Core Insights - India's largest corporations are heavily indebted, with significant borrowings fueling their growth and expansion [3][4] Company Debt Overview - HDFC Bank has the highest debt at ₹6.207 trillion [4] - State Bank of India (SBI) follows closely with ₹6.11 trillion [4] - Reliance Industries holds a debt of ₹3.47 lakh crore (₹3.47 trillion) [4] - NTPC's debt stands at ₹2.596 trillion [4] - ICICI Bank has a debt of ₹2.225 trillion [4] - Axis Bank's debt is recorded at ₹2.2 trillion [4] - Bharti Airtel carries a debt of ₹2.105 trillion [4] - ONGC's debt amounts to ₹1.912 trillion [4] - Tata Motors has a debt of ₹770.7 billion [4] - LIC is noted as debt-free, indicating a unique position among these giants [3]

Core Viewpoint - Indian banks are expected to report muted earnings and loan growth for the September quarter, reflecting a slowdown in both retail and corporate segments over the past two quarters [7]. Loan and Deposit Growth - Analysts estimate system-wide loan and deposit growth at around 9-10% [6][7]. - The largest State Bank of India is expected to have a loan growth of 11% in Q2FY26, down from 15.3% a year ago, while deposits for SBI are seen growing 9.1% in the September quarter, unchanged from the previous year [7]. - HDFC Bank's advances rose 9.9% year-on-year to ₹27.69 lakh crore at the end of September, while deposits grew 12.1% to ₹28 lakh crore [7]. Net Interest Margin (NIM) - NIM is expected to decline around 10 basis points sequentially in Q2FY26 for most banks, with expectations of NIM at 2.4% for SBI in Q2, down from 2.7% a year ago [6][7]. - HDFC Bank's NIM is projected to compress to 3.1% from 3.3% in the year-ago period [7]. - NIMs are expected to contract by 4-18 basis points in the September quarter as the full effect of repo rate cuts in June comes into play [6][7]. Profit After Tax (PAT) - For the banking system, IIFL Capital expects PAT to de-grow by 11% year-on-year due to NIM contraction, lower trading gains, and operating expense pick-up [6][7]. - SBI's profit after tax is expected to slow down to ₹15,230 crore in Q2, from ₹18,330 crore a year ago [7]. - HDFC Bank's PAT is expected to grow to ₹16,400 crore versus ₹16,800 crore in the year-ago period [7]. Treasury Gains and Operating Expenses - Treasury gains are likely to be weaker due to rising bond yields, which will weigh on valuations [6][7]. - A pick-up in operating expenses is expected, with growth likely to remain contained at 8% year-on-year, but a higher quarter-on-quarter increase is anticipated for certain banks [6][7]. Asset Quality and Credit Costs - Asset quality trends, particularly in the SME and commercial vehicle segments, will remain key areas to watch [7]. - Unsecured retail stress shows early signs of easing, but challenges persist in cyclical sectors like commercial vehicle loans and MSMEs, with credit costs expected to normalize in the second half of FY26 [7].

Core Insights - The digital payments industry is transitioning from one-time passwords (OTPs) to biometric-based authentication and passkeys to enhance transaction success rates and security [11][10][8] Industry Overview - OTPs have been associated with delivery issues leading to transaction failures, while biometric authentication is expected to improve transaction rates significantly [11][7] - Major banks in India operate at a success rate of 93-95% on the Unified Payments Interface (UPI), with business declines and technical declines being the primary reasons for transaction failures [11][12] Technological Advancements - Biometric authentication and passkeys are seen as effective solutions to reduce friction points in card transactions, which often lead to failures [5][11] - Visa's Payment Passkey utilizes a hardware-protected private key paired with a public key, minimizing reliance on telecom networks and enhancing security against phishing attacks [5][6] Cost Efficiency - The shift to biometric authentication is expected to significantly reduce the costs associated with sending OTPs, as the SMS delivery leg will be bypassed [7][6] - The digital payments industry processes billions of transactions monthly, indicating a substantial cost-saving potential with the new authentication methods [7][11] Regulatory Changes - The Reserve Bank of India (RBI) has issued new guidelines mandating that all digital payments must be verified using at least two factors of authentication, which can include biometric methods [12][10] - These guidelines aim to adopt more risk-based authentication models in response to increasing fraud instances in online payments [10][12]

Market Overview - Indian benchmark indices ended the week with gains of 1.6%, supported by strength in IT and healthcare stocks. The Nifty closed 103.55 points, or 0.41%, higher at 25,285.35, breaking out of a recent consolidation range [1][19]. Earnings Reports - Over 200 BSE-listed companies are set to announce their September quarter results this week, including major players like HCL Technologies, Tech Mahindra, Axis Bank, HDFC Life Insurance, Infosys, Nestle India, Wipro, JSW Steel, Reliance Industries, HDFC Bank, ICICI Bank, and UltraTech Cement [2][19]. - Non-Nifty companies such as IDFC First Bank, Yes Bank, Indian Railway Finance Corporation (IRFC), IndusInd Bank, and HDB Financial Services are also expected to report results [5][19]. - The market will react to DMart's earnings announced on Saturday [6][19]. Market Influences - U.S. President Donald Trump's threat to impose additional 100% tariffs on China may impact Asian markets, including India, following China's aggressive export curbs on rare earth minerals [7][19]. - U.S. equities fell sharply on Friday, with the Dow Jones Industrial Average down 878.82 points (1.90%), the S&P 500 down 182.60 points (2.71%), and the Nasdaq Composite down 820.20 points (3.5%) [8][19]. IPO Activity - The primary market is expected to remain quiet, with only one new mainboard IPO, Midwest, opening for subscription. Bidding will conclude for three ongoing mainboard issues and three SME offerings [9][19]. - Anticipated listings include Tata Capital and LG Electronics, scheduled for Monday and Tuesday, respectively, along with eight other companies set to debut during the week [9][19]. Corporate Actions - Key corporate actions include the record date for the 1:10 stock split of Tata Investment Corporation and the rights issue of Utkarsh Small Finance Bank on October 14, and the interim dividend of Rs 11 per share for Tata Consultancy Services (TCS) on October 15 [10][19]. Institutional Activity - Foreign institutional investors (FIIs) were net buyers last week, purchasing equities worth Rs 3,603 crore over five sessions, with Friday's purchases totaling Rs 459.20 crore [11][19]. - Domestic institutional investors (DIIs) also turned net buyers at Rs 8,391.2 crore for the week, with Friday's purchases amounting to Rs 1,707.83 crore [11][19]. Technical Analysis - Nifty formed a sizable bullish candle with a higher high and higher low on the weekly chart, indicating a continuation of the uptrend. The index closed above its short-term moving averages, retracing over 80% of its previous decline [12][19]. - The index is expected to maintain a positive bias, potentially heading towards 25,450, with further upside towards the June 2025 high of 25,670 if it moves above 25,450 [13][19]. Currency and Commodities - The Indian rupee closed stronger at 88.6850 against the U.S. dollar, compared to 88.7825 in the previous session, aided by RBI intervention [14][19]. - Brent and U.S. crude futures fell sharply, with U.S. WTI crude settling at $58.24 (down $3.27 or 5.32%) and Brent futures around $62.73 (down $3.13 or 4.80%) [16][19]. Investment Trends - With Diwali approaching, there is rising investor interest in gold and silver, while equities have seen pressure, with net inflows into equity mutual funds declining for a second straight month to Rs 30,422 crore in September, a 9% drop from August [17][19]. - In contrast, record sums were poured into gold exchange-traded funds (ETFs), with inflows rising fourfold to Rs 8,363 crore, marking the highest-ever monthly inflow for the category [18][19].

Core Insights - The Reserve Bank of India's draft guidelines on the Expected Credit Loss (ECL) framework and revised credit risk capital norms represent a significant evolution in India's banking regulation, aiming to align with global best practices in credit risk modeling and provisioning discipline [1][12] - All scheduled commercial banks will transition to a model-based provisioning system starting April 2027, with a phased implementation through FY2032 [1][12] - The new framework introduces a three-stage classification of assets—performing, underperforming, and credit-impaired—along with model-driven provisioning based on probability of default (PD), loss given default (LGD), and exposure at default (EAD) [2][12] Banking Sector Implications - Regulatory floors for provisioning, such as 0.25–1.25% for Stage 1 and 25–100% for Stage 3 assets, are designed to prevent under-provisioning and ensure consistency across lenders [2][12] - Stronger private lenders, equipped with robust data infrastructure and capital buffers, are better positioned for the transition, while public sector banks have improved balance sheets and provision coverage compared to previous credit cycles [5][12] - The RBI's overhaul of risk weights for various exposures will reshape capital allocation, with lower risk weights for affordable housing (20–40%) and rated MSMEs (down to 85%) to enhance credit flow to priority segments [6][12] Future Outlook - The combination of ECL-based provisioning and risk-sensitive capital norms is expected to enhance the stability and credit discipline of the banking system, fostering greater investor confidence and a more resilient financial sector [7][12] - HDFC Bank is anticipated to experience a healthy growth recovery post FY25, driven by corporate lending and retail portfolio expansion, despite near-term pressure on net interest margins (NIMs) [8][9][12] - State Bank of India (SBI) shows diversified growth across retail, SME, and corporate segments, with improved asset quality (GNPA at 1.8% and provision coverage at 79%), positioning it well for the ECL transition [10][11][12]

Stock market: Dalal Street witnessed strong momentum last week as the combined market capitalisation of eight of India's top 10 most-valued companies rose by Rs 1.94 lakh crore, reflecting renewed investor optimism.Tata Consultancy Services (TCS) emerged as the biggest gainer, while Hindustan Unilever and Life Insurance Corporation of India (LIC) saw declines in their valuations, PTI reported.The benchmark BSE Sensex rose 1,293.65 points, or 1.59%, last week, mirroring the overall positive momentum in equit ...

Core Insights - The combined market valuation of eight of the top-10 most valued firms increased by Rs 1,94,148.73 crore last week, driven by a positive trend in the stock market [7] - TCS emerged as the biggest gainer, adding Rs 45,678.35 crore to its market valuation, which reached Rs 10,95,701.62 crore [7] - The BSE benchmark index surged by 1,293.65 points or 1.59% during the same period [7] Company Valuations - HDFC Bank's market valuation surged by Rs 25,135.62 crore, reaching Rs 15,07,025.19 crore [7] - Infosys saw an increase of Rs 28,125.29 crore in its valuation, bringing it to Rs 6,29,080.22 crore [2][7] - Bharti Airtel's market valuation jumped by Rs 25,089.27 crore to Rs 11,05,980.35 crore [4][7] - Reliance Industries' market capitalisation climbed by Rs 25,035.08 crore to Rs 18,70,120.06 crore [5][7] - Bajaj Finance's market capitalisation rallied by Rs 21,187.56 crore to Rs 6,36,995.74 crore [7] - State Bank of India's valuation increased by Rs 12,645.94 crore to Rs 8,12,986.64 crore [7] - ICICI Bank's valuation rose by Rs 11,251.62 crore to Rs 9,86,367.47 crore [6][7] Declines in Valuation - The market capitalisation of LIC decreased by Rs 4,648.88 crore, resulting in a valuation of Rs 5,67,858.29 crore [6][7] - Hindustan Unilever's valuation declined by Rs 3,571.37 crore to Rs 5,94,235.13 crore [6][7]

Core Viewpoint - Banks in India will be closed for multiple days between October 13 and October 19, 2025, due to the festive season, including holidays for Diwali and other regional festivals [1][2]. Group 1: Bank Holidays Overview - In total, banks will close for up to 21 days in October 2025 due to official holidays such as Diwali, Maha Ashtami, Dussehra, Durga Puja, and Chhat Puja, along with weekly offs [2]. - The Reserve Bank of India (RBI) mandates bank holidays on the second and fourth Saturdays of each month, as well as all Sundays [2][7]. Group 2: Specific Holidays - On October 18, banks will be closed in Guwahati for Kati Bihu, and on October 19, they will be closed nationwide for the Sunday weekly off [5][6]. - Additional closures include: - October 20: Banks closed in multiple cities for Diwali and related festivals - October 21: Banks closed for Diwali Amavasya - October 22: Banks closed for various Diwali celebrations - October 23: Banks closed for Bhai Bij and other festivals - October 25 and 26: Nationwide closures for weekly offs [6]. Group 3: Banking Services During Holidays - Online and mobile banking services, including IMPS, NEFT, RTGS, and UPI, will remain operational during bank holidays [4][8]. - ATM services will also be available for cash withdrawals on bank holidays [4][8].

Core Insights - Slice Small Finance Bank offers a competitive interest rate of 5.5% on savings accounts for deposits below ₹1 lakh, which is the highest among banks and small finance banks in India [1][11] - The Reserve Bank of India (RBI) repo rate is currently at 5.5%, and Slice Small Finance Bank claims to offer savings account interest rates at 100% off this rate [2][12] - The bank's ability to maintain this interest rate is attributed to its low operating costs through technology and efficient lending practices [4][12] Interest Rate Comparison - The interest rates offered by Slice Small Finance Bank (5.5%) significantly exceed those of other banks, which typically offer rates between 2.5% and 3% for deposits up to ₹1 lakh [11] - For balances above ₹1 lakh, other banks may offer interest rates up to 8%, indicating that Slice Small Finance Bank does not maintain the highest rates for larger deposits [5][12] Impact of RBI Repo Rate - The RBI repo rate influences overall interest rates on bank deposits; a reduction in the repo rate generally leads to lower interest rates on savings accounts due to competitive pressures among banks [8][12] - The current RBI repo rate has remained unchanged during the September-October Monetary Policy Committee meeting, which may stabilize interest rates in the near term [2][12] Digital Banking Features - Slice Small Finance Bank, previously known as North East Small Finance Bank, emphasizes a fully digital banking experience, allowing customers to open and manage savings accounts through a mobile app [9][10][12]

Core Insights - Indian equities experienced a significant rise, primarily driven by strong performances in the banking and pharmaceutical sectors, alongside positive foreign fund inflows [5][6]. Market Performance - The BSE Sensex increased by 328.72 points or 0.40% to close at 82,500.82, reaching an intraday high of 82,654.11 with a maximum gain of 482.01 points or 0.58% [3]. - The NSE Nifty rose by 103.55 points or 0.41% to settle at 25,285.35, achieving an intraday high of 25,330.75 with a peak increase of 148.95 points or 0.59% [3]. Sector Performance - Major gainers among Sensex firms included State Bank of India, Maruti Suzuki India, Axis Bank, NTPC, BEL, Adani Ports, Sun Pharmaceuticals, and HDFC Bank [4]. - Conversely, laggards included Tata Steel, Tata Consultancy Services, Tech Mahindra, Titan, and Bajaj Finance [4]. Investor Sentiment - Investor sentiment improved following the Indian government's invitation for private sector professionals to lead the State Bank of India, which positively impacted banking stocks [5]. - The revival of the Biosecure Act in the US, aimed at reducing biotech ties with certain foreign firms, particularly from China, provided a boost to Indian Contract Development and Manufacturing Organizations (CDMOs) [5]. Foreign Investment - Foreign Institutional Investors (FIIs) purchased equities worth ₹1,308.16 crore on Thursday, indicating strong foreign interest in the Indian market [6]. Global Market Context - In the broader Asian market, indices such as Hong Kong's Hang Seng, Tokyo's Nikkei 225, and Shanghai's SSE Composite ended lower, while Seoul's Kospi closed positively [6]. - The global oil benchmark Brent crude saw a slight decline of 0.63% to $64.81 per barrel [7].