BUSINESS
Chart of the Day | What do bankers think of loan demand going forward?
Bankers are bullish. This optimism could be due to the increased capex spending plans of corporations and start of a lower interest rate era that could spur consumer demand
BUSINESS
RBI’s confusing messaging on Big Tech, AI risks to banks is not helping
The RBI governor’s caution regarding the perils of excessive technology in banking isn’t new. We have heard this warning before. Does the regulator know something that we don’t?
BUSINESS
Don’t read too much into the Great Indian Rupee Melodrama
The rupee is swaying to global whims, not tanking. A gradual depreciation in the rupee's value could be part of the RBI's plan to neutralise excess capital inflows
BUSINESS
Shaktikanta Das’ warning on ‘growth at any cost’ is an eye opener for aggressive MFIs
Some NBFCs have been pushing credit to customers beyond their borrowing capacity by imposing stiff performance targets on employees
BUSINESS
Chart of the Day | A look at the link between vegetable prices and food inflation
Vegetable prices are a decisive factor in determining inflation trends at this point. There are early signs of food inflation easing but it is too early to say for sure. The MPC should be more worried about vegetable prices now than the Israel-Iran skirmish
BUSINESS
Will Iran-Israel war cause an agenda shift in the just rejigged MPC?
The MPC meet scheduled for October 7-9 will mostly likely set the ground for a rate cut two months later. The MPC is set to reverse its rate stance unless big surprises happen in the meantime
BUSINESS
Non-banks turn to money markets as funding channels dry up after RBI nudge
Even after this shift bank funding remains the biggest source. NBFCs borrow from banks to then lend to borrowers at a margin
BUSINESS
Banks have a new-found love for industries. Sign of a reviving economy?
The shift in lending patterns is indicative of critical undercurrents in the economy. Money typically flows more to segments where economic activity is strengthening
BUSINESS
Toxic work culture: How to stop product misselling in banks
We know the work culture in banks isn’t the best, but what is the solution? Here are five ways to address the problem of product misselling and toxic work culture in banks.
BUSINESS
High gold prices spur growth in loans against jewellery; is there a risk build-up here?
Gold prices have escalated in recent years and are up by 25.96 percent year-over-year. This makes the yellow metal a more valuable commodity for banks to give loans against.
BUSINESS
Chart of the Day | RBI’s pill worked well to cure NBFC exuberance in unsecured loans, show data
The RBI data shows that overall, in line with the banking sector, NBFCs too have decreased the exposure to unsecured loans following the regulatory caution
BUSINESS
Did banks do a good job of passing on RBI rate hikes? Here’s what the data show
The past two years have seen RBI increase repo rates by 250 bps. Data on transmission across bank groups show that increase in lending rates was higher in the case of private banks than among public sector banks. However, in the case of deposits, transmission was higher for PSBs
BUSINESS
What will be the impact on banks if RBI does a Fed?
An RBI rate cut could put near-term stress on banks’ margins but will augur well for asset quality
BUSINESS
Is RBI’s close scrutiny of NBFC books linked to fast growing unsecured personal loans?
There has been strong growth in unsecured personal loan disbursals in the books of NBFCs vis-à-vis banks. These are high-risk loans that could cause problems down the road
BUSINESS
Will the regulator have a rethink on the P2P lending industry?
The biggest problem with the P2P players is that time is not on their side for a course correction. Most of these companies are backed by equity investors who aren’t known for their patience.
BUSINESS
More bad news likely for PSBs from potential agri-loan stress
Recent announcements of farm loan waivers and the likelihood of more in the run-up to elections in the next 18 months could trigger the risk of loan waivers for state-owned banks
BUSINESS
Chart of the Day | Are banks betting too much on renewable energy sector too soon?
Bank lending to renewable energy has galloped in the last two years. There are clear upside risks to this exposure that needs to be closely watched
BUSINESS
Why are young bankers leaving the profession so soon?
Targets are given to bank employees to sell insurance products along with core banking products. Mounting pressure can create havoc as it leads to misselling or forced selling of products
BUSINESS
Banks are left nearly bald after IBC haircuts; what's the cure?
The recovery track record of banks in the insolvency process has been poor. Losses incurred in corporate lending imply big sacrifices made by shareholders.
BUSINESS
For India’s big banks, small is not beautiful in the NBFC lending market
Data shows banks are now very selective in funding NBFCs; only top-rated NBFCs get loans at relatively lower rates. Borrowers rated AA and below are struggling to access bank credit
BUSINESS
Are Indian MFIs pushing too much credit to the borrower?
There are signs of overheating in some pockets of the industry, signalling build-up of potential stress. It is time for the industry to recall the lessons of the 2010 crisis and do a course correction
BUSINESS
Shifting goal posts on inflation targeting will be unfair to India's poor households
For the average Indian, inflation essentially means prices of most consumed food and vegetable items.
BUSINESS
ULI can make the credit process quicker; the tricky part is recovery
Technology platforms, as envisaged by the RBI, can smoothen the credit process and cut time delays. The difficult part is recovering the small loans
BUSINESS
On real rate debate, the gloves are off in the near-expiry MPC
As both Varma and Goyal argued, holding interest rates too high for too long can hurt economic growth. But Das and Patra warn that lowering the guard on inflation too early too can be a mistake.
