Money & Banking
Government, RBI pledge to keep state-run banks in 'good health'

The finance minister said banking is a stressed sector, while the government is professionalising public sector undertaking (PSU) banks and recapitalising them

 

Lauding the RBI move to help banks besieged by stressed loans by easing rules, union Finance Minister Arun Jaitley on Wednesday said the government will also provide resources to keep state-run banks in good health.
 
"The RBI last evening (Tuesday) took a very positive move which helps further in recapitalisation of banks," he told representatives of industry associations Federation of Indian Chambers of Commerce and Industry, Confederation of Indian Industry and Assocham at a post-Budget 2016-17 meeting here.
 
The finance minister said banking is a stressed sector, while the government is professionalising public sector undertaking (PSU) banks and recapitalising them.
 
"Whatever resources are required to keep PSU banks in good health, we are going to give," he said.
 
"We are also, after improving their health, going to look at possible consolidation and further reforms and while doing so, we have to maintain fiscal discipline," Jaitley added.
 
The Reserve Bank of India said on Tuesday that banks can now apply gains from revaluation of property to core capital requirements under certain conditions.
 
It also allowed conversions of foreign currency in financial statements to be counted as common equity capital, as well as eased rules on counting deferred tax assets.
 
India's central bank said it was amending the treatment of certain balance sheet items in determining banks' regulatory capital, for further aligning these to the international Basel III capital standards.
 
As per estimates, public sector banks need up to Rs.240,000 crore by 2018 to meet the Basel III capital adequacy norms.
 
Continuing government efforts to deal with the high levels of non-performing assets or bad debts of state-run banks, Jaitley, while presenting the 2016-17 general budget in the Lok Sabha on Monday, allocated Rs.25,000 crore towards their recapitalisation in the next fiscal.
 
Meanwhile, with the bull run on the Indian stock markets continuing for the second straight day on Wednesday, banking stocks were particularly in demand after the RBI announcement on their capital adequacy norms. 
 
The banking index of the BSE was up 4.92%, and each of the 10 scrips that go into it ended in gains.
 
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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Nifty, Sensex to head higher – Wednesday closing report
Nifty has to stay above 7,300 for the rally to continue
 
We had mentioned in Tuesday’s closing report that Nifty, Sensex were likely to rally and that Nifty would be headed higher if it closes above 7,100. The post-Budget bull-run continued in the Indian stock markets and the major indices soared to close with gains of around 2% over Tuesday’s close. The trends of the major indices in Wednesday’s trading are given in the table below:
 
 
After a fall on Budget day, the bull-run on Indian stock markets continued for the second straight day on Wednesday, with the mood also lifted by the strong showing in other Asian markets and overnight gains in the US and Europe. Analysts said the sentiments were also boosted by signs of a rate cut by the Reserve Bank of India (RBI), given that Finance Minister Arun Jaitley has decided to adhere to meeting the deficit target of 3.9% for this fiscal, and lowering it to 3.5% for the next year. Sector-wise, the S&P BSE realty index, bankex, finance index and basic materials index were the prominent gainers among indices.
 
Bajaj Auto on Wednesday said it closed February sales with 12% growth in volumes. In a regulatory filing with the Bombay Stock Exchange (BSE), the company said it sold a total of 272,719 units (two-wheelers 235,282 units, commercial vehicles 37,437 units) last month as against 243,319 units (two-wheelers 216,077 units, commercial vehicles 27,242 units) sold in February 2015. However, the company's exports last month came down to 98,959 units against 112,909 units shipped out during February 2015. Bajaj Auto shares closed at Rs2,233.60, down 1.17% on the BSE.
 
Software major Infosys on Tuesday announced tying up with Microsoft to offer healthcare analytics, using the latter's cloud platform. "We have developed healthcare analytics solutions to augment the current processes and make them more efficient using Microsoft Cortana Analytics suite," the Bengaluru-based outsourcing firm said in a statement. The healthcare industry is undergoing a paradigm shift due to consumerisation and increasing costs, it said, adding that with the advent of advanced analytics and cloud technologies, it is possible to process, store and analyse large volumes of datasets at a lower cost, yielding huge benefits to healthcare processes. Infosys shares closed at Rs1,156.25, up 2.82% on the BSE.
 
US stocks shot up further on Tuesday, the first trading day of March, as investors expected a further easing of monetary policies due to weak economic data. Oil prices rose on Tuesday on the prospects of higher demand, with the West Texas Intermediate for April delivery up over 1% above $34 a barrel in the early trade trading. Global stocks rallied after downbeat manufacturing data out of the euro zone bolstered the cases of central banks to extend stimulus plans. The data will likely give the US Federal Reserve a pause as it deliberates on if and when it will further increase interest rates.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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