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Tag: PSBs

Corporate governance standards at PSBs much better than ever before, says Goyal

Corporate governance standards at PSBs much better than ever before, says Goyal

Finance
Emphasising that corporate governance standards being followed by public sector banks are much better than ever before, Finance Minister Piyush Goyal today said the government has stopped the "phone-call thing" coming in from Delhi to the banks. In an apparent dig at the previous UPA regime, Goyal said that not a single phone call would go to "give a loan, to address a loan, to restructure a loan or to settle a loan". Against the backdrop of high amounts of stressed assets in the banking system, the ruling BJP had alleged that earlier, banks used to get calls from the higher ups in the national capital to provide loans to various entities. Prime Minister Narendra Modi had also made references to it while replying to the debate on no-confidence motion in the Lok Sabha last month. Goyal told...
PNB, other PSBs may get Rs 8,000 crore lifeline

PNB, other PSBs may get Rs 8,000 crore lifeline

Finance
NEW DELHI: The government may infuse about Rs 8,000 crore in five or six state-run banks that are likely to fall short of regulatory capital requirements, a senior finance ministry official said. These banks may include Nirav Modi scam-hit Punjab National Bank. “There are some banks that have issued additional tier 1 capital bonds and the interest payments are due. Now if they don’t meet the regulatory capital norms, they will not be allowed to make such payments,” the official said. The government cannot allow public sector banks to default on such payments, which will impact their rating, the official said. Banks raise capital through AT1 bonds, which are perpetual in nature and therefore provide higher interest rates to investors. A high level of bad loans and widening...
Banks Board Bureau has some key suggestions for PSBs

Banks Board Bureau has some key suggestions for PSBs

Finance
The Banks Board Bureau (BBB), headed by Vinod Rai, completes two years on March 31. The government says it has no plans to scrap the bureau but there is no clarity on its role going ahead. BBB has released a compendium of its recommendations on reforms at public sector banks (PSBs) in a report that also cites a lack of engagement with the agency by the government. Here are some of its key suggestions:APPOINTMENTS* Ownership-neutral guidelines for appointment to boards of banks * Boards should be empowered to appoint part-time/non-executive directors COMPENSATION*Delink bank compensation from those of civil servants; introduce performance-based compensation * Short-term variable salary component * Long-term component of stock options PERFORMANCE ASSESSMENT* Relative performance rating (RPR...
Banks Board Bureau backs RBI, says govt still to act on its recommendations on PSBs

Banks Board Bureau backs RBI, says govt still to act on its recommendations on PSBs

Finance
NEW DELHI: Days before its term ends, the Banks Board Bureau (BBB), led by former comptroller and auditor general Vinod Rai, has said that several of its recommendations were lying with the government and pitched for widening its mandate and greater dialogue over restructuring of public sector banks (PSBs). It also pointed out that the RBI does not have powers to regulate PSBs the way it does with private banks. The statement from BBB, in a report made public on Monday, is in line with the recent stance taken by RBI governor Urjit Patel, who had suggested that the regulator did not have sufficient powers to regulate public sector players, something that the gover nment has contested. “Everyone wants more powers saying they do not have enough. The only power available to us is to appoint
Led by PSBs, NPAs soar 34.5% in Q3; pain to linger on: Report

Led by PSBs, NPAs soar 34.5% in Q3; pain to linger on: Report

Finance
The issue of impaired assets may be far from over for the banking system as gross non- performing assets have grown by 34.5 per cent in the December quarter, says a report. Even as bankers guide towards a better position with regard to bad loans, rating agency Care has said the issue of impaired assets is not yet over, including on recognition and accretion of loans into the dud assets category. In the report based on the performances of 30 lenders, including 17 private sector banks and 13 state-run ones, the agency said the quantum of gross NPAs moved up to 9.45 per cent as of December from 8.34 per cent a year ago. While private sector banks' bad loans ratio was maintained broadly at 4.1 per cent, their state-run counterparts registered a spike in the proportion of dud assets a...