Capital requirement for PSBs remains critical, says Ind-Ra

Capital requirement for PSBs remains critical, says Ind-Ra
23/08/2016 12:41

India Ratings and Research (Ind-Ra) has said that capital requirements for the public sector banks to remain critical at FIBAC Summit 2016. India Ratings was the credit rating partner at the Banking Conference - FIBAC 2016.
India’s public sector banks have just seen the beginning of a painful clean-up process and are standing at a critical juncture in terms of their growth capital requirements, says Ind-Ra adding that their ability to contain their credit costs and garner the requisite capital would have a significant bearing on not only the sector but on the economic recovery trajectory for India.
Based on these developments India Ratings prepared and released a compendium of Banking reports including a report on the growth trajectory of public sector banks ‘PSBs to Grow at 9% over FY16-FY19 - Slowest in Last Two Decades’ as well as its ‘FY17 Outlook on Indian Banks’.
India Ratings’ research was widely discussed during the summit and notable speakers namely SS Mundra, Deputy Governor, RBI referred to our agency’s Refinancing Risk report ‘Rs 1.4 trillion Refinancing Requirement Could Put Rs 11.8trn Debt at Risk in FY17’ in his speech. Also Melwyn Rego, Managing Director and Chief Executive Officer of Bank of India, spoke at length about our analysis on the capital requirement for public sector banks while making his presentation.
The two day-event held on the 16-17 August, 2016 in Mumbai to explore the New Horizons in Indian Banking, included presentations and panel discussions on capitalization challenges and new Basel norms for the new frontiers in risks, to new ways for credit and monitoring in the new age world.
“It was an enriching experience with stalwarts from the banking and financial services sector discussing critical ongoing as well as future challenges and possibilities for the Indian banking system”, said, Soumyajit Niyogi, Associate Director, Credit & Market Research Group, India Ratings.

Land titling law to ease land acquisition process, says Ind-Ra

Land titling law to ease land acquisition process, says Ind-Ra
20/04/2016 14:48

The Rajasthan Urban Land (Certification of Titles) Act, 2016, passed by the Rajasthan Legislative Assembly this month, will significantly smoothen the land acquisition process in urban areas, says India Ratings and Research (Ind-Ra). Rajasthan is the first state in India to enact a law on property titles, where the state will stand as a guarantor for land titles and provide compensation in case of issues of defective title. Ind-Ra believes that the adoption of similar laws by other states can meaningfully shorten the time taken for acquisition of urban land for infrastructure creation by public bodies or for real estate development by private players and bring down overall project cost. The Act provides for the State Government to stand as a guarantor for the permanent certificate of title issued for urban land by the Certification Authority after perusal of documents. The Act also provides for compensation to any person who enters in to a transaction on the basis of a permanent certificate of title, in case the title later turns out to be defective. These provisions will lead to clarity in land titles and will reduce legal challenges, thus reducing the effective cost of land and shortening execution timelines. The Act is a marked improvement over the current situation where the land title is authenticated based on a series of documents of successive transfers, without any guarantee of the actual title and the buyer’s investment is exposed to the risk of complete loss, in case the title later turns out to be defective. Given the uncertainty as to land title, buyers go through a long process to authenticate the titles, but often end up facing legal challenges, thus delaying the execution of projects and locking up capital. This titling reform by Rajasthan comes at a time when the government has embarked on a mission to push for urbanisation with various schemes namely, development of smart cities, the Atal Mission for Rejuvenation and Urban Transformation and housing for all. Under the Act, the state government will set up an Urban Land Title Certification Authority, which will seek all the documents from the landowners, and will verify it against the records held by the state. The authority will then issue a provisional certificate of title for a period of two years without guarantee and follow it up with a permanent certificate of title to which the government shall stand guarantor.