Plan and Policy

Plan & Policy

Less than half the households know about crop insurance

Despite the government and the regulator hard selling crop insurance, not even half the rural and urban households are aware of such an insurance, finds a survey of the Insurance Regulatory and Development Authority of India (Irdai).
Only 35 per cent households are aware of crop insurance, as per the post-launch survey of Irdai’s insurance awareness campaigns. The awareness is higher in rural areas (39 per cent) than in urban areas (32 per cent).

Corporate insurance cost skyrockets as insurers unanimous on minimum rates

Corporates for the past 10 years have been enjoying steep discounts while buying insurance for their assets. Now, they see premiums shoot up by as much as 800 per cent. The increase in premium cost is on account of insurers agreeing on minimum threshold rates for seven sectors that have been registering huge claims and losses for several years.

Crop insurance yet to take root

Despite the attempt to promote crop insurance, not even half of the rural as well as urban households are aware of such a scheme.
Only 35 per cent of the households are aware of cr­op insurance, as per the Irdai survey between 2010 and 2015. The percentage of households that are aw­a­re of crop insurance is higher in rural areas (39 per cent) against urban areas (32 per cent).

RBI sees trouble ahead in loans to telcos, asks banks to raise provisions

With the financials of telecom companies deteriorating, the Reserve Bank of India (RBI) on Tuesday raised a red flag over bank loans to the telecom sector and asked lenders to make higher provisions even if the accounts are standard.
The central bank noted that the telecom sector is reporting stressed financial conditions and the present interest coverage ratio for the sector is less than one. The RBI asked bank boards to review their exposure to the telecom sector latest by June 30. Banks have also been asked to closely monitor their exposure to the sector.

Rupee runs into seasonality wall after best Q1 since 1975

The rally that’s made the rupee Asia’s best performer in the past three months is threatened as the Indian currency enters a seasonally weak period.
The rupee has declined in each of the last seven April-June quarters, with its performance often marred by a periodic increase in India’s gold demand. This time, rising Brent crude prices are also seen weighing down the currency. Asia’s third-largest economy is the world’s second-biggest buyer of the precious metal and relies on imports for about three quarters of its oil needs.

Irdai lessens third party insurance burden

Insurance sector regulator Irdai on Monday reduced motor insurance premium rates in most of the segments like two-wheelers, cars and trucks by modifying the rates for 2017-18 issued three-weeks ago.
The modified 'premium rates for motor third party liability insurance cover' will apply retrospectively from April 1, the Insurance Regulatory and Development Authority of India (Irdai) said in an order.
However, the premium rates for the current fiscal are higher than those of the previous year.

Bad loans, other challenges seen hurting Q4 earnings of banks

The fourth quarter of financial year 2017 will continue to be a challenging quarter for banks. Moderate loan growth, surplus liquidity, decline in trading gains sequentially and lack of resolution of bad loans would dent earnings of banks. However, retail-tilted and mid-sized private banks would continue to outshine peers as seen in the previous quarters.

Many curbs if banks exceed bad loan limits

The Reserve Bank of India (RBI) on Thursday released the revised prompt corrective action (PCA) framework that is aimed at faster resolution of bad loans.
The central bank said under the revised framework the capital asset quality and profitability would continue to be the key areas for monitoring. The indicators to be tracked for capital, asset quality and profitability would be capital-to-risk weighted assets (CRAR)/ common equity tier I ratio, net NPA ratio and return on assets.

Private sector banks better placed to explore M&As

Talks around consolidation in the banking sector have gained traction in the recent past following comments at various forums on the need for having a few large banks. The merger of the associate banks of State Bank of India and Bhartiya Mahila Bank with State Bank of India and the news on likely consolidation in the private sector as well have further fuelled the debate on consolidation.

Investor’s choice: Small banks that give hefty returns

Most small bank stocks which have market capitalisation of less than Rs 20,000 crore have outperformed the benchmarks Sensex and Nifty Bank in the year to date (YTD) period with returns in the range of 10 to 68.91 per cent.
The Sensex has given year to date return of 11.87 per cent as on April 11, 2017 while Nifty Bank, a benchmark for bank stocks, has given YTD return of 19.57 per cent as it closed at 21,736 on April 11, 2017.