On March 15, bad debt-laden private sector lender Lakshmi Vilas Bank raised Rs 459.59 crore equity. The money will strengthen its capital base, said a stock market notice which also scotched the speculations about three non-banking finance companies (NBFCs) -- Indiabulls Housing Finance, Edelweiss Financial Services and Srei Infrastructure -- exploring possibilities of a merger with the bank.
This is one of the many outcomes of the Reserve Bank of India’s (RBI) latest liquidity infusion move through a unique instrument. Indeed, in the past too, the RBI had infused rupee liquidity using this route but that had been done (last time in 2013) in difficult times, when the local currency was under attack. This diversifies the liquidity management toolkit of the RBI.
The CEOs of private and foreign banks in the world’s fastest growing major economy are a sulking lot these days as India’s banking regulator is planning to downsize their remuneration. Those who always feel these bankers earn a lot, particularly in comparison to their counterparts in government-owned banks, some of which have much larger balance sheets, are watching them with voyeuristic glee. Under India’s Banking Act, private and foreign lenders always need regulatory approval for the remuneration of whole-time directors and CEOs and the Reserve Bank of India (RBI) has not exactly been liberal in its approach.
A king loved walking on the streets but didn’t want his feet to get dirty. So, a hefty award was announced for the person who could solve his problem. The first aspirant came with thousands of brooms; the cloud of dust, formed over the kingdom, made the king sick.