'The new ceiling will cover around 93 per cent of all deposit accounts, up from 90 per cent earlier,' notes Tamal Bandyopadhyay.
'We may bite the bullet and draw up plans for privatisation.' 'If that is done now, the sale of the government stake will fetch money; a delay will see erosion in whatever value is left in these banks,' says Tamal Bandyopadhyay.
'When bankers are hounded by investigative agencies for credit decisions going wrong and defaulters are treated like outcasts, who will borrow money and who will lend?' asks Tamal Bandyopadhyay.
Women dominate Indian banks's clerical and officer rolls, but few make it to the executive office these days, notes Tamal Bandyopadhyay.
Individual banks should break away from the industry pact and have their own settlements with the unions, recommends Tamal Bandyopadhyay.
'The no-rate cut policy and preference to wait for the Budget and clarity on the fiscal front demonstrate RBI Governor Shaktikanta Das is maturing in his new role,' notes Tamal Bandyopadhyay.
The story of Sahara India Pariwar founder Subrata Roy, who died in Mumbai on November 14 aged 75, is the stuff of movies - of a spectacular rise and an equally spectacular fall. Born in Araria, Bihar, Roy was 30 when he set up Sahara in 1978. He started with a capital of about Rs 2,000, a peon, a clerk and his father's Lambretta scooter in Gorakhpur, eastern Uttar Pradesh, writes Tamal Bandyopadhyay in his 2014 book, Sahara: The Untold Story. Sahara was not his first venture.
Its obsession for growth, chasing corporate clients and giving up its original mandate of meeting the needs of local trade and businesses. A quarter of its loan book has gone bad. That's an error of business strategy, points out Tamal Bandyopadhyay.
Fix India's real estate sector. Fix India's public sector banks, advises Tamal Bandyopadhyay.
'It's a toss-up between a fire sale of equity or merger with a strong bank,' points out Tamal Bandyopadhyay.
Not all public sector banks are back in the black, but their collective net profit for the year is Rs 32,346 crore against a Rs 9,013 crore loss in the previous year, points out Tamal Bandyopadhyay.
'We can't have the best of both worlds -- large, efficient, world class government-owned banks, doing social banking and making profits. 'Why not set them free from the shackles of such obligations and run them as business units?' says Tamal Bandyopadhyay.
If banks cannot charge interest from borrowers during the moratorium, who will bear that cost? Should the depositors subsidise the borrowers by foregoing interest on deposits? In that case, we will turn banking on its head! notes Tamal Bandyopadhyay.
Under the watchful eyes of five wise men, who know the industry well, banks will not find it easy to hoodwink the system, says Tamal Bandyopadhyay.
'We get to know secrets such as some of India's top-rated firms do not always make payments when due and many State-owned, listed, enterprises that borrow in bond markets default regularly.' 'Without naming the bank, he says that ever-greening of poor loans by a part of India's shadow banking lay at the doorstep of India's banking, notably 'one private bank'.' Viral Acharya's Quest for Restoring Financial Stability in India won't be music to many ears, observes Tamal Bandyopadhyay.
Apart from navigating the bank through the Covid crisis, Jagdishan may also have to deal with the latest development on the auto loan lending practice scam. He will be expected to deliver consistent profit growth of 20 per cent-plus quarter after quarter, irrespective of the operating environment.
'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.'
'As banks grapple with risk aversion and savers see an erosion in the value of money, the P2P platform can be a win-win for both borrowers and lenders,' notes Tamal Bandyopadhyay.
Mired in corruption, politics and with a history of suicides by its hapless depositors, PMC Bank's revival is a challenge very different from Yes Bank and LVB, both for the regulator and the rescuer, observes Tamal Bandyopadhyay.
None of the four benchmarks suggested by the RBI is ideal as banks in India create loan assets from their deposits and not borrowing from the regulator or market, says Tamal Bandyopadhyay.
Why do we need a bad bank, owned by the banks themselves when there are at least 28 ARCs around, asks Tamal Bandyopadhyay.
'In times of recovery, we may see a rural-urban divide with the urban pockets affected more by COVID-19, but the MFI business model should encourage banks to handhold them in this hour of crisis,' notes Tamal Bandyopadhyay.
Woefully inadequate infrastructure is just one of the many reasons why a case is not settled within 180 days and even 270 days as envisaged by the law, says Tamal Bandyopadhyay.
'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.
The evolving RBI-government relationship, a reversal in the interest rate cycle and return to profitability will dominate bankers' conversation this year, says Tamal Bandyopadhyay.
The speed at which he led the central bank in different areas -- ranging from internal reorganisation to inflation fighting, stabilising the currency, taking on rogue corporations, cleaning up bank balance sheets, and opening the sector -- makes one believe that Rajan knew he had only three years to do his job. A fascinating excerpt from Tamal Bandyopadhyay's MUST-READ Roller Coaster: An Affair with Banking.
If indeed we want the board to manage the RBI, probably the government should take a close look at the US Federal Reserve system which has a two-part structure - a central authority in Washington, DC, and a decentralised network of 12 Federal Reserve Banks located throughout the country, says Tamal Bandyopadhyay.
'The RBI has not allowed any commercial bank to fail in the past three decades.' 'It has always played the role of a matchmaker, but this is the best deal it has stitched,' notes Tamal Bandyopadhyay.
Spare the serious entrepreneurs but don't allow the rogues to use the shield of secrecy, writes Tamal Spare the serious entrepreneurs but don't allow the rogues to use the shield of secrecy, says Tamal Bandyopadhyay.
'The snakes and ladders game will continue till the consolidation process is complete simply because we don't know how bad the scene is, with some of the banks being merged,' says Tamal Bandyopadhyay.
There is a dearth of talent in the Indian banking industry. A testimony to this is the two new CEOs in the private sector -- Sandeep Bakhshi in ICICI Bank Ltd and Amitabh Chaudhry in AXIS Bank Ltd -- have come from the insurance sector, says Tamal Bandyopadhyay.
Most of the NBFCs do not take public deposits but that does not mean they cannot create systemic risks. The banking system has at least Rs 57,000 crore exposure to IL&FS. Haven't the banks invested public money in IL&FS papers, asks Tamal Bandyopadhyay.
Since March 31, 2022, the PSBs' market cap has risen 43.7 per cent, from Rs. 7.29 trillion to Rs. 10.47 trillion. It's time for the government, the majority owner of public sector banks, to reap the benefit of the rally in bank stocks, recommends Tamal Bandyopadhyay.
This is one of the many such cases that helped to create an acute fear psychosis among public sector bankers, reveals Tamal Bandyopadhyay in his fascinating new book Pandemonium: The Great Indian Banking Tragedy.
If indeed the gate opens for big industrial houses, the RBI needs to be smarter than them and demonstrate it through action, not reaction, observes Tamal Bandyopadhyay.
Enjoying the backing of the regulator, Gill has identified the core problems, ring-fenced the banks from "influencers" and is in the process of building a new team. Now, he needs to play a Vikram Pandit for YES Bank, says Tamal Bandyopadhyay.
The origin of the challenge is the so-called "fresh start" process. Many in the MFI industry apprehend that such a law in India will encourage small unsecured borrowers to default and destroy the credit culture. So, while'Fresh start' is a welcome step as it will free up the debtors from the archaic laws of the colonial era, debtors need handholding and counselling to prevent any misuse, says Tamal Bandyopadhyay.
'In their over-enthusiasm to clean up the system, both the banks and the regulator should not forget that the key to the insolvency law is revival of companies -- recovery of bank dues is an offshoot of that,' points out Tamal Bandyopadhyay.
The RBI wants to include shares and options within the variable salary of the CEOs, proposed to be capped at 200 per cent of their fixed salary; the floor for it is 50 per cent.
While IDBI Bank's 140 million customers and 1800-odd branches will come in handy for LIC to hawk insurance, the bank can use LIC's massive agent network to sell its retail loans. But if it is run the same way it had been in the past and LIC is a proxy of the government, then it has no future, says Tamal Bandyopadhyay.
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