Banks are saddled with over Rs 10 trillion bad loans in the system, most of them in infrastructure sectors like power, steel and road projects, forcing the RBI to list as many 40 largest NPA accounts, which constitute 40 per cent of the mess, to be referred to the national debt tribunals for recovery and resolution in 2017.
This is the opportunity that Vaidyanathan, an avid long distance runner, had been looking for to go the full hog as far as the banking sector is concerned
Besides, gross non-performing assets (NPAs) could peak in current fiscal, but elevated levels of provisioning on these NPAs will continue to negatively affect the banks during fiscals 2018 and 2019, Moody's Indian affiliate ICRA said.
While the NPA clean-up exercise continued its rigour, the work overload and cumbersome out-of-court resolution processes to be completed before December 13 has led banks to complete filing the cases by first week of January.
The much hyped Insolvency and Bankruptcy Code gets its much needed amendment law and RCom finds buyer to reduce its debt. Also with the year coming to an end Moneycontrol takes a look at the insolvency and digital revolution in India.
"The impairment crisis in the banks has also highlighted certain basic deficiencies with regard to the appraisal of long-term projects with a significant gestation time," the central bank said in the Financial Stability Report (FSR) for the first half of the current financial year.
In 2013, RBI had restricted the bank from lending freely. Earlier in the day, Bank of India announced that the RBI had put them under Prompt Correction Action
In a filing to stock exchanges, BoI said Reserve Bank of India has placed it under Prompt Corrective Action Framework, consequent to the onsite inspection under the risk based supervision model carried out for the year ended March 2017.
For the audit done by the RBI during FY2017 for the asset quality as on March 31, 2016, banks reported a combined divergence of a massive Rs 43,500 crore, against their reported gross NPAs of Rs 5.92 lakh crore.
In order to help smaller companies the government is reviewing the insolvency provisions, including recent amendments barring defaulting promoters from bidding for their own assets undergoing insolvency.
In a blog, Jaitley said that over the last few days, a rumour is being propagated regarding waiver of loans of capitalists by banks.
Bankers have advocated the idea of differentiated lending to ensure they focus on their strengths relating to their locations and expertise and not be worried about competition.
Last month, Finance Minister Arun Jaitley had announced an unprecedented Rs 2.11 lakh crore two-year road map for strengthening public sector banks. The plan included re- capitalisation bonds of Rs 1.35 lakh crore.
Addressing an event here, he said over 95 per cent of the fraudulent activities were reported from the financial sector, including banks, insurance companies and cooperative societies.
At its earnings update on October 17, Axis Bank, which is rated Baa3 with a stable outlook by Moody’s, reported a 24% quarter-on-quarter increase in NPAs driven largely by a Rs 8,100-crore fresh slippages in the corporate front.
SEBI has put off implementation of its directive 'until further notice' that required listed firms to inform exchanges if they default on loan payments.
The move seems to be proposed as over 25,000 flat owners are in a soup for around eight years. The investment will help the complete the unfinished projects.
The agency said it estimates the total amount of stressed loans, which includes NPAs and standard assets that are under pressure currently and could deteriorate into NPAs, to be at Rs 11.5 trillion or 14 per cent of the system.
Work has already begun on the resolution of 39 cases that have been identified by the Reserve Bank of India (RBI).
Jaitley was in city to attend the centenary completion celebrations of Pune District Central Co-operative Bank (PDCC). NCP chief Sharad Pawar is associated with this bank for last 50 years.
A look at top cues from the domestic and international markets that could have a bearing on D-Street today.
The governor could not have asked for a better anniversary gift. And to be fair he deserves it. While the former governor took the responsibility of forcing the recognition of NPAs, to governor Patel goes the credit of shepherding the resolution process.
The RBI Deputy Governor said that banks should engage in renegotiation much before default has actually taken place.
The NPA ratio of 38 banks increased to 10.21 percent in June 2017 from 8.42 percent in June 2016, which is the highest in the last six quarters, according to a data report compiled by Care Ratings.
"It is worrisome that the level of NPAs in the MSME sector has touched 16 per cent. We are trying to solve the problem", CGM of SBI (Bengal circle) Partho Pratim Sengupta said.