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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

<ul><li>The 30-share BSE index gyrated 473 points in the first 30 minutes of trade, and NSE Nifty fell 41.85 points.</li><li>Here’s a list of the top losers and gainers in the Nifty pack. </li><li>These are the top stocks that are buzzing in trade today.</li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider.</a> </li></ul>Choppy start on Dalal Street with Indian benchmark indices losing ground in early trade on Monday. Both Sensex and Nifty saw some weakness, tracking losses in index-heavyweights Reliance Industries, <keyword id="6357150" type="ORGANIZATION" weightage="20" keywordseo="tcs">TCS</keyword>, and Infosys amid sustained foreign fund outflow. Investors are also cautious ahead of the US presidential election that takes place tomorrow. The 30-share BSE index gyrated 473 points in the first 30 minutes of trade, and NSE Nifty fell 41.85 points. Here’s a list of the top losers and gainers in the Nifty pack. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top Nifty Gainers </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top Nifty Losers </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IndusInd Bank </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">RIL </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Bank </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Divi’s lab </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bharti Airtel </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Tech </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Bank </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Eicher Motors </td></tr><tr><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI India </td><td style="border-left:solid #000000 0.9907650000000001pt;border-right:solid #000000 0.9907650000000001pt;border-bottom:solid #000000 0.9907650000000001pt;border-top:solid #000000 0.9907650000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td></tr></tbody></table>*as of November 2, 10:50 am These are the top stocks in news today. Reliance Industries down 5% The shares of Mukesh Ambani-owned Reliance Industries (<keyword id="6484187" type="COMPANY" weightage="20" keywordseo="ril">RIL</keyword>) lost 5% during early trading on Monday after the company reported a 32.5% year-on-year decline in its standalone net profit to ₹6,546 crore. <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-ril-second-quarter-earnings-profit-and-revenue/articleshow/78955070.cms">Refining and petrochemicals</a>, which together make for over three-fourth of the company’s revenue, took a major hit during the quarter. The overall revenue declined 32.7% year-on-year to ₹61,246 crore during the same period. <keyword id="6653" type="CITY" weightage="20" keywordseo="ICICI-bank">ICICI Bank</keyword> gains 5% The shares of private lender ICICI Bank gained over 5% after it reported<a href="https://www.businessinsider.in/stock-market/news/icici-bank-surges-6-after-it-posts-six-fold-jump-in-net-profit-at-over-42-billion/articleshow/78992379.cms"> over a six-fold jump in its standalone net profit at ₹4,251 crore</a> for the second quarter ended September 30. The company’s total standalone income stood at ₹23,650.77 crore, it said in a regulatory filing. Hero MotoCorp trades 2% The shares of India’s largest two-wheeler giant Hero MotoCorp gained 2% on Monday after it registered its <a href="https://www.businessinsider.in/stock-market/news/hero-motocorp-shares-gain-after-it-logs-highest-ever-sales-in-october/articleshow/78992126.cms">highest-ever monthly sales</a> in October. The two-wheeler maker reported a 35% rise in its domestic wholesales at 7.91 lakh units. <keyword id="46717" type="CITY" weightage="20" keywordseo="IndusInd-Bank">IndusInd Bank</keyword> trades 7% higher IndusInd Bank gained over 7% on Monday despite the bank reporting a 53% year-on-year decline in its standalone net profit at ₹647.04 crore in the quarter ended September 30. The bank’ ’s gross Non-Performing Assets (NPAs) were nearly flat at 2.21% of the gross advances as of September 30 vs 2.19% in the year-ago period. <keyword id="6355975" type="COMPANY" weightage="20" keywordseo="axis-bank">Axis Bank</keyword> trades 3% higher The shares of Axis Bank were trading 3% higher after the bank had revised the agreement with Max Financial, the promoter of Max Life after the Reserve Bank did not allow it to acquire 17% stake in Max Life Insurance directly. The lender said it will now acquire a 19% stake in the insurance firm along with its subsidiaries. Future Retail opens 1.5% higher The shares of Future Retail opened 1.5% higher after Future Retail informed Indian stock exchanges BSE and NSE that <a href="https://www.businessinsider.in/business/news/future-retail-reliance-deal-bse-to-consult-sebi-after-amazons-request-heres-all-that-has-happened-so-far/articleshow/78949099.cms">Amazon’ entirely misconceived’ </a>the agreement between Amazon and Kishore Biyani (CEO of Future Group), same as between Future Retail and its promoters. The filing said that the stock exchanges must not consider the order of a Singapore arbitration court. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/hero-motocorp-shares-gain-after-it-logs-highest-ever-sales-in-october/articleshow/78992126.cms" data-type="tilCustomLink">Hero Motocorp shares gain after it logs ‘highest-ever’ sales in October</a> <a href="https://www.businessinsider.in/business/news/former-hdfc-bank-ceo-aditya-puri-joins-carlyle-group-as-senior-advisor/articleshow/78991270.cms" data-type="tilCustomLink">Former HDFC Bank CEO Aditya Puri joins Carlyle Group — will advise the global investment firm on Asia bet</a>

Top stock movers — Future Retail, RIL, TCS, HCL Tech, ICICI Bank, Axis Bank, IndusInd Bank, and others

Mumbai, Jul 10 () Top five private sector banks may see their slippages double to 5 per cent this fiscal due to the poor loan offtake and the moratorium-driven contraction in net interest margins, warns a report. These five banks--HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank--collectively control a quarter of the system and three-fourths of the private banking space, according to a report by India Ratings on Friday. "We forecast FY21 slippages to nearly double to around 5 per cent for these banks from 2.3 per cent in FY19 and 2.7 per cent in FY20, even though net slippages would be lower if refinancing remains a challenge, resulting in a 4 per cent contraction in their net interest margin," says the report. As loan demand remains tepid, banks are parking their excess liquidity in low yielding alternatives such as government bonds and top-rated corporate securities due to their higher credit risk perception and widening duration spreads, even as deposit inflows have been robust. On the other hand, growth in deposits for these top five private banks in FY20 was 18.8 per cent which was 18.5 per cent in FY19, while loan growth declined to 15 per cent from 19.1 per cent during this period. Additionally, the Reserve Bank has injected Rs 1.7 lakh crore of liquidity into the system over the last six months through open market operations and secondary market purchases. Without quantifying, the report expects a significant spike in delinquent assets due to the deep troubles the economy is facing due to the impact of the GDP destruction on the banking sector in the aftermath of COVID-19 pandemic. Additionally, banks have moved a large amount of the surplus liquidity into reverse repo where the rates have declined by 215 bps in the last one year, yielding 3.35 per cent and with cost of funds falling to 5-6 per cent, this could result in a negative carry. Over FY17-FY20, net advances of these five private banks and bank credit grew at a CAGR of 15.7 per cent and 9.1 per cent, respectively, while the unsecured retail portfolio grew at a CAGR of 21.8 per cent, and these give banks have increased the proportion of unsecured retail portfolio over the same period. Analysts at the agency also expect pre-provisioning operating profit or operating buffers of these lenders to be about 80 bps lower than their steady state pre-provisioning operating profit, which in FY20 was 4.9 per cent which may curtail their ability to withstand credit costs without capital erosion, the report warned. Analysts at the agency attributed fall in operating buffers as outcomes of lower portfolio yields due to an increase in slippages; poor loan growth and transaction volumes and the resultant lower fee and other income; slower pace of repricing for deposits reflecting the falling interest rates; and higher liquidity deployed in low earning government securities or under reverse repos. Stating that the impact of the rising bad loans "will not be benign," the report notes that this comes at a time when sector was putting its house in order after the last six painful years on the corporate side, even though retail, SME and agri loans were already showing up pain areas before the pandemic hit all of us. BEN MR

Top 5 pvt banks stare at NPAs doubling to 5% in FY21

<ul><li>The SGX Nifty was up 0.47% at 7:50 am, indicating a higher start for Nifty50. </li><li>Here’s a list of stocks to watch for in trade today. </li><li><a href="https://www.businessinsider.in/">Check out the latest news and updates on Business Insider. </a></li></ul>Amidst positive cues from the Asian markets, the Indian equities are likely to open higher on Monday. The SGX Nifty was up 0.47% at 7:50 am, indicating a higher start for Nifty50. The Hang Seng Index was trading at 0.64% higher at 7:50; even markets in Australia were trading in the green. These are the stocks to watch out for during the trading session on November 2: Reliance Industries (RIL) Mukesh Ambani-owned Reliance Industries (RIL) reported a 32.5% year-on-year decline in its standalone net profit to ₹6,546 crore. <a href="https://www.businessinsider.in/business/corporates/news/reliance-industries-ril-second-quarter-earnings-profit-and-revenue/articleshow/78955070.cms">Refining and petrochemicals</a>, which together make for over three-fourth of the company’s revenue, took a major hit during the quarter. Jio and <a href="https://www.businessinsider.in/retail/news/reliance-retail-clocks-nearly-as-much-revenue-as-a-year-earlier-as-covid-shock-abates-but-the-amazon-threat-looms/articleshow/78955666.cms">Reliance Retail</a> continue to be the shining star in RIL’s portfolio — <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-beats-vodafone-idea-but-falls-well-short-of-airtels-revenue-growth-in-the-september-quarter/articleshow/78955325.cms">Jio </a>recorded a 32% y-o-y growth, and Retail was up 42%. The shares of RIL ended 2% higher on Friday. Future Retail More developments in the ongoing legal tussle between Reliance, Future Retail against Amazon. Future Retail has informed Indian stock exchanges BSE and NSE that Amazon’ entirely misconceived’ the agreement between Amazon and Kishore Biyani (CEO of Future Group) same as between Future Retail and its promoters. The filing said that the stock exchanges must not take into cognisance the order of a Singapore arbitration court. RIL has also set aside ₹1500 crore for future group arbitration, it said in the quarterly filing to stock exchanges. The shares of Future Retail ended flat on Friday. ICICI Bank ICICI Bank reported an over six-fold jump in its standalone net profit at ₹4,251 crore for the second quarter ended September 30. The bank had posted a net profit of ₹655 crore during the same quarter last year. The company’s total standalone income stood at ₹23,650.77 crore, it said in a regulatory filing. The shares of ICICI Bank ended 1.60% lower on Friday. IndusInd Bank IndusInd Bank reported over 53% decline in its standalone net profit at ₹647.04 crore in the quarter ended September 30. The bank’ ’s gross Non-Performing Assets (NPAs) slightly increased to 2.21% of the gross advances as of September 30 from 2.19% in the year-ago period. The shares of IndusInd Bank ended 0.59% lower on Friday. Axis Bank Axis Bank on Friday said that it had revised the agreement with Max Financial, the promoter of Max Life after the Reserve Bank did not allow it to acquire 17% stake in Max Life Insurance directly. The lender said it will now acquire a 19% stake in the insurance firm along with its subsidiaries. The shares of Axis Bank ended 0.58% lower on Friday. Maruti, Tata Motors, M&amp;M, Hero and other auto stocks The automakers post strong sales numbers on the back of festive season uptick. India’s biggest automaker Maruti Suzuki said it sold 182,448 vehicles in October, an increase of nearly 19% compared to the same period last year. Hero MotoCorp also registered its highest-ever monthly sales in October. The two-wheeler maker reported a 35% rise in its domestic wholesales at 7.91 lakh units. Tata Motors sales were highest in at least 99 months. The company sold 80% more vehicles compared to last year. Although, Mahindra &amp; Mahindra (M&amp;M) was down 14.52% (YoY) as the commercial vehicle segment continued to bear the brunt. The shares of Maruti and Hero ended 3% lower on Friday, whereas Tata Motors was up 1%, M&amp;M was up 0.47%. SEE ALSO: <a href="https://www.businessinsider.in/politics/world/news/where-biden-and-trump-stand-in-the-polls-2-days-out-from-the-election/articleshow/78989788.cms" data-type="tilCustomLink">Where Biden and Trump stand in the polls 2 days out from the election</a> <a href="https://www.businessinsider.in/thelife/news/futuristic-architecture-entertainment-hubs-and-kinetic-solar-panels-this-is-what-spaceports-could-look-like-if-commercial-space-flights-become-a-reality/articleshow/78983110.cms" data-type="tilCustomLink">Futuristic architecture, entertainment hubs and kinetic solar panels: This is what spaceports could look like if commercial space flights become a reality</a>

Top stocks to watch — RIL, Future Retail, Hero Moto, Maruti, Tata Motors, Axis Bank, ICICI Bank, and others

New Delhi, Jun 26 () S&amp;P Global Ratings on Friday lowered its ratings on Axis Bank due to increased economic risks for banks operating in India. S&amp;P also put Indian Bank ratings on 'Credit Watch' because it expects a high risk that the public sector bank's credit profile could weaken over the coming quarters due to COVID-19 as well as the merger with the weaker Allahabad Bank. "We lowered our ratings on Axis to reflect our expectation that heightened economic risks facing India's banking system will affect the bank's asset quality and financial performance. While Axis' asset quality is superior to the Indian banking sector average, its level of non-performing assets (NPAs) will likely remain high compared to international peers'," S&amp;P said. It expects the bank to maintain its strong market position and adequate capitalisation. The stable outlook reflects our view that our ratings on Axis already factor in some deterioration in the bank's asset quality and performance over the next 12 months. The agency said economic conditions have turned adverse for Indian banks due to COVID-19 and drastic efforts to curtail the spread of the virus have resulted in a sharp economic contraction. "The government's stimulus package, with a headline amount of 10 per cent of GDP, has about 1.2 per cent of direct stimulus measures, which is low relative to countries with similar economic impacts from the pandemic. The remaining 8.8 per cent of the package includes liquidity support measures and credit guarantees that will not directly support growth," S&amp;P added. It has forecast a 5 per cent contraction in the economy in fiscal 2021. S&amp;P expects tough operating conditions to lead to a rise in non-performing loans (NPLs), credit costs, and delays in recoveries for the banking system. "In our base case, we expect the weak assets of Indian banks to shoot up to 13 -14 per cent of gross loans by March 31, 2021. Our forecast is higher than the peak of 11.6 per cent witnessed in fiscal 2018, and about 8.5 per cent estimated as on March 31, 2020," S&amp;P said. The agency said it anticipates the resolution of weak assets to be delayed until at least fiscal 2022. Consequently, banks will likely be saddled with a large stock of weak loans in fiscal 2022 too. "Steps taken by the government and the central bank should provide some respite by delaying recognition of some of the weaker loans, in our view," S&amp;P noted. JD BAL BAL

S&P lowers Axis Bank rating on increased economic risks for banks

New Delhi, Apr 28 () Axis Bank on Tuesday reported a standalone net loss of Rs 1,387.78 crore for March quarter of 2019-20 as provisioning for bad loans and contingencies soared.The private sector lender had reported a net profit of Rs 1,505.06 crore in the same quarter of the previous financial year.Income during the latest quarter stood at Rs 20,219.57 crore. It was Rs 18,324.31 crore in the year-ago period, Axis Bank said in a regulatory filing.Provisions for bad loans and contingencies in the fourth quarter of the last fiscal were at Rs 7,730.02 crore. In the year-ago quarter the provisions stood at Rs 2,711.43 crore.On consolidated basis also, the lender posted a net loss of Rs 1,250.09 crore during the quarter ended March 2020. There was a net profit of Rs 1,677.90 crore in the year-ago period. Income increased to Rs 20,786.23 crore in the latest quarter from Rs 18,950.85 crore in the same period a year ago.Gross non performing assets (NPAs) fell to 4.86 per cent of the gross advances as on March 31, 2020 from 5.26 per cent by the year- ago same period.Net NPAs or bad loans too came down to 1.56 per cent from 2.06 per cent.The bank said the extent to which the COVID-19 pandemic will impact the bank's provision on assets will depend on the future developments, which are highly uncertain. Among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government mandated or elected by the bank, will also impact the provisions. It said the pandemic has affected the world economy including that of India, leading to significant decline and volatility in financial markets and decline in economic activities. Axis Bank stock closed 6.61 per cent higher at Rs 455.55 on the BSE. KPM ANUANU

Axis Bank Q4 net loss at Rs 1,388 cr

Mumbai, Dec 1 () Third largest private sector lender Axis Bank is setting aside more capital, more than twice over the regulatory requirements, for loans in sectors it has identified as "stressed", a senior official has said.
The bank is maintaining a standard asset provisioning of 1 percentage point for bad loans in such sectors, as against the regulatory provision of 0.40 per cent, its executive director Rajiv Anand told .
The move, which is being followed at least since April, comes amid continuing concerns on high quantum of non-performing assets in its book. The high level of NPAs and the ensuing provisioning have impacted the profits of a majority of lenders, including Axis Bank, over the past four years.
"In sectors identified as high risk, we have increased the standard provisioning to 100 bps as against the mandated 40 bps to take care of any concerns," Anand said.
In April 2019, the bank had first disclosed that it had started to provide extra capital, but had not given out the exact levels of the additional provisioning or spelled out the sectors.
When asked if the troubled sectors like real estate or non-bank finance companies (NBFCs) are included on the list, Anand declined to specify the sectors which the bank has identified as stressed.
"We have not closed lending to any sector because of the difficulties that it may be going through. In each sector, there are always strong names which is better rated and has a resilient business model," Anand made it clear.
Concerns on higher capital burn due to policies like these can be placated by ensuring that the lending to a particular sector is not very high, which is decided by an internal team.
Anand said the bank has overhauled its risk assessment framework, wherein loan origination is separated from underwriting, and has a chief credit officer reporting directly to the chief executive.
Amid reports of its larger rival ICICI Bank shuttering its project finance, Anand hinted that Axis Bank is also following a similar strategy.
"We generally avoid project finance and our focus is now much more towards cash flow generating businesses and look at the relationship in a manner where we can deliver the full capabilities of our group to the customer," he said.
Anand avoided a direct reply when asked if there is demand from greenfield projects but said it will not be apt to classify the loans merely as refinance, adding it is witnessing working capital demand as well.
The bank is targeting to grow its overall book 5-8 per cent above the system average, and that private sector banks have been garnering a higher percentage of market share in both loans and deposits lately whereas state-owned banks still are starved of growth capital.
In the comments that come amid difficulties on asset quality or mergers plaguing public sector banks, Anand said over half of the incremental liabilities are coming to the private sector banks, while in loans, the share is at a much higher 75 per cent.
On the macro economic prospects, Anand pins hopes on more monetary easing and growth-enhancing measures put forth by the government, but concedes that the second half will also be difficult.
The pick-up will be visible from the first half of FY21, he said, on the back of growth slipping to an over six-year low of 4.5 per cent for the September quarter. AA BEN BAL

Axis Bank more than doubles loan provisions for troubled sectors

New Delhi, Apr 29 () Shares of Axis Bank on Wednesday dropped nearly 4 per cent after the company reported a standalone net loss of Rs 1,387.78 crore for March quarter of 2019-20. The scrip closed the day at Rs 438.85, 3.67 per cent lower at the BSE. During the day, it declined 6.15 per cent to Rs 427.50. On the National Stock Exchange (NSE), scrip fell 3.64 per cent to close at Rs 438.85. During the day, it tumbled 6.47 per cent to Rs 425.95. Axis Bank was the biggest laggard among the 30-share BSE index and NSE Nifty. In traded volume terms, 20.89 lakh shares were traded at the BSE and 6.15 crore units on the NSE during the day. Axis Bank on Tuesday reported a standalone net loss of Rs 1,387.78 crore for March quarter of 2019-20 as provisioning for bad loans and contingencies soared. The private sector lender had reported a net profit of Rs 1,505.06 crore in the same quarter of the previous financial year. Income during the latest quarter stood at Rs 20,219.57 crore. It was Rs 18,324.31 crore in the year-ago period, Axis Bank said in a regulatory filing. Provisions for bad loans and contingencies in the fourth quarter of the last fiscal were at Rs 7,730.02 crore. In the year-ago quarter the provisions stood at Rs 2,711.43 crore. On consolidated basis also, the lender posted a net loss of Rs 1,250.09 crore during the quarter ended March 2020. There was a net profit of Rs 1,677.90 crore in the year-ago period. Gross non-performing assets (NPAs) fell to 4.86 per cent of the gross advances as on March 31, 2020 from 5.26 per cent in the year-ago period. SUM SHWSHW

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