The Finance Minister wants to know from the lenders whether there is a need for policy intervention regarding any banking crisis.
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Global Banking Crisis: Finance Minister Nirmala Sitharaman has called a special meeting today to meet the government bankers who give loans to customers, so that their opinion can be taken on the global level concerns on the weaknesses of the banking system due to financial crisis. According to sources, in this meeting, the Finance Minister will also assess the performance of Public Sector Banks (PSBs) as their financial requirements, if any, apart from FY23, which is drawing near. Although experts have ruled out any impact given the strong balance sheets of domestic banks,
The Finance Minister wants to know from the lenders whether there is a need for policy intervention regarding any banking crisis. In this meeting, the government is already in touch with the regulators of the financial sector. One person said that any local effect has been ruled out with the key parameters of the banks. The government wants to make a thorough assessment to take steps in advance if needed.
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The finance ministry has already asked all public sector banks to prepare a strategic roadmap for three years starting from FY24. The government may also approve next-generation reforms in public sector banks under the Ease 6.0 program in the first week of April. The collapse of two regional banks in the US – Silicon Valley Bank and Signature Bank – and the forced merger of Credit Suisse Group AG with rival UBS Group AG has sparked fears of a domino effect on the global banking sector.
The US government is insisting on saving this bank
The rapid rise in interest rates in the US and Europe has imposed large mark-to-market losses on banks holding long-maturity loans. As happened in the case of Silicon Valley Bank. Worried depositors pulled out funds, leading to more failures. The US administration is pushing to rescue First Republic Bank, which has lost nearly 40% of its deposits.
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Indian lenders pass this test
According to sources, the gross non-performing assets (NPAs) of all scheduled commercial banks are expected to fall from 11.2% at the end of March 2018 to 5.8% of gross advances at the end of March 2022. All public sector banks are in profit. The gross profit in FY22 was Rs 66,543 crore and has increased to Rs 70,167 crore in the first nine months of the current financial year. The capital adequacy ratio of public sector banks increased from 11.5% in March 2015 to 14.5% in December 2022. Also, Indian lenders have passed the central bank’s stress tests.
Source: www.tv9hindi.com
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