by admin | May 25, 2021 | Banking, Corporate, Corporate finance, Corporate Governance, News, Politics
New Delhi : Recapitalisation is a major issue for state-run banks owing to the massive non-performing assets (NPAs), or bad loans, accumulated by them and they are now exploring various sources of raising capital, according to a leading public sector bank (PSB).
“Banks’ capitalisation is a major issue for PSBs. We have to make high provisions, also now with the NCLT (National Company Law Tribunal) cases,” UCO Bank Chief Executive R.K. Thakkar told BTVi channel.
The Reserve Bank of India (RBI) has identified the second batch of large accounts which have defaulted in repayment of loans and has advised banks to resolve them.
In June, the RBI had come out with a list of 12 large accounts, which totalled about 25 per cent of the current gross NPAs of the banking system for reference to the NCLT under the Insolvency and Bankruptcy Code (IBC).
“We are trying various source to raise capital… We have requested the government for support, but for the balance beyond the budgetary support we have to go to the market, depending on the appropriate time,” Thakkar said.
He said the UCO Bank’s capital requirement for the current fiscal is to the tune of Rs 3,000 crore and “with the provisioning required for the NCLT cases the requirement may go up to another Rs 500-600 crore.”
The RBI has also advised banks to make higher provisions for the accounts to be referred under the IBC.
This was intended to improve bank provision coverage ratios and to ensure that banks are fully protected against likely losses in the resolution process.
Thakkar said that he expected the first tranche of the government support to arrive to the bank in a month’s time.
He also said that recapitalisation bonds would be one of the possible instruments to explore in the efforts to supplement the government recapitalisation.
The PSBs have accumulated a high ratio of NPAs, going up to 17-18 per cent of their loan portfolio.
The government has committed Rs 70,000 crore for banks’ recapitalisation over five years, of which Rs 10,000 crore remains to be disbursed for the current fiscal.
—IANS
by admin | May 25, 2021 | Banking, Corporate, Corporate Buzz, Economy, Markets, News
New Delhi/Mumbai/Chennai/Kolkata : Banking operations across the country were hit on Tuesday as over 10 lakh bank employees in more than 1,30,000 branches pan-India struck work — protesting against reforms in the banking sector among other issues — thereby affecting cheque-clearing activity. However, private lenders like ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank functioned normally.
An official of the United Forum of Bank Unions (UFBU) — the umbrella body of nine unions which has given the strike call — said “over 10 lakh bank employees spread in more than 1,30,000 branches across the country struck work hitting cheque-clearing activity”.
Most public sector bank branches visited by IANS correspondents had their shutters down.
Banking operations in Tamil Nadu were affected with around 55,000 bankers striking work pressing for their demands, said a report from Chennai citing a top All India Bank Employees’ Association (AIBEA) leader.
“The strike is a huge success. It is a dawn-to-dusk strike as cheque clearing operations start at 6 a.m. Bankers working in around 10,300 branches struck work protesting the policies towards the sector,” AIBEA General Secretary C.H. Venkatachalam told IANS.
Venkatachalam said around 12 lakh financial instruments valued at around Rs 7,300 crore could not be cleared.
Government treasury transactions were impacted. Foreign exchange transactions, import and export bill transactions and sanction of loans, among others, were also affected.
In most of the places, clearing operations, particularly outward clearing, was seriously affected.
Around 42,000 bank employees and officers from Maharashtra joined their colleagues in the daylong nationwide strike, with plans to intensify the agitation, a top official said.
“The strike was a total success in Maharashtra. No banking transactions could be carried out in any bank branches, cheques clearing operations were completely paralysed. Bank ATMs which worked for a couple of hours initially also could not dispense cash later,” said UFBU Convenor Devidas Tuljapurkar.
The strike hit around 42,000 branches of 22 public sector banks including the monolithic State Bank Of India and IDBI, 18 old generation banks, eight foreign banks and 56 Regional Rural Banks in Mumbai and Maharashtra, said AIBEA leader Vishwas Utagi.
Tuljapurkar said the strike was to oppose banks privatisation, banks consolidation and for initiating tough measures against big corporate loan defaulters, besides opposing the increase in service charges and reduction in interest rates on saving accounts by banks, which is an attempt to shift the burden of big loan defaulters onto the common masses.
Several thousand bank employees staged a rally at Azad Maidan in Mumbai which was addressed by leaders of UFBU and its nine affiliated unions.
Discussing plans to intensify the agitation, Tuljapurkar said the bank staffers will now join a march to Parliament on September 15, followed by another two days’ strike in late October-early November.
The strike comes after the talks between UFBU on one side and Indian Banks’ Association, Chief Labour Commissioner and Department of Financial Services (DFS) failed on Friday.
“All India State Bank Officers’ Federation and All India State Bank of India Staff Federation, being part of the UFBU, will participate in the strike. It is likely that our bank will also be impacted by the strike,” State Bank of India (SBI) earlier said in a regulatory filing in the BSE.
Among the 17-point charter of union demands, the main relates to the government’s denial of adequate capital to public sector banks, thus creating conditions for privatisation, an AIBEA statement said on Tuesday.
“The one-day banking strike has been successful as close to 9,500 ATMs and around 3,000 branches are closed with 70,000-100,000 bank employees participating in the protest in West Bengal,” AIBEA’s (West Bengal) General Secretary Rajen Nagar said in Kolkata.
All India Bank Officers’ Association’s (West Bengal) General Secretary Sanjay Das said employees and officers from cooperative and grameen banks including regional rural banks also participated in the strike and private banks’ branches were mostly closed as their employees supported unions’ demand.
“The strike is 100 per cent successful. Bank employees and officers are conducting demonstration in front of banks’ branches and ATMs,” Das said.
Thousands of employees of state-run banks began day-long strike in cities and towns across Karnataka, affecting cash and other transactions for the day, said a report from Bengaluru.
“We have received an overwhelming response from all our members for the strike call in support of our demands, including our opposition to the merger of state-run banks,” state AIBOC General Secretary A.N.K. Murthy told IANS.
In Bengaluru, hundreds of employees of various banks took out a rally and staged demonstrations protesting against the government’s proposal to merge their banks.
Private banks, including ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra, however, opened for business as usual
Banking services were badly affected in the Left-ruled Tripura on Tuesday as most of the major banks remained closed due to the nation-wide employees’ strike.
The striking employees were also demanding compensation to employees for extra work done on account of demonetisation of high value currencies, and booking loan defaulters.
According to Nikhil Das, a leader of the striking employees, around 3,000 bank employees belonging to about 414 branches of 15 nationalised, regional, rural and cooperative banks in the northeastern state took part in the strike in Tripura.
While banking operations across Kerala were hit by Tuesday’s strike, new generation banks were reported to be functioning normally. There were sizeable crowds in front of many ATMs and at some of these, the cash finished by noon. The worst affected were cheque clearing operations.
—IANS
by admin | May 25, 2021 | Business, Large Enterprise
New Delhi, (IANS) HSBC on Thursday announced closure of its 21 retail branches in India to reshape its business around digital capabilities.
The decision was taken as a part of the strategic review of its retail banking and wealth management (RBWM) business in India, the company said in a statement.
“The network will consolidate from 50 branches across 29 cities to 26 branches across 14 cities. This change reflects changes in customer behaviour, who are increasingly using digital channels for their banking,” it said.
HSBC said that in the consolidation process, most of the staff will be re-deployed and absorbed in various other departments.
The statement cited HSBC India group general manager and CEO Stuart P. Milne as saying that the move “aims to position our RBWM business for the future, with the right mix of digital versus physical branch distribution.”
“India is a priority market for HSBC and we will continue to invest to achieve
sustainable growth by supporting the needs of our customers,” it said.
“The consolidation of the branch network will take place over the coming months in a phased manner,” it added.
The branches being consolidated account for less than 10 percent of HSBC’s retail customer base in India, the company said.
by admin | May 25, 2021 | Banking, News
Chennai : (IANS) A special court here has convicted including Indian Bank’s former chairman and managing director M.Gopalakrishnan and five others in a fraud case and sentenced them to two years rigorous imprisonment, a CBI statement said.
In a statement issued here, the Central Bureau of Investigation (CBI) said a CBI court here on Thursday convicted six individuals – four bank employees and two other people, and two other companies for causing Rs.5.51 crore loss to Indian Bank.
A total fine of Rs.40,500 have been imposed on the convicted people.
According to the statement, Kiran Innovations, headed by Rajiv Batra, availed various loan facilities by submitting forged documents, in connivance with bank officials, and misutilised the same.
by admin | May 25, 2021 | Banking, News
New Delhi : (IANS) Indian banks can reduce per-transaction costs by up to 50 percent in the next few years by going digital, an Assocham-PwC study said on Friday.
“Banks will have to make the operating model agile so as to easily adapt to changing business dynamics, as the people driving technological innovations at banks have grown up on technology that is different from what is prevalent in today’s times,” the study said.
Titled ‘Logging into digital banking: Creating access, transforming lives,’ the study conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and PwC said banks need to structurally change their cost base and institute more aggressive cost management processes.
Branch banking needs to undergo significant transformation, with the branch size and costs being reduced by introduction of new models and migrating transactions to low-touch digital channels, it said.
“Branches may need to take many forms, from flagship information, advisory and engagement hubs (offering education, financial advice, full service capabilities and community offerings) to smart kiosks,” it added.
Competitive reach of banks will no longer be determined by branch networks, rather by technology and advertising budgets, the ASSOCHAM-PwC study noted.
New digital entrants will able to offer similar high-value services, unencumbered by the massive legacy cost bases of traditional banks. “Existing banks will need to restructure their cost base, while at the same time investing in innovation around areas such as analytics and delivery,” it said.
The study said that going ahead, smart devices will grow in importance and take its place alongside cards as primary medium for consumer payment which will continue to remain popular as they are quick and effective.
Besides, industry utilities like customer authentication, fraud checking, payments’ processing and KYC processing, will arise as cost pressures and technological advances will force banks to focus on customer service and risk management, it added.
