Weekly banking wrap: Finance Minister-private banks' meet outcome; RBI releases report on liquidity management framework and more
MoS Finance Anurag Thakur said that banks should treat the Insolvency and Bankruptcy Code as the last resort for resolution of stressed assets and approach the NCLT only when other options have been explored.
The banks are exploring different ways to reduce the government’s stake, including instruments such as qualified institutional placement, FPO, rights issue, among others
Moneycontrol's Vaibhavi Khanwalkar does a 3 Point Analysis on the risks of moving the banks out of PCA.
Reasoning that the banks were adequately capitalized to absorb any loss and had shown improvement in their financial performance, the board of the RBI decided to take out all the six banks from the PCA restrictions
There are risks looming in the form of delayed loan recovery and power sector defaults
The share of frauds in banks under the prompt corrective action framework far outweighs their share of total bank capital dedicated to operational risk
The meeting will review the progress with respect of some of the decisions taken in the last meet on November 19.
There is no free lunch. The market is forgetting there will be a price to pay for loosening the government’s and RBI’s purse strings.
Restricted lending reduced the overall loans of these banks over the past six years, but they are fighting tooth and nail for market share in retail lending
Last week, the RBI in its central board meeting decided the issue of banks under Prompt Corrective Action (PCA) will be examined by Board for Financial Supervision (BFS) of the central bank
"Whether a rule-based or a discretion-based approach works better remains a matter of empirical debate till date," it said, while commenting on the PCA and provisioning norms.
The Finance Ministry had also indicated at the time that it was 'broadly in agreement' with the framework that RBI proposed
Banks have strongly pitched for easing the regulatory requirements in order to expand their loan books
Finance Minister Arun Jaitley had said last month that demands of public sector banks (PSBs) to relax the norms of the PCA framework will be taken up with RBI
Currently, there are 12 banks - 11 in the public sector and one in the private sector – whose capital, asset quality and/or profitability do not meet pre-specified thresholds
Sadly, legislators forget that when laws get corroded either by inaction or through amendments, or through moves that make the collection of evidence difficult, the very fabric of governance gets frayed.
The Reserve Bank of India issued a clarification after spotting some misinformed messages circulating online about the closure of some public sector banks after being placed under Prompt Corrective Action.
After IDBI Bank, Dena Bank and UCO Bank, the Reserve Bank has invoked prompt corrective action (PCA) on Central Bank of India.
Essar Group and Loop Telecom today commenced their arguments in the Supreme Court opposing the jurisdiction of a special court taking cognisance of the chargesheet against them in the case arising out of the agency's probe into the 2G spectrum allocation scam.