Financial Awareness for RBI Grade B-10 July 2017

Financial Awareness for RBI Grade B-10 July 2017

  1. Legal heavyweights join Essar’s challenge to RBI’s bad loan plan (Source: MINT)

  • Some of the top legal brains in the country are facing off in the ongoing Essar Steel versus Reserve Bank of India (RBI) tussle in Gujarat high court.
  • The case was triggered after RBI moved the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Essar Steel. Eleven other companies are facing a similar fate, it is part of RBI’s new plan to resolve Indian banks’ accumulated bad debt problem of around Rs 8 trillion.

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Financial Awareness for RBI Grade B-6 July 2017

Financial Awareness for RBI Grade B-6 July 2017

  1. RBI: Digital transactions’ value rose by 2.4% in June (Source: MINT)

  • Digital transactions rose in June in terms of value from the previous month, according to the Reserve Bank of India (RBI).
  • Total digital transactions rose 2.36% to Rs113.73 trillion, from Rs111.11 trillion in May, according to the provisional data released by RBI.
  • The number of digital transactions, however, declined marginally to 831.7 million in June from 858.5 million in May. The highest volume was recorded in December at 957.5 million. Digital transactions include those conducted through credit and debit cards, unified payments interface (UPI), unstructured supplementary service data (USSD), prepaid payment instruments (PPIs) and internet banking.

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Financial Awareness for RBI Grade B-5 July 2017

Financial Awareness for RBI Grade B-5 July 2017

 

  1. Jyoti Structures first to face bankruptcy proceedings under IBC (Source: MINT)

  • The National Company Law Tribunal (NCLT) has approved bankruptcy proceedings for power infrastructure company Jyoti Structures Ltd, making it the first among the 12 cases referred by the central bank under India’s new Insolvency and Bankruptcy Code (IBC).
  • The tribunal’s order came on an insolvency application filed last week by the company’s lead lender State Bank of India (SBI). According to NCLT filings, the company has total debt of Rs7,000 crore.
  • Jyoti Structures was one of the power sector firms hit by a lack of fuel linkages or trouble in completing the land acquisition. Lenders invoked RBI’s strategic debt restructuring (SDR) norms in 2015 and restructured its debt outside the provisions of SDR. Since then, banks have been trying to sell their 51% stake in the company with no success.

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Financial Awareness for RBI Grade B-4 July 2017

  1. Central Bank of India gets shareholders nod for raising Rs6,500 crore (Source: MINT)

  • Public Sector lender Central Bank of India has received shareholders nod for raising up to Rs6,500 crore by follow-on public offer, rights issue and Qualified Institutional Placement (QIP).

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Financial Awareness for RBI Grade B-3 July 2017

  1. BBB recommends 15 names for executive directors appointment in PSU banks (Source: MINT)

  • Banks Board Bureau (BBB) has recommended to the government names of 15 general managers of various public sector banks for appointment as executive directors.
  • The recommendations were made by BBB chairman Vinod Rai and other members of the bureau. The list would be sent to the Department of Financial Services to get Appointments Committee of Cabinet (ACC) clearance, officials said. The ACC is headed by Prime Minister Narendra Modi.

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Financial Awareness for RBI Grade B-1 July 2017

  1. RBI report warns of more NPA pain, sees bad loans topping 10% by March 2018 (Source: MINT)
  • The Reserve Bank of India (RBI) has warned that risks to the banking industry’s stability have worsened, with asset quality and profitability deteriorating further.
  • The latest edition of the regulator’s Financial Stability Report (FSR), released on 30th June’17, said a severe credit shock is likely to impact capital adequacy and profitability of a significant number of banks. · The report forecast that the banking system’s gross bad-loan ratio will rise to 10.2% of the total loan book a year later if economic conditions stay the same. Bad loans made up 9.6% of total assets as of March 2017.
  • In scenarios of severe stress, the ratio may jump to as high as 11.2% by March 2018, the report said. For public sector banks, the gross bad loan ratio could touch as high as 14.2% by March 2018.

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