Public sector banks have suddenly developed cold feet on raising lending rates even if it means sacrificing on their bottom lines.
While near-term performance is difficult to predict after a huge run-up, fund managers believe the PSU theme's prospects remain sound over the medium to long term.
The nation-wide strike call has been given by United Forum of Bank Unions, consisting of nine national level unions, including AIBEA, NCBE, BEFI, INBEF, NOBW and AIBOC.
The UFBU is an umbrella body of nine bank employees unions of the country and claims to have members from public, private and foreign banks. "We are on strike from today as Indian Banks' Association did not concede to the bank unions demand for the wage hike," said United Forum of Bank Unions convener C H Venkatachalam.
On government's last week's announcement of revamping of PSU banks, Fitch Ratings said the move is "credit positive, but risks remain".
"There has been (a) slowing down of credit growth... However, this slowing down of credit has indeed, to some extent, affected flow of credit in the housing sector and consumer durables sector," he told reporters after a review meeting with heads of PSU banks.
Jaitley said the government had earmarked Rs 25,000 crore (Rs 250 billion) for recapitalisation.
With recruitment numbers having dropped off sharply since the liberalisation process got under way in 1991, large-scale retirements of people hired during the 1970s and 1980s will leave large gaps in the organisational structures of these banks.
FDI rules announced last year changed the criteria of calculating these investments and included American depository receipts, global depository receipts and convertible shares also in that category.
A section of analysts feel now may not be a bad time to buy select PSBs.
Amid strong opposition from CIL workers union to the proposed stake sale in the company, Finance Minister P Chidambaram has said the disinvestment proceeds of about Rs 20,000 crore (Rs 200 billion) from the coal behemoth will be invested in public sector banks.
The current employee strength of all state-run banks is about 672,000.
The survey also suggested passage of the Banking Regulation (Amendment) Bill 2005. Noting that the credit market suffers from structural rigidities, the survey said, it may have been reinforced in the recent years due to a high credit demand encouraging the banks to raise deposits at higher rates for maintaining long term liquidity.
In eight cases, the banks would violate the minimum public shareholding norms if their promoter, the Government of India, infused capital as announced.
Sensex catapults 1,241 points and Nifty vaults 382 points in two sessions in a row.
Air India is understood be in negotiations with state-run banks to avail working capital loans at low interests.
However, the likely impact of strike may not be much excluding few areas, said SBI.
The minister said RBI maintains a list of non-suit filed borrowers of banks and financial institutions, while CIBIL had a database on suit-filed accounts of Rs 1 crore (Rs 10 million) and above.
The current process for selecting auditors could compromise their "independence".
IBA has commissioned a study to evaluate the pros and cons of keeping banks shut on Saturdays.
At present, 58 per cent of the population has bank account.
The posts of Chairman and MD in the private sector are held separately.
Capital needs are likely to increase substantially each year.
"If IBA does not come out with a solution with regard to our demands within given time-frame of three months ending on May 31, then we will be left with no option but to again adopt agitational path. And this time, we will observe indefinite strike," All India Bank Officers' Confederation (a member of United Forum of Bank Unions) General Secretary Amar Pal said in Chandigarh on Monday during the 8th Triennial General Council meeting.
"I'm taking a minute to respond... I do respect Raghuram Rajan as a great scholar who chose to be in the central bank in India at a time when the Indian economy was all buoyant," Sitharaman said during the lecture organised by the Deepak and Neera Raj Centre on Indian Economic Policies of the Columbia University.
The government may delay Rs 14,000 crore (Rs 140 billion) fund infusion in the public sector banks in view of volatile market conditions.
The ministry has sought information on posts for which regular recruitment is made; expected parameters for the said posts; subjects for tests; and training modules.
The meeting with the top officials of public sector banks is scheduled for March 5, a senior finance ministry official told PTI.
India's corporate bond market, driven by public sector undertaking (PSU) banks and financial institutions last year, is losing momentum since the second quarter of FY26.
The All India Insurance Employees' Association has opposed the government directive seeking to open up top posts in the state-owned insurers to the private sector, saying this would lead to greater private influence and "eventual privatisation".
Threatening to go on strike for three days from March 28 followed by indenifite strike from May, public sector bank employees organised a march to Parliament on Monday to press for their pension-related demands among other matters.
Transcript of the weekly market chat on rediff on Tuesday.
In May, MFs were the net sellers in several PSUs, as they deployed Rs 47,600 crore in equities during the month.
As per the structure proposed, 99 per cent of government holding in the bank will be shifted to the Holding Company and the government will retain 1 per cent with itself so that it remains a state-owned bank.
In April 2004, the ministry had permitted banks to purchase new vehicles for replacement or otherwise on "need basis".
Finance Minister P Chidambaram is slated to meet bankers on November 18, to review performance of PSU banks and discuss ways of augmenting their capital by Rs 60,000 crore (Rs 600 billion) in the next 5-6 years.
'Defence, capital goods, engineering, capital market-related stocks, autos, and cement sectors are my bullish bets for Samvat 2082.'
Over 25,600 cases of banking fraud reported up to December 21, 2017, says Minister RS Prasad.
