Search Result for : Public Sector Banks

The Dollar Business Bureau Encouraged by The Banking Regulation (Amendment) Ordinance 2017, which was promulgated on May 4, the Reserve Bank of India (RBI) is likely to go in for resolution of bad loans amounting to around Rs.8 lakh crore by March 2019, a step that could help in bringing down the banks’ non-performing assets (NPAs) to satisfactory level as well as considerably improve their financial health, as revealed in a study by the industry body ASSOCHAM.  “So, it should be safe to assume that the NPAs mess would largely be resolved by the first quarter of the financial year 2019-20. This would be helped by a combination of several factors – turnaround in the economic cycle and some resolute steps by ...

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 ...

PTI Seeking to create a global-sized bank, the Cabinet today gave the go-ahead to the merger plan of SBI and its five associates, a step aimed at strengthening the banking sector through consolidation of public banks. However, no decision was taken on the proposal to also merge the Bharatiya Mahila Bank with SBI.The merger is likely to result in recurring savings, estimated at more than Rs 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds, read an official statement."The Cabinet had earlier in-principle cleared the (merger) proposal. It had gone to the boards of various banks which have granted the approvals. The recommendations of the boards were considered today and the Cabinet cleared ...

The Dollar Business Bureau The Government of India has fixed parameters for the public sector banks (PSBs) for getting financial support and those banks which fulfill the set criteria after third quarter results would only be eligible for receiving funds. “The Ministry of Finance has fixed some parameters for receiving financial support. Those banks that fulfill the given criteria after their third quarter results would be qualified for fund infusion,” according to sources. In July, the government had announced Rs.22,915 crore for the first tranche of capital infusion for 13 PSBs. “75 percent of the amount (Rs.22,915 crore)...is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market," the Finance Ministry had said in ...

The Dollar Business Bureau  Reserve Bank of India (RBI) had made a strong case to provide further capital to public sector banks (PSBs) in order to deal with the issue of stressed assets and get back to a situation from which they can begin creating internal accruals. “Indian banks got into stress before implementation of Basel III and revised IFRS which provide protection against system level stresses...So we have to find more capital for supporting banks today. Of course government of India has supported entire AQR (asset quality review) exercise that we have done,” said N S Vishwanathan, Deputy Governor of RBI on Tuesday, while speaking at an ASSOCHAM event in New Delhi. “The Government of India has been providing support and required capital to the ...

The Dollar Business Bureau The government needs to infuse Rs.1.2 lakh crore into 11 public sector banks (PSBs) by 2020 to strengthen their books, said credit rating agency Moody's. “The State Bank of India (SBI) and 10 other PSBs (including Bank of Baroda and Bank of India) will have to be infused with Rs.1.2 lakh crore, much higher than the government has planned to inject, to boost their balance sheets,” said Moody’s Investors Service on Friday. The government has announced to infuse Rs.70,000 crore as capital for 22 PSBs till March 2019. Out of this, an amount of Rs.25,000 crore has already been infused and the government is planning to inject an equal amount during this fiscal. “In the wake of their results for ...

The Dollar Business Bureau To contain non-performing assets (NPAs) of banks, the government should authorise the public sector banks’ boards to pare bad assets through forming Special Purpose Vehicle (SPV) in the form of an ‘asset revival bank’ that can prepare broad rules for the lenders to take ‘haircuts’, industry body Assocham said.  The dual exercise of giving powers to the boards of public sector banks and setting up of an SPV that may also be called as Asset Revival Bank (ARB) should be implemented without any delay. This will instill confidence in bankers to come out with decisions regarding the loans restructuring for sectors like construction, steel, power etc, the industry body said. Though SPV should be empowered to set ...

The Dollar Business Bureau India’s recently announced Union Budget for the financial year 2016-17 is positive for most of its sectors, but negative for public-sector banks, Moody’s said in its report on Thursday. “Commitment to fiscal consolidation is positive for the sovereign, but deficit reduction will remain challenging. The budget is modestly credit positive for the sovereign, since it indicates a continued commitment to gradual fiscal consolidation by bringing down fiscal deficits to 3% over the next two years,” Moody’s said in its Credit Outlook report. “The proposals did not contain significant measures to address structural fiscal challenges, such as the government’s low tax revenue base and the vulnerability of government finances to economic shocks,” it said. Last month, Finance Minister ...