There is a reason this 11 year phenomenon is a rule as much as it is an observation. It speaks to the nature of man and what humans are like, explains Aakar Patel.
The Centre should privatise all public sector banks (PSBs), except the State Bank of India (SBI). This is because private banks have emerged as a credible alternative to PSBs with substantial market share. Also, government ownership hinders the ability of the Reserve Bank of India (RBI) to regulate the sector, according to a report by the National Council of Applied Economic Research (NCAER).
Like everything else, the structure of banks may change, and banks may depend more on digital technologies and artificial intelligence for dealing with both their customers and employees.
The government has already announced infusion of Rs 10,086 crore in Bank of India, Rs 5,500 crore in Oriental Bank of Commerce and Rs 2,159 in United Bank of India.
Banks' bad loans might cross Rs 10 lakh crore by the end of this fiscal, mainly on account of slippages in retail and MSME sectors, a study said on Tuesday. "NPAs are expected to rise to 8.5-9 per cent by March 2022, driven by slippages in retail, Micro, Small and Medium Enterprise (MSME) accounts, besides some restructured assets," the study by industry body Assocham and ratings firm Crisil said. The study titled 'Reinforcing the Code' said the Gross Non-Performing Assets (GNPAs) of banks are expected to cross Rs 10 lakh crore by March 2022.
'In India, managers and the leadership almost glorify overworking.'
Fifty per cent of bank restructured assets were in infrastructure, steel, power and telecom sectors.
The finance minister has emphasised on the quick disbursal of additional loans to MSMEs, to simplify process, formats and documentation.
Public sector banks, including the country's largest lender State Bank of India (SBI), have come out with a templated approach for restructuring retail and small business loans of up to Rs 25 crore under the Reserve Bank of India's (RBI) Covid restructuring package 2.0. They have also come out with standardised products to make funds available to business entities for improving healthcare infrastructure and to individuals for meeting Covid treatment expenses. Business loans have been divided into three categories.
'Over the next 12 months, it will be difficult to make 15 to 20 per cent return in the markets as the valuations appear stretched.'
Fund managers are withdrawing after a two-year long run in public sector bank (PSB) stocks. Domestic mutual funds (MFs) were net sellers of PSB stocks for the first time in nine quarters, offloading shares worth Rs 1,800 crore in the March quarter, said a report by ICICI Securities. In the previous eight quarters, fund houses had invested more than Rs 10,000 in PSBs amid deep discounts in valuation vis--vis their private sector peers.
Barring stray references such as the 'dual control' of banks and shifting the goalposts during demonetisation, he is not in a fault-finding mode with the government, notes Tamal Bandyopadhyay.
Bank CFOs may meet next week to discuss minimum public shareholding and takeover rule issues.
State Bank of India (SBI) is willing to work with Russian banks not facing sanctions and remain on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to open a special rupee vostro account (SRVA) for invoicing in Indian currency. The country's largest lender in a statement said it has not been identified as the nodal bank for handling Russia-related transactions. In July, the Reserve Bank of India (RBI) allowed banks in India, including SBI, to open an SRVA to promote invoicing in Indian rupee, subject to certain safeguards. Accordingly, the bank in a statement said it is "making necessary arrangements and processing requests received from various banks, including Russian banks", following guidelines laid out by the RBI.
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.
'The finance ministry and public sector banks have tried to keep the names of wilful defaulters secret.' 'Secrecy and concealing information are inbred among banks and even the RBI,' observes Debashis Basu, editor, www.moneylife.in.
The awarding of in-principle licences for 10 small finance banks is likely to be a game changer in a way which may not be adequately realised right now.
The proposed IFC disrupts existing regulatory structures.
Job creation, improving farm productivity, and mobilising public funds for infrastructure development were some of the issues that figured during the interaction between Prime Minister Narendra Modi and economists ahead of the 2025-26 Union Budget. The prime minister on Tuesday met eminent economists and sectoral experts at NITI Aayog to hear their views and suggestions for the upcoming Budget. Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2025-26 in the Lok Sabha on February 1, 2025.
The US Trade Representative noted that India's average applied tariff rate stood at 17% per cent, the highest of any major world economy.
The capital infusion would help improve the financial health of banks. While some banks would get necessary regulatory capital while others would get it for fueling growth.
As per the RBI Act, the central bank should have four deputy governors - two from within the ranks and one commercial banker and the fourth one an economist to head the monetary policy department.
Conducted by research firm IDC, the study titled 'Understanding the Indian Retail Banking Customer' says push marketing is fast becoming obsolete and the thrust should be on creating brand advocates.
As RBI governor, Sanjay Malhotra will have to give the highest priority to the interest of the economy while deciding on the growth-inflation trade off at Mint Street.
A host of lenders, including State Bank of India, IDBI Bank, Indian Bank and Andhra Bank, have lined up meetings of their asset-liability committees this week, to review their lending and deposit rates.
While an uptick in economic activity will help banks come out of some of their problems, some issues currently facing the Indian banking industry are of its own doing says Pramit Jhaveri.
'No commercial bank will be allowed to fail. There is nothing to worry about.'
'Expect India to keep doing well irrespective of geopolitics.'
The incidence of corruption cases can be checked to a large extent if the suggestions already available with RBI and the government are taken seriously, says Shyamal Majumdar.
The probe into selections for banks such as Bank of Baroda and Canara Bank followed the arrest of Syndicate Bank CMD S K Jain for alleged graft.
Mortgage finance remains a structural growth opportunity in India with a policy focus on affordable housing, housing shortages, low mortgage penetration, and rising incomes as drivers. Affordable Housing Finance Companies (AHFCs) serve the mass market, low-income segments, which is the least-serviced category, and to operate in this segment, the mortgage provider needs good assessment skills. AHFCs and HFCs have also been increasing exposure in other mortgage segments (loan against property, developer loans among others).
The strike notices were given by workers' unions of various sectors such as coal, steel, oil, telecom, postal, income tax, copper, banks and insurance.
A banking Trojan malware has been detected in the Indian cyberspace that is lurking to attack bank customers using Android phones and has already targeted those from more than 27 public and private sector banks, the country's federal cyber security agency said in a latest advisory.
On February 22, 2013, the Reserve Bank of India issued guidelines on 'Licensing of New Banks in the Private Sector'.
This is despite the private sector companies outperforming their public sector counterparts, reports Sachin P Mampatta.
Raghuram Rajan rejected the argument that inflation has come down largely because of "good luck" stemming from low oil prices.
Despite coming to market last year amid a barrage of publicity, many of the Aim funds are still trading at a discount to their net asset values and some are still trading below their initial public offering prices even as their peers that listed in India are enjoying the good times.
The cacophony of uninformed voices should not impact decision making process of bank executives.
Facing criticism from the government over the central bank prioritising inflation over growth, the new RBI Governor Sanjay Malhotra on Monday said that prospects of the Indian economy are expected to improve on the back of high consumer and business confidence in 2025. "As we strive to preserve financial stability to support a higher growth path for the Indian economy, our focus remains steadfast on maintaining stability of financial institutions and, more broadly, systemic stability," Malhotra said in foreword to the Financial Stability Report.
'Chasing sectors which have reported strongest earnings is not always the right strategy for outperformance.'
