Financial Awareness for RBI Grade B-15 July 2017

Financial Awareness for RBI Grade B-15 July 2017

  1. Government, RBI nudge banks to pursue one-time settlement to recover non-performing loans (Source: ET)

  • One-time settlement of dues by defaulters may rise in the next few months as banks’ aggressive move to recover loans and the Reserve Bank of India’s push to make bankruptcy courts the central mechanism for recoveries could lead to some promoters losing their businesses.
  • This would also ensure that banks don’t clog the bankruptcy courts with cases where the default amount is not high.
  • Banks have begun aggressively negotiating a one-time settlement (OTS) on the insistence of the finance ministry and the central bank, which want speedy clean-up of bank balance sheets.

2. National Investment and Infrastructure Fund to soon close first fund-raising (Source: ET)

  • The National Investment and Infrastructure Fund (NIIF) is evaluating investments in roads, ports, aviation and power sectors. The first fund-raising by NIIF is expected to close soon.
  • “Strong investment pipeline with investment opportunities is under consideration in the roads, ports, aviation and power sectors,” the statement said. The NIIF and the government have also signed the agreement for Rs 20,000 crore budget commitment to the fund.
  • The NIIF is looking to mobilise funds from foreign sovereign wealth funds. It is considering investments in third party managed funds focused on clean energy, affordable housing and medium-sized infrastructure companies.

3. Axis Bank starts search for new MD to succeed Shikha Sharma (Source: ET)

  • The board of India’s third largest lender, Axis Bank, has begun the search for a new MD and CEO to succeed Shikha Sharma who may step down from her position once her term ends next year.

4. Yes Bank gets $150 mn from OPIC to fund SME lending (Source: ET)

  • Private sector Yes Bank has received $ 150 million funding from the US government and Wells Fargo to increase lending to support women entrepreneurs and small and medium-sized enterprises in India.
  • This is the third round of funding to the bank as part of arrangement with the Overseas Private Investment Corporation (OPIC) –the US government development finance institution — and Wells Fargo.
  • $ 50 million of the financing would be used to expand support to women-owned businesses, while another equal amount will be used for financing SME business in low-income states.

5. SS Mundra dispels fears about future of weak banks (Source: BL)

  • Urging all to not fall prey to falsehoods on the future of weak banks, RBI Deputy Governor SS Mundra said lenders’ inclusion under prompt corrective action (PCA) is for timely improvement of their performance.
  • “Its objective is to facilitate the banks to take corrective measures, including those prescribed by the RBI in a timely manner in order to restore the thresholds or financial strength,” Mundra said.

6. June WPI inflation drops to 11-month low as food prices ease (Source: BS)

  • Inflation based on the Wholesale Price Index (WPI) slipped to a 11-month low of 0.9% in June, as food inflation remained negative and prices of manufactured items rose at their weakest pace in 11 months.
  • The slowing in wholesale inflation comes against the backdrop of retail inflation easing to a record low of 1.54% in June. As a result, expectations from the Reserve Bank of India (RBI) to reduce its lending rate (Repo rate) at its next Monetary Policy Committee meeting in early August, has again peaked from economists and business alike.

7. Exports up for 10th month, but at slower rate of 4.4%, to $23.6 bn in June (Source: BS)

  • Export growth slowed in June to 4.39%, even as the country managed to see 10 straight months of rising in outbound trade.
  • The figure was $23.56 billion, compared to $22.57 billion in the same month last year, according to data issued by the commerce and industry ministry.
  • Import growth also fell in June, with inbound shipments totalling $36.52 billion, a rise of 19% over the same month last year.

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