Current affairs for competitive exams

🍒   Govt panel may ready new list of public sector banks for privatisation : The government may set up a panel to draw up a fresh list of public sector banks that can be privatised, people aware of deliberations said. The Centre wants to revisit its bank privatisation strategy after state-owned lenders turned profitable and several rounds of consolidation have reduced their number. In April 2021, Niti Aayog recommended the privatisation of two state-run banks to the disinvestment department. The Central Bank of India and the Indian Overseas Bank were reportedly shortlisted, but no final decision was taken. "A new committee may be set up to identify lenders for privatisation, which include mid- and small-sized banks, and determine the quantum of the stake sale based on their performance, including their bad loan portfolio among other parameters," a government official said. - economic times

🍒   Bank of Baroda posts highest quarterly net profit at ₹4,775 crore : Bank of Baroda reported its highest quarterly net profit in the fourth quarter at ₹4,775 crore on the back of robust growth in net interest income and sharp decline in loan loss provisions. The public sector bank’s net profit in the reporting quarter soared 168 per cent year-on-year (y-o-y) from ₹1,779 crore in the year ago period.The Bank’s board recommended a dividend of ₹5.50 per equity share of face value ₹2. Net interest income was up 34 per cent y-o-y to ₹11,525 crore (₹8,612 crore).Loan loss provisions sharply declined by 94 per cent to ₹320 crore (₹5,200 crore). - Business Line

🍒   Bank of Baroda made provision of Rs 500 cr against GoFirst exposure : Indian state-owned lender Bank of Baroda's MD & CEO on Tuesday said that a provisioning of Rs 500 cr was made by the bank against its exposure towards cash-strapped airline Go First. The low-cost carrier was granted bankruptcy protection by a company court on Wednesday, which also halted the repossession of planes by lessors. The Go First bankruptcy filing lists Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd and Deutsche Bank among its financial creditors, which are owed Rs 6,521 crore ($797.38 million) in total. Private lender Axis Bank in a regulatory filing has clarified that it has no funded or non-funded exposure to the financially-troubled Go Airlines. As per reports, the airline has a total liability and dues to banks, other creditors, vendors etc. - of about Rs 11,463 crore. - economic times

🍒   Banks request RBI for more time for new loan provisioning system : Banks have requested the RBI for one more year's time to implement the system of Expected Credit Loss (ECL) for provisioning of loans. At present, banks set aside money after an asset turns bad, and once the new system is put in place, it is widely expected to have an one-time impact on banks' profits. "We have requested the regulator to allow us little more time to prepare ourselves for this," industry lobby grouping IBA's chief executive Sunil Mehta told reporters on the sidelines of a Fintech event in Mumbai on Tuesday. Answering a specific question on the time sought, Mehta said, "we have requested them (RBI) for one more year" - Economic Times

🍒   Payments banks approach RBI to rehaul regulations  : With the payments bank model not having evolved in the expected manner, industry participants have approached the Reserve Bank of India to relook at the regulations.Industry participants point out that unlike the other categories of banking channels such as small finance banks and universal banks which have seen significant changes to their respective licensing guidelines from the time that they were brought into force, the payments banks space has not had much progress in terms of their operational framework. “Since the time these banks were conceptualised, licensed and became operational, much has changed in the payments industry. But the laws governing payments banks have almost remained the same,” said a senior executive of a payments bank who didn’t want to be named. - Business Line

🍒   PSBs engage more biz correspondents : Large public sector banks are aggressively increasing their reach in semi-urban and rural areas through business correspondents (BCs). Punjab National Bank has almost doubled its BC outlet network from 12,831 in December 2021 to 22,607 in December 2022. Similarly, Bank of Baroda (BoB) has increased its BCs from 29,000 to around 52,000 in just one year. Canara Bank, which had 8,906 outlets in March 2022, has grown its network to almost 14,000 outlets. CS Setty, managing director (MD) at State Bank of India, which has the largest network of outlets in the country with over 65,000 BC partners, said the bank is trying to provide technology tools to BC outlets to increase their scope of business. The Reserve Bank of India allows BC outlets to offer up to 22 services, but most banks do not utilise the opportunity.- financial express

🍒   PSU banks raising stakes in interest rate derivatives to diversify risk management : The Reserve Bank of India has often exhorted banks to utilise the domestic derivatives infrastructure to mitigate risk from their government bond positions. The largest bondholders in the banking pack are taking heed. The establishment of a derivatives trading platform by the Clearing Corporation of India (CCIL) in 2015 has played a large role in bringing hitherto reluctant public sector banks into the trading fold for derivatives. A broad push towards defter management of interest rate risk too contributed. - Economic Times

🍒   Paytm elevates Bhavesh Gupta as president and COO : Paytm has elevated Bhavesh Gupta, a key executive in its lending division, as the company's President and Chief Operating Officer (COO) to strengthen its lending operations amid intensifying competition in the digital lending space. - Moneycontrol

🍒   SPML Infra lenders start Rs 2,000-crore debt sale based on anchor bid from NARCL : Lenders led by State Bank of India (SBI) have initiated sale of debt of over Rs 2,000 crore of smart-city Infra provider SPML Infrastructure, setting the reserve price at Rs 405 crore based on an anchor bid, two sources said. The anchor bid equates to a recovery of 20% for the lenders. The anchor bid is submitted by the government backed National Asset Reconstruction Company Limited (NARCL), one of the sources said. - economic times

🍒   Banks play safe on lending to airlines after Go Air bump : Indian airlines may find it harder to take loans as banks have become cautious to lend to the sector after Jet Airways and now Go First filed for bankruptcy within a period of five years. Lenders are asking for increased collateral or promoters to pledge more personal holdings to access loans for lending to airlines, airline executives told ET. Credit worthiness of the sector was improving after Tata Group increased its presence in the sector acquiring Air India and with strong performance from IndiGo, but it has become highly negative after the bankruptcy filing by Go First, they said. - economic times

🍒   Bank borrowing via CDs surges 50% in a year :  Borrowing by banks has risen 50% in the past year as they struggle to keep pace with increasing demand for loans amid rising cost of deposits. The outstanding value of certificates of deposits (CD) is at ₹3 lakh crore now, up from ₹2 lakh a year ago. Credit growth has outpaced deposits two-to-one for most banks. So, a part of the funding gap has been met via CDs."A wide gap in credit and deposit growth, lower liquidity and strong credit demand have been driving higher issuance of CDs," said Sanjay Agarwal, Senior director, CARE Ratings. "Banks are keeping their CD issuance elevated to meet short-term requirements amid lower liquidity and focusing on shoring up the deposits to meet robust credit demand." - economic times

🍒   70% MSMEs believe UPI will be the driver of retail sales : Seventy per cent of MSMEs believe more than half of their retail sales will be via UPI, was the key revelation of the NeoInsights study titled ‘Decoding Digital Payments: A Retailer Perspective’, released today by NeoGrowth, an MSME-focused digital lender in India. The study was based on a comprehensive assessment of NeoGrowth's customer data set of nearly 3000 retailers along with a survey of about 1000 retailers across the nation. The study covered the digital payments adoption behaviour of Indian retailers across over 25 cities and more than 70 industry segments. - economic times

🍒   Banks seek more time from RBI to meet ECL provisioning norms : Banks have sought another year from the Reserve Bank of India (RBI) to meet norms on Expected Credit Loss (ECL) provisioning requirements, said Sunil Mehta, Chief Executive of Indian Banks’ Association. “We have requested the regulator to allow us little more time to prepare ourselves for this,” said Mehta on the sidelines of an event.“We have requested them [RBI] for one more year. The banking system is gearing up for the worst-case scenario,” he said, adding that few banks have already developed their systems and have data on which they can design their ECL-based risk models. “Hope the system adopts it quickly.” - Business Line

🍒   Star Union Dai-ichi eyeing more bank tie-ups to bolster bancassurance channel : Star Union Dai-ichi Life Insurance is looking to tie-up with more banks to strengthen its bancassurance distribution channel, while at the same time increasing productivity of distribution through its promoter banks — Union Bank of India and Bank of India. “Most insurers have found that the bancassurance channel offers the best productivity and cost-to-income ratios. Through bancassurance, you can target captive and untapped customer segments that you would not have been able to otherwise,” MD and CEO Abhay Tewari said. - Business Line

🍒   RBI imposes monetary penalty on Manipur Rural Bank for rule violations : The Reserve Bank of India (RBI) on May 16 said it has imposed monetary penalty of Rs 10,000 on Manipur Rural Bank for rule violations. The penalty has been imposed as bank failed to classify certain loan accounts as non performing in accordance with the IRAC norms.Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions, the RBI said. - Business Line

🍒   NCLAT closes Insolvency proceedings against Marvel Realtors & Developers : The National Company Law Appellate Tribunal (NCLAT) has closed the Corporate Insolvency Resolution Process (CIRP) against Marvel Realtors & Developers Ltd after taking on record settlement with its financial creditor. A two-member bench of NCLAT headed by Chairperson Ashok Bhushan said that the realtor has submitted a settlement letter dated 08th May 2023 with its financial creditor IDFC First Bank."We take the settlement letter dated 8th May 2023 on record, close the CIRP against the Corporate Debtor setting aside the Order dated December 23, 2022," said NCLAT order. - Moneyconrol.

🍒   Sensex, Nifty pare opening gains; quote lower in volatile trade : In a volatile trade, BSE Sensex declined 146.79 points to 62,198.92 even after beginning the trade on a firm note. The NSE Nifty dipped 32.15 points to 18,366.70. Among the Sensex firms, HDFC, HDFC Bank, Maruti, IndusInd Bank, Larsen & Toubro, Mahindra & Mahindra, Bharti Airtel, and ITC were the biggest laggards. Bajaj Finance, Infosys, Bajaj Finserv, Wipro, Asian Paints, and Tata Consultancy Services were among the major gainers. - Business Line

🍒   Rupee rises 11 paise to 82.20 against US dollar in early trade : The rupee gained 11 paise to 82.20 against the US dollar in early trade on Tuesday supported by sustained foreign fund inflows. Forex traders said a weak trend in domestic equities and strength of the American currency in the overseas market weighed on investor sentiments. At the interbank foreign exchange, the domestic unit opened at 82.22 against the dollar and then rose to 82.20, registering a gain of 11 paise over its previous close. - Business Line