Money & Banking
Banks face tough capitalisation challenges to meet Basel III
Mumbai: Bankers, particularly from public sector banks (PSBs), on Wednesday voiced concern on the formidable challenges in raising the amount of capital required under Basel III norms, given the timeline of its implementation by March 31, 2019.
 
"The formidable challenges in raising the amount of capital required under Basel III norms stares the Indian banking sector in the face, given the timeline of implementation of Basel III norms by March 31, 2019," the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement here.
 
According to the industry chamber, this issue was discussed by senior bank professionals and credit analysts at a session on "Capitalisation challenges and new Basel norms for the new frontiers in risk" on the second day of the annual FICCI-IBA Conference here.
 
According to estimates earlier, PSBs would need additional capital of up to Rs 240,000 crore by 2018 to meet the Basel III capital adequacy norms, put in place to guard against a repeat of the situation following the 2008 US financial crisis.
 
"The panellists agreed that the net worth of many public sector banks stands eroded because of non-performing assets (NPAs)," or bad loans, the statement said.
 
"The Asset Quality Review (of banks) by the Reserve Bank of India (RBI) has led to increase in provisioning to as high as 15 per cent compared with 0.4 per cent provisioning for standard assets.
 
"Provisioning for NPAs has taken a toll of profits and internal accruals and investors have shied away from investing in shares of public sector banks," it said.
 
"In such a scenario, the last two years has hardly seen any programme for raising of capital. The situation could worsen as the requirement for capitalisation will grow as demand for credit increases to fuel growth," the statement added.
 
According to Ficci, the panellists were of the view that banks would have to address the shortage of risk management staff, hone risk management skills, strengthen the relationship manager operating model and create a common information sharing model, especially for recovery of large credits.
 
Presenting in parliament the union budget proposals in February, Finance Minister Arun Jaitley had allocated Rs 25,000 crore towards their recapitalisation in the current fiscal.
 
Jaitley plans to provide Rs 25,000 crore capital each in the previous and current fiscal years, while Rs 20,000 crore would be provided during 2017-18 and 2018-19.
 
In July last, the government had presented to Parliament a supplementary demand for grants to provide for Rs 12,000 crore towards recapitalisation of PSBs.
 
The quantum of exposure of Indian scheduled banks in terms of gross non-productive assets, re-cast loans and write-offs was Rs 9.5 lakh crore as of September last year.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Bankers to strike next month against anti-labour measures
Chennai: Around five lakh bankers will go on strike on September 2 protesting against the central government's economic polices and anti-labour reform measures, the All India Bank Employees' Association (AIBEA) said on Thursday.
 
In a statement, the AIBEA said at the call for the National General Strike was taken at a National Trade Union Convention organised by the central trade unions.
 
"In the name of 'cleaning Balance Sheets', all these huge bad loans are sought to be taken out of public glare to silently write them off. On an average about Rs 50,000 crore of bad loans are being written off per year," C.H.Venkatachalam, General Secretary, AIBEA said in the statement.
 
He said while public sector banks are sought to be merged on the plea that they are small and hence not viable, private corporates on the other hand are given licence to start small banks.
 
According to Venkatachalam, the central government is amending laws giving unfettered rights to corporate to hire and fire workers and stripping the workers of their trade union rights.
 
Employees and officers working public sector banks, private banks, foreign banks, regional rural banks and co-operative banks will join the strike.

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Injured Wrestler Vinesh will have to use crutches for two weeks: Team doctor
Rio de Janeiro: Amid the celebrations over Sakshi Malik's bronze medal, the Indian contingent at the ongoing Rio Olympics received another piece of good news with doctors saying the injury to Vinesh Phogat was a "ligament tear" and no fracture was seen.
 
"She will recover from the injury in about two weeks, but for her to start wrestling will take about six weeks at least," the Chief Medical Officer of the Indian contingent in Rio, Pawandeep Singh Kohli told IANS.
 
Vinesh had sustained what seemed to be a serious knee injury during her bout against Sun Yanan of China in the quarter-finals of the Women's Freestyle 48kg category at the Carioca Arena 2 here on Wednesday. 
 
"After an MRI test, we could conclude that there was a ligament tear and injury to muscles in the outer part of the knee area," Kohli said adding that recovering in such cases is ensured but she would have to rest and moved around in crutches for two weeks.
 
The doctor said she sustained the injury when her opponent in the wrestling match caught her foot and turned it sharply, putting pressure on the knee. "It's an agonising pain when a ligament tears," he said. A brace has been put on her leg. She will be examined after two weeks and then advise given on future course of treatment.
 
Vinesh had sustained what seemed to be a serious knee injury during her bout against Sun Yanan of China in the quarter-finals of the Women's Freestyle 48kg category at the Carioca Arena 2 here on Wednesday. 
 
Earlier, the chef de mission Rakesh Gupta had said that no fracture meant that her recovery would be quick. "We were hoping that there should not be any bone injury," he added.
 
The Haryana grappler, one of India's best bets for a medal, had received a bye in the opening round. She then started her campaign on a rousing note with a dominant 11-0 thrashing of Alina Emilia of Romania in the pre-quarterfinals.
 
The 21-year-old was leading 1-0 against the Chinese grappler at the time of her injury. 
 
The match was immediately stopped to allow medical attention to Vinesh. After the Indian physio declared that Vinesh will not be able to continue, Sun, who was leading 2-1, was declared the winner by injury.
 
Vinesh, who got her injured knee wrapped and put in a brace, was taken away on a stretcher. She was then shifted to the Athletes Village where a clinic has all the facilities for medical test. However, she had to wait about an hour for the MRI, since the machines were busy with other athletes.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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