Saturday, November 28, 2020

Banking Licenses to Corporate May not be a Good Idea

An internal working group (IWG) of the Reserve Bank of India in its report has recommended that large business groups as well as NBFCs which have an asset size of ₹ 50,000 crores or more may be allowed to promote banks in India (RBI, 2020). For an economy like India which has avoided giving banking licenses to corporate and ensured that the banks in India are widely held and there is no ownership concentration in Indian Banks, the proposed recommendation of IWG is a sweeping change and naturally raising a number of questions. Large numbers of economists including the former RBI Governor Raguram Rajan and Deputy Governor Viral Acharya have raised questions about this sweeping recommendation as well as the timing (Acharya & Rajan, 2020). It is quite possible that it may prove to be either good or bad idea for Indian banking sector but only time can give the right answer. However, the practices across the world may give insight into the matter.

Monday, July 6, 2020

COVID19 and India: Till 5th July 2020

Life is returning back to the normal post lockdown. All the gains during the nationwide lockdown in India have been almost thinned or evaporated and India lost the opportunities to consolidate its position and give conclusive end to coronavirus outbreak. Now, things getting worse every day, India need to put far higher efforts. In this fight against coronavirus, every effort must to be conceptualized and implemented locally than depending on unfruitful centralized instructions. This article analyses the national as well as state data till 5th July 2020 for the purpose of analyses and comparisons.

Tuesday, June 30, 2020

COVID19 and India: Till 28th June 2020

The nationwide blanket lockdown in India is now a thing of past. Post lockdown, far higher efforts are needed. To be successful, this fight against coronavirus needs to be localized. Centralized efforts wouldn’t be effective anymore. This article analyses the national as well as state data till 28th June 2020 for the purpose of analyses and comparisons.

Tuesday, April 28, 2020

Fight Against Coronavirus: Observation from 27th April 2020 Data

The world is now a changed place while it still fights against the Coronavirus pandemic. India is no exception to it. With very limited resources and insufficient healthcare infrastructure in the country, the daily data about the coronavirus pandemic clearly indicates that India has till now performed remarkably. Here are a few observations from the data of 27th April 2020 on the Coronavirus pandemic:-

Saturday, April 25, 2020

Is Lockdown the Only Alternative to Respond to the Coronavirus Outbreak in India?

Academicians, economists, business personalities as well as the political parties are questioning the central government’s decision to implement a nationwide blanket lockdown in response to the coronavirus pandemic. Considering the cost associated with the lockdown, questions by these personalities are not uncalled for. In this peculiar situation when India has already spent one month in a stringent lockdown, one must ask whether the lockdown is the only alternative that India has to respond to the coronavirus outbreak. To answer this question, there is need to explore as how other countries in the world are responding to this crisis which challenges every conventional ways and means.

Tuesday, March 31, 2020

COVID19 and India: Till 29th March 2020

A nationwide blanket lockdown has been implemented in India on 25th March in response to fight against coronavirus outbreak. It is expected that it would bring the growth in the numbers of cases down and improve all the other indicators. This article aims at analysing the COVID19 data (national as well as state level) on the coronavirus to understand what turns the coronavirus outbreak is taking and whether there is improvement. This article analyses the national data till 29th March 2020. In this analysis 21st March has been taken as point of reference for the purpose of analyses and comparisons.

Thursday, March 26, 2020

COVID19 and India: Till 21st March 2020

What started in Wuhan, China allegedly in the mid of October 2019 and officially in the last week of December 2019 is turning out to be a global pandemic infecting almost half of the world. Because of the faster transmission of the Coronavirus, there is fear frenzy behaviour across the globe and India is not an exception to it (Upadhyay, 2020). There are a lot of reports in the media which suggest that coronavirus is going to be a very tough healthcare challenge for India considering its very limited healthcare infrastructure.

Wednesday, March 11, 2020

Coronavirus, Economy and A Fear Frenzy Behaviour

Chinese economy is already under huge pressure due to the ongoing economic slowdown and the trade war between the United States and China is escalating. The transmission of COVID19 virus in China has reached a contagious level that as per news reports China has to insulate the whole state of Hubei from rest of China mainland. It is going to cost the global economy in general and Chinese economy in particular. There are a few signals that suggest the same but those signals are very weak and will take longer to clearly indicate but it is certain that the world supply chain will be hit adversely.

Friday, February 14, 2020

Does the Budget 2020 Provide Solution to the Woe of Agriculture?

The way GDP growth rates in last few quarters have shown downward trend has surprised everyone. International Monetary Fund (IMF) had predicted a growth rate of 7.3% in April 2019 for Indian economy. But by the end June 2019, independent institutions across world started doubting about those growth numbers. Now Indian economy is expected to grow at 5% in the current fiscal year. Even government’s advance estimates are around 5%. However government along with IMF and many independent institutions has called this trend to be a short term temporary phase (ET, 2020). These institutions are optimistic that Indian economy would be able to resume high growth numbers in next few quarters. But a lot is dependent on the efforts and stimulus provided in the central budget for fiscal year 2020-21.

Thursday, December 19, 2019

Divergence of Bad Loans and their Provisioning and NPA in Indian Banking System

Slowdown in Indian EconomyNPAs have become malaise for the whole banking system in India. For many years, RBI is on drive to clean the banking system but quarter after quarter NPAs are being recognized by banks themselves or detected by RBI. A recent RBI assessment reveals that many lenders including SBI and PNB have been found to be under reporting bad loans as well as their provisioning in last financial year 2018-19. This list democratically includes both the private as well as public sector banks. Those names include UCO Bank, Yes Bank, Union Bank, and Lakshmi Vilas Bank (livemint, 2019). It is quite possible that the final list may many more name names. Similar trend was found in last financial year also. Most importantly the amount of divergence had been very high. For example, in case of SBI, this divergence is tune of ₹ 11,932 crores on account of bad loans and ₹ 12,036 crores towards provisioning. That simply means if these numbers had been adjusted, the bank would have reported a loss of ₹ 6,968 crores than its reported profit of ₹ 862 crores. It had been a quiet practice for long in the Indian banking sector but under wraps and is not just limited to Indian market. However the scary situation is forcing RBI to take serious cognizance of this issue.