We'll need to wait a couple of years to see how many restructured loans turn bad and whether some banks fall victim to their obsession for growth, explains Tamal Bandyopadhyay.
The cases pertain to State Bank of India, Punjab National Bank, Andhra Bank, Oriental Bank of Commerce, Indian Overseas Bank, Allahabad Bank, Canara Bank, Dena Bank, Punjab and Sind Bank, Central Bank of India, Union Bank of India, IDBI Bank, Bank of Baroda, Bank of Maharashtra and Bank of India.
The race to get a New Umbrella Entity (NUE) licence for digital payments may get crowded. As many as six consortiums are said to be in the fray to apply for an NUE licence, which would create a for-profit National Payments Corporation of India (NPCI)-like body for retail payments. A consortium led by Financial Software and Systems (FSS), a leading provider of payment products and payment processor, is in talks and may file an application to the RBI for an NUE license, said sources aware of the development. The other constituents of this group include Indian Bank, Central Bank of India, India Post Payments Bank, National Bank for Agriculture and Rural Development (Nabard), and a few small finance banks.
The finance ministry on Wednesday allowed all private sector banks to participate in government-related business, like collection of taxes. pension payments and small savings schemes. At the moment, only few large private sector are allowed to conduct government-related business.
Debt-ridden mortgage firm DHFL's shares would be delisted from stock exchanges post acquisition by Piramal Capital and Housing Finance, which has emerged as the successful bidder for the company. As part of resolution process under the Insolvency and Bankruptcy Code (IBC), lenders led by Union Bank of India in January this year favoured the bid by Piramal Capital and Housing Finance to take over the beleaguered housing finance firm. According to sources, shares of DHFL would be delisted post acquisition as per the IBC guidelines and Sebi delisting norms.
Addressing the 74th Annual General Meeting of the Indian Banks' Association (IBA), she said the industry needs to imagine how Indian banking has to be in the immediate and long-term future. As far as the long-term future is concerned, she said it is going to be largely driven by digitised processes and there is a need for seamless and interconnected digital systems for a sustainable future for the Indian banking industry.
Vikram Kothari took a loan of Rs 485 crore from Mumbai-based Union Bank of India and a loan of Rs 352 crore from Kolkata-based Allahabad Bank. A year later, Kothari has reportedly not paid back either the interest or the loan.
Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources said.
Embattled retailer Future Retail Ltd (FRL) on Tuesday moved the Supreme Court to avert insolvency proceedings over missing a loan repayment deadline, even as its independent directors rejected an Amazon-supported offer to sell the company businesses at less than a third of what Mukesh Ambani's Reliance is offering. India's second-largest retailer, which operates multi-brand retail chains such as Big Bazaar, Easyday and Heritage, failed to pay Rs 3,494.56 crore to lenders by the due date of December-end and sought a 30-day grace period to resolve the situation. Unable to find money, it moved the apex court seeking to restrain its lenders from declaring the company a defaulter, which can invite initiation of insolvency proceedings.
Banks are also weighing the option of hiring experts for help in specialised areas.
If there were an Olympics for bank frauds in India, Rishi Agarwal, founder and former chairman of ABG Shipyard Ltd, a nephew of the Ruia brothers of the Essar group, would bag the gold, pushing Nirav Modi to his right, says Tamal Bandyopadhyay.
Stock markets are expected to remain under pressure this week due to the overhang of US presidential polls and uncertainty over global growth due to resurging cases of coronavirus, according to analysts.
The talk of governance reforms at public-sector banks seems to remain on paper, as a majority of them continue to be working with just a handful board members. Half of the board seat at these banks have been vacant. Ten of the 12 public-sector banks, even large ones like Punjab National Bank, Canara Bank and Union Bank of India - all except State Bank of India (SBI) and Bank of Baroda - don't even have a chairman. In 2014, while splitting the post of chairman & managing director (CMD), the government had decided to appoint non-executive chairmen at these banks. SBI, which has an executive chairman and four managing directors, was an exception.
According to the complaint filed by SBI, the account had become non-performing asset on January 27, 2016.
Experts attribute the lower target to increased allocation under the credit guarantee scheme for small businesses. Out of the Rs 3.21 trillion worth loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) in the last financial year, Rs 3.12 trillion were disbursed to entrepreneurs, according to official data.
Ajit Mishra answers reader queries on the stock market.
The Mumbai Bench of the National Company Law Tribunal (NCLT) on Monday approved Piramal Group's resolution plan for the beleaguered Dewan Housing Finance Ltd (DHFL), which has been reeling from the insolvency process since 2019. The plan put forward by Piramal Group, which has offered to pay Rs 37,250 crore, has been approved by the committee of creditors (CoC), the Reserve Bank of India (RBI), and the Competition Commission of India (CCI).
Banks operating in India reported fraud of Rs 4.92 trillion as on March 31, 2021, which represents nearly 4.5 per cent of the total bank credit, showed Reserve Bank of India (RBI) data, which was sought under the Right to Information (RTI) Act by Saurabh Pandhare. The data showed 90 banks and financial institutions reported a total of 45,613 cases of loan fraud till March 31, 2021. State Bank of India - the country's largest lender - reported the highest amount of loans as fraud - Rs 78,072 crore as on March 31, 2021.
This is part of the first batch of Supplementary Demands for Grants for 2020-21 moved by Finance Minister Nirmala Sitharaman in the Lok Sabha.
Is the worst over for Indian banks? The past two years saw them ride on treasury trades as deposits soared and credit growth dipped sharply. Gross and net non-performing assets (NPAs) moved south, and the provision coverage ratio (PCR), capital buffers, and profitability indicators are back at pre-pandemic levels. So, what's the plot ahead?
US-based Oaktree on Monday pipped Piramal Enterprises and Adani Group to emerge as the highest bidder for DHFL after fresh bids were invited under the insolvency process, according to sources. The committee of creditors had fixed December 14 as the last for submission of revised bids. According to the sources, Oaktree raised the bid to Rs 36,646 crore, including Rs 1,000 crore for insurance and Rs 3,000 crore of interest earned, while Piramal Enterprises offered Rs 35,550 crore, including Rs 300 for insurance and Rs 3,000 of interest earned.
The finance minister also said that the merger would not result in any retrenchment but rather improve the benefit of the employees.
India's GDP growth will be 7.5% this year: Jaitley
Standard & Poor's on Wednesday lowered the stand-alone credit profile of two government-owned lenders- the State Bank of India and Union Bank of India citing concerns over their asset quality and high credit cost.
Ajit Mishra, vice president, research, Religare Broking, answers your queries.
The annual earnings of a non-executive chairman of a PSB is capped at Rs 10 lakh, inclusive of fees for attending board meetings. This is way below the compensation of the chairman of any private bank, reveals Tamal Bandyopadhyay.
Finance Minister Nirmala Sitharaman's Rs 30,600 crore government guarantee for the bad bank has changed the body language of bankers for the better, observes Tamal Bandyopadhyay.
"The Reserve Bank of India... has levied an aggregate penalty of Rs 10 million (Rs 1 crore) on the bank for non-compliance of regulatory directions observed during assessment of implementation of SWIFT-related operational controls," Yes Bank said in a regulatory filing.
'Investors should not commit fresh money to these stocks right now, unless they can hold for the next three to four years.'
Amidst news of job squeeze tightening in India in 2012 we bring to you companies that are hiring in India.
Jaitley said that the banks have to play an important role in achieving the higher growth rate.
Banks say they themselves red-flagged the transactions to RBI. It must be noted that these transactions are not outright evidence of fraud or proof of nefarious activities.
The total value of India's top 100 brands has increased by 2 per cent, from $162.1 billion in 2020 to $164.9 billion in 2021, according to the latest Brand Finance India 100 2021 report. This uplift in brand value over the course of the first year of the pandemic is an impressive feat given the global economic crisis following the implementation of national lockdowns in March 2020, when business activity was brought to a halt, affecting both production and consumption. Among the brands that came on the top of the list include Tata Group, Reliance Industries, and Mahindra Group.
The current wage revision for PSBs, as well as some private lenders, is due from November 2017 for five years - up to October 2022.
Analysts attribute the surge to a host of factors, particularly the interest shown by the retail investors in these two market segments.
RuPay is working on how to increase offers to customers. It is also focused on technology innovation in the card payment system.
Lenders can now initiate recovery proceedings since the SC has lifted the standstill on asset classification, which protected stressed accounts from slipping into NPAs.
The country's largest lender State Bank of India on Wednesday said it has reduced its marginal cost of fund-based lending rate (MCLR) by up to 15 basis points across various tenures, effective March 10. The bank has reduced its one-year MCLR by 10 basis points to 7.75 per cent from the earlier 7.85 per cent, SBI said.
Union Bank of India, United Bank of India reduced base rates.
Teaser loans may be on their way out with Canara Bank and Union Bank of India opting to withdraw the scheme in anticipation of a high interest rates.
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