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Solvency buffers at insurers thinning; general insurance sector more of a concern
The Reserve Bank of India's latest report highlights concerns over thinning capital in the insurance sector. While life insurers remain compliant, their buffers are shrinking. The general insurance segment faces a more serious challenge, with three public sector firms persistently falling below the minimum solvency requirement for over a year, posing a direct financial stability risk.
Jana Holdings faces likely default rating after delay in debt repayment: Sources
The holding company of Jana Small Finance Bank has delayed repayment of its debentures and is expected to be downgraded to a default rating, although the bank itself is unlikely to face any direct financial impact, sources said.
BoB, Mizuho Bank forge partnership to enhance collaboration in M&A financing
Bank of Baroda has joined forces with Japan's Mizuho Bank to boost their capabilities in mergers and acquisitions financing. This collaboration leverages Mizuho's global reach and structured finance expertise with BoB's strong Indian market presence and corporate ties. The partnership aims to enhance joint origination, structuring, and syndication of acquisition financing, alongside M&A advisory and risk distribution, promising a significant boost for cross-border deals.
Banks, NBFCs well placed even in severe stress scenario
The Reserve Bank of India's latest financial stability report indicates that Indian banks will likely keep capital levels above the regulatory minimum, even in challenging scenarios. Core capital ratios may see some reduction, but they are anticipated to remain healthy. On the other hand, certain NBFCs could experience difficulties.
European Securities authority approves recognition for India clearing corporation
The European Securities and Markets Authority has granted essential recognition to India's Clearing Corporation, putting an end to a prolonged dispute. This groundbreaking approval allows the Clearing Corporation of India Ltd (CCIL) to operate under the Reserve Bank of India's regulations, an important advancement for European banks. By signing a memorandum of understanding, this resolution avoids possible capital adequacy complications for those financial institutions.
RBI stress test flags rising NBFC stress, capital buffers to thin by FY27
India's central bank warns of rising bad loans and shrinking capital for non-banking lenders. Stressed assets could hit 2.8% by March 2027, with capital buffers dipping to 20.8% under normal conditions. Worryingly, several NBFCs might breach minimum capital requirements, especially under economic stress, highlighting ongoing regulatory focus on the sector's resilience.
Bad loans may edge up to 1.9% by FY28 despite resilient banks: RBI
Indian banks are projected to see a slight increase in bad loans to 1.9% by March 2028, yet the system remains robust with strong capital and healthy profits. The Reserve Bank of India's report highlights resilient balance sheets and improving credit growth. Despite global uncertainties, the financial sector, including NBFCs, is well-positioned to absorb shocks, though AI cyber threats demand increased vigilance.
RBI's new funding rules deal 'body blow' to Indian prop trading firms
From July 1, bank guarantees used in capital markets must be fully backed by collateral, a move expected to reduce leverage and raise funding costs
PFC-REC merger: Which stock should you buy before the mega demerger creates Rs 11 lakh cr power financing giant
Power Finance Corporation (PFC) and REC's boards have approved a merger, creating India's largest power financing institution with a Rs 11 lakh crore loan book. The combined entity is poised to capitalize on the ongoing power sector capital expenditure cycle, including renewable energy and transmission projects. Analysts suggest the merger offers strategic advantages and improved capital allocation, positioning the new giant for significant growth.
AI-led productivity will keep US dollar strong; Fed likely on hold through 2026: Standard Chartered
Steven Englander, Managing Director - Global Head of G10 FX Research, and North American Macro Strategy at Standard Chartered Bank explains why structural factors, not the economic cycle, are driving the US dollar. He discusses the Fed's rate outlook, long-term interest rates, capital flows, emerging markets, India's rupee and what could trigger a sustained decline in the dollar.
HDFC, Bandhan, And Yes Bank Shares In Red — Why Are They Lagging?
Kotak Institutional Equities said HDFC Bank has strengthened its leadership with the appointment of former Finance Secretary Rajiv Kumar as Chairman-designate and Puneet Sharma as CFO, while adding that Sharma's resignation from Axis Bank is not a negative for the lender.
Genus Power shares fall 10% after ₹268 crore block deal; Sources say GIC likely seller
Chiswick Investment or GIC has a 15.11% stake in Genus Power at the end of the March quarter, while close to 1.6 lakh small retail shareholders, or those with authorised share capital of up to ₹2 lakh, have a 16% stake in the company.