Page 5 - Banking Finance June 2022

BANK UPDATE

Banking

News

Tata Group may abandon to invest about Rs 1,000 crore over the that it was unfortunate that a public
next three years for building a digital sector bank had taken such a step even
plans to enter banking
banking ecosystem including a super when the KPMG report - on which the
The Tata Group is understood to have app. The bank will unveil its super app decision is seemingly based - is still sub-
done a rethink on its banking business next month. This would involve revamp- judice. "Necessary legal steps will be
plans and may now not go ahead with ing the mobile banking platform with initiated in this regard," they said.
it, said executives close to the devel- 262 features replicating branch bank-
opment. ing.
Central Bank to shut 600
The group had considered getting into
branches by March 2023
banking through Tata Capital, its finan- Punjab & Sind Bank de-
cial services arm, after a working group Central Bank of India, plans to shut
clares SREI group firms
of the Reserve Bank of India (RBI) in 13% of its branches to improve its fi-
November 2020 recommended grant- dues as fraud nancial health, which has been under
ing banking licences to industrial Punjab & Sind Bank has declared out- pressure for several years, according to
houses. However, the executives said standing dues of SREI companies as sources and a document seen by
the restrictions and regulations that fraud, it said in a notice to the stock Reuters.
come with a banking licence would exchanges.
The bank is looking to reduce the num-
lead to operational issues for the con-
In its filing, the bank said that the NPA ber of branches by 600 by either shut-
glomerate and also the costs would far
accounts, SREI Infrastructure Finance ting down or merging loss-making
outweigh the benefits of having a bank
(SIFL) with outstanding dues of Rs branches by the end of March 2023,
as part of the group.
510.16 crore and SREI Equipment Fi- according to the copy of a document
Since the rules for non-banking finan- nance Limited (SEFL) with outstanding reviewed by Reuters.
cial companies (NBFCs) and banks are dues of Rs 724.18 crore have been de-
It is the most drastic step the lender
also converging, there is still an advan- clared as fraud and reported to the RBI
has taken to improve its finances and
tage in being a standalone finance as per regulatory requirement.
will be followed by the sale of non-core
company, as the operational costs for
With this, the bank became the first to assets such as real estate, said a gov-
banks are much higher, they said.
classify SIFL and SEFL as fraud accounts, ernment source who did not want to
according to sources. be named.
Canara Bank to invest Rs.
In its filing, the bank also said that the The closure of the branches has not
1K crore to build digital
accounts have been fully provided for
been reported previously. The more
banking backbone as per prescribed prudential norms. than 100-year old lender currently has
Public sector lender Canara Bank plans Sources close to SREI promoters said a network of 4,594 branches.
BANKING FINANCE | JUNE | 2022 | 5