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China offers cheap liquidity to banks; Thai bank gets merger offers

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week. Please note that some entries may have links to third-party sources that may require a subscription.

Regulatory, legal developments

* China's central bank is creating a so-called targeted medium-term lending facility, which will lend funds to qualifying banks for up to three years based on the growth in their loans to small and private companies.

* India's central bank may lift lending restrictions for about 4 of 11 banks under a prompt corrective action framework if there is sufficient capital injection. The central bank's board is scheduled to meet again in mid-January 2019.

* The Bombay High Court denied interim relief to Kotak Mahindra Bank Ltd. over the Indian central bank's instructions for the bank to dilute its promoter shareholding to below 20% by Dec. 31.

* The Australian Prudential Regulation Authority said it will lift the limit on interest-only residential mortgage lending for banks, effective Jan. 1, 2019.

* Separately, APRA granted a restricted banking license to digital-only lender Xinja Bank Ltd. It also authorized China Everbright Bank Co. Ltd. as a foreign authorized deposit-taking institution.

* On the monetary policy front, Bank of Japan's policy board voted 7-2 to maintain its short-term interest rate at negative 0.1%. The Bank of Thailand decided to raise the policy rate to 1.75% from 1.50%, effective Dec. 19.

M&A corner

* Thailand's TMB Bank PCL received merger proposals from local financial institutions, including Thanachart Bank PCL and Krung Thai Bank PCL.

* U.S.-based Carlyle Group LP is reportedly looking to acquire Punjab National Bank's stake in PNB Housing Finance Ltd., a move that would give the private equity firm a controlling stake in the housing finance firm.

* India's IDFC Bank Ltd. and Capital First Ltd. completed its merger, with the combined entity named IDFC First Bank Ltd.

* Taiwan's CDIB Capital Group sold a stake in Taiwan Stock Exchange Corp. worth NT$958.3 million to Jih Sun Securities Co. Ltd.

* City Savings Bank Inc. and Union Properties Inc. completed the acquisition of a 51% stake in PETNET Inc. for 1.20 billion pesos in cash.

* Kuwait-based Noor Financial Investment Co. is in talks with foreign institutional investors to sell part of its 39.53% stake in Pakistan's Meezan Bank Ltd.

Expansions, closures and more

* RHB Investment Bank Bhd. obtained approval from Malaysia's central bank to set up a subsidiary in Vietnam.

* Bank of Chongqing Co. Ltd. and China CITIC Bank Corp. Ltd. plan to set up separate wealth management units.

* India's Bank of Baroda decided to shut down three of its overseas branches by June 30, 2019, in Guyana, Ghana and Trinidad and Tobago.

* South Korea's BNK Financial Group Inc. plans to launch a new group investment banking unit in January 2019.

* Vietnam International Commercial Joint Stock Bank moved its headquarters to Ho Chi Minh from Hanoi, effective Dec. 17.

In other news

* India's government proposed to infuse an additional 410 billion rupees into some of the weakest state-run banks in the fiscal year ending March 31, 2019, as it sought to help them emerge from the central bank's prompt corrective action framework.

* The Reserve Bank of New Zealand's recent proposal of raising capital requirements for banks is credit positive, as it will boost banks' resilience to potential shocks, Moody's said.

* National Australia Bank Ltd. will scrap its revised executive pay structure, as shareholders voted down its remuneration report.

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