Prom 25 PDF

Mr PA N KU A J A R Mr R Mr NK M A...

Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U Mr P A N K U M K A J R A Mr ReferenceR study r A N U M A J A M material for P promotion r K exercise of N K U M A J officers R2025-26 M A U K N K M A J P r K M r A U K A A R M P r K N M A J A R M P A K U K M A J R M r A N U KU K A P K M r P A N K U M K A J A R Mr R r A N U M A J A M P rK N K U M A J R M A U K N K M A J P r K M r A U K A A R M P r K N M A J A R M P A K U K M A J R M r A N U K U K A J P r K r A N U M A A R M M P r K N K M J A R M P A K U K A M J R r A N U KU KA A M P K M r P A N M KU Academy Baroda K A J A R Mr R r A N U M A J M K U MA A J A R P M rK A N K U r K N K Bank M of Baroda J R P r M P A K U K A A M R r A N U M A J A M ForJ internal circulationP onlyr K N K M A R M A U r KU N K M A A J R P r K M Do Not PrintPunless U A extremelyKrequired. Save Paper, K Save TreesMand A preserve J M R r M Environment. A N U A A P K K U M K A J A R M r P AN K U K Mr P A N K U M K A J A R Mr R M rthe learning efforts A Nof the promotionUaspirants. Topics AJ M A This booklet is to supplement J P r K N K U M incorporated R A in nature andAApex Academy advises are indicative M the readersPtoArefer KU K K M J r Mr to AN SOPs, Circulars, Book of Instructions, P K U Master Circulars, K A Policy guidelines, M A R etc. for J M updated information. R M r A N U A This M A J R P exam withinr Kthe Bank (basedNonK A booklet is focusing mainly on the promotion U trends) andKshould not be considered A M manual. Employees P A K U K previous N themselvesUby Mr are supposedPtoAupdate K M as an K J instruction Rand latest Acirculars, guidelines A Mr reading Bank’s Nnews. M J bankingA R other general industry/ Mr awareness related P A rK U N K A U M A J R M A K N K M A J P M r A U K A A R P K M A R Mr P AN K U UM AJ R M r K K M A J Mr P AN KU KA r N M AR J M P A U K A A R K Mr P AN K UM R Mr Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U Mr P A N K U M K A J R A Mr R AWARENESSr ABOUT EASE-PSB REFORM A N AGENDA M U A J A M P r K N K U M A J R M A U K N K M A J P r K M r A U K A A R M OVERVIEW P r K N M A J R A decade, Public Sector M A P excessive build-up U K of Assets K M Over the last A J Banks (PSBs) witnessed R r N stress in their loan M treatment for P A U K Uof RBI guidelines K portfolio. Much of the stress remained A hidden in the form of Standard Restructured (SRA) as a K Mr restructured ANas standard accounts M certain conditions. J A With the recognition Rof the stress Mr result issued in January 2009 1 granting special regulatory classifying P K Uunder K A M Multiple drivers AJ accounts since 2015, theadverse impact of therhidden stress on key financials R A N became manifest. U A attributed by various M Pfrauds, economic slowdown K andalia,misconduct K M have been A J observers for the increase R in stress, r including, M inter N aggressive A in U K U cases. lending, K lack ofrobust lending practices, wilful A defaults, J P r K N M Mr A R M certain P A K U K A J R N rthe Government hasAimplemented U M A To address A NPAs transparently, the problem, since M 2015, P a K comprehensive r 4R’s PSBs and Reforms inNthe strategyK M A J ResolutionandRrecovery, Recapitalising U ecosystem and KPSBs. The firstthree R’sAare aimed at cleaning of Recognising M A U K financial M J the balance sheetsP of banks. r K Mr The reforms are aimed ANat systemic change excessive stressPis minimised. The reforms K Uaddress to address root causes K A sothat the risk of R A recurrence of M — asprudential J M R M r A N and SMART U key areas in PSBs — viz., governance, A A and accountability lending, risk management, technology-driven J checks P and controls r K banking well N K as M R A U KA recognition ofMhidden KaUresult of the 4R’sNstrategy, A stress as NPAJhasMbeen largely completed, transparency in the wider financial ecosystem P the K r As A was altered,Ksignificant M creditor-debtor relationship P A U recovery hasKbeen effected and significantly R A higher J Mr R up against r A N M Uhealthier. Through A A provisions built and J M institution of checks andPcontrols, the reforms NPAs. With this, PSB balance-sheets K are becoming r N K M systemic improvements U for CLEAN &KSMART A banking. A R M are creating a A strong K U K foundation N M J P r Mr As P A in January 2018,Kthe a part of the reforms, U Government and PSBs acommon PSB Reforms Agenda for rEnhanced Access & Service K A jointly committed toAand N Excellence (EASE), R launched M comprising 30 AJ M R A across six themes. M A P Index. U K Agenda has beenK M Action Points tracked through aAfirst J Progress of PSBs against R r the PSB Reforms EASE M A N U U rigorously K performance onN140 A K metrics againstMrespective benchmarks of its kind EASE Reforms The EASE J Reforms Index P for measures r K r PSB M This report is intended A 3 U A and offers a mechanism R K on progress madeMbyAPSBs on EASE J M continuous P improvement through r Kannual publications series transparent reporting on forward-looking N PSB reform priorities. A R annual publications, as the first of an M quarterly updatesPon A the EASE ReformsKIndex U will be publishedKA reforms. Between Mhealthy competition A Jand learning among R M r areas whereAPSBs N U U to foster K to sustainmomentum K A PSBs. The report also identifies P K Mr THE 4R’s STRATEGY N to achieve betterUresults. M J R Mr need P A K K A A R TO ENABLE CLEAN r AND SMART A N BANKING U M A J A M P r K N K M J R KU Recognition U K A A M P A r K N M A J R r M A NPAs recognised transparently P K U K A M Nexcessive stress in loan M J As a resultAofR Mr that led to build-up A U P of PSBs had risenr Kto 12.0 percent ofgross N K A J the aforementioned factors of portfolios of banks since M R A U FY09, by the end of FY15, A KU Out of this,N7.0Kpercent of gross advances A were SRAs, which total stressed assets Mremained hidden. P K r M J A assets as NPAAbyRPSBs and Mr advances. M As a result of AQR, P A subsequent transparent K U recognition of stressed K J withdrawal ofR r A Nloans, SRAs of PSBs U M decreased from the A A M forbearance inasset classification P by the end of FY15r toK ofrestructured N K U M A J of gross advances) peak of ₹3.93 lakh crore (7.0 percent of gross advances)A byRthe end of Q3FY19.M A r K of PSBs increased ₹0.34 N Kfrom 5.0 percent to M lakh crore (0.5 percent J 4 Over the same period, R P gross M NPAs P A K U A 13.7 percent of gross advances. K A R r AN U M A M P r K K UM Provision bolstered to meet K AJ expected losses A R M AN M J Mr P r KU N KA M AR J M P A U K A A R K Mr P AN K UM R Mr Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U Mr Alongside recognition,PA N K MU K A J R A losses.PSBs J Mr R of about ₹8.12 PSBs bolstered r N M A began in FY15KtillUtheend of Q3FY19 K provision against NPAs to absorb potential future. A have made A provision Mlakh crore since recognition P r 4 N UMoff accounts) A J theProvision Coverage Ratio (PCR) of R M A U A K As a result, PSBs (inclusive of provisionheld against technically K hasK N of FY15to 68.9 percent M J P r Mr 46.0 percent by P R written- registered substantial improvement, from theA end K U by the end of Q3FY19. K A A M N M J ReducingAstress R in bank loan portfolios Mr P A r K U N K A M A J R M A U KUstress recognitionNlargely K completed, MAsignificant resolution P & K r With M Bankruptcy CodeP(IBC) A andreduced slippages, U K to ₹8.64GNPAs A J R Ahave declined J under the Insolvency K operations of PSBs Mr Rby r A N in global U M GNPA A from ₹8.96 lakh A crore by the end Mof FY18 P lakh crore by the end of r K Q3FY19. Domestic N K M ratio reduced U points in Q3FY19, J R Aagainst RBI projectionAof 50 basis point YOYMreduction byH1FY20P.A U K 70 basis N K M into NPA infuture Jas well, which coupled 5 r K Mr Further, P A there are indications K U ofreduced slippage N K A M A R with the J M R in future are indicated Mr by reductionPin A U A accelerating trend in resolution of NPAs may be expected to sustain thedeclining trend in NPAs. Reduced A J r Kto June 2017 and nearN K M slippages fresh slippage in H1FY19 by 25 percent over U A A R M A KU J. rolling basisRfromP 0.9 in thatin H1FY18, 47 percent reduction in SMA 1&2 in December 2018 as compared r K of the ratio ofNcredit K rating upgradesMto downgrades on 12-month r A doubling H1FY17 to 1.7 to A H1FY19 as per a leading U M In order to furtherPreduce NPAs, banksr Kare putting in place Board credit rating agency’s K committee-approved 6 data Aroadmaps and J M R root cause analyses N A systemic deficiencies. U M A A Mto identify and address P K K M J r AN arecarrying out U K A A R M P K U K Mr Resolution PAN K U M K A J A R Mr R r A N U M A J M K U MA A J A R P M rK A N K U r K N Krecovery M J R P r M Record growth in NPA P A K U K A A M R r framework andArecovery N processes within U MPSBs are leading AJ Reforms in the insolvency and M A NPA resolutionJ and recovery. Historically, bankruptcy P NPA resolutionrinKIndia was fraught with N K M U due to the corporate to large-scale A R A Acontrol of its affairs.JThisMhas been addressedPthrough K U r K challenges N K debtor remaining M in Rprovided a r M enactment P A of IBC, which has put creditors U K K A process. IBC has A in control of the resolution also M R comprehensiveand time-bound framework lawsin other countriesM r for resolution A andNincorporated a number U Mof best practices AJ from similarA J. P r K N K M R A U KU reforms KAresolution in creditor-debtorA MPSBs have focussed P K recovery from stressedJaccounts. In many PSBs, Mr Alongside the change effected relationship through IBC, upon r N in andM R do not M in respect of high-value internal P A stressed accounts to intensify K Uresided across differentK Abranches. BranchesAtypically action R r and also face constraints A N in timely decision-making U M as they A J A higher-level approvals. havededicated M and specialised resources Over the past P K EASE Agenda, year, under the PSBr Reforms N K M J R A A KU have to secure K U K A M P r J banks have effected a number of 7reforms: r A N U MStressed Asset Management A VerticalsA R with M M  All 21 P PSBs have K set up dedicated r N K M (SAMVs) J R Apercent of large-value M overallcontrol in respect of large-value 8 A NPA accounts. P U Kby December 2018,NasK A U M  89 A J NPA cases stood transferred R to SAMVs M r A U K compared to 35 K percent in March 2018. A P K Mr  90 percentAofNSMA 1&2 cases were P K U K J Munder monitoring Aby SAMVs by December A R 2018, as Mr R compared to 15 percent in March A Mr checking of all PNPA 2018. AN cases above ₹50K UM crore from the angle ofK AJ M PSBs have J with action to Rexpedite recovery and also taken up time- bound A M A N rdeter such acts, thereby U wilful K K credit culture. M default and fraud, coupled A They have filed 9,363Jsuits and registered 2,571 FIRsP r contributing N to a responsible M defaulters in all NPA A U R against Alimitsfor recovery andAaction against wilful P defaulters. Banks are also K defining step-specific timeK M A R cases havingM r outstanding above₹50 amount P AN crore. KU Credit MInformation CompaniesJalso have disclosed 28,165 suit- filed casesron their website which is U K R recovery across A credit default andAexpediting M the banking system. K M J AN acting as a deterrent against Mr P r KU N KA M AR J M P A U K A A R K Mr P AN K UM R Mr Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U A N Mr Enabled by the Pchange in creditor-debtor K M Urelationship and reforms K AJ R A Mr r R from April 2015 tillMDecember 2018, including A N in banks, PSBs U M have recovered A J ₹2.87 lakhA till Q3,M crore J Pin the previous year. record recovery of r K ₹98,493 crore in N FY19 K U A which is 100 percent growth K A over the same period R M P A K U r K N M A J R r M P A K U K A M R r A N U M A J A M P r K N K M A J R M A U KU K A P K Recapitalisation r M PSB balance-sheets P N A strengthened K U M K A J A R Mr R r A N U M A J A M initiated by the P r Kaccounts the capital baseNof K M Significant U A recapitalisation has Jabeen R M Government to strengthen A U K PSBs, which was depleted N K as result of M A transparent recognition J of stressed asPNPAs. r K Mr years. The results The Government P Aof AQR in December announced Indradhanush K U2015 revealed higherKthan plan in August r of recapitalisation 2015 to infuse ₹70,000 Namounting to ₹2,11,000 crore M overR A anticipatedNPAs,Anecessitatingfour financial J M crore inOctober A 10 R M A A the remainingJ outlay of ₹18,139 crorePunder Indradhanushr K further announcement by theGovernment U K 2017, M plan and mobilisationNof U including K A A R M P A by KU K about ₹58,000 crore from markets by PSBs. M The envisaged capital J infusion has since been enhanced r Mr ₹41,000 AN 2019. crore in January P K U K A A R M r lakh crore in PSBs,Afrom N FY15 until February M2019. Since FY15, AJ R The Government has infused nearly ₹2.5 Amobilised nearly ₹66,000 M P equity capitalcompletedand K U through monetisation ofK M PSBs have assets. Thus, totalA J crore by raising fresh of ₹3.14R lakh crore has been M r in PSBs fromA N U U non-core K recapitalisation K February2019 andNthe remaining committed A P FY15 K Mr of FY19. M amount will take the A Jsum to ₹3.19 lakh crore R Mr until by the end P A K U K A R r A N U M PSBs are AJ Ato be better positioned With the capital M infusion by the Government and P improvement in Kof improved investor their financial performance, r N K U expectedM J to raise capitalRfrom markets as a result A valuation gains M A U K N K M A for all shareholders. J P r K Mr attractiveness, with corresponding A U K A A R M P r K N M AJ A R M P A K U K Reforms M A J R M r A N U r KU N K banking M A A J R P r K M PA Driving CLEAN & SMART K U K A M Along with R recognition, resolution rand recapitalisation, A N U M was A J A M P banking. r reforming banks K comprehensively N K M imperativefor transforming PSBs U A J to drive CLEAN &RSMART M A U K Government introduced K A P K Mr bring N accountability M J of2.26 R (“shell”) Mr a number of system-wide reforms as part the 4R’s strategy. In order to A The transparencyA in U A companies wereP and K r freezing of bank accounts K the larger financial system, lakh inoperative N of an additional 1.12 M J R A also operationalised M identified for deregistration and their A bank accounts were P Regulatory Authority frozen U by the end of FY18. K to regulate qualityNof K A J r 11 M Theprocess has continued in FY19 with lakh companies. Uandactivities of compliance The Government K A professionals. A R National Financial M P A KU K M J r Mr For strengtheningPrisk ANmanagement in PSBs A PSBs were advised R to collect audit K U and deterring wilfulKdefault, A M R rto check wilful default A Nin large NPA accounts. U M Further, PSB AJ Aempowered to request passport details of borrowers and12 M P circulars. The Government 13 r K also introduced N K CEOswereM A J issuance of look-out R Act, 2018, for M A U KU enacted asNtheK Fugitive A P action K M J Mr legislation, Economic Offenders effective and deterrent r KAwhich captures granular R M With the rollout ofPGST, A KU A invoice-level J against economicoffenders who remain outside the jurisdiction of Indian courts to avoid prosecution. R a centralisedrGST databank was created, A N M Uon the basis of userKA data alongAwith triangulation mechanisms M and which isPaccessible K N MThis will enable banks Jto access better quality inraddition to the information electronically U A A R independent dataM P A K by borrowersNasKpart of loan proposals, consent. Mlinkedthereby mitigatingJ r supplied M information companies, A U K A A Rfrom credit the risk of misrepresentation and fraud. For e.g., P psbloansin59minutes.com K has various data points — viz., credit score M time takenA R Mforr loans. income-tax data, GST data, etc. and has P AN enabled banksKtoUdrastically reduce the U M J forin-principle approvals A Rmultiple steps haveM r K Along with initiatives forKcleaning N inter alia, bifurcation A M of the CMD position up the system, J into those of non-executive been taken to improve PSB M r A governance. These include, U K A R P M rK AN M A J P U K A A R K Mr P AN K UM R Mr Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U A N Mr Chairman (NEC)Pand Managing Director K U M K AJ R A Directors J Mr RBanks Board Bureau r N M U widening of theKA Mthat has a majorityPofAnon-governmentrmembers, (MD) & CEO; selection of NECs and Whole-Time (WTDs)byA K the M for selection of bank A J R M A N U U talent pool K Government alsoNKtook multiple stepsMto usher SMART Abanking,A MDs and performance-based extension in the terms of office of WTDs. J including theRcreation of P r K r The M infrastructuresupporting A U K A (for e.g., J M online inter-R P digital banking r K UPI, AePS, e-KYC, and payments, N last-mile access M to banking services roll-out of Jan- A A operable BCs / Bank Mitras, M P A e-Sign, digital K U locker), K M Dhan – Aadhaar A J – Mobile (JAM) trinity, enabling Direct R Benefit Transfers and M r enabling A N industry-wide U KU K A P K Mr digital platforms for digital lending, viz., psbloansin59minutes.com, TReDS platform and r A N U M A J R A UdyamiMitra.com. M P r K N K M J EnablingA R Mthrough EASE Reforms A U K A U M transformative A J reforms R P Index M rK A N U K The recommendations N K made in PSB Manthan, A M of PSBs, andAGovernment organised in November J 2017, including P around 250 r K r A M the basis for theformulation Whole-time Directors (WTDs)and senior executives U K A R formed representatives M P K r of transformation viz., NCustomer Responsiveness, M J ResponsibleKA of a common PSBReforms Agenda to drive Enhanced Access and Service A R Excellence (EASE) across six themes M P A U K and Digitalisation Banking,M A J Credit Off-take, UdyamiMitra for MSMEs, R M Deepening Financial Inclusion r A N U K U K A J P r K r and Developing Personnel A N for Brand PSB. U M A R A through a J M M PSB Reforms EASE P r K Board reviews, Agenda aims to institutionalise CLEAN K N & SMART banking in PSBs M A Board- approvedRandbenchmarked measurement strategy and M quarterly P A through the EASE which are enabled K UReforms Index. PSBKA by a comprehensive, U M EASE Agenda envisaged independent K A J making the managementof R performance A M P AN rfor execution of Reforms K U K Towards thisNobjective, 20 percent M Reforms accountable Mr reporting to the bank’s Agenda. P A K U weight in the annual J K A performance of the Agenda asA R of WTDs appraisal Mr done by the R r CEO has been earmarked N for implementation A U M per evaluation A J M K MAcommittee comprising K bank’s Board. J select WTDs of PSBs, R Punder the aegis ofrIndian N U A steering A K and implementation A M P A Banks’ Association K U r K ismonitoring theNdesign (IBA), M of EASE Reforms Index. A J DesignEASE R Index has and implementation has r M been finalised after P A K U K A M followed a rigorous R process with intensive r involvement of senior A N PSB executives. U M12 nodal officer AJ Reforms AAs part of this process, M extensive deliberations in 6 steering committee P have meetings and r K to track and analyse N K U M workshops. A J over 250 objective metrics R been defined M A U progress on the Reforms isKcalculated using dataK N Agenda, of which 140 M A in addition to PSBs’ are incorporated in the J EASE Reforms Index. P cross- The Index r K r M Financials Services A from diverse data sources U A R own data, with rigorous A on EASEof J M checking to ensure P data consistency. In r Kand senior executivesNKin PSBs to track progress addition, in-depth reviews were held by officials M of Department A R and to identify best (DFS) with WTDs M practices for sharing P Awith other PSBs. Inputs K Ufrom these reviewsKA M included during the Jimplementation phase.R r AN Reforms Agenda wereU also K A A M P K U K Index provides allNPSBs a comparative evaluation Mr The andpeers on theP A K U M showing where K A Jbanks stand vis-à-visR A benchmarks Mr R Reforms Agenda. The r strengths as well AasNareas for improvement. Index follows a fully transparent scoring U M methodology, which A J A enablesbanks to identify precisely M their P r K all PSBs are enabled Through periodic N K M J scorecardsR U A M A KU updates andby providing bank-specific and inter-bank comparisons, toK keep track of their N K progress on key reform A MPSBs and also by A priorities across time. J The goal is to continue P driving r r change by spurringA M other. As a step inPthisdirection, healthy competition among U K encouraging them to learn A Rfrom each M K Nbank-level best practices M identifiedPSBs J R Mr in future. In addition, A IBA organised two workshops for sharing of best practices and moreA workshops willbe organised P A U among K best practices N from K EASE M U in the EASE Reforms Reforms Index have been A J recommended R to other PSBs. The bank-level r M Reforms Index has A are U K K Index chapter A P been K N M J Mr detailed of this report. The EASE r computed as at theA M period. end of Q3FY19, with FY18 U K asthe baseline to analyse A progress during the A R intervening P r K N M A J A R M A U K M laid for CLEANAJbanking Foundation U R P M rK A N K reforms undertaken N Kfor institutionalising M A J led to PSBs strengthening P r The A M membersby wayPof minimum 10 percent U clean credit culture have A K The reformsMhave also led to A R their lending policies and increasing r K exposure for participation. efficiency in consortiums N by limiting the number of consortium A R M appraisal mechanism P A K U independent data Mfor large (greater than PSBs putting U J₹50 crore) credit appraisals. in place a robust credit A R They are alsoM that leverages 5-6 diverse r K sources K M A J ensuring better accountability Mr crore). To deter PactsAofNwilful default, rPSBs A accounts (greater than ₹50 by segregating appraisal, monitoring and K U recovery roles in large-value K N have proactively checked more than 650 NPA cases above M AR J M P A U K A A R K Mr P AN K UM R Mr Mr PA N KU A J A R Mr R Mr NK M A J MA PA KU N K KU KA J A R Mr P A K U Mr ₹50 crore from the P A N K MU K A J R A Mr R angle of wilful default r A and have also initiated N U action. The reforms M have also led to A J A M P K N K and SMA 1&2 accountsrweremanaged by SAMVs PSBs adopting a focussed approach to NPA recovery and SMA monitoring by setting-up dedicated U M A J 89 percent ofNPA R M A U A K SAMVs. As of December 2018, r K as compared to 30 N percentK at the end of Q4FY1814 M crore in FY19tillAQ3,. Focussed measures J as compared to ₹48,497 undertaken to expedite P R crore recovery r A M till Q3 in FY18. ToPstep uprecord have led to PSBs effecting K recovery of U ₹98,493 K A