Plan and Policy

Plan & Policy

Bad loans, other challenges seen hurting Q4 earnings of banks

The fourth quarter of financial year 2017 will continue to be a challenging quarter for banks. Moderate loan growth, surplus liquidity, decline in trading gains sequentially and lack of resolution of bad loans would dent earnings of banks. However, retail-tilted and mid-sized private banks would continue to outshine peers as seen in the previous quarters.

Many curbs if banks exceed bad loan limits

The Reserve Bank of India (RBI) on Thursday released the revised prompt corrective action (PCA) framework that is aimed at faster resolution of bad loans.
The central bank said under the revised framework the capital asset quality and profitability would continue to be the key areas for monitoring. The indicators to be tracked for capital, asset quality and profitability would be capital-to-risk weighted assets (CRAR)/ common equity tier I ratio, net NPA ratio and return on assets.

Private sector banks better placed to explore M&As

Talks around consolidation in the banking sector have gained traction in the recent past following comments at various forums on the need for having a few large banks. The merger of the associate banks of State Bank of India and Bhartiya Mahila Bank with State Bank of India and the news on likely consolidation in the private sector as well have further fuelled the debate on consolidation.

Investor’s choice: Small banks that give hefty returns

Most small bank stocks which have market capitalisation of less than Rs 20,000 crore have outperformed the benchmarks Sensex and Nifty Bank in the year to date (YTD) period with returns in the range of 10 to 68.91 per cent.
The Sensex has given year to date return of 11.87 per cent as on April 11, 2017 while Nifty Bank, a benchmark for bank stocks, has given YTD return of 19.57 per cent as it closed at 21,736 on April 11, 2017.

Building the case for consolidation of banks

Is the time ripe for consolidation in the Indian banking space? After the merger of the country’s largest lender State Bank of India (SBI) with its five associates and the Bhartiya Mahila Bank this month, the market is abuzz with news of more consolidation. However, this time it is among private sector banks.

Gold imports jump 582% in March on festival and wedding demand

Gold imports by India are said to have jumped almost seven-fold in March from a year earlier as jewellers stocked up anticipating a demand recovery during the wedding season that began this month and the auspicious Hindu gold-buying day of Akshaya Tritiya.

Karnataka Bank soars on ICICI’s stake buy

Karnataka Bank shares rose 9 per cent on BSE on Tuesday amidst speculation that ICICI Bank has bought a minor stake in the old generation, south-based private sector lender.
According to the shareholding pattern of Karnataka Bank as on March 31, 2017, ICICI Bank holds 30,72,445 shares or 1.09 per cent stake. ICICI Bank officials, however, clarified that the bank is only the custodian of these shares on behalf of its customers and do not own them.

You may get boarding pass on mobile, Wipro in works

Air-travellers will soon be on the digital road for a hassle-free flight. After doing away with security tags from handbags at some airports, the aviation ministry is considering digital boarding pass.
The ministry has engaged tech giant Wipro to prepare a roadmap for transforming the sector using digital platforms. The move is part of the government’s flagship Digital India initiative.

Digital offline seeks to broaden customer base

Despite fast growth in the e-commerce space, online is still a miniscule portion of the offline retail market.
Therefore ‘digital offline’ or assisted e-commerce is the new model being experimented by online companies to reach out to that substantial lot of customers reluctant to transact online, without burning cash on customer acquisition.
Nandan Nilekani-backed ShopX has already tied up with 45,000 retailers in 230 towns in the south and west of the country. The target is to get 10 lakh retailers on board in three to five years, as it becomes a pan-India operator.

Bigger taxpayer base on cards as govt pushes recovery button

Windfall gains are expected from multiple strikes at tax evaders, as the Centre goes full throttle in the recovery mode.
Starting this year, the taxpayer base is set to increase with measures like curbing cash transaction of more than Rs 2 lakh, digital push and compulsory linking of Aadhaar for filing tax returns.