Senior investment analyst

Pallavi Deshpande

Equity Bottom-Up

<p>The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, <a href="https://www.smartkarma.com/entities/160" target="_blank" data-smartkarma-citation="entities:160:1">State Bank Of India's (SBIN IN)</a>(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…</p>

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of pain to the new private sector banks, however, State Bank Of India's (SBIN IN)(SBI) chose not to make similar disclosures and saved itself from the pain. We believe SBI was busy preparing for the merger and the clean-up of books took a back seat, with the above dispensation from the RBI being a quid-pro-quo for complying with its merger dictate. You can…

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

Specialist in Indian Banking and Economic Research

Hemindra Hazari

Thematic (Sector/Industry)

<h2>The 12 companies identified by the Reserve Bank of India’s Independent Advisory Committee for insolvency and bankruptcy proceedings are going to be a <a href="http://www.btvi.in/videos/watch/22855/12-big-defaulters-to-be-liquidated" target="_blank">critical test  </a>for Indian banks to resolve large corporate bad debt accounts under The Insolvency and Bankruptcy Code, 2016 (IBC), the law enacted by Parliament. These 12 companies identified as non-performing assets in the financial year ended March 31, 2016 (FY2016) account for 25% of the banking industry’s gross NPAs in FY2016. Although the bankruptcy proceedings entail a specified time bound process, past history of the Indian judiciary suggests a lengthy process where quick resolution remains a mirage. As these 12 companies are managed by influential promoters who have gamed the system in getting such largesse in loans the process would become more complex and investors should not be optimistic for an early resolution.</h2>

The 12 companies identified by the Reserve Bank of India’s Independent Advisory Committee for insolvency and bankruptcy proceedings are going to be a critical test  for Indian banks to resolve large corporate bad debt accounts under The Insolvency and Bankruptcy Code, 2016 (IBC), the law enacted by Parliament. These 12 companies identified as non-performing assets in the financial year ended March 31, 2016 (FY2016) account for 25% of the banking industry’s gross NPAs in FY2016. Although the bankruptcy proceedings entail a specified time bound process, past history of the Indian judiciary suggests a lengthy process where quick resolution remains a mirage. As these 12 companies are managed by influential promoters who have gamed the system in getting such largesse in loans the process would become more complex and investors should not be optimistic for an early resolution.

Resolution of 12 Large Corporate NPA Accounts May Take A Long Time

<p>Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.</p>

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.

U.P. Loan Waiver: 'Populist' or a Necessity?

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

<p>Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…</p>

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

<p>Ruling party BJP has won a landslide victory in the largest state of Uttar Pradesh (UP) thereby putting to rest any doubts over the adverse impact of demonetisation on the electoral prospects of the party. Performance in UP is impressive as the opposition had formed an alliance to fight Modi but still lost poorly.  Most political analysts have been caught on the wrong foot as they predicted a hung assembly while the results show that Modi wave seen during the General elections continues. We…</p>

Ruling party BJP has won a landslide victory in the largest state of Uttar Pradesh (UP) thereby putting to rest any doubts over the adverse impact of demonetisation on the electoral prospects of the party. Performance in UP is impressive as the opposition had formed an alliance to fight Modi but still lost poorly.  Most political analysts have been caught on the wrong foot as they predicted a hung assembly while the results show that Modi wave seen during the General elections continues. We…

Landslide Win for Modi in UP Elections;Upper House No.s to Cross 100 Mark by 2018, a +ve for Reforms

India

Union Bank of India Limited provides a full range of banking services throughout India. The Company's activities include retail banking, commercial and personal banking, investment management, treasury and NRI services, cash management and assorted ATM facilities. Union Bank has an online tele-banking facility for all its core banking customers.

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Union Bank Of India (UNBK IN)

SBI: Rises Above the Law as It Complies with RBI's Merger Dictate

The Reserve Bank of India's (RBI) recent circular requiring banks to disclose divergence in NPL classification and provisioning caused a lot of...

Pallavi Deshpande

Resolution of 12 Large Corporate NPA Accounts May Take A Long Time

The 12 companies identified by the Reserve Bank of India’s Independent Advisory Committee for insolvency and bankruptcy proceedings are going to be...

Hemindra Hazari

U.P. Loan Waiver: 'Populist' or a Necessity?

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the...

Hemindra Hazari

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this...

Asia Advisors

Landslide Win for Modi in UP Elections;Upper House No.s to Cross 100 Mark by 2018, a +ve for Reforms

Ruling party BJP has won a landslide victory in the largest state of Uttar Pradesh (UP) thereby putting to rest any doubts over the adverse impact...

Asia Advisors

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