Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: list of goods taxed at 4% :: VAT Audit :: form 3cd :: ACCOUNTING STANDARD :: due date for vat payment :: TDS :: cpt :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India
 
 
Mergers and Acquisitions »
 Why Gulf mergers and acquisitions are back on the rise
 Sebi issues listing norms for NCDs in mergers and acquisitions
 Indian chemical industry: Will M&A be a game changer?
 Samsung to continue seeking mergers and acquisitions
 Deals of the day-Mergers and acquisitions May 18, 2017,
 Forced mergers, sacking on cards as RBI gets tough with misfiring big banks
 Why India Inc is on an M&A spree, preferring inorganic growth to investing in fresh projects and capacities
 Banking consolidation 2nd wave: FinMin sees room for 3-4 more PSB mergers
 Ministry of Corporate Affairs (MCA) notifies the provisions of cross-border mergers and acquisitions
  GAVS Tech eyes to double revenue from mergers & acquisitions
 ACC, Ambuja Cements evaluating merger
 News Corp VCCircle Mergers & Acquisitions Summit 2017
 A new merger control philosophy
 IT deserves a strategic role in merger & acquisition integration
 Merger of Orient and IL&FS wind power businesses hits tax hurdle

Forced mergers, sacking on cards as RBI gets tough with misfiring big banks
May, 17th 2017

At least half a dozen state-run banks are in the line of fire as their rapidly deteriorating financials have caught the attention of the RBI, two senior bank officials have said.

Over the past one week, senior RBI officials have been meeting the top management of commercial banks to gauge their financial strength and the central bank may initiate prompt corrective action (PCA) against some of them under the newly-tightened regulatory guidelines, said the officials.

Under the new guidelines, RBI can take measures including sacking of management and forced merger of weak banks with a strong one, possibly leading to a wave of consolidation.

RBI officials are holding the meetings even before banks declared their financial results.

Senior officials from the banking circle said the discussions focus on stressed loans, capital, profits, expenses, and future plan of action. RBI did not respond to an email sent by ET.

PCA places restriction on banks in terms on lending, opening branches and even hiring as it is aimed at curbing expenses and improving asset quality of loans.

Last month, RBI issued revised framework on PCA that said banks having losses for two consecutive years, whose share of bad loans has crossed 6 per cent, and those unable to meet the minimum capital requirement, would be subject to PCA.

Among banks that have declared results for March 2017, Dena Bank and Central Bank of India have reported gross NPAs (non-performing assets) above 6 per cent and have posted losses for two consecutive years. They could be in RBI's radar, officials said.

At least 15 banks have gross nonperforming loans above 6 per cent of their total loan book. They include Canara Bank, Bank of India, Union Bank of India, Central Bank of India, Punjab National Bank, Corporation Bank, Andhra Bank, Allahabad Bank, Dena Bank, Indian Overseas Bank and Oriental Bank of Commerce.

Many banks are hopeful that they may escape PCA since they adhered to the other two criteria -minimum capital adequacy norm of 10.25 per cent and posting profits. Banking analysts said if the divergence in accounting between RBI and the bank is taken into consideration, many banks could see their capital erode as their profits would take a hit to make provisions of bad loans.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions