Public or private: Law ministry may help government on classifying IDBI bank

The government may seek the opinion of the law ministry on whether the now privatized IDBI Bank should be considered a state-run financial institution, or be treated on a par with private banks as classified by the Reserve Bank of India, a senior official said. 

The development comes after the Central Vigilance Commission, in response to a finance ministry query, said IDBI Bank will continue to come under the government’s vigilance oversight. Private banks do not fall under the ambit of the Vigilance Commission. 

IDBI, set up in 1964 under an Act of Parliament, is regarded as a public financial institution under the Companies Act, but the government has ceded its management control in the firm. Hence, the confusion. 

“We continue to consider it a state-run financial entity but may seek further clarity if needed,” a senior government official told ET. In reply to questions on public sector banks in both Houses, the government has clarified that data includes figures for IDBI Bank. 

The Union cabinet had, in August last year, approved acquisition of controlling stake in the bank by state-run insurer Life Insurance Corporation of India (LIC) as promoter, and bringing down the government’s stake in the firm to below 50%. It also gave its nod for relinquishing management control. 

The Reserve Bank reclassified IDBI Bank as a private sector lender for regulatory purposes in January, after LIC acquired a 51% stake in the bank by infusing around Rs 20,800 crore. The government now holds a 46.46% stake in the bank. 

“There is no doubt over management control but clarity on the issue may also help the government if there comes a situation to infuse capital in the bank either directly or through a rights issue,” an IDBI official said on condition of anonymity.

The lender has indicated that it requires around Rs 7,000 crore in the current fiscal itself to meet regulatory requirements and enhance its lending book. 

It had reported a loss of Rs 4,918 crore for the last quarter of FY19 and a loss of Rs 15,116 crore for the full year. 

The Insurance Regulatory and Development Authority of India (IRDAI) had earlier asked LIC to submit a roadmap to bring down its stake in the lender. As per existing laws, an insurer can hold only 15% equity stake in a listed entity.

Read More

IDBI Bank narrows Q4 net loss on lower bad loan provisions

IDBI Bank, majority owned by Life Insurance Corporation of India (LIC), Thursday narrowed net loss to ₹4,918 crore in the quarter ended March due to lower provision for bad loans.

The bank had reported a net loss of ₹5,663 crore in the same period last year.

"Our losses have come down in the quarter as provisions for non-performing loans (NPAs) reduced," its managing director and chief executive Rakesh Sharma told reporters.

Provisions for non-performing loans declined to ₹7,233 crore in the quarter from ₹10,773 crore in the same period last year.

For the full year, lender reported a net loss of₹15,116 crore as against a net loss of ₹8,238 crore in FY18.

In January 2019, LIC completed acquisition of 51% controlling stake in the bank. The state-run life insurer infused ₹21,624 crore into the bank.

Net interest margin improved to 2.26% from 1.19%.

Gross non-performing assets ratio improved to 27.47% as against 27.95%, while net NPA was at 10.11 per cent as against 16.69%.

The bank, which under the Reserve Bank of India's (RBI) prompt corrective action (PCA), expects to bring down its net NPA ratio to below 9 per cent by June-end and below 6 per cent by September quarter.

Our target is to come out of PCA and become profitable. We expect by September or maximum by December quarter we will be out of PCA," Sharma said.

Total provision stood at ₹6,314 crore as against ₹8,026 crore.

Provision Coverage Ratio improved to 82.88 per cent as on March 31, 2019 from 63.40 per cent as on March 31, 2018.

Fresh slippages reduced to ₹1,781 crore from₹18,023 crore in the year-ago period.

Recovery in the quarter stood at ₹927 crore.

The bank has set a recovery target of ₹13,000 crore, including ₹2,000 crore from sale to asset reconstruction companies in the current financial year.

Sharma said the bank is looking to raise₹1,500 crore through sale of non core assets- IDBI Federal Life Insurance and IDBI Mutual Fund.

The bank is also looking at raise ₹2,500-3,000 crore through Tier 1 bonds and ₹6,500 crore from markets.

Its CASA increased to ₹96,730 crore as on March 31, 2019 as against ₹92,102 crore as on March 31, 2018.

Read More

IDBI Bank Recruitment for 500 Assistant Manager Posts 2019

IDBI Bank (51% shares held by Life Insurance Corporation of India) invites online applications from eligible Indian citizens for the post of Assistant Manager. Candidates fulfilling required eligibility criteria may apply On-line through the link given in Bank's website. 

Posts: Assistant Manager

Total No. of Posts: 500

Educational Qualification: A Graduate from a recognized university with minimum 60% marks (55% for SC/ST/PWD)

Age Limit: (As on March 1, 2019): Minimum: 21 years Maximum: 28 years i.e. a candidate must have been born not earlier than 02.03.1991 and not later than 01.03.1998 (both dates inclusive) Relaxation in Upper age limit as per rules.

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: 30-03-2019

Last Date to Apply Online & Fee Payment: 15-04-2019

Tentative Date of Online Test: May17,2019

Read More

IDBI Bank Recruitment for 300 Executives Posts 2019

IDBI Bank (51% shares held by Life Insurance Corporation of India) invites online applications from eligible Indian citizens for the post of Executives. Candidates fulfilling required eligibility criteria may apply On-line through the link given in Bank's website. 

Posts: Executives

Total No. of Posts: 300

Educational Qualification: A Graduate from a recognized university with minimum 60% marks (55% for SC/ST/PWD)

Age Limit: Minimum: 20 Years Maximum : 25 years. The applicant must have been born not earlier than 02 March, 1994 and not later than 01 March, 1999 (both dates inclusive). Relaxation in Upper age limit as per rules.

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: 30-03-2019

Last Date to Apply Online & Fee Payment: 15-04-2019

Tentative Date of Online Test: May16,2019

Read More

RBI categorises IDBI Bank as private sector Bank

IDBI Bank has been categorised as a private sector lender following acquisition of majority stake by Life Insurance Corporation, RBI said.

In January, LIC completed the process of picking up a controlling 51% stake in the nearly crippled IDBI Bank.

"IDBI Bank has been categorised as a 'private sector bank' for regulatory purposes by Reserve Bank of India with effect from 21 January 2019 consequent upon LIC acquiring 51% of the total paid-up equity share capital of the bank," RBI said in a statement.

IDBI Bank has been under the prompt corrective action framework of RBI that bans it from corporate lending and branch expansions, salary hikes and other regular activities.

However, the lender has charted out a revival strategy to bring banking and insurance under one roof, along with its new owner Life Insurance Corporation (LIC).

Last week, IDBI Bank informed about appointment of LIC as a corporate agent under bancassurance channel.

In the long term, the bank and LIC will have a common investment strategy, use each other's resources like real estate, commercial and residential space, bank branches, premises and ATMs and digital marketing, among others, the bank had said.

Both entities will also undertake rationalisation of the common subsidiaries in mutual funds and life insurance arms, as per the strategic plan.

For December quarter of this fiscal, IDBI Bank reported widening of loss to ₹4,185.48 crore as bad loans surged.

The bank's gross non-performing assets (NPAs) shot up to 29.67% of gross advances as at 31 December 2018 against 24.72% in the year-ago period.

Read More

This bank with worst asset quality is waging a war on bad loans

IDBI Bank, the lender with India’s worst bad-loan ratio, is seeking to curtail its soured debt by selling Rs 100 billion ($1.4 billion) of stressed assets and stepping up efforts to recover dues from delinquent borrowers. 

“We have set up a war room to focus on recovering the non-performing loans while another team is keeping a check on loans showing early signs of stress,” Chief Executive Officer Rakesh Sharma said by phone. The lender wants to sell stressed loans “by June-end to quicken the pace of clean-up exercise”. 

Burdened with the world’s worst bad-loan ratio, Indian lenders are stepping up efforts to recover delinquent debt after the Reserve Bank of India announced tougher rules. The Mumbai-based lender’s turnaround efforts gathered pace after Life Insurance Corporation of India, the nation’s largest insurer, bought a controlling stake from Prime Minister Narendra Modi’s government. 

The insurer has infused more than Rs 210 billion into IDBI to bolster its risk buffers and bring it out of the regulator’s emergency programme that restricts lending. 

IDBI Bank will emerge from the Reserve Bank’s prompt corrective action framework by September as the bad-loan ratio narrows and profits rise, Sharma said. Banks sanctioned by the regulator are restricted from lending and expanding their network while they mend their balance sheets. IDBI’s gross bad-loan ratio stood at about 30 per cent as of December 31, an exchange filing shows. 

The lender is also planning to raise about Rs 10 billion by selling its holding in National Stock Exchange and National Stock Depository over the next month, the chief executive said on Sunday. According to Sharma, the bank will also complete the sale of its insurance and mutual fund units in 2019. 

Shares of IDBI Bank rose 4 per cent at 11 a.m. in Mumbai trading. It was the best performer on the 12-stock Nifty PSU Bank Index, which gained 2.6 per cent. 

Sharma also shared his views on the Iran payments business and capital raising. Comments in the following Q&A have been edited and condensed: 

Will IDBI consider raising capital this year? 

The bank will raise tier I and tier II capital in 2019. We will tap the public market to raise these funds and LIC will participate in that round to retain their majority stake in the bank. We would be coming into the market around September after our profit trajectory improves. 

Why is IDBI getting into the Iran oil payments business? 

Indian refiners’ payments for Iranian oil shipments were earlier handled solely by Uco Bank. Now, the government has allowed IDBI Bank also to route these payments. We are working out the processes and by March-end, we should start processing these payments. As refiners are required to deposit any money destined for Iran without interest with us, the bank’s cost of funds and borrowings will come down. 

Source- Economic Times

Read More

IDBI Bank may be renamed by LIC

IDBI Bank could be renamed either LIC IDBI Bank or LIC Bank after the Life Insurance Corporation of India (LIC) bought a majority stake in it. But what remains to be understood is whether the new name will hold even after LIC eventually brings down its stake to 15 percent as per regulatory norms.

Insurance Regulatory and Development Authority of India (IRDAI) had in June 2018 made an exception when it allowed LIC to hold 51 percent in IDBI Bank. Insurance regulations state an insurer can hold only 15 percent equity stake in an entity to ensure there is no concentration of risks.

LIC had in In January 2019 completed the deal with IDBI bank. However, IRDAI Chairman Subhash Chandra Khuntia told reporters on the sidelines of an event last week that the approval for the LIC-IDBI Bank deal had been on the condition that the stake will eventually be brought down to 15 percent.

IDBI Bank board had on February 4 approved a proposal to change its name subject to a ‘no objection’ from Reserve Bank of India, shareholders as well as name availability by Ministry of Corporate Affairs.

While IRDAI has not specified by when LIC will have to bring down its stake in IDBI Bank, it is understood it will take at least four to five years. Whether it will be brought down gradually or at once is to be seen.

With IDBI Bank, this is LIC’s foray into the banking sector. Their idea will be to expand operations and engage in a full-fledged banking business. The mandate of reducing stake to 15 percent in the future could be a dampener in their plans.

Also, if the name has been changed after the majority stake purchase by LIC, once they reduce the stake will the name be changed again?

IDBI Bank and turnaround

LIC’s first mission is to help IDBI Bank manage its losses and also offer support to the bank against non-performing assets. IDBI Bank's third quarter loss widened sharply to Rs 4,185 crore, nearly a three-fold increase compared to a loss of Rs 1,524 crore posted a year-ago due to higher provisions.

Net interest income, the difference between interest earned and interest expended, fell by 18.5 percent year-on-year (YoY) to Rs 1,357 crore in the quarter ended December 2018 with 17 percent degrowth in loans.

However, their gross non-performing assets (NPA) as a percentage of total assets declined to 29.67 percent in Q3 against 31.78 percent in Q2FY19 and net NPA also dropped to 14.01 percent against 17.30 percent sequentially.

With LIC coming on board, the idea is to help IDBI Bank achieve a turnaround. At this stage, the 15 percent stake mandate will have to wait for at least 7-10 years. After that, it is not clear whether LIC would want to reduce its stake and exit banking operations or will it be granted an exception for a few more years.

Read More

IDBI Bank reports threefold increase of loss in Q3

IDBI Bank Monday posted widening of loss by nearly threefold to Rs 4,185.48 crore for the third quarter ended December 2018 as bad loans surged.

The bank had reported a net loss of Rs 1,524.31 crore in the corresponding quarter of the previous fiscal.

Total income decreased to Rs 6,190.94 crore for the quarter, compared with Rs 7,125.20 crore in the corresponding quarter a year ago, IDBI Bank said in a statement.

The bank's gross non-performing assets (NPAs) shot up to 29.67 per cent of gross advances during the quarter, against 24.72 per cent in the year-ago period.

However, net NPAs declined to 14.01 per cent of the total advances, from 16.02 per cent in the December 2017 quarter.

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

As a Result,result, the bank's provision for bad loan increased to Rs 5,074.80 crore, compared with Rs 3,649.82 crore a year ago.

However, slippages were Rs 2,211 crore which were lowest in the past seven quarters, Recovery from NPAs improved to Rs 3,440 crore during the quarter, compared with Rs 537 crore in the same period a year ago.

The ownership of the bank has changed from the Government of India to LIC.

The statement further said Life Insurance Corporation of India (LIC) completed acquisition of 51 per cent controlling stake in IDBI Bank on January 21 and the bank received total capital of Rs 21,624 crore from the insurer.

On the backdrop of capital infusion from LIC, it said that the bank has achieved regulatory capital requirement as on December 31, 2018, and its common equity tier-1 (CET-1) capital improved to 9.32 per cent as on December 31, 2018, against 6.62 per cent a year ago.

Read More

LIC completes major acquisition in IDBI Bank

IDBI Bank Monday said insurance behemoth LIC has completed acquisition of 51 per cent controlling stake in the bank, making it the lender's majority shareholder. "The deal, conceptualised in June 2018, is envisaged as a win-win situation for both IDBI Bank and LIC with an opportunity to create enormous value for shareholders, customers & employees of both entities through mutual synergies," IDBI Bank said in a BSE filing.

In August last year, the Cabinet approved the acquisition of controlling stake by Life Insurance Corporation (LIC) as a promoter in the bank through a combination of preferential allotment and open offer of equity.

LIC had been looking to enter the banking space by acquiring a majority stake in IDBI Bank, as the deal is expected to provide business synergies despite the lender's stressed balance sheet.

The bank had reported a net loss of Rs 3,602.49 crore during the September quarter of 2018-19. Its gross non-performing assets hit 31.78 per cent (Rs 60,875.49 crore) of the gross advances as on September 30, 2018, as compared with 24.98 per cent in the year-ago period.

IDBI Bank has about 1.5 crore retail customers and about 18,000 employees. With this deal, LIC will have a strategic investment in a large bancassurance channel, thereby increasing its productivity and reducing distribution costs.

Over 800 branches of IDBI Bank can be used as touch points for selling LIC policies, the public sector lender said.

IDBI Bank said it would significantly increase its investments in building data analytics capabilities to analyse customer behaviour of both the entities.

This will enable the bank to enhance its product offerings, reduce distribution cost, de-risk portfolio and support retail business build, it added.

IDBI Bank said its retail loan portfolio is expected to reach 50 per cent by fiscal 2019-20.

"IDBI Bank and LIC have started working to ensure full realisation of their synergies over the next 12 months. Improved financial health will pave the way for the bank to exit from prompt corrective action (PCA) in a time-bound manner and be a future-ready, top-ranked bank. LIC and IDBI Bank are committed to serve the interests of all stakeholders," the bank said.

Of the 21 state-owned banks, 11 are under the PCA framework. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

Read More

Top 10 Banks in India 2018

In India banking sector is one of the most regulated sectors in the economy. When Indian Government allowed private banks to operate in the nation many banks came into existence and gave a tough competition to various nationalized players. Private Banks won over most nationalized banks because of the quality of services they offered to their customers. With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks operating in India. So, which banks provide the best services?

Although Indian banking is known as world’s best banking but we can’t point out any single bank which provides best banking among all. Because i don’t think that even a single person is satisfied with service sector industry. Our expectation is too high and always running on increasing trend. Like; all customers are not same, all banks are not same. The behavior of employees perceive in different manner by different people. Because due to competition there is a huge change can feel in working style of PSU & Private sector banks which covers only limited area & they have too many complaints also. So we can’t point out any single name. Nowadays banking industry is totally changed, I m talking about the service quality of PSU banks. Lots of customer centric approach is applied today, now banks are more concerned about the customer retention. So if we go through the customer service delivery system of bank of Baroda it will now at par with the peer banks. Their services is now become centralized, a new retail loan factory concept is introduced by the bank which will help to improve the quality of loan,it also reduces the delivery time and make it more customer friendly.

In Short, Try to obtain the benefits of monopolistic competition between PSUs and private sector banks. It is good for retail customers because they always have choice to shift their banking.

We are going to give rank to the banks as per belove Individual Parameters

• Disclosure about charges and interest rates
• Pro-active communication about new products/services
• Trustworthiness
• Complaint Resolution
• Wide ATM coverage
• Professionalism of the company
• Convenient banking hours
• Well-trained staff
• Courteous and friendly staff
• Faster service at branches
• Knowing the customer and their needs
• Good Internet banking
• Efficient processes
• Effective communication on developments
• Innovative company
• Good phone banking

Here’s the list:

1. HDFC Bank

HDFC was established as Housing Development Finance Corporation in the year 1994.The operations of the bank started in 1995 after it was scheduled as a commercial bank.The bank has served well since then and still continues to bring in more and more costumers with its phenomenal services. Bank’s distribution network was at 4,555 branches and 12,087 ATMs across 2,597 cities / towns. HDFC is the largest bank in India in terms of assets.The total assets of the bank are estimated to be around $66.7 Billion.The Current CEO of the bank is Aditya Puri.

2. State Bank Of India

The largest Indian Bank which has the maximum number of branches in the country as well as abroad.The Bank has many sub-branches as well which serve the maximum number of consumers in India.The Bank was nationalized in the year 1955.The total assets of the bank are much more than any other bank.As of 31 March 2018, SBI has more than 22400 branches,including 52 foreign offices spread across 36 countries and 59541 ATMs. 

3. Bank Of Baroda

Bank of Baroda is one of the largest public sector banks in India. The services of the bank have always been satisfying and par excellence. The bank was set up in 1908 and the current CEO of the bank is Mr. P. S. Jayakumar. The total assets of the bank are somewhat closer to $70 Billion. The bank has 5498 branches including  107 overseas branch and over 10441 ATMs including the ones outside India.

4. Axis Bank

The Bank was founded in 1993 and the headquarters resides in Mumbai, Maharashtra. It has more than 3700 branches in India.The bank was an investment of some prominent international companies.The total worth of the bank is $96 Billion.The bank is known for its hassle free services throughout the country. Bank has 3710 branches, 13,857 ATMs, and nine international offices.

5. Punjab National Bank

One of the oldest banks in the country, the establishment of the Punjab National Bank goes back to 1894, more than 100 years from now.This is one of the oldest public sector banks in India.The total assets of the bank are more than $101 Billion. Bank has over 6,983 branches and over 9598 ATMs nationwide. The Chief Executive Officer of the bank is Sunil Mehta.

6. ICICI Bank

ICICI stands for Industrial Credit and Investment Corporation of India and it was established in 1994.It is one of the best banks in the country with assets worth more than $160 Billion. Sandeep Bakhshi works as the CEO of the bank.The Bank has been operational in 18 countries as of now.The Bank also acquired Bank of Rajasthan in the year 2010. ICICI has adopted a Go Green initiative in which it has started most of its operations in electronic form.Even the bank statements are sent via e-mails. Bank has a network of 4867 Branches and 14,417 ATM's has a presence in 19 countries including India.

7. Kotak Mahindra Bank 

Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai, Maharashtra, India. In February 2003, Reserve Bank of India (RBI) issued the licence to Kotak Mahindra Finance Ltd., the group's flagship company, to carry on banking business. Kotak Mahindra Bank has a network of 1425 branches across 689 locations and 2,363 ATMs in the country (as of 31 March 2018). In 2018, it is the second largest private bank in India by market capitalization after HDFC Bank.

8. Canara Bank

Like other major public sector banks, Canara Bank is also state owned and was set up in the year 1906 by Subba Rao.The headquarters of the Bank reside in Bengaluru, Karnataka. The Bank provides hassle free service to its customers . Bank has revolutionized its services and spreads its hands more to cover more areas.As per the data of 2018, the Bank has 6212 branches and 9395 ATMs across the nation.The total assets of the bank $88 Billion which are set to increase in the coming years.

9. Bank Of India

Bank of India is one of the major public sector banks in India.The bank became government owned after the nationalization of Banks in 1969, though the bank was founded much before that in 1906.CEO of Bank of India is Dinbandhu Mohapatra. The total assets of the bank are around $97 Billion .Bank of India has 5127 branches as on 31 May 2018, including 29 offices outside India and more than 7000 ATMs nationwide.

10. IDBI Bank 

IDBI stands for Industrial Development Bank Of India and was established in the year 1964. It is a Public sector bank. The total assets of the bank reach to about $50 Billion. There are 1916 branches including one overseas branch at Dubai and 3276 ATMs across the country. Investment Banking and Agro-Loan facilities are the USP of the bank. Mr. Maheshkumar K. Jain is the Chief Executive Officer of the Bank.

So, guys this was some very basic information about the Top Banks in the Country. We just hope to satisfy you with whatever we write and you can also help us improve by giving the feedback to our written posts.If you loved our writings, do share it with your friends.

(data as on 31st May,2018)

Read More

IDBI Bank reports large loss as bad loan continue to rise

State-owned IDBI Bank on Wednesday reported widening of net loss to Rs 3,602.49 crore during the September quarter of 2018-19, as bad loans jumped substantially.

It had posted a net loss of Rs 197.84 crore in the corresponding quarter of the previous financial year.

Total income of the bank was also down at Rs 6,162.14 crore in the reported quarter as against Rs 8,302.42 crore a year ago, IDBI Bank said in a regulatory filing.

The bank's gross non-performing assets (NPAs) hit 31.78 percent (Rs 60,875.49 crore) of the gross advances by 30 September, 2018 as against 24.98 percent (Rs 51,367.69 crore) in the year-ago period.

Net NPAs stood at 17.30 percent (Rs 27,294.58 crore) of the net advances, up from 16.06 percent (Rs 29,488.83 crore) in the corresponding period last year.

Sequentially also, the bad loan proportion of the bank worsened.

Thus, the provisioning for NPAs for the quarter was raised to Rs 5,481.64 crore from Rs 2,842.15 crore during the July-September quarter of 2017-18.

The overall provisioning and contingencies stood at Rs 6,579.83 crore for the quarter, up from Rs 3,261.42 crore in the year-ago period.

Read More