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  Karur Vysya Bank's Impressive Financials ( 2021-22) Karur Vysya Bank (KVB), a reputed bank of 106 years of age and also referred to as a old generation private sector bank, released its financial results for 2021-22. The results are impressive.  Details of presentation is available in the link  https://www.kvb.co.in/docs/ investor-presentation-2022-05- 20.pdf This is the second audited annual financial results, after Shri B. Ramesh Babu assumed charge as MD & CEO of the bank in July 2019. Salient Features are: 1. 87% jump in net profit to record Rs.673 cr., which incidentally is the highest net profit in KVB history.  2. Increase in NII by 15% YoY, reduction in employee expenses by 18% YoY enabled the bank to compensate the decline of 15% YoY in other income  and still post a healthy operating profit of Rs.1630 cr. as on 31.03.2022. (26% growth YoY). But what sealed the huge growth of 87% over the FY2020-21 was that the bank could maintain the pr...

  Are PSB Staff கழிசடை ("leftovers in the filter")? Disrespectful Comment from Editor, Thuglak Magazine When the reputed Tamil magazine “Thuglak”, known for its unbiased political views (and enjoyable satires from the late Shri “Cho’ Ramasamy, the present Shri Satya and the like), celebrated its 52 nd Anniversary Celebrations in Chennai, where Hon’ble Finance Minister gave an impressive speech on current affairs, no one would have imagined that the current editor of the magazine, Shri S.Gurumurthy will make a ‘spoke in the wheel’ by his uncharitable remark about public sector bank (PSB) staff.   He said that that the staff in the PSBs are only கழிசடைகள்   (meaning ‘leftovers in the filter”) and it is with them that the country has to compete globally in the financial sector. (Annexure I). This was uncalled for and promptly Shri Venkatachalam, General Secretary, AIBEA condemned the remarks and demanded removal of Shri Gurumurthy from the board of RBI, as he is unfit to co...

RBI's Trilemma Tame Inflation, Ensure Liquidity, Sustain Credit Growth Hike in Repo Rate, CRR:  Reserve Bank of India (RBI) surprised the market by raising the policy rate (repo rate) by 40 bps and increasing the cash reserve ratio to 4.5%.. Element of surprise is because, Monetary Policy Committee (MPC), which was originally scheduled to meet in June, conducted an off-schedule meeting from 2nd May to 4th May 2022 and conveyed its decision to hike the repo rate to 4.40% (kept unchanged at 4.0% for nearly 24 months). Immediately thereafter, the price of bench mark govt security came down by about Rs.1.75 and the yields there of, went up by 26 bps. Not to be undone, commercial banks, both public sector banks (PSBs) and private sector banks (PvBs), raised their repo linked lending rates exactly by 40 bps, though it is another matter that the said banks were never known for borrowing from RBI at repo rates in the past. Kotak Mahindra Bank raised its interest rates for depositors by 30-...

  Hike in lending rates: Is it justified? Increase in MCLR:  Last week, major banks have increased their MCLR  (marginal cost of funds based lending rate) across various tenors by 5 and 10 basis points. The lending rates of existing borrowers and as a consequence their repayment obligations/ EMIs, will see an upward revision in the immediate future (depending on their lending rate linkage with the relevant MCLR tenor rate). The good news is that for the time being, there is no change in the lending rates, which are linked to the external benchmark rates like repo rate, etc. Background:  In a scenario, where RBI ·          revised its inflation projection from 5.2% to 5.7% for 2022-23, ·          indicated that focus, from now on, shifts to inflation control and ·      raised the interest rate for monies placed by banks with itself (standing deposit fac...

  Erstwhile SBH SATHABISHEKAM on 5th April 2022 Illustrious journey:  Had State Bank of Hyderabad (SBH) continued its journey, it would be proudly celebrating its Sathabishekam (80 years' completion) (founders’ day) tomorrow. The hundred per cent largest Associate, SBH, was merged with its parent SBI, when it was celebrating its Diamond Jubilee and was five days short of completing 75 years of glorious existence. As on date of merger, the bank’s total business was in excess of Rs.2.60 lac cr., higher than the business levels of Kotak Mahindra Bank (Mar 2016), one of the top five private sector banks in India today. The bank never received capital infusion in a big way from its parent and the healthy CAR presented year after year was from its retained profits only.  It had a network of 1930 branches well spread across India, with a niche for itself in at least five states (Telengana, Andhra Pradesh, Maharashtra, Karnataka and Tamil Nadu) and experienced staff numberin...