The RBI has cited corporate governance and regulatory issues for not extending Kapoor's term. Further, the lender has been directed to search for a successor.
'I would say restore the banks to health, get active board composed of professionals, then there will be an ideal situation for merger.'
Share prices of Dewan Housing, Indiabulls Housing, and PNB Housing have declined 30-80% in the past one year
Six public sector banks have been identified as having a particularly problematic housing loan portfolio.
The current wage revision for PSBs, as well as some private lenders, is due from November 2017 for five years - up to October 2022.
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?
Besides financials, shares of telecom, IT, auto and pharma were in demand.
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.
PMAY-Gramin, which was launched in November 2016, aims to construct 10 million homes by March 31, 2019, with private sector and state government participation
Shares of Yes Bank tanked over 15.52 per cent. Other losers in the Sensex pack included Tata Steel, Maruti, SBI, RIL, Tech Mahindra, ONGC, Vedanta, Bajaj Finance, Hero MotoCorp and TCS, falling up to 3.66 per cent.
Its total income (consolidated) rose to Rs 79,302.72 crore in the quarter under review, compared to Rs 74,948.51 crore in the year-ago period
The 30-share Sensex ended 50 points lower at 21,143 and the 50-unit Nifty was down 23 points at 6,291.
The correlation between withdrawal of deposits and the Covid death rate is stark, reveals Tamal Bandyopadhyay.
'I hope the trend is sustainable and that economic activity accelerates going forward.'
Banks are in need of government support to manage the stressed assets
S&P Global Ratings on Wednesday lowered India's economic growth forecast to 5.2 per cent for 2020, saying the global economy is entering a recession amid the coronavirus pandemic. The agency had earlier projected a growth rate of 5.7 per cent during the 2020 calendar.
Former RBI governors Urjit Patel and Raghuram Rajan have also expressed worry about the Mudra scheme, particularly government's target-setting practice and the rising bad loans.
Total income on a standalone basis increased to Rs 1,74,972.96 crore.
Fitch Ratings on Thursday said the resurgence of COVID-19 infections may delay India's economic recovery, but won't derail it, as it kept the sovereign rating unchanged at 'BBB-' with a negative outlook. It projected a 12.8 per cent recovery in GDP in the fiscal year ending March 2022 (FY22), moderating to 5.8 per cent in FY23, from an estimated contraction of 7.5 per cent in 2020-21. Fitch had in June last year revised outlook for India to 'negative' from 'stable' on grounds that the coronavirus pandemic had significantly weakened the country's growth outlook and exposed the challenges associated with a high public debt burden.
It appears the two banks are now convinced that increasing their credit card portfolios will not lead to significant erosion in asset quality.
Moody's rates a total of 15 public sector and private sector banks, which together accounted for about 66 per cent of the banking system's estimated total assets on March 2012.
The RBI had on August 7 announced a five-member expert panel under former ICICI Bank chairman Kamath to make recommendations on the required financial parameters for recasting corporate loans.
The stimulus measures include extension of the 90-day moratorium on recognition of impaired loans to 180 days, in addition to several relaxations in bank lending limits, including allowing banks to fund interest on working capital loans.
Even as concerns over PSU Banks' asset quality and growth rates remain, there are few that offer a favourable risk-reward equation.
Risk aversion leading to 'lazy banking'; lenders prefer govt securities
Conceding that there has been risk aversion among the lenders stemming from their rising asset quality concerns, the Governor said banks should lend to productive sectors, notwithstanding the importance of asset quality, by being discerning.
Global ratings agency Moody's on said it has a "negative" outlook on the country's banking system due to concerns over asset quality and the high interest rates.
ICICI Bank, HDFC Bank and Axis Bank reported healthy loan growth and asset quality.
Stocks such as ICICI Bank, Axis Bank, State Bank of India, Bank of Baroda and HDFC Bank are among the top banking picks of analysts for 2017. A decline in cost of funds and treasury gains are expected to help stabilise their net interest margins
The major beneficiaries of loan recasting will be sub-Rs 500 crore corporate exposures and retail exposures, which were earlier expected to see the highest increase in NPAs in percentage terms.
Reports suggest state-owned banks have lapped up Rs 40,000 crore, so far, using both bonds and equity instruments. The question, though, is whether there will be a perceptional change for PSB stocks.
If the earnings in the first quarter of the current financial year are an indication, most banks, particularly those majority-owned by the government, have fared well, reveals Tamal Bandyopadhyay.
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 cost of funds has come down, which will lower lending rates'.
Chidambaram also asks these not to rush for bulk deposits to bloat balance sheets.
Amid a rise in non-performing assets, most public sector banks have seen a substantial drop in their provision coverage ratio in the year since the reserve Bank of India (RBI) withdrew the 70 per cent provision coverage ratio norm.
Restoring the bank to its former glory will be the top priority for Vijayalakshmi Iyer, the seasoned banker who took over as chairperson and managing director of the Mumbai-based bank last month.
The companies that have seen sharp erosion of market wealth include YES Bank, Indiabulls Housing Finance, Zee Entertainment, Vodafone Idea, and Bharat Heavy Electricals.
India Inc's profit share in the country's GDP at 15-year low in 2018. Since 2013, net profit for top 500 companies has remained in the range between Rs 4 trillion and Rs 4.8 trillion despite steady growth in nominal GDP.
While the overall loan disbursements stood strong at 15 per cent YoY in Q2, pockets such as vehicle finance, loans to NBFCs, and business banking showed some weakness. A continued fall in these numbers may make it tough for AU SFB to defend its valuations under the current circumstances.
