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China cuts reserve ratio; Axis Bank stake sale delayed; India holds rates steady

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China cuts reserve ratio; Axis Bank stake sale delayed; India holds rates steady

GREATER CHINA

* The People's Bank of China will lower the required deposit reserve ratio for some lenders by 1 percentage point, effective Oct. 15, Xinhua News Agency reported, citing a same-day statement. The reserve requirement ratio cut will release a total of 1.2 trillion yuan, 450 billion yuan of which will be used to pay back a maturing medium-term lending facility. The remaining 750 billion yuan will be injected into the market.

* China's central bank said the country's foreign exchange reserves dropped US$22.69 billion in September to US$3.087 trillion, compared with a decline of U$8.23 billion in August, Reuters reported. This is the biggest drop in reserves since February, the report said.

* Hong Kong's Financial Secretary appointed Agnes Chan Sui-kuen a nonexecutive director of the Securities and Futures Commission for a two-year term, beginning Oct. 20.

* Fitch Ratings plans to withdraw Taiwan-based KGI Bank Co. Ltd.'s ratings on or around Nov. 5 for commercial reasons. Currently, KGI Bank has long- and short-term foreign-currency issuer default ratings of BBB and F3, respectively, with a stable outlook.

JAPAN AND KOREA

* Japan's Financial Services Agency slapped Suruga Bank Ltd. with a six-month partial business suspension over its irregular loans, The Asahi Shimbun reported. The penalty includes a ban on new real estate loans.

* South Korea's Hanwha General Insurance Co. Ltd. is collaborating with SK Telecom Co. Ltd. to set up an online insurance company, The Chosun Ilbo reported. The insurer will apply for a preliminary license from the Financial Services Commission.

* Bank of Korea Governor Lee Ju-yeol affirmed the central bank's right to make monetary policy decisions without political interference ahead of its monetary meeting scheduled for Oct. 18, Yonhap News Agency reported. The comment comes after some high-ranking government officials called for a rate hike to cool down the overheated real estate market.

ASEAN

* The Bank of Thailand's measures to tighten credit underwriting standards in mortgage loans are credit positive as they will help curb speculative buying and require lenders to focus on borrowers with better credit quality, Moody's said. Effective Jan. 1, 2019, the central bank will impose an 80% loan-to-value limit on loans for purchases of new homes worth more than 10 million baht.

* Thailand's Office of Insurance Commission will launch an insurance scheme for domestic corn crops, the country's Krungthep Turakij reported. Currently, 11 insurance companies expressed interest in taking part in the scheme, which will be proposed to the Thai cabinet for consideration.

* Manila-based BDO Unibank Inc. said its online banking, mobile banking and point-of-sale services were restored after customers reported problems with the lender's ATMs and with accessing its electronic channels, ABS-CBN News reported, citing a company statement.

SOUTH ASIA

* The Indian government decided to postpone the sale of a stake in Axis Bank Ltd. due to a weak stock market, The Economic Times reported, citing market sources. The government initially planned to divest up to a 4% stake in Axis Bank by early November and sought to raise about 70 billion rupees through the sale.

* The Reserve Bank of India kept its repo rate unchanged at 6.50% in a 5-1 vote, but signaled that it might raise rates in the future. It also held its reverse repo rate steady at 6.25% and maintained the marginal standing facility and the bank rates at 6.75%.

* India's central bank, in consultation with the government and the Securities and Exchange Board of India, proposed a separate channel named Voluntary Retention Route to allow overseas portfolio investors to invest in debt markets in India. The channel is aimed at bringing long-term and stable foreign portfolio investments into debt markets while providing investors with operational flexibility to manage their investments.

* Indian e-commerce company Flipkart India Pvt. Ltd. was granted a corporate agent license, Press Trust of India reported, citing a statement. Flipkart teamed up with Bajaj Allianz General Insurance Co. Ltd. to provide customized insurance products to power its mobile phone protection program for mobile phone brands sold on its platform.

* The Indian government named Rakesh Sharma managing director and CEO of IDBI Bank Ltd. for a six-month period. Sharma was previously managing director and CEO of Canara Bank.

AUSTRALIA AND NEW ZEALAND

* Australia & New Zealand Banking Group Ltd. said additional charges for customer compensation of A$374 million, amortization of certain software assets worth A$206 million, restructuring charges of A$104 million and external legal costs related to the royal commission of A$55 million would affect its cash profit for fiscal 2018. The bank expects the impact of the additional charges on its common equity Tier 1 capital position compared with the first half to be less than 10 basis points.

* The CEOs of ANZ, Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. will appear before the government's ongoing parliamentary banking inquiry, The Sydney Morning Herald reported. The public grilling may scrutinize the causes of cultural problems and the measures to ensure accountability for the scandals being uncovered by the royal commission, the publication said.

* The Australian Securities and Investments Commission and the U.S. Commodity Futures Trading Commission entered into an arrangement to collaborate and support innovation through each other's financial technology initiatives, the Australian regulator's Innovation Hub and the U.S. regulator's LabCFTC. The arrangement will allow both parties to share information on fintech market trends and developments, among other things.

R Sio, Sally Wang, Jonathan Cheah, Jaekwon Lim and Santibhap Ussavasodhi contributed to this report.

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