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.