Page 7 - Banking Finance February 2023

BANK UPDATE

to name the banks. The advisory allow- Suryoday said it sold a pool of stressed were saved due to the Emergency
ing the verification is not public and assets amounting to Rs 492 crore for Credit Line Guarantee Scheme (ECLGS)
has not previously been reported. Rs 135 crore in December. Out of this, launched by the government during
Rs 64 crore was technically written off the pandemic, thus saving millions of
The verification is not mandatory and
accounts and the balance are NPAs. jobs till November, 2022, according to
is intended for cases where another
estimates made by a State Bank of
government identification card used for Ujjivan's outstanding gross loan portfo-
India research report.
tax purposes, the Permanent Account lio grew 33% year-on-year to Rs 21895
Number (PAN) card, is not shared with crore even as its loan disbursement in "In absolute terms, MSME loan ac-
banks. The prospect of banks using fa- the last quarter has seen a muted 1% counts worth Rs 2.2 lakh crore have
cial recognition has concerned some growth at Rs 4838 croreover Rs 4809 improved since the inception of ECLGS
privacy experts. crore in the year ago. for the entire banking industry. This
means that around 12 per cent of the
"This raises substantial privacy con-
cerns especially when India lacks a GST not payable on incen- outstanding MSME credit has been
saved from slipping into NPA because
dedicated law on privacy,
tive to banks for promot-
of the ECLG scheme," SBI said in a re-
cybersecurity and facial recognition,"
ing RuPay search report.
said Pavan Duggal, an advocate and
cyber law expert. Incentives paid by the government to It said there is clear evidence MSME
banks for promoting RuPay debit cards units are becoming larger with several
The government has said it is target-
and low-value BHIM-UPI transactions units crossing the threshold of Rs 250
ing parliamentary approval of a new
will not attract GST, the Finance Min- crores turnover and turning mid-sized
privacy law by early 2023. The new
istry said. corporates by the new definition of
measures can be used to verify identi-
MSME units.
ties of individuals making deposits and Recently the Cabinet cleared an Rs
withdrawals exceeding Rs. 20 lakhs 2,600-crore incentive scheme for banks "This reveals integration of MSME
($24,478.61) in a financial year, where to promote RuPay debit cards and low- units with a larger value chain as PLI
the Aadhaar identity card is shared as value BHIM-UPI transactions in the activity is gaining momentum," the SBI
proof of identify, said two government current fiscal. report said.
officials, who asked not to be named
Under the Incentive scheme for the
because the information is not public. ICICI Bank net profit up
promotion of RuPay Debit Cards and
low-value BHIM-UPI transactions, the 34% to Rs. 8,312 crore
Asset quality improves at government pays banks an incentive as
Private sector lender ICICI Bank re-
Small Finance Banks, a percentage of the value of RuPay ported a 34.2 per cent rise in its
Debit card transactions and low-value standalone profit after tax (PAT) at Rs
NBFCs
BHIM-UPI transactions up to Rs 2,000. 8,312 crore in the quarter ended De-
Ujjivan Small Finance Bank said its
As recommended by the Council, it is cember 2022 compared to Rs 6,194
gross non-performing assets ratio
hereby clarified that incentives paid by crore in the year-ago quarter.
stood at 3.3% at the end of December
MeitY to acquiring banks under the Net interest income (NII) rose by 34.6
2022 as against 9.8% a year back.
Incentive scheme for promotion of per cent to Rs 16,465 crore from Rs
Suryoday's gross NPA stood at 4.26%
RuPay Debit Cards and low-value 12,236 crore in Q3 of FY2022.
compared with 10.5% over the same
BHIM-UPI transactions are in the na-
period. The net interest margin (NIM) im-
ture of subsidy and thus not taxable, it
proved to 4.65 per cent in the report-
"Collection efficiency maintained at
said. ing quarter from 3.96 per cent in the
99% plus, with restructured and NPA
year-ago period.
books showing healthy collections. The
ECLGS bailed out 14.6 lakh
bank continues to focus on stressed The gross non-performing assets (NPA)
buckets and reducing incremental MEMEs, says SBI report ratio declined to 3.07 per cent from
overdues," Ujjivan said in a regulatory At least 14.6 lakh micro, small and 4.13 per cent in the same period of the
filing to stock exchanges. medium enterprises (MSMEs) accounts previous fiscal. Net NPAs stood at 0.55
BANKING FINANCE | FEBRUARY | 2023 | 7