Gross NPAs of banks jump to 11.2% in FY18

System-wide gross non-performing assets (NPAs) of banks rose to 11.2 per cent or at Rs 10.39 trillion in FY18, and the share of public sector banks stood at Rs 8.95 trillion or at 14.6 per cent, according to RBI data. In FY17, system-wide gross NPAs stood at 9.3 per cent and that of state-run lenders at 11.7 per cent. “During FY18, the GNPA ratio reached 14.6 per cent for state-run banks due to restructured advances slipping into NPAs and better NPA recognition,” the RBI said. In terms of the net NPA ratio, state-run banks saw significant deterioration at 8 per cent in FY18 from 6.9 per cent a year ago. Private sector banks’ GNPA ratio stood at a much lower level of 4.7 per cent as against 4.1 per cent in FY17.

RBI against relaxing capital buffer for banks

The RBI warned on December 28 that with high bad loans and inadequate provisioning to cover the same, any relaxation in the regulatory capital requirement or risk-weights could be detrimental to banks in particular and the economy in general. The Basel III norms recommend risk-weights for various credit exposures, based on cumulative default rates (CDR) and recovery rates observed internationally. However, CDRs and the loss given default (LGD) rates observed here are much higher than international average, the RBI said. “Therefore, applying the Basel-specified risk-weights would understate the true riskiness of loan assets carried on the books of our banks,” the report warned.

Govt doubles export incentive on onion

Concerned over the fall in onion prices, the government on December 28 doubled the export incentive for the kitchen staple to boost shipments and ensure better returns for farmers. At present, onion traders get 5 per cent export incentive on fresh crop under the Merchandise Exports from India Scheme. The move will result in better price for onion in domestic markets. Wholesale prices of onion are “subdued” at present due to increase in the arrival of fresh crop in mandis, said a government statement. “To contain the situation, it has been decided by the government to encourage export of onions so that the domestic prices stabilise,” it added.

Forex reserves increase by $167.2 mn

India’s foreign exchange reserves increased by $167.2 million to $393.287 billion in the week to December 21, mainly due to a rise in foreign currency assets, according to RBI data. In the previous week, the reserves had declined by $613.9 million to $393.12 billion. In the reporting week, foreign currency assets, a major component of the overall reserves, rose by $105.2 million to $367.970 billion. The reserves had touched a record high of $426.028 billion in the week to April 13. Since then, the forex kitty has been on a slide and is now down by over $31 billion. Gold reserves rose by $37.2 million to $21.224 billion.

GST evasion worth Rs 38,896 cr detected

The government has detected GST evasion worth Rs 38,896 crore in 6,585 cases in the April-October period of 2018-19. Minister of State for Finance Shiv Pratap Shukla said while central excise evasion of Rs 3,028.58 crore in 398 cases was unearthed during the seven-month period, service tax evasion of Rs 26,108.43 crore was detected in 3,922 cases. Customs evasion was detected in 12,711 cases involving Rs 6,966.04 crore and GST evasion worth Rs 38,895.97 crore was unearthed in 6,585 cases, he said in in the Lok Sabha. The total amount of evasion in indirect taxes (GST, service tax, excise and customs) during the period adds up to about Rs 75,000 crore.

Govt adds more teeth to POCSO Act

The Union Cabinet on December 28 approved amendments to strengthen the POCSO Act and included the death penalty for aggravated sexual assault on children, besides providing stringent punishments for other crimes against those below 18 years of age. Union Law Minister Ravi Shankar Prasad said children should be protected from sexual offences and the Cabinet has approved amendments to various sections of The Protection of Children from Sexual Offences (POCSO) Act to achieve this. Prasad said the amendments to Sections 4, 5, 6, 9, 14, 15 and 42 of the POCSO Act, 2012, are made to address child sexual abuse in an appropriate manner.

Revised CRZ rules focuses on tourism

The Centre has approved new rules governing coastlines in which it has given impetus to promotion of tourism facilities such as shacks on beaches and stipulated a No Development Zone (NDZ) of 20 metres for all islands. The Union Cabinet has approved the Coastal Regulation Zone (CRZ) Notification, 2018, in which powers to give clearances to projects falling in CRZ-II and III have been delegated at the state level with necessary guidance. “The proposed CRZ Notification will lead to enhanced activities in coastal regions, thereby promoting economic growth while also respecting the conservation principles of coastal regions. The notification is expected to rejuvenate coastal areas while reducing their vulnerabilities,” said an official statement.

ATM numbers decline marginally in FY18

The number of ATMs declined marginally to 2.07 lakh in FY18 from 2.08 lakh in FY17, primarily due to branch rationalisation by a few public sector banks, the RBI said. Similarly, the number of operational onsite ATMs too came down to 1.06 lakh during the year from 1.09 lakh in FY17, while that of offsite ATMs increased to 1 lakh from 98,545. “In FY18, the number of ATMs of state-run banks declined to 1.45 lakh from 1.48 lakh in FY17,” the RBI said. However, private sector banks installed more ATMs, taking their total number to 60,145 in FY18, up from 58,833 in the previous fiscal. The growth of white-label ATMs has also tapered off in recent years, although the number of such ATMs crossed the 15,000 mark in FY18.

Newsmakers

Renowned Israeli writer Amos Oz (pictured), a passionate peace advocate whose stirring memoir A Tale of Love and Darkness became a worldwide bestseller, died on December 28 at the age of 79.

Neil Prakash, Australia’s most wanted jihadist who became a recruiter for ISIS, has been stripped of his Australian citizenship. The 27-year-old former rapper had featured in ISIS videos and been linked to a failed Melbourne plot to behead a police officer and another attack in which two officers were stabbed.