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Moody's upgrades ratings of four Indian banks

New Delhi, November 17: Close on the heels of India's sovereign rating upgrade, Moody's has upgraded four Indian banks to Baa2 from Baa3 - the same level as the Indian government. The four lenders are State Bank of India, HDFC Bank, Exim Bank and Indian Railway Finance Corporation.
Bad loans in banks could trigger downgrade

The Times of India Published on November 18, 2017

Mumbai, November 17: Bad loans in banks could be the weak spot in India's economy and could risk triggering a future downgrade. Besides the standard risks to the economy arising out of fiscal slippage and from global volatility, Moody's has cited health of the banking system as vulnerability for the economy.

According to Moody's, recapitalisation of PSU banks and proactive steps to resolve bad loans are beginning to address a key weakness in India's sovereign credit profile.

SBI chairman Rajnish Kumar said that large NPA accounts referred to the National Company Law Tribunal in July would come up for resolution in January 2018.

Bankers, however, say that since these are the first transactions the bankruptcy process is likely to get tested. Most bankers feel that bad loans will start declining only from the next financial year.

Banks are also reluctant to take more defaulters to the National Company Law Tribunal as regulations require that they make 50% provisions on loans in respect of which bankruptcy proceedings have been initiated.

There have been reports that the government may force banks to initiate insolvency proceedings against more borrowers.

Besides having to make high provisions, if banks do not get acceptable bids during the insolvency process, they would be required to initiate liquidation proceedings. If this happens banks might be required to make massive write-down of their loans.

The third uncertainty is over bank mergers. According to market players, investors are reluctant to make big bets on bank stocks over fears that government may decide to merge weak banks with some strong banks.

Given that public sector banks do not have the flexibility to clean up their books there is fear that merger with a weak bank would hurt the stronger bank.

"While the capital injection will modestly increase the government's debt burden in the near term (by about 0.8% of GDP over two years), it should enable banks to move forward with the resolution of NPLs through comprehensive write-downs of impaired loans and increase lending gradually," Moody's said.

According to Care Ratings, gross NPAs of 36 top banks have increased from Rs 2.94 lakh crore in March 2015 to Rs 3.32 lakh crore in Sept 2015 and then sharply to Rs 8.38 lakh crore in Sept 2017.

"The next two quarters would be crucial from the point of view of NPAs as it is still not clear whether or not they have been fully recognized and provided for. Private Banks too have witnessed an increase in their NPA ratios and the final picture will emerge by March 2018," said Madan Sabnavis, chief economist, Care ratings in a report on Friday.

According to Bloomberg data, Indian companies and banks have sold $12.5 billion of foreign-currency bonds so far this year with a fourth of them coming from banks.

Bankers said that the upgrade would also draw more investors into these bonds as the earlier rating was the lowest above-investment grade. Many pension funds, which are mandated to invest in only investment-grade securities, avoid bonds that are at the edge of investment grade.

SBI chief economist Soumya Kanti Ghosh said, "The ratings upgrade will have a profound impact on bond yields and lift the morose sentiments in the bond market, apart from impacting the movements in the domestic currency. The greatest irony is that despite India's improved fundamentals, bond yields have moved in a contrarian direction. For example, if we compare India's bond yield from the levels of 2008, it is highest among select economies. India's bond yields are around 170 bps higher than the 2008 level."
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Those from Engineering or IT profession ....... Please give your Opinion on it ......

An Eye - Opening and Thought Provoking Message for All Engineering Aspirants!!

Just read a great eye opening article a few days back in one of the online news articles-- Sharing a glimpse for your eyes too!!
It says----

Learning to Swim in Difficult times!!

75% engineering colleges will shutdown.

Parents need to change approach towards education.
Fact based article , please share with each student and parent.

USA produces around 1 lakh engineers per year for a $ 16 Trillion economy.
India produces 15 lakhs engineers for a $ 2 Trillion economy.

If there are so many engineers, there must be enough demand to pull them in.
But it is not there. The earlier mass recruiting sector was manufacturing.
It used to recruit from the core branches like civil, electrical and mechanical.
But, manufacturing is stagnant at just 17% of the GDP.
So the core branch placements have become difficult.

The new mass recruiter was the IT sector.
It grew from scratch to almost 5% of the GDP in 25 years.
Employed millions of engineers.
Now, IT is also saturating.
Is our Talent Pool getting Redundant!!

If you look at the sectoral composition of Indian economy, most of the sector do not need engineers.
Tourism is 10% of the GDP, does not require engineers.
Financial sector, trade, hotels and restaurants do not require engineers.
Requirement in health, education, agriculture is almost negligible.

More than 50% of the GDP has no role for engineers.
Still most of us are becoming engineers.
The current situation is not sustainable.

So the demand is less while the supply is high.
Over and above this, skill level of an average engineer is poor. I say its non-existent.
Leave the top 100–200 colleges. And you will find that a fresh engineer has no idea of what s/he has studies.
Ask a fresh mechanical engineer, can s/he design a simple frame?

Today the situation is that most engineers are working in a field
that has no connection to what they have studied in the college.
This is a waste of resources.

Engineering degree does not come cheap. It costs about 5 to 10 lakhs.
For poor parents, its a huge burden.
When their son is not able to secure a job, they are devastated.

For the nation, you can calculate the loss.
Leave around 1 lakh engineers that NASSCOM says are employable.
The rest 14 lakhs have each wasted 10 lakhs of fees.
That totals to around $ 20 Billion. Almost equal to the Government’s spending on healthcare.
Over this, there is loss of human capital.

Parents and students need to think thrice before taking admission to engineering colleges.


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Those from Engineering or IT profession ....... Please give your Opinion on it ......

Its true.. sorry to say but when I visited our Indian Silicon valley Bengaluru for software development for our company, I was surprised to find that most of the so called software engineers there did not know any programming. On enquiring about delays, some confided that they were looking for "software testing" jobs but put in development/programming jobs. Then I said testing is one step ahead of programming, how can you test if you cannot write the program ? They said we are being billed to the client, and will continue till we find something better (job).. such is the state of our programming and IT sector. :eek::eek::eek:


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Hi friends,
Hope everyone enjoying your trades.
If any one using GDFL data in ami please help .I want last 2 days 1st bar values(OHLC) of 10 tf chart......means 1st bar from 9.15 to 9.25 ...Thanks

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