The country’s largest lender, SBI, on Saturday said it has raised $1.25 billion through bonds from overseas market. The successful issue reflects the strong niche investor base that SBI has created for itself in offshore capital markets, allowing it to efficiently raise funds even during periods of increased currency and rates volatility, the lender said. Bonds were listed at India International Exchange IFSC Ltd, a subsidiary of BSE, at Gujarat International Finance Tec-City (GIFT City) IFSC.
Jet Airways chairman Naresh Goyal has offered to invest up to Rs 700 crore in Jet Airways on the condition that his stake post infusion of fresh capital does not fall below 25%. He, in his letter to SBI chairman Rajnish Kumar, also offered to pledge all his shares. SBI is the lead lender of a consortium of Indian banks that provided loans to the airline.
Country's largest lender, SBI will raise $1 billion by selling overseas bonds. The sale will take place in two tranches. The bank will raise about $ 700 million through five- year bonds and $300 million through three-year bonds. Initially, the range of five-year bonds was fixed at 210 basis points above the US Treasury however it has now come down to 185 basis points above the US Treasury. For three-year bonds, the range was negotiated at 190 basis points above the US Treasury, but it has come down to 157 basis points.
Jet Airways confirmed that the company was working on a resolution plan to revive the airline. The resolution plan was considering various options on the debt-equity mix, proportion of equity infusion by stakeholders and the consequent change in the composition of the company’s board of directors. According to sources, SBI led consortium could be the largest shareholder in the airline post restructuring with around 40% holding. Etihad’s stake could go up by 2-3% from the present 24%, while founder chairman Naresh Goyal’s stake could fall to around 24% from the present 51%.
The country's largest lender, SBI has started sending SMS alerts to its account holders asking them to update their KYC in line with the RBI's norms. Failure to comply with KYC requirements could lead to the bank account getting partially frozen and subsequently completely deactivated. Not adhering to KYC norms can also lead to heavy penalties being slapped on the offending banks. For instance, last November, the RBI had imposed a penalty of over Rs 3 crore each on Deutsche Bank and Jammu and Kashmir Bank for non-compliance of various norms, including asset classification and KYC.
A 12-bank consortium led by SBI has moved a Mumbai court seeking the release of Vijay Mallya’s assets that the Enforcement Directorate (ED) has attached. The banks urged the court to allow them to sell these assets “immediately” to realize the best value. The application said if the court lifts the attachment order, banks will be able to liquidate the assets through the Debt Recovery Tribunal (DRT) and recover their money. The banks contended that the attached assets were “vulnerable to market fluctuations and any delay in liquidating those assets may reduce their value”.
Etihad Airways CEO Tony Douglas said that the Abu-Dhabi based airline will not invest a single penny in the cash-strapped Jet Airways unless certain pre-conditions are met. It has demanded complete exit of Naresh Goyal and his family from the management control of the Indian airline. Etihad has also sought exemption from SEBI from making an open offer to Jet’s shareholders. Etihad also demanded a relaxation in preferential pricing norms stating that the fair price for Jet Airways shares should range between Rs 140 to 150 per share, far lower than the current market price.
State Bank of India (SBI), the country’s largest lender, has selected underwriters for an institutional share sale that could raise at least Rs 10,000 crore ($1.4 billion). The lender has picked Bank of America Corp., CLSA Ltd. and HSBC Holdings Plc to arrange the offeringThe fund raising will boost the capital of SBI who is looking to grow its loan assets. Credit growth in India’s banking system is rising at the fastest pace in five years after a cash crunch in 2018 curtailed new loans from shadow financiers.
Lenders have laid down strict lending regulations for the gold and diamond trade industry post the Nirav Modi-Mehul Choksi scam. SBI has imposed funding restrictions on borrowers for exports to countries other than USA and Europe and capped its exposure at Rs 1,000 crore per borrower. Borrowers would have to give an undertaking, that cut and polished stones are not procured from associate concerns or related parties, as a prerequisite to avail fund-based working capital finance. Also, all existing borrowers with outstanding of Rs 50 crore or more would have to convert partnership firms into corporates by December 2019.
Jet Airways, India’s second-largest carrier, defaulted on loan obligations last week and is under pressure to raise funds to avoid being classified as Non Performing Asset (NPA). Current lenders led by SBI have refused to infuse any further funds until they analyse the forensic audit report by EY on Jet’s business viability. Jet has repayment obligations of Rs 6,500 crore extending till March 2021, while its total debt stands at Rs 8,000 crore. Jet promoter Naresh Goyal, who holds 51%, may offload his stake to raise funds or the lenders may drag the airline into insolvency proceedings.
India’s largest bank, SBI, is expected to remain fully operational during the two-day bank strike called by ten central trade unions on January 8 and 9. SBI has 85,000 branches throughout the country. Few other PSBs are also expected to keep their shutters open despite the RBI employee unions along with a couple of bank employee associations (All India Bank Employees Association and Bank Employees Federation of India) lending support to the nationwide strike. 10 central trade unions calling the strike are INTUC, AITUC, HMS, CITU, AIUTUC, AICCTU, UTUC, TUCC, LPF and SEWA.
Jet Airways informed on Tuesday that it has defaulted on its interest and principal payments to a consortium of banks led by SBI due to a temporary cash crunch. The payment was due on December 31, 2018. The Indian airline sector has been severely impacted in 2018 by the weakening rupee, increased competition and a rise in fuel costs. Jet, who owes money to its pilots, vendors and lessors, is in talks with bankers on a rescue deal that may involve its second largest shareholder, Abu Dhabi based airline Etihad Airways, to increase its stake from 24%.
SBI account holders have three days before their magstripe debit and credit cards are permanently blocked. Following a mandate by the RBI to phase out old magstripe cards, the biggest lender in India has asked its customers to upgrade to EMV chip cards by December 31, 2018. The RBI notification states that all cards will have to be migrated irrespective of their validity by December 31, 2018. SBI is offering to replace old ATM cards for its users with the new EMV chip cards without any charges.
SBI Life Insurance Company stock showed an uptick amid news that US-based private equity The Carlyle Group and Singapore's sovereign wealth fund GIC will jointly buy a 10% stake in SBI Life Insurance Company from international insurer BNP Paribas Cardif. The total deal size is expected to be around Rs 5,100- 5,200 crore.The proposal for the stake sale deal is awaiting nod from the insurance regulator Insurance Regulatory and Development Authority (IRDA).