Finance Minister Nirmala Sitharaman on Thursday said the country needs big and world-class banks, and discussions are on with the Reserve Bank and lenders in this regard.
Finance Minister Nirmala Sitharaman on Tuesday allayed apprehension that privatisation of state-owned banks would hurt financial inclusion and national interest. She said the bank nationalisation done in 1969 has not yielded the desired result as far as financial inclusion was concerned.
A major reshuffle of top executives in 11 PSU banks is on the cards with the chairmen of Allahabad Bank, Corporation Bank, Syndicate Bank, Union Bank of India and Vijaya Bank slated to retire between March-July 2006.
Among other demands, the unions are also seeking immediate introduction of five-day week in full and reduction of cash transaction hours and regulated working hours.
In the biggest consolidation exercise in the banking space, the government on Friday announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.
Executive directors from different banks are eligible to be promoted to the post of chairman and managing director.
'Investors should not commit fresh money to these stocks right now, unless they can hold for the next three to four years.'
As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank (PNB); Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank. Following this merger, PNB will become second largest after the SBI, Canara Bank fourth, Union Bank of India fifth and Indian Bank seventh biggest public sector lender.
Bank of India, Canara Bank, Dena Bank, Corporation Bank and Andhra Bank are among the lenders that received capital infusion from the government.
Bank unions - officers and workmen - had buried their differences and sat across the table on August 29 to work out a fresh deal with the IBA involving a 20 per cent wage hike.
Addressing the 74th Annual General Meeting of the Indian Banks' Association (IBA), she said the industry needs to imagine how Indian banking has to be in the immediate and long-term future. As far as the long-term future is concerned, she said it is going to be largely driven by digitised processes and there is a need for seamless and interconnected digital systems for a sustainable future for the Indian banking industry.
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.
Finance secretary Rajiv Kumar was positive in formation of a committee consisting all concerned to address the issues arising out of the proposed merger of 10 banks including preserving the identity of all the banks.
Banks are also weighing the option of hiring experts for help in specialised areas.
The finance ministry on Wednesday allowed all private sector banks to participate in government-related business, like collection of taxes. pension payments and small savings schemes. At the moment, only few large private sector are allowed to conduct government-related business.
Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources said.
The Reserve Bank has asked the public to pay their income tax dues well in advance so as to avoid standing in long queues and stated that 29 agency banks are also authorised to accept such payments.
The country's largest lender State Bank of India will get the largest sum of Rs 8,800 crore as government's capital infusion.
Corporation Bank is the biggest beneficiary of this round of capital infusion with Rs 9,086 crore of funding, followed by Allahabad Bank with Rs 6,896 crore.
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With new private banks in the play, the going could become more difficult for the old-school state-run banks, already losing business and market position, forcing them to think hard towards consolidating and forming larger entities to garner big-ticket deals.
Banks operating in India reported fraud of Rs 4.92 trillion as on March 31, 2021, which represents nearly 4.5 per cent of the total bank credit, showed Reserve Bank of India (RBI) data, which was sought under the Right to Information (RTI) Act by Saurabh Pandhare. The data showed 90 banks and financial institutions reported a total of 45,613 cases of loan fraud till March 31, 2021. State Bank of India - the country's largest lender - reported the highest amount of loans as fraud - Rs 78,072 crore as on March 31, 2021.
Though most experts remain bullish on the banking space, they suggest investors buy only those banks whose NPAs are at a manageable level of 3% to 4% and there is credit growth or earnings visibility.
The debate over working hours flared up after Infosys Co-founder N R Narayana Murthy called for 14-hour workdays.
He is expected to be produced before a special Prevention of Money Laundering Act court on Saturday where the ED will seek his remand for custodial interrogation.
These recommendations are based on interactions held by the Banks Board Bureau with eligible candidates from PSBs towards appointment against vacancies in PSBs for the period 2018-19
Business is down to such an extent that last year these firms could not even meet RBI's capital norm of Rs 50 million for partnerships and Rs 100 million for public and private firms in this line of business.
The annual earnings of a non-executive chairman of a PSB is capped at Rs 10 lakh, inclusive of fees for attending board meetings. This is way below the compensation of the chairman of any private bank, reveals Tamal Bandyopadhyay.
For FY21, CSB is looking at growth of around 25 per cent and is confident of doubling it in two years. And it is also exploring options to acquire a mid-size bank with a good client base and branches in the north to acquire an all-India presence.
'Amaravati will be a game changer for Andhra Pradesh.'
Unlike in the past, when old private banks compromised upon underwriting standards to take on the bulk, they've now realised that scaling up at the cost of quality isn't worth the while. These banks have also readjusted growth targets when required, and rebalanced books to preserve capital and asset quality.
India's five leading wilful defaulters are Winsome Diamonds & Jewellery Ltd and associate Forever Precious Jewellery & Diamonds, Zoom Developers, Kingfisher Airlines, Beta Naphthol and Raza Textiles
Exuding confidence in sustaining the tempo of credit growth, public sector bankers said on Wednesday that consolidation in the public sector bank (PSB) space has given them a robust base to scale. The privatisation of PSBs can be done through divestment of government stake to a wider base of investors without haste. There is nothing to worry about at this point (high credit offtake) as underwriting standards and risk management are much better.
As per norms, sanction for prosecution of government employees accused of corruption has to be given within four months' stipulated time.
The Sensex closed higher by 170 points at 26,128 and the Nifty rose 59 points to end at 7,943.
Public sector lender Bank of India has moved to the National Company Law Tribunal (NCLT) seeking initiation of insolvency proceedings against Future Retail Ltd and a moratorium over the assets of the Kishore Biyani-led debt-ridden firm. Besides, Bank of India (BOI), the lead banker of a consortium of banks that lent money to Future Retail Ltd (FRL), also suggested the insolvency tribunal appoint Vijay Kumar V Iyer as the interim professional of the company. Meanwhile FRL, in a regulatory filing, said it has been served and received a copy of the petition and is in the "process of taking legal advice".
All transfers and promotions for next financial year will be decided by respective banks, not by the merged entity.
To begin with, there would be the immediate integration of various technology stacks. This would create more business for global consulting and IT services entities such as KPMG, PwC, EY, Accenture and IBM, among others. Indian service providers - Infosys, Tata Consultancy Services (TCS), and Wipro, for instance - would also cash in.
Experts attribute the lower target to increased allocation under the credit guarantee scheme for small businesses. Out of the Rs 3.21 trillion worth loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) in the last financial year, Rs 3.12 trillion were disbursed to entrepreneurs, according to official data.
Banks have started organising silent demonstration in front of houses of defaulters.
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