The decision by the Reserve Bank of India to introduce a unified regulatory framework on connected lending for all the regulated entities (RE) is expected to reduce the influence of business conglomerates in the Indian lending space, said bankers and experts. "Connected lending pertains to lending to related parties within the same business group. "While the RBI might appear more agreeable to allowing business conglomerates to own banking licenses, it deems it crucial to bolster regulations that would prevent conglomerate-owned banks from gaming the system," said Shivaji Thapliyal, head of research and lead analyst, YES Securities.
Bankers seem to be pleased with the government for keeping its promise of not interfering in operational matters, but are apprehensive about the intense scrutiny of their functioning.
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The Reserve Bank on Monday warned lenders against outsourcing their credit processing activities to third-party entities.
The apex bank is scheduled to announce the quarterly review of its annual monetary policy on January 29, when it is widely expected to hike the cash reserve ratio or the percentage of amount banks park with the RBI to absorb excess money from the system.
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Currently, the cash reserve ratio is pegged at a low of 4 per cent, while statutory liquidity ratio that includes securities such as government bonds, stands at 23 per cent, down from 25 per cent in 2010.
They say liquidity remains a major cause of concern, and the coming quarters could witness a significant rise in non-performing assets. According to them, a robust risk management system, adequate capital infusion and regulatory reforms is crucial if India's economic growth is to remain intact in the medium and long term. Banks are facing immense liquidity pressure, as resources gradually disappear from the system. Banks have also been unwilling to lend each other.
'Lending to Mr Mallya was the bankers' season ticket to corridors of power and glamour. Borrowing from them was like a favour Mallya did to them,' says Shekhar Gupta.
Swiss banking professionals under the agies of the Swiss Bankers Association met the Reserve Bank of India officials on Wednesday to discuss areas of cooperation. They also apprised the Indian banking regulator about the steps that Swiss authorities had initiated to implement stringent anti-money laundering laws.
Considered, till recently, the "blue-chips" of the estimated $15 billion Indian matrimonial market, the marriage value of non-resident Indian (NRI) and India-based investment bankers is rapidly being eroded.
Department of Financial Services is regularly emphasising the early issuance of RuPay Debit Cards, e-KYC based account opening, Aadhaar seeding, financial literacy and the progress in survey made.
Reserve Bank Governor D Subbaro on Tuesday said there is scope for banks to lower lending rates further, but most top bankers maintained that interest rates will remain the same in the near term and could even rise after 3-4 months.
Following a series of rate cuts in the last two months by the RBI, most government-owned banks had reduced their prime lending rates by 0.75 per cent and deposit rates by up to 0.5 per cent. A gradual fall in headline inflation and declining crude oil and commodity prices worldwide have given room for the apex bank to shift focus from inflation to growth-supporting measures, bankers said.
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A rule change may make Nachiket Mor, among others, eligible to replace Chakrabarty.
The bosses of SBI, Union Bank and Central Bank have been driving down to their offices everyday to take stock of the biggest loan drive ever undertaken for MSMEs, discovers Tamal Bandyopadhyay.
For investment bankers, a Brexit vote is more than just about volatile prices on a screen but also about where they may end up working and living.
The benchmark Nifty and Sensex could see another 8-10 per cent from the current levels, said HDFC Securities in its outlook for equity markets in 2024. The brokerage said that the market movement in the next year will not be linear, and there will be more volatility. When asked about the market reaction to the General Elections in 2024, Dhiraj Relli, managing director and CEO of HDFC Securities, said more than the outcome of the elections, the market movement in the next three to four months will decide the market trajectory post elections.
Consensus remained elusive on a common BRICS currency as business leaders from the five-bloc nations debated the pivotal issue at a business forum on the periphery of a summit of the five-member bloc being hosted here by South Africa. In their two addresses at the Summit so far, the leaders of Brazil, Russia, India, China and South Africa have made no or scant references to the issue either. "The BRICS Business Forum discussed the international payments system in detail. "Participants also debated the question of whether a BRICS currency is possible or desirable, with strong views expressed both for and against and little consensus reached," Sim Tshabalala, chief executive of Standard Bank Group, told several hundred captains of industry from the partner countries and over 40 other nations across the globe at the Summit.
The IPO is expected to bring handsome fees for the selected banks at a time when billion-dollar listings have become scarce
The initial public offerings (IPOs) by small and medium enterprises (SMEs) hit a new high in 2023-2024 (FY24). In this financial year, data from the Prime Database showed that 190 companies raised Rs 5,579 crore through the SME IPO route. This financial year's tally bettered the fundraising in the previous financial year when 125 companies raised Rs 2,235 crore.
In the quarterly review of its annual monetary policy on Tuesday, the central bank is also likely to lay out a more clear roadmap to conduct the government borrowing programme in a smooth manner and may hike the GDP and inflation forecast for FY'10, they said. To arrest the slowdown in the economy by stimulating demand the apex bank has trimmed its CRR to 5 per cent, repo and reverse repo rates to 4.75 per cent and 3.25 per cent respectively since October last year.
No respite in sight as not many big deals, initial public offerings in pipeline.
The biggest challenge was the large government borrowings that are likely next year to finance the government's fiscal deficit, bankers said at the Business Standard Banking Round Table in Mumbai on Tuesday. According to initial estimates put out by the government, the fiscal deficit will be 5.5 per cent of gross domestic product.
The financial district of Wall Street is slowly turning 'green'.
A key hindrance to a faster turnaround of these banks is the slow progress in the resolution of legacy bad loans and the need to build up provisions against those assets.
The Faculty of Management Studies, University of Delhi, invites industry delegates, students and academicians to attend the Banker's Day 2006.
A revival in investment is likely to be a key near-term initiative.
The venue for Saturday's meeting was shifted at the last minute from the headquarters of the India Banks' Association in Cuffe Parade to avoid media glare.
Bankers need to take a call on whether they will allow technology firms to run banks or banks themselves will turn into tech firms, says Tamal Bandyopadhyay.
The Reserve Bank of India's (RBI's) decision to withdraw the incremental cash reserve ratio (I-CRR) is expected to benefit banks during the festival season. They are likely to increase deposit rates by up to 25 basis points (bps) in select maturity buckets. The rise in demand for funds to cover tax payments and meet quarter-end business targets could influence rate decisions by banks, according to bankers and money market executives.
Mallya's comments came a day after country's largest lender, State Bank's Chairman O P Bhatt said that rising levels of stressed assets may push up defaults in the domestic banking system and banks need to enhance their risk management mechanisms to tackle the issue. However, BoB has a comfortable liquidity position and has its NPA levels under control, Mallya said, adding, "the bank has adequate headroom to raise capital but did not have any immediate plans to do so."
RBI Governor would like to wait till Budget before taking any action on rate front.
The shift to a shorter T+3 settlement cycle for initial public offerings (IPOs) will be a big test of the domestic market structure, requiring players in the ecosystem to work harder to meet the squeezed timelines, according to industry insiders. The Securities and Exchange Board of India (Sebi), has announced that the transition to the T+3 cycle will be voluntary starting next month and mandatory from December 1. The new mechanism will necessitate quicker confirmations from banks and speedy verification of permanent account numbers (PANs) for all applicants.
Former RBI governor R Gandhi said that the RBI needs to re-introduce a one-time restructuring package and mere moratoriums will not suffice in unprecedented times like the COVID-19 pandemic.
What impact will this hike in RBI rates have on the banks and industries? What do the bankers have to say? How is India Inc reacting to the rate change?
Investment bankers who could have earned up to 48 million dollars in fees, if the proposed deal between Indian telecom major Bharti Airtel and South Africa's MTN had materialised.
Leading bankers on Friday welcomed the Union Budget 2010-11, in particular the measures on farm loan repayment, capital infusion into PSBs and interest rate subventions to needy sections, saying that these would make the system healthier.
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