The government has announced yet another round of bank mergers to create mega banks. In the first round, State Bank of India absorbed its five associate banks and Bharatiya Mahila Bank. State-run insurer LIC is in the process of acquiring IDBI Bank. The three-way Bank of Baroda, Dena Bank and Vijaya Bank merger was announced on Monday.
The government’s measures to stem the rupee fall and deal with the capital account situation are unlikely to result in any significant shift in fund flows into the country in the immediate future. According to experts, these measures are better suited when the sentiment in the global market is positive towards emerging markets and in general when it is relatively easy for emerging market corporates to raise money abroad.
Ahead of the central bank’s monetary policy meeting next month, lenders are increasing their lending rates.
HDFC Bank, the country’s second largest private lender, has hiked its base rate by 0.20 percentage points to 9.15 per cent. The new rate is effective from September 12.
Fears of trade war escalating and a downgrade of Indian equity by a leading global brokerage house spooked the domestic market, with benchmark Sensex plunging over 505 points. The barometre plunged 505 points or 1.33 per cent to close at 37,585.51, Nifty 50 fell 137 points or 1.19 per cent to end at 11,377.75. Reliance, HDFC Bank, Sun
Pharma and SBI suffered major losers.
The All-India Bank Employees’ Association opposed the decision to merge banks. CH Venkatachalam, general secretary of the Association said: “There is no evidence that merger would strengthen banks or make them more efficient. We have seen five associate banks merging with SBI. No miracle has happened. On the other hand, it has resulted in closure of branches, increase in bad loans, reduction of staff and business.”
Measures announced by the government over the weekend failed to boost sentiment in the forex market as the rupee declined sharply by 67 paise against the US dollar on Monday, snapping gains registered in the past two consecutive sessions. The rupee ended at 72.51 against the greenback, down 0.90 per cent from its previous close of 71.86.
Productivity of most employees is impacted by unrelated tasks and administrative work as 86 per cent in a survey feel that they lose time each day on work-specific tasks but unrelated to their core job.
Nearly nine in 10 employees (86 per cent) say they lose time each day on work-specific tasks unrelated to their core job, with 41 per cent of full-time employees wasting more than an hour a day on these extraneous activities, according to a workforce management provider Kronos Incorporated survey.
Funding of farm loan waivers, election-related spending and other populist measures are likely to ensure that states are set to miss their fiscal consolidation targets budgeted at the beginning of the year, says a report.
HDFC Standard Life Insurance has elevated its executive director and chief financial officer, Vibha Padalkar (in pic), to the post of managing director and chief executive officer for a period of three years, effective from Wednesday. Her appointment came after the current MD and CEO, Amitabh Chaudhry, resigned on September 8 to join Axis Bank as MD and CEO for a period of three years, effective January 1, 2019.
Bank credit grew by 13.49 per cent to Rs 87,89,259 crore in the fortnight ended August 31, according to recent RBI data. In the year-ago fortnight, bank advances was at Rs 77,44,237 crore.
In the reporting period, the growth in advances was higher than the previous fortnight ended August 17, 2018, when it had grown at 12.94 per cent to Rs 86,75,129 crore.