State Bank of India is in the process of completing the merger of Bhartiya Mahila Bank with the bank. The move is one of the series of reforms planned by Government for the development of Indian banking and financial services sector. As per government sources, the agenda of reforms include capital infusion in banks in FY18 and putting in place measures for managing the rising bad loans in banks across various loan segments including corporate loans, infrastructure loans, business loans and other loans.
Indian government has planned to disburse collateral free business loans worth Rs. 5 crore to Indian startups under its credit guarantee scheme. The government will cover up to 80 per cent of loans offered by banks to startups. The scheme is expected to encourage all prominent banks in India including HDFC Bank, ICICI, and SBI to become more active in offering business loans to start-ups. The scheme will be monitored and supervised by Department of Industrial Policy and Promotion.
ICICI Bank has raised funds of Rs. 3,425 crore through Basel III compliant bonds. The bonds with no specific maturity period will carry an interest rate of 9.20 percent payable annually. Some of the leading institutional investors including mutual funds, insurers and business wealth managers have invested in the bond issuance.
Chairman of Banks Board Bureau wrote a letter to Finance Minister and Prime Minister of India seeking an action plan to control the increasing quantum of bad loans of the banks. Many state run and private banks including Kotak Mahindra Bank have reported an increase in the quantum of bad loans. As per the report, bad loans of state run banks rose by over Rs. 1 lakh crore at Rs. 6 lakh in December, 2016 on year on year basis.BBB in its letter has asked the ministry to penalise the banks who are held accountable for delaying the process of resolving or managing bad loans.
ICICI Bank and other lender banks have decided to sell their 51 percent stake in ABG Shipyard Company to recover their business loan outstanding dues of Rs. 16,400 crore. ICICI Bank along with IDBI Bank, PNB and Oriental Bank of Commerce hold 51 percent stake in the company. As per sources, ICICI Bank has the highest stake at 11 percent among all lenders holding a stake in the company.
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