Banking Sector

The multinational investment bank headquartered in New York on Thursday announced strategic actions in the global consumer banking segment as part of an ongoing strategic review, which will allow Citi to direct investments and resources to the businesses where it has the greatest scale and growth potential.

Sources said that the finance ministry has already started a preliminary exercise to determine the capital requirement of banks in wake of the changes in norms and rise in bad assets during the time of the pandemic. Based on the inputs received by banks, additional capital may be provided to them from budgetary resources.

Accordingly, Fitch expects a moderately worse environment for the India's banking sector in 2021, but headwinds would intensify should rising infections and follow-up measures to contain the virus further affect business and economic activity.

Recognising the role played by NBFCs in providing credit at the bottom of the pyramid it was decided in August 2019 to allow banks to classify lending to registered NBFCs (other than MFIs) as PSL up to 5 per cent of a bank's total PSL, for on-lending to Agriculture/MSME/Housing till March 31, 2020. This dispensation was later extended up to March 31, 2021.

In a regulatory filing of unaudited provisional numbers, the bank said last fiscal the gross advances stood at Rs 17,896 crore while the total deposits were Rs 16,391 crore amounting to a total business of Rs 34,287 crore. The Equitas Small Finance Bank said in the last fiscal the gross advances grew by 16 per cent and the total deposits by 52 per cent.

The LIC-owned IDBI Bank would be the first-ever public sector bank to be put on the block. People in the know said that the Centre is likely to offer its stake in the bank, along with that of the state-run insurance major. At present, the Centre holds 45.48 per cent and the Life Insurance Corporation (LIC) a 49.24 per cent stake in the bank.

In a notification to all scheduled banks along with small finance banks and the National Payments Corporation of India, the central bank said that it is mandatory for all banks to participate in the special clearing operations on March 31, 2021.

This follows the Supreme Court's observation given on Tuesday where it noted that the RBI and the government have not provided any rationale for the overall borrower's debt cap of Rs 2 crore for waiver of interest on interest and directed them to provide such relief to borrowers with the overall exposure of over Rs 2 crore as well.

All banks will stay closed for three consecutive days from March 27 (4th Saturday), March 28 (Sunday) and March 29 (Holi). Further, customer-facing services at bank branches will remain closed on March 31 and April 1 as banks close their books for FY21. April 2 would be a holiday on account of Good Friday and being a Sunday, services will be shut on April 4.