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<ul><li>According to a study done by Prime Database, 118 companies out of top 500 companies still haven’t appointed a woman director on their board as is required by law. </li><li>11 top Indian banks feature in the list, an industry which once had many prominent women running the show. </li><li>Top 500 companies have to appoint women directors on their board by April 1, 2019. </li></ul> For a long time, India’s private banking sector has been led by women even when it wasn’t a law. However, India’s state-owned banks have consistently lagged in giving women a chance. Even today, when SEBI mandates companies to appoint have at least one woman director on their board, 10 out of 21 Indian <keyword id="153602" type="PERSON" weightage="20" keywordseo="Government-banks">government banks</keyword> don’t have one. Marquee names like Canara Bank, Bank of India, Indian Bank, Union Bank of India, Indian Overseas Bank, UCO Bank, Vijaya Bank, Andhra Bank, United Bank of India and Dena Bank have failed to comply with the law. Under Section 149 of the Companies Act 2013, every company needs to have at least one woman director. Last year, <a href="https://www.moneycontrol.com/news/business/companies/sebi-wants-one-woman-independent-director-in-top-500-listed-companies-is-it-feasible-2539047.html">SEBI</a> had directed all top 500 companies to imply the same by April 1, 2019. Government banks can’t complain that there aren’t enough skilled women leaders as their private sector peers have been steered by women for years now. This is a reflection of the glass ceiling in public companies in India. The Indian <keyword id="34494" type="PERSON" weightage="20" keywordseo="banking-industry">banking industry</keyword> had leaders like Arundhati Bhattacharya of State Bank of India, Chanda Kochhar of ICICI Bank, Shikha Sharma of Axis Bank and Usha Ananthasubramanian of Allahabad Bank, who once found themselves in every list of top <keyword id="7273119" type="UNKNOWN" weightage="20" keywordseo="women-in-banking">women in banking</keyword>. However, since then they have either resigned from their position or have been embroiled in scams/controversies leading to a forceful exit. Government banks are not alone. The gender bias in India spans across sectors. According to the data released by Prime Database, <a href="https://economictimes.indiatimes.com/jobs/many-companies-still-to-induct-woman-independent-director/articleshow/67733197.cms">118 </a>companies out of the top 500 in India are yet to appoint a woman director on their board. See Also: <a href="https://www.businessinsider.in/gender-wage-pay-gap-women-graduate-in-india-earns-24-less-than-her-male-counterpart/articleshow/64460159.cms" style="">Gender wage pay gap: Women graduate in India earns 24% less than her male counterpart</a> <a href="https://www.businessinsider.in/only-18-women-made-it-to-this-years-forbes-list-of-100-highest-earning-indian-celebrities/articleshow/66955722.cms" style="">Only 18 women made it to this year’s Forbes list of 100 highest-earning Indian celebrities</a> <a href="https://www.businessinsider.in/an-all-women-driving-school-is-becoming-a-key-to-freedom-in-an-indian-city/articleshow/67317478.cms" style="">An all-women driving school is becoming a key to freedom in an Indian city</a>

10 out of 21 government banks do not have a woman director

The finance ministry on Thursday said public sector banks (PSBs) have extended support of Rs 2.56 lakh crore to NBFCs by way of credit and pooled buyout since September 2018 as part of efforts to provide much-needed liquidity to the sector. Further, under the partial guarantee scheme, PSBs have been accorded sanction to purchase Rs 21,580 crore worth of pooled assets as on October 16, the ministry said in a status report of various stimulus measures announced since August 23 to boost sagging economic growth which hit a six-year low of 5 per cent during the first quarter of the current fiscal. To address the stress in the sector, Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> in the Budget proposed that public sector banks would purchase high-rated pooled assets of financially sound NBFCs, amounting to a total of Rs 1 lakh crore, during the current financial year. For this, the government will provide a one-time six months' partial credit guarantee to PSBs for first loss of up to 10 per cent. The finance minister announced several short and long-term measures to boost the economy in three phases between August 23 and September 14, it said. Out of the total 44 measures announced, 16 have been fulfilled, it said, adding the rest of the announcements are under active consideration by relevant ministries. Further, it said action on one out of three announcements made for the <keyword id="35061" type="DOMAIN" weightage="20" keywordseo="housing">housing</keyword> sector has been completed and the other two are being taken up. In respect to GST refund to MSMEs within 30 days, it said a refund drive was organised and the tax department paid Rs 10,490 crore or 97 per cent of total pending amount of Rs 10,841 crore. In order to spend Rs 100 lakh crore for developing modern infrastructure over five years, a Task Force under the chairmanship of the economic affairs secretary has been constituted. It will draw up a National Infrastructure Pipeline for each of the years from FY 2019-20 to FY 2024-25. So far, 12 meetings of the Task Force have been held and deliberations with 17 ministries/departments have been completed. The finance ministry has effected upfront release of capital to PSBs, with Rs 60,314 crore being infused in banks in September 2019 through recapitalisation bonds, including Rs 4,557 crore in <keyword id="6357560" type="DOMAIN" weightage="20" keywordseo="idbi-bank">IDBI Bank</keyword>. With regard to boosting exports, it said the RBI issued orders on September 20, 2019 for enhancing sanction limits for eligibility of export credit under priority sector lending from Rs 25 crore to Rs 40 crore per borrower and removing overall turnover limit of Rs 100 crore. The integrated refund module along with single disbursement has been deployed with effect from September 26, it said. Giving details of announcements implemented, it said e-assessment scheme has been launched, relief has been given from enhanced surcharge on long-term/short-term capital gains and angel tax provisions for startups and their investors have been withdrawn. DP ABM

Government banks are bailing out shadow banks with Rs 2.5 lakh crore

<ul><li>The Indian government has decided to merge 10 state-owned banks into four, a move that has been cheered by many market participants.</li><li>These mergers can be a challenging process and take at least until April 2020 to materialise, according to CLSA.</li><li>In the meantime, competing banks will gain market share as the 10 banks focus on executing the mergers and consolidating the business and not on growing the franchise.</li><li>These expectations from the brokerage are based on similar mergers that have taken place in recent years.</li></ul>The Indian government has decided to merge 10 state-owned banks into four, a move that has been cheered by many market participants. As a part of the merger, Punjab National Bank (PNB) will be merging with Oriental Bank and United Bank which will be the second largest public sector bank in India. While PNB will retain its identity as the anchor bank, it will be ‘acquiring’ the other two smaller banks. Canara Bank will merge with Syndicate Bank to become the fourth largest bank. Union Bank of India will subsume with Andhra Bank and Corporation Bank to turn into the fifth largest state-owned bank. Indian Bank and Allahabad Bank will also merge to become the seventh largest public sector bank. However, despite these moves, the country's largest lender, the State Bank of India, may emerge as a big winner. This may help SBI's share price that is reeling near a six-month low at this point. Even the private banks like ICICI Bank, HDFC Bank, and Axis Bank, may gain more customers despite the reach of their government peers in the time that these proposed mergers are executed. The following expectations from the brokerage are based on similar mergers that have taken place in recent years. 1. The mergers may be effective from April 1, 2020. The merger of Bank of Baroda, Vijaya Bank, and Dena Bank was announced around mid-September 2018 and was effective by April 1, 2019. 2. Generally growth suffers during the merger process but over the medium-term consolidation of infrastructure does improve profitability. 3. Low-cost savings and deposits grow faster than loans and advances. 4. The investors in anchor banks-- in the current scenario PNB, Canara Bank, and Indian Bank-- will get a better deal in the merger. This will offset some of the pain and price erosion of having to share the burden of weaker banks. Bank of Baroda shareholders had an advantage of 8-9% in the share swap deal during the merger with VIjaya Bank and Dena Bank. 5. Between the merger announcement and the listing of merged shares, Bank of Baroda, Vijaya Bank, and Dena Bank underperformed the PSU-bank Index, and SBI fared better. 6. With many PSU banks focussed on merger and integration, SBI and private banks will be better placed to gain market share. SEE ALSO: <a href="https://www.businessinsider.in/business/indian-government-merges-ten-public-sector-banks-to-form-four-large-entities/articleshow/70910392.cms" data-type="tilCustomLink" target="_blank">Indian government decides to merge ten public sector banks to form four large entities</a>

SBI and private banks may gain customers from India's government banks' mergers

<ul><li>The <keyword id="1197189" type="ORGANIZATION" weightage="20" keywordseo="Indian-Bankers-Association">Indian Bankers Association</keyword> (IBA) has decided to distribute one month’s extra salary to public sector bank employees.</li><li>The bank unions are unhappy that they were not consulted on this decision despite ongoing negotiations around wage revision. </li><li>Some bankers are also unhappy with the move since it means paying more income tax.</li></ul>Public sector bank employees in India are owed a wage revision from two years ago. Instead of the much awaited hike, the Indian Bankers Association (IBA) decided to dole out an ad hoc amount of one month’s salary. New salaries for employees in public sector banks have been due since 1 November 2017. Negotiations were initiated in June 2017 and in the last meeting, which took place on 17 September 2019, the negotiating committee proposed a 12% hike in wages — but no conclusive agreement has been reached yet. In the interim, banks’ staff will get a raise, meant for the entire year, and this will be equivalent to a month’s salary along with a 12% hike, according to documents seen by Business Insider. This payout has been timed such that employees have additional cash ahead of the key festive season of Diwali and Dussehra. Any bank employee who joined after 1 November 2017 will only be getting an ad hoc amount equalling to 15 days’ salary. Bank unions unhappy with decision All India Bank Officers' Confederation (AIBOC) isn’t happy with the IBA’s decision to compensate by giving out a month’s salary. They claim that they were not consulted on this decision. The IBA’s decision to disburse an ad hoc “undermines the very existence of trade unions” and “underestimates the quality and character of bank employees,” according to the AIBOC in a statement. The arrears were distributed as scheduled on 4 October 2019 by the State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB) and UCO Bank. Other banks distributed the ad hoc arrears one day later. Due to the union’s reaction, these banks decided to give bankers the choice to opt in or opt out of accepting the arrears. This takes the responsibility for the ad hoc amount off the bank’s plate and on to individuals. The bankers conundrum It should be noted that these arrears are not bonuses but will be adjusted against the actual payable amounts after the outcome of the ongoing wage negotiation talks. The ad hoc wages will also be adjusted for income tax and other statutory deductions. This could complicate matters for staffers and officers who did not fall into the taxable income bracket before the addition of the ad hoc amount, but will now be subject to income tax. See also: <a href="https://www.businessinsider.in/sbi-and-private-banks-will-gain-customers-due-to-the-latest-news-on-psu-bank-mergers-says-clsa/articleshow/70942009.cms">SBI and private banks may gain customers from India's government banks' mergers</a> <a href="https://www.businessinsider.in/business/news/public-sector-banks-in-india-to-have-uniform-timings-across-all-states-starting-today/articleshow/71386948.cms">Public sector banks in India to have uniform timings across all states starting today</a>

Here's why the staff at India's government banks are not happy with the salary hike ahead of the festive season

<ul><li>Five years on, their combined market value increased by ₹2.2 trillion, which is significantly lower than the invested value </li><li>Nine of 19 PSBs reported current value of investment higher than the investment amount. </li><li>This year, the central bank has cut interest rates thrice by a net 100 basis points or 1% (before this week’s rate cut), but banks passed on only 29 basis points of this benefit to customers. </li></ul> The Government of India and the country’s largest insurer LIC made a losing bet on Indian public sector banks (PSBs). In the last five years, both of them invested a massive ₹3 trillion into 19 such banks. Five years on, their combined market value increased by ₹2.2 trillion, which is significantly lower than the invested value, said a report by India Ratings and Research. “Nine of 19 PSBs reported current value of investment higher than the investment amount. The key banks among them are Indian Bank, State Bank of India, Bank of Baroda,) and Canara Bank,” said the report. A large chunk of the market value contribution, by around 53% came from the country’s largest bank, SBI. When the government kicked off its ‘Indradhanush’ (meaning Rainbow) plan to recapitalise banks, they were not looking out only for a return on their investment. They also wanted banks to push credit growth in a country where growth has been slowing down. The Quicksand Unfortunately, loss-ridden banks with toxic loans dragging them down, could neither help themselves nor consumers, and definitely not the country’s economy. “In reality, the capital infused was largely consumed to tide over losses resulting from provisions required on non-performing assets,” the report said, calling it a quicksand. This has been the case with Reserve Bank of India’s (RBI) interest rate cuts as well. In the last one year, the central bank has cut interest rates thrice by a net 100 basis points or 1%, but banks passed on only 29 basis points of this benefit to customers, swallowing most of it to fill their own money pit. This month, the central bank cut interest rates by another 35 basis points and promised to take “<a href="https://www.businessinsider.in/business/rbi-policy-update-asks-banks-to-cut-lending-rates/articleshow/70567837.cms">whatever steps necessary </a>to make banks pass them on”. Kickstarting the economy Like the government, RBI also wants to push for growth, as it predicts that it will fall top 6.9% this year, below their earlier estimates. Yet, helping banks to ensure <a href="https://www.businessinsider.in/business/india-gdp-growth-may-fall-below-7-says-crisil/articleshow/70481459.cms">growth is </a>not a strategy that is working. Whatever little credit growth that India saw came from private and foreign banks, shadow banks and mutual funds. In fact, the share of state-owned banks in total loans fell from around 61% to 46.5%, in the last five years in spite of government support. India Ratings suggests that PSBs should look at management overhaul, lengthen the tenure of top management, bringing in private sector leaders and link their pay with stock performance. “Without structural reforms in place, the government will have to continue to inject capital into banks in times of stress, which will strain its own finances and hinder efforts for fiscal consolidation,” the rating agency said.

Indian government’s ₹3 trillion gift to banks ended in a money pit

Mumbai, Jun 11 () The Reserve Bank on Thursday came out with a discussion paper to improve governance in commercial banks by adequately empowering their boards to effectively deal with issues like risk management, conflict of interest and supervisory oversight of senior staff. Among other things, the discussion paper bats for greater power to the bank boards, separation of ownership from management and setting up of proper risk management strategy. "The objective of the discussion paper is to align the current regulatory framework with global best practices while being mindful of the context of domestic financial system," the RBI said. Stakeholders can send their comments on the discussion paper by July 15, 2020. The paper said that growing size and complexity of India's financial system underscores the significance of strengthening governance standards in banks. Recent events in a dynamic and rapidly evolving financial landscape have led to increasing scrutiny of the role of promoter(s), major shareholder(s) and senior management vis-a-vis the role of a board. "In the context where management plays the role of an agent of a board and the board in turn plays the role of an agent of shareholders, governance failures have brought to fore the impact of quality of governance on efficiency in allocation of resources, protection of depositors' interest as well as maintaining financial stability," it said. The bank board, as per the discussion paper, should set the culture and values of the organisation; recognise and mange conflict of interest; set the appetite for risk and manage risks within the appetite; and improve the supervisory oversight of senior management. On the responsibilities of the board, the paper said, "A fundamental component of good governance is a culture of reinforcing appropriate norms for responsible and ethical behaviour." "These norms are especially critical in terms of a bank's risk awareness, risk-taking behaviour and risk management. To promote a sound culture, the board shall reinforce the 'tone at the top'," it said. It further said there should be a code of conduct or comparable policy which shall define acceptable and unacceptable behaviour. The board should have a formal written 'conflicts of interest' policy and an objective compliance process to ensure implementation of the policy. Also, "the board shall take an active role in defining the risk appetite, ensuring its alignment with the bank's strategic, capital, financial plans and compensation practices." The board should approve an approach, oversee the implementation of key policies pertaining to the bank's capital adequacy assessment process including capital raising plans, liquidity plans, compliance policies/ obligations, and the internal control system, it said. The paper also talks about the qualification and selection process of board members. It further said the board should constitute a Nomination and Remuneration Committee (NRC) made up of only non-executive directors (NEDs). It also said the board of directors of a bank should comprise not less than six directors and not more than 15 directors with majority being independent directors. NKD CS ABM ABM

RBI floats discussion paper on governance in banks

Mumbai, Aug 16 (IANS) The Government of Singapore has increased its stake in ICICI Bank as it took up 11.08 per cent stake in the latest qualified institutional placement (QIP) of the bank's shares with an investment of Rs 1,662.71 crore. This takes the stake of the Government of Singapore in the bank to 13.2 per cent. As of the quarter ended, it had 2.12 per cent stake in the private lender, according to the data on the BSE website. In a regulatory filing, the bank said that the Government of Singapore was offered over 4.64 crore shares in the QIP amounting to 11.08 per cent stake. It emerged the largest investor in the latest qualified institutional placement of the bank's shares. ICICI Bank has raised nearly Rs 15,000 crore through the allotment of equity shares under its QIP. The bank issued around 41.9 crore equity shares at an issue price of Rs 358 per equity share. --IANS rrb/sn/dpb

Government of Singapore increases stake in ICICI Bank

<ul><li>Over 90% of education loans are provided by public-sector entities in India, according to the Reserve Bank of India. </li><li>For most PSUs and private banks, there is no security or marginal requirement value upto ₹400,000 loan amount. </li><li>The <keyword id="6360098" type="UNKNOWN" weightage="20" keywordseo="Education-loan">education loan</keyword> market witnessed a 25% dip in the last four years — with 250,000 students availing education loan as on March 2019.</li></ul>Most private banks now lend only to students enrolling in the partnered universities including Indian Institute of Technology (IITs), Indian Institute of Management (IIMs) and National Institute of Technology (NITs). In spite of that, a large chunk of education loans are provided by state-owned entities. Over 90% of education loans are provided by public-sector entities in India, according to the <a href="https://timesofindia.indiatimes.com/business/india-business/edu-loans-in-india-shrink-25-in-4-yrs/articleshow/69490291.cms">Reserve Bank of India</a> data. This may also be due to the lower interest rates offered by the public sector undertakings. The State Bank of India (SBI) offers upto ₹4 million loan, which is valid for a year after the completion of the course. The interest rate applicable on the loan ranges from 8.6% to 10.7% per annum. Others like Punjab National Bank (PNB) and Andhra Bank have no cap on the loan amount, with interest rates varying from 8.4% to 11.5%. While the private entities — HDFC Credila and South Indian Bank — offer slightly higher interest rate on education loans. HDFC Credila’s interest rates stand at over 12.55% on loans above ₹100,000. The South Indian Bank has interest rates between 9% to 16% on education loans. For most PSUs and private banks, there is no collateral (security or marginal requirement value) upto ₹400,000 loan amount. However, banks do require a collateral security of up to 5% for the loans exceeding the given amount. Drop in Loans In the larger picture, the education loan market witnessed a 25% drop in the last four years — with only 250,000 students availing education loan as on March 2019, TOI <a href="https://timesofindia.indiatimes.com/business/india-business/edu-loans-in-india-shrink-25-in-4-yrs/articleshow/69490291.cms">reported</a>. This is due to the increased defaults in this sector, adding to <keyword id="126418" type="ORGANIZATION" weightage="20" keywordseo="non-performing-assets">Non Performing Assets</keyword> (NPA) of banks. Indian banks saw a rise in education loan defaults, with the number of bad loans in education increasing from 7.3% to 9% in 2014, according to <a href="https://www.businessinsider.in/study-abroad-education-loans-in-india-see-rise-in-defaults/articleshow/68095265.cms">Indian Banks Association</a>. The Indian government is now stepping up its efforts to address challenges in the education sector. The expenditure on education has <a href="https://economictimes.indiatimes.com/industry/services/education/education-spend-rose-to-4-6-of-gdp-target-6-javadekar/articleshow/68245671.cms">reportedly</a> increased from 3.8% of GDP in 2014 to 4.6% in 2018, according to Prakash Javedekar, Union Human Resource Minister. See also: <a href="https://www.businessinsider.in/study-abroad-education-loans-in-india-see-rise-in-defaults/articleshow/68095265.cms">More Indian students are defaulting on their overseas education bank loans: Report</a> <a href="https://www.businessinsider.in/modi-government-announces-50-million-scholarship-for-minority-students/articleshow/69750288.cms">Indian government introduces ₹50 million scholarship for minority students — dedicating half of it to girls</a> <a href="https://www.businessinsider.in/budget-2019-what-is-eligibility-for-education-loan/articleshow/67734560.cms">Applying for an education loan? Here’s what you need to know</a>

Indian students are still relying on government banks for education loans

<ul><li>The government has reportedly asked the RBI to draw up a list of banks that can be merged as well as a possible timeframe for their consolidation. </li><li>The move is a response to the deteriorating asset quality of smaller, weaker banks and follows the successful absorption of five associate banks by the SBI last year. </li><li>Currently, government-owned banks account for 90% of bad loans despite owning less than 70% of the banking system’s assets.</li></ul>In its annual report yesterday, the Reserve <keyword id="6355303" type="DOMAIN" weightage="20" keywordseo="bank-of-india">Bank of India</keyword> (RBI) cautioned that the bad loan crisis could continue in the coming years. The central bank expects the <keyword id="919276" type="PERSON" weightage="20" keywordseo="non-performing-loan">non-performing loan</keyword> ratio, which is currently 12.1% of all loans, to rise this fiscal year. This is mostly owing to unfavourable economic conditions such as sluggish credit growth and a less-than-expected pickup in industrial activity. Amid talk of <a href="https://www.businessinsider.in/india-wants-to-establish-a-mega-asset-manager-to-tackle-its-bad-loan-problem/articleshow/64838159.cms">an asset management company </a>and the launch of Project Sashakt, the Indian government is also focused on what it thinks is a tried-and-tested solution to mitigate the crisis and improve governance: bank mergers. The Indian government has reportedly asked the RBI to draw up a list of banks that can be merged as well as a possible timeframe for the consolidation. All 21 public-sector banks will be under consideration. Currently, government-owned banks account for 90% of bad loans despite owning less than 70% of the banking system’s assets. In June 2018, reports emerged that the government was mulling a merger between <a href="https://www.livemint.com/Industry/PFZf4q3BtZ7quULf3tj88N/Govt-weighs-merger-of-Bank-of-Baroda-IDBI-Bank-Oriental-Ba.html">four heavy lossmakers</a> - Oriental Bank, Central Bank, Bank of Baroda and <keyword id="6357560" type="DOMAIN" weightage="20" keywordseo="idbi-bank">IDBI Bank</keyword>. The state-owned insurer, LIC, was eventually “instructed” to take a majority stake in the latter. The case of SBI The enthusiasm for bank mergers follows the successful absorption <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/five-associate-banks-to-merge-with-sbi-from-april-1/articleshow/57314900.cms">of five associate banks</a> by the <keyword id="6354731" type="DOMAIN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> in April 2017. The impetus behind the merger was to reduce the costs of the smaller banks and shore up their balance sheets. Just like the SBI merger, the government wants larger banks to acquire smaller banks that aren’t well-capitalised and are hurting from a pile-up in bad debts. The merged entity subsequently benefits from a larger capital base and a buffer against risk and liquidity issues. It also becomes better-equipped to take on private sector banks, which is important because public-sector banks have continually been losing market share to their private counterparts. The RBI currently has 11 public-sector banks under its prompt-corrective action framework, which imposes credit extension limits and restructuring requirements. Additionally, a lower number of government-owned banks will also reduce the resources needed for regulatory oversight.

The Indian government wants to merge more public-sector banks

New Delhi, Mar 6 () The RBI superseding the board of Yes Bank casts light on governance risks in India's banking sector, Fitch Ratings said on Friday.Fitch said there is a risk that the already poor operating environment for the banking sector could suffer further impairment if the government's efforts to tackle problems in the bank fail to provide reassurance to depositors and investors."The Reserve Bank of India (RBI) takeover of Yes Bank casts light on governance risks in India's banking sector," Fitch Ratings, which has a negative outlook on India's banking sector, said in a statement.The central bank's takeover of Yes Bank appears intended to restore depositor confidence."However, we believe that there is a risk that the RBI's move could backfire if it prompts depositors to shift their money to institutions that are perceived to be safer. This could pose liquidity challenges, particularly for smaller private banks with weaker franchises or more limited access to support from parent entities," Fitch added.The global rating agency said it is also possible that the domestic wholesale debt markets may experience another crisis of confidence, resulting in a tightening of financing conditions. "This could overshadow the central bank's recent efforts to boost liquidity in the system, and thereby expose non-bank financial institutions and the real estate sector to further pressures," it said.Stating that the speed of the authorities' resolution of the situation at Yes Bank is likely to be an important factor in determining the reaction of depositors and financial markets, it said the onus ultimately falls on the regulator to orchestrate the process under powers provided by the RBI Act, which outlines voluntary or forced mergers as the available options.Yes Bank is a medium-sized private sector bank, which accounts for around 2 per cent each of system assets and deposits. The bank ran into trouble following the central's bank's asset quality reviews in 2017 and 2018, which led to sharp increases in its impaired loans ratio and uncovered significant governance lapses that led to a complete change of management. The bank subsequently struggled to address its capitalisation issues, against a background of sluggish economic growth and a tougher financing environment, Fitch added.The Reserve Bank on Thursday imposed a moratorium on the capital-starved Yes Bank, capping withdrawals at Rs 50,000 per account and superseded the board of the private sector lender with immediate effect.Yes Bank will not be able to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.As per RBI's draft reconstruction scheme, State Bank of India will pick up 49 per cent stake in the crisis-ridden Yes Bank under a government-approved bailout plan. JDMKJ

Crisis at Yes Bank highlights governance risk in India's banking sector: Fitch

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">REUTERS/Dominic Ebenbichler A man rides his bike past a tower located in Lake Reschensee on a hot summer day in the northern Italian village of Graun August 2, 2013. </div></div></div>MILAN (Reuters) - Italian banks are near saturation point after two years spent frantically buying their own government's bonds, forcing the Treasury to find alternative investors at home and abroad to finance a 2-trillion euro debt.
Lenders' ability to soak up yet more Italian sovereign debt depends largely on the European Central Bank - which in turn says <keyword id="21474" type="COUNTRY" weightage="60" keywordseo="Italy">Italy</keyword> is crucial to the fate of the entire euro zone.
In the coming year the ECB will make strict health checks on banks across the bloc, including a provisional 15 inItaly. It must also decide whether to roll over billions of euros in cheap long term loans which the banks have used profitably to accumulate government bonds, but fall due in early 2015.
Both events will determine how much domestic banks can keep up their support for the Treasury which was vital when the euro zone's third biggest economy teetered on the brink of a Greek-style debt crisis in 2011 and foreign investors fled.
Much is at stake. The ECB has made clear that Italy must tackle its debt and economic problems for the greater good.
"Its fate will critically determine the fate of the euro area," ECB board member Joerg Asmussen said last month. "In this sense, the future of the euro area will not be decided in Paris or Berlin, or in Frankfurt or Brussels. It will be decided in Rome.
During the euro zone crisis, the ECB launched two long-term refinancing operations (LTROs), showering banks with cheap three-year loans. Italian lenders used these to load up on higher-yielding government bonds, propping up their profits which had been hit by recession.
In August, they held 397 billion euros ($538 billion) in Italian government bonds, near a record 402 billion in June. This is nearly double what they had at the end of 2011, meaning they used most of the 255 billion in LTRO funds borrowed from the ECB in 2011 and 2012 to buy their own government's paper.
<h3>SKETCHY DETAILS</h3>
The banks may have to start shrinking these large portfolios. The LTRO loans must be repaid in January and February 2015 and the cheap long-term funding will dry up unless the ECB decides to repeat the exercise, which it staged to help the banking system through the depth of the crisis.
Another factor will be the ECB's asset quality review. Last month it promised to put top euro zone banks through rigorous tests. These aim to unearth risks hidden on balance sheets before it starts supervising the lenders under the European Banking Union project.
It will use Basel III global banking rules, under which sovereign bonds are classified as risk-free, even though the crisis showed that in the case of governments such as Greece's this was far from the case. This means banks do not have to set aside extra capital to cover for any losses on government debt.
However, the European Banking Authority may also consider exposure to sovereign debt when it conducts tests of banks' ability to withstand future crises in a parallel exercise, although details are still sketchy.
"We wondered if the heaviest users of LTRO, and thus most exposed to sovereigns, would be given an informal nudge to reduce these balances," Morgan Stanley analysts wrote.
Italy's budget deficit is relatively modest and should stay within the European Union's limit next year. {ID:nL6N0I63AJ}
However, the huge size of its existing debt means it has to borrow heavily to roll over bonds that come due. If domestic banks do pull back, the Treasury will need new borrowers.
Italian think-tank Prometeia says it will have to target mostly households and foreign investors to sell an estimated 65 billion euros in new debt in 2014. "The banking sector will hardly be able to absorb such an amount," it said in a report.
Hit hard by the crisis and forced to boost their capital base, Italian banks are shutting hundreds of branches, shedding 19,000 jobs and cutting back on lending as Italy battles with its deepest recession since World War II.
One of the few things banks kept investing in was Italian bonds. Prometeia's analysts say sovereign debt holdings now total 10 percent of Italian banks' assets, double the share in 2007 and a little higher than the equivalent for Spanish banks.
Prometeia says Italian banks now hold 22 percent of the country's debt, below the Spanish level of 39 percent but still high as Italy's debt is more than twice Spain's.
<h3>FOREIGN DEMAND</h3>
After threatening to spiral out of control in late 2011 and reaching dangerous levels again in mid-2012, Italian government funding costs have fallen due to an ECB promise to preserve the euro. Foreigners have resumed buying the bonds of weaker euro zone issuers despite persistent political instability in Italy.
Foreigners bought nearly two thirds of a seven-year bond last month. Bidders even came from countries such asLebanon, Malta, Latvia and Libya.
That trend needs to continue next year. "It will be crucial that foreigners increase their buying of Italian bonds," said Intesa Sanpaolo strategist Chiara Manenti. Foreigners hold just over a third of Italy's debt, or 690 billion euros, down from more than 800 billion in mid-2011.
The treasury is also looking to attract wealthy Italian households with new four-year bonds tied to domestic inflation, called BTP Italia, that have so far raised 44 billion euros.
The next issue of the BTP Italia is scheduled for this week and analysts target a takeup of around 10 billion euros.
When the banks scooped up government bonds, they were not acting merely out of patriotism. By reinvesting the cheap ECB loans into the high-yielding debt, they were able to offset a sharp drop in income from lending.
A Deutsche Bank report last week estimated that such carry trades will make up 20 percent of 2013 net interest income - a measure of a bank's profitability - of Intesa Sanpaolo <ISP.MI>, Italy's biggest retail lender.</ISP.MI>
That figure rises to 23 percent for Banco Popolare <BAPO.MI> and 26 percent for Banca Popolare di Milano <PMII.MI>, two cooperative lenders, according to the report.</PMII.MI></BAPO.MI>
Intesa's domestic government bond portfolio has more than doubled over the past two years to 65 billion euros at the end of June. But analysts say that banks will need to rely less on carry trades and more on making their traditional businesses profitable - and that means cutting costs.
(additional reporting by Eva Taylor in Frankfurt; editing by David Stamp)

Italian Banks Are Near Their Saturation Point On Government Debt

<div class="image-container float_right" style="width:400px"><div class="image"></div><a href="http://images.newscred.com/e27ef3bc8a69da1d031bbadf271f3801?width=700&amp;height=393">Dibyangshu Sarkar/AFP </a></div><keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword>'s public-sector banks and many government offices were shut Thursday on the second day of a general strike called to protest against the government's planned pro-market reforms.
Eleven unions called the strike in protest at the measures which they condemn as "anti-poor" and likely to cost jobs and raise prices.
While the impact of the stoppage was patchy and felt mainly in heavily unionised state institutions, analysts said it underscored discontent among workers.
"The government must sit down with the workers and hear them out because it cannot afford to ignore this class any more with general elections due in 2014," Shubha Singh, a New Delhi-based political analyst and writer, told AFP.
The reforms include opening the retail, insurance and aviation sectors wider to foreign investment in a bid to spur a sharply slowing economy.
They also involve raising prices of subsidised diesel and reducing the number of discounted cooking gas cylinders to reduce a ballooning fiscal deficit.
Leaders of two main leftist parties said they were boycotting the opening session of parliament on Thursday in solidarity with the strikers.
The government is already under pressure over an economy growing at its weakest pace in a decade and widespread allegations of corruption.
The Associated Chambers of Commerce and Industry has estimated losses from the two-day stoppage at more than 200 billion rupees ($3.7 billion).
Attendance at government offices was thin and many education institutes were closed as teachers' unions joined the strike. Universities cancelled exams set for Thursday.
Operations at India's state-run banks were also halted.
Top carmaker Maruti, which has a history of labour unrest, declared a holiday to avert trouble while two-wheeler manufacturer Hero MotorCorp gave workers a day off.
The All India Trade Union Congress said millions of workers were taking part in the strike and called on them to keep up pressure on the government, already facing a hostile opposition in parliament.
But most privately-run factories reported normal operations and financial markets were open in Mumbai.
Police said dozens of people were arrested after protests turned ugly in an industrial hub near New Delhi on Wednesday when a mob threw stones, vandalised factories and set several vehicles on fire to enforce the strike.
<div class="nc_footer">
Copyright (2013) AFP. All rights reserved.
</div>

Strikes Have Paralyzed India's Banks And Government Offices

The redesigned $100 note is scheduled for release on October 8th. Due to the enhanced security features "it only takes a few seconds to check the new $100 note and know it's real," according to <a href="http://www.newmoney.gov/uscurrency/redesigned100.htm" target="_blank">Newmoney.gov</a>, a website affiliated with the <a href="http://www.federalreserve.gov/" target="_blank">Federal Reserve Board</a>,<a href="http://www.treasury.gov/Pages/default.aspx" target="_blank">Treasury Department</a> and <a href="http://www.secretservice.gov/" target="_blank">U.S. Secret Service</a>.
Check out a decade's worth of research and development that went into America's newest <keyword id="6355272" type="CITY" weightage="60" keywordseo="Bank">bank</keyword> note.:
Blue 3-D Security Ribbon: The blue ribbon to the right of Benjamin Franklin is woven instead of printed on the paper. Tilt the note back and forth and the blue ribbon shows "Liberty like bells" transforming into "100s," When you tilt the note back and forth, the bells and "100s" will move side to side. Tilt the bill side to side, and the images move up and down. 
<div class="KonaFilter image-container display-table"><div><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div></div>
Raised Printing: Stroke Benjamin Franklin's left shoulder and it will feel rough to the touch due to an enhanced <a href="http://en.wikipedia.org/wiki/Intaglio_(printmaking)" target="_blank">intaglio printing</a> process. 
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
Serial Numbers: Each note has a unique combination of 11 numbers and letters that appears on the front of the bill twice. These specific and original serial numbers aid law enforcement in identifying counterfeit notes.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
Bell Hiding in an Inkwell: Inside the copper-colored inkwell is a bell that changes from copper to greenish hue when tilted.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div> 
Portrait Watermark: Hold the note to light and look for a faint image of Benjamin Franklin in the blank space to the right of the portrait. The image is visible from either side of the note. 
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
Security Thread: If you hold the note up to light you will see an embedded thread of the letters 'USA' and the number '100' running vertically on the note. Under ultraviolet light the thread glows a pinkish hue.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div> 
Look for the Gold: There is a large gold numeral '100' on the back of the note. This addition is designed to help individuals with visual impairments to read the denomination.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div> 
And some other features, not tied specifically to security:
New Color: The background color is a pale blue but don't rely on this feature to check the note's authenticity. Instead, scroll down to check out how the serial numbers aid against counterfeiting.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
American Symbols of Freedom: U.S. symbols of freedom addition includes phrases from the Declaration of Independence and the quill used by the Founding Fathers to sign the document.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
 
<keyword id="6355253" type="ORGANIZATION" weightage="60" keywordseo="Federal-Reserve">Federal Reserve</keyword> Bank Indicator: The <a href="http://www.federalreserveonline.org/" target="_blank">Federal Reserve System</a> is represented by a universal seal that is to the left of Benjamin Franklin's portrait. A letter and number identifies the issuing Federal Reserve Bank - there are <a href="http://www.federalreserve.gov/otherfrb.htm" target="_blank">12 regional Federal Reserve Banks</a> and <a href="http://www.federalreserve.gov/branches.htm" target="_blank">24 branches</a> located in major U. S. cities.
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>
 
Printing Locator: The new $100 notes are printed in either Washington, D.C., or Fort Worth, Texas. If the bill is printed in Fort Worth, it will have a small 'F.W.' in the top left corner on the front of the note. 
<div class="KonaFilter image-container" style="width:450px"><div class="image"><a href="http://www.newmoney.gov/uscurrency/redesigned100.htm">Newmoney.gov</a></div></div>

Check Out The Sophisticated Features Of The New $100 Bill

<div class="KonaFilter image-container float_right"><div class="image on-image">REUTERS/ Jason Reed</div></div>It looks as though we're heading for a <keyword id="469382" type="UNKNOWN" weightage="60" keywordseo="government-shutdown">government shutdown</keyword>.
Our Brett Logiurato <a href="http://www.businessinsider.com/government-shutdown-obamacare-delay-house-gop-plan-senate-2013-9">has the full story</a>, but essentially negotiations are too far apart right now and the parties may simply run out of time. 
Some think that this drama will ultimately end like previous shutdown showdowns, with Democrats and Republicans finding a way to muddle through a deal in the 11th hour.
Ethan Harris at <keyword id="6374849" type="CITY" weightage="60" keywordseo="Bank-of-America">Bank of America</keyword> has the one paragraph that will have you praying they find a way to do so:
<div class="page" title="Page 5">
<div class="layoutArea">
<div class="column">
As in the past, we worry that if they do cross the Rubicon-and start a shutdown-what will get them to turn back? If they have decided that the political calculus is in their favor, what will make them decide it no longer is? In our view, it might require either a major popular outcry or a major stock market correction. Recall that as the fiscal cliff approached at the end of last year, one popular view was that the fiscal cliff was really a "slope"-it would impact the economy slowly and that any damage could be easily reversed. That kind of attitude is what could cause a really damaging sustained shutdown. 
Democrats believe that the public will blame intransigent Republicans if the government shuts down. Determined to use this opportunity to weaken Obamacare, the GOP believes that the public will put the blame on the president here.
Neither party has blinked yet. Let's hope Harris is wrong and it doesn't take a "major stock market correction" to get Washington moving.
</div>
</div>
</div>

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