In Charts: Three Trends That Show The Future Of Indian Banking
Banking reforms continue to make progress, according to the Reserve Bank of India’s Trend and Progress of Indian Banking Report.
Banks made significant recoveries through resolution mechanism over the previous financial year, the report said. While the revised insolvency and bankruptcy code was the focal point for banks for resolution of stressed assets, sale of assets to asset reconstruction companies and other financial institutions was significantly high, it said.
Here’s What The Report Also Says
- Rise in acquisition cost for asset reconstruction companies as a proportion of the book value of assets indicates better realisation by banks on sale of stressed assets.
- While private banks continue to remain aggressive on asset sales, public banks lag largely on account of large haircuts and various management issues.
- In the first half of the current financial year, sale of stressed assets to ARCs by both state-run and private banks has witnessed deceleration.
- The spike in recoveries and resolutions in the last financial year may have been because of the evolution of the new bankruptcy law and individual efforts of banks.
- During 2017-18, 91.5 crore transactions worth over Rs 1 lakh crore rupees occurred through the Unified Payments Interface.
- In the first half of the current financial year, transaction volume rose to 157.9 crore, or nearly Rs 2.67 lakh crore.
- Growth of pre-paid payment instruments decelerated in terms of volume and value after a spurt induced by demonetisation in 2016-17.
- Stringent know-your-customer norms, limits on fund transfers and caps on the amount held in wallets to curb frauds and money laundering further hit growth.