Though the economy is recovering, the non-performing assets (NPAs) may rise further because the asset quality will improve only with a lag effect, says O P Bhatt.
The Central Vigilance Committee has sought loan data from United Bank
Non-performing assets of banks have been on the rise for past several months due to slowdown in the economy.
Individual banks should break away from the industry pact and have their own settlements with the unions, recommends Tamal Bandyopadhyay.
'The RBI's clarification on non-performing advances accounting is likely to increase NPAs by around one-third for non-banking finance companies,' domestic rating agency India Ratings and Research said in a report on Friday.
The financial position of India's public sector banks (PSBs) has deteriorated sharply over the past financial year.
Non-Performing Assets are a wake-up call for public sector banks.
Resolution to the bad loans problem has to be incremental, and the RBI has to ensure NPAs are not swept under the carpet, HDFC chairman Deepak Parekh tells Joydeep Ghosh.
Concerned over banks hiding their actual NPA numbers, RBI Governor Raghuram Rajan on Tuesday said the central bank is "increasingly turning towards taking action" on such divergences.
'So far as supervision is concerned, there are enough powers but to take action on public sector banks, consultation with the government is needed.'
MMFS is looking at a compounded annual growth rate (CAGR) of 18 per cent in assets under management (AUM) during FY23 to FY26 on the back of the strong recovery. The company has initiated risk-mitigating initiatives, including diversification into non-vehicle loans, building digital capacity and re-classification of customer profiles into affluent and mass-affluent in semi-urban segments to better target marketing.
Laggards yet, a number of smaller PSBs in the category have balance sheets which do not give much comfort.
The Finance Ministry has asked top rung exectives of United bank of India to furnish bad loan recovery report on daily basis.
Finance Minister Nirmala Sitharaman presented her third Budget on February 1.
Without naming either the alleged kingpin of the fraud, billionaire jeweller Nirav Modi, or Punjab National Bank, Jaitley questioned the ethics of some businesses in the country and asked as to why the bank's internal and external auditors could not detect the fraud which had been going on for 7 long years.
Punjab National Bank has embarked on a five-pronged strategy for improving its financial position to become the 'best bank' in the country.
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.
Under Urjit Patel, the then RBI Governor, the central bank had a habit of making complete about-turns on various issues, including electoral bonds and digital payments, former finance secretary Subash Chandra Garg said in his book titled 'We Also Make Policy: An Insider's Account of How the Finance Ministry Functions.' Citing some instances of about-turns by the then RBI Governor Patel, Garg in his book said, RBI had done so on the electoral bond issue and it had so in case of setting up of Payments Regulatory Board (PRB). RBI also made unilateral decisions like ordering complete data localization for participation in the payment system, Garg wrote in the book which will hit the stands on October 1.
The Reserve Bank on Wednesday said the amalgamation of Lakshmi Vilas Bank with DBS Bank India will come into force from November 27 and the moratorium imposed on the crisis-ridden lender will be removed on that day. The RBI issued the statement within hours of the Cabinet clearing the Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL).
Their net NPA as a proportion of net advances were 2.2 per cent, compared with 1.7 per during the same period a year earlier.
The country's largest lender SBI on Friday reported a 41 per cent surge in standalone net profit at Rs 9,114 crore for the fourth quarter ended March 2022, helped by decline in bad loans. State Bank of India (SBI) had registered a profit of Rs 6,451 crore during January-March period of 2020-21, the lender said in a regulatory filing. Total income of the bank during the March quarter increased marginally to Rs 82,613 crore, from Rs 81,327 crore in the same period of the previous fiscal.
The Commission observed vulnerability of junior untrained staff on probation and their misuse by senior officials.
Amid criticism of its exposure to 'toxic' assets abroad, India's largest private sector lender ICICI Bank on Monday said its UK subsidiary has registered a $35 million (around Rs 160 crore) net loss for the half year ended September 30 on account of higher provisioning in its investments abroad.
Warning banks on interest rates risks, high transaction costs and NPAs, ICRA said Indian banks are yet to attain global standard in profitability and productivity despite posting over 40% growth in net profit in the first half of this fiscal.
The second quarter results of banks show that net profits for the industry increased 57 per cent annually. The private sector banks recorded a 64 per cent rise in profits, whereas the net profits of public sector banks jumped 50 per cent in this period. A significant portion of this increase can be attributed to the rise in credit costs and a decline in non-performing assets (NPAs).
Prime Minister Narendra Modi on Thursday said his government is using all channels including diplomatic to bring back high-profile economic offenders, leaving them with no option but to return to the country. Speaking at a symposium on credit flow and economic growth, he asked banks to support wealth and job creators with proactive lending while promising to stand by any loans given in right earnest. "In our attempt to bring back fugitive (economic offenders), we relied on policies and law and also used diplomatic channels.
A look at the fortunes of banks through the stocks of five pillars of the edifice.
The gross non-performing assets of public sector banks rose to 6.03% at the end of June.
Gill, who studied at Modern School and Hindu College in Delhi, joined Deutsche Bank in 1991 and became its India CEO in 2012.
Jaitley said the government had earmarked Rs 25,000 crore (Rs 250 billion) for recapitalisation.
A bench headed by Chief Justice T S Thakur also sought a response on the question as to whether the recovery tribunals are equipped to decide the loan recovery cases within a fixed time frame, stipulated under the law.
The bank saw loans worth Rs 7,000 crore (Rs 70 billion) slipping into NPAs during the March quarter, taking the gross NPA ratio to 5.82 per cent.
The decision in this regard, however, is expected to be taken by the new government.
With many getting payment reminders, confusion prevails among borrowers, term-plan investors and credit cardholders over the implementation of the three-month moratorium on all loan repayments amid disruptions caused by the coronavirus outbreak. As part of measures to alleviate hardships faced by people, the Reserve Bank of India, on March 27, announced a slew of steps, including a three-month moratorium on loan repayments.
The meeting is expected to chart a road map for cleaning up their balance sheets and boost credit flows, reports Somesh Jha.
Report points out corporate vulnerability indicators remain elevated.
The NPA of the public sector banks rose to 6.03% as of June 2015.
The indebtedness of Indian companies has had an adverse impact on the economy's investment climate apart from weakening their performance and seriously impairing the financial health of the banking sector. Unless both the problems are resolved, there is little chance of reviving investment and boosting growth on a sustainable basis, says A K Bhattacharya.
Banks seems to be upset over RBI's move over rate cut.
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.
