BANKING

dilute-the-role-of-dfs-ex-rbi-guv-calls-for-major-overhaul-of-the-banking-system

Dilute the role of DFS: Ex RBI Guv calls for major overhaul of the banking system

Former RBI governor Raghuram Rajan on Monday, September 21, advised the government to privatize select public sector banks, set up a ‘Bad Bank’ to deal with NPAs, and dilute the role of the Department of Financial Services.

The reforms are necessary to ensure the growth of the banking government without the periodic boom-bust cycles, said a paper titled ‘Indian Banks: A Time to Reform?’ ; co-authored by Rajan and Viral Acharya, Former Reserve Bank Deputy Governor. “Re-privatization of select PSBs can then be undertaken as part of a carefully calibrated strategy, bringing in private investors who have both financial expertise as well as technological expertise; corporate houses must be kept from acquiring significant stakes, given their natural conflicts of interest”; the paper said.

It also argued that state-linked banks can be a first step in altering the ownership structure of some public sector banks (PSBs), where the government brings down its stakes to below 50 percent, creating distance from operations of banks, and improving governance along the way.

On bank license norms, the paper pitched for on-tap licensing of banks to be kept open at all times. The paper also stressed on the need of allowing PSBs to recruit laterally while retaining the talent they have.

23 Sep 2020
psbs-remain-government-captives

PSBs remain government captives

Structural problems of the PSBs, most of them imposed by the government and its system of political governance, has incrementally increased the government shares in 12 PSBs even as it has been seen trying really hard to offload its shares.
For instance, the huge recap infusion of Rs2.6-lakh crore into the PSBs over the past three years - to offset their bad loans - has sharply accelerated government holdings in these banks which could, in turn, limit the size of future capital infusion in certain banks. Of the 12 PSBs, the government holds 92-96 percent in four of them and 83-89 percent in five banks.
Of course, the government would like to offload its shares in PSBs. But the problem is there are very few takers for shares of PSBs despite cheap valuations of 0.4-0.6 times book. The only way investors' appetite in the shares of PSBs can be whetted up is by way of withdrawing the government's socialist hands from the functioning of these banks and driving them towards following the best global banking practices.
Once this transition takes place, investors would be glad to chase PSBs shares and enable the government to recover its cost plus profit. 

16 Sep 2020
dilute-the-role-of-dfs-ex-rbi-guv-calls-for-major-overhaul-of-the-banking-system

Dilute the role of DFS: Ex RBI Guv calls for major overhaul of the banking system

By IndianMandarins 23 Sep 2020

Former RBI governor Raghuram Rajan on Monday, September 21, advised the government to privatize select public sector banks, set up a ‘Bad Bank’ to deal with NPAs, and dilute the role of the Department of Financial Services.

The reforms are necessary to ensure the growth of the banking government without the periodic boom-bust cycles, said a paper titled ‘Indian Banks: A Time to Reform?’ ; co-authored by Rajan and Viral Acharya, Former Reserve Bank Deputy Governor. “Re-privatization of select PSBs can then be undertaken as part of a carefully calibrated strategy, bringing in private investors who have both financial expertise as well as technological expertise; corporate houses must be kept from acquiring significant stakes, given their natural conflicts of interest”; the paper said.

It also argued that state-linked banks can be a first step in altering the ownership structure of some public sector banks (PSBs), where the government brings down its stakes to below 50 percent, creating distance from operations of banks, and improving governance along the way.

On bank license norms, the paper pitched for on-tap licensing of banks to be kept open at all times. The paper also stressed on the need of allowing PSBs to recruit laterally while retaining the talent they have.

psbs-remain-government-captives

PSBs remain government captives

By IndianMandarins 16 Sep 2020

Structural problems of the PSBs, most of them imposed by the government and its system of political governance, has incrementally increased the government shares in 12 PSBs even as it has been seen trying really hard to offload its shares.
For instance, the huge recap infusion of Rs2.6-lakh crore into the PSBs over the past three years - to offset their bad loans - has sharply accelerated government holdings in these banks which could, in turn, limit the size of future capital infusion in certain banks. Of the 12 PSBs, the government holds 92-96 percent in four of them and 83-89 percent in five banks.
Of course, the government would like to offload its shares in PSBs. But the problem is there are very few takers for shares of PSBs despite cheap valuations of 0.4-0.6 times book. The only way investors' appetite in the shares of PSBs can be whetted up is by way of withdrawing the government's socialist hands from the functioning of these banks and driving them towards following the best global banking practices.
Once this transition takes place, investors would be glad to chase PSBs shares and enable the government to recover its cost plus profit. 

another-term-for-sbi-chairman-rajnish-kumar-

Another term for SBI Chairman Rajnish Kumar?

By IndianMandarins 20 Aug 2020

The interview to be conducted by the Banks Board Bureau next week is supposed to interact with the outgoing SBI Chairman Rajnish Kumar and three managing directors – C S Setty, Dinesh Kumar Khara, and Arijit Basu.

Rajnish Kumar, Chairman of the country’s largest lender is completing his term October this year. Reportedly, the Union Government has asked him to appear for an interview to fill the position. This is something being seen as the possibility of another term for him.

s-n-rajeshwari-appointed-as-cmd

S N Rajeshwari appointed as CMD

By IndianMandarins 30 Jul 2020

Ms S N Rajeswari appointed as Chairman-cum-Managing Director in Oriental Insurance Company Limited (OICL) till the date of her superannuation i.e. 31.05.2022. Presently, she is working as GM, New India Assurance Company Limited (NIACL).

cabinet-okays-bringing-cooperative-banks-under-rbi-supervision

Cabinet okays bringing cooperative banks under RBI supervision

By IndianMandarins 25 Jun 2020

The government will bring an ordinance to put all cooperative banks under the Reserve Bank of India supervision. This is an attempt to streamline them. This decision was taken in the cabinet which was announced by Union information and broadcasting minister Prakash Javadekar.

Now, around 1,482 urban cooperative banks and 58 multi-state cooperative banks will come under the supervisory powers of the RBI. The RBI’s powers as they apply to the scheduled banks will also apply to cooperative banks. This decision will give an assurance to more than 86 million depositors in these banks that their money amounting to Rs 4.84 lakh crore will remain safe.

uco-bank-signs-bancassurance-pact-with-sbi-life-for-insurance-solutions

UCO Bank signs ‘bancassurance’ pact with SBI life for insurance solutions

By IndianMandarins 24 Jun 2020

PSB UCO Bank has tied up with four insurers to offer various insurance products to its customers through its network of branches across the country. The lender teamed up with SBI Life Insurance Company, the Oriental insurance company and Religare insurance Company, Star Health and Allied insurance company for selling their products. With these new partnerships, the lender will now offer a way wider range of insurance products.

UCO Bank signs a ‘bancassurance’ pact with SBI life Insurance to supply insurance solutions to the purchasers of UCO Bank at its 3,086 branches spread across the country. Bancassurance is a partnership between a bank and an insurance firm, where the bank sells the tied insurance company’s insurance products to its clients.

md-ceo-of-a-psb-appointed-as-osd-of-another-psb

MD & CEO of a PSB appointed as OSD of another PSB

By IndianMandarins 16 Apr 2020

Former Syndicate Bank MD and CEO Mrutyunjay Mahapatra has been appointed as OSD of another PSB Canara Bank. The government’s notification on April 13, 2020 has appointed Mahapatra, former managing director and chief executive officer of Syndicate Bank as an OSD on a supernumerary basis in Canara Bank.

His appointment comes to effect from the date of assumption of office, and till the age of superannuation (May 5, 2020) or until further orders, whichever is earlier. Shares of Canara Bank on Wednesday closed at Rs 86.60 apiece on the BSE, down1.81 percent from the previous close.

merger-of-banks-to-be-effective-from-april-1,-2020

Merger of banks to be effective from April 1, 2020

By IndianMandarins 05 Mar 2020

Exercise of consolidation of 10 PSBs into four is on course and the merger will come into effect from April 1, 2020. Cabinet has given a go-ahead for the merger proposal with the government being in regular touch with these banks.

There will be no regulatory issues. The banks’ merger is on course and decisions have already been taken by the respective bank boards. The mergers are aimed at creating global sized banks in India.

This has been the biggest consolidation exercise in banking sector. The government in August 2019 announced mergers of public sector banks by bringing down their total number to 12 from 27 in 2017.

United Bank and Oriental Bank of Commerce will be merged with PNB; Syndicate Bank will be merged with Canara Bank; Allahabad Bank will be amalgamated with Indian Bank, and Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.

free stat counter