Government owned Indian Bank has declared bad loans amounting Rs 202.32 crore to seven domestic borrowers and $5.289 million lent to a foreign company as fraud.
Paying heed to concerns raised by several bodies over possible failure of millions of e-mandates or auto-debits with many banks not upgrading their capacities, the Reserve Bank of India (RBI) has extended the timeline by six months.
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The traditional microfinance-joint liability group (MFI-JLG) model has been one of the very few banking, financial services and insurance (BFSI) business models which has delivered a high return (20% plus return on equity RoE) despite regulatory, political, and other impediments. The MFI segment was worth less than Rs10,000 crore in 2011 and, today, has matured to Rs2.40 lakh crore in terms of portfolio outstanding.
But the microfinance institutions (MFIs), might not be able to replicate their growth rates due to structural issues, as per a research report by Edelweiss Securities Ltd.
The MFI business is susceptible to brief tough periods with potential to wash out returns generated earlier.
Quoting a source, the report says, The committee was upset over the officer’s failure to appear earlier and the message was conveyed to him in strong words that the committee is meant for the issues of special public interests and he will have to make himself available whenever summoned in future.
Gaurav Soni, an investor, had petitioned the committee alleging that millions of people had invested in PACL, which was not returning investors’ money. He also alleged high-handedness by SEBI in refunding money to investors of PACL.
As SEBI has detailed information about the company, the committee had summoned Mr Tyagi to understand the whole issue.