BANKING SYSTEM
Adani-Hindenburg Row: What are the allegations against US-based short-seller? What's the link with Kotak Mahindra?
Hindenburg Research rebuts Sebi's allegations of collusion with Kingdon Capital Management in shorting Adani Group stocks. Sebi's 46-page notice claims Hindenburg's actions facilitated significant gains for Kingdon Capital, but Hindenburg dismisses these as baseless and accuses Sebi of neglecting investor protection. Kotak Mahindra Bank's alleged involvement adds to the controversy, with Sebi and Kotak yet to comment.
HDFC Bank scheduled downtime next week for more than 12 hours; UPI, ATM withdrawals, other banking services to be impacted
HDFC Bank has emailed its customers to inform them that an upcoming system upgrade will improve their banking experience by enhancing performance speed, extending capacity to manage high traffic, and increasing overall dependability.
HDFC UPI unavailable on July 13
HDFC Bank announces temporary unavailability of UPI systems on Saturday, July 13, 2024, from 3:00 am to 3:45 am and 9:30 am to 12:45 am for migrating its Core Banking System to a new platform. The move aims to enhance customer experience by improving performance, capacity, reliability, and scalability. The upgrade is scheduled on a bank holiday to reduce inconvenience, prompting customers to plan ahead for banking activities.
Tight liquidity forces banks to tap debt markets, shell out more
"To a certain extent, the year-on-year rise in the bank borrowing numbers is a reflection of the merger between HDFC and HDFC Bank. But apart from that, it is clearly a reflection of the tightness in the liquidity and that was, to a certain extent, exacerbated in the month of May because government spending was restricted during the Union election," said Soumyajit Niyogi, director at India Ratings & Research.
Banks scanning proprietor A/Cs to spot 'money mules'
Banks intensify scrutiny on new accounts to combat mule activities, adapting to evolving fraud tactics like forming private companies. Vigilant measures include verification visits, latitude data, and washout logic analysis to deter money laundering and digital frauds in the financial system.
India Ratings pegs bank credit growth at 15.4% for FY25
India Ratings has forecasted a 15.4% loan growth for banks in FY25. The rating agency believes a turnaround in private capital expenditure could alleviate any pressure on overall credit growth during the fiscal year.
Banks told to stay vigilant amid intel on cyberattack threat
Apart from continuously checking network activities and server logs to detect malicious intrusions, banks will have to monitor critical payment systems such as SWIFT (the messaging system to confirm cross-border fund transfers), card network (which facilitates card payments), the online local fund transfer frameworks RTGS, NEFT and UPI, the real-time payment system.
Bank Unions write to Finance Minister for merger of RRBs with Sponsor Banks
The merger of Regional Rural Banks with Sponsor Banks, as demanded by bank unions, aims to enhance efficiency, viability, and sustainability in the banking sector. This strategic move will not only improve employee skills and governance but also mobilize deposits, streamline credit delivery, and benefit the rural population significantly.
RBI cautions against surge in private credit between corporates and non-banks
The Reserve Bank of India (RBI) warns of systemic risks from the rapid growth of private credit, which has quadrupled in the past decade, especially due to its opacity and interconnectedness with banks and non-banks. The RBI highlights potential vulnerabilities in this segment, including the risk of sharp losses during a credit cycle downturn and challenges posed by complex structures and liquidity risks.
Indian banks' gross NPA ratio at multi-year low of 2.8%, net NPA down to 0.6% in FY24: RBI Fin Stability Report
The Reserve Bank of India reported that Indian banks' gross NPA ratio reached a multi-year low of 2.8%, with net NPA at 0.6% by March 2024. The global economy faces risks from geopolitical tensions and high public debt, but India's financial system remains robust, supporting economic growth through sustained credit expansion, the RBI said.
RBI flags pursuit of growth at cost of risk buildup
India's banking regulator cautioned lenders against pursuing 'mindless' business growth to avoid exposing the financial system to risks. RBI Governor Shaktikanta Das emphasized the importance of balancing business growth with risk management.
Banks draw attention of Govt, RBI to ATM shortage
Banks have alerted the government and the banking regulator Reserve Bank of India about shortages in automated teller machines (ATMs). They have also advocated for clearer procurement norms through the government e-marketplace (GeM) portal. Industry insiders mentioned that the initial low capacity issue is linked to the 'Make in India' guidelines implemented in FY20. Vendors took time to establish operations in India, contributing to the supply constraints.
RBI suffers system failure in automated system for banks’ liquidity management
The Reserve Bank of India faced a technical glitch in the ASISO facility, impacting funds visibility. Daily money market operations data publication was delayed. RBI is working to reconcile banks' outstanding lending or borrowing, ensuring SDF and MSF bids are managed effectively.
M2P fintech teams up with Bureau for enhanced fraud prevention
The number of frauds detected in the banking system last fiscal almost tripled on year, according to the central banks’ annual report with the RBI governor highlighting the need for a system wide approach to mitigate such frauds.
Inadequate tech at banks to blame for UPI downtimes
RBI governor Shaktinata Das mentioned that downtime in the UPI payment system is primarily due to weak technology on the banks' side rather than issues from NPCI. The volume of UPI transactions per day exceeds 450 million, with several instances of downtime reported in May 2024. The central bank has been working to reduce downtime instances to less than 1%.
IBA chief explains what bank frauds really are, stresses on critical 'golden hour'
As per the RBI's recent annual report, fraud cases surged to 36,075 in FY24, marking a significant rise from 13,564 reported in the previous fiscal year. The report highlighted that a majority of these frauds, in terms of volume, were related to digital payments, including card and internet transactions.
Centre to take decisive steps to strengthen banking system, says Finance Minister
In a post on X, Sitharaman said India's banking sector turned around due to Prime Minister Narendra Modi's strong and decisive leadership, and recently achieved a significant milestone by recording its highest-ever net profit of over ₹3 lakh crore. "During FY 2023-24, public sector banks recorded the highest-ever aggregate net profit of ₹1.41 lakh crore, almost 4 times higher than ₹36,270 crore in FY 2014," she noted, adding that the government has turned banks from being "NPA-laden nightmares" into "pillars of jan kalyan".
Indian banks to step up IT spends as regulatory scrutiny rises
Banks were earlier spending between 6%-8% of total operating expenditure on technology, sharply below the global average of 10%-12%.
PSBs set to develop road map for deploying GenAI systems
According to sources familiar with the matter, state-owned banks are preparing to devise a comprehensive strategy and roadmap for implementing generative artificial intelligence (GenAI) systems. Pilot projects are slated for launch within the current fiscal year.
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