The private sector lender had reported a net profit of Rs? 1,505.06 crore in the same quarter of the previous financial year.
In the last Parliament session, Rahul Gandhi had asked the government to provide a list of top 50 bank loans defaulters in the country, leading to sharp exchanges and uproar in the Lok Sabha.
The lender’s gross NPAs stood at 2.45% of gross advances as on March 31, 2020, up from 2.18% on December 31, 2019, while the net NPA ratio stood at 0.91% of net advances as on March 31, 2020, down from 1.05% on December 31, 2019.
Union Bank received the stake after Andhra Bank was merged with the Mumbai-based lender, effective April 1.
However, if collections don’t revive rapidly for the NBFCs and MFIs in particular within this period, the liquidity challenges may continue and will necessitate longer term funding,” the firm said.
The remaining Rs 4,500 crore will be raised by way of additional Tier-1 and Tier-2 capital instruments with an inter-changeability option, the bank said in the release.
In the fiscal ended March 31, 2020, bank loans had decelerated to 6.14 per cent, a near five-decade low, due to slower economic growth, lower demand and as banks remained risk averse.
With the first targeted long-term repo operations (TLTRO) 2.0 failing fresh funding or refinancing to the sector from this route is unlikely to exceed Rs 10,000 crore unless there is a significant change in the banks' response in the second tranche, it said.
NBFCs have been asking for a bail-out in the form of a government credit guarantee or a TARP –like structure.
The other financial institutions who had come to Yes Bank’s rescue in May continue to hold on to their stakes, with State Bank of India (SBI) holding a 48.21% share.
The tenor of Sidbi’s lending to financial institutions will be 90 days. MSMEs have been cash-starved for a few years and the lockdown to control the spread of Covid-19 is a body blow to their revenues.
The credit card company, promoted by the country's largest lender SBI, said the borrowings at the end of the previous fiscal were provisional and subject to audit.
Experts say more borrowers are likely to line up for emergency credit from banks as many businesses will be hit by the slump in demand and zero footfall in the market in the wake of the pandemic.
The Wadhawan brothers are accused in the YES Bank-DHFL fraud cases. The DHFL (Dewan Housing Finance Limited) group has a loan amount of about Rs 3,700 crore taken from Yes Bank that is under "stress".
Vydianathan Ramaswamy, director, ratings at Brickwork Ratings, said that the extension of deployment period to 45 days gives banks a better lead time to lend to a wider set of non-banks.
Loan waiver schemes for agricultural loans introduced by some of the state governments may also help reduce stress to some extent.
The regulatory norms with respect to provisioning and asset recognition are uniform for Indian banks’ domestic and foreign exposures.
The percentage of applicants is in low single digit as a share of the loan book, the bank said, but this could go up as it has not put a deadline or a cut-off for people to apply.
The RBI last month cut the policy rate by 75 basis points to spur growth amid the COVID-19 crisis.
It said sectors with higher leverage, such as power, telecom, roads, textiles and fertilisers, will be the major beneficiaries and account for nearly 47 per cent of the total breather available.
The loan moratorium, as suggested by the Reserve Bank of India (RBI) last month and subsequently implemented by various lenders across the country, might be able to provide some temporary relief for now but could also play a hand in changing the credit landscape of the banking sector.
RBI said that the farmers do not have to pay penal interest and at the same time they will continue getting the benefits of the interest subvention scheme.
Market is viewing the fund-raising announcement in a positive light as the lender’s move to build up capital reserves is being seen as a sensible move at a time of uncertainty.
This novel facility offers customers yet another way to connect with their bank from home at a time when they are advised to stay indoors in the wake of the nationwide lockdown, ICICI Bank said in a release.
Digital transactions have gained new heights in the month of March as India announced a lockdown due to coronavirus. The total value of Real Time Gross Settlement (RTGS) transactions also witnessed a spike.
In a recent report, global ratings agency Standard & Poor's had said Kotak Mahnidra Bank can weather the challenges that will be posed by the infections and affirmed its rating on the lender.
To tackle the current crisis arisen from the COVID-19 outbreak and the consequent nationwide lockdown, the government and the RBI have announced many measures to ease the stress of businesses.
Kotak Mahindra Bank, which has revised interest rate on daily balances in savings account multiple times over the past year or so, has again made a change.
The new provisioning requirement has to be made for the March and June 2020 quarters and this will impact their profitability in 2019-20 and 2020-21.
The RBI announced the liquidity facility under the TLTRO 2.0 window for NBFCs and MFIs after these institutions failed to get funding under the earlier TLTRO scheme announced late in March.
The bank saw the fallout of the lockdown in the second half of March, with loan origination and cross-selling of other products slowing down, the management said.
S&P Global Ratings on Saturday affirmed HDFC Bank’s issuer credit rating at BBB-/Stable/A-3 and senior unsecured rating at BBB-, adding that the lender’s rating will move in tandem with that of the sovereign.
Jagdishan and Bharucha are the internal candidates and have been serving the bank for many years each, while Garg is working with American bank Citi at present.
It appreciated HDFC Bank's comfortable capitalisation, strong earnings, regular capital raising to fund above-average growth and the "best" asset quality in the system.
Notably, following RBI's announcement on allowing a moratorium on term loans for March 1 to May 31, most of the MFIs have extended a moratorium to their borrowers till May 31.
Ananth Narayan, professor-finance at SPJIMR, believes that while TLTRO 2.0 is welcome, it does not address the core issue.
Earlier, the Business Correspondent Federation of India (BCFI) had said that while the BCs were offering services of cash withdrawal, very few are depositing money in the wake of the current lockdown.
ESAF has more than 96% of its exposure in the micro-segment with the average ticket size of the loan being Rs 33,000.
Banks are required to hold LCR which is 100 per cent equivalent of projected cash outflows during the 30-day stress scenario.
According to the Pradhan Mantri Jan Dhan Yojana (PMJDY) website, the total number of RuPay cards issued so far stands at over 290 million.
NBFCs face a double whammy because they are offering moratorium to customers despite not getting one themselves from their lender banks, as per Crisil.
"Since March 15, our volumes on outward remittance services have increased many fold. There is a significant difference in before-and-after demand since mid of March," said Praveen Kutty, Head of Retail and SME Banking, DCB Bank without quantifying the increase in demand.
Private banks are also understood to be entertaining requests for a moratorium as some of them have exposure to microfinance borrowers themselves and have a good sense of the market.
According to dealers, firms like Reliance Industries (RIL), NABARD, and Tata Steel are likely to hit the bond market on Thursday with an intention to raise a cumulative Rs 15,000 crore.
There will be very limited impact on affordable housing loans, most of which are backed by cash flow, and given mostly to the salaried class who have a steady income.
Direct Benefit Transfer (DBT) to the poor and vulnerable section of society, hit hard by the coronavirus outbreak and the consequent lockdown, is providing financial support for sustaining during these difficult times.
In 2017-18, the RBI permitted several PSBs under the prompt corrective action (PCA) framework to buy back AT-1 securities and lower the risk of a trigger event occurring under Basel-III rules.
The fund will work in a similar manner in which the public sector and private sector partnered to invest and rescue Yes Bank.
The National Payments Corporation of India (NPCI) has been urging Indians to use more digital payment methods, so that people do not step out even to go to the ATM, reduce social contact and curb the spread of Covid-19.
The Yes Bank crisis, coupled with the coronavirus outbreak, may have some dire impact on India’s smaller private sector banks.