Fitch flags loan recast scheme; says will extend uncertainty over banks’ asset quality

The scheme, which is applicable till March 2021, allows rescheduling of most retail and corporate loans, including MSME loans that were not impaired prior to March 1, 2020. The Reserve Bank’s scheme to allow lenders to recast loans will extend uncertainty over the banking sector’s asset quality, Fitch Ratings said on Tuesday. In a major relief to corporate and retail borrowers, last week RBI permitted banks to go for one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability. According to Fitch, the scheme could open a window for […]

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RBI’s one-time debt restructuring scheme will prolong banks’ asset quality uncertainty: Fitch

The central bank’s experience with loan restructuring in the past hasn’t been encouraging. A one-time debt restructuring allowed by India’s central bank to help lenders and borrowers amid the COVID-19 pandemic will prolong uncertainty about the banking sector’s asset quality, Fitch Ratings said on Tuesday. India’s central bank said last week it will allow restructuring of corporate and personal loans to ease debt strains on companies and lenders, a move widely awaited by the banking industry. “The policy could open a window for banks to build capital buffers while putting off full recognition of the coronavirus pandemic’s impact on loan portfolios, […]

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Indian banks in crying need for reforms; here’s how privatising PSU banks can help

PSU banks have been busy fighting one emergency after another, be it demonetisation or mergers. Even as the Indian banking industry remains stable amid a severe economic downturn, there is a crying need for reforms in the industry. The downward risk arising from the vulnerability of Scheduled Commercial Banks (SCBs), mostly the PSU banks, is worrisome, and needs to be addressed immediately, said a report by Brickwork Ratings. The balance sheets of banks were already under severe stress before the pandemic hit. On top of that, the crisis created by the pandemic and moratorium offered is expected to deepen the hole […]

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Bandhan Bank aims to expand home loan portfolio in states having housing shortage

The bank’s growth agenda is getting bolder, backed by increased investor confidence in it. Bandhan Bank, which is keen on building more diversified and secured loan book, is looking to expand its housing finance business in states that have major housing shortage, focussing on Rs 10-25-lakh loan amount bracket. Home loan products are now available in 302 banking outlets across the country, and the private sector bank will be ramping up the presence to cover a larger portion of its pan-India network of 4,559 banking outlets. “Before Covid-19, we had planned to open around 65 new centres for home loan products […]

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Sundaram Finance Q1 net up 6% to Rs 166 crore

Sundaram Finance Group’s services include financing for the entire range of commercial vehicles, passenger cars and construction equipment, as well as specially-designed working capital products. Non-banking finance company Sundaram Finance has reported a 6% rise in its net profit to Rs 166 crore for the quarter ended June 30, compared with Rs 157 crore in the corresponding period last year. Revenue from operations increased to Rs 948 crore from Rs 930 crore. Assets under management (AUMs) of the company stood at Rs 29, 580 crore as on June 30, against Rs 29, 977 crore in the year-ago period. The deposit base crossed […]

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South Indian Bank gets RBI nod for non-financial subsidiary

SIB said it has already centralised all its operations, both on the liability and asset sides. South Indian Bank (SIB) said on Monday it has got in-principle approval from the RBI for a non-financial subsidiary. The subsidiary would commence operations once it receives nod from the regulator and the bank completes related formalities. “The subsidiary would enable us to streamline and optimise various operations so as to improve the overall productivity and efficiency of the institution,” said VG Mathew, MD and CEO of SIB. The subsidiary is a further step in consolidating SIB’s position as a retail banking powerhouse. SIB said […]

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Drop KV Kamath as head of loan restructuring panel, Bank Employees’ Association urges Centre

The expert committee for debt recast has been envisaged as part of the central bank’s resolution framework for Covid 19-related stress. The All India Bank Employees’ Association (AIBEA) has written to the Reserve Bank of India (RBI) seeking a review of its decision to appoint former ICICI Bank chief KV Kamath as the head of the expert committee on debt restructuring. The association claimed that Kamath was not fit for the role, citing media reports that he was named in the first information report (FIR) filed by investigative agencies in the Videocon case. “As per media reports, in the FIR filed […]

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Bank of Baroda posts Rs 864 crore loss on higher provisioning

Bank of Baroda (BoB), the third-largest public sector lender, on Monday posted a net loss of Rs 864 crore for the June quarter because of extra provisioning of Rs 1,811 crore on standard accounts. Total provisions in the quarter rose 72% year-on-year (y-o-y) to Rs 5,628 crore. The operating profit remained flat at Rs 4,320 crore, compared with Rs 4,276 crore in the comparable quarter last year. The lender reported a sharp decline in the loan book under moratorium. Total 21% of the loan book stood under moratorium in the second phase, as against 65% in the first phase. Sanjiv Chadha, […]

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ICICI Bank sets QIP floor price at Rs 351.36

On Monday, shares of ICICI Bank ended at Rs 363.60 on the BSE, up 1.61% from the previous close. ICICI Bank on Monday announced the launch of its qualified institutional placement (QIP) and set the floor price at Rs 351.36 per share. A decision on the final price and allotment of shares will be taken on Friday, the bank said in a notification to the stock exchanges. The bank had earlier received the board’s approval to raise up to Rs 15,000 crore through sale of shares. The entire amount is likely to be raised in a single tranche, sources said. On […]

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