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Tag: Bank unions

  • Bank unions search motion towards Gurumurthy

    Bank unions, together with an workers union of the Reserve Bank of India (RBI), have sought motion towards S Gurumurthy, Director on the Central Board of the RBI, for “the recent indecent and nasty remarks” allegedly about workers of public sector financial institution workers throughout his speech in one of many capabilities in Chennai within the presence of Finance Minister Nirmala Sitharaman.

    “The dirty and provocative remarks made by Gurumurthy that public sector bank employees are only ‘kazhichadaikal’ (hair thrown away after shaving) have seriously hurt the feelings and sentiments of the bank employees and officers at large,” the All India Bank Employees Association (AIBEA) mentioned in a letter to Sitharaman.

    “They rightfully feel and demand that Gurumurthy should apologise and express regret,” AIBEA General Secretary CH Venkatachalam mentioned. “We also feel that such persons like Gurumurthy who have no sense of proportion and discretion in public behaviour and public expression, and have distorted understanding about public sector banks and bank employees should no longer continue as a member of the high office of the Central Board of the RBI,” AIBEA mentioned, looking for his removing from the RBI board.

    “His remarks about public sector bank employees as scums, filths and left-overs and hence were not able to shift to private banks and hence they are left over in public sector banks is defamatory and derogatory. We strongly condemn his uncalled for and unwarranted comments,” the AIBEA mentioned.

    “By the aforesaid action … he has brought the august body of the Central Board of the RBI to disrepute and has proved himself unworthy of such a high position — that is the unanimous opinion of bank employees…,” Samir Ghosh, General Secretary, All India Reserve Bank Employees Association, mentioned in a letter to the Finance Minister.

    “We request you to set an example by taking appropriate action against Gurumurthy for his derogatory remarks against bank employees and thereby tarnishing the image of the RBI and also understandably, putting the Ministry of Finance at unease,” Ghosh mentioned.

    In his reply to AIBEA, Gurumurthy mentioned, “The NPA issue, action against it by vigilance, CBI, CVC, not to miss the prudential norms, completely shook the bank officers. This gave a huge opportunity to the private banks and funds which had a heyday because the best loan accounts shifted to them. They began giving high salaries and attracting capable PSB officers.”

    “Consequently, many capable officers left the PSBs, which left many filtered ones who could not go in the PSBs — for which I used the word ‘kazhichadaikal’, which actually means many could not pass through the filter, remained inside. It is a fact and I stand by it,” he mentioned.

    “I requested the FM to talk on all this. I’m glad she got here closely in defence of PSB workers, which not many FMs in current occasions had had the braveness to do. What I mentioned that day in entrance of the FM ought to have made the PSBs introspect.

    “It was not about all officers and certainly about all bank staff. Today no one can deny that many PSB officials lack the will, capacity and the knowledge in a complicated financial world to make credit decisions. They are also afraid because of the overhang of the enforcement and legal system,” Gurumurthy mentioned.

    “You all think that me being in the RBI Board is a big thing. I was pressurised to take up that position as there were not many to put a counter view in the RBI Board. I did not need it nor did I seek it. For decades I had never taken any position in or from the government. Nor will I ever,” he wrote.

  • ‘Write-offs of Rs 1.85 lakh crore aid banks to bring down bad loans’

    Loan write-offs have once more aided banks to report decrease non-performing property (NPAs) in the course of the year-ended March 31, 2021. However, complete write-offs in the course of the fiscal amounted to Rs 1,85,000 crore, which is decrease than Rs 237,876 crore within the earlier 12 months ended March 31, 2020.
    As per the monetary disclosures made by the SCBs, loans written-off accounted for greater than Rs 70,000 crore within the quarter ended March 2021. This has led to an enchancment within the asset high quality (GNPA discount) of the banks, in accordance with figures compiled by Care Ratings. Earlier this 12 months, Minister of State for Finance Anurag Singh Thakur stated in a written reply to the Lok Sabha that banks had written off unhealthy loans to the tune of Rs 1.15 lakh crore in the course of the first three-quarters of the fiscal ended March 2021.
    As a outcome, the reported NPA ratio of the banks decreased to Rs.8.2 lakh crore within the quarter ended March 2021 as in contrast with the year-ago interval (Rs.8.8 lakh crore in Q4FY20), as a result of recoveries and better write-offs made by a number of banks, Care Ratings stated in a report.
    The RBI Annual Report says the discount in NPAs in the course of the 12 months was largely pushed by write-offs. NPAs older than 4 years require 100 per cent provisioning and, due to this fact, banks might want to write down them off. In addition, banks voluntarily write-off NPAs with a purpose to clear up their stability sheets, avail tax advantages and optimise the usage of capital. At the identical time, debtors of written off loans stay responsible for reimbursement, the RBI stated.

    ExplainedRecoveries keyThe reported NPA ratio of the banks decreased to Rs.8.2 lakh crore within the quarter ended March 2021 as in contrast with the year-ago interval (Rs.8.8 lakh crore in Q4FY20) as a result of recoveries and better write-offs made by a number of banks. The RBI Annual Report says the discount in NPAs in the course of the 12 months was largely pushed by write-offs. NPAs older than 4 years require 100 per cent provisioning and, due to this fact, banks might want to write down them off.

    On March 23, 2021, the Supreme Court lifted the ban on NPA classification. With the asset classification standstill lifted in March 2021, the GNPA ratio of SCBs settled at 7.5 per cent in March 2021 as in contrast with 8.5 per cent within the quarter ended March 2020 which was largely pushed by PSBs. All industrial banks reported CAR greater than the minimal regulatory requirement as on March 31, 2021.

    Banks with greater write-offs embody SBI (Rs 17,590 crore) within the fourth quarter adopted by Union Bank of India, Yes Bank, Bank of Baroda, Axis Bank, Punjab National Bank, Bank of India and ICICI Bank. The asset high quality enchancment was additional supported by recoveries made by banks. Of all of the banks, knowledge on recoveries from write-off account as disclosed by 19 banks add as much as Rs 28,420 crore in contrast with Rs.18,775 crore in Q3FY21.
    In reality, mortgage write-offs have been rising within the final 5 years. Banks wrote off Rs 236,725 crore in 2018-19 and Rs 190,572 crore in 2017-18, aiding banks to deliver down NPAs.
    On the opposite hand, the gross NPAs within the close to time period is also decrease than anticipated if greater write-offs and recoveries are made by SCBs, one-time restructuring scheme for MSMEs, some quantity of careworn property moved to NARCL, liquidity below ECLGS scheme may help the MSMEs and decrease than anticipated affect of second wave of the covid-19 pandemic.

    However, little or no is thought in regards to the id of the debtors and the quantity written off within the case of particular person debtors. While banks declare that the restoration measures proceed even after loans are written off, sources stated no more than 15-20 per cent is recovered and the write-off figures yearly are rising, a lot quicker than recoveries and recapitalisation.
    With the second wave of the Covid-19 pandemic hitting the financial system, unhealthy loans are anticipated to go up within the coming quarters. As per the newest Financial Stability Report of the RBI, macro stress assessments point out that the gross non-performing asset (GNPA) ratio of banks might enhance from 7.48 per cent in March 2021 to 9.80 per cent by March 2022 below the baseline state of affairs and to 11.22 per cent below a extreme stress state of affairs. However, have ample capital, each on the mixture and particular person degree, even below stress, it stated.
    Within the financial institution teams, NPAs of public sector banks are anticipated to rise to 9.54 per cent in March 2021 and edge as much as 12.52 per cent by March 2022 below the baseline state of affairs. However, that is an enchancment over earlier expectations and indicative of pandemic proofing by regulatory help, it stated.

  • Bank Strike: Unions name for two-day strike. Check particulars

    Image Source : PTI Bank Strike: Unions name for two-day strike. Check particulars
    United Forum of Bank Unions (UFBU), an umbrella physique of 9 unions, has given a name for a two-day strike from March 15 to protest towards the proposed privatisation of two state-owned lenders.
    In the Union Budget offered final month, Finance Minister Nirmala Sitharaman had introduced the privatisation of two public sector banks (PSBs) as a part of its disinvestment plan.
    The authorities has already privatised IDBI Bank by promoting its majority stake within the lender to LIC in 2019 and merged 14 public sector banks within the final 4 years.
    Conciliation conferences – earlier than the Additional Chief Labour Commissioner on March 4, 9 and 10 – didn’t yield any constructive consequence, All India Bank Employees Association (AIBEA) common secretary C H Venkatachalam mentioned in an announcement.

    “Hence, it has been decided to go ahead with the strike for 2 continuous days on 15th and 16th March 2021. About 10 lakh bank employees and officers of the banks will participate in the strike,” he claimed.
    Most of the banks, together with the State Bank of India (SBI), have knowledgeable their clients concerning the affect on functioning of branches and places of work if the strike materialises.
    Banks have additionally knowledgeable that they’re taking obligatory steps for the graceful functioning of financial institution branches and places of work on the times of the proposed strike.
    Members of UFBU embrace All India Bank Employees Association (AIBEA), All India Bank Officers’ Confederation (AIBOC), National Confederation of Bank Employees (NCBE), All India Bank Officers’ Association (AIBOA) and Bank Employees Confederation of India (BEFI).
    Others are Indian National Bank Employees Federation (INBEF), Indian National Bank Officers Congress (INBOC), National Organisation of Bank Workers (NOBW) and National Organisation of Bank Officers (NOBO).
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  • RBI says write-offs helped banks decrease unhealthy loans


    The Reserve Bank of India (RBI) on Tuesday stated industrial banks managed to decrease their unhealthy loans, or non-performing property (NPAs), largely pushed by mortgage write-offs and warned that the asset high quality of the banking system could deteriorate sharply within the coming months because of the uncertainty induced by Covid pandemic.
    Commercial banks in India managed to deliver down their NPAs to 7.5 per cent of advances as of September 2020 from 8.2 per cent in March 2020 and 9.1 per cent in March final 12 months. Banks wrote off a report Rs 237,876 crore in fiscal 2019-20, enabling the banks to indicate decrease NPAs, the RBI stated in its ‘Report on trend and progress of banking in India 2019-20’. The central financial institution has warned that the modest NPA ratio of seven.5 per cent at end-September 2020 “veils the strong undercurrent of slippage”. The accretion to NPAs as per the Reserve Bank’s Income Recognition and Asset Classification (IRAC) norms would have been increased within the absence of the asset high quality standstill supplied as a Covid-19 reduction measure. The RBI had allowed six months moratorium on mortgage repayments because of the Covid affect. “Given the uncertainty induced by Covid and its real economic impact, the asset quality of the banking system may deteriorate sharply, going forward,” the RBI report stated.
    In absolute phrases, gross NPAs declined to Rs 899,803 crore in March 2020 from Rs 936,474 crore in March 2019. “NPAs older than four years require 100 per cent provisioning and, therefore, banks may prefer to write them off. In addition, banks voluntarily write-off NPAs in order to clean up their balance sheets, avail tax benefits and optimise the use of capital,” the RBI stated. “At the same time, borrowers of written-off loans remain liable for repayment,” it stated. PSU banks wrote off loans value Rs 178,305 crore in 2019-20 whereas personal banks had written off Rs 53,949 crore, the RBI report stated. Banking sources stated little or no is understood in regards to the id of the debtors and the quantity written off within the case of particular person debtors. While banks declare that the restoration measures proceed even after loans are written off, sources stated no more than 15-20 per cent is recovered and the write-off figures yearly are rising, a lot sooner than recoveries and recapitalisation. What’s disturbing banking observers is that banks made additions of Rs 378,228 crore to NPAs in March On the opposite hand, discount in NPAs was a lot decrease at Rs 155,905 crore through the 12 months.

    The central financial institution’s report has warned that a rise within the restructured advances ratio to 0.43 per cent at end-September 2020 from 0.36 in March 2020 could also be “indicative of incipient stress”.
    The RBI stated the fast credit score progress throughout 2005-12, coupled with absence of robust credit score appraisal and monitoring requirements and wilful defaults are chargeable for sizeable asset impairments in subsequent years. “Large borrowal accounts (exposure of Rs 5 crore and above) constituted 79.8 per cent of NPAs and 53.7 per cent of total loans at end September 2020,” it stated, including: “The share of special mention accounts (SMA-0) saw a sharp rise in September 2020”.