Page 41 - Banking Finance July 2025

ARTICLE

How Former Bankers Have Contributed ers. A retired general manager of a public sector bank with
20+ years of experience in facilitating debt funding for SMEs
Take the case of a metal alloys trader in Delhi NCR. The
resolved the company's credit score issues and helped in the
startup promoter's previous attempts to raise debt were
unsuccessful due to an unfavourable credit risk assessment takeover of an existing loan to another private bank with
and cash flow issues. A retired AGM from a public sector enhanced credit limit. His advisory also included improving
bank on BankersKlub's platform leveraged his expertise in the company's financial projections and cash flow manage-
credit and funding to clear the company's pending payment ment. These changes reflected positively on its credit pro-
file, enabling the company to meet its funding goals success-
of unsecured loans from various NBFCs. On his recommen-
fully.
dation, the promoter started implementing better internal
processes. He also assisted in the preparation of a financial
model with reasonable cash flow, which helped improve the Final Thoughts
company's CIBIL scores. As a result, the company found The demand for banking advisory services is set to grow as
success in consolidating its borrowings and its debt fund the MSME sector powers ahead. With deep knowledge of
proposal of INR 5 crore. internal and external rating processes and regulatory un-
derstanding, retired bankers can take the lead in bridging
A startup in the real estate and co-working space market in the country's MSME credit gap. Aiding in that endeavour is
north India was struggling to raise INR 3 crore for its ex- a one-stop platform that reimagines traditional advisory
pansion. A low CIBIL score and the nature of its business, models into a digitally integrated approach that streamlines
which is considered high-risk, were primary funding barri- access to products, services and capital.

RBI Raises Agency Commission Rates for Government

Transactions

The Reserve Bank of India (RBI) has revised the agency commission structure for banks handling government-related
transactions, effective April 1, 2025. To incentivise efficiency, the commission for electronic revenue receipt and
payment transactions has been increased from Rs. 9 to Rs. 12 per transaction.
However, for physical transactions, the rate remains unchanged at Rs. 40. Pension payment commissions for Central
and State Governments have also been raised to Rs. 80 from Rs. 75 per transaction. For non-pension-related dis-
bursements, the commission has been hiked to 7 paise per Rs. 100 turnover from 6.5 paise.
The RBI clarified that agency commission would not apply to transactions that are pre-funded or where separate
compensation arrangements exist with the government. The move is likely aimed at improving the efficiency and
accuracy of government transactions managed by agency banks, which play a crucial role in delivering public finan-
cial services across the country.

Mumbai Homes Unaffordable Even for Richest 5%,

Shows Report

A joint report by the National Housing Bank (NHB) and the National Sample Survey Office (NSSO) has revealed that
homes in Mumbai are so expensive that even the richest 5% would need to save for 109 years to buy one.
According to NHB's Residential Property Price Index (RPPI), a standard 110 sq. metre house in Mumbai costs around
Rs 3.54 crore, while the top 5% of earners have an annual income of Rs 10.7 lakh. Assuming a 30.7% savings rate,
it would take over a century to afford a home. Gurugram follows, requiring 64 years of savings for a Rs 2.26 crore
home.
Chandigarh is comparatively better, needing 15 years to buy a Rs 78 lakh property on Rs 17.4 lakh in yearly savings.
The findings highlight deepening urban housing unaffordability, even for high-income households in India's top cities.

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