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Big banks will have enhanced credit capacity and global competitive edge, says Nirmala Sitharaman
In what comes as the second wave of the government’s efforts to revive the economy, Finance Minister Nirmala Sitharaman on Friday announced a slew of banking reform measures, including merger of 10 public sector banks into four entities. This would take the number of banks in the country from 27 in 2017 to 12, Ms. Sitharaman said.
These bank mergers, and the ones already carried out, will lead to the creation of big banks with an enhanced capacity to give credit, she said. These big banks, she said, would also be able to compete globally and increase their operational efficiency by reducing their cost of lending.
“We have chosen these banks for the mergers on the basis of ensuring that there is no disruption in the banking services, and that the banks should benefit from increased CASA [current account savings account] and greater reach,” Ms. Sitharaman said. “The banks that are being merged with each other run the same or very similar platforms, and so there will be no disruption in their activities.”
The largest of the mergers announced is that of Punjab National Bank with Oriental Bank of Commerce and United Bank. The amalgamated entity — to be called Punjab National Bank — will become the second-largest public sector bank in India, after the State Bank of India. It will also become the second-largest bank in India in terms of its branch network, with a combined total of 11,437 branches.
The second merger announced was that of Canara Bank and Syndicate Bank, which would render the merged entity the fourth-largest public sector bank. The merger also has the potential to lead to large cost reductions due to network overlaps, Ms. Sitharaman said, adding that the similar business cultures of the two banks would also facilitate a smooth transition.
The third merger is of Union Bank of India with Andhra Bank and Corporation Bank, the Finance Minister said, which would make the merged entity the fifth largest public sector bank. This merger would have the potential to increase the post-merger bank’s business by 2-4.5 times, she added.
Manufacturing sector takes a hit
India’s gross domestic product (GDP) growth rate slowed to a six-year low of 5% in the first quarter of the 2019-20 financial year, the government announced on Friday, led by a dramatic slowdown in the manufacturing sector.
The last time the GDP grew slower was in the fourth quarter (January to March) of the financial year 2012-13, according to data with the Ministry of Statistics. It grew at 8% in the first quarter of last year. The growth of Gross Value Added (GVA) stood at 4.9% in the first quarter of the financial year 2019-20, also the slowest in six years.
“The quarterly GDP estimates show that India’s GDP growth, while high, has shown some slowdown,” Chief Economic Adviser Krishnamurthy Subramanian told reporters. “This is due to both endogenous and exogenous factors. The impact comes, especially, from global headwinds due to the deceleration in developed economies, the Sino-American trade conflict, etc.”
The data show that the manufacturing sector grew at an anaemic two-year low of 0.6% in the first quarter of 2019-20, down from 12.1% in the same quarter of the previous year. The agriculture sector also saw a dramatic slowdown in growth to 2% from 5.1% over the same period.
The plight of the real estate sector was also highlighted by the slowdown in its growth rate to 5.7% in the first quarter of this financial year, compared with 9.6% in the same quarter of 2018-19.
Mr. Subramanian, however, highlighted the robust growth in the electricity and power generation sector, of 8.6% in the quarter under consideration compared with 6.7% in the same quarter of the previous year. “Electricity and power generation, which is a leading indicator across the world, grew by 8.6%, a good sign of green shoots towards higher growth,” he said.
“As the Economic Survey 2019 shows, investment is a critical driver of the economy with consumption being a key force multiplier,” Mr. Subramanian said.
Those excluded need not worry, govt. will help in filing appeals: CM Sonowal
On their toes: Security personnel patrol a sensitive area in Morigaon district of Assam on Friday. Ritu Raj KonwarThe Hindu
Five years, four deferred deadlines and ₹1,220 crore later, the outcome of one of India’s largest headcount exercises — the Supreme Court-monitored National Register of Citizens (NRC) of Assam — is scheduled to be published on Saturday. The final list of citizens will be uploaded on the NRC website around 10 a.m. An official statement with the data will also be issued around the same time.
The State has been anxiously awaiting the final NRC that is envisaged to quantify the number of illegal immigrants. The anxiety surrounds the number of people likely to be excluded from the 3.29 crore applicants. More than 41 lakh people were excluded from the draft NRC in two phases, of whom 3.61 lakh did not re-apply for inclusion.
The unease is more among people of Bengali origin. While international organisations and rights groups have panned the government for targeting migrant Muslims, Home Department officials said the exclusion list could have more Hindus.
Chief Minister Sarbananda Sonowal said certain forces were carrying out propaganda. “The exercise under the supervision of the Supreme Court will soon reach a conclusion, and I am sure everything will be peaceful. I want to assure those who will be left out that they should not worry. The government will provide help [to file appeals], and if there is any issue, they can get in touch through the district administration,” he said.
Jharkhand administration probe blames rodents for breach
It took 42 years to build a Jharkhand irrigation project, and then within 24 hours of its inauguration, the canal meant to provide water to 85 villages across Giridih, Hazaribagh and Bokaro districts was washed away.
The State administration has found rodents to pin the blame on.
The irrigation project in Giridih district was dedicated to the people by Chief Minister Raghubar Das on Wednesday. By Thursday, a major breach developed in the canal, causing extensive flooding in several villages.
“The initial probe suspected ‘rat holes’ causing damage to the canal,” said a government statement released on Friday.
Arun Kumar Singh, Additional Chief Secretary of Water Resources Department, tweeted that following the breach in the canal and damage caused to the crops, a high-level team, led by chief engineer of advanced projects in the department, has been constituted. The reports are to be submitted within 24 hours. The repair works are on.
In 1978, the then Governor of undivided Bihar, Jagannath Kaushal, had laid the foundation of the project, but due to several reasons the project got delayed. The cost of the project also escalated from ₹12 crore in 1978 to ₹2,500 crore.
The woman, who was traced in Rajasthan, had alleged sexual harassment by ex-BJP MP Chinmayanand
The Supreme Court on Friday agreed to the wishes of a woman law student, who had disappeared after levelling charges of sexual harassment against ex-BJP MP Swami Chinmayanand only to be traced in Rajasthan, to stay back in Delhi.
After a closed-door session with the woman, Justices R. Banumathi and A.S. Bopanna also directed the Delhi police to safely bring her parents too to Delhi from their native Shahjahanpur in Uttar Pradesh.
The court asked the Registrar to keep the woman and her parents incommunicado till the court takes up the matter again on Monday.
The court had suo motu taken up a letter from a group of women Supreme Court lawyers anxious about the safety of the woman. They had sought her production before the apex court.
On Monday, the Uttar Pradesh government counsel informed the Bench that the woman had been found in Rajasthan and was being taken to Shahjahanpur. The lawyer said the police convoy bringing the woman had already reached Fatehpur Sikri.
But the Bench insisted that the woman be produced before the Supreme Court during the course of the day.
The government counsel, after consulting with the State police officers, returned to the Bench, saying the woman could be brought here in under three hours.
Justice Banumathi said the Bench would wait for the woman to reach the court in order to interact with her in-camera. The interaction happened late in the evening.
The Shahjahanpur police had on Tuesday lodged an FIR against Mr. Chinmayanand after the student went missing following her allegation in a video clip that he had been harassing her. The woman also spoke about threats to her and her family’s life in the video clip.
Her father had filed a complaint with the police, accusing Mr. Chinmayanand of sexually harassing his daughter, a charge refuted by the BJP leader’s lawyer, who claimed it was a “conspiracy” to blackmail him.
The woman’s father had alleged that she went missing at the behest of the 72-year-old BJP leader, who heads the Mumukshu ashram. She is a postgraduate student in one of the colleges run by the ashram.
U.P. Director General of Police O.P. Singh on Friday said necessary legal action was being taken.
(With inputs from Omar Rashid)