Here is today’s important banking news to keep you updated and help you prepare for IBPS and other bank exams:
Important Banking News: Indian Overseas Bank to Shut 10 Regional Offices
- Indian Overseas Bank (IOB) on Monday said it will rationalise the number of its regional offices by closing 10 such offices to improve efficiency.
- “Our Bank at its meeting held in 12.12.2015 decided to rationalise the number of regional offices in the country by reducing 10 regional offices from existing 59. The estimated date of closure is 1.3.2016,” the public sector lender said in a clarification to the BSE.
- “The closure of regional offices is for optimum utilisation of resources and is administrative decision within the bank… it will result in substantial reduction in administrative costs,” it further said.
- Indian Overseas Bank said it has 59 regional offices and 7 zonal offices, which provide support and guidance to branches, that are undertaking business activities and are required to monitor the performance pf branches.
- The RBI specified certain regulatory trigger points, as a part of prompt corrective action (PCA) framework, in terms of three parameters – capital to risk weighted assets ratio (CRAR), net NPAs (non-performing assets) and return on assets (RoA) – for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.
- Gross NPAs of the bank rose to 9.40 per cent for the quarter ended June 30. IOB’s gross non-performing assets rose to 8.30 per cent at the end of March 31, from 4.84 per cent a year ago, according to provisional RBI data taking into account domestic operations of banks.
- At 1:12 p.m., shares in Indian Overseas Bank were trading 0.84 per cent lower at Rs 29.35 apiece on the BSE, whose benchmark Sensex index was down 0.68 per cent.
Important Banking News: Urjit Patel Reappointed as RBI Deputy Governor by Government
- The government reappointed Urjit Patel, who helped transform the way the country’s monetary policy is set, as a Reserve Bank of India (RBI) Deputy Governor, signalling confidence in its management strategy.
- The new mandate, for a three-year term, had been expected and marks a vote of confidence in Governor Raghuram Rajan’s efforts to overhaul how the RBI sets interest rates.
- Mr Patel has run the monetary policy department since 2013 as one of the RBI’s four deputy governors.
- His reappointment also raises investors’ hopes that Mr Rajan will also be offered an extension of his own when his tenure ends in September.
- Mr Patel’s three-year tenure was due to end next week. He will be reappointed with effect from January 11, the RBI said in a statement late on Friday.
- Considered a close lieutenant to Mr Rajan, Mr Patel headed the committee that introduced landmark changes including a switch to inflation targeting and adopting consumer prices as the new barometer rather than wholesale prices.
- Mr Rajan, an academic and former chief economist at the International Monetary Fund (IMF), is considered one of the most influential governors in the RBI’s 81-year old history, building a significant profile abroad as a voice for emerging markets.
- He was appointed by the previous UPA government, but has established a good working relationship with Prime Minister Narendra Modi’s administration, despite occasional disagreements over policy and the shape of some reforms.
- Although the changes to monetary policy have been mostly well received, the RBI has come under criticism from market participants over its management of money markets, a division that is also part of Mr Patel’s remit.
- Most prominently, traders and bankers have complained the RBI has kept cash conditions in the financial system too tight, and not injected enough funds via bond purchases.
- “Now that he has got reappointed, it means the RBI will continue to be inefficient in the management of liquidity and there is no one to correct this,” said a dealer at a foreign bank.