Page 10 - Banking Finance September 2018

RBI CORNER

RESERVE BANK

NEWS
NEWS
NEWS
NEWS
NEWS

S Gurumurthy, S Marathe appointed to RBI board RBI to scrutinise 200 bad
The Government has appointed Swaminathan Gurumurthy and Satish Kashinath loan accounts
Marathe to the Central Board of the Reserve Bank
of India (RBI). The names were approved recently Reserve Bank
as per provisions of Section 81C of the RBI Act, 1934 of India has
by Prime Minister Narendra Modi-led Appointments been examining
Committee of the Cabinet. They have been ap- about 200 bad-
pointed as a part-time, non-official director for the loan accounts
period of four-year. going as far
back as 2011 as part of its annual in-
RBI to pay Rs.500-billion dividend to govt spection of bank books to pre-empt
any nasty surprises in bankruptcy
Reserve Bank of India will pay Rs 500 billion dividend to the government for its
financial year ended June 2018. court or subsequent to debt resolu-
tion, said several people with knowl-
"The central board of directors of the RBI, ap- edge of the matter.
proved the transfer of the surplus, amounting to
These include the accounts of
Rs 500 billion for the year ended June 30, 2018,
to the Government of India," the central bank said Videocon, Essar Steel, ABG Shipyard,
in a statement. The RBI's financial year extends Bhushan Steel and Monnet Ispat,
they said. The central bank is looking
from July to June.
at repayment history, classifications,
The RBI had last year transferred a surplus of Rs 306 billion as dividend to the provisions and debt restructuring
government for the year ended June 30, 2017, which was less than half of what among other things to ensure that all
it paid in 2015-16 (Rs 658.76 billion). The surplus payout in June 2017 (for 2016- procedures were correctly followed,
17) was low on account of expenses incurred on printing new currency notes the people said.
following demonetisation in November, 2016.
"The RBI has sought details from
Madan Sabnavis, chief economist, CARE Ratings, said this is an assured amount, some banks regarding the provisions
which will provide cushion against shortfall in revenue, especially in the elec- made in some of the big stressed
tion year. accounts, the asset classification
The sizeable transfer of surplus from the RBI to the government will ease fears adopted by various banks for the
regarding potential shortfalls in the budgeted amount of dividends and surplus. same account. I believe the regula-
Nevertheless, the dividends to be transferred by financial and non-financial tor is assessing whether the correct
corporates entities will remain the key, Aditi Nayar, principal economist, ICRA, processes were followed," said a
said. banker.

10 | 2018 | SEPTEMBER | BANKING FINANCE