- NEARLY 9% OF EDUCATION LOANS GIVEN BY PUBLIC SECTOR BANKS TURN BAD IN 2018: Nearly 9% of Education Loans given by Public Sector Banks (PSBs) have been categorised as Non-Performing Assets (NPAs) in the last fiscal year. This is as per the government report. As per the information provided by Indian Banks’ Association, NPAs of PSBs in education loan touched a figure of 8.9% as on March 31, 2018. Among the NPAs in education loan category the highest 21.28% originated from nursing courses.
- NO JOB LOSSES DUE TO MERGER OF PUBLIC SECTOR BANKS: Finance Minister Mr. Arun Jaitley has said that there would be no loss of jobs due to merger of Public Sector Banks. He further said that the mergers could lead to creation of larger and bigger entities like SBI and there by the cost of lending could become cheaper.
- PAYMENT BANKS SEE SECOND STRAIGHT YEAR OF LOSSES: Payment Banks, launched with an intension to make India more financially inclusive, are in fact proving to be a cause of concern to the regulators and investors as these banks have incurred losses even in their second year with little signs of turning over soon. The consolidated balance sheets for the operational payment banks showed net losses of Rs 516.50 crore for the fiscal year 2018 which is almost double that of fiscal year 2017 when they had incurred a loss of Rs 242.20 crore. These losses are attributed to high operating expenses as large capital expenditure had to be incurred while setting up initial infrastructure. In our opinion it may take some time for these banks to break even.
- RBI SCALES DOWN PRINTING OF Rs. 2,000 CURRENCY NOTES: The printing of Rs.2,000 currency notes, introduced post-demonetization in November 2016 has been reduced to the minimum by Reserve Bank of India. When Rs. 2,000 were introduced, it was decided that printing of these notes would be scaled down over a period of time since this high value currency note was meant for meeting the re-monetization need. Of the total currency in circulation amounting to Rs. 18,033 billion as on March 2018, Rs 2,000 notes accounted for 37.3%, down from 50.2% as at the end of March 2017.
- RBI ALLOWS ONE TIME RESTRUCTURING OF MSME LOANS: In a breather to Micro, Small & Medium Enterprises (MSMEs) sector, the Reserve Bank of India has decided to permit one-time restructuring of existing loans to those enterprises that are in default but “standard”( Not NPA) as on January 01, 2019, without an asset classification downgrade. Restructuring without an asset classification downgrade will save the banks from higher provisioning burden. This will encourage banks and NBFCs to take up restructuring of MSMEs.
- DIRECT TAX COLLECTION FOR FINANCIAL YEAR 2018-19 RISES BY 14%: The Direct Tax collection till December 20, 2018 amounted to Rs 7.36 Lakh Crore, a growth of 14% over the same period last year. This is 64% of the Budgeted target for the direct tax collection in the current fiscal. The number of income tax e-returns filed till December 6, 2018 stood at 6.09 crore which is 47% higher than last year.
- PUBLIC SECTOR BANKS LOSSES ABSORBED 70% OF CAPITAL INFUSED BY GOVERNMENT IN LAST 3 YEARS: The government has infused capital in Public Sector banks intermittently in the last three years from 2015 to 2018. But more than 70% of the infused capital was absorbed into the losses incurred by these Public Sector Banks. This is as per the RBI report.
- INDIAN BANKS RECORD LOWEST RETURN ON ASSETS SINCE 2008: Indian banks suffered badly from the weak asset quality and have recorded their lowest Return on Assets (RoAs) since 2008 in Financial Year 2018.While banks in Russia, India & China suffered decline in RoAs, countries like Brazil, Mexico & Indonesia posted robust RoAs.
This post first appeared on IMPACT OF DEMONITIZATION OF CURRENCY IN INDIA IN 2016, please read the originial post: here
