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India regulator fines 36 banks; CBA delays wealth demerger

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 and legal matters

* The Reserve Bank of India imposed fines totaling 710 million rupees on 36 banks over their failure to comply with directives on SWIFT-related operational controls. The central bank imposed the fines after conducting a compliance assessment on the implementation and strengthening of SWIFT-related operational controls of 50 major banks.

* Separately, India's central bank fined Corporation Bank 10 million rupees for its failure to comply with one of the four compensatory controls to do on a real-time basis.

* Hong Kong's Securities and Futures Commission barred UBS Group AG unit UBS Securities Hong Kong Ltd. from sponsoring IPOs in the city for one year, as well as reprimanded and fined it and Morgan Stanley unit Morgan Stanley Asia Ltd., Bank of America Corp. unit Merrill Lynch Far East Ltd. and Standard Chartered Securities (Hong Kong) Ltd. for failing their duties as sponsors in three new listings as far back as 10 years ago.

* Rizal Commercial Banking Corp. filed a defamation suit against Bangladesh Bank for what the Manila-based lender said are baseless allegations regarding its involvement in a US$81 million cyber theft in 2016, The Philippine Star reported. RCBC refuted Bangladesh central bank's allegations that it played a premeditated role in the heist, which cost the central bank US$81 million.

Restructuring plans

* Commonwealth Bank of Australia decided to delay the planned demerger of its wealth management and mortgage broking businesses to focus on remediating past issues and refunding customers after an investigation into the financial industry shed light on misconducts. The bank, however, reiterated that it is still committed to ultimately exiting its wealth management and mortgage broking businesses.

* Philippines-based Metropolitan Bank & Trust Co. plans to absorb wholly owned subsidiary Metrobank Card Corp. The merger is subject to shareholder and regulatory approvals.

* IDBI Bank Ltd. plans to streamline its banking and insurance businesses following its acquisition by Life Insurance Corp. of India, the Press Trust of India reported. The bank is looking to take advantage of synergies by collaborating on the sale of LIC's short-term policies and management of premium receipts at its branches.

Monetary policy developments

* Bangko Sentral ng Pilipinas' new governor, Benjamin Diokno, indicated that the central bank could cut the reserve requirement ratio for Philippine banks as the ratio "very high" and could be cut over the next four quarters by about 1 percentage point each quarter.

* People's Bank of China Governor Yi Gang said the central bank has less scope to cut banks' reserve requirement than in past years. China's overall reserve ratio requirement for banks is on par with other developed economies such as the U.S. and Europe when taking into account the weighted average reserve ratio and the excess reserve ratio, Yi said.

In other news

* The Australian government has decided not to prohibit trail commissions on new mortgage loans, a key recommendation from the recently concluded royal commission into financial services industry. The government will conduct a review in the next three years to see if trail commissions should be kept.

* Mizuho Bank Ltd. will further increase its stake in IBJ Leasing Co. Ltd. by acquiring 648,000 additional shares of the company.

* Japan Post Bank Co. Ltd.'s increase in deposit limit is credit positive for Japanese rated regional banks, but credit negative for the lender itself, Moody's said. The rating agency said the higher deposit limit could slow Japanese regional banks' deposit growth, which is credit positive.

* Citigroup Inc. is set to launch an electronic foreign exchange pricing and trading platform in Singapore in the fourth quarter. The platform will initially offer 23 spot currencies and two precious metals.

* Sri Lanka's Hatton National Bank Plc partnered with Infosys Finacle to pilot a blockchain-based trade finance network, which will allow for the instant transfer of messages and documents between parties in a secure manner.

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