PSB recapitalisation: Why Narendra Modi govt must look at outright privatisation of state-run banks rather than experimenting with taxpayers' money
5 years, 6 months ago

PSB recapitalisation: Why Narendra Modi govt must look at outright privatisation of state-run banks rather than experimenting with taxpayers' money

Firstpost  

There are reports indicating that the Union Government is contemplating recapitalising the public sector banks with a capital of Rs 30,000 crores. Thus, to a layman, this situation should give rise to the question as to why then is the government continuously infusing taxpayers hard-earned money into the banking system. The government controls more than two-thirds of the banking assets in India, but the government-run banks account for more than 90 percent of the total NPAs. In the aviation sector, the loss-making state-run airline—Air India had the most number of customer complaints, ran late than all big private players and was also running into huge losses. However, the question that begs an answer is: given the advantages of private banking, why doesn’t the government go that path right away?

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History of this topic

'Can’t let big biz into banking yet,' says banker Kundapur Vaman Kamath
3 weeks, 5 days ago

'Can’t let big biz into banking yet,' says banker Kundapur Vaman Kamath

New Indian Express  

MUMBAI: Kundapur Vaman Kamath, the veteran banker who led the rapid growth of ICICI Bank and helmed it for nearly two decades from its inception and make the largest private sector lender within few years, has spoken against allowing corporate houses into banking space, saying the regulator has to be satisfied that they will not misuse public deposits through the …

Net Zero By 2070: Why India Must Focus On Transition Finance, Decoupling Emissions From Growth
10 months, 3 weeks ago

Net Zero By 2070: Why India Must Focus On Transition Finance, Decoupling Emissions From Growth

ABP News  

Backed by a vibrant private sector, innovative technologies, and an enabling policy environment, India has made great strides in its transition towards a low-carbon economy. All this would require innovative financing and capital towards scaling up energy efficiency, renewable energy capacity, upgradations of grid network, assistance for enhanced energy access to last mile end user communities, and a just transition …

ECONOMIC PERSPECTIVES | Neoliberal dilemma: Public sector banks turn a profit but privatisation not on cards for now
1 year, 7 months ago

ECONOMIC PERSPECTIVES | Neoliberal dilemma: Public sector banks turn a profit but privatisation not on cards for now

The Hindu  

Published : Jun 02, 2023 15:59 IST - 6 MINS READ The government’s economic spokespersons have been celebrating an ostensibly remarkable recovery in the country’s public banking sector. To ensure the solvency of and capital adequacy in banks, the government had to infuse Rs.3,10,997 crore into the public banking system from 2016-17 to 2020-21. Ever since the release of the …

Privatisation Of Banks To Go Forward As Per Schedule: Finance Minister Nirmala Sitharaman
1 year, 7 months ago

Privatisation Of Banks To Go Forward As Per Schedule: Finance Minister Nirmala Sitharaman

ABP News  

Union Finance Minister Nirmala Sitharaman on Monday said the privatisation of public sector banks will go ahead as planned. The minister, while addressing the media on the occasion of the Narendra Modi government completing nine years in power, in Mumbai said, "About the bank privatisation, they will go on as per schedule. "Other than IDBI Bank, we propose to take …

Inside Bank of Baroda’s silent transformation
1 year, 9 months ago

Inside Bank of Baroda’s silent transformation

Live Mint  

In the last week of September 2021, Mukund Rajan, the former chief ethics officer at the Tata Group, showed a bunch of Bank of Baroda executives a video clip from the 26/11 terror attacks in Mumbai. Led by Sanjiv Chadha, the bank’s current managing director and chief executive officer, the lender is on a mission to reinvent itself by adding …

ECONOMIC PERSPECTIVES | Is a reversal of bank nationalisation on the cards?
1 year, 11 months ago

ECONOMIC PERSPECTIVES | Is a reversal of bank nationalisation on the cards?

The Hindu  

Published : Jan 26, 2023 10:25 IST The semi-annual Financial Stability Report from the Reserve Bank of India signals that the country’s banking system, especially the public banking system, has put behind it the stress from disturbingly high non-performing or bad loans on its books. The asset quality review resulted in an increase in the volume of recorded gross NPAs …

IDBI Bank sell-off can set the stage for selling public-sector banks
1 year, 11 months ago

IDBI Bank sell-off can set the stage for selling public-sector banks

Live Mint  

Tuhin Kanta Pandey, secretary of the department of investment and public asset management, while speaking to Business Standard, recently said that the Indian government intended to exit IDBI Bank completely, as it was not in the business of commercial banking. The stock market doesn’t give a valuation to government-owned or public sector banks that’s close to what it gives large …

Unfinished agenda: Long-standing debate on privatisation of state-run banks resurfaces
2 years, 4 months ago

Unfinished agenda: Long-standing debate on privatisation of state-run banks resurfaces

The Hindu  

Published : Sep 08, 2022 11:00 IST The long-standing debate on whether India’s public sector banks should be privatised has resurfaced in recent days. Referring to a core theme in the article by Gupta and Panagariya, the RBI researchers argued that while on pure profitability grounds private banks in India appear more efficient than public ones, public banks turn out …

RBI Issues Clarification On PSB Privatisation Report, Says Bulletin Article Doesn't Represent Its View
2 years, 4 months ago

RBI Issues Clarification On PSB Privatisation Report, Says Bulletin Article Doesn't Represent Its View

ABP News  

The Reserve Bank of India on Friday clarified issued a clarification saying that the views expressed in its recent article, ‘Privatisation of Public Sector Banks: An Alternate Perspective’, do not represent the views of the central bank and are of the authors. The article appeared in the monthly bulletin arguing against a big bang approach to public sector banks privatisation. …

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good
2 years, 4 months ago

RBI Bulletin: Big bang Approach To PSB Privatisation May Do More Harm Than Good

ABP News  

A big bang approach to privatisation of state-run banks may do more harm than good, according to the latest Reserve Bank of India bulletin released on Thursday. The RBI’s paper showed some of the major reasons that public sector banks can serve the country better than private banks include better financial inclusion, better credit system, and better efficiency of the …

Fact Check: No, the Centre is NOT privatising all public sector banks except SBI!
2 years, 4 months ago

Fact Check: No, the Centre is NOT privatising all public sector banks except SBI!

India Today  

Ever since Finance Minister Nirmala Sitharaman proposed to take up the privatisation of two public sector banks in her Budget speech for the fiscal year 2021-22, the issue has been widely debated. AFWA PROBE While investigating the claim, we found a report by The Times of India from July 12, according to which, a policy paper of the Indian Policy …

Bank Privatisation: Central Bank of India, Indian Overseas Bank May Be Privatized This Fiscal
3 years, 7 months ago

Bank Privatisation: Central Bank of India, Indian Overseas Bank May Be Privatized This Fiscal

News 18  

The Centre could privatise the two-state run banks — Central Bank of India and Indian Overseas Bank soon, according to report by Times of India. NITI Ayog, the government think-tank has recently submitted a report to the core group of secretaries on Disinvestment mentioning the names of the two banks the would be privatised this fiscal, news agency PTI mentioned. …

Govt to amend two Acts to enable privatisation of PSU banks
3 years, 10 months ago

Govt to amend two Acts to enable privatisation of PSU banks

India TV News  

To facilitate privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year. The ongoing Budget session is scheduled to take up as many as 38 Bills including the Finance Bill 2021, Supplementary Demands for Grants for 2020-21 and related Appropriation Bill, National Bank for Financing Infrastructure and Development Bill, 2021, and Cryptocurrency …

Engaging With RBI on Privatisation of Govt-Run Banks in Big Way, Can't Have Laggards: Nirmala Sitharaman
3 years, 11 months ago

Engaging With RBI on Privatisation of Govt-Run Banks in Big Way, Can't Have Laggards: Nirmala Sitharaman

News 18  

Finance minister Nirmala Sitharaman on Monday told the News18 Network that the government had engaged with the Reserve Bank of India in a “big way” as she outlined a timeline for meeting divestment targets set in her Budget 2021 speech. Speaking to News18 Network’s Editor-in-Chief Rahul Joshi, the finance minister said that the country needs efficient banks for the economy …

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address
3 years, 11 months ago

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address

News 18  

With the Union Budget due to be presented on Monday, stakeholders in the banking sector expect the Centre to go beyond recapitalisation of bonds to infuse capital in public sector banks. The RBI’s stress test recently revealed that bank NPAs could jump from 7.5 per cent in September last year to 13.5 per cent by September this year. The gross …

Economic Survey 2021: Under-Capitalisation of Banks Will Hamper Economic Growth in Long Run
3 years, 11 months ago

Economic Survey 2021: Under-Capitalisation of Banks Will Hamper Economic Growth in Long Run

News 18  

The Economic Survey 2021, released on January 29 ahead of the Union Budget 2021, has called for adequate capitalisation of public sector banks flagging fears of lenders resorting to risk-shifting, which will, in turn, impact the economy which has just begun its upward rise months after the crippling impact of the Covid-19 pandemic. Public sector banks account for 60 per …

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address
3 years, 11 months ago

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address

News 18  

With the Union Budget less than a week away, stakeholders in the banking sector expect the Centre to go beyond recapitalisation of bonds to infuse capital in public sector banks. The RBI’s stress test recently revealed that bank NPAs could jump from 7.5 per cent in September last year to 13.5 per cent by September this year. The gross non-performing …

Rajan, Acharya may be off mark: PSU banks need strategy and focus to survive, not privatisation as remedy
4 years, 3 months ago

Rajan, Acharya may be off mark: PSU banks need strategy and focus to survive, not privatisation as remedy

Firstpost  

The PSU banks’ problem is often linked to India’s burgeoning fiscal deficit that needs control because pumping taxpayer money into state-run banks is fraught with risks. It is interesting that two of India’s biggest brand-name economists, former Reserve Bank governor Raghuram Rajan and former deputy governor Viral Acharya, have spoken for the “re-privatisation” of public sector banks even as the …

'Privatise Select PSU Banks, Dilute Role of DFS': Raghuram Rajan Calls for Reforms
4 years, 3 months ago

'Privatise Select PSU Banks, Dilute Role of DFS': Raghuram Rajan Calls for Reforms

News 18  

Former RBI Governor Raghuram Rajan on Monday suggested the government to privatise select public sector banks, set up a bad bank to deal with NPAs and dilute the role of Department of Financial Services. “Winding down Department of Financial Services in the Ministry of Finance is essential, both as an affirmative signal of the intent to grant bank boards and …

Yes Bank crisis: Best practices needed as benchmark to govern banks; govt should consult with veteran bankers for solutions
4 years, 10 months ago

Yes Bank crisis: Best practices needed as benchmark to govern banks; govt should consult with veteran bankers for solutions

Firstpost  

Recent days have seen RBI governor Shaktikanta Das pulling up public sector banks for poor credit growth even as Kapoor’s Yes Bank shenanigans were simmering in the backdrop. The current crisis in Yes Bank makes for great headlines, with a high-profile founder lending huge amounts to tainted and/or serial borrowers, allegations of political corruption and a general state of injustice …

Budget 2020: Banking sector is feeling the heat of economic slowdown; can Nirmala Sitharaman clear the mess?
4 years, 11 months ago

Budget 2020: Banking sector is feeling the heat of economic slowdown; can Nirmala Sitharaman clear the mess?

Firstpost  

If one analyses the third-quarter earnings of Indian banks reported numbers so far, two clear trends are visible. But, banks lending less to companies is a clear bad news to India’s struggling economy because when credit growth slows to companies, that impacts progress of projects, cash flows and employment generation and so on. In this context, Union Finance Minister Nirmala …

Financial system stable despite weakening economic growth; reviving consumption, investment a major challenge: RBI
5 years ago

Financial system stable despite weakening economic growth; reviving consumption, investment a major challenge: RBI

Firstpost  

The PSBs need to build stronger buffers to absorb any disproportionate operational losses, while private lenders need to focus on corporate governance, the RBI said. Mumbai: India’s financial system remains stable even after economic growth plummeted to a six-year low, the Reserve Bank of India said on Friday. “Reviving the twin engines of consumption and investment while being vigilant about …

Should the government exit navratna companies?
5 years ago

Should the government exit navratna companies?

The Hindu  

Last month, the Cabinet approved sale of the government’s stake in Bharat Petroleum Corporation Limited, a navratna public sector company with oil refining and marketing operations. For the first time, we are looking at a profitable public sector undertaking like BPCL being put up for sale in an import-dependent sector like petroleum. The fact that they’re not talking of something …

Former RBI governor C Rangarajan says banks recapitalisation should be done through cash
5 years, 1 month ago

Former RBI governor C Rangarajan says banks recapitalisation should be done through cash

Firstpost  

Former RBI governor C Rangarajan on Friday suggested that recapitalisation of banks should be done through by infusing cash rather than issuing Bonds, as he cautioned that Boards of public sector undertakings, including banks, should maintain “arms length” from the Government Hyderabad: Former RBI governor C Rangarajan on Friday suggested that recapitalisation of banks should be done through by infusing …

Why Ridham Desai of Morgan Stanley likes banking stocks
5 years, 1 month ago

Why Ridham Desai of Morgan Stanley likes banking stocks

Live Mint  

India’s banking sector may witness a turnaround, after recent rule changes put banks in a better position to get their money back from insolvent companies, according to Ridham Desai, managing director at Morgan Stanley India Co. A Supreme Court ruling last week not only paved the way for ArcelorMittal’s purchase of Essar Steel India Ltd., an Indian steel mill, but …

Niti Aayog VC pitches for governance reforms in banking sector
5 years, 3 months ago

Niti Aayog VC pitches for governance reforms in banking sector

India TV News  

Niti Aayog Vice Chairman Rajiv Kumar on Friday called for further reforms in banking sector after the recent recapitalisation and mergers, saying banks need autonomy and work at arm's length from the government. Speaking here at the India Economic Summit, Kumar also said the government must consider tapping capital markets and raise long- term funds for creating long-term assets through …

Banks merger reflects govt resolve to address economic slowdown: India Inc
5 years, 4 months ago

Banks merger reflects govt resolve to address economic slowdown: India Inc

India TV News  

The government's move to consolidate public sector banks indicates its resolve to address the slowdown in GDP growth, as the country's economy expanded at its weakest pace in over six years in the April-June quarter of 2019-20, the industry said on Friday. A sharp deceleration in manufacturing output and subdued farm sector activity pulled down India's gross domestic product growth …

Govt, Reserve Bank of India must work closely to boost sagging growth engine, ensure systemic stability: Shaktikanta Das
5 years, 6 months ago

Govt, Reserve Bank of India must work closely to boost sagging growth engine, ensure systemic stability: Shaktikanta Das

Firstpost  

Das said there has been an improvement in the performance of the state-run lenders due to recapitalisation Mumbai: Governor Shaktikanta Das June 27 called for more cooperation between the government and the Reserve Bank to help boost the sagging growth engine and to ensure systemic stability. “Overall, the situation warrants greater cooperation internationally as well as monetary and fiscal coordination …

Read an excerpt from 'What the Economy Needs Now': Raghuram Rajan's thoughts on banking reforms
5 years, 8 months ago

Read an excerpt from 'What the Economy Needs Now': Raghuram Rajan's thoughts on banking reforms

Firstpost  

What the Economy Needs Now is a collection of essays by Indian economists, each tackling an issue facing the country, and providing suggestions for economic growth. Improving governance and management at public sector banks • Public sector bank boards are still not adequately professionalised, and the government rather than a more independent body still decides board appointments — with the …

Govt keen on amalgamation of PSBs to create globally competitive, healthy large banks: Arun Jaitley
5 years, 10 months ago

Govt keen on amalgamation of PSBs to create globally competitive, healthy large banks: Arun Jaitley

Firstpost  

Jaitley said the NPA situation of PSU banks has improved in the last 2-3 quarters and the NDA government has ended the practice of “phone banking” New Delhi: The government is following the policy of amalgamating public sector banks to create healthy large banks which are globally competitive, finance minister Arun Jaitley said Thursday. He said the NPA situation of …

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