Understanding NBFCs (Part II)
The profitability of NBFCs is derived by charging higher rate of interest (up to a ceiling governed by RBI) which customers agree to pay since they have to meet less stringent…
Understanding NBFCs (Non Banking Finance Companies) – I
The default by IL&FS and its group companies has brought NBFCs (Non Banking Finance Companies) into focus again. These companies do not deal with public money (probably the reason why…
IL&FS Default – Analysing the Crisis
The default by IL&FS and group companies in their debt obligation signals the spread of NPA mess beyond the banking space to aggregate financial services sector. Even though the default…
Analyzing Amalgamation of BoB, Vijaya Bank & Dena Bank
The amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank announced yesterday comes more than a year after the last successful merger in the PSB space. The amalgamation involves…
Understanding Banks’ NPA (Part II)
Another important factor leading to NPA is changes in ground realities. While a project is conceived factoring in a particular scenario, it doesn’t materialize or changes drastically by the time…
Understanding Banks’ NPA (Part I)
Bank’s NPA which remains at over Rs 10 lakh crore for the quarter ended June 18 continues to haunt the sector. The problem is even more severe for Public Sector Banks…
Ordinance on NPAs – The Fight Continues…
The promulgation of the Ordinance yesterday for resolution of Non Performing Assets (NPAs) is another measure to tackle the crisis gripping the banking sector. Yet, the ordinance could be another dead ball…
Monetary Policy – From “Accommodative” to “Neutral” stance..
Belying the expectations of a rate cut, the monetary policy committee (MPC) has not only decided to keep the rates unchanged in its meeting today but more importantly, has shifted…
Monetary Policy – From "Accommodative" to "Neutral" stance..
Belying the expectations of a rate cut, the monetary policy committee (MPC) has not only decided to keep the rates unchanged in its meeting today but more importantly, has shifted…
Banking Sector Interconnectedness in India…
The interconnectedness of banking and financial sector is not widely understood or discussed, yet a high risk issue. The rapid spread of contagion during financial crisis in 2008 was primarily…