Tag: punjab and sind bank

Bank of Maharashtra tops PSU lenders chart in terms of loan, saving deposit growth in Q2, BFSI News, ET BFSI

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State-owned Bank of Maharashtra(BoM) has emerged as the top performer among public sector lenders in terms of loan and savings deposit growth during the second quarter of the current financial year, as per quarterly results data.

The Pune-headquartered lender recorded an 11.46 per cent increase in gross advances at Rs 1,15,236 crore in the July-September period of 2021-22, according to the published data of BoM.

It was followed by Punjab & Sind Bank which posted 9.53 per cent growth in advances with aggregate loans at Rs 67,574 crore at the end of September 2021, as per data from the bank’s quarterly results.

In terms of RAM (retail, agriculture and MSME) segment, the bank registered a highest growth rate of 14.24 per cent at Rs 70,515 crore.

When it came to deposit mobilisation, BoM with a 14.47 per cent growth was a notch behind Punjab and Sind Bank, while the country’s largest lender SBI recorded an 9.69 per cent rise.

However, in absolute terms, SBI’s deposit base was 20 times higher at Rs 36.90 lakh crore as against Rs 1.81 lakh crore of BoM.

Current account, savings account (CASA) for BoM saw a 22 per cent rise, the highest among the public sector lenders, during the quarter.

As a result, CASA was 54 per cent or Rs 97,889 crore of the total liability of the bank.

Total business of BoM increased 13.27 per cent to Rs 2.97 lakh crore at the end of September 2021.

For the second quarter, BoM’s standalone net profit more than doubled to Rs 264 crore as against Rs 130 crore in the same period a year ago.

During the quarter, the bank had written off bad loans worth Rs 1,100 crore including Rs 550 crore exposur to two SREI finance companies after making full provisions. RBI has taken SREI Infrastructure Finance and Equipment leasing company to bankruptcy court for resolution.

The bank’s asset quality improved significantly as the gross bad loans or gross non-performing assets (NPAs) dipped to 5.56 per cent of gross advances by the end of September 2021 as against 8.81 per cent by the end of the second quarter of the previous fiscal.

Net NPAs nearly halved to 1.73 per cent from 3.30 per cent at the end of second quarter of the last financial year, while provision coverage ratio improved to 92.38 per cent as against 87.15 per cent.



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BoM tops PSU banks in terms of loan, saving deposit growth in Q1, BFSI News, ET BFSI

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New Delhi: State-owned Bank of Maharashtra (BoM) has emerged as the top performer among public sector lenders in terms of loan and savings deposit growth during the first quarter of the current financial year. The Pune-headquartered lender recorded 14.46 per cent increase in gross advances at Rs 1,10,592 lakh crore in April-June period of 2021-22, as per the published data of BoM.

It was followed by Punjab & Sind Bank which posted 10.13 per cent growth in advances with aggregate loans at Rs 67,933 crore at the end of June 2021.

When it came to deposit mobilisation, BoM with nearly 14 per cent growth was a notch behind Punjab and Sind Bank, while the country’s largest lender State Bank of India recorded 8.82 per cent rise.

However, in absolute terms SBI’s deposit base was 21 times higher at Rs 37.20 lakh crore as against Rs 1.74 lakh crore of BoM.

Current Account Savings Account (CASA) for BoM saw 22 per cent rise, the highest among the public sector lenders, during the quarter.

As a result, CASA was 53 per cent or Rs 92,491 crore of the total liability of the bank.

Total business of BoM increased 14.17 per cent to Rs 2.85 lakh crore at the end of June 2021.

For the first quarter, BoM’s standalone net profit more than doubled to Rs 208 crore as against Rs 101 crore in the same period a year ago.

The bank’s asset quality improved significantly as the gross bad loans or gross non-performing assets (NPAs) dipped to 6.35 per cent of gross advances by the end of June 2021 as against 10.93 per cent by the end of first quarter of the previous fiscal.

In absolute terms, gross bad loans stood at Rs 7,022 crore at the end of June 2021, lower than Rs 10,558.53 crore recorded in the same period a year ago.

Net NPAs nearly halved to 2.22 per cent (Rs 2,352.75 crore) from 4.10 per cent (Rs 3,677.39 crore).



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Bank of Maharashtra tops PSU lenders chart in terms of loan, saving deposit growth in Q1, BFSI News, ET BFSI

Banking & Finance

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State-owned Bank of Maharashtra (BoM) has emerged as the top performer among public sector lenders in terms of loan and savings deposit growth during the first quarter of the current financial year.

The Pune-headquartered lender recorded 14.46 per cent increase in gross advances at Rs 1,10,592 lakh crore in April-June period of 2021-22, as per the published data of BoM.

It was followed by Punjab & Sind Bank which posted 10.13 per cent growth in advances with aggregate loans at Rs 67,933 crore at the end of June 2021.

When it came to deposit mobilisation, BoM with nearly 14 per cent growth was a notch behind Punjab and Sind Bank, while the country’s largest lender State Bank of India recorded 8.82 per cent rise.

However, in absolute terms SBI’s deposit base was 21 times higher at Rs 37.20 lakh crore as against Rs 1.74 lakh crore of BoM.

Current Account Savings Account (CASA) for BoM saw 22 per cent rise, the highest among the public sector lenders, during the quarter.

As a result, CASA was 53 per cent or Rs 92,491 crore of the total liability of the bank.

Total business of BoM increased 14.17 per cent to Rs 2.85 lakh crore at the end of June 2021.

For the first quarter, BoM’s standalone net profit more than doubled to Rs 208 crore as against Rs 101 crore in the same period a year ago.

The bank’s asset quality improved significantly as the gross bad loans or gross non-performing assets (NPAs) dipped to 6.35 per cent of gross advances by the end of June 2021 as against 10.93 per cent by the end of first quarter of the previous fiscal.

In absolute terms, gross bad loans stood at Rs 7,022 crore at the end of June 2021, lower than Rs 10,558.53 crore recorded in the same period a year ago.

Net NPAs nearly halved to 2.22 per cent (Rs 2,352.75 crore) from 4.10 per cent (Rs 3,677.39 crore).



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RBI imposes penalty on 14 banks for contravention of various norms, BFSI News, ET BFSI

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MUMBAI: The Reserve Bank of India (RBI) on Wednesday said it has imposed penalties on SBI, Bank of Baroda, IndusInd Bank, Bandhan Bank and 10 other lenders for contravention of various regulatory norms, including on lending to NBFCs.

The penalty imposed on the 14 banks totals Rs 14.5 crore, with a maximum Rs 2 crore fine on Bank of Baroda.

As per a release, Rs 1 crore penalty has been imposed each on Bandhan Bank, Bank of Maharashtra, Central Bank of India, Credit Suisse AG, Indian Bank, IndusInd Bank, Karnataka Bank, Karur Vysya Bank, Punjab and Sind Bank, South Indian Bank, The Jammu & Kashmir Bank, and Utkarsh Small Finance Bank.

The penalty imposed on the State Bank of India is Rs 50 lakh.

Giving details, the Reserve Bank of India said scrutiny in the accounts of the “companies of a Group” was carried out and it was observed that the banks had failed to comply with certain provisions.

Notices were issued to the banks, advising them to show cause as to why a penalty should not be imposed for non-compliance with the directions/contraventions of provisions of the Banking Regulation Act, 1949.

The penalties have been imposed for non-compliance with certain provisions of directions issued by the RBI on ‘Lending to Non-Banking Financial Companies (NBFCs)’, ‘Bank Finance to Non-Banking Financial Companies (NBFCs)’, ‘Loans and Advances – Statutory and Other Restrictions’, and ‘Creation of a Central Repository of Large Common Exposures – Across Banks’, among others.

The RBI, however, said penalties have been imposed based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.



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RBI imposes Rs 25 lakh penalty on Punjab and Sind Bank, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India on Friday imposed a penalty of Rs 25 lakh on Punjab and Sind Bank for non-compliance with certain provisions of directions on ‘Cyber Security Framework in Banks’.

The state-owned bank had reported a few cyber incidents to the RBI on May 16 and 20, 2020, the central bank said while giving details.

“Examination of the incident reports and the report of the forensic analysis of the said incidents revealed, non-compliance with aforesaid directions,” it said.

The RBI issued a show-cause notice to the bank.

“After considering the bank’s reply to the show-cause notice, oral submissions made during the personal hearing and examination of further clarifications/ documents furnished by the bank, RBI came to the conclusion that to the extent the charges of non-compliance with RBI directions were substantiated, it warranted imposition of monetary penalty,” the central bank said.

Meanwhile, a penalty of Rs 1 lakh on the Nagar Sahkari Bank Limited, Etawah for contravention of certain regulations, including the one on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.

In both cases, the RBI said the penalty is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.



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Govt unlikely to continue with zero-coupon bond route to recap PSU banks, BFSI News, ET BFSI

Banking & Finance

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The government is unlikely to take zero-coupon bond route to further recapitalise public sector banks after the Reserve Bank expressed some concerns in this regard, sources said. The government, they said, would resort back to recapitalisation bonds bearing a coupon rate for capital infusion in these banks.

To save the interest burden and ease the fiscal pressure, the government last year decided to issue zero-coupon bonds for meeting the capital needs of the banks.

The first test case of the new mechanism was a capital infusion of Rs 5,500 crore into Punjab and Sind Bank by issuing zero-coupon bonds of six different maturities last year. These special securities with tenure of 10-15 years are non-interest bearing and valued at par.

However, the RBI raised some concerns with regard to calculation of an effective capital infusion made in any bank through this instrument issued at par, sources said.

Since such bonds usually are non-interest bearing but issued at a deep discount to the face value, it is difficult to ascertain net present value, they added.

As a result, sources said, it has been concluded to do away with zero-coupon bond for recapitalisation.

These special bonds are non-interest bearing and issued at par to a bank, they said adding that it would be an investment that would not earn any return and rather depreciate with each passing year.

This innovative mechanism was adopted to ease the financial burden as the government has already spent Rs 22,086.54 crore as interest payment towards the recapitalisation bonds for PSBs in the last two financial years.

During FY 2018-19, the government paid Rs 5,800.55 crore as interest on such bonds issued to public sector banks for pumping in the capital so that they could meet the regulatory norms under the Basel-III guidelines.

In the subsequent year, according to the official document, the interest payment by the government surged three times to Rs 16,285.99 crore to PSBs as they have been holding these papers.

For the current financial year, interest payment for recap bonds have been reduced to Rs 19,292.77 crore from Rs 25,239.4 crore pegged in the Budget estimate.

Under this mechanism, the government issues recapitalisation bonds to a public sector bank which needs capital. The said bank subscribes to the paper against which the government receives the money. Now, the money received goes as equity capital of the bank.

So the government doesn’t have to pay anything from its pocket. However, the money invested by banks in recapitalisation bonds is classified as an investment which earns them an interest.

In all, the government has issued about Rs 2.5 lakh crore recapitalisation in the last three financial years. In the first year, the government issued Rs 80,000 crore recapitalisation bonds, followed by Rs 1.06 lakh crore in 2018-19. During the last financial year, the capital infusion through bonds was Rs 65,443 crore.



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Punjab & Sind Bank, BoM and BoI are likely privatisation candidates

Banking & Finance

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Lack of interest among potential buyers remains a key concern given the structure of these banks.

The market is betting on Punjab & Sind Bank, Bank of Maharashtra and Bank of India as the likely candidates for the finance minister’s ambitious bank privatisation plan. In her Budget speech, finance minister Nirmala Sitharaman said the government planned to privatise two sate-run banks, other than IDBI Bank. Analysts believe that the likely candidates will be from the pool of banks which were not part of the merger process. The government had earlier allowed merger of 13 banks into five banks.

Anil Gupta – vice-president and sector head, financial sector ratings, ICRA, said Punjab and Sind Bank and Bank of Maharashtra looked probable candidates for privitisation. Of the six banks kept out of merger, Indian Overseas Bank, Central Bank and UCO Bank are under PCA (prompt-corrective action), he explained. The Reserve Bank of India had kept the three banks in the PCA framework after a massive asset quality deterioration, losses in the books and lower capital levels. Gupta said PCA banks were unlikely to be offered for privatisation due to poor investor demand.

Leaving State Bank of India and five merged banks, there are six public sector banks in the banking system. The six banks include Bank of India, Punjab and Sind Bank, Bank of Maharashtra, Indian Overseas Bank (IoB), Central Bank of India and Uco Bank. Gupta also said the government was unlikely to consider privitisation of Bank of India due its large size. “The government may want to test the water with smaller banks first,” he added.

According to JM Financial, “While the details are awaited, we believe the most likely candidates will be from the pool of banks which were not part of consolidation. While these candidates are small and are not expected to provide any material resources to the government, we believe that this is a step in the right direction and can act as a test case for privatisation of other major public sector banks in future.”

In a note to its clients, Kotak Institutional Equities said the task of privatising two PSU banks may be difficult to achieve but could result in more privatisations, if successful. Lack of interest among potential buyers remains a key concern given the structure of these banks, Kotak said.

In an interview with CNN News 18, Niramala Sitharaman said the government wanted more public sector banks which are functionally strong, professionally managed and can meet the demands of growing aspirational India. “If I am going to be sitting around with such public sector banks which are just not in a mood or a position to stand up, is it right to pour tax-payers money into such banks? When there may be buyers who can buy and run it efficiently,” she said.

The government has proposed to introduce required legislative amendments for privatisation of two PSBs in the Budget session itself.

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