Volume XXXI Number 28 April 11, 2016

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 & RURAL DEVELOPMENT 17

D. INDUSTRY 17

E. SMALL SCALE INDUSTRY 18

F. INTERNATIONAL ECONOMICS 18

G. MANAGEMENT 19

– 1 –

BANKERS' BRIEF Vol. XXXI No. 28April 11, 2016

ECONOMY"Fiscal deficit at 107% of FY16 target in Apr-Feb" – With the Centre keeping the spending momentum at

an even pace, its fiscal deficit rose to Rs.5.73 lakh crore or 107.1% of the FY16 revised estimate in first 11months of the year, but officials expressed confidence that the full-year deficit estimate of 3.9% of the GDPwould be met. A report. – (FE Apr 1, 2016 p 2)

"Growth rates in FY05-FY11 will be lower under the new GDP series" – Edited excerpts from aninterview with T C A Anant, Secretary, Ministry of statistics and programme implementation. He says GDPgrowth in 2004-05 to 2010-11 will be lower under the new GDP series once the Central Statistics Organisation(CSO) comes out with a back-series. – (BS Apr 4, 2016 p 18)

"Rate cut alone cannot trigger growth, says TMB chief" – Rate cut is not a panacea for growth. Thereare a lot of other things that the Centre will have to do to trigger growth. These include, policy enablement,and giving clearances on time, among others, according to Upendra Kamath, Chief Executive, TamilnadMercantile Bank. A report. – (HBL Apr 7, 2016 p 10)

Bhandari, Laveesh – "Model economist: Kaushik Basu's account of his stint as chief economic advisorprovides great insights into how economic models correlate with real-world policymaking, but areader will miss the insider's view of the politics that influenced policy" – An economist in the realworld: The art of policymaking In India by Kaushik Basu. A book review. The book falls short of sharing the'joys and frustrations' Basu says he wanted to do. We expect much more from those who are better endowed,knowledgeable and have no reason to conceal. – (BS Apr 2, 2016 Pt. II p 3)

KARNATAKA"Driven by IT, Karnataka is country's top job creator" – Karnataka has been ranked as the country's top

job creating state with over 24 per cent share during the fourth quarter of the last fiscal, according to a study.It is followed by Maharashtra (23 per cent) and Tamil Nadu (10.5 per cent), said the study by Assocham.– (BS Apr 5, 2016 p 4)

EXPORTS"Exports: Down but not out" – India's merchandise exports have been heading South tracking global trends.

But a rebound in oil could turn out to be good for exports. A graphical report. – (HBL Apr 1, 2016 p 9)

Mehta, Pradeep S – "Don't blame global crisis for exports slide" – India's distorted factor markets, poorinfrastructure and an overvalued currency have played a major role in this decline. An article. – (HBL Apr 1,2016 p 9)

EXTERNAL DEBT"India's external debt stood at $480 bn at Dec-end: Finmin" – India's external debt stock rose 4.7%

year-on-year to $480.2 billion in April-December 2015, largely driven by private commercial borrowings andnon-resident Indian (NRI) deposits, data released by the finance ministry showed. A report. – (FE Apr 1,2016 p 2)

FINANCE COMMISSION 14TH"Fiscal rules relaxed for some states" – Cabinet allows some states to relax existing cap on fiscal deficit of

3% of GSDP by half a percentage point. A report. – (Mint Apr 7, 2016 pp 1, 2)

– 2 –

FOREIGN EXCHANGE RESERVES"Forex reserves fall by $387.50 million" – Foreign exchange reserves as on March 25 fell by $387.50

million from a week ago to $355.559 billion, according to data from the Reserve Bank of India. Foreigncurrency assets (FCA), which forms a key component of the reserves, fell by $358.10 million from theprevious week to $332.146 billion. Gold reserves remained unchanged at $19.325 billion. Special drawingrights (SDR) from the International Monetary Fund fell by $10.7 million from the previous week to $1.488billion. The country's reserve position in the IMF stood at $2.599 billion as on March 18, down $18.7 millionfrom the previous week. – (FE Apr 2, 2016 p 10)

SERVICES SECTOR"Services growth pushes private sector output to three-year high: However, employment growth

remains sluggish in March" – In a significant uptrend, private sector manufacturing and services activitiessurged to 37-month high in March on new business orders although job growth remained sluggish, accordingto a monthly survey. The Nikkei India Composite PMI Output Index, which maps both manufacturing andservices sectors, climbed from 51.2 in February to 37-month high of 54.3 last month. A report. – (FE Apr 7,2016 p 2)

SMALL SAVINGS SCHEMES– INTEREST RATES

Rao, Rajkamal – "Let's not play the interest rate game" – Low rates have fuelled debt and speculationworldwide. Why compromise our savings by doing the same? An article. – (HBL Apr 4, 2016 p 16)

BANKING

GENERALMohan, T T Ram – "The changing face of Indian banking" – Indian banking is passing through its most

severe period of stress in over a decade. It is important, however, not to draw conclusions for banking policyfrom a snapshot of the most recent period - the totality of the post-reform experience must be taken intoaccount. That larger experience shows that India's public sector-dominated banking system has served theeconomy well by improving its performance in respect of both efficiency and stability. Looking ahead, changesin governance and management are required, but it is possible to effect these within the framework of publicownership. An article. – (EPW 51(12) Mar 19, 2016 pp 57-67)

Prabhu, K N V – "Transformative to banks?" – An article. – (SE 54(22) Mar 15, 2016 pp 49-50)

ANDHRA BANK"Andhra Bank wins Technology Award" – Sri. A K Rath, Executive Director, Andhra Bank received the

runner up award for the Best Payment Initiatives at IBA Banking Technology Conference, EXPO andAwards 2016. – (HBL Apr 2, 2016 p 17)

AXIS BANK"Axis Bank takes over Jaypee Group's HQ" – Axis Bank Ltd, a lender to Jaypee Infratech Ltd, has taken

possession of the debt-laden company headquarters in Noida, said three people familiar with the development.The bank has decided to take ownership of the asset in lieu of Rs.700 crore owed by the company, said oneof the people cited above. A report. – (Mint Apr 7, 2016 p 9)

"Option of 100 currencies: Axis Bank offers online retail forex remittance" – Axis Bank has launchedan online retail forex service where it will allow any user to remit funds in over 100 currencies -the first suchoption extended by a bank. The facility is open even for non-customers of the bank. – (TI Apr 1, 2016 p 19)

Vishwanathan, Vinina – "Axis forex online" – An article. – (Mint Apr 4, 2016 p 15)

– 3 –

BANK OF BARODA"BoB to convert Andrew Yule debt to equity" – The Government today cleared conversion of Bank of

Baroda's Rs.29.91 crore loan to Andrew Yule & Co which is engaged in production of bulk tea, into equityshares, paving the way for disinvestment of the Kolkata-based public sector undertaking (PSU). The conversionof loan to equity would help bring down the cost of servicing of debt, resulting in improved profitability andliquidity of Andrew Yule in coming years, an official statement. A report. – (BS Apr 7, 2016 p 4)

BANK OF MAHARASHTRA"Bank of Maharashtra third among PSBs in rejecting RTI pleas" – The recently-published annual report

of the Central Information Commissioner (CIC) throws up interesting trends about the performance of publicsector banks (PSB)s when it comes to dealing with RTI applications. Of the 24 PSBs, 10 have reporteddecrease in the number of RTI applications received for the year 2014-15 with the Pune-headquarteredBank of Maharashtra leading the fray. Although the bank has seen a dip of 22 per cent in the number of RTIapplications it had received in 2014-15 in comparison to 2013-14, the bank seems to have increased itsrejection rate of RTI application. With 43.70 per cent of the RTI applications rejected, the bank has the thirdhighest rejection rate among the PSBs in the country. A report. – (IE Apr 5, 2016 Supl. p 1)

ICICI BANK"ICICI Bank puts on hold plans to sell home finance division" – ICICI Bank Ltd has put the plan to sell

its subsidiary ICICI Home Finance Co. Ltd on the backburner. A valuation mismatch between the bank andpotential private equity buyers prevented a deal from being struck, said two people familiar with the transaction.Bank's decision to sell the unit at Rs.2,400 cr valuation was not accepted by PE investors. A report. – (MintApr 1, 2016 p 6)

– INTEREST RATES

"ICICI Bank cuts bulk deposit rates by up to 0.55%" – ICICI Bank has cut interest rate on fixed depositrates by up to 0.55 per cent on bulk deposit rates of over Rs.1 crore. A report. – (FE Apr 1, 2016 p 10)

IDBI BANK"IDBI Bank sells 2% stake in NSE to LIC" – The stake sale is part of IDBI Bank's turnaround plan;

900,000 shares were sold at Rs.3,900 apiece for Rs.351 crore. A report. – (Mint Apr 1, 2016 p 9)

"Kejriwal opposes move to privatise IDBI Bank: Delhi CM to write to Modi seeking withdrawal ofthe proposal" – Opposing the Centre's move to privatise IDBI Bank, Delhi Chief Minister Arvind Kejriwalsaid he would write to Prime Minister Narendra Modi seeking withdrawal of the proposed move that will'adversely affect around 20,000 officers across the country.' A report. – (HBL Apr 2, 2016 p 10)

INDIAN BANK"Indian Bank raises Rs.500 crore" – Indian Bank has raised Rs.500 crore from Rural Electrification

Corporation Ltd under Basel-III compliant additional tier-I bonds with a coupon of 11.15 per cent per annum.– (FE Apr 1, 2016 p 10)

KARNATAKA BANK"Karnataka Bank targets Rs. 1 lakh cr biz this fiscal" – Karnataka Bank has set a business turnover target of

Rs.1 lakh crore, comprising deposits worth Rs.58,500 crore and advances of Rs.41,500 crore, for 2016-17.– (HBL Apr 2, 2016 p 10)

ORIENTAL BANK OF COMMERCE"OBC raises Rs.178 cr from LIC" – Oriental Bank of Commerce (OBC) said it has raised over Rs.178

crore by issuing more then 2.15 crore shares to LIC on preferential basis. – (FE Apr 1, 2016 p 10)

– 4 –

STATE BANK OF HYDERABAD"As State Bank of Hyderabad turns 75, business crosses Rs.2.5 lakh crore: Steady growth has helped

the bank reach this milestone, says MD" – As it enters the platinum jubilee year, State Bank of Hyderabad(SBH), the erstwhile central bank of the Hyderabad state, has crossed Rs.2.5 lakh crore-mark in totalbusiness. A report. – (HBL Apr 2, 2016 p 10)

"We are launching specific MSME schemes in line with government's mission: SBH" – An interviewwith Santanu Mukherjee, Managing Director, State Bank of Hyderabad. – (BS Apr 5, 2016 p 5)

STATE BANK OF INDIA"A CRR cut of 25 bps is practically priced in by the market: P K Gupta" – SBI's MD on how the bank

is gearing up for MCLR, and what the RBI may offer. If the liquidity position eases next month then we willsee if deposit rates can be revised, according to P K Gupta, Managing Director, SBI. An interview with P KGupta, Managing Director, SBI. – (HBL Apr 1, 2016 p 6)

"SBI to part redeem tier II bonds on lower yield" – State Bank of India is redeeming a part of the lowertier II bonds it had issued to investors in February 2011 before maturity. The state-run bank has exercised calloption on bonds it raised as part of the Rs.2,000 bond programme. – (ET Apr 2, 2016 p 6)

– RECRUITMENT

"SBI to hire 17,000 in clerical cadre" – Here is good news for job aspirants. State Bank of India will befilling up 17,070 vacancies in the clerical cadre. – (HBL Apr 7, 2016 p 10)

STATE BANK OF MYSORE"SBM registers hacking complaint with CID" – State Bank of Mysore authorities have lodged a complaint

with the State CID here following hacking of their banking system, which resulted in many customers losinglarge sums through multiple online transactions of Rs.49. The bank authorities have also initiated an internalprobe on the system breach. A report. – (H Apr 7, 2016 p 9)

"State Bank of Mysore customers lose lakhs after accounts hacked" – Several hundred State Bank ofMysore customers in Karnataka are believed to have lost lakhs of rupees after their accounts were hacked.The bank management remained in a huddle through the day. According to a senior official, while the 'matterhas been settled', it could have been due to a technical error. A report. – (HBL Apr 5, 2016 p 1)

STATE BANK OF TRAVANCORE"SBT raises Rs.515 cr via tier-II bonds" – State Bank of Travancore (SBT) said it has raised Rs.515 crore

by issuing Basel-III complaint tier-II bonds. Coupon rate on the bonds with a tenure of 10 years is fixed at8.45 per cent. – (FE Apr 1, 2016 p 10)

SYNDICATE BANK"Syndicate Bank issues Basel-III compliant bonds" – Syndicate Bank said it had issued bonds in the form

of unsecured, non-convertible (Basel-III compliant) perpetual debt instruments in the nature of debenturesfor inclusion in additional Tier-I capital. – (H Apr 3, 2016 p 16)

"Syndicate Bank raises Rs.870 cr" – Syndicate Bank said it has raised Rs.870 crore from Tier-I bonds tomeet Basel-III norms. – (HBL Apr 1, 2016 p 10)

UCO BANK– INTEREST RATES

"UCO Bank revises lending rates" – UCO Bank has revised lending rates based on marginal cost of fundswith effect from April 1. For one year loan, the interest rate will be 9.55 per cent while for two years it isgoing to be 9.65 per cent, UCO Bank said in a BSE filing. – (Mint Apr 4, 2016 p 8)

– 5 –

YES BANK"Yes Bank raises Rs.545 crore via Basel-III bonds" – Yes Bank said it has raised Rs.545 crore by issuing

Basel-III complaint tier-II bonds. The Bank has successfully raised Rs.545 crore from Basel III compliantTier II bonds on private placement basis. – (FE Apr 5, 2016 p 10)

CHINA"China's bad banks swell as defaults spread" – As China's economy slows and defaults rise, bad loan

managers are quietly buying toxic debt so it does not poison the broader financial system. Yet questionsremain about whether these bad banks are savvy investors in distressed assets or conduits for a backdoorbailout of state banks. A report. – (FT Apr 1, 2016 p 14)

ATMs"Soon, you won't be able to bank on ATMs late night" – Govt proposes that ATMs should not be replenished

with cash after 8 pm in cities. A report. – (ET Apr 2, 2016 p 11)

BANK AUDITNarayanaswamy, R – "The bank audit extravagance" – PSB audits have become an important source of

income for many auditors. But do the banks benefit from these audits? An article. – (HBL Apr 6, 2016 p 9)

BANK BOARD BUREAU"New Bank Board Bureau to be based in Mumbai: The BBB will decide on top appointments in

public sector banks" – The government has decided that the Bank Board Bureau (BBB), which willdecide on management and board-level appointments in public sector banks, will be based in Mumbai. Themove is significant because it shows the government's intention to distance itself from the appoint process, acrucial piece of reform in public sector banking. It is headed by former Comptroller and Auditor GeneralVinod Rai. The other members of the BBB are Rupa Kudwa, former chief of CRISIL, Anil Khandelwal,former CMD of Bank of Baroda, and H N Sinor, former chief executive of the Indian Banks' Association andthe Association of Mutual Funds in India. The Bureau will also be involved in making strategies for publicsector banks. A report. – (H Apr 7, 2016 p 6)

BANK LENDING"Micro, small and medium industries worst hit in credit slowdown" – The chart takes a longer-term

view of the growth in bank credit among the various sectors. Note that the slowdown in credit growth hasbeen most pronounced in 2015-16 in micro, small and medium scale industries. Growth in bank credit to largescale industry has been better than last year. The fastest growth has been in the growth of personal loans. Agraphical chart. – (Mint Apr 4, 2016 p 18)

"Outstanding bank credit to industries grew 5.4% in Feb" – Outstanding bank credit to industries grew5.4% year-on-year (y-o-y) to Rs.27.5 lakh crore in February, data from the Reserve Bank of India (RBI)showed. Loans to industry were driven mainly by disbursals to large corporates, which grew 7% y-o-y. Areport. – (FE Apr 1, 2016 p 10)

– DIAMOND IMPORTS

"RBI eases norms for diamond imports" – The Reserve Bank of India (RBI) allowed banks to approveclean credit facility given by a foreign supplier to Indian importers of rough, cut and polished diamonds, evenbeyond 180 days. To ease the operational difficulties faced by importers. – (H Apr 1, 2016 p 15)

– ICICI BANK - HDFC BANK

"ICICI, HDFC Bank Offer Loans to Patanjali: Baba Ramdev's Haridwar-based consumer goodsmaker firm looks to raise Rs.1,000 cr this fiscal" – ICICI Bank and HDFC Bank have offered toprovide loans to yoga guru Baba Ramdev's rapidly expanding Patanjali Ayurved, which is looking to raiseabout Rs.1,000 crore this fiscal, at a time when lenders are shying away from most corporate borrowers. Areport. – (ET Apr 4, 2016 p 9)

– 6 –

BANK LICENSING– NICHE BANKS

"RBI details plans on differentiated bank licences" – The Reserve Bank of India (RBI) may license moreniche banks and put new lending systems in place as it seeks to widen sources of funding in the economy.RBI will explore the possibilities of licensing custodian banks and banks concentrating on whole-sale andlong-term financing. A report. – (Mint Apr 6, 2016 pp 3, 4)

BANK LOAN FRAUDS"Court asks FinMin, RBI to look into Rs.800-cr loan: Order comes on a plea that the company's

director was convicted in a graft case" – The Finance Ministry and the Reserve Bank of India have beenasked by a Delhi court to look into a matter in which Rs.800 crore loan was allegedly granted without properverification to a company whose director was convicted in a corruption case. A report. – (HBL Apr 5, 2016p 10)

BANKING REFORMS– WILFUL DEFAULTERS - NPAs

Singh, Hardayal – "Lessons from the Vijay Mallya episode: It presents a good opportunity to carryout fundamental reforms in the banking industry" – The possibility of losses to the tune of lakhs ofcrores should make the government and indeed all of us think deeply of the nature of the problem. PSBs havehad to be repeatedly recapitalised with the help of taxes we all pay. An article. – (FE Apr 2, 2016 p 9)

BANKING REFORMS - INDRADHANUSH– PUBLIC SECTOR BANKS

"10 PSBs may miss out on Indradhanush's hues" – The government's well-intentioned plan to help publicsector banks (PSBs) make a fresh start could face roadblocks created by its own past rules. Replenishinglost capital is necessary, but it comes with several constraints, says a report by proxy advisory firm InstitutionalInvestor Advisory services (IiAS). A report. – (BS Apr 7, 2016 p 10)

BANKING REGULATOR"Aggression not on rate cuts, but on transmission: Raghuram Rajan RBI Governor plays down talk

of the central bank being conservative; policy not a Quantitative Easing" – An interview withRaghuram Rajan, Governor, RBI. – (HBL Apr 7, 2016 p 6)

"We want to see past cuts pass through before easing further: No point cutting policy rate by 50 bpswithout removing the overhang of poor transmission, says RBI governor" – Edited excerpts froman interview with Raghuram Rajan, Governor, Reserve Bank of India. – (Mint Apr 6, 2016 p 8)

– CENTRAL BANKING

Rangan, M C Govardhana – "The Skeptic: When Governor Rajan wore the teacher's hat"– An article. – (ET Apr 6, 2016 p 14)

BANKRUPTCY CODESharma, Anjali and Thomas, Susan – "How bankruptcy code will save lenders" – A key design focus in

the proposed code is speed of resolution. Delay is disincentivized at various stages. An article released by thefinance ministry showed. – (Mint Apr 1, 2016 p 23)

BRANCH BANKING"Reserve Bank to redefine branch banking and its outreach: To regulate peer-to-peer lending space"

– The Reserve Bank of India (RBI) has decided to redefine the concept of branch banking by enumeratingwhat constitutes a bank and how a lender can reach out to customers. A report. – (BS Apr 6, 2016 p 6)

– 7 –

CASH CREDIT– LIQUIDITY

"RBI studying impact of cash credit on liquidity, money markets: A sudden need from a borrowercould force a bank to borrow aggressively, leading to rate distortions, say sources" – The ReserveBank of India is internally studying the cash credits system and its impact on systemic liquidity and lendingpractices of banks, two senior banking industry sources told Cogencis. There is a small internal RBI group,with consultations from outside. They are working on it. ... They will come up with recommendations. Areport. – (HBL Apr 5, 2016 p 10)

CONCURRENT AUDITORS– BANK OF BARODA

"BoB's move to change concurrent auditors stirs hornet's nest: New terms favour multinationalfirms, alleges auditor, who has moved the Madras High Court" – Bank of Baroda has stirred up ahornet's nest with its decision to not renew the contracts of an existing panel of concurrent auditors andinstead issue a fresh tender with terms that practically disqualify all small- and medium-size Indian audit firmsfrom applying. The auditing profession in the country sees the terms as favouring the multinational audit firmssuch as KPMG, PriceWaterhouseCoopers, Deloitte and EY and as designed to keep out home-grown firms.The eligibility condition to have Rs.150 crore from audit services in the financial year 2014-15 would disqualifysmall and medium-sized Indian audit firms as their revenues would be just a fraction of this amount. A report.– (HBL Apr 5, 2016 p 1)

COOPERATIVE BANKING– RUPEE COOPERATIVE BANK

"RBI prod to Rupee Bank on withdrawal directive" – The Reserve Bank of India asked the cooperativedepartment to implement its February 18 directive on Rs.20,000 withdrawal for Rupee Co-operative Bankdepositors. A report. – (TI Apr 7, 2016 p 5)

CUSTOMER SATISFACTION"HSBC tops the list: Survey: Foreign banks fare better in customer satisfaction" – Foreign banks

HSBC, Standard Chartered and Citibank have outperformed their Indian public and private sector peers incustomer satisfaction, a study conducted by the Indian Customer Satisfaction Index (ICSI) has found. HSBCtops the list of 12 large Indian banks with a customer satisfaction score of 76, with Standard Chartered andCitibank close on its heels at 74 and 73 respectively. Kotak Mahindra (71), ranked fourth, leads Indian banks,followed by ICICI Bank (70), Bank of Baroda (68), Axis Bank (68) and HDFC Bank (68).Interestingly, thecountry's largest bank State Bank of India (SBI) brings up the rear with a score of 62. A report. – (ET Apr1, 2016 p 17)

Kulkarni, Preeti – "Indian banks low on customer satisfaction" – Foreign lenders have taken the top threeslots on the customer satisfaction rating chart. An article. – (ET Wealth Apr 4, 2016 p 29)

CYBER SECURITY– RESERVE BANK OF INDIA

"Reserve Bank to set up cyber security subsidiary" – The Reserve Bank of India will set up a subsidiaryfor cyber security to serve the needs of the banking system and the regulator itself, according to RBIGovernor Raghuram Rajan. A report. – (HBL Apr 6, 2016 p 11)

DEPOSITS"Dwindling deposits" – The fall in deposit growth to the lowest in half a century calls for urgent policy

attention. An editorial. – (HBL Apr 5, 2016 p 8)

– 8 –

"Lowest in over 53 years: Banks' deposit growth declines to below 10%: Cut in repo rate, sluggishcredit offtake cited as reasons for people keeping away from deposits" – Deposit growth of bankshas fallen below the 10 per cent level for the first time in several decades in the wake of a fall in interest ratesoffered on term deposits and sluggish credit offtake. Are savers shying away from putting money in bankterm deposits and small saving schemes? A report. – (IE Apr 4, 2016 p 14)

DIGITAL BANKING"Banks can halve transaction costs by going digital: Report" – Banks in India can reduce costs by up to

50 per cent per transaction in the next few years by redesigning their processes and systems for the digitalage, structurally changing their cost base and instituting more aggressive cost management processes, accordingto a report. – (FE Apr 2, 2016 p 10)

Jhari, Vinay – "Banking on digital transformation" – Technology holds the key to making fundamental andaffirmative changes that could make banks effective and inclusive. An article. – (HBL Apr 4, 2016 p 16)

– FINTECH

"Bank jobs under threat from financial start-ups, finds Citi study: Employees at American bankscould drop by around 30% by 2025" – Up to 30 per cent of the current employees in the banking industrymay lose their jobs to new technologies in the next 10 years, according to new projections from Citigroup. A112-page report, Digital Disruption said that the number of employees at American banks would drop to 1.8million people in 2015, down from 2.6 million last year and 2.9 million before the financial crisis. An evensharper drop, of 37 per cent, is predicted for European banks. A report. – (HBL Apr 1, 2016 p 10)

DIGITAL TECHNOLOGYSrinivasan, Ajay – "Financial services banking on tech" – While technology presents an opportunity, it also

poses a threat as it lowers barriers to entry. Digital technology will make it easier for customers to switchfrom one financial services firm to the other and this could end up hurting profitability. An article. – (FE Apr4, 2016 p 6)

E PAYMENTSShetty, Adhil – "E-payments: E-wallets offer a secure and easy payment mode" – With e-wallets, not

only are the payments cashless, but come with no added risk of any data theft upon using your net banking orcards. Mobile wallets are broadly classified as either open, closed, or semi-closed. An article. – (FE Apr 1,2016 p 15)

EXPORT CREDIT– PRIORITY SECTOR LENDING

"Commerce ministry wants priority sector status for export credit" – The commerce ministry will seekpriority sector status for export credit and focus on a revival of special economic zones (SEZs), as it hasidentified six areas to prop up outbound shipments in goods, which contracted for a 15th straight monththrough February. A report. – (FE Apr 7, 2016 p 2)

FINANCIAL INCLUSIONGhosh, Saibal and Vinod, D – "Furthering the financial inclusion agenda in India" – Exploiting household

level survey data, this paper analyses the interface between gender and financial inclusion. The multivariateregressions that take on board several household and state-level controls suggest significant disparities inboth the access to as well as the use of finance. More specifically, female-headed households are 10% lesslikely to access formal finance as compared to households that are headed by males. Similar evidence carriesover to the use of finance as well. From a policy standpoint, the paper highlights several policy interventionswhich can serve the cause of greater financial inclusion of women in the country. An article. – (EPW 51(12)Mar 19, 2016 pp 126-132)

– 9 –

Shukla, Rajesh and Shree, Megha – "Financial inclusion eludes female-headed households" – Thesocio-economic status of female-headed households is falling; they present a genuine case for affirmativeaction by state and central governments for improving their well-being. An article. – (FE Apr 1, 2016 p 9)

– BUSINESS CORRESPONDENTS

"Course for business correspondents" – The RBI has proposed setting up a training and certificationcourse for business correspondents (BC) in India, both new and existing ones, according to Raghuram Rajan,Governor, RBI. – (FE Apr 6, 2016 p 11)

FINANCIAL LITERACY"The need for financial literacy" – Financial literacy is more than just crunching the numbers right, and

instilling it in every Indian is essential to build a more prosperous India. A report. – (ET Apr 7, 2016 p 9)

FINANCIAL REFORMSKohli, Vineet – "Financial reforms in an endogenous money economy" – An examination of the Reserve

Bank of India's monetary policy leaves little doubt that India can be suitably characterised as an endogenousmoney economy. In an endogenous money environment, financial reforms will prove ineffective in stimulatingcredit supply to large commercial borrowers. They may, however, prove counterproductive by sharpeningthe credit constraints faced by agricultural and other petty producers in the economy. An article. – (EPW51(12) Mar 19, 2016 pp 87-93)

FOREIGN BANKINGSarma, Mandira and Prashad, Anjali – "Do foreign banks in India indulge in 'Cream Skimming'?" –

Despite recent monetary policy accommodation, bank credit growth continues to decelerate in India, partlydue to huge non-performing asset overhangs in banks. This paper explores various issues related to surgingNPAs in banks and observes that excessive credit growth in the past is a major reason that has led to currentNPAs. Other factors such as contemporary economic conditions, capital adequacy and overall levels ofefficiency of the banks have also affected the incidence of NPAs. For promoting financial stability andenhancing monetary policy effectiveness, it is suggested that macro-prudential aspects such as counter-cyclical capital buffer and dynamic provisioning need to be strengthened. There is also a need to explore ifcorporate governance concerns could be instrumental in adversely impacting the loan book of state-ownedbanks. An article. – (EPW 51(12) Mar 19, 2016 pp 120-125)

FUND TRANSFERSShetty, Adhil – "Your money: Five ways of money transfers to suit your banking needs" – Technology

has made banking easy with various fund transfer options. Make use of these instant services and optimiseyour financial transactions. An article. – (FE Apr 5, 2016 p 15)

GLOBAL INVESTMENT BANKS"Investment banks face deepening gloom as trading revenues plunge" – Global investment banks

suffered declines of as much as 56 per cent in their trading businesses in the first three months of the year,analysts believe, stoking fears of further lay-offs for staff and lower dividends for shareholders. A report.– (FT Mar 31, 2016 p 1)

GOLD MONETISATION SCHEME"Gold monetisation: RBI decision clears hurdle for temples" – Many say their worry on not being able

to opt for redemption under medium- or long-term tenures now met. A report. – (BS Apr 2, 2016 p 6)

INDUSTRIAL REL"Bank union seeks Parliamentary probe into Mallya loans" – All India Bank Employees Association calls

for a one-day strike on May 25. A report. – (BS Apr 2, 2016 p 3)

– 10 –

INTERNATIONAL FINANCIAL SERVICES CENTRE– MAHARASHTRA

"Big B, Kochhar among seven roped in to set up financial hub at BKC: Plan gets a boost 30 firmsshow interest in designing the master plan for the International Financial Services Centre" –From former Singapore Exchange CEO Magnus Bocker to Bollywood actor Amitabh Bachchan, the stategovernment has roped in seven experts as special invitees on its task-force to set up the IFSC at Bandra-Kurla Complex. A report. – (HT Apr 6, 2016 p 7)

LIQUIDITY"SBI wants banks to hold government's cash balance" – In view of the liquidity crunch that banks have

been facing for the last few months, particularly in March, the State Bank of India (SBI) had demanded thatthe government's cash balances to be kept with the lenders and not with the Reserve Bank of India (RBI). Areport. – (H Apr 2, 2016 p 15)

LOAN PRICING– INTEREST RATES

"Borrowing: The new rate regime" – The marginal cost of funds based lending rate will facilitate a fastermonetary transmission and benefit borrowers. A report. – (FE Apr 5, 2016 p 15)

"Clutch of banks lowers lending rates: New formula, pegged to marginal cost of funds, kicks intoday" – A clutch of banks, including State Bank of India, HDFC Bank and Bank of Baroda announced theirnew lending rates for various tenors. For example, the new one-year benchmark lending rate ranges from9.20 to 9.85 per cent compared with the existing base rate of 9.30 per cent to 9.95 per cent. A report.– (HBL Apr 1, 2016 p 1)

"A host of banks cuts lending rates" – With the new marginal cost of funds based lending regime kicking in,a host of banks, including ICICI Bank, Bank of India, IDBI Bank and Axis Bank, announced new lendingrates. A report. – (HBL Apr 2, 2016 p 10)

"RBI's new mission: Getting lenders to pass on its rate cuts" – RBI is embarking on an experiment toremove much of the discretion the country's commercial banks have to set lending rates and force them tobase borrowing costs on prevailing market rates. – (FE Apr 5, 2016 p 10)

Adikesavan, S – "'Marginal' gains from new lending rates" – The MCLR norm may help banks cope withcrises. But for better monetary transmission, we need market-determined rates. An article. – (HBL Apr 5,2016 p 8)

Merwin, Radhika – "Lower benchmark may not reduce loan rates: Banks can tinker with the mark-up on the MCLR to maintain status quo on rates" – An article. – (HBL Apr 1, 2016 p 10)

MONETARY POLICIES– CENTRAL BANKS

Rajwade, A V – "The global monetary non-system" – Monetary transmission of unconventional monetarypolicies can be curbed through controls on capital flows. An article. – (BS Apr 7, 2016 p 8)

Sheel, Alok – "Monetary policy dilemmas at the current juncture" – Monetary policies in advancedeconomies and emerging markets face quite different challenges at the current juncture. In the advancedcountries, current dilemmas derive from the normalisation of unconventional monetary policies. The short-term dilemma is to determine when to start exiting extraordinary policies and selecting appropriate tools, asconventional tools may not be very relevant during this phase. The medium- to long-term challenges relate tothe sequencing, pace and mechanics of normalisation. Monetary policy in emerging markets needs to copewith the familiar dilemmas of fiscal dominance, the growth-inflation trade-off and the 'impossible trinity.' Withfiscal parameters in control, and food and commodity prices subdued, the chief dilemma currently confronting

– 11 –

emerging markets involves a trade-off between targeting divergent domestic and external cycles. Althoughthey are now better placed to absorb a sudden stop, the impact is likely to be differential, with those withweaker macroeconomic parameters suffering greater pain. An article. – (EPW 51(12) Mar 19, 2016 pp 46-55)

MONETARY POLICY"50 bps rate cut with a promise of more accommodative liquidity would be best" – Edited excerpts

from panel discussion with experts Jahangir Aziz, chief economist at JP Morgan; Jayesh Mehta, managingdirector and country treasurer at Bank of America; and Srinivas Varadarajan, deputy managing director atAxis Bank discuss the likely outcomes. – (Mint Apr 4, 2016 p 21)

"Borrowing costs will go down, say bankers" – Though the 25-basis-point repo rate cut by the RBI was onexpected lines, it will help lower borrowing costs, said senior bankers. Reactions from leading bankers'.– (HBL Apr 6, 2016 p 10)

"A day before monetary policy review: FM calls for lowering of rates to make economy competitive"– A day before the Reserve Bank of India reviews its monetary policy, finance minister Arun Jaitley calledfor lowering of interest rates to make the economy competitive while taking a dig at those criticising thedecision to cut interest rate on small savings schemes. A report. – (ET Apr 5, 2016 p 13)

"Dovish tone" – RBI eases liquidity, but watches inflation momentum. An editorial. – (BS Apr 6, 2016 p 11)

"The economic backdrop to RBI's monetary policy review" – The Reserve Bank of India will meet for itsfirst monetary policy review of the new fiscal year. RBI is widely expected to pare rates by at least 25 basispoints, with some expecting a steeper 50 basis point cut. (A basis point is one-hundredth of a percentagepoint.). A graphical report. – (Mint Apr 4, 2016 p 11)

"Inflation hits poor the most, RBI must listen to them: Subbarao: Cutting interest rates not necessarilythe solution to stimulate investment, says former RBI Governor" – The Reserve Bank of India hasto listen to voices of the poor who are hurt the most by inflation, former Governor Duvvuri Subbarao said,adding that cutting interest rates is not necessarily the solution to stimulate investment. A report. – (HBL Apr1, 2016 p 10)

"Key numbers the Reserve Bank will consider while setting policy" – The Reserve Bank of India(RBI), in making its upcoming monetary policy decision, has many variables to juggle. A graphical report.– (BS Apr 4, 2016 p 4)

"Monetary policy easing: Where does the rate cut take your money?" – Borrowers should choosefloating rate loans, and savers should lock in at the current deposit rates. A report. – (Mint Apr 6, 2016 p 20)

"Monetary policy: Measures at a glance" – A report. – (FE Apr 6, 2016 p 10)

"Narrowing policy corridor, raising reserve repo rate surprising" – The Reserve Bank of India (RBI)cut the repo rate by 25 bps to 6.5%, in line with consensus and our expectations. However, it surprised bynarrowing the policy corridor from 100 bps to 50 bps, and also by raising the reverse repo rate by 25 bps to6%.We believe that rates will remain on hold till the end of 2016. A report by NOMURA. – (FE Apr 6, 2016p 10)

"Rajan to quiz students on monetary policy today" – That Reserve Bank of India governor RaghuramRajan is never shy of taking questions from all quarters is well documented. What is also known widely is thathe enjoys the most while interacting with students. Rajan will get this opportunity again on April 5, the day ofthe new fiscal year first bi-monthly monetary policy. A report. – (HT Apr 5, 2016 p 14)

"RBI continuing with its prudent monetary policy" – Edited excerpts from an interview with RobertParker, Senior Advisor-Investment, Strategy and Research at Credit Suisse UK. – (Mint Apr 6, 2016 p 29)

"RBI expected to cut rates next week: Poll" – Falling inflation will give the Reserve Bank of India (RBI)room to cut interest rates at a policy review, and cut them again by September, before holding steady toassess the impact of the upcoming monsoon season on food prices, a Reuters poll found. A report. – (FE Apr2, 2016 p 10)

– 12 –

"RBI measures could be game changer for India" – Edited excerpts from an interview with Adrian Mowat,Chief Asiani and Emerging Markets Equity Strategist, JP Morgan. – (Mint Apr 7, 2016 p 20)

"RBI Monetary Policy" – Reactions from leading bankers'. – (FE Apr 6, 2016 pp 10-11)

"RBI to monitor growth, money market before another rate cut" – The Reserve Bank of India (RBI) cutthe repo rate by 25 basis points (bps) to 6.5% because of prudent fiscal consolidation path envisaged in theUnion Budget, softer inflation and the imperative to boost growth. A report by CRISIL. – (FE Apr 6, 2016 p 10)

"RBI's new, welcome stress on liquidity: Rate cut's good news, liquidity focus even better" – Aneditorial. – (ET Apr 6, 2016 p 12)

"The RBI's pivot to liquidity management" – Its focus has shifted from the price of money to the quantityof money. The success of the new liquidity policy will depend on how it is translated into practice. An article.– (Mint Apr 7, 2016 p 22)

"Time for Reserve Bank to reduce policy rates" – There is a compelling case for a front-loaded reductionby 50 basis points. There is little chance that the investment cycle will turn unless corporate finances aresorted out. An article. – (Mint Apr 4, 2016 p 22)

"With 25 bps cut, Rajan sets stage for cheaper loans: RBI Governor opens the liquidity floodgates;ball in banks' court now" – In a widely expected move, Reserve Bank of India Governor Raghuram Rajankicked off the new financial year cutting the repo rate by 25 basis points. In the first bi-monthly monetarypolicy for 2016-17, Rajan also announced a slew of liquidity enhancement measures, including a reduction ofthe minimum daily maintenance of cash reserve ratio (CRR) in the banking system. A report. – (HBL Apr 6,2016 p 1)

Azad, Rohit – "The new Keynesian paradigm of monetary policy" – While Keynes was sceptical of theefficacy of monetary policy, the current mainstream macroeconomic consensus, 'New' Keynesianmacroeconomics, accords it primacy in the process of maintaining both price and output stability. This consensusdepends on three relationships: demand is inversely dependent on the interest rate, inflation is positivelyrelated to the output gap and the central bank can control interest rates to achieve an optimum combinationof price and output. This paper presents a theoretical critique of this consensus from an 'old' Keynesianperspective since Keynes had raised fundamental objections to each of the three relationships. An article.– (EPW 51(12) Mar 19, 2016 pp 79-85)

Bandyopadhyay, Tamal – "Rate cut for sure but by how much, Dr Rajan?" – An article. – (Mint Apr 4,2016 pp 1, 2)

Bhusnurmath, Mythili – "Game, Set and Match To...?" – The ball is now firmly in the central bank's court.It is for Raghuram Rajan to respond suitably. Can the RBI make up for being behind the curve by cuttingmore aggressively now? Will a larger-than-expected rate cut spur growth? Could it spur inflation? An article.– (ET Apr 4, 2016 p 12)

Datta, Devangshu – "All eyes on the RBI policy statement" – Expectations of a rate cut are high fromalmost all quarters. Considering that inflation is moderating and growth pace is slow, a rate cut is likely. Also,a rupee rate cut could help the currency slide against the dollar. It would also provide new impetus tomarkets. An article. – (BS Apr 4, 2016 p 8)

Ghosh, Soumya Kanti – "Monetary policy: RBI rejigs liquidity framework" – This policy could be agame-changer in providing a new direction to monetary policy strategy, rather than stance. An article. – (FEApr 6, 2016 p 9)

Joshi, Dharmakirti – "Transmission and liquidity key factors" – An article. – (Mint Apr 6, 2016 p 10)

Nachane, Dilip M – "Dynamic stochastic general equilibrium modelling" – In recent years DynamicStochastic General Equilibrium models have come to play an increasing role in central banks, as an aid in theformulation of monetary policy (and increasingly after the global crisis, for maintaining financial stability).DSGE models, it is claimed, are less a-theoretic than other widely used models such as VAR, or dynamicfactor models. As the models are 'structural,' they are supposed to be immune to the Lucas Critique, and thus

– 13 –

can be 'taken to the data' in a meaningful way. However, a major feature of these models is that theirtheoretical underpinnings lie in what has now come to be called as the New Consensus Macroeconomics.Using the prototype real business cycle model as an illustration, this paper brings out the econometric structureunderpinning such models. A detailed analytical critique is also presented together with some promising leadsfor future research. An article. – (EPW 51(12) Mar 19, 2016 pp 68-77)

Prasanna, A – "QE with Indian characteristics?" – An article. – (Mint Apr 6, 2016 p 10)

Ranade, Ajit – "Expect a larger fall in lending rates" – An article. – (Mint Apr 6, 2016 p 10)

Rao, Shubhada M – "Monetary easing to resume after a six-month hiatus" – An article. – (Mint Apr 1,2016 p 9)

Rao, Shubhada M – "RBI focuses on getting bang for its buck" – An article. – (ET Apr 6, 2016 p 14)

Sanyal, Siddhartha – "Steps to ease liquidity will aid rate transmission, boost assets" – An article.– (ET Apr 6, 2016 p 14)

Seshan, A – "RBI broadly makes the right moves" – While an accommodative policy is appropriate to thesituation, liquidity issues could have been handled differently. An article. – (HBL Apr 6, 2016 p 8)

Sundaresan, B – "The 'marginal' effects of monetary policy" – Marginal cost of fund-based lending ratekicked in from April 1. HT explains how the new method will help banks pass on RBI's repo rate cut. Anarticle. – (HT Apr 6, 2016 p 15)

Takkar, Naresh – "Enhancing the transmission process: Restricting repo rate cut to 25bps anappropriate step; focus on liquidity to improve transmission" – The focus of the monetary policystatement on smoothing systemic liquidity is a positive development, which should support the transmissionprocess. An article. – (FE Apr 7, 2016 p 9)

Varma, Sonal – "RBI has effectively delivered a larger cut" – An article. – (ET Apr 6, 2016 p 9)

Venkatesh, Latha – "Monetary policy: A fine balance" – An article. – (Mint Apr 6, 2016 p 29)

– CHALLENGES

Pal, Parthapratim – "Calm before the storm?" – It is generally believed that India is doing far better thanmost emerging market economies in these times of global economic turmoil. Emerging markets are facingcapital flight, with large-scale outflows, especially since the second half of 2015, with the trend expected tocontinue in 2016. India has been less affected than others, but is clearly vulnerable due to the large numberof Indian firms that are exposed to external borrowings, a weak rupee, a year or more of declining merchandiseexports, falling corporate profitability, and stressed corporate balance sheets. An article. – (EPW 51(12) Mar19, 2016 pp 94-102)

Sen Gupta, Abhijit and Sengupta, Rajeswari – "Capital account management in India" – India has beensubject to capricious capital flows since its integration with the global capital markets in the early 1990s. In abid to balance diverse objectives, India, like many other emerging markets, has resorted to active managementof various types of capital flows. This paper finds that while the calibrated liberalisation approach resulted inaltering the composition of capital flows towards more stable flows, and has helped India to negotiate the'Trilemma,' the use of sporadic capital account management measures in the face of surge or stop of capitalflows has not been very effective in achieving their objectives of reducing external vulnerability or mitigatingmacro-prudential risks. An article. – (EPW 51(12) Mar 19, 2016 pp 103-111)

– LIQUIDITY

Sen Gupta, Indranil – "RBI: Liquidity, liquidity, liquidity" – An article. – (BS Apr 1, 2016 p 4)

MONETARY POLICY TRANSMISSION"Effective transmission" – A quick edit. – (Mint Apr 6, 2016 p 3)

– 14 –

"Transmission of rate cut to be more effective: Mundra" – A day after the Reserve Bank cut policy rateby 0.25 per cent, Deputy Governor S S Mundra expressed hope that transmission of lower interest ratethrough banks will be more effective this time. A report. – (FE Apr 7, 2016 p 10)

Chakravarty, Manas – "Effective policy transmission may cut lending rates by 75 bps" – RBI nowrecognizes that lack of liquidity is hampering transmission of policy rates. An article. – (Mint Apr 6, 2016 p 18)

– INTEREST RATES

Anand, Abhishek – "Is effective transmission of monetary policy enough?" – It is important to revive thefalling deposit rates, and not just wait for greater transmission of monetary policy to happen to boost thecredit growth. An article. – (FE Apr 5, 2016 p 9)

NON-PERFORMING ASSETS"Banks reclassify Electrosteel debt as non-performing asset" – Lenders to Electrosteel Steels have

classified the exposure as a non-performing (NPA) following the Reserve Bank of India's (RBI) directionsunder the asset quality review. A report. – (FE Apr 2, 2016 pp 1, 2)

"CVC blames banks for volume of NPAs" – Chief Vigilance Commissioner (CVC) K V Chowdary said thatthe volume of non-performing assets (NPAs) piled up in India's banking system is indicative of a systemicfailure of banks. Banks confidently say that they have all the systems in place to deal with the issue of NPAs.But the truth is that these systems are not well laid down and the process, on the part of banks in this regardis a generalised and a loosely-worded set of jargons. A report. – (TI Apr 2, 2016 p 5)

"NPA challenge the biggest before Centre: Panagariya" – NITI Aayog's vice-chairman Arvind Panagariyasaid the biggest challenge that the government faces is to address the issue of non-performing assets (NPAs),and consolidation in the banking sector can help resolve the problem to some extent. A report. – (IE Apr 5,2016 p 14)

– CREDIT GROWTH

Samantaraya, Amaresh – "Procyclical credit growth and bank NPAs in India" – Despite recent monetarypolicy accommodation, bank credit growth continues to decelerate in India, partly due to huge non-performingasset overhangs in banks. This paper explores various issues related to surging NPAs in banks and observesthat excessive credit growth in the past is a major reason that has led to current NPAs. Other factors such ascontemporary economic conditions, capital adequacy and overall levels of efficiency of the banks have alsoaffected the incidence of NPAs. For promoting financial stability and enhancing monetary policy effectiveness,it is suggested that macro-prudential aspects such as counter-cyclical capital buffer and dynamic provisioningneed to be strengthened. There is also a need to explore if corporate governance concerns could be instrumentalin adversely impacting the loan book of state-owned banks. An article. – (EPW 51(12) Mar 19, 2016 pp 112-119)

PUBLIC SECTOR BANKS"In FY15, banks with high NPAs rejected more RTI requests: IOB, BoB and Canara Bank lead,

finds study by Commonwealth Human Rights Initiatives" – As the Finance Ministry and the centralbank try to clean up the balance sheets of troubled public sector lenders, a new study has found that banksthat saw a sharp rise in bad loans in 2014-15 were not very forthcoming with information requests by thepublic. A report. – (HBL Apr 2, 2016 p 10)

– BALANCE SHEETS

"Q4 to bleed banks' books further" – Banks' balance sheets will continue to bleed in the final and fourthquarter of 2015-16 as existing bad loans are yet to be reflected fully on the books of lenders. This is expectedto put more stress on most large public sector banks, which have already seen record losses due to mountingbad loans in the preceding quarter. A report. – (HT Apr 4, 2016 p 12)

– 15 –

– BANK CAPITAL

"FinMin talking to PSBs to link capital support to performance: Review to be based on recovery,lending and other operational efficiencies" – The government plans to allocate capital to state-run bankson the basis of their performance and disburse just a partial amount to help them meet regulatory requirements.The finance ministry is discussing the matter with these banks. 'The initial idea was to allocate only 25%amount and the remainder based on the six-month performance review,' according to one of the officials,who did not wish to be identified. A report. – (ET Apr 7, 2016 p 13)

"For PSU banks, raising much-needed Rs.1.1-lakh cr could be tough task: IiAS: 10 banks face threatof capital scarcity on ownership norms" – Can public sector banks (PSBs) continue to stay relevant? Oris the government insistence on owning at least 50 per cent of such banks going to be the death of them -these are the questions raised in a new report released by proxy advisory Institutional Investor AdvisoryServices. A report. – (HBL Apr 7, 2016 p 13)

– BANK CONSOLIDATION

"Strengthening state-run banks: Govt to push for consolidation of PSBs after recapitalising: Jaitley"– The government will push for consolidation of public sector banks once they are capitalised and strengthened,Finance Minister Arun Jaitley. A report. – (ET Apr 6, 2016 p 11)

– LIC's STAKE

Merchant, Krishna – "LIC rides to the rescue of public sector banks" – An article. – (Mint Apr 5, 2016 p 18)

RECOVERY OF LOANS– DEFAULTERS - NPAs

"Banks knock on courts' doors to recover Rs.1.86 lakh crore: Cases across the country againstdefaulters who owe over Rs.1 crore each" – Banks and financial institutions are fighting cases acrossthe country to recover at least Rs.1.86 lakh crore from defaulters who owe more than Rs.1 crore each.While handing over information in a sealed cover, the Reserve Bank of India (RBI) had asked the SupremeCourt not to disclose the data on defaulters in public. A report. – (BS Apr 4, 2016 p 1)

– WILFUL DEFAULTERS

"Banks reject Mallya's Rs.4,000 cr offer, say there's no value in it" – A consortium of 17 banks, led byState Bank of India, has rejected a proposal given by beleaguered liquor baron Vijay Mallya and his firms topay back Rs.4,000 crore by September 30, saying that there is 'no value in the offer' and is likely to plead theSupreme Court to pass direction against him. A report. – (TI Apr 7, 2016 p 19)

"Lenders to turn down Mallya settlement offer" – Banks may formally reject Mallya offer to repayRs.6,000 crore as settlement for Rs.9,000 crore dues in SC this week. A report. – (Mint April 5, 20136 p 3)

RISK MANAGEMENT"Bank boards play active role in model risk management: survey: Banks that use models efficiently

are likely to grow at a higher rate: KPMG" – Fifty per cent of private and public sector banks agree thatboards play an active role in management of model risks, according to a survey. According to the findings ofthe survey, which was recently conducted by KPMG in India, most banks agreed that model risk should bemanaged by a central unit. A report. – (HBL Apr 5, 2016 p 10)

STRATEGIC DEBT RESTRUCTURING"Banks should take over defaulting firm's management using SDR" – Reserve Bank of India (RBI)

governor Raghuram Rajan said that banks should take over the management of a company even whilelooking for a buyer, using the strategic debt restructuring (SDR) scheme. A report. – (FE Apr 6, 2016 p 10)

– 16 –

"State Bank of Patiala is the first to point out risks: Bank lobby voices concern over the outcome ofSDR" – Unpaid PF, tax claims may be liabilities that a bank as majority shareholder of a co may run into.Even though technically it's the company that is liable and not the new promoter, it will be virtually impossiblefor banks that become majority shareholders to wash their hands off, according to Madhukar R Umarji,former chief legal advisor to IBA. A report. – (ET Apr 1, 2016 p 8)

– SDR - ASSETS

"No foreign buyers for SDR assets" – Attempts to find foreign buyers for stressed assets in which bankshave converted debt into equity have failed to take off. Differences in valuation and difficulties in conductingdue diligence on potential buyers based overseas have impeded the process. A report. – (Mint Apr 2, 2016 pp 1, 2)

WILFUL DEFAULTERS"Deliberate non-payment: Defaulters list doubled, their dues tripled in last three years" – Cibil: 6,819

wilful defaulters owed Rs.74,699 cr to banks until Dec 2015. A report. – (IE Apr 1, 2016 pp 1, 7)

"Wilful defaults: Banks can't escape scrutiny if public interest's violated: DRAT says principle ofpublic accounting applies to banks too" – At a time when 'generosity' of banks towards Vijay Mallya andother 'defaulters' is under scanner, the Debt Recovery Appellate Tribunal (DRAT) ruled that banks are 'notimmune from scrutiny', especially if they act against public interest by offering rebates to a 'defaulter' byentering into a one-time settlement (OTS). A report. – (ET Apr 5, 2016 p 7)

RBI CIRCULARS"Alteration in the name of 'Korea Exchange Bank Co., Ltd' to 'KEB Hana Bank' in the Second

Schedule to the RBI Act, 1934" – (RBI Circular RBI/2015-2016/365 DBR.No.Ret.BC.88/12.07.137A/2015-16 dated 07.04.2016)

"Alteration in the name of 'Rabobank International (Cooperatieve Centrale Raiffeisen-BoerenleenbankB.A.)' to 'Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.' in the Second Schedule to theRBI Act, 1934" – (RBI Circular RBI/2015-2016/364 DBR.No.Ret.BC.87/12.07.131A/2015-16 dated07.04.2016)

"Applicability of Concentration of Credit/ Investment Norms" – (RBI Circular RBI/2015-2016/363 DNBR(PD) CC.No.077/03.10.001/2015-16 dated 07.04.2016)

"Auction of Government of India Dated Securities" – (RBI Circular RBI/2015-2016/354 Ref.No.IDMD/2258/08.02.032/2015-16 dated 04.04.2016)

"Change in Bank Rate" – (RBI Circular RBI/2015-2016/358 DBR.No.Ret.BC.90/12.01.001/2015-16 dated05.04.2016)

"Deendayal Antyodaya Yojana (DAY)-National Urban Livelihoods Mission" – (RBI Circular RBI/2015-2016/360 FIDD.GSSD.CO.BC.No.22/09.16.03/2015-16 dated 07.04.2016)

"Liquidity Adjustment Facility - Repo and Reverse Repo Rates" – (RBI Circular RBI/2015-2016/357FMOD.MAOG. No. 112 /01.01.001/2015-16 dated 05.04.2016)

"Marginal Standing Facility" – (RBI Circular RBI/2015-2016/356 FMOD.MAOG. No.113 /01.18.001/2015-16 dated 05.04.2016)

"Oversight of Government Business in Agency Banks" – (RBI Circular RBI/2015-2016/361DGBA.GAD.No-3147/44.01.001/2015-16 dated 07.04.2016)

"Priority Sector Lending Certificates" – (RBI Circular RBI/2015-2016/366 FIDD.CO.Plan.BC.23/04.09.01/2015-16 dated 07.04.2016)

"Revision of interest rates for Small Savings Schemes" – (RBI Circular RBI/2015-2016/362DGBA.GAD.3175/15.02.005/2015-16 dated 07.04.2016)

– 17 –

"Section 42(1) of the Reserve Bank of India Act, 1934 - Change in Daily Minimum Cash ReserveMaintenance Requirement" – (RBI Circular RBI/2015-2016/359 DBR.No.Ret.BC.91 /12.01.001/2015-16 dated 05.04.2016)

"Standing Liquidity Facilities for Primary Dealers" – (RBI Circular RBI/2015-2016/355REF.No.MPD.BC.380 /07.01.279/2015-16 dated 05.04.2016)

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURE SECTOR"Agri sector to grow 6% on normal rains" – The country's agriculture and allied sector's growth could jump

five-fold in 2016-17, to six per cent, if there's a normal monsoon this year, according to NITI Aayog memberRamesh Chand. Also he said after two back-to-back drought years, we should not be surprised to achieve6% agriculture growth in 2016-17. Area under cultivation will be more and yields will increase leading to thegrowth. A report. – (BS Apr 1, 2016 p 4)

CROP INSURANCENirmal, Rajalakshmi – "Crop insurance: new dawn for farmers?" – The new scheme offers lower premium,

more risk cover and hassle-free settlement. What is covered: * Losses from fire, lightning, storm, cyclone,flood, drought, pests; * Inability to sow after incurring expenses due to adverse weather; * Post-harvest lossdue to unseasonal rains; * Localised calamities such as hailstorms. An article. – (HBL Apr 4, 2016 p 8)

NABARD"To raise Rs. 50,000 cr this fiscal" – The National Bank for Agriculture and Rural Development (Nabard)

is planning to raise about Rs.50,000 crore via bonds in FY17 to finance, among other things, irrigation projects,rural roads and rural bridges, according to Chairman Harsh Kumar Bhanwala. A report. – (HBL Apr 7, 2016p 10)

– FINANCIAL INCLUSION

"Nabard to conduct survey on financial inclusion: Will cover 40,000 households across 29 States,says Harsh Kumar Bhanwala" – With the Centre's financial inclusion efforts gaining traction across thecountry, the National Bank for Agriculture and Rural Development (Nabard) has decided to conduct a megafinancial inclusion survey to capture the progress at the grassroots level. A report. – (HBL Apr 7, 2016 p 10)

INDUSTRY"Core sector growth jumps 5.7% in Feb" – In what could reverse a three-month decline in industrial

production, eight core sector industries surged to a 15-month high of 5.7 per cent in February, almost doublethe 2.9 per cent of January. These industries had expanded by 2.3 per cent in February 2015. Official datashowed only one segment, steel, had a fall in February output against three - crude oil, natural gas and steel- in January. A report. – (BS Apr 1, 2016 p 4)

INFRASTRUCTURE SECTOR"Reviving infrastructure" – Overseas borrowing norms will help, but challenges remain for infrastructure.

An editorial. – (HBL Apr 7, 2016 p 8)

INSURANCE– FOREIGN DIRECT INVESTMENT

"RBI notifies 49% FDI under automatic route in insurance" – The Reserve Bank of India has notified 49per cent foreign direct investment (FDI) under automatic route in insurance sector. A report. – (FE Apr 1,2016 p 10)

– 18 –

MANUFACTURING"Factory activity touches 8-month high in March: PMI" – India's manufacturing growth rose to an eight-

month high in March driven by strong rise in business orders, leading firms to scale up output, while the build-up in inflationary pressures may result in RBI hitting the pause button, according to a Nikkei survey. Theseasonally-adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - was up from 51.1 in February to an eight-month high of52.4. A report. – (FE Apr 5, 2016 p 3)

MUTUAL FUNDS"Mutual fund AUM hits record high on strong retail inflows: Retail investors continued with

investments despite weakness in markets over the last year: Experts" – The weakness in the equitymarkets notwithstanding, the mutual fund industry continued to gain on assets under management, hitting arecord average AUM of Rs.13,58,559 crore for the quarter ended March 2016. A report. – (IE Apr 3, 2016p 15)

SMALL SCALE INDUSTRY

MSME FINANCE"RBI taking steps to improve credit flow to MSMEs, says S S Mundra: E-platform for online application, processing

of loans on the anvil, says RBI Deputy Governor" – The Reserve Bank of India is taking several steps toensure timely credit and improved cash flow to micro, small and medium enterprises (MSMEs). A report.– (HBL Apr 7, 2016 p 10)

MUDRA YOJANA"Small Mudra loans drive credit growth for banks" – Even as companies shy away from giving loans, the

government's flagship Mudra scheme has driven credit growth to 11% as on March 25, 2016. The creditgrowth was in single digits for the major part of the just -concluded fiscal. While the overall appetite for creditfrom the rural sector and companies continued to remain subdued, banks, too, have adopted a cautiousapproach in approving loans. As on March 25, 2016, a total loan of over Rs.1,22,048 crore has been disbursedto 32 million small businesses, according to government data. In 2014-15, credit growth was 13%. A report.– (HT Apr 7, 2016 p 19)

SMEs"Encouraging, motivating and recognising SMEs" – The India SME 100 Awards acts as a catalyst to

identify promising SMEs and recognise them for their achievements. A report. – (ET Apr 7, 2016 p 17)

INTERNATIONAL ECONOMICS"Bleak future: Lagarde sees political dangers galore with global economy tepid" – The world outlook

is clouded by 'weak growth, no new jobs, no high inflation, still high debt,' according to Christine Lagarde,MD, IMF. A report. – (Mint Apr 6, 2016 p 27)

Sheng, Andrew and Geng, Xiao – "Plan B for the global economy" – An article. – (BS Apr 5, 2016 p 11)

CHINA"S&P cuts China's sovereign credit outlook to negative on slow reforms" – S&P cut its outlook for

China's sovereign credit rating to negative from stable, but maintained the rating at AA-, saying the government'sreform agenda is on track but likely to proceed more slowly than expected. A report. – (HT Apr 1, 2016 p 14)

Roach, Stephen S – "China's economic identity crisis" – The shift in focus from consumer-led rebalancingto supply-side reforms is premature. An article. – (FE Apr 1, 2016 p 8)

– 19 –

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Apr 4, 2016 Supl. pp 1-20)

NEW DEVELOPMENT BANK– KARNATAKA

"BRICS bank's first loan goes to Karnataka" – The fledgling New Development Bank (NDB), betterknown as BRICS bank, will sanction its first loan to a project in India later this month, diversifying India'soptions to raise long-term capital for infrastructure development. – (FE Apr 4, 2016 p 2)

MANAGEMENT

LEADERSHIP"Developing the next generation of leaders" – Timely planning and a proper transition are pivotal for

family business owners when handing over the reins of a business to the successor. There is no substitute formentoring while building a leadership team. A report. – (Mint Apr 6, 2016 p 22)

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: john@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:

Publications OfficerNational Institute of Bank Management

NIBM PO, Kondhwe Khurd, Pune 411 048 (India)Telephone: 0091-20-26716000 (EPABX) Direct: 26716526

Fax: 0091-20-26834478Email: huned.contractor@nibmindia.org 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 :Publications Officer

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

Telephone : 0091-20-26716000 (EPABX) Direct: 26716526 Fax : 0091-20-26834478E-mail : hunde.contractor@nibmindia.org

Website : 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)