Tag: indian bank

FinMin moves file for extension of 3 MDs, 10 EDs of govt-owned banks, BFSI News, ET BFSI

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New Delhi, Jul 25 () The finance ministry has moved a file for extension of tenure of three public sector banks’ managing directors, including Punjab National Bank (PNB), according to sources. Besides, the sources said the ministry has also recommended the Department of Personnel and Training (DoPT) for extension of 10 executive directors (EDs) of various public sector banks.

The three-year term of S S Mallikarjuna Rao, MD and CEO of PNB, is coming to an end on September 18 but the finance ministry has recommended for extension for four months till January 31, 2022, when Rao attains his superannuation age of 60 years.

Atul Kumar Goel’s term as MD and CEO of UCO Bank has been recommended for a two-year extension beyond November 1 this year. A S Rajeev, MD and CEO of Bank of Maharashtra, has been suggested for an extension of two years beyond December 1.

The finance ministry has simultaneously forwarded the name of S L Jain for the appointment of MD and CEO of Indian Bank. The BBB, the headhunter for state-owned banks and financial institutions, had recommended the name of Jain in May after the interview.

With regard to EDs, the ministry has recommended names of 10 for extension of their term till their superannuation age or two years, whichever is earlier.

The MD and CEO of a public sector undertaking is given a maximum tenure of five years as a government guidelines.

According to sources, the ministry sought extension of the executives from the Appointments Committee of Cabinet (ACC). The proposal has been sent to the Dof Personnel and Training for the same after consultation with BBB. The final call for extension will be taken by the ACC.

Interestingly, the Banks Board Bureau (BBB) has also invited applications for appointment of new MDs of PNB.

For PNB, the BBB on June 16, had sought public application for the MD and CEO post. The eligibility criteria as announced in public notice is that the applicant should be in the age group of 45 to 57 years in mainstream banking, of which, at least one year has to be at the board level.

The compensation offered is in line with the MD and CEO of a large public sector bank, it said. DP ANZ HRS hrs



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Indian Bank signs MOU with IIT Guwahati TIC to fund start-ups, BFSI News, ET BFSI

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Indian Bank signed the MoU with IIT Guwahati Technology Incubation Centre (TIC) for funding eligible Startups under the “IND SpringBoard” scheme of the Bank. The MoU was signed by K S Sudhakara Rao, General Manager (MSME), Indian Bank and Professor R. Ganesh Narayanan – Technology Incubation Centre (TIC), IIT-Guwahati, in presence of G. Krishnamoorthy, Dean, IIT Guwahati, and Sashi Bhusan Dash, Field General Manager, Kolkata-II.

Under this product, Indian Bank supports start-ups by extending credit facilities upto Rs.50 Crore for working capital requirements and also fund based term loan requirements for acquiring fixed assets for their unit. It is one of its kind in the North-Eastern part of India.

Indian Institute of Technology Guwahati- Technology Incubation Centre (IITG-TIC) is a space for new-age entrepreneurs and young minds to transform their innovative ideas into viable business propositions. They encourage young enthusiastic creative pursuits with an inherent zeal to be entrepreneurs to take advantage of this noble initiative.

On this occasion Zonal Manager Guwahati Shri. Chandaneswar Goswami, officials from Indian Bank, IIT Guwahati and Start-up entrepreneurs were also present.



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Indian Bank inks pact with IIT-Guwahati’s centre for start-up financing

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Chennai-headquartered Indian Bank has signed an agreement with IIT Guwahati Technology Incubation Centre (TIC) for financing start-ups under Bank’s loan product “IND Spring Board”.

The MoU was signed by K S Sudhakara Rao, General Manager (MSME), Indian Bank and Professor R. Ganesh Narayanan – Technology Incubation Centre (TIC), IIT-Guwahati on Thursday.

Indian Bank’s ‘Ind Spring Board” scheme aims to empower start-ups to realise their research efforts powered by financial support from the bank. Under this product, the bank supports start-ups by extending up to ₹50 crore as working capital and fund-based term loan requirements for acquiring fixed assets.

“The Bank is committed to economic upliftment and boosting the entrepreneurship of the people of Assam and Northeast India. This is a step in that direction,” said a statement.

Indian Institute of Technology Guwahati- Technology Incubation Centre (IITG-TIC) encourages youth to take advantage of this initiative who have creative pursuits with an inherent zeal to be entrepreneurs.

The bank has already tied up with IIT-Madras, IISc-Bengaluru and Chennai Angels for identifying the eligible start-ups for finance under this scheme.

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Private banks too want the bad bank pie, BFSI News, ET BFSI

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With public sector banks queueing up to buy a bad bank stake, private lenders are also looking to invest in it.

Some private banks are seeking approvals to buy into National Asset Reconstruction Company Ltd (NARCL) or bad bank, though their stake will be lower than the PSBs.

Having secured a licence from the Registrar of Companies, the Indian Banks’ Association (IBA) will soon move an application to the Reserve Bank of India (RBI) to set up a Rs 6,000-crore National Asset Reconstruction Company Ltd (NARCL) or bad bank.

The process

With the registration of the company, the process for putting an initial capital of Rs 100 crore is on as per the guidelines, the sources said adding that the next step will be audit and then move an application to the RBI seeking a licence for the asset reconstruction company.

The RBI in 2017 raised the capital requirement to Rs 100 crore from the earlier level of Rs 2 crore keeping in mind the higher amount of cash required to buy bad loans.

Legal consultant AZB & Partners has been engaged for seeking various regulatory approvals and fulfilling other legal formalities.

The initial capital would come from eight banks who have committed, and the NARCL would expand the capital base to Rs 6,000 crore subsequently after the RBI’s nod.

Other equity partners would join after the RBI’s licence and even the board would be expanded.

SBI veteran to steer

IBA, entrusted with the task of setting up a bad bank, has put a preliminary board for NARCL in place. The company has hired P M Nair, a stressed assets expert from the State Bank of India (SBI), as the managing director. The other directors on the board are IBA Chief Executive Sunil Mehta, SBI Deputy Managing Director S S Nair and Canara Bank‘s Chief General Manager Ajit Krishnan Nair.

Finance Minister Nirmala Sitharaman in Budget 2021-22 announced that the high level of provisioning by public sector banks of their stressed assets calls for measures to clean up the bank books.

Several banks are moving to divest their stake from Asset Reconstruction Companies (ARCs) to free up capital in preparation to launch the bad bank.

Three public sector banks—Union Bank of India, Indian Bank, and Bank of India—said they jointly intend to sell up to 88.4 million shares, constituting up to 90.31 per cent of the total equity share capital of ASREC India Ltd, a Mumbai based ARC.



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Indian Bank to finance startups in Telangana

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Indian Bank is looking forward to extend financial support to startups in Telangana and is likely to team up with T-Hub, according to its Managing Director and Chief Executive Officer, Padmaja Chunduru.

She was speaking at the formal lunch of ‘Prerana’, the flagship business mentoring programme of Indian Bank to create awareness among micro, small and medium enterprises, in Telangana on Tuesday.

“We have already started startup-financing in various States and are planning to enter into an understanding with T-Hub to do the same in Telangana,” the Indian Bank Chief said.

Prerana initiative

On the Prerana initiative, she said there were many ‘hindrances’ faced by MSMEs in the form of lack of awareness about various schemes of the government/banks, language barriers and lack of market knowledge and updates. The on-line program is intended to bridge this gulf, she said.

Referring to Telangana’s potential in MSMEs, Chunduru said there was huge scope for growth in areas like Pochampalli, Siricilla where there are hubs of weavers and other artisans.

After formally launching the scheme, KT Rama Rao, Minister for IT & Municipal Administration, Government of Telangana said the Telangana State Finance Corporation was ready to collaborate with Indian Bank to evolve some innovative mechanism to help small businessmen in the areas of providing collateral.

He also requested Indian Bank to increase lending to priority sectors especially to weaker sections and MSMEs apart from farmers.

Also read: LIC, SBI Life, Canara Bank pick up stakes in Indian Bank under QIP

The Minister had also requested Chunduru to join the board of We-Hub which has been set up by the State government to empower women.

Imran Amin Siddiqui, Executive Director at Indian Bank said despite contributing 30 per cent to the Gross Domestic Product (GDP) they were unable to derive many benefits of schemes due to lack of awareness and Prerana initiative will address the issue.

The Prerana initiative was first launched by the bank in October last year and has already been launched by the bank in Tamilnadu, Maharashtra, among other States. Going forward, Indian Bank plans to expand the program.

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Indian Bank executive director K Ramachandran demits office, BFSI News, ET BFSI

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NEW DELHI: Indian Bank on Thursday said K Ramachandran has demitted office as the executive director of the bank post his superannuation.

Ramachandran, executive director of the bank, has demitted office on June 30, 2021, upon superannuation, the bank said in a regulatory filing.

“Accordingly, K Ramachandran has ceased to be the executive director of the bank with effect from July 1, 2021,” it added.

As per the bank website, the board of the Indian Bank consists of the MD and CEO, three executive directors, one nominee director from the government, one nominee director from the RBI and one shareholder director.

In a separate filing to exchanges, Central Bank of India said the tenure of Mini Ipe as the shareholder director has ended on June 30 and Dinesh Pangtey is elected as the shareholder director of the bank, whose tenure commences from July 1, 2021.

Pangtey’s tenure is till June 30, 2024. He is an independent director of the bank, it noted.

He is presently the whole-time director and CEO of LIC Mutual Fund Asset Management.

With a long experience in the field of finance and life insurance, Pangtey earlier held the post of chief executive officer of LICHFL AMC Ltd.



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In Covid year, banking sector sees record profit of Rs 1 lakh crore, BFSI News, ET BFSI

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Mumbai: The banking sector has recorded its highest ever profits of Rs 1,02,252 crore in FY21, a year when the economy was battered by the pandemic. This is a significant turnaround compared to a net loss of nearly Rs 5,000 crore for the industry in FY19.

Two banks — HDFC Bank and SBI — contributed half of the industry’s profits. Of the total profits, HDFC Bank at Rs 31,116 crore accounted for 30%, an 18% increase over the previous year. The country’s largest lender SBI accounted for another 20% at Rs 20,410 crore. The third-highest was ICICI Bank, which earned Rs 16,192 crore, more than double what it earned in the previous year. Private banks also gained market share as public sector banks (PSBs) went slow in lending.

The biggest turnaround was among PSBs which reported a collective net profit for the first time in five years. Only two of the 12 PSU banks — Punjab & Sind Bank and Central Bank of India — reported a net loss for the year. In the private sector, Yes Bank remained in the red with a net loss of Rs 3,462 crore as it continued to make provisions. However, for banks in the red, the losses were lesser than what they reported in the previous year.

The single biggest reason for PSBs to post such a Rs 57,832-crore turnaround was the end of their legacy bad loan problem. This burden reached a peak after the RBI forced banks to classify 12 large defaulting accounts, followed by another 40 accounts, as non-performing assets and initiate bankruptcy proceedings. Given the size of these exposures, the move resulted in loans worth Rs 4 lakh crore turning bad. By March 2020, banks had completed making provisions for most of these loans. Additional provisions were offset by large recoveries from earlier written-off accounts, and banks stopped bleeding.

According to rating agency ICRA, the profits for the current year were the windfall gains on bond portfolios of public banks account, which contributed two-thirds of their profits before tax in FY21. The rating agency added that barring SBI, profit from the sale of bonds exceeded the pre-tax profits of all other public banks. The profit from bond sales was higher than the Rs 20,000-crore capital infused by the government in FY21.

The value of government bonds rises when interest rates fall. The RBI’s aggressive move to keep rates low has reduced interest income but provided huge gains in treasury income. The year 2020-21 was also a year of consolidation for the 10 public sector banks that merged into four. Last year, the merging entities recorded huge losses in the fourth quarter before the merger, which contributed to the Rs 26,015-crore loss among PSU banks in FY20. This year, the acquiring banks made profits with Indian Bank topping the list at Rs 3,004 crore followed by Union Bank at Rs 2,905 crore.



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LIC, SBI Life, Canara Bank pick up stakes in Indian Bank, BFSI News, ET BFSI

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NEW DELHI: Life Insurance Corporation (LIC), SBI Life and Canara Bank were among the top investors picking up stakes in Indian Bank under a QIP, according to a regulatory filing.

The country’s largest and the only state-owned life insurer, LIC, picked up 17.80 per cent of the shares issued under the qualified institutional placement (QIP), which closed on Thursday.

It was followed by SBI Life Insurance (11.87 per cent), SBI Mutual Fund and its various schemes (11.87 per cent), Societe Generale and its various schemes (9.74 per cent) and Canara Bank subscribing to 5.93 per cent of the shares offered in the issue, according to the regulatory filing by Indian Bank.

Indian Bank raised a total of Rs 1,650 crore in its QIP of shares, which were issued at Rs 142.15 apiece.

The state-owned lender said it allotted 11,60,74,569 new equity shares to the eligible qualified institutional buyers (QIBs) in the issue that opened on June 21 and closed on June 24.

In March this year, its board’s committee on capital raising had given approval for raising equity capital aggregating up to Rs 4,000 crore through QIP in one or more tranches.

Indian Bank’s shares closed at Rs 148.35 apiece on the BSE, up 0.64 per cent from the previous close.



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LIC, SBI Life, Canara Bank pick up stakes in Indian Bank under QIP

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Life Insurance Corporation (LIC), SBI Life and Canara Bank were among the top investors picking up stakes in Indian Bank under a QIP, according to a regulatory filing.

The country’s largest and the only state-owned life insurer, LIC, picked up 17.80 per cent of the shares issued under the qualified institutional placement (QIP), which closed on Thursday.

It was followed by SBI Life Insurance (11.87 per cent), SBI Mutual Fund and its various schemes (11.87 per cent), Societe Generale and its various schemes (9.74 per cent) and Canara Bank subscribing to 5.93 per cent of the shares offered in the issue, according to the regulatory filing by Indian Bank.

Indian Bank raised a total of ₹1,650 crore in its QIP of shares, which were issued at ₹142.15 apiece.

The state-owned lender said it allotted 11,60,74,569 new equity shares to the eligible qualified institutional buyers (QIBs) in the issue that opened on June 21 and closed on June 24.

In March this year, its board’s committee on capital raising had given approval for raising equity capital aggregating up to ₹4,000 crore through QIP in one or more tranches.

Indian Bank’s shares closed at ₹148.35 apiece on the BSE, up 0.64 per cent from the previous close.

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Banks see revival from July, tank up capital to meet loan demand, BFSI News, ET BFSI

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Banks are hoping for revival from the next month as Covid infections and lockdowns ease and have started raising capital to meet the likely loan demand jump.

State-owned Indian Bank has raised Rs 1,650 crore through the QIP launched earlier this week. In March this year, the committee of directors of capital raising of the bank had accorded approval for raising equity capital aggregating up to Rs 4,000 crore through QIP in one or more tranches.

State Bank of India has received its board’s approval to raise Rs 14,000 crore through the issuance of additional tier 1 capital.

Kolkata-based Uco bank has received a board approval for Rs 500 crore tier 2 issue, over and above an earlier approval for up to Rs 3,000 crore through share sales.

Bank of Maharashtra has received shareholders’ approval to raise up to Rs 5,000 crore equity capital through various modes, including rights issue and preference issue.

The shareholders approved the proposal at the bank’s annual general meeting (AGM) held on June 24, 2021, through audio/visual means.

Banks see revival from July, tank up capital to meet loan demand

Gradual recovery

The non-food year-on-year credit growth was recorded at 5.7% as on June 4, slower than 6.2% seen a year back, Reserve Bank of India data showed. This reflects risk aversion from both borrowers and lenders. However, bankers and brokerages are expecting an uptrend here on.

“We continue to believe that credit growth will bounce back in the near-term from the short-term ‘second wave’ disruption,” HDFC Securities said in a note earlier in the month. The credit demand is primarily expected from the retail segment as seen in earlier months while corporate demand is likely to be muted.

Corporate credit growth is likely to be subdued as companies are still deleveraging and may not go for capex soon.

“Corporate willingness for new investments remains low currently as the economy is still recovering from the devastating second wave. Investment scenario is tepid as gauged by new investment announcements, which saw 67% decline in FY21 as per CMIE,” SBI’s economic research said.

Banks are better placed this year to support credit growth with as many as 12 public banks reporting annual net profit in FY21 after five consecutive years of losses. “Apart from trading gains, the return to profitability was supported by lower credit provisions on their legacy non-performing assets, after the high provisions made during the last few years,” ratings company Icra said.

Experts see the revival to be gradual in the second quarter and expected to be much better from September, aided by good monsoon and festive season.

The demand for credit would likely come from the retail and micro, small and medium enterprises segments.



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