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India Equity Research Reports, IPO and Stock News
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SBI doubles overseas borrowing target to $10 bn
State Bank of India (SBI), the country's top lender, said on Thursday it had doubled
its overseas borrowings target to $10 billion. It had earlier planned to raise $5
billion, it said in a statement, without giving further details. In May, the bank's
Chairman Pratip Chaudhuri had said it would borrow $3 billion to $4 billion
overseas this year. (Business Standard)
Interest rate hikes may increase bank NPAs: Crisil
Significant increase in interest rates over the past 18 months will adversely impact
the asset quality and profitability of banks in India, according to credit rating
agency Crisil. Banks’ gross non-performing assets (NPAs) ratio is expected to
increase to nearly 3 per cent by March 31, 2012, from 2.3 per cent a year ago. The
pressure on asset quality is expected to arise primarily because of weakening debt
servicing ability of the corporate sector, especially the small and medium
enterprises (SME) segment. The banks’ migration to system-based recognition of
NPAs will also result in higher NPAs over the near term, the agency said. (The
Hindu Business Line)
Wait for bancassurance norms gets longer
The much-awaited bancassurance guidelines might take some more time to come
out. The regulator is considering the reaction to certain issues, such as protests
from bank-backed insurance companies and the Life Insurance Corporation of
India (LIC). The bancassurance report, which came out in June, recommended that
banks be allowed to tie-up with two types of insurance companies (life and nonlife) for distributing insurance products. Bank-backed insurance companies are
protesting against the opening up of the channel, allowing banks to sell products
of more than one insurance company. Some feel the channel, if at all, should be
opened for only two companies. New entrants opine that banks should be allowed
to sell products of multiple insurance companies. (Business Standard)
DB RESEARCH
ICICI Bank company meeting takeaways: cautiously optimistic
In our recent meeting ICICI Bank management was cautiously optimistic. While
the bank appreciates RBI's hawkish imperative on account of inflation, it believes
that further rate hikes could hurt loan growth -- retail loan momentum is already
moderating. Fee income growth is likely to be moderate on account of a
slowdown in fresh sanctions. The bank is confident of improving NIM in 2HFY12
and does not see any immediate risks to asset quality. We maintain Hold rating.
Food inflation falls to 8.84%
Food inflation fell to 8.84% in the week ended September 10 from 9.47% in the previous
week, but provided no relief to the common man as prices of key commodities continued to
rule high. Prices of most commodities, barring wheat, continued to remain firm on an annual
basis, as per Wholesale Price Index (WPI) data released by the government today. According
to experts, the fall in inflation on a weekly basis is on account of statistical reasons, called as
"high base effect". Food inflation was above 16% in the corresponding period last year.
(Business Standard)
RBI tightens return filing format for NBFCs
The Reserve Bank of India (RBI) today tightened the return filing format for non-banking
financial companies (NBFCs) under which they would have to make disclosures about their
deposit and lending activities to the central bank more frequently. As per the new regulation,
deposit taking NBFCs would have to submit reports on deposits and prudential norms to the
RBI on quarterly basis, as against annual and half-yearly basis respectively earlier. Similarly,
the apex bank asked non-deposit taking NBFCs to file statements on capital funds, risk
weighted assets, risk asset ratio, among others on quarterly basis. (Business Standard)
Arcil revises profit after RBI questions accounting policy
India's largest stressed assets buyout firm, Arcil - promoted by the country's top lenders -
has slashed its earnings and restated its profits for FY11 besides shelving a proposal to pay
dividend to its shareholders, after the Reserve Bank of India raised questions relating to the
company's accounting practices. Arcil has now restated its net profits for 2010-11 to Rs 33
mn, from Rs 510 mn which was approved by the Arcil board on May 3. This restatement of
accounts comes after the RBI questioned the asset reconstruction company's accounting
policy in its annual inspection report. (Economic Times)
RBI liberalises Forex Facilities for Individuals
NRIs can be Joint Holders in Resident's SB/EEFC/RFC Accounts; Residents can be Joint
Holders in NRE/FCNR Accounts; Residents can gift Shares/Debentures up to USD 50,000
Value; Sale Proceeds of FDIs can be credited to NRE/FCNR (B) Account; Gifts to NRIs can be
credited to NRO Accounts in Rupees; Loans to NRI Close Relatives can be given in Rupees
(RBI press release)
RBI warns banks on poor customers
In the name of financial inclusion, banks should not blindly follow a policy of customer
acquisition, providing new access to new customers. Instead, they must address the issues
faced by poor customers properly, for it might otherwise lead to a long term mistrust and
loss of confidence in the banking system. According to Reserve Bank of India (RBI) Deputy
Governor K C Chakrabarty, financial inclusion is an important tool for economic development,
but it might also impact the poor adversely by increasing their indebtedness and wiping out
their savings and assets. (Business Standard)
RBI asks banks to beef up security for e-transactions
The Reserve Bank of India (RBI) has asked banks to strengthen their payment infrastructure
for safety in automated teller machines (ATM) and point of sale terminals. It has set a twoyear timeline for banks to upgrade the systems beginning with implementation of fraud risk
management services by September 30, 2012. In accordance with the suggestions by the
working group appointed by the regulator in March this year, RBI has also asked for better
sourcing and monitoring process at the merchant level by the same time frame. The regulator
has directed banks to migrate to EMV chip cards and PIN-based cards by June 30, 2013.
(Business Standard)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SBI doubles overseas borrowing target to $10 bn
State Bank of India (SBI), the country's top lender, said on Thursday it had doubled
its overseas borrowings target to $10 billion. It had earlier planned to raise $5
billion, it said in a statement, without giving further details. In May, the bank's
Chairman Pratip Chaudhuri had said it would borrow $3 billion to $4 billion
overseas this year. (Business Standard)
Interest rate hikes may increase bank NPAs: Crisil
Significant increase in interest rates over the past 18 months will adversely impact
the asset quality and profitability of banks in India, according to credit rating
agency Crisil. Banks’ gross non-performing assets (NPAs) ratio is expected to
increase to nearly 3 per cent by March 31, 2012, from 2.3 per cent a year ago. The
pressure on asset quality is expected to arise primarily because of weakening debt
servicing ability of the corporate sector, especially the small and medium
enterprises (SME) segment. The banks’ migration to system-based recognition of
NPAs will also result in higher NPAs over the near term, the agency said. (The
Hindu Business Line)
Wait for bancassurance norms gets longer
The much-awaited bancassurance guidelines might take some more time to come
out. The regulator is considering the reaction to certain issues, such as protests
from bank-backed insurance companies and the Life Insurance Corporation of
India (LIC). The bancassurance report, which came out in June, recommended that
banks be allowed to tie-up with two types of insurance companies (life and nonlife) for distributing insurance products. Bank-backed insurance companies are
protesting against the opening up of the channel, allowing banks to sell products
of more than one insurance company. Some feel the channel, if at all, should be
opened for only two companies. New entrants opine that banks should be allowed
to sell products of multiple insurance companies. (Business Standard)
DB RESEARCH
ICICI Bank company meeting takeaways: cautiously optimistic
In our recent meeting ICICI Bank management was cautiously optimistic. While
the bank appreciates RBI's hawkish imperative on account of inflation, it believes
that further rate hikes could hurt loan growth -- retail loan momentum is already
moderating. Fee income growth is likely to be moderate on account of a
slowdown in fresh sanctions. The bank is confident of improving NIM in 2HFY12
and does not see any immediate risks to asset quality. We maintain Hold rating.
Food inflation falls to 8.84%
Food inflation fell to 8.84% in the week ended September 10 from 9.47% in the previous
week, but provided no relief to the common man as prices of key commodities continued to
rule high. Prices of most commodities, barring wheat, continued to remain firm on an annual
basis, as per Wholesale Price Index (WPI) data released by the government today. According
to experts, the fall in inflation on a weekly basis is on account of statistical reasons, called as
"high base effect". Food inflation was above 16% in the corresponding period last year.
(Business Standard)
RBI tightens return filing format for NBFCs
The Reserve Bank of India (RBI) today tightened the return filing format for non-banking
financial companies (NBFCs) under which they would have to make disclosures about their
deposit and lending activities to the central bank more frequently. As per the new regulation,
deposit taking NBFCs would have to submit reports on deposits and prudential norms to the
RBI on quarterly basis, as against annual and half-yearly basis respectively earlier. Similarly,
the apex bank asked non-deposit taking NBFCs to file statements on capital funds, risk
weighted assets, risk asset ratio, among others on quarterly basis. (Business Standard)
Arcil revises profit after RBI questions accounting policy
India's largest stressed assets buyout firm, Arcil - promoted by the country's top lenders -
has slashed its earnings and restated its profits for FY11 besides shelving a proposal to pay
dividend to its shareholders, after the Reserve Bank of India raised questions relating to the
company's accounting practices. Arcil has now restated its net profits for 2010-11 to Rs 33
mn, from Rs 510 mn which was approved by the Arcil board on May 3. This restatement of
accounts comes after the RBI questioned the asset reconstruction company's accounting
policy in its annual inspection report. (Economic Times)
RBI liberalises Forex Facilities for Individuals
NRIs can be Joint Holders in Resident's SB/EEFC/RFC Accounts; Residents can be Joint
Holders in NRE/FCNR Accounts; Residents can gift Shares/Debentures up to USD 50,000
Value; Sale Proceeds of FDIs can be credited to NRE/FCNR (B) Account; Gifts to NRIs can be
credited to NRO Accounts in Rupees; Loans to NRI Close Relatives can be given in Rupees
(RBI press release)
RBI warns banks on poor customers
In the name of financial inclusion, banks should not blindly follow a policy of customer
acquisition, providing new access to new customers. Instead, they must address the issues
faced by poor customers properly, for it might otherwise lead to a long term mistrust and
loss of confidence in the banking system. According to Reserve Bank of India (RBI) Deputy
Governor K C Chakrabarty, financial inclusion is an important tool for economic development,
but it might also impact the poor adversely by increasing their indebtedness and wiping out
their savings and assets. (Business Standard)
RBI asks banks to beef up security for e-transactions
The Reserve Bank of India (RBI) has asked banks to strengthen their payment infrastructure
for safety in automated teller machines (ATM) and point of sale terminals. It has set a twoyear timeline for banks to upgrade the systems beginning with implementation of fraud risk
management services by September 30, 2012. In accordance with the suggestions by the
working group appointed by the regulator in March this year, RBI has also asked for better
sourcing and monitoring process at the merchant level by the same time frame. The regulator
has directed banks to migrate to EMV chip cards and PIN-based cards by June 30, 2013.
(Business Standard)
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