Bank of Baroda becomes 2nd largest PSU, 3rd largest bank in India
Bank of Baroda (BoB) became the second largest public sector undertaking (PSU) bank after merging Dena Bank and Vijaya Bank into itself as part of the first three-way amalgamation.
BoB is now the third-largest bank after State Bank of India (SBI) and HDFC Bank.
Following the merger, the number of PSBs has come down to 18.
The consolidated bank will have over 9,500 branches, 13,400 ATMs, 85,000 employees to serve 12 crore customers.
The bank will have a business mix of Rs 15 lakh crore of balance sheet, with deposits and advances of Rs 8.75 lakh crore and Rs 6.25 lakh crore, respectively.
Post-amalgamation, the bank will have a 22 per cent market share in Gujarat and 8-10 per cent market share in Maharashtra, Karnataka, Rajasthan and Uttar Pradesh.
GST collections set new record in the month of March
The Finance Ministry said that GST collections have scaled to a record high of Rs.1,06,577 crore in March 2019. The revenue collection was Rs.97,247 crore in the month of February. The record revenue collection was attributed to increased compliance and an increase in the number of returns filed.
Total gross GST revenue collected in March 2019 stood at Rs.1,06,577 crore of which Central GST is Rs.20,353 crore, State GST is Rs 27,520 crore, Integrated GST is Rs.50,418 crore and cess is Rs.8,286 crore. The number of summary sales returns GSTR-3B filed for the month of February up to March 31 stood at 7.59 million. The monthly average of GST revenue during 2018-19 stood at Rs.98,114 crore which is 9.2% higher than the previous fiscal.
GST collections for 2018-19:
RBI sets limits for Ways and Means Advances
The Reserve Bank of India (RBI) in consultation with the government of India has set the limits for Ways and Means Advances (WMA) for the first half of the financial year 2019-20 (April 2019 to September 2019) at Rs.75000 crore.
Ways and Means Advances (WMA):
WMA is the temporary loan facility provided by the RBI to the Centre and State governments
The WMA scheme was introduced in 1997 to meet any temporary mismatches in the receipts and payments of the government
The WMA needs to be vacated after 90 days
The interest rate for WMA is currently charged at the repo rate that is, 6.25%
The limits for WMA are decided by the RBI and in consultation with the
Government of India
RBI's Policy rates and Reserve ratios: Bank Rate: 6.50%
RBI reduced repo rate for second consecutive time by 25 bps to 6 percent
The RBI cut its repo rate by 25 basis points to 6% in its first bi-monthly policy review of 2019-20.
The decision comes a week before the election starts on April 11.
The central bank had reduced the benchmark lending rate by 25 basis points in February after an 18-month gap.
The reverse repo rate, too, was lowered from 6% to 5.75%.
The bank rate was fixed at 6.25%.
What is Repo rate?
Repo rate refers to the rate at which commercial banks borrow money from the Reserve Bank of India (RBI) in case of shortage of funds.
Repo rate is short form of Repurchase Rate.
What is reverse repo rate?
The reverse repo rate is the rate at which the central bank borrows money from commercial banks, to control the money supply in the country.
Present Governor of RBI: Shaktikanta Das (from 12 December 2018).
IFINs GNPAs touched 90 percent says IL&FS
IL&FS Financial Services Ltd. (IFIN), the non-banking finance arm of infrastructure conglomerate IL&FS, reported an increased gross non-performing asset (NPA) ratio of 90% as at end December 2018 against the gross NPAs of 5% in March 2018.
The new management completed six months. It is unusual for any lender to report 90% gross NPAs and it is probably for the first time, in recent times, that a lender had reported such delinquency.
IFINs total exposure as on March 31, 2019 was Rs.18,805 crore, of which external exposure was Rs.10,656 crore and exposure to the group, Rs. 6,949 crore. About Rs.1,300 crore is categorised as other assets.
RBI made changes in NPA disclosure norms
The Bad loan divergence practice was mandated by RBI to improve the transparency in asset classification. Now RBI has brought changes to the bad loan divergence rule. The reason for this is that some banks, on account of low or negative net profit after tax were forced to disclose divergences even where the additional provisioning assessed by the RBI was small. This was contrary to the regulatory intent that only material divergences should be disclosed.
Changes brought in by the RBI in NPA Disclosure Norms:-
Banks are required to disclose divergence when the additional provisioning for NPAs assessed by RBI exceeds 10% of the reported profit before provisions and contingencies for the reference period, instead of the earlier rule of 15% of the published net profits after tax.
The norms on divergence on gross non-performing assets (NPAs) continues to be a material divergence of 15%has left unchanged.
Rupee plunged 76 paise to 69.17 against dollar
The rupee plunged 76 paise on 4th March to close at 69.17 against the U.S. dollar after the RBI cut the interest rate but kept its monetary policy stance neutral.
In its first bi-monthly policy review for this financial year, the central bank slashed the policy rate by 25 basis points for the second time in a row, following which the rupee and sovereign bond prices tumbled.
At the Interbank foreign exchange (forex) market, the rupee opened lower at 68.56 and fell further to touch the days low of 69.21. It finally settled at 69.17, down 76 paise over its previous close. The rupee had surged by 33 paise to 68.41 against the dollar on 3rd March.
Lakshmi Vilas Bank approves merger with Indiabulls Housing
The board of Lakshmi Vilas Bank approved a share swap acquisition by housing finance firm Indiabulls Housing Finance.
The merged entity, Indiabulls Lakshmi Vilas Bank, will be among the top eight private banks by size and profitability.
The merger will need the approval of the Reserve Bank of India and other regulators.
As per the share swap ratio for the merger, for every 100 shares of Lakshmi Vilas Bank shareholders will get 14 shares of Indiabulls Housing Finance.