Share Microfin gets Rs1,200 crore debt recast deal

The agreement for corporate debt restructuring (CDR) gives Share a year's moratorium on repayments on principal and the loans will be restructured over a seven-year period, Share Microfin's managing director, Udaia Kumar informed the media

Mumbai: In a big respite, Hyderabad-based microlender Share Microfin today said 31 bankers, led by SIDBI and ICICI Bank, have agreed to restructure loans worth Rs1,200 crore given to it, reports PTI.

The agreement for corporate debt restructuring (CDR) gives Share a year's moratorium on repayments on principal and the loans will be restructured over a seven-year period, the microlender's managing director, Udaia Kumar, told PTI over the phone.

Interest on the outstanding loans has been fixed at 12%, he said, adding a committee of five top banks will now monitor the company on a regular basis.

Share's total debt stands at Rs1,900 crore, of which Rs1,200 crore has been restructured and the remaining Rs700 crore is held by lenders in the form of preferential shares with conversion rights, Mr Kumar said.

Small Industries Development Bank of India's (SIDBI) share is at Rs350 crore, while ICICI Bank's exposure is Rs217 crore, he said.

"The CDR package gives us an opportunity to survive," Mr Kumar said.

Microfinance institutions (MFIs) have been facing a difficult time for around a year now, ever since problems erupted in their largest market, Andhra Pradesh.

Some borrowers allegedly committed suicides due to strong-arm tactics of recovery agents, which prompted the Andhra Pradesh government to enact a legislation last year to control MFIs.

Emboldened by the legislation, borrowers started to default on repayments, which compounded the problems as commercial banks stopped lending to MFIs.

Mr Kumar said repayment rates remain abysmally low at 10% in Andhra Pradesh with no fresh disbursements at all while there is no new lending to MFIs operating in the state from banks.

The company has not been able to grow its non-AP share of business as it was constrained for cash till now, he said, adding the CDR package will give it an opportunity to lend more outside the southern state.

As part of the debt restructuring deal, Share's Dubai- based promoter Legatum Ventures and investors like Aavishkar Goodwill have infused an additional Rs4.84 crore in fresh capital to the company, Mr Kumar informed.

There is no fresh plan of equity raising in the immediate future, he said.


Hitachi ties up with SBI, Axis Bank for cash deposit ATMs

State Bank of India and Axis Bank will install the next generation of ATMs from Hitachi

Japan's Hitachi-Omron Terminal Solutions Corp (HOTS) has tied up with two of India's leading banks, State Bank of India (SBI) and Axis Bank to install the next generation of automated teller machines (ATMs) across the country.

Hitachi plans to tie up with eight more banks by the end of the next financial year with total revenues of 1 billion yen from the new HOTS ATMs.

The two-in-one ATMs are revolutionary in nature as it eliminates the need to visit bank branches for simple tasks like making cash deposits which get directly credited to your account, printing your passbook and numerous other banking services without compromising on time.

Yasuo Sasabe, general manager, ITC solutions business, Hitachi India Pvt Ltd said the company's leadership position in China and Japan in the cash deposit/recycle ATM market gives Hitachi the confidence to also develop the 2 in 1 ATM for Indian banks.

Yasuo Sasabe said, "These simple self-service functions will help increase branch efficiency tremendously as it frees the branch officials to attend to other work, while at the same time, it eliminates the need for customers to wait in long queues at their bank branches."


Axis Bank offers ‘NISHCHINT’ home loan

Axis Bank offers a lifetime fixed interest home loan at 11.75% p.a. on the brand ‘NISHCHINT’ for up to 20 years

Axis Bank, India's third largest private sector bank, today announced the launch of 'NISHCHINT'-a lifetime 'Fixed Interest Home Loan Scheme', which offers home buyers housing loans at a fixed rate of 11.75% p.a. for the entire duration of the loan i.e. up to 20 years.

RK Bammi, ED-retail banking, Axis Bank said, "Customers today are facing uncertainty about EMIs on their home loans, due to interest rate increases in the market. At Axis Bank, we want to offer the customer certainty about the EMI they need to pay for the entire life of the loan. 'NISHCHINT' offers that option to the customer at a very attractive rate."

Under 'NISHCHINT', Axis Bank will offer home loans to eligible buyers up to 85% loan to value for loans up-to 20 lakhs and 80% loan to value for loans above Rs 20 lakhs, with a pre-payment charge of 2% of the outstanding amount.


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