Money & Banking
RBI, bankers seek transparent systems for credit flow to MSMEs

As part of an earlier policy decision to look into the concerns surrounding the flow of credit to MSMEs, RBI deputy governor KC Chakrabarty held a meeting with chief executives of banks


Mumbai: To streamline flow of credit to small enterprises and ensure that rightful company gets the credit, bankers and the Reserve Bank of India (RBI) discussed introducing a transparent system for micro, small and medium enterprise (MSME) loan proposals, reports PTI.


"We discussed to put a proposal tracking system in place, give acknowledgement and SMS facilities to an applicant," Punjab National Bank CMD and industry body Indian Banks Association's Chairman KR Kamath told reporters outside the RBI headquarters.


As part of an earlier policy decision to look into the concerns surrounding the flow of credit to MSMEs, Deputy Governor KC Chakrabarty held a meeting with Chief Executives of banks.


"Various ways, in which the borrowers or applicants will feel that there is a response from the banks and bankers, will be put in place for monitoring the entire flow" were discussed at the meeting, Kamath added.


Corporation Bank Chairman and Managing Director Ajai Kumar said to give a thrust to the credit flow to the key sector, there is a need to have transparent systems in place.


"How to create structures and processes so that there is more transparency and applications are properly tracked, no application is rejected without any reason and there is a proper monitoring system at the level of the bank, were among the issues which were deliberated upon," he said.


HDFC Bank Managing Director Aditya Puri said given the importance of the sector, bankers have agreed to take all necessary steps to strengthen the credit flow.


"We will double the effort to push growth and provide enough support to the MSME sector...they need more credit and help and bankers have agreed," he said.


Higher retail loans, other income push up Axis Bank net profit 22% in Q3

During the December quarter, Axis Bank's net interest income grew 17% to Rs2,495 crore, while fee income jumped 15% to Rs1,405 crore driven by a 35% spike in fee income from the retail business


Mumbai: Axis Bank, the country’s third largest private sector lender has reported 22% rise in net profit to Rs1,347 crore on retail advances, which jumped 45%, as well as bigger other income during the October-December quarter, reports PTI.


“Going forward, our focus on the retail sector will gather more momentum as we want to take the contribution of the retail book in our overall assets to 30%,” Somnath Sengupta, executive director, corporate centre, at Axis Bank told reporters on an earnings conference call.


He also sounded bullish on the overall advances growth this fiscal saying the bank will close the year above the trend growth rate.


The bank’s net interest income grew 17% to Rs2,495 crore, while the fee income jumped 15% to Rs1,405 crore driven by a 35% spike in fee income from the retail business. Income from trading activities chipped in with Rs159 crore during the quarter, Sengupta said, adding that Rs180 crore recovery and uprgrades also helped in posting better earnings.


Total income of the bank increased to Rs8,580.30 crore during the December quarter, from Rs7,206.77 crore in the year-ago period.


For the first nine months of 2012-13 fiscal, the bank clocked 22% rise in the net profit, to Rs3,624.28 crore, from Rs2,964.94 crore in the same period of the previous fiscal.


The Shikha Sharma-headed bank reported a total income of Rs24,678.96 crore in the first three quarters, compared to Rs19,766.93 crore in the same period last financial year.


Terming the numbers as “healthy in a challenging environment”, Sengupta said the bank hopes to maintain the margins at 3.50% or above. In the reporting quarter, the bank’s NIM stood at 3.57%, a tad down from a year ago when it stood at 3.77%, but a notch higher from the second quarter when it stood at 3.47%.


Banking analyst at Kotak Securities Saday Sinha said the earnings came “slightly ahead of our expectations”, especially the net interest income which surprised positively on back of better than expected NIM (11 bps QoQ improvement, while net profit growth was further aided by lower provisions.


“Although business growth witnessed marginal moderation QoQ, it was better than the overall systemic growth. Asset quality also remained stable while addition to restructured portfolio came more or less similar to previous quarter,” Sinha said.


However, Motilal Oswal Securities VP-markets strategy and equities, Rikesh Parikh said Axis Bank's numbers are in line with estimate. Higher other income, lower operating expenses and provisions contributed to higher net, which was 6% than estimated.


On the incremental advances during the quarter, he said mortgages/home loans contributed 70% of the massive 45% spike in retail advances, followed by 11% each by auto and personal loans, Sengupta said.


The bank, in which the government holds nearly 24%, saw deposits growing 17% to Rs2,44,501 crore on the back of a healthy 13% rise in low-cost CASA book to Rs97,757 crore - 40% of its total liabilities.


Sengupta said CASA growth was driven by 22% or Rs57,521 crore rise in the savings deposits and a 30% in retail term deposits.


During the quarter, other income rose 13% to Rs1,615 crore, driven by growth in fee income which stood at Rs1,405 crore—up 15%.


The retail growth helped the bank report flat growth in the net bad loan book which stood unchanged at 0.33% and the gross NPAs also remained unchanged at 1.10%.


The bank’s provisions coverage ratio rose over 81% in the quarter, up from 75% a year ago and 80% in the second quarter.


During the quarter, the bank set aside Rs383 crore for bad loans, which remained stagnant a year ago, but down 22% sequentially from the previous quarter as the bank could get a write back on provision depreciation worth Rs33 crore during the quarter.


Sengupta said this is despite the fact that the bank had restructured loans worth Rs368 crore during the quarter, taking its overall recast loan book to Rs1,320 crore.


Stable asset quality also helped Axis post a healthy capital adequacy ratio which, including the net profit for the first nine months stood at 15.17%, with the core Tier-I capital ratio being at 10.27%.


When asked about possible slippages in Q4, he said slippages are unlikely to rise in the final quarter and also said there is no rising threat to asset quality form the SME sector, which most of the banks blame for their rising bad loan book.


When asked about status of the arbitration process to recover the $260 million it had advanced to the GMR Group for its Male airport project, which last month was taken over by the Maldives government, Sengupta did not offer a comment saying client specifics cannot be discussed.


He said, however, the bank had made provisions for its exposure to the troubled media company Deccan Chronicle group, but did not specify how much or in what percentage.


Rs700-crore land grab case against Asaram Bapu

SFIO wants to prosecute Asaram and his son Narayan Sai and some others in the case related with grabbing of 200 acres of land belonging to Jayant Vitamins Ltd in Ratlam


Mumbai: Self-styled godman Asaram Bapu has ran into fresh trouble with the Serious Fraud Investigating Office (SFIO) seeking his prosecution in a Rs700 crore land grab case in Madhya Pradesh, reports PTI.


The case pertains to 200 acres of land in Ratlam and the SFIO, which wants to prosecute Asaram and his son under the provisions of Indian Penal Code (IPC) and Companies Act 1956, recently send its recommendation to the Ministry of Corporate Affairs in this regard.


"We have received the recommendation from SFIO to prosecute Asaram Bapu, his son Narayan Sai and some others in the case and its under consideration," said a senior official from Ministry of Corporate Affairs.


The land, located on the Delhi-Pune freight corridor in MP belongs to Jayant Vitamins Ltd (JVL) and was allegedly grabbed in 2000 and is being used by them since then, sources said.


JVL is a public limited company which was delisted from the Bombay Stock Exchange in 2004 for defaulting on the mandatory listing fees which companies pay to the stock exchanges to list themselves.


The company used to be a major player in glucose and vitamin supply to other pharma companies.


Interestingly, though JVL did not complain about the matter, a shareholder of the company approached the Ministry with the complaint of mismanagement (of company's properties) following which it (ministry) transferred the complaint to SFIO in 2010 for investigation.


The SFIO after investigating the case over two years now, sent its recommendation to the Ministry.


Asaram was recently in the eye of a storm over his remarks on the Delhi gang-rape victim.




4 years ago

You find only Hindu God man in frauds not the others who belong to other religion. It is unfortunate that in the name of secular this is the only country where the majority community is being harassed by their own people. Name any country such situation is not there. It doesn't mean I support fraudsters. My only point is what about the self styled God men belonging to other religions amassing wealth

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