SBI has been reeling under a mountain of bad loans for the past few years as the key sectors in the economy are faltering.
Experts tell Ujjval Jauhari that investors need to be careful in picking stocks given high valuations and with markets possibly ignoring potential risks
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?
SBI, PNB, Bank of Baroda, Canara Bank, Dena Bank, Central Bank of India ended down 3%-12% each.
'In the overall global portfolio, India's weighting has come down in the past seven months.'
Starting with a family, which had a dealership of Bajaj Auto's scooters, to becoming the owner of a household name in consumer appliances who could afford to have Bollywood superstar Shah Rukh Khan as the brand ambassador, Venugopal Dhoot's is a story of an aggressive small town businessman's pursuit to be on the top. Now arrested in connection with the ICICI Bank loan fraud case, Venugopal Dhoot during his heydays was not the one to simply sit on small achievements like Videocon becoming the largest television set manufacturer in India.
Gross non-performing assets of public sector banks surged to 9.32 per cent (Rs 4.76 lakh crore) of advances in 2015-16, from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15.
According to RBI sources, some banks had extended credit to existing borrowers to repay their debt, known as evergreening of loans in banking parlance.
The Reserve Bank of India (RBI) has offered some leeway to banks for early detection and resolution of bad loans. Under the new regime kicking off from April 1, lenders can finance 50 per cent of the outstanding loan value, RBI said in Framework for Revitalising Distressed Assets in the Economy, released on Thursday.
For now, the concerns over bad loans have taken a back seat; a bigger challenge for the banking community is credit growth, explains Tamal Bandyopadhyay.
These funds can fetch double-digit returns over the long term which debt tax-saving products can't.
The bank, which has suffered reverses following a massive spike in dud assets and also the dismissal of its chief executive Chanda Kochhar over governance issues, however, hinted that the worse is behind.
Besides high portfolio yield, investors may enjoy capital gains in debt funds in 2023 as bonds rally in anticipation of rate cuts.
The meeting will be attended by all heads and EDs of public sector banks
Top gainers from the Sensex pack are Asian Paints, Bajaj Auto, ITC, NTPC, L&T and HDFC, all up 2% each
'Good investment opportunities should not be missed.'
When we are unwell, we consult a doctor, take a prescription, and then buy medicines from a chemist. In finance, too, it is best to keep investment advice and product purchase separate, suggests Bindisha Sarang.
The rupee depreciated by 17 paise to end at nearly one-month low of 61.72 against the greenback on Friday on sustained dollar demand even as domestic equities surged to new highs.
Aavas is turning heads in the country's mortgage financing space because it selected to do business in a different way, says Mudar Patherya.
Axis Bank's acquisition of Citibank's consumer finance business for Rs 12,325 crore - the second biggest deal in the Indian banking sector - is seen as a good deal at a good price. The acquisition enables Axis Bank to close the gap with competition in some key segments such as credit cards. At the same time, there are some key issues that are crucial for the deal's success, apart from the fact that it will take some time for Axis to reap the full harvest of its investment.
Over 25,600 cases of banking fraud reported up to December 21, 2017, says Minister RS Prasad.
Buying or selling securities based on rumours about expected changes in tax rates or sectoral sops can backfire, advises Sarbajeet K Sen.
On a sequential basis, banks have had to set aside a substantial amount for bad loans, up 30 per cent from Rs 3,459 crore in the June quarter to Rs 4,508 crore.
You cannot manage the risk in your portfolio if you have no idea how to recognise it.
In related findings for India, the FATF in a report brought out last month, chronicled the use of banking channels to fund the activities of the banned terror group Hizb-ul-Mujahideen.
An excerpt from Conde Nast India's Make In India magazine.
Market regulator Sebi on Wednesday came out with investor charter for investors in securities market which aims at protecting investors' interest. The charter includes rights and responsibilities of investors and dos and don'ts of investing in securities market, as per a public notice. The vision of the investor charter is "to protect the interests of investors by enabling them to understand the risks involved and invest in a fair, transparent, secure market, and to get services in a timely and efficient manner."
