Saturday, January 27, 2018

Banking, Finance and Economy Current Affairs - GST and Insolvency and Bankruptcy Code (IBC)

Finance Minister Arun Jaitley today said the GST has stabilised in a very short time that provides an opportunity  to widen its base and further rationalise the rates in the future.
-NDTV Profit 

The Govt is considering a proposal to extend the time limit for the  bankruptcy  resolution process by up to 60 days following recent changes in the Insolvency and Bankruptcy Code (IBC) that have led to a reset in the process in many cases, said officials aware of the matter. This could mean more time for the 12 big cases undergoing resolution that were on the first list sent by the RBI to banks in June, calling on them to be referred to the NCLT. These companies account for about 25% of all NPAs.
-Economic Times 

A district consumer forum has held the SBI guilty of deficiency in service for debiting money from a bank account despite a failed ATM withdrawal and awarded a compensation of Rs 3,000 to the account holder. Besides awarding the compensation, the consumer forum in Akola district also directed the bank to refund the wrongly debited amount of Rs 5,000 and pay Rs 2,000 towards the legal cost to the account holder.
-Moneycontrol.com 

Foreign exchange reserves continued rallying for the fourth week with a new high of USD 414.784 billion USD in the week to January 19, attributable to a rise in foreign currency assets. As per data issued by the RBI, reserves saw a spike of USD 959.1 million during the aforementioned time period.
-Deccan Chronicle 

The size  New India Assurance Co has the largest capital and surplus in the general insurance industry in the country, the Co said citing AM Best's credit ratin, in a regulatory filing in BSE.
-Economic Times 

Idea Cellular has approached the Govt for raising FDI level in the Co to 100%. "Application made to  Department of Industrial Policy and Promotion for 100% FDI in Idea," the Co said in an investor presentation.
-Business Today 

The government should have been vigilant to the spike in demand for bitcoins post the note ban, Swadeshi Jagran Manch co-convener Ashwani Mahajan said today, expressing dismay over lack of estimates about the "size and quantum" of black money till date. He also said that there exists conflict of interest at various institutions, including regulators such as FSSAI. Besides, Mahajan said, the Govt should have looked into the way technology was used to launder black money outside India.
-Moneycontrol.com

Constitution and Politics - Best tutorial conversation

This Republic Day - From NDTV, Ravish Kumar and Faizan Mustfa tell about Constitution. This is very useful program for every citizen as well as competitive exam aspirants.

  1. link -
 https://khabar.ndtv.com/video/show/prime-time/where-is-the-place-of-constitution-in-our-social-values-477521

 2. link - https://khabar.ndtv.com/video/show/prime-time/how-much-do-we-respect-the-supremacy-of-the-constitution-477429

Friday, January 26, 2018

Banking, finance and Economy Current Affairs - Payment Banks and Crisil Rating etc.

Payments Banks and Small  Finance Banks are now allowed to sell Atal Pension Yojana. In a statement the finance ministry said that given the strength, expertise and reach of these new age banks, they can play a pivotal role in outreach of subscribers under APY. At present there are 11 Payment Banks and 10 Small Finance Banks.
-Economic Times 

Rating agency Crisil today revised upwards the outlook on 18 PSBs to ‘stable’ from ‘negative’ and also reaffirmed their ratings following the Rs 88,139-crore capital infusion by government.The outlook on Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of Maharashtra, Bank of India, Canara Bank, Central Bank, Corporation Bank, Dena Bank,  IDBI Bank, Indian Overseas Bank,  Oriental Bank, Punjab & Sind Bank, Punjab National Bank, Syndicate Bank, Uco Bank, Union Bank and United Bank have been revised upwards to stable now. The report, however is silent on SBI.
-Business Line

Honest borrowers will find it easier to get loans from PSBs following the reforms being undertaken, Financial Services Secretary Rajiv Kumar has said, asserting that there would be a premium on integrity.
-Indian Express 

Finance Ministry has asked PSBs to consider asset swaps, including exchange of their corporate portfolios and branches, to optimise nation-wide operations even as consolidation emerges as an option to revive the financial performance of the lending system. Banks may also swap same rated loans — both in corporate and retail segments — to obtain a more cohesive portfolio, a senior Finance Ministry  official said. The move is part of the reforms agenda — Enhanced Access and Service Excellence (EASE) — that seeks to limit the corporate exposure of PSBs at 25% of total risk-weighted assets.
-Economic Times 

SBI has decided to invoke personal and corporate guarantees of defaulting firms even when they face bankruptcy proceedings. Officials of the bank said that letters have been issued to all officers in charge of credit that they must immediately invoke the personal and corporate guarantees.
-Economic Times 

In what could be the biggest management buyout ever in India, a group of employees of Tata Teleservices Ltd (TTSL), led by Chief Ethics Officer, Tata Sons, has pitched for buying out the Tatas from the Co. The bid, understood to be a little over $1 billion, is backed by a consortium of PE investors led by bulge-bracket PE firm, TPG Capital, and includes a major pension fund, according to sources in TTSL who wished to remain anonymous. It is understood that fears of job losses prompted senior, long-serving employees of TTSL to band together to spearhead the offer.
-Business Line 

The labour ministry will begin a drive in April to register over 47 crore unorganised sector workers and provide them with Unorganised Worker Index Number or UWIN Card, bringing them under the social security net, according to an official source.
-The Statesman 

Employees union at Bajaj Auto's Chakan plant has threatened to go on an indefinite hunger strike  from Monday over the non-revision of wages. The Bajaj Auto management was to revise the 3-year wage agreement with its over 1,000 permanent employees at the Chakan plant in 2016 but it has still not moved on the issue, a union leader said today.
-Economic Times 

Thursday, January 25, 2018

Banking Current Affairs -- Capital Infusion for PSBs

India's stock of soured bank loans shrank slightly in the quarter to September last year, the first pullback since a drive to clean up record levels of bad debt began in 2015 and signalling that tighter rules and a new bankruptcy code may be starting to show results. Stressed loans - which include non-performing as well as restructured or rolled-over loans - eased 0.4% from 3 months earlier to Rs 9.46 lakh crore ($148.3 billion) at the end of September, according to unpublished central bank data reviewed by Reuters.
-Economic Times 

The RBI is understood to have declined government’s demand for the additional dividend reported. It was earlier reported that the central government has sought Rs 13,000 crore additional dividend from the RBI. In August, the RBI had paid a dividend of Rs 30,659 crore for the fiscal ended June 2017 which was less than half the Rs 65,876 crore it had paid in 2015-16.
-Financial Express 

The RBI has warned banks about cryptocurrencies, telling them to step up scrutiny of financial transactions by companies and exchanges involved in the trade of bitcoins and similar digital tender, said  people aware of the matter.
-Economic Times 

Usha Ananthasubramanian, MD & CEO, Allahabad Bank, has been elected as the first woman Chairman of Indian Banks' Association (IBA). Ms Usha was elected IBA Chairman for the year 2017-18 by its Managing Committee today. IBA Chairman's position was vacant following the superannuation of Jatinder Bir Singh, who was Chairman & MD of Punjab & Sind Bank, on December 31, 2017. Rajnish Kumar, Chairman, SBI was elected as Deputy Chairman of IBA for the year 2017-18.
-Business Line 

PSBs have kick-started the review of their overseas operations by identifying 41 units for "rationalisation" as part of the larger reform process, a top official said today. Rationalisation could be in terms of consolidation of operations, trimming of staff strength, exiting some of the non-core and non-profit activities or closing down some of unviable overseas offices. "Many banks entered the overseas markets. This activity has to be looked into. Banks have started the process already and about 41 operations they have decided to rationalise," Financial Services Secretary Rajiv Kumar told.
-Economic Times 

ICICI Bank predicts the nation's rate-cut cycle has ended and traders should brace for tightening in the coming months. "Reduction in the interest rate cycle has stopped now. We should be prepared for an increase over a period." CEO Chanda Kochhar  said.
-Economic Times 

The government’s Rs 88,139 -crore capital infusion in struggling PSBs should help in part to mitigate risks but resolution of bad assets and continued high credit costs hinder the sector’s near-term performance, Fitch Ratings said.
-Business Line

IMF chief Christine Lagarde today said the multilateral financial institution is looking into issues relating to crypto currencies to understand potential risks and benefits, even as the US made it clear it will not allow any illicit trade through this route.Speaking at a session on remaking of global finance at the World Economic Forum (WEF), US Treasury Secretary Steven Mnuchin said, "We will make sure cryptocurrencies  are not used for illicit activities."
-Moneycontrol.com

As per the recommendations of the council, for the  housing  sector, there will be less incidence of GST for homes purchased under the Credit Linked Subsidy Scheme (CLSS). For under-construction homes that form a part of CLSS will now be charged GST at 8% instead of 12%, a cut of 4%.
-Economic Times 

SBI Lifetoday announced the launch of a term policy with critical illness cover for 36 diseases. The critical illness cover increases as the term of the policy progresses over the years.
-Economic Times

LIC Mutual Fund has introduced a daily SIP scheme, a move which will help it achieve 30% growth in its SIP portfolio. Under the plan, LIC MF is offering investors the option to invest in SIPs with as low as Rs 300 per day which would be available in 5 equity schemes. These are LIC MF Equity Fund, LIC MF Growth Fund, LIC MF Midcap Fund, LIC MF Infrastructure Fund and LIC MF Index Fund.
-Business Line

The Ministry of Finance today said that  one crore taxpayers have been registered under total revenue collections under GST. GST so far till 24th Jan, 2018, and the collections for the month of Dec 2017 was at Rs. 86,703 crores, as on 24th Jan 2018. Further,  of the 1 crore taxpayers that have been registered under GST so far till 24th Jan, 2018 17. 11 lakh are Composition Dealers which are required to file returns every quarter.
-Financial Express 

Petrol and diesel prices rose to fresh levels in Delhi and other cities in the country on Thursday. Petrol prices in the national capital were at Rs 72.49 per litre- the highest in over three years, data from the  Indian Oil Corp showed. The previous record was Rs 72.51 in Aug 2014. Petrol price in Kolkata, Mumbai and Chennai was at Rs 75.19, Rs 80.39 and Rs 75.18 per litre respectively -- all 3-year highs.
-Economic Times 

sGold prices soared R 350 to trade at over 14-month high of Rs 31,450 per 10 gram, tracking a firm trend overseas amid pick-up in buying by local jewellers. Silver regained the Rs 41,000-mark by jumping Rs 1,100 on increased offtake by industrial units and coin makers.
-Business Line 

PSU bank stocks fell up to 7%  on profit-booking a day after the government said it will infuse Rs 88,139 crore capital in 20 PSBs before March 31. Shares of Punjab National Bank tanked 7.07%, Syndicate Bank 6.92%, Bank of Baroda 6.09%, SBI  4.96% and Oriental Bank of Commerce 4.83% on BSE.  SBI was the worst hit among the 30-Sensex constituents. Allahabad Bank fell 3.76%, Bank of Maharashtra 2.36%, Bank of India 2%, United Bank of India 1.11%, Central Bank of India 1%, Indian Overseas Bank 0.85% and Dena Bank 0.19%.
-Moneycontrol.com 

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.