It has been a year since the Reserve Bank of India (RBI) initiated prompt corrective action (PCA), an exercise that puts weak banks under central bank scrutiny, against the 94-year-old Lakshmi Vilas Bank (LVB). But recently, this low-profile Chennai-headquartered bank found itself attracting some unwonted publicity when 60 per cent of its shareholders voted against a proposal to re-appoint seven directors, including one of the promoters, K R Pradeep (who holds around 2 per cent), and the company's managing director & chief executive officer S Sundar.
The public sector lenders saw the biggest rebound in inquiries in July and August 2020, most likely because they were early in recommencing operations than their private and finance counterparts.
Banks say they themselves red-flagged the transactions to RBI. It must be noted that these transactions are not outright evidence of fraud or proof of nefarious activities.
A common feature in India is the lag between the occurrence of frauds and the time they are actually reported.
'The economy is expected to bounce back and things are expected to recover faster than what we previously thought.'
Seed and early-stage start-ups are high-risk businesses, rarely have collateral and only 1 in 10 of them makes it to becoming a viable company.
A vast majority of borrowers are in the essential services' supply chain with tiny and micro businesses, and this has sprung back.
Relations with the government, the bank's majority owner, are a tricky issue for all SBI chiefs, and, like all his predecessors, Khara will be closely watched for his equations with the finance ministry representative on the SBI board.
Finance ministry advises banks to invoke personal guarantees of all promoters whose companies have gone to NCLT for debt resolution.
The net outward foreign direct investment went up from $9.1 billion in 2017-18 to $12.6 billion in 2018-19 and moved further north to $13 billion in 2019-20.
'Mostly, the relief, if needed, would be for housing loans where a person has lost a job and is unable to pay his EMI or there has been a temporary salary cut.'
Puri gave up the comforts of Citibank to set up a new-age bank from a rat-infested room in the Kamala Mills Compound in Worli, Mumbai and build a marquee brand. A look at his 26-year stint as HDFC Bank's boss.
Yes Bank CEO said the private lender is disposing some of the properties in many other cases as well. He, however, declined to elaborate on borrowers against whom such action was underway.
Lenders had filed 1,251 cases to recover Rs 24,765.5 crore. Wilful defaulters are the entities that do not pay back money despite the ability to do so. Defaulters above Rs 1 crore were considered for this exercise.
The real estate sector had been going through a rough phase even before the COVID-19 crisis, marked by falling sales and piling up of inventories.
The central bank has not set a deadline for banks to conclude the stress-test exercise, but senior bankers opine that some were already looking at this, and will now fast-track it by September-end, when they will have a better picture of their books after the moratorium on the servicing of loans and a 180-day view on the performance of borrowers' accounts.
Like everything else, the structure of banks may change, and banks may depend more on digital technologies and artificial intelligence for dealing with both their customers and employees.
The poor deployment of WLATMs has tripped what the central bank sought to achieve back in 2012.
About 300 employees would come under the ambit of voluntary decision.
The incremental stress is mainly from sectors including power, infrastructure, constructions, hospitality, iron and steel, telecom, and realty.
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