BANKING SECTOR

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S N Rajeshwari appointed as CMD

Ms S N Rajeswari appointed as Chairman-cum-Managing Director in Oriental Insurance Company Limited (OICL) till the date of her superannuation i.e. 31.05.2022. Presently, she is working as GM, New India Assurance Company Limited (NIACL).

30 Jul 2020
government-to-privatise-half-of-the-state-owned-banks

Government to privatise half of the state-owned banks

The government is looking to privatize more than half of its state-owned banks to reduce the number of government-owned lenders to just five as part of an overhaul of the banking industry. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank leading to effective privatization of these state-owned lenders.

“The idea is to have 4-5 government-owned banks,” said one senior government official. At present, India has 12 state-owned banks. Such a plan would be laid out in a new privatization proposal the government is currently formulating, and this would be put before the cabinet for approval. However, India’s Finance Ministry declined to comment on the matter.

The government is working on a privatization plan to help to raise money by selling assets in non-core companies and sectors when the country is strapped for funds due to a lack of economic growth caused by the coronavirus pandemic. Several government committees and the Reserve Bank of India have recommended that India should have not more than five state-owned banks.

The government has already said that there will be no more mergers (between state-owned banks) so the only option for them is to divest stakes. Last year, the government had merged ten state-owned banks into four, creating a handful of larger banks in the process.

21 Jul 2020
s-n-rajeshwari-appointed-as-cmd

S N Rajeshwari appointed as CMD

By IndianMandarins 30 Jul 2020

Ms S N Rajeswari appointed as Chairman-cum-Managing Director in Oriental Insurance Company Limited (OICL) till the date of her superannuation i.e. 31.05.2022. Presently, she is working as GM, New India Assurance Company Limited (NIACL).

government-to-privatise-half-of-the-state-owned-banks

Government to privatise half of the state-owned banks

By IndianMandarins 21 Jul 2020

The government is looking to privatize more than half of its state-owned banks to reduce the number of government-owned lenders to just five as part of an overhaul of the banking industry. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank leading to effective privatization of these state-owned lenders.

“The idea is to have 4-5 government-owned banks,” said one senior government official. At present, India has 12 state-owned banks. Such a plan would be laid out in a new privatization proposal the government is currently formulating, and this would be put before the cabinet for approval. However, India’s Finance Ministry declined to comment on the matter.

The government is working on a privatization plan to help to raise money by selling assets in non-core companies and sectors when the country is strapped for funds due to a lack of economic growth caused by the coronavirus pandemic. Several government committees and the Reserve Bank of India have recommended that India should have not more than five state-owned banks.

The government has already said that there will be no more mergers (between state-owned banks) so the only option for them is to divest stakes. Last year, the government had merged ten state-owned banks into four, creating a handful of larger banks in the process.

npa-and-banking-crises-ex-rbi-governor-writes-a-book-titled-overdraft

NPA and banking crises: Ex RBI Governor writes a book titled Overdraft

By IndianMandarins 06 Jul 2020

Former RBI governor Urjit Patel has written a book titled ‘Overdraft: Saving the Indian Saver’ which will be releasing later this month. The book focuses on the non-performing assets (NPAs) issue that has afflicted Indian banking in recent years. Patel’s book description says that sovereigns do not need to earn or save before spending money. They can either print or borrow.

 

Patel worked with a ‘9R’ strategy which would protect depositors’ savings, rescue the banks and protect them from “unscrupulous racketeers”. Books or memoirs written by two of his immediate predecessors, Raghuram Rajan and D Subbarao had shed light on various subjects like the RBI’s autonomy, interest rates or its stance on demonetization.

cabinet-okays-bringing-cooperative-banks-under-rbi-supervision

Cabinet okays bringing cooperative banks under RBI supervision

By IndianMandarins 25 Jun 2020

The government will bring an ordinance to put all cooperative banks under the Reserve Bank of India supervision. This is an attempt to streamline them. This decision was taken in the cabinet which was announced by Union information and broadcasting minister Prakash Javadekar.

Now, around 1,482 urban cooperative banks and 58 multi-state cooperative banks will come under the supervisory powers of the RBI. The RBI’s powers as they apply to the scheduled banks will also apply to cooperative banks. This decision will give an assurance to more than 86 million depositors in these banks that their money amounting to Rs 4.84 lakh crore will remain safe.

uco-bank-signs-bancassurance-pact-with-sbi-life-for-insurance-solutions

UCO Bank signs ‘bancassurance’ pact with SBI life for insurance solutions

By IndianMandarins 24 Jun 2020

PSB UCO Bank has tied up with four insurers to offer various insurance products to its customers through its network of branches across the country. The lender teamed up with SBI Life Insurance Company, the Oriental insurance company and Religare insurance Company, Star Health and Allied insurance company for selling their products. With these new partnerships, the lender will now offer a way wider range of insurance products.

UCO Bank signs a ‘bancassurance’ pact with SBI life Insurance to supply insurance solutions to the purchasers of UCO Bank at its 3,086 branches spread across the country. Bancassurance is a partnership between a bank and an insurance firm, where the bank sells the tied insurance company’s insurance products to its clients.

dfs-asks-psbs-to-defer-avoidable-expenditure-in-view-of-covid-19

DFS asks PSBs to defer avoidable expenditure in view of COVID-19

By IndianMandarins 18 Jun 2020

The government has asked Public Sector Banks to defer avoidable expenditure including the purchase of staff cars and refurbishment of guest houses for more productive utilization of financial resources amid coronavirus pandemic.

Department of Financial Services (DFS) has issued a detailed advisory to heads of all PSBs saying it was necessary that banks take appropriate actions to ensure productive use of their financial resources for core business activities. The advisory comes against the backdrop of PNB recently purchasing three Audi cars worth over Rs 1.30 crore for travel of its top executives.

Banks are advised to defer avoidable expenditure beyond the current financial year, including the purchase of staff cars, except where unavoidable. DFS has also directed banks to postpone expenditure on decorative, non-functional items for the interiors in non-customer facing premises like administrative offices and back offices and refurbishment of guest houses.

Further, banks have been asked to effect a significant reduction in expenditure on activities other than those pertaining to core business activities. Besides, DFS has directed banks to avoid travel and adopt digital means of communication as well as make effective use of locally available administrative officers.

DFS, which comes under the finance ministry, has asked banks to place the advisory before their respective boards and issue appropriate instructions internally. In addition, DFS has directed banks for revision of entitlements and perquisites such as entitlements to fixed assets like vehicles and furniture and lease/ rent amounts admissible for hired residential accommodations.

merger-of-banks-to-be-effective-from-april-1,-2020

Merger of banks to be effective from April 1, 2020

By IndianMandarins 05 Mar 2020

Exercise of consolidation of 10 PSBs into four is on course and the merger will come into effect from April 1, 2020. Cabinet has given a go-ahead for the merger proposal with the government being in regular touch with these banks.

There will be no regulatory issues. The banks’ merger is on course and decisions have already been taken by the respective bank boards. The mergers are aimed at creating global sized banks in India.

This has been the biggest consolidation exercise in banking sector. The government in August 2019 announced mergers of public sector banks by bringing down their total number to 12 from 27 in 2017.

United Bank and Oriental Bank of Commerce will be merged with PNB; Syndicate Bank will be merged with Canara Bank; Allahabad Bank will be amalgamated with Indian Bank, and Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.

major-secretary-level-appointments-include-banking-secretary-air-india-cmd

Major Secretary level appointments include Banking Secretary & Air India CMD

By IndianMandarins 13 Feb 2020

The NaMo administration on Thursday effected a major bureaucratic rejig at the level of Secretary as follows:
  1. Debasish Panda (IAS:1987:UP) appointed as Secretary, Department of Financial Services (Secretary, Banking) vice Rajiv Kumar (IAS:1984:JH) upon his superannuation on 29.02.2020. Presently, he is Special Secretary, Department of Financial Services, Ministry of Finance.
  2. Ms. Usha Sharma (IAS:1985:RJ) appointed as Secretary, Department of Youth Affairs, Ministry of Youth Affairs and Sports. Presently, she is Director General, Archaeological Survey of India, Ministry of Culture.
  3. Rajeev Ranjan (IAS:1985:TN) appointed as Secretary, Department of Fisheries, Ministry of Fisheries, Animal Husbandry and Dairying vice Ms. Rajni Sekhri Sibal (IAS:1986:HY) upon her superannuation on 29.02.2020. Presently, he is Special Secretary, GST Council Secretariat, Department of Revenue, Ministry of Finance.
  4. Tenure of Parameswaran Iyer (Voluntarily Retired IAS:1981:UP) as Secretary, Department of Drinking Water and Sanitation (Ministry of Jal Shakti) was extended  for a further period of one year beyond 30.04.2020 i.e. upto 30.04.2021.
  5. Pawan Kumar Agarwal (IAS:1985:WB) appointed as Secretary, Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution. Presently, he is Chief Executive Officer, Food Safety and Standards Authority of India FSSAI).
  6. Saraswati Prasad (IAS:1985:AM) appointed as Secretary, National Commission for Scheduled Tribes in the rank and pay of Secretary. Presently, he is Special Secretary and Financial Adviser, Ministry of Steel.
  7. Rajiv Bansal (IAS:1988:NL) appointed as Chairman & Managing Director, Air India in the rank and pay of Additional Secretary. Presently, he is Additional Secretary, Ministry of Petroleum and Natural Gas. 

  8. Raj Kumar (IAS:1987:GJ) appointed as as Secretary, Department of Defence Production, Ministry of Defence. Presently, he is working as DG, Employees' State Insurance Corporation (ESIC).

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