Sbi Utsav Draws Large Crowd of Prospective Home, Car Buyers (August 21, 2017)

Come July, August, and people begin preparations for the upcoming major festivals that are celebrated each year. The State Bank of India decided to complement these with a major ‘Utsav’ of their own. Powered by the Times Red Cell, The SBI Home Loan Utsav on the 12th and 13th of August 2017 offered the people a golden opportunity to select suitable homes as well as We offered various incentives to make the event a grand success Farooque Shahab Chief General Manager -Bengaluru Circle, SBI cars from a vast array of selections on offer.

Buyers were spoilt for choice as the top 60 builders and many of the best car companies offered various ranges in homes and options in cars to suit requirements and budgets of the attending prospective buyers. Inaugurated by Farooque Shahab, Chief General Manager - Bengaluru Circle, SBI, on Friday August 12th evening alongside senior bank officials and Mrs India World 2017 Tripti Rao, the two-day, free-entry Utsav was held at the local head office campus on St Mark’s Road and expected to generate Rs.2000 crores in property sales. The CGM said, ‘We offered various incentives to make the event a grand success’. The Bengaluru realty sector has been one of transparency, largely non-speculative and one of reasonable and competitive pricing. After the demonetisation issues, this event provided the much-needed boost to builders and investors alike. Fall in interest rates over the past few months, RERA and GST implementation have prompted potential homebuyers to invest in ready-to-move-in properties.

Visitors were quoted as saying, “After studying the market we feel this is the right time to invest and with the loan process being made easier at this Utsav, we are motivated to pick up a home”. The marketing team of a real estate company were upbeat about the prospects as buyers were naturally drawn to the fact that there was a major focus on home loans. Another marketing team appreciated the fact that they got to meet many prospective buyers. In fact, SBI also has a builder finance cell to ease the realty sector’s need for funds while complying with RERA. C S Krishnamurthy, General Manager - Network I, SBI, said, “We’ve been one of the most vibrant centres as far as home loans are concerned. Today, it is an end-user’s market as people acquire a house to live in and not for speculation. The government’s numerous schemes and incentives in the realty sector have given the Bengaluru market further dimensions of transparency and allow buyers to fulfil their cherished dream of having a home. The builders have joined us with a lot of enthusiasm to make such a large event possible and it will be a win-win result for all”.

The SBI had taken care to have the event at the start of the festive season and on a weekend to target young, working individuals as well as hosting it at their own lush green heritage premises at what is a well-known address in the city. The threatening rain-clouds did not dampen the crowd’s spirits as they made a beeline to the event in droves. The Utsav had a bouquet of offerings for the loan-seeker. A surprise drop of 15 base points on home loans above 30 lakhs was offered specially for spot bookings, 100 percent waiver of processing fee, 100 percent waiver of legal and valuation charges for SBI approved projects, on-the-spot sanction, interest subsidy from Rs.2.30 lakhs to Rs.2.60 lakhs under the Pradhan Mantri Awas Yojana, and top builders and automobile dealers showcased under one roof giving their own promotions and attractive discounts on products and offerings. Many buyers were appreciative that a loan-seeking, sanctioning and home-buying process could be so much easier and simple.

Archana Rastogi, Dy General Manager - Administrative Office II, SBI, summed it up. “All the good projects are showcased here and it was planned like a family outing activity. There was a personalised touch as we had taken care of all aspects. People have faith in SBI and to visit our local head office premises and book their home strengthens the relationship we share with customers. We are hopeful of generating good business for all concerned”. Asit Kumar Nandi, Dy General Manager - REHBU, lauded the efforts of his sales team and thanked the customers for making the event a grand success. Ravindra Hitnalli, Asst General Manager - Home Loan Marketing Centre Head, said, “We generated Rs.1,642 crores of business from over 3,100 prospective homebuyers.”

This time, the Utsav had included many automobile dealers and given them adequate area for featuring their cars and interacting with prospective buyers. The dealers were confident enquiries during the Utsav will convert to sales soon. The SBI had spared no efforts in making this event attractive to the public. Free entry and parking, and the location being in the Central Business District, assured the public easy access. With gifts for lucky visitors each hour, a food court serving up sumptuous eats and activity zones for children to play in, the Utsav ensured that the whole family’s interests were catered to. The evenings were made special featuring bollywood hits by Kaustav Songman on Saturday and Indi folk by Vasu Dixit Collective featuring Bindumalini on Sunday. The title sponsor was GM Infinite and subtitle sponsors were Brigade Group, Salarpuria Sattva and DSR Infrastructure Pvt. Ltd

SBI Foundation launches SBI GRAM SEVA (August 18, 2017)

Mumbai - August 14, 2017: State Bank of India today launched its integrated CSR initiative SBI GRAM SEVA. SBI Chairman Arundhati Bhattacharya launched this initiative under SBI Foundation that aims to reach to maximum of 100 Gram Panchayats covering approximately 500 villages across India by 2021.


SBI moves people, shuts branches ... but not a peep (August 16, 2017)

The country’s largest lender, State Bank of India (SBI), has rationalised 716 offices (594 branches and 122 administrative offices) and several thousands of employees have been transferred beginning this fiscal, but, strangely, there have been no major protests, top officials said. Several hundreds of offices would be closed and thousands of staff would be moved in the coming months, officials added. Strangely one does not hear any major complaints of vindictiveness or arbitrariness from the normally vociferous banking sector employees. This, at a time when leading software companies are arbitrarily firing people at day’s notice. No big complaints Even the unions that strongly opposed the merger of six banks with SBI and were apprehensive about treatment of incoming staff by the SBI management agree that there is not much of vindictive or arbitrary movement of people till now, making one wonder as to how and why this happened.


Around 70,000 employees (around 40,000 Class III and IV and around 30,000 officers) were added to SBI’s rolls following the merger of SBBJ (State Bank of Bikaner and Jaipur), SBM (State Bank of Mysore), SBT (State Bank of Travancore), SBP (State Bank of Patiala) and SBH (State Bank of Hyderabad) and Bharatiya Mahila Bank. “By and large, the staff redeployment in SBI has been smooth. However, there seems to be complaints of vindictive transfers in Kerala which the management must address satisfactorily,” CH Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA), told IANS. But how is it that SBI is managing the show without the flag of protest being raised by the usually vociferous unions? “The management did not deviate from the transfer policies that were signed between the management and the unions,” Sanjeev Kumar Bandlish, General Secretary, All India State Bank of India Staff Federation (AISBISF), told IANS. “There are set transfer policies for officers and the award staff. We have told the management not to transfer employees on a large scale,” D. Thomas Franco Rajendra Dev, President, All India State Bank Officers Federation (AIBOF), told IANS.


Union leaders said the employees were consulted and posting preferences were sought prior to their transfer. Nearer to earlier offices “The employees were moved to other branches located in the vicinity of their earlier offices. This reduced tension in the minds of incoming employees to a large extent,” Neeraj Vyas, Deputy Managing Director and Chief Operating Officer, told IANS. He said those who opted to take higher responsibility under the Career Progression Plan (CPP) were transferred to another location according to the existing policy. “The reservation about the merger was only in the incoming employees’ minds. Once the merger happened and the employees saw the systematic way the policies were followed, the mental block against the merger has melted,” Vyas said. “When the merger was proposed, integrating the officers of associate banks was not considered to be a problem. However, in the case of clerical cadres there was a crucial difference between SBI and the associate banks,” Vyas added. Vyas said under the SBI’s CPP for clerical staff, those who accept higher responsibility are given additional powers and allowances. “But such schemes were not there in the associate banks and the major union there — the AIBEA — had opposed the scheme,” Vyas said.


He said many employees of the erstwhile associate banks have now opted for the CPP. According to Vyas, there were no mass scale transfers in the associate banks prior to the introduction of Voluntary Retirement Scheme (VRS) before the merger. Atotal of 3,569 employees opted for VRS. “The VRS numbers were as per our initial expectations,” Vyas said. In the case of officers, they will be transferred on promotion or after completing three years at a location. On the staff redeployment process, Vyas said the bank planned a mix of employees — those who are originally from SBI and from associate banks — so that they get culturally integrated with SBI. Branch rationalisation According to SBI, the projected number of staff to be redeployed due to rationalisation of administrative offices and branches is around 10,616. The bank has said that nearly 30 per cent of the 8,616 staff to be redeployed due to branch rationalisation will be posted in sales functions. Questioned about the complaints on transfer in Kerala, Vyas replied: “Only 25 employees of erstwhile State Bank of Travancore (SBT) have complained out of 4,300 employees to whom the Career Progression Plan was offered.” He said the unions in SBT had vociferously opposed the career progression scheme prior to the merger.


According to Vyas, the acceptance of the career progression scheme amongst the erstwhile associate bank employees is around 80 per cent now, the same as in SBI. Queried about the criteria for closure of banks, Vyas said it is based on factors such as profitability, viability, period of lease, footfalls and others. “We are not closing the branches of erstwhile associate banks. Even SBI branches will be closed if they do not fulfil the criteria. We move from rental premises to owned premises wherever possible,” Vyas added. According to Vyas, the total number of branches that would be rationalised will be around 1,400, of which 594 have been completed. “The remaining will happen over a period of time. Further we will open new branches wherever needed,” he added.


Under SBI’s Career Progression Plan for clerical staff, those who accept higher responsibility are given additional powers and allowances


Familiar territory Many employees have been moved to branches close to their earlier offices, putting their fears to rest


SBI holds home Loan Utsav (August 16, 2017)

State Bank of India successfully held two-day Home loan Utsav at Its local head office in Bangalore. The loan Utsav saw title sponsor— CM infinite. Subtitle sponsors - Brigade Croup, Salarpuria sattva and DSR Infra. Talking about the initiative, rarooque Shahab, CGM, Bengaluru Circle said "SBI has always brought a positive change in the banking industry, we feel this is the right time to hold our Utsav, which Is surely has created a much needed boost to the real estate industry."


FMbacks SBIs decision to cut rates on savings accounts (August 04, 2017)

Union finance minister ArunJaitley on Thursday defended the SBI’s decision to cut interest rate on saving accounts of less than Rs.1 crore, saying the move was in sync with reduction in lending rate. Responding to a Zero Hour mention of the SBI’s decision to cut interest rate on saving accounts with less than Rs.1 crore deposit to 3.5 per cent from 4 per cent, he said to protect the interests of senior citizens, the government has already floated a deposit scheme that guarantees 8- plus per cent interest rate. High interest rate on savings and fix deposits was during a time when inflation was 10-11 per cent and sluggishness was setting in the economy. So when the lending rate came down, so did savings account, Mr Jaitley said. He said for senior citizens and retired persons, the government has bought a pension scheme that guarantees 8 per cent interest rate. Prime Minister NarendraModi had announced the Pradhan MantriVyayaVandanaYojana in December last year which was launched in May. “The effective rate comes to 8.3 per cent,” he said, adding that the scheme is managed by LIC. To opposition demand for a discussion on sluggish in economy and job losses, he said all issues the opposition want can be discussed and debated if they allow the House to function from 11 am to 6 pm every day


SBI to raise Rs.2,000 crores via Basel-Ill bonds (August 04, 2017)

STATE BANK OF India plans to raise Rs.2,000 crore by allotting Basel-Ill compliant bonds to various investors. “The committee of directors for capital raising accorded its approval today to allot 20,000 ATI Basel-Ill compliant non-convertible, perpetual, subordinated bonds in the nature of debentures...aggregating Rs.2,000 crore to various investors,” the lender said in a regulatory filing. The lender said bonds will carry a coupon rate of 8.15% with a call option after five years or the anniversary date thereafter.

SBI debit cards now on Samsung Pay app (August 02, 2017)

Smartphone-maker Samsung, which recently launched its digital wallet app Samsung Pay in India, has tied up with State Bank of India to store higher variants of SBI debit cards on the app. This collaboration turns the Samsung smartphones into electronic card-holders and users can pay at point-of-sale (PoS) terminals with just a tap on the cards stored in Samsung Pay.

While this collaboration is yet another step for SBI to boost its digital payment services, it also gives Samsung an edge over its competitors to gain market share in the highly competitive smartphone segment. With this collaboration, over 130 million SBI debit cardholders will be able to tap and pay using a wide range of Samsung smartphones at merchant outlets having card acceptance machines. Samsung Pay works on 2.5 million PoS card machines across the country through its magnetic secure transmission (MST) technology. It is currently available on a wide range of Samsung smartphones, enabling consumers to make offline payments without the need for a physical card.

SBI gets buy tag from R. Securities (July 29, 2017)

Post mega merger, SBI stands to gain market share in fast-growing Retail and SME segments. Further, the bank has been able to deliver relatively better operating performance compared to its peers despite elevated stress in balance sheet. Moreover, the bank has been able to clean up its loan book effectively, which reasonably assures investors that it will continue to surprise positively on operating and asset quality fronts from FY18E onwards.

Realignment of PCR and assets classification of the associate banks at standalone level further boosts our confidence in SBI’s performance, going forward. Recent capital raising of Rs.15,000 crore will further help the bank to support its growth plan over next three years. The broking house reiterates its buy recommendation on the stock with an SOTP-based target price of Rs.355, valuing parent at 1.6x FY19 adjusted book value. Broking firm: Reliance Securities Rating: Buy Closing price: Rs.290.35

Banks get NCLT nod to begin insolvency proceedings against Bhushan Steel, BSPL (July 27, 2017)

The National Company Law Tribunal on Wednesday gave the go-ahead to banks to start insolvency proceedings against Bhushan Steel and Bhushan Steel & Power Ltd (BSPL) to recover loans the companies have defaulted on. Allowing the pleas filed by the lead bankers, SBI and PNB, the NCLT appointed Interim Resolution Professionals and directed the companies’ managements, officials and promoters to assist them in the proceedings. In case there is any violation of its order, “the IRP would be at liberty to make appropriate application to this tribunal for passing an appropriate order,” it added. SBI is aiming to recover Rs.4,295 crore from Bhushan Steel and $490 million for a foreign currency loan.

NCLT appoints IRP at Monnet ISpat(July 26, 2017)

Allowing the plea of consortium of lenders led by State Bank of India, the National Company Law Tribunal (NCLT) on Tuesday appointed interim resolution professional (IRP) to initiate bankruptcy proceedings against Monnet Ispat& Energy Ltd. The Mumbai bench of NCLT appointed SumitBinani as IRP for carrying out the Corporate Insolvency Resolution Process (CIRP) of the company, Monnet Ispat said in a filing to the BSE. “SumitBinani, IRP supported by Grant Thornton Advisory Pvt Ltd, the financial adviser for managing the operations of the company has been appointed for carrying out the CIRP of the Company.”

SBI launches website for home buyers(July 24, 2017)

The State Bank of India has taken another step to boost its home loans, billed as a safe bet for lenders battling billions in corporate bad loans. The bank has launched SBI Realty,, a one-stop integrated website for home buyers, who now mostly seek operational ease over anything else. The lender is expected to expand its home loan credit through this move. SBI-Realty will help customers to choose their desired home from the universe of 3,000 SBI-approved projects around the country. These projects are spread across 13 states and Union Territories covering 30 cities including metros, semi metro and towns. The SBI has the largest share in the home loan market. It grew home loans nearly 17% to about Rs 2.23 lakh crore during 2016-17. “There are 9.5 lakhs home units available on the website. Customers can compare current and past trends of prices for the properties in various localities in the city,” the bank said.

Launching Rs.200 note will fill missing middle: SBI report (July 24, 2017)

Introduction of Rs 200 note will fill in the ‘missing middle’ even as the new currency in circulation (CIC) has already reached 84 per cent of the pre demonetisation level, says a report. Cash with banks, a CIC component, has however witnessed a decline over November 2016 level, said the State Bank of India Ecowrap report. The data for June 23, 2017 shows cash in hand with banks declining to 5.4 per cent of the currency in circulation from a high of 23.19 per cent for the fortnight ended November 25 2016, it said. Going by historical trends, cash in hand with banks is roughly 3.8 per cent of CIC and is currently at 5.4 per cent. This means at least an additional amount of 1.6 per cent/Rs.25,000 crore of excess currency may be currently lying in ATMs and herein lies the importance of new Rs 200 notes which could serve as the ‘missing middle’ it said. The report added that Reserve Bank of India has recently ‘put orders’ for it.

“The cash in hand with banks has been higher compared to the last year, because of demonetisation and the subsequent limits placed on withdrawals for some time. However, now the percentage is showing a decline and reaching pre-demonetisation levels,” it added. The report noted that though there has been a significant move towards relocating distribution of currency towards smaller denominations post demonetisation, there is a mismatch caused by the presence of Rs.2,000 denomination straight after Rs.500 denomination. Moreover, an ATM machine typically holds 10,000 bills and if these were to comprise say only notes of Rs.100, the number and cost of replenishment goes up significantly. “Herein lies the paradox. Notes of Rs.2,000 denomination in ATMs may find few takers because of missing middle/Rs.200 note,” the report said. The Reserve Bank is reportedly expected to introduce Rs.200 notes in the coming months to ease pressure on lower- denomination currencies that are in short supply. The new notes of Rs.200 should be out before the end of 2017 and will greatly help in narrowing the demand and supply gap in smaller-denomination currency bills

SBI to collect stamp duty, registration fee and e-SBTR in Maharashtra, Partners with Inspector General of Registration and Controller of Stamps (July 21, 2017)

STATE BANK OF India (SBI), may approach the debt market to issue additional tier-1 bonds or perpetual bonds, according to sources in the bond market. “We are not yet sure of the quantum, but it is likely to be close to Rs.2,500 crore. SBI Caps is likely to be the banker to the deal. The bank is most likely to directly place the issue with a large player on a private placement basis, but the option to approach the open market is also there,” a bond market participant said.

SBI may issue perpetual bonds to raise around Rs.2,500 crore (July 18, 2017)

STATE BANK OF India (SBI), may approach the debt market to issue additional tier-1 bonds or perpetual bonds, according to sources in the bond market. “We are not yet sure of the quantum, but it is likely to be close to Rs.2,500 crore. SBI Caps is likely to be the banker to the deal. The bank is most likely to directly place the issue with a large player on a private placement basis, but the option to approach the open market is also there,” a bond market participant said.

Perpetual bonds do not have a fixed maturity period. For the same reason, yields on these instruments tend to be a bit higher than those of a conventional non-convertible debenture. These bonds qualify as tier-I capital of banks. Prior to this, SBI had issued a perpetual bond in October last year to raise Rs.2,500 crore at a coupon rate of 8.3 9%. Bond arrangers said the yield on the bank's perpetual bonds is currently trending in the range of 8.25-8.28% in the secondary market. The pricing of a primary market issuance is usually based on where the secondary levels are trading.

“If the bank approaches the market any time soon for its perpetual bond issue, it is likely to get a yield close to 8.2 5 -8.3 0%,” said a bond market expert. SBI recently raised Rs.15,000 crore via qualified institutional placement (QIP) by selling 522 million shares at Rs.287.25 per equity share. The issue was oversubscribed considerably. According to SBI’s results during the fourth quarter of the previous fiscal, the bank's additional tier-1 ratio stood at 0.5 3%. There was considerable surge in issuance of perpetual bonds last year, with banks getting busy shoring up their tier-1 capital.

Bloomberg data show over Rs.23,000 crore of perpetual bonds have been issued this calendar year. Recently, Axis Bank priced its additional tier-1 bonds at 8.75% to raise Rs.3,500 crore. HDFC Bank also did a massive AT-1 bond issue worth Rs.8,000 crore. It is noteworthy that spreads on perpetual bonds have fallen since the Reserve Bank of India relaxed the norms for coupon-servicing of such bonds.

Bhushan case: NCLT to hear plea tomorrow (July 18, 2017)

THE NATIONAL COMPANY Law Tribunal (NCLT) will on Wednesday hear the insolvency proceedings against Bhushan Steel and Bhushan Power and Steel respectively filed by public sector lenders State Bank of India (SBI) and Punjab National Bank (PNB). The Principal Bench of the NCLT, headed by its President Justice M M Kumar had on July 13 directed Bhushan Steel and Bhushan Power and Steel to file their objections, if any, by Monday on the petition filed by the two state-run banks. These two firms are among the 12 stressed assets, with a combine exposure of around Rs.2.4 lakh crore, identified by the Reserve Bank of India (RBI) under insolvency and bankruptcy law. The central bank asked the lenders to move to the NCLT.

Both SBI and PNB filed the petitions under the Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, where the financial creditor initiates insolvency proceedings with a claim. Once these cases are with the NCLT, the lenders need

to set up a committee of creditors that will come up with a plan on how the asset will be tackled. If the committee is unable to find a solution within 180 days ? This can be extended to 270 days? The borrowing entity will go into liquidation. While Bhushan Steel has a gross debt of Rs.44,477 crore to the banks; Bhushan Steel and Power has it over Rs.37,000 crore. Their former has 5.6 mtpa steel-making capacity while the later has 2.3 mtpa.


  • National Company Law Tribunal will on Wednesday hear the insolvency proceedings against Bhushan Steel and Bhushan Power and Steel, respectively, filed by public sector lender State Bank of India and Punjab National Bank
  • The Principal Bench of the NCLT, headed by its President Justice M M Kumar, had on July 13 directed Bhushan Steel and Bhushan Power and Steel to file their objections, if any, by Monday
  • The two firms are among the 12 stressed assets, with a combine exposure of around Rs.2.4 lakh crore, identified by the RBI under insolvency and bankruptcy law
  • While Bhushan Steel has a gross debt of Rs.44,477 crore to the banks; Bhushan Steel and Power has it over Rs.37,000 crore


Insolvency proceedings to begin against Essar Steel (July 18, 2017)

Essar Steel Limited on Monday lost the first round of legal battle against the insolvency proceedings initiated against it by the State Bank of India and Standard Chartered Bank. The court also passed an observation against the Reserve Bank of India (RBI) for issuing advise as press release instead of following constitutional mandates. The National Company Law Tribunal (NCLT) can now proceed with the petitions filed by the two banks against the steel company. The single bench justice S G Shah, while rejecting the Essar Steel Limited’s petition that had challenged the RBI directive to the SBI to initiate insolvency proceedings, concluded, “It can’t be held that the banking company is not entitled to initiate insolvency proceedings without the direction of the RBI. Neither can it be said that the classification or such classification is arbitrary and discriminatory. So, the prayer of the petitioner to quash the RBI directive is rejected.” The court also concluded, “Insolvency and Bankruptcy Code - Act (ICB), may be drastic to some, but, since it is part of statute, which has not been declared unconstitutional yet, it is to be followed in consonance with the mandates of the constitution by all concerned.”

At the same time, the court observed against the RBI, “It should be careful while issuing press releases, it has to be in consonance with the constitutional mandates, based upon sound principles of law; it can’t be in the form of advice, guidelines, directive to judicial or quasi- judicial authorities in any manner.” Dismissing the petition against the Standard Chartered Bank (SCB), the court cited that the

Supreme Court order in Ionics Metaliks, according to which no order (writ) can be issued against the SCB. At the same time, the court also concluded that the RBI press release is not binding to the SCB and just because the SCB had communicated with Joint Lenders Forum regarding the restructuring proposal,it is not enough reason to say it can’t initiate insolvency proceedings against the petitioner.

Essar Steel, in the beginning of this month, had challenged insolvency proceedings initiated by two banks against it for its nonperforming assets. Banks had filed petition before the NCLTAhmedabad. Essar’s NPA with SBI-led consortium is to the tune of Rs 35,000 crore, whereas the SCB’s NPA is $481 million. Essar had challenged the proceedings on the ground of classification and being arbitrary decision without giving any hearing to it. That was opposed by the RBI, SBI and SCB. The RBI’s stand was that the IBC Act came into force from December 2016, and banks don’t need any directive for the insolvency proceedings as the action is in the interest of the national economy. Whereas the SCB’s stand was its act is independent and has nothing to do with the RBI directive and it had informed the petitioner way back in January 2017 about its intention to go against it in NCLT.

SBI waives charge on IMPS fund transfer of up to Rs.1,000 (July 13, 2017)

THE country’s largest lender, State Bank of India (SBI), has revised the fee it charges on Immediate Payment Service (IMPS) for transferring money. There won’t be any charges for fund transfers up to Rs.1,000, according to the SBI website. For transfers from Rs.1,001 to Rs.1 lakh, the charge is Rs.5 plus goods and services tax (GST). For transfers from Rs.100,001 to Rs.2 lakh, users would need to pay a charge of Rs.15, plus GST.

For transfer amount of Rs.2,00,001 to Rs.5 lakh, the charge is Rs.25 per transaction, plus GST. “In order to promote small ticket size transactions, SBI has waived off IMPS charges for transfers of up to Rs.1,000,” the bank said while informing about the revised IMPS transfer charges under the GST regime.

Immediate Payment Service (IMPS) is an instant interbank electronic fund transfer service through mobile phones. It is also being extended through other channels such as ATM, internet banking etc. Banks have been revising their charges for various services post the implementation of GST, which has put banking and financial services under the tax bracket of 18 per cent from 15 per cent earlier.

SBI chief minces no words, says NPAs not a crime (July 12, 2017)

IN a bold statement, State Bank of India chief Arundhati Bhattacharya (in pic) on Tuesday said NPAs shouldn’t be treated as a crime as failures are normal for entrepreneurs. “In India, NPA (non-performing asset) is treated as criminal,which it should not be. There is no permission for failures. Permission to fail is not given by the society. But failures will take place in case of entrepreneurs and entrepreneurship,” she said at a FICCI-organised banking conclave here. Raising a fundamental point, the chief of SBI, which is in the process of making NPA resolutions of large corporate accounts, said that loans were given at a time when the GDP growth had been hovering at 8.5 per cent and it was not expected that the accounts would turn bad.

“But the GDP growth had fallen to four per cent which resulted in piling up of huge NPAs in the banking sector”, she said. She however, pointed out that these accounts were five per cent of the whole lot. Known for not mincing works, Bhattacharya on two earlier occasions had said that banks needed some more clarity and dispensations to resolve the stressed assets problem SHE had also said that banks should be allowed to amortise losses on account of haircuts they would have to take while resolving a bad asset. “If in case we need deeper haircuts, then can they be spread over a few quarters? In case we need certain types of instruments or conversion then for conversion canSebi extend what they have allowed in SDR for these conversions as well?”

Bhattacharya had said. On Tuesday she said, “The banking sector has, in one voice, asked for the Bankruptcy Code. So, we have to understand that we are a maturing economy, more and more we are evolving. As the country matures and evolves, it is necessary to have a judicial framework for orderly resolutions of assets. We cannot have makeshift structures that we were having earlier. So, we have been asking for a bankruptcy law and that has come.” Bhattacharya said, “Now, the reason why we have not been rushing towards this is because with the law also you need to set up the ecosystem.

First of all the (NCLT) bench has to be created, people have to be deputed on the bench, next you need to create an information utility, which has still not come. The information utility will tell the court that is the amount is due to a particular client and what are the securities available, this will create one time information for the court so that it does not have to go for place to place in order to determine what is the indebtedness. The third thing what is required is the resolution professionals, now these professionals needed to pass an examination and need to be registered with the NCLT.”

Future is tense, says SBI study on state finances (July 12, 2017)

In the backdrop of increasing strain on the states’ finances, the situation could turn ‘tense’ for many of them, according to a study by State Bank of India. According to the study conducted by SBI economists, even the states eligible for additional borrowings during 2017-18 have recently witnessed fiscal deterioration.

Fiscal deficit According to the 14th Finance Commission, all the states are required to keep fiscal deficit under 3 per cent of the Gross State Domestic Product (GSDP) from 2015-16 to 2019-20. Approval for market borrowings will be given to the states only on the basis of compliance to the fiscal prudence norms prescribed by the Commission. The norms include a lower state GSDP-debt ratio not exceeding 25 per cent in the preceding year and certain limits on interest payments/revenue receipts. “In our analysis, out of the major 17 non-special category states in the country, there were only eight states (that) satisfied the necessary conditions and at least one of the sufficient conditions, (to become) eligible for additional borrowing in 2017-18,’’ the SBI study said.

Qualifying states Out of the eight states, seven – Bihar, Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Odisha and Telangana – satisfied the required norms and are eligible to have a maximum GFD/ GSDP ratio of 3.5 per cent while Gujarat only partly meets criteria and is eligible to a GFD/ GSDP ratio of 3.25 per cent, as per the study. This means that it will be tough for the remaining nonspecial category states such as Andhra Pradesh to raise funds.

Loan waivers States that have recently waived farm loans will find it difficult to raise funds without market borrowing in financing the additional burden. “We estimate that while Karnataka have the luxury of mobilising the entire debt waiver amount through market borrowings/non-tax revenue, Maharashtra is also well positioned to mobilise Rs.11,000 crore from the non-tax and remaining Rs.19,000 crore from borrowings,’’ the study said. However, Uttar Pradesh and Punjab that have also waived farm loans recently are not eligible for any relaxation for additional market borrowings during 2017-18. All theseindicates that there is pressure even on the well-off states for mobilising resources. It remains to be seen if the introduction of GST could provide afiscal buoyancy to states, the study said.

SBI to put more retail products in digital space (July 12, 2017)

The country's largest lender State Bank of India (SBI)on Tuesday said itwould put more retail products in the digital space, and use analytics to study spending habits. "Inthedigitalspace, the SBI will now put more retail products. Adoption in the digital space will be quicker, asopposed to conventional transactional banking," said SBI Chairman Arundhati Bhattacharya.She said that the bank using the digital space would be married to analytics. PTH

Baba Ramdev Throws Weight Behind India Inc (July 07, 2017)

At a discussion on leadership during the State Bank of India Banking and Economics Conclave on Thursday, the panellists and audience got some expert tips to deal with a problem that is a concern for most belly fat. As the panel discussion was to end, PatanjaliAyurved founder and yoga guru Baba Ramdev, one of the panellists, held a brief session for the leaders of Corporate India on Kapalbhati Pranayama. The breathing technique, he said, helps reduce belly fat and stress, as well as control blood cholesterol. Ramdev, in his saffron robes, said despite founding a huge FMCG company, Patanjali, he does not lose sleep or put on weight because of his yoga routine. “You all put on weight with work … Everyone must do yoga at least one hour in the morning,” he advised the audience.

NitiAayog chief executive Amitabh Kant, legal firm AZB’s owner Zia Mody and digital payment company Itzcash managing director Naveen Surya also came together for the panel discussion, moderated by SBI chairman Arundhati Bhattacharya. Indians need to start respecting businessmen and entrepreneurs, Ramdev said. “Abusing businessmen should be banned in the Indian Parliament … you want their taxes, you want their money to fund your political parties … stop cursing them … every businessman is not a thief.” The panel discussed the importance of entrepreneurs, especially women entrepreneurs, in fuelling India’s growth. It called for a change in the mindset of Indians towards entrepreneurial failure. Kant cited a report by McKinsey Global Institute, which stated that at 17%, India has a lower share of women’s contribution to GDP than the global average of 37%. “Growth in India cannot happen without women’s contribution. Gender parity and social development is needed. Uttar Pradesh, Bihar, Jharkhand and Chhattisgarh need focus on health and education of women,” said Kant.

SBI initiates proceedings against Electrosteel Steels (July 01, 2017)

CONSORTIUM leader State Bank of India (SBI) has initiated insolvency proceedings before the National Company Law Tribunal (NCLT) against K o l k a t a - b a s e d Electrosteel Steels to recover Rs.10,000 crore in loans as bankers tighten screws on big corporate defaulters. The company said in a regulatory filing that SBI has initiated the corporate insolvency resolution process and filed the documents with NCLT, Kolkata, against it under the Insolvency and Bankruptcy Code (IBC), 2016. The action follows the meeting of lenders to the company on June 22 to work out resolution mechanism, it said. For the fourth quarter ended March 31, 2017, Electrosteel Steels had reported a net loss of Rs.293.33 crore as against a net profit of Rs.265.14 crore in the year-ago quarter. The lead banker to defaulters like Bhushan Steel and Essar Steel, SBI had said last week that the default cases would be referred to the NCLT for recovery under the IBC. While Bhushan Steel is in default of Rs.44,478 crore to banks, Essar Steel owes Rs.37,284 crore. Electrosteel Steels owes Rs.10,273.6 crore.

These three borrowers are among the 12 accounts identified by the Reserve Bank of India (RBI) for immediate reference to the NCLT. The 12 accounts alone constitute a quarter of the over Rs 8 lakh crore of non-performing assets (NPAs) or bad loans. Of the total, Rs 6 lakh crore are with public sector banks. LancoInfratech has also said RBI has directed its lead banker IDBI Bank to initiate insolvency procedure. Once a case is referred to NCLT, there is a 180-day time-frame to decide on a resolution plan though 90 days can be given in addition. If a plan is not decided, then the company will go into liquidation. The internal advisory committee of the RBI, after its meeting on June 13, had recommended 12 accounts totalling about 25% of the gross NPAs of the banking system for immediate reference under IBC. These accounts have an exposure of more than Rs.5,000 crore each, with 60% or more classified as bad loans by banks as of March 2016.