Extraordinary Optimistic Bankers Still Tell Lie That NPA is Within Control

NPA levels highest in 2011-12 during last 5 years: RBI

Net NPA levels in the year 2011-12 were at 1.28% in the banking system

BS Reporter / Mumbai Oct 01, 2012, 21:48 IST Non-performing assets (NPAs) in the banking system were highest in last five years, according to the Reserve Bank of India (RBI) data. Net NPA levels in the year 2011-12 were at 1.28% in the banking system. Net NPA ratio of the nationalised banks (excluding SBI and associates) crossed 1% mark in the net NPA ratio for the first time in last five years at 1.43% in 2011-12. The ratio was lowest at 0.68% in 2008-09. Including SBI and its associates it stood at 1.53% for all public sector banks. Though the net loan loss ratio is at highest in the past five years for the banking system, for private sector banks, it has declining continuously for the past three years. In 2011-12, the private banks reported net NPA ratio of 0.46% compared to 0.56% reported last year. Country's largest lender State Bank of India reported net NPA ratio of 1.82% in 2011-12 compared to 1.63% reported a year back. SBI advances are about 17% of the total banking system. “The overall economy is slowing down and the cash flows of corporates have been affected which has had cascading effect on NPA levels” said one senior public sector bank executive. RBI today published a profile of Indian banks for 2011-12. RBI in its report said that profitability in terms of return on assets (RoA) declined in 2011-12 compared to previous financial years while cost of funds (CoF) increased for the banks. Also profit per employee remained static for the nationalized (excluding SBI group) banks in 2011-12 and increased for the other bank groups. Capital adequacy ratio (CAR) declined in 2011-12 for all banks excluding SBI group. SBI group reported CAR of 13.70% in 2011-12 an increase of 145 basis points over last year. This increase helped overall banking system to post an increased CAR in 2011-12 though the CAR for other groups of banks declined compared to last year. http://business-standard.com/india/news/npa-levels-highest-in-2011-12-during-last-5-years-rbi-/189305/on Why Banks Are Now Unsafe? Lacs of cases against defaulters of the bank and against NPA borrowers have been filed in various local courts, district courts, Lok Adalats, Ombudsmen, High courts, Supreme court, Debt recovery Tribunals, District Certificate Officers, District magistrate’s court , Sub Divisional Magistrate’ court for taking possession of property seized under SERFAECI act etc have been filed by various financial institutes including public sector banks but due to manpower shortage or due to inefficiency of executives, or due to malicious intention of magistrates and judges, or due to conspiracy of advocates in nexus with judges and magistrates cases are lying pending for years together. Is there any provision to take action against judges who in nexus with advocates are willfully delaying the process of justice? If yes, has any government taken any against any corrupt judges in the past which could demonstrate the effectiveness of the Law and willingness of rulers to punish the corrupt judges before it is too late? Click on following link to read morehttp://dkjain497091112006.blogspot.in/2012/09/why-banks-are-now-unsafe.html Restructuring OF Loan Can Only Postpone Collapse of Banks DEBT RECAST PACKAGE FOR SEBS SOON: MOILY Revamp will involve modifying debt repayment schedule, says minister News collected from LIVE MINT Mumbai: The much-awaited debt recast package for state electricity boards (SEBs) may soon receive government approval. “We have worked out some financial package and also a debt restructuring package that will be approved by the Cabinet in a week or two,” power minister M. Veerappa Moily told reporters on the sidelines of a Confederation of Indian Industry (CII) corporate governance summit in Mumbai on Tuesday. click on following link to read more http://dkjain497091112006.blogspot.in/2012/09/restructuring-of-loan-can-only-postpone.html WEDNESDAY, SEPTEMBER 26, 2012 RBI First Allows Open Loot in Banks AND Then Talk of Restructuring AND Merger Politicians of our country have been consistently using cooperative banks and public sector banks to empower their political workers, their kith and kin, their friends and relatives and to strengthen their vote bank. Unfortunately RBI officials and Inspecting officials like Chartered Accountants of the country are certifying all loots by taking their share in bribe led lending or unhealthy lending done by officials of various banks to earn illegal wealth. Click on following link to read more http://dkjain497091112006.blogspot.in/2012/09/rbi-first-allows-open-loot-in-banks-and.html Finance Ministry looking at merging RRBs with sponsor banks MUMBAI, MARCH 11:  The Finance Ministry may have subtly initiated an exercise to merge the 82 Regional Rural Banks with their sponsor banks. A recent communication to the chiefs of sponsor banks and RRBs to the effect that RRB officers (Scale I: officer to Scale IV: chief manager) should be deputed to their respective sponsor banks and vice-versa suggests that an integration exercise is being worked out. The Ministry has directed that 20 per cent of the RRB officers should be deputed to their respective sponsor banks (mainly public sector banks). The RRBs officers who go on deputation have to be replaced with sponsor bank officers. Given that the government is staring at a huge fiscal deficit, disinvestment of its stake in RRBs in favour of sponsor banks would fetch it cash. This would help bring down the deficit, said a senior public sector bank official. OPPOSITION TO CROSS-MERGERS With various stakeholders in sponsor banks and RRBs expressing their opposition to the Ministry's proposal for cross-mergers of RRBs, the Ministry may have found a via-media — merger of RRBs with their sponsor banks — to pacify them, say RRB insiders. In November 2011, the Ministry had come up with a proposal for cross merger of RRBs cutting across sponsor banks in a particular State. The move was aimed at reducing the number of RRBs from 82 to 46. RRBs were established in the mid-1970s to ensure sufficient institutional credit for agriculture and other rural sectors. They are jointly owned by the Government of India (50 per cent stake), the State Government concerned (15 per cent), and sponsor banks (35 per cent). POLICY CONFUSION “When it comes to drawing up policies for RRBs, the Ministry seems to be confused. First it wanted sponsor banks to take necessary action regarding operational integration and human resources development. Then it came up with the cross-merger proposal. Now it has come up with this new policy on human resources,” Mr S.K. Bhattacharjee, General Secretary, All India RRB Officers Federation. He observed that such instructions are creating a lot of uncertainty. Sponsor banks are quite hesitant to take any action on the Ministry's instructions as they are unaware of the unfolding situation. Pointing to a flaw in the new HR policy prescribed by the Ministry, Mr Dilip Kumar Mukherjee, Secretary General, All India RRB Employees Association, said by the time RRB officers gain professional and technological expertise in sponsor banks through the 3-5 years deputation they will hardly be left with any tenure once they go back to their respective RRBs. “As pay and allowances of the sponsor bank will be applicable, RRBs will end up incurring huge expenditure on salary as sponsor bank officers will work with them,” he said. RRBS: RESPONSIBILITY OF SPONSOR BANKS Underscoring the fact that that the Government has made the sponsor banks responsible for the functioning of RRBs and that sponsor banks have incurred huge cost in putting RRBs under core banking solution platform, Mr Bhattacharjee said they should be merged with their sponsor banks. The number of RRBs has shrunk from 196 in the early 2000s to 82 now on account of restructuring and amalgamation of RRBs to improve their financial soundness. According to RBI figures, as of March-end 2011, the 82 RRBs collectively had deposits of Rs 1,66,232 crore (Rs 1,45,035 crore as of March-end 2010) and advances of Rs 94,715 crore (Rs 79,157 crore). http://www.thehindubusinessline.com/industry-and-economy/banking/article2985225.ece