Here is today’s important banking news to keep you updated and help you prepare for IBPS and other bank exams:

Important Banking News: Yes Bank Q3 Brings Cheer to Dalal Street

• Yes Bank brought some cheer to the Dalal Street on a day when banking stocks came under heavy selling as ICICI Bank reported sharp rise in bad loans.

• Yes Bank’s net profit in the December quarter jumped 25 per cent to Rs 676 crore against Rs 540 crore during the same quarter last year.
• Net interest income, the difference between interest earned over interest expended, came in at Rs 1,157 crore against Rs 909 crore year-on-year, Yes Bank said.
• India’s fifth-biggest private sector lender by assets said it expected full-year credit costs to be at the lower end of its guidance range.
• The private sector lender’s net interest margin – a key gauge of profitability – rose to 3.4 per cent in Q3 as compared to 3.2 per cent in the corresponding quarter last year.
• Though Yes Bank reported a slight deterioration in asset quality, its numbers looked mild when compared to ICICI Bank. Yes Bank’s gross non-performing assets, as a percentage of total advances, rose 0.66 per cent against 0.61 per cent in the previous quarter of current financial year.
• Gaurang Shah of Geojit BNP Paribas told NDTV Profit that Yes Bank and IndusInd Bank showed consistent growth trajectory.
• Shares of Yes Bank ended 11.2 per cent higher at Rs 746.80.

Important Banking News: Raghuram Rajan Bets for Greater Competition Among PSU Banks

• Favouring greater competition among banks, RBI Governor Raghuram Rajan on Friday said government should decentralise decision making in public sector banks (PSBs) after professionalising their boards.

• “More decisions need to be decentralised from the government to the PSB boards, once they have been fully professionalised,” he said while delivering C D Deshmukh Lecture here.
• “For instance, should boards not determine strategy as well as the appointment or renewal of their chief executive? What about their executive directors? Can bank boards have more freedom in choosing these?
• “Can boards be given the freedom to set compensation structures and performance measures for their senior executives, including long term stock options?” he said.
• Decentralisation in decision making will help boards more freedom to differentiate their banks.
• “If we want to address the concern that many public sector banks have identical strategies and are competing for the same pie, we have to allow the boards more freedom to differentiate their banks,” he said.
• Rajan also stressed that PSBs will require more professional boards that can chart a differentiated strategy for them.”The Bank Board Bureau, which will select board members, will come into operation soon. We have to pay board members of PSBs market compensation if we are to attract decent talent – otherwise we risk attracting an unwieldy mix of the truly patriotic and the truly unscrupulous, with the latter intending to profit by their board position,” he said.
• He questioned the fact that when a bad decision by the board could result in loss of thousands of crores then is it not legitimate to ensure talent on the board.
• “When thousands of crores can be diverted by a bad board decision, should we not ensure we have adequate integrity and talent on bank boards?,” he said.
• Rajan said that competition will help in sustained growth and foster financial inclusion.
• “In order to get sustained growth, we need more competition, especially from new entrants who are in a better position to reach hitherto excluded parts of our economy,” he said.
• After over a decade of no new entry, he said, the country has seen two new private banks enter last year, and a number of payment banks and small finance banks will enter this year. “We will put licensing for universal banks on tap soon,” he said.
• Incumbents have expressed fears about unfair competition. Competition is only unfair if it is not on the same playing field, he said.