Bankers Trust:

The great Indian rate trick

The great Indian rate trick

A Reserve Bank of India (RBI) working group’s suggestion to create an Indian Banks Base Rate (IBBR) to which all commercial banks can link their loan rates is yet another shot by the regulator to bring in transparency in loan pricing and ensure better transmission of monetary policy. Reset every month, IBBR will be an average of the prevailing base rates of top 14 public sector banks, seven private banks and three foreign banks. This needs to be done as the existing base rate system has turned into a joke.

Bankers Trust:

Sahara hasn’t done anything against the law: Subrata Roy

Sahara hasn’t done anything against the law: Subrata Roy

Sahara Group, which obtained a stay from the Calcutta high court in December on the publication of Mint journalist Tamal Bandyopadhyay’s book Sahara: The Untold Story and filed a Rs.200 crore defamation suit against the author and his publisher Jaico Publishing House, has withdrawn the case following an amicable settlement. The book, which Bandyopadhyay wrote in his individual capacity, will now be released in May, a Jaico official said.

Bankers Trust:

How RBI blocked evergreening of overseas loans

How RBI blocked evergreening of overseas loans

The fact that India’s banking regulator is annoyed with the rising bad loans of banks is well known. In the past few years, the pile of bad assets as well as restructured loans—both through the so-called corporate debt restructuring, or CDR, platform as well as bilateral deals—has ballooned. The Reserve Bank of India has been goading banks for faster dfacetection and resolution of bad assets.

Bankers Trust:

New bank licences: Why RBI chose only two banks

New bank licences: Why RBI chose only two banks

My last week’s column on differentiated licensing evoked strong response from stakeholders. A couple of entities that had applied for a bank permit but did not get it have expressed deep disappointment with the Reserve Bank of India’s (RBI) ultra-conservatism while a few analysts said opening a window for limited licences cannot justify the regulator’s reluctance to welcome not more than two applicants. Incidentally, unlike in 2001, when RBI had made it clear that “the number of licences to be issued in the next three years may be restricted to two or three of the best.

Bankers Trust:

How different will be a differentiated bank licence?

How different will be a differentiated bank licence?

Quite a few companies that failed to get a banking licence from the Reserve Bank of India (RBI) are going back to the drawing board to draft new applications, encouraged by governor Raghuram Rajan’s assurance that aspirants can consider applying for a differentiated permit instead of a full licence. The banking regulator plans to open a window for differentiated licences while permits for universal banks will be available on tap. Commercial banks, cooperative banks, financial institutions and non-banking finance companies (NBFCs) constitute the Indian financial system.