RBI may not accept NBFCs’ requests for bad-loan exemptions
2 years, 3 months ago

RBI may not accept NBFCs’ requests for bad-loan exemptions

Live Mint  

India's central bank is unlikely to give "shadow banks" exemptions from stricter bad-loan rules coming into force, sources told Reuters, essentially ending an advantage the non-bank financial firms have had over standard banks. Non-banking financial companies have asked the Reserve Bank of India to exempt smaller loans from the rules taking effect next month that are in line with those covering banks. Shadow banks wanted loans of up to 20 million rupees to be exempt, according to a document reviewed by Reuters, and also asked for some accounting requirements to be relaxed and for an extension to comply with the new rules. Arguing that their smaller average loan size puts them at a disadvantage to banks, the shadow banks in July sought this permission, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest act, for loans over 100,000 rupees, compared with the current 2 million rupees, according to a document seen by Reuters.

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History of this topic

India: Gross NPAs of PSBs at ₹3.16L Cr, Govt Reports
2 weeks ago

India: Gross NPAs of PSBs at ₹3.16L Cr, Govt Reports

Deccan Chronicle  

New Delhi: The gross non-performing assets of public sector banks stood at Rs 3.16 lakh crore as of September 30, which is 3.09 per cent of the outstanding loans, while gross NPAs as percentage of outstanding loan is 1.86 per cent in private sector banks, the government said on Tuesday. Informing to the Parliament, minister of state for finance Pankaj …

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks
1 month, 1 week ago

Rising Defaults Among Retail Borrowers are Stressing India’s Top Banks

The Quint  

Given that India’s economic growth relies heavily on domestic consumption, any slowdown in lending could ripple through the broader economy, impacting sectors dependent on consumer spending. Moreover, as banks shift their focus from retail to secured loans to mitigate risks, small and medium enterprises could face reduced access to capital, hindering job creation and slowing down economic expansion. In October, …

India assessing need for more measures to slow unsecured lending, cenbank chief says
6 months, 2 weeks ago

India assessing need for more measures to slow unsecured lending, cenbank chief says

Hindustan Times  

MUMBAI - India's central bank is assessing whether further measures would be needed to slow down the growth in banks' lending towards unsecured loans and non-banking finance companies, Governor Shaktikanta Das said on Friday. India assessing need for more measures to slow unsecured lending, cenbank chief says The Reserve Bank of India, has warned lenders against "all forms of exuberance" …

RBI deputy governor urges banks to be prudent on lending to NBFCs
11 months, 3 weeks ago

RBI deputy governor urges banks to be prudent on lending to NBFCs

Live Mint  

Mumbai: Banks need to reconsider whether they want to be part of lending consortiums to non-bank financiers that have scores of other lenders – up to 40 at times – to improve their monitoring of borrowers' use of sanctioned loans, RBI deputy governor Swaminathan J said. The deputy RBI governor was responding to a question from SBI managing director Ashwini …

Here's why NBFCs will have to look beyond banks for funds
11 months, 3 weeks ago

Here's why NBFCs will have to look beyond banks for funds

Live Mint  

Mumbai: Non-bank lenders that borrow heavily from commercial banks to lend further may need to diversify their funding sources in the year ahead, given the rising competition for bank credit, and higher risk weights on loans to these lenders, experts said. “The idea is to improve funding access to productive sectors, but the regulations can lead to customers paying more …

RBI tightens norms for personal loans and credit cards, raises capital requirements
1 year, 1 month ago

RBI tightens norms for personal loans and credit cards, raises capital requirements

Live Mint  

The Reserve Bank of India on Thursday tightened norms for personal loans and credit cards in the form of higher capital requirements. The new norms will make personal loans and credit cards costlier and may curb growth in these categories. The central bank has raised the risk weights for lenders and non-bank financial companies, or the capital that banks need …

NBFCs relying more on bank loans: RBI
1 year, 3 months ago

NBFCs relying more on bank loans: RBI

Live Mint  

Mumbai: Domestic non-banking financial companies, especially those in the upper-layer category, are increasingly relying on bank borrowings as their primary source of funding, according to an analysis in Reserve Bank of India ’s September bulletin. “During the assessment period, NBFCs’ reliance on banks increased steadily due to low interest environment and lag monetary policy transmission," the article said. Direct bank …

RBI Likely To Tighten Norms For Unsecured Lending Portfolios Of Banks: Report
1 year, 6 months ago

RBI Likely To Tighten Norms For Unsecured Lending Portfolios Of Banks: Report

ABP News  

The Reserve Bank of India is looking to tighten scrutiny on the unsecured lending portfolios of banks amid the growing risk of potential defaults, citing banking sources news agency Reuters said. We can expect the RBI to increase risk weights on unsecured personal loans and credit cards and, or, float a discussion paper on how to monitor the space more …

Upcoming provision rules cast shadow over Canara Bank outlook
1 year, 7 months ago

Upcoming provision rules cast shadow over Canara Bank outlook

Live Mint  

New Delhi: Canara Bank Ltd investors are nervous. In the earnings call, the bank’s management said it has assessed about ₹42,000 crore ECL provisioning over five years, which comes to around ₹8,000-8,500 crore a year. “The announcement from Canara Bank management that it would have to make 4-5% of loan-loss provisions to comply with the ECL transition has come at …

Banks are in turmoil but a bigger financial crisis may be brewing elsewhere
1 year, 8 months ago

Banks are in turmoil but a bigger financial crisis may be brewing elsewhere

CNN  

London CNN — The International Monetary Fund warned this week of “vulnerabilities” among so-called non-bank financial institutions, saying global financial stability could hinge on their resilience. “Shadow banks cannot access emergency central bank funding in times of stress and we don’t expect governments to use taxpayers’ funds to recapitalize a failed shadow bank,” the firm said. “This means that public …

RBI lifts loan costs to tame inflation
1 year, 10 months ago

RBI lifts loan costs to tame inflation

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India on Wednesday raised the benchmark lending rate by 25 basis points to 6.5% as the RBI targets persistently high core or underlying inflation that it sees as a risk to the improving outlook for the economy. Observing that the rate increases since May were still working their way through the …

Has India tided over the problem of bad loans?
1 year, 11 months ago

Has India tided over the problem of bad loans?

The Hindu  

The story so far: In December 2022, Finance Minister Nirmala Sitharaman told Parliament that banks had written off bad loans worth ₹10,09,511 crore during the last five financial years. In 2009, the RBI brought out norms that set out categories of NPAs and what banks must do as these bad loans aged. Bad loans are a problem, for, with time, …

Indian Banks GNPAs Down To 5% In September 2022, Macroeconomic Conditions Can Impact Banks Health RBI Report
1 year, 11 months ago

Indian Banks GNPAs Down To 5% In September 2022, Macroeconomic Conditions Can Impact Banks Health RBI Report

ABP News  

Gross Non-Performing Assets of Indian banks declined to 5 per cent in september but the present macroeconomic environment can impact lenders' health, said a new Reserve Bank of India report. The report said, “from its peak in 2017-18, the GNPA ratio of SCBs has been declining sequentially to reach 5 per cent at end-September 2022.” It said that the number …

Bad loans: Why, this time, it’s different
2 years, 9 months ago

Bad loans: Why, this time, it’s different

Hindustan Times  

Non-performing assets or bad loans of banks have come down to their lowest levels, Reserve Bank of India governor Shaktikanta Das said at a Confederation of Indian Industry event on March 21. When seen in the context of gross NPA share falling to 6.9% of all loans, according to RBI’s Financial Stability Report released in December 2021 — the latest …

RBI limits tenure of bank CEOs, MDs to 15 years, rule to be effective from October 1
3 years, 7 months ago

RBI limits tenure of bank CEOs, MDs to 15 years, rule to be effective from October 1

India Today  

The Reserve Bank of India said on Monday chief executive officers and managing directors at Indian private-sector banks will be eligible to hold these posts for up to 15 years, as it unveiled a series of rules on term limits. RBI'S NEW RULE The central bank also said on Monday that a CEO, MD or whole-time director who is a …

Data | Why did bad loans in banks reduce despite COVID-19 and economic downturn?
3 years, 11 months ago

Data | Why did bad loans in banks reduce despite COVID-19 and economic downturn?

The Hindu  

The ratio of Gross Non-Performing Assets in Indian banks decreased in FY20 and FY21 despite the impact of COVID-19 and the economic downturn that preceded it. This was mostly due to three factors: 1) Banks wroteoff relatively more NPAs in FY20 to clean their balance sheets; 2) Some large NPA accounts got resolved through debt-recovery channels; and 3) It is …

Policy roll-back may dent banks’ health, says RBI
3 years, 11 months ago

Policy roll-back may dent banks’ health, says RBI

The Hindu  

In 2020-21, as policy support is rolled back, the impact of the COVID-19 pandemic may dent the health of the banks and non-banks, the Reserve Bank of India said in its Report on Trend and Progress of Banking in India 2019-20. This is a statutory publication in compliance with Section 36 of the Banking Regulation Act, 1949 and this Report …

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P
4 years, 1 month ago

Non-performing loans in Indian banking sector to rise in next 12-18 months: S&P

The Hindu  

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11% of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is “masking” problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the proportion of …

Non-performing Loans in Indian Banking Sector to Rise in Next 12-18 Months: S&P
4 years, 1 month ago

Non-performing Loans in Indian Banking Sector to Rise in Next 12-18 Months: S&P

News 18  

Non-performing loans in the Indian banking sector is likely to witness an uptick and may shoot up to 11 per cent of gross loans in the next 12-18 months, S&P Global Ratings said on Tuesday. It said forbearance is ”masking” problem assets for Indian banks arising from COVID-19 and the financial institutions will likely have trouble maintaining momentum after the …

NBFCs have an edge in banking licence race
4 years, 1 month ago

NBFCs have an edge in banking licence race

Live Mint  

Large non-bank lenders stand to gain the most from the Reserve Bank of India panel’s proposal to allow large companies and shadow lenders into banking services, experts said. More importantly, it would allow RBI to increase regulatory oversight over some of the large shadow lenders, particularly after the collapse of Infrastructure Leasing & Financial Services Ltd and Dewan Housing Finance …

Bank Lending to NBFCs Jumps 190 Basis Points to 8.8% Since Sept 2018
4 years, 4 months ago

Bank Lending to NBFCs Jumps 190 Basis Points to 8.8% Since Sept 2018

News 18  

Amid continuing calls for more bank loans to non-banking lenders, the latest data showed that banks have already been lending more to them increasing their overall exposure to NBFCs by 190 basis points to 8.8 per cent between September 2018 and June 2020, according to a report by CARE Rating. In absolute terms, banks' outstanding to NBFCs saw a huge …

Fitch Ratings Revises India’s Outlook to ‘Negative’ From ‘Stable’
4 years, 6 months ago

Fitch Ratings Revises India’s Outlook to ‘Negative’ From ‘Stable’

The Quint  

Fitch Ratings noted that India’s fiscal metrics have deteriorated significantly, notwithstanding the government's expenditure restraint, due to the impact of the severe growth slowdown on revenue. This is significantly higher than the median of 42.2% of GDP for the 'BBB' category in 2019, to which FY20 corresponds, and 52.6% for 2020.” A statement from the rating agency said that liquidity …

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