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Small sav­ings in­ter­est rates hiked

The govern­ment has hiked in­ter­est rates on small sav­ings schemes in a sig­nal to banks to raise sav­ings de­posit rates after two con­sec­u­tive in­ter­est rate hikes by the RBI. Ac­cord­ing to a Fi­nance Min­istry's state­ment an­nounc­ing the new small sav­ings in­ter­est rates, Pub­lic Prov­i­dent Fund (PPF) will now fetch 8 per cent in­ter­est rate for the Oc­to­ber-De­cem­ber quar­ter, up from 7.6 per cent in the July-Septem­ber quar­ter. The in­ter­est rates on small sav­ings schemes, which are bench­marked to yields on govern­ment bonds, are re­vised on a quar­terly ba­sis. With the 10-year bench­mark yield now above 8 per cent, many an­a­lysts had ex­pected the govern­ment to hike in­ter­est rates on small sav­ings schemes.

ICICI drags Jaiprakash to bank­ruptcy court

ICICI Bank has filed a bank­ruptcy pe­ti­tion against debt-rid­den Jaiprakash As­so­ci­ates with the Al­la­habad bench of the Na­tional Com­pany Law Tri­bunal (NCLT). The pe­ti­tion, un­der Sec­tion 7 of the In­sol­vency and Bank­ruptcy Code, will for­mally ini­ti­ate in­sol­vency pro­ceed­ings against the com­pany. ICICI Bank is the lead lender in the con­sor­tium. Jaiprakash As­so­ci­ates, which is into con­struc­tion, real es­tate and ce­ment busi­nesses, is un­der­stood to owe it close to Rs 1,500 crore. The move comes nearly a year after the RBI had come out with a sec­ond list of close to 30 com­pa­nies to be taken to the NCLT. Jaiprakash As­so­ci­ates had fea­tured on the list.

Mega merger of BoB, Dena, Vi­jaya Bank

The govern­ment's de­ci­sion to merge three banks it owns - Bank of Bar­oda (BoB), Dena Bank and Vi­jaya Bank - is ex­pected to re­duce the amount of cap­i­tal it needs to pump into these lenders and help clean up their bal­ance sheets. The merged en­tity, com­pris­ing two rel­a­tively-stronger banks and a weak one, will be the third-largest lender in In­dia after State Bank of In­dia (SBI) and HDFC Bank, with a to­tal busi­ness of more than Rs 14,82,000 crore. The re­cent merger pro­posal fol­lows the ear­lier one of SBI and its five as­so­ciate banks. That merger had re­sulted in a sharp jump in the com­bined en­tity's bad loans port­fo­lio, crimp­ing its profit.

NBFC for food pro­cess­ing on the cards

The Min­istry of Food Pro­cess­ing In­dus­tries is cre­at­ing a fi­nan­cial

in­sti­tu­tion that will cater ex­clu­sively to the credit needs of the food pro­cess­ing sec­tor. "We are in the process of cre­at­ing a new fi­nan­cial in­sti­tu­tion that will pro­vide loans ex­clu­sively to fund food pro­cess­ing projects. This is an un­prece­dented ini­tia­tive to cre­ate a fi­nan­cial in­sti­tu­tion that will com­pletely fo­cus on

pro­vid­ing credit to agro­pro­cess­ing en­ter­prises. This will be driven by the pri­vate sec­tor. There is keen in­ter­est among both na­tional and in­ter­na­tional com­pa­nies for the same," Min­is­ter of Food Pro­cess­ing Har­sim­rat Kaur Badal had said re­cently. The govern­ment is likely to hold a mi­nor­ity stake in this NBFC.

HDFC Bank sends sum­mons via What­sApp

HDFC Bank has sent nearly 250 sum­mons through e-mail and What­sApp to cus­tomers, who evade com­pli­ance, and hopes to set­tle cases faster by adopt­ing the newer meth­ods of com­mu­ni­ca­tion. The bank has been adopt­ing this method after a Supreme Court-ap­pointed am­i­cus cu­riae rec­om­mended clo­sure of pro­ceed­ings in all cheque bounce cases through dig­i­tal means. The of­fence falls un­der Sec­tion 138 of the Ne­go­tiable In­stru­ments Act, which de­fines and amends the law re­lat­ing to prom­is­sory notes, bills of ex­change and cheques. The bank has sent the sum­mons through dig­i­tal means so far and hopes to set­tle the cases fall­ing un­der the Act in a speedy man­ner.

NABARD loans for 93 ir­ri­ga­tion projects

Na­tional Bank for Agri­cul­ture and Ru­ral De­vel­op­ment (NABARD) has ap­proved Rs 65,634.93 crore of loans so far to 93 pri­ori­tised ir­ri­ga­tion projects un­der the govern­ment's flag­ship scheme Prad­han Mantri Kr­ishi Sin­chai Yo­jana (PMKSY). NABARD is fund­ing the Cen­tre's and the States' share of 99 pri­ori­tised ir­ri­ga­tion projects un­der the PMKSY through a long-term ir­ri­ga­tion fund. It is man­dated to pro­vide Rs 70,000 crore of loans to these projects to be com­pleted by 2019. NABARD has so far sanc­tioned Rs 65,634.93 crore for 93 pri­ori­tised ir­ri­ga­tion projects out of 99. It has also dis­bursed Rs 23,402.72 crore for 86 projects.

RBI cuts short Rana Kapoor's ten­ure

Yes Bank CEO and MD Rana Kapoor will con­tinue at the helm of the bank un­til Jan­uary 31, 2019. The RBI has re­duced his ten­ure even as share­hold­ers sought an ex­ten­sion for three years. Yes Bank has been un­der the reg­u­la­tor's lens after it re­ported di­ver­gences in clas­si­fi­ca­tion of NPAs as com­pared to the as­sess­ment by the RBI. On Au­gust 30, the bank had re­ceived the RBI's ap­proval for con­tin­u­ance of Mr Kapoor as MD and CEO of the bank "till fur­ther no­tice". The RBI had ear­lier de­nied a three-year ex­ten­sion to Axis Bank CEO Shikha Sharma de­spite the board and share­hold­ers back­ing her reap­point­ment.

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