Banking for Beginners

Most of the PSBs have registered either slippage in profits or losses for the quarter ended 31st December 2015. While SBI, PNB and Canara Bank have managed to declare profits, although greatly reduced as compared to December 2014 quarter, 11 PSBs have declared losses. BOB with a loss of Rs 3,342 crores tops the list, which incidentally also marks the biggest ever quarterly loss declared by any Bank in Indian History. BOB is followed by IDBI Bank (Rs 2,184 cr), BOI ( Rs 1,505 cr),UCO Bank (Rs 1,497 cr), IOB (Rs 1,425 cr), Central bank (Rs 837 cr), Dena Bnak (Rs 663 cr) , Allahabad Bank (Rs 486 cr), OBC (Rs 425 cr), Corporation Bank (Rs 383 cr) and Syndicate Bank (Rs 120 cr). Only two Banks namely Bank of Maharshtra and Vijaya Bank have regstered a rise in profits vis-a-vis comparable quarter. The main issue to understand here, is that these losses are not due to write offs of bad or unrecoverable loans, but due to additional provision for sticky loans. As RBI Governor Raghuram Rajan ha...

The Government is in a dilemma right now. Whether to rein in the fiscal deficit at the projected levels of 3.9 % for FY 2016 and then bring it down to 3.5 % in FY 2017, or to go for increased public spending which may spur economic growth but which may also drain out Government revenues thus affecting fiscal deficit targets. Another cause of concern is the payout expected from OROP and seventh pay commission. While the Reserve Bank has advised against tinkering with fiscal deficit targets to drive growth, there is a large section of economists who are for pushing economic growth through large infra spends, even though it may mean slippage in fiscal deficit. Government has made a concerted attempt in the last few months to mop up resources through increase in excise duties on petroleum products, thus effectively denying benefits of crude price slump to the consumer. But this has been greatly offset by poor performance on the divestment front. All in all, its a tough call for FM Arun Ja...