Customers would be happy to know that banks are sprucing up their festive offers to give discounts on loans and waive off charges 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 a 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 these bonds would be allocated to investors, and it would essentially increase the corporate bond investment limit for foreigners.

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

Jaitley to give helping hand to banks

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

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

Banks ready to lend

But a day after, bankers said they are willing to finance the selective hybrid annuity mode (HAM) street projects but are skeptical about the toll-operate models even as they grapple with big non-performing assets (NPAs) in the sector.

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

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

P2P lending

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

Read here to learn exactly what P2P lending is and why RBI needs to govern it.

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

Payments banks, the brand new entrants in the country’s banking sector, are facing a problem that hinders the purpose of which they have been made — easing transactions for customers. Players in the obligations bank space say they’re 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 focus on growing scale till they generate earnings.

Microfinance

With the microfinance sector being the most coveted space among lenders over the last few 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 reduce risk.

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

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