The overall debt servicing metrics of Indian corporates are weak.
Subbarao also warned of attrition in PSBs, saying, "PSBs will lose talent to the private sector."
The finance ministry is considering a proposal by Indian Bank's Association to give post allowance to chairmen and executive directors of public sector banks, a key official said on Tuesday.
A major reshuffle of top executives in 11 PSU banks is on the cards with the chairmen of Allahabad Bank, Corporation Bank, Syndicate Bank, Union Bank of India and Vijaya Bank slated to retire between March-July 2006.
Among Sensex firms, Trent, ICICI Bank, Tech Mahindra, Bajaj Finserv, Mahindra & Mahindra, Power Grid, Tata Consultancy Services and Bajaj Finance were the major laggards. However, Tata Steel, Larsen & Toubro, State Bank of India, Kotak Mahindra Bank were among the major gainers.
The re-invention that PSU banks have undergone recently is a great story.
'I would say restore the banks to health, get active board composed of professionals, then there will be an ideal situation for merger.'
The rally followed the govt's plan to bolster state-owned lenders.
As of June, the gross NPA of nationalised banks was 3.89 per cent and State Bank Group at 5.50 per cent.
If they are made accountable, bad loan cases will shrink dramatically, recoveries will rise, and the NCLT process will be more manageable, asserts Debashis Basu.
A section of the public sector banking employees will go on two-day all-India strike from Wednesday to protest against financial sector reforms and outsourcing of jobs.
The World Bank and India have concluded negotiations for loans worth $3.2 billion for recapitalising state-run banks and funding for the India Infrastructure Finance Company Ltd, a state-run lender to infrastructure projects.
The finance ministry has directed all state-owned banks to review their gold loan portfolio as instances of non-compliance with regulatory norms have been noticed by the government. The Department of Financial Services (DFS) in a communication addressed to heads of public sector banks has asked them to look at their system and processes related to gold loan. "We have asked banks to undertake comprehensive review of the gold loan business," financial services secretary Vivek Joshi told PTI.
The decision to increase the quantum of capital infusion was taken at a meeting between Finance Minister P Chidambaram, RBI Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram in New Delhi.
PNB reported the maximum number of such frauds.
The country's largest public sector lender State Bank of India on Monday fixed its benchmark lending rate at 7.5 per cent following a Reserve Bank directive, a move that will end the practice of sub-prime loan to corporates.
Activity in the corporate bond market is set to gain momentum following a 25-bp policy repo rate cut by the rate-setting panel of the Reserve Bank of India (RBI). State-owned public cebPower Finance Corporation (PFC) and Small Industries Development Bank of India (Sidbi) are planning to raise up to Rs 11,500 crore through bonds on Tuesday as issuers expect borrowing costs to ease.
The Finance Ministry has called a meeting of heads of public sector banks to clear stalled projects.
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.
Finance Minister P Chidambaram on Wednesday said public sector banks plan to hire 50,000 persons and open 10,000 branches in the current fiscal.
PSU bank stocks held the market's attention in morning trades on Tuesday as there's much anticipation that the Union Budget for 2003-04 may bring about the raising of foreign holding ceiling in these banks.
Tata Motors was the biggest gainer in the Sensex pack, rallying 2.94 per cent. It was followed by Vedanta, Bajaj Finance, Sun Pharma, ONGC, ICICI Bank, Bajaj Auto, Tata Steel, RIL, HDFC duo, L&T and SBI, rising up to 2.78 per cent.
Central Bank of India's 21.5 per cent assets are either bad or have been restructured.
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".
Bank of India, Canara Bank, Dena Bank, Corporation Bank and Andhra Bank are among the lenders that received capital infusion from the government.
'Defence, capital goods, engineering, capital market-related stocks, autos, and cement sectors are my bullish bets for Samvat 2082.'
The pace of loan growth among public sector banks (PSBs) has seen a surge in the financial year 2024-25, and this is an exception to the overall moderation in bank credit during FY25. PSU banks' share in incremental credit rose to 57.3 per cent in March from 51.7 per cent a year ago, according to the Reserve Bank of India's (RBI's) Monetary Policy Report (April 2025).
For the first time, PSU banks will have a non-executive chairman, giving operational responsibility to managing director and chief executive officer.
These PSU banks also account for the lion's share of bad loans or NPAs plaguing the sector and need crores of rupees in new capital in the next two years to meet global Basel III capital norms.
SBI, PNB, Bank of Baroda, Canara Bank, Dena Bank, Central Bank of India ended down 3%-12% each.
Arun Jaitley had promised to provide more than the budgeted amount.
The bank unions had threatened to go on 4-day strike from February 25.
Reliance Industries' refining earnings will remain steady, supported by its position as India's largest importer of Russian crude and favourable global supplies, according to analysts at JM Financial and Goldman Sachs. Reliance imported more Russian barrels than any other Indian refiner in the past eight months, according to data from Bloomberg/Kpler.
Jaitley said the total gross NPA ratio has gone up to 4.03 per cent in 2013-14 from 3.42 per cent in 2012-13 and 2.94 per cent in 2011-12.
Finance Minister Nirmala Sitharaman on Tuesday held a review meeting on credit guarantee scheme with heads of public sector banks, and asked them to expedite loan disbursement under the Rs 3-lakh crore ECLGS for MSME sector, hit hard by coronavirus-induced lockdown. The meeting on Emergency Credit Line Guarantee Scheme (ECLGS) was held through video conference, and the minister appreciated the efforts of banks in execution of the scheme.
RBI Governor Raghuram Rajan on Tuesday said the Finance Ministry's decision to provide more capital to PSU banks will lower the borrowing cost and increase their capacity to lend, besides promoting investments.
The central government is looking to strengthen the boards of public sector banks (PSBs) by specifying terms of office and conditions of service for whole-time directors, and also seeking disclosures from all directors about interests in other companies. Through the Banking Laws Amendment Bill, the government is likely to introduce conditions for disqualification of whole-time and independent directors which are not specified in the current legislation. The Centre is seeking to introduce fresh changes that are aimed at strengthening the boards of PSBs, and holding their directors accountable, an official said.
After the finance minister directed public sector banks to join the account aggregator (AA) ecosystem, 5-6 major ones, including State Bank of India (SBI) and Bank of Baroda are expected to go live by July-end. Sahmati, an industry alliance for the AA ecosystem, has been working with PSU banks to get them onboarded for quite some time now. So far, Union Bank of India and Punjab National Bank (PNB) have gone live on the AA ecosystem. While Union Bank has been live for a while, PNB went live earlier this month.
Despite high exposure of public sector banks to power, iron and steel sectors, analysts remain in a wait-and-watch mode.
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