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Tag: money & banking

  • IRDAI reduces audit firm term to bolster audit quality

    IRDAI reduces audit firm term to bolster audit quality

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    Insurance regulator IRDAI’s new corporate governance guidelines have reduced the engagement period of statutory auditors with insurance companies. Audit firms now have a four-year term for joint statutory audits, followed by a mandatory three-year cooling-off period, according to the IRDAI’s Master Circular on ‘Corporate Governance for Insurers 2024’.

    During this cooling-off period, outgoing auditors and their affiliates are barred from undertaking investment risk management or concurrent audits of the insurer. Additionally, incoming auditors must not include any affiliates of the retiring auditor. Previously, audit firms could serve up to ten years, but the new rules ensure a fresh review of financial statements every four years to enhance audit quality and to reduce complacency.

    Commenting on latest IRDAI move,  Jaspreet Bedi, Partner, Nangia & Co LLP, said “the auditor refresh policy is to promote independence, impartiality, and integrity in the audit process.”

    The latest change on audit firm tenure enhances transparency and accountability by introducing new auditors at regular intervals of four years, preventing complacency, and maintaining rigorous financial reporting standards, Bedi said.

    ‘Very short’

    However, G Ramaswamy, former CA Institute President, said IRDAI’s move to introduce four year term is “very short” and needs to be enhanced to five or seven years. “Already the Companies Act provides for five years with reappointment for another five years. IRDAI should align it with five years as given in the Companies Act and then give a three-year cooling-off period ”, Ramaswamy told businessline.

    Already the Insurance Regulatory and Development Authority of India (IRDAI) guidelines stipulate a mandatory joint audit for all insurance companies.  In India, joint audits are currently mandatory for banks, public sector undertakings and insurance companies. 

    Meanwhile, under the latest master circular on corporate governance, IRDAI has stipulated that an audit firm should be entitled to carry out Statutory Audits of not more than three insurers (life/general/health/reinsurer) at a time. 

    Also it has been stipulated that an audit firm should not have the audit assignments of more than two insurers in one line of business (i.e life insurance, general insurance, health insurance and reinsurance) at a time.

    The latest IRDAI master circular also highlighted that existing audit firm appointments for period of five years would have to be continued.  

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  • HDFC Bank Q4 net profit grows to ₹17,622 crore

    HDFC Bank Q4 net profit grows to ₹17,622 crore

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    HDFC Bank on Saturday reported a 2.11 per cent growth in consolidated net profit to ₹17,622.38 crore for the March 2024 quarter against ₹17,257.87 crore in the preceding December quarter.

    On a standalone basis, the country’s largest private sector lender reported a net profit of ₹16,511.85 crore compared to ₹16,372.54 crore in the December quarter.

    In July 2023, the bank merged its home loan-focused parent HDFC into itself.

    Its core net interest income grew to ₹29,080 crore for the reporting quarter, while the other income grew to ₹18,170 crore.

    The lender has reported its core net interest margin of 3.44 per cent on total assets.

    The gross non-performing assets ratio came at 1.24 per cent.

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  • Government, multinational and international businesses, Yes Bank on the progress in FinTech sector during 10 years of NDA – Ajay Rajan, Country head, Yes Bank

    Government, multinational and international businesses, Yes Bank on the progress in FinTech sector during 10 years of NDA – Ajay Rajan, Country head, Yes Bank

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    Updated – April 09, 2024 at 10:08 PM.

    “India’s banking sector has been instrumental in elevating the country’s GDP from $250 Bn in the 1990s to $3.7 TN in 2023” – Ajay Rajan, Country head, Yes Bank

    How has tech changed some of the legacy practices in the sector and improved productivity?

    India is at the cusp of massive transformation in digital technology, both on the enterprise and consumer side. The scale of banking transactions has grown at a massive pace. For e.g. Indian banking coverage has increased from 27% in 2008 to 80% in 2017 and above 90% in 2023, all on the back of tsunami of digital revolution in India.

    While this exponential spurt of growth has led to massive business opportunity, it has also led to pressure on legacy banking infrastructure. This has been compounded with the advent of new public digital infrastructure and new emerging technologies. Legacy systems for many institutions has become monolithic, complex, and in some cases unstable.

    Most organizations have dealt with this phenomenon through a model of Retain, Transform or Drop. Old technology layers, monolithic middleware and duplicate systems are being dropped. Another dimension that technology has added towards productivity gains is ecosystem play.

    What do you see as driving the next wave of innovation in the tech space?

    India’s banking sector has been instrumental in elevating the country’s GDP from $250 Bn in the 1990s to $3.7 Tn in 2023. As the sector aims to support India’s grand vision of a $30 trillion economy by 2047, an estimated capital infusion of $2-2.5 trillion is required over the next two decades.

    Banks will play a crucial role in channelizing the savings, enabling inward remittances, and extending credit to corporates. Technology-led innovation will transform these 3 key pillars significantly: Distribution, Risk Management and Customer Experience.

    What are the three main challenges banks face with tech adoption and how has the industry coped with it?

    Make vs Buy Decision, Legacy Systems, Return on Investment, Platformification, Use of Micro Services, Blockchain Technology Adoption have been some of the challenges.

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  • Paytm users to get all services as before except for PPBL’s wallet, FASTag

    Paytm users to get all services as before except for PPBL’s wallet, FASTag

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    Paytm app users will continue to use all services like mobile and DTH recharges except for Paytm Payments Bank’s offerings including wallet funds, FASTag and bank accounts, according to the company hit by RBI restrictions.

    Also read: Three years since launch, has Paytm’s mini app store lived up to expectations?

    Paytm Payments Bank users will not be able to add any funds to their wallet and bank accounts but will be able to use the balance until it is exhausted, according to the RBI order.

    “The RBI has issued a directive restricting Paytm Payments Bank Account/Wallet from accepting new deposits or allowing credit transactions after March 15, 2024. Please note that you will not be able to deposit or add money to your Paytm Payments Bank Account/Wallet after March 15, 2024. However, there is no restriction on withdrawal of money from your existing balance even after March 15, 2024,” Paytm said in frequently asked questions (FAQ).

    The company has said that users can buy HDFC Bank FASTags and also recharge FASTags of other partnered banks on the Paytm app but cannot purchase Paytm Payments Bank FASTags.

    However, the balance left in the Paytm Payments Bank FASTags can be used until it is exhausted.

    “All other services on the Paytm app, including movies, events, travel (metro, flight, train, bus) ticket bookings and more, remain fully operational. Users can continue to recharge their mobile phone, DTH or OTT subscriptions and pay all utility bills (electricity, water, gas, internet) with ease directly through the Paytm app,” the company said.

    Paytm app users can continue to use UPI service as NPCI has approved collaboration of the firm with four banks-SBI, HDFC, YES Bank and Axis Bank.

    Paytm will work as a third-party app (TPAP) and facilitate UPI transactions through the partner bank. It has got five handles in partnership with four banks to continue UPI transactions, as per an update on the NPCI website.

    The company’s existing handle @paytm is among the five handles that users can continue using without the need to make any changes at their end.

    National Payments Corporation of India (NPCI) has approved @paytm and a closed user group UPI handle @ptyes for Paytm in partnership with Yes Bank.

    NPCI has also approved @pthdfc with HDFC bank and @ptsbi with State Bank of India as a partner. However, these two handles are not active immediately.

    A Paytm spokesperson said users can continue to use @paytm handle seamlessly without the need to make any changes at their end.

    The company has suggested merchants to switch from PPBL bank accounts to any other bank in which they want to accept money from customers.

    Also read: Paytm ready for all options for bank’s survival, including acquisition

    “Paytm QR codes, Soundbox and card machines also remain fully operational. This ensures continued convenience for millions of users and merchants who rely on these services for their daily transactions,” the company said.

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