Customers would be happy to know that banks have been sprucing up their festive offers to give discounts on loans and waive off costs to avail loans in the Diwali season.

Corporates, on the other hand, would be welcoming banking regulator RBI’s decision to categorize masala bonds — rupee-denominated bonds issued overseas — as part of external commercial borrowings and not of the general limit of corporate bonds, as was the case earlier.

The move is intended to allow about Rs 44,000 crore more money under corporate debt. In consequence, the quantity pertaining to such bonds would be separately allocated to investors, and it would essentially increase the corporate bond investment limit to foreigners.

The issuance of such bonds overseas will now be within the aggregate present limit of Rs 2.44 lakh crore for foreign investment in corporate debt.

Jaitley to give helping hands to banks

Finance Minister Jaitley said the authorities will take action to find adequate resources to encourage debt-laden banks in order to assist them to participate in India’s economic growth.

Gadkari also pulled up banks for delaying funding to road projects and ensured that banks shouldn’t fear additional bad loans in the sector as all stalled projects from the previous government’s regime are kick-started again.

Banks Prepared to give

However, a day after, bankers said that they are willing to fund the selective hybrid annuity mode (HAM) road jobs but are skeptical about the toll-operate models even as they grapple with large non-performing assets (NPAs) in the sector.

On Wednesday, bankers to the financially distressed Air India met government officials including the aviation minister as well as the ministerial group to decide the fate of further loans to the financially-troubled national air carrier.

Though the details of the meeting are yet to be confirmed, banks might look at giving additional funding to support the government’s attempts to revive Air India.

The Reserve Bank of India (RBI) will treat all peer-to-peer lending (P2P) platforms as non-banking financial companies (NBFCs), the authorities said in a gazette notification on Wednesday. The RBI will soon release the final guidelines for P2P lenders.

Read here to understand exactly what P2P lending is and why RBI needs to regulate it.

Cyber Security

To tighten cyber security in the country, the government is working to come up with cybersecurity standards for mobile devices along with a regulation to undertake ransomware, according to Ajay Kumar, Additional Secretary in the Ministry of Electronics and Information Technology (MeitY).

Payments Banks

Payments banks, the brand new entrants in the country’s banking sector, are facing an issue that hinders the purpose of which they have been made — easing transactions for customers. Players in the payments lender space say they are more like “restricted banks” since the challenge is to get customers to transact.

Opening up on the challenges in the sector, the CEOs of the four active payments banks said they will have to work on growing scale till they generate revenues.

Microfinance

With the microfinance sector being the most enviable space among creditors during the past couple of decades, Ratna Vishwanathan, CEO, Microfinance Institutions Network (MFIN), a self-regulatory body for microfinance institutions, said the sector requires more structural changes in order to lower risk.

MFIN also released a Mutually Agreed Code of Conduct (MACC) stating that MFIs will not lend more than Rs 60,000 per customer and the number of creditors will likely be restricted to three under the Joint Liability Group model.

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