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Monday, April 27, 2015

I Salute Modi For His Good Work

I salute Mr. Narendra Modi Prime Minister of India for his generous and quick response in time of all crisis Indian people faced in India and abroad. It is praiseworthy that Indian government have extended sincere , commendable and wholehearted services  to people of Bihar, People of Jammu and Kashmir and to Indians and foreigners in Yemen and Nepal .

There is no parallel to services rendered by armed forces during period of all crisis and credit goes to Government for ensuring timely and well monitored action to cope with crisis and to rescue people in crisis. There is no doubt that name of Mr. Modi will be mentioned in golden words and he will be appreciated all over the world for his performance and service to h8umanity without any bias to caste , community , region or country.

I am happy that Mr. Narendra Modi PM gives value to Durdarsan in all his meetings, foreign visits and various advertisements. Similarly he should try to give government business to BSNL and Indian Airlines. Thousands of crores of rupees related to various government schemes is deposited in current or savings accounts of private banks which enable private banks to earn hundreds of crore as extra profit. Modi should ensure that entire government fund is parked in government banks only. This will help in improving health of sick banks to some extent.

It is important to point out that if Rs1000 crore of government fund is deposited in Current account of a bank, bank can earn minimum Rs.100 crore per year out of this interest free fund.  As per my rough estimation , at least ten lac crore of government fund is parked in various banks in saving or current account. One may imagine the volume of loss caused by public banks if the same fund is parked in private banks.

It is true that government departments and PSUs prefer private banks because private banks offer better services at some places. But in majority of cases high value fund is parked by officials of government departments  in private banks when value of gifts offered by private banks and value of bribe money offered by officials of private bank to acquire large fund is higher  than that offered by officials of  public sector banks. It is not true that all branches of all Public banks are extending poor services.

Similarly if all public servants, ministers, MPs, MLAs, bankers, and employees of all public sector undertakings are forced to travel only by Indian Airlines , it will enable Indian airlines to earn hundreds of crore of rupees as additional profit. It is true  that public servants prefer travelling by private airlines only because it is cheaper and better than Indian airlines. Government should try to rationalise and regulate airfare and in no case premium fare should be allowed to charge passengers who book ticker during eleventh hour of their visit.

There is large scale corruption in government schools and colleges. There is proper infrastructure and no proper housekeeping of available infrastructure. Teachers employed in these schools though get higher salary do not teach in schools, do not take adequate classes and do not cover entire syllabus forcing students either to opt for private schools and colleges for better study or have alternative method of learning through coaching classes conducted by teachers of government schools or private schools and colleges. If state or central  government properly monitor teaching quality in government run schools and colleges , I think  not only literacy level of the country will increase in true spirit but quality of learning will also get boost up. Not only this , government will also have to stop unfair means used by students in examinations and illegal earning by  teachers in passing a student.

It is open secret that examiners of various school level or college level periodical examinations including recruitment test conducted for various post are not honest in setting of questions, in evaluation of answer sheets and in marking process during Interview process .In the recent past , people of India witnessed how unfair means were used during an examination held in the state of Bihar. I have no doubt that if examination is conducted in fair way, at least 90 percent of students will fail. I have no doubt that students who could not use unfair means during examination , will try their level best to bribe answer sheet evaluators . If state government of Bihar really want to stop corruption in evaluation of answer sheets, they will have to be strict and honest in their intention.

Youth seeking job arrange settings with Interview Panel Members through some mediators to ensure and guarantee clearance in Interview . Such type of setting is done not only for getting job in government schools, colleges, police departments , PSUs, PSBs and other government offices but the same tactics is applied by clever employees to get promotions to higher grade and higher scale.

If government want improvement in quality of education and quality of working in government offices, it will have to improve quality from schools where seeds of moral values are sown. It will have to ensure corruption free, transparent and seniority oriented promotion process in all offices to improve work culture and to stop flattery and bribery culture . It is easy to preach sermons and it appears soothing to delegate powers to higher bosses to pick up staff on merit basis only  . But in fact such delegation of power results mostly in exploitation of staff, misuse of staff for self interest. There is no doubt that power corrupts people and absolute power damages entire system and damage entire culture.

If we look into service quality and treatment quality available for patients admitted in government hospitals , we will have no doubt in our minds that these hospitals are used only by extremely poor families who cannot afford treatment in private nursing homes. Quality of  treatment, quality of medicines, quality of doctors , quality of nurses and other staff, quality of pathological test carried out in these hospitals and quality of infrastructure  , all are of extremely inferior nature and prone to cause death and greater loss to patients and care takers of patients who are admitted for treatments in these hospitals. These hospitals are normally used only for post mortem purposes or in accidental cases when private nursing homes avoid admission of such patients due to police oriented problems. There is no doubt that private nursing homes are of first preference for patients if one can afford it at its own or even by taking loan from friends and relatives. There is no control of charges recovered for various consultations, operations and pathological test in private nursing homes. Still people prefer private hospitals.

This is why people of India in general have lost trust in working , functioning and disposal quality of government run departments, offices, banks and all PSUs. Inspite of all promises by government banks , people prefer banking with private banks, students prefer admission in private schools, passengers prefer travelling by private airlines, consumers prefer landline phone connections and mobile SIMs from private telecom service providers and finally all patients prefer treatment at private nursing homes.

I hope Mr. Narendra
Modi will take care of points raised by me and take adequate corrective steps.


Govt renews search for five PSU bank chiefs; norms relaxed-Business Standard-26.04.2015

Age limit increased to 57 years, from 55, mandatory board-level experience reduced to one year, from three
As it continues its search for chiefs at five public sector banks, the government has relaxed eligibility criteria with regard to age and experience of applicants.

While the age limit has been increased to 57 years, from 55 years earlier, the mandatory board-level experience for the applicants has been reduced to one year, from three years previously.

The Department of Financial Services has invited applications till May 5 for the post of Managing Director-cum- CEO at five public sector banks -- Bank of Baroda, Bank of India, Canara Bank, IDBI Bank and Punjab National Bank.

"Officers of private as well as public sector banks with 45-57 years of age and Board level experience of at least one year meeting the criteria are invited to apply for these positions," the Department said in a notification.

Earlier, the Department had invited applications from eligible candidates in the age group of 45-55 years, with a minimum board-level experience of three years. The overall experience requirement of 15 years in the mainstream banking remains unchanged.

Out of these five banks, BoB, PNB and Canara Bank are without any full-time chiefs and executive directors have been given additional charge of MD and CEO.

Besides, heads of BoI and IDBI Bank are going to retire soon.

The Department also said that those having already applied in response to the earlier advertisement need not apply again.

According to sources, the government has relaxed the norms so as to give more numbers of candidates a chance to apply for these posts.

Earlier this year also, the Department had invited applications for top posts at these five banks.

Sources said that nearly 40 applications have been received in response to the earlier advertisement, out of which RBI has scrutinised 10-15 candidates.

For the first time, an external head-hunting agency is also believed to have been roped in to help in the further scrutinisation process.

This agency is likely to interact with these 10-15 candidates next week, sources said.

In January, the government decided to split the post of Chairman and Managing Director at PSU banks.

It has already appointed Managing Director and CEOs at four state-run banks -- United Bank and Oriental Bank of Commerce, Indian Overseas Bank and Vijaya Bank.

The MD and CEO will hold the office for a term of three years from the date of joining, subject to the age of superannuation at 60 years.

Low rainfall may affect bank non-performing assets-Livement

Non-performing loan ratio of agriculture loan portfolio could double for some banks
The asset quality of India’s agricultural credit could be significantly affected by crop damage due to untimely hail and rain in March, according to India Ratings and Research.
The non-performing loan (NPL) ratio of the agriculture loan portfolio could double for some banks, though the reduction of overall return on average assets (RoA) may be relatively muted at 3-6 basis points (bps; one basis point is one-hundredth of a percentage point). March was the wettest month in India in 48 years. States affected, in varying degrees, include Rajasthan, Madhya Pradesh, Gujarat, Jammu and Kashmir, Uttar Pradesh and Maharashtra, which make up the majority of wheat producing states in the country. Industry experts indicate that wheat output is predicted to fall by 8% due to the rains, which will be the largest decline in production since 2002.
The unseasonal rains immediately followed one of the weakest and most deficient (12%) monsoons that the country had experienced in FY15, which has heightened its effect. The situation may worsen if this year’s monsoon is also below normal. The Indian Meteorological Department estimates a 33% chance of the FY16 monsoon being 90% or below of normal. Banks have recently been extending agricultural loans rather aggressively, on account of the governments’ promotion of agricultural loans, and also given lower credit demand in other sectors. Regional banks with a large rural presence in the affected regions are at a high risk.
Credit growth to agriculture may slow down: Agriculture loans grew 16% year-on-year (y-o-y) in FY15 on account of the governments’ promotion of agricultural loans, and also lower credit demand in other sectors. Bank credit growth for FY15 (12.6% y-o-y growth for total credit) was driven by the agricultural sector, which contributed 25% to the incremental growth in the system between FY14 and first 11 months of FY15.
While the Union budget for FY16 has targeted 6.3% y-o-y growth in banks’ credit to the agriculture sector, actual growth may slow down as banks grapple with continuing deterioration in farm loan asset quality. A final picture will likely emerge in June based on the progress of the monsoon.
If the agriculture lending slows down, banks may have to shift their loanable funds to alternatives such as the Rural Infrastructure Development Fund to meet their priority sector requirements. The switch from the higher yielding agricultural loans to the development fund may affect profitability even further.
Asset quality and profitability impact: We estimate that system-wide agricultural non-performing assets (NPAs) as a percentage of total agricultural advances will rise to 16.9% by the second half FY16 from 13% in FY14 as a direct result of unseasonal rains. Heavily exposed individual banks may also see their agriculture NPA levels growing more than double.
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First step in PSU bank merger drill-The Telegraph 26t April 2015

New Delhi, April 26: The finance ministry is looking at the possibility of merging at least five state-run banks - from Andhra Bank, Bank of Maharashtra, Dena Bank, Punjab & Sind Bank, Vijaya Bank, and United Bank of India - with larger PSUs after their performance and bad asset levels improve.

The move has been recommended by the Working Group on Consolidation and Restructuring of PSBs (public sector banks).
Officials said smaller banks would be merged with larger banks, which needed a presence in regions where the smaller banks were strong.
The drive to create larger Indian banks stems from the need to comply with new Basel norms that would kick off by 2018 and create large entities capable of taking on competition from foreign banks with the opening up of the domestic financial sector.
Banks will need to raise almost Rs 4.5 lakh crore in Tier-1 capital, including Rs 2.4 lakh crore in equity capital, by March 2018 under the Basel III norms.

Officials said at present the focus would be on assessing the loan portfolios of small banks to help them exit businesses where they were not strong or were unprofitable. Subsequently, these banks would be asked to concentrate on particular segments.
"A re-assessment would be done and then a best-fit marriage might be looked at," said officials.
Earlier, the government had merged the State Bank of Hyderabad with the State Bank of India. There was also a move to merge some of the other SBI subsidiaries with the State Bank of Patiala seen to be next in the queue.

However, officials said such moves could take place only when the bank boards felt they were ready. Officials said the North Block would be studying various proposals for mergers among PSU banks.

"We would like banks that have branches in the south to merge with a bank with most branches in the north. However, issues such as a bank's work culture and level of integration will have to be taken into consideration before pressing for such mergers," an official said.

Besides Basel, domestic banks need to merge or organically grow into larger entities in the long term before the financial market is opened up to foreign banks.
US and European countries have long been demanding greater access to the Indian financial market in return for concessions in the services sector.
Officials said the next round of global trade talks as well as several free-trade pacts being negotiated would see demands for the opening up of the financial sector.
The government has in the past toyed with the idea of merging the associates of the State Bank of India with it or creating an "SBI-2" by merging some of these associates. Some associates such as the State Bank of Indore were merged with the SBI in the past.

The smaller unlisted subsidiaries are almost 100 per cent owned by the SBI and merging them should not pose any major problem as their functioning is similar to that of the parent.
The move, officials said, will create a larger SBI, giving the country's largest bank much more financial muscle.

Loss-making PSU banks have been similarly merged with the profitable ones to create larger entities.To nudge the banks, the government has already decided that only profitable banks with a good performance record will be recapitalised.

A provision of Rs 9,555 crore has been made this fiscal for the recapitalisation of PSU banks, including the National Bank for Agriculture and Rural Development, the Export-Import Bank of India, India Infrastructure Finance Company and Small Industries Development Bank of India.

Last year, a provision of Rs 11,200 crore had been made for recapitalisation, but a mere Rs 6,990 crore was infused into banks, including the SBI, Bank of Baroda, Punjab National Bank, Canara Bank and Syndicate Bank.
However, officials cautioned that mergers and acquisitions can be brought about only if trade unions agreed to go along as agitations and strikes might affect operations.

Bank Board Bureau’s ambit to widen to financial sector PSUs-Financial Express
The proposed  Bank Board Bureau (BBB) — with a mandate to select public sector bank (PSB) chiefs, revamp PSB boards and devise consolidation strategies — would have a larger scope than envisaged and will now be Financial Services Sector Board Bureau (FSSBB).
The FSSBB would look into appointments at the top management and board level in all financial sector PSUs falling under the department of financial services (DFS) in the finance ministry, official sources told FE. The proposed board would also make recommendations for mergers and acquisitions/consolidation wherever needed, they added.

It will also look into matters relating to extension /termination of services and performance appraisal, besides building a data bank of the industry’s best professionals for recruitment. There will be focus on training programmes for top management and board level officials, besides bringing out a model code of conduct and ethics, the sources said.

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