Page 6 - Banking Finance March 2019

BANK UPDATE

PNB plans to put up World Bank, UN arm and SIDBI plan 'women's
more than 4,000 proper- livelibood bond' to raise Rs. 300 cr
ties for e-auction The World Bank, UN Women (a United Nations entity dedicated to gender equal-
ity and empowerment of women), and Small Indus-
Punjab National Bank has decided to
tries Development Bank of India (SIDBI) have come
place more than
together to launch a five-year tenor 'women's live-
4,000 properties lihood bond' to raise Rs. 300 crore.
all over India on e-
auction as part of The proceeds from these social impact bonds,
the SARFAESI Ac- which will be unsecured and unlisted, will be used
tion initiated by the public sector bank. to help rural women in the country's poorest States
to set up or scale up their own enterprises.
This forms part of the bank's efforts
to achieve recoveries of Rs. 26,000 The bonds, which will be raised by SIDBI with the support of World Bank and
crore this fiscal. All Indian citizens UN Women, will be placed with leading wealth managers and corporates in the
and corporates can participate in the country on private placement basis. The coupon rate on these bonds will be 3
auction. The last date to participate per cent per annum.
or submit EMD differs for each auc- Junaid Ahmad, Country Director, World Bank, said investors expect greater so-
tion. Properties of all kinds - com- cial impact of their investment, which will fetch them a reasonable return of 3-
mercial, including industrial/factory 4 per cent per annum. He added that investments in such bonds should be made
land and building, residential, vacant tax exempt to attract investors.
plot - are being put for auction.
Interest charged
It may be recalled that PNB had re- Mohammad Mustafa, CMD, SIDBI, said his institution will ensure that
turned to profitability in the third quar- microfinance institutions (MFIs) that get funds, raised via the women's liveli-
ter ended December 31, 2018, re- hood bond (WLB) for on-lending to women entrepreneurs, don't charge more
porting a profit of Rs. 247 crore. The than 13 per cent interest. Currently, MFIs charge borrowers between 20-24 per
turnaround has come after three con- cent. Loans up to Rs. 1.50 lakh will be disbursed by MFIs.
secutive quarterly losses that the bank
posted after the Rs. 14,000-crore Ravneet Gill takes charge as Yes Bank MD, CEO
scam perpetrated by diamantaire
Nirav Modi and his uncle Mehul Choksi Ravneet Gill has taken charge as MD and CEO of YES Bank with immediate effect
came to light in February 2018. for a tenure of three years. His tenure as approved by RBI is
3 years from the date of his joining, i.e. March 1, 2019 to
The proposed e-auctions of these
4,000 properties are expected to February 28, 2022," The appointment of Gill, will be subject
substantially add to the overall recov- to approval of shareholders' at the ensuing annual general
ery tally of the bank. Sunil Mehta, meeting of the Bank to be held in June, 2019. Gill is not re-
Managing Director and CEO of PNB, lated to any of the directors of the Bank and he has affirmed
had recently said that the bank that he is not debarred from holding office of director by vir-
would make efforts to bring down tue of any order of Securities and Exchange Board of India or
the gross NPAs by two percentage any other such authority, the private sector lender said.
points to about 14 per cent by the
end of March this fiscal. Average balance under Jan dhan surges 24%
He had then said that the bank ex- Accounts under the Pradhan Mantri Jan Dhan Yojana have been witnessing a
pects bad-loan recoveries to the tune steep rise in average balance. There has been a
of about Rs. 8,000 crore in the last rise of up to 24 per cent in the balance of these
quarter, mainly from big corporate accounts across banks during the past year, accord-
insolvency resolution cases that are ing to individual data available with major banks.
before the NCLT. Banks claim the surge is the highest so far.

6 | 2019 | MARCH | BANKING FINANCE