Rs. 75000 cr disbursed under Mudra scheme till Dec: Mudra Bank CEO

Disbursements to the tune of Rs 75,000 crore has been made under the Pradhan Mantri MUDRA Yojana till December last year; out of a total target of Rs 122,000 crore, Jiji Mammen, CEO, MUDRA Bank, said.

The Micro Units Developments Refinance Agency (MUDRA) scheme that looks at refinancing loans up to Rs 10 lakh was launched in April 2015.

According to Mammen, disbursal has been made to around 1.73 crore beneficiaries; of which, 50 per cent are new units; while the remaining half has been for expansion towards existing ones.

“Against a target of Rs 122,000 crore for this fiscal, we have disbursed Rs 75,000 crore in the first nine months of the year,” he told reporters on the sidelines of the Eastern India Microfinance Summit 2016.

Loans under the scheme have been bracketed in three categories: Shishu loans are up to Rs 50,000; Kishor loans are between Rs 50,001 and Rs 5 lakh; and Tarun loans of Rs 5-10 lakh. Sishu loans are for small businesses, while Kishor and Tarun ones are for larger ones.

Refinance

Till December, the agency has refinanced around Rs 1,500 crore from its corpus of Rs 20,000 crore.

Of this around Rs 800 crore has been for the banks, that include mostly public sector entities like Bank of Maharashtra, Indian Overseas Bank and the State Bank of Travancore, Mammen said. The remaining amount includes microfinance institutions.

To make the MUDRA scheme more attractive, the Centre has also cleared the setting up of a Rs 3,000 crore Credit Guarantee Fund for these loans. This will provide insurance against default on MUDRA loans to a maximum of 50 per cent.

IndusInd Bank reports 30% jump in net profit

Private sector lender IndusInd Bank Ltd on Tuesday said its net profit for the quarter ended 31 December 2015 jumped 30% on strong growth in its core operating income and other income.

Net profit for the quarter stood at Rs581.02 crore compared to Rs447.19 crore—an increase of 29.9%. A poll of 22 Bloomberg analysts had pegged net profit at Rs579.10 crore.

Net interest income, or the core income from lending businesses, rose 36.23% to Rs1,173.42 crore in the October to December quarter compared to Rs861.37 crore in the year-ago period. Other income, which includes earnings from fee-generating businesses, rose 29% to Rs839 crore from Rs649 crore in the year-ago quarter.

Asset quality at the bank remained largely steady although the bank increased provisions during the quarter.

Gross non performing assets (NPAs) at the end of the quarter were at 0.82% of total loans compared to 0.77% in the July-September quarter and 1.05% in the year-ago period.

Net NPAs stood at 0.33% compared to 0.31% in the quarter ended 30 September 2015 and 0.32% in the same period last year.

During the quarter the bank set aside Rs177 crore in the form of provisions compared to Rs158 crore in the previous quarter and Rs98 crore in the year-ago quarter. A number of banks have been setting aside additional provisions as a counter cyclical buffer.

Bank of Maharashtra to raise Rs 1000 cr via tier-II bonds

Public sector Bank of Maharashtra today said it will raise Rs 1,000 crore by issuing Basel-III compliant bonds on a private placement basis.

"Bank of Maharashtra has informed the BSE that the bank is proposing to raise Basel III compliant tier-II bonds amounting to Rs 1,000 crore by way of private/public placement," it said in a regulatory filing.

According to a Fitch Ratings report, Indian banks need USD 140 billion capital to ensure full compliance with the Basel-III norms by 2018-19. The Basel-III norms are aimed at bolstering banks resilience. Basel-III capital regulations are being implemented in India with effect from April 1, 2013 in a phased manner.

IDFC Bank buys 10 per cent stake in ASA International India for ₹ 8.5 crore

Newly launched private sector IDFC Bank has bought a 9.99 per cent stake in ASA International India Microfinance for about Rs 8.5 crore, the first investment by a lender in a microfinance institution.

ASA International India is a division of Dhaka-headquartered ASA, which operates in over 12 countries and plans to disburse $2.5 billion in loans among 6.6 million clients in 2015-16.

"We have taken a 10 per cent equity stake in the microfinance company called ASA that has footprint predominantly in the northeast," Rajiv Lall, managing director of IDFC Bank, told ET.

"ASA will give us access to their customers and that allows us to expand our lending operations. It also gives us the opportunity to open bank accounts for ASA's customers, so it's a win-win partnership. They need capital, we need customers - that's the essence of our transaction."

IDFC Bank will get a board seat in ASAI India and access to unbanked areas through its branches in the east and northeast. Ravi Shankar, head - Bharat Banking at IDFC Bank, will represent the bank on the ASAI India board.

ASAI India has 104 branches covering 22 districts in West Bengal, Assam, Tripura, Bihar and Uttar Pradesh. It had over 1.3 lakh borrowers at the end of December, a total loan portfolio of over Rs 60 crore and 400 employees, including 241 loan officers.

IDFC Bank, which started operations on October 1 with shareholders' funds of Rs 13,300 crore, intends to continue growing inorganically.

"We will continue to look at these kinds of investments. There are some partnerships that do not require an investment, so we will look at that as well," Lall said.

"We are partnering with many MFIs where we haven't invested but from whom we are buying portfolios on a regular basis and whom we are supporting with bank lending." An Indian bank's investment in another financial entity cannot exceed 10 per cent. By keeping its investment in ASAI India at less than 10 per cent, IDFC Bank can fund the MFI's loans, which will qualify as priority sector lending for the bank.

The Reserve Bank of India has mandated that banks must provide at least 40 per cent of their total loans to farmers, small businessmen, students, exporters and small-ticket home loan buyers.

Lall said that would be a tough challenge to meet in the near term. "It's unrealistic. For our size of balance sheet, we need Rs 20,000 crore of PSL, so where is that going to come from?" asked Lall. "I think it's safe to say that we will not be able to achieve that target by just doing organic lending just by ourselves. We will be relying on partners to help generate a lot these assets for us. We will be lending to institutions that are PSL eligible, we will be buying portfolios from institutions that have PSL assets and we will be doing our own lending directly to PSL-eligible customers."

Bandhan Bank, which started operations on August 23, has a strong presence in the eastern and northeastern regions. It has more than 600 branches in 24 states, with 240 of them in West Bengal.

IndusInd Bank ties up with online payment solution firm PayU India

IndusInd Bank has tied up with online payment solution firm, PayU India. This will help provide customers the full suite of consumer banking products online as well as payment innovations. The partnership is aimed at bridging the gap between conventional banking and new online payment systems.

"While the Indian consumers have accepted online payment systems and seamless modes of online payment like mobile wallet, with open arms, the trust they have in the Indian banking system remains unmatched. With this partnership, we are bringing the cutting edge online payments technology and a bouquet of conventional banking services," said Shailaz Nag, COO and Co-founder, PayU India.

"Through this tie-up, the bank's experience will be leveraged to tap and redefine the rapidly growing digital financial space for both retail and business customers," said Sumant Kathpalia, Head, Consumer Banking, IndusInd Bank.

The partners will make announcements about the new products and services in the next 4-6 months. The collaboration will help create co-branded digital consumer banking products that will revolutionise the way digital banking and payments have shaped up and is expected to attract new customers across demographies.