Industry players believe the new DFI model will be initially risk capital, which will then be used to mobilise additional resources from development agencies such as World Bank.
A vast majority of borrowers are in the essential services' supply chain with tiny and micro businesses, and this has sprung back.
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.
'Public sector banks are like an extended arm of the government.' 'They rush to rescue certain sectors or they rush to invest in certain sectors to prop up the economy which the private banks don't.'
The move will have cascading effects for lot of related sectors
Bandhan Financial Services, which was given a banking licence on Wednesday, hopes to come up with a unique business model, with a mix of doorstep and retail banking.
European Investment Bank to set up office in India.
The story of Sahara India Pariwar founder Subrata Roy, who died in Mumbai on November 14 aged 75, is the stuff of movies - of a spectacular rise and an equally spectacular fall. Born in Araria, Bihar, Roy was 30 when he set up Sahara in 1978. He started with a capital of about Rs 2,000, a peon, a clerk and his father's Lambretta scooter in Gorakhpur, eastern Uttar Pradesh, writes Tamal Bandyopadhyay in his 2014 book, Sahara: The Untold Story. Sahara was not his first venture.
The challenge for the RBI in 2024 is likely to be less about containing elevated inflation and more about curbing excessive financial market exuberance and a 'problem of plenty', notes Sajjid Chinoy, Chief India Economist JP Morgan.
'Banks, fund managers, NBFCs, rating agencies, those buying into debt funds -- all of them will have to watch their step as India's financial system enters a new phase,' warns T N Ninan.
Tamal Bandyopadhyay offers some unsolicited advice for a government wh,ich came to power, with brute majority and the nation's pragmatic chief money man.
'India has the potential to do a lot more to take advantage of the time today where we stand to gain, geopolitically and in terms of market attractiveness.'
Invest 5 to 10 per cent in a banking sector fund. Ensure that mutual fund's portfolio includes all three players -- private sector banks, public sector banks and NBFCs.
The corporate sector does not care from where the money is coming.
'We are very watchful about inflation and growth. But the main challenge is economic revival and growth.'
Non-performing assets of banks have been on the rise for past several months due to slowdown in the economy.
Focus to be on unbanked areas; initial capital is set at Rs 100 crore; India Post can apply.
Hectic fundraising through initial public offerings (IPOs) is expected in October-November, with at least 30 companies are looking to collectively raise over Rs 45,000 crore through initial share-sales, merchant banking sources said. Of the total fundraising, a large chunk would be garnered by technology-driven companies. The successful IPO of food delivery company Zomato, which was overwhelmingly subscribed by over 38 times, encouraged new-age tech companies to come out with their primary share-sales.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
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.
The finance minister has stayed true to her commitment to fiscal consolidation, even though the pace of the decline in the deficit could have been faster, notes A K Bhattacharya.
Assume the worst regarding how long your unemployment could last and make conserving cash your topmost priority, suggests Sanjay Kumar Singh.
Analysts on Wednesday welcomed the Reserve Bank's decision to grant bank licences to Bandhan and IDFC, but expressed dismay that only two of the over two dozen aspirants made the cut.
In 2012, Akula quit as chairman of Bharat Financial Inclusion (formerly SKS Microfinance), which he'd founded and led to a successful initial public offering
Foreign currency loans raised by Indian companies nosedived to $210 million in the September quarter (Q2), 93.3 per cent less than the year-ago period when five firms raised $3.1 billion. The Q2 amount is the lowest since December 2003 quarter when India Inc raised $191 million. Companies cited volatility in the currency markets, sharp rise in interest rates in the United States, and fund availability in India as the main reasons behind the sharp fall.
'There are some high-frequency indicators where uptick is visible and some where it is not'
The 30-share Sensex gained 271 points to end at 28,805 and the 50-share Nifty ended up 84 points at 8,712.
Bringing in the untapped informal sector into the formal one will benefit business.
The Bharatiya Janata Party regime will have to make good on this election slogan to restore state-owned banks to health, says Rajiv Lall.
Stocks to watch: BHEL, L&T, IRB Infra and Suzlon
'The estimates of tax forgone on this item run into hundreds of billions.' 'And there is neither fairness nor rationality to support continuing with this tax holiday for just one class of investors, those who put their money in shares,' says T N Ninan.
RBI may also be open to injecting liquidity through open market purchases of bonds but is resisting relaxing capital buffers for banks.
If banks cannot charge interest from borrowers during the moratorium, who will bear that cost? Should the depositors subsidise the borrowers by foregoing interest on deposits? In that case, we will turn banking on its head! notes Tamal Bandyopadhyay.
Even if Mudra steps in to play its main role of refinancing at some stage, the responsibility for the bad loans remains with the banks.
'Credit expansion is probably the quickest way to get the economy going again.' 'Easy credit is like a shot of nitro in a race car: In timely, small, quick, doses it can give a tremendous boost but carried to extreme it can destroy the engine,' points out S Muralidharan, former managing director, BNP Paribas.
Indian start-ups breathed a sigh of relief after the UK government facilitated the acquisition of the now-defunct Silicon Valley Bank's (SVB's) British arm by HSBC. In a bid to allay fears, the US Federal Deposit Insurance Corporation (FIDC) announced recently that it had transferred all deposits of start-up-focused SVB to a newly created bridge bank and all depositors would have access to their money. President Joe Biden also sought to reassure jittery depositors that they can have confidence that the US banking system is "safe".
It has been a decade since Shyam Srinivasan took over as managing director and chief executive officer at Federal Bank. He wants to ramp up the bank's unsecured lending going ahead even as it homes into the space vacated by competition. Reappointed for a fresh three-year term as the bank's helmsman, he spoke to Hamsini Karthik on the plot ahead.
Investors need to evaluate how they stack up against other high credit quality fixed-income options before putting money in them.
'By not letting bankrupt banks fail, we have discouraged ordinary folk from taking precautions while choosing their bank or at least when they hear bad news about their bank,'says S Muralidharan, former MD, BNP Paribas.
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