Page 7 - Banking Finance November 2022

BANK UPDATE

Bank frontline staff must According to data released by the RBI, Bank NPAs to hit decadal
total credit card spending in shops
speak local language low of 4%
(point of sale terminals) stood at Rs
Finance minister Nirmala Sitharaman 44,943 crore in August as compared to Gross non-performing assets (GNPAs) of
has asked banks to ensure that front- Rs 41,766 crore in July. However, card banks is expected to improve 90 basis
line staff of banks speak the local lan- spending online fell to Rs 67,414 crore points (bps) to about 5 per cent this fis-
guage and do not invoke patriotism in August compared to Rs 74,089 crore cal, and another 100 bps to a decadal
and question the customer for not in the previous month. low of about 4 per cent by March 31,
2024, riding on post-pandemic eco-
knowing Hindi. "We cannot have staff
who do not speak the local language nomic recovery and higher credit
HDFC Bank Q2 net profit
and who demand from citizens that growth, according to CRISIL ratings.
grows 20% to Rs. 10,605
they speak in a particular language and CRISIL observed that the asset quality
say that unless they do it, they are not crore of the banking sector will also benefit
Indians," said Sitharaman addressing from the proposed sale of NPAs to the
HDFC Bank reported a net profit of Rs
the Indian Banks Association. National Asset Reconstruction Com-
10,605 crore for the quarter ended
pany (NARCL).
She asked banks to review the staff September 2022, an increase of 20.1%
who are posted at branch levels. over the year-ago period. The consoli- "That said, not all segments will per-
Sitharaman said at an IBA event that dated net profit for the latest quarter form equally well. The biggest improve-
if banks had a problem mixing and was Rs 11,125 crore, up 22.3% over the ment will be in the corporate segment,
matching staff and had staff who could quarter ended September 30, 2021. where gross NPAs is seen falling below
not communicate at the local lan- 2 per cent next fiscal from a peak of
The bank's deposits grew faster than
guage, they should be kept away from the industry at 19% over previous year about 16 per cent as on March 31,
customer facing jobs. to Rs 16,73,408 crore. The low-cost 2018," the agency said in a statement.
current and savings account (CASA) Krishnan Sitaraman, Senior Director
Credit card count dips by deposits grew by 15.4% with savings and Deputy Chief Ratings Officer,
account deposits at Rs 5,29,745 crore CRISIL Ratings, noted that the steady
23L on RBI rule
and current account deposits at Rs improvement in corporate asset qual-
The total number of credit cards de-
2,29,951 crore. Time deposits were at ity is reflected in the credit quality of
clined by 22.6 lakh on a net basis in
Rs 9,13,712 crore, an increase of bank exposures.
August this year to 7.8 crore from over
22.1% over the corresponding quarter
8 crore in the previous month due to a
of the previous year. As a result, the Doorstep banking for eld-
change in the RBI's regulation that
share of CASA deposits dipped margin-
required lenders to deactivate cards ally to 45.4% of total deposits as of erly on cards
that have not been in use for a year. Over 50 million senior citizens above 70
September 30, 2022.
The largest declines were recorded by years of age and an equally large num-
Consolidated advances expanded by
HDFC Bank and Axis Bank. ber of differently abled persons could
22.8% from Rs 12,49,331 crore as on
soon expect to get basic banking ser-
While the drop in numbers could be September 30, 2021 to Rs 15,33,945
vices in the convenience of their
attributed to the RBI's directive, the crore as on September 30 this year.
homes.
industry also saw a month-on-month Total advances as of September 30,
decline in total spending in August - 2022 were Rs 14,79,873 crore, an in- The department of financial services
down 3% from July. "This is largely on crease of 23.4% over September 30, (DFS) in the finance ministry proposes
account of implementation of new RBI 2021. Gross nonperforming assets to notify a new guide for bankers soon,
norms. This should impact other play- were at 1.2% of gross advances as on which will make doorstep provision of
ers (like SBI Card and ICICI Bank) as September 30, 2022, as against 1.4% banking services mandatory for certain
well with a lag," said Suresh as on September 30, 2021. Net non- bank branches for senior citizens and
Ganapathy, head of financial research performing assets were at 0.33% of net the differently abled, according to two
at Macquarie Capital. advances as on September 30, 2022. persons aware of the development.

BANKING FINANCE | NOVEMBER | 2022 | 7