Volume XXXIII Number 22 February 26, 2018

Weeklies

BI – Business India

BusW – Business World

BusT – Business Today

CMar – Capital Market

EPW – Economic and Political Weekly

SE – Southern Economist

Eco – Economist

For(Asia) – Fortune AsiaCI – Corporate India

Newspapers

BS – Business Standard

ET – Economic Times

FE – Financial Express

FT – Financial Times

H – Hindu

HBL – Hindu Business Line

HT – Hindustan Times

IE – Indian Express

TI – Times of India

Mint – Mint

Classifications

Economy Banking Agriculture & Rural Development Industry Small Scale Industry

International Economics Labour & Personnel Management Management Miscellaneous Books

CONTENTS

A. ECONOMY 1

B. BANKING 2

C. AGRICULTURE AND RURAL DEVELOPMENT 17

D. SMALL SCALE INDUSTRY 17

E. INTERNATIONAL ECONOMICS 17

F. LABOUR & PERSONNEL MANAGEMENT 17

G. MISCELLANEOUS 17

– 1 –

BANKERS' BRIEF Vol. XXXIII No. 22February 26, 2018

ECONOMY"Financial conditions deteriorate in Jan-Mar, says CII-IBA index" – An index mapping the country's

short-term financial conditions has plunged over 12 points for the fourth quarter of the current fiscal yearending March 31, as compared to the previous quarter. The CII-IBA Financial Conditions Index stood at 53.2for the fourth quarter of 2017-18 as against 65.3 in the Oct - Dec period. Overall index reading is optimisticabout the financial sector though the cost of fund index has contracted significantly, according to UshaAnanthasubramanian, IBA chief and MD & CEO, Allahabad Bank. A report. – (BS Feb 19, 2018 p 12)

"More than 'growth vs inflation', improving investment is the key: The message isalso that thebanking system needs a fix quickly" – Even as the monetary and fiscal policy-makers are grappling withthe 'growth versus inflation' debate to determine India's economic future, they should also give top priority tofinding a way out of the current mess in the banking system and improve the private investment cycle. Thiswas the key message that came out of the session on 'Balancing Growth and Inflation'. Dr D Subbarao, DrC Rangarajan, Montek Singh Ahluwalia, former Deputy Chairman Planning Commission participated in thediscussion. A report. – (HBL Feb 19, 2018 p 17)

"World Bank's India diagnostic report" – Recently the World Bank released the so-called SystematicCountry Diagnostic for India. It is estimated that if the country grows at 8 per cent and above for the nextthree decades, the Indian economy will become one of the dominant ones by the middle of this century. Thedraft reort looks at some of the key aspects that policymakers need to address to achieve its potential. Areport. – (BS Feb 19, 2018 p 4)

BUDGET 2018-19Kapoor, Rana – "Making labour more employable" – The Budget, by choosing to invest in and develop

human capital, has made a great beginning. An article. – (FE Feb 22, 2018 p 9)

FOREIGN EXCHANGE RATE"Industry paying price for a strong currency: CEA" – Indian industry is paying the price of a strong

currency, partly driven by a political economy that equates it with national strength, according to ArvindSubramanian, Chief Economic Advisor, Govt. of India. Explaining the reasons for the government allowingthe currency to appreciate, he pointed out that the exchange rate policy is determined by macro economics,government policy and the political economy. A report. – (HBL Feb 20, 2018 p 1)

FOREIGN TRADE"Export growth rate dips to 9.07% in Jan: Trade deficit balloons to nearly 5-year high at $16.3 bn" –

Growth in exports reduced in January to 9.07 per cent, from 12.03 per cent in December. With exports of$24.38 billion, the growth rate in January dipped to a single digit for the first time in three months. The rate inDecember more than halved to 12.4 per cent, from November's 30.5 per cent. On the other hand, the figuresmade clear that India is set to overshoot in 2017-18 the $380.36 billion import bill of the previous financialyear. The pace of imports continued to quicken for the third straight month, leading to inbound shipments inJanuary rising by 26.10 per cent, higher than the 21.1 per cent rise in the previous month. A report.– (BS Feb 16, 2018 pp 1, 10)

INFLATION"WPI inflation at 6-month low on cheaper food, fuel: analysts see wholesale prices in the 2.5-3%

range for the rest of the fiscal year" – Wholesale inflation eased to a six-month low in January as foodarticles including fruits and vegetables as well as fuel became cheaper. Data showed that wholesale priceindex-based inflation stood at 2.84 per cent in January as against 3.58 per cent in December. It was 4.26 percent in January 2017. A report. – (HBL Feb 16, 2018 p 4)

– 2 –

BANKING

ALLAHABAD BANK

– EMPLOYEE SHARE PURCHASE SCHEME

"Allahabad Bank share sale to staff sees 87.6% subscription" – Allahabad Bank share sale to employeesclosed last week with an 87.6% subscription, exceeding the management expectations, even as a section ofemployees had alleged they were pressured to buy the shares. Allahabad Bank raised around Rs.236 crorethrough the share sale against its target of around Rs.270 crore. A report. – (Mint Feb 19, 2018 p 6)

– PNB FRAUD

"Allahabad Bank has Rs.2,363-cr exposure to fraud" – Kolkata-based Allahabad Bank has said it has anexposure of $366.87 million (approximately Rs.2,363 crore) in the PNB fraud case. A report.– (HBL Feb 17, 2018 p 6)

AXIS BANK"Axis Bank raises MCLR for one year to 8.4%" – Axis Bank raised its MCLR by 10 basis points for some

tenures. A report. – (FE Feb 20, 2018 p 10)

"Axis Bank says it sold PNB exposure in Hong Kong" – Axis Bank said it 'sold down all the buyers' credittransactions undertaken by its Hong Kong branch with Punjab National Bank. Buyers' credit is a loan extendedby a bank to an importer to finance imports. Banks usually sell down loans/bonds to reduce their exposure. Areport. – (HBL Feb 16, 2018 p 10)

BANK OF BARODA"Bank of Baroda enters into MoU with STAC" – Bank of Baroda enters into MoU with Small Farmers'

Agribusiness Consortium (SFAC) as a Preferred Bank for the State of Maharashtra on 07.02.2018.– (BS Feb 20, 2018 p 7)

"BoB has Rs.456-cr exposure to Rotomac Global" – State-owned Bank of Baroda (BoB) said it has anexposure of Rs.456.6 crore to Rotomac Global, currently being investigated by CBI and the EnforcementDirectorate in connection with an alleged bank loan fraud of Rs.3,695 crore. – (HBL Feb 21, 2018 p 12)

– FRAUDS

"BoB denies it delayed action in Rotomac case" – Bank of Baroda (BoB) has denied the Central Bureauof Investigation (CBI) assertion that it had not acted in time in the Rotomac fraud. The bank has said that itspent months in legal battles to declare the borrower a wilful defaulter and in investigations to establish fraud.A report. – (TI Feb 22, 2018 p 17)

BANK OF INDIA"Bank of India bags 3 awards" – Bank of India bagged 3 Awards at the recently concluded ET Now World

CSR Excellence and Leadership Awards. Bank of India won the awards in the following 3 categories. 1)Best corporate social practices; 2) Promoting employment for the physically challenged; and 3) Support andImprovement in quality of education. The event was held at Taj Lands End Mumbai to commemorate WorldCSR Day. – (BS Feb 22, 2018 Pt.II p 7)

"Bank of India gets investors' approval to raise Rs.19,332 crore" – Bank of India said that it hasreceived shareholders' approval for various fund-raising proposals. Shareholders have approved a resolutionfor issue of 13.65 crore shares, aggregating to Rs.2,257 crore on preferential basis to the Government ofIndia at Rs.165.32 a share. A report. – (HBL Feb 21, 2018 p 13)

– 3 –

"Shri Mrityunjay Kumar Gupta, GM(HR), Bank of India conferred with prestigious award by WorldHRD Congress" – Shri Mrityunjay Kumar Gupta, General Manager (HR), Bank of India has been conferredwith prestigious 'HR Professional of the Year' Award by World HRD Congress during a glittering Global HRExcellence Award 2018. – (BS Feb 20, 2018 p 7)

– FRAUDS

"Rotomac loan turned NPA in FY16; made full provision: Bank of India" – State-owned Bank of Indiasaid it had sanctioned some loan to Rotomac group companies as a consortium lender and that had turned intoa non-performing asset (NPA) or bad loan in 2015-16 for which it has already made 100 per cent provisioning.A report. – (HBL Feb 22, 2018 p 6)

BANK OF MAHARASHTRA"BoM to recall perpetual debt amid bad loan woes" – One of India's biggest regional lenders is recalling 15

billion rupees ($231 million) of perpetual bonds as it seeks to retire expensive debt and replenish its riskbuffers. Mumbai-based Bank of Maharashtra will call back the notes on March 17, ahead of their call datesin 2020 and 2021, according to a person familiar with the matter. The two securities carry a coupon of 9.48%and 11.6%, respectively. A report. – (FE Feb 22, 2018 p 10)

CATHOLIC SYRIAN BANK"Fairfax India offers Rs 1,200 cr for 51% stake in Catholic Syrian Bank: At Rs 140 per share, the

current offer is lower than the earlier one" – According to CSB officials, Fairfax has formally indicatedits continued interest in investing 51% in the share capital at a mutually agreed price of Rs 140 per share. Areport. – (HBL Feb 20, 2018 p 10)

CITY UNION BANK"City Union Bank loses $2 m in cyberattack, retrieves half of it" – Hackers traced to Turkey, China and

Dubai used SWIFT messaging system for the crime. A report. – (ET Feb 17, 2018 p 6)

"City Union Bank suffers cyber hack via SWIFT: $2 million transferred" – City Union Bank said thatcyber criminals had hacked its systems and transferred nearly $2 million through three unauthorised remittancesto lenders overseas via the SWIFT financial platform. A report. – (IE Feb 19, 2018 p 12)

"Lavender pares stake in CUB" – Foreign investor Lavender Investments sold 60 lakh shares of City UnionBank for nearly Rs 100 crore through an open market transaction. – (HBL Feb 16, 2018 p 10)

DHANLAXMI BANK"At Dhanlaxmi Bank, officers step forward to help tackle NPAs" – Officers' body will spearhead a loan

recovery drive to turn around the bank in FY18. A report. – (HBL Feb 22, 2018 p 6)

IDBI BANK"IDBI sells its entire 30% stake in NSDL e-Gov Infra" – Public sector IDBI Bank said it has sold its

entire 30 per cent stake in NSDL e-Governance Infrastructure Ltd for an undisclosed amount. 'IDBI Bankhas sold entire 1,20,00,000 equity shares constituting 30 per cent of the paid up capital of NSDL e-GovernanceInfrastructure Ltd (NEGIL) on February 15, 2018,' IDBI Bank said in a regulatory filing.– (FE Feb 16, 2018 p 10)

IDFC BANK"IDFC Bank launches operations in Telangana" – IDFC Bank has launched services in Telangana as part

of its nationwide expansion to build a retail franchisee for the masses. Its first branch in the country'syoungest State is located in Banjara Hills. A report. – (HBL Feb 22, 2018 p 16)

– 4 –

INDIAN BANK"Indian Bank bags Symbol of Excellence Award" – Shri Kishor Kharat, MD & CEO, Indian Bank received

the award titled 'Symbol of Excellence' in the BFSI sector. Indian Bank was adjudged as the best brandunder Banking, Financial Services, and Insurance sector instituted by ET. – (HBL Feb 16, 2018 p 2)

INDIAN OVERSEAS BANK"IOB to discount invoices of MSMEs" – Indian Overseas Bank has entered into the Trade Receivable

Discounting System platform provided by Receivables Exchange of India for discounting invoices of MSMEs.the platform allows MSMEs to auction their receivables through an online bidding process, in which variousfinanciers participate, giving them better access to finance. – (HBL Feb 16, 2018 p 10)

PUBLIC SECTOR BANKS

– FRAUDS

"People, not processes, responsible" – The alleged fraud at Punjab National Bank (PNB) has raisedquestions over the processes and systems in public sector banks (PSBs), but bankers say there are a numberof reasons why it's always the PSBs that seem to be affected, whereas private and foreign banks seem to bethe most efficient. Bankers also say it is the nature of the business of public sector banks that makes themsusceptible to fraud. The biggest banks in the country, such as State Bank of India, PNB, Bank of Baroda,and Bank of India, can afford to issue loans of hundreds of millions, but smaller private banks cannot takeexposure in those assets because of limitations of their balance sheet size. A report. – (BS Feb 16, 2018 p 4)

PUNJAB NATIONAL BANK"CRISIL puts PNB bonds on rating watch" – Rating agency Crisil has placed Punjab National Bank's

(PNB) ratings on the debt instruments of Rs.22,223 crore on 'Rating Watch with Developing Implications'. –(FE Feb 18, 2018 pp 1, 16)

"Fitch, Moody's warn PNB of potential rating downgrade" – Global rating agencies Moody's and Fitchplaced scam-hit Punjab National Bank under close watch and warned of a potential downgrade. WhileMoody's has placed under review for downgrade PNB's local and foreign currency deposit rating, Fitch hasput on watch the bank's viability rating. – (HBL Feb 21, 2018 p 12)

"Govt weighs PNB recap hike: Lender may also be put under RBI's prompt corrective actionframework" – The recapitalisation amount earmarked for Punjab National Bank (PNB) by the Centre is setto increase with the unravelling of the Rs.114 billion letters of undertaking (LoUs) scam. PNB's performancemetrics are also being reviewed to see if it requires to be put on the Reserve Bank of India's list for promptcorrective action (PCA), according to sources familiar with the developments. Scam fallout: * PNB's recaprequirements may increase slightly; * RBI checking if the bank needs prompt corrective action (PCA); *PNB, as a 'non-PCA' bank, got Rs.54 bln in recap for FY18; * Banks are recapped primarily on provisioningrequirement; * Looking to turn narrative, govt to expedite other banking reforms; * Pending steps includeprivatization of IDBI Bank, changes in bank boards, management. A report. – (BS Feb 22, 2018 pp 1, 6)

"Have enough assets to meet any liability decided as per law: PNB" – In a clarification to the stockexchanges regarding the $1.77 billion fraud, PNB has said that it has enough assets to meet any liabilitywhich is decided as per law. A report. – (HBL Feb 21, 2018 p 12)

"Have strong sovereign backing, adequate capital, PNB assures customers" – Scam-hit PNB hasassured investors and customers that it has a strong sovereign backing and adequate capital to deal with thesituation in the aftermath of the Rs.11,400-crore fraud. A report. – (HBL Feb 22, 2018 p 6)

"Normalcy to return in 6 mths: PNB MD" – Punjab National Bank Managing Director and Chief ExecutiveOfficer Sunil Mehta said normalcy would be restored at the scam-hit public sector bank within six months.He said the bank would not slip under the Reserve Bank of India prompt corrective action (PCA) even if ithad to absorb the full liability of Rs.114 billion involved in the latest banking scam, in which letters of undertaking

– 5 –

(LoUs) were fraudulently issued by PNB staff to the companies run by Nirav Modi, the prime accused in thecase. We have a network of 7,000 branches, and one standalone branch cannot spoil the entire working ofthe big organisation set-up. The amount is big, but we have the capacity to bring it back to normalcy... may bewithin six months. A report. – (BS Feb 17, 2018 p 1)

"PNB acts to capture SWIFT in its core banking solution" – Hit by a Rs 110-billion fraud, PNB has finallymoved to integrate the SWIFT international financial communication system into its Core Banking Solution.Done through upgrading its banking software, Finacle7 to Finacle 10. A report. – (BS Feb 19, 2018 p 6)

"PNB loses Rs.8k cr m-cap in 2 days; 6 times annual profit" – Stung by a massive Rs.11,400 crore fraud,state-run Punjab National Bank (PNB) has lost over Rs.8,000 crore of market valuation in two days - anamount equivalent to over six-times its full-year profit. This could be the biggest banking fraud in India as itsquantum was bigger than an estimated Rs.9,000 crore scam at erstwhile Satyam Computers. A report.– (FE Feb 16, 2018 p 11)

"PNB will honour all commitments: MD" – PNB had already conducted a meeting of the lenders consortiumbecause the companies involved have relationships with a number of banks. Sunil Mehta says Nirav Modihas made vague offers and has not come up with a repayment plan. A report. – (ET Feb 16, 2018 p 9)

Iyer, Aparna – "Is PNB down the rabbit hole?" – An article. – (Mint Feb 20, 2018 p 4)

– FRAUDS

"Agencies to probe overseas branches of Indian Banks: We are not the only one(s); PNB to CBI" –The fact that such a significant RBI guideline was flagrantly violated by a number of Banks raises a suspicionon the involvement of more bank officials, according to a top government official. A report.– (ET Feb 19, 2018 p 2)

"Arun Jaitley faults auditors, management for PNB fraud: Finance Minister says cheaters will beforced to pay up" – Finance Minister Arun Jaitley said the government would make every effort to chase'unethical' businesses to ensure they pay their dues, while stressing that supervisory agencies must introspectand ensure such 'stray cases' do not become a pattern. A report. – (HBL Feb 21, 2018 p 1)

"Banks ignored potential red flag for two years: Lenders allowed CARE to withdraw ratings forNirav Modi's company" – Banks led by Punjab National Bank (PNB) ignored crucial warnings by CARERatings in February 2016 that Nirav Modi flagship company, Firestar International Private International(FIPL), had a high leverage, large off-balance sheet exposure and limited customer and geographical spread.A report. – (BS Feb 16, 2018 p 4)

"CVC asks PNB to submit report in 10 days: ED, CBI continue with search operations in variouscities" – The Central Vigilance Commission asked the scam-hit Punjab National Bank to submit the reportin next 10 days detailing the systemic lapses that may have led to the fraud at its Brady House branch inMumbai. A report. – (HBL Feb 20, 2018 p 1)

"Double trouble: exposure may jump to Rs 20,000 cr" – The exposure of Indian banks in the alleged fraudinvolving jeweller Nirav Modi, his relatives and associated companies may touch Rs 20,000 crore, accordingto bankers and government officials, almost twice the initial estimate. Bonafide credit to related firms nowrisks being classified as bad debt given that the promoters have been accused of fraud. A report.– (ET Feb 19, 2018 p 1)

"How Punjab National Bank became a victim of India's biggest bank fraud" – The Punjab NationalBank fraud comes to light at a time when lenders - especially the state-run banks - are hobbled by Rs.9,393.3billion in soured loans on their books, a problem that has choked new lending and hurt the country's economicrecovery. A report. – (BS Feb 16, 2018 p 4)

"Nirav Modi scam: I-T officials question PNB's top brass: CBI arrests PNB official of GM rankposted at head office" – The top brass of the scam-hit Punjab National Bank (PNB) were questioned atthe bank's head office by Income Tax sleuths pursuing the Rs.11,400-crore Nirav Modi scam. Senior incometax officials quizzed PNB Managing Director Sunil Mehta and the Executive Directors at the bank swanknew head office at Dwarka. A report. – (HBL Feb 22, 2018 p 1)

– 6 –

"No orders to PNB to pay up: RBI" – The RBI denied sending instructions to Punjab National Bank to meetits Letter of Undertaking (LoU) commitments to other banks. There have been reports in the media that inthe wake of fraud involving a sum of $1.77 billion that has surfaced in Punjab National Bank (PNB), theReserve Bank of India (RBI) has directed PNB to meet its commitments under the LoU to other banks. RBIdenies having given any such instructions. – (HBL Feb 17, 2018 p 1)

"PNB fraud: AIBEA wants top brass out till probe on" – The govt. should step into the ongoing PNB fraudcase and keep out top management and officials until the probe is complete and accountability fixed, bankunion AIBEA demanded. the impression is that only lower level officials were involved. A report.– (FE Feb 20, 2018 p 10)

"PNB fraud: Indian banks may take over $3-bn hit, says tax dept note" – Three arrested, sent to CBIcustody; fresh raids, more seizures by ED. A report. – (FE Feb 18, 2018 pp 1, 16)

"PNB fraud: SC refuses to step in, says let govt probe: AG opposes plea seeking Nirav Modi'sdeportation from being taken up at this point" – The Supreme Court refused to intervene in a pleaconcerning the PNB fraud worth Rs.11,400-crore involving jeweller Nirav Modi, saying it would allow thegovernment to investigate the issue for now. 'This is playing to the gallery. Let the government do its duty andinvestigate. We will step in later, if required,' according to Justice D Y Chandrachud. A report.– (Mint Feb 22, 2018 p 8)

"PNB fraud: where does the buck stop?" – Three former deputy governors of the RBI - K C Chakrabarty,R Gandhi and S S Mundra and R K Bakshi, former executive director of Bank of Baroda, comment ondevelopments and issues surrounding the fraud at Punjab National Bank, Edited excerpts.– (Mint Feb 16, 2018 p 12)

"PNB may be liable to pay foreign branches of banks: lender says it will honour commitments, buthas not clarified whether it will bear entire liability" – A day after PNB announced that it had uneartedfraudulent transactions worth Rs 11,400 crore at one of its branches in Mumbai, the key question is who isliable to pay this amount. While PNB has said it will honour its commitments, it did not clarify whether it willbear the entire liability, pointing out that the matter is under investigation. However, lawyers said that theliability to pay foreign branches of banks rests with PNB. A report. – (Mint Feb 16, 2018 p 6)

"PNB suspends 8 more officials, to repay other banks by March-end" – Punjab National Bank (PNB),which is at the centre of India's biggest banking fraud, has suspended eight more officials, including one atgeneral manager level, for their suspected involvement in the multi-crore scam, according to a seniorgovernment official. The official also said that PNB will repay other banks their dues by March 31 and wouldbe funded from internal resources. On Wednesday, 10 bank employees had been suspended after the bankreported fraudulent transactions of more than Rs.11,300 crore to stock exchanges. A report.– (FE Feb 17, 2018 p 10)

"RBI may impose penalty" – The central bank is likely to ask PNB to make good the Rs 11,300 crore thatother banks in Hong Kong gave to 'overseas suppliers' of its Indian diamantaire customers based on its lettersof undertaking. Further the central bank may impose stiff monetary penalties on the public sector bank inview of fraudulent and unauthorised transactions coming to light at one of its branches in Mumbai. A report.– (HBL Feb 16, 2018 p 10)

Bandyopadhyay, Tamal – "The anatomy of the PNB fraud" – An article. – (Mint Feb 19, 2018 p 8)

Chaki, Deborshi & Others – "Deconstructing the fraud: where checks and balances failed"– An article. – (Mint Feb 20, 2018 p 8)

Chakravarty, Manas – "Who's responsible for the Rs 11,400 crore PNB scam?" – An article.– (Mint Feb 20, 2018 p 8)

Dey, Sudipto – "PNB scam: who's liable?" – While the scam highlights the need for an overhaul of theoversight mechanism of banks and of their internal controlos, questions are being raised on why multipleaudits failed to raise an alarm. An article. – (BS Feb 19, 2018 p 10)

– 7 –

Menon, Anjana – "Punjab National Bank fraud: Hold on, this ain't a hold-up!" – An article.– (ET Feb 17, 2018 p 8)

Merwin, Radhika – "PNB scam: How a system was gamed" – From inter-bank communications to auditprocesses, all checks and authorisations were compromised in the fraud. An article.– (HBL Feb 22, 2018 p 9)

– VIGILANCE

"The irony: In 3 years, PNB won 3 awards for vigilance" – Even as PNB was being defrauded of thousandsof crores - allegedly Rs 11,400 crore over seven long years - it was winning awards for excellence in bankingvigilance. Over the past three years, the bank that is now in the dock for allegedly allowing rogue employeesto game the system to benefit firms controlled by diamantaires Nirav Modi and Mehul Choksi, bagged threevigilance excellence awards. A report. – (IE Feb 19, 2018 pp 1,2)

– WILFUL DEFAULTERS

"PNB sees 23% rise in money owed by large wilful defaulters" – Scam-hit Punjab National Bank hasseen nearly 23 per cent jump in the amount which wilful defaulters owe it, with loan outstanding of Rs.25 lakhand above, in just over eight months ended January. The wilful defaulters who have taken loans over Rs.25lakh from the bank had a gross outstanding against them of Rs.14,593.16 crore as on January 31, 2018, as perPNB data. A report. – (HBL Feb 19, 2018 p 13)

STATE BANK OF INDIA"Credit risks are known, but opertional aren't: SBI head: may list SBI General, Cards of MF Arm in

FY20, says Kumar" – The country's largest lender SBI has recently grown bigger on the back of a mergerwith associate banks. Chairman Rajnish Kumar has seen SBI through the integration process even as itretained and grew market share in home and auto loans respectively, In an interaction Kumar speaks of thecurrent environment and the road ahead. Edited excerpts. – (TI Feb 19, 2018 p 15)

"SBI launches global customer service centre for NRIs in Kochi" – State Bank of India launched itsGlobal NRI Centre (GNC) in Kochi, a one-stop customer service point for all NRI banking-related activities.To further enhance the service experience for NRIs, the bank also launched other services such as wealthmanagement, SBI Intelligent Assist, free post-box, and remittance facility for US-based customers.– (HBL Feb 17, 2018 p 6)

"SBI: Will settle LoU issue with PNB bilaterally" – State Bank of India (SBI) said it will bilaterally settlewith Punjab National Bank (PNB) the issue of payments involving letters of undertaking (LoUs) in the NiravModi case. PNB reiterated that it would honour all bona fide commitments on LoUs and foreign letters ofcredit in accordance with laws and RBI directions. – (ET Feb 20, 2018 p 13)

"Some SBI customers see a/cs shifted to other branches without prior consent: exercise aimed atrationalising branches to contain costs" – If you have an account with SBI, it's time you double-checkedthe address of your branch. In an unprecedented move the bank has been shifting some accounts fromexisting branches to other locations without prior information or consent. A report. – (HBL Feb 16, 2018 p 10)

– BANK CAPITAL

"SBI to issue shares to govt for Rs.8,800-cr capital infusion" – State Bank of India said it will issue equityshares to government at a price of Rs.300.82 a piece against a capital infusion of over Rs.8,799.99 crore. Areport. – (FE Feb 17, 2018 p 10)

– PNB FRAUD

"SBI has a $212-m exposure to PNB's LoU deals, says Chairman: No direct deals with Nirav Modi,says Rajnish Kumar" – State Bank of India Chairman Rajnish Kumar clarified that the bank has no directexposure to the controversial diamond dealer Nirav Modi, but admitted to some transactions with PunjabNational Bank in this case. A report. – (HBL Feb 17, 2018 p 1)

– 8 –

-SALE OF NPAs

"SBI's Rs.1,935-crore loans up for ARC bids" – State Bank of India (SBI) put on sale loans worthRs.1,935.62 crore to 24 different entities. It has sought bids for these from asset reconstruction companies(ARCs) on cash basis or a mix of cash and security receipts (SRs), according to a sale document. Biddingwill be held on the bank's e-auction platform. A report. – (FE Feb 17, 2018 p 10)

UNITED BANK OF INDIA"United Bank of India launching 'United e Collect'" – United Bank of India, a leading Public Sector Bank

in India having it's headquarter at Kolkata, has moved a step ahead towards Digital Banking by Launching'United e- Collect' - A digital Platform for Online Payment/Fee Collection Services. – (BS Feb 20, 2018 p 7)

YES BANK"YES Bank to raise Rs.3k cr via Basel-III bonds" – YES Bank said its capital-raising committee has given

its approval for raising Rs.3,000 crore via Basel III compliant tier 2 bonds. The capital raising committee ofthe board of the bank...has approved the issue of rated, listed, non-convertible, redeemable, unsecured, BaselIII compliant tier 2 bonds, in the nature of debentures, of Rs.10,00,000 each aggregating Rs.3,000 crore.– (FE Feb 22, 2018 p 10)

AUSTRALIA"Australia banks tighten mortgage checks" – Australia's largest banks have stepped up screenings of

mortgage loan applications amid a powerful government-backed inquiry into the nation's lenders and theirsales practices, potentially hurting revenues from their most lucrative products. A report.– (BS Feb 17, 2018 p 5)

JAPAN

– BANK OF JAPAN

"BoJ chief stays in post as Abe signals resolve to defeat deflation: Architect of Tokyo's monetarystimulus policy set to be reappointed" – Japan is set to sustain its monetary stimulus for another fiveyears after Haruhiko Kuroda was renominated as governor of the Bank of Japan, with a noted dov e for oneof his deputies. A report. – (FT Feb 17/18, 2018 p 5)

"Kuroda deserves another term as head of the BoJ" – Inflation remains elusive, but monetary easing wasthe right policy. An editorial. – (FT Feb 16, 2018 p 8)

USA

– FEDERAL RESERVE

"Five rate hikes by Federal Reserve in 2018 isn't a crazy idea" – A report. – (ET Feb 22, 2018 p 11)

Tett, Gillian – "How to read the regime change at the Fed" – An article. – (FT Feb 16, 2018 p 9)

BANK CAPITAL

– PUBLIC SECTOR BANKS

"Parliamentary Panel seeks FinMin report: Questions recapitalisation process" – The ParliamentaryStanding Committee on Finance questioned finance ministry officials about the $1.77 billion fraud in the state-owned Punjab National Bank (PNB) and asked them to submit a report on it. A report.– (H Feb 16, 2018 p 13)

– 9 –

BANK FRAUDS"FinMin seeks RBI's view on lapses in banking system" – The Finance Ministry has sought the RBI's

view on the lapses in the banking system that led to the Rs 11,400 crore fraud at the PNB and steps requiredto check recurrence of such incidents, sources said. The ministry has also sought RBI's view on failure ofauditors to detect the fraud that has been going on since 2011. A report. – (HBL Feb 20, 2018 p 10)

"Forewarned and forgotten: how RBI's warnings were ignored: central bank had cautioned aboutbanking frauds many times over the last two years" – Even as the CBI and the ED stepped up theirinvestigation, conducting searches across Nirav Modi's premises, and the CVC swung into action, it is nowevident that several warnings issued by the RBI about the possibility of such banking frauds were ignored bybank managements. A report. – (Mint Feb 20, 2018 p 1)

"Govt banks need urgent reforms: Deep crisis plagues public sector banks, which need to overhaulsystem of monitoring and control" – A deep crisis plagues the Indian banking system, especially governmentowned banks. The fact that nobody noticed a fraud of such scale at PNB is testimony to this. Blamingmalfeasance by a handful of employees and other conspiracy theories will not take us very far in understandingthe roots of the problem. Here are some statistics which can help us make sense of growing frauds inbanking sector. A report. – (HT Feb 22, 2018 p 7)

"How banking frauds can be nipped in the bud" – Banks need to focus more on frauds in order to maximizethe chances of detecting them at an early stage. An article. – (Mint Feb 22, 2018 p 14)

"RBI data show 'loan fraud' extends far beyond PNB: State-run banks reported 8,670 fraud casesover the last 5 fiscal years" – Investors may have been shocked when one of India's biggest banksdisclosed a $1.77 billion fraud by billionaire jeweller Nirav Modi, but the central bank has recorded data thatshows the problem runs far deeper and wider. Reserve Bank of India (RBI) data, which a Reuters reporterobtained through a right-to-information request, shows state-run banks have reported 8,670 'loan fraud' casestotalling 612.6 billion rupees ($9.58 billion) over the last five financial years up to March 31, 2017. A report.– (HBL Feb 17, 2018 p 6)

"RBI sets up panel to curb bank fraud: Says it had warned banks thrice on possible misuse of SWIFT"– The Reserve Bank of India (RBI) set up an expert committee under the chairmanship of Y H Malegam,former director at the central bank, to look into the divergence in asset classification - as interpreted by theRBI and reported by banks in their quarterly results - and ways to minimise frauds occurring in banks. Thepanel will explore 'factors leading to an increasing incidence of fraud in banks and the measures (including ITinterventions) needed to curb and prevent it; and the role and effectiveness of various types of audits conductedin banks in mitigating the incidence of such divergence and frauds,' the RBI said in a statement on its website.A report. – (BS Feb 21, 2018 p 1)

"SBI reported over 2,400 fraud cases in last 3 fiscals" – In the backdrop of an alleged fraud worthRs.11,400 cr at Punjab National Bank, data from the Finance Ministry reveal that the country's largest publiclender State Bank of India witnessed 2,466 crauds in the last three financial years. A report.– (IE Feb 21, 2018 p 13)

Chakravarty, Manas – "Frauds are a growth industry in Indian banking" – An article.– (Mint Feb 21, 2018 p 4)

Rao, K Srinivasa – "Lessons from the PNB fraud" – Keeping workspace safe is collective duty. Unlessemployees assume the role of conscious keepers, it will not be possible to thwart such fraudulent attempts infuture. An article. – (FE Feb 21, 2018 p 9)

Subramanian, Krishnamurthy – "How to tackle bank fraud: PNB scam should pave the way to reformingthe audit profession in India" – The scale of fraud at PNB makes us wonder about the quality of auditingin India. Under the concurrent audit system, each bank branch must be audited by not one but two teams ofauditors. An article. – (TI Feb 19, 2018 p 12)

– 10 –

BANK LENDING"Non-food bank credit hits near-3-year high of 11.9%: Outstanding loans from banks to industry and

individuals stood at Rs.82.11 lakh cr as on Feb 2" – Growth in non-food credit in the fortnight toFebruary 2, 2018, rose to a near-three-year high of 11.89% year-on-year (y-o-y). The outstanding loans frombanks to industry and individuals stood at Rs.82.11 lakh crore as on February 2, data from the Reserve Bankof India (RBI) showed. A report. – (FE Feb 16, 2018 p 10)

BANKING REGULATOR - RBIChakrabarti, Saubhik – "Be a little more scary, RBI" – The PNB fraud again shows the banking regulator's

need to instil more fear. An article. – (ET Feb 20, 2018 p 14)

Sen, Joydeep – "The problem with Reserve Bank's dual role" – An article. – (Mint Feb 19, 2018 p 12)

– NOSTRO ACCOUNTS

"After a $2m SWIFT hiccup, RBI wants focus on nostro accounts: Catching Them Fast to tracedisparities quickly, lenders asked to reconcile transactions real time in nostro accounts" – Thecentral bank has asked lenders to step up the monitoring of debits from their nostro accounts after a cyberattackled to $2 million being siphoned off from the accounts of City Union Bank last week. A nostro account refersto a foreign-currency account that a lender holds in another bank overseas. A report.– (ET Feb 21, 2018 p 17)

– NPA RESOLUTION

Mukherjee, Deep Narayan – "Boosting investor confidence in banking" – Regulatory clarity and reducinginformation asymmetry are key to addressing NPA divergence. An article. – (BS Feb 16, 2018 p 8)

-REGULATION / SUPERVISION

Shah, Ajay – "First, build a capable RBI: we should block the nominal growth of banking until we getto a minimum level of capabilities at the regulator" – A certain minimal state capacity in bank regulationand supervision is required, and we are repeatedly discovering this is absent. An article.– (BS Feb 19, 2018 p 9)

BANKRUPTCY

– INDIVIDUALS / PROPRIETORSHIP FIRMS

"Bankruptcy provisions for individuals may be delayed" – Bankruptcy provisions for individuals andproprietorship firms, among others, under the Insolvency and Bankruptcy Code (IBC), are unlikely to be putinto effect anytime soon due to a heavy workload on debt recovery tribunals (DRTs). Also, the notification ofthe rules on cross-border insolvency could be delayed further in the absence of e-courts. The governmentplanned to notify the bankruptcy provisions last year itself. A report. – (BS Feb 20, 2018 pp 1, 4)

BANKS BOARD BUREAU"Banks Board Bureau may be wound up: Govt unlikely to seek successor to Vinod Rai whose term

ends in March" – Close on the heels of the Nirav Modi fraud case that has shaken public trust in state-owned banks, the Banks Board Bureau (BBB), set up by the government as a makeover platform for thesebanks, will effectively close down in March. A report. – (BS Feb 20, 2018 pp 1, 4)

– 11 –

BLOCKCHAIN TECHNOLOGY

– FRAUD PREVENTION

"Blockchain tech could help prevent frauds like at PNB: Given the distributed ledger technologypotential to improve monitoring, SBI has adopted it in its reconciliation systems, payment gateways"– The adoption of blockchain by India's banks could help avert frauds such as the one at Punjab NationalBank as the disaggregated and transparent nature of the technology, which updates information across allusers simultaneously, would have ensured that various officials would have instantly been alerted to thecreation of the letters of undertaking (LoUs), according to bankers and blockchain specialists. A report.– (H Feb 22, 2018 p 13)

DIAMOND TRADE FINANCINGKulkarni, Vivek and Manjunatha, M S R – "Diamond biz lacks glitter for bank lending" – 'Trust' alone

can't be the basis for large exposures. Banks should have access to the funding trail all along, and should bewell secured - both by hard collaterals and personal guarantees. An article. – (FE Feb 21, 2018 p 8)

DIGITAL CURRENCIESDesai, Meghnad – "Cryptocurrencies: the new frontier" – While cryoptocurrencies are distrusted by

many monetary authorities, they herald technological benefits - which need to be exploited. An article.– (FE Feb 19, 2018 p 6)

DIGITAL PAYMENTS"Regulating digital payments" – WhatsApp's payment feature raises concerns over transparency and fair

play in what isstill a nascent space. An editorial. – (HBL Feb 21, 2018 p 8)

Singh, Shelley – "Disruptor, disrupted" – Bitter irony has caught up with domestic digipayments cos asglobal debuts attracts all the glamour, and the users. An article. – (ET Feb 20, 2018 p 16)

Singh, Shelley – "It's a Mahabharat for digital dominance" – Just when it seemed like digital paymentswere slowing down, Google and Facebook have reversed the tide with Tez and WhatsApp payments. Anarticle. – (ET Feb 20, 2018 p 16)

– UNIFIED PAYMENTS INTERFACE

"Paytm versus WhatsApp: NPCI says interoperability must to roll out UPI app" – The National PaymentsCorporation of India (NPCI) will allow the full-scale public launch of any Unified Payments Interface (UPI)-enabled app only if the app fulfils the principles of interoperability. A report. – (Mint Feb 17, 2018 p 21)

– WhatsApp PAYMENTS

"WhatsApp competing with Paytm good for UPI : Little evidence WhatsApp has less authentication,while it has less features than Paytm, surely this will change" – An editorial. – (FE Feb 19, 2018 p 6)

Bhakta, Pratik – "WhatsApp's second coming" – The WhatsApp moment of Indian banking has finallyarrived with the largest messaging app in the country introducing its payments feature. But it has been a trialby fire for the Facebook-owned company. An article. – (ET Feb 16, 2018 p 14)

DISRUPTIONSinha, Janmejaya – "Banks 'better start swimming... for times they are a changin'" – Industries like

banking, where there is no physical fulfilment at the end of a transaction, are set for a disruption even morefundamental than those industries where there is a need for a culminating physical delivery. Five forces aredriving the disruption. Changing regulations, changing technologies, changing and growing per capita income,changing consumer behaviour and the changing global environment. An article. – (ET Feb 17, 2018 p 5)

– 12 –

EXECUTIVE APPOINTMENTS

– CANARA BANK / VIJAYA BANK

"Govt appoints 2 new EDs in Canara Bank, Vijaya Bank" – Murali Ramaswami and Debashish Mukherjeewere appointed executive directors of Vijaya Bank and Canara Bank. – (FE Feb 20, 2018 p 10)

– RESERVE BANK OF INDIA

"No RBI DG for 7 months for supervision of banks" – For close to seven months, the RBI does not havea full-time deputy governor (DG) handling the supervision of banks, both state-run and private, with thegovernment failing to find a replacement for S S Mundra who retired in July. A report.– (TI Feb 20, 2018 p 15)

FOREIGN BANKS

– HSBC

Arnold, Martin – "Leaving the scandals behind" – For the past five years, HSBC has been in crisis mode,held back by huge fines and hasty acquisitions. As Stuart Gulliver prepares to stand down as chief executive,the bank believes it is now able to grow again. An article. – (FT Feb 19, 2018 p 7)

FOREIGN BANKS - GOLDMAN SACHS

– COMPUTER TECHNOLOGIES

Levine, Matt – "When banks compete with tech firms" – Instead of developing new financial technologies,Goldman is developing new computer technologies for its financial clients. An article.– (FE Feb 17, 2018 p 8)

GOVERNANCE"RBI failed to police, but govt equally responsible" – As long as government is the owner, as in the

corporate sector, it is responsible for what happens in banks. An editorial. – (FE Feb 21, 2018 p 8)

INSOLVENCY PROCEEDINGS"NCLT ruling: Insolvency OK even if plea for winding up is pending in HC" – Insolvency proceedings

can be started against a company even if the winding up petition against it is pending in a high court, accordingto the principal bench of the National Company Law Tribunal. A report. – (FE Feb 17, 2018 p 6)

INSOLVENCY PROFESSIONALSMani, Veena – "Regulating Insolvency Professionals : A double-edged sword" – After closely monitoring

the functioning of Insolvency Professionals over the last one year, the IBBI has started streamlining theirfunctioning. An article. – (BS Feb 19, 2018 p 10)

INSOLVENCY RESOLUTIONSriram, R – "Can govt make banks' turnaround a winning formula in 2019?" – Quick resolution of

cases, the exit of dodgy promoters, possible writebacks from banks may give the Modi government anopportunity to talk about its success in dealing with the banking crisis. An article. – (ET Feb 20, 2018 p 4)

INSURANCE COVERKedia, Sanjay – "How banks must use insurance to cover risks" – The banking sector is not buying

insurance covers for the risks it needs to transfer; it is buying insurance for the risks it doesn't need to. TheIndian banking sector has been attracting lot of public attention of late. Be it the recent fraud reported at amajor public sector bank, NPA resolution, the need for recapitalisation and the impact on fiscal deficit or

– 13 –

rising cyber-crime. But before we look into various risk issues, let me make a provocative statement on thestate of the Indian banking industry and the use of insurance as an effective risk transfer solution: Thebanking sector in India is largely not buying insurance covers for the risks which it needs to transfer; rather,it is buying insurance for the risks it doesn't need to transfer. An article. – (BS Feb 21, 2018 p 10)

MONETARY POLICY"5 of 6 MPC members voted for status quo on repo rate" – Minutes of monetary policy panel meeting flag

inflationary impact of increase in MSP and fiscal slippages. A report, – (HBL Feb 22, 2018 p 6)

NPA RESOLUTION"Pushing on the loan resolution pedal" – The revised framework for the resolution of stressed assets will

redefine the way banks function in India. An article. – (Mint Feb 19, 2018 p 14)

"RBI's NPA bitter pill comes with some side effects: Bankers call for a coordinated approach to dealwith the stressed loans issue" – The RBI's revised framework for stressed loans may prove to bedisastrous and seems ill timed for an economy that is just recovering from twin policy blows of demonetisationand GST implementation. Though there are long-term benefits of administering such a bitter pill, the short-term risks are significant, say bankers. Critics in the banking industry point out that the new framework isvery stringent on NPA recognition and is being introduced at a time when other pieces in the ecosystem arefound wanting. A report. – (HBL Feb 19, 2018 p 13)

"Tackling NPAs: RBI's revised framework" – The RBI has done away with nearly half a dozen loanrestructuring schemes and replaced them with a strict 180-day timeline by when banks need to finalise aresolution plan in case of default, failing which the account will be referred for bankruptcy. A report.– (HBL Feb 19, 2018 p 13)

"Ultimate idea is insolvency resolution, not liquidation" – Edited excerpts from panel discussion withFormer RBI deputy governor S S Mundra; Federal Bank, MD & CEO Shyam Srinivasan; Macquarie CapitalSecurities banking analyst Suresh Ganapathy; and Sandeep Parekh, founder of Finsec Law Advisors debatevarious aspects of the new regime. With the new resolution regime under the Insolvency and Banking Code(IBC) settling in, the Reserve Bank of India (RBI) has ended all loan forbearance schemes, and forcedlenders to recognize and resolve bad assets early through IBC. – (Mint Feb 19, 2018 p 16)

Krishnan, Ravi – "RBI's new NPA rules may hurt but wil drain the swamp" – An article.– (Mint Feb 16, 2018 p 7)

Mohan, T T Ram – "Resolution framework will crimp growth" – An article. – (BS Feb 20, 2018 p 11)

Nageswaran, V Anantha – "The RBI got this one right" – The RBI issued a new circular cancelling all theprevious circulars issued in respect of the classification and restructuring of stressed assets. An article.– (Mint Feb 20, 2018 p 16)

Sabnavis, Madan – "Banking on RBI's new framework" – The idea to do away with CDR, SDR, S4A, etc,is commendable, as these provisions had become routes used for camouflaging the tainted part of the loans.An article. – (FE Feb 20, 2018 p 8)

– BOND MARKETS

Manuj, Hemant – "Bond markets and NPA resolution" – The recent spike in bond market yields hasbecome a matter of concern for institutional bond investors. Banks, being the largest holders of bonds, aremost affected. The direct impact on the marked-to-market prices of bank portfolios is obvious. Since theinformation on rising bond yields has been widely reported and analysed in public domain, it may be safe tobelieve that bank stock prices are already reflecting the same. There may be a further small reaction, oncebanks report their current results, for psychological reasons. There is, however, an elephant in the room, i.e.an adverse impact on resolution of NPAs, which does not seem to have been adequately discounted. Theimpact of rising bond yields on the parameters of the insolvency resolution process (IRP) is likely to besignificant. An article. – (FE Feb 16, 2018 p 9)

– 14 –

OPERATIONAL RISKChakravarty, Manas – "What RBI's Systemic Risk Survey says about operational risks" – The poor

management of operational risk is at the heart of the Punjab National Bank (PNB) scam, while high creditrisks have led to the proliferation of bad debts in the banking system. Financial market participants have beenunderestimating the risk in the system. An article. – (Mint Feb 22, 2018 p 4)

PAYMENTS BANKS"Payments banks: RBI issues new verification rules" – RBI wants banks to get clients' details verified by

third parties, says reliance on KYC by telcos not permissible. A report. – (Mint Feb 21, 2018 p 7)

PROSECUTION"Bank fraud fallout: Banks sit over CVC's request to prosecute corrupt officers" – The Punjab National

Bank and two other banks are sitting over the CVC's multiple requests seeking sanction to prosecute nine oftheir senior officers allegedly involved in corruption, reveals data from the anti-corruption watchdog. A report.– (FE Feb 21, 2018 p 2)

PUBLIC SECTOR BANKS"PSBs call it quits for now on QIPs: new NPA norms and the PNB scam pour cold water on fund-

raising plans amid hammered shares" – Banks looking to raise funds from the equity market to shore uptheir capital bases are suddenly facing the prospect of a delay in their fundraising plans. Three banks -Andhra Bank, IndianBank, Canara Bank - that were planning to float their qualified institutional placementissues in the near future are likely to be the most affected by the imposition of new provisioning norms forNPA by the RBI, and the outbreak of the PNB bank guarantee scam of over Rs 11,300 crore. A report.– (FE Feb 20, 2018 p 1)

Basu, Debashis – "Public sector banks: the one thing" – PSBs are in a perpetual mess because of the waythey are owned and controlled. An article. – (BS Feb 19, 2018 p 9)

– AUDIT

"PNB effect: now, public sector banks seek top auditors' help: Four leading auditing firms say bankswant their systems reassessed for risks" – Public sector banks are reaching out to the top four audit andaccounting firms, known as the Big Four, to get their systems assessed for risks. While the tendency ofnationalised banks has been to stay away from broadening forensic data analysis capabilities beyond traditionalanti-fraud and compliance, they are now going in for a scale-up of risk management capabilities. A report.– (H Feb 18, 2018 p 2)

– GOVERNANCE

"Money for free" – Public sector banks are in governance collapse, government needs to step aside. Aneditorial. An editorial. – (TI Feb 16, 2018 p 12)

Ninan, T N – "No systemic accountability" – An editorial. – (BS Feb 17, 2018 p 9)

– PRIVATISATION

"Don't waste PNB crisis, use it to push privatisation" – Govt needs to convince opposition another bailoutof lakhs of crores of rupees will be needed again if banks are not sold off. An editorial.– (FE Feb 20, 2018 p 8)

"Govt must privatise PSU banks, says Godrej" – Godrej group chairman Adi Godrej said the governmentshould privatise public sector banks to ensure better management in the wake of PNB fraud case. A report.– (TI Feb 22, 2018 p 18)

– 15 –

"Privatizing state-run banks: It's not too late even now" – As the fraud at the Punjab National Bank(PNB) dominates headlines, more and more experts are arguing that keeping so many banks in the publicsector is actually a disservice to the national good. Shekhar Gupta in his column strongly advised the PM to'shut it, sell it and forget it'. A more erudite view came from Prof. Raghu Sundaram, the dean of NYU SternBusiness School, who said that it was time the discipline of the market was imposed on PSU banks. A report.– (Mint Feb 22, 2018 p 10)

"Unions against calls for privatising PSBs" – Bank unions have gone on the offensive against the risingchorus for privatisation of public sector lenders in the wake of the PNB scam. Stating that it is the equivalentof the devil quoting scriptures, unions have accused the industry of being responsible for bad loans and forbribing bank officials. A report. – (TI Feb 20, 2018 p 16)

Rajagopalan, Shruti – "Privatize PSBs to prevent future Nirav Modis" – This is a good time for thegovernment to blame Gandhi's excesses for the mess, and reverse the bank nationalisation policy by sellingthe government stake in PSBs and exiting the banking business. An article. – (Mint Feb 20, 2018 p 17)

Vageesh, N S – "Privatising PSBs will not solve the problem" – The issue is not one of ownership but ofa failure of internal controls and supervision in public sector banks. An article. – (HBL Feb 22, 2018 p 8)

– REFORMS

Patnaik, Ila – "Lessons from a fraud" – PNB scandal points to unreformed financial sector, failure of riskmanagement and auditing systems. An article. – (IE Feb 17, 2018 p 10)

– REGULATION / PRIVATISATION

"CEA for more regulation in banking, privatising PSBs" – Chief economic adviser Arvind Subramaniansaid the country has failed to recognise the importance of regulation in the banking industry. Though thebanking industry has started to recognise the stressed assets, with a resolution process through NCLT, aptlybacked by recapitalisation, the country has failed to recognise the aspect of regulation and the role of aregulator. Four Rs - Recognition, Resolution, Recapitalisation and Reforms - have been executed, but thereis failure to recognise fifth R, regulation of the banking system. A report. – (FE Feb 18, 2018 pp 1, 16)

"PNB fraud underlines need for more privatisation" – After state-owned Punjab National Bank was joltedby a Rs 114 billion fraud, the government's Chief Economic Advisor, Arvind Subramanian had raised severalquestions on the external controls used by the RBI. Internal controls are weak in public sector banks and thiscalls for the privatisation. Edited excerpts from an interview with CEA, Arvind Subramanian.– (BS Feb 19, 2018 p 6)

– SECURITY MEASURES

"Finance ministry tells public sector banks to tighten scrutiny, plug loopholes" – Stung by the Rs.11,400-crore fraud at Punjab National Bank (PNB), the finance ministry has directed all public-sector banks (PSBs)to tie up loose ends in their systems, tighten scrutiny of all sorts of transactions, especially the overseas onesthrough the SWIFT mechanism that was abused by some PNB officials leading to the scandal, and takeprecautionary measures to ensure such scams don't recur in future, according to a senior official. A report.– (FE Feb 17, 2018 pp 1, 2)

– STATUTORY AUDITOR

"Govt may tighten norms for statutory auditor appointment in PSBs" – Triggered by the PNB scam, themove will help detect irregularities early and take corrective action, says official. A report.– (HBL Feb 20, 2018 p 10)

– 16 –

REGULATION/SUPERVISION

– INSPECTION

"Govt seeks RBI views on supervisory lapses" – The Union government has shot off a letter to theReserve Bank of India (RBI) on the alleged Rs.11,400-crore Punjab National Bank (PNB) scam, askingwhether at any stage the banking regulator had detected the fraud, involving letters of undertaking (LoUs)issued to foreign branches of Indian banks on behalf of companies promoted by Nirav Modi and MehulChoksi. A report. – (BS Feb 20, 2018 pp 1, 4)

"Regulatory lessons" – India should reduce dependence on the banking system. An editorial.– (BS Feb 20, 2018 p 11)

"Up the game on bank scam spotting: Needed, reform of SWIFT, internal controls" – An editorial.– (ET Feb 20, 2018 p 14)

Arun, T K – "Banking's political economy: Flaws of the polity redound on banking, and these must befixed to get banking right" – It is the quality of regulation and the incentives that mould the behavior ofbankers that determine the quality of banking, not the nature of their ownership. An article.– (ET Feb 21, 2018 p 14)

SMALL FINANCE BANKS

– CAPITAL SMALL FINANCE BANK

"Capital Small Finance Bank: Unaudited financial results for the period ended December 31, 2017"– An advertisement feature. – (ET Feb 22, 2018 p 13)

– CRM

Arora, Hitesh – "Empower your workforce with next-gen CRM" – CRM solutions can help small financebanks enter new markets devoid of costly software and upscale investments in HR and technology. Anarticle. – (FE Feb 19, 2018 p 8)

– FINCARE SMALL FINANCE BANK

"Fincare SFB targets to open 500 banking outlets by July: Bets on digitalisation, doorstep delivery,higher deposit rate" – Fincare Small Finance Bank (Fincare SFB) has drawn up aggressive plans toincrease its business by opening 210 banking outlets before July 2018, according to a top official. In the nextthree years, our vision is to serve four million customers from the existing one million, raise our asset basefrom Rs 2,500 crore to Rs 10,000 crore and deposit base from Rs 600 crore to Rs 8,600 crore, said RajeevYadav, CEO, Fincare SFB. A report. – (H Feb 16, 2018 p 14)

– UJJIVAN SMALL FINANCE BANK

"Ujjivan to expand retail business next year: Lender looks to cash in on growing income of themiddle class who are seeking loans to buy products" – Ujjivan Small Finance Bank plans to expand itsretail business next year after all its current outlets are converted to bank branches and will apply for auniversal bank licence in five years, according to Samit Ghosh, managing director and chief executive ofUjjivan Small Finance Bank. A report. – (H Feb 18, 2018 p 13)

SWIFT - BANK MESSAGING SYSTEM"Banks vulnerable to hackers without online interface between CBS and SWIFT" – Banks have spent

thousands of crores of rupees over the last decade to purchase and strengthen their core banking solution(CBS), but a failure to create an online interface between CBS and the SWIFT, a worldwide inter-bankcommunication system, renders them vulnerable to hackers and individuals who can bypass the system withmanual entries. A report. – (Mint Feb 21, 2018 p 8)

– 17 –

AGRICULTURE & RURAL DEVELOPMENT

NABARD"NABARD goes Solar - signs pact to Solarize its premises" – In a move to soleminize its commitment

towards having a green future, NABARD entered into a memorandum with Solar Energy Corporation ofIndia to install rooftop solar systems on its premises across the country. – (HBL Feb 16, 2018 p 2)

REGIONAL RURAL BANK

– KARNATAKA VIKAS GRAMEENA BANK

"KVGB tops BCSBI rating" – The Dharwad headquartered regional rural bank - Karnataka Vikas GrameenaBank has been awarded an overall rating of 'above average' on code compliance by the Banking Codes andStandards Board of India. – (HBL Feb 16, 2018 p 10)

SMALL SCALE INDUSTRY

ENTREPRENEURSHIP"Sanjiv Bajaj is 2017's EY Entrepreneur of the Year" – Sanjiv Bajaj, MD, Bajaj Finserv, won the EY

Entrepreneur of the Year 2017 award for solutions in lending, life and general insurance and wealth advisory,EY said in a press release. A report. – (HBL Feb 16, 2018 p 5)

INTERNATIONAL ECONOMICS

CHINAKanungo, Anil K – "Challenges for Chinese economy" – Some believe China is sitting on a debt bomb, but

its debt market has calmed. In the longer run, China can benefit from government-promoted innovation aswell as recent structural reforms. An article. – (FE Feb 19, 2018 p 7)

FINANCIAL CRISISBhatia, Sanjiv – "Are we ready for the next crisis?" – India's high NPAs, China's corporate debt could

trigger the next global financial crisis. The Minsky moment may have already started in India, and China, withits massive corporate debt approaching 200% of its GDP, may not be far behind. An article.– (FE Feb 22, 2018 p 9)

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Feb 19, 2018 Supl. pp 1-16)

LABOUR & PERSONNEL MANAGEMENT

PROVIDENT FUND"EPF interest rate reduced to 8.55%, a five-year low" – The Employees' Provident Fund Organisation

(EPFO), India's retirement fund manager, has cut the interest rate it pays to more than 50 million subscribersto 8.55% for the year to 31 March, the lowest in five years. The labour ministry-controlled retirement fundmanager had paid 8.65% the previous year. A report. – (Mint Feb 22, 2018 p 1)

MISCELLANEOUS"Benefits of AI on employment outweigh concerns" – The impact of artificial intelligence (AI) on employment

is expected to be severe, but the benefits outweigh its concerns as it would lead to improved efficiency andcost saving, according to a PwC India report. A report. – (IE Feb 16, 2018 p 9)

BANKERS' BRIEFAn Online Weekly News and Views Digest

Subscription / Renewal Form

Annual Subscription Rates

Individual : Rs. 375.00 Institutional Rs : 500.00

I wish to subscribe/renew for Bankers' Brief (An Online Service) as per your terms andconditions for the following period: to

My Mailing Address:

Name :

Address :

City : State : Pin:

Mobile : Email :

Kindly remit/send subscription amount by ECS/Demand Draft/at par cheque. Pleasefind enclosed/remitted DD/at par Cheque/UTR No.dated drawn onin favour of "National Institute of Bank Management", and payable at Pune.

Mode of Subscribing/Renewing

The subscription amount may preferably be transferred by RTGS/NEFT/ECS to ourCurrent A/c No.20002400021 with Bank of Maharashtra, NIBM Branch, Pune(IFSC Code MAHB0001124)

For all electronic remittances, kindly send a confirmatory e-mail at: naaz@nibmindia.org giving transaction UTR No. and other details of the payments.

In case the amount is remitted by Demand Draft or at par cheque, it should be drawnin favour of "National Institute of Bank Management", and payable at Pune.

Please remember to mention your old subscription number for renewal.

Address all your Subscription related communication to:

Incharge Publications National Institute of Bank Management

NIBM PO, Kondhwe Khurd, Pune 411 048 (India)Telephone: 0091-20-26716000 (EPABX) Direct: 26716410

Fax: 0091-20-26834478 Website: www.nibmindia.org

NIBM Journals and Publications

PrajnanJournal of Social and Management Sciences

Annual Subscription Rate : One year Rs.300.00 Two years Rs. 550.00 Three years Rs. 825.00

VinimayaPresents Conceptual and Practical Viewpoints of both

Bankers and Management Educationist

Annual Subscription Rate : One year Rs.225.00 Two years Rs.375.00 Three years Rs. 550.00

Areas of Publications Agricultural & Rural Development International Finance

Banking Management, Planning and Control

Computer & Systems Monetary Economics

Foreign Trade Operational Banking

Human Resource Management/HRD

(For details visit NIBM Website : http://www.nibmindia.org)

Enquiries may be mailed to :Incharge Publications

National Institute of Bank ManagementNIBM Post Office, Kondhwe Khurd, Pune 411 048

Telephone : 0091-20-26716000 (EPABX) Direct: 26716410 Fax : 0091-20-26834478Website : http://www.nibmindia.org

Edited by Library Team and Published Online by National Institute of Bank Management, NIBM Post Office, Kondhwe Khurd, Pune 411 048 INDIA

(Registered with the Registrar of Newspaper for India under Registration No. G 165.238/1984 of 20-6-84)