Jet Airways Ltd's shares climbed about 8.5 per cent on Tuesday to a near two-month high after founder and chairman Naresh Goyal stepped down and lenders took control of the airline, in an attempt to rescue it from bankruptcy.

Banks have moved in to take a majority stake in the airline after Jet failed to convince potential investors, including its largest shareholder Etihad Airways, to save the airline.

Under the rescue plan, Jet's lenders, led by State Bank of India (SBI), will issue a loan of 15 billion rupees ($218 million) to meet the airline's obligations and will form an interim management committee to oversee operations.

On Monday, Jet shares soared 17.5 per cent in intraday trade after reports said Goyal and his wife would leave the board.

Burdened with more than $1 billion of debt, Jet is struggling to stay afloat. It has delayed payments to banks, suppliers, pilots and lessors - some of which have forced the airline to ground as many as 40 planes.

Shares of Jet Airways rose as much as 8.6 per cent to 275.90 rupees, highest since February 1, on Tuesday. 
&nbsp;

Jet Airways Ltd's shares climbed about 8.5 per cent on Tuesday to a near two-month high after founder and chairman Naresh Goyal stepped down and lenders took control of the airline, in an attempt to rescue it from bankruptcy.

Jet Airways Ltd's shares climbed about 8.5 per cent on Tuesday to a near two-month high after founder and chairman Naresh Goyal stepped down and lenders took control of the airline, in an attempt to rescue it from bankruptcy. Banks have moved in to take a majority stake in the airline after Jet failed to convince potential investors, including its largest shareholder Etihad Airways, to save the airline. Under the rescue plan, Jet's lenders, led by State Bank of India (SBI), will issue a loan of 15 billion rupees ($218 million) to meet the airline's obligations and will form an interim management committee to oversee operations. On Monday, Jet shares soared 17.5 per cent in intraday trade after reports said Goyal and his wife would leave the board. Burdened with more than $1 billion of debt, Jet is struggling to stay afloat. It has delayed payments to banks, suppliers, pilots and lessors - some of which have forced the airline to ground as many as 40 planes. Shares of Jet Airways rose as much as 8.6 per cent to 275.90 rupees, highest since February 1, on Tuesday.

Jet Airways shares soar after founder Goyal exits

State Bank of India's (SBI) chairman said on Wednesday that putting Jet Airways into bankruptcy is the "last option" and that its lenders are making every effort to keep the airline flying.

"We believe that it is in everybody's interest that Jet Airways continues to fly," SBI chairman Rajnish Kumar told reporters after a meeting with government officials, adding that placing Jet into bankruptcy would mean grounding the airline.

<a href="https://www.wionews.com/india-news/dgca-reviews-jet-airways-performance-on-operational-airworthiness-passenger-facilitation-204362">Jet has racked up over $1 billion in debt</a>, and owes money to banks, suppliers, pilots and lessors - some of whom have started terminating their lease deals with the carrier.

The government has asked state-run banks to rescue Jet without pushing it into bankruptcy, two people within the administration have told Reuters as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election.

New Delhi has urged state-run banks, led by SBI, to convert debt into equity and take a stake in Jet, which would, however, be "transitory", in a rare move in India to use taxpayer money to save a struggling private sector company.

Kumar, however, said that any decision taken to rescue Jet is a commercial one and is not at the direction of the Indian government. He was speaking after a meeting with officials from the prime minister's office and finance and civil aviation ministries to discuss the rescue plan for Jet Airways.

Talks with Abu Dhabi-based carrier Etihad, Jet's largest shareholder, to secure a rescue deal are ongoing, the SBI chief said, adding that there is also the possibility of bringing in a new investor.

Kumar said that a resolution plan is "almost" ready and that it would not involve a bailout for any individual or the airline's founder Naresh Goyal.

A spokesman for the opposition Congress party earlier on Wednesday held a press conference during which they alleged Modi's ruling Bharatiya Janata Party (BJP) was using state-run banks like SBI to bailout a bankrupt, private airline.

This came a day after Reuters reported how the government is playing a crucial behind-the-scenes role to rescue Jet.

"On one hand, (the) Modi government is seeking to privatise Air India and on the other hand they are buying a bankrupt private airline with public money," Randeep Singh Surjewala, a spokesman for the Congress party, said.

State Bank of India's (SBI) chairman said on Wednesday that putting Jet Airways into bankruptcy is the "last option" and that its lenders are making every effort to keep the airline flying.

State Bank of India's (SBI) chairman said on Wednesday that putting Jet Airways into bankruptcy is the "last option" and that its lenders are making every effort to keep the airline flying. "We believe that it is in everybody's interest that Jet Airways continues to fly," SBI chairman Rajnish Kumar told reporters after a meeting with government officials, adding that placing Jet into bankruptcy would mean grounding the airline. Jet has racked up over $1 billion in debt, and owes money to banks, suppliers, pilots and lessors - some of whom have started terminating their lease deals with the carrier. The government has asked state-run banks to rescue Jet without pushing it into bankruptcy, two people within the administration have told Reuters as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election. New Delhi has urged state-run banks, led by SBI, to convert debt into equity and take a stake in Jet, which would, however, be "transitory", in a rare move in India to use taxpayer money to save a struggling private sector company. Kumar, however, said that any decision taken to rescue Jet is a commercial one and is not at the direction of the Indian government. He was speaking after a meeting with officials from the prime minister's office and finance and civil aviation ministries to discuss the rescue plan for Jet Airways. Talks with Abu Dhabi-based carrier Etihad, Jet's largest shareholder, to secure a rescue deal are ongoing, the SBI chief said, adding that there is also the possibility of bringing in a new investor. Kumar said that a resolution plan is "almost" ready and that it would not involve a bailout for any individual or the airline's founder Naresh Goyal. A spokesman for the opposition Congress party earlier on Wednesday held a press conference during which they alleged Modi's ruling Bharatiya Janata Party (BJP) was using state-run banks like SBI to bailout a bankrupt, private airline. This came a day after Reuters reported how the government is playing a crucial behind-the-scenes role to rescue Jet. "On one hand, (the) Modi government is seeking to privatise Air India and on the other hand they are buying a bankrupt private airline with public money," Randeep Singh Surjewala, a spokesman for the Congress party, said.

SBI Chairman insists bankruptcy 'last option' for Jet Airways

Shares of Jet Airways Ltd jumped as much as 6 per cent on Friday, a day after two sources told Reuters that<a href="http://www.wionews.com/business-economy/jet-airways-founder-naresh-goyal-agrees-to-step-down-as-chairman-sources-200362"> founder Naresh Goyal had agreed to step down as chairman</a>.

Goyal, who founded the full-service carrier 25 years ago, has also agreed to reduce his 51 per cent stake in the airline but would continue to be a part of the company in some capacity even after stepping down as chairman, one of the sources said.

Jet, saddled with over $1 billion debt, had a rough 2018 as competition intensified in the Indian skies, the rupee depreciated and high oil prices squeezed margins.

Jet did not respond to an email seeking comments. The company had said last week that its board had approved a rescue deal which will make its lenders, led by State Bank of India (SBI), its largest shareholder.

The airline was also forced to ground another six planes on Thursday due to non-payment of dues to lessors, taking the tally to 19 which is about 15 per cent of its fleet. It has a fleet of about 123, mainly Boeing Co planes, including 16-owned aircraft.

The stock posted its biggest daily percentage gain since February 15, hitting a high of 237.05 rupees. It was last up 4.4 per cent as of 0347 GMT.

Shares of Jet Airways Ltd jumped as much as 6 per cent on Friday, a day after two sources told Reuters that founder Naresh Goyal had agreed to step down as chairman.

Shares of Jet Airways Ltd jumped as much as 6 per cent on Friday, a day after two sources told Reuters that founder Naresh Goyal had agreed to step down as chairman. Goyal, who founded the full-service carrier 25 years ago, has also agreed to reduce his 51 per cent stake in the airline but would continue to be a part of the company in some capacity even after stepping down as chairman, one of the sources said. Jet, saddled with over $1 billion debt, had a rough 2018 as competition intensified in the Indian skies, the rupee depreciated and high oil prices squeezed margins. Jet did not respond to an email seeking comments. The company had said last week that its board had approved a rescue deal which will make its lenders, led by State Bank of India (SBI), its largest shareholder. The airline was also forced to ground another six planes on Thursday due to non-payment of dues to lessors, taking the tally to 19 which is about 15 per cent of its fleet. It has a fleet of about 123, mainly Boeing Co planes, including 16-owned aircraft. The stock posted its biggest daily percentage gain since February 15, hitting a high of 237.05 rupees. It was last up 4.4 per cent as of 0347 GMT.

Jet Airways shares rise after report of chairman stepping down

Jet Airways Chairman Naresh Goyal has told the State Bank of India (SBI) that he is ready to invest up to Rs 700 crore in the airline on the condition that his stake does not fall below 25 per cent.

Goyal's offer comes against the backdrop of strategic partner Etihad reportedly putting forward strict conditions, including that Goyal should give up control, for infusing funds into the crisis-hit carrier.

In a letter to SBI Chairman Rajnish Kumar, Goyal said he is writing with reference to the resolution plan under discussion and in view of Etihad's position, "despite the significant cash crunch and imminent grounding, which the airline is facing".

Goyal said he is committed to an "infusion of funds into the company to the extent of Rs 700 crore" and pledging all his shares.

This is subject to the condition that his shareholding post such infusion is at least 25 per cent, he said in the letter which was seen by PTI.

"Should this not be possible, then I would not be able to infuse any funds or pledge my shares unless Sebi accords me an exemption permitting me to increase my reduced stake (if it is to be below 25 per cent) without triggering the Takeover Code," as per the letter.

When shareholding of an entity in a listed company goes beyond a certain threshold, then the open offer requirement is triggered under Sebi's Takeover Code.

SBI is the lead lender of a consortium of Indian banks that have provided loans to the airline; and the stakeholders are considering a resolution for Jet Airways, which is facing acute financial problems.&nbsp;

Jet Airways Chairman Naresh Goyal has told the State Bank of India (SBI) that he is ready to invest up to Rs 700 crore in the airline on the condition that his stake does not fall below 25 per cent.

Jet Airways Chairman Naresh Goyal has told the State Bank of India (SBI) that he is ready to invest up to Rs 700 crore in the airline on the condition that his stake does not fall below 25 per cent. Goyal's offer comes against the backdrop of strategic partner Etihad reportedly putting forward strict conditions, including that Goyal should give up control, for infusing funds into the crisis-hit carrier. In a letter to SBI Chairman Rajnish Kumar, Goyal said he is writing with reference to the resolution plan under discussion and in view of Etihad's position, "despite the significant cash crunch and imminent grounding, which the airline is facing". Goyal said he is committed to an "infusion of funds into the company to the extent of Rs 700 crore" and pledging all his shares. This is subject to the condition that his shareholding post such infusion is at least 25 per cent, he said in the letter which was seen by PTI. "Should this not be possible, then I would not be able to infuse any funds or pledge my shares unless Sebi accords me an exemption permitting me to increase my reduced stake (if it is to be below 25 per cent) without triggering the Takeover Code," as per the letter. When shareholding of an entity in a listed company goes beyond a certain threshold, then the open offer requirement is triggered under Sebi's Takeover Code. SBI is the lead lender of a consortium of Indian banks that have provided loans to the airline; and the stakeholders are considering a resolution for Jet Airways, which is facing acute financial problems.

Ready to infuse up to Rs 700 crore in Jet Airways subject to conditions, says Naresh Goyal

Notwithstanding the positive signs in the Indian banking sector, fundamentals still remain a long way from returning to "healthy level", a DBS report said on Friday.

According to the global financial services major, the recent second quarter earnings of Indian banks showed some positive signs with a slight improvement in asset quality.

Overall, most banks showed a reduction in gross non-performing loans (NPLs) and lower formation of new NPLs. Some banks also expect further improvement in asset quality in the coming quarters, noted the report.

Lower credit costs also helped the bottom line of the banks, as the countries two leading lenders - State Bank of India and ICICI Bank - returned to profit in the September quarter after reporting losses in the prior quarter.

"Gross NPL ratio of our sample remains above 10 per cent while capitalisation remains just about adequate (Tier I ratio of 9-10 per cent)," DBS said in a research note adding, the government is expected to maintain capital levels of banks through periodic equity injection.

The report further noted that asset quality issues are unlikely to be resolved without "exceptional measures", and hence will remain a long-term issue.

DBS, however, cautioned that the recent improvements seen could slow down as recoveries from ongoing bankruptcy resolutions get more challenging once the better quality assets are sold.

The valuation of American bonds held by Indian banks remains relatively expensive and do not offer much upside from current levels. Hence, the bonds have not reacted to the second quarter results unlike equities of the banks which have seen a rally.

"That said, bond valuations are driven by government ownership and supported by the strong technicals (absence of new bond supply). At best, Indian bank bonds are suitable for buy and hold investors for coupon carry," the report said.

Notwithstanding the positive signs in the Indian banking sector, fundamentals still remain a long way from returning to "healthy level", a DBS report said on Friday.

Notwithstanding the positive signs in the Indian banking sector, fundamentals still remain a long way from returning to "healthy level", a DBS report said on Friday. According to the global financial services major, the recent second quarter earnings of Indian banks showed some positive signs with a slight improvement in asset quality. Overall, most banks showed a reduction in gross non-performing loans (NPLs) and lower formation of new NPLs. Some banks also expect further improvement in asset quality in the coming quarters, noted the report. Lower credit costs also helped the bottom line of the banks, as the countries two leading lenders - State Bank of India and ICICI Bank - returned to profit in the September quarter after reporting losses in the prior quarter. "Gross NPL ratio of our sample remains above 10 per cent while capitalisation remains just about adequate (Tier I ratio of 9-10 per cent)," DBS said in a research note adding, the government is expected to maintain capital levels of banks through periodic equity injection. The report further noted that asset quality issues are unlikely to be resolved without "exceptional measures", and hence will remain a long-term issue. DBS, however, cautioned that the recent improvements seen could slow down as recoveries from ongoing bankruptcy resolutions get more challenging once the better quality assets are sold. The valuation of American bonds held by Indian banks remains relatively expensive and do not offer much upside from current levels. Hence, the bonds have not reacted to the second quarter results unlike equities of the banks which have seen a rally. "That said, bond valuations are driven by government ownership and supported by the strong technicals (absence of new bond supply). At best, Indian bank bonds are suitable for buy and hold investors for coupon carry," the report said.

Indian banks showing positive signs but fundamentals still weak: Report

The country's largest lender SBI today posted a standalone net loss of Rs 7,718.17 crore for the March quarter due to higher non-performing assets (NPAs).

The bank had reported a net profit of Rs 2,814.82 crore in the corresponding period of 2016-17.

Sequentially, the loss widened from Rs 2,416.37 crore in the third quarter ended December 2017.

Total income during the January-March quarter was up at Rs 68,436.06 crore, from Rs 57,720.07 crore in the same period a year earlier, the bank said in a regulatory filing.

Gross NPAs, as a percentage of gross loans, jumped to 10.91 per cent from 6.90 per cent at March-end 2017.

Net NPAs rose to 5.73 per cent of the net advances compared to 3.71 per cent last year.

Stock of SBI was trading 5.2 per cent up at Rs 257.85 on BSE in afternoon trade.&nbsp

Gross NPAs, as a percentage of gross loans, jumped to 10.91 per cent from 6.90 per cent at March-end 2017.

The country's largest lender SBI today posted a standalone net loss of Rs 7,718.17 crore for the March quarter due to higher non-performing assets (NPAs). The bank had reported a net profit of Rs 2,814.82 crore in the corresponding period of 2016-17. Sequentially, the loss widened from Rs 2,416.37 crore in the third quarter ended December 2017. Total income during the January-March quarter was up at Rs 68,436.06 crore, from Rs 57,720.07 crore in the same period a year earlier, the bank said in a regulatory filing. Gross NPAs, as a percentage of gross loans, jumped to 10.91 per cent from 6.90 per cent at March-end 2017. Net NPAs rose to 5.73 per cent of the net advances compared to 3.71 per cent last year. Stock of SBI was trading 5.2 per cent up at Rs 257.85 on BSE in afternoon trade.

SBI posts record quarterly loss

SBI today said people in smaller towns can withdraw up to Rs 2,000 a day from its PoS machines at retail outlets free of charge, a move aimed at easing cash crunch in some parts of the country.

As per the RBI guidelines, the withdrawal limit from PoS machines at retail outlets in Tier 1 and 2 cities is Rs 1,000 per card, per day and Rs 2,000 in smaller towns.

"For withdrawals up to Rs 2000, @TheOfficialSBI has cash@POS facility @ 4.78 lac POS machines.

"Customer can use SBI & any other bank debit card to withdraw cash up to Rs 1,000 in Tier 3 to 6 & up to Rs 1,000 in Tier 1 & 2 cities per card per day presently without any charges," said Neeraj Vyas, DMD (chief operating officer) of SBI in a tweet.

SBI has a total of 6.08 lakh PoS machines of which 4.78 lakh are enabled to dispense cash to the customers of SBI as well as other banks which offer this facility. There have been reports of ATMs running dry from Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Uttar Pradesh and Bihar.

While talking to reporters here this morning, SBI Chairman Rajnish Kumar said the problem of cash crunch being faced in some states will be resolved by tomorrow as currency is being transported to areas which are facing the shortage.

"It is not a uniform cash crunch problem. It is there in geographies like Telangana and Bihar. We are hoping that the problem will be resolved by tomorrow because cash is in transition and it is reaching these states by today evening," Kumar said.&nbsp;

SBI has a total of 6.08 lakh PoS machines of which 4.78 lakh are enabled to dispense cash to the customers of SBI as well as other banks which offer this facility

SBI today said people in smaller towns can withdraw up to Rs 2,000 a day from its PoS machines at retail outlets free of charge, a move aimed at easing cash crunch in some parts of the country. As per the RBI guidelines, the withdrawal limit from PoS machines at retail outlets in Tier 1 and 2 cities is Rs 1,000 per card, per day and Rs 2,000 in smaller towns. "For withdrawals up to Rs 2000, @TheOfficialSBI has cash@POS facility @ 4.78 lac POS machines. "Customer can use SBI & any other bank debit card to withdraw cash up to Rs 1,000 in Tier 3 to 6 & up to Rs 1,000 in Tier 1 & 2 cities per card per day presently without any charges," said Neeraj Vyas, DMD (chief operating officer) of SBI in a tweet. SBI has a total of 6.08 lakh PoS machines of which 4.78 lakh are enabled to dispense cash to the customers of SBI as well as other banks which offer this facility. There have been reports of ATMs running dry from Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Uttar Pradesh and Bihar. While talking to reporters here this morning, SBI Chairman Rajnish Kumar said the problem of cash crunch being faced in some states will be resolved by tomorrow as currency is being transported to areas which are facing the shortage. "It is not a uniform cash crunch problem. It is there in geographies like Telangana and Bihar. We are hoping that the problem will be resolved by tomorrow because cash is in transition and it is reaching these states by today evening," Kumar said.

Withdraw up to Rs 2,000 from PoS machines free of charge: SBI

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come.

The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts.

To force its point home, the Reserve Bank of India (RBI) set strict timelines for lenders to take action against defaulters, threatening penalties if banks failed to act in a timely manner.

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<h5>India&#39;s bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending &mdash; the combination has choked new lending and dragged on the economy</h5>
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Soured loans, which include non-performing, restructured or rolled-over loans, reached a record high of 9.5 trillion rupees ($148 billion) in the middle of last year before dipping slightly and prompting some relief among bankers that the worst was over. State-run lenders account for the bulk of these loans.

India&#39;s bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending - the combination has choked new lending and dragged on the economy.

Analysts say the actual level of bad loans is higher than the official figures suggest, pointing to central bank audits of banks, including State Bank of India, that showed non-performing loans were higher than reported for the financial year ended March 2017. Banks have also been blamed for perpetually renewing loans on soured assets.

Most of the loan-restructuring schemes that the central bank is withdrawing have seen little success. Analysts say banks will soon have to declare the loans in those schemes as non-performing loans, which will trigger the timeline for banks to take debtors to court.

That means the banking sector will have to recognise the new status of the loans and make provisions for them, said Rajkiran Rai, chief executive at state-run Union Bank of India.

&quot;When you look at the short term, yes, we will have issues with the existing accounts,&quot; Rai said.

Longer term, the RBI&#39;s measure will benefit banks, he said.

Indeed, the new rules would bring discipline to the banking sector, although provisioning costs will shoot up as more borrowers are taken to court, said R. Subramaniakumar, chief executive at Indian Overseas Bank, a state-run lender with the second-highest bad loan ratio among all banks.

&quot;Of course it&#39;s going to put pressure on bank&#39;s balance sheets,&quot; he said, adding capital injections announced by the government will help cushion the impact.

The RBI&#39;s decision to force more struggling borrowers into bankruptcy proceedings was its latest move to try to clean up India&#39;s bad loans mess.

Last year, it ordered about 40 of the country&#39;s largest debt defaulters into bankruptcy courts, demanding creditors put aside at least 50 percent of loan amounts in provisioning.

Under the new process, the RBI requires banks to figure out plans to resolve debts of defaulters with 20 billion rupees ($311 million) or more in outstanding debt by Sept. 1, or take them to bankruptcy court.

Since 50 percent provisioning will be required for these bankruptcy cases as well, the total funds that banks will have to set aside will shoot up, pressuring profits, analysts said.

Moody&#39;s Indian affiliate ICRA estimates the criteria would net 50 defaulting companies with combined outstanding debt of 2.46 trillion rupees ($38 billion), so banks&#39; credit provisions will spike.

India Ratings and Research, the local affiliate of Fitch, said banks&#39; non-performing loans and provisions will shoot up in coming months, said analyst Udit Kariwala.

Rajeev Kumar, the top government bureaucrat overseeing the banking sector, said the new rules will impact 2-3 percent of banks&#39; loan books, while provisions could rise a &quot;little&quot;, financial news service NewsRise reported.

Bank shares slid on Wednesday, with the sector index falling 1.4 percent compared with a 0.4 percent fall in the broader market.

New RBI rules are stoking the banks' fears that the worst of the soured-loans buildup is yet to come

Just when many Indian banks thought the worst of their bad debt woes were behind them, new central bank rules are stoking fears that the worst of the soured-loans buildup is yet to come. The central bank surprised the financial sector this week by halting all of its existing loan-restructuring mechanisms with immediate effect, and rolling out new rules that will push more debt defaulters into bankruptcy courts. To force its point home, the Reserve Bank of India (RBI) set strict timelines for lenders to take action against defaulters, threatening penalties if banks failed to act in a timely manner. India's bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending — the combination has choked new lending and dragged on the economy × Soured loans, which include non-performing, restructured or rolled-over loans, reached a record high of 9.5 trillion rupees ($148 billion) in the middle of last year before dipping slightly and prompting some relief among bankers that the worst was over. State-run lenders account for the bulk of these loans. India's bad loans have nearly doubled in the past four years following an economic slow down and years of profligate lending - the combination has choked new lending and dragged on the economy. Analysts say the actual level of bad loans is higher than the official figures suggest, pointing to central bank audits of banks, including State Bank of India, that showed non-performing loans were higher than reported for the financial year ended March 2017. Banks have also been blamed for perpetually renewing loans on soured assets. Most of the loan-restructuring schemes that the central bank is withdrawing have seen little success. Analysts say banks will soon have to declare the loans in those schemes as non-performing loans, which will trigger the timeline for banks to take debtors to court. That means the banking sector will have to recognise the new status of the loans and make provisions for them, said Rajkiran Rai, chief executive at state-run Union Bank of India. "When you look at the short term, yes, we will have issues with the existing accounts," Rai said. Longer term, the RBI's measure will benefit banks, he said. Indeed, the new rules would bring discipline to the banking sector, although provisioning costs will shoot up as more borrowers are taken to court, said R. Subramaniakumar, chief executive at Indian Overseas Bank, a state-run lender with the second-highest bad loan ratio among all banks. "Of course it's going to put pressure on bank's balance sheets," he said, adding capital injections announced by the government will help cushion the impact. The RBI's decision to force more struggling borrowers into bankruptcy proceedings was its latest move to try to clean up India's bad loans mess. Last year, it ordered about 40 of the country's largest debt defaulters into bankruptcy courts, demanding creditors put aside at least 50 percent of loan amounts in provisioning. Under the new process, the RBI requires banks to figure out plans to resolve debts of defaulters with 20 billion rupees ($311 million) or more in outstanding debt by Sept. 1, or take them to bankruptcy court. Since 50 percent provisioning will be required for these bankruptcy cases as well, the total funds that banks will have to set aside will shoot up, pressuring profits, analysts said. Moody's Indian affiliate ICRA estimates the criteria would net 50 defaulting companies with combined outstanding debt of 2.46 trillion rupees ($38 billion), so banks' credit provisions will spike. India Ratings and Research, the local affiliate of Fitch, said banks' non-performing loans and provisions will shoot up in coming months, said analyst Udit Kariwala. Rajeev Kumar, the top government bureaucrat overseeing the banking sector, said the new rules will impact 2-3 percent of banks' loan books, while provisions could rise a "little", financial news service NewsRise reported. Bank shares slid on Wednesday, with the sector index falling 1.4 percent compared with a 0.4 percent fall in the broader market.

For India's banks, worst of their bad-loan troubles may be still to come

In its largest recruitment drive since 2013, State Bank of India will be hiring nearly 9,500 junior assistants for customer support and sales functions.&nbsp;

The drive is initiated after the bank&#39;s employee headcount reduced to over ten thousand during the current fiscal.&nbsp;

The employees reduced to 2,69,000 by end September compared to 2,80,000 at the beginning of the financial year.&nbsp;

The reduction in the number of employees is due to attrition and voluntary retirement after the merger of associate banks.&nbsp;

The largest number of vacancies are in Uttar Pradesh followed by Maharashtra.&nbsp;

The Indian public sector banking has advertised in the country for filling up the vacancies.&nbsp;

There are over 9,000 vacancies. Out of this more than 1,100 are to clear a backlog in the reserved category.&nbsp;

The bank aims to restructure its staff following the merger of the five associate banks with itself.&nbsp;

An introduction to straight-through processing and digital Banking has reduced the need for administrative staff but has increased the need for more customer-facing employees.&nbsp;

According to the Bank&#39;s management, staff strength could decline further as replacement will not be &quot; Head to Head&quot;.&nbsp;

The drive is initiated after the bank's employee headcount reduced to over ten thousand during the current fiscal

In its largest recruitment drive since 2013, State Bank of India will be hiring nearly 9,500 junior assistants for customer support and sales functions. The drive is initiated after the bank's employee headcount reduced to over ten thousand during the current fiscal. The employees reduced to 2,69,000 by end September compared to 2,80,000 at the beginning of the financial year. The reduction in the number of employees is due to attrition and voluntary retirement after the merger of associate banks. The largest number of vacancies are in Uttar Pradesh followed by Maharashtra. The Indian public sector banking has advertised in the country for filling up the vacancies. There are over 9,000 vacancies. Out of this more than 1,100 are to clear a backlog in the reserved category. The bank aims to restructure its staff following the merger of the five associate banks with itself. An introduction to straight-through processing and digital Banking has reduced the need for administrative staff but has increased the need for more customer-facing employees. According to the Bank's management, staff strength could decline further as replacement will not be " Head to Head".

State Bank to hire over 9,000 employees for customer support, sales

Earlier this year, State Bank of India (SBI) announced merger of&nbsp;its five associate banks, namely State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore along with Bhartiya Mahila Bank. With this development, there have been some new changes in the system.&nbsp;

Indian Financial System Code or IFSC and names of the branches have been changed in some of the major cities such as&nbsp;Mumbai, New Delhi, Bengaluru, Chennai, Kolkata, Hyderabad, and Lucknow.&nbsp;

Commenting on the merger and after effects, Praveen Gupta, Managing Director (Retail and Digital Banking), SBI, said, &quot;Some of our old associate branches are getting merged with SBI branches. When that merger happens, the IFSC codes get changed&quot;. He further added, &quot;Even if some payment comes based on the old IFSC codes, it will get mapped to the new codes. It will not cause any problem to any customer&quot;, alluding to internal mapping system of old codes to new codes. &nbsp;

Nearly 1,300 bank branches will be affected by the change. IFSC is significantly important in money transfer methods like RTGS, NEFT, and IMPS. An IFSC is basically a unique alpha-numeric code of 11-digit to identify all bank branches in any RBI regulated funds transfer system. To help their customers, SBI website published the list of all affected branches with their new codes.

Here is the list of new IFSC codes of SBI branches:

&nbsp;

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Due to the merger of SBI with its five associate banks, names and IFSC of bank branches are to be changed. A list of updated branch names and IFSCs is included.

Earlier this year, State Bank of India (SBI) announced merger of its five associate banks, namely State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore along with Bhartiya Mahila Bank. With this development, there have been some new changes in the system. Indian Financial System Code or IFSC and names of the branches have been changed in some of the major cities such as Mumbai, New Delhi, Bengaluru, Chennai, Kolkata, Hyderabad, and Lucknow. Commenting on the merger and after effects, Praveen Gupta, Managing Director (Retail and Digital Banking), SBI, said, "Some of our old associate branches are getting merged with SBI branches. When that merger happens, the IFSC codes get changed". He further added, "Even if some payment comes based on the old IFSC codes, it will get mapped to the new codes. It will not cause any problem to any customer", alluding to internal mapping system of old codes to new codes. Nearly 1,300 bank branches will be affected by the change. IFSC is significantly important in money transfer methods like RTGS, NEFT, and IMPS. An IFSC is basically a unique alpha-numeric code of 11-digit to identify all bank branches in any RBI regulated funds transfer system. To help their customers, SBI website published the list of all affected branches with their new codes. Here is the list of new IFSC codes of SBI branches:

SBI changes names and IFSC codes of around 1,300 branches. Here's why

The Bombay Stock Exchange (BSE) Sensex climbed as much as 1.6 per cent to a record high of 33,117.33, buoyed by a surge in prices of banking shares after the Cabinet nod to a $32.43 billion plan to recapitalise state banks over the next two years.

State Bank of India, the biggest lender, rose more than 20 per cent. Punjab National Bank, the second biggest public sector lender, surged more than 33 per cent.

Bonds, however, fell, given the injection will be funded with debt, Reuters reported.

The benchmark NSE Nifty rose as much as 1.3 per cent to a record high of 10,340.55.

Bonds fell, with the benchmark 10-year bond yield up 3 basis points to 6.81 percent from its previous close. 
&nbsp;

The BSE Sensex climbed as much as 1.6% to a record high of 33,117.33

The Bombay Stock Exchange (BSE) Sensex climbed as much as 1.6 per cent to a record high of 33,117.33, buoyed by a surge in prices of banking shares after the Cabinet nod to a $32.43 billion plan to recapitalise state banks over the next two years. State Bank of India, the biggest lender, rose more than 20 per cent. Punjab National Bank, the second biggest public sector lender, surged more than 33 per cent. Bonds, however, fell, given the injection will be funded with debt, Reuters reported. The benchmark NSE Nifty rose as much as 1.3 per cent to a record high of 10,340.55. Bonds fell, with the benchmark 10-year bond yield up 3 basis points to 6.81 percent from its previous close.

Sensex at record high, bank shares soar on recapitalisation plan

India&#39;s cabinet approved a Rs 2.11 lakh crore plan on Tuesday to recapitalise its state banks over the next two years, in a bid by Prime Minister Narendra Modi to tackle a major drag on the economy that has frustrated his attempts to boost growth.

Once the world&#39;s fastest-growing major economy, India has seen its growth rate plummet to the lowest in three years, far below levels needed to create enough jobs to absorb the million Indians joining the work force every month.

Modi&#39;s government has tried to respond by stepping up public spending, but the slowdown has stressed its finances, making it imperative for private investment to pick up the slack.

Officials privately admit they have struggled to revive private investment because state-owned banks, which provide much of the credit in the economy, are saddled with a mountain of bad debt that has crimped their ability to offer new credit.

The decision to recapitalise the banks is meant to clear that bottleneck, Finance Minister Arun Jaitley said at a press conference in New Delhi.

&quot;The decision to recapitalise public sector banks with 2.11 lakh rupees will address the bank balance sheet problem and push growth forward,&quot; Jaitley said.

By some estimates, banks need as much as $65 billion in additional capital by March 2019 to fill the hole left by soured loans and to meet new regulatory capital requirements.

The official announcement, which was followed by a series of tweets from government ministers holding it up as &quot;unprecedented&quot;, comes after a flurry of activity in the government over the past few weeks, driven by the prime minister&#39;s office.

Modi, who swept to power in a landslide victory for his Bharatiya Janata Party (BJP) in 2014 promising a reform agenda to revive economic growth, faces state elections later this year and a re-election bid by 2019.

He has faced criticisms after a surprise scrapping of high-value bank notes last November and a new goods and services tax effected earlier this year disrupted businesses across the country.

People close to Modi have previously told Reuters he wants to control the political damage and ensure the economic slowdown remains temporary.

Mohan Guruswamy, an economist in New Delhi, said the government should have taken action three years ago to revive the banking sector.

&quot;Now it&#39;s more expensive, and we will not see results soon,&quot; Guruswamy said.

Fiscal consolidation

Finance ministry officials said the bank recapitalisation would be followed by a series of reforms in the sector. They said the details would come later.

Of the planned 2.11 lakh crore rupees sum, recapitalisation bonds will account for 1.35 lakh crore rupees, while Rs 76,000 crore will come from budgetary support and equity issuance, said Rajiv Kumar, India&#39;s financial services secretary.

It was not immediately clear what the impact will be on the country&#39;s fiscal deficit, which Jaitley aims to keep at 3.2 percent of GDP for the current fiscal year to March.

&quot;India&#39;s banking was the weakest link in the revival of the economy,&quot; said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think-tank partly funded by the finance ministry. &quot;The government should complete the process as early as possible.&quot;

Bhanumurthy added that the move might have an impact on the government&#39;s fiscal deficit target this year.

Twenty one state-run banks account for more than two-thirds of India&#39;s banking assets. But they also account for a bulk of the record 9.5 trillion Indian rupees ($145 billion) of soured loans.

In addition to repairing their balance sheets, the banks need billions of dollars in new capital to meet global Basel III banking rules, due to fully kick in by March 2019.

Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody&#39;s expects the top 11 state lenders alone will need nearly $15 billion.

Bank stocks rallied ahead of the news conference on expectations of a recapitalisation plan. The state bank index closed 3.8 percent higher.

The recapitalisation of the banks should allow them to offer credit again. They have so far been saddled with a mountain of bad debt

India's cabinet approved a Rs 2.11 lakh crore plan on Tuesday to recapitalise its state banks over the next two years, in a bid by Prime Minister Narendra Modi to tackle a major drag on the economy that has frustrated his attempts to boost growth. Once the world's fastest-growing major economy, India has seen its growth rate plummet to the lowest in three years, far below levels needed to create enough jobs to absorb the million Indians joining the work force every month. Modi's government has tried to respond by stepping up public spending, but the slowdown has stressed its finances, making it imperative for private investment to pick up the slack. Officials privately admit they have struggled to revive private investment because state-owned banks, which provide much of the credit in the economy, are saddled with a mountain of bad debt that has crimped their ability to offer new credit. The decision to recapitalise the banks is meant to clear that bottleneck, Finance Minister Arun Jaitley said at a press conference in New Delhi. "The decision to recapitalise public sector banks with 2.11 lakh rupees will address the bank balance sheet problem and push growth forward," Jaitley said. By some estimates, banks need as much as $65 billion in additional capital by March 2019 to fill the hole left by soured loans and to meet new regulatory capital requirements. The official announcement, which was followed by a series of tweets from government ministers holding it up as "unprecedented", comes after a flurry of activity in the government over the past few weeks, driven by the prime minister's office. Modi, who swept to power in a landslide victory for his Bharatiya Janata Party (BJP) in 2014 promising a reform agenda to revive economic growth, faces state elections later this year and a re-election bid by 2019. He has faced criticisms after a surprise scrapping of high-value bank notes last November and a new goods and services tax effected earlier this year disrupted businesses across the country. People close to Modi have previously told Reuters he wants to control the political damage and ensure the economic slowdown remains temporary. Mohan Guruswamy, an economist in New Delhi, said the government should have taken action three years ago to revive the banking sector. "Now it's more expensive, and we will not see results soon," Guruswamy said. Fiscal consolidation Finance ministry officials said the bank recapitalisation would be followed by a series of reforms in the sector. They said the details would come later. Of the planned 2.11 lakh crore rupees sum, recapitalisation bonds will account for 1.35 lakh crore rupees, while Rs 76,000 crore will come from budgetary support and equity issuance, said Rajiv Kumar, India's financial services secretary. It was not immediately clear what the impact will be on the country's fiscal deficit, which Jaitley aims to keep at 3.2 percent of GDP for the current fiscal year to March. "India's banking was the weakest link in the revival of the economy," said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy, a Delhi-based think-tank partly funded by the finance ministry. "The government should complete the process as early as possible." Bhanumurthy added that the move might have an impact on the government's fiscal deficit target this year. Twenty one state-run banks account for more than two-thirds of India's banking assets. But they also account for a bulk of the record 9.5 trillion Indian rupees ($145 billion) of soured loans. In addition to repairing their balance sheets, the banks need billions of dollars in new capital to meet global Basel III banking rules, due to fully kick in by March 2019. Fitch Ratings estimates Indian banks will need $65 billion of additional capital by March 2019 to meet Basel III global banking rules. Moody's expects the top 11 state lenders alone will need nearly $15 billion. Bank stocks rallied ahead of the news conference on expectations of a recapitalisation plan. The state bank index closed 3.8 percent higher.

Public sector banks to get Rs 2.11 lakh crores over next two years

Rajnish Kumar is to be the new chairman of State Bank of India.&nbsp;

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The Appointments Committee of the Cabinet (ACC) appoints Rajnish Kumar as State Bank of India (SBI) Chairman for a period of three years.
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/915527956272787457?ref_src=twsrc%5Etfw">October 4, 2017</a></blockquote>
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Kumar is currently a managing director with the bank.&nbsp;

The announcenment by the government of Kumar&#39;s chairmanship was made Wednesday.&nbsp;

Reuters reported the government as saying in a statement that Kumar would assume chairmanship of the bank on October 7.&nbsp;

It added that he would have three-year term.

He will take over on October 7 and will have a three-year term

Rajnish Kumar is to be the new chairman of State Bank of India. The Appointments Committee of the Cabinet (ACC) appoints Rajnish Kumar as State Bank of India (SBI) Chairman for a period of three years. — ANI (@ANI) October 4, 2017 × Kumar is currently a managing director with the bank. The announcenment by the government of Kumar's chairmanship was made Wednesday. Reuters reported the government as saying in a statement that Kumar would assume chairmanship of the bank on October 7. It added that he would have three-year term.

Rajnish Kumar to be new SBI chairman

Resolution of bad loans in the banking system is on &#39;right track&#39; and will &#39;open the door&#39; to rapid credit expansion and growth, Niti Aayog Vice Chairman Arvind Panagariya has said.

Terming the non-performing assets (NPAs) or bad loans problem as a &#39;legacy issue&#39;, he said that even after three years of the NDA government taking charge, it has not gone away.

&quot;Now we are on absolutely right track. Once we solve the NPAs issue, it will open up also the door to faster credit expansion. If this is done, this problem of twin balance sheet issue (over-leveraged companies and bad-loan-encumbered banks) will get addressed as a the result of this.

&quot;So banks will be better equipped to lend and on the sides of borrowers there will be greater appetite,&quot; Panagariya told PTI.

The banking sector is saddled with NPAs of over Rs 8 trillion (Rs 8 lakh crore), of which Rs 6 trillion is with public sector banks (PSBs).

As part of its strategy to <a href="http://www.wionews.com/south-asia/india-cabinet-clears-ordinance-to-help-banks-recover-bad-loans-from-defaulters-15215" target="_blank">rein in the unacceptable level of NPAs</a>, Reserve Bank of India recently identified 12 accounts for Insolvency and Bankruptcy Code (IBC) proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs of banks.

The 12 identified cases account for 25 per cent or about Rs 2 lakh crore of NPAs.

When asked about his view on merger of a weak bank with a strong bank, the outgoing Vice Chairman of Niti Aayog said that consolidation of public sector banks (PSBs) is necessary, also because the pool of talented people who have the specialisation of running the banking business is limited one.

&quot;So if you have 25 PSBs, then you spread it over too many banks and everybody who is an expert says, we do not have good management, and so consolidation will also bring good management to the banks.

&quot;Then need for number of competent people...Would be smaller if number of banks is smaller,&quot; he noted.

The finance ministry has sought help of NITI Aayog and global consultancy firms to examine the possibility of next round of consolidation of PSU banks with an aim to create a few lenders of global size and scale.

NITI Aayog&#39;s report is expected to set the tone for consolidation roadmap.

Five associate banks and Bharatiya Mahila Bank (BMB) became part of SBI on April 1, 2017, catapulting the country&#39;s largest lender to among the top 50 banks in the world.

Panagariya termed the bad loans problem as a 'legacy issue'

Resolution of bad loans in the banking system is on 'right track' and will 'open the door' to rapid credit expansion and growth, Niti Aayog Vice Chairman Arvind Panagariya has said. Terming the non-performing assets (NPAs) or bad loans problem as a 'legacy issue', he said that even after three years of the NDA government taking charge, it has not gone away. "Now we are on absolutely right track. Once we solve the NPAs issue, it will open up also the door to faster credit expansion. If this is done, this problem of twin balance sheet issue (over-leveraged companies and bad-loan-encumbered banks) will get addressed as a the result of this. "So banks will be better equipped to lend and on the sides of borrowers there will be greater appetite," Panagariya told PTI. The banking sector is saddled with NPAs of over Rs 8 trillion (Rs 8 lakh crore), of which Rs 6 trillion is with public sector banks (PSBs). As part of its strategy to rein in the unacceptable level of NPAs, Reserve Bank of India recently identified 12 accounts for Insolvency and Bankruptcy Code (IBC) proceedings with each of them having over Rs 5,000 crore of outstanding loans, accounting for 25 per cent of total NPAs of banks. The 12 identified cases account for 25 per cent or about Rs 2 lakh crore of NPAs. When asked about his view on merger of a weak bank with a strong bank, the outgoing Vice Chairman of Niti Aayog said that consolidation of public sector banks (PSBs) is necessary, also because the pool of talented people who have the specialisation of running the banking business is limited one. "So if you have 25 PSBs, then you spread it over too many banks and everybody who is an expert says, we do not have good management, and so consolidation will also bring good management to the banks. "Then need for number of competent people...Would be smaller if number of banks is smaller," he noted. The finance ministry has sought help of NITI Aayog and global consultancy firms to examine the possibility of next round of consolidation of PSU banks with an aim to create a few lenders of global size and scale. NITI Aayog's report is expected to set the tone for consolidation roadmap. Five associate banks and Bharatiya Mahila Bank (BMB) became part of SBI on April 1, 2017, catapulting the country's largest lender to among the top 50 banks in the world.

Resolution of bad loans in banking system on 'right track': Arvind Panagariya

State Bank of India is set to hire Bank of America Merrill Lynch, Deutsche Bank, IIFL, JM Financial, Kotak and SBI Capital to manage a share sale of up to 150 billion rupees ($2.3 billion), IFR reported on Friday, citing two sources with knowledge of the plan.

A total 17 banks had bid to underwrite the so-called qualified institutional placement, for which SBI will pay a nominal fee of one rupee, IFR, a Thomson Reuters publication, reported.

($1 = 64.5550 rupees)

(Reuters)

State Bank of India is set to hire Bank of America Merrill Lynch, Deutsche Bank, and three others

State Bank of India is set to hire Bank of America Merrill Lynch, Deutsche Bank, IIFL, JM Financial, Kotak and SBI Capital to manage a share sale of up to 150 billion rupees ($2.3 billion), IFR reported on Friday, citing two sources with knowledge of the plan. A total 17 banks had bid to underwrite the so-called qualified institutional placement, for which SBI will pay a nominal fee of one rupee, IFR, a Thomson Reuters publication, reported. ($1 = 64.5550 rupees) (Reuters)

SBI set to hire six banks for up to $2.3 billion share sale: IFR

By&nbsp;Manju AB

Equated monthly installments (EMIs) on home, car, and education loans will fall by at least half a per cent with banks across the board reducing their lending rates.

On Sunday, India&#39;s largest lender, State Bank of India (SBI), fired the first salvo by reducing its marginal cost-based lending rate (MCLR) by a whopping 0.9 per cent. With this, the bank has cut its benchmark rate by nearly 200 basis points from January 2015. Each basis point is equivalent to one-hundredth of a percentage.

As the deluge of deposits post demonetisation brought down funding costs for the bank and the government wanted to spread some New Year cheer (again post demonetisation), the cost of loans across the board have been made cheaper. The one-year MCLR of SBI, to which most of its loans are linked, is down to 8 per cent from an earlier 8.9 per cent. The reduction of 0.9 per cent is across all maturities.

The SBI action was followed within hours by peers. Punjab National Bank (PNB) has cut its one-year MCLR rate by 0.7 per cent to 8.45 per cent from 9.15 per cent, effective January 1. Similarly, Union Bank of India has reduced its one-year MCLR by 0.65 per cent to 8.65 per cent, effective January 2.

Rajnish Kumar, Managing Director in charge of retail loans, SBI, told DNA: &quot;The reduction will result in all loan rates to come down. For home loans, the reduction will be up to 0.75 per cent, depending on the tenure and the maturity. The quantum of reduction for car loans is being decided. There also we will give a good relief for customers. For a Rs 30 lakh loan for 30 years, the monthly EMI will come down by Rs 1,200.&quot;

The overnight MCLR is down to 7.75 per cent from 8.65 per cen, the one-month MCLR is down to 7.85 per cent from 8.75 per cent, the three-moth MCLR is down to 7.90 per cent from 8.80 per cent, the six-month MCLR is down to 7.95 per cent from 8.85 per cent, and the 2-year MCLR is down to 8.10 per cent from 9 per cent.

The banks cutting their lending rates supplements the sops Prime Minister Narendra Modi promised the housing sector, small and medium enterprises and farmers.

Banking sources say it is only a matter of time before the private sector banks -- ICICI and HDFC -- match the cuts.

Loan rates have no option but to fall, irrespective of what action the Reserve Bank of India (RBI) takes. If you take the latest bank credit and deposit growth rates put out by the central bank, it shows that while bank credit growth is steadily shrinking to 4 per cent, deposit growth, especially savings accounts, have swelled by 15.9 per cent. The wide gap shows the banking system is flush with cash and that lending costs would correspondingly fall.

Last week, the largest private sector lender, ICICI Bank, prepared itself for a lending rate cut by cutting its deposit rates to 7.5 per cent for a 390-day fixed deposit and 7 per cent for senior citizens, reducing rates by 0.10 per cent to 0.25 per cent on various maturities.

RBI introduced the MCLR system in April this year with the objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates. The rates are revised every month.

(This report first appeared in DNA)

&nbsp;

With banks cutting their lending rates, It is hoped the reductions will kick-start a stuttering economy

By Manju AB Equated monthly installments (EMIs) on home, car, and education loans will fall by at least half a per cent with banks across the board reducing their lending rates. On Sunday, India's largest lender, State Bank of India (SBI), fired the first salvo by reducing its marginal cost-based lending rate (MCLR) by a whopping 0.9 per cent. With this, the bank has cut its benchmark rate by nearly 200 basis points from January 2015. Each basis point is equivalent to one-hundredth of a percentage. As the deluge of deposits post demonetisation brought down funding costs for the bank and the government wanted to spread some New Year cheer (again post demonetisation), the cost of loans across the board have been made cheaper. The one-year MCLR of SBI, to which most of its loans are linked, is down to 8 per cent from an earlier 8.9 per cent. The reduction of 0.9 per cent is across all maturities. The SBI action was followed within hours by peers. Punjab National Bank (PNB) has cut its one-year MCLR rate by 0.7 per cent to 8.45 per cent from 9.15 per cent, effective January 1. Similarly, Union Bank of India has reduced its one-year MCLR by 0.65 per cent to 8.65 per cent, effective January 2. Rajnish Kumar, Managing Director in charge of retail loans, SBI, told DNA: "The reduction will result in all loan rates to come down. For home loans, the reduction will be up to 0.75 per cent, depending on the tenure and the maturity. The quantum of reduction for car loans is being decided. There also we will give a good relief for customers. For a Rs 30 lakh loan for 30 years, the monthly EMI will come down by Rs 1,200." The overnight MCLR is down to 7.75 per cent from 8.65 per cen, the one-month MCLR is down to 7.85 per cent from 8.75 per cent, the three-moth MCLR is down to 7.90 per cent from 8.80 per cent, the six-month MCLR is down to 7.95 per cent from 8.85 per cent, and the 2-year MCLR is down to 8.10 per cent from 9 per cent. The banks cutting their lending rates supplements the sops Prime Minister Narendra Modi promised the housing sector, small and medium enterprises and farmers. Banking sources say it is only a matter of time before the private sector banks -- ICICI and HDFC -- match the cuts. Loan rates have no option but to fall, irrespective of what action the Reserve Bank of India (RBI) takes. If you take the latest bank credit and deposit growth rates put out by the central bank, it shows that while bank credit growth is steadily shrinking to 4 per cent, deposit growth, especially savings accounts, have swelled by 15.9 per cent. The wide gap shows the banking system is flush with cash and that lending costs would correspondingly fall. Last week, the largest private sector lender, ICICI Bank, prepared itself for a lending rate cut by cutting its deposit rates to 7.5 per cent for a 390-day fixed deposit and 7 per cent for senior citizens, reducing rates by 0.10 per cent to 0.25 per cent on various maturities. RBI introduced the MCLR system in April this year with the objective of expediting monetary policy transmission along with augmenting uniformity and transparency in the calculation methodology of lending rates. The rates are revised every month. (This report first appeared in DNA)

EMIs on home, car, education loans to fall by at least half a per cent

India&#39;s largest lender State Bank of India slashed its benchmark lending rates by 90 basis points or 0.9% across various maturities effective January 1, 2017, reported PTI.

The decision comes on the back of the Indian Prime Minister&#39;s announcement on the New Year&#39;s eve to offer sops to the home buyer&#39;s under the PM Awas Yojana.&nbsp;

After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds.&nbsp;

The bank has reduced marginal cost of funds based lending rate (MCLR) from 8.90 per cent to 8 per cent for 1-year tenure, SBI said in a statement.

The MCLR on overnight borrowings has been reduced to 7.75 per cent from 8.65 per cent, while the lending rate for three-year tenure has been cut from 9.05 per cent to 8.15 per cent.

Similarly, the bank reduced the lending rate by similar percentage point for tenures including one month, three months, six months and two years.

&quot;With this, the bank has reduced its benchmark rate by 2 per cent from January, 2015,&quot; it said.

Banks have moved to MCLR as their new benchmark lending rate from June, replacing the base rate system for new borrowers.

It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks.

Last week SBI&#39;s subsidiary State Bank of Travancore also cut rates by upto 0.3 per cent, while IDBI Bank cut its lending rate by upto 0.6 per cent across various loan tenors.

(WION with inputs from PTI)

After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds

India's largest lender State Bank of India slashed its benchmark lending rates by 90 basis points or 0.9% across various maturities effective January 1, 2017, reported PTI. The decision comes on the back of the Indian Prime Minister's announcement on the New Year's eve to offer sops to the home buyer's under the PM Awas Yojana. After demonetisation, the banks are flush with funds which has contributed towards lowering the cost of funds. The bank has reduced marginal cost of funds based lending rate (MCLR) from 8.90 per cent to 8 per cent for 1-year tenure, SBI said in a statement. The MCLR on overnight borrowings has been reduced to 7.75 per cent from 8.65 per cent, while the lending rate for three-year tenure has been cut from 9.05 per cent to 8.15 per cent. Similarly, the bank reduced the lending rate by similar percentage point for tenures including one month, three months, six months and two years. "With this, the bank has reduced its benchmark rate by 2 per cent from January, 2015," it said. Banks have moved to MCLR as their new benchmark lending rate from June, replacing the base rate system for new borrowers. It is calculated on the marginal cost of borrowing and return on net worth for banks. It was introduced by RBI to ensure fair interest rates to borrowers as well as banks. Last week SBI's subsidiary State Bank of Travancore also cut rates by upto 0.3 per cent, while IDBI Bank cut its lending rate by upto 0.6 per cent across various loan tenors. (WION with inputs from PTI)

Demonetisation: India's largest lender State Bank of India cuts lending rate by 0.9%

A nationwide bank strike in India hit the public transactions like cheque clearances and cash deposits, but the vital treasury operations including a 150 billion rupee ($2.24 billion) government bond auction are unlikely to be affected, traders said. 
 
Staffing in treasuries of banks are likely to be less than normal days but officials will ensure that functions like bidding at the auction will run smoothly, three traders at state-run banks said. 
 
&quot;Treasury people have been allowed to enter the head office of the bank, so there is no problem for us in trading or bidding at the auctions,&quot; said a senior trader at a large state-run bank. 
 
However, there could be some issues in some banks settling the previous day&#39;s trades due to thin staffing. 
 
&quot;Settlement will be a problem at back office,&quot; said a senior official with State Bank of India. 
 
The RBI was also not too worried about the impact of the strike on treasury operations and settlements of banks. 
 
&quot;There shouldn&#39;t be any problem. Primary dealers are also there to underwrite if needed. But auctions should go through smoothly,&quot; the official said. 
 
An estimated 1 million bank staff are expected to strike work, opposing the government&#39;s proposal to merge State Bank of Indi&#39;s (SBI) associate banks with itself. In addition, unions are against the government&#39;s proposed move to privatise IDBI bank, formerly known as Industrial Development Bank of India. 
 
(Reuters) 
 
&nbsp;

An estimated 1 million bank staff are expected to strike work but treasury functions are likely to remain normal

A nationwide bank strike in India hit the public transactions like cheque clearances and cash deposits, but the vital treasury operations including a 150 billion rupee ($2.24 billion) government bond auction are unlikely to be affected, traders said. Staffing in treasuries of banks are likely to be less than normal days but officials will ensure that functions like bidding at the auction will run smoothly, three traders at state-run banks said. "Treasury people have been allowed to enter the head office of the bank, so there is no problem for us in trading or bidding at the auctions," said a senior trader at a large state-run bank. However, there could be some issues in some banks settling the previous day's trades due to thin staffing. "Settlement will be a problem at back office," said a senior official with State Bank of India. The RBI was also not too worried about the impact of the strike on treasury operations and settlements of banks. "There shouldn't be any problem. Primary dealers are also there to underwrite if needed. But auctions should go through smoothly," the official said. An estimated 1 million bank staff are expected to strike work, opposing the government's proposal to merge State Bank of Indi's (SBI) associate banks with itself. In addition, unions are against the government's proposed move to privatise IDBI bank, formerly known as Industrial Development Bank of India. (Reuters)

Nationwide bank strike hits public transactions in India