30.06.2023 : Today's Banking / Financial News at a Glance
Impairments in credit card receivables up in FY23: RBI report : While the overall asset quality for banks has broadly improved during FY23, impairments in credit card receivables have increased, according to the Reserve Bank of India’s (RBI) Financial Stability Report. “While there has been an overall improvement in asset quality in respect of personal loans, impairments in the credit card receivables segment have risen marginally,” the report said, with data showing the highest increase for public sector (PSU) banks. The gross NPA (non-performing assets) ratio of credit card receivables for PSU banks rose to 18 per cent as of March 2023, from around 10 per cent a year ago. In comparison, the gross NPA ratio for private banks was largely stable at 1.9 per cent and for foreign banks at 1.8 per cent against the year-ago period. The gross NPA ratio for commercial banks stood at 2.0 per cent, also largely unchanged from the previous year. - Business Line.
Kotak Bank integrates Rupay Credit Cards with UPI : Kotak Mahindra Bank, in collaboration with National Payments Corporation of India (NPCI), has introduced the facility of linking its RuPay Credit Card to UPI (Unified Payments Interface) apps. Customers are no longer needed to carry their physical credit card. Customers of Kotak Mahindra Bank can transact through UPI apps like Google Pay, PhonePay, and Paytm, following the linkage. They can choose from seven RuPay credit cards and scan QR codes or initiate transaction on POS (Point of Sale) through out the country. - Business Line
Share of large borrowers in gross advances declines for the third successive year: Report : The share of large borrowers in gross advances of scheduled commercial banks (SCBs) declined successively over the past three years, even as retail loans grew faster than borrowings by corporates, according to the Financial Stability Report. The share of large borrowers in SCBs gross advances reduced from 51.1 per cent in March 2020 to 46.4 per cent in March 2023.A large borrower is defined as an entity having aggregate fund-based and non-fund-based exposure of ₹ five crore and above.- Business Line
Jana SFB raises emergency capital at discount to earlier rounds : Jana Small Finance Bank has raised ₹560 crore of capital from a clutch of investors such as Ashish Kacholia, Amansa Holdings, and Enam Holdings. The capital raise was important to salvage the bank’s capital adequacy. According to sources, for the purpose of the fund raise, the bank’s pre money value was considered at ₹1,700 crore. Its FY23 net worth stood at ₹1,504 crore. Extending the Q4 FY23 profitability run-rate, the pre-deal net worth would be around ₹1,600 crore. At these valuations, capital has been raised at a marginal premium to book value, echoing the current sentiments for small finance banks. - Business Line.
Lenders approve Hinduja Group’s ₹9,661-crore resolution plan for RCap : The committee of creditors (CoC) of Reliance Capital has approved the resolution plan put forth by IndusInd International Holding, with 99 per cent lenders voting in favour of the plan, sources told businessline. Hinduja Group had submitted a bid of ₹9,661 crore, all of which will be paid as upfront cash to acquire Reliance Capital and its subsidiaries. This will be in addition to the cash reserve of about ₹400 crore that RCap has generated by way of loan recoveries, among other avenues, a source said. Accordingly, lenders of RCap will receive about ₹10,000 crore against principal outstanding dues of ₹16,000 crore, translating to a recovery of around 65 per cent. Voting on the resolution plan began on June 9 and concluded on Thursday. The plan will now be submitted for approval of the National Company Law Tribunal (NCLT) in 7-10 days, they added. The deadline to file the final resolution plan with NCLT is July 15. Business Line.
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