Volume XXXII Number 43 July 24, 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 2

C. AGRICULTURE & RURAL DEVELOPMENT 15

D. INDUSTRY 16

E. SMALL SCALE INDUSTRY 16

F. INTERNATIONAL ECONOMICS 16

G. MANAGEMENT 16

– 1 –

BANKERS' BRIEF Vol. XXXII No. 43July 24, 2017

ECONOMY"India comes out as one of the highest rated destinations for investments now" – Edited excerpts from

an interview with Mark Weinberger, CEO, Ernst & Young. He said India still a difficult place to do businessin, but it's got 7% growth rate, stable government, good macro economic indicators and massive reformsaimed in the right direction. – (ET Jul 15, 2017 p 4)

"Is the Indian economy at an inflexion point?" – The Indian macro situation now is similar to what it wasjust before the economy took off in 2003. An article. – (Mint Jul 17, 2017 p 14)

"Stable economy, reforms make India a safe bet: EY boss lauds reform efforts and explains whyinvestors are placing bets on India" – India is one of the top investment destinations in the world rightnow thanks to a stable economy and low inflation besides reforms like the goods and services tax (GST) andnew insolvency rules, said EY chairman Mark Weinberger. Demonetisation, which was initially seen actingas a brake on growth, will help rein in corruption and encourage the shift to a cashless economy. – (ET Jul 15,2017 p 1)

Chinoy, Sajjid Z – "Indian economy: A tale of two narratives" – A weak economic growth narrative sitsuneasily with dramatically improved macroeconomic stability, but a traditional counter-cyclical response isunlikely to be efficacious. An article. – (Mint Jul 19, 2017 p 15)

Pattnaik, R K and Rattanani, Jagdish – "Higher economic growth, a big ask now" – A highly leveragedcorporate sector and an alarmingly stressed banking sector imperil the economy. An article. – (HBL Jul 17,2017 p 16)

Sabnavis, Madan – "Where do we go from here?" – Banks have to rework their strategies to makearrangements for capital. This will also mean putting their books in order and working hard to use the IBC-NCLT combination. An article. – (FE Jul 19, 2017 p 11)

EMPLOYMENTSabharwal, Manish and Chakraborty, Rituparna – "Employment 4.0: bug, not feature" – The gig economy

is not new for India and breeds our working poor; we need more wage employment. An article. – (Mint Jul17, 2017 p 14)

FOREIGN TRADE"Exports grow in June, but at a slower 4.39%: Trade deficit widens to $12.95 billion" – Export of

goods grew for the ninth straight month in June, posting a 4.39 per cent increase to $23.56 billion on continueddemand for engineering goods, petro products and chemicals. However, exporters are concerned about theslackening pace of growth and a drop in exports across major sectors such as pharmaceuticals, leather andgems & jewellery. Imports posted an increase of 19 per cent to $36.52 billion in June, with an increase ininward shipments of petroleum, crude, electronics, pearls and precious stones and machinery. Gold importsdoubled to $2.45 billion. Higher imports widened the trade deficit to $12.95 billion in June from $8.11 billion inJune 2016. A report. – (HBL Jul 15, 2017 p 1)

GST"No state can unilaterally increase rates of any item" – An interview with Hasmukh Adhia, Revenue

Secretary. He clarifies some contentious issues under GST. – (BusT 26(15) Jul 17-30, 2017 p 62)

– 2 –

INFLATION"Fall in food prices pulls WPI inflation down to 0.9% in June: Set to add to the clamour for an RBI

rate cut" – In what will increase the clamour for a rate cut by the RBI, wholesale price index (WPI) basedinflation eased sharply to a 11-month low of 0.9 per cent in June. It was at 2.17 per cent in May and hadcontracted by 0.9 per cent in June last year. A report. – (HBL Jul 15, 2017 p 4)

Chakravarty, Manas – "Is there a structural change in inflation?" – An article. – (Mint Jul 18, 2017 p 7)

Krishnan, Aarati – "Inflation: The right assumption" – The recent fall in inflation is driven by manystructural factors and this should reflect in your financial plans. An article. – (H Jul 16, 2017 Pt.II p 9)

Lahiri, Ashok K – "Declare victory over inflation?" – The inflation enemy may have been weakened, butmay be far from dead. A premature declaration of victory runs the risk of a deadly counterattack. An article.– (BS Jul 17, 2017 p 13)

UNIVERSAL BASIC INCOME SCHEMEDesai, Nitin – "Universal basic income or social security" – What we need is a blueprint for universal

health care, pensions and unemployment insurance to help the vulnerable section. An article. – (BS Jul 18,2017 p 9)

BANKING

GENERAL"Non-food bank credit growth at 4-mth high" – Growth in non-food bank credit rose to a four-month high

of 7.26% year-on-year (y-o-y) during the fortnight ended July 7 from 6.71% in the previous fortnight, clockinga fourth straight fortnight of positive growth. The corresponding figure in the year-ago period was 9.44%.According to provisional data released by the Reserve Bank of India (RBI), outstanding loans to companiesand individuals rose to Rs.76.53 lakh crore from Rs.76.06 lakh crore a fortnight ago. Aggregate deposits withthe banking system grew 10.71% y-o-y to Rs.106.52 lakh crore. This was higher than the June 23 figure ofRs.106.06 lakh crore. A report. – (FE Jul 20, 2017 p 10)

"World's largest banks by asset value" – Banks play a greater role as intermediaries in the global financialsystem. The largest banks are located in China, which is not surprising given that the Chinese economycontinues to grow at a rate that is approximately three times the rate of growth in the US, which is the worldlargest economy. A graphical report. – (BS Jul 17, 2017 p 6)

Bhattacharya, Himadri – "Reminiscences of an RBI governor" – Y V Reddy's memoir will enhance andenrich Reserve Bank of India's institutional memory of an era replete with important and watershed events.An article. – (Mint Jul 18, 2017 p 15)

Vageesh, N S – "Reddy-made central banking" – In a riveting memoir, Y V Reddy revisits his absorbingcareer at the RBI, and more. Reddy's book - 'Advice and Dissent: My Life in Public Service'. A bookreview. – (HBL Jul 17, 2017 p 17)

JAMMU AND KASHMIR

– NPAs

Naseem, Ishfaq – "The loan battle" – The growing NPAs of banks in Jammu & Kashmir are reducing theirappetite for disbursing loans, affecting development. An article. – (BusT 26(15) Jul 17-30, 2017 pp 36-39)

AXIS BANK"Axis Bank JV's digital platform for small biz" – Axis Bank said a TREDS (Trade Receivables Discounting

System), its joint venture with Mjunction Services, has launched a digital invoice discounting platform forsmall businesses. Invoices raised on West Coast Paper, Intex Technologies, Future Retail and other corporatesby their MSME suppliers were discounted by Axis Bank to mark commencement of operations. – (FE Jul 20,2017 p 10)

– 3 –

"Axis Bank starts hunt for new chief executive" – Axis Bank has appointed headhunters to start thesearch for a new chief executive officer (CEO) to succeed Shikha Sharma, who is set to step down nextyear, according to the people familiar with the matter. Executive search firm Egon Zehnder has been selectedby the Axis Bank board to identify a new CEO. – (BS Jul 15, 2017 p 3)

"Second in terms of card acceptance: Axis Bank" – Axis Bank claimed that it stood at second position inthe card acceptance industry, with a point of sale (POS) installation base of over 4,33,000 in the country. Thebank, in 2016-17, acquired more merchants (2,18,000) than in the previous four fiscal years, underscoring itscommitment to electronic payments, Sangram Singh, Head-Cards and Payment business, Axis Bank.– (FE Jul 18, 2017 p 10)

BANK OF BARODA"Bank of Baroda: Balance Sheet as on 31st March, 2017 and Profit & Loss Account for the year

ended 31st March, 2017" – An advertisement feature. – (BS Jul 14, 2017 pp 10-13)

BANK OF INDIA"Bank of India expects to return to black in Q2" – Bank of India (BoI) said it has exposure to 10 of the 12

large stressed accounts, identified by the Reserve Bank of India (RBI). BoI's overall exposure to these 10accounts is around Rs.7,000-8,000 crore. Although the RBI has asked the lenders to provide higher provisioningon these 12 large NPA (non-performing assets) accounts, BoI managing director & chief executive officerDinabandhu Mohapatra said it would not hit the bank. A report. – (FE Jul 16, 2017 p 3)

"BoI banks on project connect to tackle bad loans: Bank CEO Mohapatra says project aims atreducing bad loans, improving the share of low-cost deposits and retail credit" – Bank of India'snew chief has launched Project Connect, an initiative to revive the bank that has suffered huge losses for twoconsecutive years due to a sharp rise in bad loans. 'It is called Project Connect because the Connect betweeninternal staff and clients is not as strong as it was in olden days. So, many accounts are poached by otherbanks,' according to Dinabandhu Mohapatra, CEO of the state-owned bank. A report. – (ET Jul 18, 2017 p 16)

CANARA BANK"Canara Bank Q1 profit up 10%: Aided by lower deposit costs, improvement in interest & non-

interest incomes" – Reduction in cost of deposits and improvement in net interest income and non-interestincome helped boost Canara Bank's profit by 9.89 per cent to Rs.251.60 crore in the first quarter of 2017-18from Rs.229 crore during the same period last year. The bank's total income in Q1 rose 4.39 per cent toRs.12,304 crore (Rs.11,786.35 crore last year). EPS (basic) stood at Rs.4.21 (Rs. 4.22). The bank's grossnon-performing assets (NPAs) stood at Rs.37,657.76 crore (last year Rs.32,334 crore) with the percentageof gross NPAs at 10.56 per cent (9.71 per cent). Net NPAs came in at Rs.24,300 crore (Rs.21,494 crore)and in percentage terms at 7.09 per cent (6.69 per cent). The cost-to-income ratio came down to 48.72 percent from 52.74 per cent. Current account, savings account (CASA) deposits rose 16.23 per cent year-on-year to Rs.1.49 lakh crore. The capital adequacy ratio of the bank improved to 12.61 per cent, up from 12.11per cent a year ago. – (HBL Jul 20, 2017 p 6)

"Canara Bank: Reviewed financial results for the quarter ended 30th June, 2017" – An advertisementfeature. – (HBL Jul 20, 2017 p 3)

Iyer, Aparna – "Hope springs eternal for Canara Bank in fiscal year 2018" – Canara Bank believes that2017-18 would be a year of recovery and growth, or so it says in its results presentation to analysts andinvestors. One cannot fault the bank on its optimism because most lenders are now left with a tenuous threadof hope after bad loans ravaged their books for the past two years. An article. – (Mint Jul 20, 2017 p 4)

– DIGITAL TRANSACTIONS

"Big jump in transactions on digital channels, says Canara Bank MD: Share of e-transactions hasrisen to 64.7% in March 2017 from 54.2% a year ago" – Canara Bank has witnessed acceleratedadoption of digital payment channels by customers at all levels post-demonetisation. 'All digital channels ofthe bank have witnessed exponential growth, both in value and volume of transactions,' according to RakeshSharma, Managing Director and CEO, Canara Bank. A report. – (HBL Jul 15, 2017 p 6)

– 4 –

DCB BANK"DCB Bank cuts MCLR" – DCB Bank said it has cut marginal cost of fund based lending rate (MCLR) by

up to 0.57 percentage point for various tenors. DCB Bank has revised downward its MCLR across tenorswith overnight loans attracting 8.35 per cent interest rates, down 0.25 per cent from earlier, the bank said ina filing to BSE. For one month, three months and six months, the new MCLR are 8.45 per cent, 8.50 per centand 8.95 per cent respectively. – (HBL Jul 19, 2017 p 10)

"DCB Bank: Non-interest income drives profit; asset quality deteriorates" – DCB Bank Ltd''s netprofit in the June quarter beat analysts estimates, rising 38% from a year ago to Rs.65 crore. But this surgewas largely driven by a sharp rise in non-interest income that grew 43% year-on-year to Rs.86 crore. Non-interest income also includes treasury gains of Rs.21 crore. Net interest income grew around 32% year-on-year to Rs.233 crore. – (Mint Jul 17, 2017 p 4)

HDFC BANK"HDFC Bank to rejig swipe machines to boost e-pay" – HDFC Bank, one of the largest players in

payments and retail lending space, has come up with innovations to grow the same businesses in the digitalworld. The bank is now integrating digital payments, such as UPI, e-wallets and BharatQR, into the 4.2 lakhcard swipe machines and it is using its technology backbone to provide instant consumer loans to onlineshoppers. The lender will also tie up with e-merchants to provide instant loans to online shoppers. – (TI Jul17, 2017 p 15)

"HDFC Bank vies for bond crown: The lender is Rs.95 billion away from claiming the top slot fromAxis Bank" – HDFC Bank Ltd. is threatening to end Axis Bank Ltd.'s decade-long reign as the largestarranger of rupee-denominated corporate bonds as sales climb to a record for a third straight year. India'smost valuable bank has managed 481.5 billion rupees ($7.5 billion) of offerings so far this year, jumping 11notches from 2014 to number two on Bloomberg's league table. – (FE Jul 19, 2017 p 13)

IDBI BANK"IDBI Bank" – Statement by Shri Mahesh Kumar Jain, MD & CEO and Chairman of the 13th Annual

General Meeting of shareholders of IDBI Bank Ltd. – (BS Jul 19, 2017 p 3)

IDFC BANK

– MERGER

"IDFC and Shriram group merger: Bank's transition issues will remain" – While IDFC Bank andShriram City Finance stand to gain from a merger, building on CASA/fee franchise on large balance sheetwould be a challenge. A report. – (FE Jul 17, 2017 p 10)

"Merger will give us the reach of a bank" – Excerpts from an interview with R Thyararajan, Founder,Shriram group, He said 'our speciality lies in using synergies among businesses to enhance value' says thegroup's patriarch. – (H Jul 16, 2017 Pt.II p 11)

INDIAN OVERSEAS BANK"Insolvency proceedings against 10 firms address a fifth of IOB's bad loans, says MD" – Indian

Overseas Bank (IOB) has initiated insolvency proceedings against 10 large corporate borrowers, bringing afifth of its gross bad loans under the resolution process, according to R Subramaniakumar, managing directorand chief executive officer of the bank. A report. – (Mint Jul 18, 2017 p 7)

KARNATAKA BANK"Karnataka Bank Ltd" – Excerpts of the speech delivered by Shri Mahabaleshwara M S, Managing Director

& CEO, Karnataka Bank at the 93rd Annual General Meeting of the shareholders held at Head Office,Mangaluru on 17.07.2017. – (HBL Jul 18, 2017 p 7)

– 5 –

"Karnataka Bank Q1 net profit up 10%" – Karnataka Bank has posted a 10.13 per cent rise in net profit atRs.133.85 crore for the first quarter of the current fiscal. The bank had reported a net profit of Rs.121.54crore in the April-June quarter of 2016-17. The total income of the bank increased to Rs.1,547.93 crore asagainst Rs.1,434.96 crore a year ago, it said in a regulatory filing. Provisions to cover bad loans and contingenciesincreased to Rs.198.88 crore for the June quarter of 2017-18 from Rs.136.31 crore a year ago. – (FE Jul 16,2017 p 3)

"Karnataka Bank targets Rs.6,800-cr farm credit" – Karnataka Bank is targeting farm credit of Rs.6,800crore during 2017-18, constituting 18.09 per cent of the adjusted net bank credit as against the minimumregulatory requirement of 18 per cent. – (HBL Jul 20, 2017 p 6)

"Karnataka Bank: Reviewed financial results for the quarter ended June 30, 2017" – An advertisementfeature. – (HBL Jul 17, 2017 p 13)

ORIENTAL BANK OF COMMERCE"Mukesh Kumar Jain is Oriental Bank new MD & CEO" – The Centre has appointed Mukesh Kumar

Jain as Managing Director and Chief Executive Officer of Oriental Bank of Commerce, a public sectorbank. His appointment is for a period of three years. – (HBL Jul 15, 2017 p 6)

RBL BANK (RATNAKAR BANK)"Varam Capital, RBL, Bank tie up for ATM service" – Varam Capital, in partnership with RBL Bank, has

introduced Aadhaar-enabled payment services (AEPS) across its operations, thereby powering the Varamapp as a Micro-ATM. With this, Varam's 70,000 microfinance customers across urban and rural areas willhave access to ATM services at their doorstep. – (FE Jul 19, 2017 p 12)

STATE BANK OF INDIA"NCLT pulls up SBI over ambiguities in Monnet insolvency petition" – The Mumbai bench of the

National Company Law Tribunal (NCLT) pulled up State Bank of India (SBI) for the second time overambiguities in the submission regarding its insolvency petition against Monnet Ispat. The bench said SBI'spetition had not been drafted properly and suggested a 'lack of seriousness' on the part of the petitioner.– (FE Jul 18, 2017 p 10)

"SBI launches realty portal for home buyers" – India's largest commercial bank SBI said it has launched adedicated portal 'SBI Realty' that will help home buyers to choose flats from its 3,000 approved projectsacross the country. The portal will help customers choose their dream home from 3,000 SBI-approvedprojects. – (HBL Jul 19, 2017 p 10)

"SBI may issue perpetual bonds to raise around Rs.2,500 crore" – State Bank of India (SBI), mayapproach the debt market to issue additional tier-1 bonds or perpetual bonds, according to sources in the bondmarket. – (FE Jul 18, 2017 p 10)

"SBI to raise $750 m via overseas loans: SHOPPING ABROAD Bank aims to fund growth at itsoffshore branches; expected to raise 5-year loans which may be priced at 100-125 bps" – StateBank of India is planning to raise up to $750 million (Rs.4,835 crore) of overseas loans from internationallenders to fund growth in lending activity at its offshore branches. – (ET Jul 14, 2017 p 17)

– BANK CHARGES

"Digital push: SBI to slash NEFT, RTGS charges by up to 75% from tomorrow: The reduced chargeswill be applicable on transactions done via internet & mobile" – To encourage more customers totransact digitally, State Bank of India said it will slash charges for National Electronic Funds Transfer (NEFT)and Real Time Gross Settlement (RTGS) transactions by up to 75 per cent with effect from July 15.– (HBL Jul 14, 2017 p 6)

– 6 –

– ENTREPRENEURS

"Marketability of an idea is very important for funding a startup" – Excerpts from an interview withHikchand Bora, Assistant General Manager, State Bank of India. – (HT Jul 15, 2017 p 4)

– NPA RESOLUTION

"Bhushan Steel, SBI fight over loan dues" – Bhushan Steel and State Bank of India (SBI) contested eachother's estimation of the company's liability at a hearing in the National Company Law Tribunal (NCLT). Thesteel company's counsel said SBI's claims were about Rs.100 crore more than the actual dues. Counteringthe argument, SBI's counsel said the difference was because the dues to SBI's subsidiaries - now mergedwith the larger bank - had not been considered. Five subsidiary banks of SBI were merged with it on April 1.SBI has staked a claim of Rs.4,295 crore from Bhushan Steel, along with $490 million in foreign currencyloan. A report. – (BS Jul 20, 2017 pp 1, 11)

UNITED BANK OF INDIA"UBI eyes Rs.500-cr mop-up through Basel III bonds" – United Bank of India looks to raise up to Rs.500

crore through issuance of Basel III compliant bonds on private placement basis. 'The board of directors ofthe bank... approved issuance and allotment of unsecured Basel III compliant, listed, tier-2 bonds in the formof promissory note... with or without greenshoe option, aggregating up to Rs.500 crore on a private placementbasis'. – (FE Jul 14, 2017 p 10)

VIJAYA BANK"Vijaya Bank to open 50 branches in AP" – Vijaya Bank is planning to establish 50 more branches in Andhra

Pradesh in the next two years in addition to the existing 115 branches, according to Executive Director B S RamaRao. Fifteen branches will be set up during the current financial year. A report. – (HBL Jul 18, 2017 p 17)

YES BANK"YES Bank eyes global partners to incubate fintech start-ups" – YES Bank, which runs a start-up

accelerator programme called Yes Fintech, is looking at exclusive global exchange programme partnershipsto help Indian start-ups gain access to developed markets in terms of business and investments. Towards thisend, the bank has already tied up with MaGIC (Malaysian Global Innovation & Creativity Center), a Malaysiangovernment initiative. It is also looking for similar partnerships with the US, Sweden, Norway, Singapore, theUK and Israel over the next few years. – (HBL Jul 17, 2017 p 15)

– SME LENDING

"SME lending: YES Bank ties up with US-based OPIC, Wells Fargo" – YES Bank has teamed up withthe Overseas Private Investment Corporation (OPIC) and Wells Fargo on an agreement to lend up to $150million to small and medium enterprises (SMEs) in India. OPIC will provide $75 mn in financing and up to $75mn in syndicated financing jointly with Wells Fargo to YES Bank. – (HBL Jul 15, 2017 p 6)

CHINA"China's central bank to play bigger role in managing risk" – China's central bank will take on a bigger

role in macro-prudential management and in averting systemic risk in the financial system, according to thePresident Xi Jinping. A report. – (BS Jul 17, 2017 p 6)

EUROPE"Outlook brightens on Europe's bad loan provisions: EU lenders expect to set aside 18% more for

new rules rather than 30%" – The official estimate of how much more European banks will have to setaside for bad loans once new accounting rules come in next year has been cut, but the region top financialregulator has also warned smaller lenders over their preparedness. The European Banking Authority, thesupervisor of supervisors across the EU, said most banks in the bloc expected provisions to rise by as muchas 18 per cent under IFRS 9. A report. – (FT Jul 14, 2017 p 16)

– 7 –

ASSET CLASSIFICATION DIVERGENCES"Circular issued: SEBI directs banks to report divergence in asset classification to exchanges:

Divergences where additional provisioning requirements exceed 15 per cent of net profit aftertax" – The Securities and Exchange Board of India (Sebi) issued a circular directing all listed banks to reportdivergences in asset classification and provisioning to the stock exchanges along with their annual reportsimmediately after it receives a communication from the Reserve Bank of India (RBI) on such divergences.A report. – (IE Jul 19, 2017 p 14)

AUDIT COMMITTEE

– PUBLIC SECTOR BANKS

"Non-exec chairman can be part of bank's audit panel" – Reserve Bank said the non- executive chairmanof a bank can also be nominated to the audit committee of board of directors. Earlier, any one of the non-executive/non-official directors was supposed to chair the audit committee of the board of the directors of apublic sector bank. – (IE Jul 14, 2017 p 14)

BANK CAPITAL

– PUBLIC SECTOR BANKS

"Capital infusion: Finance Ministry to announce beneficiary banks soon" – The finance ministry isworking on the capital infusion strategy for public sector banks and an announcement to this effect will comesoon be made, according to a senior finance ministry official. The funds infusion matrix as per the Indradhanushscheme is being given a final shape on the basis of representations from various banks for their capital needs.A report. – (HBL Jul 20, 2017 p 6)

"Govt can use 'recapitalisation bonds' to support PSBs: Raising capital via QIP is another option,says FinMin official" – The government can consider issuing recapitalisation bonds if the requirement forfund infusion into State-owned banks rises more than the Rs.10,000 crore budgeted for 2017-18 (April-March), according to a senior Finance Ministry official. With banks continuing to be flush with deposits post-demonetisation, these bonds can be subscribed to using this excess liquidity. – (HBL Jul 15, 2017 p 6)

BANK CONSOLIDATION

– PUBLIC SECTOR BANKS

"Govt move to create big banks through mergers risky, says union: Globally, many big banks havefailed and had to be bailed out, says AIBEA General Secretary" – The government's bid to consolidatepublic sector banks (PSBs) through mergers to create big banks is fraught with risks as many big privatebanks globally, including in the US, have failed, cautioned a trade union body. A report. – (HBL Jul 19, 2017p 10)

"Govt plans to consolidate 21 public sector banks to 12" – The government is working on a consolidationagenda in a bid to create 3-4 global-sized banks and reduce the number of state-owned lenders to about 12.The 21 public sector banks would get consolidated to 10-12 in the medium term. – (TI Jul 17, 2017 p 15)

BANK FRAUDS

– ELECTRONIC TRANSACTIONS

Kalyanaraman, Anand – "Who bears the brunt in online banking fraud?" – The RBI caps the loss incertain instances, but you are not off the hook. An article. – (H Jul 16, 2017 Pt.II p 9)

– 8 –

BANK LENDINGDas Gupta, Devashish – "Responsible lending: Promoting loan meals: Any responsible lender must

advise the client on savings and spending" – From a lender's point of view, responsible lending is to actin a customer's best interests, ensuring affordability, transparency of terms and conditions and supporting aborrower if they experience repayment difficulties. Lenders have a responsibility to make sure borrowersunderstand the details of a loan and carry out thorough checks on any borrower, so they can be confident thatwhat customers will receive will be suitable for their circumstances. Bankers and lenders can make lendingfun and interesting through hyper-local events (such as a loan mela at a small town and semi-urban areasduring the upcoming festival season), which offer a distinct opportunity to sensitise banking solutions withcreative campaigns and positioning. An article. – (FE Jul 20, 2017 p 9)

BANKING REFORMS

– PUBLIC SECTOR BANKS

Subramanian, Krishnamurthy – "Public sector bank reforms: Non-performing, so perish" – An article.– (ET Jul 14, 2017 p 14)

BANKING REGULATOR

– CURRENCY SECURITY

"RBI pushes 'Make in India' for currency security features" – In a big 'Make in India' push, the ReserveBank today came out with fresh tender for currency security features, mandating that the supplier set up themanufacturing unit in the country within two years and gradually increase the local content. – (ET Jul 18,2017 p 14)

– RESERVE BANK OF INDIA

"Be 'careful' in issuing press releases, court tells RBI" – While pronouncing the judgement on the EssarSteel India Ltd (ESIL)'s petition against Reserve Bank of India's directive on insolvency proceedings, theGujarat High Court raised serious concerns on the functioning of the apex bank and cautioned it to be 'carefulwhile issuing press releases'. A report. – (HBL Jul 18, 2017 p 4)

"DEA Secretary on RBI board" – The RBI said Economic Affairs Secretary Subhash Chandra Garg hasbeen nominated to its central board of directors. Garg replaces his predecessor Shaktikanta Das. – (HBL Jul15, 2017 p 6)

"Govt gets 90 applications for RBI deputy guv post" – The Finance Ministry has received around 90applications for the post of RBI Deputy Governor as S S Mundra's three-year term is coming to end thismonth. Some private bankers have also applied for the post as the position was open to private sector, afinance ministry official who did not wish to be identified. – (FE Jul 15, 2017 p 12)

"Reserve Bank postpones June 30 asset liability numbers, to be announced later" – The ReserveBank of India has refrained from releasing its asset liability figures for the week ended June 30, which is alsothe last day for depositing defunct currency notes by NRIs. June 30 is also the last day of July-June financialyear followed by the central bank. This is probably for the first time, RBI in its Weekly Statistical Supplementhas not come out with the figures for week ended June 30. – (IE Jul 18, 2017 p 14)

– TRANSPARENCY LAW

"RTI application: RBI tells SC borrowers' info cannot be disclosed" – The Reserve Bank of India toldthe Supreme Court that a host of laws mandate the banking regulator to maintain secrecy on borrowings andborrowers -information that cannot be revealed to all and sundry under RTI, the 2005 transparency law. Thisprompted the apex court to say it would examine all these aspects again. The order by a two judge bench ledby Chief Justice of India J S Khehar implies that RBI may not, for now, reveal details of borrowers andborrowings to the public under the Act, despite an earlier ruling binding it to do so. RBI wants the apex courtto revisit the issue in a case where it sought details of all NPAs in PSU banks. – (ET Jul 18, 2017 p 6)

– 9 –

BURGLARIES"Banks lost Rs.180 cr to burglaries" – Nearly Rs.180 crore was lost in 2,632 cases of robbery, theft,

dacoity and burglaries at India's 51 banks in the last three years, 2014-15 to 2016-17, Parliament was informed.– (HBL Jul 19, 2017 p 10)

CENTRAL BANKS

– ASIA

"Central banks' hawkish turn swerves clear of Asia" – A hawkish turn from central bankers has rattledglobal markets. But in Asia, the doves still fly. The region six biggest monetary authorities, which overseeeconomies accounting for almost a third of global output, haven't signalled a desire to fall in line with theirWestern counterparts to raise borrowing costs just yet. A report. – (FE Jul 14, 2017 p 10)

CURRENCY NOTES"Where are the pink notes? That's a Rs.2,000 question: Severe shortage of Rs.2,000 notes after

supply from RBI dips in recent weeks" – A shortage of Rs.2,000 notes in recent weeks and months hasstumped bankers and ATM operators who are already grappling with cash shortage in some parts of thecountry due to heavy usage and hoarding. Bankers and ATM service providers say that there has been asharp drop in number of Rs.2,000 notes in circulation. A report. – (ET Jul 20, 2017 p 1)

DIGITAL CURRENCIES"Govt mulls monitoring digital currencies to track crimes" – India is considering tracking digital currencies

like bitcoin through the RBI and capital markets regulator SEBI along with intelligence agencies to monitormoney laundering and terrorist financing. A government panel is examining options such as banning, regulatingor limited intervention for virtual currencies in India. A report. – (FE Jul 15, 2017 p 12)

EDUCATION LOANS

– NPAs

"142 per cent rise in bad education loans in 3 years" – Indian banks have seen a 142 per cent rise indefault by students who have taken education loans during the past few years, at a time when hiring for newjobs has slowed down and tech companies have started laying off employees. State-owned banks, which arealready weighed down by huge defaults by corporates, are the worst hit as they account for over 90 per centof educational loans. Private banks have largely stayed away from this segment. A report. – (IE Jul 17, 2017pp 1, 2)

"The burden of an education loan: Rising default on education loans isn't a good sign for students asit hurts their future loan-taking ability" – With the cost of education rising, more students seem to prefereducation loans. But, many are finding themselves without jobs, even after paying for expensive education.According to recent reports, the total education loan dues in the banking system had risen from Rs.48,382crore to Rs.72,336 crore, a rise of 49.5 per cent, between March 2013 and December 2016. In comparison,non-performing assets in this segment was up 142 per cent, from Rs.2,615 crore to Rs.6,336 crore in thesame period. Clearly, more and more students are finding it difficult to service loans. A report. – (BS Jul 20,2017 Pt. II p 3)

FINANCIAL INCLUSIONSingh, Nirvikar – "For real financial inclusion in India" – Institutional innovation is just as important as

technological innovation; so while JAM is important, focus on reforming PSBs. An article. – (FE Jul 19, 2017p 10)

– 10 –

FINANCIAL TECHNOLOGY"Banks may face Kodak-style obsolescence: A wave of fintech start-ups is transforming the way

customers bank, says former CEO of Barclays" – Banks could face a Kodak moment where theyapproach obsolescence in five to 15 years at the hands of new financial-technology companies, according toformer Barclays Plc Chief Executive Officer Antony Jenkins. Traditional banks are already seeing the startof an Uber moment, whereby the industry is being transformed by technology such as smartphones andcontactless cards. – (HBL Jul 20, 2017 p 6)

GLOBAL FINANCIAL SYSTEMEl-Erian, Mohamed A – "How healthy is the global financial system?" – Efforts to shore up the banking

sector in parts of Europe still lag far behind. More importantly, financial risks have continued to migrate tonon-bank activities. As more carefully regulated banks have ceased certain activities, they have been replacedby non-banks not subject to the same regulatory standards. Also, the financial system has yet to feel the fullimpact of technological disruptions that are already upending a number of other established sectors. Anarticle. – (FE Jul 19, 2017 p 10)

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA"IBBI finalising standards to set up into utility" – Amid greater application of the new insolvency law to

resolve cases of large non-performing accounts (NPAs) with banks, the Insolvency and Bankruptcy Boardof India (IBBI) is in the process of finalising technical standards for setting up a massive information utility (IU)that will have all the relevant data on lending and credit flow in the country. A report. – (FE Jul 14, 2017 p 2)

"IBBI notifies rules for bankruptcy probe: It can investigate without intimation" – The Insolvency andBankruptcy Board of India (IBBI) has powers to start probes against service providers registered with itwithout intimating them, according to new regulations. IBBI, which is implementing the Insolvency andBankruptcy Code (IBC), has notified the regulations for inspection and investigation of service providersregistered with it. A report. – (H Jul 17, 2017 p 13)

INSOLVENCY AND BANKRUPTCY CODE"IBC segregates judicial, commercial aspects of insolvency" – The Insolvency and Bankruptcy Code

has segregated judicial and commercial aspects of the insolvency process whereby stakeholders have theright to decide on what suits them, M S Sahoo, chairperson IBBI. – (ET Jul 16, 2017 p 2)

– NPA RESOLUTION

"500 NPA cases to get equal priority" – The Gujarat High Court order would result in all 500 non-performingassets (NPAs) identified by the Reserve Bank of India (RBI) getting equal priority, compared to the bankingregulator's earlier stance that only 12 top NPAs should be given top priority by the National Company LawTribunal (NCLT). – (BS Jul 19, 2017 p 4)

"Court clears insolvency action against Essar Steel: Creditors can now proceed at NCLT; rulinglikely to deter similar legal challenges" – The Gujarat high court cleared the way for the Reserve Bankof India (RBI) to press ahead with the bad-loan resolution process, dismissing Essar Steel Ltd's petitionchallenging the initiation of bankruptcy proceedings against the company. The ruling throws judicial weightbehind RBI's 13 June directive asking lenders to initiate action against the steelmaker and 11 other companiesthat account for a quarter of the Rs.7.8 trillion of bad loans clogging up the banking system. A report.– (Mint Jul 18, 2017 p 1)

"Delay in insolvency will lead to economic value loss: SBI MD" – A delay in execution of insolvencyproceedings would only lead to a loss in the economic value of a company, according to Rajnish Kumar,Managing Director at State Bank of India. The idea is to seek the resolution as quickly as possible. The morewe delay, there is a loss to the enterprise value. The losses increase, the chances of a resolution become verydim. It is a much awaited reform which was needed. It was a demand from bankers. It is in the best interestof the lenders, borrowers themselves and the country and the economy as a whole. A report. – (FE Jul 15,2017 p 12)

– 11 –

"Essar Steel case: RBI says no additional documents to support order" – The Reserve Bank of India(RBI) admitted it had no additional documents to produce before the court to support the decision-makingprocess that went into a 13 June announcement in the form of a media statement. RBI, through the statement,had directed banks to refer a dozen loan defaulters to the National Company Law Tribunal (NCLT) forspeedy resolution under the Insolvency and Bankruptcy Code. A report. – (Mint Jul 15, 2017 p 24)

"Insolvency process gets a big boost" – Gujarat High Court verdict in Essar case will dissuade others fromtrying to derail IBC scheme. An editorial. – (FE Jul 18, 2017 p 8)

"More steel to lenders: The Gujarat High Court verdict in the Essar Steel case sanctifies the IBCprocess and strengthens the hands of lenders" – An editorial. – (HBL Jul 20, 2017 p 8)

"NPA resolution of 488 cos may be fast-tracked: Of 500 cos on RBI panel's list, 12 are facing action"– With the reconstitution of the overseeing committee for debt resolution by the RBI, industry players expectspeedy settlement of the non-performing assets (NPAs) of defaulters from the expanded list. This list includes488 companies, other than the 12 largest ones that were recommended by the central bank's panel. A report.– (TI Jul 19, 2017 p 23)

"RBI trying to set precedent with large NPA cases: Shardul Shroff" – Edited excerpts from an interview withShardul Shroff, Executive Chairman of Law Firm Shardul Amarchand Mangaldas. – (Mint Jul 17, 2017 p 7)

"Senior bankers to attend workshop to revise their ABCs on IBC" – Come Tuesday, senior bankers willturn students at the Reserve Bank of India (RBI) building in Mumbai's Bandra Kurla Complex. As both thegovernment and the central bank seek to use the Insolvency and Bankruptcy Code (IBC) 2016 as a weaponagainst toxic assets with the banking system, the Centre for Advanced Financial Research and Learning, anindependent body set up by the RBI, has partnered with consultancy firm McKinsey to organise a workshopto familiarise bankers with the new insolvency law. A report. – (FE Jul 15, 2017 pp 1, 4)

Ravi, Aparna – "Viva Insolvency Resolution!: The Essar verdict was a validation of the new BankruptcyCode. But the code faces more tests" – The decision of the Gujarat High Court, as well as the relativespeed with which it decided the case, sets a helpful precedent for the functioning of the Code as intended. Anarticle. – (ET Jul 20, 2017 p 14)

– PROVISIONING

"Lenders will need Rs.18,000 cr extra provisioning to resolve bankruptcy cases: India ratings" –Banks' profits likely to drop 25% in FY18, says rating agency. The RBI has identified 12 accounts forreference to the National Company Law Tribunal under the insolvency and Bankruptcy Code in FY18. Areport. – (HBL Jul 19, 2017 p 10)

Umarji, M R – "Stringent provisioning a disincentive to insolvency process" – An article. – (ET Jul 19,2017 p 16)

– SMEs

"Govt working on a simpler bankruptcy code for SMEs: Framework expected to be drawn up by theInsolvency and Bankruptcy Board of India (IBBI) by the end of this month; proposed simplercode to also cover personal bankruptcy of individuals with business interests" – After dealingfirmly with large corporate loan defaulters, the government has started drawing up a simpler version of theinsolvency and bankruptcy code for partnership and proprietorship firms, the legal form that most small andmedium enterprises (SMEs) take. Though the loans are smaller in value, SME borrowers far outnumbercompanies, resulting in their borrowings exerting a significant influence in the financial sector stability. Theinsolvency and bankruptcy code that is currently in place deals only with companies, not other forms oforganized economic activity. A report. – (Mint Jul 17, 2017 p 1)

– STATE BANK OF INDIA

"Dismiss Essar Steelˆs petition for suppressing facts: SBI tells Gujarat High Court: Lender calls fordiscontinuing interim relief granted earlier" – State Bank of India requested the Gujarat High Court to

– 12 –

dismiss the petition filed by the Ruias-led Essar Steel, which challenged the insolvency proceedings initiatedby its lenders. In its argument, SBI said Essar Steel knew that the lenders were considering initiating insolvencyproceedings against the company and hence the filing of a petition was a futile exercise. A report. – (HBL Jul14, 2017 p 3)

"SBI moves NCLT against Bhushan Steel" – The State Bank of India (SBI) moved the National CompanyLaw Tribunal (NCLT) against Bhushan Steel Ltd, claiming the company had defaulted on loans of overRs.43,000 crore. A report. – (Mint Jul 14, 2017 p 5)

ISLAMIC BANKING

– AFRICA

"Islamic banking in Africa: Saharan sharia" – Africa is Islamic finance's next frontier. But barriers to entryare high. An article. – (Eco 424(9049) Jul 15, 2017 pp 56-57)

MICROFINANCE"Microfin rebound shows rural India recovery" – India's vast rural hinterland, which makes up 70% of the

country's population, is showing signs of recovery from last year's cash crunch, boosting optimism thatincreased spending will help the broader economy regain its vigour. The micro-finance industry is rebounding,real rural incomes are rising and unemployment is falling, according to brokerage Motilal Oswal SecuritiesLtd and an Indian unit of HSBC Holdings Plc in analysis that contrasts to the distress that swept the farmingsector. A report. – (FE Jul 19, 2017 p 12)

MONETARY POLICY"Cut to grow" – With inflation ruling well below the target band and industrial output turning tepid, the stage

appears well set for a rate cut by RBI. An editorial. – (HBL Jul 15, 2017 p 8)

"Inflation conundrum: Record low retail inflation poses a monetary policy dilemma for the RBI"– An editorial. – (H Jul 14, 2017 p 8)

"RBI rate cut expectations grow: Observers point to recent IIP, CPI data; however, some believesuch a move might not happen till October" – Recent data pointing to a slowing in industrial productiongrowth and to a fall in retail price inflation has given room to the Reserve Bank of India (RBI) to cut its policyrate at the review meeting on August 2, believe many economists and bankers. Not all share the belief. And,even those who think the RBI will cut the rate add that the lower borrowing cost will not be able to reviveinvestment or credit growth (which fell to a 40-year low of 5.1 per cent in 2016-17) in a hurry. A report.– (BS Jul 14, 2017 p 4)

"Yes, there is a case for lower rates: But primary task remains fixing bad loan problem" – An editorial.– (ET Jul 14, 2017 p 14)

Balachandran, R – "Will the guv make an out of turn rate cut?" – GST impact, oil rate, Gsec yield... thereare many factors on which this may hinge. An article. – (ET Jul 17, 2017 p 14)

Bhoi, Barendra Kumar – "Is repo rate cut imminent?" – Cut in the repo rate may bring down at leastshort-term rates, which, in turn, may help firms depend on domestic markets for working capital requirementrather than look towards overseas funds. An article. – (FE Jul 14, 2017 p 9)

Datta, Devangshu – "RBI must cut interest rates" – Govt push needed to boost consumption and investment.An article. – (BS Jul 17, 2017 p 11)

Vasudevan, A – "Who cares about monetary policy?" – If monetary policy does not provide relief in termsof a rate cut for some reason, fiscal discipline will have to be given up. An article. – (Mint Jul 20, 2017 p 15)

– 13 –

MONETARY POLICY COMMITTEERajadhyaksha, Niranjan – "The evolving monetary policy committee culture" – An article. – (Mint Jul

19, 2017 p 14)

NPA RESOLUTION"Banks identify borrowers' keenness to resolve NPAs" – Indian banks are beginning to spot a welcome

change in their customers' behaviour borrowers who have seen their accounts classified as stressed or non-performing are approaching the lenders with proposals to resolve such accounts in a time-bound manner. Areport. – (FE Jul 19, 2017 p 12)

"Order to banks to speed up loan recovery within our powers: RBI" – The Reserve Bank of India(RBI) said its 13 June directive to banks to speed up their bad-loan recovery was well within its powers, andthat its classification of sticky assets could not be challenged. RBI lawyer Darius Khambata said this in theGujarat high court during a hearing on Essar Steel Ltd's petition challenging the directive. A report.– (Mint Jul 14, 2017 p 5)

"RBI looks to resolve Rs.8-L-cr bad loans by March 2019" – Emboldened by the Banking Regulation(Amendment) Ordinance, the RBI is expected to push for resolution of bad loans worth around Rs.8 lakhcrore by March 2019, a move that could bring down the NPAs and improve the financial health of banks,according to a study by Assocham. A report. – (FE Jul 17, 2017 p 2)

– LOAN SETTLEMENT

"Top 50 stressed a/cs will need Rs.2.4 lakh cr haircut: This amounts to 60% of the Rs.4 lakh croreexposure to these accounts: Crisil report" – Banks may have to take a haircut of 60 per cent, worthRs.2.4 lakh crore, to settle 50 large stressed assets with debt of Rs.4 lakh crore, according to an analysis bycredit rating agency Crisil. The agency believes it would be in the larger interest of the economy to pop thebitter pill of a haircut than kick the can down the road. A haircut is a one-off adjustment whereby lendersagree to settle for a lesser amount when a company struggles to repay a loan. The 50 large stressed companiesare from the metals (30 per cent of total debt), construction (25 per cent), and power (15 per cent) sectors,and account for half of the Rs.8 lakh crore non-performing assets (NPAs) in the banking system as onMarch 31, 2017. Crisil has classified the haircuts into four categories - marginal (less than 25 per cent),moderate (25-50 per cent), aggressive (50-75 per cent), and deep (greater than 75 per cent). A report.– (HBL Jul 20, 2017 p 1)

– ONE-TIME SETTLEMENT

"One haircut in time saves nine" – LOAN RECOVERY The govt and RBI are aggressively trying to solvethe bad loan problem at banks. Even as proceedings have begun under bankruptcy code, the central bank iskeen that smaller NPAs are resolved quickly through one-time settlements. Govt, RBI nudge banks to pursueone-time settlement to recover non-performing loans in cases where default amount is not too high to preventclogging of bankruptcy courts. A report. – (ET Jul 15, 2017 p 5)

PAYMENTS BANKSVishwanathan, Vivina – "India has four payments banks now - here is how they differ" – An article.

– (Mint Jul 20, 2017 p 12)

– FINO PAYMENTS BANK

"Fino Payments Bank launches operations" – Fino Payments Bank started operations with 410 branches,becoming the fourth payments bank in India after Airtel Payments Bank, India Post Payments Bank andPaytm Payments Bank. A report. – (Mint Jul 18, 2017 p 7)

"We expect to become profitable in 2-3 years: Fino Payments Bank chief eyes 1,000 branches in 3years" – Edited excerpts from an interview with Rishi Gupta, MD & CEO, Fino Payments Bank.– (H Jul 18, 2017 p 14)

– 14 –

PEER-TO-PEER LENDING

– FIRST LOAN DEFAULT GUARANTEE

"RBI cautious about first loan default guarantee: P2P lending cos offering such guarantees may goagainst the intentions of the central bank: Experts" – The Reserve Bank of India is learnt to be waryof peer-to-peer lending platforms offering any FLDG, or first loan default guarantee, cover to institutionallenders for any lending they do through these technology startups, said sources familiar with the discussions.FLDG cover is a common way of protecting the interest of lenders who lend money to micro financeinstitutions or non-banking finance companies (NBFCs) and the magnitude of cover depends on banks' riskappetite. A report. – (ET Jul 14, 2017 p 17)

PMJDY

– DEPOSITS

"Jan Dhan deposits surge to Rs.64,564 cr" – Deposits in Jan Dhan accounts have touched a new high ofRs.64,564 crore, of which over Rs.300 crore came in the first seven months of demonetisation, according togovernment data. – (FE Jul 17, 2017 p 2)

PRIORITY SECTOR LENDING"Lending to priority sector is good business, Mundra tells banks: RBI Deputy Governor says such

loans support economic activity, generate income & surplus" – Given the overexposure of the bankingsystem to large corporates and the consequences thereof in the last few years, Reserve Bank of IndiaDeputy Governor S S Mundra said lending to priority sector is good business for all the right and justifiablereasons. The excessive lending to corporate sector was the outcome of what I call 'least input and maximumoutput' approach. With little effort one could create large credit volumes whereas creating similar volumes inthe priority sector would have required commitment of larger resources in terms of branch staff and operatingpeople. Priority sector loans include those given by banks to segments such as agriculture, micro, small andmedium enterprises, affordable housing, and renewable energy. A report. – (HBL Jul 18, 2017 p 10)

PRIVATE SECTOR BANKSBhakta, Pratik and Das, Saikat – "Old private sector banks: The resurrection" – These lenders have

had many false starts in the past two decades. But this time it may be different. Change in shareholderattitude, technology and professionals' keenness to join them are making a difference in their working. Anarticle. – (ET Jul 19, 2017 p 16)

RETAIL LENDINGRoy, Subhasish – "Banking off retail" – Aggregate retail loans constitute less than 10% of GDP in India,

compared to nearly 35% in other Asian economies such as South Korea (55%), Taiwan (52%). An article.– (FE Jul 14, 2017 p 9)

SCHEME FOR SUSTAINABLE STRUCTURING STRESSED ASSETS"RBI panel clears debt resolution plan for Supreme Infrastructure" – The Reserve Bank of India's

oversight committee has approved a debt restructuring package for Supreme Infrastructure India Ltd underthe central bank's scheme for sustainable structuring of stressed assets (S4A). – (Mint Jul 14, 2017 p 5)

SMALL FINANCE BANKS

– AU SMALL FINANCE BANK

"AU Small Finance Bank now among the top 20 NBFCs by market capitalisation: The stock hasgained 30% after its robust debut on July 10" – Within three days of listing, the market capitalisation ofAU Small Finance Bank (AU SFB), which got converted from a non-banking finance company to a bank

– 15 –

only in April 2017, is larger than PSU banks such as IDBI Bank, Union Bank, Dena Bank and Bank of India,among others, and old private sector banks such as South Indian Bank and Karur Vysya Bank. A report.– (HBL Jul 14, 2017 p 10)

– UJJIVAN SMALL FINANCE BANK

"Ujjivan to expand branch network" – Ujjivan Small Finance Bank is planning to expand its branches inWest Bengal to 15, from the existing seven. The addition is expected to happen by the end of this year, it saidin a release. The bank commenced operations here with six pilot branches. Ujjivan started its journey as amicro-finance institution in the State from May 2007. It has since expanded into 18 districts with 53 MFIbranches and catering to over 5.3 lakh customers. – (HBL Jul 18, 2017 p 10)

WEAK BANKS

-PUBLIC SECTOR BANKS

"S S Mundra dispels fears about future of weak banks: The notion that they are on the verge ofcollapse due to asset quality stress is misleading, says RBI Deputy Governor" – Urging all to notfall prey to falsehoods on the future of weak banks, RBI Deputy Governor S S Mundra said lenders' inclusionunder prompt corrective action (PCA) is for timely improvement of their performance. PCA is one amongsuch tools which involves monitoring of performance indicators of banks as an early-warning exercise and isinitiated once such thresholds as relating to capital, asset quality are breached. The list of lenders under thePCA include IDBI Bank, Central Bank of India, Indian Overseas Bank, Bank of Maharashtra, UCO Bankand Dena Bank, which are facing issues either with high non-performing assets (NPAs) or low capital levels.A report. – (HBL Jul 15, 2017 p 6)

WHOLE-SALE AND LONG-TERM FINANCE BANKSVallabh, Gourav and Chatrath, Suraj – "Can WLTF banks fill the void?" – The Reserve Bank of India

should spell out eligibility criteria of projects that can be funded by WLTF banks. An article. – (BS Jul 14,2017 p 9)

RBI CIRCULARS"Auction of Government of India Dated Securities" – (RBI Circular RBI/2017-2018/25 Ref. No. IDMD/

126/08.02.032/2017-18 dated 17.07.2017)

"Master Circular - Detection and Impounding of Counterfeit Notes" – (RBI Circular RBI/2017-2018/26DCM (FNVD) G - 4/16.01.05/2017-18 dated 20.07.2017)

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURE FINANCE

– MAHARASHTRA

"Maharashtra PSBs draw flak for missing crop loan target" – Kishore Tiwari, the chairman of the farmtask force Vasantrao Naik Sheti Swavalambi Mission (VNSSM) formed by the Maharashtra government toaddress the agrarian crisis, has criticised public sector banks in Maharashtra for their alleged insensitiveapproach to farmers saying all PSU banks have disbursed barely 10% of the crop loan targets set by RBI andNabard for the 2017-18 kharif season. Last year, by July 15, around 70% target was achieved. – (FE Jul 19,2017 p 5)

RURAL ECONOMY"Rural India's distress conundrum" – It's difficult to make sense of what's happening in the rural economy.

On the one hand, leading economic indicators suggest a recovery is underway. A graphical report. – (BS Jul17, 2017 p 4)

– 16 –

INDUSTRY

NON-BANKING FINANCE COMPANIESGhutukade, Vijay – "NBFCs: recovery from DeMo woes" – Pressure on asset quality to continue on

further tightening of NPA recognition norms to 90-day overdue basis in FY 2018. An article. – (Cmar 32(10)Jul 3-16, 2017 pp 14-15)

REALTY SECTOR"Lenders turn extra cautious on realty: Banks and NBFCs conduct forensic due diligence on

developers to avoid toxic loans" – Know your borrower well: NBFCs and banks have become extracautious about lending to realty developers, particularly lesser known names. (1) They are roping in corporateinvestigators to carry out forensic due diligence before taking a lending decision. (2) The firms assisting inthis process include the big four * Deloitte, EY, PwC and KPMG * and others such as Kroll, and Alvarez andMarshal. A report. – (ET Jul 20, 2017 p 9)

SMALL SCALE INDUSTRY

SMEsVasudev, Sadhguru Jaggi – "Small businesses are key to India's growth" – An article. – (Mint Jul 17,

2017 p 6)

INTERNATIONAL ECONOMICS

ASIANakao, Takehiko – "Asia, 20 years after its financial crisis" – Today, Asian economies have a stronger

outlook but they need to be more resilient and ensure sustainable, inclusive growth. An article. – (Mint Jul 17,2017 p 15)

FUND MANAGEMENT"Global fund management" – A weekly report. – (FT Jul 17, 2017 Supl. pp 1-16)

MANAGEMENT

CORPORATE GOVERNANCE

– AUDIT COMMITTEES

Ramasundar, Rama – "There's no sting in audit committees" – This vital element of corporate governanceneeds to be recognised as an effective tool and given due respect. An article. – (HBL Jul 19, 2017 p 8)

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