have prevented the company from disposing off assets. Creditors who tried to sell units got many expressions of interest. Still, no deal could fructify because of layers of litigation, the Business Standard reported earlier this month.

Source : Economic Times

LIC gets RBI's nod to increase stake in Kotak Mahindra Bank to 9.99%

The Reserve Bank of India (RBI) has granted approval to state-owned insurance behemoth, Life Insurance Corporation of India (LIC), to raise its stake in private lender Kotak Mahindra Bank up to 9.99 per cent. Currently, the life insurer holds 4.96 per cent in the private lender.

In a notification to the exchanges, the lender said, “…Kotak Mahindra Bank Limited has received an intimation from LIC stating that the RBI had granted its approval to LIC, for increasing its holding in the Bank up to 9.99 per cent of the paid up equity share capital of Bank...”.

Shares of Kotak Mahindra Bank closed with gains of 2.92 per cent on the BSE post the announcement, the most among Sensex components.

The approval of the central bank will be valid for one year. As per RBI norms, prior approval of the RBI is required to increase stake in private banks beyond 5 per cent.

LIC is one of the biggest institutional investors in India’s stock market and has a stake in a number of private and public sector banks. LIC has a stake in as many 24 scheduled commercial banks, data from Capitaline shows.

Once LIC raises its shareholding in Kotak Mahindra Bank to 9.99 per cent, it will be the second largest shareholding of the insurer in a scheduled commercial bank. Among other major banks, LIC holds 8.8 per cent in Canara Bank, 8.3 per cent in Punjab National Bank and State Bank of India, 8.2 per cent in Axis Bank, and 7.6 per cent in ICICI Bank.

Source : Business Standard

RBI imposes Rs1 crore penalty on Union Bank of India

The Reserve Bank of India has imposed monetary penalty worth ₹1 crore on Union Bank of India for failure to classify an account as fraud and delay in disclosures in the annual report. In a press release on Monday, the regulator said that the bank had been penalized for non-compliance with the certain provisions of directions issued by RBI contained in “Reserve Bank of India (Fraud - Classification and Reporting by commercial banks and select FIs) Directions 2016" and “Guidelines on Sale of Stressed Assets by Banks.  

“The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019) and the examination of the Risk Assessment Report, Inspection Report and all the related correspondences pertaining to ISE 2019, revealed, inter alia, noncompliance with the above-mentioned directions to the extent of (i) failure to classify an account as Red Flag Account despite presence of Early Warning Signals and (ii) failure to disclose ageing of and provisioning for Security Receipts (SRs) in its Annual Report," it said. 

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions, the regulator added.

Source : Livemint

RBI imposes monetary penalty of Rs 1 crore on State Bank of India

The Reserve Bank of India (RBI) by an order dated November 16 has imposed a monetary penalty of Rs 1 crore on the State Bank of India for contravention of section 19 (2) of the Banking Regulation Act, 1949 (the Act), informed RBI.

"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," reads the official release.

As per the press note, the irregularities were identified after a Statutory Inspections for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial positions as on March 31, 2018, and March 31, 2019, and the examination of the Risk Assessment Reports, Inspection Report and all related correspondence pertaining to the same, revealed, inter-alia, contravention of section 19 of the Act.

Section 19 (2) of the Act says that "no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent of the paid-up share capital of that company or thirty per cent of its own paid-up share capital and reserves, whichever is less."

"After considering the bank's reply to the notice, oral submissions made during the personal hearing, and additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of the aforesaid provisions of the Act was substantiated and warranted imposition of monetary penalty on the bank, to the extent of contravention of the aforesaid provisions of the act," read the press note.

Source : Business Standard

Former RBI executive director Lily Vadera joins HDFC Bank board

HDFC Bank on Friday said its board has approved the appointment of former RBI executive director Lily Vadera as independent director.

The board of directors of the bank approved the appointment of Lily Vadera as an additional independent director of the bank for a period of five years effective from November 26, 2021, subject to the approval of the shareholders, HDFC Bank said in a regulatory filing.

Vadera, 61, has 33 years of experience in central banking. She retired as Executive Director from the Reserve Bank of India in October 2020.

As an ED of the RBI, she was in-charge of the Department of Regulation (DoR) where she dealt with the regulatory framework for various entities in the financial sector, covering all categories of banks and non-banking finance companies.

She was instrumental in putting in place a framework for a regulatory Sandbox to provide an enabling environment for fintech players to foster innovation in financial services and played a significant role in the amalgamation of banks in stress, the bank said.

She also represented RBI and played an important role as a member of the Insolvency Law Committee set up by the Ministry of Corporate Affairs.

Source : Business-standard

RBI accepts 21 of 33 working group recommendations on private banks

The Reserve Bank of India (RBI) has accepted 21 out of 33 recommendations of the internal working group that was set up to review extant ownership guidelines and corporate structure for Indian private sector banks.

The Central Bank said it had made some partial modifications where it considered them to be necessary and the remaining recommendations are under examination.

The RBI has accepted recommendation of raising cap on promoters’ stake from the current levels of 15% to 26% of the paid-up voting equity share capital of the bank.

On the lock-in period for promoters’ initial shareholding, limits on shareholding in long run, dilution requirement and voting rights, no change may be required in the extant instructions related to initial lock-in requirements, which may continue as minimum 40% of the paid-up voting equity share capital of the bank for first five years.

It has also tweaked limits for non-promoter shareholding in private banks.

Further, the Central Bank has accepted the recommendation to disallow pledge of promoter shares during lock-in period.

The RBI on November 20 had released the report on the working group recommendations on private bank ownership and corporate structure.

However, Reuters reported that the changes would not include allowing industrial groups to own lenders. Bank promoters currently do not include industrial groups whose holdings in a bank are capped at 10%.

Source : Livemint

Sundaram Finance raises ₹200 cr in third tranche of High Yield Secured Real Estate Fund

Buoyed by the earlier performance, Sundaram Finance has raised ₹200 crore in the third tranche of its High Yield Secured Real Estate Fund within a month of its launch and targets mopping up ₹700 crore in coming days.

The fund will seek to use its focused and robust credit policy to create risk-adjusted returns and periodically distribute cash to reduce risks and provide a current income model for its investors.

Risk mitigation strategies

Karthik Athreya, Head of Strategy, Alternate Credit, said the funds have significant risk mitigation strategies that are differentiated in the market in terms of underwriting methods and diligence focus.

Sundaram Finance Holdings: Why you should accumulate this oft-ignored small-cap stock

The real estate space is exhibiting growth — sales numbers reaching pre-Covid levels, prices remain in line in the company’s key markets and supply is managed. The growth is aided by the low interest rates offered by banks, attractive pricing, and incentives offered by developers, he said.

ESG compliance

Harsha Viji, Executive Vice-Chairman, Sundaram Finance, added, “Our focus across various investment strategies, going forward, is to also transition our portfolio into ESG compliance over the next few years, reflecting the strong vision of Sundaram Group as a responsible corporate citizen.”

Sundaram Finance eyes ‘decent’ growth in FY22 amid limited stress

The third series of AIF Cat II funds will invest in senior secured credit of real estate developers based out of South India. Fund III follows the better performance of the earlier two similar funds that raised over ₹840 crore and built a diversified asset book of 18 investments to date that are generating 18-20 per cent gross IRRs.

Source: The Hindubusinessline

Bank of Baroda to raise up to Rs 2,000 cr via AT1 bonds

 

The offer comprises a base issue of Rs 500 crore with a greenshoe option to retain oversubscription up to Rs 1,500 crore, according to the placement memorandum of the bank.

Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds at an 8.70% coupon, and the issue has seen full subscription. All AT1 bonds were issued based on regulations amended by Sebi earlier this year.

Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds at an 8.70% coupon, and the issue has seen full subscription. All AT1 bonds were issued based on regulations amended by Sebi earlier this year.

Bank of Baroda, the country’s second-largest state-owned lender, is planning to raise Rs 2,000 crore through the issuance of Basel-III compliant Additional Tier-I (AT1) bonds on Wednesday.

A detailed architecture and sequencing of reform has been proposed in this paper, the purpose of which is to undertake stakeholder consultations. Based on the comments received, the paper will be finalised and shared as a policy recommendation from Niti Aayog.Niti Aayog suggests setting up of full-stack ‘digital banks’“Time is not the essence for transfer of SRs. In the event of non-realisation of amount out of SRs, the bank is not liable to refund anything in part or full,” SBI said in the notice.Security receipts for past NPAs appear as lenders seek to avoid provisioning

Funds raised will be utilised for regular business activities and are not meant for financing any particular project. “The bank undertakes that proceeds of the issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines,” the bank said in a notice.

AT1 bonds are types of perpetual debt instruments that banks use to augment their core equity base and, thus, comply with Basel-III norms. The coupon on the AT1 bonds will be set during the bidding on Wednesday on the electronic bidding platform of the National Stock Exchange.

“We expect better coupons on our AT1 bonds compared to other banks which recently raised funds through these securities,” bank officials said.

Market participants expect rates between 7.95% and 8.05% on Bank of Baroda’s bonds. The deemed date of allotment and pay-in date on the bonds is November 26, while the minimum bid lot size is Rs 1 crore with a bid value step size of Rs 1 crore.

The bonds have been rated AA+ with a “stable” outlook by Crisil and Icra on November 17 and November 12, respectively. The bank has appointed IDBI Trusteeship Services and KFin Technologies as debenture trustee and registrar to the issue, respectively. The AT1 bonds have a call option after five years.

Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds at an 8.70% coupon, and the issue has seen full subscription. All AT1 bonds were issued based on regulations amended by Sebi earlier this year.

As per amended regulations, the residual maturity of the AT1 bonds is 10 years till March 31, 2022, and will be increased to 20 and 30 years over the subsequent six months. From April 2023, the maturity of these bonds will become 100 years from the maturity date.

Source: Financial Express

Zerodha founder on why it is tough to compete with banks and become one

Zerodha founder and CEO Nithin Kamath today shared his thoughts on how tough it is to become a Bank and expressed hope that the regulatory shackles will be broken in the future.

Taking to Twitter, Nithin Kamath said, "The moat banks have today is that it is very very tough to become a bank. Yeah, you can be a Small Finance Bank, Payments Bank, Neo Bank, but you can never compete with a full-fledged bank due to all the restrictions. But looks like there is hope that the future is different."

Kamath's statement comes as government think-tank Niti Aayog earlier today proposed setting up of full-stack 'digital banks', which would principally rely on the internet and other proximate channels to offer their services and not physical branches, to mitigate the financial deepening challenges being faced in the country.

The Aayog, in a discussion paper titled 'Digital Banks: A Proposal for Licensing & Regulatory Regime for India', makes a case and offers a template and roadmap for a digital bank licensing and regulatory regime for the country.

Digital banks or DBs are banks as defined in the Banking Regulation Act, 1949 (B R Act), the paper said.

"In other words, these entities will issue deposits, make loans and offer the full suite of services that the B R Act empowers them to. As the name suggests however, DBs will principally rely on the internet and other proximate channels to offer their services and not physical branches," it said.

The paper noted that India's public digital infrastructure, especially UPI, has successfully demonstrated how to challenge established incumbents.

UPI transactions measured have surpassed ₹4 lakh crore in value. Aadhaar authentications have passed 55 lakh crore.

"Finally, India is at the cusp of operationalising its own Open banking framework," the paper said.

"These indices demonstrate India has the technology stack to fully facilitate DBs. Creating a blue-print for digital banking regulatory framework and policy offers India the opportunity to cement her position as the global leader in Fintech at the same time as solving the several public policy challenges she faces," it said.

The paper also recommends a two-stage approach, with a digital business bank license to begin with and Digital (Universal) Bank license after policymakers and regulators have gained experience from the former. Focus on avoiding any regulatory or policy arbitrage and giving a level playing field is an important recommendation.

Source: Livemint

RBI fines payment system operators TCPSL, ATPL ₹2.55 cr for regulatory violation

Reserve Bank of India (RBI) has imposed penalties on payment system operators Tata Communications Payment Solutions Limited (TCPSL) and Appnit Technologies Private Limited (ATPL) for regulatory violations.

A penalty of ₹2 crore has been imposed on TCPSL and ₹54.93 lakh on ATPL, the central bank said in a statement on Wednesday.

“It was observed that TCPSL was non-compliant with the directions issued by RBI on White Label ATM deployment targets and net-worth requirement. ATPL was non-compliant with the directions issued by RBI on maintenance of escrow account balance and net-worth requirement," it said.

The RBI had issued notice to these two authorised Payment System Operators (PSOs).

After reviewing their written responses and oral submissions made during the personal hearing, the RBI concluded that the charges of non-compliance with certain directions were substantiated and warranted the imposition of monetary penalty.

The RBI, however, clarified that the penalties are based on “deficiencies in regulatory compliance" and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.

In another statement, the RBI said a penalty of ₹20 lakh has been imposed on Mulamoottil Financiers Limited, Kozhencherry, Pathanamthitta District, Kerala for non-adherence with certain provisions of the directions on the classification of non-performing assets and norms related to raising money through private placement by NBFCs-Debentures.

In this case also, the RBI said the penalty has been imposed due to deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.

Source: Livemint

Niti Aayog's proposed full-stack digital banks to end physical branches, run entirely on internet

Niti Aayog has floated the idea of setting up full-stack 'digital banks', which would primarily work on the internet and other proximate channels to offer their services, instead of physical branches. These proposed banks will help mitigate the financial deepening challenges being faced in the country.

The Aayog, in a recent discussion paper titled ‘Digital Banks: A Proposal for Licensing & Regulatory Regime for India’, chalks out a possible action plan to make such digital banks a reality with proposals for licensing and regulatory frameworks.

Digital banks or DBs are banks as defined in the Banking Regulation Act, 1949 (BR Act), the paper said.

“In other words, these entities will issue deposits, make loans and offer the full suite of services that the B R Act empowers them to. As the name suggests however, DBs will principally rely on the internet and other proximate channels to offer their services and not physical branches," it said.

Niti Aayog noted in the paper India's public digital infrastructure, especially UPI, has successfully demonstrated how to challenge established incumbents. UPI transactions have crossed the ₹4 lakh crore in value, while Aadhaar authentications have surpassed 55 lakh crore.

“Finally, India is at the cusp of operationalising its own Open banking framework," the paper said.

“These indices demonstrate India has the technology stack to fully facilitate DBs. Creating a blue-print for digital banking regulatory framework and policy offers India the opportunity to cement her position as the global leader in Fintech at the same time as solving the several public policy challenges she faces," it added.

The paper also recommends a two-stage approach - a digital business bank license to begin with, followed by a Digital (Universal) Bank license after policymakers and regulators have gained experience from the former. Focus on avoiding any regulatory or policy arbitrage and giving a level playing field will be crucial.

Source: Livemint

PNB data breach: Bank denies claims, issues a four-point clarification note

Punjab National Bank (PNB) has denied claims made in a cyber security firm's report that the personal data of the bank's millions of customers was breached due to a loophole in its system.

According to the report by the cyber security firm Cyberx9, a vulnerability in the server of PNB allegedly exposed the personal and financial information of its about 180 million customers for about seven months. CyberX9 has claimed that the vulnerability provided access to the entire digital banking system of PNB with administrative control.

Meanwhile, the bank has confirmed the glitch but denied any exposure of critical data due to the vulnerability.

1) We have thoroughly checked our ICT systems those on Internet-facing and operating in the background at PNB. There has been no breach of systems and pilferage of any personal data of any of our customers and account holders of PNB. 

2) It is an established fact that hackers regularly attempt to penetrate every and all Internet-facing systems anywhere in the world. PNB has implemented stringent security controls in all our ICT systems. The reported attempt of the perpetrator was monitored and checked. All our critical ICT systems dealing with banking transactions are kept in a secure zone, called DM zone with multiple layers of protection. 

3) Bank has deployed Data leak prevention solutions that prevent any unauthorized data to be sent through emails. The said zone does not permit unauthorised access to anyone including internal staff. The ICT systems are monitored round the clock by competent staff at the security operation centre. The data at rest and transit are encrypted using proprietary algorithms. 

Source: Livemint

PNB customers' data exposed for seven months due to server vulnerability: Report

Critical financial and personal information of 180 million Punjab National Bank (PNB) customers was at risk for around seven months due to a vulnerability in the lender's servers, said cybersecurity firm CyberX9. The vulnerability provided access to the entire digital banking system of the bank with administrative control, the agency claimed.

Meanwhile, PNB confirmed that its servers had a glitch, but assured that no critical data was exposed due to it. PNB stated “customer data/applications are not affected due to this" and “server has been shut down as a precautionary measure."

“Punjab National Bank kept severely compromising the security of funds, personal and financial information of over 180 million (all) its customers for about the last 7 months. PNB only woke up and fixed the vulnerability when CyberX9 discovered the vulnerability and notified
PNB through CERT-In and NCIIPC," CyberX9 founder and MD Himanshu Pathak told PTI.

CyberX9 research team discovered a very critical security issue in PNB which was leading to admin access to internal servers hence exposing a massive number of banks' systems nationwide open for cyber-attacks for the last about seven months, Pathak said.

He added that vulnerability was found in an exchange server interconnected with other exchanges and shares all access, including access to all email addresses which results in access to all email addresses.

“The vulnerability which we discovered was leading to the highest level of admin privilege in PNB's exchange servers. If you gain access to Domain Controller through an exchange server then the doors very easily open to make any computer accessible in the network," Pathak said.

“These computers even include those that are being used in their branches and other departments," he further added.

Meanwhile, PNB assured that the affected server had no sensitive or critical data. The bank denied CyberX9's claim on the threat to customer's data due to the vulnerability.

Source: Livemint

SBI yet to refund Rs 164 cr undue fee charged from Jan Dhan a/c holders

State Bank of India (SBI) is yet to return Rs 164 crore of undue fee charged from the account holders of Pradhan Mantri Jan Dhan Yojana (PMJDY) towards digital payments during April 2017 and December 2019, a report said.

"On directions from the government, SBI has returned just about Rs 90 crore, thereby withholding the bigger chunk of at least Rs 164 crore with itself," said the report prepared by IIT-Mumbai.

It said that during April 2017 to September 2020, SBI had collected over Rs 254 crore towards at least 14 crore UPI/ RuPay transactions by charging Rs 17.70 per transactions on BSBDA (Basic Savings Bank Deposit Account) customers under the Pradhan Mantri Jan Dhan Yojana (PMJDY).

Queries sent to the country's largest lender on return of charges levied on debit transactions done by such account holders during the said period of 33 months did not elicit any response.

Since June 1, 2017, unlike any other bank in India, the report said, SBI charged Rs 17.70 for every debit transaction beyond four a month.

Debit transaction means any withdrawal transaction that includes cash withdrawal, Unified Payments Interface (UPI), Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real-Time Gross Settlement (RTGS) pre-authorised standing instruction, cheque, etc.

This has adversely impacted the BSBDA customers of SBI who, on the call of the government and RBI, embraced digital means of financial transactions.

"Due to this attitude of SBI and subsequent to RBI remaining noncommittal, in mid-August 2020, the Finance Ministry was approached for addressing the concern.

"The Ministry was prompt in their actions and the CBDT by end-August 2020,advised SBI to refund the charges collected since January 1, 2020 on transactions carried out using the prescribed digital payment modes," it said.

On August 30, 2020, the Central Board of Direct Taxes (CBDT) advised banks to refund the charges collected since January 1, 2020 on transactions carried out using the prescribed digital payment modes that include the UPI and the RuPay debit card, and not to impose charges on future transactions carried out through such modes.

In adherence to the CBDT directive, as late as February 17, 2021, SBI initiated refund of Rs 17.70 for the UPI and RuPay debit card digital transactions to the BSBDA customers, the report prepared by Ashish Das, Professor of Statistics said.

Levying of charges on BSBDA is guided by September 2013 RBI guidelines. As per the direction these account holders are 'allowed more than four withdrawals' in a month, at the bank's discretion provided the bank does not charge for the same.

Source : Economic Times

Amid Covid, diversification remains even more elusive for Bandhan Bank

While most commercial banks reported impressive numbers for the second quarter of the current financial year, Bandhan Bank’s Rs 3,009 crore loss came as a surprise to the investors. The record loss was due to a jump in provisioning to Rs 5,578 crore during the quarter, compared to Rs 380 crore during the same quarter of the previous year. Of the Rs 5,580 crore, provisioning for the existing non-performing assets was around Rs 1,500 crore, additional standard asset provisioning of Rs 2,100 crore and Rs 1,030 for restructured assets. 

Source : Business Standard

IDFC First partners up with HPCL to facilitate fuel payments using FASTag

IDFC First Bank has partnered Hindustan Petroleum Corporation Ltd (HPCL) to facilitate fuel payments at their retail outlets using the bank’s FASTags. In addition, IDFC First Bank’s FASTags can now also be bought, recharged and replaced by passenger vehicle users at select HPCL retail outlets.

This tie-up makes the purchase and use of tags convenient for about five million motorists, it said in a statement. “As a digital-first bank, our effort is to make all transit-related payments simpler. IDFC First Bank has issued close to five million FASTags and these tags are used actively by motorists across toll plazas with transactions averaging two million a day," said B Madhivanan, chief operating officer, IDFC First Bank.

The company said motorists will now have the convenience of a single form factor and single balance for payments related to road travel in the form of FASTag.

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So far, FASTags have only been used to pay for toll charges. Last year, IDFC First Bank was the first to introduce fuel payments using FASTag balances for commercial vehicles users at HPCL retail outlets. Now, it is being extended to personal vehicle users as well.

“We were the first to introduce FASTag based fueling at HPCL retail outlets in the last financial year, by way of acceptance of IDFC First Bank FASTags through our fleet loyalty program“DriveTrack Plus”. We are now introducing payment through IDFC BANK FASTag on “HP Pay” mobile app. We are also starting a FASTag marketing arrangement with IDFC FIRST Bank at select retail outlets, which is also the first of its kind,” Sai Kumar Suri, ED-Retail of HPCL said, in a statement.

The FASTag program was jointly launched by the National Highway Authority of India (NHAI), Indian Highways Management Company Ltd (IHMCL) and National Payments Corporation of India (NPCI) as a medium to accept toll fare across all National Highway plazas. Banks act as issuers and acquirers in this ecosystem which processes close to seven million transactions a day.

Bombay High Court discharges DHFL in DHFL-Yes Bank case

The Bombay High Court has discharged Dewan Housing Finance Corporation Limited (DHFL) in the case involving its promoters Kapil and Dheeraj Wadhawan, and Yes Bank founder Rana Kapoor.

The order was passed in a writ petition filed by DHFL seeking discharge, or in the alternative, dropping of proceedings against it. Advocates Hiten Venegaokar, Ninad More and Siddhant Rai appeared for the CBI and strongly opposed this request. They said that the order of the National Company Law Tribunal (NCLT) approving the Corporate Insolvency Resolution Process (CIRP) was under challenge before the National Company Law Appellate Tribunal (NCLAT).

Senior Advocate Ravi Kadam with Advocates Karan Kadam, Vivek Shetty, Amey Mirajkar, Nishant Upadhyay and Ayush Chaddha appearing for DHFL stated that it had already undergone CIRP under the Insolvency and Bankruptcy Code (IBC) before the NCLT-Mumbai. Senior Advocate Aabad Ponda with Advocate Chitra Rentala, briefed by Trilegal, appeared for Piramal Capital and Housing Finance, which had emerged as the successful Resolution Applicant through CIRP, also moved the High Court.

Advocates Pranav Badheka, Rohan Dakshini, Pooja Kothari and Urvi Gupte, instructed by Rashmikant & Partners, appeared for Kapil Wadhawan who had filed an intervention. Wadhwan was opposing the plea filed by DHFL and seeking discharge in the CBI case himself. Wadhawan had argued that since the “correctness” of NCLT order was challenged before the NCLAT, till the time the appeals are not disposed of, the NCLT order had not attained finality.

Justice S K Shinde, while dictating the order, observed that the facts of the case as brought out by DHFL, in particular subsequent events, have indisputably established change in its management, which has hardly been disputed by Wadhawan. It was noted that the subsequent events like appointing additional directors on the DHFL board had already taken place and those were placed on record before the CBI Court.

These subsequent events caused a change in management and control of the corporate debtor, Justice Shinde observed. The court concluded that the immunities sought by DHFL, though conditional, could be granted. DHFL also pointed out that the conditions had been fulfilled and satisfied.

According to the CBI, Yes Bank had invested Rs 3700 crore in short-term debentures of DHFL for which DHFL had given kickbacks worth Rs 600 crore to Rana Kapoor and family.

BoM opens 2,000th branch at Tirumala

Bank of Maharashtra (BoM) on Thursday opened its 2,000th branch at the temple town of Tirumala in Andhra Pradesh.

Hemant Tamta, Executive Director, BoM, said the milestone branch at the hill town will extend new-age banking convenience to a diverse customer base.

BoM’s branch in Tirumala, where the shrine of Sri Venkateswara Swamy is located, was inaugurated by AV Dharma Reddy, Additional Executive Officer, Tirupati Tirumala Devasthanams (TTD).

Source: thehindubusinessline

CBI arrests 2 officials of Ratnakar Bank in bribery case of Rs 30 lakh

Central Bureau of Investigation on Friday arrested the two officials from Ratnakar Bank for alleged bribery of Rs 30 lakh in the valuation of a property, an official said.

The arrested officials include a regional head and a recovery head of The Ratnakar Bank from Ahmedabad and Pune respectively.

According to PTI, the arrested were Nimesh Manager, Regional Head, Agro Division, Ratnakar Bank Ltd., Ahmedabad, and Saurabh Bhasin, Recovery Head, Pune, they said.

The alleged officials demanded Rs. 1 crore of bribe for the same. PTI added, “It was further alleged that the complainant along with his 12 family members applied for Agri term loan under the Development of Commercial Horticulture through Production and Post Harvest Management of Horticulture Scheme of National Horticulture Board, in which government gives subsidy at 50 percent of the total project cost limited to Rs 56 Lakh for each project,” CBI Spokesperson R C Joshi said.

Source: psuconnect.in

Banks need to adopt partnership model, reach out to customers: PM Modi

Prime Minister Narendra Modi on November 18 said banks need to adopt a partnership model and proactively reach out to customers.

Modi was addressing a conference on "Creating Synergies for Seamless Credit Flow and Economic Growth" in New Delhi.

Don’t wait for customers to come to your branch, analyse the requirement of MSMEs/customers and create customized solutions for them, Modi said.

Modi explained that through the partnership model, banks can help enterprises and entrepreneurs grow their businesses. Today the time requires, banks' should also strengthen the country’s balance sheet and be more proactive towards it.

He cited an example of two defense corridors being set-up in Bundelkhand in Uttar Pradesh and Tamil Nadu, banks need to think how they can go out and reach to enterprises in these two areas, he said.

Source: Moneycontrol

Union Bank of India ranks third in PSB reforms

Union Bank of India ranked third amongst 12 PSBs in EASE 4.0 Reforms Index for Q1 FY22, as per the rank list released by Indian Banks’ Association (IBA). The Bank has been actively adopting the reforms initiatives recommended under the EASE Agenda enabling it to retain the overall position of Second Runner Up from the last three consecutive quarters since December 2020.

Union Bank of India also recorded stellar performance under four out of six themes in the Agenda. Union Bank of India has been adjudged winner in the themes ‘Collaborating for synergistic outcomes’ & ‘Governance & outcome-centric HR’ and bagged Runner-Up positions in ‘New age 24x7 Banking’ &‘Tech-enabled ease of Banking’ themes.

Enhanced Access & Service Excellence (EASE) is an initiative by the Department of Financial Services (DFS) as part of the PSB Reforms Agenda and is currently under its fourth iteration which focuses on Collaborative Banking and the Digital Transformation of the PSBs.

Source : Livemint

Punjab National Bank raises Rs 1,919 crore via bonds

State-owned Punjab National Bank on Thursday said it has raised Rs 1,919 crore by issuing Basel compliant bonds. The bank has issued and allotted Basel III compliant tier-II bonds at a coupon of 7.10 per cent per annum aggregating to Rs 1,919 crore on a private placement basis, it said in a BSE filing.

Source: Economic Times

RBI committee suggests reining in digital loan apps

A committee set up by the central bank in January has suggested reining in digital loan apps through a mix of regulations, including setting up of a nodal agency to verify their credentials and legislative measures to prevent “illegal lending".

The thrust of the report is on enhancing customer protection and making the digital lending ecosystem safe while encouraging innovation. The Reserve Bank of India (RBI) had constituted a Working Group (WG) on digital lending including lending through online platforms and mobile apps headed by its executive director Jayant Kumar Dash.

The committee has suggested that a nodal agency be set up which will primarily verify the technological credentials of digital lending applications of balance sheet lenders and lending service providers (LSPs). It will also maintain a public register of the verified apps on its website.

As per the findings of the committee, there were approximately 1,100 lending apps available for Indian Android users across over 80 application stores between 1 January and 28 February. Of these, 600 are illegal, the panel found.

Another recommendation is to restrict balance sheet lending through digital lending apps to entities regulated and authorized by RBI or entities registered under any other law for specifically undertaking lending business.

 “(The) central government may consider bringing in a legislation to prevent illegal lending activities by introducing the Banning of Unregulated Lending Activities Act," it said.

By constituting the committee, RBI had indicated its intent to look into the practices followed by the lending apps, even those that do not have a regulated entity like a non-bank financier linked to it. The covid-19 pandemic pushed people to the brink, forcing them to opt for quick loans at the click of a button from lending apps. However, when borrowers were unable to repay these loans, along with a back-breaking interest rate, these companies resorted to coercive recovery tactics.

The panel also recommended that a self-regulatory organisation (SRO) should be constituted covering the participants in the digital lending ecosystem. That apart, it suggested that all loan servicing and repayments should be executed directly in a bank account of the balance sheet lender and disbursements should always be made into the bank account of the borrower.

With regard to technology, the panel suggested that compliance with the prescribed baseline technology standards should be a precondition to offer digital lending. Each digital lending app should have publicly available policies regarding data storage, its usage and privacy; and data should be stored in servers in India.

 “Data should be collected from the borrower or prospective borrower with prior information on the purpose, usage and implication of such data and with explicit consent of the borrower in an auditable way," it said.

When it comes to most of the lending apps, RBI lacks in regulatory powers since these companies are not registered as non-banking financial companies (NBFCs). The report of this committee also pointed out that supervisory enforcement has been made difficult by several factors. A majority of digital lending apps were neither regulated nor related to any regulated entity. That apart, non-bank lenders linked to certain apps were smaller ones, subject to light-touch supervision.

The committee said that the recommendations seek to protect the integrity of the system against entities that are not regulated and not authorized to carry out lending business. The onus of subjecting third-party lending service providers to a standard protocol of business conduct would lie with the regulated entities to whom they are attached.

The central bank on Thursday published the report on its website and sought comments from stakeholders and members of the public by 31 December through email.

Source; Livemint

Paytm shares list at a discount. Should you sell, hold or accumulate?

Paytm share price listed today at discount of 9% at ₹1950 on NSE against its IPO issue price of ₹2,150 per equity share. The three-day initial public offering (IPO) of Paytm's parent One97 Communications was launched on November 1 that concluded on November 3 with a price band of ₹2,080-2,150 per share.

Stock market experts' advise to investors who got Paytm shares through allotment is to exit on bounce back maintaining stop loss below ₹1720 per share levels. They said that those who want to add fintech stock in their portfolio are advised to look at other option.

Speaking on Paytm share listing, Parth Nyati, Founder at Tradingo said, "The company has been loss-making and there is no sign to turn profitable in near future. Aggressive investors who got the allotment can hold the stock with a long-term view however the investors who applied for listing gain can exit on the bounce back. New investors are advised to look for other opportunities where other new edge companies can perform much better than Paytm. We feel due to the brand the company sought high valuation and it might see a correction in the near term."

Incorporated in 2000, One97 Communications is India's leading digital ecosystem for consumers and merchants. It offers a range of services to the users - payment services and financial services.

Advising investors to look at other options in fintech segment, Santosh Meena, Head of Research at Swastika Investmart Ltd said, "I would suggest only aggressive investors hold this stock for the long term amid uncertainty where I believe Bajaj Finserv is a much better option to play on Fintech businesses because Bajaj Finserv has a proven track record with great comfort of valuations compared to Paytm. Those who played for listing gain should keep a stop loss below ₹1720, which is 20 per cent lower than the issue price."

Meanwhile, brokerage firm Macquarie Research has initiated an underperform rating on Paytm owner One97 Communications ahead of its listing on Thursday, saying its business model lacks focus and direction. It has reduced its target price to ₹1,200 a share, down 40% from its issue price of ₹2,150.

Source : Livemint

RBI withdraws 100 redundant circulars following recommendations from RRA

The Reserve Bank of India (RBI) has withdrawn more than 100 redundant circulars following recommendations made by the Regulations Review Authority.

The redundant circulars withdrawn relate to certain norms concerning Foreign Investment in India by Foreign Portfolio Investors, RTGS, Know Your Customer (KYC), and Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) – Standards.

The Regulations Review Authority (RRA 2.0) was set up by the Reserve Bank of India (RBI) in April this year.

The objective of RRA 2.0 is to review the regulatory instructions, removing redundant and duplicate instructions, reduce the compliance burden on regulated entities (REs) by streamlining reporting structure, revoking obsolete instructions and wherever possible obviating paper-based submission of returns.

RRA has been engaging in extensive consultations with both – internal as well as external stakeholders, on review of the regulatory and supervisory instructions for their simplification and ease of implementation.

The RRA has also constituted an Advisory Group representing the regulated entities under the chairmanship of Swaminathan J, Managing Director of State Bank of India.

"The RRA has been engaging in extensive consultations with both – internal as well as external stakeholders, on review of the regulatory and supervisory instructions for their simplification and ease of implementation.

"Based on these consultations and the suggestions of the Advisory Group, the RRA has recommended withdrawal of 150 circulars in the first tranche of recommendations," the RBI said.

Source: Livemint