A section of analysts feel now may not be a bad time to buy select PSBs.
India's largest PSU bank, State Bank of India, delivered excellent results, once the impact of a big jump in employee expenses was adjusted for. The net interest income (NII) beat the Street due to a better net interest margin (NIM) and good loan growth. The credit growth at 5.2 per cent quarter-on-quarter (Q-o-Q) (15 per cent year on year) was excellent for a large bank.
Public sector banks may be allowed to recruit talented middle-level management executives of other banks at an attractive pay package so as to improve their productivity.
Jaitley said the government had earmarked Rs 25,000 crore (Rs 250 billion) for recapitalisation.
Amid stiff competition from private and foreign players, the country's 27 public sector banks logged 35 per cent growth in profit at Rs 16,546 crore (Rs 165.46 billion) while their bad assets fell below 3 per cent during 2003-04.
While near-term performance is difficult to predict after a huge run-up, fund managers believe the PSU theme's prospects remain sound over the medium to long term.
Sensex catapults 1,241 points and Nifty vaults 382 points in two sessions in a row.
The Centre on Monday said nationalised banks, which were provided equity as part of capital restructuring need not return it.
Finance Minister Pranab Mukherjee will meet chiefs of public sector banks here on Saturday, at a time when industrial growth has decelerated to a 13-month low of 7.1 per cent and interest rates have moved northward.
Banks, including country's largest lender State Bank of India, have informed the customers well in advance about the likely inconvenience due to strike.
The government has said that public sector banks have asked for much more capital than it can give.
Corporation Bank is the biggest beneficiary of this round of capital infusion with Rs 9,086 crore of funding, followed by Allahabad Bank with Rs 6,896 crore.
With recruitment numbers having dropped off sharply since the liberalisation process got under way in 1991, large-scale retirements of people hired during the 1970s and 1980s will leave large gaps in the organisational structures of these banks.
Delhi International Airport Ltd, the five-company consortium led by Bangalore-based infrastructure conglomerate GMR Group that is upgrading Delhi airport, has managed to raise over Rs 1,000 crore (10 billion) to meet its financial obligations for the Rs 8,890-crore (80 billion) project.
In a move that is likely to attract political controversy, the committee on financial sector assessment has recommended that the banking sector should be gradually opened to foreign players and that the government lower its shareholding in public sector banks below 51 per cent and allow state-owned players to merge if the Centre's stake cannot go below the prescribed lower limit.
Capital needs are likely to increase substantially each year.
The nation-wide strike call has been given by United Forum of Bank Unions, consisting of nine national level unions, including AIBEA, NCBE, BEFI, INBEF, NOBW and AIBOC.
Over 25,600 cases of banking fraud reported up to December 21, 2017, says Minister RS Prasad.
The capital infusion would help improve the financial health of banks. While some banks would get necessary regulatory capital while others would get it for fueling growth.
The current process for selecting auditors could compromise their "independence".
Public sector banks have suddenly developed cold feet on raising lending rates even if it means sacrificing on their bottom lines.
Among the Sensex firms, Axis Bank, Power Grid, Maruti, State Bank of India, Tata Motors, ITC, Nestle and Mahindra & Mahindra were the major gainers. Bajaj Finance and Larsen & Toubro were the laggards.
The move comes even as Bank of India on Wednesday said its corporate clients will suffer mark-to-market losses of around Rs 125 crore. It has 34 clients with 74 derivative transactions. Last week, State Bank of India said its clients may incur MTM losses of up to Rs 700 crore at the end of March 2008.
A host of public sector banks had cut interest rates in the earlier part of this year following an advisory from Finance Minister P Chidambaram in January. Private and smaller state-owned banks, however, did not cut rates.
"There has been (a) slowing down of credit growth... However, this slowing down of credit has indeed, to some extent, affected flow of credit in the housing sector and consumer durables sector," he told reporters after a review meeting with heads of PSU banks.
The government will soon finalise a reshuffle of top management teams in the country's leading 11 public sector banks (PSBs), 10 of which are listed on the stock exchanges. They include the country's third largest bank, Canara Bank, and fifth largest bank, Bank of Baroda.
The Reserve Bank of India's (RBI's) latest order on unsecured loans is set to hit the banking sector's growth in the near-term, cautioned analysts, as they see banks slowing down on aggressive retail lending. Besides, cost of funds for non-banking finance companies (NBFC) is expected to inch up as banks will pass on higher capital charge to NBFCs. "We believe the fallout of the RBI action will be mainly on growth, given the rising dependence on unsecured retail loans and lending to NBFCs for growth.
Public sector banks have asked the Centre to intervene as talks with bank unions for allowing half of their employees a second chance to opt for pension instead of provident fund have reached a deadlock.
Public sector banks, in a frenzy to cash in on the retail credit boom during the three years beginning 2003-04
Reckless lending during the three years of the retail credit boom beginning 2003-04 is hurting public sector banks hard.
The S&P BSE Sensex and the Nifty50 have hit record highs amid the poll outcome-triggered bull frenzy at the bourses. Most analysts feel that the indices are on course to rise further over the next few months - till the general elections - albeit amid intermittent corrections - largely triggered by global developments. Bharatiya Janata Party's (BJP's) win in the three state elections of Madhya Pradesh (MP), Rajasthan and Chhattisgarh, analysts at Jefferies believe, reinforces the consensus expectations of a Modi win 2024 national elections with a greater likelihood of over 300 seats for the BJP.
The posts of Chairman and MD in the private sector are held separately.
At present, 58 per cent of the population has bank account.
The minister said RBI maintains a list of non-suit filed borrowers of banks and financial institutions, while CIBIL had a database on suit-filed accounts of Rs 1 crore (Rs 10 million) and above.
In April 2004, the ministry had permitted banks to purchase new vehicles for replacement or otherwise on "need basis".
Arun Jaitley addressed a post-Budget press conference.
