The small loan size, strict vigil of bankers and the already high interest rates paid by the borrowers to moneylenders make the scheme attractive for banks. Banks are also devising new models for recovering such loans, mostly by deploying agents or vendors on a daily or weekly basis in rural areas.
Govt is using Census 2011 as basis for charting out its financial inclusion plan.
Banks have started putting the brakes on short-term corporate loans.
The problem is actually acute in the diamond jewellery industry where there is no uniform criteria of inventory valuation unlike gold, whose prices are uniform and widely quoted.
The bank remains on high alert to intervene if markets freeze.
If Mumbai's Zaveri Bazaar is full of jewellery shops and Delhi's Chandni Chowk has got hundreds of saree merchants vying for customers' attention, Zurich has got a street full of Swiss banks -- known for their secrecy veils.
The move comes after RBS failed to close a deal involving sale of its India retail assets to Hongkong and Shanghai Banking Corporation.
CDR amount jumps six times in first half; bankers expect things to worsen.
Bank chiefs told the RBI said they needed to mobilise deposits as they were facing additional demand for funds with other sources drying up. "When government schemes are offering 8 per cent rate, banks cannot go below that. If we cut rates further, we will not be able to attract fresh funds and will also face the prospects of depositors exiting in favour of small savings instruments," said a banker who attended the meeting.
Superseding the boards of two non-banking financial companies (NBFCs) in the Srei group will neither create liquidity challenges for sound entities, nor build systemic crises because the markets have factored in the problems with the Kolkata-based firms. Such regulatory steps will help in making the NBFC space more robust, bankers and market experts said. The action should have begun earlier because the Reserve Bank of India (RBI) had done a special audit last financial year and asked the group to make provisions for assets considered stressed, analysts said.
With the Adani and Jindal groups and Mukesh Ambani-owned Reliance Industries joining the race to buy Videocon Industries' (VIL's) assets, lenders are expecting aggressive bids for VIL's consumer durables and overseas oil assets, which are to be sold in separate auctions. The entire asset sale exercise is expected to be completed in the next six months, said a banker. A promoter entity of Naveen Jindal-owned Jindal Steel and Power has also evinced interest in the second round of bids for VIL's consumer durable business. The deadline to submit bids for VIL's assets ended on February 2.
India's $121 billion troubled debt pile, over $100 billion of which is on the books of state-owned banks, has come under close scrutiny from prosecutors, the media and politicians
This is not a new or unknown problem, but every time it crops up, our policy-makers have tried to wish it away. In the present circumstances too, the government has stopgap arrangements. It is borrowing from the World Bank (that's window-dressing fiscal deficit), says Ajit Ranade.
Central banks are underwriting the credit risk with public money but without any level of transparency. Traditionally, only government securities are eligible for discounting. A fundamental principal of the discount window is that it is designed to provide short-term liquidity against instruments of unimpeachable credit quality. The regulatory spin is that this is "temporary" "in the light of market conditions" and "recognises innovation in the market".
Joy Thomas stated that one large account -- HDIL -- was the sole reason for the present crisis that led to the regulatory action on Tuesday when Reserve Bank of India superseded its management and placed it under an administrator for the next six months.
While the corporate sector has benefited from massive capital expenditure, leading to sky-rocketing stock prices, investors would do well to keep an eye on the macroeconomic picture and government finances, not just corporate profits, for signs of trouble, alerts Debashis Basu.
Despite its admirable competence and proven track record, the RBI doesn't have the capacity to supervise an economy that's growing so fast and becoming larger by the year, points out T C A Srinivasa Raghavan.
'We can't have the best of both worlds -- large, efficient, world class government-owned banks, doing social banking and making profits. 'Why not set them free from the shackles of such obligations and run them as business units?' says Tamal Bandyopadhyay.
"Canara Bank is the lead banker of lenders' consortium to DCH and the bank is conducting forensic audit of DCH," Financial Services Secretary D K Mittal told reporters.
2014 sees slowest start to festival season in at least 7 years
More people are now comfortable using their debit cards.
The government has once again tweaked the rules for selection of public sector banks chiefs.
Banks want the government to bear the cost of providing cover under the proposed credit guarantee scheme for distressed farmers.
There's surplus liquidity and RBI, with plentiful forex reserves, is ready to pump whatever extra is needed
Seek easing of asset classification guidelines for better credit flow.
.jpg)
At the retreat, PSBs had suggested the government cut its stake in these entities to less than 51 per cent over a period of time and empower the boards of individual banks.
The suspected security breach happened through a malware in the systems of Hitachi Payments Services, which serves ATM network of Yes Bank
The bank has won the 'Best Retail Bank in India' award for the fifth year in a row.
'The government must find worthwhile private owners for some of the banks, increase the share of private sector banking in the system, and then ask the remaining government banks to face the discipline of the market and compete, or shrink into irrelevance,' says T N Ninan.
Banks have sought relaxation in norms for classifying loans to delayed infrastructure projects as sub-standard assets even as the Reserve Bank of India has indicated its unwillingness to ease the group exposure ceiling.
'We are in a sweet spot.' 'Equity, on a standalone basis, will continue to remain the asset class to stay invested in.'
The evolving RBI-government relationship, a reversal in the interest rate cycle and return to profitability will dominate bankers' conversation this year, says Tamal Bandyopadhyay.
The RBI, which has no interest or mechanism to get feedback from bank customers, is unaware of this. If made aware, it remains silent, proving that it has no problem in allowing lenders to short-change its customers, says Debashis Basu.
For the fortnight ended September 5, annual credit growth in the banking system fell to 9.68 per cent, data released by the Reserve Bank of India showed.
Every bank offers a different slab of minimum balance to customers, based on which 'free services' are provided
.jpg)
KC Chakrabarty who was appointed as RBI deputy governor in 2009, is considered frank with his views.
Banks are ruling out an immediate hardening of interest rates and will wait for cues from the Reserve Bank of India before effecting any changes. Most bankers said that unlike last time when inflation was above 6 per cent, the government this time has a bigger role to play than the Central bank since most price pressures are emanating from rising food and metal prices.
Loans make money for the lender in the initial years but losses come later when they turn bad.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances