"In the Asia Pacific region, banks' rising nonperforming loans and insurers' volatile investment portfolios are in focus. Capital will moderately fall in emerging Asia over the next two years, and banks in India and Sri Lanka will post larger capital declines without public or private injections," Moody's said.
The amalgamation of LVB into DBS Bank India came into effect from November 27 under the special powers of the government and the Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949.
Southeast Asia's largest lender, which will pump in 25 billion rupees ($338 million) into its India unit, until recently had just over 30 branches in India but has now added more than 550 and 900-plus ATMs.
Social distancing rules have forced consumers to rethink how they spend, with digital payments becoming an increasingly attractive. This shift in mindset is reflected in the growth in outstanding balances. Credit card outstanding balances increased by 32% y-o-y in July 2020. This compares to a 33% y-o-y increase in balances at the same time last year.
"We have suggested revisiting the fit-and-proper criteria. We have said that financial conglomerates getting into banking should have a structure NOFHC to come through and that companies should be regulated through RBI guidelines and necessary legislative framework," says Sachin Chaturvedi who is on RBI's central board.
ATM players say that the main reason is that over seven years, the number of debit cards in India has doubled to 86 crore as of September 2020. And of those cards, 35 per cent (30 crore) are RuPay ones issued to PM Jan Dhan Yojana accounts.
According to another banker, not too many companies are going for loan restructuring — partly because they do not want it to be recorded in their credit history, and partly due to the stiff conditions laid down by the Kamath committee.
Bankers will watch out for any guidance on how the RBI plans to manage the record excess liquidity in the financial system, which has distorted market conditions and led to a drop in short-term rates.
The government, through Solicitor General Tushar Mehta, told a bench led by Justice Ashok Bhushan that it had already extended the loan moratorium scheme for small borrowers and waived interest on interest. “Any such relief sector-wise would be a problem under Article 32,” he said.
The Delhi High Court on Friday stayed a Reserve Bank of India notice warning of possible cancellation of UV Asset Reconstruction Company Ltd’s (UVARCL) registration, over what the central bank termed an illegal bankruptcy resolution proposal moved by the ARC for telecom firm Aircel.
The debt-ridden 94-year old old bank's fate was sealed with Union Cabinet headed by Prime Minister Narendra Modi approving Scheme of Amalagamation on Wednesday.
During the Yes Bank rescue earlier this year also, there was an over Rs 7,000-crore bond write-off, but that involved a different instrument called additional tier-I bonds.
Reactions to the recommendation allowing industrial houses to own banks have been strident. The main contentions being that India had eschewed large corporate houses from owning banks for over 50 years for good reasons that still stand. So, goes this line of thinking, it isn’t — at least now —the right time to change the policy.
A court here on Thursday rejected the Enforcement Directorate's plea seeking to intervene in the hearing on a closure report of Mumbai Police in the alleged Rs 25,000 crore Maharashtra State Co-operative Bank scam.
"We are refusing the interim relief sought by the petitioners to stay the amalgamation. The petitions shall be placed for hearing on December 14 when the respondents (Reserve Bank of India, LVB and DBS Bank India) shall file their affidavits in reply," the court said.
