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<div type="image" title="The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books." agency="ANI" msid="114778648" hostid="261" caption="&amp;lt;p&amp;gt;The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books.&amp;lt;/p&amp;gt;"></div> Imagine this. You have a younger sibling you’re mighty envious of. And why not? Unlike you, they seem to enjoy all the freedom and money in the world. They party like there’s no tomorrow, and here you are, stuck in a boring, ultra-disciplined but responsible routine that feels completely devoid of any independence, and mostly, funds. But of late, things are changing. This sibling is in massive trouble and just cannot escape the parent’s wrath anymore. Long story short, the party is over, and it is time to go back home. The rising defaults on this sibling’s part have now begun pulling the entire house down, thereby attracting the regulator’s ire. <h2>The Wild West of <keyword id="113684" type="General" weightage="20" keywordseo="microfinance" source="Orion">microfinance</keyword> and unsecured loans</h2>It's hard to ignore the issues with microfinance and unsecured loans in India. Many saw them as a small gamble and ignored the rising defaults much like the younger siblings’ tantrums, and now they find themselves in hot waters. The skyrocketing instances of non-payments aren't a micro-issue anymore and are threatening the stability of the entire banking system. In the quarter ended September 30, 2024, 5 of India’s 8 largest private sector <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> reported a steep rise in their bad loan book, mostly thanks to microfinance loans. Some banks, in a bid to strengthen their fortress against these <keyword id="142154" type="General" weightage="100" keywordseo="bad-loans" source="Orion">bad loans</keyword>, have significantly upped their provisions. For instance, IndusInd Bank set aside Rs 525 crore during July and September 2024 to battle the menace of defaults on microfinance loans, which make up about 9% of its total loan book. See, banks rely heavily on their interest income, which they earn from advancing loans. Any loan where the borrower has not paid interest to the bank or defaulted for 90 days or more becomes bad, i.e. an NPA, or non-performing asset for the bank. And who likes things going bad? Simply put, there has been a steep rise in three areas, much to the dislike of banks and MFIs (micro-finance institutions). But hey, it's mostly their doing! <ol><li>GNPA ratio (gross net performing assets): The quantum of non-performing assets a bank has in proportion to its total assets.</li><li>Provision: The amount banks set aside to take care of such NPAs.</li><li>Slippage ratio: The rate at which good girls go bad, or the speed at which good loans turn into NPAs</li></ol>But how are these plaguing the Indian banking sector? And what does the road ahead look like? We decode it for you. <h2> Microfinance: A not-so-micro-menace</h2>Microfinance loans were initially brought forth for low-income households and individuals i.e. for those who might not generally have access to traditional ways of credit, like bank loans and more. They don’t require collateral or an asset to be pledged in lieu of the loan, making it a tad bit easier for borrowers. As of June 2024, the amount of outstanding loans in the microfinance industry stood at a staggering Rs 4,20,256 crore. Of this, NBFC-MFIs accounted for 40% and banks made for 33% of these. In 2022, RBI, in a bid to inspire some competition in this space, did something radical-they did away with the ceiling on how much interest MFIs could charge their customers. Previously, MFIs could add up to 12% to their cost of acquiring funds to determine the final interest rate chargeable to the consumer. So, assuming that Bank A incurs a 5% cost to acquire funds for further loaning, A could charge up to 17% interest from the end consumer. So, interest rates were in the hands of MFIs, and boy, did they have a gala time with it. Instead of spurring some healthy competition, as RBI expected, MFIs and banks went rogue and all guns blazing, competing for the title of “Who will charge the highest interest?” Recently, RBI banned 4 microfinance institutions (MFIs), namely Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and <keyword id="20117932" type="General" weightage="20" keywordseo="navi-finserv" source="keywords">Navi Finserv</keyword> from disbursing loans effective October 21, 2024. Why? Because they were charging 14% extra interest over their original cost of funds. To maintain their loan books (and pockets), banks and NBFCs resorted to shady practices like netting off loans, which RBI has now advised MFIs against. Here, lenders allow borrowers to settle a previous outstanding loan by issuing them a new loan! As crazy as it sounds, it helped banks to report less of their total assets as NPAs, since the new credit would cover pending instalments of the borrower’s previous loan. Then there was the issue of borrowers overleveraging, i.e. taking multiple loans using different IDs from various lenders and then failing to honour any of them. The consequence? Banks and NBFCs end up with massive NPAs. Data from credit bureaus suggests that over the last quarter, there was a 17.2% rise in the number of borrowers who had 5 or more active loans at the same time. <h2>Growth &gt; Caution</h2>It's an age-old tale unfolding yet again in India’s banking sector- Icarus flew too close to the sun and eventually, fell to its death. Between April and June 2024, NBFCs microfinance portfolio jumped by 2.7%. If you see this in terms of loan sources, microfinance loans issued by banks grew by 11.2% in Q1FY25. But the same portfolio in NBFCs swelled by almost double-23.9%. While most of these loans had an average ticket size between Rs 30,000-50,000, there was a sharp spike in the number of loans that had a ticket size of Rs 80,000 or more. Data suggests that as of March 2024, more than 12% of all microfinance borrowers had over 4 or more active loans. In dating parlance, this is a classic case of borrowers going polyamorous, minus the honesty and transparency. Not the best of situations, you'd agree! <h2>Will banks and NBFCs stand up to this stress?</h2>If their results for Q2FY25 are to be believed, NBFCs are not handling the pressure all that well. Or even slightly well. Only a few banks like Bank of Baroda (BoB), ICICI, and Indian Bank were up for the battle, even witnessing a decline in their loan delinquencies. Some others, like IndusInd Bank, saw their stock dip by a massive 16.2% over the last 5 days. Its slippages in the previous quarter burgeoned from Rs 15.3 billion in Q1FY25 to Rs 17.9 billion in Q2. As a result, the bank pushed a staggeringly high amount of money to create an NPA cushion for itself. While its management has highlighted its preference for secured lending, that was hardly reflected in its actions during the quarter, where growth in unsecured personal loans remained exceptionally high at over 7% on a QoQ basis. Turns out, only 44% of customers in IndusInd Banks’ microfinance loan portfolio were exclusive to it. The rest 47% were, you guessed it right-polyamorous! 27% had borrowed from another lender as well, apart from IndusInd Bank, while 20% were those who had outstanding loans with two other lenders, apart from IndusInd Bank. IndusInd Bank’s credit card segment did not miss the NPA bus and accounted for 7-8% of its GNPAs. Canara Bank’s total slippages during the previous quarter jumped to Rs 11.1 billion, up by 24.7% QoQ, and making up for 3.6% of its total loans. As for Bandhan Bank, its gross NPA for Q2FY25 inched up on a QoQ basis, up from 4.23% in Q1, to 4.68% in the second quarter. IDFC Bank’s heavy provisioning for its NPAs marred its profits significantly, causing its PAT (profit after tax) to dip by 73% on a YoY basis. Data from ICRA Analytics suggest that the AUM (asset under management) growth in microfinance loans and unsecured (personal and business) loans by the NBFCs will moderate to 10-12% and 19-21%, respectively, in FY2025 compared to 30% and 38%, in FY2024. Says A M Karthik, Senior Vice President &amp; Co-Group Head, Financial Sector Ratings, ICRA, “As bank funds constitute a larger share in the overall funding of NBFCs, a slower credit flow from banks to the NBFCs will compress their AUM growth. The NBFCs in unsecured and digital lending businesses shall face a higher squeeze in funding compared to others, and the unsecured lending space will continue to be a source of stress in the near term.” There has been uninhibited growth in <keyword id="6051027" type="General" weightage="20" keywordseo="Unsecured-loan" source="Orion">unsecured loan</keyword>s, apart from just the microfinance segment. For instance, Axis Bank’s gross slippages jumped by Rs 4,443 crore, largely thanks to its unsecured business. The same is the case with Yes Bank, which saw 35–40% of its retail slippages emerging from the unsecured loan portfolio. <keyword id="6376194" type="General" weightage="20" keywordseo="kotak-mahindra" source="Orion">Kotak Mahindra</keyword> Bank was also quick to follow Yes Bank’s suit, with around 35%-40% of its slippages coming from credit cards. <h2>How is the road ahead?</h2>While RBI has just cracked its whip and served a warning at the moment, experts at Morgan Stanley believe that more changes (read regulatory lashes) are underway. Moreover, with both festive and wedding seasons underway in our country, unsecured lending might pick up momentum, much to the disdain of the calibrated approach banks have been taking towards it so far. But if the situation doesn't improve, RBI will not waste any time in becoming the typical tyrannical <keyword id="19897820" type="General" weightage="20" keywordseo="bollywood" source="keywords">Bollywood</keyword> headmaster who runs his dominion with an iron fist. However, that's a story for another day. Do you have a topic in mind you'd want a simpler explanation for, or insights or personal experience to share on personal finance and more? Contact us at businessinsider@timesinternet.in.

Simply Put: Is the lending party over? The dangerous tango of Indian banks with microfinance and unsecured loans

Top 8 banks offering low interest rates on home loans; check full list here

The Indian <keyword id="22196321" type="General" weightage="20" keywordseo="credit-card-industry" source="keywords">credit card industry</keyword> is struggling to grow, as new issues slow down on a year-on-year (YoY) basis. Not only has the growth i.e. issuance of new credit cards slowed down, but lenders are also becoming increasingly cautious of the asset qualities, a recent report by Nomura showed. From 19% in July 2024, the growth in the <keyword id="6368202" type="General" weightage="20" keywordseo="credit-card" source="Orion">credit card</keyword> spendings came down to 13% in August 2024. The year-to-date (YTD) growth has also significantly declined in FY25, currently standing at 17%, markedly down from 28% in FY24. For the fifth consecutive month, the number of new credit cards added to the system remained well below the 1-million, or 10 lakh mark. Around 9.2 lakh credit cards were added during the month, a slight uptick from the 7.55 lakh cards that came into the system In July 2024. However, there is growth in this space nevertheless, with about 10.55 crore active credit cards at present, marking a 15.6% YoY increase. Even the annualised spend per card, or the average amount spent via an annual card during an year grew 1% YoY to Rs 1.87 lakh. But this was far less than the 7% growth annual spends via one credit card saw in FY24. Meanwhile, what continues to burgeon consistently is the outstanding amount on these credit cards, which ballooned to Rs 2.7 lakh crore in June 2024, up from Rs 2.6 lakh crore in March 2024, and around Rs 2 lakh crore in the year ago period. To put this in perspective, pre-pandemic, the total outstanding amount stood at Rs 87,686 crore, which marks a 24% CAGR in this amount, in just a span of 5 years. <h2>Large drops, slowdown to sustain</h2>Even the monthly expenditure per card dropped 2% YoY to Rs 16,000 in August, 2024. Subsequently, the transaction volume via credit cards also dipped to 1.6% in August, along with the total amount of <keyword id="21084888" type="General" weightage="100" keywordseo="credit-card-spending" source="keywords">credit card spending</keyword>, which fell to Rs 1.69 lakh crore in August, from Rs 1.73 lakh crore in July. Also, there has been a hefty cutdown in provisions made for credit card reward points, which reflects in the quantum of credit card benefits that have been mowed out by companies of late, making credit cards far less lucrative than before. <h2>HDFC takes lead </h2>During August 2024, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC bank</keyword> added a total of 2.41 lakh credit cards, taking its total tally of active credit cards to 2.19 crore. <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> came a second distant, adding 1.45 lakh credit cards during the month, which means that the second-largest credit card issuer now holds over 1.75 crore active credit cards. Axis Bank and SBI Cards also added 1.27 lakh and 1.1 lakh cards, respectively to their repertoire during the month, while the growth numbers at Kotak Mahindra Bank remained largely flat, stagnating the bank's total card tally at 54.13 lakh. This was due to the ongoing ban on the bank due to its weak IT infrastructural issues imposed by RBI in April 2024. If anything, the bank's number of credit cards declined by 61,191 during the month. Even as the festive season approaches, experts think that it is unlikely to make a major dent in credit card spendings, which are expected to see a further slowdown in the quarters to come.

Credit card growth experiencing a slowdown, as borrowers struggle to pay back loans

Bankers welcomed Finance Minister <keyword id="129243" type="General" weightage="80" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword>'s budget proposals as being growth accretive, and hailed the focus on capital expenditure while continuing with fiscal consolidation. On the critical question of revival in private capital expenditure, which has been lagging for several years now, private sector lender <keyword id="13918428" type="DOMAIN" weightage="20" keywordseo="kotak-mahindra-bank" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="kotak mahindra bank" meta.entityname="Kotak Mahindra Bank Ltd." meta.entityid="12161" meta.seoname="kotak-mahindra-bank-ltd">Kotak Mahindra Bank</keyword>'s whole time director <keyword id="818755" type="General" weightage="80" keywordseo="kvs-manian" source="Orion">KVS Manian</keyword> opined that it will take another 12 months to revive even though corporates have been investing off and on lately. “No bad news is good news. It is a fairly decent budget. The FM has maintained a fair balance on fiscal prudence, sustainability and ease of doing business,” Manian told PTI after the presentation of the budget. <keyword id="13222" type="DOMAIN" weightage="20" keywordseo="sbi" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="sbi" meta.entityname="State Bank of India" meta.entityid="11984" meta.seoname="state-bank-of-india">SBI</keyword> chairman <keyword id="2003868" type="General" weightage="80" keywordseo="dinesh-khara" source="Orion">Dinesh Khara</keyword> said the budget is growth accretive, fiscally prudent and consumption supportive. “The huge emphasis on capital expenditure could be the perfect recipe for a private investment cycle that is already visible. Support for MSME and Agriculture will broad base credit growth,” Khara added. He also said that the “reasonable Government borrowing numbers” will support lower interest rates and the move towards a clutter free new tax regime will significantly spur consumption. Banking industry's lobby grouping Indian Banks Association's chairman A K Goel said the increased capital expenditure could help in further increasing the demand for bank funds and the Agriculture Accelerator Fund woill also be helpful. <keyword id="686923" type="General" weightage="80" keywordseo="umesh-revankar" source="Orion">Umesh Revankar</keyword>, the executive vice chairman of <keyword id="12730794" type="DOMAIN" weightage="20" keywordseo="shriram-finance" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="shriram finance" meta.entityname="Shriram Finance Ltd." meta.entityid="13106" meta.seoname="shriram-finance-ltd">Shriram Finance</keyword> said the income tax benefits announced will boost purchasing power for middle-class consumers. "I believe the announcements made will trigger a pick-up in credit off take for small enterprises, the consumption-driven two-wheeler business and lending to transportation," he added. Non-bank lender Tata Capital's managing director and chief executive <keyword id="128186" type="General" weightage="80" keywordseo="rajiv-sabharwal" source="Orion">Rajiv Sabharwal</keyword> said the strong agricultural credit outlay, support measures, ease of doing business, and digitization drive across various sectors will improve multiple clusters within the economy. American lender Bank of America's country head Kaku Nakhate said allowing foreign banks to conduct acquisition financing from GIFT City is a welcome step and also hailed the dual budget proposal for a single window clearance for IFSCA, SEZ, <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>, SEBI and GSTN at GIFT City. KPMG's national head of tax, <keyword id="309284" type="General" weightage="80" keywordseo="rajeev-dimri" source="Orion">Rajeev Dimri</keyword>, also welcomed Finance Minister Nirmala Sitharaman's measures for ensuring that the relaxations given to common taxpayers have not derailed fiscal math, and the government has stayed on the path of fiscal consolidation. Pointing out to the Goods and Services Tax revenue accretion over the last few months, he said the taxpayers should be credited for the performance. The budget rightly “rewards” the taxpayers for their commitment, Dimri said. LuLu Financial Holdings Managing Director Adeeb Ahamed said the budget is focussed with equal focus on traditional and emerging sectors. Adeeb, who has significant investments in India's financial services sector through LuLu Forex and LuLu Finserv, said the move to ramp up the credit guarantee scheme for MSMEs will give a fillip to enabling faster access to financial services. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/first-impressions-samsung-galaxy-s23-s23-plus-and-s23-ultra-go-heavy-on-photography-and-gaming/articleshow/97532856.cms?utm_source=social_sticky_amp&amp;utm_medium=social_sharing&amp;utm_campaign=Click_through_social_share">First Impressions: Samsung Galaxy S23, S23 Plus, and S23 Ultra bet big on photography and gaming</a> <a href="https://www.businessinsider.in/tech/mobile/news/new-patent-suggests-that-apple-could-bring-a-foldable-iphone-with-a-self-healing-display-in-the-future/articleshow/97302738.cms">New patent suggests that Apple could bring a foldable iPhone with a self-healing display in the future</a>

Bankers say private capex will take one more year to revive

The rising demand for credit in last couple of days has prompted banks to garner funds aggressively through certificates of deposits (CD), bonds, and fixed deposits (FD). The need for aggressive fund raising arose after the surplus liquidity in the banking system dropped sharply from the record high. According to the data compiled by Prime database, banks have so far raised around Rs 42,000 crore through CDs. This was even after the rates on this instruments are rising sharply. The data also showed that Indian Bank, topped the fund raising list via CDs, raising worth Rs 13,550 crore, which was followed by <keyword id="6357149" type="General" weightage="80" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword> raising Rs 6,550 crore and <keyword id="62034" type="General" weightage="80" keywordseo="punjab-national-bank" source="Orion">Punjab National Bank</keyword> raising Rs 2,875 crore so far in August. Apart from this, there are various banks such as <keyword id="6354731" type="General" weightage="80" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword> (SBI), Indian Overseas Bank, Indian Bank, Punjab National Bank, <keyword id="46013" type="General" weightage="80" keywordseo="kotak-mahindra-bank" source="Orion">Kotak Mahindra Bank</keyword>, ICICI Bank, among others have increased their FD raised 5-20 basis points across maturities to attract more investors. "As liquidity is draining out in a calibrated manner from the system, banks are compelled to raise funds through CDs and even through fixed deposits. Some banks are offering special rates for higher FD amounts. With growth picking up, we can expect banks to aggressively raise funds from the market," said <keyword id="14789739" type="General" weightage="80" keywordseo="venkatakrishnan-srinivasan" source="Orion">Venkatakrishnan Srinivasan</keyword>, founder and managing partner at <keyword id="14790820" type="General" weightage="80" keywordseo="rockfort-fincorp" source="Orion">Rockfort Fincorp</keyword>, a Mumbai-based debt advisory firm. Banks credit growth has remained in double digits handily outpacing the deposit growth. The credit growth has increased in couple of weeks due to low base effect, small ticket size loans, higher working capital requirements due to elevated inflation and a shift to bank borrowings on account of high yields in the capital market. The bank credit has grown over 14 per cent on-year, as per data on the <keyword id="6354335" type="General" weightage="80" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> showed. Meanwhile, liquidity in the banking system has cropped sharply in last couple of months. Currently, it around Rs 45,000 crore, as compared to Rs 1.30 lakh crore last week. The sharp drop has been witnessed due to payments for government bonds and outflows on account of goods and service tax payments. Going forward, market participants expect banks to raise more funds because credit demand is likely to rise amid festive season. While, rates on the instruments will also rise due to narrowing of surplus liquidity. "This pace may continue with back of credit off take and <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> attempts to normalise liquidity, banks need to meet the demand and get the cheaper sources of funds be available so raising via CD and capital instruments to meet the credit demand and preparing oneself for this ahead of festivals and busy seasons," said <keyword id="261562" type="General" weightage="80" keywordseo="ajay-manglunia" source="Orion">Ajay Manglunia</keyword>, MD and Head Institutional Fixed Income at JM Financial. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/what-should-investors-ask-mukesh-ambani-at-his-companys-agm/articleshow/93727113.cms">What should investors ask Mukesh Ambani at his company’s AGM?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/instagram-is-reportedly-testing-a-new-feature-that-looks-like-an-imitation-of-fast-growing-app-bereal/articleshow/93727321.cms">Instagram is reportedly testing a new feature that looks like an imitation of fast-growing app BeReal</a>

Banks aggressively garnering funds via CDs, FDs amid firm credit off take

<keyword id="722345" type="General" weightage="80" keywordseo="nifty-bank" source="Orion">Nifty Bank</keyword>, which is comprised of the most liquid and large capitalised Indian banking stocks, is up 11.76 per cent so far this year due to robust earnings growth of banks, return of foreign investors in Indian equities since July and attractive valuations. Currently, the <keyword id="6354813" type="General" weightage="100" keywordseo="nifty" source="Orion">Nifty</keyword> Bank index is trading at 39,656.15, as compared to 35,481.70 on December 31, 2021. According to the data compiled by <keyword id="824141" type="General" weightage="50" keywordseo="geojit-financial-services" source="Orion">Geojit Financial Services</keyword> showed, the top three banks that have outperformed the index were Bank of Baroda with YTD returns of 47.90 per cent, Federal Bank with 21.20 per cent, and IndusInd Bank with 21.10 per cent. On Thursday, <keyword id="46013" type="General" weightage="50" keywordseo="kotak-mahindra-bank" source="Orion">Kotak Mahindra Bank</keyword>, Bandhan Bank, Federal Bank, <keyword id="6354731" type="General" weightage="50" keywordseo="state-bank-of-india" source="Orion">State Bank of India</keyword>, IndusInd Bank, HDFC Bank, AU Small Finance Bank, ICICI Bank, Axis Bank, PNB, <keyword id="6986952" type="General" weightage="50" keywordseo="idfc-first-bank" source="Orion">IDFC First Bank</keyword>, and Bank of Baroda were stocks in the Nifty Bank index. "The banking sector has demonstrated strong resilience so far this year, supported by multiple factors. 1. Strong quarterly earnings driven by robust credit growth, margin expansion, improved asset quality and lower provisioning; 2. FIIs return to buying mode due to favourable economic factors; 3. Attractive valuation. We believe that the rally is still in its early stages and that valuations have room to rise further, given improved fundamentals," said Vinod Nair, Head of Research at Geojit Financial Services. According to the ICICI Securities report, banks under their coverage in Q1 FY23 reported 16 per cent on-year and 2 per cent on-quarter growth in net interest income. Core operating profit grew 17 per cent on-year, while <keyword id="6374832" type="General" weightage="80" keywordseo="treasury" source="Orion">treasury</keyword> loss dragged operating profit lower by 13 per cent on-year and 18 per cent on-quarter. Subsiding credit cost and lower base supported 35 per cent on-year earnings growth. However, earnings of State Bank of India, HDFC Bank and Kotak Mahindra Bank lagged I-Sec expectations due to higher than anticipated treasury loss and elevated opex. G-sec yields surged 65 basis points since March to 7.5 per cent till June and corporate bond yields by 70 basis points. This created pressure on treasury profits for banks that dragged overall earnings growth. Having 25-60 per cent of investment portfolio in AFS/HTM with 1-2 years of modified duration led to a treasury knock. Banks with relatively higher investment in corporate bonds (credit substitute) witnessed above-expected hit. On an average, banks registered treasury loss equivalent to high single digit of revenues and 15 per cent of core operating profit. Banks' upbeat stance on growth was reflected in advance growth of 2-4 per cent on-quarter in Q1 FY23, otherwise a seasonally slow quarter. Growth was primarily led by retail and proportion of unsecured retail advances inched up. Sequential loan growth momentum was dragged by 2-wheeler segment and agri (in few banks). While, inflows of foreign investors in the Indian equities was Rs 21,252.60 so far from July 28. Foreign investors turned buyers since late July after remaining sellers in the equities for almost 9 months. Experts believe that foreign investors have returned to Indian market because India is preferred destination as country has best growth prospects among large economies of the world. FPIs have turned net buyers in autos, capital goods, FMCG, and Telecom. Due to this, the Sensex is now trading above 60,000 mark and Nifty over 17,900. Going forward, profitability of banks is expected to improve with a robust credit growth outlook and improving asset quality. Additionally, in the rising interest rate scenario, banks with a higher proportion of flexible loans will showcase margin expansion. "We expect that the mark-to-market impact of rising bond yields on treasury income will hurt banks, particularly PSUs in the short term, who have higher investments in bonds. We continue to recommend top private sector banks that are better poised to reap the benefits of economic recovery with stronger balance sheets and neat loan books. The sector is currently trading at its 5-year averages, which indicates significant room for expansion. However, the near-term trend will be dictated by the movements in FII activities," Nair added. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/zomatos-quick-commerce-app-blinkit-to-deliver-printouts-at-your-doorsteps-in-11-minutes/articleshow/93651814.cms">Zomato’s quick commerce app Blinkit to deliver printouts at your doorsteps in 11 Minutes</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/rupee-expected-to-trade-at-around-79/-on-fii-inflows-easing-crude-prices-bob/articleshow/93651698.cms">Rupee expected to trade at around 79/$ on FII inflows, easing crude prices: BoB</a>

You Searched For "kotak mahindra bank bad loans" and got 6 results

Simply Put: Is the lending party over? The dangerous tango of Indian banks with microfinance and unsecured loans

Ira Alok Puranik

Top 8 banks offering low interest rates on home loans; check full list here

Ira Alok Puranik

Credit card growth experiencing a slowdown, as borrowers struggle to pay back loans

BI India Bureau

Bankers say private capex will take one more year to revive

PTI

Banks aggressively garnering funds via CDs, FDs amid firm credit off take

IANS

Nifty Bank index up over 11% so far this year, BoB outperforms index

IANS

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