Bankers Trust:

S4A won’t solve the bad loans problem

S4A won’t solve the bad loans problem

t’s official: The strategic debt restructuring (SDR) scheme, introduced by the Reserve Bank of India (RBI) in June 2015 to address the rising bad debt problem of the banking system, has failed. Under SDR (which a domestic brokerage described as “a band-aid for a bullet wound” in a January report), a consortium of lenders could convert part of their loan exposure in a stressed company into equity and own at least 51% of it. The banks were given a window of 18 months to bring the houses of stressed companies in order, but they found the time period too short to get any benefit out of it.

Bankers Trust:

After Raghuram Rajan, who?

After Raghuram Rajan, who?

On 7 August 2013, little less than a month ahead of Raghuram Rajan taking over as governor of the Reserve Bank of India (RBI), Indian government appointed him as an officer on special duty (OSD) at the central bank “to provide an overlap” with then governor D. Subbarao who was slated to retire on 4 September. This was the first instance of a governor-elect coming to RBI as an OSD ahead of his term.

Bankers Trust:

Book excerpt | Bandhan—the making of a bank

Book excerpt | Bandhan—the making of a bank

There have been many books on microfinance, in India and overseas. Most of them have been written either from the point of view of the borrowers—how microfinance has changed their lives—or are academic studies on how such entities work, the different models of microfinance, risk management, etc. Bandhan: The Making of a Bank by Tamal Bandyopadhyay is different—it is written from the point of view of the organization.

Bankers Trust:

Payments banks: How many more will call it quits?

Payments banks: How many more will call it quits?

Reserve Bank of India (RBI) governor Raghuram Rajan is not “overly perturbed” about payments bank licences being surrendered. This, according to him, is a reflection of companies not doing proper assessment while applying for the banking licence. Cholamandalam Distribution Services Ltd, a Murugappa Group company, was the first to junk its plan to set up a payments bank in March.

Bankers Trust:

Raghuram Rajan’s fate, not rate cut, focus of markets

Raghuram Rajan’s fate, not rate cut, focus of markets

No prizes for guessing what the Reserve Bank of India (RBI) governor Raghuram Rajan will do when he unveils the bi-monthly monetary policy on Tuesday. At this point, the market is more interested to know whether Rajan gets an extension of his term that ends in September than when the next rate cut happens. If the governor remains in office, that will have a far more soothing effect on the rupee and bond markets than a quarter percentage point rate cut which some believe could happen in August when the outcome of the monsoon is clear.

Bankers Trust:

How many banks are swimming naked?

How many banks are swimming naked?

On 2 October 2014, Prime Minister Narendra Modi launched Swachh Bharat Abhiyan—India’s biggest ever cleanliness drive. Around three million government employees and students of schools and colleges participated in the event to clean the streets, roads and other infrastructure in Asia’s third-largest economy. A year later, Raghuram Rajan, governor of India’s central bank, steered a similar drive to clean up the balance sheets of the country’s commercial banks.