Volume XXX Number 45 August 10, 2015

Weeklies

BI – Business India

BusW – Business World

BusT – Business Today

CMar – Capital Market

EPW – Economic and Political Weekly

SE – Southern Economist

Eco – Economist

For(Asia) – Fortune AsiaCI – Corporate India

Newspapers

BS – Business Standard

ET – Economic Times

FE – Financial Express

FT – Financial Times

H – Hindu

HBL – Hindu Business Line

HT – Hindustan Times

IE – Indian Express

TI – Times of India

Mint – Mint

Classifications

Economy Banking Agriculture & Rural Development Industry Small Scale Industry

International Economics Labour & Personnel Management Management Miscellaneous Books

CONTENTS

A. ECONOMY 1

B. BANKING 2

C. AGRICULTURE & RURAL DEVELOPMENT 21

D. INDUSTRY 22

E. SMALL SCALE INDUSTRY 24

F. INTERNATIONAL ECONOMICS 24

G. LABOUR & PERSONNEL MANAGEMENT 25

H. MANAGEMENT 25

I. MISCELLANEOUS 25

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BANKERS' BRIEF Vol. XXX No. 45 August 10, 2015

ECONOMY"Delay in reforms to hurt India's growth prospects, says Moody's: Moody's says political logjam

hurting business confidence; new GDP series misrepresenting economic environment" – Thegovernment's inability to push through key legislative reforms, such as the land acquisition bill, flexible labourlaws and the goods and services tax (GST) bill, will hurt India's medium-to-long-term growth prospects, saidMoody Analytics Inc. Moody said some green shoots, such as the return of microfinance lending, are promising.A report. – (Mint Jul 31, 2015 p 5)

"India has the potential to take over China's place as manufacturing hub" – With the Chinese economyslowing down, finance minister Arun Jaitley said that India has the opportunity to become a global manufacturinghub but once again regretted that the Congress party was not permitting the roll out of the goods and servicestax (GST) that could boost GDP growth by 1-2 per cent. Targeting 8 per cent growth this fiscal, Jaitley alsoexpressed hopes of a good harvest as 'rain Gods have been kinder this year'. The government is also takinga number of steps to boost investments as well as reviving stalled projects and infusing more capital intopublic sector banks. – (IE Aug 6, 2015 p 17)

"India will be world's most populous country in 2022: U.N." – In seven years, India will surpass China tobecome the world's most populous country and will have 1.7 billion residents by 2050, new projections fromthe United Nations show. Experts, however, caution that India might be lowering its fertility at a faster ratethan what the U.N. projections indicate. A report. – (H Aug 2, 2015 p 13)

"Shower of cash coming to boost green shoots: Loosening purse strings FM says govt looking tostep up public spending to offset tepid private sector capex & create infrastructure" – India islooking to spur public spending further to provide momentum to the economy since private investment is yetto kick in, counting on rising revenue from a growth recovery to set aside more funds for infrastructurecreation including rural roads, highways and railways. We are trying to ensure that the difference betweenBudget estimates and revised estimates, as has been the practice in the past, is not there, according to FMArun Jaitley. If at all, revised estimates may be a bit superior to the Budget estimates. A report. – (ET Aug6, 2015 p 1)

Bery, Suman – "What will drive India's growth?" – Long-term sustained growth ultimately rests on a set ofmechanisms and institutions. An article. – (BS Jul 31, 2015 p 9)

Rao, S L – "India failing to seize the opportunity" – The country is unusually poised to take advantage of aweak global economy. It is instead fighting internal political battles, with little finesse. As with earliergovernments, there is no integrated agricultural policy, and no plan to build needed agricultural assets orrationalise agricultural markets. There is no attempt at integrated transport, energy, water or health policieseither. There are different ministers and departments for all subcategories (for example road, rail, shipping,inland water) but little coordinated policy-making. An article. – (FE Aug 3, 2015 p 7)

BLACK MONEY COMPLIANCE SCHEME"Crime proceeds not eligible for black money compliance scheme" – The compliance opportunity available

till September 30 for declaring undisclosed foreign wealth which had escaped taxation in India is not applicableto any proceeds of crime, according to a finance ministry official. Although no question is asked to individuals,companies and partnerships that declare previously unreported foreign assets under the ongoing black moneycompliance scheme, the declaration will become invalid if it comes to light later that the assets and incomedisclosed to avail of immunity from prosecution is indeed proceeds of crime, Central Board of Direct Taxes(CBDT) chairperson Anita Kapur explained at a television show. – (FE Aug 5, 2015 p 2)

FOREIGN EXCHANGE RATE"Want forex delivered at your doorstep? Now there's a smartphone app for that!" – Now, all you need

is to swipe your phone to get the best foreign exchange rate in town! And, if that is not enough get it deliveredat your door step, too. Thanks to a new smartphone app for forex introduced by the country's first foreign

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exchange aggregator, FXKart. 'For years, the forex industry in the country is unorganised,' according toAnkit Anubhav from FXKart. 'We wanted to give it a professional shape and help people - who want tomigrate out of the country - with the best possible forex rate available in town. The new app would (answer)all their queries about foreign exchanges.' – (HT Aug 3, 2015 p 14)

FOREIGN PORTFOLIO INVESTMENTS"RBI may review FPI limits in bonds periodically, set them in rupees" – The Reserve Bank of India said

it is in talks with the government to review the foreign portfolio investment (FPI) limit in debt securities andto specify it in rupee terms. Currently, the FPI investment limit in Indian debt stands at $81 billion - $30 billionin government securities and $51 billion in corporate bonds. At monetary policy review, RBI governor RaghuramRajan said the central bank is talking to the government about a medium-term framework for FPI limit in debtsecurities. – (FE Aug 5, 2015 p 10)

NITI AAYOG"NITI Aayog to hire chief economist for policy issues" – National Institute for Transforming India (NITI)

Aayog plans to hire a Chief Economist to conduct research on India's economic policy issues as well as tobuild contacts with outside institutions. The Aayog said it wants to hire by any of the three methods - promotion,deputation and direct recruitment. – (BS Aug 1, 2015 p 4)

SOCIAL SECURITY"Government schemes aimed at providing financial security: official" – The government's social security

schemes are aimed at ensuring that all citizens have a bank account, and the deserving get the benefits,according to Reserve Bank of India representative Rajshekhar. Mr Rajshekhar said that the Atal PensionYojana (APY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri SurakshaBima Yojana (PMSBY) had been launched by Prime Minister Narendra Modi to ensure that every individualis provided financial security at a very nominal premium. Under the Pradhan Mantri Jan-Dhan Yojana, bankshave opened more than 17 crore accounts across the nation, and the officers' concerned should make sustainedefforts to create awareness about the scheme and open account of every citizen in their respective areas.– (H Aug 1, 2015 p 5)

BANKING

GENERAL"Merging sectors: E-comm encroaching into banking space: RBI Dy Guv: Day is not far off when the

banks would be viewed more as technology firms" – India has reached a stage where e-commerce hasencroached into the banking territory, setting the stage for banks to evolve as technology companies, accordingto a senior Reserve Bank of India official. Reserve Bank has been authorizing banks/non-banks for issuing e-wallets/mobile wallets which is being used extensively for bill payment, recharge apart from e-commercetransaction. In fact, we are already at the stage, when the e-commerce has encroached in to the bankingterritory, RBI deputy governor H R Khan had said in a speech in Hyderabad which was uploaded on the RBIwebsite. – (IE Aug 4, 2015 p 14)

"Non-food credit growth stays sluggish at 9.65%" – Non-food credit offtake of banks continued to remainsluggish with disbursals growing 9.65% year-on-year as of July 24, data from the Reserve Bank of Indiashowed. Outstanding loans of the banking sector stood at Rs.65.47 lakh crore as of July 24, a fortnightly fallof Rs.15,157 crore and a fall of 3.16% so far in the financial year. Most banks have scaled down their creditgrowth targets for 2015-16 given the sharp decline in growth during 2014-15. Most public sector banks'targets now hover in the 12-14% band while private banks continue to forecast a more robust 18% growth.A report. – (FE Aug 6, 2015 p 10)

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ALLAHABAD BANK"Allahabad Bank launches Mudra Card" – Allahabad Bank has launched the Mudra card, a specialized

card for loans under the Pradhan Mantri Mudra Yojana (PMMY), by Rakesh Sethi, CMD of AllahabadBank. Speaking on the occasion the CMD stated that the card would be issued for utilization of workingcapital limits for non-farm enterprises for income generating activities in manufacturing and service sectorfor loans up to Rs.10 lakh. – (ET Aug 3, 2015 p 8)

ANDHRA BANK"Andhra Bank can do without capital infusion by govt" – Most public sector banks are eagerly looking

forward to the allocation of capital infusion, which the finance ministry said last week. However, AndhraBank is not one of them. Reason: It has enough cushion to meet its growth targets this financial year. AndhraBank's managing director and CEO Satish Kumar Kalra said although the bank has sought a capital infusionof Rs.500 crore from the finance ministry, it has sufficient capital to achieve the growth targets for FY16.The risk weighted assets to the capital adequacy ratio should be 10 per cent and Andhra Bank is at 11 percent. So we have a one per cent cushion. – (BS Aug 4, 2015 p 6)

"Andhra Bank to auction Deccan Chronicle properties: The company had defaulted on Rs. 200-crloan repayment" – Andhra Bank will auction the immovable properties of Deccan Chronicle Holdings inBangalore on September 10 through e-auction in order to recover loan dues. According to a sale and e-auction notice issued by the bank, DCHL had taken credit to the tune of about Rs.200 crore from AndhraBank Sultan Bazar Branch and had defaulted on repayment. Andhra Bank had taken possession of twoproperties of DCHL located in Chennai and Bangalore worth Rs.160 crore under the provisions of theSarfaesi Act in 2013. – (HBL Aug 6, 2015 p 6)

BANK OF BARODA"As an economy, we aren't fully out of the woods yet" – Edited excerpts from an interview with Ranjan

Dhawan, Managing Director and CEO, Bank of Baroda. – (Mint Jul 31, 2015 p 29)

"Bank of Baroda net dips 23%: Public sector lender to launch arm for Jan Dhan Yojana" – Higheroperating expenses, including staff expenses, and lower non-interest income pulled down Bank of Baroda(BoB) net profit by 23 per cent in the first quarter ended June 30, 2015. Net profit in the reporting quarterwas at Rs.1,052 crore ( Rs.1,362 crore in the year-ago period). I am tempted to say that the worst is over.But in the backdrop of weak corporate results and some uncertainty surrounding monsoon out-turn, all ourcorporates are not out of the woods, according to Ranjan Dhawan, MD & CEO, Bank of Baroda. A report.– (HBL Jul 31, 2015 p 6)

"Bank of Baroda: Organized an Inter Bank Seminar" – Bank of Baroda organized an Inter Bank Seminar'Language Technology & Marketing of Banking Services' in Mumbai. – (FE Aug 4, 2015 p 20)

"Bank of Baroda: Unaudited financial results for the quarter ended 30th June, 2015" – An advertisementfeature. – (Mint Jul 31, 2015 p 9)

Merwin, Radhika – "Sharp fall in provisioning for bad loans brings cheer to BoB" – The market seemsto be breathing a sigh of relief at public sector banks better-than-expected performance in the June quarter,compared to the March quarter. An article. – (HBL Jul 31, 2015 p 6)

BANK OF INDIA"BoI net profit at Rs.130 crs in Q1 FY 2016" – Bank of India has posted a net profit of Rs.130 crore for the

quarter ended June 30, 2015 while operating profit stood at Rs.1,704 crs. The net interest income of the bankstood at Rs.2,913 crs while non-interest income was at Rs.840 crs as on June 30, 2015. Bank of India's retailadvances grew by 20.60 per cent. – (ET Aug 3, 2015 p 8)

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BANK OF MAHARASHTRA"Bank of Maharashtra awarded as BEST BANK-PUBLIC SECTOR" – Bank of Maharashtra a Premier

Nationalized Bank was conferred as BEST BANK-PUBLIC SECTOR in BFSI Awards-2015 by WorldHRD Congress in recognition of the Best performances in Banking Category. The Award was received byShri.S.Muhnot, Chairman & Managing Director on behalf of the Bank at the function held at Mumbai. Theaward focuses on the best practices of the BFSI Industry based on the Strategy, Security, Customer Serviceand the Future Technology Challenges and Innovations. – (HT Aug 3, 2015 p 15)

CANARA BANK"Canara Bank bagged the first prize in implementation of RSETI" – Ministry of Rural Development,

Govt. of India is Nodal Authority for overseeing the functioning of Rural Self Employment Training Institutes(RSETIs) sponsored by all Public Sector Banks across the country. There are over 550 such RSETISfunctioning across the country. Canara Bank has opened total 27 RSETIS in lead districts as well as in non-lead district also. Every Year Ministry of Rural Development will grade these Institutes through expertpersons and award gradation basing on the parameters devised by them. For the 2013-14 all our RSETIshave secured A or AA Gradation in the grading exercise conducted by GOI. In recognition of the bestperformance for the year 2013-14 Ministry of Rural Development has awarded the BEST Bank award toCanara Bank. – (HBL Aug 1, 2015 p 4)

"Canara Bank net slips 41%: Higher provisions, bad loans weigh on Q1 performance" – Provision forinvestments and bad loans pulled down Canara Bank's net profit 41 per cent in the first quarter ended June30, 2015. The net profit of the public sector bank in the reporting quarter was at Rs.479 crore, against Rs. 807crore in the year-ago quarter. Net interest income (the difference between interest earned and expended)edged up 4 per cent year-on-year (yoy) to Rs.2,517 crore. A report. – (HBL Aug 6, 2015 p 6)

"Canara Bank presents dividend cheque to Finance Minister" – Canara Bank has paid a dividend ofRs.348.81 crores to the Government of India for the financial year 2014-15. – (ET Aug 3, 2015 p 8)

"Canara Bank: Reviewed financial results for the quarter ended 30th June 2015" – An advertisementfeature. – (BS Aug 6, 2015 p 3)

CORPORATION BANK

– PMMY

"Bank implements scheme to help street vendors" – In a move that will free roadside vendors from theclutches of private moneylenders, Corporation Bank has implemented the Micro Unit Development andRefinance Agency (MUDRA) launched by the Centre under the Pradhan Mantri Mudra Yojana (PMMY).The scheme was launched in the city and intends to bring street vendors under the programme to ensure easycredit flow at nominal rate of interest. – (H Aug 4, 2015 p 5)

DENA BANK"Dena Bank hands over dividend of Rs.30 crs to GoI" – Shri Ashwani Kumar, CMD, Dena Bank handed

over the Dividend of Rs.30.18 crores to the Union Finance Minister, Arun Jaitley for the year 2014-15.– (ET Aug 3, 2015 p 8)

"Dena Bank net down 81%" – Dena Bank's net profit plunged 81.4% to Rs.15.16 crore in the quarter endedJune 30, 2015, on a sharp rise in NPA provisions. The bank's net profit in the same quarter of last fiscal wasRs.81.52 crore. Provisions and contingencies were up 42% to Rs.324.7 crore in the June quarter. Netinterest income (NII) - difference between interest earned and interest expended - stood at Rs.628.19 crore,up 2.65% y-o-y. Total income stood at Rs.2,914.7 crore in Q1FY16, up 3.19% y-o-y. The bank operatingexpenses rose 24% to Rs.548 crore against Rs.442.63 crore in the year-ago quarter. The employee costincreased to Rs.355.56 crore from Rs.289.62 crore. A report. – (FE Jul 31, 2015 p 10)

"Dena Bank: Unaudited financial results for the quarter ended 30th June 2015" – An advertisementfeature. – (HBL Jul 31, 2015 p 21)

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HDFC BANK"HDFC, Snapdeal tie up for e-commerce credit card" – In a move to discourage Indian online shoppers to

choose cash on delivery as a payment method, Snapdeal has partnered with HDFC Bank and Visa to launcha co-branded e-commerce credit card for its users. Snapdeal and HDFC are offering different promotionaldiscounts on its credit card, such as cash backs, bonus gift, reward points. – (FE Aug 4, 2015 p 8)

ICICI BANK"Asset quality improvement is key to ICICI's valuation gain" – Loan growth to hinge on pickup in the

capex in near term. – (ET Aug 1, 2015 p 6)

"Expect credit growth of 18%" – Excerpts from an interview with Chanda Kochhar, Managing director &chief executive officer, ICICI Bank. – (FE Aug 1, 2015 p 10)

"ICICI Bank Q1 standalone net up 12% at Rs.2,976 crore" – ICICI Bank reported a standalone netprofit of Rs.2,976 crore in the June quarter, an increase of 12% y-o-y. Profit growth was aided by higherother income at Rs.2,990 crore in Q1FY16. Net interest income, or the difference between the bank interestearned and expended, stood at Rs.5,115 crore in Q1FY16, 14% higher than in the same quarter of FY15. Onthe margin front too, the bank saw an improvement as its net interest margin (NIM) rose 14 bps y-o-y to3.54%. The bank provisions were up 32% y-o-y to Rs.955 crore in Q1FY16. Total deposits increased 9.5%y-o-y to Rs.3.67 lakh crore and the bank current accounts savings account (Casa) ratio stood at 44.5%.– (FE Aug 1, 2015 p 10)

"ICICI Bank raises $500 m via overseas bonds" – ICICI Bank has raised $500 million (over Rs.3,000crore) by selling five-year dollar bonds to overseas investors. The issue opened earlier and closed in theevening. The bond issue was priced at 3.125 per cent, which is about 160 basis points over the five-year USTreasury yield. – (HBL Aug 6, 2015 p 6)

"ICICI Bank: unconsolidated financial results for the three months ended June 30, 2015" – Anadvertisement feature. – (BS Aug 1, 2015 p 17)

Agarwal, Sheetal – "ICICI Bank: Improved asset quality to revive sentiments" – Healthy outlook onloan growth, profitability, asset quality are key positives. An article. – (BS Aug 1, 2015 p 6)

IDFC BANK"Banking push: IDFC to set aside Rs.2,500 cr for stressed loans in power sector: Incremental

provision to make Rs.1,600-crore impact on capital" – In the run-up to its transition into a bank onOctober 1, IDFC has said it will set aside Rs.2,500 crore to provide for potential stressed loans in coal andgas-based power projects in the July-September quarter. The move is aimed at minimising the overhang ofstressed assets on the new banks. The infrastructure finance company has already made a provision ofRs.2,387 crore against gross bad loans as on June end 2015, with the first quarter provisions at Rs.69 crore.This is being done so that there is no overhang of the stress from coal and gas-based projects on the newbank. We believe that this provisioning is enough to cover for any bad loans arising from the stressed assetportfolio in the future, according to Vikram Limaye, Managing Director, IDFC. – (HBL Aug 3, 2015 p 18)

"IDFC Bank to start lending services from October 1" – With the demerger of financial undertaking fromIDFC Ltd, IDFC Bank will kick-start its lending operations from October 1, 2015. The transfer of business tothe new bank should coincide with commencement of banking business, IDFC Ltd said in a filing to BSE.RBI had granted license to IDFC Bank on July 23, 2015. – (FE Aug 5, 2015 p 11)

INDUSIND BANK"IndusInd Bank gets nod to set up IFSC in GIFT City" – Hinduja Group-owned IndusInd Bank has

received approval to set up an International Financial Services Centre (IFSC) in Gujarat International FinanceTec-City (GIFT City). IndusInd Bank's International Banking Unit (IBU) will provide the bank access tointernational financial markets and will allow IndusInd to deliver a complete range of products to its clientswith foreign currency funding requirements. The bank will now also be able to actively offer products suchas External Commercial Borrowings (ECB) to its customers. – (FE Aug 6, 2015 p 10)

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KARUR VYSYA BANK"Karur Vysya Bank: Reviewed financial results for the quarter ended 30th June 2015" – An

advertisement feature. – (HBL Aug 1, 2015 p 3)

"KVB net up 10% at Rs.135 cr" – Karur Vysya Bank has reported a 10.2% rise in its net profit at Rs.134.58crore for the quarter ended June as against Rs.122.07 crore in the same period of the last fiscal. Total incomeof the bank rose by 3.8% to Rs.1,518.50 crore from Rs.1,462.44 crore in the corresponding period of the lastfiscal. – (FE Aug 1, 2015 p 10)

KOTAK MAHINDRA BANK"Kotak Mahindra Bank Ltd.: Unaudited financial results for the quarter ended 30th June, 2015

(Consolidated)" – An advertisement feature. – (BS Jul 31, 2015 p 14)

"Merger costs sap Q1 profit of Kotak Mahindra Bank" – Higher provisioning towards pension, gratuityand bad loans and integration of the erstwhile ING Vysya Bank post-merger dragged Kotak Mahindra Bank(merged) net profit down for the first quarter of 2015-16 by 56 per cent to Rs.190 crore. India fourth-largestprivate sector bank had reported a net profit of Rs.430 crore in the April-June quarter of last fiscal. A report.– (HBL Jul 31, 2015 p 6)

Merwin, Radhika – "The high cost of integration for Kotak Bank" – The ING Vysya buy, beneficial in thelong run, will hit finances for a while now. An article. – (HBL Jul 31, 2015 p 6)

LAKSHMI VILAS BANK"Lakshmi Vilas Bank: Pays homage to Dr Abdul Kalam by working extra hours" – Lakshmi Vilas Bank

has paid homage to the former President Dr A P J Abdul Kalam by doing something which he had wanted tobe done i.e., work extra hours. All staff of the bank voluntarily worked for two extra hours. Speaking on theoccasion, Shri Rakesh Sharma, MD & CEO, Lakshmi Vilas Bank said this steps shows the Bank's deeprespect and regard for the People President, also exhibits the excellent industrial relations climate existing inthe organization. – (FE Aug 4, 2015 p 20)

ORIENTAL BANK OF COMMERCE"OBC hands over dividend of Rs.58.5 crs to GoI" – Animesh Chauhan, MD & CEO, Oriental Bank of

Commerce presented a dividend receipt of Rs.58.51 crs to Arun Jaitley, Union Finance Minister. – (ET Aug3, 2015 p 8)

"OBC Q1 net dips 29% to Rs.257.84 cr" – Higher provisioning for bad loans brought down the net profit ofOriental Bank of Commerce (OBC) by 29 per cent at Rs 257.84 crore during the April-June quarter of thecurrent fiscal. The public sector bank had posted a net profit of Rs.364.54 crore in the first quarter a yearago. Total income also declined marginally to Rs.5,568.78 crore from Rs.5,576.03 crore in the correspondingyear-ago period. Gross non-performing assets (NPAs) as a percentage of total advances rose to 5.85 percent from 4.33 per cent. Net NPAs went up to 3.76 per cent from 3.11 per cent in the first quarter of theprevious fiscal. The net interest income rose 6.90 per cent to Rs.1,328.51 crore, compared with Rs.1,242.75crore in the same period a year ago. A report. – (FE Jul 31, 2015 p 10)

"Oriental Bank of Commerce: Reviewed financial results for the quarter ended June 30th, 2015" –An advertisement feature. – (ET Jul 31, 2015 p 7)

RESERVE BANK OF INDIA

– BOARD OF DIRECTORS

"Raising eyebrows: Is new secretary a shorthand for upping RBI ante?: In queer move, govt namesadditional secy in place of finance secy to central board of RBI" – It's there in one of the numerousnotifications issued by the finance ministry - a seemingly innocuous line that could be easily missed. But someare suggesting it speaks volumes about the state of engagement between the finance ministry and the ReserveBank of India. This is what it says: 'The central government hereby nominates Shri Ajay Tyagi, additional

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secretary (investment), department of economic affairs, ministry of finance, to be director on the centralboard of directors of Reserve Bank of India with immediate effect and until further orders vice Shri RajivMehrishi.' A report. – (ET Jul 31, 2015 p 1)

STATE BANK OF INDIA

– BANKING ABROAD

"Hong Kong fines SBI $1 million for 'violating' anti-money laundering, counter-terror laws" – TheHong Kong central bank penalised State Bank of India's local branch $1 million (HK$7.5 million) for allegedlyviolating the Chinese territory's anti-money laundering and counter-terror financing laws. – (HBL Aug 1,2015 p 1)

STATE BANK OF MYSORE"Probe into SBM funds misuse case to be handed over to CID: It was found that Rs.2.16 cr had

allegedly been misappropriated" – Superintendent of Police Ravi Channannanavar has said that theprobe into the alleged financial irregularities at the Ravindra Nagar branch of the State Bank of Mysore(SBM) here will soon be handed over to the Criminal Investigation Department (CID). It may be mentionedhere that financial irregularities in the Ravindra Nagar branch of SBM to the tune of Rs.2.16 crore had beenunearthed recently. The police had arrested Ganapathi Mungrimane, manager of the bank, in connection withthe irregularities. Mr Mungrimane, along with his two friends had created fake accounts at the bank branchand misused bank's money by advancing agricultural loans to those fake accounts. A report. – (H Aug 2,2015 p 4)

"SBM net rises 25.3% to Rs.94 cr" – State Bank of Mysore (SBM) reported a 25.3% rise in net profit atRs.94 crore for the Quarter ended June 2015 compared to Rs.75 crore in the corresponding Quarter lastyear. The total income went up 4.5% to Rs.1,952 crore from Rs.1,868 crore a year ago. Operating profit,however, dipped 11% to Rs.270 crore against Rs.303 crore a year ago. A report. – (FE Jul 31, 2015 p 10)

"State Bank of Mysore: Reviewed financial results for the quarter ended 30th June, 2015" – Anadvertisement feature. – (Mint Jul 31, 2015 p 25)

UCO BANK"UCO Bank bags prestigious award" – UCO Bank has been awarded 3rd prize in the All India Competition

under Medium Banks category in recognition of its remarkable contribution to RSETI movement in thecountry. Charan Singh ED and Rashpal Singh, DGM (ARBD) Head Office received the award from Ministryof Rural Development (MoRD) at New Delhi. – (ET Aug 3, 2015 p 8)

UNITED BANK OF INDIA"United Bank's Q1 net skids 21%" – United Bank of India reported a 21% year-on-year dip in net profit to

Rs.52.22 crore for the quarter ended June 30 from Rs.65.89 crore in the year-ago period on the back of alower interest income and a fall in other income. A report. – (FE Aug 4, 2015 p 8)

VIJAYA BANK"Vijaya Bank net dips 11.2% to Rs.143 cr" – Vijaya Bank reported 11.2% decline in net profit at Rs.143

crore for the first Quarter ended June, compared to Rs.161 crore in the corresponding quarter last year. Thetotal income has marginally increased by 3.1% to Rs.3,289 crore as against Rs.3,189 crore a year ago.Operating profit of the bank has gone up 35.5% to Rs.393 crore from Rs.290 crore in the like period a yearago. A report. – (FE Jul 31, 2015 p 10)

"Vijaya Bank: Reviewed financial results for the quarter ended 30th June 2015" – An advertisementfeature. – (HBL Jul 31, 2015 p 24)

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YES BANK"Yes Bank raises Rs.315 crore from IFC at 6.45%" – Yes Bank has raised $49.2 million (Rs.315 crore)

from the International Finance Corporation, the private sector financing arm of the World Bank. The fundshave been raised for a term of 10 years at 6.45%. The money will be invested in energy-efficiency andrenewable energy projects, mainly in the solar and wind sectors, according to the IFC. – (ET Aug 5, 2015 p 12)

GERMANY

– DEUTSCHE BANK

"Deutsche Bank chief blasts poor performance" – Cryan says results are 'nowhere near good enough' andunderscore problems facing the lender. A report. – (FT Jul 31, 2015 p 15)

UK

– RBS

"RBS gains breathing space, for the moment" – Royal Bank of Scotland dashed investor hopes of adividend payment next year and warned of a 'noisy' period ahead with looming mis-selling fines, dampingprospects for government plans to begin selling its stake. The bank, which is 80 per cent backed by the UKgovernment, released a better than expected set of earnings, reporting a net profit of Pound 293m in thesecond quarter - up 27 per cent from the same period last year. A report. – (FT Jul 31, 2015 p 15)

"UK starts RBS sale with Pound 2bn stake" – The UK government is to sell Pound 2bn of shares in RoyalBank of Scotland, marking the start of the country's biggest privatisation and a milestone in its recovery fromthe global financial crisis. The start of RBS's privatisation represents a watershed moment in the return tohealth of what was once the world's biggest bank by assets, before it became one of the most spectacularvictims of the financial crisis and was bailed out by the UK state with a record Pound 4.5bn. A report.– (FT Aug 4, 2015 p 11)

USA

– FEDERAL RESERVE

"Fed leaves options open on when to pull rates trigger" – The Federal Reserve signaled that it remainedon course to lift interest rates this year but left its options open on when to pull the trigger as it awaits moreevidence on the strength of the recovery. In a statement after its latest policy meeting, the US central bankgave a stronger endorsement of progress in the jobs market, saying it was seeing 'solid' gains and that slackin the market had diminished since early this year. A report. – (FT Jul 30, 2015 p 1)

Barua, Abheek and Ganguly, Bidisha – "What a Fed rate hike could mean for India: As the rupee isless bloated than its peers, it is likely to escape the brunt of the Fed's action" – An article.– (BS Aug 3, 2015 p 8)

BANK CAPITAL

– PUBLIC SECTOR BANKS

"Hardly a solution" – More capital for public sector banks won't work without reforms. An editorial.– (BS Aug 3, 2015 p 9)

"Lifeline: public sector banks to get Rs.70,000 cr over four years: Total funding for current fiscalyear set at Rs.25,000 crore" – Public sector banks (PSBs), saddled with bad debts, will get Rs.70,000crore over a period of four years, according to the Finance Ministry. The first instalment of Rs.25,000 crorehas been marked for this fiscal. It is 'a good beginning', according to RBI Governor Raghuram Rajan, whotold reporters here that the allocation for recapitalisation in the first year is adequate. A report. – (HBL Aug1, 2015 p 1)

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"Public sector banks to tap markets in big way: Jaitley: To mop up Rs.1.10 lakh crore in next 4years; Lok Sabha clears first set of supplementary grants" – Public sector banks (PSBs) are going toflood the market with equity issues in the next few years going by the remarks of Finance Minister ArunJaitley in the Lok Sabha. These state-owned entities will mobilise as much as Rs.1.10 lakh crore from themarkets over the next four years to meet their fund requirements, he said in his reply to the discussions on thefirst batch of supplementary demand for grants for 2015-16. This fund mop-up (from markets) is besides theRs.70,000-crore capital infusion planned by the government in these banks in the next four years. Both thebanks that need capital the most and the performing ones will get capital support. I don't want performingbanks to be discriminated against. A report. – (HBL Aug 6, 2015 p 4)

"Recapitalisation may Not be a Panacea for PSBs: This money too will go into a black hole unlessbanks tackle NPAs, feel experts" – In the past four years, about Rs.45,500 crore of taxpayers' moneywent into a black hole in the name of bank recapitalisation even as public sector banks (PSBs) have beenaccumulation sticky loans. Given that Prime Minister Narendra Modi is treading on the same path withRs.70,000-crore largesse in the next four years, the outcome may be no different if the lenders continue tofail to arrest the piling up of bad loans. Bankers agree that tackling nonperforming assets (NPAs) is a majorconcern for most banks as accumulation of such assets has been dragging their earnings quarter afterquarter, especially those of PSBs. Analysts said that most stressed assets are not covered by the PSBs andthe new capital would be used to improve the balance sheet and therefore, there would be additional requirementto grow lending without diluting capital adequacy. A report. – (ET Aug 4, 2015 p 10)

"Saving the banks" – When finance minister Arun Jaitley provided less than Rs.8,000 crore in the budget thisyear for recapitalization of public sector banks, there was a moment of disbelief. What the banks need in thenext four years is at least Rs.1.8 trillion and the budgeted sum was like the proverbial drop in the ocean.Quick edit. – (Mint Aug 1, 2015 p 1)

BANK FRAUDS"Protect your money from banking fraud" – Digital financial transactions, while convenient, also pose a

threat to your money. Here what not to do. A report. – (Mint Jul 31, 2015 p 20)

– DATA SECURITY

"Ensure better compliance to prevent data theft: Khan" – With growing dependence on InformationTechnology, RBI Deputy Governor H R Khan has said there is need to ensure better compliance withregulations to prevent data theft and check financial fraud. Banks face a difficult challenge in the area ofsecurity management. With a growing population of internal and external users accessing an increasingnumber of applications, the need has grown exponentially for banks to always deploy the latest security toolsthat can help them secure their digital assets, prevent data theft and ensure better compliance with regulations.– (FE Aug 4, 2015 p 8)

BANK LENDING"Credit growth expected to rise" – After more than a year of sluggish credit growth, the Reserve Bank of

India (RBI) believes a pick-up in credit offtake can be expected by September-October. RBI GovernorRaghuram Rajan explained there was generally a lag of three-four quarters from when rates are cut andwhen the effects can be seen in the economy. – (BS Aug 5, 2015 p 6)

Chakravarty, Manas – "What the bank lending numbers tell us" – An article. – (Mint Aug 3, 2015 p 21)

– INTEREST RATES

Merwin, Radhika – "Be on the front foot on loans" – With RBI's new directive, you can now negotiatebetter rates with banks. An article. – (HBL Aug 3, 2015 p 8)

BANKING REGULATOR"All is well, differences 'overblown': Rajan: No change in repo rate for now, but room left for cuts in

Sept" – Even as he left key policy rate unchanged, Reserve Bank of India governor Raghuram Rajan used

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the occasion of the bimonthly credit policy to indicate that the RBI powers would not be diluted in theproposed monetary committee (MPC) and said the differences with the government on the composition andpowers of the proposed MPC had been 'overblown'. Though Rajan said it was best to wait for the governmentto announce the MPC, he suggested a great level of comfort between the government and RBI, saying thatwhile the RBI Act gave the government the power to issue a directive to the central bank, this power hadnever once been used till date. – (FE Aug 5, 2015 pp 1, 2)

"Central bank finally decides the course of monetary policy" – Edited excerpts from an interview withRaghuram Rajan, Governor, Reserve Bank of India. – (ET Aug 5, 2015 p 16)

"Committees less prone to mistakes" – Excerpts from an interview with Raghuram Rajan, Governor,Reserve Bank of India. Amid heightened controversy over a likely dilution of his powers, he said he hasreached an agreement with the government. Listing virtues of following a committee-based monetary policy,Rajan stopped short of explicitly stating whether he is in favour of not having veto power. On the troubledbanking sector, he said the focus is on repairing balance sheets and that the stress from power distributioncompanies should be dealt with quickly. – (FE Aug 5, 2015 p 10)

"The government appoints everyone... so it has a lot of control already" – Edited excerpts from aninterview with Raghuram Rajan, Governor, Reserve Bank of India. – (HT Aug 5, 2015 p 13)

"Governor with veto will undermine monetary policy committee: Rajan" – Edited excerpts from aninterview with Raghuram Rajan, Governor, Reserve Bank of India. Rajan says lack of capital is impedingsome banks in restructuring distressed assets. – (Mint Aug 5, 2015 p 12)

"RBI has de facto independence: Guv" – Excerpts from an interview with Raghuram Rajan, Governor,Reserve Bank of India. Rajan says rate cuts take 3-4 quarters to take effect, tells banks hiding NPAs willcreate bigger problem in future. – (TI Aug 5, 2015 p 20)

BANKING TECHNOLOGYKapoor, Rana – "Banks should ride technology wave" – Here are 10 steps which can transform the future

of Indian banking. An article. – (HBL Aug 5, 2015 p 9)

CENTRAL BANKING"Central banks face regulatory puzzle on rate setters' earnings" – A controversy over potential conflicts

of interest for a hedge fund economist appointed last week to set UK borrowing costs has brought into sharpfocus how central banks around the world regulate their rate setters. A report. – (FT Aug 5, 2015 p 2)

Mecklai, Jamal – "Enjoying the Rajan put" – While it makes perfect sense to ride the Rajan put, it doesn'tmake sense to depend on it entirely. An article. – (FE Aug 3, 2015 p 6)

COOPERATIVE BANKING

– BANK FRAUDS

"Officer investigating Nagpur co-op bank securities scam quits" – The investigating officer (IO) in theNagpur District National Central Cooperative Bank's (NDCCB) government securities scam has recusedhimself from the case citing 'mental, physical and financial harassment'. The NDCCB, headed by NCPleader and former minister Sunil Kedar, had in 2002 had spent Rs.150 crore to purchase government securitiesfrom a company called Home Trade but the securities never reached the banks. Similar scams were reportedfrom other cooperative banks in places such as Osmanabad and Wardha. – (IE Aug 4, 2015 p 3)

– SARASWAT BANK

"Saraswat Bank: Marching towards the milestone of Rs.50,000 crore" – Saraswat Bank has againdelivered good financials during the FY 2014-15, in spite of the banking industry continuing to face strongheadwinds in the form of slow growth in credit off-take, higher interest rates, thinning of profit margins andrising NPAs. The bank has declared its financial results at the 97th Annual General Meeting of the Shareholders

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held recently. The bank's business has increased by 14.11% to Rs.44,968.96 crore, wherein Deposits grewby 13.5% to Rs.27,170.84 crore and Advances increased by 15.05% to Rs.17,798.12 crore, higher than thebanking industry average of 11.85% and 10.16% respectively. – (FE Aug 4, 2015 p 20)

– SVC BANK

"SVC Bank wins second consecutive best cooperative bank award" – SVC Bank has been conferredwith the Best Cooperative Bank Award for the second time in a row at a recently concluded BFSI Awardsnight. SVC Bank also won the Best Technology Orientation in Cooperative Bank Sector. – (ET Aug 3, 2015 p 8)

CURRENCY

– TEN RUPEE COINS

"RBI to issue 10 rupee coin to mark International Yoga Day" – The Reserve Bank announced plans toput into circulation 10 rupee coins to commemorate the International Day of Yoga. The coin bears the logo ofthe International Day of Yoga, with the inscription Saamanjasya evam shanthi ke liye yog in Devnagri scriptand 'yoga for harmony and peace' around the logo. At the bottom of the logo the date June 21 is inscribed,according to an official statement. – (H Jul 31, 2015 p 9)

CURRENCY NOTES"Dewas press prints notes with ex-guv Subbarao's signature" – You would normally expect the bank

note press to know who the RBI governor is. But, it has now emerged that at least one of the press continuedprinting currency notes bearing D Subbarao's signature even in February 2014, although Raghuram Rajanhad taken over in September 2013. If the norms had been followed, all notes printed from January 2014should have come with Rajan's signature - something that the Bank Note Press Dewas failed to do and wentahead and printed as many as 372 million pieces of currency notes from January to February 25. In fact, arecent report by the Comptroller & Auditor General (CAG) has revealed that it remitted 146 million pieces toRBI's regional offices, which asked the press not to send notes with the former governor's signature.– (TI Aug 3, 2015 p 17)

"Former RBI guv's name on rupee notes led to Rs.37-cr loss: CAG report" – The Security Printing andMinting Corporation of India Limited continued to print Rs.20, Rs.100 and Rs.500 denomination notes withthe signature of a former RBI governor in 2014 even though the governor had completed his tenure inSeptember 2013, thereby incurring an infructuous expenditure of Rs.36.69 crore, the CAG has said in itslatest compliance report on a few PSUs of the finance ministry. A report. – (HT Jul 31, 2015 p 13)

DEPOSITS

– INTEREST RATES

Acharya, Bhavana – "Scouting for the best bank deposits" – LVB, DCB, and Karur Vysya Bank offerthe best rates for one- to three-year deposits. An article. – (HBL Aug 3, 2015 p 8)

DIFFERENTIATED BANKS

– PAYMENTS BANKS / SMALL FINANCE BANKS

"First set of differentiated bank licences by month-end: RBI chief: 41 applications received forpayments banks, 72 for small finance banks" – The Reserve Bank of India is set to announce one set ofdifferentiated bank licences - payments bank and small finance banks - this month. Finally, a set ofrecommendations will be presented to the RBI board, which will decide the final list of successful applications.As I said before, I hope to announce at least one set of licences before the end of this month, RBI GovernorRaghuram Rajan said after announcing the third bi-monthly monetary policy. In all, the RBI received 41applications for payments bank licence and 72 for small finance bank licence. – (HBL Aug 5, 2015 p 6)

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DIGITAL PAYMENTS"To pay, swipe screen, not card" – The electronic marketplace may be flush with deals but is the card in your

wallet good enough? Not really. Digital currency providers are offering cheaper taxi fare, free talktime andeven takeaway meals to become popular. E-payment is now as simple as sending an SMS - but dive in withyour eyes open, according to Mayur Shetty. – (TI Aug 3, 2015 p 11)

– PAYTM

"Paytm aims to bring a million small merchants online: To handhold them through support services"– Digital payments company Paytm, founded by Vijay Shekhar Sharma, is handholding small and mediumenterprises (SMEs) to come online. It hopes to expand the network of merchants on its e-commerce marketplacefrom the existing 60,000 to 100,000 by the end of this year and, eventually, to a million. Through its GoBigplatform, the Alibaba-backed firm is not only providing tech tools such as content writers, web marketers andphotographers but has also created a directory of service providers that extend loans to SMEs along withfinance and accounting firms. – (BS Aug 3, 2015 p 2)

EDUCATION LOANS"Banks planning a common portal for education loans" – Students securing admission to recognised

higher educational institutions will no longer have to run from pillar to post to get education loans. Banks areplanning to provide them a common online platform to streamline the loan application and sanctioning process.The Indian Banks' Association, on behalf of banks, has engaged a third party service provider for setting upand maintaining the online platform/portal, said a senior Central Bank of India official. – (HBL Aug 3, 2015 p 15)

Kulkarni, Preeti – "Opt for a different course" – Several lenders offer education loans for offbeat courses.Do not forget the tax benefits such loans come with. An article. – (ET Wealth Aug 3, 2015 p 13)

FACTORING"Banks can conduct factoring biz without prior nod: RBI" – The Reserve Bank of India said banks can

carry out the business of factoring departmentally, without obtaining its prior approval, subject to conditions.When a bank undertakes factoring, an enterprise sells its accounts receivable (invoices) to the bank at adiscount. Later, the bank recovers money from the buyer on the maturity date of the invoices. – (HBL Aug1, 2015 p 11)

FINANCIAL SECTOR REFORMS"Financial sector reforms should be carried out over the next five years, says Justice Srikrishna" –

Justice B N Srikrishna, who headed the Financial Sector Legislative Reforms Commission (FSLRC), hassaid that the time is opportune to carry out financial sector reforms in India over the next five years, insteadof waiting for a crisis. Srikrishna, who headed a group constituted by the finance ministry to review the draftIndian Financial Code (IFC) which has proposed vast changes in the country financial architecture, includinga new Independent Debt Management Office to handle sovereign debt functions, a Monetary Policy Committeeand a single unified regulator for the financial sector covering the capital and commodities markets besidesinsurance and pensions, said that he didn't see no reason why financial sector reforms could not be pursued.A report. – (IE Aug 6, 2015 p 17)

FOREIGN BANKING

– HSBC

"Cooperating with govt: HSBC" – Facing a probe by Indian authorities into accounts held by Indians inSwitzerland, global banking giant HSBC said it is cooperating with the authorities. The bank also disclosed anumber of other investigations in various countries for 'alleged tax evasion, money laundering and unlawfulcross-border banking solicitation' and said it is cooperating with the relevant authorities in each of the ongoingmatters. – (FE Aug 4, 2015 p 8)

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"HSBC India plans green bonds this year" – HSBC India is planning to launch 'green bonds' this year toenable fund raising for investments in projects with environmental benefits, according to the private sectorbank's Chairman Naina Lal Kidwai. HSBC is the world fourth largest issuer of green bonds. We are bigplayer. We are working to get this in India. We are working with key authorities on this issue. Most probablywe will launch this year. – (FE Aug 4, 2015 p 8)

"HSBC nears $4bn sale of Brazil unit as global ambitions shrink" – Disposal, together with that ofTurkish operations, will reduce staff by 25,000. A report. – (FT Aug 1, 2015 p 8)

"Tightening money laundering norms: HSBC cautious on political persons" – Bank also refrains fromopening accounts of US-based NRIs & PIOs in the wake of FATCA. HSBC has been asking all 'politicallyexposed persons' (PEP) having accounts with it to disclose their source of fund and income. It is alsorefraining from opening accounts of US-based nonresident Indians and persons of India origin in the wake ofthe Foreign Account Tax Compliance Act (FATCA) passed by the US government to unearth black moneyof US residents outside the country. The British bank has been tightening anti-money laundering rules eversince its Swiss operations came under the glare of regulators and multiple governments. – (ET Aug 4, 2015 p 1)

– ING

"ING records higher Q2 profit on sale of Indian unit Vysya Bank" – Top Dutch bank ING posted a risein second quarter net profits but the increase was due to the sale of an Indian unit, leaving its shares slidingin morning trading. The net profit of 1.36 billion euros ($1.48 billion) was a 27% rise from the April throughJune period last year, but the increase was entirely due to the sale of ING's Indian subsidiary Vysya Bank for367 million euros. And compared to the first quarter of this year, the net profit was down 23%. – (FE Aug 6,2015 p 10)

– STANDARD CHARTERED

"StanChart halves dividend after sharp drop in profits: Chief Executive Bill Winters says will focuson revamp strategy" – Standard Chartered, the Asia-focused London-headquartered bank, slashed dividendsfor the first half of the financial year as profits plummeted as it faced among other things a slowdown inemerging markets, and increased loan impairments in India and in commodities. – (HBL Aug 6, 2015 p 6)

GOLD MONETISATION SCHEMESingh, Charan and Shimpi, Sharada – "Hedging the gold monetisation scheme" – While the government

is exhibiting sincere attempts to monetise gold, unusual rise in gold prices could increase repayment burden.An article. – (FE Aug 3, 2015 p 7)

HOUSING FINANCEHalan, Monika – "Base rate-linked home loans that fail to float down" – An article. – (Mint Aug 5, 2015 p 21)

INDIA POST

– PAYMENTS BANK

"India Post won't move savings a/cs to its bank: Plans to have separate payments entity" – India Posthas shortlisted management consultants to advise it on floating a new bank. The department is pursuing aplan where there will be two Post banks. The first will be the traditional financial services of the department.This includes the postal savings accounts and eight other post office savings schemes. The second bankwould be an entirely new creation with a paid-up capital in line with the Reserve Bank of India's requirement.The new entity will operate with a payments bank licence but will be manned with banking professionalsrecruited from the industry. – (TI Aug 4, 2015 p 13)

INDIAN FINANCIAL CODE"Govt goes on backfoot over revised IFC draft" – Going on the backfoot over a draft Bill proposing

curtailing powers of RBI Governor on interest rate, the government today said it is not right to conclude that

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it wants to curtail the central bank's powers. At a hurriedly called press briefing, Finance Secretary RajivMehrishi was at pains to explain whose draft proposal was it to withdraw RBI Governor's veto in theproposed monetary policy committee as he contradicted Chief Economic Advisor (CEA) to say it was not aproposal of FSLRC but went on to add that it was not even a government move. A report. – (ET Aug 4, 2015 p 1)

"Srikrishna points finger at govt: Changes to IFC draft at the behest of Centre, clarifies FSLRCchief" – Justice B N Srikrishna, the architect of the controversial Indian Financial Code, pointed a finger atthe government for diluting the powers of Reserve Bank of India and giving an upper hand to governmentcandidates in setting interest rates. The three-member committee, comprising Srikrishna, SomasekharSundaresan of law firm JSA and M S Sahoo, was to draft the code based on feedback received on a set ofproposals to restructure financial sector regulation, and directions from the government. The additions andsubtractions to the original recommendations of the Financial Sector Legislative Reforms Commission (FSLRC)were primarily done at the directions of the government. – (ET Aug 4, 2015 p 1)

"Whodunnit?: It is still not clear who is responsible for IFC report" – An editorial. – (FE Aug 4, 2015 p 6)

Chandrasekhar, Rajeev – "Draft Indian financial code: Secure the bank" – An article. – (ET Aug 5,2015 p 14)

INTEREST RATES

– HDFC BANK

"Deposit rates may come down: HDFC Bank: Will help banks reset base rateif RBI acts" – HDFCBank expects deposit rates to come down if the RBI cuts interest rates in the upcoming policy. The RBI isdue to announce its third Bi-Monthly Monetary Policy 2015-16 on August 4. If there is a policy cut, it wouldimply that banks would be induced to try and cut their deposit rates because that is the indication that the costof money is going to come down. – (HBL Jul 31, 2015 p 7)

– INDIAN BANK

"Indian Bank revises FCNR interest rates" – Indian Bank has revised its Foreign Currency Non-Resident(banking) term deposit interest rates with immediate effect. For FCNR(B) deposits, in US Dollar terms, therevised interest rate has been fixed at 1.59% for deposits of one year and above but less than two years fromthe existing 1.51%. For deposits of two years and above, but less than three years, the interest rate has beenrevised to 1.97% from the existing 1.90%. – (FE Aug 4, 2015 p 8)

– SMALL SAVINGS SCHEMES

"Finmin plans to vet small savings schemes this mth: UPHILL TASK FOR GOVT Banks have longcomplained to the govt that interest rates on these schemes are too high and need to be loweredto bring down the lending costs" – With the government looking to spur demand and boost growth, thefinance ministry is planning a review of its small savings schemes later this month, according to a financeministry official. Banks have long complained to the government that interest rates on these schemes are toohigh and need to be lowered to bring about a reduction in the cost of borrowing that will in turn spark creditexpansion. Interest rates on small savings schemes are benchmarked to the yield on government bonds andrevised annually. The plans offer depositors interest rates as high as 9.3% while banks give 7.5-8% on a five-year fixed deposit of less than Rs.1 crore. – (ET Aug 3, 2015 p 11)

KYC NORMS"One KYC to work for all financial products soon: A central registry will be established soon for

storing all records of the customer" – You soon won't need to endure the 'know your customer' (KYC)rigmarole at the start of every relationship with a financial intermediary as long as the verification has beencompleted once. Your record will be stored in a central registry that's going to be established this month. Thefinance ministry has notified rules for the entity, which is expected to be functional very soon, cutting down onpaperwork and red tape in financial transactions. Banks, insurance companies, stock market intermediarieswould all be covered by this, according to a senior finance ministry official. The move is also expected to aidthe government in its fight against black money and money laundering. – (ET Aug 3, 2015 p 11)

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LIQUIDITY"Liquidity should spur loan growth, rate cuts by banks: Liquidity conditions have been easy in June

& July: RBI" – The Reserve Bank of India has for the first time acknowledged that easy liquidity conditionsmight be necessary for rate reduction to be passed on to consumers. Liquidity conditions have been veryeasy in June and July, the central bank said in the bi-monthly policy statement. A seasonal reduction indemand for currency and increased spending by government, coupled with structural factors such as lowcredit deployment relative to the volume of deposit mobilisation, contributed to surplus conditions in themoney markets. The easy liquidity conditions should facilitate loan growth and further rate cuts by lenders.Banks net borrowed Rs.47,700 cr from liquidity adjustment facility in June against with Rs.1,03,100 cr amonth earlier. – (ET Aug 5, 2015 p 16)

MICROFINANCEVageesh, N S – "Breaking the myths of microfinance" – Madura Microfin chief Tara Thiagarajan highlights

how a study of borrowers' needs helped churn out customised products. An article. – (HBL Aug 4, 2015 p 6)

MOBILE BANKING"Banks told to 'adapt or die' as mobile use rises" – Banks must 'adapt or die' in the digital world to meet

the surging demand for mobile phone banking with the number of such customers set to jump to more than aquarter of the world's population, a new study has warned. – (FT Aug 3, 2015 p 12)

MONETARY POLICY"Arundhati Bhattacharya, Chairman, SBI on the RBI monetary policy announced" – Smt. Arundhati

Bhattacharya, Chairman, SBI said that the RBI decision to hold rates was as per market expectations. Thegood thing is however that the RBI forward guidance clearly spells out the possibility of more monetaryaccommodation. In our view, though such action will be data dependent, there seems to be a bias towardsfurther rate cuts. The lowering of inflation projection by RBI in the last quarter is an acknowledgement of abenign inflation trajectory. With international commodity prices continuing to decline, it will provide a furthercushion on the external front. This will mitigate any adverse external shocks from fed rate hike. The decisionto hold repo rate was as per market consensus. With monsoon projections better than anticipated and decliningcommodity prices there are indeed rooms for more monetary accommodation, as RBI suggests. – (BS Aug6, 2015 p 7)

"Finance Ministry sees rate cut happening in September: Says effect of monsoon, decision of US Fedon rates will be key factors" – The Finance Ministry has not lost hope of a rate cut, despite no suchannouncement coming in the monetary policy review. The Ministry expects the RBI to cut rates next month.September would be a major decider in terms of monetary easing because we would have a clear picture bythen in terms of the monsoon situation and also clear picture on Fed rate hike decision, according to a topFinance Ministry official. – (HBL Aug 5, 2015 p 6)

"Growth awaits policy, not RBI rate cuts: Lending rates are coming down, in any case" – An editorial.– (ET Aug 5, 2015 p 14)

"Immediate easing of rates unlikely" – Edited excerpts of a panel discussion among chief economist at JPMorgan India Sajjid Chinoy, co-head of fixed income, at Nomura Neeraj Gambhir, chairman of StatisticsCommission Pronab Sen, and managing director of State Bank of India P Pradeeep Kumar. With the ReserveBank of India set to announce its third bi-monthly monetary policy for the financial year, there is a near-consensus that there won't be any immediate easing of rates, despite a seemingly more benign economy.– (Mint Aug 3, 2015 p 29)

"Inflation not the only guide to rate cut?" – Hours before the RBI's monetary policy review, a top financeministry official said the central bank should not hesitate in cutting interest rate just on inflationary concerns.The government, he said, was keen on bringing down cost of borrowing and RBI cutting its key policy ratewill be a trigger for such a move, which in turn will boost investment and growth. – (HT Aug 4, 2015 p 14)

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"Monetary policy transmission is limited due to interest rate control: Y V Reddy: Targeting inflationmay not serve any purpose, says ex-RBI Governor" – Monetary policy transmission is limited becauseof government control of public sector banks and administered interest rates, according to YV Reddy, Chairmanof Fourteenth Finance Commission and former Governor of Reserve Bank of India. He was speaking in theinaugural session of the 21st Biennial Conference of Association of Indian Economic and Financial Studies(AIEFS) at the School of Economics, University of Hyderabad, Hyderabad. Monetary transmission refers tothe process by which a central bank monetary policy decisions are passed on, through financial markets, tobusinesses and households. – (HBL Aug 4, 2015 p 6)

"Monetary policy: the backdrop" – Most analysts expect the Reserve Bank of India (RBI) to keep its policyrates unchanged at the third bimonthly monetary policy review of 2015-16. At the last review in June, RBIcut rates by 25 basis points, or 0.25 percentage point, and indicated that room for further rate cuts was limiteddue to risks to inflation emerging from factors such as a deficient monsoon. The central bank also revised itsyear-end monsoon forecast upwards. The bond markets reacted negatively, and pushed up yields. Sincethen, however, there have been some developments that may give the central bank more flexibility. Monsoonrainfall has picked up and global commodity prices have dropped. In particular, oil prices, which had startedrising, have fallen again. The central bank may take note of these factors and indicate that some room formonetary easing may open up if inflation and upside risks to inflation remain in check. RBI will also take intoaccount the fact growth indicators have remained subdued. It may also point out to banks that they are still totransmit the full impact of its rate cuts. While RBI has cut rates by 75 basis points this year, most banks haveonly cut base lending rates by about 25 basis points or so. A graphical report. – (Mint Aug 3, 2015 p 12)

"Rajan keeps rates unchanged but raises hope of cuts" – The RBI policy suggests consumers can lookforward to lower EMIs on home and car loans. A report. – (ET Aug 5, 2015 p 16)

"Rate cuts rained away: RBI should have paid more heed to global deflation" – An editorial. – (FE Aug5, 2015 p 8)

"RBI unlikely to cut rates: Bankers: Say deposit rates must fall before lending rates can be lowered"– Bankers see a one in four chance that Reserve Bank of India governor Raghuram Rajan will cut interestrates in the monetary policy review. Bankers are of the opinion that deposit rates will have to come downbefore a reduction in lending rates. There is a 75% possibility of the status quo being maintained and a 25%probability of a reduction in the policy rates, according to Uday Kotak, MD & CEO, Kotak Mahindra Bank.He added that while deposit rates needed to come down for cost of funds to fall, administered interest rateson the government's small savings schemes were holding up rates. – (TI Aug 3, 2015 p 17)

"RBI's policy guidance will be sharply in focus: Experts widely expect the central bank to maintainstatus quo on repo rate today" – The Reserve Bank of India's policy guidance will be key as most expertsforesee a pause in the interest rate action by the central bank. Of immediate concern is the rise in the JuneCPI inflation, lifted by higher food prices, seasonal influence in the housing index and one-off adjustment inservice taxes, according to Radhika Rao, Economist, DBS Group. – (HBL Aug 4, 2015 p 6)

"Status quo on repo rate as RBI sees prices rising: Banks unlikely to tinker with deposit, lendingrates" – The uncertainty over the South-West monsoon's progress and the persistent inflationary pressuresprompted the Reserve Bank of India to hold its key repo rate steady at 7.25 per cent. The status quo,announced in the third bi-monthly monetary policy statement, was widely expected by bankers and economists.Since the repo rate (the interest RBI charges banks for short-term funds) is unchanged, banks too are likelyto maintain status quo on deposit and lending rates. – (HBL Aug 5, 2015 p 1)

"Why it is too early for another rate cut" – There are good reasons for the central bank to hold interest ratesfor now. Bolstering economic growth by bringing the investment cycle back on track is the task of thegovernment right now. A view. – (Mint Aug 3, 2015 p 30)

Aziz, Jahangir – "Beyond the cut" – We need to look beyond monetary easing. The old export-led growthmodel is seriously fractured. Not just in India, but across the region, many have been disappointed with themiserly cuts in interest rates or increases in fiscal support that authorities have provided compared to thelarge decline in inflation or the slowdown in growth. One can argue that the reluctance of central banks toprovide more support reflects concerns over financial stability. My suspicion, however, is that monetaryauthorities in the region have resigned themselves to the futility of such policy support in the absence of

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structural reform. And this is where the biggest concerns lie. Barring perhaps China, nowhere in the regionis there even the acknowledgement by governments that perhaps the old growth model might not be workinganymore, that it is time to liberalise internal product and capital markets and focus on domestic drivers tosustain future growth rather than depend on the generosity of strangers. An article. – (IE Aug 6, 2015 p 12)

Balakrishnan, Pulapre – "Monetary policy as if jobs don't matter" – A 'policy framework' based oninflation targeting is flawed in theory. It must be debated in Parliament. An article. – (HBL Jul 31, 2015 p 8)

Bandyopadhyay, Tamal – "RBI may opt for status quo on policy rate?" – Driven by higher food prices,retail inflation in India accelerated to a nine-month high of 5.4% in June, from 5.01% in May, and above theconsensus estimate of 5.1%. Yet, quite a few analysts expect the Reserve Bank of India (RBI) to cut interestrates on 2 August, when it reviews its monetary policy. An article. – (Mint Aug 3, 2015 pp 1, 2)

Bandyopadhyay, Tamal – "RBI will be in no hurry for the next rate cut" – An article.– (Mint Aug 5, 2015 p 12)

Bhattacharya, Saugata – "Rate cuts ahoy! Derailed, delayed or deterred?" – An article.– (Mint Aug 5, 2015 p 13)

Chinoy, Sajjid – "The writing on the wall" – An article. – (BS Aug 5, 2015 p 6)

Gugal, Ira – "Is there room for more rate cuts?" – An article. – (Mint Jul 31, 2015 p 21)

Joshi, Dharmakirti – "Taking the safer road" – An article. – (Mint Aug 5, 2015 p 13)

Kapur, Gaurav – "RBI stays vigilant on inflation" – An article. – (Mint Aug 5, 2015 p 13)

Kumar, Rajesh and Vishwanathan, Vivina – "Policy review: No rate cut now; but expectations remain"– Borrowers can hope for further rate cut transmission, but may also face lower returns from term deposits.An article. – (Mint Aug 5, 2015 p 20)

Merchant, Krishna – "Has the 75 basis point rate cut by RBI this year worked?" – An article. – (MintAug 5, 2015 p 18)

Ninan, Oommen A – "RBI monetary policy review: Opinion divided on interest rate cut" – The currentreview meeting's mood is set in the midst of a controversy over the Governor veto power on monetary policydecisions. There could be a 25 basis points cut in repo rate due to inflation coming down well below thetrajectory set by the RBI, according to N S Venkatesh, Executive Director and Chief Financial Officer ofIDBI Bank. An article. – (H Aug 2, 2015 p 16)

Puri, Aditya – "Slash the policy rates" – Inflation targeting is working, RBI must promote growth and jobsnow. An article. – (TI Aug 1, 2015 p 14)

Ranade, Ajit – "Bad loans are a drag on rate cut" – An article. – (Mint Jul 31, 2015 p 24)

Rangan, M C Govardhana and Das, Saikat – "Rajan unlikely to cut rates just yet: A poll of 15economists, conducted by ET, shows the benchmark repo rate will remain steady at 7.25%" –With easing inflation and monsoon's revival, RBI commentary may tilt towards rate cuts. The central bankmay announce measures to ensure that overnight rates remain aligned to its policy rates. An article. – (ETAug 3, 2015 p 10)

Rao, Shubhada – "Of monetary chutzpah and endurance" – An article. – (FE Aug 5, 2015 p 10)

Sabnavis, Madan – "Defining an ideal interest rate regime" – An article. – (FE Aug 6, 2015 p 9)

Sabnavis, Madan – "Relying too much on interest rate cuts" – Monetary policy is no magic wand that willdeliver growth. Our demand-constrained economy needs a fiscal stimulus. An article. – (HBL Jul 31, 2015 p 9)

Saha, Manojit – "Some room for Aug rate cut" – Near-normal monsoon, falling crude oil prices help keepinflation under check but this window of opportunity might not last for long. An article. – (BS Jul 31, 2015 p 6)

Seshan, A – "A flawed understanding of inflation" – The RBI should aim for deflation rather than a lowerrate of inflation. The price level needs to be brought down. An article. – (HBL Aug 5, 2015 p 8)

– 18 –

Unnikrishnan, M S – "Cut rate for facilitating investment cycle" – With an almost normal monsoonprediction and sufficient food stock to prevent a price spiral, rural demand should be healthy in the festivaland winter season across the country. An article. – (BS Jul 31, 2015 p 6)

Venkatesh, Latha – "Once again, non-monetary observations may dominate" – An article. – (Mint Aug4, 2015 p 29)

– CRR/ GOLD MONETISATION SCHEME

"CRR needs: Banks face RBI hurdle on gold: RBI fears banks' gold deposits could weaken CRR asmonetary policy tool due to metal price swings" – Banks may not get to use gold mobilised under theproposed gold monetisation scheme to meet the cash reserve ratio (CRR) requirement as the Reserve Bankof India has opposed the move that could dilute the effectiveness of this monetary policy tool. CRR, one ofthe policy instruments at the RBI's disposal, mandates banks to keep 4% of their net demand and timeliabilities as cash balance with the central bank. Banks do not get any interest on their CRR deposits. CRRbeing a cash-based instrument, the RBI fears that gold deposits against the CRR requirements could weakenthe CRR as a monetary policy tool due to the inherent price fluctuations associated with the precious metal.– (FE Aug 3, 2015 p 2)

– INDIAN FINANCIAL CODE

"India's central bank tries to allay fears on independence" – Raghuram Rajan, the governor of India'scentral bank, said the institution had reached a 'broad consensus' with the government on a new committeeto set monetary policy, as he sought to allay fears of New Delhi curbing central bank independence. Areport. – (FT Aug 5, 2015 p 4)

"Monetary policy: Who tried to clip RBI guv's wings?: The finance ministry is trying hard to distanceitself from the draft India Financial Code that reflects its own views" – The three top men in thefinance ministry, senior minister Arun Jaitley, his junior Jayant Sinha and chief economic adviser ArvindSubramanian, have been at pains to clarify that a controversial provision of the draft Indian Financial Code(IFC) that seeks to limit the powers of the central bank governor is not the government's view and is merelya suggestion made by a panel of experts drafting the code. Only, it seems that members of the committee ofthe Financial Sector Legislative Reforms Commission (FSLRC) are insisting that the government had madechanges in the original draft code to introduce the provision. A report. – (Mint Aug 3, 2015 pp 1, 2)

"Proposal to clip RBI guv's veto not from reforms panel, says member" – In a new twist to thecontroversial proposal to strip the Reserve Bank of India governor of his veto power in interest rate decisions,an FSLRC member has said the draft bill does not reflect the views of the panel. Financial Sector LegislativeReforms Commission (FSLRC) member M Govinda Rao revealed that the commission actually favouredgovernor having the last word. The revised draft of the Indian Financial Code (IFC), which proposes that anydecision on monetary decision should be taken by majority by a seven-member committee without any vetopower to the RBI chief, has been seen as an attempt to curtail the central bank's autonomy. – (HT Aug 3,2015 p 14)

"Trust between govt, RBI governor critical: Reddy" – Former Reserve Bank of India (RBI) Governor YV Reddy said the relationship between the government and the central bank governor should be based ontrust. Responding to the ongoing debate on the draft Financial Code submitted by the Financial SectorLegislative Reforms Commission (FSLRC) over the creation of an independent monetary policy committee,Reddy said the likely changes in these matters will have to be seen in the light of whether they wouldstrengthen the RBI and the governor. A report. – (BS Aug 4, 2015 p 6)

Bhusnurmath, Mythili – "The draft financial code ensures that RBI governor Raghuram Rajan hasmore battles on hand: Hard times got harder" – The main area of dissonance is the scope of the RBI'spowers to determine policy rates - the revised draft IFC encroaches even more on the central bank's powers.An article. – (ET Aug 3, 2015 p 12)

Chidambaram, P – "Monetary policy committee: Vote or veto?" – An article. – (FE Aug 2, 2015 p 2)

Shah, Ajay – "A deeper reform" – The question of the age is how to set up a regulatory apparatus thatpowers high growth. Draft Indian Financial Code offers an answer. Under the proposed law, the RBI will

– 19 –

have greater independence. But the independent authority to set interest rates will vest with the MPC and notwith the governor. This will result in greater institutional stability and predictability. Too much of the discussionhas been focused on who appoints the MPC members. We must remember that the governor, deputy governorsand all RBI board members are appointed by the government. The same appointment procedure should beused for the MPC members. An article. – (IE Aug 5, 2015 p 11)

Sridhar, G Naga – "How independent is the Reserve Bank Governor?" – The role of the central bankchief vs the government in taking key policy decisions has become hotly debated. An article. – (HBL Aug 6,2015 p 6)

MONETARY POLICY TRANSMISSION"Banks reserve judgment till September: While lenders hint at base rate cut by next review, they

cite high cost of deposits as stumbling block" – After RBI maintained status quo on key rates, somelenders indicated that they could cut base rates before the next policy review in September even as otherssaid it would not be possible to predict the next reduction as it would depend on the cost of deposits. K VRama Moorthy, executive director, Bank of Baroda, told a business news channel that while credit growth isnot picking up and asset quality not improving, cost of deposits has not come down as much as predicted. Headded that a reduction in base rate could be possible before the next policy announcement. – (FE Aug 5, 2015p 10)

"Clean up balance sheets, cut credit risk: Rajan tells India Inc: Economic recovery is still work inprogress, loan growth yet to happen, says RBI Governor" – RBI Governor Raghuram Rajan has asimple message for those in India Inc clamouring for lower interest rates - put your house in order, repair yourbalance sheets and reduce the risk premium that you are paying. Arguing that the RBI has done what it couldin the given circumstances, he said, if interest rates are still high, they remain so, partly because banks havenot fully passed on the benefits to borrowers and also because borrowers have not done much towardsbringing down their credit risk. A report. – (HBL Aug 5, 2015 p 6)

Gopalan, Sasidaran and Rajan, Ramkishen S – "For a better interest rate transmission: Allowinggreater banking competition could contribute to strengthening the transmission channel indirectly"– But if a liberalisation process results in a banking system dominated by a few large private banking players,it could be antithetical to the spirit of competition. An article. – (FE Aug 5, 2015 p 9)

Merwin, Radhika – "Banks may not cut lending rates for now: So far, transmission of rate cuts toborrowers has been good enough" – An analysis. – (HBL Aug 5, 2015 p 6)

NON-BANKING FINANCE COMPANIES"NBFCs prefer raising funds through debt route" – Credit off take by non-banking finance companies

from the banking system registered a rise of only 1.6 per cent on a year-on-year basis in June 2015, ascompared to a rise of as much as 16.7 per cent in the same period in the previous year, according to astatement from the Reserve Bank of India. – (H Aug 4, 2015 p 15)

NON-PERFORMING ASSETS"Banks fudging NPA figures to face action" – The Reserve Bank of India (RBI) said it will penalise banks

for fudging bad loan numbers and review debts under the 525 plan so that banks don't misuse the avenue forhiding stressed assets. The scheme allows lenders to give borrowers 25 years to repay existing loans with areview every five years. RBI governor Raghuram Rajan said that banks are being reprimanded for notcoming clean on bad loans. We also supervise banks and go through their portfolios to see whether they havedeclared all the NPAs (non-performing assets) they should. We examine divergences, and bank managementis hauled up if there are divergences. – (ET Aug 5, 2015 p 16)

"NPAs to decline in a few quarters, says fin secy" – A series of measures initiated by the government -fromcapital infusion to governance-related changes and tackling bad debt - would help state-run banks tide overa rough patch, financial services secretary Hasmukh Adhia said, adding that it would take some time for theresults to show. A report. – (TI Aug 1, 2015 p 17)

– 20 –

"System-driven detection of NPAs not up to the mark in certain banks" – System driven identification ofbad loans has not been found robust enough in certain banks. Though banks are taking remedial action insuch cases, it does not alleviate the supervisory discomfort with this kind of situation, according to H R Khan,Deputy Governor, at a recent seminar at the Institute for Development and Research in Banking Technology.These observations assume significance as they come at a time when the banking system, especially publicsector banks (PSBs), is reeling under bad loans. – (HBL Aug 4, 2015 p 6)

"Tightening the noose: Mis-report NPA numbers, face RBI action" – The Reserve Bank of India (RBI)has said it will now begin to take action against banks that misreport the non-performing assets (NPAs) ontheir books. It had been observed that in certain cases, loans that had already become NPAs were stilltreated as standard assets. We inspect the banks and we ferret out situations where something that isstandard is not NPA and these are called divergences. And some banks there are more divergences that theother. In that case they have a pretty strong discussion with S S Mundra in which he hauls them over thecoals for doing what they did. And increasingly we are turning towards taking actions against such divergences.So it is not that these things get done with impunity, according to Raghuram Rajan, Governor, Reserve Bankof India. A report. – (BS Aug 5, 2015 p 6)

– BANKRUPTCY LAW

"Absence of Bankruptcy Law Hits Bad-Loan Fight, PEs Tell Rajan: Fund managers and ARCs seekUS-style bankruptcy law to cleanse banks of NPAs" – Private equity fund managers and assetreconstruction companies have told Reserve Bank of India Governor Raghuram Rajan that the absence of abankruptcy law and banks' reluctance to take bigger losses were stumbling blocks in his efforts to cleanse thebanking system of bad loans. At a meeting with Rajan on July 28 to find a solution to the never-ending sagaof stressed assets, top financiers from Singapore's Temasek Holdings and buyout giant Kohlberg KravisRoberts & Co. to Kotak Mahindra Bank said the legal system needed to move in tandem if the regulator'spath-breaking changes effected in January 2014 were to work, said four people familiar with discussions atthe meeting. – (ET Aug 3, 2015 p 1)

PUBLIC SECTOR BANKS"Can't bank on Parliament: Unless MPs agree, banks will continue to lose value" – An editorial. – (FE

Aug 4, 2015 p 6)

"PSBs asked to issue AT1 bonds at lower rates" – The finance ministry has asked state-run banks to raisemoney through additional Tier I (AT1) bonds at lower cost and only when market conditions are favourable,an advice aimed at reducing interest rates in the economy. The government hopes this will help reduce thecost of funds for the lenders, which they often blame for not passing on interest rate cuts announced by thecentral bank. The ministry has asked the public sector banks (PSBs) to price the issues at moderate interestrates so that the impact on their cost of funds is not adverse, a senior banker aware of the matter. A report.– (ET Aug 6, 2015 p 11)

"PSBs grapple with increasing bad loans, dip in profits: Q1 results declared so far show 42% rise ingross NPAs" – Public sector banks saw a sharp rise in gross non-performing assets (NPAs) and steep dropin profits in the first quarter. For 14 of the 20 banks (excluding the SBI and its group) whose first quarterresults are in, net profits were down 38 per cent. Their gross NPAs were up 42 per cent over the past oneyear to a level of Rs.1.64 lakh crore. Large banks, such as Bank of India, Canara Bank, Bank of Baroda andPunjab National Bank saw the biggest rise in NPAs. The pain caused by bad loans may well last a few morequarters, if the recent track-record is anything to go by. The prospect of any quick improvement in theirnumbers is contingent on the economy recovering fully. A report. – (HBL Aug 6, 2015 p 6)

"PSBs should have an arm length relationship with the govt" – Edited excerpts from an interview withThomas Richardson, senior resident representative in India, International Monetary Fund (IMF). It is goodthe govt and RBI are not taking the easy road by encouraging large loan write-offs in the hope that growthwill pick up. – (FE Aug 1, 2015 p 2)

– 21 –

– WOMAN OFFICERS

"House panel pitches for more woman officers in public sector banks" – Flagging the 'asymmetricalratio' of women at managerial and officer-level cadre in public sector banks, the Committee on Empowermentof Women, headed by Bijoya Chakravarty, has called upon banks to set up 'special cells' to look into theobstacles in the way. As on September 30, 2014, there were only 138 women employees at the executivegrades and 1,719 in the senior management levels. In a total workforce of 8,57,868 in public sector banks,there are 1,96,374 women employees. – (HBL Aug 6, 2015 p 6)

STRATEGIC DEBT RESTRUCTURING"Lenders yet to find comfort in special debt revamp scheme" – Even as they grapple with their ballooning

non-performing assets, lenders are yet to find their comfort zone with the central bank's recently-circulatedStrategic Debt Restructuring Scheme. The scheme envisages lenders to consider the possibility of a changein the management control of companies that have defaulted on their debt obligations alongside a possibilityof transferring equity of the company to the lenders to 'compensate for their sacrifices'. If executed well, thismeasure could very well instil a sense of fear in defaulting corporates, who were playing with public money.– (H Aug 2, 2015 p 16)

RBI CIRCULARS"Auction of Government of India Dated Securities" – (RBI Circular RBI/2015-2016/145 Ref.No.IDMD/

246/08.02.032/2015-16 dated 03.08.2015)

"Exim Bank's GoI supported Line of Credit of USD 18.08 million to the Government of Republic ofChad" – (RBI Circular RBI//2015-2016/146 A.P. (DIR Series) Circular No.7 dated 06.08.2015)

"Exposure Norms limit for the Standalone Primary Dealers (SPDs)" – (RBI Circular RBI/2015-2016/149 DNBR.CO.PD.No.068/03.10.01/2015-16 dated 06.08.2015)

"Interest Rates on Deposits - Deposits of Army Group Insurance Directorate (AGID), Naval GroupInsurance Fund (NGIF) and Air Force Group Insurance Society (AFGIS)" – (RBI Circular RBI/2015-2016/147 DBR.Dir.BC.No.33/13.03.00/2015-16 dated 06.08.2015)

"Section 23 of the Banking Regulation Act, 1949 - Relaxations in Branch Authorisation Policy" –(RBI Circular RBI/2015-2016/148 DBR.No.BAPD.BC.34/22.01.001/2015-16 dated 06.08.2015)

AGRICULTURE & RURAL DEVELOPMENT

AGRICULTURAL FINANCE"Fixing farm credit: More steps needed for agri-credit to reach farmers" – An editorial. – (BS Aug 5,

2015 p 11)

AGRICULTURAL POLICYGulati, Ashok – "Policy with a farmer's face: It is necessary to rescue public policy from its elitist

bias, bring agriculture to its centre" – If India cannot ensure at least 4% growth in agri-GDP within anoverall GDP growth rate of 8%, the question will keep surfacing - growth for whom? And therein lies theelitist bias in public policy. It is not just the level of growth per se but the nature and composition of growth,too, that is important to alleviate poverty faster. If public policy falters in this, it will be at its own peril, bothpolitically and economically. And in agriculture specifically, public policy cannot be just tonnage-centric. Ithas to have a human face and be farmer-centric. An article. – (IE Aug 3, 2015 p 11)

AGRICULTURE"Backwardness, lack of development in agriculture leading to farm suicides: Farmers' leaders: govt.

failed to improve crop yield" – The high number of farmers' suicides in the Hyderabad Karnataka regionis due to the vulnerability of the region along with its backwardness and lack of development in agricultureand industrial economy, according to the farmers' leaders and economists. – (H Aug 4, 2015 p 2)

– 22 –

INDUSTRY

COMPANIES ACT"Companies Act needs to be rewritten: ICICI Bank Sharma: It is a to be a promoter in current

times" – The Companies Act of 2013 is a poorly drafted piece of legislation and needs to be rewritten,according to M K Sharma, Chairman, ICICI Bank. Speaking at an event organised by the Indian Merchants'Chamber in Mumbai, Sharma said that the Act was beneficial for lawyers and chartered accountants but notfor corporates. He added that inputs from the industry, including from the Institute of Chartered Accountantsof India and Institute of Company Secretaries of India, have to be incorporated in the Act from a long-termperspective. – (HBL Aug 6, 2015 p 6)

HDFC"HDFC to raise Rs.5,000 crore via quasi-debt issue soon: Lender will offer NCDs and warrants to

domestic institutions to raise 'cheaper' funds" – Housing Development Finance Corporation (HDFC)is likely to raise roughly Rs.5,000 crore through a structured quasi-debt offer to domestic institutions soon.The mortgage lender is likely to simultaneously issue non-convertible debentures (NCDs) and warrants toinvestors that could help it raise funds at a cheaper cost. HDFC and its bankers are aiming to launch the issuein the next couple of weeks and have sounded out local institutional investors, said four people aware of thematter. – (ET Aug 5, 2015 p 12)

IDFC"IDFC posts 46% drop in first quarter net: Total income up 6% to Rs.2,087 crore" – Infrastructure

finance company and soon-to-be-bank IDFC reported a 46 per cent decline in standalone net profit at Rs.241crore for the first quarter ended June 30, 2015. The company had reported a net profit of Rs.449 crore in thecorresponding period a year ago. Total income increased 6 per cent to Rs.2,087 crore (Rs.1,973 crore in theyear-ago period). The consolidated net profit of the group also declined 47 per cent to Rs.254 crore duringthe quarter. Total income rose to Rs.2,227 crore from Rs.2,189 crore in the year-ago period. A report.– (HBL Jul 31, 2015 p 6)

Merwin, Radhika – "IDFC: weighed down by challenges in the infra space" – IDFC reported a 46 percent fall in net profit during the June quarter, led by muted net interest income growth, a sharp fall in otherincome and increase in staff expenses. An article. – (HBL Jul 31, 2015 p 6)

INDUSTRIAL DEVELOPMENT

– MAHARASHTRA

"State panel to aid smooth agri to biz land use transfer" – In a bid to promote its Make in Maharashtrapolicy, the state government has further eased the procedure for the conversion of agricultural land to bona-fide industrial use. It has set up a facilitation committee to smooth over a key hurdle: certification that the landin question is free of encumbrances. Officials say this reform which will boost industrial expansion. Theamendments allowed bona fide industries to come up on agricultural land and also on land within the industrialzone of a development plan without seeking prior clearances for zone conversion. The district collectormerely had to be informed about the change of land use within 30 days. – (TI Aug 2, 2015 p 1)

INFRASTRUCTURE INVESTMENTSChatterjee, Vinayak – "Whither infra investments?" – The absence of data on infrastructure investment

is untenable. An appropriate government department needs to take ownership. An article. – (BS Aug 5, 2015p 10)

INFRASTRUCTURE SECTOR"Core sector output growth slows in June: Sticky wicket index rises 3% in June, may weigh on IIP"

– Output growth of key infrastructure sectors slowed in June, suggesting further weakening of industrial

– 23 –

growth and making a stronger case for interest rate cuts and more reforms to spur investments. The coresector index, which measures output of eight infrastructure industries, rose 3% year-on-year in June, slowerthan 4.4% growth recorded in May, data released by the commerce department. The index has 38% weightin the Index of Industrial Production (IIP) and the slower growth in June could also weigh on industrialgrowth which had unexpectedly slowed to 2.7% in May. The IIP data for June is due on August 12, after theReserve Bank of India (RBI) reviews its monetary policy on August 4. – (ET Aug 1, 2015 p 5)

"Kelkar panel on PPP might push to revive 3P India plans: Committee to also suggest showcasingsuccess stories, better dispute redressal" – A panel, headed by former finance secretary Vijay Kelkar,and tasked with examining and suggesting reforms for the public-private partnership (PPP) model ininfrastructure projects, might recommend the reviving of plans to launch a permanent advisory body called3P India, Business Standard has learnt. The 10-member committee, constituted on May 26, has till end-August to submit its report. It is also likely to recommend the need for better pitching to private sectorinvestors of the success stories in PPP, especially in roadways and ports. It might also recommend ways toimprove dispute redressal mechanisms through better exit models for investors. A report. – (BS Aug 5, 2015 p 4)

Raghavan, TCA Sharad – "Growth slows to three per cent in June" – Growth in the index of eight coreindustries slowed to three per cent in June compared to 4.4 per cent in May, underscoring the poor growth ineconomy as shown by the Index of Industrial Production data for May. The IIP in May had slowed to 2.7 percent from 3.4 per cent in April. The eight core industries - Coal, crude oil, natural gas, refinery products,fertilisers, steel, cement, and electricity - comprise nearly 38 per cent of the weight of items included in theIndex of Industrial Production (IIP). An article. – (H Aug 1, 2015 p 15)

NON-BANKING FINANCE COMPANIES"NBFCs are using co's database to arrive at pricing and quantum of loans for seller: NBFCs queue

up to fund sellers on e-marketplaces: With traditional biz facing a slowdown, nimble fin cos tie upwith ecomm cos" – Non-banking finance companies are increasingly lending to sellers on major ecommercemarketplaces even as some of their traditional businesses such as equipment financing and truck fundingface a slowdown. Ecommerce companies such as Snapdeal and Flipkart are tying up with these nimblefinancial institutions to provide funding -mainly working capital - to sellers on their platforms. – (ET Aug 3,2015 p 5)

"NBFCs grab market share from mid-sized state-run banks: Likely to account for 17.1% of totalcredit by 2018-19, against 13.1% at the end of 2014-15" – Non-banking finance companies (NBFCs)like Shriram Transport Finance and Bajaj Finance are slowly but steadily claiming the ground so far occupiedby small and medium-sized public-sector banks like Oriental Bank of Commerce, Allahabad Bank, AndhraBank and UCO Bank. In 2008-09, Reliance Capital was the only NBFC whose balance sheet (net worth)size matched mid-sized state-run banks'. Today, three NBFCs' net worth exceeds $1 billion (Rs.6,400 crore).And the number will rise to five if housing finance companies like HDFC and Indiabulls Housing Finance areincluded. A report. – (BS Aug 3, 2015 pp 1, 6)

– INFRASTRUCTURE FINANCE

"RBI eases project loan recast norms for NBFCs" – The Reserve Bank of India (RBI) allowed non-banklenders to retain the 'standard asset' tag on a restructured loan for an extended period if an infrastructureproject is mired in court cases or has been stuck due to reasons beyond the control of promoters. The movewill help revive the stalled projects in the economy as the non-banking finance companies (NBFC) likeIL&FS lend for projects. For the lender, classification as a standard asset helps in lower provisioning. Areport. – (HT Jul 31, 2015 p 16)

PUBLIC SECTOR ENTERPRISES"Asset sales: Govt selects bankers for divestments" – The government selected investment bankers for

divesting a part of its stakes in 10 state-owned companies, according to two people aware of the development.The government had divided these 10 companies into two baskets of five each, according to data available onthe website of Department of Divestment. SBI Capital Markets Ltd, ICICI Securities Ltd and Yes Bank Ltdwere chosen as the investment bankers for the companies in the first basket. SBI Capital Markets, ICICI

– 24 –

Securities, Edelweiss Financial Services Ltd and Deutsche Bank AG were selected to manage the sale ofstakes in the second basket of companies, the two people mentioned above said on condition of anonymity. Areport. – (Mint Aug 6, 2015 p 8)

REALTY SECTORJain, Ritesh – "Watch out for the Black Money Act" – Real estate, among the most fertile grounds for

black money, will be affected in a big way. An article. – (HBL Aug 3, 2015 p 11)

– AFFORDABLE HOUSING

"Affordable home launches jump 320% in Q1" – The real estate market in the country's top eight citiesrecorded a 320% year-on-year jump in affordable home launches in the quarter to June, according to a reportby property advisory Cushman & Wakefield, indicating a shift in strategy by builders to beat the currentslump. Developers launched 7,000 affordable units in the period against 1,670 in the year-ago quarter, accordingto the report. Of these, 60% or 4,251 units were launched in the National Capital Region, which comprisesDelhi and nearby cities such as Faridabad, Gurgaon, Ghaziabad and Noida. – (ET Aug 5, 2015 p 9)

SMALL SCALE INDUSTRY

MSMEs"MSMEs to drive 'Make in India' vision" – The success of government's vision of make in India will be

heavily dependent on the performance of MSME sector, the bedrock of true local manufacturing. MSMEsare important for the national objectives of growth with equity and inclusion. A report. – (BS Jul 31, 2015 p 18)

– FINANCE

"Banks a key link for MSMEs growth" – Finance is a critical input for the profitable existence and growthof small industries. The banking sector is coming forward to fund the business requirements of MSMEs. TheRBI has also issued guidelines for banks to mandatorily dispense with collateral requirement for loans up toRs.10 lakh to MSMEs. A report. – (BS Jul 31, 2015 p 18)

SMEs

– PHARMACEUTICALS INDUSTRY

"Pharma SMEs to benefit from proposed technology upgradation fund" – The Central governmentrecently announced plans to launch a Rs.500-crore Pharma Manufacturing Technology Upgradation Fundfor small and medium enterprises (SMEs) in the pharmaceutical industry along the lines of a similar scheme(TUFS) for the textile industry. CRISIL has analysed the performance of about 510 SMEs in the pharmaceuticalsector which it rated during 2011-2015. The study revealed that the gearing (excluding promoter loans) ofthese enterprises remained low at 0.57 times, demonstrating the flexibility to borrow funds for upgradation oftechnology, if necessary. – (BS Aug 4, 2015 p 7)

INTERNATIONAL ECONOMICS

BRICS COUNTRIES"Dubai to host BRICS forum in Sept" – A business forum of BRICS nations will be held in Dubai for the first

time next month to provide opportunities for greater economic collaboration between the countries of thefive-member grouping. The forum-initiated and supported by the embassies and consulates of Brazil, Russia,India, China and South Africa - will be held on September 9 at Dubai Multi Commodities Centre. – (HBL Aug4, 2015 p 4)

– 25 –

CAPITAL MARKETS -- INTERNATIONAL"Moody's warns on lending crackdown: Guidelines will make it more difficult to refinance $90bn of

loans due in 2018" – Highly indebted companies could struggle to refinance their debts as a result of theUS crackdown on risky bank lending, according to a new report from Moody's that warns of the 'unintendedconsequences' of loan regulation. Leveraged loans - the loan equivalent of junk bonds - were heavily criticisedfor their role in the 2008 financial crisis. In 2013 new guidelines restricted the terms on which banks couldlend along with the amount. But with a new refinancing cycle set to kick off in earnest in 2018, Moody haswarned the guidelines could make it more difficult to refinance the $90bn of loans due in that year alone. Areport. – (FT Aug 4, 2015 p 20)

FUND MANAGEMENT"Global fund management" – A weekly review. – (FT Aug 3, 2015 Supl. pp 1-20)

INTERNATIONAL MONETARY FUND (IMF)"European Monetary Fund: The IMF is now of Europe, by Europe, for Europe" – An editorial. – (BS

Aug 4, 2015 p 11)

LABOUR & PERSONNEL MANAGEMENT

SKILL DEVELOPMENTCarter, Miriam J – "Skilling India opens up myriad possibilities" – Skill India should grow beyond

employment and job creation. It must lead to discernible educational, social and economic mobility for thebeneficiaries. An article. – (FE Aug 3, 2015 p 12)

MANAGEMENT

CORPORATE SOCIAL RESPONSIBILITYDeodhar, Satish Y – "How CSR can contribute to profit, people and planet" – An article. – (Mint Aug 3,

2015 p 10)

Mehta, Vikram S – "CSR: corporates should reach out" – India Inc can no longer limit its CSR involvementto the new Companies Act. It has to forge partnerships with the beneficiary community. An article. – (IE Aug4, 2015 p 9)

Mehta, Vikram S – "Over the barrel: The advent of the social entrepreneur" – Although the conceptmay not resonate in India yet, corporates can no longer limit their CSR involvement to simply meetingobligations in the new Companies Act. An article. – (FE Aug 4, 2015 p 7)

MISCELLANEOUS"India ranks second among app-fraud countries: Hong Kong tops the index of highest clicks per

download; Germany has the lowest score" – Even as India is on its way to becoming an app-firsteconomy, it has been ranked second in a click-fraud index by Apsalar, a global platform for mobile datamanagement. The index measures and compares the number of clicks while downloading an app acrossvarious countries. According to the Apsalar Fraud Index, for every click that results in an installation, thereare 2.57 fraudulent or unexplained clicks. While India has a score of 282, Hong Kong tops the index ofhighest clicks per download at 318. At 29, Germany has the lowest score. Indian users had 200 clicks perinstall, compared with 60 for US users. This is indicative of fraudulent activities, according to Justin Fibich,senior manager (enterprise sales) at Apsalar. – (BS Aug 5, 2015 p 1)

"Online footprint: local language Internet users grow to 127 million in India" – The number of locallanguage Internet users in India is growing at 47% year-on-year and has touched 127 million in June 2015,thanks to the increasing use of smartphones in rural areas of the country, according to a new report by

– 26 –

Internet and Mobile Association of India (IAMAI) and market research firm IMRB International released.The report says that India has 353 million Internet users as of June 2015. Out of this, 269 million accessInternet at least once a month and the survey has been conducted among them. India has a large scope forlocal language Internet as non-English speaking population constitute 88% of the population. – (Mint Aug 4,2015 p 7)

"Only 8.15% of Indians are graduates, Census data show" – Despite a big increase in college attendance,especially among women, fewer than one out of every 10 Indians is a graduate, new Census data show. Overthe weekend, the office of the Census Commissioner and Registrar-General of India released new numberson the level of education achieved by Indians as of 2011. They show that with 6.8 crore graduates and above,India still has more than six times as many illiterates. – (H Aug 4, 2015 p 1)

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