Page 10 - Banking Finance July 2022

RBI CORNER

(ACC) approved the proposal of ap- dicators, a Reserve Bank of India (RBI) ers, it has been decided to extend the
pointment for a period of four years study has said. timeline for implementation of
from the date of notification of the the...provisions of the master direction
"We can identify a core subset of
appointment, or until further orders, to 1 October 2022," RBI said in a noti-
highly stressed states from among the
whichever is earlier. fication on its website.
10 states identified by the necessary
Dholakia was the Economics Area fac- condition i.e., the debt/ GSDP ratio. The first provision is regarding card is-
ulty at IIM Ahmedabad from Septem- The highly stressed states are Bihar, suers being mandated to seek one-
ber 1985 to April 2018 when he super- Kerala, Punjab, Rajasthan and West time password-based consent from the
annuated. He was earlier on the Mon- Bengal," said the RBI study on state cardholder for activating a credit card,
etary Policy Committee of the RBI finances released recently. if not activated by the customer for
which decides the policy rates. more than 30 days from the date of
It said Punjab is expected to remain in
issuance. The RBI had said that if no
Venu Srinivasan is the Chairman Emeri- the worst position as its debt-GSDP
consent is received for activating the
tus of TVS Motors. He is also on the ratio is projected to exceed 45 per cent
card, card-issuers will have to close the
board of Tata Sons Ltd. in 2026-27, with further deterioration
credit card account without any cost
in its fiscal position. Rajasthan, Kerala
Patel is the Chairman of Zydus to the customer within seven working
and West Bengal are projected to ex-
Lifesciences Ltd, as well as a former days from date of seeking confirmation
ceed the debt-GSDP ratio of 35 per
president of FICCI (2016-17). from the customer.
cent by 2026-27. These states will
Mahindra is the chairman of Mahindra The second provision stated that card-
need to undertake significant correc-
group, which has presence across seg- issuers will have to ensure that the
tive steps to stabilise their debt levels.
ments such as automobiles to IT, credit limit as sanctioned and advised
agribusiness and hospitality sectors. to the cardholder is not breached at
RBI extends deadline to
any point in time without seeking ex-
implement card rules plicit consent from the cardholder. The
5 states need to take
The Reserve Bank of India (RBI) ex- third set of regulation said that issuers
steps to stabilise debt lev-
tended, by three months, the deadline shall not capitalize on unpaid charges
els: RBI to implement three provisions as part for compounding of interest.
of new regulatory guidelines for issuing
Bihar, Kerala, Punjab, Rajasthan and "The stipulated timeline for implemen-
credit and debit cards to 1 October.
West Bengal are the five highly stressed tation of rest of the provisions of the
states after taking into account the "Considering various representations master direction remains unchanged,"
warning signs flashing from all the in- received from the industry stakehold- RBI said.

Banks' gross NPA drops below 6% in March '22

Gross non-performing assets (NPAs) of the banking sector dropped below 6 per cent as of March 2022 - the lowest
since 2016 - and net NPAs fell to 1.7 per cent during the same period, indicating that the sector has remained largely
unscathed from the ill-effects of the Covid-19 pandemic so far, M Rajeshwar Rao, deputy governor of the Reserve
Bank of India (RBI), said.

At the same time, it would be important to assess if the improvement in the asset quality is broad based or only
because of regulatory forbearance, he said. "The preliminary assessment of the health of the banking sector is en-
couraging," Rao said.
"The asset quality of banks has improved, and the gross NPAs and net NPAs of the banks have improved from the
pre-pandemic levels. The fresh slippages have broadly been brought under control. Banks have also enhanced their
provisions including provisions for restructured accounts," he added.

10 | 2022 | JULY | BANKING FINANCE