Public banks may have a tough time in 2015 as they had to write off Rs 1 trillion.
Govt renews search for five PSU bank chiefs; norms relaxed.
The decision in this regard, however, is expected to be taken by the new government.
Finance Minister Arun Jaitley on Sunday said the government is planning to bring down its stake in public sector banks to 52 per cent so as to meet Rs 3 lakh crore capital requirement.
So, the next time someone tempts you with a slightly higher FD rate from a lesser-known bank, point them to hybrid funds that can deliver extra returns without the administrative and emotional rollercoaster.
'Investing in these funds makes sense if their net yield over better-quality funds -- corporate bond funds or banking and PSU funds -- is meaningful.'
Most of the lenders had informed their customers in advance about the strike call given by All India Bank Employees Association (AIBEA), All India Bank Officers' Association (AIBOA), BEFI, INBEF, INBOC and Bank Karmachari Sena Mahasangh (BKSM), and its impact on banking services.
Public sector banks have raked in more profits in the three months ended June on the back of a persistent decline in bad loans and the trend may have a positive bearing on their balance sheets in the coming quarters. In the June quarter, Bank of Maharashtra (BoM) and State Bank of India (SBI) were in the lowest quartile as far as Gross Non Performing Assets (NPAs) and net NPAs were concerned, according to an analysis of the quarterly financial numbers published by the public sector lenders. Cumulatively, all the 12 public sector banks reported a profit of about Rs 15,306 crore in the three months ended June, registering an annual growth of 9.2 per cent. However, leading public sector lenders -- SBI and PNB -- posted lower profits in the June quarter.
'Those betting against PSUs will likely be punished in this upswing.'
Goldman Sachs is bullish about Indian aerospace and defence, preferring private companies over public sector units (PSUs) as the country ramps up its export target for the sector to Rs 50,000 crore by FY29 from Rs 23,600 crore last year. The American investment bank's top 'buy' recommendations include Solar Industries, Bharat Electronics, Data Patterns and PTC Industries, while Bharat Dynamics is rated 'sell'.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
Bad loans in public sector banks more than tripled.
Employees of public sector banks on Wednesday withdrew their proposed strike on Friday, called to protest the cases filed by the management of Central Bank of India against its employees for going on strike last month.
Employees of public sector banks have called off the strike planned on February 25 and 26
RBI's interest rate decision, macroeconomic data announcements and global trends are the key factors that would dictate the momentum in the equity market this week, analysts said.
As the Indian banking sector is slowly discovering the growth potential of the retail segment, investors need to carefully evaluate the strategies of banks for the retail segment.
The government in the Budget 2021-22 has made an allocation of Rs 20,000 crore for the capital infusion in the state-owned banks. The capital position of banks would be reviewed in the next quarter, and depending on the requirement, the infusion will be made to meet the regulatory needs. In the current fiscal so far, all 12 public sector banks have posted a profit, which is being ploughed back to bolster the balance sheet of the banks, sources said.
Gross NPA of PSBs at the end of March quarter stood at 5.20 per cent, against 5.63 per cent in December.
The performance of banking and information technology (IT) stocks has had a significant impact on the composition of diversified mutual fund (MF) portfolios. Over the past two months, these sectors have become increasingly dominant, now constituting nearly 30 per cent of the total allocation in many diversified MF portfolios.
Some of the public banks showed improvement; much more still needs to be done
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.
Bank of Baroda has relatively better position on impaired assets.
Employees of public sector banks (PSBs) on Thursday went on two-day strike against the move to privatise public sector banks impacting normal banking operation across the country. Many branches across different parts of the country were shut as the United Forum of Bank Union (UFBU), an umbrella body of nine bank unions including All India Bank Officers' Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers (NOBW) had given two day strike call. As a result, services such as deposits and withdrawal at branches, cheque clearance and loan approvals might be affected due to the strike. But ATMs are expected to function as usual.
Although private banks continued to operate as usual majority of trade and industry was hit by the strike by staff of 25 nationalised banks who are demanding revision of wages and a second option for pension among other things. The Indian Banks' Association, a grouping of public sector banks, is yet to formally respond to the demands of the striking employees.
Public sector banks have performed better than their private sector counterparts in customer service.
This comes after the arrest of Syndicate Bank Chairman S K jain.
Public sector lenders Canara Bank, Corporation Bank and Allahabad Bank have decided to lower interest rates on housing loans, preferring to keep their prime lending rates (PLRs) unchanged. ICICI Bank Managing Director and Chief Executive Officer K V Kamath has indicated that the country's second largest bank would review interest rates only in 2008-09.
At least two public sector banks Union Bank of India and Indian Overseas Bank have quietly increased interest rates on short-term deposits to raise resources and manage asset-liability mismatch. Union Bank has announced a special deposit scheme for 400 days, which offers 9 per cent interest. The scheme was launched much before the announcement of the monetary policy. Chennai-based Indian Overseas Bank has also raised rates for large deposits.
Finance Minister Chidambaram has summoned chiefs of public sector banks on May 1. This meeting will be held 2 days after the annual credit policy to review their financial performance in 2007-08. The move is being seen in banking circles as a message from the Centre to ensure that the public sector does not take interest rate cues from the central bank alone. Detailed agenda of the meeting has not been circulated. Bankers are waiting for signals from the RBI's monetary policy
Global brokerage CLSA has lowered its target price for IndusInd Bank from Rs 1,200 to Rs 900 while maintaining an outperform rating on the stock after the private lender disclosed a net worth hit of Rs 1,500 crore due to an accounting gap. The revised price target still implies an upside of 34 per cent from current levels.
Jaitley said there was a need for the banking sector to fund infrastructure and manufacturing sectors to support the ambitions of higher growth.
Amid stiff competition from private and foreign players, the country's 27 public sector banks logged 35 per cent growth in profit at Rs 16,546 crore (Rs 165.46 billion) while their bad assets fell below 3 per cent during 2003-04.
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