RBI slaps penalties on Axis Bank, UCO Bank and Syndicate Bank for violation of norms

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RBI slaps penalties on Axis Bank, UCO Bank and Syndicate Bank for violation of norms

The Reserve Bank of India (RBI) on Tuesday said it has imposed a total penalty of Rs 2.2 crore on private sector lender Axis Bank in two separate cases. A penalty of Rs 2 crore has also been imposed on UCO Bank and Rs 1 crore on Syndicate Bank for violation of norms.

The RBI said penalty of Rs 2 crore has been imposed each on Axis Bank and UCO Bank for non-compliance of norms related to payment through cheques.

In another case, a penalty of Rs 20 lakh has been imposed on Axis Bank for contravention of the directions related to detection and impounding of counterfeit notes.

The penalty on Syndicate Bank has been imposed for violation of guidelines related to checking fraud and managing risk.

The RBI, however, said the action on banks is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

RBI may change stance to ‘Neutral’ at first policy meet in 2019

Reserve Bank of India Governor Shaktikanta Das-led Monetary Policy Committee may refrain from easing interest rates on concerns on India’s fiscal deficit but will likely change its policy stance from ‘calibrated tightening’ to ‘neutral’ as inflation continues to remain below its medium-term target of 4%.

The central bank is likely to hold the repo rate at 6.5% as the government, in its interim budget 2019, revised the FY2019 fiscal deficit target to 3.4% as compared to the budget estimate of 3.3%. The Centre also plans to maintain 3.4% fiscal deficit target for FY2020, is higher than 3.1% recommended by The Fiscal Responsibility and Budget Management (FRBM) Act, 2003.

A substantial increase in market borrowing on account of the sops offered to farmers and the tax rebate offered may pose fiscal challenges, which are inflationary and may restrict the Indian central bank from cutting the repo rate.

However, a section of the market expects the central bank to cut rates this week as inflation remains well below the central bank’s medium term target.

Persistently lower food inflation that pushed the December CPI to 18-month low of 2.19% will provide respite to the RBI and give room for change in policy stance. The RBI Monetary Policy Committee (MPC) is expected to conclude its Sixth Bi-monthly monetary policy meeting and deliver its decision at 11.45AM on February 7, 2019.

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Know why Reliance Communications shares have dropped 50% – 4th Feb 2019

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RCom shares declined by 48% on Monday 4th Feb as it approches NCLT

  • Reliance Communication declined by 48% to Rs. 6, after the telco sought debt resolution plan through the National Company Law Tribunal (NCLT).
  • At 10.44 am, RCom was trading at Rs. 7, fell by 39.66%, with a volume of 196.80 lakh shares on the BSE.

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Know why Reliance Communications shares have Dropped 50% – 4th Feb 2019

Shares of Reliance Communications, the debt laden telecom operator led by Anil Ambani plunged 50% in the morning trades on February 4, 2019 after it informed exchanges that it will file for bankruptcy and propose debt resolution under National Company Law Tribunal (NCLT) through sale of assets.

Following are details from its filling to exchanges on February 01, 2019.

  • The company has been faced various issues raised by the Department of Telecommunications.
  • The company said the management will propose a resolution plan to NCLT that is similar to the one being sought out outside court. The plan involves sale of assets to repay lenders.
  • RCOM is seeking to sell all of its infrastructure assets and spectrum along with a 30 million sq ft development at Dhirubhai Ambani Knowledge City complex among other real estate assets.
  • The company has been faced with various mostly, untenable issues raised by the Department of Telecommunications.
  • Further, challenges raised by unreasonable minority lenders can be now be overcome through the NCLT’s 66% majority rule, against the 100% approvals rule outside NCLT.
  • The RCOM Board expects to service all of its debt under the NCLT in 2019 itself.

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State Bank of India FY2019-Q3 net profit at Rs.3,955 crore – 1st Feb 2019

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SBI swings to profit, posts Q3 net of Rs 3,955 crore as provisions plunge YoY

  • Net profit at Rs. 3,955 crore versus net loss of Rs. 2,416 crore.
  • Net Interest Income up 21% to Rs. 22,691 crore.
  • GNPA at 8.71% versus 9.95% (QoQ)
  • NNPA at 3.95% versusl 4.84% (QoQ)

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ET Now: State Bank of India – FY Q3 2019 results February 1, 2019

State Bank of IndiaNSE -3.15 % on Friday reported a profit of Rs 3,954.81 crore for the quarter ended December 31 against a loss of Rs 2,416.34 crore in the corresponding quarter last year.

Analysts in an ET Now poll had projected a profit of Rs 3,200 crore.

Provisions and contingencies declined sharply 68 per cent YoY to Rs 6,006.22 crore during the quarter under review. The figure stood at Rs 18,876.21 crore in the same period last year and Rs 12,092.17 crore in the sequential quarter ended September 30.

Shares of the lender closed 3.09 per cent down at Rs 284.30 after the announcement of quarterly numbers.

Net interest income (NII) increased 19.28 per cent YoY to Rs 22,290.99 crore in Q3FY19 over Rs 18,687.52 crore in Q3FY18.

Asset quality of the lender improved during the quarter with percentage of gross non-performing assets coming in at 8.71 per cent against 9.95 per cent sequentially. The figures stood at 10.35 per cent in the corresponding quarter last year.

Percentage of net non-performing assets eased to 3.95 per cent over 4.84 per cent on a QoQ basis.

Fresh slippages came in at Rs 4,532 crore in Q3FY19.

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Indiabulls Housing Finance FY2019-Q3 net profit falls by 14% yoy – 31st Jan 2019

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Indiabulls Housing Finance FY2019-Q3 net profit falls by 14% yoy – 31st Jan 2019

  • Net profit fell by 14% y-o-y to Rs. 985 crore from Rs 1,142 crore.
  • Revenue up by 24% y-o-y to Rs. 4,237 crore from Rs. 3,420 crore.
  • Board approved issuing non-convertible debentures of up to Rs. 26,000 crore and approved issuing rupee overseas bonds.

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Indiabulls Housing Finance Ltd – Board to consider Q3 results & Interim Dividend on January 31, 2019

Indiabulls Housing Finance Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on January 31, 2019, inter alia, to consider and approve the (a) unaudited financial results of the Company for the quarter and nine months ended December 31, 2018; (b) declaration of interim dividend, if any, on the Equity shares of the Company, for the financial year 2018-19; and (c) fund raising by way of issue of secured and/or unsecured Indian rupee denominated and/or foreign currency denominated bonds, in one or more tranches.

Further, in terms of SEBI (Prohibition of Insider Trading) Regulations, and Code of Conduct for Prevention of Insider Trading of the Company, the Trading Window for dealing in securities of the Company has been closed, and shall remain closed till February 02, 2019.

Pdf Link: Indiabulls Housing Finance Ltd – Board to consider Q3 results & Interim Dividend on January 31, 2019

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ICICI Bank Q3 net profit slips by 2.7% y-o-y to Rs.1605cr – 31 Jan 2019

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ICICI Bank reported Q3 results for the quarter ended December 31, 2018

  • Net interest income up by 20.5% to Rs. 6,875.2 crore
  • Net profit down by 2.75% to Rs. 1,604.9 crore
  • Provisions at Rs. 4,244.2 crore versus Rs. 3,569.2 crore
  • GNPA at 7.75% versus 8.54% (QoQ)
  • NNPA at 2.58% versus 3.65% (QoQ)

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ICICI Bank’s NII for Q3FY19 came at Rs6,875cr as against Rs5,705cr, which is up by 20.5% yoy. The bank has reported a net profit of Rs1,605cr in Q3FY19, (though the net profit is below consensus estimates by 11%, considering other parameters like asset quality and NII growth, the results are better), as against Rs1,650cr yoy. The overall NIM for the quarter came at 3.4%. Its GNPA for Q3FY19 came at 7.8% against 8.54% qoq, which has decreased by 79bps. NNPA for the quarter came at 2.58% against 3.65% qoq, which has declined by 107bps.

  • Margins expanded 26bps yoy and 7bps qoq; however, 15-18bps was only on account of income reversal in an overseas NPA account. Adjusted for this, margins declined sequentially driven by lower LDR and lower CASA ratio.
  • Core operating profit grew by 14% yoy to Rs5,667cr for the quarter.
  • Fee income grew by 16% yoy from Rs2,639cr in Q3FY18 to Rs3,062cr. Retail fee constituted 73% of total fees.
  • Total advances increased by 12% yoy to Rs5.64 lakh cr in the quarter.
  • Domestic loan growth came at 14% yoy as of December 31, 2018 driven by retail loans.
  • Retail loans grew by 22% yoy and constituted 59% of the loan portfolio as at December 31, 2018.
  • Provisions were Rs4,244cr in Q3FY19 compared to Rs3,570cr in Q3 FY18. Provisions increased 19% yoy, but would have included a write back on provisions for investment depreciation in the quarter, implying much higher growth in loan loss provisions.
  • CASA ratio stood at 49.3% as at December 31, 2018
  • Asset quality improved substantially. Slippage ratio dropped to 1.7% in 3QFY19 (continuing the downward trend from 1QFY19). Slippages stood at Rs2,090cr (lowest in 14 quarters), with Rs950cr coming from the BB & below pool.
  • Reduction in NPLs was aided by a sale of Rs2150cr to an ARC in the quarter (100% cash basis). Total stressed assets stood at ~Rs79,700cr (13.1% of loans). PCR was significantly strengthened on a sequential basis.

IIFL Technical View:

ICICI Bank Ltd ended at Rs. 365.25, up by 18.35 points or 5.29% from its previous closing of Rs. 346.90 on the BSE.
The scrip opened at Rs. 351 and touched a high and low of Rs. 368.05 and Rs. 351 respectively. A total of 4,27,49,626 (NSE+BSE) shares were traded on the counter. The stock traded below its 50 DMA.

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