Rs 74K cr bank loan defaults in '09-10
The absolute figures may be scary that the banking system in India is saddled with Rs. 74,685 crores as at 31st March, 2010, but in percentage terms it is very much under control as also within global standards. Share of Public Sector Banks may also look alarming but once again in per centage terms, they are more efficient than Private Sector Bank for a consecutive third year. When we reckon the absolute growth of advances or percentage increase, it is PSBs that are far ahead of their private counter-parts.
The general impression that Public Sector is bad, inefficient or unproductive is a mere misnomer. Going by their size, historical age and reasons, they are justified in extending credit on liberal terms as per the prudential norms and RBI guidelines.
Showing posts with label PSBs. Show all posts
Showing posts with label PSBs. Show all posts
Tuesday, July 27, 2010
Thursday, July 22, 2010
Woman CEOs of Banks in India
To my remembrance, the first Woman Chief Executive (CMD) of any bank in India was Ms. Ranjana Kumar heading Indian Bank, Chennai over a decade back. She started her career in Bank of India and was ED of Canara Bank. She was considered to be very skillful in turning around the Indian Bank. She later handled NABARD as Chair-person and in the Vigilance Commission, Government of India.
Ms HA Daruwala was the next top woman executive to work as CMD of Central Bank of India in 2005. Woman CMD of Central Bank of India. She was a Chartered Accountant by qualification, started her career in Union Bank of India as an Officer, later to become ED of Oriental Bank of Commerce.
Both the above are successful women executives raising to the position of CMD in Public Sector Banks. We have Ms Naina Lal Kidwai among Foreign Bank Country Heads. She started in ANZ Grindlays bank, moved to StanChart and later to HSBC Bank as MD. She is always referred in terms of Beauty with Brain. Also she is included in the who is who of Indian Entrepreneurs. Naina Lal Kidwai Profile. One more important woman chief of a foreign bank is Ms. Kalpana Morparia of JP Morgan after serving ICICI Bank for long years. Kalpana's appointment
And in recent times, two female bankers are hitting the head lines for their successful handling of top positions in ICICI Bank and Axis Bank. They are Ms Chanda Kochhar and Ms Shikha Sharma. Business India magazine, in its June 27, 2010 issue had extensively covered the leadership exhibited by Ms Kochhar (cover photo). Similarly, in its July 25, 2010 issue Ms Shikha Sharma of Axis Bank has been discussed the way she is handling the bank most with high efficiency. These two are role models for Women Executives not only in Banks but also the male dominated corporate world in the technology driven twenty-first century in India.
To add to the list of above executives in Foreign, PSBs and Private Sector Banks in India, are two more women Deputy Governors - Ms Shyamala Gopinath and Ms Usha Thorat. These two form the think tank of the Regulator, Big Brother and Policy Maker of the Banking Industry assisting the Governor of RBI, and associating with the two other Deputy Governors of India. We should be proud of all these women.
Ms HA Daruwala was the next top woman executive to work as CMD of Central Bank of India in 2005. Woman CMD of Central Bank of India. She was a Chartered Accountant by qualification, started her career in Union Bank of India as an Officer, later to become ED of Oriental Bank of Commerce.
Both the above are successful women executives raising to the position of CMD in Public Sector Banks. We have Ms Naina Lal Kidwai among Foreign Bank Country Heads. She started in ANZ Grindlays bank, moved to StanChart and later to HSBC Bank as MD. She is always referred in terms of Beauty with Brain. Also she is included in the who is who of Indian Entrepreneurs. Naina Lal Kidwai Profile. One more important woman chief of a foreign bank is Ms. Kalpana Morparia of JP Morgan after serving ICICI Bank for long years. Kalpana's appointment
And in recent times, two female bankers are hitting the head lines for their successful handling of top positions in ICICI Bank and Axis Bank. They are Ms Chanda Kochhar and Ms Shikha Sharma. Business India magazine, in its June 27, 2010 issue had extensively covered the leadership exhibited by Ms Kochhar (cover photo). Similarly, in its July 25, 2010 issue Ms Shikha Sharma of Axis Bank has been discussed the way she is handling the bank most with high efficiency. These two are role models for Women Executives not only in Banks but also the male dominated corporate world in the technology driven twenty-first century in India.
To add to the list of above executives in Foreign, PSBs and Private Sector Banks in India, are two more women Deputy Governors - Ms Shyamala Gopinath and Ms Usha Thorat. These two form the think tank of the Regulator, Big Brother and Policy Maker of the Banking Industry assisting the Governor of RBI, and associating with the two other Deputy Governors of India. We should be proud of all these women.
Thursday, July 8, 2010
PSBs vs. Private and Foreign Banks in India
Indian Banks deserve more credit
Seven years back ie., in 2003, a joint research paper was published by me and Dr KS Srinivasa Rao and presented at an International Conference organised by ICFAI, Hyderabad. The title of the paper was 'Can Public Sector Banks compete with Private and Foreign Banks in India?' and it was concluded that "Yes".
The article appearing in today's Business Line with the above caption proves it. Even after five years, the Deposit and Credit growth of PSBs during last five years 2004-09 proves that PSBs in India are far above their private and foreign counterparts. We also worked on two separate papers in the later years 2004 and 2005 evaluating the performance and working of Private Banks and Foreign Banks and their sustainability. Figures do not lie. It gives me immense satisfaction that our findings continue to be highly reliable.
Seven years back ie., in 2003, a joint research paper was published by me and Dr KS Srinivasa Rao and presented at an International Conference organised by ICFAI, Hyderabad. The title of the paper was 'Can Public Sector Banks compete with Private and Foreign Banks in India?' and it was concluded that "Yes".
The article appearing in today's Business Line with the above caption proves it. Even after five years, the Deposit and Credit growth of PSBs during last five years 2004-09 proves that PSBs in India are far above their private and foreign counterparts. We also worked on two separate papers in the later years 2004 and 2005 evaluating the performance and working of Private Banks and Foreign Banks and their sustainability. Figures do not lie. It gives me immense satisfaction that our findings continue to be highly reliable.
Wednesday, July 7, 2010
PSU Banks may link pay with performance!
PSU Banks may link pay with performance!
Unbelievable. That I read a news item in Financial Express today about this radical departure in public sector. Only two days back RBI took a bold step of monitoring of pay of CEOs of private sector banks in India. There was huge difference in the pays of private and public sector banks at all levels, leading to large scale dissatisfaction and demotivation among public sector banks. Research has shown that in no way, these PSBs were inferior to private banks. In fact, in recent years, thanks to reforms PSBs have also turned around, became customer-savvy, tech-savvy, profit oriented, productive, modern and so on. They carry out over 80 per cent of the banking business in India. Comparatively, Private and Foreign Banks were only handful, and were not responsive to handle developmental banking vis-a-vis PSBs.
Unbelievable. That I read a news item in Financial Express today about this radical departure in public sector. Only two days back RBI took a bold step of monitoring of pay of CEOs of private sector banks in India. There was huge difference in the pays of private and public sector banks at all levels, leading to large scale dissatisfaction and demotivation among public sector banks. Research has shown that in no way, these PSBs were inferior to private banks. In fact, in recent years, thanks to reforms PSBs have also turned around, became customer-savvy, tech-savvy, profit oriented, productive, modern and so on. They carry out over 80 per cent of the banking business in India. Comparatively, Private and Foreign Banks were only handful, and were not responsive to handle developmental banking vis-a-vis PSBs.
Thursday, March 18, 2010
Re-Capitalisation of Banks in India
Financial Sector (including Banks) Reforms at country-level and Introduction of Basel-1 & 2 norms at global level happened almost simultaneously. All the ills of inefficient working of banks during eighties (loan melas, poor customer care, limited product range, regulated interest rates, unproductive branch expansion, trade unionism, absence of mechanisation/computerisation, lack of Risk / Asset Liability Management mechanisms, low or no competition or level playing field, etc) exposed the banking system to its heights. Capital was never considered a measure or yard-stick or parameter to judge their performance as paper-dividends were declared due to interest being calculated on even bad and doubtful debts (now called NPAs) irrationally.
Capital Adequacy Norms necessatated almost all the banks, in particular PSBs either from the Govt funds or by going public in order to meet the global standard of at least 8% CAR; with India choosing at 9%. Some how over a decade's time, all the banks have met the requirement including through infusion of funds from Govt sources. Come Basel 2 norms, it has become essential for these banks to scale the CAR to at least 12%. In the process it has become an annual affair that GOI has been pumping capital for the last three years. In the recent budget too, the FM proposed to add Rs. 16,500 crores into capital of PSBs. Instead, these banks should tighten their belts and improve their working; prune down their NPAs so that when they approach capital market, the investing public will judge their efficiency and subscribe to the issues.
Capital Adequacy Norms necessatated almost all the banks, in particular PSBs either from the Govt funds or by going public in order to meet the global standard of at least 8% CAR; with India choosing at 9%. Some how over a decade's time, all the banks have met the requirement including through infusion of funds from Govt sources. Come Basel 2 norms, it has become essential for these banks to scale the CAR to at least 12%. In the process it has become an annual affair that GOI has been pumping capital for the last three years. In the recent budget too, the FM proposed to add Rs. 16,500 crores into capital of PSBs. Instead, these banks should tighten their belts and improve their working; prune down their NPAs so that when they approach capital market, the investing public will judge their efficiency and subscribe to the issues.
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