Performance Of Public Sector Banks

Sat, Nov 17, 2012 at 13:27

How Indian banks fared in FY12: CARE Ratings analyses

The most important challenge going ahead is controlling quality of assets and the RBI has highlighted issues relating to restructured assets, slippage in quality, write-offs etc

CARE Ratings has come out with its report on Indian Banks.

The RBI in its Report on Trends and Progress in Banking 2011-12, has highlighted the major issues confronting the Indian banking system. Important themes that emerge are the differential performance of various bank groups, movement in profits, spreads, quality of assets etc. The most important challenge going ahead is controlling quality of assets and the RBI has highlighted issues relating to restructured assets, slippage in quality, write-offs etc.

The banking sector, which withstood the turmoil of the global financial crisis during 2008-09, started showing some signs of stress during the subsequent period. Performance of Indian banks during the post-crisis period was conditioned to a large extent by a fragile recovery of the global financial markets as well as a challenging operational environment on the domestic front, with high inflation and muted growth performance. In addition, stressed financial condition of some State Electricity Boards and airline companies further added to the deterioration in the asset quality of banks. Further, with inflation being high, the RBI had followed an aggressive interest rate policy which put pressure on both banks and borrowers in an environment which is typified by a slowdown in FY12.

It is against this background that the main features of the banking system have been highlighted below. The data taken from this report has been put together to bring about a comparison between various bank groups in the last two years. Hence, besides highlighting the state of various banking parameters over two years, a comparison can be drawn across bank groups.

For Full report click on following link

http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=783984&num=0

Performance Appraisal of Indian Public Sector Banks

Parvesh Kumar Aspal 

Punjab Technical University

Naresh Malhotra 

Independent
September 1, 2012
Abstract:      

The strength of economy of any country basically hinges on the strength and efficiency of financial system, which, in turn, depends upon a sound and solvent banking system. Banks needs to be more closely watched than any other type of economic unit. The regulators have recommended bank’s supervision through CAMEL rating model to assess the performance of banks, which is better than the earlier systems. 

The present study aims to measure the financial performance of Indian public sector banks excluding State Bank Group for the period of 2006-11. 

The study found that Bank of Baroda was at the first position with overall composite ranking average of 6.05 due to its better performance in the areas of liquidity and asset quality, closely followed by Andhra Bank with overall composite ranking average of 6.15 because of its strength in the spheres of management efficiency, capital adequacy and asset quality. United Bank of India hold the bottom most rank with overall composite ranking average of 14.60 due to management inefficiency, poor assets and earning quality. 

The study recommends that United Bank of India has to improve its management efficiency, assets and earning quality. Similarly Bank of Maharashtra should take necessary steps to improve its liquidity position and management efficiency.

To Read Full Report please click on following Link:---

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2176875

Build robust mechanism to prevent e-banking fraud: RBI

MUMBAI, NOV. 12: 

The Reserve Bank of India wants banks to build a robust mechanism to prevent incidents of fraud in areas of mobile/Net banking and electronic fund transfer.

“With greater infusion of technology in banking, the incident of frauds in Internet banking has witnessed an increase in recent times. Banks need to improve customer awareness to contain incidents of frauds involving customers,” the RBI said in its latest Report on Trend and Progress of Banking in India.

Ensuring efficiency of the banking sector by way of technology infusion while minimising the occurrence of fraudulent events has become one of the major objectives of the Reserve Bank in recent years.

According to RBI, complaints related to unauthorised fund transfers, fraudulent withdrawals from ATMs using duplicate cards, phishing e-mails aimed at extracting personal information have registered significant increase in recent times.

Indian banks Q2 results confirm asset quality decline: Fitch
Source: IRIS (12-NOV-12)

Non-performing loans will rise over the next year for Indian banks as the economic downturn continues, Fitch Ratings says.

Recent asset quality trends at both large and mid-sized government banks confirm our forecast that the Indian banking system's reported gross NPL ratio will rise close to 4.2% for the year to March 2013 (FY13). The proportion of restructured assets (not included in the reported NPLs) has also increased sharply. The total NPL and restructured assets ratio may well exceed 10% at FY13.

The average NPL ratio for the top 10 government banks is approximately 3.7%. State Bank of India (SBI), which started to address its assetquality problem relatively early, reported an increase in non-performing loans to 5.15% at end-September 2012, from 4.19% a year ago but accompanied by a far lower share of restructured assets. It expects SBI's NPL ratio to be one of the first to level off.

Asset quality pressure is increasingly visible at other large government banks, which have reported sharply higher NPLs in last two quarters. It believes this trend will continue with the other banks as the effect of the economic slowdown is fully reflected in their asset quality performance.

It believes prolonged stress in the infrastructure sector will put the greatest pressure on asset quality and could cause problem loans to spike as most of the stressed exposures are currently classed as restructured assets. Since 2007, the infrastructure boom has led to a concentration in lending to the sector and to single names, particularly power utilities. Small and medium-sized Indian banks, such as UCO and Vijaya, with concentrated regional profiles are viewed as most vulnerable if stress levels increase. Larger banks, such as State Bank of India and Bank of Baroda, with diversified loan portfolios and better funding profiles, should be able to absorb losses through profits alone.

Concerns over asset quality deterioration place pressure on the standalone credit profile of the banks. Viability Ratings of the large government banks in India range from 'bbb-' to 'bb' and could be downgraded if losses are not offset by adequate capital support.

At the end of the first-half of FY13, gross NPLs in the 10 largest government banks rose by about 60% from a year earlier and by 32% from end-FY12. These banks also account for the bulk of the NPL stock and restructured assets and are likely to see further pressure from the impact of slowdown in the next few quarters. Government banks account for over 70% of the Indian banking system assets and are a key driver in shaping system averages. NPLs at the three largest privately-owned banks in India stand at an average of just 1.9%.

एनपीए बढ़ा झारखंड के बैंकों की चिंता बढ़ी

रांची : राज्य में बैंकों की ओर से दिये गये लोन डूब रहे हैं. एक साल के दौरान (सितंबर 2011 से सितंबर 2012) बैंकों ने कुल 7057.93 करोड़ लोन दिये हैं. इनमें 1150.62 करोड़ रुपये डूबने के कगार पर हैं. यह राशि नन परफॉर्मिग एसेट (एनपीए) हो गयी है.

यह बैंकों की ओर से दिये गये कुल लोन (46377.68 करोड़) का 5.40 फीसदी है, जो चिंताजनक है. झारखंड में अभी बैंकों के कुल 2505.59 करोड़ रुपये एनपीए हो चुके हैं.
कई हैं कारण : राज्य में सुखाड़ के कारण बैंक फिलहाल कृषि लोन की वसूली नहीं कर पायेंगे. इसके अलावा उन्हें खातों को रिस्ट्रक्चर कर फिर से लोन देने हैं. बैंक कर्मियों के अनुसार, खाता रिस्ट्रक्चरिंग करने के लिए खाता धारक को एक पन्‍ने का फॉर्म भरना है, पर ग्रामीण क्षेत्रों में किसान इन पर हस्ताक्षर भी नहीं कर रहे हैं.

इस कारण ये खाते एनपीए में जा रहे हैं. इसके अलावा ऋण वसूली के लिए अधिकारी की नियुक्ति नहीं होने के कारण भी स्थिति गंभीर हो गयी है. राज्य में 1.04 लाख खातों पर सर्टिफिकेट केस किया गया है. इनसे 304.95 करोड़ रुपये की वसूली होनी है. लोगों में पैसे नहीं लौटाने की प्रवृत्ति बढ़ रही है. अच्छे स्थिति वाले खाताधारक भी खाता का एनपीए कर सेटलमेंट का प्रयास करते हैं.

- 1150 करोड़ साल भर में फंसे

कड़े नियम के बाद भी नहीं हो पा रही वसूली

क्या है एनपीए

एनपीए यानी नन परफॉर्मिग एसेट. जब बैंक द्वारा दिये गये लोन की रिकवरी रुक जाती है, तो उसे खराब लोन या एनपीए कहा जाता है. नियमत: लगातार तीन माह यानी 90 दिनों तक खाते में पैसे नहीं आने पर स्वत: खाता एनपीए में चला जाता है.

राज्य में बैंकों के लोन खराब हो रहे हैं. यह चिंताजनक है. रिकवरी में तेजी लाने की जरूरत है. एनपीए में सुधार का प्रयास किया जा रहा है.
(एसके सिंह, मुख्य प्रबंधक एसएलबीसी)
- दिनेश केडिया -

http://www.prabhatkhabar.com/node/231890