The Indian economy wasn’t in great shape even before the Covid-19 outbreak, which has only made matters worse. The report by the Reserve Bank of India’s (RBI) expert committee on a resolution framework, headed by former ICICI Bank chief K V Kamath, brings this out clearly. The report notes that the pandemic “has affected the best of companies” and businesses that were otherwise viable before the outbreak. Experts believe that banks may be more risk-averse to restructuring loans this time around, having already suffered big losses in previous restructuring efforts. … [Read more...] about 70% of banking sector debt affected by Covid-19 impact
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Mumbai At a time when the economy is facing challenges, banks should not solely focus on the retail segment as sluggish growth can impact this category of loans, a top banker said. The country's gross domestic product declined 23.9 per cent in the April-June 2020 quarter, and analysts expect the economy to contract in double digit during the current financial year. "A complete shift to retail may not be in the best interests because if your economy doesn't grow, even your retail at some point of time would get impacted," State Bank of India Managing Director Arijit Basu said at a virtual event organised by ET BFSI. Basu said that going forward, there could be some changes in approach adopted by banks towards offering loans to various categories of borrowers. "In MSMEs (micro, small and medium enterprises), for example, cash flow budgeting will be one of the things that will take forefront. There are banks that have used this model effectively in the past," he said. According to him, in … [Read more...] about Focusing only on retail segment may not be prudent for banks in current scenario: SBI MD
To bring the co-operative banks under the regulatory purview of RBI, finance minister Nirmala Sitharaman on Monday introduced Banking Regulation (Amendment) Bill, 2020 in the Lok Sabha.By bringing co-operative banks under the regulatory framework of Reserve Bank of India (RBI),The law seeks to protect the interest of the depositors.Earlier, bank’s lending operations were disrupted along with limitations on withdrawals by depositors.The amendments will provide RBI the flexibility to undertake a scheme of merger of a bank without placing it under moratorium.Co-operative banking sector has seen many scandals in the past. with the amendment, the central bank’s banking regulations will be applicable to cooperative banks as well. However, the existing powers of the state registrars of co-operative societies under state laws will not be affected.As per the statement of objects and reasons mentioned in the bill, “Further amendments were proposed to be made in section 45 of … [Read more...] about New Banking Regulation (Amendment) Bill presented in Lok Sabha for co-operative banks
In the speech, titled ‘It is Time for Banks to Look Deeply Within: Reorienting Banking Post-Covid’, Shaktikanta Das, the Governor of Reserve Bank of India (RBI), acknowledged the struggles that the banking sector faced with the advent of coronavirus pandemic. He goes on to give effective solutions that maintain the integrity of Indian banking system in difficult times.RBI Measures to combat the PandemicIn the wake of the pandemic, RBI announced various measures to ease the pressure on the banks and individuals. These include interest rate cuts, higher structural and durable liquidity, moratorium on debt servicing, asset classification standstill and a special resolution window within our Prudential Framework for Resolution of Stressed Assets. Das mentioned that “Post containment of Covid, a very careful trajectory needs to be followed for orderly unwinding of the various counter-cyclical measures taken by the Reserve Bank and the financial sector should return to … [Read more...] about Time for banks to look deeply within
'Notwithstanding anything contained in any other law for the time being in force, all powers exercisable by an appropriate regulator, specified under column (2) of the First Schedule, under the respective Acts... in the International Financial Services Centres will be exercised by the Authority in so far as it relates to the regulation of the financial products, financial services or financial institutions, as the case may be.' … [Read more...] about Will IFSCA be the boss of India’s financial markets?