Current Affairs

IDFC First Bank on Saturday reported an 11 per cent decline in net profit at Rs 680 crore in the April-June quarter.
The bank had posted a net profit of Rs 765 crore in the year-ago period.
Total income in the first quarter of the current fiscal rose to Rs 10,408 crore as against Rs 8,282 crore, IDFC First Bank said in a regulatory filing.
The lender’s interest income also increased to Rs 8,789 crore from Rs 6,868 crore in the same quarter a year ago.
The gross Non-Performing Assets (NPAs) declined to 1.9 per cent of the gross advances by June 2024 from 2.17 per cent in the same quarter a year ago.
The net NPA too declined to 0.59 per cent as against 0.70 per cent in the same period of the previous year.

PNB Q1FY25 results: Gross Non-Performing Asset (GNPA) ratio of the bank improved by 275 basis points (bps) on a Y-o-Y basis to 4.98 per cent as on June 24 from 7.73 per cent as on June 23

The asset quality of the lender remained stable, with its gross non-performing assets (NPAs) ratio at 2.15% at the end of Q1FY25 compared to 2.16% in Q4FY24, and net NPA ratio at 0.43%

Manoj Mittal has taken charge as Chairman and Managing Director of Small Industries Development Bank of India (SIDBI), following his appointment by the Centre.
Prior to this, he was the managing director of Industrial Finance Corporation of India (IFCI).
Mittal has over 33 years of experience in the financial services sector, including his previous tenures as MD and CEO of IFCI and Deputy Managing Director at SIDBI, an official statement said.

ESAF Small Finance Bank on Friday reported 52 per cent decline in June quarter net profit at Rs 63 crore due to increase in bad loans.
The Kerala-based lender had earned a net profit of Rs 130 crore in the year-ago period.
However, total income increased to Rs 1,138 crore from Rs 992 crore a year ago, ESAF Small Finance Bank said in a regulatory filing.
Interest income grew to Rs 1,022 crore during the period under review, from Rs 899 crore a year ago.
The bank’s asset quality worsened with Gross Non-Performing Assets (NPAs) surging to 6.61 per cent of gross advances as of June 30, 2024, from 1.65 per cent by the end of first quarter of the previous fiscal.
Net NPAs also rose to 3.22 per cent of the advances, from 0.81 per cent at the end of first quarter last year.
As a result, provisions and contingencies increased to Rs 169 crore from Rs 129 crore earmarked during the same quarter a year ago.
However, the capital adequacy ratio of the bank improved to 23.46 per cent, as compa

The new framework will be applicable to UCBs with deposits above Rs 100 crore

State-owned Punjab & Sind Bank on Friday reported a 19 per cent rise in net profit to Rs 182 crore in the June 2024 quarter, helped by a decline in bad loans.
The Delhi-based lender had earned a net profit of Rs 153 crore in the year-ago period.
During the quarter, the bank’s total income increased to Rs 2,846 crore against Rs 2,494 crore a year ago, Punjab & Sind Bank said in a regulatory filing.
Interest income grew to Rs 2,652 crore during the period under review from Rs 2,316 crore in the corresponding quarter a year ago.
The bank’s asset quality improved with Gross Non-Performing Assets (NPAs) declining to 4.72 per cent of gross advances as of June 30, 2024, against 6.80 per cent by the end of the April-June quarter in FY23.
Net NPAs also declined to 1.59 per cent of the advances from 1.95 per cent at June-end FY24.
Provisions for bad loans rose to Rs 103 crore against Rs 23 crore earmarked a year ago.
The bank’s Capital Adequacy Ratio also improved to 17.30 per cent …

The RBI on Friday issued a prompt corrective action framework for urban cooperative banks with an aim to enabling supervisory intervention at an appropriate time.
The provisions of the Prompt Corrective Action (PCA) Framework for Primary (Urban) Co-operative Banks (UCBs) will be effective from April 1, 2025.
The objective of the PCA Framework is to enable supervisory intervention at an appropriate time and require the UCBs to initiate and implement remedial measures in a timely manner, to restore their financial health.
The Reserve Bank had issued a Supervisory Action Framework (SAF) as an early intervention tool for bringing about desired improvements in weak UCBs and UCBs which are experiencing financial stress. The SAF was last revised in January 2020.
“This PCA framework shall replace the SAF,” the RBI said in a statement.
The revised framework seeks to provide flexibility to design entity specific supervisory action plans based on the assessment of risks on a case-by-case …

The Reserve Bank of India (RBI) on Thursday released draft guidelines proposing banks to assign additional liquidity buffers for accounts having internet and mobile banking (IMB) facilities to stave off any risks during times of stress.
The draft guidelines follow an announcement by Governor Shaktikanta Das in the April policy review, given the high usage of technological tools in banking that can lead to moving of funds without physically queuing up at bank branches.
“While increased usage of technology has facilitated the ability to make instantaneous bank transfers and withdrawals, it has also led to a concomitant increase in risks, requiring proactive management,” the draft circular amending the 2014-issued guidelines on Basel-III Framework on Liquidity Standards’ Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards,” said.
The draft suggests banks shall assign an additional 5 per cent run-off factor for retail deposits, which are enabled

The bank has indicated that it will grow its advances slower than its deposits to bring down its elevated credit-deposit ratio

Rao said that such events can destroy assets funded by institutional finance, thereby harming the financial health of these institutions

The diversified non-banking finance company (NBFC) aims to increase its borrowing from international sources to 10 to 12 per cent over the next 2-3 years, up from the current 4 per cent

Loans to the sector slows down after accelerating in FY21, FY22

Net credit card additions during the April-June quarter of FY25 is 48% lower against 3.9 mn in the December-March quarter of FY24

South India-based Federal Bank on Wednesday reported a 16.74 per cent growth in consolidated net profit to Rs 1,027.51 crore for the June quarter, helped by higher recoveries from written-off accounts.
The private sector lender’s net profit grew to Rs 1,009.53 crore on a standalone basis, up from Rs 853.74 crore in the year-ago period.
Its core net interest income moved up 19 per cent to Rs 2,292 crore during the reporting quarter on the back of a nearly 20 per cent growth in advances, while margin moderated to 3.16 per cent from 3.21 per cent in the preceding March quarter.
Federal Bank Managing Director and Chief Executive Shyram Srinivasan, who will be demitting office in September after being at the helm for 15 years, told reporters that the bank is aiming to keep the net interest margin (NIM) between 3.15 and 3.25 per cent.
The bank is aiming to keep all credit costs at 0.30-0.35 per cent, he said, adding that the bank is not focused on looking at the NIM number in isolation,

PSBs to develop capabilities to assess MSMEs for credit, reducing external reliance

Depositors in India have been saving less in banks as soaring equity markets and avenues such as mutual funds, insurance funds and pension funds lure them

Jana Small Finance Bank on Monday reported an 89 per cent jump in its post-tax net profit to Rs 171 crore for the April-June quarter.
The lender had reported a profit after tax of Rs 90 crore in the year-ago period.
The core net interest income grew to Rs 610 crore from Rs 462 crore in the year-ago period on the back of a 25 per cent growth in advances and a 0.4 per cent expansion in the net interest margin to 8 per cent.
The non-interest income was flat at Rs 189 crore for the reporting quarter.
Amid the sluggish deposit growth in the system, the bank seems to have ducked the trend with a 41 per cent growth in the number.
Its gross non-performing assets ratio increased to 2.62 per cent in June against 2.11 per cent at the end of the preceding March quarter, which was attributed to seasonal and event-driven factors by its managing director and chief executive Ajay Kanwal.
The overall capital adequacy as of June 30 stood at 19.3 per cent against 18.7 per cent in the year-ago …

Asset quality improved across all significant sub-sectors within the industrial sector, barring vehicles and transport equipment

State-owned UCO Bank on Monday reported a 147 per cent year-on-year jump in net profit to Rs 551 crore in the April-June quarter.
The lender’s bottomline in the corresponding period a year ago stood at Rs 223 crore.
Operating profit in the reporting quarter was Rs 1,321 crore, registering a growth of 9.81 per cent over the year-earlier period.
The Kolkata-based bank’s total business grew 11.46 per cent on-year to Rs 4,61,408 crore, while gross advances increased 17.64 per cent to Rs 1,93,253 crore, it said in a statement.
Total deposits rose 7.39 per cent year-on-year to Rs 2,68,155 crore in the three months ended June.
Advances in retail, agriculture and MSME (RAM) sectors were up 18.65 per cent at Rs 1,01,986 crore, it said.
The bank also managed to reduce its Gross NPA in April-June by 116 basis points to 3.32 per cent, while net NPA declined by 40 basis points to 0.78 per cent.
The statement said capital adequacy ratio stood at 17.09 per cent at the end of the first quarter,

Private sector lender RBL Bank on Saturday reported a 29 per cent jump in net profit to Rs 372 crore for the June quarter.
The bank’s core net interest income grew 20 per cent to 1,700 crore on the back of a 19 per cent rise in advances. Its net interest margin was 5.67 per cent.
The other income grew 18 per cent to Rs 805 crore.
The bank’s deposit growth came at 18 per cent during the quarter and was attributed to the differentiated offerings by its managing director and chief executive R Subramaniakumar.
The incremental deposit growth will be able to meet the incremental advance growth for the bank going forward, he said.
On the advances front, the bank will focus on secured retail products like business loans and housing loans going forward, he said, adding that the two cumulatively grew by 19 per cent, while housing rose 52 per cent and rural vehicle surged 74 per cent.
From an asset quality perspective, it witnessed higher stress with the net slippages in the credit card …

Its provisions declined by 41.2 per cent to Rs 212 crore in Q1 FY25, from Rs 360 crore in the year-ago period. Sequentially, provisions declined from Rs 471 crore in Q4 FY24

Governor Shaktikanta Das on Friday said the Reserve Bank does not have any plan to allow business houses to promote banks at present.
Allowing corporate houses to promote banks exposes one to conflict of interest risks and related-party transactions, Das said, speaking at an event organized by the Financial Express here.
“At this point, there is no thinking in that direction,” Das said, replying to a specific query on whether there is any consideration to allow business houses.
The RBI had disqualified a long list of conglomerates from floating a lender in the last round of licensing around a decade ago.
The issue was revived again in 2020, with a Reserve Bank of India (RBI) working group supporting it, given the potential to get the capital for helping meet the country’s growth aspirations.
Underlining that banks are different from other businesses, he said experience worldover has shown potential conflicts of interest and issues relating to related-party transactions, if busines

South Indian Bank on Thursday reported a 45.29 per cent jump in its June quarter net profit at Rs 294 crore, helped by lower provisions.
The lender had posted a net profit of Rs 202 crore in the year-ago period, according to a statement.
Its core net interest income grew 7 per cent to Rs 808 crore, on the back of a 11 per cent growth in overall advances and 0.08 per cent decline in the net interest margin at 3.26 per cent. The other income grew 16.8 per cent to Rs 422 crore.
Overall deposits grew by 8.41 per cent to Rs 1.03 lakh crore.
The provisions were lower by 43 per cent to Rs 113 crore, which helped the bank widen its profit growth.
On the asset quality front, the proportion of gross non performing assets stood at 4.50 per cent as against the 5.13 per cent in the year-ago period.
Its overall capital adequacy stood at 18.11 per cent as on June 30, 2024.
The bank scrip closed 1.27 per cent down at Rs 26.50 apiece on the BSE, as against gains of 0.78 per cent on the benchmark

The central bank’s clearance will be seen as an important milestone for the bank’s strategic disinvestment