Indian corporations are unlikely to set up banks

2020 ◽  
Keyword(s):  
Public Sector ◽  
Central Bank ◽  
Banking System ◽  
Capital Adequacy ◽  
Content Type ◽  
Public Sector Banks ◽  
The Government ◽  
Set Up ◽  
Bad Debt

Significance The government and central bank are looking for ways to strengthen the country’s banking system, which is beset by low capital adequacy ratios (CARs) and rising non-performing assets (NPAs). India’s leading conglomerates are asset rich, and their profitability is growing. Impacts The RBI will come under pressure to increase regulation of private as well as public sector banks. Many state-owned banks will merge in a bid to reduce their bad debt. Small NBFCs will face a challenge to sustain liquidity.

scholarly journals Monetary policy collision on the performance of banking sector in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Belavadi Nikhil ◽  
Shivakumar Deene
Keyword(s):  
Monetary Policy ◽  
Public Sector ◽  
Central Bank ◽  
Interest Rates ◽  
Banking Sector ◽  
Banking System ◽  
Economic Situation ◽  
Content Type ◽  
Public Sector Banks ◽  
The Impact

Purpose The study aims to identify the impact of monetary policy tools on the performance of banks in India, and this could be an excellent suggestion to the regulators in framing the favourable interest rates which would meet the macroeconomic objectives of the Indian economy. Design/methodology/approach The design adopted in this study is descriptive and analytical research. Correlation and regression analysis is used to determine the relationship between bank rate (BR) and the performance of public sector banks in India. The sample chosen for this study is the public sector banks actively performing in India. Findings The performance is measured by taking three factors, and they are deposits, loans and advances (L&A) and total asset value of the banks. All three factors have shown an impact of BR on them during the five years. L&A affected the least amongst the three factors, but the other two were significantly impacted by the change in BR by the Reserve Bank of India. So, there should be a favourable fluctuation in the BR which will bring flexibility in the banking system, and they can perform well in the economy and the central bank also can concentrate on the macro-economic situation in the country. Originality/value This paper helps in giving suggestions to the Central bank, researchers, financial institutions to look into the financial performance and monetary policy rates and the central bank also can concentrate on the macro-economic situation in the country.

Rising bad debt risks insolvency at Indian banks

2016 ◽  
Keyword(s):  
Public Sector ◽  
Fiscal Deficit ◽  
Content Type ◽  
Public Sector Banks ◽  
The World ◽  
Growing Economy ◽  
The Government ◽  
Indian Banks ◽  
Bank Bailouts ◽  
Bad Debt

Subject India's public sector banks and bad debt. Significance While India is being lauded for being the fastest-growing economy in the world, the government is grappling with a growing bad debt problem that threatens the solvency of at least some of its public sector banks. Impacts If the government prioritises its fiscal deficit targets, financing bank bailouts would be difficult. Meanwhile, banks will cut lending, thereby choking growth. Absent a clear policy, the banking strain could intensify, leading to the actual failure of some banks.

Bangladesh risks growth by not confronting bad debt

2019 ◽  
Keyword(s):  
Central Bank ◽  
Banking Sector ◽  
Banking System ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Potential Growth ◽  
Content Type ◽  
High Court ◽  
The Government ◽  
Bad Debt

Subject Bad debt in Bangladesh's banking sector. Significance The High Court last month stayed until June 23 a circular issued by the Bangladesh Bank, the central bank, that appeared to benefit borrowers who had defaulted on loans from the country's banking system. Meanwhile, Bangladesh registered 7.9% GDP growth in the fiscal year ending June 2018. Impacts The government will dismiss worries about a potential growth slowdown, pointing to forecast GDP growth of 8.1% in 2018/19. The Bangladesh Bank's circular would hurt banks already burdened with losses because of provisioning against bad debt. Banks may try to reduce their exposure to single borrowers.

Analysis of Financial Performance of Public Sector Banks in India: CAMEL

2020 ◽  
pp. 097674792096686
Author(s):  
Yudhvir Singh ◽  
Ram Milan
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Positive Impact ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Factors Affecting ◽  
Public Sector Banks ◽  
The Government ◽  
And Performance ◽  
Asset Quality

Public sector banks have been merged by the government in the last few years. This is the rationale behind conducting this study. The purpose of this article is to determine the factors affecting the performance of public sector banks in India and the interrelationship between bank-specific determinants and performance of public sector banks. In this article, we shall analyse the financial data of all the public sector commercial banks for a period spread across 11 years (2009–2019); Capital adequacy, Assets quality, Management efficiency, Earning, and Liquidity (CAMEL) has been used as a performance determinant; system generalised method of moments (GMM) analysis has been used to find the effect of determinants on the performance measurement of public sector banks; and CCA (canonical correlation analysis) has been used to find the interrelationship between the bank-specific determinants and the performance of public sector banks. The finding has important implications in terms of performance in the banking sector. Certain limitations of this study are: It is based on secondary data. The study only covers the financial aspects and not the non-financial aspects. It is found that the asset quality is negatively related with performance of public sector banks. Liquidity and inflation are inversely related to performance of public sector banks in India. Capital adequacy is positively related with banks’ performance, but inversely related with banks’ interest margin. GDP growth has a significant positive impact on banks’ performance, but inversely related with banks’ interest income. Inflation rate is inversely related with banks’ performance. Banking sector reforms are insignificantly related with banks’ performance.

India’s 5G auction will boost Reliance’s digital plans

2021 ◽  
Keyword(s):  
Public Sector ◽  
Business Strategy ◽  
Financial Support ◽  
Content Type ◽  
Public Sector Banks ◽  
Spectrum Auction ◽  
Floor Price ◽  
The Government

Significance This came after the government announced plans for a 4G spectrum auction in March 2021, after a five-year gap. There is growing speculation that this will be followed by an auction of 5G spectrum later in the year. Impacts Reliance’s lead on 5G will boost its broader digital business strategy. New financial support to indebted telcos will help to avoid further strain on public sector banks. Data tariffs are likely to remain competitive in India, even after a new floor price.

scholarly journals Bad Loans of Public Sector Banks in India: A Panel Data Study

2019 ◽  
Vol 5 (1) ◽  
pp. 22-30
Author(s):  
Kandela Ramesh
Keyword(s):  
Public Sector ◽  
Panel Data ◽  
Financial Stability ◽  
Random Effect ◽  
Random Effect Model ◽  
Negative Relationship ◽  
Banking System ◽  
Capital Adequacy ◽  
Public Sector Banks ◽  
Bad Loans

The soundness of the banking system is necessary for economic advancement and financial stability. In the contemporary era, the Indian banking system has suffered from the accumulation of substantial non-performing assets (NPAs), especially in the public sector banks (PSBs). This article examines the financial determinants of bad loans in the Indian PSBs with the help of panel data regression analysis. Panel dataset of 21 Indian PSBs for eight years from 2010 to 2017 is used for the study. For analysis, net non-performing assets (NNPAs) as a dependent variable and financial indicators as independent variable are used. Using the random effect model, it is found that credit–deposit ratio, loan maturity, and return on assets have a negative relationship with NNPAs. These factors have an association with a lower level of NPAs. Operating expenses and capital adequacy ratio have an insignificant effect on NNPAs. On the other hand, factors such as priority sector loans, collateral values, and non-interest income have a positive impact on NNPAs. These factors are an indication of a higher level of bad loans and are adding to the accumulation of NPAs in PSBs.

Prospects for India in 2018

2017 ◽  
Keyword(s):  
Public Sector ◽  
Prime Minister ◽  
Content Type ◽  
Public Sector Banks ◽  
Bharatiya Janata Party ◽  
Economic Slowdown ◽  
The Government

Subject Prospects for India in 2018. Significance India’s ruling Bharatiya Janata Party (BJP) has responded to the recent economic slowdown by drawing up plans to recapitalise public sector banks (PSBs) and invest in infrastructure. Prime Minister Narendra Modi is also under pressure to create jobs. The government will be expected to deliver on its promises with elections due in around 18 months’ time.

India’s remedy for bad debt may not bring relief

2017 ◽  
Keyword(s):  
Prime Minister ◽  
Banking System ◽  
Job Creation ◽  
Bank Credit ◽  
Content Type ◽  
Reserve Bank ◽  
Bankruptcy Code ◽  
The Government ◽  
Bad Debt ◽  
Reserve Bank Of India

Subject Implementation of India's new Insolvency and Bankruptcy Code. Significance Shrinking bank credit is hindering India’s ability to finance spending. The Reserve Bank of India (RBI) is relying on the recently instituted Insolvency and Bankruptcy Code (IBC) as the principal instrument to address the problem of stressed assets in the banking system. Impacts The government may accelerate plans to merge stronger and weaker PSBs. Indian corporates may increase their issue of bonds denominated in domestic currency. Prime Minister Narendra Modi will emphasise job creation rather than investment until the next election.

Action at a distance

2018 ◽  
Vol 26 (1) ◽  
pp. 39-61
Author(s):  
Athula Ekanayake
Keyword(s):  
Corporate Governance ◽  
Public Sector ◽  
Long Distance ◽  
Content Type ◽  
Public Sector Banks ◽  
Good Corporate Governance ◽  
Distance Control ◽  
Action At A Distance ◽  
The Government ◽  
Case Organization

Purpose By using Latour’s notion of “action at a distance” (Latour, 1987), the purpose of this paper is to examine the ways in which the government acts at a distance to achieve corporate governance of public sector banks, and the extent to which accounting enables such actions of the government. Design/methodology/approach This study follows the qualitative research approach and adopts the case study research method. A major public sector bank in Sri Lanka was selected as the case organization for this study. Data were gathered from semi-structured interviews with organizational participants and document study. Findings The study provides evidence to suggest that inscriptions produced through four areas of accounting, namely external reporting, external auditing, management accounting and internal auditing, have the capacity to develop strong explanations enabling action at a distance and good corporate governance in the case organization. The study also provides evidence to show how the role of accounting in long-distance control and corporate governance in the case organization is influenced by various contextual factors. In particular, the study finds that undue government interference over the case organization to gain the long-distance control have resulted in deteriorating the level of corporate governance. Research limitations/implications The findings support the literature that examines the accounting in its social context. Practical implications The findings suggest that actors should be allowed to operate independently, particularly without political expedience and undue influences from pressure groups, which ensure effective utilization of accounting inscriptions by the actors in long-distance control as well as good corporate governance of public sector banks. Originality/value Although research into accounting in public sector organizations has gained considerable importance in recent times, those studies examining public sector banks are still lacking. The paper aims to fill this gap.

scholarly journals A Study on Management of Non Performing Assets in Priority Sector reference to Indian Bank and Public Sector Banks (PSBs)

2016 ◽  
Vol 2 (1) ◽  
pp. 31
Author(s):  
Selvarajan BSR
Keyword(s):  
Public Sector ◽  
Tamil Nadu ◽  
Banking Industry ◽  
Action Plan ◽  
The Other ◽  
Public Sector Banks ◽  
The Government ◽  
Indian Banks ◽  
Bad Debt ◽  
New Strategies

<p>The problem of NPA is not limited to only Indian public sector banks, but it prevails in the entire banking industry.  Major portion of bad debts in Indian Banks arose out of lending to the priority sector at the dictates of politicians and bureaucrats.  If only banks had monitored their loans effectively, the bad debt problem could have been contained if not eliminated. The present study has been designed to illustrate the necessity and the nature of the non-performing assets in Indian Bank, Tamil Nadu. Finding out Non Performing Assets –NPA- under the Priority sector lending in Indian Bank and Compare with Public Sector Banks and making appropriate suggestions to avoid future NPAs and to manage existing NPAs in Indian Bank are the other major objectives of this study. The scope of this study covers on the basis: (i)  measuring for the banks to avoid future NPAs &amp; to reduce existing NPAs, (ii) guiding for the government in creating &amp; implementing new strategies to control NPAs, (iii) selecting appropriate techniques suited to manage the NPAs and develop a time bound action plan to arrest the growth of NPAs.</p>

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