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The <keyword id="6354335" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (RBI) has imposed <keyword id="512003" type="General" weightage="20" keywordseo="penalties" source="Orion">penalties</keyword> to the tune of Rs 40.39 crore on banks, non-banking financial companies (NBFCs) and other entities for breach of norms during 2022-23, Minister of State for Finance Bhagwat Karad said in a written reply to the Lok Sabha on Monday. As many as 176 of these cases involving fines of Rs 14.04 crore pertained to <keyword id="6554737" type="General" weightage="20" keywordseo="cooperative-banks" source="Orion">cooperative banks</keyword>. <keyword id="141219" type="General" weightage="20" keywordseo="private-sector-banks" source="Orion">Private sector banks</keyword> were fined Rs 12.17 crore while public sector banks (PSBs) were levied penalties of Rs 3.65 crore, foreign banks Rs 4.65 crore, and NBFCs ended paying up Rs 4.39 crore. "RBI has informed that it is mandated to take enforcement action as per Enforcement Policy and Framework approved by the Board for Financial Supervision of RBI, in the form of imposition of monetary penalty on regulated entities for contraventions of different statutes and directions," the Minister stated. The RBI issued guidelines on fair practices code to be adopted by banks, NBFCs, and HFCs and these covered various aspects of lending, he added.

RBI penalties on banks, NBFCs add up to Rs 40.39 crore for 2022-23

The <keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) has asked state governments not to transfer their deposits out of private sector banks saying apprehensions about the safety of deposits in private lenders are highly misplaced. In a letter written to chief secretaries of all states, the central bank said moving deposits out of private sector banks could have implications for banking and financial sector stability. The letter came after reports suggested that some state governments have advised government bodies and other entities under their jurisdiction to transfer their funds held with private sector banks to public sector lenders. This follows the crisis at <keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> where the RBI has superseded the bank's board and placed restrictions on withdrawals. "We strongly believe that such a move can have banking and financial sector stability implications," the RBI wrote. "We feel that apprehension on the safety of deposits in private sector banks is highly misplaced and will not be in the interest of stability of the financial system in general and the banking system in particular." It requested state governments to reconsider any decision they might have taken in this regard or are in the process of taking such decision. "The Reserve Bank has adequate powers to regulate and supervise the private sector banks and by using these powers, it has ensured that the depositors' money is entirely safe," the letter said. The RBI said the resolution of weak private sector banks in the past has been done in a manner that the depositors are not put to loss. "It is precisely with a view to retaining depositors' confidence in private sector banks and mitigating their hardship that, after the imposition of a moratorium on <keyword id="436044" type="DOMAIN" weightage="20" keywordseo="Yes-Bank-Ltd">Yes Bank Ltd</keyword>, the RBI has drawn up a draft scheme without any delay and we are making every effort to expedite the finalisation of the scheme," it added.

RBI assures state governments that their deposits are safe in private banks

<ul><li><keyword id="6357149" type="COMPANY" weightage="20" keywordseo="hdfc-bank">HDFC Bank</keyword>’s share price dipped by nearly 1% within hours of it making a new record for itself and crossing ₹8 lakh crore in valuation on November 25.</li><li>This makes India’s largest private sector lender bigger than the likes of <keyword id="158169" type="CITY" weightage="20" keywordseo="BlackRock">BlackRock</keyword> <keyword id="112859" type="CITY" weightage="20" keywordseo="Lockheed-Martin">Lockheed Martin</keyword> and <keyword id="6358584" type="UNKNOWN" weightage="20" keywordseo="HSBC">HSBC</keyword> on the US stock market.</li><li>HDFC Bank’s stock had already hit a fresh 52-week high on November 24, when the CLSA raised its target price. </li></ul>HDFC Bank crossed a new milestone as its market capitalisation hit ₹8 lakh crore ($108 billion) when the Indian exchanges opened on November 25, strengthening in place as India’s third most valuable company. Globally, this makes India’s largest private sector bank bigger than US behemoths like Lockheed Martin, HSBC and BlackRock. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market valuation </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$108 billion </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BlackRock </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$106.65 billion </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lockheed Martin </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$105.89 billion </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HSBC </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$104.46 </td></tr></tbody></table>Source: BSE, NYSE as per today’s USD/INR conversion rate However, the euphoria was short-lived. By afternoon trade, the stock dipped by over 1% to ₹1424.75. This has brought its valuation back down to just under the ₹8 trillion mark at ₹7.92 trillion. Nonetheless, HDFC Bank is the first lender and the third Indian company — aside from Tata Consultancy Services (TCS) and Reliance Industries — to have hit this mark. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td colspan="2" style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top companies by market capitalisation: </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market cap </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reliance Industries </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹13.29 lakh crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tata Consultancy Services (TCS) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10.21 lakh crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7.9 lakh crore </td></tr></tbody></table>Source: BSE Today’s surge comes after India’s latest private sector lender had already hit a fresh 52-week high yesterday. This after brokerage CLSA raised the target price of the lender to ₹1,700 this week. In addition, there was already an air of optimism around private sector banking stocks as the Reserve Bank of India (RBI) proposed new guidelines for ownership, including the possibility of increasing promoters’ stake from the current 15% to 26%. HDFC Bank has been one of the best performers over the last three months So far this year the stock has surged by nearly 14% despite the impact of the COVID-19 pandemic. The last three months, in particular, have been one of the best performing for the bank. HDFC Bank is among the seven financial companies <a href="https://www.businessinsider.in/stock-market/news/checkout-top-10-gainers-on-the-nifty-50-in-the-last-three-months/articleshow/79386155.cms">among the top 10 gainers on the NIFTY50 since September.</a> During the second quarter, the bank’s revenues were up by 15% as compared to last year at ₹21,868.8 crore. Its profits also increased by 18.4% year-on-year (YoY) to ₹7,513.1 crore. HDFC Bank has also been <a href="https://www.businessinsider.in/finance/banks/news/hdfc-bank-increases-provisions-for-bad-loans-as-impact-of-covid-19-continued-to-bear-down-in-second-quarter/articleshow/78719656.cms">cautious in its commentary</a> with the Supreme Court’s stay on declaring accounts as bad loans until the hearing on the RBI’s moratorium is complete. The bank’s management has said that there haven’t been any requests for restructuring granted as of October. However, they also highlighted that borrowers have until December to file their applications leaving room for the situation to change if warranted. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/bank-employees-to-go-on-a-nationwide-strike-tomorrow-in-solidarity-with-farmers-protests/articleshow/79402946.cms">Bank employees to go on a nationwide strike on November 26 in solidarity with farmers’ protests</a> <a href="https://www.businessinsider.in/tech/apps/news/twitters-verification-badges-are-set-to-make-a-return-here-all-the-terms-and-conditions-of-how-to-apply/articleshow/79402586.cms">Twitter's coveted blue ticks are making a comeback next year along with new account types and labels</a> <a href="https://www.businessinsider.in/science/space/news/elon-musk-led-space-x-is-ready-to-conduct-the-first-major-test-of-its-starship-rocket-next-week-and-set-a-new-record/articleshow/79401235.cms">Elon Musk-led Space X is ready to conduct the first major test of its Starship rocket next week and set a new record</a> <a href="https://www.businessinsider.in/tech/apps/news/15-of-the-43-apps-india-banned-today-are-dating-apps/articleshow/79389714.cms">One-third of the latest Chinese mobile apps banned by India are dating services</a>

India's largest private sector bank is now bigger than the likes of Lockheed Martin, HSBC or BlackRock

New Delhi, Jun 27 () Complimenting public sector banks for moving fast on Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, CII president Uday Kotak on Saturday expressed hope that the scheme will gather further traction in coming weeks from private banks side. The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month. "Private sector banks in the case of the guaranteed loan scheme have taken a little longer than the public sector banks. I must compliment SBI Chairman Rajnish Kumar and his team for moving at a great speed. So, I do accept that," Kotak, who is also managing director of Kotak Mahindra Bank, said. On May 21, the Cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for the MSME sector, hit hard by economic slowdown triggered by outbreak of COVID-19 pandemic. The scheme became operational from June 1. "Private sector banks started a few days later, but you will see catch up happen. "Three-four weeks from now, the MSME sector will be surprised at how both the private and the public sector have responded to this scheme of Rs 3 lakh crore and a very significant amount of money will be disbursed within the guidelines...you will see the significant growth happen in terms of the sanctions and disbursements," he said. Under the 100 per cent ECLGS, the loan amounts sanctioned by public sector banks increased to Rs 42,739.12 crore, of which Rs 22,197.54 crore has been disbursed at the end of June 20. Meanwhile, private sector banks sanctioned Rs 32,687.27 crore while disbursed Rs 10,697.33 crore. Kotak said that for private sector banks conservatism arises as they need to safeguard the interest of the depositors, whose trust in the private sector is critical for their functioning. On the issue of eligibility under the scheme, he said that in view of the revision in turnover limit for MSMEs from Rs 100 crore to Rs 250 crore, the eligibility conditions should also be relaxed similarly, and CII would be taking this suggestion to the government. Kotak advised MSMEs that they should not only depend on banks for accessing credit but also look at other avenues like raising private equity or risk capital. He also said that MSMEs are not only the backbone of the economy but are a critical part of CII theme for 2020-21 "Building India for a New World: Lives, Livelihood, Growth". MSMEs need risk capital to grow and CII would help them in strengthening their internal housekeeping so that they can get better access to credit at competitive rates, he added. KPM DP BAL BAL

Pvt banks to catch up soon on credit guarantee scheme for MSMEs: Kotak  

<ul><li><keyword id="46717" type="CITY" weightage="20" keywordseo="IndusInd-Bank">IndusInd Bank</keyword>, <keyword id="6986952" type="UNKNOWN" weightage="20" keywordseo="IDFC-First-Bank">IDFC First Bank</keyword>, and <keyword id="97186" type="CITY" weightage="20" keywordseo="JK-Bank">J&amp;K Bank</keyword> stocks are soaring in trade today, led by the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) committee’s recommendation to increase the cap on promoters’ stake from 15% to 26%.</li><li>The proposed change comes at a time when banks need the infusion of funds to deal with the outcome of the COVID-19 pandemic on borrowers.</li><li>Billionaire Uday Kotak, promoter of <keyword id="46013" type="CITY" weightage="20" keywordseo="Kotak-Mahindra-Bank">Kotak Mahindra Bank</keyword>, may now also be able to cement his position in courts where he was arguing to retain 26% of his shareholding.</li></ul>IndusInd Bank’s shares are up over 4% after the Reserve Bank of India’s (RBI) Internal Working Group (IWG) recommended that the cap on promoters’ stake, in the long run, should be raised from the current level of 15% to 26%. <div type="image" title="indusind bank share price" msid="79363913" hostid="261" caption="&amp;lt;p&amp;gt;IndusInd Bank share price over the last one month&amp;lt;/p&amp;gt;"></div> This brings grand tidings for the bank as its promoter, the Hinduja Group, has indicated its interest to increase shareholding. “We further estimate that, at the current market price, promoters could infuse up to ₹10,000 crore to increase their stake to 26% at the bank versus 14.85% currently,” said Motilal Oswal Financial Services in its report. Other banks are also gaining ground, with Jammu &amp; Kashmir Bank leading the pack, up by 13.3%, and IDFC First Bank also soaring by 6.4%. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% change in share price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jammu &amp; Kashmir Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13.30 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDFC First Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IndusInd Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.15% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">RBL Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.77% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Mahindra Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-0.14% </td></tr></tbody></table>Source: Nifty/BSE, share prices as of 11:20am Kotak Mahindra Bank’s share price continues to trade flat While Kotak Mahindra Bank’s shares continue to trade flat, the increase in the cap on promoter stake is favourable for its promoter Uday Kotak as well. If accepted, this recommendation may cement the case he’s making to be allowed to retain a 26% stake in Kotak Mahindra Bank. <div type="image" title="kotak mahindra bank share price" msid="79363928" hostid="261" caption="&amp;lt;p&amp;gt;Kotak Mahindra Bank share price over the past one month&amp;lt;/p&amp;gt;"></div> “We view this as a positive development across the banking sector, especially for the promoter-driven banks. This would help promoters have more ‘skin in the game’,” noted Nirmal Bang Securities. According to analysts, increasing the cap on promoters’ sharing holding in banks also levels the playing field for other stakeholders that may have already reduced their shareholder as per RBI’s existing guidelines. The recommendation is also coming at a crucial time when banks need more capital to deal with the outcome of the COVID-19 pandemic after the stay on moratorium is lifted by the Supreme Court. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/how-to-earn-money-at-home-from-googles-task-mate/articleshow/79362215.cms">Google is testing ‘Task Mate’ in India, which lets users earn money for doing tasks on their smartphones</a> <a href="https://www.businessinsider.in/tech/apps/news/hdfc-banks-net-banking-upi-services-and-atms-down-due-to-data-centre-outage/articleshow/79344484.cms">HDFC Bank’s net banking, UPI service and ATMs were down due to a 'data centre outage' but RBI demands more detailed information</a> <a href="https://www.businessinsider.in/science/environment/news/mount-everest-home-to-microplastics-and-melting-glaciers/articleshow/79324609.cms">Microplastics found at the highest point on Earth as the glaciers around Mount Everest’s death zone melt</a>

IndusInd Bank surges over 4% after RBI committee proposes to increase the cap on promoter stake in private sector banks

Mumbai, Mar 18 () The crisis at Yes Bank has shaken the trust of a few state governments and large depositors who are pulling out large amounts from other private sector banks as well. The panic comes as the Yes Bank crisis happened within six months of one of the largest cooperative banks, Punjab &amp; Maharashtra Cooperative Bank, went belly up last September after the discovery of massive corruption at the bank and also 73 per cent of its assets turned dud with just one customer, HDIL. The current run on private banks comes despite repeated assurance from the government and regulator Reserve Bank of India to depositors about the safety of their money and also of the system. Ironically, other banks were caught in a crisis even as Yes Bank made a dramatic turnaround with its resolution and returning to normal operation from Wednesday evening. The panic among the public and some states like Maharashtra was such that the RBI was forced to write to all chief secretaries last week informing them of the sound health of private banks and asked them to reconsider their decision to shift deposits to public sector banks. But, despite all these, there were more near-run-like situation on other banks like IndusInd Bank, Karur Vasya Bank and Laxmi Vilas Bank, which had also taken a huge beating on their market value. IndusInd counter tanked nearly 50 per cent on Wednesday in intra-day trade and closed with a loss of 24 per cent at Rs 459.85 on the BSE whose benchmark continued to bleed and lost another 5.6 per cent, while RBL closed in the green after a massive route on Tuesday. Yes Bank's deposit base eroded by Rs 72,000 crore to Rs 1.37 lakh crore as of March 5 from Rs 2.09 lakh crore as at the end of December 2019, according to data shared by the then crippled bank last Friday while announcing the third quarter earnings. Private sector lenders have been communicating to their customers about their strong capital positions but it has not put depositors at ease. In a late-night statement on Tuesday, IndusInd Bank said its deposits, both retail and corporate segments, are steady. "However, a couple of state government entities have made withdrawals amounting to less than 2 per cent of our total deposits," it said. Its smaller peer RBL Bank also said it saw deposit withdrawals by large depositors and a few state government entities. "While there has been no material impact on our retail deposits, there have been some withdrawals from institutional depositors and a couple of state organisations constituting about 3 per cent of our total deposits in the last one week," RBL Bank said in a statement. Both the banks said they are actively engaging with these depositors and the respective states to address their concerns. Earlier, four private sector lenders Kotak Mahindra Bank, Karnataka Bank, RBL Bank and Karur Vysya Bank had assured customers about the safety of their money and their strong fundamentals. On Monday, RBI Governor Shaktikanta Das had said there was no instance in the nation's banking history where bank depositors had lost their money. Speaking on the decision of a few states to shift their deposits from private banks to state-run banks, Das had said, "The health of the banking sector, including private banks, is safe and, therefore, there is no reason for the state authorities to take away deposits from private banks." In a letter to chief secretaries of all states late last week, the RBI had said the apprehension on safety of deposits in private sector banks is highly misplaced and any action on pulling out of funds from private sector banks may impact the stability of financial system. "We strongly believe that such a move can have banking and financial stability implications," the RBI said in the letter. The Indian Banks Association Chief Executive Sunil Mehta has also said there is no threat to depositors' money in any banks. HV BEN HRS

Yes Bank continues to roil other private lenders, IndusInd latest

Mumbai, Mar 27 () Allaying depositors' concerns, RBI Governor Shaktikanta Das on Friday asserted there Indian banking system is safe, and termed linking banks' share prices to safety of deposits as "fallacious" thinking.The comments, which came after a massive correction in banking stocks following the Yes Bank crisis and coronavirus outbreak, also urged depositors not to resort to panic withdrawals."Let me reiterate that the Indian banking system is safe and sound."In the recent past, COVID-19 related volatility in the stock market has impacted share prices of banks as well, resulting in some panic withdrawal of deposits from a few private sector banks. It would be fallacious to link share prices to safety of deposits," Das said.Depositors of commercial banks including private sector banks need not worry on the safety of their funds, he added."I would, therefore, urge members of public as well as the public authorities, who have deposits in private sector banks, not to resort to any panic withdrawal of their funds," Das said.It can be noted that a few states like Maharashtra had urged all the departments to pull out money from private sector banks despite previous communication from the RBI not to do so.Yes Bank witnessed massive withdrawals ahead of being put under a moratorium by the RBI, but has been reporting normal activity since the restrictions removed on March 18. AA BALBAL

RBI guv urges people not resort to panic buying; says Indian banking system is safe

The <a href="http://www.businessinsider.in/searchresult.cms?query=foreign+direct+investment">foreign direct investment (FDI) </a>in private sector banks might go up by 100%. The matter is now being discussed by the <keyword id="156153" type="ORGANIZATION" weightage="20" keywordseo="Ministry-of-Finance">Ministry of Finance</keyword>, the <a href="http://www.businessinsider.in/searchresult.cms?query=DIPP">department of industrial policy &amp; promotion (DIPP)</a> and the <a href="http://www.businessinsider.in/searchresult.cms?query=RBI">Reserve Bank of India (RBI).</a> 
 As published in an Economic Times report, <keyword id="6653" type="CITY" weightage="20" keywordseo="ICICI-bank">ICICI Bank</keyword>, <a href="http://www.businessinsider.in/searchresult.cms?query=HDFC+">HDFC Bank </a>and other private sector banks might become fully foreign-owned entities, with an aim to raise investments from overseas. 
 
The move will come in connection to the government’s aim of fetching more and more foreign direct investment and open up key sectors for overseas participation. 
 ICICI Bank, as believed by the Reserve <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword>, is one among the two of India’s most systemically important banks. The other one being government-owned <keyword id="6354731" type="CITY" weightage="20" keywordseo="State-Bank-Of-India">State Bank of India</keyword>. 
 Currently, the <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> limit is 74% out of which, 49% is allowed automatically and the rest needs to be approved by the Foreign Investment Promotion Board (FIPB). 
 
According to the officials, who requested anonymity, "The MoF response is still awaited but it is likely they will agree. Any decision will be taken after there is an agreement between all stakeholders." 
 What the industry experts are talking of is the solution that the additional 26% increase be subjected to the approval route. Allowing an increase to the maximum will provide room for further overseas investment, given that this is already close to the 74% limit in <keyword id="6357149" type="CITY" weightage="20" keywordseo="HDFC-bank">HDFC Bank</keyword>, the country's biggest private bank by market capitalisation. While in ICICI Bank, it’s about 70%. 
 Establishing foreign banks to set up wholly-owned subsidiaries in India could also be considered. It would then follow that private sector banks that are majority foreign owned can be 100% overseas held subject to safeguards. Abolishing the limit may help persuade foreign banks to set up local units as the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> wants. 
 
"This may further give India the leverage to push foreign banks to open wholly-owned subsidiaries in the country," said the official. So far, only four foreign banks have applied to the RBI seeking approval for wholly-owned subsidiaries. The idea is that once they do this, such banks would be treated on par with local ones. 
 
In July, the government approved a composite cap policy for foreign investment, implying that there will be no sub-limit within the overall overseas ceiling for any particular investor category. 
 
However, in the case of private banks, the specific sub cap of 49% on foreign portfolio investment remains given concerns over volatile flows into and out of sectors that are critical to the economy. 
Image: indiatimes

Some of India’s top Pvt Banks could soon lose their ‘Indian’ status

New Delhi, Mar 9 () The government is not considering to bring other private sector lenders under scrutiny in the aftermath of Yes Bank crisis that has left lakhs of customers worried if their hard earned money is really safe in banks."There is no such plan," said an official source when asked if the Yes Bank crisis preceded by Punjab and Maharashtra Co-operative (PMC) bank debacle calls for scrutiny of other lenders also.The official said that there has been timely action on part of both the government as well as the Reserve Bank of India (RBI)."The bailout plan has also been announced, so this will be contained," said the official. However, analysts expect that the new generation private sector lenders alongside the cooperatives could face slow growth in their deposits as the banking business is based on trust and confidence.S&amp;P Global Ratings said if Yes Bank's resolution process is prolonged, there is a risk the broader banking environment may take a hit. "The uncertainty may engulf weak financial-sector entities, including non-bank finance companies or private-sector banks. Companies with marginal credit profiles, perceived governance issues, and aggressive risk appetites are particularly vulnerable. These could suffer from extended risk aversion, resulting in rising borrowing costs," S&amp;P Global Ratings said.Yes Bank being put under administration has further eroded the confidence in the financial sector in India. After IL&amp;FS, DHFL and PMC Bank, this is a bigger setback given its size and profile, said Tarun Bhatia, MD &amp; Head of South Asia in the Business Intelligence and Investigations practice of Kroll.Brokerage firm Anand Rathi said deposit growth for select banks may slow down. "The banking system is based on goodwill and trust. Given the recent events (including at PMC and Yes), new age private banks and smaller regional banks may see slower deposit growth, Anand Rathi said in a note on 'India Banks? Likely contagion effect of Yes Bank'.It said although the regulator and the government have in both cases stepped in to safeguard the interests of depositors, "we expect retail investors to park their deposits in PSBs and select larger private banks".At least in the short run, deposit growth in new-age private and smaller regional banks could therefore significantly slow down. This may push up their cost of funds, eating into their margins. Loan growth of private banks with higher C/D (cost to deposit) ratios could be slower, it added."The event raises serious issues around corporate governance in the bank but will now bring all other mid and small size banks under scanner too. The cost of capital will increase for the banks and there could be increase in asset side risks with growing concern on the quality of portfolio they hold," said Bhatia of Kroll -- a division of Duff &amp; Phelps -- on Yes Bank development.During the moratorium period, Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.As per the RBI's draft reconstruction scheme, State Bank of India (SBI) will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan by infusing capital of Rs 2,450 crore. Bank's financial health is not sound as it has failed to raise enough capital under the new leadership of Ravneet Singh Gill, who took charge as managing director and CEO from March 1, 2019. Troubles at new generation private sector started brewing up ever since the Reserve Bank denied extension to its co-founder Rana Kapoor -- who now is in the custody of the Enforcement Directorate for financial mismanagement and money laundering charges -- to continue as MD and CEO in September 2018 and had asked the lender to find a new successor. KPM MKJ

Govt has no plans to bring other pvt sector lenders under scrutiny post Yes Bank crisis: Source

Mumbai, Jun 12 () The Reserve Bank on Friday proposed to review the guidelines on ownership, governance and corporate structure of private sector banks in the backdrop of key developments in the space in the recent years. The five-member internal working group to review the guidelines will be headed by RBI Central Board Director P K Mohanty, the central bank said in a release. The committee shall submit its report by September 30, 2020. "The review would provide an opportunity to harmonise the norms applicable to banks set up at different time periods, irrespective of their date of commencement of business," RBI said. The panel has been asked to review the extant licensing guidelines and regulations relating to ownership and control in Indian private sector banks and suggest appropriate norms, keeping in mind the issue of excessive concentration of ownership and control, as well as international practices and domestic requirements. It will also examine and review the "norms for promoter shareholding at the initial/licensing stage and subsequently, along with the timelines for dilution of the shareholding; and to identify any other issue germane to the subject matter and make recommendations thereon." The review of promoter's stake in private sector banks is significant in the wake of the out-of-court settlement between RBI and Kotak Mahindra Bank earlier this year. According to sources, the regulator has allowed the promoter of Kotak Mahindra Bank to limit stake to 26 per cent with voting right ceiling of 15 per cent. The RBI's extant rules mandate that a private bank's promoter will need to pare holding to 40 per cent within three years, 20 per cent within 10 years and 15 per cent within 15 years. The same applied to Bandhan Bank and IDFC Bank which got in principle approval in 2014. RBI said as macroeconomic, financial market and technological developments continue to influence the future of banking and transform how the entire industry operates, it is necessary to align regulations to meet the requirements of a dynamic banking landscape. RBI has already issued the guidelines for on-tap licensing of universal banks as well as small finance banks in order to leverage these developments for engendering competition through entry of new players. Also, the broad policy relating to ownership and control in Indian private sector banks is guided by the framework issued in February 2005. It further said though the overarching principle that the ownership and control of private sector banks should be well diversified and that the major shareholders are 'fit and proper' remains unchanged, the specific contours have evolved over the years with specific prescriptions being given as part of licensing guidelines issued at various points in the past. "It is, therefore, felt necessary to compressively review the extant guidelines on ownership, governance and corporate structure in private sector banks, taking into account key developments over the years which have a bearing on the issue," it said. Besides Mohanty, the internal working group comprises Sachin Chaturvedi, director, RBI Central Board; and Lily Vadera and S C Murmu, both executive directors. Chief General Manager Shrimohan Yadav has been named convenor of the panel. The panel has also been asked to examine and review the eligibility criteria for individuals/ entities to apply for banking licence and make recommendations on all related issues. Besides, it will study the current regulations on holding of financial subsidiaries through non-operative financial holding company (NOFHC) and suggest the manner of migrating all banks to a uniform regulation in the matter, including providing a transition path. NKD DP CS ABM ABM

You Searched For "private sector banks" and got 10 results

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Some of India’s top Pvt Banks could soon lose their ‘Indian’ status

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Govt has no plans to bring other pvt sector lenders under scrutiny post Yes Bank crisis: Source

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