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The technology platform for providing "<keyword id="22918315" type="General" weightage="20" keywordseo="frictionless-credit" source="keywords">frictionless credit</keyword>" launched by the <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="100" keywordseo="RBI" source="keywords">RBI</keyword>) last year as a pilot project will soon be introduced nationwide soon, said Reserve Banks of India Governor, <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> on Monday. This technology platform will be named "<keyword id="22918314" type="General" weightage="20" keywordseo="Unified-Lending-Interface" source="keywords">Unified Lending Interface</keyword> (ULI)", Das said while speaking in Bengaluru at the event of the Global Conference on Digital Public Infrastructure and Emerging Technologies. Governor Das said "Just like <keyword id="19900911" type="General" weightage="20" keywordseo="UPI" source="keywords">UPI</keyword> transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India. The 'new trinity' of JAM-UPI-ULI will be a revolutionary step forward in India's <keyword id="20018890" type="General" weightage="20" keywordseo="digital-infrastructure" source="keywords">digital infrastructure</keyword> journey." The ULI platform facilitates a seamless and consent-based flow of digital information, including even land records of various states, from multiple data service providers to lenders. The technology platform introduced last year as a pilot projects cuts down the time taken for credit appraisal, especially for small and rural borrowers. Das stated that the ULI architecture has common and standardised APIs, designed for a 'plug and play' approach to ensure digital access to information from diverse sources. "This reduces the complexity of multiple technical integrations. It enables borrowers to get the benefit of seamless delivery of credit, and quicker turnaround time without requiring extensive documentation. By digitising access to customer's financial and non-financial data that otherwise resided in disparate silos, ULI is expected to cater to large unmet demand for credit across various sectors, particularly for agricultural and MSME borrowers," the RBI governor stated. Showing confidence in the newly launched ULI, Das said, "Just like UPI transformed the payments ecosystem, "we expect that ULI will play a similar role in transforming the lending space in India." Speaking about the success of Unified Payment Interface (UPI) Das said, "The current ecosystem of digital payments in India offers a bouquet of simple, safe, and secure options for instant or quick transfer of funds, both large and small value, for businesses and individuals." Das further stated stated that the apex bank is consistently trying to secure the financial system in the country. "We are constantly working on devising policies, approaches, systems and platforms that will make our financial sector stronger, nimble and customer-centric," Das said. Additionally, Das also highlighted that the central bank is constantly working on devising policies, systems, and platforms that will make the financial sector stronger, nimble and customer-centric. Das said that over the last decade, the traditional banking system has undergone an unprecedented technological transformation. By all indications, this process is likely to become even more intense in the coming years, he said. On the country's experience in DPI, he said, "DPI has enabled India to achieve in less than a decade levels of financial inclusion that would have otherwise taken several decades or even more" He also emphasised that UPI system has the potential to evolve into a cheaper and quicker alternative to available channels of cross-border remittances. The Governor also stressed that financial institutions should be abundantly mindful of associated risks of Artificial Intelligence.

After UPI, RBI set to launch Unified Lending Interface (ULI) for friction-less credit

<ul><li>Average balance per account witnessed quarterly growth of 0.8% and grew 5.2% Y-oY as of December 22, 2023. </li><li>The top 10 states constituted 84.6% of the gross loan portfolio as of December 2022. </li><li>Portfolios of ticket size ₹50,000-₹75,000 witnessed Y-o-Y growth of 45%.</li></ul>The growth in <keyword id="12055556" type="General" weightage="20" keywordseo="microfinance-lending" source="Orion">microfinance lending</keyword> in the <keyword id="84064" type="General" weightage="20" keywordseo="rural-market" source="Orion">rural market</keyword> outpaced that of urban markets according to data from CRIF High Mark. While rural markets grew 23.8% annually as of December 2022, the same in urban markets was at 14.6%. The Indian <keyword id="113684" type="General" weightage="80" keywordseo="microfinance" source="Orion">microfinance</keyword> lending sector witnessed a quarterly (September to December) growth of 5.5% and an annual growth of 20% as of December 2022, says the quarterly publication MicroLend by CRIF High Mark. This sector’s live customer base grew by 4.8% and 11.9%, on a quarterly and annual basis, respectively. <cmsannotation type="cmsannotation" annotationid="Average balances and lender exposure" comment="subhead2" text="Average balances and lender exposure">Average balances and lender exposure</cmsannotation> In December 2022, there was a quarterly growth of 0.8% and a year-on-year growth of 5.2% in the average balance per account, while the average balance per borrower saw a quarterly growth of 1% and a year-on-year growth of 8.5%. Additionally, the report shows that 5.9% of borrowers have dealings with four or more lenders. Among the major states, Tamil Nadu has the highest proportion at 10.6%, while West Bengal has the lowest at 1.5%. <cmsannotation type="cmsannotation" annotationid="How the geographical regions fare" comment="subhead2" text="How the geographical regions fare">How the geographical regions fare</cmsannotation> As of December 2022, the gross loan portfolio (GLP) of the top 10 states accounted for 84.6% of the total. Uttar Pradesh, Bihar, and Karnataka experienced the highest quarterly growth rates of 11.1%, 9.0%, and 7.5%, respectively. The average balance per borrower for the top states Tamil Nadu, Bihar, and West Bengal was ₹53,600, ₹54,000, and ₹44,200, respectively. In terms of regional dominance, the microfinance sector was led by the Eastern region at 32%, followed by the South at 27% as of December 2022. <cmsannotation type="cmsannotation" annotationid="Portfolio: Lender type mix" comment="subhead2" text="Portfolio: Lender type mix">Portfolio: Lender type mix</cmsannotation> As of December 2022, <keyword id="6355260" type="General" weightage="100" keywordseo="nbfc" source="Orion">NBFC</keyword> microfinance institutions (MFIs) dominate the market with a portfolio share of 35.7%. NBFC MFIs saw a Q-o-Q growth in gross loan portfolio (GLP) of 7.5%, which is significantly higher than the 1.5% for banks and 5.6% for small finance banks (SFBs). In terms of year-on-year growth, NBFC MFIs had a growth of nearly 28.2%, while banks had a growth of 6.2% and SFBs had a growth of 17.5%. Loans with ticket sizes ranging from ₹30,000 to ₹50,000 accounted for 47.8% of NBFC MFIs' portfolio, as compared to 38.4% for banks and 49.7% for SFBs. <cmsannotation type="cmsannotation" annotationid="Portfolio: Ticket size mix" comment="subhead2" text="Portfolio: Ticket size mix">Portfolio: Ticket size mix</cmsannotation> The data indicates an increase in loans with higher ticket sizes. Portfolios with ticket sizes ranging from ₹50,000 to ₹75,000 saw a year-on-year growth of 45% and a quarterly growth of 9.6% as of December 2022. However, portfolios with ticket sizes greater than or equal to ₹15,000 witnessed a year-on-year decline of 27.2% and a quarterly decline of 2.4%. The share of portfolios with higher ticket sized loans of greater than ₹50,000 increased from 31.8% in December 2021 to 35.2% in December 2022. Moreover, as of December 2022, loans with a ticket size ranging from ₹30,000 to ₹50,000 had the highest share in both value (45%) and volume (42%). The share of loans with a ticket size between ₹50,000 and ₹75,000 increased from 18% in December 2021 to 22% in December 2022. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/us-visa-rules-ease-now-h-1b-visa-holders-spouses-can-work-in-the-us/articleshow/99110481.cms">US visa rules ease: Now H-1B visa holders' spouses can work in the US</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/meet-the-tigers-elephants-rabbits-and-turtles-of-the-e-commerce-jungle/articleshow/99109220.cms">Meet the tigers, elephants, rabbits and turtles of the e-commerce jungle</a>

Microfinance lending shows strong growth in 2022, NBFC MFIs dominate the market

<ul><li>In 2022, there were a record-breaking 74 billion <keyword id="6358921" type="General" weightage="20" keywordseo="upi" source="Orion">UPI</keyword> transactions, the highest in <keyword id="1399736" type="General" weightage="20" keywordseo="digital-payment" source="Orion">digital payment</keyword> volumes.</li><li>There has been a huge rise in digital payments with 9.3 billion transactions in June 2023, with a total transaction value of ₹1,475 lakh crore.</li><li>Fintechs disbursed 10 times higher consumption loans in FY 2022-23 as compared to FY 2018-19.</li></ul> India has cemented its position as a pioneer in developing and integrating digital infrastructure. Stats show that 1.3 billion individuals have enrolled in Aadhaar, which stands as the world's largest and most expansive unique digital identity program in the world. According to a research report by TransUnion CIBIL there is more. In 2022, there were a record-breaking 74 billion UPI transactions, the highest in digital payment volumes in the world. The Indian smartphone usage for financial services has increased. Data shows that there were 28 billion app downloads in 2022 in the country which accounted for 5% of total global app downloads. One in three Indians own a smartphone – over 667 million smartphone owners in 2022 in India, as per the data. India also had 531 million net-commerce users and out of this almost half shopped online in the reported year, thus making it a sheer volume attraction for the <keyword id="35621" type="General" weightage="20" keywordseo="e-commerce" source="Orion">e-commerce</keyword> industry. <cmsannotation type="cmsannotation" annotationid="Digital adoption has led to an e-commerce boom" comment="Subhead" text="Digital adoption has led to an e-commerce boom">Digital adoption has led to an e-commerce boom</cmsannotation> A rise in digital penetration, rise in the young population and increase in per capita income are mega trends which have accelerated the transition to digital. Digital adoption has led to a boom in e-commerce, because India has the lowest cost per GB of mobile Internet data in the world at only ₹13, 531 million social media users. 77 million Indians shop through social media platforms with users shopping through social media platforms having gone up 36% since last year. Active Internet users largely spend their time on a few activities- entertainment (85%), communication (77%), social media (70%), net commerce (52%) and online shopping (34%). Simultaneously there has been a huge rise in digital payments with 9.3 billion transactions in June 2023, with a total transaction value of ₹1,475 lakh crore. What is more, 36% of digital payment users are from rural India. <cmsannotation type="cmsannotation" annotationid="Fintechs fuel consumption through personal and consumer loans" comment="Subhead" text="Fintechs fuel consumption through personal and consumer loans">Fintechs fuel consumption through personal and consumer loans</cmsannotation> Another prominent trend is the rise of <keyword id="5565417" type="General" weightage="20" keywordseo="fintech-lending" source="Orion">Fintech lending</keyword> which has fuelled consumption through personal and consumer loans. As of March 2023, personal loans (54.2%), business loans (24.3%), consumer loans (6.5%) and other loans (15.8%) constituted the Fintech lending portfolio. A strong focus on personal lending has thus helped fintechs to scale faster than any other lender in this segment. Fintechs disbursed 10 times higher consumption loans in FY 2022-23 as compared to FY 2018-19. Number of fintechs has grown from 33 in 2018-19 to 70 in 2022-23. Fintech NBFCs (non-banking financial companies) are also able to provide loans in a faster and more efficient manner due to higher digitisation, KYC check and risk checks with automated scoreboards. 57% of personal loans and 70% of consumer durable loans are processed on the same day in FY 2022-2023. Also younger borrowers are taking more loans from fintech lenders with the percentage of population taking loans from fintech lenders who are below the age of 25 going up to 52% in FY 2022-FY 2023 from 21% in FY 2018- FY 2019.

The Indian e-commerce market is growing at the rate of knots courtesy rapid digital transformation

<ul class="summary-list"><li>Simran Kaur is a 22-year-old tax associate at PwC who moved from India to Scotland when she was 18. </li><li>She bought a house in the Scottish countryside after graduating from university in Glasgow. </li></ul>This as-told-to essay is based on a conversation with Simran Kaur, a 22 year-old tax associate living in Kilmarnock, Scotland. It has been edited for length and clarity.I moved to Scotland from Punjab, North India, in 2019. I was 18 years old and stayed with my relatives while I studied accountancy at Glasgow University.When I first moved from Punjab, I worried about making friends and communicating across the language barrier. But thankfully, that worry eased very early on. No one laughed at my accent or how I dressed which gave me confidence.I remember having issues with which side of the road to get buses from, but strangers would often help. Scottish friendliness is one of the perks of living here. The weather is debatable, though.I came to Scotland without a set plan for my future. Four years later, I've graduated, landed a good job at an internationally renowned firm and bought my first house here.<h2>I started looking for a job and a house at the same time</h2>I started looking for a job during my final year and around the same time, there was talk of my sister joining me to pursue her further studies.Initially, I thought it would be nice for us to rent a place together in Glasgow, but my family suggested it would be worth looking at the mortgage possibilities for a foreigner. So, I started looking into both my home and job options.<h2>Working and living with relatives helped me save money during my studies</h2>Working and saving during my university years meant I had enough savings to consider buying a house. I worked 20 hours a week during term time, the legal limit for students on a study visa, and 40 hours during holidays. I worked at a Chinese restaurant at one point and McDonald's, where I got promoted to be a trainer.During my fourth and final year, I wasn't sure of my next steps, so I stopped spending money on things I didn't need, like clothes, and started saving.As a student, I was exempt from paying council tax and didn't have to spend money on rent because I lived with relatives. This helped me save.By the time I graduated, I had saved £10,000.<h2>The application process for accountancy firms was tough</h2>I applied to three companies, including Ernst and Young and PWC, and it took around three months to pass all the different tests. The process was lengthy, and I had to find a company willing to sponsor me, but I progressed with PWC.The interview was difficult — I had to show my knowledge of the field, confidence, and friendliness. But it was worth it. I landed my role as a tax associate and started last September on a three-year contract right out of university.<h2>I needed a loan to buy my first house</h2>It was quite challenging to find a bank that would lend to me since I wasn't a UK citizen, but other than that, buying the house as a first-time buyer was a simple process.I hired a lawyer to help with the process. Given how much work she did, I think her fee was reasonable, and I paid her after I was two months into my job, which was helpful.I was looking for an area where I could reach my work and relatives easily. My search took me to Motherwell, Prestwick, and Glasgow, which was particularly expensive. Ultimately, I found a lovely three-bedroom house in Kilmarnock, a town an hour away from Glasgow, which my sister and I moved into in December.I chose Kilmarnock because house prices are affordable, and it is easy to commute to work and reach my relatives.Once I'd found a bank, I could cover 90% with the mortgage and 10% through the deposit. The total deposit was around £12,000. I contributed 9% of the deposit, and my dad gave the final 1%.<h2>I love living in the Scottish countryside, but I don't know if I'll stay forever</h2>I'm glad I worked and saved during university because I love where I live now and don't feel like I missed out on anything. I'm more of a countryside person and enjoy seeing the mountains from my window when I wake up.If I had more money, I would move to Loch Lomond, in southern Scotland, which has more beautiful scenery.I'm not sure what I will do after my contract finishes and whether a move to another country is on the horizon. But I would highly recommend the quality of life in Scotland, especially the countryside — it has a quieter pace of life than in Glasgow, which I prefer, and there's a good balance between work and your social life.<h2>It's possible to make a life for yourself here with proper planning</h2>Moving to a different country is a huge decision, and it's very costly, so it's good to have some money before moving as it may take a few months to find a job.Rather than spending on things you don't need, it's better to save. You have to ask yourself questions like what you need in your life and what you want to achieve.I was lucky as an international student to have relatives to stay with, but for those who don't have that option, it's still possible to make a life for yourself in Scotland. It just requires proper planning.

I bought my first house in rural Scotland at 22. Housing is affordable in the countryside and I love it here.

<ul class="summary-list"><li>Hundreds were stranded outside Big Timber, Montana, this week after I-90 shut down. </li><li>Local businesses lent a helping hand to feed and house motorists. </li></ul>After hundreds of drivers were stranded in rural Montana this week due to inclement weather, business owners in the small town of Big Timber banded together to provide assistance. The marooned visitors — who found themselves stuck in the town after Interstate 90 was shut down due to high winds and dangerous driving conditions — were welcomed with special accommodations and warm hospitality. Several were even surprised with free pizzas from a local bakery, which stayed open late to help out in the cold. "That's how this small town is — people do that for each other," Teb Seifu, owner of Big Timber Bakery, told Insider. Seifu said the decision to keep his doors open to serve the stranded motorists — many of them commercial truck drivers — came quickly, and followed suit with other local business owners. He said his brother-in-law opened the doors at KOA Campground, normally closed this time of year, to provide accommodations. "These people were stranded, sleeping in their cars," Seifu told Insider. "It just speaks to what this small town has done for people."He said he delivered a pizza to a local sheriff monitoring the highway whose eyes widened as soon as he saw the pie. "I don't think that he made it into his car before he scarfed down the first piece," Seifu said. Stranded travelers told local TV station <a href="https://www.ktvq.com/news/local-news/hundreds-of-travelers-stranded-in-big-timber-due-to-i-90-closure" target="_blank" rel="noopener">KTVQ</a> they were able to find hotel rooms for the night, and lauded the locals of Big Timber. "They turned their fireplace on and let people sleep out here in the dining room, and even the laundry room and hallways," traveling nurse Jessica Lee told KTVQ from a local hotel. "They did what they could just to get them out of the cold."Anna Weatherspoon was on a road trip to Washington when they were rear-ended on the icy highway, KTVQ reported. They stayed in town for a couple nights while they set up a flight out of Billings, Montana, according to KTVQ. "Not ideal, but you know, we're safe," Weatherspoon said. "The people here are extraordinary. I guess it's the little-town effect."The weather in Big Timber has subsided since earlier this week, and temperatures reached 40 degrees Saturday morning. But Seifu said the night lending a helping hand was a good reminder of what it means to live in a small town. "I think it just speaks volumes of what kind of people live here," he said.

Local businesses in rural Montana give out free food and lodging to hundreds of travelers stranded by dangerous high winds

As of March 2021, <keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword>’s total lending market size stood at ₹156.9 lakh crore, recording around 100% growth between FY2017 and FY2021. Retail and commercial lending each contribute 49% to total lending in India while microfinance contributes about 2%. Over the recent years, there have been commendable focussed policy initiatives such as <keyword id="6392137" type="General" weightage="50" keywordseo="jan-dhan-yojana" source="Orion">Jan Dhan Yojana</keyword>, <keyword id="3060238" type="General" weightage="80" keywordseo="mudra-yojana" source="Orion">Mudra Yojana</keyword> and <keyword id="13518253" type="General" weightage="50" keywordseo="national-strategy-for-financial-inclusion" source="Orion">National Strategy for Financial Inclusion</keyword> (2019-2024), however, India has a long way to go in terms of financial inclusion. Availability of formal credit to low-income populations is a big challenge and rural areas are underserved. According to the <keyword id="6354424" type="General" weightage="50" keywordseo="world-bank" source="Orion">World Bank</keyword>’s Global Findex Database 2017, only 8% of the Indian population borrowed money through a formal channel like financial institutions. <keyword id="6355185" type="General" weightage="50" keywordseo="rural-india" source="Orion">Rural India</keyword> accounts for about half of GDP, but only about 9% of total credit and 11% of total deposits. While flow of credit at the bottom of the pyramid has improved over the last decade, there is a huge missing middle segment. MFIs (microfinance institutions) have been significant credit providers to micro-enterprises and individuals through JLGs (joint lending groups). MFI segment with average ticket size of less than ₹40,000 has been reasonably serviced by over 200 institutions with outstanding credit of ₹2.5 lakh crore as at March 2021 and growing at 23.8% CAGR (compounded annual growth rate) during FY17-21. Under the Mudra Yojana, the programme aimed at funding the unfunded micro enterprises and small businesses with loans up to ₹10 lakh, ₹15.52 lakh crore were disbursed to 29.55 crore loan accounts during its 6 years of its operations (FY16-FY21), however, average ticket size was still low at ₹52,500 in this period. Micro enterprises with higher credit need of ₹1-5 lakh is a severely underserved segment with only a handful of focussed players. Compared to MFI outstanding credit of ₹2.5 lakh crore, in loans of ₹50,000-10 lakh, which is a much larger market, outstanding credit stands at just ₹1 lakh crore. Micro enterprises faced a huge credit gap of ₹8 lakh crore in 2018 as per IFC. Key issues restricting the flow of credit to this segment include the lack of documents such as income tax returns (ITR), goods and services tax (GST) and adequate banking records. As a result, issues related to income assessment have emerged as major supply-side barriers. Pure Fintech model is not suitable since the above data points are lacking and borrowers need hand-holding in disbursements as well as collections as many upgrade from JLG borrowings. Nonetheless, the emergence of a handful of new age non-banking financial companies (NBFCs) is changing the lending landscape by introducing a model that captures the best of fintech and conventional credit features, transforming the protocols of lending for micro-enterprises and individual business loan requirements. Unlike legacy banks, new age NBFCs are analysing alternative data for income assessment, applying technology more effectively and have an agile and on-ground workforce. For micro-enterprises seeking business loans, lack of collateral is no longer a major constraint and a good credit score or credit history is good enough. Considering their more suitable lending norms for this segment, new-age NBFCs are gaining popularity when it comes to small ticket business loans. Besides, NBFCs approve loans far more quickly than banks and the entire end-to-end process from application to disbursal can be completed within a few days. Players in this space with less than 1% GNPA (gross non-performing asset) even after three COVID-19 waves have proven that backed by a strong underwriting, efficient collection model and leveraging technology, lending to this segment is scalable with a significant impact on growth in income of micro-entrepreneurs. Given the lakh of micro and small enterprises across India that fall outside the purview of formal financial systems, including self-employed individuals who remain ineligible for formal credit, new age NBFCs are playing a pivotal role in promoting the goal of inclusive development. Undoubtedly, such digital lending players can serve millions of unbanked sections across India, influencing their lives positively. The author is cofounder and co-chief executive officer of Moneyboxx, an NBFC. Disclaimer: The opinions expressed are those of the author and do not necessarily reflect the views of Business Insider India.

OPINION: How new age NBFCs are changing the small ticket business loan landscape in India

<ul><li>As per a tweet by Motilal Oswal, <keyword id="6808641" type="UNKNOWN" weightage="20" keywordseo="Bandhan-Bank-stock">Bandhan Bank stock</keyword> will be added to MSCI index effective from October 16.</li><li>Bandhan is a long -term compounder and will be able to consistently deliver over 30% growth, said a research report by Axis Capital.</li><li>The merger with Gruh Finance will also allow the rapidly expanding Bandhan Bank with an extended portfolio of loans.</li></ul> Kolkata-based lender Bandhan Bank which has been servicing rural women with small loans, is now expected to hit the big leagues soon. As per a tweet by Motilal Oswal, the bank’s stock will be added to the MSCI index effective from October 16. Investors celebrated the huge feat by a 5-year old bank and the shares jumped nearly 10%, hitting the upper circuit, after which the exchanges halted trading in the company’s shares. MSCI is Morgan Stanley Capital International index is headquartered in New York. It enters a league of top stocks which will also provide by access to global investors, institutions and funds. As per the brokerage firm, this is an effect of its merger with Ahmedabad-based Gruh Finance which recently received an approval from National Company Law Tribunal. Even before the MSCI entry, Bandhan has been one of the rare banking success stories in India. “It is well placed to deliver industry-leading return ratios with a high-yielding assetbook on one side and robust low-cost deposit franchise on the other. Bandhan is a long term compounder and will be able to consistently deliver over 30% growth,” said a research report by Axis Capital in early September. The merger with Gruh Finance will also allow the rapidly expanding Bandhan Bank with an extended portfolio of loans. Currently, around 90% of the bank’s portfolio consists of small loans only. Gruh Finance, as the name suggests, provides housing loans mostly to rural populace. This loan portfolio will provide diversity to the primarily entrepreneurship-based loans that Bandhan currently provides. The shares of Bandhan hit an upper circuit at ₹608 per share in today’s trade, increasing by over 9% in the morning trade. The stock of Gruh Finance also rose by around 7.9% as of 12 pm. <div type="image" title="Coffee Day Global Ltd. is incorporated, in order to start the cafe business (1) (2)" tempid="101146" msid="71541429" hostid="261"></div>

A five-year-old bank lending to poor women in rural India has made it to MSCI in New York

Mumbai, Apr 23 () Small Industries Development Bank of India (Sidbi) on Thursday said it will provide special liquidity to banks, non-banking financial companies (NBFCs) and microfinance institutions for on-lending to micro, small and medium enterprises that are affected by the COVID-19-related disruptions.The liquidity will be offered to banks, NBFCs and MFIs as term loans for a tenor of 90 days and for a maximum period of one year, Sidbi said. "We are ously working towards helping MSMEs survive the crisis created due to the COVID-19 pandemic. Keeping the current situation in mind, we were provided a special liquidity window of Rs 15,000 crore by the Reserve Bank of India (RBI) to enable MSMEs to tide over their liquidity crunch. The funds will be channelized to MSMEs through eligible banks, NBFCs and MFIs," Sidbi's chairman and managing director Mohammad Mustafa said in a release.With this facility, MSMEs liquidity issues shall be addressed, timely and adequately, he added.Along with Sidbi, the RBI on April 17 had announced to provide special refinance facilities of Rs 25,000 crore to National Bank for Agriculture and Rural Development (Nabard) and Rs 10,000 crore to National Housing Bank (NHB).The RBI said the advances will be charged at the repo rate at the time of accessing the facility.Sidbi said to be eligible under this scheme, a bank (public sector bank, private sector bank, foreign bank and SFBs) should have a sizeable outstanding loan portfolio to MSEs/micro credit and sound financials.As per the last audited balance sheet, the bank should have a networth of minimum Rs 100 crore, a capital adequacy ratio (CAR) of not less than 9 per cent and net non-performing assets (NPA) ratio not exceeding 10 per cent, the release said.For NBFCs and MFIs to be eligible, they should have been in operations for at least three years and should have a minimum credit rating of 'BBB-' or equivalent as on March 31, 2020.The eligible NBFCs should have minimum net owned funds of Rs 20 crore and asset size of at least Rs 50 crore.The CAR of NBFCs and MFIs should be above the RBI requirements during the last 24 months, Sidbi said. HV MR

SIDBI to provide special liquidity for on-lending to MSMEs

<ul><li>Shares of <keyword id="6357149" type="General" weightage="20" keywordseo="hdfc-bank" source="Orion">HDFC Bank</keyword>, gained close to 2% on Monday’s trade to ₹1,625 apiece on rural banking expansion plans.</li><li>As part of the plan, the lender also plans to hire 2,500 people over the next six months.</li><li>The bank’s management, in its July earnings call, had also indicated that the lender is looking at “solid growth” in the ongoing financial year. </li></ul>Shares of private sector lender, HDFC Bank, gained close to 2% on Monday’s trade to ₹1,625 apiece as its management looked to double the bank’s rural reach to over two lakh villages over the next two years. "India's rural and semi-urban markets are under-served in credit extension. They present sustainable long-term growth opportunities for the Indian banking system,” said Rahul Shukla, group head – commercial and rural banking at HDFC Bank in a press <a href="https://www.hdfcbank.com/personal/about-us/news-room/press-release/2021/q3/hdfc-bank-to-double-its-rural-reach-to-2-lakh-villages-in-2-years">statement</a> on Sunday. The statement was issued by the bank on the same day when Finance minister Nirmala Sitharaman prodded banks to expand their rural presence at an Indian Banks' Association event. "Even today many panchayats don't have a bank branch. I am not saying that you need to have a physical presence everywhere, digitisation has saved a lot of costs without compromising the service banks provide," she said on Sunday. As part of the plan, the lender also plans to hire 2,500 people over the next six months. The move, it said, will help the lender to expand its reach to one-third of rural India, while extending its leadership in lending to micro, small and medium enterprises. Currently, HDFC Bank offers its products and services to micro, small and medium enterprises (MSMEs) in over 550 districts. As of June 30, the bank had close to half of its 5,653 branches in semi-urban and rural India, along with 15,912 banking correspondents. Of its total retail advances worth ₹5.23 lakh crore, Kisan Gold card formed close to 9% at ₹46,868 crore. The bank’s commercial and rural banking loan book, as of June 30, rose 25% year-on-year to ₹3.86 lakh crore. HDFC Bank: Rural Banking Portfolio On A Steady Rise <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></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;">In Rs Lakh Crore </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;">30-Jun-20 </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;">31-Mar-21 </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;">30-Jun-21 </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;">Retail Loans </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;">4.19 </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;">4.61 </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;">4.58 </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;">Commercial &amp; Rural Banking Loans </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;"> 3.08 </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;">3.71 </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;">3.86 </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;">Other Wholesale Banking Loans </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;">2.86 </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;">3.09 </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;">3.15 </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;">Total </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;">10.14 </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;"> 11.43 </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;">11.59 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: Public disclosures The rise in HDFC Bank stock prices in today’s trade, said Siji Philip, senior research analyst at Axis Securities, is a function of its management’s positive commentary on future growth, as well as its announcement to expand rural banking in the country. <div type="image" title="snapshot-1632724722101" msid="86549824" hostid="261"></div> “HDFC Bank management has been indicating positive growth in the current financial year with a strong comeback on the operating performance front. The growth in HDFC Bank’s stock price is also partly led by a strong market sentiment that has prevailed as the fear of an impending third COVID wave has weakened,” she said. The bank’s management, in its July earnings call, had also indicated that the lender is looking at “solid growth” in the ongoing financial year. “If I were to take any insights and share with you for the first 15 days trends for the month of July '21, HDFC Bank is echoing the projection of almost 100% of pre-COVID levels on the disbursement. And that gives me the optimism that in quarter two, which is July, August and September, we should be in a position to scale up rapidly on our growth rates,” said Arvind Kapil, the bank's country head for retail assets at HDFC Bank’s earning call in July. “...our assessment and our belief is that we should be back on course to achieve the original financial year plans and should close the year on a solid growth for the financial year,” he said. Last week, the bank said it would launch co-branded credit cards in partnership with Paytm. The launch, planned in October, it said will coincide with the festive season as the lender looks to tap into potentially higher consumer demand for credit card offers, EMIs and Buy Now Pay Later options, with the full suite of products to be on offer by the end of December. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/scientists-say-this-new-smartphone-sensor-can-detect-when-someone-consumes-marijuana/articleshow/86547421.cms">Scientists say this new smartphone sensor can detect when someone consumes marijuana</a> <a href="https://www.businessinsider.in/stock-market/news/reliance-industries-shares-hit-record-high-trading-at-over-2500/articleshow/86547883.cms">Reliance Industries’ shares hit record high, trading at over ₹2500 in early morning trade</a>

HDFC Bank is looking to hire 2,500 people in the next six months across India to double its rural cover

<ul><li>The bank’s share price is up 54% since the lockdown started and still, it is at half the price compared to December-end.</li><li>JP Morgan has set a target price of ₹330 in the next one year, implying that the stock can still gain about 38% hereon.</li><li>As one of India’s largest microfinance institutions, its balance sheet will reflect the true state of affairs in rural areas.</li></ul>India’s Chief Economic Advisor Krishnamurthy Subramanian cited data in an interview to say that the reported stress in rural India has been exaggerated. However, the real impact of COVID-19 lockdown on rural India will be reflected in the earnings from <keyword id="2240511" type="PERSON" weightage="20" keywordseo="Bandhan-Bank">Bandhan Bank</keyword> — one of the country’s biggest microfinance institutions and a listed bank since March 2018 — to be announced tomorrow, May 12. So far, the share price reflects some optimism. It’s up over 54% since the lockdown starting March 25. However, it is still available at less than half the price compared to December-end. Most of its business is based in the rural outposts of India, which have been more affected by the economy shutting down than the coronavirus disease itself. <div type="image" title="snapshot-1589200754808" msid="75677122" hostid="261" caption="&amp;lt;p&amp;gt;Bandhan Bank&amp;#39;s share price since the lockdown was announced on March 25&amp;lt;/p&amp;gt;"></div> Most of Bandhan Bank’s microfinance loans aren’t consumption-based or to migrant workers, giving an edge over other banking institutions. “We continue to believe that Bandhan Bank is the most resilient franchise within microfinance — no consumption-based lending, no lending to migrant workers,” said Bernstein’s report from early April. This could be its undoing or the pillar on which it survives, according to analysts. Bandhan Bank has a survived many a crisis It also has experience overcoming the volatile, and unexpected, disturbances that usually occur in rural regions like droughts, floods and even political violence — and has survived most of it over the past two decades. “Based on past experience and limited disruption in the rural economy as of now, the normalcy in collections should return in three months after the moratorium,” said Emkay Research’s analysis. <div type="image" title="snapshot-1589259039416" msid="75688520" hostid="261" caption="&amp;lt;p&amp;gt;Bandhan Bank&amp;#39;s net profit over the last five quarters&amp;lt;/p&amp;gt;"></div> “Based on past experience… post cyclones, riots (Darjeeling) and demonetisation, the collection normalcy returned in three months and hopefully, should be the case this time around as well,” added Emkay. COVID-19 lockdown will hurt Bandhan Bank too, just not as much as others But that doesn’t mean that Bandhan Bank will be able to undercut the coronavirus impact altogether — it just has a higher likelihood of surviving it. “We believe Bandhan, with a 23% Tier-1 and strong CASA (low-cost) deposits, will survive this better than any competitor. We cut Bandhan's microfinance growth by 50% and increase credit costs by 100% to factor in the disruption,” said Bernstein. <div type="image" title="Bandhan Bank Gross NPA (3)" msid="75688686" hostid="261" caption="&amp;lt;p&amp;gt;Bandhan Bank&amp;#39;s gross NPAs over the last give quarters&amp;lt;/p&amp;gt;"></div> Nonetheless, the bank’s share price has largely been volatile since the lockdown was announced by Prime Minister Narendra Modi on March 25. Geojit Financial Services takes an opposing view stating, “Bandhan Bank, with high exposure to microcredit and personal loans, could see further pressure in case of job losses and pay cuts and also the limited ability of micro-borrowers to repay loans.” Though, so far, its stock looks like it hasn’t lost too much of its value. The recent controversies in the banking sector — with PMC Bank going under and Yes Bank needing the Reserve Bank of India to come to its rescue — have eroded investor confidence leaving recovery open to question. Even with Bandhan Bank’s healthy liquidity and asset diversification, asset quality stress will remain a key parameter to watch out for. An initial strike is inevitable, but analysts are divided on how long it will take the bank to recover. See also: <a href="https://www.businessinsider.in/business/news/richest-man-in-asia-mukesh-ambani-owned-reliance-jio-in-talks-to-raise-more-money/articleshow/75669385.cms">$8 billion and counting – Asia's richest man is reportedly in talks to raise more money for Reliance Jio</a> <a href="https://www.businessinsider.in/business/corporates/news/hiring-at-infosys-and-tech-mahindra-is-down-40-in-line-with-the-trend-in-top-five-it-firms-and-its-not-just-because-of-covid-19/articleshow/75669358.cms">Hiring at Infosys and Tech Mahindra is down at least 40% in line with the trend in top five IT firms⁠— and it's not just because of COVID-19</a> <a href="https://www.businessinsider.in/finance/news/sovereign-gold-bond-scheme-price-how-to-apply-rules-and-all-you-need-to-know-about-paper-gold/articleshow/75670320.cms">Sovereign Gold Bond Scheme ⁠— price, how to apply, rules and all you need to know about paper gold</a>

Bandhan Bank shares have gained 54% since lockdown started⁠— but the numbers will reveal the real damage to rural India from COVID-19

<ul><li>Banks have passed on only 29 basis points of rate cut benefits to customers, even as RBI eased lending rates by 100 points since February. </li><li>RBI Governor says he will take whatever steps necessary to ensure banks pass on benefits. </li><li>Das also said that the system is flush with liquidity and it will help push growth. </li></ul> The RBI governor Shaktikanta Das today said that they are willing to take whatever steps necessary to make sure banks transmit the benefits of interest rate cuts to customers. The central bank has been trying to kickstart a slowing economy by reducing the interest rates at which it lends money to banks. However, banks have been absorbing these benefits, as less is seeping through to customers. “RBI is monitoring this regularly. We have been meeting both public and private sector banks separately,” Shaktikanta Das said in a press conference. A dismal 29 for 100 Even before the central bank cut its repo rate <a href="https://www.businessinsider.in/rbi-cut-interest-rates-by-35-basis-points-as-growth-sputters-and-inflation-cools/articleshow/70565859.cms">by 35 basis points </a>today, it had eased its own lending rate by around a 100 basis points or 1%, since this February. This includes three 25 basis point cuts along with changing stance to accommodative, which adds another 25 basis point worth benefits. Yet, as per RBI’s own admission, banks have only passed on 29 basis points of the benefit to its customers. If banks do not pass on the benefits, it will not help kickstart urban and rural demand which has been slowing down, as observed with tractor and passenger car sales. ‘RBI has done its part’ Making sure banks are actively working towards growth like RBI is, is much more necessary in the current situation. The central bank reduced this year’s growth projection to 6.9% from 7%, earlier. “The RBI has done its part. We believe it is a cyclical downturn not a structural reform as of now,” said governor Shaktikanta Das, saying that there is room for structural reform. With adequate measures from the government, growth should pick up pace as the central bank believes that the second half of the year will grow at 7.3%, though the first half grew only at 5.8% As credit flow will pick up as banks go ahead and lend more at lower rates, the economic growth will start picking up, RBI believes. Das also said that the system is flush with liquidity and it will help push growth. “Banks just come out of non-performing assets (NPA) with continuous quarters of loss incurred. Some of them are turning around, and credit flow will improve and weeks and months,” Das assured. See also <a href="https://www.businessinsider.in/rbi-policy-update-home-loans-up-to-20-lakh-get-priority-status/articleshow/70567010.cms">Home loans up to ₹20 lakh may get cheaper and easier</a>

You Searched For "rural lending" and got 11 results

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