Thursday, January 25, 2018

Latest news about Banking, Finance and Economy . Recap of Banks



🍒 Centre to infuse over Rs 88,000 cr in PSU banks this fiscal : The Centre on Wednesday announced that it would infuse over Rs 88,000 crore as capital in public sector banks this fiscal, including Rs 80,000 crore through recapitalisation bonds and Rs 8,139 crore as budgetary support. “This plan addresses the regulatory capital requirement of all PSBs and provides a significant amount towards growth capital for increasing lending to the economy,” said Finance Minister Arun Jaitley. Financial Services Secretary Rajeev Kumar said that banks would have to first accept and adopt the reforms package finalised by the Finance Ministry, which is aimed at six themes of customer responsiveness, responsible banking, credit offtake, PSBs as Udyami Mitra, deepening financial inclusion & digitalisation and developing personnel for brand PSB.-Business Line

🍒 Bank recap to be dependent on performance, reforms, says Finance Ministry official : Each PSU bank is an article of faith; regulatory capital of all banks will be maintained, says Financial Services Secretary Rajiv Kumar. umar says bank recapitalisation dependent on performance and reforms; loans above Rs 250 crore will undergo special monitoring. 65 cr first generation bank accounts will not have any minimum balance penalty, says Kumar. Recap plan: SBI to get Rs 8,800 crore; OBC Rs 3,571 crore; Dena Bank Rs 3,045 crore; Central Bank Rs 5,158 crore; IOB Rs 4,694crore; BoI Rs 9,232 crore; UCO Rs 6,507 crore. Punjab & Sind Bank to get Rs 785 crore; IDBI Bank s 10,610 crore; Canara Bank-Rs 4,865 crore; Union Bank Rs 4,524 crore; Syndicate Bank Rs 2,839 crore; BoM Rs 3,173 crore. - Business Line

🍒 Centre unveils details of bank recap plan :  India will ensure that all of its public sector banks are well capitalised, said Banking Secretary Rajeev Kumar on Wednesday, while unveiling details on the government's massive bank recapitalisation plan aimed at tackling record bad debt woes. The Union Government had this month sought Parliament approval for Rs 80,000 crore ($12.62 billion) that it plans to spend by March, as part of a two-year recapitalisation programme for its state-run banks to help them deal with bad debts and revive credit growth. This is part of a Rs 2.11 lakh crore recapitalisation plan announced last October. Of the total sum, Rs 1.35 lakh crore is planned to be raised through recapitalisation bonds, while the banks themselves will raise another Rs 58,000 crore from share sales. “Each public sector bank (PSB) is an article of faith. All PSBs will be adequately capitalised and enabled to serve people and support inclusive growth,” said Kumar, adding total capital injection including from the government's budget and share sales by banks will amount to over Rs 1 lakh crore ($15.70 billion) in the financial year ending March 2018. - Business Line

🍒 Government decision on IDBI Bank privatisation stands: Arun Jaitley :  Finance Minister Arun Jaitley today said the government decision on privatisation of IDBI Bank stands and it will be implemented at the right time.  "One of the objectives in supporting the non-PCA (Prompt Corrective Action) banks has been that these are the banks where robust lending has to take place so that they are able to support growth, lending and the economy itself," he said while unveiling banking sector reforms. For the PCA banks, he said, the principle objective appears to be that they maintain their regulatory capital and it has been the criterion followed for IDBI. "The original decision (on privatisation of IDBI Bank) stands. It's has not been reconsidered but there is always a time for implementing a decision," he said. - Economic Times

🍒 Capital infusion will help stressed banks to exit prompt corrective action : he generous capital given to stressed banks will help them wriggle out of the regulator's stifling prompt corrective action and brighten prospects of raising fresh funds with better ratings to clean their books, officials and analysts said. The government on Wednesday said that it would infuse Rs 88,139 crore in 20 state-owned lenders, including Rs 52,311 crore to banks that face restrictions from the Reserve Bank of India. "The fresh capital with government's support and fund raising through QIP will help in strengthening our balance sheet and give a boost to our core operations," said R Marathe, CEO of Bank of Maharashtra. "We have developed a business revival plan to improve asset quality and efficiency." - EconomicTimes

🍒 58% banks report rise in bad loans in July-December: Survey : The percentage of banks reporting a rise in non performing assets (NPAs) in July-December last year has reduced significantly, indicating stability in credit environment, according to a report.  The latest round of the Ficci-IBA survey drew responses from 19 public sector, private and foreign banks representing 59 per cent of the banking industry by asset size. According to the survey, 58 per cent of the respondent banks reported a rise in NPAs, significantly lower than 80 per cent in the previous round. Infrastructure, metals and engineering goods were key contributors to the bad debt. However, only 28 per cent banks reported a rise in the number of requests for restructuring of loans as compared to 40 per cent in the previous round. - Economic Times

🍒 Vijaya Bank Q3 net drops 65% to Rs 79.56 cr on higher provisioning : State-owned Vijaya Bank today reported a 65.45 per cent decline in net profit at Rs 79.56 crore for the third quarter ended on December 31, 2017, due to the rise in provisions. The bank had posted a net profit of Rs 230.28 crore in the October-December quarter of the 2016-17 fiscal. The bank’s total income also declined 7.09 per cent to Rs 3,450.81 crore in the quarter under review from Rs 3,714.37 crore in the same period a year ago, Vijaya Bank said in a BSE filing. During the quarter, Vijaya Bank’s provision (other than tax) and contingencies grew by 62.35 per cent to Rs 676.92 crore, as against Rs 416.95 crore in the year-ago period. The bank’s gross non-performing assets (NPAs) improved marginally to 6.17 per cent as against 6.98 per cent in the same quarter last fiscal. Net NPAs also came down to 3.99 per cent in the quarter under review compared to 4.74 per cent a year ago. Shares of Vijaya Bank were trading 0.87 per cent lower at Rs 68.45 on BSE. - Economic Times

🍒 Rs 800-bn recap bonds won't affect FY18 fiscal deficit target: FinMin : The finance ministry said on Wednesday that Rs 800 billion (Rs 80,000 crore) recapitalisation bonds, to be issued to public sector banks (PSBs) as part of Rs 2.11 trillion capital support over two years, will not have an impact on fiscal deficit as they will be cash neutral. These bonds will not have Statutory Liquidity Ratio (SLR) and have tenure of 10-15 years, Economic Affairs Secretary S C Garg said. SLR is a portion of deposits that banks need to invest in government securities. - Business Standard

🍒 Canara Bank Q3 net plunges 61% to Rs 1.26 bn due to higher NPA provisions : Canara Bank Limited net profit plunged 61 per cent to Rs 1.26 billion (Rs 126 crore) in its third quarter financial results ended December 31, 2017, due to higher provisions for Non Performing Assets (NPAs). The net profit stood at Rs 1.26 billion (Rs 126 crore) for the quarter ended December 31 compared with Rs 3.22 billion (Rs 322 crore) a year ago, the bank said. "The net profit has declined to 61 per cent, mainly because of an ageing provision on the treasury. Hence we had to make Rs 740 million (Rs 74 crore) provision on treasury bonds which affected the decline in profits," Canara Bank Limited Managing Director and CEO Rakesh Sharma told reporters. "However, it is only a provision. - Business Standard

🍒 Bankers: Government should make gold monetisation more attractive : The government should make the gold monetisation scheme (GMS) a more attractive business to tackle the widening trade deficit on account of increasing import of the precious metal by unlocking idle household gold in the country estimated at about 22,000 tonnes, said bankers and analysts. Banks should get interest subvention from the government for the scheme, they said. "Gold monetisation scheme is not a very lucrative business as of now," said Shekhar Bhandari, business head-global transactions and precious metals at Kotak Mahindra Bank.The government should make the gold monetisation scheme (GMS) a more attractive business to tackle the widening trade deficit on account of increasing import of the precious metal by unlocking idle household gold in the country estimated at about 22,000 tonnes, said bankers and analysts. Banks should get interest subvention from the government for the scheme, they said. "Gold monetisation scheme is not a very lucrative business as of now," said Shekhar Bhandari, business head-global transactions and precious metals at Kotak Mahindra Bank. - Economic Times

🍒 Raghuram Rajan says RBI’s monetary policy committee doing a good job : Former Reserve Bank of India (RBI) governor Raghuram Rajan gave a vote of confidence to the monetary policy committee (MPC) led by his successor, which has been facing criticism from some government advisers for keeping interest rates too high. Speaking to Bloomberg Television in Davos on Tuesday, Rajan said the six-member panel headed by Urjit Patel “is doing a good job” in focusing on inflation. Price targets are useful for countries that suffer from high inflationary pressures, he added. - Live Mint

🍒 PSBs day: SBI, PNB, IDBI Bank, BOB shares gain up to 6% as Jaitley details PSU bank recap plan : Almost all PSB (public sector bank) shares got a kick in the late afternoon trades on Wednesday as Finance Minister Arun Jaitley detailed about Rs 2.11 lakh crore PSU bank recapitalisation plan in a press conference today. Ahead of the presser, shares of prominent banks such as IDBI Bank, Punjab National Bank, State Bank of India, Bank of Baroda surged up to 6%. The benchmark Nifty PSU Bank index shot up 3.49% to conclude at 3,965.6 led by a rise in heavyweight shares India’s largest lender State bank of India, PNB and Bank of Baroda. The stock of SBI rose as much as 3.88% to finish at Rs 330.45 while the stock of IDBI Bank emerged as the biggest gainer out of the Nifty PSU Bank index components. The Finance Ministry on Wednesday tightened the noose on public sector banks (PSBs), saying that the massive Rs 2.11 lakh crore bank recapitalisation announced by the government will alongside reforms by the banks to ensure that the banking crisis does not get repeated. In October last year, the Union Cabinet approved an unprecedented Rs 2.11 lakh crore for recapitalisation of banks over the next two years in a bid to clean banks’ books and revive investment in a slowing economy.Finance Secretary Rajiv Kumar laid down 6-point reforms for the PSBs and said their performance will be under the annual assessment.  - Financial Express

🍒 Looking at new growth opportunities in Indian economy: ICICI : CICI Bank is looking at new areas of growth opportunities in the Indian economy as new areas are coming up to be tapped post demonetisation and introduction of GST, its chief Chanda Kochhar has said.  She said more SMEs are becoming part of the formal economy, creating big opportunities for growth and the government has also provided a strong impetus to increase lending to MSMEs.  "Further, as the resolution process progresses and government capex picks up, the investment climate will improve leading to private corporate investments eventually looking up. We will look to participate in this pick up as and when it happens," Kochhar told PTI in an interview here on the sidelines of the World Economic Forum. - Economic Times

🍒 Rupee strengthens to 63.63 on dollar selling, FII inflows : The rupee strengthened to 63.63 on increased selling of the US currency by banks and exporters amid forex inflows. Weakening of dollar against other currencies overseas also supported the rupee.

🍒 Gold rises to Rs 31,100; silver holds steady at Rs 39,900 : Gold prices rose Rs 25 to Rs 31,100 per ten gram on positive global cues and increased buying by local jewellers to meet the wedding season demand. On the other hand, silver held steady at Rs 39,900 per kg on scattered deals from industrial units and coin makers.

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