Search Result for : Non Performing Assets Npa

The Dollar Business Bureau After approval of the merger of State Bank of India (SBI) with five associate banks, the consolidation drive in public sector banking seems to have come to a standstill. Officials from Finance Ministry said that the government intends to wait until the non-performing assets (NPA) situation is ameliorated, before pursuing further consolidation of banking sector. The fear of jeopardising the financial health of merged behemoths has put breaks on the ongoing M&A efforts in the NPA ladden public banking sector. Meanwhile, chiefs of around 10 PSU banks, including Bank of Baroda, Punjab National Bank and State Bank of India convened with the Finance Minister to discuss a range of issues troubling India's banks. Apart from addressing the elephant in the room (NPAs), the meeting ...

The Dollar Business Bureau   Canada's Brookfield Asset Management on Wednesday committed Rs.7,000 crore to buy bad loans in India in collaboration with SBI. "The JV will independently evaluate and invest in various stressed assets, and will rely on Brookfield's operational expertise to manage recapitalized businesses," a joint statement said.  SBI said it has pledged up to 5% of its investments into stressed assets, and its joint venture with Brookfield will motivate involvements from other lenders at a later stage. At present, the commercial banks’ stressed loans have reached over Rs. 8.2 lakh crore. Banks are creating in-house departments or selling their loans to ARCs (asset reconstruction companies) to deal with bad loans. ARCs issue, security receipts to the commercial banks in exchange of the loans ...

The Dollar Business Bureau After topping the list for two quarters, India slid to the 3rd rank globally on the basis of business optimism due to delays in major reforms such as the Goods and Services Tax (GST) and bad loans facing state-owned banks, according to the International Business Report. India slipped to the third position during the quarter of April-June 2016, revealed the report by Grant Thornton. The delays in major reforms such as GST, banking issues due to Non-Performing Assets (NPAs), non-resolution of tax rows, and the need for considerable recapitalisation of state-run banks are some of largest concerns for Corporate India that have together affected the business confidence leading to the total business optimism in India,” the IBR ...

The Dollar Business Bureau Comptroller and Auditor General of India (CAG) Shashi Kant Sharma said on Friday that there is a need to consider the audit of financial regulators such as the Reserve Bank of India (RBI). “In India, CAG does not audit the RBI, whose auditors are appointed by Central Government under the provisions of the RBI Act; CAG conducts audit of other financial sector regulators like SEBI, IRDA and PFRDA but does not conduct performance audits”, said Sharma at an ASSOCHAM event in New Delhi.  “In the wake of growing cases of financial frauds, this is a thought to consider as to whether, in coming times, our audit should take into account the vulnerabilities and risks India’s ...

The Dollar Business Bureau The Reserve Bank of India on Monday launched a new scheme ‘Sustainable Structuring of Stressed Assets’ (S4A) which allows lenders to divide the stressed loans into sustainable and unsustainable portions.  Under sustainable portion, banks need to divide the existing debt of a company into sustainable (a share which can be serviced by the company even if cash flows remain the same as now) and ‘unsustainable’ which can be converted into equity or compulsory convertible debentures. To smoothen things the Govt will take the help of an independent agency to ascertain the economic viability of the project and the resolution plan. The aim of this scheme is to permit banks to rearrange stressed loans of over Rs.500 crore including accumulated interest ...

Sharath Chowdary Kotak Mahindra Bank is planning to increase its number of branches to 1400 in India by the end of this fiscal year from 1333 branches as on 31 March 2016. The bank had only 684 branches in the country at the end of FY 2015. Uday Kotak-led bank also aims at a 20 percent credit growth in FY 2017, the bank’s Senior Executive Vice President and Head - Branch Banking and Acquisition, Virat Diwanji told The Dollar Business. He said, “The corporate credit offtake was slow in the recent times. The bank has registered 14-15 percent credit growth in the previous year. As interest rates are being reduced, some green shoots are coming up in the economic growth of the country. This ...

The Dollar Business Bureau The various initiatives of Indian government and the newly introduced Insolvency and Bankruptcy Code, 2016 are boosting the country’s corporate bond market, said CRISIL in a report. According to it, lesser profitability of public sector banks (PSBs) has reduced their capability in accruing capital. Weak performance, particularly due to the rise in non-performing assets (NPAs), has created a challenging environment for the PSBs in raising money from the capital market. Higher provisioning is another factor that has weakened the ability of PSBs in offering better interest rates. Along with the rise in credit demand, capital requirement would also increase. There are also several other imperatives of growth, the report states. India will require Rs.43 lakh crore (approximately $650 billion) for ...

The Dollar Business Bureau The Reserve Bank of India has asked the co-operative banks to “immediately start” monitoring the non-performing assets(NPA) in the Self Help Group segment. They have also stressed on the credit ratings of the same. The RBI had earlier asked the co-operative banks to report the member level data and the credit information relating to SHG and its members. RBI said that the requirement of the information will be implemented in two phases. Phase I will start from 1st of July 2016 and will last for one year. Phase II will be implemented from 1st July 2017 and expects that credit related information will increase during this period. The reporting and the collection of this credit information will be restricted ...