Moody’s ups India’s rating to highest since 1991 reforms

Moody’s ups India’s rating to highest since 1991 economic reforms

Global ratings agency Moody’s revised the country’s sovereign ranking to Baa2 from Baa3 – its first upgrade in almost 14 years — citing implementation of a string of economic reforms, including demonetisation and rollout of the goods and services tax. The new rating, India’s highest since the 1991 reforms, comes as a huge boost for the government.

Moody’sThe action looks beyond the present slowdown in economic growth and a surge in bank bad loans, and bets on India’s medium- and longterm growth potential.

The markets cheered, with the rupee, bonds and equities all reacting positively. Although the rupee and the sensex gained over 1% intraday, both retracted some of their gains toward the close. The move comes close on the heels of the sharp improvement in India’s ranking in the World Bank’s ease of doing business survey.

Moody’s gives govt ammo to battle oppn

The ratings upgrade by Moody’s could position India as an attractive investment destination, apart from making it easier for companies to raise resources abroad. The ratings agency highlighted reforms such as the Goods and Services Tax (GST) and demonetisation, which it said would lead to greater formalisation of the economy. Besides upgrading India’s ratings, Moody’s also revised the outlook from positive to stable, indicating that the next upgrade might take a while coming.

“The government is midway through a wide-ranging programme of economic and institutional reforms. While a number of important reforms remain at the design phase, Moody’s believes that those implemented to date will advance the government’s objective of improving the business climate, enhancing productivity, stimulating foreign and domestic investment, and ultimately fostering strong and sustainable growth,” the agency said.

The ratings action comes days ahead of the crucial Gujarat assembly elections where the opposition Congress has sought to portray GST and demonetisation as triggers for the slowdown. The Moody’s upgrade is expected to provide ammunition to the government to blunt criticisim about its handling of the economy after growth slowed to a three-year low of 5.7% in the June quarter and rollout issues linked to GST triggered a political backlash.

Industry, stock brokers and bankers said the revised rating would accelerate fund flow to the country. “This move will now give India access to cheaper capital funds for investment, helping accelerate growth,” said Shikha Sharma, MD & CEO, Axis Bank. So far India’s cohorts in the rating table were countries like South Africa and Indonesia. With this upgrade, India has moved into the same league as Italy, Spain, Oman and the Philippines.

Moody’s Upgrade Lifts Mood On D-St & Main St

Sensex Rallies Over 400 Pts Intra-Day

The sensex started the session almost at the day’s high, rallied over 400 points (1.2%) to an intraday high at 33,521. But, due to weekend profit-taking, it closed 236 points higher at 33,343. Market players interpreted Moody’s decision as an approval by the ratings major’s for the Narendra Modiled government’s reforms-oriented initiatives, which would put the country back on a strong economic growth path. The day’s rally added about Rs 1.7 lakh crore to investors’ wealth with the BSE’s market capitalisation now just a tad above the Rs 150-lakh-crore mark.

A section of the market believes that the Moody’s action has helped changed the mood on Dalal Street, but its impact would not last long. Jimeet Modi, founder & CEO, Samco Securities said that although Moody’s upgrade has helped a pull-back in the benchmark indices, this would prove to be short-lived as economic fundamentals have not changed. “China’s substantial reduction of rating from Aa3 to A1 did not lead to a fall in the markets. On the contrary, the stock market rose 20% since the downgrade. Therefore, the current upgrade should not be read into too much, it is merely a short-term sentiment booster,” Modi said.

Riding on reforms, govt cracked the code

‘Action Should Have Come A Year Earlier’

Several key serving and former policymakers said the upgrade should have been announced one year ago given the spate of reforms. “They always said they would like the reforms to take deep roots and the reforms are sustainable. From the department of economic affairs (DEA) we had written a letter pointing out what we considered as deficiencies in their rating methodology. They had of course replied,” former economic affairs secretary Shaktikanta Das who had spearheaded the effort told TOI.

“But the fact that reforms are deep rooted and sustainable are also a matter of subjective assessment. Now, subjective assessments can vary but at the same time our point was that subjective assessments are based on objective facts. Therefore, we felt India deserved a credit rating upgrade much earlier. It has to be recognised that without this rating upgrade India was attracting a lot of investments. Now with this upgrade, together with improved ease of doing business, India emerges as a very attractive destination,” said Das.

The 2016-17 economic survey had also questioned the rating methodology of the agencies and used the rating of China and India to point out the flaws. While it was pointing out the gaps, North Block mandarins, such as Das and CEA Arvind Subramanian realized that trying too hard with the agencies may not work and instead it is better to focus on the job at hand. “We do what we do,” Subramanian was overheard telling his colleagues in the finance ministry in the afternoon, in what was probably a take on Raghuram Rajan’s latest book ‘I do what I do’.

Former NITI Aayog vice chairman Arvind Panagariya pointed to flawed methodology that rating agencies pursue. “Of course, our ratings continue to be well below what they ought to be. We have no record of ever defaulting and we are among the fastest growing large economies. But the ratings agencies seem to attach a huge negative weight to our low level of percapital income,” he said.

“Nevertheless, while we must rejoice the rare event, we must also reaffirm our resolve to continue moving ahead with reforms to create the New India that the PM envisages by 2022,” Panagariya said. Economic affairs secretary Subhas Chandra Garg said the upgrade is a credible stamp of approval of deep and comprehensive structural reforms undertaken by the government to put India on a sustainable high growth and institutional development path.

N K Singh, a former civil servant and a member of the now-wound up Planning Commission, echoed the sentiment. “It is a very strong vindication going beyond recognition of the government’s overall economic strategy. This is not the result of a single measure but a constellation of measures which includes continued fiscal consolidation, convergence of fiscal and monetary policies, and continuous fine tuning of GST.”

International borrowings to be cheaper for India Industries

“Usually, rating upgrades are anticipated 30-60 days in advance and the effect of the change lingers on till 30-60 days after the event. However, in the current case, as the change in ratings by Moody’s was completely unanticipated, the decrease in yields might materialise in a short duration,” said HDFC Bank chief economist Abheek Barua.

In its earlier rating of Baa3, India’s peers included South Africa, Hungary, Indonesia, Kazakhstan and Romania. The borrowing costs for these companies ranged between 4.3% and 9.3%. The cohorts under the new rating of Baa2 include Spain, Italy, Philippines and Oman. The borrowing costs for these countries range from 1.5% to 4.9%.

Bank of America president and India country head Kaku Nakhate said, “This ratings upgrade will help India Inc’s future external borrowings becoming cheaper, which in turn will lead to higher investments in manufacturing and infrastructure sector.” Following the ratings upgrade, prices of bonds issued by Indian corporates rose in the international markets.

‘Upgrade shows reforms may boost growth’

Moody’s Investors Service vice-president (sovereign risk group) William Foster explains to TOI the rationale behind the ratings upgrade. Foster also sounds upbeat about India’s prospects, although he says the fiscal deficit could be wider than expected this year. Excerpts:

William Foster

VP (SOVEREIGN RISK GROUP), MOODY’S

What prompted the ratings upgrade?

How do you expect growth to pan out?

Longer term, India’s growth potential is significantly higher than most other Baa-rated sovereigns. The reforms — aimed at improving the business environment, increasing formalisation of the economy or anchoring stable inflation — contribute to further enhancing the economy’s capacity to absorb shocks. We have revised our GDP growth forecast down to take into account the immediate impact of demonetisation and disruptions related to GST. We forecast real GDP growth to moderate to 6.7% in the year ending in March 2018. However, as disruption fades, we expect to see a rebound growth to 7.5% in the next fiscal year.

Will the reforms undertaken by the government be enough to tackle the problem in the banking sector and revive growth?

The recapitalisation of public sector banks announced last month should enable them to move forward with the resolution of NPLs (non-performing loans) through comprehensive write-downs of impaired loans and increase lending gradually. This represents a step forward in addressing a key weakness in India’s credit profile. Over the medium term, if met by rising demand for investment and loans, the measures will help foster more robust growth, in turn supporting fiscal consolidation.

When do you expect private sector investments to pick up?

Private sector investment has been weak, likely hampered by high corporate debt in investment-intensive sectors and ongoing challenges in the business environment and infrastructure gaps. Over time, measures implemented and planned such as GST removing barriers to trade within India, steps aimed at enhancing the business environment, encouraging foreign direct investment, providing greater visibility about future inflation will contribute to higher investment. Most of these measures will take time.

The FM has said that the fiscal glide path may be affected due to the structural changes India has undertaken. Do you think the fiscal deficit target for this year will be missed?

We forecast the general government budget deficit (state and Centre) at 6.5% of GDP this fiscal year, similar to the last two fiscal years. Lower government revenues than planned in the Budget and somewhat higher government spending could lead to a deficit somewhat wider than targeted. However, we think that the government’s commitment to fiscal consolidation remains. Over time, measures aimed at broadening the tax base and improving the efficiency of government spending will contribute to a gradual narrowing of the deficit. Together with robust and sustained nominal GDP growth, this would be conducive to a gradual decline in the government debt burden.

ENDORSES REFORMS

Moody’s upgrade is a hugely welcome endorsement of the govt’s reform policies, and the economy’s enormous potential. Key reforms will surely have large payoffs in the coming years. Economic cycle too is on an upswing

KUMAR M BIRLA | CHAIRMAN, AB GROUP

It’s a welcome development, but we also feel it was long overdue… it’s a recognition of the actions that the govt has undertaken. We also need to keep all these things in perspective

ARVIND SUBRAMANIAN | CEA

r s

Moody’s has noticed the seriousness of the government in carrying out the reforms like GST, which has been pending for 10 years. Some of these reforms are transformational

DEEPAK PAREKH | CHAIRMAN, HDFC

Borrowing costs are expected to come down for corporates. Banks are well poised to contribute to growth of economy. By January, some of the bad debt resolution plans should be in place

RAJNISH KUMAR | CHAIRMAN, SBI

A large part of capital allocation are ratings-led. It leads to lower credit premium for corporates and makes capital cheaper. Some more pension funds will now be able to invest in India

CHANDA KOCHHAR | MD & CEO, ICICI

It highlights the immense potential that India offers. More importantly, it also emboldens the government to stay true to the path of strong and transformational reforms

SUNIL MITTAL | CHAIRMAN, BHARTI ENTERPRISES

We believe private sector capital will still take some time to come back. The central & state governments and PSUs are expected to drive capital expenditure for another 9-12 months

S N SUBRAHMANYAN | CEO & MD, L&T

-Mumbai, 18 November, 2017

Nifty breaches 10,000 mark, Sensex at new high

Nifty breaches 10,000 mark, Sensex at new high on fund inflows 

Creating history, the NSE Nifty today breached the 10,000 level for the first time while the BSE Sensex hit another record high of 32,374.30 in opening trade led by rally in metal, banking, realty and FMCG stocks.
The 50-issue Nifty breached the historic 10,000 level by gaining 44.90 points, or 0.45 per cent, to trade at all-time high of 10,011.30, surpassing its previous intra-day high of 9,982.05 touched yesterday.
Brokers said sentiment was upbeat on sustained capital inflows and widespread buying by retail investors, driven by strong earnings by some more bluechip companies.
Image result for NSE Nifty
The flagship BSE Sensex too climbed 128.43 points, or 0.39 per cent, to trade at new record high of 32,374.30, breaking its previous record high of 32,320.86 reached in yesterday’s trade. The gauge rallied 341.47 points in the previous two sessions.
Besides, expectations of a rate cut by the Reserve Bank at its meeting next month too bolstered trading sentiments as participants indulged in raising their bets, they said.
Top performers during initial trade were Hero MotoCorpt, Bharti Airtel, HDFC Bank, Tata Steel, Power Grid, ICICI Bank, Kotak Bank, NTPC, Bajaj Auto, SBI, M&M, Dr Reddy’s, Adani Ports and ITC Ltd, rising by up to 1.28 per cent.

The 50-issue Nifty breached the historic 10,000 level by gaining 44.90 points, or 0.45 per cent, to trade at all-time high of 10,011.30, surpassing its previous intra-day high of 9,982.05 touched yesterday. Brokers said sentiment was upbeat on sustained capital inflows and widespread buying by retail investors, driven by strong earnings by some more bluechip companies. The flagship BSE Sensex too climbed 128.43 points, or 0.39 per cent, to trade at new record high of 32,374.30, breaking its previous record high of 32,320.86 reached in yesterday’s trade. The gauge rallied 341.47 points in the previous two sessions. Besides, expectations of a rate cut by the Reserve Bank at its meeting next month too bolstered trading sentiments as participants indulged in raising their bets, they said.

Among other Asian markets, Hong Kong’s Hang Seng index was up 0.09 per cent while Japan’s Nikkei shed 0.13 per cent. Shanghai Composite Index down 0.32 per cent.
 -25 July 2017 | PTI | Mumbai

State Bank of India Q4 net profit more than doubles

State Bank of India Q4 net profit more than doubles

The net Interest Income increased by 17.33% from ₹5,401 Cr to ₹18,071 crore during the year under review.

The State Bank of India (SBI) on Friday reported 123% increase in its net profit to ₹2,815 crore for the quarter ended March, driven by healthy growth in net interest income and a lower base.

The net Interest Income increased by 17.33%, from ₹5,401 crore to ₹18,071 crore during the year under review.

However, the non-Interest Income decreased marginally by 2.43%, from ₹10,585 crore in Q4FY16 to ₹10,327 crore in Q4FY17.

State Bank of India“The major contributors [of non- Interest Income] were Profit on Sale of Investments, Fee Income, Forex Income and Recovery in Written-Off Accounts,” the SBI said.

The bank’s Net Interest Margin from domestic operations  declined by 16 basic points year-on-year to 3.11% as on March 17 from 3.27% as on March 16 and increased by 8 basic points sequentially from 3.03% as on December 16.

Its gross non-performing assets (NPA) ratio improved on a sequential basis to 6.90% in end March, compared to 7.23% in December. The ratio was 6.50% in March, 2016.

SBI stocks were trading 2.64% higher in afternoon trade in the Bombay Stock Exchange than its previous close

MUMBAI, MAY 19, 2017

GDP surprise takes market to 6-month high, Sensex soars 241 points

GDP surprise takes market to 6-month high, Sensex soars 241 points

Robust GDP data for the December quarter allayed market fears as the Sensex on Wednesday rallied over 241 points to end at about a six-month high of 28,985 amid firm global cues.

GDP, microstatThe impact was such that even the broader NSE Nifty took back the 8,900-mark.

The Central Statistic Office on Tuesday showed that GDP expanded by 7 per cent in the third quarter, belying all fears of the note ban derailing economic activity. It also retained its first advance growth estimate for the fiscal at 7.1 per cent.

The Sensex took off on a positive note and went past the key 29,000-mark to touch a high of 29,029.17 before settling up by 241.17 points, or 0.84 per cent, at 28,984.49, a level last seen on September 8 last year when it had closed at 29,045.28.

The gauge had lost 149.65 points in the previous two sessions.

The NSE Nifty also moved up 66.20 points, or 0.75 per cent, to 8,945.80 after shuttling between 8,960.80 and 8,898.60.

A monthly PMI survey showed that India’s manufacturing sector grew for the second straight month in February.

Meanwhile, U.S. President Donald Trump, in his address to the Congress, took a more measured tone, saying he is open to immigration reforms.

Moody’s Investors Service said demonetisation will be credit positive for India as it is likely to reduce tax avoidance and corruption, which cheered market players.

“A surprise growth of 7.1 per cent in third quarter GDP data and no negative comments in Trump’s speech have given a renewed buying interest in the market. The impact of cash crunch seems over—estimated. Prima facie, the February auto sales numbers are looking better as discretionary spending is gradually picking up,” said Vinod Nair, Head of Research, Geojit Financial Services.

 Both the key indices have rallied by almost 9 per cent in the past two months, largely on the back of a growth-oriented Budget, better-than-expected earnings from bluechip companies and strong global cues.

The government pegged GDP growth at a higher-than-expected 7.1 per cent for 2016-17 despite the cash blues, with manufacturing and agriculture doing exceptionally well, which in turn made India keep the tag of the world’s fastest growing large economy.

Better Chinese factory readings led to a higher closing in Asia and and a better opening in Europe.

Stocks of automobile companies led by M&M, Hero Motocorp and Bajaj Auto were in limelight and gained up to 3.13 per cent largely on the back of encouraging sales numbers for February.

Other prominent gainers included Tata Steel, Dr. Reddy’s, ITC Ltd, Sun Pharma, HDFC Ltd, Axis Bank, Infosys, SBI, Hindustan Unilever, ICICI Bank, Power Grid and Cipla, rising by up to 3.66 per cent.

Out of the 30-share Sensex pack, 21 ended higher while 9 led by GAIL, NTPC, Tata Motors, Bharti Airtel, RIL, Coal India, Lupin and Wipro ended lower, which limited the gains.

The BSE realty index gained the most by surging 3.46 per cent, followed by metal 1.91 per cent, FMCG 1.30 per cent, bank 0.96 per cent and healthcare 0.87 per cent.

In step with the trend, the small-cap index rose 0.45 per cent and mid-cap 0.13 per cent.

Meanwhile, foreign investors bought shares worth Rs 1,146.23 crore on Tuesday, showed provisional data.

-PTI, MUMBAI, MARCH 01, 2017

Union Cabinet approves five associate banks’ merger with SBI

Union Cabinet approves five associate banks’ merger with SBI

The merger proposal was announced in May 2016 and was scheduled for March 2017.

The Union Cabinet on Wednesday approved the merger of five of State Bank of India subsidiaries — State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore — with the SBI.

Union Cabinet, microstatThe merger proposal was announced in May 2016 and was scheduled for March 2017.

While announcing the decision, Finance Minister Arun Jaitley said that the Cabinet had earlier given its in-principle approval for the merger, and then had sent it to the respective banks for their suggestions. These suggestions have been taken on-board, and the decision has been formally approved by the Cabinet.

 “This will lead to far greater operational efficiency and synergy of operations within these banks,” Mr. Jaitley said. “It will decrease the cost of operations, which will also result in a decrease in the cost of funds.”

“The merger is likely to result in recurring savings, estimated at more than Rs. 1,000 crore in the first year, through a combination of enhanced operational efficiency and reduced cost of funds,” the government said in a statement. “Existing customers of subsidiary banks will benefit from access to SBI’s global network.”

While announcing the decision, Finance Minister Arun Jaitley said that the Cabinet had earlier given its in-principle approval for the merger, and then had sent it to the respective banks for their suggestions. These suggestions have been taken on-board, and the decision has been formally approved by the Cabinet.  “This will lead to far greater operational efficiency and synergy of operations within these banks,” Mr. Jaitley said. “It will decrease the cost of operations, which will also result in a decrease in the cost of funds.”

Mr. Jaitley also said that SBI, following the merger, will not only be a large domestic bank, but will also become a global player as well.

NEW DELHI, FEBRUARY 15, 2017

686 petrol pumps start dispensing cash via debit cards

686 petrol pumps start dispensing cash via debit cards

In a bid to ease the cash crunch after the November 8 demonetisation, close to 700 petrol pumps began dispensing cash against swiping of debit cards, an official statement said here.petrol pumps
“Cash dispensing facility has become operational at 686 retail outlets by 4 p.m today (Friday) by public sector oil companies in association with the State Bank of India (SBI),” a Petroleum Ministry statement said.

 In a bid to ease the cash crunch after the November 8 demonetisation, close to 700 petrol pumps began dispensing cash against swiping of debit cards.

The government on Thursday allowed dispensing of up to Rs 2,000 in cash through debit card swipes at select petrol pumps where card swipe machines of the SBI are already available.
“It has been decided to start this facility at around 2,500 petrol pumps across the country. The oil industry is also in further discussions with the SBI and other banks to extend this facility to over 20,000 petrol pumps gradually,” the statement said.

“Cash dispensing facility has become operational at 686 retail outlets by 4 p.m today (Friday) by public sector oil companies in association with the State Bank of India (SBI),” a Petroleum Ministry statement said. The government on Thursday allowed dispensing of up to Rs 2,000 in cash through debit card swipes at select petrol pumps where card swipe machines of the SBI are already available. “It has been decided to start this facility at around 2,500 petrol pumps across the country. The oil industry is also in further discussions with the SBI and other banks to extend this facility to over 20,000 petrol pumps gradually,” the statement said.

Petrol pumps have been accepting currency notes of Rs 500 and Rs 1,000 denominations and will continue to do so till November 24, it added.
-18 November 2016 | IANS | new delhi

RBI imposes Rs 27-crore penalty on 13 banks

RBI imposes Rs 27-crore penalty on 13 banks

RBI imposes Rs 27-crore penalty on 13 banks

In a major crackdown for FEMA violations and KYC lapses, the RBI has imposed Rs 27-crore penalty on 13 public and private sector banks, including PNB and HDFC Bank, while asking eight others including SBI and ICICI Bank to ensure strict compliance with guidelines.

On the basis of inputs received from a public sector bank, the Reserve Bank had undertaken a scrutiny on advance import remittances in 21 banks in October and November 2015.

In a statement issued today, the RBI said it has imposed monetary penalty on 13 banks for “violation of regulatory directions/instructions/guidelines, among other things, on KYC norms”.

These banks are: Bank of Baroda (Rs 5 crore), Punjab National Bank (Rs 3 crore), Syndicate Bank (Rs 3 crore), UCO Bank (Rs 2 crore), HDFC Bank (Rs 2 crore), Allahabad Bank (Rs 2 crore), Canara Bank (Rs 2 crore), IndusInd Bank (Rs 2crore), SBBJ (Rs 2 crore), Bank of India (Rs 1 crore), Corporation Bank (Rs 1 crore), RBL Bank (Rs 1 crore) and SBM (Rs 1 crore).

The RBI further said that eight other banks — Axis Bank, Federal Bank, ICICI Bank, Kotak Mahindra Bank, OBC, Standard Chartered Bank, SBI and Union Bank of India — have been “advised to put in place appropriate measures and review them from time to time to ensure strict compliance with KYC requirements and FEMA provisions on an ongoing basis”.

“In respect of eight other banks…Based on written and oral submissions, it was decided to advise them to put in place appropriate measures and review the same from time to time to ensure strict adherence to KYC/AML requirements as well as FEMA provisions on an ongoing basis,” the RBI said.

It, however, added that “this action” is based on deficiencies in regulatory compliance and “is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank and its customers”.

The scrutiny in the 21 banks examined the alleged irregularities in opening and monitoring of accounts including violations under FEMA provisions. e of KYC and FEMA norms.

The RBI also looked into the effectiveness of systems and processes for implementation of KYC norms/AML standards.

The findings, the apex bank said, revealed weaknesses in the internal control systems, management oversight and violation of certain regulatory guidelines.

The weakness was revealed in non-adherence to KYC requirements like customer identification and risk categorisation, instructions on monitoring of transactions in customer accounts and the guidelines issued under the FEMA provisions.

Based on the findings, the Reserve Bank had issued a show-cause notice to 21 banks.

The central bank came to the conclusion that “some of the violations of serious nature were substantiated” and warranted imposition of monetary penalty on 13 banks, as the failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions.

-July 27, 2016, Mumbai

 

Bank employees to go on strike tomorrow

Bank employees to go on strike tomorrow, services to hit

Bank employees to go on strike tomorrow, services to hit

Normal banking operations may take a hit as public sector bank employees will go on strike Friday to protest against the proposed merger of associate banks with SBI and banking reforms announced by the government.

The United Forum of Banks Unions (UFBU), an umbrella organisation of nine bank employees and officers unions representing 8 lakh staffers, will go ahead with the strike, potentially affecting services like cheque clearances, cash deposit and withdrawal at branches and other facilities.

Most banks, including SBI, informed customers that banking services would be hit on July 29 due to the strike at all banks on “issue and demand to stop banking sector reforms”.

“The All India State Bank Officers’ Federation and the All India State Bank of India Staff Federation are members of UFBU. Thus, it is likely that the bank will also be impacted to some extent by the said strike calls,” SBI said in a statement.

According to All India Bank Employees Association (AIBEA) General Secretary C H Venkatachalam, the conciliation meeting with the Chief Labour Commissioner on July 26 did not yield any positive results though UFBU is willing to reconsider the strike call if the government considers their demand and addresses it.

“The unions were ready for meaningful discussion, but the government only tried to justify their present policy decision on banking reforms and hence, there was no meeting point,” he explained, trying to justify the proposed action.

Ashwani Rana, Vice-President of the National Organisation of Bank Workers, another affiliate of UFBU, said the strike call stands for Friday, but banks will work as usual on Saturday.

Unions, which are protesting against FDI in the banking sector, are pressing for various demands, which include one not to privatise public sector banks and increase private capital in such banks, Rana said.

The unions are also opposed to the move to privatise regional rural banks and co-operative banks, and consolidate and merge banks, among others, he added.

-July 28, 2016, New Delhi

 

Ahead of merger, SBI names 7 Deputy MDs, inducts 3

Ahead of merger, SBI names 7 Deputy MDs, inducts 3

In a move to rejig the succession plan in the top management, country’s largest lender State Bank of India (SBI) has cleared the names of seven senior executives for the key post of Deputy Managing Director (DMD) ahead of the possible merger with its associate banks.

A highly-placed source in the SBI told The Pioneer that seven Chief General Managers (CGMs) of the SBI out of 17 who were in the race, were picked up for the post of DMDs. Three DMDs were inducted in their respective positions on June 1 and the rest four will take charge shortly.

“Prashant Kumar (Kolkata Circle) was appointed as Chief Operating Officer or COO (equivalent to DMD) in SBI’s corporate office in Mumbai and he would work as retail head, replacing NK Chari. While DMD Badal Chandra Das (Kerala Circle) took charge as head of audit and management inspection in SBI’s Hyderabad office, and Venkat Nageswar who has been elevated as DMD took charge of SBI Global Market. Das replaced CR Shasikumar, who has been appointed as MD of State Bank of Travancore. As SBI has already intimated all promoted ones individually, the rest four would take charge in their respective positions in a week or so,” the sources added.

The move comes at a time when the top lender is in the process of resolving the human resource problem the bank has been facing for a long time due to shortage of staff, especially in the executive level. Last month, the bank had given in-principle approval for the merger plan and sought the Government nod to absorb its associate banks.

It is also expected that some of the selected executives could eventually be in the reckoning for the posts of MD and Chairman in the coming years.

According to the sources, besides Kumar, Das and Nageswar, other four DMDs promoted are Anuradha Rao (Personal Banking Business), Pallav Mohapatra (New Delhi Circle), Neeraj Vyas (Associates & Subsidiaries) and Padmaja Chunduri. “One Hari Das has been promoted from SBI’s Associates quota and he may be appointed as MD of an existing SBI associate. The decision has to be taken by the SBI boss Arundhati Bhattacharya soon,” it said.

In fact, 14 CGMs of SBI appeared for the interview for the post of DMD, which was held in Mumbai office late last month. Apart from the 14 CGMs of the parent bank, three CGMs, who are currently heading the associate banks of the SBI Group, were also interviewed. There were around seven positions of DMDs to be filled up at the bank during the current financial year. The DMD aspirants were interviewed by a panel headed by SBI Chief Bhattacharya.

As the Finance Ministry has been making its effort to resolve human resource (HR) crisis in almost all public sector banks, including SBI, some of the top posts of SBI are expected to be filled up this year. Even SBI Chairman Arundhati Bhattacharya, who got a three-year term, is due to retire in September, whereas VG Kannan, MD of the bank, will retire this month.

Though the other three MDs — B Sriram, Rajnish Kumar and PK Gupta — are still on the job, the Government is yet to make any decision on appointing a successor to Bhattacharya. However, MG Vaidyan, DMD, and head of the Stressed Assets Management Group, is due to retire in August, whereas Chief Development Officer RN Behera will be hanging up his boots in October. State Bank of Travancore MD Jeevan Das Narain and State Bank of Mysore MD Sharad Sharma — in the DMD rank — have already retired so far.

– 04 June 2016 | Madhusudan Sahoo | NEW DELHI

Sensex jumps 193 points; Nifty reclaims 7,900-mark as investors cheer nod to bankruptcy bill

Sensex jumps 193 points; Nifty reclaims 7,900-mark as investors cheer nod to bankruptcy bill

Sensex jumps 193 points; Nifty reclaims 7,900-mark as investors cheer nod to bankruptcy bill

 

Optimism following the passage of the bankruptcy bill in Parliament helped soothe jittery nerves over the revised tax treaty with Mauritius as the benchmark BSE Sensex recovered by 193.20 points to end at 25,790.22 Thursday, driven by banking stocks such as ICICI Bank and SBI.

The broader NSE Nifty too regained the key 7,900-mark.

Trading sentiment was also positive ahead of the release of key macroeconomic data — industrial production (IIP) for March and consumer price index (CPI) for April.

Banking stocks were in the limelight, largely on the nod to the much-awaited bankruptcy bill by Rajya Sabha. ICICI Bank gained the most among Sensex pack, surging 3.46 percent to Rs 231.85, while SBI gained 1.87 percent to Rs 188.40 and HDFC Bank rose 1.05 percent to Rs 1,149.90.

“The bill aims to provide a single unified law for the timely resolution of insolvency and bankruptcy related cases, which consequently will help creditors recover bad debts faster,” said Shreyash Devalkar Fund Manager -Equities, BNP Paribas MF.

This helped markets put behind the scare caused by revised Mauritius tax treaty, he added.

The broader markets too displayed a firm trend as retail investors widened their portfolios with the BSE small-cap index rising 0.93 percent and mid-cap gaining 0.69 percent.

The benchmark BSE Sensex surged 193.20 points or 0.75 percent to settle the session at 25,790.22 on widespread gains after shuttling between 25.827.03 and 25,620.27.

The index had lost 175.51 points yesterday over fears that equity inflows would take a hit after India’s move to impose capital gains tax on investment through Mauritius.

The broader NSE Nifty again went past 7,900-mark and touched a high of 7,916.05, before settling 51.55 points or 0.66 percent higher at 7,900.40.

Asian Paints, which reported a 19.87 percent jump in consolidated net profit for the March quarter, rose by 2.13 percent to Rs 926.75.

Regional markets showed a mixed trend with the indices in Japan and Singapore rising by 0.41 percent to 0.46 per cent while those in China, Hong Kong, South Korea and Taiwan fell by up to 0.70 percent.

Europe-based stocks reversed early losses on expectations that the Bank of England will keep interest rates on hold. Key indices in France and Germany rose by 0.27 percent and 0.37 percent, respectively, while the UK’s FTSE quoted lower by 0.17 percent.

Back home, 21 scrips, out of the 30-share Sensex pack ended higher while nine — Axis Bank, HUL, M&M, HDFC, Maruti, L&T, Hero MotoCorp, BHEL, Cipla — fell up to 1.19 percent.

Major gainers were Dr Reddy’s (3.65 percent), ICICI Bank (3.46 percent), Asian Paints (2.13 percent), TCS (1.96 percent), SBI (1.87 percent), Tata Motors (1.87 percent), RIL (1.66 percent), Bajaj Auto (1.40 percent), Lupin (1.28 percent) and HDFC Bank (1.05 percent).

Among BSE sectoral and industry indices, consumer durables rose by 1.41 percent followed by IT 1.12 percent, realty 1.12 percent, energy 1.07 percent, teck 1.04 percent, bankex 0.95 percent and finance 0.82 percent. While, capital goods fell 0.04 percent.

The market breadth turned positive as 1,569 stocks ended higher, 1,001 closed lower, while 183 ruled steady.

The total turnover rose to Rs 2,650.92 crore from Rs 2,574.47 crore yesterday.

Meanwhile, Foreign portfolio investors (FPIs) sold shares worth a net Rs 362.19 crore yesterday, as per provisional data released by the stock exchanges

-May 12, 2016, Mumbai