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 nation debates a controversial couple of agriculture reform bills splitting the political class. If Wall Street can collapse as did in 2008 and bounce back, there is no reason why India’s public sector banks cannot deserve another chance. Private sector banks do not have the capital, risk appetite or social concern to do it on a large scale, although emerging entities such as the small-business focused Bandhan Bank are trying to.

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History of this topic

Two small-cap PSU banks set for a leap?
1 week, 6 days ago

Two small-cap PSU banks set for a leap?

Live Mint  

The Indian stock market has seen remarkable movements in recent years, with public sector undertaking banks emerging as a standout sector. Within this space, small-cap PSU banks like UCO Bank and Central Bank of India are showing significant potential and positioning themselves as future leaders. This scenario would likely benefit smaller PSU banks like UCO Bank and Central Bank of …

Will Conflict of Interest Allegations Against SEBI Chairperson Madhabi Buch Impact Indian Public Sector Banks?
4 months, 1 week ago

Will Conflict of Interest Allegations Against SEBI Chairperson Madhabi Buch Impact Indian Public Sector Banks?

The Hindu  

Published : Aug 15, 2024 11:57 IST - 5 MINS READ The integrity of India’s financial markets has been called into question following allegations of conflict of interest against Madhabi Buch, the current chairperson of the Securities and Exchange Board of India. Notably, the regulatory oversight of SEBI has a deep influence on public sector banks in India, especially those …

Congress: Any move to reduce govt stake in 12 public sector banks will be resisted
5 months ago

Congress: Any move to reduce govt stake in 12 public sector banks will be resisted

The Hindu  

The Congress on July 19 said any move to bring down the Union government's stake in 12 public sector banks to less than 51 per cent would continue to be resisted forcefully both in Parliament and outside. Over the past seven years, there have been mergers in the public sector banking industry, Mr. Ramesh pointed out "United Bank of India …

FinMin revises letter, scotches PSU bank merger speculation
1 year ago

FinMin revises letter, scotches PSU bank merger speculation

Live Mint  

The Union finance ministry has rectified the agenda of a parliamentary committee meeting scheduled for early next year, putting an end to speculation of a potential merger of public sector banks—UCO Bank with Union Bank of India, and Bank of India with Bank of Maharashtra. In a letter addressed to, among others, the bank chiefs of the four PSU banks …

Budget 2024: Why experts are bullish on PSU bank stocks after assembly polls?
1 year ago

Budget 2024: Why experts are bullish on PSU bank stocks after assembly polls?

Live Mint  

Budget 2024: Cheering BJP's victory in state assembly elections, Indian stock market extended bull trend for yet another session on Monday. Stock market experts maintained that focus of the union government on profitability of PSU companies and state-owned banks is expected to remain in focus and teh incumbent government may walk some extra mile in upcoming union budget. Budget 2024 …

ECONOMIC PERSPECTIVES | Neoliberal dilemma: Public sector banks turn a profit but privatisation not on cards for now
1 year, 6 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, 6 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, 8 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, 10 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 …

PSU banks to pass up bonds to focus on lending: Experts
2 years ago

PSU banks to pass up bonds to focus on lending: Experts

Live Mint  

Indian state-run banks that sold government bonds in the last few sessions may not immediately turn buyers, as their focus shifts to cutting down investment under the Statutory Liquidity Ratio to fund credit growth, analysts said. State-run banks sold bonds worth more than ₹30,400 crore, on a net basis, in the 25 trading sessions through Dec. 6, data from the …

Unfinished agenda: Long-standing debate on privatisation of state-run banks resurfaces
2 years, 3 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 …

The real crisis in PSUs: Leadership
3 years, 3 months ago

The real crisis in PSUs: Leadership

Hindustan Times  

The public-versus-private sector debate has dominated the national discourse. An analysis of vacant Board positions as on March 31, shows that in 24 Maharatnas and Navratnas, there are a total number of 149 board-level vacancies, comprising 11 positions of executive directors, 135 positions of independent directors, and three positions of nominee directors. In sum, at last count, 60 positions of …

Five steps to fix PSB divestment
3 years, 4 months ago

Five steps to fix PSB divestment

Live Mint  

A parliamentary panel report observed recently that stress in India’s banking sector is transient and a transfer of public sector bank stressed assets to a bad bank will lead them to normalcy, and therefore argued against PSB divestment. Given the complexities involved, it has wisely chosen to focus first on IDBI Bank’s stake divestment to test the waters, which helps …

Bank Privatisation: Central Bank of India, Indian Overseas Bank May Be Privatized This Fiscal
3 years, 6 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. …

‘PSU banks’ bad-loan additions may moderate’
3 years, 9 months ago

‘PSU banks’ bad-loan additions may moderate’

The Hindu  

Indian state-owned lenders are expected to see additions to bad loans moderate, but structural issues at the banks could cap returns on their stocks, Morgan Stanley said on Thursday. “Over the past few years, state-owned enterprise banks have seen significant capital infusion by the government, lower risk-weighted assets’ density, higher provisioning and some large recoveries,” the brokerage said in a …

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 …

India Can’t Wait for the ‘PSU Culture’ to Die a Slow Death. It’s Time for Unsparing Reforms
3 years, 10 months ago

India Can’t Wait for the ‘PSU Culture’ to Die a Slow Death. It’s Time for Unsparing Reforms

News 18  

India has almost left COVID-19 behind. It is time for path-breaking administrative reforms, and pump-priming entrepreneurship, innovation and production processes in the Indian economy through liberal financing, cutting the red-tape, delays and regulatory corruption. And, to drastically reform the ageing public sector entities through an overhaul of ownerships, managements and processes, dis-investments, partnerships, turn-key operations, or throwing open their management …

Engaging With RBI on Privatisation of Govt-Run Banks in Big Way, Can't Have Laggards: Nirmala Sitharaman
3 years, 10 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 …

Budget 2021: Two PSU Banks, One Insurance Firm to be Privatised, Here's What You Need to Know
3 years, 10 months ago

Budget 2021: Two PSU Banks, One Insurance Firm to be Privatised, Here's What You Need to Know

News 18  

Finance Minister Nirmala Sitharaman in her Union Budget 2021 speech on February 1 announced that two public sector banks and one general insurance company will be privatised as she revealed the government’s intent to focus more on disinvestment going forward. The privatisation of two public sector banks and one general insurance company comes as part of the consolidation in the …

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address
3 years, 10 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, 10 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, 10 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 …

‘Dangerous’: Chidambaram on RBI Proposal on Corporates in Banking
4 years ago

‘Dangerous’: Chidambaram on RBI Proposal on Corporates in Banking

The Quint  

He also added that “it is no secret which politically connected business houses will get the first licences and increase their monopolistic power” if the proposal is administered. Speaking for the importance of neutrality of banks, which is maintained even in developed economies, Chidambaram said “It is shocking that such an idea should have been presented to the people as …

The battle to save banks
4 years, 3 months ago

The battle to save banks

India Today  

The battle for saving banks has been a long drawn one. Speaking at the seventh SBI Banking and Economics Conclave in July, RBI governor Shaktikanta Das said: “The economic impact of the pandemic due to the lockdown and the anticipated post-lockdown compression in economic growth may result in higher NPAs and capital erosion of banks. A recapitalisation plan for PSBs …

Rajan, Viral call for a major overhaul of banking system
4 years, 3 months ago

Rajan, Viral call for a major overhaul of banking system

Live Mint  

Former Reserve Bank of India governor Raghuram Rajan and former deputy governor Viral Acharya have called for winding down of the department of financial services, privatization of state-owned banks and creation of a bad bank as part of the reforms for India’s banking industry. The current status quo is untenable and there is a need for reforming the banking industry …

'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 …

India's Public Sector Banks Will Need Rs 2.1 Trillion Over Next 2 Yrs to Plug Covid-19 Damages: Moody's
4 years, 4 months ago

India's Public Sector Banks Will Need Rs 2.1 Trillion Over Next 2 Yrs to Plug Covid-19 Damages: Moody's

News 18  

Public sector banks will need external capital of up to Rs 2.1 trillion over the next two years and the most likely source to plug this shortfall will be government support, Moody's Investors Service said on Friday. According to Moody's, the sharp slowdown in India's economic growth, exacerbated by the virus outbreak, will hurt the asset quality of public sector …

Need to Divest Stakes in Public Sector Banks in Graceful Manner, Says RBI Ex-Deputy Governor Viral Acharya
4 years, 4 months ago

Need to Divest Stakes in Public Sector Banks in Graceful Manner, Says RBI Ex-Deputy Governor Viral Acharya

News 18  

Former RBI Deputy Governor Viral V Acharya on Friday cautioned against fire sale of state-owned lenders, saying that disinvestment should be undertaken in a graceful manner at the right price and also made a case for privatisation of some healthy public sector banks. Divestment beyond majority stake is the first step because it will help relax the fiscal constraint in …

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