Yes Bank CEO Ravneet Gill says the house is back in order; RBI commences pre-policy meetings with bankers
The promoters of Aditya Birla Idea Payments Bank this week, notified discontinuation of business to exchanges and its customers.
This revealed cracks in the differentiated banking structure that was introduced to boost digital payments in the country. They attributed it to an unviable economic model, amid changing business environment.
Meanwhile, Jet Airways is scouting for resolution plans to meet the company tribunal’s 90-day deadline to freeze a roadmap for revival.
The 18-month-old Aditya Birla Idea Payments Bank, a venture between Aditya Birla Nuvo and Idea Cellular, has decided to shut its operations.
It has asked customers to transfer their balances before July 26. “We will be restricting any further credits (add money) to your account from July 26, 2019,” the bank says in a note to customers, adding that “full and complete arrangements” have been made for return of all deposits.
The resolution professional (RP) appointed by Jet Airways' lenders, has invited an Expression of Interest (EoI) from prospective applicants by August 3 as part of its efforts to salvage the debt-ridden airline.
In an advertisement posted on the airline’s website on July 20, the RP has set a deadline of August 14 to come up with the final list of resolution applicants. The resolution plans will have to be submitted by September 5.
After completing his first quarter as Yes Bank’s CEO, Ravneet Gill said that he is assured that the “house is in order” and slippages are under control as the lender plans to raise capital by September-end to refocus on growth.
“The capital that we need is purely growth capital and is not capital that is being sought for absorption buffers or provisioning,” Gill said in an earnings call on July 17.
He added that he does not expect any slippages outside the bank’s bad loan watch list.
Also, the bank’s internal profits for the next eight quarters will be enough to cover the provisioning needs for slippages from sub-investment grade book.
In the customary pre-policy meeting held on July 19, Reserve Bank of India (RBI) Governor Shaktikanta Das asked state-owned banks to follow the new framework for the resolution of stressed assets, and speed up recovery efforts, among other issues facing the country's banking sector. The Governor gave "impetus to the resolution of stressed assets facilitated by the revised framework for resolution," the RBI said in a statement.State Bank of India (SBI) based on findings of an inspection report. The regulatory lapses relate to bad loans classification, fraud risk management and reporting of frauds. “Based on the inspection report and other relevant documents, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with directions issued by RBI,” the banking regulator said in a statement on July 15.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.