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.
Indeed, there were frauds, and the politician-banker-industrialist nexus played a role in the rise of NPAs, but governance issues in Indian banking are far more nuanced and complex, reveals Tamal Bandyopadhyay.
With the rise in interest rates, bond yields have been on the rise; this will dent banks' treasury profits. Also, many retail borrowers may find it difficult to service their loans when the loan rates rise, points out Tamal Bandyopadhyay.
India has a huge untapped population which doesn't have facilities for financial aid and insurance, and it is perhaps plausible to look at the option of having niche players catering to smaller sectors akin to non-banks and microfinance institutions in lending, said Rakesh Joshi, member (Finance & Investment), Insurance Regulatory and Development Authority of India (Irdai). Speaking at the Business Standard BFSI Insight Summit, Joshi said, "Today, most of our insurance companies operate at a national level. There is arguably a case for having differentiated operations, which cater to niche sectors the same way we have non-banking financial companies (NBFC) and microfinance institutions in lending." "The capital requirement for niche players may not be as large as those having national ambitions. "Enabling these niche players, which require lower capital, will enhance the penetration in areas which hitherto had not seen traction from large players," he said.
Banks have started refunding borrowers the compound interest charged on specified loan accounts during the moratorium period. Last week, the Reserve Bank of India (RBI) had asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by November 5.
Challenges abound but innovation is key for new banks inorder to survive.
The government on Friday announced that no tax will be charged on overseas spending of up to Rs 7 lakh in a year using debit or credit as it looked to douse backlash from its earlier decision of levying TCS on all spending. The government had earlier this week brought overseas credit card spending under Liberalised Remittance Scheme (LRS). This meant that any spending using credit cards overseas would attract a 20 per cent tax from July 1.
Collectively, the pack of 12 has posted a 50 per cent rise in profits -- Rs 25,685 crore. On a quarter-on-quarter basis (that is, September over June), the rise is 68 per cent. Public sector banks have never had such a stellar performance, explains Tamal Bandyopadhyay.
'Hacking of an ID or an account will have the same impact on a user in a city and one in a small town.' 'Security is like a railroad, you create it to last for every customer.'
Even if Mudra steps in to play its main role of refinancing at some stage, the responsibility for the bad loans remains with the banks.
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.
'Nobody expected the slowdown to go for these many days. Unfortunately, it is an unbelievably bad slow down.'
Pushpal Shinde now earns some Rs 50,000 a month.
This September, Sachin Bansal picked 94 per cent stake in microfinance company Chaitanya Rural Intermediation Development Services. His immediate plan is to scale up the company's operations as quickly as possible without making much investment in physical infrastructure and by leveraging technology.
Also build a contingency fund equal to 9 to 12 months of expenses.
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.
A political party's manifesto is the first stage of building a compact with the voters in any governance plan. If that compact is dependent on a document that reeks of fiscal imprudence and lacks credibility, it is a serious setback to the country's democracy and governance, says A K Bhattacharya.
To incentivise the Micro and Small enterprise is to offer them lower rates of interest based on their business turnover
'Real estate loans are given in the garb of retail loans, sourcing money cheap from the NHB refinance window.' 'This loophole is being plugged,' notes Tamal Bandyopadhyay.
Banks feel happy shifting their toxic assets from loan books to investment books while the ARCs enjoy the management fees with a smile, observes Tamal Bandyopadhyay.
One thing is for sure: It smacks of the regulator's lack of confidence in the bank's board, points out Tamal Bandyopadhyay.
It is not the first time the history of the Godrej family is being written. In its centenary year in 1997, film journalist and former editor of Filmfare and Screen B K Karanjia had, at the behest of the industrial family, penned a voluminous two-part history, tracing their trials and tribulations since 1897. So, what made the family want to tell its story again 25 years later? And not through another book, but through a completely different medium?
Merely bringing down the government stake below 51% may not find any taker for the PSBs. The government must bring down its holding to at least 26%, recommends Tamal Bandyopadhyay.
The president, however, implied about declaring a national emergency if the Congress did not approve a funding for the wall by February 15.
These consistent performers are expected to maintain momentum.
Nikunj Saraf, Vice President Choice Wealth, answers your mutual fund queries.
Seed and early-stage start-ups are high-risk businesses, rarely have collateral and only 1 in 10 of them makes it to becoming a viable company.
While the economy seems to be on a firm growth path, the fight against inflation is not over yet. Shaktikanta Das seems to be in no hurry. After playing well through a five-year Test match, he doesn't want to get out hit wicket, observes Tamal Bandyopadhyay.
The Congress leader said a 'storm' was brewing on the economic front that will cause damage and hurt many.
Foreign banks set the template in consumer banking in its infancy, but have almost vacated this booming space.
S&P Global Ratings on Monday said systemic risk in Indian banks is likely to remain high in the wake of the second wave of COVID-19 and high proportion of weak loans. S&P estimates the weak loans in banks at 11-12 per cent of gross loans.
Bank of New York Mellon Corp has pulled out of providing financial services to the Adani group and its Carmichael coal mine in Australia, saying the venture is incompatible with its environmental, social and governance rules.
In a bid to support revival of sectors hit most by the Covid-19 pandemic, Reserve Bank of India on Friday decided to open a separate liquidity window of Rs 15,000 crore for certain contact-intensive sectors like hotels and restaurants, tourism and aviation ancillary services.
Alipay payment service is about bringing the world's consumers and businesses together.
Nirmala Sitharaman's messaging was clear when she presented a well-balanced Budget with an eye on state elections in nine states followed by a general election next year, observes Ramesh Menon.
While a DFI will help banks derisk their loan portfolios, creation of a bad bank will clean up their balance sheets.
From auto, refrigerator, and mobile handset makers to real estate firms, companies are tying up with banks to dole out attractive finance schemes and discounts to make buying more affordable.
'It is nice that the banking system is in good shape.' 'It is a little early to call it too good because I think it was too bad in the past.'
'The digital trust level has drastically gone up due to Covid, not only in tier-I and II cities, but also in tier-III, IV and V geographies,'
Superintendent of Police Neeraj Kumar Jadaun confirmed the incident on Wednesday and said the condition of Rajiv Tomar (40), who ran a shoe-shop, is serious.
