Page 7 - Banking Finance July 2022

BANK UPDATE

ment for the year ended March 2022, Abhishek Upadhyay, senior economist Expenditure in March, at Rs 1.07 tril-
upsetting the government's budget at ICICI Primary Dealership. lion, was up 24.5 per cent over Febru-
maths. ary, the data put out by the Reserve
The highest payout to the government Standard Chartered Bank Bank of India (RBI) showed.
is from the country's largest lender Further, more than 1.9 million credit
settles SEBI case
State Bank of India, which will pay a cards (on a net basis) were added in
Standard Chartered Bank (SCB) paid
dividend of Rs. 3,600 crore. Union Bank March -- the highest for a month in
Rs. 4.97 crore to settle a case with the
will pay Rs. 1,084 crore, followed by
Securities and Exchange Board of India FY22, taking the number to 73.6 mil-
Canara Bank at Rs. 742 crore and over
(Sebi) for alleged violation of regulatory lion at the end of the financial year.
Rs. 600 crore each by Indian Bank and
norms involving CG Power and Indus- So, in a year, 11.6 million credit cards
Bank of India.
trial Solutions Ltd.
were added (on a net basis). Month-
SCB had approached Sebi with a pro- on-month, credit card additions (on a
Excess liquidity in the
posal to resolve a matter involving al- net basis) increased by 31.7 per cent.
banking system back to leged Prohibition of Fraudulent and
Unfair Trade Practices (PFUTP) viola-
pre-Covid levels Banks to auction Great In-
tions, without admitting or denying the
India's banking system liquidity is likely
findings of fact and conclusions of law, dian Tamasha Co assets
to reach pre-pandemic levels by the
through a settlement order. IDBI Bank has put on sale properties
end of this financial year as the central
SEBI's High Powered Advisory Commit- of Great Indian Tamasha Company Ltd,
bank embarks on an aggressive liquid-
tee agreed to settle the matter upon which is the corporate guarantor of
ity withdrawal strategy to tame infla-
payment of Rs. 4.97 crore, which the Great Indian Nautanki Company, to
tionary pressures, bankers and econo-
bank did on 12 May. Following the or- recover defaulted loans, or non-per-
mists say.
der, Sebi said it will not initiate any forming assets (NPAs), worth over Rs
On May 4, the Reserve Bank of India enforcement action against the appli- 148 crore taken from IDBI Bank, HDFC
increased the rate at which it lends cant for the defaults. Bank and Bank of Baroda.
short-term funds to commercial banks
Sebi had in May 2021 issued a show- The immovable properties, which will
by 40 basis points to 4.4 percent and
cause notice to the bank for alleged be sold through an e-auction next
upped the Cash Reserve Ratio (CRR),
violations under PFUTP. SCB was al- month, are located in Karnataka's
the portion of deposits that banks
leged to have helped a private limited Kodagu district, according to a public
must hold in liquid cash, by 50 basis
business controlled by promoter group
points to 4.5 percent. One basis point notice issued by IDBI Bank. Great In-
firms at the expense of the publicly
is one-hundredth of a percentage dian Nautanki Company owes IDBI
traded CG Power, thus harming the
point. Bank Rs 86.48 crore, HDFC Bank Rs
interests of its minority shareholders.
6.26 crore and Bank of Baroda Rs
The CRR increase, effective the fort-
49.23 crore. "The dues of IDBI Bank
night of May 21, means that banks will
Credit card spend tops Rs. outstanding as of May 1, 2022, stand
have a relatively low lending capacity
1 trillion in March 2022 at Rs 92.69 crore plus interest thereon
in terms of funds and so would raise
with effect from May 2, 2022," the
interest rates on deposits to raise Spending through the credit card in
notice said.
funds. The CRR hike is expected to March 2022 jumped 48 per cent year-
withdraw liquidity to the tune of on-year to top Rs 1 trillion -- five The guarantors and directors of the
around Rs. 87,000 crore. months after it had hit the same fig- company were Anumod Sharma, Anu
ure for the first time in October 2021,
"The RBI is adopting a simple rationale Appaiah, Sanjay Choudhry, Viraf
buoyed by festive season expenditure.
that in order to normalise rates, liquid- Sarkari, SG Investments, Great Indian
ity withdrawal is needed, that too in The jump has been driven by the pickup Tamasha Company and Wizcraft Inter-
large chunks. It is a clear sign that the in consumption as the pandemic re- national Entertainment Pvt Ltd, the
RBI is worried about inflation," said cedes. notice said.
BANKING FINANCE | JULY | 2022 | 7