KOLKATA: The country's economy, which has been hit by the COVID-19 outbreak, needs support from the public sector banks (PSBs) to boost credit growth, an official said on Friday. The number of PSBs has come down after amalgamation of several lenders, and their ability to lend has increased manifold, Union Bank of India MD and CEO Rajkiran Rai G said. Recently, Oriental Bank of Commerce and United Bank of India were merged into Punjab National Bank, Syndicate Bank into Canara Bank, Allahabad Bank into Indian Bank and Andhra and Corporation banks into Union Bank of India. He said the lenders will be able to meet the expectations of the business community. Speaking at a webinar session organised by the BCCI, Rai said that there will be a shift of credit growth in favour of the PSBs, adding that depositors will expect an interest rate of 5.5 per cent. According to him, the issues of the depositors cannot be overlooked, and more stress will have to be given on the liability side to … [Read more...] about Economy needs support from PSBs: Union Bank chief
Indian banking industry
The gross domestic product (GDP) data INGDPQ=ECI released on Friday showed consumer spending slowing, private investments and exports contracting in the March quarter. Economists said the figures were likely to be revised downwards as the data collection was affected by the lockdown in late March. … [Read more...] about Indian economy slows in March quarter, with worst to come
Many feared that India will become a problem for the world when the coronavirus hits India. But today, through sheer confidence and resilience, you have transformed the way the world looks at us. You have proven that the collective strength and potential of Indians are unparalleled compared even to the powerful and prosperous countries of the world. Be it clapping and lighting a lamp to honour Corona Warriors by India’s armed forces, Janta Curfew or by faithful adherence to rules during the nationwide lockdown, on every occasion you have shown that Ek Bharat is the guarantee for Shrestha Bharat. … [Read more...] about ‘A year of historic firsts for Indians’: PM Modi in letter to citizens
By Nirmal Jain Have you seen the glee in the eyes of politicians when they announce loan waiver schemes for farmers? No prizes for guessing whether their eyes are filled with mercy for farmers or avarice for votes. A few weeks ago, the chairperson of the largest state-owned bank sensibly voiced her concern that the loan waiver could upset credit discipline. Some of the legislators had the audacity to demand her apology for this. For them, we are reminded of Jesus’ last words 'Father, forgive them for they do not know what they are doing'. But there are many people in the government and bureaucracy who know what they are doing. The smaller issue is that they are making bad banks, worse. The larger issue is if the Indian farmer is destined to live in destitution and die in debt? Let us take the smaller issue first. In theory, the burden of loan waiver is borne by the state governments. Its immediate impact may be a slight fall in NPAs but it does spoil credit culture and makes … [Read more...] about View: Is Indian farmer destined to live in destitution and die in debt?
By Americai V Narayanan & Kavya Narayanan Measures to mitigate the Covid-19-instigated lockdown and subsequent economic shutdown announced by finance minister Nirmala Sitharaman earlier this month have woefully fallen short of stimulating demand so far. Even the fiscally conservative President Donald Trump has announced nearly $300 billion in direct cash transfers to US citizens at the bottom of the pyramid. Prime Minister Narendra Modi would do well to have his government attack the problem from the demand side by putting money directly in the hands of the people. However, a valid concern is if there is enough fiscal room for GoI to implement such a direct cash transfer scheme. To stimulate demand without straining government resources in the long run, one can consider immediate cash transfers as an interest-free loan, with repayment in the form of labour through anational employment guarantee scheme (NEGS). NEGS should especially be targeted towards urban and semi-urban … [Read more...] about Government must balance fiscal prudence with people’s immediate necessities