Banking news update

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At variance with RBI’s monetary policy stance, CEA says rates too high: Making a strong case for reduction of policy rates by RBI, Chief Economic Advisor (CEA) Mr. Arvind Subramanian has said the real interest rates are “whoppingly” high and have made it difficult for corporates to deal with the problem of high debt. (FE)

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Member of RBI advisory panel sees scope for another 125 – bps rate cut: RBI still has scope to cut interest rates by more than a percentage point given the slowdown in inflation, according to one of its advisers. (FE)

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In bid to empower ARCs, finmin pushes for uniform reserve price on bad assets: With the sale of a large number of non-performing assets (NPA) stuck due to banks being unwilling to offer them to asset reconstruction companies (ARC) at discounted prices, the government has asked the lenders to consider having a standardised norm on reserve / floor price for these bad assets during auctions. (FE)

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Shaken by Libor scam, India to tweak key rate in July: A month from now, Indian banks and bond houses will start dealing with a new Mibor that regulators believe would be less prone to bias or manipulation. Every day, banks and corporates cut deals of about Rs 10,000 crore based on Mibor to hedge risks and bet on interest rate. At present, the rate is computed every morning after a poll of top banks and primary dealers. From mid-July, Mibor would no longer be a polled rate.  (ET)

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Low-cost home plan, higher MSP for paddy, pulses top Cabinet decisions: The Centre took a number of key decisions on Wednesday, including raising the minimum support price for a range of pulses and approving a ‘Housing for all by 2022’ scheme. (BL)

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Paytm to launch virtual 16 digit Rupay card, to up currency of its digital wallet: In a bid to increase the currency of its digital money, leading payments and e-commerce company Paytm is planning to launch a virtual card in partnership with RuPay and a bunch of national banks. The virtual card, which will have a 16-digit number, just like a physical debit or credit card, will expand Paytm's reach significantly from 35,000 merchants currently using its digital wallet to 1.5 million merchants, who accept all kinds of electronic payments through plastic cards. (BS)

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Bandhan gets final RBI nod, to start bank on August 23: After more than a decade, a new private sector lender will start operations from August 23. The Kolkata-based microfinancier, Bandhan Financial Services, received the final approval from RBI. (BS)

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SBI eyes 12% credit growth on mining turnaround: SBI, the country's biggest lender, is targeting 12% growth in credit in the state this fiscal, banking on a turnaround in the mining sector which it expects to happen by the third quarter. (BS)

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Yes Bank promoters should jointly nominate directors, rules court: The Bombay High Court has ruled that the two promoters of Yes Bank Ltd — Rana Kapoor and Madhu Kapur — should jointly nominate three directors on the board of the bank. The court however, clarified that Kapur’s daughter Shagun Gogia Kapur cannot inherit the right to be on the board of Yes Bank. (BL)

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IRDAI moots radical changes in health insurance: IRDAI is planning massive changes in health insurance, which include more incentives for healthy policy holders and a level playing field for life and non-life insurers, among others. (BS)

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NPS becomes more attractive: In the 2015-16 Budget, the Centre granted additional tax deduction of Rs. 50,000 to contributions made to NPS. Now, it has made this pension scheme more attractive. (BL)