Public sector banks and corporate governance

Synopsis: Issues that are hampering the performance of PSBs, consequences and the way forward. What are the issues affecting the performance of PSBs? Delay in appointments of CEO’s and MD’s of PSSBs: In the recent past, after the MD and CEO of Bank of Baroda stepped down, his successor took charge after 100 days. Whereas,… Continue reading Public sector banks and corporate governance

Our banks are mispricing capital and this is simply unsustainable

Source: This post is based on the article “Our banks are mispricing capital and this is simply unsustainable” published in Live Mint on 2nd September 2021.  Syllabus: GS3- Indian Economy Relevance: Monetary policy and Economic stability  Synopsis: Below-cost lending in India could have economic repercussions beyond the financial burden imposed on bank shareholders. Background We have a situation in India today where… Continue reading Our banks are mispricing capital and this is simply unsustainable

Time to bury Mudra ‘loan mela’ (On MUDRA loans)

Source: Business Standard Relevance: MUDRA loans, Loan mela Synopsis: Mudra loans have generated no jobs, resulting in misspending of trillions of taxpayers’ money. The loans were supposed to be for a three- to five-year period. The first cycle of the experiment is over, and the result has been disastrous. Context Recently, the Chairman of the… Continue reading Time to bury Mudra ‘loan mela’ (On MUDRA loans)

The world may soon get a vaccine against Chikungunya

Source: Down to Earth What is the news? A multi-country Phase II / III clinical trial of a vaccine led by the International Vaccine Institute (IVI) in partnership with Bharat Biotech International Ltd (BBIL) has begun in Costa Rica. It is funded by the Coalition for Epidemic Preparedness Innovations (CEPI) with support from the Ind-CEPI… Continue reading The world may soon get a vaccine against Chikungunya

Finance Minister unveils 4th edition of Public Sector Bank Reforms Agenda – EASE 4.0

Source: PIB What is the News? The Union Minister of Finance and Corporate Affairs has unveiled the fourth edition of the Public Sector Bank (PSB) Reforms Agenda ‘EASE 4.0’ for 2021-22. About EASE: Enhanced Access and Service Excellence(EASE) is a common reform agenda for Public Sector Banks (PSBs). It is aimed at institutionalizing clean lending,… Continue reading Finance Minister unveils 4th edition of Public Sector Bank Reforms Agenda – EASE 4.0

Economic Survey 2019-20:Public Sector Banks(PSBs)

News:The Economic Survey has dedicated an entire chapter to the status of public sector banks and the NPA crisis. Facts: Survey on Public Sector Banks: Since 1969,India’s Banking sector has not developed proportionately to the growth in the size of the economy. India will need at least eight banks in the top 100 banks globally… Continue reading Economic Survey 2019-20:Public Sector Banks(PSBs)

Explained: What bank mergers can mean, the potential downsides

Recently,the Government has announced a merger of ten public sector banks(PSBs) into four larger entities.This would take the number of banks in the country from 27 in 2017 to 12. The idea of bank mergers had floated since 1998 when the second Narasimham Committee had recommended the government to merge banks. In 2014, PJ Nayak… Continue reading Explained: What bank mergers can mean, the potential downsides

Government unveils mega bank mergers

Government has announced a merger of ten public sector banks(PSBs) into four larger entities.Now,the total number of PSBs after consolidation will come down to 12 from 27 in 2017. The banks which are merged are (a)Punjab National Bank, Oriental Bank of Commerce and United Bank of India to merge to form the country’s second-largest lender… Continue reading Government unveils mega bank mergers

PSU banks kick off nationwide exercise to boost credit demand across sectors

Public sector banks(PSBs) has held a consultative process with their branch heads across the country to identify the issues and challenges faced by branches. This exercise was undertaken as part of a bottom-up approach to shape policies so that PSBs can act as a catalyst in making India a $5-trillion economy. The consultative process has… Continue reading PSU banks kick off nationwide exercise to boost credit demand across sectors

Government issues guidelines for ₹1 trillion partial credit guarantee for NBFCs

Government has operationalised a partial guarantee scheme announced in the budget for non-banking and housing finance companies(NBFCs and HFCs). The scheme provides for a one-time partial credit guarantee to Public sector banks(PSBs) for purchase of pooled assets of financially sound NBFCs. The scheme aims to address temporary asset liability mismatches of otherwise solvent NBFCs/HFCs without… Continue reading Government issues guidelines for ₹1 trillion partial credit guarantee for NBFCs

FinMin plans 16-point ‘KRA’ to push PSBs

Finance Ministry has planned to closely monitor Public sector banks (PSBs) achievements on 16 key performance indicators (KPIs) at the branch, region, State and national level. This step was taken in the backdrop of PSBs market share declining while that of private banks is rising.PSBs accounted for 63% of the outstanding credit of scheduled commercial… Continue reading FinMin plans 16-point ‘KRA’ to push PSBs

Budget Briefs: Growth capital for public sector banks

Finance Minister in the Budget 2019 speech has announced that the public sector banks(PSBs) will be provided with a capital infusion of Rs 70,000 crore. This bank recapitalisation is aimed at bolstering the capital base of the state-owned banks.It will also give a much-needed boost to the stressed banks who are under pressure owing to… Continue reading Budget Briefs: Growth capital for public sector banks

Post fund infusion, ICRA revises rating for 6 PSBs

Credit Rating agency,ICRA has revised the outlook of six public sector banks,of which five are positive revisions.The ratings were revised after the capital infusion in these banks by the government. Earlier,RBI had also removed them from Prompt Corrective Action (PCA) after the infusion of capital in these banks.PCA is a process or mechanism to ensure… Continue reading Post fund infusion, ICRA revises rating for 6 PSBs