When Finance Minister Nirmala Sitharaman last Friday announced the merger of 10 banks into 4, she was translating into action a tiered banking blueprint suggested in 1991 by Maidavolu Narasimham, who holds the distinction of being the only RBI cadre official to have headed the regulator. As chair of the 1991 Committee on the Financial System – he also led the 1998 Committee of Banking Sector Reforms – Narasimham had argued in favour of three-four mega banks at the top of the pyramid, supported by a wider base of last-mile financiers. Tune in as ET's Saloni Shukla brings you a lowdown of the key takeaways of Modi government's PSB merger drive and shares insight on what does the move mean for the banking industry and the economy going forward. (Text: ET Bureau)
Finance Minister Nirmala Sitharaman announced that the gross non-performing assets (NPAs) in the baning sector have come down from Rs 8.65 lakh crore to 7.90 lakh crore. Nirmala Sitharaman made the announcement at a press conference. FM said that the non-performing assets, which were valued at Rs 8.65 lakh crore in December 2018 have come down to Rs 7.90 lakh crore.
In the biggest consolidation exercise in the banking space, the government on Friday announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global sized banks.United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest public sector bank (PSB).Making the announcements, Finance Minister Nirmala Sitharaman said Syndicate Bank will be merged with Canara Bank, while Allahabad Bank will be amalgamated with Indian Bank.Similarly, Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.In place of fragmented lending capacity with 27 PSBs in 2017, now there will be only 12 state-run banks post consolidation, Sitharaman said.
Continuing with NDA's public sector units (PSU banks) merger agenda, Finance Minister Nirmala Sitharaman today met the chiefs of public sector lenders and announced the merger of PNB, OBC, United Bank of India. In another announcement, FM announced the merger of Canara bank with Syndicate Bank. In third announcement, Union Bank will be merged with Andhra Bank and Corporation Bank. In fourth consolidation of banks, Allahabad Bank will be merged with Indian Bank.
When Insolvency and Bankruptcy Code (IBC) came into effect in 2016, it became the preferred debt default resolution route. Around 1,858 companies have been admitted to the corporate insolvency resolution process between January 2017 and March 2019. The central promise of IBC was a time-bound resolution of debt that has gone bad. This promise now appears to be under threat. Suman Layak explains what ails the bankruptcy process under IBC and the way forward. Watch
Despite the IBC, NPAs continue to haunt the banks in the form of unresolved bad loans. A lack of clear business vision and structure, mainly among public sector banks, also ails the banking sector. Dheeraj Tiwari of The Economic Times lists out what troubles the banking sector and announcements that we can expect from the Budget 2019.
Chanda Kochchar won't appear before ED due to ill health. The Enforcement Directorate on Saturday once again summoned former ICICI Bank MD and CEO Chanda Kochhar for questioning on Monday in connection with ICICI Bank-Videocon loan case.
The Reserve Bank of India today issued a draft circular on liquidity risk management for NBFCs. "The circular on the “Liquidity Risk Management Framework for Non-Banking Financial Companies (NBFCs) and Core Investment Companies (CICs)” to be adopted by all deposit taking NBFCs; non-deposit taking NBFCs with an asset size of Rs 100 crore and above; and all CICs registered with the Reserve Bank," RBI said in a press release.
Former ICICI Bank chief Chanda Kochhar on Monday appeared before the Enforcement Directorate (ED) for questioning in connection with the Videocon loan case.
A day after the Enforcement Directorate summoned former MD & CEO of ICICI Bank Chanda Kochhar on May 3, in connection with the Videocon money laundering case, the agency today wrote to investigative authorities in Singapore, Hong Kong on Chanda Kochhar quid pro quo case, according to sources quoted by ET NOW.
NCLT Mumbai approves IndusInd Bank and Bharat Financial Inclusion Ltd merger. Nayantara Rai and Pankaj Poddar speak to PH Ravi kumar. Non-Exec Chairman of BFIL to understand the operative parts of this deal. Listen in.
In a move that may change the very basics of the India's bankruptcy regime, the Supreme Court Tuesday declared RBI's momentous circular on defaulting companies as unconstitutional. The circular in question sought to deal with resolution of stressed assets by way of a revised framework. Commonly referred to as the February 12, 2018 circular, it had forced seriously stressed companies to come clean and declare bankruptcy. Tune in as ET's Joel Rebello brings you all the details. (Text: ET Online)
Making the first arrest in the Infrastructure Leasing and Financial Services (IL&FS), the Serious Fraud Investigation Office (SFIO) arrested the former Chairman of IL&FS Hari Sankaran. A special Session court in Mumbai has remanded him to SFIO’s custody till Thursday. “ Shankar has been arrested in connection with the ongoing investigations in to the affairs of IL&FS and its group entities.. Hari Sankaran has been arrested on the grounds of abusing his powers in IL&FS Financial Services Ltd,” the press release by SFIO read.
SBI Chairman Rajnish Kumar after meeting Fin Min India on Jet Airways resolution plan, says "Not all hopes are lost; IBC is the last option for Jet. What can banks do if both equity partners in Jet can’t reach a consensus?"
SBI Chairman is likely to discuss lenders strategy for Jet Airways with Arun Jaitley, ET Now's Nayantara Rai learns from her sources. Listen in!
Probe in ICICI bank case: Investigation reveals that Chanda Kochhar was the sole beneficiary and no other employee of ICICI bank benefited from the deal.
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