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Morning Briefing

Morning Briefing

Britain is embracing its bankers. The more congenial tone set by the Tory government in dealing with the banks appears, to some extent at least, to have been adopted by regulators. Yesterday, the Prudential Regulation Authority (PRA) gave details of how the ring-fencing of retail banks from investment operations will operate in practice.

And it's not too bad if you're a banker. For a start, the PRA said the ring-fenced entities should be able to pass excess capital to their parent companies as dividends, and they will be allowed to cross-sell products and lend to other parts of the group — in this case the other parts of the group must, however, be treated like any other third party.

The extra capital that ring-fenced banks must hold as a buffer will be announced by the Bank of England's Financial Policy Committee in May. Separately, regulators have rowed back on the reverse burden of proof policy that would have seen senior bankers held accountable for wrongdoing unless they could prove they didn't know about it.

HDFC Bank in India is to roll out small loans through its ATM network. Customers will be able to apply for a loan, see the offer and accept it within a few clicks. The product will initially be offered to salary account and corporate customers.

The ongoing investigation into an alleged forex scam involving Bank of Baroda in India has been expanded to include eight more banks — Oriental Bank of Commerce (OBC), Axis Bank, ICICI Bank, Kotak Mahindra Bank, ING Vysya (now merged with Kotak), Yes Bank, DCB Bank and Dhanlaxmi Bank. Employees of Bank of Baroda and HDFC Bank have already been arrested.

Streaming video giant, Netflix, has blamed the introduction of chip-enabled credit and debit cards in the US as its results showed it only added 880,000 US subscribers, 270,000 short of its forecast. Netflix said the introduction of the new cards caused payment processing problems, but payment industry executives dismissed the suggestion, saying other subscription-based businesses had not had issues with the cards.

UniCredit SpA has said that an internal investigation did not find any evidence of wrongdoing by its executives who are being investigated by Italian prosecutors in relation to aiding a businessman allegedly linked to the Sicilian mafia.

"This preliminary analysis had not shown wrongdoings in the processes, decisions and behaviours of the bank officers involved," the bank said.

According to a report in the Wall Street Journal, anti-Mafia prosecutors in Florence had placed Fabrizio Palenzona, UniCredit's deputy chairman, and two other bank officials under investigation for helping to restructure a loan obtained by the Bulgarella Group in 2000.

Back in the UK, challenger banks Virgin Money and Secure Trust Bank have revealed sharp rises in their lending volumes. Virgin Money lent out £5.5 billion in the first nine months of 2014, up 38 percent on the same period in 2014. And Secure Trust's new lending volumes rose by 93 percent, taking its loan book to above £900 million.

South Koreans are carrying around fewer credit cards and more debit cards, but still use the credit cards more, according to data from the country's Financial Supervisory Service.

The total number of credit cards in use in the first half of 2015 declined by about 30,000 to 92 million, while the number of debit cards rose by 3.4 million to 104 million.

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