WASHINGTON: ‘ Regulators sue 2 companies making loans against pensions ‘

#AceFinanceNews – WASHINGTON (AP)Aug.20: Federal and New York regulators have sued two companies that make loans against retirees’ pensions, saying they deceived consumers about the high rates of the loans.

Regulators say that the companies, Pension Funding LLC and Pension Income LLC, used deceptive marketing tactics to target the pensions of seniors and military personnel. The U.S. Consumer Financial Protection Bureau and New York state’s Department of Financial Services filed the lawsuit against the companies in federal court in Santa Ana, California.

They say the companies tricked consumers into borrowing against their pensions by portraying the deals as sales instead of loans, and failing to disclose high interest rates and fees.

The business of so-called pension advance loans, which grew during the recession, has been under scrutiny by regulators in recent years. Targeting seniors hit hard during the economic downturn, the schemes can drive retirees deeper into debt, regulators say.

“We are working to put a stop to the illegal practices these companies are using to sell their bogus product to military veterans and other pensioners,” CFPB Director Richard Cordray said in a statement.

Pension Funding is based in Huntington Beach, California. Pension Income was based in Huntington Beach but relocated to Lafayette, California, according to the suit.

Attempts to reach the companies and the three managers also named in the suit for comment were unsuccessful. A number listed for Pension Funding was disconnected, and a listing for Pension Income couldn’t be found.

The suit alleges that the companies violated the 2010 law overhauling financial regulation after the financial crisis by misrepresenting the products as sales rather than loans, and failing to disclose high rates and fees for the loans. In some cases, the promoters implied to consumers that they could face criminal prosecution if they stopped making payments, the suit said.

The regulators are seeking unspecified fines and restitution against the companies.


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Iran Nuclear Deal to Boost Trade Between Tehran, Moscow

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#AceFinanceNews – Aug.20: The ratification of the nuclear deal between Iran and the group of international negotiators will boost trade between Moscow and Tehran, the head of the Iran-Russia Joint Chamber of Commerce told Sputnik Persian on Thursday.

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BP settlement money flows to governments in far-flung places

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#AceFinanceReport – BATON ROUGE, La. (AP):Aug.20: Clusters of landlocked municipalities more than 100 miles from the Gulf Coast have secured millions of dollars in BP money through settlements designed to compensate local governments for lost tourism dollars and other economic damage from the company’s 2010 oil spill, according to records obtained by The Associated Press.

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INDIA: ‘ Everything you need to know about India’s brand new payments banks ‘

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#AceFinanceReport – Aug.20: India will soon get its first set of payments banks, after the Reserve Bank of India (RBI) approved in-principle licenses for 11 applicants on Aug. 19.

These applicants now have 18 months to fulfill a list of requirements laid down by the RBI, before they can be granted a full license. In all, 41 firms and individuals had applied.

These payments bank will be allowed to accept deposits (of up to Rs1 lakh), provide payments and remittances services and distribute third-party financial products. But unlike regular banks, they won’t be allowed to lend or issue credit cards, although they can provide debit cards and internet banking facilities.

The underlying objective is to use these new banks to push for greater financial inclusion. Currently, almost 50% of Indians don’t have a bank account and only about 30,000 of India’s 5.94 lakh villages have a commercial bank branch. Much of this imbalance has to do with the inability of bigger banks to reach into the hinterland, even as other service providers, such as telecom operators, have made deep inroads.

In a statement, the RBI said that it has selected entities with experience in different sectors and with different capabilities so that various models could be tried.

“The committee of the central board did ensure that all the selected applicants have the reach and the technological and financial strength to service hitherto excluded customers across the country,” the central bank added.

Here is a complete list of India’s new payments bank license holders:

  1. Aditya Birla Nuvo: A part of the $41 billion Aditya Birla group, a conglomerate controlled by billionaire Kumar Mangalam Birla, the firm already has a presence in financial and telecom services. It has an asset management business, a private equity firm, and also offers non-banking financial services among others. The group’s telecom arm, Idea Cellular, already operates mobile wallet services. Last year, the firm had applied to the RBI for a banking license, but failed to get one.
  2. Airtel M Commerce Services: Airtel M Commerce, owned by telecom operator Bharti Airtel, also operates a mobile wallet service. On Aug. 4, the firm acquired YTS Solutions, a mobile payments startup, to help expand its offerings. It has partnered with Kotak Mahindra Bank to set up the payments bank, with Kotak intending to pick up a 19% stake in the company. Airtel, the Bharti group’s telecom service provider, might play an important role in helping the firm to penetrate rural markets.
  3. Cholamandalam Distribution Services: The firm is a subsidiary of Cholamandalam Investment and Finance Company (Chola), the financial services arm of Chennai-based Murugappa Group. Chola is already present in the financial services sector, where it operates over 534 branches providing financing across India and has Rs25,000 crore worth of assets under management.
  4. Department of Posts: India’s storied postal department was one of the applicants for a banking license last year, but the RBI didn’t oblige. With one of the largest postal network in the world, India Post has incredible access to the hinterland: About 90% of the 1.4 lakh post offices are located in rural areas. This reach itself gives the postal department the biggest advantage over other players.
  5. Fino PayTech: The business and banking technology platform provider operates India’s largest network of business correspondent. These correspondents helps lenders reach out to rural customers who don’t have easy access to bank branches. The firm is backed by marquee private equity firms like Blackstone and the World Bank’s IFC. India’s ICICI Bank also owns a stake in the company. “Currently, 90% of transactions are in cash and are estimated to be of multiple trillions; we believe there is a huge opportunity for payments banks to power these transactions electronically,” Rishi Gupta, managing director and CEO of Fino PayTech told the Mint newspaper after the licenses were announced.
  6. National Securities Depository Limited: NSDL is India’s first and largest depository, which handles most of the securities held and settled electronically in the Indian capital market. It is promoted by IDBI Bank, the Unit Trust of India and the National Stock Exchange. At least eleven public and private bankers own stakes in NSDL including State Bank of India, Deutsche Bank AG, HDFC Bank and Citibank, among others.
  7. Reliance Industries: Run by India’s richest person, Mukesh Ambani, RIL has tied up with the State Bank of India—the country’s largest lender—to set up a payments bank. RIL will hold 70% in the joint venture.
  8. Dilip Shantilal Shanghvi: Shanghvi, owner of Sun Pharma, had applied in his personal capacity. His personal investment firm, Dilip Shanghvi Family and Associates (DSA) is tying up with Telenor, the Norwegian telecom company and IDFC, a non-banking financial company that last year secured a full-service banking license.
  9. Vijay Shekhar Sharma: Sharma is the founder of India’s largest mobile payments company, Paytm. The firm—with investors including Chinese e-commerce giant Alibaba—last week announced that it has crossed 100 million users in India, with some 75 million transactions every month. The license will help the company to grow and provide a range of financial services to millions of Paytm users.
  10. Tech Mahindra: The IT services firm owns a mobile payments platform, MoboMoney, which operates a “tap and pay” system. Tech Mahindra is a part of the $16.5 billion Mahindra group, which has interests in financial services, automobiles, retail and real estate among others.
  11. Vodafone M-Pesa: A little over two years after telecom major Vodafone launched m-pesa, its money transfer service in India, it’s now secured a payments bank license. Sunil Sood, managing director and CEO of Vodafone said that the license will help the company to build on its payments and money transfer network across India.“With over 90,000 agents, we are already providing people in remote areas a convenient way to transfer money and make payments in a safe and secure manner,” Sood said.


Original Article: http://qz.com/483059/everything-you-need-to-know-about-indias-brand-new-payments-banks/

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BRITAIN: ‘ Co-operative Bank losses nearly treble in first half of 2015 ‘

#AceFinanceNews – Aug.20: LONDON (Reuters) – Britain’s Co-operative Bank has reported a nearly trebled first-half loss, reflecting reduced income, losses on the sale of assets and the rising cost of turning the business around.

The bank is battling to recover from its near-collapse in 2013, when it reported a 1.5 billion pound hole in its finances stemming from bad commercial real estate loans. It later suffered an exodus of top executives including former Chairman Paul Flowers, who left following a drugs scandal.

The crisis led to bondholders taking control of the bank, with its long-time owner, the mutual Co-operative Group, relegated to a minority holding.

The bank, the only UK lender to fail a stress test last year by Britain’s financial regulator, said it made a loss of 204 million pounds in the first half, compared with a 77 million loss in the same period the year before.

It booked a 38 million pound loss on asset sales and saw costs relating to its turnaround rise rising to 102 million pounds, on the back of investment in its systems and processes.

Co-operative Bank losses nearly treble in first half of 2015

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MARKETS: FTSE at seven-month low, miner Kaz surges

#AceMarketsNews -Aug.20: LONDON (Reuters) – Britain’s top share index fell to its lowest point since January on Thursday, weighed down by a drop in supermarkets and companies trading without entitlement to their latest dividend pay out.

However, there was relief for embattled miner Kaz Minerals, which surged 15 percent after Kazakhstan floated the tenge, sending the currency tumbling.

The mid-cap miner was set for its biggest one day gain since Kazakhstan devalued the tenge in February 2014.

The boost for the miner, which has about 45 percent of its cost base denominated in the currency, came as it reported that earnings more than halved in the first half, and that it would not pay an interim dividend.

A weakening tenge had also sent shares 6.4 percent higher on Wednesday. Despite the two-day rally, shares in Kaz remain down over 25 percent this year.

“We would expect local inflation and wage increase demands to offset the weaker currency to undo much of the localised benefit in the months ahead, as happened the last time the

Tenge devalued,” analysts at Investec Securities said in a note.

Britain’s FTSE 100 was down 23.33 points, or 0.4 percent, at 6,380.12 points by 0749 GMT, touching its lowest level since January.

The index is now over 10 percent below an all time high of 7,122.74 points hit in April.

Among top fallers in percentage terms were Mondi, British American Tobacco and Hammerson, all around 2 percent lower as they went ex-dividend.

Tesco dropped 1 percent to its lowest since Jan 8, while Sainsbury fell 0.5 percent. Both grocers are down around 4 percent since Tuesday, when peer Asda, owned by Wal-Mart reported a 4.7 percent slump in quarterly sales, raising renewed concern about the challenges that established supermarkets face from discounters.

Top risers on the FTSE 100 were miners with exposure to precious metals, such as Anglo American and Fresnillo.

They rose around 2 percent, benefitting from a rally in the price of gold to a 5-week high after minutes from the Federal Reserve’s policy meeting last month signalled that a hike in U.S. interest rates in September may be unlikely, cooling demand for the dollar, a fellow safe-haven asset.

(Reporting by Alistair Smout; Editing by Dominic Evans)

FTSE at seven-month low, miner Kaz surges

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Oil drillers hammered as US crude supplies continue to climb

#AceFinanceReport – NEW YORK (AP) Aug.20:Shares of the world’s biggest oil companies are tumbling to multi-year lows on new data showing that U.S. crude inventories continue to rise at a time of year when they are typically in decline.

Commercial inventories increased by 2.6 million barrels last week, according an Energy Information Administration report Wednesday, jolting energy analysts. Those analysts expected a decline of 1.2 million barrels, according to a survey by Platts.

The EIA says “U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.”

Oil prices are down about 50 percent over the last year. On Wednesday, crude prices fell to $40.80 a barrel in New York, their lowest close since March 2, 2009. Shares of Exxon Mobil, BP, Marathon Oil, Chevron and ConocoPhillips all slid to multi-year lows.

Marathon Oil Corp. suffered a 6.5 percent drop in afternoon trading. They recovered from a session low that took the shares to their lowest prices in six years.

Chevron Corp. shares lost about 2.7 percent and ConocoPhillips fell 3.5 percent, while Exxon Mobil Corp. declined 1.8 percent. All reached three- or four-year lows.

Energy companies invested heavily in drilling over the past few years, when the price of oil was generally over $100 a barrel. A combination of growing supplies and slow growth in the world economy weakened demand and made for a big drop in prices in the second half of 2014, a trend that’s resumed this summer. Energy companies have slashed jobs and curtailed drilling activity in response.

The Energy Information Administration said there were 456 million barrels in commercial inventories as of Friday. That total has fallen over the last few months, as it normally does, because refiners make more gasoline to meet driving demand in the summer.

Analyst Thomas Pugh of Capital Economics said the main reason for the increase in inventories was refinery outages for maintenance and other issues. He said oil production continues to drop and gasoline stocks fell more than expected, which shows demand is high.

“The bigger picture is one of strong demand for gasoline and falling oil output, which should give some support to prices over the rest of the year,” said Pugh. He expects oil to finish the year at $50 per barrel.

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