20.01.2023: Today's Banking / Financial News at a Glance

???PNB launches credit card against fixed deposit : State-owned Punjab National Bank (PNB) offers credit cards against Fixed Deposit to customers who don’t meet the eligibility criteria for regular credit cards. “Having an FD just got cool. Get lounge access, exciting reward points, cash advance and much more with Credit Card against Fixed Deposits!," the PSU tweeted. PNB becomes the first public sector bank to launch credit card against fixed deposits digitally. Get your RuPay or VISA credit card digitally against single or multiple FDs with 80% credit limit, the lender said. - Live Mint

???AU Small Finance Bank Q3 PAT highest ever at ?393 crore, up 30% YoY : AU Small Finance Bank posted a 30 per cent rise in its Q3 profit after tax to Rs 393 crore—the highest ever quarterly profit. Sequentially, the net profit was 15 per cent higher. Gross advances grew by 38.4 per cent on a low base to ?56,335 crore as of December 31, of which 90 per cent were retail loans and 93 per cent of the loans were secured. “Despite the challenging environment around inflation and liquidity, we were able to maintain margins, deliver growth in loan market share, improve asset quality, and focus on productivity while achieving our highest ever quarterly profits,” said MD and CEO Sanjay Agarwal. Net interest income (NII) for the quarter was up 41 per cent YoY and 6 per cent QoQ at ?1,153 crore. The net interest margin (NIM) for the quarter was 6.2 per cent. - Business Line

???HDFC planning to raise funds by issuing commercial papers maturing in 1 mth :?India's Housing Development Finance Corp plans to raise funds by issuing commercial papers maturing in one year, three merchant bankers said on Thursday. The non-banking finance company will offer a yield of 7.88% on this issue, and has received commitments worth 6.50 billion rupees ($79.89 million) so far, they said. The notes are rated A1+ by CRISIL. - Business Standard

???Asset quality of Indian banks will be stable in 2023, says Moody's : The asset quality of Indian banks and those in Southeast Asian countries will be stable in 2023, said Moody's Investors Service in its latest report on the banking sector in emerging markets. Indian banks will benefit from a stable operating environment and significant improvements in their solvency metrics, the report notes. According to Moody's, the rising interest rates amid high inflation will lead to gradual increases in margins, supporting banks' revenue. On the other hand, higher debt-servicing costs and slowing economic growth pose asset risks for banks, although they are well positioned to cope with potential growth in problem loans thanks to prudent underwriting standards and ample reserves. Inflation rates will fall but remain high in 2023 while economic slowdown is likely to be moderate, the report notes. - Business Standard

???British banks in India may get breathing space with new amendment : British banks in India, caught in a regulatory wrangle, may get a breathing space with a new amendment proposed in UK’s financial market regulations. A Bill has been moved to let the Bank of England (BoE) give more time to crucial market infrastructure institutions (MIIs) outside the UK --- like the Clearing Corporation of India (CCIL) ---- to come under a new regime.?Under the present circumstances, British banks in India are required to end their relationship with CCIL --- a central counterparty for government bonds, money market and foreign currency and interest rate derivatives --- by June 30, 2023. If the Bill receives the royal assent in the next few months, the deadline would be pushed back to December 2025, by which time CCIL would have to apply to BoE and the latter can negotiate the terms of supervision with the Reserve Bank of India (RBI). - economic times

???Japanese banks get go-ahead to settle all trades via CCIL : In a development that could put pressure on the European Securities and Markets Authority (ESMA) to soften its stand against India, Japanese banks are learnt to have received the go-ahead from their home country's regulator to deal with Clearing Corporation of India (CCIL) for settling all transactions. CCIL has been derecognised by some of the overseas regulators such as ESMA and Bank of England (BoE). For the first time, Japanese banks will cut interest rate derivative deals - which constitute a sizable part of a bank's treasury operations for hedging risks from interest rate movements - with CCIL as the central counterparty (CCP). - economic times

???PhonePe raises $350 million at $12 billion valuation : Walmart-owned fintech major PhonePe has raised $350 million in funding from General Atlantic at a pre-money valuation of $12 billion along with participation from other global and Indian investors.?This investment marks the first tranche of up to $1 billion ongoing funding round that started in January 2023. The fundraise follows PhonePe’s recently announced change of domicile to India and full separation from Flipkart. PhonePe plans to deploy the new funds in infrastructure, which includes the development of data centers and help build financial services offerings at scale in the country. The company also plans to invest in new businesses, including insurance, wealth management, and lending.?- Business Line

???Fintech start-ups in India saw their funding drop by 49% in 2022 : Fintech start-ups in India raised a total of $5.65 billion in 390 rounds in 2022, a drop of 47 per cent in terms of funding amount and 29 per cent drop in the number of rounds, as compared to 2021, according to data provider Tracxn.??India is still the third-highest funded country in terms of funding received in the fintech sector, only behind the US and the UK.?This drop in funding can be attributed to the decline in late-stage funding from $8.3 billion in 2021 to $3.7 billion in 2022, which is a 56 per cent drop. Growing inflation and macroeconomic tensions have made the investors step back from making big investment decisions. However, fintech has consistently been one of the top-funded sectors.?It was the second-highest funded sector in 2022, after enterprise applications.?- Business Line

???ESAF Bank bags Inclusive Finance India Award 2022 : ESAF Small Finance Bank has bagged the prestigious Inclusive Finance India Awards 2022 for its contributions in advancing the goal of financial inclusion and supporting inclusive growth. K. Paul Thomas, MD and CEO, ESAF Bank, received the award from Anantha Nageshwaran, Chief Economic Advisor at the 19th Inclusive Finance India Summit held in New Delhi.?The Inclusive Finance India Awards is an initiative of ACCESS Development Services constituted in 2009 in partnership with HSBC India. “This valued recognition is a great encouragement for us to reach out to more deserving people who are still out of the banking purview in our country. ESAF Bank has successfully fostered a culture of financial discipline and also encouraged those people, especially women, to become financially stable in the unbanked and underbanked regions of the country,” Paul Thomas said. - Business Line

???RCap case: Torrent cites CoC minutes to show Hinduja’s revised bid was deficient : Torrent Investments, at the NCLT hearing on Thursday, argued that the minutes of the CoC (committee of creditors) meetings from December 23 reflect that the CoC had recorded that the revised bid submitted by Hinduja Group was non-compliant. Darius Khambata, on behalf of Torrent, said that the minutes show that the administrator had recorded that Hinduja’s revised bid was deficient and that it would be unfair to Torrent to give Hinduja another chance to bid. As such, no observation was made regarding Torrent’s bid being non-compliant, he said, adding that the same is a new argument now being used by the CoC. - Business Line

???Macroeconomic stability getting further entrenched: RBI monthly bulletin : Macroeconomic stability is getting further entrenched with inflation being brought into the tolerance band and lead indicators suggesting that the current account deficit is on course to narrow through the rest of 2022 and 2023, according to an article in RBI’s latest monthly bulletin. Recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band (of 4 per cent +/- 2 per cent), said RBI officials in the article “State of the Economy”. The objective during 2023 is to tether inflation therein so that it aligns with the target by 2024 – the second milestone, they added. - Business Line

???India govt switches bonds maturing in 2024 with RBI in cash-neutral deal : The Indian government bought back bonds maturing in 2024 from the Reserve Bank of India on Tuesday, while also issuing bonds maturing in 2032 worth a similar quantum, the central bank said on Wednesday. "The transaction involved buying back a security maturing in FY2024/25 from the Reserve Bank and issuing fresh security for equivalent market value, to make the transaction cash neutral," the RBI said in a press release. The government bought back 6.18% bonds maturing in 2024 worth 226.10 billion rupees ($2.78 billion) at a price of 98.62 rupees while it issued 8.28% 2032 bonds worth 210.26 billion rupees to the RBI at 106.05 rupees, the release showed. - Business Standard

???Taxmen probe rich Indians for having foreign policies without approval : Several wealthy Indians have either purchased or have become nominees in foreign life insurance policies without the approval of the Reserve Bank of India, The Economic Times reported Thursday. Tax officials are now asking these rich Indians to expalin why their names have figured in these insurance policies that run into millions of dollars. The report, citing two people familiar with the development, said summons have been issued under section 131 of the Income Tax Act, which allows tax authorities to conduct enquiries. One tax official said the enquiries are based on specific inputs. The assesses have been asked to explain why they did not disclose the information in foreign assets (FA) schedule of the I-T returns. - Business Standard

???Sensex, Nifty end lower as consumer, metals decline : Consumer and metal stocks dragged equity benchmarks lower on Thursday after two straight sessions of gains, as weak US economic data stoked recession fears in global markets.?The Nifty 50 index was down 0.32 per cent at 18,107.85 at close, while the S&P BSE Sensex declined 0.31 per cent to 60,858.43. - Busienss Line

???Rupee falls 7 paise to close at 81.37 against US dollar : The rupee settled 7 paise lower at 81.37 (provisional) against the US dollar on Thursday, weighed down by a muted trend in domestic equities and foreign fund outflows. At the interbank foreign exchange market, the rupee opened at 81.45 against the greenback and finally settled at 81.37, down 7 paise over its previous close.?During the session, the rupee also touched an intraday high of 81.27 against the American currency. In the previous session, on Wednesday, the rupee had settled at 81.30 against the US dollar. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.21 per cent lower at 102.14. Global oil benchmark, Brent crude futures, declined 0.94 per cent to $84.18 per barrel. - Business Line

Shared by #NileshRoy on #20January2023 from #Mumbai (#India )