UPI Challenges and Direction in Fund Management with Special Reference Banking Sector

After demonetization, there was a massive requirement for currency notes, but the government was unable to provide the required quantity of currency notes, and also Indian government wanted to promote cashless transactions. UPI is built over Immediate Payment Service (IMPS) for transferring funds using Virtual Payment Address (a unique ID provided by the bank). Unified Payments Interface is a payment system launched by (NPCI), which is National Payments Corporation of India, and is regulated by the (RBI) Reserve Bank of India, which provides the facility of instant fund transfer between two bank accounts online through payment apps. Digital transactions by UPI have been made very easy. The UPI service is available 24X7, and it is not like RTGS and NEFT, which do not work on holidays and non-banking hours. This will bring tremendous efficiency to the system and help India become a cashless economy. Keywords: Digital illiteracy, Online payments, cashless economy UPI, Mobile phone, digital payment mode

YES Bank Fiasco: Arrogance or Negligence

The present case study is based on the nation’s biggest-ever banking failure of India’s fastest-growing private bank, YES Bank. The YES Bank fiasco showcases the prevalent flaws of uprising NPAs and mounting bad debts in the financial sector. Post Asset Quality Review (AQR) conducted by RBI elucidate that the NPA of YES Bank is seven times higher than the actual reported amount in their audit book. The sudden trauma reflected the events unfolding in the bank as the share market plummets drastically and the losses enlarged exponentially. To stymie further deterioration, the Reserve Bank of India (RBI) stepped in and took over YES Bank management. The economy is already set to decelerate to an 11-year low following demonetization and the outbreak threatens to delay a revival in an emerging economy like India. The subject that this case will fit in is Capital Structure, Corporate Governance and Ethics and Auditing.

Financial Performance Analysis of NBFC-MFIs in India using TOPSIS and IV-TOPSIS

The policymakers around the globe have been emphasizing on financial inclusion in line with sustainable development goals 2030 of the United Nations. Developing countries are still behind in ensuring greater financial inclusion especially for women. While banks are the apex financial institutions in any country, microfinance institutions proved to be promising in advancing financial inclusion because of its better reach to women in remote areas. Thus in a country like India, the outreach and sustainability of microfinance institutions is of utmost importance. This paper aims to rank the performance of microfinance institutions listed by Reserve Bank of India on the basis of their outreach, sustainability, quality and efficiency. The ranking is done separately for five years (2014-15 to 2018-19) using Technique for Order of Preference (TOPSIS) method while overall ranking and benchmarking for five years has been done using interval valued TOPSIS (IV-TOPSIS) method. The robustness of the study has been checked through sensitivity analysis. The overall results portray Satin Creditcare Network Limited as the best performing NBFC-MFI while BWDA Finance Limited as the worst performer for the combined period of 5 years

The Devil’s Laugh at Corporate Governance: The Case of Punjab and Maharashtra Co-operative Bank (PMC Bank) India

The trust of depositors in the Indian banking system was shaken in September 2019 when the five-page confession letter written by Joy K Thomas, Managing Director and Chief Executive Officer of Punjab and Maharashtra Co-operative Bank (PMC Bank), one of the ten largest co-operative banks in India revealed gross financial irregularities, collusion and fraud in banking operations of PMC Bank from 2008 onwards. The Reserve Bank of India (RBI) came into swift action and placed curbs on routine banking activities and restricted the withdrawal of money to a limited amount. Succumbing to the shock, depositors protested at several places and even, eleven depositors lost their lives. With a huge exposure of 73% of the overall loan portfolio to a single borrower, Housing and Development Infrastructure Ltd (HDIL) & group companies, that too facing insolvency proceedings, the recovery of full money was almost impossible. The malice at PMC Bank is the classic case of crony capitalism, collusion and fraud, and failure of corporate governance. The case draws important lessons for reforming co-operative banking sector and strengthening banking supervision in the country.

India’s cryptocurrency boom faces policy uncertainty

Significance Investments in cryptocurrencies in India grew from about USD923mn in April 2020 to nearly USD6.6bn in May 2021, according to industry estimates. More than 15 million Indians are reportedly buying and selling cryptocurrencies, placing the country closer in this regard to the United States, which has 23 million digital currency traders, and ahead of the United Kingdom with 2.3 million. Impacts The government is committed to having a digital currency issued by the Reserve Bank of India. Curbing money laundering and illicit activities will become harder as crypto trading proliferates. Cryptocurrencies will draw investors, especially younger ones, away from traditional safe assets such as gold.

An Examination of India-South Korea Bilateral Investment Relations

Foreign investment has accelerated at an incredible rate over the last quarter-century, and alterations in the flow of this investment are increasingly changing the global economic environment. International investors provide new markets not only new capital, technology, competitive spirit, and ideas, but also additional jobs. For India's economic development, foreign direct investment (FDI) has been a substantial non-debt financial resource and a key growth engine. South Korea's economy is one of Asia's most promising and lively. The country's stability, quick growth rates, strong manufacturing base, export focus, and availability of superior technology make it an appealing investment destination. India's permitted cumulative investments in South Korea from April 1996 to December 2019 was US$ 593.9 million, according to data from the Ministry of Finance, Government of India (GOI), and the Reserve Bank of India (RBI). According to the FDI Markets database, India was the 15th largest investor in South Korea between 2009 and 2019, with 14 Indian businesses investing US$ 913 million in 17 FDI projects, resulting in the creation of 5,519 jobs. As a result, the current study examines India-South Korea's bilateral investment ties and looks ahead to possible areas of cooperation in the future between the two countries' investment relations.

Public Sector Banks in India : Growth of NPAs and Restructuring Aspects

The recent restructuring of Public Sector Banks (PSBs) has generated immense interest in the economic world and the various stakeholders which include investors, depositors, borrowers, the staff working in these banks and the top management of the merging entities. Whereas the depositors look for safety of their monies, the borrowers of merging entities look for new loan products at cheaper rates and faster delivery. The investors will look for resumption of dividend payouts at higher rates and capital appreciation of their investments and the staff looks for better working conditions. The top management will expect more freedom to operate and manage their respective banks more efficiently to grow and earn higher profits. The merger of strong banks was recommended by the first Narasimham Committee in 1991. It has taken almost 28 long years for the Government of India to act on this very critical suggestion of the committee. It is widely believed that this belated step has been initiated due to huge pile of Non Performing Assets (NPAs) with Public Sector Banks and the resultant need for their frequent recapitalization. It is a moral hazard and bad economics for any government to regularly recapitalise PSBs being the major stake holder and having total administrative control of their boards and the top management. To enable PSBs meet the regulatory capital as per international norms and the provisioning requirements enforced by Reserve Bank of India, use of tax payer’s money (collected for economic development of the country) is questionable. However it is made clear by the government that the merger is intended to make PSBs bigger and internationally competitive and to build up their capacity to access capital markets for raising resources. A perspective of growth of NPAs and the resultant impact on the financial deterioration of PSBs over a time horizon can give answers to the need for restructuring of Public Sector Banks as repeat of such actions by the government may again be necessitated in future. The improvement in financial performance parameters of PSBs over next few years will answer if act of restructuring by the Government of India results in internationally strong ‘too big to fail banks’ .

Evaluation of the Inflation Forecasting Process of the Reserve Bank of India: A Text Analysis Approach

This study attempts to evaluate the monetary policy of the Reserve Bank of India (RBI) based on an investigation of the policy statements. The analysis based on text mining of the central bank’s monetary policy statements seeks to unravel the information considered by the central bank and the processes followed in making its inflation forecasts. The findings indicate that although the RBI examined high-frequency economic indicators, its inflation forecasts have generally been off the mark. Specifically, the monetary policy committee failed to foresee the sharp disinflation that followed the demonetization announced on November 8, 2016. This failure resulted in a high real interest rate regime that dealt a blow to the economy staggering under the effects of demonetization. Our research findings show that the monetary policy governance practices need to be refined and better aligned to economic realities, particularly under the RBI’s new monetary policy framework.

A Study of Non Performing Advances and It’s Management With Special Reference to Punjab National Bank

Banking industry plays an important role in the development of an economy. Banks have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). NPAs put negative impact on the profitability, capital adequacy ratio and credibility of banks. It is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. As per the prudential norms suggested by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis. In other words, such interests can be booked only when it has been actually received. Therefore, this has become what is called as a ‘critical performance area’ of the banking sector as the level of NPAs affects the profitability of a bank. This paper touches upon the meaning and consequently the definition of a non-Performing asset, the conceptual framework of non-performing assets, classification of loan assets and provisions. The study also evaluates the adverse effect of non-performing assets on the return on total assets of Punjab National Bank Limited for the period 2013 to 2015, 2016-17, and 2019-20. Particularly discussing some remedial measures taken up by the Bank to overcome this situation of NPA.