Share Tweet Plus One Pin It Email Print By: Mukesh Chand August 14, 2018 11:13 am Change Font Size The financial sector of the country is a major contributor towards the growth of the country. The sector comprises public sector banks (PSUs), commercial banks, insurance companies, Non-Banking Financial Companies (NBFCs), mutual funds, pension funds etc. The 17th Financial Stability Report (FSR)[i] released by RBI in June has highlighted that the stress in the banking sector continues as gross non-performing advances (GNPA) ratio rises further. Profitability of SCB[ii]s declined, partly reflecting increased provisioning. Credit growth of SCBs picked up during 2017-18 notwithstanding sluggish deposit growth. Macro-stress tests indicate that under the baseline scenario of current macroeconomic outlook, SCBs’ GNPA ratio may rise from 11.6 percent in March 2018 to 12.2 percent by March 2019. The system-level capital to risk-weighted assets ratio (CRAR) may come … [Read more...] about Towards Loan Market Structure: More Liquidity & Relief From Stressed Assets For Banks?
Ideal debt to asset ratio
Banks and bank holding companies always need capital, and capital is crucial if a bank wants to undertake an acquisition, or improve its ratios for CRE concentration limits (something the regulators are looking at with greater frequency), or for other purposes. Of course, a sale of common stock is the typical way in which banks and bank holding companies raise capital, but the issuance of unsecured, subordinated debt may also be an advantageous way to raise needed capital.Subordinated debt is most suitable for issuance by the bank holding company. Issued at the holding company, it is tier 2 capital (if certain requirements are met), but the proceeds may be downstreamed to the bank as tier 1 capital. Subordinated debt does not dilute common stockholders, and it can be issued at interest rates that are relatively low. Two significant advantages to this method of funding is that the interest paid is tax deductible, and a subordinated debt agreement generally does not contain the strict … [Read more...] about Subordinated Debt – Effective Alternative for Capital
A question that is repeatedly arising after the enactment of Insolvency and Bankruptcy Code (IBC) is as to whether the security of guarantee (Personal or Corporate) is no longer a preferred security or convenient security for the secured creditors? The latest judgement of the Honourable National Company Law Appellate Tribunal (NCLAT) in the case of State Bank of India Vs V Ramakrishnan and Veesons Energy Limited (28th February Order) is a direct contradiction of its own orders in the earlier cases decided by it in the matter of Scheweitzer Systemtek India Private Limited and Alpha and Omega Diagnostics (India) Limited. An Order ‘Per Incuriam’ [Per Incuriam ~ through or characterized by lack of due regard to the law or the fact] It is interesting to note that in the case of Schweitzer, the Honourable NCLT, Mumbai while examining the aspect of Moratorium under section 14 of IBC held that the ‘Moratorium’ has no application on the properties beyond the … [Read more...] about Moratorium To Guarantor’s Assets vis-à-vis Interests Of The Secured Creditors
By Daniel Borenstein | [email protected] | Bay Area News Group PUBLISHED: February 13, 2019 at 5:10 am | UPDATED: February 13, 2019 at 7:40 am Despite nearly a decade of economic growth since the end of the Great Recession, the nation’s largest public pension system remains badly underfunded with only about two-thirds of the assets it should now have. It’s time for the California Public Employees’ Retirement System to address one of the causes of the shortfall: It should stop relying on unrealistically optimistic investment-return forecasts to help bankroll the retirement of 1.9 million state and local government workers and family members. CalPERS is currently in the middle of a three-year lowering of its assumed investment-earnings rate, from 7.5 percent annually to 7 percent. But that’s still not low enough. The pension system’s staff and board members should know that. Their outside consultant warned them in 2016 that the best average … [Read more...] about Borenstein: CalPERS’ flawed forecasting increases pension debt
So whether they are actively recruiting these low-income students for reasons of open-the-door altruism or keep-the-lights-on capitalism — or, more likely, some combination of the two — there has been a huge, largely hidden byproduct of this dramatic increase in access: These students are often being loaded up with staggering debt that is completely out of whack with the earnings boost they’ll likely get from a degree at a nonselective or less selective college. Already, average student loan debt is higher in Boston than any other metro area in the country, 44 percent above the national average, according to Credit Karma. But more troubling, many of these low-income students — and, at some colleges, most of them — are not graduating. That means these non-completers are leaving campus saddled with lots of debt but none of the salary gains that traditionally come with a bachelor’s degree. RELATED STORY: Poor at an Ivy League school Dean College … [Read more...] about The college debt crisis is even worse than you think