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Punjab National Bank has roped in Virat Kohli as brand ambassador to improve its image. New Delhi: State-owned Punjab National Bank has roped in Indian test skipper Virat Kohli as brand ambassador to improve its image which has taken a hit due to rising bad loans.

On the occasion Kohli said ‘PNB is Mera Apna Bank’ as he has been an account holder of the bank since the age of 16 years.

“Today PNB is seen as a complete universal bank. Virat Kohli, an energetic young sportsman having mass appeal to the youth of our country has been chosen as brand ambassador who comes with qualities like determination, focus and for whom winning is a habit,” the bank said in a statement.

Since its inception in 1895, it said, PNB has been people’s bank serving millions of customers throughout India.

Over the years, PNB has grown from strength to strength and has established itself as a major player in Indian banking space, it said, adding, the bank has remained a trusted name in banking, attending to all the segments of the society.

For the first quarter ended June, the bank’s profit declined by a 58 per cent to Rs. 306 crore on account of mounting bad loans.

During the quarter, provision towards non-performing assets (NPAs) have jumped almost three-fold to Rs. 3,620 crore from Rs. 1,291 crore in the same period a year ago.

The Gross NPAs rose significantly to 13.75 per at the end of June 2016, from 12.9 per cent in the year-ago period. The net NPAs too rose to 9.16 per cent against 8.61 per cent in June 2015.

In absolute terms, the gross NPAs of the bank more than doubled to Rs. 56,654.09 crore from the year-ago levels.

[“source-ndtv”]

The finance minister’s comments came a day after he reviewed the performance of the PSU banks. Faridabad: Highlighting the importance of financial discipline, Union Finance Minister Arun Jaitley on Saturday said the non-performing assets (NPAs) issue is a result of “lack foresight of financial management”.

Highlighting the importance of fiscal prudence, the minister also said that the governments must strike a balance between “populism” and “financial discipline”.

“One of the reasons why the FRBM (Fiscal Responsibility and Budget Management) targets in India were statutorily brought in was really because in public life and politics, there was always a conflict between populism and financial discipline.”

“Populism is when you act on the spur of the moment and make a sound-good noise which pleases the audience of the day. You earn a few brownie points, and whether you earn votes on that account is still a doubtful proposition. But at the end of the day, you find your accounts have gone haywire and the financial management itself has suffered,” he said in his address at the convocation function at the National Institute of Financial Management.

Mr Jaitley said the underlying principal behind this financial management was that everybody must learn to live within their means.

“Living strictly within means for governance or business purposes is too conservative a target,” he said, adding, “If you want to expand, you can’t do so merely on the strength of savings. You also do it on the strength of debt. But then you have to borrow as much as you can service.”

Referring to the United States’ sub-prime crisis which shook the world, he said: “Whenever the world has seen any sort of crisis, it is when you disproportionately borrow and the asset quality to support that borrowing itself goes down…even in relation to some of our sectors, the NPA issue is a result of lack of foresight in financial management.”

The finance minister’s comments came a day after he reviewed the performance of the public sector banks.

“You expand disproportionately, take debt disproportionately, the capacity of the business to service that debt itself is inadequate,” he noted.

Mr Jaitley advocated “borrowing only such amounts that you are able to service, not to leave the next generation heavily in debt”.

[“source-ndtv”]

SBI chief Arundhati Bhattacharya is the current chairperson of SBI, which has close to 16,500 branches. New Delhi: The government is considering giving a one-year extension to State Bank of India chief Arundhati Bhattacharya amid the lender’s consolidation with its associate banks.

“There is a need for continuity at a time when the process of consolidation is going on,” sources said.

In this regard, the government is looking at the proposal of granting extension to the current chairperson whose three-year term comes to an end this month, sources added.
The government has also received views of the Bank Board Bureau (BBB) on the extension issue and an order in this regard is expected in the next few days, according to sources.

Earlier this year, the Cabinet gave its nod for the merger of State Bank of India (SBI) and its associate lenders and Bharatiya Mahila Bank (BMB) which would make the state-owned lender a global-sized bank.

SBI has five associate lenders – State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.

Among the associate banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.

The merged entity will become a banking behemoth, which could compete with the largest in the world, with an asset base of Rs. 37 lakh crore or over $555 billion, 22,500 branches and 58,000 ATMs. It will have over 50 crore customers.

SBI had said that all its associate banks and BMB will be merged into it that will add an additional Rs. 8 lakh crore to its assets.

Currently, SBI has close to 16,500 branches, including 191 foreign offices across 36 countries.

SBI first merged State Bank of Saurashtra with itself in 2008. Two years later, State Bank of Indore was merged with it.

[“source-ndtv”]

Raghuram Rajan’s term as governor of the RBI ended earlier this month. New York: Having returned to his “ultimate home”, former Reserve Bank of India Governor Raghuram Rajan has resumed his role as Distinguished Service Professor of Finance at the University of Chicago Booth School of Business and would teach international corporate finance there in winter of 2017.

Giving details of Mr Rajan’s ‘course schedule’ for 2016-17, Chicago Booth School said this course will explore the challenges of corporate finance and investment in a more integrated global economy.

“How should one optimally organize the location of production, control, and financing? What kinds of new concerns emerge when the whole world, rather than just one’s domestic economy, become the arena of decision making?”

“How does decision making depend on the environment one is doing business in? Most students will see this as an alternative to the case course in corporate finance, but some could see it as a complement,” it said about Mr Rajan’s course.

Mr Rajan, who was hailed as a ‘rockstar central banker’ soon after assuming charge at Reserve Bank of India in September 2013 but often landed in controversies during the three-year tenure with his outspoken views, had earlier said he would return to academia after leaving the RBI.

He was on leave from Chicago University, with which he has been associated since 1991, during his tenure at the RBI.

While announcing his decision to return to academia on end of his tenure at RBI, Rajan had said his “ultimate home is in the realm of ideas”.

Mr Rajan, whose vocal comments on various occasions including economic, political and social issues often led to controversies and were also seen as being critical of the Modi government at times, has also said he would be back in India for lectures and other public events after a “break”.

Interestingly, the Chicago Booth School has listed “Indian politics” among Mr Rajan’s interests, besides tennis, squash and history.

Giving further details, the Chicago Booth School said the format Mr Rajan’s course would include discussions, case studies and “ethics discussion/comment”.

“The course will be based on a set of readings and cases… Grades will be based on class participation, case-write-ups, and an exam,” it added.

The business school has also named two forthcoming publications of Mr Rajan – one on “the Corporation in Finance’ and the other jointly with Douglas Diamond on ‘Illiquid banks, Financial Stability, and Interest Rate Policy’.

Between 2003 and 2006, Mr Rajan had also served as chief economist and director of research at the International Monetary Fund (IMF).

As per Chicago Booth School, Mr Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it.

Mr Rajan, who is credited to have predicted the global financial crisis of 2008, is also a member of the Group of Thirty and was the president of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences.

[“source-ndtv”]

New Delhi: Markets regulator Sebi on Monday exempted the government from making an open offer pursuant to to its acquisition of additional 7.75 per cent stake in Syndicate Bank under a capital infusion plan.

Among others, the exemption granted is subject to few conditions such as the acquisition should be in compliance with the Companies Act and any other applicable law.

The Government of India already holds 65.17 per cent shares in Syndicate Bank. Post acquisition, government’s stake will go up to 72.92 per cent.

“The proposed acquisition is necessitated on account of the GOI’s objective that all public sector banks are adequately capitalised for ensuring compliance with BASEL III norms,” the Securities and Exchange Board of India said.

As per Sebi’s Takeover regulations, no entity can acquire more than five per cent of the additional shares or voting rights within any financial year unless the acquirer makes a public announcement of an open offer for acquiring shares of the target company.

Granting exemption, Sebi said there will be no change in control of Syndicate Bank pursuant to the acquisition as the change will only be in the manner of holding the shares by the Government.

Further, there will be no change in the number of equity shares held in the bank, by the public shareholders, pursuant to the proposed transactions, it added.

The government in July had proposed capital infusion of Rs. 1,034 crore in Syndicate Bank, out of which Rs. 776 crore was to be infused immediately, in lieu of a proposed preferential allotment of approximately 10.60 crore equity shares.

This was subsequently approved by the Board of Directors of the bank in August.

The infusion of additional capital by the government will enable the bank to maintain a capital over and above the minimum requirement mandated under Basel III norms and will also provide the bank with additional leverage for raising further equity capital  at a later date, as and when the need arises, Sebi said.

[“source-ndtv”]

New Delhi: Life insurance companies’ business from new premium rose by 59 per cent to Rs. 14,285.20 crore in August this year.

The 24 life insurers had clocked in Rs. 8,982.59 crore as new business premium during the same month a year ago.

Of the total business generated from new premium in August, LIC – Country’s largest and the only state-owned life insurer – garnered Rs. 10,713.55 crore, 92 per cent higher than year ago’s Rs. 5,587.67 crore.

The data were released by the Insurance Regulatory and Development Authority of India (Irdai).

The rest of the new business premium of Rs. 3,571.65 crore was generated by 23 private insurers, up 5.2 per cent from August 2015.

Among the private life insurance companies, SBI Life registered a growth of 54.6 per cent in new premium at Rs. 822.28 crore in August 2016 and ICICI Prudential Life’s business grew 13.7 per cent at Rs. 732.81 crore.

New collection of Max Life rose 23.9 per cent to Rs. 253.05 crore and Bajaj Allianz witnessed a rise of 24.4 per cent at Rs. 187.85 crore, showed the Irdai data.

Future Generali Life’s new business premium increased by 52.4 per cent to Rs. 21.62 crore while that of DHFL Pramerica Life were higher by 24.9 per cent at Rs. 68.11 crore.

However, HDFC Standard Life registered a fall of 1.67 per cent in new business during the month at Rs. 546.34 crore and Reliance Nippon Life’s business slumped 83 per cent at Rs. 58.43 crore.

Others registering fall in new collection included Birla Sun Life at Rs. 122.05 crore (from Rs. 181.44 crore); Star Union Dai-Ichi Lifeat Rs. 35.61 crore (from Rs. 49.19 crore) and Aegon Life Rs. 4.54 crore (against Rs. 12.76 crore).

The cumulative new business during April-August of all the 24 life insurers rose 29.6 per cent at Rs. 59,468.75 crore.

LIC’s business till August rose 35.8 per cent to Rs. 44,045.69 crore and the private life insurers clocked a cumulative new business premium of Rs. 15,423 crore, up 14.8 per cent from year ago.

[“source-ndtv”]

Raghuram Rajan has stepped down as RBI governor, with deputy governor Urjit Patel taking over. Mumbai: Raghuram Rajan warned countries against a rush to low interest rates as his tenure as the governor of the Reserve Bank of India came to an end.

Mr Rajan, who famously predicted the 2008 global financial crisis, told the New York Times that central banks across the world would find it hard to raise rates again for fear this “would see growth slow down”.

Mr Rajan, 53, said low interest rates should not be an alternative to reforms that may be needed to boost growth, according to the paper.

Interest rates are low across many major economies, including in the US, Europe, and Japan – where rates are in negative territory – but they have yet to stimulate a sluggish global economy.

“Often when monetary policy is really easy, it (low interest rates) becomes the residual policy of choice,” the newspaper quoted Mr Rajan as saying, adding that “other instruments of policy” may be needed to encourage economic growth.

Mr Rajan, who was immensely popular amongst the Indian public and media during his tenure, officially stepped down on Sunday, with deputy governor Urjit Patel taking over.

Mr Rajan was widely credited with bringing inflation down in India, stabilising the rupee and creating a stable environment for growth.

He slashed interest rates to their lowest level since 2011 but angered some in the ruling Bharatiya Janata Party (BJP) who wanted deeper cuts intended to boost growth further.

The former RBI governor, who returns to a life of academia in Chicago, told the New York Times in the article published on Sunday he did not think that was the reason his three-year-term was not renewed by the government.

In a separate interview with the Financial Times, Mr Rajan predicted that his reforms, including setting inflation targets and tackling bad bank loans, would continue.

“Broadly speaking, I think we have sort of unfrozen an older equilibrium and moved the system towards a new equilibrium. My sense is that momentum cannot be and will not be arrested,” he told the paper.

 
[“source-ndtv”]

Raghuram Rajan hoped that India will finish the process of bank clean-up. New Delhi: Warning against low interest rates, the Reserve Bank of India’s departing governor Raghuram Rajan has said such measures by central banks cannot substitute other policy instruments and broader reforms, and expressed hope that his successor will finish the process of cleaning bank balance sheets.

In an interview to the New York Times published on Monday, Mr Rajan hoped that the country will finish “the process of bank clean-up, which is under way”.

The RBI undertook an asset quality review of banks by issuing blanket orders to classify loans to certain accounts as non-performing assets (NPAs). The provisions led to record losses by lenders and Mr Rajan set them a deadline of March 2017 to get done with the clean-up act.

Gross non-performing assets ratio has shot up to 7.6 per cent from 4.2 per cent in September 2013 while the overall stressed assets are estimated to be over 14.5 per cent, almost double the level when he took over.

Mr Rajan, who demitted the office as RBI governor on September 4, cautioned that low interest rates globally could distort markets and will be difficult to abandon.

Countries around the world, including the US and Europe, have kept interest rates low as a way to encourage growth, but countries could become “trapped” by fears that when they eventually raised rates, they “would see growth slowdown”, he said.

Low interest rates should not be a substitute for “other instruments of policy” and “various kinds of reforms” that are needed to encourage growth, he said, adding that “often when monetary policy is really easy, it becomes the residual policy of choice…when deeper reforms are needed”.

The statement assumes significance as central banks around the world appear to be at a loss about how to get global growth moving again.

Mr Rajan, who predicted the 2008 global financial crisis, also rejected claims that tight policy stance followed by him was the reason behind the government not obliging him with a second term.

“I don’t think it’s fair to say that it’s because of tight policy that the government wanted to move on,” he said.

He was ably assisted by his deputy – now his successor Urjit Patel – in keeping a tight leash on inflation, earning criticism from the industry as well as others, including many BJP functionaries.

He said his successor played an important role in setting the country’s tough inflation targets.

Defending his tight monetary policy, he said it had helped bring down the rate of inflation – currently about 6 per cent – to the upper end of the government’s target range.

“I think we’ve done exactly what was needed,” Mr Rajan said, adding that the central bank should continue to prioritise low inflation.

Mr Rajan rocked too many boats while heading the RBI – earning ad hominem attacks and also open criticism by those wanting him to be faster with rate cuts and much slower on cleaning the balance sheets of banks.

But those showering him with bouquets were numerous too, giving him titles like ‘Rockstar Rajan’ and ‘Bond of Mint Street’, which he himself appeared to acknowledge by once remarking: “My name is Rajan and I do what I do.”

On Indian economy, he offered a less-than-ringing endorsement of the government’s emphasis on manufacturing in India – what the Prime Minister has called his Make in India campaign.

Mr Rajan said he did not support the view of critics that it was too late in world economic history for India to become a manufacturing hub. But he also said he would not focus exclusively on manufacturing as the solution to joblessness.

If India improves infrastructure and reduces government regulations, manufacturing might take off in a big way, but it “could also be services. It could be value-added agriculture also”.

Although China’s economy has overshadowed India’s in recent decades, Mr Rajan said he is still a believer in democracy as the better system to create long-term growth.

“India’s strengths to some extent come also from its democracy. Things can get bad in India, but not beyond a certain point, because the democratic process asserts itself. And we have a change in government,” he said.

 
[“source-ndtv”]

Former RBI Governor Raghuram Rajan’s tenure at the central bank ended this month. New York: Former RBI Governor Raghuram Rajan, whose tenure at the central bank ended this month, hopes the process of cleaning up banks in the country will be finished and government will continue to prioritise “low inflation”, even as he warned against low interest rates globally.

Dr Rajan, who stepped down on September 4 as India’s top central banker, said in an interview with the New York Times that he hoped the country would finish “the process of bank cleanup which is underway.”

He also noted that his tight monetary policy has helped in bringing India’s rate of inflation — currently about 6 per cent — down to the upper end of the government’s target range.

“I think we’ve done exactly what was needed,” he said adding the central bank should continue to prioritise low inflation.

A new warning also came from the central banker at a time when the world’s central banks appear to be at a loss about how to get global growth moving again. Dr Rajan warned low interest rates globally could distort markets and would be difficult to abandon.

With countries around the world, including the United States and Europe, having kept interest rates low as a way to encourage growth, he said countries could become “trapped” by fear that when they eventually raised rates, they would see the growth slow down.

Low interest rates should not be a substitute for “other instruments of policy” and “various kinds of reforms” that are needed to encourage growth, Dr Rajan said.

Dr Rajan also disputed the view that his tight monetary policies had cost him the support of the government, and said his departure was based on his inability to reach an agreement with the government on serving longer but not serving another full three-year term.

“I don’t think it’s fair to say that it’s because of tight policy that the government wanted to move on,” he said.

Citing government’s move after he announced his departure to set a low inflation target of 4 per cent for the next five years, he said his successor Urjit Patel played an important role in setting the country’s tough inflation targets.

He also stressed that democracy is a better system to create long-term growth.

“India’s strengths to some extent also comes from its democracy,” he said, adding “things can get bad in India, but not beyond a certain point, because the democratic process asserts itself and we have a change in government.”

Dr Rajan will return to his longtime job as a professor at the University of Chicago’s business school. Comparing the job of central bank governor with his past, Dr Rajan said “so better to be a doer than an adviser. Of course being an adviser sometimes has effects, important effects, but you don’t see it as much immediately. Here you can see what you are doing and in the years to come.”

 
[“source-ndtv”]