India Ratings & Research (Ind-Ra) has re-affirmed the rating/outlook of bank’s debt instruments (Basel-III Tier-2 Bonds, Infrastructure Bonds and Non-Convertible Debt Instruments) amounting to Rs 29,148 crore at ‘IND AA+/Stable’, the lender said in a stock exchange filing.

Further, Ind-Ra has also assigned ‘IND AA+’ with stable outlook to Basel III Tier 2 Bonds amounting to Rs 3,000 crore Key Rating Drivers Sizeable Retail Franchise with Diversified Product Lines: IDFCFB’s retail and commercial finance book accounted for 80.1% of the total funded exposure in 2QFY24 (2QFY23: 75.4%). The bank intends to continue focusing on diversifying its overall loan portfolio with focus on retail and SME loans, thereby increasing loan granularity. This increased retailisation would help maintain the margins, thereby reducing the impact of higher-than-peer funding cost and helping the bank absorb its above-average operating cost. IDFCFB’s net interest margin marginally improved to 6.3% in 2QFY24 (FY23: 6.05%), driven by a moderation in the cost of funds and continued retailisation of the loan book. However, sustaining margins at current levels would be monitorable as the recent Reserve Bank of India directive on unsecured lending could curtail loan growth for the impacted segments such as consumer loans, credit cards and other retail loans which constituted 23% of the overall loan book as of 2QFY24.

Retail Liabilities and Repricing of Legacy Borrowing to Reduce Funding Cost: IDFCFB’s top 20 deposit-to-total deposits moderated to 10.9% in 2QFY24 (FY23: 12.56%; FY22: 16.06%), thereby improving its granularity, in line with its peers. In line with the industry, the CASA ratio marginally moderated to 46.4% in 2QFY24 (FY23: 49.8%). In 2QFY24, IDFCFB’s current account saving account (CASA) deposits accounted for 35.4% (FY23: 35.7%; FY22: 32.3%) of the total liabilities (deposits + borrowing). While the bank’s cost of funds has moderated from the historical levels, its borrowing cost is likely to remain higher than that of its peers in the medium term, due to its historically high- cost fixed rate borrowings which has been moving down and is being replaced with retail deposits. However, any reduction in the funding cost would be absorbed incrementally, as the bank builds up a higher proportion of secured book thereby marginally benefiting overall margins. With the growth in its retail deposit base, IDFCFB has been able to reduce its high-cost borrowings (2QFY23: INR150.0 billion; FY23: INR176.7 billion.

The post Ind-Ra affirms IDFC First Bank’s debt instruments ratings with stable outlook Further, Ind-Ra has also assigned ‘IND AA+’ with stable outlook to Basel III Tier 2 Bonds amounting to Rs 3,000 crore appeared first on newsmantra.in l Latest news on Politics, World, Bollywood, Sports, Delhi, Jammu & Kashmir, Trending news | News Mantra.

Ms. Sitharaman has asked an official committee that includes the Banking Secretary and Department of Economic Affairs Secretary in the Finance Ministry, as well as a Reserve Bank of India Deputy Governor, to check the legal framework governing co-operative banks .

All options, including a fresh look at the Financial Resolution and Deposit Insurance (FRDI) Bill, are under consideration, the Minister said.

While addressing a press conference in Mumbai Ms. Sitharaman also saw protesting PMC depositors at the BJP’s State headquarters and met them 

She had assured them that she will have a fresh word with the RBI Governor to try to hasten the lifting of withdrawal restrictions of ₹25,000 currently applicable. While the RBI regulates multi-State rural co-operative banks and urban co-operative banks, their registration is governed by the Rural Development and Urban Development Ministries, the Minister said .

“Therefore, in such instances, where there is some malpractice and the boards get bypassed, the Reserve Bank takes care of placing a resolution professional that takes care of the matter. I also told the affected PMC customers this doesn’t mean that the Government of India is doing nothing about it,” Ms. Sitharaman said

 “I have asked the Secretaries in Ministry’s for banking and economic affairs to work with the Ministries of Rural and Urban Development to study in detail what is happening in multi-State co-operatives that also run banks. The RBI will also be represented of course, to understand where there were shortcomings and, if necessary, look at the ways in which the respective Acts can be amended,” Ms. Sitharaman said.

“If the amendments are going to help us curb malpractices, with better regulation and empowerment of the regulator, then we would like to do that. Necessary legislative steps will be taken to prevent such things from happening again in future and allow the regulator even better, if there are shortcomings,” the minister stressed, adding that the government will work to bring in necessary changes in the forthcoming Winter session of Parliament.

The post NEW LAW FOR COOPERATIVE BANKS appeared first on newsmantra.in l Latest news on Politics, World, Bollywood, Sports, Delhi, Jammu & Kashmir, Trending news | News Mantra.