To the question on what comes first, clean up or growth, Rajan said the answer is unambiguously 'Clean up!'
Lenders can now initiate recovery proceedings since the SC has lifted the standstill on asset classification, which protected stressed accounts from slipping into NPAs.
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.
Finance Minister P Chidambaram on Monday favoured mergers in the banking industry so that India can have two-three global sized banks.
'If the RBI had done the right things, these mistakes would not have happened in banks, public or private,' says Ajay Shah.
PSBs have been requested to reach out to MSMEs to provide bill discounting to them against their dues since they suffer the most from shortage of cash.
The government is likely to infuse additional capital of Rs 20,000 crore in the public sector banks next financial year to meet Basel III global capital risk norms.
Dissatisfied with the wage hike offer made by Indian Banks' Association (IBA), public sector lenders' employee unions on Monday threatened to go on a two-day strike from February 10.
As industrialist Vijay Mallya fights his wilful defaulter tag, former CAG Vinod Rai has said Kingfisher Airlines' loan default is just a "trickle" and the overall problem of huge bad loans at public sector banks can be blamed on 'cronies' using connections to borrow money.
Axis Bank and ICICI Bank consumed 37-59 per cent of their operating profit for COVID-19 provisioning, while the figure is 24 per cent in case of Kotak Mahindra Bank and 10-12 per cent for IndusInd Bank and HDFC Bank.
Pranab Mukherjee proposed a separate entity for bank recapitalization.
'The Insolvency and Bankruptcy Code is neither beneficial to banks nor helpful for the borrower.' 'Genuine people who are caught in economic stagnation will lose everything and thousands will lose jobs.'
Non-performing assets of banks have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.
It's going to be another predictable quarter for banks. Slower credit growth, high interest rates and deteriorating asset quality will continue to haunt the sector, especially public sector banks.
Banks need to raise capital to comply with Basel III norms. This mode of raising money gives all shareholders equal investment opportunity.
Despite unprecedented levels of uncertainty in Samvat 2077, investors have little to complain about on the returns front. The BSE Sensex delivered returns of 38 per cent in this period, while the Nifty registered a return of over 40 per cent. As is the case in bull markets, companies in the small- and mid-capitalisation basket outperformed the benchmarks, with returns almost twice those of frontliners.
With a view to protect prudent commercial decision of bankers, the government has taken a slew of decisions, including doing away with personal responsibilities of MD and CEO of PSBs for compliance in dealing with large value frauds committed by bank officials.
Most of the lenders had informed their customers in advance about the strike call given by All India Bank Employees Association (AIBEA), All India Bank Officers' Association (AIBOA), BEFI, INBEF, INBOC and Bank Karmachari Sena Mahasangh (BKSM), and its impact on banking services.
Amid strong opposition from CIL workers union to the proposed stake sale in the company, Finance Minister P Chidambaram has said the disinvestment proceeds of about Rs 20,000 crore (Rs 200 billion) from the coal behemoth will be invested in public sector banks.
What's worrying for the public sector banks is the rise in delinquency in the housing portfolio, which does not include real estate. But a bank chief said that with low exposure to the real estate sector, the state-run banks have fewer worries. The other area of concern is credit cards but the operations of public sector banks in this segment are small compared with the likes of ICICI Bank, HDFC Bank and Citibank, the largest players in the business.
The government on Thursday approved a proposal to inject Rs 12,517 crore in public sector banks to help them enhance the lending activity and meet the capital adequacy norms.
As many as seven firms, including JM Financial, Ernst and Young and Deloitte, have bid for managing the strategic sale of IDBI Bank. These firms would make a virtual presentation before the Department of Investment and Public Asset Management, which is handling the sale process, on August 10, according to a notice by DIPAM. The firms that have bid for acting as transaction advisor are Deloitte Touche Tohmatsu India LLP, Ernst and Young LLP, ICICI Securities, JM Financial Ltd, KPMG, RBSA Capital Advisors LLP and SBI Capital Markets.
If the banks throw caution to the winds for building loan books, the hydra-headed bad loans may resurface and spoil the party, warns Tamal Bandyopadhyay.
Corruption cases in public sector banks have reduced by half in the past one year, chairman of the Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, E M Sudarsana Natchiappan, said on Wednesday.
The biggest challenge with public sector banks is the processing time, which is why starting early helps.
Some of the services like cash deposit and withdrawal at the counter and cheque clearances have been impacted due to the strike by banking staff.
State-run banks accounted for nearly two-third of the customer complaints received during the last financial year, the Reserve Bank of India (RBI) on Thursday said in its report on trend and progress of banking in the country.
Also, there were not many clients in the market as they had already made alternate arrangements due to the strike.
Further, Finance Minister Nirmala Sitharaman said the banks have sufficient liquidity, and efforts are being made to ensure that due payments are released to the micro, small and medium enterprises (MSME) sector by large corporates.
As many as 8.5 lakh bank employees are set to benefit from the wage hike, which will be effective from November 2017.
Some banks have seen gross non-performing assets as high as 15 per cent in their education loan portfolios.
'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.
The Indian economy requires a Rs 3 lakh crore fiscal stimulus, including cash transfer to households through Jan Dhan accounts to spur economic growth amid the pandemic, industry chamber CII said on Thursday and pitched for appointment of a 'Vaccine Czar' for speedy vaccination coverage. CII president T V Narendran also said the chamber expects GDP to grow at 9.5 per cent in 2021-22 as the strong growth in the second half of the fiscal year will be supported by robust external demand and large-scale coverage of vaccination, allowing resumption of economic activity. He also advocated for appointment of a "Vaccine Czar" for speedy vaccination coverage.
The overall debt servicing metrics of Indian corporates are weak.
The government may delay Rs 14,000 crore (Rs 140 billion) fund infusion in the public sector banks in view of volatile market conditions.
One thing is for sure: It smacks of the regulator's lack of confidence in the bank's board, points out Tamal Bandyopadhyay.
While Chanda Kochhar got a pay of Rs 2.66 crore, Arundhati Bhattacharya took home only Rs 28.96 lakh
This is following revival of demand from the corporate sector and small and medium enterprises (SMEs), even as a nascent economic recovery is taking shape. Credit growth of scheduled commercial banks had accelerated to 9.2 per cent year-on-year (YoY) by the end of December 2021 after breaching the 7 per cent-mark in November, for the first time since April 2020.
The current process for selecting auditors could compromise their "independence".
Bringing down government stakes would augment their capital.
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