Punjab National Bank (PNB) likely to takeover two or three PSU banks

Punjab National Bank (PNB) is likely to takeover two to three smaller state-run banks -- Oriental Bank of Commerce (OBC), Andhra Bank and Allahabad Bank -- in the next three months, reports Reuters.

The government has been striving to revive the health of public sector banks. In February, it announced a recapitalisation tranche of Rs 48,239 crore for as many as 12 public sector banks in a bid to take them out of Reserve Bank of India’s (RBI) Prompt Corrective Action (PCA) framework. Their lending ability was constrained by RBI when they were put under this framework.

The 12 banks are Allahabad Bank, Corporation Bank of India, Bank of India, Bank of Maharashtra, Punjab National Bank, Union Bank of India, Andhra Bank, Syndicate Bank, Central Bank of India, United Bank of India, UCO Bank and Indian Overseas Bank.

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Allahabad Bank's net loss widens in Q4

State-run Allahabad Bank on Friday said it has posted a net loss of Rs 3,834.07 crore in the fourth quarter of the financial year 2018-19 (FY 19), widening from a net loss of Rs 3,509.63 crore in the year-ago period.

The lender's operating profit, in the quarter under review, stood at Rs 634.26 crore up from Rs 122.9 crore in the corresponding period of the financial year 2017-18 (FY18).

It said provision for bad loans increased to Rs 5,278.88 crore in the quarter ended March, 31, 2019 from Rs 5126 crore in same quarter of previous fiscal.

The bank's capital adequacy ratio stood at Rs 12.51 per cent at the end of FY19, improving from 10.42 per cent in the December quarter

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Allahabad Bank Recruitment for Specialist Officer Posts 2019

Allahabad Bank has published Advertisement for below mentioned Posts 2019. Other details like age limit, educational qualification, selection process, application fee and how to apply are given below in the advertisement.

Posts: Specialist Officer

• Security Officer (JMG Scale-I): 10 Posts
• Civil Engineer (JMG Scale-I): 04 Posts
• Manager (Fire Safety) (MMG Scale-II): 01 Post
• Manager (Law) (MMG Scale-II): 15 Posts
• Company Secretary (MMG Scale-II): 01 Post
• Manager (IT) (Network Manager) (MMG Scale-II): 02 Posts
• Manager (IT) (Security Administrator) (MMG Scale-II): 02 Posts
• Manager (IT) (System Administrator) (MMG Scale-II): 02 Posts
• Manager (IT) (Big Data Analytics) (MMG Scale-II): 02 Posts
• Financial Analyst (MMG Scale-II): 51 Posts
• Manager (Equity/ Mutual Fund Desk): 02 Posts

Total No. of Posts: 92

Educational Qualification: Please read Official Notification for Educational Qualification details.

Application Fees:

General/ OBC/EWS – Rs. 600/-

SC/ST/PH/Female – Rs. 100/-

Payment will be made through Debit Card/Credit Card/Net banking/E Challan/SBI Collect

Age Limit: (As on 01/April/2019)

Manager – (Equity/ Mutual Fund Desk) – 24-35 Years

Manager(Fire Safety)/ Company Secretary – 21-35 Years

Rest All Posts – 20-35 Years

Age Relaxation (Upper Age Limit): 

SC/ST – 05 Years

OBC – 03 Years

Selection Process: Candidates will be selected based on an interview.

How to Apply: Interested Candidates may Apply Online Through official Website.

Advertisement: Click Here

Apply Online: Click Here

Important Dates:

Starting Date of Online Application: 09-April-2019

Last Date to Apply Online: 29-April-2019

Fee Payment Last Date – 29-April-2019

Admit Card – June ,2019

Exam Date – June ,2019

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2 more PSU banks out of RBI’s PCA watch; one private bank also finds its way out

The RBI Tuesday lifted lending curbs on two more public sector banks (PSBs), Allahabad Bank and Corporation Bank, by removing them from its weak-bank watch list. Private sector Dhanlaxmi Bank too has been taken out of the Prompt Corrective Action (PCA) Framework. Earlier on January 31, Bank of India, Bank of Maharashtra and Oriental Bank of Commerce were taken out of the PCA Framework. In a statement, the RBI said the Board for Financial Supervision (BFS) reviewed the performance of banks under PCA and noted that the government has infused fresh capital on February 21 into various banks including some of the banks currently under the PCA framework.

Of these banks, Allahabad Bank and Corporation Bank had received Rs 6,896 crore and Rs 9,086 crore, respectively. Capital infusion, the RBI said, has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with. "Accordingly, based on the principles adopted by the BFS in its earlier meeting dated January 31, 2019, it was decided in the meeting held on February 26, 2019 that Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring," RBI said.

The gross non-performing assets of Corporation Bank stood at 17.36 per cent of the gross advances at the end of December quarter of this fiscal, up from 15.92 per cent in the same period of previous fiscal. For Allahabad Bank, the gross NPA rose to 17.81 per cent from 14.38 per cent a year ago. RBI further it has also been decided to take Dhanlaxmi Bank out of the PCA Framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the Risk Thresholds of the PCA Framework.

Dhanlaxmi Bank's gross non-performing assets (NPAs) rose to 8.11 per cent of the total advances, from 6.96 per cent at the end of the third quarter of 2017-18. RBI also it will continuously monitor the performance of the banks under various parameters," the central bank said. Five public sector banks -- United Bank of India, UCO Bank, Central Bank of India, Indian Overseas Bank and Dena Bank -- are still remain under PCA framework, which imposes lending restrictions and prevents them from expanding, among other curbs.

The PCA framework was one of the contentious issue between the government and the RBI. The government wanted the central bank to align the PCA framework to the global norms. The PCA framework kicks in when banks breach any of the three key regulatory trigger points -- namely capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA). Globally, PCA kicks in only when banks slip on a single parameter of capital adequacy ratio, and the government and some of the independent directors of the RBI board, like S Gurumurthy, are in favour of this practice being adopted for the domestic banking sector as well.

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Allahabad Bank narrows losses in Q3FY19

State-run Allahabad Bank on Wednesday announced a net loss of Rs 732.81 crore for the quarter ended December 31, 2018, narrowing the net loss of Rs 1,263.79 crore reported for year ago period.

The lender, which is under the prompt corrective action (PCA) of the Reserve Bank of India (RBI), had reported a net loss of Rs 1,822.71 crore for the second quarter of the current fiscal.

The city-headquartered lender posted an operating profit of Rs 768.97 crore, down by 16.6 per cent year-on-year from Rs 922.17 crore in the corresponding quarter of the last fiscal. But the same increased by 44 per cent quarter-on-quarter from Rs 533.97 crore.

Also read- Q3FY19 Results of all Public & Private Sector banks in India 

On a year-on-year basis, total income at Rs 4,756.88 crore during the period remained flat compared with Rs 4,755.33 crore in the year-ago quarter. It increased by nearly 8 per cent on the quarter-on-quarter basis from Rs 4,410.72 crore in the July-September period.

During the third quarter of FY19, gross non-performing assets (NPAs) increased on a quarter-on-quarter basis in absolute terms to Rs 28,218.79 crore from Rs 27,236.19 crore in the September quarter.

The net NPA was at Rs 10,865.26 crore in the third quarter , down from Rs 11,082.74 crore by the end of September quarter.

Gross NPA of the bank as a percentage of total loans was at 17.81 per cent by the end of December quarter against 17.53 per cent in the previous quarter. During the period under review, net NPA ratio at 7.70 per cent also decreased sequentially.

Provisions and contingencies were at Rs 1,495.34 crore, down substantially from Rs 2,413.46 crore in Q3FY18. At Rs 1,900 crore, provisions for NPAs decreased by 7 per cent year-on-year.

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Govt mulls additional capital infusion in five PSU banks

The government is considering additional capital infusion of up to Rs 30,000 crore in public sector banks as they have been unable to raise required funds from the markets, sources said.

As part of the capital infusion plan announced by the Finance Ministry in October 2017, the government envisaged that public sector banks (PSBs) would raise Rs 58,000 crore from the stock markets by March 2019 to meet Basel III norms.

However, due to subdued market conditions, banks have been unable to raise enough funds from the markets so far.

In addition, non-performing assets of many banks have seen a spurt in the first two quarters of this fiscal, putting stress on their bottomlines.

However, the banks have got a breather in respect of Capital Conservation Buffer (CCB), a part of Basel III norms. The RBI, at its last board meeting, deferred the requirement to meet the CCB target by one year, leaving about Rs 37,000 crore in the hands of banks.

Despite this relaxation, PSBs need more funds to meet global capital norms called Basel III as the RBI has retained the capital to risk weighted assets ratio (CRAR) at 9 percent, sources said, adding, the shortfall could be around Rs 30,000 crore.

However, sources said the matter is being considered by the government and the final decision is expected in the next few weeks.

The government had decided to take a massive step to capitalise PSBs in a front-loaded manner, with a view to support credit growth. This entailed mobilisation of capital to the tune of about Rs 2,11,000 crore over the next two years -- through budgetary provisions of Rs 18,139 crore, recapitalisation bonds of Rs 1,35,000 crore, and the balance through raising of capital by banks from the market while diluting government equity estimated at Rs 58,000 crore.

As per this plan, the remaining capital infusion is about Rs 42,000 crore.

Earlier this year, the government pumped in Rs 11,336 crore into five PSBs -- PNB, Allahabad Bank, Indian Overseas Bank, Andhra Bank and Corporation Bank -- to improve their financial health.

PNB, hit by the Nirav Modi scam, got the highest amount of Rs 2,816 crore, while Allahabad Bank received Rs 1,790 crore. Andhra Bank got capital support of Rs 2,019 crore, Indian Overseas Bank Rs 2,157 crore and Corporation Bank Rs 2,555 crore.

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These banks will be major beneficiaries of Modi govt’s capital infusion

Banks such as the Punjab National Bank, Corporation Bank, Bank of Maharashtra, Allahabad Bank and Bank of India may be major beneficiaries of the government’s enhanced capital infusion plan.

The Modi government has moved to provide additional capital to weak banks after failing to make headway with the Reserve Bank of India over the relaxation of restrictions placed on these banks under the Prompt Corrective Action (PCA) norms.

Finance Minister Arun Jaitley Thursday announced that the government will infuse an additional Rs 41,000 crore of capital into state-run banks, over and above the budgeted amount of Rs 65,000 crore in the fiscal year 2018-19.

With only part of the infusion done so far, more than Rs 83,000 crore of capital will be infused in some state-run banks by the next quarter.

Apart from PNB, the other banks are among the 11 that are under the RBI’s PCA framework. The PNB, hit by the massive Rs 14,000 crore Nirav Modi fraud, has key parameters such as capital adequacy ratio under severe pressure forcing the government to infuse capital to prevent the lender from being pushed into the PCA framework.

Infusion to aid weak banks

The capital is aimed at meeting regulatory capital norms, providing capital to better performing PCA banks to ensure that their key metrics like net NPAs and capital adequacy ratio are well above the regulatory norms so as to facilitate their exit from the framework and to ensure that other banks don’t slip into it, Jaitley said.

Secretary, financial services, Rajiv Kumar said the aim is to help at least four to five banks move out of the PCA framework.

The government contends that the removal of lending restrictions will help in improving the credit flow to important sectors of the economy including the politically important constituency of micro, small and medium enterprises.

The relaxation of the PCA framework has been a major point of difference between the government and the RBI. In its 19 November meeting, the government had argued that the RBI’s PCA framework is far stricter than the global norms.

For instance, RBI takes into account net NPAs as well as negative returns on assets besides capital adequacy to determine if a bank should be placed under the PCA framework, unlike other countries that only look at capital adequacy.

The RBI, however, had defended its stance arguing that restrictions on lending are helping the weak banks strengthen their balance sheet. The matter was eventually referred to the board of financial supervision headed by the governor.

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Allahabad Bank posts huge Q2 loss on higher NPA provisions

State-owned Allahabad Bank on Tuesday reported a net loss of Rs.1,822.71 crore in the September quarter of 2018-19 financial year, on higher provisioning for bad loans. The bank had posted a net profit of Rs.70.20 crore in the July-September quarter of 2017-18.

However, as compared to the June quarter this fiscal, the bank narrowed the losses from Rs.1,944.37 crore.

Total income also fell to Rs.4,410.72 crore during the quarter as against Rs.5,067.78 crore in the same period of 2017-18, Allahabad Bank said in a BSE filing.

Gross non-performing assets (NPAs) jumped to 17.53 per cent of the gross advances as on September 30, 2018 as against 14.10 per cent by the same period a year ago.

Net NPAs or bad loans fell to 7.96 per cent of the net loans as against 8.84 per cent in the year-ago period.

In absolute value, gross bad loans stood at Rs.27,236.19 crore by the end of September quarter 2018-19, as against Rs.21,454.27 crore in the year-ago period. Net NPAs were Rs.11,082.74 crore as against Rs.12,662.18 crore.

Due to rise in bad loans, provisioning for NPAs were raised to Rs.1,991.88 crore for the reported quarter from Rs.1,469.52 crore in the same period of 2017-18.

The overall provisioning and contingencies rose to Rs.2,356.04 crore for the quarter as against Rs.1,497.11 crore in the year-ago period.

Non-performing loan provision coverage ratio of the bank is 67.81 per cent, it said.

Citing RBI circular permitting banks to continue the exposures to MSME borrowers to be classified as standard assets, Allahabad Bank said it has retained advances of Rs.576.43 crore as standard asset as on September 30, 2018.

“In accordance with the provisions of the circular, the bank has not recognised interest income of Rs.18.84 crore and is maintaining a standard asset provision of Rs.27.88 crore as on September 30, 2018 in respect of such borrowers,” it said.

The bank also informed that it has spread the provision for fraud/red flagged accounts of Rs. 802.70 crore in 27 accounts as on September 30, 2018.

Further, a provision of Rs.161.30 crore (cumulative Rs.390.58 crore up to September 30, 2018) has been reversed out of Rs.390.58 crore, Allahabad Bank said.

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