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Tag: PSBs

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...
PSBs look to frame common rules to value stressed assets

PSBs look to frame common rules to value stressed assets

Finance
NEW DELHI: The finance ministry is working with state-run lenders to frame a common set of rules for valuation of stressed assets for faster resolution of loans extended by consortia of banks. A senior finance ministry official said a select group of bankers is working to arrive at common rules of valuation. “It has been observed that in cases of joint lending, banks are unable to arrive at a common valuation, which stalls the resolution process. Further, individually, banks also fear that if they agree to a certain haircut, it may not stand the scrutiny of vigilance agencies,” the official said, adding that new norms will address such concerns. The group was formed during ‘PSB Manthan,’ a two-day conclave of PSBs and has representation from all leading banks. A bank executive who is p...
Recap will need follow up with structural changes at PSBs: UBS

Recap will need follow up with structural changes at PSBs: UBS

Finance
NEW DELHI: The recapitalisation programme for public sector banks is likely to boost equity market sentiment as it fuels growth recovery hopes, but should be followed up with structural changes at such banks for better results, says an UBS report.According to the global financial services major, though the recapitalisation amount may create a supportive environment for growth, it may not drive growth by itself.The government on October 24 unveiled a Rs 2.11-lakh crore two-year road map to strengthen NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution."We think this capital infusion can ease Ind AS adoption for state-owned-enterprise (SOE) banks and accelerate non- performing loan (NPL) clean-up," UBS said in the research note.The repo...
PSBs told to approach alternative mechanism to fast-track mergers

PSBs told to approach alternative mechanism to fast-track mergers

Finance
NEW DELHI: Public sector banks looking to merge would have to approach the new alternative mechanism once they informed the stock exchanges about the plan. "This will ensure that all issues related to consolidation from the government, the promoter and regulator RBI are addressed from the beginning," a senior government official told ET. This would also expedite decision-making and address issues well in time, the official added. “Under the Bank Nationalisation Act, 1969, there are provisions allowing such mergers so there is no need to amend any laws,” the official said. However, due to various court judgements on mergers and acquisition in state-run firms, it is imperative that the merger proposals are approved by Parliament, the official added. “So, the alternative mechanism will h...