The government said it will provide capital support of Rs 15,888 crore (Rs 158.88 billion) to public sector banks and financial institutions during the next fiscal to strengthen their capital base.
The strike by bank employees is part of the one-day all-India general strike, called by major central trade unions.
Bad loans in public sector banks more than tripled.
In a recent communication to the bank chiefs, the ministry has said all such loans to the corporate sector can be sanctioned only after board approval and need to be backed by securities within six months of sanctioning, failing which the loan would need to be phased out.
Loans for Indian airlines have dried up as banks have become cautious to lend to the sector.
Finance Minister P Chidambaram on Wednesday said public sector banks plan to hire 50,000 persons and open 10,000 branches in the current fiscal.
The challenges before the government, he said, is to put public sector banks back on track and continue to operationalise stalled infrastructure projects
It will be headed by Secretary, Department of Financial Services.
Options include fresh capital infusion by the management and/or some new investors.
Norms governing investments by provident funds bar these from depositing funds in a commercial bank in case the NPAs of that bank exceed two per cent of net advances.
The country's economy will start witnessing a growth of 6.5 to 7 per cent from fiscal 2023 onwards, helped by various reforms undertaken by the government so far and also as COVID-19 vaccination drive progresses, Chief Economic Advisor Krishnamurthy Subramanian said. He said the second wave of COVID-19 is unlikely to have a very significant on the economy. The country's economy contracted by 7.3 per cent in fiscal 2020-21. "Together with the reforms and focus on vaccination, I expect growth to start hitting close 6.5 to 7 per cent from FY23 onwards and accelerate from there on," Subramanian said at a virtual event organised by Dun & Bradstreet.
The 'bad bank' -- which will help banks clear their balance sheets by transferring the NPAs to special purpose vehicles -- has been one of the most debated ideas for stressed asset resolution.
"A very easy solution to suggest is tax-payers must pay because the private sector has defaulted," Jaitley said, adding that bank recapitalisation, where the government puts in more capital in public sector banks to shore up their books, effectively amounted to that. "Therefore, I think let's try and make the private sector pay for their debts or allow somebody else to step in."
Sentiment got a leg-up after the Lok Sabha on Thursday gave its approval for Rs 80,000 crore recapitalisation bonds for strengthening public sector banks, traders said.
Replying to a query in Rajya Sabha, Finance Minister Nirmala Sitharaman said there was no delay by the Centre in taking action after identification of fraud by the State Bank of India following the forensic report from Ernst & Young.
The sharp rise in home loan rates of private sector banks is forcing their customers to switch loyalties.
Avoid preparing new topics on the final days before the exam. Rather focus on practicing what you have learned till date, suggests Arun Singh Rawat, an educator at Unacademy.
The Centre is planning to raise the ceiling on foreign equity holding in public sector banks to enable them to mop up the required capital for meeting higher capital requirements and to fund growth.
Clearing operations are likely to be affected as over 500,000 employees of public sector banks, barring the State Bank of India
The agency said that over the next two years new NPL formation rates would witness a gradual decline.
The share of public sector undertakings (PSUs) in the total market capitalisation of listed companies--at an all-time low of 10 per cent currently --- may get a leg-up from the government's divestment push. Recently the government announced the successful sale of national carrier Air India to Tata Sons, India's first privatisation of a PSU since 2002-03. The transaction is expected to be completed by December.
As public sector bank employees started a two-day strike on Monday seeking higher wages, Finance Minister P Chidambaram said the profit of banks cannot be used only to enhance salaries because there are other obligations.
'There are deeper, underlying, forces at work and we need institutional arrangements to guard against them.'
A few state-owned banks such as IDBI Bank, Union Bank, Indian Overseas Bank have announced results for FY14.
Indeed, there were frauds, and the politician-banker-industrialist nexus played a role in the rise of NPAs, but governance issues in Indian banking are far more nuanced and complex, reveals Tamal Bandyopadhyay.
The Ministry of Home Affairs amended its guidelines on October 12 to include the chairman, managing director or chief executive officer of each public sector bank on the list of authorities who can issue requests for opening look-out circulars against whom an FIR is yet to be filed.
'We feel there is definitely something murky in the system.' 'Will anyone believe that Nirav Modi will go to a branch and bribe a low-level officer?' 'Just look at the people with whom he had moved around.'
Finance Minister Nirmala Sitharaman will present the much-awaited 2022-23 Union Budget on February 1. While there has been strong recovery in some sectors, touch services like hospitality, tourism and leisure continue to suffer after two Covid-19 waves. Household savings have been hit due to increased spending on health care. Consumption has still not reached pre-pandemic levels.
Banks have collected about 1,500 kg of gold from temples and trusts under the Gold Monetisation Scheme (GMS) since its launch last November.
Further stimulus measures are expected in the upcoming Budget where the focus is likely to be on reforms, including some structural measures such as reducing red tape and boosting foreign direct investment. The meeting with industrialists is in the series of discussions that Modi has had during the last couple of weeks to seek suggestions to revive growth.
Stocks of public sector companies, especially the oil refining and marketing companies (OMCs) - Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOC) - logged gains on Tuesday in a weak market. While the Nifty lost nearly 1 per cent in trade on Tuesday, the Nifty CPSE index - a gauge of performance of central public sector enterprises on the National Stock Exchange (NSE) - gained over 3 per cent in intra-day trade. The rally in PSU stocks comes on the back of the BPCL chairman, Arun Kumar Singh suggesting in the company's annual general meeting (AGM) on Monday that the government intends to complete the divestment process in the OMC by March 2022.
Because of lower ratings, these companies would have to pay higher rates if they raised money directly.
I am not sure if Modi can ever act as a chowkidar, even if he wants to. But he can surely act as a thanedar, by ensuring a fast resolution of corruption cases once they come to light. Exemplary action is easier and will burnish his anti-corruption image, argues Debashis Basu.
Top losers in the Sensex pack included ICICI Bank, Tata Steel, Vedanta, HDFC IndusInd Bank, Tata Motors, RIL and ONGC -- falling up to 4.45 per cent.
Rajnish Kumar was on Wednesday appointed the new chairman of the largest public sector bank, State Bank of India (SBI), replacing Arundhati Bhattacharya who completes her one-year extended term on Friday.
Conversion of debt of the stressed telecom player Vodafone Idea Ltd (VIL) into equity could be an option to emerge out of the crisis, lenders led by State Bank of India (SBI) have suggested to Department of Telecommunications (DoT). DoT had called senior bank officials on Friday to discuss the stress in the telecom sector arising out of the Supreme Court order last month on the adjusted gross revenue (AGR)-related dues payable by telecom majors, including Vodafone Idea and Bharti Airtel, sources said. The top court has given a time period of 10 years to telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.
Jhunjhunwala, one of India's well-known individual investors, was speaking at the India Economic Conclave organised by the Times Network. He said he won't rule out 5-10 times gains in state-owned banks over the next five years. Shares of PSBs have been on a tear this year. The Nifty PSB index is up 20 per cent so far this year.
We'll need to wait a couple of years to see how many restructured loans turn bad and whether some banks fall victim to their obsession for growth, explains Tamal Bandyopadhyay.
For the first time, the bank is recruiting the CFO from outside its experienced talent pool of top management.
The opposition party questioned why the government took five years after the liquidation proceedings of ABG Shipyard to lodge an FIR in connection with the alleged duping of 28 banks.
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