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Poor performance by public sector banks, says RBI report

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Reserve Bank of India New Delhi. Photo: UNI

[vc_row][vc_column][vc_column_text]The private sector banks and foreign banks earned net profits, but the public sector banks incurred a loss of Rs 180 billion

Parsa Venkateshwar Rao Jr[/vc_column_text][vc_column_text]The growth in the banking sector for 2015-16—according to RBI’s “Report on the Trend and Progress of Banking in India 2015-16”—fell to 7.7 per cent in 2015-16, from 9.7 per cent in 2014-15.

As the banks, especially the public sector ones, had to provide for the “delinquent loans”, the credit and advances, which is an indirect marker of economic activity, fell to a dismal 2.1 per cent in 2015-16 from 7.4 per cent in 2014-15.

Interestingly, the Current Account and Savings Account (CASA) deposits with private sector banks as well as foreign banks grew better than those with the public sector banks.  The growth of CASA deposits with private sector banks jumped to an impressive three per cent—from over 16 per cent to over 19 per cent.

While the Credit-Deposit (C-D) ratio of the banking sector as a whole remained static at 78 per cent, the C-D ratio of the private sector banks stood at 90.3 per cent.

The banking sector on the whole showed declining earnings on interest and non-interest incomes. It was mainly due to slowdown in the growth of credit. Though the sector is not in the red, profits fell by 60 per cent. The private sector banks and foreign banks earned net profits, but the public sector banks incurred a loss of Rs 180 billion, and net losses amounting to 148 per cent.

But the priority sector lending—which includes weaker sections, small and medium enterprises, agriculture and housing— showed a marked improvement, increasing from 9.3 per cent in 2014-15 to 16 per cent in 2015-16. The target for the priority sector lending was 40 per cent. The public sector banks achieved 39.3 per cent, private sector banks logged 45.1 per cent and foreign banks showed 35.3 per cent.

The recovery of non-performing assets (NPAs) for all the banks fell from Rs 307.92 billion in 2014-15 to Rs 227.68 billion in 2015-16. The public sector banks could recover only Rs 1,897.57 billon in 2015-16, compared to Rs 278.49 billion the previous year.

The report notes that recovery was better through the Lok Adalats and Debt Recovery Tribunals (DRTs) than through the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) channel. The recovery through SARFAESI reduced from Rs 256 billion in 2014-15 to Rs 131.79 billion in 2015-16.

Despite a slowdown in credit growth, the loan portfolio reveals an interesting profile. Loans in the housing sector accounted for 52 per cent, up by 16.4 per cent over the previous year, followed by personal loans, 29.8 per cent, which include educational loans, while auto loans stood at 11.1 per cent.

Meanwhile, the credit sensitive sectors, including capital and real estate, accounted for 20 per cent of the loans. Foreign banks lent 27.7 per cent, which is more than private banks, which stood at 26.3 per cent. The public sector banks loans in this sector were the lowest, at 16.9 per cent. An overwhelming chunk of the loans, 92.5 per cent, in this segment went to the real estate.

The ownership pattern of the banks shows that while the government maintains a majority stake in the public sector banks, 51 per cent, the non-resident shareholding in the PSBs, 11.9 per cent, contrasted with 72.7 per cent in the private sector banks.

Lead Picture: Reserve Bank of India New Delhi. Photo: UNI[/vc_column_text][/vc_column][/vc_row]

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MK Stalin predicts frequent PM Modi visits to Tamil Nadu before assembly election

MK Stalin has said Prime Minister Narendra Modi will visit Tamil Nadu more often ahead of the Assembly election, calling the tours politically motivated and questioning the Centre’s support to the state.

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MK Stalin

Tamil Nadu Chief Minister M. K. Stalin has predicted that Prime Minister Narendra Modi will increase his visits to the state as the Assembly election, expected in April or May, draws closer.

Speaking ahead of the polls, the DMK president said the Prime Minister has already begun touring Tamil Nadu and is likely to visit frequently in the coming months. He claimed that such visits could create discomfort within the BJP-led National Democratic Alliance (NDA), as alliance partners may fear the political impact of repeated appearances.

Stalin calls visit politically motivated

The Chief Minister described the Prime Minister’s scheduled programmes in the state as “politically motivated”. PM Modi is set to attend various events in Madurai in southern Tamil Nadu, including the inauguration of the first phase of the AIIMS hospital project. He is also expected to visit the Thiruparankundram Temple amid the Karthigai Deepam-related controversy and participate in a public meeting organised by the NDA.

Stalin said he has been working for all sections of the population, including those who did not vote for his party. In contrast, he remarked that some leaders are visible in the state only during election time and increase their visits as polls approach.

Criticism over Union Budget allocations

The DMK leader also criticised the BJP-led central government, accusing it of neglecting Tamil Nadu. He pointed out that while approval was recently granted for the Gujarat Metro project, there were no major announcements or allocations for Tamil Nadu in the Union Budget.

Stalin asserted that voters would remember the lack of significant measures for the state. He framed the upcoming election as a contest between Tamil Nadu and the NDA, stating that the state should be governed from Fort St George in Chennai rather than from Delhi.

The ruling DMK is currently allied with several smaller parties and, at present, the Congress, as it seeks a third consecutive term in office. Its principal rival, the AIADMK, is aligned with the BJP as part of the NDA.

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Shashi Tharoor questions Centre over Kerala name change to Keralam

Shashi Tharoor has criticised the Centre’s decision to approve renaming Kerala as Keralam, questioning its impact and pointing to the lack of major projects for the state.

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shashi tharoor

Congress MP Shashi Tharoor has criticised the central government over its decision to approve the renaming of Kerala as ‘Keralam’, arguing that the move prioritises symbolism over development.

Reacting to the Union Cabinet’s approval, Tharoor said that the state’s name has always been ‘Keralam’ in Malayalam and questioned the practical impact of introducing the Malayalam term into English usage.

“It has already been ‘Keralam’ in Malayalam. So now, a Malayalam word is coming into English. I don’t know what difference it makes,” he said, adding that the state has not received major projects such as an AIIMS or new institutions from the Centre. He also pointed out that no significant allocations were made for Kerala in the Union Budget.

In a separate post on X, Tharoor raised what he described as a “small linguistic question” about what residents of the state would be called if the name change is implemented. Referring to existing terms such as “Keralite” and “Keralan”, he remarked that alternatives like “Keralamite” sounded like a microbe and “Keralamian” like a rare earth mineral.

The Union Cabinet, chaired by Prime Minister Narendra Modi, cleared the proposal on Tuesday. The move comes ahead of the upcoming state Assembly elections, in which 140 members of the legislative assembly are to be elected. The poll schedule is yet to be announced by the Election Commission of India.

The state assembly had earlier passed a resolution seeking the change in official records. Chief Minister Pinarayi Vijayan had moved the resolution in 2024, urging the Union government to adopt the name ‘Keralam’ in all languages listed in the Eighth Schedule of the Constitution.

He had stated that the demand for a united Kerala for Malayalam-speaking people dates back to the national freedom movement.

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Tamil Nadu potboiler: Now, Sasikala to launch new party ahead of election

Sasikala has announced the launch of a new political party ahead of the Tamil Nadu Assembly elections, positioning herself against AIADMK chief Edappadi K Palaniswami.

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In a significant political development ahead of the Tamil Nadu Assembly elections, expelled AIADMK leader V. K. Sasikala has announced that she will float a new political party and contest the polls by fielding her own candidates.

Speaking in Madurai before heading to Pasumpon for a public event, Sasikala said she would unveil her party’s flag later in the evening. She indicated that more details regarding the party’s structure and plans would be shared at the gathering.

The event venue carries political symbolism. Pasumpon is the birthplace of Thevar leader Muthuramalinga Thevar, and Sasikala herself belongs to the influential Thevar community in southern Tamil Nadu. The programme was held as part of birth anniversary events of former Chief Minister J. Jayalalithaa.

Direct challenge to EPS

Sasikala’s move is being viewed as a direct political challenge to AIADMK general secretary Edappadi K. Palaniswami (EPS). After Jayalalithaa’s death in 2016, Sasikala briefly took control of the party and had appointed Palaniswami as Chief Minister. However, following her conviction in the disproportionate assets case, she served a four-year prison term, and during that period, she was expelled from the party.

Palaniswami later aligned with O. Panneerselvam, whom Sasikala had earlier removed from the Chief Minister’s post. The two leaders subsequently adopted a dual leadership arrangement within the party and government.

Sasikala remains disqualified from contesting elections until 2027 due to her conviction. Nevertheless, she has stated that she intends to field candidates under her new party banner.

Fragmented Thevar vote base

Over the years, expulsions within the AIADMK — including Sasikala, her nephew TTV Dhinakaran and O Panneerselvam — have led to divisions within the Thevar support base. Political observers have linked this fragmentation to the party’s weakened electoral performance in the elections following Jayalalithaa’s passing.

While Dhinakaran has returned to the NDA fold, reports suggest Palaniswami is opposed to any arrangement that includes Sasikala or Panneerselvam. OPS, meanwhile, has exited the NDA.

Sasikala has repeatedly criticised Palaniswami, describing him as a betrayer, while he maintains that his leadership stems from the support of AIADMK legislators rather than her backing.

The AIADMK has not issued an official statement on Sasikala’s announcement. However, a senior party leader questioned her political standing, pointing out her disqualification from contesting elections and referring to legal issues linked to Jayalalithaa’s death.

With the Assembly polls approaching, Sasikala’s re-entry into active politics could further complicate the opposition space in Tamil Nadu and influence electoral calculations, particularly in the southern districts.

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