Page 8 - Banking Finance February 2018

BANK UPDATE

HDFC to raise Rs.11000 NPA's rising in education loans
crore Education loans have started bleeding the banking sector with the default in
repayment rising to 7.67 per cent of the outstanding
HDFC has approved a preferential amount at March- end, 2017 from 5.7 per cent 2 years
share issue ago. As per the data compiled by the Indian Banks As-
worth Rs.
sociation, the total outstanding education loan at end
11,104 crore to
of the fiscal 2016-17 was Rs 67,678.5 crore, of which Rs
five investors 5,191.72 crore was NPA.
and said it is
looking to buy out a health insurance The government is already struggling to deal with the problem of mounting NPA
company. Most of the fund will go in in the public sector banks and has drawn a mega recapitalisation plan to
to maintaining its stake in HDFC Bank. strengthen them. The IBA data revealed that the non-performing asset (NPA) in
the segment in percentage of the total loan has been constantly increasing.
Most of PSU banks failed The NPA was 5.7 per cent in 2014-15, which rose to 7.3 per cent in the following
to qualify for recapital- fiscal and further to 7.67 per cent in the last financial year. The government had
earlier modified the IBAs Model Education Loan Scheme with a view to reduce
ization plan the incidence of NPAs in the segment.
The finance ministry said it has not pro-
vided the entire Smaller Banks rush to NCLT
amount towards Smaller banks have been more active in filing cases to the National Company
capital infusion in Law Tribunal (NCLT). While among the large banks
public sector Bank of Baroda led the list, Uco Bank, Bank of
banks as most of Maharashtra, and Dena Bank have initiated more
them failed to meet the performance NCLT proceedings than their larger rivals such as State
target. As part of Indra dhanush Plan Bank of India and Punjab National Bank. SBI, however,
to revitalize PSU Banks, the govern- led the list in terms of value having initiated 18 cases
ment had proposed to infuse Rs.70,000 with Rs 340.97 billion at stake, as of September 30.
crore out of budgetary allocations in
them. So far, it has infused Rs.51,858 Indian Overseas Bank to write off losses of over
crore in public sector banks.
Rs.6,978 crore
Air India ties up with Indian Overseas Bank is going to utilize the funds in its share premium account

banks for loans to buy to write off accumulated losses of over Rs6,978 crore at
the end of previous fiscal. The share premium account is
B777 planes an equity account on a company's balance sheet and the
Air India has tied up with UAE-based amount in the account represents the additional amount
First Abu Dhabi Bank as well as Stan- shareholders paid for their issued shares that was in ex-
dard Chartered Bank and Mashreq cess of the par value of those shares.
Bank to avail short-term loans for ac-
quiring three Boeing 777 aircraft, All 650 branches of IPPB to be launched by April:
Union minister Jayant Sinha said. Manoj Sinha

Two of the aircraft are to be used for The government expects to roll out all 650 branches of India
ferrying VVIPs, the minister of state for Post Payments Bank by April, 2018, Parliament was informed.
civil aviation said in a written reply in In a written reply to the Lok Sabha, minister of state for com-
the Lok Sabha. The delivery of the munication Manoj Sinha said IPPB has launched two pilot
three B777-300 ER planes is scheduled branches on 30 January 2017 at Raipur (Chhattisgarh) and
to be completed in next month -- two Ranchi (Jharkhand) in 2016-17. However, no branch was rolled
in January and one in February. out in the current financial year, Sinha said.

8 | 2018 | FEBRUARY | BANKING FINANCE

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