Banking
Bank Unions write to Finance Minister for merger of RRBs with Sponsor Banks
The merger of Regional Rural Banks with Sponsor Banks, as demanded by bank unions, aims to enhance efficiency, viability, and sustainability in the banking sector. This strategic move will not only improve employee skills and governance but also mobilize deposits, streamline credit delivery, and benefit the rural population significantly.
RBI cautions against surge in private credit between corporates and non-banks
The Reserve Bank of India (RBI) warns of systemic risks from the rapid growth of private credit, which has quadrupled in the past decade, especially due to its opacity and interconnectedness with banks and non-banks. The RBI highlights potential vulnerabilities in this segment, including the risk of sharp losses during a credit cycle downturn and challenges posed by complex structures and liquidity risks.
Fintech lenders have high delinquency levels in small value loans says RBI
The RBI has highlighted concerns over consumer loans, noting that over half of borrowers have three or more loans simultaneously. The Financial Stability Report flags high delinquency rates, especially among personal loans under ₹50,000 and loans from fintech lenders. Despite overall improvements in credit quality, stress in retail loans remains significant, particularly for private sector banks.
Indian banks' gross NPA ratio at multi-year low of 2.8%, net NPA down to 0.6% in FY24: RBI Fin Stability Report
The Reserve Bank of India reported that Indian banks' gross NPA ratio reached a multi-year low of 2.8%, with net NPA at 0.6% by March 2024. The global economy faces risks from geopolitical tensions and high public debt, but India's financial system remains robust, supporting economic growth through sustained credit expansion, the RBI said.
Consumer spending peaks in non-metro Indian cities: Visa
Visa, a global digital payments provider, revealed on Thursday that non-metro cities in India such as Dharamshala, Mullanpur, and Vishakapatnam are emerging as the biggest daily spenders. This insight comes from Visa Consulting and Analytics' consumer spending trends for the 2024 summer cricket season. Notably, there has been an overall increase in online transactions across all segments, with food and grocery delivery apps showing a 23% surge in usage.
Farm loan waivers to negatively impact banks' asset quality: Macquarie
Macquarie Capital warned that farm loan waivers could negatively impact banks' asset quality, particularly for public sector banks. States like Telangana, Jharkhand, and Punjab are either implementing or considering such waivers. Macquarie's Suresh Ganapathy highlighted that these waivers create moral hazards and deteriorate credit culture, as even reliable farmers might start defaulting.
Bandhan Employees' Welfare Trust to move court following allegation against Chandra Shekhar Ghosh
Bandhan Employees' Welfare Trust, managed independently by employees, faces baseless allegations. Trust members seek explanations on financial matters, with legal action initiated against disruptors. The Trust aims to resolve disputes through legal channels for a fair outcome.
Banks seek clarity from RBI on credit card network norms
Several banks have sought clarity from the Reserve Bank of India (RBI) regarding guidelines that mandate offering existing credit card customers a choice of networks like Rupay, Visa, and MasterCard. As per RBI's guidelines issued in March, card issuers must provide this choice both during initial issuance and at the time of renewals. A senior bank executive informed ET that banks have sought clarification on whether this choice of networks should be extended to all existing customers or only implemented during renewal processes.
Yes Bank restructures workforce, lays off 500 employees in cost-cutting move
While the layoffs have happened across several verticals ranging from wholesale to retail, the branch banking segment saw a large impact, one person cited above said. The people sacked have been given severance pay amounting to three months’ salary. “Yes Bank has launched an internal restructuring exercise at the advice of a multinational consultant. So far, around 500 have been asked to go and we can see more sackings in the coming weeks,” a person aware of the development said.
Punjab & Sind Bank signs pact with Indian Army for salary account
"PSB Gaurav Bachat SB Salary account is exclusively designed to cater to the distinct banking requirement of serving and retired personnels. The product is also strategically aimed to tap Agniveers enrolled in the Agnipath scheme, ensuring a comprehensive financial solution that aligns with distinctive needs of the segment," Punjab & Sind bank MD and CEO Swarup Kumar Saha told PTI.
Must Watch
Banks in a GST fix over RBI's directive to levy penal charges
The Reserve Bank of India's directive to levy penalties only in the form of 'penal charges' is posing a tax dilemma for banks. Banks fear that the indirect tax on such levies would attract the goods and services tax (GST). The new rule, which came into force from April 1, 2024, was brought in by the central bank to ensure "reasonableness and transparency" in disclosure of penal interest. However, banks have asked the tax authorities to spell out their stand on the issue.
Amid outflow fears, RBI reviews LCR by carrying out special audits with banks
Recently, the Reserve Bank of India conducted special audits with banks to verify their holdings of eligible securities for maintaining the liquidity coverage ratio (LCR). This action coincides with the central bank's apprehension regarding potential sudden withdrawals via digital banking channels. Introduced post the 2008 global financial crisis, LCR mandates banks to retain specified amounts of government bonds that can be quickly sold to manage a theoretical 30-day stress period featuring significant cash outflows.
Finance Ministry calls meeting with PSBs to review financial inclusion schemes ahead of budget
The finance ministry has scheduled a meeting on Tuesday with heads of state-owned banks and financial institutions. The purpose of the meeting is to review the progress of the government's key financial inclusion schemes, including the Jan Dhan Yojana, Jan Suraksha Yojana, and Mudra Yojana, ahead of the budget.
FSIB to hold interview for SBI chairman's position on June 29
FSIB to conduct interviews for SBI Chairman selection. Three out of four MDs eligible. Khara's replacement to be chosen before his retirement.
RBI urges banks to address credit gaps for underserved sectors
Despite India's progress in banking access, micro and small business units, marginal farmers, and self-help group members still lack institutional credit and comprehensive financial services, as highlighted by the Reserve Bank of India.
SLBCs can play effective role in financial inclusion by better coordination with govt, NGOs: RBI DG
RBI Deputy Governor Swaminathan J emphasized the crucial role of State Level Bankers' Committees (SLBCs) in advancing financial inclusion. He highlighted their potential for better coordination with governments and NGOs, effective credit planning, and promoting digital financial literacy. Swaminathan urged SLBCs to bridge the gap between financial services and underserved communities, fostering inclusive and sustainable economic growth.
BANKING STOCKS
NSEBSE
| Company Name | Latest | Change | %Change | Volume |
|---|---|---|---|---|
| HDFC Bank Ltd. | 1696.15 | -5.35 | -0.32 | 27537325 |
| ICICI Bank Ltd. | 1219.9 | 1.91 | 0.16 | 20516632 |
| State Bank of India | 844 | -1.36 | -0.16 | 20378887 |
| Axis Bank Ltd. | 1288.95 | 3.55 | 0.28 | 22311393 |
| Kotak Mahindra Bank Ltd. | 1830.55 | 32.4 | 1.81 | 13342769 |
