The Kolkata-based UCO Bank will refund nearly Rs 4,000 crore (Rs 40 billion) to applicants who had bid for the bank's initial public offering last month, V P Shetty, chairman and managing director, UCO Bank, said on Friday.
The Union finance ministry will meet CEOs of public sector banks to discuss issues related to cybersecurity in the wake of the Rs 820 crore (Rs 8.2 billion) fraud that hit Kolkata-based UCO Bank last month.
The Union Finance Ministry on Tuesday said that aggregate business of public sector banks (PSBs) has shown strong growth of 11 per cent in the first half of the financial year 2024-25 (H1FY25) to touch Rs 236 trillion. The operating and net profit were also robust. At Rs 1.5 trillion, operating profit grew by 14.4 per cent year-on-year (Y-o-Y) while the net profit saw an impressive 25.6 per cent jump at Rs 85,520 crore in the first half of FY25.
The finance ministry is in favour of extending the August deadline for public sector banks (PSBs) as well as insurance companies to increase their minimum public shareholding (MPS) to the mandated 25 per cent, said a senior government official. "The election results will determine the course of action. "Most likely, those who did not receive an extension to meet the minimum shareholding norm will be granted one," the senior government official said.
At least 13 candidates are in the race for the position of managing director and chief executive officer (MD & CEO) of Punjab National Bank (PNB), the second-largest public sector bank (PSB), according to multiple sources familiar with the matter. "Among the candidates, some are executive directors (EDs) and managing directors in major PSBs. "Financial Services Institutions Bureau (FSIB) will conduct the interviews next month," said a source.
Most lenders that have reported their April-June business update posted slower growth in deposits sequentially as compared to the loan growth in the April-June quarter of 2024-25 (FY25). Current and savings account (CASA) deposits continue to face pressure. Private-sector lenders YES Bank, Bandhan Bank, and RBL Bank saw their deposit growth contract by 0.5 per cent, 1.5 per cent, and 2 per cent, respectively.
UCO Bank on Thursday reported a marginal increase in October-December quarter net profit at Rs 134 crore and also announced to raise Rs 200-400 crore via Tier-II capital to meet its future long-term advance commitments.
To check digital frauds, the government has disconnected 70 lakh mobile numbers so far involved in cybercrime or financial frauds, Financial Services Secretary Vivek Joshi said on Tuesday. Emerging from a meeting to discuss issues related to financial cyber security and increasing digital payment fraud, Joshi, who chaired the meeting, said banks have been asked to strengthen the system and processes in this regard. More such meetings would take place, he said, adding the next meeting is scheduled in January.
'We are also conducting ongoing training and grooming at the branch level to pre-empt such cyberattacks.'
UCO Bank, Bank of Maharashtra, Bank of India, Indian Overseas Bank, Indian Bank, and Central Bank of India don't have a non-executive chairman.
>It's not easy to predict the market. But there are at least two positive factors to back the PSU banks, explains Tamal Bandyopadhyay.
The Reserve Bank of India (RBI) has allowed the opening of nine special vostro accounts with two Indian lenders - Uco and IndusInd Bank - to facilitate overseas trade in rupee, Commerce Secretary Sunil Barthwal said on Tuesday. Apart from the domestic lenders, Russia's two largest banks - Sberbank and VTB Bank - are the first foreign lenders to have received approval from the central bank for settling international trade transactions in rupee. "Nine accounts have been opened. One each in Uco Bank, Sberbank, and VTB and six with IndusInd Bank. There are six different Russian banks who have opened special vostro account in IndusInd," Barthwal said.
'Probably revised guidelines will come, and then the real picture will emerge.'
The central government and the Reserve Bank of India have devised a country-specific plan towards implementation of overseas trade in rupee, people aware of the matter said. To start with, a small number of banks will be allowed to manage cross-border transactions in domestic currency with a particular country. "Small countries that are dollar-deficient have shown interest in doing trade in rupee.
Every defaulter is not a wilful defaulter who has the capability of paying back and is yet not servicing the bank loan, observes Tamal Bandyopadhyay.
Shares of public sector enterprises have corrected by up to 22 per cent month-to-date until March 19, 2024. Analysts attribute this steep fall to the valuation exuberance seen after a sharp run in these counters last year and suggest investors remain selective regarding the stocks in this space. "The rally in public sector undertaking (PSU) stocks has been stretched and sharp, although it is somewhat justified by improvements seen in earnings, operations, balance sheets, and overall profitability.
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.
UCO Bank mulls AT1 offering to raise Rs 1,000 cr.
According to the Central Bureau of Investigation, Gutte is one of the directors of Gangakhed Sugar and Energy Limited.
State Bank of India (SBI) is willing to work with Russian banks not facing sanctions and remain on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network to open a special rupee vostro account (SRVA) for invoicing in Indian currency. The country's largest lender in a statement said it has not been identified as the nodal bank for handling Russia-related transactions. In July, the Reserve Bank of India (RBI) allowed banks in India, including SBI, to open an SRVA to promote invoicing in Indian rupee, subject to certain safeguards. Accordingly, the bank in a statement said it is "making necessary arrangements and processing requests received from various banks, including Russian banks", following guidelines laid out by the RBI.
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.
The US Federal Reserve's interest rate decision, quarterly earnings of corporates and domestic macroeconomic data will influence trading in the equity market in a holiday-shortened week ahead, analysts said. Foreign funds' trading activity, monthly automobile sales data and global trends would also guide market movement this week, they added. Markets would remain closed on Monday on account of 'Maharashtra Day'.
As the fight for deposits intensifies, the cost of money will rise and the margin will be under further pressure, points out Tamal Bandyopadhyay.
Public sector banks' cumulative profit crossed the Rs 1 lakh crore-mark in the financial year ended March 2023, with market leader State Bank of India (SBI) accounting for nearly half of the total earnings. From posting a total net loss of Rs 85,390 crore in 2017-18, the Public Sector Banks (PSBs) have come a long way as their profit touched Rs 1,04,649 crore in 2022-23, according to an analysis of their financial results. These 12 PSBs witnessed 57 per cent increase in total profit compared to Rs 66,539.98 crore earned in 2021-22.
The first quarter of calendar 2023 will see new faces heading four large public-sector banks -- Canara Bank, Bank of Baroda, Indian Overseas Bank, and Bank of India.
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 PSBs ended up recording Rs 7,709 crore losses in the March quarter compared to the Rs 11,688 crore profits of their private peers,' reveals Tamal Bandyopadhyay.
Unlike any other business, banking is a turf where the captain's role is the most critical. Often a bank is defined by the personality of the CEO who runs it. Both HDFC Bank and Kotak Mahindra Bank are the creation of their CEOs, notes 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.
The Reserve Bank of India (RBI) has given its approval to two Russian banks for opening special vostro account for rupee trade. Sberbank, JSC VTB - the largest and second largest bank of Russia - are the first foreign lenders to receive this approval after the central bank announced the norms on INR trade in July. Both lenders have branch presence in India. Earlier this month, state-run UCO Bank received the RBI's approval to open a special Vostro account with Gazprombank of Russia. While the Kolkata-based lender is in the process of opening the account, the bank has received requests from various foreign lenders for opening such an account.
The Union government will soon make amendments to the foreign trade policy (FTP) to enable exporters to claim export benefits for settling trade in rupees. These benefits are, so far, available for export payments received in foreign currencies. After the Reserve Bank of India (RBI) unveiled a mechanism to settle international trade transactions in the local currency on Monday, exporters have been demanding that the Ministry of Commerce and Industry come up with a clarification on the matter.
The government has already announced infusion of Rs 10,086 crore in Bank of India, Rs 5,500 crore in Oriental Bank of Commerce and Rs 2,159 in United Bank of India.
What is more surprising is that a surge in Russian oil supplies has come after the G7 imposed stringent sanctions on Moscow.
Exuding confidence in sustaining the tempo of credit growth, public sector bankers said on Wednesday that consolidation in the public sector bank (PSB) space has given them a robust base to scale. The privatisation of PSBs can be done through divestment of government stake to a wider base of investors without haste. There is nothing to worry about at this point (high credit offtake) as underwriting standards and risk management are much better.
It won't be easy for the banking sector to better its performance every quarter, predicts Tamal Bandyopadhyay.
A special Central Bureau of Investigation court in Mumbai has convicted four former bank officials in one of the multi-crore securities scam cases and sentenced them to three years imprisonment, 25 years after the scam involving 'Big Bull' Harshad Mehta came to the fore.
The meeting is expected to chart a road map for cleaning up their balance sheets and boost credit flows, reports Somesh Jha.
Banks have raised concerns over the new international trade settlement in rupee, fearing that facilitation of such a mechanism could result in them facing the ire of economic sanctions by the West, people aware of the matter said. Large banks with overseas operations have sought clarity and assurance from the Reserve Bank of India (RBI) that they will not be targeted with sanctions for facilitating rupee trade with a sanction-hit country such as Russia. The present payment mechanism is a shift from earlier such arrangements, like the one with sanction-hit Iran, which involved banks facilitating settlement of international trade that did not have business in the sanctioned nation.
Zero-coupon bonds don't give out interest but are issued at a deep discount to the face value, making it difficult to ascertain the net present value.
