After inviting suggestions and objections from the public and stakeholders, RBI prepared and provided a scheme for the bank’s amalgamation for the Government’s sanction, well in. advance of end of the period of moratorium so that restrictions on withdrawal faced by the depositors are minimised. With the approval of the scheme, LVB will be amalgamated with DBIL from the appointed date, and with this there will no further restrictions on the depositors regarding withdrawal of their deposits.

DBIL is a banking company licenced by RBI and operating in India through wholly owned subsidiary model, DBIL has a strong balance-sheet, with strong capital support and it has the advantage of a strong parentage of DBS, a leading financial services group in Asia, with presence in 18 markets and headquartered and listed in Singapore. The combined balance-sheet of DBIL would remain healthy even after amalgamation and its branches would increase to 600.

The speedy amalgamation and resolution of the stress in LVB is in line with Government’s commitment to a clean banking system while protecting the interests of depositors and the public as well as the financial system.

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It said Banks’ asset quality will deteriorate across the corporate, small and medium enterprises and retail segments, leading to pressure on profitability and capital.

“We have changed the outlook for the Indian banking system to negative from stable. Disruptions to economic activity from the coronavirus outbreak will exacerbate a slowdown in India’s economic growth,” Moody’s said.

Stating that asset quality will deteriorate, Moody’s said a sharp decline in economic activity and a rise in unemployment will lead to a deterioration of household and corporate finances, which in turn will result in increases in delinquencies.

Growing solvency stress among non-bank financial institutions will increase risks to banks’ asset quality because banks have large exposures to the sector,” it added.

It expects deteriorating profitability and loan growth to hurt capitalisation.

“Increases in loan loss charges and declines in revenue will hurt banks’ profitability, which will lead to a deterioration of capitalization. If the government makes more capital infusions into PSBs, as it has in the past few years, it will mitigate capital pressure for them,” it added.

It said while funding and liquidity at public sector banks (PSBs) will be stable, growing risk aversion in the system following a default by a private sector bank (Yes Bank) will increase funding and liquidity pressure on small private sector lenders.

“Disruptions from the coronavirus outbreak will exacerbate India’s economic slowdown. A deterioration of global economic conditions and a 21-day lockdown imposed by the Indian government in an effort to slow the spread of coronavirus will weigh on domestic demand and private investment,” Moody’s added.

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The timing of this bank strike is symbolic as it coincides with the release of the Economic Survey in the Parliament today and the presentation of the Union Budget tomorrow.

While work at private sector banks like ICICI Bank and HDFC Bank would not be affected due to the strike, services at PSU banks were hit. The State Bank of India (SBI) had already warned that its services could be impacted to some extent. Around 10 lakh bank employees were expected to join the two-day protest.

Tamil Nadu, Maharashtra, Andhra Pradesh and Telangana, West Bengal, UP, MP, Delhi, Punjab, Gujarat, Karnataka, Kerala, Bihar, etc. banking transactions have been greatly affected

Bank unions vs bank management

Bank employees under the umbrella of United Forum of Bank Unions (UFBU) and representatives of bank management (Indian Bank’s Association or IBA) had a last minute meeting yesterday on wage settlement issues, pending since November 2017. IBA said it has increased the pay hike offer of 12.25% to 19% including performance linked incentive. The bank unions have refused to budge from their demands of a 20% pay hike on pay slip components with adequate loading thereof.

Bank unions are also demanding 5-day work week, merger of special allowance with basic pay, scrapping of new pension scheme, etc. IBA made it clear that the proposal of a 5-day banking is not possible. “It is known to all that the economy of the country is going through testing times. Banks being the principal players in economic development, cannot afford to provide lesser number of working days for banking activities,” IBA said in a statement.

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The body of Raju Gyandare Talware, 35, which was found clothed in a BJP t-shirt with the caption “punha aaluya aaple sarkar (bring our government back to power)”, was found hanging from a tree near his residence in Khatkhed village, which falls under the Jalgaon Assembly seat now held by BJP MLA Sanjay Kute.

Prime Minister Narendra Modi was in Jalgaon today to discuss an election rally and Chief Minister Devendra Fadnavis is scheduled to discuss three election rallies in Buldhana district ahead of Assembly polls on October 21.

“It is believed that Talware had run up debts. The truth will be known after a detailed probe. We have registered a case,” 

Farmer suicides have emerged as a key issue in the 2019 Assembly elections, with the ruling BJP-Shiv Sena alliance refusing to take responsibility for the 12,021 deaths, for reasons ranging from unpaid bank loans to crop failure

On Saturday Chief Minister Fadnavis blamed the opposition Congress-NCP alliance, targeting NCP chief  Sharad Pawar for the condition of the farmers.

“Farmer suicides are the sin of Sharad Pawar and his government in Maharashtra. It started and increased during your regime,” he declared, adding, “Pawar is talking about farmer suicides in his rallies in Vidarbha. I want to ask him, who was in power in Maharashtra when farmers started committing suicides”.

Congress leader Rahul Gandhi, also on the campaign trail in Maharashtra today, hit out at the state government from Latur district, highlighting the toll the economic slowdown had taken on farmers

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Start with the sudden default by financier Altico Capital India Ltd. on a Rs 19.97 crore($2.8-million) interest payment to Abu Dhabi-based Mashreqbank PSC. Clearwater Capital Partners-backed Altico, which borrows money from banks and mutual funds to make loans to property developers, called the situation a “liquidity crisis.” And that made Yes Bank investors gloomy.

Based on January data, the midsize Indian bank had a Rs 450 crore exposure to Altico, the third-highest after Mashreq and HDFC BankNSE -1.45 % Ltd. While HDFC Bank, the country’s most valuable lender, has the capital — and current profit — to take the occasional credit hit, Yes’s capital cushion is already frayed by dodgy loans to beleaguered shadow banks and troubled tycoons. Both these borrower groups have found it hard to refinance debt since the collapse last year of IL & FS Group, a large Indian infrastructure financier and operator. Altico’s unraveling shows that an end to credit woes is not yet in sight.

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