Reserve Bank of India (RBI) governor Urjit Patel resigned Monday citing personal reasons. “On account of personal reasons, I have decided to step down from my current position effective immediately. It has been my privilege and honour to serve in the Reserve Bank of India in various capacities over the years. Urjit R. Patel 10th December 2018.”
Share price of Kotak Mahindra Bank fell by as much as 7.3% after it filed a writ petition against the RBI for forbidding the private lender to reduce its promoter holding to under 20% by issuing perpetual non-convertible preference shares (PNCPS). The lender had issued PNCPS to raise its paid-up capital to Rs 1,453 crore from Rs 953 crore, thereby bringing down promoter’s stake in paid-up capital to 19.7% from 30.3%. RBI has mandated the bank to reduce promoter shareholding to 20% of paid-up capital by 31 December 2018, and 15% by 31 March 2020.
Few minutes after Urjit Patel announced his resignation, Prime Minister Narendra Modi in his tweet praised the outgoing governor, saying that he is “an economist of a very high calibre with a deep and insightful understanding of macro-economic issues”. “He steered the banking system from chaos to order and ensured discipline. Under his leadership, the RBI brought financial stability,” Modi added. Finance Minister Arun Jaitley also tweeted after his resignation and said that his decision to step down has been acknowledged.
Uday Kotak said that the outcome of the controversial demonetization would have been different if it was planned well. Raising doubts on the logic behind introduction of Rs 2,000 note, the veteran banker said, “If you are taking out Rs 500 and Rs 1,000 notes, why would you introduce Rs 2,000 notes?". However he also attributed demonetization as a crucial factor for rise in financial savings. The executive vice chairman and managing director of the fourth largest private sector lender Kotak Mahindra Bank added that the small businesses are in a difficult situation at present and has welcomed the government focus to revive the sector.
RBI clarified that RBI Deputy Governor Viral Acharya has not resigned. A speech by Acharya in October had highlighted tensions between the government and the RBI on various issues ranging from lending curbs, more cash availability to the non-banking finance companies (NBFCs), to who controls the institution's reserves.
Arundhati Bhattacharya, former chairman of SBI, been appointed as the Chairman of SWIFT India Domestic Services, the local unit of SWIFT (Society for Worldwide Interbank Financial Telecommunication) global that facilitates international payments functions for banks. She will succeed MV Nair who retires after about five years of heading SWIFT India.
Public sector lender Punjab National Bank (PNB) has put up for sale two dozen non-performing assets (NPA) to recover dues of over Rs 1,779 crore. These 24 NPA loan accounts are majorly concentrated in Mumbai, Delhi and Kolkata zones of the bank. The accounts are intended to be sold to ARCs/NBFCs/other banks/FIs. The bids will be received through e-auction on the bank’s website. The last date for evincing interest in these accounts is December 10, PNB said. The e-bidding process will take place on December 21.