India’s benchmark equity indices reached record highs last week as foreign institutional investors poured in money in emerging markets in the wake of Japan’s unexpected fall into recession in the third quarter and sluggish economic growth in the euro zone. Particularly, bank stocks have been rising as a dramatic fall in inflation is encouraging a large segment of the market to bet on an interest rate cut by India’s central bank sooner than later. If indeed that happens, tardy growth in loan portfolio will get a boost even as banks will make money with the drop in bond yields.
More than 12 years ago, in June 2002, the Dutch financial services group ING had made an audacious attempt to acquire then Vysya Bank promoter GMR Group’s 23.99% stake in the lender. As the ING Group already held 20% stake in the old private bank, it was to take its stake to close to 44%—the highest ever held by a foreign bank in an Indian entity.
The 5,000 sq. ft Bharatiya Mahila Bank Ltd branch at Nariman Point’s landmark Air India building in Mumbai—the sole branch in Maharashtra till now—is managed by half-a-dozen employees. They outnumber customers most days of the week.
One chairman and managing director (CMD), one deputy managing director (DMD) and 17 executive directors (EDs) of public sector banks met three panels, for 20 minutes each, at the Reserve Bank of India (RBI) headquarters in Mumbai last Friday. They have been competing for eight top posts in state-run banks.
This is the first instance of prospective CMDs of public sector banks being interviewed by so many panels after the Bharatiya Janata Party-led government scrapped the selection of six public sector bank heads and 14 executive directors, following the recommendations of a committee, formed to examine the selection process of the CMDs and EDs in 2014-15.
Are the queues outside automated teller machines, or ATMs, in India’s six metros—Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad—getting shorter? At these centres, the customers are now allowed to use ATMs of other banks where they do not keep a savings account for only three free transactions a month, including transactions to check the balance. Of course, they can have two more transactions in non-metros. Within an overall limit of five free transactions, the Reserve Bank of India (RBI) has capped metro transactions at three.
Seven public sector banks (PSBs) which do not have their chiefs will probably get their new bosses by the end of this month. Sixteen executive directors (EDs) of different PSBs will appear for interviews on 13–14 November for eight posts of chairman and managing director (CMD), including that of Vijaya Bank where the top position will fall vacant by the end of the year. In the first stage, they will appear before three screening committees of two members each—a deputy governor of the Reserve Bank of India (RBI), financial services secretary G.
