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New Delhi: The central government has approved the appointment of a new Chairman and <keyword id="19899229" type="General" weightage="20" keywordseo="Managing-Director" source="keywords">Managing Director</keyword> of the <keyword id="19934368" type="General" weightage="100" keywordseo="State-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="State Bank of India" meta.hostid="261" meta.entityid="State Bank of India">State Bank of India</keyword> (<keyword id="19898108" type="General" weightage="20" keywordseo="sbi" source="keywords">SBI</keyword>) as the current Chairman, <keyword id="20944427" type="General" weightage="20" keywordseo="Dinesh-Kumar-Khara" source="keywords">Dinesh Kumar Khara</keyword>, is set to retire on August 28. According to a notification by the Department of Personnel &amp; Training, the Appointments Committee of the Cabinet (ACC) on August 6 approved the proposal of the Department of Financial Services for the appointment of <keyword id="22230591" type="General" weightage="20" keywordseo="Challa-Sreenivasulu-Setty" source="keywords">Challa Sreenivasulu Setty</keyword> as chairman of SBI. The ACC has approved the appointment of Setty, 59, the current Managing Director (MD) of SBI as the new Chairman of the country's biggest lender, for a period of three years, effective from the date he assumes office, on or after August 28, 2024. The government order states, "The Appointments Committee of the Cabinet (ACC) has approved the proposal of the Department of Financial Services for the appointment of Shri Challa Sreenivasulu Setty (DOB: 26.09.1965), Managing Director (MD), State Bank of India (SBI) as Chairman, SBI for a period of three (03) years w.e.f. the date of assumption of charge of the office, on or after 28.08.2024." Additionally, Rana Ashutosh Kumar Singh, the current Deputy Managing Director (DMD) of SBI, has been appointed as the new Managing Director. His appointment will take effect from the date he assumes office. The government order read, "The Appointments Committee of the Cabinet (ACC) has approved the proposal of the Department of Financial Services for appointment of Shri Rana Ashutosh Kumar Singh, Deputy Managing Director (DMD), State Bank of India (SBI) as Managing Director (MD) in SBI with effect from the date of assumption of office." According to SBI, Challa Sreenivasulu Setty joined the Board of SBI as Managing Director in January 2020 and currently oversees International Banking, Global Markets, and Technology wings of the Bank. He has previously headed the Retail &amp; Digital Banking vertical and various task forces/committees formed by the Government of India. Setty holds a Bachelor of Science in Agriculture and is a Certified Associate of the Indian Institute of Bankers. He began his career with SBI in 1988 as a Probationary Officer. Over his three-decade-long career, he has gained rich experience in corporate credit, retail, digital, and international banking, as well as banking in developed markets. Setty has also held key positions within SBI, including Deputy Managing Director - Stressed Assets Resolution Group, Chief General Manager, and General Manager in the Corporate Accounts Group, Deputy General Manager in the Mid-Corporate Group, and Vice President &amp; Head (Syndications) at SBI's New York Branch. (ANI)

Centre approves appointments of new Chairman, Managing Director of State Bank of India

New Delhi, <keyword id="1457214" type="General" weightage="80" keywordseo="mastercard-india" source="Orion">Mastercard India</keyword> on Thursday announced the appointment of former <keyword id="13222" type="General" weightage="50" keywordseo="sbi" source="Orion">SBI</keyword> head <keyword id="254056" type="General" weightage="50" keywordseo="rajnish-kumar" source="Orion">Rajnish Kumar</keyword> as its non-executive chairman. In this critical, non-executive advisory role, Kumar will guide <keyword id="6368201" type="General" weightage="100" keywordseo="mastercard" source="Orion">Mastercard</keyword>'s South Asia executive leadership team led by <keyword id="693741" type="General" weightage="50" keywordseo="gautam-aggarwal" source="Orion">Gautam Aggarwal</keyword>, Division President for South Asia &amp; Country Corporate Officer, India, in navigating the vibrant domestic payments landscape, Mastercard India said in a statement. "Kumar will be keenly involved in augmenting the local leadership team in its efforts to expand our domestic footprint, while bolstering Mastercard's ongoing commitment to forging strategic partnerships with stakeholders across the payments ecosystem - from banks to fintechs to governments, non-profits and more," said Ari Sarker, President, Asia Pacific, Mastercard. With its relentless focus on partnering for progress and driving prosperity through inclusive growth, Mastercard has the technologies, capabilities, resources, and heart to contribute greatly to India's vibrant payments technology landscape, Kumar said.

Mastercard India appoints former SBI head Rajnish Kumar as its chairman

New Delhi, A petition has been filed in the <keyword id="19895345" type="General" weightage="20" keywordseo="supreme-court" source="keywords">Supreme Court</keyword> seeking contempt action against the <keyword id="19934368" type="General" weightage="20" keywordseo="state-bank-of-india" source="keywords">State Bank of India</keyword> (SBI) alleging it "wilfully and deliberately" disobeyed the apex court's direction to submit details of contributions made to political parties through electoral bonds to the Election Commission by March 6. The plea, filed by two NGOs, claimed SBI's application seeking extension of time till June 30 to disclose the details of electoral bonds encashed by political parties has been deliberately filed at the last moment to ensure that details of donor and the amount of donations are not disclosed to the public before the upcoming <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> elections. A bench headed by Chief Justice <keyword id="19936357" type="General" weightage="20" keywordseo="d-y-chandrachud" source="keywords">D Y Chandrachud</keyword> on Thursday took note of the submissions by advocate <keyword id="20027334" type="General" weightage="20" keywordseo="prashant-bhushan" source="keywords">Prashant Bhushan</keyword>, who appeared on behalf of NGOs Association for Democratic Reforms and Common Cause, that he wanted initiation of contempt proceedings against the SBI. Bhushan said the SBI's application is likely to be listed on March 11 and the contempt application should also be heard together with it. "Please send an e-mail. I will pass the order," the CJI said. The SBI moved the top court on March 4 seeking extension of time till June 30 to disclose the details of the electoral bonds that were encashed. In a landmark verdict on February 15, a five-judge constitution bench of the apex court had scrapped the Centre's electoral bonds scheme of anonymous political funding, calling it "unconstitutional" and ordering disclosure by the Election Commission of the donors, the amount donated by them and the recipients by March 13. Ordering closure of the scheme forthwith, the top court had directed the SBI, the authorised financial institution under the scheme, to submit by March 6 the details of the electoral bonds purchased since April 12, 2019 till date to Election Commission (EC), which will publish the information on its official website by March 13. In the contempt plea, the NGOs have said that two days before the expiry of the stated deadline, the SBI has filed an application seeking time till June 30 to comply with the directions. "It is submitted that the said application is mala fide and demonstrates a wilful and deliberate disobedience &amp; defiance of the judgement passed by the constitution bench of this court. It is further a clear attempt to undermine the authority of this court," it said. "The petitioner herein is filing the instant petition seeking initiation of contempt proceedings against State Bank of India for wilfully and deliberately disobeying the order dated February 15 passed by this court... wherein this court directed SBI to submit details of contribution made to the political parties through electoral bonds to the Election Commission of India by March 6," it said. It said the affidavit supporting the SBI's application has neither been sworn by the chairman or the managing director of the bank. It said SBI has the record of the unique number allotted to each electoral bond and the know your customer (KYC) details of its purchaser. "The requirement of the KYC is mentioned in section 4 of the EB scheme itself, therefore, the SBI is well aware of the identity of purchasers of each electoral bond," the plea said. It said as per clause 7 of the electoral bond scheme, information furnished by the buyer can be disclosed when demanded by a competent court. "As per clause 12 (4) of the scheme, electoral bonds have to be encashed within fifteen days failing which the amount of bonds not encashed are to be deposited by the bank to the PM relief Fund. Thus, it is inconceivable that SBI does not have the recorded information readily available within its data base," it said. The plea said electoral bonds are "completely traceable" which is evident from the fact that SBI maintains a secret number-based record of donors who buy bonds, and the political parties they donate to. It said as per information received through RTI, in 30 phases of electoral bonds sale, only 19 out of 29 SBI authorised branches sold electoral bonds and 14 SBI branches encashed them. "The data available as on January 2024 further shows that only 25 political parties had opened their account and are eligible for encashing electoral bonds. Therefore, compiling of this information should not be difficult as the system is already in place," it said. "It is mandatory that SBI furnishes all information relating to electoral bonds within stipulated time frame given by this court as voters will not be able to exercise their informed opinion properly during Lok Sabha 2024 if complete information about EBs is not shared with them," it said. The plea said any form of anonymity in the finances of political parties goes against the essence of participatory democracy and people's right to know enshrined under Article 19(1)(a) of the Constitution. It said availability of information about electoral bonds will give voters a chance to truly inspect, express and decide their choices. "This defiant approach of the SBI towards citizen's 'right to know' about huge sums of money received by parties through electoral bonds and corporates in a non-transparent and unaccountable manner is reprehensible and betrays its clear motive to stifle citizen's voice and right to audit actions of the political class, and therefore it should be held as serious breach of contempt by this court," it alleged.

Electoral bonds: Plea seeks contempt action against SBI for disobeying SC's order

Bankers welcomed Finance Minister <keyword id="129243" type="General" weightage="80" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword>'s budget proposals as being growth accretive, and hailed the focus on capital expenditure while continuing with fiscal consolidation. On the critical question of revival in private capital expenditure, which has been lagging for several years now, private sector lender <keyword id="13918428" type="DOMAIN" weightage="20" keywordseo="kotak-mahindra-bank" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="kotak mahindra bank" meta.entityname="Kotak Mahindra Bank Ltd." meta.entityid="12161" meta.seoname="kotak-mahindra-bank-ltd">Kotak Mahindra Bank</keyword>'s whole time director <keyword id="818755" type="General" weightage="80" keywordseo="kvs-manian" source="Orion">KVS Manian</keyword> opined that it will take another 12 months to revive even though corporates have been investing off and on lately. “No bad news is good news. It is a fairly decent budget. The FM has maintained a fair balance on fiscal prudence, sustainability and ease of doing business,” Manian told PTI after the presentation of the budget. <keyword id="13222" type="DOMAIN" weightage="20" keywordseo="sbi" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="sbi" meta.entityname="State Bank of India" meta.entityid="11984" meta.seoname="state-bank-of-india">SBI</keyword> chairman <keyword id="2003868" type="General" weightage="80" keywordseo="dinesh-khara" source="Orion">Dinesh Khara</keyword> said the budget is growth accretive, fiscally prudent and consumption supportive. “The huge emphasis on capital expenditure could be the perfect recipe for a private investment cycle that is already visible. Support for MSME and Agriculture will broad base credit growth,” Khara added. He also said that the “reasonable Government borrowing numbers” will support lower interest rates and the move towards a clutter free new tax regime will significantly spur consumption. Banking industry's lobby grouping Indian Banks Association's chairman A K Goel said the increased capital expenditure could help in further increasing the demand for bank funds and the Agriculture Accelerator Fund woill also be helpful. <keyword id="686923" type="General" weightage="80" keywordseo="umesh-revankar" source="Orion">Umesh Revankar</keyword>, the executive vice chairman of <keyword id="12730794" type="DOMAIN" weightage="20" keywordseo="shriram-finance" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="shriram finance" meta.entityname="Shriram Finance Ltd." meta.entityid="13106" meta.seoname="shriram-finance-ltd">Shriram Finance</keyword> said the income tax benefits announced will boost purchasing power for middle-class consumers. "I believe the announcements made will trigger a pick-up in credit off take for small enterprises, the consumption-driven two-wheeler business and lending to transportation," he added. Non-bank lender Tata Capital's managing director and chief executive <keyword id="128186" type="General" weightage="80" keywordseo="rajiv-sabharwal" source="Orion">Rajiv Sabharwal</keyword> said the strong agricultural credit outlay, support measures, ease of doing business, and digitization drive across various sectors will improve multiple clusters within the economy. American lender Bank of America's country head Kaku Nakhate said allowing foreign banks to conduct acquisition financing from GIFT City is a welcome step and also hailed the dual budget proposal for a single window clearance for IFSCA, SEZ, <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>, SEBI and GSTN at GIFT City. KPMG's national head of tax, <keyword id="309284" type="General" weightage="80" keywordseo="rajeev-dimri" source="Orion">Rajeev Dimri</keyword>, also welcomed Finance Minister Nirmala Sitharaman's measures for ensuring that the relaxations given to common taxpayers have not derailed fiscal math, and the government has stayed on the path of fiscal consolidation. Pointing out to the Goods and Services Tax revenue accretion over the last few months, he said the taxpayers should be credited for the performance. The budget rightly “rewards” the taxpayers for their commitment, Dimri said. LuLu Financial Holdings Managing Director Adeeb Ahamed said the budget is focussed with equal focus on traditional and emerging sectors. Adeeb, who has significant investments in India's financial services sector through LuLu Forex and LuLu Finserv, said the move to ramp up the credit guarantee scheme for MSMEs will give a fillip to enabling faster access to financial services. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/first-impressions-samsung-galaxy-s23-s23-plus-and-s23-ultra-go-heavy-on-photography-and-gaming/articleshow/97532856.cms?utm_source=social_sticky_amp&amp;utm_medium=social_sharing&amp;utm_campaign=Click_through_social_share">First Impressions: Samsung Galaxy S23, S23 Plus, and S23 Ultra bet big on photography and gaming</a> <a href="https://www.businessinsider.in/tech/mobile/news/new-patent-suggests-that-apple-could-bring-a-foldable-iphone-with-a-self-healing-display-in-the-future/articleshow/97302738.cms">New patent suggests that Apple could bring a foldable iPhone with a self-healing display in the future</a>

Bankers say private capex will take one more year to revive

New Delhi, Jun 2 () Stating that there is a very thin line between risk aversion and risk prudence, State Bank of India Chairman Rajnish Kumar on Tuesday said the banks are ready to finance but there are no takers for bankable loans. He also said the bank is very bullish about the Rs 3 lakh crore credit guarantee scheme for MSME, and through the scheme the government has indirectly infused Rs 30,000 crore into public sector banks. Speaking about criticism for parking deposit money with the RBI, Kumar said, there is deluge of funds but there is no commensurate demand for loan. So, banks have no choice but to park with RBI as there is risk aversion from the side of borrowers as well, he said while addressing India Inc at CII Annual meet. "I hear a lot about risk aversion, but the dividing line between risk aversion and risk prudence is very thin. One question which I have been asking is -- is there risk aversion only amongst lenders or there is risk aversion amongst borrowers also. Are they willing to leverage? Are they willing to invest?" he wondered. Citing an example, he said, when the government slashed corporate tax rate drastically in September last year, many were of the view that investment will take place, but it has not taken place. "As a banker and as the chairman of the largest bank, I am saying I have money, there are no takers of the money. Investment if you look in the last five years, the capex has gone down distinctly...no major projects have been announced. And by the way, the services sector particularly IT don't consume any major capital," he said. Ultimately, he said, it is the manufacturing or infrastructure sector, which consumes money. Between 2008 and 2015, it was the power sector which consumed maximum capital for putting up 75,000 MW capacity, he said. Kumar said that the corporate sector should not expect much from the government but have to be self-reliant or "atmanirbhar", given the fiscal position of the government. "Maybe the corporate sector would have to look for all the opportunities themselves," he said. He also said that if more has to be given to the system, banks would require capital support from the government. On the Rs 3 lakh crore credit guarantee scheme, Kumar said, risk weight for the scheme is zero and public sector banks do not have to provide any capital for this. So, in a way there is indirect capital infusion of Rs 30,000 crore, he said. "We are very bullish on this scheme. In a single day, we have disbursed 22,000 loans of worth Rs 3,000 crore. So, this is a very good scheme for supporting MSME sector," he said. The scheme is the biggest fiscal component of the Rs 20-lakh crore Self Reliant India Mission package announced by Finance Minister Nirmala Sitharaman last month. Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested MUDRA borrowers, in the form of a guaranteed emergency credit line (GECL) facility. For this purpose, a corpus of Rs 41,600 crore was provided by the government spread over the current and the next three financial years. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till an amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier. The main objective of the scheme is to provide an incentive to member lending institutions (MLIs) like banks, financial institutions (FIs) and non-banking financial companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers. All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29 which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore would be eligible for GECL funding under the scheme. DP BAL

There is risk aversion at borrowers' end, says SBI Chairman

Mumbai, Feb 14 () It is incumbent on the telcos to find money and will be safe to presume that they would have made some arrangements for it by now, SBI chairman Rajnish Kumar said on Friday. He also said that the bank will be passing on all the benefits of the cash reserve ratio (CRR) reliefs on small ticket loans to the borrowers and a decision on the same will be done before April 1. The comments on telecom companies come on a day when the Supreme Court made it clear that they will have to cough up the Rs 1.47 lakh crore in adjusted gross revenue (AGR) dues and also questioned why contempt proceedings should not be initiated against those who are coming in way of implementing its order. "It is now for the telecom companies to decide how will they find the money or what course of action they will take," Kumar told reporters on the sidelines of the annual NTLF here. "They (telcos) would have made their arrangements is what I presume," Kumar said, adding that it has not been approached by any of the telecom company. The payments to be made by the companies include Rs 53,000 crore by Vodafone Idea, Rs 35,500 crore by Bharti Airtel and Rs 14,000 crore by the now defunct Tata Teleservices. Kumar said the bank has a Rs 29,000 crore exposure to the telecom sector and another up to Rs 14,000 crore in non-fund based exposure which will devolve only if there is a non-payment of dues. Its gross non-performing assets include Rs 9,000 crore from the telecom sector, he said, adding that it has been provided for in full and the bank has decided not to set aside money against standard assets there. On the CRR benefit pass through, he said the next review of the external benchmark-linked rates is scheduled to take place in April 1, but an announcement will be made before that as well. The bank, at present, is calculating what exactly will be the benefit of the RBI's move announced on February 6 and the quantum of the benefit to the end customer will be soon arrived at. Meanwhile, on the troubles of Yes Bank, Kumar said SBI also had to contend with "mess" because of its corporate lending like the private sector lender, but could absorb the impact because of its size while the smaller sized Yes Bank suffered. The impact on both the banks was "more or less the same", he said. He claimed SBI is the biggest e-commerce player at present through its digital banking offering 'Yono' if one were to exclude pure-play players in the segment. The bank has done over Rs 14,000 crore of personal loans through the app and the interest and fees earned through it will help it recover the Rs 800 crore investment in the app, he said. It is on boarding an average of 70,000 users per day on Yono and will be hitting the 20 million mark soon, even before it celebrates the second anniversary of the offering, Kumar said. Taking potshots at new-age digital players, Kumar said a bank's valuation goes up when it reports profits, while it is losses that drive the valuations for new age entities. AA MRMR

SBI not approached by any telco to finance AGR dues, say chairman

New Delhi, Jun 21 () SBI chairman Rajnish Kumar assured shareholders that the likely job cuts and salary reductions in the wake of COVID-19 pandemic will leave 'relatively low level' of stress on the bank as the proportion of business from government and quasi-government sector is high. In a letter to the bank's shareholders, Kumar exuded confidence that despite economic headwinds, the robust performance achieved by the country's largest lender State Bank of India (SBI) in 2019-20 will continue in the current financial year. "…despite the economic headwinds, the Bank is well prepared to adjust to the challenges posed by the COVID-19 pandemic. I am more than hopeful that the robust performance achieved in FY20 will continue in FY21 as well," the SBI chairman said. Observing that the full impact of COVID-19 outbreak will be felt in the current financial year, Kumar said from the bank's point of view, the true impact of COVID pandemic must also consider the behavioral impact on bank's customers, and composition of portfolio, among others. "For instance, likely job cuts and salary reductions will have relatively low level of stress on account of higher proportion of Govt/ Quasi Govt. sector customers," he said in the letter, as per SBI's annual report. "As of now, only 21.8 per cent of the customers have availed the benefit of moratorium. Furthermore, the Bank was able to achieve 98 per cent branch operability as well as 91 per cent alternate channel operability during the period of lockdown," Kumar added. Nevertheless, an elaborate Business Continuity Plan (BCP) is in place to manage disruptions, he said. SBI has traditionally been the banker of choice to the Government of India (GOI) and is an accredited banker to major Central Government Ministries and Departments, the annual report said. It said SBI is contributing significantly towards e-governance initiatives taken by the GOI, and is instrumental in the development of e-solutions for both Central and state governments. "This has facilitated their transition to the online mode, providing greater efficiency and transparency, resulting in ease of doing business and relaxation of living for the citizens," it said. SBI's total government business turnover was Rs 52,62,643 crore during fiscal 2019-20. The bank registered its highest ever yearly net profit in 2019-20 at Rs 14,488 crore. The net profit was Rs 862 crore during 2018-19. Amidst the COVID-19 pandemic outbreak, the outlook of the global economy has become very uncertain and world is likely to experience a deep rooted recession next year, Kumar said. The RBI expects contraction in the Indian economy during the current financial year. Kumar also said that the pandemic has changed the preference of customers and it is a big opportunity for the bank as there is now more acceptability to adopt digital channels for doing banking transactions. He said the bank will further scale up YONO (all-encompassing digital platform) and has set a target of doubling user registrations in the next six months, and further strengthen platform through new product offerings like end-to-end home loans, pre-approved car loan and personal gold loans. NKD CS RVK

Likely job cuts, salary reductions to have relatively low impact on SBI: Chairman

New Delhi, Jun 2 () The rupee is likely to be stable if crude oil prices stay at moderate level and fiscal deficit is under check, State Bank of India Chairman Rajnish Kumar said on Tuesday. So far, the rupee has been stable against the dollar, he said at the CII Annual session. "If the crude oil (prices) remain where they are, then there will be much less pressure on it. Our largest imports were either crude oil or gold. So gold import is practically zero and crude import is down because of softness in the prices. So that's why pressure on the rupee is much less...So far the restraints shown by the government and the trend is likely to continue in the future," he said. The rupee has not witnessed a sharp spike in the past two months and has been trading in the range of 75-76 per dollar. Brent crude, the global price benchmark, was trading around USD 39 per barrel while oil for the Indian basket was quoted near USD 35 per barrel on Tuesday. "I am expecting that currency is going to be stable," he said. With regard to lending to the NBFC sector, Kumar said SBI has been giving financial support to all such institutions which have satisfactory relation with the bank. DP MR MR

Rupee likely to stay stable if crude prices remain at current levels: SBI chairman

New Delhi, Dec 21 () SBI Chairman Rajnish Kumar on Saturday said most banks will be in a good position with respect to stressed assets by March and there is no dearth of liquidity in the system for lending.
 He added that there are opportunities to lend in sectors such as infrastructure and consumer lending as there is not much of a decline in demand from consumers.
 "By March 31st, most of the banks will be in a good position with respect to stressed assets," Kumar said at the 92nd Annual Convention of industry chamber FICCI here.
 On transmission of monetary policy, he said the banks cannot lower rates beyond a threshold due to asset liability mismatch issues.
 Kumar stated that there is no shortage of capital in the system, but the corporates are not borrowing enough and not utilising their capacities well.
 On lending to the telecom sector for the next round of spectrum auctions, he said, "For us lending to the telecom sector for spectrum is completely unsecured. On paper it is secured as the auction is to be done by government but practically it is totally unsecured."
 "So in such circumstances, banks will have to evaluate carefully before lending to the sector as the probability of default is very high," Kumar said. KPM ABM
ABM

Banking industry's NPA situation to improve by fiscal-end: SBI chairman

New Delhi, Feb 15 () SBI Chairman Rajnish Kumar on Saturday said banks will "have to pay the price" in case any telecom firm files for bankruptcy, a day after the Supreme Court made it clear that telecom companies will have to pay the Rs 1.47 lakh crore in past dues. The chief of the country's largest lender State Bank of India (SBI) said it is in the "wait-and-watch mode" and the onus of ensuring telecom companies' compliance with the Supreme Court order lies with the Department of Telecommunications (DoT) under the government. "If there is a negative impact on any enterprise, it impacts a larger ecosystem, whether it is banks, whether it is employees, whether they are vendors, consumers, so everybody gets impacted. So, that impact, when it comes, we will have to pay the price," Kumar said, when asked about the impact on banks if telcos move towards bankruptcy. He was speaking to reporters on the sidelines of the unveiling of artworks namely 'Manasvi' and 'Tapasvi' at the Local Head Office (LHO) here. Around 400 computers, more than 2,000 microchips, over 400 keyboards and above 200 discarded credit cards were used to create the two artworks. He added that the closure of any corporate impacts the country's economy and, therefore, the endeavour is to prevent the shutting down of any enterprise. Asked if any telco account is currently classified as non-performing asset (NPA), he said there are two accounts, Aircel and RCom, that went into bankruptcy. Besides, he said that SBI will not pass on the burden of the hike in premium of deposit insurance to its customers. "We never recovered the premium from customers, we will not do it now either. As far as the impact of the rise from 10 paise to 12 paise is concerned, earlier if we were paying Rs 3,000 crore now we will pay Rs 3,600 crore premium," he said. Following the failure of a number of cooperative banks, with Mumbai-based PMC Bank being the latest and the largest last year, the government hiked the deposit insurance coverage to Rs 5 lakh from Rs 1 lakh in the Union Budget 2020-21. "The premium is something which, we consider, will increase from 10 paise to 12 paisa per Rs 100 for the time being. So, the impact on banks' balance sheets is not likely to be much," RBI Deputy Governor B P Kanungo said recently. RBI Governor Shaktikanta Das on Saturday said the central bank will have internal discussions in case there are any issues arising out of the Supreme Court order regarding adjusted gross revenue (AGR) dues to be paid by telecom companies. On Friday, the Supreme Court threatened contempt proceedings against top executives of Bharti Airtel, Vodafone Idea and other telecom firms for failing to comply with its directive to pay an estimated Rs 1.47 lakh crore in past dues. However, Das did not offer any specific comments about the order, which might have ramifications on banks in terms of their exposure to the financially-stressed telecom companies. The payments to be made by the companies include Rs 53,000 crore by Vodafone Idea, Rs 35,500 crore by Bharti Airtel and Rs 14,000 crore by the now-defunct Tata Teleservices. RSN HRS

Banks will have to pay price if any telco files for bankruptcy: SBI Chairman

The government is thinking of extending <keyword id="46004" type="POSITION" weightage="100" keywordseo="SBI-chairman">SBI Chairman</keyword> <keyword id="6379603" type="PERSON" weightage="100" keywordseo="Arundhati-Bhattacharya">Arundhati Bhattacharya</keyword>'s term by at least a year, which would rule her out of the race of RBI’s next governor after <keyword id="6358908" type="PERSON" weightage="100" keywordseo="Raghuram-Rajan">Raghuram Rajan</keyword> completes his term in September. Additionally, the government might up the tenure of SBI chairman to five years, from the present three. 
 
The proposal is being considered since the finance ministry wants continuity in leadership when state-run SBI absorbs five associate units and Bhartiya Mahila Bank as it cleans up its bad loans. 
 
It was earlier this month that the cabinet had cleared a plan to see SBI increase its size and become one of world’s top 50 banks, a process that one can expect to be completed by March 2017. 
 
If Bhattacharya's term is not extended, MDs B Sriram, PK Gupta and Rajnish Kumar will be considered for the top post. 
 
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Arundhati Bhattacharya may get an extension at SBI, out of RBI governor’s race

In a major restructuring exercise, <keyword id="6354731" type="DOMAIN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> has created a separate Financial Inclusion and Micro Market (FI&amp;MM) vertical with a focus on rural and <keyword id="9333024" type="UNKNOWN" weightage="20" keywordseo="semi-urban-areas">semi urban areas</keyword> to improve customer experience. Under this newly launched vertical, the bank will offer loans mainly for agriculture as well as allied activities, and micro and small enterprises, <keyword id="13222" type="CITY" weightage="20" keywordseo="SBI">SBI</keyword> said in a statement on Tuesday. About 8,000 branches in rural and semi urban areas have been identified for providing specialised services to micro segment, including micro credit for <keyword id="390673" type="PERSON" weightage="20" keywordseo="small-businesses">small businesses</keyword> and farmers, it said. The thrust is also to improve service quality and availability of banking services through the bank's vast network of over 63,000 customer service points in rural, semi urban, urban and metro areas, it said, adding the new vertical will provide a boost to the micro-finance sector. "Today is an important day in our resolve to ensure that SBI stands with the citizens of the country, across all segments. The key elements of creating the FI&amp;MM vertical are to bring sharper focus to different business lines and improve the quality of interaction with customers at the branch," SBI Chairman Rajnish Kumar said. This is an initiative by SBI to cater to financial requirements of people residing in the hinterland of the country, as part of its financial inclusion journey, he added. "The new FI&amp;MM vertical will provide an opportunity to serve the small business, Agri &amp; allied segment so that they can run their businesses smoothly, especially in the current times of uncertainty. The creation of the FI&amp;MM Vertical was conceived, created and implemented fully in house," Kumar said. Commenting on the Delhi region, CGM in-charge Vijuy Ronjan said as many as 612 branches spread across four states, including Delhi and Haryana, would fall under the new vertical. "The initiative will help improve credit delivery to the retail, MSME and agriculture sector in the rural and semi-urban areas of the country. Besides, it will lead to better utilisation of banking correspondent channel. As a result, the goal of financial inclusion and doorstep banking of the government can be given a further push," Ronjan said. On the first day itself, he said, the circle has disbursed about Rs 7.17 crore to 168 eligible MSME units through the FI&amp;MM vertical under the Guaranteed Emergency Credit Line (GECL), part of the Atmanirbhar Bharat Abhiyan package. The statement further said the FI&amp;MM vertical is headed by the bank's deputy managing director Sanjeev Nautiyal at the national level. To ensure special focus and smooth functioning at the local level, it said, the FI&amp;MM vertical will comprise of a four tiered structure under the Chief General Manager, General Manager, RMs at <keyword id="9333023" type="COMPANY" weightage="20" keywordseo="regional-business-offices">Regional Business Offices</keyword> (RBO) and <keyword id="9333022" type="LOCATION" weightage="20" keywordseo="district-sales-hub">District Sales Hub</keyword> to strengthen the credit delivery system and improve the turnaround time for quick sanctions and disbursement of small loans. The primary emphasis will be on consolidating the district level presence which will provide constant sales and recovery support to branches in the FI&amp;MM network, it said. The DSHs will also play an important role in strengthening the reach of customer service points (CSPs) and ensure improvement in quality and availability of services rendered to customers. Amid the COVID-19 pandemic, SBI has been at the forefront in providing relief measures to existing SME borrowers, such as 10 per cent of fund based working capital limits by way of CCECL (Common COVID-19 Emergency Credit Line), easing of working capital finance along with moratorium on term loans and working capital. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/yes-bank-is-looking-to-raise-10000-crore-through-fpo-with-kotak-securities-axis-capital-and-sbi-capital-reportedly-to-be-key-players/articleshow/76153458.cms">Yes Bank is looking to raise ₹10,000 crore through FPO – with Kotak Securities, Axis Capital, and SBI Capital reportedly to be key players</a> <a href="https://www.businessinsider.in/business/news/how-to-apply-for-msme-loan/articleshow/76154606.cms">Here’s how MSMEs can apply for loans from SBI, ICICI Bank and others</a> <a href="https://www.businessinsider.in/finance/news/sbi-axis-bank-and-kotak-mahindra-bank-and-other-banking-stocks-are-raising-capital-to-fill-npa-hole/articleshow/76054599.cms">Indian lenders like SBI, Axis Bank and others need $20 billion⁠ in capital— most of it will go into filling up NPA holes</a>

SBI announces new vertical to focus on rural and semi urban areas

New Delhi, Dec 21 () SBI Chairman Rajnish Kumar on Saturday said banks cannot go beyond a threshold to bring down interest rates on deposits as India lacks social security schemes and likewise cannot lend at lower rates to corporates as the risk of default is too high.
On rate transmission by banks, Kumar said when interest rate moves downwards then everybody starts talking and when it goes upwards nobody talks about it.
When the repo rates were going up five-six years back, interest rates for borrowers did not increase in that proportion, he said.
 In 2013, the repo rate was around 10 per cent, the SBI Chairman said adding that
since 2013, Reserve Bank's repo and bank interest rates for consumers have been moving in a completely aligned manner. 
"Secondly, we have repeatedly mentioned that banking system's dependence ...in India is largely on depositors. Today, 90 per cent of my deposit is retail deposit. If I want to lend money cheap, obviously I will have to pay less to depositors; and in a country like ours where there is huge population of senior citizens and in the absence of social security schemes, the interest on deposits is a source of earning," Kumar said while speaking at the 92nd Ficci Annual Convention here on the theme 'making financial system robust to aspire a USD 5 trillion economy'.
At present, banks largely offer 3 to 4 per cent interest on deposits in savings accounts, and charge borrowers 8 per cent and above rate on loans.
On getting competition from government saving schemes, he said such instruments do not impact the banks much as they still command huge share in the deposit market.
"We can't lower the interest rates (on lending) without lowering the interest rates for depositors. And there is a point, a threshold below which we cannot reduce the interest rate for depositors. Third thing is that the credit cost in the country is very high because the default rates are very high, so the spread has to be necessarily high," said the head of the country's largest lender.
The loss due to defaults is very high currently and in such a scenario the spreads have to be necessarily high to cover for the credit costs, Kumar added. KPM MKJ

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