Page 22 - Indian Banking Sector

RBI raises concerns over zero-coupon bond for PSB recapitalisation

The Reserve Bank of India (RBI) has expressed some concerns over zero-coupon bonds for the recapitalisation of public sector banks (PSBs) and discussion is on between the central bank and Finance Ministry to find a solution, according to sources. The government resorted to recapitalisation bonds with a coupon rate for capital infusion into PSBs during 2017-18 and interest payment to banks for holding such bonds started from the next financial year. To save interest burden and ease the fiscal pressure, the government has decided to issue zero-coupon bonds for meeting the capital needs of the banks. The first test case of the new mechanism was a capital infusion of Rs 5,500 crore into Punjab & Sind Bank by issuing zero-coupon bonds of six different maturities last year. These special securities with tenure of 10-15 years are non-interest bearing and valued at par. However, the RBI has raised some issues with regard to calculation of an effective capital infusion made in any bank ...

RBL Bank: Worst may be over, but near-term asset quality pressures seen

Renewed focus on MFI loans and credit cards should put the bank on growth trajectory after six quarters

The long-term growth opportunity 2021 presents

The digital super cycle will encompass progress in all areas and will accelerate further on advancements in machine learning and artificial intelligence

RBI wants IDBI Bank to come out of PCA framework before stake sale

The government's shareholding in the lender is 47.11 per cent, while LIC holds 51 per cent in it

Best of BS Opinion: Next step on vaccines, farmers' protest, and more

Here's a selection of Business Standard opinion pieces for the day.

Thoughts on banking in the new decade

Those banks that remain complacent, bragging about their captive customer base, may turn dinosaurs

We could be on the cusp of banking 2.0

The last couple of years saw the RBI taking up the sheet anchor role to steer the economy. The accommodative interest-rate stance implies that it is ready to walk the extra mile to bolster the economy

Indian banks' loans rose 6.1% in two weeks to Dec 18, shows RBI data

Outstanding loans rose 518.61 billion rupees ($7.09 billion) to 105.50 trillion rupees in the two weeks to Dec. 18

Digital dangers

Unauthorised lending apps must be stopped

That sinking feeling?

Book review of Pandemonium: The Great Indian Banking Tragedy

RTGS: From today, you can make high value money transfers round-the-clock

RTGS for high-value transactions will become available round-the-clock from 00:30 hours Monday onwards, making India one of the few countries in the world to operate the system 24X7

Banks sanctioned Rs 2 trn loans to MSMEs for Covid-19 impact: FM Sitharaman

Banks sanctioned loans worth Rs 2 trillion to about 81 lakh accounts under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme for the MSME sector that was impacted by Covid, Sitharaman said

Free-for-all apps: Avail bank facilities even if you are not a card holder

ICICI is not alone to bring this concept forward. State Bank of India, has also announced to make its app open for all in 30 days

RBI asks banks to retain profit, not make any dividend payment for FY20

In view of the economic shock caused by Covid-19, the Reserve Bank of India asked scheduled commercial banks and co-operative banks not to make any dividends for the financial year ended March 2020

RTGS to be made available 24X7 in next few days: RBI Governor

RBI said that the Real Time Gross Settlement (RTGS) system, used for large value transactions, will be made available round-the-clock in the next few days

Why few NBFCs want to become banks despite RBI's new recommendations

Cost of doing business, regulatory arbitrage, customer profile key parameters

Bad loans in Indian banking sector to rise in next 12-18 months: S&P

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is "masking" problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the proportion of Non-performing loans (NPL) to total loans declined consistently so far this year. "While financial institutions performed better than we expected in the second quarter, much of this is due to the six-month loan moratorium, as well as a Supreme Court ruling barring banks from classifying any borrower as a non performing asset," S&P Global Ratings credit analyst Deepali Seth-Chhabria said. In its report titled "The Stress Fractures In Indian Financial Institutions", S&P said with loan repayment moratoriums having ended on August 31, 2020, NPLs in the banking sector will likely shoot up to 10-11 per cent .

Bank and NBFC stocks seen cheering RBI's proposals on widening ownership

While questions remain, RBI panel's recommendations, if implemented, could result in structural changes for the sector

Banking reforms: The real metrics

Under Shaktikanta Das, RBI has been moving speedily on banking reforms. The most crucial question is, will any of this mean a big difference to the quality and cost of banking services for depositors?

Prudent regulation

Banks promoted by business houses would raise systemic risk