According to independent MP Rajeev Chandrasekhar, the Modi govt should come out with a strategy to restructure and restore the health of these banks that are becoming piggybanks for politically friendly businesses
Rajeev Chandrasekhar, an independent member of the Rajya Sabha, who is also a member of the Standing Committee on Finance, has called for a strategy to restructure and restore health of public sector unit (PSU) banks in the country.
Mr Chandrasekhar was speaking during the discussion on the motion of thanks on the President's address. He said, "The basic principle of fairness and equity stands turned on its head when home owners and two-wheeler owners have their assets seized on default of their loans, when multi-millionaire businessmen who owe Indian banks end up with little or no pain. This situation is neither tolerable nor acceptable, and the Indian PSU banks have to stop becoming piggy banks for politically friendly businesses."
He said, "The other big worry is the health of PSU banks – all of which are owned by the taxpayers and public of this country, but seem to have been run like some people’s personal fiefdoms - with the consequence that lakhs of crores of non-performing assets (NPAs) dominate their balance sheets and write off taxpayer equity. Regulatory competence here again needs to be examined which allows 10 industrial groups to borrow almost 90% of the Indian banking system's net worth and create the ‘too big to fail’ syndrome that puts the banks and taxpayers on the hook rather than the promoters."
The independent MP said he looks forward to the Narendra Modi government's approach to big business defaulters and a strategy to restructure and restore the health of PSU banks.
Mr Chandrasekhar also raised issues like GDP decline, investment cycle and government finances during his speech. "fiscal responsibility and a value for money culture must be brought into the Government. A culture that focuses on what got done, and not just how much money got spent - which seems to be even today the way to measure Government effectiveness. That must change. Public money and assets must be handled by Government with a sense of trusteeship. Public spending is notoriously leaky and fosters corruption, and worst, only a small percentage of spending is reaching people. Fundamental reforms in this area are necessary and long overdue and a new Approach to Government Spending is needed. Reduction of corruption and leakages in public spending is a key requirement to create headroom for Government spending at a time of fiscal constraints," he added.
Nifty may be pulled lower if it closes below the days low
Market on Wednesday gave up all the intra-day gains after hitting a new life time high in the morning session. Witnessing a gradual fall, the indices closed in the negative, breaking four days of positive moves.
The S&P BSE Sensex opened at 25,651 while the NSE Nifty opened at 7,672. Both the indices hit an all-time high at 25,736 and 7,700. However the weakness in the indices set in and the market closed in the negative. Sensex hit a low of 25,366 closing at 25,474 (down 110 points or 0.43%), while the Nifty hit a low of 7,589 and closed at 7,627 (down 30 points or 0.39%). The NSE recorded a volume of 162.15 crore shares. India VIX rose 2.39% to close at 17.0600.
The top five gainers being IT (2.19%), Pharma (0.88%), NI15 (0.78%), Service (0.31%) and Bank Nifty (0.15%). The top five losers were Realty (4.30%), Metal (2.60%), PSE (2.52%), Media (2.32%) and CPSE (2.31%).
Of the 50 stocks on the Nifty, 16 ended in the green. The top five gainers were Infosys (3.31%), Kotak Mahindra Bank (2.57%), TCS (2.13%), Hero MotoCorp (1.47%) and Dr Reddy’s Lab (1.30%). The top five losers were Tata Power (5.38%), DLF (5.38%), Hindalco (4.48%), Coal India (4.19%) and NTPC (3.94%).
Of the 1,593 companies on the NSE, 666 closed in the green, 894 companies closed in the red, while 33 companies closed flat.
The Prime Minister, Narendra Modi on Tuesday decided to discontinue the four standing committees of the cabinet, which include the cabinet committee on management of natural calamities, cabinet committee on prices, cabinet committee on world trade organisation, and cabinet committee on unique identification authority of india. The Prime Minister will re-constitute the appointments committee of the cabinet, the cabinet committee on economic affairs, the cabinet committee on parliamentary affairs, the cabinet committee on political affairs and the cabinet committee on security.
State Bank of India (SBI) is planning to merge its three listed and two unlisted associate banks with itself. The three listed associate banks of SBI are State Bank of Mysore, State Bank of Bikaner and Jaipur and State Bank of Travancore.
India's merchandise exports jumped 12.4% to $28 billion in May 2014 over May 2013, data released by the government today showed. Imports declined 11.41% to $39.23 billion in May 2014 over May 2013. Oil imports rose 2.5% to $14.46 billion in May 2014 over May 2013. Non-oil imports dropped 17.9% to $24.77 billion in May 2014 over May 2013.
The trade deficit declined to $11.23 billion in May 2014, from $19.37 billion in May 2013. Trade deficit for the first two months of this financial year declined to $21.32 billion, from $37.04 billion during the corresponding period in the previous year.
Again today all the pharma and software stocks in the Sensex 30 pack closed in the positive, namely, Infosys (3.64%), TCS (2.23%), Dr Reddy’s (1.67%), Cipla (1.03%), Sun Pharma (0.78%) and Wipro (0.41%).
Tata Power (4.98%), top loser in the Sensex 30 stocks, was recently in the news as it said that the company has raised its renewable energy capacity to 1,170MW with the commissioning of its 28.8MW solar plant at Palaswadi in Maharashtra.
Suzlon Enery (4.93%) was among the top two gainers in the ‘A’ group on the BSE. The company was recently in news for winning a repeat order worth Rs 750 crore from ReNew Wind Power for its 100.8 MW project in Rajasthan. The company said the order is for supply of 48 units of S97-120m wind turbine generators at Bhesada in Jaisalmer district, where ReNew Wind Power is setting up the project.
Future Retail (7.22%) was among the top three losers in the ‘A’ group on the BSE. The board of the company is considering various options for raising of funds upto Rs2,000 crore, comprising of (i) issue of shares / warrants on preferential basis to investors and promoters of approximately Rs400 crore and (ii) issue of shares of different classes on rights basis upto Rs1600 crore; accordingly it has approved the following fund raising resolutions. The company proposes to utilise the proceeds of the various fund raising options at least 75% for its debt reduction program in addition to also fund its future growth.
US indices closed flat with a positive bias, on Tuesday 10th June.
Data showed US wholesale inventories increased 1.1% in April, higher than estimates. A separate report showed job openings rose to 4.5 million in April from 4.17 million in March.
The World Bank cut its global growth forecast amid weaker outlooks for the US, Russia and China, while calling on emerging markets to strengthen their economies before the Federal Reserve raises interest rates. The bank predicts the world economy will expand 2.8% this year, compared with a January projection of 3.2%. The US forecast was reduced to 2.1% from 2.8% while outlooks for Brazil, Russia, India and China were also lowered. The setbacks may be temporary: the 2015 estimate for world economic growth was unchanged at 3.4%.
Except for Hang Seng (0.25%), NZSE 50 (0.25 points) and Straits Times (0.11%) all the other Asian indices closed in the green. Jakarta Composite (0.52%) was the top gainer.
European indices are trading in the red. US Futures too are trading lower.