Under the mega merger scheme of PSU banks, 10 banks will be consolidated into 4 banks. But the real question that arises is, whether merging banks can solve the problem that the industry has been facing for several years. Siddharth Purohit, research analyst, Institutional Equities at SMC Global Securities, says probably the NPA issues will not improve purely due to merger but one can be assured that at least post consolidation the NPA crisis will not escalate further.
PSU banks have been losing market share to private banks and despite the government’s support in the form of capital, the near term scenario remains challenging. How will the PSU banks’ balance sheet look post-merger? Responds Purohit: “While the capital position of PSU banks is likely to improve post-merger and capital infusions by the government, the medium term challenges are likely to persist. I feel they are likely to underperform versus their private peers. While the slippages have been under control for PSU banks, the high exposure in telecom and NBFC sectors, which are reeling under pressure, makes me feel that the trouble is not over for the PSU banks and provisions could remain high for few more quarters.”
Most private banks have taken a one-time write down on their stock of deferred tax assets during Q2FY20 and are migrating to the new marginal tax rate of 25-26% from Q3FY20. Ravikant Bhat, research analyst, IndiaNivesh Securities, feels most private banks that were paying the highest marginal tax rate are benefiting from the reduced corporate tax rate. “This shall directly boost their profitability, RoE, and in turn help sustain better core equity capital,” he says.
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The Pandemic Response: R.T.I...
The covid pandemic has made transformation mandatory. We find that the transformation is taking across 3 key dimensions: Restructuring, Technology and Innovation. Banking Frontiers spoke to Chief Operating Officers and Operations Heads of several BFSI organizations to delve deep into R, T and I, and unearthed several interesting insights.
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Psychometric tests cut attrition, enhance productivity
Meenaa Sharma, Chief Human Resources Officer (CHRO) at Reliance Securities, reveals the use of various psychometric assessment tools for hiring and development:
Digital transformation booster
Ashish Belagali, CEO of Pune based 10Xofy, reveals how low code tools empower the roots of digital transformation:
Demonstrating exceptional Emotional Intelligence during covid crisis
Emotional Intelligence is the one factor that can help professionals to tide over the present crisis and bring in success:
AI and BI to drive the Insurance Market
Manav Sachdev, Senior Principal Analyst at Gartner shares new insights about the pluses and minuses of digital approaches in insurance:
China takes baby steps to bring in open banking
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API is the fulcrum of partnership strategy
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You Get Your Own Island
Exploring Wilderness Residencies at National Parks Across the Country
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• सितंबर 2021 तक सकल एनपीए 13.5 फीसदी पर पहुंच सकता है • नियामकीय राहतों को वापस देने से बैंकों के बही खातों पर बढ़ेगा दबाव • बैंकों को राहत वापस लेने के लिए रहना होगा तैयार, जुटानी होगी पूंजी
एनपीए नियमों में मिलेगी ढील!
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W. Visayas' top cop warns of NPA retaliatory attacks
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Military rescues wounded NPA rebel in Sultan Kudarat
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7 rebels slain as Army overruns NPA camp in Sultan Kudarat
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Defenders of the North vow to crush Reds
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NPA leader in Central Luzon captured
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CPP-NPA using 544 child warriors vs gov't since 2010, military tells UN
NO TO PHASE-OUT – Operators and drivers opposed to the phase-out of traditional jeepney under the government’s Public Utility Vehicle Modernization Program (PUVMP) stage a protest caravan along Taft Avenue on Bonifacio Day, Monday, November 30. The Department of Transportation (DOTr) and Land Transportation Franchising and Regulatory Board (LTFRB) have said they will continue with the PUVMP during the pandemic, despite the protests mounted by various transport groups. (Jansen Romero)
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