Page 2 - Credit

SSY: Invest for its high and tax-free return with zero credit risk

Only parents of a girl child who do not mind the long lock-in should go for it

China's top banks tighten exposure to smaller peers to curb credit risk

The two state-owned banks have decided to reduce interbank lending limits and set shorter maturity periods for smaller peers deemed high risk, said two of the sources

Customers' complaints against credit information companies increasing: RBI

The Reserve Bank on Tuesday said there has been a rise in customer complaints against credit information companies (CICs). The central bank has also found "some concerns" on the conduct of CICs in its supervisory assessment, an official statement said without specifying the concerns. The statement, released after a meeting between Deputy Governor Swaminathan J and managing directors and chief executives of CICs earlier in the day, also mentioned the specific areas where CICs need to focus on. "He (Swaminathan) pointed out that, of late, there is a rise in customer complaints related to credit information and some concerns have emerged during Reserve Bank's supervisory assessment," the statement said. The CICs need to redress customer complaints timely, strengthen the internal ombudsman framework, streamline the process for handling data correction requests, strengthen cybersecurity and data privacy through a robust information security governance framework, improve data quality an

LIC in discussion with RBI for access to debt data via CRILIC: Mohanty

Life Insurance Corporation (LIC) chairman Siddhartha Mohanty on Thursday said the state-owned insurer is "in active discussion" with the Reserve Bank of India and confident of getting access to central bank's debt database CRILIC. "It's an irony that despite being the largest debt investor, we don't have access to debt or the national debt database CRILIC. We are in active discussion with the regulator for the same and are confident of getting that access," Mohanty said at an economic conclave organised by SBI here. Central Repository of Information on Large Credits (CRILICS) is an RBI-run database of credit exposures of various lenders including those towards non-performing borrowers. Most of LIC's debt investments are in central as well as state governments' debt securities. The LIC chairman said that not having access to CRILIC data is a risk for the insurer as its liabilities are long-term while assets are short-term. The lack of access to CRILICS tilts the balance negatively

Banking scion Vishal Kampani eyes hiring push to meet dealmaking boom

The Mumbai-listed company is seeking to hire at least seven senior investment bankers in the coming year for sectors such as industrials and digital technology

RBI's ban on Bajaj Finance's eCOM and Insta EMI Card: All you need to know

Bajaj Finance said it is temporarily suspending the sanction and disbursal of new loans under the two products

Hinduja Group in talks with private debt funds to raise around $800 million

India has become a hotbead for private credit activity, in part because regulation forbids local banks from extending loans for mergers and acquisitions

SBI borrowers to get special credits for green initiatives: Chairman

State Bank of India is working out the risk matrix for its borrowers wherein it gives some special credits for those embarking on green initiatives, Chairman Dinesh Khara said here on Monday. Since recently, the nation's largest lender has also been measuring the carbon footprint of its Rs 33-lakh crore portfolio at the account level in an attempt to mitigate climate risks and provide sustainable financing, he said. At the bank level we have started working out the risk matrix of our borrowers wherein we give some special credits to those embarking on green initiatives, the chairman said at a Ficci event here. However, he did not elaborate. Khara, who has been warning against green-washing, also called for better project reports for green financing so that the information asymmetry that plagues the green funding space can be mitigated. He also stressed on the need for a policy framework to promote the awareness on green finance ecosystem. There is a need for the chartered accoun

Future Retail CoC rejects Space Mantra bid, NCLT extends insolvency period

The lenders of Future Retail Ltd have rejected the bid submitted by Space Mantra for the debt-ridden firm, which is currently going through Corporate Insolvency Resolution Process (CIRP). The Resolution Plan submitted by Space Mantra for Future Retail Ltd (FRL), failed to get the required number of votes in the e-voting process of the Committee of creditors (CoC). It was put "for the consideration of the CoC on July 19, 2023... and pursuant to the decision taken by CoC through e-voting, concluded on 30th September 2023 at 9 PM (IST), the resolution plan submitted by Space Mantra Private Limited has not been approved by CoC", FRL said in a regulatory filing on Monday. It further added: "In view of the resolution plan not having been approved by the CoC, the next steps would be taken in accordance with the Insolvency & Bankruptcy Code 2016." Space Mantra was the single bidder for FRL. According to some media reports, Space Mantra had offered around Rs 550 crore, which was very close

Exporters seek govt intervention in providing affordable credit to MSMEs

Exporters have sought the central government's intervention in providing affordable and easy availability of credit to MSMEs amid global headwinds due to lack of liquidity. In a letter to Finance Minister Nirmala Sitharaman, apex exporters' body Federation of Indian Export Organisations (FIEO) requested for the extension of Emergency Credit Linked Guarantee Scheme (ECLGS) till March 31, 2024 and restoration of interest subsidy benefit of 5 per cent to manufacturer MSMEs. It said some of the MSME sectors are affected due to a dip in exports on account of a global demand slowdown. FIEO has urged extending the ECLGS "till March 31, 2024" as it will help micro, small and medium enterprises sail through this difficult time and bounce back when the situation improves. "With interest rates firming up, MSMEs are getting credit at not less than 8-11 per cent. The subvention for the interest equalisation scheme was reduced as interest rates were coming down. However with complete change in .

RBI reviews flow of credit to MSMEs, delibrates on bridging credit gap

The RBI's Standing Advisory Committee (SAC) reviewed the flow of credit to Micro, Small and Medium Enterprises on Friday at its meeting held in Lucknow, a central bank said in a release. The 28th meeting of SAC was chaired by RBI Deputy Governor Swaminathan J, and attended by senior officials from ministries of MSME and finance. "During the meeting, the SAC reviewed the flow of credit to MSMEs and deliberated on issues related to assessing and bridging the credit gap for the sector, exploring digital solutions for improved credit linkage, accelerating adoption of TReDS, credit support to women entrepreneurs, revival and rehabilitation of stressed MSMEs, and credit guarantee schemes, among others," the RBI said. The deputy governor in his keynote address emphasised the significant role of the MSME sector, particularly in the context of the goal of attaining developed economy status by 2047. He stressed the need for collaborative efforts on the part of all stakeholders to unlock the

Bank lending to NBFCs jumps 23.6% in July to Rs 13.8 trillion: Report

Banks' credit exposure to non-banking financial companies rose 23.6 per cent on-year to Rs 13.8 lakh crore in July, pushing up their overall share to 9.3 per cent during the month, an analysis of the RBI's monthly data by a ratings agency showed. The month also saw lower borrowings from international markets due to the prevailing elevated global interest rates following tightening of monetary policies by global central banks, according to a note by Care Edge. There has been a consistent upward trend in bank credit to NBFCs in the second half of FY22, coinciding with the phased reopening of the economy after the pandemic. The growth momentum further accelerated during FY23 and in the first quarter of FY24. However, NBFCs' overall borrowings on a month-on-month basis declined 3.3 per cent, primarily due to the merger of HDFC with its subsidiary HDFC Bank from July 1, Care Edge said. Mutual funds' debt exposure to NBFCs, including Commercial Papers (CPs) and corporate debt, jumped 60.

What more can India do to win over the Big Three sovereign rating agencies?

A high sovereign credit rating can raise a country's star among the global investor community; a low rating, indicating doubts over ability to repay debts, increases its financing costs

Microfinance institutions' profitability to rise to 2.7-3% this fiscal

Lower credit cost on the back of better collections and asset quality, as well as higher pricing of new loans will help standalone microfinance institutions this fiscal to report higher profitability, which is likely to improve to 2.7-3 per cent, says a report. Microfinance Institutions (MFIs) have recouped from the pandemic and have clawed back market share leadership from banks. They closed FY23 with a 40 per cent market share, 600 basis points higher than the previous year while banks saw their share declining to 34 per cent from 40 per cent in FY22. Icra Ratings, in a report on Monday, said MFIs are likely to report a growth of 24-26 per cent in loan sales this fiscal and 23-25 per cent in FY25 when they are also likely to see a further spurt in profitability to 3.2-3.5 per cent. MFIs profitability stood at 2.1 per cent in FY23. Profitability of these institutions is likely to improve to 2.7-3 per cent in FY24 and 3.2-3.5 per cent in FY25. This is expected on the back of an ...

What is RBI's pilot project for facilitating frictionless credit?

The Reserve Bank Innovation Hub, a wholly-owned subsidiary of the central bank, has developed the end-to-end digital platform

RBI to launch 'Public Tech Platform' pilot on Aug 17 to facilitate credit

The Reserve Bank will launch a pilot project for 'Public Tech Platform' that seeks to facilitate credit through seamless flow of required digital information to lenders. During the pilot, the platform would focus on products such as Kisan Credit Card loans of up to Rs 1.6 lakh per borrower, dairy loans, MSME loans (without collateral), personal loans and home loans through participating banks, the central bank said in a statement. The platform would enable linkage with services such as Aadhaar e-KYC, land records from onboarded state governments (Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra), satellite data, PAN validation, Aadhaar e-signing and house/property search data, among others. "Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot," the RBI said, and added the pilot of the platform would commence on August 17, 2023. RBI said with rapid progress in digitalisatio

Credit extended to Videocon caused loss of Rs 1,000 cr to ICICI Bank

The credit facilities sanctioned by the ICICI Bank to the Videocon group turned into non-performing assets (NPAs) of more than Rs 1,000 crore, the CBI has claimed in the charge sheet filed against the bank's former CEO Chanda Kochhar, her husband Deepak Kochhar and Videocon founder Venugopal Dhoot. The over 10,000 pages-long charge sheet was filed recently before a special court for the Central Bureau of Investigation cases here. The Kochhars and Dhoot are now out on bail. After Chanda Kochhar became MD & CEO of ICICI Bank, from May 1, 2009, six 'Rupee Term Loans' (RTLs) were sanctioned to Videocon Group. Between June 2009 to October 2011, RTLs of a total of Rs 1,875 crore were sanctioned to the group by the bank, the charge sheet said. Chanda Kochhar was chairperson of the two-member Committee of Directors which sanctioned RTL of Rs 300 crore in August 2009 to Videocon International Electronics Limited (VIEL). Further, she was a member of the committee of senior managers ...

Aye Finance allocates Rs 100 cr for credit to women micro enterprises

Fintech lender Aye Finance on Wednesday said it has allocated Rs 100 crore for Shakti Loan in current financial year and targets to extend credit to 10,000 women engaged in micro enterprises. Aye said it has developed Shakti Loan in collaboration with CGAP, a global partnership of more than 30 leading development organisations, including the World Bank, UNDP, and Mastercard Foundation, which works to advance the lives of poor people, especially women, through financial inclusion. Incorporated in 2014, Aye is backed by CapitalG, Elevation Capital, Light Rock, Alpha Wave, A91 Partners and MAJ Invest. Since its inception, the lender said it has enabled the financial inclusion of over 6.5 lakh micro businesses having disbursed over Rs 7,000 crore to them. "We are very optimistic about Shakti Loan being the game changer for women micro enterprises and have allocated INR 100 crore to this product in the current financial year," said Niraj Kaushik, Deputy CEO, Aye Finance. Aye's Shakti L

Vedanta Resources needs to be proactive about refinancing $1 bn bond: S&P

In April this year, the rating agency said that a credible refinancing plan at least six months before maturity, due in Jan 24, would be important to maintain the current rating

India increases credit lending to Africa, in race to counter China

Forty two African nations received about $12 billion or 38% of all credit extended by India in the last decade