Page 7 - Banking Finance September 2025

BANK UPDATE

crore. However, the bank's net inter-
est margin (NIM) slightly moderated to Public sector banks flag 1,629 wilful defaulters with
3.95% compared to 3.97% a year ear- dues of Rs. 1.62 trillion
lier. MD & CEO Nidhu Saxena stated Public sector banks (PSBs) have reported 1,629 unique wilful defaulters with
that the bank expects its full-year NIM outstanding loans amounting to Rs. 1.62 trillion as of March 31, 2025, ac-
to average around 3.75%.
cording to data shared by the Union Finance Ministry. This information was
Non-interest income declined 8% YoY provided in response to a query in the Rajya Sabha by Minister of State for
to Rs. 825 crore, with management Finance Pankaj Chaudhary.
highlighting potential margin pressure These defaulters are listed on credit information company platforms such
if interest rates fall further. Despite as CIBIL, Equifax, and CRIF High Mark. The government also revealed that
this, the bank remains optimistic about nine individuals declared as Fugitive Economic Offenders have had assets
sustaining profitability through efficient worth Rs. 15,298 crore seized under the PMLA and another Rs. 750 crore
asset deployment and digital transfor-
mation. Analysts noted that while under the FEOA. PSBs have recovered Rs. 1.65 lakh crore from write-offs
over five years.
margin compression may occur in later
quarters, healthy credit growth and Measures against wilful defaulters include denial of fresh credit, debarment
capital adequacy provide resilience. from capital markets, and restrictions on launching new ventures for five
years. The government continues to enhance frameworks for recovery and
The bank's focus on risk containment
and branch-level productivity improve- deterrence through both legislative and institutional mechanisms.
ments are expected to support earn-
ings in the coming quarters, making seen as a response to concerns that These initiatives align with Bank of
BoM one of the more consistent PSBs high balance requirements restrict fi- Baroda's broader vision of combining
this year. nancial inclusion. Customers welcomed legacy trust with digital transformation,
the rollback, noting it as a step toward as it targets enhanced customer expe-
ICICI Bank revises mini- accessible banking. rience across sectors. With rising expec-
mum balance rule after tations from public sector banks to drive
criticism Bank of Baroda celebrates financial innovation, BoB's efforts rein-
ICICI Bank has revised its earlier direc- 118th year with tech- force its position as a progressive player
tive requiring Rs. 50,000 average driven innovations in the evolving banking ecosystem.
monthly balance (AMB) for new savings
accounts, reducing it to Rs. 15,000 af- Marking its 118th Foundation Day, RBI mandates banks to
ter facing public backlash. The updated Bank of Baroda launched a suite of pay penalties for delay in
AMB norms apply to accounts opened customer-centric, tech-enabled ser-
post August 1, 2025, excluding salary vices under the theme "Trust Empow- settling claims of deceased
accounts, senior citizens, Jan Dhan, and ered by Innovation." Key initiatives in- customers
accounts opened before July 31. cluded the launch of 'bob World Busi- Starting January 1, 2026, banks will be
ness' app for MSMEs and corporates,
In metros and urban areas, the AMB required to settle claims of deceased
is Rs. 15,000, Rs. 7,500 for semi-urban, a Virtual Front Office using AI and 3D account holders within 15 days, failing
holograms, and a Braille debit card for
and Rs. 2,500 in rural zones. A penalty which they must pay penal interest or
of 6% of the shortfall or Rs. 500, which- the visually impaired. compensation. The RBI's new directive
ever is lower, will apply for non-main- The bank also introduced green financ- mandates interest at the bank rate
tenance. HDFC Bank clarified that its ing schemes and global UPI services via plus 4% for delayed deposit claims and
regular savings AMB remains Rs. 'bob E Pay International'. The celebra- Rs. 5,000 per day for locker delays.
10,000, not Rs. 25,000 as reported. tions were attended by DFS Secretary The move targets procedural delays
ICICI will offer three premium pro- M. Nagaraju, who applauded the and rising unclaimed deposits. For ac-
grams with higher thresholds that bank's focus on inclusive growth and counts with nominations or survivorship
waive MAB charges. The decision is sustainability. mandates, banks must release funds

BANKING FINANCE | SEPTEMBER | 2025 | 7