India's largest banking union, AIBEA, has lodged an official protest with the EC about the RBI’s hurry to grant new banking licenses when the country is moving towards general elections to elect a new Parliament. The union says, you cannot overlook political views while granting new licenses
All India Bank Employees Association (AIBEA) has asked the Election Commission (EC) not to give any permission to the Reserve Bank of India (RBI) to go ahead with the issue of new banking licenses, especially to corporate houses.
"Handing over banking licenses to corporate and business houses is a clear retrograde move. Particularly, when the country is moving towards general elections to elect a new Parliament, RBI's hurry in this regard overlooking the political views of the Parliament would be unfair," CH Venkatachalam, general secretary of AIBEA said in a letter sent to Chief Election Commissioner (CEC) VS Sampath.
According to AIBEA, it is our bitter experience borne out by facts that a very large part of the bad loans of banks today are due to the private corporate sector and many business houses who are wilful defaulters. It said, "Prior to nationalization of the banks in 1969, most of the banks in India were owned by one or the other industrial or business house. Their mismanagement and abuse of people's money resulted in nationalisation of banks."
Earlier in December, the bank union had pointed out that the top four bad loan accounts add up to a massive Rs22,666 crore, which include Kingfisher Airlines and Winsome Diamond and Jewellery Co.
"Over the past seven years, there are fresh bad loans worth Rs4.95 lakh crore only in public sector banks (PSBs), while during the same period, these lenders wrote off bad debts worth Rs1.4 lakh crore. Gross non-performing assets (NPAs) and bad loans in the PSBs have increased to Rs1.64 lakh crore as on 31 March 2013 from Rs39,000 crore as on 31 March 2008," AIBEA had said.
A report of the Parliamentary Standing Committee on Finance has also said, "Banking being a highly leveraged business involving public money and public welfare, the Committee are of the considered opinion that it will be more in the fitness of things to keep banking and industry separate. The Committee therefore desire the government and RBI to review the licensing guidelines accordingly."
According to a report from Times of India, the EC has asked RBI to explain why the final announcement of the new bank licences had to wait until after the announcement of polls, when the process had been on for so long. The Commission also sought to understand the urgency behind announcing the new licences in the middle of the poll season.
"What difference will it make if the new licences are announced six weeks beyond the proposed March-end announcement, as the polls would be over by then?" an official from the EC, who did not wish to be identified, told the newspaper.
Earlier this month, finance minister P Chidambaram had said the code of conduct would not be a deterrent for issuing the new bank licences as RBI was spearheading a process, which started a year ago.
To recapitulate, in 1969, fourteen large banks in the country were nationalised followed by six more in 1980. Subsequently, RBI gave licences to 12 private banks, in two phases, including conversion of a cooperative bank into a commercial bank. In the second phase, licences were issued to Yes Bank and Kotak Mahindra Bank way back in 2004. So, it is exactly a decade now, the RBI will be embarking on issuing additional licences in the banking sector, as the volume has grown to an estimated Rs80 lakh crore, and is still growing!
The initial press report indicates that the Bimal Jalan Panel has submitted its findings and it has made its recommendations to the RBI. No names have been given as the selection and announcement will be made by the RBI in due course.
It appears that there are a few serious contenders from government-owned organizations, such as IDFC, IFCI, LIC Housing Finance, Power Finance Corporation, Rural Electrification and India Post. In the corporate field, there are a few applicants Reliance Capital, Aditya Birla Nuvo, Shriram Capital, Bajaj Finserv and L&T Finance.
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Nifty highly overbought but may log in more gains
In Friday’s closing report, we had mentioned that the benchmarks are still possibly gathering energy for a short upmove. On Monday the Indian market had an upbeat opening, which was also the day’s low. The market continued to move in the narrow range upto 1.30pm after which it witnessed a sudden upsurge that made the indices hit a new all-time high. For BSE 30-share Sensex this was the fifth time in this month, while for NSE 50-share Nifty it was the fourth time.
The Sensex opened at 21,828 while Nifty opened at 6,511. The Sensex hit an all time high at 22,074 while the Nifty hit an all time at 6,592. Both the benchmark closed almost at their respective intra-day high. Sensex closed at 22,055 (up 300 points or 1.38%) while the Nifty closed at 6,584 (up 89 points or 1.36%). The NSE recorded a lower volume of 59.45 crore shares.
Except for Pharma (0.61%) and IT (0.14%) all the other indices on the NSE closed in the green. The top five gainers were CPSE (3.57%), Bank Nifty (2.75%), PSE (2.51%), Finance (2.50%) and Energy (2.21%).
Of the 50 stocks on the Nifty, 41 ended in the green. The top five gainers were Gail (5.29%), ONGC (4.37%), IndusInd Bank (4.20%), Kotak Bank (3.86%) and ICICI Bank (3.57%). The top five losers were HCL Technologies (1.81%), Dr Reddy’s (1.30%), Wipro (1.16%), Cipla (1.03%) and Infosys (0.62%).
Of the 1,550 companies on the NSE, 702 companies closed in the green, 758 closed in the red while 90 closed flat.
GAIL the top gainer in the pack of Sensex 30 stocks, today announced that during the Gastech Conference being held in Seoul, South Korea had signed a Memorandum of Understanding (MoU) with Chubu Electric Power Co., Inc., Japan (Chubu) on Friday. GAIL (up 4.81%) closed at Rs370.35 on the BSE.
Engineers India (EIL) was the top gainer in the ‘A’ group on the BSE was in news over winning a contract in the $3.6 billion Oman plastics project. EIL has won the PMC (project management consultancy) contract for Orpic's Liwa Plastics Project at Sohar in Oman against international competitive bidding. The contract is valued at over $40 million and signifies the company's steady headway overseas. Engineers India (up 6.73%) closed at Rs199.95 on the BSE.
The top loser among the ‘A’ group on the BSE, Financial Technologies, was in the news as the Securities and Exchange Board of India (SEBI) removed its "fit and proper" label last week and ordered it to sell its entire stake in the country's third-largest stock exchange. The stock fell 3.98% to close at Rs358.35 on the BSE.
US indices closed in the negative on Friday. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014.
Except for NZSE 50 (down 0.12%) all the other Asian indices closed in the green. Hang Seng (1.91%) was the top gainer.
A preliminary gauge of China's factory activity fell to an eight-month low. The "flash" edition of HSBC's China manufacturing Purchasing Managers' Index (PMI) dropped to 48.1 from February's 48.5, remaining below the 50 level separating expansion from contraction. However, the Asian markets went up on the hope that this would attract government stimulus.
European indices were trading in the red, while US indices were trading marginally higher.
According to Delhi Police, the viscera report of Sunanda Pushkar hints toward drug poisoning, but these findings are still inconclusive to file an FIR in the case
BS Bassi, the chief of Delhi Police, on Monday said inquest would continue in the mysterious death of Sunanda Pushkar, wife of union minister Shashi Tharoor. The Police Commissioner maintained that there is no reason to proceed in any other way while virtually ruling out a first information report (FIR) in the case at present.
"From the circumstantial evidence collected so far and from the statement of witnesses, there is no reason for us to proceed in any other fashion so we are carrying on our inquiries under Section 174 CrPC," Bassi told reporters.
Inquest proceedings under Section 174 CrPC were initiated in the Sunanda case according to which a sub-divisional magistrate inquiries into the death of a woman if she dies within seven years of her marriage.
In this case, on 21st January, a sub-divisional magistrate had directed Delhi Police to investigate the murder or suicide angle in the case after autopsy report has cited the death as "sudden and unnatural" while the cause of death was mentioned as poisoning.
The police can file an FIR in this case if it finds any foul play but until then the inquiry will go on under section 174 CrPC.
Investigators were banking on the viscera report from Central Forensic Science Laboratory (CFSL) to get definitive lead on the nature of the poison and establishing its quantity but the report has failed to do so. The viscera report hints toward drug poisoning and its findings are still inconclusive to file an FIR in the case, according to police.
"The CFSL report has not been able to give much headway into the probe. It rules out poisoning and hints toward drug poisoning," said a senior police official associated with the probe.
Investigators will now take the opinion from the panel of doctors from AIIMS which had carried out an autopsy to shed light into findings of the CFSL report.
The SDM has also been informed about the CFSL report.
Sunanda was found dead in a 5-star hotel in South Delhi on the night of 17th January, a day after her twitter spat with Pakistani journalist Mehr Tarar over an alleged affair with Tharoor.