Reserve Bank of India Governor Raghuram Rajan has been named as "Global and Asia-Pacific Central Bank Governor of the Year 2015" by 'The Banker' - a prestigious monthly magazine of the Financial Times Group. Mr Rajan has earlier been named central bank governor of the year several times by other international magazines. In 2014, Euromoney and in January 2015, Central Banking awarded him the best central banker award for his contribution in stabilizing the Indian economy. Rajan took over as RBI Governor in September 2013 and on August 28 that year, the rupee hit a record low of 68.87 a dollar. Through a series of innovative measures, including attracting dollars from non-resident Indians by offering higher interest rate on deposits, Rajan stabilised the rupee. The stability in the currency not only assures foreign investors, vital for bridging nation's current account deficit, but also helps companies plan better for future.


It is indigestible to say that banks are bleeding for uncontrollable non performing assets and low profitability due to economic slow down. There are leaders under whose stewardship, banks have shown unprecedented growth and stability.Shikha Sharma, managing director and chief executive officer of Axis Bank, has been awarded "Banker of the Year, 2014-15" by Business Standard. The award has been bestowed considering the parameters such as asset and liability growth, efficiency ratios, asset quality and employee productivity. Aspects like financial inclusion, corporate governance standard, customer service and technology innovations were also taken into consideration. The bank's compounded annual net profit growth rate has been above 20% in three years ending 2014-15. Shikha Sharma took Charge of Axis Bank in April 2009, a month after Lehman crisis broke out. Hats off to Shikha Sharma.



Chennai Based Indian Overseas Bank (IOB) has decided to close down 10 regional offices in various states. This step will save around Rs 15 crore a year towards establishment cost. IOB had a net loss of Rs 550.80 crore for the quarter ended September 2015 against net loss of Rs 245.50 crore a year before. In October 2015, the Reserve Bank of India had put IOB under Prompt Corrective Action (PCA) after slippages in part of its ratios. The IOB's gross non-performing assets ratio was above 10 per cent. Branch expansion and hiring have been restricted till the regulator is satisfied with the improvement.

RBI, in its Financial Stability Report (FSR), assessed that under the base line scenario, gross non-performing assets (GNPA) ratio of scheduled commercial banks may rise to 5.4% by September 2016 from 5.1% in September 2015 but could subsequently improve to 5.2% by March 2017. However, if the macroeconomic conditions deteriorate, GNPA ratio could rise to around 6.9% by March 2017 under a sever stress scenario; and the GNPA ratio of public sector banks may touch 8% by that time. Bank-wise estimates of unexpected losses and expected shortfall show that 19 banks were unable to meet their expected losses with their existing provisioning. However, five banks were expected to have higher unexpected losses than their total capital.
The present position of banks is alarming but not irreversible. How so ever grim may be the situation, we have got leaders among us, who can turn the things around.  What is required is to remember:-

Challenges are high

The dreams are new

The world out there is waiting for you

Dare to Dream

Dare to Try

No goal is too Distant

No Star is too High


Indian banks have weathered the storm of 2008 financial crisis, this time also they will brave this tornado. It is nature's law that what was in the past will become the future in some other form.  As was written by Herman Hesse in the Nobel Prize winning book Siddhartha, "What goes away from you, comes back to you...."

 (The views expressed in the article are merely for academic purpose and are not subscribed by the organisation where the author is working)

Tilak Gulati,  Assistant General Manager, UCO Bank. 

Author: www.itstrgulati.blogspot.in