Page 5 - Banking Finance August 2021

BANK UPDATE

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Kotak Mahindra Bank en- since fund transfers and payment trans- "The onset of Covid-19 resulted in wind-
actions to any UPI ID can be done from fall gains for public banks with trading
ables mobile numbers- the safety of the Kotak mobile banking profits on their bond portfolios rising

based fund transfer app itself and customers need not sharply after the steep cut in policy
Kotak Mahindra Bank has introduced bother downloading multiple payment rates by the RBI in March 2020," the
a 'Pay Your Contact' feature on its apps on their phone." agency said in the report.
mobile banking app that allows cus- "Given the immense popularity of UPI The repo rate and the reverse repo
tomers to send money or make pay- in the Indian market, almost every In- rate were cumulatively cut by 115 ba-
ments to any of their contacts across dian with a bank account has a UPI ID. sis points (bps) and 155 bps, respec-
all payment apps simply by entering With 'Pay Your Contact', our customers tively, during March 2020 and May
the beneficiary's mobile number. can now transfer funds easily to any 2020 to 4 per cent and 3.35 per cent,
The transaction is possible with only UPI-linked bank account across pay- respectively, by May 2020.
the phone number without having to ment apps with just a mobile number In FY21, PSBs reported a net profit of
remember or obtain the bank account to identify their beneficiary," added Rs 32,848 crore as against loss of Rs
number or IFSC code or remember UPI Sharma. 38,907 crore in 2019-20, the agency's
IDs to send money or make payments. vice president (Financial Sector Rat-
All a customer needs to do is select a Windfall gains on bond ings) Anil Gupta said.
contact saved on one's mobile phone portfolios aided PSBs re- According to the agency's estimates,
or enter the mobile number of the public sector banks booked profits of Rs
beneficiary, select the UPI app or a port net profits in FY2021: 31,600 crore due to gains on bond
KMBL account linked to the Icra portfolio compared to overall profit
beneficiary's number and transfer before tax (PBT) of Rs 45,900 crore in
money. The 'Pay Your Contact' feature After five consecutive years of posting FY2021, the report said.
is interoperable across all payment losses, (PSBs) reported net profits in
apps and is available on both Android the fiscal 2020-21, supported by wind- It said with a year-on-year (YoY) de-
and iOS. fall gains on their bond portfolio, rat- posit growth of 11.4 per cent and
ing agency said in a report. muted credit growth of 5.5 per cent in
Deepak Sharma, President and Chief
Digital Officer, Kotak Mahindra Bank Apart from trading gains, the return to FY2021, the liquidity in the banking
system remained abundant at Rs 5-7
said, "Kotak customers can now make profitability was supported by lower lakh crore in FY2021.
their payments to a friend, household credit provisions on their legacy non-
help, neighborhood shop etc just by performing assets (NPAs), after the high With the rate cuts and abundant liquid-
knowing the beneficiary's mobile num- provisions made during the last few ity, the daily average for the bench-
ber. Further, it also enhances security years, it said. mark 10-year government securities

BANKING FINANCE | AUGUST | 2021 | 5