VisVoice

  Make PSBs Atmanirbhar To meet Post COVID challenges The quarterly financial results of major PSBs/private banks and a few small finance banks relating to Q1FY22 have come in. While all of them posted net profit, though at varied levels, the common factor is the increase in GNPA, yoy as well as over sequential quarter The seriousness of the issue is yet to emerge due to restructuring options exercised/being explored, without the need to downgrade the standard assets concerned. The full impact might emerge post COVID normalisation.  From FY 2022-23, banking system may be confronted with two major issues.  1. Higher delinquencies in retail, msme, trade, micro and agri segments including the ones that were rehabilitated/ restructured.  2. As economy returns to normalcy, there will be great demand particularly from the above segments. Infusion of fresh capital is needed to provide for loss provisions as well as the capital requirements for meeting the increase in risk w...

  Privatising PSBs is no solution As part of her budget speech, Hon'ble Finance Minister Smt. Nirmala Sitharaman announced in the Parliament that two public sector banks (PSBs) and one public sector general insurer will be privatised during FY 2021-22. Later on when she was interviewed in one of the news channels, s he said there was a sentiment around public sector banks that they could not be "touched", but the country needs efficient banks for the economy to take the next step and return to the growth path. Two weeks back, Finance Secretary Shri T.V.Somanathan said that as per the stated policy of the government, (which recommends that the government should cap its holding to less than 40 per cent), most of the public sector banks will be eventually privatised. Simultaneously, there is a working committee report lying with RBI, which recommends that banking licence can be given to large corporate houses subject to compliance of certain conditions. So the intents ar...

                           MANDATORY LEAVE: GETTING IMPLEMENTED (In my imagination) (Except the RBI circular referred to, all others including designations, names in the following story are purely imaginary. No such bank exists. Intention is to create funny possibilities for a hearty laugh and not to hurt anyone. If anyone feels bad or aggrieved, my sincere apologies) General Manager (HR) of Disruptive Innovation Bank Ltd. (DIBL) was very much worried since morning. RBI Circular dated 9 th July 2021 on “Mandatory Leave for employees posted in Sensitive Positions or Areas of Operations” was lying in his table.  As the anxiety, generated out of the contents of the circular, got the better of him, he rushed to MD & CEO's Chamber, immediately after coming to know that the latter just reached office. Surprised that GM HR did not even greet, MD welcomed him “Good morning GM anything serious?”. GM HR ...

  GOLD LOANS: WIN-WIN BUT BEWARE OF SOCIAL ISSUES   Growth Story: Though Gross Bank Credit growth is muted at 5.7% for FY 2020-21, due to uncertainty thrown by COVID and related lock downs, there are some segments like wholesale trade, agriculture, housing loans, vehicle loans, unsecured loans and gold loans that have posted two digit growth. In particular, the growth in gold loans, both under agriculture and personal segment, is impressive. While the gold loan portfolio of the banking system grew by 33.9% (from a level of Rs.24866 cr. as on 31.03.2019 to Rs.33,303 cr. as on 31.03.2020) in FY 2019-20, it grew by a whopping 81.6% in 2020-21 to reach a level of Rs.60,464 cr. as on 31.03.2021. It is understood that a majority of the growth in agriculture also came through sanction of gold loans extended to agriculturists. The largest bank in terms of business, SBI has posted a growth of 465% y-o-y under gold loan portfolio (the loan outstanding went up from Rs.3,715 Cr. in March...

  If I were a CEO of a PSB today “If wishes were horses beggars would ride” - Scottish Proverb The most unenviable job to-day is to be a CEO of a PSB. Pandemic is unrelenting. While the medical fraternity takes care of the health needs, satisfying the financial requirements fall on the bankers.   And PSBs are the arm of the government in its efforts to ensure least inconvenience to public in their day to day life and also keep the economy, walking at least. The author’s wishes go like this. Vision & Mission: Vision is long term and Mission is short term. So keep the vision in the back of the mind and concentrate on the mission.More of a defence to sustain in the short term and maintain a bit of aggression in safe waters to keep the long term torch alive.  Live for the day and focus on current month, quarter and year in that order. Focus Areas:   - staff safety & welfare , ensure they remain determined and do not enter depression cycles - grow the...