Global ratings firm Moody's on 9 November 2011 downgraded the entire Indian banking system's rating outlook from stable to negative indicating a deterioration in asset quality in the months ahead. In September 2011, Standard & Poor's (S&P) downgraded the country's largest lender, the State Bank of India, by one notch.
Arguing its case for the outlook downgrade the Moody's mentioned that with asset quality was anticipated to deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in financial year 2012 and 2013.
The Moody's decision was announced at a time when the Eurozone financial system is in turmoil and a large number of European banks are in dire straits.
The government rejected it claiming that the country's lending institutions are much healthier than their global counterparts. Indian bankers termed the move unwarranted and premature at this point of time.
The market apprehended that the downgrade by the Moody's would render overseas borrowings costlier for Indian banks. The negative sentiment sparked a major sell-off in banking stocks, resulting in the banking index on the Bombay Stock Exchange tumbling by 2.62 per cent on 9 November.
Ratings Firm Moody's downgraded Indian Banking System's Rating outlook from Stable to Negative
Global ratings firm Moody's on 9 November 2011 downgraded the entire Indian banking system's rating outlook from stable to negative indicating a deterioration in asset quality in the months ahead. In September 2011, Standard & Poor's (S&P) downgraded the country's largest lender, the State Bank of India, by one notch.
Arguing its case for the outlook downgrade the Moody's mentioned that with asset quality was anticipated to deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in financial year 2012 and 2013.
The Moody's decision was announced at a time when the Eurozone financial system is in turmoil and a large number of European banks are in dire straits.
The government rejected it claiming that the country's lending institutions are much healthier than their global counterparts. Indian bankers termed the move unwarranted and premature at this point of time.
The market apprehended that the downgrade by the Moody's would render overseas borrowings costlier for Indian banks. The negative sentiment sparked a major sell-off in banking stocks, resulting in the banking index on the Bombay Stock Exchange tumbling by 2.62 per cent on 9 November.
Ratings Firm Moody's downgraded Indian Banking System's Rating outlook from Stable to Negative
Global ratings firm Moody's on 9 November 2011 downgraded the entire Indian banking system's rating outlook from stable to negative indicating a deterioration in asset quality in the months ahead. In September 2011, Standard & Poor's (S&P) downgraded the country's largest lender, the State Bank of India, by one notch.
Arguing its case for the outlook downgrade the Moody's mentioned that with asset quality was anticipated to deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in financial year 2012 and 2013.
The Moody's decision was announced at a time when the Eurozone financial system is in turmoil and a large number of European banks are in dire straits.
The government rejected it claiming that the country's lending institutions are much healthier than their global counterparts. Indian bankers termed the move unwarranted and premature at this point of time.
The market apprehended that the downgrade by the Moody's would render overseas borrowings costlier for Indian banks. The negative sentiment sparked a major sell-off in banking stocks, resulting in the banking index on the Bombay Stock Exchange tumbling by 2.62 per cent on 9 November.Ratings Firm Moody's downgraded Indian Banking System's Rating outlook from Stable to Negative
Global ratings firm Moody's on 9 November 2011 downgraded the entire Indian banking system's rating outlook from stable to negative indicating a deterioration in asset quality in the months ahead. In September 2011, Standard & Poor's (S&P) downgraded the country's largest lender, the State Bank of India, by one notch.
Arguing its case for the outlook downgrade the Moody's mentioned that with asset quality was anticipated to deteriorate over the next 12-18 months, thereby causing an increase in provisioning needs for the banks in financial year 2012 and 2013.
The Moody's decision was announced at a time when the Eurozone financial system is in turmoil and a large number of European banks are in dire straits.
The government rejected it claiming that the country's lending institutions are much healthier than their global counterparts. Indian bankers termed the move unwarranted and premature at this point of time.
The market apprehended that the downgrade by the Moody's would render overseas borrowings costlier for Indian banks. The negative sentiment sparked a major sell-off in banking stocks, resulting in the banking index on the Bombay Stock Exchange tumbling by 2.62 per cent on 9 November.
MoU signed between IIFCL, LIC & IDFC to provide Takeout Finance for Infrastructure Projects
A memorandum of understanding (MoU) was signed between IIFCL, LIC and IDFC on 17 September 2011 in the presence of Union Finance Minister Pranab Mukherjee to provide Takeout Finance for infrastructure projects.
The MoU between IIFCL and LIC and IDFC is to provide for takeout up to 50 per cent of the total project cost in the ratio of 20:20:10 by these institutions respectively. The mechanism is expected to help financing to the tune of Rs.30000 crore under the scheme. This will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing to a great extent.
Takeout Finance Scheme was launched on 12 October 2010 when an MoU between IIFCL and PNB, Allahabad Bank, Union Bank, Indian Bank and UCO Bank was signed. This scheme is aimed at removing the hurdles in infrastructure financing by addressing asset liability mismatch (ALM) and group exposure issues. In this scheme, IIFCL can take out debt up to 20 per cent of the total project cost after the COD of the project with certain limitations.
The Centre fixed the target for agricultural credit flow at Rs 475000 crore, of which Rs.112731 crore had already been extended. The States are to create awareness about the 4 per cent short-term crop loans being extended to farmers, who repay their loans on time.
73,000 habitations were set to be covered by banking services under Swabhimaan which is an ambitious plan for financial inclusion launched by the Central Government.
State leaders in low credit deposit ratio states such as Madhya Pradesh, Chhattisgarh, Goa and Dadra & Nagar Haveli to utilise State Level Bankers' Committee to boost credit-deposit ratio. All state governements were expected to cooperate to popularise e-payment.
K. S. Sreenivasan appointed non-official director on board of Oriental Bank of Commerce
The Ministry of Finance (Department of Financial Services) on 27 september 2011 appointed K. S. Sreenivasan as part-time, non-official director on the board of Oriental Bank of Commerce. Sreenivasan has been appointed for a period of three years.
He had earlier served on the board of Union Bank of India between 2006 and 2009 and also on the board of Madras School of Economics. Sreenivasan, a practising chartered accountant with nearly 26 years of experience, is also a life member of the Indian Council of Arbitration.
source:
http://gkspecialist.blogspot.com/2011/11/banking-industry-news-for-general_1951.html
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