India’s banking sector is set to transformative changes in the coming future accompanied by a pulsating derivatives market and IT-induced banking, said Reserve Bank of India (RBI) Governor Raghuram Rajan on Friday.
Speaking at the 11th convocation of the National Institute of Bank Management (NIBM) in Pune, the RBI Governor also spelled out the changes in the offing for the public sector banks.
Mr. Rajan suggested that in the next two years, the RBI might issue licences for setting up of payment banks, small finance banks and perhaps, a postal bank as well.
The apex bank, on February 4, had released the names of applicants for small finance banks and payments banks. It had received a total of 72 applications for the former and 41 for the latter. Observing that the country’s banking sector was laden with opportunities, he said it was important that banks had begun operating in the social sector.
Stating that India is a ‘bright spot’in the world economy, Chief Economic Advisor (CEA) Arvind Subramanian said that the Indian growth rate currently exceeded that of China’s.
“Skilled man power is not easily available in the country, yet our country is attempting to grow on it,” he said. The economic prosperity was helping to bridge social verticals in India at a pace far more rapid than in Europe, he added. Mr. Subramanian said that the country’s democratic set-up was a crucial decider in the rate of growth, and pointed out how in recent electoral cycles bad governance had been penalised in the polls which, he felt, was ‘a very good sign.’
Moody’s raises outlook for 15 banks, financial institutions to ‘positive’-Financial ExpressCredit rating agency Moody’s today revised upwards the outlook to positive, from stable, for 12 state-owned banks and financial institutions including State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, REC and PFC.
“We have affirmed the long-term ratings and changed the outlook to positive from stable for 12 Indian government- owned financial institutions,” the US-based agency said.
“The rating actions (on 12 public-sector entities) are in line with our affirmation of India’s Baa3 rating,” it said.
Earlier in the day, Moody’s raised India’s credit rating outlook to ‘positive’ and said an upgrade in its sovereign rating is also possible in the next 12-18 months.
India’s sovereign rating currently stands at ‘Baa3′, the lowest investment grade — just a notch above ‘junk’ status.
The 12 state-owned financial institutions include State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank, Oriental Bank of Commerce, Power Finance Corp, and Rural Electrification Corp.
The rating agency said an improvement in the government’s own creditworthiness, as measured by its sovereign rating, has the potential to lift the supported ratings for the financial institutions.
“The assignment of a positive outlook on the sovereign’s and the financial institutions’ ratings signals a higher probability of the sovereign providing support to the financial institutions in times of stress,” it said.
Finance ministry mulls new norms for appointments to top posts in nationalized banks-Economic Times
NEW DELHI: The finance ministry is seeking to rework the eligibility norms to appoint managing directors and CEOs for five large nationalized banks after its attempt to rope in external talent didn't show the desired results.
Sources told TOI that the ministry is now looking to relax the age criteria for eligible candidates from 55 years to 57 years and also reduce the requirement for board level experience from three years to one year. The move will allow some of the executive director in public sector banks to be eligible for the post of managing directors and CEOs for which separate interviews will be conducted.
Although around 40 persons had applied for the five jobs in Bank of India, Bank of Baroda (BoB), Punjab National Bank, Canara Bank and IDBI Bank, only a handful have met the criteria, prompting the department of financial services to seek relaxation of the norms. A final decision on the issue is yet to be taken, said sources. Some of the players in cluding Canara Bank, PNB and BoB have been without a full-time chief for several months as the government has been scouting for candidates from the outside and has even proposed to offer flexible salary to rope in private sector executives. The exercise is meant to attract better talent from the industry and is part of a series of measures to professionalize state-run banks.
The revision in the norms comes at a time when there is a legal challenge to the move.A former general secretary of the All-India Bank Officers Confederation has filed a public interest litigation in the Supreme Court, which is yet to be admitted.
The petition has alleged that bank employees are facing discrimination due to the new eligibility criteria being framed by the government.Bank employee unions had earlier petitioned the government, seeking restoration of the earlier norms, where executive directors with prescribed experience and meeting the age criteria were allowed t ..
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