Page 7 - BANKING FINANCE JULY 2016

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BANK UPDATE

Banks to rely on forensic audit for stressed projects: RBI ECGC net rises 53% to Rs.
276 cr in FY 16
The Reserve Bank of India (RBI) might company under strategic debt restruc-
ask banks to use forensic audit to turing (SDR). Banks take ECGC reported a 53 per cent jump in
pick up projects that need to be over the management con- net profit at Rs.
restructured and let the origi- trol of companies by con- 276 crore in the
nal management of the com- verting the debt into equity. financial year
pany run the show instead of ended March 31,
the lenders taking over. While lenders have indeed 2016 as against
invoked SDR in a couple of cases, they Rs. 180 crore in the year-ago period.
Under the existing norms, if banks fail are stuck with the assets as they could
to nurse back a company to health not find new management for the The profits are up despite the Corpo-
through various restructuring exercise, companies; the banks themselves are ration paying higher claims of Rs.
the lenders finally take control of the clueless on how to run these firms. 1,122 crore to banks and exporters
and setting aside more as claim pro-
Islamic Development Bank to set up office in Gujarat vision (Rs. 1,249 crore in FY2016 vs
Rs. 897 crore in FY2015).
The Jeddah-based Islamic Develop- for the Development of the Private
ment Bank (IDB) is in the final stages Sector (ICD), a private-sector arm of Geetha Muralidhar, Chairman-cum-
of setting up shop in Prime Managing Director, said ECGC plans
Minister Narendra Modi's the lDB group, as part of to increase its cover for India's ex-
home state, a move that deals signed during Modi's ports from the current 8 per cent of
will usher Islamic finance for trip to Saudi Arabia in April. total exports to 12 per cent over the
home-grown startups and next four to five years.
fund Indian exports to many The IDB, a multilateral
African and central Asian Muslim na- lender with an authorised Regional languages train-
tions. capital of $100 billion, counts 56 Mus- ing by Bank of Baroda
lim nations as its members. Most of
The developments follow an agree- these countries belong to the Bank of Baroda has taken a unique ini-
ment between India's state-owned Organisation of Islamic Cooperation. tiative by launching a training
Exim Bank and the Islamic Corporation Its India operations will be led by Zafar
Sareshwala. programme of re-
gional languages
Number of public sector banks to come down to 8-10 for its staff mem-
from 27 bers in order to de-
liver satisfactory
Minister of State for Finance Jayant Sinha said that the number of PSU banks customer service and easy communi-
will come down dramatically from 27 to around 8- cation with their customers in their
10. Addressing a gathering, which included entrepre- mother tongue. Now, Bank of Baroda
neurs, at an iSpirt conference, he said that we will is giving local language training in
have maybe 8 or 10 very competitive banks. non-hindi linguistic areas to its staff
members, who don't know the local
He added that the government is doing things necessary to ensure that PSU banks language of that particular area.
are vibrant competitors. "We are now in the third phase of the reform process
where we have gone through the governance and management reforms, and we Bank of Baroda is the first public sec-
have gone through the asset quality review and the stress testing. Now, we are tor bank in country which has taken
in the consolidation phase where we are trying to ensure that at the end of this such unique initiative of local lan-
consolidation you will have a set of very competitive banks," he said. guage training to employees in bank-
ing sector. Mrs. Vindhya J. Ramesh,
Banks begin fresh valuation process of Kingfisher House General Manager (HRM) inaugu-
rated the Marathi Training classes at
Having failed once to sell Kingfisher House for recovering their loans, banks have Bank's Corporate Office, Mumbai.
begun a fresh valuation process for auctioning the headquarters of liquor baron
Vijay Mallya's non-operational Kingfisher Airlines.

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