Page 5 - Banking Finance November 2021

BANK UPDATE

Banking

News

Bank credit increases by a combination of branch network, busi- Banks get RBI nod to use
ness correspondents, business facilita-
6.7% to Rs. 109.12 trillion tors, CSC partners, virtual relationship any other ARR in place of

deposits rise by 9.32% management and digital outreach plat- LIBOR
Bank credit rose by 6.7 per cent to Rs forms," the bank said. This will increase RBI has permitted banks, which are
109.12 lakh crore and deposits by 9.32 its rural outreach to about a third of authorised to deal in foreign exchange,
per cent to Rs 155.75 lakh crore in the the country's villages. to use any other widely accepted/al-
fortnight ended September 10, RBI ternative reference rate (ARR) in place
data showed. Interest rates on small sav- of the London interbank offered rate
In the year-ago fortnight ended Sep- ings schemes remain un- (LIBOR) for interest payable in respect
of export/import transactions.
tember 11, 2020, bank advances had changed
stood at Rs 102.27 lakh crore and de- The central bank has issued a circular
The government kept the interest
posits at Rs 142.47 lakh crore, accord- rates on small savings schemes, includ- in this regard to authorised dealer
ing to RBI's Scheduled Banks' State- banks in view of the impending cessa-
ing NSC and PPF, unchanged for the
ment of Position in India as of Septem- tion of LIBOR as a benchmark rate.
third quarter of 2021-22 amid the
ber 10, 2021, released. Banks will be permitted to extend ex-
Covid-19 pandemic and elevated level
In the fortnight ended August 27, of inflation. port credit in foreign currency using
2021, bank credit had increased by Public Provident Fund (PPF) and Na- any other widely accepted ARR in the
6.67 per cent and deposits by 9.45 per currency concerned, he added. Since
tional Savings Certificate (NSC) will con-
cent. tinue to carry an annual interest rate the change in reference rate from
In FY2020-21, bank credit had grown of 7.1 per cent and 6.8 per cent, re- LIBOR is a "force majeure" event,
banks are also being advised that
by 5.56 per cent and deposits by 11.4 spectively. change in reference rate from LIBOR/
per cent. "The rates of interest on various small LIBOR related benchmarks to an ARR
savings schemes for the third quarter will not be treated as restructuring, the
HDFC Bank to double ru- of the financial year 2021-22 starting Governor then said.
ral presence, hires 2,500 from October 1, 2021, and ending on
December 31, 2021, shall remain un-
HDFC Bank said it is planning to double changed from the current rates appli- HDFC Bank adds 4 lakh
its reach to two lakh villages in the cable for the second quarter (June 1, credit cards since ban lifted
next 18-24 months and hire 2,500 2021 to September 30, 2021) for FY HDFC Bank has added four lakh new
people more in the next 6 months.
2021-22," the finance ministry said in credit cards since the RBI embargo on
"The bank plans this expansion through a notification. fresh issue of these was lifted on Au-

BANKING FINANCE | NOVEMBER | 2021 | 5