Created: Monday, 21 July 2014 11:19
Indian markets surged highest in one and a half week as steep growth in banks pushed up the benchmark indices. S&P BSE Sensex opened 205.40 points up at 25846.96 and the Nifty rose 54.15 points or 0.71 percent at 7718.05. Major reasons buckling up the markets include higher foreign investments and improved monsoon reviews.
Foreign portfolio investors (FPIs) invested in Indian shares worth a net Rs 574.47 crore on Friday, 18 July 2014, as per provisional data from the stock exchanges.
Union Minister of State (MoS) Science and Technology (Independent Charge), Earth Sciences (Independent Charge), MoS in Prime Minister's Office (PMO), Department of Personnel and Training, Atomic Energy, Space and Earth Sciences, Dr. Jitendra Singh said on Sunday, 20 July 2014, "There has been significant increase in the monsoon during the last one week beginning from 13 July 2014." He added that although rains during the month of June and first two weeks of July, recorded deficiency of 43%, in the week beginning 13 July 2014, the figures contracted to 32%, recording 11% improvement in the monsoon level."
The monsoon forecast for next two weeks is very good, particularly in Central India and coastal regions of South India. There is, therefore, no reason to unnecessarily alarmist on the issue of monsoon, Dr. Singh said
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee swung with an average at 60.20, compared with its close of 60.275 on Friday, 18 July 2014.
The market pulse stayed positive as the gainers showed up for every loser on BSE. In figures, 1,439 shares surged and 405 slugged.
BSE Mid-Cap index climbed 1.2 percent and BSE Small-Cap index jumped 1.31 percent in the morning report. Both the indices exceeded predictions indicating healthy strong potential growth in the market.
Stocks in the Asian market poised the growth trend with optimistic foreign portfolio investors walking in and improved monsoon predictions as rains hit towns boosting domestic stock exchanges. Key benchmark indices in Taiwan, Singapore, Indonesia, Hong Kong, and South Korea rose by 0.01% to 0.7%. China's Shanghai Composite fell 0.18%.
Shares of Banking sector pushed up domestic growth channels. Axis Bank set a new record in its portfolio hitting highest values ever. Axis Bank climbed 0.98 percent to Rs 2,015.65 after hitting record high of Rs 2,022.65 in intra-day trade.
Kotak Mahindra Bank announced its entrant in Share Purchase Agreement with FTIL purchasing 76.49 lakh shares aggregating to 15 percent equity stake in Multi Commodity Exchange of India (MCX) for Rs 459 crore. Though, the final closing is waiting for regulatory approvals. Kotak gained 2.63 percent as the news came into light.
ICICI Bank moved up 0.72 percent, IndusInd Bank hiked 1.38 percent, Yes Bank surged 1.09 percent, and Federal Bank climbed 1.11 percent.
HDFC Bank boosted 1.52 percent ahead of its Q1 results today, 21 July 2014. After first quarter results, the bank grew further up 129.58 points or 0.51%, off close to 90 points from the day's high and up about 40 points from the day's low.
Among PSU bank stocks, State Bank of India (SBI) stepped up 2.34 percent, Canara Bank walked up 2.48 percent, Union Bank of India rose 1.53 percent, Bank of India climbed 1.12 percent, Bank of Baroda jumped 1.03 percent and Punjab National Bank gained 0.89 percent.
Trading in US index futures indicated that the Dow predict falling 11 points at the opening bell on Monday, 21 July 2014. US stocks grew on Friday, 18 July 2014, where better earnings from Google Inc., the world's third-largest company, refocused investors on economic growth amid crises in the Middle East and Ukraine.
Created: Friday, 18 July 2014 11:22
The central banking authority of India drafted modification in the guidelines for setting up a payment bank. New guidelines ease the procedure widening reach to every individual having minimum 10 years experience in financial or banking sector. The payment bank must hold two conditions, first minimum paid up capital of Rs 100 crore, second individual founder's contribution minimum 40 percent.
India central bank, Reserve Bank of India proposed allowing everyone including super-market chains and telemarketing companies, anyone with any kind of experience of financial markets to set up a payment bank.
"Existing non-bank pre-paid instrument issuers (PPIs), non-banking finance companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives, and public sector entities are eligible to set up a payments bank," according to notification issued by the RBI.
Issuance of license for payment bank have to fit the preset criterion. There will be no flexibility in cases if any of credentials are lacking. RBI stated, "we are analyzing eligibility of individuals their past records of integrity, credentials, track record and financial soundness of least five years working of their businesses."
RBI holds both the conditions of minimum contribution and minimum paid up capital mentioned above for sanctioning a payment bank license. After commencement of business of the bank, certain a time-line following the percentile of shareholdings by the promoter. In the first three years, shareholdings of the promoters come down to 40 per cent, further 10 percent down to 30 percent in a period of 10 years, and to 26 per cent within 12 years (Computation of years from the date of commencement of the bank).
RBI said, "both payment banks and small banks are "niche" or "differentiated" banks, having similar objective of facilitating financial involvement".
Structure of small banks is accommodating all the basic banking services like deposits and supply of credit in a limited area of functioning.
From expansion point of view, payment banks with limited products in banking have access to a wider network of access points especially remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others.
The first two differentiated bank licenses issued in April after a decade of the promises made to the sector. The ruling government in 2004 brought up hopes of interested investors but did not issue any license until Modi government took over the charge of governance in India.
RBI disclosed its future planning would involve reforming licensing exercise based on the learned experience it gets from the revised guidelines for differentiated small banks.
The central bank said it would make suitable changes to the current regulations and put in place a structure for on-tap authorization of universal banks in the private sector in the current financial year itself.
Small banks and other differentiated banks serving niche interests, local area banks, payment banks etc are meeting the demands of credit and remittance of small businesses, unorganized sector, low-income households, farmers and migrant work force, RBI stated.
RBI sought views and comments on the proposed guidelines from all interested parties and general public, latest by 28 August 2014.