This week in the banking sector saw some new strategies and announcements related to bad loans and some capital-raising plans by banks to step up efforts to revive banks’ financial strength.
The highlight, however, was the 64 percent increase in payout for FY17 received by Chanda Kochhar, MD and CEO of ICICI Bank, which is also the country’s biggest private bank.
The RBI or the Reserve Bank of India, also invited applications for the Deputy Governor post, which may be the a first hire from the private sector
RBI also laid out action plan to implement the Banking Ordinance in order to provide better resolution of NPAs.
On forward-looking plans, IDBI Bank’s new CEO and MD has deliberated upon a strategy to revive the bank which is now troubled financially with spike in bad loans and weak capital base. This comes after backlash from RBI and rating agencies.
On the other hand, Government-owned Punjab National Bank has resorted to continue its ‘Gandhigiri’ efforts to recover the bad loans that have strained the bank’s profitability.
In some bad news for Videocon Industries, which is one of the defaulters among large corporates, has seen a breakdown in its market capitalization which plunged over 50 percent during the week after Dena Bank declared it as an NPA in the March quarter, while Central Bank of India classified it as NPA in this quarter.
Read More: Videocon saga continues and Videocon continues to bleed
As public sector banks continue to bleed and RBI starts to take action, they are taking efforts to raise capital to meet the Basel III requirements along with credit growth.
Many banks including IDBI Bank stepped up efforts to sell their non-core assets.
Bank of Baroda plans to raise funds to shore up tier-1 capital.
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