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Japan megabanks MOUs; Orix bank sale talks; India central bank surplus transfer

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Japan megabanks MOUs; Orix bank sale talks; India central bank surplus transfer

GREATER CHINA

* The People's Bank of China formulated detailed requirements for the loan prime rate mechanism and asked banks to use the LPR in setting the terms of at least 30% of new loans by end-September, the Securities Times reported. Banks should increase the proportion of such loans to 50% by the end of December and 80% by the end of March 2020, according to the central bank.

* Xiao Yuanqi, chief risk officer of the China Banking and Insurance Regulatory Commission, said some banks extended big loans to large-scale groups without doing customer due diligence or risk rating. In an article published in China Finance, a magazine directed by the country's central bank, Xiao said most of the risks stem from banks' management problems rather than the external business environment.

* The People's Bank of China on Aug. 26 injected 150 billion yuan to financial institutions via its one-year medium-term lending facility. The interest rate on the one-year loans remained at 3.3%.

JAPAN AND KOREA

* Japan's Financial Services Agency is considering differentiating the rate of deposit insurance for regional banks based on the risk of bankruptcy for each entity, The Kyodo News reported. The move comes amid a super low interest rate environment and is aimed at encouraging the restructuring of regional banks.

* Japan's three megabanks are expected to sign about 10 memorandums of understanding with African financial institutions at the 2019 Tokyo international conference on African development Aug. 28, The Nikkei reported. Data released by the Bank of Japan show that credit issued by Japanese banks to Africa doubled in 10 years to US$15.5 billion as of the end of March.

* Nomura Holdings Inc. unit Nomura Securities Co. Ltd. is exploring a business alliance with San-in Godo Bank Ltd. and its subsidiary, Gogin Securities Co. Ltd., to provide financial intermediary services to clients.

* Japan's ORIX Corp. has pulled out of talks to sell its 76.6% stake in South Korea's OSB Savings Bank due to reasons related to the pricing of the bank and required regulatory approvals, the Maeil Business Newspaper reported.

* South Korea's Samsung Asset Management Co. Ltd. said it dropped its merger plan with Franklin Templeton Investment Trust Management to create a new joint venture called Samsung Franklin Templeton in South Korea, The Korea Herald reported.

ASEAN

* Thanachart Capital PCL announced plans to buy back up to 97 million shares for up to 5 billion baht and declare a special dividend of 4 baht per share. The plans would help the company manage excess liquidity. The announcement came after the company's business restructuring, including the sale of its shares in Thanachart Bank PCL as part of the bank's planned merger with TMB Bank PCL.

* The Philippines' central bank plans to tighten rules governing a bank's loan exposure to conglomerates, the Philippine Daily Inquirer reported, citing sources in the banking industry. The central bank's planned circular would clarify the existing single borrower's limit, which caps a bank's total exposure to a single entity to 25% of the bank's net worth.

* Indonesian state lender PT Bank Rakyat Indonesia (Persero) Tbk plans to increase cooperation with fintech firms to boost lending to micro, small and midsize enterprises, Bisnis Indonesia reported, citing Supari, the bank's retail director.

* Malaysian RHB Bank Bhd. expects to complete the proposed sale of its 94.7% stake in RHB Insurance Bhd. to Tokio Marine Asia Pte Ltd. by March 31, 2020, Bernama reported. RHB Bank Group Managing Director Khairusalleh Ramli said the lender aims to file its plan with Malaysia's central bank by November.

SOUTH ASIA

* India's Bank of Baroda is planning to acquire about 60 billion rupees worth of assets from nonbanking financial institutions during the quarter ending Sept. 30, The Hindu Business Line reported, citing Papia Sengupta, executive director of the bank. For the potential transactions, the lender is in talks with Indiabulls Consumer Finance Ltd. and PNB Housing Finance Ltd., among others, according to an official.

* Allianz Life Insurance Lanka Ltd. appointed Nihal Handunge deputy CEO, Daily FT reported. He joined the company in December 2016.

* The Reserve Bank of India said it accepted the recommendation of the Bimal Jalan committee and will transfer 1.761 trillion rupees, including 1.234 trillion rupees of surplus for fiscal 2018-2019, to the government within the fiscal year.

AUSTRALIA AND NEW ZEALAND

* Analysts and bankers expect Australia's biggest banks to slash their dividends and boost their capital levels to satisfy tough capital requirements from regulators amid low interest rates, Reuters reported.

* Australian payments provider Cuscal Ltd. said PayID, a function of the industry-wide payments platform New Payments Platform, suffered a data breach that exposed the personal information and bank details of about 92,000 customers of a number of banking institutions, The Sydney Morning Herald reported.

* Australia's Treasury Department released proposed rules that would introduce penalties for mortgage brokers following recommendations by the country's royal commission into misconduct in the financial sector. Under the draft rules, lenders will be prohibited from giving commissions that may present a conflict of interest for brokers. Further, brokers may face duties of more than A$1 million if they do not provide services in the best interest of their clients.

* The Australian Financial Complaints Authority said it would start identifying financial institutions in its decisions published on its website to increase transparency. It has received approval from the Australian Securities and Investments Commission for the move.

IN OTHER PARTS OF THE WORLD

Middle East & Africa: FAB denies Qatari regulator's allegations; Fitch, S&P act on Lebanon

Europe: Credit Suisse to bolster Swiss unit; Allianz's Brazil deal; hiring freeze at AIB

Latin America: BancoEstado's Q2 profit soars 84.6%; BTG targeted in Lava Jato probe

North America: Verisk in deal; CFPB blasted over payday rule; Maine Harvest FCU gets charter

Global Insurance: Lufax exit plan; RBS, Santander hit over payment protection; Allianz Brazil buy

Zia Ullah Khan, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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