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SBI cuts cost of lending rate by 0.9% across maturities

SBI’s decision to reduce its benchmark lending rate by 0.9 per cent will also trigger cuts across other banks.

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SBI

Mumbai, Jan 1 : A day after PM Modi asked banks to priorities lending towards poor and lower middle class, country’s largest lender SBI cut benchmark interest rate across various maturities by 0.9 per cent, effective from January 1.

The country’s largest lender cut its marginal cost of funds-based lending rates (MCLR) effective from New Year’s Day in response to a surge in deposits post the demonetisation of high value currency on November 8.

For loans of overnight tenure, the new MCLR will be 7.75 per cent, instead of 8.65 per cent. One-month tenure will attract a rate of 7.85 per cent, while those for three and six months will be 7.90 and 7.95 per cent, respectively.A

For one year, the new MCLR will be 8 per cent. The bank will levy interest rate of 8.10 per cent and 8.15 per cent for two years and three years, respectively.

Lending rates were lowered also across other maturities, effective from Sunday.

According to estimates, banks have collected cash deposits of over Rs 14.9 lakh crore following Prime Minister Narendra Modi’s November 8 announcement, demonetising Rs 1,000 and Rs 500 notes to eliminate black money, counterfeit notes and terror financing.A

The SBI move also comes after Prime Minister Narendra Modi in his address to the nation on Saturday asked banks to “keep the poor, the lower middle class, and the middle class at the focus of their activities,” and to act with “public interest” in mind.

State-owned IDBI Bank has also cut in its MCLR by 30-60 basis points (bps) effective Sunday.

The bank said it has effectively reduced MCLR by 30 bps to 60 bps across various tenures since April 2016.

Similarly, state-run Punjab National Bank also slashed its lending rates across maturities ranging from overnight to five years with the new rates effective from Sunday.

For loans of overnight tenure, the new MCLR will be 8.20 per cent, instead of 8.90 per cent. One-month tenure will attract a revised rate of 8.25 per cent, while those for three and six months will be 8.35 percent and 8.40 per cent respectively.

The lender cut down lending rates for the tenure of one year, three years and five years loans to 8.45 percent, 8.60 percent and 8.75 percent respectively.

Under the MCLR, banks need to consider their marginal cost of funds, or the cost incurred on incremental deposits across different maturities, to decide on interest rates.

Private sector Axis Bank cut its MCLR in November by 0.15-0.20 per cent

Following the Reserve Bank of India (RBI) cutting its repo rate by 25 bps in October, public sector lenders — the United Bank of India, Canara Bank, Indian Bank, Indian Overseas Bank, Bank of India and the Syndicate Bank — as well as the private sector ICICI and Kotak Mahindra banks have cut lending rates.

To nudge banks to transfer the benefit of RBI rate cuts, previous Governor Raghuram Rajan had announced a shift to the MCLR regime, under which banks need to consider their marginal cost of funds, or the cost incurred on incremental deposits across different maturities, to decide on interest rates.

However, though Rajan — during his tenure — had cut rates by 150 bps since January 2015, banks had hardly moved at the same pace to cut their lending rates.

From the state-run banks’ point of view, their accumulation of massive non-performing assets (NPAs), or bad loans, that is impacting profitability, is keeping them from cutting rates.

Business

Key Indian equity indices open flat

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Mumbai, April 20: The key Indian equity indices opened on a flat note on Friday.

At 9.17 a.m., the wider Nifty50 of the National Stock Exchange (NSE) traded at 10,558.15 points, down 7.15 points or 0.07 per cent from the previous close at 10,565.30 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 34,434.14 points, traded at 34,414.73 points (9.17 a.m.) — down 12.56 points or 0.04 per cent — from its previous close at 34,427.29 points on Thursday.

The BSE market breadth so far was bearish with 710 declines and 507 advances.

IANS

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Key equity markets rise on Asian cues, supportive metal, IT stocks

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Mumbai, April 19:  The key Indian equity markets traded in the positive territory on Thursday afternoon tracking strong cues from the Asian markets.

Heavy buying in the metal, IT and capital goods stocks also helped the market sentiment to remain positive.

So far, the S&P BSE metal index surged around 558.59 points, followed by the IT stocks which edged up by 125.58 points and capital goods stocks, by 120.60 points.

At 1.20 p.m., the wider Nifty50 on the National Stock Exchange (NSE) traded higher by 33.40 points or 0.32 per cent at 10,559.60 points.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 34,403.67 points, traded at 34,412.41 points (1.20 p.m.) — up 80.73 points or 0.24 per cent from its previous session’s close.

The Sensex has so far touched a high of 34,478.82 points and a low of 34,358.91 during the intra-day trade.

The BSE market breadth was bullish with 1,265 advances and 1,082 declines.

“Markets gained in early morning trade as global Asian indices traded in green, following the US markets which closed with one per cent up-move,” said Dhruv Desai, Director and Chief Operating Officer of Tradebulls.

On Wednesday, profit booking, along with heavy selling pressure in the banking sector stock, led the key Indian equity indices to break their nine-day gaining streak and end in red.

The Nifty50 fell by 22.50 points or 0.21 per cent to close at 10,526.20 points on Wednesday, and the Sensex closed at 34,331.68 points — down 63.38 points or 0.18 per cent.

On Thursday, the major gainers on the BSE were Tata Steel, Yes Bank, Bharti Airtel, Tata Consultancy Services and ONGC while Axis Bank, HDFC, Sun Pharma, Coal India and ICICI Bank were among the top losers.

On NSE, the top gainers were Hindalco, Vedanta and Tata Steel and major losers were BPCL, Hindustan Petroleum and Indian Oil Corp.

IANS

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CBI arrests 3 company directors in Rs 2,654 cr bank fraud case

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CBI

New Delhi/Ahmedabad, April 18: The CBI has arrested three promoter-directors of a Vadodara-based company in connection with its ongoing investigation into a case of Rs 2,654.40 crore fraud committed on a consortium of banks, officials said on Wednesday.

A Central Bureau of Investigation (CBI) official told IANS: “The agency has arrested the promoter-directors of the Diamond Power Infrastructure Ltd (DIPL) Suresh Narain Bhatnagar, his two sons Amit Suresh Bhatnagar and Sumit Suresh Bhatnagar.”

The CBI located the accused in Udaipur in Rajasthan on Tuesday evening with the assistance of Gujarat Police and arrested them on Wednesday morning.

The official said they would be produced before the Special Judge of CBI Cases in Ahmedabad.

On March 26, the CBI filed a case against DPIL and its directors for defrauding the consortium of 11 banks of Rs 2,654.40 crore. The loan availed by them was declared a non-performing asset (NPA) in 2016-17.

Since the filing of case, the agency has carried out searches at the corporate office, two factory premises and the residences of the directors of the firm.

According to the CBI FIR, the DPIL, which is engaged in the production of cables and other electrical equipment, fraudulently availed credit facilities since 2008, leaving behind a total outstanding debit of Rs 2,654.40 crore as of June 29, 2016.

The agency said that the company managed to get term loans and credit facilities thought it figured in the Reserve Bank of India’s list of defaulters and the caution list of Export Credit Guarantee Corp of India (ECGCI) at the time of initial sanction of credit limits by the consortium.

At the time of consortium’s formation in 2008, Axis Bank was the lead bank for the term loan and the Bank of India was the lead bank for cash credit (CC) limits.

The Bank of India, which tops the list with Rs 670.51 crore of loans, is followed by Bank of Baroda (Rs 348.99 crore), ICICI Bank (Rs 279.46 crore), State Bank of India (Rs 266.37 crore), Axis Bank (Rs 255.32 crore), Allahabad Bank (Rs 227.96), Dena Bank (Rs 177.19 crore), Corporation Bank (109.12 crore), Exim Bank of India (Rs 81.92 crore), IOB (Rs 71.59) and the IFCI Bank (58.53 crore).

The company, allegedly with the support of officials from various banks, managed to obtain enhancement in credit facilities.

The FIR said the DPIL, through its founder and directors associated in the criminal conspiracy with the unidentified bank officials of various banks, cheated those banks by way of misappropriating public funds through falsification of accounts, creation of false documents, forgery of records and knowingly using such records as genuine.

IANS

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