Page 8 - Banking Finance February 2026

BANK UPDATE

Small savings interest rates plicable only to fresh deposits or accre- Bank of Baroda in the Reliance Com-
tions during the review period. munications Infrastructure insolvency
unchanged for eighth
As a result, deposits under the Sukanya matter.
straight quarter Samriddhi Scheme will continue to The appellate tribunal held that while
The government has decided to keep earn 8.2 per cent interest, while the the CoC has wide commercial discre-
interest rates on small savings schemes three-year term deposit rate remains tion in deciding various aspects of a
unchanged for the January-March at 7.1 per cent. The PPF rate has been resolution plan, including the manner
quarter of FY26, marking the eighth retained at 7.1 per cent, and post of- of distribution, such discretion ends
consecutive quarter of status quo on fice savings deposits will continue to once the plan is approved. "After the
these rates. The decision applies to earn 4 per cent. The decision provides commercial wisdom has been exercised
popular instruments such as the Public stability to savers amid fluctuating by approving the resolution plan, modi-
Provident Fund (PPF), Sukanya market interest rates. fication of the distribution mechanism
Samriddhi Scheme and National Sav- is impermissible and cannot be justified
ings Certificate (NSC), according to an Creditors cannot alter ap- in the name of commercial wisdom,"
office memorandum issued by the Min- the tribunal said.
istry of Finance. proved resolution plan: The National Company Law Tribunal
"The rates of interest on various Small NCLAT had earlier approved the resolution
Savings Schemes for the fourth quar- The National Company Law Appellate plan submitted by Reliance Projects &
ter of FY26, starting from January 1, Tribunal (NCLAT) has ruled that the Property Management Services, a sub-
2026, and ending on March 31, 2026, committee of creditors (CoC) cannot sidiary of Jio. The plan was cleared by
shall remain unchanged from those modify or alter a resolution plan once 68 per cent of the CoC's voting share
notified for the third quarter," the it has been approved, particularly with in August 2021. Although Bank of
memorandum said. Interest rates on regard to the distribution of funds to Baroda had voted in favour of the plan,
small savings schemes are reviewed dissenting creditors. The ruling came some lenders, including IDBI Bank and
every quarter, and any revision is ap- while dismissing an appeal filed by State Bank of India, had dissented.

FSIB recommends Brajesh
Payments banks' deposits jump 57% to Rs. 25,605
Kumar Singh as MD & CEO
crore in FY25
of Canara Bank
Deposits with payments banks rose sharply by 57 per cent year-on-year to
The Financial Services Institutions Bu-
Rs. 25,605 crore as of March 2025, according to the Reserve Bank of India's
reau (FSIB) has recommended Brajesh
latest Trends and Progress of Banking in India report. As of end-March 2025,
Kumar Singh for appointment as man-
six payments banks were operational in the country, with a combined net-
work of 81 branches. aging director and chief executive of-
ficer of Canara Bank. Singh is currently
The RBI noted that during 2024-25, the combined balance sheet size of pay- serving as an executive director at In-
ments banks recorded strong growth, driven primarily by higher deposits dian Bank. The recommendation fol-
on the liability side and investments on the asset side. Savings and current lows an interaction process in which
account deposits accounted for 68.1 per cent of total liabilities at the end the Bureau evaluated 17 candidates
of the financial year. On the asset side, investments were dominated by for the top role on December 22.
statutory liquidity ratio (SLR) securities, in line with regulatory restrictions
In a statement, FSIB said the recom-
that prohibit payments banks from undertaking lending activities.
mendation was made after assessing
The regulator also highlighted that payments banks have remained profit- candidates' performance during the in-
able for the third consecutive year in FY25. Operating profits improved due teraction, overall experience, and other
to higher interest income, even as non-interest income declined. Net profit prescribed parameters. Singh was ap-
stayed positive, though it moderated slightly owing to increased provisions pointed executive director of Indian
and contingencies during the year. Bank on March 10, 2024, for a three-

8 | 2026 | FEBRUARY | BANKING FINANCE