Banking

Mergers

Details of Public Sector Banks (PSBs) amalgamated/merged in last five years are as
under:—
(i) State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Bhartiya Mahila Bank with State Bank of India, with effect from 1.4.2017;
(ii) Vijaya Bank and Dena Bank with Bank of Baroda, with effect from 1.4.2019; and
(iii) Oriental Bank of Commerce and United Bank of India with Punjab National Bank, Andhra Bank and Corporation Bank with Union Bank of India, Syndicate Bank with Canara Bank, and Allahabad Bank with Indian Bank, with effect from 1.4.2020.

Bank Board Bureau

With a view to improve the Governance of Public Sector Banks (PSBs), the Government had decided to set up an autonomous Banks Board Bureau. The Bureau will recommend for selection of heads of Public Sector Banks and help Banks in developing strategies and capital raising plans. The Banks Board Bureau has three ex-officio members and three expert members in addition to Chairman. Except ex-officio members, all the Members and Chairman are part time. The BBB has started functioning from 01.04.2016.

Capital for Public Sector Banks (PSBs)

Under the Indradhanush Plan, action related to (i) Appointment (ii) Bank Board Bureau (iii) Capitalization (iv) De-stressing PSBs (v) Empowerment (vi) Framework of Accountability (vii) Governance Reforms has been initiated by the Government.

Further, the Government of India had proposed to make available Rs.70,000 crore out of budgetary allocations for four years. The Government has infused a sum of Rs. 25,000 crore in 19 PSBs during financial year 2015-16, and in FY 2016-17, Rs. 22,915 crore was allocated to 13 PSBs. An amount of Rs. 10,000 crore has been proposed for Re-capitalization of PSBs for the Financial Year 2017-18.

Further, the Government has allowed all PSBs to raise capital from Public markets through Follow-on Public Offer (FPO) based on specific criteria.

Merger of SBI Associates with State Bank of India (SBI)

Government has approved the proposal for merger of (i) State Bank of Bikaner & Jaipur (SBBJ), (ii) State Bank of Hyderabad (SBH), (iii) State Bank of Mysore (SBM), (iv) State Bank of Patiala (SBP) and (v) State Bank of Travancore (SBT) with State Bank of India (SBI) and the same has been notified in the Gazette of India on 22.02.2017. The merger has come in effect from 1st April, 2017. Subsequent to merger, the existing customers of Subsidiary Banks will have access to SBI’s global network which spans across all the time zones.

Merger of Bhartiya Mahila Bank (BMB) with State Bank of India (SBI)

Government has approved the proposal for merger of Bhartiya Mahila Bank (BMB) with SBI and the same has been notified in the Gazette of India on 20.03.2017. The merger has come into effect from 1st April, 2017.

BRICS Interbank Co-operation Mechanism

EXIM Bank is the nominated member development bank from India under the BRICS Interbank Co-operation Mechanism. The Bank entered into a multilateral general co-operation agreement with the New Development Bank, along with other development banks of the BRICS nations. India was the Chairman of the BRICS Forum for 2016. Having assumed the Presidency of the BRICS Interbank Co-operation Mechanism, Exim Bank organized a series of events and seminars in 2016. The Annual Meeting of the BRICS Interbank Cooperation Mechanism, and the Annual Financial Forum were organised in Goa on October 15, 2016.

Conversion of Kisan Credit Card (KCC) into RuPay KCCs

The Government has been closely monitoring the progress of conversion of Kisan Credit Cards (KCCs) to RuPay ATM cum Debit Kisan Credit Cards (RKCCs). NABARD will coordinate the conversion of operative/live KCCs into RKCCs by Cooperative Banks and Regional Rural Banks (RRBs) in a mission mode.

Producer’s Development and Upliftment (PRODUCE)

In compliance to the announcement made in the Union Budget, 2014-15, an amount of Rs. 200 crore has been released to NABARD. The Scheme is under implementation by NABARD, under which 800 Producers Organizations (POs) have to be promoted during 2014-15 and 1,200 POs during 2015-16. Against the target for forming 2,000 Farmers Producers Organisations (FPOs), NABARD has sanctioned 2,172 FPOs as on 31st December, 2016.

The Negotiable Instruments (Amendment) Act, 2015

The Negotiable Instruments (Amendment) Act, 2015 has been notified in the Gazette of India, Extraordinary on 29th December, 2015. The provisions of this Amendment Act came into force on the 15th Day of June, 2015. The Amendment Act is focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the Negotiable Instruments Act (NI Act). The Amendment Act 29.12.2015 facilitates filing of cases only in a court within whose local jurisdiction the bank branch of the payee, where the payee delivers the cheque for payment through his account, is situated, except in case of bearer cheques, which are presented to the branch of the drawee bank and in that case the local Court of that branch would get jurisdiction. The Amendment Act, provides for retrospective validation for the new scheme of determining the jurisdiction of a court to try a case under section 138 of the N.I. Act. The Amendment Act, also mandate centralization of cases against the same drawer. The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.

The Payment and Settlement Systems (Amendment) Act, 2015

The Payment and Settlement Systems (Amendment) Act, 2015 was enacted by Parliament and received the assent of President on 13.05.2015. The Amendment Act, inter-alia, sought to introduce reforms to increase transparency and stability of Indian financial markets in line with globally accepted norms. The Payment and Settlement Systems Act, 2007 was enacted with a view to providing a sound legal basis for the regulation and supervision of payment systems in India by Reserve Bank of India.

Regional Rural Banks (Amendments) Act, 2015

Regional Rural Banks (RRBs) were established under Regional Rural Banks Act, 1976 (the RRB Act) to create an alternative channel to the cooperative credit structure and to ensure sufficient institutional credit for the rural and agriculture sector. RRBs are jointly owned by Government of India, the concerned State Government and Sponsor Banks. In view of the growing role of RRBs in extending banking services in rural areas, a need to amend the Regional Rural Banks Act, 1976 was felt.

Card acceptance infrastructure

To augment card acceptance infrastructure for use of debit cards, a major drive was undertaken between December 2016 and March 2017, resulting in an increase in the number of card acceptance terminals at Point of Sale (PoS) by an additional 12.54 lakh, up from 15.19 lakh as on 30.11.2016. Further, to improve such infrastructure in villages, 2.04 lakh PoS terminals have been sanctioned from the Financial Inclusion Fund by NABARD.

BIFR/AAIFR

The Gazette notification regarding bringing into force the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 under section 1(2) of the Act and provisions regarding abetment of cases with BIFR/AAIFR under section 4(b) of the Act have been issued, dated 25.11.2016. Both the notifications come into force with effect from 01.12.2016 resulting into winding up of BIFR and AAIFR and abetment of cases. In order to maintain the continuity, the winding up of BIFR/AAIFR is to coincide with constitution of the National Company Law Tribunal (NCLT)/ National Company Law Appellant Tribunal (NCLAT), as per the provisions of companies (second Amendment) Act, 2002.

Debt Recovery Tribunals

The Recovery of Debts Due to Banks and Financial Institutions (RDDB & FI) Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002 were amended by the Enforcement of Security Interest and Recovery of Debts Laws & Miscellaneous Provisions (Amendment) Act, 2016 to rationalize the procedures and timelines followed by these Tribunals for expeditious adjudication and speedier resolution of defaulted loans in time bound manner.