This week in Banking: SEBI relief for listed cos; banks line up festive loan offers, lower interest rates

In the run up to the festive season, the banking sector offered good news to borrowers with lower interest rates and several home loan offers. In a relief to listed companies, market regulator SEBI on Saturday deferred implementation of its bad loan directive "until further notice". Besides, insolvency cases too saw some gradual progress this, while Ajay Piramal shared his views on the IDFC-Shriram merger and his new retail housing finance venture.

Top banks rushed to grab the retail share in the festive season by reducing interest rates on loans and with various offers on home loans.

State Bank of India (SBI), Bank of Baroda and Andhra Bank are among the public sector lenders that cut base rate while Punjab National Bank has reduced it with effect from September 1. Ahead of the monetary policy rate decision, country’s largest lender SBI cut base rate by 5 basis points (bps) to 8.95 percent. Andhra Bank has reduced the base rate to 9.55 percent from 9.70 percent while Bank of Baroda has reduced base rate from 9.50 percent to 9.15 percent.

ICICI Bank announced the launch of a new home loan product, which offers borrowers the benefit of a 1 percent cashback on every EMI, for the entire tenure of the loan.

Experts believe that the Reserve Bank of India (RBI) is likely to keep the repo rate or key policy rate unchanged at 6 percent on October 4, citing higher inflation risks and weak credit demand.

One of the biggest financial merger deals in the country, IDFC with Shriram Group, has hit a hurdle after it faced opposition from some of its shareholders.

During the week, Piramal Group launched its own financing unit for retail home borrowers, Piramal Housing Finance, wholly-owned housing finance subsidiary of Piramal Finance, which plans to achieve a loan book of Rs 15,000 crore by 2020 from Rs 200 crore at present starting this month.

As the banking industry grapples with high non-performing loans, a stressed assets fund joint venture between Piramal Enterprises and Bain Capital Credit is in discussions to buy large assets currently under insolvency proceedings.

Billionaire Ajay Piramal-led Piramal Enterprises and private equity firm Bain Capital jointly floated a stressed asset fund in August this year to invest about USD 1 billion (Rs 6,500 crore) into stressed assets.

Markets regulator SEBI has put off implementation of its bad loan directive "until further notice" that required listed firms to inform exchanges if they default on loan payments to banks and financial institutions.

In a circular, the Securities and Exchange Board of India (Sebi) said it has decided to defer implementation of its earlier directive "until further notice". Last month, the regulator had directed listed companies to disclose from October 1 any payment defaults to banks and financial institutions within one working day of such a miss.

In the wake of the complaint against resolution professional Mamta Binani in the Synergies Dooray Automative insolvency case, Insolvency and Bankruptcy Board of India (IBBI) will come out with a resolution mechanism to handle complaints against all service providers including the insolvency professionals.

During the week, the insolvency court has adjourned the hearing of the case between Reliance Communications (RCom) and Ericsson to October 6.

Further, lenders to Lavasa Corporation Limited, unit of Hindustan Construction Company (HCC) group, have invoked the strategic debt restructuring (SDR) plan to resolve the stressed assets of the firm.