Financial Awareness for RBI Grade B-20 July 2017
Finance ministry working on capital infusion for PSU banks, to be announced soon (Source: MINT)
- The finance ministry is working on the capital infusion strategy for public sector banks and an announcement to this effect will come soon.
- The funds’ infusion matrix as per the Indradhanush scheme is being given a final shape on the basis of representations from various banks for their capital needs. · Although the Indradhanush scheme has assigned Rs10,000 crore for the current fiscal, it may prove insufficient due to high provisioning requirement for bad loan resolution through various processes, including insolvency and bankruptcy proceedings.
2. Top 50 stressed a/cs will need Rs. 2.4 lakh cr haircut: Crisil (Source: BL)
- Banks may have to take a haircut of 60 per cent, worth Rs. 2.4 lakh crore, to settle 50 large stressed assets with a debt of ₹4 lakh crore, according to an analysis by credit rating agency Crisil.
- The 50 large stressed companies are from the metals (30 per cent of total debt), construction (25 per cent), and power (15 per cent) sectors, and account for half of the Rs. 8 lakh crore non-performing assets (NPAs) in the banking system as on March 31, 2017. The agency estimated that banks have provisioned for about 40 per cent of this loan exposure.
- Crisil has classified the haircuts into four categories — marginal (less than 25 per cent), moderate (25-50 per cent), aggressive (50-75 per cent), and deep (greater than 75 per cent). A quarter of the debt analysed needs marginal or moderate haircuts, while a third needs aggressive, and nearly 40 per cent, deep haircuts.
3. Digital transactions declining since March (Source: ET)
- The number of digital transactions, which grew significantly in the aftermath of demonetisation last year, has started showing a declining trend since March 2017, according to official data.
- The number of digital transactions has come down from 119.07 crore in March 2017 to 118.01 crore in April and further to 111.45 crores in May. The number of digital transactions was only at 71.27 crores in October 2016. It went up to 83.48 crores in November 2016 and shot up to 123.46 crores in December 2016. These transactions numbered 114.96 crores in January 2017, and about 101.18 crores in February 2017.
4. RBI plans to send new liquidity tool proposal (Source: BS)
- The Reserve Bank of India (RBI) will submit a fresh proposal to the government for introducing a new liquidity management tool as it grapples with strong foreign inflows.
- The decision to reconsider the so-called standing deposit facility or SDF, was taken at a meeting between the new Economic Affairs Secretary Subhash Chandra Garg and RBI Deputy Governor Viral Acharya on Monday.
5. RERA likely to impact performance of developers in FY18: ICRA (Source: MINT)
- The transition to the new realty regulatory framework under the Real Estate (Regulation and Development) Act, or RERA, is expected to slow down the new project launches and increase working capital requirements of developers, thus creating pressure on their operational performance during this fiscal, said rating agency ICRA.
- The RERA, which came into effect from 1 May, is likely to increase customer confidence and improve demand prospects over the long term, but in the short-term, it may pose various challenges for developers, the rating agency said.
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