Bankers Trust:

What can budget do for PSU banks?

What can budget do for PSU banks?

Seldom has the Union budget been so critical for India’s state-controlled banks that account for a little over 70% of loan assets. Twelve of the banks posted net losses in the December quarter as they needed to set aside funds for rising bad assets even as their gross non-performing assets or NPAs rose by Rs.1.

Bankers Trust:

Budget 2016-17: Eight cheers to public sector banks

Budget 2016-17: Eight cheers to public sector banks

The biggest negative for India’s state-owned banks in the Union budget is finance minister Arun Jaitley’s announcement that the government will infuse (only) Rs.25,000 crore in fresh capital in these banks—many of which are crumbling under the burden of bad loans. Expectations were running high ahead of the budget even as analysts talked about trillions of rupees in capital to take care of the pile of bad loans as well as meet the new Basel norms which will kick in from April 2019.

Bankers Trust:

Budget can create space for RBI’s next rate cut

Budget can create space for RBI’s next rate cut

The 2 February monetary policy review and Reserve Bank of India (RBI) governor Raghuram Rajan’s interaction with the media after the release of the policy didn’t have an iota of surprise. Rajan has taken every care to make the policy review a non-event ahead of the Union Budget which will be presented by the end of this month. The key policy rate remained unchanged and ditto about banks’ cash reserve ratio (CRR), or the portion of deposits that commercial banks need to keep with the central bank.