Union Finance Minister Nirmala Sitharaman, along with her team of bureaucrats, delved into the fine print of the 2024-25 Budget documents in a press conference, detailing the government's road map on bringing down the debt-to-GDP ratio and bold tax measures.
In the June quarter of FY24, 51 per cent of consumers who took small-ticket personal loans already had more than four credit products at the time of accessing yet another new loan, compared with just 17 per cent in the June quarter of FY20, points out Tamal Bandyopadhyay.
'They have since only tried to improve systems. Also, with regulatory guidance from time to time, we are in a position to assess a situation and react in time.'
State Bank of India's earnings growth may turn lacklustre in the near-term, warn analysts. This, they said, could be due to margin compression and likely lower fee income over the next one year. "While the cost of deposits is repricing sharply across the system, there will be relatively lower yield expansion going ahead as most of the back-book has been repriced and there is a high competitive pressure on yields.
Bandhan Bank has declared disappointing results for the first quarter of the 2023-24 financial year (Q1FY24). While the market has been braced for known issues around microfinance exposures in West Bengal and Assam, there is higher stress in the portfolio. This means higher credit costs and poorer asset quality, leading to target downgrades by analysts.
We must stop stigmatising business failures. Particularly when startups are mushrooming all around, the financial system, backed by the RBI and the government, can explore ways of extending support to restart the journey of a failed entrepreneur by finance as well as counselling, recommends Tamal Bandyopadhyay.
It had been pointed out to the banking regulator that one-day default was difficult to monitor in large companies, especially where cash flows are dependent on government payments.
The focus of the meeting will be on enabling businesses and households to avail of the revival framework on the basis of viability, necessary steps like finalising bank policies and identifying borrowers, and discussing issues that require addressing for smooth and speedy implementation.
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
'The approach today is, instead of giving loans to 100 MSMEs, let us give one loan to a big-ticket corporate.' 'And so many of these big fish deceived the banks and the banks are in the doldrums now with high NPAs.'
The NDA government will be following the footsteps of its predecessor, the UPA, which had introduced the concept of "loan mela" to boost credit by directing banks to lend to people through public meetings.
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.
The finance minister chaired a meeting through video conference with major private banks and NBFCs to ensure effective rollout of ECLGS and uninterrupted liquidity to Indian MSMEs in this difficult time.
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.
Move to increase 90-day window to 120 days to give more time to borrowers to service loans.
Rating agency ICRA on Wednesday revised down its credit growth outlook for banks to 2-3 per cent for the current fiscal, and said the coronavirus pandemic-driven stress may leave 3.1-3.7 per cent of assets into bad loan list by March.
Not all NPAs are treated as wilful defaulters.
The Union Cabinet on Wednesday approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis. The ECLGS was the second-biggest component of Rs 21 lakh crore comprehensive package announced by Finance Minister Nirmala Sitharaman last week.
The Directorate General of Civil Aviation has been asked to open up bookings of SpiceJet till March 31, 2015, while airport operators have been asked to provide 15 days to the airline company for making payments.
'Fear psychosis has gripped the entire world.' 'Nobody is going to enter shops freely in the next 5, 6 months.' 'Secondly, the priority has changed.' 'Now that they have seen the bottom of the economy, people will prefer to save for tomorrow.'
RBI said the improvement in asset quality was driven by state-run lenders which saw a drop both in both GNPA and in the net NPA ratios.
'When there is unlocking, there is demand revival.' 'This is going to be the main growth engine in this kind of an economic scenario.'
'We do not know when we will get to the business-as-usual mode.' 'Many borrowers may not be able to pay up.' 'The incidence of cheque bouncing has doubled or even trebled, some lenders say,' says Tamal Bandyopadhyay.
Banks, through the Indian Banks' Association, have urged RBI and credit information companies to maintain a database of wilful defaulters.
Banks given 180-day time for NPA resolution, matter to be referred to Insolvency Board within 15 days.
If a holiday, banks will have to report the details on the next working day.
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