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FS Daily Bytes: 19th June

India

  1. Banker’s met internally to finalize their plan for approaching NCLT on the 12 NPA accounts which RBI has directed them to file insolvency. The list includes, Amtek Auto, Bhushan Steel, Essar steel, Bhushan Power & Steel, Alok Industries, Monnet Ispat, Lanco Infra, Electro Steels, Era Infra, Jaypee Infratech, ABG Shipyard, Jyoti Structures
  2. In meantime, Insolvency & Bankruptcy Board of India Chairman, M. S. Sahoo said that these 12 cases are yet to come before the board.
  3. Moody expressed reservation in the effectiveness of the new insolvency code for NPA considering that old management may still play some role and potential liquidation may not provide enough recovery from the collaterals
  4. RBI FY1617 Balance of payments data reflects a 2nd consecutive drop in inward remittances to India. While personal & household remittances dropped to 59.1 USD Bn (from 63.4 last year), worker’s remittances increased marginally to 39.1 $ Bn (37.7)
  5. DCB bank has started focusing more on the ‘self-employed’ segment to address their financing needs
  6. AU small finance bank IPO to open on Jun-28th
  7. Prachi Mishra, an early top level lateral recruit at RBI has now put in her papers; within 3 years of joining. Her recruitment had caused some dissent within RBI earlier
  8. Bankbazaar.com, online financial services marketplace, opens offices in Malaysia.

International

  1. Moody recently downgraded the ratings of the 4 largest Australian banks from Aa3 to Aa2 (long term credit rating) in view of risks from high household debt levels after sharp property price rises. The banks are NAB, Westpac, Commonwealth Bank, Australia & New Zealand Banking Group
  2. Goldman Sachs CEO remarked that it may take 10 years to fully recover from 2008 recession
  3. World retail banking report 2017 observed that more than 50% of Gen Y & tech savvy customers in emerging economies of China & India, have relationships with non-traditional firms for financial services and this is highest globally. This seems to be related to the higher digital push by respective government and better customer experience from fintech firms
  4. Klarna, Swdish fintech company value at $2.25 Bn in 2015, has now got the banking license. One of the largest fintech company in Europe, it had pioneered ‘buy now pay later’ where consumers could buy goods online and pay later and Klarna takes on the credit risk for retailers in return for a part of the sales price.

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