Page 10 - Banking Finance December 2022

RBI CORNER

current exchange rate, the Russian In this regard, sources said, a meeting
RBI gives conditional nod
ruble equals Rs 1.35. was convened to comprehensively look
to Carlyle, Advent for Yes
at all aspects. Besides NPCI officials,
RBI's forex reserve surges senior officials of the finance ministry Bank stake buy
and RBI also participated in this.
Foreign exchange reserves showed a India's central bank has given condi-
stellar $14.7 billion surge in the week At the moment, NPCI is evaluating all tional approval to U.S. private equity
ended November 11, according to the possibilities and no final decision firms Carlyle Group Inc and Advent In-
data released by the RBI. Foreign cur-
has been taken to extend the Decem- ternational for their purchase of a
rency assets rose $11.8 billion, while
ber 31 deadline, the sources said. combined 20% stake in Yes Bank, the
gold and special drawing rights (SDR)
private-sector lender said.
grew by $2.8 billion.
RBI asks Paytm to reapply "The investors are evaluating the con-
The climb in reserves coincides with a ditions," Mumbai-based Yes Bank said,
for payment aggregator li-
4 percent decrease in the dollar index,
adding that the bank and the investors
which points to a large valuation cence
will engage with the Reserve Bank of
change. The RBI holds foreign currency
India's banking regulator has declined India to seek an early resolution of the
assets in liquid foreign currency secu-
a payment aggregator licence for the conditions and get final approval.
rities, bank deposits, and deposits with
One 97 Communications Ltd unit that
other central banks. The value of the It was not immediately clear what the
owns the popular Paytm brand, asking
forex pile changes with the movement conditions were. Carlyle, Advent, Yes
it to reapply with 120 days after meet-
in prices of market securities as also Bank and the RBI did not immediately
ing certain conditions.
exchange rates.
respond to Reuters' emailed requests
The regulator asked Paytm Payments
The RBI reports reserves after adjust- for comment.
Services Ltd, a 100% subsidiary of One
ing for these changes. Every time the
Yes Bank had, in July, said it would
dollar falls versus other currencies, in- 97 Communications, to reapply after
raise $1.1 billion from Carlyle and Ad-
cluding the Indian rupee, the RBI gets getting the necessary approvals for
vent for a 10% stake each in the bank,
the benefit of an increase in the value foreign direct investment in the com-
as it looked to boost its capital and fund
of its forex pile. pany to comply with existing rules, the
growth.
company said in a notification to stock
exchanges on Saturday. The funds were to be raised by issuing
NPCI in talks with RBI on
shares worth $640 million and share
Payment aggregators, platforms that
volume cap deadline warrants worth $475 million.
bring together various online payment
National Payments Corporation of In-
options, must be licensed by India's The proposed sale to the private equity
dia, is in talks with the Reserve Bank
central bank and banking regulator, firms came two years after the RBI
on implementation of its proposed
Reserve Bank of India. stepped in to take control of the bank
December 31 deadline for limiting the
after a dramatic rise in toxic assets
volume cap of players to 30 per cent. In its communication to exchanges,
alarmed investors and depositors, pos-
One 97 Communications said it does
At present, there is no volume cap. So,
ing a systemic risk to India's banking
not expect the delay in securing a pay-
two players -- Google Pay and PhonePe
sector.
ment aggregator licence to impact its
-- account for a market share of about
business. In September, Yes Bank approved the
80 per cent.
transfer of stressed assets worth 480
NPCI in November 2022 had proposed The regulator also asked that Paytm
billion rupees ($5.91 billion) to private
a 30 per cent volume cap for third- Payments Services not bring onboard
equity firm J.C. Flowers in an attempt
party app providers (TPAP) in a bid to new online merchants until it reapplies
to clean up its balance sheet.
avoid concentration risk. for the licence.
10 | 2022 | DECEMBER | BANKING FINANCE