After a series of whatsapp messages circulated on various groups on closure of nine banks, the Finance Ministry and the Reserve Bank asked consumers not to get swayed by such rumours. And more such news.
There was much relief in store for the banking sector this past week after Essar Steel’s case was dismissed by the Gujarat High Court on Monday.
This provided a big boost to banks which have filed cases against defaulting firms under the Insolvency and Bankruptcy Code (IBC). Now, there is a better chance they will be heard.
Additionally, the National Company Law Tribunal also decided to not give adjournments of beyond one week while hearing such cases. Loaded with multiple petitions filed under the insolvency and bankruptcy code (IBC), which became operational in December last year, the government and RBI will force the court to fast-track the proceedings.
Further, State Bank of India was asked by the NCLT to take the Monnet Ispat and Energy’s case with “seriousness” after there was confusion over its default and the amount.
The next day, NCLT admitted the case after SBI clarified the default amount to be Rs 1,539 crore, which would be claimed by the bank. Also, with SBI refusing to accept the offer terms of JSW Steel, which agreed to make an offer bid to buy the bad assets, the steel firm will be making a fresh offer.
No closure, Only merger!
After a series of whatsapp messages circulated on various groups on closure of nine banks, the Finance Ministry and the Reserve Bank asked consumers not to get swayed by such rumours. The nine banks are only put under supervision due to the weakness the bank is undergoing in the last one year
The government is also considering merger of several of the 21 public sector banks to reduce the number of banks to about 10-12 in a few years and about 3-4 big global banks eventually.
However, bank unions are not too pleased with the idea given that they are not too hopeful of mergers strengthening the weaker banks.
ICICI Bank, country’s largest private lender, started offering personal loans of up to Rs 15 lakh at ATMs for a fixed tenure of 60 months based on pre-checked CIBIL scores.
SBI and PE investor Carlyle Group announced that it would buy GE Capital Group’s entire 26 percent stake in SBI Card.
Following the transaction, SBI and Carlyle will own 74 percent and 26 percent, respectively, in each of the two entities. Further details of the transactions were not disclosed. According to reports, Carlyle was in talks to buy the 26 percent stake for Rs 2,000 crore.
Kotak and India Bank post financial results
On the results front, Kotak Mahindra Bank and Indian Bank reported their financial performance for the first quarter from April to June for fiscal year 2017-18.
Kotak posted a 23 percent year-on-year rise in its standalone June quarter net profit at Rs 913 crore.
Kotak has an exposure of Rs 236 crore to four of the 12 large bad loan accounts referred by the RBI to be filed at the NCLT on priority.
The mid-sized lender also said its shareholders have approved raising up to Rs 65,000 crore to fund business expansion.
While south-based Indian Bank’s profit increased 21 percent to Rs 372 crore in June quarter despite higher provisions, its asset quality improved during the quarter as gross non-performing assets declined to 7.21 percent from 7.47 percent and net NPAs declined to 4.05 percent from 7.39 percent.