Small Finance Banking

Step will 'further deepen financial inclusion and enhance formal credit', says central bank

RBI allows Small Finance Banks to offer pre-sanctioned credit lines via UPI, aiming to boost financial inclusion for underserved communities, including small businesses and micro-entrepreneurs

Industry leaders at the Business Standard BFSI Insight Summit discussed the growth potential of small finance banks and their possible evolution into universal banks to expand their public appeal

Partha Pratim Sengupta assumed charge as new MD&CEO of private lender Bandhan Bank with effect from Friday, the lender said. Ratan Kumar Kesh, who appointed as interim MD&CEO of Bandhan Bank after retirement of its founder Chandra Sekhar Ghosh, will resume his role as executive director and chief operating officer, with the joining of Sengupta. The Reserve Bank of India (RBI) had approved Sengupta's appointment as MD&CEO of Bandhan Bank and asked him to join by November 10 for a tenure of three years. Starting his career with the State Bank of India, Sengupta rose to the position of deputy managing director (DMD) of the country's largest lender, followed by his stint as MD& CEO of another state-owned lender Indian Overseas Bank from 2020 to 2022. Chairman of Bandhan Bank Anup Kumar Sinha said in the statement that "his (Sengupta's) proven track record in the industry will be instrumental in steering Bandhan Bank into its next growth phase." Sengupta said, "I am ...

The merger process was completed over one year after the bank received a no-objection certificate from the Reserve Bank of India

The profitability of small finance banks, measured in terms of return of assets (RoA), will moderate around 40 basis points to about 1.7 per cent this fiscal from 2.1 per cent in last financial year due to lower net interest margins (NIM) and higher credit costs, said a report. That said, RoA for small finance banks (SFBs) will still be higher than that for the overall banking system by 50-60 bps on account of the relatively higher yielding nature of their loan book, Crisil said in the report. Last month, Reserve Bank Deputy Governor Swaminathan J had asked SFBs to be vigilant and ensure that risks are mitigated in time. He also highlighted the importance of sustainable business models. He underscored the need to strengthen cybersecurity to safeguard against digital threats. The report said NIM for SFBs is expected to contract 15 bps as they continue diversifying to secured asset classes, which have relatively lower yields. Credit cost, meanwhile, may rise to about 40 bps because

Fino Payments Bank surged 8 per cent on the BSE to hit an over two-year high of Rs 449.95 in Thursday's intra-day trade.

Small Finance Banks' (SFBs) loan growth will moderate to 25-27 per cent in FY25 against 28 per cent in FY24, a domestic rating agency said on Monday. Crisil Ratings said though a tad lower, the advances growth will be robust and driven by factors like segmental and geographical expansion by the entities. While capital buffers remain healthy, SFBs will face challenges in mobilising deposits and their costs and will explore alternative, non-deposit avenues to fund credit growth, the agency said. The asset growth will be driven by traditional microlending being the most popular and new ones like mortgages, small businesses or even unsecured loans. "Credit growth in new asset classes is seen at 40 per cent this fiscal, while that in traditional segments will be 20 per cent," its senior director Ajit Velonie said. He added that the share of new asset classes will cross 40 per cent by the end of March 2025 on the back of the faster growth and underlined that most of the asset ...

Realty firm DLF's rental arm DCCDL has posted an 11 per cent annual increase in office rental income to Rs 942 crore during the first quarter of this fiscal on better demand for its premium workspace. DLF Cyber City Developers Ltd (DCCDL) is a joint venture between DLF and Singapore sovereign wealth fund GIC. DLF holds a 66.67 per cent stake, while the GIC has a 33.33 per cent stake in DCCDL. According to the latest investor presentation, DCCDL's rental income from office buildings rose to Rs 942 crore during the April-June period of the current fiscal from Rs 851 crore in the year-ago period. The rental income from retail real estate space grew 9 per cent to Rs 210 crore in the first quarter of this fiscal from Rs 192 crore a year ago. On the commercial real estate segment, DLF said it has achieved "double-digit rental growth through organic growth and new developments". "Significant increase in retail presence; portfolio to grow to 2 times in the next 4-5 years," it added. DLF

Private equity firm WestBridge Capital divested on Wednesday a 1.7 per cent stake in the AU Small Finance Bank for Rs 845 crore through an open market transaction. WestBridge Capital, through its affiliate Westbridge AIF I, sold shares of the Jaipur-based AU Small Finance Bank through a bulk deal on the National Stock Exchange (NSE). As per data available, Westbridge AIF I offloaded 1.30 crore shares, amounting to a 1.75 per cent stake in AU Small Finance Bank. The shares were disposed of at an average price of Rs 650.08 apiece, taking the transaction value to Rs 845.10 crore. After the stake sale, the shareholding of WestBridge Capital in the AU Small Finance Bank has declined to 2.07 per cent from 3.82 per cent. Meanwhile, Goldman Sachs Investments Mauritius I picked up 43.34 lakh shares of the AU Small Finance Bank at an average price of Rs 650 per piece. This took the deal value to Rs 281.71 crore. Details of other buyers of the AU Small Finance Bank shares could not be ...

Capital SFB is not yet eligible to apply for a conversion to a universal bank because of net non-performing ratio

The limit for bulk deposits was increased in 2019 for SCBs and SFBs as "single rupee term deposits of Rs 2 crore and above" from Rs 1 crore

The fear of rejection is real. Many of the SFBs are listed on the exchanges. They are aware that no new universal bank licence has been granted in the last 10 years

So far, the bank has merged 18 small co-operative banks into itself

Ramachandran says it is at least two years before the lender considers becoming a universal bank

Third CEO in five years; current CEO Davis to be relieved early

The central bank has laid down qualitative criteria of a satisfactory five-year track record, which will be evaluated post-application made by SFBs

AU Small Finance Bank has recorded profits for the previous two fiscal years, and maintained gross and net non-performing assets below 3% and 1%, respectively, as mandated by the RBI

SFBs will remain in focus in Monday's trade after the RBI issued guidelines for their conversion into universal banks

The numbers are not strictly comparable as Fincare SFB was merged with AU SFB in the Jan-March quarter