World
Seoul vows to punish Pyongyang for H-bomb test
Seoul : South Korean vowed on Wednesday to forge a united stance with the international community to punish Pyongyang for going ahead with a fourth nuclear test.
 
Seoul will ensure that North Korea will pay the price for testing a hydrogen bomb, calling it a grave provocation and challenge to international peace and stability, President Park Geun-hye said. 
 
"Now, the government should closely cooperate with the international community to make sure that North Korea pays the corresponding price for the nuclear test," Park said in a National Security Council meeting.
 
Park said it was important to induce the international community to impose strong sanctions on North Korea.
 
The comments came about two hours after North Korea announced that it has successfully conducted a hydrogen bomb test.
 
The North's nuclear test could prompt the UN Security Council to tighten its sanctions against North Korea. The communist country has already been under UN sanctions for its previous nuclear tests in 2006, 2009 and 2013.
 
Last year, Park warned that there will certainly be consequences if North Korea goes ahead with provocative actions that violate the UN Security Council resolutions.
 
South Korea on Wednesday issued a statement condemning North Korea for testing a hydrogen bomb and pledging to take all necessary measures against North Korea.
 
Park called on the military to maintain readiness in cooperation with the US troops in South Korea as she warned of a stern retaliation if Pyongyang stages a provocation against Seoul.
 
The US government said it could not confirm that North Korea had conducted a hydrogen bomb test, while vowing to respond appropriately to any "provocation".
 
"While we cannot confirm these claims at this time, we condemn any violation of UNSC (United Nations Security Council) resolutions and again call on North Korea to abide by its international obligations and commitments," White House National Security Council's spokesman Ned Price said.
 
The statement was in response to North Korea's announcement that it had successfully carried out its first hydrogen bomb test.
 
Price added that the US would continue to protect and defend its allies in the region, and "respond appropriately to any and all North Korean provocations".
 
Meanwhile, Japan has also condemned the hydrogen bomb test conducted by North Korea, saying the test was a "significant threat".
 
"The hydrogen bomb test is a significant threat to Japan's national security and is unacceptable," Japanese Prime Minister Shinzo Abe said.
 
Japan will consider sanctions against North Korea as its nuclear test violates UN Security Council's relevant resolutions, Abe said.
 
Abe also said Japan will work with the US, South Korea, China and Russia to cope with the issue.
 
Japanese Foreign Minister Fumio Kishida will hold talks with the US Ambassador Caroline Kennedy over the nuclear test.
 
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.

User

Combing operations continue in Pathankot; focus on NIA probe
Pathankot/Gurdaspur : Combing operations continued on Wednesday to sanitise the Pathankot Air Force base in Punjab even as the NIA formed various teams to probe the terrorist attack on the high-security defence facility.
 
Sources in the Indian Air Force (IAF) said that every inch of the Air Force Station (AFS) was being thoroughly scanned.
 
The focus on Wednesday was on the investigation by the National Investigation Agency (NIA) into the entire terrorist attack, including any lapses by the police and security agencies.
 
The combat operation ended on Tuesday with Defence Minister Manohar Parrikar announcing that six terrorists were killed. Seven security personnel, including an officer of the National Security Guards (NSG), were killed in the attack.
 
Parrikar admitted to "gaps" which led to "security lapses" at the air base.
 
The role of the Punjab Police Superintendent of Police Salwinder Singh, who claimed he was abducted by the terrorists who attacked the Pathankot air base, was put under the scanner on Tuesday evening, as a team of NIA officials questioned him at his residence in Gurdaspur.
 
The SP will be questioned by NIA and Punjab Police officials on Wednesday also, along with his cook Madan Gopal and businessman friend Rajesh Verma.
 
All three alleged that they were abducted by the terrorists in his vehicle
 
The police superintendent, who was transferred from here last week only, had earlier claimed that he, along with Verma and the cook, were stopped and abducted by 4-5 heavily armed terrorists near Kolia village, 25 km from Pathankot, on the night of December 31.
 
Under fire and suspicion about the entire incident, Salwinder Singh told the media on Tuesday: "My information was 100 percent true. There is no doubt about it. I informed senior officers immediately. I don't know why the delay took place."
 
However, the investigators are looking at Salwinder's claims with suspicions due to inconsistencies in claims of the SP and his two companions who were abducted.
 
The police officer has said his car was stopped around 11.30 p.m. on Thursday (December 31), while the attack began early on Saturday (January 2).
 
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.

User

Debt restructuring is a Band-Aid for a bullet wound
Religare's analysis of 10 out of 15 strategic debt restructuring -SDR cases suggest that this scheme won’t help Indian banks’ deteriorating asset health – instead it increases the risk by deferring an estimated Rs1.5 lakh crore of NPA formation. 
 
The strategic debt restructuring (SDR) is not a cure-all for deteriorating asset health of Indian banks and instead it exacerbates the risk by deferring an estimated Rs1.5 lakh crore or about $23 billion of non-performing asset (NPA) formation, which are 30-40 accounts or 2.2% of total credit, from FY16-FY17 to later years, says a research report based on analysis of 10 out of 15 SDR cases.
 
In the note, Religare Capital Markets Ltd, says, "Grim tidings from the Financial Stability Report (FSR) on stress in the system from large borrowers and weak sectors would prod the Reserve Bank of India (RBI) to tighten provisioning norms. We raise credit cost estimates across our coverage, pare target prices, and downgrade the sector to underweight."
 
"Our detailed interactions with companies under SDR, lenders, lawyers and industry experts suggest that banks may end up refinancing 30-40 ailing accounts under the scheme in the next one year, thus postponing NPA recognition of Rs1.5 lakh crore, or 2.2% of credit. We think banks have little scope to fully recover loans via the sale of assets given several pitfalls to SDR," it added.
 
 
 
Pointing out towards the inevitable massive write-offs, Religare says, SDR invocation is not treated as restructuring for asset classification or provisioning, and thus most cases have standard restructured assets with low provisions of 5%. It says, "Our analysis of 10 SDR cases invoked so far reveals that interest accruals and loss funding will push up debt by 70% from first restructuring via corporate debt restructuring (CDR) until conclusion of SDR. Banks will thus have to write-off 35-95% of interest (debt + equity) in FY17-FY18 if stressed assets find no takers. The lenient 5:25 scheme may also see slippages from cyclical sectors."
 
 
"The haircut in case of a takeover will also be high, resulting in huge provisions for banks even if the SDR is successful. Our fair enterprise value (EV) for six cases (three engineering, procurement, construction- EPC, three metal players) representing 67% of total SDR debt is 65-85% lower than the current EV," it added.
 
In its previous report too, Religare had pointed out that if banks fail to attract buyers for these troubled companies within 18 months, they would face a large Market-To-Market hit on their debt-turned-equity holding, apart from a massive surge in stressed asset formation. (Read: Strategic debt restructuring: Banks may face large losses, massive surge in stressed asset of 7 companies)
 
 
The FSR released by RBI also highlighted that levered companies’ debt as a proportion to total debt in the system has gone up by 200 basis points (bps) in the last one year. RBI’s two stress tests on credit concentration (group borrowers) and weak sectors (infrastructure, iron & steel, MSME & textile) reveal a severe impact on bank NPAs and net worth in case of defaults.
 
This, Religare feels, will make the RBI to strike back at banks. At present, banks retain existing classification on assets that have been stressed for one and a half to two years and also book income on the same. "To ensure lenders do not take undue advantage of SDR or the 5:25 schemes (most cases are concentrated in stressed sectors and/or with large group borrowers) to postpone NPAs, the RBI may require them to start building provisions for these accounts and/ or defer income recognition. This apart, the RBI’s recent list of 150 truant borrowers that may be classified as bad by FY17 would put further pressure on banks," it said.
 
 
Religare says, as of now, different banks treat the same account differently even when the structure of the loan is identical. It is this disparity in loan treatment that the central bank may like to address. "As per our discussions with industry experts, the RBI has asked banks to seek an auditor’s certificate if they wish to retain any of these loans under the standard category. Banks will have to classify such accounts as NPAs if any irregularities are found," it added.
 
According to the research note, FY2016 would be a painful year for corporate lenders. Religare cut its target price to book (P/B) multiples across its coverage that reflects the stress on bank books and adjusted its target prices for the restructuring hit. It says this would be around 50% from 20%-25% estimated earlier, due to surging debt in SDR cased and the likelihood of onerous write-offs. Religare has downgraded State Bank of India (SBI), Axis Bank and ICICI Bank to sell from buy, and for Bank of Baroda, CBK and Punjab National Bank (PNB) to sell from hold.  
 

User

COMMENTS

SuchindranathAiyerS

11 months ago

Bank Mismanagement: This is one of those things that every genuine Banker knows but will never say. In India it is easier to get away with pushing NPA under the carpet because, like the Praful Patel - Mrs Antony Air India, most Banks are owned by and operated for the benefit of the Neta-Babu-Cop-Milard-Jounralist-Crony Kleptocracy via an indtrument known as Bharath Sarkar and subsidized by the sweat and blood of the Mango Man:

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)