Banking Awareness Updates – 23.08.2016

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HDFC Bank looking to boost share of corporate loans


  • HDFC Bank Ltd, an Indian lender whose earnings have risen by at least 20% every year since 1998, is seeking to bolster its share of the nation’s corporate-loan market as surging bad debts hold back rivals.
  • The lowest non-performing-loan ratio among the biggest Indian lenders and the highest market capitalization is allowing HDFC Bank to invest in operations and extend more credit, as counterparts including State Bank of India and ICICI Bank Ltd combat soured debt.
  • Private banks in India are extending loans faster than their state-run counterparts, which account for more than 70% of the total outstanding advances. Led by managing director Aditya Puri, HDFC Bank’s loan book grew by 23% in the 12 months through 30 June to Rs.4.7 trillion, exchange filings show.
  • About 47% of that is classified as wholesale lending while the rest is loans to individuals. Mr. Balasubramanian, who joined the bank in May, said he expects corporate lending—part of wholesale book—to grow 20% in the year ending March 2017. “There is positive momentum in the infrastructure space—roads, railways and defence,” he said.


Union Bank raises Rs.1,000 crore through bonds


  • State-owned Union Bank of India   today raised Rs 1,000 crore through bonds to fund business growth.
  • The bank issued 10,000 Basel III compliant Tier II bonds of face value Rs 10,00,000 each at par aggregating to Rs 1000 crore on private placement basis, UBI said in a regulatory filing on stock exchanges.
  • The bonds bear 8 per cent coupon rate payable annually, it said. The bonds are issued for a period of 10 years, with call option after 5 years and thereafter on all coupon payment dates, it said.


IDFC Bank Gets Tough with Large Defaulters


  • IDFC Bank, the newest private sector lender in the country, has stepped up recovery efforts against large defaulters after its gross non-performing loan ratio crossed the 6 per cent mark. Its legal team has upped the ante and is now busy filing winding up petitions and taking companies to court.
  • “Our ability to get finality on these assets is frustratingly slow and that is just the world in which we live,” Mr. Rajiv Lall, founder CEO of IDFC Bank told ET. In the quarter gone by the bank’s absolute gross non-performing loans reached Rs 3,029 crore almost 6.09 per cent as a share of its gross advances.
  • Provisions made during the quarter were at Rs 23.6 crore in first quarter, higher than Rs 11.89 crore in the January-March period. The bank had set aside a significantly large amount of capital of about Rs 2,500 crore in provisioning in September quarter last year.


No Retail Lending Bubble in India:SBI Chief


  • At a time when corporate credit demand has not picked up yet, banks are relying on retail lending to help grow their books. On a question if it was leading towards a bubble, SBI chairman Mrs. Arundhati Bhattacharya said retail lending in India is still less than 10% of the country’s GDP, which is far less than other developing nations.
  • “There is unmet demand for retail credit in the system which can be met in a secured manner by extensive use of data analytics. Hence, there is room for banks to grow their retail books,” said Bhattacharya on Monday at an Indo-American Chamber of Commerce event.


Yes Bank appoints Ashok Chawla as non-exec chairman


  • Former CCI head Mr. Ashok Chawla will take over as Non-Executive Part-time Chairman of YES Bank from October as the lender has received approval from the Reserve Bank for this appointment.
  • YES Bank said Chawla’s appointment is for a period of three years, with effect from the date of joining the bank.
  • He was appointed as an independent director on the Board of YES Bank on March 5, 2016.


RBL Bank IPO subscribed three times


  • RBL Bank’s initial public offering (IPO) of shares has been subscribed three times a day before its close. The 37.9 million-share offering had received 117 million bids, data provided by stock exchanges show. The Rs 1,200-crore IPO closes on Tuesday.
  • The retail (small investor) portion of the IPO has already been subscribed 3.25 times, institutional (big) investor portion has been subscribed 4.3 times and high net worth (rich) individual quota has been fully covered. Typically, most bids in an IPO come on the final day.

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