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Global ratings agency Moody's on Thursday said private lender Axis Bank 's asset quality may deteriorate further and more than what was previously expected over the next 12-18 months. In addition, compared to the other rated Indian banks, the bank has been a laggard in recognising its asset quality problems, a credit negative for its credit quality, Moody's said in its statement. Axis Bank's asset quality deteriorated significantly in the September quarter. On October 17, Axis Bank reported a 24 per cent quarter-on-quarter increase in non-performing loans (NPL) in the quarter that ended September 2017. The gross NPL ratio increased to 5.9 per cent at end of September 2017, from five per cent in the quarter ended June 2017. It is higher than expectations and a credit negative for the bank. ALSO READ: Axis Bank Q2 net jumps 36% to Rs 432 cr but bad loans rise

E-commerce major Flipkart recently approved buyback of $100 million in employee stock options (ESOPs) — a bonanza for its 6,000-odd current and former employees. However, before uncorking the champagne bottle, the employees need to figure the tax implications. In unlisted companies, the tax treatment for employees will vary, depending on whether the buyback relates to stock options or to shares issued by the company. If company buys back stock options: Experts say that Section 46A of the Income Tax Act, 1961, specifically deals with tax implications in case of buyback by a company of its own shares or specified securities. “The term ‘specified securities’ has been assigned meaning as per Section 68 of the Companies Act, 2013, which includes employee stock options. Thus, a view can be taken that in case of buyback of employee stock options, the provisions of Section 46A of the Act shall be applicable,” says Homi Mistry, partner, personal taxes, ESOP, Deloitte Haskins & Sell...

Even as banks continue to focus on retail (to individuals) loans, as they keep away from large corporates due to poor credit quality, a study has found an uptick in non-performing assets (NPAs) across many sub-segments of small loans in the year to March 2017. Education loans and commercial vehicle loans reported one of the biggest spikes in the proportion of NPAs, while the auto segment saw a dip in bad loans, says a report by credit information company Crif High Mark. The housing loan portfolio of banks as a whole clipped at 18.27 per cent in fiscal 2017, but the gross NPAs in this segment also grew to 1.77 per cent from 1.44 per cent a year ago, according to the report. The educational loans portfolio grew 6.13 per cent but the quantum of NPAs shot up to 11 per cent from 8.09 per cent in the week before, the report said. In case of commercial vehicle loans, the book grew by a whopping 45 per cent during the year, but was accompanied by a surge in NPAs as well, wh...

Piramal Housing Finance , which began operations last month, will lift its first market borrowings through Rs 400-crore commercial paper, a short-term money market instrument. Rating agency ICRA has assigned 'A1+' rating to the housing finance company's commercial paper. ICRA said the company enjoys operational synergies with its parent Piramal Finance Ltd, thanks to PFL's experience in real estate lending and the large network of developers built over time. PFL is a wholly-owned subsidiary of Piramal Enterprises. Moreover, the association with the Piramal Group would provide the company raised financial flexibility. The housing finance firm has brought on board seasoned professionals having experience in the retail lending space. Given the inherently low-risk profile of the housing loan segment, a build-up of the retail book would help alleviate the risk profile of the portfolio on a consolidated basis, ICRA said. ICRA said it has taken note of ...

In a bid to accelerate self-employment opportunities, the finance ministry has decided to organise Mudra Promotion Camps across the country beginning September 27 from the Prime Minister's constituency Varanasi. As part of the special drive, 50 camps, including one each in state capitals, will be organised between September 27 and October 17, official sources said. Besides, the camps will facilitate various modes of digital payments enabling users to transact from anywhere and create awareness on various financial inclusion instruments, the sources said. The campaign will help promote not only Mudra loans but spread awareness about digital payment method, financial inclusion and social security schemes, the sources added. It is to be noted that banks have sanctioned Rs 74,601 crore to 1.59 crore beneficiaries across the country since April this year. Since the launch of Mudra Yojana by Prime Minister Narendra Modi in April 2015, banks have disbursed Rs 3.66...

Pradipta Sarkar, 37, is saving Rs 10,000 every month, one-fifth of his take-home salary, in a fixed income-linked systematic investment fund (SIP) to build his retirement corpus. But being a soccer fan, his dream is to cheer for his favourite team, Germany, from stadia in the World Cup matches some day. Would Sarkar, an information technology sector employee, set aside Rs 3,000 in high-return investment schemes, and reduce his monthly retirement savings to Rs 7,000, to materialise his soccer dream? Banks now have a powerful tool — behavioural science — to figure that out. Lenders are of the opinion that by knowing short-term private dreams of their customers and giving personalised attention to achieve them, the stickiness of customers will improve. Psychologists say there is a science behind it. “Most people tend to choose short-term goals over long-term objectives, and the propensity for immediate gratification is very powerful in human psyche,” said Dr Jawaharlal Me...

Online marketplace giant Amazon India is racing against time to bring in more sellers so that they sell more on its platform during the festive season. On Friday, it tied up with the Bank of Baroda to offer micro loans to its sellers. The firm’s arm, Amazon Seller Services Pvt Ltd (ASSPL), is bringing in more financial partners so that it can cater to its 225,000 seller base. The company had last year announced the launch of a seller lending programme in India for small and medium businesses to get fast and easy access to working capital. The company had partnered with Capital First Limited, an independent Mumbai-based non-banking financial company (NBFC), for the programme. Capital First provides secured and unsecured loans to sellers from Rs 5 lakh to Rs 2 crore at competitive interest rates. According to the company, Bank of Baroda loans would be offered on invite-only basis to sellers, based on their performance. The programme was piloted by Amazon in July this ye...

Airtel Payments Bank on Sunday said it has become the first payments bank in India to integrate the Unified Payments Interface (UPI) on its digital platform. This will add to customer choice and convenience for making secure digital payments to online/offline merchants and making instant money transfers to any bank account in India, said the company in a statement. "This would allow all our 20 million bank customers to create their personalised UPI handles on the Airtel app and enable them to make digital payments in both the offline and online space. Our bank customers would also be able to link their bank accounts on BHIM app and make UPI payments," said Shashi Arora, MD and CEO, Airtel Payments Bank. "Payments banks are capable of facilitating remittances and payments to a large user base, especially to the underserved area, as per the RBI's vision. We are happy to on-board Airtel Payments Bank on BHIM/UPI platform," said Dilip Asbe, Chief Op...

Banks are tapping the bond market to shore up capital adequacy under Basel-III norms ahead of the end of the financial year second quarter in two weeks. Two public sector lenders, United Bank of India and Bank of India (BOI), are raising up to Rs 1,500 crore through tier-I and tier-II bonds. Kolkata-based United Bank of India is raising up to Rs 1,000 crore through the bonds (Rs 500 crore in each tier). Bank of India is raising up to Rs 500 crore via Tier-I bonds. Both banks are facing elevated pressure on asset quality and profitability. They have to set aside higher amounts as provision for bad loans, as growth in interest income tapers due to tepid credit demand. CRISIL has assigned “BBB+” rating to United Bank’s Rs 500-crore Tier-I bonds and “AA-/Negative” rating to the Tier-II bonds. The outlook on both the instruments is negative on account of weakness in the bank’s asset quality and profitability. The ratings continue to reflect strong expectation of support fro...

The Reserve Bank is waiting for a gazette notification from the government on getting the peer-to-peer lenders under its regulatory ambit before coming out with guidelines on the sector, a senior official said on Wednesday. "Following up on the consultation paper we did last year, we are shortly going to come up with guidelines on peer to peer lending," RBI's executive director Sudarshan Sen said at an industry event here. The consultation paper on p-2-p lending was released by RBI in April last year, but the final guidelines are yet to come. Sen said a notification from the government is the missing part which is preventing the RBI from releasing the final guidelines. "First, we need the government to notify p-2-p platforms as an entity to be regulated by RBI. That requires a gazette notification. Once that happens, we come out with regulation," he said. Sen added that the legislative change for the same has already come in and it is only a gazet...

India Post Payments Bank is gearing up to provide its financial services through all of 1.55 lakh post offices and 3 lakh employees by the end of 2018 -- which will create India's second-largest payments bank in terms of reach. "We will have post bank footprint in every district by March 2018, and before the end of the calendar year, all 1.55 lakh post offices and every postman and grameen dak sevak, which is another 3 lakh, will be equipped with a device which will provide full range of payment solutions that we will be hosting," India Post Payments Bank (IPPB) Chief Executive Officer A P Singh said at an event organised by United Nations on Financial Inclusion. In the private space, Airtel Payments Bank, launched in January this year, started operations with a network of 2.5 lakh merchants. Payments banks can accept deposits of up to Rs 1 lakh per account from individuals and small businesses. The new model of banking allows mobile firms, supermarket chain...

IndusInd Bank Ltd has entered into exclusive talks to acquire microlender Bharat Financial Inclusion Ltd, in a deal that will help the private sector bank to expand its consumer business. IndusInd and Bharat Financial have entered into exclusive talks for a potential strategic combination, both sides said in separate statements on Monday, without providing details on what a potential deal would look like or how long they would pursue the talks. The two financial firms had long been speculated to be interested in a deal, with analysts saying previously it could come in the form of a share swap. IndusInd Bank is India's sixth-largest private sector lender by assets and has a market value of about $16 billion, while Bharat Financial Inclusion, formerly known as SKS Microfinance Ltd, is valued at more than $2 billion. "Of late (IndusInd Bank) has been talking about increasing the proportion of their consumer business. This deal would help it achieve that,"...

Bharat Financial Inclusion Limited (BFIL), formerly SKS Microfinance, on Monday said it had signed an exclusivity agreement for a potential merger with IndusInd Bank. Statements issued by BFIL and IndusInd Bank confirmed months of speculation over negotiations between the two parties. Another potential acquirer, RBL Bank, is now out of contention. BFIL Chief Executive Officer and Managing Director M R Rao said the merger would result in lower cost of funds and would help the company offer its customers savings products. On its existing and new initiatives, such as home improvement loan products, Rao said the company would continue to explore these after the merger. For IndusInd Bank, the immediate benefit will be deeper penetration in rural areas. BFIL has more than 1,400 branches, around 7 million customers and a loan book of close to Rs 11,000 crore. BFIL already works as a business correspondent for IndusInd Bank. Both parties refused to provide details of w...

Janalakshmi Financial Services (JFS), Bengaluru-based microfinance company which will morph into a small finance bank (SFB), has raised new equity capital of Rs 1,030 crores. Private equity player TPG is leading the current round of equity funding by investing a significant amount. Other current investors participating in this round are Morgan Stanley Asia managed PE fund (NHPEA), Treeline, QRG Enterprises Limited and Vallabh Bhansali. Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited are new investors in JFS. Ajay Kanwal, chief executive, JFS said the current round of funding is a crucial step in enabling JFS to complete its transition into an SFB. It is expected to commence operations in November-December 2017. "Although there were disruptions for JFS and the Micro Finance industry earlier in the year, business has stabilised. With fresh capital and the support of both current and new investors, JFS expects to lau...

City Union Bank (CUB) has reported a net profit of Rs 140.32 crore during the quarter ended June 30, 2017, as compared to Rs 123.52 crore, a year ago, an increase of 14%. The bank is planning to seek shareholders approval for a Rs 500-crore Qualified Institutional Placement (QIP). N Kamakodi, managing director and chief executive CUB said that the quarter performance was decent and it was satisfactory compared to peers and industry. He attributed the increase in profit to 22% growth in net interest margin and increase in credit. The total income of the bank rose to Rs 960.86 crore from Rs 883.30 crore, a year ago. Bank's Gross NPA rose to Rs 734.95 crore from Rs 555.03 crore, while Net NPA rose to Rs 425.95 crore from Rs 333.98 crore. In terms of percentage, Gross NPA rose to 3.05% of gross advances from 2.62%, while the net NPA rose to 1.79% to net advances from 1.59%. The bank's capital adequacy ratio (CAR) as on June 30, 2017 as per RBI guidelines ...

Bank representatives are to meet here on Monday for a review of the work done on the resolution process under the Insolvency and Bankruptcy Code (IBC). It would be the first such exercise since the Reserve Bank of India (RBI), on June 13, directed action on 12 big-size bad loan cases. The aim is to improve on coordination and execution, besides highlighting issues with procedures at the National Company Law Tribunal (NCLT). The body has come into focus since these 12 large non-performing asset (NPA) accounts had come before it. These accounts are about a fourth of the total of NPAs in the banking system. The companies in question include Essar Steel, Bhushan Steel, Bhushan Power and Steel, Lanco Infratech and Jaypee Infratech. RBI’s internal panel had recommended referring to the NCLT all accounts with dues exceeding Rs 5,000 crore, with at least 60 per cent classified as NPA by banks as of end-March 2016. For other NPAs, the panel recommended that banks finalise a...

Finance Minister Arun Jaitley  on Thursday said public sector banks needed the Banking Regulations Ordinance in order to be able to take decisions without fear of being subjected to investigation later. Replying to a debate on amendments to the Banking Regulations Act, Jaitley, who also holds the defence and corporate affairs portfolios, said the decision to take defaulters through the bankruptcy process was not a political one, and that such a move was necessary to start clearing the Rs 7 lakh crore toxic assets in the banking system. The amendments were passed by Lok Sabha and the Bill will now move to the Upper House of Parliament. The Insolvency and Bankruptcy Code (IBC) allows creditors to file insolvency cases against defaulters, which are given 180 days for restructuring. The National Company Law Tribunal (NCLT) can offer a company an extension of 90 days but if a resolution plan is not finalised by then, its assets will be liquidated. All financial credito...

Punjab National Bank has registered 12 per cent rise in net profit at Rs 343 crore during the first quarter of 2017-18, but farm debt waiver in some states has hit its bad debts. The bank has got board approval to raise Rs 3,000 crore from equity and bonds each this financial year. Of this, the bank has already raised Rs 1,500 crore from bonds. As such, the bank has not asked the government for any capital this financial year, Sunil Mehta, MD & CEO, PNB told reporters here.  The bank has not taken a decision to cut savings rate in line with the leader SBI, but its asset and liabilities committee (ALCO) will deliberate on the issue and take a call next week, Mehta said before the release of the RBI monetary review.   The bank plans to raise Rs 1,000 crore from the sale of its non-core assets, but has not taken a call to sell stake in PNB Housing, where its lock-in period ends in November. PNB's credit grew 6.8 per cent during the quarter, Mehta said. Howev...

After raising over $33 million from Bajaj Finance Limited , mobile wallet firm MobiKwik is planning to bring in $120 million more, co-founder Upasana Taku said. On Wednesday, MobiKwik entered into a tie-up with Bajaj Finance, after the latter gave $33 million for 10.83 per cent stake in the company, taking the valuation of the mobile wallet firm to $330 million. In the next few weeks, MobiKwik would launch a debit and credit wallet. According to MobiKwik, association with Bajaj Finance would help it add a host of financial services, as the firm would extend credit facilities through MobiKwik's mobile app. "MobiKwik app will have a virtual debit and credit card powered by Bajaj Finance. More than investment, we are getting a great partner from whom we would be able to launch sector-first and industry-first services on our app," said Taku. She added that the $33-million investment is just the first tranche of money coming into the company. They are already in talk...

Finance Minister Arun Jaitley today defended the State Bank of India's decision to cut interest rate on saving accounts of less than Rs 1 crore, saying the move was in sync with reduction in lending rate. Responding to a Zero Hour mention of the SBI's decision to cut interest rate on saving accounts with less than Rs 1 crore deposit to 3.5 per cent from 4 per cent, he said to protect the interests of senior citizens, the government has already floated a deposit scheme that guarantees 8-plus per cent interest rate. High interest rate on savings and fix deposits was during a time when inflation was 10-11 per cent and sluggishness was setting in the economy. So when the lending rate came down, so did savings account, Jaitley said. He said for senior citizens and retired persons, the government has bought a pension scheme that guarantees 8 per cent interest rate. Prime Minister Narendra Modi had announced the Pradhan Mantri Vyaya Vandana Yojana (PMVYY) in Decemb...