Overall, from a three- to five-year perspective, prospects of the Indian economy and consequently the banking sector are promising.
Banks are now asking developers to lower prices to clear their piled-up inventory. In fact, clearing of inventories is a key pre-condition for loan restructuring when the realtors approach lenders, executives at various banks said. Public sector banks, in particular, are asking the builders to justify the offer price of projects as there are apprehensions that real estate companies are holding on to stocks after the payment of instalments is rescheduled.
Of the three major Budget announcements related to the banking sector, privatisation of PSBs is the most audacious, says Tamal Bandyopadhyay.
In a move that is likely to attract political controversy, the committee on financial sector assessment has recommended that the banking sector should be gradually opened to foreign players and that the government lower its shareholding in public sector banks below 51 per cent and allow state-owned players to merge if the Centre's stake cannot go below the prescribed lower limit.
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.
As banks' chase for customers to collect cheap deposits is not fructifying, they are forced to offer inflation-beating real interest rates on fixed deposits now, and state-run banks led by Punjab & Sind Bank tops the chart offering 8-8.50 per cent per annum deposit rate. Banks are forced to offer inflation-beating deposit rates for a tenor ranging from 200 to 800 days as credit growth has been far outpacing deposit mobilization throughout this fiscal, leading to a funding crunch.
The decision in this regard, however, is expected to be taken by the new government.
The Government of India amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from countries which share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security, an official statement said.
Small charges might seem inconsequential. They can pile up, though.
The gross non-performing assets of public sector banks rose to 6.03% at the end of June.
Banks to be permitted to raise long-term funds for lending to infrastructure sector with minimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending.
It said banks' asset quality will deteriorate across the corporate, small and medium enterprises and retail segments, leading to pressure on profitability and capital.
'It is observed that some of our branches are already losing good balances in their savings deposits as well as fixed deposits, which are maturing, to the other banks.'
Notwithstanding the recent sharp decline in the stocks of public sector companies, analysts at Jefferies remain bullish on this segment. State Bank of India, Coal India, and NTPC are their top picks in this space, they said in a recent note. The public sector undertaking (PSU) or state-owned enterprise (SOE) index, with a 70-percentage-point outperformance versus the National Stock Exchange Nifty50 over the past 12 months, comes after a decade of underperformance before 2020.
Recently, CVC suggested that banks have a monitoring mechanism for bad loan sales to ARCs, with the cash flow statement from stressed assets shared with banks.
Non-performing assets of banks have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.
Bain Capital-backed Tyger Capital is planning to list its shares on the Indian stock exchanges by the next financial year and is targeting to grow its assets under management by four times to Rs 20,000 crore in five years from Rs 5,000 crore now, Gaurav Gupta, MD and CEO of the firm said. In an exclusive interview, Gupta said that keeping with the growing business, the finance company expects to on-board 600 people in the current financial year as it is opening 60-65 new branches for broad-basing its network in the country.
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.
Coming down heavily on banks for not optimally leveraging technology, the Reserve Bank of India (RBI) said there was clear lack of vision among banks in rolling out customer-friendly technology.
The year 2014-15 could well go as one of long-pending financial sector reforms, expected to have a lasting impact.
There would be no retrenchment of employees and that their services conditions would also not be affected post merger.
Also on agenda is rising credit flow to MSMEs & farm sector.
'Many global investors have been overweight on dollar assets, so some diversification or hedging is naturally expected.'
The financial sector will have reason to cheer in the next few months, says the government
'So far as supervision is concerned, there are enough powers but to take action on public sector banks, consultation with the government is needed.'
Some lenders in talks with LIC for pvt placement
Restoring the bank to its former glory will be the top priority for Vijayalakshmi Iyer, the seasoned banker who took over as chairperson and managing director of the Mumbai-based bank last month.
It's been bright times for banking sector stocks, ever since the passage of the Securitisation Act in November 2002.
'The pricing model will be different. The product will be different.'
Gross NPAs of public sector banks were Rs 41,378 crore (Rs 413.78 billion) in March 2006, which came down to Rs 38,305 crore (Rs 383.05 billion) in March 2007 because of better economic environment.
Govt renews search for five PSU bank chiefs; norms relaxed.
The candidate will be expected to have at least two to three years of remaining service.
Banks will not lend below the minimum or base interest rate from Thursday as directed by RBI, but may continue to give cheaper credit to some preferred clients as per their discretion under existing agreements.
It will be a public sector bank and Rs 1,000 crore has been allocated to it.
'What we need to watch is how Saudi Arabia's financial assistance will be used by Pakistan. If the funds go to build their military hardware and operations, it should worry us.'
The government on Tuesday gave greater autonomy to state-run banks, allowing them make domestic and overseas acquisitions without its approval.
The finance minister, in her Budget speech, should focus more on what she is directly responsible for, rather than on programmes where her role is largely supportive, notes Nitin Desai.
Besides being reasonably valued, the Indian Bank IPO has many triggers.
Canara Bank, India's second largest public sector bank, is all set for an aggressive play in the venture capital business.
