Banking on good faith: on efforts to recapitalise PSBs
More structural reforms are needed to maximise the bank recapitalisation effort
About ₹1 lakh crore is expected to be pumped into India’s 21 public sector banks by March, which the Centre hopes will enable them to extend fresh credit lines worth over ₹5 lakh crore to spur (प्रेरित करना) economic activity. Of the capital injection — the first half of an ambitious ₹2.11-lakh crore recapitalisation programme for ailing (मांदा) public sector banks announced last October — about ₹8,100 crore is from the government’s budgetary resources. Banks are expected to tap the markets for ₹10,300 crore, while recapitalisation bonds worth ₹80,000 crore are to be issued to finance the rest. Leaving aside the market-raising efforts by banks, over half the fresh capital of over ₹52,000 crore is being directed to the 11 public sector banks that the Reserve Bank of India has placed under the prompt corrective action, or PCA, framework. The RBI deploys the PCA to monitor the operation of weaker banks more closely to encourage them to conserve capital and avoid risks. For these entities (संस्था), this capital offers a fresh lease of life as it will help meet regulatory requirements under the Basel-III regime as well as cushion them to an extent from possible haircuts on stressed loans that are going through the insolvency (दिवालियापन) resolution process. State Bank of India, the country’s largest, and the nine others that are out of the RBI’s PCA net will receive nearly ₹36,000 crore in order to strengthen their lending capacity.
While announcing this package, the government has described each of the banks as “an article of faith”. Its assertion that no public sector bank will fail and that depositors’ money will remain safe should allay हलका करना) customers’ worry about the safety of their savings under the proposed Financial Resolution and Deposit Insurance legislation. Rating agencies have given the move the thumbs up, but remain unimpressed about governance reforms packaged with it. These include tweaks (झटक) to existing systems for closer monitoring of big-ticket loans, identifying niche (मौका) areas where a bank has strengths, restricting corporate exposure to 25%, and a new performance management system. Actual capital inflows will depend on their performance on these fronts and their ability to meet the government’s service priorities, including smoother credit flows to small businesses. More structural reforms may well be on the anvil (अहरन) in the second half of this recap plan, which RBI Governor Urjit Patel had described as providing a real chance to meet the banking sector’s challenges for the first time in a decade. Yet, the absence of any reference to consolidation (एकीकरण) through mergers is glaring (प्रत्यक्ष). Moreover, while the government has repeatedly ruled out privatisation of these banks, the only one where it intended to offload its majority stake, IDBI Bank, has got the largest allocation of ₹10,610 crore. At best, this sends out mixed signals.
- Spur: A thing that prompts or encourages someone; an incentive.
Synonyms: stimulus, incentive, encouragement, stimulant, stimulation, inducement, impetus, prod, prompt
Antonyms: counterincentive, disincentive
- Ailing: In poor health.
Synonyms: ill, unwell, not well, sick, sickly, poorly, weak, indisposed, in bad health, in poor health, infirm, debilitated, delicate, off colour
Antonyms: healthy, well, able-bodied, fit, hale, hearty, sound, well-conditioned, whole, wholesome
- Entities: A thing with distinct and independent existence.
Synonyms: organization, institution, establishment, body, operation
- Insolvency: the inability to pay one’s debts
Synonyms: bankruptcy, failure, ruin
- Allay: Diminish or put at rest (fear, suspicion, or worry)
Synonyms: reduce, diminish, decrease, lessen, assuage, alleviate, ease, relieve, soothe, soften, take the edge off, dull, cushion, mollify, moderate, calm, lull, temper, mitigate, palliate, blunt, deaden, abate, tone down
Antonyms: adversary, enemy, foe, opponent, belittler, detractor
- Tweaks: Improve (a mechanism or system) by making fine adjustments to it.
Synonyms: adjust, make adjustments to, modify, alter, make alterations to, change, adapt
- Niche: a situation or activity for which a person or thing is best suited
Synonyms: groove, place, slot
- Anvil: The horizontally extended upper part of a cumulonimbus cloud. A heavy iron block with a flat top and concave sides, on which metal can be hammered and shaped.
Synonyms: mould, model, pattern, form, matrix
- Consolidation: The action or process of combining a number of things into a single more effective or coherent whole.
Synonyms: combination, combining, connecting, connection, union, coupling, junction, linking, merger, merging, unification
Antonyms: breakup, disconnection, dissolution, disunion, division, parting, partition, schism, scission, split
- Glaring: very noticeable especially for being incorrect or bad
Synonyms: blatant, conspicuous, flagrant, egregious, gross, obvious, patent, pronounced, rank, striking
Antonyms: imperceptible, inconspicuous, unnoticeable, unobtrusive, inconsequential, inconsiderable, insignificant, slight, small, trifling, trivial
Retail therapy: on the IPL 2018 auction
With the player auction, the eight IPL squads have taken shape with a few surprises
The Indian Premier League player auction is a parallel cricketing universe with a distinct dynamic. Over the weekend at a Bengaluru hotel, the IPL’s top brass congregated (एकत्रित होना) with a wish-list that had no space for nostalgia. Lasith Malinga found no takers while Chris Gayle, perhaps the most explosive batsman in the history of Twenty20, was rejected twice before he got third-time lucky when Kings XI Punjab snapped up the opener at his base price of ₹2 crore. There was no respect either for doughty (हिम्मती) batting performances in Tests. South Africa’s Hashim Amla, who played his part in the recent match at Johannesburg’s Wanderers, was ignored, and Cheteshwar Pujara found no suitors in the IPL. In Twenty20’s roller-coaster ride, the attributes of patience and grit (दृढ़ता), so mandatory in Tests, have comparatively little value. The accent (स्वरोच्चारण करना) is on explosive batting, miserly bowling, athletic fielding and, above all, the ability to remain iceberg-cool when the fires of a nerve-racking last over are raging (बहुत तीव्र). The all-rounder, cricket’s version of a miracle-dispenser, remains mighty expensive. It was no surprise when England’s Ben Stokes, despite the legal issues trailing him back home following an assault incident, got the highest bid at ₹12.5 crore from Rajasthan Royals.
Royals and Chennai Super Kings, both coming back after a two-year suspension following spot fixing and betting allegations, struck to their usual methods. Royals remained alert to building a strong core. CSK continued its patented approach of nurturing (विकसित करना) its nucleus, as was evident in the way it retained M.S. Dhoni, Suresh Raina and Ravindra Jadeja prior to the auction, and when auctioneer Richard Madley punched his gavel (भूमि का लगान), IPL’s most consistent outfit exercised its right-to-match card and snapped up another regular Dwayne Bravo. CSK was also aware of its cost dynamics and didn’t pursue R. Ashwin once he crossed the ₹4 crore mark but instead nailed Harbhajan Singh at ₹2 crore. True to its trope of bucking trends, the auction witnessed massive money chasing a left-arm fast bowler, and Jaydev Unadkat became the most expensive Indian with a ₹11.5 crore price tag from Royals. As in previous years, the latest auction gifted a bonanza to the unsung first-class cricketer. Krunal Pandya got ₹8.8 crore from Mumbai Indians, and he is yet to play for India unlike his famous sibling Hardik. Among the overseas players, it was heartening to see the price that Afghan players like Rashid Khan commanded, while Sandeep Lamichhane, picked by Delhi Daredevils, became the first Nepal cricketer to join the IPL bandwagon (लाभकारक हाल). The eight IPL squads have taken shape afresh and the players are laughing all the way to the bank. Whether that would translate into ideal performance will be known once the league’s eleventh edition starts in April.
- Congregated: Gather into a crowd or mass.
Synonyms: assemble, gather, collect, come together, flock together, get together, convene, rally, rendezvous, muster, meet, amass, crowd, cluster, throng, group
Antonyms: dispel, disperse, dissipate, scatter
- Doughty: feeling or displaying no fear by temperament
Synonyms: bold, courageous, dauntless, brave, fearless, gallant, greathearted, gutsy, gutty, heroic (also heroical), intrepid, lionhearted, manful, stalwart, stout, stouthearted, undauntable, undaunted, valiant, valorous
Antonyms: cowardly, craven, dastardly, fainthearted, fearful, gutless, lily-livered, milk-livered [archaic], nerveless, poltroon, poor-spirited, pusillanimous, spineless, spiritless, timorous, uncourageous, ungallant, unheroic, weakhearted, yellow
- Grit: the strength of mind that enables a person to endure pain or hardship
Synonyms: backbone, constancy, fiber, fortitude, grittiness, guts, intestinal fortitude, pluck, spunk
Antonyms: spinelessness, cowardice, cowardliness, cravenness, dastardliness, faintheartedness, pusillanimity, timidity, timorousness
- Accent: a special notice or importance given to something
Synonyms: emphasis, accentuation, stress, underscoring, weight
Antonyms: de-emphasis, minimization, underemphasis
- Raging: Continuing with great force or intensity.
Synonyms: stormy, violent, strong, wild, turbulent, tempestuous, blustery, severe, extreme, huge, excessive, very great, inordinate
- Nurturing: Care for and protect (someone or something) while they are growing.
Synonyms: bring up, care for, provide for, take care of, attend to, look after, rear, support, raise, foster, parent, mother, tend
Antonyms: discourage, frustrate, hinder, inhibit, encumber, fetter, hobble, impede, interfere (with), manacle, obstruct, shackle
- Gavel: A small hammer with which an auctioneer, a judge, or the chair of a meeting hits a surface to call for attention or order.
Synonyms: mallet, beetle
- Bandwagon: Used in reference to an activity, cause, etc. that is currently fashionable or popular and attracting increasing support.
Synonyms: campaign, blitz, cause, crusade, drive, juggernaut, movement, push