Page 10 - Banking Finance June 2021

BANK UPDATE

Citigroup creates clean dollar in capital for each dollar worth DBS Bank India, said, "We are
of Bitcoin, based on an 8% minimum humbled and proud to be featured on
energy transition group capital requirement. Other assets with the 'World's Best Banks' list for the
Citigroup Inc has created a unit within its this highest-possible risk weighting second consecutive year. Over the
energy investment bank dedicated to the include securitized products where years, we have built a strong
clean energy transition, aiming to capture banks have insufficient information customer-centric franchise, and this
more business from the shift towards a about underlying exposures. recognition shines the light on the
lower carbon economy, according to an "The growth of cryptoassets and resilience and a strong sense of
internal memo seen by Reuters. purpose demonstrated by our
related services has the potential to
The entity will be headed by Serge raise financial stability concerns and employees to support customers amid
Tismen and Shail Mehta, and will focus increase risks faced by banks," the the global crisis. We will continue to
on companies including those involved Basel Committee, which includes the deepen customer relationships and
in hydrogen, charging infrastructure, Federal Reserve and European Central build journeys that proactively address
carbon capture and sequestration and Bank, said in the report. "The capital their needs."
biofuels, said the memo, the contents will be sufficient to absorb a full write-
of which were confirmed by a bank off of the cryptoasset exposures State-owned banks likely
spokeswoman. The move comes after without exposing depositors and other to come up with VRS
Citigroup said in March it would senior creditors of the banks to a loss." Two state-owned banks being picked
consolidate three of its investment up for privatisation by the government
banking units - energy, power, and DBS named in Forbes are likely to come out with an
chemicals - into a single entity that attractive voluntary retirement
would be more responsive to clients' 'World's Best Banks' list in
scheme (VRS) to get rid of the extra
focus on sustainability. India flab.
Basel panel on banking DBS has been named by Forbes in their Finance Minister Nirmala Sitharaman
list of World's Best Banks 2021. DBS
proposes to put crypto while unveiling Budget 2021-22 on
was ranked #1 out of 30 domestic and February 1 had announced that the
assets in highest risk international banks in India for the government proposed to take up the
category second consecutive year. privatisation of two public sector banks
This is the third edition of the 'World's (PSBs) and one general insurance
Banks will face the toughest capital
requirements for holdings in Bitcoin Best Banks' list by Forbes, conducted company.
and other cryptoassets under global in partnership with market research An attractive VRS will make them lean
regulators' plans to ward off threats to firm Statista. Over 43,000 banking and fit for takeover by the private
financial stability from the volatile customers across the globe were sector entities that are keen to enter
market. surveyed on their current and former the banking space, the sources said.
banking relationships.
The Basel Committee on Banking VRS is not forced exit but option for
Supervision said that the banking The customer survey rated banks on those who would like to take early
industry faces increased risks from general satisfaction and key attributes retirement with good financial
cryptoassets because of the potential like trust, digital services, financial package, the sources said adding that
for money laundering, reputational advice, and fees. it has been done in the past before the
challenges and wild swings in prices "This year's list includes a record consolidation of some of the PSBs.
that could lead to defaults. number of award winners, reflecting The NITI Aayog, which has been
consumers' increasing confidence in
The panel proposed that a 1,250% risk entrusted with the job of identifyng
weight be applied to a bank's exposure their banks," revealed Forbes in its suitable candidates for the
to Bitcoin and certain other official announcement. privatisation, has recommended
cryptocurrencies. In practice, that Commenting on the recognition, Surojit names to a high-level panel headed by
means a bank may need to hold a Shome, Managing Director and CEO, Cabinet Secretary Rajiv Gauba. T

10 | 2021 | JUNE | BANKING FINANCE