FinMin concerned over Q4 results of PSU banks
MUMBAI, MAY 26:
The Finance Ministry has made public its displeasure over the dip in the bottom lines of most of the state-run lenders, including State Bank of India, in the March quarter earnings.
“It is akin to asking someone who got bashed up on the road how he feels about it,” Financial Services Secretary Rajiv Takru said on the sidelines of an event here over the weekend when asked for his response to the drop in net profit of many public sector banks in the March quarter. “I am not in love with it, no!” he added.
Driven by a higher provisioning, SBI’s net for the March quarter plunged 18.5 per cent at Rs 3,299.22 crore against Rs 4,050.27 crore in year-ago period.
This was the first time in the last two years that the bank had shown a decline in the quarterly net profit. SBI, which was among the last banks to come out with its numbers, joined a slew of its peers from the state-run lenders space in declaring lower numbers.
Among other banks, net profit of Kolkata-headquartered Allahabad Bank plummeted to Rs 126.15 crore against Rs 400.22 crore in the corresponding period a year ago.
Others in the league are United Bank of India (Rs 31.18 crore in March 2013 against Rs 149.29 crore year ago), Indian Overseas Bank (Rs 58.86 crore versus Rs 528.81 crore), Bank of India (Rs 756.57 crore versus Rs 952.73 crore) and Bank of Baroda (Rs 1,028.85 crore against Rs 1,518 crore).
However, Union Bank of India and Corporation Bank managed to show a marginal rise in profits during the period.
Takru also reiterated his demand for hiking the penalty from Rs 1 crore for errant banks found flouting rules “Rs 1 crore is insignificant in current context. It has been discussed with the RBI. It requires a change in the rules. As soon as that limit is increased, one can look at heavier fines,” he said.
http://www.thehindubusinessline.com/industry-and-economy/banking/finance-ministry-unhappy-at-poor-psu-bank-results/article4753167.ece
Saturday, May 25, 2013
FM Merger Mania----Too Big To Fail OR Too Big To Manage
Government and RBI has failed to manage even banks like State Bank of India and smaller public sector banks like PNB, BOB, BOI and Canara bank. These banks were hitherto considered as safe bank are now sick due to burden of bad debts and where Human resources are depressed and demotivated.
God knows how the same government will be able to control , monitor and safeguard big entities created by merger of banks. GOI failed to control railways and telecom sector , how will they stop loot in these big entities is a big question.In absence of proper and adequate control big entities like Lehman Brothers, AIG in USA failed.As such the theory of "Too big to fail" propagated by learned FM Mr. Chidambram does not hold good in India where none of department functions honestly and effectively and where all offices and all departments are victim of political exploitation.
God knows how the same government will be able to control , monitor and safeguard big entities created by merger of banks. GOI failed to control railways and telecom sector , how will they stop loot in these big entities is a big question.In absence of proper and adequate control big entities like Lehman Brothers, AIG in USA failed.As such the theory of "Too big to fail" propagated by learned FM Mr. Chidambram does not hold good in India where none of department functions honestly and effectively and where all offices and all departments are victim of political exploitation.
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