According to media reports, 10 public sector banks have been asked by the Ministry of Finance, Government of India, to cut cost, in order to get fresh capital infusion, which was promised by the Government under Indradhanush program.
The list of these banks include Uco Bank, United Bank, Allahabad Bank, Dena Bank, Indian Overseas Bank, Vijaya Bank, Central Bank of India, Bank of Maharashtra and IDBI Bank. The Government has set some specific cost cutting targets for these bank to cut cost by 25% within next three years.
[irp posts=”2245″ name=”Best Credit Card for Cash back and savings 2017″]
It is reported that employee unions of these banks have agreed to the conditions of Government and have already signed MOU with management.
Banks have been advised by the government to take measure to reduce cost, which inter-alia includes:
[irp posts=”2147″ name=”DA for Bank Employees from May 2017″]
Specific targets have been set for turnaround of these week banks:
These banks have been advised to focus more on retail loans and loans below Rs.5 Crores, since NPA percentage is very high in corporate loans.
These banks are struggling with mounting level of NPAs and reporting losses due to huge provisions, which is resulted into requirement of fresh capital in order to meet the regulatory requirements of maintaining minimum capital (Basel norms).
[irp posts=”2170″ name=”Impact of demonetization on banks”]
Uco Bank’s gross NPAs are at 17.18% (Dec 16) and reported loss of Rs.437.09 crores for the quarter ending Dec 16.
United Bank of India’s gross NPAs are at 15.98% and reported loss of Rs.58.39 crores for the Dec 16 quarter
IOB’s gross NPAs are at 22.42% and reported loss of Rs.554.44 crores for the Dec 16 quarter
Central Bank of India’s gross NPAs are at 14.14% and reported loss of Rs.903.35 crores for the Dec 16 quarter.
Comment how this is going to affect the banks and employees of these banks.
As per AIBOC Circular dated 13.09.2023, the officers’ associations today, submitted a Supplementary Charter of…
Wage revision for bankers is due since November 2022, which is to be finalized through…
DA for Bankers is expected to increase for the quarter May 2023 to July 2023.…
If you're a banker, you know that staying up-to-date on industry trends and best practices…
DA for Bankers is increased for the quarter February 2023 to April 2023. CPI data…
12 Bipartite Settlement for revision of bank employees' salary and service conditions is due from…