Page 6 - Banking Finance November 2020

BANK UPDATE

For example, in May, which saw com- Lenders cannot label loans as bad, the new cards, the company said in a
plete lockdown, the number of trans- even if a default has occurred. statement.
actions done through UPI stood at In the absence of the ordered stand- Bhavesh Gupta, the newly appointed
1,234.5 million transaction, while in still, the GNPA number would have CEO of Paytm's lending business, is set
June and July, when lockdown mea-
jumped to 7.46%, SBI Card manage- to undertake this project.
sures were relaxed a little, the num-
ment said.
ber of transactions stood at 1,336.9 "In our country, credit cards are still
SBI Cards reported impairment losses considered a product for the affluent
million and 1,497.3 million, respec-
and bad debt expenses at Rs. 862 crore sections of society and not everyone
tively.
in the quarter against Rs. 329 crore for can avail of its benefits," he said in the
the same period last year. statement.
Equitas Small Finance
"Additionally, management overlay "At Paytm, our aim is to provide credit
Bank IPO subscribed 1.97 provision created for Rs. 268 crore in cards that benefit India's aspiring youth
times Q2 FY21; total management overlay and evolved professionals," Gupta,

IPO of Equitas Small Finance Bank was provision is at Rs. 758 crore as of Sep- who was earlier the CEO of Clix Capi-
subscribed 1.97 times, the final day of tember," the company said. tal, added.
the public offering. The rise in provisioning and bad loans Jan Dhan accounts 60%
led to a 46% drop in profit to Rs. 206
The IPO received bids for 22.57 crore crore. Revenue from operations, how- rise during pandemic
equity shares against an offer size of
11.58 crore shares. ever, grew 5% to Rs. 2,413 crore. The Covid-19 has led to a 60% increase

The portion of the share sale reserved While asset quality concerns emerged in opening of new Jan Dhan accounts
and they are acting as a deterrent to
for qualified institutional investors was in the fiscal second-quarter, the credit
card company said that retail spending crime in several states, an SBI research
subscribed 3.87 times, and that for report has said.
non-institutional investors and retail showed resurgence.
investors was subscribed 23% and 2.12 Retail spending increased by about Latest data showed that the total
times, respectively. 50% in the second quarter from the number of Pradhan Mantri Jan Dhan
The public issue consists of a fresh is- preceding three months. Retail spend- Yojana accounts stood at over 41 crore
with a total balance of Rs 1.31 lakh
sue of Rs. 280 crore and an offer for ing was at 90% of pre-covid (Decem- crore. Since April 1, around 3 crore
sale of 7.2 crore equity shares by ber 2019- February 2020) levels. accounts were opened, with deposits
Equitas Holdings to comply with "Card-in-force"-total number of cards of Rs 11,060 crore. The average bal-
shareholding norms set by the Reserve issued and outstanding-grew 16% to 11
ance of PMJDY accounts increased to
Bank of India. The shares were sold at million as of Q2 FY21 as against 9.5
Rs 3,400 in April and declined thereaf-
a price band of Rs. 32-33 per share. million in the same period last year.
ter to Rs 3,168 in September and mar-
ginally increased to Rs 3,185 in Octo-
SBI Card asset quality hit Paytm talks to banks for ber, the report said.
SBI Cards reported a sharp deteriora- co-branded cards "Thus, the initial increase in average
tion in asset quality as thousands of Paytm is in talks with banks to launch balance that was primarily due to the
cardholders skipped payments, accord- co-branded cards and plans to issue loss of livelihood due to the pandemic
ing to reports. two million new cards over the next 18 and shift of migrant labourers from
The company's gross non-performing months, as the fintechcompany pushes urban areas to home, resulting in jump
assets (GNPA) rose to 4.29% in the to deepen its foray into the credit card of precautionary savings, may have
September quarter from just 1.35% in issuance and management business. been reversed," said Soumya Kanti
the preceding three months. Paytm's digital paymentsapp is set to Ghosh, group chief economic adviser at
SBI.
The asset quality could have been double up as the digital interface to
worse had not a top court order put a manage the finances linked to the Using the JAM (Jan Dhan-Aadhaar-
standstill on recognition of bad loans. credit cards of customers who receive Mobile) trinity as it is popularly known,

6 | 2020 | NOVEMBER | BANKING FINANCE