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China to cut banks' provision ratio; new developments in US$2B India fraud case

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China to cut banks' provision ratio; new developments in US$2B India fraud case

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.

Frauds, fines and more in India

* India's central bank may give Punjab National Bank up to one year to make provisions against the US$2 billion fraud case it is embroiled in.

* Meanwhile, India's Central Bureau of Investigation filed a new case against jeweler Nirav Modi for allegedly colluding with several others to defraud Punjab National Bank through different loans between 2013 and 2017.

* Earlier, the bureau arrested Punjab National Bank's former internal chief auditor in connection with the US$2 billion fraud case.

* The Reserve Bank of India imposed a penalty of 4 million rupees on State Bank of India for failing to comply with the central bank's directions on the detection and impounding of counterfeit notes.

* Separately, the Indian central bank fined Axis Bank Ltd. and Indian Overseas Bank an aggregate of 50 billion rupees for violating regulatory rules.

Regulatory, legal developments in other parts of Asia-Pacific

* China's banking regulator reportedly plans to cut banks' loan-loss provision ratio to as low as 120% from the current 150%. The regulator also intends to relax the minimum ratio of provisions to total loans to 1.5% from 2.5%.

* Australia's banking regulator is considering lifting a limit on investor credit amid a slowdown in lending and falling property prices.

* The Australian corporate watchdog detailed more than 80 instances where Commonwealth Bank of Australia employees colluded on their daily plans regarding the benchmark interest rate to the benefit of the bank.

* South Korean prosecutors are dropping their case against KEB Hana Bank for offering preferential loans to the daughter of Choi Soon-sil, the confidante of former President Park Geun-hye.

* Prosecutors arrested an employee of South Korea's KB Kookmin Bank over allegations of hiring irregularities

Deal news

* Malayan Banking Bhd., or Maybank, secured approval from the Monetary Authority of Singapore for its planned acquisition of Singapore Unit Trusts Ltd. from Permodalan Nasional Bhd.

* Taiwan's Cathay Financial Holding Co. Ltd. and South Korea's Shinhan Financial Group Co. Ltd. are said to be interested in acquiring a stake in PT BFI Finance Indonesia Tbk.

* Bangladesh's state-owned banks and Investment Corp. of Bangladesh, or ICB, will acquire a 60% stake in troubled Farmers Bank Ltd.

IPOs and share sales

* India's Bandhan Bank Ltd. set the price range for its proposed IPO after obtaining regulatory approval for the offering.

* Vietnam Technological and Commercial Joint Stock Bank, or Techcombank, is looking to raise at least US$162.7 million through the sale of treasury shares to foreign investors and plans to pursue an IPO in 2018.

* HDFC Bank Ltd. plans to raise up to US$2.5 billion through the sale of equity shares. The Indian bank is likely to launch the share sale in mid-March, subject to regulatory approval.

In other news

* National Australia Bank Ltd. is conducting an internal probe into its mortgage introducer program ahead of an inquiry by the financial services royal commission.

* Commonwealth Bank of Australia lowered its daily cash ATM deposit limit for personal and business accounts to A$10,000 as part of anti-money laundering efforts.

* Separately, CBA expects to refund A$16 million to customers it sold credit insurance products to when those customers may not have been eligible to make claims.

* State Bank of India, United Bank of India and IFCI Ltd. invited bids for bad loans worth a total of more than 163.49 billion rupees.

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