The RBI has been critical of banks for using restructuring schemes to hide the stress.
The career bureaucrat-turned-central banker walked into the 19th floor corner room of the Reserve Bank on December 12, 2018. Since February 2019, the Das-led RBI has cut the repo rate by a whopping 135 basis points to support the sagging growth, including an unprecedented 35 bps reduction in August. As he completes one year at the helm, woes in the NBFC sector, overall health of the banking sector and steeply falling economic growth are among the major challenges that needs to be tackled sooner than later.
The BSE Sensex spurted 130.00 points to end at 35,980.93, while the broader NSE Nifty advanced 30.35 points to 10,802.15.
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The Reserve Bank on Monday warned lenders against outsourcing their credit processing activities to third-party entities.
Besides 15 loan transactions to the Siva group of companies, the former directors also used unique methods to ensure the group did not get into the default list.
'We focused on de-risking our balance sheet but we are very clear that the steps we have taken over the past few years, about changing the proportion of the loan mix, improving the ratings of the incremental portfolio, and reducing the concentration risks have now created a strong position that will allow us to attain growth with stability.'
With strong long-term fundamentals, banking sector cannot be completely ignored
Shareholder advisory companies are raising eyebrows at the ICICI Bank board not being aware of Firstland's investment in NuPower
The government on Friday gave wide-ranging legislative powers to the Reserve Bank of India to issue directions to lenders to initiate insolvency proceedings for the recovery of bad loans.
Agency sources said that besides Mallya, his companies Kingfisher Airlines and United Breweries Holdings Limited have been named as accused in the FIR.
The decision in this regard, however, is expected to be taken by the new government.
While naysayers say the economy is on a downward spiral, optimists point out that India has experienced a shift of gears in the realm of policies, thanks to several initiatives of the Narendra Modi government, says Ashok K Lahiri.
The BSE Sensex gained 104.63 points to end at 33,147.13, while the broader Nifty spurted 48.45 points to finish at 10,343.80.
Public banks may have a tough time in 2015 as they had to write off Rs 1 trillion.
The benchmark Sensex gained 4,642.84 points, or 16.%, while the broader NSE Nifty surged 1,572.85 points, or 18.20% during this period.
RBI may also be open to injecting liquidity through open market purchases of bonds but is resisting relaxing capital buffers for banks.
In the broader market, the S&P BSE Midcap ended 0.1% down, while the S&P BSE Smallcap index gained 0.3%.
The RBI is exploring ways to allow banks more flexibility in loan restructuring.
Despite the possibility of the economy bottoming out, the investment cycle could remain weak for another couple of years and earnings downgrades should continue.
The wider NSE Nifty touched a low of 10,652.40 before finishing at 10,671.40, showing a loss of 97.75 points, or 0.91 per cent.
Under the Indradhanush roadmap announced in 2015, the government will infuse Rs 70,000 crore in state banks over four years while they will have to raise a further Rs 1.1 trillion from the markets to meet their capital requirement in line with global risk norms, known as Basel III.
Yashwant Sinha explains where the Modi government has gone wrong in its handling of the economy.
If you want to apply for a job at State Bank of India (SBI), any default on loans or credit card payment will render your ineligible.
The rise in government borrowings through bonds is impeding the growth of the corporate debt market in the country.
The session was marked by volatility and stock-specific action, even as the overall sentiment remains risk-averse, brokers said.
The regulator will now call Chanda and ICICI Bank's representatives for a personal hearing as part of adjudication proceedings launched against them.
The RBI, in a notification, said that it is necessary to build a repository of large credits and share with the banks for enabling them to be aware of building leverage and common exposures.
The 50-share NSE Nifty ended at 9,143.80, up 43 points, or 0.47 per cent, after moving between 9,153.15 and 9,109.10.
In a soon to be published book, 'Of Counsel: The Challenges of the Modi-Jaitley Economy,' former chief economic advisor Arvind Subramanian says though RBI has a good reputation, it does not mean it's always right, as for years, the RBI was unable to grasp the seriousness of the loan repayment problems or identify the prolonged frauds of Nirav Modi and the likes.
'One by one we are seeing these private banks taking people's money and mismanaging it.' 'In the last 30 years, 30 private banks have collapsed.' 'Nationalise all banks so that people's money is safe.'
The circular says even a day's delay in servicing loans would be now taken as a 'default'. And once in default, for loans above Rs 2,000 crore, the banks will have to arrive at a resolution within 180 days, else lenders will have to file an application under the IBC within 15 days.
There were more than three losers against every gainer on BSE
'There are many cases where a company hits the wall because of reasons not under their control.' 'If you do not understand and appreciate that and paint all promoters with the same brush then definitely you are inviting trouble.'
Nifty PSU bank index dropped nearly 2%
Those behind recapitalisation are neither aware nor do they care. After all, they have no skin in this game. And the Lok Sabha elections are round the corner. That's what they care about, points out Debashis Basu.
NPA issues in the banking sector, standoffs in Parliament denting the reform momentum and limited space on the fiscal side are among the major concerns for investors.
Valued at $71.2 billion, the bank's market capitalisation is more than that of global banks like Barclays, JP Morgan Chase and Credit Suisse.
'Investors should not commit fresh money to these stocks right now, unless they can hold for the next three to four years.'
At India Economic Convention organised by India Foundation, Parekh said the country needs $1 trillion in the 12th Plan of which 47 per cent was to come from private sector, but it has not happened in the first two years of the Plan period.
'You peel one layer, then another layer, then another, but in the end, you will see that there is no onion inside.' 'This package has been packaged well, but there is nothing much inside the package!'
