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FS Daily Bytes: 22nd June

India

  1. The newly set up Appointments Board for selection of chiefs to head EXIM, SIDBI, IIFCL & IFCI had their first interview on 22nd. This will be followed up by one more before final recommendations are made. All together 32 candidates were shortlisted for the 1st round
  2. SBI gets mandate to invoke bankruptcy process against 3 major loan defaulters in the steel industry. The companies are Essar Steel, Bhushan Steel, Electrosteel. This raises possibility of merger or ownership change or restructuring decisions during the 270 days the companies must respond after filing of case at NCLT. ET reports that the banks has to brace for 56% haircut in these loans
  3. AU Small finance bank plans to enter housing finance segment by next year as per its CEO
  4. RBI expanded the Overseeing Committee with inclusion of 3 members to its existing 2. The new members are MBN Rao (former Chairman and Managing Director of Canara Bank), YM Deosthalee (former Whole-time Director and CFO of L&T Group), and S Raman (former CMD of Canara Bank and current Whole-time Member at SEBI)
  5. RBI has released a notification asking banks to ensure that entries in passbooks are intelligible, brief to be convenient to customers
  6. ICRA in its latest report has indicated that bank’s asset quality to improve after FY18 and expects GNPA to keep rising in FY18
  7. RBI has directed banks to resolved 55 high value bad loans cases within next 6 months or else the regulator will direct the banks to file insolvency & bankruptcy procedures against them
  8. Banks can at best expect only partial recovery of bad loans from insolvency process. The haircuts will be high as in many cases the loans are not backed by tangible fixed assets
  9. A new report estimates cost of farm loan waiver at 1.5-23. Trillion INR
  10. Vijaya bank bagged 9 Skoch awards including NPA management award (individual category) and Best Bank in Public Sector, Best Bank of NPA management
  11. Bharat Financial Inclusion (erstwhile SKS Microfinance) MD has remarked that they will need a bank as a partner with or without stake.

International

  1. Fed bank in the first round of this year stress tests for US banks has concluded that the banking sector could endure $493Bn in losses in the simulated downturn and would emerge from the crash ‘well capitalized’. This may augur well for the bank’s shareholders as they can expect higher payout
  2. Chinese banking regulator has singled out 4 key overseas assets buyers for further scrutiny primarily to check any financial risks or potential money laundering. The scrutiny will be done by number of banks, including ICBC, and the 4 players are Wanda, Fosun, Anbang, HNA and Rossoneri Sport Investment

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