- PSBs PETITION NEW RBI CHIEF TO RELAX NPA RESOLUTION NORMS: The newly appointed Reserve Bank of India Governor Mr. Shaktikanta Das met Mumbai-based Public Sector Bank (PSBs) Chiefs in his first meeting with bankers this week and discussed a host of issues. During the meeting the PSB Chiefs have urged the RBI Governor to relax NPA resolution norms. They told that the 180 days deadline within which the account has to be resolved in case of a default is rather too severe and they wanted the deadline to be extended.
- LIQUIDITY CONSTRAINTS FACED BY NBFCs TO TIGHTEN CREDIT SUPPLY AND DAMPEN GROWTH: Liquidity constraints faced by some Non-Banking Finance Institutions will tighten the credit supply and this will affect economic growth. This is as per Moody’s Investors Service Report. The report says this will slow down economic growth to some extent for the current fiscal. Besides, any further distress in the NBFC sector will pose significant downside.
- GOVERNMENT PLANS ADDITIONAL 30,000 CRORE CAPITAL INFUSION IN PSU BANKS: The government is considering an additional capital infusion of up to Rs. 30,000 crore in Public Sector Banks as they have been unable to raise the required funds from open markets. The government initially had envisaged that the PSU Banks would raise Rs. 58,000 from stock markets by 2019 to meet Basel III norms. But due to the subdued market conditions, banks have been unable to raise enough funds from markets so far. Also the Non-Performing Assets of almost all the banks have seen a spurt which has hurt their bottomlines.
- SBI PLANS TO DISBURSE AGRICULTURE LOANS DIGITALLY: State Bank of India is planning and is running a pilot project to disburse agriculture loans digitally. It expects to roll out the services to the rural public very soon. SBI has said that there are lot many fin-tech players in the market who are ready with the software and many of the Indian states have the land records of the farmers in digital format so this will help in providing digital loans to farmers using the technology.
- 4 OF THE 11 INDIAN BANKS FACING PROMPT CORRECTIVE ACTION (PCA) MAY COME OUT OF PCA: Reserve Bank of India has estimated that 4 out of 11 banks facing Prompt Corrective Action (PCA) framework may come out of it based on their performance in Quarter 4 of the current fiscal and with some capital infusion by the government. Presently the 11 banks which are facing PCA are, IDBI (Net Loss Rs.3602 crore and Net NPA- 17.30%, United Bank (Net Loss Rs. 883 crore and Net NPA 14.36%, IOB (Net Loss Rs. 487 crore and Net NPA 14.34%, UCO Bank (Net Loss Rs. 1136 crore, and Net NPA 11.9%), Dena Bank (Net Loss Rs.417 crores and Net NPA 11.70%), Corporation Bank ( Net Profit Rs.103 crore and Net NPA 11.65%), Bank of Maharashtra (Net Profit Rs 27 crore and Net NPA 10.61%), Central Bank (Net Loss Rs. 924 crore and Net NPA 10.36%), Oriental Bank ( Net Profit Rs.102 crore and Net NPA 10.07%), Allahabad Bank (Net loss Rs.1083 crore and Net NPA 96% and Bank of India (Net loss Rs. 1156 crore and Net NPA 7.64%).
- DIRECT TAX COLLECTIONS RISE BY 15.5% FOR APRIL-NOVEMBER 2018 PERIOD: The Direct Tax collections are up by 15.7% for the April-November 2018 period as compared to the corresponding period last year. The government has collected Rs 6.75 lakh crore during this period while the refunds amount to Rs 1.23 lakh crore. After adjusting the refunds the net collections are Rs. 5.51 lakh crore which shows a jump of 15.5% over the last year.
- RESERVE BANK OF INDIA REDUCES SLR IN A GRADUAL MANNER: The Reserve Bank of India has initiated a step towards a gradual reduction in Statutory Liquidity Ratio (SLR) from the existing 19.5% to 18% in the next six quarters from January next year.