Latest Developments in Banking Sector

News on NPAs in Banks:

Highlights of speech of Reserve Bank Governor Dr. Raghuram Rajan in Mumbai on 11^th February, 2016

•        Not excessively worried about global bank crisis
•        Potential stress coming from oil sector
•        Have strengthened fraud detection mechanism
•        All bad loans not because of malfeasance
•        Need to clean Bank Balance Sheets for virtuous cycle
•        Growth won't emerge until clean-up is `properly done'
•        Market turmoil reinforces belief that clean-up is important
•        Profitability of some banks may be impaired in short run
•        RBI doesn't see any liquidity stress amid bank clean up
•        Govt. explicit cash commitment enough for banks' needs
•        RBI projects any breach of capital requirement be small
•        There are `wild claims' on size of stressed asset problem
•        Indian Govt. fully involved, supportive of bank clean up
•        Underlying stressed loans is a viable economic asset
•        Indian banks' clean up goals are moving targets
•        Working to ensure all banks on same page on provisioning
•        Don't envisage series of Indian bank asset quality reviews
•        End game is clear to everyone, and is bounded
•        Number of bank loans in India can be regularized
•        Intend to clean balance sheets of all banks in India by March 2017
•        Banks trying to regularize loans that can be put on track
•        Trying to create functioning Resolution Process for India
•        Banks' NPA identification is good accounting
•        Think of NPA classification as anaesthesia for surgery
•        To discuss with banks about clean-up process and liquidity needs
•        Some banks’ results in India haven't been good

----------------------------------------------------------------------------

Comparison with Peer Public Sector Banks (Results Declared till 10th February 2016)

Earned Net Profits

1) State Bank of Bikaner & Jaipur     -           Rs. 206 Crores

2) State Bank of Travancore             -           Rs. 91.47 Crores

3) Bank of Maharashtra                    -           Rs. 89.06 Crore

4) Vijaya Bank                                   -           Rs. 52.61 Crores

5) Punjab National Bank                  -           Rs. 51.01 Crores

6) State Bank of Mysore                    -           Rs. 26.94 Crores

Incurred Net Loss

1) Syndicate Bank                             -           Loss of Rs. 119.67 Crores

2) Allahabad Bank                           -           Loss of Rs. 486.14 Crores

3) Dena Bank                                     -           Loss of Rs. 662.85 Crores

4) Central Bank of India                    -           Loss of Rs. 836.62 Crores

5) Indian Overseas Bank                   -           Loss of Rs. 1425.06 Crores

Contributed By: Mr Trichur VaidyanathanEdited By:Mr Anil Aggarwal