In order to recover bad loans from borrowers, some public sector banks are putting pressure on the guarantors of wilful loan defaulters. One such incidence happened when Allahabad Bank published a public notice exposing the guarantor of a borrower who defaulted on his loan. The state-run bank published the photographs of two guarantors as well in the newspapers as part of a publi
Tag: lending
Post
Post
RBI relaxes norms for bank credit to MFIs
Reserve Bank of India (RBI) relaxed the norms for categorising priority sector lending of commercial banks to microfinance institutions (MFIs). According to the present norms, banks can categorise credit extended to MFIs as priority sector lending if
if at least 75 per cent of loans given by MFIs is for income generating activity. Now, the central bank relaxed this limit to at least 70 per cent. Thus, according to the relaxed norm, bank credi
Post
Minister urges state-run lenders to trim base rate
At a review meeting with top officials of state-run banks, Finance Minister P Chidambaram urged them to cut base rates in order to spur credit growth in the economy. Chidambaram feels that reduction of the base rate will be a powerful booster to credit growth and this may in turn turn around the economy, which grew at a decade-low pace of 5 percent in 2012-13. The minister argues that while Reserve Bank of India trimmed policy rates by 125 basis points, banks must
Post
RBI includes 3 more sectors in infra category
Slurry pipelines and capital dredging projects would be eligible for concessional loan from banks as the Reserve Bank of India (RBI) brought these sectors under the ambit of infrastructure lending. Besides the above sectors, the central bank also brought telecom and telecommunications services under the infrastructure ambit. This will make loans cheaper to companies in these sectors.
Post
SIDBI to issue bonds, other instruments worth Rs 135 bn
In 2013-14, Small Industries Development Bank of India (SIDBI) plans to issue bonds and other instruments with a cumulative worth of Rs 13,500 crore to expand its business operation, agency reports indicate. The development bank would issue various instruments including bonds, Certificate of Deposits (CDs) and fixed deposits to raise the
Post
Ratings of 3 MFIs upgraded by ICRA
Noting the resilience in the financial position of three microfinance institutions (MFIs), rating agency ICRA upgraded their ratings. The three MFIs are Grameen Financial Services Private GFSPL), Ujjivan Financial Services (Ujjivan) and Utkarsh Microfinance Private (Utkarsh). According to the agency, the upgrade reflects likely improvement in the resilience of their earnings, superior ability to scale up as well as strengthened capacity to cont
Post
PE investment declines in micro finance sector
Private Equity (PE) investors are said to be cautious in investing in micro finance institution (MFI) as is reflected in the fall in fund flows from these sources. The amount of PE deals in the MFI sector has been declining year after year with the calendar year 2012 witnessing only $104.5 million worth of deal compared to
$113.04 million in 2011 and $146 million in the previous year, data from VC Circle
Post
World Bank gives $84 mn loan for Bihar project
An agreement for credit of $84 million (equivalent) from World Bank for the Bihar Panchayat Strengthening Project was signed. Nilaya Mitash, Joint Secretary, Department of Economic Affairs, Ministry of Finance signed on behalf of Government of India and Michael Haney, Operations Advisor, World Bank, India on behalf of the World Bank. On behalf of Government of Bihar, Amitabh Verma, Principal Secretary, Department of Panchayati Raj signed the
Post
NPAs of banks rises 31.8% in FY13
RBI Deputy Governor HR Khan informed that the gross non-performing assets of banks rose 31.8 per cent, while restructured standard advances expanded 40 per cent in 2012-13. Speaking at an event in Thiruvananthapuram, Khan attributed the rise in the NPAs to uncertain macroeconomic environment, underlying issues in credit assessment and bad loan management by
Post
Some banks recast debt outside CDR framework
According to a study by CARE Research, some banks are restructuring the debt of their borrowers through bilateral negotiation without referring the cases to the corporate debt restructuring (CDR) cell. The study found that out of the Rs 177,333 crore outstanding restructured advances of 10 large banks, only Rs 58,366 crore worth of loans were referred to the CDR cell