Page 8 - Loans

Brics' bank can finance African countries to tackle urgent challenges

Bank's president Dilma Rousseff also pointed to the need for joint infrastructure projects between several countries, noting that Africa has the world's greatest untapped hydroelectric potential

Brics' NDB to provide $173 mn loan to TCTA for Lesotho water project

The New Development Bank (NDB), which was established by the BRICS bloc, and the Trans-Caledon Tunnel Authority (TCTA) have inked a loan agreement for the implementation of phase II of the Lesotho Highlands Water Project (LHWP). The NDB will provide a project loan of 3.2 billion South African Rand (USD 173 million) to TCTA under the sovereign guarantee of South Africa. Lesotho is a small landlocked country bordered on all sides by South African provinces. The LHWP is a multi-phased project to provide water to the Gauteng region of South Africa and to generate hydroelectricity for Lesotho. The Loan Agreement was signed by Vladimir Kazbekov, Vice President and Chief Operating Officer of NDB and Percy Sechemane, Chief Executive Officer of TCTA, on the sidelines of the 15th BRICS Summit currently taking place in Johannesburg. TCTA, a state-owned entity in South Africa charged with financing and implementing bulk raw water infrastructure projects, will use the funds to construct the ...

RBI prohibits lenders from compounding penal interest on loan defaults

Penalty imposed for breaches will be treated as 'penal charges'

SBI offers to extend relief on loans to customers in riot-hit Manipur

The State Bank of India (SBI) has offered to extend relief on loans to its customers in Manipur, who have been affected by the ongoing unrest in the state. The relief package includes a moratorium of up to 12 months on equated monthly installments (EMIs), interest payments, and other installments. It will be available to borrowers whose accounts had not turned non-performing assets (NPAs) as on May 3, 2023, a SBI Manipur regional office notice said. The package will be implemented based on an assessment date of May 4, 2023. Borrowers who are interested in availing relief must approach their home branches or any nearby SBI branch by August 31, 2023, the bank said. The SBI said it understands the challenges that individuals and businesses are facing in Manipur at this time, and the relief package is aimed at providing them with much-needed support. "The SBI's relief package is a welcome move for borrowers in Manipur who have been affected by the unrest. The moratorium on EMIs and ...

Banks' lending to NBFCs soars 35% to Rs 14.2 trn in June: Care ratings

Banks' lending to non-banking finance companies (NBFCs) rose by 35.1 per cent to Rs 14.2 lakh crore in June, a report said. Credit exposure of banks to NBFCs rose by a robust 35.1 per cent on-year to Rs 14.2 lakh crore in June, indicating non-banking finance firms' decreased reliance on international borrowings. This also pushed up NBFCs' share in overall credit from 8.5 per cent in June 2022 to 9.9 per cent in the reporting month, according to Sanjay Agarwal, a senior director with Care Ratings. However, the report noted that the merger of HDFC with HDFC Bank, effective July 1, will lead to a reduction in the share and also the exposure of banks to NBFCs, as HDFC's bank borrowings will undergo a temporary reclassification, resulting in a shift of exposure to HDFC Bank. Meanwhile, mutual funds' debt exposure to NBFCs, including through commercial papers (CPs) and corporate debt, also increased 14.5 per cent to Rs 1.62 lakh crore in June, it said. According to the report, MF exposur

Kerala to bear 50% interest on capital loans by cashew cos: Minister Rajeev

The Kerala government on Wednesday decided to bear a portion of the PF and ESI payments of the private cashew companies in an effort to revive the crisis-hit industry in the southern state. State Industries Minister P Rajeev while launching eight new value-added cashew products by the Kerala State Cashew Development Corporation (KSCDC) for the Onam market here, said the government has also decided to bear 50 per cent of the loan interest burden of these factories and has reached a settlement with the banks to write off all interest and compound interest on Non-Performing Assets of cashew factories. "Now the government has intervened with the banks, and the banks are now ready to write off the penal interest and the accumulated interest, and they are ready to settle these NPAs by settling 50 per cent of the amount of the loan up to Rs 2 crore and 60 per cent of the principal amount up to Rs 10 crore," Rajeev told PTI. He said the Kerala cashews produced by the KSCDC and Kerala State

RBI seeks greater transparency in floating interest rates of retail loans

As policy interest rates rise, lenders pass on the burden to customers by either raising their monthly payments or increasing the tenor of their loan

Air India in talks with commercial banks for Rs 3,000 crore loan

In talks with banks to fund down-payment under sale & leaseback deals

Byju's misses August 3 deadline to rework $1.2 billion loan terms

Byju's said no deadline had been missed as "August 3 was merely a hopeful date that was likely to be scheduled for a sign off"

IIFL Finance profit rises 43% to Rs 473 cr in Q1 on higher loan growth

IIFL Finance on Thursday reported a 43 per cent growth in net income to Rs 473 crore for the June 2023 quarter on higher loan growth led by gold and home finance. While gold loans grew 29 per cent, home finance jumped 23 per cent, and microfinance loans soared 63 per cent, and loans against property grew 54 per cent, pushing the overall loan sales by 31 per cent to Rs 68,178 crore, of which off-book assets stood at Rs 26,663 crore, up 45 per cent, the company said in a statement. Its income rose 21 per cent year-on-year to Rs 1,420 crore, the company said. Reflecting the industry trend, the company also saw its asset quality improving, with gross NPAs falling to 1.8 per cent from 2.6 per cent for the reporting quarter and net NPAs improving to 1.1 per cent from 1.5 per cent. Its provision coverage for bad loans stood at 159 per cent. The company's average borrowing cost increased by 44 bps to 9.1 per cent. As much as 96 per cent of loans are retail and 67 per cent of them (exclud

Tiger Logistics, OneNDF sign pact for collateral-free loan to SME exporters

Global logistics firm Tiger Logistics (India) on Monday said it has signed a pact with online loan marketplace OneNDF to facilitate collateral-free cargo value financing for SME exporters. The tie-up will also help Tiger Logistics integrate the financing solution with its digital freight booking and management platform FreightJar to provide enhanced access to cash to these exporters, it said. The cargo value financing solution will enable 90 per cent of export invoice value to be financed within 48 hours, the company claimed. SME exports are crucial to the economy, and bridging and bringing access through short-term funding will open up new opportunities for us to scale in the SME segment, Harpreet Singh Malhotra, chairman and managing director, Tiger Logistics (India) Ltd, said. The association with OneNDF will enable the company's SME customers to access working capital seamlessly without any collateral, he added. The collaboration will help Tiger Logistics scale its exports in

Edtech major Byju's, lenders agree to amend terms for $1.2 billion loan

Houlihan Lokey serves as financial advisor to the term loan lender group and Kirkland & Ellis LLP, Cahill Gordon & Reindel LLP, and Shearman & Sterling LLP are serving as legal advisors

Weak loans of banks to fall to 3-3.5% of gross advances by March 2025: S&P

S&P Global Ratings on Thursday projected Indian banking sector's weak loans will decline to 3-3.5 per cent of gross advances by March 31, 2025 as structural improvements and good economic prospects would support the resilience of financial institutions. In its mid-year global bank outlook, S&P said India's economic growth prospects should remain strong over the medium term, with GDP expanding 6-7.1 per cent annually in fiscal years 2024-2026. India to remain the fastest-growing economy in Asia-Pacific, and the fastest-growing large economy globally, it said. "We project the banking sector's weak loans will decline to 3-3.5 per cent of gross loans by March 31, 2025 on the back of structural improvement, including healthy corporate balance sheets, tighter underwriting standards, and improved risk-management practices," S&P Primary Credit Analyst Deepali Seth Chhabria said. S&P also said that stronger balance sheets and higher demand should boost bank loan growth, but ...

G20 to discuss int'l debt architecture, more loans to developing nations

Countries like Zambia and Ghana have been waiting for big creditors to make progress in providing debt relief under the so called "Common Framework", which is led by the G20

'Expedite loan sanction, disbursement for projects under Rs 10,000-cr UIDF'

Financial Services Secretary Vivek Joshi on Monday asked officials to expedite sanction and disbursement of loans to eligible projects under Rs 10,000-crore urban infrastructure development fund (UIDF) announced in Budget. The early sanction and disbursement will help create better infrastructure in Tier 2 and Tier 3 cities, he said at an event organised to mark the 35th anniversary of National Housing Bank (NHB). Finance Minister Nirmala Sitharaman in her 2023-24 Budget speech announced the setting up of UIDF through the use of priority sector lending shortfall for the creation of urban infrastructure in Tier 2 and Tier 3 cities. Mid-tier cities still face the challenge of urban planning and funding for their urban infrastructure and ensuring planned development. Keeping these challenges in mind, UIDF has been launched with an initial corpus of Rs 10,000 crore to supplement efforts of the state governments by providing stable and predictable source of finance for creation of urban

Jaiprakash Associates defaults on repayment of Rs 4,044 crore loans

Crisis-hit Jaypee Group's flagship firm Jaiprakash Associates has defaulted on loans worth Rs 4,044 crore, including principal and interest amount. In a regulatory filing on Friday, Jaiprakash Associates Ltd (JAL) informed that the company on June 30th defaulted on repayments of a principal amount of Rs 1,660 crore and interest of Rs 2,384 crore. The loans pertained to various banks, and the nature of the obligation is fund-based working capital, non-fund-based working capital, term loans and FCCB (foreign currency convertible bonds). "The total borrowing (including interest) of the company is Rs 29,477 crore, repayable by 2037, against which only Rs 4,044 crore is overdue as on June 30, 2023," JAL said. Out of the total borrowing of Rs 29,477 crore, the company said that Rs 18,319 crore will get further reduced on transfer to the proposed Special Purpose Vehicle (SPV) for which the scheme of arrangement, duly approved by all the stakeholders, is pending sanction of National Compan

Bank of Maharashtra clocks credit growth of 25% at Rs 1.75 trn in June

State-owned Bank of Maharashtra (BoM) on Monday said it has posted a credit growth of 24.93 per cent at Rs 1.75 lakh crore in the June quarter. The outstanding credit was Rs 1.40 lakh crore at the end of June 30, 2022, BoM said in a regulatory filing. The Pune-headquartered lender registered a 24.82 per cent growth in total business (total advances and total deposits) to Rs 4.19 lakh crore at the end of June 2023 as against Rs 3.36 lakh crore at the end of the same quarter of previous fiscal. Total deposits of the bank increased by 24.73 per cent to Rs 2.44 lakh crore as against Rs 1.95 lakh crore at the end of the first quarter of the previous financial year. During the quarter, it said, the Current Account and Savings Account (CASA) ratio stood at 50.97 per cent of the total deposits. With regard to Credit Deposit (CD) ratio, it said, the number has increased to 71.86 per cent at the end of June 30, 2023 as against 71.75 per cent in the year-ago period. Gross investment of the

Share of loans bearing over 9% interest rate hits 56.1% in March: RBI

The share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023, in tandem with the monetary tightening measures starting May 2022, said a Reserve Bank report on Friday. The Reserve Bank started raising interest in May 2022 to rein in inflation in the wake of global supply disruptions, following the Russia-Ukraine war. Since then the benchmark short-term lending rate has increased by 250 basis points. However, the RBI did not raise the rate in its last two bi-monthly monetary policy reviews. "Consistent with the monetary tightening measures during 2022-23, the share of loans bearing over 9 per cent interest rate rose to 56.1 per cent in March 2023 from 31.4 per cent a year ago," said the Basic Statistical Return on Credit by Scheduled Commercial Banks in India - March 2023. The RBI further said all population groups recorded substantially higher credit year-on-year growth in 2022-23. The annual growth in lending by metropolitan branches of banks ...

Court rejects Byju's TLB lenders' request to investigate $500 mn transfer

A Delaware court has rejected a request by edtech major BYJU'S Term Loan B lenders to investigate into USD 500 million transfer from its US-based subsidiary BYJU'S Alpha to other entities, according to details shared by sources. BYJU'S had denied allegations levelled by its USD 1.2 billion Term Loan B lenders, saying it has never defaulted on the payments. "Rejecting the lenders' application for information in relation to the USD 500 million (part of the funds received by BYJU'S Alpha), the Vice Chancellor remarked that lenders had "no basis to further investigate the transfer," the sources said. In doing so, the Vice Chancellor has put a stop to the lenders' unwarranted fishing expedition and attempted to introduce a non-issue into the proceedings, which is limited to determining the control of BYJU'S Alpha," a source said. TLB Lenders, through their agent, GLAS Trust Company, have filed suit against BYJU'S US-based subsidiary for moving out USD 500 million from BYJU'S Alpha and o

Non-banking lender SMFG India Credit eyes Rs 75,000 cr loan book by FY26

Mid-sized non-banking lender SMFG India Credit, formerly Fullerton India Credit, is looking at doubling the loan book over the next two-three years from the present Rs 36,000 crore. Japanese financial powerhouse SMFG bought a controlling 74.9 per cent stake in Fullerton in December 2021 for an undisclosed sum, and from May 2023, it was renamed as SMFG India Credit. The company was hit hard by the second wave of the pandemic and reported Rs 894.5 crore net income last fiscal against Rs 1500 crore loss in FY22, as it could grow 10x growth in FY23 over FY22 with loan disbursements doubling to Rs 30,186.8 crore as of March and since then grown to Rs 36,000 crore. "Our assets have already doubled over the past two years, and we expect to double this over the next two to three years, driven by home loans and co-lending along with a more focused approach to funding the Japanese companies operating as original equipment manufacturers here. "We are looking at new products as we haven't yet