25/12/2018
🙏Good Morning All...🌻👩👩👦
☕25.12.2018: Today's Banking / Financial News at a Glance
🍒 Hopeful that we will exit PCA in FY20: Pallav Mohapatra : State-run lender Central Bank of India has adopted a four-pronged strategy to become profitable again. In an interview Pallav Mohapatra, managing director and chief executive officer of the bank, says he expects profitability to return in the January-March quarter. The first focus is to reduce the losses. If you see the sequential trend in this financial year, losses are coming down. As against ₹1,500 crore loss in the first quarter, losses came down to ₹984 crore in the second quarter. In the current quarter, the losses will be around ₹600 crore. In Q4, the bank should make some profit. Overall, the current financial year will record a loss. But, for the next financial year, [we will record] profit. One is the focus on recovery. The second focus is to reduce the higher risk-weighted assets. When we do so, that will help in improving the capital adequacy ratio. The third is to improve the net interest margin (NIM). If I am able to improve NIM by 20-25 basis points, that will help in increasing my total income. The fourth is to have a control over costs. There are controllable costs and there are non-controllable costs. - Hindu (For Full Articles : https://www.thehindu.com/business/hopeful-that-we-will-exit-pca-in-fy20/article25814351.ece)
🍒 Amend IBC to blacklist frivolous bidders, says Pallav Mohapatra : Central Bank of India's new CEO and managing director Pallav Mohapatra has a challenging task at hand. He has to pull the distressed bank out of sticky loans, drive it to profitability, and get the Reserve Bank of India (RBI) to lift lending restrictions under the prompt corrective action (PCA) framework. An old hand at stress management as deputy MD at the State Bank of India (SBI), he is not particularly perturbed at the red marks he has spotted in Central Bank. SBI's total gross non-performing assets (NPAs), after all, is almost equivalent to the total advances of Central Bank. So it is not a surprise when he says he has identified the sour areas and is confident to pare the bank's net loss from Rs 923.60 crore to Rs 600 crore by the quarter ending in December, just two months after taking charge only in September 2018. In an interview with Manju AB, Mohapatra explains the measures he is taking to turn the bank to profitability in the fourth of the current fiscal. - DNA (For Full Artciles : https://www.dnaindia.com/business/interview-amend-ibc-to-blacklist-frivolous-bidders-says-pallav-mohapatra-2699569)
🍒 Allahabad Bank working hard to meet Rs 1,000 crore recovery target in Q3 : Allahabad Bank has set a cash recovery and upgrade target of Rs 1,000 crore for the October-December quarter to clean up its balance sheet, and the lender is working “very hard” to achieve it, managing director and chief executive officer SS Mallikarjuna Rao has said. The city-based public sector lender is aiming to bring down its gross non-performing assets (NPAs) to around Rs 23,000-24,000 crore by this fiscal-end from Rs 27,236 crore at the end of the second quarter, Rao said during an interview with FE on Saturday. As a part of the turnaround strategy, the lender, which is under the prompt corrective action (PCA) of the Reserve Bank of India, is looking to bring down the net NPA ratio to below 6% by the first quarter next fiscal. The bank is looking to come out of the PCA framework by June 2019. “We expect that the bank will be in a position to reach break-even by June 2019. Then we will approach RBI for reviewing our PCA status,” said Rao, who assumed office of MD & CEO of Allahabad Bank in September. - Financial Express
🍒 P V Bharathi appointed as MD, chief executive officer of Corporation Bank : P V Bharathi has been appointed as managing director and chief executive officer of the Corporation Bank, according to an order issued by the Personnel Ministry on Monday. Bharathi is at present Executive Director, Canara Bank.She will take over the charge on or after February 1, 2019 and remain in the post till March 31, 2020 - the date of her superannuation, the order said.In another order, the ministry said Birupaksha Mishra and Balakrishna Alse S has been appointed as executive director in the Corporation Bank and the Oriental Bank of Commerce, respectively.Mishra is General Manager, Central Bank of India. Balakrishna is GM, Corporation Bank.K Ramachandran has been appointed as executive director of the Allahabad Bank. He is at present General Manager, Corporation Bank.Ramachandaran will hold the office up to the date of his superannuation which is June 30, 2021. - Business Standard
🍒 Corporation Bank, Bank of India to resume lending from FY20 on pick-up in liquidity: Kotak Sec : With the government announcing another round of capital infusion into public sector banks (PSBs) last week, Bank of India and Corporation Bank seem to the frontrunners among the four-five PSBs to resume normal lending operations outside the prompt corrective action (PCA) framework from FY2020, according to a Kotak Securities report. Kotak Securities assessed that the total remaining amount to be infused over the next three months is ₹83,000 crore. “The distribution of capital is not clear, but it does appear that the government is keen that all financial institutions are in better shape to restart lending with full freedom as a few large ones were constrained by being classified under PCA,” said the report. - Business Line
🍒 Small finance banks may remain unscathed by farm loan waivers : An anticipated wave of populism in the run-up to next year’s balloting is unlikely to rock small-finance banks such as Ujjivan, Equitas, and AU as earlier instances of farmloan waivers showed that state governments had fully compensated these lenders that often loan funds to the less privileged. Shares of Ujjivan rose 25%, Equitas 12% and AU Small Finance Bank 8% in the past one month despite loan waivers announced in Madhya Pradesh, Rajasthan, and Chhattisgarh. These announcements are otherwise expected to lead to a lending freeze for the farm business in the coming quarter, likely putting a question mark on the performance of the loans advanced. “Small-finance banks are urban MFIs and farm-loan waivers do not affect their customers much,” said Digant Haria, analyst, Antique Broking. “Ujjivan has a 90% micro finance book while Equitas has moved away from micro finance… to around 25%.” - Business Line
🍒 Clear bank dues when loans are waived: Nabard to states : Amid a flurry of farm loan waivers, financial institution Nabard has written to states advising them to ensure that dues of banks that actually write-off the loan are immediately cleared to ensure that the credit cycle is not broken. The move follows the experience of several lenders in Andhra Pradesh and Tamil Nadu, where the dues have remained pending although they had written off the loans based on announcements from the state governments, banking sources said. In 2016, while announcing the Rs 6,000-crore loan waiver, Tamil Nadu, for instance, had decided to clear the dues of over Rs 3,200 crore to cooperative institutions over five years. States, such as Uttar Pradesh, have cleared the dues to lenders, the sources added. - Economic Times
🍒 Srikrishna panel seeks replies from Chanda Kochhar in Videocon loan case : The ICICI Bank-appointed committee set up under retired Supreme Court judge B N Srikrishna is reaching closure in its probe on allegations of code of conduct and conflict of interest by the bank’s former managing director (MD) and chief executive officer Chanda Kochhar in the Rs 32.5-billion ICICI Bank-Videocon loan case. Based on the probe findings so far in the matter, the committee has sought replies from Kochhar, ICICI Bank, and other involved entities. The committee is expected to complete the investigations and submit the report by the third week of January. - Business Standard
🍒 RBI cancels registration of 1,490 NBFCs in 2 years; Kolkata tops the list : Stepping up oversight over credit companies, the Reserve Bank of India has cancelled the registration of 1,490 non-banking financial companies (NBFCs). These included NBFCs that failed to meet prudential norms and those that voluntarily surrendered registration. Kolkata tops the list with 617 cancellations, and New Delhi stands at second spot with 203, followed by Mumbai at 190, according to the data provided by the RBI for parliamentary questions (Lok Sabha).These cancellations happened owing to non-compliance with mandatory requirements like minimum net-owned funds (NoF) of Rs 20 million, not submitting statutory returns, and companies not being traced at the addresses they gave.In some cases, NBFCS surrendered the certificate of registration, the RBI said. - Business Standard
🍒 New RBI governor should follow his “dharma” to protect autonomy: Rangarajan : Shaktikanta Das is not the first bureaucrat to be appointed as RBI governor and should follow his “dharma” to protect RBI’s autonomy like his predecessors, former central bank Governor C Rangarajan said on Monday. Das should work closely with the government on all the pressing issues, Rangarajan said. “Many Delhi men (bureaucrats) have come to RBI, this is not the first time. Once they take on new responsibility, they have to defend the autonomy of the Reserve Bank,” Rangarajan told PTI on the sidelines of an event at the IGIDR here. - Business Line
‘🍒 In a resolution plan under IBC, personal guarantors can’t step into creditor’s shoes’ : The National Company Law Appellate Tribunal (NCLAT) has ruled that a personal guarantor’s right to subrogation against a corporate debtor can be taken away in a resolution plan under the Insolvency and Bankruptcy Code (IBC). Simply put, a personal guarantor has no right to step into the shoes of a creditor against the ‘corporate debtor’ (company going through IBC) in case of a resolution plan under the IBC. This ruling came in an appeal filed by ‘Lalit Mishra & Ors’, the promoters of Sharon Bio Medicine Ltd (corporate debtor), against the February 28 order of NCLAT, Mumbai. - Business Line
🍒 Wish you a very Happy Christmas 🍒
Central Bank to sell up to ₹10,000-cr. bad loans to asset reconstruction firms this fiscal, says its MD
