Banking reforms need to get a lot more ambitious for the economy’s sake
1 month ago

Banking reforms need to get a lot more ambitious for the economy’s sake

Live Mint  

The 19 amendments to banking laws that were passed by the Lok Sabha on Tuesday remove various niggles in extant provisions, straighten out some others and make life easier for bank customers, especially a tweak that allows four nominees per account. While more than 90% of India’s nearly 60 million MSMEs are micro sized and best served by specialized non-bank finance companies that have the wherewithal for this task—which involves high processing costs loaded onto small loans—our banks must play their role, too, by lending money to NBFCs for them to lend tiny enterprises. After all, a tiny enterprise that’s denied access to an NBFC would probably turn to an informal money-lender who will charge rates of interest many times higher than what even credit-card issuers do, which are typically higher than the rates RBI terms ‘usurious’ when levied by NBFCs. Large clients lull banks into lazy banking; their funds get deployed relatively safely and profitably, and they’re spared the job of doing risk assessments for relatively small loans. India’s Account Aggregator framework lets banks collate financial data on small borrowers and assess risks in a way that wasn’t possible a decade ago.

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MFI portfolio declines, bad assets spike in Sept qtr: Report
20 hours, 38 minutes ago

MFI portfolio declines, bad assets spike in Sept qtr: Report

Live Mint  

Mumbai, Jan 8 Microlending outstandings in the system reduced 4.3 per cent to ₹4.14 lakh crore in the September quarter as lenders adopted a cautious stance amid deteriorating asset quality, a report said on Wednesday. Loans unpaid for 1-30 days increased to 2.1 per cent from the 1.2 per cent in June, while the ones unpaid for 31-180 days witnessed …

India’s banking credit growth to remain subdued in FY2026, lowered forecast: ICRA
6 days, 20 hours ago

India’s banking credit growth to remain subdued in FY2026, lowered forecast: ICRA

Live Mint  

New Delhi, January 2 : Credit rating agency ICRA has lowered its banking credit growth estimate for FY2025 to 10.5-11.0 per cent, down from its previous forecast of 11.6-12.5 per cent. For FY2026, ICRA anticipates a further slowdown in credit growth, estimating a range of 9.7-10.3 per cent, influenced by the high CD ratio and upcoming changes in the liquidity …

Personal Loans and Services Sector are key drivers of banks credit growth: RBI
1 week, 5 days ago

Personal Loans and Services Sector are key drivers of banks credit growth: RBI

Live Mint  

New Delhi, December 27 : The Reserve Bank of India has highlighted that bank credit growth in 2023-24 has been broad-based, with the personal loan and services sectors leading the expansion. The report said, "Bank credit growth in 2023-24 was broad-based, led by services sector and personal loans segment, followed by agriculture and industry". "The shares of services and personal …

India: Govt Plans New Financing for MSMEs
1 month ago

India: Govt Plans New Financing for MSMEs

Deccan Chronicle  

New Delhi: The Modi-led NDA government is open to exploring some alternate financing models for micro, small, and medium enterprises where the concerned ministry can earmark particular areas in the proposed industrial townships for the MSMEs. The statement of the government comes at a time when small business houses in the country are reportedly facing specific issues in accessing bank …

India: MSMEs Need Boost in Credit Access: Assocham
1 month, 1 week ago

India: MSMEs Need Boost in Credit Access: Assocham

Deccan Chronicle  

New Delhi: In order to boost credit access for small and medium businesses in the country, India Inc on Thursday called for enhancing the role of banks and other financial institutions to reach them and address their challenges. Leading industry body Assocham in collaboration with Egrow Foundation, conducted an in-depth study on 'MSMEs facing challenges with a quantitative data of …

Microlenders wake up to hangover after credit party
1 month, 2 weeks ago

Microlenders wake up to hangover after credit party

Live Mint  

Mumbai/Bengaluru: Microlenders that splashed out money to indebted individuals are now struggling to get it back, raising concerns that payment delays could show up on balance sheets soon. Leading microfinance companies including CreditAccess Grameen, Fusion Finance and Equitas Small Finance Bank have warned that many of their customers may be over-leveraged, after discovering that some have four or more active …

Microfinance meltdown: Five stocks that could come out on top
1 month, 3 weeks ago

Microfinance meltdown: Five stocks that could come out on top

Live Mint  

The microfinance sector is facing a severe downturn, with every small finance bank and non-banking finance company involved in microlending seeing declines of 30-50%. Equitas Small Finance Bank estimates that around 50% of loans overdue by 90 days eventually become NPAs, though this figure varies across lenders. Equitas Small Finance Bank, Ujjivan Small Finance Bank, CreditAccess Grameen Ltd, and Arman …

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks
1 month, 3 weeks ago

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks

The Quint  

Given that India’s economic growth relies heavily on domestic consumption, any slowdown in lending could ripple through the broader economy, impacting sectors dependent on consumer spending. Moreover, as banks shift their focus from retail to secured loans to mitigate risks, small and medium enterprises could face reduced access to capital, hindering job creation and slowing down economic expansion. In October, …

SBI set to borrow $1.25 billion, India’s largest dollar-denominated bank loan in 2024; details here
1 month, 3 weeks ago

SBI set to borrow $1.25 billion, India’s largest dollar-denominated bank loan in 2024; details here

Live Mint  

The State Bank of India, India's largest public sector bank, is planning to raise up to $1.25 billion, marking the biggest dollar-denominated loan in the country's financial sector. Dollar loan volume declines The report said that despite these loans, India's dollar loan volume has declined 27 per cent to $14.2 billion this year due to the absence of large company …

Microfinance risk: Small loans can spell big trouble for Indian banks
1 month, 3 weeks ago

Microfinance risk: Small loans can spell big trouble for Indian banks

Live Mint  

Once bitten twice shy" goes the old adage. Driven perhaps by the lack of credit demand from corporates, a boom in retail credit, an eagerness to bridge the last- mile gap in credit delivery and pressure to achieve priority-sector lending targets, banks seem to have lowered their guard and gone overboard in extending such loans. To its credit, the Reserve …

MSMEs still out of mainstream institutional credit, shows survey
4 months, 3 weeks ago

MSMEs still out of mainstream institutional credit, shows survey

Deccan Chronicle  

Hyderabad: In a downturn when tighter monetary conditions affect governments and companies, small and medium sized businesses bear brunt as the resultant delay in bill payments squeezes these enterprises financially. Though several measures were taken by the government and the Reserve Bank of India, micro, small and medium scale enterprises are perennially starved of institutional credit. Though the government has …

Need to address the $4 trillion financing gap, says Sitharaman
4 months, 3 weeks ago

Need to address the $4 trillion financing gap, says Sitharaman

Hindustan Times  

New Delhi Growth remains the best antidote to many economic and social challenges, finance minister Nirmala Sitharaman said at the Voice of the Global South Summit on Saturday while underscoring the urgency for concessional finance to developing countries facing a nearly $4 trillion annual financing gap in meeting SDGs. Union Finance Minister Nirmala Sitharaman Highlighting inadequate access to development finance, …

Indian banks well placed to ride on economic growth: Moody’s
6 months, 3 weeks ago

Indian banks well placed to ride on economic growth: Moody’s

The Hindu  

Indian banks and non-bank finance firms are well placed to seize opportunities from India’s strong economic prospects through lending growth in sectors like infrastructure, energy transition, manufacturing, small businesses and retail, Moody’s Ratings said on Wednesday. Moody’s said credit quality of India’s financial system has strengthened over the past 3-4 years due to record-high profitability, low delinquencies and stable domestic …

India assessing need for more measures to slow unsecured lending, cenbank chief says
7 months ago

India assessing need for more measures to slow unsecured lending, cenbank chief says

Hindustan Times  

MUMBAI - India's central bank is assessing whether further measures would be needed to slow down the growth in banks' lending towards unsecured loans and non-banking finance companies, Governor Shaktikanta Das said on Friday. India assessing need for more measures to slow unsecured lending, cenbank chief says The Reserve Bank of India, has warned lenders against "all forms of exuberance" …

Credit growth trajectory likely to slow down to 12-14% YoY over FY25-27, says Emkay Global
9 months, 2 weeks ago

Credit growth trajectory likely to slow down to 12-14% YoY over FY25-27, says Emkay Global

Live Mint  

India’s banking sector is expected to face a slowdown in credit growth and with banks exhausting strategies to sustain margins, the imperative for mobilizing deposits emerges, analysts said. The credit growth trajectory is expected to slow down to 12-14% year-on-year over FY25-27E from the current 16.5% YoY, according to Emkay Global Financial Services. The overall deposit growth and more so …

FM Sitharaman calls for more SBI-sized banks as India’s economy grows
11 months ago

FM Sitharaman calls for more SBI-sized banks as India’s economy grows

Live Mint  

Finance Minister Nirmala Sitharaman in an interview with Mint said that the Indian economy is going through a structural transformation and conventional paradigms are being challenged. STRUCTURAL TRANSFORMATION IN RURAL AREAS Nirmala Sitharaman said that the government is working on data to measure the structural transformation in rural areas. "Government is prepared to address any impact on the rural economy …

The Need to Bolster Institutional Low-Cost Credit to MSMEs
11 months, 1 week ago

The Need to Bolster Institutional Low-Cost Credit to MSMEs

News 18  

The Micro, Small and Medium Enterprises are critical to unlocking the potential of India envisioned under the ‘Make in India’ campaign. The Parliamentary Standing Committee on Finance, in its report titled ‘Strengthening Credit Flows to the MSME Sector’, exposes the fact that less than 40 per cent of MSMEs avail credit from formal financial systems, and therefore depend on costly …

Small finance, payments banks growing sustainably: Experts at Mint BFSI Summit
11 months, 4 weeks ago

Small finance, payments banks growing sustainably: Experts at Mint BFSI Summit

Live Mint  

New Delhi: Small finance banks and payments banks, constituted under the differentiated banking license policy of the Reserve Bank of India, have seen sustainable growth throughout their existence, industry experts said at the Mint BFSI Summit and Awards 2024 on Thursday. That means they have touched the lives of 100 million Indians, or 7% of the population, in under seven …

Banks’ margin party is drawing to a close
1 year, 6 months ago

Banks’ margin party is drawing to a close

Live Mint  

The stellar rebound in India’s banking sector performance has been in focus in the recent quarters. Much of this is owing to the robust systemic bank credit growth and the sharp rise in lending rates, resulting in a significant improvement in the net interest margins of banks in the backdrop of RBI’s monetary tightening. As per RBI data, SCBs’ weighted …

Federal Bank: Redefining banking digitally and sustainably
1 year, 11 months ago

Federal Bank: Redefining banking digitally and sustainably

Live Mint  

Federal Bank is one of the leading and preferred Personal, NRI and business banking partners for customers across India. Strong momentum in credit growth SME book grew by 20% YoY Retail book up by 18% YoY Business banking book up by 18% YoY Corporate book up by 19% YoY Commercial credit book grew by 18% YoY CV/CE business grew by …

Keep an eye on these economic indicators in 2023
2 years ago

Keep an eye on these economic indicators in 2023

Live Mint  

Global headwinds, tightening monetary policy and the lingering effects of the pandemic have combined to create a gloomy global outlook. In its December bulletin, the Reserve Bank of India said that with balance of risks being tilted towards a darkening global outlook and emerging markets appearing more vulnerable, the Indian economy needs support from domestic growth drivers. Sectoral deployment of …

Banking data bodes well for the economy
2 years ago

Banking data bodes well for the economy

Hindustan Times  

The Reserve Bank of India ’s Report on Trend and Progress of Banking in India 2021-22, released on December 27, underlines the trend of continuous improvement in the health of India’s banking sector. The credit goes to RBI’s nimble-footed approach during the pandemic’s disruption and its sustained efforts to clean bank balance sheets in India. To be sure, the story …

Indian banks to see record credit growth of over ₹19 trillion in FY23: Icra
2 years ago

Indian banks to see record credit growth of over ₹19 trillion in FY23: Icra

Live Mint  

New Delhi: Indian banks are likely to witness a record high credit growth, surpassing the ₹19 trillion in the current fiscal year, domestic rating agency Icra said on Monday. Further, the growth momentum is expected to remain strong in FY2024 as well, even though rising interest rates and tight liquidity conditions could moderate the growth,” said Anil Gupta, senior vice …

Let’s reflect on what’ll make India a developed country
2 years, 1 month ago

Let’s reflect on what’ll make India a developed country

Live Mint  

During his recent United Nations General Assembly speech, external affairs minister S. Jaishankar told the world about India’s ambition to become a developed country by 2047, a century after the country’s independence. Usually, countries are considered developed based on the size of their GDP, and therefore the per capita income of their citizens, along with the presence of high-quality infrastructure. …

Economy resilient, on course to acheive 7% growth in FY23: RBI article
2 years, 1 month ago

Economy resilient, on course to acheive 7% growth in FY23: RBI article

The Hindu  

With headline inflation beginning to show signs of easing, the domestic macroeconomic outlook appears to be resilient and on course for about 7% GDP growth in the current fiscal though India is still sensitive to global headwinds, according to an article released by the RBI on Friday. In the article, the authors - led by RBI Deputy Governor Michael Debabrata …

Credit to MSMEs gathers pace, but needs a tech push
2 years, 3 months ago

Credit to MSMEs gathers pace, but needs a tech push

Live Mint  

Bank credit to micro, small and medium enterprises has fluctuated for most of the pandemic. Traditionally, public sector banks led credit disbursement to MSMEs, with a 50% share prior to 2019. iPhone sales in India headed for another record IT companies likely to slash campus hiring in FY24 What lies next for India’s shaky exports story Marico’s Q2 update fails …

Indian FinTech market to reach $1 trillion by 2030, says CEA
2 years, 3 months ago

Indian FinTech market to reach $1 trillion by 2030, says CEA

The Hindu  

“India is among the fastest growing fintech markets in the world with a market size of $31 billion in 2021 that is expected to reach $1 trillion by 2030,” said V. Anantha Nageswaran, Chief Economic Advisor of India, Ministry of Finance, Government of India. “The next wave in the fintech sector could be the cash flow lending to MSMEs using …

Innovations can plug the growth capital gap of MSMEs
2 years, 6 months ago

Innovations can plug the growth capital gap of MSMEs

Live Mint  

India has over 7.9 million micro, small and medium enterprises, as of 27 March 2022, as reported by the MSME Ministry. The credit gap translates into a ‘growth capital gap’, especially for innovative and high-growth MSMEs seeking a radical pivot in their business models or overseas expansion. While RBI will need to make it mandatory for all MSMEs and large …

Credit-starved India Cannot Achieve Double-digit Growth. It Needs Digital Banks for Lending
3 years ago

Credit-starved India Cannot Achieve Double-digit Growth. It Needs Digital Banks for Lending

News 18  

The Indian economy might have been “liberalized” since the early 1990s, yet a sector–banking–still exists where a license is given and the business model defined by the regulator. The need for regulation for digital banks arises as traditional universal banks like Kotak are already offering digital banking through their 811 service. These banks can leverage a new deposit base like …

IndusInd Bank and the big problem with small loans
3 years, 2 months ago

IndusInd Bank and the big problem with small loans

Live Mint  

Misgivings around risk management are not new for India’s banks. “We believe that the bank’s turnaround story remains intact, but it needs to work more on strengthening credit underwriting/risk management and communication with stakeholders to sustain the long-term re-rating," analysts at Emkay Global Financial Services Ltd wrote in a note. Out of the above, only 26,073 clients were active with …

India's economic recovery to be slower as banks turn cautious
3 years, 6 months ago

India's economic recovery to be slower as banks turn cautious

India Today  

The pace of India’s economic recovery has slowed down significantly after the second wave of the Covid-19 pandemic. Banks in the country have turned cautious after the second wave and have tightened lending even as companies and individuals are seeking more credit. At the moment, banks in the country have turned cautious due to a jump in loan defaults following …

MFIs may get to set interest rates
3 years, 6 months ago

MFIs may get to set interest rates

Hindustan Times  

Microfinance institutions may get freedom to set interest rates guided by a board-approved policy, under a Reserve Bank of India proposal to review the regulatory framework governing them. The proposal, if implemented, will end the existing regulatory cap on MFI interest rates. However, while doing so, they should ensure usurious interest rates are not charged,” The RBI said in its …

Digital lenders must help the vulnerable access productive credit
3 years, 7 months ago

Digital lenders must help the vulnerable access productive credit

Live Mint  

The effects of the second wave of covid on micro, small and medium enterprises are widely anticipated to be more harmful than those of the first wave. A recent article published in Mint on 6 May 2021, ‘We must study the MSME credit gap before we can fix it’ by Deep Mukherjee, emphasises the scope of digital lending based on …

India's GDP growth turns positive, but experts caution against celebrating 0.4% growth
3 years, 10 months ago

India's GDP growth turns positive, but experts caution against celebrating 0.4% growth

India Today  

Though India’s economic health continues to slowly improve, a comprehensive recovery is yet to be seen. It had contracted by 23.9 per cent in April-June 2020 and by 7.5 per cent in July-September 2020; in the October-December 2020 period, it grew 0.4 per cent. The Finance Ministry’s Economic Survey 2020-21 projects that India’s real GDP growth in FY22 will be …

Policy roll-back may dent banks’ health, says RBI
4 years ago

Policy roll-back may dent banks’ health, says RBI

The Hindu  

In 2020-21, as policy support is rolled back, the impact of the COVID-19 pandemic may dent the health of the banks and non-banks, the Reserve Bank of India said in its Report on Trend and Progress of Banking in India 2019-20. This is a statutory publication in compliance with Section 36 of the Banking Regulation Act, 1949 and this Report …

India's pvt credit-to-GDP ratio lowest among peers; govt working on framework: NITI Aayog CEO
4 years ago

India's pvt credit-to-GDP ratio lowest among peers; govt working on framework: NITI Aayog CEO

India TV News  

Niti Aayog CEO Amitabh Kant on Saturday said India's private credit-to-GDP ratio is the lowest among its global peers and the government is in the process of putting in place a framework for a credit push towards untapped segments. Addressing a virtual event organised by the Global Alliance for Mass Entrepreneurship, Kant said credit scenario in India in recent years …

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P
4 years, 1 month ago

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P

The Hindu  

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11% of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is “masking” problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the proportion of …

India’s micro firms face a credit squeeze
4 years, 3 months ago

India’s micro firms face a credit squeeze

Live Mint  

Amid the farm sector debate, a recent notification by the government of India on the Micro Small and Medium Enterprises went largely unnoticed. Based on the investment criteria, what used to be the upper end in the definition of a medium enterprise—a firm with an investment of ₹100 million —is now defined as a small enterprise. Given the preponderance of …

India Needs More Banks to Double Credit-to-GDP Ratio to 100%, Says RBI Board Member
4 years, 4 months ago

India Needs More Banks to Double Credit-to-GDP Ratio to 100%, Says RBI Board Member

News 18  

India needs more banks for sustaining high growth and doubling the credit-to-GDP ratio to 100 per cent, RBI board member Manish Sabharwal said on Tuesday. Sabharwal, who is the chairman of Teamlease Services, also said the country needs immediate reforms in banking, compliance, labour laws and education because “hope is not a strategy”. India needs to increase its credit-to-GDP ratio …

India Needs More Global Sized Banks to Help Country Achieve $5 Trillion Economy: CEA
4 years, 4 months ago

India Needs More Global Sized Banks to Help Country Achieve $5 Trillion Economy: CEA

News 18  

Chief Economic Adviser K V Subramanian on Sunday said that India needs more global sized banks to help the country achieve USD 5 trillion economy by 2024-25. So, if the Indian banking sector was proportional to the size of its economy, India should have been where South Korea is, which has six banks in the global top hundred. "If you …

World Bank to support India's MSME sector
4 years, 6 months ago

World Bank to support India's MSME sector

India Today  

The backbone of India's economy, small businesses will take long to recover, the World Bank has zeroed in on the sector with a $750 million emergency response program and is working with the government on building a platform for MSMEs to get financiers to take on raised invoices -cutting through the delay that MSMEs face in receiving payments India's MSME …

MSMEs to bear the brunt of negative economic growth, says Crisil
4 years, 6 months ago

MSMEs to bear the brunt of negative economic growth, says Crisil

Live Mint  

MUMBAI: Micro, small and medium enterprises, across sectors, will be severely impacted when the Indian economy contracts this fiscal, according to credit rating agency, Crisil. The agency has predicted a 5% contraction and said as India Inc heads towards a 15% decline in revenue and 25% fall in earnings before interest, taxes, depreciation and amortisation, MSMEs will see a steeper …

Banking and Finance in 2020: Time for radical cost efficiency and operational scalability
4 years, 11 months ago

Banking and Finance in 2020: Time for radical cost efficiency and operational scalability

Live Mint  

The year 2019 was an eventful one for the banking and financial services sector. These included a one-time partial credit guarantee scheme allowing PSBs to purchase high-rated pooled assets from NBFCs and Housing Finance Companies, introduction of liquidity coverage ratio requirements for NBFCs for better liquidity management, empowering Reserve Bank of India to replace directors of non-government NBFCs or supersede …

In 2020, muted credit growth, not bad loans, will be banks’ main concern; a lot will depend on early economic rebound
5 years ago

In 2020, muted credit growth, not bad loans, will be banks’ main concern; a lot will depend on early economic rebound

Firstpost  

In the first seven months of the current financial year, the credit growth to large industries contracted by 3.4 percent as against a growth of 0.2 percent in the year-ago period. The gross NPA ratio of banks, which stood at 9.3 percent of the total loans in March 2019 could rise to close to 10 percent in September 2020, according …

IIFL bets on India’s beleaguered financial sector
5 years ago

IIFL bets on India’s beleaguered financial sector

Live Mint  

IIFL Asset Management Ltd., which oversees $3.3 billion in assets, is set to expand on a strategy of investing in the most stressed area of India’s economy: the financial services industry. The firm aims to eventually attract $1 billion from funds globally to invest in the nation’s privately owned banks, shadow lenders, insurance companies, asset management firms, stock exchanges and …

A nervous economy: Why sops are proving to be a tough sell
5 years, 1 month ago

A nervous economy: Why sops are proving to be a tough sell

India Today  

Despite the various measures taken by the government to boost investment, corporates seem to be shying away from taking risks, with the economy hanging on a precarious balance. Government data released on November 11 showed that factory output, as indicated by the Index of Industrial Production, fell for the second consecutive month in September, by 4.3 per cent. Data from …

RBI rejects Indiabulls Housing-Lakshmi Vilas Bank merger, credit growth at a 22-month low; all this and more in MoneyControl Pro
5 years, 2 months ago

RBI rejects Indiabulls Housing-Lakshmi Vilas Bank merger, credit growth at a 22-month low; all this and more in MoneyControl Pro

Firstpost  

When it came to a decision on the Lakshmi Vilas Bank-Indiabulls Housing Finance merger, it was always a lose-lose situation for the Reserve Bank of India. Credit growth at a 22-month low Bank credit growth as of 27 September 2019, fell to 8.8 percent compared to a year ago, the lowest rate of growth since November 2017. The continuing fall …

Opinion | Bank mergers are no silver bullet for India
5 years, 4 months ago

Opinion | Bank mergers are no silver bullet for India

Live Mint  

With every passing day, India’s economic indicators are turning a little bleaker. Thus, one of the few areas where there’s new investment may be affected, especially with a sharp rise in debt levels of the government agency that gives out the contracts. State Bank of India, the largest lender, will require ₹15,000 crore in the current fiscal year, according to …

PSBs NPAs down to ₹7.9 trillion at the end of March 2019
5 years, 4 months ago

PSBs NPAs down to ₹7.9 trillion at the end of March 2019

Live Mint  

New Delhi: The performance of India’s public sector banks has improved with the improvement in asset quality helping in bringing the non performing assets to ₹7.9 trillion at the end of March 2019, said finance minister Nirmala Sitharaman on Friday. On last Friday, finance minister Nirmala Sitharaman also announced a slew of measures to stoke demand, including a rejig of …

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