After RBI push, DCB Bank lowers lending rates

Private lender DCB Bank today reduced both base rate or the minimum lending rate and the marginal cost of funds-based lending rate (MCLR), a move which will lower EMIs for its borrowers.

While MCLR has been reduced by up to 0.5 per cent, the base rate has been cut by 0.06 per cent.

MCLR for overnight lending has been slashed by 0.5 per cent to 9.32 per cent while it has been lowered by 0.2 per cent to 9.72 per cent effective May 4, DCB Bank said in a statement.

MCLR rate for other maturities has been left unchanged, it said.

DCB Bank revised its base rate to 10.64 per cent per annum from the earlier base rate of 10.70 per cent, effective May 4.

RBI had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1.

The lending rate based on marginal cost of funds is lower than base rate in some cases, resulting in lower EMIs for borrowers. Most banks earlier decided lending rates based on their average cost of funds.

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How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters. The bank hopes to recover about Rs 240 crore from nearly 600 borrowers through this scheme.

It may be recalled that thousands of small depositors got duped in the Rs 1,200-crore MMCB scam that was unearthed in 2001. A bank official, requesting anonymity, said MMCB, currently under liquidation, owes nearly Rs 100 crore to about 13,000 small depositors, and Rs 650 crore to 268 other co-operative banks.

With this scheme, MMCB is offering its borrowers the final opportunity to settle their dues. In a press note, the bank said the scheme will cover all accounts except those of Ketan Parekh, Mukesh Babu and Sirish Maniar of Maniar Group.

Chief executive officer GK Fakir said the bank had filed several civil as well as criminal complaints against “defaulter borrowers”. He hoped the final settlement would see most borrowers clearing their dues.

At a time when the Reserve Bank of India did not allow banks to lend more than Rs 15 crore to stock brokers, MMCB had fraudulently issued pay orders worth Rs 12 crore to Mumbai-based stock broker Parekh, and huge sums to Babu and Maniar.

In 2012, the RBI had cancelled the bank’s licence after its total recovery pending stood at over R1,100 crore and non-performing assets had touched 99.9% of total deposits.

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Roposo bags $5 million from Bertelsmann India Investments

NEW DELHI: Relevant E-solutions, which owns and operates fashion discovery app Roposo, has bagged $5 million (about Rs 33 crore) from from Bertelsmann India Investments (BII), the strategic investment arm of German media conglomerate Bertelsmann SE.

The latest round is part of the Gurgaon-based startup's $15 million (about Rs 100 crore) Series B round, which was first reported in August last year, and confirmed by the company, and has been led by its existing backer, Tiger Global Management, which has pumped in $10 million this time around.

While the terms of the investment were not disclosed, Roposo, which also counts early-stage venture capital firm India Quotient as an investor, has raised about $21 million (about Rs 140 crore) in external funding till date.

"While Tiger Global had committed to invest the entire $15 million, we wanted to bring in a new investor that would share the same philosophy as us, and support our growth, and had set aside about $5 million accordingly. We are fortunate to have Bertelsmann on board as a partner," said Avinash Saxena, co-founder of Roposo.

Seeded by Flipkart Co-founder and Chief Executive Binny Bansal, the less-than two year-old startup was founded by IIT Delhi alumnus, Saxena, Mayank Bhangadia and Kaushal Shubhank in 2014. Last year, Tiger Global had led a $5 million Series A round in the company.

The founders also confirmed that Bansal has exited his position in the company last year, as had another early investor in the venture, 5ideas Startup Superfuel.

"We see tremendous promise in Roposo as a social network and as a business model. With an extremely strong founding team, it has managed to capture immense mindshare in India within a fairly short span since inception. With leaders such as multi-channel network StyleHaul in the US and social network Mogujie in China in the Bertelsmann family, we are excited to now work with Roposo to make it the leading fashion destination in India," said Pankaj Makkar, managing director, BII.

The startup will use the proceeds from the round towards strengthening its technology, expanding its team, bolstering the product and enhancing the Roposo community.

"The company is growing at a tremendous pace. We are building a world-class product team, and expect to make some really interesting hiring-related announcements over the course of the year," Saxena said.

Roposo, which claims to have 2.5 million installations of its app till date, is targeting having 7-8 million active users on its platform by the end of the current fiscal.

While fashion and lifestyle are the dominant categories, the startup, which competes with the likes of Wooplr, WithMe and Styledotme, is evaluating entering newer ones, such as food, travel and home furnishings, amongst others.

"Altogether, we're doing about 250,000 posts a month. There is a tremendous amount of engagement taking place, and our central philosophy has always been about connecting users," said Saxena.

Repost's revenue model is centred around its affiliate channels, through its partnership with over 400 websites, including most major ecommerce ventures. It also has advertising and video channels.

"We are experimenting with various channels... The monetisation strategy will shape up by the end of 2016," Saxena said.

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TranServ Gets $15 Million In Series C From Micromax, IDFC To Enhance Current Offerings, Build New Micro Credit Product

More finance for finance tech startups today. TranServ, the digital payments startup, possessing its own digital wallet as well, has raised close to $15 Million in a Series C round, led Micromax Informatics and IDFC Asset Management Co., along with the participation of Nirvana and Faering Capital India Evolving Fund.


While Micromax Informatics and IDFC Asset Management Co. are the new investors, Nirvana Ventures and Faering Capital India Evolving Fund are existing ones. IDFC has invested in the company through its VC fund called IDFC SPICE.

The newly raised capital will help the company to launch new products including micro credit, which the company is currently working on. It is also planning to hire more people and enhance its technology around payments.

The company is currently in talks with banks and non-banking financial institutions to kickstart its micro-credit business. It is also exploring growth opportunities through both organic and inorganic routes.

The company’s founder, Anish Williams says that the company may not need to raise another round of funding considering its current growth rate. He also says that they aim to make company fully profitable within next one or one and a half year.

We are looking to add new products such as micro credit and micro investments, besides other offerings. A lot of focus will be given to push Udio to make transactions seamless.
said Anish Williams, co-founder & CEO, TranServ

He further revealed that the promoters, including Amar Habibullah, Aditya Gupta, Sandeep Ghule and himself, are the largest shareholders, although they hold less than 51% equity in the company.
Earlier this year, the company had launched Udio – a digital wallet with a social angle. The wallet is more of a social experience that seeks to address some of the issues that cause the gap between real and virtual modes of payment.

Udio Wallet is designed to bring a social and community-driven aspect of payments to the fore while also ensuring an anytime, anywhere accessibility to digital P2P transactions via its very own, secure payment systems. Last year, it partnered with India’s largest smartphone company – Micromax to equip all future Micromax devices with its service.

The Mumbai-based startup was founded by Anish Williams, Aditya Gupta and Sandeep Ghule around five years ago. Transerv is an electronic payments and prepaid payments solutions software platform that seeks to serve a variety of organisations and people through ease and safety in payment processing.

Till now, the company was executing projects in government grant disbursements besides insurance and dairy payments. Its flagship brand is Shmart!Pay and it works with lenders like Bank of India, Kotak Mahindra Bank, Axis Bank along with RuPay and Visa to execute such projects.

In this segment, one of the direct competitor for TranServ is ItzCash while in the digital wallet space, it is competing against PayTM, FreeCharge, Oxigen, MobiKwik, etc.

Supreme Court asks finmin to reveal mechanism to recover NPAs of PSBs

The Supreme Court on Tuesday asked the finance ministry to inform it about the mechanism in place and steps being taken to recover huge non-performing assets (NPAs) of the nationalised banks.

he Supreme Court on Tuesday asked the finance ministry to inform it about the mechanism in place and steps being taken to recover huge non-performing assets (NPAs) of the nationalised banks. The apex court also asked the government to form an expert panel to look into the issue.
A bench headed by Chief Justice T S Thakur, while seeking response from the RBI and the Indian Banks Association on various issues framed in this regard, said the current system is not working to safeguard the interests of the banks. It said “if your (government) system was perfect, you could not have such huge NPAs”.

“Something is missing (in the current system). Something is not working. Don’t take this as adverse remark. But steps are needed to prevent such huge write-offs. We are looking at suggestions to reform the system and prevent the huge write-offs… Please tell us what is the current institutional mechanism to check it…And what reforms you are intending to bring in,” the bench asked Solicitor General Ranjit Kumar, who informed the court that some “amendments are in the offing. And the Bankruptcy Code is likely to come into effect soon”.
Kumar also told the apex court that the government is already working to contain the bad loan situation and has various mechanisms like the proceedings before the Debt Recovery Tribunals/the Sarfaesi Act to recover the bad debts.

The CJI also told the bank to propose a committee which can look into all these issues. “We are not financial experts and cannot look into the safeguard issues, but the government should be in a position to evolve safeguards to prevent NPAs. If you propose a committee which can go into all these issues, we will be okay with it,” he observed.
Counsel Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), told the judges that there is severe discrepancy with respect to the information on loan write-offs provided by individual banks and the RBI.
Bhushan cited the RBI data that showed Punjab National Bank writing off over `8,500 crore in the last two years, while PNB has denied writing off any loan during this period. Similarly, while the Bank of India claimed that the bank wrote off more than `17,700 crore loans in the last two years, the RBI figure stood at `2,567 crore.

The counsel also filed a two-page note and formulated around 11 issues to be looked into by the court. The issues included — whether the RBI can refuse to disclose information about defaulted loans, suits filed for recovery of loans, restructured loans, debts written off, willful defaulters, one-time-settlement, sales of assets of companies to Asset Reconstruction Companies etc, what mechanisms are required to ensure that banks obtain adequate security for the loans that they give to the companies/corporates and whether the personal guarantees of the promoters should be required to be taken in loans given to the corporates.
The SC had earlier critisised the banks for failing to go after big defaulters and instead driving farmers to sell their small tracts of land and committing suicide for failure to return small outstanding loans.

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Patanjali Revenue May Touch Rs 10,000 Cr

NEW DELHI: Patanjali Ayurved, promoted by yoga instructor and promoter Ramdev aims to record a turnover of Rs 10,000 crore during the financial year 2016-17, and  will invest over Rs 1,150 crore  to set up six processing units and one R&D centre.

The domestic FMCG firm also challenged the multinational firms like Unilever, Nestle, P&G and Hindustan Unilever the established players in fast moving consumer goods (FMCG) segment in India. The company is confident that its network
of over 4,000 distributors, 10,000 stores and 100 Patanjali mega marts pan India, will help achieve its target.

The company’s ambitious plan includes distributing its products globally in the international market. “Patanjali is an International brand,” Ramdev who promoted Patanjali told reporters on Tuesday.  Patanjali will also enter new categories like dairy, animal feed and khadi garments for yoga. “We will enter dairy segment this year with the launch of milk, cheese, butter milk and paneer.”

When asked about the source of funds, he said: “Banks are more than willing to give loans to us. We have no shortage of funds to expand. We are a debt-free company.”

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HDFC Bank is the Glenn McGrath of Indian banking

HDFC Bank’s balance sheet has crossed Rs7 trillion, narrowing the gap with ICICI Bank

Just like former Australian bowler Glenn McGrath used to land ball after ball in the same spot outside the off stump, HDFC Bank Ltd has unerringly posted another quarter of 20% net profit growth. If there was any mild excitement around its March quarter earnings, it was the utilization of around Rs.300 crore of floating provisions towards two accounts.

Half of this provision was on account of a central bank directive to all lenders to set aside 7.5% of their exposure to the Punjab state government, which is battling a foodgrain scam. It has to make a similar provision in the first quarter of this financial year. That said, at the end of the day, as the lender’s management clarified in a conference call, this loan has been made directly to the state government and would be classified as sovereign debt.

There was no untoward effect on HDFC Bank’s credit costs either. Annualized credit costs came in at 47 basis points in the March quarter, a decline from both a year ago and the previous quarter’s number. One basis point is one-hundredth of a percentage point. The bank maintained its asset quality performance with gross non-performing loans remaining under 1% of its advances.

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Other performance yardsticks hit the mark as well. Return on assets was 1.9% and cost-to-income ratio under 45%. The bank’s net interest margin was 4.3%; the management said the move to the new marginal cost of funds-based lending rate was unlikely to affect margins much. It reiterated its usual guidance of 4-4.4% margin for the current quarter as well.

With this set of numbers repeated quarterly, the trigger for stock performance is balance sheet growth. HDFC Bank’s balance sheet has crossed Rs.7 trillion, narrowing the gap with ICICI Bank. In the March quarter, loans grew 27%, about two-and-a-half times industry growth and especially creditable for a loan book of this size. Retail loans—driven by personal loans and home loans—grew by 30%. Deposits also grew faster than the industry at 21%.

While HDFC Bank shares trade at 3.3 times their expected book value for this financial year—among the most expensive in the world—it is its ability to disregard the operating environment that allows the stock to outperform the benchmark Bankex.

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