Page 6 - BANKING FINANCE JULY 2016
P. 6
BANK UPDATE
Syndicate Bank launches State-run banks show fall in advance tax payments
instant a/c opening facil-
ity in Bengaluru The impact of NPA recognition has hit Income Tax and head of the
tax payments by state-run lenders in Mumbai zone of the Income Tax de-
Syndicate Bank has launched an 'In- the financial capital, but the
stant account opening' facility in steel and pharma sector partment D S Saksena said.
Bengaluru. The launch saw five cus- companies have posted
tomers open instant accounts. handsome increase for the "However, we do hope that
June quarter advance tax the collections would be
"The main objective of the rede- outgo. better in the forthcoming
signed process is to enhance cus- quarters," he added. Spe-
tomer experience by reducing the "Public sector banks have not done cific figures for bank-wise
number of visits as well as the time well this time. But other sectors like payments were not immediately avail-
taken for the account opening pro- steel and pharma have done compara- able. A company pays 15 per cent of
cess," said Arun Shrivastava, MD and tively better in the quarter ending June its yearly liabilities in the June quarter.
CEO. Customers opting for an instant 15," principal chief commissioner of It is seen as a barometer for perfor-
account will be provided with a wel- mance.
come kit comprising debit card,
cheque book, and information on Bankruptcy Code of limited use for current asset woes:
Internet/mobile banking activation.
Moody's
Govt. tell banks to even
out Agri-loan distribution Pointing to the limited legal infrastruc- ors for the resolution of distressed as-
ture at hand, rating agency sets.
The government wants public sector Moody's has said banks in
banks to push India may get limited help "The current weak legal
the envelope from the new Bankruptcy framework for asset resolu-
beyond just Code to solve current asset tion has been a key struc-
meeting lend- quality woes. tural credit weakness for In-
ing targets for dian banks," said Srikanth Vadlamani,
the agriculture Moody's said in press statement the a Moody's vice-president and senior
sector. Agriculture is a priority sector bankruptcy law was credit positive for credit officer.
and Indian banks are mandated to Indian banks, but challenges remained.
disburse 18% of their total advances India's new Bankruptcy Code would The proposed new rules address sev-
to the sector. significantly boost the bargaining eral key inefficiencies in the current
power of creditors against large debt- resolution regime, the rating agency
While banks have managed to meet said.
the targets every year, several re-
gions have not received adequate SBI to merge with itself 5 of its subsidiaries plus BMB
loans. "There have been certain is-
sues on the distribution of The State Bank of India, the country's largest bank, has started the process of
loans…there have been complaints merging five of its subsidiaries with itself and also
from certain quarters that loans with another state-owned bank, the Bharatiya
were not given to them Mahila Bank (BMB), signaling the start of a con-
(farmers)..this has been raised," said solidation in the local banking industry.
a finance ministry official.
The SBI central board passed a resolution to re-
"After two draughts and an increase quest the Finance Ministry's permission to start
in the agri-loan target, it is critical for negotiating merger of its five subsidiaries and the BMB.
banks to ensure timely repayment,"
said Soumya Kanti Ghosh, Chief The five subsidiaries of SBI which have been proposed to be merged are State
Economist, SBI. Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of
Patiala (SBP), State Bank of Travancore (SBT), and State Bank of Hyderabad
(SBH). If the merger goes through, the balance sheet size of the consolidated
bank will be around Rs 37 lakh crore from the current Rs 28 lakh crore.
6 | 2016 | JULY | BANKING FINANCE
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