Volume XXXII Number 50 September 11, 2017

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 3

C. AGRICULTURE & RURAL DEVELOPMENT 18

D. INDUSTRY 18

E. SMALL SCALE INDUSTRY 19

F. INTERNATIONAL ECONOMICS 19

G. MANAGEMENT 19

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BANKERS' BRIEF Vol. XXXII No. 50September 11, 2017

ECONOMY"At 5.7%, Q1 GDP growth slumps to 3-year low: Uncertainty over GST and related de-stocking hit

industrial sector in Q1, says Anant" – Three key macro-data points released presented a worryingpicture of the economy, adding credence to the Reserve Bank of India Monetary Policy Committee's recentfears of slower growth. The keenly-awaited first-quarter GDP growth number came in at 5.7 per cent, athree-year low and far lower than the 7.9 per cent GDP growth recorded in the same quarter last fiscal andthe 6.1 per cent recorded in the January-March quarter. A report. – (HBL Sep 1, 2017 p 1)

"Crisil lowers GDP forecast to 7% in FY18" – Domestic rating agency Crisil lowered its growth forecast to7 per cent for fiscal 2018, down from 7.4 per cent earlier, as it sees disruptions arising from the implementationof the new uniform tax regime to continue to impact the economy for a few more quarters.– (FE Sep 5, 2017 p 2)

"A debt overhang" – India's growing twin balance sheet problems of non-performing assets with banks andover-leveraged companies could stifle economic growth in the medium- to long-term. A graphical report.– (BusT 26(18) Aug 28-Sep 10, 2017 pp 30-31)

"Fiscal deficit touches 92% of BE at July-end" – India's fiscal deficit at July- end touched 92.4 per cent ofthe Budget Estimates (BE) mainly because of front-loading of expenditure by various government departments.In absolute terms, the fiscal deficit - difference between expenditure and revenue - was Rs.5.04 lakh croreduring April-July 2017-18, according to the data of Controller General of Accounts (CGA). A report.– (BS Sep 1, 2017 p 4)

"GDP dip in face of global recovery worrying: Rajan" – It is a matter of concern that India's economy isslowing down even as the global environment is picking up, according to the former RBI Governor RaghuramRajan. The twin balance-sheet problem, demonetisation and GST implementation are responsible for theslowdown in GDP growth, but going forward, we should see private investment pick up and the economyrebound. – (HBL Sep 7, 2017 p 1)

"GDP growth to pick up, as GST impact fades: Report" – Economic activity in the country lost some paceamid GST related disruptions but underlying growth momentum remains strong and the country may clock6.7% growth this fiscal, according to a Morgan Stanley report. – (BS Sep 7, 2017 p 4)

"Govt taking steps to deal with economic slowdown: Sanyal" – Edited excerpts from an interview withSanjeev Sanyal, principal economic advisor, ministry of finance. – (Mint Sep 7, 2017 p 18)

"Growth rate slips in first quarter FY18" – India's economic growth plunged to 5.7 per cent in the firstquarter of FY18, underlining the disruption in economic activity caused by demonetisation and the shift to thegoods and services tax (GST) regime. Gross domestic product (GDP) had grown by a healthy 7.9 per cent inthe first quarter of FY17. A graphical report. – (BS Sep 4, 2017 p 4)

"India's economy: Drifting apart" – India's poorer states ought to be closing in on richer ones. Why are theynot? An article. – (Eco 424(9056) Sep 2-8, 2017 pp 55-56)

"Meet the economist who correctly predicted 5.7% GDP growth in Q1" – Edited excerpts from aninterview with Hugo Erken, senior economist at Rabobank's RaboResearch Global Economics & Markets.– (Mint Sep 1, 2017 p 7)

"UBS lowers India growth forecast to 6.6% for FY18" – Global brokerage firm UBS has lowered India'sGDP growth forecast to 6.6% for this fiscal from 7.2% earlier. The brokerage said that the growth isexpected to pick up in coming quarters as the economy normalises post implementation of the GST. 'We arerevising down our forecasts for India GDP growth to 6.6% year-on-year and 7.4% year-on- year in 2017-18and 2018-19, respectively (as against our earlier estimates of 7.2% and 7.7%),' said the report , it, however,said the structural growth story of the country remains intact thanks to the ongoing reform push. A report.– (FE Sep 4, 2017 p 1)

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"We are on the path to achieving 3.2% fiscal deficit target: Garg" – Edited excerpts from an interviewwith Subhash Chandra Garg, Secretary, Economic Affairs. – (Mint Sep 1, 2017 p 11)

Ahluwalia, Montek Singh – "The slow growth in the first quarter is a warning signal" – We need to paymore attention to underlying weaknesses rather than short-term phenomena like demonetisation and thegoods and services tax. An article. – (Mint Sep 7, 2017 p 17)

Chakravarty, Manas – "Indian economy: One bull and three bear scenarios" – An article.– (Mint Sep 5, 2017 p 7)

Ghosh, Soumya Kanti – "A low growth, low inflation phase" – While it is imperative to stick to the path offiscal consolidation, there is no harm if the government spends the possible windfall arising out of GST onpushing capital expenditure rather than shoring up the revenue mobilisation numbers. An article.– (BS Sep 5, 2017 p 8)

Layak, Suman and Goyal, Malini – "How gross is the domestic product?" – The economy was in troublebefore demonetisation and GST came along. The potential long-term game changers may have only aggravatedthe situation. An article. – (ET Sep 3 - 9, 2017 pp 4-6)

Ranade, Ajit – "Economy outlook still cloudy" – An immediate stimulus is needed to regain the momentumto get India back to 8% growth. An article. – (H Sep 4, 2017 p 8)

BLACK MONEY"FinMin sends reports on black money to parliamentary panel" – The finance ministry has sent three

study reports on the quantum of black money held by Indians inside the country and abroad to a parliamentarypanel, more than three years after they were submitted to the government. – (Mint Sep 5, 2017 p 17)

CURRENCY MARKET"Has RBI got its strategy on exchange rates wrong?" – The accumulation of foreign exchange by the

RBI in the recent past does not appear excessive when compared to historical trends. A report.– (Mint Sep 7, 2017 p 8)

ECONOMIC REFORMS"Bold new India: There are many more years of growth" – Edited excerpts from the discussion with

Kalpana Morparia; N Venkatram; Uday Kotak; Bhavish Aggarwal; Vijay S Sharma; Cyril Shroff. GST willbring many more Indians into the tax net, the insolvency law will move power to the creditor from the debtor,and demonetisation has the power to reveal the money trail. We just need to implement reforms in earnest,feel participants at the ET CEO Roundtable. Edited excerpts from the discussion. – (ET Sep 1, 2017 pp 6-7)

"Give states more power to implement policy: Jalan" – Excerpts from an interview with Bimal Jalan,Former Governor, Reserve Bank of India. Former RBI governor, is optimistic about the future of economicreforms but argues for more decentralisation for better implementation of policies. In his new book' IndiaPriorities for the Future' Jalan outlines the strategy for reforms for the years ahead. – (TI Sep 4, 2017 p 17)

FOREIGN EXCHANGE RESERVESBhattacharya, Himadri – "Forex reserves can be managed better" – The RBI annual report points to

high investments in dollar assets and illiquid securities, raising currency and liquidity risks. An article.– (HBL Sep 5, 2017 p 8)

INCOME INEQUALITY"India goes to Billionaire Raj from British Raj" – Inequality in India may be at its highest level since 1922,

when the country's income tax law was conceived, with 22% income accruing to the top 1% income earners,a new paper released by economists Thomas Piketty and Lucas Chancel showed. 'The top 1% of earnerscaptured less than 21% of total income in the late 1930s, before dropping to 6% in early 1980s and rising to

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22% today,' said the paper titled 'Indian income inequality, 1922-2014: From British Raj to Billionaire Raj?', arevised version of which was released on Tuesday. Incidentally, the 1970s and the 1980s, when incomeinequality is shown to have fallen to the least was the period when India's GDP and per capita income growthrates fell to one of the lowest levels. The trend in India is in line with the experience of other major economies.The paper shows that between 1980 and 2014, income of top 0.1% income earners in France and China rosesix times faster than the income of bottom 50%. In India, the growth rate of top 1% was 13 times higher,while it was nearly 77 times higher in the US. A report. – (TI Sep 7, 2017 p 22)

NITI AAYOG"Need to create a 'Bharatiya development model: New NITI Aayog chief says textile, tourism, agro-

processing to drive job creation" – There is a need to develop a tailor made model of development to suitIndia needs, according to Rajiv Kumar, the new Vice-Chairman of the NITI Aayog. He said, 'My idea is tomake sure that policy making is not an elitist activity...NITI's ideas must be to tap into the ground wisdom andrealities to make its own policies as we move forward. This will make a 'Bhartiya Development Model' thatwill be in touch with the ground realities.' – (HBL Sep 2, 2017 p 4)

"You can't say outsiders don't have stake in system" – Excerpts from an interview with Arvind Panagariya,outgoing Vice Chairman, NITI Aayog. – (TI Sep 1, 2017 p 18)

Mishra, Richa – "I strongly support demonetisation" – NITI Aayog chief Rajiv Kumar says he seeks toadapt global ideas to the Indian context, besides pushing social sector reforms. An article.– (HBL Sep 4, 2017 p 14)

Rao, K Srinivasa – "NITI Aayog can accelerate growth" – MSME sector can be a major partner in theprocess of inclusive growth. An article. – (FE Sep 1, 2017 p 9)

– EMPLOYMENT

"NITI Aayog sets up task force on employment, exports: Report to be submitted by November" – Ina bid to provide a 'major' thrust to job creation by enhancing India's exports, the NITI Aayog has set up a taskforce to be headed by its Vice-Chairman Rajiv Kumar. The task force, which includes government andprivate sector representatives, will submit its report by November. Among other things, the task force willpropose a comprehensive plan of action to generate employment and alleviate under-employment in bothgoods and services sectors and low wages by boosting India's exports in key labour-intensive industries, asper its terms of reference. A report. – (HBL Sep 7, 2017 p 4)

TAXATION"Tax laws outdated: PM" – Prime Minister Narendra Modi has asked a gathering of top-level income-tax

officials to overhaul the old tax structure, as the existing tax laws are over 50 years old and do not fit in withtoday's environment and present economic situation. Modi is backing a major change in the system, whichcould change the entire tax department strategy to nab tax evaders. A report. – (BS Sep 2, 2017 pp 1, 6)

BANKING

GENERAL"Bureaucracy tries to erode RBI governor's powers: Rajan: More clarity about the central bank's

role needed, he writes in 'I Do What I Do'" – Former Reserve Bank of India (RBI) governor RaghuramRajan has reiterated his concerns over the bureaucracy impinging on the powers of the central bank. He hasalso said it should be made clear that the RBI chief is not just another bureaucrat. 'There is a danger inkeeping the position (of the RBI governor) ill defined, because the constant effort of the bureaucracy is towhittle down its powers,' the 23rd RBI governor has written in his book, I Do What I Do. A report.– (BS Sep 4, 2017 pp 1, 6)

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"Focus on cleaning bank books, rather than mergers" – Excerpts from an interview with RaghuramRajan, former Governor, Reserve Bank of India. I wouldn't use mergers to escape the necessity for cleaningup, according to former RBI governor Raghuram Rajan. – (HBL Sep 7, 2017 p 9)

"I left because there was no offer on the table from the govt" – Excerpts from an interview with RaghuramRajan, former Governor, Reserve Bank of India and he was chief economist with the International MonetaryFund and chief economic adviser with the Government of India. What strikes you most about RaghuramRajan is not his academic brilliance, open mindedness or honesty of thought, but how he blends all of thesewith simplicity of expression and disarming humility. Currently Distinguished Service Professor of Finance atUniversity of Chicago Booth School of Business, Rajan is an alumnus of IIT-D, IIM-A and MIT. In hisforthcoming book 'I Do What I Do: On Reforms, Rhetoric and Resolve', Rajan reflects on his RBI stintexactly one year after the self-imposed period of silence. Rajan discusses key ideas in his book, what hethinks of demonetisation and why he is optimistic about the Indian economy. – (TI Sep 3, 2017 p 17)

"In circumstances, RBI has to make decisions that banks skirt: Ultimately, right resolution is tohave bankers make the commercial decisions" – Excerpts from an interview with Raghuram Rajan,former Governor, Reserve Bank of India. – (H Sep 7, 2017 p 13)

"Outlook for Indian banking system stable: Moody's report" – Global rating agency Moody's gave astable outlook to the country's banking system due to the ongoing progress on asset quality front and on betteroperating environment. The rating agency said the outlook for the system is also in line with the stableoutlooks for 10 of the 15 banks it rates. – (FE Sep 1, 2017 p 10)

"Price stability required for sustained economic growth" – Edited excerpts from an interview with Dr CRangarajan, former governor of RBI. – (Mint Sep 7, 2017 p 18)

"Raghuram Rajan opens up" – Extracts from the former central bank governor's new book, I Do What I Do,a compilation of his speeches from his RBI days peppered with telling commentaries. – (HT Sep 3, 2017 p 9)

"Rajiv Kumar is new financial services secy" – The government appointed Rajiv Kumar, a 1984-batch IASofficer from the Jharkhand cadre, as the secretary of financial services due to the superannuation of AnjulyChib Duggal. Asha Ram Sihag has taken over as the secretary of heavy industry. – (FE Sep 1, 2017 p 2)

ALLAHABAD BANK"Allahabad Bank cuts MCLR" – Allahabad Bank has reduced its marginal cost of funds-based lending rate

(MCLR) by five basis points across all tenors effective September 1. Post revision, the overnight MCLRstands at 7.95 per cent (8 per cent), one month at 8.05 per cent, three months at 8.25 per cent, and six monthsat 8.35 per cent. The one-year, two-year and three-year MCLRs post revision stands at 8.45 per cent, 8.65per cent and 8.7 per cent, respectively. – (HBL Sep 2, 2017 p 5)

AXIS BANK"12 firms, part of RBI second list, owe Axis Bank Rs.2,492 cr" – Axis Bank said 12 companies - part of

Reserve Bank of India's (RBI) second list of defaulters - owe it Rs.2,492 crore. While Rs.1,843 crore is inthe form of funds-based exposure, the rest was not based on funds. The bank said in a regulatory filingaround 75% of the outstanding is secured and the bank has already set aside Rs.862 crore as provisions.– (FE Sep 2, 2017 p 10)

BANK OF MAHARASHTRA"BoM waives processing fee on home, vehicle loans till Dec 31" – Bank of Maharashtra has completely

waived processing fees on Home and Vehicle loans effective from September 1, 2017 till 31st December2017. The Bank also offers zero processing fees when someone transfers a home loan from another bankduring this festive offer period. These concessions are offered to enhance Bank's retail portfolio during theensuing festival season. – (IE Sep 3, 2017 Pt.II p 3)

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CANARA BANK"Canara Bank cuts savings deposit rate" – Canara Bank has reduced interest rate on savings bank accounts

by 50 basis points to 3.5 per cent on deposits of up to Rs.50 lakh. However, the bank will continue to pay 4 percent interest on deposits of above Rs.50 lakh. – (FE Sep 2, 2017 p 10)

DENA BANK"Dena Bank cuts MCLR by 15 bps" – Dena Bank said it has reduced its marginal cost of funds-based

lending rate (MCLR) by 15 basis points across one year, six months, three months and one month with effectfrom September 1. Following the cut, the benchmark one-year MCLR now stands at 8.40 per cent.– (HBL Sep 2, 2017 p 5)

FEDERAL BANKBapna, Amit and Balakrishnan, Ravi – "Laugh, click and bank" – Federal Bank has hit the market with

everything from funny ads to bank accounts via selfie. Sound strategy or bandwagon hopping? FederalBank's comeback campaign is hoping to move the needle from a strong regional play to a larger footprint. Anarticle. – (ET Sep 7, 2017 Supl. p 3)

HDFC BANK"HDFC Bank joins RBI's 'too-big-to-fail' lenders list" – HDFC Bank Ltd has been declared a domestic-

systemically important bank (D-SIB), according to the Reserve Bank of India (RBI). With this, the bank hasjoined State Bank of India (SBI) and ICICI Bank Ltd, which have been tagged as D-SIBs, or 'too-big-to-fail'for the third consecutive year. Such classification means the collapse of these lenders could have a cascadingimpact on the entire financial system and the economy. Considering their status, D-SIBs are mandated tomaintain a progressively higher share of risk-weighted assets as tier-I equity, which is a measure of the bankcore capital. In case of HDFC Bank, the additional capital surcharge will be applicable from 1 April 2018.– (Mint Sep 5, 2017 p 6)

IDBI BANK"IDBI Bank cuts MCLR by 10 bps to 8.55%" – IDBI Bank reduced its one-year marginal cost of funds-

based lending rate (MCLR) by 10 basis points (bps) to 8.55%. The bank also slashed MCLRs for othertenures by 5-10 bps and said in a statement that the reduction in MCLR was expected to positively impactloan growth, thereby supporting the growth impulses in the economy. – (FE Sep 7, 2017 p 10)

INDIAN BANK"Indian Bank plans FPO by year end, starts roadshow in Hong Kong" – Indian Bank Ltd is considering

making a follow-on public offering (FPO) in the last quarter of the current fiscal, two people close to thedevelopment said. The bank plans to raise around Rs.1,400 crore to strengthen its capital base and reducegovernment shareholding. 'The bank wants to bring down government's stake from 82% to 75%,' the firstperson cited above said, declining to be named. The move will help the bank strengthen its capital base.– (Mint Sep 1, 2017 p 3)

"Indian Bank revises FCNR(B) rates" – Indian Bank has revised the interest rates on foreign currencynon-resident banking deposits with immediate effect. For FCNR (B) deposits, in dollar terms, the interestrate has been fixed at 2.44 per cent for deposits of one year and above but less than two years from theexisting 2.45 per cent. For deposits of two years and above but less than three years, interest rates have beenfixed at 2.56 per cent from existing 2.60 per cent. – (FE Sep 2, 2017 p 10)

KARNATAKA BANK"Karnataka Bank's Mahila Udyog loan" – Karnataka Bank has reduced the rate of interest on its KBL-

Mahila Udyog scheme by 30 basis points with effect from September 1. – (HBL Sep 5, 2017 p 7)

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KARUR VYSYA BANK"P R Seshadri is MD & CEO of KVB" – P R Seshadri has assumed charge as the Managing Director and

Chief Executive Officer of Karur Vysya Bank. Seshadri, a senior banker with over 25 year's experience,started his banking career with Citibank in early 1992. – (HBL Sep 5, 2017 p 7)

PUNJAB NATIONAL BANK

– DEFAULTERS

"PNB draws up defaulter list in addition to RBI's" – Punjab National Bank is drawing up a list of defaultersit plans to refer to the National Company Law Tribunal (NCLT), in addition to the list it has received from theReserve Bank of India, to expedite its bad loan recovery process, according to a senior official with directknowledge of the development. The list will include borrowers with outstanding between Rs.500 crore andRs.5,000 crore. A report. – (FE Sep 2, 2017 p 10)

– LOAN PRICING

"PNB cuts MCLR, base rate" – Punjab National Bank (PNB) has reduced its Marginal Cost of FundsBased Lending Rate (MCLR) by 20-25 basis points with effect from September 1 (Friday). The publicsector lender has also reduced its base rate by 20 basis points from 9.35 per cent to 9.15 per cent with effectfrom September 1. As regards MCLR, the overnight rate has been reduced from 8 per cent to 7.75 per cent.The MCLR rates for all the other tenors - one month, three month, six month, one year, three years and fiveyears - have been reduced by 20 basis points. – (HBL Sep 1, 2017 p 6)

SOUTH INDIAN BANK"Internal probe reveals Rs.32-cr fraud at SIB: Due-diligence process overlooked; recovery steps

initiated, says Kerala-based bank" – South Indian Bank (SIB) said an internal investigation has unearthedcertain irregularities, including misappropriation of funds at one of its branches, involving an amount of aboutRs.32 crore. – (HBL Sep 2, 2017 p 5)

STATE BANK OF INDIA"SBI announces festive bonanza for retail customer" – State Bank of India (SBI), country's largest

commercial bank announces waiver of upto 100% processing fee on car loans, personal gold loans andpersonal loans. This is in addition to the existing waiver on processing fee on takeover of home loans.– (HBL Sep 1, 2017 p 2)

"SBI launches chatbot to assist customers" – State Bank of India (SBI) has enabled a chatbot to fieldqueries on the bank's retail products from visitors to its website. Named SBI Intelligent Assistant (SIA), thebot responds to customer inquiries on home loans, education loans, car loans, personal loans, recurring depositsand term deposits. Chatbots are digital robots that can carry on a conversation through audio or text.– (FE Sep 1, 2017 p 10)

"State Bank of India won the Best Bank Award" – State Bank of India won the 'Best Bank Award for Useof Technology for Financial Inclusion' and 'Best Bank Award for Electronic Payment Systems', among LargeBanks, in IDRBT Banking Technology Excellence Awards held on 1st September, 2017 in IDRBT, Hyderabad.– (BS Sep 7, 2017 p 12)

"State Bank plans $3-b green bonds" – India's largest lender plans to raise up to $3 billion in the country'sbiggest overseas green-bond issue, tapping the likes of BlackRock, International Finance Corp and JPMorgan-backed entities for funding projects that will help achieve the government's commitments toward sustainablegrowth. A report. – (ET Sep 4, 2017 p 1)

"What corporate leaders say: State Bank of India" – NPA watchlist for fiscal 2018: Power, telecom majorculprits. A report. – (CI 10(11) Aug 1-15, 2017 p 12)

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SYNDICATE BANK"As experienced staff superannuate, Syndicate Bank mulls succession plan: A scheme where junior

officers will be rigorously trained by seniors is in the works: MD" – Syndicate Bank, which is facingsuperannuation of experienced staff and officers in large numbers, is putting in place a succession plan tostay competitive. The bank has a total work force of over 34,000, comprising both staff and officers. Fifty percent of them are officers. – (HBL Sep 2, 2017 p 5)

"Syndicate Bank withdraws 'no work, no pay' missive" – Syndicate Bank has ordered the withdrawal ofits 'no work, no pay' notice. 'This (notice issuance) was done at the regional level. It is not within the powersof the official concerned to issue such a communication. It has been withdrawn,' according to M Rego,managing director and chief executive officer of the bank. This comes after the UCO Bank's zonal office inKolkata decided not to give salaries to its employees in that zone for non-performance. The decision wasreversed after the top management stepped in, following pressure from unions last week.– (BS Sep 4, 2017 p 3)

TAMILNAD MERCANTILE BANK"TMB gets new MD & CEO" – K V Rama Moorthy has assumed charge as Managing Director and Chief

Executive Officer of Tamilnad Mercantile Bank. Prior to joining TMB, he was Executive Director of UnitedBank of India. – (HBL Sep 5, 2017 p 7)

UCO BANK"Did not stop staff salaries: UCO Bank management" – The UCO Bank management has clarified that

the bank had not ordered stopping salary to staff members of certain branches in Kolkata, as is being wronglyreported. In a circular to all branches and offices on September 2, the management took objection to messagesto the contrary circulating in the social/print media. – (HBL Sep 5, 2017 p 7)

"UCO Bank's plan to stop salary to non-performers meets tame end" – The loss-making UCO Bankappears desperate in its turnaround quest. In a bizarre note to the personnel services department, one of thebank zonal heads had requested suspension of salary payments to 11 branches on grounds of non-performance.The proposal was promptly shot down by the management, but not before it created enough noise and causedemployees to panic. There is no such provision to stop monthly pay-cheques due to non-performance inpublic sector banks, where salaries and increments are fixed through a bipartite settlement between themanagements and staff unions. Wages can be deducted only in case of unauthosised absence, as on days ofindustrial action and strikes. – (ET Sep 2, 2017 p 6)

UNION BANK OF INDIA

– RECOVERY OF NPAs

"Union Bank taking the app route to recover bad loans: Targets stressed accounts below Rs.5crore" – Union Bank of India is making the most of technology for recovery of non-performing assets(NPAs). In this regard, it launched a mobile-based application (app) for its officers a few days ago. Byentering the postal pincode of the area in the app, the bank officer gets all the details about the borrowers anddefaulting accounts under the limits of that particular pincode. – (HBL Sep 1, 2017 p 6)

UNITED BANK OF INDIA"United Bank board okays Rs.4,800-cr capital mop-up" – United Bank of India is looking to raise close to

Rs.4,800 crore through Tier-I and Tier-II bonds and equity capital augmentation. – (HBL Sep 7, 2017 p 6)

VIJAYA BANK"Vijaya Bank raises Rs.700 cr via QIP" – Vijaya Bank has finalised the allocation of 11.10 crore shares

thereby completing the qualified institutional placement (QIP) successfully. The bank, through QIP route, hasraised Rs.700 crore. The allocation of equity shares was done across a diverse set of investors at Rs.63.05

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per share. The QIP was launched on August 28 for the issue size of Rs.450 crore with a greenshoe option ofRs.250 crore. With the fresh augmentation of common equity tier I capital of Rs.700 crore, the bank will havea comfortable CRAR of 13.48 per cent. – (HBL Sep 2, 2017 p 5)

YES BANK"IIM-Lucknow, Yes Bank tie up for climate awareness" – Indian Institute of Management Lucknow

(IIM-L) and Yes Bank are signing a charter to help spread 'Climate Literacy,' aiming to achieve sustainabledevelopment through shared learning. The bank will support IIM-L in updating its two-year course curriculum.– (ET Sep 5, 2017 p 8)

"Yes Bank partners Samsung for tap and pay" – Yes Bank has partnered Korean handset maker Samsungto enable its credit card holders use the tap and pay option at merchant outlets. The bank, which entered thecredit cards space last year, said all its credit cards are now available on the Samsung Pay platform. To driveuser engagement, it has also announced offers like a cashback of up to Rs.1,500 per card for usage tillSeptember 30. – (FE Sep 7, 2017 p 10)

AUSTRALIA"Banking in Australia: Cuckoo in the nest" – A big lender is accused of letting its deposit machines serve

as laundromats. An article. – (Eco 424(9053) Aug 12-18, 2017 pp 56-57)

CHINA"Chinese monetary policy: Dynastic equilibrium" – Citing an ancient emperor, China modernises its interest-

rate system. An article. – (Eco 424(9054) Aug 19-25, 2017 pp 58, 60)

RUSSIA"Russian banking: Too close to the sun" – A central-bank rescue for Otkritie Bank. An article. – (Eco

424(9056) Sep 2-8, 2017 p 58)

USA"US banks use secured lending to steer clear of retail losses" – US banks have moved to limit their

exposure to the country's troubled bricks and mortar retailers, allowing them to sidestep losses in spite of aspate of recent failures in the sector. Lenders are increasingly insisting on financing retail companies throughso-called asset-based loans, a type of financing once regarded by some executives as a last resort fordistressed borrowers. A report. – (FT Aug 29, 2017 p 14)

– FEDERAL RESERVE

"Fed Vice Chair Fischer resigns, says economy is stronger" – Federal Reserve Vice Chairman StanleyFischer has resigned effective on or around Oct. 13 after serving three years at the U.S. central bank.Fischer, 73, was appointed to the Fed by President Barack Obama in 2014 to a term as vice chair that wouldhave expired in June 2018. He cited 'personal reasons' in a Sept. 6 resignation letter to President DonaldTrump. – (ET Sep 7, 2017 p 8)

"The Fed's next chair: Rate race" – Who will be the next head of the Federal Reserve? An article.– (Eco 424(9053) Aug 12-18, 2017 pp 54-55)

"Yellen warns opponents of tighter financial rules to remember lessons of crisis" – Janet Yellen steppedup the Federal Reserve defence of regulatory reforms pushed through after the great financial crisis, in theface of claims from some Republican lawmakers that the regime is stifling the economy. A report.– (FT Áug 26-27, 2017 p 3)

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BANCASSURANCE"Mis-selling of insurance products by banks on the rise: Bank employees lack of understanding of

the products a key reason, say experts" – According to industry experts, instances of mis-selling areexpected to rise under the open architecture model, where a bank can have tie-ups with up to three insurers- in the life, non-life and health segments A report. – (HBL Sep 5, 2017 p 7)

BANK CONSOLIDATION

– PUBLIC SECTOR BANKS

"Centre tells PSBs to begin merger process 'immediately': Waives need for Competition Commissionclearance" – The Centre dashed off a letter to public sector banks asking them to start the merger processimmediately and their respective boards to take up the issue. The government said the approval requirementof Competition Commission to expedite mergers among PSBs had been done away with. A report.– (H Sep 2, 2017 p 13)

"FinMin writes to heads of PSU banks on consolidation" – The finance ministry has written letters to allheads of PSU lenders informing them the government's decision to set up a ministerial panel to facilitateconsolidation in the public banking space. A formal communication to CEOs of the banks from the Departmentof Financial Services last week has set in motion the consolidation process, according to a senior financeministry official. The government has been nudging the state-owned lenders to go for merger so that therecan be fewer and stronger banks. A report. – (BS Sep 4, 2017 p 4)

"No CCI nod for PSB mergers" – The government has exempted mergers of nationalised banks fromseeking CII's approval. In a notification dated August 30, 2017, the government said it has exempted, in thepublic interest, 'all cases of reconstitution, transfer of the whole or any part thereof and amalgamation ofnationalised banks, under the Banking Companies (Acquisition and Transfer of Undertakings) Act, from theapplication of provisions of Sections 5 and 6 of the Competition Act, 2002 for a period of ten years'.– (IE Sep 1, 2017 p 13)

"PSBs told to approach 'Alternative Mechanism' to fast-track mergers: The mechanism, comprisingof a panel of ministers, will give go-ahead to consolidation plans & also oversee the process" –Public sector banks looking to merge would have to approach the new alternative mechanism once theyinformed the stock exchanges about the plan. 'This will ensure that all issues related to consolidation from thegovernment, the promoter and regulator RBI are addressed from the beginning,' according to a seniorgovernment official. This would also expedite decision-making and address issues well in time, the officialadded. A report. – (ET Sep 4, 2017 p 9)

Adhikari, Anand – "PSB Mergers: Marriage season" – After the bold merger of SBI and its five associatebanks, the government is gearing up to create four-five large PSBs. It will not be easy. An article.– (BusT 26(18) Aug 28-Sep 10, 2017 pp 32-36)

Saha, Manojit – "Banks' cuppa to brew with mergers" – Worsening asset quality turns an opportunity forthe government to push for consolidation. An article. – (H Sep 4, 2017 p 14)

BANK LENDING"Non-food bank credit growth slows to 7.08%" – Growth in the non-food bank credit slowed to 7.08%

year-on-year (y-o-y) during the fortnight ended August 18 from a five-month high of 7.42% in the previousfortnight. The corresponding figure in the year-ago period was 9.3%. According to provisional data releasedby the Reserve Bank of India (RBI), outstanding loans to companies and individuals fell to Rs.76.5 lakhcrore, from Rs.76.74 lakh crore a fortnight ago. A report. – (FE Sep 1, 2017 p 10)

– 10 –

BANKING REGULATOR

– DEMONETISATION

"How demonetization was unprofitable for RBI" – While the jury is out on the costs and benefits ofdemonetisation, for the Reserve Bank of India (RBI) at least, the note ban was one of the key reasons forlower profits. To that limited extent, the government also had to bear the brunt in the form of the lowerdividend it received from the central bank. RBI paid only Rs.30,663 crore as dividend compared to Rs.65,880crore a year ago. RBI's extra interest expenses of Rs.17,426 crore, the extra printing cost of Rs.4,545 croreand provision of Rs.13,100 crore together make up just about the Rs.35,217 crore decrease in net profit.– (Mint Sep 1, 2017 p 7)

– RESERVE BANK OF INDIA

"The journey so far" – The Reserve Bank of India's 24th governor Urjit Patel completes one year in officetoday. For someone who took charge at a time when economic indicators were benign, Patel's term has beenmarked by landmark events like demonetization, implementation of the insolvency and bankruptcy code, andthe debut of the monetary policy committee. A report. – (Mint Sep 4, 2017 p 7)

"Patel navigates the most difficult year in RBI history" – A report. – (BS Sep 4, 2017 p 4)

"RBI union slams moves for 'enhanced transfers' to Centre" – Reported moves to force the ReserveBank to part with 'enhanced transfers' to the Centre has invited sharp criticism from the All India ReserveBank Employees' Association (AIRBEA). The Association has denounced the statement of Subhash Garg,Secretary, Economic Affairs, saying that the Centre proposed to discuss with the RBI the scope for furthertransfers. – (HBL Sep 7, 2017 p 6)

"RBI's return on foreign currency assets down at 15-year low of 0.80%: Income from foreign sourcesfell by 35.27% from Rs.28,713 crore in 2015-16 to Rs.18,586 crore in 2016-17" – The ReserveBank of India (RBI) earned a return of 0.80 per cent return - the lowest in the last 15 years - on its hugeforeign currency assets of Rs.23,68,683 crore invested in various securities, other central banks and commercialbanks abroad during the 12-month period ended June 2017. The income from foreign sources fell by 35.27per cent from Rs.28,713 crore in 2015-16 to Rs.18,586 crore in 2016-17 mainly on account of the appreciationof the rupee and reduced premium income on the swaps that are in the nature of repo, the RBI said in itsAnnual Report for 2016-17. – (IE Sep 5, 2017 p 13)

"Urjit Patel's tumultuous first year as RBI governor" – Urjit Patel completes a year as the governor of theReserve Bank of India (RBI). It has been a period of tumultuous change in monetary and banking policy,including the demonetisation exercise and the central bank stepping in directly to deal with bank bad loans.Along the way, Patel and RBI had to face questions on whether the central bank's autonomy has beeneroded, with their acquiescence to the government's demonetisation move being part of it. A report. – (MintSep 4, 2017 p 1)

Bandyopadhyay, Tamal – "Urjit Patel: A governor who doesn't talk but acts" – An article.– (Mint Sep 4, 2017 p 7)

Venkatesh, Latha – "RBI governor Patel's first year: A+ for tackling NPAs" – An article.– (Mint Sep 4, 2017 p 11)

– RESERVE BANK OF INDIA - PENSION UPDATION

"Rajan regrets he didn't do what he could for RBI retirees: Expresses hope the government will dothe 'right thing'" – Raghuram Rajan may not be RBI Governor any more but he might just have sown freshhopes in the minds of Reserve Bank retirees that their long-pending demand for pension updation would geta fresh look-in. The hopes stem from the former Governor's expression of regret in his book, I do what I do, for his failure to do what he probably could, with respect to pension updation in the RBI.– (HBL Sep 7, 2017 p 6)

– 11 –

BANKING REGULATOR - RBI

– DEMONETISATION

Bhoi, Barendra Kumar – "How RBI profit got depleted by demonetisation" – By keeping the interestrate on Standing Deposit Facility at a level much below the reverse repo rate, RBI could have spent less andencouraged commercial banks to be less risk-averse, if not lazy. An article. – (FE Sep 1, 2017 p 9)

CENTRAL BANKSEl-Erian, Mohamed – "Yellen and Draghi had good reason for Jackson Hole reticence" – An article.

– (FT Aug 29, 2017 p 18)

COOPERATIVE BANKS

– INVALIDATED CURRENCY NOTES

"Invalid notes worth Rs.147 cr still being held by cooperative banks" – Reserve Bank of India's estimateon invalidated notes received after demonetization may still be incomplete, as high-value notes continue to liewith a few cooperative banks, according to three people aware of the matter. – (Mint Sep 1, 2017 p 7)

– SARASWAT CO-OPERATIVE BANK

"Saraswat Bank's special dividend" – Saraswat Co-operative Bank has declared a special dividend of 15per cent for fiscal 2016-17 in view of the bank entering its centenary year on September 14, 2017.– (HBL Sep 7, 2017 p 6)

CURRENCY NOTES

– DEMONETISATION

"Demonetisation had many pluses too: Ex-RBI Deputy Governor" – Stopping tax evasion and a pushtowards the digital mode were the unannounced objectives behind demonetisation, according to RamaSubramaniam Gandhi, a former Deputy Governor of the Reserve Bank of India. A report.– (HBL Sep 4, 2017 p 17)

"Demonetisation revisited" – Assessing the impact of the note ban should extend beyond calculating theamount of currency that returned to the system. An editorial. – (HBL Sep 1, 2017 p 8)

"Indian demonetisation: Paint it white" – No windfall from stashed cash. An article.– (Eco 424(9056) Sep 2-8, 2017 p 57)

"The lessons of demonetization" – A good policy should take into account how people will respond to anychange in the rules of the game. An article. – (Mint Sep 1, 2017 p 14)

"No information on black money stamped out by note ban: RBI" – The Reserve Bank of India (RBI) hastold a parliamentary panel that it has 'no information' on how much black money has been extinguished as aresult of demonetization of Rs.500/1,000 notes or about unaccounted cash legitimized through exchange ofcurrency post note-ban. Stating that an estimated Rs.15.28 trillion in junked notes has come back 'subject tofuture corrections based on verification process', the RBI also said it has 'no information' whether demonetizationis being planned to be implemented at regular intervals. – (Mint Sep 5, 2017 p 17)

"Rajan says he was not on board for demonetisation" – Former RBI governor Raghuram Rajan hasrevealed that he did not favour demonetisation as he felt the short term economic costs associated with sucha disruptive decision would outweigh any longer term benefits from it. Rajan makes the disclosure in his latestbook - I Do What I Do - which is a compilation of speeches he delivered on wide range of issues as the RBIgovernor. – (HT Sep 3, 2017 p 1)

– 12 –

Mahapatra, Rajesh – "If RBI didn't, who went for note ban? And Why?" – Former RBI GovernorRaghuram Rajan's book suggests the government chose to ignore the collective wisdom and cautions advancedby the central bank. An article. – (HT Sep 3, 2017 p 10)

Nageswaran, V Anantha – "Demonetization will cost more than slow growth" – An article.– (Mint Sep 5, 2017 p 14)

Sriram, R – "Note Ban is a success: Here is how" – An article. – (ET Sep 1, 2017 p 3)

CUSTOMER PROFILE

– DIGITAL TECHNOLOGY

"BoB, Federal Bank hope to catch them young: Two banks adopt two different strategies to reachthe same demographic, but both get more aggressive with advertising and promotions" – When arecent survey informed the top team at Bank of Baroda (BoB) that close to 70 per cent of its customer basewas less than 40 years of age, it took everyone by surprise. While there was a growing realisation that thebank's customer profile was rapidly changing, the survey set things clearly in perspective. At another bank,another survey served a similar purpose: The majority, around 55 per cent, of the transactions being conductedwith Federal Bank was via the digital route. For the bank, this was a signal to focus its branding initiativesaround the digital consumer, largely the under-40 age group. A report. – (BS Sep 5, 2017 Pt.II p 6)

DIGITAL PAYMENTS"Digital payments see traction in August aided by rise in UPI usage" – Digital transactions in August

increased slightly from the previous month in terms of both value and volume, provisional data released by theReserve Bank of India (RBI) showed. The month saw total digital transactions worth Rs109.82 trillion, up2.27% from Rs.107.38 trillion in July, according to the data. – (Mint Sep 7, 2017 p 6)

Kaushal, Tapan – "Prospect and future of electronic payment in cashless economy" – An electronicwallet is a virtual or a cashless service used as a substitute for physical cash. The Digital India program is aflagship program of the Government of India with a vision to transform India into a digitally empoweredsociety and knowledge economy. 'Faceless, Paperless, Cashless' is one of apparent role of Digital India.Cashless India is a mission launched by the Government of India led by Prime Minister Narendra Modi toreduce dependence of Indian economy on cash and to bring hoards of stashed black money lying unused intothe banking system. The country embarked upon this evolution to a cashless economy when the governmenttook the world-shattering step of demonetization of old currency notes of Rs.500 and Rs.1,000 on November08, 2016. However, after the demonetization of the currency notes of Rs.500 and Rs.1,000, the country haswitnessed a heave in cashless transactions through the digital mode, be it through credit/debit cards, mobilephone applications, Unified Payments Interface (UPI), BHIM (Bharat Interface for Money) app underAadhaar Enabled Payment System (AEPS) or e-wallets etc. Up until this campaign, India was an incrediblycash-centric economy. An article. – (SE 56(8) Aug 15, 2017 pp 31-36)

– BHARAT QR SERVICE

"50 large utility providers enable BharatQR service" – In a move to extend digital payments services tomore than 300 million consumers, global payments firm Visa and electronic payments company BillDeskhave enabled 50 large service providers for BharatQR payments acceptance in less than a month's time.– (Mint Sep 7, 2017 p 8)

DOMESTIC SYSTEMICALLY IMPORTANT BANKSIyer, Aparna – "Does India really need to identify too-big-to-fail banks?" – An article.

– (Mint Sep 7, 2017 p 4)

– 13 –

EXECUTIVE APPOINTMENTS

– PUBLIC SECTOR BANKS

"PSB chiefs' selection may be put on hold amid merger push" – The government will likely impose atemporary halt on the selection of state-run bank chiefs as it looks to push lenders toward consolidation. Itmay also review the performance of bank managing directors with those who don't score too well beingasked to improve or quit, said a finance ministry official, who did not want to be named. Consolidation won'tmean people losing their jobs. 'It has been clarified that there will be no loss of jobs at any level. If two banksmerge, the existing managing director of one of the PSBs (public sector banks) will stand eligible for a similarvacancy in another bank,' according to the ministry official. – (ET Sep 2, 2017 p 4)

FINANCIAL REGULATORS

– TWIN BALANCE SHEET PROBLEM

"SEBI, RBI working to resolve twin balance sheet problem" – The Securities and Exchange Board ofIndia (Sebi) and the Reserve Bank of India (RBI) are working together to resolve the twin balance sheet(TBS) problem, said Ajay Tyagi, chairman of Sebi. 'This is one issue (twin-balance sheet problem) whichneeds to be addressed and I feel all regulators need to collectively work to resolve it,' according to Tyagi, whowas speaking at the capital markets summit organised by Ficci in Mumbai. A report. – (IE Sep 7, 2017 p 16)

FOREIGN BANKS IN INDIA"Foreign banks' deposits fell for three quarters post note ban: RBI data" – Deposits with foreign banks

contracted for three quarters following demonetisation, as per RBI data. According to the data, while aggregatedeposits with foreign banks fell 1.4% year-on-year (y-o-y) in the June quarter, total credit feIl 8.5% duringthe same period. The data also indicated that an improvement in deposit growth was observed in urban andmetropolitan areas, while growth in rural deposits declined for the second successive quarter. Bank creditgrowth was higher across all population groups and notably in non-metropolitan areas. Metropolitan branchesand offices constituted around 57% of total business (aggregate deposits and bank credit) of all scheduledcommercial banks, followed by urban branches and offices with a share of less than 20%.– (FE Sep 1, 2017 p 10)

– DBS BANK

"DBS Bank gets RBI nod to shift to subsidiary model in India: Will help grow SME and retail lending,says CEO Gupta" – DBS Bank has received in-principle approval from the RBI to operate a wholly-owned-subsidiary (WOS) in India. DBS Bank currently operates 12 branches in India and these will beconverted to the new model, according to Piyush Gupta, CEO, DBS Group. A report. – (HBL Sep 5, 2017 p 7)

– HSBC

"How do global banks view Indian turf?" – Excerpts from an interview with Hitendra Dave, Head of GlobalBanking and Markets for HSBC, India. – (HBL Sep 4, 20147 p 6)

GLOBAL BANKS

– DIGITAL CASH

"Global banks join project to create blockchain clearing" – The banking sector's efforts to harnessblockchain technology for its own benefit took another step forward as six of the world's biggest lendersjoined a project to create a form of digital cash for clearing and settling financial transactions. Barclays,Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street have teamed up towork on the 'utility settlement coin' which was created by Switzerland UBS to make financial markets moreefficient. A report. – (FT Sep 2&3, 2017 p 11)

– 14 –

IDRBT

– BLOCKCHAIN TECHNOLOGY

"RBI arm to launch model platform for blockchain technology soon" – The Institute for Developmentand Research in Banking Technology (IDRBT), an arm of the Reserve Bank of India, is developing a modelplatform for blockchain technology. A S Ramasastri, Director, IDRBT, said the platform will be suitable fordifferent applications relevant to banking. We will be launching this platform very soon.– (HBL Sep 2, 2017 p 5)

INSOLVENCY AND BANKRUPTCY CODE"IBC proceedings against Jaypee Infratech stayed: Apex court order a relief to home buyers yet to

receive flats" – The Supreme Court stayed insolvency proceedings instituted against real estate firm JaypeeInfratech by the Allahabad Bench of the National Company Law Tribunal. A report. – (H Sep 5, 2017 p 13)

"Welcome support for the new bankruptcy law" – A recent Supreme Court ruling should hopefully minimizethe legal tangles that could emerge in the initial years of transition. An article. – (Mint Sep 7, 2017 p 16)

LOAN PRICINGBasu, Debashis – "How opaque MCLR allows looting of borrowers" – An article.

– (BS Sep 4, 2017 p 11)

MICROFINANCEAnandaraman, R – "Promotion of micro finance among SHGs women through public sector commercial

bank in Tamil Nadu" – Micro finance is one of the most powerful tools provisions of savings, credit,insurances, thrift and mobilization of fund resources, on economic activities among SHGs women. Finance isensuring poverty alleviation mainly contribute promote the socio-economic empowerment of rural self helpgroup women in India. Public sector commercial bank certain help to encouraging and motivation of financialassistance develop uneducated women creativity of employment opportunities among SHGs women.Government of India fully concentrates rural development of economic empowerment increasing microenterprise of SHGs women entrepreneurs in India. NABARD is primary motive of financial institutionsconnectivity of banking linkage provide capital resources such as micro, small medium enterprises disbursedbank loan through various public sector commercial bank in India. Central government primary motive financialgrant as well equipment on economic activities oriented on-site training change the social welfare in ruralbackground areas. An article. – (SE 56(8) Aug 15, 2017 pp 19-25)

MONETARY POLICY"A cut in time" – The RBI's cut in interest rates is a welcome move. An editorial.

– (BI (1026) Aug 24-27, 2017 p 11)

MORTGAGES"Mortgages growth in banks falls to four-year low in July" – Total outstanding on mortgages in the

banking system stood at Rs.8.64 lakh crore as on July 21, data show. A report. – (FE Sep 2, 2017 p 10)

NATIONAL COMPANY LAW TRIBUNAL

– INSOLVENCY AND BANKRUPTCY CODE

"Website launched: NCLT decides on 655 cases under the Bankruptcy Code: Includes over 200cases admitted across various benches of the NCLT" – The National Company Law Tribunal has sofar taken decision on 655 cases under the Insolvency and Bankruptcy Code, according to NCLT PresidentJustice M M Kumar. This number includes over 200 cases that have been admitted across various benchesof the NCLT while the other cases were not admitted for resolution under the law. Insolvency and BankruptcyBoard of India Chairperson M S Sahoo said the objective of the law is to prevent insolvency if possible.– (IE Sep 1, 2017 p 14)

– 15 –

NON-PERFORMING ASSETS"Bad loans of 41 banks may surge to Rs.9 lakh cr by March, says ICRA: Credit rating agency pegs

fresh slippages this fiscal at Rs.3 lakh crore" – Gross non-performing assets (GNPAs) of 41 listedIndian banks are likely to collectively increase to Rs.8.8-9.0 lakh crore by March-end 2018 from Rs.7.65 lakhcrore as at March-end 2017, according to credit rating agency ICRA. The overall GNPAs of theaforementioned banks had increased to Rs.8.28 lakh crore as at June-end 2017. At Rs.1.15 lakh crore, freshnon-performing assets during the June 2017 quarter were the highest in the last five quarters, with slippagescoming in across corporate, medium and small enterprise (MSME) and agricultural segments, said the ratingagency. – (HBL Sep 1, 2017 p 6)

– REAL ESTATE

"Lenders worry over NPAs in realty now" – Bankers have a new worry these days - real estate - afterbeing laid low by infrastructure and steel for more than four years. With the collapse of new projects andmany existing ones getting stuck after the introduction of Real Estate Regulation Act, or RERA, they fear thenext round of bad loans may come from real estate, though banks claimed that have only 5 per cent directexposure to builders. 'We have a few developers in the North who have not been constructing property, or aslowdown in construction has triggered some movement in the NPA category. This is not a significant number,but you do see some stress when these changes happen,' according to P S Jayakumar, MD, Bank of Baroda.A report. – (ET Sep 1, 2017 p 15)

NPA RESOLUTION"Debt distress: As defaults rise, cases accumulate at NCLT: Stressed loans near $10-billion mark;

total bad loans seen at over $130 billion; 250 NCLT cases across 10 benches" – With defaults onloans and corporate bonds nudging $10 billion in 2017 so far and the total quantum of bad loans estimated tohave crossed $130 billion, the number of cases at the National Company Law Tribunal (NCLT) has jumpedto around 250 across 10 benches. At the end of March, fewer than 40 cases had been referred to the tribunal.A report. – (FE Sep 5, 2017 pp 1, 2)

"SC boost for NCLT" – It underlines the need for speedy resolution of bad debts. An editorial.– (FE Sep 5, 2017 p 8)

– BANK CAPITAL

"Defaulters must clear bank dues or cede control: Jaitley: Says govt open to infusing more moneyinto PSBs but getting rid of NPAs top priority" – Finance Minister Arun Jaitley put private sectordebtors on notice, saying they will have to pay their dues to banks or others will step in and take control of thebusinesses. He defended demonetisation, declaring that its impact was along expected lines and the economywill benefit from it in the medium and long term. Using the new bankruptcy law, the RBI has prodded banksto initiate insolvency proceedings against 12 large corporate defaulters to resolve loans of about Rs.2.5 lakhcrore. More defaulters are being notified for action, with ET reporting on August 30 that as many as 50accounts are in line for debt resolution or, failing that, being sent to bankruptcy court. He said the governmentwas open to providing more funds to banks but cleaning up stressed loans was a bigger priority.– (ET Sep 1, 2017 p 1)

– INFRASTRUCTURE SECTOR

"Feedback Infra set to turn around two stressed accounts of banks" – Feedback Infra, a leadinginfrastructure services company that has been approved by the Indian Banks' Association to help banksresolve their problem of non-performing assets, is confident that in the next few months it will be able to turnaround two companies in the infrastructure sector that it has been managing for lenders.– (HBL Sep 7, 2017 p 6)

PAYMENT SYSTEMSGandhi, R – "Payment systems: Next orbit" – An article. – (SE 56(8) Aug 15, 2017 pp 41-43)

– 16 –

PAYMENTS BANKS

– FINO PAYMENTS BANK

"Our first growth target for FY18 is deposits worth Rs.10,000 cr" – Excerpts from an interview withRishi Gupta, MD & CEO, Fino Payments Bank. – (FE Sep 7, 2017 p 10)

"Transition of Fino to payments bank has been smooth, says MD: The bank hopes to serve fivecrore customers over the next 5 years" – It has been a little less than two months since the launch ofFino Payments Bank and Rishi Gupta, the bank's Managing Director and CEO, sounds pleased with the waythe transition has turned out. Just back from a trip to the interior parts of Bihar where Fino has a presence,Rishi says he is encouraged by the increase in banking habits in these un-banked parts of rural India.– (HBL Sep 7, 2017 p 6)

– PAYTM PAYMENTS BANK

"Paytm Payments Bank in talks to partner full-service banks: CEO" – Paytm Payments Bank is in talksto partner with full-service banks to offer services such as loans and term deposits which it cannot do on itsown due to regulatory restrictions, its chief executive told Reuters. 'Anything which we cannot offer, we willbe partnering with the banks. Whether it's going to be a loan, or a credit card, or a term deposit, and otherservices,' according to Renu Satti, CEO of Paytm Payments Bank. – (Mint Sep 1, 2017 p 7)

PRIORITY SECTOR LENDING"Loans to priority sector turn out more creditworthy than corporates" – Priority sector loans, long seen

as a socialist burden on banks, have turned out to be more credit worthy than advances to large corporates.During April-December 2016, banks had written off loans worth Rs.35,587 crore to large industries asagainst write-offs of Rs.32,445 crore of advances in the priority sector. A report. – (TI Sep 4, 2017 p 17)

Mundra, S S – "Priority sector lending: Status, issues and future agenda" – An article.– (SE 56(8) Aug 15, 2017 pp 45-49)

PUBLIC SECTOR BANKS

– LENDING RATES

"Four PSBs cut lending rates by up to 0.45%" – Four public sector lenders, including Indian Bank andVijaya Bank, cut their benchmark lending rates by up to 0.45 per cent. Punjab & Sind Bank reduced theovernight marginal cost of funds based lending rate (MCLR) by 0.45 per cent to 8.15 per cent from 8.60 percent. Chennai-based Indian Bank reduced the MCLR across all segments by 0.15 per cent. Vijaya Banktweaked interest rates in two segments, including for one-year tenor which will become cheaper by 0.15 percent to 8.50 per cent. IDBI Bank also reduced MCLR by 5-10 bps across various tenors.– (IE Sep 7, 2017 p 16)

RETAIL LENDING"Fair to assume that retail credit will grow at 20% per annum" – Edited excerpts from an interview with

Vishwavir Ahuja, MD & CEO, RBL Bank; V Vaidyanathan, founder and chairman, Capital First; DinanathDubhashi, MD, L&T Finance Holdings. – (Mint Sep 5, 2017 p 11)

REVERSE MORTGAGEPrabisha A T and Priya, S – "Reverse mortgage loan scheme: A study based on the pros and cons" –

Reverse Mortgage Loan Scheme is aimed to revamp the senior citizens who have properties in hand and areready to mortgage it to generate income out of it. Senior and super senior citizens can have the reversemortgage loan facility if their income from retirement fund is not sufficient to cover their old age expendituresand it benefitted to them as there are no monthly repayments and they can live in the mortgaged properlyitself till the end of their life time. Even though, one can live a more comfortable retirement life with reverse

– 17 –

mortgage loans, the heirs are the responsible one who will have to make the repayments either through thesales proceeds of the mortgaged properly or through the monthly paybacks. An article.– (SE 56(8) Aug 15, 2017 pp 37-40)

RISK RATINGS"Risk ratings: RBI for convergence" – Reserve Bank of India is planning to move towards convergence of

risk ratings. In its Annual Report 2016-17, the RBI said that as part of its agenda for 2017-18, the RiskMonitoring Department (RMD) has launched a project along with the Inspection Department for developinga web-enabled risk reporting and analysis platform - audit management and risk monitoring system (AMRMS).'This is expected to bring about a higher degree of objectivity and consistency in the risk assessment processwithin the Bank through a harmonised risk-rating framework,' according to the RBI report.– (HBL Sep 1, 2017 p 6)

SMALL FINANCE BANKS

– FINCARE SMALL FINANCE BANK

"Fincare starts operations with 25 branches: The small finance bank raises Rs.225 cr of deposits onlaunch day" – Fincare Small Finance Bank, earlier known as Disha Microfin, kickstarted its banking operationswith about 25 branches across Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh. The bank was givensmall finance bank (SFB) licence by the RBI in May this year. On the day of its launch, the bank raised overRs.225 crore of deposits from about 1,000-odd depositors. This forms about 15 per cent of the bank's existingbalance sheet of Rs.2,000 crore, which includes Rs.1,350 crore as loans and advances and Rs.450 crore asinvestments. Fincare CEO Rajeev Yadav said the bank started its operations with 25 branches, of whichnearly half are located in Gujarat. – (HBL Sep 2, 2017 p 5)

– UJJIVAN SMALL FINANCE BANK

"We are targeting a 20-25% annual growth, says Ujjivan CEO: Newly turned scheduled bank plansto cut down NPAs, launch more products" – Excerpts from an interview with Sudha Suresh, MD &CEO, Ujjivan Financial Services. She said Bengaluru-based microfinance firm Ujjivan Financial ServicesLtd, which transitioned into a Small Finance Bank (SFB) in February this year, has been awarded ScheduledBank status from the RBI. Also she said we have ensured 100 per cent provision of the hard core NPAs ofthe November, December and January loan portfolio amounting to Rs.150 crore. We have dedicated teamson recovery at branches in affected States. – (HBL Sep 1, 2017 p 4)

"We are targeting loan growth of 18-20% in FY18" – Edited excerpts from an interview with SudhaSuresh, MD and CEO, Ujjivan Financial Services. As Ujjivan Financial Services becomes a scheduled bank,its average cost of borrowing will fall by about 200 basis points (bps). – (FE Sep 5, 2017 p 10)

RBI CIRCULARS"Alteration in the name of 'National Bank of Abu Dhabi PJSC' to 'First Abu Dhabi Bank PJSC' in the

Second Schedule to the Reserve Bank of India Act, 1934" – (RBI Circular RBI/2017-2018/53DBR.No.Ret.BC.84/12.07.150/2017-18 dated 07.09.2017)

"Auction of Government of India Dated Securities" – (RBI Circular RBI/2017-2018/51 Ref.No.IDMD/614/08.02.032/2017-18 dated 04.09.2017)

"Inclusion of 'Qatar National Bank SAQ' in the Second Schedule to the Reserve Bank of India Act,1934" – (RBI Circular RBI/2017-2018/52 DBR.No.Ret.BC.83/12.07.150/2017-18 dated 07.09.2017)

"Inclusion of 'Ujjivan Small Finance Bank Limited' in the Second Schedule to the Reserve Bank ofIndia Act, 1934" – (RBI Circular RBI/2017-2018/54 DBR.No.Ret.BC.85/12.07.150/2017-18 dated07.09.2017)

"Reimbursement of Merchant Discount Rate (MDR) Charges for Government transactions up toRs.1 lakh through debit cards" – (RBI Circular RBI/2017-2018/55 DGBA.GBD.No.505/31.02.007/2017-18 dated 07.09.2017)

– 18 –

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURE FINANCE"Farm credit slows amid cry for waivers: State-run banks' loan growth to agriculture has fallen to

6.8%, which is the lowest in the past half-a-decade" – Farm loan waivers seem to be hurting farmersmore than doing them any good, as a spate of waivers by state governments is forcing banks to hold backtheir farm loans, thereby depriving them of the very credit they need for their livelihood. A report.– (ET Sep 2, 2017 p 6)

FARM LOAN WAIVER SCHEME"Rising farm loan waivers to hurt overall economy: Patel" – Reserve Bank Governor Urjit Patel cautioned

against the increasing farm loan waivers by state governments stating that the impact of any loan waiver ison the balance sheet of lending institutions, finances of states and interest rates. – (IE Sep 1, 2017 p 13)

INDUSTRY

INFRASTRUCTURE SECTOR"July performance: Eight core sectors' growth slips to 2.4%" – The growth of eight core sectors slowed

to 2.4 per cent in July due to contraction in output of crude oil, refinery products, fertiliser and cement. Theseeight infrastructure sectors - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement andelectricity - had witnessed a 3.1 per cent growth in July last year. – (FE Sep 1, 2017 p 2)

LIC

– BANK OF BARODA

"LIC sells over 2% in Bank of Baroda" – Life Insurance Corporation of India (LIC) has sold over 2 percent shares in public sector Bank of Baroda in a open market sale in past two months.– (HBL Sep 5, 2017 p 11)

MANUFACTURING SECTOR"Aug manufacturing PMI rises to 51.2 on new orders" – Indicating a partial rebound in factory output

after the rollout of the Goods and Services Tax (GST), the Nikkei India Manufacturing Purchasing ManagersIndex (PMI) rose to 51.2 in August. The Index was at a 101-month low of 47.9 in July. 'The upturn reflectedresumed growth of new orders, production and employment,' Nikkei said in a release on Friday, adding thatunderlying data pointed to a 'broad-based recovery'. – (HBL Sep 2, 2017 p 1)

"A troubling snapshot of Indian manufacturing" – A NITI Aayog and IDFC Institute report sharply delineatesthe manufacturing sector's problems. An article. – (Mint Sep 5, 2017 p 14)

MUTUAL FUNDS"Equity MFs see record Rs.20,000-cr inflows in Aug" – Equity mutual funds received a staggering Rs.20,000

crore in net investor flows in August, while the overall assets under management (AUM) topped the Rs.20-lakh crore mark. These are highest-ever monthly equity flows and AUM recorded by the domestic assetmanagement industry. – (BS Sep 7, 2017 p 1)

"MF advisory panel likely to suggest merger of schemes" – The Advisory Committee on Mutual Fundsappointed by the Securities and Exchange Board of India (Sebi) is planning to list a slew of recommendationsbefore the regulator. Senior officials in the mutual fund industry say that the committee might recommendmeasures such as the merger of schemes, adoption of total return index (TRI) and an increasing amount ofinvestor awareness campaign for Association of Mutual Funds in India (Amfi). – (FE Sep 1, 2017 p 11)

– 19 –

SMALL SCALE INDUSTRY

MSMEsSaravanan, S – "Analysis of investment, production and performance of MSME in India" – Micro,

Small and Medium Enterprises (MSMEs) play a key role in the development of economies with their efficient,resourceful, flexible and revolutionary industrial strength. In terms of value, the sector accounts for about 45per cent of the manufacturing production and 40 per cent of the total exports of India. This sector contributes8 percent to GDP of India. This sector employs about 60 million persons in over 26 million units throughoutthe country. The paper focuses on overall performance of the MSMEs in India from 2000-01 to 2014-15 interms of number of units, production and employment generated. The paper also attempts to analyze thecredit status and Export growth of the particular sector. An article. – (SE 56(8) Aug 15, 2017 pp 26-30)

INTERNATIONAL ECONOMICS

FINANCIAL CRISISJenkins, Patrick – "Financial crisis: 10 years on: Where are we now?" – In 2007, as the US housing

market collapsed and stocks tumbled, policy makers scrambled to contain the panic. How did the world getinto such a mess, and will it happen again? He introduces a Spectrum special. An article.– (FT Sep 2&3, 2017 Pt.III p 18)

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Sep 4, 2017 Supl. pp 1-16)

MANAGEMENT

CORPORATE GOVERNANCEKrishnan, Aarati – "Who's in charge of governance?" – Institutional investors are now in the driver seat at

many listed firms, but this isn't improving governance. An article. – (HBL Sep 1, 2017 p 8)

IFRSSruthi M G and Raju G – "International financial reporting standards converging in India: Perspectives

of chartered accountants" – Countries world over are moving to International Financial Reporting Standards(IFRS) with a view to bring accounting uniformity. In India, The Institute of Chartered Accountants of Indiais laying down the strategy for convergence of Indian Accounting Standards (IAS) with International FinancialReporting Standards (IFRS). This convergence is perceived to be a milestone decision leading to significantbenefits to Indian Corporate. But it is not easy to comply with IFRSs as it poses many challenges in the Indiancontext. The awareness level of different stakeholders in regard to the implications of IFRS in the country isvery poor as India is facing the initial stages of its implementation. When the practice gets into widespreadcommercial application, its beneficiaries must be capable of utilising the opportunities to the maximum extentand achieve the challenges. Chartered Accountants contribute to a significant extend in assisting thebeneficiaries in this respect. It is essential that they should have a thorough understanding on the influence ofIFRS in the country and should develop a motivation in themselves to take the initiative. An article.– (SE 56(8) Aug 15, 2017 pp 9-15)

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