Page 10 - Banking Finance July 2017

RBI CORNER

RESERVE BANK

NEWS
NEWS
NEWS
NEWS
NEWS

RBI launches new series of Rs 500 notes Banks will need more
Reserve Bank of India (RBI) said on Tuesday that it was issuing a new batch of Rs capital: RBI governor
500 notes similar to the ones introduced after the 8
November ban on old high-value banknotes. The de- RBI deputy governor S S Mundra said
sign of these new notes will be similar to the exist- recently that pub-
ing Rs500 note which was introduced at the time of lic sector banks
demonetization. The current Rs500 note will con- will need more
tinue to be valid, the RBI said. capital than the
Rs 70,000 crore
RBI recommendations to be binding on banks promised over

Aday after an internal advisory committee (IAC) of the five years in 2015.
central bank took the first decisive step on bad loan reso- He also mentioned that the RBI has
lution, Reserve Bank of India (RBI) deputy governor N.S. not set any time frame for identify-
Vishwanathan, in an interview, spoke about the way ing additional loan defaulters for pro-
ahead. The recommendations made by RBI will be bind- ceedings under the new bankruptcy
ing on banks, he said. law. RBI had asked banks to proceed
against the top 12 loan defaulters
Banks to record pension payment order numbers: RBI which account for 25% of all bad
RBI pays agency commission (also called turnover commission) to the agency loans.
banks for the government business handled by them. It was advised by the RBI The deputy governor's statement on
to all agency banks to record the pension payment order (PPO) numbers on the capital needed comes close on the
passbook of pensioners/ family pensioners. The PPO number is aimed at mitigat- heels of a Moody's Investor Service
ing the difficulties reported by pensioners to get duplicate PPO in case the origi- report stating that 11 public sector
nal going missing, transfer of pension account, and commencement of family banks, rated by the international rat-
pension to spouse or dependent children after the death of the pensioner, among ings agency, will need nearly three to
others.
five times the funds promised by the
12 NPA accounts listed for insolvency proceedings government in its Budget. The
agency said that the rated banks will
To suppress the banking system of big-ticket stressed assets, the Reserve Bank
of India's internal advisory committee (IAC) has recommended for immediate need capital of Rs 70,000-95,000
reference under the Insolvency and Bankruptcy Code (IBC) 12 accounts totalling crore - almost five times the remain-
about 25 % of the current gross non-performing assets (GNPAs) of the banking ing Rs 20,000 crore budgeted by the
system. GNPAs of the banking system are estimated at about Rs 8 lakh crore. government towards fund infusion
The RBI did not disclose the names of the accounts. until March 2019.

10 | 2017 | JULY | BANKING FINANCE

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