Loans

Small loans rising faster than total credit

5 : According to Crisil research Small tickets, Unsecured loans have grown four times as much as total credits of the banking sector. Between financial years 2015-2018, unsecured loans, personal loans, SME credit and Credit card loans have risen to four times of credit. The lenders need to remain watchful and disciplined in credit underwriting going forward because unsecured loans are vulnerable

RBL Bank raise stakes in SFPL to 100%

RBL Bank has fully acquired Mumbai-based microlender firm Swadhaar FinServe Pvt Ltd (SPFL)where it had 60.49% holding earlier. SFPL operates 331 branches across 16 states and two union territories and has an AUM (Assets under management) of around Rs 2,000 crore and reaches 750,000 customers. SFPL distributes loans and savings products, to low-income households and microenterprises.

RBI revised Housing Loan limits

RBI revised the upwards housing loan limits under Priority Sector Lending (PSL). Housing loans of up to Rs 35 lakh for residences costing less than Rs 45 lakh will now be treated as PSL to give a boost to the low-cost segment. The housing loan limits for eligibility under priority sector lending will be revised to Rs 35 lakh in metropolitan centres and to Rs 25 lakh in other centres.

Rs 2,500 Cr fund for Bandra Versova Sea link

Maharastra Govt. will provide viability gap of Rs. 2,500 Cr for Bandra Versova Sea link by selling floor space index (FSI) to builders. The total cost incurred in creating 39 km sea link would be Rs. 9,500 Cr that will connect Marine lines with Kandivli. The govt will invest Rs. 2000 Cr, Rs. 5000 Cr is being raised by loans and the rest of Rs. 2500 Cr by FSI.

Low recoveries of NPAs: RBI data

13 : While public sector banks have claimed a ` 1,50,960 crore reduction in their non-performing asset levels over 2017-18, only 27% was actual recoveries, according to data provided by RBI Governor ` 1,50,960 crore reduction in their NPA levels from the start of financial year 2017-18 till December 31, 2017. NPA refers to loans or advances that are in default

Guidelines to enhance loan for large borrowers

In a move to enhance credit discipline among larger borrowers, the RBI proposed a “minimum level of loan component” of 40 percent for borrowers having an aggregate fund-based working capital limit of Rs. 150 crores and above from the banking system. It will be proposed to be effective from October 1, 2018. The 40 percent loan component will be revised to 60 percent from April 1, 2019.

Fitch downgrades PNB on credit profile

Fitch Ratings has downgraded the Viability Rating (VR) of Punjab National Bank to ‘b’ from ‘bb-’ and maintained negative ratings. The two-notch downgrade is a reflection of the significant deterioration in its standalone credit profile. Fitch said the deterioration in its core capitalisation was caused by a sharp increase in its non-performing loans (NPLs).

India, World Bank signed $500 million loan

India has signed a USD 500 million loan pact with World Bank to provide additional financing for PMGSY rural road projects. Pradhan Mantri Gram Sadak Yojana will build 7,000 km of climate resilient roads, out of which 3,500 km will be constructed using green technologies. World Bank has supported PMGSY since its inception in 2004 & so far it has invested over $1.8 billion in loans & credits.

HDFC bank to offer Digital Loans

HDFC Bank has launched its Digital Loans against Mutual Funds in partnership with transfer agent CAM. Customers will be able to leverage their mutual fund portfolio to avail funds for any emergencies without liquidating their investments. The ticket size of the loans will range from Rs 1 lakh to Rs 1 crore at an interest rate of 10.5 -11%.

RBI puts Dena Bank under corrective action

RBI has initiated prompt corrective action against Dena Bank in view of high non-performing assets, restricting the bank from giving new loans & new hiring. Prompt Corrective Action comes after Dena Bank posted a loss for the third year in a row with net NPA’s close to 12%. Though several banks are under the PCA framework currently, Dena Bank is the first lender to have fresh lending curbed.