GS-3, Indian Economy, Uncategorized

Merger of Banks

Finance Minister Nirmala Sitharaman has announced the merger of 10 public sector banks into four entities as an effort to revive the economy. Current Economic Status of India: India’s Gross Domestic Product (GDP) growth rate dropped to 5% in the April-June quarter due to a sharp deceleration in manufacturing output and farm sector The Gross Value Added (GVA) growth in the manufacturing sector dropped to 6% in the first… Continue reading Merger of Banks

GS-3, Uncategorized

Rediscovering Development Banks

Context Finance Minister recently announced a slew of measures to boost the economy and financial market sentiments. One of the measures was a proposal to establish an organisation to provide credit enhancement for infrastructure and housing projects with an aim to enhance fund flows towards such projects. The announcement can have far-reaching implications for India’s financial system.… Continue reading Rediscovering Development Banks

GS-3, Indian Economy, Uncategorized

All you wanted to know about PARA

What is it? The Public Sector Asset Rehabilitation Agency or PARA will be an independent entity that will identify the largest and most vexatious NPA accounts held by banks, and then buy these out from them. By consolidating problem accounts across banks, the PARA is expected to solve two problems. One, it can effect speedier… Continue reading All you wanted to know about PARA

Big Picture, GS-3, Indian Economy, Uncategorized

Merger of Associate Banks with SBI

Introduction The five banks set to merge with SBI are State Bank of Bikaner and Jaipur, State Bank of Travancore,State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala. SBI will also absorbBharatiya Mahila Bank. This is a bigger merger. 6 banks will be merging at the same time. This has never happened… Continue reading Merger of Associate Banks with SBI

Editorials, Uncategorized

Payments banks aren’t looking that lucrative anymore

Article Link Summary: Three firms—Tech Mahindra; Sun Pharma promoter Dilip Shanghvi and his partners IDFC Bank Ltd and Telenor Financial Services; and Cholamandalam Investment and Finance Co- have withdrawn their applications to start payment banks. These firms, along with eight other firms, had obtained in-principle approvals from the RBI in August 2015 to start payment… Continue reading Payments banks aren’t looking that lucrative anymore

Editorials, GS-3, Indian Economy, Uncategorized

The risks of creating giant banks

Summary: The government has decided to push for the creation of a new banking giant by merging the State Bank of India with its associate banks. The quest to create an Indian bank that will be in the league of global giants is an old one. It has been talked about since the 1991 economic… Continue reading The risks of creating giant banks

Editorials, GS-3, Indian Economy, Uncategorized

On-tap bank licences: 5 questions that linger

The Hindu Issue Questions being asked related to ‘on-tap’ bank licenses. Q.1) External committee needed? The RBI had said it would form a standing external advisory committee (SEAC) that will vet the applications after the initial screening is done by central bank staffers. The committee is to have a three-year term and will comprise eminent… Continue reading On-tap bank licences: 5 questions that linger

GS-3, Indian Economy, Uncategorized

RBI for easier bank permits

As part of its plan to put universal bank licences ‘on tap’, the Reserve Bank of India has unveiled draft guidelines that could encourage big non-banking financial players to throw their hats in the banking ring. What is ‘on tap mechanism? The central bank has been opening the bank licence window only periodically. Under the… Continue reading RBI for easier bank permits