Gold Loan Fraud of Rs.1.65 crore in Bank: Female Officer Fired

An assistant manager at the Rajim branch of Indian Overseas Bank was arrested for stealing more than Rs 1 crore through the issuance of fraudulent jewelry loans. Ankita Panigrahi, the accused, was apprehended from Bargarh, Odisha, by the State Economic Offenses Investigation Bureau (EOW). The police started questioning her and pursuing additional legal action after the arrest.

Ankita Panigrahi was employed in 2022 as an Assistant Manager at Indian Overseas Bank's Rajim branch in the Gariaband district. She created fictitious jewelry loan records there by abusing locked bank accounts. She was able to take out Rs 1 crore 65 lakh from the bank in fraud by doing this.

When this fraud was discovered, the bank fired her right away. The Economic Offenses Wing (EOW) then formally filed a case against her in 2023. The case was brought under Section 409 of the Indian Penal Code, which addresses criminal breach of trust by a public worker, and Section 13(a) of the Prevention of Corruption Act, 1988 (as amended in 2018).

For a long time, Ankita had been absconding (hiding from the authorities), but the EOW finally tracked her down in Bargarh, Odisha. She was taken into police custody (remand) so that officials could question her thoroughly about the fraud. The EOW is now conducting a detailed investigation to uncover the full extent of the scam and to check whether other people were involved.

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Government will sell stake in three PSU banks, why this situation came?

The central government can sell stake in three big public sector banks. These three banks are UCO Bank, Punjab and Sindh Bank and Indian Overseas Bank. The government has more than 95% stake in these, the rest is with public investors.

Let us tell you that as per the Minimum Public Shareholding (MPS) rules of SEBI, all listed companies should have at least 25% public shareholding. Keeping this in mind, the government has made a plan to sell its stake.

Live Mint news quoted sources as saying that depending on market conditions, the three banks may conduct multiple rounds of qualified institutional placement (QIP) in FY2026 to meet regulatory requirements.

The government has allowed public sector banks to explore equity dilution this year and time their market offerings strategically, a source said. The stake sale is expected to be between 5-10% of the paid-up equity capital this year.

SEBI gave time till August 2026 to public sector banks to comply with the rule. At the same time, Life Insurance Corporation of India (LIC) was given time till 16 May 2027 to reach 10% public shareholding.

By December 31, 2024, seven of the 12 public sector banks—State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Indian Bank, Union Bank of India and Bank of India—had fulfilled SEBI's MPS requirement.

Bank of Maharashtra and Central Bank of India have not yet taken steps to comply with the MPS rule. Let us tell you that the government has 93.08% stake in Central Bank of India, 79.60% in Bank of Maharashtra, 95.39% in UCO Bank, 98.25% in Punjab and Sindh Bank and 96.38% in Indian Overseas Bank.

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Indian Overseas Bank(IOB) Q3 Profit climbs 21% YoY

Indian Overseas Bank (IOB), a state-owned bank, reported on Monday that its consolidated net profit for the third quarter ended December 2024 increased by about 21% year-over-year (YoY) to Rs 875.27 crore, up from a profit of Rs 724.14 crore in the same period the year before. 

In the third quarter that concluded on December 31, Indian Overseas Bank's net interest income (NII), which is calculated as interest generated less interest spent, increased 16% year over year to Rs 2,789 crore from Rs 2,398 crore in the same quarter the previous year.

On the asset quality front, the lender said its gross non performing assets ratio improved to 2.55% in the third quarter of fiscal 2025, as compared to 2.72% in the previous quarter of the same financial year. Similarly, net non performing assets improved to 0.42% in the December quarter, from 0.47% in the second quarter of FY25.

Also Read - Quarterly Results of all banks for Q3FY25

In the December quarter of FY25, provisions stood at Rs 1,028.6 crore, as against Rs 701.42 crore in the same quarter last year. The provisions in the September quarter of fiscal 2025 was Rs 1,146.3 crore.

The lender’s gross non performing assets (GNPA) improved to Rs 6,070.5 crore in the third quarter of FY25, from Rs 6,249.07 crore in the previous quarter of the same financial year.

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Government plans to sale stake in five PSU banks

A Rs.10,000 crore fund-raising plan for five state-run institutions via the Qualified Institutional Placement (QIP) route has been approved by the government.



According to sources, four additional lenders—Punjab & Sind Bank, Indian Overseas Bank, UCO Bank, and Central Bank of India—have been given permission to raise money in addition to the Bank of Maharashtra. According to the sources, these lenders may begin raising money in tiny installments as early as the fourth quarter of the 2025 fiscal year.

"The Department of Disinvestment and Public Asset Management (DIPAM) has also been mandated to sell a stake in these lenders through the Offer For Sale (OFS) route," the sources noted.



By August 2026, the government hopes to have a minimum of 25% of these PSU banks' shares held by the general people. The Department of Financial Services has administrative authority for state-run lenders.



According to the most recent shareholding pattern on the BSE, the government owns 79.6% of Bank of Maharashtra, 98.25% of Punjab & Sind Bank, 96.38% of Indian Overseas Bank, 95.39% of UCO Bank, and 93.08% of Central Bank of India as of the end of the December quarter.Based on the current share price, the excess government stake in these five lenders stands at nearly Rs.50,000 crore.

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Indian Overseas Bank(IOB) Q2 Net profit up 24%

State-owned Indian Overseas Bank (IOB) on Thursday (October 17) reported a 24.4% year-on-year (YoY) rise in net profit at ₹777.2 crore for the second quarter that ended September 30, 2024. In the corresponding quarter of the previous fiscal, Indian Overseas Bank posted a net profit of ₹624.6 crore, the bank said in a regulatory filing.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased 8.2%, coming at ₹2,537.3 crore against ₹2,345.8 crore in the corresponding quarter of FY24.

The gross non-performing asset (GNPA) stood at 2.72% in the September quarter against 2.89% in the June quarter. Net NPA came at 0.475% against 0.51% quarter-on-quarter.

In monetary terms, gross NPA stood at ₹6,249.1 crore against ₹6,648.7 crore quarter-on-quarter, whereas net NPA came at ₹1,059.3 crore against ₹1,153.5 crore quarter-on-quarter. Provisions stood at ₹1,146.3 crore against ₹937.9 crore quarter-on-quarter and ₹1,044.2 crore (YoY). The results came after the close of the market hours.

The Provision Coverage Ratio (PCR) rose to 97.06%, showing a year-on-year increase of 30 basis points. The Return on Assets (ROA) reached 0.82%, up 7 basis points from the previous year, while the Return on Equity (ROE) increased to 16.90%, a rise of 74 basis points year-on-year.

Total business experienced robust year-on-year growth of 12.20%, reaching ₹5,40,801 crore, compared to ₹4,82,006 crore in the previous year. Total income surged by 22.34% year-on-year to ₹8,484 crore, with interest income growing by 17.69% to ₹6,851 crore and non-interest income showing growth of 46.59%, reaching ₹1,633 crore.

The bank's Net Interest Margin (NIM) stood at 3.08%, and the Capital Adequacy Ratio (CRAR) under Basel III remained strong at 17.45%, with a Tier I component of 14.75%.

Additionally, CASA deposits improved by 10.61% year-on-year, totalling ₹1,31,856 crore, resulting in a CASA ratio of 42.44% as of September 30, 2024. The Credit to Deposit (CD) Ratio for the quarter was 74.09%.

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Indian Overseas Bank(IOB) Q1 Net profit up 27%

 

Public sector lender Indian Overseas Bank on July 22 reported a net profit of Rs 633 crore in the first quarter of fiscal 2024-25, 27 percent higher than Rs 500 crore reported in the corresponding quarter last year.

Gross NPA of the bank stood at 2.89 percent against 7.13 percent last year, a reduction of 424 bps. Net NPA stood at 0.51 percent compared to 1.44 percent, with a reduction of 93 bps.

Total deposits of the bank jumped 13 percent to Rs 2.98 lakh crore from Rs 2.64 lakh crore last year. CASA improved 8 percent to Rs 1.25 lakh crore from Rs 1.16 lakh crore.

Interest income of the bank grew by 20.48 percent on Y-o-Y basis to Rs 6,535 crore in Q1FY25 as against Rs 5,424 Crore for Q1FY24.

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Indian Overseas Bank(IOB) Q4 results: Net profit rises 24%

 

Indian Overseas Bank (IOB) reported a 24 per cent increase in its net profit to Rs 808.10 crore in the January-March quarter of FY24, up from Rs 650.07 crore in the same period last year, on the back of healthy growth in core income and a decline in provisions.

Sequentially, the net profit increased by 12 per cent from Rs 722.56 crore in the third quarter of FY24.

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The total income of the bank increased by 37.43 per cent to Rs 9,112.67 crore compared to the same period last year, while net interest income (NII) improved by 27.67 per cent to Rs 6,629 crore. Other income rose to Rs 2,477 crore from Rs 1,430 crore in the same period.

The operating expenses of IOB increased in the quarter under review to Rs 3,281.38 crore, compared to Rs 1,826.58 crore, owing to higher employee-related expenses.

“The operating expenses increased due to salary expenses, which has also led to an increase in the cost-to-income ratio,” said Ajay Kumar Srivastava, managing director and chief executive officer of IOB, during a post-earnings media call.

The bank's cost-to-income ratio stood at 62.58 per cent compared to 49.23 per cent last year.

The provisions of IOB declined to Rs 767.56 crore from Rs 995.85 crore in Q4 FY23.

The asset quality of the bank improved. The gross non-performing assets (GNPA) ratio for the quarter ended March 31, 2023, was 3.10 per cent, compared to 3.90 per cent in the previous quarter. Net NPA was at 0.57 per cent compared to 0.62 per cent in the same period.

The lender recorded healthy growth in gross advances to Rs 2.19 trillion as of March 31, 2024, compared to Rs 1.89 trillion in the same period last year. The lender's deposits increased to Rs 2.86 trillion from Rs 2.60 trillion over the same period.

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बैंक की पूर्व वरिष्ठ प्रबंधक को जेल:सात साल की कैद के साथ 15 करोड़ जुर्माना

 

An Ahmedabad CBI court on Thursday convicted a former Indian Overseas Bank (IOB) manager on graft and forgery charges and sentenced her to seven years’ imprisonment and imposed a penalty of Rs 15.06 crore.

The court of special CBI judge Digant Arunbhai Vora held the accused – Preeti Vijay Sahjwani – a former senior manager at IOB’s Vastrapur branch, had “undeniably indulged in white collar crime and economic and social crime”.

The judge has held Sahjwani guilty under Prevention of Corruption Act’s sections 13 (1) (c), 13(1)(d), 13 (2) and IPC sections 467, 471 (forgery) and 409 (criminal breach of trust by bankers).

Sahjwani, between 1998 and 2001, was accused of allegedly cheating IOB to the tune of Rs 2.14 crore by way of crediting final maturity payments of FCNR (foreign currency non-resident) deposits of two accounts into two fictitious accounts – one a cash credit account and another a savings account – without any authority letter from the depositor or from the power of attorney holder.

She had also sanctioned loans and cash credits in the name of five fake persons, amounting to approximately Rs 1.40 crore against the security of unsurrendered deposit receipts of actual depositors, by making alterations in the amount, date, maturity value, etc. It was alleged that Sahjwani had caused a wrongful loss of over Rs 2 crore, including interest, as on July 27, 2001.

An offence was registered in 2001 and chargesheet was filed in October 2003 for criminal breach of trust, forgery of valuable security using forged documents, and criminal misconduct. It was alleged that Sahjwani had misused her official position by indulging in the offences.

The special CBI court, while imposing a fine of Rs 15 crore, which is to be returned to the bank, observed that taking into account the loss caused to the bank (which would amount to present day value worth over Rs 84 crore as on date), and inflation, interests etc, the court has taken into account the accused’s economic condition. Notably, the accused herself is a law graduate.

“The perpetrators of white collar crime are not the lower class citizens of the society but the middle class professionals, higher officials etc. The victims of white collar crime are common people of the society and the nation. The main motive behind white collar crimes is always financial gain and individuals committing these types of crimes enrich themselves illegally.

 Wealth, luxurious life and financial stability motivate the guilty-minded persons to commit such crimes… Corruption crimes committed by public servants are more fatal to the society and the country than ordinary crimes because the consequences of white collar crime are far greater and far-reaching than ordinary crimes,” Judge Vora observed.

The judge said that the crimes of corruption undermine the morale and self-confidence of people while white collar criminals use their experience, position and well-educated mind in a planned manner and misuse the trust and confidence placed on them by the organisation.

Sanjhwani had been absconding during the probe and she was taken into custody only in 2012 after she was detained by Canadian immigration authorities and was deported to India in January 2012.

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BoB, PNB among 6 PSU banks with high NPAs

Non Performing asset (NPA) is a loan or advance for which the principal or interest payment has remained overdue for a period of 90 days or more. According to data from Trendlyne, SBI, Bank of Baroda, and PNB are among the 6 PSU banks that reported the highest NPAs in Q3 of FY24. Here's the list:

Bank of India(BoI)

The net NPA of Bank of India stood at 1.41% in Q3FY24, which is the highest among PSU Banks. The PE ratio of the stock is 9.66. Bank of India has a market cap of Rs 61,870 crore.

Union bank of India

Union Bank of India reported a net NPA of 1.08% in Q3FY24. The PE ratio of the stock is 7.74. The firm's market cap is at Rs 1,02,773 crore.

Punjab National Bank (PNB)

Punjab National Bank (PNB) reported a net NPA of 0.96% in Q3FY24. The PE ratio of the stock is at 17.76. Punjab National Bank's market cap is at Rs 1,35,490 crore.

Bank of Baroda(BoB)

The net NPA ratio of Bank of Baroda stood at 0.7% in the December quarter of FY24. The PE ratio of the stock is 7.3. It has a market cap of Rs 1,38,153 crore.

State Bank of India (SBI) 

The net NPA ratio of the State Bank of India (SBI) stood at 0.64% in Q3FY24. The PE ratio of the stock is 10.26. SBI has a market cap of Rs 6,65,731 crore.

Indian Overseas Bank(IOB)

Indian Overseas Bank reported a net NPA of 0.62% in the December quarter of FY24. The PE ratio of the stock is at 50.36, while its market cap is at Rs 1,26,457 crore.

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Indian Overseas Bank(IOB) Q3 results: Net profit rises 30%

 

Public sector lender Indian Overseas Bank on January 24 reported a net profit of Rs 722 crore for the October-December quarter of 2023-24, which marks a 30 percent jump from Rs 555 crore clocked a year ago.

The bank's gross non-performing asset (NPA) stood at 3.90 percent, down from 8.19 percent recorded in the same quarter last year. On the other hand, net NPA for the quarter stood at 0.62 percent, improving from 2.43 percent a year back.

The net interest income of the bank stood at Rs 6,176 crore for the quarter,

compared to Rs 5,056 crore in the corresponding quarter last year. The net interest margin of the bank contracted to 3.12 percent compared to 3.27 percent last year.

Total deposits of the lender stood at Rs 2.78 lakh crore compared to Rs 2.73 lakh crores last year. The current account and savings account (CASA) ratio of the bank stood at 43.49 percent against 43.65 percent last year. The bank's advances stood at Rs. 2.16 lakh crore compared to Rs 2.08 lakh crores last year.

The lender's credit deposit (CD) ratio stood at 77.74 percent compared to 67.99 percent.

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Indian Overseas Bank(IOB) Q1 net profit up by 28%

 

Public sector lender Indian Overseas Bank on August 2 reported a 27.50 percent rise in net profit at Rs 500 crore in the first quarter of the financial year 2023-24, up from Rs 392 crore in the year-ago period.

Net interest income jump 22 percent and stood at Rs 5,424 crore for the quarter ended June 2023 compared to Rs 4,435 crore last year.

The lender's total deposits increased to Rs. 2.64 lakh crores up from Rs. 2.60 lakh crores last year. The current account and savings account (CASA) of the bank improved to 44.14 percent compared to 43.07 percent last year. Total CASA from Rs 1.12 lakh crore to Rs 1.16 lakh crore.

The bank's gross non-performing assets (GNPA) declined to 7.13 percent from 9.16 percent in the same quarter of the previous fiscal.

Net non-performing assets (NNPAs) of fell to 1.44 percent from 2.43 percent last year.

The provision coverage ratio improved to 94.03 percent against 91 .86 percent.

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Indian Overseas Bank(IOB) Q4 profit rises 18%

Indian Overseas Bank has reported 17.12% rise in net profit to Rs 650 cr for the quarter ended march 2023 as against Rs 555 crore for December 2022 quarter.

The year on year net profit of the bank has surged by 22.75% to Rs 2,099 cr from Rs 1,710 crore as reported in the financial year 2021-22 on the back of strong growth in net interest income and improvement in asset quality.

On the asset quality side, the bank has seen decrease in both gross NPA and net NPA. The bank’s gross NPA has gone down to Rs 14,072 cr (7.44%) as on 31.03.2023 from Rs 14,333 crore (8.19%) as reported on 31.03.2022.

Similarly, the net NPA of the bank has decreased to Rs 3,266 cr (1.83%) from Rs 4,000 cr (2.43%) for the above said period.

The provision requirement for NPA has decreased by 26.52% to Rs 2,499 cr as on 31.03.2023 as against Rs 3401 cr reported in the previous year due to improvement in the asset quality.

The credit cost of the bank has reduced to 1.70% as of 31.03.2023 as against 2.35% reported in the last year.

The net interest margin of the bank stood at 3.20% as on the quarter ended March 2023. The return on asset of the bank also increased to 0.83% as on the quarter ended March 2023 as against 0.73% in the previous quarter.

The capital adequacy ratio has improved to 16.10% as of 31.03.2023 as against 15.16% as of 31.12.2022 and as against 13.83% as of 31.03.2022.

The net interest income of the bank has increased by 30.82% to Rs 8,256 crore as of 31.03.2023 from Rs 6,311 crore reported in the previous financial year on the back of strong credit growth. The credit growth of the bank has increased by 21.31% (YoY) to Rs 1,89,009 crore as on March 31, 2023.

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IOB declares a 20% jump in net profit in Q1

 Indian Overseas Bank (IOB), a public sector lender, announced on Saturday that its net profit for the first quarter of the current fiscal year increased by 20% to Rs.392 crore from Rs.327 crore in the same quarter of the previous year.

According to IOB, its total deposits rose by 7.04 per cent year over year to Rs. 2,60,045 crores as of June 30, 2022, from Rs. 2,42,941 crores in Q1FY22. When compared to the previous year, the bank's overall business expanded by 10.92 per cent YoY to Rs. 4,23,589 crores as of June 30th, 2022, from Rs. 3,81,885 crores in Q1FY22. Gross Advances climbed to Rs. 1,63,544 crores as of June 30, 2022, up from Rs. 1,38,944 crores the previous year, while CASA of the Bank increased to 43.07 per cent, up from 41.63 per cent. Total CASA has climbed to Rs. 1,12,012 crores on June 30, 2022, from Rs. 1,01,129 crores on June 30, 2021. Due to investments that were marked to market for a provision of Rs. 340.16 crore, the bank's operating profit for the quarter that ended on June 30, 2022, fell to Rs. 1026 crore from Rs. 1202 crore in Q1FY22.

The bank's gross non-performing assets (NPA) fell to Rs.14,769 Cr in Q1FY23 from Rs.15,952 Cr in Q1FY22, a reduction of 7.41 per cent YoY. IOB reported a total income of Rs. 5028 crore for the quarter that ended on June 30, 2022, a 2.46 per cent YoY reduction from Rs. 5155 crore for the quarter that ended on June 30, 2021.  IOB recorded a net NPA of Rs. 3,698 Cr. in Q1FY23 vs Rs. 3,998 Cr in Q1FY22, a loss of 7.50% YoY. The bank reported a net interest margin of Rs. 2.53 Cr in Q1FY23 versus Rs. 2.34 Cr. in the same quarter of the previous year.

IOB reported a gross NPA ratio of 9.03% compared to 11.48% in the same quarter of the last year and the bank reported a net NPA ratio of 2.43% compared to 3.15% in the same quarter of the last year. The bank reported a cost-to-income ratio of 56.27% compared to 53.57% in Q1FY22. IOB reported a return on assets (ROA) of 0.52% compared to 0.47% in Q1FY22 and the return on equity (ROE) of the bank comes down to 12.63% in Q1FY23 which was 14.57% in Q1FY22.

Interest income for the bank totalled Rs. 4435 crores for the quarter that ended on June 30, 2022, compared to Rs. 4,063 crores in the same quarter of the last year. Due to a rise in other income, the bank's non-interest income decreased from Rs. 1,092 crore for the quarter ended June 30, 2021 to Rs. 593 crore for the quarter ended June 30, 2022. The bank's total expenditure grew from Rs. 3,953 crores for the quarter ended June 30, 2021, to Rs. 4002 crores for Q1FY23. 

The bank's Gross NPA in the first quarter of FY23 was Rs. 14,769 crores, or 9.03 per cent, compared to Rs. 15,952 crores, or 11.48 per cent, in the first quarter of FY22. In comparison to 91.56% in Q1FY22, IOB's Provision Coverage Ratio increased to 91.86 per cent in Q1FY23.

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RBI imposes monetary penalty on this PSU bank for non-compliance

 

Before the penalty, RBI had conducted a statutory inspection for supervisory evaluation of the bank regarding its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.

The Reserve Bank of India (RBI) on Friday imposed a monetary penalty of Rs.57.50 lakh on the government-owned Indian Overseas Bank for non-compliance with certain directions. The penalty was related to the directions issued by RBI on Frauds – Classification and Reporting by commercial banks and select FIs.

RBI said, "This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers."

Before the penalty, RBI had conducted a statutory inspection for supervisory evaluation of the bank regarding its financial position as of March 31, 2020, and the examination of the Risk Assessment Report, Inspection Report, and all related correspondence about the same.

As per the central bank, the inspection revealed non-compliance with the directions issued by RBI, inter-alia, to the extent the bank (i) failed to report certain instances of frauds involving ATM card cloning/skimming, to the RBI within three weeks from the date of detection, (ii) failed to ensure integrity and quality of data when it did not report credit information in CRILC on certain borrowers having aggregate exposure of Rs.5 crore and above, and (iii) linked certain floating rate loans to Micro and Small Enterprises, extended by it on or after October 01, 2019, to MCLR/Base Rate instead of an external benchmark.

Following this, RBI had issued a notice to the bank advising it to show cause as to why the penalty should not be imposed on it for failure to comply with the directions issued by the central bank.

After considering the bank’s reply to the notice and examination of additional submissions made by it, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions.

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Six Indian banks sue GVK for Rs 12,114 crore: Report

Six Indian banks are reportedly suing the GVK Group for $1.5 billion or Rs 12,114 crore, according to the Times of India. The six banks include Bank of Baroda, Bank of India, Canara Bank , Icici Bank , Indian Overseas Bank, and Axis Bank.

According to the report, GVK defaulted on a $1-billion loan and a $35-million letter of credit facility given by banks in 2011, and a $160-million loan lent in 2014.

GVK Coal Developers (Singapore) and nine other GVK Group companies are being sued in the case which opens Monday.

As per the banks, GVK failed to make repayments as they fell due and failed to obtain a mining lease in the Alpha project in Queensland, Australia by December 31, 2012, which was a project milestone that had to be satisfied. The banks reportedly asked GVK in November 2020 to cancel the agreement and requested repayment. But neither GVK nor its guarantors has paid any of the sums owed, the banks claimed.

On the other hand, GVK argued that "the loans was to provide part funding for the acquisition of the Hancock companies in Australia to develop their assets — including the Alpha project — into working coal mines".

“The deterioration in the market for coal, the lack of third-party investment, legal challenges to the mining projects in the courts of Queensland, meant that very little progress was made to develop the mining assets,” GVK states. GVK states it could not obtain the mining lease owing to litigation by environmental groups but denies this was a “default”.

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Privatisation Of Bank: Two banks to be sold in the country, centre to speed up law change process

 

The Centre speed up the process of privatising two State-owned banks. News agency PTI quoted a source from the Centre as saying on Wednesday. The Modi government at the Centre had earlier amended the 'Banking Regulation Act' to pave the way for private investment in State-owned banks. According to sources, the Centre wants to pass a bill in this regard in the upcoming monsoon session of Parliament.

Union Finance Minister Nirmala Sitharaman had said last year that the Centre wants to start the process of privatising some state-owned banks. Therefore, the Bank Nationalization Acts of 1970 and 1980 will be amended and the Bank Control Act of 1949 will be amended. According to finance ministry sources, the process has begun. The government has also started preparing the draft of the 'Banking Regulation Act'. If all goes well, the amendment will be passed in the monsoon session. Of course, there is a good chance of the opposition being hindered. However, due to the majority, the government should not have any problem in passing this law.

The amendment has been passed in parliament and there will be no bar on the privatization of State-owned banks. Only then will the process of privatization of state-owned banks begin. Initially, two state-owned banks have also been listed for disinvestment. The name of which two banks will be privatised is yet to be announced by the Centre. According to sources, the Modi government initially chose four medium-sized banks for privatisation. The four banks that were placed in the initial list for privatisation are Bank of Maharashtra (BoM), Bank of India (BoI), Indian Overseas Bank(IOB) and Central Bank of India. Later, niti aayog proposed that most of the shares of Indian Overseas Bank and Central Bank of India be sold. The Modi government can go ahead with the NITI Aayog's proposal.

This is not the end of it, the government also wants to complete the privatization process of the tate-owned company BPCL quickly. Sources claim that only 52.3 per cent stake in BPCL held by the Centre will be sold. Earlier, the Modi government had taken the initiative to sell the shares of BPCL. Initially three companies showed interest in buying bpcl shares. But in the end, only one company survives in the race, the sources claim.

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IOB, Central Bank divestment on the fast-track

The Centre plans to accelerate the process of privatisation of the Indian Overseas Bank (IOB) and Central Bank of India after the two banks posted good quarterly results, finance ministry sources said. The government’s public policy think tank Niti Aayog has already proposed the names of these two PSBs to the core group of Secretaries on Disinvestment (CGD) for privatisation.

“We had to put a halt to the privatisation process in between because of the protests by bank associations and State elections. But now, after the banks registered positive results in the December quarter, it will gather steam. CGD is assessing the proposal submitted by Niti Aayog, which will then go to the Cabinet committee for final approval,” an official told this newspaper.

Another official pointed out that there is no provision for privatisation of banks in the Bank Nationalization Act. So, an amendment is needed in the Act to privatise the state-owned lenders. “A few amendments have been proposed to the Banking Regulation Act and Bank Nationalisation Act to facilitate the privatisation.

We are trying to make an attractive scheme related to employees’ compensation to avoid strikes,” he added. In the October-December quarter, Chennai-based IOB’s net profit doubled to Rs 454 crore against Rs 213 crore in the year-ago period. In the same period, Mumbai-based Central Bank of India registered a 69% increase in its net profit at Rs 279 crore.

More banks to be identified later

After the completion of the privatisation of IOB and CBI, the Centre will identify other banks for disinvestment in the coming years. The government wants only four large PSBs in the country.

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Indian Overseas Bank net profit up 154%

State-run Indian Overseas Bank (IOB) has posted a 154 per cent increase in net profit during the second quarter of the current financial year ended on September 30 to Rs 376 crore, as compared to Rs 148 crore during the same quarter in 2020-21.

The lender's total income for the reporting quarter was down marginally by about 1 per cent to Rs 5,376 crore, from Rs 5,430 during the July to September quarter of 2020-21. The bank’s managing director and chief executive officer P P Sengupta said the reasons for the better financial numbers is owing to a better outlook in the economy due to higher rates of vaccination and better performance in retail, agriculture, MSME (RAM) and corporates.

The bank’s asset quality showed signs of improvement with its gross non-performing assets falling by 11.29 per cent from Rs 17,660 crore during the second quarter in 2020-21 to Rs 15,666 during the same quarter this fiscal. During the quarter GNPA reduced by Rs 286 crore. GNPA ratios improved to 10.66 per cent from 13.64 per cent on a quarter on quarter basis. The bank came out of RBI's Prompt Corrective Action (PCA) on September 29, 2021.

Reduction in NPA for the quarter ended September 2021 stood at Rs. 1798 crore as against Rs.1,616 crore achieved for quarter ended June 2021. Net NPA during the quarter was seen at Rs 3,741 crore with a ratio of 2.77 per cent as against Rs 3,998 crore with a ratio of 3.15 per cent during the previous quarter.

The bank's net interest margin was 2.43 per cent in Q2 FY22, as against 2.57 per cent a year ago. During the quarter under review, IOB’s operating profit zoomed by 5.42 per cent to Rs 1,419 crore, as compared to Rs 1,346 crore seen during the September quarter last fiscal. Total deposits were seen up by 9 per cent to Rs.2,50,890 crore as on September end as compared to Rs 2,42,941 crore as on the quarter ended in June 2021.

Gross advances stood at Rs 1,46,940 crore during the quarter compared to Rs 1,38,944 crore during the end of Q1. The bank said that it has grown its retail and agri segments and rebalanced the advance balance by consciously reducing the stressed sector in the corporate segment.

CASA of the bank improved to 42.57 per cent during the period under review compared to 40.26 per cent during the same time last financial year. Total CASA also increased to Rs 106,806 crore as against Rs 92,436 crore during the second quarter of 2020-21. Provision Coverage Ratio improved to 92 per cent as against 89.36 per cent in Q2FY21.

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RBI removes PCA framework from this PSU bank

  

The Reserve Bank of India on September 29 announced that it has lifted the curbs on Indian Overseas Bank and taken the bank out of the Prompt Corrective Action (PCA) framework, the central bank said in a release.

The board for financial supervision reviewed the performance of Indian Overseas Bank and noted that as per its published results for year ended March 31, 2021, the bank is not in the breach of PCA parameters, RBI said.

Further the bank has provided a written commitment that it would commitment that it would comply with the norms of minimum regulatory capital norms, net NPA and leverage ratio on an ongoing basis, RBI said.

Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring, RBI said.

RBI had brought Indian Overseas Bank under the PCA framework in October 2015. The bank had been requesting to the central bank to take it out of the PCA framework.

The bank's MD & CEO, Partha Pratim Sengupta had said post the Q4FY21 results that, “As far as all the PCA ratios are concerned, we have been achieving it in the past quarters also, barring one ratio, which is the leverage ratio. With the ploughing back of the profits and also with the infusion of funds by the government of India, we are very, very comfortable in all the parameters.”

Indian Overseas Bank had received Rs 4,100 crore from the government.

Under the PCA norms, the central bank imposes business restrictions on banks having weak financial metrics and the restrictions are decided on a case to case basis.

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Indian Overseas Bank(IOB) Q1 results: Net profit doubles as provisions decline

 

Chennai-based public sector lender Indian Overseas Bank (IOB) on Tuesday reported a 170% jump in its net profit to `327 crore for the first quarter of this fiscal as compared to Rs 121 crore in the corresponding quarter last fiscal.

The bank has attributed the growth in the bottom line to an increase in other income and a robust recovery during the quarter. The total income of the bank stood at Rs 5,155 crore as against Rs 5,234 crore in the corresponding period last year.

Speaking to media persons in a virtual interaction, Partha Pratim Sengupta, MD & CEO, IOB, said after making losses for 18 quarters, the bank has started making profits since the March 2020 quarter, and this quarter it added around Rs 200 crore to the profit. “We have been making profits and have fulfilled all the requirements to come out of the prompt corrective action. The regulator is examining as we have furnished all the details,” he said, adding that it is now for the RBI to take a call on it.

Interest income of the bank stood at Rs 4,063 crore for the quarter as against Rs 4,302 crore, while non-interest income was at Rs 1,092 crore as compared to Rs 932 crore due to increase in other income.

He said the bank could make a decent recovery in the first quarter despite the impact of the second wave of the pandemic. “While fresh slippage was at Rs 1,158 crore, cash recovery was itself to the tune of Rs 1,130 crore, offsetting the impact of bad assets,” he said.

IOB’s gross NPAs stood at Rs 15,952 crore, with a ratio of 11.48% as against 18,291 crore with a ratio of 13.90%. It achieved a total reduction in NPAs of Rs 1,616 crore in Q1FY22 as against the NPA reduction of Rs 1,969 crore.

Net NPAs were at Rs 3,998 crore, with a ratio of 3.15% as against Rs 6,081 crore, with a ratio of 5.10%, a decline of Rs 2,083 crore in absolute terms. Provision coverage ratio improved to 91.36% from 87.97%.

Sengupta said the bank has approval to raise Rs 2,000 crore as tier I capital, Rs 1,000 crore as tier II bonds and will look to raise funds as and when required. “As of now, we are comfortably capitalised with CRAR of 15.48%. First we will try to raise the tier II bonds by November, and later on will decide when to go for tier I funds,” he said.

On the advances growth, he said the bank will go for an incremental increase of Rs 14,000 crore to Rs 15,000 crore, over the last year. “While retail, agri and MSME sector will be our focus area, corporate book needs to be also grown. Though we will be cautious, we will go for rated corporate entities,” he said.

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