Banks in focus: Gyan Sangam 2.0 kicks off today
DSIJ Intelligence / 04 Mar 2016
Gyan Sangam, the annual conclave will see bankers and top officials from the finance ministry and RBI come together to take stock of the developments in the banking sector against the backdrop of the government's strategy to favour consolidation among public sector banks and brainstorm on the issues that swamp down stakeholders at various fronts.
Gyan Sangam, the annual conclave will see bankers and top officials from the finance ministry and RBI come together to take stock of the developments in the banking sector against the backdrop of the government's strategy to favour consolidation among public sector banks and brainstorm on the issues that swamp down stakeholders at various fronts.
Gyan Sangam holds importance in the backdrop of one of the worst Q3 results posted by all the major PSU Banks. It's almost a quarter since 12 Public Sector banks reported losses; the stock of bad loans across listed banks jumped by more than Rs.1 trillion in a single quarter; and capital positions of these public sector lenders got eroded.
After the first Gyan Sangam held in Pune, the government had announced a seven-point reforms roadmap, Indradhanush, detailing the measures it would take to revamp public sector banks.
Earlier in the week, Finance Minister Arun Jaitley, in the Budget 2016-17, said the government will unveil a road map for consolidation in Public Sector Banks (PSBs). The two-day conference, to be attended by Jaitley, Minister of State for Finance Jayant Sinha, RBI Governor Raghuram Rajan, Financial Services Secretary Anjuly Chib Duggal and other senior finance ministry officials, will see discussions on mergers and acquisitions (M&As) in the banking sector, sources said.
Banking sector is grappling with rising Non-Performing Assets (NPAs), which are expected to rise further in coming quarters due to RBI directives to declare bad loans. Gross NPAs of public sector banks stand at Rs 3.60 lakh crore at December-end, up from Rs 2.67 lakh crore at the end of March 2015.
In the recently concluded Q3, many PSBs, including Bank of Baroda, Bank of India and IDBI Bank, reported their highest ever quarterly losses aggregating over Rs 12,000 crore, while others like SBI and PNB saw a sharp erosion in profits.
In this edition of Gyan Sangam, various decisions taken during the previous edition will be reviewed, along with the financial performance of banks and financial institutions. It is widely expected that something on banks' mergers and consolidations is expected to come out given the pain being felt by all the state run lenders.
CNX PSU Bank Index was trading with minor gains due to expectations of some positive news. It was up by 0.50 per cent in early trade.
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