Companies & Sectors
J&K Bank shares hit by rumours of NPAs worth Rs2,500 crore
Total amount of bad loans or NPAs of J&K Bank could be five times more of what the lender has shown, says the newspaper Greater Kashmir. The stock hit lower circuit 
 
Jammu & Kashmir Bank (J&K Bank) shares tumbled 20% on Friday following reports of the lender's alleged concealment of stressed assets worth Rs2,500 crore. During the morning trading J&K Bank hit its lower circuit at Rs1,472.25 but later recovered to close the day 18.4% down at Rs1,501 on the BSE.
 
According to a report from Greater Kashmir, in its latest balance sheet, three loans amounting to Rs1,100 crore—which by regulatory and prudential norms are non-performing assets (NPAs)—have not been classified and declared so by the Bank. 
 
The report mentions three big loans, Rs650 crore given to a Kolkata-based company engaged in agro and ancillary business, second of Rs400 crore given to a Mumbai-based real estate company and third, Rs100 crore given to a Hyderabad-based company by J&K Bank.
 
Quoting sources, who do not want to be named, Greater Kashmir, said, "The Auditors while scrutinising the loan accounts of borrowers outside J&K have found ‘shocking’ transactions in scores of such accounts, revealing the “clandestine” intent of the loan sanctioning and disbursing authorities." The sources told the newspaper that such ‘technically unsecured and non-performing’ loans total to around Rs2,500 crore.
 
“The stressed assets of around Rs2,500 crore are over and above Rs783 crore of Gross NPA that the bank has declared in its balance sheet. In addition, the bank has restructured loans of Rs1,575 crore. Even with an industry mortality of 33%, this means NPAs of another Rs500 crore, taking the Gross NPA to around Rs4,000 crore. In reality the total amount of NPA of the bank could be five times more of what the bank has shown. This takes the NPA ratio to nearly 5%, which will be among the highest in the industry,” the sources told the newspaper.

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Sensex, Nifty continues to trade in the range: Friday closing report
Nifty is unlike to break out soon
 
The Indian market witnessed a directionless session Friday wherein the indices moved in a range. The benchmark indices opened in the positive and immediately rose to the day’s high. The BSE 30-share Sensex opened at 24,301 and hit a high at 24,354 while the NSE 50-share Nifty opened at 7,255 and rose to the level of 7,273. The benchmarks immediately plunged lower and entered in the negative zone. At around 2.25pm, Sensex and Nifty hit the day’s low at 24,164 and 7,218, respectively. Sensex closed at 24,217 (down 17 points or 0.07%) while Nifty closed at 7,230 (down 6 points or 0.08%). The NSE recorded a volume of 133.60 crore shares. India VIX fell 2.13% to close at 16.3350.
 
Reserve Bank of India (RBI) governor Raghuram Rajan said on Friday he is planning to join hands with the country's new government to bring down high inflation.
 
 Indian economy grew 4.7% in 2013-14, lower than the advance estimate of 4.9 percent growth put out earlier this year by the Central Statistics Office (CSO). The latest GDP growth estimate of 4.7% is however higher than the 4.5% GDP growth recorded in 2012-13.
 
According to media reports, the department of industrial policy & promotion (DIPP) has prepared a draft Cabinet note that proposes to allow up to 100% foreign direct investment (FDI) in defence as part of its plan to boost domestic manufacturing. DIPP has proposed three different caps for FDI in defence - 49%, 75% and 100% - which propose to incentivise technology transfer. Currently, only 26% FDI is allowed in defence manufacturing, though the government can clear more foreign investments on a case-to-case basis.
 
NTPC (4.99%), among the top two gainers in the Sensex 30 pack, is in news as the deadline is nearing for BSES entities to pay their dues to the company. SBI (2.24%) was the top loser in Sensex 30 stocks as banking stocks were down today. Max India posted weak March 2014 quarter result. The board of directors of the company at its meeting has recommended a final dividend of 90%, i.e., Rs. 1.80 for every equity share of Rs2/- each for the financial year 2013-14. But the stock was the top gainer (8.94%) in the ‘A’ group on the BSE.
 
Jammu & Kashmir Bank was alleged to be hiding stressed assets worth Rs2,500 crore by a local media. However in an interview and chief executive officer, Mushtaq Ahmad has clarified that this is factually incorrect and an exaggerated figure and a mischief being played by someone. He mentioned that the actual stressed assets usually remains in the between Rs500-700 crore. The stock was the top loser (18.42%) in the ‘A’ group of the BSE.
 
The US economy suffered its first contraction since 2011 last quarter. Gross domestic product fell at a 1% annualized rate revised Commerce Department figures showed in Washington. However, US indices closed in the positive on Thursday. 
 
Except for Hang Seng (0.31%) all the other Asian indices closed in the negative. Jakarta Composite (1.84%) was the top loser.
 
European indices showed a mixed performance while US Futures were trading marginally lower.

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Deepak Parekh honoured with Germany's prestigious Order of Merit award
The HDFC chief has played a pioneering role in fostering Indo-German economic co-operation, and thus was conferred with Germany's prestigious ‘Bundesverdienstkreuz’ or Cross of the Order of Merit
 
Deepak Parekh, the chairman of HDFC, was honoured Germany's prestigious ‘Bundesverdienstkreuz’ (Cross of the Order of Merit) award for his personal commitment and outstanding contribution to strengthen Indo-German relations over the years.
 
Germany's Consul General Michael Siebert who bestowed the award, said, "Deepak Parekh, one of the most respected personalities in the Indian finance sector for his outstanding entrepreneurial success and his integrity, has played a pioneering role in fostering Indo-German economic co-operation."
 
"Mr Parekh has always been a most reliable point of contact for German business, giving advice, counselling and encouraging wherever required, " the Consul General said in a statement.
 
The HDFC chairman has served on the board of various leading German and Indo-German corporations. "Mr Parekh has enormously contributed to intensifying Indo-German economic relations which have reached new heights, creating considerable wealth as well as numerous jobs in Germany and India alike," says Consul General Michael Siebert.

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