Page 7 - Banking Finance March 2019

BANK UPDATE

Srei Equipment Finance to co-lend with Syndicate Bank Paytm Payments Bank

Srei Equipment Finance Limited, has tied up with state-owned Syndicate Bank offers current accounts to
to jointly provide financing for construction and farm
equipment. Under the arrangement, Syndicate Bank businesses
would leverage on its low-cost funds and co-lend equip- Paytm Payments Bank Limited an-
ment loans with Srei Equipment at a mutually agreed nounced the
rate, a company statement said. launch of its
The arrangement had been done under the aegis of zero-balance
Reserve Bank of India (RBI) circular dated September 21, 2018, that permits banks current ac-
to engage with non-banking finance companies (NBFCs) to co-originate loans for count facility.
the creation of priority sector assets, the statement added. iQuippo, a Kanoria This move is aimed at small and
Foundation initiative, will facilitate sourcing of loans under this programme. medium enterprises (SMEs) who do
not have access to free current ac-
It will aid both Srei Equipment and Syndicate Bank in deepening their reach in con- counts.
struction, mining and allied equipment sector and commercial vehicles segment
further. Incidentally, iQuippo is one-of-its-kind digital marketplace for construction With this move, PBBL becomes the
equipment, machinery and services. The platform has been digitalising the frag- first payments bank to offer current
mented construction equipment industry in India and aiding in the process of fair account facility to businesses.
price discovery, higher asset utilisation rates and quicker pay-back period. These current accounts will be avail-
able to individuals, sole proprietors,
BoI, UBI staff may get Canara Bank loans to buy shares SMEs, and large corporates, who
of their banks can also deposit money an unlimited
number of times without incurring
Bank of India and Union Bank of India have made arrangements with Canara
Bank to provide collateral-free loans to their respec- any charges. This feature is helpful to
tive employees, a veiled move to fund purchase of shop owners who receive a majority
shares under Employee Stock Purchase Scheme (ESPS). of payments in cash on a daily basis.
Regulations do not allow banks to offer loans to their However, there is no restriction on
own employees for purchasing shares under ESPS. depositing any amount and conduct-

Both Bank of India and Union Bank of India have infor- ing transactions during the day. Cus-
mally told their employees that they may take loans from Canara Bank should tomers can redeem these swept-out
they want to purchase shares. The move reflects the desperation by the lenders balances on demand at any time.
while several other state-owned banks had earlier faced lukewarm response on Large corporates also benefit from
their ESPS amid their financial stress. Bank of India even disbursed February staff the current account facility through
salary in the mid of the month apparently to encourage employees buy shares. its interactive net banking panel. The
bulk payment mechanisms enable
Bank of Baroda to sell NPAs to raise Rs.5,929 crore corporates to transfer funds to em-
Bank of Baroda plans to sell a series of non-performing assets (NPAs) totalling ployees' bank accounts for salary, re-
Rs.5,929 crore, including Rs.1,839 crore owed by debt- imbursements or any other pay-
ridden telecom company Reliance Communications, on ments. Enterprises using PPBL's cur-
cash basis. A Rs.262-crore NPA in Asian Colour Coated rent account can also process bulk
Ispat, Rs.200 crore in Monnet Power, Rs.143 crore in bill payments and can customise the
Sinhgad Technical Education Society, and Rs.266 crore approval matrix for the same based
in GVK Power Goindwal Sahib, are among the others. on their requirements. PPBL has de-
The lender intends to sell the debt in a total of 49 companies to raise Rs.5,929 signed these offerings keeping in
crore. GVK Gautami Power (Rs.91 crore), Golden Jubilee Hotels (Rs.134.26 crore), mind the usage and requirements of
Surat Hazira NH6 Tollways (Rs.100.17 crore), SBQ Steels (Rs.177.17 crore) and small business owners and large en-
Spanco (Rs.86.30 crore) are among the major debtors' assets BoB intends to sell. terprises.

BANKING FINANCE | MARCH | 2019 | 7