Page 7 - Banking Finance January 2022

BANK UPDATE

He said the Nabard is promoting inte- 2.85 lakh crore on account of loan dues Govt-sponsored bad bank
grated farming in different parts of the of 13 corporates even as the banks are
country. "The farmer can't depend on used to bail out ailing financial institu- likely to start operations in
a single crop for his sustenance. He tions such as Yes Bank and IL&FS, January
can't be left to the mercy of the mar- United Forum of Bank Unions alleged. The bad bank sponsored by the gov-
ket forces for selling the produce. He
In press release, UFBU's Convener B ernment is likely to start operations
should have a bouquet of crops to de-
Rambabu said the organisation calls from the second week of January, ac-
pend on," he said. cording to a report. This could help the
for a two-day all India bank strike on
"We made it a kind of movement December 16 and 17 protesting banking industry to dress up its balance
around it. Loans are going from the against Banking Laws (Amendment) sheet as the fiscal year comes to an
banks through our funding. Even small Bill 2021 and opposing the centre's al- end in a quarter.
farmers with a small chunk of land too leged move to privatise PSBs. According to the ET report, banks may
is getting funds to grow, say, horticul- According to the statistics given by the report one-off gains in their fourth-
tural crops like pomegranate, under UFBU, the 13 corporates' outstanding quarter earnings as they have already
this scheme," he said. fully provided for those sticky loans
dues were at Rs 4,86,800 crore and it
"Going forward this is going to be a was resolved at Rs 1,61,820 crore re- estimated at about Rs 82,000 crore in
kind of insurance against market ca- sulting in a loss of Rs 2,84,980 crore. 22 accounts.
lamities. You need to have a multi- The bad bank plans to recruit as many
pronged approach - on one side we are Rs. 2,000 notes now 1.75% as 50 professional executives for the
promoting integrated farming and asset management company (AMC) -
supporting farmer producer of total bank notes in cir- India Debt Resolution Company Ltd
organisations," he said. culation (IDRCL) - to begin with, the business
daily mentioned citing people familiar
The number of Rs 2,000 currency notes
BOB may replace RBL in in circulation has decreased to 223.3 with the matter. The bad bank's regu-
Bank Nifty: Edelweiss Al- crore pieces or 1.75 per cent of total latory framework is being worked out.
notes in circulation (NIC) in November "We are currently busy setting up the
ternative Research this year, compared to 336.3 crore infrastructure as we aim to generate
Edelweiss Alternative Research said pieces in March 2018. write-backs for lenders by the end of
that the forthcoming Nifty Bank review this financial year," the publication
is likely to see Bank of Baroda replac- Printing of banknotes of particular de- quoted one of the senior executives
ing RBL Bank nomination is decided by the govern- involved in the matter as saying.
ment in consultation with the Reserve
This announcement is likely to come in Bank to maintain desired denomination The assets that are to be taken over
the second half of February 2022. mix for facilitating transactional de- by the bad bank are spread across in-
dustries such as power, road construc-
BoB will have a weightage of 1.8% on mand of public, said Pankaj Chaudhary, tion, infrastructure and manufacturing
inclusion in the Nifty Bank index, it Minister of State in Finance Ministry,
include Castex Technologies, Lavasa
said. While Bank of Baroda could see in a written reply in the Rajya Sabha. Corporation, Jaypee Infratech, GTL and
an inflow of $63 million on inclusion, "As against 3,363 million pieces (mpcs) Reliance Naval.
shares of RBL Bank could see a selling
of Rs 2,000 denomination banknotes in "The bad bank will bring more effi-
of $28 million on exclusion, said Edel- circulation on March 31, 2018 consti-
weiss Alternative Research. ciency and expertise under one roof as
tuting 3.27 per cent and 37.26 per cent the whole objective is to resolve dis-
of NIC in terms of volume and value tressed assets," the business daily
Banks lost Rs. 2.8 trillion respectively; 2,233 mpcs were in circu- quoted Ashutosh Khajuria, executive

due to loan default of 13 lation on November 26, 2021, consti- director and CFO at Federal Bank as
tuting 1.75 per cent and 15.11 per cent saying. "Realistic valuation will likely
firms: Bank union of NIC in terms of volume and value, ensure lower haircuts increasing
Public sector banks have lost nearly Rs respectively," he said. chances of higher recovery." T

BANKING FINANCE | JANUARY | 2022 | 7